The Ramsey Show - App - Never Buy Extended Warranties! (Hour 1)

Episode Date: December 30, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America, because it's all about you. It's a free call, and some say the advice is worth what you pay for it. The phone number is 888-825-5225. because it's all about you. It's a free call, and some say the advice is worth what you pay for it. The phone number is 888-825-5225. That's 888-825-5225.

Isaiah is with us in Columbus, Ohio. Hi, Isaiah. How are you? Hi, Dave. How are you? Better than I deserve. What's up? Same here.

You're kind of on a constant loop in our home. My daughter calls me Uncle Dave. Uh-oh. So I wanted to know, we watch that a lot, and one of the shows, someone said something about alpacas, and at the time you laughed and thought it was pretty funny, apparently. But I just wanted to know, since my wife and I were saving up and working to start our own ranch and raise alpacas, I want to know if you knew something that I didn't, and maybe I should change course or something. I don't even remember what you're talking about, but I guess I can comment on alpacas. I think we were talking about emus, weren't we?

I believe so. Yeah, there was a bunch of people went broke several years ago because there was this emu fad, and a bunch of people bought emus, and then there was supposed to be this huge demand for the meat, and it was basically a bunch of crap. There was no demand for emu meat, and pretty soon people just had dead emus everywhere. But, you know, alpacas, I mean, I'm not an expert on alpacas. I'm not even an expert on ranches. But from a business perspective, I think you're entering a pretty narrow market.

Agreed, yes. And you better really know your stuff, and you better really do this. You can't do it just because you read in some article about alpacas are making people rich, because they're not. I mean, any more than cows are making people rich cows make people pretty poor all the time and some of them they make people rich but it has to do with running a business called cattle you know and it's a business and when it ceases to be a business it starts to be a fad or never becomes a business because all it is is a fad, then there you go. So what is the deal?

What do you get out of alpacas? What's the end product? The end product is the fleece. You can turn it into sweaters and socks and so forth. It's very similar to cashmere in the quality of the fleece. Um, and, uh, there, you can also breed and, uh, of course sell them, um, and show them and all that. Um, but it's almost completely about the fleece. Uh, and the big part of it is it's a hypoallergenic and stuff. So, uh, with everybody that everybody that has allergies, my children, for example,

have allergies. And are you a rancher? Have you been in agriculture and ranching before? No, this would be my first venture into it. So why would you take your first venture into ranching and do it with a very narrow product line? Well, that is actually the second half of it. The first I'll be starting with is goats, and I don't have all of the expertise myself. It's a good friend of mine who does, and we're going to be working together. And has made lots of money on alpacas and goats. Not alpacas. That's a different thing. But the goats, they did in their native country, yes.

Okay. All right. Well, I mean, it sounds like you're going into something you're inexperienced in, and obviously I'm going to tell you don't borrow money to do it because whatever money you may put into this may go away. From a business perspective, you've just got a very narrow demand product line that the general public is not aware of. And so it's not like your cow hides leather, obviously, would be a completely different thing, a broad market for that.

Or wool, obviously, there's a broad market for that and so forth. But if you've studied the market and you understand whose thing i don't want to just trust a guy who once raised an alpaca halfway around the world and his family did that for two generations or something that's that is a bad idea i mean you're in the united states and you think about you need to understand exactly how this is going to turn into money and how like likely it is because you're talking about a business here. But you can't get enamored with hypoallergenic narrow market stuff because your kids have allergies.

That's a good way to lose all your money. So you need to look at the business aspect of this. Where does this turn into money, and how many steps does it take to turn into money, and how much money does it turn into and how likely is it to turn into money and because it scares crap out of me you're in a really narrow market a fad like market and it sounds like you've got a guy from another country who has come along and told you goats and alpacas worked in another market and another country and now you think they're going to work in columbus ohio i just i don't know. Again, I'm not an expert, but it just sounds

weird. So I would want to know a whole lot more about it. If somebody brings something in here that feels weird to me, usually I find out the reason it felt weird is because it was weird. And so you just kind of got to get down into it and go, okay, what's the problems with this? What am I not seeing? What are my blind spots? And really study it, because otherwise every dollar you're putting at risk here could be gone. Veronica is in Texas. Hi, Veronica. Welcome to the Dave Ramsey Show.

Hi, Dave. I'm such a fan. Sorry I'm nervous to talk to you. Thank you for taking my call. Sure. How can I help? Well, a few years ago, my mom needed dental work, and we had just moved in with her. And so I figured I might as well help her.

So my husband got a credit card for $9,000 out under his name. It's a medical credit card. You can only use it for medical things. And she was making the payments on it. And she paid it down to $5,000. The payments are like $250 a month. And lately, she's been getting slower and slower making the payments on it. And she paid it down to $5,000. The payments are like $250 a month. And lately she's been getting slower and slower with the payments. She would have faltered by now, but sometimes we'll pay it for her and she pays it back.

The thing is, we're trying to get on the baby steps to get out on our own. And every time that we're kind of ahead... You still live with her? Yeah, we still live with her. How long have you lived with her? We can't get on our feet. Well, the first... We've been here for, like, I want to say five, six years,

because every time we get on our feet to move out, my mom's really bad with money. She does pawn and, you know, check blenders, all of that. So she takes all your money every time? And we will pay the payments or come up with the payment or something. Like, we bail her out, and then we are stuck living here again. And so this time I haven't said no, we're not going to pay. So it sounds like she's sabotaging everything so you stay.

Yeah, that's how I do that. So you need to move. Like, no matter what, even if we don't have all our... Don't you both have jobs? I stay home. I have two babies. My husband works. And what does your husband make? He makes about $30,000. Go get an apartment.

Okay. You're not going to do that, are you? You're not going to do that, are you? You're not going to do that, are you? As long as you stay there, I can't help you. As long as you stay there, I can't help you. Because you are in a cycle. You know what the cycle is, and you're refusing to deal with the cycle. Every time you get ready to move out, your mother takes all your money.

And you've been living there five freaking years. It's time to leave. Now. Then you're going to end up paying this dental credit card because you were stupid enough to put it in your name and do it. You get to pay stupid tax. I've done a lot of stupid stuff in my life. And every time I write one of those checks, I call it stupid tax. You're getting ready to write a $5,000 stupid tax check.

After you move out and work your own dead snowball and your husband's working three jobs and you're working one. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry,

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Katie is in Baltimore. Hi, Katie. Welcome to the Dave Ramsey Show. Hi. Thank you. Thanks for taking my call. Sure. What's up?

Well, I'm trying to figure out, my husband and I are trying to figure out if we should pay off our house. We're in baby steps four, five, and six, thanks to your program. And my husband just turned 60 last month. So we are wondering if we should, now that he can access his retirement savings, and he probably has five to ten more years, God willing, to work. But we're wondering if we should take from his retirement savings to pay the house off. How much is in your retirement nest egg? About $330 plus an additional $140,000 in pensions.

Okay, and that will be rolled over into IRAs when he retires? Yeah, I guess. Yeah, that's what I would do. That's what you do, okay. But not until he retires. So what's your mortgage balance? We owe $182,000 on the house. Okay. So I know it would take our pension way down

it's not your pension it would take our retirement down to like 150 yeah um and what's is what's your household income um we make um just under 200 000 yes I would pay it off. You would? Yeah. You've got such a great income that with no house payment, you're going to be able to max out all your retirements and invest heavily, and you're going to have money back piled up like nobody's business. What's the home worth? What's the home worth?

Probably $275,000. Okay. All right,000. Okay. All right. Good. Yeah. So we currently pay a lot for his, like through work, we pay a lot for his life insurance because he has diabetes and sleep apnea. So we have very little outside of work. So that's another reason I kind of am wanting to do it yeah yeah but and

here's the other thing um you know once you reach a point that with the house paid for that there's enough of a nest egg that if he were to pass away you would be financially okay that's the point that you're self-insured and you would drop that life insurance okay since you're paying a lot for it especially yeah so once you once you have enough of a nest egg upon his death with a paid for house for you to be okay at that point that's called self-insured okay now he's turning 60 he just turned 60 last month so with those two chronic issues do we still start the long-term care insurance or will that be exorbitant and we pursue being self-insured uh no i would make sure you had long-term care insurance you still would no matter how much it costs well not not no matter how much it costs

but i would look at it very very strongly i mean i don't know what the expense is going to be based on that but you know the problem is if he goes into a nursing home you've got hundred and something thousand dollars laying there in a paid for house that's not going to leave you in a good situation yeah you need you need that nursing home to be covered today now again you look up you look up five ten now, and you've got a million dollars, which you should have in investments with a paid-for house, and your net worth is approaching a million and a half. If you want to self-insure at that point through a nursing home stay and drop that, that would be fine. And somewhere along the way, you would have dropped your life insurance, too,

which would also help pay for that. Then that would be fine. But the point is, if you think about the event event occurring whether it's death or a nursing home stay where does that leave you and today in neither case does it leave you great it leaves you good but not great so only time we drop the insurances or when we're in great mode. So today I pay off the house. A, B, I'm only doing that if I'm firmly committed to building this next egg really, really rapidly using this fabulous income that you have. And C, you keep the life insurance in place for today. And D, you put your long-term care insurance in place today.

And then we drop the life insurance as soon as there's enough money to cover upon his death. And then later on, if you've got enough piled up and you want to drop the self-insure through the long-term care insurance later, through the nursing home stay, later you could do that. But that's probably out there a decade or so away. You're probably buying that for about 10 years before you can get there with the numbers you're giving me. But you're doing really, really good. Very well done. Let me give you a copy of Chris Hogan's book.

It will guide you through this process. It's called Retire Inspired. Number one best-selling book. So hold on. I'm going to send you a copy. Amanda is with us in Oklahoma City. Hi, Amanda. How are you? I'm doing doing great how are you doing dave

better than i deserve what's up in your world hey okay so my husband and i are 25 years old and the only non-mortgage debt we have is a student loan payment or a student loan of about fourteen thousand dollars good we have yeah i'm We have $27,000 in our savings now. Pay it off. So you would say pay it off completely. Today. Today. Okay.

That was simple enough. Yeah, it's real easy. And you got $13,000 and you have no debt. And you're 25 years old. Yeah. And your household income is what? About $40,000. Awesome.

So would you say, okay, so we would still have a mortgage, house debt. Yeah. Would you say put the rest of that towards the house? Nope. Or keep that as an emergency? No, you need an emergency. Baby step one is save $1,000. You've done that.

Baby step two is use everything above $1,000 and become free except your mortgage that's what i just did baby step three is a fully funded emergency fund raising your one thousand dollar account up to three to six months of expenses i think that's thirteen thousand yeah that's your emergency fund you don't touch that for anything anything you do not buy stuff with that money. It's there for a rainy day. If you want to buy some stuff, you've got to save up beyond that. If you want to buy a car, you want to buy a couch, you want to go on Christmas or go on a vacation, you've got to save up above that $13,000 in a separate account.

That money you don't touch. Okay. And then we move on to baby step four, which is we start investing now to become wealthy. So you would start investing before the house is paid off and after all the rest of the debt is paid off? Yes. What we call baby step four is 15% goes into retirement. And then above that, any money you can scrape out of your budget, you put towards the house and pay off the house. Okay. And you work your way that way. The house is towards the house and pay off the house. Okay.

And you work your way that way. The house is what we call baby step six. Hold on. I'm going to give you a copy of the book outlining all of this. It's called The Total Money Makeover. But you need to be debt-free by the end of business today. Hold on. I'll have Kelly pick up, and we're going to give you a copy of that.

Open phones at 888-825-5225 rashid is on twitter following me at dave ramsey 800 and something thousand of you do thank you for hanging out with me i have a 12 year old house should i get a homeowner's warranty no no you never buy extended warranties on cars, electronics, or houses. Here's why. Eighty-seven percent of what goes out the door on a warranty goes to cover overhead and profit and commissions. Only 12 to 13 percent of what you pay actually goes to cover the statistical probability of the breakdown. That's the averages. These things are almost all profit and commission to the person selling them. Extended warranties at Best Buy, rip off.

Extended warranties at the other electronic stores, rip off. Extended warranties at the used car lot, rip off. Extended warranties on a home, rip-off. They don't work. The math does not work. It is not a good buy. You are better off to take that 12% risk on that item and self-insure through that by having a good emergency fund as a result of having not paid out all your stinking money to extended warranties you can buy an extended warranty on a freaking pencil at best buy they put an extended warranty on anything they'll put one on you if you walk through the line

it's unbelievable no it's a good place to buy electronics they got good prices but no extended warranties no extended warranties on your homes, your cars, your electronics. Bad math. Bad math. Hope I wasn't unclear. This is the Dave Ramsey Show. Support a small business this holiday season that does business right. I'm talking about Grip6 Belts. It's the only belt you can get online with no holes, no flap, and no bulk.

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to get 35% or more off GRIP6 products. GRIP6.com. In the lobby of Ramsey Solutions, Virginia is with us. Hi, Virginia. How are you? Fantastic. Thank you. It's an honor to have you. Where do you live? I live in Marietta, California. Whoa, San Diego area. Yes.

Wow. That's a bit of a trip over to Nashville. Yes, but well worth it. To do your debt-free scream in person. Yes. I love it. Well, we're honored to have you. How much did you pay off? Thank you. $63,314.50. Excellent. How long did this take? It took me 20 months. Good. And your range of

income? I started off with my main job and second job at a little over 94k. And I ended just last year with both jobs at around six, a little over 116. Wow. Excellent. So what do you do? I'm a compliance analyst for a California electric utility. Great. And your side gig? My side gig, I had two. I worked at Amazon and I worked a retail job. Am I allowed to say what retail job it was?

I worked at TJ Maxx. Okay, cool. So which paid better? My main job. You mean of the two side hustles, which one was good? The second job, TJ Maxx. Okay. Yes. Good.

Very good. And I just wanted to say, too, I also made an additional $1,532.85 on the selling app offer up, just from stuff hanging around the house. Oh, good. Okay. Yeah. So what kind of debt was the $63,000? Well, I had a closed cable bill.

I had about $6,000 on credit cards. I owed the IRS $5,400. I had two 401k loans, a little over $20,000. Yes. A car loan at $12,000. A personal line of credit at about $15,000. And personal loan from my sister of about $15,000. I mean, not $15,000.

I'm sorry, $1,500. You were like normal. Yeah, I was really normal. Yeah, you just had a little bit of debt everywhere and just kind of be bopping along. And what happened 20 months ago? Flipped your lid. Something happened.

Yeah, it did. It did. I was turning 50, Dave. It was a milestone birthday. And I wanted to have like a party reception style and invite my family and friends. I started looking into the cost of that and found it was just going to cost too much. So I went and chose a cheaper alternative, an all-inclusive vacation to Cancun, Mexico.

Okay. Yes. Before I was about to leave, I sat down to pay my bills for the month and I was looking at my checking account and it was really low. It was so low that I had to put one of my utility bills, a water bill, I believe, on a credit card. And I was sitting there thinking, I'm about to turn 50 years old. I've been working since I was 16 years old, and I'm putting a utility bill on a credit card. And I'm going to Cancun.

And I'm going to Cancun. Yes, yes. So I decided, oh gosh, I'm sorry. I'm nervous. That's OK. You're doing good. So I can feel right where you are. I can feel it. This is your 50 years old. You're getting over this. This is you're having an I've had it moment. I'm hearing it. Yes. Yes. I was really I was disgusted and I was embarrassed. Although no one, anyone really knew except for my sister of what, you know, the circumstance I was in, I was really embarrassed of myself. And I said, you know, I know how to dig out of this hole cause I'm not afraid to work at all.

I can dig myself out of this hole and I will when I get back from Cancun. Um, but what, what am I going to do to not end up here again? Because I've done it. I did it time and time again. And so I went on. I had to borrow money from my sister for the trip to kind of stay afloat for the rest of the month and to have a little bit of spending money in Canton to at least tip and go on a couple of excursions.

So she lent it to me. But you know how you say you need someone to tell you the truth, someone that's not afraid to hurt your feelings? That was my sister. I love her already. That's great. She knows how much I make. And she says, this doesn't make any sense.

She goes, where's your money going? We have to do something about this. And I remember getting mad. And I was like, we don't have to do anything. I have to do it. Are you going to lend me the money? And she did. She lent me the money.

And so we went to Cancun, had the best time of my life. My birthday was fantastic. But if you look at the picture in Cancun, I looked great. I had lost a lot of weight. I was feeling healthy, but I was broke. I was broke. Thank goodness. I was feeling healthy. But I was broke. I was broke. And thank goodness the trip was all inclusive. So we got back.

I knew it was about to be holiday season. And I applied to Amazon because they were hiring, of course, you know, like gangbusters. So I got a job there first. I had posted on my Facebook page. I said, I made a financial mess of things and it's my responsibility to clean it up. And a dear friend, Tracy, she commented in my post and she said, hey, I have the materials to Financial Peace University with Dave Ramsey. Do you want to take the course with me? And I said, Dave Ramsey, I know know him I know you through Beachbody because I have your book on

leadership yeah and I said but I didn't know the total money makeover or the financial peace university um Dave Ramsey so I immediately went on your website I was about to leave for that second job that night I went on your website researched everything um saw um the classes and um I saw that um you had a podcast so on the way to work saw that you had a podcast. So on the way to work that night, I downloaded the podcast. And there was a single mom who was a nurse doing her debt-free screen. And she went through her story and it really resonated with me. Her family was helping her.

She was working like gangbusters. And I said, first time I had hope. I said, this is the answer to my question. And so I went on to work that night. And I said, first time I had hope, I said, this is the answer to my question. And so I went on to work that night. But also, I heard when you were interviewing her, walking through the store, you were talking about the baby steps. Listen to them. Baby step one, $1,000.

Two, smallest to largest. I could do that. And you said, this is when it clicked you said you're getting out of debt is 80 behavior and 20 head knowledge and it clicked fireworks are going off in my brain because i relate i had up to that point i had lost about 70 pounds and i didn't think to apply those principles to my money this is the answer to to what I needed to change my financial life. So I went on to work and the rest is history. That's called hope. Yes.

That's fun. Yes. Very cool. Yes. So what's the key? Tell people how to get out of debt. What do they got to do? The key, I mean, honestly, for me, taking your nine-week course, Financial Peace University,

it was everything. It was a game changer being among other people because i'm single um it was so awesome accountability and encouragement yes absolutely and if you see me i mean i was i was running a little late to the class and if you see me if kelly's showing the picture i'm i have that kit grit and i'm like i'm gonna get to get in here. And I got in there. And when I sat down and heard everyone else's story, it was just I had even more hope. And then I found out, too, I'm not the only financial hot mess in the world. You know, I'm not by myself. So that removes the condemnation, doesn't it?

Yes. Yes. Good for you. Good for you. good for you well done i'm proud of you thank you thank you i'm sure your biggest cheerleader was your sister yeah absolutely she even came with you all the way over here to do the debt-free screen she did she did her name is catrice way to go catrice i love it you're not only a truth teller you're a supporter yes very good yes very cool yeah congratulations thank you dave very well done

we got a copy of chris hogan's book for you retiring not retiring inspired i've been doing that too many years it's dialed in my brain everyday millionaires because you're going to be one thank you thank you you're on your way thank you i just wanted to say too i at some point i did um audio listen to um chris's book and that really opened up what I was doing even more for me because I have a very good job daytime job and the power of the income as you talk about I just saw it even more clear and I'm just I was hoping to be done with baby step three by now but my check hasn't posted yet. You'll get there. I love it. Well done, Virginia

from San Diego. $63,000 paid off in 20 months, making $94,000 to $116,000. Great story. Count it down. Let's hear a debt-free scream. 3, 2, 1, I'm not free! Yes, she is, baby!

That's how you do it right there. You get sick and tired of being sick and tired. And the people you love will come around you and lift you up and help you win. And we're one of the people that love you. We want you to win. This is The Dave Ramsey Show. We'll see you next time. Thank you for joining us, America. Scott's with us in Oregon. Welcome to the Dave Ramsey Show, Scott.

Hi, Dave. Thank you for taking my call. Sure. What's up? So I'm trying to decide whether or not I should stay in college or whether you'd advise any other changes to my financial plan. The reason why I'm asking is because I'm kind of getting a late start to college. I'm 39, and my wife and I are in baby step two right now. I'm not using debt to pay for college. In fact, I have private scholarships,

and I get kind of check about every six months for $2,500 to $3,000. So how much is college costing you out of pocket? It's not costing me anything out of pocket. Okay. Then why would you quit? So because, so I could, I could move towards baby step three faster if I focus on working extra jobs and things like that. Oh, I got you. Okay. What are you studying? IT. Okay. When will you graduate? In two and a half years. Okay. And you're how old? I'm 39. And your household income is what? So last year we made about $75,000 combined. I also started driving Uber this year, and so I'm bringing in an extra $500 to $1,500 a month.

Good. But I'm not sure if I can continue at that level with Uber and also continue to focus on my studies as much as i need to okay all right and well you need to focus on them enough to graduate but i'm not that worried about your gpa i got a whole lot of it people working here i've never not hired someone because of their gpa the question is can they do the job that's all i want to know right right and that's what i'm after and as a hiring employer and um yeah i already work in it since i've been in for four years i'm just trying to fast track my career with the degree and so your gpa doesn't matter

then and again i'm not trying to destroy your grades but if you make a B or a C instead of an A because you're earning some extra income driving Uber, oh, well, that's my point. But obviously, if you flunk out, we can't do that. So you got to finish. So that's what you've got to gauge on your own thing. No, I think you stay in school. I think this two and a half years is a really tough time of your life while you clean up debt, your household, and you guys are making some, you're doing a lot of things at the same time. You're getting out of debt.

You're trying to finish school. You're doing all this stuff. You're just burning the candle at both ends. But you can survive that for a short period of time. And two and a half years is not 20 years. It's two and a half. And you're not being deployed to Afghanistan. You're just going to school and driving Uber.

Right. So this is doable. You can do this. And I think you make it, man. I think you make the turn, and you keep working at it, and you guys keep budgeting, and you keep trying to find every way you can to cut expenses and increase income while you finish this degree. And is there any way we can fast-track the degree?

That's the other thing. Can you get out any faster? And then what does all that mean to your income? It should mean something to your income. I suspect it will. Jonathan is with us in Lynchburg, Virginia. Hey, Jonathan, welcome to the Dave Ramsey Show. Thanks for having me, Dave.

Sure, what's up? Yeah, I was wanting to know just, like, how to get started on paying off my student loans. Okay. Do you have any other debt? No, sir. How much student loan debt do you have? $29,000, roughly.

Cool. How old are you? 23. Cool. So you just get out of school? I quit university roughly a year and a half ago, going on two years, and picked up a year and a half program at community college and finished that. So you're finished? Yes, sir.

And your degree is in what? I got a welding certificate. Okay. All right. And so are you a welder? Yes, sir. Cool. What do you make?

Roughly $29,000 net. Okay. And you just started, right? I've been about six months. Yeah. Okay. Any opportunities for overtime or side gigs? Right now, I'm at a new job. I was at the old job for five months and upgraded and have been at this one for a month, so not a whole lot of room for overtime. Not yet, okay. But you've already seen

a way to increase your income by looking around and thinking about what I can do with my welding certificate that makes me more money, right? Yes, sir. Keep asking that question over and over because we need to add as much income. I take it you're single. Yes, sir. Do you live at home with your parents? No, I live with one roommate. Okay. And you said the only debt you have is the student loans? Yes, sir. Okay. What I'm going to prescribe to you is a tough gig.

How many hours are you working, 40? 40. Cool, okay. If it's not welding then on the side, I want you to pick up another side gig of some kind, increase your income. Okay. And I want you to get on a written budget. Go to everydollar.com. Download the Every Dollar Budget.

It's the best budgeting app in the world. It's free. Download it for your phone and or your computer and use it for free. And you give every dollar of your income an assignment before the month begins in that app. And that's your plan. You lay the plan out you plan and then you work the plan and you stick exactly to that and you have no life all you do is work and pay debt and if you do that you can be debt free in two years okay but you're going to have no life i mean you're not going to be out partying on friday night right your friends are going to think you're going to have no life. I mean, you're not going to be out partying on Friday night.

Right. Your friends are going to think you're crazy. Yeah. And you're going to be getting out of it because you're going to be working, and you're going to be getting out of debt. But $15,000 a year, you probably can make that as your side job. And delivering pizzas, you can make that three, four nights a week okay and um and you just work your butt off and throw it all at the debt and make all the money that comes in behave no wasted motion

everything's everything's mathematical efficiency and that's what the budget does and the more you do that the faster you'll get out you actually can probably get out of that in about 18 months by doing by doing what I'm talking about. Because you only got $29,000 in debt. $15,000 a year for two years gets you out of debt, but you can do more than that because you don't need your whole 29 to live on now. Right. I do also want to add on that my dad also has parent-student loans that I'm currently helping him pay.

Was that your agreement? Yeah. When he took them out originally, the agreement was that you would pay them? It wasn't so much a spoken agreement when it happened, but he's always helped me, and once I started working, we've just kind of helped each other. And how much is that debt? I think it's around $18,000.

Okay. Well, let's pay off your $29,000 first. If you want to give him some money as you go along, that just slows down how fast you get out of the $29,000, but I wouldn't pay extra on that other loan until you get your $29, 29 cleared up. Because that's not your loan. That's his loan. And we've got this weird sort of handshake, maybe, agreement that you're responsible for some of it.

And I think you probably need to clarify what your moral responsibility is on that other loan with him at some point. You don't have to do that today. But what is our agreement here, dad? What is your expectation of me on this loan? Because I don't feel like I'm on the hook for all of it. And I don't really want to, you know, if I got, if I came into some money, am I supposed to write a check and pay off 18,000? You know, what am I supposed to do here? And you need some clarity on that. It's all a moral agreement with your dad because you're legally not responsible at all. A parent plus loan, your name's not on it.

It's his name. But if you feel like you have promised him, then you would want to keep your promise. That's the moral aspect of it. But I think there's a lot of fogginess around what your actual obligation there is. Some point, again, in the coming months, as you're getting close to paying off your 29, then you kind of need to quantify exactly when you are going to be done by knowing exactly what of that loan you are responsible for. And that's how I would look at this. So, hey, good question, man.

You got this. You can do it. Appreciate you calling in. This is the Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.