The Ramsey Show - App - Normal is Broke. Choose to Be Weird! (Hour 2)

Episode Date: November 23, 2018

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Thank you. Live from the headquarters of Ramsey Solutions, 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. You jump in. We'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225.

Chris is with us in Denver. Hi, Chris. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for having me. Merry Christmas. Merry Christmas to you. How can I help?

So I'm in a bit of a particular situation. You're not going to be happy with me, but that's okay. I have about $33,000 worth of debt on credit cards, and those are business credit cards. I've since closed down my business because it just did not work out anymore. And then my wife and I have a personal car loan of $20,000. I recently also lost my job, so our income is now down to $40,000. And so I'm considering going to school to become a software developer, and that school is seven months long. And once I get out of school, I will be making around $80,000. So I just don't know what to do. I don't know if I should pay off all this debt first or if I should go through school

in the seven-month time period and then just dramatically make more income once I'm out of school and employed. How are you going to pay for school? We have a bit of financial assistance with my parents, and then my wife and I also have about five grand saved, and then we would cash flow the rest of it. What do you mean, a bit of financial? Your parents are going to give you some money to go to school?

Yes. How much? Probably just a couple thousand dollars. So what does school cost? It's $18,000 for seven months. Okay. And all I heard was $8,000. And you're going to cash flow $10,000 with a household income of $40,000?

Yes. I don't think so. Yeah, most likely not. Doesn't sound like to me that that math works. I could be wrong. Okay. Especially paying a car payment on a $20,000 car. Which is a $500 monthly payment, yes.

Yeah, I could guess that. So I think the that, yeah. So I think the car is gone. Might as well sell it either way, regardless of whether you go to school or not. Okay. Because it's in crazy land. And, by the way, you discovered that there is no difference in business credit cards and personal credit cards, didn't you? Yeah.

Because you personally signed on those cards. You just happened to use the money for business instead of going to Europe. But just the same, it's just personal credit card debt. Okay. I mean, there's no difference. You signed on it. You guaranteed it. The law doesn't see any difference. It doesn't call it this.

So I'd like for you to go to school. How many hours a day are you in school? So the school is very intense. From what I'm hearing, it's about 60 to 80 hours a week. Wow. That is intense. Okay. Yeah.

Well, that's the seven months, I guess, huh? You're just doubling and tripling up. Okay. So that doesn't leave much room for you to do much work. I would like for you to do that. Sell the car and just barely dink the minimum payments on the credit cards, cash flow, get through the school. I'm not sure if y'all can do it or not, mathematically.

So pick up another $10,000 worth of income somewhere during this time that she does or you do, even though those hours are incredible and intense and all that. Ten grand is not much. I mean, $1,000 a month changes this whole equation. Right. Because I think you can live on the $40,000, especially and barely pay minimum payments on the credit cards, and we'll just put those in hover mode until you get out of school and then slam them, right? Which was your idea.

That's what you're saying. Get that income way up and then slam them. But we've got to get through school, and we have to do this realistically. So you're going to have to crunch some numbers here, and you've got to sell the car. The car is gone because it's insanity either way, regardless of what you do in this situation. But I'm going to try to figure out – I'm going to try to find another $10,000 in income so that we can make it because you ain't got any margin in this. We know that because you don't, you know, on $40,000, you're not saving any money.

And that tells me you can't cash flow this. So you might make it, but it would would be i don't want you to enter this and then rationalize going further into debt for student loans no not doing that so we got to figure out a way to do get the income up for the household and it can be you know you're you're doing your 60 hours during the week and you know you're working a weekend gig somewhere and you make a thousand dollars a month delivering pizzas on saturdays and that's just your you know, you're working a weekend gig somewhere, and you make $1,000 a month delivering pizzas on Saturdays, and that's just your, you know, you just do that, and that's what you do to get through this, and it's hard times.

Oh, well, it's only for 18 months. We can do anything for 18 months and live through it. I'm with you on the overall plan, but that's my only adjustments. I just hold the car, and I do something to get my income up, and then pay minimums on the credit cards until you get through this and slam them. No borrowing money to go to school. That would be my suggestion, and you called to ask me. All right, Adam is with us in Los Angeles.

Hi, Adam. Welcome to the Dave Ramsey Show. Hey, Dave. It's an honor to talk with you. You too, man. Merry Christmas. How can I help? Merry Christmas.

Hey, my wife and I, we are in a season where we are completely out of debt, thanks to you. And now we are trying to grow our family and potentially get into a house that we own. Yay. And as you know, L.A. cost is high. Oh, cheap real estate. Just cheap. But our excess in money is about $6,000 right now after all of our bills. And we're investing 6% in our retirement right now. Per month? Per wow you're making some bank good for you yep and uh we've had outside

of our six month emergency fund we have seventeen thousand dollars saved good so we're trying to figure out what would be best is to rent which would would be around $2,600 for a two-bedroom since we're trying to grow our family, or if we should just save up as much as we can for the next three or four years and potentially cash flow a home. So you'd be renting during that three or four years? Correct. Okay. And pay cash for a house?

Correct, around $400,000. Or whether you should just buy within the next year with a smaller down payment. Correct. Okay. Well, either one's fine with me. I love the 100% down plan, and that's how I live. I don't borrow money for anything ever, no matter what. My life moves at the speed of cash.

So if I don't have the money for it, I can't do it, because I'm just not going to go into debt for anything. But it's the one debt, the only debt, the only debt on this show that I don't yell at people for doing is a mortgage. And you probably have heard me say a million times, no more than a 15-year fixed-rate mortgage where the payment's no more than a fourth of your take-home pay. And the bigger the down payment, the better. Certainly, if you can get up to 20% down, that would be fabulous because you can avoid PMI, private mortgage insurance, which is a killer. I mean, it's like $75 per $100,000 borrowed per month. And so it turns into some serious money that you're paying those people if you don't put down a 20% down payment.

So best case, worst case is a minimum down payment on a 15-year fix. Medium case is a 20% down payment. And I love it. If you can figure out a way to pay tax. Anywhere in there, I'm not mad about it. Thanks for the call. Okay, things are getting pretty weird out there. I thought the Equifax breach was bad enough. It exposed the personal financial info of half of all Americans. Now we have breaches

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Call 800-356-4282 or visit Zander.com. That's Zander.com. Thanks for being here, America. We're glad you're here. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. Number one, baby! Yeah, you get free samples, free shipping, and with the new promos they run every month, you save even more. Love this company.

They do a great job. You need Wando blinds? Check them out, for real. Use the promo code RamseyBlinds.com. Today's question comes from Jessica in Michigan. When each of our children were born, my in-laws opened and continued to fund mutual funds for them. Since these funds are not specifically designated for college, should we fully fund Baby Step 5 or move on to 6?

Well, that's up to you. Are you planning the money in the children's names? Do you have control of it? Can you use it for college? If you can use it for college, then you can use it to offset the cost of college, and you can lower your baby step five by that much. If you're planning on just letting them have it, and you're supposed to take care of college separately,

then you would fully fund baby step five. But the point is we need to save money for the kids' college. If grandpa and grandma have taken care of it, then it's taken care of. But if it's not, then, you know, you're going to have to add to it, supplement, or do it instead of, you know. So you've just got to work that through. How much control of this situation do you have? If the money's in the kids' names, then, you know, you can tell the kid this is your college fund. And if there's enough in there to send them to college, then it's done.

You don't have to fool with it. That's pretty nice right there. Thanks for joining us. Open phones at 888-825-5225. Merry Christmas. Jamie is with us in Atlanta. How are you, Jamie? I'm good.

How are you, Dave? Better than I deserve. What's up? Well, so my situation, I'm 51 and my husband is 61. We have two children, 18 and 20, that are in college. We're cash flowing their college right now. We are in baby steps 5, 6, 7. So I guess I really want to know what's the better way to go as far as our retirement.

You're in 4, 5, 6. 7 is your house is paid off. Correct, correct. Yes, so we only have about 532 in savings, retirement savings. Since my husband's 61, he wants to retire about 67. Would it be better to save for retirement or pay off the house? You should be putting 15% of your income aside towards retirement. We are.

Taking care of kids, college, and everything else should be going towards the house. When the house is paid off, then you would max out above that. How much do you owe on your home? 129. Okay. What's your household income? About $200,000. When do you think the house will be paid off? Like, what, three years?

See, I'm hoping, I'm thinking five. Okay. But that puts us real close to his retirement. Yeah. And by then, the $500,000, you know, what, five, six, seven more years, that 500 is going to be 700. True. Plus, you're going to be putting money in, so it's going to be, you're going to be, you're going to have a net worth well in excess of a million dollars. You know, it has everything to do with what the boys spent on college, I guess, but I'm going to, you know, limit that because I want to get, as soon as that house is knocked down, I'm with you. Let's load up retirement.

But would I do no retirement at all and pay off the house no what i put off paying off the house um by uh what i put off paying off the house uh completely so that i can load retirement up no you've already got a half million oh right no but uh i mean you're not gonna, you're not going to have a $200,000 household income by 67 with the numbers you gave me out of your investments no matter what you do. Okay. Because you need $2 million to do that, and you're not going to be there. No, no, no, no. So you're not going to retire.

I'm worried about retirement. Yeah, you're not going to retire on 200 grand. Not at 67. Now, by 70, you're going to be getting close okay if he makes 200 from now till 70 um but it just has everything to do with how you all want to retire um but i would get that house paid off you want the house paid off and as soon as possible while putting 15 towards retirement that's 30 000 a year you're putting towards retirement while you're doing this so it's it's substantial you're doing the best you can do with where you are but uh it's not smart to go into retirement with a mortgage because you built up your nest

egg even more no i would not do that britney's with us in Washington, D.C. Hi, Brittany. How are you? I'm doing fine, Dave. How are you? Better than I deserve. What's up? So I'm in Baby Step No. 1, and I'll be finished in December. I'm using the EveryDollar app. However, I did pick up three side hustles to make more money.

Good. However, I'm trying to figure out how to add it or to count it into every dollar, or should I just throw it straight at debt and don't worry about budgeting for it? You can do either. You can just update every dollar by updating your income. Each time you get some more income, once a week or something, you could do that. It'd be too much trouble to do it once a day, driving me nuts. But, you know, pile your money up, and on Fridays, update every dollar,

and what do you want to do with the money? The point of every dollar is this. Every dollar needs to have a destination before it comes in. That's the point of budgeting, right? Every dollar has a mission. Every dollar has an assignment, a destination, before the money gets there. And if you're on baby step two working the debt snowball, almost everything above what you've already put into every dollar,

which is food and lights and water and that kind of stuff, almost every dollar you squeeze out of your budget is going to go on the debt snowball. So it's pretty clean to throw it at the debt. You see how I'm doing that? Yeah, that's nice. That makes sense. Now, what's your best side hustle? Best income from best side hustle? Best income

from a side hustle? I would say the Instacart been doing good. I made $100 this weekend just on one day. What is that? I do grocery shopping and I dropped it off

at the person's house. Oh, neat. And you made how much? $100. In one weekend? That was just one day. I did made how much? A hundred. In one weekend? That was just one day. I did six hours that day. Wow.

Not bad. Very cool. Good for you. Hey, Brittany, you're going to be all right. You're not afraid of work. I'm proud of you. Good job. Well done.

Merry Christmas to you. Love it. Love it. Love it. Matt is with us in Bend, Oregon. Hi, Matt. Welcome to the Daveave ramsey show hey babe hey what's up thanks for taking my call sure how can i help yeah i've got uh some

questions about college um i'm a i'm 45 years old my wife is 49 um we have 505 000 in retirement we have a 460 000 home paid for. Wow. Way to go, millionaire. Yeah. And then we've got our emergency fund. So we're really baby step five and six right now. But I have three kids, 11, 12, and 17. My son is going to be a senior here, or he is a senior right now. And so our question is, with the 529, we only have $10,000 in our 529 right now with a senior going to go to college, but we didn't want to pay for all this college because we wanted to work through it in a community college setting. And so we were wondering if it would be wise of us to look at,

since we only wanted to provide 15 for each of them, wise of us to maybe stop investing for a while and maybe invest into their college savings accounts if they desire to go to a college that's going to be more expensive than a community college. You want to pay what? How much do you want to pay? 15,000 a year?

No, we were hoping to have them kind of work through the first couple years. Yeah, I got that. What was the $15,000? The $15,000 is what we were going to actually contribute to their accounts for each of them. So $15,000 for each kid. Total. Yeah, total.

So that they would have a lump sum to get them started. But, you know, when I'm looking at colleges, though, they're just, you know, they're way more than that. Oh, yeah. So I didn't know what to do. That's like one year. Yeah, if you would think that we would do better looking at, you know, giving them more funds into 529 now. What's your household income? Our household income is 120.

Okay. No, I would not put it into retirement. But depending on what you want to put in for the kid, here's the thing. You do not want to give a kid $15,000 and then them go $40,000 in debt. Then you're supporting their debt movement, and I don't want to do that. I'm only giving them the $15,000 or the $30,000 or whatever you're going to give them. And I think you're going to end up giving them more than this if they're going along with your plan. And that's no debt.

That's the only way I'm going to do it anyway. So if you want to put some in a 529 or some just straight in a mutual fund, either one's fine. But you need to rethink your numbers here, dude. You're low. This is the Dave Ramsey Show. There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts, no hidden fees.

And if you're thinking our low cost means less coverage, think again. We'll be right back. in the U.S. to ensure you receive reliable coverage virtually anytime, anywhere. Plus, you can keep your same phone and number and add multiple lines to save more. We're so confident you'll love Pure Talk USA that we invite you to try our service risk-free. Just visit puretalkusa.com, enter promo code SAVEDAVE, no spaces, and receive 50% off your first month. That's puretalkusa.com, promo code SAVEDAVE. Mike and Brittany are with us in Manchester, New Hampshire. Merry Christmas, guys. How are you? Hi, Dave. We're good. How are you?

Better than I deserve. I see on my screen you're debt-free. Congratulations. Yes, we are. Thank you. Thank you. Very cool. How much have you paid off? $66,100. Awesome. How long did that take you? 13 months. Wow. And your How long did that take you? Uh, 13 months. Wow.

And your range of income during that time? Uh, about $75,000 gross. Okay. What do you guys do for a living? Um, I work at the high school library. Uh-huh. And I am a machine operator for a manufacturing company. Very cool.

What kind of debt was the $66,000? Um, we had $22 22 000 in student loans we had 18 000 on a truck we had 18 000 on a car uh 6 900 in credit cards and 1200 in collections wow no money saved no money saved? No money saved. Must have sold some cars. Yes, we actually sold the truck and we sold the car as well. We were upside down in the car, though.

Okay. You got out of both of them. What are you driving? Well, we both bought beaters. We paid cash for both of them. What'd you buy? How much did you pay for them? What's that? What'd you buy and how much did you pay for them? What's that? What'd you buy and how much did you pay for them? I bought a 4Runner and I bought it for $4,000, but when I sold my truck, I got $2,500 from it,

so that helped put money down. Got it. Got it. And what are you driving? I had a $3,500 Honda Civic at the time, and it actually recently, I sold it because it was too expensive to fix, and I actually just bought a brand new car, or not a brand new car, but I paid cash for a vehicle. A 2012 Honda Civic for $6,000. Nice. Nice. Good moves. Good moves. So you guys went bananas. I mean, when you started selling nice cars and getting beaters, something happened. Tell me your story. What clicked 13 months ago?

Well, my family has been pushing your program for a long time, and it really just took me meeting Mike, and then we got married and went on our honeymoon and got a house, and we came home and were, like, just too stressed, and what are we going to do? And my brother-in-law actually was the first one who sat down with us and helped us write a budget. And I think once we saw the numbers down and where we could get, we kind of just went for it. And we're kind of, like, all-or-nothing types of people. So we just went crazy.

Yeah, so you were a financial peace baby, your brother-in-law. So, Mike, your new brother-in-law comes in and sits down and starts telling you about money. How did that feel? It was a little nuts at first, but I'm pretty disciplined when it comes to fitness and dieting. So, you know, once I had a plan in front of me, you know, we were all in. Okay, yeah, you know how to control you. Yeah. And so that self-control thing you already had.

But, I mean, that's a weird dynamic. You must really like him or it was really weird, one of the two. Yeah, it was both. No, he's joking. Well, I mean, you get married and you're newly married, and all of a sudden your brother-in-law is at your kitchen table going through your money. That's pretty wicked right there, I'm just saying. I love it.

I love it. You guys love each other. That's awesome, man. What a great family. This is very cool. So you had cheerleaders everywhere then, right? Yeah, definitely my family. Everyone was very very very supportive um

our friends and co-workers had didn't understand what we were doing or why we were doing it yeah but it was really great to have my whole family always helping and encouraging us along the way yeah cool so you did the budget and then what else did you do to know what how to do this stuff um a lot of it definitely was the budget but um we did we kind of went crazy just selling a bunch of stuff um if we like we would have a goal at the beginning of the month when we wrote the budget down of how much we wanted at the end of the month to put towards debt. So if something happened and, say, we had a vet bill to pay for or something, then we kind of were like, all right, we missed out on that $300. What are we going to do extra this month to get there?

So I would clean houses or babysit, and Mike would write meal plans for people. Okay. Very cool. Good. Good. Awesome. Well, I'm proud of you guys. I'm sure your parents and your family are. Oh, yeah. They're all listening and watching, I'm sure. How does it feel to have no debt now, 13 months after the honeymoon? It feels amazing. Yeah, I think it'll

feel, for us, we aren't done yet, and I think it'll feel really great once we finish the fully funded emergency fund because we can't just stop and relax now. We still have to kind of go in this intense gazelle mode, and then I think we can let off the gas pedal once we finish with our emergency fund. Exactly. Exactly. That's perfect. What do you tell people the key to getting out of debt is?

Definitely the budget and the envelopes. You know, it's a little funny carrying around envelopes with you and you feel kind of judged at some point, but it's really refreshing knowing how much money you have and, you know, you don't have to worry about it. And communication is definitely the key. Yeah, absolutely. Yeah, I remember at one point, if there was something at the store that I needed, and I need an extra five bucks, I would just switch it from a different envelope. And Mike, I would get home and, you know, he'd say, Britt, we got to communicate this because, I mean, the money is all there, but if you don't communicate, it's not going to work. So it took a lot of sitting down and really talking about what exactly the plan was and sticking to it.

Brittany was an envelope cheater? No way! You can tell who the free spirit is. Hey, that's real stuff right there. That's authentic. That's how it really works. I mean, people do that stuff all the time. The trick is exactly what Mike said.

You've got to work the system and submit yourself to the system. And so that was a good call out. I love it. You guys are great. Very well done. Got a copy of Chris Hogan's book for you, Retire Inspired, signed by him. It's a number one bestseller. We want that to be the next chapter in your story where you're millionaires and outrageously generous along the way.

And I think you two are well on your way. How old are you two? 29. And I'm 28. I love it. Way to go. If you could pay off $66,000 and sell everything in sight, work extra jobs and work together for the first 13 months of your marriage,

you can conquer anything. Very, very well done. Mike and Brittany, Manchester, New Hampshire, $66,000 paid off in 13 months. They sold both their cars. Did it on $75,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! Yes! Well done, you guys. Well done. See, normal is two big car payments and a student loan that's been around so long you think it's a pet. Normal is stress in your marriage and no communication over money normal is you have no control over you normal is you're out of control broke and whining all the time hoping you can get a raise and you can out earn your stupidity that's normal who the flip wants to be normal

a whole bunch of people that's why we call it normal but instead you can choose to be weird. It's weird to have a great marriage. It's weird to communicate and actually respect and trust your spouse. It's weird to control yourself and not impulse a freaking car. The number of people that impulse a car blows my mind. Not those guys. What a sharp young couple, man.

And old couples do it. Last hour was a couple my age that had just gotten out of debt you know like in their 50s wow old dog can learn new tricks they can by the way yeah if you actually have an old dog it can learn new tricks it really can i mean i don't know who got that saying but they're just wrong is it harder yeah it's harder but what what else are you going to do? Be normal? I don't want to be normal. You want to be normal? Normal is broke. 70% of Americans live paycheck to paycheck.

Why would you be normal? Hope the government, which is well known for its ability to handle money, will take care of you. Well, that's stupid. Have you not noticed those people in Congress can't add? Much less subtract? This is the Dave Ramsey Show. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. At what point should someone start to consider bankruptcy?

Allie wants to know on Twitter. Allie, you ever seen the list of ten things that if three or four of them happen to you in a short period of time, the likelihood is you're going to be in the hospital, divorce, bankruptcy, loss of a parent, a child, a spouse, your home burns, your home is flooded, major catastrophe tragedies in your life. If two or three of those hit in a short period of time and you end up in the hospital of stress, most people do. It affects you physically because it's so extreme. Bankruptcy is on that list. In other words, it is not something to be considered lightly. And so I put it, for instance, in the same category of a divorce.

When would you file for a divorce? After you've tried everything else. And you've tried so many things that you know that there's nothing else to try, and that there's no scenario, the current circumstances in which we make it. Not, I'm kind of pissed at you, and I'm going to file divorce. That's not what we do. We don't get mad and have a fight and file for divorce. Most people don't. They shouldn't.

So, here's the thing. IRS and student loans are not bankruptable. Your secured debt, your home, your cars, anything else that has a lien against it, like boats or whatever, the only way you keep those items is if you reaffirm the debt. So if you file bankruptcy and keep all your cars and everything and your house, and you've got student loan debt, you just kept all the debt. I mean, that doesn't make any sense at all and a lot of people do that just to get rid of six thousand dollars worth of credit card debt

but then they turn around keep their car keep their house and they get the student loan they still got the irs hovering over their head and so because people freak out and they think if they run hide in a bankruptcy that it's going to help them now sometimes there's times you get backed into a corner and i'm not going to yell at you for filing bankruptcy but i gotta tell you the number of times i have told someone at 57 years old that they should file for divorce is almost zero somebody beating the snot out of her beating the snot out of her fine now i've had people tell me they were filing for divorce, and it was a really messy, junky, horrible, gunky situation,

and I understand, and I'm not mad at them, but I'm not going to tell them to do that. I don't want them later on going, Dave Ramsey told me. My friend Dave told me. And the same thing is true about bankruptcy. So at what point should someone file bankruptcy? After you've done everything else and then some. And then some.

And then some. A lot of times people have bad debts that are piled up that they're not even paying on. And they go file bankruptcy. Well, why? You're not paying on them. even paying on. And they go file bankruptcy. Well, why? You're not paying on them. Not paying on them is not paying on them. Why don't you just not pay on them for a while more and see what turns up around the corner?

So, you know, it's right there with divorce. It's the last thing you do after you've done everything else to turn it around. Genesis is with us in Gainesville, Florida. Hi, Genesis. How are you? Hi, Dave. I'm good. Thank you so much for taking my call.

Sure. What's up? Well, I'm a bit scared. I just got a notice in the mail to be summoned to court for a credit card that I haven't paid in a couple of months because I've been out of work and I just really don't know what to do. I'm really frantic and I want to pay these debts, but, you know, since they're summoning me to court, I don't know if I need to get a lawyer, if I should try to mediate it myself.

I just need some type of guidance, please. It's not a couple of months. It's a lot of months. Yeah. How many? I'm going to say maybe since January or February. Yeah, like a year. Okay.

All right. And who's the credit card with? It's with Discover. Who? Oh, just Discover card straight year. Okay. Mm-hmm. And who's the credit card with? It's with Discover. Who? Oh, just Discover card straight up. Okay. Yeah. And the court that they have summoned you to is where?

It's here in my town. Okay. And what do you owe them? $3,500. Okay, cool. And you're still out of work? I am. I mean, we moved from a major city to a small town,

and I've been looking for work for a couple of months now, and right now we're still on one income. I've gone to a couple of interviews. I have an interview tomorrow, and I've paid off other so what does your husband make he makes about 900 a week okay and um and how much other debt do you guys have i'm gonna say i mean my car owns 5 000. We have a couple of things like our well at our house when we moved. We got a new pump, and that was like another $6,000 and some credit cards. And how much on credit cards other than Discover?

Maybe like $6,000 or $7,000 total. Okay, gotcha. Including the Discover? No, and the Discover. Okay. Sorry. I'm nervous. That's okay.

That's all right. And how much is your house payment? $600 a month. Okay. And how long has your husband been making $900 a month? Well, he makes about $900 a week. I mean $900 a week. I'm sorry.

How long has he been making that? He just started getting paid more a couple of months ago, maybe like June. Okay. All right. You guys are completely disorganized. You being out of work is not the problem. You guys have no freaking idea where your money is going. Completely disorganized. You being out of work is not the problem. You guys have no freaking idea where your money's going.

I don't. Yeah, you're mathematically clueless on where your money's going. Because you're making enough to not be behind on these bills. With his income alone. Unless you left the debt out. I mean, you got a $5,000 car debt, a $6 debt a six thousand dollar well debt a seven thousand dollars in credit card debt and a six hundred dollar house payment you're making 50k a year how many kids have you got we don't have kids yet i believe okay you guys are completely disorganized and nobody's paying attention. You're driving down the road, and nobody's even holding the wheel of the car.

Is this making sense? Because I'm telling you, there's all kinds of room in this math for y'all to have been able to pay your bills since he's been making $900 a week in June. You should not be getting sued. Yeah, I need help, please. Let me be nice to you. i'm going to help you with this but then i'm going to be mean to you okay you've been irresponsible that's what i'm trying to say you've not been paying attention at all you guys are doing a horrible job with your money so let me get you out of this here's the thing okay you can just ignore discover if you want

they're not going to do anything. Is the Discover in your name or your husband's or both? It's in my name. Good. So you don't even have any income. They can't do anything. So until you have an income, they can't come after your income. So we'll go back and fix them later.

The bad news is they're suing you. The good news is this is your wake-up call. It is time to get organized, focused, responsible, quit partying, and make every one of these dollars behave. How old are you all, 24? Yeah, I'm 25. I'm 28. Yeah, okay.

That's about right. All right, so really time to get serious. Like, let's pretend I hired you for $100,000 a year to manage this couple's money. You could do it. You're not dumb. You just haven't paid attention. Am I wrong? Yeah.

Okay. So I want you to go to Financial Peace University, our nine-week class. I'm going to pay for it, and he's going to go with you, you and your husband together. Can you get him to go? Yes. All right, because you need to get on top of this, and you can call, discover, and negotiate with him. You don't need an attorney. You don't even need to show up in court.

You're going to lose. You owe him $3,500, and you can work out a payment plan on the judgment after it goes to judgment in a couple weeks. It's not a big deal. And you're going to be completely out of debt by summer. So it doesn't matter. You're going to pay it of debt by summer. So it doesn't matter. You're going to pay it all off by summer. So hold on.

We'll have Kelly pick up and get you guys signed up for Financial Peace University. Hey, guys. It's Blake Thompson, senior executive producer of The Dave Ramsey Show. This hour of the show is over, but you can also watch on our free mobile app, our website at DaveRamsey.com, or on the Dave Ramsey Show YouTube channel. We are everywhere to serve you.