The Ramsey Show - App - Once You Have Financial Freedom, You Never Look Back (Hour 2)

Episode Date: June 3, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is The Dave Ramsey Show, where you can learn to take control of your money and create a life you love and are proud of. I'm Christy Wright, and my co-host this hour is best-selling author, fellow Ramsey personality, and my good friend, Rachel Cruz. And we're

answering your questions about your life and your money. Give us a call at 888-825-5225. Rachel, this is fun. I know. I can't believe they let us do this. Every time that we get to host together, it feels like such a treat. I'm like, do they know what they're doing? Do they know? Do they know how much fun we're going to have? It's great. It's awesome. But this is so fun because you and I get to be friends offline, but also here at work, we have such a passion to help people and provide hope. You're in the money space. I'm in the personal development space.

And this has been a really weird time from the pandemic to everything going on in our world. And one of the things I know you and I were talking about is it's actually, you're starting to see a behavior change in Americans. And you've got some interesting research of even what you're seeing in the money trend. So tell me about that. Yeah. Well, I think for the pandemic specifically, it's obviously been a health crisis with COVID-19 and everything, but the economic crisis has been huge for small businesses, people being laid off for a load. And I think people are just completely reevaluating still, even though it's

been a few months, reevaluating their money and their finances. And you're finding certain trends, you're finding different habits shifting. And everyone I talk to, I'm hearing this. And so, yeah, there was an article that came out. I'm trying to think where this is from. Not terrible. I have it printed off. Oh, CNc uh and 78 of americans within one week say that they save roughly 245 dollars by not eating out wow simply by not eating out so close to 250 dollars within a week so they were surveyed which is just wow but total people are saying that they're going to be saving close to seven thousand dollars from holding off on large purchases, opting out of vacations. I mean, things that they had planned and lifestyle switches up to seven grand because of this.

And so I think that that just shows is where we were spending our money. We talk about needs versus wants in a classic way, right? That your needs are your food, shelter, utilities, transportation. And that's what we tell people. If you have been laid off or furloughed, making sure those are the first four things covered. But it really puts into perspective, shelter, utilities, transportation. And that's what we tell people. If you have been laid off or furloughed, making sure those are the first four things covered. But it really puts into perspective, yeah, we have a lot of wants in our world today. And things are not bad. Wants are not bad.

If that's where we choose to spend our money, if you have the money, you've budgeted for it, you've planned for it. But at the end of the day, I'm like, man, we just spend so much that we don't need. And I fall into that too. I mean, I'm guilty of it. I convinced myself, you know, like, oh, I need that new shirt for work or I need that. And I'm like, no,

I have a closet full of shirt. I'm fine. I'm fine. But we talk ourselves into it. But when something like a pandemic hits and everyone kind of freezes up and reevaluates and goes to the bare bones, it just shows it's possible. So those of you getting out of debt, you're making sacrifices. You know this, you know, it's a reality because you're doing it. But for all of our Americans listening, thinking, oh gosh, could I do that? Could I live like that? The pandemic has showed. Yeah, you can. Well, it's amazing too, because I feel like maybe before this, a lot of people, and you've got research on this of like seven out of 10 Americans live paycheck to paycheck. You come into something like this where the income is uncertain. People are losing jobs, that type of thing. And it highlights the instability of their finances already.

And they're having this never again moment. We've been talking about this. I love how Dave says you can wander into debt, but you can't wander out. You have to have, you have to draw a line in the sand. You have to say, I'm never going back. I'm never going to live like this again. I'm never going to be in this situation where losing one paycheck takes us under. And I think just like you said, this pandemic has put people in a situation that we're like, this is my

never again moment. And I'm going to change how I manage my money. I'm going to change how I save my money. I'm going to start getting things together where I'm in a better position should something like this happen again. Yep, absolutely. It's the wake up call. It is. And if you, you know, I've talked to people, they've had that wake up call. And then others, which I think is just as equally, it is just, it's very exciting for me on one half of me, you know, I'm always like, Oh my gosh, you know, I hurt for those that are hurting and hearing their stories of struggle. But then the ones that have done this, that had their wake up call maybe a year ago, two years ago, 10 years ago, and they changed their financial habits to getting out of debt,

they're budgeting, they have an emergency fund in place that they're doing, that they've done it already. They're the ones that are kind of taking that deep breath of relief of like, wow, we did it. So it just proves it works. We say that all the time. We're like the brand validation, Ramsey Solutions and this show and the advice we give here, it works. And so I think that's just, it's an exciting thing.

I was talking to a business leader this morning, actually, and she was talking about how money loves speed. And the faster you go, the more you're going to make and all this. And I'm like, but man, that pandemic has really slowed everyone down. And you just appreciate when you don't have the bills and you have money saved in the bank. And so that never again moment is a moment in time for people to say that the pandemic, it's that for them. And once you experience that freedom of being out of debt or having the savings,

you never look back because you've experienced that freedom. You know it's possible. You've done it. We're taking your calls this hour, 888-825-5225. We've got a call from Emily in Tennessee. Hey, Emily, how can Rachel and I help? Hey, guys, I'm so excited to talk to you right now. Sure, what's going on? Yes, so I am in the academy. I am a professional organizer. I've only been in business for a few months,

so I'm not generating a ton of money yet, but it is definitely picking up. And my main question is, should I file for a DBA or an LLC or just wait, or is there like a particular mile marker that I need to hit before I consider that? Sure. Emily, this is a really common question that I get. And I know there's a lot of misinformation out there in terms of how you need to set up your business from a tax standpoint and that type of thing.

The thing that we always teach people is you can operate as a sole proprietorship. You can do your check and count doing business as. It's very easy to file your taxes that way under your personal taxes. The only situation in which you would want to file as an LLC would be if the business is making a ton of money or you have a lot of personal wealth where you might have a target on your back. Someone might want to sue you. You might want to separate the business entity so that if someone were to sue you, they could not take your personal assets if they sold the business, if there was some type of liability. The only other situation would be if you're in a high liability business. So the nature of the

business itself would be dangerous in some way. So for example, Emily, a long time ago, I had a dream of having a horseback riding camp for girls where obviously horses are dangerous and unpredictable, and that would be a higher liability business. But if you're not in a high liability business, and you don't have a target on your back because of personal wealth, then you're great to just operate as a sole proprietorship or a doing business as and, you know, Rachel, it's interesting, because one of the common things I've seen in questions that I get around business is this complicated stuff feels so big to them. They feel like that's 95% of running a business. It's the taxes, the trademarks, the, you know, all the licenses.

And what the reality is, it's about 5% of it. You've got to get set up. Sure. You've got to get your paperwork in order and your records. But 95% of the time, you're just helping people and running your business. It's interesting how the small stuff can feel big when you don't know how to do it. Oh yeah. The unknown is what's scary. And I just wonder as you're talking, I'm like, I wonder how many women choose not to do

something, take that leap of faith because it does feel so overwhelming. And that fear of just not knowing can just keep you from, from living your dreams, from doing something. I think it keeps you from a lot of things. We see it even in finance. It's the idea of the unknown, so I'm just not going to face it. I'm just going to pretend those bills aren't there. I'm going to sweep it under the rug. I'm going to hope it magically goes away. But man, if you face your fear and you write it down

and you look at what you need to do, create a checklist or a budget, it's probably a lot smaller and a lot easier than you think to handle. This is The Dave Ramsey Show. hey folks father's day is just around the corner if you're looking for the perfect unique gift to give dad i've got it grip six belts dad's like me, he's not a fan of traditional belts. They never fit right and they're uncomfortable. Grip 6 belts are exceptional. Owner BJ designed a truly modern minimalist belt made of high quality materials with no holes, no flap, and no bulk. And the buckles come in really cool interchangeable designs i personally own these belts in different styles and talk about affordability grip six belts come with a

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my personal vehicle they do give us ema equipment maintenance allowance uh every check so i'm just wondering if i should use that to go towards the debt or start saving up for another vehicle just in case so is your car currently jake are you needing to replace it? Like, is it in bad shape or you're just thinking that it's a primary part of how you make money? It's getting there. It's burning oil probably about two to three quarts before every oil change. Okay. So I would say, I would look out and say, okay, when do I need to replace the car? How much is the, or if I just choose to, do you think, sorry, let me ask you this. Would you choose just to fix the car or do you want, do you think it's completely like, is the expense of fixing the car going to be more worth it than the, just buying a new one?

Usually I can find, because I use a Honda CR-V, so I can usually find them for around, you know, $1,800 to $2,800. I actually got mine at $2,800. Okay. And then putting in a new transmission, it's $4,000. You're right. A new engine, I haven't been able to price that yet. I have to call my mechanic.

Okay, and how much debt do you have, Jake? $8,000 on a credit card and three consolidation loans totaling about $30,000. $30,000. And how card and three consolidation loans totaling about $30,000. $30,000. And how much do you make a year? I personally make $48,000. My wife makes $59,000. Okay. And for you guys, or you said you get money for the car, correct?

For the job? Correct. Every paycheck, as long as I'm running my route every day, they give me the mileage pay for it, which comes out to about $550 a paycheck. Okay. Yeah. I mean, here's the deal. Your car is your primary way, like most people, right, to get to work, but yours is actually used to make some money. So I would say, yeah, you could definitely start a sinking fund. I mean, I want you to be gazelle intense. And at this point, paying off this debt is going to be the

priority. But if you can't go to work because your car is broken down, then that's a problem. So I think putting some of that money aside and just saying, you know what, I'm going to save up, you know, you said you can get one for even less than two grand. And I would save up, you know, you said you can get one for even, you know, less than two grand. And I would save up gosh, for three, four months of that. And then just replace the car where the oil isn't leaking and you're able not to have to fix it because fixing it is going to be more expensive than the car itself. It's really hard whenever you're in baby step two and you have a setback or in his case, a setback possibly coming and, and, and you want to be gazelle intense and you want to be focused on your goal. But the reality is this is a marathon.

It's not a sprint. And in some situations, you're going to be in that marathon for a while with baby step two. And so, yeah, it can be hard to redirect your priorities. But like you said, you've got to be able to get to work. That's a priority for sure. And hearing Jake talk, you know,

as I'm listening to his information and his mindset, it's good because if he said, I needed to go get a new $30,000 truck, that's a totally different conversation, right? That mindset. But obviously him knowing, no, I can get a beater still and it take me, but it's not having to cost me all of these, all this work on my car. And so that's what you really have to look at. And your, your transportation is a need.

And so you have to make sure that you're getting, you have it covered, but it's in the right perspective during baby step two, which it is for him. I mean, a car, two grand or less, that's a beater. That's what we love to see in baby step two. Uh, but making sure that that's, that that's fulfilled, that you have that in order to make the money. And you can save that quick. One of the cool things going on right now, and we started this a couple of months ago, Rachel is we're actually trying to help people get their whole debt snowball activated with a free trial for Financial Peace University. We've never done this before. We've been doing it the last couple months,

14 days free, where people get access to the entire course for free. Tell us a little bit about what's going on, because I know you've seen a lot of people going through this. You've been hearing the results of it, too. Yes, it's amazing. Yeah, the 14-day free trial, it's been something that we offered during the pandemic, because we were like, well, can we do to help people? We're trying to pivot. Yeah, and they're panicking. And it's like, gosh, we're like, well, just, you know, so much of it's online and that delivery mechanisms free, basically it's AR. And so you're like, okay. So we decided to, yeah, get 14 days away. And it's, it's a nine lesson course, financial peace university. Millions of people have gone through it and they just have

incredible financial turnarounds by doing it. And when you get into it, I mean, you get to set up your every dollar budget, every dollar plus you get all the access to all the content, everything for, for two weeks. So I always tell people get in there and binge it, binge watch the videos, learn how this stuff works. I mean, it's a, it's an incredible opportunity. Uh, like we talked about in the first segment of having that, that never again moment and letting the knowledge, um, help dictate that. Yeah. Instead of binge watching something else on Netflix,

this would be a good use of your time. They can have you. There's a lot of good Netflix. A complete turnaround. All right. We've got a call from Carrie in Ohio. Hey, Carrie,

how's it going? Hi, I'm good. How are you guys? Good. How can Rachel and I help? So I actually have a question in regards to, I read the smart money,

smart kids book. We have a 15 in regards to, I read the Smart Money, Smart Kids book. We have a 15-year-old who is, well, we are in baby step two. We have a 15-year-old who plays multiple varsity sports as a sophomore. So he doesn't really have a whole lot of time to get a job. He does do chores around the house, but that gets him like maybe, you know, 10 bucks a week or so. We told him to kind of keep accountability for him to drive. He would have to come up with half of driving school because in the state of Ohio, um, if you're under 18, you have to do driving school to get your license. Um, and then that he would have to come up with the money to pay for his own car. And

with that in mind, with him playing sports, we just figured he wasn't getting a car anytime soon. Well, so he saved up his money, Christmas birthday money, and now he's ready for driving school. And then here comes my mom. She bought a new car, and she basically offered to give us her old, you know, 07 Santa Fe with 200 and something thousand miles on it. Only thing that needed was a pair of brakes. She said if we didn't take it, she was just going to junk it. She didn't, she doesn't follow the Ramsey plan. She just was going to get rid of it. So

now we have this car. And my question is, with him playing sports, with not having a whole lot of time for a job, who pays for insurance? Who pays for gas? Who pays for maintenance? Or do we just let it sit there? All great questions, Carrie. For you, what's your knee-jerk reaction? What do you think? I mean, I'm kind of torn because he is, like I said,

he's a sophomore playing varsity, so he has a good chance of getting some sort of scholarships for school. Full ride, obviously, is a very big goal, but any type of scholarship would help. So I don't want to tell him, hey, you've got to quit doing sports to go get a job so that you can pay for a car. Does he work in the summer, Carrie? He does work a little bit in the summer.

However, like right now, they're already starting with, like, football conditioning. So he's already up at the school at 8 a.m. Well, so, Carrie, what we talked about in Smart, Smart Kids is the key here for your teenagers is, and Meg Meeker says this, you're just not trying to raise good kids. You're trying to raise kids to become good adults. And part of becoming a good adult, right, is understanding how money works. It's understanding a work ethic, where money comes from, all of that. Now, you can teach that in multiple ways.

It doesn't have to be this cookie-cutter way that this is the only way you do that. It can look different depending on your child, depending on your family situation. And so we wrote about in the book that as Ramsey kids, we were expected to pay half of our, for half of our car was the 401 Dave plan. So whatever we saved up, they would match. And that was our car and that was our responsibility. And we learned that early on. And so yes, the birthday money, all of that went to the side. But we also babysat at night or on the weekends. I did whatever I could to make this money for this car.

And so what it did for me is obviously I learned sacrifice, hard work, having not to hang out with friends. I had to go to work. But I think you can learn that in multiple ways. It doesn't have to be just from a literal job. But I would say you need some responsibility in multiple ways. It doesn't have to be just from a literal job, but I would say to put, he needs some responsibility outside of sports and that can be at whatever level you choose. So for this car, sure. You could take this as a gift. You guys are on baby step two. He obviously doesn't have a ton of time. I would push him a little bit more to find some time to do something to make money outside. Um, because I think that's just good for him in general,

but again, it can look different, but learning that responsibility is what's key. Yeah, set a goal. What's the amount of money he needs for a year to be able to pay for it? What's the insurance? What are all those things together? See if he can work the hours and make the money to pay for it. If he can, that's going to motivate him. It's going to light a fire under him to make it work and figure it out.

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I'm Christy Wright, your host this hour, joined by my good friend and fellow Ramsey personality, Rachel Cruz. We're taking your calls about life and money. 888-825-5225. Rachel, yesterday was a big day because we launched the Christy Wright Show. The Business Boutique Podcast has turned into the Christy Wright Show. We were focused on business. Now we're helping people in all areas of their life. And I feel like I'm following in your footsteps because you've had a show for a while.

Yes, the Rachel Cruz Show. It's been fun. So it's on YouTube and Facebook and then a podcast as well with some of the same audio from that show with other commentary around it. And yeah, it's been, it's been a great, it's been a great way. I mean, obviously radio is fun, but I enjoy the video side as well. And so being able to present ideas and thoughts and interviews and content all around that, it's exciting and it's been fun. Yeah. One of the things that I think is really cool about all of the different shows that we're doing as Ramsey Personalities and Ken Coleman, Anthony O'Neill, John Deloney, Chris Hogan, we all have these shows, different podcasts, and

the whole hope behind it is that we would spread hope. The whole idea is to be able to share and encourage people to improve their lives, to take responsibility, improve their money, improve their careers, you know, improve their faith and their confidence. And what I love about having a show, having that type of format, is it's a longer form format where it's not like a social media post that's a soundbite you have to answer in one minute. You're able to really unpack some of these ideas and principles that people can use to change their life.

That's right. And we love the inspiration, but we always make it super tactical and practical with takeaways. And so you can check out the Rachel Cruz show or the Christy Wright show wherever you listen to podcasts and on YouTube. Yeah. And congrats, Christy. Oh, thanks.

That's so fun. Yeah. It's so, so fun. How was so fun. Yeah. It's so, so fun. How was the response and everything? It's been really good. I think for a lot of people, it felt like, oh, this is the next logical step. It didn't feel like a pivot. It felt like, oh yeah, we kind of been doing this because for years I've helped women with their businesses. And I always talk about life things because we don't have a business life and home life. You just got one life and one affects the other. They always do. And so it almost feels like this, like, well, of course,

well, of course, that's what we're doing. So it's been fun to see the response. And you guys can check out the first episode that aired yesterday on YouTube or wherever you listen to podcasts. You can also find Rachel Cruze Show and all of the other Ramsey personalities. All right. We've got a call from Amaris in California. How's it going? Good. How are you? Great. How can Rachel and I help? Well, I'm a speech therapist in California and I started my own practice about a year ago out of my house. And in September, I started supplementing as an independent contractor with a teletherapy company. And that's worked out okay, but I'm having trouble drawing my own private clients to the degree that I would like. I'd like to get rid of the independent contracts and just be on my own.

But one of the issues that I have is that I don't take insurance. I refuse to ever take insurance. And so I think I'm having difficulty figuring out how to market to the demographic that I need to be able to pay out of pocket for my services. So do you have any advice for how to market myself locally? Sure. How many, do you already have a client base from the work you've been doing through your business, not through this contract work? I do.

I have about five of my own. Okay. So what's so great is the first customer, the first client is the hardest and the second is the second hardest. What's so great is you've already got your first five. And what I want you to do is I want you to put some effort and energy into activating those five clients to market for you because you're in the service-based business. The sweet spot with marketing and service-based businesses is referrals. So your word of mouth marketing,

your referral-based business is the easiest marketing because who do you have do your hair or watch your kids or mow your lawn? It's someone that your friend referred you to. And that's the opportunity you have with your five. So that's one aspect of it. The second thing that I want you to start to really hone in on when it comes to your marketing is you're going after a specific customer that is

willing and able to pay cash. They're not dependent on insurance. So your marketing needs to speak to that person. It needs to speak to their language and your quality of your services, the level of excellence, the unique aspect of how you do what you do needs to be so compelling. You create this awesome experience for your customers where they can't not talk about it. And they don't even care about insurance because they're willing to pay you cash in order to have you. And I can speak from experience, Amaris, as a customer of people like that, whether it's, oh, I've got to have this swim teacher for my kids or, oh, I have to have this person do my hair or whatever the thing is. If you create a unique

advantage, a unique selling proposition where there's something about your style, your services, your personality, uh, the excellence that you bring to the work that you do, and you go after the right customer that's willing and able to pay cash, then you'll find that sweet spot of that interaction. And that can be hard, Rachel, because I think sometimes we feel like we're only competing on the level of like, well, we all provide these services, but how you provide them can change a lot because we talk about creating experiences at our events or creating moments or creating things that people tweet about the surprise and delight. And those are the things people remember.

Yes. The wow moments. Yeah. That sets you apart from everyone else. And Seth Godin talks about tribal marketing so much. And it's so, so true, though. I mean, any referral I've gotten from a good friend, I use. Right.

Because they trust that person. And so that level of trust that you build with your consumers, with your customers, speaks volumes. Because when someone needs a speech therapist, they're going to ask, you know, your, one of your clients, Hey, who are you guys using? And them being able to rave about you, the excellence, the trust factor, uh, is massive because any really, honestly, any book I see, any series I watch on Netflix, any, I mean, you tell me about it. I do. I'm always like, Christy, I'm watching this thing. It's so good. Oh my gosh. I need, I think the last one was, I need you to come with me on this journey. That was your pitch.

I did. I was like, listen, it's a terrible Netflix show. I was like, I need someone watching this with me. But man, it's amazing how our friends and family influence, in a good way. This is not a bad thing. Parts of our lives, businesses and brands we use. And when it's done and you're that brand or that business on the other side, it's to your benefit. Yeah. And we will talk about products that we

like, but we really talk passionately about services because those services are attached to people. So if you, if you're going to have someone come in your home to clean your home or watch your kids or teach your children piano or whatever the thing is, you want someone that you trust. You're not going to bring someone in your home that you don't trust. And so these personal interactions through the service-based businesses is that much more important. So the referrals are such an opportunity. And you can ask for referrals, but you can also incentivize. You can say, hey, get 20% off your next service if you refer someone that uses your name. And so that can be a really powerful example as well. That's a great question.

All right. We've got a call from Miles in Kansas. Miles, how's it going? Hey, guys. How are you doing? Great. How can Rachel and I help? So my question, my wife and I are fairly new to Dave Ramsey's plan, and we decided pretty much to dive right in headfirst. About two days ago, we made the decision to pay off our entire debt. Wow. And so we also recently had our first child about seven weeks ago and had planned to buy a house with our savings account. Now that we no longer have our down payment due to the debt payoff, how do we go about buying our new home and when is the right time to buy the new house?

Yeah, that's great. I love that you have a seven-week-old and you're like, we right time to buy the new house. Yeah, that's great. I love that you have a seven-week-old and you're like, we just decided to pay off our debt. I'm like, they're probably sleep-deprived or really, really smart having a newborn. Well, congrats on the baby. So I'm curious, how much debt did you guys have? How much did you use your down payment for? $57,000. Wow, Miles, that's incredible. Do you have anything left? Savings? We do.

We have our six-month emergency fund set in place, but that is it. Okay, wow. Because that was going to be my next step. So the plan, as you may know, is to get that $1,000 emergency fund, pay off all the debt, which you guys did, build up a three to six months worth of emergency funds. I was even going to advise you, I would stick to the six now that you have a little baby just in case it's just that extra safety net, but you guys already have that covered. So then the next step is, is babysit three B and that's when you're going to save up for a down payment on your home. And so kind of our rule of thumb

when it comes to buying a home is making sure that you get a 15 year fixed rate mortgage. You put down anywhere from 10 to 20% on the down payment. 20% is ideal. You can avoid PMI insurance. And that your payment on that mortgage is no more than 25% of your take-home pay. So it sounds like you guys are rocking and rolling and doing some incredible things. You'll have that 10% to 20% on the down payment saved up pretty fast. Congrats, Miles.

That's awesome. I love hearing when people are intense. Like they're excited. They're doing it. They're like, I'm all in. We're not going to tiptoe in this thing. We're going to do it. I love it.

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I'm Christy Wright, your host this hour, joined by my good friend and fellow Ramsey personality, Rachel Cruz. We're taking your calls about your life and your money. It's a free call, 888-825-5225. We've got a call from James in Connecticut. Hey, James, how's it going? Hey, I'm doing very well. How are you? Good. How can Rachel and I help? So I'm 20 years old. I have no debt, thank God. I bought my car outright, and I have a little over $13,000 saved, and I kind of want advice on what I should be doing next. That's awesome, James. You're 20, you said?

Yes. That's amazing. I'll be 21 in June 27th. Nice, nice. Very soon. How much do you make a year? I'm a cook right now at a local pizza place, probably around like $20,000, a little over $20,000. Yeah. Are you in school or are you

out just working? I never went to college. I never went to college. I'm really into health and fitness. I would love to pursue that in some way, but no college right now. Okay. Awesome. Well, from the financial side, I mean, you're killing it. You obviously probably don't have a ton of expenses. Uh, but the next step would be just to put away for an emergency fund. And so you'd figure out anywhere from three to six months worth of expenses and figure out that total for you and set that money aside. So that, that could be that 13, it could be less than that. It could be more than that, whatever your expenses are. I'm assuming they're more on the low side since you're a young single guy. But I would put that away just in a good money market account, savings account, and then anything extra, I would start investing.

I would open up. Have you opened up any kind of retirement like Roth IRA? I haven't, but I do invest in like blue ship stocks, things like that. Okay. So our recommendation is to, at this point, put about 15% of your income into retirement. And so opening up with a, yeah, an easy Roth IRA, or even if the business offers a retirement plan, I'm not sure if the restaurant does or not, but to ask and put that away. And then the next step would be to, you don't have kids. And so do you own a home? Are you renting? I live with my parents right now. and I was hoping to move out soon, and I was wondering if I should rent or maybe look to buy something cheap.

What do you think about that? Yeah, so that would be a great next step in all of this is to look to – I mean, it's really whatever you think. You're in kind of a transitional time in your life. Do you think you'll be in Connecticut where you're at for a pretty long time? Are you wanting to move? Do you know? If everything goes well, hopefully not. Okay, so staying close by. Do you think you'll be in Connecticut where you're at for a pretty long time? Are you wanting to move? Do you know?

If everything goes well, hopefully not. Okay. So staying close by. It's pretty cold here. Yeah, that's right. That's right. Well, if you're staying close and you know what part of the city you want to live in, you know what you're doing, then you can save up for a down payment.

And I would do that after your emergency fund. That could be another step before you start investing into retirement. And look to see for permanent residence. Yeah, I think getting out of your parents' home would be a great next step. Don't feel like you have to rush into buying something. I mean, real estate is going to be the largest purchase you probably ever make in your life. Like most people, that is it. So take your time, figure that out. So renting for a year or two is not a bad thing. I feel like people are sinning when they rent. And it's like, no, you're fine. Rent two is not a bad thing. I feel like people are like, you know, people, people are sinning when they rent and it's like, no, you're fine. Renting is not a bad thing for that transitional period. So you could even focus on that and then saving up for the down

payment. And then I would, I would look James for your long-term goals. I mean, you're 20 years old financially, nothing's really holding you back and to really kind of dive in and say, okay, what do I want my life to look like? You mentioned fitness and possibly pursuing that. So if there's extra education you need for that, maybe taking some classes, if there's any licensing or any certifications you need, I would be looking into that and saving up. Yeah, that's awesome. Absolutely. Thanks.

Hey, you're doing great, James. You're doing a great job. I love hearing from people, especially that doing great, James. You're doing a great job. I love hearing from people, especially that call Rachel that are young and already in a great position because you know, they're starting off on such the right foot. And then it's interesting because sometimes when you're in a good position, you've got options. You're like, I don't know what my next goal should be, but your financial goals are really informed by your life goals. Like you said, is it to buy a house? Is it to, you know, have additional exercise certification? So James has all the options, which is a good place to be. All right. We've

got a call from Jordan in North Carolina. Hey, Jordan, how's it going? Hey, I'm doing well. How are you guys? Great. What's going on? Good. I was calling in regards to a medical bill. I had some MRIs done this morning and yesterday when they called to do the pre-op questions, they notified me that $1,700 would be due today. And so my husband is still not working due to COVID and we've been able to save up a bit over the course of the last few months, just trying to save while everything was able to be put on deferment. And so my question was, you know, should we go ahead and pay this bill from the money that we have saved, or we were kind of waiting to go back to baby step two once he was back to work and I was back to work and we would be able to continue paying on our student loans.

You know, so we take the money out of what we have saved that we were going to pay off on our student loans and just kind of treat it like it's our new smallest. Right. Jordan, how much debt do you guys have total? Right now, $75,000. $75,000. And how much you have saved that you guys have been saving during the pandemic? Over the last month, $13,000.

$13,000. And then your husband's smallest debt is 11 000 say again that we were playing our smallest debt is 11 000 planning to pay off yeah after he went back to work yep okay and what's his what's his job situation with covet and everything when is he going back are you guys getting unemployment what's what's his job situation with COVID and everything? When is he going back? Are you guys getting unemployment? What's the situation? He's currently getting unemployment, but his boss has a small restoration shop. And so it was technically counted as essential, but he wanted to be better safe than sorry. And so he has not made a decision as to when they're going back to

work. Okay. Gotcha. Well, this medical bill of 1700, I mean, you guys have it in the 13,000. So I would go ahead and just, I would go ahead and pay it. Um, and then for you guys, um, yeah, to continue to keep that, that 11,000 that you're going to have left, but to really be thinking about the next few months, because unemployment does run out in July, and to say, okay, what are the next steps? What are we going to be doing so that you guys can be getting back? But the great thing is you're going to be able to knock out that smallest debt still,

even paying off this bill. But the MRI bill, I would go ahead and just pay. You have the cash for it. That is for these bills, unexpected bills bills that come up just like this, and then figure out the next game plan for the job. And once he gets back to work, continue to pay that snowball amount of $11,000. That's awesome. The smallest debt.

And it's impressive that they've saved $13,000 in such a short amount of time. That's awesome. Yeah. All right. We've got a call from Marcus in Florida. Hey, Marcus. How's it going? Good. How are you doing?

Good. How can Rachel and I help? Hi, Rachel. Me and my wife are just trying to figure out if we are kind of allocating our income after bills correctly in accordance with paying some student loans that I hold. Okay. How much student loan debt do you guys have? $53,035 of it's unsubsidized and $25 subsidized. Okay. How much student loan debt do you guys have? $53,035 of it's unsubsidized and $25,000 subsidized.

Okay. And are they broken up into multiple loans within those amounts? Marcus? Yes, they are. Oh, they are. Okay. And then what other debt do you guys have um just our house mortgage 127 okay so you're just looking at the student loans well taking the student loans i mean i would do it still the debt snowball smallest amounts largest amount so within that 25 000 and 35 000 subsidized and unsubsidized still breaking it out to the loan amounts that you guys have and start working on that being

your smallest and you're I'm assuming you guys have your thousand dollar emergency fund did you say that um yeah we have about 35,000 savings I guess that was an ad yeah that was an add-on question is should we allocate some of that savings against the loans without you know kind of depleting all of it yes uh. I mean, my shorter answer is, is yes, I would. I would keep a thousand dollars. Is your, is your current job situation good? Do you feel like you, you're making an income, everything with just the COVID-19 pandemic? I would have said yes before COVID, but they did lay off about 5,000 people and I'm not really sure. I've only been in this company about a year.

So it's kind of up in the air with that. Okay. Well, if I were you, I would pause. I would continue to have that savings until your income and job is stable. Then I would 100% take that $34,000, that's not that $1,000 savings, and start paying off that student loan debt. Thanks, Marcus. That's awesome.

Rachel, this was fun. That was great. Thanks. I want to thank my co-host, Rachel Cruz, producer James Child, and associate producer Kelly Daniel, and you, America. This is The Dave Ramsey Show. This is James Child, producer of The Dave Ramsey Show. You can now listen to The Dave Ramsey Show on Spotify, Pandora, or anywhere you listen to podcasts.

For all the ways to watch and listen, check out our show page at DaveRamsey.com.