The Ramsey Show - App - Parenting: How to Take Back the Lead (Hour 1)

Episode Date: March 21, 2019

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Music 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. The phone number if you want to talk about your life and your money

is 888-825-5225 that's 888-825-5225 now if you've been listening to this show for a while or you've watched some of the youtube videos or something else you know that we teach a process called the baby steps and we teach you that you must sacrifice to win there is no shortcut to winning you're going to live like no one else it's going to be a pain in the butt you're going to live on beans and rice rice and beans you're going to drive a junky car so that you can live and give like no one else you're going to sacrifice so that you can enjoy and so that you can be generous and so that you can have financial peace two words that don't go together

like airline service and so you're going to sacrifice to win you're going to give up some things to get some things you're going to pay a price either now or if you don't pay a price now and you stay in the mess, you're going to pay a price for the rest of your life called financial mediocrity. Financial mess. Problems. But to clean it up and be done

and build wealth is what we want you to do. And we teach you that there's three things you do with money. You save and invest it. You give it. And you enjoy it. But when you're in the first three baby steps, we don't really care much about your enjoyment. You're on beans and rice, rice and beans. You're not on vacation.

You're not going to see the inside of a restaurant unless you're working there. You've heard the routine, right? You've heard me say this over and over. It's what Sharonaron and i did it's what millions of other people have done in order to get free and get to the point that your baby steps are done your first three baby steps are done you're out of debt and you have your emergency fund in place then is when you start to enjoy a little bit more you buy a little better car with cash you buy a better couch with cash you can go on vacation then.

You start putting your 15% away for retirement. Baby steps four, five, and six at the same time. You guys know how this works. You live like no one else so that later you can live and give like no one else. And when you get to baby step seven, boom! I mean, you are really in that mode at that point. So here's what we're going to do. We're going to do something we've never done.

This is a little risky, but I'm excited about it. It's kind of fun. We're going to go on a cruise. You want to go on a cruise? Let's go on a cruise, guys. We are announcing today the Live Like No One Else cruise. Boom. Now, you need to be on Baby Step 4.

We're not going to come check. We're not going to ask you for a budget. We're just going to trust you on your honor. But you need to be on Baby Step 4 and beyond. If you're in Baby Steps 1 through 3, this is just you get to go on the next one. Okay? You can't go on this one. That's it.

Okay? So the Live Like No One Else, Cruz, is going to be March of 2020, one year from now. It is, and I tell you, Sharon and I have been on, I don't know, a bunch of cruises over the years, 25 or 30 of them over the years. We've been on every line, I think. And so we know the junky ones. We know the cheesy ones. And I ain't going on one of the junky, cheesy ones. They brought me one of those, and I went, nope, not doing that. Dave ain't going on one of the junky cheesy ones. They brought me one of those and I went, nope, not doing that.

Dave ain't going on that. I'm living like no one else too, so shut up. So this is on a brand new ship with Holland America, which is one of the top most luxurious lines. This is sweet. It's going to be amazing, you guys. Now we're going to go out of Fort Lauderdale. We're going to drop by the Bahamas and down to Turks and Caicos.

Oh, the water's so blue there. Yeah, then to Puerto Rico, then to St. Thomas. All the Ramsey personalities will be on the cruise. And I called up a couple of friends. So this is going to be lights out. Jeff Foxworthy is going to go with us. Yeah, that'll be fun, because Jeff's one of the funniest humans on the planet.

You won't want to miss that. And Stephen Curtis Chapman, Grammy Award winning Christian music icon, is going to go with us. And I can't pronounce Manette's name. Manette Chon or Chon or Chon, something like that. She is on the Food Channel. She's a James Beard Award-winning chef.

She's an absolute icon in the foodie world, and she'll be doing demonstrations and stuff there on the ship with us. And, again, it's Rachel Cruz, Chris Hogan, Ken Coleman, Christy Wright, Anthony O'Neill. We're going to have some of the Nashville songwriters with us. Of course, my pastor, Darren Whitehead, is going to be there. He's going to do devotionals in the mornings. And this is going to be lights out incredible. Lights out incredible.

Seven-day cruise, the Live Like No One Else cruise, March of 2020. Just go to DaveRamsey.com. You can go to RamseyCruise.com either one and you'll be able to hang out and celebrate the fact that you're now reaching the point that you're living like no one else now again we're not going to check and see if you paid for this for with a credit card but let me just tell you i'm gonna go and call you stupid up front if you do that okay we're not gonna check and see if you're out of debt and then baby steps four five six seven before you go on this but that's really where you should be this is not this is not something i'm not trying to get people who are in the first three baby steps i'm not trying to get your money but i'm trying to give the rest of you that have done that have paid a price to win an opportunity a place to celebrate and you know we're going to

be doing uh seminars and events and everything else there's only a 250 deposit required to book so you can book and hold your room right now it's a year out uh go to ramseycruise.com we're going to have you know obviously Foxworthy will be doing events. Obviously Stephen Curtis Chapman will be doing events. But the Ramsey Personalities will be doing seminars or forums or Q&As and, you know, content. It's not going to be like all day you're sitting on a boat in the room doing a seminar. No, we're going to enjoy these wonderful Caribbean islands. We're going to enjoy this process and this world-class food and these cooking demonstrations and everything else and

and you know and then we'll do it on a van if you want to you know hang out with us a little bit we're going to be around this thing all week so um it's going to be absolutely incredible so again something we i mean i did one of these that 30 people came on when I very first started a bazillion years ago. That doesn't count. This is really something we've never done. Because it's just, people feel like that when you say Dave Ramsey or you say Financial Peace, that it's all about broke, cheap people.

And you are broke and cheap for a little while, so that later you're not broke and cheap. That's the whole point. You're going to live like no one else, so later, you can live and give like no one else. And it's going to be epic. This is going to be incredible. So again, the Live Like No One Else Cruise, March 2020. All the Ramsey personalities, Chris Hogan, Rachel Cruz, Christy Wright, Anthony O'Neill,

Ken Coleman, me, Stephen Curtis Chapman, Jeff Foxworthy. Epic. Epic. $250 deposit will get you a room held. I don't think this will last very long at all. Based on our marketing research, we think that this will be sold out very, very quickly. You don't get a lineup like this hardly anywhere. Holland America, it's very cool.

RamseyCruise.com or always you can go to DaveRamsey.com and find out what's going on. But RamseyCruise.com will land you right in the middle of this and you can start to look at the details, start to talk to your spouse about it, and decide if this is a way you want to celebrate. We want to give you a place to celebrate with us.

We're proud of you. We're proud of you. And we want to say touchdown right in front of you. This is the Dave Ramsey Show. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money,

especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you. And yes, this is an ad for Zander Insurance. But since this is one of the most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough.

Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282. So this morning I was in a meeting going over the content and the workbooks and all of the marketing pieces and all the presentation pieces of this new event we've got that Dr. McMeeker and Anthony O'Neill are doing called Smart Parent. And it's two of the leading parenting experts in America, Anthony O'Neill, and is a teenage expert. He speaks to more teenagers than anybody else on the planet right now.

And Dr. McMeeker, of course, America's mom, one of our best friends around here. We love Dr. Meg. They're doing two of these events in Minneapolis and in Sacramento, May 14th and May 21st. And we thought we'd get Dr. Meg on and talk about it a little bit. How are you, Meg? I'm doing well. How are you, Dave? Better than I deserve.

Hey, I just tweeted one of those dad moment videos at you. Did you see it yet? I haven't. Yeah, pull open your Twitter. those dad moment videos at you. Did you see it yet? I haven't. Pull open your Twitter. I'll try to email it to you later. It's a military guy. His kid is recognizing that his dad is there and just completely breaks down. It's a wonderful, wonderful moment. It melts

your heart, doesn't it? They always do. They always do. And I know you kind of collect those because it reminds us of the importance of dads, right? You bet. You bet. So what are you and Anthony going to be covering at this Smart Parent event? I'm sure that's one of the items. You know, I'm so excited, Dave, because, you know, we really came up with this Smart Parent event

because we wanted to help parents understand what their kids are going through. And I think that's what Anthony is going to do, sort of say, this is what your kids are telling me. This is what they're struggling with. And then I'm going to be there to say, okay, parents, here's how you help your kids navigate a lot of pressures, a tough culture. You know, here are the pressures you're facing. Here are the pressures they're facing. And here's what you can do to really help get your kids on track. And one of the things, and you know this because I've talked with you about this a lot, Dave, is that parents are doing a much better job than they think.

I mean, they're closer to doing a really great job, and a lot of parents don't know that. So I'm really excited for these events. Yeah, they are going to be amazing. Again, I went through the content that you're going to be covering and that Anthony's going to be covering and the workbook review and the layout and how you guys are doing the minute-by-minute on the event this morning with the live events team and the content team.

And it's spectacular, Meg. I mean, this is a watershed event. It's called Smart Parent, folks. And it's going to be Anthony O'Neill, Ramsey personality Anthony O'Neill, and, of course, Dr. Meg Meeker, one of our best friends around here and one of the top speakers and teachers, communicators, writers on parenting in the nation today. The Minneapolis event will be May the 14th, and the Sacramento event will be May the 21st. And get your seats, of course, at DaveRamsey.com or AnthonyO'Neill.com either one and it's pretty amazing

you know one of the things I noticed in there not only in your stuff not only do you say that you're doing better than you think you are but you are intentionally speaking to moms and dads to take charge. You want to speak courage to them to take charge, to not let the inmates run the asylum. I love the way you phrase things. You're absolutely right.

And, you know, we've given kids sort of this power. We make them the center of our world. I mean, look at what's happening in, you know, the Hollywood and the, you know, the paying off of, you know, coaches and colleges to get their, you know, their lovely, perfect, precious, you know, kid in. And what happens is parents need to understand, you know, we run the home. We need to teach our kids how to follow our lead. We need to teach them how to be good people, live with integrity, be a disciplined person, and to understand that self-control and discipline and virtues are what really make a person successful in all areas of life,

relationships, work, sports, any extracurricular activities. So it really is about teaching parents, you know what, you've got to be in charge, you've got to set the boundaries, and life is so much more fun in the home that way. It is, and it's not some kind of authoritarian toxic harshness or something. That's not the issue. I mean, I used to spend an abnormal amount of time, it felt like, convincing my kids that everything we're discussing, all of these boundaries, have absolutely nothing to do with me.

They're because I love you. Exactly. And you're going to do this because I'm bigger than you, I love you, and it's what's best for you. And we're going to start with dad control, and over time with critical thinking skills, we're going to teach you self-control. Yes, exactly. And that's really what our job is as parents, is sort of to impose control on kids when they're younger so they understand this is what it's like to live

with rules and boundaries. And then as they get older, we begin to transfer some of that responsibility to them so they begin to take on self-discipline and self-control so that when they're ready to leave home, these are kids who really know how to control their behavior, how to excel. And if we live sort of doing things for our kids all the time and letting them do whatever they want to do, we really set them up for failure. And I see this with kids all the time. And so really I'm going to go out there and equip parents and say, look, you can do this. Here's how you discipline your kids.

And discipline isn't a bad, horrible word. You know, like you were talking about, it doesn't mean we're going to crack down on our kids and be mean. It really is about teaching kids how to live life well. And you have to be a strong parent in this day and age to parent well. You know, great parenting is not for wimps, particularly in a culture that's trying to take our kids down and with all the media and the screens and cell phones and that kind of a thing. And so any parent can do it.

Any parent can take charge of their home and really help launch their kids in a good direction. Well, in the 1950s, if you watched television, you saw children who were respectful of fathers and mothers. And today, the star of all the shows is a smart aleck, out-of-control kid that in my house would have had major problems. Yeah. Yeah.

You know, absolutely. That was diplomatically stated. But, yeah, I mean, he would have experienced pain had he run his mouth like that at me. You know, it really is. And kids, when they're allowed to behave that way, are miserable. And I can't tell you how many letters and questions I get from parents saying, my kids are doing this, my kids are doing this, they're telling me they hate me, they're writing on the walls, they wish I weren't here, they wish I were dead.

What am I going to do? And I say, what? You know, what are you going to do? Yeah, and I want to give her a cell phone for her 13th birthday because I want to encourage and inspire her. I said, what? It's like you can nurture stupidity away and you can't. Exactly.

And I think a lot of it, kids are running rip-shot over their parents. Exactly. And parents are miserable and they are miserable too. And so parents need to take back the lead. And that's what I really hope to teach them to do and encourage them to do in these conferences. You know, and in an effort to love our children well and to nurture them well as a culture, we have moved over the line in too many cases to where we made the culture so kid-centric that when they get out in the real world and they take their first job

and somebody tells them it's not all about them, they're shocked. It's the first time they've ever heard that. They think the axis of the world runs through their little head. Exactly. You know, one of a college admissions officer was telling me one time they often have difficulty because kids come to college and they have to live with a roommate. And they're not used to living with another person.

They have their own room and do whatever they want, and she said it's really very difficult, even in a small thing like that, to get kids to understand you need to share, you need to think about other people. And we really, really, from a biblical standpoint, it's idolatry. When we make our kids, you know, the center of the home, and we only think about them, and everything we do is cater to them, you know, we're miserable. And it really is wrong because we absolutely 100% set our kids up for failure because we teach them. Dr. Meg Meeker is going to be with us May 14th and May 21st with Anthony O'Neill.

Smart Parent is the event, Minneapolis and Sacramento. Check it out at DaveRamsey.com. Good to talk to you, Meg. Thanks for hanging out. Thank you. This is The Dave 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.

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Welcome to the Dave Ramsey Show, Chris. Hi. How are you? Good afternoon. How can I help today, sir? Well, I'm here to talk about my money and life. Okay, good. I wanted to ask, I have a primary residence, which I live in, and I owe about $117,000 on that primary residence. And I have a second rental residence or rental property that I have in Austin, Texas, that I owe about $77,000 on.

And my question is, I'm on Babe Kearney and Baby Step 2. My question is, that rental property has a tenant in it and their contract ends in august of next year so my question is should i sell that property in austin to get all my well not all of them i guess up through baby step four or three at least and four uh sold so i can do the get higher in the baby steps, basically. Yeah, gotcha. So what is the property in Austin worth? Well, last year, the Travis County appraisal was $305.

What do you think is really worth? Tax appraisals are not actual value. What do you think it's really worth? You know, I'm thinking it's worth 325 to 350 yeah i'm guessing you're right okay all right and uh i you know i i had a ton of equity in that home i've had it for about 20 years yeah but where i'm currently living i've been here well i i've currently lived i moved here because i was a job and we kind of the realtor that we worked with kind of suggested that we keep the property as a rental property.

And I'm glad, looking back on it, I'm glad I did because that property is worth a lot more money than what we actually paid for it, right? Oh, sure. But, you know, now, you know, I'm... Okay, so if you sell that, you have $250,000 cash, plus or minus, laying in the middle of your kitchen table, right? Right. Okay. And how much debt do you have not counting your home? Approximately about $11,000.

$1,000? Yes. Okay. So you could pay off your home. Yes. That's the idea, is that I would pay off the rental property, pay off my home. No, I'm sorry. If you sold the rental property, you'd be 100% debt-free.

You'd have your emergency fund, and you'd have money to invest. Yes. Okay. So here's the way you can ask yourself the question. It's a critical thinking exercise that I use all the time for myself and for others. Okay? Let's pretend you did not own the rental property and you had $250,000 cash piled in the middle of your kitchen table. Would you go buy that rental property or would you do

the other things we are talking about? Definitely do the other things that you and I are talking about. Then that tells you you should sell the rental property. Right. Okay. So what happened is you ended up in this rental property by default. You didn't set out to say, I'm going to own rental property in Austin while I live in San Antonio. It just kind of happened because you moved from there. It was your former home. It's turned out to be a blessing because it's gone up in value, and it's probably going to continue to go up in value.

Austin's a wonderful market, but that's not the point. The point is your life and what is best for your life. And if I'm in your shoes, I'm selling it for the same reasons you thought you would sell it, to be 100% debt-free, and then I'm going to start saving cash above my normal investing to buy and pay cash for a rental there in San Antonio, if you want to own rentals, if you want to own real estate later. But that would be three to five years out from now. Sure.

And in the meantime, you're how old? I'm 49. And you have zero debt, no house payment. So one other, I guess, question, Dave, is so there's a tenant in my Austin home that's there through August of next year. So we have a contract with this tenant. So I'm not sure, I guess part of the question is should we let that tenant, you know, fulfill the contract, the term of the contract, and then sell? I mean, because I get people calling me all the time that they'll buy the property from me now with or without a tenant.

If they'll buy it with a tenant, the contract has to be honored, technically speaking. Right. Okay, you can't break it, and a buyer can't break the lease, unless the lease has a clause in it that allows you to break it. Now, sometimes you can offer a tenant five grand and they'll move yeah you know like if let's put it on the market and you help me get it sold because you make it available and you keep it clean and uh you're gonna make a little money baby if that happens and uh and i'm paying you to break the lease is what amounts to and they they would have to agree to that.

You can't force them to do that, morally or legally. But you're saying August of 2020 or August of 19? No, August of 2020. Yeah, long lease. Yeah, it was a two-year lease. Oh, that's unusual. Okay. And you left yourself no outs in that lease whatsoever?

Well, no, there's basically cannot amount. I mean, we have a real estate agent that watches the property for us, and he does a great job for us. And, I mean, obviously he gets part of the pie. That doesn't matter. All that matters is what this contract says. Right. And this contract gives you your legal and your moral obligation,

because it was your handshake and your word and your integrity, plus it's actually the word of the contract. But the contract does not say you can't sell the house. It says you can't force them to move. Right. Another buyer can buy the house and collect the rent. But I would go to the tenant, if you want to go ahead and move make a move on it and say well you know if you'll help me get it sold one of two things could happen you

could stay and work with a new buyer or um or i will pay you a fee to break the lease and negotiate that if you would consider doing that and uh most of the time, someone who's a tenant, if you offer them $2,000 or $3,000 or $4,000, that's a lot of money. Right. And it becomes a really good deal for them. But that's not up front. That's upon the sale, upon the closing. And when they move out, you'll give them their deposit back as long as they leave it clean,

just like you agreed to, and you'll give them an extra fee for breaking the lease. You can negotiate that with them if you want to, and that's perfectly moral and perfectly legal. But you can't just say, you have to move, because that's not only the word you gave, but it's also the other. But if you had a buyer that wants to be a landlord until August of 2020, then your problem is solved there. So I'm going to begin the process, though, one way or the other.

I'm going to begin a discussion with a real estate agent to get on the market with some potential buyers, and I'm going to begin a discussion with the tenant and say, you know, under what circumstances would you feel good about letting us buy you out of the lease? And what kind of dollars we'll be talking about in your mind? And just have a, you know, treat them like you'd want to be treated, kindly, firmly, up front. Everything's going to be the truth. And so here's the deal.

I'm selling the house. And either the new buyer is going to honor the lease, or you can make some money by being willing to move because the new buyer might want to live in the house. And it's up to you. You know, that's how your discussion goes with the tenant but i'm definitely selling this house hey thanks for the call uh yelena is with us in spokane hi yelena how are you hi dave thank you for taking my call sure what's up um so i was

just wondering i'm planning to go into the real estate field um And we are currently with two little babies, and we are in under $16,000 debt coming from $23,000 in eight months. We paid off around $8,000. Good. So I just wanted to get your help to kind of pay off our debt so that I can go into the real estate field. Are you working outside the home now? I'm not because I currently have a newborn that's two months old.

So when would you be talking about going into real estate if you were debt-free today? When would you start? Well, right away. You would start work right away with a newborn? I would because I do have family that could help out. Okay. And so what does your husband make? What does your husband make a year?

Currently right now I think it's around $40,000. Okay, and you've got $16,000 in debt? Yes. Okay. So what we've got to do is we have to sit down and say, all right, what can we do to create extra income and tighten our budget in order to get the debt cleaned up as much as possible so that I can talk about moving into the real estate field? And if you're willing to go to work today and have family watch the baby while you go into real estate, you could be willing to go to work to make some money to get the debt paid off. It's the same thing.

So you could work. It's up to you, but that makes it go faster. More money comes in, faster we get out of debt. This is the Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war. If I've taught you anything, it's that blindly throwing money at a problem is a stupid plan and something you'll regret for years.

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NMLS ConsumerAccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee, 37027. Canada is on the line. Andrea is calling. Hi, Andrea, how are you? Hello, sir. I'm good, thank you.

Good. How can I help? So my husband and I have about $52,000 of debt in line of credit and visas. And what is hindering us in paying any of that back is that we foolishly have two brand new vehicles. So I just want to know what my plan of attack is to get this debt paid off. Gotcha. What's your household income?

$97,000. And what do you owe on the cars? The truck we owe $36,187. It's financed. The Traverse is a lease. It's a brand-new lease, about six months. And what was the sticker on that car when you got it? I actually don't know what the sticker

of the Traverse was. Roughly? $50,000. Yeah, that's what I'm thinking. Okay. So you have $86,000 worth of car debt, basically. Yeah. Okay. And you make $97,000. Yes. Yeah, that's an issue. Yeah. Thank you.

You knew that, right? Oh, yeah. And the $52,000 is what kind of debt? You said credit cards? So it's student line of credit and a visa. Okay. So three of the four line of credits and one is a visa. Gotcha.

Okay. Well, here's the math facts for us. The largest things that you and I buy price-wise that go down in value are cars. Yes. Cars lose 60% to 70% of their value in the first four years that you own them. When you buy a new car, it's $ it's 30 000 bucks it's going to be worth 10 11 000 bucks in four years okay and since it's the largest thing that is going the wrong way mathematically it is the biggest theft or one of the biggest thieves of our wealth building because it's going down in value and then add to that if we finance it.

So even if you paid cash for cars and had no debt on them, you would not want to have too much tied up in cars because they go down in value. Now, what is too much? Well, too much is a ratio, okay? It's a ratio of, you know, your income, which is your wealth-building tool, in your case, $97,000, to the cars. So what we have figured out and run numbers on is if you have vehicles, paid for or not, and this is anything with an engine in it added together, cars, trucks, motorcycles, sea-dos, boats, lawnmowers, tractors, whatever, added together. They all go down in value.

If they all added together equal more than half your annual income, you have too much tied up in things that are going the wrong way for you to succeed mathematically in wealth building. Is that logical to you? Absolutely, yeah. Okay. And so that logical to you? Absolutely, yeah. Okay. And so that's where you are. Not only is this debt choking you to death, but you have $86,000 in cars,

and you should have no more than about $45,000 in cars. Okay. So my dad has two vehicles that are both 2013s in good conditions that he is willing to sell us. So they'll be used vehicles that are good enough. What is my plan of... What would he sell them to you for? He would sell it to us for probably $15 a piece.

Okay, that's $30,000. That's a move down. It's not really enough of a move down, given the mess that you've got. I'd put you in $2,000 or $3,000 cars each until you get your mess cleaned up. And then if you want to move up in car with cash, that's fine. But you don't have $30,000. No. And so, you know, you've got to stop borrowing money to buy cars,

and you've got to stop buying vehicles that total more than half your annual income. And that's not a Dave thing. That's a math thing. Right. And so if I were in your shoes, this is how I answer questions on this show, I'm going to use that set of material, that set of content you and I just talked about, that set of facts that we just talked about, in order to make my decision if I'm in your shoes. And that means I'm selling both of these cars as soon as possible,

and I'm getting two $3,000 cars that I pay cash for. And then I'm going to get out of debt, and then I'm going to build my emergency fund, and then I'm going to pay cash to move up in cars. But that is all going to take you three years. Okay. That's what, you know, if you run run the math out how quick can you pay off 52 making 97 if you don't have these cars right you know a year and a half and then you got to build up your emergency fund and then you got to save up to move up in cars so you're driving you're

driving junkers for between two and three years hoopties in order to get your life back yeah because think about it if you had no payments at all except a house payment. Wow. It's a completely different place. Absolutely. Yeah, your chest isn't as tight. Your stomach's not in your throat. Your back doesn't hurt.

Your neck isn't stiff when you go to bed. And all of those things happen because of the amount of debt you guys have right now. This is just not fun. It's a bad place you're in. And I i'm sorry but that's exactly what i would do you're in a very radically bad situation and so the the uh the prescription the prescription or the antidote is radical because when you move from 86 000 in cars to 6 000 in cars some of your friends or your parents are going to think you've lost your freaking mind. But here's when you lost your mind when you bought these things.

So this is radical. This is radical. But it really is a radical mess. And so it's going to require a radical solution to the problem. So now here's what's interesting as we think about that. I was with a guy the other day. He goes, you don't like me. And I'm like, who are you?

How do I know I don't like you? How do you know I don't like you? I don't remember meeting you. He said, well, I'm a new car dealer. I said, I'm not mad at new car dealers. I bought two new cars last year. I don't tell you not to buy a new car after you've got a net worth of a million dollars or more. You can buy a new car if you want, but pay cash for it,

and it needs to be the total of all your vehicles equals less than half your annual income. And so, I mean, just think that through, okay? And so, or, you know, it needs to be a small percentage of your net worth okay i've got a friend of mine that um just bought a 425 000 car now i'm from antioch tennessee that blows my freaking mind i can't get my head around that okay but he's worth a billion dollars he's a billionaire okay so let me give you the ratios a billionaire buying a 425 000 car is like a millionaire buying a 425 car so in other words he could he could buy a week, and it probably wouldn't affect him mathematically. Now, I understand emotionally, and some of you think you have to be poor spiritually,

and it's hard for most of us to get our head around a car like that. I can sympathize with that. I'm that guy, too. But when I understand that's the ratios i remember a few years ago there's a big stink tiger woods bought a house that was like i don't know it was like 170 million dollars or something that year he made a billion dollar income okay and when you back out the numbers it's's like somebody making $100,000 buying a $17,000 house. I mean, it's about ratios because is there room left for you to wiggle?

Is there room left for you to be generous? Is there room left for you to be – and by the way, my friend who bought the $425,000 car that is worth a billion dollars gives away hundreds of millions of dollars a year. Hundreds of millions. His income is ridiculous. And so, you know, and yet he'll get criticized for having this car. But for him, it's like most of us buying a biscuit. You know, it doesn't show up us buying a biscuit, you know. It doesn't show up.

So that's what you want. You want your cars. I mean, if you want a zero-turn John Deere tractor to mow your grass with that's $12,000, I'm okay with that as long as you don't have $ thousand dollars to your name and a hundred percent of your net worth is in a zero turn tractor which would make you stupid okay but if you've got two million dollars and you want a nice john deere tractor to drive around your yard with get you one but pay cash for it and make sure it's a small percentage of your world. That's how you look at this stuff. It keeps you spiritually on balance, financially on balance, and generously on balance. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show.

If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.