The Ramsey Show - App - Proven Methods to Reset Your Life and Live Smarter (Hour 1)

Episode Date: June 25, 2018

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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 am Dave Ramsey, your host. Thank you for joining us, America. This is a free call for you, and some say the advice is worth what you pay for it. The phone number is 888-825-5225. That's 888-825-5225. Megan starts us off this hour in Los Angeles. Hi, Megan. How are you? Hey, Dave. How are you doing? Better than I deserve. What's up? Okay, I have a real estate question for you. I'm new to the idea of getting into the real estate market. My question is, I currently live in California.

I have no debt. I'm 26 years old, but I'm originally from Iowa. And I just, I would like to get into the real estate market, and I don't own a home. And being in California, I just see it not as feasible to being so young and single, not buying my house first here as opposed to getting in the market back in Iowa where it might be a little bit more affordable for me. And I know you have mentioned before that you suggest first buying your own house first.

Yes. But I didn't know your thoughts on that based on where I live in California. Well, it doesn't change anything. The bottom line is part of your financial planning before you start investing in something as large as real estate should be that you've stabilized your personal residence situation, and it's not stable when you're renting because you're at the beck and call of a landlord. They can change your rent, obviously. And so, yeah, it's a certainly more difficult equation with what you've got, but it doesn't change the principle of I would first buy my own home

and get that paid off before I start buying investment real estate. And on top of that, I don't do investment real estate long distance. It's a good way to, you know, have a tenant tear your house down and you didn't know what happened. And I don't care who you say you've got watching it. It's not their house. It's yours. Or not their investment.

It's yours. And so, you know, until you get into the hundreds of millions of dollars, I don't do long-distance landlording. It's a bad idea for residential in particular. And so that means we're not buying. I wouldn't buy rentals in Iowa if I lived in Los Angeles to start with. So that's a couple of strikes against the idea. And I'm excited that you want to be in the real estate business and so forth.

And a lot of people will teach you to just borrow your butt off and go into the real estate business. When I was your age, I owned about $4 million worth of real estate, and I hadn't borrowed plenty of money to buy it all. And all of that borrowed money caused me to go broke and lose everything and bankrupt. And so I really don't recommend that method for that reason. But thank you for calling in. Matt's with us in St. Louis.

Hi, Matt. How are you? I'm doing good, Dave. Good. What's up? How are you? I'm doing good, Dave. Good. What's up? How are you? Better than I deserve. My wife and I combined our 4-0-K and IRAs, about $400,000. Way to go. And our house, at the rate we've been paying on it it'll be paid off in February of 2025.

Would you recommend I back down on what I've been putting in my 401k? I've been putting in 15%. No, I'd keep putting 15% in. Pay off your house as quick as you can while you're doing that. You've done a great job, 400k. Excellent. What do you owe on your home? $70,000.

Why is it going to take that long to pay it off? We've been paying an additional $250,000 on it since we took out the mortgage. And what's your household income? After taxes take home, about $50,000. Okay. All right. Well, you're doing really well. You're doing really well.

How old are you guys? 49 and 47. Okay. And so, you know, you won't even be 60 and your home will be paid for, and you're going to be worth, you know know close to a million dollars by the time that all happens so uh with the plan you're using so i don't see anything broken with your plan but anytime you get any extra money between now and then of course we throw it at the house we're limiting what we're putting towards retirement to 15 percent um you're not going to go bankrupt if

you stopped putting money into the 401k and threw everything at the house and knocked the house out, which is your question. If you want to go that way, you could if you want to. I wouldn't. I'd probably stay with the 15%. It's working for you. 15% of your income going towards retirement. Anything else I get a hold of, I just throw it at the house, throw it at the house. You've steadily been doing the 250, but anything, you know,

maybe you get a little inheritance or a little bonus or you sell some other item or something, and just any time you're sitting on a little extra money, reach over there and throw it at the house. The good news is it's only $70,000, and, you know, a pop here or there would knock it out. You're getting close. So well done.

Very, very well done. Santiago is with us in West Palm Beach, Florida. Hey, Santiago, how are you? Hey, Dave. Nice to talk to you finally. You too. How can I help? So I'm 18 years old.

I just graduated high school a little bit ago. Congratulations. Thank you. And I've been watching the show since I graduated. I found it a week after I graduated. And I'm all about being debt-free, so I really want to know what I can do. I'm a server. I work 20 hours a week full-time.

I'm getting ready to go to school in two weeks. Oh, cool. You're heading off to college already? Yeah, yeah. Summer term. I'm studying political science. Okay. So where are you headed?

FAU. Okay. And is that So where are you headed? FAU. Okay. And is that there? I don't know FAU. What are you in? Florida? Florida Atlantic University. Okay.

It's in Boca. Okay. Yeah. So it'll be like a 50-minute commute because I'll be living with my parents for a while. Okay. So you'll keep the server job. You're going to head down there and start taking classes in two weeks. Have you got the money to pay for those classes?

No, not yet. Like, I'm saving up. I have $1,000 saved up right now, and I do have the $1,000 emergency fund baby stuff going. How are you going to pay for the classes when you sign up in two weeks? Well, the financial aid,

I got an estimate of five thousand per semester okay and that's going to cover the classes then yes and my parents make like a household income of around 35 000 so it's not much but try to help me the best that they can but mostly it'll be my hard work gotcha well the the things that get you through college debt-free are this. Number one is the college selection. Select a college that's in-state and or use community colleges to get the best possible deal on tuition. You've done that. Good job.

Well done. Number two, work like a crazy person. You're already doing that. You're probably going to even pick up more hours. Work all you can work. And I worked 40 to 60 hours a week while I went through school in four years. And I got through school in four years. So you can do that.

Go after the scholarships and financial aid. You're already doing all of that. So you're doing a lot of the right things, Keith. You're heading in the right direction. The only other thing I'd do is jump on myschole.com and start applying for scholarships. And I'm going to send you a copy of Anthony O'Neill's national best-selling book that he did with Rachel Cruz called The Graduate Survival Guide. Five Mistakes You Can't Afford to Make in College. I'm going to send you one of those out.

Congratulations. You got a good start. If I can help as you're going along, call me anytime. You know, people often struggle when they're starting their financial plan. It's not easy breaking bad habits, and I always recommend that you keep it simple and take care of your family. That's why term life insurance is one of the most important steps to take when you're getting started. If you have a family, then it is crucial that you have the right amount and the right kind

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you can easily knock out one of the most important steps to protecting your family. That's Zander.com or call them at 800-356-4282. Thank you for joining us, America. We're glad you are here. Open phones at 888-825-5225. Boris is with us in L.A. Hey, Boris, how are you? I'm good, Dave. How are you? Better than I deserve, sir. How can I help?

Okay. Yeah, my wife and I, we're looking at paying off our mortgage earlier. And so right now, we pay an additional $2,000 minimum above what we actually do every month. And so the other things that we do, we also give to our church on order of about a little bit more than $20,000 a year. What is your household income? It's around $230,000. Okay. All right. Yeah. And so I guess it's not a strong sum because I do enjoy giving,

but I guess I'm just wondering, should we look at the tithe at all in terms of pulling money over to even get done a lot quicker? Oh, use the tithe money to pay off the mortgage quicker? Yeah. Oh, I see. Okay. Well, I guess that would depend on, you know, your view of Scripture on those kinds of things. I'm an evangelical Christian, which means I take Scripture pretty literally. As I read and study the tithe, it's first off the top before anything else and goes to the local church. I've been a tither since I first met God.

I never started, never stopped. I started immediately and never stopped. So you don't want to give a tithe out of legalism or out of performance, meaning people do that. Sometimes they think God likes them more or something because they tithe. That's not in Scripture. And you certainly don't want to give a tithe because it's a salvation issue. You can't find that in Scripture either. It's just your loving heavenly Father is looking at you and saying,

kiddo, here's the best way to live your life. The first thing you do is you give 10% off the top of your income to your local church. Then you do this, then you do this, then you do this. You know, get out of debt, borrow or slave the lender, live on a plan. You know, you don't build a tower without first counting the cost uh you live on less than you make because the foolish devourer is all he has and so on you go through the scriptural guidelines on handling money and um it's just your dad sitting down and going hey kiddo here's the way to live and if you live this way you're

going to have a better life uh being out of debt is on that list but giving off the top is on that list too but again not from a heart of uh materialism or from a heart of uh trying to get god to like me more or something like that he already likes me he's crazy about me and uh you can't keep him from doing that uh and so it's none of that but it's just a matter of I'm just going to follow what I consider to be the guidelines, the principles from a dad that loves me, and it's give first. So no, all of that to say I would not in context of that. I would not cut the top out. Not in a million years, I wouldn't.

But it's not because I'm afraid I'm going to getapped you're hearing that loud and clear right oh yeah no i i feel that way as well i guess i was just looking for i mean maybe confirmation or a different perspective or another perspective again i i don't i don't think he's gonna look down there and and you know like take your wealth away or something like that. But there's something that happens when we put giving first, not only in our checkbook but in our hearts, and it resets our mind on how things really work and what's really important. And there's a direct correlation between generosity and building wealth. The vast majority of people who build wealth are generous people.

There's a direct correlation. And it's not that, you know that you're not giving to get. You're not trying to tell God what to do. I gave you money, so you have to give me more back. That's not what I'm talking about. Not at all. But the correlation is that it changes who you are as a person. And generous people are just more attractive people.

So I appreciate you being concerned about it. I wouldn't do it. I'm not going to be mad at you if you do. But I wouldn't do it, and that's my basis for that. Jeremiah is with us in Italy. Hi, Jeremiah. How are you? I'm doing good. How are you?

Better than I deserve, right? Amen. Amen. So what are you doing in Italy? Well, we are currently doing the Financial Peace University, and I'm currently on baby step number two. We have about $38,000 in debt between me and my wife and I, most of which is credit card debt. We also have a small personal loan and student loan debt. And so right now we're trying to make a decision between do we reduce all investments and commit entirely towards paying off debt, or do we continue with our thrift savings plan investment in spite of our debt.

Thrift savings plan. So you're serving in the military in Italy. Yes. American military, U.S. military. What branch? Air Force. Cool. Well, thank you for your service. I appreciate it very much. Well, the thing that we teach is that if you will focus completely on getting out of debt, your probability of ever

getting out and the speed at which you get out is much greater. And so it's what we believe really strongly. The power of focus even supersedes the power of math. Now, I don't recommend cashing out TSP, but I would temporarily, temporarily, temporarily, temporarily stop adding to it. While you work your baby steps two and three, you get yourself out of debt and you have your emergency fund in place, then restart your TSP and and three, you get yourself out of debt and you have your emergency fund in place. Then restart your TSP and or whatever retirement savings you're doing at baby step four and put 15% of your income away at baby step four.

But you probably heard me say that in Financial Peace University. You're going to temporarily stop investing because the power of focus on debt really matters. But no, I wouldn't cash it out. Your penalties would be way too high. Right. Okay. Easy enough? Easy enough. Thanks again for your service.

Eddie's with us in Pennsylvania, Lancaster, to be an example. Hi, Eddie. How are you? Great, Dave. Thanks for asking. Sure. What's up? Well, the good news is I'm debt-free. Yay! Yeah, I recently paid off everything. Sure. What's up? Well, the good news is I'm debt free. Yay. Yeah, I recently paid off everything.

So I'm renting and, you know, my utilities and that's all I have. But the bad news is I recently lost my job. So I've been driving for Uber to make money. And I'm thinking of relocating to the West coast of Florida. Um, I do have some money to invest and I'm just not sure. Um, I recently bought a, a max out an IRA, a Roth IRA. So I put in the 5,500 and then I, um, I'm just not sure if I should invest the rest in mutual funds or maybe buy a condo in Florida because right now I'm renting. Yeah. How much do you have? Right now I have a remainder of $40,000. Good for you.

Okay. And what are you going to do for a living in Florida? Well, that's the thing is I was injured on the job, so the money I have is from a settlement from workers' comp. So I'm redirecting my focus and I'll probably wind up starting in a similar field at a sales level or something, entry level. Since my expenses are low, so I can pretty much start from the ground up again. Okay. I would want you to make the move and make the career transition before you bought.

Okay. Okay, because the buying, you can't predict until you get the move done, you're in Florida, and you've got an income coming in. You know what you've got to work with to buy. And I want to make sure you don't need this money to take a class or get a certification or something like that to create your career transition, and I want to make sure you don't need the money to make the move with before we buy the condo. So, yeah, let's make the move down there, rent for a year, get settled in. Make sure you're not spending this money.

Keep your hands off of it because that's your down payment money. And you do want to buy a condo, but let's get settled in in the career get settled in in florida you know let the let the smoke clear off of this issue uh off of your life to where you have a more predictable environment when you buy and it'll tell you that will inform you as to what kind of condo you ought to buy what kind of money you ought to spend on it and you know that kind of stuff even the area, you'll learn the area a little bit better in a year. But let's get the career stabilized, and that'll tell us a whole, whole lot as to what we're going to do. When you do get ready to do your down payment, always hold back an emergency fund of three to six months of expenses. So you're debt-free with three to six months of expenses.

Plus your down payment on the condo, and don't buy a condo where the payment is more than a fourth of your take-home pay on a fixed-rate 15-year mortgage. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other.

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It's a free call at 888-825-5225. Kay follows me on Twitter, at Dave Ramsey. About 800,000 of you hanging out there. Thank you for doing that. She says, when should someone get life insurance? When someone else is counting on your income? And so if you're a young single person and you don't have anyone counting on your income to eat, no kids or spouse, that kind of a thing, and you don't have a bunch of debt

and you got a little bit of money saved, enough to bury you, then you probably don't need life insurance if you're 25 and single and no dependents and hardly any debt and you got five or ten thousand dollars saved to cover your burial that way mom and dad don't have to do it if something happened then you're self-insured you're fine at that point when you have babies and husbands and wives that count on you to eat you need to feed them and the the kids, the longer you have to feed them before they feed themselves. And so, baby, you got a 20-year window, right? You know, 10-year-old, you got a 10-year-old window, give or take.

And so maybe take them up through college or whatever. But, you know, if you're going to leave behind a spouse with two kids, five and four or five and three, then you've got, you know, you've got a real serious need for life insurance. And you should have about 10 times your income on you and about 10 times your spouse's income on them. 15 to 20 year level term life insurance. 10 to 12 times. So if you make $50, thousand dollars a year you get 500

600 000 that's 10 to 12 times somewhere in there now if you invest six hundred thousand dollars in a decent growth stock mutual fund it'll probably throw off about 50 grand a year and so you were making 50 you died you left your spouse without that income. That $600,000 invest makes $50,000. We just replaced your income. That's the idea. So don't buy too much life insurance. You have to sleep with one eye open. You're worth more dead than alive.

Don't do that. But the point is that you are taking care of, you're replacing your lost income with a lump sum investment into some good mutual funds. Where does that set you up? How much do you need to do that? Now, what if you don't work? What if it's like a stay-at-home mom, as an example? Well, somewhere $250,000 to $400,000 is probably about right in most cases. So, in other words, we're saying if uh you know if dad makes 100 grand a year

and we probably put 400 on mom million on dad okay why well if something happens to mom we don't lose her income but we lose all of the economic benefit that she brings to the household and uh if you're raising three little kids you find out real quick if mom's not there what the economic benefit that she provides for that household is and uh it's you know obviously cooking and cleaning and nannying and uh carrying kids around and uh you know delivery service and uh i mean the the amount of different things that a mom does is unbelievable if you try to replace it and hire somebody to do all of it, it's going to cost you an easy. I mean, you've got to bring in Mary Poppins with Parrothead umbrella here, right?

And so we're talking $40,000 a year in that situation. And so 10 times that puts us at the $400,000 range. Now, if you're in a lower income situation like that rather than a higher income, maybe dad makes 40 grand. Well, then maybe you put 250 on her just because I'm not trying to spend all my money on life insurance is what amounts to. But the point is, we are recognizing that the stay at home mom provides an economic benefit to that household that's real that would have to be replaced if something happened to him. And that's not like some kind of philosophical tip of the hat to moms.

It's just an economic fact. And it is a philosophical tip of the hat to moms as well, because we all do that. It's called Mother's Day, right? But, you know, the truth is, try replacing what mom does by hiring somebody to do all that, so you can go to work every day. You're going to discover that it's an economic benefit. So, you know, taking care of all these different issues around the household. Tyler is with us in Seattle.

Hey, Tyler, how are you? Hi, Dave. Good to talk with you. You too. What's up? Hey, I want to thank you for your plan. My wife and I have been following it. We're about 22 months away from paying off our house.

Good for you. And we have about $300,000 in long-term investments. Wow. And that's kind of where my question stems from, is you have kind of those four recommended areas to invest in for your long-term. How many mutual funds in each one of those? I guess kind of like do you pick one, two, or three in each one of those areas? And the questions kind of come as that value has come up over the years.

Yeah, I mean you can spread it out across a few if you want. If you've got a million dollars, I wouldn't have it all in four funds. I'd probably have two or three in each category to the point you've got a million dollars, I wouldn't have it all in four funds. I'd probably have, you know, two or three in each category at the point you got a million bucks or something like that. But here's the thing you'll recognize pretty quickly. If you pull up the typical growth stock mutual fund that has performed really well and you say, okay, well, I want another growth stock mutual fund because I don't want it all. You know, I want a fourth of my money, 250 250 000 out of a million in one fund right i want to diversify that a little bit which is kind of what you're saying isn't it if i if i pull up another growth stock mutual fund that's done really well when i look at the stocks that those two own it's pretty similar yeah that makes sense

so you don't get this ton of diversification by buying two different funds that own the same stocks, you know. So you can look at that and try to see if somebody's got a little different approach to investing and a little different portfolio mix or whatever. But, you know, if you look at one, it's got, you know, I don't know, 10% of its investments it wouldn't have, but 10% in Home Depot. You look at the other one, it's got, you know, I don't know, 10% of its investments it wouldn't have, but 10% in Home Depot. You look at the other one, it's got 6% in Home Depot. Well, you've got a lot of Home Depot. The more of those you keep buying, the more Home Depot you're going to have in your mix through those mutual funds.

So it's fine, but you don't gain a ton of diversification by just buying more mutual funds in the same category so you know two or three four in each category or something i definitely wouldn't go any higher than that just because it creates all this paperwork to keep up with and all these different accounts and all that and again you don't gain that much but i'm with you i think there's a benefit to spreading it out a little bit i keep mine fairly spread out like that. And, man, you are doing a great job. And it's obvious, Tyler, that the reason you're doing a great job is you're paying attention. So, hey, thanks for the call.

You know, I get asked all the time, these reporters ask me these reporter questions. Here's one. Listen to this one. See if you think you've ever heard this one. What is the number one mistake that consumers make with money? You think I've heard that a couple times in 25 years? What's the number one mistake? Because they always want you to say, you know, student loans or credit cards

or leasing a car or whole life insurance or payday lenders or not doing a budget or whatever, right? And all of those things are mistakes, but they're not the number one mistake. You know the number one mistake people have with their money they don't bother if you drive the car without your hands on the wheel and your eyes closed you're going to wreck the car duh you have to bother. You have to freaking pay attention. Did you know if you don't pay attention to your marriage, you're going to have a marriage problem?

Did you know if you don't pay attention to your kids, they're going to be hellions and you're going to have all kinds of trouble with them? Did you know if you don't pay attention to your money, you're not going to have any? You win at things you pay attention to. So pay attention to your money. That last guy, he's 30-something years old. He's killing it. Hundreds of thousands of dollars saved, got his house paid for. He's killing it.

He's killing it. He's in his 30s. What's the difference in him and somebody calls me up 50-something years old broke as a poker chip, man? You know? The difference is they paid attention most people make enough money to do okay they just don't pay attention they don't pay attention you have to pay attention and you will win at the thing you pay attention to when i was a kid people didn't run unless somebody was chasing them. Nobody was out jogging.

Well, when we come back from this break, I'll tell you one day what happened. We saw our very first jogger in our neighborhood. This is the Dave Ramsey Show. Folks, the real estate market is on fire all over the country. If you're looking to buy a home and you need a mortgage, don't sell yourself short by going and getting a typical pre-approval. That's a false sense of security, and it's just not good enough in today's fast-moving market. Instead, call Churchill Mortgage and get their certified homebuyer program. I'm telling you, it's a game changer. Churchill helps my listeners become fully approved before they go house shopping. In other words, Churchill does up front what most lenders

wait to do at the last minute. This gives you an advantage over other buyers and helps you close really fast. Plus, Churchill won't let you get into more house than you can afford. So become a certified home buyer and get ahead of the game. I trust Churchill Mortgage. Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. Equal housing lender 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. So I promised after the break we'd talk about what happened the first time I ever saw someone jogging, running. Because I'm telling you, nobody in our neighborhood, the little kids, when we were little kids, we'd run and play and do things. But there were not adults strapping on jogging shoes. There was no such thing running up the street.

When I was a kid in the 1960s in antioch tennessee it did not occur now there may have been some joggers in california by then but i don't know so i'm probably like six years old and uh here comes this guy running up the street now he was a big old boy i mean he he was uh he was a he was a hefty character and he had on you know the of course this is 1960s because if you didn't have jogging and you didn't have jogging shoes you know you didn't have jogging uh uh clothes right you didn't have the the suit the jogging suit or anything like this so you know what he was wearing is the old gray sweatsuits, like Rocky. Remember Rocky 1? Okay, that kind of thing.

And so here comes this big old boy in these gray sweats running up this road. And the little kids were in the front yard playing, and we were running in the house and said, Mama, grown man just ran up our street. And she's like, say what? We couldn't believe that actually happened well the next day this guy's running up the street again and the next day this guy's running up the street again well it got to be a thing where the kids like we would line up because we knew about what time he was going to go for his run and we would run along beside him for a little while till we ran out of breath or whatever and he kept running and uh because we thought it was

like this spectacle it was this weird occurrence because this had i never seen anybody do this adults would come out on the front porch and go there's that guy running up the street and everybody nobody it was a mystery why this guy was running up the street you know why who why an adult would run i mean you just it was weird and so finally um one of the adults got up the nerve to find you know find out figure out where the guy lived up the street and stopped in and just said hey you know what is the deal you're you're running i mean and the guy said well i had a heart attack and my doctor said if i don't lose you know uh several hundred pounds or over 100 pounds i'm gonna die and he said the best way to get rid of weight is to run and so i'm

running to so i can stay alive and sure enough over the months to come, this guy, the more he ran, the thinner he got, the better shape he got. And he lost his weight, and so he survived not only that heart attack but didn't have another one and lived because he did what it took to take care of him. You are successful at what you pay attention to. That was my point before the break. He successfully lost weight and lived as a result. You're successful at what you pay attention to. You're only shot at being successful at wealth, at being successful at your physique,

at your relationships, at your career, is to pay attention to it. It's your only shot. No one wins the Super Bowl and goes, how'd that happen? Whoa, look at that. Who knew? What am I doing here? What am I doing here?

It's not a random accidental occurrence to freaking win the Super Bowl. You practice, you work work you pay attention you concentrate on your craft for since you're a little kid to get to be in the super bowl when you're 26 well guess what talking to a guy you know in in just the last hour or so it's worth a couple million dollars you know you know he didn't accidentally go oh look at that where'd that money come from you know wow wow how'd that happen no it was an intentional act he knows exactly where it came from hard work living on less than he makes living on a budget investing and saving only intentional i'll tell you what else happens when you get to be intentional about something you want

to be successful at whether it's your kids your marriage your career your else happens when you get to be intentional about something you want to be successful at, whether it's your kids, your marriage, your career, your money. When you are intentional and you're focused on that, just like that guy running up the street, when you're focused on succeeding, you suddenly quit caring so much what other people think. You know, I don't got to run up the street in those sweatsuit in the 1960s when no one did that he didn't care that those kids thought he was a spectacle little redneck kids run along beside him he didn't care that the parents are gathering on the you know that everybody's you know that they got their afternoon coffee sitting out on the front porch just in time to see this guy run by he didn't care all he cared about is he wanted to live that's all he cared about and when you decide you're going to focus on something to that degree you are so focused on

the success of that area of your life that you suddenly lose what the Bible calls fear of man, where you're afraid of what someone thinks. Well, they'll think I'm weird. Well, so what? Have you ever been around enough people to know that almost all people are weird? Most people are weird. If you really get to know them, most people are just a little weird. So just, you know, go ahead and get used to the idea that you need to are weird. If you really get to know them, most people are just a little weird. So just, you know, go ahead and get used to the idea that you need to be weird because you probably already are.

And you ought to just be weird in a way that's successful. Weird because you're doing things that causes you to win. Weird because you think differently than broke people about money. Weird because you think differently than people who struggle in their marriage about marriage. Weird because your kids behave and theirs don't. It's weird. Success is weird, by the way. That's why we admire it.

It's not a normal occurrence. It's not a random occurrence. It's a price that has to be paid for you to be successful at something. And so we all stand back and go, wow, look at that. We admire it when someone wins in an area. So that focused intensity on a particular subject matter, a particular segment of your life will cause you to move ahead in that area and other areas. And it causes you to take your eyes off of the opinion of others.

You don't give a rip what they think. You just go get your business done. Danielle is with us in San Francisco. Hey, Danielle, how are you? Hey, Dave, thank you for taking my call. Sure, what's up in your world? Okay, so my grandmother passed away last year, and I will be inheriting $186,000. Oh, my goodness.

Yes. I'm sorry you lost her, but how wonderful. Thank you. Thank you, and I'm thankful. It was a blessing. Amen. So I have two children. I work.

I'm a full-time mom, but I'm single. Um, let me see. My thing is I've had, um, got myself into some bad habits. I just want to make sure that I'm using the money wisely. Um, I have some debt that I need to pay off. How much? Um, I ended up moving. Um, so.

How much debt? Okay. The total debt, uh, I i owe six thousand dollars on taxes i have six thousand dollars on a ticket that's going to keep my car from being registered i can sell it but uh and register another car but i'll still end up having that debt anyway you need to pay the debt all right so twelve thousand of6,000 goes to those two things. Any other debt? I owe $6,000 to student loans.

Okay. Clear that up. All right. What else? That's it. All right. Now, here's what you ask yourself. What have I got to do from this point forward so that I never have any of those kinds of

debt again? Well, if I'm going to go to school, I'm going to pay'm gonna pay for it no student loan debt we're gonna avoid whatever causes that ticket for six grand right and we're gonna avoid this and avoid that so that we don't have any more debt get the credit cards out and cut them up close the accounts live on a budget all right and uh do you have do you own a home well that's the thing i was going to use a portion of this money for a down payment. That's fine, as long as you don't take out a payment that's more than a fourth of your take-home pay on a 15-year fixed-rate mortgage. Okay. And you keep enough back for emergencies.

You need an emergency fund of three to six months of expenses. Okay. Okay, so $18,000 is gone for the debt. What do you make a year? I make $38,000. Okay. Okay, so $18,000 is gone for the debt. What do you make a year? I make $38,000. Okay, well set aside another $10,000 for an emergency fund, or let's call it $12,000 to make it round, so that's $30,000. So that leaves you $156,000 to do the other stuff with, and I'm going to put you through our nine-week class called Financial Peace University so you can learn how to handle money well. Because every time you do something with money, I want you to ask yourself, would this make your grandmother proud?

Because she was obviously good with money. And if you're doing things with money that are going to make her proud, that's probably called common sense. Hold on. This is the Dave Ramsey Show. Hey, guys. This is Blake Thompson, Chief Production Officer for the Dave Ramsey Show. Hey, guys. This is Blake Thompson, Chief Production Officer for the Dave Ramsey Show. This hour's up, but you'll find more on our YouTube channel, where we have over 6 million YouTube views each month. You can find debt-free screens, millionaire hour clips, Dave rants, and so much more.

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