The Ramsey Show - App - Quit Playing Footsie With the Brokerage Funds! (Hour 1)

Episode Date: May 25, 2023

Dave Ramsey & Dr. John Delony answer your questions and discuss:  "My fiancée's father unfairly put a lien on her car", Saving for retirement on an irregular income, Pulling money from stocks to pay off the house, from the blog: Should I Use My Investments to Pay Off Debt? "How do I avoid feeling embarrassed when people judge me for living below my means?" The best way to get out of debt, "Should I use my emergency fund to pay off my house?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the pods of Moving In Storage Studios, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Number one best-selling author and host of The Dr. John Deloney Show, Dr. John Deloney, Ramsey Personality, is my co-host today as we answer your questions about your life and your money. Thank you for joining us, America.

We appreciate you hanging out. The phone number is 888-825-5225. Thank you for jumping in. We appreciate you. I'm going to start off this hour with Michael. He is in Roanoke, Virginia. Hi, Michael. Welcome to the Ramsey Show.

Hey, Dave. How are you guys? Great, man. What's up? Hey, so I'll kind of get straight to it. So me and my fiance have been having some discussions about a car she was gifted when she graduated. Her stepmother had talked her dad into putting a lien on the car for about $10,000. And it's been about five years now, and we're starting to run into some problems with the car. And since those, in the last two years,

her dad and stepmom have moved and have not given any addresses, haven't been in any contact, haven't got any responses to texts or calls. So don't really know what to do as far as with the car. I would say it's probably getting into the point if it's worth just running it till the wheels fall off and dropping off in their driveway if we can find it or really what to do so why the disconnect why these people took off and nobody knows where they are um honestly i think it's you know she had a really good relationship with her dad, and she's got two or three other brothers and sisters that also did. And then when this new lady came in about, say, four years ago, five years ago, she's kind of been more controlling. His, uh, he works with her now, um, after he was retired.

Um, it's kind of like if, if when she was on the phone with him before, it had to be on speakerphone. She was in the background always talking. He could never have one-on-one time with his kids, practically. So it's been kind of a mess. It's hurt her a lot because they were very close when she was living with them and then after college and things, but it's kind of just disappeared off the face of the earth. Just as a point of clarification, he could have talked to his kids, but he chose not to.

Yeah. And that is focusing all this energy on we hate her, hate stepmom, she's the worst, this lady, this lady, this lady. That's misdirected grief. The grief is dad has chosen a different life that doesn't include us, and that hurts like the pit of hell. We've got to deal with that, right? That doesn't help your car situation, but that's where the grief has to start.

And when dad moves away and doesn't even tell you where he is um that's a very clear behaviors of language that's a very clear statement i don't want you in my life and that hurts man yeah absolutely she's been very hurt by it and it's kind of caught her off guard i think i believe too sure i'm kind of any dad that leaves his daughter you know that's that should catch that should catch everybody off guard. It's not how it should be. Yeah. That's kind of what I've told her.

I've told her, you can only control what, you know, where you can control. You can't control what he does. Okay, let me give you some husband advice. I'll turn it over to Dave. Don't ever say that to her. Okay. Just hold her hand and say, this hurts and I'm sorry. All right.

Okay. There you go. And it's her dad's fault, not her stepmother's fault. Yeah. He chose. He chose. He chose. You can't blame the other person. Talked him into it.

He got talked into it. He chose. He made a conscious choice. Now, I assume this is in the state of Virginia. Yes. Okay. Different states handle car liens different ways. In our state, the lien has to be actually written on

the car title do you guys hold a physical title that has a lien written on it yes sir okay all right um well what i would do is contact an attorney and see it's probably i'll give you a guess this is going to cost you a thousand bucks but it's less than ten thousand bucks um and i would uh see if there's not some sort of motion to be filed before the court that uh removes this lien that just says uh this lien was placed by a father just to control the car after he gave it as a gift he's disappeared we can't find him to get the lien released there was never any financial transfer it was a control mechanism and we're asking for the judge to remove the lien clean clean the title okay and i think i'm almost positive there'll be some sort of legal motion

that can be done and hopefully it's a a small claims court thing since it's ten thousand dollars okay and it's not it's not a super expensive thing but you know i i would think you're going to spend a thousand dollars to do that uh your only other option is um if you want to save the $1,000, is go find this guy and show up. Okay. And show up. Because y'all kind of know where he is. She's just hurt, but he works for her. She has a business.

You know what that is. You can find that business. You can find this duper and just show up and go, hey, duper, you need to release this. You already hurt your daughter. You've crushed her with your abandon Duber, you need to release this. You already hurt your daughter. You've crushed her with your abandonment. And you need to sign this. And I'm her husband here telling you, you need to sign this now. And if you don't, I'm going to drag your horrible butt into court and embarrass you.

So I'm going to act as the angry husband if I'm you. Okay. Don't shoot anybody. that's not what i said okay dave did you hear this guy he was like all right i can do this but you don't you don't need to involve her and this is not about trying to repair their relationship and this is not you don't need to take her this is business now and this has not got nothing to do with the uh step mother you need a signature from a doofus that should have been a better dad that's all you need and i'm gonna go save a thousand bucks i'm gonna go drive over

there because dude you can find him i'm promising i can i can tell by the way the story went down y'all actually know you just haven't chased them i uh often tell because you didn't want to find them there's a moment when you stop being my father-in-law and you start being the man who keeps making my wife cry. Yeah. And when that switch flips, now we're having a different conversation. Dave, help me here. I'm ignorant. What does that mean that you can just put a lien on something like that?

Well, I mean, if you have a car title, you can write on there a lien. Just take your car title, flip it over on the back. In most states, there's a place for the lien holder. And that's where the bank writes a write on there a lien just take your car title flip it over on the back in most states there's a place for the lien holder and that's where the bank writes a lien on there and then the bank typically if you do it with a bank right or a car company that has a car payments they'll hold the title they keep the title physically but in this case michael has the physical title it just has written on it and you can't take it down and transfer it because it has written on it a lien and that lien has to be released until ten thousand dollars what does that mean well no

i mean it's just he just made up a number and put it on there the dad did to control the car he wanted to make sure the car didn't get sold without his permission that's what he was doing okay there was no actual transfer of cash here he didn didn't loan them $10,000. He gave her a car, and then the stepmother goes, ah, she's just going to go sell it and run off with some boy. And he goes, okay, I'll just put a lien on it. He put a leash and a dog collar on his daughter. Exactly.

And said, you tell me thank you for that. Exactly. Wow, what a jerk. And then took off to the mountains. And we're going to go find a boy child. This is The Ramsey Show. Thanks for joining us, America. Dr. John Deloney, Ramsey personality, is my co-host.

John, it's been about a year since Own Your Past, Change Your Future hit the shelves. That's right. Since it was published, I got tons of calls from people asking me for private sessions and could we just talk for an hour or two? And obviously I can't meet one-on-one with every single person. It's not possible, but that's why I wrote Own Your Past, Change Your Future. Think of us sitting across from one another having a conversation. The book offers practical advice and encouragement on topics like relationship, overcoming past hurts and healing from traumas. And as you read through each section, I'll show you how to learn from what happened in your past so you can go create this new life.

And listen, for the first time ever, we're including it in the $10 sale. But you got to hurry. The sale ends in one week. Get Own Your Past, Change Your Future today or any of the Questions for Humans conversation cards. Dave, I just got a note from the guys over in the store. Good grief.

Those Questions for Humans cards sell like crazy. RamseySolutions.com. Everything's $10, so go for it. Love it. Check it all out. Melanie is in Los Angeles. Hi, Melanie. Welcome to the Ramsey Show.

Hi. Thank you so much for taking my call. Sure. What's up? I've recently entered Baby Step 4 and I was curious what the most effective way to save the 15% for retirement is when you have irregular independent contractor income. I imagine the simplest way is 15% divided by the 12 months, but some months I make $3,000, some months I make three thousand dollars some months i make eight thousand dollars and after my four walls and saving for taxes i don't always have that left

um and how are you you're independent contractor so you're funding this as uh just roth iras right correct yes okay you know you could just set the money aside each month and then do it once a year Just Roth IRAs, right? Correct, yes. Okay. You know, you could just set the money aside each month and then do it once a year into the investment. Okay, and just make sure that my... And then if you're short one month, you make it up another month, right? Okay, yeah. I figured that might be the case. I was curious if there was like a secret way to make it more consistent.

No, there's no secret. It's just, you know, if you have to drop into your food budget because you had an automatic draft at 15% of your income, then that's not cool. Yeah, that's not helpful. Yeah, and your income is volatile enough that you could have that. So, yeah, you run it on the average and then just say, on average, each month I need to do this. If I have a $3,000 a month, I can't do it, so I got to make it up the other month when I have an $8,000 a month. Okay, and then by the end of the year, it's just about making sure that there's 15% of whatever that ends up being. Yeah, yeah.

The problem with that is just the discipline that it requires, the attention to detail that it requires. Yeah. And so that you just got to guard against getting sloppy. Mm-hmm. Because I can do details, but I don't try to set up systems that require me to do details. I set up systems that are auto to do details i set up systems that are auto

and this is not auto so uh the only way i know how to do this is manually and what you're talking about but if you just you know but make sure that you set yourself up on a plan that that if you're not a detailed person that you got something that's driving you to keep the system in place. I have to wonder if some of the challenges with the irregular income aren't the same challenges that would make this hard, right? If you have strong attention to detail when you're getting started and you are strong focused on your marketing, on your business, the irregularity might not be there might not be there that's a possibility yeah possibility so you know if you're doing um let's say you're an industry that is not known for detail like if you're an accountant or an engineer you'd be known for detail if you were a graphic artist you might not be known for detail right

and so if that's what's going on because my wife would be much better at putting money aside in the designated account and writing a check December 15th for a year's worth. Yeah, she'd definitely be better. I'm going to mail in some Skittles wrappers and hope that they deposit. Keep your attention span off of the gummy bears. Yeah, that would be true. All right. Nick is in Grand Rapids, Michigan. Hi, Nick. Welcome to the Ramsey Show. Hi, thank you for taking my call. Sure. My question is what to do with unexpected income, whether to put it on our mortgage or use it to start a bathroom remodel? Is that the baby step you're in? Yeah. We are out of debt. I have a fully funded emergency fund, and we have a mortgage on our house right now. Okay.

So you're putting 15% of your income away for retirement. Yes, sir. Have you got children? One baby, yep. Okay. And are you addressing their college in Baby Step 5? Yep. Okay.

So you don't need it for either one of four or five. You're down to six or a bathroom. Either one is fine. How much money are we talking about talking about i mean not a ton my wife uh is currently not working because she stayed at home for the first six months of our son's life and um it's just seven hundred dollars a month for babysitting okay so uh i would just put that in your budget and then decide what you want to do with it and but then it takes you back to because baby steps four five and six is when you can do some things like upgrade a bathroom or put it on the mortgage and either one is fine you guys just need to be

in agreement about what the budget looks like because if a hundred percent of the time you get extra money you never throw it at the mortgage, you always upgrade something, you're never going to pay off the mortgage early. If 100% of the time you throw it at the mortgage early and you don't do any upgrades or any increases of quality of life and lifestyle, that's not sustainable emotionally, you're going to burn up. So, you know, you've got to just find that balance, that ebb and flow in that the tide goes in, the tide goes out thing to where you get some of each going on. But 700 bucks is not building a bathroom.

So, you know, 10 months from now, you'd have $7,000 and you might talk about doing some kind of bathroom. I think I saw a stat the other day that the average bathroom remodel is $8 million. Good gosh. Told you at least a thousand times not to exaggerate. Good grief. I had someone come look at000 times not to exaggerate. Good grief. I had someone come look at our house, and they were like, yeah, we can knock this out. Here's kind of the, this, it's going to be $14 million. Yeah, they charged you a million just to come do that, just to give you the estimate.

I don't know what they put under the subfloors and bathrooms, but good. Gold. That's where you store your gold. Open phones at 888-825-5225 thank you for joining us johnny is in connecticut hi johnny welcome to the ramsey show hi thanks for having me sure what's up uh so i just bought a house a year ago and i currently have about like $45,000 sitting in an account with a money manager and I've had my money with him for about three years now and I'm still sitting at my original investment. So I'm wondering how great it's doing in there and if it'd be better to just

put that towards my mortgage. I always put 100% of non-retirement savings above the emergency fund towards the mortgage right so you think that it would be better i always put a mortgage i always put 100 of non-retirement savings above the emergency fund toward the mortgage until the mortgage is paid off because otherwise let's say you had that invested in mutual funds as an example, okay? Right. And you didn't reduce your mortgage. Balance sheet-wise, it's as if you borrowed on your house to invest in mutual funds. And you wouldn't do that.

So pay down the mortgage. Okay. Yeah, because I do plan on selling the house in about a year and a half. So I figured it would be better off doing that, and then I'm actually putting more principal down on my house every month. Let's get your house paid off, whether it's this one or the next one. When you sell your house, if you pay down the mortgage, they give you a check. It's called equity.

Paying down the mortgage is not an expenditure that is lost money. It's laying there. You're banking it in dirt and bricks and mortar. And also, Dave, isn't there a chance that over the last three years with the up and down and the volatility that you could look up and being even would be a pretty good place to be? Yeah, I don't think your guy's doing a bad job. If he was doing a great job, if he made 20% on your money, I would still tell you, pay down your house. Because all the data points we have that says the shortest distance between where you are and your first $1 to $5 million of net worth is getting your stinking house paid off and loading 15 to 20% of your income into your retirement.

Not playing footsie with some brokerage account. It's just not there. I mean, it's not there. There's no data that says that. Financial footsie. That's it. I mean, you can find that on T's no data that says that. Financial footsie. That's it. I mean, you can find that on Tic Tac, but you can't find that with real millionaires. This is The Ramsey Show.

Dr. John Deloney, Ramsey Personality, is my co-host today. Thanks for joining us. Today's question is sponsored by Neighborly, your hub for home services. Spring is here, and it's time to handle those projects that have been on pause. Neighborly's got top-quality home service providers like Mr. Handyman, Glass Doctor, Precision Garage Door Service, and Shelf Genie. So find the local help you need at Neighborly.com today. Today's question comes from Catherine in Florida.

She writes, I'm a longtime follower of your Baby Step program, and I enjoy catching up on your radio show on YouTube. That sentence did not exist a few years ago. My question is about how to deal with family members' opinions on living below your means, driving an older car, having older electronics, a small apartment, etc. I lived in a studio apartment while I was in college. After graduation, I landed a great job working at an investment advisory firm and moved into a two-bedroom apartment with a roommate. We both work remotely and use the second bedroom as an office. Recently, my roommate's aunt stopped by to see the new apartment and commented that it was small.

I didn't say anything to her, but inside I felt terrible. A two-bedroom apartment was an upgrade for me in terms of space, and with the increase in my income and shared expenses, I was spending less money than I was when I was a student. I know we can't control what others say, and they are definitely entitled to their opinions. I also don't want to imply that their aunt is judgmental. Well, she is. I just want to know how I can control that inner voice that felt embarrassed when someone didn't understand why I live the way that I do. Ooh, that's a great question. I find, Dave, when I

have not spent some time making sure my values are anchored into an identity. Other people can throw, I can try things like a new workout, like a new diet plan or something, and somebody will just casually dismiss it and it will affect me. But when I have made a choice, I'm a guy who, fill in the blank, takes my kid to Waffle House. Waffle House is probably not the healthiest choice for us, but that's where we go. And I love it and I won't miss it. And so I don't, it doesn't even, doesn't even enter my mind when somebody makes a comment about, oh, that's not healthy. Like, because I'm so anchored into that as a thing, or someone

dismisses my faith out of hand. Like I didn't, I don't lose a second of sleep over that because it's, it's an anchor point to me. I've connected my values with my identity it it feels like if you're trying something on it's a recipe for somebody can speak into it yeah um but i'm just i'm kind of i'm kind of thinking off the top of my head here so push back if that doesn't sound right. Godliness with contentment is great gain. And so if you are content and this is your decision, you have peace sitting in the decision, and that's an identity. That's a much less nerdy way to say that than I just said. You're sitting in your identity, and then you're you know the aunt wants to get her bigger apartment

it's that's her choice but this is what i wanted and it's me i'll you know you think um you know i have a black pickup truck you think black pickup trucks are ugly well that's okay i'm really comfortable i picked that truck i like it and so you know i don't really give a rip what the verbiage for me changed back when and you know i've talked about this quite a bit when i with the phrase you don't get a vote yeah and so really sitting down and deciding being intentional in my life who are the people who do get a vote yeah my wife a couple of clothes it's a very very small list when it comes to you know i want to challenge your value yeah i think it comes down to like you said how anchored are you in this because it's a great

discussion that's why we're having it but the uh uh if you're anchored in it and you really believe it then you wouldn't be embarrassed yeah somebody came by and goes uh you know this guy is green right they're actually right when they bring something up and you're not that anchored in it then it would throw you off absolutely like i mean do you live in a dump you know i mean if you do maybe she's telling you you need to upgrade you know i mean that that's a that may be what's going on but if you just are completely comfortable with that um and uh yeah i think that i think you're exactly right it's how far you're anchored into it i mean i got into this thing this morning i was at a uh another event and i was one of the speakers and i ended up back in the green room with a bunch of these guys that were intellectuals which is

always fun for me because i'm a wiener in a steakhouse. And so this guy is throwing out, you know, this verbiage, and he's like, yes, but what about arbitraging? And if you pay off your 2.5% mortgage and all this, and I finally looked at him, I said, dude, I think you need to keep your mortgage. But you asked me what I thought, and I own several hundred million dollars worth of real estate debt free and when COVID hit I wasn't worried about payments so that's how I live if you don't

want to do it it's okay but you know even though you're a bazillion times smarter than me I got more real estate than you do I mean it's! I mean, it's, you know, and it's all paid for. The real question is, can you kick my... You know, it's just, you know, I mean, it's kind of that, you know, why we are, you know, okay, I get it. But did you really think you were going to have a discussion with Dave Ramsey in the green room and talk him into going into debt? And you were going to sit back and go, I never thought of it. No way. I mean, intellectually, you finally, I found someone who was smart enough that got me on this no way

after 30 years no you're kidding you know and i'm just like oh i mean whatever you want to do dude it's okay i'm not mad at you i love you you can go you can go get in debt if you want but as for me in my house we're pretty anchored in this one pretty much an identity thing yes i would go back to katherine and say why are you why choosing this life yeah i want to live below my means and okay great then other people don't get a vote everything that she said was joyful absolutely until the ant showed up that ant didn't get a vote yeah and so she doesn't get a vote that's all it is it's um and that's something you practice. That's easier said than done. It is. And the other thing is this.

It's a perspective thing. It goes with contentment. So the thing I always remember is this. I have the inordinate benefit of having gone completely broke. And once you've gone completely broke, you really don't care what other people think. Because you figure out most of them aren't going to be around anyway. It's like watching a fighter that's been knocked out. They're a little wilder the next time because they oh that's what happens oh that's how it works i didn't i didn't die from it now i can be a little bit more i'm gonna i'm

gonna lean in here and you know i i love folk and i i want you to win and i want to help you but um i'm not really taking a poll you know before i make a decision on stuff i'm not i'm just i lost what the bible calls fear of man i just don't i don't need affirmation to make good quality value-based decisions i make those decisions regardless and if i get some affirmation that's wonderful i'm like anybody else i like it but i don't have to have that to do anything and and honestly when some of you get pissed off it kind of inspires me so um you know I causes me to go up good to double down you know so um and because I found that most of you are that wrong and so that's why we do this show for 30 years is to help you you know and so yeah i think there's a lot of

that going on in the contentment thing is a contentment is do i have peace am i anchored in this with a deep part of my identity um and how much affirmation do i need to support my values based decisions and uh the less of that you need the better financial decisions you're going to make all day every day. Because most people are broke. And if your broke friends are making fun of your financial plan, you are right on track. Well, and the better parenting decisions you'll make. I don't want my kid to be the only kid with three-year-old without their own iPad. Be the only one. I don't want my kid to be the only.

You're going to make better parenting, better marriage decisions. You make every decision will be better when you identify who gets a vote and who doesn't and when you identify that identity and what it's anchored into man yeah my kids weren't homeschooled but i saw this thing the other day that i thought was in the current world we live in it was pretty funny the guys like god get the dump button yeah really you ready one guy's saying to the other he goes you know your children are not going to be socialized and not going to be like all the other children if you homeschool them. And the guy goes, yep. You are correct, sir.

Kind of the point. You are correct, sir. You are correct, sir. You are correct, sir. Yeah. Yeah. I mean, you know. Yeah.

I don't want to be cray-cray. It's a good thing. Yeah's a it's tough out there man man yeah some of y'all people have lost it i'm just saying this is the ramsey show dr john deloney ramsey personality is my co-host today Travis is with us in Grand Rapids Michigan hi Travis welcome to the Ramsey show hi Mr. Ramsey Dr. John Deloney it's a pleasure to speak to you both today you too what's up um so I am my question is how to get out of debt with my current salary as a truck driver projected to make $80,000 this year. Okay. How much is your debt? Total debt is $67,000. $40,000 is student loan debt. And then I have

$11,000 balance on a car and the rest is credit cards. Okay. You're single? I've been trying to make a – I'm dating, currently living with my partner, and so that's kind of tricky because when I moved in with her, I was over the road, and now I'm a local driver, so I pay her to help her with the mortgage, but we're not married yet. Planned an engagement soon so okay so you are paying part of your roommate's payment as rent essentially yes yeah and your rent is how much uh 500 a month okay all right so you make 80 000 a year and you have a 500 a month rental okay yep so what's wrong with getting on a tight tight tight tight tight tight tight tight budget and beginning to pay these debts down you got you should have all kinds of margin in this budget. Yeah, and I've been trying to see that for myself.

Like I have in my notes all my bills and credit cards, how much each monthly payment, the sum of them is for the minimum balance. I've been following, listening to you guys over the last couple months for the baby steps, but I just can't seem to get ahead of what I'm doing. You haven't done a budget yet. So what is your take-home pay? About $1,200 a week. Okay, you get paid once a week?

Correct. Okay, you sit down and you look at June. How many times are you going to get a paycheck? Let's pretend it's four, okay? That would give you $4,800 to work with, minus $ 500 for rent minus food correct minus some car gas minus the minimum payments on all of these bills and everything else goes towards the stupid credit card until it's gone and you cut up the credit

card i've cut two of them up since I've started listening to you. I feel like you drove right past all the room that should be in this budget. $4,800 minus $500 minus food. That's a buttload of money left over. Yeah. It's about $3,600 or $3,700. Yeah. How much is the balance on the credit card?

I have three of them left. One's $2,150, $600, and $700. Okay. You should pay the $600 and $700 off this month and probably the $2,150. Yep. So you're done with credit cards in two months. One month.

Oh, one month. Let's do it. Okay. But you're not going out to eat and you're not going on vacation and you're not going drinking with your buddies you got no life you're getting ready to clean up your dadgum mess because you want to get married yes and it's time to clean up your mess so what i'm teaching you is what's called a zero-based budget your income each month unique to that month minus every dollar gets an assignment every dollar has a mission every dollar has a name beside it before the month begins before june gets here next week you need to have figured out what your income for

june is and assign every one of those dollars first to necessities food shelter clothing transportation and utilities so rent car payment car gas food okay that's it and then everything else dude we're going at this at these credit cards like they're the freaking enemy because they are yeah if you had 4,800 minus 500 and you had 2,600 makes you debt-free or I'm sorry 20 uh 3,200 makes you debt-free you're debt-free of your credit cards in one month you really should be right that's how you do it absolutely that's how you do it right there and jump online and pick up there or hang on we'll give you uh the every dollar app and uh we'll get you tied into the uh advanced version of the every dollar app which connects to your bank and helps

you run your budget it's the world's best budgeting app and it'll help you but it's giving every dollar a name that's the point when you get very detailed very nuanced and very careful with your planning each and every single month and you squeeze every one of these dollars until benjamin franklin is squealing then you are ready to go and that's what we're doing we're not we're not spending money on anything because we're trying to clean this mess up so realistically you've got 50 uh two fifty fifty five thousand dollars in debt you make 80 000 but you got almost no expenses you probably could be 100 dead free in a year pretty close a year and for everybody listening i want don't don't blow by this because it's easy to look at him and be like man that guy you can't out earn your your unintentionality your lack of intentionality he's making eighty something thousand dollars a year and he can't figure out where it's going how to pay off a two thousand dollar credit card can't figure it out and and i don't it's not

because he's dumb it's because it's just chaos there's too many spinning place everywhere yep and that's what a budget does it's all it's all spun up in your brain and in the ether and everything else. And so giving every dollar an assignment. Every time you do this, people, those of you that haven't done it, you need to sit down and do it tonight. June's coming next week. You need to sit down and do your dadgum budget, maybe for the first time in your life.

Put your income for the month at the top of the page and then give every dollar an assignment. I will promise you two things will happen number one thing will happen is that you will feel like you got a raise because you will go where is all this freaking money going it's going to blow your mind how much you waste and the second thing that's going to happen is you're going to get a sense of peace instead of a sense of anxiety. Even though you've actually done nothing with money yet, now you've actually executed a plan that says, if I take these 17 steps, I'm going to be free. And as soon as you see the steps in front of you and you realize they're doable, your anxiety goes down, your stress level goes down, your peace level goes up, and you kind of just slick

your hair back and go, okay, let's get about the business of doing this. Let's go. Game on. And people lean into it, and it changes everything. Timothy is in Chicago. Hi, Timothy. Welcome to the Ramsey Show. Thank you, sir.

It's a pleasure to be on your show today. Honored to have you. What's up? My wife and I are wondering if we should use a portion of our emergency fund to pay our mortgage off how much is in your emergency fund currently we are at 46.5 okay and we owe 30 all intents and purposes 34 okay and you don't have any other money you have to put into this equation, so you would drain your $46,500 by $34,000? Yes, sir. What's your household income?

Base salaries, we're looking at $136,000. No, no, I didn't ask. Ask what your household income is. Oh, oh, my goodness. Between mine and my wife's, we're looking at, like I said, $136,000. Okay. Okay. That's what I was asking.

That's that. Good. Good. Yeah. All right. And so here's the thing. Paying off a house is a really good thing, and we really tell everybody to do it. It's not an emergency.

So if you go below three to six months, if you go below three months of expenses in order to do this, you cut too too deep and it kind of feels like you are okay what do you think what's what's three what's three months of expenses three months of expenses we're believe we're looking at 18 19 000 all right let's call it 20 which means you have 26 5 to throw at your $34,000. Okay. Did I get that right? Yes, sir. Okay.

And then by Christmas, you just cash flow the rest of it and knock it out. Okay. Now, my wife will be getting bonuses throughout the next several months, which will be paying down the mortgage further. Yeah. Given that happening, we're looking at August. Okay. Done. Now, the question – go ahead. I'm sorry. Then do it. Done. Yeah. Given that happening, we're looking at August. Okay. Done.

Now, the question... Go ahead. I'm sorry. Then do it. Done. Absolutely. Go that route. That's what I would do.

Yeah, that's the whole idea. So, by Christmas, we're rebuilding the emergency fund maybe from three months up to six months, which you don't need more than 40. Well, that's by August. I mean, if he pays his thing off in August with some bonuses... Well, then they got to rebuild it. Right. Up from 20 up to 40.

Oh, by Christmas. But no more than 40 in your emergency fund. You don't need 46 in your emergency fund. If 20 represents three months, 40 represents six months, six months is enough. Then move on to your other steps. This is The Ramsey Show. Hey, it's Dr. John Deloney. If you love the show and want a deeper dive on your money journey,

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