The Ramsey Show - App - Rock Bottom: Paying Off Debt with the Kids' Savings (Hour 1)

Episode Date: June 12, 2019

Get Started on Your Debt-Free Journey We’ve made it even easier to get started taking control of your money.  Learn How! How Fast Can You Be Debt-Free? You don’t have to be in debt for the rest of your life! Answer 5 simple questions and our Debt Calculator will show you how quickly you could be out debt!   Get the Complete Guide to Budgeting. Budgeting is often misunderstood and overcomplicated. It doesn't have to be! We made it simple. After 90 days of budgeting with EveryDollar, 9 out of 10 users feel more confident in their financial future. Get the Complete Guide to Budgeting.   Get the Coverage You Need. How does your coverage stack up? This Coverage Checkup will show you what you need (and don’t need), which questions to ask, and where to get the best coverage.   Find the Right Financial Advisor. Finding the right financial advisor doesn't have to be complicated. Our free guide makes it easy to know what questions to ask so you can make a confident choice. Get the guide!    Listen and Watch Anytime, Anywhere.   The Dave Ramsey Show app lets you download episodes for offline playback, customize your content, and see what’s coming up!

Music Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Realty 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. I am Dave Ramsey, your host. This is your show. It's all about you. The phone number is 888-825-5225. 888-825-5225. Coming up at the bottom of the hour for the second half of this hour, Ramsey Personality number one bestselling author Rachel Cruz will join us taking your questions. And so if you want to talk to Rach, you can jump in on the phones and be sure you're

in line when we get to the bottom of the hour again 888-825-5225 candace is with us in fort worth hey candace welcome to the dave ramsey show hi dave how are you better than i deserve what's up good well first of all i want to say thank you so much for your principles and my daughter was diagnosed with cancer last year and because of you we have not had to worry about money, and she's had a primary caregiver, so for that, I want to say thank you. Wow. But my question is, at this point, she's in maintenance therapy, so we're kind of on the calm end of things, but just trying to get our finances reorganized.

We've got a little over $200,000 saved in the bank. It's not really making any money. I feel like we should be investing a little bit more. And then also, we've got a bunch of things coming out, like money. We've got a bunch of projects going on and a bunch of money that we're going to owe the hospital. So I'm just trying to figure out where to go from here. Okay. Well, the good news is that you're winning the battle that matters.

Yes, sir, absolutely. Beating Mr. Cancer off with a stick, which is a good thing. And so then the rest of this is just a Monopoly game, right? Right. Okay. And what it sounds like, if I were in your shoes and had been doing what you're doing, what would have happened to me was I would have kind of been emotionally tired from fighting all of this stuff and going from sheer terror to sheer exhilaration

and back every 24 hours, which is what happens when you're fighting cancer. You go from good news to tragic news to good news to tragic news, and your stomach's in your throat half the time. Absolutely. And so you run out of gas a little bit, and the least little molehill, the least little bump in the road looks like an overwhelming mountain because you're just out of gas a little bit, which makes you like human, okay? You know?

So what I would do if I were in your shoes, I always do, when I get overwhelmed, I stop and make lists because usually if I'm overwhelmed, I just need a place to start that's logical and so let's make a list we've got a hospital bill or two coming or 73 right right more than that yeah and so we make a list we say okay what's that gonna look like we got 200 000 on one side of the equation laying there doing nothing but do that, and we've got some projects you said you were working on. You didn't give them names, but give them names and dollar amounts. So the hospital bills, we're looking at $28,000 total with the max out-of-pocket over the next three years.

So you already made your list. All right. That's good. So that's that. We've got about $10,000 left on a home addition that we're almost done with. And then my husband's going to be building a shop, which will be about $10,000 to $15,000. And then perhaps on

the horizon, we're looking at possibly trying for another child, and that will require some IVF. So I'm guessing somewhere between $15,000 and $20,000 for that. And I think you need a vacation. Yeah, at some point. No, I do. I think you need one. And you at some point no i do i think you need one um and you've got the money and you've done a good job with your money so um you know so you still

got a hundred grand left over if i did my math right yes absolutely and we don't really have any investing going we are completely debt free including our home okay let's just get back on the baby steps and start putting 15 of your income away like you're supposed to at baby step four into retirement let's start saving for the kids college and let's start chunking everything else i'm paying off the home is your home paid off it is oh okay well you're already on baby step seven we you know we included that in our that snowball we only owe 25 000 at that time so are you putting 15 of your income away like we teach um right now i'm putting five percent of my income away like we teach? Right now, I'm putting 5% of my income away. My husband is self-employed.

He does not have any retirement at all. So the answer is no. Correct. Okay, correct that. Let's crank the investing back up. Let's put $100,000 in some mutual funds and let's set $100,000 aside with labels on it for hospital bills and shops and

projects and a vacation. Okay. And I think it's gone. I think we've used the money up, right? Right. That's how you do it. You just make a list, and then you kind of prioritize and go, what's most important?

Well, hospital bills are going to be most important. The shop could wait if it had to, but you've got the money to do everything we're talking about here. Right. My husband, he's dead set on hoarding every penny he can possibly hoard, which is fine, but that's not making any money. Well, it's just fear-based. That's his way of dealing with what you guys have been dealing with. Right. The bigger pile of money he has made him have some peace through this hell you've been through.

Exactly. And I feel like our emergency fund is way overfunded. Yeah, I know. But that's his way of dealing with this. And the good news is we're the other side of it, so it's time to get back to living again. Yes, sir. Okay. Let's implement a plan again. Oh, by the way, when you put $100,000 in mutual funds, it's not gone. I know.

It's still over there. If you wanted it, you could go get it. And so you could say you're still hoarding it. It's just in a better place. Okay, so that would be what you advise is just a mutual fund, not in a retirement account, but separate from that. Okay, so it's making some money. Get with a good smart investor pro and sit down and lay out some investment objectives. But I think you just need to make some lists.

How do you eat an elephant? A bite at a time. You just need a plan. How do you climb a mountain? A bite at a time. You just need a plan. How do you climb a mountain? You have to have a strategy, and it starts at the bottom. It doesn't start midway up. And you work your way through it. You develop a clear plan.

That's all the baby steps are, just a clear plan. That's how you eat an elephant, a bite at a time. And that's why we call them baby steps. They're not huge strides. They're not leaps. They're not leaps of faith they're simple steps and it's how you eat an elephant a bite at a time you just do you can do anything if you do it a step at a time and so anytime you're getting overwhelmed with any kind of a

project or any kind of a situation break it down into parts prioritize the parts and start at the beginning and it always gives you a sense of power over the problem, where the problem has power over you when you're overwhelmed. And, you know, that's where the stress and the anxiety comes from. Not knowing drives people more crazy than knowing bad news. Ambiguity is more dangerous and anxiety-causing than bad news is. You got no bad news in the story we were just in. So you're doing great.

Very well done. Good stuff. Thanks for calling in. Open phones at 888-825-5225. You jump in. We'll talk about your life, your money. It is a free call. This is common sense.

If you're looking for $20 words and gobbledygook and all this other garbage about something about your money, well, wealthy people don't do that stuff. They live on less than they make. A concept Congress can't grasp. They stay out of debt. Because if you don't have any payments, you've got money. They save and invest.

This is what wealthy people do. I know thousands of deca-millionaires. And almost none of them are financial sophisticates. It's just a load of horse crap, y'all. Just to the basics. It's blocking and tackling. It's how you win football. This is the news, guys.

You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right now and see if they can save you money before rates rise again. A mortgage through Churchill could save you thousands or better yet reduce

the time until you're debt free. Can you imagine how it would feel to no longer have that payment looming over your head every month? Just go to churchillmortgage.com or call 888-LOAN-200. Their team of experts will give you more clarity about your options and more peace knowing you're saving significant money in the long run. Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. In the lobby of Ramsey Solutions, Danny and Mandy are with us. Hey, guys, how are you? How are you doing, Dave? Hi, Dave.

Welcome. Where do you all live? Irvine, California. Oh, cool. Welcome. And all the way over here to do a debt-free scream. Yes. How much have you paid off? $75,000. Cool. How all the way over here to do a debt-free scream. Yes. How much have you paid off?

$75,000. Cool. How long did this take? 15 months. All right. And your range of income during that time? We went from $120,000 before taxes to $177,000 by working a lot of extra shifts. A lot of extra shifts.

A lot of extra shifts. Very cool. So what do you guys do for a living? We're both respiratory therapists at a children's hospital. Oh, okay. Yeah. So you got overtime available then. Very cool. So what do you guys do for a living? We're both respiratory therapists at a children's hospital. Oh, okay. Yeah, so you got overtime available then. A lot. A lot of overtime, 16-hour shifts, yes.

Wow. What kind of debt was the $75,000? It was a mix. We had standard. We had two iPhones, two credit cards. Student loans. Car loans. We even took out a loan to pay for car loans.

So just a bunch of... Wow, so you were like normal. Yes. Just regular old people. And then 15 months ago, something happened. How did you get introduced to us? Well, as what happened, we were going along. We were using credit cards, but I thought I was being good, but we always paying off

the full balance every month to get our, you know, to get our points that we're being smart. And then one month, it was just more of a balance than we could pay off. So we borrowed or we took money from our kids savings to pay it off. And that was a real low for us. We felt terrible. And I'd heard about you through my sister. So I was like, well, something has to change because, you know, what we were doing was clearly not working. Right.

Time to change the program. Okay, cool. So what happened then? Well, since I heard about you, I looked you up and we just decided we had to change. We couldn't live like that anymore. We were, you know, we did our own way in the past of sitting down, writing a budget. It wasn't working. No, it was not so

clearly we got ourselves in just in trouble and we didn't want to be back there again and we wanted to change cool good for you so what do you tell people the key to getting out of debt is i would say um just giving up keeping up with the joneses is the biggest thing yeah you have to learn to say no out of debt is not worrying about impressing people that don't really matter to you and just worrying about your family's future. Yeah. Yeah, I'd say the key, I mean, there's really no secret. I mean, you give the information, and if you just follow the program

and you give it 100%, not just a little bit. You've got to give it your all. You've got to work together and just. You've got to work together. And just follow those steps. And they work. Don't doubt it. So we just followed it to a T. We were hardcore.

And we had a goal in mind. Yeah, we were gazelle intense. And we said no to a lot. We worked extra. Our kids didn't like that. But we did it. We finished. Well, you work like no one else. Now you can work like no one else.

Exactly. How does it feel? it feels actually surreal yeah yeah yeah it actually doesn't feel real until we we're here right now this kind of ties it all together yeah but i mean if we could do it anyone could we were living paycheck to paycheck we live in a very expensive area and even though our income seems high it doesn't go that far there unless you're smart with your money and you make intentional decisions. We use the EveryDollar app. Yes. Budget meetings every month.

Yeah. I check it every day. I track every spending that we do, and I just look back, and I don't know how we lived before, like not keeping up with anything, just buying what we want, not realizing the difference between want and need. We thought we needed everything. And we realized we have to learn the difference between those two. I understand. Wow.

Way to go, guys. Thank you. Who were your biggest cheerleaders? I'd say my cousin Ernie. He lives here in Tullahoma and he's followed your way for many years, and he's retiring early. Yes. He's always been our cheerleader. If ever we started to have, you know, got discouraged, I'd call or text him, and he just kept us on path there.

Wow. And so he's been great. Way to go, Ernie. Yes, thank you, Ernie. Good stuff. Very cool. Very good. Good for you guys.

Well, we're proud of you very very well done very well done do you think anybody can do this i think anyone can do it everybody can do this everyone should be able to do this yes because we i mean every month we'd be like where did our money go i don't understand we make good money where's our money going well now we look back and we know we were not um diligent with our spending and just careless. And we've changed that. Thanks to you. Well, you just got disgusted.

You got sick and tired of being sick and tired. Yeah, and I think that's the key is you have to be sick and tired of wondering where your money's going. You have to hit rock bottom. Yeah, essentially. You have to have that rock bottom moment. So you can be gazelle intense. Love it. Well, good for you guys.

Well done. We got a copy of Chris Hogan's book for you. Every Day Millionaires. That's the next chapter in your story for sure. You are on your way. You brought the kiddos with you to do a scream? We sure did. Yes, we do.

And what are their names and ages? Kingston is five and Scarlett just turned three. All right. Those are good ages for debt-free screaming. Have they been practicing? They have. They sure have. All right. Those are good ages for debt-free screaming. Have they been practicing? They have. They sure have. All right.

Let's see how it happens then. All right. Kingston and Scarlett, Danny and Mandy, $75,000 paid off in 15 months, making $120,000 to $177,000. Count it down. Let's hear a debt-free scream. Three, two, one. We a debt-free scream three two one very fun man that's beautifully done uh rachel cruz will be with us at the bottom of the hour

to answer your questions in the next half hour. Number one best-selling author, of course, and host of The Rachel Cruz Show on YouTube. One of our Ramsey personalities and my daughter. So lots of good things happening. The phone number, 888-825-5225. Shanique is with us in Memphis. Hi, Shanique. How are you?

Hi. I'm good. Good. How can I help? Thank you for taking my call. Okay. How can I help? Hi, yes. I'm 19 years old, and I'm currently in undergrad.

I'm debt-free because I have scholarships. And I want to start a 529 for my 2-year-old brother. But the issue is I'm also looking towards law school um i want to be able to help him um have better opportunities than i did um even though i did work hard but i didn't have as many options as i could have had but i also know i need to work towards getting ready for law school but i'm only only able to work summers because of the location of my school. You need to take care of you first. Yes, sir.

It is a great, noble thing that you have in your heart to take care of your little brother who's two. You'll have time to do that after law school, and you don't need to do that until law school's finished. Yes, sir. Listen, here's the thing. The best way to help people who don't have money is for you to have some money. The weak can't help the weak. Only the strong can. Yes, sir.

So get out of law school and be a big fancy lawyer and then you can write checks and send your brother to school yes sir do you have any idea how to because i'm saving the money now but i have about three thousand dollars in my bank account but i need to be able to boost or you know accelerate my savings because that would be all of the money unless I get scholarships that I have. I'm constantly saving. So I should be at $5,000 by the end of the school year. By the end of the year this year, December, I should be at $5,000. But I'm not sure how in the world I'm going to get it.

There's not a magic investment that's going to do this for you. It's you putting money in there that's going to cause money to be in there. Yes, sir. Because the number of years you have between now and law school, there's not enough time for this money to grow that much. If you had 40 years, we could invest it, and the investment would grow to do it. You've got four years or less before you're going to need the money. And so the magic of compound interest

does not work on short time periods it only works over long time periods and the only way you make big money in short term time periods is very very high risk which would be crazy for you to do yes i mean you can double your money at the roulette wheel in Vegas, but we're not going to do that. Yes, sir. Yeah, so just pile up money, pile up money, pile up money, work on scholarships, work on ways to go to law school at minimal expense and have the money to cover the minimal expense, graduate, pass your bar, and as a nice fancy-pantsy lawyer then, which I love that you're going to be, write some checks and send your little brother to school. You're awesome.

Thanks, Shanique. Good to talk to you. Up next, Rachel Cruz is going to be right back. joining me this half hour rachel cruz number one best-selling author ramsey personality my daughter and answering your questions welcome back to the microphone thank you thanks for having me back on and so you got a new podcast that hit this week every two weeks a new one hits right yes the new youtube show both and the podcast that's right that's right yes so this episode was all about how to get out of debt and what life looks like when you do so it was a great episode we had two great guests on we had lewis howells he was on and his story is just great right i mean he went from sleeping on his

sister's couch living with her because he had no money to kind of finding his passion and what he loves to do and succeeding and now he's like a a multimillionaire. I mean, so it's just really this true, you know, the story of someone who finds their passion, handles their money well, and truly wins on a really large scale, right, with him. And it was interesting because I was talking to him because he interviews all these, you know, people from Kobe Bryant to, you know, I mean, all these famous people in all different walks of life. And he talked about generosity being a thread through a lot of these people.

A lot of successful people are very generous people. But then he can tell the ones that are not generous. And you can almost just pick it up being around them. Their vibe. Yeah, yeah, which was fascinating. So we kind of talked about that some. Because generosity is not really an action. It's a character quality.

Yeah. That results in actions. Right, right. And so you do pick up on character qualities when you're around people. They're either selfish or selfless. That's right. And generosity comes out in that. And, I mean, you can even tell in conversation if it's all about them.

Oh, easily. Easily. And so hearing kind of his philosophy around all of that and because he has done well with money and, you know, out of debt and all of that, he's able to be generous. So we kind of talked about that, which was great. And then I had a lady on who was so great. She came from the Financial Peace University kind of department because we kind of asked for a great story. And her name is Judy. And she grew up on this family farm, and her dad had passed away. So the mom was left with this farm, and they found out it was $750,000 debt owed on the farm.

Wow. So it's kind of this whiplash to the family, and her and her husband had been doing these principles. They had been going through the baby steps themselves, and she took it and applied it with her mom. And so they're going to be here. They're going to come to the show. She told me she was like, our goal is to be on the Dave Ramsey show to do our debt-free scream next year

because they are almost completely out of debt with the family farm. But in the meantime, all that's going on in her personal life. She owns a company, and it's an interior design kind of firm. And all the people that work under her are really young. And so she took them all through Financial Peace University and so one of those girls katie who's like 24 paid off all

of her credit cards all of her student loans wow within months and this lady's on fire she's everywhere she goes yeah and it's just kind of was putting to the point that when you get out of debt it's not just for you it impacts everyone around you right your story impacts people whether it's not just for you. It impacts everyone around you, right? Your story impacts people, whether it's your kids, people you work with, to even your generosity and people that you can help. And so we talk a lot

about getting out of debt on my show, obviously on your show, and the wins and the amazing feeling, all of the pros to getting out of debt is huge for you.

But we don't always talk about the outskirts, right? I mean, we talk about... The result. Yeah, changing your family tree. It's a so that thing. You get out of debt so that. That's exactly right. Yep.

So we had some of the so that's on the show this week. And so it was great. It was a good show. Very cool. Good stuff. The Rachel Cruz Show, a very popular YouTube series. Be sure and subscribe to her YouTube channel. And, of course, you can get the show delivered to you automatically over two weeks.

And it's in podcast form as well, a modified version of it, in that Rachel adds extra commentary to it. So you get a cool podcast. The podcast is very popular as well. Of course, you can get that on Apple and Spotify and Google Podcasts and wherever, anywhere else anybody pushes out a podcast. We're everywhere. And Rachel is, too.

Amy is in Minneapolis. Amy, welcome to the Dave Ramsey Show. Your question for Rachel. Yes. We are in baby steps four, and six and um we about two years ago got really serious and just got the gazelle intensity went through it and with six children whom we homeschool and so we bought them all um the middle school curriculum and we're planning to do the high school curriculum as well wow but my son who's 12 uh he's our oldest asked he's opening a business this summer

and he is wondering when he can start um contributing to 401k so just in a quick google search i learned that it looks like at age 14 they can but um i don't know how to set that up if he's not working for somebody you know you can't do a 401k unless you're working for someone it's payroll deduct only he can do an ira at any age as long as he has an earned income you will need to file a tax return on his income in order to prove that he has an earned income i would be more concerned that he has money saved for college than for retirement at 12. Okay. And we are doing that? Do I want him to also do that?

I mean, it's okay depending on where you are. If you've got college covered, you think you've got it dialed in. We did for our kids that. And then, you know, in Rachel's case, Daniel's case, Denise's case also, they were doing work like your son is. I filed tax returns on them, and I opened Roth IRAs for the full amount that they earned, and I funded them every year because I had the extra money to do it, and it was a way to really cause some serious – I mean, you start doing that for a 12-year-old.

When they're 22, that's been 10 years that money's been growing. They look up at 30 years old. Their iras are very serious at that point but you they have to have an earned income you have to file a tax return and he can fund it or you can fund it i'd rather his money go to college and cars and if you want to do some other stuff that way but it's okay if he does it there's nothing wrong with it right i was saying well just like a small percentage could go in that so that he knows he's contributing there. But the car would be the biggest conversation. I mean, if you can get him to pay for half the car.

We already have a car for him. Oh, that's already taken care of as well. Yeah, my husband builds and flips vehicles. So he already has, he helped my husband build a vehicle for himself. That's great. I mean, that's amazing. That's what you're doing for all six? Yes.

Wow. That's our plan. I don't want them to ever, ever be where we were. And two years ago when we went through your class, we decided we're never going back. So we sat them all down on the coach. We told them what we were doing, and every day we paid off. We had a party. And, yeah.

That's awesome. Yeah, so Amy, honestly, considering he's 12 and depending about the time, you know, the amount of money he really is putting away, contributing to the IRA, I think is great. But you also could do like a split

and say, hey, 50% goes there. So he feels like he's doing something great with math, right? Because you're seeing the Ben and Arthur charts and like all of that in the curriculum. So I know he's probably really excited about that. But then do another half

in just a standard savings account. Because whether it's that transition from high school to college or even college to the real world, having just cash on hand for these life transitions that he's going to experience the next decade of his life, those are expensive transitions. And to have that cash on hand is huge. I mean, I know with Winston and I, like when we got married, thankfully, neither of us had debt going into the marriage, which is super weird. And that's not normal.

But we both had a little bit of savings of our own money and we were able to to get some furniture when we first moved into our home i mean that kind of thing like there's just some transitions and having that cash available is going to be really really helpful and be a huge safety net for him and so um but i know he's probably excited about the the ira with all the stuff that he's learning about investing so it'd be fun just to put a little money in there, knowing that he's going to contribute. But I'd put the rest in just a savings account, honestly, because realistically, he's going to want the cash at some point in the next decade of his life to be able to use for life transitions. Very cool. It sounds like they're doing very well.

And with six kids, they've got a game plan lined up for cars in college. And that's a great job on that. And they're being intentional to teach them. And, you know, you have to do both. You can't just give a kid money. That won't work for you because they're going to screw it up. And you can just give them information. That's one possibility.

But when you give them information and money meaning you teach them throughout their whole life how to handle money and you give them money that's how you change your family tree and so you know in in our kids cases like i said we funded those roth iras it wasn't a lot i mean it might have been twelve hundred dollars a year or twelve hundred dollars one year fourteen hundred dollars another year might have been nine hundred dollars it might have been three thousand dollars but if they're. But if they're babysitting and cutting grass and doing other things, we would just add up what they had made. Shipping. I worked in the shipping department.

You worked in the shipping department. Many months growing up. Shipping books. A little sweat rolling off a little Rachel. Not a bad thing at all. Your integrity snacks. I can keep going. You can keep going.

Work has been a part of the Ramsey life. I can promise you that. It's where money comes from, so it's a good thing to teach your kids. This is the Dave Ramsey Show. Rachel Cruz joins me this half hour. The phone number is 888-825-5225 she's had three best-selling books two of them number ones the current legacy journey journal or not legacy journal my gosh that's my book the current contentment journal has been a bestseller it was a journal we didn't even know it was something that would make a bestseller list so it was almost a surprise yeah it makes

the bestseller list it wasn't a surprise a bunch of them sold i just didn't even know they counted that kind of thing towards the list and so it's shown up on the bestseller list the first book we did was smart money smart kids you and i did it together it was the number one uh actually number one new york times bestseller um and uh the crux of that is also taught by you primarily, a little bit of me, in a series called Smart Money, Smart Kids. It's a part of your Financial Peace membership. Once you're in Financial Peace, the online, you can get the whole class there online, the Legacy Journey class online and everything. In that book and in that series, we talk about teaching your kids really basically four things you have to do around money, right? Yes.

Are you quizzing me? That was your cue. I was like, can i pass the test work give save and spend yeah all great article of a young guy giving talk about this i know so this um i sent this this morning so this nine-year-old boy in california decided to pay off all of the debt for the entire third grade lunch tab that was being collected. I guess if you skip lunch or if you don't have the money to pay lunch, they just keep it on your account. And so there was $74.50 owed for his entire third grade class.

And he decided at nine years old that he wanted to pay it off for the class. I thought that was so sweet. Very cool. Yeah. It's very neat. So it comes to his mom. His mom says, are you sure you want to do this?

Yeah. And writes a check. I know. And so we get questions a lot from parents that say, you know, my kid just wants to give all of his money away.

You know, you hear some people, it's like, oh, they just want to save it. They just want to spend it. They just want to give it. Kind of the personality of your kids really does show through with how they handle their money naturally and and while we do push you want to do all three you

don't want your kid constantly to make money and then just give it away just give it away just give it because you're not they're not learning how to spend it wisely wisely they're not learning to save it and so all three of those are so important. You've got to build all four muscles, the muscle of work, the muscle of giving, the muscle of saving, and the muscle of spending wisely. But when you're – and I don't know if he had more than $74 in his little account. I don't know. But in those one-time moments, you know, when your child comes to you and is like, I want to do this this you praise that generosity heart

and encourage that i mean like it was so i think that was just such a sweet article yeah what a great kid yeah it's um and you're right you praise it because uh the older we get the more tendency we have to be a little more selfish and a little bit more fearful because a lot of people hoard money because of fear not because of wisdom and they're not generous because of fear uh not because of anything else that they they're they're fear you know they've uh don't have an abundance mentality of us uh a scarcity mentality and so while you can build that muscle when you've got a sweetheart like you know a small child's heart like third grader then yeah that's a good thing like you said praise praise praise that and when they make a good purchase praise that when they save money praise

that when they work praise that that's right we have to teach them these things because they're not going to naturally learn them these are not natural skills that come to people. And so it has to be done, though. It has to be done. Good stuff. So you filled in for me a couple times while I was gone out of town last week. I was doing some radio events with radio people. We were working part of the week, goofing off part of the week. And I got a whole bunch of e and twitter action that said don't come

back we like rachel better she's nicer no i'm just kidding she's nicer that's a low bar i will say talking 21 weeks pregnant at one point i looked over at james and kelly labuth and i was like i can't catch my breath though like it's i but i think i did okay i think i think we survived it and it was fun i had calls coming in a lot of a lot of ladies we chatted it was good it was a great it was a great time so yeah you can leave whenever you want okay i'm good i'm gone it's all yours and i used to hate radio yeah i used i yeah you used to dread it every time you came in know but i've really embraced it guys yeah you've found that there's a new rachel that's a whole new leaf i'm i'm scared now i really am my job's

my job's in jeopardy no i don't think so amber's with us in washington hi amber welcome to the dave ramsey show hi dave hi rachel hi welcome to the show. How can we help? So we have a lot of debt, and we have a business that doesn't really make any money. It's almost two years old, so we haven't really made any money yet. But we have a lot of debt, and I'm not sure where to start, if we should continue with the business, or I don't know what to do. How are you eating? With a spoon. How are you paying for food money if your business doesn't make any money?

Well, I have a job also. Oh, okay. So my husband works at the business full-time, and then I work at work. Got what do you make i make 50 000 a year okay so your household is existing on that but you're not making any progress right okay so how much debt have you got 118 000 on what uh two cars two personal loans four credit cards what kind of business has he got? It's a gaming lounge, so it's like a pay-per-hour to play video games. Okay. And how much do you pay per hour to visit his game lounge to play a video game that you probably have at home?

It's $5 an hour. Why would I do this if I have the games at home? We live in a low-income community, so a lot of the kids can't afford the new games or the new consoles, so they'll come in and play for an hour or two. Is this like a passion of his? Amber, what was the thought? Was it an outreach kind of thing that you guys were trying to do within the community,

or were you seeing this as a full-time business? Like what was kind of the thought process of opening this type of business? Well, we've always wanted to open a business. We didn't know exactly what we wanted to do. And my husband's really into video games, so he knows a lot about them. And the place where we live doesn't really have anything for kids to do after school and during the summer besides the pool. So it was kind of something, you know, to keep kids out of the streets and not cause trouble. Okay.

We also have pool tables and air hockey. Yeah, but you're losing money the last two years. You guys have been losing money on this. Yes. Okay. I can tell you what I do, and then... Go ahead. But you're losing money the last two years. You guys have been losing money on this. Yes. Okay. I can tell you what I'd do. Go ahead.

Uncle Dave can give his thoughts, too. Papa Dave. That's right. Papa Dave. That's right. I mean, Amber, if I woke up in your shoes and we had, I didn't write down the number, I'm sorry, but $115,000 in debt. He's working there. What he's doing full-time is losing money and you're making

50 grand. I'd pause everything. What you're doing is not working. It's not been proven. You're not making money. And so it's not working. And on top of that, you have a mess. If you didn't have a mess and you had something on the side that wasn't working, there's a little bit more flexibility, more options. But if I were you, he has to stop that. He needs to get a full-time job. You need to work extra. You may need to sell these cars if you have, you know, depending on how much debt you have on them. I mean, like I would get radical, get out of this debt, save up an emergency fund, be in a completely different financial position in the next two, three years, and then

say, okay, what is our passion? What do we want to do? Do we still want to open up a business? And if we do, let's figure out a way to do? Do we still want to open up a business? And if we do, let's figure out a way to do a business because if you have that entrepreneurial spirit, I want you to be able to have that and do that. But when you are broke and when you're not able to pay your bills, having a business that's losing money is not an option. He's got to get a job. She's right.

She's exactly right. Here's your problem, okay? Your business model is screwed up. is not an option. He's got to get a job. She's right. Yeah. She's exactly right. Here's your problem, okay? Your business model is screwed up. To make $50,000, you have to have 10,000 hours of gaming. That's 840 hours a month

that kids have to game for you to gross $50,000. That's before you bought the air hockey table. So, and you don't have that capacity there. And give and serve on the side and kind of scratch that itch of helping the kids. You can run this on the side and be a good place, a safe place in the neighborhood, be an influence,

make a little bit of money in the process. This is not a full-time gig. You don't have your business model worked out yet. So you've got some work to do there. In the meantime, he's got to go back to work. Sorry. Hey, hope that helps. That puts this hour of the Dave Ramsey Show in the books.

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.