The Ramsey Show - App - Santa Claus Doesn't Work in DC! (Hour 3)

Episode Date: January 24, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Lena starts off this hour in Illinois.

Hi, Lena. How are you? Hi, Dave. I'm well. How are you? Better than I deserve. What's up? So I have a house in this area and it's sitting empty and I'm in the process of finding tenants

and I'm going to be profiting about $150 a month from my expenses for that property once I get a tenant in there. So I'm wondering if I throw all of that at the principal of the mortgage that I still owe on it because I actually want to sell this house in a couple years. I don't want to keep it. I don't want to be a landlord. I want to keep it until I get married and then once we're like married and everything's legal then I will sell it but I want to keep it you know stuff can go bad. You never know what's going to happen. My boyfriend could die.

You never know what could happen. So I want to keep it in case I need it until I'm legally married. When are you getting married? When he asks. That's pretty vague. We're not engaged. He's my boyfriend. Well, we're not engaged.

She's my boyfriend. I know. I heard that. There's no ring. There's no proposal. Yeah. We live together. engaged she's my boyfriend we don't know there's no ring there's no proposal so yeah we live together i'm and he's debt free so i moved into his house rented mine i still own it um but i want to keep it in case i ever need to go back there for

whatever if anything happens to him so that's what i'm trying to figure out now so five years from now you're still sitting here um no i don't think so why not we will be getting we uh we will be getting married it's just a matter of when he asks it the conversation's been had so i know it's coming i don't know when um but it's going to happen so and i've been married before i'm actually divorced so we've talked about this so once the question comes it will there will be no engagement it will be immediate wedding so that's where we're at so i just don't know what to do at this house until that happens well i mean the thing is if you're married in 90 days and you have a six-month lease you're sitting on it you're a landlord i'm okay with being a landlord for short term

a couple years i don't want to be a landlord for more than two years i just don't have it i don't want you to be a landlord i don't want well i uh my boyfriend's gonna take care of a lot of it i have a really really great you know what you know here's what i would do i would move back into the house okay that's what i would do i'd move back into it and stay there until you get married and when you get married sell the house okay i definitely want it sold like once i'm married i don't want to be there for any reason yeah i just i i wouldn't keep it as a as a rental property for one day yeah i i don't want if you need a backstop if you need a backstop

and you're worried about a place to go you need to be over there living okay well it's easy enough for me to get back there yeah that's what i would do i would live there until you're married and then when you're, you sell your house and move in with your husband, of course. That would be normal. That's what I would do. Okay. Allison is next. Allison is in New Hampshire. Hi, Allison. How are you? Good. How are you, Dave? Thanks for taking my call. Sure. What's up? My daughter is 10 years old. She has her own business. She does a very good job, and she has this income. And we're just wondering, she's saving for a car, and we're wondering do we put in a CD for her

or do we invest some of this money in mutual funds? Okay. She's 10 years old. She is. What does she make? What's the income? She's an artist. Yeah, she's an artist.

She did about twenty five hundred dollars in the month of december she averages maybe about a thousand dollars a month wow very impressive yes so what kind of car what kind of car does she want six years from now that's 180 000 well i think i she's saving about ten thousand dollars for her first car when she turns 16 we're trying we're kind of budgeting for that anything that anything after that she's saving about $10,000 for her first car when she turns 16. We're kind of budgeting for that. Anything after that, she's going to start saving in a 529, which we've already started. We're on baby steps four, five, and six.

Great. Why don't we just do that? Let's put 100% of the savings away in a simple savings account for the car until it reaches $10,000. When it reaches $10,000, then let's open a 529 and start funding it. What about, so we do, she wants to fund the car first. So do we put that money in a savings account? Yeah, just a savings account.

It doesn't matter. Okay. You can put that in a mutual fund if you want, but it could go down a little, it could go up a little, and you don't really want to mess with the car fund. The car fund's just money sitting there for the car. That's just sitting there. It's not going to make any any money but it's not going to lose any money correct right we just wanted to know like could we have about box checked box checked ten thousand dollars sitting there in a shoe box you know box checked and then anything after that goes into her 529 yeah that's what you said and i like the plan

perfect all right she's going to be thrilled that i called she asked to listen to you all the time That goes into her 529. Yeah, that's what you said, and I like the plan. Perfect. All right. She's going to be thrilled that I called. She asks to listen to you all the time when we're in the car. Not going to lie. She's 10 years old. This kid's way beyond most 54-year-olds I talk to. She was very excited when we did $18,000, paid off our debt in nine months. She was thrilled when we did our own personal debt-free screen in the car dealership when we paired off our car.

She's very invested, and we're changing our family tree because of you, Dave. What kind of art is she creating that's making this kind of money? She takes pebbles from the beach, and she puts them in these frames that my husband makes, and he makes the frames. She cuts them.

She pays him his salary. She puts money in for supplies. 50% goes into savings, 30% goes into her supplies, and 20% goes to her. Wow. She makes these little arches on Instagram. And she's selling the crud out of it on Instagram? She sure is. What's the average item sell for?

She sells it from anywhere from $5 to $22. And she's doing $2,500 a month of that? Your husband's got a full-time job. He sure does. She does it in the December for the holidays, but on average she does anywhere between $800 to $1,000. This kid's a go-getter. She's going to be somebody.

That's amazing. Wow. Very cool. Very cool. Sounds like she's more entrepreneur than she is artist, but she might be a wonderful artist. I'm not saying that, but she's obviously got it dialed in, and obviously you guys looking over her shoulder, guiding her. She'll be telling this story to her grandkids. Back in Aught 19, I made $2,500 at Christmas.

Yeah. I mean, she'll be doing that when she's 90. You know, I would be, I'd be telling that story the rest of my life. That's awesome. Very, very cool. Very well done. Hey, I cut grass when I was 12 years old. I had 27 yards to cut.

I kept a P and L on that and bought, bought, bought bought you know the some of the first weed eaters that were out and um kept my shins smacked with fishing line all summer long and um hay fever and poison ivy and everything else but paid cash for the first car paid cash for stuff as i went along always made always know how to make money i just didn't know how to hold on to it until later this is the dave ramsey show I always know how to make money. I just didn't know how to do business right. You've heard of Grip6 belts, right? Well, if you haven't, it's the only belt you can get online with no holes, no flap, and no bulk. I'm talking weightless. And the buckles come in really cool designs and are interchangeable.

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coverings you get free samples free shipping and with the new promos they run every month you'll save even more use the promo code ramsey to get the best possible deal. Rules and restrictions apply. Today's question is from Aaron in Iowa. Dave, I'm in Baby Step 3 saving for my emergency fund. I'm saving $10,000. I also have an HSA with an $8,000 family deductible. Should I save another $8,000 in my HSA as part of my Baby Step 3 before moving on to Baby Step 4, or is that savings part of

the baby step four? Um, I wouldn't worry about it. I think you're, you might want to raise your baby, your baby step three, your main emergency fund of three to six months of expenses. If you have an $8,000 exposure on your, on your health plan, um, it's basically your deductible is what it amounts to i probably would go above ten thousand but i don't think you need to necessarily save in the hsa matter of fact i wouldn't i would just say why don't we go 12 or 14 or something on your baby step three emergency fund given that you have an eight thousand dollar deductible that's what I would look at. Some of you right now are really, really struggling. Some of you are doing really well.

I remember down in my soul what broke feels like. I remember the shame. I remember worrying that the truck was going to pull up at any minute and take the furniture out of our house. I remember being scared. We didn't know how we were going to make it. You know what? I didn't stay broke. And you don't have to either. Millions of people

have worked these baby steps to pay off debt and do what Sharon and I did. Change their family tree. They've gone from not knowing if they have enough to pay the light bill to being set financially and giving generously. Now, maybe you're new to this whole thing, and you're not quite ready for Financial Peace University. That's okay.

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Open phones at 888-825-5225. Thank you for joining us, America. We're glad you're here. Kiona is with us in Washington. Hi, Kiona. How are you? Hi, Dave. I'm well.

How are you? Better than I deserve. What's up? Well, we are ready to sacrifice deeply to make up for the stupid mistakes we've made, but we have a what would Dave do question. Okay. And that question is whether we should sell our house to cut our debt snowball from 10 years down to three years. Okay. How much debt do you have, not counting your home?

$546,000. $500,000? Yes. On what, pray tell? Well, your question should be, who's the doctor or lawyer and i am a lawyer and so 347 000 of that is student loans okay and uh what's the rest of it we have 45 000 on cars about 27 000 on a y28,000 for a 401k loan, and the remainder is just consumer debt. What's your household income? I am self-employed, so it ranges between $160,000 to $185,000 right

now. My law firm is young, so hopefully that will go up up but that's about where we're at what's he make he makes about 135 000 and that goes up every year as well okay do you have a 300 000 income no that's so the 160 to 185 is our combined right now oh but it's projected to go up over 200 okay so let's say you have a $200,000 income why does it take 10 years to pay this off just working through the debt snowball with the amount that goes out for minimums every month out of 200 you're going to pay off 50 a year that's where the calculation is at running it through excel i mean hopefully it would be more than that but that's yeah that's you haven't cut your lifestyle and sold your cars yet

the cars are on the chopping block to go and that'll impact it but they're not the highest debt the biggest debts are yeah there's something wrong with your calculations because i don't understand why someone making 200k is only only paying off $50K a year. Because my student loan, one of them is it's all one, so it is at the very end of the debt snowball, and we're not paying anything on it now. The interest accruing on it is substantial, and that's part of what's delaying it.

But we have significantly cut our lifestyle. What is your home worth? Child care is expensive. What's your home worth? Our broker would list it at about $545. And what do you owe on it? $407. I'd sell the cars now, and I'd fight this for one year and see where you are and if you still feel like it's going to be nine more years after that

yes i'd sell the house i don't think it's going to be nine years um and i don't know i don't know what it wouldn't be i don't know i don't know what the curve on your income will be there's nothing lost by doing that because the house will go up in value during that time in your market. And so you're going to make some more money during this coming year while you try this. But I think you're in the first three months of doing this whole thing, aren't you? About four and a half months. Yeah. Okay. So that's, uh that's uh uh yeah you're young to it and uh so what happens is is you almost go like through the stages of grief in a sense and that's how i can tell kind of where you are is the first thing that happens

is you have an oh crap moment you go oh my god what is all we're gonna do with all this then you have kind of have a hopeful moment and you go oh i think we can do this and then you write it all down and you have another oh crap moment right what is all we're going to do with all this? Then you kind of have a hopeful moment and you go, oh, I think we can do this. And then you write it all down and you have another, oh crap moment. Right. And that's kind of where you are right now. When you really get into the grind of it, it's like, dad gum, this is going to take forever. And that's what, that's what brought this up. Your willingness to sell the house indicates that you guys are probably willing to sacrifice in lots of different areas. And I think a year of that with a tight budget, working on every dollar, the two of you working together, doing everything you can to get your income up as fast and as far as you can, I think that's going to take you further than anything else. And so let's see what a year brings. If next spring when the weather breaks,

you don't feel good, your traction is not where you think it's going to be, you're not going zoom zoom, and you want to put the house on the market, I wouldn't blame you. But I always sell the house last. I'll sell a car in about 30 seconds but i always sell the house last it's very expensive emotionally and financially to move physically draining to move everything and like that so yeah yeah absolutely absolutely i'd give it a year and let's see where you are wow you got a mess but the good news is you're smart and you got a big shovel. So you'll just have to shovel a while. I think you'll get there.

I know you'll get there if you stay with it. This is the Dave Ramsey Show. ¶¶ Listen, there are some basic things that you should be doing to take care of your family. A roof over their head, food to eat, even if it's rice and beans, a car to get you from A to B, and term life insurance. Term life insurance is an immediate need no matter where you are in the baby steps since your family is at no greater risk than when you're in debt. That's why I tell you to get 10 to 12 times your income in coverage to replace those lost dollars and do it with a 15 or a 20 year guaranteed level term plan so you can make sure your family is protected long term. The only place I send you is to Zander Insurance.

They shop all the top insurance companies, and they're committed to serving you. That's why I use them and why I've recommended them for over 20 years. Whether you prefer to work online or you need personalized assistance, you pick your path. Go to zander.com or call 800-356-4282. Please, please get this done. It is an absolute necessity. Denise is with us in Florida. Welcome to the Dave Ramsey Show, Denise. Hi, Dave.

Thanks for taking my call today. Sure. What's up? I'm blessed but panicked. I think I'm having an oh, crap moment, as you mentioned in one of the previous calls. Here's my situation. I'm panicked about retirement so much that it's just I'm thinking about it 24 hours a day. I'm married.

I'm 54 years old. We have $94,000 in a 401k. We have a seven-month emergency fund. We have no credit card debt, but we have a mortgage with a balance of $127,000. We have two cars. My husband owes six on his. I owe 15 on mine. And our income for 2019 was $70,000 gross.

I'm a realtor, so my income fluctuates. I think that's part of the challenge, but I'm just panic-stricken, and I don't know what to do. We've changed some behaviors the past year, but we don't know where to go from where we're at. Okay. Well, let's see by the time you are 21 years would be 75 right yeah right yeah that 94 would have become between three and four hundred thousand if you don't add anything to it, as if you're invested in good growth stock mutual funds that are averaging what the market's averaging.

So that's not, and you are going to add something to it, obviously. So our goals need to be, of course, become debt-free first, get your emergency fund, and that's getting these cars paid off or sold and paid off or whatever, and our emergency fund in place, so that you can start putting 15% of your income away, which is going to equate to about $12,000 a year. So $1,000 a month going for the next 15 years or 20 years. You're going to be fine if you do all of that. And during that time, you're going to get your house paid off as well. So your goal needs to be that 11 years from today at 65,

you've become debt-free with your emergency fund way back immediately right now, and you started putting 15% of your income away while you started paying off your house. I want your house done by the time you're 65 so yeah that that's so right now we've got the two car payments my husband owes 6 000 on a toyota truck that only has 30 000 miles so it doesn't make sense to sell that i'm thinking we pay that off and then maybe start trying to make double payments on my car. Again, low mileage. I owe $15,000 on it. But if I could take that money, so say I get that car paid off.

When you get that car paid off and you have your emergency fund, you don't have any payments but a house payment, you start putting 15% of $70,000 away in 401ks and Roth IRAs. Okay, so pay the cars off. And you need to do that really, really fast. Okay, so if I get my husband's car paid off, then instead of what I was going to do is take that money and pay down my mortgage.

No. But no, you're saying... You need to clear these two car debts immediately like super fast they're killing you yeah they are they're sucking you dry when you don't have any car payments now you got money to build up your emergency fund right quick of three to six months how much is in that i have a seven seven-month, $25,000. Well, pay off everything today. With my emergency fund? Yes. Pay off the cars? Yes.

Or sell them. Then I won't have an emergency fund. Good. Build your emergency fund back up with what used to be car payments. Okay. But you have $21,000. You'll have $4,000 to start with, and you're debt-free by the time you finish this phone call. Okay. Now I'm not panicked anymore. I'm feeling a whole lot better. Now quickly

build your emergency fund back up, but you don't need a $25,000 emergency fund with a $70,000 income. You need three to six months of household expenses. So you need fifteen thousand dollar emergency fund and then once that's built back the extra emergency fund because my income fluctuates as a realtor it's like you know some years i i make i might make 30 other years i might make 60 you know so i just try to err on well you're you're gonna get in the 60 years because you're gonna have to get with it all right you there's no sitting around anymore you're going to have to kick it um you don't need after i get the cars paid off today the emergency fund today today then do then i get the emergency fund built back up then you start putting 15 of your income away

15 pay the house down any more than 15%. Above 15%. 15% of your income goes into retirement. Everything above that you start throwing at the house. Okay. And that's going to be about $1,000 a month roughly. Right. And so you start putting $1,000 a month away in 401Ks and Roth IRAs. And above that, don't put $2,000. Don't panic. Above that, let's get this house beat down. And as soon as that house is paid off, you jack up everything.

And you kick it into gear. And you do all of that and make sure that the current 401k is invested in good mutual funds. And you put it in there. You're going to have, at 70 years old, you're probably going to have $600,000, $700,000 in a paid-for house. But you guys are not. You're probably working past 65 if you want to head to that kind of a direction. You're going to be millionaires at 70 with your current income if you do this. That's the numbers we're working right here in front of you. So that's about where you're going to end in front of you so um that's about where

you're going to end up but you're probably working past 65 oh well i plan to and i don't even need to so it's going to be fun selling houses is fun go sell a bunch of them that's what i would do pay off those cars today alex is in virginia hey alex how are you hi dave i'm well how are you? Hi, Dave. I'm well. How are you? Better than I deserve. What's up? Well, I'm calling today because I haven't been to FPU, but I am on baby step two. I'm working your plan. And I have been toying with the idea of picking up a part-time job to pay down my debt faster.

I owe approximately $88,000. Most of it is student loans. But I am still trying to finish my bachelor's degree, which my company pays a portion of. How much do you like finishing your bachelor's? If I take just one or two classes at a time, as I have been, that's what my company covers, a year and a half. And what's the bachelor's in? Aerospace engineering.

And what does that do to your income? It would about double it. I would come in at about $110,000, $120,000, and I make approximately $58,000 right now. Okay. Well, it sounds like that's a really good investment, doesn't it? Yes, it does. Let's get that done. But I don't feel like I'm making the kind of progress that I need to make on my debt.

Oh, well. You are if you're doing something that's going to cause you to double your income. 18 months from now, your income doubles. Voila, the debt goes away. Yes, yes it would. I mean, you'll just take all that money, throw it at this debt, and you're done in a year. So two and a half years from today, you're debt free. Okay, I guess I didn't think of it that way.

I was thinking in terms of right now, making payments right now. Well, I'd like for you to make payments now, and I'd like for you to accelerate the school to the extent you can. The faster you get to this income and the faster you get the debt paid down, you're going to win, you're going to win, you're going to win, right? But here's the thing. Let's say you tread water on the debt. You don't make any progress at all.

You've got $80,000 in debt, right? Correct. And your income goes from $55,000 to $110,000 18 months from today, and you put $80,000 in one year paid off after that. So you could do that. That's two and a half years from today. That's not a bad plan. But it's probably going to sound more like you've reduced some now to where you don't have to do 80,000 in one year. You're going to end up doing 60,000 in eight, nine, ten months or whatever.

That kind of thing. Because you're going to do some of both. Because you're probably not going to graduate before a year and a half anyway. You got this. You're going to do this. Play through. Play through. Stay on your plan. Develop a plan. Detail the plan out. Put it up on the wall so you can see it.

Do it. Do it. You got it. This is the Dave Ramsey Show. One of my favorite parts of this show is hearing your debt-free screams. You guys are our heroes. You've kicked debt to the curb and you've saved for the future. Now we want to celebrate with you. If you have lived like no one else and are currently in baby steps four through seven, well, it's time to enjoy some money. And the perfect place to do that is on board our first ever

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Harvey Firestone said the growth and development of people is the highest calling of leadership. Ben is with us in Ohio. Hey, Ben, welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? Here's my story. So I have paid off my student loans, and I've saved up for the emergency fund.

So paid off $30,000, saving about, we had about $13,000 saved. And I'm kind of at a crossroads now where, um, so you're a hundred percent debt free except your house. Yeah, exactly. So we, we bought the house. Um, and you know, I, my income's not that big, just that I stuck to your plan, paid off the debt. Uh, but you know, I, I did the 30 year mortgage, but I did do 20% down. Um, and I'm debating like, what's, what's my priority? Like my, I make about 2,600 a month. Um, it's me and my wife and two kids. Um, or I've taken advantage of my work's TSP match. Good. The Roth TSP.

I got the 5%. What do you do? But I don't know. Hello? What do you do? I work, I'm a financial specialist for the government. Okay. For TSA.

Okay. For TSA. Okay. So I make $53,000 a year, $2,600 a month, and I'm trying to figure, like... Wait a minute, $53,000 a year is $4,200 a month. How in the world are you down to $2,600? What have you got coming out of your check? Well, 5% for the TSP, health insurance, retirement, life insurance. Wait a minute. Retirement, you already covered. Well, it's another part of retirement. Well, called the FERS. Oh, the mandatory. Yeah. Okay.

And you're buying life insurance through the feds i wouldn't do that okay because you're not getting home with any money you're telling me you're getting home with 30 000 when you make 53 right um my taxes i just changed my w4 so i might get a little bit more because I have two dependents. I claimed the second one. He's a baby. He was just born. How much was your refund?

It was about $5,000. Okay. You need to change your withholding by $400 a month. Okay. That's $4,800 a year because you're loaning the federal government, which you're having to work for, money at no interest, $5,000 a year, and then they give it back to you. Santa Claus does not live in D.C.

So that's your money coming back to you, and you shouldn't be giving it to them. So we need to get home. So that gets us to $3,000. It's still, I still can't, and I don't know, I wouldn't be buying life insurance there. I'd be buying it on the side. Your take-home pay still feels awfully low based on a $53,000 income. So really dig into where your check is going. That's one thing you need to do.

But the good news is you've gotten out of debt completely except your home, and you took out a mortgage on the home, and a 30--year and you've got it. And then from there, I'm going to start, you know, it's time to start doing baby steps four, five, and six. And that's 15% of your income into retirement. You're doing five and more on the house and more for the kids college. And, you know, you don't have a ton of room in this if you're only getting home with $2,600. We did get it up to $3,000 just now. And you probably can get it up to $3,500 is really where it ought to be. You're about $1,000 low.

And so you need to look at where that stuff's going, you know, how that's broken out. But you should be getting home with more than that. I can't figure out what you're doing with all of it. But anyway, and then the last piece is what are your career aspirations? You know, what are you going to do? Are you going to sit there and make 53% plus 3% a year for the rest of your life, or do you have an aspiration to be or do something where it makes more money? And what's your career track?

You're young. You've got plenty of time. So what is it you really want to do? And so if you want to do that and you want to sit there, there's no shame in sitting there and doing 53 plus 3 percent of your cost of living raise or whatever the feds give you. No shame in that at all. It's obviously steady work, but it's going to be a, you know, you're going to be pinching pennies and watching every dollar and every nickel to raise kids and to do that because you're slightly below the average household income.

Average household income is about 60 and you're at 53. So you're making okay money. It's not like you have low pay, but you're not ringing the bell either on the upside. So you want to be looking at that and thinking about that long term. What do I want to be when I grow up? All right. Jenny is in North Carolina. Hi, Jenny. Welcome to the Dave Ramsey Show.

Hey, Dave. Thanks so much for taking my call. Sure. What's up? I'm about to be 58, and I'm thinking about buying long-term care insurance. And I'm wondering if this is too early or if this is the right time since it's a lower price now. No, it's a lower price because you don't need it. That's why it's a lower price.

Less than one-half of 1% of people use long-term care before 60 years old. That's why it's cheap because nobody uses it. Yes. And it doesn't stay cheap. It goes up with your age. So I would wait until 60 years old is what I suggest you do. Okay. And I love long-term care insurance.

It's very essential to get once you're 60 unless you are independently wealthy and can pay for your own nursing home out of your pocket, self-insured, in other words, through that. So your nursing home exposure is typically $250,000 to $400, 400 000 and so a guy called me the other day with five million dollars he's like can i self-insure through this yeah yeah you can take a 400 000 hit on five million and still be okay and your wife you know if you burn through 400 grand take care of you and your wife is left with the rest of it i think she'll survive you. But the whole thing is if you've got $300,000 to your name and you burn through that and you die and you leave your spouse penniless,

that's not smart. That's when you need long-term care insurance and you need to make sure you've got that dialed in. So long-term care insurance is essential unless you've got north of a couple of million dollars and once you're 60 years old. But I wouldn't buy it until you're 60. Now, I'm getting ready to turn 60 this year, but I've got enough money to self-insure, so I won't be buying it.

But I'm a big fan of the product unless you're able to self-insure through that process. Christopher is in Florida. Hi, Christopher. How are you? Hey, Dave. Thanks for picking up my call. How are you? Better than I deserve.

What's up in your world uh well it's a happy friday so far but i do have a few questions to ask you a little bit about my situation i'm 25 years old i am a school teacher out here in sunny florida uh but just like most of your calls i have a little bit of financial issues. So just a quick rundown. Hey, before I run out of time, go ahead and ask your question. All right. Do you think I should go full-fledged, pay off debt, or should I just save? You should go full-fledged and pay off debt. Okay.

Because that's your shortest path to building wealth. How much debt do you have, sir? I have about $30,000 in debt. Okay. And what do you make as a teacher in sunny Florida? I make $40,000, but I also have a $40,000 annuity that I get each year. From what? From a structural settlement that my parents left for me many, many years ago.

Wow. Okay, so you have an $80,000 income and you have $30,000 in debt, right? Yes. Okay, so a single guy in Florida. Why can you not live on 50 and be debt-free in one year? I can, but I just don't know what to do after I'm debt-free. Once you're debt-free, then you build your emergency fund, and then you start investing. And if you want to continue your education or something like that, you'd invest into yourself at that point,

and you'll have the cash to do it. But job one right now is you're a young guy. You're making $80. You've got $30 in debt. Clean up the mess, dude. Clean it up right now. Get it done. And then start talking about building your emergency fund

and then building your long-term investing. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. every screen 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.