The Ramsey Show - App - Saving for Your Next Car Purchase (Hour 1)

Episode Date: April 11, 2019

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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. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. John is with us in Raleigh, North Carolina. Hey, John, how are you? Doing well, Mr. Ramsey. Good afternoon. Thanks for taking my call. Sure. What's up?

Hey, so my wife and I recently completed step two and we'll have step three completed by the end of this month. Yay. Yeah, it's pretty exciting. I will be investing 15% of our combined total income into the TSP starting next month. I want to start saving for our next car several years from now. And I've seen you've discussed putting a monthly payment into a mutual fund earmarked as a car replacement fund. Could you elaborate on that, and how would I go about doing that? Well, I had an example that I floated out there probably 20 years ago that got a lot of traction called the free car, where if you invested and paid yourself payments and the interest on that account would eventually buy your cars.

That was more of a metaphor and an example than something tactically that I would actually do. So here's the problem. If you're going to buy the car inside of five years, I would not put the money in a mutual fund. Okay. Too volatile. Okay. Okay. Almost all the five-year periods in history in the mutual fund world have made money. The three-year periods, only about two-thirds of them have.

And so you've got like a one in three chance of actually losing money if you had a three-year planning window for the car. So I really, I personally wouldn't do that. It was more of an example to say that if you have investments, you can get money that works for you instead of you working for money all the time. That's more what that was for. So when you finish baby step three, you start baby step four, 15% of your income going into the TSP, and that would be 80% C, 10% S, 10% I. And then you would – then if you start saving for a car, I really – I mean, I don't know if I would –

I wouldn't save five years for a car. I would just say, okay, I need a car in x number of months 18 months and you know i want to spend eighteen thousand dollars on a car so i'm gonna save a thousand dollars a month or you know whatever i want an eighteen thousand car and i'm gonna say five hundred dollars a month for 36 months but i'm just gonna it's just money into the shoebox money into the cookie jar that's doing that because you're not leaving it alone long enough to experience stock market volatility and come out on the good side of it. Does that make sense?

Hello? Okay. So that's what I would do. Mario is with us in San Francisco. Hi, Mario. How are you? Hello, Dave. Thanks for talking to me.

Sure. What's up? Well, I have a house that's paid off. I bought it for $150,000. It's worth $300,000 right now in marketplace. And I'm $85,000 in debt. And that $85,000 is $50,000 in two cars that I have, $20,000 in credit cards,

and $15,000 in student debt. So my question is, should I put money out of the house and pay off $85,000? What's your household income? About $3,500 a month. $3,500 a month. That's your take-home pay? Yes, sir. How did you end up with a paid-for $300,000 house?

Well, my brother passed away a couple years ago, and he was in the military. He left his life insurance to me, so I went ahead and bought the house. I blew $50,000, and then the rest I just put in the house. All right. Here's a good rule of thumb. If you have stuff with motors in it, cars, boats, tractors, whatever, that total up to more than half your annual income, you have too much invested in things that are going down in value, and that would be you.

You have less than a $50,000 income. You owe $50,000 on your freaking cars? Yes. My wife has one, and I have one. Luxury vehicles. This is mathematical insanity. So, no, I would not borrow on your house to buy

a car you can't afford. I would sell the cars. Okay. I have been listening to the video. So I told her yesterday that I'm selling both the cars and going to get us with the loan, two $5,000 or $6,000 working cars. And she just flipped on me. I would imagine.

Yeah. So you did that backwards, okay? So you need to sit down with her and not start telling her you're going to sell her car. You need to talk about why. Because we're broke. We're broke. We have a paid-for house, and we're still broke. Yes, I'm actually behind on a lot of bills and some in collection.

And I told her, here, what's this idea? And she's like, oh, do whatever you want. No, when a wife says do whatever you want, that is a complete lie. She did not mean that. That means I'm mad and I'm not talking to you anymore. That was a disgusted, but do whatever you want. Okay, there's no wife in the world that means it when she says that phrase. What she means is I'm going to be pissed at you for ten years if you do whatever you want.

So that is not what she meant. So, no, you need to sit down with her, and the two of you together, like adults, need to look at your overall finances and start making some adult decisions together. No temper fits allowed. Do whatever you want is not a good sign. All that means is she thinks your plan is stupid and she's mad at you well the math doesn't work out and she's she wants it down with me i've tried it i've bought books well then you need marriage counseling i've already tried it it's we're walking up marriage

counseling works if you do just like a financial plan does if you do if i give you financial peace university the one-year membership to the class would you get her to go with you if i give you financial peace university the one-year membership to the class would you get her to go with you if i give it to you free uh yeah definitely how come she'll do that but she won't sit down and talk to you about a budget because she's mad i believe will she go to class with you when she's mad no probably not okay i'll give it to you if you can get her to go to class. And you need to shut up talking about selling her car until the two of you get on the same page. Because no wonder she's mad. You walked in and said, I have a new financial plan.

We're selling everything. Well, no wonder she's mad. She has no idea why. She doesn't understand what's going on. All she knew was she had a good car and her husband watched some stupid YouTube video and lost his mind. That's what she thinks. And so you've got to sit down and talk about why we're doing this. But, dude, you make $45,000, $50,000 a year.

You can't drive $50,000 worth of cars, even if they're paid for. It doesn't make sense. It's insanity. So you need to get her on the same page. That's a big deal. Slow down a little bit. Hold on. I'll have Kelly pick up.

And Kelly, I want him to follow back up with you before you sign him up after he talks to her and she agrees to go to the class. Do not give this to him for free and him go by himself. I'm not trying to give him a tool to beat on his wife anymore. I'm trying to give him a tool to beat on his wife anymore. I'm trying to give him a tool to get everybody on the same page. And this will be better than marriage counseling if you can get her there together. This is the Dave Ramsey Show. Tax fraud, medical ID theft, account takeover, employment fraud. These are just a few of the identity theft events that Zander's ID Theft team has

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They even have stolen funds protection, and your children are protected for free. It's just a mistake to be unprotected anymore. Call 800-356-4282 or visit zander.com. Mark is in Columbus, Ohio. Hey Mark, how are you? I'm doing great. How's Dave doing? Better than I deserve, sir. How can I help? I guess I would say, what would Dave do question? We're in the process of selling a property that we are debt-free, but for the mortgage. Selling a property that we're going to have close to $50,000 left over. My question is, should I apply that to the mortgage of my primary home, or should I take some of that and invest it for retirement?

I'm 52 years old. My wife is 51. Are you debt-free except the home then at that point? Debt-free except for the home, yes. And you have your emergency fund already? Fully funded emergency fund. We're in baby step six, yes. So you're putting 15% of your income towards retirement already?

Pretty close. We're not exactly at the 15%, but very close to that. Any kids' college need to be done? No. Okay. All right. Then, yeah, it goes at the house. You would put it all towards the house, none of it towards retirement because of our age?

No. If you want to crank it up a little, throw an extra Roth on there or something. Well, that's what I'm thinking is opening a Roth for my wife, funding her Roth, completely, you know, fully funding hers. What's the balance on your home? The balance on the home is about $190. Okay. And the home is probably worth $250.

What's your household income? Around $100. Okay. So, I mean, how quick you want... If you throw $5,000 at the Roth, it income? Around $100,000. Okay. So, I mean, how quick you want... If you throw $5,000 at the Roth, it doesn't keep you from paying off your house, okay? Right. It doesn't change anything, really, here. So, if you want to

drop, you know, $6,500, you guys are old enough to do $6,500 and open her a Roth and put that in a growth stock mutual fund, that's fine, and then throw the rest of it at the house, it's okay. Especially since you're coming up a little short on your 15%. Right. I'm coming up just a little bit short on that and i don't have we just started your plan probably seven eight years ago we were in a um dumb graduated from that okay well you're you got you're good i mean you're going to be fine you

make good money you're going to get the house The house will be done in about probably five years. That's the plan, yeah. And, you know, if you keep cranking 15% of your income in, you're going to retire with dignity. You're going to be in good shape. And this one move is not going to cause one or the other thing to not happen. And so, yeah, that's a good move. Good question. especially since you're running it gets you up to your 50 if you've been coming in at 13 or 14 or something then

in the last few years on your baby step four and then you throw an extra 6500 on it this year it kind of brings that back up a little bit is you know it's not a perfect science here the whole thing is save and get out of debt that's the whole thing. Anthony is with us in Wilmington, Delaware. Hi, Anthony. How are you? I'm well. Thanks for taking my call. Sure. What's up? My situation is I just heard about

you about two days ago, and I haven't stopped watching your videos on you. I don't have any debt, and I have $120,000 in the bank. Good for you. I don't, um, I own my cars, me and my wife. I don't own a house.

I currently rent and, um, I'm scared to invest my money because I think everybody's going to try to scam me. So my question is too, is I want to invest because I've been listening to you for a few days, but I don't know what companies and, like, I don't know. Like, I hear what you're saying, but I don't know what that means. I understand. Sure. Well, number one, take your time.

There's nothing on fire. How old are you guys? I'm 35. And what's your household income? 130. You've done very well. Congratulations. Excellent job. How old are you guys? I'm 35. And what's your household income? $130. You've done very well. Congratulations. Excellent job.

Well, four years ago, I was a homeless drug addict. Really? I'm working on some stuff here. Wow. How'd you get dry? God. I had an encounter. Way to go.

Very neat. I love it. Good for you. Well done. Way to go. Very neat. I love it. Good for you. Well done. Yeah. Okay. So, you know, whatever you do, you go all in, and you went all in on saving money, and it's paid off for you. So very well done, sir.

So what I would do if I were in your shoes is I'm going to set a portion of that $120 aside and call it my emergency fund, three to six months of expenses. You probably already heard me talk about that a hundred times. Yeah. And then the rest of it is either going to be used for purchasing your first home and or to begin some investing. Both things you need to do in the next couple of years. But there's no huge rush. People make mistakes with money when they get in a hurry.

And you know why what you've done has worked? A, you were comfortable with it and b you understood it you weren't feeling like you were getting scammed you didn't worry about doing something you didn't understand so you use the same principle going forward on your uh investing in a home or investing in you know some mutual funds for your roth iras and stuff you just slow down and you get with somebody, and you learn. And you learn about investing enough. It's not like you've got to get a master's degree in finance. It's not rocket science.

You can sit down and learn about it. It's like if you can learn to operate a car, you can learn to, you know, operate an investment. There's not that much to it, but you just learn about it to where you are making the decision. Dave Ramsey's not making the decision. Some guy Dave Ramsey sent you to is not making the decision. You're making the decision. Dave Ramsey's not making the decision. Some guy Dave Ramsey sent you to is not making the decision. You're making the decision, and you understand it. And don't put money in it until that happens, because it'll rob your peace. It'll steal your peace of mind.

Right now, that 120 is very safe and gives you peace of mind. If you invest this in something that someone else is watching over, and you have no freaking clue what's going on, you're going to be up nights with worrying about it. Right. And it gives you the exact opposite of the effect it should give you, which is the sense of power and the sense of investing. I mean, the sense of confidence and peace that, from a financial perspective anyway,

that you can move forward. So what I would tell you to do is jump online at DaveRamsey.com, click on that SmartVestor, and put in your stuff. It will drop down a list of the SmartVestor pros there in your area. Sit down with one of them. There's no obligation. They're not going to charge you anything to sit down with them. And you're looking for someone with the heart of a teacher. That's how we vet them.

Because you're not there to be sold. You're there to learn. And if you learn, then you decide what you want to buy. And so what do you do for a living? I do construction. Okay. And so construction technique to do a certain thing, to build a certain, whether you're doing framing or whether you're forming concrete or doing steel work or whatever it is, there's a process that you use there that has to be learned. And when you learn it, then it kind of becomes automatic. And that's true of investing. It's no different than just what you do every day for a living. And so, you know, this is how you do it.

Once you know how to do it, you just do it. And there's not a big intellectual heavy lifting thing going on here. So just sit down with one of these guys or gals with the heart of a teacher and begin to learn. Do not feel pressure from anyone, including me or them, to put money in something until you understand it. And then once you understand it, I use, as you've already heard, growth stock mutual funds for my Roth IRAs and so on. And that's what I'm going to recommend you move towards with your baby steps. And, you know, start talking about using the larger portion of this money for a down payment and get you guys a home and let's move on to that uh you know get that part of your life locked in

and dialed in and uh stabilized and and that's the purpose of controlling all these money variables is it stabilizes these different corners of your life and allows you to prosper then and continue with your sobriety, which is an awesome, awesome path that you're on. I'm so proud of you. Well done. So hold on. I'm going to send you a copy of the book, The Total Money Makeover, which will give you the exact step-by-step plan through what to do and show you what to do just as a gift to you.

It will be part of your continued success that you're having here. Thanks, Anthony. Appreciate you calling in, man. Open phones at 888-825-5225. You jump in, we'll talk. Richard's on Twitter. Dave, I was turned down for term insurance by one company. Should I keep my universal policy?

You should keep your universal or whole life policy if you're uninsurable and can't get term. Being turned down by one company does not mean you're uninsurable or can't get term. And so you keep it until you have, you always keep your current life insurance until you have new life insurance in place. Always. Even if you think you're not sick and you're not worried about being insurable, you still keep it in place just out of an abundance of caution. You never cancel current life insurance until you have the new life insurance in place. Once you have it in your hand, policies in your hand, then you cancel it. So get in touch with Zander Insurance, Z-A-N-D-E-R, ZanderInsurance.com, and they'll walk you

through and look at your medical condition or whatever it is that's bothering them, Richard, and see if you can get insured. If you can, only when you are, then you drop your old policy. One Dental is a company I've been telling my listeners about because I know these guys will save you money at the dentist. One Dental is a dental savings program that allows you to go to one of over 158,000 dental practice locations nationwide and save on things like cleanings, dentures, root canals, crowns, and even orthodontics. Here's the really cool part. You can join One Dental right now and you don't have to worry about high deductibles,

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Join today at OneDental.com. That's OneDental.com. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. It means when you're buying your blinds from them for your windows online, if you goof up, if you mismeasure and you pick the wrong color, they will remake the blind for free. You get free samples, too, and free shipping. And with new promos, you save even more.

Be sure you use the promo code Ramsey. Blinds.com. Kelly is in Arizona. I currently have $20,000 in savings. $10,000 in debt, including a car and credit cards. Should I take half my savings and pay off the debt and then rebuild my emergency fund? Oh, by the end of the day, you should also cut up the credit cards,

and you should also get on a budget and raise your right hand and swear to never borrow money again so you don't get back in this mess. If you don't change the habits that got you into debt, you will end up back in debt. So we want to make sure that you change the habits in the process. Definitely. Good question.

There's a Gallup poll that's showing that three out of ten Americans use a budget. No wonder so many people are living paycheck to paycheck. They don't have a plan. Seventy percent of people don't do a budget. Jesse says our every dollar budgeting tool changed everything when it came to managing money with her husband. For the longest time, she and Chris were making tiny little payments on their student loan. They weren't making any progress. They got on every dollar, and they paid off $10,000 of student loan debt within a year.

We hear stories like that all the time from people using every dollar. It's available for your Android, for your iPhone. It's completely free for your desktop as well. And over 3 million people are using EveryDollar. Millions and millions of people are using EveryDollar. It is the best budgeting app on the planet. It's easy to use. You can set up your budget in about 10 minutes.

Jump on EveryDollar. Get your budget going. It's easy to use. You can set up your budget in about 10 minutes. Jump on every dollar. Get your budget going. Sit down with your spouse. Get your budget going. Put it on both your phones so you can keep up with what's going on. This is the way you do it. It changes everything, you guys. Douglas is with us in York, Pennsylvania.

Hi, Douglas. How are you? Well, I wish I was better than I deserve, Dave. You? I am. How are you? Well, I wish I was better than I deserve, Dave. You? I am. How can I help? Unfortunately, my father-in-law passed away last Friday night at the age of 59.

He had a stroke, and unfortunately, he wasn't able to get to the hospital in time for the swelling in the brain stem that got to him. Wow, I'm sorry. Thanks. My question is, he was a big fan of yours. He actually had term life insurance.

So my wife and my brother-in-law are both going to be receiving $200,000 from this policy. So we're kind of, well, my wife and I tried sitting down this past weekend and talking about it but my wife is still grieving unfortunately sure but i'm trying to be the man up trying to be the man here and trying to kind of get some idea what to do with the money we help we are following your plan we're in babysit babysit number two we have 40 000 left and we also have a mortgage left to go okay you have children uh yeah we have a one-year-old daughter which actually celebrated her birthday a week before he passed away oh my goodness and was he was he married is your wife's mom in the picture no he um he was single he was divorced okay all Well, number one, you can go slowly.

You don't prove anything by going super fast. So, I mean, if the check comes to you guys, and it won't come that quickly, it's going to take it a month or two to get there because you're going to have to provide death certificates and other things to the life insurance company to get the money. Yeah, the lawyer we hired is helping us through it. Okay. And did he have other assets? Did he have other things in his estate?

He had his retirement, which is at $69,000, and he had some personal loans that we're going to be taking care of. So out of that $69,000, the funeral is going to be paid for, and some of his personal debts are going to be paid care of. So out of that $6,000, the funeral is going to be paid for, and some of his personal debts are going to be paid out of. Okay. All right. Well, the insurance is not subject to the debts, but the personal loans or the retirement would be.

Okay. Okay. Did he have a will? Unfortunately, no, he did not. All right. Well, you're just going to use it wherever you are on your baby steps. But take your time. There's no reason to rush your wife.

I mean, if you get the check and you just let it sit in a savings account for two months while you think about it, you can do that. That's not evil. You haven't done anything wrong. Yeah. wrong. But once the emotional cobwebs are out of there and once the basic, you know, the worst part of the grieving goes by, then yeah, you're going to just walk your baby steps. I'd pay off all your debts. How much do you owe on your home? We owe $130,000. We just recently bought a home. Okay. All right. And what's your household income? I actually work full-time. I'm a truck driver. Last year my income was $68,000.

Okay, all right, good. All right, well, I'm going to walk you out the baby steps. You'd be debt-free. You'd put an emergency fund of three to six months of expenses aside, and then you'd make sure you start putting 15% of your household income into retirement. That doesn't affect this money. And I would probably put $10,000 in a 529 for the baby. Yeah, that she wants. Her dad was pretty adamant.

Our daughter, Adeline, was taken care of for college. Absolutely, absolutely. You put $10,000 in, and you can set another $10,000 aside to add to it in January. And as young as the child is, if it's invested in good mutual funds, that $20,000 might grow to take care of it. That might be enough. You'd have to sit down with your smart investor pro, and then I'd throw the balance at the house.

How much debt did you say you had again? We have 40,000 consumer, roughly. I have two loans up in Canada, so it depends on the conversion rate. We might win, we might lose on this. Okay. So you pay off $40,000 out of $150,000. That leaves us $110,000, and you're making $68,000. So if we set aside $15,000 as an emergency fund, that leaves us $95,000.

If we set aside $20,000 for the $529,000, $10,000 for this year and have the money sitting there for January 1st, put another $10 in, that gets us down to $75. You owe $135 on your house. $130, sorry. $130. And I probably would use some of that money for some fun. And you may want to consider giving some of that $75,000, and then I would throw the balance at the house. All right.

Thank you so much, Dave. We really appreciate what you do. When this money was coming to me, I'm just like, I've got to call Dave and see what he recommends to do. Well, take your time. You're a real task-oriented guy like me, and she's hurting right now. There's nothing that has to figure this out instantly just you take your time i mean you don't want to wait a year but um but you know if it takes you a couple three months for her to get her feet on

the ground i mean this was very sudden um and you know he was young. So that's the way I would look at it. Thanks for the call. Dennis is in Kansas City. Hi, Dennis. How are you? I'm doing fine. I've got a faithful renter who's rented from me for three years, never been late, always paid on time. And their contract is getting ready to come up again.

And I got a notice in the mail that she's filing Chapter 7. They always paid on time, and their contract is getting ready to come up again. And I got a notice in the mail that she's filing Chapter 7. I'm not sure. Do I want to renew? You know, you cannot have a discussion with them to collect, but you can have a discussion with them about whether or not you're going to renew. And so I would just say, okay, what happened here? What's going on?

And do you want to stay? And if so, do you want to renew? You cannot evict them while they're in a chapter 7 until the chapter 7 is dismissed. Okay? Now, it won't last long. It'll last a maximum of 90 days. I suspect there's something else going on that's not going to do with your rent, and what you're

going to hear is that story, and they're going to go, oh no, we can pay the rent, and we're going to stay. And so you probably, they're probably okay, but you, no, we can pay the rent and we're going to stay. And so they're probably okay. But you do need to get the story behind it and find out how they're planning on handling you. You cannot actually try to collect a debt. So be very careful to not try to collect a debt while someone is under a bankruptcy. Because there's an injunction on you from doing that.

That's what that notice that you got says. This is The Dave Ramsey Show. Nicole is with us in Greenville, North Carolina. Hi, Nicole. How are you? Nicole? Check one, two. Alright, I'll come back to her and see if she's there later. Richard is in Jonesboro, Arkansas. Hi, Richard.

Welcome to the Dave Ramsey Show. Hello, sir. Hi. I have a good problem, I guess. I'm 69 years old. I live on $25,000 a year. I've owed no man for 18 years. I live very simply. Okay. I recently, over a period of time, have sold my collection of highly collectible antique motorcycles.

Wow. And after, these are bikes that go through specialty auctions and whatnot. Sure. After the commissions, I had $174,000, and I still got two bikes left to sell. I'm going to keep one, I guess. However, I have no dependents. I have nobody in the world except me. As I said, no bills.

I have no idea what to do with this money. Well, I'm not going to say I have no use for it. But I got out of my 53-year hobby because I just got too old and whatnot. Sounds like it was a wonderful collection. Oh, it was. Must have been world class. That's quite a ticket. Well, I've been collecting certain bikes for over 40 years. And I was a machinist.

Thank you, U.S. Coast Guard, for making me a machinist. Thank you U.S. Coast Guard for making me a machinist so long ago. And it's been my hobby since I was a kid. At any rate, they're all gone. And good. Next thing. So you're 69, you're in good health. You're unmarried, and you have no children. I have...

Yes, actually, I have no body. I'm not complaining, but I'm completely alone. I got you. Okay. As I said, I live very simply. I own my own property kind of semi-off the grid down here in the foothills of the Ozarks. As it should be. I'll tell you what, David.

It was the best decision I ever made in my life. I bet. At any rate. So what I would tell you is two things. Number one, as a person who, I kind of go through phases where I'm obsessed with something and I collect it for a while. I don't have a 53 year track record on collecting anything, but I have a wonderful collection of antique water skis.

Um, I'm a gun guy, so I've got a great collection of firearms and so on. So I, I just, I get on a binge you know on different things and i suspect you would get great joy determining something to collect just for fun well i'll tell you what it's not so much a collection but my secondary hobby is model ships and airplanes there you go that's just that's just a hobby though yeah i don't i don't think it takes a lot of money but i just i want to encourage you to re-channel the 53 years of energy into something else that'll give you as much fun or maybe close to as much fun and maybe that's the uh maybe that's the one i don't know i just heard that that you and i are kind of alike in that

regard and and i get joy out of that i mean mean, it's the hunt, you know, hunting down something or finding a part for something or whatever. I enjoy it. It's a treasure hunt. And that's what you're doing now. So that's thing one. Thing two is more basic and philosophical. And there's only three things you can do with money.

You can invest it, you can give it, and you can enjoy it. And I strongly suggest you do all three with this. You give some of it, you invest some of it, and you enjoy some of it. And you can decide what some of it means, percentage-wise. But I would have a very distinct thing and say, alright, I'm going to blow some money. Because you're not a guy who blows money ever. And it'd be fun for it. Maybe there's a place you've always wanted to travel to, but you're just too cheap to

book the ticket. Now you've got $174,000. Book the ticket. I don't know. Or maybe it's an item you wanted to buy. I don't care. Enjoy some of the money. Give some of the money.

And give it in a way that's not standoffish. You may just walk up to someone at the gas station and buy tires for a single mom who is sitting there with bald tires on her car. And she's living below the poverty level and you just help her. You can do random stuff like that. It doesn't have to be institutional giving. Like Secret Santa or something? Yeah. Secret Santa is a great deal. I'll tell you. I'll get off in just a second, but I've been in this hobby a long time. And when these things sold, people got here, you want to buy this, you want to buy that, or you want to invest some money in this or that.

And I said, no, I don't. I don't need it. I know. If I had a family, I mean, dependents, I'd be a whole different ballgame. Man, you're 69. You might live up into your 90s. I want you to invest some of it. Well, okay.

Well, you would suggest, okay, I follow your program. Yeah, just get you some mutual funds, something real conservative and something real basic. Get in touch with one of the SmartVestor pros or somebody that you trust and learn about it. And I don't know how much of it to invest. You get to decide that. It's your money. But it's a good exercise to my character to give some, live some, and invest some. Give some, live some, invest some.

And I've taught my kids that from the time they were four, and I plan to do that until I'm pushing up daisies. I always want to give some, I always want to invest some and then you can decide you know who to will it to if you don't end up needing it and as frugal as you are you may not end up needing it but i mean if you needed a hundred grand you you might be laying there you know might something come up and that'd be an okay thing i'm going to send you a copy of my book the legacy journey which is the last book I wrote. And it's all about wealth, which is where you are.

There's a difference in money and wealth. All the other books I've written are about money. And this is the book about wealth. And it talks about some of the legacy-type stuff we're talking about here. So, hey, very neat to talk to you, Richard. Honored to speak with you. Call me again sometime. Nicole is with us in Greenville, North Carolina.

Hi, Nicole. How are you? Hi, Dave. How are you? Better than I deserve. What's up? Thanks for taking my call. Sure.

I called to just get your opinion and some guidance on my next steps in my financial life, as you would. Okay. So right now I'm 25. I just got a great job with the government. I make around $46,000. And I've had a part-time job for the last five years where it brings me a good $12,000 in. So, yeah, that's that.

Now, I'm engaged and I should be getting married around April 23rd of next year. Good for you. We budget about $5,000, you know, nothing too big. And then in addition to that, I have about $2,000 left on my mom's vehicle loan that I bought her a car and about $200 in credit card debt. And the biggest one, about $34,000 in student loans. So I'm looking.

After I get married, of course, the next is the house and then maybe a family. But in addition to that, I'm looking to go back to school to get my doctorate in physical therapy. I just wanted your opinion on what steps should I take. Just open-minded to anything you have to say. Gotcha. Cool. Well, never buy a home with someone you're not married to. So we would not buy a home until after the wedding, but it sounded like that was your

plan anyway. No, yes, exactly. Then what we teach folks to do is to first be debt-free, then secondly, build an emergency fund of three to six months of expenses. We call that the baby step three. At that point, when you're as a couple, 100% debt free, and as a couple, you have an emergency fund of three to six months of expenses. And as a couple, you've saved up your down payment. This is after you're married. Then you would start talking about buying a home. Never take out more than a 15-year mortgage,

and never let that payment be more than a fourth of your take-home pay. And that will set you up to get the home paid off in less than 15 years because there's room in your budget that way, and there's room to build wealth and room to step through all the different processes and things we talk about here. So, Nicole, hold on. I'm going to send you a copy of the book, The Total Money Makeover, which explains those baby steps in great detail.

It's the baby steps on steroids, The Total Money Makeover, and it shows you exactly what to do, when to do it, exactly what the path is, and when not to do things and what not to do with the different steps, and it'll show you how to work this through. So, hey, we appreciate you being a listener. This is The Dave Ramsey Show. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights

and check out Dave's upcoming guests. Head to the app store and download it today.