The Ramsey Show - App - Should I Buy a House or Go to College? (Hour 1)

Episode Date: January 15, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show. And it's where America hangs out to have a conversation about your life and your money. I'm Ken Coleman, Ramsey Personality Host of the Ken Coleman Show, which is part of the Ramsey Solutions Network. And I'm joined by my colleague,amsay personality best selling author host of the chris hogan show on the ramsay solutions network and it's always fun when you and i get together in the dave ramsay show sandbox we're gonna have some fun today big fella oh i agree my friend we are gonna get a chance to give some people some real practical guidance on their

careers uh but we're also going to talk about that wallet, Ken. We're going to talk about what you have to do in this new year because we can't talk about it. 2020 is gone. Thankfully. Yes. Thank you for reminding me. It's gone. And so I have caught myself saying, you know, this year and all the things, 2021 is here.

We have new opportunities ahead. All right. So here's what we're going to do. One of the things we're going to throw out there is some of you out there are listening and you're going, okay, I'm working the baby steps, Ken and Chris. I'm working it. I'm getting there. But I sure could use a bigger shovel, as Dave likes to call it.

And that's more income. And there is a myth for some of you who have wandered over to the Ken Coleman show where we talk about doing what you were created to do in your work. Is the dream job a reality? The answer, of course, is yes. But people go, can I work the baby steps? Can I make steps towards the dream job while paying off debt? And the answer is unequivocally yes. Absolutely. So I want to throw that out there. We're going to talk about your life, your money. We're going to talk about your work. But for those of you that are right now going, okay, I'd like to make some more money. I'd like to actually get promoted, make some more money, which means I can get out of debt and save faster. Yes.

Well, we're going to talk about that. So that phone call, that's welcome. You got money questions. You got life questions. Chris and I are here for you. Here's how you jump in. 888-825-5225. It's a toll-free number.

888-825-5225. Remember, this is your show, America. We're going to start it off in St. Louis, Missouri, where Joe awaits. Joe, how can we help? Hey, gentlemen. Wonderful to speak to you. My question is in regards to HSA investing. I've been with my company for like four years now, and each year they max out our HSA.

And I really haven't used a ton of it, so I've got about 18 grand in there. Oh, that's good. They're kind of sitting there not doing a ton for me. I'm not sure if I can really, how to invest it. I've talked to the bank that holds the money, and their only options are CDs. I wasn't sure if there's another way to go about that. Yeah, you should be able, I mean, and looking at this, you know, you would want to look at it just like you would your 401k funds. So you're looking to be able to utilize those inside of growth stock mutual funds.

And so the CDs, we don't want that. Those are certificates of depreciation. Those things, it's not going to grow. It's not going to give you any growth. You've got a good chunk of money there. So that's what I do. I want you to reach out to your, do you have an investment professional that you're using? I do.

Okay. Take your form in and take the information about your HSA and get connected with them and start to walk that through. You know, typically banks will do that proprietary thing, and that's push their stuff. But the last thing you want to do, now, do you already have an emergency fund in place? Yeah, that's free beside the house, and we're kind of doing a 3D for a new car. Okay, that's good, that's good. And so here's what you do. You go sit down with your investment professional, get that money put into the gross stock mutual funds,

and now that way you know, hey, this money is going to be growing for me. And if we need it, we use it. If we don't, we don't. All right. All right. Wonderful. There it is. Hey, yeah, thank you for the call.

And I really appreciate him reaching out because, Ken, a lot of people, they say, man, I've had this money coming out of my paycheck into the HSA month after month. But if we hadn't used it, what is it? Well, it can become like your medical emergency fund. That's right. Right? And so you think about that. So you set that money aside, and if you're investing it and you don't need it, it's going to continue to grow for you just like your 401K.

Yeah, very good point. I like that, the medical emergency fund. And don't you know, as two dudes who have three kids each, those medical emergencies are absolutely waiting to happen. Oh, they happen. Now, you're a whole lot older than me, but it happens. That is what we call fake news, folks. That is fake news. But, you know, it's like I don't know how much money I put into the coffers

of the Bone and Joint Institute locally. Oh, yeah. Between that, grocery stores. Goodness gracious. Yeah, that's a lot. I like the medical emergency fund. That's really, really good. 888-825-5225.

Let's go to Somerville, South Carolina. Jacob, 15-year-old Jacob joins us, Chris. Jacob, how can we help? Hi. Well, right now I'm only 15, but I have like $3,000 in savings. I'm trying to figure out how to make more money because I make like $7,000 right now from a part-time job. All right. All right.

That's nice. How many hours a week are you working or how many hours over the course of a month? Because I know you're in school. I work like 18 in a week because that's the max I could work right now in school. Look at you, man. Yeah, Jacob, what do you do? I do work at like a restaurant near me. That is fantastic.

Yeah. Do you mind if I ask you what your hourly rate is? Yeah, I make minimum wage at $7.50 in this state. What is it? $7.50. $7.50. Okay, so Jacob, make sure I understand the question. You're looking for some ideas on how you can make more money,

because right now you're maxed out at your 18 hours per week so the the the uh theoretical answer jacob and chris is he needs to get a better job meaning he's going to get a bump from 750 but he's also 15 that's right so it's like where does he find that i would look towards manual labor jobs you know what like maybe in construction and things like that in the trades right where they're going to be willing to pay more money than a restaurant will. I would start there. I'd talk to your parents. I'd talk to everybody you know to say,

hey, I'm looking for a manual labor job that pays more than $7.50 an hour. Somebody who needs a young man who's going to come bust it 18 hours a week. And then the other thing is is that you know i i'd also consider you know is there anything you can do uh that's not so much manual labor but is there any kind of data entry or some things like that that are computer-based if you're comfortable on a computer where companies again are looking they would pay an adult yeah they pay to do some of that work. Hey, Jacob, I'm curious. What are you saving for, buddy? I'm saving for a car right now. Saving for a car.

Okay. How much are you needing in your mind to buy a car? How much are you looking to spend? Like $10,000. $10,000. How much do you have saved? $3,000. All right.

And you want to get this car by when? I'm trying to get it by the end of this year. See, I like this. See, we've got a goal, we've got a time frame, and we've got a number. Hey, Jacob, quick question. On the 18 hours, I understand that's what the legal limit is if you're working. But who's keeping you from going out and scooping poop or raking leaves and cutting lawns? That's your own business, right?

I cut lawns a lot in the summer, yeah, but it's winter right now. So my point is you'll find something where you can work for yourself as well because you're not bound by that. You can go out there and work for neighbors and friends and anybody possible, and they're throwing cash your way, my man. So that would be another idea for you. Yeah, I am very proud of you, young man. Seriously, I mean, at 15 years old, you're motivated.

You have a goal, and you've got a time frame. So many people, Jacob, will say, hey, I want to do X, Y, or Z, but they don't know when they want to do it by. And so you have in that time frame, I like Ken's idea. Get out and hustle. Let people know that you're looking, and just be very smart. There's all kinds of crazy out there that wants your money, Jacob. Let me tell you the story. You laugh when I said scoop and poop, but I read a story on my show two years ago of a young man who bought a fishing boat.

$12,000 fishing boat. By walking around his neighborhood, going to his neighbors, going, look, do you got dogs? I'll come by once a week and scoop up all the doggy do. And they were paying him cash, man. And that guy bought himself a fishing boat. He bought a boat from scooping up some poop. Scooping some doggy do. I like that. I want to know what he made that boat. Where there's a willing some doggy doo. I like that.

I want to know what he made this boat. Where there's a will, there's a way. Don't move. More Dave Ramsey Show coming right up. 2021 is finally here, which means 2020 is over. And now you get to decide how this year goes. Rachel Cruz's new book, Know Yourself, Know Your Money, is also finally here. And this book will help guide you to faster progress with your money, no matter which baby step you're on.

For years, we've taught you that personal finance is 20% head knowledge and 80% behavior. This is the book for helping you grow and control your behavior. Know Yourself, Know Your Money goes beyond the baby steps and gets to the root of your money choices and mistakes. 2020 probably gave you a pretty clear view at what your personal money fears are. This book will help you channel those into a healthy money mindset so you can make 2021 a year worth celebrating. Get your copy of Know Yourself yourself know your money today at the

online store at daveramsey.com or call our Ramsey Solutions World Headquarters in Nashville. So excited that you are joining us today, 888-825-5225. I'm Ken Coleman, joined by my colleague Chris Hogan as we take you through the show today. It is about your life. That means your money, your work. Are you stuck in your career? You can't figure out how to make more money? You got some relationship stuff you want to talk about around that money stuff

because money creates tension. It just does. We're going to take your call. We are here for you. 888-825-5225. Let's go to Chicago, Illinois next where Steven joins us. Steven, how can we help?

Yeah, how's it going, guys? We are having a blast. What's going on with you? Yeah, so I was calling because I'm in a bit of a stuck situation this year because I just turned 29 and I only have my associate's degree right now and I have no debt

and I saved up about $20,000. And I'm not sure what to do next. I'm thinking about either buying a condo or going back to college and finishing my four-year degree. And I was just calling to ask you guys on your opinion. All right, so here's what I always ask when somebody asks me, Chris and Stephen, about should I go to college? So there are two qualifications. Is it the only way, Stephen, to get where you want to go professionally? Is it the best way?

If the answer is no and no, then no, don't go to college. But if the answer is yes on one of those, then yeah, I think it's the right move. Is it the only way? Automatically move. Is it the only way? Automatically yes. Is it the best way? Yes, it is. So the question becomes, are you considering college because you know beyond a shadow of a doubt that it is the only way or the best way to get you qualified to do what you want to do? What's the answer?

I guess I didn't think about it like that. The only thing is the job that I have right now, I'm really not planning to be there for a while, so that's why I was thinking about college. Okay, but here's the deal. I'm fine with you realizing, in fact, I'm glad you've realized that the job you're in right now is not where you want to be because I'm the guy that says, hey, what is it that you were created to do in your work?

We can talk through that if we need to. But the reality is that you've got better things to do with that $20,000. My colleague here can give you lots of good ideas. But until we know, Stephen, that, again, college is the only way or the best way to get that ticket, that qualification to do what you really want to do then hold off on it and now once you find out that you knew do need a college degree then yes sir we want to go through that uh chris thoughts on that he needs to be patient yeah steven i agree ken and and i love that ken walked you through that because steven you what you don't want to do

is go to college because you're bored yeah or go because you think that's the natural next step. So let me ask you this. Do you have any other debt that you owe right now? No, I took out a loan on my 401k, but it's being paid off as I work through it. It's only like $10,000. Stephen, the one hair I have on my head is wiggling and it's standing straight up. Listen to me.

Don't you pull any more money out of that 401k. Don't do it, okay? Because here's the deal. If you lose or leave that job, that money becomes due and payable immediately within 60 to 90 days. So don't have that headache in your life anymore. So I want you to get intentional,

get that thing out of your life and then don't go backwards there. But what I want you to do is really start to think like Ken's book, Ken, you ought to be generous and give this man a copy of your book. I'm going to, I've let you finish. Well, I'm going right now, you hush. Okay, you do it, you do it.

But the reason I say that is, Stephen, Ken's book is literally gonna get you thinking more in depth about your heart and what gets you excited. And I'm telling you, it's going to pave the way for you to start understanding what you can do right now. And that's the thing. So don't spend that money on college just out of habit. Let's put him to the test. Stephen, I do this on the Ken Coleman Show all the time.

All right, Stephen, you ready? Here we go. I want you to answer with your heart, not your head. You ready? All right, Stephen, you ready? Here we go. I want you to answer with your heart, not your head. You ready? All right. What would you do tomorrow if I guaranteed you that you could not fail, but you didn't have to commit the next 30 years of your working life to it? It was a big, fun, professional adventure. What would you try tomorrow?

If I guaranteed you great money and great success, what would you try? I would be a personal trainer. I like to make good money. Wait a second. Now, hold on, Stephen. Do you need a college degree to be a successful personal trainer? No. Let me answer it for you.

I'm not sure about that. No, no, I'm sure. You need a certain amount. So in the state of Illinois, here's your homework assignment. Before you go to bed tonight, I want you to find out what are the state certifications or requirements for you to be a personal trainer. And if it's not a state thing, what are other gyms? What's the national kind of – what's the bar? Steven, that's what we're focused on, man.

That's what we're focused on is becoming qualified to become a personal trainer. And we're going to give you a copy of my book, The Proximity Principle, because The Proximity Principle says in order for Stephen to become a personal trainer, he's got to be around people who are personal trainers. And he's got to be in places where personal trainers are hanging out and where personal training is happening. Making connections and learning the lay of the land, if you will, Stephen. That's what you need to do. Now, bringing us back around to that $20,000

sitting in the account, because Chris, what does he need to do with that $20,000, knowing that he's got a 401k loan he's got to pay off? First and foremost, he's got to get that paid back. So, $10,000 right away. So, it's a matter of trying to talk with your company. Some of those 401k loans will not allow you to pay back in a lump.

So you need to contact, talk to your HR person and find out what the plan is and how you can start to pay that back. And then get that thing paid back, but then build up your emergency fund. So Coleman says this all the time, Stephen, and it is the primary job you're in right now may not be your forever job, but it's the one that's going to get you closer to the one you want. Yeah, the day job. Think of your day job as the platform, the diving board by which you're eventually going to jump into that dream job. And we've got to understand many times that he's in a situation where he knows it's a dead-end situation. He doesn't want to go. But he's got it, and he's got it, and he's bringing in money.

And so he's going to have to figure out paying off that loan. Yep. And then he goes, all right, I still got some cash left over. I can tell you this. He's going to have plenty left over to be able to get qualified, certified as a personal trainer. Now what he does is he goes, all right, I'm going to get qualified, so I've got that in my back pocket.

Now I'm out there using the proximity principle, and I'm making connections to where somebody goes, oh, hey, Steven's a great great guy and we need a trainer over here and he starts doing or he might find that i want to do it myself and so he's going to do it as a side hustle he's still got the day job that's the thing i was doing 15 to 20 hours a week training and he starts pocketing that cash that's right it's not that he had to put it on hold and couldn't do it okay ask me the questions you ask him again. What were the three questions you asked? What would you do if you had money?

Go. So what would you do if you knew you could not fail? I guaranteed you financial and professional success. Okay. And so it's this fun adventure, but you don't have to commit to it the rest of your life. Right. That unlocks people's brains because everybody's afraid of making that. Is it the right dream job? Right. Is that kind of thing? It's a fun adventure, but you don't have to commit to it the rest of your life. Right. That unlocks people's brains because everybody's afraid of making that, is it the right dream job?

Right. Is it that kind of thing? It's like, whoa, whoa, whoa. I didn't ask you that. I said, what would you try tomorrow if you got the money you needed and you knew you couldn't fail and you didn't have to commit to it the rest of your life? It takes off all, and you know what it does? Yeah. You saw how quickly he goes from locked up to, oh, man, I mean, you put it be a personal trainer yep that's the answer yeah ding ding ding so what's happening there is when i ask

the question that way chris we're turning people's brains off and we're allowing their heart to answer the question and so the brain is there to protect us right it's well that's fair yeah but in this situation our brain is if we feel any fear or doubt, what does our brain do? Oh, yeah, absolutely. It's protective. It closes off. So I have to remove the fear and the doubt in that silly question. It's a silly question.

It is. It removes the fear and doubt for a moment, and we just go, oh, well, if you take away all of my risk and all of my doubt, well, then I do this. Right. Well, there's your answer. All right. Well, I answered mine. What is it? I put radio host, speaker, and author.

Chris, I've got great news for you. What's that uh you're in your sweet spot that's good you are you sir that is good dream job and i couldn't i couldn't be more proud of you i appreciate that on the commercial break i'm going to sign a book for you but listen people i i'm serious ken's book proximity principle it lays this out and it is not just for young people. It's for any person that you look up and you go, is this where I want to be? And so grab a copy of Ken's book again, Proximity Principle. Go to KenColeman.com. Pick it up today. Check this out.

At KenColeman.com, you can get all three formats, Chris, because I'm a man of the people. You get all three formats for one price. That's the e-book, the hard copy with my signature in it. But you didn't do an audio book. I did. Did you? Yeah. And my voice isn't as deep as yours, but it is quite melodious. All three. So they can get the audio book as well. All three formats,

one price. KenColeman.com. Thanks to Papa Dave. Hey, don't move, folks. We're just getting warmed up. The Dave Randi Show continues right after this. Over the years, I've heard countless horror stories from listeners about being harassed by debt collectors, receiving calls at work on their cell phones, and some even getting yelled at and threatened. That is not okay. There are laws against this, and there are people, attorneys, that can help make this stop if they are in fact breaking the law. Go to collectionbully.com

to learn more. Fill out a quick questionnaire that will identify if you are a victim of this type of illegal harassment. That's collectionbully.com. Welcome back, America. You're listening to The Dave Ramsey Show. I'm Ken Coleman, joined by my colleague Chris Hogan, as we answer your questions about life, your work, your money. 888-825-5225 is the toll-free number to jump in. 888-825-5225 is the toll-free number to jump in. 888-825-5225. Chris, one of the things you and I both know is homeowners insurance can be one of those things that you set it and forget it.

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888-825-5225 is the number to jump in on the conversation with Chris and I. And we're going to go to Oklahoma City, Oklahoma, where Amanda is on the line. Amanda, how can we help? Hi. I am wondering if I should refinance my home. So we just purchased our home. We built it in May of last year and we got an interest rate of 3.5% at a 30-year fixed. And we're trying to figure out because current interest rates are a lot cheaper right now for about 2.5%.

And we're trying to figure out if we should refinance for 2.5% on a 30-year or if we should pay off the rest of our debt and then refinance for a 15-year. All right. So tell me this. What's your household income? About $240,000. Okay. And what other debts do you all have right now? It's a total of about $33,000. We have about $12,000 still left in student loans, about $3,000 left on a credit card. We have about $10,000 on a car and about $8,000 on a personal loan. Okay, got you. You guys, have you had this 240 income for a while? Well, sort of, yeah.

I mean, we've had it for about two to three years. We really just got it. I got a new position, and I got on a big Dave Ramsey kick, and I've been binge listening on your podcast. No, that's good. And the reason why I say that is because your income, you guys have a strong income. Yeah, I know. It's ridiculous. And what you don't want to have are these little things that suck away from it, Amanda. And the credit card

the car and the personal loan those are all signs to me of people that may be above their their living or we're financing life before it increased does that make sense okay all right no and i and we sat down and we were both like i i don't know where this is all going this is ridiculous we have to fix this and so that's what the biggest motivator is and we already have our emergency fund of you know our thousand our $1,000. And we've already paid off over $10,000 in credit card debt. And so because we put a lot of our house when we built our house on credit cards and it's already paid off. Okay.

So you were using credit cards for the building of home. Okay. Well, some of it, yes. We already, we put over 20% down on our house. We did pay cash for that. Okay, yes. We put over 20% down on our house. We did pay cash for that. Okay, good. And so instead of financing a lot of lighting and everything into the mortgage, we just put it on the credit card and then we just paid it off. That way we wouldn't finance

it over 30 years. We just did a short temporary finance on the credit card and then paid it off. Okay. Well, in answering your question and taking a look at kind of where you guys are, being able to go from a three and a half interest rate to two and a half is great. But guess what term I want you to do? At 15 years. Yeah, seriously. Because as you do this, and I know, Amanda, you are a smart gal. You and I know the most obvious difference between a 30 and a 15 is 15 years.

But it's the hundreds of thousands in interest, the tens of thousands that it saves you. So you guys looking at your budget, tightening it down, go ahead and get a quote on that 15 year. I love the fact that you're doing it because, again, you've got a rate of change of 1% or more. I'm never going to have you refi just to refi, but being able to change your rate that low and shifting to a 15, it can be a game changer for you all. All right. Thank you so much for the call. 888-825-5225. Let's go to San Diego, California, where Heather joins us.

Heather, how can we help? Hey, I have kind of an unpredictable. Hey, Heather. Heather, we're having a hard time hearing you. Let's see if we can get you to move that phone closer to your mouth. Let's try that again. Is that any better? Not really.

Tell you what. Try us back. Yeah, try us back. I'm going to give you back to Zach there. He'll help you out. We'll see if we can get you a better connection. Yehuda is in Baltimore, Maryland. How can we help?

Hey, Ken. Hey, Chris. How's it going? Hey, Ken. Hey, Chris. How's it going? We are having a blast. What's going on with you, sir? So, first of all, Ken, huge fan, talks to me, principles, literally the playbook of my life. Oh, awesome. My wife, too.

Thank you. Chris, you help me keep the vision, so I love you guys, and I appreciate everything you're doing. Well, I appreciate it. Thank you. I'm currently in the personal financial coaching master training right now with Ramsey Solutions, and it is

out of this world. And I met with a couple last night, and this guy, he's a real estate agent, and he does a little investing and splitting houses, and he uses a credit card for his business, and he understands, oh, don't get into debt, it's not a good thing. And they're building their way up. But I want to give him a good, solid explanation as to why to not use a credit card for business. Because he says,

oh, well, I'm spending all that money at Home Depot anyways. It's just wood. It's not like I'm spending more money in groceries at the store. It's a totally different thing. And I feel like I have sort of an answer, but I really want to get your point on this. You know what? I appreciate this, and I like that you're asking the question. Here's the reality. At the end of the day, he is going to do whatever it is he wants to do. And that's his choice.

But here's what the reality is. 96% of people don't pay off their credit cards each month. Okay, 96%. So that's the next thing. And again, having done the largest study of millionaires that's ever been done, talking over 10,000, they don't use them. So it's not a habit or a tool of people who are trying to build true wealth. It's more of the habit of people that are trying to live, want to be rich. And so here's the deal.

Don't try to convince him. No, no, no, no. What you do is state the facts, lay out your reasoning, but let him make his choices. He gets to figure that out. It's like people that want to worship at the FICO score. When I figured out exactly what the FICO score represented, I had this aha. I went, oh, this is not an indication of how well you're doing with money. This is all about debt, right?

That light bulb went off for me. And when I started to, at first, I was trying to make people drink the Kool-Aid. I really was. I was like, listen here. You've got to listen to me. You've got to hear me. And the people would just listen because for 30 or 40 years of their life,

they had been worshiping at the FICO score like I had been doing prior to being converted to seeing the reality. So here's what we've got to do. Give people the grace and the space to walk their walk. What we're going to do is speak truth, but he doesn't

have to get rid of his credit card to be able to is speak truth. But he doesn't have to get rid of his credit card to be able to listen to your principles. He doesn't have to cut it up that day. But I'm going to tell you, when you plant that seed and you keep watering it and watering it and telling people about the truth, they'll eventually start to hear you and he'll have his own epiphany one day.

Absolutely. And thank you for being in Financial Coach Master Training. You've got to love it when we meet these men and women who are so passionate. Well, he's just calling in just totally brown-nosing with you, Coleman. What? Proximity Principles, the playbook for my life. Well, you know. Goodness gracious.

If that's brown-nosing, it is effective. Okay? Because I am receiving that compliment. It's a great compliment. I am receiving it because I think it's a darn good book. That's a great book. If you don't know how to get where you want to go, go get it. DaveRamsey.com, KenColman.com, The Proximity Principle.

All right. Fun stuff there. You know, it's interesting that I love the heart of that because, you know, we have a lot of people listening to this show where obviously they started listening for personal reasons. Right. I want to get my money, life. I want financial peace. And so they start walking through the baby steps and maybe they become coordinators or maybe they go to the next step

and go to our training to be a financial coach. And they kind of go, hey, what do we say here on this? Because we've told them everything we've learned. We've told them everything you've got to say on the Dave Ramsey show, but they're just not quite getting it. It's really fun to see that passion and conviction, but you make a very good point.

Listen, don't beat people over the head with it. Just keep sharing the truth. That's right. Showing the love, shining the light, and when they're ready and when they need it most, they'll get it. That's right. So don't get all hung up on it. Just keep being who you're being.

All right. We're going to keep doing what we do and being who we are. And that's going to continue here on The Dave Ramsey Show. You're listening to The Dave Ramsey Show. I'm Ken Coleman, joined by my colleague Chris Hogan. And we are here taking your questions about life, money, working on purpose, getting that bigger shovel so you can get out of debt faster and save money faster. 888-825-5225 is the phone number to jump in.

It is your show, America. 888-825-5225 is the phone number to jump in. It is your show, America. 888-825-5225. Let's go to San Diego, California, where Heather is joining us. Heather, how can we help? Hey, so I have a predicament with my car. I bought a new car, regrettably. My last car was totaled, and I'm about to lose it. I'm like four months behind, and the only reason why it hasn't been repaid yet is because they can't find me because I'm out of town.

Okay. I'm not sure what to do because the Cali Blue Book says that I would get, for private sale, I'd get about $2,500 less than what I owe on it. How much do you owe on this car? A little under $16,000. Okay. And tell me this. Why are you four months behind? What happened?

I haven't been able to get regular. I'm a photographer in San Diego diego i've been in san diego i actually live in a different state but i've been in san diego since august okay we're on lockdown so i haven't been allowed to work okay all right so here's here's the reality heather of what's got to happen you have got to reach out to this creditor and you've got to communicate okay because right now what you're feeling is like you feel like a hostage to happen, you have got to reach out to this creditor and you've got to communicate. Okay. Because right now what you're feeling is like you feel like a hostage. You, you, you're feeling like you're on the run, like Bonnie and Clyde or something.

Listen, contact them. If you're four months behind, yeah, they are, they are looking for it because even if you can't pay, you can pay attention. Let me say that again. Even if you can't afford to make a payment, you can pay attention. Get on the phone right now with that creditor, contact them, let them know the situation of what's happened.

You're not the only one, okay, that's been in lockdown or hadn't been able to find some work. But I want you to communicate this with them so they can document the account. And now, instead of being opposite, opposing each other, you can get on the same side of the table and work with them to figure out how to resolve this car situation. And so if you can't make the payment, they're going to need the vehicle.

Here's the thing. I want you to work with them to either A, get it sold or for you to voluntarily turn it in. But we got to talk about what's going to happen with the deficiency balance. And what I mean by that is if you owe just over $16,000, they're going to sell it at an auction for $5,000. Then they're going to come after you for $11,000. So communicate with them, ask them to document the account, and gain agreement on the plan of action. I'm going to add one other thing to that, and that is, Heather, the next phone call you make after what chris just told you to do you need to start calling everybody you know yeah and if you can't take pictures right now i get that but just because you can't do your main line of work because of the

covid restrictions in in california doesn't mean that you cannot work and i know it's not fun and i'm not judging you but i am challenging you that you need to get to work and and when you make that phone call you need to say look here's what's happened but I am now going to do one two three jobs and I'm going to work out something with you all but they got to know that you're actually going to make an effort to get this thing right sized and the way you do that is by getting to work I don't care if you've got a nanny, if you've got to deliver pizzas, you've got to drive delivery anywhere and everywhere you can. My point is, get some money coming in. That's right.

Even if it's not anywhere close to photography, you need some momentum in your life. Well, Ken, what happens is, as I tell people, once you start making some money, A, you're going to feel better about yourself. That's right. And it's always easier to find another job when you got one. That's the truth. Yeah. Absolutely right. Heather, call them today.

Seriously, don't hide anymore. And just own it. When you call them, you say, listen, right out of the gate, I want to apologize. I have not communicated well with you all. I dropped the ball. I'm sorry. And what you do is you kind of just take that off the table so you all. I dropped the ball. I'm sorry. And what you do is you kind of just take that off the table so you're not having to feel that.

And now you can start to communicate with them about what to do. That's right. Sarah is up next in Portland, Oregon. Sarah, how can we help? Hi. Thanks so much for taking my call. You bet. What's going on?

So I'm kind of going to – I don't know how you would classify this, but I'm 29, I'm single, no kids, not married. And I am, I guess I'm between baby step four and five. Great. I do about 20% in retirement, no debt. And I just, I have a question about savings. So a few like future things that I've been thinking about is I'd love to buy a house someday. Right now, my rent is pretty cheap and I live with friends. So I've been enjoying that. So I would like to save for a house. I have about, my car is paid off. I have about maybe five years left on that car before it completely dies. So I want to start saving for a car and then kind of leap of faith, but I'm not dating anyone, but would love to start saving for a wedding someday. So my question is, how do you kind of save for multiple things?

Do you put it all in one account? Do you try to put things up? That's a good question, Sarah. Well, what it is, is you're goal-oriented, which is fantastic. Now, I want you to apologize to your vehicle, okay? Don't you put that evil on your car and tell it it's only got five years left. Your car heard you, okay? Your car heard you. But here's, I love your goal-orientedness. What I would do is this. Back down your investing to 15%, okay? The additional 5%, I want you to put it over in your money market account where your emergency fund money is sitting. And what you're going to do, you know how much in there is the emergency fund, right?

And then you start adding to that. And inside of that, as you put that money in, you're saving for home down payment or car repair, whichever happens first. But the main thing is you've got money in there. So you can do it in one account. There's no reason to open up five or six different money market accounts. Just have your regular one. You know that X amount in there is the emergency fund. The amount over that is for home down payment, car, wedding, et cetera.

Yeah, I love that. I love it. She's on top of it. But great job. But yeah, back that retirement down. Back that retirement investing down. That's going to help you make progress for saving for a house. Yeah, she's a goal-oriented young lady.

She's making stuff happen. Yeah. Yeah. She's not waiting. Really great. She's not waiting. Yeah, I love that. That's good.

I really like that. Because it's interesting, though, what you said about the car. You know what I mean? Well, you don't know if that car is going to die in five years. Yeah. Don't put that on your car. You take good care of it. I think what she meant to say was, I think I'm going to break up with this car.

That's right. That's what it is. I think five more years, I might want to break up with this car. It's not you. It's me. I said that for about eight years and kept driving the car. You know why? Because I didn't want to part ways with the money.

I just wanted to keep going. Yeah, it's real easy to hang on to that car. Oh, it is. And you can talk good. And I duct taped that car and drove it like a skateboard if I had to. But I wasn't going to part with that money. But finally, I had to. Oh, it's so funny.

It is fun. I love it. Here's what's interesting on the big savings goals. So what people need to understand is you've got that big savings account, that money market account. It's called a spreadsheet. You don't have to have multiple accounts. Just go in and you go, here, I know what my emergency fund is. And then, okay, I'm going to start saving for the car, and I'm going to put X amount of money in, so I'm keeping tabs with that.

And so I've got a handy little spreadsheet, and it just very easily shows me how much is in there and what it's for. Yeah. No, you really can. And it's a good simplified way just to be in control. And it's great. You can do this. You really and truly can. And I want to encourage people out there.

I had a little lady roll up on me once, Ken, and told me, Chris Hogan, you and Dave Ramsey don't want anybody to have no stuff. She had attitude, Ken. She really did. And I thought she was cute as a button. And I said, no, man, that's not true. I said, here, I want you to have nice stuff. I just don't want stuff to have you. And when you have stuff and it's attached to debt, it's the stuff that has you.

So have nice things, but save up, pay cash for it. We've got to get in that habit of paying cash for small, medium, and large things. Yeah, and part of that deal is it's agonizing. It's agonizing to save because you've got your eye on something that you desire. Think about it. There's a lot of emotion attached to a big-ticket item that you're saving for. So it plays games with us. Think about this, the psychological and the emotional. You go, oh my gosh, I'm really, really excited about this. I really plays games with us. Think about this. The psychological and the emotional. Because you go, oh my gosh,

I'm really, really excited about this. I really, really want this. And I see everybody else goes into debt for this and they got it right now. I've got to wait this long. It's going to take me this long to be disciplined and safe. And there's where we get in trouble. That's right. So it's like you've got to understand that the battle you're going

in to save, it's a battle. And it's worth it. With your emotions, it is always worth it. It's totally worth it. Absolutely. Hey, I want to thank our producer, James Child, and our associate producer, Kelly Daniel, but most of all, my good pal, Chris Hogan, and you, America.

Thank you for joining us. This is The Dave Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.