The Ramsey Show - App - Should I Change the Debt Snowball if a Debt Is 0% Interest? (Hour 1)

Episode Date: December 10, 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. Anthony O'Neill, Ramsey personality, number one best-selling author, is my co-host today as we answer your questions about your life and your money. Open phones at 888-825-5225. That's 888-825-5225. Elias is starting off this hour in Burlington, Vermont.

Hey, Elias, how are you? Hey, Dave, it's great to talk to you. How are you doing? Better than I deserve. How can we help? So I have a question about Baby Step 2. My wife and I have been on the Baby Steps for about a year now. We started with roughly $64,000 in debt, and we've paid it down to about $30,000 at this point in a year, which we're pretty excited about.

Good. We're looking to the future. My wife, we make about, our household income is about probably $84,000 a year. In the spring of 2022, my wife is going to graduate nursing school and significantly increase our household income to probably around $130,000 or so. So we're trying to plan this out, and we've kind of hit something to consider with my 6-year-old son and in the school district that we're in.

The problem is that when he, in two years' time, he'll move to an intermediate school, and I'm familiar with some of the issues in the school. I'm a police officer here in our community, and I really want to – we really don't want to send our son to that school. So my question is, do you think – what I'm trying to balance is our financial goal and the goal I have of obviously raising our kids right and not wanting to put them through bad experiences. So what we're looking to do is by this coming spring,

we'll probably only have one student loan left. That's going to be about $18,000. And instead of continuing the snowball and paying on the $18,000 loan, start saving up for a down payment on another house. We currently live in a two-unit house and we want to keep that house when we the snowball and paying on the $18,000 loan, start saving up for a down payment on another house. We currently live in a two-unit house, and we want to keep that house when we move out of it as a rental income and purchase a second home. You have too many goals. You have too many competing goals.

You need to sell the house that you live in and move to the school district. Yeah. And rent. Yeah. Okay. And rent. before he goes there but that also is not this spring it's the next spring yeah right with thirty thousand dollars in debt you're you're debt free before you move absolutely and if your house doesn't sell for

enough of a down payment to buy over there then you rent over there. I did that. Okay. But you're trying to do too many things at one time. You're trying to keep a rental property that you can't afford, and you're trying to move before you need to move. Now, let's say you sell the house. I'm sorry? Let's say you sell the house.

How much is it worth? The house is currently appraised around $138 we will owe about 120 on it okay she got virtually no equity no okay correct so you're probably renting when you move then okay i'm guessing the the other school district with the better schools is more expensive that would be my guess uh That actually is incorrect. We currently live in a city where the taxes are significantly higher. And if we were to move out to a more rural area, it would be quite a bit less

to live out there. And that's a school system that you prefer. Okay, excellent. That's great. That's great. Well, I mean, then, here's the thing.

If I didn't misunderstand you, 12 months from today, you should be debt-free. You've already paid off $30. You've only got $30 to go. Right. If we were to continue on the snowball, probably, yes, this time next year would be debt-free. If you keep on the same pace you're on, then the following spring is still a year and some change before you have to move due to his school.

Is that right? Right. He would start to school school. Is that right? Right. He would start to school in the fall of 2022. Yeah. And so, yeah, one year from this spring. Yeah. So you'd still, okay, you're debt-free one year from today. Nine months later, you want him in that school system, right?

Correct. Okay. Yeah. Well, you sell, and if you don't have enough of a down payment to buy out there you go ahead and rent out there yeah i'm going to say rent because here's why too let's also keep in mind you're going to go up about 30 to 40 grand in the next year as well in income yeah so that's a good point yeah so by the time your your son gets into that school you will be in a position to where you can purchase if you you get out of debt, get your three bucks aside.

She's going to be starting her income in summer of 2022, right before he goes to that school, right? Yes, she's in nursing school. She's on a contract with the hospital she works at. So you're going to be, if you move in that summer, in time for him to go to school, and with her new income, you're best positioned to buy at that point because you have her income what anthony's saying is right to add to that but just don't don't try to keep the other house that's what's throwing a wrench in the whole thing right i think that's so i my i would like to have a like a secondary income like a rental

property that we can yeah but it's not paid for and and you have so much debt on it, it's not really going to cash flow. Right. You're right. So it's not really a secondary income. It's called a hassle. Okay. Let the thing go, man. Look, you had your priorities perfectly straight.

Get out of debt for the good of your family. Move for the good of your son. This buying rental property thing is a good idea, but it's way down the list of crap for you to be worrying about. Get there later. Yeah, and here's the thing, too, I recommend. Sit down with your wife, and like Dave was saying, come up with the priorities and stick to those priorities over the next few years. Nothing wrong with dreaming, but let's go ahead and handle the foundation first. Once we get that situated, then let's talk to the to the wife all right what's the next step from there and before i honestly buy an

extra rental property i'm looking at okay how can i invest into a 401k how can i invest into a raw how do you get your home paid off right you know how to get your home paid off before you start buying rentals yes yeah so rentals take the rental off the table for now get there later when you've got some wealth and for now let's get get the kid in the table for now. Get there later when you've got some wealth. And for now, let's get the kid in the right school system and get mama to work. And all of that lines up about the same time, that summer of 2022. And by then, you will have had six months to save and get your home on the market and get it sold. And then roll out there in June, July, August into that other school district somewhere in there about the time she lands her new income.

And either buy or rent at that point because you will have saved. I mean, if you can pay off $30,000 a year, you can save $15,000 in six months or $20,000 because you don't have any debt anymore. And so, yeah, you could really pour on the coals on that and get what little equity you've got out of yours when it sells net of expenses you got a little equity but expenses are going to eat up most of it so uh yeah you could walk in there with a thirty thousand forty thousand dollars in your pocket um and hold some of that as your emergency fund baby step three and then make a purchase probably in august that's what i was thinking. That's what it looks like. So August of 2022. But that's, you know, all it was, you really had a good, you know, a good framework for your decision.

You just need to cut some slack off. You know, Earl Nightingale used to say, the problem with goals is not what we're willing to do to hit them. It's what we're willing to give up to hit them. There you go. And cut the rental property loose so you can hit the other more important priorities here. This is the Dave Ramsey Show. Life sure has a lot of twists and turns. Unlike a roller coaster, we never know what's around the bend. The same can be true with unanticipated medical bills.

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over $5 billion in each other's medical bills for nearly 40 years. To see if CHM is right for you, visit online at chministries.org budget. That's chministries.org budget. Anthony O'Neill Ramsey personality is my co-host today open phones at 888-825-5225 you know when folks do their debt-free screams we always ask them who their cheerleaders were who was saying good things because there's's always somebody who's got something negative to say, right? But you've got to identify the cheerleaders. Anytime you make a big change, the hardest part is staying motivated. If you're getting ready to make a serious progress on your debt, you need motivation to make it happen, well, don't do it alone.

Join Ramsey Plus, and we'll take you through the step-by-step money plan with folks who get out of debt, and you're going to be walking right beside people just like you doing the same thing. And since our most popular class, Financial Peace University, is part of Ramsey Plus, you'll connect directly with people who can hold you accountable, so you stick to the plan and stay away from stupid. As a Ramsey Plus member, you also get the tools and practical tips to pay off your debt super fast including every dollar syncing up with your bank and

everything you can get out of debt and you can have a life join financial peace university become a member of ramsey plus start a free trial if you want to just check it out tie it type in free and text it to 33 7 8 9 type in free and text oh no it's not free it's join it's a free trial duh dave okay text in join to 33 789 and then you get a free trial and read the copy boy come on son all right open phones at 888-825-5225 marianne is in bethesda maryland hi marianne how are you hi dave doing well thanks how are you better than i deserve how can i help great great thank you for taking my call i'm calling because i uh recently discovered your baby steps, and I've got steps one through three covered, and I'd like to adjust my retirement contribution. Right now, I'm doing 7%, 4% in a Roth 401k, 3% in a traditional 401k. I currently have $120,000 in a traditional IRA, which was a rollover from a previous employee, employer 401k. And so right now I'm doing 7%. I'd like to increase it to 15%.

I would like your guidance on should I adjust what I'm doing to make all of the contributions into a Roth? Yes. Or should I? Yes, I would put all future into the Roth. If you move anything else into the Roth, it's going to cause taxes right now. We don't want to do that today. Right. But you do want this point forward to be tax-free growth.

Now, the matching portion is never in the tax-free side. It's always in the traditional side. Your old traditional, is it invested in good mutual funds that are performing well? It is. It's pretty well. And I have it fairly aggressive. I'm 35, so I have a good timeline. Good. Yeah, you do. You got plenty of time. And that timeline also ensures that she needs to do Roth. Yes, yes, absolutely. And Mary, let me ask you this question, too. How much is your match on the Roth right now? 6%.

Okay. And then do you have anything invested into, like, a Roth IRA? Well, so I have a Roth IRA, I guess, that currently has $120,000 in it. I'm not contributing to it. Oh, that's not a traditional? I guess that currently has 120,000 in it. I'm not contributing. Oh, that's not a traditional. It,

it, it, so the 120,000 is a traditional IRA. Okay. Okay. Um, and it, it, it came from a rollover.

Um, and then what I currently have at my employer is I'm contributing 4% of my income to a Roth 401k and 3% to a regular 401k. Yeah, if that's all Roth in your 401k, that's fine. Yeah. But the rule of thumb, Anthony, is leaning towards is you get the match first, then you do some kind of Roth. As long as your 401k has good options, I would just do it there.

And if that gets you to 15% with your putting in 15%, that gets you where we think you ought to be and you're heading the right way. Absolutely. Very good stuff. Open phones at 888-825-5225. Lindsay is with us in Huntsville. Hi, Lindsay. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you. So my question is, due to your plan, we paid off all of our debt, sold a random property, and we have an extra $42,000 that we're trying to decide what to do with it. I've got four kids. They're 12, 10, 8, and 4, and I kind of ran the numbers for what we would expect for college, and they were pretty high. So we're kind of debating. We have a small business. It's a storage facility. And the more money we put in, the more money we make. So we're kind of just wondering if we should earmark that for college or kind of invest that right now and start making extra income off that or kind of what our next step should be. So clearly, Lindsay, you all are already through Baby Steps 1 through 3, correct?

So we have everything paid off and a fully funded emergency fund. And you're already putting 15% away, right? That's correct. Also, yes. Okay. All right. And so how much do you think you will need for their college? You say, you say you already did some research. Yeah. So if we would pay, um, my estimates were, if we would pay three fourths of their tuition and kind of housing, um, the first seven years of my big three kids getting through college, it would be $157,000, and that would be an in-state school. That's good. That's good. And, you know, our one theory was if we build a business,

it grows faster than we can even keep up with it. So if we grow it really fast, our income will be higher, and then we can even keep up with it. So if we grow up really fast, our income will be higher, and then we can cash flow college or kind of start earmarking some money for college. I'm just not sure. Here's what I'm going to suggest. I don't have a problem with you. I would suggest you do both. Go ahead and invest into a 529 and still build your business as well. But I would take advantage of the free compound interest over here that will help you get closer to that, especially for your younger ones. Now, your older child, you may have to contribute a little bit more. But by the time you get to your younger kids, the 529 will be able to, as long as you're investing aggressively and you get with the right financial advisor, should be able to take care of your younger child's college experience.

But I say focus on both both but do not choose one over the other what what are you buying or what are you investing in when you do to grow a storage business you're adding units so yeah we're building buildings basically um and i've got we opened it in 2016 so i've got pretty clear projections of kind of where we would be at um with our income the first year my son starts college. Yeah, $42,000 doesn't build a building. So the ones that we do, it would, yeah. We are building some boat and RV shed building. Okay, all right.

So what's it take to build one? So one, if we put in $40,000 for one, we make about uh probably nine hundred dollars a month off of that okay so you can't do both college and forty thousand dollars because you only have forty two thousand dollars what's your household income right uh it's about a hundred a year and the business well my husband's about a 100 and then our business um this year we should make about 27 last year we made about 22 000 okay i'm going to set um a little of this aside towards another storage unit that you add to with cash later and that allows you to do both to follow anthony's suggestion which i do agree with. And so something like put $30,000 across the four kids,

and let's pop $7,500 into each one or $10,000, and you can put a little more in the older one, a little less, all the way down to the four, that kind of a thing. Sit down with your smart investor pro and do that, and then throw something like $10,000 or $12,000 over towards the next storage unit. But you can't do a storage unit. And I don't want all of your kids' college bet on this one storage unit, which is what we're doing.

So I'm with Anthony. I think a little diversification here is in order. 30K, something like that, towards the kids, and then maybe 10 or 12, somewhere in there. Figure that out when you sit down with your SmartVisitor Pro exactly what you can do. And let's just get started because something happens when you kind of get the momentum started towards college that's positive in your overall plan and uh i really like that i love the entrepreneurial spirit i love what you're doing with this business too so the whole everything's

bright in this picture you guys are smart you're doing really really well very good job and your kids are going to say thank you mom and dad 15 years from now yeah well and you know and they're gonna have a nice little business there that's gonna be great this is the dave ramsey show Thank you. Anthony O'Neill Ramsey, is my co-host today. Anton and Tasha are with us on the debt-free stage in the Ramsey Solutions Lobby. Hey, guys, how are you? We're great. Doing good.

Welcome, welcome. Good to have you guys. Thank you. Where do you live? Just outside of Chicago, Plainfield, Illinois. Welcome to Nashville. Thank you. Good to have you visit. And all the way here to do a debt-free scream.

How much have you paid off? $138,000. All right. Good to have you visit. And all the way here to do a debt-free scream. How much have you paid off? $138,000. All right. How long did this take? A long time. Eight years. Eight years. All right.

And your range of income during that time? We started about $45,000, and we're about $97,000 now. Very cool. What do you all do for a living? I work at a school. I'm a school administrator. Yep, and I'm a product trainer for a living? I work at a school. I'm a school administrator. Yep, and I'm a product trainer for a corporate credit union.

Okay, perfect. And $138,000 of what kind of debt? A lot of student loan debt. A few cars and some credit card debt as well. Okay. Mostly student loans. I got you. How much are student loans? Just over $100,000.

Okay. So tell us a story. Why did this take eight years? Well, to start a snowball, you need some snow. We didn't have any. So it took us a while to get that going. But, no, we started off just kind of learning. We were day-ish for quite a few years.

We had some friends that had heard about you and were doing your plan and working it and having success. So we're like, well, we can do that. And so we faked it for a couple years until the rug got pulled out from under us even more. So we were double income, no kids. We thought we were doing good. And then what happened? uh yeah in the span of a year he lost his job we moved from across the country and had a baby and heart failure and it was just like all this wow all this um it was an avalanche but not in a good way that kind of

puts everything on hold yes yeah. For quite a while. To say the least. Okay. Right. So how long when you got back on the horse did it take? Because really, there's a period of that eight years that was kind of a break even at best. Well, so that was about two years before we started. Oh.

Yeah. So I mean, it's been a minute. It's been a while. So once we got really going, like I said, that's when we started. We got some help from a job that I, when I went to work for a bank for the first time, I took a pay cut from unemployment to go back to work. So we were digging out there and we had a student loan go into collection and they took our tax return and we were going to

have to pay an extra $350 a month that we didn't have. So my job, thankfully, gave us a grant that kind of dug us out, and as part of that, about a year later, they said, hey, we're going to introduce Financial Peace University for our employees. Wow. We would like to put you through that. Very cool. And so-

That was at a bank. Yeah. Yeah. Okay. Cool. A community bank. Good. Yeah. I mean, a lot of the community you through that. Very cool. That was at a bank. Yeah. A community bank. I mean, a lot of the community banks do that. Exactly. And so we started going through that, and she was very hesitant because I had not proven at that point in time to be trustworthy with that information. She had led. He was gung-ho, and I was gung-no.

I did not want to do it at all. I like that. That's funny. That's good. Because she was doing all the budget and I just got to yell about why we didn't get to spend stuff on fun things. And that doesn't work very well in case you're wondering. Heard the rumor. Yeah.

So when we went through FPU the first week, we were watching the videos at home and I had to drag her into it, get her going. Second week started off the first week. We were watching the videos at home, and I had to drag her into it, get her going. Second week started off the same thing, and that's when the second week was still the personality test and going through the free spirit and nerd. And that was kind of the thing that kind of opened up our world. That she was able to understand why I was the way I was because we're kind of weird in that I'm the free spirit saver. She's more of a nerd spender. And so I didn't understand why at the end of a paycheck, if we got paid on Friday and we had $300 left, why that all couldn't go to debt. I didn't, I didn't understand all of that. So when I'm looking at my bank account at the bank that I can check a hundred times,

cause I'm working at the bank, um, I'm texting her saying, hey, we can throw this at debt. And she's like, no. Like some of that still has to go to rent on the first, you know, and stuff like that. So it was a long, long road from there to get going. So what is the trick? What is the thing that allows you to stick it out for eight years? Man, one of the things that we did is we started coordinating fpu so within a

year of us taking it we coordinated we've coordinated over 30 classes wow and that kept the information fresh for us and every time we coordinated a class we got something else out of it and you know getting the community around us and having people ask questions and we're like, oh, we never thought of that before. Um, it really helped us stake, stay with the process because there were some years it was so discouraging. I was like, we haven't, we felt like we hadn't made any progress at all. And, um, you look back and you see classes. Yeah. That's impressive. It's very, Now you said something I want to go back to. You said throughout those eight years, there were some frustrating years. Yeah. If you don't mind sharing, what was one of the frustrating things about it and had a baby we did that again right in the middle of our eight years which i think extended us another good two years i had heart failure again had to go through heart surgery and so it was that was a time that could become really discouraging and

it's like we made zero progress outside of our minimum payments during those two years and that's like why are we even doing this you know it's so we're never gonna get through this and so we just had to stick with it. The last three years of the eight how much of the 138 was paid? Well this year alone we paid off 30,000 so yeah since January to October is when we did our debt-free scream and when 2020 was so horrible um or seemed that way we just really we were able to buckle in and we're like this is our year we're gonna be done we had said we had set a goal in in december of last year to be debt-free by the end of 2020 and again she's she's the one that does most of the budgeting, does most of the numbers.

So when I said that, she just kind of looked at me and was like, you're nuts. Like, this isn't going to happen. Because the debt snowball app told us it was going to be August of 2021. And I said, well, we're going to figure this out. I don't know what we're going to do, but we're going to figure it out. And so we went through and, you know, as you always say, sell everything on eBay. And so that's what we started doing. Our kids are still here, though.

We didn't tell them. But it started by cleaning out our closets and selling things. And, you know, because when we started the whole process a long time ago, like I said, we just didn't have anything. It wasn't like we had big cars that we owed a ton of money on. We didn't buy a big house that we couldn't afford. We didn't have a lot of material. You had a lot of debt and a small shovel when you started too. It was like a teaspoon. We didn't have anything to get rid of. And so I wish we would have started the eBay thing a long time ago because, you know, for this year, it's been very successful for us with

being able to go out and pick up stuff that people are getting rid of that they're not having garage sales for or whatever. We're buying it for a little and selling it for a lot on eBay. And so that was kind of how we were able to. So you're coordinating 30 different classes. Someone looks at you and says you stuck with it eight years. You're amazing. You paid off one hundred and thirty eight thousand dollars. You're amazing.

What is the secret to getting out of debt? I think it's like what you talk about in your class. It's the tortoise and the hare. The tortoise wins. And so you just have to stick with it, even in the months where it's frustrating, even in the months where you can't meet your snowball because you've had a car repair or you've had a medical bill come in or anything. Just stick with the process because it works. your story is a story of perseverance yeah and we we had to keep going with the blessing because there were some months where if we i mean we never went back

into debt through this whole process we never went backwards but there were a lot of months where we were at zero like our snowball was zero that month and that just means the next month we're going to try to do better yeah let's get the kids in the shot for the debt free screen what are their names and ages we have carrington she's 11 and declan's five all right we got a copy of chris hogan's book for you everyday millionaires it's the next chapter in your story you guys are impressive very very well done so proud of you, heroes. Well done. Alright, it's Anton and Tasha, Carrington and Declan from Chicago.

$138,000 paid off in eight years, making $45,000 to $97,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yay! Yay! Woo-hoo-hoo-hoo! Yeah, yeah, yeah, yeah! Yay! Woo! Woo!

Woo! Yeah, yeah, yeah, yeah! I love it! Anthony O'Neill, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Brittany's in Tampa, Florida. Hi, Brittany. Welcome to the Dave Ramsey Show. Hi, how are you?

Great. How can Anthony I help? So my husband and I are new to your baby steps, and I just have a question, hopefully a quick question. So we have a few credit cards, and I know you say pay off the smallest to largest. I didn't know if it made a difference if one of the bigger credit cards was interest-free and when the interest came in, it was going to be equal

to those small credit cards. So should we start with the biggest in that case? Absolutely not, Brittany. And here's why. I definitely want to be sensitive because you're new to the family. So welcome to the family. Okay. We're going to walk you through this process. But here's the thing. We don't really have a math problem. We have a momentum. Not a momentum problem. We want to get you excited. And so I had the same question when I joined this program about 10 years when I first started

taking the Financial Peace University course. And I was like, man, what do I do? And here's why I want you to line it up from smallest to largest when it comes to the amount. For example, what's your smallest debt right now? About $500. Okay, and what's your largest? The largest is $10,000. $10,000, okay.

And give me the middle. What's your middle one? Probably like $3,000. Okay, $3,000. Okay, cool. And when you see yourself pay off that first $500, you're going to get real excited. You're going to get so excited that you're going to run into the next one. And then you get so excited when you pay that next one off, you're going to be like, I can't be stopped.

Because now you see momentum. You see yourself getting out of debt. And so if you go after the largest interest payment, you know, Brittany, you're not going to see it. And you're going to get discouraged. You're going to say, I can't complete it. So, yes, I want you to start with the smallest one, work the way up. Do not worry about zero interest or interest payment period. David is with us in Fresno, California. Hi, David. Welcome to the Dave Ramsey show. Hi, Dave. It's good to talk to you.

You too, man. What's up? So I'm 21 and I basically just got my thousand dollar emergency fund and that's about it. And I work in construction. I make about 30 grand a year and, uh, I wanted to do some other things with my career, but, uh, it's those options aren't that profitable and the inconsistency of the economy and everything here in California. I'm just trying to focus on this job right now. But I am also wanting to get married in the next probably year or two. And I don't have the best living situation for a married couple. I have a roommate.

The rent is dirt cheap, but I don't know what I would do after I got married, where I need to start, what I need to start looking at saving for. And I don't have any kind of retirement savings or anything like that right now. So I wanted your advice. Have you picked out somebody that would say yes? I believe so, yeah. It's complicated right now. I was like, wow, Dave. He just said he's thinking about it. I know. I didn't know if you had a selection or not. So what does she make?

She makes $15 an hour, but she gets less overtime and less hours, so around $20 maybe 20 maybe okay so you'd have a fifty thousand dollar household income i don't know why you couldn't boot the roommate out in that situation maybe we haven't really worked that out yet i just did i mean if you're living in a one-bedroom apartment in in the fresno area i mean unless you're down in Silicon Valley or something, my God, you know, but I mean, you're going to have to get to an area where you can afford to live on $50,000 if not, because that's very close to the average household income. And if you can't even afford a one-bedroom apartment on the average household income

in America, then you're in the wrong area. You're going to have to move. So, yeah, you're going to have to kick the roommate out when you get married. And there's nothing to keep you from getting engaged and starting to talk about marriage and starting to line up the date. And then obviously upon marriage, you would trade the roommate for a much better looking person. And so I like that. So, yeah. And in the meantime, both of you are working on your careers. And in the meantime, both of you are working on your careers, and in the meantime, both of you are working on your baby steps,

you're working through your debts, and you're getting yourself more and more and more solid up until the wedding day. Rebecca's with us in Rochester, New York. Hi, Rebecca. How are you? I'm good. How are you? Better than I deserve.

What's up? So just to give you a little back story, so back in March, I was jobless because of COVID. I work in restaurant business. Sorry. So I never got unemployment. Couldn't get through, called like thousands of times, couldn't get through. So I kind of just gave up on it.

A few months later, I finally asked my boss if there was some work I could do just to make some money somehow, which fortunately he was able to do that for me. So now I'm out of a job again due to COVID here in Rochester. And the other day I got an email from New York State unemployment for back pay. And I just got a big chunk of money for back pay. And I'm just curious as to if you think i should just pay off my car so i have five thousand dollars left to pay off on my car um when i was working before i just got out of work i was like the zeal intense paying off my car what's the big chunk of money amount to for how much I got from unemployment?

Yeah, that's the only money you have, right? I got, with my $1,000 emergency fund. Okay. So I got $8,000 from unemployment. Okay, but you don't have a job right now. I don't, so that was my question. I don't know if I should just sit on it until I figure out what's going on here, like when we're going to open back up.

Yeah, Rebecca. Or if I should. I love the fact that you're ready to pay off this car, trust me. I can't speak for Dave, but I can speak for me. I want you to pay it off, but right now I want you to sit on that 8K, okay? And here's what I want you to do. I want you to sit on it, and I want you to live. So I don't want you to sit on it and spend it.

No, while you're looking for another job, it's sitting there in your savings account and you're going into it to just live, to take care of your food, take care of your utilities, take care of your housing, taking care of your transportation. Now, as soon as you get a job

and you have consistent income coming in, yes, we're going to go to that bank, whatever's left in there, and we're going to go back and attack our debt snowball. Okay? And so that means everything. That's my only debt.

That's your only debt. So you're going to take that $5,000 and attack that and go from there. But right now, sit on that, budget it a little bit so you can live and survive and stretch. But you should be aggressively looking for another source of income right now. Are you currently doing that? So right now I'm taking this time to finish my real estate salesperson course. I'm about 80% done. Real estate in New York, is that a good option right now

to generate some income immediately? Not immediately. I am doing some side things. I picked up like a ship shopping it's kind of like instacart that um i was about to say didn't new york just shut down new york just shut down all the restaurants from eating uh inside so maybe uber eats door dash you can deliver people since they can't go into the restaurants now you need to try to make enough while you're doing the real estate thing to keep from touching the 8 000,000. Yes. Yeah, that's what I'm doing with the ship shopping right now.

Okay, that's fine. If you can make enough to survive until you get the real estate thing moving, then when it starts moving, then do what Anthony says. Then take $5,000 of the $8,000. But hopefully you haven't touched it at all because you just earned a living some way or another, hook or crook, just piecing together some income just to live and then make your career change permanent. And great idea.

Great idea. Hey, thanks for the call. Open phones at 888-825-5225. It is a free call. You jump in any time you want. Cruz is on Instagram, Anthony. I'm 14. I have $200 saved. What should I do with that money? I want to start investing. Keep saving.

I mean, you know, young people ask me this question all the time, Dave. Like, hey, I want to make a lot of money. I want to be a millionaire. How can I take this $200 or $500 or $5,000 and flip it and turn it into $50,000? The number one investment you can do is save and start investing into your future if you want to go to college young cruise what i'm going to say is hey start looking at your colleges and start saving towards your college all right go to school 100 debt free maybe start a small business at home if you really want to make money but right now keep it in your your savings and start looking into your future and start investing into it that way. Go make some money and add to the savings.

Anthony's exactly right. Don't worry about being an investor at 14 years old. Right now, you need to think about buying a car for cash and going to college for cash. And if you do those things, dude, we would call you highly successful. That puts this hour of the Dave Ramsey show in the books.

This is James Childs, producer of the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.