The Ramsey Show - App - Should I Pause the Baby Steps to Cashflow a Wedding? (Hour 1)

Episode Date: February 11, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. Melanie starts us off in Fayetteville, Arkansas. Hi, Melanie. How are you? Hey, Dave. I'm good. How are you? Better than I deserve. What's up?

So, I just started my total money makeover this month, and I'm on baby step two, and I'm trying to lay out a plan of how to pay off my debt. And I know that the book goes over the debt snowball, but I had a particular question about my car. So I've got $60,000 in unsecured debt, and then I have my car, which I'm about $6,000 upside down in, and I owe $23,000 on it. And the problem is I've only had it for about eight months and it's costing me $500 a month. Now I know that it's not my smallest debt, so it's not what I normally would start with. But of that other debt that I mentioned, the $60,000, I don't currently make any payments on that. It's all stuff that I've tried to ignore and hope that it would just miraculously go away. And so if I could get rid of this car quicker,

I could free up an extra $500 a month to start tackling that debt. What's your household income? About $60,000 a year. Very expensive car. I know. Lots of regret. And you're single? I'm not.

That's our combined income. Oh, okay. All right. And so my understanding, you have two types of debt. Debt that is not active, that you're not paying anything on because it's all old defaulted debt, and then one active debt that is your car. Well, and the stuff I'm not paying on is not yet defaulted. It's student loans that I've just ended up getting deferred and deferred.

And then I have a little bit of debt to the IRS they just haven't collected. And then some debt to my school that I haven't collected yet. So it hasn't hit collections. And so I don't want that to happen. But I feel like the longer I wait to get rid of this car and to get that paid down, I'm just losing money every single month. It's just going to keep depreciating, and I'm just a little terrified of that. Yeah, I think you need to sell the car.

And so how do I quickly pay off the difference? Just seek everything that I can into it? Well, you'd have to borrow the difference. Borrow the difference. Yeah, just go over to the credit union and get a $6 thousand dollar loan because i think this car is killing you um the rule of thumb on cars is you should not have automobiles total things with motors in them period totaling more than half your annual income because things with motors in them go down in value and if you do have less than a half your annual income you should be able to become completely debt free not counting your house while keeping

the car in two years or less otherwise the car needs to go and i'm hearing you're not going to be done in two years right yeah when i when i first started this money makeover a few weeks ago i sat down and i figured um when i bought the car you know i have to pay sales tax and then all the payments i've paid in seven months, I've lost $6,000. Yeah. Yeah, but that's in the rearview mirror. All we can do is look out the front now and say, where are we going, and do we want to, you know, this car is a boat anchor around your neck

while you're trying to do these other things. And so, yeah, I'm going to sell this. Okay, you keep using the word I. That's why I asked if you were single. Is your husband not involved in this? Well, so I manage most all, well, lack of manage most all of our finances. He's interested. He cares.

This is not something that he's really ever been very good at, and so I think he tries to just ignore it and hope that I've got this at this point still. We're trying. Well, that's unfair. Okay, it's unfair to him. It's unfair to you. It's unfair to him because you've not been good at it. It's unfair to you because you're the only one making adult decisions in your house.

So what I want you guys to do is make a change in that. I do not want him to become an administrative nerd. That is your gift and my gift. That's not his, but I do want him to carry the emotional burden of the decision-making with you. So here's how that sounds. You lay out your budget and your plan, and he sits down for at least an hour a month and goes over it with you. And then the two of you together make these decisions and feel the weight of this. Then you simply execute the decisions.

You're just the CFO at that point, just writing the check that the board told you to write, and the board is the committee meeting, you and your husband working together on this. You running over here and doing the best you can and running faster and faster and harder and harder and making all these decisions by yourself, it's causing you to carry all the strain by yourself, and he needs to feel that with you okay so let him again i'm not trying to make him become something he's not as an administrative person or something like that you've got the natural gifting for that like i do at my house but i don't make decisions without sharing i want her to be involved in the decisions i make better decisions, number one.

Number two, I don't get I told you so or I don't get shame or regret how I let my wife down. No, we made the decisions together. If we made a bad decision, we made it together. If we made a good decision, we made it together. And so it changes the dynamic of all of that stuff because what you don't realize because you're just starting all of this is the weight of all of that stuff. Because what you don't realize, because you're just starting all of this, is the weight of all of that stuff is almost as heavy as the debt. Right. And if you can kind of get in the same harness together, pulling together,

even if you're the one writing the checks and going around doing all the, you know, the office work, so to speak, around the execution of the plan, you know, that's fine. We're not trying to turn him into a nerd, but he does need to look at this with you, make your decisions with you, like the selling of the car as an example and how we're going to do that. Okay, so sell the car, number one. Go borrow the $6,000 to do that. Number two, the IRS is first. Okay.

Before you do anything, you get the IRS out of your life. You do not wait on them to come up and hit you in the back of the head. They are dangerous to play with. It's very expensive in failure to file, failure to pay fees, penalties, and then if you ultimately put it on a payment plan, the interest rate is outrageous. So you want those people out of your life immediately, and you need to figure out why you owe the IRS and make sure you're not replicating that problem, that that stops this year so you don't end up with this problem again. But they're first, and then we'll just do the debt snowball after that because you got rid of the car,

we'll list your debts, smallest to largest, driving a hoopty, and we're going to get this mess cleaned up because you've got substantial, debt to clear here and that's why you're feeling the weight of it you're seeing the math your your nature allows you your natural gifting allows you to feel the numbers here and you're feeling the weight of this so what i'm trying to do is clean it out clean it out clean it out let him carry it with you get the irs out of your life because you know they're dangerous and they're just hovering over there it's a monster monster in the closet. They're going to come out and bite you about the time you lay your head on the pillow. You know, you just don't want to do that. You don't want to mess with this. So then let's get the debt snowball going on the rest of these

student loans. Whether you're paying on them or not is not relevant. Just start paying on them and get them cleared off as fast as you can, smallest to largest. It's all about to come home to roost, and it's going to be a problem if you're not addressing it. So I'm really glad you got the Total Money Makeover and got started. And I'm here to help. If you need some more help, you call me. I'll walk you through it again or put him on the phone. I'll talk to him.

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Visit linkedin.com slash Ramsey. That's linkedin.com slash Ramsey. Terms and conditions apply. Dee is with us in New York City. Hi, Dee. How are you? Hey, Dave. Thanks so much for taking my call. Sure.

What's up? Okay, Dave. So here's the thing. I was thinking about selling my house, right? And I have tenants. I have a tenant, a good-paying tenant. No problems there. The thing is that I'm concerned about if I, you know, let her know that I'm selling the house, and then she moves out,

I'm not going to be able to pay the mortgage while the house is on the market. Gotcha. How long does the tenant live there? About seven, eight years. What's the rent? $46650. Dave, this is a crazy, this is a... $4,650 a month? Yes.

Okay, and what is the market rent? If she's been in there a long time, are you charging her full boat, or have you not raised her rent enough? If she left, what would you rent the property for, if you were just going to keep it as a rental? What would it rent for? Probably the same thing now, because right now she has the whole house. It's a two-family, but she has the whole house.

But the question is, if she emptied it out and you re-rented it, you would only be able to get $46.50 for it. I probably could get a little more. How much? How much? Yeah. How much? Maybe $55.

$55. Okay, cool. All right. So here's what I would do, and I have done this, and it's worked very successfully. Sit down, number one, in person with her. Is it just her, a single lady? No, and two kids. Okay, but she's not married. Okay, so I would sit down with her in person. It's very important that you do it in person and say, I am thinking of, the bad news is I'm

thinking of putting this property on the market. The good news is that's going to create a real opportunity for you. And let me tell you what the opportunity is. Okay. Number one, the market rent on this property would be about $5,500. If I keep it, I would have to raise the rent to that. And so you're not going to have to pay that. I'm not going to raise the rent. You got it? Okay. So we just gave her about $900 here.

Right. Okay. That we didn't raise the rent up to market. So market rent is $5,500. I'm not going to raise the rent because you've been so great here. As a matter of fact, I'm actually going to lower the rent. Wow. I'm going to drop the rent from $4,650 to $4,500 if you will agree to help me sell the house. You're going to help me sell the house by doing two things. One, making it very available to the real estate agent to show and not being a problem child about

it. Number two, you're going to keep the house so clean it looks like a model home while you're here. And in return, I'm going to knock $150 off of your rent and I'm not going to raise your rent to market $850. So this is kind of like me paying you $1,000 a month to keep the house clean and accessible while I sell it. And I will give you plenty of notice. I'm not going to put you on the street in three days. You have been a great tenant, and I want to work with you to cause this to happen and not cause you any undue hardship okay all right that sounds like a winner and if they won't do that you need to move them and then what yeah and you're gonna have to figure out you know you

because you can't sell it with them in there, they'll mess up everything for a sale. Yes. Because nobody will be able to see it. They'll get there, and there'll be two dogs in the yard barking, trying to bite somebody. There'll be everything in the world. You know what I'm saying? And when you do go in, there'll be clothes piled in every corner and dirty underwear in the hall and everything else, right? Yes. And you'll never sell it with a tenant that is obstructing you because they can ruin the pie. So you've got to get her to buy in and go, listen, I'm paying you $1,000 a month effectively.

I'm not raising your rent $850. I'm actually lowering it in cash $150. That's $1,000. And if you don't think that's a great deal, and I promise you I will give you at least 30 days' notice or whatever. I mean, you probably got to give her 30 days' notice. She's probably on a month-to-month anyway, right? No, she has a lease. And that's the other thing.

When's the lease up? Coming up to the renewal of the lease in September. Okay. Well, this is the perfect time to have the conversation. Okay. In September, if I keep the house house i'm going to market at 5500 okay i can't move you before september and so you don't need to put the house on the market until you know july okay no sense in putting on the market unless she's willing to break the lease

and intentionally and if you if you want to have the conversation now and go and i want you to allow me to break the lease and you leave with 30 days notice before september if you want to have the conversation now you got to add that as the third thing accessibility cleanliness and in the lease with 30 days notice yeah okay and for that i'll do a thousand dollars if you stay i can promise you in september i'm going to $5,500. Okay. I've done that. I've done this several times with tenants that are high-quality tenants.

I mean, you've got somebody paying $5,000 a month. This is not a bad tenant here. I mean, this is a good person. They make a lot of money. Their rent, for God's sakes, is $5,000 a month. So, you know, I mean, this is not a dumb person you're dealing with. So I think you can sit down and have a civil, kind, great conversation with this kind of a person and a little bit of persuasion involved in letting them know how I laid it out here. And, you know, you're not doing anything illegal.

You're certainly not doing anything uncivil. This will work. And it does work almost every time. All right, Kevin is with us in Orlando. Hi, Kevin. How are you? Good, Dave. How are you doing? Better than I deserve. How can I help?

Good, Dave. Thanks for taking my call. Dave, first, I want to thank you all. About two years ago, my dad died and left my mom a widow, and she needed about five grand to help bury him, and I didn't have five grand. A household income was probably about $115,000. I couldn't scrape up five grand, so it really got me on your program15,000. I couldn't scrape up five grand. So it really got me on your program, and about nine months, I knocked out all my debt. Now, I'm sitting here now. I just opened up. I just got my residential real estate license.

Good for you. Congratulations. Thank you. Thank you. I want to know how to keep this going. I'm not going to get rid of my regular job that I have, but I have nights, I have weekends free, and I want to know about how do I get this thing off the ground. Well, usually you enter this type of market with what's called your natural market,

meaning people that you already know, friends, family, church members, people you work with, whatever. Okay? Okay. And what you've got to do is you have to race in your knowledge level to the point of competence. Okay. You have to really become very competent, and you may even want to tag team with an experienced agent on your first couple of listings first couple of sales and so you've got somebody walking with you to guide you through the process with them so that as a brand new agent you're not making a mistake on behalf of your client okay and but usually where the clients come from when you first start in the residential real estate business is what's called your natural market

and again it's not cold calling. It's not somebody that never heard of you before. It's somebody that already knows you as a good person. They know you as someone who's reliable and someone who's conscientious. And you're the guy who's turned his finances around, and they've watched you do that. And that gives you credibility and so forth. And so then you're going to talk them into letting you sell the first house. And, again, the first house I ever sold, I was 18 years old.

I got my real estate license three weeks after I turned 18. And a guy that was one year ahead of me in high school had bought a house, and I helped him sell it, $42,500 in 1978. I still remember. I still got the commission check I got from sell it. $42,500 in 1978. I still remember. I still got the commission check I got from it, a copy of it, that is. But I certainly, at 18 years old, was too stupid, and my first sale, I was too stupid to do it by myself. And so I had my broker, which at that time was my mother,

was the broker of our company, and she walked me through that sale and made sure I didn't mess this guy up in the process. And we did him a good job, but it wasn't because of me. It was because I had some help. This is the Dave Ramsey Solutions, Tyler and Whitney are with us. Hey, guys, how are you? Doing great. How are you?

Better than I deserve. Welcome. Where do you guys live? Piedmont, Alabama. Fun. Welcome to Nashville. And here to do your debt-free scream. Yes, sir.

Love that. Very good. And how much have you paid off? $82,600. Very good. And how much have you paid off? $82,600. Very good. And how long did that take you? 31 months. Excellent.

And your range of income during that two and a half years? Started at about $75,000, finished up about $176,000, and we're currently at just over $200,000. Wow! Nice jump! What do you guys do for a living? What happened to your income? I'm an assistant plant manager in the chemical industry. And I'm a board-certified family nurse practitioner.

Okay. So I'm guessing, like, you just started doing that nursing thing during this time. Is that what caused that? Yes, yes. I was a registered nurse at the beginning, and then I finished up about a year ago with my nurse practitioner degree. Okay. And so is that where all the income went zoom- or yours jumped up to about 50% from what I was doing before about 35%. And you guys are cruising. That's awesome. Way to go. What kind of debt was the 83,000? We had two vehicles,

Tahoe and a Silverado, a couple of credit cards, about 10,000 student loans. We bought a timeshare, which was like the worst mistake ever, you know, $6,000 on that. And, you know, that $82,600 just adds up a little bit over time. Just, you were just normal. Yeah, pretty much. Just doing like everybody else, just diddy-bopping along, getting in debt. Right. Love it. Love it. What happened 31 months ago that put you on this get out of debt debt free journey so i finished up grad school and she had started back and um the where she was she went to work in part-time which was fine and then the hospital she worked at shut down the labor and delivery unit so we were on an unsustainable trajectory pretty much everything i made

is what it took us to just get by and so we just decided we we can't do this anymore and so we signed up for fpu at church and kind of got started make too much to be this broke pretty much exactly right now highly educated broke people yes that's that's fairly normal man that's what happens out there but there's a little wake-up call a life bump a bump in the road for life gives you a wake-up call yeah absolutely and about that time the church starts teaching Financial Peace University, and you guys jump in. Right. We also wanted kids, so we had a daughter during this time. That's why it took us 31 months.

So for about six months, we just packed everything we could into savings, getting ready for Hattie Grace when she was born. And so she turned a year old just about two weeks ago. Awesome. Very fun. Cool. Well, good for you you guys this is awesomeness proud of you so what do you tell people the key to getting out of debt is you went to financial peace university you pay off 83,031 months what's the magic uh communication and uh and a budget so we didn't she didn't know what i made and i didn't really care that she didn't know what i

made we had separate checking accounts we just didn't communicate we I made, and I didn't really care that she didn't know what I made. We had separate checking accounts. We just didn't communicate. We weren't on a budget. I was an engineer and pretty much had always been able to out-earn my stupidity. And it got to the point where you couldn't do that anymore. And so, you know, we communicate now. We have monthly budget meetings. We do the whole nine yards.

You know, it's made a huge difference in our marriage. I would also say never stop giving. We never stopped tithing the whole time. And even times that came up in the church, we still gave, even though we may not have as much at the end of the month to put down to our debt, but the Lord was more than great to us the whole time. So never stopped giving as well. Amazing. Well done, y'all. Well done. I love that. Those are good principles. so how long have y'all been married almost seven years okay and so two and a half of that you've been doing this so you you were in

there four and a half five years and then all of a sudden now we're going to sit down together we're going to combine the money we're going to combine the income we're going to combine the problem and attack it together that's exactly That first budget meeting must have been interesting. Yeah. I had a fourth-generation spreadsheet for a budget. I mean, I was really into pivot tables and the whole shoot match. It was pretty interesting, to say the least. The first three or four were pretty rough.

Yeah. Had some good fights then. Oh, yes. Yeah. That's real, man, because that's what usually happens. And especially when you've been going along with it, that's separated. And then it's just like a collision more than a meeting. Yeah.

That's cool. But the good news is now you're singing. Now you got it. You hit the lane and you're running down the lane. Everything's going good. Yes. Yes, sir. Very good.

Well done, you guys. Well done. Do you have people cheering you on? Not with us, but we've got a lot at home that are listening. Okay. Did you have people making fun of you along the way? Oh, yes. Yeah, we did.

Not to our face anyway, but I'm sure. A lot of support from family, especially my family. We're really supportive. And so we had a few friends that were kind of laughing at us a pretty good bit. Yeah. Okay. We actually had an opportunity to teach financial peace last um september yes in our church so that was a good experience too yeah that that makes you finish it for sure yes yeah you got you got to play through

when you're leading it would be a good example so yeah absolutely otherwise you're just being a hypocrite yeah that's perfect well done you guys done, you guys. Well done. Proud of you. Thank you. Very good job. We've got a copy of Chris Hogan's retire-inspired book for you. I want that to be the next chapter in your story, which it will be. With these numbers, these are incredible, to be millionaires and continue that giving, that outrageous generosity as you go along.

So very, very well done, you guys. Excellent job. Tyler and Whitney, Gadsden, Alabama area, Piedmont, $83,000 paid off in 31 months, making $75,000, now making $200,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. Love it, love it.

Well done. That's how you knock it out right there. Man, that is fabulous. Great job. Open phones this hour at 888-825-5225. Tamara's in Los Angeles. Hey, Tamara, welcome to the Dave Ramsey Show. Hi, I'm so thrilled to be on the show today. Well, we're honored to have you. How can we help? Thank you. So we sat down and we kind of

planned out all the baby steps the best that we could, and we have a great shovel we're working with, and I just want to make sure that we are going to be able to get to the goals that we want, but we got stuck at seven because we're kind of having a hard time figuring out where the light at the end of the tunnel is and how we're going to get to that last and final step, which I'm also a lover of real estate ever since I was a child. And I would love to purchase a single family home with cash flow. But living in the Southern California area, Los Angeles, you can barely get a beater for $600,000. So how are we going to do this? Because we're 10 years away from that,

or 8 to 10 years away from getting to step number 7. Okay. Before everything's paid off, you're 100% debt-free, it takes you 7 years or 10 years. So I think we'll be maybe anywhere from 7 to 10 years. What's wrong with that? But once we get to number 7, isn't that going to take another 10 years to accrue the wealth to purchase the home?

I don't know. What's your household income? Well, my husband's at $110,000, and I'm at $161,000. Okay. So you're making $300,000 a year, and you have zero debt at that point of any kind. Mm-hmm. How much can you save making $300,000

if you don't have any payments in the world? We will have one big payment, and that's going to be three kids. Hopefully by then we have two now. Private school costs around $1,000 a month. We live in a really bad school neighborhood, I guess you could say, relatively speaking, but our house was cheap, so we bought it, and it's great. So if you're sitting there with a paid for house and you're making three or by then maybe four hundred thousand a year household income

how much can you save a lot probably now that we're getting into that and then what do we do with that you put that in like a mutual fund for five years wait for it to grow then pull it out and cash flow the what i did at that stage is I just threw it in an S&P 500 fund, and I didn't necessarily have to wait five years. I just throw it in there. That's what I do now. If I get some extra money, I throw it in an S&P, and then when I see a piece of real estate, I use some of that money

and just buy me a piece of real estate. Oh, I see. You see, as we were planning this out, I needed to get that final boost to kind of say, all right, we're going to fiercely go at this. But I mean, really, if you're making $400,000 a year and you've got no payments seven, eight years from now, I mean, you ought to be able to save $600,000 every two or three years. Oh, wow. Two to three years.

Well, think about it. I mean, $200,000 a year for three years is $600,000, right? Okay. You're making $400,000. You ought to be able to wander your way into that. I think you're going to be fine. Here's the thing. The average millionaire, the typical millionaire we talk to,

and we've studied a bunch of them, pays off their home in about 10 years. A typical person working this stuff is paying off their home in about seven or eight years. And, uh, which means they're on their way to be a millionaire a little quicker, but that's, that's how this is working. And you're on track. You're fine. You don't have to see all the way through. Thank you for joining us, America. We're glad you're here. Devin is with us in Amarillo, Texas.

Welcome to the Dave Ramsey Show. Thanks, Dave. Appreciate you taking my call. Sure. What's up? Well, my company offers both traditional and Roth 401ks. I have about 360,000 total. About 300,000 of that is in the traditional plan, and the rest is in the Roth plan.

Good. After listening to you, I've actually changed all my future contributions to go to the Roth option. Good. But what my question is, should I move the money from the traditional plan into the Roth? And if so, what are my options for paying the taxes? The only way I would do that is if your home is paid for and if everything else is obviously paid for and you've got some extra money in your pocket to pay taxes with.

How old are you? 33. Oh, yeah. Okay. So you have $300,000 in traditional. So your taxes will be probably like $75,000 or so. All right? Yeah.

Is your house paid off? About halfway. Okay. Let's get the house paid off first. Just let it grow. Okay. Here's the thing it basically is investing mathematically the way it works out is we're turning 300,000 pre-tax into 300,000 tax-free okay so it's it's it's very similar mathematically to investing an additional $75,000, which is the tax bill approximately.

So I would not do that above the 15% of your income going in at Baby Step 4 until you've gotten the home paid off at Baby Step 6. But when you're Baby Step 7 and you're rocking along and you've got an extra $75,000 or whatever the tax bill is going to be, it is a great way to let the let that grow from that point forward tax free and it has the same mathematical effect with your investments as having put an extra 75 000 into your investment plan so you are doing so good man what a great nest egg for your age and and halfway paid off on the house, too. You are killing it. Jack is in Bowling Green, Kentucky.

Hi, Jack. How are you? Howdy, Dave. Thanks for taking my call. Sure. What's up? My wife and me, we are baby step two. I'm almost 50 years old.

I'm already retired from one job, and I've started another job. And I know I've been studying the baby steps, and I'm just wondering if I retire in 10 years. Well, I know you say don't invest in 457s, 401s until you get through the baby steps. Right. My question is just, will I have time in 10 years to save enough money to retire? Well, how much debt have you got? $110,000. On what? have time in 10 years to to save enough money to retire well how much debt have you got uh hundred and ten thousand dollars on what uh i've got uh uh student loans some credit cards i've got a uh a farm that i've that i'm paying for and uh a vehicle okay How much do you owe on the farm?

$18,000. And what do you owe on the vehicle? Oh, and I also have a second mortgage. I'm sorry. Okay. The vehicle's at $5,000. Okay. All right.

So most of this is student loans? No, most of it is the second mortgage. Oh. It's $40,000. What's your household income? About $100,000. My wife and I combine about $140,000. Okay. All right.

So making $140,000, how quick are you going to pay off $110,000? Our goal is three years. I mean, that's what we've kind of shunned for. I would like to do it quicker than that, but that's kind of what our goal is. Okay. So here's the thing. You have a valid concern that I need to have money to retire on. Well, good idea.

You know, hello. You need to do that. So the question then is mathematically, do I start putting money into retirement now and stay in debt longer, or do I take what used to be debt payments three years from now, which is a bunch of money, because you're paying out money like crazy on debt. If you take all of what you used to pay in debt payments and make that your investment plan for seven years, you're going to have a lot of money. So I should just do what you say

and just not pay into the 457 or anything until we get through the baby steps do you see what what i'm saying yes sir i just i had a plan to retire at about 59 or 60 and i just but i want to get out of debt for sure and i want to i want to follow your step i don't want to be one of these ish people i want to do it yeah you know the point is not to just follow it just blindly but my point is that the payments you're paying on debt will make you wealthy if you get rid of them. Faster than doing a little bit of 457 or a little bit of 401K and then trying to get out of debt at the same time. Mathematically, you'll come out ahead if you get rid of the debt

and use what used to be the debt payments to attack this with so you think in seven years i could with if i took the money i'm paying towards the debts and attack the 457 i could promise what it's probably two three thousand dollars a month right yes sir at least i mean you know so you start saving four or five grand a month that's like sixty thousand dollars a year you know and that's some serious money and try that for seven years plus it grows during that time that turns into some money and just all the data points tell us all the people that become millionaires even if they do it later like you're doing it. The ones that do it are the ones that clear the debt because that frees up the money to become wealthy with faster. And so what ground you lose during this three years or two and a half years, which I'm going to challenge you to dial that back a little bit, during this two and a half to three years, the money you, the ground you lose by not investing,

you more than make up by turning those debt payments and folding them over into the gumbo, you know. And you're just stirring the gumbos, what we're doing here. You're just rolling it over. And so you're going to – mathematically, that's the way it works out. And so because it's a short period of time – now, if it was 30 years instead of three years, we'd have to think about it because the math would quit working at that point at some point. But it's a short period of time, and cash flow, meaning all your money not going to the stupid bank and payments, is king when it comes to causing you to build wealth. Brian is with us. Hold on.

I'm going to give you a copy of Chris Hogan's book, Retire Inspired. You need that book. And you need to jump on his website chrishogan360.com by the way too hang on jack uh kelly's gonna pick up and give you that brian what are you up to hi day thanks for taking my call sure how can i help uh well i am trying to cash flow my wedding uh for May. Cool. And my fiance and I are both in Baby Step 2. We have a joint checking account that we're both contributing money to, whatever's excess. Basically, we paused Baby Step 2 to try to cash flow the wedding. I just want to make sure that I'm going about this the right way.

Okay. What is your income? Take home somewhere around $35,000, but I work a lot of overtime, so that varies. Okay. So what do you pay taxes on in a year, including overtime? What are you going to make this year? Just short of $65,000. Okay. What does she make? About $35,000. How long have you been engaged? Oh, two months.

Okay. Why are you waiting a year? To be able to raise money and cash for the wedding. Okay. How old are you? 23, both of us. Okay. Cool.

All right. What if I said get married sooner and pay cash for the wedding? I think that we'd be able to do the wedding part, the reception that is the biggest expense of the wedding. Yeah, okay. So what is the, you're both, you're personally having to pay all this. There's no parents helping at 23 years old. Correct. Okay.

And so you have $100,000 income between the two of you. If you stop everything, all investing, all paying extra on debt, you should save up and pay for a pretty decent wedding in about three months. And you don't have to have a reception for 500 people if you're 23 years old and paying for it yourself. Tell them all to bring bologna and we'll have sandwiches. Let's get married. And there's no way I'm waiting a year if I'm 23 years old in this situation.

If you've been dating a while, you get good pre-marriage counseling, and then get on with your life, man. That's forever to wait to get married. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.