The Ramsey Show - App - Should I Pay Off the Car or the In-Laws First? (Hour 3)

Episode Date: November 30, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in. We'll talk about your life and your money. It's a free call at 888-825-5225. Rob is with us in California. Hey, Rob, how are you?

Good. How are you, Dave? Thanks for taking my call. Sure. What's up? Well, I'm 38 years old. I've been married for 10 years. I have four beautiful kids. The reason I was calling is as my family has grown and we've moved into bigger homes, we've always made the decision to keep our existing home.

And so now we have two homes that we rent out and then we have our primary residence and I've always had it in mind that I would keep my rentals until I can sell them and have enough money to pay off my uh my current mortgage that's my primary residence when I look at that and I try to do the math it looks like I'm about a year or a year and a half away. Wow, good for you. And I'm trying to decide when I listen to your show, and I'm trying to decide whether I should just sell my homes now and use my just normal income to pay off my home over time. So what's your household income?

So right now, $160,000 a year. Good for you. Well done. And how much would you be shy if you sold them today and paid as much down as you could? How much would you be short? When I do the math and, you know, I take into account capital gains and agent fees that I pay for my real estate, or my real estate, it looks like I'd be short about $100,000. Okay.

It's up to you. I mean, you can stick with your plan and do it as quickly as you can. That'd be fine. Just let them ride on up in value. You're sitting on California real estate, obviously, and obviously that's going up pretty quickly, and that $100,000 could be there fairly quick if you do that way. Of course, if you don't, then you've got $160,000 worth of income to use to try to clear that extra $100,000 laying there on your house, and how long does that take?

What, two, three years, probably? You'd be debt-free that way. So just concentrating on your house, assuming you have no other debt and you're you know, you're working our systems and so forth, which will put you there. So I don't think either way is a bad idea. It's just a matter of which which direction you feel best about. But, you know, it's it's it's worked out for you, you know, because you're the area you're living in, in particular, has gone way up in values. Dan is in Fort Collins, Colorado. Hey, Dan, welcome to the Dave Ramsey Show.

Hi, Dave, how are you doing? Better than I deserve. What's up? So I was just kind of wondering what my options are for investing. I'm in Baby Step 4, and I'm going to hit the individual income limit next year, so I was wondering if I should be doing a backdoor IRA. Yeah, you can do a Roth IRA as a backdoor, if that's what you mean. You're going to be up over $200,000? No, I'm single, so I'm in about $150,000 or $130,000, I'm sorry.

Yeah, $133,000, yeah. Yeah, because it's $95's 95 from my daily job, and then I get about 20 from renters in my primary residence, and then I just secured a consulting contract for about 36. Yeah, you're going to be up over. Yeah. Well, I mean, the Roth IRA, a backdoor Roth, the way it works is you just take out a non-deductible traditional IRA, an after-tax traditional IRA,

and then 20 seconds later you roll it to a Roth. Now, there are some limitations on that, and you need to sit down with your professional, your tax professional or your investment professional, and they can tell you whether or not you can pull that off or not. There's a couple of situations you can get in where you can't do that, but I do one every year for me and my wife. And we're in a position we can do it. And so that's what you've got to look at.

But, yeah, I definitely would do that. You can do $5,500 if you're married. You can do $5,500 for your spouse. And so it would be $11,000 a year. Next year it's $6,000. The limits are going up. So in 2019. Open phones at 888-825-5225.

Open enrollment for health insurance began November 1st. If you've got insurance through your employer, make sure to request the 2019 rates don't just auto do anything you always look at the rates because with what obamacare has done to the health insurance industry some of you are screwed and your company plans have gone through the roof we've been fighting it over here with ours big time and so if there's changes going on if there rate increases, you need to know that and you need to look at it. And if you need to shop and say, maybe I need to have an individual policy instead, and you don't have health problems and all of that kind of stuff, then what I would do is just go to DaveRamsey.com for a health insurance ELP.

And just click on ELP for health insurance and shop it. And you can do that with your car insurance. You can do that with your homeowner's insurance. And what you're looking for is for an insurance broker or an independent insurance agent. But what all that means is they they sell insurance for many many different companies and they're going to pick the one that's the best deal for you in those situations and get you the best price they don't just sell for one company and a one a one company agent is called a captive agent and they almost never have the best deal on any kind of insurance stuff like state farm or nationwide or that kind of stuff and you

can almost always beat them in in quality in service in claims uh and certainly in price by shopping them shop so shop your homeowners shop your car insurance and you may need to shop your health insurance before you just automatically sign up for what you pay with your employer. Now, if your employer pays for a whole bunch of it like we do here, you can't get it cheaper in the market than what you end up paying. But if you had to pay the whole thing, you'd be easily getting it cheaper somewhere as an individual policy because group plans are just a mess, and everybody's quit talking about this. I guess it became a Democrat- thing and Obama Trump thing or whatever.

But, um, for me, it's just a health insurance industry fell apart thing under the weight of this ridiculous thing called Obamacare. It has not worked much to no one's surprise, except a few people who were politically motivated. It's a disaster. So, anyway, check it out because you may need to move to an individual policy. It might be that you get a better deal that way. Always shop around. Always get a better price and check every year on your car insurance.

Check every year. Let me just tell you, they're not loyal to you. I've been with State Farm for 22 years. Who gives a rip? They'll drop you in about a heartbeat if they decide they don't like what you're doing. They don't like your tickets or they don't like your wrecks or they don't like the claims you filed or whatever. They'll cut you loose so fast you won't even be. My agent's a friend.

Your agent ain't got anything to do with it. State Farm will hit you with a baseball bat in the face if they think. And they won't think twice about it. So don't get confused about this. This is a financial transaction. This is The Dave Ramsey Show. Why in the world would you trust some random guy in a cube when getting your mortgage? Do you really think he cares about your long-term money goals? Well, he doesn't. Those companies care about getting you into whatever home loan program they're pushing that

week. When it comes to ordering a cheeseburger, the meal deal works fine. But let's get real, people. We're talking about the largest investment you'll probably ever make, so don't be naive and trust an order taker who pressures you into a pre-packaged loan. My friends at Churchill Mortgage have been helping my listeners for over 25 years. Call Churchill Mortgage and get custom solutions from an expert within 10 minutes. It's simple. They'll shoot straight with you and quickly show you the real way to save money. Call 888-LOAN-200.

That's 888-LOAN-200. Or visit ChurchillMortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard. Redwood, Tennessee 37027. Thank you for joining us, America.

We're glad you're here. Open phones at 888-825-5225. Jack is in Jacksonville, Florida. Welcome to the Dave Ramsey Show, sir. What's going on, man? How you doing? Better than I deserve. How can I help?

All right, so I'm trying to get started on the baby step process, and I can't get my wife on board. She is 100% dedicated to buying a home, and over the past, I'd say, two years or so, we've been saving to do it, and we've gotten up to about 11,000 liquid. And it's just driving me nuts being in debt. So the other day, I'd say probably about a month ago, I did a Google search on how to get out of debt, and your name popped up,

and I've been on the train ever since. And I've been trying to convince her that it's the right thing to do. And it's just the hardest thing in the world, and I just, I don't know. I'm stuck. How old are you two? We're both 28. And how long have you been married? Almost a year.

We've been together about six years, and we've been married for one year what she do what she do for a living what does she do she works for merrill lynch okay um that's the problem yeah so she feels like she's got some expertise in this area would you agree i i don't know in case she's listening i don't want to sound like the bad guy you know i mean no i'm not saying i wasn't making fun of her i'm saying she's she knows she has some pretty strong opinions about money already before you ever came along or i ever came along and i mean with what she does for a living i mean mean, what does she do at Merrill Lynch? I don't really know.

We don't really discuss work. I mean, is she a financial advisor? We're trying to keep that part out of our relationship. Is she a financial advisor? No, she's not a financial advisor. It's more to do with, like, people's retirements and stuff like that. I mean, but not, she doesn't advise people. She's a manager over there. Okay, all right.

Well, I think what you've got to be real careful is to talk about why it is that you feel the way you feel. You're allowed to have an opinion. Certainly she's allowed to have an opinion, okay? And instead of going in and going, hey, I heard this crazy guy on the radio. I Google searched him, and immediately she goes, oh, it's a scam. That's a scam off the Internet, man. That's what went through her head.

A pyramid scam. That's what went through her head, you know. And if she didn't say it, that's probably what she was thinking. It's what I would have thought if you'd have come and said that to me. So I think what you've got to do is you have to walk through the ideas and walk through why it is that debt bothers you. Yeah. And this is a big deal to me, honey,

and I really want us to be on the same page about money because the number one cause of divorce in America today is money fights, money problems. The number one thing people fight about in marriage is money and money fights and um this guy actually has a proven system where people don't fight anymore about money yeah and i think we can get on the same page here um let's at least both of us look through this information you give it a fair look and if you want to argue some points on it, that's fine. And I'll be happy to listen to that, but you have to be happy to listen to me about my opinions on this, too, because I'm half of this train. I'm half of this equation.

And so, you know, we're not trying to take her vote away from her. We're not trying to take your vote away from you. Right. But we do need to get on the same page on how we're going trying to take your vote away from you uh right but we do do need to get on the same page on how we're going to do this stuff so right i mean that's that's like the second step of step zero yeah getting on the same page yeah so but if you start talking about all the things you need to do rather than why you need to do them uh her shields are going to be set in concrete she's going to put are going to be set in concrete. She's going to put up shields and hold them in concrete.

And no one would blame her. But if you go, listen, I really think the right way to buy a house and do it where the house is a blessing instead of a curse is that we didn't have any payments and we had an emergency fund. And I can see how we can get there. Would you please sit down with me with an open mind and look at this and don't cross your arms and stick your lip out. Let's sit down and talk about this and let's look through this and talk about how we can build wealth and how we can work together on really one of life's most difficult subjects.

And if you can't have that conversation in your house, then you've got marriage issues. You don't have financial issues. Right. If she comes to you with anything and says, hey, I really want us to talk through this, and you go, no, I've already made up my mind, you know, well, that's not how you're married. It's not a proper way to do relationships. And so, but I don't think that's what she's saying. I think what she's saying is you found some scam artist on the Internet, and then you came in and told her you had to sell her car and this kind of stuff.

Instead of talking about why, you were talking about what. So don't talk about what. You're absolutely right. And I think what it is is i just i see how it works yeah i've done the math it makes total sense it does and i'm so i'm so convinced yep that i feel like she should be so convinced immediately she doesn't have the same information you've got right that's an unfair request and what happened with you was you were already concerned about why and then you found a what she wasn't even concerned about why and you brought her a what yeah this is what we're

gonna do i'm fired up i introduced her with all the numbers immediately wrong yeah you need to apologize you screwed up. I know. Isn't that what men are supposed to do, apologize? Well, I mean, yeah, if you're wrong, and in this case you were. I mean, you went at this wrong. You went at it like a guy who's been married a whole year. So hold on. I'm going to send you a copy of the book, The Total Money Makeover, and the two of you flip through that together.

Maybe if you can just get her to read that and just say, listen, I screwed up, but I am still excited about these ideas. And I really want us to have an intelligent, good quality marriage conversation about these ideas. And if we don't do them after we talk it all through, I'll accept that. But because you have a vote and I have a vote. But I really want you to care enough about my opinion to look at this with me. And then I think that'll work, maybe, after you apologize. So hold on, Kelly, I'll pick up. We'll get you a copy of the book. Open phones at 888-825-5225.

Chris is with us in Louisville, Kentucky. Hey, Chris, how are you? Doing well, Dave. How are you? Better than I deserve. What's up? Well, Dave, we are real deep into Baby Step 2. We've got about $18,000 left to crush it.

Good. And what I'm calling for today is that I'm in the National Guard, and they have a blended retirement system that you can opt into right now. I have 17 years in. I plan on staying in. Obviously, I'm going to stay in my 20 and longer if I'm allowed to. Yeah, I don't think when you're that far into it, I would go ahead and stay with what you got.

If you were just getting started, I'd probably tell you to do the blended. Gotcha. And you have to crunch the numbers. But you're giving up too much. You're too far in. That's what I thought. I thought the same, and I was like, well, let me call Dave and see what he thinks. I mean, you could sit down with a SmartVestor Pro if you wanted to,

and they can actually get a calculator out with your exact numbers and walk through it with you, and you can make the decision. But every time I've run the calculations on these, the blended works better for the new person in the military. But you're 17. You're three years away from that 20 mark. That 20 mark's a big deal. Yes, sir. Yeah.

Thank you for your service, man. I think you're going to find, no matter how you crunch the numbers, that you'll stay in, but it's okay to crunch them. It's okay to learn it for yourself. In fact, it's preferable that you do that, but I think you're going to be better off staying in. Hey, thanks for the call. Open phones at 888-825-5225. This is The Dave Ramsey Show. I'm Mike Pearson. Identity theft has become an epidemic.

Data breaches are being reported every day, and hundreds of millions of people have had their identities stolen, sometimes multiple times. That's crazy. Now, I've seen firsthand when people are stressed and freaked out when they become an identity theft victim. And those who have credit or ID monitoring plans find out really quick how unprotected they are in so many ways.

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Zander.com or 800-356-4282. In the lobby of Ramsey Solutions, Vincent and Jamie are with us. Hey, guys, how are you? I'm doing good, Dave. We're great. Welcome. Where do you guys live? We live in Franklinton, Louisiana. And that is near?

That's about an hour north of New Orleans. Almost to Baton Rouge? Closer to Mississippi than Baton Rouge. Oh, okay. All right. Cool. Well, welcome to Nashville. Good to have you guys. And you're here to do your debt-free scream. How much have you paid off? We paid off $64,940.82. Love it. And how long did this take? Took us 22 months. Good. And your range of income during that time? We started off at about $87,000

and we ended at $100,000. Very good. What do you all do for a living? I'm a high school teacher. I teach high school agriculture, and I'm a FFA advisor at Franklinson High School. Good. And I am the director of health informatics for a wound management company. Okay. Very cool. What kind of debt was the $65,000? About $50,000 of it was student loans, both of ours. We bought a car for $5,000, and then the rest was a personal loan that we had taken out.

Got it. Okay, cool. And how long have you guys been married? Two years. Two years. Okay, so you come home from the honeymoon and start this. Yes. So what made you decide to do that? Well, actually, prior to us getting married, we were engaged. And a few months out, we started consolidating all of our stuff.

I had started moving my stuff into the house that was going to be our first home together. And we were affected by the 2016 flooding that occurred in Louisiana. We got about five and a half feet in the house. And we lost a lot of stuff and I wasn't really familiar with your plan and neither was Vince. So I was telling a cousin about our different challenges, about how we're about to get married and we lost the home. We had all these plans and we were renting at the time. so we were able to move him into another apartment and things came together but she told me about financial peace university and from there i just started researching i found total money makeover i introduced it to vince and then we just from

the second we got married literally the next day started putting money towards debt wow very cool very cool so did you go to the class, too? We didn't. No. We didn't go to the class. We listened to the radio show very religiously. Oh, yes. That's the same as going to class almost.

And read the book, of course, the Total Money Makeover book. Audio book. Cool. Okay. Same thing. Good. Very good. Very cool.

How old are you two? We're both 25 years old. I'll be 26 in December. And in 22 months, you paid off $65,000. That's pretty impressive. It still doesn't feel real. Yeah. I mean, it's got to feel great.

Oh, yes, definitely. And the other thing is that your first order of business when you get married is to learn to do something very difficult together. And that sets you up to win at almost anything you go to attack now so very well done y'all i'm proud of you thank you very cool so what do you tell people the secret to getting out of debt is because this is a pretty intense ride you've been on well we have a few things oh one of the main ones that we've been kind of using the last couple years as though if we go to buy something, we have to think in our mind or we ask ourselves this question, if our house is flooding again, is this thing worth going back into the house to save? And most of the time, the answer is no.

Yeah, really? Yeah. Yeah, that does give you kind of a tuning fork, a way to adjust your life around that. Absolutely. That's pretty cool. If I don't care enough about it to go back after it, I shouldn't buy it. Yes, sir. That's good.

I like that. And then also, obviously, communication, but the budget every single day. We talked about being debt-free every day since we got married. Yes, one day after work, she came home and had a binder, and it had all kinds of spreadsheets and everything. I said, all right, here we go. Let's do this. Game on.

Game on. The nerd got her spreadsheets out. Yes. That's a good thing. I love it. Well done. Good job. Very good.

Well, congratulations, y'all. Thank you. Very, very well done. Who were your biggest cheerleaders outside of the two of you? Definitely our parents. They're actually here with us today to cheer us on for this. We have a few friends that we've actually turned on to the show, and they're actually here with us today to cheer us on for this. And we have a few friends that we've actually turned on to the show and they're actually watching right

now. Oh, cool. So I had two staff members who watch your show every day. And so we kind of would listen and then talk about it afterwards. Yeah. So they were definitely cheerleaders. Oh, that's fun. That's good. Well, it's good to have people in your life that tell you you're not nuts. Yes. Most of the culture tells you you're crazy. But here we are looking at two really rock star millennials. I mean, absolutely incredible. Thank you. I mean, $65,000 after a flood is paid off in less than two years.

Yes, sir. That's pretty impressive. Very, very big deal. You all will be able to do anything you want to do now. I hope so. Very cool. Well, we've got a copy of Chris be able to do anything you want to do now. I hope so. Very, very cool. We've got a copy of Chris Hogan's book for you, Retire Inspired, a number one bestseller. And we're going to close

the chapter on debt and we're going to open the chapter on wealth. And it's time for you to now be millionaires, everyday millionaires and outrageously generous as you go along. And you're well on your way. I mean, you're 25 years old, you're making 100 grand, you've got no payments. Life is pretty good. We're excited. Absolutely. Can't wait. Well done, well done, well done. I mean, you're 25 years old. You're making $100,000. You've got no payments. Life is pretty good. We're excited.

Can't wait. Well done, well done, well done. All right, who all came with you on the trip? My parents and my mom came with us. Okay, so we've got a bunch of the in-laws and the out-laws. Yes, sir. Good stuff. All right, Vincent and Jamie from Franklinton, Louisiana.

$65,000 paid off in 22 months at 25 years old. Making 87 to 100. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free! Way to go, you guys touchdown baby that's how it's done i love it man that's fun

well done well done man that's beautiful 25 years old you can do anything you want to do now wow john's on Facebook. Dave, I have a return of premium policy for $325,000. My wife has $125,000. I'm 58. She's 57. We'd like to increase both coverages. Wife is employed at $50,000.

I'm self-employed at $40,000. Well, I wouldn't ever buy a return of premium policy. A return of premium policy simply means if you don't die before the policy expires, they give you all the money back. And guess what? They charged you enough extra to be able to give you all the money back. You could have just bought a cheaper policy and put the money in your pocket to start with, and you would have got the money either way.

So I don't do return of premium policies and so i think if you shop this stuff you will be like go to zander insurance they're an independent insurance broker and they can get you the best price on term life insurance bring up you know 20 options in a heartbeat in like 13 seconds after you enter your stuff on their website, and you'll be able to look at it and tell. You need to buy 10 to 12 times your income on you. So if you make 40, then you would have 400 to 500 on you. And, you know, and if you said she makes 50, then we put 500 to 600 on her. And so she's pretty seriously underinsured, and you're just a little underinsured. But I think, depending on the age of these policies and what the situation is,

don't cancel them until you get new policies in your hand. Never do that when you're replacing life insurance. Get the new policy in your hand first. But I think if you go to Zander Insurance, you're going to find a much cheaper policy overall, and you get the increase in coverage because of the return of premium issue you've got here return a premium on anything is a gimmick if you took what the extra they charged you and just put it in a fruit jar you could return your own premiums regardless of whether you use the policy or not and that's true of any

kind of a return of premium policy lots of these insurance companies put these gimmicks on there. And you just have to watch these guys. They are better at figuring out a way to snake people than any other industry out there, man. It's unbelievable. So go to Zander Insurance, Zander INS, or ZanderInsurance.com, either one, and it's quick and easy. You get a quote, and you'll know exactly what's going on there. And when it comes to life insurance, folks, just remember,

you never buy any kind of life insurance that has a savings or investment component to it. It always sucks 100% of the time. You're better off to put your money in some kind of, any kind of an investment. You'll be better off. You'll make more money while you're alive, and you'll make more money when you die. So just stay away from investment-based life insurance products. They're more expensive, and the return on them sucks. This is The Dave Ramsey Show. Our scripture of the day, Proverbs 18, 15.

An intelligent heart acquires knowledge, and the ear of the wise seeks knowledge. Anyone who stops learning is old, Henry Ford said. Whether at 20 or 80, anyone who keeps learning stays young. The greatest thing in life is to keep your mind young. Adrian is in Hattiesburg, Mississippi. Hi, Adrian. How are you? Hello, Mr. Ramsey. Thank you for taking my call. Sure. What's up, sir? My question is, I've just got started on the baby steps. I've got my $1,000 set aside,

and I'm trying to work as hard as I can on the snowball. And currently, I have $10,000 in debt, $7,000 on a car, and $3,000 on a motorcycle. And I'm wondering if I should just hurry up and pay off the motorcycle, or if I should sell it as the value that it has and put that towards my car to just knock out all my debt right away. Yeah. So the motorcycle has three owed on it, and it's worth what? It's worth about $45.

Okay, so $1,500 in equity. And the car has seven, you said, owed on it? Yes, sir. And what is it worth? I believe it's closer to six. Okay. And what other debts do you have? That is it.

Okay. And what's your household income? I still live with my parents. I bring home about $40 a year. Okay. All right. So basically what we're saying is this $10,000 out of $40,000 makes you debt-free and owning both of these things free and clear.

Correct. And you don't have any overhead. You live with your parents true i do pay my fair share of bills okay all right so you pay some bills out for your parents i mean you give them some money yes how much money do you give them a month around 300 okay Around $300,000. Okay. All right. So that's $3,600 a year that you're paying them, and $3,600 and $10,000 worth of debt would be $13,600 out of $40,000. Mm-hmm. You see what I'm doing here? You feeling these numbers?

Which kind of says to me you should be able to pay off both of these things in six or eight months if you kept them both. Right. But you're going to have to not party on the weekends. You're going to have to pay freaking debt off. Right. I guess I'm getting more impatient trying to knock it out as quick as I can. Well, six or eight months is not that long.

But that's going to require you do nothing else but pay on debt. Right. No life. Now, here's my question. I have about $5,000 in savings. Oh. Well, then I would pay off. If you're going to keep the motorcycle, I'd pay it off today.

And then I would pay on the car down to $1,000. And so three, four, that puts $1,000 on the car and $1,000 in savings. And that gets us down to only $6,000. How quick can you pay off $6,000? Well, $1,000 a month is six months. $1,500 a month is four months. Gotcha. Well, what's your take-home pay?

A month? Yeah. About $2,000. Okay. So $1,500 a month, $300 to mom and dad, $200 for spending money. And you're done in four months. Sounds like a plan. I'm just doing the big numbers with you here.

That's what it sounds like to me, though. I think you can do this. Get after it, dude. Get after it. Get her. Get her done. This is the Dave Ramsey Show. Thank you for joining us, America.

Casey is in des moines hi casey how are you good days thank you for taking my call first time caller long time listener thank you very much my wife and i we paid off forty six thousand dollars in debt in the last year wow and now all we have left is a small small car loan for around eighteen thousand dollars and a debt in a uh interest-free loan for my wife's parents for a student loan. So I have a SEP plan, and it's going to be 25% of my salary at the end of the year. And I have around $30,000 between checking and savings. Do I take that SEP plan and pay it off towards one of those debts

or do I invest that into a Roth IRA? Okay. I'm sorry. You have a SEP plan? Self-employed pension plan. Yeah. I know. I know what that is. But have you already put the money in it? No. It's being paid out at the end of the year.

Oh, coming to you. Yeah, coming to me at the end of the year. Oh, coming to you. Yeah, coming to me at the end of the year. You own the business? No, it is a small company. Oh, they're going to give it to you. Do they not deposit it directly into the SEP? I don't think you get that money. Maybe I don't.

I think it's them making a deposit into the self-employed pension plan on your behalf. I don't think they give you the money. I mean, it is your money. It goes into your name like a 401k does. But I don't think that money's, I think that's inside of a retirement account. You're not going to be able to access that. And so how much, and you have $30,000 in savings? We have $30,000 between checking and savings, yeah.

Okay. And you owe your in-laws how much? That's around $18,000. And the other debt you have left was how much? $18,000. So you have $36,000 left. Yes. Okay.

All right. Well, I would pay off the car today out of checking for sure. Maybe step two is that you take all your money that is not in a retirement account and you throw it at your debt snowball. And so I'm going to pay off the car today, and I'm going to pay a big chunk on the in-laws, and I'm going to have them done in just a few months. What's your household income?

Around $130,000 a year. Great. You're doing good on the income side. And you've been doing good at saving. I was just wondering if we could pay off my in-laws first just to get rid of that big brother feeling. Sure. Like they're always kind of looking at us. Sure.

We can do that today. Okay. You have money in checking to do it. I don't care. You have two $18,000 debts. They're a tie on the debt snowball. So you can pick which one you want to do for whatever reason. Okay. So just take the

in-laws. I love that. Christmas dinner will taste different when you don't eat with your master. The borrower is slave to the lender. And when you don't eat with your master, it changes the way Thanksgiving dinner and Christmas dinner taste. So yeah, I'm with you. Pay them off today and then let's get the car paid off in what? I mean, you're going to be able to throw another $10,000 at it.

Right? Yeah. I'm looking at probably six months total and then let's get the car paid off in what? I mean, you're going to be able to throw another $10,000 at it, right? Yeah, I'm looking at probably six months total to be debt-free from everything. Oh, less than that. By mortgage. Yeah, you probably only got, not counting the mortgage, you probably only got about $8,000 left after this conversation. I don't know. I mean, you've got to fine-tune what's in the checking and what's in savings and get it down to about $1,000, and everything else goes with this debt.

And I don't know how much is in there exactly. You're giving me a range is what you've got but it sounds like you can be very very close today and then you just lean in and finish this baby up and man then you got all this income coming in and no payments then you build your emergency fund that's three to six months of expenses and then you can move on to baby step four and start putting aside 15% of your income and so on down the baby steps. Allison is in Cincinnati. Hey, Allison, welcome to the Dave Ramsey Show. Hi, Allison.

Let me try it one more time. Hi, Dave. How are you? There we go. I got it now. Good. How are you? How can I help?

I'm doing good. So I have a question about talking to kids about money. We send our son to an affluent school, and he comes home and talks about how the other kids' parents are millionaires and live in mansions and stuff like that. And so he asks, you know, how much money do we have? And I don't mind having a conversation with him. How old is he? He's nine. Okay.

All right. We'll just make it age appropriate to that. And, you know, you just get to use those mom and dad one-liners, right? You know, maybe they are millionaires. Maybe they aren't millionaires. Maybe they just spend like they're millionaires and they're broke. I don't know, honey. But at our house, here's how we do things.

We can't control what they do, baby. But at our house, here's what we do. We don't borrow money. We're very generous in our giving. We live on a budget and a plan. And this is what we do at our house. And we make enough and do well enough financially for you to go to this school. So we're doing all right.

But you're always, son, you're always going to run into people who have more than you and less than you. And you're always going to run into people who are show-offs. And you're always going to run into people who are the opposite of a show-off, who have a lot of money and don't look like they do. Because the vast majority of people who have a lot of money, you really don't know it. They're really pretty calm about it. And you teach your kid that lesson. It's called humility. Yeah, it's a good one. So just keep talking about it. You'll be fine. You'll be fine. But no, he doesn't have to keep up with them. Matter of fact, you don't want to

have him keep up with them. Some of them are stupid. That puts this hour of the Dave Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, guys, this is Blake Thompson, Chief Production Officer for The Dave Ramsey Show. Here's a tip. To keep from missing Dave's classic facial expressions to some of those calls, make sure you watch him live. Just visit Dave Ramsey.com slash show each day from two to 5.

P.M. Eastern. Enjoy.