The Ramsey Show - App - Should I Quit My 6-Figure Job to Teach? (Hour 3)

Episode Date: June 19, 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 done, 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. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Dan is with us in Phoenix, Arizona.

Hi, Dan. Welcome to the Dave Ramsey Show. Hey, Dave. Great to talk to you. You too. What's up? My question is I want to quit my six-figure income job, low six figures, and become a teacher in 10 years. So I kind of want to know what I should be thinking about.

And I'm a new listener, but heard you're a math nerd as well. So what should I be thinking about? You want to become a teacher in 10 years? Yes. Why so long? Because there are certain things I want to do now. I take a couple of international trips every year, and that's just not doable for me on a teacher salary. Okay.

What is it that's drawing you to the classroom i'm a big fan of economics and love teaching that and i want to coach high school tennis okay i always just think about um uh i i my first i'm contrarian, so the first thing I always do is challenge the presupposition. And the presupposition is that the only way you can live out these, scratch these itches that you have is to go into the classroom and, you know, become a tennis coach that teaches econ on a state salary. And I just wonder if there's other ways to scratch that same itch that gives you the thing. I'll give you an example, okay? I'm a teacher. Yeah.

I teach for a living. Yeah, that makes sense. I'm probably one of the better paid teachers you'll ever talk to. But in a very real sense, I, you know, at least when I'm being the product around here, I'm also the CEO of the organization. But when I'm being the product, a portion of what I'm doing is teaching. Here on the air and when I'm speaking on a stage before audiences and so forth i'm teaching and matter of fact i'm teaching economics a lot of that time and certainly finance so i what it comes into my mind is that uh we certainly need wonderful people in the classroom there's

no question about that but there's two things blocking you from doing it. And it's like you have to go live your life before you sentence yourself to jail. You know, it's kind of the way this is coming down, you know. But that's, you know, I'm going to I'm not going to be able to travel and I'm not going to have any money. Oh, my gosh. But I get to live my passion. You know, I just think there's got to be another way to do this. And so I'm starting to wonder, you know, is there, you know, tennis summer camps that you run? And, you know, and you teach econ as a sidebar thing at the local community college just for fun or something like that. I don't know.

I'm making this up on the spot but i what i'm challenging is your construct that this is the only way for you to do the things that you love to do uh working with teens obviously is appealing to you in terms of coaching my son-in-law's football coach so i get that and i gotta tell you those young men that come on his team uh they get a lot more in football sure he trains them up on how to be young men and uh he has an opportunity that is very fulfilling uh to be a mentor and to uh you know to that they they really uh anybody gets on his team's got a good thing going on. And you could be that guy, you know, that is a huge blessing to the young men or young women that you're coaching. I've had coaches in my life in athletics that were wonderful, that were life-changing people.

So I don't know. I'm just wondering, is there an open market answer that allows you to maybe own your own business? I don't know. And you open a tennis coaching thing at the local tennis club, or you open it by your own. I don't know. So I don't know that I'm going to prepare for a jail sentence, which is the way you've laid this out. Because I'm going to break the framework. And the only way to do that would be it's like I'm going to retire because I've got so much money. And then I'm going to go do something where the money that I get paid doesn't matter. And so you'd have to just, you know, become wealthy during this 10 year period

of time. And you may be able to, you're making six figures, so that'd be okay way to do it. But it just, I always want to challenge that construct. Hope that helps you. All right. David is with us in San Diego. Hi, David. Welcome to the Dave Ramsey show. Hey, thank you. How you doing? Better than I deserve. What's up? Hey. So when my mother-in-law passed a few years ago, my father-in-law came into about $34,000,

which we recently found out he put into silver. Oh, God. That bought about 100 pounds of it. And I think the idea is that that's going to be his kid's inheritance. He doesn't have anything else. But I know your feelings about commodities. And since he bought it, I just checked, it's maybe worth a little bit more than $23,000 today. Yeah. Um, and so I figured you probably,

you're probably gonna tell me as encouraging to sell it, but, um, he himself is facing stage four cancer as well. I'm doing okay today, but you know, it could be one year, two years.

We're not sure. Um, and so obviously it's a, there's a lot of emotion behind, you know, that investment. Yeah. We're just kind of, I, I's a lot of emotion behind that investment. I'm not bothering with this. He's got stage four cancer. Just help him fight cancer.

Just pray with him, walk with him through his illness. If he was going to have this investment for 30 or 40 years, and we're just dealing with a healthy guy, and we just need to have an argument over thanksgiving dinner about it i might try to get him to understand how stupid this is but right now it's just i mean it let's just say this okay if you guys have a peaceful wonderful relationship for the time he has left for a year and a half or two years and this silver becomes worth zero that's okay the silver is not on my list upsetting him having a big argument is not on my list of things to do with a guy that's in stage

four i got other i got other stuff to do with that guy i'm just want to love him well right i want to walk with him and love him well and take him fishing and sit in a deer stand with him whatever it is he wants to do right um that kind of stuff and so um silver is not a big deal and you know and my granny used to give me uh savings bonds for my kids college and as soon as i could i would cash them out and put them in a mutual fund because they suck and uh so but but i never argued with my granny about it because you don't argue with granny if you're smart um she just said, how's those savings bonds doing? And I told her the truth.

They're doing great. Since I cashed them out and put them in mutual fund, they were. But I didn't tell her I did it. I just did it. So that's the kind of thing I'm thinking about here. This is the Daveave ramsey show most people's money problems come from not paying attention that's why before i spend a dime of my money on something i do the research and make sure it's going to live up to what it claims.

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My wife and I have completed Baby Step 3 this week. That means they're out of debt, everything but the house, and they have their emergency fund of three to six months of expenses in place. It's time to move to Baby Step 4, but we make too much to contribute to an IRA. What's your suggestion for retirement savings vehicles? Well, if you have a 401k at work, there's no income limit on that. You can do backdoor Roth IRAs if you make more than $200,000 a year, which Sharon and I do every year.

And a backdoor Roth IRA is simply where you open an after-tax traditional IRA and 30 seconds later roll it into a Roth. It does not create any additional taxes, and you've got the money in there to grow completely tax-free. And, of course, you can do one for you there to grow completely tax-free. And, of course, you can do one for you and one for your spouse as well. And that will not get you to 15% of your income if you're making more than $200,000. It'll only get you about 7% of the way. So you're going to need 401Ks or something else if you're self-employed. You can look at a simple IRA, which is a 401K for small business,

or a SEP, a Simplified Employee Pension Plan, SEPP. Any of those will work, either one of those. And so just look and sit down with your SmartVestor Pro and find out what avenues you've got that you can save towards retirement. But we want to get you to 15% of your income, and if you're making $200,000, that's $30,000. And, you know, a couple of Roth IRAs is, you know, you're limited on that, obviously, and you can do $6,500 a year this year, or $6,000 a year this year, I'm sorry, and $7,000 if you're over 50 per person. And so that would get you to $12,000 if you you're under 50 two of you um out of that 30 but we've still got 18 to go and you can put up to 19 into a 401k if you have one available and that

would get you there eric's with us in philadelphia pennsylvania hi eric welcome to the dave ramsey show hi dave thanks for taking my call how are you today today? Better than I deserve. What's up? So I'm doing okay for myself, but I'm wondering how I can help my family out. So the situation is that my mom and uncle each own a home. They're two adjacent homes, three-bedroom homes. Only one person lives in each of them. However, the one that my uncle is in is about to go into foreclosure. He took out a mortgage on the home just to pay for his expenses. The homes were inherited from their parents and they've used the money for the mortgage to partially pay it back on itself.

And then also they've used it for frivolous expenses, you know, cars that they don't need. And so the mortgage is now in foreclosure. And while my mom, who owns her home and gets her income from SSI and disability, what she wants to do is she will ask me to purchase my uncle's home and refinance the mortgage. And she thinks that she can pay off the home with some of the income that my uncle also earns. But I think that's realistic. And I told her that I cannot do that. So with that in mind, what she's moving towards doing is taking out a home equity line of credit on

a home that she owns so she can pay off the mortgage for him. And I don't know how to dissuade her not to do that. And I think if she does do that, she will ultimately go into just a spiral of debt and I'll't know how to dissuade her not to do that. And I think if she does do that, she will ultimately go into just a spiral of debt. And I'll end up having to support them both. So I don't really know what to tell them or what to try and do to fix their situation. So I'll have to support them when they're old and potentially without homes at all. Well, you don't have to support them both.

There's no law that says that. If your mother's doing cocaine, you don't have to support them both. There's no law that says that. If your mother's doing cocaine, you don't give her money. You don't support people's misbehavior. That's called codependency. And so, no, your mother is about to make a huge mistake, and it's time somebody quit bailing your uncle out. He needs to just sell that house is what he needs to do and move and go rent something before it gets foreclosed on. But your mother is, you know, I would just be all up in her grill saying, Mom, you just are not going to do this.

You are not going to do this. And if you do this, don't you dare call me after I've told you to do this. Don't you dare call me and i've told you to do this if you don't you dare call me and ask me for money ever because i'm telling you right now this guy is misbehaving with money and he's going to take everybody in the family down the drain with him you're gonna have to get real strong about this because nobody in your family talks about the fact that your uncle is being stupid regularly no one says it out loud it's the dirty little secret it's a wink and a nod it's the elephant in the room that nobody discusses is standing on the middle of your

coffee table am i wrong i totally agree with you yeah so you need to have a very, very, very clear conversation with your mother. How old are you? I'm 24 years old. I'm on baby steps, 3B. I'm saving up for a down payment on a home. Yeah, she's not going to listen to you. You're right. Yeah.

That's exactly the problem that I'm having. Exactly. You've got powdered butt syndrome big time. Once somebody's powdered your butt, they don't want your opinion about money or sex. Let's see. Does she go to church? She does go to church, yes. How's her relationship with her pastor?

It's a very large church that's got about 5,000 members, so there isn't much of a relationship with her church, but she does attend every weekend. Who does she respect that you can drag into this that would get in her face and tell her not to do this? Oh, boy. I don't know if there's anyone that she respects i mean she speaks to my father occasionally but our relationship isn't that great uh i don't i don't know someone who wait a minute your father did you say yeah uh they're divorced um they don't live together yeah he has his own set of problems yeah Yeah. Okay, so here's the thing.

Your grandpa that left these two people houses, he's just rolling in his grave right now. This is killing me. Oh, yes. This is killing me. This is not how that man lived his life. Yeah. All right. The answer is you need to, if you can find someone to speak into her life that she'll listen to,

that you can bring into this conversation, and go sit down at her kitchen table with this person who will look at her and speak plainly to her, and she will hear them. Because she does not need to do this. No, she doesn't. Do you think that I can maybe get assistance of a professional, like a lawyer or a counselor or someone? Only if she would listen. Is there a family attorney that did this will that caused these two people to end up with these houses that she'd listen to?

Your grandpa's attorney? Potentially, yes. It's a small town. Your grandpa's attorney is well-respected, and he would sit down with her and go, you know, John, or whatever your grandpa's name was, he'd be having a fit right now, Martha. Don't do this, right? And if you've got somebody that can do that, that's what I'm looking for. And, look, pray and ask God to send that person into your mind or into her life,

because I'm afraid that she's not going to. It's not because I don't think you're smart. At 24, you're asking all the right questions. You've really got a pretty good handle on this. But I want to relieve you of responsibility to take care of people who refuse to do smart things just because they're in your family. That is not a moral responsibility on your part. So do you think it is the best course of option for him to sell the house and rent or for him to sell the house? Yes.

He has lost the house he lost the house by his misbehavior it's in foreclosure he needs to sell it before he loses it right yes definitely he does not have a way to save this house without someone else putting all their assets at risk to bail him out and then he's not going to change anything and then the next time it goes around they're all going to lose their houses. That's what's going to happen because this guy hadn't changed a thing. He needs to sell his house. That's what he needs to do and go rent something and I screwed up and lost the house. That's what it amounts to. And start again fresh and he can

start fresh and your mom will be okay and let her stay in her paid for house while she's on SSI, which is exactly what she needs. She does not need a mortgage. I'm sorry, man. I'm frustrated with you. This is the Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs, whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up.

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That's chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. In the lobby of Ramsey Solutions, Gerald is with us. Hey, Gerald, how are you? Great, Dave. Doing better than I deserve now. I hear you, man. Where are you from? I'm from Fairbanks, Alaska. All the way to Nashville to do a debt-free screen.

Wow, good for you. How much have you paid off? $180,000 in seven years. Way to go. And your income during that seven years range? $75,000 to $100, 100, and that included some rental income. Okay, very cool. What do you do for a living? I'm a fish biologist up on the Yukon River. Neat.

Yeah. Very fun. Good for you. A couple fish there. There's a few. So $180,000 worth of what kind of debt? This is $40,000 in consumer debt equally between a truck loan, student loans, a credit card, and a signature loan. And then my home loan of $50,000 and then a rental property of $90,000. So you paid off your house and your rental and all your debt.

You're 100% debt free. 100%. I am looking at weird people it's awesome i love it man congratulations well that's a perfect seven year track man well done how old are you i'm 46 and everything is paid for everything's paid for haven't been debt free since college i love it wow what's the? Well, Dave, it's not worth a lot. I thought I was going to get rich in real estate, so I bought a couple of fixer uppers and realized it was a lot harder than the TV shows make it out to be. You think? Yeah. So what's your home

and what's the rental worth each? My home's worth probably $60,000, and then the rental is probably worth $130,000. Oh, okay. So the rental's nicer than your place. It is. It's a duplex. Oh, okay. All right. Very cool.

So you got a couple hundred thousand dollars and paid for real estate. Yep. Nice. I like it. Congratulations. So what put you on this wild journey seven years ago? Well, seven years ago, I was driving across town, going to the bookstore, thinking about borrowing more money to buy another rental property.

And I heard this crazy guy on the radio yelling, I'm debt free. And I went straight to the bookstore, went to the shelf, pulled financial piece off the bookshelf, read it in the bookstore. Wow. Put it back on the shelf. Grabbed more than enough. Bought that one and read that in a few days. And from then on, I was on.

Wow. And I looked for a class that spring and took the class. So you went to Financial Peace University in Alaska? I did. Wow. I've taken it four times. Wow. And led it a couple of times.

Well, thank you. Thanks for leading it. That's awesome, man. Well, over the seven years, that keeps your batteries charged, right? It does. That was one of the secrets is I took the class once a year, and I was able to get motivation from the other students and then also tell the other students that it worked. Yeah, I'm on my way. Yeah.

And now for sure you're telling them. You got the documented proof right here on YouTube. It's going to be the debt-free scream. I am not even 50 and everything is paid for. Yeah, and you make 75 to 100 doing that, you can make a dadgum good living, man. That's beautiful. Well done. So what do you tell people?

You've been leading the class. You've done it. You paid off everything. What is the secret to getting out of debt? The plan works. Have faith in the plan. There was a few times where I thought, well, maybe I should tweak it. The baby steps you're talking about? The baby steps and then

I would listen to the YouTube and you would tell people, don't tweak the steps. Just stay on the plan and I, that's what I did listen to the YouTube, and you would tell people, don't tweak the steps. Just stay on the plan. And that's what I did. I just did the baby steps. And it worked. No ish for you. No.

It went straight at it. Yeah. Perfectly. You submitted yourself to the process. I did. My plan wasn't working. No, I hear you. Well done.

Very well done. Well said. What's the hardest part of this over seven years? The hardest part has been telling myself no. And most of my family lives in Iowa. That's where I grew up. And so I haven't really been able to come back and visit like I want to. So that was probably the hardest part was saying no and not being able to go back to visit family.

And now you can. Now I can. Live like nobody else. Later you can live and give like nobody else. Yep. You're in a position to do it. Well done. So what are you going to do?

What are you going to splurge on to celebrate? You know, when I was in debt, I would wring my hands over the minorest purchases. I would spend hours looking for a right shirt at the right price. And now I can just go to the store, and if I see a shirt I like, I just buy it. There you go. That's splurging. Yeah. If I want a steak dinner, I just go get a steak dinner. That sounds kind of good. Yep. Good job. Well done, sir. Proud of you. Did you have people cheering you on, or did you have people detracting? I had people cheering me on for the most part. Again, I took the class a lot, so I got a lot of motivation from the other class members.

And most of the any detractors tended to be people who would hear what I was doing, and they'd go, well, I don't think I can do that or that's not possible for me. And so I'm here as an example that you can do it. Anybody can do it. Anybody can do it if you just decide to. Well done, sir. We've got a copy of Chris Hogan's retire-inspired book for you. That's the next chapter in your story to be a millionaire.

Well on your way to do that. I'm looking forward to the millionaire theme hour in my future. There you go. I'm ready to have you on as soon as you hit there. You're on your way, for sure. Yeah. And, of course, outrageously generous along the way. So, very well done.

All right, Gerald, Fairbanks, Alaska, $180,000 paid off. That's his house. That's his rentals. That's everything. Seven years, $75,000, $100,000 income. Count it down. Let's hear a debt-free scream. Three, two, one.

I'm debt-free! Yeah! That's it. I love it. I's it. I love it. I love it. Man, amazing. Great job, sir. Very, very well done.

Very well done. Man, doesn't get any better than that, does it? Matthew is on Facebook. Dave, how should I make a monthly budget with a commission-based income to focus more on the other? Well, in the back of the Total Money Makeover book or any of our books, the Financial Peace University materials all have a budget system in it, which is just a set of forms. One of the forms is the Irregular Income Planning Sheet, Matthew. The Irregular Income Planning planning sheet works like this.

The things that you cannot get to in your budget that you want to do, should do, whatever. They don't make the cut on your regular budget, meaning the amount of money you know you can count on. You do a regular budget on that. The things you can't get to, you make a list of those things and say, I want to do this, I want to do this, I want to and say, I want to do this. I want to do this. I want to do this.

I want to do that. I need to do that. I should do that. Make a list of those things and look at them with a dollar amount beside them and say, which of these is the most important on here if I make enough above my regular budget to do one thing? Put a one beside that. What if I make enough to do one other thing? What do one thing, put a one beside that. What if I make enough to do one other thing? What would I do?

Put a two beside that. What if I make enough once I've done those two things to do one more thing? What would I do? You put a three beside that. And so on. You keep making your list from most important to least important. And rewrite it in that order from number one through number whatever. Most important to least important. Rewrite it in that order from number one through number whatever. Most important to least important.

And then when money comes in, beyond your regular budget, beyond the amount that you knew you could count on, is you have a better month, a bonus month, a commission month, you know, you're self-employed, whatever it is. Maybe you're working for tips and you have a great, great tip weekend. What are you going to do? You go down that list of priorities as far as you can. And then mark through it and rewrite the list because now some of those things don't have to be done anymore.

You've already done them. So, again, you go, what's your most important thing? Go ahead and do that as soon as you get some money. What's your next most important thing? Go ahead and do that as soon as you get some money. What's your next most important thing? Go ahead and do that. And a lot of times it will be like your debt snowball.

Your next smallest debt, your next smallest debt, your next smallest debt. We're going to throw money at that. It could be getting your baby step one in place, that baby step, that baby emergency fund of $1,000. It could be, you know, I can't afford to buy this item for the house. We really need it, but I really can't afford it until we get some extra money. And I put that in the budget. Whatever it is, it's in order, and you go down the list in order of importance, in order of priority. This is the Dave Ramsey Show.

You may feel like there's not a lot you can control these days, but I'm here to tell you, you can control your budget and you can control what you feed your family. My longtime friends at eMeals are here to help. They have simplified meal plans and created new recipe collections such as easy pantry meals and freezer meals utilizing basic ingredients. It has never been easier to shop smarter and stay on a budget. Try it free for two full weeks at eMe 4.8. Finally, brothers and sisters, whatever is true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is admirable,

if anything is excellent or praiseworthy, think about such things. Muhammad Ali said, what you're thinking about is what you're becoming. You become what you think about. Earl Nightingale said in The Strangest Secret, you become what you think about. Brooke is with us in Des Moines, Iowa. Hi, Brooke. Welcome to the Dave Ramsey Show.

Hi, Dave. How are you? Better than I deserve. What's up? So my husband and I are about to start Baby Step number two. And two of our loans do not have a minimum monthly payment, so we don't pay on a monthly. So how do we keep our debt snowball rolling and the motivation to keep it going?

When do you have to pay them? So our credit card, we don't have to do a monthly payment until August. Why? And my husband... Why? They said that it's just kind of a trial thing, so we don't have to do a minimum monthly payment. And don't pay a minimum monthly payment until you get to it on the debt snowball. Okay.

Let's make sure that's smallest to largest. Pay the minimum payment that you're allowed to pay legally under the deal that you're at this month and put all the money that you can squeeze out of your budget on your smallest debt. If it happens to be one of those credit cards that doesn't have a payment due yet at all, then still, you're just chunking a huge big pile of money on it. Everything you can squeeze out of your budget, you throw at your smallest debt when you're in baby step two.

And you've stopped all investing temporarily. And you've stopped all investing temporarily and you've stopped all saving temporarily. List your debts smallest to largest and attack them in that order while paying minimum payments on everything. If you have no minimum payment, the minimum payment is zero unless that's the debt you're coming to and the debt snowball and then it's everything you can squeeze out of your budget. Regardless of if there's not a payment due, you're still going to pay it off as quickly as you can. If it's a zero interest, doesn't matter.

We're still going to pay it off as fast as we can. Because the interest and the payment amounts are not your problem. The debt is the problem that we're trying to clear. And once we realize that, then we've got to attack all of it. And we attack it in the order of smallest to largest. Martha is in Chicago. Hey, Martha, welcome to the Dave Ramsey Show. Hi, Mr. Ramsey.

Thank you for taking my call. Sure. What's up in your world? So I'm very young, married, and we only have a very small car debt. We have our home paid off. But now we're at the stage where we are looking into investing. We've done all the other baby steps. But my job only offers a 457B, so it doesn't have any matching other than the pension.

How do I go about knowing what to invest or how to even understand it? I don't want to just risk my money out there. I want to know what I'm getting into. That's very wise on your part. How old are you? I'm 25. And what's your household income? Forty-five.

Forty-five thousand? Yes. My husband's currently in school. good when's he graduate well he's doing his doctorate so this is his last year of coursework and we're paying out of pocket for it good good okay well the baby steps tell you to be out of debt and build your emergency fund before you start investing have you heard that before yes you're not out of debt and build your emergency fund before you start investing. Have you heard that before? Yes. You're not out of debt. You have a car loan. Right.

Okay. So we're going to get out of debt first. Okay. How much do you owe on your car? $4,000. Oh, good. Okay. So goal number one, baby step one, is save $1,000.

Do you have any money saved at all? Yes, we already have a six-month saved as well. We just didn't pay the car loan because it's a 1% interest. How much do you have in savings? We have $15,000. Why have you not paid the car loan? Because it was 1% interest, so we figured we'd leave that there. Okay, so you're really working your plan.

In a way, yes. But we have to pay it. Today. Today. Okay. Pay it today, and then build your emergency fund up to three to six months of expenses, and then start saving 15% of your income into retirement. You can both do a $6,000 Roth IRA or less than a $6,000 Roth IRA, and you're going to be there.

So you only need to save about one Roth IRA in good growth stock mutual funds. You can sit down with your SmartVestor Pro, and they'll help you pick some good mutual funds. That'll be better than the 457 because it's tax-free growth, and the 457 is tax-deferred growth because it is deferred comp. So sit down with your SmartVestor Pro after you pay off your car today, and after you're out of debt, and then you have your emergency fund of three to six months of expenses, then you start investing. And so that way, we're not trying to do things-ish.

So here's the rule, Martha. We know you're wrong about your 1% theory. I don't want to pay off the car because it's 1% interest. How do we know you're wrong? Because it's Dave's opinion? No. We studied and talked to 10,000 millionaires. None of them, not one, said,

I built wealth because I took advantage of low-interest borrowing on consumer items like cars, and thereby I was able to get rich. Not one of them said that. The vast majority of them, 70% to 80%, depending on what the question was we were asking, said they stayed away from car debt, credit card debt, student loan debt. They stayed away from debt like it was the plague, regardless of the interest rate on the debt. They were not trying to play some kind of a math game and beat up a car company. The only way you got 1% on a car was you bought a new car,

so you lost a lot more than 1% when you drove it off the lot. So this is all an illusion. It's smoke and mirrors. Pay off your car today, then build your emergency fund, then start your Roth IRA with a SmartVestor Pro, and you'll begin building wealth, even with a $45,000 income. Well done, kiddo. You can do this. No ish, though. We $45,000 income. Well done, kiddo. You can do this.

No ish, though. We don't do ish. Plan ish. Baby steps ish. Well, we're sort of doing your plan. There is no sort of. You're either doing it or you isn't. You've got to decide.

Christina's in Los Angeles. Hi, Christina. I'm short on time. Go straight to your question. Sure. Thanks for taking my call. Sure. I'm short on time. Go straight to your question. Sure. Thanks for taking my call. Sure. I just started Baby Step 1 last month and was able to put aside $350.

Good. But then I just did my taxes and found out that we owe $740. Ouch. Right. So I'm kind of, you you know going backwards in a way and i'm really wanting to pay off all my credit card debt what's your household income 72 000 okay get one thousand dollars in the bank for your baby emergency fund and another 700 to pay the irs and then you'll begin your debt snowball.

Right. But $1,700, you make $72,000 a year. Tighten that budget up and stay out of restaurants. Well, we don't do restaurants at all. You're doing something. Well, what happened was we now owe our student loans because I've ended up exceeding all of my forbearance. Okay. But now we've just started paying our student loans of I've ended up exceeding all of my forbearance. Okay. So now we've just started paying our student loans of $400 a month.

And you make $72,000 a year. Yeah, with my husband and I, yes. So sit down and do your every dollar budget and tighten it up. Nothing you've told me yet keeps you from having $1,700. You're just starting the plan. For the first time ever, you're telling money what to do instead of wondering where it went. It has great power when you do that. You're going to be amazed at how much traction you get.

Hold on. I'm going to send you a copy of the book, The Total Money Makeover, if you don't already have one, to make sure you've got all the steps and exactly what to do. You can do this, kiddo. You call me back if I can help you more. 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. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show. Please hear me loud and clear. The government is not going to bail you out of your student loans, at least not completely and not without a catch. What they're talking about only impacts federal, not private loans,

and you need to take responsibility for what you owe and pay your debt down quicker. Right now, Splash Financial is offering their lowest rates ever. With lower rates and extra payments, you could just find yourself debt-free in the next five years. Visit SplashFinancial.com slash Ramsey to see if you qualify.