The Ramsey Show - App - Should I Sell My Car to Help My Mom? (Hour 2)

Episode Date: July 6, 2020

Home Buying, Retirement, Debt, Investing, Budgeting, Education Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

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. Chris Hogan, Ramsey Personality, is my co-host today here on the show. This is the Dave Ramsey Show, where we talk about your life and your money. Open phones at 888-825-5225. That's 888-825-5225. Jerry's in Oregon.

Hi, Jerry. Welcome to the Dave Ramsey Show. Hey, guys. Great to talk to you today. First thing I got to tell you, it's my wife's birthday today, and the one thing she wanted to do was talk to you guys, so here we are. All right. Well, happy birthday. What's her name? Yeah. This is Shelby. It's my wife. Happy birthday, Shelby. Cool.

Yeah. So our question for you guys today, so we have some money set aside to buy a house. Some of it's in a mutual fund that's non-retirement that we were earmarking for a house and then we have some in an inherited roth ira and we were wondering what you guys thought about using that um in addition to our non-retirement mutual fund to purchase a house since it will grow tax-free for um till the end of time so what are you guys thought well it's 50 50 if it was a regular Roth, I would say no. Never touch retirement plans for buying a house, okay?

But this is not a regular. It's an inherited. Right. And so you'll pay taxes on it when you pull the money out, right? Yep. And on the growth, anyway. Oh, no. On the growth.

Yeah. On the growth, you will. If it's an inherited IRA. Well, if it's a Roth, it probably doesn't. No. I don't think I just screwed that up. My IRA investor professional told us it wouldn't. Yeah, no taxes.

No taxes. How much is in there? $65,000. How much you got saved in your other mutual fund for your down payment? About $170,000. So you're just going to pay cash for a house? Well, we were hoping to. We live in a pretty expensive

area, but we figure if we save for... We think we can pay cash if we use both the regular mutual fund and the inherited Roth. If we save for the next five years, then if we don't use the inherited Roth, it might be more like

seven wow until we can buy a house with cash why don't you buy a little house for cash and just live in it while you're saving up um well i mean we've looked we live in bend so um i mean about the if you want a mobile home you can get something for under about $290, but $325 seems to be about where we have to start. Jerry, you know you've got to drive out a little further. Okay. No, you know, you get my point. We're not putting you in a mobile home.

Yeah, we're not going to do that. They go down in value. But, yeah, yes, I would cash out the Roth, especially if it allowed you to pay cash, We're not putting you in a mobile home. Yeah, we're not going to do that. They go down in value. But, yeah, yes, I would cash out the Roth, especially if it allowed you to pay cash. And our recommendation would be to buy an inexpensive home. And, you know, it's been a while since I've been to Bend, Oregon, but it's hard for me to believe that the average household, average house price in Bend, Oregon is double the national average. Because the national average is $220 right now.

Right. And here's the thing, Dave. As you know, you are the real estate guru. You've got to go in smart with a game plan and what you're going to buy, right, and be very intentional and be clear on that. It's not an emotional decision. This is a business decision. And if you can go in and pay cash for a home, that is definitely the way to go. And be intentional about what you're going to do as far as furnishing this thing as you move along. Yeah, use your income without a house payment to furnish it, and then use your income without a house payment to build up and move up in-house

later with cash. That's right. That would be my favorite plan, and I would use the Roth for that, the inherited Roth. I would not use a regular Roth ever to buy a house. And ever is like... Ever. Ever. People will call in to challenge you, Dave. Well, just to make sure they're not the exception. Drew's in Massachusetts.

Hey, Drew, how can Chris and I help? Hi, Dave. Thanks so much for taking my call. Sure. I just graduated in May, and I started a full-time job. I'm 23 years old, and I have to start saving for my 401K next month. So I was wondering what you recommend. My parents want me to invest the 15% that you recommend,

and they match 6%, so I just didn't know. Wow. Drew, how old are you? I'm 23. 23 years old, and you're going to start investing soon. I love hearing this. Have your parents always taught you about money, or are you self-taught? They started listening to Dave a couple years ago, so they kind of got me listening too, so everything kind of changed a couple years ago, so they kind of got me listening too.

So everything kind of changed a few years ago. That is fantastic. So do you have any debt at all? Um, I've paid off about half of my loans already, so I have about $11,000 left. Okay, you got $11,000 left in student loans? Yeah. Okay, and do you have an emergency fund? Yep.

Okay, how much do you have in your emergency? How much? I just have just $1,000 in emergency. And then I have a couple thousand that I've been saving for my loan. Okay. See, I love this. The mindset. But here's what I'm going to do, because the key to being successful is to not only follow

a plan, but follow it in order. The recipe I'm about to lay out for you is one that's helped over 7 million families. So hear me with this. What I would advise you do before you start trying to invest is I would attack the rest of that $11,000 in the student loans that you have. And once you get that out of your life, I want you to build up a fully funded emergency fund of three to six months of expenses. And you're going to put that in a money market account. Now, once that's there, now you're ready to start investing and saving for the future. Does that make sense? Yeah.

Yeah. So, but people have been recommending that because they're matching the 6%, that I should at least do that before I even finish. People are wrong. Yeah. Did your parents tell you this? No. Okay. Most people are broke, so don't listen to people. Yeah, Did your parents tell you this? No. Okay.

Most people are broke, so don't listen to people. Yeah, don't listen to that. And, again, that mindset, because we don't want these student loans hanging around like it's a family friend. It's not. You're 23. Yeah. It's not going to take you long to knock out the $11,000. When that's gone, you build that emergency fund.

Then you start your 401K. You take advantage of that match. You're not going to miss the match for very long. It's going to be like a year. And it's not going to keep you from being a millionaire. What will keep you from being a millionaire is if you cash out your 401k when your car transmission goes out because you got debt and don't have an emergency fund. And that's the mistake that everybody makes when they think, oh, I have to go do the match. I have to go do the match. And then they step off the edge of the cliff. No, they really do, Dave. And again, it's it's

it is following the plan. It's the recipe. And I can remember, Dave, I got out of grad school and they had taught me dumb stuff, OPM, other people's money and leverage and all this stuff. And I thought I was ready to go. And I did more stupid than the law would allow. Um, and you know, without a plan, you can make more and earn more and make more, but you don't get anywhere. And it's a treadmill. And I know people are out there are tired of being on that treadmill. And I want to talk to the old, the younger Hogan's out there that say, you know, I'm going to wait till I start making X to get serious. Do me a favor. Don't believe in that fantasy. Don't start waiting until anything. Start today and get serious and manage whatever it is you're making today very well.

It prepares you to be ready for more later. Absolutely. Chris Hogan, my co-host this day on the Dave Ramsey Show. James Child sitting in the booth with Madison. We are here to help you. This is called the Dave 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 I make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called Shady Rays. When you're looking for

sunglasses, it feels like your options are limited. Name brand sunglasses cost too much, and the cheap knockoffs are ugly, and they don't really protect your eyes. Discovering Shady Rays is a game changer. With Shady Rays, you can count on premium sunglasses that protect your eyes and, get this, they're affordable. They give people the best overall value in sunglasses. They also replace your shades with a brand new pair if you lose or break them from day one of your purchase. Plus, they offer an exclusive for Ramsey Show listeners. listeners right now you can grab most polarized pairs for just 28 at shadyrays.com with the promo code dave to get 20 off your first pair of shady rays Alex is with us. Alex is in Illinois.

Welcome to the Dave Ramsey Show, Alex. Hi, thanks, Dave. Thanks for taking my call. My financial situation is as follows. I'm 25 years old. I live at home with an income just north of $200,000. I have $70,000 in a savings account and no debt besides the car that I purchased in January, which is the my mother has encountered some financial struggles as her alimony situation has dramatically changed. I want to help her out more with expenses. As I mentioned, I bought the car in January for $39,000, and I'm now getting offers from dealers for approximately $32,000,

and I owe $26,000 on the car. You make $200,000 and you have $70,000 in the bank. That's correct. What would be wrong with paying it off? I'm sorry? What would be wrong with just paying it off? Is that what you think I should do? If you like the car. Actually, now that I've lived, it wouldn't hurt too bad getting something different.

So I don't know if I should sell it, get something cheaper, pay it off, lease something. I don't know why you would need to. You don't have any bills. You don't need to financially. How much are you going to be giving your mother? Probably a couple thousand a month. Okay. For how long?

For the foreseeable future. I anticipate my income increasing yearly, but I'd like to keep on assisting as much as I can. Okay. Well, that's admirable. How old is she? She is 70. 70? Correct.

Okay. All right, let's break these things apart. There's three things here I'm dealing with. Number one, I've got a 25-year-old that makes $200,000 a year living at home. I'm out of there. Number two, you've got a car that you can afford. It's less than half your annual income, and you have the money to pay it off. Pay it off.

Number three, you make $200,000 a year. If you want to give your mom some money, you can do that. I do not want to set up a situation where you do that in perpetuation with her. That's what you were thinking. I could see your head moving, Hogan. Yeah, absolutely. Alex, what has caused her financial situation to become tough like this? Her ex-husband has gone into court and decided to stop paying alimony.

Okay. And you are currently living with her right now? That is correct. Okay. Okay, so how much more alimony does he owe her? His intention is to not owe her anything. I didn't ask that. How long is he supposed to owe her? His intention is to not owe her anything. I didn't ask that. How long is he supposed to pay her?

He's supposed to pay in perpetuity. Okay. Okay. And so how much is she receiving from him when he pays? Approximately $15,000 a month. A month? A month. And she doesn't have any money?

No, she does. She does. Then why does she need money from you? Well, she would never say that she needed it. How long has she been making $15,000 a month? Only the last five to six years. And has no money. You don't know what she has to show for it.

You don't have any idea what her financial condition is. I know it's not where she would like it to be. She owns a large house and plans on selling it, and I think that's where all of her money is tied up. Alex, I would say this, my friend. It's admirable that you want to help your mom. The deal is that she's got to want to be helped. And this is going to boil down to her taking control of her money.

And as Dave said, the idea of you signing on to give her two grand a month from now until kingdom come, to me it sounds like that's going now until kingdom come, to me, it sounds like that's going to be a bad path to take. If she wants to sit down and talk with you, or better yet, I'd probably send her to a financial coach. We have those that we've got trained across the country. But you need to take control of your situation, buddy. And you pay off the car.

Do not lease anything. I can't believe you mentioned that as an option. Absolutely not. Either pay off what you have or sell it or buy something for cash. But, you know, you've got a good income. You've got opportunities ahead of you. You just need a plan. All right.

Here's the thing, okay? She got $15,000 a month for five years and did not put herself in good financial condition. You cannot support that kind of behavior. You can support her and make sure she has food. But this lady is used to living pretty high on the hog. And you're not her new sugar daddy. That is not a healthy relationship for her or for you. If you need to help your mom have food or help your mom have basic shelter or help her through a transitional

time or give her $15,000 to pay a lawyer so that she goes and whips this guy's butt and he does pay the alimony, all of that's fine. But this, you know, for the foreseeable future was your answer, bad answer. Yeah. Not because you're not a good guy, but because it's not good for her to eat out of the pocket of her own son after she hasn't handled $15,000 a month well enough to be able to support herself. Hope that wasn't unkind. But I know this is your mom I'm calling out. But she's been irresponsible at a minimum.

That's what we're hearing. And so you cannot plug into this as a perpetuation IV into this and just be pouring your life's blood into this. And it's very kind of you to help and you make a lot of money and all that's good. And you do really not need to live there. Really, really,

really. It's just one guy to another. Okay. There's a lot of, there's a lot of stuff going on here in the psychology of this. And it's just going to be really good for you to be on your own if you have some clear boundaries and kindness and support of your mom for with a little bit more distance yeah and uh and one of the things i'm going to support her in uh is to aggressively defeat this attempt to stop alimony um and i'm gonna i'm gonna go in there and fight that and I'm going to spend some money on that.

$15,000 a year is worth fighting about. A month. I mean, $15,000 a month. A month. I'm just trying to. Yeah, I mean, it's astronomical. $160,000 a year. I mean, you cannot just let the guy win that battle.

So if you spend some money on that fight, good. If you spend some money on food, good. Pay off your car, move out. See, the problem is when you call in here, you get a full set of answers. You don't just get the answer to your question. That's right. Because these things all work together to accomplish where you're going to be as a man in, you know, in just a few more years. You're already a man.

But, I mean, as a 30-year-old man making this kind of money, where are you going to be? That's right. And the last thing you want to do is put yourself in a codependent situation without any guardrails, my friend. So, Alex, I appreciate you calling in. You've got a good heart. You've got more than you bargained for, but you've got some life advice that can put you on the right path. You've got a good heart bargained for, but you've got some life advice that can put you on the right path.

You've got a good heart, dude. Yeah. All right, Danny is with us in Texas. Hi, Danny. Welcome to the Dave Ramsey Show. Hi, Dave. Hi, Chris. Thanks for taking my call.

Sure. What's up? So, my husband and I are getting closer to baby steps. I'm having trouble hearing you. You're going to have to talk directly into your phone. Oh, I'm sorry. Can you hear me okay now? No, not really.

I'll put you on hold, and we'll pick you back up in a little while and see if we can get your phone fixed out. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Katie on Twitter wants to know, is there a minimum amount for an emergency fund? Six months of living expenses in my case would only be around $1'm 31 single with a dog you miscalculated that katie there

can't that's not possible katie two hundred dollars a month there's no way you're not eating okay i mean i spend at least a dog eats that i spend at least 100 on hair care okay you didn't need to laugh like out loud. I'm sorry. It's skin care. I got a lot of skin. Yeah, well, it needs care, that's for sure. Now, Katie, go back, do the math, honey. You need to look and see what it takes for you to survive month in and month out.

That's what you want three to six months of. Including the dog. Yes. That's more than $1,500 for six months. Rover needs to eat. He might need skin care. You never know. 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. They could have faced a huge financial setback, but thanks to Christian Healthcare Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually support each other. CHM is the longest-serving health cost-sharing ministry and is a Better Business Bureau-accredited charity.

It's Christians helping other Christians, and it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. In the lobby of Ramsey Solutions on the debt-free stage, Jackson and Carly are with us. Hey, guys, how are you?

Hi. Hey. Thank you for having us. Yes. We're honored to have you. Where do you guys live? We're from Bedford, Indiana. Oh, cool.

Welcome to Nashville. And all the way down here to do a debt-free scream. Yep. How much have you paid off? We have paid off $38,000 in 13 months. And actually, before that, I paid off $9,000 on my own. Okay, cool. And what's your household income during that 13 months range? We started at $90,000 and we went down to about $84,000. Okay, cool. So what happened 13 months ago? You got married, it sounds like. So I graduated college a year before she did.

Had some student loan debt and knew that we needed to get that knocked out. We had some dreams and some goals and different things we wanted to accomplish. And in order to do that, we needed to get rid of our debt. How long have you been married? Just two years, a week ago. Okay, so two years, but the last 13 months you got after the debt and knocked it out. Yes. Okay, so how did all this get started that you decide, okay, because, I mean, most people don't do that.

You just go, okay, we've been married a year. We're getting out of debt. So how did that happen? Early on, we're very blessed by our parents. Both follow you and kind of got myself hooked on it. I read Total Money Makeover. We got involved with FPU at our church. Oh, wow.

I've also read Everyday Millionaire. Okay. So just a lot of different things. So you're a couple of financial peace babies getting married. You can't help but do this. Right. I love it. I love it.

And we saw Chris Hogan live in Indianapolis before we got married. Well, that did it. Oh, there we go. There's the breakthrough. We get to the root. There's the breakthrough. Not the motivation, Dave. That's the big breakthrough right there.

I knew I liked these people. Mr. Skincare himself. This is fantastic. So what was this debt you paid off? It was all student loans. All of it? Yeah. You had 20?

I had a total of 28 when I graduated. And I had about 18. Okay. Wow. Very cool. What are your degrees in? I'm elementary education. And I'm a dietician.

Okay. All right. Are you teaching in elementary? Yes. I teach fourth grade and coach basketball as well. Very neat. Good for you. That's so fun.

Do you all realize what you've done? Has it sunk in? Seriously. This is like a generational thing that just happened right here. It really is. You brought the whole posse to cheer for you. Mom and dad are over here. Everybody's here to scream. I mean, this is pretty incredible.

Yeah. We're, it, yeah. I think the first week when the paycheck went into the savings account and it didn't go to the student loan. And it started piling up that was kind of when it when it sunk in so we actually yeah we actually paid off in november so we have our emergency fund completed and we are saving now for a house wow yeah so we actually before we got married we knew we wanted to pay off our student student loans we didn't want to do that forever and you know when you get married people house, when you're buying a house. And

we thought about it. But before we got married, we have these great friends. We've been so blessed. They had this tiny home and it's 380 square feet and they are letting us rent it. And so we've been there for the past two years. Oh, wow. How big is it? 380 square feet. Oh. So it's like a one-car garage, and it has 380 square feet above it, and that's where we live and our 80-pound dog. Wow. I love it.

Yeah. And now you can do anything you want to do for the rest of your life. That's right. Yep, we have some goals. How old are you right now? I'm 24. I the price. Yeah, we have some goals. How old are you right now? I'm 24. I'm 26. Wow.

Yeah, but you're going to pay cash for a house then, right? Pretty quick. Or almost. Yeah, yeah. I mean, you're going to be really close. We don't know yet. We're getting there. You're going to be really close.

You just need to be real smart about that purchase. Yes. Right? Yes. Yeah, we're already saving for that. We're just kind of waiting for the right thing and the right price and the right location. So how much was the rent on this above the garage? We paid $250 a month.

Woo! That is. Yeah, that's how we've been able to pay off. So about half of our income, monthly income, went to student loans. So when you're like old and you've got grandbabies on your knee and you're living in this like super huge luxurious house, like a $5 or $10 million house, and the grandbabies are on your knee, I want you to get the pictures out. Take lots of pictures and go,

Yeah, back in the day, Granny lived in 380 square feet. By God, that's how we got here. Oh, yeah. We've made great memories. And honestly, people say, how do you do it? How have you lived in that area? Oh, you poor little thing. And we're just like, we didn't live together before we were married.

And this is all we know. And we've come to love it. And we hope to not stay there too much longer but well you get a big old place you won't even see each other right it's gonna take away the whole thing you'll need an intercom you guys got to go outside to change your mind right now yeah but you know what you sacrificed and i'm gonna tell you so proud of you you're like perfect this is a perfect example of what to do. Because it was a short period of time, and now you've lived like no one else. Now you can live and give like no one else.

No discipline seems pleasant at the time, but it yields a harvest of righteousness. And that's where you guys are. I'm so proud of you. You're heroes. You set a standard that's fabulous. You're just very, very well done. You can do it. And what you're doing is just, by the way you've lived, you're yelling out there,

folks, you can do this and what you're doing is just by the way you've lived you're yelling out there folks you can do this yeah for sure thanks for thanks for this testimony of your lives and the way you've lived i know your mom and dad are super proud of you who were your who were your biggest cheerleaders well we brought we brought them all with you half of bedford indiana's out here them and um we did f. And so that grew. Yeah. The leaders. Yeah, they were great. Yeah. I mean, most people who know us know where we live and know why we live there.

So we've been able to talk about it. And we've just been so blessed. We have good jobs. And, you know, God's just been so good. Like, we plan to pay off $2,000 every month towards our student loans. And if you do the math, God was just so good. And I wish I would have wrote down all the months that we were able to pay more. And I think it's just blessing us because we decided to move into 380 square feet.

But it's been good. Our first two years of marriage, I guess, are supposed to be the hardest. And they've just been great. We decided early on that we're young and we didn't want to sacrifice fun, so we did sacrifice space, but we went on trips and we went to concerts and we just did fun things along the way that we saved for. That's a good tradeoff. Yeah, we budgeted in all that, and so worth it. So what is your number one key? Now you're teaching Financial Peace University

at the ripe old age of 24 and 25. And people say, how did you do this? How did you pay off $38,000 in 13 months? What do you tell them the number one thing, the number two thing they need to do about getting out of debt is? The budget. I was the free spirit. She was the nerd.

And she mentioned going and doing things. We got to go to a couple basketball games. And that's what kind of hooked me. We were on the budget, but we were still able to do the fun stuff because we planned for it. And that was big for me. Yeah. The budget, and we did the envelope system. And Jackson loves to eat out, and that's kind of our joke.

And so it's like we had an out-to-eat envelope because that was something we couldn't sacrifice. And so because we went on the budget, it was like, you know, here's $20. We've got to pick a restaurant where we can go for $20. And you just have to stick to it. You know, if there's not money there and he's a visual and it's not there, you just don't do it. But you both have to be on board. Yeah. Because if you're not, then you're not.

And because we're both on board and we're doing this, and gosh, it's been so good. Like, we don't fight about money. If there's not money, we don't do it. I just want to get a bottle of this right here. Yes. And I think I could just put it on the shelf and people would drink it. This is unbelievable. Y'all are incredible.

Y'all are absolute heroes. I'm so proud of you. And listen, I'd give you a copy of Chris's book, but you already got one. So you just pick out anything over there you want. The bookstore will give you one. And we appreciate you guys so much. Thank you. All right. It is Jackson and Carly from Bloomington, Indiana, Bedford, Indiana area. Thirty eight thousand dollars paid off at twenty four and twenty six. No debt. Three hundred and eighty square foot garage apartment. Pull this off. This is what you do for a little while.

You live like no one else so that later you can live and give like no one else. You guys are incredible. I'm so proud of you. 38,000 in 13 months. Count it down. Let's hear a debt-free scream. Three, two, one. We a debt-free scream three two one we're dead free now i started this i had no idea i was going to be doing debt-free screams with the kids of the

people i taught i mean that's amazing dave yeah but if i keep it up long enough there'll be great babies down there that's it this This is the Dave Ramsey Show, Ramsey personality, Chris Hogan, number one best-selling author a couple times over. Open phones at 888-825-5225. 888-825-5225 888-825-5225 the number of these people coming through on the debt-free screams that have been through financial peace university and now they're 100 debt-free and they have their emergency fund in place it's most of them these days and you know when stuff like covet hits and you got twenty thousand dollars

in debt and no money it's a different world than if covet hits and you got twenty thousand dollars in the bank and no debt that's right it's a different world and uh you know so sometimes you go through stuff like this it's not for me to say i told you so but you do need to have your never again moment your i've had it. I will never be back here again. And so we are launching something new, something huge. We've just started talking about it in the last couple of weeks. We've been working on it for a year. But we've gotten it, and we weren't planning to launch it for about three or four more months.

But with the changes in the marketplace, we felt like now's the time to get it out and help you guys. It's called ramsey plus it is the all access membership that gives you all of our very best money products all nine lessons of financial peace university are in it uh every dollar and every dollar sink which sinks up with your bank sinks up with your spouse so we all are on the budget so we're learning we're budgeting and now with the new baby steps app that our team has done you can track your progress and you need to see visually see your progress and get to watch it and they're all tied together they all work together and then of course there's a whole bunch of other lessons in

there chris and rachel did a lesson called Jump Start, How to Get a Quick Start. Rachel did a lesson that's very popular on doing the budget in addition to Financial Peace, the Legacy Journey, which is the follow-up class to Financial Peace, Smart Money, Smart Kids for Teaching Your Kids About Money. All of these classes are in the Learn section of Ramsey Plus. And right now, if you're ready to say never again, we're going to give you a free trial to Ramsey Plus. And right now, if you're ready to say never again, we're going to give you a free trial to Ramsey Plus. If you want a free trial to Ramsey Plus, just text TRIAL to 33789.

Text TRIAL to 33789. And with the What Now event last week, we learned this morning that about 5,000 people started a free trial last Thursday through about Saturday. Yeah, which is absolutely outstanding. That means, Dave, we had 5,000 people out there that said never again. And they are going to put themselves on the path to being able to have that internal financial peace because they know they're working a plan that works and they've got people around them that believe in them. And the community function, I can't stop talking about that because that's the game changer. The information is amazing.

There's world-class teaching inside of there, but the community aspect of it is huge as well. Yeah. I mean, it's you and me and Rachel and Anthony in the financial peace class itself. But being there and the coach aspect, there's a 15-minute free thing with a coach. Yes. Let me say this. How many of you have been out there and you go, I wish I could call Dave, right? I wish I could get in there.

You've got an opportunity through Ramsey Plus to be able to reach out to a financial coach about your question, your own coach. And so that's a great opportunity that gives you access that, again, if you're inside of Ramsey Plus, that comes with it. So, again, go check it out. You definitely want to get plugged in so you can change your future. Text TRIAL to 33789. Carlos is in New York. Hey, Carlos, welcome to the Dave Ramsey Show. Hi, Dave. Hi, Chris.

Thank you for taking my call. Sure. What's up? So I am 25 years old. I'm currently working through Baby Shed 2, and I'm actually looking to propose to my girlfriend. When are you doing this? I'm calling you to see when you think it would be best. I'm currently walking through Baby Step 2,

and I wanted to check with you to see if you had any guidance on if Dave Ramsey has any guidance on how much I should spend on a ring and if I should put off proposing until I'm through Baby Step 2. No, you should not. You should propose immediately. Well, hold on a second, Dave. Carlos, how long have you known this woman? We've been together for almost nine years.

Oh, good Lord. It's time to paint her. Get off the ladder. Oh, my gosh. That's ridiculous. Nine years. All right, here we go. All right, here we go. Uh-oh.

All right, here we go. So the jewelry store will tell you three months of your income on the ring, but Common Sense will tell you one month. What do you make? $95,000 a year. Woo! Girls are going to get a good ring. All right, so, I mean, you know, one month's income.

What's your take-home pay for a month? For a month? Yeah. I would say somewhere around like $6,000, $7, one month's income. What's your take-home pay for a month? For a month? Yeah. I would say somewhere around like $6,000, $7,000, I think. Okay. You want to spend that much? I'll be comfortable spending that much. I think, honestly, I'm looking to be done with Baby Step 2 within this year.

Yeah. I would stop your Baby Step 2 immediately, save up the money for the ring, go buy the ring, whatever it is. It needs to be under $5,000. Okay. $5,000 or $6,000, something like that, and that's your cap. And go buy the ring and then restart your plan. Okay.

Okay, that sounds awesome. Yeah. Thank you. Because she might wake up and realize that you've been procrastinating too long. You don't want this to happen. Carla, it's been nine years. At nine years, you better go get a ring for this girl who leaves you. Most of the time, mostly we were in school together and things like that.

Okay. That's cool. I'm just kidding. We're giving you a hard time, but you deserve it. No, just picking on you, buddy. But hey, if you found it, if you found the good one, go take care of it. But like Dave said, get back to the baby steps. What ends up happening, Carlos, is people will pause for one reason or another, and

then they end up finding three to four other reasons. You've been intentional and you don't want this debt coming with you into your marriage. So get the ring, get back on the on track, be very intentional moving forward, and delete this debt from your life. Yeah, let me say what Chris said a different way. It's okay if the debt comes with you into the marriage, but it's not okay if it comes with you into the marriage because you didn't address it. Yes. That's what he's saying. But we're not saying you have to be debt-free to get married.

You asked that question earlier. That's true. I want to be clear on that. We don't tell people that. We don't tell people they have to be debt-free to have babies. We don't tell people they have to be debt-free to get married. But you do have to be on the same page. You have to be in agreement that we're going this way with money.

And you need to be that whether you're debt-free or not. So that's the whole plan. And way to go. Congratulations. Let us know when you get engaged. We want to celebrate with you. That's awesome the whole plan. And way to go. Congratulations. Let us know when you get engaged. We want to celebrate with you. That's awesome, man. Very cool. All right. Danny is with us in Texas. Hi, Danny. How are you? Hi, I'm great. Thanks for taking my call. Sure. I'm a little short on time. Go straight to your question. So my husband and I are looking at starting

Baby Step number five. We're both self-employed with trades, so I realize that that probably could be an option in my children's future, but I want to have the money there in savings for college. So I'm a little bit apprehensive about like a 529 where we're going to be penalized if we pull that out for trade school and have money left over, want to pay for down payment for a house later. You'll only be taxed on the growth. Okay.

And so you don't get penalized on what you put in. And you would be taxed on the growth is all. And you're going to be taxed on it anyway if you put in something else. So you might as well try it. And a lot of trade schools, 529 will work for it. If he's just going to do a straight-up apprenticeship, it might not. But if he's going to go do Vo-Tech for two years, it qualifies for 529. Okay.

What's your trade? So I'm a hairstylist, and my husband runs a construction company. He's a welder. Okay. runs a construction company he's a welder okay so if he did if he did two years in uh welding at the votec or did cosmetology or whatever or whatever barber school or whatever every bit of that qualifies for 529 okay okay and then with money left over uh would that still be tax penalized or yeah yeah if you don't if you don't use it all, don't overfund it. But let's put a chunk or two in there, and let's get, you know,

if you've got $10,000 or $20,000 in there, it's not going to kill you. If you've got $200,000 in there, you might overfund it with this guy. So you've got one kid? We have two, and one of them is already saying he wants to do construction just like Daddy. He's three. But I want the money to be there just in case. Okay.

Well. More early. Yeah, I don't think we can necessarily rely on that particular poll. But, yeah, I might be a fireman tomorrow. You never know. So that's awesome. Thank you for calling in. And that puts this hour of the Dave Ramsey Show in the books.

Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section, or head over to DaveRamsey.com and click Dave Recommends. Thanks for listening.