The Ramsey Show - App - Should We Pause the Baby Steps? (Hour 1)

Episode Date: May 21, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Thank you for joining us, America. The phone number is 888-825-5225. Ken Coleman, Ramsey personality, number one best-selling author, and also author of the bestseller, newly minted bestseller, Find the Work You're wired to do. Just hit the best seller list, boys and girls.

So congratulations, Ken. Thank you, sir. Very cool. You can hear him on the Ken Coleman Show on the Ramsey Networks as well. So we're glad you guys are with us today. We're here to help. 888-825-5225. Dexter is in Philadelphia.

Hi, Dexter. How are you? Good. How are you doing today, guys? Better than I deserve. What's up? Awesome. Awesome. Very good. A long-time listener here and really appreciate your show and how you guys really help a lot of people and things like that.

I have under circumstances, I met a very beautiful woman who I plan to be with for the rest of my life. Um, and we're dealing with a situation where, um, she is trying to basically get visitation for her daughter and she, um, uh, has been under a lot of financial stress. Um, and, uh, apparently I've been, you know, trying to do a lot to help with the circumstances. A lot of lawyer fees. The gentleman she had been married to is very hostile. I believe he is sort of has a condition or something. I guess it's more of a controlling control person.

And so I'm trying to, uh, do a lot of things to help in finance. And I just bought a home myself and I have paid, you know, pretty much for the home and I'm renovating and it's taken a lot of my finances out. Uh, I have four months to try to get moved in, but I've, you know, have a lot of financials to re re re, uh, renovate the place. So I'm kind of doing it on my own. Um, so new, the conditions, my, my, the girl I'm dating is actually trying to see,

give visitation to her, her daughter. And, uh, he won't allow her to see her daughter. And she had the cops come out to try and visitation to have visitation. And she just, he won't allow her to see her daughter. And he's controlling the daughter by buying gifts and doing a lot of things to control, uh, the relationship of, of you know of that situation so I got you okay so dating a hot mess yes yeah yes no doubt okay how can we help I'm trying to figure out she she doesn't want me to help her somewhat financial she's really

like saying look I got this. This is my mess. You know, she's stating that don't get involved or don't, you know, try not to. And so I'm helping out. She's also helping me write a new place. So then I try to, you know, help her with other things and do things to whatever I can do. She allowed me to help with, um, and she's in a situation where all her finances are into a lawyer who is fighting so she can even just get visitation.

And she's basically in debt with her family because her family has given her money to help out with the situation. Um, what does she make a year? She makes probably, I want to say, maybe $50,000 a year, $55,000. Okay. All right. So you've still not asked a question, but I'll just go ahead and give you a comment or two, okay?

Okay. Number one, do not contribute money to someone's situation that you are not married to yes if you're married it's now your problem if you're not married you can cheer you can uh be a shoulder to cry on uh you can be angry with her you can participate emotionally and relationally in her fight um and so forth but do not transfer money you're going to change the tone of your relationship if you do and you're going to regret it later do not pay her bills when you are not married to her under any circumstances period i've been doing this a long time 100 of the time people do this they wish they didn't for one reason or another it

always bites you later in the butt don't do that okay that's very it's a true statement yes now then on top but but i want you to be supportive for her. She's obviously going through a hard time. You're obviously emotionally invested, and that's cool. I've got no issue with that at all. Have at it. You're supporting somebody you care about, and they're going through a hard time. Do it.

That's what good people do. You're a good man. Okay. As far as your house goes, you just bought a house. You've got to renovate. Okay? And if you didn't have the money to do the renovation, you shouldn't have bought a house you got to renovate okay and um if you didn't have the money to do the renovation you shouldn't have bought a house that needed renovation so you need to step in there and

get that sucker done and get moved into it but again that's got nothing to do with her finances it's as if you told me two different stories you have the story of the house which is completely independent of the story of her except the part where she's helping you sweep and do some of the renovation or whatever she maybe she's swinging a sweep and do some of the renovation or whatever she maybe she's swinging a hammer and hanging drywall i don't know what she's doing but uh but you know that part there's a little bit of overlap but the rest of these are two separate stories and they need to remain two separate stories yes true okay and so and i think what you're what you're struggling with is you've fallen for her,

which is not a bad thing. I'm not saying she's not worthy of that. And so you're starting to want to treat this like a marriage situation before it is. And I'm telling you, when it's a marriage situation, you're all in, buddy. You signed up for the trip. You take the trip. But until then, you're just a supportive boyfriend.

Yeah, and I'll just add, Dexter, Dave's 100% right. So don't think that the out here is to go ahead and make the marriage happen because I could hear it all over yourself, your voice. She said she didn't need help. It's my mess. But I could hear the but coming, and I think you need to wait. This thing needs to resolve itself before you guys get married. That's just my opinion.

But don't think all of a sudden that what Dave said is, well, the asterisk is, if I'm merrier now, now I can jump into this. And I think you've got financial troubles. You're not clear as you need to be financially with some margins. So you're just going to have to wait this thing out. Yeah, get the house renovated, get the visitation settled, and then you're both dealing from strength, not weakness, to build a quality relationship. And I think Dr. John Deloney, where he's sitting here, will just channel our own inner Dr.

Deloney. I like channeling any inner doctor stuff because I don't have a doctor. So there you go. I have a doctor, but I am not a doctor. Does that mean we have to take the same medication he does? I hope not. I wouldn't want to have those. I don't have any tattoos or I can't do this.

I wouldn't want to have that twitch. If I do this, I look silly. He looks cool when he does it. But I think you're right. I mean, I think we got to be careful here. Let's get through this time. Yeah, deal in relationships from strength. And you don't make yourself better when you're hurting by marrying someone.

That just brought your hurt into the marriage is all it does. Or your battle or your, God help you, a house renovation. I'm not sure which one I'd rather have. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy.

So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes

far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Ken Coleman Ramsey personality is my co-host today. Thank you for joining us, America. We're so glad you are here. Well, graduation season is here, and so the goods are here for the graduates. Ken's a brand new bestseller, Find the Work, Your Wired Do, which includes the famous Get Clear Assessment. And you get an

assessment code built into it. Almost 100,000 folks have bought the assessment and taken it online at ramseysolutions.com. Now you get the book that tells you how to read and go through the results and how to apply the results. That's a great gift for a graduate. Breaking Free from Broke by George Camel, speaking the language of that generation, of you generations that just graduated, whether it be high school or college. This book is fabulous. More research and detailed research on what's going on in the marketplace with money right now. It'll blow your mind some of the stuff some of these companies are doing to you,

and George unveils all of it. And the 20th anniversary edition just came out of the total money makeover over 10 million copies sold that means over 10 million people have gotten a total money makeover been a graduate gift for a long long time you can get these graduate gifts at ramsey solutions.com in the store and um it's probably the best thing you could do be better than be better than giving them some lame-o graduate gift. Although some kids might think a book is a lame-o graduate gift, but it's not. This is a book with life-changing material in it, all three of these. So be sure and check them out.

Jeff's in Madison, Wisconsin. Hi, Jeff. Welcome to the Ramsey Show. Hey, Dave. How's it going? Better than I deserve, sir. What, Jeff. Welcome to the Ramsey Show. Hey, Dave. How's it going? Better than I deserve, sir. What's up in your world? Not a whole lot. I have a unique situation right now. Me and my wife, we started or created and started a spray foam business. And we are in the, we have the opportunity right now to actually sell

out our business. Quick background on us is my wife, she's a stay-at-home mom. She's a home school teacher. We live out in the middle of nowhere and kind of... Out in the middle of nowhere where there's no phone reception? Yeah. Just as you said that, your phone cut out. That's so perfect, yeah. Are you back with me? Yeah, I'm here. Are you there? Yeah, your phone cut out. That's so perfect, yeah. Are you back with me?

Yeah, I'm here. Are you there? Yeah, sort of. Okay, so you've got a spray foam business. Somebody's offering to buy it. Tell me about it. Yeah, so it generates about $175,000 to $400,000 a year. We run on about a 58% to 60% profit margin,

and we're just trying to figure out we're not a business kind of people, so we're just trying to figure out what we need to do. We're trying to figure out we're not, you know, a business kind of people. So we're just trying to figure out what we need to do. We're trying to figure out the value of the business, how to structure the sale of the business, and what to do with the money after we get the money. Okay, who's offering to buy it? Another guy, another contractor who actually just recently purchased another spray foam business. So he kind of wants to, I guess, control the market

and keep his employees busy five days a week nonstop. So that's kind of what his objectives are. When you say you made a 60% margin on $200,000, that's $120,000 profit. But does that include paying you? So we generally don't really take a salary we kind of like pay our bills and then yeah are you working in the business left we kind of yeah we kind of just hold on to it so if i were going to buy the business i'd have to hire somebody to do what you do because i'm not going to spray the phone easy right so i'm trying to put a value on

the business so the value of the business is the net profit after every piece of labor has been paid, and you haven't paid yourself labor out of that 120. So if I hired someone to do what you do for your business, I might have to pay them 60 grand, right? Yep, both that, yep. Okay, which means we might make 50 or 60 grand net profit on your business. Does that sound about right? Yep, sounds about right. And what's the guy offering you for your spray foam business?

We're figuring right around $135,000. Little low. Little low. Yeah. So if you net $50,000 on it, okay? Yep. So if you net $50,000 on it, okay, and I want to make 25% rate of return on my money, I would pay $200,000 for the business. Really?

And I would make 25% on my money. Invest $200,000, make 50%. That's 25%. You follow me? That's pretty. Right. It's like kind of playing the stock market if you had 25 yeah 25 it's a good rate of return on a small business which is higher risk than the stock market okay right exactly so your business if you if you only wanted to make 20 on your money then your business is worth 250 000,000. Right. I see what you're saying.

So your business is worth more than $135,000. Interesting. Okay. Well, that's good to know. So then how would that be structured? Cash. Like I said, we're not into the cash. Yeah.

Okay. Just straight up, no loans or anything like that. So if you can get $135 to $150 cash and walk away, and you're smiling and you're happy, and you're glad you did it, that's probably okay. That's probably okay. It's a little low, but it's cash on the barrel head. The guy has to go scratch the money together from somewhere.

Then you may have sold it a little cheap, but you got your money all up front. You're done. No questions asked. Everything's over. Okay. All right. And then, so with that money, you know, we do have some bills that we'd like to pay.

Is there anything specific that you would suggest that we should do, pay our bills off first, and then worry about saving for the future? Yes. What do you think? Yeah, we recommend getting out of debt, which is maybe step two. How much debt do you have not counting your house? Well, that's kind of the interesting thing. So we own 92 acres, and we built the house.

So we bought some property, I want to say, in 2018, and we paid about $3,500 an acre. Right now the value of that land is probably around our area is about $8,500 an acre. That's where you live? Yeah. How much debt do you have not counting where you live? Okay. Then we would probably be sitting at about $72,000. Okay.

The first thing we do is clear all that, and then you raise your right hand and never borrow money again. Exactly. What are you going to do for a living after you sell this? So that's the other side of our business. We run a trucking company as well. A what company? I'm going to hop a trucking company. Oh, okay. All right.

So I'm going to hop back and do that as well. Did you say hop back in the truck? Yeah, I'm going to hop back in the truck and do that as well. Did you say hop back in the truck? Yeah, I'm going to start driving again. Okay, so what are you going to be making? The gross on that is usually about $215 before everything. Okay, all right. So you're going to walk our baby steps out. Baby step three is the three to six months of expenses after you pay that debt off.

So if you clear 150, all of that is basically, not all of it, but most of it's spoken for, right? Yeah, you're going to pay taxes on it. You're going to pay taxes on it. You've got to set that aside. And then you've got to clear up the 70 and you put some money aside for an emergency fund. And a lot of that money is gone then. Okay? And then after that, we take the fact that we don't have any payments anymore.

You now have control of your most powerful wealth-building tool, which is your income, and you use that to invest for your future, to invest for retirement and a kid's college and start talking about paying off that piece of land that you were beginning to tell me about. And that's the direction that you go. So good question. Dave, I was going to follow up because I think this would be interesting for small business people

that are thinking about selling a business. I was running through the numbers as you were walking. Was it Jeff? Yeah, Jeff. Jeff, through that. Are you working out about a three to five times net profit? Is that what you were working on? 25% is four times.

Right. That's what I was thinking. 20% is five times. Five times, yeah. It's somewhere in that range for a small business, or is that across the board? Yeah, a small business. I mean, because you've got a high risk. The thing that people in a business of that size that's making under a million dollars a year,

they very seldom take their cost out so you always have to remove that to get to a true net and you treat it like an absentee investor like if i was going to buy that spray foam business i live in nashville i gotta hire somebody to run it in madison wisconsin right now that tells me what the business is truly netting net net net what and then that tells me what the business is truly netting. Net, net, net. And then that tells me what my return on investment, my cash on cash return is. And that's a good general rule of thumb. Dave, nobody gets 25% on their money. In small business, you do every day, honey.

But you work your butt off and there's a lot of risk involved that you don't have buying a mutual fund. It's a completely different setup than a mutual fund. So yeah, I make 25% of my money all the time at Ramsey. If I don't, I'm probably not going to stay in business. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy.

You know, the guy who doesn't need anyone or anything. It's a fun story and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert,

or whatever you wanna call yourself, we all have to have a community and a support system to do life with. It's time to shift the focus from doing it all by ourselves to knowing that we can only be well and whole when we ask for help. Therapy can be a great source of help and support for any area of your life. And if you're thinking about starting therapy, try BetterHelp. BetterHelp is 100% online therapy, so it can fit with your schedule. To get started, just fill out a short online survey to get matched with a licensed therapist. And if it's not the right fit, you can switch therapists at any time for no extra cost. This month, start to build your support system with BetterHelp. Visit betterhelp.com slash Ramsey Radio to get 10% off your first month.

That's BetterHelp, H-E-L-P dot com slash Ramsey Radio. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Ken Coleman, Ramsey personality, number one bestselling author, is my co-host today. If you like what you're hearing, we could use your help. We would appreciate you clicking the follow button and following the show or subscribe button, subscribing to the show, depending on the format you're in. Thank you for doing that.

Please share the show. Tell people where you listen to us on talk radio or what podcast. Or if you've got a share button on the platform you're on, just click share and share it. Let people know we're here. I know a lot of you are doing that because our numbers are way up. Thank you. Thank you for telling people about the show. You are our best marketing.

And we appreciate you very very very much doing that so please and leave those nice five-star reviews they're very helpful uh zach is in oklahoma city oklahoma hi zach how are you well i've been good how y'all better than we deserve sir how can we help well my wife and i were talking last night, and we were wondering if we should pause Baby Step 2 to purchase a storm shelter since we do live in Oklahoma. How long have you lived in Oklahoma? Myself, 31 years, and my wife, about four years. Okay.

And so why all of a sudden last night are we afraid about tornadoes they've been there the whole time uh they have and it wasn't something that happened last night but i'm an ag teacher in spring is my busy season and uh you know i've got a wife and you're in a half old daughter now and one night i was gone had kids at a speech contest and a storm starts headed right for the house uh tornado gets put on the ground, and my wife and kids' only real option was to drive five miles into town to her classroom, which is a storm shelter. So I guess that kind of got me, kind of screwed the daylights out of me and got me thinking about it. Okay. How much would a storm shelter be? About $4,000. and what's your household income after taxes seventy thousand

okay so how long does it take you to save up principle that we use is if you are if your car broke down okay then and you don't have the money to fix it because you would have paid down everything down to a thousand dollars and you need two thousand or4,000 to fix a car or replace a car, you would have to push pause because you're in the middle of an emergency. Okay? Yeah. Emotionally, after the scare with a one-and-a-half-year-old, your brain is in an emergency.

And I can understand that, okay? If that had been my little kid, that would have done it. But you and I both know that statistically, you've lived there 31 years and haven't been hit by a tornado. They're all around you. You can see them out there dancing in Oklahoma. I know, I understand. And they put on quite a show sometimes and sometimes they hurt people and tear up jack i'm not questioning that okay but statistically tornadoes are way different than hurricanes

because it's one finger it's one finger on the ground versus the entire city gets wiped out. Okay? And I'm just talking about the actual data, not the emotion and the fear around it. Okay? And so statistically, you're probably okay to get out of debt and then do this. But I don't know if psychologically you're going to be. So you got to, in order to stop your baby step two, you have to declare this an emergency. Yeah.

Emotionally, I could probably do that. Statistically, I can't. Yeah. Does that make sense to you? Yeah, it does, and I think I'm just thinking about it more of a peace of mind. Yeah, that's exactly what it is. The safety side compared to the debt side. So, Zach, let me challenge you.

If I were you. How long would it take you to get out of it? How much debt you got left? I'm sorry, Ken. That's all right. We've got $14,600 left on a car, and that is it besides the house. All right. So, Zach, if I were you, I would not pause the baby steps.

I would find a way to come up with the $4,000 as quick as I possibly could. Working extra hours, selling anything and everything. You know, four grand, you can find a way, is my guess, pretty quick. What does your wife do for a living? She's also a teacher. Okay. So I think both of you pick up some tutoring. And here's the thing.

What we're talking about here is and whether it's we're not talking about whether or not to do a storm shelter what we're talking about is if you if you're paying off debt at the rate of two thousand dollars a month you're done in seven months and in two more months nine months from today you you're 100 debt free and you have a storm shelter okay yeah or you do the storm shelter first and nine months from today you're 100 debt free and you have a storm shelter so the only thing we're discussing is whether we put it on the front or the back of the debt snowball yeah and in the middle of that discussion we might change those number of months by increasing your income yeah so that's really

the discussion so do you want to mess with you know can you deal with the emotions of this for seven months um and so forth and i've got a bad track record on this so i really am uncomfortable telling you to do something i'm going to say you know if i'm in your shoes the principle is in order to put it in front of getting out of debt you have to declare this an emergency and after getting the crud scared out of you with a one and a half year old i'm not gonna be mad at you if you declare an emergency okay but i'm gonna put with that the actual statistical discussion. But I'm the guy who, what, 2020 March, remember that? Oh, yeah. Yeah.

I'm on the air. They canceled schools in our county tomorrow, the next day, because a storm might be coming that might have tornadoes in it. And they canceled school. And the sun is shining outside. And they canceled schools the next day. I's not the sun is shining outside and they canceled schools the next day i'm the guy that went on the radio and made fun of that and the next day a tornado tore the hell out of nashville i mean hurt people and everything and so like people are

ripping me to shreds on the internet going well that didn't age well dave i'm like no it didn't so i don't make fun of tornadoes anymore after that that was my last time and nobody you know we had people in the workforce we had three people workforce our house got blown down and i mean it was it was a bad tornado came through here and and that was right but right as the pandemic was opening up so it was a a great March. You know, March of 20 was just an amazing month. But yeah, so it didn't age well. But I still, you know, I still love the generation that go, you cancel school because it might snow.

You are a bunch of wusses. You are totally wussed out. And so I just, I don't get it. But I do get it. I get the guy. I would be scared to. If my wife and one and a half year old had run to a had run five miles away to get away from it i would be scared too i get that absolutely

that actually happened that was not a might happen tomorrow thing and then i stepped in it up to my knees but there you go so oh well and this is very doable and he's being responsible about it you know he's asking the question should i do it pretty yeah i think so not not in drama queen mode i think if i lived in oklahoma i think they call it tornado alley i could be wrong on that definitely and when is tornado season chill out i think they have an unfair advantage though over nashville oh boy because we can't see them we got hills in oklahoma you can see it coming for 25 miles because it's so flat you can just sit and watch it and then go oh crap it is actually coming here you know I mean but here you just

it just drops on you. I don't think anybody in Oklahoma sees that as a distinct advantage but I get your point. Well we get a lot of tornadoes in Tennessee but we don't get any hurricanes and we do have some loud mouth talk radio people so there's that. I don't know any of those people personally none. There's a lot of wind involved in

this discussion I'm just saying this is the ramsey show ken coleman ramsey personality number one best-selling author is my co-host today thank you for joining us america kevin is in cheyenne wyoming hi Hi, Kevin. Welcome to the Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. What's up? So I was just wondering, looking for a suggestion or a recommendation, I'm able to save after taxes and 401k contributions about $2,800 per month. And I was wondering what percentage of that remaining amount I should be investing in the market or stockpiling cash and I have no other debts my home's paid off good for you I'm just not sure I'm just not sure what to pay well you're 100 debt free you have an emergency fund of three

to six months of expenses I assume I do okay and then you're putting you're maxing out all your retirement to keep the government's hands off of as much of it as you can if you're not you're not being out okay excellent i'm mapping out my roth 401k and ira and hsa all the letters you know wonderful you're doing it you're doing everything right brother well uh at this stage we call it baby step seven. There's nothing left to do but build wealth and give. Basically, there are three things, Kevin, and you know this, but I'm going to say it out loud, that we can do with money. We can have fun with it.

That's called lifestyle spending. We can invest it, which is what you're asking about. And we can be generous with it. You should always do all three. And so to the extent your monthly budget before it nets out $2,800 does not do those things, I'm going to increase one of those categories a little bit. So if you're not having enough fun, are you married? I am not. Okay. I'm single.

Okay. What's something really cool that you've been hesitating to do because you're a tightwad? Well, I kind of went against your rule and I ended up buying a brand new car, even though I'm not quite at a million, but I did do that. Okay. what'd you buy uh a hybrid camry okay oh you went all out a camry wow because he had to save money on gas way to go that's right i can hear it if i can say if i can save 20 a month yeah it only cost me 50 grand to save $20 a month. This will work out. Yeah. Oh, it was cheaper than that. Don't worry.

I shopped around. Yeah, not much. All right. But yeah, that's fun. Okay. I'm with you. So seriously, try to challenge yourself on your generosity bone and on your fun bone and, you know, build up those muscles, those two muscles, uh, because muscles, because you're investing muscles really strong already.

Okay, so I'm investing enough of them. Well, no, you could invest more, but I'm not the guy that says, okay, put all $2,800 into a good mutual fund, or put all $2,800 into a fund until you build up enough to pay cash for a piece of real estate. If that's what you want to do, that's okay, but I challenge people that have gotten to do, that's okay. But I challenge people that have gotten to the level that you're at.

You're almost a millionaire. How old are you? 35. Way to go. You've done really good, man. I mean, you just really have done a great job. So I just challenge folks to make sure we have, in the actual mathematics, some balance between fun and generosity.

So I have that formula. So last week I got a check from one of my publishers on one of my books. Okay. It's usually I get a big check from them every so often. These books keep selling. Thank you, Lord. And so thank you, people, that you're buying them. Yeah. So I got a big royalty check.

That check is already spent in those three buckets. Okay. Additional giving, additional fund, and additional investing by percentage. And I just apply those percentages to that check. It's already gone. And so then when I go do something fun with the fund bucket, I have zero guilt. Zero question if i'm wise zero question if i've lost my christian spirituality although some moron on tiktok will have a have their opinion

about that but just the same of course they will you know you see my point is i'm not taking a poll on that anyway but the point is is i i know that i've been wise in that i've touched these three main areas of life, and Sharon and I are going on a really great trip here in a couple of weeks. We spent a lot of money on it, but it's a very small percentage of our world overall, and it came out of the fun bucket. Shut up. You know, I mean, that's what we're doing.

So, you know, we're 63. We're going to have some fun. So there you go. That's why we work and and simultaneously there are some ministries got some really nice checks because we got a big check in and that generosity piece goes out right so you it just keeps things flowing if you've got some kind of a a way to already allocate the money yeah and i just had that it's really fun to give that money too not just the fun I would just add that it's really fun to give that money too. Not just the fun bucket, but the give bucket is really, really fun.

And Dave's been talking about that for a long time, and he's absolutely right. There's a real chemical reaction, a real healthy dose of endorphins when you have worked hard for your money, you've been disciplined, and now you give it to help somebody else. Lewis is in Fort Lauderdale. Hi, Lewis. How are you? Hey, Dave. Hey, Ken. How are you doing? Better than we deserve. What's up?

Good. So my question for you is I used to have a problem with some credit card debt, but I have completely cleared up. Good. Thank God. My question is now that I have no credit card debt, I'm working on baby step three building up my emergency fund i'm planning on purchasing a house once i get done with you know saving up and have my emergency fund am i is it a bad idea to close the credit cards that i don't use it's a bad idea to close them later the sooner you can close them the better because it takes about six months from having all

accounts closed at zero activity for your credit score to disappear and if you're going to buy a house you either need a good credit score or a zero credit score you don't need one in the middle understood so yeah i was worried about if i closed them it would have a negative impact on my credit it will temporarily but but over about a six month period of time and you're six months away from buying yes but if you wait four months and then you close them and then you're trying to buy and there's stuff still showing up it's going to drag your credit score down into the 600s maybe you know and you don't want to do that that's pushing this no man's land so you want a zero indeterminable they call it credit score and that comes from having no accounts open and no activity on no accounts open at all of any kind for six months then you'll

qualify for a loan with a good company like a Churchill mortgage that we endorse with a zero credit score. That's what George Camel and his wife did. They bought a home, same interest rate that some goober with an 800 credit score would get, exact same interest rate. And so, but you got to have a zero. I mean, you can't be in the middle. So you want to close them as fast as possible and be done with them forever and ever which is your plan the only reason you hadn't is you were worried about the house deal and this thing this is the mythology ken this guy's not falling toward but overall people out there that believe the mythology the about debt and what you guys have got to stop and think about is is that debt is we live today at this moment this moment today in 2024

in the united states of america we live in the most marketed to human race any time in history more dollars and more sophistication are spent selling you stuff right now than at any time in history. And in the United States, we are the best at selling you stuff. You are impacted by marketing, sales, advertising. every time you take a breath. And the most marketed product in frequency and in dollars spent is debt. It's a product. That's how those banks have towers and you have a little bitty house. Their house is bigger than your house because you've been giving them money yours it's the most marketed product in the

history of the world at this moment so you are you guys are told so many lies about debt you You can't get a house without a credit score. Oh, that debit card, it's not got the same fraud protections as a credit card. Yes, it does. The exact same. Look at their website. Stupid. Wow. See, people believe these lies left and right.

I'm going to get rich on airline miles, Dave. You believe these stupid mythology lies. This is The Ramsey Show. I'll see you next time.