The Ramsey Show - App - Should We Use Our Emergency Fund to Pay for Adoption? (Hour 3)

Episode Date: February 5, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. It's a free call at 888-825-5225. That's 888-825-5225. Randy is with us in Orlando. Hi, Randy, how are you?

Hi, I'm very good. Yourself? Better than I deserve. What's up? So I'm actually a new listener to the show, and I have a question, and it's that I am graduating this month from my undergrad with a health science degree, and I got admitted to a doctoral degree program of physical therapy. And, well, I'm going to be living off the student loans. It should be, the program itself is going to cost me probably around $130,000 in the three-year mark, and living off the loan is going to be like $150,000. Now I'm married, and my wife makes about $24,000.

I was wondering if she should help me pay for it. She's also going to school, but should she help me pay interest while I'm in school on the loan? I also have a car note. So I'm sorry. That's okay. It's all right. You got a lot going on. How old are you guys?

I'm 23. My wife is 22. Gotcha. And how long have you been married? We got married. We've been married one year. Okay, cool. Well, congratulations on almost graduating.

Very good. Thank you. Good for you. Good for you. Okay. Well, what I do for a living is I, and what I've spent my life doing for the last quarter of a century, is teaching people the shortest method to becoming wealthy and living their dreams okay okay and um not letting their dreams in the

process turn into a nightmare and my experience has shown with millions of listeners and tens of thousands of these conversations and people we've walked with through many different decades and age groups and professions that 150 000 of student loan debt is insanity it's um it's not going to be pleasant there's nothing about this it's going to be fun um and so I have a 26-year-old son and a 30-year-old daughter and a 32-year-old daughter. So if you were my son, I would say let's try to figure out a different way to live your dream because I'm really afraid your dream is going to turn into a nightmare. The first thing I would tell you to do is I think you ought to stop and look at two things immediately. And you can do that tonight.

And I want you to do a little bit of research. You're not a new researcher graduating from college, and you can start with the Internet if you want, and you can go deeper with the research. The first thing I want you to do is I want you to find several, not just one, but several credible sources on what a physical therapist in the Orlando area makes. Oh, I did the research. Starting now out of school, it's $65,000 minimum. You're going to spend $150,000 in the hole for a $65,000 job.

Well, it's just the job outlook. The unemployment rate on that job, it's 2% or less. And so... Well, you better hope you're employed because you are deep in the mud. Yes. See, most people that spend $150,000 come out and they're like a lawyer. Yeah. Yeah.

Well, yeah, and I mean, after the 10-year mark year mark i mean or usually about six plus um they make over a hundred thousand here in the orlando area um and so my wife is studying pencil hiding too yeah but your wife can do that without you going to pt school and i think you're going to be hard pressed to actually go interview a pt in or Orlando that's making much over $100,000. That's a fairly rare animal right there. We do coaching, financial coaching for a living, so I get to see and our team gets to see a lot of people doing a lot of wonderful things. As an RN, you can make as much as you can make being a PT in most cases

and actually get more work and more job stability and more hours. So, you know, it's okay. There's nothing wrong with being a PT. So that's thing one. I'm going to challenge that you're paying too much for a $65,000 up to $100,000 job over six years. I want you to rethink that part. But you don't have to rethink your whole dream just because you're called Dave Ramsey, but I'm just giving you some things to crunch on, okay?

Second thing I want you to do is let's find another way to skin this cat. Where else can we go to PT school that's not so freaking expensive? Yeah, that's the thing. I mean, it's an extremely competitive program. The fact that I got in was already hard in a sense. I know it's tough, but I think I might go another round, because here's the thing. It's a competitive program, but it's also competitive for them. They like to get the money, and the price you're telling me to get this degree is a little high, dude.

Yeah, I applied to eight schools, and I got in one. Yeah, but go back and look what the prices are on all those eight. Okay. And you're going to see a vast array of prices. You're not going to see the, oh, they're all $145 to $165, and you're paying $150. No, no, no, no, no. You're going to find out you're overpaying here 30% to 40%,

just because it's the one you got accepted into so it's a mixed blessing you got accepted into an expensive one now i guess the third the third thing we can add to the equation is what can we do to get somebody else to pay for this like is there a hot since it's a competitive market uh and there's a two percent unemployment rate in this area you're saying uh then there's a demand for PTs in your area. Maybe there's a hospital corp in the area that you can work part-time for and promise contractually to work for them for a few years after graduation, kind of like you would do if you went in the Army or something, right, or went in the Air Force.

And they might pay a large portion or all of your tuition, but it's kind of an indentured servant program where you have to go back and work for them for a little while that kind of then i then i'm not as worried about the price if they're going to pay for it instead of you and you could take this particular one but uh i'm going to find some other ways to do this now you just call me you just started listening this is all a brand new conversation to you and i just completely just walked all over your dreams with muddy boots. But I would rather do that than you call me at 32 going, Dave, I am in a mess.

We have three kids. My wife, the dental hygienist, just quit and went home to be with the baby. I still have $160,000 in student loan debt, and I make $85,000 a year. Would you please help me get out of this mess? That's the call I get, and I don't want the 32-year-old at the 24 year old you and that's what i want you to think about so i'm just sitting the other side of this and i'm not trying to kill your dreams if you want to be a pt i think it's a fine profession i want you to pay a reasonable not overcharged fee

to become one i want you to avoid debt doing it. If it takes you a year longer, fine. If you got to work a different job, fine. If you have to promise yourself to a company for a little while, fine. If you have to go get scholarships, fine. I'm okay with all that, but I'd be a lot more comfortable with you paying a hundred grand to get a degree that takes you, that makes you 60 $85,000 than I would you doing what you're doing, and I'm completely uncomfortable with you going this far in debt to do this. Now, the problem is you're asking my opinion, and I'm an expert on my opinion, but I'm here to help you. That's what I'm trying to do. So I'll give you some things to think about. If I can help you

further, you call me back. This is the Dave Ramsey Show. Business leaders, I'm not going to lie. Finding the right people to make an impact at your company for years to come is hard work. But I can tell you from personal experience, you can find them when you use LinkedIn Jobs. LinkedIn Jobs reaches candidates you just can't find anywhere else. And not only are they able to reach these candidates, they're able to get the right people for the right jobs. It's no wonder a hire is made every eight seconds on LinkedIn. And when you consider that over 600 million members visit LinkedIn to make connections, learn and grow as professionals, and discover new job opportunities, it's easy to understand why my team loves LinkedIn Jobs.

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Today's question is from Keith in Indiana. He says, what's your opinion on secured credit cards? Is it a good way to maintain a good credit score while not going into debt? Keith, nowhere on my list of things to do is to maintain a good credit score because there's no correlation between a good credit score and wealth there's no matter of fact there may be a negative correlation never been a study done but people who worship credit scores do not have a tendency to build wealth because we do know the people who have a tendency to build wealth get out of that and stay out of that and you just don't want to try to figure out a way to play kissy face there is no need for a credit score if you're not borrowing money oh people look at it when you're getting a job

yeah sometimes they do but you can get a job without a credit score people look at it when you yeah sometimes they do but you can do it without a credit score 99 People look at it when you, yeah, sometimes they do, but you can do it without a credit score. 99.999% of the time, the use of a credit score is to borrow money. And so my need to tell you how to go into debt or prepare yourself for the ability to go into debt easier by building your credit score is zero. Cause my goal here is not to get you into debt. My goal here is to get you into wealth. The shortest way to do that is to avoid debt, not get into it. So no, I don't use secured credit cards for building a credit score. Because I don't ever tell you to build your credit score.

Now, I don't purposefully set out to destroy it. It's not one of the goals either. But it is a great badge of honor that my credit score has been indeterminable or zero for decades. Why? Because I have not borrowed any money. Pretty simple. I have not borrowed any money. And I don't borrow money. Thus, I have money. Because if you don't have payments, you have money if you're working and earn an income and when you have money and you invest

it and save it you have more money when you have money and you give it to the bank in payments you don't have any money this is deep isn't it struggle to grasp that maybe well you might you might some of you are a little too smart for your own good you try to figure something out that doesn't need to be figured out when you don't give your money to the bank to end payments you have more money the borrower is slave to the lender beth is with us in grand rapids michigan hey beth how are you hey doing great thank you so much for your work um my husband and I were able to pay off $27,000 of his college loans the first year and a half of our marriage. So we really appreciate you so much.

Yeah. Well, Dave, we are looking into adopting a child. Cool. Yeah, and it's going to be $15,000. Okay. And there's an application fee of $2,300. The problem is our emergency fund only has $1,700 in it right now. So you're not quite ready. Oh, I thought you were going to say that.

Well, I mean, you're only $500 off. You paid off $27,000. Why is $500 a problem? Yeah, true. We do have a few other irons in the fire, I guess I could say. We purchased a home to be closer to my family because my father was dying a couple of years ago. And the inspector missed the stacky botrys that was in the house. Missed the what?

Toxic black mold. Oh, great. Yeah, and then it flooded the next month, and then the furnace quit two months later, and then the roofs started leaking. This inspector didn't inspect much, did he? A roof that was one month away from leaking and a furnace that was a month away from dying, and he didn't catch that? Mm-hmm.

Yeah. What do you owe on this money pit yeah 128 000 now i used some of my my father's um retirement money because he actually passed away um we couldn't live in this house for seven months and we moved in and he died six days later. So, yeah. Okay, so are you selling the house? I'm not sure we can afford to. Our basement is completely ripped up. It was finished. And it was, I mean, thousands and thousands and thousands of dollars for storage fees, contractors, air scrubbing.

You don't have a place to raise a child right now. Yeah, just the main floor is good now, but the basement is, yeah, not good. What is your household income? My husband is currently making $65,000. He was making $57,000 last year, but he got a raise. Good. I have a master's in teaching teaching but when we moved over here i lost my teaching job and my license because it lapsed so i just took two classes and um i do have my teaching license back but i only make 11 000 right now doing child care and seasonal work when

are you going to go back to work as a teacher yeah um i would i think i'm ready to this year okay um okay um uh listen there's a lot of stuff has gone on in your lives okay it'll be good emotionally spiritually and financially for you guys to settle in for a short period of time a year or two and just pile up a big pile of money and clean up the mess you will be in a better place to be a mom when that happens yeah and um suddenly adopting a child in the middle of all of this other stuff going on you trying to get back in the classroom trying to get this house cleaned up trying to get your emotional feet back under you and everything else. I'm just an old guy. I want you to adopt a kid, and I think that's awesome.

I think it's one of the best things people can do, people that are called to it. I think it's an incredible thing to do. Having kids is wonderful. The only thing better than having kids is having grandkids. If I'd have known how great they were, I'd have been nicer to their parents. I mean, it's just families about as good as it gets. I had breakfast this morning with my son, who's a fabulous young man, you know, and it's just I want you to have all of that.

How old are you? I'm 39. Okay. All right. Let's take a little time, you and your husband, and sit down and make a list of what are the things in our life we need to clean up where we're sitting in a place of peace that we invite this child into a place of peace this sounds like a war zone that you're describing it's really really really taught me a lot of lessons

and i am a christian and it really did try my faith. I bet. I bet. I mean, you sound like you've been through hell. I'm not saying that you haven't. I'm just saying let's just spend a little bit of time cleaning that up, and you get the job, and then all of a sudden your income is going to double, right? And, you know, get into the classroom, and let's clean the basement up and sell the money pit and get you a nice little clean house that's newer, that's a little smaller but a good place to raise a child. And then all of a sudden you're going to have some money,

and you'll be able to not be worrying about $500 or spending your last dime on the planet to fill out the application. I want you to do this, but I want you to do it in a way that's good for you and good for the child. And, you know, again, I'm not going to invite a child into a war zone. And I'll tell you a book to pick up that you'll like while you're working on this, and it'll help you with a lot of your steps because it's really good. It's by Julie Gumm, G-U-M-M. It's called Adopt Without Debt. Adopt Without Debt.

And so that's what I would do. Now you're going to do whatever you want to do. You're a grown-up, but you called me and that's what I would do if I were in your shoes. Thanks for calling in. Open phone's at 888-825-5225. Thank you for joining us, America. We're glad you're here. We appreciate you hanging out with us. These are good times. These are good times for you. You have the opportunity to make more money than you've ever made in your life. You have the opportunity to straighten out your life, get some of these messes cleaned up. Sit down, do your budget, get your debts paid off.

We're here to help you. I'm here to remind you that you could do it, can do it, and should do it. This is the Dave Ramsey Show. The. The. The. The. The. The. The. The. The. The.

The. The. The. The. The. The. The. The.

The. The. The. The. The. The. The. The. The. The. James is with us in Memphis. Welcome to the Dave Ramsey Show, James. Hey, how you doing, Dave?

Better than I deserve, man. What's up? I've been kind of stupid, I think. Me too. What'd you do? This is what happened. I had a, I bought a new car and I owe $33,000 on it. I said, this is too much.

I said, this is too much debt. And what I did was I bought a, I turned around with the credit union and I bought an 08 Lexus. And it was 10, like 10, 9, 9. After we got through, it was 12. I did it with the credit union where i financed it i cut my i financed this one thing but i cut my debt in half uh more than kind of more than half because i don't owe that 33 000 anymore so you sold that car yeah i sold that car okay all right so you got an old Lexus. Gotcha. All right. And I bought it from this used car dealer.

And when I went to, I said, let me go to Lexus and get an inspection. I should have done that before I bought the car. And it came back, and the car ran great, but it came back from Lexus and said it was like $7,000 worth of repairs that would need to be done on that car. What's wrong with it? I got the printout now. They said that it was like power rack and pinion. How many miles does the car go on it? It was 91.2. Okay.

And it's an 08. Which model, a Lexus? ES 350. Okay. Well, we've owned Lexuses for years, and we use the dealer to work on them, but they're very expensive, the dealer is, to work on a Lexus. And, you know, they have a maintenance program at a Lexus dealership, like a Mercedes would or a BMW would, where they tighten every screw. They do every piece of fluid change.

And it's not the kind of service that you would do on an old 100,000-mile car, okay? This is the kind of service you do on a car that is fairly new, and you've got a lot of money, and you're just maintaining a very expensive car. But I would not have taken that car that you're driving to a Lexus dealer. I would take that to an independent import, somebody that works on import, that work on a foreign car, work on a Lexus, and there's plenty of good independent mechanics in the area. And just, you know, what you want to do is just maintain the car and just to keep it running.

But you do not want to dial that car all the way up $7,000 worth of miscellaneous crap. Yeah, I know. Which is what they're doing. I don't think you got burned i think you know you just got the the serious overkill of an expensive brand dealer shop and you know i've got a mercedes i take it in the mercedes it's expensive to work on it but but the car the the Mercedes we're driving is an expensive car. It's almost brand new. So, you know, it's a different thing.

You don't do that with a $10,000 car. You do that with a $50,000 car, a $40,000 car, a $70,000 car, that kind of a thing. And, yeah, you might spend $4,000 or $5,000 on it on a maintenance run. But on a $10,000 car car you take that to your local guy and you know I don't think you did something stupid I mean it's possible that car is a complete piece of crap that you bought it's possible I doubt it they're pretty good cars they got more than 100,000 miles life in them and I can't believe that car is completely worn out after 100,000 miles it's just it would be very unusual that's a good car you bought the brand and the the line of car i've owned that car and

it's just you know it's you should be fine but i think you just took it to the wrong place to get looked at i would find an independent in the area if there was like a christian brothers or somebody like that in the area that's what i would do All right, Chrissy is with us in Chicago. Hi, Chrissy. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you. What's up?

My husband and I are in Baby Steps 3B, and we are actively looking for a place to buy. We're going back and forth on what we can afford and what we can't afford, and with the monthly payment being a quarter of our take-home pay, living in Chicago, we're looking at a lot of condos and we're finding that these HOA fees are coming out to be about a quarter of what our monthly payment would be. So should we include the HOA on top of the PITI or not? You can go either way. You can split it.

You could go on top or not. Here's the bottom line. The whole idea of the 25% of your income going to your house, housing, is not counting utilities, okay, is just don't be house poor, you know? Right, yeah. Whether you live in Chicago, which is an expensive market, or L.A. or Manhattan, right, you don't get a pass on math. you know and so whether you live in chicago which is an expensive market or la or manhattan right you don't get a pass on math and so if you spend you know 50 of your take-home pay including this

hoa on the thing you're going to be broke the house is not going to be a blessing it's going to be a curse you're going to hate the thing because you're going to be what we call house poor right so the whole idea is don't spend all your money on the house. You know, that's what it comes down to. So we can split hairs on the technical part, but, I mean, 25% is a conservative number that keeps margin in your budget. And so if you include the HOA in that, you're going to have a happy life. But you're also going to be buying a lot less condo in Chicago, you know?

So I get it. So, you know, if you're going to cheat up a little and you say, okay, we're going to count part of the HOA, so we're going to cheat up to 30%. There's no salvation rule here. You're not going to hell if you do that. But just the point being, mathematically, you've still got to have room in your budget. And if you get much over 30%, including the HOA, you're not going to have room in the budget.

You're just not. I mean, you're going to start to be pinched on housing, and you're not going to be able to invest, and you're not going to be able to save for your kid's college, and you're not going to be able to save up and pay cash for the next car, and you're going to wander back into consumer debt because the house has pinched you. That's the whole idea. So based on that concept, you guys make your own math adjustment

to whatever you want it to be. But, you know, including HOA, principal, interest, taxes, insurance, and HOA. That's what I include in the 25%. But including all of that, if you want to cheat up a little bit, cheat up a little bit. Cheat down a little bit. I don't care. But I still want you to try and get the thing paid off early. I still want you to be putting 15% of your income into retirement for you.

For you. I want you to retire wealthy. And not in spite of the house, but because of the house that you choose, the housing that you choose. That's the whole concept. So, hey, thanks for the call. Open phones at 888-825-5225. You jump in.

We'll talk about your life, your money. Jeff is with us in Michigan. Hey, Jeff, how are you? Doing good, Dave. Thanks for taking our call. Sure. A couple of retirement questions. Actually, we retired last year, and we haven't had to draw anything out of our IRAs yet.

Okay. So what I'm looking at is the best way to either just take the dividends, capital gains, as payment for cash flow, or is it better to sell shares of mutual funds to supplement our income? If they're inside the IRA, it doesn't matter. They're all treated exactly the same. It's all going to be ordinary income as you pull it out if it's a traditional IRA. Right, but there's no one way or the other is neither one's better than the other. No, because they're going to keep flowing either way. I mean, I'm probably just going to, you know,

I would just put in an order with your broker to start pulling off a certain amount. Are you 70 and a half, or are you just wanting some cash flow? Just cash flow when we need it, because I'm just 63 now. Okay, cool. At 70 and a half, you know, you have the mandatory withdrawals that begin on a traditional. But in the meantime, you can just tell your broker, whoever's handling your advisor, whoever's handling your mutual funds, that you want a certain amount to come out. And that, you know, let that crank

down for you and they can pull it. They're probably going to just, I mean, dividends are natural income. I just pull those. That's easy. And other than that, you're just pulling off appreciation. You're pulling off shares is what you're doing because it's all been plowed back into shares up to this point. This is the Dave Ramsey Show. Our scripture of the day, John 15, 19.

If you were of the world, the world would love you as its own. But because you are not of the world, but I chose you out of the world, therefore the world hates you. Jeff Bezos said, I believe you have to be willing to be misunderstood if you're going to innovate. If everybody likes you, you're not doing anything. You really are not doing anything. And then eventually someone will not like you just for not doing anything. Dennis is with us in Wisconsin. Hi, Dennis.

How are you? I'm pretty good. How are you? Better than I deserve. Your phone is awful, can you, you put it off a speaker where you can speak directly into it? Okay. Is that better? Yes, sir. Okay. First of all, I want to thank you for taking my call. Sure.

I've got a question. I've got a mortgage on a house that I bought for my stepdaughter about five years ago, and I want to turn the house over into her name i went to the bank uh uh last week and we're going to try to get a loan in her name and sell it to her and uh her credit score was down and uh it was probably about about 100 points i believe and uh they said well we could wait for a few months and try again, but they said there's no problem as soon as the credit score gets up. And the bank did give me a couple sheets of paper I looked at. It's called creditmatterstreatsheets.com.

But I did call that person, and they want a fee like around $300, and they're going to send it to the credit companies, I guess, or whatever. And they figure that the credit scores could get up probably within four or five months. And I guess I don't know if that's advisable or not. If it don't get in four months, then they'll charge you another couple hundred dollars and do it for another month or so. So I talked to the bank, and the bank said I would just wait. And I was just wondering if you knew of any way that she could get her credit score up, you know, more quickly. Well, I think the question you've got to find out and pull a copy of her credit bureau to determine this is, why is her score down?

Is it down because she's paying late? Well, she's got a few credit cards. She's got a student loan. Is she paying late? Yeah. That's why it's down. I don't think she is right now, no. Then why did it drop 100 points? Unless she's been closing accounts and has paid them off and has closed a bunch of accounts,

her credit score would not drop 100 points unless she's in default on something or is paying late. Well, her credit score was always low to start with. I don't know how high it got, but it was low. And she even took out another credit card. She said somebody told her if you took out another credit card and kept peeing on it, that your score would go up. I don't know. I've never done anything with credit scores.

Well, a credit score is based on your interaction with debt. So the only way to have a high credit score is be borrowing money and paying it back, borrowing money and paying it back. So it's basically how much you play kissy face with the bank is what makes your credit score go up. And so, yeah, taking out a credit card and paying it on time, as long as you don't have too much other debt, generally would cause your score to go up. It's a bad way to live your life, though, because you don't want a credit score. An I love debt score is what it is.

And so the way to live your life is not to maintain your credit score. In this case, you're trying to get it up. You've got two options. You've either got to get the score up to get the loan, or you've got to make the score completely disappear to get the loan. And the only way to do that is for her to be 100% debt-free, everything paid off for about six months. And with zero credit score, she can get a manually underwritten loan

from people that know how to do a mortgage. Now, not all mortgage companies know how to do a mortgage unless they use the FICO score. So like Churchill Mortgage that we recommend can do a manually underwritten mortgage for you and it doesn't cost you extra or anything but um but you have to have every she'd have to be a hundred percent debt free for six months with all the accounts closed no payments of any kind otherwise that score is going to keep ticking along along the seller down there so my guess is you need to pull the copy of the credit bureau report, and she's got an old bad debt out there lingering,

an old medical bill she hadn't paid that she forgot about or didn't know about, and that's dragging it down. And she probably is not paying her payments on time, Dennis. I think she's got some late pays in there. And let's get her on a really, really tight budget and pay everything 10 days early for the next six months and get any negative things that are on there any defaults that are on there anything like that cleaned up anything that's on there that's inaccurate dispute it and you can get it removed and if you'll do those three things be current 10 days

early for six months get anything negative off of there that's default, anything that's inaccurate completely removed, her score will probably bump right on up. And no, I wouldn't pay somebody to artificially raise your score. And then as soon as you get this done, let's get out of the credit score business. Let's get in the business of getting out of debt. Because a credit score just means you're paying the bank interest to have this number. And the number doesn't do anything except allow you to borrow more money. And, you know, staying in debt your whole life is a really dumb plan. So as a long-term plan, let's get out of the FICO business.

And Andreas is with us in Sacramento. How are you? Good. How are you doing, Dave? Better than I deserve. What's up? So basically I have a question. I've been with the company for about two years.

I'm all about trying to save up, and I'm trying to get my wife on the board of savings. I just accidentally ran into you on YouTube. And my company just, tomorrow is the last day of making a decision, should I get a 401k. They do match up to five percent but i just realized i'm having a third kid just uh and our budget's already tied we purchased a house and we have about a couple credit cards to pay off because we started remodeling slowly so i'm kind of in a trying to make a decision should I get a 401k or just pay everything off and maybe later on open a 401k. You need to get to work on a plan to get yourself out of debt and have an emergency fund in place before you start the 401k.

And I want you to do that really fast because I don't want you to miss this 401k for long. That match is wonderful. It's a great way for you to build wealth. But right now, you're right. Things are tight. You don't have an emergency fund. Your gut instinct is exactly correct because you don't have any money, and you feel the pinch with that baby coming.

And so, you know, that's... Well, I mean, yeah, I do have about $30,000 saved up. How much is on the credit cards? No, no, I have about $30,000 in my savings saved up that I don't touch. Yeah, how much is on the credit cards? No, no, I have about $30,000 in my savings saved up that I don't touch. Yeah, how much is on your credit cards? About $7,000. Pay them off today. Okay.

And cut them up and never use them again. Okay. Now, then you've got an emergency fund, and when the baby comes and everything, you know, throw money in that emergency fund for the next six months you'll have another chance to get in the 401k they'll let you in every six months or once a quarter or once a year or whatever their entrance policy is but um if you have to wait a year wait a year but let's build that emergency fund up until the baby comes and be a hundred percent debt free except your home you have any other debt, car loan, student loan, anything?

Just house. That's it. That's it. Okay, good, good. That's going to put you in good shape then. Quit using those stupid credit cards. They're not a blessing. They got you in a pinch.

Pay them off. Cut them up. Now you got $23,000. Now throw money on that account until baby comes. After baby comes, then jump in your 401K. Does that feel solid to you? Yeah, so a 401K is a good idea. It's a wonderful thing. I mean, I've been putting it off.

It's a wonderful way to build wealth. As a matter of fact, it's the primary way that people become millionaires, is their first million usually comes in their 401K investing. And so you do want to start it, but I want to get you stabilized. I want to get the foundation laid at your house before we stand the walls up. The 401k are the walls and the roof, right? That's where the wealth is. But your foundation is debt-free except the house and that emergency fund of three to six months of expenses in place.

And that will set you up to win. Congratulations to the baby on the way, brother. That's awesome, man. Proud for you. We appreciate you being a new listener or viewer or whatever you are there on YouTube. Thanks for hanging out with us. Well, that about puts this particular hour of the Dave Ramsey Show in the books.

We will be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the app store and download it today.