The Ramsey Show - App - Should You Force Your Kid to Attend College? (Hour 1)

Episode Date: August 20, 2018

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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. We're so glad you're with us. Open phones this hour at 888-825-5225. I'm back on the microphone today after doing something I've never done in my entire life. I'm getting ready to turn 58 years old. I started working 40 hours a week or more when I was 18 years old. So is that 40 years?

I think so. I've never taken three weeks off in my life taken two weeks off but i've never taken three two weeks was very hard three weeks was even harder and the reason was swi we have a saying in our house swi sharon wants it and uh so sharon's christmas present was she wanted to go to africa Africa and do the safari thing and see the animals and take pictures and all that kind of stuff. And so we've been gone three weeks there, which was an incredible, iconic thing. It's living like no one else so that later you can live and give like no one else. And I did both while I was there, by the way. I'm an outrageous tipper in situations like that where an average household income might be as low as $2,000 a year.

A $100 tip is a big deal. And so I like making big deals out of things. So we had a blast while we were there. It was a lot of fun. And, yes, there's a four-year-old kid inside of every one of us when you see animals up close like that it's a giraffe and the guy's going well yeah you're 58 you ought to know that you know but uh i mean it's uh it was fun it was really uh iconic and uh loved africa love the people of Africa.

And it never ceases to amaze me when I travel that I meet people that I love and I see how great America is at the same time. It's not just a patriotic statement. It's just hard to prosper with the level of corruption that some of these countries deal with. It's hard to prosper when there's no orderly transition of power. When the transition of power means you have to kill the entire ruling family and slaughter half the army in order to transition power every time you do it, it's very difficult to have economic stability, and part of the result of that is extreme poverty.

There's consequences to your decisions. When you make choices, and when I make choices, and when governments make choices, and when an entire people group decide to transition things with violence or demonstrations or whatever, and that's how they want to affect change, it destabilizes everything. There are consequences to our choices. Same thing with your debt, right? Same thing with your ability to build wealth.

And there are in countries. So we came home, and if you don't know, I've got five grandkids under the age of four, which is pure awesomeness. And we had grandkid withdrawal. So we had them all at the lake house this weekend. And when you have five under four, that means that at any given time, at least one of them is in full meltdown. At any given time. And so one of the other ones, the three-year-old, looked over, and one of her cousins was getting corrected for the meltdown. And she said, so-and-so is having consequences.

At three years old, she's figured out there are consequences. And yet entire governments have not figured that out. And some of you that call yourselves grown-ups have not figured that out. And sometimes I've not figured that out. Because if I had an entire bag of chocolate chip cookies, there's consequences. It's called a big belly. You know? And yeah, I got all that.

And that's a true story. So we all got it, don't we? But I mean, even in spite of the fact we know there's consequences, we still do stupid stuff, don't we? All of us. And this show is about doing a little less stupid, recognizing that we're grown-ups and we need to do consequences. We need to recognize that there's consequences so we don't get them.

Negative consequences. Positive consequences. If you save $100 a month through your working lifetime, you'll be a millionaire when you retire. If you do that in a good growth stock mutual fund and a decent Roth IRA, hello. It's consequences. You can retire an everyday millionaire. It's consequences. You're not spending everything you make.

Positive consequences, right? And so let's work on our choices, make positive choices so we have positive consequences, because what you plant, you're going to grow. There is a cause and effect thing in the universe. God calls it in the Bible sowing and reaping. When you plant wheat, don't be shocked if wheat grows. Don't plant wheat and go, where's the corn? You planted wheat, doofus.

You're going to get wheat. What you plant in your life is what you're going to get back. The choices that you make, whether you're a government, a continent, a family, an individual, is your family stable enough to prosper? Are you dealing with so much toxicity and dysfunction inside the family that you can't possibly prosper? You know, sometimes people don't have dysfunction because of lack of prosperity. They have lack of prosperity because of dysfunction. Lack of character, which causes bad choices. Sometimes.

Sometimes people are poor because they've been oppressed and beat up on and had stuff taken away from them. You can definitely see that in other countries when you go there. But if you want a place where you make good choices, you get good results, and bad choices, you get bad results, and you have the freedom to do so, and you have the freedom to do so, and you have the freedom to just decide today to change, you cannot beat the United States of America. I've been in all of them. I mean, not every single country in the world,

but I've seen all forms of government, and I've seen the consequences of those forms of government on the people that supposedly quote-unquote live under them again i've never been anywhere in the world that i just didn't like the people i like the people everywhere i go i feel really bad for them and how corrupt violent and dysfunctional their governments are sometimes. And, oh, I know you like to say we're corrupt here and we're dysfunctional here. Honey, you ain't got nothing.

I mean, we're not even a flea on the back of a dog compared to these other people. It's unbelievable. The worst corruption we've ever experienced in America is not even noticeable in comparison, in contrast. So, can we do better here? Yeah. Can you do better in your house? Yeah. Can I do better with my chocolate chip cookies?

You bet. So let's all get on board. Let's all start doing a little better. Let's all know that there's consequences to our choices, and we have the freedom and the power to make choices. Ready? Set. Go. Ah, look at that.

You can just decide, can't you? You can get the scissors out, place them across that stupid credit card and cut it up. You can get out a piece of paper and do a budget in about 20 minutes. You can jump on every dollar and do your budget for free in about 20 minutes. Ready? Set. Go. Make choices

that give you the consequences you want. Because you're going to live in the consequences of not making choices or making bad ones or making good ones. It's going to be one of the three, darling. So you might as well do it on purpose. Ah, that's what we're here for. Sure is good to be back.

Welcome, everybody. We want to help you. If you've done something back. Welcome, everybody. We want to help you. You've done something stupid. This is your place. We'll help you. We're not going to endorse your stupidity. We'll walk with you out of it, though. Phone number here is 888-825-5225.

This is called the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay

each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. I give up. What's the bump music? Is the circus coming to town?

It's Paul Simon. It's what? Paul Simon. What was it? Boy in the Bubble. Oh, okay. Just something random you picked out. That whole album was African-inspired.

Oh, okay. I thought there must have been something there. I'm getting a little me was African-inspired. Oh, okay. I thought there must have been something there. I'm getting a little meadow with it. Stay with the theme here. Yeah. Good. Good job.

James Childs, our producer, ladies and gentlemen. He picks all the bump music. If you love it, it's his fault. If you hate it, it's his fault. All right. Alex is with us. Alex is in Orlando, Florida. Hey, Alex, how are you?

I'm doing great, Dave. How are you doing? Better than I deserve, man. What's up? Okay, so I'll try to keep this short as possible. I'm in baby step two. I'm working through debt while trying to cash flow an upcoming wedding, eventually moving and getting a house.

But I heard you talk about that before and how to handle that. This is not what my question is about. It's about work. The last two years I've been working in an inside sales role with a small company about you know five of us um and at the end of the year i'm moving into an outside sales role i've been told since i was uh starting that at that time i'd be getting a company car um and they'd be paying for that and now i I learned last week that they're going back to their old way of doing it and that I'm going to have to have my own car, and they pay mileage. And I'm trying to see how I should pay for that car.

Of course, they want me to go loan out and get a car and then say that the mileage that I get paid, pay towards that. And I told them that I'm in baby. I told them I don't do that and I would have to save up for a new car. Yeah, they're the ones that changed the deal. Right. We had a deal. You were furnishing me a car.

Now you're not furnishing me a car. So now you're not going to furnish me a car and you want me to go in debt to get a car so that i can work for you boy that's twisted uh okay so it's only one guy in the company that thinks that way everybody else agrees with me okay um then no i'm not doing it so you have a car now yes what are you are you selling? It's got 100. What are you selling? What do you sell? Oh, wastewater treatment plant equipment. Okay.

And what is your territory, the size of it? Half of Florida. Okay. The north. How many times will you be driving in a day over 100 miles? Over 100 miles? Uh-huh, in one day. Probably once a day, yeah.

Once a day? Yeah. So you're going to be on the road all the time? Yeah. Are you going to be spending the night out? I cover from Pensacola all the way back down to Gainesville. So it's a large distance. Yeah, so you're going to be doing overnights five days a week? Pretty much.

Okay, and you're getting married? Yeah, she's been great about it. Yeah, I'm not thinking this is a blessing. Okay, so what do you make a year? Now it's going to be $56,000. Okay. But I heard that it's going to go up at the end of the year when I go full outside sales. And how old are you?

I am going to be 26. Good. And how much debt do you have now? I have about $5,000. Okay, good. So you're almost done. You'll be done by the end of the year. Yes.

Okay. And then you're saving towards that next car, and the car you have already has 100,000 miles on it. Is it reliable? Yeah, mechanically it's been all right. I did a few cosmetic stuff, but I haven't had any major mechanical issues lately. I'm not sure cosmetically matters much. You sell wastewater treatment stuff.

Nobody buys sewer stuff based on the quality of your car. That's true. I'm just carrying engineers and clients around. Oh, okay. All right. We deal with government. How often do you do that? Every day?

That would be part of the job every day? Not every day, but pretty frequently. Okay. All right. Well, I would clean it up and have it detailed and have a few of the things fixed with some cash and have a plan to buy a car and upgrade substantially within the first six months and try to make this car work. Maybe you can do it sooner than six months, but I think you can do it.

If you only have $5,000 in debt, it's going to be one of your priorities. It's going to be a higher priority than buying a house to upgrade, okay, not buy a $20,000 car, but it sounds like you're driving a $5,000 car, and maybe you move up to a $10,000 or a $15,000, and you can do that pretty quick if that's your singular goal. But you're also trying to pay for a wedding, you said, right? Correct. And how much money do you need for that?

We're looking at a budget of about $12,000. And when's the wedding? March of 2020. Oh, you've got plenty of time then. Okay. Oh, yeah. All right. So, yeah, what I would do is I'd budget the car, and then I'd budget the wedding, and then I'd budget the house after the wedding.

Okay. I'd just put it in order like that. You'd just use the mileage to make that overage? Oh, yeah. And just put that towards upgrading the car? Yeah, that's extra income. That's extra income. Yeah, that's extra.

But you changed, Mr. and Mrs. Boss, you changed the deal, and so you have to give me some grace to adjust to the deal you changed. And me going and borrowing money so that you get your company serviced because you didn't give me a car as you promised is an unreasonable request. And it is unreasonable. It's an unreasonable request. So, you know, I think you can save up and move up in car and have a presentable car if you have a particularly high-end client or a particularly long run rent a nice car for a week leave yours in the driveway good idea you know

that's better than going into debt but if you but most weeks, it doesn't sound like you've got something that's terribly oppressive with the car you've got. Most weeks, you'll be okay. But if you have a big week and you're meeting with the big dog over and the engineering firm or whatever, that kind of stuff, and, you know, you don't want to put the big dog in your car, I'll rent you a little Beamer for the week. You know, get you a little car and run over there. And it's not that bad for a week. And you'll drop some coin on it. It'll set you back a little bit. But that's better than having a car payment the equivalent of that.

Oh, because, by the way, the car payment stays even after the job's gone. So all you people that buy cars with a car payment equal to your car allowance and your mileage and think that the company's paying for your car are stupid because when you leave that company when you leave that company you still have the car payment when they fire you or you quit because they don't have integrity you still have the car payment that you bought for them so don't do that and you're very wise to not do that. Thank you for calling me, and congratulations on the upcoming wedding, Alex. Up next is Justin in Pittsburgh. Hi, Justin. Welcome to the Dave Ramsey Show.

Hi, Dave. Welcome back. Thanks, man. How can I help? My wife and I are babies of four, five, and six. And actually, last week, we welcomed our second child. Yay! Yeah, exciting times here.

My question to you is, I know currently you guys recommend the 529 plan for college. And what you have said previously on the air that you did utmost for your kids. There was no 529 back when dinosaurs roamed the earth, though. Correct. My wife and I want a little bit of flexibility because we don't necessarily want our kids to be pushed towards college if they want to go the entrepreneurial route or the missionary route why not you could go you can be a missionary that's informed or an entrepreneur that's informed with academics yeah yeah agreed um but we we didn't want to necessarily force them to college oh i, I do. And you do?

Yeah, I do, because it's going to expand the quality of their life. As long as you pay cash for it, I don't want you going in debt, but you're talking about saving up for college. Now, if something happens, if you want to do 50-50, but I would do 529 and get the tax break on at least half of it, and I would brainwash them towards a good degree because educate listen there's a huge correlation between a usable degree field and whether or not someone prospers in the life and the quality of their life there's a huge correlation this idea that we throw college

completely in the trash because the student loans are unreasonable and some of the colleges are unreasonable it is not a correct thing some people may just go to trade school. Some people may just do whatever. But the data tells us that the vast majority of people who build wealth have some kind of college under their belt. And so I'm going to direct my kids that way and then let them be a well-informed, well-read missionary. I don't care.

But pay cash for whatever we do. I do about 50-50 since you got the concern. Most people need to do 100% 5.9. This is the Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income, and I recommend 15 or 20-year plans for most families. Stay away from

cash value or return of premium plans. They're just a ripoff. Disability insurance is just as critical. How are you going to pay your bills if you're unable to work? Disability is the leading cause of bankruptcies and foreclosures. And that's why I send you to Zander Insurance. They've been helping my listeners find the right plans at the lowest cost for almost 20 years. Call 800-356-1780 or visit zander.com and compare online that's 800-356-1780 or zander.com In the lobby of Ramsey Solutions, our own Josh Wilson works for Ramsey Solutions here as one of our hardware technicians, one of our computer technicians, ready to do a debt-free scream. Congratulations, sir.

Thank you. Very, very proud of you. So in between times that you fix all the computers I break, you've managed to pay off some debt. A little bit, yeah. I've laughed with you guys that we have one guy assigned at my office just to fix all the mechanical things I break, the computer things I break. Josh is actually that guy. Yep.

He's one among others. But, yeah, someone shows up at my office pretty regularly, something I screw up. But, Josh, how much debt have you paid off? Paid off $104,000. Whoa! Good for you. I had no idea. And how long did this take you?

23 months. Very powerful. And you're single. I am. And you're how old? Just turned 29 a month ago. All right. So before your 30th birthday.

Got it. So what kind of debt was this? I had two cars and a master's degree. Oh, okay. Cool. And your master's is in what? Information security. Of course.

Network defense. Of course. Yeah. Because that's one of the things you work with here on the show. Very good. Good for you. Wow. Excellent.

Very cool. So you've been here about 24 months. How long have you been here? I guess three years almost okay all right a little yeah so it wasn't long after you came here then that you decide you're going to pay all this off yep so being in this environment you don't really have a choice it's like positive peer pressure you're in a cult this is true yeah yeah you you got you got to you got to shave your head and drink the kool-aid around here i mean we don't check your budget or anything

nobody's been pushing you on it but it's's just a positive environment for getting out of debt. So tell me about it. What did you do to get out of debt? Well, one of the cars, actually before I moved up here, one of the reasons why I moved up here was I went through a really nasty divorce before I started here. And it was a car that I was bequeathed, which had my name on it. So I sold that one as quick as I could and then just hopped on the baby steps and started working through it okay the good news is when you're single you don't have to talk anybody into it the bad news is there's nobody making you

do it uh yeah I will say though um my team here is phenomenal. They were all of my accountability partners. Anytime I'd come up with a goofy half-brain scheme to come up with another way to pay off debt or something that I wanted to buy, they were like, no, just stick to the plan. You've got it. Just keep going. Head down. Grind. Hustle and grind, baby. Hustle and grind.

Good for you. So you're in the middle of this every day, and you're fixing all the computers of all the people who help this and installing all the new hires, computers and all that, all the people that help us get all of this done. So you see a lot of the inside workings of this place, and you've done it yourself. What do you tell people the key to getting out of debt is? Motivation. Like, eventually, you're going to run out of tunnel, so quit building more. And I actually picked that up from somebody on my team, Jimmy Kirk.

It was one of his sayings is quit building more tunnel. Eventually you'll find the light at the end. Yeah. Keep adding to the end of it, which means you'll never get there. That's good. It's like you can't get out of a hole while digging out the bottom. Yeah, okay. I got it.

Good saying, Jimmy. All right. Good. Very good. Good stuff. Yeah, okay. I got it. Good saying, Jimmy. All right. Good. Very good. Good stuff. Fun. Fun. Well, congratulations.

Thank you. How's it feel? Oh, man. This is the most surreal feeling. I work here, so I get to see this. I see these people that have finished their, done their screams and that, and I've been looking forward to this for a long time. I bet.

Yeah. Well, I'm proud of you. Thank you. Well done. You're a sharp young guy and I enjoy working with you, obviously. You and I get to spend time together frequently due to my computer faux pas. But you're a genius at that stuff and obviously you've gotten control of your life. Well done. Thank you.

Very, very, very well done. Alright, it's Josh Wilson, one of our top computer tech guys here on the team for the last two and a half years. During that time, in 23 months, paying off $104,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free!

All right. All right. All right. And all of his team is gathering around cheering him on. Well done, brother. Well done. Proud of you. Good stuff. Good stuff.

And now on to the next step to be an everyday millionaire, as Chris Hogan instructs. Very good stuff. Very well done. So at the break, I went out at the commercial break and talked to people i do that every time just about at the commercial breaks if people visit our offices here there's always anywhere from two to two hundred people sitting around in our lobby while i'm doing the show and um so i i walk out talk to folks sign their books get a little picture made or whatever they want to do, that kind of stuff. And I met two people at the break who paid off their house. One of them in their 50s.

One of them, 32 years old, $250,000 house in Atlanta, Georgia, paid off in their early 30s. Wow. So impressive, you guys. You are so set up to win. Wow. Dave is in Boise, Idaho. Hi, Dave. How are you?

Doing well. How are you doing? Better than I deserve. What's up? Okay, I have an earnest money question. And we're building a house, custom building a home, and we're going to be able to put 50% down cash and be completely debt-free except for that 50% down on the house. However, we have a $5,000 earnest money agreement already.

We could back out of that. How could we back out of that deal? And that would leave us debt-free with the exception of rent, pay up more money, and possibly pay cash for a house. Okay. Kind of a stuck two-fold thing. Well, I mean, I'm not an attorney, but I've been in the real estate business my whole life, my whole adult life. And so basically a real estate contract has some contingencies in it.

If the property is contingent upon or the contract is contingent upon subject to you getting a certain kind of loan. If you don't get that loan, you get your earnest money back. If something happens in the inspection or something, you get your earnest money back if it says that in the contract. So I don't know what your contract says,

but if you just straight up back out on a deal after you made a promise, that's the purpose of earnest money. It's a deposit for you breaking your word correct okay so in in in going deep in debt again because we just like i said we just sold the house we're completely debt free and building this new house which is creating another 15 years of debt would at that point, should we eat that earnest money and not go into debt and buy something cheaper that we can pay cash for or pay up our money for a couple more years? The amount that you're borrowing is making you nervous. Is the payment on a 15-year fixed going to be more than a fourth of your take-home pay?

Not even close. Way small. So it's not that big a debt debt and you will pay it off much sooner than 15 years if you have no other debt and you're a saving debt reduction i hate that guy uh you'll probably pay this off house off in five to seven years won't you uh i would hope so uh daughters get ready to go to college and that's going to take a chunk and i and i can see that and i i just paid off my student loans, you know, at age 51, and I don't ever want to see anybody have to put up with that.

I hear you. So I would rather fund her college as long as she's doing well. Yeah, and let's choose a college that's reasonably priced because we have another goal, and that's paying off the house. Correct. So she doesn't need to go to some super-duper expensive college. But it sounds like you have a – you know, without getting into all your numbers, it sounds like you have a pretty substantial income,

and you're just getting, you know, nervous about this new loan after you just got out of another loan when you sold the house, and you've got college bearing down on you. So sit down and write it all out. Make yourself a mathematical spreadsheet. Make yourself a plan. Even just do it with a calculator and a yellow pad. It's not rocket science. You go, okay, here's what college costs. Here's what we make. Here's what we're willing to pay for her to go to college. We're not willing to pay X, but we are willing to pay Y. So that

means you're going to Y college, not X college. And that means that we can pay extra payments and get this house paid off in seven years. And then, you know, when you crunch the numbers, sometimes that cleans the negative emotions, cleans the fear out. Because sometimes fear is just based on we don't know what's going on. There's some confusion. It feels weird. It feels out of control. All that kind of stuff.

But many times when I crunch numbers and go all the way through, it gives me a comfort level that I didn't have before because I can see that it's kind of like a no-brainer. We're going to be able to pull this off. I don't know that that's the case here, Dave, but I kind of sense it is. Just based on the way you went at the question and the numbers you were giving me anyway. Hey, good question. Thank you for being a listener. This is The Dave Ramsey Show. We'll be right back. Our question of the day goes from Blinds.com. You can find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping.

With the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best possible deal. Rules and restrictions apply. Today's question comes from Chris in Georgia. He's at DaveRamsey.com. Dave, does it make sense to continue giving money to my local church while I'm in debt? Isn't that the same as your analogy used on air when you say, would you borrow money to invest in the stock market? If I owe on debt, everything I'm doing is on borrowed money, including giving. Correct. Well, when you're talking about church, then that means you're a Christian.

And what Dave Ramsey's opinion is doesn't matter. If you're a Christian, you would ask God what you're supposed to do. And the only instruction we have from him, unless you're one of those people who hears from him audibly every day, which if you are, you scare me, but is his word, the word of God, the Bible. And so let's study that and see what that says. Okay. As I've gone through scripture, the only references I can find to the tithe, which is a tenth of your income, all indicate that it's off the top before you do anything else.

So regardless of what Dave Ramsey says, it's not a rule. It's not like God's looking to beat you up or he's mad at you or something like that. But your loving Heavenly Father, your dad, who's crazy about you, says, Son, the best way to live your life is give a tenth of your income before you do anything else. And it'll work out for you. So it doesn't matter what Dave Ramsey says. That's what I do, by the way. Offerings above a tenth of an income, there's no indication in Scripture.

There's one Scripture that's, I believe, misquoted on that. The widow's mite is often misquoted, and I can go into that in another teaching in another day. But the only time I see offerings above the tithe where you give additional monies to ministries or churches above the tithe is from surplus money. And that would mean that you'd gotten out of debt, and you had your emergency fund, and you had your house in order. Take care of your own household first, or you're worse than an unbeliever. So you take care of your house. Your kid's college fund is funded. And then we do some giving.

Now, the exception to that would be if you're really sure the Holy Spirit told you to do something, you do it. You don't do what Dave Ramsey says. If you're sure God told you to do something, I'm not going to argue with you. You played the God card. You've got to go do it you don't do but dave ramsey says if you're sure god told you to do something i'm not gonna argue with you you do you play the god card you gotta go do it so but i i can tell you the times in my life i'm 58 i've been walking with god for 40 something years the times in my life that i have been a hundred percent sure that god said to me to do something other than from scripture um in my prayer time, is almost zero.

I mean, I've had some times where I was like, I'm almost positive that's him. And sometimes it is, and sometimes it's last night's pizza. You know, I mean, you know. So it's difficult to know for sure, even for the most spiritual among us. And some of you are very spiritual, I can tell by the way you correct me on everything. But the overall thing is, it's not an issue where God's mad at you, he's going to punish you if you don't do something, you're breaking some kind of Bible rule or something like that. It's just the best way to live your life is start by giving and then doing other stuff. And because it activates the giving muscle inside your character,

and as you activate the giving muscle inside your character, you become a generous person. Generous people are absolutely the most attractive people on the planet. Selfish people are some of the ugliest people on the planet. So you want to be a generous person. You want to grow that bone in your character bones. You want to grow the generous bone. And that's all God's saying with that.

It's not a, again, we're not looking for a list of rules, a list of do's and don'ts, but I firmly believe from studying Scripture for decades now, and the vast majority of evangelical Christians agree with me that the first thing you do before you do anything else is called first fruits. If you read in Proverbs, you'll see first fruits. Give your tithe from first fruits, which what that means is that was written,

Proverbs was written in an agrarian culture, an agricultural-based culture, and so the fruits, you know, you're going through the orchard and you're picking the fruits from the orchard. And the first 10% you take, you take to the storehouse, you take to the local church. And that cares for the poor and for the pastors, the priests, that do the minister to you. And that's what you need to be doing.

So that's what I would do. And so when you go to EveryDollar, the first line on the EveryDollar budgeting app is charity. The first thing you fill out. The very first line on all of our budgeting apps for that reason. Because I find it to work best. But you're right. In a sense, you are borrowing the money.

There's a sense on that. Your critical thinking skills are intact. But you inserted church into the money. There's a sense on that. Your critical thinking skills are intact, but you inserted church into the discussion. So now we have to use different critical thinking skills, and those have to be aligned with scripture, not simple Dave Ramsey math stuff. Marsha's with us in Dayton, Ohio. Hey, Marsha, how are you? Hello. Very good to talk to you. You too. What's up? I have a question. I was wondering if I should pay off my second mortgage or refi it into my first. It is a HELOC. It's at 6%, $50,000.

What's your household income? What's your household income? $212,000 a year. We have nine children. From that $212,000, we are self-employed, so we pay our taxes from that quarterly, and we pay our health care. So does everybody else that makes $212,000. So before we pay anything, we make $212,000. Yeah, I know. I got it. That's your gross. That's your gross, and then you have taxes. So before we pay anything, we make $212,000.

Yeah, I know. I got it. That's your gross. That's your gross. And then you have taxes. And then you have health care. And that's what I've got, too. Everybody's got that.

Okay. Like self-employed, I guess I wanted to say. Yeah, you did say. Okay. But does that mean your income is highly irregular or anything uh no okay it's just i guess you know my friend has her husband makes about the same but before that's what he takes home you know he he well he doesn't make about the same then he makes about 300 and a quarter that's right that's right in order to take home 200 he makes about a third about a third more than you guys make which is wonderful both of

you're making great money. But, now, Marcia, our rule of thumb is your second mortgage or your HELOC would go into your baby step two, your debt snowball, which is to pay off immediately before you do anything else. In other words, if it is less than half your annual income, and it is. It's a fourth of your annual income. So I would put it in there, and I would knock it out like it was a credit card. Pretend you had $50,000 in credit card debt. What would you do?

You'd attack it. You've got a bunch of kids, and you've got a health care cost that's expensive. I got that. But we're still going to attack it with a vengeance, and we're going to knock it out as fast as we possibly can. Kate is with us in Kansas City. Hi, Kate. How are you? I'm great, Kate. How are you?

I'm great, Dave. How are you? Better than I deserve. What's up? Well, I wanted to give you a call and get your advice. We have done pretty well on Grandma's plan, and we are starting to do even better on yours. We're about to be coming up to the dock on saving for kids college we're going to finish that at the end of this year so we're working on paying extra on our mortgage

but through listening to financial peace university i sat down one day and did our net worth calculation and realized we just tipped over a million dollar net worth congratulations thank you so what's making me nervous about that is realizing for the first time how much that could actually be worth down the road, and we've done most of that investing pre-tax, and we're now switching into Roth and doing it post-tax so that we don't end up in a world of tax problems down the road. So I'm conflicted now.

I'm a believer in have a plan, work the plan, and that's what my husband and I have done all along. And now we're struggling between which things should be the priority because we're about to be able to shift focus. I'm sorry, you're going to shift focus when the house is paid off? Well, so we're almost done funding college for the kids, and our plan had been just pay off the house. Yeah. Because we've been doing the 15% toward retirement.

Well, that's our plan. I mean, we tell you pay off the house. Maybe step four, five, six, you do simultaneous, 15% of your income going into retirement. Fund kids' college and pay off the house at maybe step six. And no, I would not increase your investing and slow down on paying off your house. It's the same thing as borrowing on your house to invest. I wouldn't do it. Pay off the house as soon as I could.

All the data from millionaire studies that we've done shows that that's what they do. This is the Dave Ramsey Show. Hey, guys. This is James Childs, producer of the Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.