The Ramsey Show - App - Small-Business Bookkeeping and Rental Property Basics (Hour 2)

Episode Date: June 8, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, 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 am Dave Ramsey, your host. You jump in, we'll talk about your life and your money. The phone number is 888-825-5225. Paul is starting off this hour in New York City. Hi, Paul. How are you?

Good. How are you doing, Dave? Thanks for taking my call. Sure, man. What's up? Me and my wife are trying to figure out our budget. The problem we're having is we're self-employed, and we don't know exactly how much money is coming in every month. Right. So our budget, we're trying to figure out our budget, and we're having a difficult time doing that.

Okay. Well, let's stop. First thing is you need to do a unique budget each and we're having a difficult time doing that. Okay. Well, let's stop. First thing is you need to do a unique budget each and every month. Everyone does. So you do March's money in March and June's money in June. Okay? We don't have a template that works throughout the year. Some things repeat.

Obviously, the house payment is going to be exactly the same, and other things are going to be exactly the same. But we're going to do a unique budget for each month. The second thing is this. How long have you been self-employed? About 10 years. Oh, good. Okay.

And does she work outside the business? No. Okay, so the entire income is the self-employed income? Yes. Okay. What's your low average month, your average minus a little? Low month would be probably about $10,000. Take-home pay?

Well, the problem is we don't take a paycheck. We're an LLC, so we just take draws out of the... Well, that's your income, okay. But you have to set taxes aside, right? Yeah, we do that at the end of the year. We just pay our estimated taxes throughout the year. Yeah, so you have to set the money aside for estimated taxes. And so is the $10,000 after estimated taxes or before?

Because if you're pulling money out of the LLC, you should take a portion of that money and set it aside for estimated, and you should take the rest of it home. Yes. Well, we pay everything through to business, so that's where we're having a problem is we don't, basically as money comes in, it's going right back out. Pay everything.

You mean you pay the estimators through the business? You don't buy your groceries through the business? That while we pay our mortgage, all our health insurance. Yeah. Dude, that doesn't work. You can't do that. Your mortgage is not a deductible business expense. Our accountant is telling us we're trying to take a paycheck,

but our accountant is telling us that we're not allowed to take a paycheck through an LLC. You need a new accountant. This guy's an idiot. He's got you paying your mortgage out of your LLC and telling you you can't take a paycheck from an LLC. Of course you can. I take one every month from my LLC. Okay.

And everybody else does, too, by the way, except people who don't make enough in the LLC to draw a paycheck out of it. But, I mean, it's just a company, and you don't need to be paying personal bills out of your business account. So let's go back a step or two. Step number one is a separate business account that all the income from the business goes into that account and only business expenses come out of that account. What's left in that account is called profit each month.

Let's pretend that's $10,000, okay? Okay. When you take the $10,000 and write that check out of that business, you don't have to have it as a formal paycheck with formal withholding, but if you're smart, you will set the money aside for estimated taxes. And so you set aside, you know, 25%, let's say. So you set aside $2,000, $3,000. We'll call it $3,000 to set aside out of $10,000 for taxes

because that's about how much they'll be on that because you've got to include self-employment tax as well as income tax as well as New York tax. So $3,000 out of $10,000. So you take home $7,000. Does that sound right? Yes. Okay.

Now, you set the $3,000 aside in a separate account, so you've got the money to pay your estimated with your new accountant. Okay. We went through a few accountants. You need another one. So then the next step is how to answer your question, which is how do we live on an irregular income? So we know nine times out of ten, 95 times out of 100, whatever it is, you're going to bring home $7,000 because $10,000 is your low average.

It would be a really bad month if you didn't have that much, right? Yeah. So highly unusual so you can run a budget on that 7 000 a regular budget that much is predictable but most months you make more than that so how do we allocate that money in advance well let's do a regular budget with seven thousand dollars pay the regular bill so pay the house payment the food the lights the water and you spend that seven thousand each and every month on paper before the month begins then other things that you should do could do or want to do that didn't make the seven thousand dollar budget make a list of those things like pay extra on debt save for vacation whatever it is you're doing okay and you make a list of those

a good long list and you look at that list and say if we make one dollar more than seven thousand where are we going to put that dollar what's the most important thing on this list and you put a one beside that and then you ask yourself if we can do one more thing after this number one item what do we do and you put a two beside that if we can do one more thing after this item you put put a three beside that and so on. And then you rewrite that list in order of most important to least important things above your $7,000 budget. Then when you make money above the $7,000, you spend it right down that list. So that money is also spent on paper before the month begins. You have what's called a prioritized spending plan or an irregular

income budget at that point. And you can do that with the every dollar budget. All you're doing is going back in and resetting it as you know what your numbers are. And you can apply it that way. And I'll send you a copy. Do you have a copy of the book, The Total Money Makeover? Yes, I do. Okay.

In the back of that book is a set of budgeting forms. Yes, I do. separate your business expenses from your household expenses. They need to be in separate accounts. You cannot do proper analysis on your business to tell what's profitable, what's fun, what's not, when it's all jumbled up with your grocery money. Part of doing accounting in business is you can tell what's going on with your business. You're reading the tea leaves of your business. You see which products are working and services are working, where you're making your profits, and what items are losing money, and we don't want to do that, and don't want to continue that product line. And you can't know all of that if it's mixed up with bananas and pears and loaves of bread, because your grocery

budget or your mortgage budget isn't tied up in your same account. That's just disastrously bad bookkeeping. And number one reason small business fail, cash flow problems. It's bookkeeping and taxes and debt that all fall under the heading of cash flow problems. So you don't want any one of those three problems. That's the number one thing that puts people out of business. You've made it 10 years. You're doing good. You're making good money.

Let's just clean this up. Thank you, Paul. This is 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 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. Thank you for joining us, America. We're glad you are here. Brian's with us in Grand Rapids, Michigan. Hey, Brian, how are you? Good, Dave. How are you? Better than I deserve. What's up?

So I had a question for you. My wife and I took FDU about eight years ago, and we are completely debt-free, but we're working on Baby Step 3. We ended up buying our house in cash because she had a lawsuit. And we paid $129,500, and right now market value is about $200,000 on it. Wow. It's not like a great area for little kids, and now we've got three little ones we're looking at moving. But I didn't know, kind of, we've always wanted to kind of not necessarily

just flip constantly, you know, homes for a living, but we thought if we could maybe get into a house right now, even though the market's high, put some sweat equity into it and not have to take out a mortgage again. Or if it'd be better to maybe look at taking a small mortgage and putting that in with what we can sell our house for. Yeah, I'm always in favor of sweat equity and no mortgage. You know that. You called Dave Ramsey and asked about going into debt.

So you know I'm going to lead you away from that if I can, right? Yep. So, I mean, have you got a neighborhood you can move that if i can right yeah so um i mean if you got a neighborhood you can move into if you buy a fixer-upper and do a little work to it uh we're looking around i have a friend that's a realtor and she's been kind of shopper out for it um i recently took a new position at a company so i get about an eighteen thousand dollar annual increase wow um which is great for us um and then we have two roth ira iras right now with about eight thousand in each i didn't know i'd like to get into flipping but i don't want to get into it and how would you flip

if you move in it you're going to move every time you flip it? No. We might have the ability to live. Both of our parents live in the same town as us, so we're thinking if we could kind of stay at one of our parents for a couple months maybe until I could get it livable, you know, flooring. Yeah, but then if you move in it, are you going to sell it? Once we get it the way we think it would be worth the most, probably. Yeah.

That's what we're thinking. Well, I don't mind doing a few flips with the goal being to move up every time and get a better and better house, and each time I do a little work and each time I make a little more profit and you move up. That's an okay move. But just to say over the next five years i'm going to fix and flip five houses and we're going to move five times just for the money no thank you you drive me nuts man yeah we're not necessarily thinking that i'd like to maybe flip one or two to the point where i could buy a rental with cash and

then yeah or buy a flip or buy a flip that you don't buy a small flip that you where you don't move every time you do one yeah with cash with cash so so do you think if we could buy a flip try to keep it on a short term and then maybe just go rent for three to six months and and be okay i just listen i don't want you to destroy the quality of your family's life by jumping around moving your family all the time that's just no fun three little kids three little kids and packing up the boxes every every time you do a flip just that i would want to have a short goal of that i want you to own something paid for that stabilizes for your family for the good of your family then over here

on the side if we can buy a small flip out of the proceeds of one of these other deals eventually that's fine that'd be an okay goal and i have seen people that move three times with the intention of okay by moving three times we can move up several hundred thousand dollars in value um and i'm willing to move three times to do that. But this idea of flipping and renting and living with the parents and all this just as a way of life, that just sounds like no fun to me, dude. I mean, I'd rather have a root canal than move. Gee.

So I just don't want to do that. All right. Haley is with us in Seattle. Hey, Haley, what's up? Hi, Dave. Thank you for taking my call. Sure, what's up? I've written it down so I don't ask you too many questions.

Okay, so we've had our, I know, we've had our rental for sale by an ELP since March. We've had one very low offer. We paused baby step number two to save in case we had to pay something out of pocket. So we have $22,000 in savings sitting there. At what point do we take the rental off the market and continue baby step two? Is the rental in Seattle? No, the rental's in Ocean Shores. I wish it was in Seattle.

I'd be sitting so pretty right now. Yeah, it'd be sold. So where is Ocean Shores, I wish it was in Seattle. I'd be sitting so pretty right now. Yeah, it'd be sold. So where is Ocean Shores? I don't know. What's Ocean Shores? It's a small, quaint little beach town here, and the mayor there really has their claws in everything. So it won't grow.

They're keeping it from growing. So it's a suburb of Seattle? It's a coastal, little coastal town. How far from Seattle? Probably two hours. Okay. So it's a little resort town. It's a little, tiny resort town.

People love it. I hate it. Okay. I got you. That's just cool. But so not enough people love it to buy this house yet. So what is the season for this little resort town? Summertime, I assume? Yes, summertime.

So it's coming up. So you're just now coming into the hot time. Yes, we are. But if it doesn't sell by, like, you know, whatever time it starts getting cold and the season dies off, whatever that is, September, October, then you probably put it back into rental at that point, right? Okay, yes. And we're also, you know, we've raised the rents a little bit, and we have repaired some things. So we're hoping it'll sell. It's really cute.

It's on a canal. But we've just gotten one really really low offer yeah um we bought it for 300 we're selling it for 265 we owe 240 so we're close you know we're very tight on this yeah and and the realtor says has provided comps that show the value is what um you know about what we're asking 265 i actually think that's high and i think i'm right okay which is why we uh you know we've got 22 000 in savings we hate you know not including our emergency fund or the 1000 yeah what was your what was the low offer? How much was it?

Well, it was, I think it was, oh, my gosh, I wish my husband was home, but I think it was like $60,000 less. Okay. So whatever, so $205,000. And then they wanted us to carry the note. So an investor trying to steal it, or are you that far off on your price? That's a good question. The ELP doesn't think we're too far off, and it was also one of those where we carry the loan like a contract offer as well.

Yeah, no, thank you. Yeah, that's what I read, everything you saw. I assume the house is furnished. Well, it's a fourplex, and they have to be rented by locals. It can't be used for a resort. It's in an area that they've said, oh, you can't rent these weekly. Oh, okay. So you can't do VRBO and make some money on it while it's on the market.

No, you can't do that. And so we were only renting them out for $550 a month, and we've raised it to $750 because our property managers are pro, you know, they're pro the renters. And so we've kept the same rent since 2008. Never raised it. A property manager that is pro-renter is confused as to who's paying them. But when we didn't have them, they stayed vacant.

It's like a little colt town or something. I'm telling you. Okay. Well, yeah, this sounds like something we need to sell. So, yeah, I'm with you. Let's leave it on the market, keep piling up cash, and get an offer closer to what you owe and get rid of it because you're sick of this place.

And, I mean, you get the willies just going up there. I can tell. Sounds like something from a horror movie or something. Children of the corn running the town or something. But at least that's your perception. So, yeah, you need to get rid of this thing. I agree with you. Hey, thanks for the call.

Open phones at 888-825-5225. Tony's on Facebook. What happens to debt left behind when a loved one passes away? When you die, what you own stands good for what you owe. If you own nothing, the debt does not get paid because there's nothing to sell to pay the debt. Debt is not inherited by heirs. But what you own, your home and everything else stands good for what you owe before heirs are distributed any money. This is the Dave Ramsey Show. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry,

and I learned that you can't sell them, and you can't even give them away. And then we talked about Timeshare Exit Team's process. Every ownership situation is different, which is why they have more solutions than any other company. And that's when they earned my respect. Don't call any of the imposters out there, and there's a lot. The only timeshare exit company I stand behind is Timeshare Exit Team.

They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee. They will get you out, or they'll give you a full refund. Call 844-999-EXIT online at timeshareexitteam.com In the lobby of Ramsey Solutions, Rick and Lori dropped by.

Hey, guys, how are you? Hey, Dave. Great. Where are you all from? Southern California. Oh, fun. Welcome to Nashville. Thank you.

How can I help today? Well, we've been coordinating FBU now for a couple of years in our church, about 10,000 members in Southern California. And although the lead pastors typically will give us the time and space we need to teach the class, we're really having a hard time getting them to fully buy in to financial peace and the philosophies that are there. And we're just wondering if you had any advice for us. Church that size, is there an executive pastor? Yes. An XP? Okay. I'd probably start there. I'm sure you already have. Do you have his ear? Could you have dinner with him? We have had and

they see the value in FPU but we have a hard time even getting the lead pastorship and leadership to enroll and take the class. Okay. So the truth is that's not the truth then. They don't see the value. They see value enough to let you teach it over here in the corner as long as you don't make any waves, but they haven't yet felt the value of it. So what we're experiencing is we're having, we had probably 20 or 25 churches that size last year do what's called Momentum. So, you know, Jonathan Falwell's church in Virginia,

Johnny Hunt at Woodstock down in Atlanta, Second Baptist Houston, and Mariners there outside L.A. in Irvine. And several of these pastors and XPs in these larger churches are coming to some of our events that we're doing. And some of the stewardship events that we're doing for pastors where we're showing them, and they get to talk to each other about what they're doing. And that's been the result. Steve Gaines, the president of the Southern Baptist Association this year, they took their whole church, Bellevue and Memphis, through it, about 10,000 folks there. And pretty similar in size to you guys.

But it comes down to what happens is these pastors, all of a sudden, they do see the value of it. That personal finance is tied to money problems or tied to divorce more than any other statistic. And so the number one cause of divorce in North America today is money fights and money problems. And the number one thing that's hampering people's giving and their charitable giving into the kingdom, tithe and so forth, and you know this from teaching the class, is the debt and not having a plan. And so what we talk to pastors about all the time is if they can convince and teach their congregation how to get out of debt and get on a plan and handle money God's ways, the natural byproduct is giving

increases. You don't do it for that reason to manipulate. We're not trying to beat somebody up. We're not trying to twist somebody's arm. But a lot of pastors teach on giving all the time, and they're teaching to broke people. And it's hard to get broke people to give. And so this is what we talk to them about all the time. There's not a magic thing to do that.

What you might do is have one of our team members on a church that size get in touch And so this is what we talk to them about all the time. There's not a magic thing to do that. What you might do is have one of our team members on a church that size get in touch and see if we can have them come to one of these summit events. Some of the stewardship events we do, we pay their way even. And can't get the XP on that and be a senior. But if we can get them to come, I mean, the top 50 churches in America have gathered three different times that we've gathered them together. The largest 50 churches in America, we probably got 35 or 40 of the largest 50 churches. And that's typically people that are 12, 15,000 and above in terms of attendance. And those pastors all sit together. And when you've got Jonathan Falwell and Johnny Hunt and Steve Gaines in a room and, you know, Greg Surratt and Craig Groeschel and, you know, and it goes on and on and on.

And when they're all sitting in a room together talking and we're just discussing how important it is to families to help these families, then all of a sudden the light bulb goes off, you know. And so maybe that would work but uh but if not it's just about explaining the need and um it and somehow getting yourself up off of cute little class status in their mind right but in the meantime thank you for leaving the class absolutely appreciate it's very fun to watch these couples and singles come through the class and watch them change right oh yeah this is very it's. It's amazing how much their faces change, the countenance changes, the stress dropping off in just nine weeks. It's amazing.

Thank you. Thank you for what you're doing. Thank you very much. God bless you. Open phones at 888-825-5225. Denise is in Fort Worth, Texas. Hi, Denise. How are you?

I'm well. Thank you. How are you? Better than I. Thank you. How are you? Better than I deserve. What's up? Okay, so my husband and I are on Baby Step 3, and he still has some active credit cards open, though he's not using them, and he doesn't want to close them.

And I don't know if it's just something I should let go or if there's some advice that I could pass on to him. Well, I think it's probably incorrect to say you and your husband are on Baby Step 3. You are, but Baby Step 3 would involve those accounts having been closed already. So he's not. He's letting you, he's tolerating you doing this, isn't he? I would say he's on board with it as well. Doesn't look like it to me.

You just called me and said he's got open credit cards. How's that on board? Well, he thinks that they will just close on their own over time because he's not using them. Why does he think that? I guess because some of them already have. No, they don't close well i mean they might but um why why do you need why let them close them what's the purpose of that i know what's the purpose of keeping them open yeah it doesn't make any logical sense to me no it's not logical

is why it doesn't make any logical sense so i mean, if you're going to do this plan, now, if you want to do your own plan, that's okay. But if you're going to do this and say, you know, we're on baby step three, I'm bought in, this is what we're doing, we're getting rid of credit cards and have debit cards, we're not going into debt anymore, and we would pay them all off and close them up

and cut them up, and it's fairly simple. I guess you could ask him, I mean, why he's being illogical, because this is not logical, considering he says he's on board, but he's not. And so ask him, you know, what is it you want from these credit cards? You want to use them again? I mean, are you holding them back just in case? Just in case you decide you want to go back into debt?

I mean, why are we keeping them open? Why? Why them open why why why why yeah because it doesn't make sense you know and if he answers you then you can deal with that i guess but um it might be that uh it might be that he is has got the secret you know wish to go back into debt again someday i don't know or i might need them i might need them for an emergency or what about travel or you know they bring up all these stupid things that you know if you've got an emergency fund you have a debit card you don't need them for an emergency or for travel right right right so i guess you got to just find out what the theory is behind this um because it's not it's not congruent with what he says he's doing. Is that logical?

Yes, that makes sense. And I do think it may be kind of fear-based of what if I need them. Yeah. Here's the thing. Let's just, you know, we can almost laugh at this. But let's pretend that you cut them all up and you closed all the accounts and you had an emergency fund. And let's pretend that you cut them all up and you closed all the accounts and you had an emergency fund. And let's pretend that you wanted a credit card.

How fast do you think you could get a credit card? Oh, pretty quick. About 30 seconds. One phone call to your bank. It would be issued on the phone, you know, unless you file bankruptcy last week, you know, but I mean, in your condition, in your in your financial condition, you know, you look over, you got 30,000 bucks in your bank, counting your your checking account and your emergency fund. You pick up the phone and call your bank and say, hey, we want a visa card. Can we swing by and pick it up? They'll print it at the branch and hand it to you.

OK, you know, I mean, you know, they will. So if you want to go back in debt it's not hard and run by the car lot and pick up a car on the way over you know i mean how hard is it to go back into debt it's easy getting out's what's hard so if you decide oh god i need a car i'm willing to have a car payment you can run over the car lot you'll leave with a car you can walk onto the car lot and drive one off as long as you got a driver's license lot. You'll leave with a car. You can walk onto the car lot and drive one off as long as you've got a driver's license. I mean, somebody will sell you a car at some

interest rate. They'll issue you a credit card on the spot. You know? And so, you know, if you want to go back to that way of living, it's really easy to reverse this process. So that's what I would do. It's kind of a funny thing to think about, but that's the way I would look at it.

This is the Dave Ramsey Show. So you think you don't need ID theft protection? Well, think again. The Equifax data breach is a perfect example of why everyone needs to be protected. Over 143 million people, which is half of American adults, had their social security numbers, dates of birth, debit cards, and even driver's license numbers stolen, which means they got it all. And since this info never changes, ID thieves can do whatever they want, whenever they want.

So in today's world, it's not a matter of if, it's a matter of when you'll become a victim. That's exactly why you need a protection plan from Zander Insurance. They cover all types of ID theft, no matter when it happens, and they take over all the work if you become a victim. I use it for my family and my entire team. They even cover kids for free on their family plan. It's just the smarter, more affordable way to protect yourself. Call 800-356-4282 or visit Zander.com. Zander.com. Thank you for joining us, America.

Quincy is with us in Kansas City. Hey, Quincy, how are you? How are you doing, Dave? Thanks for taking my call. Sure. How can I help? I bought your book about three weeks ago, started reading it, and I owe about $17,000 on a car that I haven't paid on in about six months because I bought two new cars.

My question is, should I add that $17,000 to my debt or just go ahead and let it get repoed? Because that was my initial thing. I was just going to let it get repoed. But after reading your book, you know, I want to buy a house maybe like in three years. So you think that's – Repo will keep you from doing that. It drops an atom bomb on your credit report, man, when you get a repo. So you have a $17,000 car debt on a car that's worth what? Probably like $8,000, $9,000.

Okay. And you're six months behind on it, and they haven't picked it up? No. I know. I set it in front of my house. I just haven't came and picked it up yet. Who is the loan with? Progressive, or I don't know.

What's the interest rate? I'm not sure, Dave. I haven't even looked into it. I got two current car notes. Yeah. So you, you, do you have two other car notes? I bought two new cars in August. And when I bought those two new cars, since I was upside down in that other one, I just

stopped paying on that one and just started paying on both my other cars. I know it's not smart, but that's just the way I did at the time. Yeah, man, that's a mess. And what do you owe on those two cars, sir? I owe $30,000 on one, and I owe $25,000 on another. Wow. What's your household income? I bring home probably every month after taxes. I bring home about $42,000 and add my wife on there.

I don't know. We're right under $6,000, $5,000, somewhere in there. And you got $1,000 a month in car payments, not counting the one you're not paying, don't you? Yeah, exactly. Yeah, it's about $1,100. You are straight-up car poor. Yeah, I know. Okay, let's walk through a couple things, okay?

Number one, you realize the decision you made at the time to buy these cars was a bad decision. You told me that, right? Right. Okay. Number two, let's look at the car repo situation. If you could sell this car for $10,000, and if you could get a loan for the other seven, then you'd be $7,000 in the hole. And you'd be paying on that car, but you'd be rid of the car, right? If you repo it, if you repo it and hand it back to them, they're going to sell that car

instead of for 10, they're going to sell it for five. And they're going to come after you for the whole amount, the difference. That's called the deficit, the difference in what you owe and the difference for what they sell it for at the repo auction. And so you're going to pay the difference. The only question is how you're going to pay the difference. A lot of difference or not as much difference? And the only other question is whether you're going to drop an atom bomb on your credit.

You know, just destroy your credit with a repo because you're not buying a house for four years after a repo. You can forget it. Okay. So we don't want to go that route is what I'm saying for those two reasons. One is basically you lose control of the price, thus the difference, when you let them repo it. And then problem number two is that it destroys your credit. Now, they may come get it any moment because it's very unusual for something to go six months and then not pick the car up. That's very unusual. Even for Progressive, and they're probably charging you 20% interest,

you're probably getting completely screwed on this interest rate. And I'm guessing the same thing is true on the other cars. Are they high interest rate as well? Yeah, because then you have a credit where it should have been. Which means you're a ways from buying a house. Okay, so the number one thing is we need to try to get this car sold and cover the difference with a loan and or go crazy scratching up money and cover the difference with cash because you limit the damage to your credit that way

and you limit the damage to your wallet that way because you limit the difference between what you owe and what it sells for. See, you'll sell it for a lot more. Thus, the difference will be smaller. Are you following me on that? Yes, I understand. Now, how old are you guys? I'm 40.

My wife's 38. Okay. And what do you do for a living? Social work. What about her? She's a student advisor okay all right well um what i'm seeing as a financial coach that's been doing this almost 30 years and talking to you is um i think i'm hearing that you guys might be kind of sick and tired of being broke. Pretty much.

Are you guys ready to change dramatically in your house on how you do things with money? If you are, I'll teach you and show you how to fix this. Oh, that's the reason I'm calling in. I'm trying to make sense to hear on your tax return that you made all this money. Yep. You have nothing saved, and you don't know where it's at. Yep. Exactly.

So we're doing something different. Yeah, it's time to change. I mean, you guys have been, how long have you been married? Ten years. Two years? Okay. Ten. Ten years.

Okay, yeah. So basically you've been limping along for ten years doing this same kind of stuff. Right. And so here's the thing. It's just like in your world of social work. When you go in and you see these families, when they are doing certain behaviors, they get negative results, right? Right. When they change their behaviors, and you can show them as a social worker how to do that, right?

When they change their behaviors, they start getting positive results, whether it's in their marriage or their career or with their kids, right? You're correct. And so money is exactly the same way. It's more about behaviors. But the person, like when you're working with them, just like when I'm working with them, they have to be willing and energetic about changing because they're sick and tired of being sick and tired, as we all say, right? Right. And when you meet somebody in your world and they go,

hey, my mama acted like this and I'm not going to act like this. Show me how to do better. You can show them, can't you? Right. And that's exactly where I am. So I'm going to put you two through Financial Peace University. I'm going to pay for it, which is our nine-week class. You go one night a week for nine weeks.

There's a bunch of them taught there in Kansas City. And you just have to promise to attend the class, number one, with your wife every single time it opens. All nine lessons. Don't miss one. And then do the stuff we teach you. And then when you're not broke anymore someday, you find some guy who's ready to change, and you pay for him to go through the class okay okay sir all right you hold on we'll give that to you as our gift and you call and let me know how it's going and if you got any more questions as you go let's try to get that car sold and avoid the repo hold on kelly will pick

up and we'll get you guys signed up for the class. Isn't it amazing that in most every area of our lives that when we are ready to do something different, and you do, it's what my friend Les Brown says, he says, you've got to be sick and tired of being sick and tired. You've got to reach the point where you finally say, that's it. I've had it. I'm not eating like this anymore. I'm not going to be a couch potato anymore.

I'm not going to treat my spouse this way anymore. I'm going to change the way you kids, you guys have been trying to run this place, and the dadgum inmates are running the asylum, and we're getting ready to change that. You're not going to like it, but it's going to change. When we decide as human beings that we're going to be intentional in an area of our lives and we put good, solid information, good, solid values and principles and ethics in that segment of our lives, you could change your life. You have the power to do that.

You have the power to do that right now. Isn't that amazing? And it can start right now. I just think that's the coolest thing out there. Thanks for listening to 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.

Folks, the real estate market is on fire all over the country. If you're looking to buy a home and you need a mortgage, don't sell yourself short by going and getting a typical pre-approval. That's a false sense of security, and it's just not good enough in today's fast-moving market. Instead, call Churchill Mortgage and get their certified home buyer program. I'm telling you, it's a game changer. Churchill helps my listeners become fully approved before they go house shopping. In other words, Churchill does up front what most lenders wait to do at the last minute. This gives you an advantage over other buyers and helps you close really fast.

Plus, Churchill won't let you get into more house than you can afford. So become a certified home buyer and get ahead of the game. I trust Churchill Mortgage. Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591, Equal Housing Lender, 761 Old Hickory Boulevard, Brentwood, Tennessee 37027.