The Ramsey Show - App - Smart Financial Advice for Newlyweds on a Tight Budget (Hour 3)

Episode Date: September 12, 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'm Dave Ramsey, your host. You jump in. We'll talk about your life and your money. It's a free call at 888-825-5225. Louise is with us in Del Rio, Texas. Hi, Louise.

Welcome to the Dave Ramsey Show. Thank you. How can I help? Well, my husband and I have sold our small business, and we close in a couple of weeks. And with that, we will be debt-free other than our mortgage, but we want to sell our house and relocate. And so we're kind of wondering what should we do. We're going to end up with around $295,000, and we want to know do we rent for a while until we find jobs, or do we go ahead and buy an affordable house and invest the rest?

What do we do? Are you moving out of town? Yes. Okay. Where are you moving? We're open to suggestions. No, we really don't know yet. We're looking at Arkansas, but just not sure yet.

Okay. All right. So it's kind of wide open. That's neat. It is wide open. So what is your small business sold for? How much? We sold around $450.

Okay. And so you got that money? We will have it in a couple of weeks, yes. Okay. So that $450 and then $295 from the sale of your house? No. After we pay off all of our debt and our mortgages, we should end up with around $295. That includes the $450?

Correct. Oh, okay. That is net. Okay. I got it. All right. So you got $300,000 is Correct. Oh, okay. That is net. Okay. I got it. All right. So you got $300,000, or what we're saying, after everything's cleared, after all the smoke clears. Sell of the house, paid debt, paid everything, sale of the business, the whole debt.

Okay. Correct. No, I would not rush to buy something. I would let that sit, and I wouldn't rush to invest it for that matter um because i don't it sounds like that this is uh you really jumped out but you don't know what you're jumping to yet exactly and so you might move to an area and rent not like the area and i'd be rather you be renting when you move if you don't like the area you might move into a position that you don't like you may want to use this money to start another business you may want to use this money to start another business.

You may want to use this money. But before you buy a house, you need to feel very comfortable that you're going to be there a while. Okay. I know where we were heading, but we just wanted to know what Dave would do. This money gives you flexibility. And, you know, you may sit down after you've messed around for a little while and go, you know, we're going to put $100 into another business idea, and we're going to do that in XYZ City, and we're going to pay $200 cash for a house.

You know? But you don't know that yet. Okay? So settle in and let everything shake off of all this change before you decide to buy. Because buying a house is fine. It's a wonderful investment. But buying one for short term is very seldom a good idea. And until you're solid and you feel very sure we're going to be in this area

doing this thing for at least three years, you probably don't want to think about buying there. So this money gives you flexibility. Kimberly's with us in Dallas. Hi, Kimberly. Welcome to the Dave Ramsey Show. Hi, Dave. How are you?

Better than I deserve. What's up? Okay, so we have been, my husband and I have been considering selling our house to try and, for multiple reasons. We're not crazy about the house, but we also would like to use the equity to pay off our credit card debt, as well as some other debt.

But we just can't decide if that's the right move for us to make right now. How much debt do you have? We have about $55,000 total in debt, not counting the house. And what would the equity in the house come out? Somewhere between $25,000 and $30,000 total in debt, not counting the house. And what would the equity in the house come out? Somewhere between $25,000 and $30,000. So it doesn't solve the debt problem. Right. Just part of it.

What's your household income? Take-home pay yearly is $64,000. Okay. So you're making $75,000 or $80,000? Yes. Okay. All right. What kind of debt is the $50,000? 75 or 80? Yes. Okay. All right.

What kind of debt is the $50,000? We have $19,000 on my car, $18,000 in credit card, and then $18,000 on my husband's student loan. I sell the car for it. I sell the car for it. I sell the house. Okay. It actually does more good. It's going down in value, and it's half your debt almost. Right.

The other aspect of the house that I wanted to bring up to you is we have some reason to believe that it will be needing some structural repair in the future. It doesn't have any major foundation problems right now, but both of our neighbors just had foundation repairs done, and we are having some, like, settling cracks. I didn't know how big of a deal that was, that we needed to try and, like, hurry and get out before anything happened. I don't know. I mean, if you are aware of anything, you have to disclose it, which would bring the value down if you're aware of anything.

But if you just have this general fear, there's some other stuff in the neighborhood, but nothing really wrong with ours, then you don't have any disclosure issues. So I don't know. If you were to move, I mean, you're renting for a while, and you probably still need to sell your car. And our rent cost would be likely higher than our mortgage unless we significantly change the area that we're in. Yeah. And you're going to be renting a while, and you still need to sell your car.

Okay. So the car is the main thing that you would focus on. Well, it's half your debt. Right. I mean, almost. And, you know, you've got a good enough income to plow your way through this. How fast can you pay off 50 making, you know, 70 or 80, whatever it is, net take on with 64? I mean, two years if you're on beans and rice and have absolutely no life and keep the house, that'd be fine.

And then move up in house, you know, after you get out of debt. if you're on beans and rice and have absolutely no life and keep the house that'd be fine um and then move up in house you know after you get out of debt uh but i would not move and buy um and even if i did move i would probably get rid of this car so that i got out of debt faster so that i could save up and buy a house faster because i'd rather have a house than a car uh or that car you know um so so because it's more it's more important for your family's financial future for you to be owning a home than owning a car that you have a bunch of debt on so uh which is going down in value versus the house going up in value so yeah if you move i would sell the, and then you're going to be debt-free very, very quickly, and then build your emergency fund, then build down

payment, and then in probably a year, you're looking for another house at that point. Or if you stay two, two and a half years, you're debt-free, and then you start looking for a house. So, it just depends on how you want to play it out.

It doesn't sound like you're staying there either way long term. I mean, five years from today, you don't live there anymore. So it's just a matter of which way you want to get to that goal. Good question. Thank you for joining us. We appreciate you being here. Common Sense for your dollars and cents every day, right here on The Dave Ramsey Show. You know what I've learned after talking to so many people who have been victims of ID theft? They feel violated and they have a sense of fear and intrusion.

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Barbara's in Kansas City. Hey, Barbara. Welcome to the Dave Ramsey Show. Hi. Hi. How can I help? My question is, I had to have a disability from my job, and I have a TSP account, like a 401k,

and we had to move into a much higher priced house because of my son's education. And my husband makes about 60,000 a year. And I'm wanting to know, should I cash out my TSP to pay off this house and have a little bit of money, you know, to put into a savings account or mutual fund? How old are you? I'm 58. Okay. Well, unless you're 59 and a half, there'll be a penalty on it, so no, I would not cash it out. Okay.

Not until you reach that age how much is in your tsp 287 000 what's the mortgage balance on the new home 200 000 okay so you'll have 87 000 left over minus taxes so you'll have nothing left over so pretty So what other nest egg do you guys have? Well, he has his own TSP account. How much is in his nest egg? Close to $250,000. Okay. And that'll be all you have for retirement then with a paid-for house? Yes.

You guys need to really tighten up. Watch what you're doing. Okay. That's not a lot. Okay. You can make it on that with a paid-for house, but this move up in house was a big bite for you. That was a big bite.

Michael is in Raleigh, North Carolina. Hey, Michael, welcome to the Dave Ramsey Show. Hey, Mr. Ramsey. It's a pleasure to speak with you. You too. What's up? Well, let me throw some numbers down, and then a pleasure to speak with you. You too. What's up? Well, let me throw some numbers down and then you can yell at me afterwards. How about that?

Give me a reason to yell before I yell. Yeah. Well, I've heard enough. I've got plenty of reason for you to chew me out. So I'm 25 years old. I'm getting married at the end of the month. Congratulations. Thank you, sir. Back in April, my fiance and I were not on the same page financially. I've been hooked with your program since I heard it, but it took me a long time to get everybody on board. I made a stupid decision. It was a rash decision and bought a new car. So currently I have $87,000 of debt between the two of us. Right. And how much do you – there's not two of you until you're married, but how much debt do you have?

Well, I got two weeks. Well, that's true. Okay. We'll go with it. What do you owe on the car? The car is about $33,000. Of the $87,000. Okay. And what is the rest of it? What do you owe on the car? The car is about $33,000. Of the $87,000, okay.

Mm-hmm. And what is the rest of it? $30,000 is on my student loans, $15,000 on some credit cards that I have in my name, and then she's got about $9,000 left on her car. Okay. Well, she wasn't the one that needed to be listening, was she? Well, no. It was you. Yeah, it was me.

Yeah, okay. So what is your new in two weeks, what will your household income be? We make $100,002 and some change. Between you, okay. And what is her car worth? Her car is worth probably about,'d say $10. It's probably about worth what it's close to. Okay. So she's been pretty conservative

in her process to this point. Good. Okay. What do you guys do for a living? I am a cybersecurity analyst and she is a vet tech. Cool. Good. All right. Well, here's my rule of thumb.

Do you really love this car? I really love it. Okay. What is it? I don't love it enough between what I drive from work to home and back. Yeah. What is it? It's not what I pay for it. What is it?

It's a Mustang GT. Oh, sweet. Okay. Nice car. Yeah. Okay. Here's the rule of thumb. All right.

Number one, of course, cars go down in value. Number two, we want to be out of debt. So we don't want vehicles that total up more than half your annual income because they go down in value, even if they're all paid for, and yours don't. So you make the pass on that one. The second rule of thumb is can you be keeping the car, if you want to keep the car, can you be debt-free other you want to keep the car can you be debt free other than your home in two years and are you willing to do what it takes to cause that to happen well a hundred

thousand bucks on 87 means you got to put 45 000 bucks a year towards debt for two years to make that happen yeah that's pretty tight that's pretty tight so i don't think you're going to want to in your first two years of marriage live like that just to keep this car agreed it's half of the problem almost correct so if i were in your shoes i would sell it even though it's a sweet car and undo the the stupidity of the moment that you had. Because I would rather have that time with my new bride than I would with my new Mustang. Absolutely. So is it better to take a couple months and try and put the cash aside to pay the difference in equity off?

Yeah, that's fine, or borrow it, either one. You can borrow it. I was going to ask if it's one thing to borrow just a few know a few thousand dollars to get out yeah because we're going from 30 000 33 000 down to a couple thousand plus you're gonna have to get you a little something you know some kind of a beater to drive until you get this mess cleaned up and then you'll move back like a four thousand dollar car or something to get me from yeah yeah here's the great news you know if you will do the stuff we're teaching and you you bit the bug or the bug is bitch or whatever, you're going to live. You're going to be able to drive a decent car within a year or two here. And then you're going to be able to drive whatever you want in the next decade because you're going to be in a position to drive whatever you want because you drove crap for a while.

You drove like no one else. So later you can drive like no one else. You live like no one else. So later you can live and drove like no one else so later you can drive like no one else you live like no one else so later you can live and give like no one else and just in talking to you i think you've got that emotionally spiritually and intellectually i think you got it so my point is is that the mustang will shed a tear with you when it leaves because i'm a car guy too but it doesn't mean you're not going to get another one oh and by the way it'll be 10 years cooler because when you get it because it'll be 10 years from now but um this is like goes in the

book of stupid stuff i did when i was in my 20s that you tell your grandkids about and that's all it is keep pick up a picture of it by the way for that reason because you need to tell the story the stupid stuff i did in my 20s i got i had auar. It is the same thing. I had a picture of stupid stuff I did in my 20s. And the thing smoked. It smoked like it was on fire. It's unbelievable. But I was so proud I had a Jaguar. Unbelievable. So yeah, same stuff.

We all did it. And now you've done it and you can put it behind you. Congratulations on the upcoming marriage, man. Awesome. So proud for you guys. Open phones at 888-825-5225. Christy Wright is a business coach and the best-selling author of the number one best-selling book, Business Boutique, equipping women to make money doing what they love. If you have your own business or you've ever thought about starting one, ladies,

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The phone number is 888-825-5225. My husband and I just paid off our mortgage. We're not yet 55. Way to go, Susan. We're putting more into the 401k. What else should we do? Max out 401k, max out Roth IRAs, and above that, invest in good mutual funds. And maybe later, pay cash for some investment real estate if you want to, as you build some additional funds outside of retirement funds.

Well done. You are on your way to millionaire status. I love it. 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 CHM

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Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. Site-wide savings are happening right now, plus an additional 5% off at Blinds.com slash Ramsey. Blinds.com slash Ramsey. Blinds.com slash Ramsey. Leah is in Michigan. My fiance and I are beginning to plan for our wedding. He's on baby step three. Got his emergency fund going.

I'm on baby step six. Whoa, paying 100% for the expenses and refuse to incur any debt for the wedding. You go, kiddo. Where should we place saving for the wedding in refuse to incur any debt for the wedding. You go, kiddo. Where should we place saving for the wedding in the baby steps? Well, he would after he finishes his baby step three, and you would now. Anything after baby step three is where you buy stuff. The wedding's not an emergency, so we don't use the emergency fund. So I would have him have a small, you you know we say three to six months of expenses so let's say three months of his expenses is his emergency fund and then immediately

he starts saving for the wedding and you would now you definitely start now but above baby step three is when we start buying things we want and that would include a wedding but look at you way to go save up paying cash for it, got things rolling, talking about money. Everything is going the right way. Rod's with us in Kalamazoo, Michigan. Hey, Rod, what's up? Hey, Dave, how you doing? Good to talk to you.

You too, sir. How can I help? Quick question for you. My wife and I are getting divorced after 21 years. Yeah, it stinks. But she wants to become bigger and better, and she wants to move on. And I'm kind of in the role reversal where she is going to pay me spousal support. And she has to pay me around $300,000.

My question to you is, she doesn't want the house, and there's about $115,000 each that we'll get in the house, and we owe about $215,000. Would you take the, I guess, about $175,000, $180,000, would you put that towards the mortgage, or would you reinvest it in the stock market somewhere? Okay, I'm a little bit confused. So she's going to give you $300,000 in cash or in monthly support? Well, we're going to do the lump sum, and out of that $300,000, $115,000 is equity in the house. So she's really going to give me $185,000. Okay, so half of the house, her half of the house she's going to give you, plus she's going to give you $185,000 in cash to buy out spousal support.

Yep. Wow. And we owe about $215,000 on the house. I make about $85,000 a year. Okay. What's the house worth? About $450,000. So you could almost pay off your house.

Close. I'd be about $40,000 short. And you have any other debt? Nope. We've always lived debt-free. Always paid cash for our vehicles or close to them. Credit cards, paid them off every month. We've never had any debt.

You got kids? A 17-year-old. Okay. So given this situation, you're a bachelor that makes $80,000 a year. Yep. Why are you buying this house? Why am I buying it? It's on a lake. I love it.

There you go. It's a lake house. So me. Yeah. And she doesn't want it. No, I don't care. I mean, she doesn't want it. I'm just wondering why you go. At the lake house. So me. Yeah. And she doesn't want it. No, I don't care. I mean, she doesn't want it. I'm just wondering why you did. Because you have a whole new chapter coming up, a new life that's different than the old life.

But the lake does make sense. And you really like it. If you didn't own this house, you'd be looking for one like it. Close to it, yeah. Okay. Yeah. Yeah, I'm probably doing that i'll probably just take it and throw it at the house okay you got an emergency fund you got an emergency fund in place i have about 450 or excuse me about 480 my 401k and i have a Roth that's worth about 85

and i have a pension right now that's worth about $170. And how much is in your emergency fund? Well, I guess technically I don't have an emergency fund. I just have my 401K. That would be technically would be you don't have one. It's not technically. You just don't have one. Okay. You need an emergency fund.

So I'm not putting the whole $185 towards the house. I want a rainy day fund to keep you from having to use the 401k if you had an actual freaking emergency. Okay? True. You make $85,000. Let's set $20,000 in the emergency fund, though. $165,000 at the house. Then you've got about $50,000 you need to plow through in the next two or three years, and you'll be 100% debt-free.

House is worth $3,000-something. You've got a bunch. You'd be close to being a millionaire at that point. How old are you? I am 49 right now. Yeah. By 55, you'll be a millionaire and 100% debt-free if we do this plan this way. Okay.

Yeah. That's kind of what I was hoping. I know my financial planner's like, you know, don't throw it all in there. I'm like, well, I want to get another opinion. Well, your financial planner's always thinking, are we going to borrow all we can on our home so that you can invest it with me and make a percentage? No, thank you. He's actually pretty good, but he doesn't want me to borrow all we can on our home so that you can invest it with me and make a percentage. No, thank you. He's actually pretty good, but he doesn't want me to throw all my money.

I'm like, well, if it's my money, I can do how I want. But I should take the $20,000 and keep it just in case. I want an emergency fund or any day fund, just liquid, just sitting in a boring-off account. You never use it for anything. It's just there in case. And then the rest of it we're going to throw at this house. And then have a systematic game plan that you do the math and you go, I'm putting this amount on this house and in this many months it's gone.

Okay. I was hoping to have it done in about two years. I think you can. If it all works out. I think you can. I mean, you don't have a lot of obligations at this point. Nope. No car payments, no credit card payments, just monthly bills and food and my son and

I. Think you're good, man. Have at it. Sorry you guys are going through this, but wow, what a deal. She's cutting you. Ernesto is with us in Phoenix. Hi, Ernesto. How are you?

Good. How about yourself? Better than I deserve. What's up? Thank you for taking my call. Anyways, I'm trying to get my business restarted for the third time within the last eight years. So I just recently quit my job about two weeks ago. I'm currently doing some side jobs that's keeping my head above water. So I have about $10,000 in the bank and about $8,000, you know, under my mattress, literally.

And I have my wife's 401K, and my sales is about $31,000 total. I'm trying to purchase a used semi-truck, which is about $32,000. I need about another $5,000 to get everything, you know, Ring State Authority insurance, license, and all that stuff. So I don't know if I should put down about $25,000 towards the semi-truck or pay it off cash and keep doing side jobs and come up with the rest of the money to pay for insurance, license. Yeah, I think you do the side jobs and you come up with the rest of the money to pay cash without using the 401K. Because if you cash the money out of the 401K, they're going to charge you a penalty plus your tax rate,

and you're going to get hit upward of 30% of that money is going to be taken by the government. And so we don't tell people to cash out a 401K for anything except to avoid bankruptcy or foreclosure, and that's not where you are. The good news about you, Ernesto, is you're not afraid of hard work, and you know how to go out there, scratch and claw, hustle and grind, and come up with some money. And you're most of the way towards your goal, and you just need to scrape together a few more nickels. You're getting close. Leave the 401K alone, but, yeah, use the mattress money.

Use the other money. Use any money we can get. Roll the nickels out of the corner of the couch, baby. Let's get her done. I'm with you. Let's get this truck purchased. And if there's a way you could buy a cheaper truck, like 25 instead of 35, that'd be a cool thing too, get you there that much faster.

And that's the direction I would go. Hey, good question. Thank you for joining us. Open phones at 888-825-5225. Danita is on YouTube and says, Dave, I'm a baby step 2. I'm in baby step 2, but I keep hearing

that I should get life insurance separate from my employer. I have a six-year-old. Should I do that now or wait? It's going to take me 36 months to get through baby step two. Well, the problem with having your term life insurance only at your employer is if you leave after you've had a diagnosis, you might not be able to get insurance. And that's why we tell you not to have only insurance at your employer. So if you had a cancer scare or you got diabetes or something like that while you're there and you leave, you lose the insurance at the employer and you can't get more insurance.

So it's always good to have insurance outside of your employer. This is the Dave Ramsey Show. I'm Scott Schreiber. Our scripture today, Proverbs 11, 14. There's no guidance. Where there is no guidance, the people fall. But in the abundance of counselors, there's victory. Theodore Roosevelt said, People ask the difference between a leader and a boss. The leader leads and the boss drives.

We always say around here, a boss pushes and a leader pulls. And you set something in front of people and go, this is where we're going. And if you want to go, this is where we're going. Getting a lot of emails, voicemails, and other things around here right now regarding families in the North Carolina, South Carolina target of Hurricane Florence. And here's what's weird. Of course, the emails and voicemails and stuff we get around here on something that sounds like this. Dave, thank you. We were ready for the storm. We don't have any debt we have our

emergency fund we boarded up the house and we're in another state waiting to see what happens see there you go isn't it interesting when the storm hits are you ready and that can be a metaphorical storm or in this case a literal. So praying for our friends and neighbors over in South Carolina and North Carolina. Looks like they're going to get hammered here in a couple days. And certainly if you watch the Weather Channel, you would think that they're going to break the states off and throw them in the ocean when we're done here. But I don't think it's going to be quite that bad. But it does look like they're going to get hit pretty hard.

So I'm glad that some of you were ready, and we'll help those of you after the storm that weren't ready, so that when the next storm comes, you're ready. That's how we learn, isn't it? Rick is in Phoenix, Arizona. Hi, Rick. Welcome to the Dave Ramsey Show. Yes, sir. Thank you.

First-time caller, Dave. My wife and I recently retired. Well, she retired before me, but I just retired, and I have a mortgage payment of $50,000. And my question is, should I go ahead and pay it off or just keep on finish paying it off on my payments? So you have $50,000 out on your mortgage. How much do you have saved? $30,000. That's your entire nest egg?

No, I got my 401k. And then we get Social Security and I get state money. How much is in your 401k? Let me see. $65,000. $65,000 is your entire nest egg plus the $40,000? Yeah, because I've been using some of it to get rid of some of these bills and stuff like that.

Does your wife have a nest egg? Pardon me, sir? Does your wife have a nest egg? No, she doesn't have one. So your state pension is going to be enough for you to live on then? Oh, we make it easy. I mean, I don't have no issues at all with my state pension, my Social Security, and I don't draw from my 401K.

I just once in a while I'll pull out $5,000, $3,000, or whatever I need. What's your household income now? Right now, just mine is $2,500 a month with me. Okay. Well, how old are you? Sixty-six. Okay. Well, I think the goal – how old are you? Sixty-six. Okay.

Well, I think the goal is, and you realize this, to get the house paid off as quick as possible. What's the fastest way to do this is reasonable. You don't have a lot of cash laying around. So, I mean, if you call me up and say, I've got $600,000 laying there, I'm going to pay off that house in about 13 seconds, right? But if we use $50,000 out of your $120,000, that leaves you pretty slim. Yeah, I only owe $50,000 on the house, yes. I know, but you've only got $85,000 plus $40,000. Right, right, right. So we're using up way a lot of your cash.

So, yeah, I probably would do it, but you guys are going to have to be very careful to rebuild some actual cash around there. I want you to have some investments in addition to your pension. And so, yeah, I would use that. If the 40 is your only emergency fund, I might take the emergency fund down to three months of expenses. Sounds like it's a little high. So you can probably put 30 of this or so, 25 of this towards the house,

and then 25 or so out of that 401K towards the house, and then it's paid for. But then the fact that you don't have a house payment, you guys got to get on a budget, and I want you to build up some cash and be completely debt-free, stay completely debt-free. But I want you to build a little bigger nest egg than you got. That's not, you know, just the, just, I'm glad you got the great state pension, but I really want you to have some money around there, too. Jamie's in Rapid City, Iowa, or Rapid City, South Dakota. I'm sorry.

Hi, Jamie. How are you? Hi, Dave. Thank you very much for taking my call. Sure. What's up? I have a question. My husband and I are just getting ready to get our will set up through LegalZoom.

We do have life insurance through Zander, thanks to you. And I'm just wondering, like, if worse came to worse, we have four children that my sister and her husband would be taking in that situation. And I'm wondering how much of our life insurance would go to them to raise our children, and how much would go to each of our children, and then what type of account would that go into? Like, do you have any type of formula for that? Sure. I would leave 100% of the life insurance into a trust for the good and caring care of the children.

And I would instruct that trust to invest that money in good growth stock mutual funds. Okay? Then I would say, here's the terms of the trust. The income off of the mutual funds can be sent to the caretakers to take care of the children. Okay? The brother, right? You can send the money, but they don't have the money, but the take care of the children, okay? The brother, right? You can send the money, but they don't have the money, but the income off of this. How much life insurance is there?

$750,000. Okay. So let's say that you invested that and it created $75,000 a year worth of income, okay? That can go to him to take care of and raise the kids, which really wouldn't, you know, he's not making a big profit on that, but he can raise the kids for that and take care of them. Then you also can stipulate in the trust that the money can be used for other things, like if they had a major medical event, you could use, some of the actual principal could be touched for that, maybe for their first car and maybe for their college.

And then when they come out of school and graduate from college, they then have access to the money that's in the trust. Okay. But that way a minor is not left with the money, and someone doesn't have to be appointed to manage it for the minor because the trustee will be managing it for the trust. And you're not going to trust your brother to raise the kids and manage three-quarters of a million dollars. Yes, okay.

Well, great. I will get that in there. I appreciate your advice. Thank you very much. Thank you. And that's what we had set up for ours. And, of course, our children grew up and weren't minors anymore. And so we didn't have to use that.

So that element of our will went away because we don't have minor children anymore. So now the estate plan looks different. But that's how you handle it. You want to name on your life insurance policy the beneficiary is. And the primary beneficiary would be the other spouse, your wife, your husband. But in the event both of you die, the secondary beneficiary is the children's trust that is formed only at the time of both of your deaths. And the money goes into that trust. And then to be in, then you can set up the terms of how that trust is to be managed.

And that's how ours was set up. So but that's really good planning. and that's the way you do it. You have to think that way. You have to make sure you've got all the coverage areas that need to be done. This is diligence. This is how people think that manage money well, and then it doesn't get all caught up in some lawsuit and somebody's confused and somebody mistreats somebody, somebody your kids money and all this stuff that

goes on you know what i'm saying man so everyone needs a will and everyone that is affected by the will needs to know what the will says so if you're cutting someone out of the will you can go ahead and tell them that while you're alive it It'll save a lot of lawsuits later. If you're cutting someone into the will, you can go ahead and tell them that while you're alive. You ought to have a reading of the will while

you're alive. Because it just sets the table. Everybody knows what's going on. This is what's going to happen. Surprise, you hit the lottery. There's none of that. It's a different kind of thing. It's called being diligent.

That puts us out of the Dave Ramsey Show and the books. We'll 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 Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word