The Ramsey Show - App - Start Being Adults About It and Say No to More Debt (Hour 3)

Episode Date: March 7, 2019

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🎵 Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studio, 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. This is your show. Thank you for joining us. Open phones at 888-825-5225, 888-825-5225. Justin starts this hour off in Cincinnati.

Welcome to the Dave Ramsey Show, Justin. Hey, thank you, Dave. Thanks for taking my call. Big fan. Thank you. How can I help? So I'll get right to it. My wife has been going back to school.

She didn't have quite the opportunity that I did because we had a kid early. So we recently decided a year and a half ago to give her the opportunity to go back to school, which we, you know, ignorantly decided to take on more debt to do that. But it was a decision we made at the time, and we kind of stuck with it. My question is, we're on baby step two right now, and we're just trying to figure all this out. But I want to keep her in school because it's kind of the next step as far as her career, and it will help us longer term. But I also want to get out of debt, and I don't want to keep taking on student loans to do that. I'm just curious what your advice was. That's a pickle.

Okay. Well, to start with, we're going to start with the foundational principle that Dave Ramsey never tells somebody to go into debt, so we've got to start there. Because I wouldn't go into debt, and so I'm not going to tell you to. But you definitely got a real mess here so what what is she studying uh she's her major is biology she's finishing a biology degree in order to do what um she she either wants to work um and then research or do something with animals. I mean, she's kind of spread right now.

You said further her career. No, really to start her career. Oh, okay. She stays at home right now. I got you. And how old is she? She's 28 years old. Okay.

And how much does she lack time-wise, how many more years to finish her degree? She's finishing up her second year right now, and at the rate she's going, it'll probably take another two and a half years. And what does it cost a year? It'll probably cost us close to $30,000, $35,000. A year? No, I'm sorry, not a year.

Oh, okay. Another $15,000 to $20,000 per year. Okay. And what do you make? Gross $120,000. Okay. And how much debt do you guys have, not counting your home? About $52,000. And how much do do you guys have, not counting your home? About $52,000.

And how much do you owe on your cars? We just have one car payment right now, which we just acquired a couple weeks ago, and it's $25,000. Okay. When did you tell me you started all this stuff, this get-out-of-debt stuff? Well, I've been listening to your stuff for years now, and we've been, sadly, to say, loosely doing it and thinking we could do it our own way, and obviously that didn't work. Yeah, fairly loosely, like not at all. Right. Because buying a $25,000 car in this equation would be like freaking insanity.

Right, right. Okay. Yeah. I mean, you knew that when you called me, right? I did. So you need to decide. First thing you guys are going to have to decide is when you actually are going to start working this proven process. If you're not, it's okay.

You and I can still be friends. I've got lots of friends that borrow money and don't do my stuff. That's okay. We'll still be friends, okay? But if you're going to work this process, you're going to have to decide that you're going to do it. And you and your wife together are going to have to sit down and make that decision. And I can tell by talking to you, that decision has not been made. This was kind of our wake-up call.

What? The call. Oh. It was never in the original plan. So you, like, got home and went, we're stupid? Pretty much. Yeah. Well, sell it.

That's where I was kind of going. Yeah. Not really appreciated since we bought it. You know, all the rest of the conversation aside, if I make a huge mistake and I have the ability to undo it with some damage but nowhere near the damage of keeping it i'm just going to undo that mistake that that's a that's a starter right there then we can go and deal with 15 000 a year out of 120 000 income to cash flow your wife's college and no more student loans sure you can make that happen because half of your debt is your wife's car that you just bought. Yeah, so the part she's struggling with the car is, and I'm ready to sell it because it just is destroying our, you know, we're robbing our future here, but she's struggling because

we just, we pay taxes and everything on top of it, so obviously you're, at a minimum, you're losing the $2,000 or $3,000 you paid in taxes. Wah. Yeah. Wah. In the grand scheme of things. Wah. Wah.

You're going to have to decide, dude. You're going to have to decide. And maybe you're starting to decide, but I'm not even sure she's on this planet yet, the deciding planet. Because right now what I hear is a lady who wants to go to school, so we're going to school. I want a car, so I'm getting a car. Anything else I want, I'm just going to go do. And oh, by the way, while you're doing that, let's get out of debt too. Nope, not going to happen.

Not going to happen. So I don't know if she grew up spoiled, but her husband is spoiling her. I can tell you that. So, yeah, car's gone. We're going to cash flow school, beans and rice. Everybody that's an adult under your roof is working, and everything else is up for sale, too. And we're going to get this mess cleaned up, and we're going to pay cash for school. Do we want to pay a price to get a biology degree, or is this just a little luxury we're going to get this mess cleaned up and we're going to pay cash for school do we want to pay a price to get a biology degree or is this just a little luxury we're going after you guys

got to decide you can borrow yourself up to your dad gum eyeballs you've proven that now you're just going to go forward or not you got to decide man you decide i can't do this for you i can't do it for you i can't want it for you more than you want it. I can't make you do it. So you guys have to decide. And there's nothing in this conversation that indicates either one of you are close. So you're just going to have to get mad about it. Not at each other, but, you know, just get disgusted. And we're going to clean this mess up. We're going to start being adults and say no.

No, we can't afford this. No, we're not going on vacation. No, we're not going on vacation. No, we're not going to eat in a restaurant. No, no, no, no. So that we can say yes, we're going to live like no one else so that later we can live like no one else. So that we can get a biology degree. That's a fine degree. Go get the degree.

I ain't got no issue with that. But pay cash for it. No, we're not doing it unless we pay cash for it. No, we make $120,000 a year and we're broke people. You got to decide, man. You got to decide. And I'm more disgusted for you right now, not at you, but I'm for you than you are. You can do this, but only you and her can do this.

This is the Dave Ramsey Show. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you. And yes, this is an ad for Zander Insurance.

But since this is one of the most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough. Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282. Right now, 78% of Americans, that's 8 out of 10, are living paycheck to paycheck. If you drive down your street and count 10 houses, 8 of them have too much month left at the end of the money they look good they're broke number one cause of divorce in north america today

money fights and money problems stress on the family it's a problem y y'all. And folks need a plan to win with their money. If you want to help, we need you to help. We have more people wanting to go through Financial Peace University than we have classes. Become a Financial Peace University volunteer coordinator. Our coordinators have helped over 6 million people go through this class and learn not only how to get out of debt, not only how to save their emergency fund, but how to build wealth and increase their generosity to where they're just outrageously generous. You know, the folks that go through our class double their giving. Yeah, because they're not broke anymore. That's why it's pretty impressive.

Yeah. Take the next step. Help us out with this. Financial Peace why. It's pretty impressive. Yeah. Take the next step. Help us out with this. Financial Peace University. You can lead one of the groups and bring it to your area, to your church. Just go to DaveRamsey.com or text LEADFPU to 33789. That's LEADFPU to 33789. That's LEED FPU 233-789. Sergio is with us in Boston.

Hi, Sergio. How are you? Hey, Dave. How are you doing? Better than I deserve. What's up? So I currently make $37,000 a year, and in a month or two I should be starting a new position at work where I'm making around $110,000 a year and in a month or two i should be uh starting a new position at work where i'm making

around 110 000 a year whoa and yeah that's a bit of a jump what'd you do i work in the office for a construction company and i'm starting to work in the field you're going into the field and it cripples your income. Yep. Way to go, dude. What are you going to be doing in the field? Mason work. Oh, wow. So hands-on. Mm-hmm.

Okay. Wow. Look at you. Cool. All right. Good. Life is rough at your house. I love it.

You're going to be a little tired, but you're going to have more money. All right. Yeah. How can I help? I'm just wondering what to do with all the extra income because I'm 20 years old. I live at home. I'm going to school at night for free, so I don't really have any expenses besides my car. So I was just wondering how I should go about handling all this extra money.

Has your car paid off? It's a lease, which I plan on buying out and buying a cheap car for cash. Well, you can just buy it out. Keep it if you want it. Do you like it? Not really. Okay. All right.

Well, you can get it sold and go buy you something and pay cash for it, right? Whatever. But there's no reason you couldn't have a decent car if you're making $110,000 a year and you haven't got any other debts. You pay cash for it, right? That's true. You don't have to drive car if you're making $110,000 a year and you haven't got any other debts. You pay cash for it, right? That's true. You don't have to drive a beater. You're in good shape.

You don't have any other debt, right? Nope. Look at you, man. Ding, ding. Okay. Well, I'm still going to walk you up our baby steps, which is save 15% of your income towards retirement. Does your company have a 401k? They do, but I'm actually not old enough to enroll.

That's true. You've got to be 21. Yeah. Wow. Okay. Well, let's get an emergency fund in place as if you had your own place. Is there any reason not to get your own place? Well, I don't have enough money to buy a a house right now no but i mean you could rent a

little you could rent an apartment couldn't you yeah i could okay but i'd rather save the money and save up for down payment or to buy a house though right i think you could do that while renting making 110 with no debt okay yeah you'll be fine i'm not trying to throw you out i'm just trying to throw you out um it's no rush it's no rush but it's i'll tell you my my kids my youngest one is 26 sergio and every one of ours um when they left home and they left you know immediately after college someone would come back for a little bit. We let them camp for a little while. But when they left home and started paying their own bills, their emotional maturity went up. And they were already pretty wise, good young people like you are.

But it just changes when you've got to, like, buy your own groceries or you're hungry instead of your mommy doing it. You know, it changes you. It changes your manhood. And so there's no rush and i'm not calling you a little boy or something i'm just saying if i were in your shoes sometime in the next six months i would make plans to gently leave the nest okay that's one thing that's a minor thing that's just a that's just an old man thing for you okay then um then i'm gonna start saving aggressively towards buying a home.

And here's the cool thing. I mean, what if you made $110,000 and you didn't do your 401K? You put your emergency fund in place and you're debt-free, so that puts you at baby step 3B. And let's just save up and pay cash for a house. Let's see, you're 21, and when you're 24, you save, that's three years. Let's save $50,000 a year. Let's wait over 25. Let's save $50,000 a year, and when you're 26, let's buy a $200,000 house for cash.

Sounds good if I can find one in Massachusetts for that cheap. You can. It's not a big house, but it's a house, and you pay cash for it. Dude, if you do that, and you just stay out of debt, and you live on a budget, and you start investing, and you be generous with your money, and kind with your money, and you're responsible and have a game plan, you're going to be wealthy. You're an impressive young dude.

It's an honor to speak with you, sir. Thanks for calling. Scott's with us in Utah. Hi, Scott. Welcome to the Dave Ramsey Show. Dave, thank you for taking my call. I appreciate it. Sure, man.

What's up? I'm a little bit of an atypical listener in that I'm 71 years old and my kids turned me on to your program maybe a month or two ago. And I've got a question for you. I've got a variable life policy, and I know you're not on board with those for good reasons. Right. But I've got a small mortgage on my home, and so I'm contemplating taking the cash value out of the variable life policy and putting it on the mortgage.

Are you single? No, I'm married. And how old is she? She's 64. And you're 71. And how much of another nest egg do you have other than this variable life and this house? Well, we're everyday millionaires. I've got a net worth of about $1.1 million.

Well done, sir. Well done. I wish I'd have learned about your program 30 or 40 years ago. Well, 25 years ago anyway. There's only 12 million millionaires in the U.S., and you're one of them. I'm impressed. I think you did great. Well,'m impressed. I think you did great. Well, thank you.

I think you did great. Now, so let's kind of walk through this. How much is the variable life cash value? It's just under $32,000. Okay, so the face value is what, $100,000? No, $250,000. $250,000? Okay.

If you die and you don't have any life insurance and you have a paid-for house and a $1.1 million worth of investments, is your wife okay? She sees the variable life as kind of an ace in the hole for her. That was not what I asked. I was not asking about your wife's emotions. I was asking about if she has enough money to be okay if the house is paid for and you have a $1.1 million nest egg. She does, in my opinion.

I think so, too, sir. What is she used to spending a year? Well, she's pretty conservative for the most part. What is she used to spending a year? What is she used to spending? Yeah, what would she need to live if you died i would think four or five thousand dollars a month that's 50 grand is that okay with her i think so well if we raised it a little bit you know maybe 80 000 if a million dollars

making eight percent it's 80 000 without touching the million dollars. True. And you don't even have a house payment. Yep. I'm cashing the variable life in, sir. You're self-insured. You're in good shape. The purpose of the life insurance is to take care of her. And I think she's been taken care of because you two have done a wonderful job managing your lives.

Thank you for being a great example. We salute you. This is the Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war. If I've taught you anything, it's that blindly throwing money at a problem is a stupid plan and something you'll regret for years. The key to avoiding this rookie mistake is to call Churchill Mortgage and get certified. This easy program puts you miles ahead of your competition because you are pre-underwritten.

Your interest rate is secured, and yes, you can close within 14 days. Don't fall into the trap of offering more money just to compensate for a poor plan. Call Churchill Mortgage today and get certified. Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Solutions, Matthew joins us. Hi, Matthew. How are you? I'm doing good, Dave. How are you doing? I am better than I deserve. Where do you live, sir?

I live in Lynchburg, Virginia. Oh, cool. Home of Liberty University. Yes, sir. I love it. Well, welcome to Nashville. Good to have you, sir. Thank you. And all the way down here to do a debt-free scream. Yes, I am. Good.. Well, welcome to Nashville. Good to have you, sir. Thank you. And all the way down here to do a debt-free scream. Yes, I am. Good.

How much did you pay off? I paid off $54,000 in two years. Whoa! You were getting after it. What was your range of income during that time? $60,000 to $70,000. Whoa. Okay.

So that's $25,000 a year, $27,000 a year in two years making $60,000 to $70,000. You've been on beans and rice, sir. Yes, I've been pushing it pretty hard. I think you have. So what was the debt? What kind of debt was the $54,000? That was the rest of my house, Dave. You paid off your house?

Yes, I did. How old are you? 25. I love this guy. Wow. What's this house worth? Probably about $100,000. I guess part of the other story of it is I've only had the mortgage for three years and nine months.

Wow. And it was about the last two years I got an airplane and took it from a 10-year plan to pay it off to get it done now. But you understand what a big weirdo you are. Yeah, a few people have told me that. You are a seriously strange dude. I love you. my kind of strange man i love it a hundred thousand dollar paid for house in lynchburg virginia you're 25 years old boom what do you do for a living um i'm an engineer with a local nuclear company oh okay this is a guy that knows numbers okay yes all right so where did you get this smarts did your parents teach you this stuff or what um a little

bit of that and then just talking to a lot of people uh i guess it goes back to i would say god just put a lot of people into my life and i was uh willing to listen to them and just kind of go after it and then the timing of it had a lot to do with it, too. And then I started listening to you about two years ago, and that's when I went from a, hey, I could actually do this a lot faster than 10 years. Yeah, a lot faster. You're incredible, man. Where did you go to college?

Graduated from UVA. Oh, yeah. Okay. Of course you did. Look at you, you man that's amazing so uh what do you tell people i mean people got to be going if anybody hears this has to go what so what do you tell them the key is to being debt free um i guess surround yourself with people that encourage you uh that was big and then also making a plan setting a clear goal and just going after it and then having a

detailed plan so that you can see how to actually get there amazing amazing and so you said you ran into us about about a year into the three years you got the mortgage three years ago but the last two years you turned up the heat where did you run run into us? I guess I had heard about you for a while, and I just happened to – somebody was like, hey, this guy's kind of funny. And so I listened to you once or twice, and then eventually I was kind of hearing some of the other debt-free screams of people in a similar situation paying it off or paying off debt of about that range and i was looking i was like well that's my mortgage i think i could do that yeah so when you hear a news story that all millennials are deadbeats and don't do anything and live in their mother's basement how bad does that piss you off uh i'm not happy about it because you're obviously a rock star, man. Yeah.

I guess part of it is I surround myself with other good, I would say, millennials. There's a bunch of them. They're going after it, too. There's a bunch of them. They're on here every day, man, doing their death-free screams, you guys are. I'm so proud of you. Thank you. Well done. So mom and dad, were they cheerleading you?

Yeah, my mom in particular was, and then my siblings, and then a good number of people I serve with in our youth ministry at Thomas Road. Oh, okay. Several of them, I had mentioned to them that I'm trying to pay my house off, and so then it kind of, I don't know if it was a joke or what, but they would regularize me. So, are you still going to pay your house off? Yeah. And it was just a good way to keep it going.

Well, your pastor's a buddy of mine, Jonathan, and I just love that place. I got to speak up there a couple years back. I don't know if you were there the day I spoke. But I love Thomas Road, love Jonathan, and I'm so proud of you guys. And you need to be sure you let him know your story if you haven't. He'll be proud to hear it. I'm sure proud of you guys. And be sure you let him know your story if you haven't. Okay. He'll be proud to hear it. I'm sure.

He will. He comes down and spends time with us every year. He's a good man. Well, way to go, you guys. Man, oh, man, oh, man. I love it. How does it feel to not have a payment in the world and own your house free and clear at 25 years old? How does that feel?

It feels awesome. It gives me a lot of freedom to just kind of do some different things I've wanted to do. What do you want to do? What are you going to do? Well, one of the things we did last year was we went on a vacation to tour a bunch of national parks with my brother. Right about the time we were paying this off. Just if opportunities arise, I can go after it because I'm not tied down. Okay.

Yeah, I'm seeing the pictures on YouTube. They're popping up. It looks like Grand Canyon, was it? Yeah, Grand Canyon was one of them. Canyonlands, Yosemite, a couple of places. You went all over the place, huh? Yes. It was a fun 28-day trip.

Wow. And you can do that if you don't have a payment in the world. Yes, it makes it much easier. Well done, sir. Very well done. Well, I've got to tell you, you're impressive. Thank you. It's so honored to have you, man.

You inspire me. You're inspiring our listeners, our viewers. And thank you very much for being here. We've got a copy of Chris Hogan's book for you, Everyday Millionaires. You will be one, without a doubt. You're on your way. A guy that lives and thinks like you do. There's no question about it.

Well done, sir. Very well done. Matthew from Lynchburg, Virginia, 25 years old, paid off $54,000 in two years, making $60,000 to $70,000, paid off his house, baby, everything. Wow! Count it down. Let's hear a debt-free scream. Three, house, baby. Everything. Wow. Count it down. Let's hear a debt-free scream. Three, two, one.

I'm debt-free. Touchdown. Oh, my gosh. You know, this show, if this show doesn't make you dizzy you're not listening i get a guy calling me making 120 bought a 25 000 car three weeks ago and his wife doesn't want to take it back because of the taxes and they're going in debt for her college and then i you know, what, three calls later, I get Matthew, 25 years old, paid off his house and everything.

This guy can do anything he wants to do. You heard what he said, though. You surround yourself with smart people and people that are encouraging you. You ever been around somebody that just looks at you like you lost your mind? I mean, I used to know people who say stuff like, the little man can't get ahead you ever hear people say like that the little man can't get ahead let me ask you if you're 25 years old you make 60 grand are you the big man i don't think so i think you're the little man and i think you just heard the little man getting ahead there that's not to put matthew down that's to say he's a stud wow little man can't get ahead

you're putting down the poor i'm not putting down the poor help the poor every day show them how not to be poor but some people who want to defend the poor they want to defend people's right to be poor like it's a dadgum spiritual attribute or something to be poor it's not a spiritual attribute it's not a horrible thing i've been poor i've been rich i've been both i understand i'm not mad at you we don't despise the poor quite the opposite we want to help them not be poor and in the united states of america baby matthew just did it little man can't get ahead what do you think think? Eeyore is your spirit animal?

I mean, what is this? Oh, everything's bad. Everything's bad. It's all bad out there. If that's what your friends sound like, you need new friends. You become who you hang around with. Be not deceived. Evil company corrupts good habits.

Matthew just told you one of the secrets to getting out of debt. You're hanging around with people that are encouraging you. You're hanging around with people showing you can do it. Hang around with people that freaking win and show you how to win. Then you can go help somebody that's not winning. That's how you do it. That's how you help folks. Woo-hoo!

Wow! This is The Dave Ramsey Show. our scripture of the day lamentations 3 22 23 because of the Day, Lamentations 3, 22, 23. Because of the Lord's great love, we are not consumed, for His compassions never fail. They are new every morning. Great is your faithfulness. My friend Christine Kane says, Sometimes when you're in a dark place, you think you've been buried, but you've actually been planted. I love Christine.

Catherine is with us in Milwaukee, Wisconsin. Hi, Catherine. How are you? Hi, Dave. I'm good. Thanks. How are you? Better than I deserve.

What's up? Good. My husband and I, we're both 22, and we did your Financial Peace University last April and May while he was in paramedic school. Actually, he's a firefighter paramedic, and our first child was born in June last year. My husband, he just got an offer for a full-time job that is three hours away from where we are right now, and we're expecting to need to move in roughly about six weeks. But our question is, we have about $8,000 saved up for a down payment on a house, and we were just curious if we should think about renting for another year

before we think about a house, or is buying a house a good option? It's a very low-cost living area. You're debt-free? We have about $3,000 from having our son last June that we are going to be able to pay off with our tax return this year. You have $8,000 in the bank. Pay it off today. Okay.

Okay, now we've got $5,000. And how much is the tax return? It's going to be about $6,000. Okay, good. And you're getting a new job, right? Yes, sir. Okay, because we don't want to get $6,000 back. That means you've been putting in $500 a month too much.

So we need to set up your proper withholding so that they don't take too much out of your check. That's what a tax refund means. It means you paid too much in. Mm-hmm. Okay, so we'll adjust that. And you're moving to an inexpensive area, you said. Is it a rural location? Mostly, yes.

It's a small town of about 8,000 people. Okay. All right. And so if you were to buy a home, selling it might be slow. Right. Okay. You're 22. You have a new baby, and you've been married how long?

Two and a half years. Okay, good. So you just got married at 20. And what will he be making as a paramedic? About $48,000. Good. And you'll be staying home with the baby or working? I will be staying home.

Okay. I have been working for the last two years, though. Okay. All right. Wasn't accusing you being lazy you're just asking all right uh zero debt do you have an emergency fund in addition to the eight thousand dollars we're talking about we do we have three grand in emergency funds three grand a little slim on that a fully funded fund, when we get settled in the next town, would be three to six months of expenses.

Right. And so if you're making $48,000, $4,000 a month, that's your income, not your expenses. But so, you know, $10,000 is probably your emergency fund. Okay. Okay. So we're going to pay off the three today, then we're going to get six. That's going to give us 11. After the move, you're going to be short a little bit

because you're going to use some of that to move, right? We would probably use this month's income to pay for the move. Okay. That's good. And so we're going to put $10,000 aside as our emergency fund. That means we have $1,000 or a little bit more towards our starting to save our down payment. So, yeah, we're renting for a year while we save our down payment. Okay.

Down payment is beyond being debt-free and beyond your emergency fund. It's after baby step three. Does that sound familiar to you from the class? Yes, sir. Okay. Yeah, you're just a little slim on your emergency fund. I want you Yes, sir. Okay. Yeah, you're just a little slim on your emergency fund. I want you to you got a new baby, you're in a new town,

you're young and married. I want you to have a little cash between you and life. So if life happens, it's an inconvenience and not a crisis. The Bible says in the house of the wise are stores of choice food and oil. An emergency fund, Grandma's Rainy Day Fund.

That $10,000 represents financial peace. And you're sitting there calm and everything's going good and we're going to save up. You got plenty of time because you got started young on your life. So you got plenty of time to save up, buy you a house, then start your emergent, then start your 401K. You're going to have a wonderful life. I mean, think about where you'll be by the time you're only 30. Right. You're going to be in great shape.

We have a lot of hope. Yeah, you really do. Because you're wise beyond your years. You're thoughtful. You're being intentional. Those are the things that cause people to win instead of being impulsive little brats. And you're just not that. You're just a rock star.

You're going to do great. You're going to do great. So what inspired you guys to take Financial Peace University at 20 years old? Well, I think being pregnant probably factored a little bit. I don't know. It scared you to death. Like, oh, this just got real. Yes, we have a friend in our area, actually, and she was starting it,

and she just kind of put out a broadcast on Facebook, and my husband actually was the one who jumped on it, and I was actually the one who was able to attend every class because he was in school. It was kind of in and out for classes. So it was, I mean, we've always known that we wanted to stay out of debt if we could, and so this was kind of just inspiration to be able to jump on it and get going on it. Okay, so all I'm doing walking through these numbers with you is just fine-tuning.

You already had a pretty good plan. I'm just kind of dialing it in, okay? Yes, sir. So we're going to write a check today. We're debt-free. The income comes in from the tax refund. We're going to have $11,000 or so. We want to say $10,000 set over to the side as our emergency fund.

Anything else we can start saving as quickly as we can start saving. We're going to do that. Rent something inexpensive. Because the more you spend on rent, the less you have for your down payment so get you a deal and out in the country you can get a deal right on rentals there's not a lot of people wanting to rent so you know you can really get you a bargain on that and then get you something cheap and you know like take pictures of it so you can tell your grandkids how you started out life. And go, yeah, I remember back in the day, back in alt 18, back in alt 19, this is where pop and mom lived.

You know, you can tell those stories when you're old, right? You need pictures of that stuff. And because you're changing your family tree and you need to tell them how you did it. You're incredible. I'm proud of you. All right, Linda is with us in Minneapolis. Hi, Linda. How are you?

Hi, I'm fine, Dave. How are you? Better than I deserve. What's up? Well, I feel like I'm a little bit behind here, but I have a question about medical bills. I'm currently undergoing medical tests and treatments for a brain disease that I have, so I was wondering, how do I budget for medical bills when they're different, but they just keep coming in?

How old are you, kiddo? I'll be 52 in a month. Okay. All right. Cool. And how long has this been going on? I was at the Mayo Clinic in Rochester about eight years ago. So it's been going on steady since then or come and go? My health is steadily, slowly declining. I'm not working right now.

My husband is working, but I'm not. Yeah, okay. Well, what you're facing is a known fact that we're going to have medical bills. This is not a spike. It's not a one-time thing. It's a predictable thing. We're going to have some medical bills. And so it's just like having a car payment or something we're just going to put it in the budget from the math standpoint not the emotional standpoint not the drain on your

actual physical health but i'm talking about just the math okay so we just go back and look and go okay what do we think the medical bills are going to be in the coming year? And divide that by 12 and just put it in your budget like it's a payment. Okay. And it's kind of like having, I have a buddy that's got a chronic illness. And his drugs are like 600 bucks a month. And he just has to put 600 bucks a month in there just like it's a payment. It's just one of the things like buying electric bill or buying food it's just a line item in his budget i'm so sorry you're facing this kiddo

we can help you as you fight through it you holler at us we'll help you any way we can that puts this hour of the day ramsey showing the books our thanks to james childs our producer kelly daniel our associate producer 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, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry.

We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.