The Ramsey Show - App - Take Time to Heal Before Becoming a Healer (Hour 2)

Episode Date: July 4, 2019

Take control of your money once and for all. The Dave Ramsey Show offers up straight talk on life and money. Millions listen in as callers from all walks of life learn how to get out of debt and start building for the future. Check out the fifth most downloaded podcast of 2018!   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE     Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Luke is starting off this hour in Omaha, Nebraska. Hi, Luke.

How are you? Hi, Dave. Thanks for taking my call. I really appreciate it. Sure. What's up? So I'm on Baby Step 2. I'm a fairly new listener to you, and I'm all in, gazelle intense, all that stuff.

Question about baby step two though. I have some stock options through work that were vested that I could sell. They're non-retirement. And I was curious about tax implications at the end of the year. Should I, if I sell those to pay off my snowball, should I save X amount of those for end of year taxes or how does that work? Have you exercised the options, or they're just options? They're exercised. So you own the stock?

Correct, yes. How long have you owned the stock? They've been vesting over the last three years. Okay. Because if you've owned it more than a year, any gain you have on it will be taxed at capital gains. Now, when you took the options, did you pay taxes on them at that time as income? You should have, right? Yeah. Say, for example, I had 100 shares, for example. They took out X amount of them automatically through the stock company, from what I understand. And then I was able to sell the ones that were left over.

Okay, because when they give you stock or give you a deal on stock, that's ordinary income because that's part of your income package. Okay. When you sell stock at a profit that you've owned more than a year that would be taxed at a capital gains rate of 15 okay to be less a lot less than on your based on your income so how much money are we talking about cashing out here oh it was only like 10 grand oh okay so it wasn't a whole heck of a lot of money but it was enough to get me going on my snowball yeah good well i'm definitely cashing it out regardless of the tax implication the only question is how much to hold back for the taxes, and you probably need to sit down with a tax pro and give them the details of your scenario

and let them calculate how much your tax bill is actually going to be. Okay. And then that tells you how much to hold back. But, no, it's not automatically held back for you. You're owning the stock and the stock is being sold. It sounds like you've owned it long enough that it'll be a capital gains rate. That's what it sounds like. But double-check that with a tax pro and actually calculate it

so you don't get in a pinch. You don't want to have a $4,000 tax bill, and you only held back $1,000 or something. And so calculate it out ahead of time. Know where you're going and have a clear path. And then that's the route to go. But yeah, do hold something back after meeting with a pro and figuring it out. If you don't have a tax pro, just go to DaveRamsey.com. Click on ELP for tax preparation. And one of our tax pros can sit down with you and help you do that. So good question.

We appreciate you being here. Pamela is with us. Pamela is in Los Angeles. Hi, Pamela. How are you? Hi. I'm great, Dave. How are you? Better than I deserve. What's up?

Super. My mom is 85 years old, and we're thinking she can sell her home to get out of her reverse mortgage or pay it off and keep a nice sum for her nest egg. I've talked to an ELP realtor. I've talked to a SmartVestor Pro and her tax preparer, and they all say it sounds good. But I'm wondering if you see any red flags. They all say what sounds good, selling it or paying it off? Selling the house that's right at about $550,000 and paying off the reverse mortgage with that,

which is at about $315,000. And then, you know, after she pays the realtor, she might get to keep maybe, I think it's like $175,000 more or less. And when they did the reverse mortgage in 2006, she and my dad, they got a lump sum of about $200,000, and then the reverse mortgage was set at $250,000. Obviously, the reverse mortgage has gone up, and so has the value of the house. So she's kind of able to get a nice chunk. Does she have any other nest egg?

She has about $130, $140 in a savings account. $130 or $40,000? $130, $140 in a savings account. $130 or $40,000? $130,000. $130,000, okay. And she's 85. Where is she planning on living after she sells the house? She's looking at renting a two-bedroom in this area, so she's near her church and her hospital and her knitting club.

She doesn't want to buy. she hates being a homeowner since my dad died she wanted to sell this house like every year but it wasn't feasible okay all right so now it's feasible and she's she's not trapped anymore by this reverse mortgage okay yeah she feels like it's creeping up on her and she'll end up with nothing it's because it on her, and she's going to end up with nothing. It's because it is. That's why she feels that way. And so they're a horrible, horrible product. Okay. Well, the good news is she can get out of it, and she can not be a homeowner anymore, and she's just going to rent a nice apartment where everything's taken care of.

Is that the idea? That's the idea. Okay. And she would have $130,000 175 and so it sounds like we got about 300 000 nest egg and she's 100 debt free renting and 85 years old do i have that right that's right i don't see any downside to this i would do it how's her health she's pretty healthy she's got arthritis you know and macular degeneration she's her vision's going down but she's very independent.

She knows how to ask for help. So how much does she need a month to live on, and where is that going to come from? She has her Social Security and pension for about $30,000 a year. And then the investor is going to help her put that into her sale profit into a variable annuity at about 7%. And she can get, I think he's planning to do $300 to $400 a month income for her. Is that one of our SmartVestor Pros? No, the SmartVestor Pro wasn't close enough for her to feel like she could just go and see him anytime. So we found, through our realtor, we found an investor who we interviewed and met with a second time.

And he's nearby, so she feels comfortable with him. And I ran whatever he gave us. She's the investor. He's the investment advisor. Right. Thank you. Yeah, that's okay. 7% must be the floor on the variable annuity.

It should not be locked in at 7%. And so I want to make sure, you guys, that it ought to be the minimum of that. And if the mutual funds that are in the variable annuity make more than that, it should make more. But 7% ought to be the floor, the minimum that she makes. Okay. And if that's the case, then what you're describing to me sounds fine. She's paying a little bit more for the variable annuity,

but in her situation it gives her lots and lots of guarantees, and it's a good product for where she's sitting right now for sure. So, yeah, I love it. I love the whole plan. Let's do it. Great. We love you, too. Thanks.

Thanks, Pamela. Appreciate the call. Open phones at 888-825-5225. You jump in. We'll talk about your life, your money. Eli is on Facebook. Dave, what's your opinion on using the Acorns app after Baby Step 3, not as a primary investment, but just a literal spare change investing?

You can do it if you want. Just don't think you did anything. If you invest spare change, you know what you're going to get? More spare change. If you invest nickels, you're not going to get as much as when you invest dollars. So don't feel like you did something because it's kind of a, you know, it's kind of a, it's just a little gimmick is all it is, but you need to do real investing. This is the Dave Ramsey Show.

This is big news, guys. You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right now and see if they can save you money before rates rise again.

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Now, who does that? Blinds.com does. Site-wide savings right now, you can get your window blinds at 5% off, an additional 5% off, plus the sale that's going on. But you always use the slash Ramsey, use the Ramsey promo code. Christy's in Kentucky. My husband is the beneficiary of an inherited IRA. He's currently invested in an annuity, drawing 1%.

Well, that sucks. We're discussing the possibility of cashing it out. Yay. And paying off debt. Yay. If we cash it out after taxes, there'd be enough to pay off all our debt except our home. This is not our retirement. What do you recommend?

Oh, I would definitely cash that out. Number one, it sucks. You have a horrible fixed annuity there. Good God, 1%. Somebody ripped your parents off, man. That's something else. What a horrible job. Anyway, yeah, and so, yeah, you're going to pay income tax on the entire amount.

It is a taxable event. There is no penalties on this. And, yes, I do not recommend you cash out retirement, your retirement, to pay off debt and pay penalties and taxes. But I do recommend, in almost every case, you cash out enough of an inherited IRA to become debt-free. Athena is in Chicago. Hey, Athena, welcome to the Dave Ramsey Show. Hi, thank you so much for taking my call. Hey, Athena, welcome to the Dave Ramsey Show. Hi, thank you so much for taking my call. Sure, what's up?

So I'm at a crossroads right now in my life. I actually just left my husband about a month ago. It was not a healthy relationship. And I kind of uprooted my life where I was living and moved back in with my parents now. They've been really supportive, and I really want to kind of restart my life. I have kind of like career goals that have nothing to do with what I've been doing in the past, and I wanted to ask your advice on what's the best way for me to get to my career goals, given my situation right now that I'm living with my parents.

And I don't have any debt, and I do have some savings. I have my own car. But I don't have a job right now. And, yeah, I'm just wondering what would be the best way to get to a vision that isn't really, like, has no roots right now. Wow. How old are you? I'm almost 30. I'm 29.

How long were you married? Less than a year. Oh, wow. Must have been bad. It was an abusive relationship, so it was good that I got out of it. Yeah, you don't want to be in an abusive situation, for sure. Yeah. Yeah. You don't want to be in an abusive situation for sure. Yeah. And so do you, were you working in a position before you said, what were you doing before?

Well, I've been doing a lot of things. I have a, I guess you could say a very prosperous degree. I'm really good at like analytics, like working in Excel. And I did all kinds of different work in digital marketing and academia. So I know I can go and make a lot of money. So you have a degree in what now? In applied mathematics and economics. Okay, and you've used that in data management and data mining and so forth, and you used to make how much? I've made anywhere between, using that degree degree anywhere between about $40,000 to

$70,000 a year. That sounds reasonable. Okay. And now that you've got some experience in the Chicago market, you could do that again, but it's not what you want to do. What is it you want to do? I want to, I have a dream. I mean, first of all, I love to write. But what I really am passionate about, I really want to help people. I'm really interested in like psychology and even something, either going back and actually becoming like a licensed psychotherapist or just becoming a personal coach and being able to help people in other ways and maybe writing.

So, yeah, it's not really laid out exactly how, but I do just want to help people by, like, communicating with them and helping them with their problems. Probably got a lot to do with what you've been through, huh? Yeah, it actually does. That makes sense. Okay. Well, how long ago did you move in with your mom and dad? It's been about a month.

Okay. All right. I have a 30-year-old daughter, okay? Mm-hmm. And so if I were talking to her with the limited information I've gotten in two minutes from you. So, in other words, I don't know you extremely well, but I'm hearing several key things going on. You've been through a really traumatic, wounding, hurtful experience and process. And it's going to take you a little time to heal from that so i would personally encourage you not to make a major career or educational path decision right now while this is all raw i would give yourself about

a year to heal and during that year let's poke around on let's go ahead and get back get back in the job market and get your good position making making $60,000 or $70,000 a year. I'm not saying do that the rest of your life. I'm saying give your emotions and your spirit time to recover. You'll make a better decision because, you know, things are pretty raw around you right now. Or you're a psychopath, one of the two. If you don't have some weird moments in every day right now with what you've been through,

then you've got issues. You're not a human, okay? And so give yourself a little time. And during that year, join a nonprofit and volunteer coaching young women. Go by the domestic violence shelter and offer to volunteer and coach and sit and talk. Write a blog. Use your writing skills on some of your experiences and your thoughts as you spend this year healing. And so exercise some of the muscles in the area that you think you want to move into.

That will keep you energized, moving in the right direction. And with the information you gather by exercising those muscles, the experiences you have during that year, with that, with the healing, and with some money that you'll pile up during this year, you can make some really good quality decisions about this time next year about what you want to do. But there is nothing on fire here that says you have to start school and go get your PhD in psychiatry today. As a matter of fact, I think that would be a mistake today to make a decision that's that big and that heavily invested based on the fact that you've got a heart for hurting people because you've been through hell.

And I think it's wonderful you've got a heart for hurting people. Larry Crabb says the best of us that are healers, including me, are wounded. He wrote a book called Wounded Healers. And those of us that walk with a limp because we've had something happen to us or brought it on ourselves, and as in my case, going broke in my 20s, having to start over, those of us that walk with a limp, we are better healers because we understand when somebody's hurting. I understand people when they're hurting and scared financially,

like people that have never been there don't. And you can intellectually grasp it, but when you've been where you've been, you see things differently. And I've never been where you've been. You've never been where I've been. But we see things through different eyes after that. So I think God will use this hard time in your life and use you to be a healer in the future, which is what your desire is. But let's give it a little time to decide exactly how tactically how that's going to

manifest itself and go make 80 grand next year and bank all of it and get yourself out on your own and, you know, be a self-sufficient, confident, competent young woman that regains her confidence after an abusive thing. That's an important step and um you know that's what i would tell my own 30 year old daughter is let's decide today not to not to decide but to begin to take little baby steps in the right direction exercise some of those muscles and i think there's a lot of wisdom in that. You're going to do what you're going to do.

But that's what I would do if I woke up in your shoes. Or if I heard this from my own daughter, that's what I would tell her. This is the Dave Ramsey Show. Thank you. We'll be right back. In the lobby of Ramsey Solutions, Nathan and Rebecca are with us. Hey, guys. How are you? Good. Hey, Dave. We're truly doing better than we deserve today.

Fun. Where do you guys live? Ellensburg, Washington. And where is that near? So it's actually, if you just look at Seattle and you go two hours east, it's right in the center of the state. Gotcha. Cool. Very fun. Pretty area of the country. It is. Yeah, fun. And you guys, looking at your

t-shirts, you are a member of the Mutual Admiration Society. We are. We are. I love my awesome wife. I love my awesome husband. Very good. He didn't wear his blue one today, but... He wore his purple one. He did. That's even better. He went better. That's even better, yeah.

I think that's what you call that, yeah. Welcome, guys. So how much debt have you two paid off? We paid off $46,000, and it took just under 30 months. It was 29 months. Wow. Yeah. And your range of income during that time?

So I think we started at right about... $70,000? Yeah, $68,000 I think was right when we were starting. And did it at about $95,000. Yeah, yeah. Cool. What do you guys do for a living? I taught social studies for four years in public school,

and now I'm actually the associate pastor at our church in Ellensburg. Very neat. Yeah. And I'm in vocational rehabilitation counseling. Okay, cool. Yeah. So what accounts for the $25,000 raise in 30 months in your household?

Well, I started off, I was working in a wood shop for about four years. And the wage was a little low, but it was really enjoyable work. But that shop closed, which forced a change of career and that's kind of where the bump came in. Good, okay, got it. Yeah. Good deal. We were able to,

when I left teaching and moved back into ministry full time, we had a couple months of double paychecks and so that really sped up our debt snowball as well. Very good. What kind of debt was the 46,000? Mainly student loans. When we started financial peace we had a few uh medical bills from having our daughter um but the bulk of it was my student

loans i had about 33 000 in student loans when we got married and so how long have you been married six years this month okay yeah so what got you started on this equation 30 months ago this journey well um my uh my parents actually got us an fpu home kit when we got married in 2012 and it moved with us i think to three different households and um we didn't throw it out no we didn't throw it out right and uh through you And through some circumstances that got us a little bit tighter, we decided to pull it out and finally start on this. And actually, I wrote down all of our debt and everything, and we just kind of crossed one off as we went down the line. And yeah, it's been a pretty cool experience. Once we started, it was definitely a kick of like, why didn't we do this three years ago?

That was definitely a humbling moment. So you had cheerleaders and mom and dad for sure. Yes. They were going, yes, they finally opened the box. Yeah, exactly. Finally used our gift. Finally used the DVDs. I love it.

Very good. Good. Did you have people saying you were crazy while you were doing this? Yeah. Yep. We had a lot of people, even just when we'd go out to dinner with coworkers or with other people of like, well, we're not going to have another baby until we're out of debt, or we're not going to do this until we're out of debt.

And they're like, oh, that'll never happen. And we just would nod and smile and be like, okay, that's up to you. So it definitely had some pushback on that. Very cool. Good. What do you tell people the key to getting out of debt is? Goodness. Have a plan, really.

Yeah. And follow the plan. I mean, you can have a plan, but if you don't do it, day in, day out. I think we've seen, we've led the class three times now at our church as well.

And so, especially when you're in a partnership and a marriage, like it has to be both of you. Yeah. We've seen people, we're going through it, that it's just, if you're not both on board, it's not going to work.

It causes big fights, really. It does. We didn't actually have very many, but it can, for sure. If you're not on the same page. Right, exactly. But if both of you are on, it's game on, then that's fine because you're just trying to figure out how to win the Super Bowl now. Pull in the same direction. Yeah, we chose to live with roommates and live really frugally.

And we live in a really tiny duplex right now that we kept the cost of living really low. And the biggest thing that I think was the hardest was that I stepped out of doing ministry for a significant amount of time to pay off loans. I was working as a missionary with a campus ministry called Chi Alpha. And so I chose not to go on staff somewhere and chose to leave ministry in order to pay off loans. So we weren't raising a missionary budget to pay off debt.

And so being able to go back into ministry now, even before that snowball was over, was huge. And that's a staff position. Yeah. Yeah, it's at a regular church, whatever that means. There's no such thing. No such thing, I know. That's the only way I can describe it.

Good for you. Well done, well done. I'm proud of you guys. Thank you. We've got a copy of Chris Hogan's retire-inspired book for you.. Good for you. Well done. Well done. I'm proud of you guys. Thank you. Well, we've got a copy of Chris Hogan's retire-inspired book for you. Sweet. Thank you. Number one bestseller.

We want that to be the next chapter in your story. Yeah. The outrageously generous millionaires. Yeah. Yes. And you're on your way to doing that. So very, very well done. And congratulations.

You said you had a baby along the way. We did. We had her before we started the journey. So she is three and a half. And she's home. Split some time between the grandmas oh yeah she she was so abused last week yeah she's great good stuff well thanks for coming by you guys i'm proud of you well done thank you nathan and rebecca state of washington what was i don't remember the name of the town. Now, $46,000 paid off in 30 months, making $70,000 to $95,000. Count it down. Let's hear a debt-free scream.

Ready? Yeah. One. Oh, are we going down? We're going down. Three, two, one. We're debt-free! Very good, you guys.

Very well done. Stephanie is in Chicago. Hi, Stephanie. How are you? I am doing well. How are you? Better than I deserve. What's up?

First of all, I think that your program, everything has been amazing. I am a registered nurse nurse out here in Chicago. I do have a good amount of substantial student debt. I'm having trouble hearing you. Your phone is breaking up. Can you make sure to speak directly into it, please? Can you hear me better now? Yes, ma'am.

Okay, I apologize. I am a registered nurse out here in Chicago, Illinois. I have about $90,000 worth of student debt. I have decided I've been very fortunate enough. I've decided I'm going to stay home for the next two years, so I have no rent. This is my only student, my only debt, really. I have not even a car payment. I drive a 12-year-old car. My goal is to also in the next year to double my

salary because nursing is very fortunate enough of a career where you could expand. You have so many options with it. I was just calling to see if there's anything else you think I can do to get out of this step faster. I already saved up my emergency fund of the step number one. I'm spending additionally over my payment an additional $900 to my loan, starting with the smallest going on my way up. Okay, you owe $90,000. Yes. Okay, and you're paying $10,000 a year off right now, extra.

That's what $900 a month is. And you make how much a year? About 63 to 65. And you can double that by going crazy worth your work hours. So the nice thing is after a couple couple years experience uh i could do travel nursing so it's contracts that i could travel out in the country um the hard part is of course you're living in a suitcase but with those salaries you're well making about six figures you have children no i do not thank god So you're single? Yes.

Okay, so you can kind of go on an adventure and knock this out very quickly. If you did two years of that, you'd be debt-free, right? Yes. So my question also for you is I actually am in the position now where I'm getting possibly a new job soon. I just interviewed, and I heard back that it it went well and the paperwork's not in yet, but it will be a paid increase. I was wondering to also ask if you think I should contribute a little bit at all into a retirement plan. No, nothing into the retirement plan.

You have a $90,000 mess you've got to clean up. Completely focus on that and go crazy. It's going to be about $4,000 a month to get it knocked out in two years. That's about what the numbers come out. You can do this. Keep listening. Hazel's on Instagram is having utility bills on automatic payment wise? Absolutely. If you're living on a budget, which we teach you to do, get you every dollar budget,

you've budgeted for the amount of money, and putting it on auto draft means it is always paid earlier on time so that you get the discount and you never pay a late charge. And, of course, you never get behind on your utilities. Utilities are one of the top two things I would pay anyway. The first thing I'm going to buy is food. If I'm broke, the second thing I'm going to buy is utilities because you need to be warm or cool and have lights and have food

in order to be able to function to clean up a mess if you've got a mess. But even if you don't have a mess, my personal utilities are on auto-. Don't mind people having electronic access to my checking account at all that are of the friendly nature. Now, I never would tell you to allow a collector to have electronic access. If you're negotiating a late bill, never give them electronic access. But I have all my utility bills, a bunch of my mutual funds, insurance, a bunch of things. Auto hits the account, so I don't have to think about it. It just makes life easier. Low maintenance. Robin is with us in Chattanooga. Hi, Robin. How are you? Hi, Dave. Thanks for taking my call. Sure. What's up?

My husband is self-employed, and I'm a stay-at-home mom. And we have always kept the family budget and the business budget separate. Good. But the business has no emergency fund, and it also has some debt. And so I'm wondering, should we sell one of our paid-off cars to help out the business? Okay. How much debt does the business have? A total of about $13,000. And what kind of business is it?

He's a handyman. Okay. And what is his income last year, net profit that you paid taxes on? Well, he started the business partway through the year, so for nine months it was only about $17,000 that he bought. What do you think he's going to make in the next 12 um it i don't i don't know we mean the income you know you got seven in the last nine right or 17 in the last nine right so i mean we would hope you would be over 35 or 40 in the next 12.

Right. At this point, though, the business is, you know, in debt, and so he's just trying to pay those bills. And if we get a paycheck, that's great, but sometimes we don't. That wasn't what I asked. Okay, I don't understand. Okay. I'm just helping you look at the projection on your business. If he's brought in $17,000 taxable profit in nine months,

it's easy to assume that he would make between $30,000 and $40,000 in the coming 12. Okay. Because the nine months that he made $17,000, he was just getting started. Nobody even knew he was in business hardly. Right. So he should be able to make more than that in a six month period of time and that would be 34 000 if you doubled it for six does that make sense yes i think so okay and so i think you're going to be able to pay off the debt out of the coming income but he's going

to have to make more and more and more and more money. Profit. Profit. And so he needs to really start doing a very careful job of analyzing the accounting of what kind of business he's making the most money on for the time he puts in, and where's the sweet spot in this business? Where can he take this business and make it really do very, very, very, very, very well? I know one guy in our area that made over $100,000 last year profit as a handyman. He has unbelievably high prices, but he's unbelievably good kind dependable shows up on time is not a threatening type character

and so if you need something done he comes in and spends a half a day with you and you pay him well but boy oh boy does he do a great job and is he there every time he says he's going to be and does he finish on, and is everything clean when he finishes? You betcha. So he's like he's a specialist. And so you just keep dialing it in, dialing it in, dialing it in. And I think he can make a lot more money than he's making now if he'll continue to over-deliver, over-perform, and under-promise. Don't over-promise and under-deliver.

Over-deliver and under-promise. Don't overpromise and underdeliver. Overdeliver and underpromise. And just really bring it, and then just keep cranking your prices up, cranking your prices up, and then finding those spots, the types of things he does as a handyman that makes him the most money, and continue to grow that that way. I'm going to send you a copy of my book on running a business called Entree Leadership. It's the number one New York Times bestselling book. It's how we've grown our business from a card table in our living room to where it is today.

It'll show you a lot of good ideas. I don't think you have to sell a car. I think you need to earn more money, and that'll get you out of debt. Vanessa is with us in Dallas, Texas. Hi, Vanessa. How are you? Hi, Dave. How are you today?

Better than I deserve. What's up? Hey, thanks for taking my call. I have several questions I would like to get your advice on dealing with universal life and dealing with insurance. I have a policy with a universal life. I have a term, but my husband has a term. We have accidental death, and we have disability for work. Okay.

My daughter just introduced me to your plan. I was listening to her tape, so we just started your plan this month. We're at step two. Good. So we're with the universal life insurance. And how old are you guys insurance how old are you guys getting married how old are you guys i'm i'm 55 he's 56 and how much debt do you have not counting your home not counting the home uh we're looking at 42 700. And what do you make a year, and what does your husband make a year?

About $60,000 without overtime for me and $85,000 for him. Okay. All right. Well, if he died today, you'd be sitting there with your household income more than cut in half and have $42,000 in debt. That sounds like a mess, doesn't it? Yes. So he needs to buy about a 10-year to at least 65-level term insurance policy,

somewhere around 10 times his income, so somewhere around $800,000 up to a million, somewhere in there on 15- to 20-year level term. You will find that to be less expensive than your rip-off universal policy. It does not save money inside of it, but you pay pennies on the dollar compared to what you're paying now. You, at the same time, should have about 10 times your income, so about $600,000 on you, because if you die, he's got a mess on his hands.

You only need about 10 years because you don't have any kids at home. They're grown and gone. We're going to get this debt cleaned up, and then we're going to start saving money. And when you have a big pile of money and you don't have any debt and one of you dies, then you're fine, financially speaking. And you won't need insurance long term. But for the next 10 years or so, you need some insurance. So I would go to ZanderInsurance.com, if I were you,

and shop about a 10-year policy for you 55-year-olds. Again, about $800,000 and something on him, about $600,000 and something on you for 10 years. And just cancel the accidental death because you're not double dead if you die by accident. You need the same amount of money. If you die by accident, it's by heart attack. And so you're not double. Well, it happens less often. I know.

That's why they don't charge you anything more. It's gimmick stuff, gimmick stuff. And now long-term disability insurance is completely different. That's a different subject, and everyone, if you can afford it, needs long-term disability. And if you have that through work, that's probably the best place to get it, and that's definitely the route to go. But go to Zander, that's Z-A-N-D-E-R, insurance.com. They're an insurance broker that we endorse. They don't work for me. I don't own them,

but I buy insurance from them. And the guy that owns it, Jeff Zander, has become a friend of mine. I've endorsed this company for over 20 years. Because when you put in your information, it automatically on their website shops through a bazillion different companies and gets you the best possible quote anywhere. And you're just not going to beat the quote. And that's why we use them and why I use them personally. So just do that. Get some term insurance in place, and drop the universal. If you can get other insurance, I wouldn't have cash value insurance. I wouldn't leave it in place.

Now, if you're sick, you may be stuck with it. But that's what I would do if I woke up in your shoes. Hey, thanks for being a new listener. That puts this hour of The Dave Ramsey Show in the books. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.