The Ramsey Show - App - Talk About the WHY Before the HOW (Hour 3)

Episode Date: July 19, 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. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Megan is with us in Washington, D.C. Hi, Megan. Welcome to The Dave Ramsey Show. Hi, Dave. Thank you so much for taking my call. Sure. What's up?

So I have a question. My husband and I are obviously in a high cost of living area, and we have about 10% saved up for a home, which is about $53,000. I'm wondering if we should buy a house if the mortgage would be 25% of our take-home income right now, but our income might fluctuate because I'm self-employed and my income is subject to change, particularly when we have a family. So in that case, would renting be better or should we make sure to put more than 10% down on a home to lower the monthly mortgage? What does your husband make and what do you make? Take-home. Gross. Gross. My husband makes just over $70,000, and I gross about $120,000.

Taxable income, your $120,000, or gross revenues for your business? Oh, gross revenues for my business. Oh, no, no. What are you netting? What's your net profit on your business before taxes? This year it's going to be about $80,000. Okay. So it's about $50,000, $50,000, give or take.

Half the household income is you and half of it's him. Yes. Okay. All right. And you don't have children. No. And you're how old? I'm 24 and he's 25.

Okay. So what's your best guess on when you're going to start having kids? We would hope within the next, like, three to five years. Okay. And what's your best guess on what that would do to your income? So I'm a wedding photographer, and I'm not sure I could handle as many weddings like just the physical demand of the job. I also edit for other photographers about something a little more that I could do at home.

When you say physical demand of the job, do you mean time? No, not time. Just like on my body. So shooting a wedding like eight months pregnant on like a 10-hour day, I'm just not sure. But I'm saying after the babies are there oh and you've got if you've got a three-year-old that yeah you you have you know you you should be back to the your ability to shoot again but the only constraint might be time yes okay all right so we don't know is the answer. All right. But you think it's a minimum of three years and you're 24. I'd buy the house now based on your income.

Now, if you get out there and you're 27, 28, 29 years old and you have a baby and you decide, I don't want to work. I'm going to stay home with the baby. Then you're going to sell your house. But that's not the end of the world. You will have owned it three or four or five years, sell it, move into something you can afford to live in, in order to adjust to your new income with your decisions based on your family. But you've got time.

There's no reason you can't buy a house. You're not going to live in this house 50 years anyway. The average mortgage lasts 5.6 years, and the average person stays in a home less than seven years. Okay. That's the average. So you would say sell the home to downsize? If you have to.

Okay. We don't know what's going to happen when you're 29. Right. Five years from today. Except that there's probably some babies in the future, and they're probably at least temporarily going to knock out some of your income, but we don't know what's going to have happened to his income during that five years. Right.

There's too many unknowns to say don't do it because it might go down five years from now. If it does go down and stays down and his income hasn't come up, he makes $70,000 and you bought a house based on $150,000 income, you're selling the house, right? Yes. But that's not the end of the world. I mean, you could just move and get you a place you can afford because you want to stay home with your baby. There's nothing wrong with that. You just adjust your lifestyle to fit your income. But, you know, don't be one of those people that's so foolish you think you can do both.

I can live on half my income and keep a house payment that's now 50% of my take-home pay. That's called stupid. But that's five years from now. You don't have to decide that today. Go buy a house. Okay. But be willing to sell it and move if you need to for the good of your family later okay if the mortgage is going to be like four hundred thousand dollars it should be a fourth of your take-home pay on a 15-year mortgage if it's more than a fourth of

your take-home pay on a 15-year mortgage you're buying too much house in any situation. But today, you've got a $150,000 household income. You can afford a $400,000 mortgage. Kyle is with us in Minneapolis. Hi, Kyle. Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing? Better than I deserve.

What's up? Just a quick question. I was wondering if I should move out of my parents' house or if I should continue my current track of funding by Roth IRA. How old are you? 19. Okay. Are you going to go to college? Yeah, I'm currently enrolled. Oh, you're in college?

Yep. Okay. I wouldn't fund a Roth IRA while I'm in college. Who's paying for college? I am. Okay. I wouldn't fund a Roth IRA while you're paying for college. How are you paying for college? Just cash flowing. Good.

So you're working all the time? Yep. Okay. But you got no overhead because mom and dad, their way of helping you in school is letting you live there while you're in school. Yeah. Nothing wrong with that at all, my brother. I think you're doing great

you're a hard working dude but i wouldn't fund a roth ira your main listen a roth ira is an investment kyle an education assuming you're studying something that actually has marketplace application and you're not overpaying for it is an investment what are you studying uh general business okay and what year are you First or second? I'll be going into my second year. Okay. All right. Getting ready to be sophomore. Okay, good. And you're in a state school or what? Yep, state school. Good for you. Okay. So you're going to get a business degree, a general business degree, and you're going to have paid cash for it while living at home. That is going to give you a better return on investment than any mutual fund in the world.

You are a better investment than a mutual fund is. So I want you to take care of you getting out of school for the next four years. I want you to pile up cash as high as you can pile it up to ensure you go through school with no debt. You go through school, you graduate with no debt that's all i'm concerned about for the next three years you got plenty of time to do a roth ira starting at 22 23 years old when you get out of school with no debt and you'll be able to do it almost instantaneously because you've gone through school with no debt, working. Way to go, man. You're killing it. Awesome.

So proud of you. Very, very well done. This is The Dave Ramsey Show. Thank you. We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million active members. I'm talking about people who come to LinkedIn to make connections, grow their careers, and discover new job opportunities. In fact, 90% of LinkedIn users are open to new opportunities,

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Randall is with us in Austin, Texas. Hey, Randall, how are you? Yes, sir. I'm doing great. How about yourself? Better than I deserve. What's up? Well, me and my wife just had two little babies.

We got an 18-month-old and a nine-week-old, and we're in significant debt. And I know we need help and I'm trying to convince my wife to get on board with me and do the baby steps. I haven't read them myself. I'm somewhat familiar with them. But

I'm done. I'm ready to be out of debt and I'm ready to start building wealth and retirement. How old are you guys? I need a way to... I'm 33. My wife's 32. How much debt have you got?

I got 15 on my truck, 20 on the other vehicle, 30 on my wife's student loans, and about 18 on my student loans. I think she's got about $10,000 in credit card. And what's your household income? I make $30,000 and my wife makes $48,000. Good Lord. I don't know how you guys are paying these bills. Yeah. You've got to be stressed out, man.

Who's paying the bills? You? Oh, no. My wife paying the bills, you? No, my wife. She's in charge of it, and most of it because I don't really like doing it that much, to be honest with you. I know I need to get better at it. I'm not suggesting you take it over. All I'm saying is the math that you just gave me, I don't know how you guys are making this meet. This is very tough.

There is no wiggle room here. You guys have got to be stressed out. Yeah, we are. The D words come up a couple times, and I'm definitely not going to let it get there. Yeah, you've got two babies, and you're overwhelmed with debt to the point that the guy who does not want to do the budget is on the phone going, help me. That's where you guys are. So good for you. You're ready to change.

And she's probably ready to change, too. But listen, she's been doing the bills. And so the first thing is the rule is we're not going to condemn her like she did a bad job because you guys made these idiot decisions together. Right, absolutely. Yeah, you've got cars you can't afford, you've got student loans coming out your ears, and you're using credit cards, and you're spending. And, you know, with a $78,000 income.

So this is doable. This is fixable. But your life is getting ready to change dramatically so that your life can change dramatically. You're going to have to live like no one else so that you can live and give like no one else and give a better life. Listen, let me just tell you, those kids are going to have a better mom and dad, and your marriage is going to be better when you have zero debt. I can't wait. I want to be there so bad.

It's unreal. I know it's possible. I need to convince my wife. I brought you up several times and I've showed a couple of videos of you and you know, she's like, Oh, that sounds like a great idea, but I can't, we can't pull the trigger. Yeah. And you know, what you guys need to do and I'm'm i'm ready to downsize my vehicle uh and you know i'm i'm ready to do these things but okay the first thing is stop stop i can't be the only one to do it i know stop you cannot talk to her about what to do until you both are on the

same page that we need to do it so don't talk don't talk to her about dave ramsey or about beans and rice or about selling her car or your car. That's the how you do it. First, we've got to get the why. And the why is because we want to win with money so that our marriage is stronger and so these kids have a better future. That's our why. Absolutely.

And she will buy into that why. And we've got to figure out how to do that. So here's what we're going to do. I want you two to go to Financial Peace University as my gift. I'm going to pay for it. If I give you this membership, will you go to the group and take the nine lessons? Can you get her to go? Yes.

Okay. Because the local church will be teaching it there a bunch of different nights. Different people have it all over Austin. And you guys just go to the group, take the nine lessons. All the stuff is online. The EveryDollarPlus is on there, which ties to your bank. That's the world's best online budgeting software and app. And so you can use that, and you get the whole course online as well but you need to

go to the group and sit and watch the video with other people that are doing this that will get her on board but you have to be very careful to say uh to let her know that this is not because she did a bad job so you're taking a money over because now you're suddenly smart and she's stupid because that's not going to play. No, definitely not. That's not going to play. Well, it shouldn't play. You shouldn't treat her that way. She's been doing the best she can in a mess, and so now you're going to come along,

honey, I'm sorry that I asked you to do this all by yourself. You've been doing the best you can, but we're in a mess together, and we're going to get out of this mess together, and we're going to go to this class and learn how to do it. And Dave gave it to us for free. Now, you can get her to do that. Yeah, I think I can. Okay.

Then you call me when you're debt-free and do your debt-free scream, okay? Absolutely. All right, brother. I don't even think she says she doesn't even know about that part yet, but I do. You can play some of those off of YouTube. There's hundreds of them on our YouTube channel posted, and you can play some of those people and what it's like to not have a payment in the world,

and you can't even imagine that right now because you're overwhelmed with babies, marriage, and debt, and you're getting hammered right now. So you hold on. Kelly will pick up. We'll get you signed up for Financial Peace University. Chrissy is with us in Detroit. Hi, Chrissy.

How are you? Hi, Mr. Ramsey. I'm great. Thank you so much for taking my call today. It's an honor. My pleasure. How can I help? I have a question for you about school and debt.

I'm an Army veteran. I served for about five years. I have a great GI Bill. I have two years left for my college degree. My ultimate goal is to go to medical school, but I'm really hesitant about accumulating the debt. I'm working through, I have about $20,000 in debt that I'm trying to consistently pay off before I go to school, try to get a good

net of savings underneath me. I've been going back and forth with my partner about whether it makes sense for me to join the military as an officer and become a military doctor, potentially cut that doctor's salary in half for about six or ten years to have that free education, or whether I should just take on the $300,000 in debt that I know it will cost me to get a medical degree and then to just work in private practice, potentially make more money, but also have a ton more debt associated to the advanced degree.

If you've listened to me for ten minutes, you know I'm not going to tell you to go into debt. I listen to you every day and i know that um but just long term i wonder if making you know 90 or 120 a year as opposed to 350 or 370 as an emergency room physician um if that trade-off long term would make sense i know that i'd be able to save a lot more you know these plans only work when they work. That's true. Life doesn't turn out like you think it's going to. That's very true.

I talked to a lady the other day who had $300,000 in debt, and her unexpected blessing was her son has autism as a new baby, and she's going to come home. And so she has $300,000 in debt, but she's coming home to take care of a baby. And so it didn't turn out like she thought. That would be rough. Yeah. I'm not suggesting bad things are going to happen.

I'm just suggesting you can pretty well count on bad things happening. Right. Life doesn't turn out exactly like you think. And to run a plan out that the way you've run it out, the hypothetical you've run out has no bumps in the road, which makes it an unrealistic hypothetical. What would be your recommendation? I don't recommend people borrow money, honey. You know that.

So you've got two choices, okay? One is you do the military, or two is you find another way. But I'm not going to tell you to go $350,000 in debt for anything, anytime, under any circumstances. And I wish to God Congress would not allow you to do that. Because I am insuring you as a taxpayer, which is highly offensive to me. I don't mind giving it to you if you're in the military. I appreciate you folks that serve in the military. It's highly offensive to me to guarantee your loan, and you seem to have no limits on your ability to spend.

This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and a struggle to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance.

Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. In the lobby of Ramsey Solutions, Cody and Alyssa are with us. Hey, guys, how are you? Hi, Dave. Good. How are you? Welcome, welcome. Where do you guys live? We're from St. Paul, Minnesota.

Up in the Twin Cities. Wow. Bit of a haul to Nashville. It sure is. Well, good to have you. Thank you. And all the way down here to do a debt-free screen. Absolutely. How much have you paid off?

We've paid off $110,000 of student loans. Good for you. And how long did that take? Just under three and a half years. Good. And your range of income during that time? We started off just under $80,000 and ending up around $100,000. Way to go.

Very cool. Good. It was all student loans? All of it. Okay, cool. So how long have you guys been married? Four years. Oh, so this is a, as soon as we get married, we're attacking the student loans thing.

Yes. Pretty much. Okay, cool. So tell me the story. How did this all unfold? Basically, well, I'm the nerd and the saver. So that's a lethal combination. Double dip, yeah.

And so I was trying to figure out all the money and how we were going to afford to live and all of this and kept telling Cody, like, this is impossible. We can't do this. We need help. And someone mentioned, oh, there's like this class. So we tried to take it and went through it, and it was all from there. Oh, okay. So you went through Financial Peace University at your church or a local church?

Yeah, we found a couple through our church that was hosting it at their house. So we took it with them about three and a half years ago. Oh, fun. So that got the whole thing started because you're like, I don't know what to do. We're brand new married. We've got to do this. That's about as good a start as you can get, though. That's pretty good.

Very cool. Good for you guys. Well done. So what was the hardest part of this for you all? I think the hardest part was seeing everyone else our age doing the normal thing and going on expensive vacations and buying new houses and buying new cars and having them say well what's wrong with you why aren't you doing this and we were kind of like we know we're on the right track but it was also kind of hard to watch everyone

else do the normal thing while we were sitting back and saving all of our money and paying off all of our debt. So did you have more detractors, more people saying you're crazy or more people cheering you on? I would say more people cheering us on. I think it helped. I mean, going through that first class of FPU, we had a room full of people who are all older than us and they're looking at us.

Every time the video comes on, they're like, you need to do this. If I had done this when I was your age. So they're telling us, you've got to do this. Stick with it. Stick with it. And then we started coordinating. We got our Bible study group through it. And then we started helping coordinate at Eagle Brook Church up in the Twin Cities and having that kind of touch point where other people are going through this and we're helping kind of them walk through these baby steps and how it fits is a really good accountability piece for us.

It gives us a chance to say, oh, yeah, we need to look at this and we need to refocus on this. Make sure that we're as tight in all of these different areas of our budget as we should be so that we're really laser focused on paying off the debt. Very cool. So how many classes have you coordinated now? We've coordinated four. Three through our church, one for our Bible study. Wow. Look at you, man.

You're killing it. It's just a blast. It's so much fun. Wow, look at you, man. You're killing it. It's just a blast. It's so much fun. Well, it keeps you on track. It exactly really does. Because you can't lead the class like that as a coordinator and not do the stuff. That's like super hypocritical, right? Nothing makes you learn something like teaching it, right?

Right, for sure. Wow, well, way to go. How does it feel now that you've done it? Kind of unreal. Unreal, yeah. It's kind of weird, and it's especially weird. My favorite thing now is when I open up our banking app, the first account at the top is our emergency fund,

and for the first time it's a big number. And I'm like, this is money in our account, and we're not throwing money out the door every day. We're now saving towards things that we're actually excited for, and I don't think it's totally hit us yet. Did you get the sense? I mean, of course, Sharon and I, we did all this wrong, as you know, you know the story. And so, and I talked to so many wonderful young millennials like you guys, you're just

on fire. Way to go. How old are you guys? 26. 26. And paid off $110,000. You were not paralyzed by the debt. You were not a victim of the debt.

You just decided to go get it. Exactly. And all we did was show you how. You're heroes. I'm so proud of you. Thank you. Very well done. It has occurred to me, and I've said it before with young couples getting married,

the first thing they do is go get out of debt. Once you've done this together, does it not feel like you can do anything together? Absolutely. I mean, everyone else has, like, all these money fights and all this, and we're just on the same page. We're laser-focused on the same goals. If life throws something else at you outside the financial part in some other category, some other department, so to speak, that's a challenge, you'll be able to do it

because you've met this challenge. Absolutely. And you learned how to do it together. It's great marriage training. It really is. Early newlywed you learned how to do it together. It's great marriage training. It really is. Early newlywed training to learn to do something together, to climb a hill together, you know? Yeah, absolutely. And have to pull each other up and hold each other back and all that kind of stuff.

Well done. Well done. I think you're equipped. You're going to be millionaires in no time. What do you all do for a living? I'm a web developer. I work for a little startup company in the Twin Cities. Yeah.

And I'm a former preschool teacher who's now an executive assistant. Oh, very good. Good for you. Okay. So you're doing well. You've got a great income. You have no payments. That's awesome.

And you know how to handle money. Now you're teaching other people how to do it with the Financial Peace University class. Very, very well done. Thank you. Very well done. And how's it feel now? Do you have any payments? Did I already ask you that?

It's still, it's just kind of mind-boggling. And it's so fun to look at the numbers coming in and go, we get to decide where all of this money goes for so long. And a big budget item on our list was minimum payments for the debt snowball, everything else, and then everything else goes to that debt. And now it's like that number at the top comes in, and we get to do what we want. We can use it in our favor now.

Oh, I know what I didn't ask you. What's the key to getting out of debt? That's the one I didn't ask you. I would say that it's having a plan and sticking to it. Just planning ahead and knowing, like, I would say our sinking funds in our budget was a big one. Like you always say, Christmas is not an emergency. It comes around every year. And so having those sinking funds allowed us to kind of know what was

coming our way all year round. And I'd say just staying really focused and continuing to refocus because it's when you start to get a little bit lax and not paying enough attention to all those little details where all of a sudden the money starts slipping through the cracks and you don't know where it's going. So making sure that you're focused on debt and nothing else. Yeah, you really can't relax until you get through it. You've got to be gazelle intense. You've got to be game on all the way through. Very cool.

Well, good for you guys. I'm very, very proud of you. Thank you. Well done. Well done. And thank you for leading the class. Oh, yeah. It's such a blessing to others doing that.

I mean, you've got all those people in all those classes, including the first one you went through as a student now watching and watching your debt-free scream on youtube yeah i love it you got a big audience man we do just add it use up my ratings today there we go good for you well done all right it's cody and alissa st paul minnesota 110 000 paid off in three and a half years, making $80,000 to $100,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Way to go, you guys. Way to go. We've got a signed copy of Chris Hogan's retire-inspired book for you. We want that to be the next chapter in your story, that you do become millionaires, that you live like no one else so that later you can live and give like no one else. Absolutely incredible. Very, very, very well done. I mean, that's just as good as it gets.

You're in your 20s. And, you know, I've said it before, and I'll probably say it again, because I say everything I say over and over and over again, because so many people don't hear it the first time, and I really don't have that much to say, so I just have to say it over and over. But I'm meeting a lot of very sharp young couples that are not victims, that are not participation trophy kids. They see something they want, they know what to do, and they go do it. So it may be that these millennials are all deadbeats, but I've yet to meet them. Oh, I take that back.

I have met the deadbeat ones. I know what they look like. A lot of them are on social media attacking me. Oh, you can't do it. You can't do it. You can't do it. Meanwhile, their peers, the same age group, are sitting here on the air doing their debt-free scream saying,

I did this. Say, I did this. I did this. I did this. I did this. I did this. I did this. I did this. I did this. I did this. I took the steps.

I paid the price to win. I lived like no one else so that later I can live like no one else and give like no one else. It's a decision. You have to decide. Are you going to pay the price to win or not? This is the Dave Ramsey Show. Thank you. Our scripture of the day, Lamentations 3, 22 and 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 Great love we are not consumed, for his compassions never fail. They are new every morning. Great is your faithfulness. F. Scott Fitzgerald said, Vitality shows in not only the ability to persist, but the ability to start over. Very cool.

Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Greg is in Nashville. Hi, Greg. How are you? Doing well. How about yourself? Better than I deserve. What's up? I guess me and my wife have been people

with a couple of good jobs throughout our lives, and I have a little girl now. She's actually been in a transition period, changing her job, which is a really good job, paying us not too well, but we've also been deciding if it would be good or not for her to just quit and stay at home for a while. And we just wanted to know what your thoughts were,

if it was feasible with our incomes. Yeah. Well, I think it's a wonderful idea, if that's what she wants to do. Can you live on your income? Yes. Well, I would definitely hope so. What do you make? What do you make?

Right at $80,000 a year. Okay. Do you guys have debt? No. Student loans are paid. We you guys have a dad? No. Student loans are paid. We have two good cars that are paid. We're about $50,000 out of paying out of our house. Okay.

Very good. What does she make? At the moment, she's probably right at about $24,000. She left a job earlier in the year that was paying out at $50,000 and kind of started a part-time internship but uh it's just kind of one of those things where the little girls you know too and she's really uh thinking that we want to have a little bit more time at the house with her yeah but at the same time she's uh never been not employed anywhere. She's very scared about not having a job.

Okay. Well, I mean, the thing is this. It sounds like she wants to be at home, but she feels like it's her duty to work. Is that what you're telling me? I believe so, yes.

Yeah. I think she ought to be at home. I agree. Do you have Yeah. I think she ought to be home. I agree. Do you have any words of wisdom on how to portray that? We make enough money. We've done a good enough job with our finances. We're debt-free. We can live on my income.

Let's sit down and look at the budget, what it looks like on my check, and we'll work on that together. And I think this is your desire. I also think this lady, the way you're describing her, will probably go back to work when the child goes into school at some point. That would be 100% correct. Yeah, I just think that she's wired that way. I think she gets something out of the workplace,

and I think it's something she'll want to return to. You don't have to, though. It's not a requirement. But there's a lot of economic benefits for mom being in the home full-time, lots of them. I mean, she cooks from scratch. It saves money. It's healthier. You know, the kids are, you know, subjected to other kids only as you want them to be and in healthy situations. And so, you know, there's all kinds of stuff that happens when mom's at home.

It's all good, and it's all good. It's good for the kid. It's good for everybody. But it doesn't mean you're a bad mom if you're not at home. That's not at all what we're saying. But this lady wants to be at home, so she should be at home. It's just that simple, I mean, to me. And my wife was the same way.

Her goal in life was to be a mom. And 32 years ago, she became a full-time mom, or 33 years ago now, I guess, but when Denise was born hadn't has not worked outside the home since um and and frankly uh we're empty nesters and obviously we don't need any money but um you know uh even if she wanted to go do something i would really don't want her to because i'm kind of spoiled by her being there and our schedule is pretty free we could just do whatever we want to do and i don't want to have to stop and ask somebody else if i want to go on vacation because i own the freaking place down here i can go when i want so you know it's just it's a matter of that kind of stuff this is why

you work so that you get to choose when you work and how you work and you can choose what your career path is and you while you're good with money And you can choose what your career path is. And why you're good with money, why you're good financially, so that you can choose all these things. And that's the process. So I don't know how you talk her into it, but I don't think you're going to have to talk her into it. I think she wants to be there with that baby. And she's not doing anything wrong.

There's no higher calling than motherhood. I mean, really. none tracy is with us in phoenix hi tracy how are you i'm doing well i hope you're having a good day there dave i am how can i help wonderful um in brief um i got laid off two months ago um just found a new gig as a contractor it's contracted work for six months. So my question today is, do I continue where I was two months ago with baby step number two, or for the next six months or so, do I just save as much as I can in the event that this contract is not extended and I have to go back to searching for another job? How long were you off?

Two months. And what is you off? Two months. And what is your field? Project management. Practice management? Project management. Project management. I work with IT and business process improvement. I got you.

Okay. You know, it all comes down to what we think the probability is that either the contract is renewed or by then you land a permanent gig. What's the probability of that? If the probability of that's 90%, then we're probably going to keep on baby step two. The probability of that's 50%, 60%, which is kind of what I think I'm hearing, that this contract is renewed. I mean, six months is not enough i mean i gotta know i gotta i gotta sense some stability the other side of that with a permanent gig or contract renewal on a high probability in order to continue a baby step two so i'm probably if i think i'm hearing you right um this is not you know your long-term gig is not contract to contract your long-term gig's

probably a permanent job right that's the hope um my new manager had mentioned that she was on contract for two years before she was hired on permanent there so she made it sound like there's a good opportunity for it to be extended out but since it was such a new department and projects they're working on they just can't guarantee it no they're not so that's why i'm a little hesitant both sides if they could guarantee it they'd hire somebody and for less than they're paying you on contract. Right. So they wouldn't contract for it.

So, yeah, I think I'm saving right now. Okay. And, you know, at about month four, I'm going to really turn up the heat on my job search. Okay. If they're not coming through with another contract renewal or a permanent offer, one of the two, at month four. Because we don't want to live in limbo and perpetuation. Yeah, that's not fun. Yeah, but for today, yeah, let's just pile up money.

Money gives us options. Let's have a big pile of money, and let's start with that. Hey, good question. Sorry you're facing this, but it sounds like it may turn out for your good. Thanks for calling in. All right, let's see. Luke is in our famous Facebook group. It's called The, capital T-H-E, The Ramsey Baby Steps Community.

And there's tens of thousands of you in there. He says, help, my dad is currently licking out an empty container of steak sauce to save money this cannot be what you mean by gazelle intensity well i don't know what that means exactly luke um because you can't really exist on steak sauce so if he's licking out the steak sauce because he's cheap and doesn't want to buy another bottle of steak sauce, but he's eating okay, then yeah, that's fine. I don't have a big deal with that. And chill out on your drama self. But if the man is eating steak sauce and the last drop of it is his last nutrient, then no, it is not what I recommend. I don't recommend people starve in

order to get out of debt. But I do recommend you cut your dadgum lifestyle down to nothing. And most people overspend. I mean, I've run into about probably five people in 30 years that weren't eating right in order to get out of debt because they had an obsessive compulsive disorder. If that's your dad, tell him to get psychological help and buy some groceries. But otherwise, he's just being cheap, and you're being a drama queen. I don't know which it is. You've got to decide that, Luke.

That puts this hour of the Dave Ramsey Show in 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, 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.