The Ramsey Show - App - Termites, Roaches and Credit Cards (Hour 3)

Episode Date: September 26, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It is a free call at 888-825-5225. Thank you for joining us. You jump in and we'll talk.

Matthew starts off this hour in Salt Lake City, Utah. Hi, Matthew. How are you? All right, folks. I'm finished. Dave, how are you? Better than I deserve. What are you? Hi, folks. I'm finished, Dave. How are you? Better than I deserve. What's up?

Okay. Sorry, this is really exciting. I'm getting a little anxious here. I'm wondering, how do I know when, is there ever a good time to dip into ratios? I know saving, giving, and spending, but I know they also say give 10%, save 15%, and then you spend the rest. But how do you know when it's okay to give a little more, and how do you know when it's good to save a little more,

good to spend a little more? Well, when I'm working on the baby steps, I'm focusing on that baby step exclusively. And so in baby step two, we're getting out of debt everything but the house we've listed our debts smallest to largest and we've stopped saving completely and um and we we you tell folks you know give 10 as a part of your budget but any money you can squeeze out of your budget other than that goes on that baby step until that's done. When that's done, then everything goes into the emergency fund except the 10% going to giving.

And so, you know, we start there. Then once that's done, then we start putting 15% of our income into retirement, 10% tithe. If you're a Christian, you're giving a tithe a tenth of your income. And then if you're not christian you're giving a tie the tenth of your income and then uh or if you're not then you're just giving 10 we just allocate 10 for giving because you always want to be giving at least that and then that's at the point that you can start to say well you know in addition to that if i want to do some additional giving that's fine uh i wouldn't do any additional investing at that point because i'm going to start throwing it at kids' college, baby step five or six, paying off the house early.

When you're in baby step seven and everything is paid off, house and everything, you've got your emergency fund in place, now we're putting more than 15% into investing, and we're certainly giving more than the baseline of 10%, and we're going to be enjoying some of that money. But, you know, there's not a set guideline after that point. But it's good to have some ratios. Okay. That's what I thought.

So, like, when I'm working, like, when I'm working, go ahead. I'm sorry. Yeah, well, my thing is I'm 18, and I'm hoping to stay out of Baby Step 2 for the rest of my life. Good. I've never had any debt, and I never want any debt. Good. Okay. What I would tell you is let's get up to these other baby steps.

Get your house purchased. Get it paid off. All that kind of stuff as fast as you can. But, like, for instance, Matthew, when I'm working with a huge income earner, like I was meeting with an NFL player a while back, okay, and the guy's making $10 million a year, okay? Jeez. Yeah, and, you know, at $10 million a year, he needs some kind of a guideline to not just spend it all, right?

Right. He's in his mid-20s, and, you know, $10 million is a lot of freaking money, and you can end up broke because the NFL stands for not for long. Their average career is 3.7 years, right? So, you know, you better bank some of this while you're at it. And so you need to be, say, what percentage of my income do I need to live on? In his case, he wisely, but against all of his buddies' suggestions, he wisely said, I'm going to live a great life on $500,000 a year. That gives me $9.5 million a year to invest, right, and to give out of that.

And he could do a lot of giving out of that half million and still be all right, right? But if he'll just live like that for a few years, he'll come out of there with $30 or $40 million set aside, and he's set, you know, for the rest of his life. But instead, you got to have some kind of a percentage, some kind of a guideline that says, this is how much I'm going to spend, otherwise you'll spend it all. And a saver will save it all. And a saver will save it all. And a giver will give it all. And all is a mistake.

You should always be doing some of all three. Always be a giver. Always be a saver investor. Always be enjoying your money. Now, you can do small percentages of enjoyment if you have a huge income and have great joy. Great. You get to do some pretty cool stuff if you live on 5% of $10 million. I mean, it's not a bad life, you know.

It doesn't take much. It doesn't take much percentage to spend on you to have a great life. So that's where you get to when you get into the baby step seven and beyond stuff. And you're right on your way. Rhonda's with us in Dayton, Ohio. Hi, Rhonda. How are you? I'm great.

How are you? Better than I deserve. What's up? That's awesome. Well, I had a combination question because I, too, have read the Love and Respect book by Dr. Emmerich. And I was just wondering what to do with my life and my husband. We've been married for quite a while, and we cannot get on the same page financially.

We've not been able to do this for over 30 years. There's debt out there, and most of it is honestly student loan debt. We don't have any car payments. I even couldn't tell you how much he actually makes right now because we have so many issues with debt. And I know it's a marriage problem. I get it. I can't. I don't know what to do to get through the problem.

And I need your advice. Okay. Well, I don't know that there's one magic pill here because these ruts are pretty deep. They're 30 years deep. And so jumping up out of that rut is not an easy thing. It's probably a lot tougher than just a guy on the radio is going to get you signed up for. Yeah, I know. But I think there's two things that go on.

One is, what's your husband do for a living he's a financial advisor okay all right um which makes it even harder because he won't talk to you and he won't read your book and i actually bought your book for all of my children it's not this is not about me okay this is about you i know um i'm gonna be okay whether your husband reads my books or not i'll be all right okay so don't worry about me but the uh the thing is the point is though that his wife has been um completely discounted and your vote doesn't count your husband's arrogant. Mm-hmm. And he doesn't need your input either. And that needs to change for your sake, because you're going to blow up one of these days, and we're not going to be able to get you to land back on this planet.

It's going to, eventually, you're going to go there. And I've met people 35 years later get divorced. I mean, and you don't want to do that. So I think, but most of the time, most husbands are good guys, most of them, and he's just not hearing you that this is as serious as it is. And so I think you need to start explaining it to him that this is very serious and you're not going to be okay with this continuing this way. And I think you guys need to sit down with a marriage counselor.

If he won't go, you need to go without him and get some advice on how to deal with him. That's better than advice I can give you. Good, solid marriage counseling is in desperate need here. This is the Dave Ramsey Show. Okay, things are getting pretty weird out there. I thought the Equifax breach was bad enough. It exposed the personal financial info of half of all Americans. Now we have breaches affecting almost every U.S. citizen, and the data stolen is more personal and equally dangerous.

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That's Zander.com. Jeff is with us in Philadelphia. Welcome to the Dave Ramsey Show, Jeff. Hi, Dave. How are you? Better than I deserve. I know that already. That's all good. How can I help? So am I. I'd like to get your advice, actually. Okay.

I do some amateur road racing. I have a small little race car. Definitely operate it on a shoestring budget, me, my wife, and family. And there's no real money to be made in this racing. It costs money. The last race weekend I was at, I had a family member surprise us and show up and spent the weekend, got really excited. We're a lot alike. The end of the weekend, he handed me a bunch of money and said, I want to help you guys out. I want to sponsor you. I want to make a race team. I want this to, you know, money not to be a factor on your racing. And he's given me a budget to go national racing. And I just wonder how I should handle it. Now, he's writing this

off as an advertising budget from his business. Of course, I'll put his company name on the car and trailer. But how do I handle the money? I have a couple of ideas, and I'm wondering if I can run them by you and maybe get your opinion on them. How much money? It is a total of $35,000, two $15,000 checks, and a $5,000 check. I've only deposited one so far, just to take some immediate expenses that we have here. So forgive me, I'm nervous, too. That's okay. You're doing fine. You're doing fine.

Never lost a patient. How can I help? What's your suggestion? Well, I have three scenarios that I'm thinking of, and I've done a little research. One is just kind of run it as a hobby out of my own personal account and then take this money and add it to my personal income. I think with the new tax laws, it does not bump me up to the next tax bracket. I could see setting up a doing business as account under the race team's name,

where I can also see setting up a limited liability company. And of course, I have to take into consideration on his end and his advertising budget and if he gets audited. So I just wanted to know what the best option is and if you have other options. Okay. And so he's giving you $35,000 to put your name or to put his company name on your trailer and on your race car. Correct. And that's your entire obligation? Yeah, essentially, yes. What's essentially mean? Well, I mean, as far as what we've discussed and what we've agreed to, yes, that's the only stipulation.

He, of course, is going to come out and watch the races. But, yes, that's all. So you have met your obligations. Once you've done that and you go race with the car and his name is on the side of it and you go race with the trailer, you haul the car in the trailer, it's got his name on the side of it, you do not have any further technical obligation to have been, to morally have done what you promised you would do, right? Correct.

Okay, good. Good. Why don't you write that up in an email or maybe just a one-page letter and you guys sign it? That's a good point. That would help him with an audit, and it would help you guys later in case someone remembers the conversation differently than someone else. All right, so like a one-page document.

It doesn't have to be a big-time contract, but it's mainly just so you guys don't disagree two years from now as to what was promised. Okay, yeah, that makes sense. Nobody's feelings are hurt later, okay? I'm not saying he's a crook. I'm not saying that. Because sometimes memories fade over time, and people change their minds on what they believe something to be, and it just isn't true. But when it's all written down, and it helps me because I forget stuff. And if I can go back and pull out and go, well, that's what I said I would do.

I need to do what I said I would do, and I can follow through, right? And it helps you remember that you said you would do that. It helps him remember that's all you said you would do. And so let's do that, number one. Number two, I probably would get an LLC because if someone were hurt in this racing situation, the company could get sued. You could get sued. Okay. And I know there's insurance involved.

I know there's disclaimers and liability waivers and everything else when you're doing these races. I understand all of that. But people sue people. So, anyway, I'd put it in an LLC. This is a high-risk endeavor. So I'd put it in an LLC. It's worth putting it and doing that. And then open up.

You get a tax ID number for the LLC, for the IRS, and you get a checking account that you run all the race income into, which will be $35,000, and all the race expenses going out, which will be $35,000. And by the way, if you actually spend the money on the racing, there won't be a loss. You will not have an increase in income. Okay. It depends on the calendar year, obviously, but you'd have to spend it all. Any money you receive by year end, you'd have to spend by year end, or you will have an income.

But income minus expenses equals net profit, and that's all that's taxable. Okay. Well, there's a saying, how do you make a small fortune in racing? Take a big fortune and go into racing. Yeah, same thing. Same thing buying a yacht or a vineyard. Yeah, same deal. Buy a sports

team. It'll do the same thing to you. It's just how to turn boats, cars, everything. Yeah, anyway, you're exactly right. In other words, I don't think you're going, unless you hit some prize money or something, you're probably going to have, this money's going to run its course, and you will have had some fun, and he will have got his name on the side of the car. Okay.

And you'll be done. That's great. You know, you'll be back to hobby land again, unless he just is so enthused he continues to fund it beyond the $35,000. Which you might do. I mean, maybe you go out there and you win a bunch of stuff, and he starts liking having his name beside yours. You know, that'd be cool.

That'd be fun. What is it you're racing exactly? What kind of car? Oh, it's called a Formula V. It's based off of an old Volkswagen Beetle. So it's an open-blow, single-seat race car on road courses like Watkins Glen, Indianapolis, things like that. Oh, wow. Okay. So I've always run at the regional level just in my local area because of my budget,

and now he's allowing me to go and take it to the nationals and to the runoffs and what they call the Super Bowl of amateur racing next year. Okay. But it doesn't require a $100,000 car upgrade. No, no, definitely not. Okay. You can take the car. You just need the travel money. Pretty much, yeah.

It's going to be some upgrades to the car, get a car, and travel money. That's so fun. I'm going to grab it with both hands and have a blast. Absolutely, dude. One year, but who knows. Go hit a couple checkered flags and then call us back and tell us the story, okay? Okay, will do. Hey, congratulations, Jeff.

That sounds fun. Sergio is with us in Los Angeles. Hi, Sergio. How are you? Hey, Dave. Great. How are you doing? Better than I deserve.

How can I help? Quick question. I've been listening to you here for about a month or so, and your information is phenomenal. Thank you. So know, I'm, so we are married. I've been married for about five years, living together for about nine, but we file separate taxes. We have no kids, and, you know, I work as an independent contractor, and she is an apartment manager, and so we live at home rent-free, and so, you know, luckily enough, we can accumulate some money here and just pay it off the vehicle.

But so I'm looking to invest. And so the question then would be is, you know, I can't qualify, I believe, for like the Roth IRAs because of how we file? No. If you're married, you can qualify for a roth regardless of how you file but it's all it's almost always cheaper to file married filing jointly always saves you on your taxes no matter what huh very i mean like 90 something percent of the time you're going to save money you're going to save on your tax bill just doing married filing jointly so i don't know what the benefit

is of filing separate what is the benefit i'm just trying to maybe write off some more i don't know what the benefit is of filing separate. What is the benefit? I'm just trying to maybe write off some more. I don't know if maybe I have a bad accounting, perhaps. You can't write off more by filing separate. Your write-offs are your write-offs. I mean, you can only deduct certain things, and you can deduct them whether you file jointly or file together. Yeah, it sounds like you do need a new tax preparer or get a second opinion on your tax situation.

The law doesn't change on what is deductible based on whether you file jointly or not. So, yeah, there's a lot of stuff going on here. Yeah, just jump on DaveRamsey.com and click on ELP for taxes. Sit down with one of our tax pros that we recommend and see if they give you

similar information to what I did. Maybe there's something I don't know because if there's one thing my knowledge is narrow and slim on, it's taxes. But I think I'm pretty right on that. This is the Dave Ramsey Show. Hey, Spencer here from Smile Love. At Smile Love, we'll straighten your teeth and help you love your smile. That's what we do, and we do it for less than you'll find anywhere else.

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to take an additional $100 off. smilelove.com, promo code Dave to take an additional $100 off. SmileLove.com, promo code Dave. Mark and Katrina are with us in Buffalo, New York. Hey, guys, how are you? Hey, Dave, we're doing great. Awesome. So, I see on my screen you're debt-free. Congratulations. Thank you.

Oh, thank you. Cool. How much have you guys paid off? Just about $65,000. Very cool. And how long did this take? About two and a half years. Good for you.

And your range of income during that time? At the beginning of it, we were at $103,000, got up to $108,000, and then Katrina actually left work to stay home with her daughter, so we dropped down to about $85,000. Very cool. Good. What kind of debt was the $65,000? A little bit of everything. A bunch of credit cards, some vet bills that we were behind on, student loans, home improvement loan, and one big stupid truck one big stupid truck

well every truck's got to have a name that was the whole reason that i got involved with this oh my god one day and realized we're just spinning our wheels not the truck wheels but our financial wheels yeah perfect pun yeah Yeah, love it. Very cool. All right, so that's what happened. Two and a half years ago, the truck made you disgusted. Tell me about this journey.

How did you get out of debt? Where did you learn about us and all that? Well, I started Financial Peace University through my church. Loved the class. Thought it was fantastic. Was ready to just jump right in with everything. And then I came home, and Mark decided he was too smart to follow in my footsteps. So we did end up spinning our wheels for quite a while,

and then eventually he decided that he was tired of having debt and tired of credit cards and took the class himself uh with me later on oh good okay yeah i don't recommend couples take it without their spouse because it'll cause a divorce yeah yeah i should have been a little smarter and i was well no but i mean i mean she's coming home with her claws out i mean she was very nice about it i was just too stubborn yeah okay all right how long you guys been married oh coming up on 20 years this winter oh okay well that'll get you set in your ways that's what that'll do okay so after 20 years you are 100 debt-free everything but your house is this the first time you've been debt-free while you've been married? Yeah. First time in 20 years.

Yeah, we got married and we went out and got a credit card. We had to build our credit score up. Yeah, that's what you do. That's what all us smart people did, wasn't we? Right. So how does it feel? Oh, it's unbelievable, Dave. Well, you know, it's just so freeing that we can actually bring our money home and do with it what we want to do.

So what's the secret to getting out of debt? What did you guys learn in Financial Peace University that you said, okay, you've got to do these two things. You've got to do these four things. What are they? Well, the two big things that I learned was definitely that budget. You have to sit down and do that every single month. There's no skipping. You can change it in the middle if you need to if something comes up,

but it definitely has to be done every single month. And then work together was the other big thing. We found that it was a lot easier to get that budget done and to meet our goals together. Okay. Yeah, being on the same page is a big deal. Budget helps do that, but it also gives you the guidelines, the guardrails. What about you, Mark? What do you tell people?

People say, you paid off all your debt, man. How'd you do that? Same thing like Katrina says. You've got to put a plan together, and you've got to work together on it. Another thing that I think is you have to be content with what you have. If you're always trying to keep up with the Joneses, you're never going to get there. Yeah.

You know, that's one of the benefits I had. There's a lot of benefits of me going broke, but one of them is I just, I used to really worry about what people think, and I just don't even care what people think. I mean, it's kind of bad. I really should actually care a little bit you know but i just don't care at all and it's like you know dave how do you put up with all that hate mail you get i just don't care you know i'm not doing it for them so it's okay you know it doesn't bother me

and but so let me ask what happened to the big stupid truck you pay it off or you sell it no we put i told you i was stubborn dave we We pushed through it. Good. Good. You kept it. At that point, we were already halfway through paying it off. Yeah. I mean, this is how bad it was. Not only could I not afford it, my credit was so bad I couldn't get a loan. I had to co-sign it. I had my dad co-sign it for me.

So he's glad you got paid off. It was kind of one of those things. I couldn't give it up. I had to push through it just to prove that I could pay it off. And it was well below the threshold of being too much truck for income at that point. And you liked it, and there's all these other things going on. So what kind of truck is it? It's a Nissan Titan. Oh, nice truck.

Very nice. Yeah, it's great. Yeah, they're made down here. Okay. Very cool, man. Congratulations. Well done, you guys. Very, very well done. Who. Okay. Very cool, man. Congratulations. Well done, you guys. Very, very well done.

Who was your biggest cheerleader, you two? Oh, my goodness. I think for me it was my parents, my mom specifically. She was the one that got me into the Financial Peace University class at church, and she really kept me focused and kept me pushing through, you know, definitely my biggest cheerleader there. And I would say, you know, my parents were, too. In fact, we've led three financial peace classes since then.

Wow. And the very first one we did, her parents came, my parents came, and, you know, my parents were the first one to sign up for, and they came as cheerleaders, but I think they got more out of the class than anyone. That is so neat. Wow, very cool. Thank you for leading the class. It's a lot of fun to do. This has become a family affair for you guys.

Well done. For sure. Very well done. Well, we're very, very proud of you guys. Congratulations. And, of course, we've got a copy of Chris Hogan's book for you, number one bestseller, Retire Inspired, and we want that to be

the next chapter in your story that you become not only debt-free now, but now millionaires and outrageously generous along the way. And I think you're well on the way. You're going to be right there soon. I hope so. Awesome. Thank you. Great. Thank you, Deb. Congratulations. Mark and Katrina, we're proud of you. Buffalo, be right there soon i hope so awesome thank you great thank you dev congratulations mark and

katrina we're proud of you buffalo new york 65 000 paid off in two and a half years making 103 up to 108 down to 85 count it down let's hear a debt-free scream ready three two one Ready? Three, two, one. We're set free! Woo-hoo! Boom! This is how it's done right here, baby. This is how you do it. Open phones this hour at 888-825-5225. Well done, you guys.

Very, very well done So for those of you Here in my hometown Of Nashville Many of you listen on our local Radio station 1510 WLAC and we appreciate You listening there

Many of you listen on a podcast as well Because you're Not around that time of day or the signal wasn't what you wanted it to be or whatever else. Big news, and everybody spread the word around Nashville for us. Help us spread the word. WLAC just picked up a co-branded FM signal, and so it is now 1510 WLAC and 98.3 FM.

And so you can hear the Dave Ramsey Show in our own hometown on FM now on 98.3. And so dial that in, and those of you in Nashville, help us spread the word around. Let all our friends and neighbors know they can listen on FM now. And you can certainly catch us. And we're on in drive time in Nashville. And so be sure you check us out there. Open phones at 888-825-5225. Amanda is on Twitter.

You can follow me there, at Dave Ramsey. Same thing on Instagram. Now Instagram has more followers than Twitter does for me. Instagram is getting ready to pass a million. And I've got like under 900,000 on Twitter. Anyway, she says, is a TSP considered a pension or a 401k? It's more like a 401k. The Thrift Savings Plan is for federal government employees, including the military.

And it is yours. You own it. A pension, you don't own. A 401K, you own. Your TSP, you own. So if you leave, you take it with you. If you die, it's yours. With a pension, you can't take it with you when you leave.

And when you die, they keep it. So I love the TSP. It's one of the greatest things out there. This is the Dave Ramsey Show. Our scripture today, Isaiah 40, 31. But those who hope in the Lord will renew their strength. They will soar on wings like eagles. They will run and not grow weary.

They will walk and not be faint. Reverend Phillips Brooks said, Do not pray for easy lives. Pray to be stronger men. There you go. Christy Wright is our Ramsey personality, the founder of Business Boutique, equipping women to make money doing what they love. She's the best-selling author of the number one bestseller, Business Boutique,

and she's created an incredible online training group for women with businesses. It's called Business Boutique Academy. She teaches you exactly what to focus on for your business so you can earn money, make an impact, have the freedom and flexibility to do what matters most to you. Having your own business can be really scary, be really overwhelming for anyone, but it doesn't have to be because you don't have to be alone. And you can learn, get the knowledge that gives you the pushback on the fear too.

The more knowledgeable about something you are, the less afraid you are. Me too, you know, all of us are that way. Academy enrollment for the Business Boutique Academy is open right now, but only for this week. It is open enrollment until Friday. After that, enrollment will close. So you can join today at businessboutique.com. Check out the Business Boutique Academy. Guys, if there's a lady in your life, a mom, a sister, a wife, a girlfriend, that has got incredible potential and you think she just needs that boost to go ahead and move into the business that's going to make her who you think she is, well, maybe you need to tell her about Business Boutique Academy.

You might even want to pay for it and send her in there. Yeah, it's a group of really rock star ladies. I'm telling you, they're so smart, it's scary. Rudy is with us in El Paso, Texas. Hi, Rudy. Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing?

Better than I deserve. What's up? Yes, sir. I was calling because I'd like to see if I can get some advice from you. My wife and I recently paid our house off. Good. And, I mean, we kind of started listening to your show, but, you know, we're a little bit too late to follow your steps. Why is it too late to follow my steps?

Well, I'm just saying that, you know, before you ask me, why don't you follow the baby step, this baby step, you know. Oh, you mean you'd already done some stuff out of order before you started listening. Yes, sir. I see what you're saying. Okay. How can I help today, though? Well, my wife and I paid off, you know, the house. Good.

And we made the mistake of actually buying a truck. And we have two credit cards that we have debt on. My question to you was, do you think it's a good idea to take an equity loan and pay off the remainder of those accounts? No. No. No. How would you... You got your house paid for. We're never going back, dude.

It's got to feel great. No. Yes, sir. No, no, no. We might sell the truck, but we're not going to borrow on the house. So what do you owe on the truck? That's what my wife told me, to sell the truck. On the truck, I owe...

I'm under on the truck. What do you owe on the truck? $38,000, $35,000. Okay, and what's the truck worth? The truck is probably worth, at the local place here, maybe $20,000. Okay, so you're somewhere around maybe $5,000 or $10,000 upside down, give or take. More like $10,000, yes, sir. Okay.

All right. And what's your household income? My wife, between her and I, we make around $115,000. Okay. All right. You've got a pretty expensive truck. And how much do you owe on the credit cards? Her credit card is around $15,000, and mine is around $16,000.

Okay. So we have $31,000 because we are married. $31,000 in credit card debt and $38,000 in credit card is around $15,000 and mine is around $16,000. Okay. So we have $31,000 because we are married. $31,000 in credit card debt and $38,000 on credit. So it takes $80,000 for you all to be debt-free. No, $70,000 for you all to be debt-free. Yes, sir. Okay. And you make $115,000.

So you could do that in probably two years. Okay. And you make $115,000. So you could do that in probably two years. Okay. So you think it's just good to pay off? $3,000 a month. I would either sell the truck or I would commit to a $3,000 a month debt reduction plan for two years. Okay. Okay. And that means you're going to be on beans and rice, rice and beans.

You're going to have no life, no vacation, no eating out, no nothing. All we're doing is getting a stupid truck paid off, and then we keep it, okay? If you want to keep it, that's how you do it. If you want to make this go a whole lot faster, you can do it all in about one year if you sold the truck and moved down and truck. But don't sell the truck to a dealer, man. I mean, put it on private sale. Go to Kelley Blue Book, kbb.com.

Look at private sale, what the truck is worth if you put it on Craigslist. And, you know, if the dealer tells you it's worth $25, that's what it's worth to a dealer because they've got to resell it and make a profit. That means you probably can actually sell it for $30, which would leave you more like $8 or $35 or $38. You didn't know what your balance was. So find out what your balance is, find out what the truck's worth, and then the two of

you sit down together and go, okay, we're either going to take two years to clean up this mess or we're going to take one year and sell the truck, and then we'll clean up the mess. About $3,000 a month, though, we're going to commit to debt reduction, give or take, and we're going to knock this out really, really fast. Either way is okay with me, but no, I would not borrow on your house. I would sell the truck a long time before I borrowed on your house to get out of debt. Oh, and by the way, when you sit down tonight to do all this stuff, cut up all those credit cards. At Rudy's house tonight, there's going to be a ceremony. Plastic surgery ceremony.

Light candles. Get a big old pair of scissors and chop those bad boys up. Because they've been such a blessing. I mean, they've changed your life in negative ways. So why keep them around? I mean, it's like keeping termites in the house. Why do we want them? We don't want them.

Keeping roaches in the house. We don't want them. No, no. And that's because that's what these things are. They will eat you alive. They have because you got sloppy. Thirty one thousand dollars worth of sloppy with those stupid things. or they will eat you alive. They have. Because you've got sloppy. $31,000 worth of sloppy with those stupid things.

Chop up the credit cards. Make the decision to keep the truck or sell the truck. I don't care. But you're on a tight budget. Jump on every dollar. Get your budget done. Tighten it down. You can do this, Rudy.

You can do it. If you need more help as you're going through it, you call me back. Appreciate you listening. Tiara is with us in Baltimore, Maryland. Hi, Tiara. how are you hi dave i'm good how are you better than i deserve what's up so i'm calling because i first want to thank you because i just took a new job and had an income increase great and with this thank you um and with this new job, they offer tuition assistance. So I was looking at possibly cash flowing my school or going with the program. The only thing I'm worried about is that they offer $10,000 per year. However, any amount after $5,200, when I spoke to HR, they said that anything after the $5,200 will be added to my income, and I'll be taxed on that.

So my question for you is if that's even worth pursuing, or should I just still work my extra job and cash flow it myself? Okay, so let me just get this straight, okay? You can get a $4,800 bonus for purposes of going to college, but you will be taxed on your bonus right of course you take a four thousand eight hundred dollar bonus don't you okay that's the extra above 5200 in other words up to 10 000 you're seeing what i'm doing there so that's yeah always take a four thousand dollar bonus i know there's taxes but oh well you know right yeah absolutely this is great

but like you said you got a cash flow the first one because it's a reimbursement program. They pay you back after, right? Yes. So you've got to cover the first one and then prime the pump. And then after that, they give you the money and you've got the money for the next quarter. And then they give you the money and they've got the money for the next quarter and so on. Exactly. Okay, cool.

Exactly. What are you going to study? Yeah. I'm actually looking at studying program management. Oh, good. How old are you? 28. Oh, really good.

You're going to do so great. Thank you. This is so cool. Have you already got a degree? I do. I have my bachelor's in biotechnology. I just got that in May. I'm not eligible for this program until January,

so I've been driving Lyft, I'm looking for an extra part-time job just to get some more money saved. You're like one of the smart kids, man. I tell you, you're cool. I like you. You're going to be so rich. I'm so proud of you. Well done. You're changing your family tree, kiddo.

Get after it. If you need some more help, you call me anytime. I'll be happy to help. Way to go. Pr proud of you. Well done. You're changing your family tree, kiddo. Get after it. If you need some more help, you call me anytime. I'll be happy to help. Way to go. Proud of you. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniels, our associate producer, and a phone screener. I am Dave Ramsey, your host.

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 Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.