The Ramsey Show - App - The Best Option for Your Debt Problem (Hour 3)

Episode Date: September 4, 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. Thanks for jumping in. This is your show. The phone number is 888-825-5225. Dara starts off this hour, Atlanta, Georgia. Hi, Dara. How are you? Hi, Dave.

I'm good. Good. How can I help? Hi. I just had a question. I just graduated from college in May. I'm currently living at home, and I started working in July. And so my only responsibility right now is really packing my student loans,

and I'm just trying to figure out the best way to go about that. Okay. And so what did you graduate in? What's your degree? I have my BSN. I got a bachelor's nursing degree. Okay, cool. Are you nursing?

Yes. Great. What are you making? I'm currently making $26 an hour. Okay. How many hours are you getting? Full time. So I work 36 hours a week.

Okay. All right. And how much student loan debt do you have? I have about $6,000 on my salary and may loan, and I have $41,000 of set loans. Okay. All right. Good. Well, here's the great news.

You picked a great degree field, and you've obviously landed, you know, you passed your bars. You've obviously landed straight into a job. Very well done. You just get to work more you need to pick up another job as a nurse to er and some other stuff you're only working 36 and so let's pick up another 30 and uh let's knock this debt out as fast as we can as you know because you want to be done with this don't you yeah i kind of want to get it over with yeah Yeah, because I'm a rip the Band-Aid off guy. If you're a nurse, you understand that one, right?

Yeah. Yeah, I don't want to. I just snap it off there. Just, oh, God! You know, that's what you want to do here. And get this over with, right? Let's get her done as fast as you can so you can get on with the rest of your life

because this is the only thing holding you back. So you need, uh so you can get on with the rest of your life because this is this is the only thing holding you back so you need what do you need you need 56 000 or 46 000 47 000 right yeah about 46 i already started paying on my sally mail on but all we need is 47 000 i mean you can do you can probably do this in a year yeah if you're living at home working all the time because you can you can make more than 26 working uh weekend i mean picking up you're only working 312s right and uh i mean some people call that a full-time job but i mean it's the good news is you only work in three days that gives you four whole other days to do something else right yeah and just pick up some er time or somebody and they'll probably pay you more than $26.

It's gross work, but it'll make you some serious bucks, and you can get done. So this is my question. What is your opinion about loan forgiveness programs or loan repayment programs? Because I am a public service person. I have the opportunity to do those. It's 10 years. Yeah, it is. Why would you wait 10 years to start your life? Let's do it this year.

One year. I just gave you a one-year plan. Okay. You got no life for the year, but you're done. It's a rip the Band-Aid off game. See, because here's the thing. You can always work 312s, plus or minus other hours, if you want to, the rest of your life, because you chose a fabulous career field.

You can always make good money. I've been doing this for 30 years. I've never known when a nurse couldn't get a job. Every time I talk to a nurse, I can always solve their problem, because they can always get two jobs. Nursing, two jobs. The second job is an awesome job. It might be better than the first job in terms of pay, but it might not be the one you want to do for the rest of your life.

But you do whatever, and you get it done. Because you ain't got any overhead if you're living at home. And do that for one year. One year from today, though, whether you're out of debt or not, you've got to move out. You can't stay at mommy's more than one year. Nope, that's my goal is to move out in a year or so you got it now i think you could be debt free by then but you're gonna but you i mean we're talking about you making like 70 or 80 grand in a year yeah well i mean the thing is that after a few months, I have the opportunity for a pay increase. I know.

I just gave you another one. It's called another 30 hours. Yeah. Yeah, potentially. I mean, well, I don't know. Potentially. Let's see here. Let me just add this up here.

Just a second. I want to put this in the calculator because I'm not sure. Maybe I'm wrong. 936, and that's 4 times 12 times, oops. Well, we'll do it 6 times. You see, you're already making $46,000. Yeah. So why can't you just, I mean, because I'm telling you, if you go do ER, it's going to be like $36 an hour, not $26.

And if you work $30 down there, I didn't make that number up. I thought I hit it right. I just wanted to put it in the calculator because you were questioning it. But I guess I shouldn't. I'm the math guy. You're the medical girl. So anyway, yeah, you really can, like, double your income. So you're just going to get another job, tackle it in a year.

That's what I've been saying for the last five minutes, yeah. All right. You can do this. You can do this. Hold on. I'm going to send you a copy of the book, The Total Money Makeover, to show you exactly what to do and exactly how to do it, because that's living the dream, kiddo, because here's the thing.

You go back to making $50,000 if you want. You go back to making $60,000 if's the thing you go back to making 50 if you want you go back to making 60 if you want you go back to making 90 if you want you got another goal i want to buy a house i'll pay cash for it i'm gonna buy a car i'm gonna pay cash for it i'm gonna move out and furnish my apartment i'm gonna pay cash for it the good news is at the drop of a hat with your degree field you can go get a job what made you want to be a nurse i mean honestly I just like taking care of people, but the flexibility of it wasn't bad either. But my main reason was I wanted to help people out. But it is a very flexible field.

It is a very flexible field. It's a very lucrative field, and you get to help people. I think it's a wonderful career choice. I was just curious what led you to it. But very, very, very well done. Hats off to you kiddo you got a great start get them get them you can do this don't sit around waiting on the government to fix your life 10 years later good lord no if the government says i'm here to help you that means

run okay this is the dave ramsey show this is how it's done, y'all. It's just a different mindset, isn't it? It's just a, what if the only option for you to fix your life was you fix your life? Guess what? The only option for you to fix your life is you're going to fix your life. The bad news is you're the cause of the problems. The good news is you're the solution. You can just change right now. You ready? Set, change. Ta-da, just like that. Ta-da. You just did it.

All you do is just decide. No one's telling you what to do. No one's telling you what to think. You don't live in Russia. Just decide. Trump's not going to call you. Obama's not going to call you. Your congressman's not going to call you. They won't even return your call. You are your solution. You're your problem. Guess what? I'm my solution, and I'm my problem. These days, I'm more of a solution than a problem. If you ask Sharon, I used to be more of a problem, and she's right. Still got my issues,

but we air them out right here in front of 15 million people every day, and we're and I used to be more of a problem. And she's right. Still got my issues. But we air them out right here in front of 15 million people every day, and we're glad you listen. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry.

A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org.

Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thank you for joining us, America. This is the Dave Ramsey Show. We're glad you're here. Open phones at 888-825-5225. Andy is on Twitter. Dave, is an individual allowed to have multiple Roth IRAs? Absolutely. You cannot put more than $5,500 into an IRA, an individual retirement arrangement, in a year.

But hypothetically, you could have $5,500 one-dollar IRAs. I'm not sure you could find anybody to open those, but the law doesn't stipulate how many of them. It's just the total amount. In other words, you could put like $3,001, $2,500 in another if you wanted to. Or you can open one IRA with an investment broker and put it in various investments, like we suggest, spreading it across four types of mutual funds, growth, growth and income, aggressive growth, and international.

And you can do that oftentimes in one IRA, but multiple investments inside the IRA. And the Roth, of course, means it's growing completely tax-free. Now, sometimes people say the IRA stands for an Individual Retirement Account. It does not. In the actual law, in the IRS code, it says Individual Retirement Arrangement, which helps you distinguish what this really means. An IRA is not an investment. It is the way your investment is treated for taxes.

So if you take your investment and say that's the cookie jar, the IRA is the coat you put around the cookie jar to keep it warm. If you set the cookie jar out in the cold, it gets taxed. In other words, if you buy a mutual fund and it doesn't have a coat around it, it doesn't have an IRA around it, it gets taxed. But if you wrap it up in a code called an individual retirement arrangement, an IRA, a Roth, it grows tax-free. If it's a traditional, it grows tax-deferred, and you take the tax deduction for the amount you put in. But that's all it is. So, you know, you can have an IRA at a bank with a lousy cookie jar,

meaning like a 1% rate of return or a savings account rate of return. You can have an IRA in good growth stock mutual funds like we talk about. But you can put lots of different things inside the coat, lots of different kinds of investments inside the coat. So an IRA does not mean a certain kind of investment. I've got a bad IRA. I've got a good one. No.

You have a good or a bad investment inside of your individual retirement arrangement. So your IRA is simply the way it's being treated. Same thing with your 401k. 401k. Where did that come from? It's section 401 of the IRS code, subsection K. And when you look it up, it's got the, you know, section 401, and it's A, B, C, D, E, F, G, all the way down to K, and K is the one that allows employers to hold money out with your permission of your check,

hold money out of your check with your permission, and put it into an investment that you choose. And then there's lots and lots of rules that employers have to perform in order to do that properly under the ERISA rules. But that's where it comes from. That's where all these weird numbers come from. The same thing with 403B. If you work for a hospital or a nonprofit, a 403B is section 403 of the IRS code, subsection B. And it addresses non-profits and hospitals and a couple of other things, government.

If you're a government employee, you have a 403B. But it works like an IRA or works like a 401K. They all work. It's just the way your investment is treated. So inside your 403B, you could buy really crappy insurance-type investments, and some of you teachers have, as an example. Some of you nurses and doctors have been sold some crappy stuff inside these 403Bs. But you don't have a bad 403B.

You have bad investment inside your 403B. So if your mutual funds are underperforming, whether or not they're in a retirement arrangement of some kind, that's when you look at the actual investment and you make the adjustments. So yeah, you can have multiple accounts as long as they don't total more than the annual limit. The annual limit's $5,500, $5,500. If you're married, you can do another $5,500 whether or not your spouse has an earned income. You have to have an earned income, meaning you cannot live off of disability income or investment income.

So you have to have self-employed income or wages of some kind that is, quote, an earned income in order to do an IRA. So if someone's living on disability, they cannot do an IRA. If they have 100% disability, then you can't do one. Now, you can do other investments, and you should look at that. That would be the plan, right? But you can't do an IRA because you don't have an earned income, quote, unquote. That's according to the way the IRS laws or the IRS regulations, rather, read.

Erica's with us in Houston. Hi, Erica. How are you? I'm a little stressed. How are you? I'm better than that. How can I help? I've gotten myself in kind of a bad situation.

I have a car loan of about $12,000. Sorry, I'm trying not to cry. That's okay. $12,000 car loan. What else? I've got about $8,000 in credit cards. Mm-hmm. And I am currently unemployed.

Mm-hmm. I'm looking very aggressively for a job. I actually applied for some of your jobs this morning when I saw it on your website. Okay. for a job. I actually applied for some of your jobs this morning when I saw it on your website. But my parents really are pushing me to go back to school and finish my degree and take out student loans to do that. And I just really, it doesn't make sense to me to take out more debt. I agree. But it doesn't make sense to me to get a degree. Are these your only two debts? Yes. Okay.

And what were you making? About $36,000. And when did you lose that job? In July. Okay. All right. And you're how old? 27.

Okay. And you're single? Yes, I am. And your parents live where? Nearby me. Okay. And you're single? Yes, I am. And your parents live where? Nearby me. Okay. And are you living with them or are you trying to pay the apartment rent or whatever? No job.

I am currently crashing on a friend's couch because I don't know what else to do. Right. Where were you living? I had a house leased with my boyfriend, but we broke up, and the lease ended, and I didn't have a job. So you don't have that responsibility or that problem, okay. Right. All right. A lot of volatility in your life right now, kiddo.

I can see why you're scared. I understand. What were you studying when you were in college? It's called integrative studies where you pick three fields. Mine were psychology, counseling, and business. Okay. And how far are you from finishing your degree? It would take me about a year.

Oh, good. Okay. That's good news. And what will it cost? I don't know. I'm sorry. That's okay. That's okay.

I think it's worth looking into to figure out what it would cost because you're that close to the finish line. I can see the tape. All you've got to do is run through the line, right? I can see that. I can see that in the race. You're almost there. You're only a year away. My goodness.

Right now, it seems like a pile of money away and a problem away and all these other things. You're homeless and got car payments and credit cards and everything else. So I agree with you. I think you've got good gut instincts. I would not tell you to go into student loan debt. What I would tell you to do is start anything you can start today. You have a car. Let's deliver pizzas.

Let's go find somebody and babysit for them. Let's start to get any kind of money we can get coming in quickly just to kind of get some of the panic away from you. Don't worry about your credit cards. I don't want them to get behind, but if anything gets behind, it's those. You eat first. You pay your car payment and keep gas in at second, and you work at anything you can get work at immediately.

Waiting tables, you can walk in. Houston's got a labor shortage right now. It's not hard to find work there. Now, you may not find what you're looking for, but I don't care if you're shoveling sawdust on a construction site. You need to be working by Friday because it will make you some money and you won't have time to be scared. Okay. Then let's get you back into a little apartment and then let's get your career moving again.

And then go finish school with cash after you get to making a little bit better money. But your first goal is just get some kind of something coming in as quickly as possible to fend the fear off. And so, yeah, go right now to three pizza places. And by the end of the day, you'll be delivering pizzas. You can make $1,500 a month delivering pizzas at night. Then during the day, start driving Uber. You've just got two jobs just like that. Now, then you go from there and we'll rebuild again. One question I get asked all the

time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans, since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide Every step of the way Visit Zander.com or call

800-356-4282 You need to get this taken care of I can give you the advice And I can tell you where to go But it's really up to you to take that important step To get your family protected That's Zander.com Or 800-356-4282. Thank you for joining us, America.

This is the Dave Ramsey Show. You guys hear me talk all the time about the seven baby steps, our proven plan to handle money the right way and it works the total money makeover shows you how to do the baby steps it's the baby steps on steroids we are celebrating the 15th anniversary of the total money makeover by offering you an exclusive deal in the online store at davramsey., you can get the Total Money Makeover plus a free live stream, one of our smart money events, for just $11.99. The number one best-selling book of all time for me.

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Just $11.99. It's a deal. Jason's with us in Phoenix.enix hey jason welcome to the dave ramsey show thanks for having me dave how are you today better than i deserve what's up hey we recently finished coordinating our first fpu class thank you a absolutely uh and a question about irregular budgeting came up and i'm very familiar with the concepts of irregular budgeting but we have two friends that have recently changed jobs and have newly irregular incomes, so they don't have a basis to go off of. What is the best way to get them started on an irregular budget when there's no history to go off the minimum monthly that you could expect?

You could start with zero base, meaning you just prioritize everything on the budget. You just list everything that you would want to do, and then you relist it from most important to least important. Okay. Food would be first. Lights and water would be second. Transportation would be third.

Housing would be third. Transportation would be fourth. So we've got the first four listed. Okay. And you can go right down that list. And then every month as they stabilize and as they get a more predictable environment, you know, it gets easier and easier. In other words, the list doesn't have to be as long because you start to have a baseline. Right.

But, you know, we're always going to make X number a month, okay, whatever that is. Once you kind of get there, that's your baseline, and then you do your irregular income above that. But that's what Sharon and I used to do when we actually, quote, unquote, invented the form. All it was, just to tell you, Jason, just to give you the history, it was a to-do list. You know, when you take a time management lesson, they say list the most important things to the least important things that you want to do that day and follow that list. And if you get interrupted, then go back to that list and just do the most important stuff first and the least important stuff last. And then you go home and you feel like you did the right things because you did the right things. And that's all we're doing here. We're just doing it with money instead of time.

We're just listing by priority. That's where I got it. And we were in the real estate business, and we made zero one month, and I made $22,000 the next month. And so, you know, it was like completely there was no baseline. So I had to do what you're talking about. Matter of fact, I had to do some catch-up from the month before in the second month, right? Right. House payment had to be caught up because I didn't get paid that month when I made zero.

And so that kind of junk but it was all just on a yellow pad just listing most important thing i have to do to least important thing i have to do with money um with no baseline and yeah you can do that and then you can move them gradually most people get a they do get a baseline because they catch the rhythm of their income and you go you know we're never going to have a month worse than x and in the summer we're never going to have a month worse than y or whatever in the winter or christmas or well you know you're what is it we're doing december december is always going to have at least a certain amount you know and then you baseline off of that and then do your irregular prioritized spending plan above that ed Edgar is in Rochester, New York.

Hi, Edgar. How are you? I'm doing okay. How are you, Dave? Better than I deserve. What's up? Well, I got this car lease I got into two years ago. It was over my budget, but it was an impulse thing.

I just wanted a car. But now I make about $29,000 a year. I work as a patient care technician in a hospital. And if I do overtime, I make up to $40,000. Good. So I got 20 more payments left, but I want to get out of this car lease. And I want to be able to save more money every month. And I'm having a hard time seeing some extra dollars.

I hear you. So how much a month is the car lease? It's $359 a month. Okay. All right. And have you asked them for the early buyout amount on the lease, what you owe today to pay it off and get the title? It was about $16,494.

When did you get that figure? It was about two months ago. Okay. And that's what it takes to buy the title two months ago? Yes. Okay. That's not the remaining number of payments. Yeah, that was the number that they gave me when I called them about the buyout.

Okay. All right. Have you looked up what the car is worth? It's worth between $13,000 and $15,000 on Kelly Blue Book. Okay. So let's pretend that you sold it for $15,000 and the early buyout is $16,000. That leaves you $1,000 in the hole, right? Correct.

So you'd have to have the $1,000 to be able to pay the difference. Because if I bring you a check and I'm the buyer for $15,000, you've got to be able to get me the title. And in order to do that, you've got to put another $1,000 with my $15,000 check to get up to $16,000 to pay it off. You following me? Yes. Okay. So we've got to put another $1,000 with my $15 check to get up to $16 to pay it off. You following me? Yes. Okay, so we've got to determine. The difference between what you sell it for and what the early buyout is, you have to have that amount. Do you have any money saved?

I have $4,100 in the bank. You're in business. We can do this. Okay. So let's do a fresh call on what the payoff is, the early buyout, and let's do a fresh look on what the payoff is, the early buyout, and let's do a fresh look on Kelley Blue Book on what the car is worth, and let's put the car up for sale and be prepared to write a check for the difference and get it sold. If you keep it 20 more months, that's $7,000 out of pocket.

I'd rather you be $1,000 or $2,000 out of pocket than $7,000, so let's dump this thing. Okay. Is this making sense? Yes, sir. Okay, and then you're going to have a couple thousand bucks left over of your savings, because you're probably only going to be one or two, maybe three out of pocket. Whatever you've got left in savings is what you pay cash for a new car. It's not new, though, by the way. Right. It's a $2,000 car.

But guess what? Edgar has no car payments anymore in our talk here. And then when Edgar's got no car payments, you're used to spending $350 a month in 10 months. That's $3,500. So you can move up in car pretty quick. Just pay yourself a car payment, right? Yeah. And this gets you back up out of a i don't want

you driving a thousand dollar two thousand dollar car very long but we'll do that for a little while if it gets you out of this bear trap you stuck your foot in yeah so so did you how old are you i'm 29 years old okay what kind of car was this it's a 2016 g patriot oh nice car yeah okay so yeah everybody's gotta do not everybody but most of us have to do at least one really stupid car deal in our life the good news is you got yours out of the way yeah yeah i'm never doing this again yeah next time you go on a car dealer lot, it's to deliver something. You're not going over there and get fleeced again, are you? Nope.

Yeah, you learned your lesson. You're a good man. Thanks for calling. I'm proud of you. Keep it up, brother. It's like federal law in your 20s. I mean, it's like somewhere there's a law passed that says somewhere in your 20s, you have to completely lose your mind, particularly guys. Women do it, but they blame it on the children.

I have to have a safe car for my children. It needs an airbag that's not your mother. You know, I mean, it's like, golly. Guys want a car just because we want a car. We want something with a muffler, you know. That's why I still don't understand why guys buy Tesla. I would need like an app or something that made a noise. Like,

it needs to make a noise. How can it be a car if it doesn't make a noise? Man, all my cars got loud mufflers. I'm a redneck. This is the Dave Ramsey Show. Thank you. Our scripture of the day, Psalm 118.8 It is better to take refuge in the Lord than to trust in man. Stephen King said, Talent is cheaper than table salt.

What separates the talented individual from the successful one is a lot of hard work. That's true. You know, I used to think that people, you would hear somebody had this great idea. Man, I had this great idea, and they stole my idea. It's like, no, probably not. They probably didn't. I have people come up to us all the time like, hey, we have this great idea and we need you to sign like a non-disclosure form

before we can tell you what the great idea is. And I'm like, no, I don't even want to know what your great idea is. Because ideas are everywhere. People that can make ideas come to life and take them to market, now that is rare. Ideas aren't rare. Ideas are everywhere. I mean, for God's sake, some guy figured out how to cut grass with fishing line.

I mean, really. Ideas are everywhere. Someone that can take them to market. Someone that can work and hustle and grind and work and hustle and grind and not be denied. Now, those are rare. You give me one of those, I'll sign something. I'll get that guy, that girl on board. Somebody knows how to leave the cave, kill something, and drag it home.

Now, that is valuable right there. But, I mean, ideas, I mean, keep in mind, grass is cut with fishing line. The ideas are everywhere. They're just everywhere. Wow. Think about it. I mean, geez. Demetrius is next in Raleigh, North Carolina.

Hi, Demetrius. How are you? I'm doing well. Well, right now I'm not doing well, Dave. You were trying to be optimistic but not lie. What's going on, man? What's going on? So, look, in 2015, I bought my wife an SUV. Three months in, it needed a $1,500 repair.

Lord. And that continued on up until this point. So, you've had a lot of repairs on this lemon yeah and so was it new get rid of it i was trying to stay optimistic and now the car is dead it needs a new engine which would be the second new engine by the way good gracious what kind of car is this it's a it's a volvo xc90 08 so did you just get a bad one, or is that just a bad brand of car or something? Not brand, I mean, Volvo's a good car, but I mean, a bad model or something. Well, we initially thought it was a good car, too, because that's all we've heard until we got one.

Okay. And so now, she's taking her hands off it. She's like, you know, this is your problem. You need to figure out how to fix it. Oh, this is going way downhill right here. Yeah. And I'm stumped, man. I'm okay.

So what do you owe on this piece of crap? Almost seven grand, like 6,800 still. Okay. And how many miles it got on it uh like a hundred and kind of because with the new with the new engine i mean how many miles i might ask about the engine i asked about the car how many miles does the car got on it let's say a hundred and hundred and fifty thousand but you put a brand new engine in it how long ago? No, it wasn't brand new.

It was used. Oh, you bought a junkyard engine. Yes. Okay, and what did that cost you? About $1,300. Okay, so you get to do it again, right? Yeah. And then you sell it, right?

Well, do I do it again? Well, what you do is you do. What's the car worth today if it was running, if the engine was running? The last value I got on it was from my bank, and it was about five grand. Okay. Jump on Kelley Blue Book and look at kbb.com for private sale and pretend like the engine was fine, but with the bazillion miles you have on it and put in all the information.

And let's say it comes back $5,000. That's what the car is worth, okay? Running. Right. Running. If the engine can be put in for $1,300 more, then take $5,000 in your mind minus $1,300 and say that's the least I could sell the car for salvage and come out.

Otherwise, I've got to fix it and sell it fixed. And so I'm thinking salvage without the engine fixed, that this car is probably a $2,000 car. With the engine in it, it's probably a $5,000 car, so it's probably worth the $1,300 to get it up to $5,000. You see what I'm saying? Yeah. Because if you could get two for it you're going to lose three thousand dollars if you get five thousand for it after you put a thirteen hundred dollar engine in it now you've only lost a few thousand okay and that gets rid of it uh it's

all it's difficult to sell salvage car for much i mean with bad engine in it what's wrong with the engine completely blow drop a rod and everything? Well, according to, and it blew when my children were in it on a trip, on a five-hour trip. So me and my wife had to go and pick it up on the side of the road. So when we took it to the shop, they said it's low compression in three cylinders, which basically they said. It's blown. Yeah, they figured that the contributing factor was the person that had the engine uh did not do the oil maintenance they didn't keep up on the oil maintenance yeah maybe so now uh now the engine itself is about

for the engine and labor yeah you got low compression i haven't worked i hadn turned the wrench in years, but low compression on three cylinders tells me it's blown. I disagree. I mean, I agree with everything. I'm not a mechanic, but I think they probably called that one right. So, yeah, you're buying a $1,300 engine, and you're going to put it in this stupid car, and then you're going to wave bye-bye as it drives off down the street with its new owner, and you're still not going to get much for it because it's still a worn-out car. It's got almost 200,000 miles on it, and it's on its second engine, third engine.

Yeah, third engine. So what do I do with the negative equity that I now have in the vehicle? Because I'm not going to get that. I mean, I'm not going to get that. You have to have the money to cover that. Do you have any cash? No. Okay. Do you have any cash? No. Okay.

Do you have any credit where you go borrow that? Well, I have. Right now, I was thinking of purchasing another vehicle, and I got approved for a $12,000 loan which I can purchase another vehicle for. You don't need another $12,000 loan. You need a lot less than that. We need a $2,000 loan to cover the negative equity, and we need a $2,000 loan to buy a car until you get yourself out of debt,

a get-out-of-debt car. Not one you keep very long, but we need to get you out of debt. I don't want you to go $12,000 in debt for a $1,300 problem. That's overreacting. Well, yeah, I'm kind of known for that. Well, I mean, when Mama does her hands like that and goes, it's on you, and she starts doing those hands like that, we all tend to do that. So I got you.

Yeah. But she's going to have to be a grown-up, too, and she has, she can't, because what we want to do is we just want to get pissed off and go buy something, and then we look back later and go, that's when I made the dumbest decision of my life, when I got pissed off and bought something. And you get frustrated with the whole stupid thing, and you just want to shoot the car with a gun, call the cops, and tell them somebody did that. You know what I mean?

It's just blow it up or something, right? But you get there. I understand. But you can't do that. We've got to handle it grown-up style. Fix it. Sell it. Cover the negative equity. Get it, we got to handle it grown-up style. Fix it, sell it, cover the negative equity, get you a cheap car, get the cheap car paid off, save up, move up in car with cash.

Okay. Three-step program. You got it, man. You can do it. It's just a pain in the butt. I understand. I get it. But one of my things was I decided I was going to drive junk long enough that I saved so dadgum much money that I never had to drive junk again.

So I don't drive junk now because I'm not broke anymore. When I was broke, I drove crappiest old cars because I didn't want to ever drive a crappy car again. See, when you're broke, you drive a car that you have to give a name like Bessie or Henry or old blue. That's what you do when you're broke. So you never have to again. And those aren't the good old days. Those old days suck. Those aren't Henry or old blue. That's what you do when you're broke. So you never have to again. And those aren't the good old days.

Those old days suck. Those aren't the good old days. You'll look back on those and go, thank God we don't live like that anymore. You know, those aren't the good old days. The good old days include outdoor plumbing. Okay. We don't want the good old days. The good old days.

We didn't have penicillin. We don't want the good old days. The good old days, we didn't have penicillin. We don't want the good old days. I don't want them. I don't want to drive crap ever again. I don't want to live in a house where things break all the time again. I want to have new enough stuff that it's not breaking all the time. And the way I get there is I live like no one else so that later I can live and give like no one else. You pay a price to win.

The Bible says no discipline seems pleasant at the time, but it yields a harvest of righteousness. It's no fun to get there, but it's worth it because you get there. That puts us out of the Dave Ramsey Show in the books. Thanks to James Childs, our producer, Kelly Daniel, our associate producer, and Cone Springer. I am Dave Ramsey.

We'll be back before you know it. In the meantime, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.