The Ramsey Show - App - The Brutal Truth About Debt Freedom (Hour 1)

Episode Date: September 11, 2018

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Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music 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 and your money. It is a free call at 888-825-5225. That's 888-825-5225. Sarah is with us in Albany, New York. Hi, Sarah. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much for taking my call. Sure.

What's up? So my husband and I are recently debt-free, and we are in baby step number three. And this led me to sort of ask my mom about how her finances are because she's 60 years old, and I know someday we might have to help her. So I found out that she only has $200,000 in savings, and she brought up that she wants to give us $50,000 of that money for her to put it towards a house that she can live in with us, or she expects us to pay for 50% of her rent for an apartment she lives in. And I was sort of taken aback by that, and I told her no, and I just wanted to make sure that that was the right response to her request. I'm confused.

She just stands up and says, you're going to pay my bills? That's pretty much how it went. And I let her know that. What was her basis? I mean, she's obviously been thinking about this, and somehow she got it in her head that that was an okay thing to do. I mean, what if I called her up and said, I just want you to pay my bills? I mean, that's just so illogical. Yeah, so she's on disability and Social Security and all that kind of stuff,

and she thinks that she's not able to work, which I think she can, but she's sort of relying on the disability. And I think she thinks that because she can't get a job for the rest of her life and because my husband and I are now financially stable, that it's our responsibility to take care of her for the rest of her life. And where did she get this information? I don't know. That's strange.

What is the nature of her disability? She has fibromyalgia, and she also... And how long ago did her depression start? My parents got divorced about 15 years ago, and she hasn't really recovered from that. She struggles with depression. That makes sense. Yes, for sure all right well um you know uh so uh you know i think you you're dealing with someone who's got issues and so we're gonna be we're gonna be kind my my initial reaction is just sarcasm but uh like you've gotta be kidding me but no i mean it's like

but uh no i mean the uh i think you, Mom, that's not really in our plan. You've got $200,000, and you've got your disability. And if you need some help, I can coach you on your budget to where you can live within the disability. But you've not really done anything in 15 years to get better. Yeah. For 15 years, you've wallowed in this, and you haven't taken the active steps to defeat your depression. And it can be worked on. I mean, counseling and pharmaceuticals, I mean, it's not 100%,

but there's a process where any kind of mental deficiency like that can be worked on. And I've tried to get her to go to therapy. Yeah, exactly. And she's not doing anything. She's just wallowing in the mud hole. So, you know, so, Mom, we love you, but it's not our job to get you up out of the mud hole. It's your job.

And I'll be your biggest cheerleader. Yeah, I'll be your biggest cheerleader. I'll stand beside you. But this idea that you think I'm going to write you checks is somewhere you got confused on that, and that's not going to happen, Mom. It's not think I'm going to write you checks is somewhere you got confused on that, and that's not going to happen, Mom. It's not because I don't love you. It's because it's your responsibility to do this.

If she gets angry or hurt about that, will it come to the point where my husband and I have to not cut ties, but decide if we sort of want that influence in our life? Because I feel like it's going to come to the point where she's just maybe asking for money all the time and making me feel bad about it, and I don't know if I want something like that in my life. It would have to be pretty extreme to completely cut ties over it, but I can cut the conversations off. Got it. Okay. Mom loved to talk to you about the grandbabies, loved to talk to you about the sunshine outside, not going to have any more conversations about me giving you money.

If you need something else, you call me anytime, hon. I love you. And click. Okay. You know. All right. Got it. Got it.

But I don't know that you would have to set up because she's not abusing anyone around you. She's just bothering you. Yes. And you can just end that and just go hey anytime you want to talk about anything except that i'm here for you and i'm here to help you get if you want to get back on track you know we would even pay for you to go through financial peace university we might participate in some of your therapy bills uh we might you know things where you're working to get better fine where you uh are, the message is, you wouldn't say this,

but where you're just attempting to be a parasite, no, that's not an option. Right. Okay. All right. That sounds good. Yeah, you can draw your lines there. Have you read Boundaries yet by Dr. Henry Cloud? I almost picked it up at Barnes & Noble the other day, and I was like, no, I don't need this.

Yeah, you need this. And I was like, I think I need to go pick up that book. Yeah, you need this, because you need to learn to set gentle, kind, strong boundaries, because otherwise you're just going to get pissed off, and your boundary is going to be extreme. Yes, for sure. But it'll give you, because one of the things that book does is it lets you know you're not crazy, that you're dealing with people that have got issues. That's very helpful.

Yeah, because you start to think you're crazy. I i mean i'm not taking care of my own mother what kind of daughter am i you know her tapes start exactly what i'm doing yeah her tapes start playing in your head because this woman's a travel agent for guilt trips yes yeah yep so hey hold on i'll give you a copy of henry's book we'll send you a copy of boundaries out it's a wonderful book um and you just gotta have boundaries i mean there's there'soundaries out. It's a wonderful book. And you just got to have boundaries. I mean, it's a normal part of the process of the rhythm of life. And I think that's why his book has been so popular. It's been a perennial bestseller.

Seth is with us at Morgantown, West Virginia. Hi, Seth. How are you? I'm good, Dave. How are you? Better than I deserve. What's up? I just had kind of a quick question.

Me and my wife recently got married. We're both 25 years old. She's currently in her last year of medical school. So we were kind of looking to buy a house, and I was kind of looking at, I didn't know how to go about doing that. Currently, I have about $50,000 in retirement, and we have about $50,000 just kind of waiting in a savings account that we were wondering whether we should put that towards a house

or put it in a mutual fund or how to go about buying the house. Okay. Do you have any debt? No, we are debt-free. Awesome. No medical school debt? No medical school debt, no. How'd you do that?

God. We've just been really... Hello? I think God just hung up on you. Oh, my gosh. Hello, there you are. Okay, so how did you do that? Um, she got a scholarship for med school to be completely paid for.

From who? Um, from the college. Wow, that's awesome. Okay, so, well, I would get her out of med school, get her graduated, get her past her bar, let her get established in practice before you bought a house. You're premature to buy a house. So I'd leave the money sitting in a CD right now waiting, and I'd continue to add to it to become your down payment fund. But you're okay to rent for a year while she finishes up, gets her bars passed, and gets established in a practice, that's going to inform you a lot better on which house to purchase. We need to talk about something you've been hiding.

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In a matter of weeks, you'll start loving your smile. Smile Love's proven streamlined method is the most affordable option for straightening your teeth. We're talking about saving you thousands. Order today at SmileLove.com and use the promo code Dave to receive $100 off. SmileLove.C. Hi, Channing. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for having me. Sure. What's up?

So, I live in D.C. I just recently got married about three months ago. Congratulations. Thank you for having me. Sure. What's up? So I live in D.C. I just recently got married about three months ago. Congratulations. Thank you. And my husband and I have really decided we need to be really focused on the same page about our finances. We actually have our first class of financial peace this evening. Oh, cool. But together, we have probably just under a million dollars in debt,

and we want to know how to get debt-free without filing bankruptcy. Okay. How much of that is a mortgage? The mortgage, about $210,000. So you have $600,000 in what? $335,000 is about in student loans. We both have advanced degrees. And then a lot, the rest is really credit cards and personal loans.

So you have $300,000 of credit cards and personal loans? We have about, so $ 335,000 student loans and about 136,000 in credit cards, 44,000 personal loans, and 35,000 car loans. Okay. How old are you? I'm 29. Okay. So what in the world? So, yeah. I mean, are you both on this, or is this just one of you that's completely lost your mind? Well, I have the majority of the student loans, and he has the majority of the credit cards. My credit card debt is about, it's not great. Okay, so why does he at 29 years old run up $100,000 in credit card debt? Well, he's 32, but I think it's one of those things where just making really poor financial decisions,

thinking be able to pay it down as you go, and it doesn't happen. Okay, so you both have advanced degrees. What are your degrees in? We do. So I have a degree in both of our advanced degrees. No, he has an MBA, and I have an advanced degree in policy. I work in the government, and we actually both do now at this point, actually. Okay.

So your household income is what? Our household income is about $230,000. Okay. All right. Is there recognition on both of your parts how absurd this situation is? Yes. Okay. Yes, there is.

So I think we're both a bit scared and want to do anything we can to avoid. Okay, great. Then I'm on your team. I can skip that step. Okay, good. Okay. Well, you're scared and you should be, you're scared, and you should be. You're disgusted, and you should be.

We are. You're in the early stages of being sick and tired and being sick and tired, and you should be. So here's the thing. You guys have been living at, across the board, from your education choices to your car purchases to your whatever, you've been living at about 10x where you're going to get to live for the next three years. Okay. Yep, that's true. So I'm getting ready to destroy your life as you know it,

because your lifestyle is considerably above your extremely good income and has been for a period of time. And so you've gotten used to spending like you're in Congress. Right. This is going to be very emotional for you all. And you're going to have to look at it through that lens and through a spiritual lens or you're not going to make it. You're going to have to not care what anyone thinks, including each other, because you're not going to spend any money on anything ever for the next three years. Let's pretend you're making $210,000, and I know you just got married,

but let's pretend you've been doing this as a couple as you went along. You've been making $210,000, spending $310,000. I'm getting ready to put you on $30,000. Okay. You're not going to see the inside of a restaurant unless it's your extra job where you're waiting on some of the people you work with during the day. Okay. This is how humbling this is going to be.

Quite. It's going to crush a lot of crap in your soul that caused you to do this. So the bad news is it's going to crush a lot of crap in your soul that caused you to do this so the bad news is it's going to be really rough the good news is it's going to be great for you guys relationally spiritually and financially but you're not going to make the financial unless you make the relational and the spiritual move because that i know that i know you guys because i was you guys this is exactly what i did This is exactly what I did. It's exactly what I did in my 20s. I bought and purchased a lifestyle that was 5 to 10x what I had. Yeah.

And it was all because of crap inside of me that caused me to do that. Right. And all of that has to be destroyed to fix it. Absolutely. Is this making any sense or is this too brutal? No, it's making a lot of sense and it's brutal. I'm warning you what's coming, okay? This is not a math problem.

The math problem is the symptom. The problem is what's going on inside of you guys. So the great news is you're very smart people and if you will apply that intellect to solving this problem as if it were a policy problem or a business problem you can solve the problem but the lens by which the problem will be solved is through spiritual contentment godliness with contentment is great gain translation you're going to pull up at a stoplight driving a piece of crap car next to people that have an income a fourth of yours over the nicer car than yours. Right, right.

And you're not going to care. That's going to be the cool part. Okay. You're going to reach the point you don't care what other people think. And that might be a fur journey for you or him. I don't know which one it is. But some of you guys have been purchasing a lot of stuff for a lot of reasons that are going to change. Yep, they have to.

Yeah, they have to because you're on a suicide mission right now. Credit cards are actually bundled with one of those like debt relief programs where we put a pot of money with them and then they negotiate on your behalf so we're not even we're not even paying on the bulk 124 000 of the credit cards right now yeah you're gonna probably have to pull out of those out of that i don't know how quickly but the problem with those people is they don't follow through and they administratively are really really really pitiful they're incompetent and so you're going to find they don't. The concept of what they pitched you is not completely bad,

but you're going to find their follow-through will make your bones chill. So you're probably going to pull back out of those. And then we're just going to list these debts, smallest to largest. What's the home worth? What's the home life, you said? No, what is your home worth? Oh, my home worth. Oh, I think that, let's see, according to Zillow, the home is worth about $300,000. Okay, so you have a little bit of equity there, but not enough to save you.

So I always sell the home as the last resort unless it's the problem, and it's not the problem here. Okay. Ratio-wise, it's nothing compared to this other stuff i mean you have 330 000 student loan debt 200 000 on your house right it's not the problem you know and the credit cards are almost as much as a stinking house so it's not the problem so i don't i don't think we got to sell it you probably need it may need to sell a car um not gonna rush to do that. The big thing is just this shock to the system of your all's lifestyle, where you go from really living what we call in Tennessee high on the hog to you're going to be living beans and rice, rice and beans.

Your friends are going to think you've lost your mind, and your mother's going to think you need counseling. Yeah, and we actually live with my parents now. After we got married, they offered us to stay with them to help us with transitioning to new life, which has definitely been helpful renting out the condo. Who's living in your house? So I put my condo up for rent when I got engaged because I knew I wanted to save money for the wedding before we got married.

So I had a renter in there the last year, actually, looking for another renter. Her lease ends in a month. Oh, well, just sell it then. I thought you lived in it. No, we don't live in it. Oh, just sell it and put the $90,000 on your debt snowball. Yeah. Okay.

Yeah, you don't need it. If you're not going to move in it, you don't need to own it. No, we're never going to live in it. It was one of those. Yeah. Yeah, that was my first baby. That's okay. It's gone now. You need't need to own it. No, we're never going to live in it. That was my first baby. That's okay. You need the $90,000

to get a jump start on the rest of this. That just got rid of a third of your deal. Okay. We're getting started. Did you feel that ouchie? I just pinched you. Did you feel the pinch? Dave's grabbing and pinching me. Don't pinch me, Dave. I'm going to pinch the lifestyle out of you.

And it's going to change your life for the better. It's going to change who you are in this process. It's going to have to. It's the way you get out. You can do it, though. And I'll help you. You call me if you need more help. This is the Dave Ramsey Show. 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. Thanks for being with us, America. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window covering.

Site-wide savings are happening right now. Plus, you can take an additional 5% off at blinds.com slash Ramsey. Blinds.com slash Ramsey. Questions from Dave in Illinois. Chase Bank just came out with a feature on the app to open up a Roth IRA account. Right on the app. My question is, which direction would you go with, a broker or this app? I'm not sure what the differences are when opening a Roth with a bank or with a broker.

Well, apps generally don't have any advice for you, except stuff that would be set up on an automated basis like there's investing called robo investing now that is all automated and it's just there's not a person to talk to involved here um i work too hard for my money to turn it over to an app i work too hard for my money to turn any amount of anything over to Chase, for God's sakes. What a horrible idea. And I work too hard to allow a bank, which primary job is to get people in debt, to do my investing. I don't go to the transmission shop to buy mufflers. I don't go to the muffler shop to buy transmissions. I don't go to the bank for investing. Banks are where you have

savings accounts, checking accounts, and they loan you money and get you in debt. That's what they do. That's really all they do. They're not in the investing business. Well, they're in the investing business, but it's certainly not their specialization. It's a sidebar thing. I don't buy my insurance at banks.

I don't buy my investments at banks, and I don't buy my insurance at banks. I don't buy my investments at banks. I don't buy my shoes at banks. But they're apt to sell you almost anything because they just love making money. No. I do my investing with a good investment broker. It's an actual human being that I can sit down with who will talk to me and tell me what's going on. I know a lot about investing. I know a lot about mutual funds.

I've been licensed and all of that stuff. I used to sell it years ago. I've been studying it for 40 years. I'm very competent and confident in running my own investments but i don't i can you know i might we were driving down the road the other day and out in the country and my my wife said what's that and this guy the pickup in front of us had a trailer behind his pickup and he had the hydraulic uh item on the trailer that you use to pull an engine if you're going to take an engine out of a car it jacks the engine up out of the car you have to take the engine loose and take all the parts loose and

everything then you lift the engine out of the car if you're going to change the engine out or whatever i happen to know what that was because i've done that but i don't do that now i opened the hood on my corvette the other day and it looks more like a computer than an engine to me and so the chances of me doing that are zero, even though I probably could figure it out. I don't DIY my own cars anymore. And I don't DIY, do-it-yourself, my own investments anymore. I don't even DIY my own taxes. I don't DIY my own estate plan.

I have people that are known as professionals that know what the flip they're doing. They sit down, show me what we're doing. I understand it. And then we do it, meaning they have the heart of a teacher. And that's how you pick investments. You can do it. You can read two books to make you an expert and three articles on Motley Fool. And then you'll be a fool.

You know? And all of a sudden, you're about to lose your butt because you don't know what you're doing. And the first time that Donald Trump or North Korea boy burps and the market moves, you're going to freak out and make the exact wrong financial decision at the exact wrong time because you don't have anyone in your corner coaching you through and telling you to slow down. So this is why i recommend investment advisors i personally use an investment advisor and did i mention i know a lot about this and yet i have people that but i don't sit and look at mutual funds all day long you know what this nerd does that works with me on our e-opening on our smart investor pro he's a nerd he's a one of my best friends but he is a nerd and his whole job his whole life is look at mutual funds all day long just shoot me no thank you i don't want to do that all day long but he knows

more about mutual funds in his pinky than any six of you put together with your theories and discussing them with your brother-in-law over Thanksgiving dinner, and two of you hadn't got a net worth of $4 put together. But you got a lot of opinions. See, this is how people do. It's dumb. They take more financial advice from their golfing buddy than they do from a professional. And then wonder why, I lost money when the market went down. Well, of course you did.

Your golfing buddy is your financial advisor. Give me a break. And he can't even play golf. I mean, come on. Gee. So, no, you get a financial advisor. You get somebody in your corner. And the way you do that, you click SmartVestor at DaveRamsey.com.

Put in your information. It'll drop the list of the SmartVestor pros in your area down. You get to choose which one. These are the people we have vetted that we feel good about. Our team spends a lot of time and a lot of my money digging in and knowing about these people to make sure they're straight up and that they have the heart of a teacher. And that's you sit down with somebody like that. You don't use an app. You use an app to play solitaire.

You don't use an app to do your investing. Katie is with us. Katie's in Birmingham, Alabama. Hi, Katie. How are you? Hi, Dave. I'm well. Thank you.

My quick question is my husband and I just really got started on Baby Step 2 and decided, you know, we're going all in. We're getting this done, taking care of it. And so I've been wondering what we should do because we both have IRAs through work, and my company matches 3%. So should I keep putting that in there to match 3% or should I hold off on that for now while we're going through Baby Step 2? Okay.

Where did you learn about the Baby Steps? Well, I've heard little bits here and there. I heard your name, and I've seen a bunch of budget stuff on Pinterest because I usually keep a budget for us. Now, when I say that, I keep track of our expenses. I don't really stick to the budget. That's been our problem. And so now we've decided we're really going to hit this hard

and get out from under student loans and my car payment. Gotcha. Good for you. Good decision. Thank you. Okay. So what I'm going to do is I'm going to send you a copy of the book, The Total Money Makeover. It's got all of the details. I got that in the mail yesterday. Oh, okay. Well, then you're ahead. When you

read that, what it's going to tell you is it gives you every detail on the baby steps, okay? Exactly what to do, when, and why. And it answers questions like the one you asked. That's why I was wondering, you know, where you were in this process. But you're still kind of gathering the information. You've come up with a commitment. We're going to do this, but you're learning how to do the plan and what the plan is now.

Okay, so the answer to your question is this. What we tell folks, when you get to baby step two, one of the things that gets people out of debt is this extreme amount of focus. What you focus on is what you win at. If you focus on your career, you'll win at your career. If you focus on your marriage, you'll win at your marriage. If you focus on getting out of debt, you'll get out of debt. And there's something emotional, spiritual, and mathematical about that. But it's not simply math.

So for that reason, because the power of focus is such an element, such a data point in whether or not you're successful at working your plan, we tell people to stop all saving of any kind temporarily, even if you're going to miss the match it's temporary but the power of focus will cause you to become debt-free much faster than trying to do three things at once poorly i want you to do one thing well yes and that's would you also is that also applied to um no more at once we have well we already do have our emergency fund so no more adding to that well we're worse than that we're going to take everything out of the emergency fund down to baby step one which is a thousand dollars

and we're going to throw it at your baby step two right we actually just did that yesterday we had a little over two thousand in there and so we took it down to $1,000 and paid off the credit card. You're ahead of me. How'd that feel? It was awesome. It hasn't hit the account yet, but it was awesome. Yeah, that's exactly what we're doing. You see, you're getting traction, and that's exactly the feeling I want you to have.

It's like, yeah, we can do this. There's hope in your voice. Your voice changed when you talked about that. You got this. Proud of you. Well done. You can do it. But yes, I would stop investing temporarily until we get back to baby step four.

This is the Dave Ramsey Show. Thanks for being with us, America. We're glad you're here. For all of you SiriusXM listeners out there, we've had some recent channel changes, if you haven't noticed. The Ramsey Network is now live on SiriusXM Channel 121 weekdays from 2 to 5 Eastern. The Ken Coleman Show kicks off at 2 p.m. Ken answers your questions about how to get the most out of your work and your career, followed by this show, The Dave Ramsey Show.

And you can catch the rebroadcast weekday mornings at 6 a.m. Eastern on Channel 111. The Chris Hogan Show is now on Channel 111. The Chris Hogan Show is now on Channel 111. Wednesdays at 8, 10 a.m. and 8, 10 p.m. as well. Channel 111, you'll find a lot of the Ramsey Network shows popping up between Chris Hogan, me, Ken Coleman. And Channel 121 is live every weekday from 2 to 5 Eastern, starting with Coleman, then into me. So thanks a bunch, guys. We appreciate you joining us on SiriusXM.

Brian is with us in Orlando. Hey, Brian, welcome to the Dave Ramsey Show. Hi, Dave. My wife and I thank you for your ministry, and we definitely look forward to the Money in Marriage event tonight. Oh, cool. Well, you're going to have a blast. Rachel was excited about it.

She was in here yesterday. She and Les are just a lot of fun. You're going to enjoy that event. Rachel was excited about it. She was in here yesterday. She and Les are just a lot of fun. You're going to enjoy that event. How can I help today? Sure. Well, my wife and I are on baby step number two, and we were able to get $17,000 forgiven off my wife's student loan debt. Now, I heard that this is considered taxable income.

Is that the case for us to save up for? What kind of student loan debt? Well, it's just regular graduate loans from my wife. She has $17,000 that was forgiven because she's a special education teacher. Oh, okay. So this was the, okay, yeah. I'm not positive. I think it is taxable, but I want you to check with a tax pro.

I'm not that good at taxes. Some things I know about. Regular forgiveness on loans is taxable. For instance, if you had a credit card that you owed $10,000 on, you got behind, and you settled it for $2,000, that $8,000 of forgiveness is taxable income. That one I do know the answer to. But whether that will apply to the federal government forgiving your student loans because of your community service in your particular field,

which is what's happening with your wife with special ed, I don't know. It's illogical for it to be taxed because the government just gave it to you to incentivize you to work in an underserved area. But the tax law is not always logical. As a matter of fact, it's primarily not logical. So I would just double check uh i i it should if it if it follows the line of the other debt forgiveness it is taxable but if there was ever a special exception for something it would be for this because it's the feds forgiving a fed student loan then they're

going to run tax you on the forgived amount that doesn't make sense so um but again it doesn't always make sense so check your tax pro they'll be able to tell you you can click elp at daveramsey.com for tax professional call them they'll answer it for you they'll just help you even if they're not doing your taxes and if you need somebody to do your taxes that's who i would use for sure ashley's in salt lake city hi ashley how are you hi um good How are you? Hi. Good. How are you? Better than I deserve.

What's up? Good. We have about $12,000 total in our debt right now, and we have one car that's totally paid off, and then we have another car that we owe about $3,000-ish on, and I'm wondering if you might sell that or keep it. What are the cars worth each? The one that we sell is worth about $5,000. And the other one is worth what?

And the other one we owe about $3,000. What's it worth? Oh, I have no idea, actually. I don't know. I didn't look up the other one. Roughly. Is it $10,000, $20,000, $30,000? It's definitely like a little beer car, so it's not like a nice car.

So it's probably worth about what you owe on it. Yeah, yeah. Okay, gotcha. And what's your household income? About $20,000. So both of you aren't working? No, I stay home with the kids. Okay, and he's only working 40 hours.

Yeah, yeah. He's doing insurance on the side right now, but it's not making a whole lot, not enough to, like, be another income. All right. And how much debt did you say, again, you have? $3,000 on the car, and what else? $2,000 on, or about $2,600 on credit cards, and then $2,000 on a baby, and then $4,000 on dental. Okay.

All right. No, you don't need to sell your cars. Your cars are not unreasonable. What you are facing more than anything else is an income struggle. Mm-hmm. He's not making any money. For sure. Yeah.

Yeah. How old are you guys uh 25 and 30 i think he's 31 maybe 32 okay all right yeah so um there's two answers to an income problem like this and it is a problem um for you because you're not able to pay all your bills and you're not able to stay out of debt and so forth. So two answers. One answer is that on the short term, it's the part-time job. And he can make as much as he's making now delivering pizza at night four nights a week. Yeah. You make $1,500 a month doing that in Salt Lake City.

Yeah. And that would be pretty incredible to double your income so i mean really you look at these numbers ten thousand dollars changes your all's life yeah that's about eight months of work delivering pizza for sure take your debts and divide them by 1500 a month see how fast they go away and then you just live on your 20 okay so you're something like that i don't care what it is but something like that short term the way you get your income up is the dreaded part-time job but i don't want your way of life to be that for the next 20 years agreed yeah totally so then the second part is to figure out what do i want to do

that's a different career field that makes me five times as much as i make now 10 years from now so if he's 31 what's he going to be doing when he's 41 that makes him 80 or 100 grand and then once he figures out what that is then the next question you ask yourself is what have i got to go learn or get to get to be one of those whatever it is he identifies do i have to get a four-year degree maybe not do i have to get some certifications maybe do i get an apprenticeship program probably you know what is it you're going to do you know what is it he wants to do that pays a whole lot more than he gets paid now? And probably that is more fulfilling, honestly.

So what would make him smile and bring home a bigger check both 10 years from now? And then what are the steps to become one of those, whatever it is that those people do, right? And it can be all kinds of things. An example would be I've got a friend that in the early 1970s, late 1960s, decided he wanted to go into the real estate business. He had a high school education, but he wanted to be a real estate broker. Well, you don't have to have a college degree to be a real estate broker. Well, you don't have to have a college degree to be a real estate broker. He just simply went and took the test and became a real estate broker.

And all these years later now, had a highly successful career as a real estate broker and never went to a day of college in his life. We're hoping that's what insurance will do when he gets going with that. Who is he selling insurance for? Oh, it's a company that carries a lot of different names. I can't remember what it's called, though. Okay.

Well, it could. There are people that have very successful and lucrative insurance careers. But, you know, you've got to ask yourself those questions. But apparently, as what you're telling me is the insurance gig is a horrible part-time job. It just started, like, a month ago. Yeah, and so how much has he brought in for a month of his labor? I want to say he's made about $600. Oh, well, that's better than I would have guessed.

I was guessing zero. Okay. So if you're making more than a dollar an hour in your first month doing that, you're pretty good. So, yeah, if you can make $600 and then next month get to $1,200 and then the next month get to $1,800, yeah, bring it on. I'm in. But he needs to go make some money and clear this stuff up. That's the answer to your equation. Hey, thanks for the call.

This is the Dave Ramsey Show. 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.