The Ramsey Show - App - The Credit Card Is Your Enemy, Not Your Friend! (Hour 3)

Episode Date: January 13, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones this hour. At the bottom of the hour, number one best-selling author, Ramsey personality Chris Hogan will join us. Chris will be here to answer your questions along with me.

And so if you've got questions for Mr. Hogan, he'll be here at the bottom. And coming up in about 24, 23 minutes from this moment. So you jump in and tell Ms. Kelly you want to talk to Chris Hogan at the bottom of the hour, and we'll make that happen. The phone number here, 888-825-5225. Maureen is with us in New York. Hey, Maureen, welcome to the Dave Ramsey Show. Yes, Dave, so pumped to be talking to you.

You too. What's up? Okay, so I have a side hustle, and it earns me about $20,000 to $24,000 a year. And I really want to get rid of it. It pulls my focus from my main job. I've run around at least two days, sometimes three days a week for it. But every time I tell my husband that I want to let it go, he's like, well, you always managed to get it done. So I was like, you know what? I'm going to call Dave and see what he thinks based on our current situation. Um, so we're baby steps

two. We're doing Dave ish because I've had to play a little bit of mental warfare on my husband and I had to play your podcast in my car enough to make him think that it was his idea to do this. And so we have one car loan left, that's it, for $20,000. And we have $60,000 in the bank. I just can't get him to part with it to pay off the truck um and we earn about three hundred thousand dollars a year do i just stand up to him and say hey i am quitting this side hustle you earn three hundred thousand dollars a year and you guys are moaning about a twenty four thousand dollar decision i know well you have enough money in the bank to pay off your car. I know, and to fund, fully fund emergency,

and I could be in four, five, and six, and, you know, sailing up at sunset. Yep. Yep, I know. This is stupid. Yeah. I know. It's terrible. Yeah, just.

Wonderful problems to have. Yeah. So, I guess like a lot of folk, when you call here, you already knew the answer, right? Yeah, I was looking for your support. Yeah, well, you have my support. I'm pretty consistent. Yeah, pay off your stupid truck, put your emergency fund aside, quit your little dinky butt job, you make $300K, you're going to be okay.

But you're only going to be okay if the two of you can learn to get on the same page and both of you quit being dad-blame obstinate. This is crazy. I don't know how. I mean, really, the biggest impediment to your future wealth building is the fact that you two can't make a simple decision like this together. I mean, my goodness, you are really struggling with unity in there. So that's a big deal.

All the data points tell us that couples who build wealth almost always work together, and you all aren't. You're having to do, what was it, warfare or something? What did you call it? I mean, that's, you know, yeah. Quit your job. Pay off your bills. Pay off your bills.

Quit your job. Get on the same page. Yeah, yeah. You got my support. All right, Johnny's with the same page. Yeah, yeah, you got my support. All right, Johnny's with us in Ohio. Hey, Johnny, how are you? Good, Dave, how are you doing? Better than I deserve, man.

What's up? Good. So to start off, we are debt-free besides our mortgage. Good for you. Thank you. We bought a house back in August of 2018, and we're really going gazelle and trying to get this thing paid off. Cool.

And it looks like we're going to be templated to pay off in November, December of this year. Great. And after we have it paid off, we're looking to get into paying for rental property. And I was just wondering from your experience, what do you see as the biggest pitfall or avoidable mistake you see new rental property owners make? Obviously, you're talking about paying cash for it, and that way you have my agreement, correct?

Yes, correct, yes. Okay, cool. So we're going to pay off the house, and we're going to save up and pay cash for the rental. What is the number one thing there? And this will be your first rental ever? Correct, yes. Okay. All right, and we're paying cash cash which paying cash gives you a lot more

wiggle room and you don't get into desperate situations okay but if i'm buying investment property um my rule is i just never pay appraised value okay i don't pay appraised value for investment property i'm always looking for a deal, particularly like a rental house. Now in the hot real estate market, like we're in, it's harder to find a deal than it was in 2008. Cause every, there's a deal on every corner. I bought a bunch of real estate in 2008, but I want to buy, I want to know what the actual, not the tax appraisal, but what the actual market value of the house is in as-is condition, whatever needs to be done. And then based on that, I want to buy it cheaper than that, considerably cheaper than that.

I generally try to buy it about 80% of value or less. Oh, perfect. Okay. Okay. Now, so old guy I used to buy real estate with 100 years ago, and he said, Dave, in real estate, the money is made on real estate at the buy. The best money you can make is at the closing when you buy it because you've already got money in your pocket as a result of having bought it right. So you're looking for a deal. The second thing you're looking for is a property that doesn't require a ton of work

now a little paint little carpet basic roof or something is okay but you don't need to get into some major freaking rehab in your first property it'll eat your lunch and i would avoid that just so you know if you've got some cosmetic stuff a little bit of landscaping you know some bushes that need to be pulled or whatever, that kind of stuff. That's how you get a deal is something that looks ugly but has good bones. But don't buy something that's ugly to the bone where you've got to tear the bones out, right? That's expensive.

And you don't want to get into something where you have to rewire, replumb because it's built in 1902 or whatever. That kind of stuff will kill you when you're a beginner especially later on if you get better at estimating and you start doing some rehabs that's fine but just minimal amount of work looking for a bargain and then as you're picking your tenants out you are interviewing a tenant for a job interview as if you were going to hire them only they're going to pay you instead of you pay them but uh you these people are moving into a hundred thousand or two hundred thousand dollar asset of yours and you want to be insured that they're not only going to pay the bill

but they're not going to tear the place down and move in 17 cats because you can get cat smell out of a house if you burn it down. But other than that, you really can't. So this kind of stuff is the stuff you learn as a landlord. So, you know, that's the process you want to go through. So just be very kind, and you treat your tenant with dignity and professionalism, but with a lot of firmness, a lot of firmness. A lot of firmness.

No payee, no stayee. It's a pretty simple formula. And don't drive me crazy. I want to do the repairs. I want to keep the property up. I want it to be kept nice. We're excellent landlords, but we're also not rehabbing the place just to keep you and your little color issues going all the time.

So you just understand you're a renter. It's a different thing than being an owner. Good question. It's an interesting process. You're going to enjoy it. This is the Dave Ramsey Show. i love talking about companies that know how to do business right you've heard of grip six belts right well if you haven't it's the only belt you can get online with no holes, no flap, and no bulk. I'm talking weightless, and the buckles come in really cool designs and

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Hey, guys, how are you? Hi, Dave. How are you, Dave? Good, how are you? Better than I deserve. Where do you all live? Austin, Texas. And all the way to Nashville to do a debt-free scream.

Yeah. Well, congratulations. How much have you paid off? Thank you. We paid off $63,555. Love it. How long did this take? 17 months. Good for you. And your range of income during that time?

It was $100,000 to $120,000. Cool. What do you all do for a living? I'm an assistant category merchant for a national grocery retailer. And I'm an install technician for Reliant Distribution, which is a CO2 provider. Oh, yeah. Excellent. Cool. Good for you. So what kind of debt was the $64,000? Well, half of it was my student loans, and then the other half was our stupid cars. Our stupid cars. Just like that. Okay. That's cool. So how long have you two been married?

Two years today. Oh, wow. Happy anniversary. Thank you. Okay. So shortly after the honeymoon, you looked down and saw stupid cars and student loans, and you said something's got to be done. Tell me your story. Well, so going back to whenever I was 19 years old, that's whenever I was first introduced to you.

And I had a coworker that would walk around listening to you. And I figured I'd check you out. So this was about seven years ago. And I listened to you, and I was like, this guy's crazy. He is. I'm not doing that. Definitely. That's not something I'm interested in doing.

No question. I was already on my third finance vehicle. I financed my first one whenever I was 16. So we were just on a bad road there. But yeah, shortly after we got married, actually it was the day after our honeymoon, we were driving back. After our wedding, but yeah. Yeah.

And we figured we'd listen to your podcast. I'm not sure why. I don't either. It was just, I guess it was just a blessing for us. And we started, we listened to it all the way from Rios in New Mexico back to Houston. Whoa. Yeah. It's like 14 hours.

That's a lot of Dave. That's a lot of Dave. Really, who talked you into doing this? Well, Dave Ramsey has always been kind of like a household name in my house. Like I had always heard of you. So when he was like, I think we were just really into podcasts I guess at the time and so we were like man we need something to listen to and I was like oh I've heard of this Dave Ramsey guy like let's give it a listen and uh it was no turning back after that

we went you went down the rabbit hole yeah we rented your book from the library like a week after we'd gotten back and I mean we read it within I think like 24 hours. And so we got married January 13th. And on February 9th it was like okay game on. Wow. I like noted that day as like all right we're not. Both of you. This is it. Both of you are game on.

Just like that. You tear into it and knock it out. Yeah. Way to go you guys. Thank you. How does it feel to have no payments? For the first time in your adult life. It's crazy.

We make so much money. It's crazy when you look at your paychecks and you're like, oh, my gosh. We make so much money and we're just throwing it away to these stupid cars. Yeah, stupid, stupid cars come up again. Okay. There's a theme here. Yeah. I mean, student loans pretty you can definitely go to

college without getting a loan absolutely you buy a car without one too so now especially because you don't have any payments don't have any money all this very very cool who were your biggest cheerleaders outside the two of you oh definitely our family yeah family was everybody in our family every time they saw us they asked us how we were doing. Yeah. We were getting close. Okay. When we were going to be on your show. Yeah? Oh, wow.

Yeah. My oldest sister lived with us for a year or so. And, I mean, I think she fed us that entire year because we were like, we can't do anything. Like, we're sticking to a plan. We have a budget. So she'd, like, take us out to Slim's Chicken. Oh, wow. Yeah.

It would have been very boring without her yeah well that's awesome so tracy your family was already in this so i mean you kind of grew up around it you said yeah and uh so you know you just of course they're going to cheer you on that makes sense excellent excellent job big supporters yeah so what do you tell people the key to getting out of debt is just budget uh budget and then just being on the same like the same game like the same ball field um we were it was just nice to come home and be like i'm so tired of this and to have him be like yeah me too you know so i think just doing that and then just having a dream like it was the first time we'd really been like oh okay we can actually buy a house like at this date if we if we get

rolling on this or you know our kids will never have to be in debt because we started this now yeah and you have a college fund for them yeah like so it just i think that was the biggest part of it just kept driving it forward and for for me, I just worked a lot. So I just stayed focused. As many holidays as they let me, as much as they'd let me pick up on holidays or anything. Just to stay focused. He worked in the oil field, so he was on week, off week. So we lived in two different cities pretty much the entire first year of our marriage.

But we just worked. We worked, and we were like, we can do this for 12 to 17 months or whatever it was. And then after that, like we're not doing it again. You can pay a price. You can be gazelle intense for a little while, whatever it takes. You can endure a lot of stuff for a year. Yeah. Yeah.

It's pretty powerful. What was the hardest part being separated like that? Being separated was really hard, especially because when he did come home like we didn't get to do much yeah which is actually i mean it was valuable time spent together because i mean we didn't have wi-fi we didn't have cable i think our apartment complex thought that we just like lived in their clubhouse building because we just go there to watch like the football games and and get on our computers like Use their Wi-Fi. Yeah.

I love it. It was right down the hall from us. Well, it's furnished to members of the apartment. Why not? Yeah, there's a pool table in there. Yeah. That's nice. A lot of entertainment value.

I like it. Yeah. So it wasn't too bad. My friends did think we were crazy when we were like, yeah, I don't think we're going to get Wi-Fi. Like, it's $50. That's crazy. And they were like, you're not're not gonna get wi-fi you've lost your mind i know you're crazy you shaved your head drunk the kool-aid yeah all right way to go you guys very

very well done we got a copy of chris hogan's book for you everyday millionaires that's the next chapter in your story you're gonna be one before you know it so you're chapter in your story. You're going to be one before you know it. So you're only in your, what, 20s, 26, 27? 24 and then he's 26. 24 and 26. Wow. I'm so proud of y'all. Thank you. Very, very well done.

Yes. Very well done. Good job. Great job. Man, that's amazing. You're heroes. William and Tracy from Austin, Texas. $64,000 paid off in 17 months, making $100 to $120.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! I love it! Excellent job, you guys. Very, very well done. It's about as good as it gets right there.

Bottom of the hour, Chris Hogan, author of the book I just gave them, Everyday Millionaires, will join us, taking your calls here on the Dave Ramsey Show. So you can jump in now at 888-825-5225. Kelly's opening up a line or two for Chris Callers. Noah is on Instagram. Dave, I'm 14 years old, and I mow lawns trying to save for a car. Should I set my price about the same or a little lower than the competition? You should set your price a little lower than the competition. You should set your price a little higher than the competition,

and you should offer a potential customer a free lawn cutting to show how good you are. And then you blow his or her mind with the quality of your work. That your work, I'm a little bit more, but I'm worth it. And let me prove that to you. I'll come cut your grass for free one time and show you that I am the best in the business. You wouldn't want anyone else taking care of your lawn because they wouldn't take care of it like I will. Give them a free sample, a free cutting, show them you're worth it, and charge them just a little bit more. By the way, tell them I'm 14 and I'm saving for a car. People will like being involved in your story because you got a great

story, Noah. This is the Dave Ramsey Show. Do you know who is a prime target for identity theft? Your children. Kids have no debts or credit history. Their personal information is just as easy to get, but the theft could go completely undetected for years. Every day all over the country, young adults are starting down their own path in life by opening a bank account or renting their first apartment, only to find out that they somehow already have credit card debt, a mortgage, or even a criminal record. It's devastating, but it can be fixed when you have an ID theft protection plan from Zander Insurance. They monitor all personal info for the entire family, and they take over all the work if you become a victim.

Best of all, your kids are covered for free on their family plan. Call them at 800-356-4282 or visit zander.com. It's just the smarter, more affordable way to protect your entire family. And it's the only plan I provide to my team. Zander.com or 800-356-4282. Joining me this half hour, number one best-selling author twice over and ramsey personality chris hogan joins me author of the book most recently everyday millionaires how ordinary people built extraordinary wealth and how you can too you want to talk to chris the phone number is triple eight

eight two five five two two five he and I will be answering your questions for the remainder of this hour. So, Chris, it's in the news. You probably saw it. Fidelity Investments reported that the number of 401K millionaires, investors with 401K balances of a million dollars or more, reached 180,000 at the end of the first quarter of 2019, a 35% increase over 2018. And joining the ranks of the 401k millionaires is actually quite achievable, but you need to be consistent,

patient, appropriate in your investing choices. Well, David, looks like somebody read the book. And I'm glad they were able to arrive at the same conclusion we found when you talk to over 10,000 millionaires. You don't get what's called an opinion. You get what's called facts. And there's, without a shadow of a doubt, with 80% of the millionaires saying the number one tool they used to push them over that millionaire mark was, in fact, 401Ks, 403Bs, IRAs, and Roth IRAs. So this seems like a little bit more of a synopsis of the book and the study that we did, but I know without a shadow of a doubt, just like you do, people that are patient and consistent and understand what they're investing in, they can build wealth.

The American dream is alive and available. Absolutely. I'm a little confused by these statistics because we know from the data that we've got and from other sources that there's about 11 million millionaires, and we know that about 80% of the 10,000 that we interviewed said that a large portion of them said they were steadily investing in their 401ks and their 401k or retirement savings, I guess IRA savings, Roth IRA savings, was in 8 out of 10 times one of the reasons they became millionaires. And yet this is only $180,000. So I don't know if this is Fidelity only.

Maybe it's Fidelity only. Probably. Fidelity is big enough. They could have 180,000 millionaires just in their 401k. Without a doubt. And it seems like, I mean, and they could easily reach out and get that information. But here's the thing that I'm glad that they put in here is that they put that it's achievable. Most of the nutheads that we hear out there in the media today will try to tell people that it's not possible.

And that's ridiculous. And I will try to find each and every one of them to silence them from spreading that you can't just silence people chris oh well i won't do it it's not legal well you can't just you can't do that all right you can tell them they're wrong but you can't silence okay that did sound harsh when you use your voice and say you're gonna silence somebody that's scary okay how this? I want to enlighten them. I want to cause them to shut their trap. Yes, I do. Shut your pie hole.

I'm going to silence you. Oh, that scares the crap out of me. Oh, that's funny. But you're right. I mean, the good news here, too, this is interesting that it's a 35% increase over last year. That's a big jump. It's due to the stock market jumping. It is.

It is. And just for all the people out there, if you're not plugged in with a SmartVestor Pro, you should be. This market is going to go from bullish to bearish, and it's going to do all kinds of fluctuations. But listen to me. You don't need to take a swig of Pepto. What you need is to have a clear plan. Investing in growth stock mutual funds will prepare you for that rollercoaster ride, and you stay clear. You don't have to get headache and heartache. When every time somebody hiccups or burps in

White House or something happens in the market, you just stay consistent and clear on your path, and I'm telling you, everything's going to be okay. You know, what's interesting, too, is that when you think about these numbers, a 35% increase in this, the data, Fidelity seems to be indicating here that it was their mutual funds. And, you know, a lot of those mutual funds underperform the S&P. Yes. And a lot of them have commissions on them, and a lot of them have expenses on them, all of which don't bother me. The underperforming the S&P part bothers me. I wouldn't buy something that doesn't outperform the S&P.

But there's plenty of funds that don't. And, you know, oftentimes when we talk with millionaires, and you and I talk to a lot of them here live on the air with our Millionaire Theme Hour, our Everyday Millionaire Theme Hour in the 10,000. We never hear rate of return. It baffles me, Dave. We never hear, you know, I got 11.8. Nope. Instead of my friend got 10.3.

You know, we don't hear people nerding out about their rate of return. A lot of times they don't even know what their rate of return is. They really don't. You remember years ago when the P.E. ratio was a big deal? Yep. You know, and everyone was calculating. Price earnings ratio. I've got to have price earnings ratio.

I've never heard anybody mention that. Also, you know what else? And this is right up your alley. You know this. I don't hear about credit card points and miles being the thing that pushed me over the top. Never hear it. No.

I didn't use, they don't use debt. No hear it. No, they don't use debt. No, they don't. They don't use debt. They really don't. So these are the conclusions of the Everyday Millionaire study, and if you want to see the actual white paper on the study, you can buy it for like $9 from our website. It's a PDF download if you want to see all the nerd stuff. But in Chris's book book there's 140 statistics from

the study and stories of real people which might be more important than the actual statistics but they illustrate the point that uh that it's very doable for you today and uh fidelity comes out in the news today uh and and again fidelity i think fidelityidelity Magellan is still the largest mutual fund. It's several billions of dollars and it used to be the largest for quite a while but I suspect it's still the largest out there. But billions and billions and billions of dollars invested

in these things and they saw a 35% jump and really they're calling them 401k millionaires but what they mean is they just have a million dollars in their 401k that's you know you're not a millionaire is not just your 401k ever but uh it just means they have you say somebody's a cash millionaire which means they have a million dollars cash right right but a millionaire is what you own minus what you owe that's exactly right dave and we actually have a free tool on my website,

Chris Hogan, three 60.com to help you track your everyday millionaire journey. It's good to know exactly where you are, but you also want to understand where you're going. So get over there to my website and start to track your journey right now. You know, I, even when I was stupid in my twenties, when I was buying real estate with all that debt before I went broke. I did understand that real wealth was net worth. And I always ran a financial statement. Here's the list of the properties that I own, what they're worth, what the mortgages are on them in that case back then. And the difference then is the equity, obviously, the total of the equities is what the real

estate contributed to my net worth. And that's how I knew that when I was 26, I had a million dollar net worth. I had about $4 million in property and about a million dollar in about $3 million in debt, which gave me about a million dollar net worth. And then the other thing I knew that was real was income. And so what's the real, you know, what are the measures of wealth? It's not a FICO score. No. It's your net worth, your income. You want to get real technical, you can say your liquidity, meaning you've got cash available. And what's your cash that's available and on hand for emergencies and for other things. But these are measures of financial health in a company or in a person. That's right. The balance sheet in a company is the equivalent of a net worth statement for a company.

And, you know, you've got the revenues, an indication of the income of the company. And they don't ask companies FICO scores. No, they do not, Dave. You know, you're looking at the health of the financial health of a company. When you're analyzing that, you don't look at it that way. No. And I'm going to tell you something. Back when I got first plugged in with you some 15 years ago, the big step that was the wake-up call for me was not only the budget, but writing down the debt.

The debt snowball. You talk about putting down and understanding where you stand. When you look at this thing that's taking your money away from you, when you start to able to itemize it and look at it, and you go, wait a minute, this is not my friend. And unfortunately, culture wants you to think credit card is your buddy. It's not. It's a frenemy. It's a thing you thought was your friend that turns out to be an enemy because all it does is steal. Well, get the thief out of your life. Eradicate it. I can silence that, Dave. There's a free download for you,

the Everyday Millionaire's Investing Guide, a step-by-step playbook for building wealth. It's a 30-page guide. It's free. You can download it at chrishogan360.com slash start now. The Everyday Millionaire's Investing Guide, a free download for you. Jump over there, chrishogan360.com. Back with your calls on the Dave Ramsey Show. our scripture of the day first corinthians 9 24 Do you not know that in a race all the runners run, but only one receives the prize? So run that you may obtain it. Beverly Sills said, you may be disappointed if you fail, but you're doomed if you don't try. Rachel's with us in Utah.

Hey, Rachel, your question for Chris Hogan and me. Hi, guys. I feel so lucky to have both of you today. Well, Rachel, your question for Chris Hogan and me. Hi, guys. I feel so lucky to have both of you today. Well, thank you. How can we help? So I was just hoping you guys could help me and give me a little bit of advice on my student loan dilemma. Just a little bit of background. I'm 26, single, and the only debt I have is this student loan.

No credit cards. My car is on the verge of dying, but I don't pay anything on that. So I guess my question is, I currently have my own student loan debt of around $12,000, and my parents ended up taking out a loan that I just learned is $85,000. I have enough money in my savings account to get rid of my loan completely, and I was just wondering what the next step was if you guys were in my shoes. Are you obligated to pay the parent loan? I'm not, but I feel terrible that they're struggling financially because of my loan.

I do too, but it's not your loan. It's their loan. They made a mistake. Right. And I'm guessing their income is higher than yours. Yeah, it is, but it's definitely not a comfortable position for them to be in. Well, I mean, if you get rich and famous, you can pay it off. But right now, we've got to get you going, okay?

So what is your income hun um i only make up like 40 to 42 a year okay i've cut off i've been always making extra putting extra money at my payment um mine was at 35 and now it's at uh in between 12 and 13 right now so i'm ready to just after listening to you for a while i I'm ready to just put that money at it and get rid of it. Absolutely, Rachel. Well, and here's the deal. You've been focused and not finished here by attacking this vet and paying it down from $35 to $12. How much do you have in savings right now?

I have $16. Okay. All right. And then I'm ready for my car to die. So that's my next plan is I don't know if I start from, you know, almost $3,000 or $4,000 and then rebuild to hopefully get this car to last me a little while so I can save more. Well, absolutely. And you need to stop talking bad about your car and go out there and give it a hug. Okay?

It needs to hang in there for you. And so you need to be kind to this thing. But I like the idea with you and your income and where you are, you getting another $3,000 to $4,000 car when the time comes. But write a check and get this student loan out of your life. Get it out of your life. And the best thing you could do for your parents is what Dave was saying. Stay focused. Put yourself in a position.

Build wealth. And so you're able to help them. But that's not your obligation. So stop trying to take that off their plate and stay very intentional and don't go down that path. How many hours a week are you working? I work 40 hours a week. Okay. I'd pick up a side hustle, and I'd write a check today.

I'm with Chris. I'd write a check today and pay off the student loan. That leaves you $4,000, and I'd build my emergency fund to three to six months of expenses, and then immediately I'd start saving for a car. So I think by Christmas you need to buy a car. Okay. And you should be able to do that. Okay.

But I'm going to get on a real tight written budget, get your EveryDollar app out, and let's make Every every dollar scream and behave. So by Christmas, you've got an emergency fund, a paid-for car, nicer one, and you're out of student loan debt. That's a pretty good place to be, Rachel. You've got a good start there. Christy's in Alabama. Hey, Christy, your question for Chris.

It's actually a question for both of you. I need advice. I'm not going to lie. My husband and I are in a, as I call it, a financial well. Our income went from in 2018, it was roughly around $100,000. Due to medical issues and things this year, we're going to be around $40,000. We were already behind before the medical things hit, and now we're just even more behind. And I recently got diagnosed with congestive heart failure, so we're looking at even more medical debt

and everything associated with that as we were trying to climb out of this hole, and we just really don't even know where to go next. How much debt have you got? It's right at $150,000. On what? Student loans, some credit cards, a car. It's mostly the student loans. How much is student loans?

It's around $65,000. Okay. And what is the other $85,000? How much is your car debt? It's $5,000. Okay. And you car debt? It's $5,000. Okay. And you got a bunch of credit card debt then, huh? Yeah.

I had some really, really stupid moments in college and my early 20s, and I'm paying for it now. So you got like $80,000 in credit cards? Somewhere around in there, yes, sir. Gee, goodness gracious. Have you cut them up? Yeah. Yes. They've been cut up for, uh, right at a year. Yeah. Good. All right. That's a good plan. All right. And so you've had medical problems as your husband as well.

Um, no, he, um, he's a general manager at a car wash. So he doesn't, I was about 75% of our income. My income got cut about 50% due to hours, and then I was out for about six months due to injury. With a congestive heart failure, have you got that under control to where you're able to work again? I am. My main job, I haven't been getting many hours, so I've actually put out applications to find another one and been doing food delivery anywhere from 10 to 12 hours a day,

just trying to bring in extra money. What do you do? I work for a medical records company. I'm an audit specialist. Okay. And you used to make at the high point how much? 2017, 2018, I made right at 85 to 90 000 okay so that's where we're headed back to that's that's the goal yes that's the target because that solves the problem

it really does it really does christy and and right now what you're feeling is is you've had murphy visit you you've heard dave talk about. It's where the stuff that can go wrong, it does. And right now, you and your husband need to take a deep breath and get on the same page that you can't borrow your way out of this. Okay? There's not a magic button you're going to hit that's going to fix it. They talk about the easy button on TV. That is just for commercials.

This is going to require you all really buckling down, being intentional, and really having a clear plan of walking through the principles we teach at Financial Peace University. The debt snowball. You can do this, but you're going to have to stay extremely intentional. So he's a manager at a car wash, right? Yes, sir. And the big issue we're having right now is when I was out of work for six months due to injury, my short-term disability was maybe a quarter of my income. So we're so far behind in a lot of our bills that we're scraping by to get our house payment and keep the lights on a lot of months. So it's trying to figure out how to get caught up with those so that we can start the baby steps.

Yeah, you don't need to be worried about baby steps. You need to be worried about what we call the four walls. So the first thing you do, you write out your budget in detail, and the two of you look at it. We do anything we can do to create income within your health parameters that you've got. He's working extra. You're changing jobs. We're all moving in the right direction.

Your first thing is food. Then you pay your lights and water. Are you current on those? Yes, we are. Then you pay your house and water are you current on those yes we are then you pay your house payment are you current on it yes sir good okay are you current on the car payment um i'm one behind on it but i think i should have that caught up by the end of the uh middle of next week when you write out your budget breathe this with me when you know you can eat keep the lights on and have a place to stay in something to drive you can breathe the rest of this is a monopoly game but those are life if you so breathe peace in knowing that the

four walls of your home are protected food Food, shelter, clothing, transportation, and utilities. You got that. And the rest of this is a game, and you're going into the second half of the football game, and you're behind, right? Right. You'll get caught up and work through. We'll help you.

We're going to put you through Financial Peace University as our guest. Okay, so you hold on. We'll have Kelly pick up, and we'll get you in the class and have some folks to walk with you. But you take care of the necessities first and then rest in the peace of that and then fight from there. That's exactly right. And you contact those other creditors, and you let them know you're going to pay them when you can. You're taking care of those four walls first. 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. Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.