The Ramsey Show - App - The Difference Between a Gap Fund and Emergency Fund (Hour 3)

Episode Date: November 27, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show. Where debt is done, 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 at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Ella is with us to start off this hour in Fresno, California. Hi, Ella.

Welcome to the Dave Ramsey Show. Thank you, Dave. I'm so grateful to be on your show. Well, thank you. How can I help? So I have $291,000 in debt and I am a family nurse practitioner. I work in the outpatient setting. I make $135,000 a year with a guaranteed bonus of $12,000 each year, which is coming due in about two weeks. I am also currently finishing my doctorate in nursing practice.

I have in nursing practice a doctorate degree. Yeah. Why are you finishing your doctorate? What are you going to do with it? So I would like to teach at the graduate level with my doctorate degree. Yeah, that would allow you to do that. Okay. Yes.

And also California is one of those states who are really pushing for nurse practitioners to have this level of education to continue practicing. I see. Okay. All right. And how much do you like finishing your Ph.D.? So I have four semesters left, which comes out to $28,000. Mm-hmm. Okay. So my question is, because it hasn't been pushed into the law yet, that I need this degree, should I continue the degree or should I postpone it? And what do I do with my $12,000 bonus?

You continue with the degree because it's what you want to do with your life, and it actually does have an application. It has nothing to do, because you want to teach, and to teach you're going to need a Ph.D. Not because we're worried about what California is going to do with nurse practitioners. That's not the motivation in this situation, because that's not your goal anyway. Right? Right. So you continue with the degree,

and obviously the 291 is on hold while you're in this program, I assume? No, so I'm paying part of it down. Why? Are you required to? Well, $25,000 of it is consumer debt. Oh, I thought it was student loan debt. Okay. No, $25,000 is consumer debt. $78,000 is student loans.

I have $8,000 left on my car, and I have $180,000 on my house. Oh, I thought you told me. I had $291,000 in student loan debt. Okay. Oh, no. Okay, so you're working baby step two, of which $78,000 in student loan debt. Okay. Oh, no. Okay. So you're working baby step two, of which $78,000 in student loan debt. Correct.

Okay. Now, so what I would do there is I would budget to pay cash for the PhD, and with what's left over, I'm going to work the debt snowball as fast as I can. Obviously, $28,000, that slows you down. But you're making $150,000 a year with everything. And you got the $12,000 bonus. So when do you need to pay tuition next? The second week of January.

Okay. That's where the $12,000 is going, right? Okay. I mean, you need $28,000 to finish $12,000 is going, right? Okay. I mean, you need $28,000 to finish the PhD. Did I hear you right? Yes. This is $12,000 of it. So now you need to save up the next $16,000 in time to be able to pay it,

in time to continue your track, right? Also, living on a very, very tight budget, paying down your other debts. But we're not going to borrow money to finish the Ph.D. We're going to cash flow the Ph.D. Okay. And I would just stay in there and get it done. I mean, you're only, what did you say, four semesters away? I'm four semesters away. I'm 30 years old.

I have a baby on the way in three months. Okay. But I 30 years old. I have a baby on the way in three months. Okay. But I can do it. Okay. So are you married? I am. And what does your husband make? So my husband actually ended up having cancer.

We went through cancer treatment. He's in remission. He has not gone back to work. About a month ago, we had a water leak in the house. And now that there are fires in California, the insurance company is kind of going around and around with things with us. And so thank God we have a strong relationship with our church and we have church members who this is their specialty dealing with water leaks and things like that so they've been helping us when's your husband going back to work so my husband does not have advanced education like i do um we figured even if he went back to work the income that he would be making would just cover daycare oh so he's gonna stay home

with the baby? Yes. Okay. Okay. All right. I was just trying to do the math on how we're going to pull all this off, and I thought I suddenly discovered another salary that I didn't have in the early part of our discussion. That's what I was trying to get to the bottom of.

So there we go. Thank you. Yes. Perfect. Perfect. Perfect. Perfect. So, yeah, well done.

You got it. You got to run here. But pay cash for your first step to getting out of debt is borrowing no more. That's step one to getting out of debt. And step two is you begin to work your debt snowball. You get on beans and rice, rice and beans. And you guys got to get through this flood you've got there and all these other things you're facing. But, yeah, yeah, you're doing it.

You know, you got stuff. You got this thing on the run. You do need to stay with a Ph.D. and finish it up because you have a use for it if you were simply going to be a nurse i would not go to the expense because it has no value but if you're going to teach it's required obviously in most settings and for you to be a successful long-term professor, yeah, you're going to need that. That's going to be the track you're on. So it sounds like you're going that way, and you're going to be in the classroom.

That's going to be wonderful. Good stuff. And then we'll assess your husband's career situation as the child gets a little older and as he gets a little bit past his cancer, and certainly we've got the flood behind us and all that. So there you go. Good question. Thank you for joining us.

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Redwood, Tennessee 37027. Chelsea's with us in Dallas. Hi, Chelsea. How are you i'm good dave how you doing better than i deserve what's up all right well i've got a different kind of question we have a unique situation with um my husband's job we travel full-time in the r. We have for five years now. Um, he's usually, this year is not so typical on a normal work year. We're off for two to three months. Um, and during that time we file for unemployment until his company has a new job to send him to. Um, he makes about 63,000 a year. So we're working on baby step number two, but I keep going back to number one, just thinking, you know, $1,000, that is not enough to make us through those off months.

So I was wondering if you have any suggestions, if we should just treat it the same. No, you need to stop your baby steps. You've got an impending layoff. Just treat it the same. No, you need to stop your baby steps. Okay. You've got an impending layoff. You have storm clouds coming over the horizon. And it's very predictable. There's a greater than 50% chance of it. Agreed?

Oh, yeah. It's guaranteed. Okay. Yeah. So, I mean, this is coming. It's like the company announced to you that they're closing down and you're going to lose your job in May. I mean, you do not work your baby steps when you're in that situation. All you do is pile up cash and get ready to weather the storm.

Now, if you're comfortable with the fact that you will get reemployed within three months, then set aside three months of expenses, and then start your baby steps. But this is not really an emergency fund. This is more of an unemployment gap fund. Other emergencies you can cover with $1,000 and go back to work in your regular stuff. And don't use that three-month gap fund to fix transmission in the car. Okay? It's not an emergency fund. It's anmonth gap fund to fix the transmission in the car. Okay? It's not an emergency fund.

It's an employment gap fund. That's all we're doing it for. And then you restart and start your baby steps, you know, back again. But in the meantime, just stop everything. I mean, just every ounce of dollars you can squeeze out of your life, you pile in an account to get ready for the storm. And then once you've got the umbrella bought you know then you go back and you go ahead and you do your you know you can go ahead and start your baby steps again but you've got a very very predictable

event that's coming here it's it's like christmas is coming we got to get ready for it you know you gotta save money it's coming you know and so this so this is happening, and really, if you drain that down and then get reemployed, then stop everything. If he loses his job, stop everything. Stop paying extra on anything until he gets his new job or gets reemployed or however that works, okay, in your situation. But you're exactly right. Your instincts were correct. Andrea is in Logan, Utah. Hi, Andrea. How are you? I'm okay. Thank you. I Just wanted to thank you for all you do. You've been a big blessing to me. Well, thank you. How can I help today?

Okay, well to cut to the chase, I'm recently coming out of a marriage, a 12-year marriage, and during that time I co-signed with my husband on some student loans. And what's really an ugly twist in this whole thing is he's in jail at this time, and he's unable to pay his, you know, his share of the student loans. So naturally, because I'm a cosigner, I've, you know, I assume the responsibility. I'm just wondering if there's any way that I could possibly not be, you know, given that, given the situation and that I'm, you know, I'm now, I have kind of a not as good of an income, obviously, since he's not working, and I'm trying to work that out and everything,

but I was just wondering if there's any way out of that. Wow, your life has been an adventure. What's he in jail for? Theft. How long will he be there? You know, I don't know he has his sentencing uh next month but you know i i it's just been a real rough few years so you have a you have a divorce that's final yes and uh in the divorce decree um you were told or he was told to pay bills, but he can't because he's in jail, or what?

What's the divorce decree say? Well, that's the thing. I mean, it's pretty much there. I'm just waiting. I talked to the banks about that. No, no, no, no, no. Stop. I wouldn't want to ask you.

What does your divorce decree say about who is responsible for these student loans? I haven't received it yet. It's that new of a situation. It's that recent. Is the divorce final or not? Not quite. Almost. Okay.

Probably next week. But, I mean, the divorce papers that you signed said who's responsible for what debt. Yes. Yes, that he would be responsible for his student loans. Okay, that's what I'm asking. And then do you have any other debts? No, I do not. And how much student loan debt is there? So the one that I signed on, the smallest one is about $2,700.

I'm working on that. And the next one is about $13,000. Okay, so there's $15,700 in student loan debt. And you have no debt other than your co-signing on these, correct? I do not. And how many children do you have? We have two. And how old are they?

Eight months and four, four years. And what are you doing for a living? How much money are you making? I bring in about $1,500 a month, which is not very much. It's about $248 I pay toward the student loan. Now, stop. I'm not worried about student loans. I'm asking what you're making.

What are you doing for a living? Oh, I work at a hospital right now. Doing what? Yeah. oh uh i work at a hospital right now and uh doing what yeah i uh i work as a a nurse technician good how old are you yeah what's that how old are you i'm 32 okay all right you have been through hell kiddo and let's just let's lay things out on your strategy for your life going forward. I have a 32-year-old daughter, so I'm going to be your dad for a minute here, okay? Please do. All right.

So here's what you're going to do. You've been through hell, but that's in the rearview mirror. You have job one is to take care of you and these kids. Student loans are way down on the list of things to worry about. I'm not worried about them at all right now. Okay? You're making $1,500 a month in Logan, Utah with two babies. If you feed them and keep the lights on and keep a roof over your head,

you're doing a pretty good job, kiddo. Okay. That's job one. Food, lights, water, shelter, living on a budget and under control that's job one i'm not worried about these student loans you can call them and tell them you're not paying them right now tell them to jump in the creek okay okay because you know they may take your tax return money at some point later in the future, but right now you have two babies to feed.

You don't have any money. You're feeding the babies. Okay. And just don't worry about that. Now, I do want you to get around to getting them paid, because I've got a feeling he's going to be in jail for a while, the way this sounds. Yeah. Yeah.

I think so. But we've got to, first things first are you and the babies. You take care of you and the babies first. Now, we're settled, okay? Next step is, what are we going to do to make some more money? And what is our career path to where when you're 42, you're making $118,000 instead of $18,000 a year? Somewhere along there, you're going to reach over and pay off those student loans after you get moving, okay? Okay.

So here's what I want you to do. I want you to go get into Financial Peace University membership. I'm going to give it to you as my gift, okay? It costs you nothing. And I want you to go to that class, and I want you to get some of those people around you, and you tell the pastor at that church where I'm sending you, or the coordinator that's coordinating that class, your story, so they can come around you and make sure you've got all the support you need while you're going through this.

You've got to have family right now, kiddo. Hold on. Kelly will pick up, and we'll take care of you. You call me if you need more help. I know you're scared, but we're here for you. Okay, things are getting pretty weird out there. I thought the Equifax breach was bad enough. It exposed the personal financial info of half of all Americans. Now we have breaches affecting almost every U.S. citizen, and the data stolen is more personal and equally dangerous.

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Call 800-356-4282 or visit zander.com. That's zander.com. That's zander.com. You ever mess up your bank account with something like Black Friday or Cyber Monday? Well, you don't need to do that. No kidding, Dave, I know that. Well, I mean, how do you keep from doing that? Well, the way you keep from getting lost is you have a map. And your map in the money world is called a budget,

where you tell every dollar what to do before it leaves. Instead of it all left and you go, I'm lost. I'm broke. I'm overextended. Oh, my God. Don't do that. No, instead, you need a dadgum map. You need a game plan.

You need the little blue line showing you how to get to where you're going. And you drew the blue line. You're in charge of this. But if you don't tell your money what to do, you will always wonder where it went. And that includes Christmas. I mean, math doesn't take a day off because of Christmas. Math still works. You're not in Congress.

You don't need to spend money you don't have. It's that simple. You're spending money like a drunken congressman out there in the mall, man. It's nuts. So if you're going to spend money, that's fine. I want you to enjoy Christmas. I love Christmas. But I mean, don't let the January you be pissed at the December you, you know?

Five million budgeters are using every dollar to keep from running their car in the ditch. It's the best budgeting tool, the most robust, most elegant budgeting tool out there. So go to EveryDollar, download it for your phone, you can get it on desktop, I don't care, it's free. And get a plan. Takes about 10 minutes, guys. It's part of being a grown-up. Adults devise a plan and follow it, and children do what feels good. I don't care about your feelings.

It's time to be a grown-up and time to make this money behave. You're not four years old. Akeem is with us in Atlanta. Hi, Akeem. How are you? Doing good. How about yourself? Better than I deserve, sir. How can I help? So, I am around

about $90,000 in debt. And I finished Baby Step 1. I got my $1,000. Good. And now, you know, I'm looking at what else I can sell to, you know, kind of get this snowball rolling and my

car note is around $500 it's $495 and I want to sell it but I'm kind of upside down on my own and I also use it to do Uber and so I was looking at other stuff to sell and it's kind of the same thing

my camera I'm a photographer at other stuff to sell, and it's kind of the same thing. My camera, I'm a photographer, and I want to sell my camera, but I needed to take pictures. And so I would just kind of see if I could get some advice of, shall I like refinance my car? How much do you owe

on your car? So I owe $1,800. Pretty much around $18,000. Pretty much around $18,000. $18,000, yeah, okay. And it must be a high interest rate, is it? Yeah, $8.7. Okay, $18,000.

And what is the car worth? Have you looked it up on Kelley Blue Book on private sale? It's $14,000. So you're four in the hole. And what do you make a year? $40,000. What do you do? I'm a graphic designer.

Okay. And how much have you made taking pictures? You know, it's a kind of range. In the last six months, how much money have you made from photography? In the past six months, I have made around $5,000. That's pretty good. Yeah, so it's a nice little side business. That's probably better than Uber, isn't it?

Atlanta is a pretty busy city, so, you know... But I'm saying by the hour hour you're making more with photography than you are driving right correct yeah that's what i mean by better so uber's wonderful i don't mean there's nothing wrong with that go do it um and so you have an 18 a 14 000 car you make 40 are you single yes what is the rest of your debt? Student loans? Student loans, correct. What's your degree in? Graphic design. I have a bachelor's in fine arts. Okay.

All right. Are you allowed to do side work in graphic arts? I mean, that's, I kind of, you know, I pick up clients here and there. But, you know, doing Uber kind of takes away. Yeah, but I think, again, I'm not dissing Uber, but I think you use your chosen profession, freelancing on the side, and get on a bunch of these sites and get these jobs, start bidding on these jobs. I think you'll make more doing that than you will Ubering per hour.

Because what I'd love to see you do is just get your income up and keep the car. The car is not completely out of bounds. It's not going to give you some kind of big change, but I want you to plow through the $14,000 real fast. What are your smallest debts? So I have a motorcycle. What do you owe on that? $800. What do you owe on that? $800.

What's it worth? I mean, it was in a motorcycle accident. It was my fault. So I'm, like, stuck paying on it. I have to have it. Oh, so it's totaled. Yeah. Is it gone?

No, I still have it. What's it worth as it sits? I haven't really, when I looked it up in County Blue Book, they gave me, was it two grand? But it's torn up, right? It's torn up. Yeah, so, I mean, if you could get the 800 bucks out of it, you'd be great, right? Correct, yeah. So is that for sale yet?

Yeah, it is. It's on Craigslist. Do what now? It's on Craigslist? It's on Craigslist. Do what now? It's on Craigslist? It's on Craigslist. Okay, good. Yeah. Good.

Yeah, so start going through and doing that. What you need to decide is where you can make the most money as a side hustle per hour, and then do a lot of those hours. I think that's graphic arts out of what you told me, but I could be wrong. It might be photography. It could be Uber, but I don't think it is. Mm-hmm. So, and then I want you to roll up your sleeves and start, you know, you sell a motorcycle.

What's the next smallest debt? It's my credit card at 2K. Okay, cool. You got it cut up yet? Yeah, it's cut up and gone. It's going hard, but I did it. You're doing it, man. You're on fire.

You got the motorcycle for sale. You're, but I did it. You're doing it, man. You're on fire. You've got the motorcycle for sale. You're thinking about selling the car. You're working. You're doing all those right steps. You just got to get them real focused and real organized and bear down on it. Okay. Yeah. Hit the hustle and grind button, right?

Yeah, that's right. I'm a little bit afraid that you're just running out and doing uber instead of concentrating on growing the other two businesses which might be more profitable for you as side hustles correct yeah it's kind of hard to just you know getting the business for photography getting the business for graphic arts is the hardest part and i think you focus on that a little bit and because i think you can make twice per hour what you're making on Uber. And Uber's like your default button and you just fall back into that

because you don't want to go try to gather up the business. Yeah. Yeah, so let's do a little bit of self-marketing here. Believe in yourself. You're probably good with that camera. You're a visual arts guy. You're probably great with the graphics. You're a visual arts guy.

It's what you do. You're creative. And so I think you can make the most money that way. Do a little bit of marketing of yourself there and push that out there. And let's try to double your income this year with the side hustles. And you do that. You put another $40,000 on this $90,000 in two years, you know, a year and a half, you're going to be done with everything, Student loans, car payments, credit cards.

You're just getting started, though. You're going to do this. You're really going to do this, Akeem. I can tell. Hold on. I'm going to send you a copy of the book, The Total Money Makeover, if you don't have one. And make sure that you get lined out there. Make sure you stay on this track because you've got this thing going man

you have done a great job a really really good job that's exactly what it is thanks for calling sir listen you hear all the signals with that guy those are the signals you look for in yourself he's willing to do almost anything he's sick and tired of being sick and tired. He's cleaning up the corners of his life. The old motorcycle that's laying in the basement has been laying there for a year probably, right? Getting rid of that thing. Maybe I need to sell the camera.

Maybe I need to sell the car. Maybe I need to work. What can I do? And he's really starting to really, this is what happens when you make it the thing. This getting out of debt is not just getting out of debt. It's about I'm going to get control of the money segment of my life. I'm going to tell money what to do instead of the lack of it always telling me what to do. When you start using these kinds of words and sentence structures around this discussion that shows your intensity, that shows the fire in your belly,

that's when we know you're going to make it. That's how I know he's going to do it. He's got the stuff, man. This is The Dave Ramsey Show. our scripture of the day proverbs 29 20 do you see a man who's hasty in his words there is more hope for a fool than for him. Winston Churchill said, courage is what it takes to stand up and speak. Courage is also what it takes to sit down and listen. Phil is with us in New York City.

Hi, Phil. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? So, I'm 15. I have $2,500 saved, and I'm saving for a car. I don't know how I should better invest that to save for a car. Well, you don't really invest it when you're saving for a car, because that's a purchase you ought to be making fairly quickly. What's your household income? My parents? What's your household income?

My parents? What's your household income? For me, myself, and my parents. Your family. What are you, are you married? No, I'm 15. Oh, you said, I thought you said you're 50. Oh, my Lord.

Okay. So, what do you want to spend on the car, Phil? Well, I have $2,500 saved right now. I don't know if I could have my parents put any of Roth IRA for me, or I don't know what would make a better return on investment. Well, I thought we were saving for a car. We are. Okay. So the Roth IRA doesn't come into play. were saving for a car. We are. Okay. So the Roth IRA doesn't come into play.

We're buying a car. Okay. So how much are you wanting to spend on your car? $5,000, $10,000 maybe. Okay. And how are you going to get the rest of that by the time you're 16? I don't know. My parents wanted to lease me a car.

Lease you a car? To drive until I went to college, but I said that was a bad idea to them. Yeah, that's a bad idea for everybody. This is a, no, you should pay cash for your car. How much more money could you put with the $2,500 by the time you're 16? I could probably double that. Okay, then you buy a $ thousand dollar car for cash you don't need to invest it because if you if you're not going to leave the money alone a long period of time

like five years or more putting it into mutual funds it could go down in value rather than up and that's what investing investing requires that you leave it alone a while um so i would leave it leave it in a simple savings account maybe earning one percent the money that's that you leave it alone a while. So I would leave it in a simple savings account, maybe earning 1%. The money that you're going to have for the car is going to be due to the sweat of your brow and the work of your hands, not due to interest on this, because it's such a short term that you have to deal with. So scratch that other $2,500 up, make it a $5,000 account, and then buy you a $5,000 car for cash, Phil.

That's exactly what I would do if I were in your shoes. Michelle is in New York City. Hi, Michelle. How are you? Hi, Dave. Thank you so much for having me on. Certainly. How can I help?

So we're a high-income family. I'm a high-income earner, and we live in a very high-cost-of-living area and fairly frustrated that we make a lot and have nothing. I've been listening to you for six months. We both read the Total Money Makeover. We have no more credit cards. I'm now in budgeting, which is very new for me. And we're in Baby Step 2.

I've paid off $24,000 of $37,000. Good for you. Way to go. Yeah, and I'm proud of me. I've cut out a lot of things like my manicures and everything else for that. And additionally, we cash flowed $25,000 for my kids' school. Wow. Yeah.

So here's my question. We've identified that we're in, we don't have an income crisis, we have a spending crisis. But our spending crisis, our three major expenses are our rent, and we desperately want to be able to buy something, and we don't have that money. Gotcha. What do you make a year? What's your household income? It's almost half a million.

Good for you. Well done. Yeah. Good for you. Well, you're going to be there. You're cleaning up the debt, and you're paying attention. You guys were just living like you were crazy, and you live in a very expensive area, so your rent is probably crazy.

How much is your rent? $7,300 a month, including a garage, because we have to park our car in the garage. So where do you live? In Upper East Side? Where are you? Yeah, around that area, yeah. Okay, all right. That's what I smelled with the rent.

So you're on the island, and yeah, you're some of the most expensive real estate in the world. But you make a half million dollars a year. You're going to be okay. You're just impatient. A little bit. I mean, I'm a motivated kind of person. You are, but you started this 20 minutes ago. I mean... I'm a motivated kind of person. You are? But you started this 20 minutes ago.

I mean... I did. Give yourself a break. Give yourself a break. I mean, just extrapolate out the math a little bit and say, okay, we're going to knock out this little bit of debt. You've already knocked out $24,000, which you should have making that kind of money. And you chopped up the credit cards and you're living on a budget. Is everybody in the house house you and your husband we have a written plan with where all the money's going right correct my question is how to get out of the major expenses while

we're in baby step two which i think we'll be out of in the next six months you're not in order to get out of my car lease which we know is not going to happen again, ends in January. And I want to be able to buy a car in cash when that ends. And then also to move apartments, we're trying to figure out if it's worth to move an apartment to save $1,500 a month. I doubt it. So both of those things require money down. No, I wouldn't. I would just stay in the apartment it's it's um 80 000 a year out of 85

000 a year out of half a million it's not going to keep you from buying another place okay relative to living in abilene texas i mean if you're somebody listening in abilene texas think you and i are smoking something right now but in the world you live in with the income you have that rent is not keeping you from buying. Now, you're going to pay cash for the next car in January, which means you're not going to buy a super expensive car. Right. I mean, I was thinking a $20,000 car. We need an SUV from where we live and with the kids.

So you're going to have $20,000 by January? I probably could, but I was going to put all the money to get rid of the debt first, so I didn't know if I should save that up during the debt. I don't know that I would buy a $20,000 car. I mean, I'd probably buy a $10,000 SUV right now. Okay. You can get an SUV for $10,000. That'll get the job done right now.

And then let's knock this debt out. You need to hit some of these goals and get used to the idea that we're deeply sacrificing so that we can buy. Right. And that's your whole goal. We feel very frustrated that we can't. You know, I was in school for many years and training. I didn't make money for 15 years while a lot of friends and colleagues did. And so we're, you know, we're trying to.

We don't want to be later in life and never have any equity for our children. You're going to be just fine. You're going to be just fine. You make a lot of money, and you're now paying attention. You're going to be fine. If you hadn't started paying attention, I'd worry about you. But you're on task. I mean, you're an ambitious go-getter, but you've only been working on this two months.

I mean, you're going to be fine. You're going to blow right through this debt. You're going to blow into the emergency fund, and then you're going to start saving your baby step 3B. Are you chunking a bunch of money in investments? We're not, and I actually stopped my 401K. You're doing everything. Look at you.

You're doing everything. We have like 300 in it already, so we stopped that. Yeah, that's perfect. So what do you guys do for a living? I'm a physician, and my husband is in the marketing field. Phenomenal. Excellent. Well, great careers, and you're doing so good.

Your income is amazing, and you're actually working and submitting yourselves to this step. I mean, it's like you gave someone a prescription and they actually took it. Yes. Thank you for it. I really appreciate all of your advice and everything. Yeah, you're doing really, really good. By this time next year, you're going to be sitting knee-deep in cash, driving a $10,000 SUV with no debt and an emergency fund,

and be heading towards your first purchase of a co-op or something, whatever you're wanting to buy there, okay? Yeah, that's what I'm hoping, although I think we need a $200,000 down for something like that. Okay, maybe it takes two years, but you've got plenty of time. You make a ton of money. Then you're going to turn around and get that thing paid off. So what would you spend, like $5 million on something?

No. A million? On an apartment? Yeah So what would you spend? Like $5 million on something? No. A million? On an apartment? Yeah, what are you going to buy? Probably something in the low, like one to one and a half. Okay. But you need $200 to $300 to put down, and it's hard for me to even imagine that right now.

Well, you're going to be there in no time. I mean, just take $500,000 and start dividing it into these things minus taxes, and you're going to be right there. This is what you've worked so hard for. And then you're going to try and get that thing paid off. How old are you? 37. When I'm talking to the 42-year-old you, you're going to be sitting in a paid-for apartment,

and you're going to be rocking making a half million a year. By then, you'll be making $600,000. Way to go. That puts us out of the Dave Ramsey Show and the books. We'll be rocking making a half million a year. By then, you'll be making 600. Way to go. That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. I'm excited to announce that we're now carried on 600 radio stations across the country.

To find one near you, head to DaveRamsey.com slash show.