The Ramsey Show - App - The Emergency Fund Is for Insurance, Not for Investing (Hour 1)

Episode Date: December 4, 2019

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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 you jump in we'll talk about your life and your money it is a free call and some say the advice is worth exactly what you pay for it the phone number is triple88-825-5225 that's 888-825-5225 tim starts off this hour in texas merry christmas tim how can we help merry christmas dave thanks for taking my call sure what's going on so i i am on a baby step two now. My question is regarding my student loan. I just renewed my contract with the military for another six years.

And as part of that, I got up to $50,000 in student loan repayment. Right now I have $16,000 left on my student loan. And I already called them. And they said, but the catch with the repayment is it's only $7,500 a year over the six years. So I talked to them and I said, you know, when I get this $7,500 for the first year, which would be early next year, you know, how is that applied? And they said, you'll be considered paid ahead. So right now my monthly payments are about 180 a month going up to like 220 next year. And I'm wondering with the debt snowball,

once I'm paid ahead, should I take that 180 and apply it to something else, you know, something smaller debt, or should I keep paying the 180 a month toward my student loan while the military is helping me pay it off? Okay. Are you out of debt except your student loan? No, sir. Oh, how much other debt have you got? How much? Well, once I get rid of – I'm trying to get rid of my $25,000 car

that I shouldn't have bought, and I'm trying to get rid of my $25,000 car that I shouldn't have bought and I'm about to get rid of that so then I'll be at about $50,000 okay and what is the other $34,000 some credit cards, some medical bills a smaller

loan on another vehicle, and I think that's about it. And what's your household income? Around $60,000 to $70,000. Okay. And so how quickly will you pay off $50,000? Two years? I'm hoping 18 months to two years. Yeah, I'm thinking two years.

Kind of my goal. Plus or minus the military helping you with $15,000 of it over that two years, right? Yes, sir. So is your debt snowball not your largest, or your student loan not your largest debt once you get rid of the car? It will be, yes. Once I get rid of the car? It will be, yes. Once I get rid of the car. Yeah, I would just pay minimum payments on the student loan, the least that you can pay

until you get to it. And of course, you're going to have to apply the $7,500 to it. I assume the military pays that directly, do they not? That's my understanding. Yeah, okay. So they're going to dump it on the student loan, and then you pay the least that you can pay on the student loan until you get to it and the debt snowball, and then you pay the most that you can pay. Now, the trick is you're not going to get the other $7,500 to apply to it until you would have already paid it down below that. Correct. So what I would do is pay, if they allow you to pay zero payments for a while

because you put the $7,500 on, I would do that. And then when you do get to the debt snowball, or get to the student loan in your debt snowball, if it's down near $7,500, what I would do is put all of the money that you would have paid in it if the military wasn't sending you a check. In other words, all the money you're paying on debt, I would put is put all of the money that you would have paid in it if the military wasn't sending you a check. In other words, all the money you're paying on debt, I would put it in savings. And I want an extra $7,500 in savings above your normal emergency fund

so that if something breaks for some reason and you don't get this money from the military, that last $7,500, then you've got the money to just write a check and pay it off. Okay. And if they do, of course, come through, then you'll have just an extra $7,500 in your savings. Okay. So you set the money aside as if you were getting out of debt, but don't pay your student loan below that last $7,500 if you can help it until they send you the check. And then when they send you the check, write another check with it, the second $7,500.

That's $15,000 out of the $16,000. And so, you know, if you have a little bit of another $500 or something, just clear it all up and you'll be done. So when that second check comes, you should be done. Correct. Yeah. And either from the money and savings or from whatever, but just pay the least possible you can pay on the student loan at all times because it is the bottom of your debt

snowball until you get to it. Hey, good question. Thanks for serving your country, sir. We appreciate you. All right. Michelle is up next in North Carolina. Hi, Michelle. How are you? Hi, Dave. I'm doing great. How are you? Better than I deserve. What's up? It's a privilege to talk to you. So I have a vehicle with my now ex-husband, and I have the money to pay it off. However, he will not sign over any of his rights towards it if I decide to resell it. I don't plan on doing that in the near future, but in the event that I need to in the future, I would like to have that ability. I'm sorry.

I'm sorry. What did the divorce decree say that happens with this car? It didn't have, we didn't discuss vehicles. I mean, it's just in my name. I mean, I am fully responsible for it. No, it's in his name. He owns the car. You don't own the car.

Yeah, it's in both of our names right now okay yeah and so what i would do is tell him apparently he gave you this car in the divorce right but nobody was smart enough to write it into the divorce degree yeah it was just kind of he has a motorcycle and i have the car so that's how it worked out okay does is your name on the motorcycle it is okay so i i would explain it to him this way either i'm gonna hire an attorney and drag your ugly butt back to court and we're gonna get these names off of these vehicles because everybody that took this divorce to start with was stupid because you guys did not address this in the divorce decree whoever your attorney was should have their butt kicked okay and we're either going to go back into court and the judge is going to tell you to take your name off of my car and my name off of your

motorcycle or we're going to do that voluntarily now do you want to do this the hard way or the easy way you cannot pay off a car where you've got a goob sitting off in the distance with his name on your car and won't release it yeah so i was going to just refinance it into my name um you can't refinance the title into your name. You're talking about the loan has both names on it or the title? Well, the loan has both names on it. Whose name is the title in? Both of ours, I'm assuming. Yeah, and that's what he needs to sign over.

Yeah, so even if I refinance, he would still have to sign something. Yeah, there's the ownership and then there's the debt they're two different things yeah so get the car title out and figure out whose name is on the car title and then get his name off of the car title and then pay the loan off and that's what you've got to do and he either do it the hard way or the easy way but this should have been done in the divorce decree it This should have already been handled. But you guys have got to go clean it up now. And he's standing over there acting like he's got rights or something. Give me a break.

This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years,

and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. thanks for joining us america this is the dave ramsey show sky is in texas hey sky welcome to the dave ramsey show hey dave how are you better than i deserve what's up well my wife and i have just cleared baby step three and we're prepping for 4, 5, and 6, but also purchasing our first home. And we were kind of wondering if the 100% down plan was good for us or what you would say about that. Well, I always love the idea, for sure.

It's all I do. So how much do you guys make a year? We're a single- family of 97 000 okay and how much of that could you save towards a house a year mm-hmm 2 000 a month so 24 24 25 000 a year okay and uh what price range of home would you want to about 250 okay well that would take 10 years 25 into 250 right yes right so uh like we currently have i'm 32 she's 31 we currently have 74 000 in retirement and we'd be doing uh we'd be maintaining four five and six simultaneously but we just want to make sure that... Now, what part of Texas are you in? Dallas.

Okay. All right. Well, how old are you? You're 31, young couple, no kids? Two. Two kids. Okay. All right.

Well, one option is to not buy a $250,000 house the first one, buy a cheaper one the first one. That's true. And then keep saving, and you buy a house quicker you know i mean if you bought a hundred and something thousand dollar house and you saved a little bit more if you save thirty thousand dollars a year you could do a hundred thousand in three years hundred and thirty thousand in four years you know that's that kind of thing so just kind of back your goals in and look at that and say how quick can we do it? And then you can decide whether you want to do that or whether you want to do the, you know, as much down as possible

and put it on a 15-year fixed where the payment's no more than a fourth-year take-home pay and then turn and pay it off as fast as possible, right? So you can go either route. I don't yell at people for either one of those routes. I don't borrow money for anything ever. Of course. I will never go back. And so that's, you know, but the home is the one thing I just don't yell at people about.

Everything else you should just save up and pay for. It's silly not to, just silly. So, but the house, you can go either direction. I would challenge you, if you were going to do the 100 down plan to temporarily uh put off retirement and just do baby step 3b and i would challenge you to tighten that budget even tighter and let's say how crazy can we go how fast can we save i mean could we save 50 000 could we do double that and if you did that for three years you'd have a hundred fifty thousand dollar house and two years later you could move three years later you move again by two hundred fifty three hundred thousand dollar house because you have no house payment then no rent for that

other section once you bought the first place that's that's a way to kind of step into it but but if you're gonna if you're gonna do that i would turn up the heat uh and be very very very focused and very intense on that goal and uh that's how sharon and i have done it on things we get ready to do we just go boom that's it we're not doing anything else completely focus on that until we get that done kayla is with us kayla is in california how are you kayla i'm good how are you, Kayla? I'm good. How are you? Good. Merry Christmas. How can I help? Merry Christmas. So I will be 26 in a few days. My boyfriend is 31 and we are avid spenders. And also I'm about $27,000 in debt and he's about $27,000 in debt, and he's about $40,000 in debt.

How do I get him motivated? I'm a new listener of yours, and every free minute of my last two weeks has gone to you. So I'm very motivated, and I'm done making minimum payments here and there and scrounging for payment money um i've put together my debt snowball listening to you and watching videos and other people um how do i get him on the same page as me because he's okay with just making payments and i'm not well you were three weeks ago i was three weeks ago and now so what what changed between now and then new information that made you new information was inserted into your brain that made you believe yes I've looked at all my statements I've seen how much extra money I'm paying by putting off

paying in bigger chunks and getting rid of this but you've watched YouTube videos of other people doing it you've heard me teach the debt snowball, none of which you knew about a month and a half or two months ago. And that new information that those other people that are doing this, and this is how you do it, and these are the steps, made you believe. That's called hope. It made me angry at myself, yes.

But you see that it can be done. And so you smack yourself in the forehead and go, I've got to do this, right? And so he doesn't have that same set of information. And so the only difference in you and him is you're a month and a half or two months ahead of him on information gathering. So he needs the same information. When he gets the same information, if he doesn't join you on this crusade then we've got other issues he's either lazy uh he's hopeless he can't he can't you know because hope was awakened inside of you when other people did it and i showed you a clear path agreed correct and if hope isn't awakened inside of him when I do the same thing for him,

then we've got other issues. Well, his income is double what mine is, so he can afford all of his monthly payment. No, he can't. No, he can't. It's absolutely absurd. He has a great income, and it's stupid that he's in debt. There's nothing okay about it at all. I mean, between the two of us we bring in like 200

grand a year and we're still like not scrounging but we're almost there because we're spenders and so well you're you're out of control you're spending like you're in congress you know you're just out of control and so you woke up and kind of had the aha moment went whoa you know dr phil moment how's this working for you? You know, it's not. And so I have to change some stupid stuff because if I keep doing what I've been doing, I'm going to keep getting what I've been getting, right? And this is the aha moment, the revelation, the epiphany that you have had. And it's unfair to expect him to have that drop out of the sky into his brain.

The reason you had that was you have information that he doesn't have so you've got to you know turn him on to youtube i'll send you a copy of the total money makeover book y'all read it together start talking about it because couples that are not on the same page with money very seldom get married or stay married and that's what i want to avoid yeah so it's very important that you get on the same page but again i can't say anything negative about him he just doesn't know what you know so of course he's not motivated he's the same guy he was two months before three months before and and the same as you were three months ago yeah you were no better three months ago and so

you know you you've got new information and you're smiling and you're pumped and you're like going for it. And you got a goal and you believe it can happen. And, you know, all these awesome things are happening now in your brain. I'm so proud of you. It's very cool. And I think you can, my point is, I think you can turn him on to this. He's just, you just got to, you know, not expect him to magically get this just because you're excited. He needs to gather and see the same information that you have.

And then if he doesn't catch on, then we got other issues. Then we got other issues. So, hey, good question. Hold on. I'll have Kelly pick up for you, and she'll send you a copy of the Total Money Makeover book as my Christmas gift to him. And then you guys read that through together, pop on some of those debt-free screams. There's hundreds and hundreds of them on the YouTube channel and, you know, jump into financial peace university, even if you want as pre-marriage counseling or something, that kind of thing. Folks, people don't engage in transformational things in their lives unless they think they're going to work. Why would you go to the gym and sweat and call that fun. You only do it because you want muscles. You want to have

better aerobic efficiency of your heart. You want to be in better shape. There's a reason you do it. And the Bible says, no discipline seems pleasant at the time, but it yields a harvest of righteousness. So why would I engage in painful things unless I believe they were going to bring me a better future? And that's normal human activity. That's how we all think. And that's a good thing. This is the Dave Ramsey Show. Support a small business this holiday season that does business right. I'm talking about Grip6 Belts.

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six.com and search for the dave ramsey to get 35% or more off GRIP6 products. GRIP6.com. Ben is with us in Illinois. Merry Christmas, Ben. How are you? Hey, Dave. Merry Christmas to you. How are you doing today? Better than I deserve, sir. How can you? Hey, Dave. Merry Christmas to you. How are you doing today? Better than I deserve, sir. How can I help?

Cool. Love it. Hey, I am actually just calling. I'm planning ahead just a little bit. I'm not quite there yet, but how long do you typically suggest that one stays in 3B? Usually, if it gets much more than three years, if you're putting nothing into retirement in 3B, which is, I assume, what you're asking, then, you know, I don't want you to be out of there much more than three years unless it's unusual circumstances. Just because I don't want you to miss out on all the growth that's going to happen in the coming years from you having become an investor, right? Right, absolutely. And I'm very eager to invest. So you're reaching ahead. You said you're still back in two right now.

But what do you project you're going to be able to save towards that house in 3B a year? I'm assuming I could probably put about like $75,000 to $100,000 a year. A year. Cool. Look at you. Yeah, once I get to that point, I think I should be out of BabySip 2 hopefully by March. BabySip 3 done by the end of April.

What do you do for a living? I am actually self-employed. I'm a wedding photographer full-time. Well, you're making bank, huh? Yeah, we're working and twerking over here. There you go, man. Good for you. All right, so you get to 3B, and you're going to save $100 a year.

And what price range home are you saving for? We're probably looking between maybe $400,000 to $500,000. And so if you did three years, you might put down $300,000. If you did two years, you might put down $200,000. Correct. Yeah, I want at least that 20% just to make sure I'm avoiding P&I. But, yeah, I mean, obviously, the more the better. I just didn't know if there was a cap on how long you stay at that point

because, like you said, I want to make sure I'm investing and preparing for my future. Yeah, how old are you? I'm 25. And when will you be to 3B? How long? I'll probably be there by the summer, by June, June 1 or so. Okay, so you're 26 plus two years, you're 28, you start investing, right? Yes. Oh, you'll be fine. All right, cool.

You'll be fine. The thing I don't want is just somebody drag button along for 10 years, you know, and not starting their investing. Right. No, I agree. Yeah. So what is your annual income um well last year my company did about 205 um and this year we're on track to do about 300 and you're 25

i'm 25 years old sir you are a stud man i'm impressed well done absolutely killer open phones at 888-825-5225. You jump in. We'll talk about your life and your money. So, all right, we're going to talk to Carl in Pennsylvania. Hey, Carl, how are you? Good evening, Mr. Ramsey. I'm doing good.

Good. How can I help? Yeah, I've already started reading your book. I would say I've only got a few pages done. I got it like less of a late. And I need to know where to put the emergency fund. I have one credit card left, and I've already, it's down to about $1,500 or so. Good.

Okay, so what do you mean where to put the emergency fund? Where are you going to park it? Yeah, where am I going to park it? Like, is there a mutual fund? No. Is there a bank? No. You want to get a decent money market account, but the thing about the emergency fund, it's not there to make money.

It's not an investment. It's there to protect your investments. In other words, you have an emergency fund so you don't use the 401k to fix your stupid car transmission or something right and so the emergency fund is not really there to maximize wealth it's there to protect it's more like insurance than an insurance costs you money to protect things so i mean you're going to make one percent on it right now if you get a good little money market account. And 1% on $10,000 or $15,000 is not going to make you rich ever. No.

So the purpose of the emergency fund is treat it like an umbrella. The purpose of the emergency fund is it's insurance. It is not an investment. If you just remember not an investment, then it doesn't, you know, you don't feel so obligated to make that money work. And my emergency fund doesn't work. It just sits there and looks at you. It's just stupid. But it's just there in case something happens. It's like you pay money on homeowner's insurance. And most people never are hardly ever have a claim their entire lives. And very few people have their own home burned completely down i mean it's very unusual statistically so or have it blown over with

a tornado like people we talked to yesterday that kind of thing it's very unusual so most of the time we we put money out there to protect so good financial planning a good game plan for your money has offense and defense, and the emergency fund is not the offense. It's the defense. And if you keep that in mind, then you don't worry about the investment. I mean, I don't even know what mine pays, but it's probably in the 1% range. It's a money market with a local bank that pays me really good

because I have a pile of money in there. It's that simple. All right, Drew is with us in Texas. Hi, Drew. Merry Christmas. How can I help? Hi, Dave. Merry Christmas. I'm so excited to be talking to you. You too. What's up? I have a question. I have a question. I am 29 and my husband is 37 and we just paid off our house this summer. We actually are planning to sell that house and then buy the house that we found, which is our dream house. However, the owners kind of dragged their feet on the house that we bought, and we had to keep our first house and buy this house.

So we wound up getting tenants in our first house that is not logical the owner that you're buying from drug their feet why does that require that you keep that house well so the owner on the house that we were buying we should have bought it back in like may and they kept telling us we had a deal and then they would say no and we were so in love with the house so we bought the house but by the time we didn't want to put our house on the market until we had a deal with this new house so put it on the market and sell it but which one why didn't you put it on the market and sell it when you had the deal well we just didn't know if we were going to actually get the deal with the house because

the owners were so kind of volatile. So we wanted to make sure we had a contract and a done deal in case we didn't want to leave our house. So when you have a contract and a done deal, why didn't you sell your house? So then we did. But what happened was it was the slowest time of the market because it was the dead of summer, which is pretty much the only bad time to sell your house in Texas. And so we wound up getting tenants when we saw that it wasn't going to sell. We would have a gap period.

So we wound up getting tenants for six months who are there until the end of March with an option to do a month-to-month lease. And we have a pretty big shovel. We're very lucky. And so we weren't sure if we should keep that house no as a rental property no you think so no you shouldn't have kept it as long as you did but no yeah no it should have been it should already been gone no you should because the deal is this you got that house paid for that made it make sense to buy the dream house but now you've got two houses and so the

dream house has a but big butt mortgage on it because you didn't sell the other house right yeah that's not cool your original plan was a good plan the original plan was a good plan don't become don't become a landlord by default got it got it got it only do that by plan and you would only buy rental property when you get your home paid off and you save up money to buy rental property with. And so that's what I would do. Now, you do what you want to do, but you're going to look back in five years and start hating this old house before this is over if you don't get rid of it.

So quick as that tenant gets out of there in March, get it slicked up, put it on the market, get rid of it, cash that, throw it at the big butt mortgage on the dream house, and then attack that mortgage in your baby step six and go ahead and get it knocked off completely. Hey, good question. Thank you for joining us. We appreciate you hanging out. Open phones this hour as we talk about you, America,

right in front of you. Merry Christmas. This is the dave ramsey show you Thank you. We'll be right back. David is with us in Florida. Merry Christmas, David. How can we help? Hey, Dave. Merry Christmas. Thanks for taking my call.

Sure. What's up? I've got a life insurance question for you. My wife and I are on Baby Step 6. And back in 2011, my mom passed away. She was the owner of a life insurance policy on my dad. We just kind of took it over, and we've been paying since 2011, kind of on autopilot. And it's a group universal life.

It's not a term policy. And the problem is we try to get a term on him, but due to some health concerns, he's uninsurable at this point. He's now 70. So my question for you is, should we just cancel this policy and go elsewhere with investing our money, or should we just keep it because we've paid into it for so long because it's becoming very expensive at this point? Yeah. Well, they will. Universal life folds in on itself and explodes as you hit around 70.

It starts to get nasty. Yeah, that's where we're at. I mean, how's his health? Well, he won't sure because of COPD, but otherwise he's doing okay, and I think he's going to be around a while. So we may be paying for this for, you know, who knows, 10, 20 more years. Yeah. And so how much does it cost now? Right now we're paying $411 a month, and next year on his birthday it goes up to $448. And that's for how much coverage? $100,000 benefit.

Okay. All right. coverage a hundred thousand dollars benefit okay all right um now the next question i guess is uh does anyone need money because he takes care of them when he passes well his his uh wife will need some money yes because she depends on depends on his retirement income as part of their household. So he remarried? Yeah. Yes, he remarried several years ago. Do they have any nest egg?

They don't. They don't have much. So that's kind of why we kept it, because I'd be able to help out with the funeral expenses and so on. Does he have any other income or nest egg he he's he's now he doesn't have much he's retired he has a small pension and of course social security and medicare for his health insurance well the insurance is needed. He can't get more insurance. And so you guys have just got to decide if you want to continue to pay into it.

It's basically very expensive insurance is what it amounts to. Yeah, very, very expensive. And, you know, is there – Does she work outside the home? Go ahead. I'm sorry. Does she work? Yeah, she's still working at this point. What does she earn?

I'm not exactly sure, but they're not wealthy by any means. It's probably a modest income, well below $100,000 a year. Well, I guess the point is, how can we take care of her if this policy is not there? Right. And if something happens to him, when something happens to him. And what does taking care of her look like, you know? Does she keep working? Is she going to get Social Security, survivor Social Security?

What's she going to get? And where are we going to go from there? So I hate to cancel this, but I hate to keep it, you know? That's what it amounts to. I agree completely. Yeah. I think the riddle that you all need to sit down and talk through is if we can figure, if you can figure out a way that someone starts to build up a little bit of a nest egg to

take care of her in the event that something happens to him um then that makes it tenable to drop this policy how much is there any is there any cash value in the policy there is uh it's uh right here it's only a couple thousand dollars not a whole lot of money and it's gonna it's probably deteriorating. Yes. And if we do drop it, what would we put, you know, we have $400 some odd a month we're putting into it. We could put that in something else, like a Roth or something extra. Well, he can't do a Roth unless he has an earned income. She can, and she could do a spousal Roth, which wouldn't hurt. You know, and that's about what you're putting in it.

I mean, they can do $7,000 a year at their age each, so you could do $14,000, so that would be more than $500 a month or whatever. $500 is $6,000, right? Right. So they can do $7,000 each, so you could do up to $14,000. I would love for her to help them with their budget, and between his Social Security coming in and her income coming in, for her to start funding at least one Roth,

and maybe you fund the other one by dropping this. Now we're putting $14,000 a year aside. It doesn't take long for us to get up to $100,000 then. Right. Okay. thousand dollars a year aside uh doesn't take long for us to get up to 100 grand then right and um you know so i mean if he lives five years you break even right exactly and that's what i'd rather do so i might tighten her tighten their budget up and say okay can you guys do 500 bucks a month we'll do 500 bucks a month let's do a a couple of Roths, and that would only be $6,000. But, I mean, if you wanted to do the full thing of $7,000, you could. But that would be preferable, and it's a better solution 15 years from now

than keeping this policy is, a much better solution. Right. Yeah, because at some point we're going to be paying $1,000 a month. Yeah. It's just not tenable. Exactly, and there's the point. So, yeah, and we still haven't got her taken care of, you know. A hundred grand is not going to be enough to take care of her, but it's going to be a whole lot more than nothing.

So, yeah, let's talk about putting together a plan of investing that makes everyone comfortable that we can get to some kind of money pile quick enough that we are relaxed from having dropped this. And then I would drop it. And one of those plans might be you do $7,000 a year, she does $7,000 a year, or they do $7,000 a year, and we drop it. Okay. You know, and do a traditional IRA, mutual funds, or Roth IRA, either one's fine. But, I mean, you can do that. And, you know, after two years, you'd have $30,000. After three years, you'd have $45,000, not counting growth, right?

And five years later, you'd have $60, have 60 plus growth so you're going to be real close to break even and that that's that's what i'm thinking you're looking at um that makes him 75 years old with copd and you're saying he's otherwise seems to be healthy and um so you know the the the downside of that plan is if 12 months from now he died, you know, statistically, I mean mathematically, you would have been left in a lurch there. So, hey, good question. Thank you for working with them and loving them like that. That's well done. Open phones at 888-825-5225.

Jamie is in South Carolina. Hi, Jamie. How are you? Hey, Dave. Nice talking to you. You too. What's up? My husband is retiring and we have been living off of his income and I have my own business.

It's electrical contracting business and he is coming to work full time on our business. Our house is paid off. We don't have any debt. We have a small loan that we're paying because we had to have some foundation work done but it's not much left on the loan um but uh my concern is um insurance trying to get insurance for myself and also uh wondering how we should pay ourselves out of the company i currently don't get paid out of the company um because it's so small my brother it's a family-owned business my brother and my son work for us and we're getting ready to bring on my son-in-law and you pay all of them excuse me and you pay all of them yes why don't you get paid well i do it out of the goodness of my heart. And we live comfortably the way we've been living.

But now that he's retiring, all that money is dried up. We do have some in his 401K. Yeah, I think you've got to restructure the way you're running your P&L on this business. And you're going to get in a position that you guys are both being paid out of this business. Because what you're telling me is the goodness of your heart won't work anymore because you don't have his income anymore. So, yeah, I think you've got to restructure that and rethink that. And I think you probably should have anyway.

It's just an unhealthy way to run it. It's not good for the other people that are there for you not to make money out of your business. That puts this hour of the Dave Ramsey Show in the books. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.