The Ramsey Show - App - The More Success You Have, the More Excited You Become (Hour 2)

Episode Date: December 4, 2018

The show about you

Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show. Where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. Jose is starting off this hour in Boston. Hi, Jose. How are you? Hey, Dave.

How are you? Better than I deserve. What's up? Quick question. My wife and I just started Baby Step 2, and I guess my question overall is our expectation and aggression toward Baby Step 2 to tackle our debt. I want to go, you know, 100 miles an hour. I think we can do it.

But a part of us together combined, you know, we start thinking, and I don't know, by nature, we kind of start thinking, well, is that enough? Are we being too aggressive? Should we, you know, pay off the debt within two years instead of one year? And we're just having really issues on that kind of expectation. Okay. So you just started?

Yes, sir. Okay. Like a month? Yeah. Yep. Just about a month. Okay. And what's your household income?

A base is $145,000 a year. Good. A base is $145,000 a year, but that's probably closer to $160,000 once you add in over time, et cetera, et cetera. Good. How much debt have you got? Well, we have $58,000 in debt, about 85% of that is school loans, and we have a mortgage of $168,000. Okay. And so what's the other a mortgage of $168,000. Okay. And so what's the other 15% of the $58,000? We actually, when we first bought the house, we wanted to do some quick repairs, and my

wife took a loan against the 401k to pay it back at 2% interest, 2.8% interest. So we're just paying that off. That's the other. We have no more credit card payments or anything like that. Gotcha. Okay. All right. Wow.

Okay, so $58,000 making $165,000. When do you propose to pay it off? How long do you think it's going to take you? Well, that's my thing. I want to do like in 12 months i want to get that off as soon as possible i'm pushing so i know that's going to be about you know a little over four thousand dollars a month just towards that yep um you know and i know you say rice and beans and i'm i think i'm willing to do that it's just you know

we got to get both on the same page and yeah so your first month how much of your how much when you did your budget for the first month that both of you agreed to, how much is going towards debt? So we agreed to it's going to be $2,200. After everything else, we had about $2,200. Okay. So that puts you on about a two-year schedule. Correct.

Okay. Again, I think we have, and that's how everything was done, because over time, you know, it's not going to be the same every week, you know, so I think after everything, I think in some months I'm going to be able to be much more aggressive than other months. That makes sense. All right. Here's what I think. I think you're doing really, really good.

You've gotten started. You're both talking. You've both looked at the budget. You've both approved the budget. And you're paying at a rate of $30,000 a year against your debt. That's pretty impressive. That is a very good start. Now, in order to double it, what have we got to do, which would be a one-year plan instead of a two-year plan.

And then, you know, what you're going to end up doing is you're going to increase your intensity. So what I would do is this. Why don't you work the plan you're working and just keep talking about it each month without panicking about are we doing enough. And just go, look at how much progress we made. What generally happens is the more success you have, the more excited you become. And that's one of the reasons we work the debt snowball, the smallest debt to the largest debt, because it gives you some success and a reason to believe that you're going to win. Right now, this is a little bit theory because you've yet to prove it in your life. And so I would do this.

I would work it and just get more and more excited and get more and more excited and let her get more and more excited because the closer you get to the finish line, the harder you can run. And so if it takes you two or three months to get from the 2,000 up to 2,500 to 3,000 to 4,000, you know, by this time next year,500 to $3,000 to $4,000. By this time next year, you'll probably be well on your way. It might take you 18 months using that, but I think you're going to be fine. I don't think you have to go completely bananas.

If you both want to go bananas, that's fine, but you're saying she's willing to try this at this level. Well, let's have some success. And when she sees that success, I suspect that excitement will cause both of you to want to dial down some of your other expenses and dial up your income as much as you can and knock this out as fast as you can. I think you're going to get there. I don't think it's going to be in a year. It's probably going to be in a little over a year, and I think that's going to be just fine. The trick is to get there. That's the big deal.

Meryl is in Chicago. Hi, Meryl. Welcome to The Dave Ramsey Show. Thank you so much for taking my call. I really appreciate it. My pleasure. I am calling because I am a little embarrassed but desperate. Okay. I hear all the great stories about couples that have, you know, tackled their debt and how they're, you know, doing it together.

But I'm a 52-year-old that is single. And I have about $111,000. Excuse me, I'm getting over a cold, but I have about $111,000 of debt. That includes credit cards, my car loan, student loans. I went back and finished my undergrad and got my master's degree from DePaul. So how much student loans do you have? It's 60. Okay, and you said 100 in what total? So 111. Okay, and how much of loans do you have? It's $60,000. Okay. And you said $100,000 in what total?

So $111,000. Okay. And how much of this is CAR? $8,000. Okay. And how much of it's credit cards? Credit card is around, not bad with credit cards, right at $5,000. Okay.

And what's the rest of it? So it would be like, so the $8, i got i got i got 70 i got 72 right now 73 okay between the cars that i own my home oh that's your house and everything my 38 000 is what i have what i owe on my house yeah that's your house and everything though is the 111 okay yes i got you so you don't have much of a house payment that's great so what's your income so my income i'm right at um 56 000 um it was it actually decreased i was um a caregiver for my brother uh one of my older brothers that has multiple sclerosis but i had to recently make a decision to transition him to a skilled facility, so which kind of decreased.

And I don't care about that money. It was like making the best decision for him. Sure, sure. You did the right thing. Yes. But you know how to be a caregiver. Could you do that for someone else? The thing about it is that I work a full-time job for the city.

Okay. And I make, like I said, I'm at $56,000 a year. But I want to, and I'm a single parent of an adult child, but I want to live like this second half, you know, debt-free, and then leave something for my daughter and my grandbabies. That's cool. I love it. I want you to, too. Yeah, you're probably going to increase your income. You're going to get on a written budget for the first time in your life, and I'm going to help you do all of it.

I want you to go through Financial Peace University, which is our one-year membership. It's nine classes, nine lessons in the class, and the EveryDollar Plus is included in it. I'm going to give it all to you as my gift, and I want to hear back from you how you're doing. I get asked all the time, when in the baby steps is the right time to buy life insurance? My answer is typically now. Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs. That's when they're at the highest risk. And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives as well as stay-at-home parents.

It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance since it's the most affordable way to get the right amount of coverage and not break your budget. Go to zander.com or call 800-356-4282. These are the guys I personally use. Term life insurance is inexpensive, and your family needs this no matter where you are in your baby steps. That's Zander.com. Or call 800-356-4282. Zander.com. Right now in the online store at DaveRamsey.com,

you can save up to 63% on great gifts for kids and teens. These are gifts that teach. If your kids are playing store with play money, then guess what? They're already learning how to spend it and make it. Now is the perfect time to teach them how to spend, save, and give. You can get Financial Peace Junior for only $18.99, and you can get the Adventure Pack for only $45.99, and that includes the Financial Peace Junior, the Storytime Book Set,

and the Smart Saver Bank to help kids. If you've got teens, we've got the new Teen Entrepreneur Toolbox that is selling like crazy, teaching kids how to make money being entrepreneurs. Go to DaveRamsey.com or call 888-22-PIECE to shop, and you'll find some pretty cool stuff going on. Catherine is with us in Tampa. Hey, Catherine, how are you? I'm great, thank you. How are you?

Better than I deserve. What's up? Well, first, thank you very much for taking my call. I appreciate it. Sure. I am having a difficult time. I'm looking at buying long-term care insurance and deciding what I can afford not only today but after retirement. So I'm currently 60 years old.

I make about $90,000 a year. I get like a $1,000 to $2,000 bonus a year, depending on how we do. And I'm in baby step two. I've paid off about $27,600. I have about $10,200 left to go. And I'm on track to do that by the end of January, mid-February. Good. I own my own home.

Wow. It's worth about $280,000, and I owe about $76,900 on it. Great. But I don't have anything set aside for retirement. So that's where when I sit down to try and figure out what I can afford now, I find that numbers come to my head. But when I try and figure out what am I going to be able to keep paying those payments after retirement, I feel kind of lost. What do you do for a living?

I'm a physical therapist. So you don't have any pension or anything then? I don't, no. I worked for myself for a number of years, and that was one of my stupid mistakes was putting it in and taking it out. So I am planning on starting that, obviously, once I finish Baby Step 3. Yeah, I'd get started at 15% of your income going into that. Any more you can. The more you can put in, obviously, the better.

No kidding. But then looking at the long-term care insurance and what that's going to do to your budget as well. What do you make a year? Right now I'm making about $90,000, and then I get a $1,000 to $2,000 bonus a year. Okay. Well, you've got the money then with no house payment or no payments in the world and your emergency fund in place to do long-term care insurance

and probably max out on anything, you know, just start saving like a crazy person towards retirement in addition to that. And then, you know, you're going to have obviously Social Security coming in later, but you're probably working another 10 years. Yeah, yeah, I saw that. I just was trying to, I didn't know if there was a formula, like, you know, buying houses, the percentage rule, is there a...

Well, I mean, the percentage rule is there a well i mean the percentage rule we want to get to is that there's a large enough nest egg that you can live off of the income it creates and so for instance if you had a half a million dollars saved which you could have by then 10 years from now um and it created an eight percent rate of return that'd be 40 000 a year okay and you'd have that plus social security and so um, that would be $40,000 a year. Okay. And you'd have that plus Social Security. But that would be less than you're used to living on. But right now you're also saving aggressively. So, I mean, you might be saving $30,000 or $40,000 a year if you get with it right now.

And so, you know, to get to where you want to be to, that's not a bad idea. Jump on Chris Hogan's website, ChrisHoganogan360.com, chrishogan360.com, and he has a tool on there that's free to use that will help you calculate this. It's called the RIQ, your retire-inspired quotient, and it'll give you some scenarios where you can say, I'm going to start putting this much in, this is how I'm going to end up, and this is how much I think I'm going to need, and this is how I'm going to end up, how close I can get there. And again, it's free to get that set up. It takes about five or ten

minutes to walk through it, and it'll show you exactly where you need to be. And don't let that panic you, but it'll give you some good solid steps to get to where you want to go. And I think you can make it. You're just going to have to concentrate very, very carefully. Open phones at 888-825-5225. Elijah is in Columbus, Ohio. Hi, Elijah. How are you? I'm blessed to be alive.

How are you today? Just the same. How can I help? I'm a first-year college student, and my family moved here from Europe, and we ended up possibly getting our, you know, citizenship, and so I'm not, I can't get any federal aid, so when I was applying, I wasn't able to get federal aid. So thank God I got a good scholarship, and I only have to pay $7,000 a year for four years.

Mm-hmm. So my question is, should I attack this as a debt, or should I do like I've been doing the 10-month plan, just paying $700 a month? You ought to pay for it. Yeah, you're being smart. Stay out of debt. And you're probably doing a little bit of work could go a long way here. Some income would help, wouldn't it? Yeah.

I mean, I'm working only part-time at a pizza place. Yeah, you'd probably make more money delivering for that pizza place. Mm-hmm. You got a car? Yes, sir. Yeah. If you deliver pizzas five nights a week in a lot of areas, you make $1,000 to $1,500 a month. That's $18,000 a year.

That'll pay $7,000. Yeah, so I'm just trying to pay it off. And like you said, I don't believe it. I've been listening to you just recently, and a quick testimony. I heard about you cutting credit cards. And I was like, okay, my parents are working hard. And I was like, Mom and Dad, we are about to transform our lives. So I told them, get all their credit cards.

They laid it on the desk, 12 credit cards. And we prayed, and we're making a decision today to live debt-free. So they cut all the credit cards. It was symbolic. That's so fun. And you said you guys have immigrated here from where? My parents are from Ukraine. I was born in Latvia.

Okay. All right. Very was born in Latvia. Okay. All right. Very cool. Yes, sir. It's been a process, and I'm honestly just so blessed to be here and, you know, to help my parents out. Yeah. You know, I'm getting them on the EveryDollar app, and I told them, like, in 2019, you guys will not pay a penny. Yeah.

I'm helping them and learning a lot. Yeah. I'm helping them. And I'm learning a lot. Amen. Very cool. Very cool. Well, I'm going to send you guys a copy of the Total Money Makeover book for you to give to them to read. I'm proud of you guys. Wow. Very impressive.

And, yeah, the answer to your equation, Elijah, on the $7,000 is pay as you go. And the best way to do that is make the most money possible. And so if you can deliver pizzas and make two or three times what you can make working in the pizza place, then you get in the car and deliver them, and you probably can, honestly. And you bounce up to the front door smiling, wearing a belt with your shirt tucked in, and you greet the people at the door as if they were walking into the Ritz-Carlton, and you'll get tips. Throw a few dog biscuits in your pocket in case they got a puppy,

and if you give the dog a dog biscuit when you walk up, you'll probably get a big tip. So just work the process, man. Just be the most impressive pizza delivery guy that anybody's ever met, and you'd be amazed the kind of money you can make doing that. Or driving Uber. I don't care. But let's do something that makes really good money, not just working minimum wage. And then you'll be able to cover that $7,000,

and you're obviously very sharp with the scholarships you've gotten and the conversation I've had with you. So you're a rock star, dude. You're on your way. Hold on. I'm going to have Kelly pick up. We're going to send you a copy of the book, The Total Money Makeover for Your Mom and Dad dad and you'll be able to read it as well changes everything so what about that

they get out the credit cards 12 of them they pray we're going to make a decision led by their college age son we're going to make a decision. Led by their college-aged son. We're going to change our lives. And chop them up. It's called drawing a line in the sand. It's called I'm not going to live like this anymore.

You're sitting there making $80,000 a year, and you grew up in America, and you can't figure out how to make it. It's because you haven't learned how to draw a line in the sand. You have to decide what you're going to do. I mean, deep down inside of who you are, you have to decide what you're going to do. This is the Dave Ramsey Show. It's time to take another look at your budget. That means scouring every expense and making sure you're not leaving any money on the table. One of the biggest expenses is your mortgage payment. I recommend a quick Churchill checkup. In just five minutes, our friends at Churchill Mortgage can tell you if you could save some cash each month.

They've helped thousands upon thousands of my listeners keep more cash in their pockets through a smarter mortgage. I want you to call Churchill for your checkup and see if you can lower your monthly payment, or better yet, see how you can pay off your house early. Think about it. What could you do with your money if you didn't have a mortgage? Call Churchill at 888-LOAN-200, 888-LOAN-200, or visit churchillemortgage.com for your Churchill checkup. That's 888-LOAN-200 or churchillemortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. David and Rebecca are in Richmond, Virginia.

Hey, guys, I see on my screen you're debt-free. Congrats. Hey, thank you. Well done. How much have you paid off? We have paid off $106,017. Wow, very good. And your range of income during that time? Range of income was $120,000 to $150,000. Cool. What do you guys do for a living? I am in the Army. I'm a logistics officer. And I work for the government as a victim advocate coordinator.

Wow. And what kind of debt was the $106,000? Well, before marriage, Rebecca didn't have anything, and then coming in together, $80,000 was student loans, $15,000 for a car, and $5,000 for a four-wheeler, and then $6,000 for a credit card. Uh-oh. Bought every toy in sight, huh? Oh, yeah. It was a great great while it lasted it seemed then you got to pay it off oh yeah so did you sell anything uh we sold the four-wheeler um that was really about the only big thing that we sold cool okay

so how long have you two been married so we have been married for almost two and a half years now. Okay. So about a year into your marriage, something happened. What happened? Yes. So my husband was actually away for training, and at that time we were stationed in Alaska, so there really was not much to do, and it was in January. And our Internet ended up going out while he was gone, and they couldn't get anyone to come out for about three weeks so during that time i was just reading books and he actually had a dave ramsey book sitting on the shelf and our landlord at the time had mentioned that you know oh you two can be debt free and i kind of just laughed at him like kevin no and i ended up reading the book and my husband came back two weeks later and i had a whole new financial plan

for us it was a shock to him don't leave this woman alone with no internet she's dangerous oh yeah she'll read any book i was yeah it was a definitely a shock that's great fabulous well well done you guys very well done so uh david, when you came home and she was all wired up, you didn't have much choice but to jump in, huh? No, I just said yes, ma'am, and it's been successful so far. Used to following orders. There you go. Oh, yeah. Good. Military will train you to do that. That's good. Very fun. Well, congratulations, you guys. So what is the key to getting out of debt?

This is an impressive amount of debt you reduced. For me, I think the big thing was communication and just dedication to that and just being able to communicate with each other about the frustrations and everything that we're facing together, being able to communicate, really got through it, and just being able to stick to what we talked about together. Yeah. You have to hold tight because it's a rough ride. Yeah, and I would say for us, too, because we were in Alaska,

we actually lived in the North Pole right outside of Fairbanks. For us, we were fortunate. There was really not too much temptation to go spend money on a lot of things. We didn't have a lot of stores. We had a Walmart for clothing. We had Old Navy. That's pretty much it to spend our money on. So it was a great place for us to be at the time. We're really appreciative. And we also credit that to our success to help us learn discipline by not having many options to go out and buy things. So now we just moved to Virginia about two weeks ago. We drove down from Alaska.

We were able to cash flow the trip on our drive down, and now that we have all these temptations again, we don't need them anymore. Yeah. Wow. You've got control of it now. Yeah, exactly. Well done. Very, very well done.

Who are your biggest cheerleaders? Your landlord, I bet. Oh, yeah. Kevin Lincoln up there in North Pole. Both of our parents. And Ricky Carlson, which works for the ACS Financial Readiness with my wife. And he was one of my coworkers. And I would just come to her and tell her about either frustrations or, you know, like, oh, this got done.

When I wasn't listening. Yeah. We were not necessarily seeing eye to eye on things. She would actually talk to both of us, pretty much just to give encouragement. We had a lot of people encouraging us along the way, even kind of smiling, like, okay, well, we'll see if that works. Yeah, another one of my coworkers, I was telling her that we're doing Dave Ramsey, and at the point, her name was the letter.

And at the point, she was kind of done. And she would just smile and come back to work the next day. Rebecca, I did not buy this at the store today because I did not have the money. And that's what Dave would want me to do. Another step. I love it. Yeah, another step. Well done.

Well done, you guys. Well, we've got a copy of Chris Hogan's book for you, Retire Inspired, which we will mail to you, signed by Chris. We're also going to send you a copy of his new book in January that comes out, Everyday Millionaires, because you're going to be one. And that's the next chapter in your story to not only get out of debt, but now to move on and build wealth and be outrageously generous as you go along. Way to go, guys.

We're proud of you. Thank you. Thank you. Very well done. David and Rebecca, Richmond, Virginia, by the way, thank you for your service. $106,000 paid off in 17 months, making $120,000 to $150,000. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! Yeah! Woo-hoo-hoo! This is how it's done. Love it, love it, love it. Man, that's fabulous. Very well done.

Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Katie is with us in Traverse City, Michigan. Hi, Katie. How are you? Good. How are you, Dave? Better than I deserve. What's up? Okay, so I am a newly single mom. I only make about $27,000 a year, which is about $1,800 take-home pay. I'm just having a hard time getting past the four walls and how to get past that and able to take care of my daughter better.

So how old is your baby? She is two years old. Okay. So you said newly single, meaning you're divorced? He actually passed away a couple months ago, so I don't get any child support or anything like that. Oh, my gosh. What happened?

He was on a job, and he got electrocuted. And then he had a heart attack right after that and it just kind of went from there. Oh my goodness. I'm so sorry. Is your family in your area there? Yeah, I'm about to move back in with my mom to kind of help things out. But even with my income as low as it is, if I am to move back out, I would still have the same struggle with the four walls and anything past that.

Yeah. Well, you're right. This is going to be, the difference is you wouldn't have to be paying rent, and that's the biggest item on your list, is it not? Yes, it is. Okay. And so that is going to help a bunch. As a temporary measure, you don't want that to be your permanent game plan.

What do you do for a living? I'm a housekeeper. And then I'm also a volunteer firefighter, so I do that as kind of like a side job a couple nights a week. What does that pay? That's on a volunteer paid-on basis so i usually get like two or three thousand dollars a year from it it's not much no it's not much for two nights of your time that's more like volunteering than it is like getting paid that's not a real part-time job

okay so here's the thing what you're telling and I agree, is that you have an income problem. I think you can make your taking care of your daughter. I think you can feed her, and you can keep gas in your car, and you can live on a budget and watch what you're doing with $1,800 while you're living with your mom. But that's not your long-term game plan. You don't want to be doing that 20 years from now. So you ask yourself two questions about how I can make more money. One is how can I make more money now with part-time jobs that actually pay, not a volunteer job, and that pays well. And it could be a side hustle.

You could start your own business. I don't care. And then the second thing is you start asking yourself long term, what can I do to change my career? What could you be doing two years, three years, four years from now that pay double what you're making? A lot of things, by the way, is the answer. And what would you want to do? And what are the steps to get to be one of those? Do you need to take a class? Do you need to get a certification in something so that you can make more and have a better long-term career. And that's what you need to aim at. You don't want to be doing this five years from now.

You won't be doing this a year from now. This is the Dave Ramsey Show. Are you looking for a real estate agent? Well, we have a group of endorsed local providers. They're people that are local. They provide help with different things, in this case, real estate. And we endorse them, meaning we have vetted them. And they're some of the high-protein, high-octane real estate agents in your area that sell more houses than anybody.

And they have the heart of a teacher. Terry says, because I was so unhappy with my former agent, I contacted the ELP program and asked for ELPs in my area. I contacted Aaron Ken a little late. What a difference the right agent makes. I liked his easygoing style. He wasn't pushy, but he took the time to explain what his agency could do for me to sell my home. Wow, just like that. The right people make all the difference.

If you're looking for an agent, don't hire somebody that just got their dadgum license just because they're in your family or you know them from church. That's ridiculous. You need to hire somebody that's a professional. This is a large asset. It's probably the largest asset you own is your home. So go to DaveRamsey.com and click the ELP for real estate agents right on the front page or DaveRamsey.com slash agents and you'll find one near you. Will is with us in Amarillo. Hi, Will.

Welcome to the Dave Ramsey Show. Hey, how are you? Better than I deserve. What's up? Well, I've got kind of a two-part question. I'm divorced, and I have two kids. We have shared custody. And I know the value of your program,

and so I'm wanting to instill some of that into my kids. And first of all, we have decided that they've come to me and said that they want allowance. And so I said, that's fine. What I wanted them to do is to present to me how much they think they should earn for doing the chores and what they would do in order to earn that and that sort of thing. Present that to me so that I know that they really want it. Well, that was two years ago and they're completely unmotivated. How old are they?

I don't know if I should. I have a nine-year-old and a 12-year-old. And how much time do they spend with you? They're with me about three days a week. Oh, about half time. Okay. Cool. Yeah.

All right. Well, I mean, we can't control what happens at Mom's house. You can coordinate with her to the extent that she wants to participate, but obviously you've learned by now that you don't run things over there. So in no uncertain terms. But so at your house, the way it would sound if I were in your shoes is, boys and girls, here's the thing. I'm your dad, and my job is to give you the tools

to make it out there in the big bed world. And so I'm going to give you those tools. The tools include brushing your teeth so you have some. They include bathing. They include going and doing your homework so that you actually have basic knowledge of graduating from high school so that you can go on and get a better education. So you have to do certain things here that I make you do because I love you and because I'm preparing you to be an adult. One of those things is handling money. And there are four components to handling money.

And we're going to do this together, and it's going to be fun. Or you can choose to not make it fun, but you're still going to do it. So we might as well make it fun. The four components are work, give, save, and spend. And so we're going to sit down here tonight, and we're going to make out a list of what you're going to do around here for work. And I'm doing this not because I need work done, but because I want to teach you to work. Adults that don't know how to work are what's known as worthless, and I'm not raising those

kinds of adults. My job as your dad is to give you the tools to win out there. And work is one of those tools. So you're going to do some things around here. The good news is when you do those things, you're on commission. We don't do allowance. Allowance is welfare. We do a commission.

Work, get paid. Don't work, don't get paid. Okay? So you're going to do these things, and you're going to make a list of them. And if you don't do them one week, I'm not going to punish you, and I'm not going to yell at you. You're just not going to make a list of them. And if you don't do them one week, I'm not going to punish you, and I'm not going to yell at you. You're just not going to get paid. If you don't do them for two weeks, I'm not going to punish you.

I'm not going to yell at you. You're just not going to get paid. The third week you don't do them, I'm going to make you do them because you're going to learn to do things and hold responsibility. At 9 and 12, they can totally grasp this conversation. Do you agree? Yes. Okay.

Then once they make some money and it's in their hands, now comes the fun part. We give some of it, we save some of it, and we spend some of it. And you can decide, and we'll talk that through together. I don't want you to do all of it in one of those categories. I want you to do some in each category, and you can break it up however you want. So what do you want to save for, and what do you want to spend on, and where do you want to give it, and how much? And so around our place, you could do something like five.

It doesn't have to be a lot of money. It's representative because they're not really worth anything. The work they're doing is not valuable. Feeding the dog is not something you would hire somebody to do you know cleaning out the dishwasher is not something you would hire somebody to do mowing the grass might be but you know the rest of them you know there's not much to it so anyway we did stuff like five dollars for five chores you got a dollar a chore right and you know our kids would give a dollar and they would save two dollars and spend two

dollars each week. And we'd have payday on Sunday night. We'd sit down, and I'd put a little dry erase board on the refrigerator, check the chores off. If you did them, you got all $5. If you only did four, you got $4. But you're always going to give some, always going to save some, and always going to spend some.

And we had three little envelopes, a give envelope, a spend envelope, and a save envelope for them to put that money in. And so it's five $1 bills. And you can do $10, I don't care, but break it up into small denominations so they can spread it out into these different things. And these guys are old enough that you can even start to talk about, hey, you're saving for your car. And in our case, I don't know about where you are will financially but in our case we were able to uh to match whatever they saved and so uh we called their savings account 401 dave because they're they got a match on it for their car and so whatever you save two thousand dollars i'll put

two thousand dollars with it when you're 16 you'll get your four thousand dollar car that's a great first car you know a lot nicer car than my first car. Well, actually not. About the one I got. But anyway, you see what I'm saying? You can start to have some savings goals and lay that stuff out there. And it's not going to be perfect, and you have a little grace around it. We're not Pharisees.

But it's just like, you know, I told you to brush your teeth. You didn't brush your teeth. I did. Well, how come the toothbrush isn't wet? Now we've got a lying problem and a toothbrush problem, you know? And this is parenting, isn't it? Yes. Oh, yeah.

You know, we're just constantly inspecting what we expect. Inspecting what we expect. And we're not, you know, every little thing we don't drill down and kill everybody on every detail. There's a lot of grace, a lot of mercy. These are children they're not sending we're not sending them to the salt mines but we also want them to learn these skills they're valuable skills to learn to work to learn to be a giver generosity is generous people are the best people on the planet savers they're the ones that get the things they want and spenders that spend wisely money that they earn by the sweat of their brow spend differently and so that's the system we use and i'll send it to you it's called financial

peace junior it's a box of teaching aids it has a little dry erase board has three envelopes has the instructions and i'll send you a set of that for your christmas present and uh and kelly send them the uh the second child piece too there's another thing, the second set of envelopes, that's the add-on for the add-on kid thing. We've got a supplemental piece if you've got more than one kid. So we'll send you that. That way they've got something to open on Christmas morning, and you can just begin the discussion as part of your New Year thing or whatever. But I just framed it that way.

I framed it like I did a lot of stuff around our house. You know, we're Christians, and we go to church on Sunday. framed it that way. I framed it like I did a lot of stuff around our house. We're Christians and we go to church on Sunday. And that's not a decision you get to make as long as you live there. You're going to go. I mean, we're not mad about it. We're not mean. But I'm going to sleep in today. No, you don't. Not unless you sleep somewhere else. Why? Because a spiritual walk is a requirement in your life to have a high-quality life. And I want you to have a high-quality life.

Not because I'm a big bad dad. That's not got anything to do with it. My whole goal is to make you into the best possible you you can be so you can leave and stand on your own two feet. And we have these discussions about every portion of our lives all the way through, including sassing your mother and so on, all of that stuff. But you can tell, folks, I'm a dinosaur father. Our children turned out because of the fear of their father and the nurture of their mothers. So that puts this hour of the Dave Ramsey Show in the books.

Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.