The Ramsey Show - App - The Mountain You're Facing Won't Climb Itself! (Hour 1)

Episode Date: November 11, 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. Thank you for joining us, America. This is your call and your show. The phone number is 888-825-5225. That's 888-825-5225. To all of you who have served or are serving in the military armed forces,

we want to just take a second and say thank you. Happy Veterans Day. We love you. We appreciate you. The reason I can sit here and say about you happy veterans day we love you we appreciate you the reason i can sit here and say about anything i want to say within and not and not be unsafe and not have some foreign government come down and tell me i can't do that is because of you people uh those that have fought those that have died and those that have died, and those that have supported those that do in the military. We love you.

We appreciate you. And we do salute you here at Ramsey Solutions. Open phones again at 888-825-5225. I don't think I'm going to be able to get through this. The biggest Dallas Cowboys star I have ever met star fan might have been a star i don't know but fan i've ever met in my life is kelly daniels and our associate phone our associate producer phone screener and she is wearing a vikings jersey because obviously the uh cowboys fell to the vikings on monday on sunday night football last night and uh kelly lost a bet apparently so um she's going to be rather hard to work with

today i'll just warn those of you that uh call in it might be a different level of phone screening than you're used to james are you going to be okay in the booth there with the tiger? It's weird. She's just been asking if anyone's from Minnesota. She won't let him on. Oh, that's okay. No calls from Minnesota today. Okay, that's what we'll do.

All right, that works. All right, open phones at 888-825-5225. Randy is with us in New Jersey. Hey, Randy, welcome to the Dave Ramsey Show. Hey, how you doing, Dave? Much better than I deserve, sir. What's up? So I just found out about your program about four months ago from a friend,

and currently I'm in baby step number two. Me and my wife have about $130,000 to pay off. So far we paid off about $12,000. And so I have two rental properties. Okay, they both, I bought them at the bubble. So they both have about $85,000 left on them. And the area is pretty, has not actually actually gone up it's been going down so they're only worth about 40 ahead of the breeze about 40 to 42 you're upside down like 40 grand

on each of them yes ouch so i'm trying to figure out what i should do uh one of the one bedroom condo uh townhome the other one of the two-bedroom. So is this money is not included in the $130,000 in debt you have remaining? Correct, because they're mortgages. So I figured that. Yeah, they're baby steps, so they're $160,000, $170,000 up there. What do you own your personal residence? I own my personal residence $284,000. Okay. And what's your household income uh so i bring in about two ten that's good news okay well uh i i wouldn't worry about those

until you get to baby steps four five six uh but at that point you've got to do an analysis on them. And, you know, investments, they do share an attribute with relationships. And my friend Henry Cloud wrote a book called Necessary Endings. relationship, whether it's a work relationship, a boss, an employee, a loved one, a friendship, whatever it is, when you give up on it is when you lose hope that there is a positive future. Meaning this person's always been crazy, pretty much always going to be crazy, and so I'm just going to have to distance myself from crazy and get a little distance between me and crazy because crazy is just crazy and so that's what you do in the relationship right and because you know we know they're crazy because they said they weren't and that pretty much ensures it so um but then you look at an investment you go okay this neighborhood sucks it's gone down in value it doesn't seem to be going up it's hard to rent property uh and so

this does not have a positive future is what you told me, right? Correct. I mean, if you hold on to it for 10 years, it's not going to help, is it? No, it's not. So I was looking at a couple of options, and one of them, somebody brought to my attention, maybe doing like a short sale. But I wasn't sure how that really works. I actually reached out to one of your elps to uh to figure it out and um they said well they have to look at your i think they they also based on their income

they're like yes i'm kind of pretty good so yeah you're gonna have a hard time you're gonna have a hard time doing that what you might find though is um that i i wouldn't a short sale is pretty much what happens just before a foreclosure see if you're the bank and you're going to take a property back, if you were going to take this property back and the guy that owned it was broke, you're going to own a $40,000 condo. And you had an $80,000 loan on it, so you're getting ready to take a $40,000 bath if you're the bank, right? And so a short sale is just before you would take it back if you you're the bank and the guy's broke, you're not broke.

But if you're taking it back and the guy was broke, you go, all I'm going to get out of this thing is 40. Anyway, there's a buyer standing here ready to give this guy 40. I'll just let him go because I'm not going to get my other money from him anyway. And I'll take the buyer. And it's just before a foreclosure. But it's still writing down the loan and it hits your credit almost as bad as a foreclosure but it's still writing down the loan and it it hits your credit almost as bad as a foreclosure does so we don't want to do a short sale here besides that you probably don't qualify like your elp told you now what i would do is just call them up and go this condo project sucks have y'all are y'all offering any deals because i will i will write you a check if you will discount this

note because your note has got the collateral on it's going downhill you got me i'm better than the condo but i'm i'm also standing here ready to give you some money today and if you'd rather have 60 000 today than maybe 80 000 over the next 15 years on a condo that's worth $40,000, I'll write you a check. And you might get them to discount the note that way, and that would involve no damage to your credit. Okay, so I should do that after I'm out of B-step number two. Yeah, I'd fool with that at baby step six. I'd try to discount your payoff. That's all it is.

Okay. Just based on the quality the collateral sucks okay well you can't always they may just laugh and go nope do you know what kind of loan is fha va or fha va or conventional it's a conventional okay you got a shot then fha or va won't do it because they're guaranteed by the government for 100% of their money. So they have no motivation to discount. But conventional might, and the PMI company that's laying behind it might help with that. And because, you know, there's some probability with a quality collateral being down that someday, even if you had the money, you might be a person lacking in character, and you just walk away. And they end up with it back, and then they've got to chase you down, sue you, and everything else.

So given all of that, you're not that person. You are a person of means, and you are a person of character both. So they don't know all that, and they might just make you a deal. But I do that at Baby Step 6. Thanks for the call. This is the Dave Ramsey Show. If you're going to join this team, we want someone who cares and has a passion about what we do. That's why we trust LinkedIn Jobs. They are the best at matching the right person with the right job. We don't want someone just looking for a nine to five. We want thoroughbreds.

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Pay what you want and get $50 off your first job post. Visit linkedin.com slash Ramsey. Terms and conditions apply. Nathan is with us in Texas. Hi, Nathan. Welcome to the Dave Ramsey Show. Hey, Dave. My question is, should I accept a promotion at work or not? So I'm currently paid hourly. I make $61,000 a year.

The promotion is actually salary, but it's going to put me at 53. And how is this a promotion? Most of the time when you get a promotion, you get a raise. You do, but I guess they saw how much, I don't know, the company saw how much overtime I was getting, so they said, well, we're going to try to cap them off at that, make them exempt. It is a promotion and title, but's it's making less per year so i didn't know if i should accept it do you have a choice

like i mean i do i guess i mean i i would like to maybe negotiate with them maybe tell them hey this is this is what i'm i'm losing yeah thank you for the honor. I am blown away, and I'm sure that maybe you guys didn't do the calculation like I did, but last year I made 61, and I would love to have a promotion and at least make what I used to make. I'm not even asking for a raise. Yeah. Because they're going to get the hours out of you. Yeah, they are.

My uncle kind of made it clear that they weren't really managing overtime as much, and because of that, he had a similar situation that happened to him and his organization. And, I mean, it's just poor management of overtime, and it's something that I have to accept if I'm going to want to move up, basically. What field of work are you in? So I support a back office for a tech industry back office operations it would be from a team lead to a supervisor i i think i would just say uh you know what i'll take my chances

um where I am, but I would love to take this promotion because I see it as a way forward. I can't do that to my family and take a step back and pay. And so if the promotion comes with a break-even, I'm not asking for a raise. I'm asking to break even with what you paid me last year. That is not unreasonable, dude. And if they can't do that, they're a bunch of freaking bureaucrats. I mean, really.

Let me tell you, if you worked on our team, we would not have insulted you this way. I would have just not made you the offer if I couldn't at least break you even with what you used to make. You know? That's just dumb. I guess I was looking for a way to approach them. Yeah, I just think you say, gosh, guys, I'm really grateful.

Thank you. I'm honored by this. I'd really like to take the promotion. All I would ask is that you allow me to break even on what you paid me last year. I don't even want to raise. Just pay me what you paid me last year, which was $61,000. And that's not, you know, it's $8,000. I mean, how big a company is this?

It's, I think they had a revenue of about $3.4 billion last year. What we're discussing here is not unusual, and what we're discussing is not unreasonable. And so I think you just approach it gently, kindly, and say, gosh, guys, I would love to do this. If you're not giving me a choice, then I've got to decide if I want to look for a job. Because you're giving me a pay cut. In a world where technology people are making more every minute than they did the minute before. Back office or otherwise. And so you may want to shop around a little bit. This may give you reason to shop.

But no, I would not take a step this far back because the offer is just weird. If they're this weird, they're not necessarily going to be normal about normal promotions going forward. And so taking this step back. Now, if you give me a guarantee that I can take another step up in six months and I'll be making $65,000 because there's another promotion in the offing based on me taking this step back, we can talk about that. But this idea you're just going to cut my pay and kiss me on the cheek and call it a promotion, come on. No thanks. I mean, that's just, wow. I worked for a company one time.

I sold 78 houses in one year it was a corporation and a builder home builder a hundred years ago they're not even in the business now and um they wanted me to leave the subdivision and go over and sell these condos and um the condos are really a hot property and so it would have caused me i would have been able to sell about 92 of those units probably sold it out in a year it was that hot at that point single-handedly because it was just shooting fish in a barrel it would have been fairly easy and i was in my 20s and um then they come in and i'm like hey this is gonna be a great raise i'm gonna make a lot more money because i'm gonna sell instead of 78 houses i'm gonna sell 92 condos in one year be a great raise. I'm going to make a lot more money because I'm going to sell 78 houses.

I'm going to sell 92 condos in one year. And then they said, oh, your commission rate is a fourth of your commission rate on the houses, which effectively would have been a 50% cut in pay for moving an additional 25% in units roughly. And I said, well, I'll tell you what. I'll just stay over here and sell houses. If y'all want to get, you know, somebody's been selling pampered in the weekends or something and you want if that's what you're paying here and if you want to pay that that's what you'll get and they said no no you're going to take this other thing and I said well I hope not um and they said you really are and I said no I'm really not

and they said oh you really don't have a choice I said well I'm afraid to do the choices that don't work here anymore and they said well that's one choice and i said well that's the one i'll have to take then and so that they ran off their top sales guy i was their number one sales guy and i was a punk kid but i was still their number one sales guy and they ran him off just by this kind of crap right here corporate people who can't do math or that are a little too good at math and forget basic morale issues with the team yeah all right bernice is with us in arizona hi bernice how are you hi dave i'm doing well thank you so much for taking my call sure what's up for you well i will i'm gonna be getting married next month and i was hoping you

could help me settle a little dispute with my fiance he has never had health insurance he's only gone to the doctor once in eight years because he is so healthy it is sick i want to add him to my group health insurance and he just thinks it's a huge waste of money because I'd be going from paying $80 a month to $480 a month. And my fear is that something will happen and we're in baby step two, and he just doesn't have any health coverage. And his excuse is always, he's getting a health life insurance policy, so he said, if anything catastrophic happens, you know, that'll cover my medical.

Just shoot me. Yeah, just kill me off. Yeah. We'll just put you out of your misery. Come up lame. We'll just pop you in the head. Yeah. Oh, my God.

Yeah, I don't want it to come to that. I don't want it to come to that. I don't either. I don't want to have to put him down. What did your friend say? We had to put him down. He didn't have health insurance. He had life insurance, so we put him down he didn't have health insurance he had life insurance so we put him down

yeah i don't want to go how old is this goop this goop is 29 oh okay all right okay listen here's the here's the here's the statistic for you the number one cause of personal bankruptcy is people without health insurance okay that's the number one okay and the number two is credit card debt and miscellaneous debt problems right that we all think of when we think of bankruptcy. But number one is he's walking along, and everything's just fine, and you snap your fingers, and it's $120,000. Because, I mean, if you drive past a hospital, it's $120,000. If you just drive by and wave, give them the parade wave, right, it's $120,000.

Yeah. drive by and wave give them the parade wave right it's 120 grand yeah especially if your hand has a little thing on it says nick says uh intensive care three days that's 120 grand if you got a deal you got a deal at 120 okay so one little thing one little hiccup uh no listen he didn't have a choice i'm gonna thump him on his head you gotta you gotta put him in the corner and go listen we're gonna go ahead and just cash in on that life insurance now go and get this over with no it's absolutely asinine to be walking around without health insurance it's ridiculous it is not a waste of money you cannot afford that level of risk it's nuts now you may want to shop around see if you can not a waste of money you cannot afford that level of risk it's nuts now you may want to shop around see if you can get a better deal than you're being

offered through your plan but you don't walk around without life without health insurance period this is the dave ramsey show Folks, let's cut through the bull. Interest rates are exceptionally low, so you're missing out if you have not called Churchill Mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers do not mean they're free. Churchill Mortgage has a no-bull refinance. This means there are no hidden fees. They will shoot straight with you. Yes, Churchill can offer loans with no closing costs, different down payment options, or of course, a traditional refinance. The key difference is you can trust my friends at Churchill to let you know what you're getting up front so you can make the smartest choice and save the most money.

Go to ChurchillMortgage.com. Do it today while rates are low. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. In the lobby of Ramsey Solutions on the debt-free stage, Rob and Laura are with us. Hey, guys, how are you? We're doing good. Doing better than I deserve.

Welcome and where do you guys live? Invergrove Heights, Minnesota, just south of St. Paul. Oh, they're from Minnesota. Yeah. Like where the Vikings are from. But we're not Viking teams. We brought you some cold weather, Dave. You did. Well, thanks. You can take it back with you when you go. Well, welcome guys and all the way down here to do a debt-free scream. You got it. Love it. And how much did you guys pay off? $246,152. Whoa! How long did this take?

32 months. Wow. And your range of income during that time? Well, we started off at $193,000 and then went up to $247 to 247 and now we're back down to 227 good and what do you guys do for a living i'm a teacher slash uh makerspace coordinator at a middle school in west st paul okay and i work in corporate research at uh 3m oh very good good for you guys so what kind of debt is was the246,000 in 32 months? That's impressive. My gosh, what didn't we have?

So we had 401K loans. We had the mortgage. We had a couple cars. We had some cell phones, too, that we had purchased on time. Of course. So we had a little bit of everything. Okay. Yep.

So you were just normal. I guess so. How long have you two been married? 33 years. All right, good. So you've been just kind of bopping along being normal and making really good money. No big problems probably. Nope, not at all. So what lit the fuse on this bomb? What got you going 32 months ago? I wanted to downsize in-house since our three kids were grown and through college and don't want to shovel snow anymore. And we wanted to be out of debt, quite frankly, so we needed a plan. We needed to get this thing done. Okay, so how'd you stumble upon us? Well, you know, we listened to a public radio station in Minneapolis, and they actually had a money show on the weekends.

And you were on with Tess Vigeland during that 2009 crisis. Yeah, wow. And so I knew about you in the back of my mind. And then we actually started in on the podcast in 2015. And so that's the way we found you. Wow. Okay. So you don't want to shovel snow, so how do you get out of shoveling snow?

Well, if you move into a place where they take care of all the exterior maintenance, you pay people to do that. There we go. Yeah, yeah, yeah. As opposed to moving south. Exactly. There's two ways to pull this off. We're thinking about that, though, too.

All right. Very good. Very good. And so after 30 years of marriage, you say, in the next 32 months, we're going to lean in and knock this out. That had to be a real shift in behavior and in thinking. You know, I came home with the spreadsheet. Imagine that. And I told her exactly what we were going to do.

I didn't tell her why we needed to do it, and I had somebody in tears, so I did all the wrong things. But I cried because I didn't feel like I had it. I was a stay-at-home mom at that time, and I didn't feel like I had anything to offer to this astounding amount of money that we owed. Okay. So is this your house and everything? Yes. Wow. We're totally debt free.

Completely looking at weird people. Yeah. I love it. Congratulations, you guys. All right. So tell people that are listening what the key to paying off $246,000 in 32 months is. What are the keys to getting out of debt? For me, it was communication and both of us being on the same page with the budget.

I had a food budget, which I thought was a budget, but it was like $200 plus a week because I like to cook. So we cut that in half. Oh. And I cut back on my cooking no i thought i was gonna have to but yeah i just had to do some reshopping well sharon and i are made for each other she likes to cook and i like to eat so there you go perfect yeah and for me the key to getting out of debt is um actually being intentional you know you we've got some mountain climbing pictures in the ones that we have here that we sent Kelly. And the mountain doesn't climb itself.

And you can't just diddy bop your way up top of the mountain. Nope. You got to put one foot in front of another and you got to be intentional and you got to have those micro goals on the way up to the top. And so that I think is the thing that we found out, or that I found out, that doing the right thing at the right time for the right reason is essentially very important to getting it done, to getting the job done. How much of the $246,000 was your house?

$150,000 was the house. Okay, so when you got down to that, so you knock out $100,000, and then you got another $150,000 to go, basically. And when you get down to that, that's a pretty big, still pretty good climb in front of you. Yep. And, you know, I actually had a spreadsheet, and I had the steps on it, and we looked at it every month. And so there was a little bit of momentum that I got by looking at the spreadsheet. Sure.

She could care less about my graphs, but, you know, we essentially got there. Very cool. I'd nod. Yeah, yeah, whatever you said, honey. Yeah, whatever that meant. Yeah. Oh, my goodness. Wow, way to go, you guys.

Way to go. Who were your biggest cheerleaders outside the two of you? So, actually, we took financial peace at River Heights Vineyards Church. Yeah. Kent and Barbara Christofferson were our coordinators at that time. We did that one year, and then they asked us to come back and help teach the next year. So we helped taught, and we're still in communication. We still text message, and we're ready to go again, to teach again.

Well, thanks. Yeah. It's very motivating to see people's lives change right in front of your eyes. It is. You've got a front row seat to transformation, don't you? Yep, yep. Very cool. Well, congratulations, you guys.

So proud of you all. Thank you. Well done, Eero. Love it. Here we go, man. You're making serious money. Don't have a dad blame payment in the world. Not a house or anything. That done, Eero. Love it. Here we go, man. You're making serious money. Don't have a dad-blame payment in the world. Not a house or anything.

That's right. Wow. What's the house worth? Probably $350,000. Okay. Yeah. On your way to everyday millionaire status if you're not already there. Already there, Dave.

Yeah. With the 401K was already rocking then. Yeah. Good. Very good. Good for you guys. Excellent. Well, we got a copy of Chris's book for you, Everyday Millionaires, and you'll see yourself

in there, I'm sure, one way or another, statistically speaking, anyway. Good job. Very, very good job. All right. Rob and Laura from Minneapolis area, $246,000 paid off in 32 months, making $193,000 to $247,000 to $227,000. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free. Ha, ha, ha, ha, ha, ha, ha. Love it. Woo-hoo. That is how it's done. Very well done, you guys. Very, very well done.

Well, our question of the day is from Blinds.com, the number one online retailer of custom window coverings. You get free samples, free shipping, and new promos all the time. Use the promo code Ramsey. Questions from Jen in Illinois. Is credit card consolidation better than credit card refinancing well the debt consolidation loans are debt consolidation sometimes when people say that it means a loan sometimes it does not it should only meet a loan but people you know people in the business skunks tell you wrong.

So what sometimes debt consolidation means is you pay us a monthly fee. We'll quit paying any of your bills. You quit paying any of your bills. And after we get our fee collected, then we'll start collecting your money and start settling your bad debts, which all these debts go bad, for pennies on the dollar in lump sums as we save up money from the payments you're paying to us. We get a lump sum, and then we settle a bad debt,

and then we settle a bad debt because we make all of your debts go bad. And that essentially lands in the same category as a Chapter 13 bankruptcy in terms of what it does to your credit. Never do that. A debt consolidation loan is where you get one loan and pay off all the other loans with that loan. You move the debt over to that loan, and I don't even recommend those,

but that would be far better than the other garbage. This is the Dave Ramsey Show. We'll be right back. Melissa's with us in Texas. Welcome to the Dave Ramsey Show, Melissa. Hi, Dave. How are you? Better than I deserve. What's up? Please tell Kelly I'm also mourning the Cowboys loss. I'm wearing a Cowboys t-shirt. Okay, good.

Well, at least misery loves company all right um so my question is that my husband actually lost his job on friday wow and uh yeah luckily we're on baby says four five and six so we do have our six months emergency fund um but my guess my question is like how how can i motivate him to not, like, feel down? I know this weekend he felt really down. But I don't want him to stay down, and I don't want to become, like, a nagging wife, you know, because now he's home, and I'm home too. And also, like, with insurance, do we buy that COBRA insurance to cover us in the meantime?

Or what should I do? Okay. Yeah, she bought the COBRA insurance. insurance to cover us in the meantime or um what what should i do okay um yes you buy the cobra insurance um what happened to his job he's been a contractor he works in it actually so he's been a contractor for four years now and the contract ended but the project got moved so it wasn't expected it was sudden it was sudden. It was sudden. Okay. And what kind of IT work does he do? He's a data analyst. Okay.

And so it was just abrupt, and he's a contractor, so there's no severance or anything? No. They just said, we're done? Yep. Okay, cool. But they were providing insurance to the contractors? Yes, because he works for a contracting company. So the contracting company provided insurance.

I see. Okay. And they can't place him really fast then? Yeah, so they've already reached out to him, and they're going to be looking for other jobs. But he's also thinking maybe this is a good time to find something full-time. Yeah, I think so, too. And not be contracting anymore.

I think so, too. So here's the thing. There's not a category of IT much hotter right now than data analyst. Data analyst, data engineers, because the movement of data is going to drive business success in the coming five to ten years. And businesses that understand that are going to stay open and those that don't are going to close. And so it's the fastest growing category of jobs in the positions we're hiring

is around the issue of data, data engineers, data analysts, so on. And, you know, even Salesforce administrators, which helps you gather the data and anything we can do in marketing to gather data. Because the more we know about our customer, the more we know how to help them. And that's what it amounts to. And so that's the world that he's in. So the good news is he is in a cutting-edge, white-hot space. And so when I hear that and I hear he lost a contracting job,

my answer is good because he's probably going to get a raise and a permanent position. What city in Texas are you in? We are in a suburb of Dallas. Yeah. Okay. and a permanent position. What city in Texas are you in? We are in a suburb of Dallas. Yeah. Okay. So here's my prediction.

He is employed at a higher rate than he was employed within two weeks, but probably by Friday. Now, there's only one caveat to that his mindset because obviously this was not personal obviously this was not a political thing it wasn't a personality thing it wasn't his lack of skills it wasn't anything they actually executed the project faster than originally planned and so it ended his job faster than originally planned. That's what you told me. Yep. There's no negatives here. And so what this means is huge opportunity.

But if he wants to sit around and suck his thumb for two weeks, he's going to delay this, and he's going to make himself not as marketable because when you go on an interview and your thumb's all shriveled up, it messes up the interview. Yep. You follow me? Yes. It's all about attitude so um i'm going to send you a copy of ken coleman's book proximity principle and he's going to get on ken coleman's website tonight and download the interview pdf and the how to put a resume together Together PDF that's all free, and he's going to do that before he goes to sleep tonight.

And don't tell me that there's something on television he needs to watch. There's not. Perfect. Today. Today. Listen, this is like, oh, goody, goody, goody, goody, goody, I get to do this. That's the mindset versus I just ghost my job i got kicked in the teeth no thank god because you know what you what what did he used to make 125

so he's making 150 in two weeks and he has a permanent job with full benefits and he has upside potential okay and if that if i'm wrong if i'm right then why wouldn't you say thank god i lost that other job yeah oh goody goody i've been trying out oh goody goody goody i get to do this this is not an antiquated position these in this is not a a low you know and you're not out in the middle of some cornfield somewhere where you're not in a metro area to plug into or a data engineer a data analyst i mean if you were going to be in any city in america this is probably one of the ones you'd want to be in dallas nashville austin these are these are technology hubs. Seattle, right?

If you're going to be a data analyst in one of those cities and lose your job, that's where you'd want to be. You wouldn't want to be in wherever, right, in the middle of some rural situation because, you know, there's not a big need in a 400-person town for data analysts. But in a metro area, this is a highly sought after role and so i think he's in great shape hold on i'll have kelly pick up and we'll send you a copy of the proximity principle download those two pdfs tonight one on interviewing one on how to do the resume at the king coleman show.com or king coleman.com and you're going to be there really, really, really cool stuff. Great job. Open phones at 888-825-5225. Chris is in Florida.

Hi, Chris. How are you? Doing pretty good. How about you? Better than I deserve. What's up? So last year, my wife and I decided we were going to take your class like in an actual class. We bought the DVDs.

We've been plugging away with that for a while. And around that time, I was actually looking to reenlist and I got a bonus for that. So we used that to pay off all the debt that we had. I mean, it was only like $3,000 in credit card debt, but we paid all that off and we put $10,000 into savings and I put another $3,000 into a little CD because I didn't know what I wanted to do with it just yet. And that matures this December. So I didn't know if I was jumping the gun on thinking about taking that CD and putting it into a Roth IRA because the $10,000 doesn't account for a rent.

My wife and I are currently living on base at the base that we live on, so I didn't account for that when I was accounting my three to six months of living expenses. What's your household income? So it's $60,000 with the basic allowance for housing, but since we live on base, I don't see that it goes directly to them. So I'd take home is like $30,000, $33,000. Okay. Here's the thing.

The three to six months of household expenses is a guideline for how much to have in your emergency fund. But it is not just about losing your income. It could be your transmission goes out in your car. It could be somebody's sick. It could be your mother passes away. your car it could be somebody sick it could be your mother passes away she's broken you have to pay for an eight thousand dollar funeral or something like that okay these are you know when life happens money being around is handy that's what it's for now some of it is we use the three to six months expenses because that's a good

guideline because one of the things that happens is like my last caller people lose their job okay and so uh no i i think i would want to be at 15,000 in your case and so i'm gonna i'm gonna go ahead and get that three and put it in your emergency fund and then put another two with it and then i'm going to start my baby steps four five and six from there because i've i've never run into a situation where somebody goes oh i get too much for emergencies i mean when the emergency happens i've never run into that now sometimes i hear people and they've got a hundred thousand dollars in their emergency fund which is silly you know that's not that's too much but but three to six months of expenses you know within the three to five thousand dollar range like that you're not going to ever really be mad about that

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