The Ramsey Show - App - The White House Won't Fix Your Life! (Hour 3)

Episode Date: September 21, 2020

Insurance, Debt Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. Open phones at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Randy in Baltimore, Maryland. Hey, Randy, welcome to the Dave Ramsey Show.

How are you doing, Mr. Ramsey? Cold well as well for you, and thank you for taking my call. My pleasure, sir. How can I help? So, currently I'm 23 years old, and I earn about $60,000 a year. And I feel like right now I'm maybe making poor financial decisions. So my question is, what advice would you give someone my age that wants to learn more about making smart financial decisions and understanding things such as exactly what is a mutual fund,

what is a Roth IRA, What is a traditional IRA? And how can we make these things work to our advantage? Wow. And also, what is anything we should do, you know, we can do right now at our age so that we can build wealth? So, you know, 20, 30 years down the road, you know, we can live a comfortable life. Yeah, good for you. Very cool. What do you do for a living, sir?

So, I'm a travel analyst working for a contracting company. Okay, very good. Well, really, really good questions, Randy, and very wise to ask those kinds of questions. So what happened to me was when I was your age, I started buying and selling real estate, and I got rich. I ended up with about $4 million worth, but a whole bunch of debt. And the short

version of the story was the bank called our notes and we ended up losing everything going completely broke and um by the time i was 28 i was bankrupt so i was a millionaire by the time i was 26 by the time i was 28 i was bankrupt at the bottom of that mess is the only time I got enough wisdom to ask the same questions you're asking. I started saying, okay, how does money work? Because apparently I don't freaking know. I made a lot of it, but I couldn't keep it. So I had something wrong with my formula. How does money work?

And so I went on a quest to try to figure out how money works. Now, you're doing a very wise thing, and that's what I did. I started interviewing people who seemed to know. Now, what I did was I said, I don't want to talk to people who have theories. I want to talk to people who have money. If you want to be skinny, talk to skinny people. If you want to be married, a long, fruitful marriage, don't talk to people who have been divorced 16 times and wrote a book about it. Talk to people who have been married 67 years and didn't kill each other, which is, by the way, quite an accomplishment.

So talk to people who are successful in a field of endeavor that you want to be good at and ask them what are they doing so i talked to old rich people not young rich people i had been him i didn't want his opinion he was obviously stupid he went broke i had a lot of opinions when i was 26 and i was a millionaire but they were obviously wrong so i didn't want get rich quick dudes opinion i wanted people who had no hair or gray hair and had money i I don't want your broke brother-in-law's opinion, and I don't want a professor who's tenured and is broke to give me an opinion about personal finance class. No, thank you. It's not appropriate. I wanted to talk to old rich people. And as a Christian, I also started studying what the Bible says about money, which

is weird, I know, but it's there. And there's a lot of stuff in Scripture about money, but it's all kind of common sense. It's not much of it's mystical or spiritual. Most of it's just like the borrower is slave to the lender. If you ever had a big butt car payment, you know that's true. You know, you don't have to really think about that one. Duh. If you ever had a car repoed, you know the borrower is slave to the lender, right?

If you've had Sally Mae in a spare bedroom for 28 years, you know the borrower is slave to the lender. You are slave to that woman. And she's ugly, too. So, I mean, you start to know those things. So I started comparing those biblical ideas with what the old rich people said, and they aligned perfectly. And really they became, they really are what's called common sense. But it turns out common sense is so rare in our culture that it's like having a superpower. And so what I started doing was following these basic, really primitive principles to the nth degree. I don't borrow money. When you don't have any payments and

you earn a living, you know what you have? Money. So I quit borrowing money. I don't have any payments. What's the best interest rate on your credit card? I've got the best interest rate on all credit cards. I don't have one. I don't own a credit card. I haven't for 40 years. And I'm worth hundreds of millions of dollars. Go figure. Good Lord.

The building we're sitting in is worth $100 million. Unbelievable, you guys. So seriously, this stuff works. I've been doing it for 40 years. So how do you learn about things, Randy? The way you're asking is very, very smart, is you learn about them from someone who's done it before. The stuff we teach on how to do a mutual fund, what a mutual fund is,

how to invest, how to get out of debt, how to be on a budget, if you'll follow that plan exactly, it is without a doubt the most proven plan in the world. We've led more people out of debt and more people into wealth than any other organization on the planet right now. By far. Nobody's even close. And there's other people that talk about stuff, but we've had millions, tens of millions of people

not only get out of debt, but we've made millions of millionaires and showing people how to do this stuff. So I'll show you how to do it. It comes into a thing called Ramsey Plus, and you go through Financial Peace University, and you get on a budget with the EveryDollar app, and you start following your progress with the Baby Step Tracker app, and we will show you exactly step by step.

Now, here's the mistake everybody makes, Randy. They start where you started and where I started when I crashed. From the wonderful, wise place of humility, you're saying, I don't know how to do this. I'm making bad decisions. I want to make better decisions. That's the beginning of wisdom. But as soon as things start going right,

most people become geniuses. And they decide they have to fix a plan that has helped millions of people, and instead they're going to do their version. And so they start doing Ramsey-ish instead of just doing what the freak they're supposed to be doing. Why is this hard? But it's human nature. We get cocky as soon as we're not humble anymore.

And so you're starting from a really good place. If you'll just stay there and do exactly what I show you to do, you're going to be wealthy. It works 100% of the time. If you work and earn a living and live on less than you make and stay out of debt and build an emergency fund and invest 15% of your income and get your mortgage paid off in 15 years and you keep putting money in your 401k and getting your match and doing your Roth IRA,

100% of the time you're going to become wealthy. If you don't do all the other stupid stuff, and they're stupid around every corner trying to trip you. But you just got to know where stupid is and go, nope, nope, not playing with that. Not playing with that. Not doing that. Nope,'t nope nope nope that's going to get me there so hang on i'm going to sign you up brother for ramsey plus i'm going to pay for it it's one membership that coaches you step by step through all of our best products and you're going to be an expert on money and i'm going to walk with you for the next decade in ramsey plus showing you how to do it and i'm going to give you the first I'll see you, sir. This is the Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs,

whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas. meeting health care costs, whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up. They could have faced a huge financial setback, but thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually support each other. CHM is the longest serving health cost sharing ministry and is a Better Business Bureau

accredited charity. It's Christians helping other Christians, and it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. Raquel is in Boise, Idaho with us. Hi, Raquel. How are you? I'm good. Thanks. Thank you for taking my call.

Sure. What's up? So I have two daughters. One is 23 and one is 12. And we are actually going to do a will. And we're trying to figure out how I can split, you know, their inheritance. You know, like how fair is it to be? Because my daughter is an adult and she's normal.

She's not very good with her finances. And I just don't want to leave my minor, my 12-year-old child, if something happened to us, to a bad situation. Okay. All right. So how much money are you prepared to leave to these two children? Well, we do have life insurance, and we have our IRAs. How much life insurance?

I think $350 for my husband. I'm not sure. I think I have $300, too. Okay. And so if something happened to both of you, that would be $650,000. Otherwise, the other one would be there to take care of the 12-year-old, right? Right. Okay. And then how much is in IRAs and stuff? The IRAs, probably in total, maybe $200,000. Okay.

All right. So $850,000 give or take. So we'll call it $900,000 that you would be leaving to two kids. A 23 and a 12. So you can break it up however you want. It's your money. Okay? You can decide. Now here's some ideas.

The 23 year old should be able to take care of themselves. So our primary job is to make sure the 12-year-old is cared for with this money. Agreed? Right. Okay, and so if you left the 12-year-old $500,000 to be invested in mutual funds, and if it created $50,000 a year, that'd be 10%. That'd be more than enough for someone to raise your 12-year-old and leaving them plenty of money to get them through school, and they'd still have a lot of money when they graduate from high school, the 12-year-old would, right?

Okay. I just made that number up. But $50,000 a year would go a long, long way. Now, if something happened to both of you and your husband, who would take care of the 12-year-old? We are actually more than likely his brother and who would take it and who would take care of the money on behalf of the 12 year old according to your directions probably his brother too okay i would prefer it's not the same person

but it's okay if they're very, very mature and very trustworthy. Now, so what we're going to do is your will is going to establish that upon your death, a trust with $500,000 going into it is established on behalf of your minor child. Okay? You don't have to have a trust until you die but if both of you die before this child is 18 500 000 of your life insurance money will go into this trust okay the trustee has to go along with by law unless they break the law what the trust says that the money's used for that's but i would prefer that to be someone different than raising the child just so there's trust says that the money's used for. Okay.

But I would prefer that to be someone different than raising the child, just so there's no conflicts. Oh, okay. Makes sense. So the person managing the money is giving the money to your brother-in-law, and it sounds like we're going to give him $3,000 a month for care and feeding of the child, and then if the child has a medical issue, you could pull money out of the trust. If the child needs a car at 16, they could pull a little money out of the child and then if the child has a medical issue you could pull money out of the trust if the child needs a car at 16 they could pull a little money out of the trust if the child wants to go to college we could pull a little money out of the trust but otherwise the trust sits there and produces income to raise the child with to give to your brother-in-law as child

support okay does that make sense yeah okay and that's how we had our setup at our house when our kids were little. Now, we lived until they grew up, so we don't have that anymore because our kids are grown. But if you have minor children, that's what you do. Now, with a 23-year-old, you could leave them the rest of the money if you want to, and you can either put stipulations on that or not. You can either put that into a trust or you can just leave it to them but if you put it into a trust if you hear people say okay you can have a certain amount now a certain amount when you're 30 they usually use a trust for that it goes into a trust

and it sits there for a little while and you can put requirements on the 23 year old that they get their crap together that they go through financial peace university that they stay out of debt in order to earn the money from this trust you can do that if you want to with a trust. It just depends on how much influence or control you want to exert from the grave. Okay. I'm not afraid to be controlling with my money. It's a loving act for the people I love. I'm not giving money to one of my kids if they're doing heroin. You're out of the will. I'm not going to finance your death just because you hit the DNA lottery and you happen to be a Ramsey. And so behaving is literally part of being in our estate plan as grown adults. If you're out screwing around and goofing up your life, I'm not financing that because that's me financing your destruction even in my death. No thank you. That's the ultimate in enabling. So I've got a pretty

controlling estate plan. Some people don't like that, but this isn't your money. It's my money, so shut up. You can do whatever you want to do with your money. That's the thing. So you do what you want to do and lay it out that way, but that's the way to do it is lay out a family trust for the child that is formed, for the minor child that's formed upon the death of both of you, and that will work very well. And then you need to retitle the beneficiary once you get your will done. Right now the beneficiary is some person probably on your life insurance. It needs to be named the trust. So the Raquel Trust, or whatever your trust is called, needs to be the beneficiary of $500,000 for your 12-year-old.

So, and it's a secondary beneficiary in your case because you're probably the beneficiary of your husband. He's probably the beneficiary of you. If something happens to both of you, $500,000 of that $650,000 on the payer goes to the Raquel Trust for minor children, your one 12-year-old, and that's how you lay it out. Secondary beneficiary if something happens to both of you.

But you've got to get all this done and wrapped up and put a bow on it. Get a proper will done. As a part of the will, you can put these terms of these trusts together. Mama Bear Legal Forms can help you with every bit of that. They can help you put every bit of that together. It's really not rocket science. But it does require some effort and bothering to do this. And when people don't, that's when everything gets screwed up. The uncle gets the beneficiary. He's got $650,000 in his name with no legal obligation whatsoever to take care of your child. And he goes and buys himself a lake house.

Happens all the time. Well, I'm taking care of this kid. I guess I can use this money however I want. And people get into the rationalization of stupidity and immoral things all the time. So you need to button it up legally, and that way your child is taken care of, and everyone is on the same page of exactly what's going to happen, when it's going to happen, and how it's going to happen. Folks, I've got to tell you, a lifetime of work can destroy your family's relationships.

A lifetime of work can be dissipated and lost by not doing a little bit of estate planning. Getting a will, getting life insurance with the proper beneficiaries on them, getting these trusts in place. It takes time, and it's morbid as crud because what we're talking about is dying. I mean, it's not a pleasant topic. I want to sit around and talk about my death all the time. We have a big meeting here once a year. I call it the Monty Python meeting where we go over what happens this year if Dave dies. Inside the company, inside the family, what happens to these assets, that assets, how's it going to work, how's even the press releases going to look.

We have this whole day, if Dave dies this year, review. And I call it the monty python meeting because i always yell out i'm feeling much better you know so um because i'm not dying it's not yet i hope uh so anyway but yeah but it's it's necessary i mean it really is morbid as crud we laugh about it but we have to laugh to keep from going oh gross i don't talk about dying but you're gonna die and it's part of being a grown-up to have a will do you know 78 of americans die without a will well this is why there's broke people because all your work gets given out or dispersed to stupid people according to some judge rather

than your last will and testament. MamaBearLegalForms.com, boys and girls. This is the Dave Ramsey Show. Hey, guys. At The Dave Ramsey Show, we really value your input. It helps us to know what's important to you so we can deliver relevant content to help you crush your money goals. We just launched a brand-new survey, and we'd love your feedback. It only takes a few minutes, and you'll be entered to win a 100 amazon gift card no purchase necessary take the survey at davramsey.com slash survey or text

survey to 33 789 Around Ramsey, our favorite thing is to have someone on the debt-free stage in the Ramsey Solutions Lobby to do their debt-free scream. There's only one thing we like more than that. It's when one of our own family members here at Ramsey is doing their debt-free scream, and that's true right now. Austin Lynch is a paid media specialist with us, been with us about a year and a half. He and his wife, Taylor, are here to do their debt-free scream. Way to go, guys! Thank you.

Wow! So how much have you paid off? $30,000 in 16 months. All right. Very cool. Very cool. you paid off uh thirty thousand dollars in uh sixteen months all right very cool very cool okay so you started doing this about the time you started here yeah that's right just about a month or two beforehand and um yeah we definitely knew about the plan before then um right when i graduated college uh in chattanooga my dad actually bought me a copy of Financial Peace, the book. Oh, wow. He did envelopes, the whole thing. Yeah, I did.

And, you know, I let the book sit on the shelf for probably a little too long before I opened it. Oh, there's that. Yeah, so, but, you know, we did eventually open it, and you know, a couple months into really getting going, I was blessed to, you know, have the opportunity to come and work here full-time.

So how long have y'all been married? Just over two years. So this was your first job out of school then? For me, no. This was actually my third job. So I worked a little bit in Chattanooga and then when Taylor and I got married, moved to Nashville to

get married here and establish a life here and then just wanted to find something that was a better fit and okay this was certainly that that match yeah and so when you join this team i mean we it's not like big brother like we check your wallet or something but there's just all this positive peer pressure to be smart with money so you got on you got got in gear yeah it's kind of hard not to be you know intense about the plan when you're around everybody that's supporting you uh like they are today yeah you got a whole team out here not working just to support you. Yeah,

this is great. Proud of you, man. Way to go. What kind of debt was this 30k? $25,000 was student loans, 3000 was medical and 2000 was credit card. Okay okay so tell me the story go back to okay 16 months you said right what exactly was the conversation like taylor that says austin says okay he's working at this place and we're gonna do this how did that go down tell me how that all sounded um well when i was in high school i took a financial class from you on the little TV, the DVD system. So his dad, your high school, I mean, we were all over you guys. So it wasn't super unheard of, and it wasn't something that I wasn't familiar with, but it was something that scared me a lot. I have a lot of friends who have just accepted their student loans and that they may die with them and they're cool with it.

And that really scared me. So honestly, like my my friends negativity kind of like aided towards the positivity of, you know, got to do something about that. Just watching it rot is not a plan. Yes. No, Not at all. Very cool. So there's the fear of doing it, but there's doing the plan, but there's also the fear of not doing it. Yes.

Definitely. Okay. Which outweighed the fear of... Yeah. Yeah. Obviously you did it. Yeah. So there we go.

Yeah. Very cool. All right. So you guys sit down. You've been married... You've not been married a long time. You get into a new town. You sit down.

Okay. We're going to attack this. We're going to do this thing. I'm working at this place and really going to do it. So what worked and what was the struggle? Well, you know, we were both from Nashville, Franklin area. So, you know, when we moved back, we were around a lot of our friends. And so naturally, you know, having to say no to a lot of the opportunities, people wanting to go on trips, people wanting to go and, you know, do things on the weekends that were just out of the budget.

And, you know, not every single time they understood. And, you know, it's just something that we had to sacrifice. And, you know, standing here today, I can pretty clearly say that it was worth it. Yeah. Yeah. It's kind of like John Deloney says, they don't have a vote. Yeah, exactly. They think they do, but they don't have a vote. Yeah, exactly. They think they do, but they don't have a vote. They think they can shame

you into being stupid, but come on, you don't have a life. Come on. They did get used to it. They got used to us saying, hey guys, why don't we just hang out at home? Why don't we make dinner together instead of going out to a bar or something like that. They got used to it.

As we came around the final stretch, too, we had a lot of support from them as well. And it's not like they were pushing against the idea as much as they just wanted us to be a part of their plans. And it just wasn't a part of our plans. You're just countercultural when you're doing this stuff. It's hard. It's hard to say no. That's right.

So you tell people the key then to getting out of debt is being able to say no, number one. What else? For me, the biggest thing is just finding ways to increase your income. I mean, you always say the best tool to getting out of debt is your income. And just finding ways, whether that's just extra small jobs on the side or whether it's freelance. We really looked for those opportunities everywhere we could, and that's absolutely what helped us kind of speed along the process. Yeah.

In your field, you can do that a lot. Yeah. And not interrupt with your day job. Exactly. So that's very good. Cool. Good for you guys. Very well done.

Proud of you. Thank you. Proud of you. So your biggest cheerleaders were your families, I'm guessing. Yeah, I mean, we had a lot of cheerleaders. Yeah, like you've heard, both of our families were kind of on board from the get-go. And obviously, I've had a lot of cheerleaders here, so that kept us going the whole time. And our friends were supportive.

So we were blessed to have lots of people cheering us on. Now that you did it, how old are you two 26 you have no debt that's right you're so weird isn't it great isn't it great how's it feel weird surreal it feels pretty dang good yeah free yes free yeah you can breathe at a different level yeah and you've learned to control this issue called money yes absolutely if you can do that you can do anything i'm so proud of y'all so proud of you well done very very well done all right austin and taylor from nashville thirty thousand dollars paid off in 16 months. 26 years old. They're not a victim of the student loan crisis.

No, sir. They are victors. They did it. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!

Woo-hoo-hoo-hoo! Wow! I don't care what you say. That's fun. All you hear about in the news is the millennials this and the millennials that. I got to tell you, I got a whole building full of millennials. I love millennials. The ones that get it, they get it more than any generation's ever got it.

The ones that don't get it, they're easy to identify and you can get rid of them. So, I mean, there's just two types, awesome and sucks. And I just got a whole building full of awesome. And it's absolutely incredible. I mean, you take a 26-year-old like that, they can do anything, man. It's absolutely incredible. We are so proud of you guys. Well, well done.

Very well done. So cool. Yeah, this generation is not a victim of the student loan thing they're a victim of some of you politicians trying to convince them that they need you they don't need you nobody needs you all of you ought to just go home and send your money back because we need our money back. Because we've been ripped off. Everything we paid you was a bad investment. All you politicians.

It was absolutely horrible. If you worked for me, I'd fire your butt. For incompetence and crooked. And you're everywhere. We don't need you. What happens in the White House is not going to affect your life, people. It's what happens at your house. I'm old. I've existed under Democrats and Republicans. I've made good money and lost

good money under both, and neither time was it their fault. I've never been successful because someone from Washington sent me any money. I've been successful because I just looked down and said, this is going to happen when I do it. And that's what this generation is doing. They realize wisely that the authorities are stupid and that it's not up to them to fix your life. It's up to you to fix your life. You are the secret sauce, baby. You're the secret sauce in your life. And there's not anything you can't do until someone tells you that you can't do it and you believe them. And then you can't do it. You don't need Donald Trump and you don't need Elizabeth Warren and you don't

need Joe Biden to fix your life. Get you a mirror, baby. You're the secret sauce. This is the Dave Ramsey Show. Our scripture today, Matthew 5.16 In the same way, let your light shine before others so that they may see your good works and give glory to your Father who is in heaven. Ruth Bader Ginsburg said, fight for the things that you care about, but do it in a way that will lead others to join you. In these divisive times, that was a good word. Rest in peace, Miss Ruth. Wow. Wow. Fight for the things you care about,

but do it in a way that will lead others to join you. That is a lost art. Nowadays, people feel like if someone doesn't agree with them, someone doesn't agree with you, they must be destroyed. You can't merely disagree with someone's ideas. You have to destroy them. We have to cancel them. The cancel culture is out there.

I don't like the way you phrased that tweet, you crazy boomer. So I'm not going to listen to you anymore. You're lost because I'm not going to listen to you anymore your loss because i'm not going to shut up i'm still going to keep doing exactly what i was doing you can cancel me but you only canceled me from your life because see i own this and i don't get canceled unless I cancel me. Isn't that neat? I can't get fired unless you fire me from your life. But that's just your loss then because you're narrow-minded and stupid. So I got lots of people that I don't agree with things with them on things that I can learn from. But I have what's known as the ability to think instead of single bipolar thinking where I are,

you know, or I just have to be either. I have to be an orange man, bad orange man, bad, you know, I mean, you people lose your minds out there and you know, one little thing and you're just like looking for a reason to be pissed off about everything. My gosh, Ruth Bader was on to something here. Fight for all the things you care about, but do it in a way that will lead others to join you. This is so, this is the most polarized time, and I don't know exactly what's caused it, but it is really polarizing. And you would think something like COVID could get people to work together and care about each other. And in pockets we have, we've done a good job with that but man I've just had to turn off the television it's just dumb it's just dumb so fight fight for the things you care about

but do it in a way that will lead others to join you so if i can get you to join me i want you to join me if you don't if you're mad at me you'll just have to go away but we're going to do what we're going to do because the stuff we teach works it's right and if you don't like something about it that's just your fault and we'll deal with that julie is with us. Julie is in Montgomery, Alabama. Hi, Julie. Welcome to the Dave Ramsey Show. Hello. Thank you so much for taking my call.

Sure. How can I help? We are currently in baby step two. We have paid off four credit cards so far and we still have two that are right at $6,000. And my husband has a student loan of $14,000 that we're paying back. The problem is we are stuck in a van. There has been a limit, and we got it off the lot. We still owe $28,000 on it.

It's a 2018 Chrysler Pacifica. And we have tried to take it to the dealership to get it worked on, and they keep saying that they're a week behind. And, yeah, we can't stop driving because we do have a life to live. And so we're right at the warranty issue, running out of the 36,000 miles. So my husband and I are trying to get out of the van. We need a bigger house. We have four small children, 10 and under, and we need a bigger house.

No, you don't. No, you don't. You have a financial crisis. You don't need to be talking about a bigger house. You're broke. You're broke and can't breathe. This van is killing you, isn't it? Yes, sir, it is, and I wish that we could get away from it.

You need to get away from it. How much is your car payment? Right at $550 a month. Good Lord. And what's your household income, honey? About $50,000. And you owe $28,000 on one van. What do you owe on the other car?

We don't. Okay. We own it. All right. Well, the van's got to go. Now, if it needs some warranty work and they're bowing up on the warranty work, you need to lean into them and tell them they have one week to get it fixed or you're getting an attorney.

Okay. They got to fix a freaking car, period. Right. Now, and then let's figure out what's the car worth? Have you looked it up? Right around $15,000. $15,000? Yes, sir.

Who said? Well, we tried to go and try to get out of it. Yeah, well, that's a dealer who said that. Okay, you need to go to kellybluebook.com, kbb.com, and look up private sale on this van. You need to get it fixed, have someone detail it, and get the kids' crumbs out of it and the smells out of it, and get it ready to sell.

Get the tires blacked up, shine that puppy up, and it needs to go bye-bye. This van's probably worth about $20. Who do you owe $28 to? Who do you owe $28,000 to? Who do you owe $28,000 to? Max Credit Union. Oh, good. Okay.

Trot yourself down to the credit union and tell them that they have a $20,000 car loan with an $8,000 unsecured loan, and you need to sign a note for the $8,000 mess you've made and sell this car and then go get you a very, very cheap car, get yourself completely out of debt, and then move up a little bit in van. But don't you ever go buy a $30,000 van again in your life when you make $50,000, even if you pay cash for it. I won't. Even if you pay cash for it.

Yes, sir. You totally impulse this and use your kids to justify it. Right. I know, because I used to do crap like that, so I'm picking on you. All right? So, yeah, you've got to get this thing shined up and get it sold. Get the warranty work done, get it shined up, get it sold. You're going to have to sign a note for the difference.

You guys are going to have to work your butts off and get you a little used car that you pay cash for to get around in. How many kids you got? Four. A little used van to get you around in then. We're in a $5,000 van instead of a $28,000 van. Right. And you pay cash for it or you get it paid off really, really fast. Then when you have no car payments, you start to breathe again and you're going to be on a budget.

I'm going to show you how to do that and we're going to get you to where you can move up in car and get you about a five or a ten thousand dollar car for the rest of your life that you pay cash for or until your income comes up to justify more car here's the thing cars go down in value like a rock you've noticed that right thirty thousand turned into twenty in this discussion while i was having it right okay so you lost ten thousand dollars or so on this transaction you cannot afford to lose that kind of money when you make 50 grand so the so the rule of thumb is do not own things with motors and wheels or wheels that have more that total up to more than half your annual income. So all of your stuff, including lawnmowers that has a motor in it, does not add up to more than $25,000 even if you pay cash

because otherwise you have too many things going down in value for you to be able to win with money. So, Julie, I don't know if you're going to do this or not, but if you do it, I'll show you how to fix it. And if you'll hold on, I'll have Kelly pick up and we'll get you signed up for Ramsey Plus. And you and your husband go through Financial Peace University and the Ramsey Plus and get in the EveryDollar app. Get going. Get the Baby Steps tracker going. And we'll get the groups around you to help you do this stuff and show you how to get this thing sold. But you don't need to sell it for $15,000. You can sell it for $20,000 or whatever it's worth, private sale.

It's probably $20,000 or $21,000 if a dealer's trying to snake you it. Probably the same dealer snaked you in the first place. But listen, it never makes sense to buy a $28,000 van when you make $50,000. There's zero times that that works. Zero. Never does that make sense. You can't afford that car when you have a $50,000 household income. There's no shame in that. It's just you can't afford a $300,000 car either

when you make $50,000. There's just things you can't afford. There's always things, no matter what income you have, there's always something you can't afford. I make a lot of money and there's things I can't afford because I don't have the money to buy them. And you've got to learn to do that, regardless of whether kiddos are involved or impulses or whatever. So hold on. I'll have Kelly pick up, and we'll help you, kiddo. That puts this hour of The Dave Ramsey Show in the books.

Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host. We'll be back with you. Before you know it, in the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Dave here. We just launched a brand new survey, and we'd love your feedback.

You'll be entered to win a $100 Amazon gift card. No purchase necessary. Take the survey at DaveRamsey.com slash survey or text survey to 33789.