The Ramsey Show - App - They Paid Off $300,000 of Debt! (Hour 2)

Episode Date: August 16, 2021

Debt, Insurance, Savings Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Ramsey personality George Camel is my co-host today. He is the host of The Fine Print on Ramsey Networks. It is a new podcast we launched a couple of weeks ago. The third episode dropped today. We'll be taking your calls here at 888-825-5225. The first episode was how TurboTax is screwing you.

And the true cost of credit card rewards was the second one. The Fine Print's all about digging in and finding out what the Fine Print says. Exactly. You know, the tagline is the hidden truths that are keeping you broke. And sometimes it's your own financial ignorance. Sometimes it's a money myth. And sometimes it's a bad product. It's a scummy company like timeshares like you're talking about. And so we're trying to help people understand because there's so many

voices out there. There's social media and the headlines. And my dad told me to get an FHA loan and lease a car. And so I'm trying to do the research for people and go, hey, what's going on out there? What are the trends? And how can I help them avoid the traps? Because I found that when you follow the trends, you fall for the traps. It's an interesting relationship. Now, how long ago did we record these episodes? There's 10 of them. Yes. And, I mean, obviously it went on several months, building all of them.

Yeah. But the one that dropped today was, it kind of felt like it was a little bit after the game, but now it's all coming back. As COVID comes back, how to bulletproof your money for the next pandemic. Yeah, it was hilarious. Yeah, like we thought, well, there's not going to be another pandemic, but now we've got a little spike going. Yes, I thought, well, is this going to be relevant by the time it launches? And wouldn't you know it, Dave, we've got the variant, people are starting to freak

out again, and they're starting to go, oh, crap, I need to get my financial situation in order because we don't know what's going to happen. And you know, Grandma said, it's going to rain. And so we need a rainy day fund. We need an umbrella. And so in this episode, we talked to real people. We talked to a woman named Julie who lost her job. She faced homelessness. And here's her quote.

Having debt is a vulnerable lifestyle. And she said that with tears. You could hear her voice shaking because of how frustrated she was with her own situation. We talked to famed economist Dr. Art Laffer, who talked us through what happened with the CARES Act and what the government's role should be when it comes to a pandemic. And I compared it to a drunk guy at a party. He shows up, he breaks things, and you go, shouldn't have invited that guy. And that's kind of what happens when the government starts to get involved and they're

trying to help. And they go, well, we're a few trillion in the hole. The government is the drunk guy at the party that's what happens he broke grandma's heirloom lamp and we go who invited this guy i didn't ask him to show up and so we walk people through your friends who don't know how to vote properly yeah oh my goodness yes and here's the thing with these podcasts dave a lot of people go i don't have room for another podcast this is a 19 minute episode and we're releasing these every other week and it's narrative it's storytelling the feedback on the on the style has been really encouraging people are really gravitating towards it it hit number one in business uh the whole

launch week we even beat i don't want to say it we beat the ramsey show temporarily just for one one moment you know beating it temporarily gives me great pride beating it a lot yeah starts to make me worried well it's your fault it's your fault because you talk about it on air and people go, okay, I'll go listen to it. So it's really your fault that we beat you. Well, the good news is I own it, so I feel better now. That's fair. I feel better already. Go listen to this thing.

You can go to fineprintpodcast.com. You can search for The Fine Print wherever you listen to podcasts. Like you said, we've got three episodes out right now. We've got seven more to go in season one and it's only 19 minutes and it's really i'm hoping it helps people go have that oh crap moment the never again moment the i'm going to draw a line in the sand moment i'm going i'm going to get that emergency in one place because i don't want to live vulnerably anymore yeah what we say around here is be the third pig there were the three little pigs one built his house out of straw

one out of sticks and when the big bad wolf came, the pandemic came. He huffed and he puffed and he blew their house down. They all ran where? To their brother, who they made fun of earlier because he lived like no one else so that later he could live and give like no one else, and he lived in a brick house. And when the big bad wolf came, he said, You three little pigs come out, and they said, Not by the hair of our chinny-chin-chin. That's the one. Thank you very much for that cue very good and uh that's what

you say to the pandemic yeah i'm not coming out i've got i i got i i got you know what happens with money is everybody's mad about money until they need some everybody's all philosophical about money's evil until they need some and when you need some is when you need to put margin between you and danger you and inconvenience you and hunger and money it's not money is no use it's not it's not worth anything except what it does and in a pandemic or a situation or a personal tragedy or personal crisis It doesn't have to be a nationwide thing. If you're the third pig, the little pig in the brick house, it puts you in a completely different mindset

because you're thinking, you know, Mr. Wolf, I think you might be in more danger than I'm in. You start to turn the tables on them when you're in a different position, you know, because you've prepared. Now, people made fun of you. You're doing that Dave Ramsey stuff. Don't you know that's a cult? You know, you're doing that stuff.

Bible stuff, you're like one of those Christians. What are you, crazy? People always, all these broke people have an opinion, but be the third pick. Live on less than you make. Save money. Have an emergency fund. Be out of debt. You've got $20,000 in the bank and no debt at all of any kind,

and a pandemic comes, you're in a different place. Or a tragedy of some kind comes to your life. It changes everything. Oh, yeah. And I've been working on, so we're covering Baby Step 3 at our Financial Peace Accelerated event. And so I've been doing all this research on the emergency fund and Baby Step 3. And it's fascinating to me the amount of financial peace you get. You know, you get out of debt and you're still not quite there. No.

You still are vulnerable. Yes. And once you get that emergency fund in place, it changes everything. It takes the drama out of life and all the crazy stuff. And you talk about this. It's funny, when you get an emergency fund in place it changes everything it takes the drama out of life and all the crazy stuff and you talk about this it's funny when you get an emergency fund you stop having emergencies and life gets a little easier because not everything is an emergency anymore well it takes the drama out i mean like during the pandemic i had a lot of stress but my stress was self-created because i have a thousand people here that i didn't want them to lose their jobs. And I'm responsible as a leader. That was leadership stress.

But I didn't have any financial stress. Because technically speaking, I would never want to do this. But, I mean, if it went really sideways, I could send all of them home. All of this is paid for. I don't have any payments. I'll be okay. You know? And so I don't want to do that it seemed

really unproductive and you know it would break my heart in so many ways but this idea that peace financial peace having an emergency fund in place it changes everything yeah and we're looking at the stats here we covered this in the podcast but it sad. 40% of Americans can't pay for a $300 emergency in cash. 50% don't have $1,000 in their savings account. And if we can bump up one percentage point because people listen to this podcast and go, all right, I got to do something differently. Third pig, baby. Be the third pig. And so it's called How to Bulletproof Your Money for the Next Pandemic.

You can get it for free wherever you listen to podcasts. You can go to fineprintpodcast.com and check it out. And really, the hope is that we can help to uncover some of the stuff to help the people out there make smarter decisions with their money. Yeah. Life is coming. It's coming at you. Pandemic or otherwise. Get you an umbrella.

It's coming. Be the third pig. This is The Ramsey Show. Hey, I'm Christi Wright. Listen, I know how easy it is to feel anxious in our crazy, busy world. That's why I want to tell you about an app called Glorify. Glorify is the number one daily worship and well-being app, and it will give you tools that will help you ease stress and anxiety in your life. Just search for Glorify in your app store. It's free to download and use. And if you like it, you can access their entire content library at half price by using the promo code

Christy. So download Glorify today. Peak real estate season is here. This year things are different. Home prices are higher. Competition between buyers is intense and sellers need to know what they're doing if they're going to make the most out of the sale of their home. You don't want to play amateur hour in this mess. Don't jump head first into something you don't understand. You need to get advice from a pro who's done this before like hundreds and hundreds of times. This being Sella House. Connect with one of our endorsed local providers. They are high octane, high protein agents. Go to ramseysolutions.com slash agent. That's ramseysolutions.com slash agent. Ronnie is with us and Hannah and they are in New Orleans. Hey guys, how are you? Hey, we are good. Good. I

see on my screen you're debt free. How much have you paid off? We paid off $236,000. All right. How long did this take you? About 30 months. Good for you. And your range of income during that time? We started out at about $60,000, and we went up to about $360,000.

Good Lord. What do you all do for a living? We're both in the medical field. Oh, so one of you graduated from med school and took off, huh? Yeah, well, both of us. Both of you did. Oh, okay. So is this med school debt you were paying off? Yeah, it was my medical school debt, and then my husband didn't have any debt with medical school. How come? It just came from a lucky family from my standpoint. It was all paid off by my family.

I'll call it blessed. I need that kind of luck, I was going to say. I don't think luck had anything to do with it. But, yeah, good, very good. All right, so you're both MDs? Yes. All right, way to go. This is awesome.

And you decided to do this very quickly in two and a half years. Why? Well, it was kind of a long time coming. So we got your book when we were married in 2013. We read it, loved it, and we put it right back on the shelf, and we did not follow that plan. So five years later, a family member was having some financial problems and I was like, oh, I have a book for you.

And then I realized that my medical school loans had gone from $170,000 to $230,000 in just five years because of the interest. So we decided that that was the time to start paying it off. So maybe the people with the financial problems were you. Yeah. So you sit down and have the conversation, get the book back off the shelves. Is that how this works? Yeah, pretty much, Ronnie.

Yeah, Hannah kind of spearheaded a lot of it. You know, Reddit started going through the system and seemed like a lot of steps. And, you know, my first reaction was, you know, it's a lot of work doing all the budgeting and, you know, the cash envelopes. And I had always been coming from a background where I was like, I just go with the flow and we'll just pay it off as we go. But then I'll say it, I married into some of this debt, so we just started doing it bit by bit, and then we dove right in, and yeah, eventually we were doing it 100%. Were your family questioning your sanity or cheering you on? It wasn't really a big public decision.

There were definitely conversations where uh you know i would talk about oh you know we're not using credit cards anymore and everyone would be like well that's crazy oh what about all these points and uh you know you get like cash back and all these things and honestly like from a gut standpoint i was like yeah that's true i am missing out on all these points but then we, we stuck with the system and didn't get lulled into that, you know, temptation of all those things because the psychological aspect of all that. And, uh, so there are naysayers, but you know, here we are. Yeah. My, one of my friends who was a naysayer was actually, I would constantly call her and be like, look what we just did. And look what we,

uh, just paid off. And she's like, God, y'all are so crazy. Wow. Do you guys have friends that are docs like you guys and they're going, wait, what are you doing? You should be buying nice cars. You should be living it up. Yeah, pretty much everyone. Oh, my goodness.

Like buying million-dollar homes and $100,000 cars. Yep, that's what's going on. And you realized, I'm paying $60,000 in interest. You said it went from $170,000 to $230,000. Yeah, yeah. That doesn't sound like good debt to me. No, that wasn't good. I thought student loans are good debt, Dave. I'm confused.

It just blew my mind. You guys are incredible. What do you tell people the key to getting out of debt is? I say the budgeting weekly and just checking in all the time and having a goal in mind for the end. Wow. Good for you. Well done. How does it feel to be free?

It feels pretty good. Yeah. We still got some work to do, but at this point, the being debt-free aspect has been a huge relief and a big step. How old are you two? Yeah, the money comes in and stays in, so that's nice. Yeah, yeah. Well, you're making a lot of money. Now you get to keep it.

That's a good thing. Yeah. Plus or minus some taxes, right? Yeah. Well done. All right. Well, Ronnie Hanna, we're real proud of you guys. Well done.

We got a copy of The Legacy Journey for you. And that, of course, is the next chapter in your story to completely change your legacy. You've got the income to do that, and the outgo is not all going out anymore. I love it. And, of course, a copy of the Total Money makeover for you to give to someone else. Ronnie and Hannah, New Orleans, $236,000 paid off in 30 months, making $60,000 to $360,000. Count it down. Let's hear a debt-free scream. Ready?

Three, two, one. We're debt-free! Yeah! Woo! Woo-hoo-hoo-hoo! Wow. Jovanna is with us in Newark, New Jersey. Hey, Jovanna, what's up? Hi.

How are you doing? Good. How can we help? Yes. So I am all in with your principles, and I am a host for the financial piece so far twice this year and will be my next class in October. But I must admit I am feeling very discouraged because I don't have any debt,

and I'm coming out of a 22-year marriage and always been a stay-at-home mom and a homeschool mom, and so here I am trying to get an apartment, and they're wanting credit. How do you get an apartment if you don't have credit? I don't want a credit card. I don't want anything to do with that, but I feel discouraged because how can I get something without credit? How many have you actually talk to?

Yeah, a lot, actually. Just was going on realtor.com. Did you actually call the apartment complex and talk to the manager? Not the manager, but the person that would actually answer the phone. Because we did a thing. Anthony O'Neill is on YouTube. we did a thing anthony o'neill got anthony o'neill's on youtube we did a thing he called 20 plus apartments and said i'm uh i i have no credit score how much of a down payment or how much of a deposit do i have to make and will you rent to me and all of them but two

would rent to him wow so i'm yeah and i'm right now in new jersey trying to move to arizona because my son has a scholarship opportunity out there and you know and you've actually called 20 apartments 20 20 rentals in arizona or you just looked on realtor.com no No. Oh, no, I haven't called 20. I just, you know, I've called three that is within my price range. Yeah, three is not enough to get discouraged. But I haven't spoke to the manager, so maybe that's why. Just call them and say, you have a job, right? I don't. Well, honey, that's why they don't care if you've got a credit score or not.

They're going to rent to you without a job. Right. So, like I said, my situation is a little bit odd. Like I said, 22 years. Yeah, but it's not your credit score that's the problem. I'll rent to you without a credit score as a landlord. I do all the time. But I'm not going to rent to you if you don't have a job.

Right. So, I mean, my income is out onony and child support, so I do have that as my income. I'm not renting to you on alimony and child support because he's not dependable. Okay, gotcha. I have to know you can pay the rent as the landlord. That's your problem. It's not your credit score.

Plus, you've only actually talked to three. You're not allowed to get discouraged when you talk to three and that's your sample size. Talk to 30. Tell them what's going on. Maybe one of them will run to you with child support and alimony. If you can live on that. might feel like you'll have it forever. But here's the truth. You are not as far away from being debt-free as you think. Most people who do what we teach pay off all of their debt in 24 months or less.

So why not you? When you're debt-free, you finally get to enjoy your money instead of stressing about it. But what if you want to get there fast? You need the right plan. With Financial Peace University, you'll learn step-by-step how to pay off debt, save, and invest for the future. Then you'll put everything you learn into practice with a budget using the premium version of our tool, EveryDollar. And you get it all only in a Ramsey Plus membership. When you commit to this plan, you will become debt-free faster than you think.

To start your free trial of Ramsey Plus today, text TRIAL to 33789. Text TRIAL to 33789. In the lobby of Ramsey Solutions, on the debt-free stage, Todd and Ashley are with us. Hey, guys, how are you? Doing well, Dave. Doing good. Welcome. Where do you guys live? San Jose, California.

Wonderful. And how much debt have you paid off? $305,512.88. Love it. How long did this take? Three years and nine months. Goodness gracious. And your range of income during that time? About $165,000 to about $280,000. Cool. What do you all do for a living?

I'm a pediatrician. And I'm an engineer in the medical device field. Wow. Great careers. Obviously great incomes. But obviously a lot of debt. So I'm guessing maybe a little school debt in that. 100%. All student debt. Every bit of it.

All of it. $306,000. Yep. Woo! So how long have you guys been married? Coming up on four years now in November. Okay. So right after the marriage, you looked down up on four years now in November. Okay. So right after the marriage, you looked down and you went, oh, my God.

Yep. This just got real. Just before we got married. We had been kind of talking about the debt that I mostly had. Med school debt, of course. Med school debt. Yep. Exactly.

And so you sat down and said, oh, we got to do something about this. Tell us the story. What happened? So it actually started a couple months before we got married. I was on one of my last rotations in medical school. I was working with some paramedics. And we were up late one night just kind of hanging out at the station. And he was talking to me about the student death that he had.

A conversation that I would say I had several times throughout my training with different physicians, nurses of various levels. And usually the conversation would end, yeah, I have a lot to OL. And this conversation was a little bit different. He mentioned your name and he said that he was actively working, picking up a lot of shifts, which he can do in his field to work on his debt. And your name rang a bell. So I realized my dad had talked about you my entire life. Oh, financial peace, baby. Yeah, exactly. Hadn't always followed the steps until more recently, which has been exciting to see them go through it too. But yeah, that night I basically started Googling your name, pulled up your podcast. And usually when I find something i go 100 in so i did and i basically

downloaded every podcast that would fit on my phone oh my gosh listen to them just back to back to back wow um yeah and then pretty much came to todd with hey i know you were really afraid of all the debt you're marrying into but here's a pretty plan. I've just been brainwashed by this podcast. Oh, my gosh. And Todd, what did you say? You know, it took me a little bit to get on board. Like she said, she's 100% in when she goes in, and so she encouraged me to listen to some podcasts.

I kind of have to come to things on my own, and so it took not very long, though. It took me a couple weeks, and I started to listen to some of your podcasts and, um, you know, I'm a logical guy. I'm an engineer and it all just made perfect sense to me. And, you know, I was, I've never been debt free in my life. My parents always had debt, you know, gave me a wonderful childhood, but you know, the debt was kind of always looming my entire life. So I had no idea what being debt free was like. Um, and so, you know, I wanted a plan. It was one of those things that you just kind of push it off to the side and you just think we're going to be able to make enough money to pay this off at some point. But definitely my heart sank when I saw just how much loans that she had. But

so I was, I was enthusiastic that she actually, you know, found a plan that we could work together. And so, you know, I was a hundred percent on board once I started to kind of learn more about your program. Cause when you first hear the amount, you go, that's going to take a while. Yep. And you did it in three years and nine months. When you first were sitting down, look at this, did you dream you could do it that fast? No, we initially planned five years when we kind of laid it all out. And I had done all my training.

I'm from Texas and was moving out to California for more training. So the thought of paying California rent prices and still being in training and doing this plan. And taxes. Exactly. And all kinds of different stuff. And extra cost of living, really. Right. San Jose's not cheap. It's not. Definitely not. So it was hard

to estimate those costs. And I think we made a good plan. It was five years. And typical Ashley form, I was like, I want to do it in four. I think that sounds better than five years. And so we got a little bit more aggressive. And then as you get towards the end, it just, it truly snowballs. And that's how we were able to even tick off a couple more months to make it under four years, which was really exciting. Yeah. I mean, clearly you guys lived on less than you make, but what were the sacrifices that you guys had to do to keep this thing more and more aggressive? A lot of trips, right? You know, a lot of our friends coming straight out of school.

You know, I was in grad school out at Texas when we met. And so I had friends that had just finished their PhD programs too. And she was having friends right after residency in med school that we're doing a lot of really fun traveling, a lot of really fun eating out. And there was just a lot of stuff we had to say no to. And so we couldn't go on a lot of those trips. It was kind of the time in our lives when a lot of our friends were getting married too. So we had to say no to a lot of weddings, bachelor parties, bachelorette parties, that

sort of thing. But yeah, that was, I think, pretty hard. So some FOMO there. You're scrolling on Instagram while you're eating rice and beans going, oh man, look, they just went on that trip. Looks like they have fun over there. But you guys had the JOMO mentality, which is what I call the joy of missing out. Because you had bigger priorities.

You had bigger plans for your life. And you knew this was a temporary sacrifice to set you up for the future. Exactly. That's incredible. Yeah. Man, you guys are awesome. Who were your biggest cheerleaders? I'm guessing your dad.

Yeah, definitely both of our parents. So my dad was really excited when I brought up your name, and he was like, oh, yeah, he's great. We've never been able to fully jump on board, but he's great. You should do that. I've not done it, but you should do it. Yeah, so they actually jumped on board and were able to get out of debt themselves during our journey. And Todd's parents are doing the same. And it's been really fun just to see our families

cheer us along and get on board. So I have siblings as well with, you know, debt of various types who are getting really excited to do so. Our friends were great, you know, especially having friends in our careers where they were doing fun trips and they were eating out and they wanted to have us out with them. And they thought we were weird,

but they were absolutely supportive. And that really made it easy. And we made ways to cook meals from our home and have friends over or vice versa. That's good friends. And that definitely made it easier. Yeah, that's good friends. We can be obnoxiously passionate about the program too. So we had a lot of people just kind of come on board too where they'd see us do it for so long

that we had a few friends also get debt-free before we did because they had a little bit lower load my parents are credit card debt free for the first time and you know 33 years and so um definitely we've been feeling the ripple effects too so i love it i'm so proud of you guys look at you evangelizing it i love it yeah that's fun very fun okay what do you tell people the secret to getting out of debt is? For me, it was the budget. I really loved crunching the numbers and doing the budget. And I think seeing it on paper every month made it easier when we had to say no. And it made it easier when we wanted to make decisions of adjusting the budget each month. We had a decision.

And when we had that end goal in mind it made it easier when i could see it on paper and see the progress month to month so i think the budget was really the key and continues to be the key even as we're out of debt to kind of track everything coming in and everything going out yeah because now you can live and give like no one else i mean you're in a position of incredible incomes and no going nowhere but up and of course no no payments at all so i have a theory um because i do truly believe that personal finance is 80 behavior 20 had knowledge and i i've spent the last 25 years trying to get people to adhere to or submit to a proven process a system and i kind of have noticed it's not always true but i've kind of noticed that

professions who require you in your discipline to adhere like medicine and engineering you know there's not really there's there's a way to build a bridge that it will fall and there's a way to build a bridge that it will stay up in engineering right i mean there's a way to treat a a known disease with a known treatment program and there's a way you don't do it. And you don't, like, make up your own deal, you know? You submit to the process, and the patient has to submit to the process. The client that you're designing something in the engineering world has to submit to

the process. Otherwise, it's going to freaking not work, you know? And I think people that do what you do, you see something like we do, and you go, oh, I'm doing it. Yeah. Because it doesn't sound like you guys had a lot of angst about, well, I kind of need to reinvent this. I'm like an artist.

You know, you're like, nope, doing it. Do the plan. Yeah. Right? Yeah. I think it gave us encouragement. I mean, looking at the number to start with was just so overwhelming. And to have a plan that kind of breaks it down little by little.

I mean, we could initially pay off, you know, really, really small student loans and just see it snowball. Well done, you guys. We've got a copy of the Legacy Journey for you and Total Money Makeover as well. $306,000 paid off in three years and nine months, making $165,000 to $280,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! We're debt-free! Yeah! Yeah! Woo! Whoop whoop whoop whoop whoop whoop Incredible. I love it! This is The Ramsey Show. Did you wake up this morning and realize you had $306,000 in student loan debt or $236,000 in student loan debt or $236,000 in student loan debt.

That was our last two debt-free screams. Maybe you just woke up and you thought, I have a lot of debt or I have a lot of problems or I don't know what I'm doing with money. You know what that would make you? Normal. But normal's not good. Normal's not fun. Normal scares you.

Normal keeps you up at night. You don't want to be normal. So if you want to decide this is the last month you're going to be normal, I want to get out of debt. I want to build wealth. I want to be generous. This month only, we're knocking $30 off a 12-month membership to our most impactful, life-changing money products.

That's Ramsey Plus' membership. With that, that's where you go if you want to go to Financial Peace University. That's where you go if you want to plug into our premium version of our budgeting tool, EveryDollar, the world's best budgeting app. Plugs into your bank and everything this way. So you go to Ramsey Plus, you get a free trial by texting trial to 33789 jump in there look at financial peace university look at every dollar look at all the other things we have there to help you change your entire life and it's 30 off this month only 99.99 text trial if you want to do a free trial to 33789 patrick is with us in Fort Myers, Florida.

Hi, Patrick. Welcome to the Ramsey Show. Hi. How are you doing? Better than I deserve. What's up in your world? Basically, I'm trying to see if I can justify myself a new truck. Okay.

My wife and I, basically, we live on a paycheck, not counting our investments, about $73,000 a year of the take-home pay. And I'm looking at a $45,000 truck. Why? Currently, we have zero debt except for the mortgage on my home and a two-year fully funded emergency fund. Along with that, I've been doing extra payments on my current truck, and a two-year fully funded emergency fund. Okay. Along with that, I've been doing extra payments on my current truck, which I bought in 2006. I fully paid that off, and I continued making payments and have a savings account of approximately $82,000.

Well, that's good. Well, number one rule when you're getting ready to buy a car is can you pay cash for it? And the answer is obviously you can pay cash for it. Is this a new truck? No, it's actually a 2007. Okay. All right. And the other rule of thumb we use, Patrick, is that the largest thing we all buy that goes down in value is a car.

And things that go down in value defeat our wealth-building plan. They work against us to build wealth, obviously, if they're going down in value. And so we try to not put too much into things that are going down in value because the goal here is to build wealth so that you can drive anything you want to drive and not have to worry about it and so the rule we've used for years is don't buy things with motors and engines all added together that's more than half your annual income and this is well actually when i say that's my annual income that's just what we live on it's not counting all the revenue we get from our business that we own as well as our rental income.

Well, then that's not your income. What is your annual income? My annual income is $382,000. Okay. Well, then you can afford a $45,000 truck if you pay cash for it as long as the other car is not a $150,000 vehicle. The other car is already paid off. It doesn't matter if it's paid off. If it's a Lamborghini, you can't have the truck.

But otherwise, you can get the truck. Yeah, I mean, because, you know, you've got plenty of money. It's not your salaried income. It's the income. The point is, we're trying to measure and say, are you putting too much of your life in things that are going down in value? When you have a $300,000 income and $80,000 in the bank to buy the thing with, $45,000 is not too much of your life. Yeah, absolutely. I mean, those numbers change everything. When I thought you were making $73,000

and you want to buy a $46,000 truck, I mean, that's insane. But based on the numbers you just shared with us, this is a fine move. I would question, you know, is this just a fun toy? I mean, you guys have worked really hard. You said you had a two-year emergency fund? Yeah, it's a little steep. You guys go all in on whatever it is. So it sounds like he's going all in on this truck and you have the money for it. I don't see a problem with that. Yeah, and I would adjust your emergency fund to six months and invest the difference or put it onto your mortgage if you've got a mortgage still. So those are the kinds of things.

But if you make $300,000 a year and you have the money to pay cash for a $45,000 truck and it's not brand new, no problem. If it is brand new and your net worth is over a million, no problem. Do it. You know, that's still just fine. Kara's in San Diego. Hi, Kara. Welcome to the Ramsey Show. Hey, Dave. It's an honor to talk to you today. You too. What's up?

Really cool. So I'm looking at updating my health insurance. My husband and I are trying to start a family this year, and I'm a little fed up with just how health insurance is going with us. Looking in the HSAs and at face value, it seems like the HSA is more expensive than my current and I'm a little fed up with just how health insurance is going with us. Looking in the HSAs and at face value, it seems like the HSA is more expensive than my current plan and I'm wondering what I'm missing. The HSA is typically a cheaper premium, a higher deductible, and typically they're 100% pay after the deductible. Is that what yours is? At face value from what I'm seeing, the HSA would be more per month, about $30,

and the out-of-pocket max is also more than what I pay now, which is about a $4,500 out-of-pocket max with an annual or monthly premium that is about $30 to $60 cheaper. What's your deductible on the other plan? Well, you said the out-of-pocket max is still more. Yeah, everything seems more. So I'm wondering if maybe you could explain the tax benefits, because maybe that's where I'm seeing savings is on an annual perspective. You might see some there, but usually the premium is less.

So that's an unusual plan you've got. This is through work, I assume, right? This is through Covered California. Oh, I have no idea what they're doing. Okay. So, I mean, because, let me tell you, in our corporate plan and in most of the corporate plans in America, the HSA will be a higher deductible, a higher out-of-pocket per year.

And so it doesn't work as well for people who have chronic illness. You know, they're constantly in there. It works best for people who have very little illness. Okay? And so, I mean, if you're constantly bumping up into that thing, into that deductible, it's going to end up costing you more with an HSA. But like the Ramsey family, knock on wood, has been inordinately healthy and blessed in that regard.

So we almost never use our health insurance. And so what we end up with is basically a high deductible, cheaper premium policy at our house. But that's, you know, so far, thank you, Lord. But in your case, I'm not positive. The tax benefit is simply whatever you put into the savings portion of the health savings account is tax-deductible like a traditional IRA. That's the only tax savings.

I see. So is that something like where if you were to invest dollars out of your paycheck, like not through an employer or something? Right. I would rather you max out retirement before you start putting in money into an HSA. I would rather you pay off your mortgage before you start putting substantial money into your HSA. Well, that actually really helps. Yeah.

So it sounds like with your analysis of CoverCare, California CoverCare, which I have never looked at. I don't know the details. But it sounds like based on your analysis, you would go with the not HSA because for whatever reason, the way they've designed that offering, the HSA is not cheaper, which is weird. Yeah.

I would look into the fine print on that and contact them and have them walk you through the numbers because I'm with you, Dave. I'm on the HSA here. I've got the high deductible, and it's the cheapest option for monthly premiums. And so I'd be shocked if it's more for your premium on that side. So definitely look into that. There may be something that you're not aware of or not understanding fully. So contact them and do some research and dig into that.

Yeah, it is California. It is California government. So you don't know. I mean, there's no telling what they're doing. But, you know, once the government puts their hands in something, it's hard to tell what's going to happen. But an open market policy with a typical company in America, you're going to find the HSA to be more, a higher deductible and a lower premium normally.

That's the normal plan. And most of them are, again, after you meet your deductible, they have 100% coverage. There's no copay. So your out-of-pocket is your deductible. In those cases, you're max out-of-pocket. George Campbell, my co-host this hour. Thanks to Ben and Kelly in the booth. I'm Dave Ramsey, your host. This is The Ramsey Show. We'll be back. Hey, it's Kelly, associate producer and phone screener for The Ramsey Show.

If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.