The Ramsey Show - App - This Season Is WHERE You Are - Not WHO You Are! (Hour 1)

Episode Date: December 31, 2021

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Thank you. 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. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. Christy Wright, Ramsey personality, number one best-selling author and author of Take Back Your Time, The Guilt-Free guide to life balance.

So we'll be talking about your life and your money this hour. It's a free call, 888-825-5225. And some say the advice is worth exactly what you pay for it. All right, Nick is with us. Nick is in Colorado Springs. Hey, Nick, how are you? I'm good. How are you doing?

Better than I deserve. What's up? Hey, I had a question about whether I should finish my debt snowball paying off my student loans or if I should refinance at this time since the rates are so low. I owe about $10,000 on my student loans, and my rate right now is 3.75, and I could buy down the 15-year mortgage for 1.75. Your rate currently on your mortgage is how much?

3.18, 3.125. Okay. And you said you were quoted what? 1.75 on a 15-year. Fixed rate? Fixed rate. Bunch of points. How many points?

Right now, they've gone down a lot. It's 0.875. So, a little under 1%. Sounds low. Okay. I'm a little suspicious. I don't think mortgage rates are below 2% yet. Yeah.

Unless I missed something over the weekend, which is possible, but I don't think I did. Okay. They always have the best rate. I have my mortgage with them right now. Okay. Oh, it's a local credit union. What's the balance on your loan? $295. Hmm. Okay. Oh, it's a local credit union. What's the balance on your loan? $295,000.

Hmm. Okay. Well, that's a below market rate. I'll just say it that way. Okay? So that's not bad. So let's just call it 2% down from 3%. You would refinance just for that, but we don't roll your debt into your mortgage. Yeah, I didn't want to roll it in. So what that got what's the eleven thousand dollar student loan got to do with the equation then oh i'm just still in the debt snowball i wanted to see if i should finish paying the debt or if i should refinance now oh i see is there any cost uh out of pocket to refinance uh no then why would it affect your debt snowball

because because the payment's going up go into a 15-year. Yeah, it's going to go about $500, $600. Ah, okay. Now I'm catching on. Okay. I'm a little slow on the uptick. Sorry about that. All right.

Okay. So the big concern is not money out of pocket. It's not rolling the student loan into the refinance. It's simply you're going to have a higher payment and that's going to slow down how fast you can get your your student loan paid off right what do you make uh about 95 000 okay it's a good question took me a minute to get to the bottom of it because i'm like i said i wasn't gathering i was i was telegraphing where you were going and it was none of those places okay so um yeah yes you do this it's not going to slow it down that much 500 bucks a month increase in payment changes your cash flow six thousand dollars a year making 90 000 that doesn't keep you from getting out of debt okay it does slow

it down a little bit but it might slow it down by two months or something is all. Yeah, on that income. Yeah. It's so different than the call we just had before the break, too, because you have such a great income, Nick. You're going to get out of debt quickly whether or not you refinance or not. So you can refinance and get out of debt still in a very short amount of time because you have such a great income. That's the reason we talk to people about getting their income up, whether it's through business, taking a second job, third job.

The bigger shovel you have, the more progress you can make on your goals, whatever those goals are. But if you don't have an income, you're tight. There's not a lot you can do. You're doing great, Nick. That's awesome. Luke is with us. Luke is in Charlotte, North Carolina.

Hi, Luke. How are you? Hello, Dave. Hello, North Carolina. Hi, Luke. How are you? Hello, Dave. Hello, Christy. Hi. So as with most questions, you guys probably answered this before. However, I haven't quite heard it be asked in the time I've been listening. Dude, I've been answering the same questions for 30 years.

It ain't no thing. Go ahead and ask it. We're ready. All right. So my question is just kind of determining whether or not I'm on step six or seven. So I have all milestones essentially met. The conundrum I'm in is that I still rent, so I technically don't have a mortgage, even though step six is essentially paying off the mortgage.

Could I consider myself as kind of paying myself a mortgage payment a month on top of what I've already saved for my down payment, which is above your recommended amount? Or would that kind of put me into step seven instead? It doesn't matter. You're doing great. I'm so proud of you. How old are you? 28. All right, man, you're doing good well done so the bottom line is you don't have any debt you have an emergency fund in place and you're putting 15 of your income into retirement right yep wow look at you freaking rock star and then every other dollar you save right now is called down payment money because the bigger the down payment the smaller the debt the faster the house does get paid off when you buy it, right?

Absolutely. So just make it real clean. Anything that's not an emergency fund that's in savings is increased down payment. We don't have to have two categories of it. Just pile up a big old pile of money and go in and buy a house and almost pay for it or pay for it. I'd love it. How much you got saved already for the house? About 53. Five-three? Yes. Pay for it or pay for it. I'd love it. How much you got saved already for the house?

About 53. Five three? Yes. Way to go. You're doing awesome. What is your income? 91,000. Good for you.

Yeah, you're rocking this, man. So if you bought a $200,000 house today, you put down 25%. That'd be cool. And if you wait three or four years, house today, you put down 25%. That'd be cool, you know? And if you wait three or four years, you'd probably just pay cash for it. Yeah, that's kind of where I was going with this question is considering how much I have, I feel it quite difficult taking out that debt considering how much I'm able to save per month. Luke, you're awesome. And I'm in no hurry to buy.

You're awesome. Here's the reason you don't fit in one of the baby steps just perfectly is because you're not normal. Normal people have a house payment and car payment and student loans and all the debt, and we walk them through, which is great because this plan works for the normal person who has normal debts. You're not normal. You haven't bought a house yet. You're possibly saving up to either put a huge down payment or pay cash. You're just going to fast-track yourself to baby step seven. You're doing normal. You haven't bought a house yet. You're possibly saving up to either put a huge down payment or pay cash.

You're just going to fast track yourself to baby step seven. You're doing amazing. Ding, ding. I love it. Well done, sir. Yes. Christy Wright, Ramsey Personality is my co-host today. This is The Ramsey Show. Thank you. you've got a lot on your plate a job your home your marriage and your growing family while you're enjoying the present you can't help but think about your future You've got a lot on your plate, a job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances.

As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey Tr, number one best-selling author. Christy Wright is my co-host today as we talk to you about your life and your money. Dina is with us. Dina's in Virginia Beach. Hi, Dina. How are you? Hi, Dave. I'm doing great today. I just want to tell you it's an honor to be speaking with you.

I'm like a walking billboard for you. Thank you. Thank you. I need walking billboards. I gave your book to everybody at Christmas time, including myself, as a gift. And it's been a game changer and a life changer for me. I'm currently on baby step two. And by the end of September, I will have paid off all of my debt. Way to go. Awesome.

Good for you. I'm really, really excited about it. But in looking to the future, my question to you is interesting. And I've got an unusual opportunity. I'm looking to purchase my first home. I'm currently in a rental that I've been in for 11 years. It's dirt cheap in the best possible area that I could ever want to be in. I'm just wondering if I should look to purchase this house, which would give me an instant investment because it is a duplex,

or should I try to do something on a smaller scale and look for something else, a smaller single family or a condo for myself? The one you're living in is coming up for sale? Well, the situation is that the landlord is a very old man, and we have had discussions in the past about him giving me basically a first right to purchase. It would be an amazing opportunity due to the location. It is on my vision board. I have such a vision for what I would want to do with this. But there's a lot of unknowns. is on my vision board. I have such a vision for what I would want to do with this. So if you bought it. But there's a lot of unknowns.

If you bought it, okay, I think I just heard you're going to do a lot of renovation. Did I just hear that? Eventually. I would be able to continue living in it while saving for renovations. Okay. And if you don't have a tenant, can you make the payment at 25% of your take-home pay? Yeah. That's kind of the issue. I am just starting to save um so ultimately my question rolls to how what is the best way for me to save for this whether it's this house or another house i know i'm kind of all over the

place it's just beyond the you know you you get your emergency fund in place and baby step three and then you start saving for a down payment on a house. And then the only question is whether you buy that house or not, and can you afford it. And duplexes are good in that you have a tenant and that you have some income off of them. The great news is the tenant is next door. The bad news is the tenant is next door. I got lucky with the tenant because I was able to choose the tenant. I'm a realtor. Now, you always get to choose the tenant, but they're always next door.

Correct. When you own the house, you get to choose the tenant. I get to choose who lives over there, but they're next door. And that creates potential boundary issues and all kinds of things you really have to work through. You have to think about that. The other downside is when you get ready to sell a duplex, the typical buyer of a duplex is not an owner occupied. The typical buyer is a real estate investor.

And real estate investors have a tendency to buy things at wholesale, not at retail. And so consequently, duplexes at the same price, say a $200,000 duplex versus a $200,000 single family, single family sells at retail to another user. And consequently, they will generally appreciate more than duplexes will because of who your buyer market is. Your buyer market is a wholesale buyer on the duplex, and it's a retail buyer on the other. So as long as you understand those things going in, and you don't have some kind of false romantic version of what being a landlord is with having people next door, I mean, you know, you could open up a farm and have a bunch of goats, right? Been there.

I knew somebody did that. Seemed like such a good idea at the time yeah that's what i'm talking about but that's a great that's a great example really because uh sometimes we get an idea in our head of what something's going to be like and the reality is very different so i i mean you're so on point of like thinking through what are the actual implications of this arrangement that and is that what you want or would you rather buy something else where you're not dealing with someone? So, yeah, sometimes we need to think through the good, the bad, and the ugly, not just the good that we're excited about. Yeah, if you get sideways with a tenant, they are, you know,

something, a life event happens, and they decide they're not going to pay because they're going to take care of the life event, whatever that is. Yeah. happens and they decide they're not going to pay because they're going to take care of the life event, whatever that is. And even if you want to have some mercy on them and let them have some time or something, that's okay. But at some point, they've got to pay or leave. And if you get sideways with them and they are literally one wall away, that can be a thing. Well, I'm just thinking, even, too, every time she walks out her front door, if they just have new things that they want to complain about, like, oh, the water's too hot or the pain is chipping or, you know, and you're right there to complain to all day, every day.

Light bulb's out. Wait a minute, I don't do light bulbs. I know, but my light bulb's out. Yeah, yeah, and you're right there. Yeah, that's exactly what you've got. So you have to have real boundary discussions. And you have to observe good boundaries. You can't just run over there and knock on their door all the time.

Sure. discussions. And you have to observe good boundaries. You can't just run over there and knock on their door all the time. But it's just a different thing emotionally and relationally to have them right next door. Julie is with us. Julie's in Bend, Oregon. Hi, Julie. How are you? Good. I'm so excited to talk to you guys. This is my first time calling any radio show. Wow. We're honored. Thank you for joining us. How can we help? Okay. Well, I've been doing your program for a couple of years and I have been in myself both actually, I should say. And we recently

sold our house. It was a good time to sell in our area. And we are kind of trying to simplify and scale down. So we're moving into one of our rental houses. But now we sold our house and we have this, you know, chunk of money and we want to tithe on it. And we go to a church regularly, tithe there. And my sister, her and her husband are pastors, so we tithe to their church, too. But I just, I'm nervous about how do you tithe on a big chunk of money should you put it all in one place? And, you know, seeking God the best way to tithe and do you break it up or just put it all in one big pot well uh how much did you uh gain on the house what'd you pay for it versus what you sold it for well we we came out with after we paid off um the mortgage part

that was left we have a million and or just a little bit over that. Yeah, but what did you pay for the house, and what did you sell the house for? Well, okay, I see what you're saying. So we built back in 06, and I think we had about $800 on our first mortgage. No, it's not your mortgage, darling. I'm asking what you paid for the house. Well, the bills, I don't even know. What you sold it for minus what you paid for it is your gain.

And that's what technically, if you want to get a technical biblical answer, that's what you would tithe on. Your net increase. Your net increase. It has nothing to do with the mortgage. The mortgage is not a part of the formula. So it's what you sold it for minus that, and technically you would tithe to your local church.

Now, if your local church has an annual budget of $300,000 and you're getting ready to give them $100,000, that's going to be a problem because you're going to upset the old apple cart there and you may want to think about how you place that. But that's your technical answer. Overall, though, God's not mad at you when you're giving. So let's just keep giving at the forefront

and not get too twisted up on the technicalities. We'll be right back. Christy Wright, Ramsey Personality No. 1 bestselling author, is my co-host today. In the lobby of Ramsey Solutions on the Debt Free Stage, Matt and Amber are with us. Hey, guys, how are you? Good. How are you? Better than I deserve. Welcome. Where do you all live?

Houston, Texas. Well, welcome to Nashville. Thank you. How much debt have you guys paid off? $92,610. Excellent. How long did that take? Eight years, 11 months, and two weeks. Eight years, 11 months. Wow. And your range of income during that time? It ranged 60 to 150. Wow. Okay. And

what do you guys do for a living? I'm in cybersecurity. And I occasionally worked at a church, but mostly a stay-at-home mom. Good for you. Awesome. Very cool. Just what we were just talking about. Yeah. And what kind of debt was this?

$93,000. It included our mortgage. Whoa! You paid off your house! I'm looking at weird people! Amazing, y'all. Barry, what's this house worth? About $170,000 now.

Wow. How old are you guys? I just turned 40. And I'm 37 37 and you paid off your house yes that's weird y'all are weird that is i love it way to go very cool well tell us the story how did this happen i mean how did you find us what are you doing well, it started in 2008 when we got married, and a friend gave us a copy of the Total Money Makeover for a wedding gift. So we read that, and then we saw that our church offered FPU. So we took the class, and just after our first anniversary, we finished paying off our consumer debt. Wow.

So we just kept working the baby steps. We saved our emergency fund, saved for a down payment for a house. And then we took out a 15-year mortgage right before our first child was born. And just kept plugging away until about three and a half years ago when Matt was diagnosed with cancer. Oh, wow. So we kind of had to slow things down a bit and take care of that. Sure. But we were thankful to be on the plan at that point, to not have to worry about the

financial side of things when that was going on. But it also renewed in me a sense that I wanted to finish our goal together of paying off the house. So we had been setting aside money to upgrade Matt's car, but when our car savings got close to the amount left on our mortgage, I thought, I can't spend this money on a car. Sorry, Matt. Let's just do it and pay off the mortgage. No upgrade.

The upgrade is a happy wife. That's right. Yeah, yeah, yeah. Exactly. That's so true. Okay, so I'm curious. When y'all bought this house, y'all were on the plan and you bought this house. Were y'all intending to get intense about paying off this off this mortgage early or was that something that kind of set in later i had always wanted

to pay off the house early probably earlier than he wanted to but i was more intense um than he was but it sounds like you worked the baby steps exactly as outlined yeah we did and i mean you worked right into the 15 year after you were debt-free and had your emergency fund in place. And then you said, okay, we're going to take a 15, but we're going to pay it early. And then everything's cooking along, and then the little hiccups. So how are you doing, Matt? The other side of the cancer? I'm feeling good.

I finished my last treatment about three months ago. So hopefully that never comes back. Amen. We're praying and hoping. That's right. Yeah, I'm feeling pretty good. Good. Good to be here. Good. I mean, just surviving the cure is part of it isn't it yeah oh the other

part was the medical bills yeah and we found out what uh what our out of max pocket would be out of pocket maximum would be and we saved that each year wow and then after that we would decide okay we're going to put more towards the mortgage or save for this, save for that. It was very peaceful financially speaking. Well, it's so interesting that you used the word peaceful when you're talking about going through cancer and having to deal with that. Because I know so many people, that's the opposite they would ever think. But when you have your finances in order like you guys did, then it takes that piece of it off of it. And where you're just focused on healing and getting the treatment you need.

And so, well done, you guys. That's amazing. I'm so glad you guys had that foundation before this came. Definitely. Way to go. Way to go. How does it feel to be completely free now? I mean, the cancer treatments are over and the house is paid off.

My gosh, it's like spring is here after the winter. Yeah, it feels great. It still feels a little surreal. But, yeah, it feels wonderful. So when does Matt get his upgrade? Yeah. Matt, it feels great. It still feels a little surreal, but yeah, it feels wonderful. So when's Matt get his upgrade? Yeah, Matt's a great question. That's probably next on the list for us to do. He's finally getting that.

No payments, that's going to happen quick. No payments, you can save for those goals so much faster. That's amazing, you guys. Well, congratulations, you guys. Very well done. Thank you. All right, so you read the total money makeover. You went through Financial Peace University at your church.

You pay off your house and everything, 40 years old and younger. What's the secret to getting out of debt? I think the first step was the budget and getting on the same page. We met every month, and we looked at the budget, and we're like, okay, where is this money going to go? And that diligence, that tenacity, we're going to meet, even if we don't want to. And sometimes we were late in the middle of the month

instead of the beginning of the month, but just being on the same page, that was so powerful, I think. And agreeing and making compromises when we disagreed, I, that was so powerful, I think. Agreeing and making compromises when we disagreed, I think that was very important. What kept you motivated for the long haul? Because this was a long journey for you guys from the time you paid off your last consumer debt to now. The house is a big, that's a big thing to pay off. What kept you motivated through the journey?

Just being able to do this together and have that weight off our shoulders, especially after the diagnosis, just thinking, okay, I don't want to have to deal with anything else. I don't have to. So let's just go ahead and get that done and focus on the other things and have fun and enjoy life together. Yeah, good for you. Yeah, way to go, guys. You guys are heroes.

You completely changed your life, changed your family tree, changed everything, and pushed through, man. Well done. Well done. Thank you. Very well done. So proud of you. Well, we've got a copy of the Legacy Journey for you. That is the next chapter in your story for sure.

To become Baby Steps Millionaires. You're right around the corner from that. And then move on to change your whole family tree. Also, an extra copy of the Total Money Makeover to give away. That's what started your journey. You can help somebody start theirs with it. That'll be perfect. And you brought the kiddos with you.

What are their names and ages? We have Hope, Ryan, and Luke, and they are 9, 7, and 5. All right. And have they been practicing a debt-free screen? Yes, they have. Yes, we have. And know what it is, right? They're ready to go.

All geared up. You guys look like They're ready to go. All geared up. You guys look like you're ready to yell. Yeah. We drunk all the way from Houston. We're ready to yell. That's right. All right, here we go. I love it.

Matt, Amber, Hope, Ryan, and Luke from Houston, Texas, $93,000 paid off. That's the house and everything. They're weird. Eight years, 11 months, did it making 60 to 150. Count it down. Let's hear a debt-free scream. Alright. Three, two, one. We're debt-free!

Yeah! Woo-hoo! I love seeing the kids. Oh my gosh. I love it. That's amazing. Oh, my gosh. I love it. That's amazing. Fabulously done. Very well done.

Open phones at 888-825-5225. Those guys are amazing. What great heroes. Teresa is in Dayton, Ohio. Hi, Teresa. How are you? I'm well. How are you, Dave?

Better than we deserve. What's up? Well, I was calling. I'm well. How are you, Dave? Better than we deserve. What's up? Well, I was calling. I'm trying to decide. So my mom's been, like, very sick for the past year, and there's a lot of care and stuff that I kind of manage with her. And I've been looking. I've been on the journey since, like, right before COVID.

And that's free other than the house and stuff. But I've been looking at, I mean, you've really motivated me in just trying to find a path with God and, you know, trying to help other people out too. And I just, I want to do the financial coaching, but I just don't know if this is the time. Mm-hmm. Just because of the overwhelmingness with my mom and stuff. Yeah. Yeah. Might not be.

It might be that you spend your time best with mom right now, it sounds to me like. I'm just listening to your voice. Yeah. There's no shame in that. No, there's not. And here's a good way to think through it. You know all the details. When you are 25 years older than you are today and you look back on this season,

which thing are you going to be glad you did? Teresa, I just talked about this on Instagram. I just want to encourage you. This is your season of taking care of your mom. This is where you did. Teresa, I just talked about this on Instagram. I just want to encourage you, this is your season of taking care of your mom. This is where you are. This is not who you are. Just because you're not pursuing that right now doesn't mean you're never going to. Your season is where you

are, not who you are. You do what's right right now, and you'll know what to do next. And when you look back, you smile and go, you did the right thing at the right time. That's right. Whatever that is.

This is the Ramsey Show. We'll be right back. Christy Wright, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. John is with us in Tampa, Florida. Hey, John, how are you? I'm doing well, Dave. Thanks for taking my call. Sure. What's up? So, through a few life events, I was able to pay my house off sooner than what I expected, which left me with a, I guess, a surplus in my emergency fund.

With that being said, should I adjust my emergency fund and invest? What did I say? Adjust it. Should I adjust it down? Because now, obviously, I don't need as much because I don't have any bills everything's paid for and invest the remainder of that well yeah you're it should be three to six months of expenses and what you're saying is you're with the house paid off you got hardly any expenses right I have I literally have zero expenses no I mean you have food and lights and water and insurance.

I like trickle and all that. Yeah, just the basics. And on the flip side, I also drive a 20-year-old car, and so I've also considered maybe purchasing a new car one day, obviously not in this market, but in the near future. Yeah, get you a better car, which also, by the way, will lower your need for an emergency fund. Yes.

Because the transmission going out in that hoopty is more likely than in a decent car, right? Correct, yes. John, have you run the numbers yet of what, you know, your old emergency fund was based on and what the new one is based on with these new, you know, lower expenses so you know about what the surplus is? Just know, haven't sat down and ran the numbers but i figured currently i have about 55 000 an emergency fund my wife and i do

130 so we were figuring probably 25 000 would be yeah substantial okay yeah that'd be fine and then i'd earmark some of the rest of that for the car and then invest the rest of it or maybe have some fun with the rest of it. Whatever. You've done great. You're Baby Step 7, man. You're rocking it. Yeah.

Are you a Baby Step millionaire yet? Yes, I am. Way to go. Way to go. That's awesome. Well done. How old are you? I am 51.

My wife is 52. I'm 51. Good for you. Congratulations. That's amazing. Yeah. My wife is 52. I'm 51. Good for you. Congratulations. That's amazing. Thank you. So here's the thing. As we have built wealth, Sharon and I have noticed we have less emergencies because we own nicer things.

You know, it's like the cars I used to drive were an emergency looking for a freaking place to happen. Okay. They were an emergency. They were. And I was driving my emergency, you know. And then once you get decent vehicles and you've got a little margin, you literally have fewer emergencies. And so I don't even, I mean, the chances of us actually not cash flowing 90something percent of our emergencies just out of checking is pretty low these days. And so, you know, because, again, when you're broke, your life looks like a country song.

Everything is an emergency, you know. And so it does change over time. And it's kind of like oxymoronic. You know, they always say, well, you know, the banker will loan you money only when you don't need it. You know? And it's like, well, you know, by the time you don't need an emergency fund, you know, it's like it does. It seems like that you should not need the emergency fund in the early days. It'd be helpful.

Right. You know? But no, you've got to have it when you're starting baby steps baby steps one through but when you're at seven and you're hitting millionaire status you're making 130 yeah yeah 25 is gonna be plenty dude and you got other money and john get that car i hear it in your voice you're a saver i love that about you that's what's gotten you to this point enjoy some of that money it is sitting there and your car's old yeah he doesn't want to buy it because they're crazy right now it's. I know, but that emergency that's waiting to happen, it's going to come out of that, or it's going to come out of your emergency van,

whichever way you want to look at it. Make sure you get it for Christmas anyway. By the time Christmas gets here. I like that. Go ahead and start planning your Christmas gift. Good goal. Amber's in Minneapolis. Hey, Amber, what's up?

Hi, Dave. Hi, Christy. Hope your day's going well. Sure, what's going on? How can we Hi, Christy. Hope your day is going well. Sure. What's going on? How can we help? I am currently on Baby Step number two. And at the beginning of the year, I started a YouTube channel, which has now opened an opportunity to make some additional income to go towards my Baby Step.

My question is, on my YouTube channel, I try on and review clothing, which requires me to purchase quite a few pieces from each brand. I generally return most of the samples like once I'm done filming, but I'm currently funding this on a credit card that I only used for that. And I only pay the minimum balance, like the minimum due each month until I get the refund. At any given time, there could be up to $4,000 on this card in rotation. Is this an okay way to fund this and chalk it up as a business expense, or should I be approaching it in a different way?

Yes. Yes, you should be approaching it in a different way. Having a credit card for business or personal is a bad plan because of the risk involved, because it's a bad plan to cash flow your business. But credit card aside for a second, and I'll let Dave explain that even more, but you should not be paying for these clothes. These, ideally, these brands should be giving you free clothes to review for the exposure that you keep. For the exposure, you should not be paying to give them business.

This doesn't make sense. So your whole business model needs to be fixed from the inside out, aside from how you're funding any expenses that you have, which should not be on a credit card. But I want you to go to these brands and get them to give you free clothes for giving them exposure. How much are you making on YouTube? So the actual YouTube portion of it, like I just hit the monetization and it's like very small,

$18. Yeah. Like after a month of doing videos, this other platform reached out to me and they pay me $30 for each 30 second to two minute clip that talks about each product. What's your viewership? My viewership, I'm just over 1,000, so still pretty new. But I've made in like the past six or seven months with this other platform,

I've made over $12,000. Okay. So the risk that you're taking from a business perspective, screwing around with $4,000 in order to make $18 or $30 or up to $12,000 over many, many months is inordinate. I'm not sure you've got enough eyeballs yet on the thing to get them to give you the free clothes the way Christy's trying to talk about. But basically what you're doing is you're putting yourself in a position of being an influencer. And the way influencers get paid is they monetize the eyeballs. They come to watch them do whatever it is they do.

And so that's what, you know, and obviously YouTube will pay you and other platforms will pay you as well if you can get the eyeballs. But a thousand is not a bunch. You're getting there, though. I'm glad you're working this. So what's your household income overall? So my normal 9 to 5, I make about $86,000. Okay. I want you to set aside $2,000 for this business,

maybe even out of the business income, or $3,000, and just prime the pump one time. for this business, maybe even out of the business income or three grand, and just prime the pump one time. By that, I mean open a separate checking account that is just for this clothing exchange process. Because if you get stuck, if one of these companies, let's say you bought $1,000 from somebody and they just said, oh, we're not taking that back, you wore it. And so your little return refund program doesn't work anymore. You now ate that. And guess what?

If it's on your credit card, you now have credit card debt. And so this is the risk that happens because there's one thing we're sure of in business. There's three things we're sure of in business. It's going to cost twice as much as you think it's going to. It's going to take twice as long as you think it's going to. It's going to take twice as long as you think it's going to, and you're not the exception. Those are the three rules of business. And it happens to me around here all the time.

I have some great idea. I think this is going to work. And we put it out there. And six years later into the gold planter, Christie's Gold Planner is a mega successful product. The first year, eh, wasn't sure it was a great idea you know well a lot of dadgum work for not much money you know and so now it has turned out to be a thing but it took twice as long as we thought and we're not the exception especially and uh

no matter how enthused or enthusiastic or um I am or Christy is, it doesn't matter. You know, we still got to, some things have to cook up. They're like good gumbo. Yeah. You know, and so in the meantime, you're carrying credit card debt. And I'm not going to ever advise that. You called the Ramsey show. You called Dave Ramsey, Christy Rias because of my credit card.

You knew that wasn't going to work. I mean, you called the Ramsey Show. You called Dave Ramsey, Christy Rias, because of my credit card. You knew that wasn't going to work. I mean, that is predictable. We're consistent. This is the Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head to theramseyshow.com.

Thanks for listening.