The Ramsey Show - App - Transform Your Heart While You Transform Your Finances (Hour 1)

Episode Date: October 28, 2019

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Music Music 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. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Jamie's starting off this hour in Missouri.

Hey, Jamie, how are you? Hi, I'm good. How are you? Better than I deserve. What's up? Thanks for taking my call. So I have a question. It might sound like a small, silly question to somebody,

but this seems like a lot of money to us, so I wanted to ask you about it. We're about $70,000 in student loan debts right now. We've been trying to kind of work through the second baby step, so we've been throwing everything we've got towards the loan. And as of recently, I feel like I need a new cell phone. We're going to put $350 to buy a new phone. And I know that that seems like a lot of money to us just to put down on the cell phone. But I feel like I have legit reasons why I think I need to get a new one.

We have a lot of changes coming up in our lives recently. I just wanted to get your input on that i guess 350 down just to pay a cell phone no like the full price i guess oh to buy it to buy it to buy it what's your what's your household income so i'm the only one working right now and i make 45 to 50 000 a year pre-tax. That's with overtime. And your husband doesn't work why? He is currently finishing up PA school.

He had a job. He worked at Walmart just like shelving meat. When will he be finished with PA school? Sorry? When will he be finished with PA school? He graduates in December, about a week before we have our first baby. The reason a question like yours is important is not because $350 is important in the scope of your life. It's because you're making a judgment call here on what you're focusing on and what you

value. And that's why it's important. And if you're focusing on finishing PA school so that his income comes up and we're trying to get out of debt, and I've rationalized the purchase of something that I shouldn't be purchasing, that's a bad thing. If we're buying something that is a necessity, that's certainly an okay thing. We do want you to buy food, and we do want you to keep the lights on.

And so why is it an upgrade in cell phone is a necessity and not just a want? So I've had, I mean, we're kind of crazy, but I've had my phone for almost seven years now. So what? Does your phone work? It does work. So why is an upgrade a necessity? So why is an upgrade a necessity? So why is an upgrade a necessity? Because I want to take pictures of a baby when he's born,

and my phone has half a camera, and his doesn't. It's even worse. Honestly, is that a stupid reason? But I just want to have good pictures of my child. No, it's a rationalization. You don't use a cell phone for a camera when cameras are cheaper, if that's the only reason you're buying it. Okay.

They'll get you a cheap camera. They'll get you a little digital camera and take lots of pictures of Junior for $50. So unless my son... You don't own a camera? I mean, we do have a camera, yeah. You have a digital camera? Yeah, I mean, that camera's about 10 years old, so it's pretty old. Okay, so...

And the camera on your phone takes pictures too, right? It does, yeah. So you have two ways to take pictures of the baby. You do what you want to do. You call me and ask me this question, so I'll give you an answer. You have rationalized an upgrade on the emotion of your child, and as an exercise of your value system, that's something you need to break. This is a test.

Are you going to pass the test? Because the description you've given me of why you want to do this is definitely a luxury. It's definitely a want. There's no one's life in danger. It's not a necessity of this household. You have the ability to take pictures of your child. They're not going to be damaged and in counseling when they're 30 because there's no childhood pictures of them.

You just want the upgraded phone, and you figured out a way to blame it on your baby. And you've got to stop that kind of decision-making process. That's why it's an important question. And so I appreciate you asking it. I had to do this too, kiddo. I mean, I was in exactly the same thing. I'm the guy that used to think when I went into Costco or Sam's that the reason they checked your receipt on the way out was I thought it was federal law you had to spend 200 i'm a

spender by nature i can rationalize my butt off on something that i just want and one of the benefits of me going broke was that got fried out of me not to the point that I'm so frugal now I can't breathe. I actually still have that spender gene inside of me, and I actually do enjoy buying some nice things. Now I can afford them. But I had to reach this point in my spiritual growth and my emotional maturity that I did not use a false decision-making paradigm to make a purchase. And when I got past that, then I enjoyed the purchases that much more rather than back when I used to just go, oh, well, if we don't do this,

it's just a one-time thing, and if you pass up on the one time. I've got all the rationalizations down. I used to use all of them, and it got me in trouble. And so, you know, one of the things that you do is you transform your heart while you're transforming your finances. And this is a test. Don't flunk this test, because the next test will be a minivan, and it will be $35,000, not $350. There will be another test following this. If you flunk it, you get to take the test over.

That's how tests work. And so it's an important question. Although it sounds trivial, and you were a little bit afraid it was trivial, it's a heart question, and you're creating a new muscle in your heart the way you make decisions when you pass this test. So it's a very important test. We all have flunked this test in America at times. Congress flunks this test every day. And it causes overspending with rationalization.

And it's hard. It's hard. And I'm not going to make fun of your pick on you because of the triviality of your question. Because down inside of that question is a very important question. It's a very important test. This is a test of the Emergency Financial Peace Network. All right, Zane is with us. Zane is in Missouri, too.

Hey, Zane, how are you? Great, Dave, how are you? Better than I deserve. What's up? Got a quick question for you about a house. A little bit of background. I just graduated college debt-free. Congratulations. What's your degree in? Thank you. Business Administration.

Wonderful. Good for you. I also just got engaged and planning on getting married next fall. Big year. Thank you. I have an opportunity to buy a house, and I'm following your principles. I've got an emergency fund, plus I've got some cash. All right. I tell you what, when we come back from this break, we'll hear the rest of your story

and give you a good, solid Dave Ramsey answer. This is The Dave Ramsey Show. We'll see you next time. options? Do you wish you could find an affordable biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accred organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years,

and our members have shared over $2.5 billion in medical bills. To learn more, Thank you. All right, we're talking with Zane in Missouri. Just graduated from college, business degree, debt-free, getting married, and thinking about buying a house. That's about how far we got in the conversation. So tell me the rest of the story. Yeah. Basically what it is is I've got the opportunity to buy a house from my parents. It's a house that they've had as a rental for a while.

And to be honest with you, the last set of renters didn't leave it in the greatest shape and not really wanting to be in the rental business anymore. And I actually like the house and I've got the cash to do a remodel to the house. He has offered me basically to do like a rent-to-own through him with no interest that I could basically have the house paid for in six years, a little over six years, actually. But I was going to say, is it better to go to the bank and borrow the money rather than owe money to my parents?

Yes. I don't know. Yes, it is. The borrower is slave to the lender. The law of gravity says that when you jump off a building, you will go down to the sidewalk. And there are no exceptions. Now, you can have a nice master or you can have a mean master, but you are always a slave with a master when you borrow money, 100% of the time.

And so Thanksgiving dinner tastes differently. always a slave with a master when you borrow money 100 of the time and so thanksgiving dinner tastes differently and it might not be so much for you as it is it just makes your new wife feel weird okay because she owes them money and she took your mama's baby boy away. And she owes them money. It could change the relationship between her and your mother, which is already a difficult relationship, by the way. Okay? Yeah.

Yeah, so don't do it. Don't do it. Don't do it. If you're going to do the deal, if you're going to do the deal, do it with non-family debt. And I love the idea you set it up to pay off. Now, my question is this. When I was your age, the mistake I would have made would have been because this is a bargain, it's a project, and it's going to result in a nice house after you're finished that you can make some money on and that's all you're considering and if i'm you and i'm your

age a hundred percent of the time i would have been over the moon enthused about this idea to the point that i really wouldn't have to the point that i really would not have given my wife a chance my wife to be a, to speak into this deal. I just would have done it. Right. Don't do that. Okay. Make sure that all of the reasons that you have in your head that this is awesomeness beyond belief are quieted,

and you keep your mouth shut, and you let her actually express what she thinks of this deal. Because I'm not sure it's a good idea to do a rehab in your first year of marriage. It's a good reason. It's a poor way to start your marriage. Right, right. Now, I was actually planning on having it done prior to us getting married. Oh, that's good news. That's good news.

Yeah, because we're not getting married until September, and actually, basically, me and her had already decided we were going to buy the house. We just hadn't decided, and which now she's not living with me, so we get married, obviously. But we... Yeah, so the big thing is make sure she's on board, and she's not on board because of Zane's zealous passion for this deal. Make sure she really, actually, actually, really, really, really down inside thinks this is a good idea.

Spoken by a guy who didn't used to do that very well. Took me about 38 years, which is how long we've been married. So I tend to see what needs to be done and get about the business of doing it. Then I'll ask your opinion after I'm done. And this is not good relationship. Oh, not a good husband. So be a good husband, Zane. All right, number three is Juan in Maryland.

Hey, Juan, how are you? How's it going, Dave? It's an honor. Honor to speak to you, sir. How can I help? So this is a career question, actually, specifically beginning my career. I have a good problem with my hands deciding between two interesting offers, essentially narrowed down

between a high-risk, high-reward career offer working for an entrepreneur whom I've known for a few years and runs a few businesses. And he wants me to help him expand into new businesses, and he believes I'm someone that's dedicated and will work with him, and he's had trouble finding the right people, and he's willing to put me under his wing. That just came up last week, and I've had an offer to work for a big company, a stable company at a great salary, and honestly, it was the perfect offer, and now it's made me doubt because the offer to work for the entrepreneur

aligns more with my long-term goals of being a business owner myself. The offer for working for this company is not specifically entrepreneurial. So what is the company offering you money-wise? They offer me $85,000 starting salary plus a $10,000 signing bonus. Great. So you just graduated from college? I graduate in May. Okay.

And in what field? It is in financial services, but I'll be doing some data analytics for the company good for you wow data analytics coming out of undergrad undergrad that's right yeah coming out of undergrad bank at 85 so wait good for you and the company's going to train me they're going to train me so that's attractive as well to me about that offer. Very attractive. So what's an entrepreneur or high-risk guy going to pay you? So a little background with him. He was my wrestling coach back in high school

and had to leave the team to run his businesses, and he's been doing very well. And what he said to me was, hey, I know you work hard, but I need to motivate you to work hard so I'm not going to pay you as much as he knows about the other offers I have. He wants me to have skin in the game, so he's offering me, and I'm sure I could negotiate with them, but between $30,000 and $40,000,

he wants me to be hungry and get after it. So that's a consideration as well with him. Have you noticed that no one stayed with him? He doesn't have anybody, and that's why he needs help? So that's a good point. You know why? Because he keeps all the freaking money. That's why.

If it was 65 or 70 with increases based on your bringing value to the guy and showing that you're bringing in more than you cost, fine. He's just looking for slave labor. I'll pass. I see. bringing in more than you cost fine he's just looking for slave labor i'll pass let's see so i mean that's an interesting point i'll definitely have to think about i do think he had some partners working for him um he's somebody i've known for a while um you know i'm sure in the business world especially entrepreneurship you know yeah he's also known you for a while and he also knows you're worth $85,000 in the open market. We've proven that.

And so it would be valuable for you to go to work for a guy that has an entrepreneurial thing rather than the big company, but it's not worth $50,000 a year. And that's what you're paying for this opportunity. Right. You're writing him a check for $50,000. Right. Uh-uh. I hear you.

Uh-uh. Let me ask you, though. So, we were just in the beginning of the conversation last week. I at least wanted to get more information about, you know, what it would imply to me working for him. If I do meet with him again, what things do I need to get, you know,

on paper or just clear to myself, things that you would tell maybe your son? What would you, ask yourself, how big a check would you write him to get to work for him? How big a check would you write him to get to work for him? How big a check would you write him? Because I'm going to tell you, don't take the job now. Okay? I would not write him a check for $50,000.

If there's some upside and he can show you where the upside is financially to you other than you just being mentored by him, which I'm not sure he has anything to give you because he's never really grown any leaders. If he had a room full of other leaders that he'd grown that were loyal to him because he was such a good world-class leader himself, then fine. But he can't keep people is what you told me, and I think we figured out why. So, you know, I'm going to get in writing exactly what has to take place in order for me to be winning and in order for me to get raises and in order for me to participate in the profits. And if I like all of that, I might take 65 or 70 and give this a run. That's it. In the lobby of Ramsey Solutions, Cortland and Emily are with us on the debt-free stage.

What's up, guys? Not much, Dave. How are you? Better than I deserve. Where do y'all live? Rochester, New York. Wow, that's a bit of a haul to Nashville. Yes, sir. Welcome, and all the way here to do a debt-free screen. Oh, yeah.

How much have you paid off? $86,751.78 in 35 months. Way to go. And your range of income in that 35 months? About $40,000 to about $92,000. Whoa, nice jump. What do you all do for a living? I'm an architect.

I work in a perinatal office. Okay, very good, very good. So how did the income double? One of you got a job that didn't have one when you started? Well, we started before we were married, and once we got married, Emily moved to Rochester with me. Ah, that makes a difference. Yeah, and then we combined our finances, and then we were just taking side jobs. Gotcha.

So you've been married a little less than three years? A little over. Yeah. A little over three years. Yeah, our anniversary was October 15th. Oh, well, good. Happy anniversary. Thank you.

So what puts you guys, obviously you're getting married. You start looking at the money situation. You're going, oh, crap, there's $87,000 in debt. What kind of debt was this? Well, most of it was my school loans, and then we also had some cars and a couple credit cards our wedding rings our wedding rings okay important stuff yeah so uh emily looks up and goes i'm marrying an architect and he's got a lot of student loan debt yes so what what does this conversation sound like and what got you guys started on this journey um well i was introduced to fbu through my church and i attended um when i was younger i didn't really apply anything i

learned you know one of those kids that's too smart you know and then um once i introduced court to fbu um we decided that once we got married it was something that we wanted to do and he was the nerd that I needed to actually hold me accountable. And then once we got married, it was game on. Okay. Well, architects like a system, and they like a process, and especially a proven one that's repeatable. Yeah.

Very good. Okay. So game on. We decide we're going to get after this. What was the hardest part of that three years for you? Your first three years of marriage, all you did was pay off debt. Yes. Basically, yeah.

The hardest part, everything kind of just clicked with me, and it made a lot of sense. And I think the hardest part was I just got fired up about it and trying to tell other people about the system that I'm so passionate about. I think that was the hardest part. And seeing some people go another way or it was hard for me to see people around me not doing something that's working so good for us. What about you, Emily? For me, it was just finding the balance between being gazelle intense and still having some little bit of a life. Yeah, food.

Food. Yeah, things like that. You know, just understanding that we still have to live. Okay. And so there's a little bit of natural tension in the air through the process. Yeah. That's good. That's good.

Well, free spirits and nerds usually have that. Exactly. And that's a very healthy thing. The good news is you learn to manage that as one of your first orders of business in your marriage. Oh, yeah. And that gives you the ability to attack a lot of different problems or opportunities that come up. And they're kind of the same thing sometimes. So well done, you guys.

Very well done. All right, now you did it. You paid off $87,000 in 35 months. What's the secret to getting out of debt? The secret is the budget. That alone, I think, is the key piece to any couple's finances. I think just following the budget, doing it every single month, and coming to agreement on that, I think, is the most important piece.

How hard was it to stay in agreement? Depends. It depends on, yeah. Depends on what the disagreement is about. As to whether he was wrong basically yeah yeah that's great i love it good for you guys it's a big deal and again that it forces conversations that most couples never have and you managed to do it in the first three years of marriage absolutely and that's that's very, very healthy. Sometimes it didn't feel healthy, I'm sure.

But sometimes a little tension in the air. But there's a lot of good that came from that, obviously. So it is interesting for us nerds, Cortland, that when we actually start applying stuff and we can see the math instantaneously and we go, oh, we'll just do this. And then you find out there's human interaction in the way. Yeah, exactly. I could just sit in the office all day long and then go to sleep and do it again.

Yeah, just crank it. Just do the process. Just collect the check, pay the check out. Collect the check, pay the check out. This is not rocket science until humans get involved. Right. It's such an interesting process to grow up in. Very cool. the checkout this is not rocket science until humans get involved right yeah it's just it's it's so it's such an interesting process to grow up in very cool how's it feel

it's uh it's relieving you know i mean we plan out everything so even this trip down here we had everything planned out and it just feels good you You go out to dinner, and it's like we can get whatever food we want because it's part of our plan and our bills are paid. So it's just that relief of knowing that everything's covered and we can just enjoy our lives. I think that's where the peace comes from, the financial peace. Definitely. Yeah. I mean, you can go to dinner in Nashville, enjoy your time here. You make $92,000 a year.

You can drop whatever on a dinner. Right. Pay cash for it. Not a problem. And enjoy the night. Then there's no aftertaste, you know, like the next day, like a financial hangover from the dinner. Right. Right.

And you don't go, oh, what did we do? That was so dumb. And, you know, all that kind of stuff that most people do when they live. They live their whole lives that way, and you just get to do it. Right. You live like no one else. Later, you can live and give like no one else. Who were your biggest cheerleaders outside the two of you?

I would say our families were very supportive. But really, anyone who we told that we were following the plan was in support of us and cheered us on. So it was really nice to have just a big group of people who were on our team. But none of them would do it quite to suit Cortland. No. I don't think anyone could. Right. Yeah, I have very high standards for myself, so.

He's trying to talk all these people into it that wouldn't do it. He said, oh, I love it. It's easier to cheer for someone else who's doing it. Right. That's different. Very good. Well, well done, you guys. Very, very well done.

We've got a copy of Chris Hogan's book for you, Everyday Millionaires. You're well on your way to being that. You're debt-free. You make good money. You know how to work together. You've got all the stuff. Turn the page. Go to the next chapter and become wealthy and outrageously generous in the process.

Way to go. We're very proud of you here. Well done, well done. Cortland and Emily from Rochester, New York. $87,000 paid off in 35 months, making $40,000 to $92,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free scream three two one

i love it congratulations you guys very very well done that's how it's done folks that's how it's done so the question is what are you going done. So the question is, what are you going to do? I ask you this question all the time because sometimes some of you listen to the show for the mere entertainment of it and forgot along the way that we were actually talking to you. Yeah, you. Yep, you. That's the plan. You need to do this. And you're driving down the plan. You need to do this. And you're driving down the interstate right now listening to this.

You're on the running trail doing your morning run, and you got the podcast out. And I recorded this five weeks ago, but you're just now getting around to listening to it. But today's the day you were supposed to listen to it. Because today's the day you are supposed to listen to it because today's the day you are going to decide this is actually you we're talking to yeah what would it be like to have no payments no master card no american distress card. No American distress. No discovered bondage. No fleeced payment.

And no private room for Sally Mae in your home. Not even a house payment. How would that feel? How wealthy could you become? Yep, yep, that's how it works. This is the Dave Ramsey Show. We'll be right back. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. That means even if you goof up, if you mismeasure, you pick the wrong color,

you open the blind, you look at it, it won't fit in the window. You ever had that moment? Ah, dadgummit. Then you realize what you did. They'll remake the blind for free. They just cover even your mistakes. And they got free samples and they got free shipping and they got new promos. Always use the promo

code RAMSY. Saves you money. Kurt is in Virginia with our question. I'm a college student with no debt. A small emergency fund. On track to graduate 100% debt free in the spring of 2020. Ding, ding. I have an indeterminate credit score, and I decided to look into freezing my credit since I will not be borrowing money.

After trying all three credit bureaus, one runs me around their website. Another refuses to freeze it without sending data via certified U.S. mail. And the third refuses without circulating me through their call system. Is this unusual, or should I expect to spend this much time to freeze my credit? No, you should not. Usually on all three websites, it's fairly easy. Mine has been indeterminate for decades.

We froze mine, I guess because you've actually had never had any interaction obviously we had interaction and then it just wore off and got old and we didn't borrow money and so all my history was too old to determine a credit score but there was at least a contact and known human being on the other end they're probably trying to prevent some kind of identity theft so i would still lean in and push through even if you have to send a certified letter or whatever and that way you're you at least are getting logged on with them because i think the problem is is that you've never had an established relationship even with them which is not really a problem except for the that's what's holding up the freeze. But most of all three bureaus have a thing on their website where you can just step in and freeze it.

It used to not be that hard, but I'm not aware. That's my guess. That's my best guess in your situation, Kurt. I would also not let that cause you to do anything except become that much more resolute to avoid ever having to deal with FICO or any of their minions ever again. Aren't those minions those little yellow guys? Yeah. Jeremy is in North Carolina.

Hey, Jeremy, how are you? Hi, Dave. Great to talk to you. You too, man. What's up? Well, I'm recently married within the last couple of weeks, and I'm also newly married to your podcast. It's been really awesome to listen to,

and I think it's finally pushed me to the point to where I'm ready to be one of those that's not the 70% living paycheck to paycheck. Good. My question is, I said something to my wife the other night about, you know, getting into the FPU and, you know, combining our finances and everything. And I understand her hesitancy because you know I told her about my past with being reckless with money and spending spending everybody else's money and everything and and I understand that you know she's concerned

but how do you how can how can we combine our finances, and is there anything that I can do to ease her anxiety in that? Because, you know, I'm ready to – I want to do this right. Too late. She married you. If she was that dad-blamed concerned about you being a complete ne'er-do-well who doesn't take care of life and is irresponsible. She probably shouldn't have walked the aisle. Well, that's, yeah. So I'm willing to marry you and put my entire future at risk by your misbehavior and your irresponsibility,

but God forbid we shared a checkbook? That's not logical. Oh, I agree. Okay. So let's just keep talking it through and say, honey, the number one cause of divorce in North America today is money fights and money problems, and the number one point of discord in almost every marriage is money. I don't want ours to be that way.

I love you too much for us to live a life that way. Let's go through this class together so that we can get on the same page and if we don't want to do it we'll decide that together but we need to go through and get the information and have these discussions and learn to put ourselves on the same page um we don't have to combine our finances initially let's just get in this class together and go can you do that she's willing to go oh good then it'll take care of itself you go through financial peace university for nine weeks if you go through financial peace university for nine weeks with your spouse and you don't combine your finances your brain doesn't work well i will i will i will completely i will completely convince both of you by then

yeah we're we're just saving up to to actually buy the membership thing right now. I'm thinking probably within the next month. How much do you make a year? I only make about $30, and she makes about $20. She makes $50,000 a year and $100 you can't find? Well... You don't have to save up for $100. You spent that to fill up their truck establishing a

house you do what now i said we're we're in the middle of like setting up our house right now because we both started with nothing essentially yeah okay all right that's fine but um yeah you desperately need to go through the glass if you don't have $100. I mean, that's a bad thing. So hold on. We'll pay for it as your gift, your wedding gift. But both of you have to attend, and someday when you're rich and famous because you learned all this stuff, you have to pay for 10 people to go. And that's the result of me giving it to you for free once.

That's my rule. Open phones at 888-825-5225. Connor is in Tennessee. How are you, Connor? Good. How are you doing? Thanks for taking my call, Dave. Sure, man.

What's up? So I just finished Baby Step 3, and my company is now offering Roth 401K. Great. And I guess, does the Roth, i guess match uh just like a traditional um would match well you the match is not in a roth but if they offer a regular 401k with a match the roth 401k will have the exact same match same okay and then so i guess should i my next question and that'll be the last thing, should I, I guess, do the 6% and take the other 9% and do something else investing with it, or should I just put all 15%?

You can put it all in there if you want, as long as you have good options. Okay. As long as the mutual funds have good options. Now, the portion that the company gives you will not be growing tax-free. It is in the traditional side. And the portion that you put in will be in the Roth side, and it will grow 100% tax-free. And that's the only difference. And the match is never inside the Roth.

You have to pay taxes on that because you've never paid taxes on that income yet. That's what it amounts to. The money you're putting into the Roth is after tax, so you've already paid taxes on that income. And then it grows tax Roth is after tax. So you've already paid taxes on that income and then it grows tax free after that. So the other thing you can do later and you want to do this after you get your house paid off is you can go back and roll any of the portion that they gave

you. That's in a traditional, you can roll it into the Roth that will create taxes on that amount, but no penalties. And I would do that sometime in the future, but I don't want to create a tax bill until you've got your house paid off. I don't want to go any further. I don't want to use up the money.

I want to use that money to get out of the debt first. Good question. Open phones at 888-825-5225. Mike follows me on Twitter. Dave, was the one-fourth of take-home pay used for rent or for buying a home, does that include utilities? No, this is just your rent payment or your house payment. In the case of your house payment, it's PITI, principal interest taxes and insurance. In the case of the rent, it's just your rent.

But utilities, the HOA fees, I don't put in there, all that stuff, that's not in the fourth. You're going to pay those out of your budget anyway. The point is not to be exactly 25% versus 24.5% or 26.7% or whatever. That's not the point. The point is just don't become house poor where your whole stinking paycheck goes to pay for your house. You just struggle financially when you do that. And when I can keep you down at that fourth number of your take-home pay, that keeps things pretty reasonable,

where you've got a little wiggle room to be able to succeed financially. That puts us out of the Dave Ramsey Show and the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host, and we'll be back. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.