The Ramsey Show - App - Treat Your Student Loans Like They Are the Enemy and Must Be Destroyed! (Hour 3)

Episode Date: January 27, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Christy Wright, Ramsey personality, is my co-host today. Open phones at 888-825-5225 that's 888-825-5225 abigail is in orlando starting off this hour hi abigail how are you hey dave i'm doing good thanks for taking my call today sure what's up So I have been saving up during the forbearance period because I just graduated in May, and I have over $140,000 in loans.

Good Lord. Are you a doctor or a lawyer? Nope. I am a first-generation college student who didn't realize what I was getting into going to a private university down in West Palm Beach. So now I'm aware, but I got a computer science degree, so hoping that that'll at least help me somewhat to be able to say what's wrong. Absolutely. Have you landed the tech job yet? Yes.

I've been working since September in actually a company down in Palm Beach Gardens. So I'm working there. I've been working there for a while, so it's been a good fit. What are you making? 67 right now. Good, good. And that's your first job out of college. That's nice.

Good. So you got a good information systems or technology degree for four years, computer science degree. And that sets you up to, you know, if you will keep reading, studying, and stay cutting edge in the tech world, your income's going to double in the next three to five years. Yeah, and that's my plan. I'm working on some certificates right now for security, so that's good. Yes, excellent. Well, it'll more than double if you go into that side.

Yes, yes. One of the hottest segments in all of technology right now. Very well done. That's a good choice. Thank you. And I have some managerial experience from college too so hoping that'll help boost possibly management and cyber security but today i was just calling because i've had some friends recently and uh saying i should be saving

for a down payment uh for a house in florida yeah your friends are broke and you don't need to take financial advice for broke people you have 140 $140,000 in student loan debt. That's a crisis. You've got to get rid of that. Yeah, that's what I was thinking, too. But my mom said, you should call Dave Ramsey. So I was like, okay, mine's well. Your mom set you up.

Mom's got some sense. Mom set you up. She knew what I was going to do to you. That's right. She's like, the friends are giving bad advice. Let me send her to the guy. Listen, Abigail. Yes, yeah.

You need some R&R. You need some roommates and rent, not buying a house. You need roommates and you need rent, cheap rent, while you pay off this debt. That's the focus. And if you get gazelle intense, like we talk about, you put those blinders on and focus on it, you will knock it out. You will knock it out. And then you can save her house and do all those fun things. But right now, that's a huge thing to weigh you down, especially so early in life.

Did you buy a car? Yeah. It's completely paid off. I did buy a car, but it's paid off completely. Good. What's it worth? It is, when I bought it, it was $17, and that was two years ago. It's a Camry, so I'm hoping it'll last a while.

So R&R, Christy's right. So here's the thing. If I woke up in your shoes, you've got nothing but huge potential, and the main roadblock to you being very, very wealthy in the next 15 years is these stupid student loans. And so you got to treat them like they are the enemy and they must be destroyed. They are the evil empire. Yeah.

And we get mad every morning when we get up at student loans and give Sally May her eviction notice out of your life. So let's play with some numbers. Okay. You live on nothing. You take all the extra gigs you can get in the technology field, and if you put $50,000 a year on student loans, you're done in three years. Now, 50 out of 67 doesn't work, but your income is going to be going up and in the meantime

you're going to get cheap rent and roommates and you're going to take extra jobs until the income does come up but i predict three years from now you're going to be making a lot of money if you'll keep on the security path and keep doing this stuff and just work like a maniac and put it all on this because because you're what you're 23 or 22 22 22 so by the time you're 25 you're debt-free yeah now and you're making 100 110 yeah now you can save for a house kiddo yeah yeah definitely thank you so much guys i appreciate it thank you yeah well are you gonna do that oh yeah i already actually have um it's not an iq but i'm i'm gonna be rushing on the side we just started are you gonna go get out of debt in three years like we talked about yes yes sir i am okay we're holding you to it i can't i can't wait to hear from you

i want to hear your debt-free scream on the show, okay? I will. Thank you so much, guys. All right. God bless you. Open phones at 888-82. That felt a little too easy. Here's the thing.

If she starts doing some freelancer, doing some stuff on the side, you can make some good money in the technology field with what she knows and what she can do. She can get that extra income up ASAP. And she's used to living on nothing. She's a broke college student. Yeah. So keep living like a college student. She can dig out of that ditch real fast.

Yeah. You don't have to run up a $70,000 lifestyle just because you're making $70,000 at 22 years old. Don't listen to your friends who say you need to buy a house right now. Your friends. Friends. The friends. The friends. I love it.

If your broke friends are giving you financial advice, whatever they said to do the exact opposite. Oh, my gosh. Open phones at 888-825-5225. Time to put 2020 behind us. If you're ready to own 2021, actually accomplish your goals with money, your career, your life. We've got the plan. Last year left people wounded and stressed out. Dr. John Deloney comes along, writes our quick read,

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Living True, 40 Days to Get Back to You. The Devotional is there. These are all things that have just come out in the last few months, not counting the Total Money Makeover. It's always on the bestseller list perpetually. But these things are all bestsellers. They're all things that will help you get ahead. You've got to put new stuff in your brain if you want new results. It's a pretty simple formula. And I don't know which area of your life it is you want to work on, but we're going will help you get ahead. You've got to put new stuff in your brain if you want new results. It's a pretty simple formula.

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I'm currently in my third year of college. I have the fortunate chance of receiving enough scholarships to pay for all four years. Therefore, I have zero debt and will graduate as an engineer student. From working, I've saved a little over $5,000. I would like to start a business. I've been looking at e-commerce, such as drop shipping using quality product and not cheaply made product. How much money should I put into this business for marketing and resource? Do you have any suggestions?

You know, I get this question a lot, Dave, and I think, and I think sometimes people are asking different things when they're asking the question. The first thing I wanna clarify is you never wanna take out loans, not even a business loan. A business loan has to be paid by someone, and that someone is you, so we don't recommend any type of debt, not business debt, not any type of debt.

But when it comes to a startup, I just always recommend that people start small and grow slow. So what's the minimum amount that you can put into this business to get it off the ground where you begin to turn a profit and the business can then fund itself and grow at the speed of cash? The reason we like to recommend this is not just from a financial risk standpoint, but you want to validate your idea. You want to prove your idea. You're also going to learn a lot in those early stages, those first three, six months, year in business about what your customer wants and what you need to do better.

So I would just say, what is the minimum amount? You've got a little bit of savings. I don't know what other life transitions you're going through as you're about to graduate. But, Vic, I would say a small amount of savings that you cash flow to get it off the ground, prove the idea, and let the business fund itself from there and grow at the speed of cash. Dave, what would you say? Anything? That's exactly what you do. And so 1,000, maybe 2,000 of the 5,000 max.

And I'll just tell you, I'm seeing a – in the verbiage that you're using, I'm sensing a warning. Okay? Warning, warning okay warning warning warning one of the uh in our world where we teach people about how to run a business and how to grow a business christy's world in my world you know with business boutique and with entree leadership um there is a there's a lot of people like you vick that have a desire to own a business and run a business and And that's where it starts and where it ends. They really haven't said, I want to do a business doing X. They just say, I would like to own my own business.

And what do they do? They Google, own your own business, right? And what comes up is a horrible thing that we see quite often. And Christy and I see people, we see bodies littered on this salvage yard, and it's called Business in a Box. And it's this idea that if you pay someone X number of dollars, they're going to show, you know, if you buy our kit for $500, we'll show you how to do drop shipping on eBay and drop shipping and set you up.

And it takes no cash, and you're going to get rich. And it's easy, and just give us the $500. Well, what you just discovered is that they have a business. Right. You are the customer. And they are selling a business in a box, and there's no such thing. Yeah. The closest thing to a business in the box that actually is a real thing is called a franchise and you might consider that but that is tens of thousands of dollars at a minimum

uh into something and so do not do drop shipping that some goober on the internet told you was going to make you rich and you pay him a fee to learn how. Because all you're going to do is pay him a fee, and you're never going to get anything going on. So this is one of those things. It's like the other one that comes up is if you want to work for yourself, medical court reporting always comes up. And it's like, you know, you don't pay somebody $25,000 to be a medical court reporter.

It's just, it's just, it's just. So instead, you need to start searching and saying, okay, I'm an engineer student. What's that got to do with drop shipping? Nothing. So I don't mind you starting your own business, but I want it to come out of your soul. Yes. Not out of a Google search. Yeah.

What do you want to do? What are you excited about? What are you good at? I tell people all the time, start with what you have, your skills, your strengths, your stuff. You're an engineer student. What can you use in some type of business that you're passionate about that you actually care about? If you're doing mechanical engineering, maybe you need to design something. Yeah, here's the thing.

Business is hard. It's awesome, but it's hard. So if you don't love it and you're not excited about it, it's going to be really hard to push through the hard times about something that you just came up in a Google search that you don't really care about. Another way to look at it is what problems do you want to solve in the world? Some of the best businesses come out of problems that you solve for yourself or someone else or something you see that needs to be better and you go innovate. That's what's wrong with this. The only problem this solves is he makes money. He didn't say, I want to help people.

He didn't say, I'm going to provide a service. I'm going to provide a goodie. I'm going to provide an item. I'm going to provide something. I'm going to do drop shipping. I'm going to sell people crap that they don't even need. And I'm going to be the middleman. You read this on the internet, Vic.

That's the problem. Yeah. read this on the internet, Vic. That's the problem. Yeah. I can just smell it, man. I'm not 100% sure, but I'm 98% sure. It's just a bunch of words. It's not any heart. There's no heart in this question. Yeah.

You know, you need to feel that. You do need to start a business. I'm okay with that. But it needs to come out of your guts and not out of Google. That's good. Somebody stitch that on a pillow. Guts, not Google that on a pillow guts not google on a pillow maybe not i like your alliteration i like where you're going maybe not maybe i like the alliteration i'm not sure i want it on a pillow sarah's in spokane hey sarah welcome to the dave

ramsey show good afternoon thanks for taking my call. The reason I'm calling is my husband and I need some help. My father-in-law is trying to convince my mom, my mother-in-law, to close out her inherited IRA because he's convinced that the stock market is going to crash. So I want to know is how can I convince them to keep the money in the ira or should i have them move it it's hard to have it's hard to convince anyone who is suffering from political paranoia to do anything because he's bought off he's bought off on the idea that joe biden is the end of the world right and um you know every president that has been elected since i've been an adult was going to bring about the end of the world by the people that didn't

vote for him and none of them did you know i i yeah i totally agree i don't know i, how are you going to get in his head? I don't know. I mean, he needs to turn off Fox News is what he needs to do and turn off CNN and quit looking on these stupid butt websites. Because there's no historical data anywhere to indicate that a single party, no matter how crooked or incompetent a president is, has the power to destroy America. There's no data. I mean, there's no time in history, no matter, you can find the worst possible presidency in history,

and you can argue about what that is, and the stock market did okay. Yeah. So he's wrong he's wrong you know we can we can talk about whether we agree with the fact that he hates joe biden or whether we agree with you know he went down a trump rabbit hole of some kind we could talk about all that as a separate subject if you want but that's not a point the point is i regardless of whether i agree with all the crap they're doing up there, I've never agreed with all the crap any of them have done up there, but I keep investing, and I've always invested, because the data says, the historical data on the stock market says,

no matter what moron is in the White House, we still seem to be able to make money in the dadgum stock market. Right. That's the only thing I can tell them there's no that's what i keep yeah i would just say that dad there is no nothing to indicate that your paranoia is accurate okay and you're gonna you're gonna lose a lot of money let me give you another example okay how about this one covid is going to bring the economy to money. Let me give you another example, okay? How about this one? COVID is going to bring the economy to its knees, and it will never get up.

You remember that one? I do. And the stock market dove way down in March and April. Remember? I do. You know what it made last year? Almost 16% rate of return from January to January. And that's in the middle of freaking COVID trying to destroy our lives. It made 16% last year.

So if you freaked out, if you had a COVID freakout and pulled all your money out of the market, you missed 16% on your money. Wow. This is the Dave Ramsey Show. Do you feel like you'll never save enough money or pay off all your debt after a year like 2020? Most of America feels that way. But money shouldn't be one more thing that you have to worry about. That's why in 2021, we're hitting reset. Because no matter what's happening in the world, you can take control of

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go to DaveRamsey.com slash reset Thanks for joining us, America. Christy Wright, Ramsey Personality, is my co-host. Open phones at 888-825-5225. George is with us in Atlanta, Georgia. Hi, George. Welcome to the Dave Ramsey Show. Hi, Dave. Long-time listener, first-time caller.

My situation is I'm recently retired. I'm working with an advisor, and my advisor is suggesting to me to convert some of my 403B funds to a backdoor Roth IRA. And I wanted to know the advantages and disadvantages of doing that. Just a little bit more background. I'm debt-free except for my home. I do have a pension and maybe about $700K in this 403B.

And I'll be quiet and listen. Okay. No, you can talk it's fine um the uh um okay a backdoor roth is not what we're talking about he's just he's just saying convert some of this to roll it to a roth to roll it to an ira and make it a roth a backdoor roth is a new roth that would be you want to put in new money and you you make over $200,000 a year, so you can't do a Roth. And what you have to do is open an after-tax IRA and then roll it to a Roth the same day. I do that every year.

But that's only $8,000 here, okay? So this is talking about moving the $700,000 or some of it into a Roth IRA in some good mutual funds, I assume, right? Right. That's correct. How old are you? 65. Okay. All right. Well, the math usually works because if you move on, whatever you move in becomes taxable.

You have other... Let's say it's $100,000. I'm sorry? Let's say it's $100,000. Then you have whatever your tax rate is. Let's say it's $100,000. I'm sorry? Let's say it's $100,000. Then you'd have whatever your tax rate is. If it's a 25% tax rate, then you'd have $25,000 in taxes when you do that. Do you have other money other than this to pay those taxes with?

I do. How much other money? About $200,000. Okay. All right. Well, if you pay the taxes by rolling it to a Roth from this day forward, it grows tax-free. Now, in order for you to make money as a result of this transaction, because you're paying taxes early, you have to pay them eventually anyway when you take the money out but because you're paying them early in order for this to

work you've got to leave alone whatever you put in this roth for probably the rest of your life and just take income off of it at most so uh i mean 10 years it you know at five to ten years somewhere in there you're going to be really glad you have let it grow tax-free so i think moving a portion of this that way and then using the other portion to live out of don't touch the roth to live out of and let it grow tax-free is going to make a lot of sense. I agree with your advisor. Okay. Okay. Well, good.

That is the question. Now, do I have to wait the five-year period? No. No, all I'm saying is in order for the fact that this is growing tax-free to offset the fact that you paid the taxes early, for the numbers to work out for a break-even point is going to be five years that the five years is just when the math lines cross you could take the money out any day you wanted to there's no limitation on it and the beauty of it is there's no required minimum uh distribution no rmd on it when you're 70 and a half if it's in a roth so that that Roth money can just sit there and grow tax-free the rest of your life,

and you may never touch it. And that would be a wonderful thing from an estate planning standpoint. Okay. So if you could, ideally, that's what would happen. So let's just say we move $350,000. You said you had $750,000 in the 403B? Yes. So let's, like, move $350,000. You said you had $750,000 in the 403B? Yes. So let's move $350,000 into the Roth and then the $400,000, you're just going to live out of that, but that $350,000, go ahead

and pay the taxes on it, move it into a Roth, and let that grow tax-free the rest of your life. Okay. If you're going to do it that way, then mathematically, the advice he's giving you is correct. Okay. Okay. Well, that was my question, and you answered it, and I appreciate that. And he can actually, I can't do it on the radio because it takes too long to unpack it all, but he can actually show you the present value of those tax dollars today and show

you what I'm talking about, where it it makes sense at what point it will have made sense and if you cash it out before that then this advice would have lost you money so if you cash this out i can tell you if you cash it out in three years if you use the roth ira money inside of three years you're going this is this is a bad move if you're going to leave alone 10 years it's a good move and somewhere between there is where the lines are going to cross and make it a good move. The math lines. But it's not a requirement. It's not a regulation that you leave it alone.

I just want you to leave it alone enough that it was the right decision. Does that make sense? Yeah, it does. And so I would assume then if you are younger and you're definitely going to leave it alone, you would always want to roll it over as soon as you could and you had the money to pay the taxes. Always. You know, when you're not 65, when you're 45 and you call in 100 yeah yeah because you're not going to touch it for 20 years right for sure right and it's always going

to make sense if you can pay the taxes without using the money in the account to pay the taxes right so like he's got the tax money on the side in the side account that he got the cash over there to cover the tax bill and that's really that's key too because it has the mathematical effect of having actually invested that much more right yeah in there is what you've done because you've converted it from a taxable account to a zero taxes and so it's as if you put you know if he if he did 350 000 and his tax bill was a hundred thousand dollars okay it's as if he invested another $100,000 into a retirement account. That's the way the math will work out. Sam is with us in Nova Scotia.

Hi, Sam. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much for taking my call. I always turn to your show when I need someone to tell me I'm screwing up. That's our new tagline, Sam. That's our spiritual gift, Sam. That's our new tagline. Thanks. We're going to tell you how you're screwing up. That's our new tagline, Sam. That's our spiritual gift, Sam. That's our new tagline.

Thanks. We're going to tell you how you're screwing up. Thank you so much. Yeah. All right. So I'm a 22-year-old student. I'm in my fourth year at university. I funded all my education in scholarships, and I have a scholarship to fund the final

year. I have about $28,000 in savings. And my question is about starting a business with a friend. I want to know if it's a wise idea. So six months ago, my friend and I had a business idea to start a delivery service. We live in a small town where whenever you want to shop online, it takes at least like three or four days

when you pay for premium shipping even to shop online. And we want to have a service where we connect local stores with shoppers because it's so cold here. So shopping in person is always difficult. We participated in a competition at the university to develop a business plan and we actually won first place. So they decided to give us a fifteen thousand dollar grant if we decide to go ahead with the idea however the business costs uh fifty five thousand dollars and uh my friend and i would have to each pay twenty thousand to go ahead with it and so that would be most of everything i saved but at the same time like whenever i look at entrepreneurs, they're like, when you're young, 22, perfect age to take risks. And I don't know.

I'm also getting married soon in April, so, like, a lot of things are changing. And I don't know. Is it a wise idea to invest such a huge amount of money in a business? Okay. Christy? You don't need $55,000 to start a delivery business that I can see. It's a delivery business, right? Like you're connecting with the local stores. I think you can do this for close to the $15,000 grant and maybe

a little bit of your savings. I would also caution you about going into business with this friend. You both can do your own thing, but you know, it's always, it makes me nervous to get them tangled up in any kind of partnership or something like that. But I think a delivery business is conducive to a lower startup cost. You can get scrappy, get connections and relationships with the local stores. Start at a small scale. I don't think you need $55,000 as a 22-year-old to start a delivery business. I completely agree.

Yeah. Basically, what you did was you ran a business scenario for the contest, and you ran out your budget for this fictional idea. Right. And then the idea became real. Right. And so now it's fictional again. Right. Let's just do it on a scrappy basis.

Right. That's the Cadillac person. And not spend that kind of money. Yeah. What's the... Let's gut this thing out and not spend as much to get her going. And if you're going to set up a partnership, it's dangerous. Christy's right.

I would prefer that one of you be the boss and the other one be the owner, and the other one have some rights to the profits but not be the owner. This is the Dave Ramsey Show. Our scripture of the day, 2 Peter 121, For no prophecy was ever produced by the will of man, but men spoke from God as they were carried along by the Holy Spirit. Margaret Wheatley said, Leadership is a series of behaviors rather than a role for heroes. Ooh, very nice. Good stuff.

Nicholas is in Sioux City, Iowa. Hi, Nicholas. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for having me. I appreciate it. Our honor. How can Christy and I help? I have a few questions. I'm trying to figure out what I should pay off first. I have about $3,500 in credit card debt. I have about $8,000 saved up in the bank. I have $12,000 in school loans. My current total living expenses right now are $1,200. My car is paid off, but I'm going to need one soon. It's got about 200,000 miles on it. So I'm trying to figure out what do I do with the credit card loans and then with the vehicle,

do I purchase something super inexpensive for $2,000 to get me a pet for the next couple years or... What do you make? I make $58,000 a year. Good for you. How old are you?

28 years old. Good for you. How old are you? 28 years old. Good for you. Okay. So what's your total debt? $3,500 and $12,000. My total debt is $12,000 plus $35,000, yes, just under $15,000. And then did you say that you have savings? $8,000.

I have about $8,000 in savings, correct. Great. This is the first time I've kind of been in this position, so I've kind of just been saving and really kind of scared to pay off these certain things because this is the first time I've actually been accumulating money at this rate and making decent money at this point. Yeah. It feels good, doesn't it?

Feels good to have some money. It feels really good. Yes, it does. Well, you know, here's the cool thing. When you get this debt all paid off, you're going to get to have that feeling again, but actually get to not have this debt weighing you down. You're in a good position. You can knock this out super fast. I mean, you can pay off that credit card debt,

keep it thousands for your emergency fund, starter emergency fund, just like we say with Baby Step 1. Baby Step 2, list your debts, smallest to largest by balance, which means you can pay off your credit card debt right now. And then you've got an extra $4,000, close to, almost $4,000 to put towards that other debt. And then you start chipping away at that with your, you got a good income. It's not going to take you long.

I would say, I don't know what the status of your car is, but I wouldn't worry about the car right now. I'd get this debt knocked out, drive the car as long as you can. I want you to buy a better car and do it by christmas with cash when you're debt when you're done yeah and you'll be able to i bet your car will go till then you can get this knocked out and you say it'll make it till christmas yeah yeah okay okay let's do this we teach you we teach a thing called the baby steps which is the shortest distance between where you are and wealth okay and we've taught it to millions and millions of people baby step one is the shortest distance between where you are and wealth okay and we've taught it

to millions and millions of people baby step one is a thousand dollars saved you've already done that you've got eight thousand saved baby step two is you list all of your debts smallest balance to largest balance and attack them in that order with any money you can find in your budget and you're going to be on beans and rice, rice and beans, totally focused, because we're going to get this paid off really super fast. And we're going to use any other money we have available. So we've got $7,000 above the $1,000, total of eight, that we can throw at this. Now, your student loans, do you have more than one loan that totals to $12,000,

or is it just one $12,000 loan or is it just one $12,000 loan? It's just one $12,000 loan. Okay. So what Christie's prescribing is this. We're going to set $1,000 into a savings account. We're going to use $7,000 towards your debts, so that's going to pay off all the credit cards. You get them out, cut them up, and close all the accounts as soon as you pay them off. Never use them again. Get a debit card, and that's all you'll need. It'll do everything a credit card will do except put you into debt. You're going to get on a budget with the EveryDollar budget.

We're going to put you in our program called Ramsey Plus. I'm going to pay for it for a year for you. And you go through Financial Peace University in Ramsey Plus. You start using the EveryDollar budgeting app, and it'll cause you to do that. Now, we've got $3,500 left over because we put $3,500 on credit cards. We had seven. We're going to put that towards the 12. You following me?

So we're down to $8,500. I think you're going to pay that off, and with your income, you're going to pay that off in three months. Okay. you're going to pay that off and with your income you're going to pay that off in three months okay so three months from now you're a hundred percent debt free with a thousand dollars in the account the next thing you do is baby step three and we're going to raise your account i want you to keep on with this intensity and we're going to just pile up cash now and now your goal is three to six months of expenses in savings for a rainy day fund only, not to be used for anything except emergencies. Okay?

And in your world, we're going to call that $12,000. That's three to six months of your expenses. I just made that up. You can change it if you want to. Okay? But the goal is how fast can we have twelve thousand dollars and then save up for a car and buy a car by christmas with cash and you'll be able to buy about a six or an eight thousand dollar car with cash you'll have twelve thousand dollars in the bank and you'll have

zero debt and that's where you're going to be at this time next year sounds like a great plan to me and that's going to feel really good even better than that eight thousand dollars sitting there it's going to feel really good. Even better than that $8,000 sitting there. It's going to feel really good to have that savings and no debt hanging over your head. It's going to feel really good. It's going to be worth that hard work between now and then. Yeah, we'll show you how to do it. I'll put you on hold, and Callie will pick up, and we'll put you into Ramsey Plus

and go do the Financial Peace University stuff, get on the budget. I mean, this is boot camp for money, baby. I mean, we're going to show you exactly how to do it, and you just game on. Don't let your foot off the gas until you get there. Now, once you get there, you can start investing for retirement, and you're going to start building wealth. You can ease up a little bit, but get that emergency fund and get debt free. These are big goals, and you knock that out, it's going to change your whole position. Well done.

Very well done. Madeline is in Orlando, Florida. Hi, Madeline. How are you? Hi, I'm doing great. How are you? Better than I deserve. What's up?

So first I want to say that my fiance and I have paid off recently $36,000 in debt. Right again. Thank you so much for... Thank you. So we have some tenants, my fiance has a house in Texas, and the tenants are moving out, and we have $6,000 cash. And I'm wondering, is that going to be enough to sell the house right now? We're thinking of maybe just replacing the floor and touch up paint.

It's a mobile home, and it's in Texas and we live in Florida. Yeah, what do you owe? We're not sure if that's going to be enough. $115,000. Okay, what's it going to sell for after you spend $6,000 on it? We honestly don't know because I know that you're saying mobile homes go down in value. Yeah. And I've never even purchased a house or sold a house, so I have no idea.

My guess is it's sitting on a piece of ground, though, isn't it? Yeah, it's sitting on about half an acre. Yeah, and you own that, right? Yes. Okay, all right. So you need to get in touch with a real estate agent in that area. Go to DaveRamsey.com and click on ELP for real estate. Have them go out and look at it for you, and ask them to say,

I got $6,000. How can I spend that the best to cause this thing to get sold? And what am I going to be able to sell it for? Okay. And they can tell you. They can walk through there and go, okay, you need to do this floor, you need to paint that, you need to haul this junk off, you need to rake out the yard. They're going to tell you some stuff to do to get it ready to sell,

the most efficient use of your $6,000, right? Yes. And I hope to God that they're going to sell for enough to at least pay the bill. Yeah, that's what we're praying for as well. Yeah, that's my hope. I don't know if that's the case. I have no idea what that lot's worth under it or what this trailer's worth. But get an endorsed local provider to help you with this

because you're going to need a real estate agent to list it and get it sold. And they can advise you on and even help you get the repairs done, you know, help you coordinate since you're out of town. And then, you know, you get those repairs done, spend the $6,000 efficiently. You may want to go over there and spend a couple weeks and do it yourself. I don't know. To get the best use. Let's make that that six thousand dollars go as far as we can

and get the stinking thing out of your life because getting rid of a hundred thousand dollars worth of debt is a beautiful thing yeah yeah that would free them up so much financially and just the headache and the stress of having that in a completely different state and having to worry about it but i love the i love how our endorsed local providers walk people through these major life decisions and major life decisions and major life transitions because it takes so much of the fear and the overwhelm out of it. They're experts in what they do, and they can walk you through and show you exactly what you need to do. Exactly.

Good show today, Christy. Thanks for having me this time. Well done. James Childs, our producer. Kelly Daniel, our associate producer and phone screener. Great job. I'm Dave Ramsey, your host. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. You can listen to Dave, Rachel Cruz, Chris Hogan, or the rest of the Ramsey Network anywhere with the Ramsey Network app on your smartphone. Catch all of our full shows, browse by topic, or send clips to your friends.

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