The Ramsey Show - App - Waiting on the Government to Forgive Loans Is NOT a Strategy! (Hour 2)

Episode Date: January 29, 2020

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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 BMW as the status symbol of choice. Erica is with us in Missouri. Hey, Erica, welcome to the Dave Ramsey Show. Hello, how are you? Better than I deserve. What's up?

Well, I was calling. I actually have two questions. My husband and I are in the process of purchasing his family business for a total of $600,000. And my two questions, his parents do not want us to pay it off early. They said that basically it's their retirement. And so my question, two questions. My first question is, how does that work at the Baby Steps? We're on Baby Step 2 currently.

And the second is, in my head, I thought it out to wherever it falls in Baby Steps, we will save up money and park it somewhere, and the payment will come out of that. But I wouldn't know where to park it. Is the deal closed? No, not yet. Good. You probably should consider not doing it. Why is that?

Because you're getting ready to step into a mess of $600,000 in debt with people who don't want you to pay it off. That's financial suicide. Think about it. You guys are acting like this is nothing. It's not nothing. It's $600,000. Yeah. And it's his mommy.

His mommy. Oh, my God. Yeah. So let me try this again, okay? If I were in your shoes, unless I could get two things straight, I would have to walk away. Thing number one is we are going to pay you off early. As a matter of fact, we're going to pay you off so fast it's going to be scary, and you're

going to take that money and invest it and live off of those investments, not off of me being in debt to you. That is asinine, okay? The very premise that it's based on will get you in trouble but also uh you know thanksgiving dinner is not going to taste the same as for the next 30 years you'll be sitting there with people you owe hundreds of thousands of dollars to bad bad bad relationship management bad Bad business management. Bad everything. So they're worried about this is their retirement.

Well, if I hand you $600,000, I can help you retire by investing that without having to be in debt, without your kids having to be in debt to you. That's a ridiculous statement. Thing number two, do you have any idea what the actual net profit of this business is? Yes. It was $100,000 last year. It's not worth $600,000. Well, the way it is, we're buying the inventory. Everything in it.

Doesn't matter. That business is not worth $600,000 if it's only making $100,000. It's worth $400 max. If it's worth more by getting all the inventory, it would be better off to sell off a bunch of the inventory. Okay. Let me tell you. Let me stop you a second.

Okay. If I'm an investor and I were going to buy this business, which I am an investor, it were going to buy this business, which I am an investor. It's what I do. Okay. If I were going to buy this business and the book value of the business, meaning the inventory and the assets and the receivables, anything else the business owns is worth more than the business is worth due to its income, then I would not buy it to run it. I would

buy it to break it up, meaning I would buy it, I would close it, and I would sell off all the stuff, and that would give me a better return on my money than keeping it open. So you're telling me there's $600,000 worth of stuff there in inventory and so forth? Yes. Book value? Yes. Okay. stuff there in inventory and so forth yes book value yes okay i know book value book value is over a million what are you calling book value then you got inventory and so they own a whole bunch of stuff that's not creating any income yeah and my husband's got plans to, like, move everything quicker. So how much of this million is inventory? It's right at a million is inventory, and then it's, like, everything inside the wall is, like, the shelving and the software.

Why are they sitting on a million dollars worth of inventory to create $100,000 worth of income? I mean, I honestly... So your husband, because really you ought to be sitting on maybe $150,000 to $200,000 worth of inventory to create $100,000 worth of income. Okay. You see what I'm saying? Yeah. You would never take a million dollars and put it into something that you made 10% return on it in a small business setting, ever. You want to make 30%, 40%, 50% rate of return on it in a small business setting because you have all these other costs involved, too.

And so you're buying a pig in a poke here. You've got a mess. This business is not healthy. Okay. You following me? Yeah, business is not healthy. Okay. You following me? Yeah, no, I follow. Okay. Now, if you were going to buy a business based on book value, you buy it based on what it's worth and you sell the stuff off. Now, if you want to keep it open and sell the stuff off and get it down and bring the business back to health, that would be a strategy you could use. If you were going to buy a business that makes $100,000 net profit,

usually a 25% rate of return, which would indicate a $400,000 value, a 20% rate of return would indicate a half million dollar value. Okay. So not counting the fees. So you're buying a business that the income does not justify the value, the valuation. Only the inventory and book value does, which means the business has a disease. It's sick. Are you following my concepts? Yeah. Okay.

Which means you're walking into a danger zone, and you're about to be in debt to your mother-in-law in a danger zone who doesn't want you to pay this off. So my initial reaction was correct, in that you've got to restructure this into a way that... Even if all is forgiven in the event that both of them pass. Doesn't matter. What if the business doesn't make a profit? You're $600,000 in debt. You can't even service it with the income you got coming in. Fair enough. Yeah.

So here's what I would do. Here's what I would do. I would do the deal, but it is the payments on the 600 are, number one, no prepayment penalty, and I'm going to prepay you, and you're going to take that money and invest it to live on, okay? We are not going to keep this debt. If you have to keep the debt, don't do the deal. I would never tell you to do that. Beg you not to do that. Number two, if you can get that part fixed, then the second thing I would do when you close on it, the first order of business

within six months is sell $600,000 worth of inventory out of there. Cut the inventory down to 400,000 because you do not have a turn rate. That inventory is not turning off those shelves. It's sitting there collecting dust. We know that because it's not creating a profit. And so you've got to cut this inventory down to about 40% of what it is. And by the way, you're going to sell off this inventory and give 100% of it to mama and pay her off. Okay. So, which is really what they should do before they sell it to you

and then just give you the business if they were smart. But they're not going to do that because you're going to have to talk them through this, and I'm not even sure you all are going to do any of this. But that's what I would tell you to do. I would beg you not to be in debt to your in-laws. It's going to create problems you have no idea. We work with family businesses all over America. It's

a disaster when you do this. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your 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-accredited organization CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually

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It's free to shop your rates. See if you can't do better. Saving money, saving money, dude. Pretty simple. Stephanie's with us in Kentucky. Hi, Stephanie. Welcome to the Dave Ramsey Show. Thanks for taking my call.

Sure. What's up? So about 10 years ago, I graduated from veterinary school. I went to school out of the country, actually, so it was a pretty hefty bill. But because of interest rates and what I was making at the time, I was just on income-based repayments. So they were pretty minimal, not even going towards the actual principal. Currently, that loan has grown over $400,000. And to get into baby step two, would I consider that as part of the loan that I need or the debt that I need to pay off with a possibility of having a forgiveness in the next 20 years?

Would it be better to just pay off the current debt that we have minus that and then work on saving towards the forgiveness tax bill in the future? There is no forgiveness tax bill. Well, that's our hope. What do you say? You're going gonna sit here and bet your life on elizabeth warren getting elected no no i mean really no there's there is there is no there is no what did this bill start out at if it's up to 400 now i was less than $200,000. I got out. So not paying on it hasn't worked well for you? No, but I don't make enough to make the minimum payments to go towards principal. Are you working as a vet? Yes, I am. And my husband has a job as well. We just don't make, it would be over $3,000 a month in order to do that,

and that's more than we make now, and we have a family and a house and other debts. So you're a veterinarian, and you make how much? This year, because I was on maternity leave, it was about 65, supposed to be about 85. So your normal year is 85? Yes. And how long have you been in practice? Uh, nine years.

Okay. Are you in a rural community? Uh, no. Because you're not making much. No, I'm looking into possibly finding a better-paying job. Yeah, this practice is weak because most DVMs are making $100,000 to $200,000. Not ones that I know, but yes. I've been working doing financial coaching for 30 years, and I work with them all the time.

They actually do better than a lot of docs if they manage their practice well and manage their options well and so forth. So I think what you've got is a hope problem and an income problem, and you need to address it. Again, I'm going to ask, are you in a small town or a metro area? Metro. Okay. Yeah, you need to do some work on studying what you should be making

and how you can get there as a comp study. Because we work with you guys all the time. I mean, a bunch of DVMs come through Entrez Leadership events, and I sit and talk to them. I know how their practices work and what they're making. And so you're not making anything. I would work in the next three to five years to double your income, and if I were in your shoes, and then I would work toward, and you don't believe that can happen right now.

I hear that. I know that, but I'm answering your question, what would I do if I were in your shoes, because I know that can happen. I see that happen, and then I would go from there and begin to really cut your lifestyle down. You've got to believe that you can do this. But, you know, if your husband's career, your career, you guys have got to address this because it's not getting anything but worse. It's going from bad to worse all the time.

And waiting on the government to come up with a plan to forgive student loans is not really a good strategy because there's a whole bunch of people who paid off their student loans who probably aren't going to vote that way for you to get a free ride. So you're going to have a problem with that. It's the problem with the concept. So, hey, thank you for the call. I'm so sorry you're facing this. I know it's overwhelming, but I really do believe that, you know, really focusing on your career instead of on hopelessness. And let's just maximize, hustle and grind. Let's figure out what can we do to make more money? What can we do to make more money?

We open our own. Do we grow? Do we work more hours? Do we work two different DVM positions? What do we do to milk the value out of this degree? Because it is a valuable degree in terms of economics. And then use that along with your husband's income, him working all the time, and the two of you clean this mess up, because otherwise it's going to get worse and worse

and worse and worse and worse. It's not going to go away, and the government is not going to wave a wand for you. I just don't see it happening. I'm sorry you're in that trap, though. Hey, thanks for the call. Open phones at 888-825-5225. Okay, the juxtaposition of that is you are 18 years old, and you want to go and get a degree right now. You need to listen to these folks that call in that have this life at 30 years old. And you need to learn from them what the mistakes were. Okay, she took out a high interest loan. She studied in an overseas setting for the experience points that added nothing to the value of her degree.

We know that because she's not making more money as a result of having studied overseas. She's making less than the typical DVM. And so spending extra money to quote have experiences while you're in school that you don't have is not a good plan. It's dumb. Picking a degree you can make good money with as a result of that field of study and paying cash for it is smart. And if you want to learn more about that and you're 18 years old or you have an 18 or 17 year old, pick up Anthony O'Neill's book Debt-Free Degree because you can go to school debt-, because you can go to school debt-free, and you should go to school debt-free. You pick a school that fits your budget, and if you're broke,

that means you pick the cheapest possible school. Well, I know you'd rather drive a Bentley than a used Chevette, but you have a used Chevette budget. You know, if you got a champagne taste, I don't care. You got a beer pocketbook, baby. And so you need to go to an in-state school with in-state tuition if you're broke. Get all the scholarships you can get your hands on. Take six jobs and work your butt off while you're in school. And you can get through school debt-free.

And it can be done. And then you don't get caught in these situations. And this idea that is being pitched out there on the political trail right now, and a portion of a generation is believing it, which is really sad right there, to where your financial plan is waiting on a lefty to get elected, A portion of a generation is believing it, which is really sad right there, to where your financial plan is waiting on a lefty to get elected. It's going to get you in trouble because it's intellectually dishonest to talk about forgiving student loan debt while we're still making trillions of dollars of student loans. The first thing you do is you cut the faucet off, Washington,

regardless of which side of the aisle you're on in this discussion. That's just intellectually dishonest to keep making the loans while you talk about forgiving existing loans. That's just backwards. This is the Dave Ramsey Show. Okay, I need you to listen to this. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search that you're doing online.

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CyberGhost VPN helps you keep your connection on your own Wi-Fi and any public Wi-Fi secure and private. Over 34 million people worldwide have downloaded CyberGhost VPN. Download it now. Just search CyberGhost on iTunes or Google Play or go to CyberGhost VPN. Download it now. Just search CyberGhost on iTunes or Google Play or go to CyberGhost.com. In the lobby of Ramsey Solutions right here on the debt-free stage, Bo's with us. Hey, Bo, how are you? I'm doing great. Thank you so much for having me on today.

Welcome, welcome. Where do you live? In Austin, Texas. Oh, very cool. And all the way Thank you so much for having me on today. Welcome, welcome. Where do you live? In Austin, Texas. Oh, very cool. And all the way to Nashville to do a debt-free scream. Yes, sir. Thanks for visiting us in person. So how much did you pay off?

$100,000. Good for you. And how long did this take? About 13 months. Kicked it. Your range of income during that time? Not too much of a range, but I was making $170,000. Wow.

What do you do for a living? I'm a pharmacist. Ah, doing very well. So am I going to guess and say the $100,000 might be pharmacy school? Most of it was, yes, sir. A small percentage of it was a truck loan. I got that paid off and then just attacked my student loans, got that done. Now, pharmacy school is more than $100,000 typically. It's usually $100,500. That's right. If you got a good deal. Yes. And other people pay $300,000 because they're stupid. But so what – how'd you do that?

I mean, because you didn't – you apparently didn't borrow as much as you could have. Well, actually, I did borrow. Oh, okay. I had $150,000 in student loan debt, but I didn't start paying it like that until about 13 months ago. Okay, so 13 months ago is when you started our program. I got you. Okay, I'm with you. Okay, so what happened 13 months ago, Bo?

Well, I remember I had one of those I had it moments. What happened was I was replacing the fence in my backyard, and the neighbors were kind enough to help me out with it. And I had a contractor who did a great job, but I remember writing the check, and it was about $1,300. And with my income, honestly, I don't think that should have been too hard for me, but I felt very uneasy by it. And so I had to do some searching and see what was going on, and I realized I had an ongoing balance of a credit card, my truck loan, and then my student loans that I was still just battling with. And I realized that, you know, I had it at the moment. I was like, I make so much and I'm still just kind of just barely just floating by. Yeah, I make too much to be this broke. Right. And not be paying attention. Right. Exactly. Not paying attention is dangerous when you're a pharmacist.

Yep. no kidding. It's dangerous for the rest of us. Okay, so what happened? I've had it moment. Then what did you do? Then I did what probably anybody else would do, get on Google and YouTube, and I was searching what do I do with debt and stuff, and the number one name came up was yours, Dave Ramsey. And I remember because one of my good friends from pharmacy school actually recommended,

uh, the book, the total money makeover, which I got and read back whenever I graduated, but paid really no mind to it. Cause I was like, Oh, you, you talked about broke people and I didn't feel like I was broke because I didn't understand what you meant by broke, you know, being in debt, not, you know, right. Making the incomes. You make big income. You're not broke. That's what you thought that's what i thought i got you and sure enough i was broken uh got on the plan came very um steadfast in it you know didn't look back and got it paid off in

13 months wow wow you leaned in man i mean you went on being you when you go you go i mean it was beans and rice for you. Absolutely. You didn't have a life at all. Nope. People make fun of you? Not really. I had a lot of supporters.

There were some people who were, you know, kind of confused of what I was talking about because I was like, no, I'm not going to do credit cards anymore. I'm done with those. And people were like, well, you know, you can, you know. Get airline miles. Exactly. Yeah, it's working for me so far. I can't even pay for my fence. Yeah, so I just had to tune out the noise and just go by the plan, and that's what got me through.

Yeah, okay. So did you pick up extra shifts or do some side stuff with pharmacy or just leaned into your existing income? No, it was just my existing income. I work for a great company. You do because you've got an unusually good income. Right, and so I just, and it made me appreciate my job a lot more whenever I started doing this plan too. So it actually improved, I think, improved the way I was working at my job. And, yeah, that's what I do.

No longer asleep at the wheel. Right. Well done. Very well done. Good for you. Good for you. So what do you tell people the key to getting out of debt is? This is impressive.

You pay off $100,000 in 13 months. Well, I actually have three practical things that I did. Aside from, you know, what you always say, having your why and doing the budget. One, make your payments as soon as you get paid. Don't wait until the end of the month or wait until your bill's due. Oh, that's good. I like that. Yeah, once the month or wait until your bills due. Oh, that's good. I like that. Yeah, once the cash is in hand or the money.

Once it's gone, it's gone. So you got to make it work. Yeah. I like that. That's good. Two, at the end of baby step two, of course, it's your biggest debt that you're tackling. And if you're like me, that biggest debt is more than all your other debts combined. So you kind of have to break it up into chunks to keep that emotional snowball going. So every time I went from $30,000 to $29,000, that was a

celebration or $20,000, $19,000, that was a celebration. And then three, just stay the course, don't give up. Things are going to happen while you're doing this journey. For instance, I had to replace all the tires on my truck. I just budgeted in for the month and kept going. I didn't let it hold me back. You're probably going to make mistakes while you're doing it. You're still human. I made a couple impulse purchases whenever I was still doing it, but I just had to learn to recover and just keep going with the plan. You fell off the wagon, but didn't punish yourself by quitting. Right. Yeah. Good. You get back on the wagon. Absolutely. the wagon but didn't punish yourself by quitting. Right. Yeah. Good. You get back on the wagon.

Absolutely. Good for you. Thanks. Good for you. That's real. That's real right there. Very nice. I like that a lot.

So who was your best cheerleader? My best cheerleader? Well, I had quite a few. My parents, number one. My mom's here with me today. Oh, wow. Good. Celebrating my debt-free scream.

My FPU coordinator, Tanner and his wife. Oh, so you went to Financial Peace University? I did. Okay. Yep, and they're actually watching from Japan right now. Oh, wow. So I think it's like super early in the morning. I love that.

Very cool. And then a couple friends from pharmacy school, like Bobby and Danny. They were really good cheerleaders for me as well. Good deal. Well done. Well done. So how old are you? I just turned

33 today. Today? Today. Two 33 birthdays today. Dead Free Screams on the show at the same time. That's awesome. Very cool, man. Thank you. Happy birthday. Thanks. Very, very proud of you, man. You did great. I'm sure your parents and everybody else are too. It's got to be, how's it feel to be shed of $100,000? It feels great. When you're 33 years old, you make $170,000. You don't have a payment in the world. I feel like I gained a new sense of confidence and security with my finances. I'm able to plan for my future and be very confident and secure, and it feels amazing. It's peace.

It is. Absolute peace. It really is. It doesn't. Financial peace. Two words that don't go together, like airline service. Well done, man. Very well done.

All right, Bo from Austin, Texas. We got a copy of Chris Hogan's book for you, Everyday Millionaires. That is the next chapter in your story. $100,000 paid off in 13 months, making $170,000. Count it down, Bo. Let's hear a happy birthday, debt-free scream. Three, down, Bo. Let's hear a happy birthday debt-free scream. Three, two, one. I'm debt-free!

I love it! Yeah! Oh, man. All right, let's roll back just a second you remember four hundred thousand dollars in debt making 85 should be making 160 dvm that remember veterinarian called in a few minutes ago earlier in this hour all right and so that the numbers on that one were a hundred thousand dollars paid off in 13 months making 170 So if the veterinarian doubles her income and she pays off the same amount he paid off,

which is $100,000, that doesn't count the fact that she has a husband who has an income. He is single doing this. So if she did what I told her to do, she could be debt-free in four years instead of waiting on Washington to forgive her student loan debt.

See, that's why I can see hope in her life because of Bo. When I see Bo and Bo's numbers and what he did, he's a hero. He took control of his life. He had hope. He could see his way out. And when you can see your way out, you scratch and you claw, you climb, you hustle, you grind. If you fall off the wagon, you crawl back on. If you make a you grind you if you fall off the wagon you crawl back on if you make a mistake you keep going but a hundred thousand dollars in 13 months see these numbers work i'm actually made don't just make this stuff up off the top of my head. I have 30 years of meeting Bo to know that you can do this. So I know oftentimes you can do it more than you know you can do it. I really believe in you. You can do this. This is the Dave Ramsey Show. one of my favorite parts of this show is hearing your debt-free screams you guys are our heroes you've

kicked debt to the curb and you've saved for the future now we want to celebrate with you if you have lived like no one else and are currently in baby steps four through seven well it's time to enjoy some money and the perfect place to do that is on board our first ever live like no one else cruise in March. That's right, just a couple of months away. But get this, it's not too late to book your cabin, so don't miss your chance. This Caribbean cruise is going to be an incredible seven days at sea on a stunning new ship with amazing experiences.

I'm talking all of our Ramsey personalities and other world-class entertainers. We're stopping in the Bahamas, Puerto Rico, St. Thomas, and Turks and Caicos. I'm talking all of our Ramsey personalities and other world-class entertainers. We're stopping in the Bahamas, Puerto Rico, St. Thomas, and Turks and Caicos. It's going to be an amazing, debt-free celebration designed just for you. Don't miss the boat. Head over to RamseyCruise.com today to reserve your room. jade is with us in nevada hi jade how are you good dave thanks for taking my call my pleasure how can i help my husband and i are both active duty. I'm retiring at the

end of this year. He still has about five years until he is eligible to retire. Prior to starting the total money makeover, we were, of course, contributing to our TSP, but we stopped that since we're in baby step two. And my question is, as I'm preparing for my retirement, what should I do with my TSP? Do I leave it there? Should I move it over into an IRA or a mutual fund? I would move it over. I always take your retirement with you in a direct transfer rollover into an IRA in good mutual funds. The reason I always take it with you is you've got more control because it's

right there. It's working with your investment broker, so you're in control. You can choose mutual funds from about 8,000 funds that are out there, and so you can find funds that will outperform your old place. Now, in your case with the TSP, outperforming the C plan, the S, and the I, which is what we recommend there, is not that hard because they're okay, but they're not super great. The C is basically like investing in the S&P, and about 40% of the mutual funds outperform

the S&P in the growth stock mutual fund category. So I would click SmartVestor at DaveRamsey.com. Sit down with a SmartVestor pro if you don't already have a broker. It should have the heart of a teacher teach you what you're doing. You would select four mutual funds across the four categories that we teach. Growth, growth and income, aggressive growth, and international, all with long track records. I put about a fourth in each, and you fill out the paperwork for that to be your IRA rollover. They will send that paperwork directly to the federal government, the TSP, thrift savings plan, and it will be a direct transfer rollover into a traditional IRA.

There's no taxes on it if you do it that way. And so that's exactly what I would do if I were in your situation. And thank you both very much for your service. Alice is with us in Oregon. Hey, Alice, how are you? I'm good, thanks. Thanks for taking my call. Sure, what's up? I need to know if my boat is close enough to the dock. So my husband is 60. He's already retired, and I'm 56. He wants me to retire also. And I'm really nervous that we don't have enough already.

All right. So how much is your nest eggs? 1.7. Okay. Why don't you think you can live on that? already. So how much is your nest eggs? 1.7. Okay. Why don't you think you can live on that? I don't know. I'm only 56. It seems like I should keep working.

I don't disagree with that part, but that's a different discussion. If you made 10% on a million and seven, that would be $170,000 of your income. What do you all make now? Well, with my husband retired, we actually haven't had to take any out of his income. No, I didn't say you took any out. I just said, what do you live on now? What's your household income?

It's between $100,000 and $130,000, depending on how crazy we are. Yeah, all right. And so if you need to create 130 out of 1.7 million, you've got to make about 8% on your money. And if you make 8%, you don't have to touch the 1.7 million. You would just live off of the income that it creates. So you're definitely in a position to retire. I mean, you've done a wonderful, wonderful job.

Now, there's the other discussion, which has nothing to do with money. It just has to do with what brings you joy, and that is very few people get great joy out of producing nothing and laying around, you know, in the lap of luxury. It's not very joyful. So doing something with your life for the next 40 years, you know, or 30 years is probably a really good idea. And it would be okay to make some income with that.

You don't need money, but you need to be, human beings need to be engaged in something other than just golf and fishing. Now, if you want to increase, yeah, if you want, I mean, whatever it is, whatever you call retirement, right? But financially, mathematically, you are in a position you don't have to work. And that's really the question. But then what are you going to do? What do you want do so i'm your guy's age i mean i turned 60 this year and um i intend to keep working and i absolutely don't need any money i mean i'm i've been able to retire for 20 plus years are able to not work for 20 plus years but i get great joy out of what i do great satisfaction out of what we do here at

ramsey and being plugged into that now you know as i get a little bit older and uh sharon wants to travel more i'll probably be doing a little bit more of that and i can do whatever i want to do but um i don't have to go at it as hard as I did back in the old days. But my thing for you both to consider, you and your husband, is sitting on the couch watching Oprah reruns is not joy. It doesn't bring you joy. And so I would think about that part of your equation, not because you need money, though.

You don't need money. If you have a good investment broker and you and your husband sit down with them, they ought to be able to outline a plan where you easily can live off of the income that that level of net worth will create for you. You should be just fine. Very well done, by the way. Touchdown. Great work. Donna is with us.

Donna's in California. Hey, Donna, how are you? Hi, Dave. I'm doing California. Hey, Donna, how are you? Hi, Dave. I'm doing well. Thanks for asking. Sure. I have two quick questions for you. My husband is deploying in April, and we are able to defer our mortgage payments.

You can do a minimum of six months, but we're actually thinking of trying to do it for the full deployment. And so, like, is that something that we should actually thinking of trying to do it for the full deployment. And so like, is that something that we should actually do because you know, our thought process is we'll just use our mortgage money towards our debt. Um, and so, you know,

we're, we're still toying with that. Um, and then if we did that, do we still pay into our escrow to make sure that, you know, our taxes and everything are paid? I would not do that.

Do not do it. Okay. And let me tell you why. And then you decide what our taxes and everything are paid. I would not do that. Do not do it. Okay. And let me tell you why, and then you decide what you want to do. Okay. Why is what's important? The reason I would not is effectively you're borrowing on your house to pay off your other debts because you're going further in debt on your house by not paying on it. It builds up.

I mean, it's going to increase the balance by doing what you're talking about. And so it has the same exact effect as if you had borrowed on your home to pay off your other debts, and I would never tell you to do that. You do not have an income crisis. You just have this available to you under law because he's active duty and deployed. And so I wouldn't do it. The only reason I would tell a military family to do that is if they had to do that

because there was an income crisis associated with the deployment, but I don't think that's the case here. You're just trying to get the best use of the money. As a matter of fact, you're going to get combat pay and tax breaks, right? Correct, yes. Yeah. So I would use all of that and just really lean in on this and um you know are you guys in uh financial peace university membership

uh no we are not okay you are now that's my guest i'm gonna pay for it okay because that gives you several things number one you can go through the class. When does he leave? He leaves in April. Perfect. Okay, you can start going through the class together before he leaves. Get your budgets organized on every dollar plus, which connects to your bank, on both of your phones. Where he's deployed, he likely will have at least intermittent access to the Internet, correct?

Correct. Okay, and so if you both have the budget on your phones and it's both connected to your bank and you both can watch the videos and go through the class together, even if he's in the sandbox and you're here, it creates a communication base where you're still working together to knock out your debt instead of him just over there fighting and you back home fighting the money monster, right? So there's a thing we found. We do a lot of work with the military,

and there's a thing we found when the folks on the front line, they're more mission-ready when they know everything back home is under control. So you two working together helps keep him safe. Does that make sense? Yes. Yeah. Absolutely. So, hey, we appreciate you guys, and we appreciate your service and your sacrifice,

and we're going to pay for it. You hold on. Kelly's going to pick up. We're going to put you in there together. He'll have access to it where he is. You'll have access. You can work this together even though you're separated. And thanks again for your sacrifice.

This is The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.