The Ramsey Show - App - We Have No Idea Where Our Money Is Going (Hour 1)

Episode Date: September 13, 2022

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Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. George Campbell, Ramsey personality, is my co-host today. He is also the host of our podcast that's very popular on Ramsey Networks, The Fine Print, where he helps you read the fine print on these companies and ideas that are screwing you over, which is what happens if

you don't read the fine print, thus the name. So check it out. And also, of course, Entree Leadership Podcast, which I listened to this morning, George. It was really, really good. Oh, thank you. Very good stuff. So check it out. That's all for business and small business. And George is the host of that. We have wonderful world-class guests on there talking about leadership and business.

This is the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Open phones this hour, 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. 888-825-5225. Lillian starts off this hour in San Antonio. Hi, Lillian. How are you?

Hey, Dave. Thanks for taking my call. I have a question about my husband passed away this March, and I received life insurance today. Thank God he worked for a company that really took care of us, but I need to know if we're going to be okay. I do have five children who are pretty much adults, and I have one 15-year-old son at home. So the life insurance is $954,000. He has a pension of about $280,000. And so they want to know, do I want to defer this pension or do I want to take a payment monthly? It will continue to grow at 6% until retirement. So I'm not really sure he does have about $300,000 in retirement. And so I don't really know what to do. I still, my home is

worth about $700,000, but I owe $330,000 on it. So I want your opinion on what to do. I'm sorry, hon. How old was he? He was only 54. Oh only 54 oh just a pup yeah how long were y'all married and 31 years we have uh we're about to have our eighth grandchild so yeah what happened he had a heart attack oh my i'm so sorry. Thank you. Okay. Rule number one, and then we'll back around and work around that rule. Okay. Okay.

Sharon and I are getting ready to celebrate 40, and we have planned for me to die first because if she dies first, I'm not going to be able to handle it. Because I won't be able to breathe, and that's where you are right now you can't even get a full breath uh because it's just you know you're you're sane for a few minutes and then another wave hits you and then you're insane for a little while and that's called grief and that makes you a normal human and because your heart's broken because i mean this is like your best friend for 30 years so um so the rule is try to make as few big decisions as you can until your brain clears a little bit okay i do this for a living and my plan is when in the middle of a major tragedy uh major grief situation i'm going to try not to make big decisions in the middle of that because our our critical thinking skills

are just messed up by the fog of pain does that make sense yes so all of that to say it i try to avoid just you know now sometimes people have to you know because like they don't you the good news is you got you know uh well over a million dollars access and so you're fine you're going to be okay um and then let's just start talking through kind of what your plan is and what you're thinking now and then let's see how much of it we can put the brakes on and because if you can do nothing for six months and just cry, that'd be like a normal human reaction. Right. And you make better decisions six months from today than you would today. Do you agree with that?

I agree, yes. Okay. All right. So let's just back into it from there, George. Now, the pension, they're offering you a lump sum of 280? They're offering payments like payments monthly um and if either that or i'm waiting for retirement it'll continue to grow for six at six percent oh okay but they're not offering you a lump sum no they are not the 280 000 you don't have access to? No. Okay. All right. Well, here's the rule on that.

It's going to die when you die. It actually won't. It will go to my children. So that's the great part. So that's the great part of that. How much of the month, what's the monthly they're offering you today? $1,800. Okay.

And do you work outside the home very little okay yeah so we need to create an income for you to live on agreed right i agree what does he what did he make uh about 120 okay all right so 1800 is 20000 a year, so we're $100,000 short. Right. Okay? Right. So I'm taking the monthly. I'll go ahead and tell you that. Okay.

Because accruing at 6% is not exciting to me because you can invest in good mutual funds and do considerably better than that. So even if you didn't use the money, I would take it and dump it into mutual funds. Okay. Because I'm moving it from 6 to 10 or 12 at that point. So we're going to do that one. Do you know your household expenses monthly right now, Lillian? They're probably at about $3,800.

Okay. So let's call it $50,000 a year you need to live. How old are you? Right. I'm 51. Okay. The $950,000 was life insurance money. Correct. Okay.

Well, his $300,000 in retirement you need to just leave alone. You will be, are you the beneficiary on that? Yes. Yeah. Okay, you're going to be required to draw down on that at a 10-year rate. So, well, no, I don't know if spouse is on an inheritance, if spouse is exempted or not. Some of them are. They're different. Do you know the terms of it? No, they're not different. It's either a 10-year drawdown or the spouse has an exemption, one of the two.

I'll have to look that up in my cheat sheet notes. But either way um so if we're taking the life insurance dave are we saying to invest this to create the income for her or is she going to need part of it temporarily in order to create an income to live on do you think you're going to keep the house so i wanted to keep it for at least three years until my son graduated high school. Okay. The market here is crazy. I can't buy anything for $300,000 in my area. Right. Okay. Okay, there's two options. We can go with the $950,000. All right. You can either invest it all and keep the mortgage in place, which is trying to not make big decisions, okay? Or you can pay off the mortgage and invest $600.

Either way, you sit down with a smart investor pro in your area, and sit down, and they'll help guide you through that. And they can answer the question on how fast you've got to draw down that retirement. Because I'm conflicted here. I can't remember what it is. I've got to look it up. The break is killing me. But they changed the law about 18 months ago, and I've forgotten it. I I can't remember what it is. I've got to look it up at the break. It's killing me. But they changed the law about 18 months ago, and I've forgotten it.

I forgot what they changed it for. But, yeah, I'm sorry. I'm sorry. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី George Camel Ramsey personality is my co-host today. Open phones at 888-825-5225. Pam is in Atlanta. Hi, Pam. Welcome to the Ramsey Show. Hey, how's everybody? 888-825-5225. Pam is in Atlanta. Hi, Pam.

Welcome to the Ramsey Show. Hey. How's everybody? Great. How can we help today? Okay. So I am calling because my husband and I have finally decided that we need to take care of our financial situation. Good. About three or four years ago,

his aunt handed us the total money makeover book, and we took it, and we were like, no, we're okay. We're surviving. Used it for a coaster. It was a coaster. Yeah. Well, then we passed it along to another family member and said, oh, you might need this more than we do.

And we're finally tired of surviving. We're tired of, you know, the paycheck to paycheck, and we have everything we need. I think she's ready, George. Nothing to show for it. That's the biggest step of all. I'm proud of you, Pam. Well, thank you. Give us a snapshot of your financial picture.

What's your income, and how much debt do you guys have? Okay. So, um, before taxes were right at 130, we bring home 98.8 a year between the two of us. Um, debt is about 76,000. Um, also we have, um, we kind of built our home. Um, well, we didn't kind of, we built our home ourselves. My husband really built it on some family land. So, um, kind of like a barn dominium. So we have no mortgage. Um, so all of that debt is credit card loans and then two car payments. Mm-hmm. Yeah. So we so we i have i have ordered the book how can we best help you today okay so i ordered the book from amazon they sent me the wrong book um and i sent it back and now they're supposedly sending me the right one and i guess i just need

i need to hear um i need you to tell me, like just push me in that direction. I don't want to say I'm a skeptic, but, you know, I do a budget every quarter. I used to do an annual budget, and it never worked. It always fell apart. It doesn't work. Annual budget doesn't work. Yeah, so I started doing a quarterly budget. That doesn't work. Yeah, so I started doing it. Yeah, so I started doing a quarterly budget. That doesn't work either.

Yeah, sometimes some months it works and then some months it doesn't work. Yeah. Because every month is different. Right. And you're trying to operate off a template instead of reality. This is correct, yeah. And so it won't work unless you do one before the month begins each and every month, because that way you're customizing what my income is that month. I know exactly what it's going to be for the coming month in almost every case,

and I know exactly what my expenses are going to be or are really good, accurate projection of them. And so you take all of your income and you give every one of those dollars a name a mission before the month begins and here's the hard part any goober can do that you can do that on a yellow pad okay it's sixth grade math third grade math all right but the trick is then to actually use that through the whole month and not do anything with money except what's on that paper right and you and your husband pinky swear and spit shake and agree to this is a freaking contract and so the way we always used to teach it in the old days in fpu and it still applies today is you remember when you were a little kid i was a little kid my little sister

would say you're not the boss of me. And that's the deal with the budget. The budget is not the boss of you. You get to tell the budget what it's going to do until the budget is done. And then the budget becomes the boss of you. Right. But you're the boss of it until it's down on that paper, and then it's telling you what to do. So it's saying, no pizza tonight, goober telling you what to do so it's saying no pizza

tonight goober you're 76 000 in debt stay at home and eat leftovers that's the budget bossing you around but if you're not looking at it and going we're over we're about to go over on our food budget you won't stay home you'll look back at the end of the month and go oh we went over on our budget again budgets don't work no you didn't stick to it. Budgets work if you stick to them. Right. But you can't do that on a quarterly or annual basis. It does not work, though. So that's the part of the budget thing that works.

And then we're going to show you the whole system to get you completely out of debt and become wealthy all the way through. Spoiler alert. But then the trick is you've got to do every one of the steps. Okay. And if you think we're wrong, we're not. You are. We've shown 10 million people how to do this.

I don't know anything about anything, but this stuff, I got it dialed in. And, Pam, the average person to do this stuff, they'll get out of debt within 18 to 24 months. If they get on a budget, they get serious, they start making some sacrifices. And based on the numbers you laid out, that's you guys. You can do this stuff. And you've got money coming out of your check for retirement and or big health insurance or something else because you got too much coming out of your check. Yeah. Yeah. It's health insurance and 401k for mine. Yeah. so you're going to stop your 401k temporarily are you getting a big tax refund too um not big no usually between 12 and 1500 okay all right then

that's only a hundred dollars a month too much is coming out of your check for taxes okay so we adjust that a little bit but not much and then we're just going to get on beans and rice rice and beans because we want to be out of debt more than we care what somebody thinks. And that might mean selling a car. It might mean not. It will mean not going on vacation or going out to eat until you clean up this freaking mess you made. And then you're going to be free. What would it be like to have no payments in the world?

That would be awesome. Now, our next step after we would like to either purchase or build a house like that now not now you're bro no no after all of this is done okay well let's get out of debt first that's our goal yeah get out of debt build your emergency fund and then you can start piling up cash and build your house with cash okay that sounds amazing because if you don't have any payments you're going to have this thing called money because you make $130,000 a year. Right. Okay.

So what do I need to do today until my book gets here, the correct book gets here? Well, here's what I want you to do. Are you doing a budget on paper right now, Excel? What are you doing? On paper. Handwrite it in paper. I have a big yellow binder that stays on. On top of the book that's coming your way, I'm going to gift you Ramsey Plus. That includes Every Dollar Premium and Financial Peace University.

And so in the meantime, what I want you to do is start your Every Dollar Budget. This is digital. It's going to be easier to track than pen and paper, and I think that's going to do better for you. And watch all of the videos in Financial Peace University on top of that until the book gets there. The book is fantastic, and it's going to have stories to inspire you. Financial Peace University is better than the book.

If I could recommend one thing, and you're willing to do it, it's those nine lessons. So tonight, we're going to sign you up. Tonight, you and your husband watch the first lesson. Okay. And download the EveryDollar app and start your budget tonight on the EveryDollar app. Okay.

And the both of you now, you really have to be committed to the vision of this, and it's a life-change change situation but it's going to set you free if you do it okay because you got to get tired of being tired i'm so tired of living like this yeah very much so yeah hey you got this you can do it places up from here pam we're rooting for you hang on we're gonna uh also to pick up and get you signed up you know i spoke to a group the other day and um and i got to listen to a group of guys and gals that had come through a drug rehab center. And what they said was four different ones got up, and they'd been clean and dry for two, three, four years, got their life back,

got to see their children again. Their children had been taken away from them. These were hardcore drug addicts. Crack, heroin, you know, everything. And they were completely dry and completely cleaned up. And I got to listen to them, and then I talked to them a little bit afterwards. And every one of them said, and the guy running the rehab center said, the people that get clean and stay clean all share one thing.

They always at some point say i'm tired i'm exhausted i've been running from these drugs or to these drugs for so long and the ones that are ready to change say i'm tired so when someone says i'm sick and tired of being sick and tired like she said she's tired of this that's's always a really good sign. That's a great indicator. She's not doing heroin. That helps, too. But she's, I mean, the point, you're right. But the point is that it's all behavior change, and behavior change is behavior change.

I mean, if you look down and you go, I'm tired of being fat, you know. I got, you know, I looked down, I'd gained a whole bunch of weight eating donuts during COVID, and I said, I'm tired of being fat. I'm tired. And I was physically tired, too. That's when life change starts. There's that. You can Google how to get out of debt, but doing it's the hard part. Yeah. I mean, everybody knows what to do. The knowledge is easy to find. How do you lose weight? You eat less and you exercise more. Away from the donuts, Ramsey. Get away from the donuts, boy. I'll slap it out of your hand if I see one.

All right. I'll see how that goes for me. Yeah, see how that works out for you. This is The Ramsey personality is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225. Maurice and Z are with us in Phoenix, Arizona. Says on my screen, you guys are debt-free. Congratulations. Yes, Dave. What's going on, man?

Thank you. It's good to hear from you all you too congratulations how much have you paid off we paid off sixty two thousand dollars dave in 10 months good for you and your range of income during that time it was 135 000 a day oh i love it good for you so what kind of debt was the 62 so the debt consisted of it was three grand from the irs and then also 59 000 from navient we uh kicked navient out the basement get rid of ugly uncle navient i love it that's right yeah he's a brother to sally may brother and sister of ugly they might be kissing cousins Mae, brother and sister of Ugly. They might be kissing cousins.

They're brother and sister of Ugly. I love it. You guys are awesome, man. Congratulations. What made you decide to do this 10 months ago? Honestly, Dave, I got put on to you in 2017 from our cousin Ashley, and she gave me the Total Money Makeover. And so I read that, and i also um was able to hear one

of your um you was talking about how to become an everyday millionaire on youtube and so after hearing that i was just sold because you know where i'm from we only talk about you know becoming a millionaire you have to you know play a professional sport or just you know blow up and be famous so after i heard that you know regular people can do it, I was just sold and then I put my then, you know, girlfriend Z on to you back then in 2017. Yeah. And so back, back then I, um, I only had a car payment. That's pretty much the only debt that I ever carried.

And I was living with my parents and I wanted to move out. And so I was like, um, I read your total money makeover and I was like wow I could literally could you know just pay off my car payment I'm living rent-free I don't really have bills like why am I sitting on this so I paid my car off fairly quickly and moved out on my own and the rest is history. Wow all right how long y'all been married we've been married for a year and four months dave okay so when you get married you decide all right we're really doing this whatever debt is left we got to clean up and it's old uncle navient yes dave and unfortunately you know i brought the debt into the marriage so we have when we

got married we cash flowed our wedding that consisted of 20 grand. And then we hit the ground running, Dave, just, you know, working extra jobs. I remember working, you know, six, seven days a week sometimes. Z was also putting in extra work as well. And delaying, you know, that gratification, right? And just not going on vacation, you know, telling friends, no, you know telling friends no you know when we want to go out and we were just locked in and have the tunnel vision days wow what was the highest paying side job you guys did i would say the highest paying side job i did was officiating youth football on the weekend oh nice pretty good money doing that. Yeah, it was fun, man. What's that pay?

It pays $50 a game day, so I would do anywhere from four to five, sometimes six games a Saturday. Oh, wow. That can add up. Crushing it. That's good. So you guys saw what was on the other side of debt freedom, and that excited you. Absolutely.

And you were willing to do whatever it took to get there. And 10 months, and we're not talking about eight years of sacrificing and not living and doing these side jobs for 10 months you can do just about anything yeah but i gotta go back marie some there's probably a story i'm troubled by i don't understand you started in 2017 but you didn't really start well i started uh by uh i paid off my car so that was like one of the biggest things but um so yeah i think i think though what i'm saying is is when z came into the equation you got with it oh absolutely i kicked it into high gear for sure that's what the calendar tells me about the time she showed up we got rid of of Uncle Navient. Right, exactly. All right. It was a lot of theory until Z, and Z's kicking it in gear now.

Am I missing something? Yeah. No, I'm definitely a numbers person, and so in order to come into this marriage, Marie's new, like, okay, we actually have to have a plan. We have to get this done. Yeah. And there's no way that this is just going to linger around in our marriage. So, yep.

Marys, take notes on this because next time you bring something up, she's going to make you do it. Okay? I'm just saying. I like it. This is good. Y'all are awesome. You're fun. Way to go.

I'm so proud of you. How does it feel to be free? Man, it feels great, Dave, just to be able to, you know, once the bills are covered, just to look at the budget and just see all that extra freedom that we can do. You know, we're, you know, right now, you know, saving for a home right now. So that's exciting. So it just feels amazing. It gives a better sense of peace, you know, going to bed at night. And then also, too, it relieved a lot of tension within our marriage as well yeah you know i did

i do love what you said earlier maurice when you said um because you're like me you said i came from a neighborhood where we thought the only way to you know be wealthy was to be famous or something and i'll be an athlete or somehow become famous and uh when you actually understand the numbers and you start to go hey if guys that come that come from a neighborhood like Maurice or Dave can do this, anybody can do this, right? And that's a good message for everybody to hear. Absolutely, Dave. Absolutely.

Yep, absolutely. Because, you know, just like you said, Dave, you know, where I'm from, you know, this is what you see, you know, just people going to the NFL or NBA. But people don't talk about the grind, just living under your means, right, living debt-free. And that provides a lot of freedom in your life. So, yes, that's absolutely correct. Well, proud of you guys again. So awesome.

Who were your biggest cheerleaders outside the two of you? Who was saying, go for it, you can do it? Yeah, we had a ton of family and friends who knew about us being on this journey and they would cheer us on but i have my best friend sydney who um you all got to speak with her a couple of months ago she called in and did her debt free screen from phoenix as well um i remember we started our journey together at the beginning and um we actually finished around the same time i remember calling you know after a long day at work and things of that matter and we would call each

other and just talk about like what the first thing we were going to buy when we were debt free what we were going to do and so it just um it was really nice just having her along this journey with us we kind of were a trio here that's cool that's very good yeah well we got a copy of baby steps millionaires for you that's the next chapter in your story for sure you guys are on your way maurice you're gonna be a baby steps millionaire man i want to talk to you on the uh on that uh hour when we're doing that hour one of these days and i'll remember talking to you today when when that happens and also send you a copy of total money makeover which uh you can hand out to someone and get them started that's

what got you started. I'm also going to send you a one-year subscription to Financial Peace and every dollar through Ramsey Plus. And if you've not been through it, you guys go through it as a wedding gift. If you have been through it and you want to give it away to somebody and get them started, a lot of people buy these one-year subscriptions and give them away. So whatever you want to do, we're going to send it to you either way. And we're just proud of you guys. Way go amazing thank you so much day all right appreciate it man you bet maurice and z phoenix arizona 62 000 in 10 months making

135 count it down let's hear a debt-free scream three two one i love it that's how it's done right there man you don't need to wait on student loan forgiveness you can just kick uncle navi and out yourself it's more enjoyable that way and he's the bothersome old uncle you know not the cool uncle he's more enjoyable that way. And he's the bothersome old uncle. You know, not the cool uncle. He's a little creepy. He's the creepy uncle. He's always hanging around.

He's in the bedroom, won't leave. He just sleeps all the time. Asking for money every month. What a bum. He wants money all the time. He's always standing around with his hand out. That's so true. And he learned it from his cousin Sally.

That's right. And they're just... Everybody's got relatives, one or two like that, that you just don't want living with you. No. Uncle Navient and Sally, they got to go, people. They get their own place. And let me just tell you, Uncle Joe's not going to get rid of them. Try as he might. He's going to talk about it, but he's an enabler.

That's a good way to put it never heard it said that way in so many ways this is the ramsey show សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី George Campbell Ramsey personality is my co-host. Elliot is in Miami. Hi, Elliot. How are you? Hey, I'm doing well. How are you all? Better than, Elliot. How are you? Hey, I'm doing well. How are you all? Better than we deserve. What's up? I got a question regarding estate planning and basically which way you guys suggest to go, whether it be a will or a trust.

I have a friend who, I'm 30, I've got a friend who's also around that age, and his estate planning attorney was pushing him towards a trust. I was under the impression you only really needed a trust if you were, you know, a gazillionaire type deal. So I just wanted to get your thoughts. Your impression was correct. Okay. Okay. Let's talk it through for a second.

You do need a will. Even if you have a trust, you need a will still. Okay. And you can get one at mama bear legal forums.com what's your net worth uh my net worth is right around 750 to 650 depending on what day i look at it right now good for you well done awesome okay so the only thing a trust uh an irrevocable trust does for you is the items the assets that you retitle after forming the trust and the trust will cost about three thousand dollars a will cost 300 to 500 okay the only thing the trust does for you is it it does absolutely nothing on federal estate tax you do not have a large enough estate to be

taxed on a federal level the only thing is each state has you file probate on your estate when you die. Your heirs would. And they file with the probate court, and each state has a probate tax. Typically, they're 3%, 2%, something like that. I don't know what Florida's is. Okay? There's a lot of Tennessee uh tennessee's is less than two percent okay so that's what you would save on the amount that you put in the trust

you'd save two percent okay and yeah and that's actually that's the reason that the attorney was pushing them that way he's essentially saying your kids will save the money in the long run. Exactly. Here's the problem, okay? Whatever you put into that trust, every time you do a transaction with it, you have to involve the trustee. It's an absolute pain in the butt. Okay.

Could you expand on that a little bit? Yeah. Every time you do a transaction on the item that is in the trust, it's an absolute pain in the butt. You have to go get a trustee to sign everything. If you put your house in this trust, you can't sell your house without involving the trustee. Okay. They have to come to the closing. They have to do all the stuff.

They have to sign the contracts. They have to do everything because you no longer own the house. The trust now owns the house. And so operationally for a young guy like you, because you're going to do a lot of deals with these assets throughout your life, operationally having them all in an irrevocable trust is an absolute pain in the butt. And I got to tell you, my net worth is well in excess of what is needed for estate planning on the federal level hundreds of millions of dollars and i do not have a trust of

the type that we are talking about because i operationally even at 62 years old don't want to screw with if i get ready to sell a piece of property i don't want to screw with having to do with all this stuff so now I do have some trust in my estate plan of a different type and a different ilk but that's more of a liability yeah but I said protection you know the truth is I if I were you I wouldn't do it and and I haven't done it and mine is and I've got a lot larger net worth than you so we we don't recommend spending the extra three thousand dollars and putting yourself in a position of all this hassle to save 20 grand. Well, and when you think about it, what does the estate planning attorney have to gain? Well,

he's going to make 10x selling you a trust versus getting you a will. It's like a whole life insurance salesman. Well, except that this actually does work. Sure. You know, it's not a crappy product. If it's 2% it's two percent on a million dollars it saves you 20 saves your estate 20 grand if you've paid three thousand dollars to do that that's a fair trade not counting all the fact that you got to go through all the freaking hassle of operating everything this way and it's just now as he gets older and if he has a few million dollars and a bunch of assets that you're not going to do anything with you're going to let it sit there you're never going to touch it while you're alive or you have a piece of property that you absolutely are never going to touch while you're alive you can throw it into a trust and it won't get you know it won't get

probated so that that's helpful in that regard but it's a pain in the butt it's that's i just i not a fan not a fan not a fan kevin is with us in Philadelphia. Hi, Kevin, what's up? Hi, thank you so much for taking my call. How are you? Better than we deserve, sir. How can we help? So I am in the process of engaging or proposing to my girlfriend next weekend. Fun.

So I've been, yeah, I'm excited. So I've been trying to save or I've been saving for a wedding and stuff for, you know, our house that we're possibly getting married next year. Um, so right now I own a, or not own finance, a Toyota Camry 21. I owe $32,000. Um, not too long ago, a couple of weeks ago, I had to replace the transmission, and because of that, there is a negative equity of $8,000. I'm thinking whether or not you can. Whoa, whoa, whoa. Sorry.

Wait a minute. Replacing the transmission does not cause negative equity. Really? Yeah. Your car did not go down in value because you put a new transmission in it. Oh, okay. It would go down in value if it was sitting on the side of the road with no transmission. But you paid to replace it, right?

Yeah. The car is operating just fine? Yes. Transmission was installed by a reputable firm? Yes. Who told you the car went down in value because of this? This is kind of my my assumption oh okay all right you're great news you're wrong okay good i'm happy so the problem is i i make only 40 000 a year and you need to sell the car right now

yeah yeah you need to sell the car. Yeah. Yeah, you need to sell the car, but we need to find out what the cars really were. Jumponkellybluebook.com at kbb.com and put in their private sale. So if you sold it individual to another individual, what you could get for it, not trade-in value, because you're not going to trade it, you're going to sell it. And how much do you owe on it again? $32,000. Okay.

And what did you say the model was? It's a Toyota Camry 21. A 21. Okay. I'm going to guess and say you probably can get out of it. It'll probably sell for enough to pay it off. Used car market's white hot

still. Still a shortage on cars. Yeah. And I might be wrong, but just look it up see what you can sell it for see what it'll bring do you have any money kevin in the bank um yes i have about i think ten thousand dollars saved he's got to buy an engagement ring and he's got to get out of this car yeah so we want you to get like a five thousand dollar car and get rid of this thing so that you get your life back because you have no payments at this point. And, man, you're going to be able to pile up money so fast

because that car payment stinks, man. That's like a $650 car payment, isn't it? Yep. Ouch. Almost like I've done this before. And once she says yes, you have no one to impress. So it doesn't matter if you're driving a $5,000 car. Oh, and by the way, if she is only impressed with your $32,000 car,

she's not the one. Yeah, you're right that's fun congrats man that's exciting stuff yeah you're getting ready to change your whole life you're getting ready to be engaged and no payments life is good for you yeah get on the line let's figure out what this car is worth let's get rid of it brother and get you a little cheap car that you pay cash for and then save like crazy and move up in car later. You don't have to drive a hoopty the rest of your life, but you need to be driving one right now so you can get your life back. Because right now, Toyota's taking all your money.

I'm just shocked that a year-old Camry had the transmission go out. That's pretty wild. You know what? That's a good point. I'm like, is that under warranty? Well, there ought to be a factory warranty, not an extended warranty on that. But he said he paid for it, so too late now. But who knows?

I'd look into that, though, for sure. Too late. I'm fighting that. Probably too late. What drives me crazy, though, is people going, well, Dave, you can't find a car for under $15,000 right now. There's no clunkers. Listen, I go to AutoTrader. I sort by lowest price to highest, and there's plenty of cars.

Are they beautiful? No. Do they work just fine? Barely. It'll get you around. You'll be okay. And they're going for three, four, five. There's still cheap cars out there, but you're not going to impress anyone driving down the road with it.

Give it a fancy name. Call it Rusty. Yeah. Old Bluebird. Did you have any names for any of your clunkers? Oh, yeah. They all had names. Were they female?

I feel like that's kind of the thing for guys. No, I had the one that was Bondo colored, and we called it Bluebird. Oh, I like that. Because it's kind of like blue-colored Bondo. Yeah. Makes it prettier. I'm not sure what the real color was, because it was mainly repairs. Just duct tape.

Yeah. Bearing wire. Really ugly. When I drive a nice car now, I just remember Old Bluebird, and I figure I drove like no It was just duct tape. You know. It was really ugly. When I drive a nice car now, I just remember old Bluebird. And I figure I drove like no one else, so now I can drive like no one else. There it is. This is The Ramsey Show. Dave here.

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