The Ramsey Show - App - We Have the Vaccine for Your Money Problems (Hour 1)

Episode Date: March 31, 2020

Chris Hogan, Debt, Home Selling Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

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. I'm Dave Ramsey, your host, Chris Hogan, Ramsey personality, number one best-selling author, joins me this hour to answer questions. Now, this is a day to answer questions with me, so you're happy to, we'd be happy if you'd jump in. The phone number, 888-825-5225. And as we announced and have been announcing for the last couple of days,

last Thursday, Rachel Cruz and Ken Coleman and I did a message of hope that is uh broadcast on all of our outlets uh youtube facebook instagram and so forth and then each of our six ramsey personalities are taking a night and doing their own message of hope rachel cruz is uh was last night and uh very good, very strong. And, of course, Chris Hogan is tonight. So, Chris, what are you going to be covering? Obviously money, but what else? Oh, absolutely, Dave. Well, talking about, you know, adjusting to the new normal of what we're dealing with right now battling this virus, but also really digging in and reminding people as we talk about the stock market,

talk about retirement and your investments. What do you do right now? How do you respond to this? And so I'm really digging in and giving people some solid advice and some clear steps to take right now. One of the things that the stimulus package, the CARE Act, did was it made a few temporary changes to the 401k. You can withdraw your 401k without the 10% penalty. You have three years to put it back. Otherwise, you will be taxed on it, and the tax is spread out over three years. We've told people since the beginning of this company 30 years ago to not pull out your

retirement unless it's to avoid bankruptcy or foreclosure. With all of these leniencies, oh, and they're now allowing you to borrow. Instead of $50,000 against your 401k, you can borrow up to $100,000. $100,000. So you can double stupid if you want to. Really messing with the 401k at all is still a dumb idea. We told people since the beginning that don't take out your retirement unless you're facing a foreclosure or a bankruptcy.

And if you lost your job last month, you're not facing either. That's right. Today. That's exactly right. You may be later. That's right. And with some of those changes, Dave, as you and I know, they're pausing the evictions and the foreclosures. And so looking at this, I feel like what the government did was give a recipe for people to do stupid and to give them a permission slip.

And so I feel like people need to be aware enough to go, okay, that's not a step I'm going to take. Even though they're alleviating the 10% penalty, you still would have the tax hit to deal with. Not to mention, Dave, you've stopped compound interest from working in your favor. And so I'm hoping – And you've bailed out of your stock market at exactly the downtime, the wrong time to bail out. That's exactly right. And I remember back in 07 and 08 when we were dealing with a similar crisis, and you had done a town hall for hope. And you mentioned when you do that, when you jump out of the market, you remove their chance for a rebound. And that is so applicable right

now. And it's important. And so, you know, I'm excited to do the message of hope. I'm excited for people to hear. After you all did yours last Thursday, I had so many comments in my Facebook Live of people saying, thank you. They were so grateful to hear a calm voice that's clear. And I think it helped a lot of people. The interesting thing, too, about the stopping of an eviction or foreclosure is it is literally impossible for you to be in foreclosure or eviction due to a job layoff in the last two weeks. Because, you know, you've already paid March's rent. That's right. April's rent is due this week.

April's payment is due this week. It will be six months before you got foreclosed on. Yep. You don't think you're going to get your crap together by then? You may have a new job. You may not be working in the restaurant anymore. You may be having to do something else. But you're not going to not work for six months and lose your house.

And by the way, there's no state in the United States that will allow someone to evict a tenant one day after they're late. And so you're not even late yet. By Friday, you might be late on your rent. That could be possible. But eviction would not occur inside of 30 days in any state no and so this idea that they delayed foreclosures or evictions in the month of april that's political bs yeah because it's in practical fact it's not occurring due to coronavirus no it could be occurring due to other things that's right but i mean if your life was screwed up and

you were getting foreclosed on all through this year you could be coming down to other things. That's right. But, I mean, if your life was screwed up and you were getting foreclosed on all through this year, you could be coming down to April with a foreclosure or, you know, you're three months behind on your rent. But you had problems that was different than coronavirus. Absolutely. And so the reality is, Dave, I think right now what we're seeing is more of an awakening. We've got more people looking and going oh that emergency fund thing it is necessary it is something that i should have or be more serious about you know everybody goes along and you know we we don't take care of some area of our life until it goes into a heap and i you know i i

got the opportunity to start over because I was stupid in my 20s. I've done a lot of stupid stuff. And this may be your opportunity, your wake-up call. And it's not an I-told-you-so thing by us. Hey, I understand. I mean, we've been there. I understand not having your crap together in a certain area of your life. But this is your wake-up call, and this could be the time that marks,

and you point back 30, 40 years from now with your grandkids, and you say, yeah, back there in alt-20, I remember the virus. That's when I stopped borrowing money. That's when I got my emergency. You'll remember, and you'll tell that story. My grandpa used to tell me about the Great Depression when we were pulling nails out of a board and straightening them out and putting them in a coffee can because he saved money

and was frugal the rest of his life because that was his never-again moment. Sometimes you have those happen individually in your lives, and sometimes you have a culture-wide event like this that is your wake-up call. But for sure, we've got the answer. We got the vaccine for this. Yes, we do. We got the vaccine for this, and it's proven over 30 years in millions of people. It really is.

And, you know, one of the things that came out of that was obviously the opportunity for people to be able to plug into Financial Peace University and the 14-day free trial. Which we've never done. We've never done that before. And if you right now are at home not working, you have more time on your hands than you've ever had before, which is an opportunity for you to have that never again moment, to truly get plugged in and say, I don't like this feeling.

I don't want it near me or my family anymore. What do I have to do? And it's a great opportunity. Just go to DaveRamsey.com slash hope. I don't want you to delay anymore. I'm talking to people, Dave, on my show. Talk to an 18-year-old today that went through foundations. This young man has an emergency fund of six months.

He's 18. Yeah. And he's changed his thinking. I couldn't spell emergency fund. No, me neither. So it's impressive. Yeah, it's very impressive. All right, back with your calls.

Be sure and check out the 14-day free trial and all the other things we've got for free for you. They help you right now. DaveRamsey.com slash hope. Free or near free. Tons of stuff there. More on that later and back with your calls right here with Chris Hogan on the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options?

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Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Chris Hogan, number one bestselling author, joins me this hour as we answer your questions about life and money. Chris is with us in Massachusetts. Hi, Chris. Welcome to The Dave Ramsey Show. Hey, Dave. Thanks for taking my call. How's it going?

Better than I deserve. How can Chris and me help you? So my wife and I are expecting our first child this September, and we currently own three properties, two rental and our primary. We're on baby step number two and are wondering, should we sell our rental properties, use those profits to pay off our debt, build a three- to six-month emergency fund and pay off a portion of our primary mortgage, or keep the rental properties as a source of retirement income

and pay off our debt over the next two to three years. What's your household income? With the rental income, it's $165. Without it, about $115. And what's the – that's gross. What's the – you're not making 50 net on those. How much personal debt have you got? We've got about 90 split up over car loans, student loans, credit card, personal, and medical.

Yeah. So you have three properties that have $100,000-something equity across all of them. Well, if I have about 40% equity in the two-family, I bought that a few years ago. The condo is about 20%. You sold them all. What would you clear? About $200 to $220, depending on commissions. Okay.

So clear your $90 and then your emergency fund, and then put a chunk on the house, a good chunk. Yeah, probably about 40% to 50%. We owe about, well, maybe a little less. We owe about $300 on the house. good chunk yeah probably about 40 to 50 we owe about uh well maybe a little less we owe about 300 on the house yeah yeah okay okay so you've got at least one property that has substantial equity yep and that's the one that cash flows the condo that's got about 20 that kind of breaks even it doesn't have a cash flow that's what i was looking for see that one's there's no joy in that one. That one's gone. It's as much a liability as it is an asset.

So what's the medium one? The two-family one? No, the one that's got the medium amount of equity. The condo's got no equity. The other one's got a chunk of equity. And what's the middle one? Oh, the middle one's our primary residence. No, no, you own three rentals, don't you?

Two rentals, one property. Oh, I misunderstood. Okay, I misunderstood. All right, I'm dumping the condo for sure, regardless. Yep. Because it's not a blessing. It's probably left over from where you used to live there or something the um uh and that's not going to clear the 90 anyway but it'll put a chunk towards the 90 and it'll

get that monkey off your back and allow you to run run the road and then i'm going to try to hold that two family i think i'm hearing in the way you're talking that you think that's a good property and you'd like to keep it yeah and i don't want to give it up because where it is located, there's a lot of development going on, and I can only see the equity increasing further and further in the next five years or so. I thought I could hear between the words that you really like that property, yeah. And so you'd be kind of willing to fight for it in the sense that if we don't sell it and still have some debt, we're going to have to really cut our lifestyle to knock that debt out

and get that emergency fund built with this baby on the way, right? Yep. And if all that doesn't go well for some reason, you can always put it up for sale and sell it. It would just cause you to shed a tear. Are you hearing something else, Chris? Yeah. No, Chris, I agree with Dave.

I mean, you're going to sacrifice right now to be able to gain, but the biggest change is going to have right now to be able to gain. But the biggest change is going to have to be the appetite and for debt. You know, and looking at this with the student loan debt, the credit cards, the car. I mean, you got to change your whole thinking on this stuff. And, you know, I know in school and grad school, they taught me OPM, other people's money and leverage. And what that was was all stupid. And so getting rid of that condo and you putting yourself on a path, my friend, you can change your life. Absolutely.

Good question. Jonathan's in Michigan. Jonathan, your question for me and Chris. Hi, Dave and Chris. My wife is at home with our three kids and I work for a small company that has a big upside, but not always a very stable paycheck. And so we just got to Baby Step 3 last month. We got there at one point last year and started Baby Step 4, 5, and 6, and then had to back off and draw some of the emergency funds and some stuff at work. So work is in a better spot now. We just got our fully six-month emergency fund, and with some of this extra money from work, the stimulus money that's coming, our question is should we dive back into baby steps four, five, and six,

or is there any reason to save up some cash beyond the six months with everything that's going on right now the reasons you've been giving me are you don't think your job's stable that's that's right we're in a good spot we're in agriculture so everything's good right now it's spring people are buying this time next year what's the percentage chance you still work there uh i've been here a long time i wasn't asking that we're still here i wasn't asking that i'm asking what would you put a probability on you being there this time next year 80 then you just put six months in your emergency fund and get back with your baby steps

you're just worried sounds good but if you tell me 50 50 i'm gonna say stop baby steps and pile up cash or hurricane's coming. Jonathan, you said your income is stable now. Have they ever not paid you? It's gone up and down. What do you mean? Have they missed a paycheck to you in your career there? Yeah.

How many times? A couple times. Okay. Now i it's a small company i know the owners well i know uh their whole story and and uh would it wouldn't be doing it if there wasn't uh if there was a good opportunity here that was worth missing a paycheck for every now and then. Okay. Well, like as Dave says, keep down your baby steps, my friend. Stay focused. Six months, though, for sure. Yeah.

On the three- to six-month side. But I would stay at six months, and above that I would just take back off because this is what you've chosen to be your career field. So let's say in the next year you miss two paychecks. We said save six months. So you're okay. And if you're not going to lose the job, if the thing's not going to fold up 10 on you, you don't think it's not going to survive the corona shutdown, then if that's the case, you just stop right now and pile up cash and get ready for the hurricane.

But Chris is exactly right. The thing you've got to do is this. What happens in our minds, and what Chris and I are trying to pierce through with you and any of you listening right now, is Dr. John Deloney, our recently minted Ramsey personality, Dr. D., says that when you're scared, when you're in a crisis, facts are your friends. Let's just stop. What are the facts the facts are this is a small company the facts are they have missed a paycheck or two over the years but the facts are not

50 chance this is closing by next year right that's a worry that's not a fact you don't make your decisions on the worry you make your decisions on what are the facts do you really believe that this is going to go away and it could be there's a lot of small businesses that are not going to survive a four week or five week or six week shutdown we're going to lose a considerable portion of our economy to this it's uh 54 of the gross domestic product is small business yep and some of them a lot of them are not going to make it and they're where the jobs come from they're where the rebound comes from and the economic scar left on the landscape from the corona shutdown is going to be very very real so you gotta you gotta analyze that and say is

that me yeah do you think people really understand that about small business i don't know if they connect the small business to the jobs that people are working well i mean it's 78 of the new jobs created in the last 10 years were by small businesses people under 500 employees and they're the ones that are going and and let me tell you, these SBA loans are not going to save them. And a payroll tax deferral is not going to save them. When you stop the economy, when you stop the economy, I mean, I'm not making a medical judgment. I don't know about corona. I don't know what it takes to beat this virus.

But I do know about the cure, and I do know what the cure is doing. The cure has officially got people more afraid right now in a lot of cases than the virus, especially the people I deal with because I deal with a lot of small business people. And it's 54% of the goods and services in America are created by people who are going to struggle to survive a four- to six-week shutdown. It's pretty stinking incredible. Pretty incredible. Amazing.

This is the Dave Ramsey Show. We'll be right back. Joining me this hour, Chris Hogan, answering your financial questions here on the Dave Ramsey Show and your questions about your life in the middle of craziness. Ray Stroll is with us in Wisconsin. Hey, Rachel, how are you? Hi, Dave and Chris. Thank you so much for taking my call. How are you both today?

Better than we deserve. What's up in your world? So two questions for you, one small, one big. So the small question that I have is I make about $37,000 annual, have about $2,800 for my monthly income. I'm very close to finishing Baby Step 1. I'm about $200 away, so I'll hit that within the next two weeks of getting a thousand. So in regards to the stimulus check, so my first thought was I'd have a fully

funded emergency thousand dollars. Would I use that stimulus check to pay my credit card? Cause I also was a little stupid and I bought an, and I put that on my phone plan, so that's an extra monthly payment each month added to my phone plan, which is about $500 versus my $900 credit card. You need to list your debts smallest to largest, pay minimum payments on everything but the little one, and attack the little one once you've got $1,000 saved. What's your smallest debt?

$75 medical bill. Done. What's the next smallest debt? My $85 credit card. Done. What's the next smallest debt? $96 credit card. Done.

Got mosquitoes flying around you, don't you? All right. What's the next one? I have Apple AirPods at about $150. Done. Got mosquitoes flying around you, don't you? All right. What's the next one? Yes, I do. I have Apple AirPods at about $150, and those, that's added to my phone plan. You're an Apple junkie. All right. And so that's another one. All right.

Done. So, I mean, just keep adding up. We got rid of four deaths already, and I haven't even got to your iPad, and you're going to get to it in a minute, aren't you? I have a dentist bill of about $500. Okay. We'll just walk through smallest to largest with your stimulus check or any other money you get. And I think you probably need to stay out of the Apple store.

I was just getting ready to say that. Rachel, no more apples for you. You need to go oranges. Okay. I like oranges, though, too. All right. Okay. I like oranges, though, too. All right. Good. Hey, and once you pay off those credit cards, cut them up and shut them down.

Okay. They get deleted out of your life forever. Moving forward. No more. Can you get your every dollar budget going, kiddo? A little bit. I just started the Financial Peace University yesterday because I have been working from home for the last week.

Wonderful. Okay. Well, get your every dollar budget going and it'll help you to work this. You're going to make, you know, it sounds like in terms of numbers of debts, you're going to clear a whole bunch of them with $1,200. Yeah. A bunch of mosquitoes flying around. What you're going to see is this reduction in stress, even though you only paid off $1,000

or $1,500 worth of debt. But it's like five debts or six debts or something. That's going to feel really, really good. And you're going to get a sense of progress, a sense of accomplishment, because you are making progress and you are accomplishing. All right, Dave, I'm going to ask you a question. We've looked at this CARES Act, and we know that the checks are supposed to be coming and all this other stuff.

Do you think they're going to continue the checks? Or is this a one and done? Well, I don't have any idea. I mean, who knows? Predicting Washington? Do you want to make me laugh? But, yeah. I'm not going to predict what those people are going to do. They wanted to put windmills in the stimulus package.

I'm not going to predict what those people are going to do. They're crazier than a bean. But I do know – no, I hope there's not another one. Because, I mean, we were already $19 trillion in debt. Now we're $21 trillion in debt. That's right. And I'm thankful that some of you are getting a $1,200 check each and a $500 per kid check and all this stuff.

But truthfully, if $2,000 changes your life, you were already struggling, honey. You already had other issues in your income or your budget or your spending or something. I mean, think about it. If $2,000 changes your life, it means you mathematically don't have much of a life, ratio-wise. I mean, because if it's 10% of your world, that means you make $20,000 a year, which means you make one-third of the national average of household income. So you're struggling already. Yeah.

You're at the poverty level already if it changes your life. So it'll help you, and I'm glad you're getting the help. I'm not mad about it or anything. But this idea that somehow you're going to be okay because the government sends you $1,200, truthfully, honey, you're going to be okay because of you. If you keep a clear head and good critical thinking skills and, you know, you go pick up a job because you lost one, and you go pick up two jobs because you lost one, you go pick up three jobs because you lost one, and suddenly I'm delivering for Amazon during the day and pizzas at night and blowing leaves on the weekend because rich people are scared of leaves, you know, and I'm doing whatever it takes, right?

You can social distance your butt from some leaves, right? That's right. But, I mean, there's all kinds of things you can do to create an income, and that's going to be a whole lot more important than $1,200. Yeah. No, you're absolutely right from an ongoing measure. And I address that on my show today. You think we're going to get another one?

No, I don't. I do not. I don't know if the American people have a political stomach for this again. They were so afraid of everything that they got chased into their homes, and they were so afraid of anything that they thought if Congress didn't pass something that we were all going to die because they keep thinking Washington's going to fix their lives. For years they thought that. That's never.

I mean, what happens in your house is a lot more important than what happens in the White House. That's right. And so, you know, there's not anything going to come out of D.C. that's going to help you long term. I mean, you get some small helps out of it. But, I mean, if you say 30 years from now I'm a success, it will not be because of a bill that was passed you know that's just it will be because of you got up left the cave kill something and drug it home that's the way it works in the real world and so but we've been trained by our obsession with politics and politicians that they're going to somehow provide for us and so it's nice they try, and some of them actually have a good heart, I guess.

So few of them it's hard to imagine, but truthfully, most of it, it's about them. It is. It really is. And it's almost like they see us as puppets and they know how to pull the strings. I can see another stimulus package becoming square center into the upcoming election. I can see that word being thrown around as if it's going to save the day. And I just, it worries me. Well, I think if you wanted to ensure that Trump is not reelected, what you'd want to

do is keep the economy shut down as long as possible. Because the economy, you know, the more it's going to fail, the harder it's going to be for him to be elected. That's what it's going to amount to. And so I'm not saying there's evil forces at work here. I don't know. I don't have any idea. But it does feel a little bit like trading places where he hands the dollar over

and he bets him, and then at the end he hands the dollar back. Mortimer, right? They make this dollar bet on a guy's life. Yeah. And so that's what's going on. And I'm not saying they're doing this. Somebody's doing this to get Trump out of office. That's not the point.

But if you can extend it another week and it gives that much more damage, it's going to have an impact on him. And on the other hand, if everybody dies because of the coronavirus or something, then he won't be reelected either. So he's got to manage the tension between the two for his own political aspirations. So it's very interesting to see what they can agree on up there. But at the end of the day, you can't control any of that. All you can control is you. That's right of that all you can control is you that's right and all i can control is me and i'm going

to control my attitude and i'm going to control my money that i have actually in my hands and i'm going to control my opportunities that are in front of me by not succumbing to panic and hysteria yeah no i tell people and if you watch this evening, my message of hope, I'm going to talk about the four things that we're able to control. And, um, I firmly believe our faith is under our control, our attitude, our outlook, and our actions. And we have to remain in control of those. That'll preach right there. We have to. And regardless of what's going on. And I want to encourage you out there, this is the time for you to get plugged in and understand what the Lord and Savior can do for you in your life.

It's imperative. But we have to be in control, and we've got to look. And the government's job is to keep us safe. It's our job to protect and conserve our resources to the best of our ability. And we can do this, my friends, and we're here to help yep chris hogan joining me here today on the dave ramsey show be sure to tune in at facebook and youtube on his youtube channel or mine or any of the other ramsey personalities you'll find his message for hope tonight uh each night we're having a ramsey personality put out another message we're just going to flood the airwaves with this stuff. Tens of millions of you have already tuned in. Rachel Cruz was last night. Chris Hogan's tonight.

Tomorrow night's Christy Wright. Dr. D is going to be on Thursday. Ken Coleman on Friday. And Anthony O'Neill next week. Thank you for joining us, America. We're so glad you are here. As Chris mentioned earlier, we have a free, for the first time in 30 years, a free 14-day trial to Financial Peace University. You can do it all online because I know some of you are at home,

or most of you are at home for the next 14 days. And it's a chance for you to go through all nine lessons, all the premium content, plug into the communities, plug into the EveryDollar Plus, the world's best budgeting app, plug into the class after Financial Peace University. Just binge watch something other than Tiger King, baby. I mean, it's simple, right? So there's stuff out here that's worth watching. And this is completely free for 14 days.

It's a 14-day free trial. The Smart Money, Smart Kids curriculum is in there from Rachel Cruz, teaching your kids how to handle money, all kinds of goodies in there, and it's all completely free. You can find it at DaveRamsey.com slash hope, DaveRamsey.com slash hope. Lots of other free and near- free resources that you can download digitally from where you're sitting and never have to leave the safety of your own home to do that. Because we're well aware many of you are very, very concerned about that. And we want to help you during these

tough and weird times and be there for you regardless of your particular situation. Louis is on the line. Louis is with us in Texas. Louis, your question for Chris Hogan and me. Hi, Chris and Dave. Thanks for taking my call. Sure, man. What's up?

Okay. So basically I got tired of being broke. I started paying off my debts. Unfortunately, it was a little bit before I discovered you. And so I kind of stopped paying on some of my bigger debts to have more cash flow to get my smaller debts out of the way. Then I started listening to you and I realized, hey, because I have a mortgage. It's a 30-year mortgage. I'm never going to pay that off. I'm not going to be making payments for 30 years. So i want to refinance my house but basically my question is should i

keep paying my debts but work on my credit again and get it back up so i can refinance my house to a 15 year and then get rid of my credit score because i think the way you explain it why is your credit score bad? Well, because I stopped paying on some of my things. Oh, okay. We never recommend that. We would tell you to pay your minimum payments. Yeah, and it was right before I started listening to you.

Okay, that's fine. I'm not worried about you building your credit for the purposes of your mortgage, but I would want you to list your debts, smallest to largest, pay minimum payments on everything except the little one, and attack the little one. Now, I heard something else in there. Let me make sure I understood what you were saying.

I'm never going to be able to pay off the mortgage anyway. Did I hear you say that? Well, no, I'm not going to. I don't feel like I'm going to be making payments on it for 30 years. I want to do it a lot sooner than that. Okay. That's the opposite of what I heard. Okay.

Good. Good. Yeah. So you can put it – the only reason you refinance is not to go from a 30 to a 15 but to get a better interest rate. And then, Chris, he can pay off a mortgage once he gets his other things done. Yeah, absolutely. I mean, have you – Lewis, have you reached out to your current lender about refinancing yet? Not yet.

Why? Like I said, my credit score dropped a lot, and so I didn't want to start any process. It's like in the lower 600s. Okay. Well, you may or may not be able to refinance with your current lender, but I think if you'll start paying your payments on time and get current, then it'll come right back up. Yeah, I got current on everything. And I only have like $10,000 worth of debt. So it's not a whole lot. Yeah. Let me ask you this, because you said you ignored some of your bigger bills. Did you not pay your mortgage for a period of time? Oh,

no, no, no. I'm talking about like my credit cards. Okay. Well, like Dave was telling you, keep working down the baby steps. What is your rate on your mortgage right now? I think it's like a 4.5. Okay. Well, yeah. One of the biggest reasons I wanted to refinance my house is because I did everything the wrong way.

So I got a PMI, private mortgage insurance, and then I can't get out of that because I did one of those first-time homebuyer programs. Yeah, and you're still over 80% of value on your mortgage. So let's just slow down a minute. The thing that we figured out is when you try to do 16 things at once, what you've realized is it's hard to do any of them well. And so have you got $1,000 saved? Yeah, so, like I said, I started listing, and I got the $1,000. That's your starter emergency fund.

Then let's list your debts. Then let's list your debts. Then let's list your debts, smallest to largest. Let's start paying everybody on time and then start working on that smallest debt. What is your household income? I make about $75 a year. Good. Then let's plow right through that $10,000 right quick. Let's build up your emergency fund.

And by then, if these mortgage rates are still down around three, it's going to make a lot of sense to refinance a four and a half percent mortgage. Then and only then do you get in touch with Churchill. You may or may not have enough equity to do away with the PMI. You've got to be at an 80% loan to value ratio. You can't owe more than 80% of the value. Otherwise, they do charge you private mortgage insurance, which is expensive. But put it on a 15-year and get you a cheaper rate. But that's probably this time next year before you get around to it. And by then, I think your $600 will be up to $700 just by having paid off and paid early

and paid on time. Dave, I'm amazed that when the rates drop, and they are low right now with mortgages, it is a great time to refinance. It is a great time to refinance. However, if you are in a position to, you know, and so you've got to, you know, do the legwork and understand what's going on. But more importantly, understand that you're improving your situation. If you can improve your rate by 1%, that's something definitely to take a look at. I think what happens with all of us in our culture, we all learn to juggle multiple things garnering for our attention. The television's on, the phone's ringing, mama's cooking dinner.

There's a bunch of stuff going on. We are a fast-paced. Our brains are bombarded our eyes are bombarded and then we tend to do that same kind of add approach to our money and it's just like i'm out of control i can't think squirrel you know and so everything distracts you and there's a there's a real calming and empowering effect of the wisdom of focusing on one thing at a time. And I think that's been the secret sauce of this vast tens of millions of people, success we've had of getting people to do these baby steps.

You know, people say, Dave Ramsey, I don't agree with Dave Ramsey's baby steps. Nobody said they were perfect, but you know what? They're easy to understand, and they're very wise. It's really hard to really tear them up. I mean, you could take apart nuances of them, and that's fine. I don't care. You can criticize them. But what we have managed to do is clear people's fog, mine included, yours included,

and allows us a plan, a clear path, and our eyes get clear, our smile gets broad, and we step into it and pop something. You better believe it. You see the steps. You see the steps in front of you. I had somebody, Dave, call me, and he said, Hogan, I'm doing the Dave-ish plan. Ramsey-ish. Yeah, ish.

And I go, really? I said, hey, do you like barbecue? He goes, well, yeah. I said, well, I'm going to have you come over, and I'm going to feed you some barbecue-ish stuff. He goes, well, I don't want that. I said, that's exactly right. I said, so you got to walk the plan. I said, don't do ish, do it.

Why do I think that you don't even know how to do barbecue-ish? Oh, no. There's no way. If you bring it, it's got to have some depth. It's got to be real. You've got to believe it. It's got to be real. It's got to be real.

It might be a little too hot. But I just, I's no way. I think if you bring it, it's got to have some depth. It's got to be real. You've got to believe it. It's got to be real. It's got to be real. It might be a little too hot. But I just, I'm with you. The steps, they're clear. And you don't understand. Don't mess with the recipe. When it comes to anything, I mean, when I sit down with my marriage counselor, when Sharon and I have been married about 10 years, we're trying to kill each other. And, you know, what I needed was not how you feel, which she didn't ask me, by the way,

classic counselor line, right? Instead, she said, you're being stupid. Don't do that. The counselor came out and just told you that? Well, you think I need a counselor to do anything else? Because I'm thick. You've got to tell me. So she said, look, do this, do this, do this, don't do this.

And I went, clear instructions. I can follow clear instructions, right? You know? I mean, that's what we all need, because the problem is we get bombarded with all this stuff flying around in our head. It looks like an atomic symbol in our brain, and we can't focus on anything.

All of us do this. We need something where we go, just shut up and do it. That's the deal. Chris Hogan's with us. Fun hour. We'll be back with you guys and your calls before you know it right here on the Dave Ramsey Show.

Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.