The Ramsey Show - App - We Took a Loan at 149% Interest! (Hour 3)

Episode Date: August 22, 2019

Debt, Home Buying, Debt-Free Scream   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. Thanks for joining us. Open phones this hour at 888-825-5225. That's 888-825-5225. Eric's 888-825-5225.

Eric is with us in Charleston, South Carolina, starting this hour off. Hey, Eric, how are you? Good, sir. How about yourself? Better than I deserve. What's up? I just had a question. I'm currently on baby step two, and me and my fiance are trying to have a wedding next September,

so a little over a year out. I'm I'm in the military and we sat down, we did a budget and figured out that we can put about $1,400 a month towards the debt right now. But we're wondering as far as cash flowing, the wedding given my job, I occasionally get a supplemental like per diem checks and tax extensions and whatnot.

I'm wondering, would you go ahead and basically budget out the wedding into our existing budget, or would you just be putting all this surplus money towards the wedding and then basically adjust your wedding costs at that point? No, I'd budget the wedding. And the surplus money goes at the top of the budget as part of your income. Okay. As part of your income. So it effectively can go in there or be extra on the debt

because you've reduced what's going to the debt because you have some going towards the wedding. What are you thinking of spending on the wedding? We're trying to keep it as cheap as possible right now. It's looking at like $7,000. We're trying to cut that down as much as we can. Obviously, the debt, as of now, is our priority. We just don't know how much we should shift off of,

because we figure we could probably get our credit cards taken care of by April of next year, and then the car payment will probably get paid off just before the wedding. So we didn't want to put everything towards it. We're just trying to figure out how we can cash flow the wedding out to not basically put ourselves into more debt down the road. Well, I mean, there's two ways to do it. One is you knock the debt out, because that's what you're describing. And then the fact that you don't have any debt, you just lean 100% into the wedding.

I mean, if you get the car gone in April and you get the credit cards gone before that, you're going to be able to attack this thing. And, you know, you can fund the wedding over the summer, right? Well, no, I was saying the car wouldn't be paid off until about august of next year oh right the month before okay yes sir all right all right um well no i i would just back up then and say 700 divided by 12 that's the other way to do it right you got 12 months till next september and so you got 600 600 bucks a month is what you need to be doing, and that will get you there. And that's the wedding.

Because what do you make and what does she make? I make just about $53,000 after taxes a year, and then she's a dog groomer, so it's variable for her. So I would maybe put on an extra $10,000 a year potentially with her. Okay. her so i i would maybe put on an extra 10 a year potentially with her okay um why why does she not work full-time uh well she she does the dog grooming full-time and then she tries to pick up babysitting gigs and uh helping out uh her mom and her clients with their side business as well. $10,000 is not a full-time job. No, and she's just starting out. She's in the training aspect of it right now. Okay, all right.

Without her getting her certification, she's working under somebody, and that's just what she's at at this time. You have to have certification to do dog grooming? Yeah, I mean, you have to go to a school in order to get qualified, basically. They teach you all the different cuts and whatnot. But she found somebody when she moved here that says that she could just work under her and basically get the same training for free. Okay.

I can imagine you need training. I just didn't know you needed a certification of the training. I mean, you need to know how to cut the dog's hair. I've seen dogs that their hair was cut by somebody that didn't know what they were doing, so we don't want that. But that happened to one of my dogs once. I went, oh, that didn't work out well. Sorry about that, dude.

I've seen some pretty good home jobs. I used to do our schnauzer when we were broke. He didn't like it at all. But it was ugly. Anyway, the – okay, so, yeah yeah her income's not going to be 10 000 in the coming year or she's going to be doing something else correct yes sir okay so 10 000 is not accurate so the bottom line is you know she ought to make 20 25 30 something like that anyway um and so what I was trying to gauge out is the $7,000 wedding reasonable, and it's very reasonable, very reasonable.

So I would just start budgeting $700 a month towards that, and then every dollar you can squeeze out of anything, anything you can do for side hustles to make money, her especially, we just throw that at the debt, throw that at the debt, throw that at the debt, and you'll probably have this done before August as far as the debt goes. And then you may be able to, in the last 30 to 60 days, beef up your wedding budget a little bit and get on up to $10,000 or something, which is okay. I mean, that's all very, very reasonable in your situation.

Which branch are you serving in? I'm in the Air Force. Thank you for your service. Thanks for your support. Hey, man, appreciate you calling in,'m in the air force thank you for your service thanks for your support amen appreciate you calling in and congratulations on the upcoming wedding very proud of you open phones at 888-825-5225 brent says dave i've been listening to you and i just finished one of your books i'm thankful to find someone that's got financial wisdom and explains it well thank you i appreciate that.

And let's see here. Patrick says, do you ever get a call where you want to gift them some money? I feel like when I'm listening sometimes, I want to give them money. And it could help them. It could just cause them to tread water. It could help them stay in where they are. You know, the weirdest thing, Patrick, God bless me with when I started this show 26 years ago, I didn't have any money to give them. We were still, you know, struggling ourselves.

We're still trying to grow a business. And I guess if I had been wealthy when I started, I might have set some different things in place. But if I had given somebody money in the early days, Sharon would have killed me when I got home. It's like, you want a needy family, son? You're living with one. You know, it's like. So that would have been the conversation in the early days.

So that kind of set the pattern. And I think there's probably a lot of wisdom. Yes, it comes up now because I've got money. And we do a lot of giving through our family foundation and a lot of just random acts of kindness and stuff, too. But we made the decision to never do it on the show because I'm afraid it would change the show. And it would turn it into, I want to call in and be pitiful so Dave gives me money. And instead of, I may be pitiful, dave gives me money and instead of um i may be pitiful but they will help me get out of pitiful um and and so i it's not the service that on the

air that god's called us to provide it's not a game show and so but you know we might have done it differently if we hadn't started out without any money um but it's it's been a blessing i think to to do it the way we have but yeah it does come up i'm thinking i'm talking to somebody and you know five thousand bucks to change their whole dadgum world right now just talking to them and i'll it really is a little bit tempting sometimes but um no we're not gonna it's not gonna be tempting enough to do it because i'm afraid it would change the whole tenor of this and i might help that one person, but there's 15 million of you listening. If I screw that up by helping that one, by changing the tone, the tenor, the feel, the spirit of this thing,

and it turns into I got a gauge on the air whether somebody's telling the truth or not, all that kind of stuff. No, I don't need to get into that. That's dangerous ground. Thin ice. But yeah, admittedly, to your point, it is tempting. Because most of these people that call in, it's really believable. You believe where they are. This is the Dave Ramsey Show. I got a call the other day, and I thought it was worth talking about again. It was from a wife looking for life insurance for her family.

She asked why I only recommend term life insurance instead of cash value plans like whole life. I usually explain how you overpay for coverage, earn a horrible rate of interest, and don't get your cash value when you die. But this time, I just had her go straight to Zander.com and get a rate. And then we compared that rate to the whole life plan, and she immediately saw the huge savings. She realized all the things she could do with that money, like paying down debt, investing in a smarter way.

That made it real for her. It makes no sense to buy or keep a cash value plan when there are smarter, less expensive ways to protect your family. That's why I suggest that everyone go to Zander.com or call them at 800-356-4282 and get a free quote. That's zander.com or 800-356-4282. Thanks for joining us, America. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings.

They have site-wide savings happening right now. It's a great place to get window blinds. I bought some for my porch off of there. Got a deal on them. You can get an extra 5% off if you use the right place. Use Ramsey as the code word. Blinds.com slash Ramsey. Yvonne in Michigan says, my husband and I have been married a year.

No kids. We have no debt. Just regular monthly bills. We have $1,000 emergency fund. Just starting to save baby step three. And we only make about $35,000 a year, but we're able to save about $700 a month if we stick to our budget. It seems like it will be years before we can make any big purchases like a car or a home. What are our next steps so we can have more financial stability?

You're doing them. I mean, $700 a month on $35,000 a year is not bad. And, you know, in 10 months, that's $7,000. You're going to have a pretty good emergency fund in place. And then you're going to save up for a better car. And then you're going to save up for a down payment on a house. Yvonne, here's the thing. You started fabulously.

Married, no kids, no debt. The only negative part of your equation is your incomes are low, or your income is low, one of the two. And so, you know, I'm going to start working on that career thing and looking at it. Just to kind of give you an example, at $35,000, the average household income in America today is $58,000, $59,000, right in there. And so, you know, that puts you not half of average but close. And so I'm guessing only one of you are working

or you both have really entry-level jobs, one of the two. Bad jobs. And so we need to get your income up. That's the thing. And I think you probably will. Normal course of events, young couple gets married, their careers blossom, take off. Both of you get jobs, both of you are doing. And if you'll stay away from the debt, keep your emergency fund in place and keep on a budget,

every raise you get is going to be pure savings because you're used to living on nothing and so every raise you get it's going to go straight into you know that next getting that house or getting that decent car or whatever it is you're doing so i think as you see your income shoot up and i'll give you a prediction in three to five years your income should at least double at least probably triple so just be working on it with that in mind and thinking how we're going to get there and then keeping your lifestyle down keeping your expenses down and again then that opens up tons of room for giving and for saving very very good start good start. Jennifer is in Sacramento. Hi, Jennifer. How are you? Hi, Mr. Ramsey. Thank you for taking my call. Sure. What's up? Well, my husband and I have been trying to work your steps ever since we got engaged. We've been extremely gazelle intense, and we are now completely debt-free. We have our Roth IRA started, and now we're trying to look for a home.

Good for you. Thank you. I am 26. My husband is 27. And we've been looking for a first-time home, and we've got about $23,000 saved up for a home. Good. But being in Sacramento, the prices here are crazy. Yeah, you live in California.

Yeah. And so I'm just wondering with the prices fluctuating the way they are and rent being astronomical, whether or not we should try to still get a home or should we try to rent for a while? I'm working two jobs my husband is working two jobs and the unfortunate part of it is that i am burnt out and if you slow down on your uh saving towards a house because you back off of some of those jobs and it takes you another year to buy a house instead of buying it this year that's okay okay but i wouldn't do i don't think we can blame the real estate market on that we're just going to say i'm too tired to work two jobs for a house that's okay that's okay the reason we've been able to save so much is actually our our home situation right now. The second job that I have is I'm a caregiver and we're able to live

upstairs for free. But with doing that, I'm working about 13 hours a day, six days a week. So you would lose that housing if you change that job? Exactly. So then we would be paying rent rather than being able to save that much. So we'd be looking at more of another two years. How much are you paid for your job? For the caregiving job? Do you have another job on top of 13 hours a day? Well, it's both.

So I work as an occupational therapy assistant, and that's my eight-hour day, and then I come home and I work the night shift. Oh, so they have someone else there caring for the person during the day. Yeah. I see. Okay. All right. Well, yeah, if you're tired of doing that and you keep your day job and you move out, that's okay.

That's okay. It's going to slow down how much money you save, obviously out that's okay that's okay you're just gonna it's gonna slow down how much money you save obviously you already figured that out you know but that's not the other world the real estate market in california is always volatile and it's always expensive about the only thing you can count on is it's going to change but i'm not hearing anything about the market shooting up or shooting down. It's only going up right now. But that's okay. It's not a big deal.

Just, you know, if you can find something inexpensive to rent, you want to get your life back, so to speak, and slow down your house acquisition, it takes you an extra year to buy a house, that's okay. Would you say that would be the smarter plan rather than trying to let's say the the kind of idea was we would go in to get a a starter home like trying to stay in the mid 250s yeah get something cheap and get started yeah but it would be it would be we wouldn't be able to do the 15 year then you need to go down until you can get to the 15-year. Okay. You keep going down in price and up in down payment until you can get to the 15-year. That didn't change in this discussion.

But get the cheapest. I don't mind you starting at the cheapest possible house. What about if the area is safe? Well, as long as it's safe. You've got to decide where you want to live. I'm not going to live there. Okay? But, you know, in your situation, what are you want to live i'm not going to live there okay but um you know in your situation what are you willing to do and you know i'm not ever going to recommend more than a 15

year fixed i haven't in 30 years of doing this show of course and i'm not going to tell you to do something that i think's bad for you in other words because i want because i want you to win i want you to do good but i get it i I mean, you're working like a maniac. And if you want to slow down the down payment process and rent for an extra year more than you thought you were going to because you've had it with this schedule, hey, that's okay. It's not the end of the world. You're out of debt. You have your emergency fund. You've got your Roth IRAs going.

You know, you're doing great. Thank you. You know, it's okay breathe a little and you know if you gotta buy a house you don't have to buy a house right now it's okay you don't have to right now you just don't have to right now kayla's with us in richmond virginia hi kayla welcome to the dave ramsey show hi how are you better than i deserve what's up. So I'm going to kind of give you a little bit of a back story of what happened. A year ago, I was pregnant, just had my baby. He was a high-risk baby, and we had to go in and out of special doctors and stuff like that. Well, my husband decided to take out a loan for $2,400 so we can keep our place. I went ahead and called today to see exactly how much we owe

after paying one year of $306, one year paying on it, and we owe $2,500 still on it. I don't know what to do, and I cannot seem to get this debt down. Is there a local office? No. Okay. Well, I mean, I would demand to know how in the crap that happened. You obviously got in one of these rip-off finance company loans.

It's 30% or something. It's 149% interest rate after I've called them and asked them exactly how much the interest rate is. Oh, how neat. I've never heard of that. How neat. This is what happens when you don't look at what you sign up for. Exactly. My husband was just trying to do the right thing. No, he wasn't. He was stupid. I mean, who signs up for 149% interest? That was dumb. You know, you have to look at what you're

doing. You drive your car in the ditch otherwise. So go get a credit card for $2,000 and pay this thing off with a credit card, and that will only be 18%, and then take three jobs and get on a budget and get this mess cleaned up. This is the Dave Ramsey Solutions, Shannon is with us. Hi, Shannon. How are you? How are you? Better than I deserve.

Where do you live? I am from Moberly, Missouri, about 30 miles north of Columbia. I know the area well. Absolutely. Very cool. Well, welcome. Thank you. Good to have you in Nashville and all the way here to do your debt-free scream.

All the way here for this debt-free scream. How much have you paid off? $35, welcome. Thank you. Good to have you in Nashville. And all the way here to do your debt-free scream. All the way here for this debt-free scream. How much have you paid off? $35,700. And how long did that take? 17 months. Good. And your range of income during that time? Started at $38,000 and ended at $45,000.

Good for you. What do you do for a living? I'm the Director of Marketing for Foundation Repair and Basement Waterproofing Company. Oh, cool. Good for you. What do you do for a living? I'm the director of marketing for a foundation repair and basement waterproofing company. Oh, cool. Good for you. And what kind of debt was the $36,000? Same as everyone else. A little bit of everything. I had a medical debt, student loans, car loan, personal debt. I had a credit card, just a little bit of everything, just kind of hanging out there. You were normal?

I was so normal. Just trucking along? Just trucking along. Nobody's bothering you? All the money comes in, all the money goes out? All of it. No big problem? Right.

There's nothing here? Then something disturbed you 17 months ago. What happened? It did. So actually about two years ago this month, I was going through a divorce. That'll disturb you. That was a huge disturbance. And I found myself living at home with my parents. So while I was living there, I had no bills.

And I had all of the money that I thought I needed. But then it went away. And I would say my turning point was when I got a call from a credit union saying that if you don't pay your car, your car payment, we're going to repo it. And that was a huge wake up call for me. That was absolutely the bottom for me. And at that time I had a one-year-old little girl and I decided that's not going to happen. So full gazelle intensity kicked in and I started selling everything. So like I said, I lived at home and I didn't have any bills.

So I sold clothes, toys, diapers, furniture, things I was even using that I thought I needed. It was gone. And it was just no looking back and no turning back at that point. Wow. Yeah. You sell anything huge? Any big things? I did sell my car. Oh, wow.

Yes. So my car had been giving me some trouble. And fortunately, my parents had an extra vehicle. So I sold that immediately. And I drove it all the way through my entire debt-free journey. Their extra vehicle? Yes. Okay. All right. And what are you doing for a car now? I bought a car with cash. Ah, there you go. Look at you. What did you buy? I bought a Ford Edge, a nice mom rod, as everyone calls it at work. I love it. Well, you're a nice mom.

It's a paid Ford. You're a nice mom, so you need a ride. There you go. Oh, thank you. Good for you. Very cool. How's that feel? I mean, you come through this, because one thing about going through a divorce, especially

as young as you are, is it kind of says you're no good. And then you get to say, yes, I am. I just bought this car and I paid for it. There's kind of a, kind of throw your shoulders back and strut away, don't you? Oh, my gosh. So the feeling I've been thinking about, I knew you're going to ask this question. To me, the feeling is empowerment. Yeah. To me, the feeling is empowerment. It's more so I put my mind to something and I told myself that I was going to accomplish it.

I didn't care what it took. So now it's, you know, if I did this with my finances, what else can I do? Anything. The world is literally at my fingertips. Anything you want to do. Yeah, it's awesome. I got a feeling next time I talk to you, your income will have doubled. I'll tell my boss that.

I think that's coming. Well, he won't be your boss if he doesn't. Somebody else will steal you. Good job. Thank you. Very well done. So you had to have good cheerleaders at home, mom and dad. Yes.

Because they're hoping that you bounce back from this thing and you turn your whole life and you did. So they had to be going, yes. Have other cheerleaders around? Absolutely. I would say not everyone fully understood what I was doing and why, but they backed me 100%. And I read a great book by Henry Cloud, Power of the Other. And I had multiple others.

And sometimes you just needed someone to kind of slap reality back into you. The process is simple, but it's not easy to follow. And sometimes you just need someone to shake you and say, what are you thinking? You said you were going to do this, do it. And that's what I had. Absolutely. Good accountability. Yeah. Good for you. So what do you tell people the key? What are the main things you did? You sold a car. That's one big thing. Yes. Yeah. Good for you. Fun. So what do you tell people the key? What are the main things you did? You sold a car. That's one big thing. Yes.

And what else did you do? What are the keys to getting out of debt? Obviously, budget is extremely important. But to me, it's never allowing yourself to think that you cannot do it. I read a book where we talked a lot about future pacing. So you also say, you know, you become what you think about. And this moment right here is what I thought about the whole time. And it's easy to get off track and it's easy to think, you know, I want this, I want that.

But what do you want more? And what are you willing to sacrifice? So just focusing on this moment right here to be able to share this and hopefully inspire other people is really what kept me going the whole time. Love it. Yes. Love it. Well, we're honored to have that moment with you. Wow. Very, very, very cool. So how old are you? 29. And how long were you married? Two years. Okay. So quick, quick, short marriage. Yes. And a baby comes and you got baby with you and baby is how old? Three. Three years old. And what's her name? Landon Rose. Landon Rose.

All right. And so it looks like you had some friends or mom and dad or something come with you. Yes, mom and dad. Yep. Okay. So the support group is here. Yes. All right. And I often tell people I have no problem at all with somebody moving back home, like

in a situation like you're in. I think it was very wise what you did. Because that's a safety net. That's not a hammock. Yes. And you're obviously not a hammock person. You're a safety net person. You use that safety net very wisely. You got the car, use of the car.

You got help and expenses going down. That enabled you, with this income, to pay off $36,000 in just 17 months. That's very impressive. Yes. Thank you. I mean, you weren't out running around spending money on anything. You were game on, girl. Yes. That's what those numbers tell me, anyway. So Yes, thank you. I mean, you weren't out running around spending money on anything. You were game on, girl. Yes.

That's what those numbers tell me anyway. So proud of you. Thank you very much. Well done. Thank you. Very well done. Excellent. You're a hero.

Thank you. So don't tell me single moms you can't do it. This program is for rich people. I'm not talking to a rich lady right now. I'm talking to ladies who are going to be rich, though. Absolutely. That's the next step in your journey. We're going to give you a copy of Chris Hogan's book, Retire Inspired, and millionaire status is coming next. That's where you're going. You keep going. Thank you.

You keep going. You've got a bright, bright future, and so does Landon Rose. Very cool. Now, is she old enough? She practiced her debt-free scream? We've been screaming it the whole way here. Oh, so you think she'll join us? We'll see. We'll see. Let's get a camera shot. Yes. So she's three. Yes. Yeah, I got two three-year-olds at our place that are grandbabies, so yeah, it's hit or miss. Yeah, but I think she's ready. Landon, are you going to do that free scream with us?

Are you ready? Yeah. Okay, there we go. Alright, good. Alright, it's Shannon and Landon. This lady's changed her life, changed the life of her daughter. $36,000 paid off in 17 months, making $38,000 to $45,000. Count it down. Let's hear a debt-free scream. Ready?

Three, two, one. We're debt free! This is how it works. Cute. Cute little girl. Oh my gosh. That's how it works. Isn't it interesting?

The number of people who have that exact same experience, and it takes them a decade to recover. I mean, Shannon, though, I mean, she's a victor. She's not a victim. Bad stuff happened? Yeah. Bad stuff happened. Horrible things happened.

Things you never thought about when you were a little girl playing dress-up that you would ever go through that but you did now what well shannon says i'm going to take control i'm not going to let things happen to me i'm going to happen to things i'm going to lean in i'm going to clean up this mess and take control of my future this This divorce does not define me. It was just a change in direction. You see, folks, you cannot have, no one can steal your hope. You have to surrender it. No one can take it from you.

You have to give it up voluntarily. So don't give it up. Grab a hold of hope listen to these debt free screams watch these debt free screams on youtube listen to the calls on the show grab a hold of hope and hold on with every ounce of energy you've got oh you can do this i know you can i've watched everyone just like you do it so now it's your turn this is the debt free scream place it's called turn. This is the debt, Psalm 118.8 It is better to take refuge in the Lord than to trust in man.

Stephen King said, Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work. That's true. You know, I used to think that people, you would hear somebody had this great idea. Man, I had this great idea, and they stole my idea. It's like, no, probably not. They probably didn't. I have people come up to us all the time like, we have this great idea and we need you to sign like a non-disclosure form

before we can tell you what the great idea is. And I'm like, no, I don't even want to know what your great idea is. Because ideas are everywhere. People that can make ideas come to life and take them to market, now that is rare. Ideas aren't rare. Ideas are everywhere. I mean, for God's sake, some guy figured out how to cut grass with fishing line.

I mean, really. Ideas are everywhere. Someone that can take them to market. Someone that can work and hustle and grind and work and hustle and grind and not be denied. Now, those are rare. You give me one of those, I'll sign something. I'll get that guy, that girl on board. Somebody knows how to leave the cave, kill something, and drag it home.

Now, that is valuable right there. But, I mean, ideas, I mean, keep in mind, grass is cut with fishing line. The ideas are everywhere. They're just everywhere. Wow. Think about it. I mean, geez. Demetrius is next in Raleigh, North Carolina.

Hi, Demetrius. How are you? I'm doing well right now. I'm not doing well, Dave. You were trying to be optimistic but not lie. What's going on, man? What's going on? So, look, in 2015, I bought my wife an SUV.

Three months in, it needed a $1,500 repair. Lord. And that continued on up until this point. So you've had a lot of repairs on this lemon. Yeah. Was it new? I was trying to get rid of it. I was trying to stay optimistic, and now the car is dead.

It needs a new engine, which would be the second new engine, by the way. Good gracious. What kind of car is this? It's a Volvo XC90, 08. So did you just get a bad one, or is that just a bad brand of car or something? Not brand, I mean, Volvo's a good car, but I mean, a bad model or something. Well, we initially thought it was a good car, too, because that's all we've heard until we got one. Okay.

And so now, she's taking her hands off it. She's like, you know, this is your problem. You need to figure out how to fix it. Oh, this is going way downhill right here yeah and i'm i'm stumped man i i'm okay i'm so what do you what do you owe on this piece of crap uh almost seven grand like 6800 still okay and uh Okay, and how many miles it got on it? Like a hundred and... With the new engine... No, I mean how many miles? I didn't ask about the engine.

I asked about the car. How many miles does the car got on it? Let's say 150,000. But you put a brand new engine in it how long ago? No, it wasn't brand-new. It was used. Oh, you bought a junkyard engine. Yes.

Okay, and what did that cost you? About $1,300. Okay, so you get to do it again, right? Yeah. And then you sell it, right? Well, do I do it again well you what you do is you do you what's the car worth today if it was running if the engine was the last uh value i got on it was from my bank and it was about five grand okay jump on uh kelly blue book and look at kbb.com for private sale and pretend like the engine was fine,

but with the bazillion miles you have on it and put in all the information. And let's say it comes back $5,000. That's what the car is worth, okay? Running. Right. Running. If the engine can be put in for $1,300 more, then take $5,000 in your mind minus $1,300

and say that's the least I could sell the car for salvage and come out otherwise I got to fix it and sell it fixed and so I'm thinking salvage without the engine fixed that this car is probably a $2,000 car with the engine in it it's probably a $5,000 car so it's probably worth the 1,300 to get it up to five5,000. You see what I'm saying? Yeah. Because if you could get two for it, you're going to lose $3,000. If you get $5,000 for it after you put a $1,300 engine in it, now you've only lost a few thousand, okay, and that gets rid of it. It's difficult to sell a salvaged car for much money with a bad engine in it. What's wrong with the engine?

Completely blow? Drop a rod and everything? Well, according to it, and it blew when my children were in it on a trip on a five-hour trip so me and my wife had to go and pick it up on the side of the road so when we took it to the shop they said it's it's low compression in three cylinders which basically they said uh it's blown they yeah they they figured that the contributing factor was the person that had the engine uh did not do the oil maintenance they didn't keep up on the oil maintenance yeah maybe so now uh now the engine itself is about

for the engine and labor yeah you got low compression i haven't worked i hadn turned a wrench in years, but low compression on three cylinders tells me it's blown. I disagree. I mean, I agree with everything. I'm not a mechanic, but I think they probably called that one right. So, yeah, you're buying a $1,300 engine, and you're going to put it in this stupid car, and then you're going to wave bye-bye as it drives off down the street with its new owner, and you're still not going to get much for it because it's still a worn-out car. It's got almost 200,000 miles on it, and it's on its second engine, third engine.

Yeah, third engine. So what do I do with the negative equity that I now have in the vehicle? Because I'm not going to get that. I mean, I'm not going to get that. You have to have the money to cover that. Do you have any cash? No. Okay. Do you have any cash? No. Okay.

Do you have any credit where you go borrow that? Well, right now I was thinking of purchasing another vehicle, and I got approved for a $12,000 loan which I can purchase another vehicle for. You don't need another $12,000 loan. You need a lot less than that. We need a $2,000 loan to cover the negative equity, and we need a $2,000 loan to buy a car until you get yourself out of debt. A get-out-of-debt car.

Not one you keep very long, but we need to get you out of debt. You don't want to go $12,000 in debt for a $1,300 problem. That's overreacting. Well, yeah, I'm kind of known for that. Well, I mean, when Mama does her hands like that and goes, it's on you, and she starts doing those hands like that, we all tend to do that, so I got you. But she's going to have to be a grown-up, too,

and she has, she can't, because what we want to do is we just want to get pissed off and go buy something, and then we look back later and go, that's when I made the dumbest decision of my life, when I got pissed off and bought something. And you get frustrated with the whole stupid thing, and you just want to shoot the car with a gun, call the cops and tell them somebody did that. You know what I mean? It's just blow it up or something, right? But you get there. I understand.

But you can't do that. You just got to, we got to do it, we got to handle it grown-up style. Fix it, sell it, cover the negative equity, get you a cheap car, get the cheap car paid off, save up, move up in car with cash. Okay. Three-step program. You got it, man. You can do it. It's just a pain in the butt.

I understand. I get it. But one of my things was I decided I was going to drive junk long enough that I saved so dadgum much money that I never had to drive junk again. So I don't drive junk now because I'm not broke anymore. When I was broke, I drove crappiest old cars because I didn't want to ever drive a crappy car again. See, when you're broke, you drive a car that you have to give a name like Bessie or Henry

or old blue. That's what you do when you're broke. So you never have to again. And those aren't the good old days. Those old days suck. Those aren't the good old days. You'll look back on those and go, Thank God we don't live like that anymore.

You know? Those aren't the good old days. The good old days include outdoor plumbing, okay? We don't want the good old days. The good old days, we didn't have penicillin. We don't want the good old days. The good old days, we didn't have penicillin. We don't want the good old days. I don't want them. I don't want to drive crap ever again. I don't want to live in a house where

things break all the time again. I want to have new enough stuff that it's not breaking all the time and the way I get there is I live like no one else so that later I can live and give like no one else. You pay a price to win. The Bible says no discipline seems pleasant at the time, but it yields a harvest of righteousness.

It's no fun to get there, but it's worth it because you get there. That puts us out of the Dave Ramsey Show in the books. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey. We'll be back before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

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 National and tell Dave your story.