The Ramsey Show - App - What To Do If You're Not Eligible for Life Insurance (Hour 1)

Episode Date: June 11, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of BMW as the status symbol of choice. I am Dave Ramsey, your host. It's a free call anywhere in North America, and some say the advice is worth exactly what you pay for it. The phone number is 888-825-5225. That's 888-825-5225.

Phil is with us in Pensacola. Hi, Phil. Welcome to the Dave Ramsey Show. Hey, Dave. How are you? Better than I deserve. What's up? Well, I have a question.

I did about the most normal thing anybody would do, and bought a used car when I wasn't, and put myself further into debt. And my question is, I have this new car payment now. I have $10,900 for the car at 10%. I also have student loans of $10,800. And I'm about to start a doctorate program that the university that I work for is going to be paying for. And so my question is, should I defer my student loans to be able to go 100% into the car so I can just wipe that out? I feel sick every time I get into the, get into the car.

What were you driving? What were you driving before? Um, it was an old, it was a 2005 Nissan Altima, um, that if I would have put money into it, um, I wish I could go back and just spend $3,000 to fix it up instead of getting a used truck. Okay. Or sold it and put $3,000 to fix it up instead of getting a used truck. Okay, or sold it and put $3,000 with it and paid cash. Yeah.

Yeah. Either one would be fine. So are you married? No, I'm engaged. Okay, when will you be married? December 2019. 18 months, Okay, cool. And obviously the university you work for, you're working your Ph.D., so I assume that there's no tuition charge.

Yeah, correct. And there's no cost associated to this. And what is your income? $48,000. Oh, that's good. Okay. And what is her income? Hers is, I think, $33,000. Oh, that's good. Okay. And what is her income? Hers is, I think, $33,000.

Okay. She also works for the university. Okay. All right. Good. Cool. All right. Well, it doesn't matter mathematically.

What gets you out of debt the fastest and keeps you on bead and focused is what's going to be most important in my mind. Because the math is going to work like this. If you defer the student loan, the interest accrues. Okay? Mm-hmm. And so whatever you would have paid, let's say you only paid the interest payment, as an example, on the student loan,

which is probably about what the payment is, actually. I mean, you're not paying a lot. It's about, yeah, I mean, the interest. So every month, my minimum is $500. Oh, okay. Well, it wouldn't be then. So my idea is if I'm not paying that extra $500 on the student loan, I can just put that towards the car, get the car done. I guess here's my point. hundred dollars on the student loan i can just put that towards the car get the car done i guess

here's my point mathematically it doesn't matter because it's much like you're borrowing on your student loan by not paying it in order to pay in order to pay the car off faster so it's a flip of the coin and the interest rate on the car is at 10 and the interest rate on the student loans below 10 so i'm going to pay extra on the car first and if you want to defer the student loan is below 10%. So I'm going to pay extra on the car first. And if you want to defer the student loan, that's fine. You will get out of debt about the same time. Okay. Yeah.

I think the car just, I wish I wouldn't have done it. And so now I can't really take it back and get what I paid for it. So I'm just trying to, it's an older truck now. Yeah, but that doesn't, none of that really matters. All that matters is that you have $22,000 worth of debt, you make $48,000. By the time you pay off $22,000 worth of debt, one way or the other way is going to be the exact same number of months. Okay.

Exact same number. Yeah. The only difference is you're going to feel a little bit less guilty for the stupid truck purchase because you're getting rid of it off the plate. That's okay. That's okay. If you want to do that, that's fine. But then don't let that give you permission to stay in debt.

And, oh, I'll just wait on the student loans now until I finish my Ph.D. No, no, no, no, no, no, no. You play on through on them. As soon as the truck is gone, they're next up. And as soon as you're married, it's everybody on board. Has she got debt? No, she doesn't have any debt, and she's she's on board okay and she's with your plan and so then we don't have a 48 000 income then we have a 60 i'm sorry a 81 000 income yeah or whatever it is to work out from and and we're going to attack whatever balance there is there

shouldn't be a balance of much by then but but whatever balance is left on the student loans, we go ahead and knock it out. We're not going to keep Sally Mae around as a pet just because we hit her under the rug, which is what you're doing with deferment. You're emotionally hiding her under the rug so you can kill this thing in front of you that's bothering you, but then you can't. I want her just as big a priority and and mess with just as hard as we go along so there you go man hey thanks for the call open up open phones at 888-825-5225 nate is with us in portland oregon hi nate how are you hey dave i'm doing well thanks for taking

my call sure man what's up well uh first of all it's an honor to be talking to you i kind of feel like you're my uh financial grandpa so uh thanks thanks grant anytime son what's up well i i have an insurance question okay it's kind of an unfortunate one so i'm married my wife and i have a baby girl girl. And I didn't have a life insurance policy in place until I started looking once we had our daughter. And in the process of getting life insurance, term life insurance, I actually had the medical appointment set up for them to come do the blood work and all that. Found out I had testicular cancer. And so went through the treatments for cancer, and I'm officially in remission.

And so life's good. God's good. We're doing great. That's awesome. Unfortunately, you know, with a cancer diagnosis, term life insurance companies won't touch you. Life insurance companies won't touch you. Life insurance companies won't touch. Sorry. Sorry. Yeah. Life insurance in general, which I would only get term of course. And so, right. Um, so yeah, I'm,

you know, for at least I'm here in two to three years, sometimes five. Um, I'm not going to be able to qualify. Is there something else? I have a small policy with my job. It's double my salary. So basically two years of salary my wife would get if I were to pass. Yeah, what you're looking for are things that are called guaranteed issue, meaning they don't check the medical, and they usually run 10 to 20 times more per $1,000 of one where you do qualify medically. Oh, perfect.

Yeah, so you're not going to get a lot. You're not going to get the proper amount during this time. But the one at work, if they offer the ability to double it without a medical, buy it. I don't care what it costs. Buy it. I mean, I care what they're raising. I've got that plan, and, yeah, it's in place no matter what. Okay, but, I mean, can you buy more?

Oh, you know, I haven't looked into that. Sometimes they give you a double up option and you pay for the double up. Or something along those lines. I would pick that up. You have a mortgage? Yeah, I do. Okay, call the mortgage company and buy mortgage life insurance. Okay, that

was going to be my next question. Yes, it's gimmick insurance. It's not good insurance. I wouldn't recommend it to anybody else, but it's without a medical. Now, when you get clear of this and you get the three- or five-year mark or whatever, talk to Zander Insurance, and they'll let you know when you're eligible. Then you drop all this other garbage because it's too expensive. But anything like that, you can pick up $10,000 for $20 or something on your checking account. Pick it up.

Pick up those little odds and ends, and let's pile them up so you've got as much coverage as you can get within reason. There are few things in this world that irritate me more than when people pay too much for their mortgage. So many of you are paying way too much, and you don't even know it. I've got my good friend Mike Hardwick with Churchill Mortgage here. Mike, how do you help these folks? It's unbelievable, Dave, how much

people can save if they just make a simple call. We've helped thousands of your listeners save hundreds each month or take years off their loan, helping them to save thousands of dollars in interest over time. Folks, do yourself a favor.

Make a quick call to Churchill Mortgage today. I'm telling you, if you're paying a mortgage, you're potentially throwing money away that could be piling up in your savings account. It's true, Dave. With the rates the way they are right now, if you're making any mortgage payment these days, you're probably paying too much. Call Churchill Mortgage, guys. It's well worth a few minutes of your time.

This is a paid advertisement. NMLS ID 1591, Equal Housing Lender 761, Old Hickory Boulevard, Brentwood, Tennessee 37027. Jim is with us in Grand Rapids, Michigan. Welcome to the Dave Ramsey Show, Jim. Thanks, Dave. Thanks for having me. Certainly. How can I help? I have a situation, which is actually a pretty good situation, but I need some direction on it. Okay. I am currently 51 years old. My wife's 50.

We are completely out of debt, including our house. And we're looking to find a place to put the proceeds of an employee stock purchase plan that I had. I had about 12% of my net worth into it. And listening to your plan, listening to you, I finally decided I had to get out of it. So I cashed out about 60% of it. And now I have a large chunk that I don't know what to do with. Okay. So I cashed out about 60% of it. Mm-hmm. And now I have a large chunk that I don't know what to do with. Okay.

So, I mean, what do I do with it? I'm sitting in a savings account right now. Okay. Cool. Well, the only thing I invest in are two things. I buy real estate that I pay cash for. Mm-hmm. And I buy good growth stock mutual funds.

Okay. And that's all I do. I'm real boring. Well, I guess, and I've heard that a lot, but here's my question for you. I'm not sure how long-term I'm going to have this. We've kind of earmarked that money for something. For what? We could use it if we find the right real estate that we want to buy,

or if we find a toy we want to buy, of course, it would be with cash. So it could be a short-term or it could be a long-term. Am I best to keep it in a checking account or just a savings account. So what is the mystery earmark thing? The toy? Yeah. What's the toy? Oh, you're going to shoot me for it. No, no. I'm thinking about buying an RV. Good for you. Okay. And so how much would you spend? Oh, we want to stay less than $100,000. Okay. But we're at $75,000.

And what's your net worth? About $1.9 million. Okay. You can afford to blow up $100,000. It's okay. And that's what you do when you buy an RV. You blow it up. It's okay. And that's my problem.

I don't want to blow up. That's a lot of money. Well, you're going to blow it up. I mean, either rent it or buy it. If you buy it, you blow it up because it's going to go down in value like a rock. It's a very large car. I mean, that's all it is. So it's okay, though.

I mean, it's less than one-tenth of your income. One-twentieth. It's five percent of your net worth. So what? That's why you work, man. Congratulations. You've done great. So how much is in this savings account that came off of the stock? Just over $110,000. Okay, so it's earmarked for an RV. When are you going to

buy the RV? I don't know. It's one of those things I've got to talk myself into writing that big check. I'm not fr frugal but that's a lot of money yeah well you got you got to 1.9 million by making wise decisions and careful decisions and so that's all you're being but you you also got there you live like no one else so that later you can live and give like no one else so i want you to enjoy it and if an rv is your idea of enjoying the money, buy you one. I would give you this suggestion. Rent a really nice one for the summer. Okay.

And I know that feels like you're throwing money down a rat hole, but that will help you make the decision. You'll be all in or you'll be going, no, we're really going to drive this thing four times a year, and we'd be better off to rent it. Gotcha. And you can make that decision because you can rent really nice ones for comparatively to $100,000, not a lot of money, right? So, you know, go spend some money and do that and just make sure the experience is what you want and then buy. So you're going to buy an RV in 12 months or less. And that's what we're thinking about. Or we're going to buy a bunch of land somewhere to build our retirement house.

See, it's one of those dual-purpose accounts. What do we want to do with it? Do we spend it on an asset or we spend it on something as you said it's going to blow up i don't care it's up to you it's a small enough percentage of the money that if you light it on fire it doesn't affect your plan right right that's why that's what you spend money on toys for gotcha you want to be able to light it if you drive the thing off a cliff it doesn't matter financially i mean by you wouldn't want to get hurt but you know i'm saying i mean if it does if it just if the thing goes so that's why you know i've got some toys like that that there's absolutely no financial justification for except they're a small enough

percentage of my net worth that they don't matter right and that's the only thing that's the only way you can do it in your mind it's you know it's kind of like i was laughing a buddy of mine buying a hundred and ten thousand dollar, and he was freaking out. And he's worth like $22 billion with a B. Wow. With a B. And I'm like, dude, that's like other people buying a biscuit. Yep.

Go buy you two of them. I mean, it's nothing. It's nothing. You drive through Chick-fil-A and get a biscuit. It's about the same thing for most people. So it's not quite that way here, but it's getting close. Anyway, all that to say, whatever gives you joy, spend some money on that. I don't care which one it is.

It doesn't always have to go up in value to give you joy. Gotcha. Sounds good. Can I ask one other quick question? Sure. You've always said on your shows that you have kind of a weakness for firearms, but you never really talked about your collection. What do you like?

Well, I have too many many according to my wife same here but um uh i'm prime i'm trying to think how to not get picketed um you guys shouldn't ask that question that's okay my i'll tell you my personal carry that i carry every day on my side except at this particular moment, is a Wilson Combat 1911.45. Nice. That's my choice. I like 1911s. I trained on them on handgun, and so I've got a bunch of 1911s that are both functional,

and I've got some that are collectible. And then I've got some of the evil stuff, too, that you're supposed to go to hell if you own or whatever, and we're all going to die if you're politically correct and all that kind of stuff, because Dave Ramsey has no need of having one of those, but he has one anyway. So there you go. Shoots very large caliber things, and they would come in the color of black. So that kind of stuff.

But anyway, it's just for fun. I'm a redneck, so that's all it is. I hear you. I hear you. Hey, man, thanks for the call. Thanks for your advice. Open phones at 888-825-52 phones at 888-825-5225. 888-825-5225.

Jordan is with us in Indianapolis. Hi, Jordan. How are you? Doing well, Dave. How are you doing today? Better than I deserve. What's up? Actually, over the last three years, I just recently started listening to your program.

I've been on this journey of paying off over $56,000 of debt, and I've achieved that over the last three years. Why did it go? And including that was like random credit card and student loan debt. So I'm complete debt-free except for a vehicle, which I only have about 11 grand left. You're on your way, man. I have a great job. And basically what I want to do is I'll have the car paid off in the next six months. But what I was going to ask you is I'm looking at maybe self-investing in terms of using like a TD Ameritrade account. But I was going to ask you, do you have any

preferences for pros and cons of using like a TD Ameritrade to buy mutual funds? Or do you prefer a true wealth advisor? And mind you, I do have a work 401K that I contribute 8% to, and I do have six months of a rainy day fund already stashed away. Okay. Our baby steps say that you should have neither of those because you should be debt-free before you start your baby step three, a fully funded emergency fund. And once that's done, you should be putting 15% of your income into retirement.

No, I do not do TD Ameritrade or anybody else that's like that on a single, on a self-managed account. All of the data tells me that even people like me that know a lot about it don't tend to keep up with the high-producing mutual funds. The track records on the mutual funds outproduce the individual investor with their fishing buddy and their golfing buddy giving them advice, and that's what – because everybody lies about fishing, golf, and their stock trades. And they only talk about the big one that got away. They never talk about all those times they lost money on that.

And so I just don't do that. I found out what works, and what works is a high-quality wealth advisor that teaches me. Now, I know a ton about it already, but they're not advising me blind, and they're not advising you blind, and they're going in with the heart of a teacher. And so what I would tell you to do is not to do any of that right now unless you've got some rollover money or something like that. I want you to put in 15% in 401Ks and Roth IRAs, simple things, good growth stock mutual funds after your emergency fund is done, after that stupid car's paid off.

And then above that, I want you to fund kids' college, which is baby step five, and get your house paid off, which is baby step six. When you're there is when you start doing additional investing in baby step seven. You max out all retirement plans, anything available to you, and you start doing some additional investing in mutual funds and or pay cash for some real estate or something like that. And that's where you would really lean in with an advisor at that point. So, hey, good question.

Thank you for joining us. Open phones at 888-825-5225. Robin is on Twitter. Dave, what are some ways a college student can establish credit without getting a credit card? Why are we establishing credit? Why do you want credit? So you can borrow money? So let me get this straight.

You're going to borrow money so that you have a better opportunity to borrow money. That helps your credit. So you'll have a better opportunity to borrow money. Which will help your credit. So you'll have a better opportunity to borrow money. That helps your credit, so you'll have a better opportunity to borrow money, which will help your credit, so you'll have a better opportunity to borrow money. You can't rent an apartment without a credit score. I know that with some apartments. That's true. I don't have a credit score. I could go across the street over here to one of these corporate-run apartments.

They couldn't lease me an apartment because I don't have a credit score. I'm a multimillionaire. I can write a check and buy the freaking place, but I can't rent an apartment there. That's how stupid this credit score game is. It's stupid to worship at the altar of the great FICO. Here's my advice. Build wealth, don't build credit. When you build credit, you build wealth for the bank.

You pay them payments. When you build wealth for you, you don't worry about borrowing money. are high health care costs getting you down are you confused trying to navigate your options do you wish you could find an affordable biblical solution to your health care costs based on new testament principles christian health Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years.

And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. In the lobby of Ramsey Solutions, Brian and Amy are with us. Hey, guys, how are you? Hey, Dave, how are you? We're awesome.

Welcome, welcome. Where do you guys live? Los Angeles, California. Cool. Welcome to Nashville. And all the way across the United States to do a debt-free screen. Yes. That's right.

Love it. How much have you paid off? $550,000 in six and a half years. I love it. Good for you guys. Well done. And your range of income during that six and a half years? About $200,000 to $400,000.

$200,000 to $400,000. Okay. What do you guys do for a living? We're both physicians. I'm a family physician. And I'm an ER doc. Okay. I was going to guess that that was a family physician. And I'm an ER doctor. Okay. I was going to guess that that was a house debt, but that sounds like medical school.

That's all. That is medical school. That's all medical school. So six and a half years to clean it up. Wow. Look at you. Amazing. Well, you did it in record time.

You really focused. Most people take three times as much time. You know, we really hit it the last two years when we became financial peace coordinators as well. That caused us to really focus and do things the right way. Cool. And how much of the $550 happened in the last two years? About $150 of it. Okay.

Wow. So you did put this accelerator down. Yeah. All right. Absolutely. And backed off on some lifestyle things and some other stuff, I guess. So we started off and we weren't quite doing the plan. I knew about you, but we were kind of doing our own thing and we were still investing.

And then when we said we were going to be financial peace coordinators, we said, we're going to start doing this the right way. And once we did that, then everything started happening. And we started making big, hairy debt payments. And that really knocked it out. There's nothing to make you do something like teaching it. Oh, amen. I mean, because you know you're a hypocrite if you don't.

You got to be doing the plan. You can't be ish in it. For sure. That's what we said to each other before we did it. So love it. Amen. I mean, because you know you're a hypocrite if you don't. You got to be doing the plan. You can't be ish in it. For sure. That's what we said to each other before we did it. So love it. And you've been doing

financial peace classes for two years. We have. And we're leading our third class coming up this fall at the West Valley YMCA. Awesome.

Well, thank you for doing that. Absolutely. That's a blast. Very, very cool. Okay. So you're unbelievably successful. $550,000 paid off.

When someone asks in one of your classes, how do you get out of debt, what do you tell them the key things they have to do is? I think trust, for sure. I mean, trust in the Lord, amen, first and foremost in ourselves and each other. And then we have a saying in our house because we're big 76ers fans, trust the process. It's all about the process. And for me in the emergency medicine setting, we do ABCs, airway, breathing, circulation. It's that stepwise process. And we don't move on to B until you take care of A. The same way for your plan, it was step one through step seven,

and you don't take care of step two until you do step one. And so it was really that algorithm and that plan that gave us the piece of saying, hey, we can do this and we can move on from one, two to three and now four through seven. Very interesting. So what kind of medicine do you practice each of you? Primary care family medicine is easy. Yeah, I'm just an ER doctor. Just an ER doctor.

Yeah, never a dull moment. That's right. Wow. And just a primary care. That's a big one too. Yeah. Wow. Very cool. Just an ER doctor. Yeah, never a dull moment. That's right. Wow. And just a primary care. That's a big one, too. Yeah, wow. Very cool. Good for you guys.

Very, very well done. What was the hardest part of this? I think the hardest part was not getting that docitis that you talk about. When we came out of medical school and residency, it was we want to buy a house. You want to get into a car. You see everybody else doing it. And I had people that I was working with saying, buy the biggest house you can and take that mortgage deduction and lease your car. Why would you buy your car? And I always thought, that doesn't really sound

right. We should be doing things the right way. We should be paying for things and getting out of debt. And most of our docs, unfortunately, don't do that. And so the young docs that are out there listening, we encourage them. We say, listen, you can do this too. You're going to come out with a lot of student loans potentially, but you've got to live like a resident and knock these out. Big, hairy debt payments are the only way to pay off that big, hairy debt, and you've got to get rid of it. I love it.

Very well done. Cool. That's the fight, is when you're making this kind of coin, and you guys are making some coin, I mean, you live in an expensive area, but you're still making a lot of money. Yeah. And it's really, really hard to just stop and say, I'm going to act like I'm broke. That's right. And I'm going to pay this off.

I'm going to live like no one else so later I can live and give like no one else. That is a very emotional thing to do. It is, and it's a big contributor to physician burnout, too. I think, you know, a lot of our colleagues in all phases of their life are facing burnout. And getting control of your finances and practicing contentment, learning how to love your career again without that burden of debt has been such a blessing to us. So I think that's why we feel like we have a calling to teach,

not only to our community, but especially to our colleagues, our MPs, our PAs, MDs, DOs. You're in the healthcare field. You have a calling to help others, and you've got to take care field, you have a calling to help others, and you've got to take care of your four walls first so that you can go out there and do the right work for those around you. That's very interesting. I've talked to so many physicians, and they never phrased it quite that way.

That's a beautiful way to look at it, that the burnout comes from the sense of, I'm supposed to be doing what I love, but I get so wrapped up in practice management to milk every dime out to try to pay all these people chasing me. I've got all these dogs chasing me, but at my heels all the time. And it starts with Sally Mae, but sometimes they buy into a practice and I've got another three or four hundred thousand there. And dentists are doing the same thing. They're setting up a practice and look up there's eight hundred, nine hundred thousand

bucks in debt. And all of a sudden they don't enjoy dentistry anymore. Absolutely. hundred thousand bucks in debt and all of a sudden they don't enjoy dentistry anymore absolutely and this five hundred and fifty thousand dollars could have easily turned into a million if we had just ignored it and we see a lot of people doing that and we think we just you know taking that road less traveled than just and just being intense intense about it and intentional it's really made the difference so very well done very well done how does it feel to be free oh it feels amazing the last few months we were doing our budget was totally different than the last six Well done. Very well done. How does it feel to be free? It feels amazing. The last few months we were doing our budget was totally different than the last six years.

It's felt a lot nicer. Yeah. You lost 550 pounds. That weight is gone. That weight is lifted off your shoulders. It's amazing, yeah. It would be like something on a TV show if it was pounds. Yeah. I mean, it'd be wild.

And we've been able to do so much more for our family and our community as far as giving and just feeling that emotional impact has been incredible. And so I think that's worth all the no eating out and the budget clothing, the budget and everything else in the past six and a half years. And the other broke docs making fun of you. Yeah, that's all good. That's all good. Putting aluminum foil on your hubcaps because you didn't have it. Did you really? My first year out, I was driving a Toyota Yaris. It had a few hubcaps missing.

And so I came out. My nurse said, come out. We fixed your car. And they had aluminum foil hubcaps on it. That's fabulous. I need to start selling those. It worked. That is great.

And you brought the kiddos to do a debt-free screen with you. So what are their names and ages? We got Sienna over here. Sienna's eight. She was about, she's the only one we had in residency so she's about 18 months when we started this journey. Madeline is five and then Luke is four. Alright, very cool.

Brian and Amy, Sienna, Madeline, and Luke, we got a copy of Chris Hogan's retire-inspired book for you. That is definitely the next chapter in your story, to be millionaires. That'll happen very quickly now. And outrageously generous as you go along, which, as you said, you got margin to do that now. So very, very well done.

All right, guys. Count it down. Let's hear a debt-free scream. $550,000 paid off in six and a half years, making $200,000 to $400,000. A couple of docs cleared up the massive student loan debt. Let's hear it. Ready? Three, two, one.

We're debt-free! Love it! Well done, well done, well done. Oh, that is awesomeness right there. Man, that's fabulous. Dana is with us in Charleston, South Carolina. Hi, Dana, how are you? Hi, Dave, I'm good, how are you?

Better than I deserve. What's up? So, I'm 26 years old. My husband is 27 years old. We got married about almost five years ago. We messed up a lot when we first got married financially because we didn't hear a lot about credit growing up and things like that. And we fell for Chapter 13 a year ago. And now our life is crazy.

Our life seems ruined while we're in Chapter 13. But we want to know while we're in Chapter 13, we just heard about you. We're just learning about credit and all this good stuff that you're teaching. But we just want to know, what's your advice? Where should we start? Okay. Is there any debts that are not in the 13? Yes, sir.

I had wrote it down. We have a grand total of $3,742. On what? That is we owe an old apartment complex a utility, and we have furniture. And you did not put that in the Chapter 13? Yes, sir. No, sir, we did not because we actually just recently bought that. And these are recent debts.

Oh, okay, since going into the recent debts. Oh, okay. Since going into the 13th. Correct. Okay. So when are you going to learn your lesson in quick borrowing money? Oh, since we've heard of you, we're done. We are in balance. All right.

All right. I'll tell you what. You hold on, and when we come back after this break, you and I will walk through this together, and I'll give you some ideas on getting out of this 13 early because you're young and stuck in a mess we'll try to help you hang with me through the break this is the dave ramsey show For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry, and I learned that you can't sell them, and you can't even give them away.

And then we talked about timeshare exit team's process. Every ownership situation is different, which is why they have more solutions than any other company. And that's when they earned my respect. Don't call any of the imposters out there, and there's a lot. The only timeshare exit company I stand behind is Timeshare Exit Team. They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee.

They will get you out or they'll give you a full refund. Call 844-999-EXIT online at timeshareexitteam.com. All right, we're talking with Dana in Charleston, South Carolina, 26 years old, been married five years, and they're in a Chapter 13 bankruptcy for the last year. They've got $3,700 worth of debt that is not in the bankruptcy. And 26 to 27 years old. Is that a fair summary of what you told me so far? So far, so good, yes. Okay, cool.

What's your household income? Right now, I make $36,000. My husband just started a job today, and he'll be bringing in $44,000 minimum. Wonderful. And how much debt is in the Chapter 13 bankruptcy? It's about $30,000. Great. And what's that on?

That consists of medical bills. We have two vehicles and some other miscellaneous stuff we did. How much of the $30,000 is vehicles? So he recently got in a car accident, so now that's $3,000, and then my vehicle is about $18,000. So I would say roughly $21,000. Gotcha. Okay, so he has a $3,000 car, you have an $18,000 car.

Uh-huh. His is gone. We just had that leftover from the car accident because it was totaled. Gotcha. So it brought it down. Okay. All right. And it paid it off, and that brought the Chapter 13 down.

Yes, sir. So what's he driving? We share a vehicle right now. Okay. All right. Okay. Let's step back then. When I was 28 years old, we filed a multi-million dollar chapter seven bankruptcy so

sharon and i went through the same kind of stuff you guys are going through but with zeros on the end of our stupidity so we were we were even dumber than you all all right you've done some dumb stuff but we we were even dumber so i know how it feels to be scared and i know how it feels to wish I hadn't done that, and all that kind of stuff, okay? So one of the things that we discovered when we started studying wealthy people after that and started studying what the Bible says about money after that was we discovered that the shortest path to wealth is zero debt.

Okay. Because if you don't have any payments and you make your income, think about it. What if you had no payments at all and you both had those jobs? Think about how much money you would have every month. See how you could use that to start funding your retirement. You could use that to save up and pay cash for things so you didn't have any more debt. You could use it to build an emergency fund so you had a rainy day fund in case one of you lost a job, which might have happened recently, it sounds like.

And so, I mean, if you had no payments and $15,000 in the bank and were making $70,000 or $80,000 a year, you'd be in pretty good shape. Yes, yes. And that's where we want you to get to, and that's our goal. Okay, so if that is your goal, I can help you get there. I can show you what to do. Okay? Now, the first thing we're going to do is get on a detailed written budget

where every dollar has an assignment. You have a fixed amount going to the Chapter 13. Let's leave that alone for today. And then the first thing we're going to do is clean up the non-Chapter 13, which is the $3,700. Yes. Okay? Okay.

Then the second thing we're going to do, and that's going to happen real fast. You're going to knock that out in just a matter of a700. Yes. Okay. Okay. Then the second thing we're going to, and that's going to happen real fast. You're going to knock that out in just a matter of a couple of months. Okay. Because you're going to be on beans and rice, rice and beans. You don't need to see the inside of a restaurant unless you're working there in your extra job. And I just, because of you, hopefully, well, my husband's not mad so far. I just got a second job, too. Good.

Your husband's not mad so far. What's that mean no i'm saying so far he's not he's not mad but we don't get to spend any time um together because i'm working the second job and he's got to work overtime well he won't be mad if we're doing stuff to work together to create a goal that we want to hit because i want you guys out of that chapter 13 within about 12 or 14 months with the number you're giving me. Okay, yes. And have no payments in the world at that point, okay?

So here's the second thing you do. Number one, you pay off the $3,700. Number two, when you talk about selling your car and getting a very, very cheap car, because that's more than half of your Chapter 13. It's 18 of the $30,000. And in order to do that, as you've already found found out you have to talk to the chapter 13 trustee you had to do that with the totaling of the car and so forth before so the good news is the chapter 13 trustees are the most uh responsive and most intelligent people in the entire bankruptcy system, not the attorneys, not the judges, not the Chapter 7 people that tell everybody to file,

but the Chapter 13 trustees. We've worked with them for years. Okay? Okay. And if you call the Chapter 13 trustees office where your check goes to and ask to speak to someone, a coach, and ask to find out what you can do, there's two things you need to learn about when you're doing that while you're paying off the $3,700.

The first thing you need to learn about is how to get your car sold and what is legal and proper to do that, to get you out. This is after the $3,700 is gone, and you save up a little money to pay cash for you to get you a little $3,000, $4,000 car. Let's get him a little $3,000, $4,000 car. Let's get him a little $3,000, $4,000 car. Let's have two $3,000 paid-for cars. Okay. Okay?

And then get rid of that $18,000, and that gets us down to $12,000 in the Chapter 13. Second thing you need to ask the trustee is how to pay extra on your bankruptcy without messing it up. Okay. And they'll work with you on how to do that. You can't just randomly start sending checks. You have to do it through the trustee's office, get permission. In some cases, they'll want to file a motion with the court

to change your plan or whatever. But I want that other $12,000 to just be gone and lickety-split since we get your car sold. Okay. So three things. Pay the $3,700 off, call the trustee's office to find out the other two things and that's how to sell your car and how to pay extra and you're on a written budget are you willing to do all of that absolutely will your husband be yes he will okay if he is then i'm

going to help you i want you to go through our one-year membership, Financial Peace University. It includes nine lessons over nine weeks, and you join a local group. I'm going to pay for all of it because I've been right where you are, and I want to give it to you. I want you to give it to somebody else as a gift someday when you're rich. Yes, yes, absolutely. Thank you so much, Dave. Okay, you hold on. I'm going to pick up, and Kelly will pick up

and get you signed up for Financial Peace University. Folks, if you hadn't heard the changes about Financial Peace University, it just used to be a nine-week class for all these years. And now it is nine lessons, the same nine lessons, taught in a local group, typically your local church. There's about 10,000 or 12,000 of those classes operating at any given moment and joining those groups operating. You can go take the nine lessons there.

And you have a one-year membership. All nine lessons, audio, video, everything are online as well. So you can review in the car. You can listen to it on a trip. You can do all that kind of stuff. It's also got the follow-up class to Financial Peace University online, the Legacy Journey, which is how you handle wealth. Once you start getting out of how to handle money,

then you have to figure out how to handle wealth, because if you do the stuff I teach you, you're going to become a millionaire. And then how are you going to handle that wealth? How are you going to make decisions when you're wealthy? Because it's different. It's different when you're worth a couple million dollars than when you're broke. Your emotions are different. Your spiritual challenges are different. Other people coming at you are different people judging you are different

you know when you're broke people shame you for being broke when you're rich people shame you for being rich because everybody's got an opinion about everybody else in this country today it's gotten completely out of hand everybody's got something to say it's like trolling is a dadgum hobby for some of you idiots. And so, you know, that's what you got to get your arms around. That's what you got to think about. So anyway, the legacy journey is there for a year, along with Financial Peace University is there for a year, and the EveryDollar Plus, which connects you to your bank and downloads all your transactions automatically into your phone or whatever,

and you and your spouse are on the same page for those of you that are married. This is like $500 worth of materials the way we used to sell it, and now it's only $129. I mean, if you put every dollar plus, Financial Peace University, Legacy Journey, and online availability for a year, that's easily over $500 worth of stuff. We've changed the bundling, and it's a lot better deal to you. And it's a better deal for us because we're going to get to continue to work with you through the years, not just one time for nine weeks. You're going to be there, and we're going to put other stuff involved in your membership.

So you're going to continue to learn. We're going to walk with you and teach you how to do this. So I want you to get your head wrapped around that. Some of you that have been through Financial Peace University and never been through Legacy Journey, you probably ought to join Financial Peace University again because it now includes the Legacy Journey. And soon it's going to include Smart Money, Smart Kids. Not yet, but the lessons for Smart Money, Smart Kids, how to teach your kids how to

handle money with Rachel Cruz. I taught a couple of the lessons with her, but she taught most of them. That whole curriculum is going to be included soon. So definitely within a year. So if you join now, you'll be able to get that included too. And that's another hundred and something dollars. So, I mean, it's a deal. It's a serious, serious deal.

So when I give this to all these people, it gives them full access to what they need. So, hey, thank you for listening. We appreciate you hanging out with us. That puts us out of the Dave Ramsey Show and the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host, and we'll be back. Hey, guys, this is James Childs, producer of the Dave Ramsey Show.

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