The Ramsey Show - App - What's Eating Up Your Budget? (Hour 1)
Episode Date: March 9, 2021Debt, Relationships, Insurance, Retirement, Investing Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/31ricKt Tools to get you started: Debt Calculator: https://bit.ly/2QIoSPV In...surance Coverage Checkup: https://bit.ly/2BrqEuo Complete Guide to Budgeting: https://bit.ly/2QEyonc Check out more Ramsey Network podcasts: https://bit.ly/2JgzaQR
Transcript
Discussion (0)
Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios,
it's The Ramsey Show, where debt is dumb, cash is king,
and the paid off home mortgage has taken the place of the BMW as the status symbol of choice.
I'm Dave Ramsey, your host, Anthony O'Neill.
Ramsey personality, number one best-selling author of the book Debt-Free Degree, is my co-host today.
Open phones as we talk to you about your life and your money.
Open phones at 888-825-5225.
That's 888-825-5225.
Victoria is in Louisville, Kentucky to start off today.
Hi, Victoria. How can we help?
Hi, guys. Thanks so we help? Hi, guys.
Thanks so much for taking my call.
I have just a really complicated situation.
I'm going to try to distill down to make the most of this call,
but potential separation coming up with my husband.
He's active duty military, and he makes a good living,
and I work part-time and homeschool.
And just facing just if we were to, you know, separate that, you know, we've been making great traction together.
And besides all the emotional stuff and everything, but I've got him on board with, you know, Dave Ramsey and Chris Hogan,
and we've been paying down almost $50,000 of debt in the past three years,
and basically I'll go down to just making probably bill money, you know,
and I'm just wondering how I can prepare for that.
And we talked about maybe staying together just for a financial thing,
but, like, not being, you know, he would be a geographical bachelor.
I wouldn't PCS with him anymore.
So just wondering what your advice might be on that.
Well, I'm sorry.
I'm sorry you guys are facing this.
I would, number one, if you're facing something this serious,
you need to get a pro in your corner.
And that means you guys need to be sitting down with a good,
strong marriage counselor who can coach you guys through how to make good, wise decisions.
I didn't hear anything just from a common sense perspective healthy about you guys staying married just for financial purposes.
That's weird.
Yeah, I thought so too so too yeah that just sounds weird
that's just a guy talking i'm not a professional but i mean it's just just sounds weird so um we
still love we love each other it's just he's um kind of like there's so many good things but um he's decided to um change genders so i would love to say you know hey
let's be friends for the rest of our lives that are married but that just seems weird right yeah
yeah yeah staying married in that situation is going to be very strange and so um you know i
think someone coaching you a good counselor can coach you through how to set some you know, I think someone coaching you, a good counselor can coach you through how to set some, you know, processes and boundaries in place to, you know, to create a timeline.
And then even though this sounds, yeah, you said all the emotions are there, but it also sounds like you guys are just talking about this all still in terms of you've got a good dialogue going, it sounds like.
So that's good.
Yeah.
But even in that good situation, as good a situation as it can be in a bad situation, you still, once you decide to divorce, the transaction changes to a business transaction.
Right.
And so, and it doesn't mean you have to be mean to someone because it's a business transaction,
but you have to be thorough and you have to think through the math.
Like, for instance, he has an income and you don't.
How much debt is left?
Whose name is on the debt?
Is there a house involved?
You know, all these kinds of things start to be a business transaction that have to be done on the very, very clear boundaries.
We see this a lot.
We really do.
And, Victoria, one thing I want to suggest, and by no way am I saying I'm a marriage therapist,
but at the same time, let's not prolong it.
You know, let's have a honest conversation.
Like Dave said, are we going to do this or are we not?
And once you decide what you're going to do, then you need to go down that path with the right counsel.
One thing I have seen is a lot of people prolong this situation out and then it gets worse and it gets worse down the road so have the conversation decide what you're going to do and once you get there immediately uh seek out wise counsel to walk you all through this step but
i gotta say awesome job with at least being um kind to each other in the midst of this process
yeah so in other words if if your name is on a debt and he is obligated to pay it in the divorce decree and does not they do not
come after him the divorce decree does not remove you from liability you're still liable for that
debt that's what i mean by a business transaction you've got to sit down and think about those
kinds of things so that these debts get anything's got your name on it gets cleared the second thing
you've got to do is you got got to get in Ken Coleman's materials
because you're going to have to develop a career track.
Part-time and stay-at-home mom is not in your future anymore.
You're now a single mom, divorced.
And so what are you going to do with your life?
And what's your career look like?
What's your job look like?
And you've got to get on that really fast because you're going to need an income.
Yes, you're going to get child support.
Yes, you may get some alimony.
Yes, he may pick up a lot of the bills, but you've still got to create a full-time income in this situation to exist.
And, Dave, correct me if I'm wrong, but now that child becomes her number one priority.
It's no longer him.
Sure.
Yeah.
No, I mean, that would be obvious.
But that is the way it has to go.
You know, it has to be that way.
So, hey, thank you for calling.
I'm sorry you guys are facing this.
Open phones at 888-825-5225.
One of the things that I see, Anthony, that divorce attorneys make a huge mistake on quite often is, or couples do, and the divorce attorneys allow it to happen,
just as a matter of transaction, is, you know, say a typical case study might be,
husband leaves the household, they get divorced, mom is left with the house,
and most of the time has a lesser income.
That's not a statement of that's what she deserves. It's a statement of fact.
Right.
Okay.
Most of the time she has a lesser income and can't afford the house payment.
Right.
But it's trying to hold on to the house to keep it stable for the kids.
And the house should have just been sold.
Yes.
And get the bill off of her.
She does not need that bill to go with her new level of responsibility financially that she's got to pick up now.
That's thing one.
Thing two is, from a husband's perspective, the lawyer tells him in that case, in the case where he's leaving the house to her, to quit claim the house over to her.
Give up his ownership.
And they never address the fact that he's still on the mortgage.
Right.
And so he's liable on the mortgage.
So he gave up the asset and kept the liability.
Yes.
And then he goes to buy another house someday.
And he can't.
And he can't because he already owns a house.
Yes.
As far as the debt goes.
Yeah.
He's already in debt on the other house.
He's not been released from liability.
So in that case, if I were going through that, I would require that the house either be sold or refinanced and gotten out of his name.
Yes.
In that case, to protect him and let him go on with his life.
And here's a hint.
If she can't afford to refinance it, that means she can't afford to keep it.
She needs to sell it.
That's right.
And that's what you're facing.
It's a harsh
thing that occurs in a horrible situation,
but there's a reality to this math
and it catches up with people sometimes three years
later, and they get a double whammy
from the divorce. In an uncertain world, being a good steward of your money is more important than ever.
While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs.
For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it.
Learn more by visiting chministries.org slash budget.
That's chministries.org.
Anthony O'Neill, Ramsey personality, is my co-host today.
Open phones here on the Ramsey Show at 888-825-5225.
Lindsay is in Fredericksburg, Virginia.
Hi, Lindsay, How are you?
Good. How are you?
Better than I deserve. What's up?
So my husband and I are on baby steps four, five, and six. And we are looking at selling our rental property.
We are currently using the income that we receive from that property to fund our retirement.
It is about $400 a month.
And then my husband puts in his company's 401k match. So my question is, we're looking at
between how much we still owe on the mortgage and the possible list price of the home we're
looking at, about $80,000. we need to know what to do with.
So since that house is funding our retirement, the debate is do we use it to,
do we put it in a savings account and then just pull out monthly what we need
to continue our 15% retirement, or do we, we just need to know what to do with it, I guess.
You should be able to do 15% of your income into retirement out of your budget.
So our monthly budget currently doesn't have enough room for the $400.
What's your household income?
About $67,000.
And how much are you putting into retirement?
Well, we put the $400 a month from the property.
And then my husband does his 401k match.
I forget exactly how much that is? Does your six to 7,000 include the money you're getting from your rental
properties or is that separate just from your job?
It does not serve just from jobs.
Okay.
So I think what Dave is asking,
are you doing 15% of the 67,000 without the rental property?
Yes.
So, so the 67,000 does not include our income from the rental now i got that got that
part yeah so are you putting are you investing 15 of your 67 000 yes okay all right because you
should be at about ten thousand dollars you should be about eight hundred and something dollars a
month going in and four hundred dollars a month coming out of your husband's check or whoever's check,
you should be able to do $800 a month on a $67,000 income without having to supplement it.
Okay.
Something's wrong with your budget.
Your budget's being eat up with something else.
Yeah, it is with our current mortgage.
How much is your mortgage with um so uh currently monthly we pay um 14 000 i think you're 1400 mortgage 1400 1400 yes 1,400, right? Yes. Sorry. 100. Sorry. And your take-home pay is 38.
Yeah, you have a high mortgage payment.
Your payment's...
We do, sir.
It's about 42%.
Yeah.
I recently...
When we got the mortgage, I was also working full-time.
I recently...
What's the interest rate on the mortgage? I was also working full-time. I recently resigned my job to stay home with our daughter.
What's our interest rate on our mortgage for the rental property or for our current property?
No, your current property.
Our current property, it's 44.25%.
Okay.
Here's our fix.
Okay.
Refinance the home and put the $80,000 into the refinance.
Okay.
And that will lower your payment and your interest rate both.
Okay.
Then you'll have room in your budget to save 15%.
I knew there was something wrong in your budget because I've done tens of thousands of budgets over 30 years,
and you can save 15% of your income if you don't have too big a house payment
and you're out of debt.
Right.
And, you know, at any income you can do that
if you don't have too much allocated to housing.
That's why it's a ratio.
That's why we don't have a set amount going into retirement.
We say 15%.
Yeah.
So, yeah, if you want to splurge, carve off a little of that
and, you know, hit a hit towards the kid's college
and babysit five as you drive by to six, that's fine.
But I think if you'll refinance your mortgage with $80,000 down and get you a cheaper interest rate,
and while you're at it to a 15-year, you're probably going to end up with a lower payment at that point.
And when you made the choice to come home and be with your baby, that's okay.
But you might have made the choice if you hadn't sold the rental to sell your home
because you got a home you couldn't afford at that point.
Yeah.
And so, but it looks like you can now that you've done all this.
And so it worked out.
I was going to say that.
It worked out fine.
Is that an option too, Dave?
Sell both and then go buy a property that, you know, that is below the 25% or right at at least the 25%.
Yeah.
Because if they can sell that current property and have $80,000 in on what their house is they got a hundred thousand dollars they could put towards a
a good home exactly and what what i would do before i tried that is let's try to get the 42
percent fixed yes because the problem with a payment that's 42 percent of your take-home pay
is what we just discovered right took us a little while to get there. But what we just discovered is that you don't have room because of your house to build wealth.
And you become house poor.
There you go.
Because you've got too much tied up in your monthly payment on your house.
So the fix for that is sell the house, number one, or do something that gets that payment down or gets your income up.
Yeah.
But if you're going to choose out there, it's okay to choose to quit your job
and come home and be with your baby.
Yeah.
I'm fully supportive of that decision.
But sometimes when you decide that,
unless his income is on an upward trajectory,
you're also saying we now have a house we can't afford.
Yeah, and I think, America,
I want y'all to hear this too,
and I really want y'all to don't miss this.
She was through baby steps one through three.
She already had, she was out of bed.
Doing good.
Doing great, but then still living in kind of stress because he wasn't being intentional
about making sure that they can get that 42% down to 25%.
So either his income goes up, or in this case, we found some money to get the mortgage down,
or the house has to go away.
Yes.
So, I mean, you don't have to do it if his income, you know, if two years from now his
income's going to double because he's on some kind of upward trajectory, you can hang on
and be okay.
But, you know, it's not a two-month thing.
It's not, nothing's on fire here.
But the point is, mathematically, you can't fund retirement adequately and other things.
You know, next time you get ready to buy a car, it's going to be a payment because you
haven't had the wiggle room in your budget to save up for a car.
And it gets you in trouble.
So, Lindsey, you guys are doing a really good job overall.
Just a couple of adjustments there.
And I'm really proud of you.
Good work.
Nick's with us in Jacksonville, Florida.
Hi, Nick.
How are you?
Hi, Dave.
Thanks for taking my call.
I'm very well.
Sure.
Good.
How can we help?
Well, let me give you a little info.
I am 35. I am divorced.
I just finished my associate's degree.
No alimony, no kids.
But I do have $33,000 in credit card debt, $32,000 in student loans.
I just started my first semester of my bachelor's degree.
I'm very excited about that.
And my goal is to finish my education without taking any more student loans.
That's good.
And so right now I make about $4,600 a month net, and my outgoing is $3,800.
And I've cut my expenses where I can.
I'm paying $500 a month on my credit cards.
Since I'm still in school, I don't have to pay student loans yet.
But I'm paying about $700 a month out of pocket for tuition.
And my car payment is $425 a month.
Now, I own $9,400 on my vehicle, and it has a trade-in value of about $7,400.
But I got an offer to trade it into the dealership at an unspecified above value.
I was looking at similar vehicles, and it looks like I could lease a similar vehicle for $200 a month.
I've got two years left on this six-year loan for my car.
Should I trade it in and lease a vehicle for two years so that I can put an extra $200
towards my debt? No, I'd stick with what you got. Yep. It's a real tough binge, but it's a short
pitch. And your worst case scenario is you got to pick up some extra work while you're in school,
which is going to be very strenuous. But if you could kick your income up $1,000 a month,
it changes all this equation. Yeah, yeah. And, Nick, you're doing a great job.
I love how you broke down your numbers.
You know exactly where you are.
That's a big deal.
That's huge, man.
So I agree with Dave.
Stick right there.
Get a little bit more income.
You're going to be all right, bro, in two years.
Yeah, this is tight.
You know where you are, and you know what you've got to do.
And so you're looking at options.
But now, here's the thing.
The right financial decision almost always is harder in the short term and better in the long term.
The wrong one is always better in the short term and worse in the long term.
And most people do the second one.
That's why they're broke.
And that's where this falls in that category.
This is The Ramsey Show. Anthony O'Neill Ramsey personality is my co-host today here on the air open phones at 888-825-5225
888-825-5225 Alejandro and Brenda are with us in Pensacola, Florida, to do a debt-free scream.
And I assume you are there serving?
Yes, sir. We are in the Air Force. I'm in the Air Force.
I suspected with it being Pensacola. Thank you for your service.
How much debt have you guys paid off?
Sir, we paid off $369,000 with $735.
Did you say $369,000? Yes, sir. $369,000 with $735. Did you say $369,000?
Yes, sir.
$369,735.
Wow!
Goodness gracious.
All right.
How long did this take?
Five years, nine months.
Ah, okay.
That makes a little more sense.
And what's your household income range during that five years and nine months?
Well, we started out at 108 000 and uh
finished up at 152 000 wow good for you now you're in the military is your wife work outside the home
yes i'm in the air force and i work for an insurance company great very cool okay i'm
gonna guess and say with this huge amount of money that that includes paying off your house wow talking to weird people how old are you two 32 we're both 32 are you kidding me wow
that so rocks i'm so proud of y'all oh yeah thank you freaking amazing oh yeah okay in a long time
but you know it we did it.
Well, in the scope of life, five years, nine months isn't spit.
You have a paid-for house.
I mean, you're impressive.
So tell me, how did all this start five years and nine months ago?
Oh, I went, I worked into the lunchroom at work, and I heard a group of girls talking about you,
and I was like, man, I'm going to look
him up. I want to know what he's all about. And then I did that while working. And then I went
home to my husband. I was like, hey, I have an idea. And then I just told him he looked it up
and he's like, all right, let's do it. I'm going to jump on board with you. Wow. Just like that.
Yeah. I mean, of course I was a little bit skeptical, so I just looked it up and, you know,
everything sounded really well. The total money makeover was great. And we just, we got going right away. We just, here's the thing, Dave. We don't want to end up, you know, God bless our parents, but they're both in their 60s, 70s, living paycheck to paycheck, and they still have a mortgage. We just want to change our family tree. We just want to
be weird. We want to change our family tree. And to us, this is a true definition of the American
dream. Okay. I'm looking at your name. I'm hearing a little bit of an accent. What is your heritage?
Yeah. So I was born in Columbia and my wife was born in Miami. Her parents are from Argentina.
Okay. Okay, cool from Argentina. Okay.
Okay, cool.
That's exciting.
So when you say the American dream, it means something.
Absolutely.
That's pretty impressive.
And here you are serving in the Air Force.
This is very cool.
Very cool.
Yes, sir.
So what do you do in the Air Force?
I'm a pilot.
What do you fly?
I fly special operations airplane.
Translation, I ain't going to tell you.
Okay, cool.
I was just thinking that.
That was a little bit too private right there.
That's awesome, man.
Well, thank you, thank you, thank you, thank you.
Alejandro and Brenda, I have a question.
So you all started this journey at 27 years old.
I'm curious, what were your other peers thinking about you all? In your 20s,
you all are saying, yo, we want to attack this debt. We want to pay off our mortgage.
What were your peers on board? Were they looking at you like you're crazy? You're young,
enjoy your life. What was that atmosphere for you all? Yeah, of course. So you have a little bit of both situations going. You know, some of them are very skeptical. Some of them are like, oh, yeah, go for it.
But I think I think most of them, they don't really see it until you're actually, you know, going through it.
And especially right now. Yeah, you got paid for a house.
Yeah. So right now we have quite a few friends that are on board.
But, you know, going through the process, not everybody catches up.
You know, they don't catch on that, hey, this is possible.
Yeah.
Well, that's amazing, dude.
Very, very well done.
I'm so proud of you guys.
Who are your biggest cheerleaders?
I would say my friend Jason.
I have John and George, all three of them great friends.
And I would say they kept us motivated.
And so I'm pretty sure we're being motivational to them as well.
Yeah.
So how about your parents and so forth?
After they see what you guys have done, did it inspire them to do anything?
Well, it's kind of helped them a little, but for them it's harder
because they don't see it. They don't see that this is possible for them because they're already
like older. Both of our fathers are retired. Our moms are the only ones working. So we're trying
to make them get on a strict budget and stuff, but it's been a little bit hard. But then I feel
like our siblings are also like realizing
that this is worth a try and you know i feel like they're almost on board not a hundred percent but
i like i tell them almost doesn't count oh goodness gracious wow yeah they i think they
say that in special ops don't they alej, Alejandro? That's true. That's right.
Almost is not going to work.
Yeah.
So you guys have a paid-for home.
You're 100% debt-free.
I got to ask, what's next for this young couple?
Oh, I was going to tell Dave and you, Anthony,
we're going to be calling back in a few years for the Millionaire Theme Hour.
Come on.
Woo-hoo.
Yeah. Make sure I Woo-hoo! Yeah.
Make sure I'm not on the show.
Let's bring Chris Hogan on that show.
You guys are heroes.
If it's a Millionaire Theme Hour,
it'll be on a day Chris is on, probably,
since that's kind of his stuff.
Yeah.
Man, way to go, you guys.
Well, we're going to send you a copy of Chris's book,
Everyday Millionaires,
because that is the next chapter, for sure, in your story.
You guys are rock stars.
You are absolute heroes. We're so proud of you. And next chapter for sure in your story. You guys are rock stars. You are absolute heroes.
We're so proud of you.
And again, thank you for your service.
Alejandro and Brenda, $369,000 paid off in five years and nine months, making $108,152.
That includes a paid-for home at 32 years old.
Shut up.
Count it down.
Let's hear a debt-free scream.
Three, two, one.
We're debt-free.
Woo-hoo.
Yeah.
That is awesome.
Man, oh, man, oh, man.
Thank you, Lord.
Good stuff.
Very well done. Mark is with us.
Mark is in Dallas, Texas. Hey, Mark, how can we help?
Hey, Dave. Hey, Anthony. So I'm currently working full time, but by the end of the year, I'm more than likely going to be losing my full-time health benefits. Now, I already know that I can go on to my wife's insurance.
That will cost us an extra $600 per month, give or take.
I was just wondering if you think I should do that, look into the open insurance market, or look at a different option.
Well, that's really your two options is go to
DaveRamsey.com and click on ELP for health insurance talk to one of the brokers and have
them shop around and get you the best deal as an individual policy and compare that to what it will
cost additionally and compare the coverages for if you were added to your wife's policy I will give
you a guess but I would do the research because if all the facts are in front of you and all the options are in front of you
the answer will bark at you yeah right yeah you go pick me pick me right and so uh that's what
you're talking about that's what happens if you gather up good amounts of information when you're
making any major decisions so i mean if you had if you had an option that's $900 and an option that's $700 and hers is $600 and hers has more coverage, it's kind of like a no-duh, right?
Right.
And so that's what's going to happen.
Something like that is going to land on your plate.
I'm going to guess, I'm still going to do the exercise,
but I'm going to guess if I'm in your shoes that adding to her policy
is probably going to be your most coverage for the least money.
All right. That's good. But go to the ELP and shop going to be your most coverage for the least money. Yeah. All right.
That's good.
But go to the ELP and shop it to be sure.
I could be wrong.
Have you ever seen something otherwise, Dave, to where it has?
Yeah.
Okay.
600's a lot.
It is.
To add to your spouse's policy.
I was just about to say that.
And if he's 24 and we didn't ask his age and he's got zero health problems, he's not overweight,
you know, obesity is huge on health insurance.
And not smoking.
Yes.
Right?
Not jumping out of perfectly good airplanes, that kind of stuff.
Right.
Then all that kind of stuff.
Then he could get a policy for $400.
Okay.
With maybe a $5,000 deductible HSA plan or something.
It's possible, depending on the state, depending on what's going on.
But we don't know his health statistics to run a number right here.
So just run it with the ELPs.
They'll shop around.
They'll help you get the best deal.
This is The Ramsey personality is my co-host today.
Open phones at 888-825-5225.
Our question of the day comes from Blinds.com.
They have a 100% satisfaction guarantee that means even if you mismeasure or you pick the wrong color,
they'll remake your window blinds for free.
You get free samples, free shipping, and with the new promos they run every month, you'll save even more.
Use the promo code Ramsey to get the best possible deal.
Dave, today's question comes from Caleb in Iowa.
He says, I'm 23, making $120,000 gross, and so far I've been able to earn my way out of the dumb financial decisions I have made without really changing my lifestyle. And I've struggled following a written budget.
I've been at baby step four without really ever really changing my lifestyle
on more than one occasion,
but always end up relapsing down to steps two and three in the next few weeks.
I will once again pay off the non-mortgage debt i have and have my three months
emergency fund any tips on getting on board with a more responsible lifestyle at this step so i can
quit this cycle 23 23 uh you are the problem um and i think the and I say that in a respectful way, Caleb, I think you you're asking us for advice.
I think you need to look in the mirror and tell yourself it's time for discipline and intentionality.
OK, there's no reason why you should be going back and forth.
You don't have nothing major happening in your life.
It sounds like you're just making poor decisions.
And I always teach this to 23 year olds dave that the caliber of your future
will be determined by the choice you make today and he's not making the right choices and that's
true of 53 year old too so caleb i think you're halfway there by recognizing the problem uh when
you don't recognize that there's a problem, then you don't have to address it.
My dad used to say, knowing that there's a problem is 90% of solving it.
A lot of people are just unaware that there's even a problem.
They're in the zombie apocalypse and just wandering around, right, and just in a zone.
And so I think you're halfway there just by recognizing that there's an issue. And what happens is as we go through our life,
we have different things that come into our life
that call us to a higher level of nobility.
For instance, when you get married and you have your first child,
suddenly you will do anything to protect and provide for that child.
It takes someone who was self-centered and they grow up almost instantaneously.
You know, they become other-centered.
That little baby, other-centered.
And that's one time that it happens.
Other times you can just uh it's a matter of
like where you are caleb it's just a decision uh like for sometimes i run into people your age
caleb that uh aren't married don't have a kid but they're looking at a different kind of a why
you need a big why is what we're talking about a reason to not lapse yeah and that baby is an
example of a reason to not lapse but another one baby is an example of a reason
to not lapse. But another one
that I was talking to, Anthony, you and I believe
we're talking to the young man, he's
strong faith.
And his reason for that
was he didn't want to disappoint God.
He wanted to be a faithful servant.
He wanted to be trustworthy,
worthy of trust.
So it was a thing between him and jesus it was not a it
wasn't a it wasn't i don't want to let dave down or anthony down it wasn't my wife's gonna be mad
at me it wasn't my kid can't eat because i'm misbehaving it was i just don't want to let jesus
down i want i want to be worthy of trust i want to be a good steward a good manager of god's
resources he as an act of his faith it became his why yes yes and
so i don't care what your why is but right now you just don't have one yeah yeah and um you know
you need a real reason i'll give you an example okay somebody who wants to lose weight to to look
nicer in their clothes is not nearly as motivated as someone that the doctor says,
if you don't lose 50 pounds and get your cholesterol down, you are going to die.
Yep.
I have a different why.
Fitting in your clothes versus dying.
Yes, sir.
Okay?
It's a different kind of a why.
Yeah.
It raises you to a different level of motivation.
It does. And the interesting thing is that you can just decide that item is there.
Now, you don't have to decide you're going to die.
I don't mean that.
But you can just go, I'm just disgusted with myself, and I'm not going to do this anymore.
You know, that's a decision.
And he's kind of heading towards that.
This verbiage is getting increasingly frustrated with the guy in his mirror.
You see it?
Yes, I see it.
I mean, and here's the thing, too, I want to say, Caleb.
Dave is talking about a why.
And one of the things I talk about on my channel is if your why doesn't make you cry,
then the price of commitment will make you cry.
You need to dig very deep into yourself and find something that just activates that emotional side of you as a young man.
What can make you care deeply?
Yes. Yes. That just activates that emotional side of you as a young man. What can make you care deeply?
Yes.
Yes.
And when you can identify that, then you will never go back to what you're saying you do not want to go back to.
I could never go back to sleeping in the back of my car.
I can never go back to living paycheck to paycheck. I can never do that because what I care about so deeply on the inside just gets me so emotional
that it pushes me forward even when I feel like sometimes going backwards.
And it's how people break major stuff like addictions.
Yes.
They have to have a why.
Yeah.
They have to have something that's better than the drink.
Yep.
They have to have something that's better than the drug.
They have to have something that's better than the porn or the gambling.
It's more important to them than that item is.
And you've got to care deeply.
And so you could take those kinds of ideas, folks, and just by putting some thought to it, some prayer to it, some meditation to it,
and in a sense you are manufacturing your nobility, your why.
And the beautiful thing about Caleb's situation is he's asking the question.
Yes.
Most people in our culture are so oblivious that they need to even ask that question.
And even if someone asks it of them, they become offended.
So, you know, Robert is with us in Chicago.
Hey, Robert, welcome to The Dave Ramsey Show.
Hi, Dave.
Thanks for taking my call. Sure. What's up? I'm a pretty new
listener. I just got married in October, so I started taking money a little bit more seriously.
Thank you. So I've been binging episodes, and I read The Complete Guide to Money,
and I realized I was raised by pretty wise parents because I'm starting off in
steps four through six, and I had a bunch of money in savings,
so we just paid off the
house this week. Wow. Oh, well, you're fine by that, Robert. Congrats, man. Yeah.
We have obviously no kids yet. And so my couple of questions are, I'm not sure how much life
insurance I should take out since we have the house paid off and I don't have kids. And then also, I've been investing in retirement, but not quite to 15%,
and because of my income, I'm having to do a backdoor Roth,
so I'm kind of figuring that out.
But I'm not quite sure about your category, as you say,
growth, growth in income, aggressive growth international.
And at least in my brokerage, things aren't labeled like that,
so I don't really know what that means
or what type of labels I'm supposed to be looking for
for the mutual fund.
That's good.
A lot going on there.
Yeah, the very first one, man,
how much do you make a year?
What's your household income?
Household income is around $200,000.
Okay, cool.
So what we teach here is just 10 times that.
That should be the minimum.
On your life insurance.
On your life insurance. Okay, and that's term life, so that's not a whole life that's term life right um and
even with because i've heard you guys talk on some of the other episodes about um you know you're
thinking about the stuff that you want to get taken care of with that money so you could reduce
it in your situation because it's really it's really 10 times to 12 times what it's going to take her to live
yeah yeah okay and she probably doesn't need 200 000 live with a paid for house if you die tomorrow
in a car wreck right so but you you know it's at least a million uh on top of where you are
because we want her to be well cared for uh and that would provide somewhere in the eighty thousand dollar
a year uh income range instead of the 200 uh but i i'm guessing she's a professional as well
um i'm the primary okay uh okay and then when you have kids and when you have kids it'll change
even more so but i would start with at least a million and you could go up to as high as two
million if you want it's not very expensive if you're healthy.
As far as your investing goes, if you want to sit down with one of our SmartVestor pros,
they can walk you through the details of the types of mutual funds.
The biggest thing is there's a clue in the category title.
If it says growth, it's growth stocks. And it's
a company that's growing. It's in there.
If it's aggressive growth, this means, by definition,
it's going to be more volatile.
If it's a foreign fund,
obviously it's going to be overseas stuff.
And that's what you're, you know,
the title tells you what's in there.
And sometimes they use different titles, but it
means the same thing. That puts this
hour of the Ramsey Show
in the books.
Hey guys, this is Kelly,
associate producer for The Ramsey Show.
Did you know that over 16 million people
listen to The Ramsey Show every week?
And a lot of those people listen on one of our
600 plus radio stations across the country.
To find a station near you,
head to DaveRamsey.com
slash show.