The Ramsey Show - App - When Debt Is Blocking Your Financial Dreams (Hour 3)

Episode Date: June 26, 2018

The show about you

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 the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, and we'll talk about your life and your money. It is a free call at 888-825-5225. That's 888-825-5225. You jump in, and we'll talk about your life and your money. Jacob starts us off this hour in Pensacola, Florida. Hi, Jacob.

How are you? I'm good. How are you, Dave? Better than I deserve. What's up? All right. Well, first off, thanks for than I deserve. What's up? All right. Well, first off, thanks for taking my call. I've got a two-part question.

I'll give you kind of the basics first and give you a little background. First off, my wife and I are kind of debt-free, so we're trying to hit the 15% retirement. Okay, your phone is muffled. You need to speak directly into it. Okay. My wife and I were debt-freefree trying to hit the 15% retirement. Okay. So my second question would be how to hit that.

But the first question is, I was recently told that I've got about $3,000 student loan debt. I need to figure out how to pay for it. I'm sorry, how did you not know you had a student loan debt? I guess back when I started college, we took out a small $3,500 student loan, myself and my parents. And my parents had told me that they were going to pay for it, but in the past couple weeks, my dad bought it to my attention and asked if we could pay for it. And since my name's on the loan, my wife and I decided we'll pay for it. Okay. It's only about $3, my wife and I decided we'll pay for it. Okay.

It's only about $3,000. Right. Do you have money in your emergency fund to pay it off? Yes, we've got about $12,000 in the emergency fund. Well, then we're at baby step two because you have debt and you use any money that you have that's not retirement to clear your debts. So you write a check out of the emergency fund and pay it off. Okay.

Then we rebuild the emergency fund to a proper three to six months of expenses, and then that gets us past baby step three, and you start baby step four, 15% of your income going into retirement. So what is your income, household income? I make $2,800 every two weeks. I'm in the military. You're single? Married.

And does your wife work outside the home? She did previously. She just quit to start her own business, a graphic design business. Okay. So what is your annual household income going to be in the next 12 months, roughly? Hello? Hello? Hello? $70,000.

Oh, okay. $70,000. All right. And so that means we need to be putting away somewhere in the neighborhood of $10,000. Okay? So around $800 a month. You can do that with simple Roth IRAs if you want to. You've got the TSP available to you as a military member.

Thank you for your service, by the way. And so you can do a TSP, but I would rather be in the open market in mutual funds. I think you can find mutual funds that will outperform the options in the TSP. As a matter of fact, I know you can. And so, you know, you can put up to fifty five hundred dollars a year into an ira of course and um you're you can do one for your wife as well that'd be eleven thousand and that's where i would start in roth iras and put that in good growth stock mutual funds if later on as your incomes come up her self-employment takes off your you know you continue along your military

career you want to do more than you can along your military career, you want to do more, then you can do the TSP. If you're going to do that above your Roth IRAs, then I would do the Roth version of the TSP, and I would put 60% to 80% in the C plan and the other split among the S and the I when you get there. But I would rather do the mutual funds and the open market first, good growth stock mutual funds across the four types. We talk about growth, growth and income, aggressive growth,

and international in good Roth IRAs. So to do that, what I tell you to do, Jacob, is jump on DaveRamsey.com, click on SmartVestor, enter your information, your name and stuff. It will drop down a list of the SmartVestor pros in your area, people that sell mutual funds. I'm not in the mutual fund business, but we have a referral network of people we send people to that do stuff the way we teach. So you'll find out about doing a Roth IRA, and they can set that up to come out of your checking account and so forth. That all happens, of course, after you've replenished your emergency fund that we're draining down to pay off the old thing.

So good question. Thanks for joining us. Albert is on the line. Albert's in Las Vegas, Nevada. Hi, Albert. How are you? Hello, Dave. How's it going?

Better than I deserve. What's up? I'm doing great. I have some questions. I've got myself a little debt, too. And we have a car payment of about $27,000 on this. And we have a three-team. I'm sorry.

I'm having trouble hearing you, too. You're going to have to speak directly into your phone as well. All right. Can you hear me better now? Yes, sir. Thank you. All right. Yeah, me and my wife, we together make about $100,000 a year.

And we got car debt of about $27,000 on two cars and $32,000 credit card debt. And we already finished that one. We got the $1,000 already. Good. About six days. And we started the snowball effect now. Mm-hmm. And I also have a timeshare. It's already paid off.

And I was wondering, should we sell that and pay some of that debt down or keep it? That was my question to you. I don't know if I should get rid of it or not. Gotcha. Well, most timeshares don't have a market. There's not any place to sell them. Most of the time, it's just a loss. Whatever you paid for it, you've lost because nobody wants to buy a timeshare.

The exceptions would be if you have a Disney, there's a market for those, and you can move those. Is it a Disney? No, it's a Walmart by World Hand. Okay. I'm guessing there's not a market for it. If you had a market and you can sell it, I would sell it. But my guess is it's just an expense for you from this point forward.

If you keep it, you're going to pay the maintenance fees, and you're going to see those go up every year. And so that's why we endorse Timeshare Exit Team as a company to help people get out of their timeshares that want to get out of them. And, you know, you're going to spend some money to get out of it, but it's going to cost you money with your annual maintenance fees if it's not a type that you can sell. Ninety-something percent of the time shares out there have zero value.

They're an absolute horrid product, a disaster. It's a complete screw-up, a complete rip-off. And so we tell people to stay completely away from them. Again, the only ones that we've ever seen anybody sell are Disney, and there's a couple of others that have a little bit of a secondary market, but 99% of them, 98% of them, you're just stuck, and you're going to pay that annual maintenance fee, and you're either going to choose to keep it and pay that annual maintenance fee

until you get sick of paying it and it keeps going up, or you're going to write a check to someone like Timeshare Exit Team to get out of the thing. And so you've got to look at the expense of it and decide, going up, or you're going to write a check to someone like Timeshare Exit Team to get out of the thing. And so you've got to look at the expense of it and decide, you know, that versus what you've, you know, the money you've lost is gone. You're just out of luck on that, and then decide from there what you're going to do. So you can talk to the people at Timeshare Exit Team. They can tell you what your options are.

And jump online and see if yours is a type that there's actually a market for on the rare chance that there is a place to actually sell it. If you can sell it and get money for it, that makes it instant. Be done with it as fast as you can, because that market's not getting any better. It's a really, really bad product. There's like a 98% dissatisfaction with timeshares. People buy them and almost always wish they didn't, in other words. This is the Dave Ramsey Show. One-third of American households have no life insurance,

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You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. Steve's with us in Denver, Colorado. Hi, Steve. How are you? Hi, Mr. Ramsey. Thank you so much. It's such a pleasure to speak with you. You too. First, before my question, I just wanted to mention, I mean, we are so grateful for everything you've done, you know, for our family.

We've attended just about all of your events here in Colorado and one of your books. Even our kids are young, and they're already thinking about college and saving, and we're going to be picking up a couple copies of the Graduate Survival Guide for them. I don't know if they're a little too young, but at least we're going to pick it up and keep them on the right track. Cool. Well, I'm honored. Thank you so much. We appreciate you engaging with our company very much. How can I help today? Well, thank you.

My question is, we've been watching programs on television about tiny homes and the tiny homes movement. Do you recommend a tiny home as a second home or even an investment property? I know you say that if something is on wheels, it's going to go down in value. If it has a foundation on it, it's a tiny home. Do you recommend that? I'm sure you know what a basic supply-demand curve is, the very first lesson in Econ 101, right? Yes, sir. And that means that if there is a higher demand of something than there is supply,

we would call that a seller's market, and that drives the price up. If a great number of buyers are chasing a few items, it drives the price up, right? Right. If very few buyers are chasing a great many items, then that would be a buyer's market, right? And that drives the price down. You know what I'm saying, right? Right. That's the tiny house movement.

There is nobody in that market. It's a complete fad. There's a handful of people talking about it. And the number of people that want to live in a doghouse is very low. It really is. I mean, and so, therefore, it is going, I predict it's going to completely fizzle out. But if it doesn't completely fizzle out, at a minimum, the demand for them, because it's such an abnormal, weird product,

the demand for them is going to continue to be across the population. As compared to regular single families or even compared to mobile homes, the demand for them is going to be unusually low. Therefore, they're not going to prove out to be a good investment because they're not going to go up in value because it's a very few buyers chasing, you know, the supply-demand curve. Very few buyers chasing a higher supply. It's going to be because there's just, there's no market for it much other than this fad

thing that, you know, some of these people are chasing it on television. But, you know, we all know reality television isn't reality. At least any of us that have been around it a little bit know that. When I was on a reality show and I walked up and rung the doorbell for the sixth time because they wanted to get the exact camera angle on me ringing the doorbell, I knew we were not doing reality television. I knew we were doing scripted stuff, okay? And that's what that's, you know, that's the kind of environment that this stuff shows up in.

So, no, I won't be buying any tiny houses, never. And, no, I can be wrong, and 20 years from now, you can look back and go, Dave Ramsey's an idiot, and there's tiny houses on every corner. But I just don't really see it. Do you? I mean, do you really see that being a big swath of the housing market in the population 10 or 15 years from now? No, we don't. Logical? It is. It is. That's great. Great advice. I appreciate we don't. Logical? It is.

It is. Great advice. I appreciate it very much. Thank you for the call. Open phones at 888-825-5225. And here's what's interesting. You people that get on these fads like that or Bitcoin or something else, and then I tell you they're stupid,

you guys get all twisted up like I called your mother ugly or something. I mean, you send me hate mail. Dave Ramsey's an idiot because he doesn't like tiny houses. And some guy living in his mother's basement writes a Dave Ramsey's an idiot blog. You know, and it's just amazing how intense you are on some of your stupidity. It's wild. So, no, we don't buy tiny houses. We don't buy Bitcoin. Listen, guys buy bitcoin listen guys getting rich isn't hard

it just takes a while it's just harder when you do all these sidetracked things where you're just chasing the unicorns over rainbows stop chasing unicorns just get you a plow horse, man. That's all it is. Just work. Live on lesson you make. Put your money in a basic proven investment. Don't try to get so fancy. Don't try to take a shortcut. There's no shortcut to any place that's worth going. It's how all the millionaires do it. I mean, how many millionaires have you think you run into that go, you know what, Dave? I'm worth $5 million. You know what I did this year? I loaded up on tiny houses. I mean, have you ever heard anybody say that?

No. I mean, you're laughing because it's ludicrous, you know? And that's the kind of stuff we're talking about here. You know, Dave, I'm worth $20 million, and you know what I did? I put $19 million of that in Bitcoin. You don't hear people say that stuff. You know why? Because they don't do it. That's why. Because people who are $20 million of that in Bitcoin. You don't hear people say that stuff. You know why? Because they don't do it.

That's why. Because people who are $20 million are smarter than that. So, you know, they know that that's a fool's errand. It's fool's gold. And that's what you're going to get into. So you just don't need a shortcut. You don't need anything quick. And I'm not picking on Steve at all.

I'm just saying, because Steve's a really solid question, good, reasonable question, comes up all the time. But what I am picking on is all this crap i see on the internet about me on tiny houses or me on bitcoin or me on whatever dave ramsey doesn't understand this dave ramsey doesn't understand this he's good about getting people out of debt but he doesn't understand that other stuff you know and oh brother let's compare net worth and then you can talk okay seriously see it's not that hard you guys it's really not that hard no shortcuts look around figure out what rich people are doing do what rich people are doing it's called best practices michelle is with us michelle's in phoenix arizona hi michelle how are you i'm fine how are you better than i deserve what's up so we um we are in baby step two slash

six and i'm not quite sure where you would have us deal with a 401k loan that we took out to pay the last little bit on our house it's a baby step two okay so just get it paid off yeah because we'll have enough money to pay it off next week. Good. Knock it out. Why would you keep it? I wouldn't, but I was a little bit nervous because I was like, that'll take us down to $1,000. That's what you're supposed to be at at Baby Step 2.

Perfect. Okay. I just wanted to make sure because that'll just... And then you're going to have no dad house or anything? Correct. Yay! I know. Wow!

What's your income? About 90. Oh, man. So you're going to build your emergency fund real fast. Yes, that's our hope, yeah. You don't even have a house payment. You put your house payment, your car payment, your student loan debt, your 401k payment, all that stuff in that emergency fund until it's built back up.

Right, exactly. Yeah, and you'll be there in no time. Way to go, kid kiddo you killed it house and everything ding ding love it love it chad's in pensacola hey chad how are you i'm doing good how are you better than i deserve how can i help all right i am on baby step two okay and i have about five thousand dollars in utility stocks from when i was a miner that my parents set me up with. Nice. I was wondering if I should take that and cash it out and put it towards that snowball.

Are you living on a budget? I am. Are you through with debt? No. Not going to borrow debt? You're going to keep borrowing money? No. You're through borrowing money. You're not going to not gonna borrow any more money yeah i'm not borrowing any more money good how old are you i'm 28 what kind of debt have you got i i have a couple credit cards

a personal loan and a car and then my wife has student loan debt how much is it total? About $50,000, $55,000. Okay. What's your household income? We're making about $75,000. Okay. And so if you cash this out, it would probably go on the credit cards. I'm going to guess they're the smaller ones. Yeah, it would knock off about three or four credit cards.

Yeah. So effectively, if you don't cash the stock out and pay it down on those credit cards, cut them up and close the accounts, effectively what you've done is you've borrowed on credit cards to buy utility stock. Mm-hmm. See what I'm saying? Mm-hmm. You know, what a balance sheet is, it's a list of your assets and your liabilities, assets

in one column, liabilities in the other, what you own on one side, what you owe on the other, and they offset. And so what we're going to do is admit the offset here by selling this stock. And the reason I ask you all those questions is if you're not going to play through and get out of debt and finish this and live on a budget, then I might be giving you bad advice. But if you're going to do the stuff we teach to do, I'm giving you great advice. I'd cash that stock out by nightfall and throw it on those credit cards. But you've got to play through, dude.

You've got to play all the way through. Don't go back. Ever. This is the Dave Ramsey Show. 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 Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs.

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Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. In Dallas, Texas, Eric is on the line. My screen says you're debt-free, Eric. Way to go, dude. Hey, how you doing? Well done, well done. How much have you paid off? Thank you, sir.

Yes, sir. I've paid off $49,000 in the past two years. Way to go. And range of income during that two years? Range of income, I started at about $35,000 to $40,000, and I'm upward to $65,000 to $70,000 right now. Wow. How did you have your income go double? I got a career.

Went from boxing groceries to actually having a career now. What are you doing? What do you do? I'm selling construction equipment. Good, cool. You know the Dallas market right now is just booming. Yeah, you're in a sweet spot. So is there a correlation between you getting out of debt and getting the job?

I mean, did you get out of debt because you got the job, or did you get the job because you were working to get out of debt? Well, I kind of get a little bit of both. I knew that with the career came more money, and that either came with more responsibility or more fun, and I chose the responsible route. Ah, okay. All right, cool. Well, you can have fun if you've got a big pile of money, too. Oh, absolutely.

You know, that's the best part, right? Yeah, really cool. How old are you? I am 29. Way to go. What kind of debt is this? What kind of debt was this? The debt that this was was credit cards mainly.

I served five years in the Corps. So serving five years in the Marines, they don't really teach you how to budget or save for money. So it kind of turned into credit card debt, personal loans, and I paid off my car. Yeah, okay. Good for you. How much of the 49 was your car? The car was $26,000, brand new. Shame on me for doing that, but unfortunately I didn't know you when I bought the car new.

Gotcha. Okay, cool. Well, thank you for your service to the country. And you're right. It's very tough in the military. And we work with the military a lot and try to help as much as we can. But we've yet to have been able to talk them into putting everybody through Financial Peace University, which needs to happen. Because, I mean, you know what I'm talking about. Every time you leave a base, as you drive down, as you leave the gates in the United States to leave an installation or a base,

each side of the road is stupid people tricks for the next two miles. Absolutely. Every possible dumb thing. What do you mean, 26% interest on a car? Every dumb human thing that somebody can do with money or otherwise is on each side of the road for two miles right there. It's like the predators are just outside the gate to prey on our military because these are 18 year old guys. Right. I mean, and 19 year old guys, and they're just getting hammered.

Most of them. Gals. Absolutely. Yeah. I was guilty of that for sure. Yeah. Well, good for you, man. You turned around.

You took the. Hey, I'm going to grow up, get the big boy job, get after it. Right. Absolutely. Not that the Marines wasn't the big boy job. I'm talking about the other one. But, yeah. So way to go, man.

So what do you tell people the key to getting out of debt is? I would say the key of getting out of debt is, going to quote you, is just to get mad at it. You know? I mean, you have to be aggressive. You can't just literally sit there and be like, okay, well, I'm going to pay $200 towards a credit card this month, but next month I'm going to pay $200 towards a credit card this month, but next month I'm going to spend $250.

It's never going to work like that. So I was just sick and tired of being sick and tired, to be honest. So you kind of put a Marine butt kicking on this debt then? Oh, absolutely. You've got to get mad at it. That's it. Very cool. Good for you, man.

Good. Yeah, that because it's so insidious, that is, that you have to blow it off with a fire hose. You can't hit it with just a little light squirt bottle. You know, you've got to smack it. And that's what you do. It's so woven into our culture and into who we are that you have to really do get passionate about getting rid of it. And then you do. Then it works.

It clears things. So well done, sir. Very well done. Congratulations. Very proud of you. So did you have people making fun of you along the way or encouraging you? I didn't really have people making fun of me. It was more of bringing it to my church community group and telling them, hey, listen, I'm going

to do this right now. This is something that I need to do. I really didn't get my butt into gear until I went through FPU. And at that point in time, I was all in. I was sold. It turned into I'm a spender. So it turned into having community around me, really the support that came with that, being like, hey, listen, I can't have Amazon instant access on my cell phone that that can't that can't happen change my password yeah push notifications to buy crap yeah wow you're right man that's very wise very good

good for you so financial peace university's in the story too that's excellent good stuff we've got a copy of chris hogan's bookire Inspired. That's the next chapter for your story. You're 29 years old. By the time you're 39, I want you to be a millionaire, okay? You got it. Absolutely. And outrageously generous along the way. You got the ability to do that.

You know how to make money. You know how to handle money. You know how to work. You're not scared of it. You get after it. You got the right stuff, man. Congratulations. Very well done eric and dallas texas 49 000 paid off in

two years making 35 to 65 count it down let's hear a debt-free scream all right here we go three two one glory be to god i'm debt free Yeah! There you go. Boom! Got it, man. I love it, I love it, I love it. Very well done. Justin is in Kansas City. Hi, Justin, how are you?

Hey, I'm doing great. How are you today, Dave? Better than I deserve. What's up? Hey, I just wanted to get some advice on one of my friends. I took your FPU class in March, and it's really turned around my situation a ton, so I really believe it could help him out as well. His deal is he's been unemployed for about two months now and had no emergency fund or anything of that nature,

and he just confided in me that he has a little over $70,000 in mostly credit card debt but a little bit of student loan and auto loan as well. How old is he? He is 28 or 27, 28. Single? Single, yep. He's scared. I think that's a big key there.

So I don't know as a support group whether I should keep pushing him to try to take financial peace. I've offered to go through it with him, be his accountability partner, or maybe if I'm better off just trying to get him to read the total money makeover, something like that maybe. Well, right now what's going on is he's got all this debt. He's got no income. He's freaking out. Am I wrong?

Yeah, no, I think that's probably spot on. I mean, I would be if I was 28 and had $70,000 in debt and no income. I'd be going, ah! You know, right? You wake up in the middle of the night screaming. So sleep like a baby, wake up every three hours crying. I mean, it'd be bad, you know? So what's he doing on the job front?

He's been applying for a lot of jobs, and I think he's finally getting to the point where he realizes he might just have to take an income cut. And so I'm hoping that'll be enough motivation to get him to just find something. What did he used to do? He used to work at a CPA firm. He has a master's in accounting. And what did he make?

I think he was just shy of $60 a year. Okay. Must have just finished his master's and his first job out, right? This was his first job, yep. Okay. Well, here's the thing. He can start doing accounting anywhere, anytime, fast. And he needs to.

I mean, even if he just goes and knocks on some small business doors and goes, hey, I'll keep your books as a side deal. Let me help you. I've got a master's in accounting. He can set up their bookkeeping system for him. He can start making money 20 minutes from now. Zero income is destroying his ability to interview. The fact that he's completely overwhelmed.

He interviews like he's scared. Why? Because he's scared. You ever interviewed somebody that was desperate for the job? It made you not want to hire them. Yeah, and that was kind of my thought as well. So I thought the Financial Peace University might... I don't think so. Because I think he's got an income problem. I don't think he's got a money management problem i think he's got a

career crisis so i'm more concerned about getting his income moving in some manner or form if he would take a part-time job doing side work for some accounting firm and start making 25 30 thousand dollars a year while he keeps looking for his full-time gig. Get the wolf away from the door. The wolf is gnawing on his leg, and it makes him interview weird. And so, I mean, this guy, he's marketable at $60,000 to $80,000 a year with a master's in accounting somewhere in that market, but not marketable when you go in there and your veins are standing out on your neck

and in your forehead. It just, it changes the interview process, dude. That's what you need to work on is the income side of the equation. Hey, this is Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors.

Some of these guys are just scum. But then there are the collectors that are just plain crooks. These are the guys that take it a step further, and they violate the Federal Fair Debt Collection Practices Act on a daily basis. They're breaking the law, and they need to be stopped. The truth is debt collection is the most abusive out of control industry in America today, but you don't have to put up with it. If you have collectors calling you multiple times a day, calling you at work after you've

asked them not to cursing or threatening you in any way, then you need to visit collectionbully.com. These folks will connect you with an attorney who I know can help you. These attorneys know how to stop collection agencies from bullying and threatening you anymore. CollectionBully.com. Go to CollectionBully.com today. That's CollectionBully.com. Our scripture of the day, Ephesians 6.13 Therefore take up the whole armor of God that you may be able to withstand the evil day

and having done all, to stand firm. Robert Reich said, True patriotism isn't cheap. It's about taking on a fair share of the burden of keeping America going. Jesse is with us in Los Angeles. Hi, Jesse. How are you? I'm doing good, Dave. How are you doing?

Better than I deserve. What's up? Thanks for taking my call. My husband and I are wondering if we should stay in the current rental situation we are in or move to a new one. We are currently in baby step two. Okay. Renting is short term.

It's camping until you get your other goals hit, right? Yes. So we want to pay the cheapest possible that is reasonable for our family to camp. Absolutely. So which one's more expensive? Moving. Why would you move? We're having some issues with the place that needs to be patched. And our lease is up in a couple weeks here.

And there's some water damage that needs to be fixed. And the drywall needs to be patched. And three inspectors have been out to look at it, but no one's been hired to fix it, and we don't have a timeline on when the drywall is going to be taken care of. And the inspectors were mold inspectors, and they said that it was inconclusive, everything's dry, but there are spores. So we're just trying to figure out, you know, if it's really actually a safe place for us to stay and try to navigate that and figure out how to work with the property managers until we're able to even find a new lease. Okay.

Well, number one is if you're not safe, you're moving. Yeah. Okay. That's not an issue. Number two, mold spores can mean a lot of different things. I don't know whether you've got a mold-infested property here and your family's not safe or whether there's one corner that has three little spots in it and somebody did a swab and found some spores. That will not make you sick. Okay.

I mean, really, think about it. It's common sense. Yeah. Any more than walking in the backyard, Will, if you're growing dandelions. I mean, you know, I mean, you'll get a hay fever from that sneeze, too, but it doesn't put you in the hospital. But your family's not safe if you have a whole wall covered in the stuff. Okay.

And so I don't know to what extent the mold eradication has been done, to what extent it needs to be done, and what the timeline is and so forth. But it sounds to me like you've got other issues, and this mold thing has just kind of brought it to the surface, no pun intended, meaning that you're just kind of over these property managers that are half-butt, and you don't like this house anyway. Yeah. Is that right?

Yes. Okay. If you want to move, then let's just move. We don't have to blame it on the mold unless the mold is real and big enough that it's a threat. Okay? Okay. So you can check on that and decide for yourself. I mean, but I think, you know, how many square inches of this do you think you're dealing with?

One foot by one foot? Maybe three by three. Feet? Feet, yeah. That's a lot. Just kind of, but, well, that's where the water damage is. We weren't able to see the results from the tests that were done. Okay.

That's a pretty substantial piece of damage, though. I mean, you may have a problem there. That's not a, you know. But, I mean, I've had places where there was something three inches by three inches and people go bananas, you know. Okay. Because I just don't want you to be that person. But, you know, three feet by three feet, that's a dadgum leak that went on for a long time.

Well, yeah, I mean, it's in a condo, and so the outside, the roof has been repaired. It's the inside drywall that is up to the owner to fix that hasn't been taken care of. And how long has that been going on? The leak started in mid-December, and the roof was fixed about a month ago. Okay. All right. Well, I think you guys just have to decide two things. Number one, you don't have to move up in rent.

You can move laterally in rent if you need to get out of there for safety's sake so whatever you're paying now is your budget when you move because you're trying to get out of debt and if you move every dollar you pay in extra rent because of this emotional situation um causes you to delay getting your house someday and getting out of debt someday right yes so we don't like we want to limit that damage to your budget. That's what I'm after. So either we're going to fix this and feel comfortable that your family's safe or you're going to move to something about the same price or cheaper.

Now, if you can find something cheaper, that kind of makes it a no-brainer. So then I guess what I would do is I would get on the phone with a property manager and say, okay, we need some definite guidelines. We are not renewing a one-year lease under these circumstances. We are going to agree to give you 30 days to fix this. If it is fixed to our satisfaction during that 30 days, then we will renew, if you're willing to do that at all. Okay? Then we will renew if you're willing to do that at all. Okay. But if you decide if they fix it right and they fix it within 30 days and we feel like our family's safe, then that's fine. And then just call the property manager and go, look, you know, I'm not you're not going to have this done within 20 days.

And so until you get this done, it's not fair for you to ask us to sign a long-term lease because we need to know that this property is going to be repaired. This has been going on for six or eight months now. And so, you know, you need to give us an extension 30 days at a time until you get it repaired or until we run out of patience with you getting it repaired. If during this 30 days you get it fixed to our satisfaction and the mold is all removed and eradicated and there's no issue for our family's health, we will stay for one more year. We will sign a lease. Or you just make the decision to move, whichever one you want to do. I don't care. But don't move up and rent.

And then you just lay it out for the property manager and say, these are the terms under which I will stay. If you want me to stay, you're going to do this in a reasonable timeline. And, you know, to expect them to have it all the work done and you to be satisfied in 20 days is probably a lot to expect since it's been going on six months. So I'm going to give them 30 days more, but I'm not going to sign a long-term lease during that time until they prove out and say, hey, we're going to take care of business here. We're going to do this properly. And sometimes folks in the property management business just need a little fire lit under them. No pun intended there either.

So, hey, thanks for the call. We appreciate you joining us. Ben is on Twitter following me at Dave Ramsey. When do you file an insurance claim on a homeowner issue versus just paying cash and dealing with it? When it's enough above my deductible that I feel the pain from it. You know, if you've got a $1,000 deductible and you have an $1,100 issue, well, you pay the $100 out of your pocket and don't mess with it. But if you have a $2,000 issue with a $1,000 deductible, that might be enough to get you to file a claim depending on your finances

and what's going on, the expense of the house and the cost of the insurance policy and all that kind of a thing. But somehow we get the idea we make money on insurance processes we don't insurance companies make money consumers pay insurance companies you don't make money on insurance not long term i mean you might have a situation once in a blue moon where you know you come out ahead on a transaction versus what you paid in and that kind of thing. But over the scope of your life, you don't make money on insurance companies.

So let's not be confused about that. Point being that if you turn the claim in, you're going to experience a rate increase or a cancellation somewhere at some point that offsets that and or someone is. It gets spread across several people so um you know so it i only turn in substantial claims that are substantially above the deductible because i don't want to deal with cancellations and i don't want to deal with rate increases and i don't want to be questioned about stuff but i've turned in a few claims in my life on homeowners. And a couple on cars, by the way.

So that puts this hour of the Dave Ramsey Show in the books. Our thanks to Zach Bennett filling in for James Childs today. Kelly Daniels, associate producer and phone screener. I am Dave Ramsey, your host. We'll be back with you 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, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year.

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