The Ramsey Show - App - When the Wall Came Down on Christmas, It Was Over (Hour 3)

Episode Date: December 17, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where dad 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. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Micah is with us in Little Rock, Arkansas. Hi, Micah. Welcome to the Dave Ramsey Show.

Hey, thank you. How are you doing, Dave? Better than I deserve. What's up? Well, I was kind of wanting to ask the question of maybe what would you do if you're in the situation that I'm in. I have accumulated some cash over the years in our savings account, and I'm trying just to find a safe way to invest it, but where I'm getting better returns than what I'm seeing in my CDs right now. I'm very, very conservative when it comes to money, And through this process, I've stumbled across like triple net leases where, say, in Orlando

or either you buy a restaurant chain and they lease it back immediately after the sale for, say, a 7% return through the rent. Is that something that you would recommend? Is that a safe way to put money where hopefully the real estate appreciates and you're getting the annual rent from it? Well, you're just buying a piece of commercial real estate. You have an A tenant, and so a AAA tenant, and so you're making what we call a credit tenant in the real estate world, and so they are not willing to pay much of a cap rate, it's called, the capitalization rate, which is what you were actually making on the property. What you're talking about is a 7% cap rate, is how this thing is capped out.

And so you're just buying real estate with a super high-quality tenant with a low rent. That's all it is. You spent the same amount of money in dollars is that i'm sorry is that better i'm still looking at like two million dollars to invest okay if you bought another two million savings account if you bought another two million dollar property that didn't have a triple a tenant in it but that you could attract good quality tenants to that pay, you know, you might make a 10 cap rate. But would I, I'm looking also at investing as little time as possible because I still, I own a business and so I'm doing that full time.

And I just, I'm looking for something better than a CD, but something where I invest about that much time. Then the cap rate would be fine. I mean, the AAA tenant the cap rate would be fine. I mean, the AAA tenant, credit tenant situation would be fine. I have never bought one of those properties personally. I've attempted to a few times, but I just demand more of a rate of return. But I own a lot of real estate, and so I own a property management firm that my son-in-law runs for us as a part of the deal.

So I'm set up that way where you're not. And in your case, with your risk aversion and you're not wanting to have any hassle factor, a triple net, triple A credit tenant means that you're doing no maintenance. You're not even paying the taxes or insurance. They're paying them directly, and they send you proof of payment. All they do is send you the rent. That's it. And you own the building, and it appreciates. Now, usually these are long-term leases, and so the downside is the building is not going to appreciate as much as other real estate like it

because it is hampered by this lower rate of return lease it is also enhanced by this lower rate of return lease if the uh buyer is you you know but that you're you're the type of buyer and so where a piece of real estate goes up in value that lease owns that property so if they have a long-term 20-year lease on it if the piece of property across the street sells for triple, your value doesn't go up because that lease has got that thing encumbered for 20 years. You follow me? Your value only goes up if your tenant goes out and then whatever market goes in. Now, the downside is you could lease to Sears or Toys R Us. Or Circuit City.

Circuit City, yeah, exactly. Which, by the way, were all credit tenants at one time. They were all high, low cap rate type tenants and would have been considered that. And I got a Toys R Us sitting about 300 yards from where I'm sitting right now. I don't own it, but, I mean, it's a building sitting over there empty. And, you know, that landlord now has a face of property that is no longer encumbered by the lease. Right, right. Is there something else that I'm not aware of where I could put this money,

where I could get some use of it? I think this is really, really good for you. I think you're going to like this. If you don't want to put it all in one property, I wouldn't. I'd probably just try this. If you've got $2 million to play with, pick up a $1 million deal. And then the next time you do it, you might crank it up. Another notch up for you in risk would be a traditional triple net lease, but not a credit tenant.

And where you'll find that that is really, you know, probably a full point or two up on your cap rate, in other words, you might make nine instead of seven, would be a good warehouse deal. A lot of warehouses are triple net. The tenant takes care of everything and sends you a check, but the tenant may not be a household name that is a restaurant chain or Walgreens or a CVS or something like that, right?

Which just about all of those deals are. I looked at one around the corner here. It was Pier 1 Imports was a triple net or a credit tenant with a triple net. I looked at it a while back, about five years ago, I guess I looked at that deal. But anyway, you can move up by in cap rate and a slight amount in hassle with a warehouse scenario. And that might be something to play with as your next purchase but i think this is fine purchase for you another one that people do it's even a lower cap rate is uh like a post office because your tenant is the ultimate credit tenant it's

the u.s government and so when you have a federal government as the federal government as your tenant uh and you've got to build a suit, lease back with a post office deal, you know, your cap rate may be down even lower. It might be down at five or four and some change right now. But it's almost like buying T-bonds at that point or T-bills because, again, there's zero risk of bankruptcy, well, virtually zero risk of bankruptcy. So something to play with.

It's interesting. Be sure to actually look at the balance sheet if it's a publicly traded credit tenant and read up on them, read what people are saying bad about them, how much debt they're carrying, what cash position they're in, and those kinds of things, what cash position they're in, and those kinds of things. What's happening with their cash flows and their profit margins and their trends and their stock price. You don't have to do a detailed thing. You don't have to have a master's degree in finance, but just do some reading and understand,

get a feel for how strong this credit tenant is because there's an array of tenants that would be considered credit tenants. In other words, you would want to smell that Toys R Us was deeply in debt. And if you had been pitched Toys R Us before it made the news as being broke or before they filed bankruptcy the first time, then you'd go in and you'd say, oh oh my gosh, these people got a lot of debt. They got a lot of debt. They got no cash. This could be a problem.

And you just kind of, it's a pretty simple thing to look at. But it's a, that's a good, that's a good discussion. Interesting call. I don't think I've ever had that call. It's cool. I like talking about real estate, obviously. This is the Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation.

Two of the most overlooked things are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income, and I recommend 15 or 20-year plans for most families. Stay away from cash value or return of premium plans. They're just a ripoff. Disability insurance is just as critical. How are you going to pay your bills if you're unable to work? Disability is the leading cause of bankruptcies and foreclosures, and that's why I send you to Zander Insurance. They've been helping my listeners find the right plans at the lowest cost for almost 20 years. Call 800-356-1780 or visit zander.com and compare online. That's 800-356-1780 or zander.com. Thank you for joining us, America.

We're glad you're here. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you get to save even more. Use the promo code RamseyBlinds.com. You'll love these guys. I do. Daniel is with us in Indiana. My wife and I are 30

years old. We have no dad outside of our mortgage. I put 16% towards a 401k. My wife contributes $2,400 towards her Roth IRA. $15,000 saved. When do you reach a point of having too much money tied up in retirement options? Is there such a thing? We want to make sure we

are enjoying life now while also remaining diligent when saving for retirement. Well done, Daniel. You're doing great. You're doing great. Okay, the rule of thumb at the stage you're at, you're debt-free. You should have an emergency fund of three to six months of expenses. We call that baby step three. Once you've done that, then you start saving 15% of your household income. And I don't have your household income, so I can't do the math. You said you're saving 16% and your wife's saving 2,400. I don't know what that is.

So you need to take your whole household income before taxes, your gross, and say gross we make 100,000. So gross we need to save your whole household income before taxes, your gross, and say gross we make $100,000. So gross we need to save $15,000. I'm putting away X, and $15,000 minus X equals Y, and that means my wife needs to put away Y. And so that's how we do it. And the first thing you do is take advantage of matches. The second thing you do is take advantage of Roths. And the first thing you do is take advantage of matches. The second thing you do is take advantage of Roths. And the third thing you do is traditional 401ks.

And so in that order, matches are first because that's your best rate of return. Then Roths are your next best rate of return. And then you move on to traditional. And you spread your money across four types of mutual funds, growth, growth and income, aggressive growth, and international. Berkeley is with us in San Diego. Hey, Berkeley, how are you? I'm good, Mr. Ramsey. How are you?

Better than I deserve. What's up? So my question is kind of a question in a statement. I'm not sure if I'm in baby step one or two. Okay. statement i'm not sure if i'm in baby step one or two okay so i have the cash one emergency fund but i can't touch it because it's in a local credit union on the east coast and i literally have no access to it other than going into the bank with my id and saying hey i am who i am um they do not have the credit union has no online access?

They do, but I've been locked out of my account for a couple of years now. Why? And I just recently, because I moved around, and then either I forgot my logins, or for whatever reason, I just, I cannot access my account. So call them. So call them, yeah. Yeah, so I've called them several times, and they say, we can't do it over the phone, which is fine. I understand security reasons.

So they mail me. They just mail mail this form I fill out, so I mail it back. And then I call them again just to verify that they got it. You know, how do I get access to my account? And I still can't get access to my account for bank jargon that I honestly don't understand. So should I start over an emergency fund on an account I can't access until I can get funds or get... How much money is in the credit union again? Last I checked, it was about $3,300, sir. $7,200?

$33,000. Sorry, $3,300. That was a couple of years ago. Okay. And how old are you? I'm 29. Do you have family in the area where the credit union is? No, sir.

It was when I got stationed out at my first duty station. Okay. And so it's a small local credit union in what town? Pensacola, Florida. Oh, okay. All right. Hmm. I think it's highly unusual that you cannot get into this account.

And there's not any bank jargon that's that complicated. So I think you should try again until you get dialed in. Say, please, just get a hold of the manager and say, I don't understand. I need some help. And please walk me through exactly what I need to do so that I don't mess this up because I need to get this money out of here. And you need to get them to just pay, give you a little bit of personal attention, talk to the branch manager at the credit union or the credit union manager. If it's a small local, it's probably got one branch. And most of the time, it's very unusual for credit unions to be anything except helpful. It's one of the reasons I endorse credit unions, particularly small credit union like this.

They're very customer oriented and just go, listen, I served when I was there. I'm a little bit confused by all of this. I'm a little bit intimidated by all this. Please, would you help me and walk me through it? And then you take detailed notes of exactly what you need to do and spend $7 in FedEx or UPS overnight, the document right back to them. Matter of fact, they could probably email you the document. You can fill it out and you can probably e-file it back with them if there's a document that

needs to be signed to reactivate and get your password reset so that you can cash this account out. But you need to follow through on this. You need to learn how to do the business parts of this. And it sounds like it's just intimidating to you. And so you keep bailing on it. And I want you to play through. I think it'll be really, really good for you to learn to interface with somebody like this

because this is not a big, bad bank here. This is not a Wells Fargo that doesn't care or a Bank of America that doesn't care. They'll help you. I promise you they will. will hey thanks for the call brad is with us in naples florida hey brad welcome to the dave ramsey show thank you so much for taking my call dave i appreciate it sure how can i help so um i just learned uh from my wife that we are going to be expecting a child. Yay! I know, very excited. I'm 31, she's 30, both employed, about $80,000 a year gross. We're facing about 95 and change in debt, majority is student loans.

We're about $13,000 left on a car that we're just really focused on paying off, so it's not a situation where we're going to sell it. We're just going to be crazy about paying it off, which we have, making double payments and everything. So the child and then the situation with my wife, she's going to continue to go to school. She's going to end up having a master's degree and being either physician's assistant or nurse anesthetist. So, you know, the salary will go up. My salary inevitably will go up. I work about two side jobs, so I'm pretty much busy every day making extra money.

But our gross is 80, not counting those extra side jobs. So a bunch of money in the bank. My question is, what do I prioritize? What's that? How much money in the bank? I've got about 40. And you have 90 in debt. That's correct.

And 13 on a car. Right. Okay. All right. And so you're fairly new to our whole process then. That's 100% correct. I always had the opposite philosophy of just always have as much cash as you have. I just have that anxiety about, like, only having 1,000.

But I'm new to the program, and we're ready to dive in, absolutely. Okay. Well, when we find out someone has a pregnancy or a looming emergency, like they come in and say, we're going to lay you off in four months, or we're laying everybody off in four months, or something like that, when you have a looming emergency, we stop temporarily what we call the baby steps and pile up cash until the event passes, in this case, until the baby comes, okay? Sure.

Because a big pile of cash is really nice to have in case something happened. Now, we're not anticipating anything bad happening here, but if there was a hiccup, I don't want you having $1,000. I'd like for you to have $50,000, right? Right. And that gives you a lot of peace with a new baby coming, and this is your first, apparently, right? It is, absolutely. So it's super exciting slash terrifying.

Yeah. Yeah, all at the same time. So a big pile of cash is a good idea there, all right? Okay. Now, and then don't start your baby steps. Baby step one is a good idea there. All right? Okay. And then don't start your baby steps. Baby step one is $1,000. You have that accurate. Baby step two is paying off all of your debts with great intensity, smallest to largest.

But I wouldn't be doing that right now. I'd just be piling up cash. Okay? Okay. For how much longer do we wait after the child? When mommy and baby come home and everybody's healthy, then that event is behind us. Then I'm cleaning out my account, and I'm going to be moving towards debt-free down to $1,000. I'm going to get intense then.

I might go ahead and pay off the car right now. You've got a bunch of money. But, you know, the idea being it's a good idea to have a pile of cash when the baby's coming. There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts, no hidden fees. And if you're thinking our low cost means less coverage, think again. Our voice and data service We'll be right back. to ensure you receive reliable coverage virtually, anytime, anywhere. Plus, you can keep your same phone and number and add multiple lines to save more. We're so confident you'll love Pure Talk USA that we invite you to try our service risk-free. Just visit puretalkusa.com, enter promo code SAVEDAVE, no spaces,

and receive 50% off your first month. That's puretalkusa.com, promo code SAVEDAVE. In the lobby of Ramsey Solutions, Adam and Kayla are with us. Hey, guys, how are you guys? Good. Good, Dave. Merry Christmas. Merry Christmas. Where do you guys live? Iowa. Mount Pleasant, yep. Oh, Mount Pleasant. All right. Very cool. Near Iowa City, then?

Yep, just south. Good, good. Well, welcome to Nashville. I'm here to do a debt-free scream. You bet. Cool. How much have you paid off? Paid off $66,000 in 18 months. Good. And your range of income during that time?

Well, we had no clue when we started. We weren't paying attention, but we went from $70,000 to $95,000. Cool. And what do you guys do for a living? We're both teachers at the middle school in Mount Pleasant. Very cool. Good for you. That's fun.

So what kind of debt was the $66,000? A little bit of everything. We both had student loans. Had to get a new car. Home equity line of credit. Redo a bathroom. Credit cards. You were normal.

Credit cards, yeah, too. Just normal. Just completely normal. Wow. Way to go, guys. Very cool. And so what happened 18 months ago that got you started on all this? It's actually a funny Christmas story.

So I'm sitting in my parents' house, unwrapping gifts with my kids and my wife, and I get a text message from my neighbor, and my landscaping wall has fallen completely into his yard. And I'm trying to figure out how we're going to pay for Christmas on the credit card. And before I know it, I've got a $10,000 landscaping bill that I have no clue how I'm going to pay for. And I thought, you know what? That just ruined Christmas and I'm sick of it and it's not going to happen again. Whoa. That's it. Done. Just like that. So what'd you do? Well, we didn't know what to do. Um, and we really didn't

move for a couple of months on anything, just kind of frustrated. Couldn't figure out how to pay the bill, took more money out on the home equity line of credit, and then, uh, kind of referred back to some friends that had sold a, a really nice house and moved into a little ranch home. And they said it was cause it's Dave Ramsey guy. And I had heard your name before. And I thought, you know, I got to listen to this. So I started running with the podcast and got her to actually go for a run and listen to it as well. And we were both on board right away. Wow. So the podcast did it.

Yep. Wow. But you were ready. The wall did it. The wall came down. The podcast showed you how to get out. When the wall came down, the wall came down. It did.

I'm not proud anymore. I'm ready to learn. I'm ready to do something different. Looking at the physical damage sitting in the neighbor's yard that you can't afford to fix is embarrassing. Oh, man. That's amazing. Oh, that's a bad day, period. But it's a really bad day when you're broke.

On Christmas. On Christmas. Yeah, a double bad day. Wow. So what did you do after you started listening to the podcast? We started with the EveryDollar app. We definitely stuck to that. Definitely did the budget every month pretty much every day.

We talked about it, so that definitely helped. Okay, so that's one of your keys to getting out of debt is doing the budget then. Yeah, and the other one is go to work. I mean, you think you're busy until you need to get out of debt, like a gazelle, you say. And we just found ways to make more money and anything and everything we could do to apply our time. Or my wife was really gracious and did a lot with our two beautiful girls while I went out and tried to make more money. And that really accelerated, you know, we're teachers. We get small raises every year, but it's not like that $25,000 was because of our teaching

jobs. Right. It's just because you kicked it into gear. What was your best part-time job money-wise? Teaching pickleball lessons. I'm a pickleball player and teach lessons and sell equipment and love the sport. Cool. What did you make?

What kind of money per hour? $40 an hour for a lesson. And I could do, there when I was really busy, I was doing, you know, eight extra lessons a week. Cool. What did you make? What kind of money per hour? $40 an hour for a lesson. And I could do, there when I was really busy, I was doing, you know, eight extra lessons a week. Wow. I love it. Yeah. And when I was having a blast, exercising and doing the thing I love to do. Yeah.

So it was a good deal. That's very cool. And I've kept it up, so. Yeah. A guy last week said he had made a ton of money. He was making about $40 an hour reffing kids' soccer. Yeah. And reffing kids' sports and different, you know, umping whatever, different things.

So that's very cool. Good for you guys. Well done. So who are your biggest cheerleaders? I think it's our two little girls. They request your podcast when we get in the car. We've had a lot of conversations, and there's moments where where they'll say Dave Ramsey would be proud of me they were always checking in on us

they're really smart for their age so what are their names and ages you brought them to help with the debt free scream right yeah we have Aaliyah who's 4 and Adalie is 2 alright so a 4 year old and a 2 year old very cool and they rode with you

so they've been practicing their debt-free scream, right? Yep. We'll see if they learned it or not. All right. Very cool. Well, we've got a copy of Chris Hogan's book for you, Retire Inspired, and that will be the next chapter in your story. And we'll send you a copy of the new one, Everyday Millionaires,

because that for sure is your next chapter. Can't wait. The Pickleball Millionaire. That's what we're going to call you, man. That's it. I love it. We don't have our headphones. It's okay.

Well done. All right. Adam, Kaylee, Aaliyah, is that right? Aaliyah, yep. Aaliyah and Adalie from Iowa City area, Mount Pleasant. The $66,000 paid off in 18 months, making $70,000 to $95,000. Count it down. Let's hear a debt-free scream three two one we're dead free

well done you guys very well done oh man that's fun if you live like no one else later you can live and give like no one else. You know, if you missed the show last week, one of the debt-free screams, there was a couple who did their debt-free scream. They had paid off $900,000 in debt. They're making really good money. And their two grown kids were with them. I mean, like 30-year-olds, right, standing there with them.

And while we're on the air, before they did their debt-free scream, they turned to their grown kids and said, oh, and you're debt-free too because we're paying off your mortgages. Wow. That's fun. The generosity, the things you can do with generosity when you are debt-free, oh my goodness, it's so fun. So we're going to block off the entire show this coming Friday for our annual giving show. Three hours, Friday, December the 21st, is going to be a giving show.

And we want you to call in with your giving story now a giving story is a story where you gave something or it could be where you receive something it's just demonstrates this outrageous generosity that comes to people once they've been blessed to the point that they know that they're no longer blessed just to be blessed, but they're blessed so that they can be a blessing. The reason for your generosity is because so many things have come at you that you're overflowing, and some of your goods, some of your money flows over onto other people. So get the real Christmas spirit with the annual giving show. It's 1 to 4 this coming Friday, Central Time.

1 to 4 Central Time. We do a three-hour show live every day here. And you can go to DaveRamsey.com slash show and find all the ways to watch or listen. And if you actually want to participate, you have a great giving story, email it to us at DaveOnAir at DaveRamsey.com. One word, no spaces. DaveOnAir at DaveRamsey.com. Daniela is on YouTube.

Dave, how would it be best to plan or budget to cash flow the next couple of years in college? Well, you simply lay out exactly what you need. You figure out what money you need, what's the tuition, what's the books, what living expenses have you got to cover, and then that's your target, that's your goal. And then we start backing into that and going, how are we going to get that much money? I mean, we're going to work delivering pizza at night, are we going to be a nanny for a doctor and his wife or her wife and or her husband and so on right are you are we gonna what are we gonna do are we gonna drive for uber are we gonna um

uh open a dog walking service i don't know what are you gonna do you're not gonna do it making minimum wage but there's a lot of jobs you can make more money than minimum wage i mean you can you can pressure wash somebody's driveway and seal it. A kid did that one time for us. We gave him some money, like a lot of money. And the reason we hired him was he said, Dave, I'm doing this to get to college. I'm like, well, I got to help you then. You get your butt out there and work, I'll give you some money.

That's how this works, right? So you lay out a game plan of how much money you need and then where you're going to go get it. How are we going to get the money we need? What has to be true that's not true today? I've done a lot of stuff that was legal, but some of it's stuff I don't ever want to do again in order to make money, in order to hit my goals at different times of my life. This is the Dave Ramsey Show. Our scripture of the day, John 13, 34, A new command I give you, love one another as I have loved you. So you must love one another. John Quincy Asim said,

If your actions inspire others to dream more, learn more, do more, and become more, you are a leader. Albert is with us in Chattanooga. Hey, Albert, welcome to the Dave Ramsey Show. Thank you for having me. Sure, how can I help? Well, my wife, she's a teacher, and then I'm a student right now, but we're planning to go to Europe as a missionary,

and we don't know exactly where we're going to end up living in the future. So our question was, do we need to start investing here, or should we just wait and figure out what country we're going to end up living with our kids and everything? Should you start what here? Investing, like, for our retirement in the States? How are you going to support yourself on the mission field? Well, first of all, we're saving cash, and we will have several churches support. And then we will work there also already uh

overseas my wife she has a degree speaking english as a second language so she'll teach english and then i will do some private work and also pastoring and when we and how old are you we're about 23 years old okay all right uh for. For now, I wouldn't worry about investing. For now, I'd worry about taking care of your basic needs. Being on the mission field is tough. Financially, it's very tough. And you're probably not going to have surplus money at this stage in your missionary career to be investing. Now, if you look up and you're 30 years old and you're still on the mission field,

at that point, you need to develop some kind of a model to retire with because even missionaries retire. And so you need to start to build some kind of savings or investing. And depending on where you are at that point, if you're in the States or not in the States or whatever, you would look to use some kind of a retirement-saving vehicle here at that point. But for today, in the near term, the next, say, three to five years, I would concentrate on making sure that your needs are met and that you can afford to stay on the mission field.

Lack of funds drives more people off the field than just about anything else, and it's either because they weren't able to raise enough support or maintain enough support and or didn't have enough savings. So, hey, thanks for the question. And thanks for serving the Lord the way you are. Very cool. Ryan is with us in Green Bay, Wisconsin. Hey, Ryan, how are you?

Good, and yourself? Better than I deserve. How can I help? I'm just wondering how and how much I should invest, given my age. I'm 19 years old right now and got about $25,000 cash. I'm just wondering how I should go about it. Good for you. Do you have any debt?

No, I do not. I got no student loans. I opted not to go to college or nothing. So I got everything I need. The only thing that I would be looking for in the near future would be a home. Good for you. And how much money do you make a year? I make about $20,000 right now, but I'm in the transition of a career change. I'm going to be a semi-driver, not over the road, but here locally in Wisconsin. And what will that do to your income? That will

at least triple it for starting off. I got a job offer right now that guarantees me at least $60,000 starting. And that's just one offer I have now. So I mean, and that's starting. So I expect it to go up from there. So you passed your CDL?

Yep. I got Class A CDL right now. Good for you. Good for you. Are you on your own, or are you living with Mom and Dad? I live with Mom and Dad right now. I just turned 19. But like I said, I'd be looking for a home in the near future.

I don't know how long or if I should start looking for retirement, what I should do with my cash I have now. Okay, good. Well, the first thing I would do is to set a date that you plan to move out and make sure that you have the cash associated with that. And I would rent for a little while. I wouldn't move out to buy today. Move out and rent for a little while and kind of get yourself established,

get used to paying bills and keeping the electric on and and kind of get kind of get yourself established get used to uh paying bills and you know keeping the electric uh on and uh that kind of stuff and if you had a roommate or didn't have a roommate whatever with an apartment or a little house of some kind just get you something to rent and uh you're going to use up a little bit of money making that transition buying some furniture that kind of stuff and um then the you want to set aside some of the money as an emergency fund and that would be three to six months of expenses so once set aside some of the money as an emergency fund, and that would be three to six months of expenses. So once you're out of the house, your rent and your other expenses, food and utilities and so forth, times three to six,

we set that aside as a rainy day fund. Then above that, I would be saving towards your down payment for now. And if you want to buy a home in the next few years, or you could just start doing 15% of your income into retirement. That's what we call baby step four. And it walks you right up that process. You're not afraid of hard work, and you're not afraid to go make some money, and you're not afraid to save some money. You've been doing some really wise things at 19 years old, sir. You are really ahead of the game.

So hold on. I'm going to send you a copy of the book, The Total Money Makeover, which is our best-selling book around here, and it shows you exactly how to do the baby steps and exactly what to do when and how to step through each of the processes towards, uh, building wealth. And you're going to be in really, really good shape. If you follow that,

uh, since you're driving a lot, if you prefer to have the audio book, just tell Kelly and she'll send you that instead of the, uh, the paper book, paperback, not paperback,

but the regular traditional hardback book, um, either way, which by the way, folks, a lot of that stuff is on sale for $10 each right now. We have a huge, massive Christmas sale going on at DaveRamsey.com. Some of the best deals of the entire year right now available on the different items out there. But for sure, a lot of the books are $10 each, and these are all books that are life-changing, every one of them.

All right, Lily is in Washington, D.C. Hey, Lily, welcome to the Dave Ramsey Show. Thank you, Dave. I'm really nervous because I have a lot of questions, and I've been listening to your radio for the last two months, and I feel like you have all the answers as far as my struggle and what I'm trying to accomplish, but I don't know how to ask questions. Okay.

Tell me what your first big thing is, and let's work on that before I run out of time. Okay. So I want to save money, but I don't know how to do that. Okay. Are you doing your written budget? Yes, I do have, you know, my own Excel spreadsheet budget on how I pay things, yes. Okay, and so jump on EveryDollar and move that spreadsheet over onto EveryDollar. It'll help you manage it on your phone or on your desktop. It is completely free to use,

EveryDollar.com. Now, once you've gotten your budget, do you have room in your budget? Yes. Okay, and so what are you doing with that money that's that there's room oh wait i'm sorry so when you say room like do i have extra money yeah um well i i put into my 401k but i i don't know what i'm investing on i have an ira i put it into that like i have you know 11 on 401k and then 8% on IRA. After you do that, is there money left over in your budget? What's that? After you do all of that, is there any money left over in your budget?

I have about like, you know, a grand or two that I build on as cash and emergency flow in my saving accounts, yeah. Gotcha, okay. Gotcha. Okay. Well, once you're doing a budget, then what we would tell you to do is to start doing what we call the baby steps. And the first goal is to save $1,000, baby step one. Your next goal, any money you can squeeze out of your budget,

should be paying off your debts, working them off smallest to largest. Once you're debt-free, then you return to that $1,000 account and raise it up to three to six months of expenses. Once you're doing that, then baby step four is you put 15% of your income away for retirement. If you have children, baby step five is to address their college, start saving for it. If not, baby step six is pay off your home early. If you haven't yet purchased a home, once you get to moving, it's one of your goals is to start saving up money to pay cash

or to pay for your down payment and get your home purchased. So, hey, good question. I appreciate you joining us. Well, Merry Christmas to you, America. This is your show. It's all about you. And you're just downright entertaining. You're downright inspiring.

We're glad you're with us. This is the Dave Ramsey Show. 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. across the country. To find one near you, head to DaveRamney.com slash show.