The Ramsey Show - App - When You Work the Plan the Right Way, It Works (Hour 3)

Episode Date: February 12, 2019

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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. Thank you for being with us. Open phones as we talk about you, your life, your money, your journey. The phone number is 888-825-5225. 888-825-5225. Joshua starts off this hour in Houstonston texas welcome to the dave ramsey show joshua hey dave thank you for taking my call sure what's up well um my wife and i are about six months from finishing up baby step two and we are trying to figure out if we have too much house okay based on what your payment um based yes sir so if we take my income alone it is around 36 percent of my monthly income take home pay yes sir after no withdrawals except

taxes out of your check yes sir okay and does she work outside the home yes sir um with her working it drops it down to only 21 okay and um so kind of our dilemma on this is we've kind of been living recently for where we live off of my income alone and hers goes completely against debt and so i'm honestly not sure if it's smart for me to keep a 30 percent um of my income going to that out of my does that make sense what i'm asking yeah but our rule of thumb is to not be more than 25 of your household take-home pay and that's your just because you're doing your budget in such a way that you're managing to free up all of her income to throw it at the debt. When the debt is gone, her income is still there. Yes, sir. And we're hoping to throw that against mortgage and against...

You're fine. I mean, you're at 21%. I mean, no, you don't have too much house. And, you know know you just walk on up your baby steps you finish getting out of debt you build your emergency fund and you um then you put 15 of your whole household income quit dividing them up into baby step four when you get there right add the two together it's 15 of your gross in that case not your not your net not your take home pay um and then when you move on to baby step six any money we can squeeze out of the budget see what's happened

here is you guys have done a great thing you've really focused you've gotten uh very dialed in and and it worked out to where you could put her income towards the debt. Okay? Yes, sir. But that led you then to separating those when, in your mind, you really should just be looking at them as one. In other words, what if you could put $50 of your income towards the debt because your budget was just stacked with both incomes? We live on as little as we can, and it happens to be that her income plus fifty dollars of yours would go you know that that amount but i wouldn't separate them anymore i would just be

running them together even while you're in baby step two and that keeps you from getting confused on this because it's our income now if she's going to quit and come home and not work anymore now we got a house payment problem. But I thought for a minute that's where you were going. But no, I mean, where you are, you're in great shape. Plow on through it, man. You're doing great. Well done.

Destiny is in Lansing, Michigan. Welcome to the Dave Ramsey Show, Destiny. Hi, Dave. I'm so glad to talk to you. You too. What's up? Well, I'm 20 years old right now, and I'm kind of an emotional wreck when it comes to my money. I have a $15,000 a year income, but I'm in $14,000 of debt. On what?

$808,000 is college, $1,250 is unemployment, $1,000 is from the IRS. And $2,800 is credit card debt. Okay. Are you working 40 hours? Yeah, I am. Really? Making $15,000? Yeah. I don't know.

Maybe I did my math wrong, but I usually get $330 each check. So I times that by four for each month, and i times it by 12 and i only got like 15 000 something is that that's your take home but that's your take home yes yes okay and you actually are getting two more checks than that so um because there's two months a year you get five checks okay okay i'm sorry but it's not like a it's not like a normal job. I work at a beauty supply, so I work like 20 hours on Friday and Saturday, so 10 hours Friday, 10 hours Saturday, 10 hours Monday. So when I did try to apply to other jobs to bring up that income, no one wants me for the little amount of time that I'm available,

so that's kind of why I'm stuck with this small amount of income. Well, or you could change jobs because this job's not that great. My mom said that. Yeah, your income sucks. Yeah. And you're basically working a minimum wage job, which is part of your problem. So, yeah, we've got to work on your career side because you're not making any money is part of the problem. I mean, if we doubled your income, all of a sudden a lot of this problem would go away,

wouldn't it? Right. I had a job actually at two temp. I worked at a temp agency and I was going to school for accounting, so I got jobs in accounting. I found that I was too incompetent to keep those high-paying jobs and I've honestly gotten fired from both of them, not because of my personality, just because I couldn't do it. So I was making a lot more and I kind of had to downgrade

because I feel like I'm not confident enough to work in a higher-paying position after those experiences. Well, I would disagree. I think if you're breathing, you're competent to work in a higher-paying position than you're in now. Now, so you were in school and you're not anymore? That was my second question. I'm trying to go back, and I want to pay out of pocket

so I can then get a better degree to get a better job in the fashion industry, but I don't know if I can afford to pay out of pocket. When did you graduate from high school, three years ago, two years ago? 2016, I graduated. What did you graduate from high school three years ago two years ago 2016 i graduated what was your uh what was your gpa in high school 3.7 so why could you not pass the accounting classes it wasn't that i did great in school i just got back from the advisors actually it's just the fact that working full-time and going to school full-time just kind of bit me in the butt, honestly. I'm very sensitive, and it kind of stressed me out, so I started working more and going to school less. Well, you're smart enough to do the accounting if it's what you want to do.

Not anymore. Why? Just because you couldn't do it because you didn't know what you were doing before? Yeah. Hurt your feelings? It made me feel like I probably should go towards something I'm more confident in, like fashion, where I know that I can do better. Okay. Well, the problem with that is the fashion career is a very difficult career to land a decent paying job in. Very, very difficult.

It's like saying, I want to be an actor. I want to be an artist. It's the same thing. That's a very subjective, tough road you're choosing there versus the accounting. I think you just stubbed your toe. I think I want to get you back on the horse and get you riding again. Hold on. I'm going to send you a copy of the book, The Total Money Makeover,

to help you with the money decisions. And then you need to make some career and life and education decisions that you pay cash for. This is The Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance, and the other doesn't.

Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things

ahead. Thanks for joining us, America. My cat is with us in San Bernardino, California. Hi, Kat. How are you? Hi, Dave. I'm good. How are you? Better than I deserve. What's up? I was wondering what your opinion is on earthquake insurance. In an area like California, I would have it. Okay.

Because you guys get earthquakes, right? Yes, we do. Okay. I mean, yeah earthquakes, right? Yes, we do. Okay. I mean, yeah, I mean, it's, I'm in Nashville, Tennessee. The chances of me having an earthquake are so small, I don't have it. But, you know, we have a pretty good track record over the past 200 years of seeing a lot of earthquakes in California. Agreed? Yes.

Then I would have earthquake insurance. And it's somewhat expensive because there's somewhat of a probability. But yes, I definitely would carry that in this situation. Sterling is in Marshall, Minnesota. Hi, Sterling. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. So the question that I have is, I'm a young farmer in Minnesota, and we are moving to my father-in-law's house out on the acreage. And we also have the opportunity to purchase 72 acres from him at $8,500 an acre. So pretty much after we buy both the house with the grain bins and shed and all the acres, we'd be looking at about $900,000 in debt to purchase that. And I'm just wondering

what your view is on farmers and going in debt is. Well, farming is a business. Yes. It is a business with a lot of soul and a business with a lot of tradition and a lot of legacy and a lot of emotion around it, but it is a business. And just because you're a farmer and you're feeding America, which we appreciate you, does not mean you are exempt from mathematics. Yeah.

You do not get a pass on math because you're a farmer. Yeah. Even though it is such an honorable profession and it's really hard work. But you don't get a pass on math. You don't get to go, well, I'm a farmer, so math doesn't count. Math counts. So you just ask me as a young man if you should go a million dollars in debt to buy a business no

yeah that's how old are you i'm thinking i'm uh 23 and my wife's 24 yeah i mean if you were going to buy any other kind of business and you were going to go a million dollars in debt to do that my answer would be exactly the same yeah instead i would say let's get some experience you probably grew up on a farm you probably are pretty good at it already at 23 i'm not doubting that a bit i think you can run the operation um so uh the house and the grain bins in the shed is one piece of property, and then the tillable acreage is another piece of property. Is that correct? Yes. Break those down for me between the $900,000.

How much is the shed and the house and the grain bins? So I'll be purchasing that for my father-in-law for $350,000. We have a $100,000 down payment. I guess it would reduce it down to roughly $800,000 overall. But $250,000 house, and you're 23 years old, and your household income is what? $88,000 a year. Okay.

After taxes. And you bought a $350,000 house. Yes. That's what we're saying. And what's that? That's what we're saying. And what's that? That's what we're saying. And then I would rent the other property from him with an option to buy it in future years after you've been running this thing for a while and you build up some cash.

Yep. Yeah, and I currently rent one farm from him. And so, you know, the plan was to take the two fields to pay for this one field and hopefully be able to make the payments and everything. But the payments would be, for 30 years, $55,000, and $25,000 of that every year would have to come out of our own pockets to make those payments. And that's over what I've been hearing.

I'm a new listener. Well, I mean, this is different. The fields are different than your home, okay? So what we're talking about here is now a guy that's going to go into a business and buy a business from his father-in-law who's willing to finance that business for him, apparently, right? Yeah. Okay. Number one, that's going to make Thanksgiving dinner taste weird because the borrower is slave to the lender,

and so you're sitting there with a guy you owe $250,000 or $800,000 to. That's just going to be weird. I don't care how sweet and great a man he is. So let's just say he owned a hardware store instead of a farm. Okay. What I would tell you to do is to run the hardware store for him, meaning like you would lease this piece of property and you'd farm it with an option to buy it as you're able to build up some cash. Okay. And let's don't go a million dollars in debt to anybody when you're 23 years old to buy a business.

Run it. Okay. Option it. Now, it's different than just leasing it. When you're leasing other people's ground, you're what? Giving them a percentage of crop, right? Yeah. Okay.

With him, you can give him a percentage of crop, but I also want you to have a written right to buy the property. That's an option for a period of years, for a period of years. In return, you're going to lease it, you're going to run the deal, and you're going to make some money, we're going to pile up some money, and then if you want to enter into this equation in three or four years or five years after having done this for a while, you'll know what your numbers are deep down in your soul, and you're going to know if you really want to be that far in.

And you can make a much wiser decision at that point. But, no, I have never told anyone to go a million dollars in debt to buy a business. I've never told anyone to go a million dollars in debt to buy $800,000 in debt to buy a business i've never told anyone to go a million dollars in debt to buy a eight hundred thousand dollars in debt to buy a business from their father-in-law and i've never told a 23 year old to do that so there you go there's about three or four things here that i'm hearing red flares go up take your time you've got plenty of it don't paint yourself in the corner tricia is in harrisburg, Pennsylvania. Hi, Tricia. Welcome to the Dave Ramsey Show. Hi. Hi, what's up?

So, I've been listening to you for about four months, like hardcore. I finished reading The Total Money Makeover about a week and a half ago, and I've been discussing the baby steps with my husband. We haven't officially started, but technically, if he agrees with me, we're going to be starting in baby step two, so we have one done. Where we're butting heads is that we have $2,400 in credit card debt. That will be a piece of cake to get taken care of. We have our other debt is a tractor loan and our mortgage. The tractor loan only has a 0% interest rate.

The mortgage is 3.5%. What do you owe on the tractor? $16,000. Okay. And you guys have no money, right? We have no money. $1,000. Oh, well, we have more than a thousand in our in our savings oh okay how much is in your savings um probably about five thousand okay

so in the scope of life you're not rich agreed no agreed okay agreed and so Agreed? No. Agreed? Okay. Agreed. And so your husband, who's a broke guy, wants to argue about this. His thing is, since the tractor is 0%, the mortgage is 3.5%, he wants to pay off the mortgage first. Who cares what his theory is? He's broke. Right. I'm being mean. Do you hear me? Listen, if you're fat, you don't criticize people's plans for being in shape.

You don't come up with your own plan for being in shape if you're fat. Agreed? Right. That's him. That's him. So this is silly. It's absolutely silly. He needs to decide if he wants to be a millionaire.

If he does, I can show him how. Get the stupid tractor paid off, not the house. Okay. Work the plan the way I teach it. It works. Thank you. Hold on. I want to send him a copy of, since I'm making fun of him, I'm going to be his friend.

I'm going to send him a copy of Everyday Millionaires because I want him to be one. So the next time he gets ready to buy a stupid tractor, he pays for it. 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. If you're someone that thinks insurance is boring and complicated, well, that's just like all of us. We all kind of think that, right? Well, we made the five-minute checkup coverage, coverage checkup for people just like you. We figured out that millionaires think long-term,

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And text CHECKUP. Text CHECKUP to 33-789. CHECKUP to 33-789. Or visit DaveRamsey.com slash CHEC checkup, and we'll help you out. Doesn't cost a thing. Steve is with us in San Antonio, Texas. Hi, Steve. Welcome to Dave Ramsey Show.

Hi, Dave. Thanks for taking my call. Sure. What's up? So I'm a federal employee, and I'm on the PSP retirement. Cool. I get the 5% match. So my question is, I'm also on a deferred retirement,

so I get mandatory retired at 57 with a pension. I'll retire at, if I do 57, I'll retire at 29 years. But you're not putting anything into that pension. Well, they take some out of your paycheck, but not a lot. But it contributes a certain percentage up to 20 years, and then from the 20 to 29 point, it's like a lower percentage. It's a mandatory withdrawal from your paycheck? Pretty much, yeah.

And how much is it? What percentage is it? You know, I don't know the whole percent. I know it's like about $100-something per pay period. And how often are you paid? I get 26 checks every two weeks. Okay. All right.

So $2,600, And what's your household income? About $150. Okay. So it's like 1.5%. Okay. Okay. So my question is, I'm currently maxed out on my TSP on the 15%. Then I still get the match as well.

So I know you recommend 15% towards retirement, but should I be factoring in the pension I'll receive? No. And should I be counting the match in the 15%? No, neither one. It's 15% of your household income going into retirement. And do you recommend I put all that into TSP, or should I give you some of that up into like a Roth or something else? Well, I'd be in the Roth TSP to start with, not the regular TSP.

And I definitely want to go up through the match anyway at 5%. But 15%, are you not limited to $19,000 a year? I am, but I mean, my household income is like $150,000. My income is like $116,000. Yeah, but I want 15% of your household going into retirement. That may be step four. Right. My wife has a separate 401K that she does on her own.

I'm just looking at from my paycheck what I should be putting in. That's not how we calculate it. We calculate it on the household income. I want 15% of your household income going into retirement somewhere now uh what percentage of your wife's paycheck is going into her retirement she's at probably uh i think she's at five percent she doesn't get a match okay so if we add up what you're putting in and what she's putting in, you're not at 15% of household income. No, yeah, that'd be at 20 then. No.

You'd be about, depending on what ratio her income is to yours, but you're going to be under 15% considerably. How much does she make? She's at about $50,000, and I'm at a little over $100,000, yeah. Okay, and so you're putting in about 11% or 12%. Okay. So if you put in the total dollars that she's putting in, the total dollars you're putting in, as a percentage of $150,000, you're going to find that to be 11% or 12%, I think. If the numbers you gave me are right.

So let's go back to that theory and then say let's do some Roth IRAs on the side in some growth stock mutual funds with a SmartVestor Pro and get the whole thing up to 15% because you're limited to $19,000, but you're not the $150,000. So you're at $100,000. So you're putting in $15,000. She's $50,000. She's putting in 5%. So she's putting in $2,500. So you're putting $17,500 in. percent so she's putting in 2500 so you're putting 17.5 in um no that's not

right yeah 17.5 in and uh you ought to be at about 22.5 okay give or take so that i did that quick in my head while we were on the air but go back and double check those numbers but i think you could probably just do another Roth IRA. She could do that in her name if she wants to. You can do it in your name. I don't care whose name it's in because you both have rights to each other's retirement morally and legally. So she's not your roommate.

She's your wife. You're not a roommate. So we're doing this together from a legal perspective, a relational perspective, and certainly a spiritual perspective. Al is in Los Angeles. Hey, Al, welcome to the Dave Ramsey Show. Thank you, Mr. Ramsey, for taking my call. I appreciate it.

Sure. What's up? I'm in the process of selling my home, and I was very happy. It sold in about four days, pending sale. And the buyer agreed to go a little bit over asking. And long story short, her bank appraiser came through and appraised it $25,000 less than she offered. And what did she offer? I was wondering.

I'm sorry. What did she offer? She offered about $385,000. Okay. And the appraiser said $360,000. And she countered at $360,000 immediately. And according to my realtor, he said, I don't have any recourse since the bank's appraiser now, I guess,

becomes a record of appraisal. So if I try to relist it, we have to, I guess, disclose what it's going for. I don't know that that's true. That was one bank appraiser. An appraisal is an opinion of value. And have you gotten any details on the appraisal itself yes i have the report i've downloaded it my realtor sent it to me all right has your realtor looked for other comps because a standard yes a standard residential appraisal is three comparable sales in the area that are

the closest in in size in attributes and in date of sale. And the average of those three adjusted for differences is how a residential appraisal is done. Do you have some real facts that you can dispute this appraisal with? I'm going to look into it. It's funny, I think my realtor is also listening to right now because i told him i'm calling you so yeah but i mean typically what i would do is and the realtor if they're experienced would know this already he doesn't need me to tell him that is i'm going to find a comp that brings this average up if that that says okay i'm going to dispute your appraisal uh appraisers aren't god okay they have an opinion and sometimes they're lazy and so sometimes a good realtor can go in and pull comps up and go look you missed three comps that

are better than the three you picked and that would have given us our number and so you need to really relook this and challenge the appraiser that they missed it and i would challenge the banker as well so i do i my question was which i asked him already is that can i even get another appraisal and his response was you can get you can you know get any appraisal you want but the bank is going to use what they paid for i believe that's true that lender that particular lender is going to go with that, and that's why I would start with seeing if you can dispute this appraisal and go back to that bank, go back to that lender. I assume there's a realtor on the other side of the transaction as well, right? Absolutely.

Let's gang up on this appraiser and this banker if you've got some actual data points that are valid now you can't just make up crap and go i'd like to get more just because she wants to give me more the other option of course is she can still buy the house she just has to give you 25 000 out of her pocket which she probably doesn't have but i mean she doesn't want to nor doesn't want to so we get another buyer i mean you sold it in 48 hours get another buyer with a different bank and a different bank a different lender a fannie mae appraisal you know can it can go and there but i would start with seeing if there's

some valid data points to dispute the appraisal with and i've done that many times in transactions because appraisals are opinions. This is the Dave Ramsey Show. our scripture of the day psalm 16 8 i've set the Lord always before me because he is at my right hand. I will not be shaken. Frederick Douglass said, if there is no struggle, there is no progress. So I was just reading my buddy on Instagram. His daughter talks him into, in a weak moment, dancing with her. And she was dancing ballet, so he dressed in a tutu to dance with his daughter,

goofing off, clowning around. She takes a video of it, and she's threatening to release the video if he doesn't buy her a truck. He got played. Oh oh i love it's the most funny thing i've read i heard i don't know when it's great oh so i answered that i would pay big money for the video i have a use for it oh man how. What a great kid. How smart. Brilliant little blackmailer. Caleb is with us.

Caleb is in Lancaster, Pennsylvania. I almost said it right. Hey, Caleb, how are you? I'm doing better than I deserve, Dave. How are you? Better than I deserve. When I was up there speaking the other day, they were trying to teach me to say Lancaster instead of Lancaster, right?

Oh, everybody, yeah. Where were you? Ah, LCBC Church. Oh, great place there. Yeah, they're wonderful. They're doing financial peace through their whole church, and I was up there speaking a couple weeks back early in January. How can I help today? Very cool. Hey, so I'm actually just calling.

I'm 23, and my wife is 22. We've been married for about a year now and have a little more than a year, and we have a two-month-old. Yay. Yeah, so I'm just calling to see if we're getting our tax refund back in soon. I'm currently borrowing a car because my head gasket blew on my Jeep. She's got a 2004 Pilot with a little over 200,000 miles on it. So not the greatest shape, but we'll probably still keep going. We're just wondering, the tax refund's probably going to be between three grand and 3,500. We're on baby step two. Got $1,600 in credit card debt and $41,000 in student loans.

Mm-hmm. Household income? And it's $37,000 for me. Household is about $50,000. Good. Okay. You going to buy a car with a tax return? That's what I'm hoping.

I mean, I'd love to pay off the credit card and buy the car with it, too. Yeah, I would buy a car with it. And then your Jeep's going to sell for something, even with a blown head gasket, right? Yeah, probably like $500, maybe $1,000 if I'm lucky. Yeah, just get what you can get out of it and throw that at your debt snowball. But buy you about a $3,000 car or so. And then make sure that your withholding is adjusted so that you no longer get a tax refund. Yeah, yeah, I was definitely looking at that. That no longer get a tax refund. Yeah.

Yeah, I was definitely looking at that. It would be much better spent otherwise. Yeah, exactly. Because it's about $300 a month. You've got too much coming out going into, because that's $3,600, 300 times 12, right? Yeah. And you've got too much coming out of your check, and then they just give it back to you in April with no interest.

Yeah. I'd rather be paying off debt with that. There you go. That's the thing. So let's get that adjusted, get the Jeep sold. And, yeah, I don't think this is going to set you back big time. Now, if you told me your tax return was $12,000 or you had a source of income or something that was $12,000 sudden income,

I'd probably dial you down to about a $3,000 car, throw the rest of the debt. But $3,000 car, you're 23, you've got a baby, you've got the other cars limping already. So, yeah, let's get a couple cars here, or get that car going, and then let's plow the way through this debt as fast as we can. Okay. Hey, thank you so much, Dave. You're doing good, man. I'm proud of you.

You've got this. You're thinking, you're a good dad, good husband. Things are going in the right direction for you, brother. is in charlotte north carolina hi renee how are you hi i'm good dave how are you better than i deserve what's up okay i'm gonna try to make this quick okay so um i got married last year in june i'm currently pregnant, and I have $200,000 worth of debt. So currently we pay $800 in credit card payments. And then we were trying to figure out, that's one of our biggest expenses, excluding rent. So we were trying to figure out if we should do a debt consolidation because the interest rate is 24%. And also we wanted to sell one of our cars, but the car is worth 10K.

We owe about 21K. So we weren't sure what we needed. How did you get $11,000 upside down on a car? I don't know. Did you roll negative equity into that deal when you traded it? We bought it new in 2016. What makes you think it's worth only 10 um the kelly blue um value and then we went to like an infinity card okay you were looking at wholesale prices not retail so that car if you sold it on craigslist is worth more than that

you need to look up private sale on kelly blue hook it's worth more than 10 grand the car did not lose half its value that fast okay i hope um okay so two hundred thousand dollars in debt how much of that is student loans 110 and they're currently on forbearance right now right and what's your household income 145 000 what do y'all do for a living? I'm an accountant. He works in IT. Good. Okay. And how long have you guys been out of school? Since 2011. Okay. All right. Cool. And how much credit card debt is there? Altogether, $41,000. Okay. And so that's $150,000. The other 50 cars? So $44,000 car loan, $41,000 credit cards, $17,000 personal loans, and $110,000 in student loans. Okay.

So we talked about one car that was $24,000. So you have another one that's $20,000. What's it worth? My car. We didn't think about selling my car. What's it worth? I haven't even looked at the value. It's a 2016 Sonata.

Okay, so you went crazy in 2016, didn't you? Yeah. Both of them are new at that time. Yeah, that's a fourth of your debt. So you're wanting the debt to consolidate the credit cards. Yes, it's $800 a month that we pay minimum payment. Okay. It doesn't hurt anything, but it doesn't solve your problem.

Okay? Okay. Interest rate on $40,000 out of $200,000 is not your problem. If we save you 10% in interest rate, that only is $4,000. $4,000 doesn't solve a $200,000 problem. Yeah. Selling these cars and getting you a couple of beaters and rolling up your sleeves with your $145,000 income,

doing anything you can to get your income up, and you don't need to see the inside of a restaurant again unless you're working there. And no vacations and scorched earth, beans and rice, rice and beans. Have you cut up your credit cards yet? I haven't because I'm pregnant, so I thought I may need it for medical expenses. No, you're not going to get out of debt. Okay. You're going to struggle and go bankrupt if you don't stop this.

See, as soon as you start thinking, I might have a need, you know what you did? You ran straight back to the credit cards. See, that's a bigger discussion. That's a much more important part of this discussion than your interest rate on your debt consolidation. You cannot consolidate your way out of debt. You have to stop borrowing money, kiddo. Period. Forever.

Okay. You have made a mess. You have borrowed money until you can't breathe. You guys are borrowing money like you're in Congress. So if you're ready to stop and you want to change your family tree for this baby, I'll help you. It's called Financial Peace University, and I'll pay for it. But you guys need to go to that class and learn how to do this stuff, and then you need to actually do it.

You need to get out the scissors and cut up the credit cards. You need to get the every dollar budget out and really tighten down here and say we have made a mess and we are going to change. We are not buying anything ever again the rest of our lives on credit. You are $200,000 in debt. You're on the verge of bankruptcy. You have got to stop it. I'll help you.

I'll walk with you. You hold on. I'll have Kelly pick up. We'll get you signed up for financial peace. But you go to those classes and learn how to do this stuff. And if you want some more help, you call me back. I'll always tell you the truth because I care about you and I want you to win. That puts this hour of the Dave Ramsey Show in the books.

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 guys, it's Blake Thompson, Senior Executive Producer for The Dave Ramsey Show. This hour's over, but you can find more great content

on our YouTube channel. Catch the most watched Dave Rants, debt-free streams, and the very popular Everyday Millionaire segment. Go to the Dave Ramsey Show YouTube channel and click subscribe.