The Ramsey Show - App - Why PMI (Private Mortgage Insurance) Doesn't Protect You (Hour 3)

Episode Date: June 25, 2019

Get Started on Your Debt-Free Journey We’ve made it even easier to get started taking control of your money.  Learn How! How Fast Can You Be Debt-Free? You don’t have to be in debt for the rest of your life! Answer 5 simple questions and our Debt Calculator will show you how quickly you could be out debt!   Get the Complete Guide to Budgeting. Budgeting is often misunderstood and overcomplicated. It doesn't have to be! We made it simple. After 90 days of budgeting with EveryDollar, 9 out of 10 users feel more confident in their financial future. Get the Complete Guide to Budgeting.   Get the Coverage You Need. How does your coverage stack up? This Coverage Checkup will show you what you need (and don’t need), which questions to ask, and where to get the best coverage.   Find the Right Financial Advisor. Finding the right financial advisor doesn't have to be complicated. Our free guide makes it easy to know what questions to ask so you can make a confident choice. Get the guide!    Listen and Watch Anytime, Anywhere.   The Dave Ramsey Show app lets you download episodes for offline playback, customize your content, and see what’s coming up!

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Sitting in for Dave, I'm Chris Hogan, and I'm joined in studio this hour with national best-selling author and team and millennial expert, Anthony O'Neill. Mr. O'Neill, how are you, sir? Chris Hogan, I'm doing well, man. It's such an honor to be in the studio with you, man. I'm excited for this.

You know, we've done this a couple of times in America. We are here for you. And I know you've got questions about money, so guess what? Reach out and call us. The number to call is 888-825-5225. Again, that's 888-825-5225. Or you that's 888-825-5225. Or you can send us your question via social media at Ramsey Show. All right, Anthony, you ready?

I'm ready, man. We got things to do. We got people to help. We're going to the phone lines. And we've got Tyler in Salem, Oregon. Tyler, how are you? I'm doing good. How are you, sir?

Oh, I'm focused and not finished, my friend. What's on your mind today? So I've got a little opportunity. I've got my, I'm focused and not finished, my friend. What's on your mind today? So I've got a little opportunity. I'm on baby step two. I've got my $1,000 of savings. I recently got a little bonus of about $1,500 that I'm trying to decide whether or not I should put it towards my mortgage to pay off my escrow shortfall and my remaining balance to get my private mortgage insurance dropped off my loan. Okay. Or if I should use it just on my debt. All right.

Wow. All right. I like how you're thinking. Tyler, how old are you? I am 34. 34 years old. Talk to me. What's your household income?

$80,000. $80,000. $80,000. And tell me what debt do you have? You say you're on Baby Step 2. What do you owe on? So I've got a $1,000. $80,000. And tell me what debt do you have? You say you're on Baby Step 2. What do you owe on? So I've got a $1,500 medical bill. I've got a single credit card at $5,000 and a couple of cars at $4,500 and $8,100.

Okay. So the two... And then the... Go ahead. Go ahead. Go ahead. I was just going to say my private mortgage insurance, like I said, is about $1,000 to drop that, and that's $141 a month savings. And then the escrow deficiency is $550, and that would save me $78 a month.

Okay. Now, the escrow deficiency, is that because your property taxes went up? Yes, it is. They passed some wonderful new laws that I disagreed with. Okay, well, I understand. Don't get me started on that. That was like a softball pitch. I'm not even going to take that bait.

But listen, what you do want to do, number one, is we've got to make sure we're taking care of your homestead, where you're living. So the escrow, you've got to get that taken care of first and foremost. I like that you're thinking about the private mortgage insurance, but the bottom line is, here's a couple other things that they won't tell you. In order for that to be dropped, you're going to have to get an appraisal done, which can run from $500 to $800. And so the bottom line is that can fall off once you have 20% equity inside of the home. So I want you to stay focused on the debt snowball, which is we're going to attack these things smallest to biggest and really be able to stay focused based on your income.

Again, you got seems like you got car itis. So don't buy any more vehicles. The next car you need to buy needs to be like a matchbox size, right? You can roll it across the table. Let's pay these things off. Get this credit card, then the medical bills and things out of your life. Then you can turn your attention to building up your fully funded emergency fund of three to six months of expenses. Because Anthony, it's imperative. You're a homeowner, you know, things happen. Things do happen. And I would prefer him to be out of debt,

not worrying about paying off his PMI and his escrow. I want him to focus, like you said, Hogan, on getting debt free, having that financial freedom. So that way, if something does happen when you have a home, because I just purchased a home, Hogan, and already every time I walk into Lowe's, I'm thinking I'm going to spend $20, end up spending $100. Right. And so I want him to be prepared for it. So I agree with you on that one.

Yeah, it's important. Now, the escrow needs to be handled because that's your taxes. The last thing you want to do is to have your house be kind of in lieu. So let's get that handled. And then they need to make sure they adjust your payment moving forward. So you're paying the right thing. Now, America, for those of you out there, you hear PMI and you think, Hogan, what is that? Well, it's private mortgage insurance. PMI, private mortgage insurance protects the bank, not you. Okay. So it protects the bank from you defaulting. It doesn't do you any kind of service. It doesn't do your family any good. It's purely an extra 150 to almost $300 a month. If you have a mortgage, that's over 80% loan to value. Now you

say that and you go, well, hold on. It's based on how much you put down or how much equity is built up in your home. So if you've been in your home and you did a 30-year mortgage, remember you want to refinance down to a 15, but you want to be aware of this. So take a look, contact your mortgage holder, figure out where you are loan to value. And oftentimes, you know, the Anthony, the bank's not going to call you and tell you that you can drop this. It's something you have to keep your hand on the pulse of and know exactly what's going on.

Okay. All right, dude, we're on a roll here. All right, let's go on the phone. We got Aaron on the line in Denver, Colorado. Aaron, how can I help you? Yes, sir. I am focused and not finished. I don't know what to do.

Well, oh, that's a VIP right there. You listen to the Chris Hogan Show. I like you already. How can I help you? Yes, sir. I want to get right to the point. 28 years old, just got married about a year ago. I moved from Kansas to Denver, sir. I want to get right to the point. I'm 28 years old. Just got married about a year ago. I moved from Longstown, Kansas to Denver, Colorado.

I actually built a house to get out of the craziness that is the Denver market. I have some lofty goals in life, and I've kind of laid out things. I know you want to talk about HD vision and revision at some point. First, I'm a McLaren 570S, so roughly $150,000 per year. Currently, we have about $20,000 in debt on my wife's existing automobile. That should be paid off at least by the end of this year, if not in the next couple months. I made a new position at work,

so income went from roughly $120,000 a household to about $300,000 a household. Okay. And you told me you're 28 years old? 28, yes. 28, okay. And what do you all owe on right now? My wife's going to earn about $20,000. Like I said, we should have that paid off probably in the next couple of months.

I'll pay about $5,000 a month towards that car. Okay. And then on the house, we owe about $340,000, I believe. So long-term plan for that is, you know, at least have it paid off within the next two, if not three years. Okay. So you have lofty goals to get this McLaren, whatever you called it. I don't know about all the letters. I think it's in the letters, yeah.

Yeah, okay. And what's your time frame for buying this car? Well, actually, that's really my question is, you know, what financial situation should I be in before I make the investment? Obviously, I'd want to pay cash for the car, but I know that the goal is not to just save up the $150,000 right after we become debt-free and then pay it towards that car. I'd like to, you know, start to identify additional money towards income, keep giving and donating to other causes.

I just want to figure out what the right balance is to be able to afford that car comfortably and not go out for money. Okay. All right. So, number one, goals are good. Goals are important. They help us aim our effort, help us to understand exactly what it is we're trying to chase down and why it's important. But you hit the nail on the head. Obviously, you've got to be able to have cash to be able to buy this car.

But there's a few other things that I want you to do outside of that. You're right. You're going to follow the baby steps because that recipe leads to progress. So it is get yourself out of debt. You want to build up a three- to six-month emergency fund. Start investing 15%. And then you can start to save up for that. With your income in this range i don't see the

issue of putting a line item in the budget and putting some money aside but i'm not going to do that to forsake my future yeah 28 years old i'm focused on building building a solid uh plan a solid foundation for my future i'm not worried about buying a three hundred thousand dollar car right now no yeah not at all i mean that's just that's that's boy that's a lot of car right now. No. Yeah, not at all. I mean, that's just, boy, that's a lot of car right there. It should cook a meal or do something outside or just ride. I can live in it. Alright, Lay, listen. You're listening to 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. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave.

And I'm joined in studio with Anthony O'Neill, national bestselling author and teen and millennial expert. And we are taking your calls about life as well as money. So if you've got a money question or something you want to talk about, I want you to call us. The number to call is 888-825-5225. Again, that's 888-825-5225. Again, that's 888-825-5225. Or you can find us on social media at Ramsey Show. Okay, I'm back on the lines here. I've got Dylan on the line in Houston, Texas.

Dylan, how can we help you? Yes, sir. I was calling. I'm in a similar boat as the caller before me, but a little different. I'm wanting to buy a boat. It's a Ski Nautique. I don't know if you know what those are, but they're talking about $100,000. And I have no debt to speak of.

I was fortunate and inherited some money when my grandfather died. My wife, her only apprehension to it is how it will look at our church. We've got a pretty small church, and where I live, there's not a lot of money. And so, you know, you don't want to look flashy or anything. I completely understand that. But the moral argument of it, I guess, is how much is too much? And we give. You know, we do more than our part there.

And household income, I work for an energy company. I make $135,000 a year. And then whenever my grandfather passed away and left me my inheritance, I had some good mentors, and they told me to invest it into commercial real estate property, which I did. And so that brings in, I've got the numbers here, $176,000 a year before taxes and insurance and stuff. So I'm sitting at about $17,000 a month, and I have the cash to pay for the boat. You know, I feel like I'm in pretty good shape.

I'm 25 years old. Just want to know if it's something that I should do or if it's something I should maybe listen to my wife a little more on and hold off and wait a while, not to be too showy or anything. But it's something that I want, and it's, you know, I feel like I can splurge on it. It won't affect us in any way. I mean, the money coming out of the account will sting a little bit, but as far as living day-to-day, it's no big deal. Okay.

Anthony? Yeah. Dylan, man, I definitely want to start off here, Hogan, saying, man, congrats. At 25 years old, you've made some quality decisions that is impacting your present, and you're going to be in love with it in the future. So I definitely want to start there. and this is what i want to say i believe that communication between you and your wife is more important the healthiness between you and your wife being on the same page is more important than having a boat and so if your wife is saying you know so if your wife is saying hey bae let's get the, but let's wait a couple more years to get that because I have a concern about what the church, what the people will say.

You know, I have two things about that. I really don't care what others say about me if I do it right. But at the same time, I want to be also in a good perspective and a good, healthy relationship with my wife. And so I would just sit down and have a conversation with her. And then she still says, I really don't feel comfortable with it. I'm a big advocate, Hogan, of if my wife is not feeling it just yet, maybe I need to just wait a little bit longer. And we both come to the grants. All right, if I wait, is that a year? Is that two years?

Cool. Then when that time comes, all right, you gave me two years. I've been patient. The bills are paid. I'm going to get this boat. But that's what I would do if I was in your shoes. Dylan, how long have you been married? Three years.

Three years. Okay. And what would you say your net worth is right now? You know, I mean, this is not self-made. I mean, I inherited a million three. Okay. And at the time that I was 18, whenever I inherited it, and so I was not able, you know, my mentor, my parents, surviving grandmother, and other people, they said, you know, you

don't need access to that right now. Go to college and get you a job. Right. Put it in real estate, and you do, you know, property manager handles it. It's something you'll never worry about. Right. You'll just always get a check every month. Right. So, you know, I don't try to It's something you'll never worry about. You'll just always get a check every month. Right.

So, you know, I don't try to get too hung up in net worth and all this. I know I pay a lot in taxes, and that's about all there is to it. You know, we live in a $200,000 house. Cars are paid for. They were new when we bought them. I know it goes against what Dave says. Right. Is the house paid for?

It's paid for, yes. And the cars are paid for? Completely paid for. They're not nice cars. I mean, I drive a pretty generic truck, and my wife drives a Grand Cherokee. Dylan, listen to me. It's time to go get the boat. Okay?

Yeah, that's what I was thinking. Yes, get the boat. Okay? Now, here's the deal. You need to sit down. You and your wife talk about it. Yeah. But if the primary kind of pushback is worried about what people are thinking, number one, you're not driving the boat to church.

Okay? That's right. Right. Yeah. No, you're not doing it. And you don't need to tell everybody about it. You don't need to post about it on social media. It's for you and your family and your close friends.

So I'm here to tell you, you've worked hard. You've been focused. You were left some money. The family's in a good position. You're an everyday millionaire, it's time to get the boat. So sit down, you and your wife can talk about it. But again, if the hang-up is worried about what other people are thinking, I don't have time for that. I'm not worried about that.

The bottom line is, you're doing a lot of giving, you're being intentional, your family is doing well financially, it's okay to enjoy. And people that get that confused frustrate me. Because the bottom line, if you work hard and you're doing things the right way, there's nothing wrong with having some fun. So there it is. Get the boat. Get the boat. I mean, hey, I mean, the wife is saying this.

That's a good one. Look at you. Anthony is nervous. I'm making him sweat over there. I'm not sweating. But answer this question. I mean, if the wife is nervous right how do you explain that to the wife right well we're going to have a conversation we're talking about it but i think clearly understanding what the hang up is if the hang up because it can't be financial it can't be they got 1.5 as a net worth right and

they got this money stream coming in from an investment right so if the it's not a financial decision now this is worrying about what other people think we need to drill into that we need to talk about it and you know from there it's a matter of it needs to be a family decision i'm just saying it's there it's there and it's something that can be done and again the the beauty of it the positive side pete served some friends from the church and in the neighborhood that could come out on the boat. How many kids could have fun getting pulled around on the little inner tube thingy they have out there that you ride? Hey, get the boat. Listen, you made a good point, though.

And America, I hope you all listen to what Hogan said. This is not for social media. You're not driving to the church. So when you buy something nice, don't post it. And it keeps a lot of people away from you a lot of people out of your business so i agree have the conversation get the wife on board go by the boat um but uh just don't post it man yeah no there's no reason to be flashy about it but you definitely can enjoy it and i don't think there's anything wrong with that okay anthony i've

got a social media question for you okay uh this comes in from cory from youtube says what websites do you recommend for a high school student to search for scholarships the number one website out right now it's a great question um is my scholarly my scholarly.com and chegg.com my scholarly which i love about it hogan is for any any parent listening listening right now and actually for anyone who's in college right now whether you're a teenager a millennial or an adult, my scholarly is just the leading expert in that right now. Now, this fall, I'm working on something to come out with my own situation. I'm just giving you a little plug right now. But every Monday, my scholar is going to send you an updated list of every single scholarship that you qualify for. And so what I recommend to everyone who's in

school right now who wants to go to school, when you get that email on Monday, to go ahead and fill out all those applications. Because next Monday, you're going to get a brand new list of emails that is available scholarships, scholarships that are available for you. So MyScholarly is the best one, MyScholarly.com. There is a free version, but I always recommend paying the $2.99 one, which is every single month. Very good. So an opportunity out there. And as we well know, you know, we definitely have a student loan crisis going on right there. And here coming up shortly, Anthony and I are going to talk about this.

And he's got some information from an article that was recently that came out today, which is just mind boggling and shocking. But we'll come to that after the break. But here I want you all to know that Anthony and I will be doing financial peace alive this fall. We will be in Austin, Texas on September 12th at Hill Country Bible Church on September 12th. Then we'll be in Orlando, Florida on September 28th at Calvary Orlando.

And Dave actually will be there as we're working on some things. And then we'll be in Seattle, Washington on October 2nd at Champion Center. And then also in Phoenix, Arizona and on October 10th at Central Christian Church. So we're going to be out talking to people about the process, walking them through the baby steps. I want to encourage you to come out and see us. Anthony and I have fun at these events. If you think I'm talking about a boring financial conference, you better change the channel. That's not the case. We're going to get real. We're going to tell you the truth. We're going to tell stories on ourself about how we've made

mistakes because A.O.'s messed up with money. I've messed up with money, but guess what? We fixed it because it's fixable. You're listening to The Dave Ramsey Show. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave Ramsey, and I'm joined in studio with Anthony O'Neill, national bestselling author. And I forgot to mention that not only do Anthony and I have these Financial Peace Live events, but there's also a SMART conference that's happening in Sacramento. It's going to be on November 16th in Sacramento, California. And that SMART conference, you're going to learn a lot and be inspired by a lot of leading experts in the area of money, marriage, parenting, career, leadership, and so much more.

And so I'll be there. Anthony will be there. Ken Coleman, John O'Leary, Dr. Les Parrott, and Dr. Meg Meeker. This is one of our largest events that we do each and every year. It is absolutely fantastic and action-packed, Anthony. This is a lot of fun. Oh, it's a lot of fun oh it's a lot of fun okay can you imagine uh 10 000 people later this fall in one big arena all coming to learn how to be smarter in the areas of their

finances parenting yes um careers i mean just it's it's impactful i mean even when you're up talking about how to become an everyday millionaire i'm personally down there taking notes because you're always dropping new nuggets when ken is up there talking about how to you know get get advanced and get further in your career i'm learning nuggets to learn how to get better so it's not just a place to come and just sit down and choose one every speaker even christy wright talking i mean well she won't be there this fall but i mean just everyone that's hitting the stage i've always learned something from everyone i agree and and you right. When one of us is not out there speaking, we're in the audience watching. Yes. And it's so much fun. It is a full day. And again,

if you're out there and you've never seen the Smart Conference Live, I want you to come check it out. I guarantee you, you're going to have a blast, but you're going to learn a lot. And it's something for anyone from 18 to age 80, because there's an opportunity to be able to learn. It's very, very valuable. So, wanted to let you know about that. Put that on your calendar. Again, November 16th in Sacramento, California. You can get more information or reserve your spot today by going to DaveRamsey.com or by calling 888-22-PEACE.

All right, we've got to get back to the phones. We have a caller on the line, Amanda, calling from L.A. Amanda, how are you? Hi, doing well. How are you doing? Oh, I'm doing fantastic. How can we help you? So I own a business, and I am on this debt-free journey.

We actually took financial peace back in January, so we're doing the debt snowball right now. My question is, should I tackle our debt separately or combine business and personal? We have an S-corp if that makes a difference. So all of our income for the business flows through us tax-wise. Okay. So tell me this, how long have you owned the business? Four years now. Okay. And are you enjoying it? We are. That is fantastic. You say we. Are you and your husband doing this thing together? That's correct.

Okay. All right. So you're both in the business. Talk to me about the personal debt that you owe. It's just a car at $55,000. Okay. $55,000? What are you driving?

The husband's car. He's driving a Cadillac. Oh, is he? You threw him under the bus real quick. I's driving Cadillac. Oh, is he? You threw him under the bus real quick. I sure did. You did. You're like, that's his.

That's not mine, Chris. It's his. It was a joint decision. Okay, see, you're trying to make it better now. Okay, what's the payment on this thing? Payment is about $1,000. Goodness gracious. Okay, all right. And that's the only thing you all owe on personally that is it okay aside from the mortgage okay and how much do you

owe on the house uh the house we owe 400 000 the business pays for that though okay what's the payment on that it's only 1500 okay all right now talk to me about the business debt. We've got $18,000 in startup costs for the business. All of that, all the credit cards on that are 0% interest right now for the next year. So I have payments set up to pay it off within that timeframe. If that makes a difference, I'm not sure. Amanda, have you listened to the dave ramsay show very long yes we know all right you knew don't tell me about a zero percent interest rate okay okay that's still not good so you guys owe 18 000 in credit cards what else in the business

it's the mortgage um within the mortgage there is a construction loan so mortgage and construction loan together is 672,000 okay all right uh all right and what else that's it okay and what kind of income are you guys bringing in from this business so i have it separated out um the business pays us a salary. And then my husband also works a side job. So total income personal is $9,000 a month. Business, after all expenses, is bringing in anywhere from $3,000 to $6,000 or $7,000 a month. Okay. All right. So you all combined are bringing in a salary of $9,000 a month? That's just personal. Okay. On the personal side. I got you. And what's the business top line? What's it doing? Revenue-wise? Revenue-wise, our gross income on a monthly basis is anywhere from $36,000 to $40,000. Okay. And is it just the two of you, or how many employees do you all have?

No, we have three employees. Okay. All right. So looking at this, you've got obviously the construction loan of $270,000, $18,000 in startup. You've got the $55,000 vehicle as well as the mortgage. You know, looking at this, are you guys committed to getting out of debt, or are you happy with where you are? The construction loan is $49,000.

Okay, just $49,000. Okay. So are you all committed to getting out of debt? Yes, we are. Why? Why? Because I would like to see more income that the business is bringing in. We're making monthly payments on debt of about $2,000, not including the mortgage.

Right. And do you all have kids? We do. We have two young ones. How old are they? Two and four. I bet you, Amanda, you've got some dreams for them little ones, don't you? Oh, absolutely.

You've got things you want to do. And I'm going to tell you, you've got some dreams for them little ones, don't you? Oh, absolutely. You've got things you want to do. And I'm going to tell you, you're right, because if you all get focused based on your income and you attack this debt, and again, debt snowball, we're listening to the smallest to biggest. With your business and the way you all have it designed, you've got a personal guarantee on that anyway. So it's something that you're responsible for. So let's get focused. Attack this debt. Get it out of your life yeah and i think what you're saying right there hogan is very key that i hope everyone in america is listening to is that i want you to line up all of your debts smallest

to largest so you're going to incorporate that into your debt snowball you can get out of it and i tell this to young people don't be in a rush to get to a business i enjoy the fact that you want to have your own business but but do not tack on the debt. And who cares if you have a credit card with 0% interest rate? You're still in debt. So we're going to line everything up from smallest to largest, and we're going to pay it off. And we're going to go after it focused because we want a better future. Yeah, no, it's really important.

And Amanda, I'm going to tell you this. I'm proud of you and your husband for doing this. You all are at least paying yourself out of the business. Yes. So many people out there only have the one bucket and they have the money all going there and then they never get a payment. They're never paying themselves a salary. So I love that you all are doing that. But get focused. You know, you guys can have a game changing moment by attacking this debt, getting it out of your life. And then guess what? When you get out of debt, you keep more of your money. You give yourself a raise, right? You don't have to work harder. We just got to get smarter and it will require hard work and some sacrifice to attack the debt. So make sure you attack it, get out there, get after it, get you and your husband

on the same page. And I'm telling you, you all can do this based on your income. I'm going to say, wow, you could be at everything but the home. Oh, 16-month stops. I mean, that's if you just shut down and really, really get hyper-focused. You can do this. By the way, America, I want to let you know that Anthony and I travel around along with the other personalities. We do outside speaking engagements at company events as well as at church events. And so if that's something you're interested in learning about, go to DaveRamsey.com slash speakers,

and you can find out information about Rachel, Christy, myself, Anthony, Ken. And if you have an event coming up or you know about a company that's doing something, reach out. You can talk, get more information online, and find out more about how to bring us to your local area. People, they're surprised to know this, but we travel a lot throughout the year. Yeah, we travel a lot. I just got back from on the road, going back out next week to Dallas, Texas, to talk to a very nice corporation. Very good.

So, if you're interested, reach out, get more information. Like I said, go on to DaveRamsey.com slash speakers. We'd love to come into an area near you. This is the Dave Ramsey Show. Dave Ramsey Show. hello america you are listening to the dave ramsey show i'm chris hogan filling in for dave and i'm joined in studio by national best-selling author anthony o'neill and we are taking your calls about money so if you've got a question we want to hear from you the number to call is triple eight eight two five five two two five again that's eight eight eight eight two five

five two two five all right i'm going to the phone we got a special guest on the line kellen 825-5225. Again, that's 888-825-5225. All right, I'm going to the phone. We've got a special guest on the line. Kellen in Portland, Oregon. How can we help you? Hi. Thanks for taking my call, Chris. Yes, buddy.

How can I help you? Well, I'm 13 years old, and I've been doing a lot of work around the house and yard work and stuff, and so I now have like five to six hundred dollars and i don't know what i should do with it i absolutely love this how old are you i'm 13 years old 13 years old how long have you been saving to get that kind of money saved up uh for like four years now four years and so is this from holidays and birthdays and everything? Yeah, pretty much. I mean, are you spending any of it?

I'm spending a little bit here and there. Okay, you are very focused. Who taught you about money? My parents. They listen to your show and the Dave Ramsey show, too. I absolutely like this. All right, Anthony, you're in here talking to a 13-year-old that's a saver. What should they do with the money?

Kellen, I'm just excited. Kellen, what grade are you in? I'm going into eighth grade. The eighth grade. Listen, America, this is a champ on the phone. Absolutely. I'm loving it. So, Kellen, talk to me about some of your dreams.

What do you really want to ultimately do? Do you want to go to college one day? Do you want to buy a car whenever your parents allow you to? Like,

what do you really want to do with this money? Um, well, like both of you said, I want to save up for a car

and my parents said that they would pay for some of my college. So, that means that I have to save up for some of my college too. Yeah, that's good. You know, Kellan, I like this.

So this is what I want you to do. I want you to save up to about $2,000, right? So when you turn 16 years old and whenever your parents allow you to buy a car, I want you to tell your mom and dad, hey, I only need a little bit of help with my car. I'm going to buy the majority of my car. I want you to tell your mom and dad, hey, I only need a little bit of help with my car. I'm going to buy the majority of my car. But you know what? And also have a conversation with them and tell them, hey, how much should I save for my college experience? And what I want you to do is every single week, every time you can work and save, I want you to work towards that goal. Because watch this, Kellan, the average person doesn't even have $500 in their bank account.

And you're already ahead of half of America right now. And so you're already ahead of some, some of your parents, friends, some of your friends, parents, because you are focused and because you are saved. But let me ask you this question.

Kellen, one last question. Do you desire to have a business? Do you want to cut grass while you're in school? Like, what do you like to Do you desire to have a business? Do you want to cut grass while you're in school? What do you like to do when it comes to a business? Well, I've been talking with my parents a lot about

putting together a little dog walking business and making business cards and flyers. Yes. So, Kelly, this is what I'm going to do. I wrote this, I did this product called Teen Entrepreneur Toolbox. I want you to stay on the line, andlly's going to send this to you because i'm going to show you and i'm going to walk you through all the steps on how to start this dog walking business and i have interviewed several students who are walking dogs hogan and they're making on the

average summer about fifteen hundred dollars wow so this young man could really make a lot of money so after you talk to him hogan encourage him more, I want you to stay on the phone. Kelly's going to give you this product for free. Then also, because I like you and you're thinking ahead of the game, I'm also going to send you the Graduate Survival Guide, five mistakes you can't afford to make in college, because I like the way you're thinking, and I want to help you move forward. But keep up the good work, Kelly. Absolutely. I'm very proud of you.

Hey, how are you saving this money? Is it in cash at the house or do you have it in a bank account? I have it in my parents' safe at my house. Okay. Well, that's super safe right there. I am very proud of you. Ain't nobody messing with that money, I want to tell you. That's right.

Well, great job, Kellen. Seriously. You being focused and setting that kind of goal and having that habit early, it's going to set you up for success. And there's nothing wrong with doing some things and enjoying some, but I like the habit of saving that you have. And so having that money there, maybe talk with your parents about opening up a savings account in your name along.

We'll have to have one of them on there with you because you're under 18, but you can get that statement each month and kind of watch it grow as it's gaining interest. Very proud of you. Keep up the good work. All right, America, going back on the line. I got Maria on the line from Michigan. Maria, how can we help you? Okay, Maria said, no, thank you.

So I don't know what happened. We'll see if we can get her back here on the line. What's going on. But, Anthony, what I like about the young person saving is that it starts to change how they look at money. Yes. Right? Yes. And I like how you threw the seed out there to the 13-year-old, do you want to have a car one day? Yeah.

Well, of course. Right? But what you just did was you helped that young person start to realize this money that's saved can become something that matters to me later you know hogan this is what i asked him that question because you got to have the ultimate vision and i always work backwards you have a vision then you have goals that get you to that vision vision then you have habits he already has a good habit he is saving yes and he's saving because he has a goal one day to pay cash for a car he has a goal one day to go to college and be debt free and go through it throughout the entire process.

And so one thing I was asking him, I'm like, look at the big vision and set some goals to get to that vision and have some habits to get to those goals. And so I'm telling you, man, I get excited. But America, I want you to hear me. It starts with the parents. Yes. It starts with you, the parent. He said, I'm successful and I'm learning this from my mom and dad, not from school, not from church, not from TV, not from music, but from my parents.

If our future is going to change, the parents have to lead that charge. No, I agree with you. And it's interesting you bring that up because in my book, Everyday Millionaires, 80% of the millionaires said they learned about money from their parents. That's it. And so it's an opportunity to pass this on to help young people understand how does this stuff work. And so remember, America, having one conversation is called an introduction. Sitting down and working with them is where they begin to learn.

Okay, I think I got Maria back on the line. Maria, are you there? Hi, sir. Yeah, sorry. No, you're fine. How Maria, are you there? Hi, sir. Yeah, sorry. No, you're fine. How can we help you today? Hi. So I am completely new to the Dave Ramsey program, completely new.

And I actually, you know, a coworker told me about the program, but pretty much what's going on is I'm starting off in the divorce process, and I recently took out a car, which is pretty dumb, and right now I'm currently owing $14,033 on it, and currently salary-wise, I moved up to at least $35,000. Okay. I'm kind of in the pickle right now, and I'm basically just trying to learn how to get out of it because right now i'm just debt and debt and debt and then trying to pay an attorney as well it's creating more and more debt no you got a lot going on outside of the car do you owe on anything else

maria yes sir um took out a personal loan trying to pay off some of business attorney, credit cards, just everything. Okay. I'm normal. Well, and the bottom line is, is that you got started. That's what I like. Anthony, what would you tell Maria? Yeah, Maria, do you have like a ballpark of where you're at with your debt, just a ballpark number?

Yeah. I put it all together. I'm totally right now at $21,382.54 of debt, including the car. Okay. Okay. And so you see that. That's a lot. And what I want you to understand, Maria, is that you can fix this.

Yeah. Right? You really can. And I want you to stay on the line, because I'm going to gift you Financial Peace University. It's a nine-week course that will help guide you as you begin to look and understand. I'm going to try to sell that car. I'm going to go to kellybluebook.com to kind of find out the value and then put a for sale sign in it and let's get that thing sold.

Right now, you've got a lot going on with life transition and a lot of things happening. The last thing you need is debt pulling at your wallet. Yeah, and that's the very last thing. We definitely are going to be praying with. Why are you walking through this process? But I definitely want you to get that. Get out of debt. Get a thousand dollars in your emergency fund and just really get gazelle intense about getting out of debt. It's going to be frustrating.

It's going to seem impossible somewhat because of all the stuff that's going on during your season right now. But I want you to focus on your future. Focus on the end vision. So that way you can get through this part process right now. You really can. And I'll tell you what, Maria, we've got financial coaches that walk with people and guide them that we've trained that have been here through financial coach master training.

I'm going to also connect you with a coach as well, because you're not in the, you're not in this alone. You got people that are going to walk with you. Well, listen, I want to thank James Childs, the producer, associate producer, Kelly Daniel, and you, for tuning in and calling us. Remember, we are here for you. We're here with you. We've got your back, and we're willing to walk through whatever it is that you're trying to tackle.

You're not alone. Just stay connected, stay focused, and understand that progress is available. This is The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.