The Ramsey Show - App - Why You Need an Emergency Savings Fund (Hour 1)

Episode Date: July 30, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Starting off this hour is Michael. Michael is in Minneapolis. Hi, Michael. How are you? I'm better than I deserve, Dave. How about yourself? Just the same, sir. How can I help? I appreciate you taking my call today, sir. I'm calling because my wife and

I were about to finish step two in the next couple of months here, and it will take us a few more months to save up. I do own a rental property because we are a blended family. We have two homes, and I've been renting the one out for the last two years, and they just signed the next year's lease. So I'm going to have the second property available to possibly sell at the end of next year. I'm trying to decide if it's a good idea to sell that property at that time or if I should hold on to it because together we have five children, and that's a lot of kids to send to college, and we really haven't done a whole lot of saving for that yet.

Okay. Well, the rental property may not help send them to college it might hurt sending them to college uh what does how much is the mortgage on it balance the balance is 24 000 that's good news and uh what is it worth anywhere between 80 and 90 depending on if you trust. Okay. And so what does it rent for? Rents for $900 a month right now. I can probably get a little bit more out of that if I wanted. Okay.

And what is the house payment on the $24,000 balance? Principal interest, about $150. Okay. All right. Well, you're making some money on it. That's for sure. Well, there's association fees along with it. Basically, I come out a couple grand ahead each year after license and taxes and all that stuff.

Yeah, it's about a $6,000 spread plus, you know, that's probably about right. Probably make two or three on it net of everything. If you're doing a good job keeping your books, that's probably about right. And so you think you'd rather take the cash out of the equity and invest that towards college? Well, I mean, I could invest it towards college, or we still owe $100 on the house that's worth $240. What's your household income? It ranges between $ and 100. My wife is self-employed, so it just depends on the year. Yeah, cool. Good, good. All right. How old are the kids?

What's the age range? My oldest is 13, almost 14, and then we've got two 12-year-olds and two 9-year-olds. Okay. Well, I'll tell you what I would do if I woke up in your shoes. You've got kids coming on college real fast. Yeah. You blink, they're going to be on there. And the $2,000, $3,000 a month is not going to help with that. Or $2,000, $3,000 a year, I'm sorry, is not going to help with that, that this thing's making.

I probably would sell it and use it to fund college funds and pay off other debts if you're in baby step two, which will help you cash flow the balance of the college stuff. Because the way I'm analyzing that is if I had kids that age and I had $80,000 or $50,000 or $60,000 or whatever it is sitting in a pile in the middle of my kitchen table, would I use it to start their college funds and get that going and get out of debt so that I could cash flow their colleges, or would I go buy a rental property that fits the description of the one you own? And I love rental property, but in your case, I think you're staring down the description of the one you own. And I love rental property, but in your case,

I think you're staring down the barrel of a bunch of college tuition payments, and I think investing that $40 or $50 towards that end, and or $60 or whatever you net out of this thing, and or cleaning up Baby Step 2, which helps you do the same thing, helps you invest and get ready for college, I think it's going to move the needle further towards that goal or cleaning up Baby Step 2, which helps you do the same thing, helps you invest and get ready for college, I think it's going to move the needle further towards that goal than the rental property does. So in your case, I'm probably selling it because of that, if I were in your shoes, if you see how I got there.

Brandi's with us in Detroit. Hi, Brandi. How are you? Hi, Dave. Thanks for your time today. Sure. My question is, we're currently in Baby Step number six, thanks for your guidance. And we have a rental property, so we became our

landlord kind of by default when we moved into our primary residence. And the question is whether or not we should treat our rental property like Baby Step two. How much do you owe on it? $148,000. What's your household income? $250,000. Okay how much do you owe on it um 148 000 what's your household income um 250 okay what do you owe on your personal residence uh 195 okay no i'd put it in baby step six i'd probably put it after your house okay i'll probably pay off my house first and only the reason that we ask is because we know we could probably knock it out within two and a half years. That means in three years you could knock out your house. Yeah, true.

So let's knock it out. Okay. And then if you don't want the rental property, sell it. But, I mean, if you want to keep it as a rental and get it paid off, I think you're, you know, probably three more years and you're done with both of these. So six years you're 100% debt free and you own your home and a rental property clear if you want to go that route. And that's what I would do. I'm probably going to hold it and work my way through it if it's a good property. And, you know, if you're glad you own it and you're good at being a landlord, you're not being taken advantage of regularly and that kind of thing.

There's not a lot of drama and stress around you doing this and all that. As long as all that's the case, I'm probably going to just pay it on through. But I'd knock your house out. It's close enough. I don't use debt snowball on Baby Step 6. I use risk management on Baby Step 6, meaning if I was going to lose something in a worst-case scenario, what would I want to lose? I'd want to lose the rental property before I lost my house. And so my house paid off first. And that's that's the risk management approach to that decision making. And that's why I do it in that order. So, hey, thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life, your money.

It's a free call. 888-825-5225. Robin is on Facebook. Do I need an emergency fund in retirement? If you're breathing, you need an emergency fund. Emergencies are going to happen. You don't, like, get to 65 and God says, okay, no more emergencies. No, I mean, your transmission still goes out in your car.

You still have a visit to the dock. You still have car wreck. You still have stuff happen, man. It's called life. And sometimes life happens more when you're old. So you might want to, you know, beef up on the medical side, right, if nothing else. Hopefully you've gotten past some of the emergencies that, you know, beef up on the medical side, right, if nothing else. Hopefully, you've gotten past some of the emergencies that, you know, I have noticed on the emergency fund that the further down the baby steps I get, the more wealth I've got, the more I own nicer things that have less of a tendency to break.

I haven't had a car break down, for instance, in years. And the car I drove in college had 200 000 miles on it i was on a date with my wife i was telling her how i was going to be a millionaire sometime and uh someday and i drove across a railroad track the muffler fell off that's how broke i was in college okay but i had a toolbox in the trunk because i knew how to put the muffler back on that's that i haven't had to live like that in a long long time but i do remember living that way so i have less emergencies now because i have nicer things as you build wealth that occurs I haven't had to live like that in a long, long time. But I do remember living that way. So I have less emergencies now because I have nicer things.

As you build wealth, that occurs. But it doesn't mean you get a pass on emergencies if you're in retirement. So, yes, you need an emergency fund in retirement, Robert. Thanks for following us on Facebook. 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

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Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.com. Brand new custom blinds from Blinds.com are the easiest and most affordable way to give your entire home a facelift. With Blinds.com, you get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the magic word, the promo code Ramsey, and you get the best possible deal. Blinds.com, promo code Ramsey, and you get the best possible deal. Blinds.com, promo code Ramsey. Josh is in Michigan. My wife and I are on baby step two, meaning they're getting out of debt except their home, and expecting a baby.

Woo-hoo! Been listening for a while. I've heard you say to press pause on paying off debt and pile up cash to prepare for the unexpected. My question is, should I use my work-offered HSA and try to max it out to pile up the money, or just save it up in a savings account? Savings account, Josh, because when mommy and baby come home and they're healthy, we're going to take that entire savings account, except for $1,000, and throw it at your debt snowball and press go again.

If that money's in an HSA, you can't pull it out of there to pay off your credit card bill after mommy comes home. So it's just in case there's a medical emergency and you had to have some margin or you had some kind of a hiccup in the labor and delivery process, even if it wasn't a big one. You need to have extra money laying around. But you won't lose any ground in your debt snowball if you just throw it in a savings account except the interest on that amount of debt during that nine months but that's all and this really doesn't amount to much so it's worth it to have that extra pad between you and murphy it keeps him away i have noticed

i was talking about before the break that once i've had built some wealth and had an emergency fund that i have fewer emergencies it's it just like, too, that there's some kind of a correlation between getting your financial act together and just getting your act together. Growing up, being smart around all. It's just like when I stopped doing stupid stuff with money, I stopped doing as much stupid stuff in general. Does that make sense? And so I really have, as soon as we got an emergency fund i remember the first time we got our emergency fund of ten thousand dollars after we went broke and started completely over and you know we had little kids in the house they're wearing

consignment sale clothes and we're scratching and claw insurance couponing and we finally get that first time we get to a thousand a ten000 emergency fund. I'd never had $10,000 cash in the bank to not touch for any reason ever. I never had an emergency fund. I always lived just hand to mouth. When I got that emergency fund in place, there was like something relaxed in Sharon. Something relaxed in me. And we were set in a completely different place then, and we really did stop having emergencies.

Now, some of it, again, was because we had nicer things. We were starting, not by then, we didn't have nicer things, but we were starting to get a little bit better this or better that, and you don't wait until the brakes are, you know, completely grinding through the rotor before you get the brake job. You get the brake job done as soon as you hear the first little sign that there's bad brakes. And so the brake job costs you less. You don't wait until the tire blows out before you get new tires.

And so it costs you less. You don't destroy the rim when you blow the tire. Instead, you're looking, oh, we've got to get new tires. And we've actually got money for tires. And so you get tires. And, by the way, if you've got decent tires, you have fewer wrecks, and there's less wear and tear on the car, and it rides better, and all these other things.

You know what I mean? All this stuff starts to work together, and we started having fewer emergencies. It was like when we got – it felt like that because we got an emergency fund, like Murphy went and bothered somebody else. There was this switch that flipped. It really, we have never really had a big enough emergency in the last 30 years to get into the emergency fund. Now, we've had some emergencies, but we just cash flowed them. We had a heat and air go out, and I just, it's $3,500 in the old house,

and we just wrote a check. I remember doing that. It was weird. But it wasn't, I didn't even have to touch the emergency fund. It's like we had an emergency fund for the emergency fund and that same little account, you know, with money added to it, of course, over the years is still just sitting there. It's never really been touched. And part of that was we started making more money. Part of that was we started having better stuff and not having to do the repairs. Like I said

earlier, part of it was though, there's something that happens in your life that when you get your act together with your money, you just get your act together. And you just stop doing and living in such a way that you invite crazy crap into your brain and into your life, this intersection into what's going on. It's just crazy. Danielle is with us in New York City. Hi, Danielle. How are you? I'm wonderful. It's a pleasure to speak with you, Dave. You too. It's just crazy. Danielle is with us in New York City. Hi, Danielle. How are you?

I'm wonderful. It's a pleasure to speak with you, Dave. You too. What's up? I'm calling because I'm on baby step two, although I think I'm back to one now since I've slightly depleted my emergency fund. But I'm kind of freaking out because I have a lot of taxes,

back taxes owed and i'm not sure what to do now that i've kind of depleted that that fund but these taxes are old okay how much do you owe in taxes um about ten thousand okay and that's for federal income tax uh federal income tax um how did tax for the past year. How did you not pay $10,000? I didn't pay in 2011 and 2012. Were you an independent contractor or something? I had filed exempt and then just did some stupid things and just didn't file them until now.

Oh, you mean you had claimed exempt, and so you had no withholding? I had no withholding, and then I hadn't filed them. I was so paranoid about filing them, knowing that it would only make it worse. So now you have filed all of your tax returns, and you're current on your returns, but you owe $10,000. Yes, sir. Yes, sir. Okay, good. And what's your household income?

My take-home is $41,000 per year. And you're single? Yes, I am. Okay. The person that did your taxes can contact the IRS and put you on an installment plan, which you need to do immediately. It doesn't change the numbers, but it keeps them off of you. If they are receiving $200 a month from you on that $10,000, they won't suddenly show up and scarf your bank account or something.

Exactly. I wanted to be proactive. You don't want the thing. You have it already on an installment plan? No, not yet. I only have 2012 back. I'm still waiting on them to send me the documentation for 2016 and 2011. I'm sorry, waiting on who?

The IRS. I called them to be proactive, and they said, well, we haven't even filed them yet on our end. But can I just call for one year? The IRS does not file tax returns. What do you mean? Well, not filed them, processed them. I'm sorry. When I called, that's what they said.

They said to just send money, but they hadn't processed them. So did you have a tax preparer do these taxes for you? Yes, I did, actually, one that I got through your recommendation on your website. Call them and set up an installment plan. Okay. And that gets them off of you because you don't have $10,000. You don't even have $1,000. Not at all.

I have another debt on top of that. How much other debt do you have? Well, in total, including that $10,000, I have about $40,000. What is the other $30,000 on? I have credit card debt and $16,000 in school loans. How much do you owe on your car? What credit card? I don't have a car. Car. How much do you owe on your car?

I don't have a car. You don't have a car. No, my credit cards. I know. You're living in New York City. Okay. I got it. Yeah. No car needed. Okay. So, my credit cards. I know. You're living in New York City. Okay. I got it. Yeah. No car needed. Okay. So, okay. Yeah, you need to put them on an installment plan, and I would knock out a few of your

little ones, your smaller debts first, but then I would move the IRS towards the front of your debt snowball and try to get them cleared up as fast as possible. Yeah, they're on the top of the list. Have you cut up the credit cards? Oh, yeah. Credit cards have been gone since the beginning of the year. I had to make some headway, and then me filing the taxes just kind of put me 10 grand further. Yeah.

First thing is get your $1,000 back, baby step one, your starter emergency fund. Let's do that first. Then get on an installment plan. Let that be a monthly payment, a couple hundred bucks a month going to them. That'll keep them at bay while you work your way up to paying them off. And we want to move them up in the debt snowball further than they should be based on the amount owed. But if you've got a few two and three and thousand and less credit cards and student loans, some little ones that you can knock out and just get a few things off this list, I would do that. And then I would lean into the IRS and

get them cleared up. Thanks for the call. 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 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. Nick is with us in Phoenix. Hi, Nick. How are you? I am doing absolutely wonderful. Thank you for asking.

Sure. How can I help? I have a question. I have a rental house and I have a primary residence as well. I make about $102,000 a question. I have a rental house and I have a primary residence as well. I make about $102,000 a year, and I'm looking at possibly a new job opportunity that would yield me about 60% pay increase, require me to relocate to another state. Wow. Where are you going? Possibly Oregon.

Wow. Sounds like an adventure. What do you do for a living? I'm actually a cloud engineer, an IT engineer. Okay, good for you. How old are you? So my question, I'm 26. Man, that's nice. Good for you. Neat, neat, neat.

Okay, your question's what? So I have two opportunities, and I know one of them is going to happen. I'm either moving to Portland or I'm downsizing my house. My question is if I move from my current house, which is about a mortgage of about $340,000, do I run it out and make an actual net profit of $300 a month, or do I sell it? Sell it. Sell it? Okay. Here's why, okay?

Having owned rental properties, a bunch of them, for the last 30 years, rental properties don't make the difference in the payment and the rent. You also have expenses associated with that, vacancy associated with that. And $4,800 a year gross margin, which is the difference in your payment and your rent income, is not enough to cover vacancy and repairs on a $300,000 house. You will lose money on that in a year. Sure. That $300 a month is actually net after HOA and anything like that.

It's actually $600 a month gross. Okay, yeah, but it doesn't cover expenses or vacancy. Yes, absolutely. Yeah, but, I mean, bottom line is you have two payments. You have a house payment and an HOA payment. Those happen whether the house is empty or not or whether the heat and air goes out or not. Absolutely. Yeah, and so $4,000 a year, $5,000 a year doesn't cover that on a $350,000 house.

You'll lose money on that. Sell it. Sure. I'm more than happy to do that now my rental property is about 115 000 mortgage and same thing it grows to make 600 a month uh right now okay i i love i love rental real estate i don't want you to misunderstand me i love it i love it when it's paid for because it makes money then uh you don't have spread a big spread in any of these you've got a smaller spread in the first one but the second you've got a smaller spread in the first

one but the second one's got a better spread but it's still not a lot of spread if you're moving to oregon you don't want long distance landlording period okay because you don't want you don't want to try to manage a property from phoenix to oregon and make sure it's they got the right tenant in it that somebody in close you know changing their harley oil in your living room and all that kind of stuff if you're going to stay in the area area and you're going to be making some serious bank and you want to try to get that rental paid off quickly in the next few years and you want to hold on to it because you really like it, that's fine. Go ahead and do it.

But my rule on my rentals has been I pay cash for them as I go, which means I buy fewer of them, them but 100 of them make money that way uh you know and all the time and there's zero uh financial stress on any of them zero problems and so uh you know i'm just gonna i'm gonna push you towards having that thing paid off and if you're moving to oregon i'd sell both of them just because i don't do long distance landlording i don't have a a rental house in another city anywhere i've got some houses but they're not rentals they're just our vacation homes and that kind of stuff michael is with me in columbus ohio hey michael how are you i, Michael, how are you? I'm doing well. How are you, Dave? Better than I deserve. What's up? So I recently graduated from graduate school about two months ago.

Congrats. What's your degree in? Doctor of Physical Therapy. Good. So my wife's a nurse, and she's been working for a little over a year now. And as of today, we are paying off the rest of her car loan. And so we're going to have no loans except for our student debt. The only thing is we have about $180,000 in student debt. And, yeah, I know.

A little misleading on kind of the starting income for PTs coming out of school. What are you making? I'm working at Riverside Hospital in Columbus, and she's working at a hospital just down the road from me. I'm sorry. What are you making? I'm working at Riverside Hospital in Columbus, and she's working at a hospital just down the road from me. I'm sorry, what are you making? I'm making about, netting about $45,000, and she's about $42,000. Okay. All right, so what's the trajectory on your income?

Can you pick up a bunch of overtime and things? Yes, I can, i i am doing that and then just yesterday i picked up um a part-time job which will pay significantly more per hour because i'm going to be um contingent rate um and i projected with that and my wife just three days ago accepted a higher paying position at a different hospital um we're going to be able to bump that up by an extra 25 to 30 000 a $30,000 a year. Good, good. Well, you just lay into the student loan, man. You just start beating it like it, you know, just putting a whipping on it. That's your only thing. It's a big number, but the good news, the bad news is you start out lower than you thought. The good news is

you're already making some moves, both of you, to increase your incomes, and I think you'll see it come up. Your PT will come up over time. It's not a 45 000 your job permanently but that's your entry point uh it got you going and so you know two years from now i fully expect you guys to have added another 20 to 40 right and my question was as you do that you just keep you keep your dadgum lifestyle down to nothing and you just beat the snot out of the student loan. I'm sorry, your question is what? So because of how many, it's about 15 separate loans within my student loan, and I heard you talk, because I've only been following you a couple weeks,

I heard you talk kind of against debt consolidation, but I feel like spreading myself across all of those, and then depending on, I was looking for your advice on term as far as should I take a 10-year or a longer term so that it's less monthly so that we can pay down her student loans, which is the lesser debt right now. It's borrowing from one to pay to the other. It doesn't matter. Okay. Okay. So it doesn't make any difference.

You've got $180,000 plus her student. How much are her student loans? She has, the $180,000 is combined. Oh, okay, good. She has $25,000. Good, okay, all right. So you've got $180,000, period, and whether you put it on a 10 or a 15-year term doesn't matter

because you're not going to pay it off that slow anyway. Right. So if you pay one of them slower and the other one faster, it does not change the math. Okay, okay. Because it's still going to be $180 plus interest, and you're still going to get that done in, probably not, you might get it done in four years, depending on what your income does. Okay, that was kind of my projection, because we're living very cheap right now. We only pay for the usage.

We live on her parents' property in a trailer home, so we're living very cheap, and I drive a beater like you recommend, and we dropped memberships. We've already cut back in our monthly budget, and I was kind of hoping to see, you know, is it realistic for me to think four to five years? I think three to four because I think you're going to continue to see your income come up, and if you just take your current income and project it, it's about four, but I think you're going to be able to do it in three. Okay, great. That's great news.

Good news for us, son. Yeah, and then you're going to be sitting on $150,000 income, give or take, and no debt and living in a trailer. I mean, you're going to be able to go zoom, zoom after that, right? Yeah, that's the plan, to be able to then save up after we're done with that, obviously build up our savings, and then save for a house. Absolutely, and you'll be able to do it quickly, because you're going to have a great income and no debt,

and you will have developed the emotional ability to live on the cheap. Yeah. I mean, if you were currently spending $150,000 and I had to cut you down to where you are now, emotionally, that'd be like pulling teeth, you know? Yeah. So the good news is you're starting down there, and you're just going to kind of keep living like a broke college student

while you clean up this dadgum mess, right? Absolutely, yeah. That was the plan. It's a little harder. I got fired up listening to you. You know, I stumbled across you at a good time in life because my loans haven't necessarily kicked in, and I'm getting some direction.

And your book just came in the mail. We ordered it last week. It just came in today. So we're getting ready to start the total money makeover. So we're excited about that. Well, thanks. And listen, the debt consolidation is fine if you want to do it, but only if it lowers the interest rates across the board. If it doesn't lower the interest rates across the board, you're not making progress by consolidating.

It doesn't do anything. I'd rather you leave them separate in that case because I'd like for you to be able to see the progress of knocking them off one at a time. That is very valuable. Hold on. I want you two to go through Financial Peace University as my guest. This is The Dave Ramsey Show. Okay. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life.

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Matt is with us in Modesto, California. Welcome to the Dave Ramsey Show, Matt. Hey, Dave. How are you doing? Better than I deserve, sir. How can I help? Yeah, so I have the self-employment idea for a delivery service in my town. Basically, it's delivering food along with other miscellaneous items. And I'm just wondering what the best way to try to get started.

Okay. So, like, on behalf of restaurants, you could pick up food and take it to an office, that kind of a thing? Sure. And it's not only tied to restaurants, but like I said, also anything really. Other than food? Correct. Okay. Well, the people in that space, you know, there's the Uber and Lyft are both entered the space, meaning that area of business where they're down delivering food.

And so I would want to investigate that, if I were you, and find out how that is working in your area. Then also I'd want to investigate the other delivery services in the area. How many of them are there? How much competition do you have? What made you decide that this might be a good idea? Sure. I mean, we always talk about pizza delivery, and I've always kind of done that in the past. And then the past couple of years, I've done independent contractor work for certain companies that offer a similar service.

And I've always just wondered if I could replicate the same thing in an area that doesn't have it, at least not yet. Okay. So you think that your area does not have a general delivery service, just a regular company doing that, not an Uber or a Lyft or anything like that? Correct, yes. As far as this particular kind of service goes, there's nothing like it in the area. Okay, good. That's a big plus because you don't have competition in the space. And Uber and Lyft aren't active in your area?

And Modesto? They are as far as rideshare. And the town I'm actually in right now is Merced, so it's a little bit smaller. Okay. It's about 100,000 people. Okay. So I think there's enough of a market. It's just implementing the system.

Right. Okay. The service you worked before as an independent contractor was in another city? Correct. It was in Palm Springs, so a much bigger area where they tend to start. All these startup delivery services, they tend to start in the bigger cities. Sure. Sure. sure.

Okay. Well, you know what kind of customers you used to go to when you worked for them, right? Right. What types of businesses. And so I think you're just cold calling, I guess, unless you've got something in mind to get a few customers under your belt. But, you know, if you know that there's a certain type of business that's more likely than others to use this because you used to call on them all the time when you did this in Palm Springs, you used to deliver for them. Then you go to that kind of businesses and say, hey, I'm thinking about doing this. This is my fees.

Would you use me? And you start talking about, you know, talking to different ones to see if you can get some business drummed up. Sure. Would it be one thing just building a relationship directly with them or just kind of marketing to customers and just kind of going from there? Well, they are the customer, aren't they? Businesses that take deliveries is what I'm talking about. Or that send deliveries, either one.

And so, I mean, who did you deliver for when you were an independent contractor? What type of businesses? Well, pretty much in the main market would be food, but the main thing is basically where you can have carryout and they don't offer delivery. That's where a lot of people are going, because the main places that already offer delivery, they're not a lot of people are going because the main places that already offer delivery, they're not a part of the service since they already have their own. Right. So you talk to some restaurants about delivering for them,

and there's some services that do that around in addition to Uber and Lyft. And then if there are things outside of restaurants that do deliveries that could use the service, you should start calling on them and see how many of them you can gather up and see if you can get busy. And then you can drop by office buildings and go, hey, I deliver for these different six restaurants, and if you want some food from them, just holler at them, and I'll bring it over and help them drum up business that way.

And you just got to get out there and scratch and claw and see if you can find the clients on each end of the delivery and create the business. But is it possible? Sure. If there's a market that's big enough, it's possible. And it sounds like there's not anybody interrupting the market right now. So, again, there's lots of people playing on a national level around the edges of this space. And so the grocery business is doing it now.

A lot of people, a lot of grocery stores have a thing where they'll bag the groceries and set them at the curb. You call in your order or put your order in online, and then you can go just pick it up. And you could pick it up for them and deliver for them. You can do the same thing. Again, in a town where they've not yet, in the size where they've not yet had some of the nationals come in and play with this space. Christina is with us in Dallas. Hi, Christina.

How are you? Better than I deserve. How are you, Dave? Just the same. How can I help? Okay. Just the same. How can I help? Okay, my question today is in finding balance with time management between being a super home economist with three kids, one with special needs, just cutting expenses to help us get back out of debt

versus building up a home business to create extra income. Okay. You're probably not going to find a balance you're probably going to prioritize and say okay i have to have this many hours a week for a special needs kid and taking care of the kids and doing home economists which leaves me the balance of this amount of hours for your small business but uh i don't i don't think you're going to abandon the motherhood process the way you described it just now to start to start and run a business i think my idea was more of um spending the time to get everything as cheaply as possible you know

hitting five grocery stores um we paid off 30 000000 in student loans in three years making 30,000 back when we started listening to you we got uh got punched after getting 20,000 our emergency fund and so back then to 18,000 in debt so I'm trying to balance how do I I can't go quite as gazelle as I used to if I am also putting time into building business. Well, the business has to make more than you would have saved shopping 30 grocery stores. Right. And so, you know, if you shop six grocery stores for a can of soup and you save a nickel, then your business would have made you $800,000,

then we obviously would have done the business. You follow me? I'm exaggerating. But the point is there's a trade-off and you say can i make more doing business than i can extra shopping for the purchase opportunity cost on your time and my guess is you probably can if you have a decent business that you're going into i'm doing a home business so network marketing okay well the question is are you gonna make any money and if you're making money at the

home business then uh you should you should be able to out earn per hour what you would do what you would save by couponing you should you should be able to if you're making any money now if you're not making money and sometimes uh multi-level home-based things don't uh people run around actually spending money doing those things sometimes. So just make very, very sure you're managing the accounting side of this business to ensure that you're actually making money and say, okay, I spent 100 hours on this. I made $100.

That's a buck an hour. That ain't worth it. And you've got to start looking at this and start really looking at the hours you spend and what you make in return. And do you dial back on some of the frugal movements, and that frees up a few hours, then that does make sense if you're making money per hour. But if you're not, it all comes down to are you making money. If you're making money, then the tradeoffs are there until you get down to a non-economic trade-off, and that

would be time with your special needs child. That's a non-economic trade-off. You're going to do that trade-off. There's probably no amount of money that would cause you to, you know, to dial that back to nothing. You're probably going to always be involved in that, I would guess. I think most people would. It might be, though, that if you made a bazillion dollars, you, I would guess. I think most people would. It might be, though, that if you made a bazillion dollars, you hired a nanny. I don't know. But that's up to you to do that. But you're looking at the tradeoffs, the time you spend.

But the thing is, go ahead and decide what those priorities are up front. And then that keeps you from being stressed all the time back and forth. Hold on. I'm going to give you a copy of Christy Wright's book, Business Boutique, Equipping Women to Make Money Doing What They Love. Hopefully it will help you in this journey. This is The Dave Ramsey Show. Hey, guys. This is Blake Thompson, Chief Production Officer for The Dave Ramsey Show. This hour's up, but you'll find more on our YouTube channel, where we have over 6 million YouTube views each month.

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