The Ramsey Show - App - Why You Shouldn't Share Assets Until You're Married (Hour 2)

Episode Date: February 5, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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 joining us. Open phones at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Renata in Phoenix, Arizona. Welcome to the Dave Ramsey Show, Renata.

Hi, Dave. Thanks for taking me on. Also, thank you for your ministry. It's such a blessing. Thank you. How can I help? Well, I'm 52, recently divorced, and I wanted to ask for your advice in pros and cons of long-term health care or long-term care. Okay. I would buy long-term care insurance when you're 60. Okay. Not until. you're 60 okay not until um okay does it matter if you know um my i'm i'm pretty funded as far

as my retirement goes does it matter whether what those is there an asset level that makes a difference to whether you could self-fund or you should have the insurance well the the average stay in a nursing home is 2.4 years. Okay. Okay. The number of people that stay over three years is only one-fourth. Okay. Seventy-five percent of the time you don't stay over three years. And only 70 percent ever go. And so when you start multiplying those numbers out, it starts to get down to almost nothing that is going to be longer than three years. So if you figure $50,000 a year for a nursing home or in-home care,

that's $150,000 out of pocket, and you're single is what you're telling me. Correct. And so, you know, if you've got $2 million, you can burn $150,000 and not think about it. If you've got $1 million, you can burn $150,000 and be okay. If you've got $200,000 and you burn $150,000, you've probably got a problem. Okay. So what's your asset level? What's my what? Asset level.

My retirement's right about $1 million right now, and I have a couple, a few hundred thousand liquid as well. Awesome. If you are single and have no dependents, which is what I think I'm hearing. Well, I do have three children. One is semi-dependent. She's in college right now, but I'm funded for that. Yeah, but that's not – I mean, I'm talking about when you're 60.

Yeah, correct. We're not even going to worry about it until 60. But at age 60, do we buy long-term care insurance, or do we self-fund through that? You've got a million and a half dollars. Easy by then. Probably two million yeah and so okay what's your income um right about 50 000 i have a couple small businesses i run so i don't anticipate adding a lot to the retirement i've done that already okay so i'll probably you know continue to do a Roth, but I don't have the ability to continue to. So did that come from your income or from the divorce? It was mainly from the term of mine.

My ex-husband and I saved a lot through the years through 401Ks and IRAs and that type of thing. Well done. Very well done. Thanks. I'm talking to a 52-year-old single lady millionaire. Yeah. How much of it did you inherit? Zero.

There you go. All right. That's the norm. That's what we find most of the time. Yeah. I literally left college and had my 401 maxed out from the moment I got my first paycheck. And that was huge. I love it.

Well, there you go. There's the formula. Oh, well done. You could self-insure through this when you understand the probabilities. So here's your probabilities. 70% need long-term health care help, okay, in-home care or a nursing home. So only two-thirds to start with is what we're talking about. Then out of the 70% that do, only 24% of them need it longer than three years and the average health care the

average long-term care nursing i'm about 50 50 60 grand right now depending you can spend a lot more you can spend a lot less but that's roughly you know a good rule of thumb to use and so you know we're talking about um you know one-fourth of two-thirds. Right. Or more than three years. That's when you can self-insure through if you're sitting on $2 million. And this money, if it's invested, should grow to that by then in another eight years or more. That's what I'm thinking, too.

Okay, and I've had advice both ways, so I just wanted to get your thoughts on it. I'm a big proponent of long-term care insurance, but you're in a position to self-insure if you choose to. Awesome. Great. Well, thank you very much. Thank you for the call. Rachel's in Phoenix as well. Hey, Rachel,

welcome to the Dave Ramsey Show. Hi, Mr. Ramsey. Thank you so much for taking my call. It's a real pleasure. Honored to talk to you. How can I help? So, we have started the Baby Step steps this year. You've spent a lot of time at our dinner table. I don't know if you know that.

You stand the book up in front of the guest plate, right? So I'm sitting there at the table. You sure are. So we bought a car late last year. We had two older cars, and we were trying to downsize to one vehicle and a smaller payment. And we thought we made the right decision and it turns out we didn't. Okay. So we are, so I did my research after I started reading your book, trying to figure out how to get out from under this car. It's about $18,000 underwater underwater and i can't find a credit union or anybody who's

willing to refinance that amount with us that's not a shock so you must have so you rolled a ton of underwater from the other two cars into this deal yes and it must have been a ridiculous interest rate um that's what the whole thing was we My husband's car was at a 13% interest rate, and mine was at a 6% interest rate. So when we went to the dealership, he said, look, these cars are old. They're bottom of the barrel value. We can get you into a new car. We can roll in the negative equity at 2.75% with a cosigner, which is what we did. Okay, so you're at 2.7%. Yes.

Well, that's good. That's the only good news in the story so far. What's your household income? So take-homes, we bring home about $5,000 a month. Okay, and you owe total how much on this car? $41,025.76 as of this month. Good Lord. Sorry.

I know. It's a lot. It's really, and it's really, honestly, Mr. Ramsey, I called because it's real discouraging. We're trying to get going, and it feels like we're almost done before we even get going. Yeah. So how much was your tax refund? Well, that's all gone. We put that into other things, but it was about $4,500.

Okay. Change your W-4 so that you take home $4,500 divided by 12, or about another $400 a month because you got too much coming out of your check. And how much are you putting into your 401Ks? So as of this month, we stopped our 401Ks altogether. And have you stopped all gimmick insurance, everything but health insurance? We have, so all of our insurances are through our employers. So we have like our health insurance, our life insurance, and our kids' life insurance.

Your kids' life insurance. Yes. We had a friend lose a baby this year, a small baby, and we decided that we would take out two $10,000 policies. They're like $3 a month for our children just in case. Okay. All right. Okay.

You guys need to tighten your budget down now, change your W-4s, make sure you've stopped all your 401Kks, which is what you're talking about. Get home with as much money as you can. Increase your income as much as you can. Sell everything in sight. Put so much stuff on Craigslist the kids are hiding. Sell everything in sight and start paying this car down. There's no way out of this except to pay it down.

If it's a big $18,000 loan or if it's a $40,000 loan. Right now it doesn't matter. It's a 2.7, pay it down. Hard and fast. Hard and fast. You can do it. One of the questions I get all the time is, which life insurance company should I use for my term life policy?

A valid question since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision. That's why the only company I use and have recommended for over 20 years is Zander Insurance. Zander is a broker who shops the top term life companies for you and finds the best rates available from the only plans I recommend. They also save you time. Whether you want to work online, over the phone, or via text, their team will cater to your needs and help you make the right decision.

This is an absolute necessity, and Zander has made the process easy and convenient. Call them at 800-356-4282 or visit zander.com for instant online quotes. Right here in the lobby of Ramsey Solutions, Mike and Dot from Chattanooga, Tennessee, drop by with a question. Hey, guys, how are you? I'm not hearing them. Try again. Hey, guys. Good. How are you?

Better than I deserve. What's up? I know you don't like whole life. Hey, guys. Good. How are you? Better than I deserve. What's up? I know you don't like whole life insurance policies, but I currently have one. We've had it for about eight years, and we have about just over $90,000 in cash value. And the plan was when I retire at 55 or turn 55 that it would self-sustain it, pay the principal for the insurance. I wouldn't have to pay into it. Should I keep doing what I'm doing with that policy or should I cash it out and put the money towards the mortgage? We

have no other debt besides mortgages. Okay. And what's the face value of it? $750,000. Okay. Are you healthy? Yes. Okay. Well, were you to price some term life insurance, you would find that $10,000 a year would buy a lot of term life insurance, like millions and millions and millions and millions and millions. Okay. Right? Yeah, I did get a price for it's probably a couple thousand a year more than what I'm currently paying. Yeah, but I mean, how much was the price?

I think it was around $1,000 every six months. So $2,000 a year for how much insurance? That was, I think it was $700,000 or $800,000. Oh, so for about the same amount of insurance. About the same amount. That's correct. Okay. Well, if you took $90,000 and invested it, let's just play with some round numbers because

we're on the radio, okay? If you made 10% on your money, that'd be $9,000, right? Yep. But you didn't get any free insurance. Oh, darn. You bought a $2,000 policy. That'd still leave you $7,000 to the good. So the fact that they're willing to give you some free insurance in return for paying you almost nothing on your $90,000 is not a good deal.

You following me? Mm-hmm. So, yeah, I'm getting rid of that garbage. Yeah. I'm going to pull that out, pay off my house. If you want some term insurance, get that in place first. You have other assets? Yeah, we have two houses.

Paid for? No. The combined mortgage is about $350,000. Okay, cool. And you got money in 401ks and that kind of stuff? Yeah. Kids grown and gone? Yep.

Okay, good, good. Okay, so without putting you on the spot, because there's other people standing around here, it's kind of weird, but it's different than calling in on the radio, right? But let's just look at it this way. You need to start asking yourself, are you self-insured? And the reason you'd be self-insured, the way you'd be self-insured is this. If you took this money out and you paid off the properties and you got completely debt-free and there's no kids, is there enough money in savings to support her if something happened to you without any insurance?

If that is there, if she's okay if you die without insurance, that's what we're saying, then you're self-insured at that point. I don't know if you are or not. I can't tell quite with the numbers we've got in front of us. But $2,000 a year will buy you a million dollars, so you don't have to worry about it. You know, jump on Zander Insurance's site and get you a quote for some term insurance. But, yeah, I would pull that money out. If you want some term insurance, put it in place before you pull it out,

and let's use it to clean up the rest of these debts, or at least some of these debts. Your personal residence, the mortgage is how much? $100,000. Okay, so you can pay it off. Yep. Okay, cool. Yeah, I'd be debt-free, man. But let's get the term insurance in place first before you cancel it,

if you want term insurance. I already have a smaller amount. Okay. if you want term insurance. I already have a smaller amount. Okay. Again, ask yourself, is Dot okay if something happens to you today? From my perspective, she would be. Okay. No, just kidding.

I was talking about financially. We'll have to ask Dot about that later. Okay. But that's how you ask yourself and then the other thing is you guys are in good enough shape financially you may just want some insurance because dot wants some uh i've got some life insurance on me and there's no reason whatsoever for me to have any insurance other than a couple of odd things i do around business but i mean that goes to sharon but there's only one reason I have it. It's SWI. Sharon wants it.

There is no real financial reason for me to have life insurance for my wife. You know, she's in really, really good shape if I go away. I guess mine would be a DWI then. There you go. Oh, that could be dangerous. Better than a DUI. Oh, that's fun. That's great.

So, yes, I would get term insurance in place if you want some or need some. Before I canceled it, then I would cancel it and I would use the money. Absolutely. Better investment of your money. Thanks for calling. Thank you. Stop and buy. You didn't call, but thanks for coming by.

Brittany's with us in Washington, D.C. Hey, Brittany, how are you? Hi, Dick. I'm calling in because I just got your book in December. Thank God. It must have came down from heaven because you are going to help me change my whole life. But my boyfriend wants to help me with my paying down the debt, and I kind of feel guilty for having him help me because he was really smart and, you know, decided at a young age he didn't ever want to have any debt,

so he doesn't have any. And I feel bad that his money is going towards my debt, and that he has to be on the budget and everything when, you know, he's not the one who has the issue. By helping you, you mean he's not the one who has the issue by helping you you mean he's giving you some of his money he basically just gives me all the money and he's like here you go use it for whatever we need to take care of okay no i would not do that under any circumstances and here's what here's why now as soon as you're married if you get married someday i would do that you know at

that point you're married and you you treat that as one and so you take care of each other and yes you would accept whatever help from your husband or he would accept whatever help from his wife that you need to so when you're married that's fine but uh when you're uh boyfriend girlfriend that's really dangerous because, I mean, it could get really, really messy if there was a breakup. And if there's not a breakup, it still changes the tenor, the sense of the relationship, doesn't it? Yes, because I've always been the independent one, so I've always, you know,

I'm not the best at that, as I found out after reading your book, but I've always taken care of myself and had my own kind of, so accepting this help from him is really, really hard for me. Yeah, I would not. I would accept him being your cheerleader, your advisor, giving you some guidance because he's good at handling money, but I would not suggest that he give you money or you accept money until you're married. Now, if you set a date and you come home from the honeymoon, then the whole thing changes.

Then everything is combined. Everything is combined. And it doesn't matter who brings what. You could be he could be dirt poor and you could be really rich. But you got married. Now we are really rich. Right. That's how it works.

But but not not until we're married because it just changes you know you know this already because just talking about it made you feel weird yeah so you know it's going to change things and he's he's being nice he doesn't he's not thinking about it creating weirdness but it's going to create weirdness kiddo and i i don't think it'll be good for your relationship. And he's not doing it to try to be manipulative. That's not who this guy is. Not the way you described him anyway. And you're not doing it to be, you're not accepting it to be weird or something.

It's just until you're married, you should not share assets you will get and or liabilities. You will get yourself in a real mess real mess so just um if this leads to marriage later then we can have the discussion after the honeymoon yeah i'm going to combine everything everything at that point so a good question keith is on Twitter at Dave Ramsey. Dave, is the TSP a good place to put my retirement savings of 15%? It's fine. It's fine. We recommend the C, the S, and the I fund. 80% in the C, 10% in the S, 10% in the I.

And that's all. Don't do the L. It means lousy. Stay away from the other funds. I think you can probably get better returns with open market mutual funds than that. So I would consider that for your Roth IRAs and stuff and maybe not put it all in your TSP. I think you can beat those funds that are in the TSP. But they're certainly not bad funds.

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Hi, Takesha, how are you? I'm good, how are you? Better than I deserve. What's up in your world? Frustration and irritation and disgust. Sounds like a country song. Well, to be honest with you, Dave, exactly how I said it is how I feel. I'm a single mother. I work two jobs, and I get paid pretty well.

Two full-time jobs. My first job, I make about $40,000. The second is about $30,000 before taxes. I live in Alpharetta. I had my son a little bit early. So we moved up here from the town we were in because I kept continuing getting broken into. I've been living in Alpharetta in this high rent. I owe about $50,000 in student loan debt with interest.

And I read in the Bible it's sinful to even charge people interest. But I have so much interest in my student loans. I'm just frustrated, and they keep moving up the rent in Alpharetta. I can't get ahead. I'm so mad, and I just need advice to know, like, what to do because I don't know what to do. I understand. What do you do for a living? I do technical support.

Good. Okay. And how far from Alpharetta do you live? Or do you work? I'm sorry. Do you work? I live literally across the street. Oh, okay.

All right. So you're handy to work. Okay. Yes. And you're right. That's a high-rent district you're in. Yeah. Nice folk.

The sad part is when I'm looking in Decatur and the other areas I'm from, their rent is going up. So pay someone high rent and still get robbed? It doesn't make sense to me. Decatur's going $1,400, $1,300. Little project apartment is $1,200. Where are they? I don't get it.

Okay. The good news is you make some decent money, like you said. The other piece of good news is you're not afraid of hard work. You've just been feeling like a rat in a wheel so long you're getting tired yes sir i don't blame you don't blame you a bit okay so um and the fifty thousand dollars is killing you i mean you got a big old student loan debt sally may's got her own bedroom that's why rent's so high you could say that again okay all right so uh what we're going to do is i want you to go through our one-year membership program called financial peace university it includes a nine-week group class okay at a local church there i'm going to

pay for it i want you to go as my guest, okay? Oh, my God, thank you. I wasn't expecting that. I know you weren't. If you were expecting it, I wouldn't have given it to you. Sometimes people call like that, you know? But anyway, so you're going to go in there, and the first thing we're going to do is we're going to put you on a detailed written budget.

Now, when we sign you up for that, it's going to include a one-year membership to every dollar plus. And what that is is our online budgeting tool connects to your bank, and it's going to help you build a budget. Then when you go into the class, the coordinator will help you with the budget too. And everybody in there is going to be just like you there'll be some rich people in there and there'll be some people in there that are in a bigger mess than you're in but everybody's frustrated and ready to change okay okay and so and you it's only nine weeks you only go they only go to class nine times it's only nine classes okay uh are not nine lessons right in the in the group but the thing is uh you you'll have some folks around

you to support you and walk this through you because you know you you've been fighting this thing by yourself for a long time and you just get emotionally worn out yes that's part of the equation so now once we do that when i start doing your budget you have any other debt like a car payment other than that student loan i paid it off okay good good all right so when i do your budget i take food first out of 70 000 a year then i take out lights and water so i've got electricity and I'm eating. Okay? Then I pay the rent. And you've got money left after you do those things. You're just feeling stuck that you're always going to be doing that only. But what we've got to do is we've got to squeeze this budget beyond those three or four things, beyond just living.

We've got to squeeze it tight enough. And I'll show you how to do it. Okay? But squeeze it tight enough that you can begin to knock Sallyally may in the nose because she needs to be she needs to be hitting the face man we're gonna knock her out i want to fight her yeah we're gonna get ready we're gonna give her her eviction notice all right she's leaving all right okay sounds good yes sir so if let's just say that we lived on beans and rice and had no life, and people thought you were weird and everything else,

and you paid, I don't know, $17,000 a year for three years. You'd be debt-free. Oh, my God. I was thinking longer. Yeah. I'm thinking that's about how it's going to work out. I think you might pay it a little faster than three years, but it's probably going to take you about three years.

Now, I'm talking about you've got no life here. You're not going to see the inside of a restaurant unless you're working there. I don't have a life now. I've been there. I know. I just don't even know half of it. I know. Well, you've been fighting the bear with a switch.

Yeah, you've been fighting the bear with a switch. You've been by yourself, and you've been just swinging at air. And we're going to start making contact now. We're going to start hitting stuff. And I'm going to show you how and walk you through this. You're going to get traction. It's not magical. It's not magical.

It's really hard work. I'm prescribing three years of a pain in the butt. But you've already got a pain in the butt. We're just going to change it. I could do it. deal with it do you think i should say am i doing the wrong thing for me and my son staying up here i don't know what's your rent how much is your rent right now my rent is a thousand however i'm moving i'm moving out of the current place and the things around because he wants to move it up ridiculous and even though i live what's ridiculous he wants to move it up by 200 but he literally painted over

mold in my place and i saw it all right well if you want to move that's fine but i mean here's the thing the 200 is probably not that unreasonable you're part of what i'm hearing from you is you've been beat on so much that you're starting to feel like everything's out to get you. Yes, sir. And it's not. It's not. It's just a landlord moving up the rent. It's not.

Now, maybe this guy's a shyster. He's painting over mold. I got that, okay? But I'm just saying, you know, $1,000 you can do in your situation and still make progress. $1,200 you can do and still make progress. What about $1,400? Might be a little tough. The further we keep it down, the more we throw at Sally.

That's right. So the whole point is, you know, I'll move you into a garage apartment out back of somebody's house over the top of the garage for three years if we get rid of Sally. Right. But I don't want to do that for my life. I'm just going to live like no one else, so later I get to live like no one else, because I'm sick and tired of being sick and tired.

That's right. And that's where you are. So you pay a price to win, but not just pay a price. If you just move into a dumpy place just to move into a dumpy place, there's no reason to do that. But if you can find a place that's safe... Well you just move into a dumpy place just to move into a dumpy place, there's no reason to do that. But if you can find a place that's safe. Well, I'm in a dumpy place. That's the thing, and it's $1,000, and he's going up by $200.

I got you. I got you. Okay, but I'm saying if we can find something that's safe that is not appealing and we can hold our nose for three years to make progress on Sally, that's what I want to do. I want Sally gone because then we start saving to buy something yes okay and just as a side note usury when it's referring to interest in the bible uh is overcharging interest so like a payday lender would be usury excessive interest

is usury not just interest so interest is not against the bible but excessive interest is usury, not just interest. So interest is not against the Bible, but excessive interest is against the Bible. So Sallie Mae is not excessive interest. And we're just going to get you out of it, though. We'll help you with it. Hold on, and Kelly will pick up, and we're going to get you signed up for a whole year membership in Financial Peace University. You can go to the classes online. You can go to the classes in person. And you can have the EveryDollarPlus.

And we're going to walk with you. And you call me back if you're scared while you're working on this. I'll walk with you. You can do this. You can turn it around. You got the stuff. The main thing you've got is that level of disgust. That's a precursor to changing your life right there.

This is the Dave Ramsey Show. We'll be right back. in the lobby of ramsey solutions ray and liz dropped by from miami florida they were in the neighborhood hey guys how are you hey dave how's it going? Good to have you guys. How can I help today? Oh, we had a question. So I work for a startup, and it's not looking too great. I've been there for a couple years, and I've loved it. And I wanted to know your opinion on whether we should consider out-of-state job opportunities and leave what we love, what we've built in Miami, or stay in and stick it out and see what happens next. Okay. What do you do?

I work in the TV industry. I manage nonlinear platforms, things like Hulu, Amazon, things like that. Okay. And what do you make? Six figures. No, you. Yeah, six figures. That's what we've got to replace if you lose your job right that's

what we're talking about yeah okay and ray obviously has a career as well yes sir okay can we eat on what ray makes if you don't make anything for a little while liz at times okay i'm a musician and um comes and goes it comes and. I have what's called a fluctuating budget. Absolutely. So there's months where I can make $5,000, and there's other months where I make $1,200. Liz, if you were going to guess how far before this place closes up, shop on you, how far would you guess? Well, there were layoffs today, and i made it through past today but it looks like through the end of the month things can i will keep changing it could go that fast yeah okay all right so uh there's storm clouds coming you know and so what we do

stop everything as far as baby steps and that kind of thing you start piling up cash well we have our six months done okay it's good uh our retirement looks great our investments look great so we're doing good all right well miami is a vibrant media market it's one of the uh what top five cities in size and and so the media market is huge there there's a lot of stuff going on a lot of tech stuff going on there. It's a dynamic, big market. So I would think if you don't keep your search too narrow, in other words, if you broaden what you're willing to do or able to do, don't just say there's only one little thing I can do.

If it's not Hulu, I can't do it, but it's got to be a broader thing. But the skills you've got, the technical skills you've got in the digital platforms, that stuff's exploding. I mean, our YouTube presence, for instance, here has just, in the last 14 months, has just gone bananas. And so that whole space, the Netflix space is exploding, all that kind of stuff. So I suspect you probably land something, especially if you want to stay there. The markets, you know, I mean, you're not telling me you live in a rural setting with 30,000 people in a little town and you hope you're going to get a digital platform job.

You know what I mean? You're not telling me that. You're sitting in freaking Miami. So I personally think you'd be okay. But, again, you don't want to too nuance your job search. Don't keep it too thin. Have it broad in how you're looking at it. But it sounds like you really want to stay in Miami. We love it we love it yeah i would stay yeah i would stay okay i

suspect you could probably take even some youtube strategies to uh medium-sized businesses and teach them how to grow their businesses with that and almost create your own little gig uh off of some of these skills or something like that. I mean, it's a form of social media that a lot of people don't realize is there. The power of video as a digital platform and using it as a social media outreach for a business, it's pretty freaking amazing when somebody knows how to capture it. And somebody like you sees that. Yeah, and I've gotten a couple of really great opportunities to go after the last few days um and so i'm wondering because of my skill set and

the number of years that i have maybe even working remotely or something like that yeah absolutely and you know you could again you could freelance some stuff and uh with what you're doing it lends itself really to remote and so you could be doing work in L.A., New York, and Miami all in one day for three different clients and, you know, running your own deal kind of, but just develop you a business model of some way that you're giving people lift, some way you're worth your money, you know. What are you doing for them that's adding value? And they write you a check for it, whether that's a, quote, employment or freelancing

or a business model of some kind on your own. I think you can do it. I don't have any doubt. The good news is you're in a really vibrant, dynamic industry in a vibrant, dynamic town. Right. And so you got a lot. And you got six months. Yeah.

Oh, and by the way, Ray's not afraid to work. So, you know. Oh, he's amazing. He's amazing. You know, we got all that going for us, right? So if you want to stay in Miami, I think you stay in Miami. OK. The days are gone when you have to head, you know, load up the truck and head to Beverly. You know. Yeah. I guess like a part two of the question is like how how to best manage those six months, because right now Liz is getting some opportunities, you know, in different places outside of Miami, you know. But when do you think it should be like, okay, around month three, you know,

that way we don't completely deplete, you know. Getting out of debt and building our three to six months was a challenge, but a great one, you know, and we're proud of it. You know, we don't mind replenishing it, you know. But it's kind of something that we want to treat with precaution as well. Absolutely. Since we want to buy a house eventually as well, you know. Well, the house comes after you settle this career issue.

Exactly. You've got to get the income stabilized. Then we'll talk about the house. But as far as the three to six months goes, how much of that to burn before you there? And the good news is, to the extent we can live on your income we're not going to burn any of it it's true your income and or liz just doing some part-time gigs here or there while she's looking for something well again if you pick up a small freelance job on your own liz oh yeah and we also have our own business on the site as well and i

do photography and i'm a calligrapher as well So work your butt off at that and backfill until you land something. But what I would do is say we're not going to touch this, but if we do, when we get down to X, that's going to be when the bomb goes off and our willingness to move just occurred. You know what I'm saying? The bomb went off, right? But until then, I think you make it. And I think you're going to turn the corner. I don't think you have an issue. You know what I'm saying? The bomb went off, right? Okay. But until then, I think you make it. And I think you're going to turn the corner. I don't think you have an issue. Okay. You're going to end up making probably more as a result of this instability rather than less.

Wow. When the smoke clears two years from now, I predict your income is going to have gone up 50%. Okay. That's my prediction. Cool. Thanks for the call, y'all. Thank you.

God bless. The call. Thanks for dropping by. call, y'all. Thank you. Thanks, Dave. God bless. The call. Thanks for dropping by. Well, there you go. Andrew is with us in Charlotte, North Carolina. Hi, Andrew. How are you? I'm great, Dave.

Thank you for taking my call. Sure. What's up? Well, I finally decided to get control of my family's finances, which is a good thing. And just trying to figure out, we're kind of past baby step number one, but have more money in savings than the $1,000 that you recommend, and have $48,000 in debt, and just trying to figure out how to prioritize those debts. Okay.

We tell folks in baby step two to use the debt snowball, and that's list your debts, everything but your home, smallest to largest. Pay minimum payments on everything but the little one, and attack the little one with a vengeance, using all non-retirement savings or investments liquidated and thrown at that, down to $1,000. So my smallest debt is $1,900 for furniture, and we have that at 0%. How's that working for you? I'm sorry? How's all this debt stuff working for you?

It's not. That's why you called me. So who gives a crap what the percentage is? Pay it off. Okay. It's not a math problem. It's a time-to-clean-the-miss-up problem. You have $48,000 in debt.

How much do you have in savings? $3,500. Okay. Well, the $1,900 just got paid off then because we're taking $2,500 of it out and paying that off today. And what's your household income? About $90,000. Good. That's good news.

Okay. What is the nature of the $48,000 in debt? What kind of debt? Well, there's $25,000 in a vehicle, $1,900 in furniture, $7,000 in debt. What kind of debt? Well, there's $25,000 in a vehicle, $1,900 in furniture, $7,000 in student loans, and about $14,000 in credit cards. Okay, cool. Sounds like the credit cards are going to be

some smaller ones that'll break down, because we don't pay it by category, we pay it by debt. No, the credit card is one credit card. Oh, it is one credit card. Okay, cool. Then the student loan's next. And let's tear into it. All right. Get yourself on a written budget.

Jump on everydollar.com and get your budget going. It's real easy to do there. Use that app. It'll help you. It's free. And load it for your iPhone or your iPad. And, you know, just tear into this thing, man. Here's the thing.

You should be debt-free in about 18 months with what you make. 100% debt-free. What would it be like to have no payments but a house payment? Wow. You can do this. But you've got to live like no one else, so later you can live and give like no one else. It's time. You make too much money to be this broke. This is the Dave Ramsey Show.

Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at daveramsey.com slash show