The Ramsey Show - App - YOU Are the Key to Getting Out of Debt (Hour 2)

Episode Date: May 29, 2020

Home Buying, Savings, Debt, Budgeting Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

live from the headquarters of ramsey solutions broadcasting from the dollar car rental studio this is today ramsey show where america hangs out to have a conversation about your life and your money i'm anthony o'neill joined by my good friend, my co-host, Dr. John Deloney. We call him Dr. D. We're going to be taking your questions here today, 888-825-5225, 888-825-5225. We're going to be taking your questions around money, if you're single, millennial, or older, or wiser, or brighter, or you just have questions. Anybody. Anybody can give us a call. How are you, man?

You know, man, I'm not okay, but I'm okay. I'm on a show with you, so I'm good. You're going to get there, man. Man, it's going to be a great hour just having a good conversation and just talking about life, man. How are you? How is life going here in Franklin, Tennessee? It's beautiful, man.

It's a beautiful Friday. It is. It's almost time to check out for the weekend. It is. We had a short week this week. I can't wait. I can't wait, Tennessee. It's beautiful, man. It's a beautiful Friday. It is. It's almost time to check out for the weekend. It is. We had a short week this week. I can't wait. I can't wait, man. I'm going golfing tomorrow.

Oh, my gosh. Golfing's the worst. You know how terrible I am at golf? Yeah, so we're going to go to the phone lines. Go fishing like a grown-up. Go fishing like a grown-up. We're going to go to the phone lines because this man just played the golf world, and I don't want to get in trouble on the Dave Ramsey show.

So we're going to go and have a conversation with Derek, man. Hey, Derek, thanks for calling in, man. How can Dr. D and I help? Thank you all for taking my call. Huge fans of the show. I really appreciate everything that you all are doing for everybody. I hope your families are safe and you all are doing the best you can through this pandemic. You too, Derek.

Thank you so much for calling. How can we help? All right. So real quick, real quick story. So 25 months ago, I started the Financial Peace University journey. And that's the first night that I actually watched one of Mr. Ramsey's videos that sent me into the worst case of depression I've ever been in. We all abate. Both of us have been there too. Welcome. It's funny. The next morning, I actually went to my pastor and I pulled him off to the side and said,

Hey, I'll do the Financial Peace University. He said, Sure. He said, Do you have any questions? I said, No. I just wonder if it comes with therapy lessons. So thank you, Mr. Ramsey, for me whenever you get a chance. We will. Fast forward 25 months, I paid off $76,400 out of my debt. I'm very close. I'm not debt-free yet. Okay.

How much more do you have to go, Derek? I got about $75,000 left. Okay. Halfway home. Good for you, man. Halfway home. But I'm doing it at my own pace. I am single and no kids uh mid-30s have a good job but it was uh it was his first video that that really made me wonder hey where's all my money going okay well

that that was the hard part about it so the single life was great don't get me wrong um so let's go ahead and bounce the chapter two. All right. So what I've got going on is now I'm, I'm being very responsible with my money. I've put up a very large nest egg, which is the other part that I wanted to talk to, especially you, Dr. Deloney was, uh, instead of doing everything just perfectly through the way Ramsey solutions wants you to do, uh, I had to adapt a little bit to, to my, my needs directly. Instead of putting up just a thousand dollars for, for my security fund, I actually put up $10,000 just because of the what ifs.

I'm not suggesting everybody do that, but I just made it fit to my individual needs. So what's, so what's the individual needs. So what's your question? The question is that I'm actually about to build a house, and the what-ifs are really bothering me to the point where I'm actually backing out of it on a constant basis. I wondered if you could give us some insight on how to handle all that and just really push forward. So do you have your down payment saved up? I do not, and this is just a process, so that will be happening.

So let me just kind of cut to the chase. Fear, right, it's an alarm system inside of us um that lets us know that we're in an unsafe situation right and you unfortunately slash fortunately have crossed a magic line and now you know better and so your um your fear alarms are going to tell you hey you want to buy a house you want to buy this place you want to, hey, you want to buy a house, you want to buy this place, you want to buy this land, you want to buy this whatever. But you also know you're 35, you're single, you got $75,000 in the hole still. You're exhausted after sprinting for the last two years to get the first 75 paid off. And it's both great that you're halfway home, but you're also

only halfway home, right? You're halfway, you run 800 meters of the mile, and you're and it's both great that you're halfway home but you're also only halfway home right you're halfway you run 800 meters of the mile and you're tired and um i'm gonna tell you don't buy a house i'm gonna tell you to suck it up pay off your debts and then you're gonna feel this fear dissipate because you know better yes and you're gonna have freedom to buy what you want to buy right you're gonna have freedom to live on the other side of that. And that's going to cascade off into your relationships. It's going to cascade off into your work environment. And we hear, Anthony, we hear all the time folks who go through financial peace and suddenly halfway through they get a promotion at work

or they've got to look themselves in the mirror and face that they're not a very good husband or a very good wife and they've got to fix their relationship, be better parents. And there's something about getting on a plane and going down an avenue that all of a sudden you start looking around everywhere and you see yourself out of control. And here's the thing, Derek, that I really want to address because I agree with Dr. D here. Do not purchase a home. Here are a couple of concerns that I hear within your call. It's one that you have $10,000 in an essay. And I totally understand that you may want

a little bit more than $1,000. And let me say this, the $1,000, we know that that's not enough. We didn't create the baby set number one for it to be enough. We made it so that way you can get out of debt quicker to get to your three to six months. So what I'm going to suggest is I'm going to suggest that you take $9,000 of that, put that towards the $75,000 less towards your debt. That means you're going to have about right around $66,000 and work hard and do not purchase a home. One of the reasons why you're still, I believe, kind of fearful is because you have all this debt over here and you're kind of nervous. But see, you will not be fearful if you don't have any debt. If you had a fully funded emergency fund, you'll be running towards getting into a home because you have a solid foundation. And so I remember when I purchased my house, Dr. Dave, it felt so good because I saved up a lot of money put down towards my house.

But I was out of debt and i had a fully funded emergency fund and i was actually going to build my house and when i walked into that house i was like fear i'm like this is beautiful it's mine it's mine and i did it right because i actually waited i had patience and then let's say you you buy that and then you get fired the next monday i ain't tripping. I got six months to figure it out. And so my heart rate stays low. And do we know that some

pandemic's going to come through town? No. I guarantee you something's going to. And the last thing I'll just throw out here to Derek and to all those folks who like the ideas, like the I don't know, the concepts. Yeah.

You get yourself into trouble when it's like, I know that's good for you six or seven or ten or however many millions of people who have done this. I like your idea. I'm going to do it my way, though. And I'm telling you, Derek, I'm a guy who tries to figure out the way or on the way or on the way. Yeah.

And all it's done is get me in trouble over the years financially, relationally, and there's just a plan. Follow the plan. Do it the right way. Suck it up. Pay off your debt. And then go buy yourself an awesome house. Why would you want to cheat the plan when the plan is a proven plan

and it's worked for millions? Right. Do not cheat something. If I see that helped him become a millionaire, I'm going to go that route because it's a proven plan. And what I would say is your plans up until 36, not proven. Come on, man. 888-825-

525. 888-825- 525. This is The Dave Ramsey Show. Business leaders, now more than ever, we need people with the right skills to support our communities, especially the frontline workers who provide resources and care for those most in need. To help, LinkedIn is offering free job posts for healthcare and essential service organizations that need to quickly fill critical roles with the people who help us all. If you are hiring for one of these organizations, free job posts on LinkedIn can help you quickly find the right people for your frontline. LinkedIn Jobs can help by screening candidates for skills and experience you're looking for

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Dr. D and myself, Anthony O'Neill, taking over the show for the one and only Dave Ramsey. We are excited. We are completely honored to have a conversation with America, talking about your life, your money. And on today's show, I love it because we're actually really talking about life with Dr. D, money with AO. And we're going to go out to Nebraska and have a conversation with Logan. Logan, thanks for calling in. How can Dr. D and myself help? Thank you guys for what you do.

We appreciate it. Thank you, man. How can we help? I am wondering, we got out of a profession to where we're going to have a pretty serious tax liability come next spring. Okay. And because of that, we do have the money available now. And I'm just wondering what's the best vehicle to park that money in right

now for maybe the next six to nine months would be. Yeah. How much are you going to have to pay back? It's going to be 40 to 60,000. Okay. So we, so we's going to be $40,000 to $60,000. Okay. So we need to figure out somewhere to park $40,000 to $60,000. All right. What's your total income right now?

Well, this year it will be higher because we were in farming. Okay. But we carried over some grain into 2020 and sold it in 2020. Okay. So we're looking at you know 150 200 000 aggressive gross income for the year love it that's a good grain year logan yes well it's that farming deal where you hold the grain over and you know eventually the taxes catch up to you you know uh so here's the thing uh when comes to short term saving, Logan, if you want to sack away at least forty sixty thousand dollars.

And I definitely want to tell you, I commend you for saying, you know what, let me get prepared for the future. Yes, that's that's a farmer right there. Absolutely. And that's a wise man right there. So, Logan, here's the thing I want to suggest. I want you to part this into a money market account or you can part this into an online savings account with high yielded interest. And so if you just put that $60,000 over there for the next six to nine months, you know, you're not going to make a lot of money on the high yielded interest side, savings side or the money market account. But you may get a couple hundred dollars, you know, and that's going to sit in your pocket when you cut that check back to the IRS. But that's those are going to be the two ways that I suggest that you go ahead and park for a short term savings account. But I just commend you because there are a lot of people out there in the world right now, Dr. D, who are not thinking about that. They get all their money and they want to get to when it gets time when it turns time to pay the IRS back. They're stuck and they're hurting. And that, to me, is the beauty of the farmer who always knows at some point we're going

to have a drought. At some point my fields are going to flood and we've got to have some money for tomorrow. Good for you, Logan, man. Good for you. Good for you, Logan. We appreciate you, man. Going out to Washington, we're going to have a conversation with Seth. Seth, how can Dr. D and myself help?

Yo, what's up, Deloney? What's up, Ayo? How you guys doing? Man, I'm doing good, man. Outstanding. We're in Nashville, Tennessee. How are you? I like his energy. I'm doing good, man. Like, Ayo, when you said, I'm not doing good, but I'm doing good, I know how you feel. I'm feeling that way, and that's kind of for Dr. Deloney. But, man, a good day would be playing some golf and then going fishing. So put those two together.

America, this is what we call schizophrenic right here. No, no, no. No one's struggling with both sides. Seth, I got your back, man. We can go golfing, and then the next day we can go fishing. I'm with it. I'm from San Diego, California, so I love it all. Seriously, though, man, how can we help, bro?

Talk to us. You know, Dr. – well, help, bro? Talk to us. You know, this is for you, Ayo. Sometimes you're just in your fields, and this is one of those days where with all the George Floyd stuff going on, and I work very much in the minority community 24-7, and I'm feeling this differently than other people feel it. What is some advice that you can give for people to help? Because people are like, yeah, hashtag this and hashtag that. But it's like, no, that's not what we need right now.

We need people having these conversations, you know. So what's the best way to initiate that conversation for tough things like this that people don't know about? Man, thanks, Seth. And, Anthony, he directed that to you. I'll pipe in. This is a heartbreaking moment of solidarity. Heartbreaking. And, yeah, Anthony and I spent some time talking about this the other day.

It is. How are we going to be united as a community, as a couple of friends, as a country? So, Seth, so I to answer this question correctly for you and get straight to the point with you. What exactly are you asking me? So I'm saying when we get in our field like this, like, oh, man, I want to say something, I want to do something, what do we do? Like, I know what to do.

We're a family like that. But what can other we do? It's like, I know what to do. We're, we're a family like that, but what, what can other people do? So like for the listeners are, are the best advice coming from that perspective, you know? Um, yeah,

that's a good question, man. What can be done? Yeah, that's definitely a good question. And here's the thing, Seth, I'm going to recommend is,

um, be loved, be gentle, be kind and just tell the truth, you know? And that's the one thing that, that I'm telling people, um, all over who's asking me, what can I say? What can I do? And it's really just about being loving, being kind, having a Christian heart and just telling the truth.

And what's wrong is wrong. What's right is right. And the truth, I believe, will set us free. And so when you're honest, when you're respectful, when you're loving, when you're kind, that's when and not just kind. You got to be sensitive as well, you know, because to some people, this may not mean a lot, which I don't understand how it can. But to some people, it may not mean a lot. It's hard to have a soul. It does not mean something. Yeah, it very, very much so is. And so for me, I am learning to just just just keep my my thoughts a little bit internal, be kind, be loving, but also be honest. And I think it's important, Seth, to, number one, find some people in your life that have wisdom. It's natural to feel emotional.

It's natural to want to lash out. It's natural to want to go find somebody and be emotional and just want to go start swinging. That's a natural response. And there's also other responses where I just want to turtle up and pretend this thing doesn't happen. And either of those are not good responses here. And so I think it's finding people that you trust. It's finding people that are wise. And then being honest with your kids.

Being honest with your kids. Rachel says it best, share, don't scare. But our kids need to know the truth of the world that we're living in and the role that all of us are going to play in loving one another on the back end and honoring each other. I believe it's Maya Angelou who said, do the best you can, and then when you learn something new, do better. And then when you learn something new do better and then when you learn again you do better and so that's that's the way i try to live my life and i think it's important

to say um george floyd's name i think it's important to acknowledge his mom i've hugged too many moms who've lost too many kids um and the whole situation is heartbreaking it is and i think it's important that we come together as a community. And at some point, we got to say, here's the truth and let's do better. Yeah, I definitely agree. We have to definitely do better and definitely show love and honor and help. And one of the key things that I'm doing is just really even going louder with my message, because if I can help more people get out of debt, if I can help more people take control of their finances, then I can help a lot more people that will definitely help out even in situations like this. So, man, that was a great question, man. Great question. Great question. Dr. D, man,

your YouTube channel is blowing up right now. And we actually had a good conversation that actually can even come off of this. You asked me, what is your new normal? How do we adapt and adjust to this new normal thing? Give the listeners a little bit about what you're doing on YouTube and how you're having this conversation. You're even about to have a conversation down the road on how do you have the hard conversation on your YouTube channel. So give the listeners a little bit of what are you doing on your channel and how is it helping people?

Well, I think my YouTube channel is doing well because you were a guest on it and you have about 8 trillion followers on your... I don't even know what you do. You should teach a YouTube course at local colleges. That's why, but you were a guest on there. The big deal is just to have some short snippets for folks to pick up some quick tips

on how to live our lives better, how to be better brothers and sisters and husbands and community members and neighbors. I'm talking about that, how to have hard conversations. How do you, how do you talk to your kids about sex? How do you talk to your neighbor about, um, how do you apologize to your neighbor when you do something wrong? You say something wrong. Um, how do you tell your wife? I'm sorry something wrong, when you say something wrong? How do you tell your wife I'm sorry? So it's a way to have conversations. It's a way to connect with one another.

And it's a lot of fun. Chad Horner, the producer, man, he's rocking the YouTube clips. He's gifted at that. He's really gifted, man. He's doing some creative things with his iPhone. So I like that. I really do. Hey, you guys, this is Dr. D, Anthony O'Neal, on The Dave Ramsey Show, 888-825-5225.

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determined to help build and modernize american manufacturing to learn more and get this month's dave ramsey special visit grip sixRIP6.com. That's GRIP6.com. Sitting in for Dave, Dr. Deloney, and myself, Anthony O'Neill, Ramsey personalities. Completely honored and grateful that while Dave is out and enjoying his free time, he will trust us in his chair. I wouldn't trust us, but Dave does. You're a liar. I trust myself. I would trust you. I don't know if I'd trust you, but... I'm not there yet. We're getting there.

We're getting there. This is fun, D. I really enjoy doing this show with you, man. This is really good. I was kind of skeptical when you first joined the team. You were skeptical that in six months, somebody's going to run past you. You've been here five years oh okay hey man it's a team effort man one one ramsey personality wins we all win i know but the important thing is that we've all watched the

last dance and team's important you're pippin but they love Scotty Pippin. You got 888-825-5225, 888-825-5225. Dr. D and myself here are answering your questions around life and money. And we're going to go out to Mississippi and have a conversation with Will. Will, how can Dr. D and I help, man? Yes. So I've been consuming a lot of Dave Ramsey's material over the past couple of weeks since COVID hit and already got Baby Step 1 knocked out. I mean, that took a week.

Congratulations, Will. Working on Baby Step 2, and I'm looking at about $25K in credit card debt, and I was wanting to know more about balance transfers, and I have one credit card that is really high interest. It's the snowball. It's at the bottom, and I'm kind of worried about it. I wanted to ask your opinion about balance transfers and changing that $11,000 credit card bill into four $2,500 bills and then using some of the perks they're offering, which is 18 months, zero interest.

I've listened to Dave talk about, you know, you could do it, but, you know, you really haven't done anything, and don't take it as, you know, psychologically that you're doing something. You're just moving money around. So I wanted to get some more opinions from you guys about that well what's your total amount of debt is it just 25k in uh credit card debt it's uh 20 000 student loans so i was going to use the money that they are i went and checked all my student loans to make sure that they are um not gaining interest or principal during the COVID because they're all federal loans. So I'm not having to make payments on those until the end of September.

$7,000 left on a car loan, and that's where I'm at. So, yeah, total $47K in debt totally. What's your annual income right now? Between me and my wife, around $75K. Okay, so your family income is around $75K, and you have $47,000 in debt right now. Yeah, so the 18 months, I feel like we can get through all of this. That's how close we are, and I think the house payment is $1,400.

I think that's where the next question is going. I'm sorry. Okay, so we're not going to worry about it. In Baby Step 2, we're not going to worry about the $1,400 We're not going to worry about the fourteen hundred dollars in your mortgage payment. All right. Because baby set number two is you pay off all your debt, excluding your mortgage. When it comes to your debt right now, I want you to line it up in your debt snowball. And so I'm going to echo what you said you heard from Dave. If you move it over to a zero interest, I'm OK with that. But before you even do that, I want you to line it up in your debt, snowball and attack it.

Now, if you can get zero interest and you can get the interest payment down, I am okay with that. But at the same time, it needs to be no payments, no penalties, nothing. That's going to harm you to do that.

But I agree with Dave. If you didn't do anything. Okay. So right now you need to be lining it up inside of your debt, snowball and attacking it. You've got to get on a plan. You've got to get on a budget. And with 75K income, I would definitely look at your budget and see where else can you maybe cut off on some things so that way you can attack this debt snowball.

But when it comes to the – go ahead. I've got the budget all knocked out. We've cut down everything we possibly can, and we're down to just debt. So that's what we're focusing on right now. And Will – I'm wanting to get this interest, the interest on those cards, though, is worrisome on how long because it's going to go beyond, you know, what we've planned for this 18 months.

Well, Will, and I want to tell you this i when i went through this process it's six figures worth of debt piles and mountains and i got this plan i saw the plan i got my emergency fund and immediately my scheming brain got to work. And I felt this compulsion to do something. And waiting every month, I got paid every month. So waiting once a month to do a thing wasn't enough. I felt like I needed to be doing more of this and more of that. And man, I ended up in a bigger mess than I started with. And so I was moving this balance to that balance and that balance to the, like Anthony says, if you can go down that road, I've got some friends in my life that can do that.

They can balance those payments around. They can find the best interest rate while they're paying off their debt. I had to look in the mirror and say, I can't do that. It just became a bunch of schemes and chess shell games for me, dude. Just suck it up and pay off the debt. It's going to take a while. It's going to be painful. Go jogging instead, man.

Go jogging instead. Go fishing. The number one way to get out of the debt is not balance transfers. It's going to take a while. It's going to be painful. Go jogging instead, man. Go jogging instead. Go fishing. The number one way to get out of debt is not balance transfers. It's you. You have to be intentional about what you're going to do. And as long as you are intentional, and I hear it in your heart, man, that you are definitely focused on it. So I'm okay with that. But then I don't want you to look for the next thing.

What can you transfer? What can you do? No, I want you to attack the debt snowball and get out of debt. You are the number one person that's going to get yourself out of debt. But if you can save some money by getting a lower interest rate down to a zero interest rate for those 18 months, you can take advantage of that. But again, you are the person. Going out to Texas, we're going to have a conversation with Hillary. Hillary, how can Dr. D and I help? Hi. I'm concerned because my attention deficit disorder has gotten the best of me when it comes to handling my finances. It seems like impulsivity

is the hallmark of anyone who has attention deficit disorder. So I get money and I spend it, and before I know it, it's always gone. And I don't have anything saved up for retirement, and this is a concern of mine. So I was wondering, is there any way to, if there's a bill to be paid, I know I can pay it. I'm good about it when it comes to paying my bills. So, Hillary, ADD is not to blame for your spinning impulsivity. Thank you. Okay. Okay. And this is from a, a, I'm in your, I'm in your camp and all ADD is, is a disconnection disorder. That means that for, for some history in your life, probably when you were younger, you've had some sort of breach in relationships and that busyness, excitement, spinning out, all of those compulsory behaviors that happen on the back end of that deal result from a lifetime of disconnection. That's for you and a counselor to work through,

but what I don't want you to do is to separate yourself from the behavior of paying your bills and saving your money. And so if you do have compulsion, if you do spend, put the ADD aside and say, me, Hillary, I spend too much money. I don't have good self-control over my money. And find some people in your life that can hold you accountable, whether that's a spouse or some friends. That may be like me. There was a season when I didn't carry my debit cash in my wallet, whatever the plans were.

But I don't like people taking their diagnostic and making that the reason why they're doing certain things, especially when it comes to ADA and spending. You're in control of your spending. You're in control of your behavior. And if you can't control it at point of sale, control it upstream as far as you can with the help of others. You know, the greatest enemy to your success is your excuse. Well, and sometimes mental health issues aren't – they're a context, not an excuse. That's the way I like to say them. So they are what they are.

We wrestle with them. Sometimes they're brain chemistry issues. Sometimes they're relationships issues. Sometimes they're long-term, they're short-term. But I still have to take ownership of those behaviors, whether they're learned behaviors or psychiatric behaviors. I got to take ownership of those behaviors, whether they're learned behaviors or psychiatric behaviors. I've got to take ownership of what's going on. And that means I've got to get the help I need.

That means I've got to get people in my life. That means I've got to take my own debit card out of my own wallet to keep me from making decisions that I know are going to harm me. Yeah, man. I agree. Man, I don't want to add any more to that because you're absolutely right. And I definitely agree with the context. Hillary, take ownership. Take take ownership you've got this i love to call and i love somebody saying i struggle with this but my goals are here go make your goals happen you're already stuck at home so next time your appliances go out, fix it yourself. My friends at Appliance Parts Pros have helped over 7 million Americans fix their appliances safely at home while saving up to 90%.

They carry over 2 million appliance and outdoor power equipment parts. Plus, watch how-to videos and chat live with pros on their site. Get your parts today at Apppartspros.com. Sitting every day, Ramsey, Dr. Deloney and myself, Anthony O'Neill, Ramsey Personalities. Having a good time. It's been a great show today. You're welcome. You know what, Dr.

D I just love the energy you bring to the team. And you're one very, uh, what's the proper way to say this? Let's go to the next call. Y'all before we go to the next call, man, you guys,

Hey, I want you all to make sure that you follow me on YouTube. I am releasing something very, very great next week, releasing a singles panel. I had a real conversation with a bunch of single people talking about money, talking about life, talking about how they feel. And I'm really excited about what the world will be able to see. So I want everyone to go to my YouTube channel, youtube.com forward slash Anthony O'Neill. I saw the footage. It looks remarkable.

It's real good. It's great, man. We have, you know, the gospel artist, Mandisa. She's on there. Annie Downs, a very influential individual is on there. So it's just a real conversation with young people about where we are in life. And so I'm just extremely, extremely grateful. So please go over to youtube.com forward slash Anthony O'Neill. We'll

be releasing it Monday morning at 8 a.m. And it's going to be a great day. We're going to go over to Idaho and have a conversation with Sherry. Sherry, how can Dr. D and myself help? Hi, thank you guys for taking my call. Yes, ma'am. I've been working on the Dave Ramsey plan for a couple of years. I've paid off almost $60,000 in debt. Yeah. I paid my house down to where I have $53,000 left and five years left.

I've owned it for five years. Oh, God. I'm trying to knock that down to two or three years, but I just had a monkey wrench thrown into my world and I'm not sure what to do. So I'm calling. I have an emergency fund of $20,000. I have a $5,000 car fund, not enough for a reliable vehicle with the needs that I have for it. I planned on keeping my car until my house was paid for and adding to my car fund. But this week, some things have happened with my car, and I can't keep it. It has electrical problems, and the frame is rusting out. So I'm going to need another vehicle.

I have to have either an all-wheel drive or a four-wheel drive because of where I live. And I don't, my husband works out of state. I'm home alone a lot. I need to have a reliable vehicle. Obviously I'm looking at you. Um, but I, I really, when I look at what's out there, I'm looking at a 10 to 15,000 for, I know I can get something cheaper, but for something that I could feel is trustworthy and reliable and have the four-wheel drive or all-wheel drive that I need. So what's your household income, Sherry? It's only $72,000 a year. Don't say only. That's remarkable. That's good. You're doing well.

You're above the average, okay? So that's what Dr. D is saying. You're above the average. So be grateful for that. So you have twenty thousand dollars in emergency fund. You're completely debt free, excluding your mortgage. Correct. Correct. And you have five thousand dollars in side of your car fund, how long would it take you with your current income to get another $5,000 to $10,000? Because I think you can honestly get a dependable car in Idaho for right around $10,000. So how long would it take you

to save another $5,000 if you maneuver some things around in your budget? How long would that take you? I can come up with $4,000 in three months. I know for sure. Okay. So that's cutting every corner that I can right now.

Okay. So I know that I can do that, but what I don't know is that I can make it three months without the car, you know? So, Anthony, it sounds like this is what the emergency fund's for right and sherry i know you sound excited that you want to pay the house off life threw a wrench at you it threw a wrench at you and um like anthony said get a 10 or 15 000 get a good get a good used tundra and with four by four and you get the one for 15 000 bucks and get you ready to go right yeah and then you got to pay yourself back. Am I on the right track, Anthony? Yeah.

You know, Sherrod, that's going to be my suggestion for you. I have no problem with you diving into your emergency fund. I do not want you to go out there and buy a $20,000 car. I want you to go out there and do some research, all right, and identify how much do you need to spend to buy a dependable car. So try to look for something around $10,000. I don't have a problem with you pulling $5,000 out of your emergency fund because this is an emergency. You need a car, especially to get back and forth to work. But here's the thing.

Whatever you take out of the emergency, you need to pause everything else and put the money back into that ASAP. So if you take out $5,000, then over these next 30 to 90 days, however long it will take you, you need to put that money back into your emergency fund. But that's a great question. And I loved how you said, like, hey, I want to pay off the mortgage,

but, you know, pause on paying off the mortgage right now and just go ahead and get your dependable car, especially if you're being at home completely by yourself. And that's frustrating. That's life, right? I mean, it's life. It's frustrating. It's life. But that's why we're prepared. So now this is not just an emergency. It's just an inconvenience. It's annoying.

I like that word, annoying. Going out to New York, we have a conversation with Sabrina. Sabrina, how can Dr. D and I help? Hi, Anthony. Hi, Dr. D. How are you guys doing today? We're doing all right. I'm doing great. Good, good, good. How can we help?

I just have a question. I'm looking for some advice. My husband and I and our three daughters, we live in a two-bedroom apartment in Brooklyn. That's a lot of people in two bedrooms. Yeah. Well, I mean, they're really small, seven, four, and one. So we still have a little bit of room. They're small. Good, good, good. We pay $13.50 a month for rent, which is like unheard of in New York and Brooklyn.

I mean, how did you get that? Let me ask you that question. That's unheard of in rural Texas. That's a good deal. Wow. Well, it's family, but we've been having some issues lately. So, yeah. So, like, we're trying, we want to buy, but we're on baby steps, too. So we're not there yet. We haven't started saving up for that yet. And yeah, we haven't been able to find anything in New York for that price range.

And the $13.50 is actually one-fourth of our pay, our take-home pay. So I just needed some advice. I don't know what to do at this point. And so are you asking, should you leave? Should you rent? What's your exact question? So I can make sure I'm clear. Yeah. Should we leave? Should we leave? Should we start saving up for the house, even though we're on baby step two? Like what should we do? Because it's almost guaranteed that she's going to, our landlord is going to raise the rent come October and it's going to be more

than one for us. Yeah. Yeah. So here's the thing, Sabrina, this is what I's going to be more than one for it yeah yeah so here's the thing sabrina this is what i want you to do is i do not want you to purchase anything you're not going to save up to i mean you're going to be saving uh to pay off your debt but right now you're not saving to purchase a home you're going to get on babysat number two you're going to pay off babysat number two then go ahead and get your fully funded emergency fund which is three to six months uh but right now i'm going to have a conversation with your landlord and see exactly hey is my rent going up and how much is it going up and then i'm going to compare that against other properties out there and i can almost say i don't think she's going to go up to 17 1800 bucks so if she goes up to 14 50 1500 bucks that's still going to be cheaper than

most um apartment complexes or anything else out there, especially in New York. All of them in Brooklyn. Yes, especially. So I'm definitely going to sit here and say do the research first before you make a decision. Pay off your debt. Get your fully funded emergency fund. And then assess the situation. But that was a great question.

Anything you want to add to that? I was going to say, yeah, you yeah you nailed it facts are your friends um we we do a lot of mental gymnastics a lot of fake mental math problems in our heads and we end up getting ourselves worked up without knowing the data so i like it i like what you said go call her bluff go sit down and ask go call her bluff last call for the day going out to nebraska talking. How can we help you out, man? Hi, Anthony. Hi, Dr. D. This is Matt. Just wanted to know about how to make a decision between when to dip into your

emergency fund and when you have a couple of different choices and they vary wildly in the amount of money that you would be spending on something. Yeah. That's a good question, man. When it comes to the emergency fund,

you use it if you absolutely are in an emergency, not just because, you know, you need to feel like it. So if it's a life-threatening issue, it's a family-issued emergency, then that's when you use it. But if it's a new mower, borrow a neighbor's. America, I want to thank producers James Child, social producer Kelly Daniel.

Remember, the caliber of your future will be determined by the decisions we make today. I want to thank you all so much. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes or head to DaveRamsey.com.