The Ramsey Show - App - You Can't Fix a Behavior Problem With a Math Solution (Hour 2)

Episode Date: November 26, 2019

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Music Music 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.

Suzy starts off this hour in Hawaii. Hi, Suzy. Welcome to the Dave Ramsey Show. Hi, Dave. How's it going? Better than I deserve. What's up? Good, good, good. Dave Ramsey show. Hi Dave. How's it going? Better than I deserve. What's up? Good.

Good. Good. So, um, my husband and I both have, uh, received an inheritance this year. Um,

he is Australian. So his was, uh, Australian inheritance. So we put it in a bank in Australia. It's 115,000. Um, and we've kept that there because the exchange rate is so low.

So that's in Australia. And I've just received about $350,000. And so we are self-employed. So we don't have any retirement. So just wanted to know the best thing to do with our money. Do you have any debt? We do. We have a house mortgage, $200,000.

In business credit card bills, we have about $20,000. And then IRS repayment plan, $13,000. And auto loan at about $4,000. Okay. If you raise your right hand and promise to never borrow money again, and if you get on a budget to prove it, that you're never going to borrow money again, and if you start handling money together to where you never repeat the mistakes that have gotten you into the messes you just described, then I would write a check and pay off all these debts,

and I'd be 100% debt-free. And then I would use the household cash flow that used to be used for payments to build wealth with, and you'll have the 300 000 back in no time but if you pay off everything and you continue your sloppy disorganized ways of buying crap you can't afford you're going to go back into debt and this money's going to have vaporized on you right so that's the discussion you've got to have at your house is are we going to honor the memory of the person who left us this money by changing our financial habits to look more like theirs because that's how they got that money

they didn't have irs they didn't have irs liens and car payments right okay and so if you're willing to do that then um the the proper advice would be to pay off everything it might be a good idea to say all right i'm going to pay off the irs today that's kind of a no-brainer right and i'm going to pay off my little car payment today and what was the other day other than the house um so my bill credit card bills which are on the business yeah i'm going to cut up the credit cards and never use them again i'm going to pay off all the debts except my home and then i'm going to get on a written budget and i'm going to be proved to myself that i'm disciplined and once you've proven that to yourself and you've lived on less than you make

and you start building up some savings because of that, then that would set you free to write the check out of the inheritance money and pay off the house. I'd be a little worried with no track record of being disciplined that you suddenly would grow disciplined. Right. If I were you, I'd be'd be i mean i'm a little worried about me and chocolate chip cookies right now so you know i'm a little i may be 72 percent gravy by this time thursday so okay so i mean you know i'm a little worried about all of us but so the point is don't you know don't fool yourself i I probably would go through Financial Peace University. I'd pay off all the little debts, and then let's get on it.

Let's have a new life because of this that sets us free to build wealth and go ahead and clear that mortgage after you've been disciplined for six months. You've been in control for six months, and you've vowed that we're never borrowing money ever again because you shouldn't need to. If you've got no payments, you ought to be able to save money like a wild person, right? Right, right. Yeah. So what is the history of the exchange rate with Australia?

I don't know the history. Has it always been about where it is, or has it just recently gotten worse? It's been about the same for a couple years, maybe one or two years. Okay. So what makes you think it's going to change in the next two or three years? Yeah, that's what we're thinking. You do think it's going to change in the next two or three years? No, no.

Oh, you don't. Well, if it's not going to change, there's no point in leaving it there. You might as well take the hit and move it on over, whatever the exchange rate issue is, and get your investments all stateside and start, you know, if you live in the United States, start doing, you know, good mutual funds and that kind of stuff. There's no rush, but, I mean, if there's a – I do not know any history at all on the Australian exchange rate. I know nothing about it. So if I were you, though, I'd be studying it,

because the only reason to leave it in an Australian bank is because you think that in a few years it's going to get better. But if you have no reason, based on history and track record, to think it's going to get better, then you're leaving it there for no reason. You might as well just say this is what the exchange rate is. It's just not good. That's the way it is. Chance is with us in Minnesota. Hi, Chance, how are you? Hey, Dave, I'm doing well. How are you? Better than I deserve. What's up? I have a question for you. So I've

racked up about $130,000 in student loans, and right now I'm paying all the minimum payments on time. I'm making enough money to barely make it by with enough money, like in my checking account where I feel confident. I have $1,000 saved up in my savings account. But what my question today is, my salary is going to increase in the next year. It's contractually obligated to double. So I'm wondering what you think the best use of that additional money would be, whether it's paying triple or four times on my student loan payments or saving it or sending it down for retirement.

Just kind of getting some advice from you there. Okay. Well, we teach a process we call the baby steps, which is the order of attack on your priorities of what to do with money. Okay? Priority number one is set aside $1,000. You mentioned that. That's baby step one. Priority number two,

the shortest distance between where you are and becoming wealthy is to follow these steps. And we have proven that with millions and millions of people doing this. Okay. It's not a theory of mine. It's a thing that tens of millions of families have paid off billions and billions of dollars in debt and have become millionaires. So it's really, really happening. Now, is it a get rich quick scheme? Oh, absolutely not. It's very difficult. So what is your income now? I bring in right around $2,600 a month. Okay. And so it's going to double to $5,000. So you're going to be making, that's your take home pay. So you're going to be making about $75,000 a year. I want you to live like a college student and clean your dadgum mess up.

And that's baby step two. Pay off all your debts. Because the shortest path is not to invest while you have student loans. The shortest path is to get rid of the dad-blame student loans as fast as you possibly can. Have no life until you get this done. Don't talk to me about you're tired. Go back to work. Some more, and again, and extra jobs.

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. Our question of the day is from Blinds.com, the number one online retailer of custom window coverings. You get free samples, free shipping, new promos all the time. Always use the magic word, the promo code Ramsey. Today's question is from Ryan in Wisconsin. Currently we're in baby step two.

Expect to finish that in the next 12 months. Our two kids have some money in their savings account that is sitting at the credit union. Should we take that and invest it in a 529 plan or regular mutual fund for them or just let it sit and wait until we hit Baby Step 5? We wouldn't add any extra money to it until 5, but feel like it's not doing anything sitting in a simple savings account. Well, if it's several thousand dollars, I mean, you can open a mutual fund in an ESA or a 529 if you want. If it's 500 bucks, there's hardly any mutual funds that do that. So there's a few

that do, but I wouldn't fool with it if that's all it is. The other thing you've got to decide is what is that money for? Is that their college money? And it sounds like you all it is. The other thing you've got to decide is what is that money for? Is that their college money? And it sounds like you've decided that. If it is, then yeah, we're going to move it towards a retirement account without a doubt. But, you know, our miscellaneous kids' savings account, we did not use for college. We used that to jumpstart their car savings, and they had to save up and pay for half their car. I matched whatever they saved for their first car. We called it 401 Dave.

I will recommend putting a limit on what you will match, because you will get the one kid that's the nerd super saver and will bankrupt you. All of a sudden, he's buying a $62,000 car because he put $31,000 aside and you had to match it. So you don't want to do that. So put a limit on, you know, I'll match up to $10,000 or something or whatever, up to $6,000 or $5,000, whatever it is you want to do. And, you know, once you've got that limit set, then you can match and do what you want to do for the kids. But if that's not what this is, if this is truly college savings, and yeah, I'm going to move it to an ESA into good growth stock mutual funds sooner rather than later.

Robin is in Georgia. Hey, Robin, welcome to the Dave Ramsey Show. Dave, it's such a pleasure to talk to you today. You too. What's up? My wife and I have been married for three years, and I've been a follower of you for, since I was in college, maybe 25, 26 years. And so when we were able to make all of that legal, you know, I said, let's look at this plan. And she had, we have together about $30,000 in a bank account savings, and all we have debt-wise is we each have a car.

And I know it's a little dave-ish, but that was a compromise. That was the only way that she would be on board. We'll start paying off the debt, but I'm going to leave this money here. So I was like, ah. Well, then last Tuesday, her company called her in with the team and said, we're closing our doors in five to eight weeks. There'll be no severance package. There's no vacation payoff when a company closes store.

There's no COBRA. And so we're looking at going down to just my salary until she can find another job. We each, very ironically, make the exact same amount of money. Our household income is $200,000, $100,000 each. And with the two car payments and with the mortgage, we can certainly live on my income. It obviously won't be as much towards the debt as we've been paying the past six months. We've been on your program since June, although ish, I apologize. So the question is, do we take $29,000 of the 30 we have in savings without her working now and pay off, we each owe $20,000 on our car. So we have

$40,000 in car debt. Do we pay that down and and then go from there or do we just keep that money and make minimum on everything until she gets another job and she's 58 so we're kind of close to you know we've talked about the r word what does she uh what she do for a living she's a merchandiser okay so she'll be able to land something then. Are you in Atlanta? Yeah, around there, a little south of there. But we hope that something's going to happen. Okay, well, you've got eight weeks to find a job. Well, actually, you know, they said five to eight weeks a week ago,

and we're thinking more like four weeks. Okay, so you've got four to eight weeks. And the other thing is that they've said, oh tell you know like people and it's like well how do you find a job without spring of course i'm gonna tell people of course i'm gonna tell people you dump me on the street i'm gonna go get a job and i'm gonna leave tomorrow if i get a new job you don't have any you don't have any moral obligation to sink go down with a ship so you go get a job she get you know put everything on hold no you do not pay down the debt you're in the middle of a storm and you put everything on hold you pile up as big a pile of cash as you can pile up and uh then when she lands her job then you

decide you guys decide if you're going to do ish again or not well i'm hoping that all of this experience will change her mind on that. Yeah. I mean, right now, you just push. If you're losing half of your household income, you push pause on your total money makeover, baby steps, until she lands a job, and you just pile up cash. But I'd go get a job tomorrow. I mean, I wouldn't have a discussion. I wouldn't have a theoretical discussion about this

you got four weeks the fuse is burning towards the bomb and the day I get a job I'm out of that place you have zero obligation to them ethically morally or anything else so yeah then when she relands the job and let's revisit the other side of that now you've got a pile of cash plus the cash you built up during this four-week period of time or whatever the time is until she lands a job. Whatever cash is left over then, once you're both employed again, then you guys have to decide what are you going to do.

Are you going to do ish again? And I can't, you know, I can't't i'm not going to tell you to do something other than what i tell people to do so uh you need to pay off your stinking cars and you need to do that immediately it's ridiculous that you have car payments making two hundred thousand dollars a year it's just ridiculous so you know but you guys gotta decide how you're gonna live i can't live your life for you all right lew Louis is with us in Florida. Hey, Louis, what's up? Thank you, David. Thank you for taking the call. So this is my situation. I have no consumer debt nor student loans. My only debt is my main residence. I owe $190,000,

but I also have $198,000 on cash to either pay off the property or buy another property, which I passed as one of the plans. So I just wanted to see what was your input on that. Yeah. I love real estate as an investment. And I've been investing in real estate for just about my whole adult life in one way or another. The first way I did it was with a bunch of debt, and I went broke, and now I pay cash or I don't buy it. But I just love real estate, so I'm with you on you getting some investment property. The only thing I love more than real estate is I love being debt-free.

Right. And so if I woke up in your shoes and your house was paid for i wouldn't be borrowing on your home to go buy a rental property and effectively if you use this money to buy a rental property that you could have paid off your house with it's the same thing as borrowing on your home to buy a rental property do you see what i'm saying right right so so yeah so what's your household income uh take home pay pay around $210,000. Good for you. What do you do for a living?

I'm a software engineer. You're stud, man. You're killing it. And that's where this $200,000 in cash came from? Are you just a saver? Yes, I'm very much a saver. How long did it take you to get $200,000 in cash? Around three years.

Okay. If you didn't have a house payment, it would have taken you two years. Yes. I mean, my house payment. If you didn't have a house payment, it would have taken you two years. Possibly, yes. I mean, you could save $100,000 a year with no house payment. Pretty much.

Yeah. So that's what I'd do do i'd pay off your house today and in 18 to 24 months you'll have enough to buy your first rental property in cash awesome and when that thing cash flows like a bandit you'll have the money faster to buy the next one and when those two cash flow like a bandit because with no payments you got cash baby all those rents that's just money in the pocket. And it builds up really, really fast. The first one's the hardest one.

The second one's easier. The third one's easier. The 15th one, you get to buy. Those houses will start buying houses. Yeah. It's like rabbits, man. They start having babies. It's awesome.

So, yeah, you get snowballing in the right direction. But you've got to start it out right, and that's no payments. That's the way I did it. That's i recommend this is the dave ramsey show We'll be right back. In the lobby of Ramsey Solutions on the debt-free stage, Ryan and Brittany are with us all the way to Nashville to do a debt-free scream. Where are you guys from? Atlanta, Georgia. Wow, thanks for making the trip up. How much debt have you paid off? $59,000.

All right. How long did this take? $59,000. All right. How long did this take? It took 19 months. Very good. And your range of income during that time? $50,000 to $106,000. Well, there's a little jump. Someone get a position?

Somebody started working. Yeah, that's me. Okay. What do you guys do for a living? So I'm a registered nurse. Uh-huh. And I'm a manager of account implementation. Okay. Very cool. What kind for a living? So I'm a registered nurse. And I'm a manager of account implementation. Okay. Very cool. What kind of debt was the $59,000? So we had $47,000

in student loans, had seven in credit cards, and we had five left over on a car. Kind of normal. Yeah. A little bit normal. Yeah. You're making pretty good money. Things are bopping along. Mama's getting a job. So how long have you guys been married? Going on three years. Okay. So what happened 19 months ago that put you on this game plan? So, you know, we had started out just trying to do it on our own. We had gotten the book.

I had known about you from getting a CD from my brother. And so I bought the Total Money Makeover. I bought a copy for me and for her. We were long distance for three years before we got married. And we were kind of getting sick and tired of being broke and being penniless and having debt on things like weddings and vacations and everything like that. Yep. And so basically when Ryan got those books, I was in my last semester of nursing school and really stressed. We got married a week after I graduated nursing school. So then we are now married and we're in Atlanta.

And for the next four months, we try to budget and try to follow this book. But I was just really frustrated and we were kind of not on the same page because we just tried to do something we never done. We never budgeted. It was our first time being married. And so all of that all in one. And you got to pass your boards after graduating. Yeah, of course. Yeah. All of that, all that stress and pressure. So I actually called into you, called into your show to get some advice and you gave us FPU as a newly married gift. Oh, fun. Yes, that changed our life and really helped us set a foundation to really start this journey. Wow, very cool. Well, I like giving one away and then it shows up here on the stage. That's a good gift right there.

That one paid off. That was a good investment. All right. Well done, you guys. Very cool. Okay, so you go to the class, and you have some aha moments. That's why that wasn't working. That's why that wasn't working.

What were those? Part of it was my free spirit just raging every single day. I was a— Not just a free spirit. I'm a raging free spirit. I love to do stuff and not be at home. And I fought it for a while until I realized that I'm hurting my marriage. I'm hurting her family future.

And we've got to get on board. So a little bit of introspection happens in the class where you just look in the mirror. It wasn't like somebody's yelling at you, but you start yelling at yourself. Yeah. You go, okay, this has got to change. I i gotta i gotta rein this in at least get it to where it works like a grown-up good okay so what else you pick up in the class that was an aha moment well i think just it's important to go to the class we were in the class with a group of people for nine weeks we had awesome fpu coordinators so shout out to all the fu coordinators because you really do make a difference and some of our group may be watching today, but just being in that class, being around like-minded people, all in different baby steps.

And we really learned the value of communication, not only like in finances. That's what FPU taught us, but it just correlated to our whole marriage as well, just learning how to communicate. It's more than just a marriage. It's a contract it's a conversation together to say i'm gonna sit down and do my budget and we're gonna agree to this because if we don't do that we don't have trust together right right it's a big deal yeah and you guys were young enough in your married relationship that you were still a little bit pliable oh yeah and you could jump in there and go okay we got it we got to move some stuff around okay so now you're old pros you pay off fifty nine thousand dollars in 19 months um

obviously you get a job helps a bunch with the numbers yes and you're coming out of nursing school and passing congratulations that's very good and a great career feel for both of you and um so now what would be your advice to someone that's listening that's exactly where you were two and a half years ago? I would say don't make your wife cry in a Bojangles. Oh! There's a story there. Yeah. How did you make her cry in Bojangles?

What kind of man does that? We had, this is why we were trying to do it on our own. How did you make her cry in Bojangles? What kind of man does that? This is why we were trying to do it on our own. We were trying to get the budget right, and we had just started FPU, and we had been paying for lawn care, and it was a lot of money. The guy was not being consistent showing up, and so my free spirit was like, well, I'm just going to do it myself. And so we didn't budget for it.

I just dragged her along to Home Depot and said, I'm going to spend $150 here. I'm going to get my lawnmower. I'm going to get my weed eater. And we're going to go do this. And we decided to get breakfast afterward. And that's when it broke loose. It was like we didn't. Oh, man.

Yeah. So you forced a weed eater purchase on your new bride. I did, yeah. A lawnmower and a rake. I didn't know how expensive all these things were. Yeah, well, we have to do all these works. So what did you do with the lawnmower? Did you take it back or did you use it? I used it.

You used it. We got our money's worth. Yeah, yeah. Ended up saving you money in the long haul. It did. Yes, it was just overwhelming to me because, you know, we just started finding a show. You weren't in agreement about it. And we didn't budget for it.

And that was like in my mind is we need to budget for this. So I think that was a big key, just, you know, starting to learn how to budget. And then with us, because Ryan and I weren't on the same page, that was the frustration. And that's why it was hard to get kick-started. So my advice to couples who aren't on the same page, you know, just stick in there. I advise FPU and just try to get around like-minded people that can encourage you in the same goals that you have. That is such a great story. Go take a picture of that and print up an 8 by 10 or at least get a hard copy of the picture.

Write that up to show your grandchildren. This is the Bojangles i made your grandmother cry in over a rake and a weed eater and a lawnmower home depot is evil i go in home depot and i buy tools i don't even know what they do, but I needed the tool, you know. They have everything there. I love it. Oh, that's so fun. Well, way to go, you guys. That's so cool.

Very good. That's good advice. That's good advice. Get on the same page. Stick to the budget together. Make decisions together. And that got you here. Very cool.

So you had Financial Peace University team around you. Yes. Or the people in your class was your team. That was your cheerleaders, I guess. Anybody else were your outside cheerleaders we had some friends and family were encouraging in the journey but i mean uh just something about your fpu class that are going through the trenches with you i mean it's it's something that you can't replace they were there for the good and the bad and they're still there we still meet quarterly we go through it because

they'll meetings is what they call them. I love it. Stay intense. And then, of course, Debt Free Community on Instagram. I was active in that. I found that. So a lot of like-minded people that I would never even meet in real life. And then the Ramsey Baby Steps on Facebook, too.

It was really helpful. Yeah, that one's gotten almost 300,000 people on that thing now on Facebook. The Ramsey Baby Steps. The official Ramsey Baby Steps community or something like that it's called. Very cool, you guys. We're very proud of you. How old are you two? I'm 27.

And I'm 32. And you're debt-free, everything but the house. And do you own a house yet? Not yet. We're renting. We're getting there. We're on Baby Steps 3B. All right.

All right. Finished the emergency fund and we're trying to save. So you're 100% debt-free today? Yep. Yep. Good. Good. Yeah. I'm. We're on Baby Step 3B. All right. So we finished the emergency fund, and we're trying to save. So you're 100% debt-free today. Yep. Yep. Good. Good. Yeah.

I'm going to write that down. That's a good day. Very cool. Well, we've got a copy of Chris Hogan's book for you, Everyday Millionaires. That will be the next chapter in your story. And then you can tell the grandbabies about the Home Depot someday. Yeah. We'll tell them.

About Bojangles. $59,000 paid off in 19 months, making $50,000 to $106,000. Ryan and Brittany from Atlanta, Georgia. Count it down. Let's hear a debt-free scream. All right. Three, two, one. We're debt-free! Whoop, whoop, whoop.

I love it that is how it's done you guys are amazing that is a great great story congratulations we're very proud of you hadn't you all had that defining fight that Les Barrett talks about sometime in a Bojangles

that's just so great I can just see the picture of this. This is The Dave Ramsey Show. Renee is in California. Hi, Renee. Welcome to the Dave Ramsey Show. Hi, Renee. Welcome to the Dave Ramsey Show. Hi, Dave. Hey. Good to be here.

Good to have you. How can I help? I just started listening to your podcast, and I'm on baby step number one. Okay. And so in what I'm doing in parallel is I just have a question as far as paying off debt. I have two cards that I opened with no interest rate for a number of months into next year. And then I have the traditional cards with interest and one with a very high balance. So should I, your program says pay the smallest balance off first. Yes, ma'am.

Should I pay the ones off with interest now? Nope. And then go after the smaller ones without interest? Nope. Nope. You want to know why? let me tell you why okay because why matters okay it's um i actually am a math nerd beyond belief and so if you were a hardcore math nerd technically mathematically you would list your debt's highest interest rate to smallest interest rate first.

And if you paid the exact same amount on that program that you paid on the get-out-of-debt plan that we use, smallest balance to largest balance, you would get out of debt faster because you're not paying as much interest if you pay the higher interest off first. And that makes mathematical sense but what we have discovered is is that this is not a math problem if you were doing math you wouldn't have credit card debt true this is not a math issue this is a overspending disorganized not on a budget time to grow up and not buy stuff i can't afford unless I have the cash problem. Yes, I've had my come-to-jews moment. Yeah, I mean, that's what I had too, and it's the same thing.

And so what I've discovered over 30 years of teaching this is that if I can get you to believe because you're having successes that you're going to win, you will work even that much harder to keep at it than just the intellectual discussion of interest rates. Okay. Because it's not an intellectual problem. It's not a problem of intellect. You have the sufficient intellect to have not done this, but you bought stuff you couldn't afford and put it on a credit card. I did that too. I bought all kinds of stuff. I mean, everybody's done that just

about at times. So no shame, I'm not shaming you for that. I'm just saying that. So the point is you don't fix a behavior problem with a math solution. You fix a behavior problem with a behavior solution and paying off the smallest one, even though it is illogical, will cause you to have more success because you'll get fired up because you're having some success. It's kind of like a lot of people go on a diet. And if you, let's say you had a diet program, one diet program that was intellectually correct or an exercise diet and exercise program, and it was intellectually correct, but you weren't going to lose any weight at all for three months, and then in 10 days you'd lose 30 pounds. No one would do it because they couldn't stay with it

three months with no positive feedback. But if you go on a diet that does not work as well, an exercise program that doesn't work as well, but you lose three pounds the first week, and then two pounds the next week and then a pound or two the next week you'll stay with it because you can see the progress you can feel the progress you're not having to delay the results way out there and so that's the reason that snowball works and we list our debts smallest to largest because when you pay off the little one you're like hey that's cool and then you pay off the little one, you're like, hey, that's cool. And then you pay off the next one, it's like, huh, that's very interesting. And then you pay off another one, you're like, hey, this is kind of working.

This guy ain't crazy as he sounds, you know. And then you pay off another one, you're like, whoa. And then you pay off another one, you're like, I'm never going to not take it again. Let's do this. Bye, game on, you know. And the more you win, the more fired up you get and the deeper you sacrifice and, you know, the less you worry about what other people think or say, and the more you lean in and push this through.

And so that's the reasoning behind it. Okay. One more question. So one of the credit cards I told you about with interest has super high payments, and it's really hard to make sometimes because I have a mortgage too. Does that still apply? Still applies. Payment's not relevant either.

We're going to pay off the smallest debt. So how many credit card debts have you got? I have four. Okay. And so two of them are higher interest rates and one of them's got a high payment. So what are the balances on the two big ones? The two big ones is $15,000. The highest balance is $15,000.

And the second one is really nominal. I just need to pay it off. It's like $500. Those are the cards with interest, and the $14,000, $15,000 card, I mean, they require like $2,000 a month in payment. Yeah. Well, see, that's great news because even if you don't do anything except just pay the payments, you're going to get that thing paid off pretty quick

because you're paying large principal payments if you're paying $2,000 a month. I mean, what's the interest rate on it, $25? No, it's $16. Yeah, okay. And so you're going to pay, you'd pay that off pretty quickly regardless if you kept paying $2,000 a month. Because $2,000 into $15,000 is seven and a half months plus interest. So eight or nine months of $2,000, and that one's gone anyway, even with the interest.

So you're going to get there. So what's your household income? About $109,000. Good. That's good news. Okay. And how much other debt have you got other than these credit cards? That's it.

Oh, okay. That's great. So you've got a $14,000, a $15,000, a 14 a 15 a 500 and what's the third the fourth one the other two are 45 and 17 and those are i don't it's like same as cash kind of thing no interest rate 45 100 or 1000 100 100 and 17 100 oh good okay yeah so those balances aren't $100. And $1,700? $100. Oh, good. Okay. Yeah. So those balances aren't due to be paid off until next April. So is there five cards or four cards? Four total. Including the $500 one?

Mm-hmm. Okay. All right. So you have one great big one. Yeah, that's the one that kicks my butt every month. Gotcha. Okay, cool. But here's the thing that you

knock off 500 and then and then 1700 and then 4500 um you're gonna you're gonna feel like you got rid of all the mosquitoes that are flying around and now you just got to shoot the elephant okay like you're stomping out the little stuff so you can focus on the big one okay and then you'll be able to reach over and punch him in the head. And plus, you get on a written budget. You make enough money to do this pretty quick. I know. And I started listening to your podcast, so now I'm going to, I don't know, I need to get your book.

Yeah, you need to download the Every Dollar Budget and start using it. It's free. It's a free budget. Seven million people are using the online budget, and it's an app, and it'll work on your phone and everything, and it takes about ten minutes to set your budget up, and you give every dollar a name before the month begins, and you get traction, and you start to move.

And hold on. I'll give you a copy of the Total Money Makeover book. That'll be our Christmas present between you and me as a new listener. So we'll get you going here, kiddo. Hey, thank you for the call. We appreciate you joining us. Open phones at 888-825-5225. So one of my favorite things to do is to hear back from someone like that debt-free scream where we gave them Financial Peace University, which is $129 to go through.

And I gave it to them as a caller when they called in and as a newlywed. And I don't do that that often, but occasionally I'm just talking to somebody, and I think I'm supposed to do that, so I do that. And then they show up here 19 months later in their 20s having paid off $59,000. Now, that was a good investment. I got Sally Mae kicked out of their life because I hate Sally Mae. She is a hateful wench. I do not like Sally Mae. She is a test pilot for a broom factory. I do not like Sally Mae. Sally Mae should be done away with, Congress.

You should stop making loans to people, Congress. You're hurting your citizenry. You're harming your citizenry. You should stop it, Congress. See, there you go. But I can save that one. $59,000. Just like that.

This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. Once again, you made the Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.