The Ramsey Show - App - You Can't Manage Your Money in the Rear View Mirror! (Hour 3)

Episode Date: January 19, 2021

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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.

You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. Chris Hogan, Ramsey Personality, number one best-selling author, is my co-host. You jump in, we'll talk to you about your life and your money as promised. Crystal's with us in Philadelphia. Hi, Crystal. Welcome to The Dave Ramsey Show. Thank you for taking my question. Sure. What's up? I am calling because I recently inherited an annuity,

and I am not sure if I should just go ahead and pay off my home or if I should go ahead and roll it over and invest it. How much is it? It is $139,000. What do you owe on your home? I owe $119,000. And have you gotten a tax person to look at it and see how much you'll be taxed when you cash this out? I actually just contacted one of your recommendations, and I was supposed to talk to them today,

but they had to reschedule the time for tomorrow. I also had spoken to three of your smart investor pros which I all liked so I haven't picked one yet. Good I'm glad it's hard to choose. So you were named beneficiary on the annuity? Yes it was divided three ways between me and my brothers. Crystal, who left this to you? My father. Your father. I think with you being named a beneficiary, it's probably going to be more like life insurance

than it is going to be like an inherited IRA. I don't think you're going to have taxes on it, but I'm not sure. I don't either. I'm not sure. I think by calling your name the beneficiary on i think it's just going to come straight to you i'm not very good at taxes though so the tax people are all out there listening right now going oh god you know but um anyway because so for sure check me out say i promise okay so uh i'm paying off my house unless i've got a 40 tax on this

thing if it's got a 40% tax on this thing. If it's got a big tax on it of some kind and you can roll it to something, which I don't think you can do. I know you can't roll it into an IRA. You could roll it into a variable annuity. I'm going to say nine times out of ten, unless you get just some ridiculously horrible information about the taxes, I am going to take it out, even if I got a little bit of tax, and pay it off. Pay off the house, okay? Yeah. Okay. Crystal, how much is your

mortgage payment right now? Mortgage and taxes is roughly $1,350. Can you imagine what kind of blessing it is for your father to have left that to you to pay off your home. Like you get the deed, you own it. And now you have $1,350 extra in your budget. I just had a happy feeling in my heart because this has, this has been a rough thing because my dad was handicapped, um, 22 years ago and I took care of him for 15 years. Um, my brother just took care of him for the last seven. We had a family member that was his power of attorney. Yes, ma'am.

And never invested his annuity. And so realizing the amount of money that it could have been, what I was actually expecting was a little shocking. About seven years ago when that person passed away and he went to live with another family member, a brother, who was his power of attorney, and he didn't invest the money either. So this money grew for 22 years at 1% interest, so that hurts a bit. Yeah. Yeah.

But now we're still here, and the good news is your home's going to be paid off. That's right. And when you get ready to leave something to someone, that home will have appreciated But now we're still here, and the good news is your home's going to be paid off. That's right. And when you get ready to leave something to someone, that home will have appreciated, and it'll make a difference. So at any rate, you know, this is one of those things. Let that go. Just realize your father thought of you and was intentional enough to leave something to you. That's pretty cool.

And you get a chance to continue writing the story together. Ben is with us in Knoxville. Hey, Ben, welcome to the Dave Ramsey Show. Hi, I appreciate y'all taking my call. Sure, how can we help? So I am engaged, and I'll be getting married here in April. Yay! Thank you.

We're both very excited. And fortunately, we're both going into the marriage on baby step six, and our combined income will be about $200,000. And I was wondering how you would suggest kind of managing our individual wants within our marriage. For example, I'm a big gun guy, and so that's my hobby. And my fiancee likes clothes and furniture and stuff like that. Well, the good news is you don't have any debt except your house, and you've got a lot of money to buy guns and clothes.

So, I mean, you call me up with this problem making, I mean, with $300,000 in student loan debt because I would have said no more guns and, you know, very few clothes. But, yeah, I mean, the good news is you can sit down together, and I will just tell you, every gun I buy costs me at least two purses. So we have a formula at the Ramsey house, and I'm with you. I've got a lot of guns, and you know what that means? She's got a lot of purses. So you're just going to do some of that right there.

And all kidding aside, I think you just talk about it. And, you know, it would not be fair for you to spend, you know, three times more than she's spending on those things. But both of you have some fun money category room in this budget you described. Yeah. And, Ben, is this a first marriage for both of you yes okay that's fantastic man i'm going to tell you this have you all done the pre-marriage counseling uh we're starting that next okay that's imperative uh and really dig into that uh get on the same page because financially it sounds like you guys are in sync now it's a matter

of as i tell people all the time you got to speak french right it's not you her and you is we and so that mindset of the muscles you all have already been flexing learning to communicate and flex those together your biggest problem is is that you're both used to having your own life and you're now going to combine lives and that's going to require some that's going to be a little bit stressful in that regard. Yeah, a lot of feelings. I hear about feelings. What we're going to do is we're going to put you into Ramsey Plus, and that hooks you up with the Every Dollar Budget

and puts you guys through Financial Peace University as part of your pre-marriage counseling. We're going to give you a wedding gift. Yes. So you hold on, and we'll give you a year in Ramsey Plus, and Kelly will pick up and do that. Now, what you'll do is jump on that every dollar budget and lay out a pretend budget as if you were married that's good and then it'll give you something to talk about in the pre-marriage counseling you're gonna go ahead and have some budget fights right now yeah but you know you're gonna spend what you know but again the communication on it being able to lay it

out looking at the ratios you have a common goal common goal, baby, step six, paying the house off, too. That's right. So there's only three things you can do with money. You can spend it to enjoy it. Yep. You can give it, and you can invest it. Yep. And you need to be on the same page on how much is going to what.

And there should be plenty of room to do all three of those things with what you have described here. You guys are making a lot of money you're doing really well congratulations seriously that's gonna be good but yeah they they you all have uh a streak of uh independence because you've lived as grown-ups with a lot of money before now you're gonna have to combine that and that's gonna be emotionally there's gonna be some friction with that it goes with the territory so just put it all out on the table work the friction work the friction it's going to be great for your communication in your new marriage this is awesome put the lord first and then the center and now the other stuff will work out just fine this is the dave ramsey show show. Over the years, I've heard countless horror stories from listeners about being harassed by

debt collectors, receiving calls at work on their cell phones, and some even getting yelled at and threatened. That is not okay. There are laws against this, and there are people, attorneys, that can help make this stop if they are in fact breaking the law. Go to CollectionBully.com to learn more. Fill out a quick questionnaire that will identify if you are a victim of this type of illegal harassment. That's CollectionBully.com. Chris Hogan, Ramsey Personality, is my co-host today.

Open phones at 888-825-5225. If you feel like you've never saved enough money or pay off all your debt after a year like 2020, most of America feels the same way. We're all hitting reset. Ramsey Plus is our step-by-step plan. Helps you get some really quick wins. We're going to give you a 90-day plan, day-by-day, week-by-week, step-by-step. Everything's in there.

And Ramsey Plus, of course, includes Financial Peace University. And you can do a free trial and see if you want to do the whole year. The 90-day plan will get you a fast start. It's never too late to get a great start. That's right. Get a fast start. Get a great start. I mean, when you come out of the gate fast, boom, here we go.

All right, Ramsey Plus, you try it for free. Do the free trial and see if it works for you. You're going to be blown away. DaveRamsey.com slash reset. DaveRamsey.com slash reset. All you have to lose is some debt. Crystal's in Anchorage. Hey, Crystal, how are you?

Hi, good. Thanks so much for taking my call. Sure. What's up? Currently, my husband and I have no debt except for a little bit of a car payment and our mortgage. We've got a steady income, but we kind of struggle just getting by check to check and wondering what is the best way to kind of get out of that rut. What's your income? Oh, about $72,000 a year. Okay. How much is your house payment? $1,700. How much is your car payment?

I do about $300 a month on it. You would do. What's your car payment? You have a payment amount. Yeah, I do about $300 a month on it. I go a little bit extra. Okay, but I mean your car payment is actually, if you don't do, what's the actual payment? About $210.

Okay, that's what I'm asking. All right, good. Sorry about that. Okay, so that's okay because the extra is a choice. And that's not a bad choice because we're going to get your car paid off. That's going to be something we're going to do here in a minute, but we're going to put a lot more than $300 on it. But anyway, all right, so you're not giving me any numbers here that are causing my brain to explode like you've got major problems, which means that you're probably like most people, including me, when I first started this, in that by not having really good organization with my money and every detail laid out, the chaos eats these dollars for breakfast.

And so a written budget, a detailed budget, will make you feel like you've gotten a raise. Because I'll give you an example. How often do you guys get paid? Twice a month? Yeah. Okay, so a take-home paycheck is how much? $3,000. Okay, so a take-home paycheck is how much? $3,000. Okay.

So we have $6,000 minus house payment minus car payment is $2,000. Yeah, yeah. So I got $4,000 left. That feels kind of weird, doesn't it? It does, yeah. because that feels kind of weird doesn't it it does like right this second you're asking yourself i know i got water and i know i got i got i know i've got electricity and i know i've got food uh and i know i got some insurance i gotta buy here and there uh but you're starting to ask yourself where the flips is money going and that's kind of what i'm asking yeah so yeah you got to

get on a game plan and when you get on a budget, you are going to feel like you've got to race. And Crystal, I'm going to tell you, as I started off on Dave's plan some almost 16 years ago, that is exactly what was the thing that was the awakening for me. I was doing too much stupid in grocery stores and in restaurants. And so getting down to the root of it, you take it a look, get some bank statements out, Go back and look at the last three months and find out that category where you're bleeding money. And it could be online shopping. It could be grocery stores. It could be eating out. Whatever it is, you're going to do an analysis.

You're going to see it. But you cannot manage money with a rearview mirror. Right. You can't wait until it's over and then go, wow, that didn't work. You have to tell it what to do before it leaves on paper, on purpose, before the month begins every single month and in agreement with your spouse so they don't do something else. That's exactly right. And I was just going to say with that, when you find that trouble spot, go to the cash envelopes on it.

I'm telling you, having the budget like Dave's talking about beforehand and then having the cash, I'm telling you, it's going to give you more control and like dave said it's going to feel like you gave yourself a raise because guess what you did yeah jump on every dollar and start using the it's free to use just every dollar.com download the app and start using that budgeting app with you and your husband and you got to start working on that tonight you're going to feel like you got a raise there's a reason you're losing. There's just no intentionality behind the dollars. And no one does, by the way.

You're not horrible. I've got a great question. Nobody does that. All right. You have sat down with people for many, many years. What is the typical area of the budget that people are absolutely lying about? What is it, the one where you go, this isn't real? Eating out. Eating out.

Yeah, I would agree. I'd real eating out eating out yeah i would agree i'd say eating out of the grocery store because with the stores we have now they think they spend less at the grocery store yeah they know they spend a lot at restaurants but when they find out what they really spend they go oh my god yep you know yeah i remember i was sitting in a financial peace group leading small group one time years and years ago and uh you know we're kind of going around talking about the lesson that night and we're like okay why aren't why have you not been able to fund retirement where it was an investment lesson one of the questions we're just talking about you know why why didn't you feel like you've been able to do retirement and there's an old country boy sitting in the thing and he

goes yeah we looked at it it's been in 1200 a month in restaurants i know where our retirement's been going we've been eating it i died laughing but it's exactly the truth i've been eating it that's it that i'm telling you that's what a lot of people do with it they eat they eat their future yeah and that's scary and you know what that's something we can control because what couldn't we do let me just tell you i love restaurants a lot of my i've got good friends. You and I have good friends, personal friends that we share. They're world-class chefs that own restaurants. We go to their place. I love that kind of stuff.

I'm not against restaurants. But from a budgeting standpoint, when you're calling me and saying, I'm broke, I have no money, I will tell you that 90% of what you spend in the restaurant, the money is spent on entertainment. 10% is your actual food cost. Yeah. So go home and make some stuff. Make some white beans and cornbread. And I'm going to tell you this.

Even throughout all this situation with the pandemic, people being at home more, you know, utilizing that stove. They found out what they were spending. They really did. Because people were like, we've got a lot more money. Wow, where have I got all this money? Where did this money come from? That's right. And it's all it was.

You're not going out all the time. All the time. So be intentional. Be smart. And again, starting to set some things, cut it back a little bit. So Crystal, you're not different in that regard. I don't know if it's food that you're spending it on, but you will discover it when you go back and look at the statements like Chris suggested and when you start writing it down

and try to make it behave. Hint for everyone is starting their new budget this month. Whatever you think you're spending at the grocery store, you're wrong. It's more than that. I agree. And so if you think you're spending $500, you better put $750 in there because you're going to find that it's more. You've been lying to yourself so long that you know i really do do that i've had these people tell me these ridiculous numbers we make it on 50 a month no you don't you can't even know this is absolutely ridiculous so you know but but

because here's the thing that is a category that if you underfund it you will go back and either break your budget or you'll have to go back and correct your budget in the middle of the month as you're learning how to budget your first couple of months if you'll go ahead and overfund it you don't feel like you failed you can always cut your food budget back in future months it's a good call for the first two to three months you're doing your budget when you've never done one in years, overfund your grocery store budget category because everyone spends more than they think they do. So true. And you people that are super nerds and you do the coupons and you've got all these apps on your phone and all this stuff, you still spend more than you think you have. Because there's something about denial at the grocery store.

We're in denial about what we spent. No, that's a good point. And at the Reset event, if you haven't watched it, you need to go check it out. I gave three tips, which is make a grocery list, only buy what's on the list, and stick to the dollar amount you said you were going to spend. I'll give you a fourth one. Don't go grocery shopping when you're hungry. Truth. Big truth. As if I'll give you a fourth one. Don't go grocery shopping when you're hungry. Truth.

Big truth. As if I have ever done any of this. Those burritos I bought from Sam's weren't that good when I got them home. Well, you bought 270 of them. Yeah, I know. I was hungry, Dave. I was real hungry. This is the Dave Ramsey Show. do you feel like you'll never save enough money or pay off all your debt after a year like 2020 most of america feels that. But money shouldn't be

one more thing that you have to worry about. That's why in 2021, we're hitting reset. Because no matter what's happening in the world, you can take control of your money. You just need the right plan. Ramsey Plus is our step-by-step plan that gets you quick wins so you can make faster progress on your debt. And once that debt is gone for good, you get more money back in your bank account. So you can spend and you can save how you want and worry less about the future. So here's our challenge to you. First, decide on a total money reset this year.

Then start Ramsey Plus. Commit to working hard for 90 days and watch as your daily wins turn into lifelong habits. Make today day one. Try Ramsey Plus for free. Go to DaveRamsey.com slash reset. Chris Hogan Ramsey, personality, is my co-host today. Open phones at 888-825-5225. Elizabeth is in Tyler, Texas. Hi, Elizabeth. Welcome to the Dave Ramsey Show. Hi, how are you doing today?

Better than I deserve. What's up? I have been asked to take over being the treasurer for my property owners association. Are you there? Yes, ma'am. Sorry. Okay, sorry. So anyway, I've been asked to do that, and I am curious about personal liability, if I should be concerned in any way in regards to that you would need to ask an attorney i'm not one i do own many many many pieces of real estate

in hoas and most of them are a hot mess yeah um and so there's always conflict and drama and gossip and stupidity and everything else. You would, as I understand the law, and again, I'm not a lawyer, so it's a legal advice question that you're really asking. But as I understand the law, you would not have any liability unless there was misbehavior now obviously if you uh bought yourself a a new grill for your backyard out of that money then you would obviously be liable for the misbehavior or if there was gross uh negligence you did a horrible job beyond the pale of what any kindergartner could do uh then you might be held liable most Most of the HOAs carry errors and omissions insurance for their board of directors. And so if a resident files suit against them for, you know, mismanagement or negligence or fraud or whatever else, the E&O will step up.

The insurance company will step up and defend them legally so most of the time you're covered and even if you're not you mean you might have to be out some legal fees but you would not be held to uh if somebody didn't like the color of paint that was chosen for the front fence right which will happen, then you're not liable for that. Yeah. Elizabeth, Dave's not allowed to be on any kind of committee like that. People would end up crying, okay? I'm just going to tell you.

But I think, you know, do you have a lot of time? Do you want to do this, or do people just want you to do it? Well, so it's an interesting situation. I live in a neighborhood where I have an HOA and a POA. And the property owner's association, the POA, is just for my street. Okay. Because there are certain expenses that we are responsible for just on our street. Yes, ma'am.

And so this is for the POA. Okay. responsible for just on our street yes ma'am and so this is for the poa okay um and so i would i'm not so sure that we have errors and omissions on that because it's such a small thing yeah well it would have to be the people on your street or the hoa that you pay money to out of the poa someone would have to get pissed off and sue you yeah from a practical standpoint before you would have any liability so as long as everything's fairly low drama, you probably don't have any issue. But I can't make that promise in an HOA. As you can tell, I can't stand the things.

And no reflection on you, Mr. Elizabeth. You sound like a sweet person. She's a sweetheart. You can tell. But too many of the people involved in them really don't have a life. And so. What did you tell me, Dave? What's the percent of people that need to be incarcerated?

Is it 2% or has it grown? No, not incarcerated. Institutionalized. Institutionalized. Same thing. Yeah. Well, sort of. Ish.

Ish. Yeah. And it's a higher percentage in HOAs. It is. Oh, yeah. No, I'm just not a fan. Kelly! Kelly's in Atlanta. Hi, Kelly. How are you? Hi, good. How are you?

Better than I deserve. What's up? Thank you for taking my call. It's such a blessing. I have a question about my, okay, so I'm a stay-at-home mom and I'm married. My husband makes about $60,000 a year as an essential worker. His career has the potential to grow his salary to about $70,000 within the next five years. We have two children under three and I currently have an AS in an essential field with the potential to get a BS in engineering after we complete our baby step number three. That would be no longer than two years from now. We are currently paying off our house and that's the only debt that we have, which is about $155K left to pay off. He's mid-20s, I'm early 30s, and we're wondering out of these three options, which might be more advantageous for us, financially speaking. if I go back to school and I get a BS in engineering in less than five years to jump start a career with a higher salary while maintaining our lifestyle at only 60 to 70k a year with extra towards other baby steps? The next option would be should we maintain his salary and

career and the lifestyle that we have now? Or the third option would be, would it be better to go back to work part-time and try adding on to his salary? The reason for us changing head of households would be because we feel like one parent should be at home with the kids. But, you know, there's always the possibility of us just, you know, adding on to his salary and we could both be at home at the same time. Mm-hmm. Yeah. Well, I mean, there's two or three things going on.

It's not just math. If it's just math, the answer is how do you make the most money? Mm-hmm. Yes, sir. And then you've got to say, okay, but what's the tradeoff on the way that makes the most money? Right. What do you want to be doing career-wise as well as wealth-building-wise as well as parenting five years from now, ten years from now, and which of these decisions takes you to that person?

And so we call it around here when we're setting business goals, when we're doing strategic analysis in the business, we say, what's the desired future? Where do you want to be in 10 years? And then what must be true that's not true today for us to arrive at that desired future? And in your case, could it be a degree? Could it be a change out in your husband who's at home, who's not? Could it be a different way to do engineering? Could it be? I don't know.

I mean, what has to be true for you to hit your parenting goals, your career goals, and your relationship and your wealth building goals, the closest. And those things need to be all three laid out there at the end and then you start backing out of it in reverse engineering and say okay what must be true that's not true now and you're kind of saying that because you're saying i got to go back get a degree if i'm going to go this way i need to go get the bs if i'm going to do this instead of just the instead of just the associates right and um what must be true if we want a parent at home well he might quit if you go make more money and come home and be the that's right on dad that's right what must be true if we want a parent at home. Well, he might quit if you go make more money and come home and be a stay-at-home dad. That's right.

What must be true. These are things that must be true with the different options. But then if you do those things, you're going to look back and say, the trade-offs, because there always is, were the right ones. Yes. Yeah. No, you're right. And, Kelly, you all deciding and talking about that so you can put the priorities.

And your husband may have a different level of priorities. But what I want you all to do is to have the time to communicate and then hear, listen with your heart. It's so easy to listen with your ears and your head. But when you listen with the heart, what you're doing is you're really hearing and feeling and understanding the person and if your husband can feel that you're doing that for him and he's doing that for you you all will look through the lens for these kids and say hey what's the what's the route what do we do and like i agree with you it's always give and take uh we want the take take uh but we got to do the give well i think too i mean you know give you an example. I had a young lady the other day that was telling us that she had always wanted to be a nurse. And so Coleman, Ken Coleman, in his show suggested she go and shadow nursing for a couple days.

And she went to the hospital and worked, you know, beside a nurse and went, ooh, I don't want to do this. Ah. But nursing is a good career. Right. And it's good money. It is. And you always get work. And that was what was appealing.

But then the actual doing of the job. So you didn't like it. Yeah. Do you want to do engineering 40 hours a week, 10 years from today, with your BS? Is that what you want to do? Nothing wrong with that. But you need to be sure. That's a lot of stuff given up to get there.

It sure is. You better be sure that's the ladders leaning on the wrong building. Ooh. This is the Dave 4.23. Keep your heart with all vigilance, for from it flow the springs of life. Michael Altsher says, the bad news is time flies. The good news is you're the pilot. That's pretty good.

Colby's with us in Brunswick, Georgia. Hi, Colby. Welcome to the Dave Ramsey Show. Oh, that's pretty good. Colby's with us in Brunswick, Georgia. Hi, Colby. Welcome to the Dave Ramsey Show. Hi, thanks for having me. Sure, what's up? So, I'm 18 years old. I'm a freshman in college, and I'm trying to figure out what I should do

with the majority of my income. I make about $20,000 between my part-time job and side hustles. So, I'm trying to figure out if I should continue investing it the way I am, or should I just leave it in a savings account for when I graduate college and if I need the money, it's there. What are you investing it in? Just in the stock market. So I have about $8,000 in mutual funds and individual stocks. And then last year I put $5,000 in a Roth IRA.

Good for you. Well done. Well done. Well, Colby, the best rate of return on your money is Colby. What are you studying? Aviation science and flight management. Okay. So you're going to make more money as a result of having spent money on education than you will make in mutual funds,

given that you are studying something that is actually usable. You're not getting a degree in medieval left-handed poetry. Okay? Right. So very wise on your part so the point is is that the main use of money for you the number one job one for money for you is graduate and graduate on time and graduate debt free so i don't care if you save for retirement i do care if you grad until you graduate yeah i do care that you graduate you graduate on time and you pay cash and you don't go in debt now you're a

working dude and you're a saving dude and you're way ahead of the curve i'm so impressed with you yeah kobe you really and truly are buddy um. Who taught you about this? Did your parents teach you or are you self-taught? Yeah, my parents always taught me the importance of being wise with your finances, and especially my grandfather. I'm fortunate enough to have my college paid for, so I'm not having to take out any student loans or any debt, so I'll graduate college debt-free. That's fantastic. So I would ask you to take out any student loans or any debt. So I'll graduate college debt free. That's fantastic.

So I would ask you to take it a step further. I want you to find someone that is doing a pilot or someone private or someone that does commercial. But really find out what's the next level for flight school. What's it going to cost? What are the areas you're thinking of? So that way you can start to save toward it as well. You are way ahead of the game, young man. I mean, way ahead.

Mutual funds are fine. Single stocks are not. Good growth stock mutual funds or just a savings account, knowing that you just don't need to be fancy. Just pile up cash. A big old pile of cash when you graduate means you're a genius. Yep. Yep.

Okay. And then you can make all kinds of choices for long-term investments buying a home yeah moving to a new city do all kinds of stuff when cash gives you options yeah and you know what dave i keep getting on my show the chris hogan show i'm getting people calling in that are 22 and 23 and they're they're paying cash for homes they're they've got a hundred thousand saved for retirement i'm'm like, who taught you? I've had five of them tell me they went through foundations. They plugged into our high school curriculum, took it as a freshman, listened to it, got out, and started doing it.

Wow. So it is one of those things where, you know, in that department, it is making a difference. Maria is in Tampa. Hi, Maria. Welcome to the Dave Ramsey difference. Maria is in Tampa. Hi, Maria. Welcome to the Dave Ramsey Show. Hi. Thank you for taking my call. I appreciate everything you guys have done.

Thank you. My question is, yeah, can we afford to build a $589,000 home? What will your payments be? It should be, if we put 20% down'll be 33 19 okay and that is that a 15 year fixed uh no that's a 30 year okay need to calculate it on a 15 year and it shouldn't be more than one-fourth of your take-home pay and so are you making $16,000 a month take home? No, we're making $13,000 take home. Okay. Yeah.

You're getting ready to sign up for too much house. Yep. Okay. Okay. And Maria, listen to me, Maria, I'm so proud of you for calling in because the bank or the mortgage company will allow you to do that. They will allow you to sign up for that headache and heartache trip you have to be aware you and your husband enough to say uh-uh and you downgrade you that you i'm serious because they will allow it and and what you'll think is well if they said i can

it must make sense no it doesn't it makes sense for them yeah a fourth of your take-home pay on a 15-year fix now take-home pay is not after 401k take-home pay is not after your take-home pay on a 15-year fix. Now, take-home pay is not after 401K. Take-home pay is not after insurance. Take-home pay is just after taxes. So what do you get home with not counting your investments, not counting health insurance coming out, or anything else that comes out of your check except taxes? All I'm saying about take-home pay is taxes.

So if there's a bunch coming out to get to 13, and really if you add back in the 401K and you add back in the health insurance and it comes out to be 15, then, you know, we're probably getting pretty close here because your payment's going to be on a 15-year, a fourth of your take-home pay, and you're going to be fine. So it's not an absolute, but you need to dig into it a little bit more, and the goal would one fourth or so give or take but you just if you get if you get up where you got 35 of your take-home pay on a 15 years all you ever want to do because you want to get the house paid off that's a big part of wealth building that's right and if you get up there at 35 you can't do other stuff that you need to do you you get handcuffed dave and i've spent time in la and in new york and i've seen people that are home poor it means

they bought so much house that they can't really live in other places. So don't necessarily seek to buy the home you want. Buy the home that you can afford that makes sense for you and your budget. Sean is in Houston, Texas. Hi, Sean. How are you? Hello. I'm doing pretty good.

I'm calling because we're being sued by American Express. We were served this weekend the papers. We owe them $85,000. We have $50,000. And I'm trying to find out do I need to hire an attorney or should I try to settle with them for the $50,000? I have talked to an attorney. They told me it would be $5,100 to hire them.

And I'm just trying to find out which way to go. Okay. That sounds a,100 to hire them. And I'm just trying to find out which way to go. Okay. That sounds a little steep to settle that. And how far behind are you? We were paying, we last paid them in July, right after, you know, the COVID thing. We were on a payment plan. How in the world did you get $85,000 on an Amex card? It was a business card, and my husband decided to do a business deal

and fronted all the material for a project, and that's this. Yep. So here we go. This is why we don't do it. Okay. I just wanted to learn the lesson with you there. Ouch. I'm sorry.

I'm sorry you're facing this. Yeah, that's a big enough deal. I'm not going to have you settle that on your own i would get legal representation i don't think you found the right legal representation yet and no you're not bankrupt you have enough money to settle this amex will do this but they are they're skunks they are not good people and we deal with them all the time and you can tell they're lying if their mouth's moving so you really do need to get legal representation i think you can settle it for 50 or less with them if you haven't paid them since july try this go to collection bully.com collection.com that's a group of attorneys that we

recommend for people that are being bullied by collectors okay and i think one of them will probably pick up your case and represent you for less than that. I might be wrong. It might be that much. Okay. Okay. But if you can settle 85 for 50 and it costs you five grand, that's still a deal, right? That's still a deal, yeah.

It is. And, Sean, I'm proud of you for being proactive because a lot of people would freeze in the moment. And I'm glad you're being proactive and acknowledging this for what it is. It is something that needs to be dealt with. Absolutely. the moment and uh i'm glad you're being proactive and acknowledging this for what it is it is something that needs to be dealt with absolutely open phones at 888-825-5225 and you're not bankrupt okay so not picking on her her husband but um 38 percent of small businesses use credit cards to finance their business ideas. And this is where you end up.

Mm-hmm. On the verge of bankruptcy. Mm-hmm. Stop that crap. Yeah. How? Organically grow your business with the cash that the business creates. Yep.

And if you don't have the money or can't get a big enough deposit to cover the project, don't take the project. Don't do it. That puts us out of the day. Ramsey showing the books. We'll be the project. Don't do it. That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

This is James Childs, producer of the dave ramsey show you can listen to dave rachel cruz chris hogan or the rest of the ramsey network anywhere with the ramsey network app on your smartphone catch all of our full shows browse by topic or send clips to your friends head to the app store and download the ramsey network app today