The Ramsey Show - App - You Can't Medicate a Problem With More Stuff (Hour 2)

Episode Date: February 26, 2020

Rachel Cruze, Chris Hogan, Debt, Budgeting, Home Selling 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 The Dave Ramsey Show, where you learn to take control of your money and create a life you love. I am Ramsey personality, Rachel Cruz, filling in for Dave this hour, and sitting next to me in the co-host seat,

Chris Hogan, the one and only. Well, thank you. This is fun, Rachel. I know. We haven't been on together in a while. It's true. I'm back from maternity leave and I did the show with Ken on Monday, doing this hour with you today.

Oh, so I'm second. Well, we're doing, I think, tomorrow together too, so yeah. We'll see how. We'll deal with that later. But it's good to be back with you. Thank you. How have you been? Great. Babies are doing great uh yep just three kids four and under so it's it's something it's hectic it's something hogan it's hectic yep you will get through we're surviving you will do

it not always thriving but we're surviving yeah so what's been going on with you uh just recording my show yes uh the the speaking season is starting to ramp up. Anthony and I did a financial piece live in Maryland, which was absolutely rocking. Sold out. It was an amazing event. And then I went and did a work function with Chick-fil-A, which was fantastic.

Great people, which has been awesome. And Rachel, you know we have our cruise coming up. I know, the Ramsey cruise, the Live Like No One Else cruise. I think there's a few have our cruise coming up. I know. The Ramsey Cruise. The Live Like No One Else Cruise. I think there's a few cabins actually still available. There are still some available. So that's going to be March 22nd through the 29th.

So you can go to DaveRamsey.com and check out more about the cruise. We're all going to be there. Have you cruised before? I have. I've been on a few cruises. Okay. Very good. And they're pretty great.

I mean, you kind of are either a cruise person or you're not. And I could be a cruise person. Yeah, so if you're on Baby Step 4 and beyond, this is something that's for you. We'd love to have you come hang out with us, and I'm looking forward to it. Yeah, all the Ramsey personalities will be there, Dave, and we're going to be speaking at night and throughout the day and hanging out, and it's going to be awesome. We're going to have fun.

Well, today on the show, it's a free call anywhere in the country, 888-825-5225. So go into the phones. First is Heather from Colorado. Hey, Heather, welcome to have fun. Well, today on the show, it's a free call anywhere in the country, 888-825-5225. So go into the phones. First is Heather from Colorado. Hey, Heather, welcome to the show. Hi, thank you so much for having me. Absolutely. How can we help?

My husband and I have just joined the Dave Ramsey Group, and we bought Financial Peace University, and we're starting on that. We've gone through the first lesson. But I have a question. We have about $48,000 in debt right now between personal loans, student loans, and car loans. And I have an inherited IRA that I received from my grandfather when he passed away, and it's about $30,000. So should I cash that out because he was of retirement age? It would literally be paying taxes on it, no penalties for taking that out.

Should I withdraw that, cash it out, and pay off some of this debt? Well, looking at this, Heather, I like the mindset of you wanting to get out of debt, understanding that debt's a threat not only to your current situation but also to your future. Let me ask you this. Do you and your husband have other funds earmarked for retirement? Some. I have a couple20,000 in a rollover IRA, a little under $1,000 in a different IRA, and then $8,400 in public employees retirement association.

Okay. I was a teacher for a little bit. Very good. And what are your ages? My husband is in the military. He's in the military. I am 40 and he's 44. Okay. Now tell me these debts.

You said you have about $48,000. How much is the personal loan? $4,500. $4,500. And then how much is the have about $48,000. How much is the personal loan? $4,500. $4,500. And then how much is the car? $25,000. $25,000? Mm-hmm.

Okay. And what else do you have? Student loan of $17,600. Okay. $17,600. And what else? That's it. That's it.

We have a house, but a mortgage. So looking at this, are you familiar with the debt snowball? Yes. Okay. So we're going to list the debt smallest, the biggest. So you've, you got the 4,500, the 17, six, and then the 25,000. So I definitely would look at this inherited IRA as an opportunity to clean up some debt. Uh, but you've got to begin to have this mindset that we're not borrowing anymore. We're not going backwards. Okay. This money was left to you, was intended to be a blessing. And so you've got an opportunity to really fast forward your financial progress by utilizing that money to clean up the debt. And so that's exactly what I do. You look at this and you'd be able to completely wipe out

the student loan and completely wipe out the 4,500 and make a dent on the car. And so with that mindset, that's the progress that I would make if I were you. Yeah, absolutely. Heather, how much do you guys make a year? Um, well,

since he's in military, it's kind of funky. Our take home, like in our bank every month is 10, five. Okay. Yeah, that's great.

Well, tell him, thank you for his service. Yeah, absolutely. Okay. Wonderful. Awesome.

Well, thank you, Heather. And yeah,. Awesome. Well, thank you, Heather. And yeah, I think that it's a great, what a great blessing. I always love to see when someone gets some type of inheritance, they're able to put it towards bettering their future,

right? They're not just out, just spending it and going crazy on something, but they're actually using it to completely change their life, which is part of this, of the step of getting out of debt. It really is. And if you take a look at whatever they were paying on the $4,500,

I think she said that was a credit card, and then what they're paying on the student loan, taking that dollar amount once it's paid off and now throwing that toward the car, eventually, Rachel, what they're going to do is get in a position where it's all paid off. Now they can redirect all the money that was going toward debt toward now their fully funded emergency fund. So it's got a great opportunity to really help them fast forward their progress. Absolutely.

Such a great, great legacy from her grandfather that she's able to use. So cool. All right. Elizabeth from Twitter asks, with today's constant data breaches, is identity theft insurance a smart move or a bad idea? Oh, what's your take, Rachel? Oh, very smart move. Yes. Yeah.

I mean, this is something we actually, at Ramsey Solutions, we give to all of our team members. I mean, identity theft protection is something that is, I think it's required today. I mean, in 2020, with all of our information everywhere all the time, it's very inexpensive and it can save you hours beyond hours beyond hours

if your identity is stolen. When you have the insurance, they help with all of that. And Zander Insurance is who we use. It is. And here's the difference, Rachel. A lot of people out there, you will hear about identity protection out there. Here's the difference. You need identity protection that has restoration services.

Restoration services means that if someone were to breach your social or your information, the company is not only going to help you resolve it, they're going to help you put things back to the way it was. And that's the hours upon hours that I've seen people have to call, fill out a false fraud report with the police, have to fill out a police report, and then do all these phone calls. And so if you have that identity theft protection with restoration services, you don't have to be bothered with all of that.

Yeah, absolutely. I mean, I feel like this is something we see all the time. I feel like in the news at least every other week. Oh, it is. I mean, it's everywhere. And here's something else. And insurance is there, you guys. It's for a safety net.

Yes. Like renter's insurance is something that a lot of people don't have. Get renter's insurance. I mean, a lot of these things are pretty inexpensive. Term life insurance. I mean, all of it, relatively speaking, can be very inexpensive, but it can save you so much money in the long run and time when life hits you. Well, and Rachel, you're a millennial. Okay. You're one of those young people. Are you a millennial, Hogan?

You run around tapping things and paying for stuff. I don't trust things. Okay. I'm old school. But here's the thing. If you've got a college-age student that's on a college campus, you want to think about getting identity theft protection for them as well. Yes. Because in this sharing type of economy, a lot of times information can be compromised. And so you want to be smart and be careful. Yep, absolutely. All right.

Well, Chris Hogan, Ramsey Personality, here with me hosting this hour. Rachel Cruz here. And it's a free call anywhere in the country at 888-825-5225. This is The Dave Ramsey Show. You know, I get lots of questions about ID theft since it's a huge problem. Most people just worry about financial fraud, which is a big mistake. Tax refund fraud, for example, is out of control. Last year, the IRS paid out over $10 billion in fraudulent refunds. Thieves are stealing your refunds. They're also hacking into accounting and tax preparer firms to steal your personal

information and use it for all kinds of fraudulent activities that aren't detected by pricey credit monitoring and prevention plans. That's why Zander's ID theft plan is the only one I've ever recommended or used. They cover all types of ID theft, including tax refund fraud. Plus, they take over the work if you become a victim, protecting your money if you get hacked. They even protect your kids for free on their family plan. Go to Zander.com or call 800-356-4282. It's just the smartest, most affordable way to go. Welcome back, America, to the Dave Ramsey Show. I am Ramsey personality, Rachel Cruz, filling in for Dave this hour with Chris Hogan.

Ramsey Personality sitting next to me. Yes, it is. I'm having fun, Rachel. I know. This is so great. We've got the people. The phone lines are packed. It's awesome.

And people have questions, and we're going to try to help as many as we can. Absolutely. Coming up next is Brittany from Tennessee. Hey, Brittany. Welcome to the show. Hi. Thank you guys for taking my call. Absolutely. How up next is Brittany from Tennessee. Hey, Brittany, welcome to the show. Hi, thank you guys for taking my call. Absolutely. How can we help? So I have a quick question. I've been married for about four months. However, we do not live together.

We live three hours apart because I'm a teacher in Tennessee, and we were trying to wait for the period to be over. Well, earlier today, he called, my husband called, and said that he wanted to separate the finances, the budget, and he wanted me to tackle my debt, and he wanted me to worry about his debt. And I kind of wanted a little bit of advice. How do I move forward from here? How long have you guys been married? You said five months?

Four months. Four months, okay. So, yeah, you guys are in the thick of newlyweds. Why, why does he want to do separate? What was his reasoning? Uh, I have, yes, I have a majority of his debts and he was saying that he has dreams and he kind of doesn't see a way out. How much debt do you have? I have about 80,000 combination of student loans, car, and credit card. Okay. And how much do you make a year? I make $47,000 a year. How much does he make? He makes about $38,000. $48,000? $38,000. $38,000. Okay. Yes, ma'am. Okay, Brittany, I can tell you our rule of thumb when it comes to finances and couples

until the day you say I do everything is separate so if you guys are engaged if you're dating my advice would be different the fact you guys are married you have to learn to work together and be one in every aspect of your marriage because here's what you're going to find out

money is a tool in every part of our lives and it affects every part of our lives. And when you start to run in two separate lanes, you start to have two separate lives and then you start to have two separate dreams. You guys are working towards different goals when you're supposed to be one and unified. It gets really messy really fast and it's really hard for one person to win financially in the relationship if you both are not on board. And so his problem is, is he's using pronouns like mine and yours, his and hers, right? No, the vocabulary needs to be ours together. Chris Hogan sitting next to me, I always quote him, but he always says, we need to be more French. Oui, oui. Together. Like it is

ours together. Because I'm telling you this, not just to be more French. Oui, oui. Together. Like, it is ours together. Because I'm telling you this not just from a financial standpoint, Brittany, but from a marriage standpoint. Like, you guys working together, that's going to create so much unity outside of the finances that is going to be so key for you guys long term. And so this is a must. And so for him, his reasoning was, because he has so many dreams of his own, which I say is okay. You're going to have separate dreams sometimes because you're two separate people. And so you're not going to deny that. One of my dreams would be to live in Manhattan in New York. My husband's dream would be to live in a duck blind in Arkansas. So like those are two very separate dreams,

but together we have shared dreams that we work towards together. And that's, what's going to be really important. So him having a dream of his own, I'm okay with that. But the fact he wants to do things so separately makes me think you guys don't even have a dream together. So tactically, the accounts need to be combined. The debt is combined together. You guys work at this together as a team because that's what marriage is. It really is.

Brittany, are there any children involved in this? I do have a five-year-old. You've got a five-year-old. And how long did you and your husband date before you got married? We dated for six months. Okay, so relatively quick. And so inside of this, you know him really well. What's his hang-up? Is it your debt, or is he not sure you all can ever pay it off? He's not sure that we can pay it off. Okay. You know, some strategies.

But seeing all of my debt kind of, you know, makes me feel uneasy. Okay. The reality is, as Rachel was saying, you guys got to work together. So I would encourage you to sit down tonight, and I want you guys to talk about this. Looking at this, this is a danger pattern in my mind. It's a red flag. If you guys go with separating, I doubt you'll ever bring it back together.

And so you guys may need to do some marriage counseling. You may need to get realigned and really talk through this. I mean, you were engaged for six months and then married, and you've been married now for four months. So you're under a year in working together. But talking about this money stuff and working on it together, you're going to be more effective aligned together. And so I agree. You guys need to really discuss this and do not separate those accounts yet. That's an easy, quick fix, but it's not a long-term solution. Yeah. Brittany, stay on the line though. And Kelly Daniels is going to pick up and give you guys a membership to Financial

Peace University. You guys need to go through that class together, because part of this is possibly ignorance on his part. You guys may just not know. And so what this is going to do is educate you and show you not only the importance of working together as a married couple, but actually how to do it. Alright, coming up next is Josh from Georgia.

Hey, Josh, welcome to the show. Hi, thanks for having me. Absolutely. How can we help? Okay, so I'm in graduate school, and I'll defend my dissertation in May, and I have accepted an offer at a job in Ohio. And so I'll start in Ohio in August teaching. I have a home here in Atlanta, and I'll have to sell that home to go to Ohio, obviously.

And the home's done really well. And so we owe $75,000 on the home and the houses around us are going for about $210,000. So my question is, we have debt on the house. We have $8,000 on a car and we have like $112,000 in student loans. And so do I take the profit from the sale of the house and roll that into a new home when we move to Ohio? Or do I just try to take out as much debt as I can with it and then rent in Ohio? Yeah, how much are you going to be making in August when you start?

About $80,000. Okay, that's great. Yeah, I would definitely encourage you guys to rent when you get to Ohio. Not only are you moving to a new place and figuring out what part of town you guys want to live in, but renting is smart not only for that because of a new location, but also where you guys are financially. So I want you to be completely out of debt with a fully funded emergency fund of three to six months of expenses and then buy your home in Ohio. I know that's going to be a hard mindset because you're going from a homeowner to now back to a renter.

But I promise you can throw that $75,000 of equity, throw it at your debt. I mean, you've made a huge progress and your debt snowballed already. But just by doing that, finish cleaning out the debt and then save up. You're making a great income at $80,000 a year. Save that up for that emergency fund and then look for a down payment on a house after that. Finish cleaning out the debt and then save up. You're making a great income at 80 grand a year. Save that up for that emergency fund and then look for a down payment on a house after that. Yeah, Josh, you've got a great opportunity to do some cleanup. You said homes in that area are going for around 210. You've got a $75,000 mortgage. So you've got some serious equity here, less real estate fees and things of that nature to allow you to pay off the 8,000 in credit card debt and really make a serious attack on the student loan debt.

So it is going to be a little difference in mindset. But you've got to remember, my friend, you're setting up your future. How old are you? Oh, we put him on hold. Oh, he's off. He's gone. He's okay. But being young like that, you've got this mindset of, hey, I'm moving forward now with

a different view. The payments that I was making on the credit cards and the student loans, now I'm redirecting that toward my fully funded emergency fund. And then, Rachel, what we call Baby Step 3B, right? And that's where you begin to save for a home down payment. It's going to take some time, but it's going to feel so much better. Yep, absolutely. Going to Facebook, Sean asks, I opened a whole life insurance policy on my daughter the day she was born.

She's now two years old, and I'm wondering if I should switch her to term. Logan, you're sighing over there. Well, I get riled up when I hear whole life. Here's the bottom line. You know, the deal with insurance. Let me answer your question directly first, Sean. You don't need life insurance on a child. You've got your life insurance on you and

your husband. So if something happens to either one of you, you can replace your income. You don't need it on a child. What you should be doing is redirecting that money towards college savings for that young child. And a lot of people will do this. And again, in the whole life industry, it's just a sale that happens as people pick up the phone and talk to family and friends. Yeah, I mean, it is a selling point. I had a friend and her grandfather opened up a whole life policy and she cashed it out at 18. And she was telling me all about it. And of course, I'm the money friend.

So she's like showing me all the stuff. And she's like, okay, so what do I do with this money? All that. And in my head, and I ran calculations after, I thought, man, if he had put that money not in a whole life policy, but it just put it in a growth stock mutual fund, how much more she would have had. And it's such a selling point, though. They get you. So again, yeah, you don't need insurance unless life insurance, unless someone's dependent

upon your income. That's right. And for a child, focus on that college first. What a gift. Or just do a mutual fund for them. This is the Dave Ramsey show. I love talking about companies that know how to do business right. You've heard of Grip6 belts, right? Well, if you haven't, it's the only belt you can get online with no holes, no flap, and no bulk.

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that gives the strength and support of a belt without even knowing you're wearing one. I'm really proud of these guys. Check out this month's special offers from my listeners at Grip6.com. Welcome back to the Dave Ramsey Show. I am Rachel Cruz filling in for Dave at this hour. And with me is Chris Hogan of the Ramsey Personality. We are part of the Ramsey Solutions Group here. Yes.

The whole gang of us here. And also, I want to tell you, we've got some awesome people out in the lobby that have been over at Baker Street Cafe eating cookies that I've made for them. Melissa Wilson made those cookies. I didn't make them, but there's coffee. If you're in the area,

come by and see us live. We would love to see your smiling face, shake your hand, and take a photo. If you're in the area, come by and see us live. We would love to see your smiling face, shake your hand, and take a photo. And you can come watch the show. Yes. We have a new headquarters here outside of, in Franklin, Tennessee, or outside of Nashville. And we have people from all over that come stop by and do their debt-free screams here.

Rachel, you have been very excited about an article that you've been doing. You've been ready to talk about this thing for a few minutes. What did you find? This article came out on Inc.com and it just got me because the headline 94% of millennials say that this is their number one

life goal. So I was like, okay, what is their number one life goal? Is it fulfilling relationships? Nope. Is it building a career of their dreams? Nope. Is it starting a family? Nope. Exper it building a career of their dreams? Nope. Experiences. Is it starting a family? Nope. Experiences?

No. Oh. Number one top life goal is to be debt free. Really? Yes. A thousand millennials were surveyed and that was the number one answer. 94% of them said to be debt free. So millennials, they're behind basically economically, financially speaking.

So they've invested less in their 401k plans than both gen x and boomers at their age uh they spend 2300 more than gen xers and boomers mostly on credit cards that's what it says which is wow come on millennials we can do better than that but yeah their number one life goal is to be debt free and i think about it i'm like yeah i mean it makes it makes a lot of sense because out of all the generations specifically with student loans i mean debt debt has been normalized and we've seen some studies where they kind of have a backlash because their boomer parents went through the great recession and like all that but it is still such a normal normal part

of life but as you can see normal is not good like it's stressing them out i mean they were saying 67 of them they have uh it affects their ability to focus on work 23 so they have uh physical financial stress causing them physical pain like they become physically ill on a weekly basis 68 said that they have a negative impact on their relationships because of stress, like friends and colleagues. So I'm like, debt is not, it's not a mathematical thing always. No. No one talks about the emotional side of debt and how much it takes from you. And I'll quote you again.

I quoted you last segment. Hogan, I quote you all the time. But it's true that you said that debt is a thief. Yeah. And it is true because it just doesn't just steal your income. It steals your peace of mind. That's right. It steals your sleep at night.

Like when you owe someone something, things change. This article just proves it to me. I'm like, listen, obviously what we're doing, millennials, it's not working. I'm proud of you, A, that you're quoting me. I think it's because I'm here with you. Typically, you kind of make them sound as if it's yours.

You steal, Rachel. I'm giving you all the credit. You steal. Never. But here's the thing. I look at that article and I think a couple of things. I'm surprised that they want to be debt-free. And I feel like it's from a couple of reasons. You're right. The emotional strain and stress, but that they have the awareness of the threat of debt. Yep.

You know? And so I think you're right. The student loans. We've got a $1.6 trillion situation with student loans. Yep. And so for these young people, I want them to know you can pay this debt off. You know, it can feel like it's this solid weight around you that's stealing your joy and affecting your sleep. But if you will just

get plugged into Financial Peace University, we will show you how to walk through systematically and do it. Now, I also have to defend my millennials that are listening and to the Chris Hogan show, because I'm talking to young people, Rachel, that are 21, 22, that have paid off student loan debt or gone to school debt free. And they're they're intentional about it. And so one couple that I talked to, they're 28, 27. They paid off two hundred thousand dollars in student loan debt. And what they did was is they lived off one person's income for a solid two years. The other person's income went straight to a debt.

And so thinking like that, we can clean this up. We just need a plan. Absolutely. And Financial Peace University is that plan for sure. So go to DaveRamsey.com or call us at 888-22-PEACE

to get your membership get started today. Because it is a guided plan and it shows you what to do so those of you that are struggling with student loans on average you're carrying $35,000 it can seem so overwhelming but do not lose hope all right coming up next is Courtney from Ohio hey Courtney welcome to the show hey thanks for taking my call absolutely how can we help yes so um um I should be debt free here very soon. And I'm planning on buying a house cash.

I don't want to get a mortgage. So I'm thinking about possibly buying like a mobile home just so I don't have a rent payment. And I can apply more towards my savings for the house. I just wanted your advice on the best way to go about buying a house cash. Well, I'm going to tell you this. I like the idea that you're on this path. Courtney, how much debt do you have left right now? $9,500.

Okay. Is that all one debt or is that multiple? It's multiple. Okay. What is it? Break it down for me. What do you owe on? So it's $8,000 in credit card and $1,500 in student loans.

Okay. Is the $8,000 on one credit card or you got multiple? Multiple, two cards. Okay. And what's your household income right now, my friend? $44,000. Okay. So I like the mindset that you're wanting to get out of debt. I think it's imperative that you do that before you even think about trying to buy a home. As you know, we listed that snowball approach, so I'm going to attack it smallest to biggest. But on the home that you're talking about, I love that you want to buy it for cash.

The thing about a mobile home is a couple things. Number one, that's a VIN title type of thing, which means you're going to need to find land in which to put that on. And most of them need to be attached to a permanent fixed foundation. So you're going to have, there's a difference between mobile versus manufactured. So I would say do your homework, but I want you to get out of debt, then build up a fully funded emergency fund of three to six months expenses, then you'd save up to pay cash for the home. Does that make sense?

Okay. Yeah, don't do it out of order. And as you pay off these debts, shut them down, my friend. Now, you're going to have to call them, and you're going to have to work hard to get them to close them out. But close them out so you don't use them anymore. That way it keeps you on pace to live your life on your terms, not necessarily worrying about what the mortgage company or the bank is saying.

And Courtney, I would also say to look into something, because mobile homes don't always gather the equity. They don't. That's right. And so I would say to really look at your options and say, okay, maybe if I rent for maybe two years, save up on the side, maybe I'll have a good down payment or maybe enough to go buy something, maybe a very small one bedroom home, maybe not in the best part of town, but you get it less expensive that way home, maybe not in the best part of town,

but you get it less expensive that way, right, to go the whole cash route, if that's what you want to do. But I would definitely look at your other options besides just fixating on a mobile home. And you know what? I had a friend that bought some land. He bought five acres. He paid cash for a mobile home.

Came, brought it out, got it affixed on the property, and then he saved up over three years to build his other home. I love it. And then he was able to sell the mobile home. Or I think he was leaving it for his mother-in-law or something like that. But don't quote me on that. Love it. Up next is Christopher from Ohio.

Hey, Christopher, welcome to the show. Hi, guys. Thanks for taking my call. Absolutely. How can we help? So I've got myself in a situation. I just got out of the military in November. And I am $28,000 in credit card debt and I just bought a new car on Monday. I owe $35,000 on that.

All right. How much are you, are you working right now? No, I'm currently waiting for my disability to kick in from the OVA. Okay. What made you go out and get a new car? My wife is going to start working, and we wanted to have two vehicles. Okay. You mentioned your disability. What happened, Christopher? So I've got a back injury, and I was diagnosed with depression and anxiety.

Yeah. And I'm sorry to hear that. I appreciate your service to the country. Absolutely. But what you've done is you've tried to medicate your injury with stuff. And it doesn't work because at the end of the day, your back is still going to be injured until you get therapy and the treatment. And that stuff's going to keep piling up, brother.

That $28,000 in credit card, I appreciate you calling in because if you hadn't, you'd have blinked and you'd have been at $48,000 in debt. And so you've got to stop trying to have stuff fix this. I want you to reach out and go talk to someone. You need to talk to a counselor and get some guidance. So you're not alone in this, and we're here to help, my friend. Absolutely. Christopher, stay on the line.

We'll get you hooked up with a Financial Peace University class and get you. But again, thank you for your service. This is The Dave Ramsey Show. welcome back to the dave ramsey show i am rachel cruz ramsey personality filling in for dave this hour and chris hogan ramsey personality is sitting next to me yes we've had fun yeah this has been a great show phone lines are loaded up and so we want to hear from you if you've got a question call us 888-825-5225. We'd love to talk to you. Absolutely. Coming up next is Susie from Florida. Hey, Susie,

welcome to the show. Hi, Rachel. Hi, Chris. How are you today? We're doing great. Thanks for calling in. How can we help? I have a dilemma. We are $108,000 in debt, and it's one thing. It's a motor home that we lived in full-time for a long time, but we're upside down, churning in it. I can sell it and front $65,000, but I need to get an equity loan in order to cover the difference. A bank will do that, but they want to finance with our cars in order to do that. It would drive my loan from $108,000 to $27,000 because I do have some cash that I can put toward it. Wow. Okay. So you say this motorhome is worth how much?

Okay. Right. Okay. And so you spoke to the bank, and they told you that,000, I could sell it at a private sale. I owe $108,000. Right. Okay. And so you spoke to the bank and they told you that, hey, they would look at giving you an equity loan for the difference, but they also want to finance your cars? They want to use my cars as collateral. As collateral. Yeah. Two auto loans, right? Yeah. No. Two auto loans, one auto loan, and a personal loan.

No. And it would drop the debt down to $27,000. Okay, how did you guys get upside down on this thing? We moved three different motorhomes. Do me a favor, keep your mouth by the receiver. Sure. Okay, now tell me again, how did you get $108,000 in debt? We bought one motorhome, a fifth wheel, and then we traded in about two years later because it was a piece of crap motorhome.

Uh-huh. And bought another one and then traded into downsize, each time rolling in. Okay. Okay. So you just did a debt roll-a-thon. Oh, yeah. We did. Okay.

And how much is the payment on this $108,000? It's $800 a month. $800. Goodness gracious. That's like a a month. $800. Goodness gracious. That's like a mortgage payment. It is. Okay. I don't have any other debt.

That's it. That's the only thing I have. I own my house. Your house is free and clear? My house is free and clear. Everything else is free and clear. This is all I have. Okay.

Well, listen. Tell me this. Okay. That's a positive. You're out of debt. Your house is paid off. That's good. How much is your household income?

About $75,000 a year. Okay. All right. And so the payment's $180,000. So you all aren't using this motorhome anymore? Once in a great while, but not really. Okay, so you're fired up to sell it. You're fired up to sell it.

How does your husband feel? He's on board as well, but we're just really nervous about financing both our paid for credit. No, there's no way. No, they're wanting you to put that up for collateral. Okay. So no, absolutely not. That's not an option. If I'm you, I'm going to go talk to a credit union about looking at some kind of short-term debt. You guys are making $75,000. Rachel, I feel like this is something that they could get this thing either paid off or get it sold and get a smaller bridge loan that they take out, and they can pay cash

and attack that thing. Yeah, absolutely. I mean, it's kind of what we say even when you're upside down in your car. Take that smaller loan, but get it out. I mean, yeah, get that $108,000. That's what's crazy. The bank wants not only the title on the motorhomehome but they're too paid for cars as well that's over collateralized in this situation that's ridiculous for sure for sure all right up next is juan from arizona hey juan welcome to the show hey how's it going doing great how can

we help yeah so um basically um me and my wife we got married in october and then um and then we found out in the end of january that we're pregnant oh congratulations thank you so um we're 77 000 in debt and it's about a hundred thousand collectively together. We started together our Baby Step No. 2 in January, but how do we go about going through Baby Step No. 2 during the pregnancy? Yeah, absolutely. How much do you guys make a year?

$100,000 together. $100,000. And then $77,000 in debt is what you said. Yeah. So on Baby Step 2, our rule of thumb always when you're expecting is to pause the debt snowball and pile up a bunch of money. So anything you were throwing at the debt snowball, just go ahead and just start saving. Pay the minimum payments. Don't go behind on debt, but save up because this is a big life change. I mean, you're about to enter into like not only

a new baby's entering the family, but also it's a medical, it's a huge medical risk here. And so making sure that baby's good, mom's good, delivery goes well. When all that's said and done, then you can take the savings you were saving on the side, throw it at the debt snowball, and you will get, you'll have a massive leap, which is kind of fun to think, hey, we're going to save up this money. And if we need it, it's there. But once everything's good to go and baby's home, mom's good, then you can take all of that and throw it at the debt snowball.

Yeah. Juan, tell me, break this $77,000 down that you have in debt. What is this? It's, I think collectively we have about $40,000 in student loans. I have an $8,000 car note and then a $16,000 on a uh loan that i had okay all right um so looking at this i mean obviously you guys as rachel said you'd want to make minimum payments if you were gonna do what she was saying and just stack up cash but here's the thing you guys need to sit down and really look and understand that you've got this weight around your neck, the debt.

And that's not, you know, you're not going out to spend it on a $5,000 crib, you know, or $2,000 stroller for the baby. Well, no, I'm just telling you because everybody gets excited and they get off the balance. And so you've got to begin to kind of think and be clear about what are we doing, what's our plan for this. And you've got a young life coming into this world that's depending on you. So we've got to get a got to have a game plan and get ready, Rachel. Yeah, absolutely. Yeah, I want I would I would act like as if you're still gazelle intent. So don't stop that. But the money instead of going to debt and emergency funds. So like he's saying, don't go all luxurious on the baby stuff. Trust me, it's tempting. It can be tempting. Not guilty of

charge, I promise. All right. Up next is Tim from Ohio. Hey, Tim, welcome to the show. Thank you, guys. Chris, Rachel, I have a question. I am completely debt free except for a house. I've got my thousand dollars. I've got my three to six months already saved up. Awesome. So I'm like really good. What I want to know is this. I've been doing this program for probably about six to eight years. I've got about $68,000 left on the house, which will be paid off sometime late 2024. I want to know if I should use that extra money that I had on the cars

to put into a Roth IRA for my wife. It's about $1,500 to $1,800 a month that I have free, and my wife wants to retire at 60. She's 50 right now. I'm putting in 15% into my retirement. I'm also putting in 7% into a Roth outside of my normal work, and I'm using that for my daughter's education. So she'll have about $70,000 to $80,000 that she'll be able to use whenever she goes to school. My wife puts in about 18% into her STRS, which is a state teacher's retirement fund. So that extra $1,500, $1,800, I would like to put into a Roth IRA, or should I use that to pay down the house? Okay. And so all in all, Tim, as you look at the total amount you and your wife have together, how much would you say you all have saved for

retirement? About $400,000 right now. Okay. And what are your ages? My wife's 50, I'm 54. Okay. If I'm in your shoes, I'm taking that extra $1,500 to $1,800, and I'm throwing it at the house. Okay. I am throwing that at the house because, you know, you guys moving into retirement, and you go into retirement, I want you to take your hopes, your dreams, and I don't want you to take a mortgage. So that's exactly what I do. Then once that home is paid off, now you can take the mortgage payment plus that $1,800 and then start to look at what I call building up a bridge account.

And that's the money that you have aside between the time you can touch your 401ks and IRAs at $59.50. You can start to put that aside into a growth stock mutual fund and still get some growth. Yeah. Man, what a great position. See, he knew his numbers. Okay? And I'm going to tell you, Rachel, people that are in touch like that, knowing their debt, knowing their investments, and knowing their game plan, I'm going to tell you, these are the people that end up reaching their goals sooner than others. Absolutely.

Because they're being intentional. That's right. They have a plan. They know what's going on. He's been doing it for six years, you guys. That's right. Six years. That could be you.

I like it. Thank you to producer James Childs and associate producer Kelly Daniel. And for you, America, Rachel Cruz hosting this hour with Chris Hogan. Thank you so much for listening. This is The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you

to come to Nashville and tell Dave your story.