The Ramsey Show - App - You Can't Out-Earn Your Stupidity (Hour 2)

Episode Date: April 26, 2019

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🎵 🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones, You jump in. The phone

number is 888-825-5225. 888-825-5225. James is starting off this hour in Pecos, Texas. Hi, James. Welcome to the Dave Ramsey Show. Hey, how's it going? Good. How are you? I'm doing pretty good. I just started listening to you here recently by chance because, well, it's the only radio station I get out here. You're stuck with me, brother. So every day I've got you on the radio. I guess my question is, I make about $140,000 a year. I currently have $91,000 worth of debt, but I really, really, really need to replace my house. Where do I start to pay off to be able to achieve the goal of getting the house?

The catch is $50,000 of that debt is my land, which is a part of my inheritance. I don't have to pay that immediately. That can be paid at any time. What's the other 40? An RV and two trucks. And what's the... The RV I use for work, so I have to have it. How do you use an RV for work?

I live wherever I work. My company pays me to use my own housing. I just move it wherever I work. Gotcha. Okay. And so you're married then? Yes, sir. Okay.

And what's the emergency on your house? My current house is just, I mean, it's falling apart. It's a three-bedroom. I've got four kids. It's too old. I'm constantly having to fix broken pipes and walls and door jams, and it's just, it needs to go. It's a single-wide trailer house. Oh, okay.

I really need a double-wide. Okay. Well, let's start with this. You're not wise to invest in mobile homes because they go down in value. None of them go up in value. So, no, you don't need a double wide. Is this on the land that you inherited, the family land? Yes.

Okay. So what we need to do is start working towards you building a home. That's what we need to do. You make $140 building a home. That's what we need to do. You make $140,000 a year. Let's build a house, okay? And let's just get rid of the junky single wide, all right? Because that double wide, you pay $70,000 for it, and in five years, it's worth nothing. Right?

Right. Yeah, it's going the wrong way, dude. I want to go up, not down. And the house will go up in value. So, of course, you're probably not in the market to sell any of this stuff anyway, with it being on family land. But either way, the land is in your name, right? I'm sorry?

I said it will stay in the family forever. Yeah. So the land is in your name, though, right? Yes. Okay. This particular portion of the land. All right. Good.

All right. Well, portion of the land. All right. Good. All right. Well, here's the thing. The first thing is that you jump on every dollar and download the app. Your wife does the same thing. I'm going to put you into what we call Financial Peace University. I'm going to pay for it. Okay? It's $129 to go through the class, but I'm going to give it to you.

And you both can watch the videos, even if you're separated from her by work, because the whole thing's online. And or, where is the home? Where's the family property where she lives? It's in Fort Worth, about 400 miles away. Good. Okay. Well, she also can attend the classes. I don't know if there'll be one near you, the way you're describing where you are,

but there's about 12,000 or 13,000 of the classes operating in churches out there. So she can attend the classes, too, but you both can follow along and both be doing the lessons at the same time because it's totally online. And I'm going to give that to you, and so is the EveryDollar app. Now, that means the two of you are both working your budgets together, even though you're separated by several hundred miles, okay? A lot of military families do this when someone is deployed, in other words. And so we're used to doing this with couples that are living like you guys are.

Now, once we're doing all of that, we've got EveryDollar behaving in a certain way. Then the only question is, what is the best order to do things what's first what's second to hit your goals okay 140 000 a year 90 000 but 50 of it is the land okay correct and um so what i would do is look at selling the 40. How much do you own your truck? My truck that I use for work is I owe $25,000. And then my wife's truck I owe $6,000. Okay.

So you have a $25,000 truck that you got out in the workplace destroying it. Jeez, man. Okay, that probably needs to be downgraded to about a $6,000 truck too. And then you're living in the RV. So we're going to list all your debts, not counting the farm, $40,000. When you look at $140,000 versus $40,000, I'm saying you're paying all this off, not counting the farm, in probably a year. But you're going to be on beans and rice, rice and beans, and so is the family back

home. And we have this goal of getting all these trucks and RVs paid off, because if you had no payments except the land, you'd be in shape to go get a construction loan that would pay off the land and build you a house. Okay. That's about a year and a half, two years away with what i'm talking about and the family just lives the way they've been living in the meantime or worse and we get out of debt you do whatever it takes to clear all these debts because that sets you up because man think about

if you had no payments you'd have money Well, I just started this new job. Prior to that, we were seriously paycheck to paycheck. So this new opportunity here, I'm hoping is an opportunity to get this stuff paid off. There you go. And that's not going to happen accidentally. It's going to be with a detailed plan of attack. What do you do? I work out in the West Texas oil fields. What do you do? I work out in the West Texas oil fields.

What do you do? I do flow back. Okay. And that's very detailed with an exact game plan to create an exact reaction, an exact result that you want. You don't do this. You don't pull off your job accidentally, right? Right. It's cause and effect.

And that's what this thing I'm talking about is. You're going to crank down to nothing on the expenses, and you're going to keep making – you cranked up your income, and that's what sparked the conversation. And we're going to clean up this dadgum mess and then, you know, get a plan drawn to build a house and get a builder lined up and start talking about building a nice home on this. And that pays off the $50,000 inside that construction loan as well. So then all you end up with at the end of the story is a mortgage. And on a 15-year fixed rate, and you're going to walk your way right through that. So hold on. Kelly's going to get you signed up for financial peace university again it includes every dollar plus which connects to your bank it includes the uh all the lessons

and all the stuff that you and your wife are going to do together uh this is the class on money they should have made you take back in high school but nobody did back then now we've got it in a bunch of the high schools but but there you go. So hold on, dude. We'll take care of you. Thanks for being a new listener. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM,

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And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thanks for joining us, America. This is your show. We're talking about your life and your money. It's the Daveave ramsey show well graduation season is almost here if you have a college graduate in your life that's kind of scared about finding a new job well we've got the perfect answer may the 13th just a couple of weeks away, will be the launch date of Ken Coleman's new book, The Proximity Principle, the proven strategy that will lead to the career you love.

Now, it's not just for college graduates. It's for anyone thinking about looking for a career you love. Ken is our Ramsey personality that speaks to the idea of career and answers career questions every day on the Ken Coleman Show. As a matter of fact, those of you joining us next hour, he will be with us answering your career questions all hour next hour. So don't miss that. This is a great gift for college grads.

High school grads, we've got the Graduate Survival Guide, Five Mistakes You Can't Afford to Make in College, by Ramsey Personalities, Anthony O'Neill and Rachel Cruz. Find out about all of this at DaveRamsey.com and check out our sale on grad gifts. And or call Customer Care, our Ramsey concierge, at 888-22-PIECE, 888-227-3223. Marshall's in Birmingham.

Hey, Marshall, welcome to the Dave Ramsey Show. Hey, Dave, thank you for taking my call. Sure, what's up? My wife and I are struggling with a couple of decisions we need to make. We're currently working on baby steps four, five, and six. I'm 38. I have about 850 in traditional IRAs and about another 160 in my 401k. And we started our Roth IRAs and our 529 plans after we did the class earlier this year. And we were able to max out the Roth IRAs this year.

And we put about $2,000 in each of our kids' 529 plans. Did I misunderstand you? You're 38 and you have $850,000 in your IRAs? Correct. How? Part of that was from an ESOP payout. Oh, okay. Because it's mathematically almost impossible to get there at 38 with that level.

In IRAs only because of the limitations how much you can put in. So you rolled an ESOP into there. That was a big chunk of that. Correct. Okay. okay wow so you're millionaires congratulations thank you very well done um so so we did get our off maxed out this year um but in our 529 plans um our kids are 13 and 10 and we were only able to put about $2,000 into those so far. And the only debt we have left is about $350,000 on our mortgage. What's your household income? $190,000.

You're killing it. Okay. All right. So your question is what? Well, the first question is, so I have another $200,000 coming in December for an additional ESOP payout. It was split. And I'm trying to figure out if I need to take that money and put it toward the house

or either put it toward education for the kids. It's going to be penalized if you take it, isn't it? Yes, sir. It'll be penalized if you take it. That's correct. Yeah. No, I never take penalty money i always roll it even though at this stage you've just got a bazillion dollars in there um in your case what i would do is say you got retirement done i would stop baby step four and

work on the house but i wouldn't work on it with the esop i'd work on it with your income okay and i don't know why you're struggling to put two thousand dollars in your kids 529 if you're making 190 and you don't have any debt except your house well we we just started on um last month so that was last month oh last month okay i thought you're talking about a year okay so yeah i mean what i would do start i would throw some chunks of income towards those 529s to where you feel like you're caught up and ahead of the game. And, you know, kids kind of check that box.

Kids is done. Kids college is done. And then knock the house out. And then from there, if I'm you, I probably am going to jack back up to maybe 15% going into 401ks and so forth and IRAs. But you probably need to start doing some what we call bridge investing, investing to use before 59.5. Because, you know, that million dollars is going to double roughly every seven years that you've already got in there. And you're 38. So, you know, you got about four more doubles there.

That's going to be $4 million or $5 million if you never add anything else to it. And then by the time you hit, you know, in your 60s up to 70. And so, yeah, you're fine. I'm going to concentrate on the 529, and I would roll the ESOP into there, which I'm not even counting that. That's going to roll in there, too. That's going to be even more. So roll that into the IRA. Don't pay taxes and penalties on it.

And then let's just use your fabulous income with no money going into retirement right now until you get your house cleaned up because you're you're very very you know this but you're in a wonderful way you're very unusual on where you stand with money in a retirement account at 38 years old what do you do for a living okay um i'm a data center engineer good for you well well done sir you're killing it very well done and you're paying attention so you're probably going to be okay good stuff you know that's how it works pam is with us in uh new york hi pam welcome to the dave ramsey show hi thanks for having me sure what's up um so i guess my question is i just feel like i'm starting my life a little bit late my husband and i are both physicians i just finished my residency in pediatrics this past summer and started my first real job. We're currently in New York.

My husband has one more year of training to go in fellowship, so we'll be moving to North Carolina pretty soon. But we're both looking at about $630,000 in student loans combined. So my question is, does it matter how we start paying it down? Should we work on one first or just attack them both equally? And how does a house down payment work into that plan, if at all? It doesn't. You need to clean this mess up.

You guys have a massive, scary amount of debt. And what's his specialization in? What's he fellowshipping in? He'll be done with neuroradiology. Okay. And so what are your projected incomes when you're both completely out? So the job I just took, it'll be about $180,000 for the first six months, so essentially $90,000. And then the projected income is about $330,000 at the practice, the previous position. Okay, so your projected income is $330,000. What is his when he comes out?

Anywhere from $270,000 to $300,000, starting up to about maybe 400. Okay. When he's... And so let's just kind of look at the shovel-to-hole ratio, which is what I look at. The hole is really scary. It's 630,000. But the shovel is 700,000. Right?

Well, in a year. I know, I know, but not today. But I'm saying within the near future, within the foreseeable future. So that that that's how you address that. And you say, so I'm going to be student loan debt free easily in two years once the 700 kicks in. Right. Yeah, I guess so. Yeah. So we're not I'm not saying don't buy a house for a decade. I'm saying this is a legitimate mess. You have an absolutely crazy, wonderful income in your future, which I'm proud for you. I'm glad you're making that. And, you know, in the meantime, let's just start whittling on the debt.

But as the incomes come up yours, and then as he finishes the fellowship and his income kicks in, delay purchases. Don't have Doc Itis and go buy stuff. Delay purchases. You've been holding your breath a long time to get to this point. Now you've got to clean up the last mess before you move on to purchases. Then we start talking about buying a car that you pay cash for, buying a house, and crud, you ought to pay it off in no time. You guys are going to be very wealthy if you're careful with this,

but you cannot out-earn your stupidity. You have to have a plan, and you have to execute and clear the debt. And way to go. Wow. Crazy, wonderful numbers. This is the Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war. If I've taught you anything, it's that blindly throwing money at a problem is a stupid plan

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NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee. 37027. In the lobby of Ramsey Solutions, Eric and Gail are with us. Hey, guys. how are you? Hello.

We are better than we deserve, Dave. Love it. Where do you guys live? We're from Springfield, Missouri. Wonderful. Welcome to Nashville. And all the way down here to do a debt-free scream. Yes.

That's pretty cool. How much have you paid off? Dave, we have paid off $383,000. Woo! And how long did this take? We first started our journey for real about eight years ago, but I actually first found you in 2008 when I was doing some active duty service with the military. Oh, thank you for your service.

My pleasure. And during the eight years, what was your range of income? We started at $65,000, and just this last year, we hopped a little over $120,000. Good for you. What do you guys do for a living? I work for O'Reilly Automotive as an information technology professional. And I'm a homemaker and a part-time martial arts instructor. Oh, good for you.

Very cool. And then I'm also still in the Missouri National Guard. I serve our country with part of the 135th Army Band. Oh, neat. Very fun. Okay. So eight years in 383. Oh, neat. Very fun. Okay. So eight years in 383, I'm guessing you paid off your house. We paid off our house.

I love it. I'm looking at weird people. Look at you. How old are you guys? I'm almost 42. And I'm 43. And you have a paid-for house. We do.

Did you ever thunk it? No. It's hard to believe, Dave. Wow. So what's the house worth? It's about $230. Love it. Way to go, you guys.

How fun! How fun! So what inspired this to get serious about it eight years ago to the point that you've worked all the way through the baby steps? You're baby step seven now. I have to say, honestly, it's probably this young lady right here. She was not a planned child. We thought after these two strapping young men that we were all done.

And then my wife came up to me and said, oh, by the way. So she was born. We weren't quite sure because we thought we were done. But we named her Faith. I love it. Because we have faith in the Lord that he is good to us. He has provided everything for us. And he gives us the strength to do everything that we need.

Amen. Well, well done, you guys. Very, very well done. Absolutely fabulous. Wow. So what do you tell people the key to getting out of debt is? You want to take that one? Just got to make a budget

and to do that you have to have a teamwork and work together on it and stick to that budget i i would agree with with gail uh you know if you taught us in financial peace university that uh the the analogy of the horses the team that and when they're just by themselves they can't do much but when they pull together and they train together and they work together, there's a power, there's a synergy

that just makes amazing things happen and moves mountains. And at the root of all that, of course, is our faith in God. He's been good to us, so good. Amen, amen. Well done, you guys. Very well done.

Thank you. So you've been on this track a long time. Yes. How do you stay with it eight years? Go ahead. We had some great support along the way. Family, of course, and friends, our church family, our

FPU family, and then our very special friends who came and did their debt-free scream here about four years ago, Sean and Jessica Saunders and their whole family, they were our FPU coordinators, and then we turned around and led FPU two times. And just being with that community of people who are all on the same plan, working together,

it's just a wonderful support. That is how you stay with it. You have people around you that are also running the race, and it becomes normal to want to finish the race. You normalize those smart things you do. So well done. Way to go, guys. Excellent job.

Excellent job. And the kiddos are with you, so what are their names and ages? We've got Jonathan and Aaron. They are twins. They're almost 13, and then Faith here is almost nine. Perfect. Good stuff. Well done.

Well, we've got a copy of Chris Hogan's book for you, Everyday Millionaires. You're going to be one. You're on the way. That's the next chapter in your story. And very well done, you guys. Thanks for coming down and sharing your story. Thanks for having us. Thank you.

All right. It's Eric and Gail, Aaron, Jonathan, and Faith. $383,000 paid off in eight years. That's their house and everything. Make it 65 to 120. Weird people. Count it down. Let's hear a debt-free scream. Here we go.

Three, two, one. We're debt-free! We're debt-free! I love it wow very well done very very well done awesomeness man you can do it you absolutely can do this stuff it It is possible. You just work a plan, and you work a plan, and you work a plan, and you do it together. No one wins by accident, but it's possible. Justin is on Facebook in the Ramsey Baby Steps community, private Facebook group that you can be a part of if you'd like. Just join us and ask to be let in, private Facebook group that you can be a part of if you'd like. Just join us and ask to be let in and we'll let you in.

Great conversations in there. If you have an emergency in Baby Step 4, do I stop the investing again to rebuild my emergency fund? Yes. If you can't rebuild it fairly quickly anyway. You don't want to be walking around without an emergency fund and be doing great on your 401k that'll bite you and uh so because you know if you have an emergency and you don't have an emergency fund but you do have a 401k plan people have a real tendency to cash the 401k out and pay a 10 penalty plus their tax rate that's like borrowing money at 30 or 40 interest to pay on an emergency because you just didn't stop and build an emergency fund.

So if you look at it and you say, you know, okay, we cut in the $1,000. Oh, we can put that without stopping it. We can put that back in a month or two. Okay, that's fine. But if you cut the thing down to the bone and you basically got no money again, yeah, you need to stop your 401K completely until you rebuild that. Because, you know, you're asking for trouble to be walking around without an emergency fund. And that's what it comes down to.

So, good question. We appreciate you joining us in the Ramsey Baby Steps community on Facebook. Pretty cool stuff. Very cool. Hey, here's the thing, folks. If you walk the plan here, you're going to find that it absolutely works. Sherry's on Twitter. Dave, I know you're no fan of home warranties.

How do you feel about asking the seller to purchase a one-year warranty for the seller at closing? The seller to purchase for the buyer at closing, I guess is what you meant. There's nothing wrong with that. It's not the end of the world. But, you know, it's a part of a negotiation. Usually $300 or $400 or whatever you can buy that in most cases used to be what it is. I haven't seen one in a while. But I actually used to sell those when I was a real estate agent a bazillion years ago when I was 18 years old.

But that's 40 years ago. But, yeah, anyway. So there were $300 back then. They're probably not $300 now. It just occurs to me that that's just stupid. Okay. Doing math in my head while I'm trying to make my mouth work at the same time. So anyway, whatever they cost, if you couldn't get that as a discount on your price, then, yeah, it'd be fine.

Anything you can get. If you can get them to throw in anything. If you can't get it at a discount. It's just a negotiating point at that but i wouldn't sit and say oh the only way i'm buying this house is if it gets a home warranty no you don't need to buy the house if that's the case you know but it's just kind of a little tack-on thing that you can get thrown in and it costs you that a buyer nothing that's fine as a seller i wouldn't worry about it. I wouldn't offer it.

You know, again, the house is the house, and I've bought a lot of property and sold a lot of property without warranties on them. And, you know, the buyer that wants a warranty and that's a deal breaker is probably a problem buyer. So I don't think I'm dealing with that. Nah, I wouldn't offer it as a seller. If it came in, I wouldn't refuse to do it, depending on what it costs, and was I willing to accept a little bit less if it closed the deal. That's simple.

So, hey, thank you for following us on Twitter, Sherry. We appreciate it. This is the Dave Ramsey Show. We'll be right back. Thank you for joining us, America. Scott is in San Francisco. Hey, Scott, how are you? Good, how are you? Better than I America. Scott is in San Francisco. Hey, Scott, how are you? Good, how are you? Better than I deserve. What's up?

I got a new job coming up soon, and I have an HSA with my current employer. So I just want to get your advice on what to do with the current HSA when I change over to my new job. Just roll that into the new one. Okay. Yeah, it's easy and very easy to do with the current HSA when I change over to my new job. Just roll that into the new one. Okay. Yeah, it's easy and very easy to do. I've done it before myself, and mine are all combined. I've been blessed in that I've not had any financial or any medical needs to use it, and so my HSA has just become yet another tax-deferred way of saving and investing

money, which is very cool. Daniella is with us in Atlanta, Georgia. Hi, Daniella. How are you? I'm good. How are you? Better than I deserve. Is it Daniella or Danella?

It's Daniella with a Y. Daniella. Gotcha. Okay. How can I help? I'm in big step number two with my husband, and we look like we're going to need a new AC unit. We had it serviced, and the repairman said we need a new refrigerant. And I don't know how long to replace refrigerant and when to replace the unit and how to pay for it.

If you're in Baby Step 2, you replace the refrigerant a lot of times because it's a lot less expensive than a unit. You're just putting the gas in again. It used to be Freon, but, I mean, you're just gassing a unit up. I've actually, the studio I'm sitting in, we've done that this week. We had to put gas in it twice. It's got a leak, and they're replacing it when I go off the air today. So, but you're probably not leaking every day like we are with that one. Your leak is probably much slower and will last you quite a while.

So I would just fill it up with gas and run it. Okay. All right. Thank you. Yeah. Listen, here's the thing. Some folks in the heating and air business specialize in replacing units and finding things that are broken on yours in order for you to need to replace it. In other words, they're upselling you.

And it doesn't always happen, but sometimes it happens. And when you are broke and getting out of debt, you can patch a heating and air unit and keep it running for a while a lot of different ways in order just to get by. Now, long term, that's not a good plan long term you'll buy a new heating and air unit when yours is worn out and is leaky and everything else right you'll be stuck with that but i mean i i've done all kinds of things the heating and air units to make them last just a little while longer uh just to get by until we could get the money to pay cash for one. And that's going to put you out there, the other side of baby step three.

And that's where you want to get to. The other side of baby step two, for sure. But if you get over there at the emergency level, maybe it becomes an emergency. But if you can keep it limping along a little while until you simply can save up and pay for it, the new unit, then that's by far your best idea. So, good question. Thank you for joining us. Open phones at 888-825-5225.

You jump in. Matthew's with us in Minneapolis. Hi, Matthew. Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing today? Better than I deserve. What's up?

So I just had a quick question. A few weeks ago, I was going through some mail, and I noticed that I had my parents purchased a whole life insurance policy like 20-something years ago. It said 1995. i'm sorry and my my dad uh talked about it from time and time again but i just didn't know really a lot about it so i investigated the other day and i had 20 the balance is like 2400 in it um so my question is should i keep it in there no or or take it or take the cash out and pay off uh twenty four hundred dollars in debt take the cash out and pay off twenty four hundred dollars in debt do you have life insurance in place otherwise i do me and my wife uh both work

at the same employer and we both have um have the uh life insurance the one with the 10 times the annual income you do you got term life insurance 10 times your income yep we do yep okay all right very very good then you have no need for this insurance policy and it is a really really bad place to keep money especially when you can use the money to get out of debt. So, yeah, we're cashing it in and using it on the debt. Do your investing in the future anywhere except anywhere, except inside of a life insurance policy. Absolutely horrible. Now, the last thing is this.

Not today, and there's no panic. It's a sidebar to what we're saying. I also someday in the future want you to get some term insurance that's not just at your work because life insurance at work is not what we call portable meaning it won't go with you if you leave and so were you were you to have a cancer scare a heart scare diabetes or something that would cause you to have trouble getting insurance, and then you left your company, you couldn't get a new policy, maybe. Or if you did, it'd be super expensive. So I want you to have some outside of work, okay? Okay.

But not today and not as a part of this question, not as something you've got to do right this second, okay? But it is worth doing and long-term because I don't want you to get stuck. It doesn't happen very often, but it's just enough of a concern to say. I tell people never have 100% of your insurance at work for that reason. It's okay to have some of it there it's okay in your case to have a big portion of it there if it's all furnished especially it's free hello not bad you know and uh that's the direction to go so good question thank you for joining us open phones at 888-825-5225 you jump. We'll talk about your life and your money.

Let's see here. Shana is in the Ramsey Baby Steps community. I'm having trouble with the concept of stopping my 401k. My husband and I make $140 a year. We only have $50,000 in debt. My employer will contribute

8% if I contribute $3. How can I pass up this free money when we don't have that much debt anyway fifty thousand dollars in debt is not much debt well you grew up in a different neighborhood than i did that's called a lot of debt so you do whatever you want shana but um you said your husband there's a way you got a husband and that was you focused on him the way you get out of debt is you focus on it and so if it's not much debt you should be able to pay it off in a year so you're not going to miss much of a match what you focus on is what you win at and you know you need you need to decide what you

want to win at and well i want to win at investing well you're not focusing on investing when you have debt and you're paying on debt and investing neither one are getting your focus and you're not focusing on getting out of debt when you have debt and you're investing neither one are getting your focus and so that's why we walk the baby steps very cleanly to be debt-free accept your home and have an emergency fund in place yes i have said for 30 years and it has made people millionaires to temporarily temporarily, temporarily, temporarily, temporarily stop investing while you're working your debt snowball. And the debt snowball, as most of you know, is listing your debts smallest to largest, paying minimum payments on everything but the little one,

and attack the little one with an absolute vengeance. So that's the plan. And when you knock out that little one, you take the payments you used to pay there and you attack the next one down. When you knock out that one, you take the payments you used to pay there and you attack the next one down. And that's the process you used to pay there, and you attack the next one down. And that's the process you use. So use your debt snowball.

What you focus on is what you win at. That puts this hour of the Dave Ramsey Show in the books. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host. We'll be back. Hey, it's Blake Thompson, senior executive producer for the show. You know, you can listen or watch Beanyware with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests.

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