The Ramsey Show - App - You DON'T Have to Have a Car Payment (Hour 1)

Episode Date: September 26, 2019

Rachel Cruze, 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 

Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host.

Thank you for jumping in. Open phones at 888-825-5225. That's 888-825-5225. Jennifer starts us off this hour in New York. Hi, Jennifer. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. I could really use your advice. I'll try. I'm 44 years old, and I have two kids in college. My husband passed away suddenly about a year ago and the estate just settled and I received about $1.3 million. Right now it's just sitting in a money market account and I have a house that's worth about $700,000 and to pay off the mortgage is about $441,000.

And I'm just wondering if you think I should be paying off my house. Sounds like he passed away young. Yes. I'm sorry. He was 46. Thank you. What happened? Just something with his heart.

We didn't know what was wrong with it, but there was some undetected heart thing i'm so sorry thank you um and and i also have like two kids in college and i'm thinking that it's probably going to cost about when they're done with schooling i'm guessing it's going to cost about 300 000 to pay off everything when they're done with school so i was thinking if I pay off the house, I can, when I sell the house in maybe like seven to 10 years, I can use the proceeds from selling the house and pay off the student, you know, the student debt and maybe invest some of the other parts. Are you working? I currently, I'm part-time, only making about $15,000 a year. Okay.

I've just needed some time. Sure. Absolutely. I understand. So we've really got three things that we could do with this money. One is we feed you and take care of you, which is primary. Okay. The second one is we could pay off the house,

and the third one is we can pay for college. It sounds like there's probably enough money to do all of those things already there, and I wouldn't be taking out student loans. I would just, if there's student loans there, I'd go ahead and pay them off, and I'd be paying cash for college as we go. But if it's $300 and $400 for the mortgage, $300 for the college, that's $700 and you said there's a million that leaves another $300, right? Yes.

Okay. And if you develop a career path where you're able to care for yourself without touching that $300, then that makes a lot of sense to be able to just say yourself without touching that $300, then that makes a lot of sense to be able to just say, okay, we've got school covered, we've got the mortgage paid off, and it doesn't take a lot to eat for you to live. You need to create some kind of income. But you probably need to do that for you anyway,

regardless of the economics of it, right? You need something to do. Yes. I mean, yes. you need something to do. Yes. I mean, yes. I'm hoping to get something maybe next year, maybe earning around like $30,000. Okay. Why $30,000? It's just hard for me right now just to consider like a full-time job with my skill set. I'm thinking maybe i can make

like 30 40 000 a year okay well we have the ability to uh give you some more skills with some of this money if we wanted to so part of what you're doing is just you know normal human uh pain from what you've been through and you're just recovering and I completely am with you on that and I think you've taken an appropriate amount of time to do that and that's very wise. But then I start asking myself, I'm talking to an intelligent 46 year old lady, you're young what are you going to do with the rest of your life? Well 30,000 isn't it? What are we going to do? Let's go do something big. Let's go be something. let's go be something let's go be something what's your next what's your you know the next chapter look like that's glorious and

fun and makes money and all that kind of stuff for you uh you're you're taking care of uh because the two of you had done wonderful planning, obviously, and had handled money very well and insurance and everything else, and so you're in good shape. But I don't want you making $30,000 in perpetuation. I want you to do better than that. So if I can solve that part of the equation, then that frees up easily to say, oh, let's just pay cash for college, pay off any loans that are there, and go and pay off the mortgage,

and we don't have any payments then. We've got $300,000 more laying there. But I don't want $300,000 laying there and you spending $70,000 and making $30,000. Right. You don't want me taking my monthly expenses out of that extra, that $300,000. I'll be out of money. Exactly. Exactly.

I don't want to burn up this nest egg. And so I've got to solve the take care of Jennifer equation before I start paying off the other two things. So it's okay to just sit for a little while more. That's okay. And you don't have to have it completely solved, but you have to see a path by which you are earning enough to take care of you without touching this nest egg. And the day you have that path then you write a check and pay all the student loans in the house okay so in your opinion i should be trying to get something better for myself career-wise before i pay off my house yeah and i'm thinking if i don't

i want you to i want you to be making enough money to live on. Because my monthly payment right now for my mortgage is about $4,000 a month, and it's just... Well, you can go ahead and pay off the mortgage if you want, but if you pay off the mortgage and you pay off the student loans and you pay cash for college, which is highly advisable, and you don't fix this income issue, even with no house payment, you can't live on what you're earning. Okay, so I really need to look at my income then.

Yeah, let's solve that. I mean, you go ahead and write a check, pay off the house if you want, but I wouldn't pay off the student loans and start cash-flowing that out of this nest egg until you get this career thing solved. And it's not an emergency. Nothing's on fire, but you don't want to burn through the rest of this and i don't want you to burn through the rest of this right because i don't have that much for retirement i maybe have about like 30 000 in retirement what would it

take you to live do you think if you had no house payment it's probably about i would think around like 2 500 a month if i did not have the house payment. Okay, so $30,000 a year. So you need to make $50,000 a year. Okay. That's great advice. I need to look into that. I think that's, and then paying off the house.

Yeah, I'd write a check today and pay off the house. Awesome. I'm comfortable with that. That loosens things up. And then let's solve the career thing in the next few months, and then we can go ahead and cash flow the rest of this college and put those boys on a budget. You know, their mom's a widow, and she's trying to protect the nest egg.

Those boys need to be on a budget at college. It's not a hog wild and run up student loans and $300,000. Yeah, time to tighten up on them too hang on i'm going to send you a copy of ken coleman's book the proximity principle which helps with careers more than any book i know i've out there right now yeah the proven strategy that will lead to the career you love and that's where you're headed right now this is the dave ramsey show MZ Show. Did you know that if you combine the data breaches that have occurred in the past 12 months, almost every American has had their personal info compromised or hacked. Over 50% of our listeners and viewers tell us that they or someone in their family has

been a victim. And 70% of those folks have had it happen more than once. See, this is unbelievable. Once thieves get your info, the risk never goes away and they can use it whenever and however they choose. It truly has become an issue of not if, but when. That's why the only plan I've ever recommended is through Zander Insurance. I actually sat down with them and we put together a plan that I felt provided the best protection,

but didn't waste dollars on things you could easily do yourself or were just gimmicks. The key is getting protected before you're a victim and it's too late. Go to Zander.com or call 800-356-4282. We are all at risk, and it doesn't make sense to wait. Numbers don't lie. That's Zander.com or 800-356-4282. We should have had like a drive my car bump or something coming into this. Well, this song is by the Cars. Oh, that's a song by the Cars.

See, now that's a little more subtle than I'm used to. James is good at music. I'm not going to lay it out. James is like a music guy. You've got to work for it. That's good. Okay, so I shouldn't question the maestro. That's what we're saying.

Because this is all about cars. Rachel Cruz, Ramsey personality, YouTube star, joins me. This segment, the Rachel Cruz Show, talks about cars, the one that just landed on YouTube. We did. We did a whole episode on cars. Did it talk about cleaning out your car? No. There's stuff growing in your car.

Which I probably need to do. The back floorboard is a greenhouse. Hey, any mom with toddlers, listen, Goldfish Crackers. There you go. Old yogurt. It's just there. It's just there. And other things.

You embrace it is what it's called. That's right. You know you are not a kid person when you get in or you get in your car and it's like clean. I want my car clean. No, there's no hope. There's no hope. So you talk about why car loans are the worst type of debt. Yes.

So on the show, obviously, we debunk all the myths around debt and talk about debt. But focusing on the car itself and car loans, you know, even just the simple mathematics of taking out a loan, paying interest on something that's going down in value. And all really, I mean, there's all the excuses in the book of why people take out car loans. The largest payment and the largest purchase on payments other than a house. Yes. And it goes the wrong way. And it goes down in value. And so we kind of just debunk all the myths, everything from even as a mom, like, you want a safe car for your kids.

Or, you know, it's everything wrapped around our culture when it comes to cars. So we talk all about it. I even trade in my heels for a pair of flats, and I go to a mechanic. No way. I do. What? I go to a mechanic, and I figure out and talk through with him uh places that you can save money things that you can do to your car on your own to save things you should take to a mechanic things you need to

take to the dealership saving money on car repairs all the stages of car repairs and we've got the uh we've got the ramsey car guide out there now and it's got several chapters everything you need to know about car loans which we're just talking about how to do it without a car payment one of them is car maintenance 101 which matches up with this segment, right? That's right, exactly. And so you just go to DaveRamsey.com slash car guide, and you can get everything about insurance on a car, how to buy a car. It's like a 26-page download thing.

I mean, it's like massive. Yeah, the car guide's amazing. It's pretty cool. And it goes hand in glove with your segments. Yes, with this episode. That's right. Inspiring stories are people paying off their cars. Are you talking about people paying off their cars?

Yes. Yeah, it's great. I mean, the internet's an amazing thing because you can reach out into the Facebook community that we did on the Rachel Cruze Show Facebook community. And it was just like all these stories of people selling their cars, paying them off, just to show that it is possible. It's possible to not have a car loan in America today. Did they all sell them or someone just paid them off?

Both. A lot sold, though. They just went ahead and got rid of them completely. Yeah, amputate the Tahoe. That's right. That's right. Sometimes that's what it absolutely takes. Now, there's new video episodes every two weeks, every other week on Facebook and YouTube of The Rachel Cruze Show.

And your viewership continues to grow every single episode, doesn't it? It does. And the podcast is taking off as well. The numbers are going in the right direction, which means more and more people are listening or watching. And once they subscribe, they can watch the back episodes. Yeah. Which apparently the most popular, everybody's been making fun of me because I was making fun of you for what the bachelorette episode has been one of the highest rated episodes so far people are fascinated you're not fascinated by it is not

in the cool zone but these were things that we already knew me not being in the cool zone i was like no we didn't know all the secrets of the bachelor bachelorette but we got them all and figuring out into what they call so yeah it's good we bring content that's not being in the co-host. I was like, no, we didn't know all the secrets of The Bachelor Bachelorette, but we got them all in figuring out what they cost. So, yeah, it's good. We bring content that's not always on The Dave Ramsey Show. Would never be. Would never be on The Dave Ramsey Show to The Rachel Cruze Show. So that's where that world lives. But you just came on as a guest because I'm about to go on maternity leave next week.

Yeah. And we've filmed shows all the way for months, like, until mid-April. So there's lots of good content there that will continue to go, even though I'm not in the office. Lots of pregnant Rachel. Yeah, I'm pregnant for like a year and two months. So I just keep telling people,

we filmed these before I went on maternity leave. But it's a fun show because we touch on so many topics. But again, this one, this latest one was about cars. Having an elephant, yeah. A year and two months. It is. That's how long I am technically pregnant on the show. topics but again this one this latest one was about cars having an elephant yeah a year two months it is that's that's how long i am technically pregnant on the show so the real yeah proof oh my gosh i'm just not i can't deal with this all right a couple other things to mention the money and marriage event in nashville is february 14th and 15th and we've done a couple

of add-ons, and it worked. The thing is almost sold out already. I know, I know. So Nashville's a fun destination city, and so wherever you are in America, come to Nashville for Valentine's weekend. We'll have a great event, Valentine's evening on the 14th,

and then the 15th, we are doing kind of something new. We're doing a live taping of the Rachel Cruz show here at Ramsey headquarters, so you can come to Ramsey Solutions Headquarters. Do that. That's an add-on.

And then also an additional add-on is to go to the Grand Ole Opry that night. Saturday night. Saturday night. So Friday night is the Money and Marriage event, Valentine's.

Saturday during the day of Rachel Cruz taping here at the Ramsey Solutions Headquarters. And you get to tour and see everything. It's pretty cool. Oh, yes. Yeah, yeah.

We'll have breakfast together and hang out. Oh, neat. It'll be great. Cool. And you get to tour and see everything. It's pretty cool. Oh, yes. Yeah, yeah. We'll have breakfast together and hang out. Oh, neat. It'll be great. Okay, cool. And then that night, the Grand Ole Opry if you want. So you can do one of any one of those three things. That's right. You just sign up, of course, at rachelcruz.com,

davramsey.com under events, money and marriage event, February 14th and 15th. The new version of the latest episode of the rachel cruz show dropping uh today this week uh on why the car loan is the worst type of debt the real cost of buying a new car ways to save money on auto repairs and inspiring stories from people who paid off their debt that's happening there as well so when you went to the mechanic and you put on your flats and you do that segment and all that kind of thing, I mean, I'm probably a failure as a dad because you probably didn't know squat, did you?

Well, the things I learned, not to put you down, I learned from Winston. Okay. Because Winston does some stuff on his own. Yeah. So it's fine, though. It's fine. Things like windshield wipers, changing out your windshield wipers. You can just buy them off Amazon.

So much cheaper than obviously letting a dealership for sure or a mechanic do it. But even things like the myth of changing your own oil. So he walked through even the price of what it takes to buy all the supplies, to having to take the oil. All of it together pretty much comes out break even if you just take it to a mechanic for you know 30 bucks or something so so all the all the ideas that you think might be cheaper to do at home we break down and then the things that really are air filters windshield wipers those simple things that you can do at home very cool but no i felt a little out of my comfort zone yeah well i mean when you were little i still turned a wrench on everything by the time you were a teen i'm not touching a car sure i didn't have to i'm paying

somebody to do that crap and so um yeah the but the downside is is that you guys didn't get trained daniel got a little bit because we we he and i redid a jeep and worked on it so he got a little bit of turn a wrench thing but but i didn't make you girls learn how to change a wall like some of my buddies made their daughters learn how to do and that kind of stuff. It's okay. I survived. But it turns out you're going to be okay. I'm fine.

I'm really fine. I get my dad card back then. Yeah, you're good. You're good. All right. You know, you taught me to avoid a car loan so that way I can afford to take it to the mechanic. There we go.

Oh, there we go. There's the connection. Nice save. And the car guide. Nice save. And the car guide will help many people save money. The Ramsey car guide. Yes.

How to buy a car. So that you can take it and not have to feel like you have to change your own oil. There you go. Because you'll save money. Getting the right car insurance, car maintenance 101, should I repair or replace, how to sell a car, everything you need to know about car loans, which says, I think that page says don't. How to live without a car payment easily uh how

to pay cash for a car teens and cars how to rent a car that'd be dollar car rental and uh helpful links and resources all of that there's several chapters there and so that combined with rachel cruise show you're going to get everything you need to know about cars yeah it's a lot of logistics around this one area in our life but like you say even opening segment right it's the status symbol of choice like it's it's become this thing in our culture of what we expect a certain standard that we expect with our car that those are myths that have to be blown up as well okay so a reminder go to youtube search rachel cruz subscribe to the rachel cruz show you'll be able to watch this segment on rachel cruz uh her car segment.

There you go. That's more like it. All right. Got the right bump music. Oh, there you go. And then you go to DaveRamsey.com slash car guide and download the car guide. DaveRamsey.com slash car guide. And that's how you find that stuff.

Good stuff. All right, Rachel. Thanks for coming by. Thanks for having me on. Appreciate it. Number one best-selling author, Ramsey personality, and my daughter,

Rachel Cruz. In the lobby of Ramsey Solutions on the debt-free stage, Mike and Bethany are with us. Hey, guys. How are you? Hey, Dave. How's it going? Welcome, welcome. Where do you guys live? We live in Clearwater, Florida, but originally from New Hampshire.

I love it. Very fun. Well, congratulations. And here to do a debt-free scream all the way from Florida. That's right. Good. How much did you pay off? We paid off just over $308,000, Dave. Whoa! In just less than five years. Wow! Very cool. And your range

of income during that time? We started off at about $100,000, and then we ended up with about $120,000. Good for you. What do you guys do for a living? So I work for St. Jude Children's Research Hospital in gift planning. Awesome. And I'm a financial advisor, and I work for Vernick Financial Planning in Seminole, Florida. Very cool. Good for you guys. So $308,000 over five years. I'm guessing that might be your mortgage. Well, not necessarily.

Sadly, no. No. We did sell a rental property. Oh, you did. Okay. All right. How much of the $308,000? What did the rental property bring?

Well, we owed $172,000 on that, so we sold that, and that was actually up in New Hampshire. So when you speak about having a property that's outside of where you live, we definitely felt the pain points there. It was difficult to manage. What did it sell for? $172,000. Oh, got enough to pay it off? Just enough to pay it off. Okay, very good. And what was the rest of the debt? We had some credit cards. We had personal loan. We had just about everything you can think of. Student loans.

Student loans. Y'all are just normal. We're normal. Just normal broke. That's right. So what happened five years ago that lit you on fire? Well, Dave, our story actually starts a little over 10 years ago. We were dating at the time.

I was living in New Hampshire and working in Massachusetts, and Bethany was living and working in Massachusetts. And I had asked her one morning if she could drive up my Jeep Wrangler that I just paid off the day before and drive it from Massachusetts to New Hampshire to get the tires changed. And along the way, she hit a patch of ice in the highway, and she got into a pretty bad accident and she was okay thank god um but the jeep was totaled oh right so long story short the tow truck came the police came they made her take it off the road and the tow truck guy quoted her at 200 to take it off and meanwhile i'm leaving work and i'm heading up there i'm praying to god i'm a new christian i'm saying god what do i do i

thank you that she's alive, but what do I do? I just worked so hard to pay this Jeep off, and what's next? So I felt like he said, it's going to be okay. You're in good hands. And I eventually met her at the tow truck place, and wouldn't you have it, they bumped it up from $200 to $400. So I said, we don't have $400. We don't have enough to cover that.

So lo and behold, there was a car dealership across the street, and I did one of the things that you say not to do, which is lease a car. And we're getting all the paperwork scored away, and then after we get it all taken care of, again, I'm a new Christian, and I'm praying about it. And I feel like God in that moment said, flip to Job, and flip to the same mile marker that Bethany broke down at, which is mile marker 4.8. And so I flipped to job and flipped to the same mile marker that bethany broke down at which is mile marker 4.8 and so i flipped to that and i should preface by saying that the tow truck guy he was complaining

he wanted us to pay the 400 we didn't have it and we pitched a fit and he kept on saying we were all plowing we were all plowing referring to snow and so, when I flipped open Job 4.8, it said, Those that plow evil and those that sow trouble, reap it. And so that was my indication that, you know, God's got this. It's in control. But what I always felt like was, you know, the world's against me at that point. And what I had to really realize after reading the full chapter was that God orchestrates things in your life, And sometimes you feel they're bad, but sometimes it's to pull out your purpose in life. And that's really what it did. So we left

that tow yard and we left the lease car and we're driving away. And I said something to Bethany that I kind of heard growing up, which is you'll always have a car payment. Car payments are just a way of life. And so when I heard that statement, it kind of triggered back a memory. I actually took Financial Peace University just out of college when it was 13 weeks long. And I didn't really, unfortunately, didn't really follow the plan after that. But that nugget of information of, you know, that you'll always have a car payment really stuck. And so when he said that, I said, that's not true. That's a myth. And so fast forward. You have no idea why it's a myth. I don't know. But somewhere back in my head, I remember some guy saying that. Right.

That's great. So about a year later, we were married now. And we never really fought about money. But really, I think because we were just doing our own thing, we weren't really talking about it much. But then Financial Peace University was offered at our church. And I kind of convinced Michael to go. He was really kind of not not for it. He thinks like, you know, where the bills are being paid.

We got lights, you know, in the house, got food on the table. We're good. But he we kind of went and and opened up, you know, our eyes to some things and gone. But however, that led us to our first financial fight, you know, after that class. And so that kind of increased our stubbornness. And so we didn't really, again, follow the plan. But then fast forward a few years later, Michael retired after a 20 year career in the military. And we moved down to Florida and I finished grad school. Michael started and went back to get his degree,

and then we got the opportunity to lead Financial Peace University, ironically enough, at the same church that I had taken it many years before him. Comes full circle. Absolutely. And that's when really things started to kick off. That was about that five-year mark. Once you're leading it, you've got to kind of do it. Absolutely. I mean, there's no hypocrite going there.

So it's game on, and that kicks everything into gear. Absolutely. Amazing. We're always going to have a car payment. No, we're not! It's a myth! I love it. That's awesome.

That callback, that recall, that is so, so perfect. Nowadays, what do you tell people the key to getting out of debt is? Well, I think we talk about the budget, right? That's definitely a huge piece of it. We weren't really budgeting. Before we took this class, I mean, it was just like, you know, you talk about the budget, right? That's definitely a huge piece of it. We weren't really budgeting. Before we took this class, I mean, it was just like, you know, you make a purchase and you just look at your bank account to see if you have enough money in there. And that's it. And so I think the budget really being intentional with your money.

And then, you know, working together, being on that same page. You know, there were definitely times throughout the five years that, you know, one of us was gazelle intense and the other person wasn't. And so I'd say about the last couple of years, things really got together. We were really strong and we were both gazelle, you know, same equally, you know, same equally intense. And then thirdly is having your why. And that's when we reflected back the first couple of times we took this, we didn't really figure out what our why was or, you know, have that accountability from anyone. I know as a single person, when I took this, we didn't really figure out what our why was or have that accountability from anyone. I know as a single person when I took it, I didn't have that accountability partner.

I didn't have a why. The same when we took it as a couple, we didn't have the why. Once we found that, that's what really hit home. Very cool. So, Michael, thank you for your service. Who was your biggest cheerleaders? Lots of people. I mean, leading 13 classes now for financial peace. Oh, wow. Right? You tend to have a lot of friends that you make along the way. You've gone big. Okay. Right. And so I just want to acknowledge, if I can, one of our great,

great friends is Randall and Maddie. So they're over here. Cool. They've been super cheerleaders. Thomas and Stephanie, who couldn't be here today. Our previous church that we first taught FPU at, Pastors at Bay Point Christian Church, Countryside Christian Church, which you've offered smart money to before. Lots of pastors and staff there. Our family. Yeah, family. Wonderful, guys.

Very, very cool. Well, congratulations. Thank you. How does it feel now that you're debt-free? I mean, it's kind of surreal. You know, it really is amazing. You know, we're almost finished with Baby Step 3, and then we'll go into 3B to save for our house. Yeah. And we were just the other day, you know, our count is over $10,000, and we looked at each other, and I said,

have you ever had that much money in savings? And neither one of us had. And that was just just it just creates this sense of just peace really yeah next month will be baby step three complete way to go guys i'm so proud of you you've done such a good job and dave if i can just add you know your staff here has been amazing um we've got a chance to know will hendrian and and chris and just everybody here just been awesome chase yeah lots of folks. We're blessed with a good team. We really are.

Thank you. Well, very well done. We got a copy of Chris Hogan's book for you, Everyday Millionaires. That is the next chapter on your journey. You're going to be there. 10,000 is going to look small. You're going to look back.

You remember when we were all jacked up about 10 grand? You're going to look back and say that someday. That's where you're headed, man. So I'm proud of you. Very, very, very well done. So, all right, Michael and Bethany, Tampa, Florida, $308,000 paid off in five years, making $100,000 to $120,000. Count it down.

Let's hear a debt-free scream. Ready? Three, two, one. We're dead free! Love it! Woo! Yeah, baby! This is how it's done right here, man.

Absolutely incredible. Very well done, you two. Very well done. Very proud of you. This is the Daveave ramsey show We'll be right back. Sid is with us in Texas. Hi, Sid. Welcome to the Dave Ramsey Show. Hi, Dave.

Thank you for taking my call. Sure. What's up? I have been following you since 2005, a couple of years after I came here to the U.S. I read the Total Money Makeover, and I became debt-free in 2008 2008 and I've been that way ever since. So my question to you is today about my mortgage. Just a quick background, I purchased my primary home in Austin in May of 2015 with a 15-year mortgage and 20% down. In 2017, I had to move to Houston for work, and I was unable to sell the house without losing about $30,000 to $40,000, mostly realtor fees and closing costs. So I ended up renting it. And then when I moved to Houston, I purchased my primary house over there with similar terms. The total mortgage taxes and insurance for both houses

with our combined income is less than 30% of our take-home pay, so I felt comfortable doing that. I am now on track to pay off my primary home by September of next year. And my question is on the second house. If I should try to sell it again next year when the lease ends, or if I'm unable to sell it, or it seems like I'd be losing some money on it because the house... What would it sell for? It would sell for the same price that I bought it for.

What would it sell for? $420,000. Okay. If you have $420,000 sitting in the middle of your kitchen table, if you had $420,000 sitting in the middle of your kitchen table, would you go buy a rental house in Houston? I probably would not. No, then you need to sell it. Got it. I think that makes sense. My only thing was, you know, I'm fairly heavily invested in the stock market, and it seemed like an opportunity to, in Houston I would. My main concern was, you know, this is out of city in Austin.

That was my main thing. But, again, they seem like a good diversification. I like real estate, and I like real estate that I pay cash for as an investment, and I like it in the same city that I live in. And none of those things are falling into the heading of this discussion. Got it. So if I'm in your shoes, I out of there i'm done with it and i think you've been hanging on just to try to keep from losing a little bit of money and it's cost

you a lot of hassle and a lot of peace in the process and so i would take my money out of that property and i would start saving to pay cash for another property as a rental after you get your personal residence paid off uh in the city that you live in. I love real estate. I love the idea of being diversified into it in the city that you're in with no debt. Stephanie's in Virginia. Hi, Stephanie. How are you?

I'm doing well. How are you doing? Better than I deserve. What's up? So my husband has an irregular income. We don't really know what his paychecks will be every two weeks when he gets paid. And we've gone through Financial Peace University, and we're still on Baby Step 1. We're close to getting to $1,000, and then I had car issues.

So, unfortunately, Murphy's Law happened. I'm sorry. How long ago did you go through Financial Peace University? About back in March. Yeah, March. And what's your household income? The household income take-home is about, I'm sorry, I think it's $50,000. And I had a car payment.

Before taxes, you make $60,000, $70,000 a year. Yes. And since March, you haven60,000, $70,000 a year. Yeah. And since March, you haven't come up with $1,000? No, because what happened, I got money. Y'all are lame. I know. Yeah, I did the excuse. Like I said, what happened, my car went down.

I had medical bills and all these other issues. I guess my biggest question is about the hills and valley that you always talk about. I'm wondering of understanding of how you incorporate in that, because I know you're – I read a little bit about the hills and valley, but I'm not 100% sure when it comes to the whole budgeting. That would be for someone that has an irregular income that is extreme. Like they have no – some months they have no income and other months they have a huge income. Okay, because my husband, he can have like a great paycheck, say, you know, to run the household.

It's about two to pay bills and have food. Sometimes he has that. Sometimes he has $500. One time he was $600 short. So it goes up and down, and sometimes he could be $600 short in two paychecks. Yeah, but then it comes back in the other checks. So it's not $6,000 short. It's $600.

So the irregular income planning sheet in your budget forms that you got in Financial Peace University. Go back and re-watch the budgeting lesson again. Re-listen to the budgeting lesson again. You've got access to all of that still. You flunked that course, so you need to go back. And because the irregular income just is a prioritized spending plan on the portion of your income that is unpredictable. And so if you have a $60,000 or $70,000 a year income, that means your take-home pay is $4,000 a month, give or take.

But that's the average, and sometimes it's down as low as $3,000, and you come up short, and other times it's as high as $6,000 or $7,000. And so what you do is you run a regular budget on the amount that you can count on, which in my example there would be the $3,000 amount, okay? And then you run a prioritized spending plan on anything that you didn't get to in your regular budget on $3,000. And the prioritized spending plan is simply you're listing your debts or you're listing your things that you didn't get to,

most important that I didn't get to to least important that I didn't get to. And those things almost in your situation, they will almost never include necessities. And so you guys have continued to live without a budget while you were in the class and after you got out of the class. And you've continued to not write it down. You've continued to just make money and try to survive. And that's why you've made no progress.

And so I actually recommend you guys go back through the class. You can go back through. I tell you what, just stay on hold. Madison will sign you up, and we'll put you back through the class because that's what needs to happen. You flunked because the whole thing in Financial Peace University is get on a budget, and you haven't done that yet since March, and this is September, and that's why you make enough money and you still don't have $1,000.

It's not the car payments, and it's not the medical bills. It's the living out of control. That's what's done it to you. And so, and your husband and you both have got to be working on this, and that's the only way this is going to work. All right, up next is going to be Daniel in Tennessee. Hi, Daniel, how are you? Pretty good, Dave, how are you?

Better than I deserve, sir. How can I help? I am calling. My wife and I just recently sold our home, and it was a home that I had paid off before we had gotten married. And she has about $54,000 in student loans. I'm having a hard time getting her to understand that it's okay for us to use this money to pay off her student loans. Why is it not okay? We both were previously married.

When I got divorced, I had a large settlement from the divorce um she did not uh it was did she know all of this when you got married i knew all of this yes did she knew all of this about me and i knew all of this about her then here's the rule okay then here's the rule this is not a financial thing this is a marriage thing it's very hard or it's harder especially in second marriages to combine everything but it is essential to winning all the data points we have in studying millionaires we find almost none of them that do it without their spouse dragging their spouse along beside them. She's not your roommate. She's your wife.

And I would tell her that. You're not my roommate. You're my wife. If you were my roommate, I wouldn't pay off your student loan debt. But you're not. You're my wife. For richer, for poorer, in sickness and health, unto thee all my worldly goods I pledge. That's the old marriage vows, the old-fashioned ones.

And that's the proper way to handle a marriage. You'll prosper more in your relationships and in your finances if you combine everything. And that's how I talk to her about it. It's a very loving thing you're doing. Hey, guys, it's Blake Thompson, senior executive producer for The Dave Ramsey Show. This hour's over, but you can find more great content on our YouTube channel. Catch the most watched Dave Rants, debt-free screams, and the very popular Everyday Millionaire segment.

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