The Ramsey Show - App - You Have to Believe That It Can Happen For You (Hour 1)

Episode Date: December 12, 2018

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Live from the headquarters of Ramsey Solutions, 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. It's your show, America. The phone number here is 888-825-5225 that's 888-825-5225 ryan starts off this hour in seattle washington hey ryan how are you hey dave i feel like i'm living a country song but i'm doing better than i deserve i hear you how can i help, so a couple of weeks ago,

my wife went in for emergency C-section and we had our beautiful baby girl at 28 weeks gestation and she's in the NICU and that has been ramping up our medical bills pretty quick. And unfortunately, we're on a medical sharing, a faith-based medical sharing company, our insurance that didn't cover us because we didn't meet the threshold of number of days to be on the plan before we conceived. And luckily, all of the baby's bills are covered under kind of the ACA and then some of the insurance stuff that we had retroactively purchased. But none of my wife's stuff going forward is.

And we're already approaching the $150,000 mark. And as fate would have it, you know, we'd paid off all of our our debt but not two weeks before all this went down and now we're just kind of feeling a little hopeless and and um yeah figured we'd see if we could get a little inspiration okay um what's your household income currently it's 90 000,000, and I'm the sole provider for us. Okay. And what kind of assets do you have? What kind of money do you have?

Very little right now. I mean, I've got a couple cars that are all paid for cash, and then we've got our emergency fund. Do you own a home? No, we don't. That was our next step was saving up for to fully fund our emergency fund. Let's do two things okay number one then the um the first rule is we're just going to let this sit to the side right now and we're going to take care of

mommy and baby okay okay you can't do anything about this today and you need to focus your energy on your wife and your baby we We'll get to it, okay? There's two reasons for that. One, you can't do anything about it today. There's three reasons. Two is you need to concentrate on your family. Three is we kind of got to let the dust settle on this before we know exactly what to do, okay? So let's play pretend for a second.

It's six months from now, and mommy and baby are all okay, and there's a $200,000 bill laying there because all of the bills have finally come in and we've totaled them. Okay? Yes. Then what you'll do is begin to work your way through those and have, you know, you'll just develop a story, a narrative that is the truth, by the way, that is, you know, we don't have any real assets.

We do have an income, and we do not have the ability to pay $200,000. And you go, and a hundred of that will be the hospital. One bill will be in one place, a big chunk of it, right? And you go and you schedule a meeting as soon as you can get all the bills totaled and get everybody home and healthy okay you know in other words this thing is quantified it's quantified there's we know what the total is today we don't know what the total is we just know it's bad right but once we've got the totals and they're accurate then we immediately we don't wait two years we immediately schedule a meeting with the administrator at the hospital in person and go and sit down and say,

thank you for taking care of my wife and for taking care of my child. I really appreciate it. We do not have the assets to pay a $100,000 bill. We make good money, but we can't do that. And we didn't have insurance in this. And you can explain the whole thing. And so what kind of relief can you give us? We're willing to do something.

I'm sitting here saying thank you. I'm not disputing anything. I'm not saying you're bad people. I'm saying I can't pay this bill. It's kind of a hat in the hand, humility type thing. And the interesting thing is when you do that in person with people around the medical community,

you generally get good mercy. And they'll probably look at you and say, if you'll pay $25,000, we'll take care of the $100,000. We'll settle it. You probably can settle it for a quarter on the dollar. Now, individual small bills, maybe not. But the big chunks, you go take the time to sit down.

It's a $75,000 meeting if they write off $75,000, right? So it's worth your time. And you go sit down in person and say, okay, $25,000, and I will pay that over the next six months. And you just load up and start paying $3,000 or $4,000 a month and get back on beans and rice, and you clear the thing. And you honor the agreement that you make with them to settle all of this. But the answer to your question is you're going to be fine. You're going to work through this.

But the way you're going to do it is you're going to be proactive, and you're going to be grateful. You're going to work through this. But the way you're going to do it is you're going to be proactive and you're going to be grateful for the service that was provided and you're going to ask for mercy. Okay. And they'll give it to you. Because here's why. They're not getting the money. You don't have it.

I mean, when they look at it from their shoes. I got a guy who bothered to come into my office. He's not threatening me with a bogus lawsuit to try to get out of something. He said, thank you. And he doesn't have any money. I'm not getting my money. So I might as well extend mercy, right? That's the equation if you're sitting on the other side of this desk.

And so that's why it happens. Plus, generally speaking speaking with a few exceptions you know there's people attracted to the medical world are people of mercy and so it's just that's the thing they're just not out to see if they can drain every drop of blood out of somebody so that's how it's going and uh so the answer to your equation is this two years from now a year and a half from now, you're going to be just fine. But you're going to have to go get out of debt again. Oh, well, you got a beautiful baby out of it.

We'll work it out, right? Yep, you're right. You're going to be fine, man. You're going to be fine. And you know we'll walk with you. We'll help you any way we can. You call in here and we'll, you know, answer any questions you got as you go along. Obviously, anything you settle with these folks, you get it in writing,

and you do not allow electronic access to your checking account when you're settling debts, whatever the scenario is. But you go meet with the big ones and get on the phone with the little ones and work on settlements. I didn't have insurance. You have $200,000 in bills here. I can't pay them all. But if you. I got $200,000 in bills here. I can't pay them all.

But if you'll give me a deal, I'll pay yours. And, you know, that kind of thing. And you develop a thick skin and a narrative to work through this, and you'll get through it. Thanks for the call. Open phone's at 888-825-5225. We're glad you're here, America. Thank you for being with us.

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supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, 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. Thank you for being with us, America. We're glad you're here. Molly is in Harrisburg, Pennsylvania. Welcome to The Dave Ramsey Show, Molly.

Thank you so much, Dave. It's such a pleasure to speak with you. How are you? Better than I deserve. What's up? So I just wanted to get your opinion on my situation. I'm currently contributing 15% to my company's Roth 401k. Now they match 5%.

Great. So I'm getting married next September, and I'm also in the process of saving for a car and a future down payment on a home. So my fiance is in school, so he is not working at the moment. So I wanted to get your thoughts on backing down my 401k to the 5% match to save more for those three things. Yeah, it's a temporary thing. You can. i wouldn't make a habit of this every time i want something

i slow my 401k to save for it but you do it you're kind of in a you're kind of a critical mass i mean he's going to be graduating you're going to get him married you're going to be there's a lot of stuff going on and generally baby step 3b is what we call it where before you start retirement sometimes people pause their retirement or lessen their retirement in order to save for a house so that's a pretty standard thing but we add to it you got a lot of a lot of stuff going on right now and so like this is going to be the busiest freaking year of your life for a while, you know? Does he graduate before September 2? No, he graduates spring of 2020. Okay, all right.

And so your life changes a bunch then. And I wouldn't buy a home until then. Yeah, yeah, no, we wouldn't buy until probably summer or fall of 2020. Yeah, yeah, that's true. Okay. But you'll both be 100% debt-free? Yes, 100% debt-free. I've got a $10,000 emergency fund right now.

I've already got $6,000 saved for a car, $2,500 saved for a wedding. How'd you get so smart? I have $68,000 for retirement. I have a decent job. I'm in the pharmaceutical industry. There's a lot of people with a decent job got no money. That is true. Where did you learn to do all of this stuff?

Well, I've been listening to you since the beginning of this year, actually. But I had already paid off my school loans before that. I don't know. I've just been pretty good with money, naturally. I don't really know how or why. Okay, cool. Your parents teach you? My mom's good with money but now i just okay it's just your natural bent well that's good you're a rock star

yeah you're way ahead of schedule you're doing great but yeah keep it up don't you know don't fall in the ditch and don't let him pull you into the ditch uh so just you know have the plan and follow through the point is though let's fast forward five years into marriage. You're in the house, and you want to go buy a couch. No, we're not stopping the 401K. You just keep doing your 15% of your income into the 401K. You don't stop that again. Once you do, this one time to get into the house and to get this transitional time

where you've got weddings and cars and a lot of stuff going on right now, for a short period of time here. Yeah. Yeah. I would back it down and do that. Good question. Rachel's in Madison, Wisconsin. Hi, Rachel.

Welcome to the Dave Ramsey Show. Hi, Dave. Just wanted to say thank you for your ministry with finances. Well, thank you. How can I help? Yeah. Okay. So we are debt free because we met you probably nine months ago.

But my mom passed away in October, and she left us a house, and we went through the whole deal with the lawyer and ended up fixing up the house, selling it for $229,000. Wow. And my question is, we have a farm, and we owe total on it. It's a business, so I train students and stuff out of it, and it's our home, so it's $418,000 that we owe. So is there a right or wrong? I just want to know.

Is that the only debt you have? Yes. You don't owe on your personal residence, or you live on the farm? We live on the farm. You don't owe on your personal residence or you live on the farm? We live on the farm. Okay, so this is your personal residence slash business? Correct. Okay. Well, we're going to walk up the baby steps,

and let's just keep walking even with this lump sum. Any extra income, anything that comes along, we walk the baby steps. And so you have an emergency fund of three to six months of expenses. Okay. Do you of expenses. Okay. Do you? Yep. Okay. We're working on it.

So we have $14,000 right now, and we're thinking of sticking $45,000 in it. That's a little steep. Why would you have an emergency fund that big? Three to six months of your household expenses. I mean, don't you think we should have a little extra for the business? The business needs its own retained earnings. That's separate. How much would that be?

Three to six months of expenses for the business in the business account. Okay. And then three to six months of expenses in the personal account for the personal. Okay. That's a separate issue, okay? And you can do that if you want to out of this money. Then are you putting 15% of your income away for retirement? We stopped that because we were trying to build up our emergency fund.

Right. You shouldn't be there yet. That's true. Okay. So we're going to finish the emergency fund. We're going to set up 401Ks and SEP IRAs or whatever we need to set up to get 15% of our income going into retirement. That really doesn't take any of this money that you have from an inheritance. You may use a little of it to top out the two emergency funds.

And then do you have children? We do. We have three. What ages? Let's see. Sky live almost two. James is three months, and I have a nine-year-old. Okay.

And while you're sitting with your broker thinking about setting up all your retirement accounts, ask them about starting to plan for college. And you may want to use some of this money, throw maybe $10,000 per kid or something, into a 529 to get started towards college. And then I'm throwing the rest of it at paying off the debt on the house, because that's baby step six. We want to pay off your house. So we can't skip all those other steps and just dump all this money on the house

and get it paid off early? It doesn't pay off. You owe $400,000. You're only getting $200,000. Right, but if we don't do the retirement and we don't do anything else. You're not using any of this money for retirement. You're just setting up retirement to have 15 of your income going towards retirement per year so you're setting up stuff to monthly come out of your budget for that kids college

you might use 30 grand of it and you might use another 30 grand towards emergency funds but that's all the rest of it you throw at the house And then let's just load up on the house and knock it out as fast as we possibly can. I think that's going to be incredible. But if it paid it all off 100%, I might strain and do that and say, oh, let's swing back around and pick up the kids' college later. But it only pays off half of it. Right. But if we look at our finances and we think we can do it in about three to four years.

Then you can do it in about three to four years still because I didn't move the numbers that much. Okay. I spent $60,000 or so out of the money. It's not $60,000, that might be one year's worth or something, you know. So it's still three to four, it might be four to five. But still, I wouldn't be walking around without the emergency funds in place in order to pay off the house, and I wouldn't be completely abandoning the kid's college in order to pay off the house. That's why those baby steps are in that order,

is you want to follow that logical thought pattern, that logical critical thinking skills. So well done. You're doing great. But you're going to be in great shape in a short period of time. So very well done. Open phones at 888-825-5225. We thank you for joining us, America.

We're glad you are here. You can follow us on Instagram. There's a million plus of you doing that at Dave Ramsey on Instagram. That's a lot of fun over there. I'm just learning about Instagram. I've been on Twitter, the world of hate, for a while. A few of you are nice on Twitter, but it's got more trolls per capita than anything else right now.

And so on Twitter, non-troll question from Jamie. There's a million of you there almost, too. What happens to my Roth 401k when I move to a company that doesn't offer one? How should you proceed? Jamie, any time you leave a company and go to another one, you always roll your 401k from your former company into an IRA. If it's a traditional, you roll it to a traditional. If it's a Roth, you roll it to a Roth. And you pick your own mutual funds and you manage your own accounts

with your own SmartVestor Pro from that point forward. So you're going to roll it out into the four mutual funds we talk about, growth, growth and income, aggressive growth and international. Yep. And you're going to roll it into a Roth because it's already a Roth. That's going to be pretty cool. And that's what you do. Just get in touch with your SmartVestor Pro.

Click SmartVestor at DaveRamsey.com to find the people in your area. This is the Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income, and I recommend 15 or 20-year plans for most families. Stay away from cash value or return of premium plans. They're just a ripoff. Disability insurance is just as critical. How are you going to pay your bills if you're unable to work?

Disability is the leading cause of bankruptcies and foreclosures. And that's why I send you to Zander Insurance. They've been helping my listeners find the right plans at the lowest cost for almost 20 years. Call 800-356-1780 or visit zander.com and compare online. That's 800-356-1780 or zander.com. There are debt-free screams, and then there are debt-free screams. And these guys right here are amazing. Amir and Connie are with us from Atlanta, Georgia.

If you are watching the video channel and you have seen Chris Hogan's Everyday Millionaires book trailer, you've seen Connie in there. She's featured in that as one of the real Everyday Millionaires. And so this is a great story. I know a little of the story, but I can't wait to go through it. Let's do the normal thing. How much debt have you paid off? Well, I'll go over the numbers here. We have paid off $984,000.

Okay. Yeah. That's all. All right. And how long did this take? It did take us 10 years. Okay. And your range of income during that time?

The range of income started with about $165,000 and gradually kind of went up to about $300,000. And about two years ago, we started our own practice. We are the Ganad Group. And this year, we will bring in over a million dollars. Wow. You're not just everyday millionaire. You're earning a million dollars. Wow. Yes. Well, I know how you paid off the 984 now. You had the income. So your docs, your doctors? No. No.

You said you started your own practice. Well, it's basically we are a leadership development company. We guide leaders to create extraordinary cultures that deliver breakthrough results and unprecedented fulfillment. Apparently. So that's what we do. I do the easy part. I get on stage and speak and do consulting, and these guys do all the hard stuff behind the scenes.

Okay, very cool. And these guys to your right, the kiddos, I guess? That's right, Nassim and Navid. Okay. They've been with us throughout this entire journey. This is your son and daughter. That's right, our son and daughter. Connie has been the main engine behind this.

She sort of dragged me into it. I kicked and screamed and eventually became a believer. Got it. She's the main engine behind it. So, Connie, what got all this started? What got all this started was I was looking at TLC. I saw this reality show with a couple that had a large number of kids and

they had a question and answer section and someone asked them, how can you afford all these kids? And they said they were debt free. I'm going like, looked at them, they're like, they're debt free. We can be debt free. We have two kids. We can do this. So I went to see

what they did and found out what the program they used. It was very biblical, but not practical enough for me. And just one day, I was driving down the highway in Atlanta, and there you were on a billboard. And...

That can happen. Yeah. I looked you up, discovered the class. There was one happening like within a a few days that i found you out and told amir we have to do it so signed us up for fpu and it's history from there so 10 years ago you went through fpu yes yes and then you plowed through

so the 984 that's mortgages and everything, actually, very quickly we paid off the little bit of debt that we had on. It was just a little bit of student loans for these guys and a credit card. So about $16,000. But the house has been sort of the albatross. We bought this house before we met you. And then we tried to say, oh, geez, what did we get ourselves into? But we were upside down. We said, okay, you know what?

We're just going to use our house to be a blessing to other people, hold classes and all that. But we were kind of stuck with it. And on September 17th, we were able to write that check and make it all happen. Okay. Wow. Knocked it out completely. So, Connie, this is all your fault.

Yes, it is. Yes. So what do you tell people the secret to getting out of debt is? The secret to getting out of debt, I would say, is definitely being on the same page and sticking with it. It was 10 years. Yeah. You have to stick with that goal. My goal was to be right here where I am today to do this debt-free screen.

So looking at that and watching you online, thank God for YouTube now. You're being on YouTube. It was really great. It really made a difference. And the one thing that I don't know what you say on radio that you say before the debt-free screens, but you said that. You have to believe. Yeah. You said every time, you said believe that it can happen.

It does happen every day in America. That phrase always brought tears to my eyes because I believed that it could happen, and it did happen for us, and it can happen for anybody who puts these steps in order. And the weird thing is your income did not go bananas until you were dead this year yeah about the time you went debt-free and about the time you i mean you had good income i mean above way above average income obviously but

i mean it's gone nuts now i mean you're just like ching ching right yeah it's awesome but i mean it's weird that that that that isn't what did it. What did it was the perseverance. Yes, yes. And pushing through and pushing through and pushing through. And so the house is worth what? The house still has not recovered from the downturn and whatnot. So it's worth about $650,000.

And you've got like 401K money and that kind of stuff. Yes, absolutely. And that gets you up over a million dollar net worth. Yes. So in that sense, we're doing good. One thing I wanted to add, Dave, is that shortly after we went through FPU, I was managing a plant. And I found myself in a situation where our results were really terrible. And we wanted to really make a difference in terms of our results. And Connie and I basically brought FPU to

the plant because we figured the best way to actually sustainably grow our results is to help people with their finances, with their health, with relationships. I would do marriage counseling. I have no training in that at all. I was faking it totally, but it was working. And we brought FPU at 7.30 in the morning on Saturdays. We would do this. It was at that time 13 weeks. We did it four times. In fact, these guys, the first time they were exposed to it,

because we had a Dave Ramsey clause in our will, we said, okay, you guys are going to be exposed to this. So we dragged them to this course at 7.30 in the morning on Saturdays. And essentially what this did for us at the plant was it really transformed a lot of lives. And since then, we have coordinated 13 classes. We just finished one a couple of weeks ago. So I think that's the other thing that really helped us. And how old are the kids now?

They're not kids, they're adults. Yeah, 29 and 30. Okay. And they're well established in this methodology. And in fact, if I could, I just want to share something. They're also debt-free with the exception of their mortgage. There is, you know, we don't have any secrets. They've been right there with us.

But there's one thing that we've kept from them. And I'd like to... You've kept something from them? Yeah, it was a little secret. And we thought, let's just keep it to ourselves. What kind of secret are you going to... You kept something from them? Yes, it was a little secret and we thought let's just keep it to ourselves. What kind of secret are you going to do

right here on the radio? And the secret is just because they're here and they're going to scream debt free with us, we would like them to know that their mortgages are paid off.

Thank you. Unbelievable. Yes. Wow. Wow. You know, we're really clear that the best thing that we can leave to our kids is the wisdom to know how to handle their lives. You guys are changing your family tree big time. They have proven to us.

They're so much, you know, they're better people than I will ever be. And I look up to them. They're my coaches. They have their finances together and everything else in their life. So we figured, you know what, we want to get them off to a great start. They both own homes. And they own them now. They own them now. They own them now.

Touchdown, baby! That's as good as it gets right there. See, now you guys just witnessed the whole thing, listening and watching on YouTube. Went from in debt a million dollars to being millionaires to the change of the family tree, paying off their kids' mortgages right here live on the air.

Boom! That's how you do it. Yeah! Woo-hoo! All right. All four of you, all four of you count it down. You're all four doing a debt-free scream. Amir, Connie, Naveed, and Naseem.

Wow! Count it down. Let's hear a debt-free scream. That's right. Amir, Connie, Naveed, and Naseem. Wow! Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Oh, my gosh! That just happened! Wow!

Wow! Oh, no. I think we just set a record oh it's beautiful this is the dave ramsey show Well, word got out around Ramsey Solutions that that was about to happen. And there was a couple of hundred of our team members out there cheering for them. And when I went out there at the break, everybody's crying. I mean, you changed your family tree. We talk about that as a concept. You just witnessed it. Boom.

Oh, man. Absolutely amazing. Very, very cool. So you understand, if the next generation is wise and has been trained and has no mortgages at 30 years old, no debt of any kind, do you understand how many millions and millions and millions of dollars they're going to be able to build? The kind of wealth they'll be able to build, the kind of generosity that they'll be able to do that will blow your mind.

It's unbelievable. Well, if you'd like to be part of this mission, the whole Ramsey Solutions mission, giving hope to millions of people, you need to check out the opportunities to join our team. We are hiring about 200 folks in the next 12 months, and that includes an email specialist. It includes an associate creative director. It includes SEO folks, but it includes a whole bunch of other things, obviously. So we're looking for programmers like Ruby on Rails programmers. We're always looking for that.

We're looking for sales professionals, admins, everything. And we are growing like a weed over here, obviously. So just click Dave's Hiring, the Dave's Hiring tab at the right-hand side of DaveRamsey.com, and you can find out what's going on. You can be part of stuff like that right there, man. I mean, what if that was your job to work on stuff like that? That ain't a job, man. That's just fun.

Chris is with us in Dallas, Texas. Hi, Chris. Welcome to Dave Ramsey Show. Great. How are you doing today? Better than I deserve. What's up? My wife and I have four rental properties.

We have mortgages on three of them. We have about $250,000 in equity in them. So we've been talking about possibly selling off all of them, paying off our non-mortgage debt and everything besides our personal mortgage, which would also allow us to set aside our six months of expenses, start putting 20% into retirement funds, and leave another $55,000 for college funds. Just wanted to kind of get your thoughts on that. So you've got $200,000 in personal debt? No, no.

We have our non-mortgage personal debt is $200,000 in personal debt? No, no. We have our non-mortgaged personal debt is $88,000. So we have about a quarter million in equity in the property. Yeah, I know. That's what you said. After the sales fees, you know, we'd end up with about $184,000. And then you pay off $88,000, that leaves $100,000. Right. And that would leave us enough to set aside our six months of expenses, $55,000 for a college fund.

Oh, I see. Also be putting 20% in our retirement fund at that point. Okay. And, well, you still have your personal residence, though. Correct. Okay. So I would only be putting 15% away into retirement, not 20%, and maybe step four if you did all that.

What's your household income? About $130,000 a year. Okay four if you did all that. What's your household income? About $130 a year. Okay, very good, very good. Well, there's absolutely nothing wrong with your plan. It is something I would consider doing. If you absolutely love real estate, but it kind of sounds like in talking to you, you're just emotionally ready to do this. Yeah, we are.

I mean, we do love real estate, but I think we kind of went at it backwards and should have waited later maybe to get into the real estate. Well, if you've got $130,000 income and you've got your foundational pieces laid like you're talking about, then you get the mortgage paid off pretty quickly. You'll be able to save up and pay cash for some rentals on the other side of that goal, and that would be maybe Step 7 type activity. How old are you guys? 42.

Okay. All right. I think I would do that. I think I like your plan. Okay? Okay, great. Thanks for your call. Rashad is with us in St. Louis.

Hi, Rashad. How are you? I'm all right. How are you doing, Dave? Better than I deserve. What's up? First, it's an honor to speak to you. Been knowing you for a long time, but just got on the plan probably the last couple months. Cool. Cool. How can I help today? Okay, yeah, I'm in baby step number two, and I watched one of your videos online, and I saw you talking about dead debt or like debt business collections. The only active debt I have,

if I'm defining it correctly, is my car. But I have a whole bunch of little medical bills and old things that I'm not paying anything on. Right. So in baby step two, using the debt snowball, should I pay those little things off first

or should I go towards the active, put all my resources toward getting rid of the car first? What's your household income? $45,000. What do you owe on the car? I owe a little under $7,000. Good. Okay. And what do all the old bad debts add up to be, total?

The total debt, including the car 13 so around six okay all right so uh yeah let's pay off the car first because it's a small amount you're going to knock it out really fast i'm guessing that you're probably clearing all of this in one year yeah that's the plan now that you now that you've decided to attack it. And getting rid of that car payment will help you to plow through those others very, very quickly because that car payment, of course, adds to the money you've got to work with to be able to settle and clear those old bad debts. So, yeah, let's knock that car out. Let's have two debt snowballs, active and defaulted or old debts.

Then we work the actives off first, which gives you the cash flow to work the old active ones off. But in either case, you're going to be done in a year, regardless of how you choose to attack it. If you melded them together and you work off the old bad ones first, even then you'd be done in a year. It just makes it a little easier, probably, if you knock the car off because you don't have the car debt, car payment anymore, and that allows you to get there.

So, good question. Open phones at 888-825-5225. Joellen is in Cincinnati. Hi, Joellen. How are you? Hi. Thank you for taking my call. Sure.

I have a situation that I think is different than everybody else's. I don't know. We don't have any cash. We've paid our home off. Good. We don't have children that are college age. Where I am confused is baby step three and baby step four. I can no longer work, but my disability hasn't come through.

And my husband can't take a two or three job because he had some medical problems a little while back. So what are you guys eating? What are you using to eat? Where are you getting money to eat? He is working. Oh, he is working. He is working. But he can't do like two jobs. Oh, okay is working. He is working. But he can't do, like, two jobs.

Oh, okay. So what's his income? We only have, it's $50,000. Okay. Plus then your disability will come through later. Yes. Okay. Plus I just went out and retired because we needed the money.

So I have $450 a month coming in. Okay, good. We only have $70,000 in our retirement, and I'm 61. Mm-hmm. So I don't know if I should be working on baby steps three or four. The way the baby steps will work for you is your first goal is to have your emergency fund, baby step three. Okay. Okay?

Okay. And that's three to six months of expenses, your rainy day fund. And you've had a little rain around there, so you know you need one. And then once you've gotten that, then you are officially all the way through to Baby Step 7, which is just build wealth and gift. Yeah, you're 100% debt-free, and you've got your emergency fund in place, and you don't need to be saving for kids' college.

So you're at baby step seven. Now, that does mean that you're building wealth. And so what we're going to do is we're going to load up on his 401K. We're going to look at Roth IRAs, anything you can do, because you need to be saving some money for retirement. You need to be investing. And so you're going to invest very aggressively but possibly even greater than 15 of your income baby step four is 15 of your income we limit it to that

so that you can get your home paid off but your home's already paid off so there's no reason to limit it to that the more you save the more nest egg you're going to have for retirement so as soon as you get this uh nest as soon as you get this emergency fund in place, then let's plow into and say how much money can we save because we'd like to have $700,000 instead of $70,000 at retirement. And I'm just making up a number, but, I mean, let's just get after it and save as aggressively as we possibly can. Let's push that through.

And that's the direction I'd go, for sure. Hey, good question. Sounds like you've got a plan there. Let's get after it. That puts us out of the Dave Ramsey Show and the books. Our thanks to James Childs, our producer. Kelly Daniels, our associate producer and phone screener. I am Dave Ramsey, your host.

And we'll be back. Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.