The Ramsey Show - App - You Have to Decide to Be Done With Excuses (Hour 2)

Episode Date: January 1, 2020

Home Buying, Debt, Savings, Insurance Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental 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, America. We're so glad you are here. Open phones at 888-825-5225. That's 888-825-5225. Dean in Atlanta starts us off this hour.

Hey, Dean, how are you? Hey, happy New Year. Happy New Year to you, sir. How can I help? Well, so we're at the precipice of paying off the house, which is just getting me jolly and excited. Me too, man. Way to go. Well, I want to make sure before we pull the trigger on this that I'm trying to get all my details 100% correct. So here's the basics. We owe $105,000 left.

I have $75,000 in our emergency fund. I'm self-employed, and so my business account, Liquid, we have about $90,000 we can play with. So the question is, can I pull a little bit from the emergency fund to pay off that $105,000? I guess the two accounts equals about $165,000, $170,000. We pay the $105,000 out of that. I still have $60,000 left and bill back the emergency fund quickly. What is your household income? We're about $350,000, but that's gross because I have a low overhead business,

but I still got to pay my taxes, prepay, and all that. Okay. Because that's an unusually large emergency fund. That's why I was asking. Three to six months of expenses being $75,000. You got some heavy expenses. Is it your household expenses? Yeah, I think we might have overdone it.

We're debt-free. I mean, it's... Yeah. So what would it take to operate your personal emergency fund should be for your household expenses, regardless of your income. So what does it take to operate your household per month? Probably $10,000. Okay. Then an emergency fund would be $30,000 to $10,000. Okay, then an emergency fund will be $30,000 to $60,000. So we're at least $15,000 high.

Right? You see what I'm doing? Okay, and so can you justify being in the three to six months range by having only $60,000 in your emergency fund and be illiquid in the business for a short period of time until with your fabulous income you rebuild your business retained earnings somewhat in order to pay off the house can you do that yeah oh yeah because i'm uh i have seasons and i'm going into my new season now. So I have contract books solid through the year. And so how quick will you – okay, let's pretend your new emergency fund properly calculated is $60,000,

which gives us the money with the business liquidity and the extra $15,000 to pay off the house. You follow me? Yes. If you do that today, you have zero business liquidity how quick can you build some business retained earnings back up 30 days to 45 okay would probably get me 20 000 yeah let's wait 30 days and do it okay i wouldn't do it today and then the question is a lot of people say don't pay it off because of the tax write-off but i don't know much about that is that a factor to you um well no but let's walk through why uh before we do that because i don't want to forget this

it's rambling in my head for some reason um what does your wife say about this paying off the house thing? You know what? She is not as excited as I am. She's much, much more cautious. So I'm really trying to adapt to her. But she sees. So if I say wait until you have enough to have $20,000 in your business account and $60,000 in your personal account, she's going to like that answer. Correct.

Which is wait about 30 days. Okay. Now, then back to your – so pay it off in about 30 days. About the middle of the end of February, you're going to knock off the house somewhere in there. If your cash flow projections are correct, I've got a feeling they are. You're not a novice. You're making too much money to be a novice. So now back to your tax write-off thing.

Okay. A tax write-off is this. You've got $100,000 to start with. There's not much. What's your interest rate? Three and a half. Okay. So we're talking about $3,000 worth of interest in a year, give or take, $4,000.

We're going to round up. Okay. $4,000 worth of interest in a year. And, you know, you're in a 39%, 37% tax bracket this year. And so if you write off $4,000 as a tax deduction, which means you'd have to be itemizing, I suspect you are, though. Yeah. And if you write off $4,000 in a 30% tax bracket, then that saves you $1,200 on taxes.

Do you see how that works? Yes. Okay. So you're sending the mortgage company $4,000 to keep from sending the government $1,200. Gotcha. So keeping an interest payment in order for the tax deduction to be there is your only reason for keeping a mortgage is mathematically stupid. Gotcha.

You see, because you're trading four grand for $1,200. Yes. Yeah, so pay it off. Okay. All right. Good call, man. Congratulations. You are killing it. Very proud of you Good call, man. Congratulations. You are killing it.

Very proud of you. Very, very well done. All right. Vladimir is with us in San Antonio, Texas. Hey, Vladimir. How are you? How are you doing, sir? Thank you for taking my call, man.

Sure. What's up? All right. So I've been listening to you, right? And one of the topics that you talk about is dealing with debt collectors. Recently, one of them called me, and I've been currently on baby step two. I've got my $1,000 already, so I'm taking care of my debt snowball. And one of my smallest debts was for $754.

Now, spoke to the guy, negotiate, negotiate, and to the point that now I have it down. He's willing to make a deal with me for where I pay my debt for $400. Okay. So that's taken care of. But my next thing is my biggest one is $20,000. Now, if I start attacking that, just I've tried doing the math in my head, and it's not going well for me. I don't know how to go about taking care of this or where i don't go completely broke you want to say my question like i don't go

completely broken well you don't want to you don't want to get below a thousand dollars and you want to take every dollar you can squeeze out of your budget and still eat and pay your lights and drive a car and that kind of stuff but extra money we can squeeze out of the budget beyond living and living on beans and rice goes towards the debt. That doesn't cause you to go broke. Okay. So going broke, going broke, you couldn't buy groceries, right? And you buy groceries before you pay off the debt.

True. And that's what I've been doing, and I do have the EveryDollar app. Perfect. When I do calculate all that, it's saying I'm supposed to have at least $134 left. But my thing is, I'm not trying to put too little in there to get the car paid off, but I'm not trying to put too much either. So I'm trying to watch the... Yeah, well, the math should tell you what you can do. And the math will also tell you you may need to sell the car. It might tell you you need to get an extra job.

The math will talk to you. And the good news is you're having a conversation with it. Be sure you get this collector deal in writing before you give him money, sir. You're not giving money unless you have the deal in writing. This is the Dave Ramsey Show. Business leaders, right now you have the opportunity to take your business to the next level this new year. You can start by hiring the right people to help your business grow. At Ramsey Solutions, we post on LinkedIn Jobs because they are the best at matching the right person with the right job.

LinkedIn Jobs screens candidates with the skills you're looking for so you can hire smart and fast. The thing I love about LinkedIn is they look beyond just the work skills and put your job post in front of qualified candidates who match your business requirements perfectly. That's how LinkedIn makes sure your job post is seen by the people you want to hire. People with the skills, qualifications, and other interests that will help your business grow. It's no wonder a hire is made every eight seconds on LinkedIn. So this year, set your business up to succeed. Get started today and get $50 off your first job post. Visit LinkedIn.com slash Ramsey. That's LinkedIn.com slash Ramsey.

Terms and conditions apply. Christian is in Chicago. Hey, Christian, welcome to the Dave Ramsey Show. Hey, how's it going, Dave? Thanks for taking my call. Sure, what's up? Not much, so I just wanted to get your advice on something. I recently got a new job where I'm making a lot better income than I used to. And my question is, right now I'm saving up for a house.

I still live at home with my parents. And I'm also investing very heavily in the market. I just wanted to get your opinion on what do you suggest that I should lean more towards, like saving towards a house or investing in the market? Right now, I'm investing way more in the market than I am saving for a house. How old are you?

I'm 25. I think your first goal is to get out of the house. Okay. That may be my first goal goal is to get out of the house. Okay. That may be my first goal, get out of your parents' house. And then how much money are you making? Last year I made $165,000. And your hold? $25,000.

$25,000, yeah. And you have how much money? I have some basic debts. I'm sorry, I didn't mean to cut you off. No, that's okay. I have basic debts.? I have some basic debts. I'm sorry, I didn't mean to cut you off. No, that's okay. I have basic debts. I just have my vehicle debts. Other than that, I really don't have any debt.

I paid off my student loan last year. Okay. How much do you owe on your car? About $35,000. And how much do you have in savings not counting retirement? $11,000. That's what I was kind of saying towards the house. Okay.

Where I'm at so far. Okay. Well, I mean, what I would do, and you can do whatever you want to do, but if I woke up in your shoes, my son is 26, and he's one of the vice presidents of this company, and he's just got married this year. And if he walked in and gave me your exact situation here's what i would do the first thing i would tell him to do is move out and get and get

an apartment yesterday you're 25 years old you make 165 000 you don't need to live with your mother okay that's the first thing i would do it's just a dignity thing man seriously and and i would get that going and the second thing i would do I'd get this car paid off as soon as possible. And I would use some of that $11,000. You'll need some of it to move out and buy you a couch and a TV and deposit on the apartment and that kind of stuff. Get you a little one-bedroom apartment or whatever you get. I don't care. Something inexpensive.

Don't spend a bunch of money on rent. But get out. Get on your own. Get your own bills set up. Get things going. And then let's get the car paid off. Then let's build an emergency fund. You don't need to be doing any investing while you have a $35,000 car debt. Okay.

So step one is to have at least $1,000 after you're settled into your apartment. Everything else goes towards the car. Step two is we pay off all debt which is your car in your case you're going to do that very fast because you make a lot of money baby step number three then is you build an emergency fund of three to six months of expenses in your case that's probably 15 000 bucks okay okay and we build that up we We have $15,000 and zero debt, and that covers you if you have a little bump in the road, right, as you're going along. Okay. Now we're sitting in an apartment with $15,000 and no debt.

That feels pretty good, doesn't it? Yes, it does. Now we start saving for a house if you want to save for a house, or you can start your investing, one of the two. I don't care which one you do at that point. There's no rush to buy a house. You'll get around to buying one, and you probably should buy one sometime in the next five years or so. And that may be when you meet that perfect someone, or it may be when you decide I'm going to be classically single. I don't care.

But sometime in the next five years or so. I don't want you renting long, long term. And so you can start saving up your down payment at that point above your emergency fund and no more borrowing and um then you would start you could start investing i'm going to send you a copy of our book the total money makeover which will walk you through exactly what i just talked about we call those the baby steps baby step one two three four five six and, five, six, and seven. One is $1,000. Two is debt-free. Accept the house.

You don't have a house, so it's debt-free. Three is an emergency fund of three to six months of expenses. Four is when you start putting 15% of your income away for retirement. Five is kids' college. You skip that one. Six is pay off the house early. So baby step 3B between the emergency fund and the investing is where you would save for a house, and that's where a lot of people do.

All of that is outlined in the total money makeover, and I'll give you a copy as my gift. Thanks for being a new listener, sir. Open phones at 888-825-5225. Ashlyn is with us in Sacramento. Hi, Ashlyn. How are you? I'm great. How are you doing, Dave? Better than I deserve.

What's up? Okay, so I had a question. In the next, well, by Friday, I'll be getting laid off from my current job. Why? You know, they cut the, we lost the contract for the program that we have here. Oh, okay. So, yeah, I've been there for about a year. And the good news is I do have a job lined up to start actually on the following Monday.

But I wanted to know what I should do with my severance package that I'll be getting. It'll be about, well, before taxes, it's supposed to be like $8,900. I'm expecting maybe after that, a few year-round $6,000 or so, give or take. So let me get this straight. You're losing a job on Friday, and you have your new job set up for Monday.

Yes. You're a rock star. I love that. Well done. Thank you. So what are you making now, and what will you be making at the new job? So this year, 2018, I made about $36,000, you know, before taxes. And what will you make next year?

What will you make at the new job before taxes? Well, I took a small pay cut, so I'll be making around $34,000 to $35,000, depending on, you know, overtime and such like that, but at least $34,000. I got a feeling you're going to be making more because that's just kind of the person you are. Well done! So this severance package just becomes like a signing bonus. Basically, yeah. I've been really excited about it.

Yeah, ding, ding. Well, you're going to put it wherever you are on the baby steps. Where are you? I'm nowhere on the baby steps yet. I'm actually going to be... I signed up for it at my church to start on the 20th. Okay. So I don't know if I should... Well, know i can get a thousand dollars and save but i don't know if

i should just put it all in savings and sit on it right now till you get into the class you would okay you're going to get into the class and the class is going to teach you then once you have the thousand dollars to start working your debts off, smallest to largest. Do you have any debt? Yes, I do. How much? Well, calculating it, I have about, well, my own debt, I think I have about $22,000 or $25,000. My own debt? Who else's debt would you have?

Well, I have my mom's car that I'm driving and paying for monthly. She let me have it. She's letting me drive. How much is your car payment that you're paying for your mother? So originally I was putting down $200 a month for it, and then recently she wasn't able to cover the other part of it, so now I'm paying $351 a month for it. Yeah, I don't think you need a $351 car payment, do you?

I don't, but I don't really know what else I should do about it. I think we're going to take $2,000 of your severance pay and buy a car for cash, no payments, and let your mom sell her car. Okay. Talk to her about that. I'll see what she says. Well, I don't really care what she says, darling. It's not your responsibility to pay for her car. That's true.

I mean, I guess I just feel obligated because she did help me out with the car. She bought it for you? No, originally it was her car. Okay, then it's her car again. She didn't buy it for you. She wasn't helping you out. You were helping her out. You took over her payments

because she didn't want her payments anymore. Yeah, that's true. Okay, that is true. She needs to sell her car. Okay, so now you've got no car payments. That's good news. Now, how much other debt do you have? You said $25,000?

Yeah, $20,000. Well, I think it might be actually a little bit less than that, but I have about $20,000 in student loans. And then I have about a little over $800 in credit cards. And then I do have some, like, stuff in collections that I'm going to pay off as well. And I also have some back taxes, too. Cool. I'm going to pay off as well. And I'll get some back taxes too. Cool. I'm going to take care of the credit cards and the taxes probably next.

And we're certainly going to cut the credit cards up. But you can wait until after you get in the class to do all of this if you want. But it sounds to me like what we're probably going to do is set $1,000 of the Severance Society's Baby Step 1. We're going to start getting rid of your debts, which is we've got to get you a car for $2,000 and get your mom to get rid of her car so she can get out of those payments. You can get out of those payments because y'all are stuck in a mess with that car. And then start listing your debts smallest to largest, but taxes always go right at the top of your debt snowball anyway. So you're going to pay off those little credit cards, those student loans, or those taxes, and then work your way through the rest of it.

Sounds to me like. But do it all after you get in the class. I can't believe 2020 is here. If you're paying attention, you're already planning your new budget. For most of you, your mortgage is your single biggest line item. Lowering that payment could have a dramatic effect. My friends at Churchill Mortgage want you to save big. So if you get a free Churchill checkup this month, and it makes sense to refinance,

you'll get an extra $200 off your closing costs. It's a no-brainer for all my listeners who have a mortgage payment, and it doesn't matter which mortgage company you've used in the past. Go to churchillmortgage.com forward slash checkup to activate your $200 discount this month, or call 888-LOAN-200 and reference promo code CHECKUP for $200 off. This is a paid advertisement. NMLS ID 1591. NMLS ConsumerAccess.org.

Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. For a limited time only, this offer is applicable to closing costs and is not combinable with other offers. In the lobby of Ramsey Solutions, Jonathan and Whitley are with us. Hey, guys, how are you? All good. Very good. Awesome. I love us hey guys how are you all good very good awesome i love your shirts where are you guys from dubuque iowa cool now talk about your shirts what's on

them i have uh live like no one else on mine there we go and i have no ish hashtag baby step two ah no dave ish no financial peace ish no baby step ish we're doing it i like you guys so you're here to do your debt-free scream yep very cool how much you paid off paid off eighty seven thousand three hundred and forty one dollars and thirty seven cents and how long did this take 23 months whoa and your range of income during that time we started around sixty thousand and ended just right around a100,000. Okay, you hardly made $87,000 in the 20s. You must have sold stuff. What did you sell big? Well, actually, we really didn't sell very much that was big, but the income jump was a little earlier

in our debt-free journey. Oh, so the $100,000 was the majority of it. Okay. Yep. Okay, very good. What do you all do for a living? I'm an industrial maintenance technician and also in the Iowa National Guard. Okay. And I'm an executive assistant. Very good. And what kind of debt was the $87,000? We had student loans, credit cards, personal loan, and actually we also

paid off our mortgage. Whoa! Your house and everything! Yep. I'm looking at weird people. Wow! Look at you guys! Well done. Very cool. How old are you two? 28. Woo-hoo-hoo-hoo-hoo.

And you have a paid-for house. Yes. In Iowa. And how much is this house worth? West appraised it was at $190. Ha-ha-ha-ha-ha. Amazing. You guys are on fire.

Wow, you're going to be so rich. Well done. What in the world? How long have you all been married? This will be five years. Okay. And so two years of the five has been game on. Yes.

Tell me what happened that caused this. This is amazing. Well, she's actually been pushing for me to read the Total Money Makeover and get my finances in order since we met. And I was straight up told that I'm not going to read the book, so she actually called into the show, and you explained to her how she needs a man, not just a boy. And thanks to you, I got the audio version, so I listened to that.

I was kind of on board with it. So did that piss you off when you heard I said that? No, it just made me upset. It had to. It made myself upset with myself, obviously. I needed to fix something. All right. And then, so then I was kind of on board, but we, I went on another training exercise

and I used to balance my budget off of how much was in my account. Yeah. And I saw I had money in there, so I spent like $200. And at the same time, my wife had to buy food and diapers back at home. Oh. So. Wasn't good. So I come back home and she says, we're doing this. Like she's like on fire and she ends

up making a little chain for me to kind of like to show progress on what we're doing. And I couldn't even get her to finish it because at the end of it, I'm asking her how much each link is worth. And I started out a dollar said 10 50 no it was a hundred dollars so every time i heard a staple click making this chain it was and it's up there right now i just could finally i'm a very visual person so i could actually feel the debt that i was carrying and that's what got me on board wow very cool cool. Look at you guys. I'm so proud of y'all. Well done. I mean, you did the whole thing. Amazing. So, all right, Whitney.

Whitney, you called in here, and I told you to sit down with him and tell him he needed to man up and walk with you. How did that conversation sound when it actually happened? This is great. I didn't actually say that because I wanted to be allowed in the house afterwards. So I just let him listen to you say it to him. Oh, okay, good. So I played that section of the podcast and then gave him the audio book.

And luckily he had a 45-minute drive to work, so he listened to it in like three days. And he was still kind of a little-ish. But then my parents had gifted us a trip to the Wisconsin Dells for Christmas, so we took a ride up there, and for the three hours in the car, I had him listening to debt-free screams in the podcast. So that also then helped, and he finally came back,

and he goes, okay, all right. So then he was actually willing to sit and do a budget. But the thing about Jonathan is, when he does something, he doesn't do it halfway. No. He's wide open. He's never done ish anything. And so doing this ish was not an option, right? No.

No. Yeah. Once you were on, you were a man on a mission. Yeah. And you paid off your freaking house at 28 years old! How awesome are y'all? I'm so proud of you! Woohoo! This is so cool! And you guys watching on YouTube are seeing their brick house, man. It's a good looking house, man. This is so cool and you guys watching on youtube are seeing their brick house man it's

a good looking house man this is so cool so how does it feel oh it's fantastic and it was um i actually asked him about making t-shirts and stuff like that as a side hustle so i finally got him to agree i said i'll keep track of everything i'm spending and not quit until I at least make our money back. And I opened Midwest Mother's Designs on Etsy and started making T-shirts. And then I asked him, I said, well, can we do Financial Peace University? And he goes, well, okay, but the money has to come out of your side hustle money. And I'm like, okay, yep, that's fine. Well, then the next day I'm sitting at my desk at work and and I hear bing, bing, bing on my phone,

and we got $10,000 worth of orders in three days. So I told him, I said, well, we have the money for FPU now. I think so. Yeah. Wow. Just like that. Amazing. Very cool.

Very cool. So how does it feel, Jonathan? You don't have any payments. I mean, you're a man on a mission. It feels very – the whole freedom, I can feel the weight lifted off of me. Yeah. And it feels great. Very good.

You guys are – you're an incredible couple. This is very fun. All right, so what do you guys tell people the key to getting out of debt is? You're 28 years old. You're housing everything. $87,000 paid in 23 months. You're just rock stars, your house and everything, $87,000 paid in 23 months. You're just rock stars.

What's the key? I'd say consistency and discipline. I would say, well, a couple of things. You have to be on the same page because otherwise it's like treading water. You just can't make any progress. And then not making an excuse for yourself because we could have had any excuse that we wanted. We both had kids when we were younger. We have four of them at home right now.

We're millennials. Whatever excuse we wanted to pick up, and as soon as you decide, nope, I'm done with excuses, I don't want any more, that's when you'll actually make progress. Wow. Look at you guys. Absolutely rock star millennials. Very well done. Very, very well done. Well, who was your biggest cheerleader outside of the house? I think her

parents were probably the biggest supporter because they actually held us accountable also. Okay. Wow. That's good. I had a group of ladies at work too that, that every time I'd go up on Valentine's Day when everybody else is getting flowers, and I'm like, and we paid off a student loan. And they're going, ooh, that's romantic, I guess. So a few of them that understood, and either that or they were very much humoring me. Either way, but still good support. That's cool. That's cool.

Yeah, if you miss a set of flowers at valentine's day but you're 28 and you have a paid for house that that'll work for me i can work for that i can handle that because your future is so bright it's unbelievable number one you've learned that the two of you working together can do almost anything there's nothing that is out of your reach i mean you make 100 a year between you and and you're 28. Wow. I love this. And then number two, of course, the math on the ability to build wealth now is absolutely incredible. Yeah, you'll be everyday millionaires before we blink, sitting on a $300,000 paid-for house. Way to go. We got a copy of Chris's book for you, Everyday Millionaires, because you will

be that very soon. You've done all the right stuff and then some. Wow. Very impressive. All right. Jonathan and Whitley from Iowa. $87,000 paid off in 23 months, including their house at 28 years old. I love it. Touchdown, baby.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Woo-hoo! I love it! I love it! Man, oh, man, oh, man.

Absolutely fabulous. And the shirt says, no ish. That's it. Gotta love it. This is the Dave Ramsey Show. We'll see you next time. Thank you. Micah is with us in Indiana. Hey, Micah, welcome to the Dave Ramsey Show. Hey, Dave, thanks for taking my call. Sure, what's up? Hey, I've got a question on, I mean, I know your policy on life insurance, you know,

10 times your annual income. Because of past medical issues and medical history, the only term insurance I can get approved for is pretty expensive per month. The quote I got was for $750 for 20 years, it was going to be about $192 a month. Is that from Zander? No, it's not. I called Zander about six, eight months ago and was talking to the guy on the phone, and some of the information I gave him, he said that they probably wouldn't be able to get coverage for me.

Okay. All right. Cool. So I went through my local guy. Yeah, you've had some pretty serious medical background there. All right. So what's the rest of your financial situation? In pretty good shape, really.

The only debt I have left is $28,000 in a car, and that should take care of me. Okay. Are you single? No, I'm married. How many kids? Got two. What age? One's 16.

One's getting ready to turn nine. Okay. All right. And your household income? About $168. And how much of that is you? $120. About $120.

Okay. All right. So she makes like $50 a year? Yeah, about $40. Between $40 and $50. Okay. All right. So she makes like $50 a year? Yeah, about $40, between $40 and $50, yeah. Okay. All right. Cool. Yep.

All right. Well, the whole idea is for your wife and children to be able to survive if something happens to you, obviously. Right? Mm-hmm. And $192 a month, that would be something I could not choke down for $750. Okay? Right. The thing I would want to learn is two things.

The first thing I'd want, how much do you owe on your home? Probably around $118. Okay. All right. Yeah. And how quickly will this car be paid off? I'm hoping in the next six to eight months or less. Okay, that makes sense. All right.

So at this time next year, you and I are talking, you have a fully funded emergency fund, and you are 100% debt-free except your home. And your wife makes $50,000 a year, and you would have a 17-year-old and a 10-year-old at this time next year. Okay? Correct. All right. So, you know, I might buy even less of that $750,000.

I might buy like $300,300 of it, something like that. And I want you to price mortgage life insurance from your mortgage company. The only thing it does is pay off the mortgage. That's another $100, in other words. And so if your wife was debt-free and had $300,000, house and everything debt-free, because we had mortgage life insurance and had $300,000, house and everything debt-free because we had mortgage life insurance, and had $300,000. That's not ideal, but she can make it. Sure. No payments anywhere, and one child just going into college,

and, you know, one 12, 13 years old or whatever. So I might buy like a 10-year. How long was that policy that that guy quoted you at 192? That was 20 years at 750. And I've actually got the breakdown here, Dave, from the same company. So if you want to talk, and they did 250, 500, and 750. Ten years of 250 would be $50 a month. Let's do that.

That's doable. Yeah. And right now, I've just got me and my wife. We were married in 2000. So, you know, we've got, of course, the whole life insurance policies. We didn't know any better. They were $50,000 policies apiece, and I think the cash value of them is worth about $1,900 apiece. Yeah, I would hold those because you're not insurable.

I'd hold yours. I wouldn't hold hers, but I'd hold yours and dump hers. Even if I can get this other in place, you want me to hold that? Well, maybe not. Maybe not. No, I'd probably rather you buy $300 than $250 and dump the whole life. Yeah, that's a good point. Let's do that.

And I'm doing the $300 with you getting mortgage life, and the mortgage life is cheaper. Because I think it's going to be. Okay. Price it. Call your mortgage company and say, do you sell life insurance that pays off the mortgage? Just call the customer service, and they'll probably sell it to you right there on the phone, and it's probably cheaper per $100,000 than what you're getting quoted. If it's not, just buy another $100,000 of that, and let's do $400,000.

Okay. Because you can afford it. It's just a matter of what the value is. Now, with your medical condition, you know, like if you have a cancer diagnosis and then you're cancer-free, the number of years you're cancer-free makes you first insurable and then makes you even insurable at better rates. So is there a distance or is this a chronic condition? In other words, are you going to be more insurable five years from now?

Yes, yes. This wasn't cancer, Dave. This was some stuff in my history with some alcohol. Okay. Yeah, that'll get you. It's what I'm being told. If you stay sober, then, you keep your sobriety in place, and you get five years under your belt,

that's going to be a whole different world. Right. And in five years, I'm looking to be well enough along, we shouldn't need a whole lot more insurance. Exactly. But you might be able to buy the exact same amount for half what you're paying five years from now. Correct. On my wife, we were looking to dump the whole life and get her some sort of term.

They did that in-house. I want to ask you on it real quick. It was $100,000 face amount. It's going to figure out for her to $21 a month. She is a smoker, so he said that this is a renewable term every year.

And you don't want to do that? No, you don't do annual renewal term. It's not going to be the cheapest. You can go back to Zander on hers. You'll get a better deal there. That's what I'll do. Yeah, you'll get a better deal there. You want to go ahead and just go ahead and get a 15-year level fixed on her. Y'all don't need 20s because the kids are old enough. They're going to be grown and gone.

Right. The point is, when are you going to have enough money, be debt-free, and the kids are gone? Those are your three variables to becoming self-insured. And you're going to have this house paid for making $168, cars going to to be paid for the kids are going to be grown and gone in 10 years really i mean but so i wouldn't do more than a 15 on these um that'll give you plenty of time on both of them and um you know that's the i i think you're thinking perfectly on this i completely agree with you so i i would drop her whole life. I'd run to Zander for hers. I'd pick up either $300 or $400, depending on how it compares out with the mortgage life on you as a 10-year.

I would reconsider all of this in five years and look and see where you are, how much you need. But you're considerably underinsured. But given your situation and what it costs, that's what I personally would do if I were in your shoes. I think you're – what we want to make sure of is your wife and kids are okay. And they're going to be okay. They're not going to be like swimming in money, but they're going to be okay with what we're outlining here because they'd be 100% debt-free.

She makes $50,000 a year. She's got a couple teenagers and um and she's got 300 grand in her pocket i she'd be okay she can make it on that it's not ideal but it's it's pretty good so good question thank you for calling in i appreciate getting to walk with you on this open phones at 888-825-5225. Check with Zander Insurance. If you're thinking after that call, I need to get a quote, it's quick, it's easy. It takes about 13 seconds, and you will get a full rundown. And some of the quote services you have to be aware of online,

they take your name and sell it, and you'll get emails from 43 different people to give you quotes, and it will drive you bananas. Zander doesn't do any of that they've got the whole engine built right there on their software to do the search and so they'll just turn the search out and it'll pop up there the different companies and what they charge that zander can sell for you in your situation and again we recommend 10 to 12 times your income on 15 or 20 year level term because that's about how long it takes to be 100 debt-free kids are grown and gone and we got a pile of money in our mutual funds

we're everyday millionaires this is the dave ramsey show this is james childs producer of the dave ramsey show did you know you can now listen to the dave ramsey show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.