The Ramsey Show - App - Your Identity Is Not in Your Car! (Hour 2)

Episode Date: July 8, 2020

Debt, Budgeting, Savings 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. My co-host on the air today, Rachel Cruz, Ramsey personality and number one bestselling author, also my daughter. Open phones at 888-825-5225. Jake is with us in Michigan to start off this hour.

Hey, Jake, how can we help you? Hey, Dave and Rachel, thanks for taking my call today. Sure, what's up? Yeah, I just had a quick question for you. A few years ago, I made some dumb butt mistakes with credit cards. And about a year ago, this was before I found you guys and your team, I had signed up with a debt relief company where they consolidated all my debt and I pay them now and then they have been settling some of the accounts.

But the issue I'm having now is my brother introduced me to you and your team and he's been all over me about getting a hold of these people because they're telling me that they're going to have the debt paid off in five years. And it seems like I might be able to do it a little bit quicker. I just don't know how to leave or how to i guess figure out i guess i'm just afraid to leave it in case i can't pay it off quicker yeah well let's understand that they're not paying the debt right now right you know that you didn't consolidate your debt you just quit paying it right that's all you've done and they're collecting a check from you and then every so often as they pile up some of those checks they use that money to settle one

of these debts that have gone bad because you're in default on all of them right you've completely trashed your credit pretty much yeah yeah that's what this did. So how many different accounts and what's the total? I want to say that there was about 12 accounts in total that I enrolled into the program and the total amount of debt was around $60,000. What is it now? Well, they've settled about, I want to say five of the accounts. And so I'm about 45. They've settled about 15,000 of it. Okay. So you owe about $45,000 on seven accounts. Right. Okay. And what's your household income? My income is about 55 a year. all right so why in the world would you take five years to pay off 45 000 yeah you know that's that and that's what i think about every day yeah now since i started listening to you i would be dead free in two years

yeah not five or sooner and especially since you're settling this, the outstanding balance is 45, and if you settle for less because they're in default, then that, of course, shortens up the time frame. So, yeah, I'm taking control of this situation back. Whatever money you paid them in fees, you've lost. But, you know, if you've got any balance over there with them, if they've got any money in your, quote, savings account, unquote, have them send that back to you and send you all the detail they can on everything and cancel the service. And then you're just going to have seven different arguments until you get seven different debts settled.

Okay. All right. They can sue you today. Right. And just because you pull it out from under this doesn't make them more likely or less likely to sue you. So then you just make a list of the smallest one, and you call them and say, you know, we owe you $7,000, and we can offer you $3,000 in cash. That's what I got saved up. If you don't want that, I'm calling the next one on the list.

Do you want to do it or not? And you get it in writing and you never give them electronic access to your checking account and you settle them one at a time and work your way down through it. This is why we call the debt settlement people and the real debt consolidation loans, debt consolidation loans. Because you're paying people to do something, the work that you can really do. And with debt consolidation, it's so hard because it feels like, again, back to that math thing, but it's just true. It's like, okay, wow, this makes sense. It feels like, okay, it's just one big debt versus all these other debts. And, again, the psychological aspect of it, people fall into so, so quickly,

and they get sold this bill of goods. Well, it feels easier, but it's really harder because it's not as efficient and takes longer. Right. And it's not really debt consolidation. It's really debt settlement. And what they do, the very first thing they do is they trash your credit by putting all your accounts into default. And they keep the first several payments into their pocket as their fee before you start building up any money over there to settle the accounts with. And so you could have just stopped paying your credit cards by yourself

if you were going to use this plan. It wouldn't have been the plan I would have used, but you can do that. Now, a real debt consolidation loan is where you get a new loan, and the balances are rolled into that new loan. And so now you do have literally one loan instead of 12. And that's consolidation. When you consolidate something, it's a bringing together. It's not a, I moved it over there and didn't pay it.

And so, folks, when people are saying, with these debt settlement companies, and you see them on the cable TV all the time, when they're saying, you know, this is debt consolidation. It's a lie. It's not debt consolidation. You're not consolidating anything. Consolidating the very definition of the word means to put together. And so don't do that. Don't do that.

Open phones at 888-825-5225. Thank you for joining us, America. Andrew is next, and he's in Colorado. Hi, Andrew. How are you? Doing well. Dave, Rachel, thanks for having me on. Sure. What's up? So I have a question about Baby Step 4. Right now, I'm a teacher and 29 years old, and I've been with my district for about five years. And we have a pension program. And in addition to that pension program, I have a 403B that I'm going to be rolling over to a Roth as soon as possible. So the pension automatically takes out about 8.75% of my paycheck. So I add on top of that another 7% into my additional 403B.

Now, I recently got an email saying that the pension percentage is going to go up to about 10%. And then I think in the future up to 12. And I did some research on Colorado and it looks like Colorado is in the top five underfunded states with my pension. So with everything going on with COVID and things like that, I'm trying to consider, okay, now that I'm going to be rolling over things into my Roth, should I increase that percentage? Because right now I'm doing 7% and should I be worried? And how much should I put in in addition to that pension in case things kind of take a turn? I don't know what happens with that. Yeah, the problem is the pension goes sideways. You get nothing, and you haven't saved anything over on the other side.

That's what you're considering. So you're exactly right. You need to beef up your investing that you control into your Roth IRA and into anything else where you have control of the investments. You are still the owner of the investments. You are still the owner of the investments. You're not the owner on a pension. And, you know, how long have you been at this job? Five years.

And these increases in pension withholding are mandatory? I think so, just with the current state of the pension program and everything. Wow, that would make me reconsider a job. If they're taking 12% of my pay and putting it into something that's weak and might fall apart, and they're increasing that, that would make me reconsider my job. This is The Dave Ramsey Show. folks i love telling you about well-made well-thought-out products today i'm talking about grip six belts i don't know about you but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable. Grip6 belts are unique. Owner BJ designed a truly modern,

minimalist belt made of high-quality materials with no holes, no flap, and no bulk. And the buckles come in really cool designs and are interchangeable. I personally own these belts in different styles, and talk about affordability I personally own these belts in different styles, and talk about affordability, Grip6 belts come with a lifetime guarantee. And that means if you no longer like or fit the style of your belt, you can replace them for free. Plus, I like the way these guys do business. Grip6 is determined to help build and modernize American manufacturing.

To learn more and get this month's Dave Ramsey special, visit GRIP6.com. That's GRIP6.com. Thank you for joining us, America. We're glad you're here. My co-host on the air today, Rachel Cruz, Ramsey personality. Open phones at 888-825-5225. Alex is in Ohio. Hi, Alex. How are you? Hey, Dave.

I am doing great. How are y'all doing? Better than I deserve. How can we help? That is awesome. Awesome to hear y'all say that. So, I'm calling because this 4th of July, my girlfriend became my fiancé. Yay!

Yeah, it was a good weekend. That's for sure. And, uh, so my question is we've, we've been working the baby steps separately, uh, for, you know, since the beginning of the year. And so, uh, we're in pretty good shape there. She's on baby step three B I'm on baby step two. And so we know that while we are engaged, we want to keep everything separate and, you know, not kind of cross any boundaries there. But I'm just curious if there's anything that we should be doing while we're engaged and before we're married to kind of get ready for that married life with money. Gosh, Alex, you guys are doing everything exactly right, which is so encouraging to hear.

How are you guys paying for the wedding? So, yeah, that's a great question. So we kind of expect that we'll probably pay out of pocket for that. So she currently has some money saved up kind of between that and a car. So, you know, she's, she's been doing a really good job saving. Um, so we would probably use a little bit of that and then cashflow anything that we need as well. Okay. Well, I always find doing a wedding budget together through the engagement and planning that as closely as possible, kind of using it as like

your mock budget, if you will, because once you guys get married, obviously you'll do one budget for the household. But I always think it's a great, it's a great experiment slash, uh, great learnings when you guys both sit down and say, okay, here's the set amount of money we have, what we're going to spend on the wedding. So let's start kind of charting that out. So I would definitely do that. I would budget the wedding together and kind of go through those motions. Um, I mean, not on the money side, but I always recommend, and I think you do too, Dave, but premarital counseling. So I would get with a good pastor, a good counselor, and you guys go through that because it's amazing. The most investment you all can make on this front end of marriage to give you the tools and the

insight into each other as you enter into marriage, the better off you're going to be. That's going to be like the best money you spend. And I think a lot of people focus so much on the wedding itself and go overboard financially with all of that. And so really thinking more of it as a day, which it is, and looking at other areas you can invest in within the engagement for you guys. Yeah. The pre-marriage counseling, there's all kinds of data points, and it's kind of common sense if you think about it. The data between pre-marriage counseling and a successful marriage is very high.

And so because it gives you the tools, number one. And number two, sometimes good pre-marriage counseling will break up a couple that didn't need to be together. We don't want that for you, Alex. I don't think that's your case, Alex, but I'm just saying that's the reason the data is there. I mean, someone who's really doing good in your face, digging deep, coaching and counseling, a good pastor, a good marriage counselor, it's worth the investment for sure. But you're doing exactly right on the money, and Rachel's right. Do your wedding budget together.

And during your pre-marriage counseling, if you wanted to do a pretend budget as if we were married, let's pretend all our bills were together, and all of our debts were together, and our income was together, and let's look at that on paper and feel some of those emotions, even though you're not really going to do that prior to marriage, but go ahead and sense that. And sometimes that's an exercise a pre-marriage counselor will take you through, and it's a good, good exercise. All right, Leonardo is with us in New Jersey. Hey, Leonardo, how are you? Hey, guys, thank you so much for taking my call. Rachel, my girlfriend, Alyssa, says hi, and you are her favorite.

Alyssa's my favorite. That's great. So my question is from a leader standpoint, how do I start effectively communicating to my West Point peers slash classmates about investing, living debt free and learning about finances so they can avoid becoming a part of the 57% of military families who experience financial hardships before we graduate? It's really difficult to answer questions for people that aren't asking them and stick your nose in other people's business.

It's just very hard. The only thing you can do is the way you live your life, and you can talk about your experience and say, this is what I'm doing. And then that can create some conversations and some questions. But just to start saying, well, the military has this problem, and 57% of the families and, you know, the number one cause of loss of security clearance in the military is financial problems, which is true, by the way. The third largest reason for dishonorable discharge is financial irresponsibility, which is true, by the way. We work with the military all the time.

It's a rampant problem just under the surface, financial problems. And so, yeah, as an officer or a potential officer, you'll have the chance to influence some of the folks in your charge, hopefully on the area of finance. And so that's how we end up teaching in the military all the time is through people like that. But in general, regardless of military or not, it's just your group of friends, your group of peers, how do you influence them? Yeah, I mean, you're exactly right. I was thinking the same thing. I'm like, obviously being a good friend, being in people's lives and when struggles come up in life, usually people turn to their friends. So if they know that you're intentional with your money, you do something that's kind of different than everyone else. When they start to have issues, you're probably going to be the one that they come to

and talk to. But yeah, forcing conversation or trying to force people to change who are not willing to change or don't want to change. Or't even asking it's kind of yeah or even that too yeah it's kind of pointless i don't answer questions for people that don't ask them not anymore but i will tell my story that's it i think that that's one of the most powerful things you can do because it it lends itself probably to interesting questions and people like oh really well that's why why did you do that how did you do that yeah and it starts that conversation. And it's not a shaming thing like you need to do what I did. It's just like this is what I'm doing. Yeah.

And man, here's what I'm experiencing. And I used to be freaked out and now I don't have any credit cards. And I and I've got money and it's so cool. It's a it's a really neat experiment I'm doing. And, you know, and so they may want to know more. They may not want to know more at that point. And that's where you are. So, hey, good question.

Thank you for joining us. Open phones at 888-825-5225. Lee is in South Carolina. Hi, Lee. Welcome to the Dave Ramsey Show. Hi, Dave and Rachel. Glad to hear you all doing better than you deserve. Absolutely.

How can we help? So my wife and I are essentially babysat six no dead fully funded six month emergency fund uh we you know 15 in the retirement now i hear you talk about beans and rice rice and beans a lot um but usually that's for the folks that are in babysat too how intense should we go into you know paint up the house to where where's that balance of living in austerity for i wouldn't know 10 years i wouldn't live in austerity baby steps one through three are scorched earth and gazelle intensity and beans and rice rice and beans and then we teach folks to let their foot off the gas at that point, meaning that some of the budget is now going to things other than debt reduction and other than

investing. Now, you know, you do want to get the house paid off. You do want to fend the kids college. You do want to retire with dignity. And so you don't want to consume all of it. But this is the point you buy a couch. This is the point you save up and buy a little better car. This is the point that you take that trip, but you're saving up and paying for it but not to the point you're not going to consume all those things to the point you do nothing so you're just being intentional but we don't recommend beans and rice rice and beans all the way through baby step six right rachel no that would be that would be a long a long few years uh doing that in addition to baby Step 2. Because there's celebration points, right? I mean, if you have no consumer debt, you have a fully funded emergency fund,

you do get to relax. You do now have options in your life. And paying off that house, again, is that next step towards building wealth and having that equity, having that in your name. Absolutely. Absolutely. Open phones this hour at 888-825-5225. This is the Dave Ramsey Show. Thank you. We'll be right back. Live in the lobby of Ramsey Solutions on the debt-free stage, Ronnie is with us from Louisville, Kentucky. Hey, Ronnie, how are you?

Hello, sir. Good to have you, man. Welcome. And all the way from Louisville to do a debt-free scream. Thank you. Thank you. I'm going to have to correct you there a little bit. I'm a Hoosier.

I live in Indiana. Oh. Southern Indiana, just 15 minutes north of louisville but oh okay cool little small town gotcha well welcome to nashville and how much have you paid off 41 000 six months awesome very good and what was your range of income during that six months? I was in the mid-60s up to 125. All right. Very good. Very cool. That's a nice jump in six months. I took a second full-time job. Two full-time jobs. Two full-time jobs, seven days a week. Oh my gosh. What kind of debt was the 41,000? It was a parent plus loan. Oh. From one of my sons. Okay. All right. so what happened six months ago that lit you on fire like this uh well in 2016 i got a divorce and um for three years i was just kind of trying to find a new normal and uh knowing that i had that parent plus loan in the back of my mind what am i how am i

going to pay this off and one night I met two traveling nurses. I'm a registered nurse by trade. And talking to them about traveling and trying to up my income. And listening to their story, I have to give a shout out to Krista and Dixie. And listening to what they were doing and how they were paying off their debt. And one of them made a comment about being better than she deserved and the other one looked at and said dave ramsey and they both stood up and high-fived each other and i was like what's going on what just happened here what are you all talking about a trouble handshake and and so they're you know you know dave ram? And I'm like, I don't know who the flip you're talking about.

I don't know who is this guy. And there's like YouTube. Just hit some YouTube videos, and they talked about their journey. One was just starting. One was in the process of cash flowing her and her husband's retirement home. And so over the next couple of weeks, I talked to them. I started watching YouTube videos. And just those little five to seven minute videos, listening to the debt-free screams, I picked up on the baby steps. And, you know, I was like, man, I think I can probably do this.

And so I jumped to April 2019. I get a cash refund, tax refund, $1,100. Oh, well, baby step one, done. And I had a car loan. And so I decided I traded cars, and with the money, paid the car loan off. And so then I was looking at, okay, I'm working on this budget. I'm not sure. Gosh, that budget is tight. I should be able to pay this off in two years with what I'm doing. And an opportunity came up to pick up this second job.

My primary job is a Monday through Friday kind of gig. And the second full-time job was to work every weekend on call 24 hours, Saturday, Sunday. Wow. And I did it i was like jumped on it like if i you know i did the math i thought man i could if i start this in june i could be done in december yeah and i started january or excuse me i started june 16th 2019 father's Father's Day. My kids gave me all kinds of crap for starting this on Father's Day. January 1st, 2020.

You were done. I was done with Baby Step 3. Or excuse me, Baby Step 2. So when COVID hit, you were in really good shape. February 2020, I was done with Baby Step 3. I quit my second job, went to my primary, and was really wanting to do FPU. I hadn't taken any classes. I did read your book, The Money Macover, but was really itching to take the class.

But I didn't really have time, seven days working, and then COVID hit. And, oh, my gosh, it was such a blessing. I mean, everybody that I worked with was in trouble. Yeah, and you weren't. You're clear. No. Way to go. I'm so proud of you.

You have worked your tail end off, man. Yeah. And how does it feel to be debt free? Well, I'm bored. I quit the job i'm done i work four days a week and i'm like you know i gotta come out here i gotta do this debt-free scream and and but it's it's wonderful it's trying to figure out i'm back to trying to figure out a normal you know what what do i do so ronnie for you what was what was the hardest part of those of those months paying off that debt? Oh, my gosh.

Walking into work. I mean, it was just every morning. I'm just such a creature of habit. I can't stand getting up and going into work. I have to work to it or work up to it. And so every morning I would listen to a podcast. Every morning was a podcast. And then walking from the car to the front door was a prayer. And then going and working.

And then, wow, the balance. The balance, just keeping track of the balance, watching the balance just keep going. I'm like, oh, my gosh, this is going to happen in December. I'm going to have this whipped in December. And so then I was like, okay, I'm going to work a little longer, and I'm going to get my emergency fund. I'm going to do that emergency fund, and then I'm going to call it quits. And the hardest thing was working to my quit day,

because that was just terrible knowing that i was coming to an end and i couldn't it couldn't come fast enough yeah wow you know all the work good for you man very very proud of you very proud of you who were your biggest cheerleaders those two nurses um well they helped uh my mom judy who's here with me today and came with me for the journey. Uh, sisters, Allison, Macy and Sally, they knew what was going on and just a very few people at work knew what I was doing. Kim and Randy, they were, they were, they were behind me all the way and just kept shoving me. Love it.

Love it. Um, it's, it's, it's, it's was horrible and wonderful at the same time. Was it worth it? Oh my gosh. Uh, it was definitely's it's was horrible and wonderful at the same time was it worth it oh my gosh uh it was definitely worth it uh especially when they said we were going to close when they started closing things i felt so bad for people yeah. But you had tons of peace yourself. I am. Yeah, you were ready. I mean, I even had extra money to put in. I had extra money to put in my 401K when all this.

I was like, I'm going to do what people say you're supposed to do, buy low. And I couldn't believe I could do that. Wow. Well, I'm proud of you brother very well done very much very well done we've got a copy of chris hogan's book for you everyday millionaires that's for sure the next stop on your journey the next chapter in your story very very very well done very well done all right it's ronnie from the land of ind. And he paid off $41,000 in six months, making $60,000 to $125,000. Count it down.

Let's hear a debt-free scream. Oh, three, two, one. I'm debt-free. Yeah. Woo-hoo-hoo-hoo. Absolutely. That's how it's done. Great place to go when you're broke.

To work. Two jobs. Two jobs. Two jobs. I love that. Two jobs. Just killed it. And for that short term, we say it all the time, but it's true.

Short term sacrifice for long term gain. And that's what it is. I mean, it's that long term peace that he's going to have, the money he's going to have, all of it for that short six months that he just busted it. Yeah. Live like no one else so that later you can live and give like no one else. Rachel Cruz, my co-host this hour here on the Dave Ramsey Show. I'm your host Dave Ramsey Thank you. Rachel Cruz Ramsey personality is my co-host today here on the air. This is the Dave Ramsey Show. Open phones at 888-825-5225.

That's 888-825-5225. Josh is with us in Indiana. Hi, Josh. Welcome to the Dave Ramsey Show. Hi, Dave. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for having me. I've been listening to you since my junior year in high school, so glad to be making the call today. Well, I'm honored to talk to you.

How old are you now? 29. Wow. You've been with us a long time. Yep. How can we help? Yep, that's right. So my wife and I have recently come into a settlement worth $190,000.

And we currently have a 15-year mortgage that's right now about $207,000. And so what my question is, I'm just wondering, would it be the best bet to throw all of that money onto the house and just focus on getting that paid off? Or since our interest rate is really low right now, would it be better to invest that money elsewhere or maybe do a combination of the two? I was just wanting to get your opinion on that. Okay. Well, you've been listening to me since you were a junior in high school, so what am I going to say?

Pay off the house. I just wanted to make sure. I mean, these rates are just crazy right now. And the question I always ask people is this, see if you've heard this before. I know you have. If your house was paid for right now, would you go borrow $200,000 on it to invest?

No, sir. Same thing. I like that. You've heard me say that before hadn't you yep that's right that's right i just wanted to i'm telling you man i just see these low interest rates i understand understand but the point is when i ask the question in reverse like that what it causes you to do is not think only with your mathematical mind it causes you to engage your heart as well your heart is where you measure risk your mind is where you do math and so it kind of there's a little bit of a it took your breath away just a little bit like i'm gonna borrow on my paid for house just for a little bit and that's that's not that's the heart doing that that's not

the head but then the head starts going, but these interest rates are really low. And the heart's arguing with the head, but the heart's where you measure risk. And so you get a complete picture when you do the measurement both ways. And sometimes a reverse engineering of that called a sunk cost analysis, doing it the other way, like if you had a paid four-house when you borrow on it, will wake you up and help you realize. So, yeah, you knew what I was going to say, and you really knew what you were going to do. You just wanted to hear someone else say it, and that way it didn't feel as crazy because some of your friends think you're crazy.

That's what I was going to say. It lowers the crazy bar when you have someone else on your team being like, nope, you're good, you're good, even though it seems like to defy everything that everyone else is probably telling you. Well, all the broke people have an opinion about money, including broke financial advisors sometimes. Yeah. You know, and they come in, you've got a million dollars, they've got $2,

but they're telling you how to do stuff, you know. And so, no, it's not as simple as the mathematical formula you lose when you don't include risk is a naive formula because you have to mathematically plug risk into this. Victor's in Texas. Hi, Victor. How are you? I'm doing good, Dave. How are you doing? Good, man. How can Rachel and I help? I just had a quick question. So I'm going to be a college senior this upcoming year, and I currently have an internship this summer. And I've been fortunate enough to have my parents pay for my college. And I recently received a scholarship for this upcoming year that's going to pay for

my full year for college and is going to give me a $22,000 stipend. Wow. And right now I have a $1,000 saved in an emergency fund. and I have some money invested in mutual funds and the Roth IRA. And I guess my question is, should I put more money to my emergency fund and increase the $1,000 or should I put more into investing in my Roth? If I were you, Victor, I would go ahead and just beef up that emergency fund because you're a senior in college here in about less than 12 months, you're going to be out in the real world. And that transition from college to the real world is a very expensive one sometimes. And having to figure out where you're going to land and what

you're going to do. So I wouldn't have money tied up in investments at this point for you. I mean, you have some already there. That's great. Leave it. But at this point, I would just pile up some money. And so after transition happens after college a year from now, you're settled somewhere, you have a full-time job, things are tracking, then that's when you can start to look to invest. You do have plenty of time to invest. I think that's one thing people, especially young people, they see the interest, the compound interest that you make when you invest early, which is tremendous. And we definitely want you to jump onto that. But you do have a lot of time to invest in your life. And so making sure you have some cash available for that transition after college is going to be really important.

Very good. That's exactly right. You are a better investment right now than a Roth IRA is. With your scholarship, your parents' help, and this pile of cash, we can ensure you graduate debt-free and you make your transition to your next job, set up your first apartment. You may want to buy a car. You've got some other stuff that you're going to do at that point when you land into that first position out of school, and it does take money to do all of that.

Jennifer's in Georgia. Hi, Jennifer. How are you? I'm good. How are you doing? Better than I deserve. What's up? So my question is, so I have some credit card debt and I have a car payment and I just sold a car, paid off the loan, and I have some cash extra and I do need to buy something else. So this is all to pay off my debt. That's why I sold the car.

So my question is, given that I have debt, I have about $24,000 in credit card debt, and I'm using a budget and I'm using the Undead It tool, I'm just looking for a suggestion of how much do I pay for a used car? Is this something that's going to get me around, that's reliable? Do I just use the money I got? You there? I think we may have lost you. Okay.

All right. She's there. She's there. Let's try again. Are you there, Jennifer? Okay. Hey, okay. can you hear me okay yeah i think we had a little technical glitch okay so okay one more time one more time you are in debt

currently i have credit i have credit card debt i have about around up to 25 000 um i had a car payment i just sold my car um i sold it for about 16 000 i paid off the loan and i have about 6700 cash from it buy a car for 5700 6700 yeah no you need a thousand dollars left over for your baby step one oh okay okay um so you think i should just use that i didn't know if i should even get something even cheaper if you want to but i think you know for a couple years you're fine well you can always sell a car cars aren't that big a deal i mean five thousand dollar cars sure aren't that big a deal so you're not going to be driving this car that long because you're going to get out of debt and then you're going to move up in car and so right you know yeah just buy a five thousand dollar car or four thousand dollar car or whatever and then let's get

in attack mode and uh that that if you're careful with what you buy and you're not trying to buy something that you worry about how it looks, but instead how it runs, you can get a lot of car for five grand. Okay. You can get a great old Camry or a great old Ford Taurus or a Cavalier or something like that. These are just little land yachts, right? Maybe an old Honda Accord, that kind of a thing. And have a mechanic check it are you single yes you got someone that can look at a car with you are you a car expert um i'm pretty good with cars i can have my dad come look at it

with me or take it to a mechanic yeah either one i mean spend 20 30 bucks and have a basic one over with a mechanic on it you don't need to spend 200 but uh just make sure that you're getting something and what we're looking for here is not sex appeal we're looking for reliability all right because this is just your get out of debt car it's not it's not right it's not it's not who you are you're not that car you're you're a better car later you're not a honda civic jennifer oh my god well this is coming from a girl that i had a really cute kind of a dream car that i just sold so yeah i have to remember that my identity is not in a car they're fun um and you can you can get i've got i've got nice cars now but i drove crap for a while to get myself out of debt, and now I drive whatever I want to drive.

And so you pay up, you live like no one else, you drive like no one else, so that later you can drive like no one else. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer. I am Dave Ramsey, your host. We'll be back. This is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Askave money questions like how do i invest my money or what is the debt snowball find out more at daveramsey.com smart speaker