The Ramsey Show - App - Your Road Map to Building Wealth (Hour 3)

Episode Date: July 9, 2018

The show about you

🎵 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. You jump in, we'll talk about your life and your money. We're here for you. The phone number is 888-825-5225. That's 888-825-5225. John's with us in Salt Lake City to start off this hour. Hey, John, how are you? Great, Dave. How are you?

Better than I deserve. What's up? So about five years ago, I started a full commission sales job. And at the beginning, it was pretty rough. There were a few $100 paychecks here and there. Fortunately, I was single at the time. But as things started to build up and things started getting better, I got some good paychecks, and I decided to take advantage of my company's holding account, where they would save some and pay me more on the next check if I asked them to.

And over the last five years, it's kind of gotten out of hand. I've been very blessed and fortunate, and that holding account's now up to about $125,000. I'm just seeing, should I take that all out at once? I want to get that down. I just don't know if I should do that over time. I've been, we just have $50,000 left on the house. Everything else is paid off. That's good.

Okay. Well, I'd definitely pay off the house tomorrow, wouldn't you? I have enough in savings I could do that as well. Yeah, good for you. You've done very well. Congratulations. I would become my own holding account. Okay.

All they're doing is holding money for you out of your check. Obviously, you are good at handling money. You've had a level of discipline. You've had a level of control because of the other things you told me. And so why not just take your whole check and set some of it back? We used to, when I was in the real estate business, we had a dumb name for it. Holding accounts is so much more sophisticated. We called it the hill and valley account.

When we were up on the hill and things were good, we put some aside for the valleys. And we kept a separate account just to cover because I was in the real estate business. And some months I made zero. Some months I made 20 grand, you know. And so it was it was feast or famine and so we set money back it wasn't the emergency fund it was separate from that and this was just the hill and valley account and again that's a holding account it's a much more sophisticated name we didn't come up with a good name but that's all it is

you could do this for yourself and of course earn interest on it while it's sitting there and you know what i would look at is realistically what is the volatility that actually needs to be covered in your income obviously you're over holding right i think we can all agree on that so what even if you were doing it on your own behalf you wouldn't set as much back as you've been setting back because the average of your income has been much, much higher than the holding. So what is your worst month in the coming 12 months, realistically? December I made a grand, $1,000, but January I made $30,000.

Okay. What's your household income? What's your income in a year? Over the last four years it's probably averaged about $250,000. What's your household income? What's your income in a year? Over the last four years, it's probably averaged about $250,000. Way to go. Good for you. Well done. Good, good, good.

Okay, so it goes all the way down to a grand. So it is very volatile then. Correct. I mean, yeah, it's definitely been, fortunately, more hills than valleys. But I think I'm super averse to risk. I'm just worried. Like, I never know. I'm in tech sales. If the economy goes bad, I don't know. But I think I'm super averse to risk. I'm just worried, like, I never know. I'm in tech sales.

If the economy goes bad, I don't know. Well, that's the emergency fund. That's different than the holding account. And so I would have an emergency fund on the six-month side of the three to six months of savings, of expenses, three to six months of expenses. I'd go on the six-month side because your income is so volatile. But in addition to that, I'd create my own holding account, and I would stop doing it with the company and just set some aside. Just look at the formula you've been using. Dial that back a little because it's too aggressive.

Thus, you've got all this surplus. We know it's too aggressive because that's where the surplus came from. And so you just take it all out on the very next paycheck? Yeah, yeah, I'll take it home. It's your money. Are they paying you interest on it? Nope. You have $120,000 of zero interest?

Yes, I would take that out tomorrow. Yeah, yeah, and just set up... I mean, even if you put it in a 1.5% money market, right, that's attached, you know, you can have web access to it and move it into your savings account, I mean, into your checking account whenever you need to, right? And just set yourself up a little spreadsheet and do your own holding account with the exact same formula we were using before, but a little less aggressive because we know that you've been too aggressive, thus you have $120,000.

Yes, I would take it all out immediately, up out of my house immediately, and then I would set my own holding account up to cover the volatility in your income really cool question good for you man you're doing great nick's weathers in seattle hi nick how are you hi dave i'm doing great thanks so much for taking my call sure what's up so i'm a young guy i'm 23 and i've been living your platform for most of my life, and I'm trying to get into buying a house with a no-credit check. But the problem is I've lived, I think, a little too debt-free. There's no such thing. You have zero credit score. I have zero credit score.

I have lived with my parents up until the last couple of months. Okay, now that can be a problem. You don't have a track record of paying a landlord. You usually have to pay your landlord earlier on time for two years, have a strong down payment, and be steady on your job for two years. And then with no credit score, you can get the same mortgage you could get with a credit score. Right. And so I'm just wondering what should be my step.

I've got a good solid down payment saved up, and so I just need to know. I don't necessarily think I have the time to wait, you know, six to 24 months with paying rent. Why? Because I'm getting married in a couple of months, and we'll be having a baby, and rent is really expensive in my area here. Rent's not as expensive as home ownership. That's true, but rent is extremely high in the Seattle market, and I'm worried about losing too much of the down payment

and then not having enough to be aggressive. If you have to use the down payment to pay the rent, then you can't afford to buy a house because you can't pay the payment. If you can't pay a rent payment, you can't pay a house payment, dude. Baby's on the way? No. Oh. Okay. Well i well okay i'm sorry i could pay the rent uh i just yeah that's the only thing i'm very frugal and it it uh it just i'm very you know afraid of not afraid but concerned of wasting the money in my mind it's not it's it is a waste if you live a life of doing this for a decade i'm suggesting patience the first thing you need to do is get married

set up your house spend a year getting to know each other you'll make a much wiser decision buying a house after you've been married a year it takes a year of being married to know how close to your mother-in-law to buy that was a joke dude okay you got to get to know each other you got to hang some curtain rods together man i mean it's just what you'll cause a divorce in some households so you know you just you just have to work through some stuff and you're better off to just take your time when you're 30 you're going to be glad you were patient not five years of rent but one be glad you were patient. Not five years of rent, but one year. And you've already paid a little bit of rent. Now it sounds like get with Churchill Mortgage,

and they'll lay out for you exactly what you've got to do to qualify for a mortgage with no credit score. Don't go get into debt, and don't go buy a house right now. Just take your time. Get married, be married a year, then go buy a house. This is the Dave Ramsey Show. There are few things in this world that irritate me more than when people pay too much for their mortgage. So many of you are paying way too much, and you don't even know it. I've got my good friend Mike Hardwick with Churchill Mortgage here. Mike, how do you help

these folks? It's unbelievable, Dave, how much people can save if they just make a simple call. We've helped thousands of your listeners save hundreds each month or take years off their loan, helping them to save thousands of dollars in interest over time. Folks, do yourself a favor. Make a quick call to Churchill Mortgage today. I'm telling you, if you're paying a mortgage, you're potentially throwing money away that could be piling up in your savings account. It's true, Dave. With the rates the way they are right now, if you're making any mortgage payment these

days, you're probably paying too much. Call Churchill Mortgage, guys. It's well worth a few minutes of your time. This is a paid advertisement. NMLS ID 1591. Equal housing lender 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Hope you had a great 4th of July weekend. Weird with the 4th falling in the middle of the week, how everything gets thrown off. I mean, it's already, what, the 10th or something? What is today?

The 9th already. But it's not too late to do your budget, even though you didn't have it done at the first of the month. If you've never done a budget before, even if you're a little bit late, here's what I want you to do. Number one, you need to understand the number one key to getting out of debt, the number one key to building wealth is getting on a budget. You can't go somewhere when you don't know where you're going or how you're going to get there.

Your budget's your roadmap. It's your travel plan. It's your GPS directions. Only you program it. That's all your budget is. So if you've never done a budget before, go to everydollar.com and sign up for a free account. It's real easy to do.

You can actually build your first budget in about 10 minutes. You can find it on the App Store for your Android or for your iPhone. You put in your income, your expected expenses, boom, you're going to have a game plan. And if you want to track your spending even faster, try EveryDollarPlus. That connects to your bank. And then all your expenses show right up on the app. And you just grab it with your finger drag that restaurant charge over into the restaurant budget category boom got it done

it takes about 10 minutes five million people are using every dollar it's the most robust elegant budget tool out there it's the best budget tool in the world right now. Every dollar. Everydollar.com. Ryan's in Fargo, North Dakota. Hi, Ryan. How are you? Good, sir. How are you? Better than I deserve.

What's up? Hey, so I'm just curious what I should be doing with my money. I have a little under $30,000 in my savings. I'm 22, by the way. Between my three 401Ks, I have right around $25,000, and I make a little under $50,000 a year. And I'm just curious what should I be doing? What are my steps going forward? Where did that money come from?

What money? Which one? Well one well i mean you're you're 22 years old you make fifty thousand dollars a year how'd you end up with twenty thousand bucks in your 401k and twenty thousand bucks in your savings uh is it too little or too much i'm confused it's great it's wonderful i just those numbers don't i mean did you inherit some money did have some money? Do you live at home and have no expenses? No, no, I rent. I don't know. I guess I just save.

I was very fortunate. I'm in the service, and so I got a good-paying job pretty much right out of high school with the military. Oh, okay. Okay, so you've been working in the military since high school. Okay, that makes a little more sense. That's four years to do this. Okay, okay. So you've been working in the military since high school. Okay, that makes a little more sense. That's four years to do this. Okay, good. Good for you.

Okay. And your question then is what again? What are my steps going forward? Like obviously getting a house. I don't have any debt, so I'm curious. Was there a certain way to be investing money or using my money better or i think you're doing a really really good job overall okay i think you've done a fabulous job for 22 years old most guys your age that have spent four years in the military don't have nothing and

you know that because they just spend it all and so you've done a good job managing your money whatever you're doing do more of that That's why I was asking you. But we teach a financial planning process that's very popular because it's very clear, and it's called the baby steps. Baby step one is to save $1,000. You've done that. Two is to be debt-free. You've done that. Accept your home.

Baby step three is to have a fully funded emergency fund, which is three to six months of expenses set aside for rainy days, not to be touched for anything except major emergencies. And you make $50,000. So of your $20-something thousand that's in savings, probably set aside about $15,000 of that over in a separate money market account, never to be touched. It's just there if you have a major life problem, like a layoff, a transmission that goes out,

some big expense that there's no way you could see coming. Okay? It's not saving up to buy something. It's just sitting there to protect you when life happens. It's your contingency fund, your God-only-knows fund, okay? Now, that leaves us $7,000 there, plus you're doing money in your 401K. Then we move on to baby steps four, five, and six. Step four is put 15% of your income into retirement plans.

You need to start doing that immediately. And baby step five is save for your kid's college. It sounds like you're not married and don't have kids. No, not that I know of. Okay. And so, you know, you don't have kids, you're not married, you don't have to do baby step five, kid's college. Baby step six is pay off the house earlier.

Well, you haven't bought the house yet. So what I would do is I would start saving 15% of your income into retirement. If you want to use the thrift plan, that's fine. I'd put 80% in the C and 10% in the I and 10% in the S. And if you're going to do that, if you're not, just do Roth IRAs. Either one is fine. But do the Roth version of the thrift plan, the TSP. But above, don't put more than 15%.

That's the maximum. Above that, start saving for your down payment on your house. And you've already got $7,000. You said you had $22,000 in savings, right? It's a little under $30,000. Okay, a little under $30,000. Okay, we put $15,000 aside for your emergency fund in my example that I'm doing with you, okay? And that leaves whatever the balance is in that account as a head start on your down payment for the house.

So I'd start putting 15% of your income aside in your budget, start doing a written budget every month, use that EveryDollar app I was just talking about before I picked up with you, and start your 15% towards retirement. You've already been doing something because you've got money in a 401K, but just look at your income. You need about $7,500 a year. That's 15% of $50,000 going into retirement. And then above that, any money we can squeeze out of the budget,

we just add to that other account, that house down payment account, and finish saving up for a house. And put as much down as you can put down, and then pay the house off as fast as you can. Lean into it and get it done. Good question, man. Thank you for joining us. Open phones at 888-825-5225. Michael is in Minneapolis.

Hey, Michael, welcome to the Dave Ramsey Show. Hey, how's it going, Mr. Ramsey? Better than I deserve, sir. How can I help? So I am 22 and I'm going into my last year of college and I'm studying to become a dietitian. And at this point, I've accumulated about $30,000 of debt. And so basically my question is, is my dream job is to be, uh, to be a freelance dietitian and consult people online. And I want to know if you think it's a good idea for me to go for that as soon as I graduate, because I'm really motivated to go for it right away.

Or if you think it's a better idea to, um, wait it out, get some experience in the field and also pay off that debt first and then go for the business goal. Well, here's the thing. How quick can you make money? That, I guess, well, that's the main thing that I'm afraid of is not having any income because I'll also be getting married next summer as well. Ah, okay. And has she got a job?

Yep, she's been graduated for a year. Okay. What does she make a year? She makes about $40,000 and is already going to get a promotion here within the next half year. Okay. What would happen if you took a job and started working your online business as your side hustle? And see, that was the other thing that I was thinking. The only thing that I think is going to come up is non-compete rules

and the contracts that I might find, because what my business is will be the same exact thing that I'd be working as an employee. Maybe. And so. If you're doing dietitian work, maybe. If you're doing dietitian online for individuals direct to consumer, and you're a corporate dietitian for a corporate setting, there's no conflict at all. You think so?

Positive. As long as you're not saying, if your employer is selling direct to the consumer, and you're selling direct to the consumer, then there might be. But it might be that they don't give a rip about your little side hustle. They're probably not intimidated by it. But, yeah, you've got to investigate that with the job you take. You have to be ethical and abide by contracts and abide by the ethics. You don't want to steal your own employer's business.

That's not cool at all. But, you know, it would dictate what type of job you take. But I would take one that allows me to do the side hustle. Let's get the side hustle going and then let it become the full-time gig once it builds up some momentum and some money. This is the Dave Ramsey Show. The Equifax breach is being called the worst data breach in history, compromising the information of nearly half of the U.S. population and creating panic for many of those affected. It's important to remember being part of a breach doesn't make you a victim of ID theft,

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Get a quick, easy quote at Zander.com or call 800-356-4282. It's really not a question of if it will happen anymore, but when. That's Zander.com or 800-356-4282. Joe is with us in Oklahoma City. Hey, Joe, how are you? I'm good. How are you, Dave? Better than I deserve. What's up? Well, hey, I just wanted to get your thoughts or advice on some things. I've been very blessed.

Been debt-free for about six months now. Fully paid off home and everything. Wow, good for you, dude. I'm going to be getting married next year. Yay. And so I own my house clear and free, and she will be totally debt-free by that point in time, but she will still have her mortgage on her house.

So we have been thinking about getting into the rental market. And so the plan is once we get married, she would move in with me. What do you think we should do with her house? Should we go ahead and look at trying to rent that out? That's fine. And then turn around and get paid off as quick as you can. What is owed on it? About $125,000.

Okay. Is it a good rental? It would be in a good rental spot, yes. Okay. So if you didn't own it, you might buy it as a rental. Yeah. I've always thought about maybe trading out of it and trying to get into something a little bit better as a better deal. But I kind of figured since we are trying to see if we would like the rental market or not

or if that's something we actually want to do, that this would be a good. No, it would be a good way to test it. If you don't like it, you might not even have it paid off by the time you learn that you don't like renting, and then you would move those renters out and sell it, right? And that wouldn't be a problem at all. So, yeah, I think it's great to do that. But what's your household income going to be, the two of you combined? It's going to be about $250,000.

Oh, so you could pay this thing off very quickly. Yeah. And that's what I would do. Okay. And whether you keep it or not, if you pay it off, you can sell it, right? Yep. So let's go ahead and get it paid off as fast as you can and have that as our joint agreement, and we're going to put a renter in there.

Don't toy around with the debt and wait on it to happen or something. Just knock it out. You've done a wonderful job, you know, completely cleaning up everything and being debt-free, and very well done, very well done. Yeah, pay it off as fast as you can. That's what I would do. And then that sets you up to buy another one and another one and another one. And if you make $250,000 a year and you have one paid-for rental at $120,000

and you don't have a house payment at all, you can buy another rental house every so often. And, you know, every time you buy another one and then you got that rental income, that snowballs the other direction, right? And you snowball into these rental properties. And when you own five, the next one's easier than when you own one and so on. And that's what Sharon and I have done. You know, we just bought more property.

And every time we bought more property, the rents from those help you buy the next one for cash even faster. And so it's a very cool effect. It's kind of the living like no one else side of the coin. Joey is in San Bernardino. Hey, Joey, how are you? Good, good. How are you? Better than I deserve.

What's up? Okay, so first off, you've been in my brain next to Jesus for like 10 years, okay? I've been avoiding you at all costs because I just always thought that you were like, not for having fun, but truly I was too young to understand and realize. Um, I took your class about four times, dropped out three other times and finally finished it years ago. Um, I still never, never did anything with it. Um, finally I just had a realization the other day and I am really on track and I think I'm going to be on track. And so I had to just call because I finished total money makeover. And, and I know that you said, if you're in back taxes, make sure you tackle those first.

So, I mean, cause I have, I have student loans. Um, and I don't know about the other things that I'm behind on because it's been like like i honestly have never made payments in like 10 years on those how old are you i'm 31 okay and how long have you been working how long you been out of school uh since 2012 and what do you make uh last year i made 98 000 but i didn't pay any taxes either. So. So you own your own business? Yeah. I do a lot of different things.

A lot of different things. I mean, how'd you make 98,000? Um, I'm a, I'm a first, I'm a, uh, a respiratory therapist for home care two days a week. And then I'm a professional photographer. I shoot weddings on the weekends and also a videographer and i have a photo booth company okay all right okay how can i help you um so uh i i have like 3 000 left on our on our prius and i can pay it all off next month and then we have about 6 000,000 left on our Honda, and I want to take those out this year, and then do I just go straight after the taxes and not worry about school loans until I get the taxes done?

How much do you owe in taxes? After this year, it'll probably be around $50,000. Well, this year is only half done. Yeah. How much do you owe in taxes now? For half the year so far, I bet it's probably going to be so far like $12,000. It's just this year's taxes? That I'm assuming, I guess.

You don't have back taxes from last year? Yeah, I do. I have $20,000 from last year. That's what I'm asking. That's what I'm asking. Okay. Okay. All right.

Well, the first thing you need to do is set up an accounting system for your businesses. Okay. A separate checking account for each business, and only put money into the respiratory account from the respiratory business. Only put photography money into the photography account, period. Okay. Don't write. Listen, listen, listen.

Okay. Don't write. Listen, listen, listen. Okay. And don't write any checks out of any of those accounts except expenses associated with that. So you don't pay respiratory business expenses out of the photography account, and you don't buy groceries out of the photography account. You only write expenses associated with the photography account. So follow me on this. If only income goes into the photography account from photography and only photography expenses come out, then your checkbook register essentially becomes a profit and loss statement.

You can tell if that business is making money. Any money that's left in that account, by definition, is profit on cash basis accounting. So when you get ready to take money out of that account, I want you to set aside a fourth of it for your quarterly estimates. And I want you to start paying quarterly estimates immediately. Okay. For all your money going forward, starting today, every dime you make, okay? And it's going to be about a fourth of your income.

And so if you set aside 25%, you pull out $10,000, and you set aside $2,500 out of that account for taxes and take $7,500 and put it in your home account to pay bills with. But you set aside, you withhold taxes on yourself, about 25% of what you're doing, and then you'll have the money to pay your quarterlies going forward because you can't dig your way out of last year's taxes while digging into this year's taxes. You've got to stop the bleeding first.

Yeah, okay. Then you can heal, okay? So first thing is set up an accounting system, start doing your quarterly estimates, get in touch with one of our endorsed local providers, and lay out a game plan for doing your quarterly estimates properly so you don't get yourself in a pinch again. Okay, then we've got the money left over after your quarterly taxes you're withholding on yourself. Whatever's left over is now your income.

And that's the take-home pay that everybody else operates on. You said you're married? Yeah. And does she have an income? No, she's a stay-at-home. Okay. And so we take the money from, you know, this take-home pay, and we begin to clear this up.

Then what I would do is I'd clear up taxes first. Before I pay off your cars, before I pay off your student loan, I'd go back and get that $20,000 done as soon as possible because the IRS has the highest interest rates, the highest penalties, and the most power to screw up your freaking life. Okay. You do not want these people in your life. Okay.

Then start your debt snowball. Once you get that $20,000 from last year cleared up. And you can do that pretty quickly. Once you get on a system and you decide if you're really as disgusted as you're trying to convince me you are, if you're really disgusted enough to finally change, the numbers tell me you can walk through this. But it's what Chris Hogan says all the time. The numbers change when people do. So your 42 false starts,

is this going to be another one? Are you really going to do it this time? I think you're really going to do it. Because I think I heard enough healthy disgust in your voice. You got tired of trying to out-earn your own stupidity. I've tried to do that for a long time. It's very difficult.

You've got to make a lot of money to out-earn your stupidity. It's a lot of money. Most people your stupidity that's a lot of money most people can't do it most people are stupid me included you just can't do that you gotta stop being stupid this is the dave ramsey show for years i refused to endorse any company that claimed to get people out of timeshares i told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry, and I learned that you can't sell them and you can't even give them away. And then we talked about Timeshare Exit Team's process.

Every ownership situation is different, which is why they have more solutions than any other company. And that's when they earned my respect. Don't call any of the imposters out there. And there's a lot. The only timeshare exit company I stand behind is timeshare exit team. They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee. They will get you out or they'll give you a full refund. Call 844-999-EXIT online at timeshareexitteam.com. Our scripture of the day, Hebrews 11.1

Now faith is confidence in what we hope for and assurance about what we do not see. Mark Zuckerberg said, people can be really smart or have skills that are directly applicable. But if they don't believe in it, they're not going to work hard. Peaches is with us in Jackson, Tennessee. Hi, Peaches. How are you? Oh, Dave, I've got a little finest thing going on, but I am blessed to know you. How are you?

Better than I deserve. What's up? I've got a pen and paper handy. I'm going to tell you what I'm going to tell you, then I'm going to take what you're going to say. Kit and I have been debt-free, house and everything, since July the 15th, 2016. As a matter of fact, we came up and did our debt-free scream in December of 2016. We started the program in 2013, and we told our church about it. They didn't quite look as happy for us as we had hoped.

Okay. I bought four books, four of your Total Money Makeover books. I gave one away to my pastor, the assistant pastor, and two other people. And as of this date, no one has finished reading it. I bought the FPU class to give away. Nobody has asked for it. We celebrate being debt-free by doing something to help somebody. So July of 2017, we paid up a church member's utility bill that was behind, and then this year, July 2018, we paid about $500 to get someone's van fixed

that was outside the church. But my thing is, no one at church is asking us about how we did it. They're not asking for the FPU that I bought. And I don't like giving up, but I am getting so frustrated. Nobody is asking, what do we do? And every time I look around, somebody's buying a new car. I'm sorry, getting a new car on payment. I've got my pen and paper, shoot away. Have you attempted to teach a Financial Peace University class? I tried to ask who might be interested in it.

I even tried to go with this lady that was kind of missing up her money and start a budget to do a budget for her and show her how it's done. And I started writing down on a piece of paper, just making everything. I told her about the baby steps and whatever. That didn't go over so good. What do you mean didn't go over so good? Well, yeah, okay. Well, her daughter was getting some money through some type of program,

and she was a juvenile. So what size church is this? Probably about 200. Okay. All right. Well, I don't know exactly what's going on. I can't tell. I know that the class has now been taught in about 50,000 churches around America.

The Financial Peace University memberships memberships the groups are now meeting in in any given time about 12 000 churches so um we're sure that people do it all the time um i think you might just sit down and um uh and try try your very best to not be complaining but just sit down with your pastor maybe take your pastor and his wife out to dinner, you and your husband, and just say, hey, we want to tell you our story. And just tell them your story of how you used to be struggling with communication, and now being on a budget together, you're getting along a lot better, and how you used to be stressed about money, and now you're not.

And now we're able to give, and we're able to help people because of this. And when they nod and they say, that's great, that's great, that's great, that's great, that's great, because they won't argue with your story, right? Then you just say, and, you know, what we're struggling with, and, Pastor, I'm asking for your help because I'm struggling with the fact that you guys don't seem to be excited for us. You know, and it kind of hurts our feelings a little bit. And we'd like to bless other families and help them get to this same point, but we can't even imagine you endorsing that from the pulpit

based on the way you've treated us. And we're a little bit hurt. And we're not complaining. We just want to try to understand. Are we missing something? Do you see that there's something wrong with what we've done? And just ask some questions and see if you can get him to open up and tell you what's going on, because it sounds like that there's something going on. I don't know what it is, but it may be something in the background or that particular church or whatever,

the way they view me. I don't know. I mean, there could be anything. Well, listen to me. I've come up quite a few times to see you. I came up when your daughter did her new book. But I suggested that one of the deacons and his wife and the pastor would come up with me to just see the show and sit out and go next door and eat lunch.

And I thought I had that nailed down. When we're going to come up, I'd make sure you're going to be there. And I promised about seven days before, it's like they got nervous. Well, you know, we just don't think, I said, well, it's not going to cost you anything. All you have to do is just sit in my car. And they backed out. Well, I mean, I guess you just need to have a conversation with them about this. That's all I know to tell you. And just say, you know, I guess you just need to have a conversation with them about this. That's all I know to tell you.

And just say, you know, I don't understand. It kind of hurts my feelings a little bit, and I'm not trying to force something on you. And then, you know, ultimately you may decide that that's not the place you're going to attend. It's hard to go to a place

for worship that doesn't have any respect for you. And if that's what's going on, then that's what's hard for you. I can appreciate that. That would be hard for me, you know. And so, you know, you just got to talk that through and try to figure it out. Hey, thanks for the call. All right, up next is Christopher in Salt Lake City. Hi, Christopher.

How are you? I'm fantastic, Dave. Thanks for taking my call. Sure. Excited to talk to you. I respect the smile out of you, Christopher. How are you? I'm fantastic, Dave. Thanks for taking my call. Sure. Excited to talk to you. I respect the smile out of you, man. You take some really good things. So a recent listener, as of about a month ago,

and so I ended up filing chapter 7 bankruptcy in December. It was discharge December, last December. And so I've been listening to you and I've heard a lot of advice as far as not to file bankruptcy, but maybe my question is kind of where to move forward from here. My wife and I, it was just under my name that we filed the bankruptcy because it was my medical debt. And my wife has really good credit. We're currently about three thousand dollars away from being done with baby step two from back taxes and um her medical stuff wonderful and so um yeah i just i've been hearing a lot of different things of what to do what i should do to

to get prepared we're first-time home buyers but um you know what we obviously probably won't be able to with uh having the money down for about another year and a half. But maybe some suggestions on how to move forward to be able to qualify. Well, I think everything you're doing is the right things. You've, you know, you learned your lesson from what you've been through. And you're working through the remaining of the debt after the Chapter 7, after your meeting of creditors and the discharge of the bankruptcy and so forth. So living on a budget, working working together working the baby steps that's your shortest path to getting yourself back on solid ground or on solid ground maybe for the first time and you know when you're

sitting there with no debt hey you're sitting there with no debt an emergency fund of three to six months of expenses that's going to be a completely different feeling for both you and your wife maybe than you've ever had as a grown-up yeah absolutely it'll be a first yeah and then and then start saving towards your down payment if you're going to sign on the mortgage it's going to be about three to four years from the discharge date uh the final discharge date which i'm guessing was february if you filed in december um was i'm guessing it's about 90 days out. It usually is on Chapter 7. Yeah, the discharge was in December. It was discharged in December.

Oh, it was discharged in December. Okay, so about three years to four years from that date before you're going to be worthy of a mortgage, credit worthy of a mortgage. But the bigger down payment you have, the less debt you have, the more you've paid everything other than that, everything earlier on time. Your current landlord, you pay them earlier on time. You pay everybody earlier on time. Pay everything five days, even electric bills, everything.

Put them on automatic draft so they're never a minute and a half late. You know, just work it, work it, work it, work it, work it. But I would not go borrow money to, quote, build your credit, you or your wife. Not at all. And then sit down with someone like a Churchill Mortgage, and they can walk you through how to best be prepared and what the drop-dead date is. But it should correlate that three years from December to being debt-free, emergency fund, and a big down payment.

That's going to put you about three to four years out from there. And you're going to be in a better place than you've ever been in your life, and then the home's going to be a blessing to you and not a curse. So, really sorry you went through that, man, but I'm glad you're coming out the other side. I'm proud for you.

Congratulations. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

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