Paid off around 45,000 a year ago this coming may. Cleaned my savings down to $1000, currently debt free and have doubled my mortgage payment and my savings account is back up to $28,000. It can be done people. Be mortgage free very soon.
Yah I feel like $1,000 per person in the household is a little safer (in Midwest while renting - if you live in place with greater risk, maybe you want more). So when I get married next year we’ll have $2,000 I think. That makes me feel better anyway, especially bc my partner is type 1 diabetic and his medical supplies can be pricey (when they bother to send the bill).
Students: if you don’t know, a lot of companies offer tuition reimbursement. I work 20 hrs/ week at UPS and they pay $5,250/yr for my tuition. Definitely wouldn’t be graduating debt free if it wasn’t for that.
Yes UPS offers $5250/yr because it is part of a Union. However they do take $20/week off your check because of that. At FedEx they offer $1500/yr for package handlers. Combine that with FAFSA grants you should be good.
Bogey, a lot of companies offer $5250/year of tuition reimbursement that arent unionized. Most bigger companies will especially if it's a program that relates to your job there. $5250 is likely the maximum you'll get without some sort of an agreement however, because that's the IRS limit for what these companies can deduct off their tax returns.
@@neutralsportsfan17 Yeah a lot of companies do it and UPS does it whether you are in the union or not. I should have mentioned UPS’s reimbursement is nice because you can get it the day you start there and you could quit the day you get your reimbursement- they don’t care.
He still needs to have money in his account for a rain day. If I were him pay of the car and then put a large chunk towards the student debt. He still needs to leave some savings that he can dip into in an emergency. He could keep $10000 in savings and then only have student debts of $10000 to $15000.
These are the ones that drive me crazy. "What's your income? $8k pre-tax!" - Ok, I'll then walk you through steps that ignore those taxes along with rent, food, utilities, and assume you have the full 8k to play with. Dave said "I want you to save 4-5k per month into baby step 3". So $8k pre-tax becomes $5500 post tax, not factoring in food, water, shelter, gas, etc. and is told to save 4-5k? Unless Dave heard he makes $8k POST tax, this makes 0 sense.
@@ifronnin I do too but only because my house and car are paid for (which took years to achieve) It just depends on what you are already locked into. Yes you can tighten the belt but rent, mortgage, utilities and price of gas to get to work are not flexible. I presume you've always been frugal and have set yourself up with modest expenses.
@@curiouscat3384 You're right, I should've specified that for a single, frugal adult, $1,500/month is entirely feasible. That's how I lived when I made the comment but since then it's bumped up to $2,000/month because my income tripled. But that being said, I know a girl who lived off of an $18,000 annual 1099 income, no debt, who lived off of $1,000/month. She's incredibly frugal though, saving $6,000 out of the 18k.
I was thinking the same thing. I wish Dave had talked about the after-tax income. Where I live, the average cost of a 1 bedroom is $3,000!!! In all of Canada, it's around $1,800 (even in many smaller cities). So if he takes home $5,500, and pays $1,800 for rent, he's left with $3,700 per month. So he could probably pay $2,000 per month to rebuild his emergency fund, which is great - but it's a far cry from $4,000!
Why not wait the 4 months to pay it off and maintain a 30k-50k emergency fund for the time being? Not worth the risk of needing the cash to save only 4mos of interest.
no no dont use all the savings..Use half for the debt and keep half in the bank..Then start saving again and put that money towards the debt..You need emergency money especially these days..
Yeah I couldn’t agree more..Dave drives me nuts with this concept. $1,000 is not enough in a moment of crisis not to mention even little things like your car breaking down, etc. Don’t drain almost everything you’ve saved just to be one of Dave’s minions that can say you’re debt free with nothing left over. If you have enough income and the loans are low interest just keep paying your payments and put large chunks down on it as you go.
@@Jay-py1ow I love the minion thing..sounds about right..I also dont think everyone can eat beans and rice for months at a time or even deliver pizza..you know he went bankrupt and some people have too but does he ever mention that?..
@@mariejones7136 he preaches to the financially dumb people that have no discipline, never has advice for people like me and you..it can’t be a one size shoe fits all type of thing. And yeah exactly! He didn’t go into debt/bankrupt because of a little consumer debt, he went bankrupt because he took on 30-day short term loans that had to be paid off at once if defaulted, the most ridiculous decision I’ve ever heard lol..but he won’t talk about that part 🤣 I like some of his concepts but I swear half of his followers don’t even do their research or know this stuff.
@@Jay-py1ow I would have to agree with you....He wiped the slate clean by going bankrupt..he didnt eat beans and rice and deliver pizza or I dont think he did.some things are common sense..
The mindset Dave is trying to instill is to realize that 30k is savings isn’t truly Joshua’s money. If he is in debt, either future money earned or his 30k in savings is not his money. That’s the mindset - when you owe someone money, the money you are making isn’t yours. Many of us like to think in separate terms of net worth and then keep debt in a separate bubble, but that leads us to unconsciously spend more than we have. You can try variations of savings that work best for you, but always have an approach that goes toward aggressively paying off debt.
LOL or properly leverage it instead of only keeping $1,000 to your name in a moment of crisis..that’s not nearly enough. Are the majority of people really that financially dumb where they can’t handle their own finances?? It’s ridiculous.
I'd keep 3-6 months of expenses (minimum) and apply the rest towards the debt. I'd rather be able to live worry-free for a few months instead of no debt.
@@Faith-un7ns Not really when you still have monthly expenses like Insurance, property taxes (/rent), utilities, food, etc. I'd prefer to have enough cash to cover living expenses for a few months and some debt, than to have only 1k and no debt (but still monthly expenses). If something financially damaging happens to him after he drains his account, he will be hurting.
@@JayTarsia25 he sells mortgages. Nothing is going to happen in the next few months. I could see in the next couple of years but by then he should have triple of what he has now in the bank. People are still buying houses right now, he has nothing to worry about.
@@Faith-un7ns His specific company could fail. He could get fired. He could get sued. He could get ill. He could get hit by a car crossing the street. He could fall down stairs. Personal problems, etc. Dave's advice relies on the notion that his employment is guaranteed and no crazy expenses will pop up. I'm not willing to take that risk (I'm in a similar position as the caller here). All I'm saying is it's better to have a few months worth of savings than to live paycheck to paycheck, even if you have some manageable debt.
Agree. I would create a plan to pay off the debt over 6 months. That protects him if something happens with the job. I understand where Dave is coming from by dropping the savings to 1k but it creates unnecessary risk.
Sometimes I find Dave's advice a little off. Maybe I'm too conservative and a little skeptical regarding cleaning up a savings account to pay off debt and then starting from scratch on creating the emergency fund... What if the guy goes ahead and pays off his debt and loses his job the next day? That's just something to think about... Sh*t happens...
If losing his job was a concern, why did he ever take out those loans in the first place? When someone gets a loan for a large purchase like a car, it's generally under the specific assumption that they are going to continue to have a job in order to be able to make the loan payments. This goes even more for student loans, which are taken out under the premise that the education they buy will allow you to *get* a good job. So, why would potentially losing your job suddenly become a concern when it comes to paying off those same loans early? To put another way - as you said "Sh*t happens", and that is true. However, it goes both ways - that is another reason to avoid debt in the first place, which is why Dave teaches what he does..
In response to the title of the video, “Yes.” Call over. Oh, get on beans and rice. Always beans and rice. Maybe, on special occasions, rice and beans.
@Sponge Bob Mr. Bob of Sponge, My dear sir. Sadly, I must inform you, that you would be incorrect. No matter the circumstances or situation, beans and rice is ALWAYS the answer. (Occasionally, rice and beans, BUT only occasionally) Cheerio.
Currently in this similar predicament. I have saved up $37k and my debt is $39112. Seeing all that money go is kinda weird but I just think of it as finally getting this debt out of my mind and living freely from here on out. This method is more unconventional to what the baby steps teach but no matter how you get there, just do it! It’s not how you start, it’s how you finish! 🤷🏾♂️✊🏾
God ALWAYS puts the videos I need to watch in my way. Thank you for the advice, Dave. Paying my car loan half off tomorrow. Little late for tonight to go to the bank!
Congrats!! How much are you paying off? My interest loan is very bad. Have had the vehicle a year but it’s under MY name. I was offered a free car (denied) what’s your suggestion??
I just talked a coworker into taking $14,000 from his $20,000 he had in his savings to pay off his car. He was so against it at first but has thanked me a lot since then!
@@webfreakz assumption: but I’m assuming John is referring to the early payoff penalty that a lot of loans have but this person like myself more than likely had a loan that doesn’t penalize you for paying off the car loan early
I’m wondering..if this caller does just that, and loses their job the following month (January) then what? Where do they go from there? 1k in savings, no job, and 6500 of debt. In this job market, getting a new job could take 3-6 months. Wouldn’t they have been better off keeping, say 10k, and paying 20k towards the debt, to have a bit of security in such unpredictable times
He is in Mortgage so I assume he is in sales which means he is probably a natural. He more than likely could make money selling shoes or about anything else you can think of.
Why should he be worried about losing his job now? That clearly wasn't a concern when he decided to take out a car loan and student loans in the first place. He must feel that his job is secure because he was operating under the assumption that he would be able to make the monthly payments on the loans at the time he signed for them.
@@chrisstaub5880 Because losing a job now with little money to spare could be very risky. He can pay down the majority of his debt and in a few months have it completely cleared. It is great to get out of debt quickly but a few month is quick if he puts his mind to it. And then he could be clear for wealth building. He could do it now but also risk then being out of work for a few months and then have debt pile up again very rapidly. When you have no money for food you will use overdrafts or credit cards to buy the food.
I completely understand this guy. It’s hard to know you got that much in savings and need to throw it towards your debt but he will feel soooooo much better afterwards because he makes enough to build all that back up right after he is debtfree.
Use my saving to pay off debt is a necessary step toward building wealth. But as Dave mentioned, I’m in love with my Savings. 😕. I think about this ten times a day.
Ya I had about 1 year left on my car payment, but had the money to pay it off, even though the car payment was at 0%, but the feeling of being debt free was WAY better so I paid it off early. Now things are just that much better later in life.
@Xray Paul I have a score over 800 and it's still over that long after I became debt free since I didn't cancel my cc...I'm good but while I wouldn't say you need a small debt, keeping a credit card open until you buy a house is better.
@Xray Paul Keep getting credit cards to increase your total credit limits, but don’t use them. You’ll have a high credit limit and 0% utilization. Credit score will shoot up.
I used to be ok with emptying savings to pay off debt until I just recently learned that unemployment insurance in my state will pay no more than $400/week which is essentially nothing. I had no idea the coverage was so low. Now I'll not take that risk if losing my job after paying down debt.
If you actually are concerned enough about your job to be looking up the details on unemployment in the first place, Dave would say that you shouldn't be paying anything beyond the minimums on debt anyway and put every spare dollar into savings, until the situation changes and you feel more secure. This is exactly what he has suggested to anyone who has a reason to worry about potentially losing their job, beyond just a vague "what if?" hypothetical.
@@chrisstaub5880 I'm as concerned about losing my job as a healthy 25 year old would be going without health insurance. Odds are you won't have any major heath issues in a few years but it will be devastating if you aren't prepared.
Or, keep your $30,000 security blanket and pay off your debt in nine months. Either way, in less than a year, you are at the same place. The only question is, do you want security during the first half of the process?
Lol I kept telling my friend, Joshua (no lie), to pay off debt first with his huge savings account. I hope he will listen to Dave since he won’t listen to me.
What mortgage company is he with? I just graduated from ASU and declined a job offer from rocket mortgage but hearing your friend make $8k a month makes me think I should have taken the offer..
Thank you I had some credit card debt and luckily some savings.. so paid off credit cards and currently doing the envelope system… we should be good soon!
Wow... this sounds just like my life. I'm in mortgage, I'll make $330k+ gross this year, I have $40k in student loans for my MBA, and a I've got a car loan of $30k. I've have $50k in cash and investments (not including IRA and 401k) but I don't want to pull from it because the student debt is in federal deferment and the car loan is 2%. I've used some money this year to get a new roof (State Farm discount) and some other items. I agree with Dave's plan, but I just don't want to burn through the chunk in liquid savings.
Don't be "Davish," Steve. Go all in! You make a killer income. What other debts do you have? Do you have a mortgage? Depending on that, you could potentially pay off 100% of all of your debts and mortgage and rebuild your emergency fund within a year! At a minimum, you could completely pay off your student loans and car loan AND rebuild your $50k emergency fund within 2-3 months. Imagine how that would feel, bro!
@@brockb3692 Oh, I know. I'm a veteran and a mortgage banker. My mortgage rate might fall to 1.75% shortly if I elect to refinance. If that's the case, I may just keep the mortgage.
My wife and I have $30,000 and she has student loan debt of $40,000 and we have one vehicle we owe $11,000 on. She works and makes 45,000 and I’m in school. Should we put all the money towards the student loan debt even though Dave says smallest first? The student loan has an absurd interest rate and the vehicle has very low interest. The student loan will grow by the hundreds where the vehicle is only hundreds. Thoughts anyone?
In part, that depends on exactly how many loans you actually have. You say "student loan" singular so that sounds like it's just one loan, but is there really just one or are you lumping together several individual loans? The general point of the snowball, focusing on the smallest debt first, is about giving quick early wins to help provide additional motivation, by allowing you to cross some debts off the list early on so that you see progress being made. That's probably less of an issue if you have a total of only 2 debts. It really just depends on whether you need that early win to keep going. On the other hand, if there are multiple student loans, keep in mind that Dave's plan is about sorting your debts smallest to largest by individual loan balance, not by type. So, each individual student loan would be listed. If that is the case, I would guess at least one of them is probably smaller than $11,000, so even strictly following Dave's plan you would be starting with at least some of the student loans first anyway.
As soon as I let my emergency fund slip to $1000, I’d have two major appliances break, the exhaust, rotors, and calipers go in my vehicle, and my furnace needing immediate replacement.
Yeah during this pandemic losing your job is even more magnified than it normally is when we aren't in a pandemic. Dave won't deviate from his teachings though so you won't hear him say otherwise.
Not sure if anyone can give me advice in the comments on this but I’m 26, make 60k$ take home currently a year and have 9600$ in a car loan and a little under 25$k in student loans. My 31k$ high yield savings expires in October and I was debating on if I should roll it over or use some of it to pay off the car loan and student loan. The catch 21 with the student loans is that my company pays the minimum for me every month which covers my entire monthly payment owed so I owe nothing at the end of the month. I don’t plan on leaving my job anytime soon and it’s technically my longest line of credit since I didn’t open up an actual credit card til 2023. I def wanna pay off the car but I feel like I could just let my company pay my loans at least for now since it’s not really taking anything out of my paycheck and it’s a good write off. Only thing is I do get taxed the money that they pay toward it as if im making it from what i was told.
@@songriver1232 $1000 emergency fund. Order the loans(debt), smallest to largest. Pay the minimum on the larger loans and attack the smallest loan until they are all dead. Rice and beans, take a 2nd job. You're not gonna see the inside of a restaurant unless you're working in one. Thats what it basically comes down to. Get intentional, give every dollar a name. Don't just work towards paying off your student loans, know when you're paying off your student loans. If every dollar has a name, then its just a simple mathematical calculation on how long it will take. Gazelle intensity, run like your life is in danger and don't stop running until you no longer have student loans/car notes/credit card debt. I've seen the full spectrum of salaries call into dave, thats what he would tell you.
The median income in America is $60,000. One third of American income is in excess of $100,000. America is the greatest and most successful country in the world.
Question for y'all. By the end of this next July, I should have enough to pay all ,give or take 1k, of my students loans(18,300$). This leaves me with no savings though. I am still a student in Grad school but should start working full time that following month in August. I will have my teaching credential in math and a masters, bumping my salary to 60k my first year teaching. Should I pay my loans off now or wait until that job is guaranteed? From now until July, there shouldn't be any interest in the student loans.
@The Dave Ramsey Show Oh, thanks for the info but I'm currently debt-free ! I just enjoy listening to every piece of advice you offer even if it relates to problems I do not currently have. One never knows !
I own 10k and a car loan instead off paying the cart off I put the money into a dividend stock and everything month I take the money from the investing account. Is that I good idea?
There was a rule of thumb said that t for every $10000 that you want to earn add the time it would take you to find a job by at least one month. It is a good way to estimate how big of an emergency fund you would really need. Note for some pay people who make above $70000 a year, they might not even be able to get 'low level' jobs due to being overqualified.
Please learn from my mistake. This year during the lockdowns I used my time to work harder and save more, resulting in 9500€ in 7 months. My total remaining debt (flat mortgage) is 37000€. Then I got GREEDY after the good results and wanted to speed up the process even more, so I chose to "safely " gamble and plan to double those savings. Needless to say, I am exactly where I was before the pandemic with 0€ saved and knowing all that hard work was for nothing really gets to me. Never do this. Slow and steady wins the race.
Sorry to hear that, it must have really hurt!! I had $10,000 in my emergency fund at the start of 2023, and had to spend it all this year when my father got sick. (Flights back and forth, 4 months off work with no pay, etc.) I'm down to almost $0 now. Don't get me wrong, I'd do it all over again in a heart beat. Spending that time with my dad was priceless, and I'm so grateful I had the emergency fund to cover my expenses. But it really does sting to have nothing in there now. I hope you've been able to build up your savings again over the past 2 years. I'll start rebuilding mine next month!
@deborahblackvideoediting8697 I wish you luck and good health. Money will come, and I'm sure you will rebuild your emergency fund soon. I haven't gambled since then, but I still feel very stupid for doing it in the first place. In the meantime, I've saved up just enough money to completely pay off that rental property. Still, I'm going to wait on it because I can't afford to be on zero.
@@dex0n92 - One thing to keep in mind is that we all make mistakes - but some people learn from their mistakes, while other repeat them over and over. I hope that you can give yourself credit for choosing to learn from your mistake. Not everyone does that! I wish you all the best. :)
25 years ago, I drained my bank account down to $2000 to pay off my mortgage. $1000 was bit too risky for me and $2000 was worth a lot more 25 years ago. The reason I took the gamble is because I was single and my parent's were comfortable. They would help me out if an emergency happened. However, it did make feel a bit vulnerable. Fortunately, no emergency happened. My expenses significantly reduced and my income kept rising. My bank account quickly recovered.
How should i approach this: 1200$ in savings, 1350$ in TFSA that gives me good return on investment(more than 20%), 13000$ car loan debt(only 1.49%interest), about another 20000$ 0% interest loan(girlfriend and dad...) I have extra 1268$/months(with an income of 3276$ after taxes) to put towards loan, savings etc. What should i do? Minimum payments for car loan is 368$/month. No credit car debt that i don't pay every months thanks to girlfriend(got in debt with girlfriend because we wanted a house so she provided most of the cash down) and dad(helped me with credit card debt in january 2020). I figured that i'll be debt free in 3 years... It's so long... Thank you
I have had that happen. You will have to call on dad. lol I think the rule of thumb for the babysteps is that you have to be employed while doing them.
@@wewhoareabouttodiesaluteyo9303 You have to have an income of sorts. The issue is does he need to pay the whole debt of right away or start tackling it over time?
@@bighands69 It should not matter what you do. If you have income coming in, it would be wise to just pay off everything in lump sums and be debt free. You can also choose to tackle it over time, but the catch is that you are paying interest that will both take longer to pay off and will be a waste in terms of the hours you put in to make it.
if you already have a bunch of savings you might not feel that you really need to pay off the debt. That's part of the reason that the starter emergency fund is so small - you are supposed to be a bit uncomfortable so that you are motivated to pay off your debt faster.
I thought Dave said save $4k a month. Keep in mind he won’t have the car payment anymore (whatever that was) and won’t have the student loan payment either. Roughly gives him $2k a month to live on after taxes.
Love you dave...but no way I'm leaving my savings at 1000. I've paid off 10k in debt and put 5k in savings...I've got roughly 15k in debt to go. 10k of which is a car note...I estimate that throwing 1.5k a month at it were clear in 10 months. 1k is nothing these days..I just had to pay $300 to fix my AC that hurt.
Just paid off my 3 smallest debts. Just the American Express to go. Should be done by the start of next month. Then it's ramp up tge savings and pay off the house. Feeling good and about to have a celebration (home made) coffee! I am very happy that whatever youtube algorithm was in place threw up the baby steps.
It is hard to part ways with hard earned savings that took so much time to store up. Makes you feel insecure because it's nice knowing you have that money in the bank.
I'm about to be in the same boat very soon.. I realize that paying off debt fast as possible is the best thing.. but how to I make it easier to let go of years of savings? (about 12-15k I've been saving since my first job in 2017).
One way to look at it is that it isn't really your money. When talking to one caller who said she didn't want to put all her money towards debt, Dave said, "You've already spent it. You're just admitting it when you pay off the debt."
$8k after taxes and deductions might be $6k a month. It could take a little longer based on his monthly living expenses like rent, food, utilities, but its definitely doable 👍
why am i scared to start? I am a compulsive debtor and i need help. Dave Ramsey's plan makes sense and I am ready to start but still scared? of what I don't know?
Your problems are not debt. Your problem is self control and impulses. You need to start structuring you life and personality towards a new foundation.
I work here at a hospital in NYC.. it’s all lies I am so busy that I am sitting here watching RUclips videos !! Why don’t you think they interview us? Or test us all the time? ! It’s a joke over here
The more I listen to Dave the more I think debt is the worse thing someone can do , it’s really Not . Like what happens if he pays off his debt, has no savings and then something happens like his car breaks down and needs money to repair it .
Keeping only $1000 in savings is dangerous to me. What if your car breaks down? What if you lose your job? What if you have a medical emergency? I have 10k in savings and that kind of barely makes me feel secure enough.
I don't get why people are reluctant to use "savings" to pay off money they already spent. If he had no debt and no savings would he borrow $30,000 and put it in a 1% savings account?
I have similar situation, 23 yrs old 40k in student loans and have 42k saved up in a year and a half. Part of me wants to write a 40k check but it seems devastating. Student loan forbearance has helped a lot.
One possible viewpoint: justify those student loans by paying them off immediately. If they were really worth taking out, then the education they paid for should be sufficient to provide you with a job that allows you to build up those savings again in no time.
I would pay off the car for 9k, pay off 10k worth of student loan debt, put 6k into gold, silver, and cryptocurrency, keep $5k in savings. Pay off your remaining student loan debt within the next 6-8 months with your solid income. Please understand that we are seeing inflation (money printing and devaluing) like never before so having hard assets are one of the smartest things you can hold right now. The dollar is dying, and Ramsey is in love with the dollar.
In a normal year, this would be ok advice. However, with the Virus looming and shutdowns coming, this is not good advice. Pay off the car yes, if you are going to keep it. You may need to survive another 3-12 months with NO income. I would pay off the car and then use my salary to pay off the Student loans while keeping my emergency fund. Sorry I need to know I can eat if I lose my job. I know Dave has to stick to his one size fits all advice, but I just think it would be stupid to pay off debt and only have 1000 dollars when a shutdown is coming.
Hey dave thanks for everything you do brother everyday!! We are debt free except for our recently refinanced $159,000 mortgage down to a 15 year at 2.3 % no points in northern California were doing ok with a $20,000 emergency fund our kids owe us $14,000 which I'm confident they will pay back. I pray it all works out sorry for not doing your rules 100% but were getting there everyone 8n my family in my house knows about you but the mentality of my children won't allow them to follow your guidance all the way unfortunately my marriage if 28 years is hanging by a thread.
Dave always forgets federal and state income tax. Single in Arizona is 4.17% at his income. His effective federal tax rate is probably around 20%. Now, all of a sudden, the $8000 is $6000. Then Dave ends it with saying he's going to sock away $5000 per month. So he's going to live on $1000 per month to pay rent and all his bills, insurance, food, utilities, etc? C'mon Dave. Geez.
I think Dave understands the taxes, but yeah I wish he would personalize that more, especially for single people. Single taxpayers making $80k - $100k will probably have effective tax rates of about 20% - 25%. Married taxpayers will not pay anywhere near that amount, especially if they have children, will all off the goodies and deductions married couples get. Their tax rate would be closer to 5% - 10%.
If you have that kind of money just pay of the car, then maybe put half the rest on student loan then knock the rest out in about 5-6 months same basic plan but you have $10k in the bank in case stuff happens.
I would just pay off the car loan of 9k, then save up until I’m at least 3k over my student loan debt and just make a big lump sum payment. Student loan debt is at 0% interest all the way till beginning of February. He’s fine.
Am I the only one who thinks rice and beans (or lentils) for breakfast, lunch, and dinner aren't bad at all? Whenever I went to my dad's house, even though he made 50/hr (50-70 hours a week), he still ate beans and rice. He had some homemade hot sauce to mix it up a bit, but it was so good. Why have anything else? I mean, you'll want some salad and fruits a couple times a week (should be every day, but if you are on a budget...), but rice and beans are completely fine.
Paid off around 45,000 a year ago this coming may. Cleaned my savings down to $1000, currently debt free and have doubled my mortgage payment and my savings account is back up to $28,000. It can be done people. Be mortgage free very soon.
CONGRATULATIONS! Definitely worth the hard work!👍🏿
nice work!
Sounds amazing! Congratulations 🎉
Great job !
Brilliant.
That's how you walk someone towards debt freedom Dave and team spirit to rescue
Caller: I have debt
Dave: pay it off
Caller: I never thought of that before
@The Dave Ramsey Show Go away TROLL
Lol it sounded the same to me. he sure knows how to make money, but doesn’t quite knows how to manage it.
Plus $8000 a month income?!
Lol!
Sure, but like Dave said, when he told him to drain the savings down to 1k to pay the debt, most people wouldn't think to take it that far.
I understand where he is coming from. It is a very scary thing to completely get rid of your security blanket to pay off debt. $1000 is nothing.
The inverse is true too. He has 30k in savings because he did not pay off the debt.
Yeah, I've always thought Dave's baby emergency fund was a little on the light side. I think it should be more like 3-5k instead of just 1k
@Sponge Bob But what if he needs a real emergency fund before then?
I keep $5000 because I'm single and have no fall back for emergencies or unemployment.
Yah I feel like $1,000 per person in the household is a little safer (in Midwest while renting - if you live in place with greater risk, maybe you want more). So when I get married next year we’ll have $2,000 I think. That makes me feel better anyway, especially bc my partner is type 1 diabetic and his medical supplies can be pricey (when they bother to send the bill).
He sounded so surprised that he could be done with debt in like 2 - 3 months. Do it man! Stay in front of the 8 ball, don't get behind it!
Get advice.
Still getting hit with a pointy stick regardless
Beans and rice, rice and beans for about 6 hours and he is in the clear....
lol yep
Literally 😂
😂
And a lot of farts
YOU FUNNY DUDE LOL
Students: if you don’t know, a lot of companies offer tuition reimbursement. I work 20 hrs/ week at UPS and they pay $5,250/yr for my tuition. Definitely wouldn’t be graduating debt free if it wasn’t for that.
Hello Brother UPSer :)
Yes UPS offers $5250/yr because it is part of a Union. However they do take $20/week off your check because of that. At FedEx they offer $1500/yr for package handlers. Combine that with FAFSA grants you should be good.
Bogey, a lot of companies offer $5250/year of tuition reimbursement that arent unionized. Most bigger companies will especially if it's a program that relates to your job there. $5250 is likely the maximum you'll get without some sort of an agreement however, because that's the IRS limit for what these companies can deduct off their tax returns.
@@neutralsportsfan17 Yeah a lot of companies do it and UPS does it whether you are in the union or not. I should have mentioned UPS’s reimbursement is nice because you can get it the day you start there and you could quit the day you get your reimbursement- they don’t care.
@Xray Paul
It is called service to your country.
Love the way Dave walks him through the months. That really helps picture it.
He makes almost $100,000 a year. Pay off the loans.
That’s 90k pre tax so about half that...
@@5000MikeMaster definitely not half. This isn't the UK
Michael post I make about $84,000 a year ($7,000 a month) and take home $5,100 a month.
He still needs to have money in his account for a rain day. If I were him pay of the car and then put a large chunk towards the student debt. He still needs to leave some savings that he can dip into in an emergency.
He could keep $10000 in savings and then only have student debts of $10000 to $15000.
@@5000MikeMaster ya thanks for that explanation of taxes bud.
If he's nervous about only having $1000, then he could keep $2000 or $3000 back. It won't hurt him much.
Yip or 5000
That's what I was thinking. I'd keep $5,000 and put the rest towards the debt.
These are the ones that drive me crazy. "What's your income? $8k pre-tax!" - Ok, I'll then walk you through steps that ignore those taxes along with rent, food, utilities, and assume you have the full 8k to play with. Dave said "I want you to save 4-5k per month into baby step 3". So $8k pre-tax becomes $5500 post tax, not factoring in food, water, shelter, gas, etc. and is told to save 4-5k? Unless Dave heard he makes $8k POST tax, this makes 0 sense.
You can live on $1500 per month. I personally do it. So $4000 is doable.
@@ifronnin I do too but only because my house and car are paid for (which took years to achieve) It just depends on what you are already locked into. Yes you can tighten the belt but rent, mortgage, utilities and price of gas to get to work are not flexible. I presume you've always been frugal and have set yourself up with modest expenses.
@@curiouscat3384 You're right, I should've specified that for a single, frugal adult, $1,500/month is entirely feasible. That's how I lived when I made the comment but since then it's bumped up to $2,000/month because my income tripled. But that being said, I know a girl who lived off of an $18,000 annual 1099 income, no debt, who lived off of $1,000/month. She's incredibly frugal though, saving $6,000 out of the 18k.
I was thinking the same thing. I wish Dave had talked about the after-tax income. Where I live, the average cost of a 1 bedroom is $3,000!!! In all of Canada, it's around $1,800 (even in many smaller cities). So if he takes home $5,500, and pays $1,800 for rent, he's left with $3,700 per month. So he could probably pay $2,000 per month to rebuild his emergency fund, which is great - but it's a far cry from $4,000!
Why not wait the 4 months to pay it off and maintain a 30k-50k emergency fund for the time being? Not worth the risk of needing the cash to save only 4mos of interest.
Yeahh that's good way of looking at it and no risk
no no dont use all the savings..Use half for the debt and keep half in the bank..Then start saving again and put that money towards the debt..You need emergency money especially these days..
Yeah I couldn’t agree more..Dave drives me nuts with this concept. $1,000 is not enough in a moment of crisis not to mention even little things like your car breaking down, etc. Don’t drain almost everything you’ve saved just to be one of Dave’s minions that can say you’re debt free with nothing left over. If you have enough income and the loans are low interest just keep paying your payments and put large chunks down on it as you go.
Saving a couple thousand dollars on interest over the course of a few years isn’t going to make you wealthy lol
@@Jay-py1ow I love the minion thing..sounds about right..I also dont think everyone can eat beans and rice for months at a time or even deliver pizza..you know he went bankrupt and some people have too but does he ever mention that?..
@@mariejones7136 he preaches to the financially dumb people that have no discipline, never has advice for people like me and you..it can’t be a one size shoe fits all type of thing. And yeah exactly! He didn’t go into debt/bankrupt because of a little consumer debt, he went bankrupt because he took on 30-day short term loans that had to be paid off at once if defaulted, the most ridiculous decision I’ve ever heard lol..but he won’t talk about that part 🤣 I like some of his concepts but I swear half of his followers don’t even do their research or know this stuff.
@@Jay-py1ow I would have to agree with you....He wiped the slate clean by going bankrupt..he didnt eat beans and rice and deliver pizza or I dont think he did.some things are common sense..
This guy is killing it. Great job man.
The mindset Dave is trying to instill is to realize that 30k is savings isn’t truly Joshua’s money. If he is in debt, either future money earned or his 30k in savings is not his money.
That’s the mindset - when you owe someone money, the money you are making isn’t yours. Many of us like to think in separate terms of net worth and then keep debt in a separate bubble, but that leads us to unconsciously spend more than we have.
You can try variations of savings that work best for you, but always have an approach that goes toward aggressively paying off debt.
Took my years to grasp this concept! LoL Once I did I paid off my debt and now I pay my credit card bimonthly! Zero debt!!😊
That's a very very good point!
LOL or properly leverage it instead of only keeping $1,000 to your name in a moment of crisis..that’s not nearly enough. Are the majority of people really that financially dumb where they can’t handle their own finances?? It’s ridiculous.
Exactly.......mindset, focus, determination.
All of this!!!! You get it!
I'd keep 3-6 months of expenses (minimum) and apply the rest towards the debt. I'd rather be able to live worry-free for a few months instead of no debt.
No debt is worry free.
@@Faith-un7ns Not really when you still have monthly expenses like Insurance, property taxes (/rent), utilities, food, etc.
I'd prefer to have enough cash to cover living expenses for a few months and some debt, than to have only 1k and no debt (but still monthly expenses).
If something financially damaging happens to him after he drains his account, he will be hurting.
@@JayTarsia25 he sells mortgages. Nothing is going to happen in the next few months. I could see in the next couple of years but by then he should have triple of what he has now in the bank. People are still buying houses right now, he has nothing to worry about.
@@Faith-un7ns His specific company could fail. He could get fired. He could get sued. He could get ill. He could get hit by a car crossing the street. He could fall down stairs. Personal problems, etc. Dave's advice relies on the notion that his employment is guaranteed and no crazy expenses will pop up. I'm not willing to take that risk (I'm in a similar position as the caller here).
All I'm saying is it's better to have a few months worth of savings than to live paycheck to paycheck, even if you have some manageable debt.
Agree. I would create a plan to pay off the debt over 6 months. That protects him if something happens with the job. I understand where Dave is coming from by dropping the savings to 1k but it creates unnecessary risk.
Sometimes I find Dave's advice a little off. Maybe I'm too conservative and a little skeptical regarding cleaning up a savings account to pay off debt and then starting from scratch on creating the emergency fund... What if the guy goes ahead and pays off his debt and loses his job the next day? That's just something to think about... Sh*t happens...
If losing his job was a concern, why did he ever take out those loans in the first place? When someone gets a loan for a large purchase like a car, it's generally under the specific assumption that they are going to continue to have a job in order to be able to make the loan payments. This goes even more for student loans, which are taken out under the premise that the education they buy will allow you to *get* a good job. So, why would potentially losing your job suddenly become a concern when it comes to paying off those same loans early?
To put another way - as you said "Sh*t happens", and that is true. However, it goes both ways - that is another reason to avoid debt in the first place, which is why Dave teaches what he does..
Then he can sell his car and keep the full amount of what he sells it for.
I think draining your savings can be scary. If you are disciplined enough to not run up more debt then it's a good path to go.
In response to the title of the video, “Yes.” Call over.
Oh, get on beans and rice. Always beans and rice. Maybe, on special occasions, rice and beans.
HA!
@Sponge Bob Mr. Bob of Sponge, My dear sir. Sadly, I must inform you, that you would be incorrect. No matter the circumstances or situation, beans and rice is ALWAYS the answer. (Occasionally, rice and beans, BUT only occasionally) Cheerio.
😂
I add chicken to my beans and rice.
Must be brown rice, health is wealth.
Currently in this similar predicament. I have saved up $37k and my debt is $39112. Seeing all that money go is kinda weird but I just think of it as finally getting this debt out of my mind and living freely from here on out. This method is more unconventional to what the baby steps teach but no matter how you get there, just do it! It’s not how you start, it’s how you finish! 🤷🏾♂️✊🏾
God ALWAYS puts the videos I need to watch in my way. Thank you for the advice, Dave. Paying my car loan half off tomorrow. Little late for tonight to go to the bank!
And I thought Susan had to do something with the recommendations. It was God all along...
Congrats!! How much are you paying off? My interest loan is very bad. Have had the vehicle a year but it’s under MY name. I was offered a free car (denied) what’s your suggestion??
Or the youtube algorithm
Mentally, I get it. Emotionally it makes me sweat 😢.
Dave gives the same advice but it's a psychological component of comfort when Dave reenforces what you should do.
I just talked a coworker into taking $14,000 from his $20,000 he had in his savings to pay off his car. He was so against it at first but has thanked me a lot since then!
@@johndone8045 scammed him out of something risky?
@@johndone8045 why John... You're in the wrong place to get support on that
@@webfreakz John's a scammer
@@johndone8045 Paying of debt is a GUARANTEED return. No scam there -- unless you're an idiot.
@@webfreakz assumption: but I’m assuming John is referring to the early payoff penalty that a lot of loans have but this person like myself more than likely had a loan that doesn’t penalize you for paying off the car loan early
I’m wondering..if this caller does just that, and loses their job the following month (January) then what? Where do they go from there? 1k in savings, no job, and 6500 of debt. In this job market, getting a new job could take 3-6 months. Wouldn’t they have been better off keeping, say 10k, and paying 20k towards the debt, to have a bit of security in such unpredictable times
He is in Mortgage so I assume he is in sales which means he is probably a natural. He more than likely could make money selling shoes or about anything else you can think of.
@@bighands69 what if he wasn’t in Mortgage?
Why should he be worried about losing his job now? That clearly wasn't a concern when he decided to take out a car loan and student loans in the first place. He must feel that his job is secure because he was operating under the assumption that he would be able to make the monthly payments on the loans at the time he signed for them.
@@chrisstaub5880
Because losing a job now with little money to spare could be very risky. He can pay down the majority of his debt and in a few months have it completely cleared.
It is great to get out of debt quickly but a few month is quick if he puts his mind to it. And then he could be clear for wealth building.
He could do it now but also risk then being out of work for a few months and then have debt pile up again very rapidly. When you have no money for food you will use overdrafts or credit cards to buy the food.
I completely understand this guy. It’s hard to know you got that much in savings and need to throw it towards your debt but he will feel soooooo much better afterwards because he makes enough to build all that back up right after he is debtfree.
Yea but the bigger picture is he wont have Bill's, the money he taking in is all his he can re up quickly
He has a 6 figure job at one of the cheapest states. What's his problem?
He has "around 36,000 in debt. 9,000 of which is a car loan and 27,000 in student loans." it's right around 0:22 :)
🤣
@@jordanhoman0212 I wasn't being literal. Obviously you don't get sarcasm.
@@untouchable360x how ironic I think it’s you that can’t spot the sarcasm 🤣
Hey those houses in Phoenix are sky rocketing.... But they're still cheap.
Thanks for all you do Dave!
Use my saving to pay off debt is a necessary step toward building wealth. But as Dave mentioned, I’m in love with my Savings. 😕. I think about this ten times a day.
How much ya got in savings??
I like Dave's analogy that a savings while in debt is like a cushy seat on a sinking ship.
same same!!😂
Ya I had about 1 year left on my car payment, but had the money to pay it off, even though the car payment was at 0%, but the feeling of being debt free was WAY better so I paid it off early. Now things are just that much better later in life.
@Xray Paul I have a score over 800 and it's still over that long after I became debt free since I didn't cancel my cc...I'm good but while I wouldn't say you need a small debt, keeping a credit card open until you buy a house is better.
@Xray Paul Keep getting credit cards to increase your total credit limits, but don’t use them. You’ll have a high credit limit and 0% utilization. Credit score will shoot up.
I used to be ok with emptying savings to pay off debt until I just recently learned that unemployment insurance in my state will pay no more than $400/week which is essentially nothing. I had no idea the coverage was so low. Now I'll not take that risk if losing my job after paying down debt.
Smart, if you have cash, keep it, paying off bills and loans should be a low priority right now for most people.
@@YouSoundButtHurt
If he defaults on his loans it could bring him a lot of trouble. He may be unemployable in the financial sector.
If you actually are concerned enough about your job to be looking up the details on unemployment in the first place, Dave would say that you shouldn't be paying anything beyond the minimums on debt anyway and put every spare dollar into savings, until the situation changes and you feel more secure. This is exactly what he has suggested to anyone who has a reason to worry about potentially losing their job, beyond just a vague "what if?" hypothetical.
@@chrisstaub5880 I'm as concerned about losing my job as a healthy 25 year old would be going without health insurance. Odds are you won't have any major heath issues in a few years but it will be devastating if you aren't prepared.
@@bighands69 Brandon is out to get us all in trouble. Thanks
Or, keep your $30,000 security blanket and pay off your debt in nine months. Either way, in less than a year, you are at the same place. The only question is, do you want security during the first half of the process?
Yea, this guy is selling bullshit
In mortgage as a job, you could go from 8k a month to nothing in 1/2 a minute. Save all you can NOW
Mortgage as a job?
@@wewhoareabouttodiesaluteyo9303 He sounds like he is selling mortgages as a job.
With Brandon's help, we can all go to nothing..
Lol I kept telling my friend, Joshua (no lie), to pay off debt first with his huge savings account. I hope he will listen to Dave since he won’t listen to me.
What mortgage company is he with? I just graduated from ASU and declined a job offer from rocket mortgage but hearing your friend make $8k a month makes me think I should have taken the offer..
@@angeloflores551 He has a special 0% interest rate associated with his religious affiliation.
@@angeloflores551 what did you major in?
Good question! They should try to get out of debt as soon as possible but at the same time be carful enough to keep a safety plan
Only Dave Ramsey has the guts to say to a guy selling loans for living to pay off loan ASAP :)
Thank you I had some credit card debt and luckily some savings.. so paid off credit cards and currently doing the envelope system… we should be good soon!
"What do you do?"
"I'm in uh mortgage."
Cliff notes: have debt? Pay it off! The end.
better notes: dont get into debt in the first place
Wow... this sounds just like my life. I'm in mortgage, I'll make $330k+ gross this year, I have $40k in student loans for my MBA, and a I've got a car loan of $30k.
I've have $50k in cash and investments (not including IRA and 401k) but I don't want to pull from it because the student debt is in federal deferment and the car loan is 2%. I've used some money this year to get a new roof (State Farm discount) and some other items.
I agree with Dave's plan, but I just don't want to burn through the chunk in liquid savings.
Don't be "Davish," Steve. Go all in! You make a killer income. What other debts do you have? Do you have a mortgage? Depending on that, you could potentially pay off 100% of all of your debts and mortgage and rebuild your emergency fund within a year! At a minimum, you could completely pay off your student loans and car loan AND rebuild your $50k emergency fund within 2-3 months. Imagine how that would feel, bro!
@@brockb3692 Oh, I know. I'm a veteran and a mortgage banker. My mortgage rate might fall to 1.75% shortly if I elect to refinance. If that's the case, I may just keep the mortgage.
NO!
Debt is like going out to eat. Once your done with the meal, you still owe the bill.
You mean interest.
and you now where that meal ends up.......
Similar situation helped me too!
"Its only 4 months"-- in that 4 months he gets sick, goes to hospital and has to pay $30,000 in out of pocket medical bills ....
That’s living in the “what if” world. Chances are much more slim of that not happening.
Continuing to pay debts monthly is for sure cost. Medical bills are a maybe. Take care of the for sure cost first.
what about the Brandon out of pocket bills??????
He’s young, he’s presumably healthy, and likely had health insurance. He’s fine
My wife and I have $30,000 and she has student loan debt of $40,000 and we have one vehicle we owe $11,000 on. She works and makes 45,000 and I’m in school. Should we put all the money towards the student loan debt even though Dave says smallest first? The student loan has an absurd interest rate and the vehicle has very low interest. The student loan will grow by the hundreds where the vehicle is only hundreds. Thoughts anyone?
In part, that depends on exactly how many loans you actually have. You say "student loan" singular so that sounds like it's just one loan, but is there really just one or are you lumping together several individual loans?
The general point of the snowball, focusing on the smallest debt first, is about giving quick early wins to help provide additional motivation, by allowing you to cross some debts off the list early on so that you see progress being made. That's probably less of an issue if you have a total of only 2 debts. It really just depends on whether you need that early win to keep going.
On the other hand, if there are multiple student loans, keep in mind that Dave's plan is about sorting your debts smallest to largest by individual loan balance, not by type. So, each individual student loan would be listed. If that is the case, I would guess at least one of them is probably smaller than $11,000, so even strictly following Dave's plan you would be starting with at least some of the student loans first anyway.
As soon as I let my emergency fund slip to $1000, I’d have two major appliances break, the exhaust, rotors, and calipers go in my vehicle, and my furnace needing immediate replacement.
What if in 2 months he loses his job due to the pandemic or any other reason, now he has $1k to his name with no income. Seems pretty risky to me
Yeah during this pandemic losing your job is even more magnified than it normally is when we aren't in a pandemic. Dave won't deviate from his teachings though so you won't hear him say otherwise.
@@dp4kallday stubborn old man if you ask me lol
He won't have any payments tho. He has a college degree he can get a job.
My thoughts too
Would you leave a leach because you will bleed more pulling it off?
Not sure if anyone can give me advice in the comments on this but I’m 26, make 60k$ take home currently a year and have 9600$ in a car loan and a little under 25$k in student loans. My 31k$ high yield savings expires in October and I was debating on if I should roll it over or use some of it to pay off the car loan and student loan. The catch 21 with the student loans is that my company pays the minimum for me every month which covers my entire monthly payment owed so I owe nothing at the end of the month. I don’t plan on leaving my job anytime soon and it’s technically my longest line of credit since I didn’t open up an actual credit card til 2023. I def wanna pay off the car but I feel like I could just let my company pay my loans at least for now since it’s not really taking anything out of my paycheck and it’s a good write off. Only thing is I do get taxed the money that they pay toward it as if im making it from what i was told.
The amount of people that make six figures that calls Dave for help is ridiculous.
Yes. I make no where near this.
I need more people like me to call in.
I need to know how to knock out this student loan in what I am makong
@@songriver1232 $1000 emergency fund. Order the loans(debt), smallest to largest. Pay the minimum on the larger loans and attack the smallest loan until they are all dead. Rice and beans, take a 2nd job. You're not gonna see the inside of a restaurant unless you're working in one. Thats what it basically comes down to. Get intentional, give every dollar a name. Don't just work towards paying off your student loans, know when you're paying off your student loans. If every dollar has a name, then its just a simple mathematical calculation on how long it will take. Gazelle intensity, run like your life is in danger and don't stop running until you no longer have student loans/car notes/credit card debt. I've seen the full spectrum of salaries call into dave, thats what he would tell you.
@@thomassmith1719 i only have the student loan debt.
The median income in America is $60,000. One third of American income is in excess of $100,000.
America is the greatest and most successful country in the world.
@@bighands69 hahahahahahahahahahahahahahaha
i have 6550 left on my car i have 3000 in savings over 3000 in cd should i use that to pay off the debt or wait husband makes 1600 every 2 weeks
Question for y'all. By the end of this next July, I should have enough to pay all ,give or take 1k, of my students loans(18,300$). This leaves me with no savings though. I am still a student in Grad school but should start working full time that following month in August. I will have my teaching credential in math and a masters, bumping my salary to 60k my first year teaching. Should I pay my loans off now or wait until that job is guaranteed? From now until July, there shouldn't be any interest in the student loans.
See if Biden pays them off first then decide.
Thanks 😊
You're awesome, Sir ! I learn a lot from you.
@The Dave Ramsey Show Oh, thanks for the info but I'm currently debt-free !
I just enjoy listening to every piece of advice you offer even if it relates to problems I do not currently have.
One never knows !
he doesnt seem to have a problem at all...
Nope.
Thanks for this advice I needed it
I own 10k and a car loan instead off paying the cart off I put the money into a dividend stock and everything month I take the money from the investing account. Is that I good idea?
There was a rule of thumb said that t for every $10000 that you want to earn add the time it would take you to find a job by at least one month. It is a good way to estimate how big of an emergency fund you would really need. Note for some pay people who make above $70000 a year, they might not even be able to get 'low level' jobs due to being overqualified.
Please learn from my mistake. This year during the lockdowns I used my time to work harder and save more, resulting in 9500€ in 7 months. My total remaining debt (flat mortgage) is 37000€. Then I got GREEDY after the good results and wanted to speed up the process even more, so I chose to "safely " gamble and plan to double those savings. Needless to say, I am exactly where I was before the pandemic with 0€ saved and knowing all that hard work was for nothing really gets to me. Never do this. Slow and steady wins the race.
Sorry to hear that, it must have really hurt!! I had $10,000 in my emergency fund at the start of 2023, and had to spend it all this year when my father got sick. (Flights back and forth, 4 months off work with no pay, etc.) I'm down to almost $0 now. Don't get me wrong, I'd do it all over again in a heart beat. Spending that time with my dad was priceless, and I'm so grateful I had the emergency fund to cover my expenses. But it really does sting to have nothing in there now. I hope you've been able to build up your savings again over the past 2 years. I'll start rebuilding mine next month!
@deborahblackvideoediting8697 I wish you luck and good health. Money will come, and I'm sure you will rebuild your emergency fund soon. I haven't gambled since then, but I still feel very stupid for doing it in the first place. In the meantime, I've saved up just enough money to completely pay off that rental property. Still, I'm going to wait on it because I can't afford to be on zero.
@@dex0n92 - One thing to keep in mind is that we all make mistakes - but some people learn from their mistakes, while other repeat them over and over. I hope that you can give yourself credit for choosing to learn from your mistake. Not everyone does that! I wish you all the best. :)
I love the advice, but maybe, with inflation, baby step #1 should be $2000...
Thanks Brandon. But..hey...with the new reduction bill they just passed...im sure everything will be ok....
Honestly I would pay the car off today and save up about 10k in a couple months then pay off student loans
25 years ago, I drained my bank account down to $2000 to pay off my mortgage. $1000 was bit too risky for me and $2000 was worth a lot more 25 years ago. The reason I took the gamble is because I was single and my parent's were comfortable. They would help me out if an emergency happened. However, it did make feel a bit vulnerable. Fortunately, no emergency happened. My expenses significantly reduced and my income kept rising. My bank account quickly recovered.
How should i approach this: 1200$ in savings, 1350$ in TFSA that gives me good return on investment(more than 20%), 13000$ car loan debt(only 1.49%interest), about another 20000$ 0% interest loan(girlfriend and dad...) I have extra 1268$/months(with an income of 3276$ after taxes) to put towards loan, savings etc. What should i do? Minimum payments for car loan is 368$/month. No credit car debt that i don't pay every months thanks to girlfriend(got in debt with girlfriend because we wanted a house so she provided most of the cash down) and dad(helped me with credit card debt in january 2020). I figured that i'll be debt free in 3 years... It's so long...
Thank you
Why not save 6 months of expenses first then attack the debt? What happens if someone loses their job and have 1k? What will 1k do for them?
I have had that happen. You will have to call on dad. lol
I think the rule of thumb for the babysteps is that you have to be employed while doing them.
@@wewhoareabouttodiesaluteyo9303
You have to have an income of sorts. The issue is does he need to pay the whole debt of right away or start tackling it over time?
@@bighands69 It should not matter what you do. If you have income coming in, it would be wise to just pay off everything in lump sums and be debt free. You can also choose to tackle it over time, but the catch is that you are paying interest that will both take longer to pay off and will be a waste in terms of the hours you put in to make it.
Be honorable! Have Some backbone and pay that debt off since you obviously have the funds
if you already have a bunch of savings you might not feel that you really need to pay off the debt. That's part of the reason that the starter emergency fund is so small - you are supposed to be a bit uncomfortable so that you are motivated to pay off your debt faster.
Just do what Dave said....you will feel free!!! I’m almost debt free....just paid off my credit cards....now I’m on my car loan...almost there 🙌🏾🙌🏾🙌🏾
Go girl you can do it 👌👌
@@anaa03899 thank you 💪🏾
im tryin to be like u! paid off 2/3 of my credit cards. Need to pay off $2,700 on my bestbuy cc then ill start paying off my car loan next lol
You also look very cute
@@adrian3747_ you got this 🙌🏾🙌🏾
The guy makes $8k a month, pre tax. He needs to put money aside for taxes Dave. Am I missing something... 🤔
Yes. Exactly. How is he going to save 5000 when he makes 8000 pretax. Is Dave assuming he’s going to live off of 1000 dollars?
Ohh it's simple. Don't pay the tax.
I thought Dave said save $4k a month. Keep in mind he won’t have the car payment anymore (whatever that was) and won’t have the student loan payment either. Roughly gives him $2k a month to live on after taxes.
If my savings interest rate is 3.2% and student debt interest is 1.8%. Why would I pay off my student loan?
What if you have emergency above $1000 what do you do then
Love you dave...but no way I'm leaving my savings at 1000. I've paid off 10k in debt and put 5k in savings...I've got roughly 15k in debt to go. 10k of which is a car note...I estimate that throwing 1.5k a month at it were clear in 10 months. 1k is nothing these days..I just had to pay $300 to fix my AC that hurt.
Everything the average person has will be nothing soon. Thanks Brandon!!!!!!
Just paid off my 3 smallest debts. Just the American Express to go. Should be done by the start of next month. Then it's ramp up tge savings and pay off the house.
Feeling good and about to have a celebration (home made) coffee!
I am very happy that whatever youtube algorithm was in place threw up the baby steps.
It is hard to part ways with hard earned savings that took so much time to store up. Makes you feel insecure because it's nice knowing you have that money in the bank.
I'm about to be in the same boat very soon.. I realize that paying off debt fast as possible is the best thing.. but how to I make it easier to let go of years of savings? (about 12-15k I've been saving since my first job in 2017).
@William Fitzhugh
I would suggest attacking the debt hard but also keeping a large proportion of savings for a rainy day and do not take on more debt.
One way to look at it is that it isn't really your money. When talking to one caller who said she didn't want to put all her money towards debt, Dave said, "You've already spent it. You're just admitting it when you pay off the debt."
@@bighands69 Rainy day? Ya mean ever since Brandon appeared......
@@peartfaldo
Nope that is not what I meant.
That’s how to get rid of debt. Use up ALL of your money. 😂.
$8k after taxes and deductions might be $6k a month. It could take a little longer based on his monthly living expenses like rent, food, utilities, but its definitely doable 👍
why am i scared to start? I am a compulsive debtor and i need help. Dave Ramsey's plan makes sense and I am ready to start but still scared? of what I don't know?
Don’t be scared. Just do it. You won’t regret it. As that debt goes down you will feel so much lighter. Just close any accounts you pay off.
Your problems are not debt. Your problem is self control and impulses. You need to start structuring you life and personality towards a new foundation.
Leslie, some people cannot handle prosperity.
Man I love dave
Draining your savings during a pandemic? Ummmm....ok.
What pandemic?
I work here at a hospital in NYC.. it’s all lies I am so busy that I am sitting here watching RUclips videos !! Why don’t you think they interview us? Or test us all the time? ! It’s a joke over here
He’s got a job that isn’t effected by the pandemic. So yes.
@@thetruth5635 yeah ok bro, work as a janitor in the hospital maybe
@@ThiccBoi23 and don’t dis the janitors they work hard and probably make more then you
Question. Why not live with zero life and put everything not going towards monthly Bills into the savings instead of all the rest? Or did I miss that?
He aint gonna do it😂
The more I listen to Dave the more I think debt is the worse thing someone can do , it’s really
Not . Like what happens if he pays off his debt, has no savings and then something happens like his car breaks down and needs money to repair it .
Keeping only $1000 in savings is dangerous to me. What if your car breaks down? What if you lose your job? What if you have a medical emergency? I have 10k in savings and that kind of barely makes me feel secure enough.
Love it! 🙌🏾
I don't get why people are reluctant to use "savings" to pay off money they already spent.
If he had no debt and no savings would he borrow $30,000 and put it in a 1% savings account?
Why is American Express showing ads under Dave Ramsey videos lol
I have similar situation, 23 yrs old 40k in student loans and have 42k saved up in a year and a half. Part of me wants to write a 40k check but it seems devastating. Student loan forbearance has helped a lot.
One possible viewpoint: justify those student loans by paying them off immediately. If they were really worth taking out, then the education they paid for should be sufficient to provide you with a job that allows you to build up those savings again in no time.
Pay. Off. Debt. It's really that easy.
I would pay off the car for 9k, pay off 10k worth of student loan debt, put 6k into gold, silver, and cryptocurrency, keep $5k in savings. Pay off your remaining student loan debt within the next 6-8 months with your solid income. Please understand that we are seeing inflation (money printing and devaluing) like never before so having hard assets are one of the smartest things you can hold right now. The dollar is dying, and Ramsey is in love with the dollar.
I read the title and screamed YES YES YES
I have such a hard time letting go of my savings.
why are the callers surprised to be told, "write a check and be out of debt?"
Interesting
In a normal year, this would be ok advice. However, with the Virus looming and shutdowns coming, this is not good advice. Pay off the car yes, if you are going to keep it. You may need to survive another 3-12 months with NO income. I would pay off the car and then use my salary to pay off the Student loans while keeping my emergency fund. Sorry I need to know I can eat if I lose my job. I know Dave has to stick to his one size fits all advice, but I just think it would be stupid to pay off debt and only have 1000 dollars when a shutdown is coming.
He has $30000 in his savings but what about his checkings?
Prolly nothing lol
Checking is savings. There's not really "savings" accounts anymore.
If you have debts, than those savingns arent really yours.
Hey dave thanks for everything you do brother everyday!! We are debt free except for our recently refinanced $159,000 mortgage down to a 15 year at 2.3 % no points in northern California were doing ok with a $20,000 emergency fund our kids owe us $14,000 which I'm confident they will pay back. I pray it all works out sorry for not doing your rules 100% but were getting there everyone 8n my family in my house knows about you but the mentality of my children won't allow them to follow your guidance all the way unfortunately my marriage if 28 years is hanging by a thread.
Dave always forgets federal and state income tax. Single in Arizona is 4.17% at his income. His effective federal tax rate is probably around 20%. Now, all of a sudden, the $8000 is $6000. Then Dave ends it with saying he's going to sock away $5000 per month. So he's going to live on $1000 per month to pay rent and all his bills, insurance, food, utilities, etc? C'mon Dave. Geez.
Agree
I think Dave understands the taxes, but yeah I wish he would personalize that more, especially for single people. Single taxpayers making $80k - $100k will probably have effective tax rates of about 20% - 25%. Married taxpayers will not pay anywhere near that amount, especially if they have children, will all off the goodies and deductions married couples get. Their tax rate would be closer to 5% - 10%.
Yea just pay that debt off. $5k a month for 6 months and he'll have his savings back.
I would pay off the car then work on the student loan debt over a year. I would also be putting 15% towards retirement. Good job saving 30K
@The Dave Ramsey Show First tell me what baby step is he on?
If you have that kind of money just pay of the car, then maybe put half the rest on student loan then knock the rest out in about 5-6 months same basic plan but you have $10k in the bank in case stuff happens.
Majority of the callers are in baby step 2
Whats his career again? I didn't understand
I would just pay off the car loan of 9k, then save up until I’m at least 3k over my student loan debt and just make a big lump sum payment. Student loan debt is at 0% interest all the way till beginning of February. He’s fine.
Am I the only one who thinks rice and beans (or lentils) for breakfast, lunch, and dinner aren't bad at all? Whenever I went to my dad's house, even though he made 50/hr (50-70 hours a week), he still ate beans and rice. He had some homemade hot sauce to mix it up a bit, but it was so good. Why have anything else? I mean, you'll want some salad and fruits a couple times a week (should be every day, but if you are on a budget...), but rice and beans are completely fine.