Impose Your Will on Your Money With a Budget!
2024-06-27 01:57:45
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create actual, amazing relationships. Number one best-selling author, Ramsey Personality, co-host of The Smart Money Happy Hour, Rachel Cruz My daughter is my co-host today. Open phones The phone number is 888-825-5225, the call is free. And some say the advice is worth exactly what you pay for it. Phil is with us to start this hour in Fort Wayne, Indiana.
I got a problem with my deal in here. Just bring it up, bring up Phil for me.
Hey Phil, how are you?
I'm fantastic. How are you guys? can you hear me?
Better than I deserve. What's up?
Well, Dave, my wife and I are having what we believe to be a financial meltdown. We need some help, we need some advice.
We're tired of owing people money, we want to get out of debt ASAP. And frankly, the arguments and the stress is making it hard to sleep at night. We're on the verge of divorce due to this.
Wow, how much debt have you got?
I can go through it quickly. I've got $38k in a personal loan that's rollover from credit card debt, $29k in a car loan. Of course, that's upside down. $28k student loan, $12k in consumer debt, and $8k in another car loan. The daughter's car loan. And then we got the house, we owe $150k on the house. If we sold it today, it'd be worth $250k, $270k it would sell for.
Have you got a beeping in the background at your place, or is that a technical thing on my end?
That's us, that's us, Dave.
Oh, it is okay. Yep, alright, thanks. My brain's about to be fried over this.
Okay, sorry. So what's your household income?
Oh, no, did we lose him?
No, we lost him.
We're breaking down.
Yeah, it's all falling apart.
Hopefully we'll get him back up because that's it was a lot, a lot of numbers, and we're finding continually. It's a consistent issue of money becoming such a major part of people's marriage issues. I mean, this is a thing that has continued to be an issue. Can you concentrate?
No, I can't, but that's okay, You're right, I think we're getting Phil back now.
We're getting it, we're getting it.
Okay.
Phil, we will have you on, I promise.
We're going to try to help you here buddy. Okay, are you back, Phil?
I'm here.
Sorry about that.
I'm sorry about that, guys.
No, that's okay, we blew a fuse over here somewhere. But anyway, so you guys are, how long have you been married?
18 years this year.
Yeah, and what did you say? Your household income is, sir?
Together, we're grossed in $174.
Okay, so why are you not able to pay these bills with $174?
They look payable to me.
And when we actually sit down and look at it, I agree 100, but frankly, we have never sat down and truly have done a budget.
Okay, and if we're fighting over money all the time, why would we not do that then?
Just a communication issue.
I mean, if you sat down with your wife tonight and said, Honey, look. We have to map our way through this in a way that we can agree to, so we don't kill each other. And we make enough money to pay these bills. We just need to get aligned on how to do it. Would you sit down here and help me write this out and us be in agreement and neither one of us raise our voice? Could you not do that?
We're getting there.
No, I'm talking about tonight, why couldn't you do that tonight?
Does she know about all these numbers? Phil? Does she know the amount of debt she does? Okay?
Absolutely.
So what's the stick, what's the fly in the ointment?
I think it's just a fear of buckling down and actually handling it, I think, on both of our parts.
Okay, and you said your daughter carried, so you have a teenage daughter you don't want to tell no to.
That's difficult to do, yes, the other part is she just got accepted to a local private college, both for academics and athletics. That's scaring me to death also.
Are you supposed to pay for it after she got accepted?
That is a correct statement, yes.
Well, I don't care, I can't afford it, honey, unless we figure this out. So one thing you figured out already, I figured out in 35 seconds. Talking to you is your teenage daughter has a vote in this and she shouldn't.
It's not her money.
You're not saying no to her either, one of you, this kid needs to hear no, it's part of what's causing your problem now. I'm not saying you're going to have to say she can't go to that college, or you have to sell her car, but you might have to say both.
You make $174,000 a year, you make plenty of money to pay these bills.
Agreed 100. And we're not behind on anything by any means. I'm tired of making the minimum payments. I want to get these things paid off.
Yeah, absolutely, and you're out of control, y'all just spend and spend and spend and spend with no plan, because nobody hears the word no in your place. And so the grown-ups in the place are going to have to circle the wagons, you and your wife and say, all right. As grown-ups, we're going to do what's best for this family in the long term.
Which means, in the short term, we're going to say no to some things. To ourselves and to all the non-grown-ups in the family who don't get a vote.
I understand is that old-school dinosaur stuff, or what?
I like it.
I mean, that's really what you're going to have to do. So, one of the things, Sharon and I did, Sharon and I said this. When we were fighting like crazy, we were going bankrupt, losing everything. Rachel was a brand-new baby and we said, All right. If we ran a business and it was our job to handle money for that business, to be the CFO of that company, the chief financial officer of that company. We would get fired for incompetence.
You would lose your job, Phil, if that was your job. Y'all suck at this. Oh, I agree, and so we said that to ourselves too, so I can say that to you.
I mean, I'm not picking on you, I'm agreeing with you on this stance. But we kind of said we got to get above this and treat it like, we want to keep our job because God gave us the job of running this household, and we're not doing it, we're incompetent.
We're not doing a good job of that. And so we're now going to become professional money managers of this house. And we're going to tell our money what to do. Instead of wondering why we're sitting here, stressed making $174,000. And if you and your wife can get into agreement on that type, then you can go anywhere you need to go from there. Does that make sense?
Yes, sir.
Yeah, well, and I was going to say, too, Phil, that when you said earlier. How we can't sit down and just have a conversation because we can't even like, communicate about this. Because there is so much fear, there is so much heightened emotion. And I think what's going to start to come to the surface. As you guys dig into these numbers is you're actually going to see a lot of. Oh my gosh. We've broken down in communication on a lot of life, not probably just this situation and what we do find. Which I hope gives you hope is that for so many people that walk a journey, that choose to really be intentional about a part of their life. And we're in the world of money, so this is what we hear all the time is we're going to work on this money problem together. And then suddenly you start to realize, Oh my gosh, a lot of our marriage problems, it's not that they're being solved, but they're coming up to the surface.
And because we're able to communicate well and on the same plan on one area of our marriage. Like money, all these other areas seem to start to have a commonality and that unity starts to be built. So it's kind of the chicken or the egg of, like, marriage stuff and money, but this money stuff. If you guys can choose to get on the same page, it actually can be the thing to help improve your marriage. Because you're going to work as a team for maybe the first time in a long time.
If you can get aligned on your spending, you've aligned yourself on your value system. Your fears, your dreams all come into line. A budget can actually be used to heal a marriage. it actually is used all the time, marriage counselors do it.
So I got great hope for you guys, hang on, we'll get you into FPU.
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Rachel Cruz Ramsey Personality is my co-host today. The Bible says no discipline seems pleasant at the time, but it yields a harvest of righteousness. The way we say it around here is if you'll live like no one else, later, you can live and give like no one else. I met a couple at the break, Rachel and I were out having pictures.
I said, 14 years ago we got out of debt and I said, Well, you have to be a baby steps millionaire. And he goes, Oh yeah, definitely. So that's what happens. There's a live like no one else, so later you can live and give like no one else.
If you are on baby step four and beyond, which means you are out of debt, have your emergency fund in place. And you're now working on investing and paying off your house and your kids, college and that kind of stuff. Now you're in the investing phase of your financial plan. And our baby steps. Now you can go on vacation, but until then, you should not be on vacation. You should be getting out of debt, and you should be building your emergency fund. Baby steps one through three.
But if you're four and beyond, we want to offer you the live like no one else. Cruise seven days in the Caribbean, Holland, America, and this is the nice cruise ship line, not the cheapo. This is the good one.
This is a fairly new ship, almost brand new. And it's all the Ramsey personalities, plus a bunch of country music and Christian music folk on there. With us. We're going to be doing all kinds of special events. No one will be on the ship except Ramsey people, all of them will be living like no one else.
So if you want to celebrate your milestone of reaching that, Turks and Caicos, St. Thomas, Puerto Rico and the Bahamas might be a good place to do that. March 22 through 29 of the year 2025, so about 10 months, 11 months from now, we'll be going. There are just a few cabins left.
You can still go, though we want you to go. You can put down only a $600 deposit. Secure your cabin before they are gone. We are selling out rather rapidly and you can get a cabin, though.
You need to get on the phone, you need to get on the website and start talking about it right now. This is the ultimate debt-free celebration. It includes Steve and Curtis Chapman.
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We will all be on there the entire seven days with you, so come out, hang out with us, it's going to be awesome. Ramseysolutions.com Slash cruise. You don't want to miss this.
It's going to be incredible. All right, I want to circle back to Phil's call and the concept. For a second, families make $174,000. They've got the money to pay their bills, but they're out of control. So we have seen for years going through Financial Peace university, learning to be on a budget together. You mentioned it to him has healed many.
A marriage because it forces you to negotiate every part of your life, because money flows in and out of almost every part of your life. You know, are we going to give to church, are we going to save for kids college? are we going to have the kids in a private school? All these questions have money attached to them, and they all represent something you care about, your values.
And when you can get aligned on your values, when you can agree on your spending, you're agreeing on your fears, your dreams, you're agreeing on your problems. You're even agreeing, eventually, on the order on which to attack the problems and decide if the kid goes to the private school, the kid wants to, and the kid keeps the car that has an $8,000 loan on it or not. Now, how do you get to Phil's place? It's where most people are, they're out of control and chaotic. And any system, including a family and the operation of a family, is a system, believe it or not.
It is science more than it is art.
Any system left to itself without an outside force holding it in place, deteriorates and becomes chaotic. Families that don't plan to do things ever. Eventually, it catches up with them, the chaos takes over. And that could be in the money section it could be on. You know, we're not planning for college.
We're not planning for retirement, we're not planning to buy the next car, we're not planning anything. And it always surprises you then when Christmas is here in December. And so what this does is it forces a family to impose its will.
It forces the husband and wife together to agree on and impose their will on the chaos and force it into order. That's what budgeting does, and it forces you to discuss the things where you are not aligned. And that's why I give great hope for Phil, because he was answering, He's over it.
He's ready to fix this.
Sure.
He's ready to say no to himself, to his wife, to his daughter.
Yep.
And impose our will on this broken mess. And so, folks, I want to tell you, I don't care how broke you are, I don't care how out of control or stuck you feel. You can impose your will on the system using a budget, just start writing it out.
Sharon and I would just write out a list of debts that we had. We wrote out a list of goals that we have and then we put those in order. Which thing would we do? If we had some money, what would we do?
First, we dreamed again after we went broke. And we had yellow pads full of dreams. Yellow pads full of goals, yellow pads full of debts and problems, and yellow pads full of a budget. And those things, eventually, as we imposed our will on that system, eventually became our life. And it's what we've been teaching you guys now for 30 years.
That's how you run it, yeah. And I wonder, too, the caution when it comes to even making that first step of imposing your will and just doing a budget. Because I think it takes either a moment in time of a crisis, kind of where he was at, and we call it your I've had it moment, I've had it, I'm done.
It's either that, or it's just this big humility pill that you have to swallow to say. What I've done obviously isn't working, and I think that's hard for anyone to admit, right? Like, a part of your life that's falling apart, realizing that you've done that, like, there's a level of self-acceptance there. Oh yeah.
That can be so hard.
Oh, it's very hard.
And I think those are the barriers. But when you push through those emotions and you actually sit down and do it, the change occurs, you start to actually start walking it out. But even that first step for people, emotionally, can be very difficult.
The weird thing is, you change when you have a crisis, but you can create the crisis.
Yeah.
In his case, the crisis is coming from the outside. It's a marriage problem and everything's blowing up and there's tension in the home. But I've had two debt-free screamers this week, who I asked them what their I've had it moment where you finally just go, that's it.
I've had it.
And in both of those two cases, they said, I was disgusted that we make this much and we're this broke. That's a created crisis you're not about to be foreclosed on, but you look up and you go. We make too much money, we work too hard to have freaking nothing.
I've had it.
And you can just reach that down inside, and when you do that, that's when the switch flips. That's when you say, okay. I don't care what the teenager thinks, I don't care what your mother-in-law thinks, I don't care what the neighbor thinks.
I don't care what anybody thinks we're fixing this crap. And when you do that now, you're imposing your will on the chaotic life, and you will bring order to it. And it's your only hope of not believing your whole life broke.
So good, it's so true it is, and the other element of that that I think is difficult is that change it is.
It's embracing something new, and that's one thing. I just did a video on my show right before this show and just talking about just the simplicity of the baby steps. So you can list out seven, right?
There's seven. But the order of that brings order to people's lives, too. That's one reason I think that this plan, out of majority of financial people out there, is the most successful financially. Because in order to have change, you need to have a plan that you have confidence in, and there's a level of submitting to that that this works.
So even if you're listening to this and you're new to it, just having confidence in, okay, I'm going to have change. And submit to a plan, create, order. Everything that you're saying, but you're doing it to a system that works and that's been proven. Which is the confidence that we get to bring every day on the show, which is great.
And that comes into almost anything. I mean, why would you push down on the accelerator if you didn't have confidence that the car was going to go forward? And if it doesn't go forward, then people just stomp on it because you're surprised that it doesn't go forward, right? Why would you push down on the brake if you didn't think the car was going to stop? You have confidence in the system.
And you know, that's why a lot of people fail at something like a diet, because they try it for a little bit and they don't get any result. And so they lose confidence to your point in the system, and they bail, and so they stick with it like a whole 45 minutes or something. And you know, I will freely admit that I have no confidence in Kale for anything.
Actually, I read a thing that it's actually not that good for you.
I have a lot of confidence in donut avoidance. Donut avoidance has worked real well for me, although my life is lesser for it. This is the Ramsey show.
This show is sponsored by BetterHelp. Hey, good folks, it's Deloney. And with back-to-school madness on deck, my family's schedule is already so packed. And we haven't even made room for things like exercise and date nights and counseling and all the other things that make our life even worth living. When it comes to taking care of me, I have to remember to put on my oxygen mask first, meaning I have to do the things that help me stay well and whole.
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We appreciate it. Open phones here at 888-825-5225. Logan is in Chicago. Hi Logan, what's up?
Hi Dave, thank you for taking my call.
I'm in a big pickle right now. I just lost my job and I have a lot of debt that I don't know how I'm going to pay that off.
That's scary.
Yeah.
How old are you?
I'm 19.
Whoa, you're on your own.
No, I still live with my parents, but I made some pretty terrible decisions in the last couple of years.
Okay, what kind of debt have you got, sir?
I have a car loan about $24,000 and then I have about $5,500 worth of credit card debt that I still don't know how I'm going to pay this stuff off.
So what happened to lose your job? Tell me about it.
So I came into work and then they told me that they didn't need me, and then he just basically just relieved me from my job. And then that was Tuesday.
What were you doing?
I was a manager at a travel stop, I was in charge of supervising employees, doing paperwork, things like that.
So they do need the job done. They fired you, why'd they fire you?
They told me it was because of performance and they found somebody better suited for the job.
Okay.
Anything about that that you learn?
What's your takeaway from that?
To be honest, I don't even know.
You felt like you were performing.
Yeah, okay, I just don't know what happened, it was just confusing to me.
Yeah, what were you making?
I was making around $40,000 a year.
Okay.
How are your parents doing with you being there and job loss and everything? How's your relationship?
They're good for the most part.
It's just trying to find another job before I lose my car or anything like that.
So you owe $24,000 on the car. Have you looked up what it's worth?
Yeah, the car's worth $18,000. The last time I checked on Kelley Blue Book.
And who do you owe the money to? Who's the 24 with?
It's a Kia finance company.
So it's a high interest rate, yeah, what's your interest rate?
I wouldn't say it's high, I think it's 8 the last time I checked.
Is this a local finance company?
I don't know.
They have a branch near you.
They do not.
Okay, so you just bought this from a dealer and they stuck you in this crummy loan, yeah.
Yeah.
Okay, because you're a 19-year-old and they screwed you. okay, and you bought a car you shouldn't have bought, you know that, right?
Yeah.
Yeah, okay, all right, okay. So how's the job hunt going?
I'm really not getting anywhere that I would have hoped.
It just isn't going anywhere for me, I just don't know what to do.
Okay, all right. Does Uber have a 21-year limit?
Yeah, I know for sure Uber does.
Does doordash?
No.
Might as well run the wheels off this $24,000 car and go make you some money.
Listen, come Friday night and Saturday night, your butt's working, you're not partying.
Okay, okay, yeah.
Period, you haven't got any money to socialize, and you don't have any time to socialize. Because you're broke and you're calling me afraid, so you can't go hide that fear in a party. You got to go get her done, you got to go leave the cave, kill something and drag it home.
You can do it, I know you can, and your performance this time is going to directly cause your income to go up. So I'm going to dash doors and I'm going to talk to three pizza places before nightfall today, the three neighborhood pizza places.
Regardless if they're a chain, a known franchise or a local, and ask them if you can deliver pizzas for them.
Today, I want you standing in their lobby. I don't want you on the phone, I don't want you on their website, and I certainly don't want you texting or some stupid butt email.
I want you standing in the lobby with your beautiful smile and your hair combed, and you go get some jobs.
Okay.
You can do that, can't you?
I know I can do it.
Yeah, I mean, you got, you got three or four hours before they, before dinner time.
And Logan, we just talked about this in the last segment, about how there takes humility to step into something new, and I'll say this, Logan. I would think, as a 19 year old guy, you went and got a salary job, 40 grand a year. You're kind of like, this is awesome, and then you're like, No, I door dashing and pizza delivery was not what I'm supposed to do. My next step is supposed to be even better than where I was at.
But I think it's during this time you're back to like, four or five side hustles put together throughout the week and work in seven days a week. Until you land, until you land the good job.
So I'm not saying, that's right, good point.
Yeah, so just keep applying. But Logan, this is going to be. It's kind of a hit to the ego to be like, I'm a, you know, I'm delivering pizzas. When I thought I was going to be having an, you know, some corporate job or whatever, you were thinking, you were going to be doing so again.
I want you doing anything that's honorable to make money till you get a good job, yeah.
Yeah.
Yeah, here's what, here's what happens. Okay, let me let me lead, tell you why. I'm telling you to do this, because when you're broke and scared and terrified, I can hear it in your voice.
And so can everyone listening right now. And when you go into a job interview, you sound desperate, you walk desperate, you, you scream desperation, and they're not going to hire you. But if you've got cash stacked from Doordash and pizza, your car payment is there, and you got $2,000 in the bank until you get into the job.
Now you swagger into the interview and your confidence is good, not cocky, but you're, you're, you're not. You're not screaming desperation and terror in the interview because an interviewer can smell this. You follow me.
Yeah.
And I'm trying to get that stink off of you so you can go win. And the way you do that, you get a little bit of margin between you and the wolf that's barking up your butt. Right now, you're getting your butt chewed off by that car payment, thinking you're great, you're thinking I'm going to get repoed, trying to keep from losing the car. I heard you say it and I don't blame you.
I, I appreciate that, fear that, but let that fear be a motivator. Your first step is stack some cash to change the way you walk and talk in an interview, and then your next step. I'm going to send you Ken Coleman's book Proximity Principle and the Get Clear and the Get Clear assessment. Good, Rachel, and we'll do that in the and I want you to take all of that stuff for your longterm career goals.
And I want you to read everything on Ken Coleman.
Com on his website about how to get and land a job and go get that and solve this.
And then learn from this process to never be in this situation again. Oh, and by the way, when we get to the other side of this. You need to have $6,000 so you can sell a stupid butt car and pay it off and get rid of it and get you a $5,000 car. Like a 19 year old should be driving this broke, or that anybody should be driving this broke. This is the Ramsey show.
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Rachel Cruz Ramsey personality is my cohost. I have been in a position financially where I was terrified and I did not know what the next thing to do was. And that's how we ended up doing this show to help people who are in that situation, whether they're 19 or whether they're 59..
I will tell you the thing that I was telling that last caller, our 19 year old friend there. And that when you encounter fear, not if you encounter fear, but when you encounter fear on something, I guess there are several possible reactions, but two come to mind right now. One is you go into fight or flight. You either are going to attack and do something active, or you're going to freeze. Like a deer in the headlights, and for those of you who have heard the saying deer in the headlights, we live in Tennessee. Literally, when a deer is caught in the headlights, they freeze. And the stupid animal will stand there and destroy your car.
And their life?
And their life in the process. And so, by the way, Bambi will total a car, I'm just saying, because they freeze.
So those are three things fight flight.
And freeze flight is freeze. I mean, it's the same category, I mean.
It's forward or backward.
So what I have discovered, though, especially on financial things like losing your job, as an example. Or just waking up one day and going, Oh, we're about to be repoed because we're so freaking out of control here. Or we're about to lose our home. Or we're going to retire and have to eat alpo or whatever it is. You discover that's on your doorstep, that scares the P P wadden out of you. So if you're in that situation, I have always found that the best reaction is not flight and not freeze.
It is attack.
And everyone wants to get all analytical while you're in the middle of this, and that's a form of freezing. And George Patton said it beautifully. He said. A good plan, violently executed now, is better than a perfect plan executed next week. So when you're in that situation, square your shoulders, lean into it and get after it.
Even if what you're doing is not perfect, like you're doing things you don't want to do in terms of. I don't want to be in a career where I'm door dashing for the. You know, when I'm 35 years old, at starting at 19, right? You know, that's something you don't want to do. But, uh, I've done a whole lot of things in the name of activity, because activity solves these things more than the freeze does or the flight. You can't run away from it, it'll chase you down, and you can't freeze and stand in the road, you'll get run over.
So you've got to go into attack mode. Even if the plan is imperfect, and, trust me, you're terrified, your plan will be imperfect. But the other two are are a death nail. You've got to get it, you've got to lean into it and get it. And when you look back later, that sheer activity will change your your neural pathways.
It will change your attitude, uh, it will change your spirit. uh, I'm feeling blue and depressed. One answer for that, not the answer, not, it's not a psychological. Dr. John Deloney might not agree, but want to answer for that as activity.
Exercise is always a company with solving depression.
Yeah, that's what I'm going to say. That's why they say, like, if there's a, if there's a major anxiety, go for a walk, like, go out, so like, move your body. No, I think that that is sunshine.
Yeah.
I mean.
There's sunshine and exercise. Hello.
But from the financial aspect, that is just go get a job, the version of the 19 year old, do something, do it.
Do something sitting and saying, Oh, this is bad, I don't know what happened and I'm going to you. Just you're standing like the deer in the headlights then and so, and it's. It's not because someone has a lack of character.
It's because we, we, uh.
You're paralyzed.
Well, fear, fear, you're going to deal with the fear, you just got to decide on purpose how to deal with. It is what I'm suggesting, because it's going to come, you're going to be in those situations. Nick is with us in Knoxville.
Hi Nick, how are you?
Hey good, how are you, Dave?
Better than I deserve. What's up?
Well, I'm wondering if it was the right time to purchase a home. I am on baby step four, um, currently debt free after being in almost $50,000 of debt. So on the right track there, but I'm not sure if it was the right decision to purchase a home right now.
Right time, in what regard in in the economy or in your life in the economy?
I mean, I'm not, I'm not, I'm not, I'm not.
I'm not in my life.
Um, and was it or is it? I mean, did you already purchase it?
I did purchase it.
You did okay.
Yep, you're in baby step four, so you're debt free and you have your emergency fund in place. That is the time we would tell you to do it in terms of.
Was it too much, House, Nick? was it too much? Are you? Are you stressed about the payment? is how you're calling, or you're just curious?
Um, I'm kind of wondering if it's, uh, the amount that I owe, um, and it freaked me out a little bit. I've never been in this much of debt. uh. The mortgage is 236,000, I make about 90 a year.
Um, I'm based salary and commission, so that's roughly what I'll make this year. Um, and I sold, I sold some land that worth about $120,000, um, so I could use that as a down payment.
So your mortgage is two 30 or your purchase price was two 30?
Mortgage is two 30.
I put down 60..
60.
What'd you do with the rest of it?
Oh, I haven't saved away right now. Um, I'll have to pay taxes on some of it because it was, uh, okay.
And you have to have an emergency fund.
Correct.
Okay, and that that used up, that used up the other 60..
Correct.
Okay, okay, that makes sense. How old are you?
And then 30 and save it in 24.
Okay, wow, all right. Um, I don't hear a single thing in this that sounds bad.
How much is your payments compared to your income?
Um, my payment is going to be 1660.
Um, and I'm just wondering, I took out a 30 year. uh, I know you guys recommend a 15 year, but I was.
I would pay, I would pay it off, and as soon as you can pay it off, I wouldn't refinance it just to do that. But you're just, it's, you're 24. It's the first time you've done this. To, uh, the first time you do anything of scale or size, you feel the weight of it.
That's normal, you should, that's what it means. You're wise. If you didn't feel a little bit of pinch when you do something. The first time you pick up 300 pounds, you would feel it right, you picked up 230 pounds.
You feel it 231 pounds, right? And you, you know, and so that that just means you're wise, you're, you're, uh. But the numbers that you're giving us are all fine, and the order that you did, everything are fine. We would have done a 15..
You're right, but I would just challenge you to get to paying on it. Let's pay it off in seven or eight years. You can probably do that because you're that guy.
Yes, sir, I. I'm also wondering, at least for a year, I'm going to have a friend rent off of me who is looking for a spot. So I think that'll help out with the mortgage. But I wasn't sure if that'd be a good plan also moving forward to help pay it off faster.
Yeah, I mean, if you're single.
Anything you can tolerate.
You want to, yeah.
I mean, I think you want your your. I mean, you're okay, though.
What is it? I'm still not. If you called us and ask, Should you do this? Everything you said follows the guidelines and we would have said Nick by the House.
Uh, only we would have put you on a 15, but other than that, everything else lines up. I don't hear anything here to be concerned about. Is there something I'm missing? No.
I'm just making sure that that follows, yeah.
No, it's great and Nick, and honestly, because we tell people if they're in a position, go ahead and get in. Because housing pricing, house prices continue to go up, we have no clue what's going to happen with interest rates and everything. But, uh, like, it's to the point that if you have the money and you're able to buy now, go ahead and get in now. Because it's going to be more expensive next year and the next year and the next year. And there's not a bubble, there's not a crash coming.
I mean, none of that's happening, so if you have the ability to get in, go ahead because it's terrible. I mean, like, just, I mean, we were looking at numbers last week and just, I mean, from, you know.
Salary generation Gen Z. This is the toughest time home buying has been in 50 or 60 years. I mean, it's tough right now, it's not going to be forever.
But right, this second is tough, high prices, you pulled it off, salaries are not, income is not kept up with it.
So it is.
If you want to know more about this folks, you can go to Ramsey Solutions.
Com slash real estate. Or if you need to get a good agent in your corner, go to Ramsey Solutions.
Com Slash Agent to help you buy. And they'll if you. If they're Ramsey trusted, they'll make sure you're doing it the way we teach. They're not going to assist you in doing something stupid. If they're, if they're Ramsey trusted agents, so go to Ramsey Solutions.com slash agent.
You did good, Nick. Live from the headquarters of Ramsey Solutions. It's the Ramsey Show where we help people build wealth, do work that they love, and create actual, amazing relationships. Rachel Cruz, Ramsey Personality Multiple. Number one bestselling author, cohost of The Smart Money, Happy Hour and My Daughter is my cohost today. Open phones a triple eight, eight, two, five, five, two, two, five.
Samantha in Vegas starts this hour off Hey Samantha, what's up?
Hi, how are you doing?
Better than I deserve. What's up in your world?
Well, I called in because I'm just tired of toiling in debt. I have been a single mother of six and my youngest is now 21..
You got them out, you did it, mom, you did it.
I got them out.
Did they all survive?
Way to go to that next bedroom?
No, they all do really well, very well. However, except for the youngest one, he's still fighting his way. You know, during the course of this, I find myself in close to a hundred thousand dollars in debt. I am still paying my youngest car note.
I'm paying one of my children's college debt. Still, she graduated NYU. Um, so I have a little bit of debt there and I'm back in college, so I'm. I just don't even know where to start to to attack these, these bills with me already from paycheck to paycheck.
Okay, why does a 21 year old need his mommy to pay his car payment?
Because that's his mommy's name. And, uh, did not. He's not working yet. Well, he was working, but they just laid them off. So, um, I bought it for him as a graduation gift.
You bought him a car payment, okay? how much do you owe on your car?
I owe now about 12,000.
What do you owe on his?
Oh, on my car, I owe nothing on his 12,000.
Oh, I see, okay, so what's the other 88,000 in debt NYU?
Yeah, it's NYU, and then, of course, credit cards.
How much is credit cards?
Oh, gosh. Credit cards is around three or 4,000, the rest is NYU.
So you got $84,000 for one kid?
Yes.
Wow.
Yeah.
Was it a Parent Plus loan? Samantha? Is it in your name or is in her name?
It's a parent plus loan, um, and she does work for, I mean, she works. She's in a situation where her loans can be forgiven. You know, after so long. Um, I'm not parent plus you're on the hook for.
Nope, you got to pay it, yeah. So what do you make?
Well, I make just under a hundred, but with bonuses, I make about a hundred 10 115 a year.
What do you do?
I work in healthcare.
What are you studying?
I am studying to get a my bachelor's so I can move into a UM higher position in healthcare into a director's role.
And what are you paying for that?
You know, the company does reimbursement so, and I'm doing Sophia credit, so that's really I'm. I'm not really paying for that.
Just taking up time, okay?
Just just opportunity.
Very wise, good for you.
How long is the program, Samantha?
Oh gosh, if I keep doing the Sophia credit, I'll be done by mid next year, okay?
Excellent.
Great.
Oh, yeah, I'm trying to fast track that, and then what? yeah?
What will you make if you're at about one 10 with bonuses for the new position? What are you expecting?
Well, with this company, um, you know, it'll probably start around one one 20 without bonus, probably one 3140 width.
Okay.
Good, well, you're making progress, good for you. How old are you? 55??
Uh, you're good, I'm 53, I'll be 54..
Well, I mean, you told me your story, your story leads to that. Um, okay, good, good. okay. Well, you're a warrior princess. I mean, you fought through raising six kids by yourself.
You're amazing, you could fight the lousy a hundred grand in debt.
Yeah, you could do it, okay, are you?
Are you ready? Are you ready to get after it? Cause, you know, you're used to fighting battles and I'm getting ready to put you on the front line again. Draw your sword, you're ready to go.
I am so ready, I got my pen and pad, and I am so 100 ready, I'm tired.
I mean, the first thing I would do, Samantha, is I'd cut up your credit cards today, I'd get rid of them. And I would force yourself to live on less than you make with the income you have. And that's going to include these debt payments staying current, but it's going to force probably a different lifestyle to a degree. I know you're, I know you're not out there, all bougie and glamorous and stuff. But I mean, it's going to be like, Hey, I'm going to be eating in more.
I'm going to be cutting it out, I'm going to be cutting subscriptions, extras like, it's going to be putting you on a tight budget. Living below your means without credit cards, cause the credit cards have become the slippery slope for you.
They're kind of your, your safety net, and I want Samantha to be my safety net.
No life. And then I have.
I mean, and then, honestly, Samantha, the car loan for the son and that's going to be a really hard conversation, but it's. But it is a hey, we're either transferring the loan in your name, son, or. Or. I don't even know, but I wouldn't even do that. I think I would just sell it, I mean, I would get to a point where you're like.
No, no, I would say, Listen, honey, you got, you got 90 days to get your butt in gear with this car and Uber eats and everything else. And pay it off, cause otherwise I need to sell it, cause I'm getting out of debt.
Okay, that was my question, I said.
Give him a little time to pay, come up with 12 grand. And if he'll work 24 seven for about, uh, till between now and Christmas, he can pay that car off and then keep it.
How easy is it to transfer the time? I mean, he'll have to pay it off, though, but if he gets behind on payments.
If he gets behind on payments, it's done instantly, he's either paying the payments starting today, ready, set go, or we're selling the car and he's going to pay it off and get it out of your name, cause we're getting you out of debt. Cause this is a this is a, um, at best, a contingent liability, meaning you have to pay it.
If he doesn't, uh, at worst, it's just straight up you owe the money on the car, so Rachel's right about that. But what I want you to do is get on the every dollar app, we're going to put you into Financial Peace University.
I know you're already in class, but I'm gonna put you in another one and show you and teach you how to handle money properly. I'm going to pay for it cause I think you're cool.
Oh, why, thank you?
I think a woman that can raise six kids as a single mom's a freaking hero. And so I want you to go win, it's time for you to go win for you. But that's no eating out, no vacations, no whining, no life. Until we get this stupid NYU thing off the books, we're not waiting around on her to work a stupid, horrible Backwoods job.
So she can maybe get forgiveness that doesn't come through most of the time on the loan. Instead, I want you to just pay it off fast. I want this loan, all these loans gone in two years.
Oh, wow, okay.
Yeah.
Oh, that would be great.
Well, I'm talking about $4,000 a month.
Nope.
Yeah, okay, yeah, that gets you out of debt in two years, and that means you have no life.
You're working all the time, and you're, you're, you know, you're eating tuna fish sandwiches at work? Hello.
I hate tuna fish.
Yeah.
I used to eat it when I was broke, and when I smell tuna fish, I smell broke. I can't stand it. So Samantha.
Is there is there a lot of opportunity to pick up overtime? A lot of healthcare in that industry? we find a lot of people are able to get some great overtime opportunities is there.
Well, I'm salaried, and, um, you know, I'm a department, okay, patient Access care department.
So it is a little different, okay?
Is there anything you can think of as a side hustle while you're going to school that is possible?
I have truly thought that up and I really don't. The only thing I have is like, you know, Uber eats or something, and I can't really, you know, I, I can't do that.
You got to get through school, I want you to get through school. I think that's important because that's a better future play. But I don't know. I think you can do this if if a boy child takes care of his own car. And um, and you lean into this and you chop up the credit cards, like Rachel said, and we get you on an every dollar bill. I think you can do this in about two years.
I really do.
And then you're going to be up another 40 grand in salary that can be thrown to this next year when you get your new position.
So that's going to help, that's going to help you get even faster. Hang on, Christian's going to pick up, and we'll get you signed up for Financial Peace University. We'll show you how to do this, kid.
It's what we do. This is the Ramsey show.
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Rachel Cruz Ramsey Personality is my co-host today. thank you for joining us. Chris is in Bozeman, Montana. Hi Chris, How are you good, Dave?
Thanks for taking my.
Call sure, man, what's up? So I'm going through a job transition right now and I'm hoping I'm not shooting myself in the foot.
I work for a company down in California and I live obviously remote. I'm taking a slightly lower paying position to try and improve my quality of life. You work remote? well, I work remote, and if I'm not remote, I'm traveling all around the country, so.
Where's your quality of life going? How often are you traveling? It depends, it's.
Kind of sporadic. I never know when I'm traveling. The most recent request? They called me at 1030 p..m. on a Wednesday and wanted me to fly out the next morning, Wednesday night. Is that normal?
No, that's not typical, okay, so that's an.
Exception What's the average month that's killing you look like?
Well, again, it's sporadic. I had six months in a row where I was gone week, like every other week. I was gone for a week. So I was home for a week, traveling for a week, home for a week, traveling for a week, and then now I've been sitting at home. So what were you making? Probably three.
70 salary plus benefits, and what are you making now? I'll be making 30 an hour with the opportunity for overtime.
But no benefits. What's that translate to?
I'm sorry, 60 days, 60, so you're gonna take a $10,000 pay cut, but with OT possibility and loss of benefit, yep.
And you're at home and it's a 40-hour gig.
When I'm home, it's 40 hours, when I'm traveling, it's, oh, it's now travel, the new one's not travel.
The new one's not.
Travel I'm local home every night with my wife. Okay, that's what I said, Yeah, you're taking a 10k pay cut, you're coming off the road.
Yeah, yeah, but my travel time, like, if I'm traveling, that's a 60-hour week. Sometimes typically was, you know, yeah. But I don't get paid for that overtime, so this new overtime if I have to work a.
50-55.
I gotcha, you'll get paid for it, I see, I see what you're saying.
Yeah, does the new job.
Include travel. No, no, it won't. I mean, I have to drive around my local town. No, yeah, he's saying with the 70, it was travel.
I'm trying to get a handle on it all right, so okay anyway, so what's your?
Question is, did you goof up taking that? Yeah, am I making a bad financial?
Decision because I do have, only if it doesn't take you where you want to be. When you're 10 years older, how old are you now? 33.?
Okay, is the 43-year-old mad at the 33-year-old you?
Not from what I can see. Okay, all right, then you're fine. So I don't want you to take a permanent step back, but taking a step back to get your life under control so that you can step forward. In other words, does the new position have some upward mobility? Some things you can do with it over the next decade? Does it take you where you want to go?
But if you're taking a job, you're just going to be stuck in and you're spinning your wheels. And you're going to make less, and you're going to make less, and you're going to make less, and you're going to make less. Then, yeah, I would have taken another job. I don't necessarily think you have to stay with that old job. It was a bad gig for you, but I don't hear anything here. That's devastatingly bad. If you took a pay cut in half, I would.
Say, you really screwed up.
Yeah, and his point too is the 70k included weeks of travel and you don't get paid for those extra.
So even if he picked up some.
Ot to get in.
If he worked the same number of hours at the new gig, he'd make 70k, that's right or more. Yep, that's right if they'll give him the OT, but I.
Don't know if they will or not. Yeah. And especially if you're in a position where you guys can live on that and you're not putting your family in a financial dire strait. Like, I just know for our students in a life. Like, yeah, if you have the ability to not be gone for a week. If you're married with kids, that's real nice, real nice, you know? So that's fair, for sure, absolutely.
Now, in general.
For folks out there, sometimes when people say work-life balance, you mean all kinds of different things. All right? And sometimes people, I need to leave this job that's toxic, or I need to leave this job that is horrible. And I'm really not referring to Chris at all, I'm just referring to the subject then, you know. And the only way I can do that is to make less.
Well, I would challenge that, okay? There's two times that people come to us in the last 30 years and they come to us every week with these two times. I want a better quality of life and so I'm going to change jobs and make less.
Number one, which he's not really making any less, probably. But the other time they come to us is I lost a job and the new job I'm going to get that. I don't even know what it is. They assume is going to be less. Both of those are wrong answers.
If you have answer A, a job that's miserable, answer B a job that makes less, you have not enough answers yet you need. C. None of the above Remember taking multiple choice C, none of the above and none of the above means. I want a job that's not miserable, or that is a new job because I lost my old job that pays more.
And guess what, you won't find that if you don't believe it and aren't looking for it. People have a negative assumption immediately that in order to be happy, I have to make less. Well, let me help you. You're happier if you make more.
And in order to get a new job, you have to make less. What?
Hold on, unless the new job is terrible, you don't feel happier if you make more in your situation.
I know, but this idea that the only way to be happy is equated with working for a non-profit. And I make less money than I've ever made in my life, that's just dumb.
No, no, but I do think there's an assumption that if you've been in a company and you continue to get raises within internally, and then you step outside, that it could be harder to find the same equal opportunity. Not if you earned those.
Raises because you're unqualified to run that position that you're doing in that company. Yes, yes, well, and I would say, if you're overpaid because you got promoted beyond your competence, then that would be true. And I will say, out in the.
Marketplace to find a job that pays more is out there. Like, we see that a lot all the time, you're getting paid 20 grand more. I mean, like, it is wild.
We see that even from internal, and we've had people leave here because they get.
Paid 30 grand more. I'm like, Hey, I'll help you back, that's great man, that's awesome.
Happy for you. So, yeah, there are so to your point, though, you don't equate. Okay, I'm gonna have a better situation because of the toxic work environment I am or the schedule that I hate that I'm in. I can find a job that I love and enjoy and I can make the same or more and that I'm passionate about and good at.
Yes, yes, all those things and make more right, so this....
But the human nature is to assume the negative. Yeah, yeah, and I'm saying, push back against that as an act of your will and assume the positive. Good stuff, all right.
Renee is in St. Petersburg. Hi Renee, welcome to the Ramsey show.
Hi Dave, Hi Rachel, thank you so.
Much for taking a call. Sure, what's up? I just have a quick question I was wondering....
I'm on Babysit to paying off my car and now the engine needs to be replaced and it's an $11,000 repair, so we have $1,000 in emergency fund. So I'm wondering what I should do, like, should I take out a personal loan to get the car fixed? That car's gone?
How much is it worth?
Well, with the engine needing to be replaced, it's worth $5,000 and I owe $20,000 on it. If it had a new engine, it would be.
Worth $15,000.
Wow, oh. But if it was fixed, it'd be worth $15,000. Okay, are you?
Single?
No, I'm married, all right, the two of you need to sit down and understand that. There's lots of places to buy car engines, and the car dealer is the worst one $11,000 for an engine. The flip are you doing?
Buying a NASCAR? No, you're broke, you're going to a junkyard and get a used engine that has 20,000 miles on it and the car got totaled. And you're going to have some guy under a tree, put it in out back of his house, that's called a shade tree mechanic, by the way. And it's cheap, and that's how you do it. No, and that's going to cost you three or four grand, and you're going to save up money and do that real fast.
You know, $11,000.
No, no, no, no, no, no, no, no, no, no. How do you find an engine? Though? They don't even call them junkyards anymore, they call.
Them salvage yards, so you call a salvage yard and just say, I need an engine.
I'm start and they've got it's all computerized now, they'll shop all over the nation, there you go, they'll have you a nation, I'll have an engine.
A guy under a tree, that's not what I was expecting, it's a shade tree mechanic. It's an old saying. Y'all heard of it, anyone out there?
Everybody, oh my gosh. Okay, thank you, thank you. This is the Ramsey show.
Rachel Cruz Ramsey Personality My daughter is my co-host. Today. Our question of the day comes from Brandon in Maryland.
He says I've had several friends whose parents took out our Parent Plus loans and had them go sideways once they graduated. What's your stance on them? Obviously they're a bad idea, but if they were taken out, whose responsibility should it be to pay them once they come due?
Well, I mean, legally it's the parents name on the bill, and so, I mean, I guess from like a legal perspective, it's the parents, I mean. What's frustrating about this whole thing, though, is that, and we've heard this multiple times. Is that, you know, the student agrees with the parent that they'll pay it, you know, but the parent takes out the.
Parent Plus Loan and.
The student fails to tell their new fiancé, and then they get married, and four years later, mom and dad go. You remember that time you said you were gonna pay this loan? and they go, No, I didn't. Yeah, that's what happens.
We hear that all the time, don't we? Well, that or the.
Student doesn't pay and then the parents, like, Well, I guess I have to pay it, and then they're frustrated. I mean, like, it's just it ends up being this like tangled mess relationally. But whose responsibility, once it comes due?
Whoever promised to pay it, morally, if the kid promised to pay it, then they should go back and pay it, they're not legally liable. So if you, if the kid, if you said, mom and dad, if you take this loan out. So I can go to the college of my dreams then, and mom and dad are stupid enough to go do that. Then they sign the note they're legally liable, but you made a promise to them to pay it, that's you keeping your word, you go pay it.
Okay, mom and dad took out the loan and nobody ever said anything to nobody, and then mom and dad come back later and go, you need to pay for your college. No, I don't. I didn't tell you I'd pay it and I'm not gonna pay it. So there's no moral contract. And mom and dad are up a creek.
Bottom line is, you can avoid all this by staying away from the stupidity completely. No student loans of any kind are good in no freaking circumstances. parent plus loans are stupid. That'll help you, yeah.
And it's hilarious to me that when people are stupid about education, that's an oxymoron, isn't it? We've lost our stupid minds on the subject of education. I will say, Do you?
Feel like in the most recent years, in the last two years or so since Covid, I feel like people have woken up to this though. Student loans Yes, I think that there has been a backlash against just collegiate in general, like.
Just, I mean, I think people are seeing.
Well, higher education has gotten a backlash in general. Yeah, I just think that there's just been a. And some of it was. They wanted to charge you the same amount while you were, while they wouldn't let you come to campus.
Yep, and made you work, made you study remote, and they want to charge the same amount. Everybody went well. Listen, I was already getting ripped off and this is really screwing me. I don't think so so, but I mean, yeah, I think it's waking up. And I hope that borrowed future, you know, our documentary that was award-winning and highly viewed had something to do with it.
If you haven't watched that, you can watch it on YouTube free and many other streaming services as well. But it'll blow your mind how crooked and backward this whole student loan thing is. And the politicians, you guys, you congresspeople, somebody ought to just smack one of you y'all are just. It's unbelievable. Student loans are horrible.
We need to forgive them while we continue to make them. That's so intellectually dishonest. If they suck and they hurt people, why don't you stop it? Hello, the poor little victims of the student loan.
And you keep making them and you're the villain. Congress. It's your fault. If you just stop it. Nobody would have student loans, that'd be an awesome thing, and the universities would.
Probably lower tuition because nobody's going to be getting it, I promise you they would, because people.
Couldn't afford to pay it and people would wake up and go, wait a minute. This is like real money in my hand that I earned. I'm gonna make better value choices about what I study. I'm not gonna study left-handed puppetry and pay somebody $85,000 a semester for that and call it an Ivy League education. And I'm furthering my thought patterns.
Oh, bullcrap, you're just shoveling money out, and by the way, it was my money because I'm the taxpayer. And now you're not paying it. Because you got a degree that's worthless and you're a barista, and so that's what happens. It's just the whole stupid thing is a scam.
And so higher education is to blame, the Congress is to blame weak parents that won't tell their spoiled, freaking children. No, are to blame everybody in this thing.
And you used to say it a thousand years ago, before we had borrowed, before we had borrowed future and all of it out. You said. We don't have a student loan problem, we have a parenting problem.
Because you talk to.
These college students, to your point, that graduated 21 years old with 120 grand in debt to not an Ivy League. I mean, they're charging insane money now and they want to go and be a missionary or do something, you know where. They're not making a ton, but they got all of this debt. And I'm like, Well, how did your parents direct you? Well, they didn't talk to me. And you're like, Oh my gosh. Like an 18 year old is sitting here making a decision that's gonna affect them for the next decade of their life. And a parent didn't step in and at least have the conversation.
Like, nothing is being said, or we get a call like my.
Daughter told me she's going to this school that we can't afford, so we're gonna have to take out student loans. See, there's the problem because I love Rachel, but when Rachel was 18 and we were spending my money, she didn't tell me nothing. I told her some stuff, but she didn't tell me anything. That's not how this works.
That's backwards, there wasn't much dialogue. No, there wasn't. It's like, you're gonna go to this school and I'll pay for it. That's pretty much how it went.
All three of them went to the same school. The dialogue was, if you take all these classes, you graduate in four years, so take the freaking classes. Yeah, that's fair.
Because, yeah, I did. That was the dialogue. And to be transparent, you guys paid for our education, but we had to stay in-state. Yep.
We had to take in-state tuition and we had to graduate in four years. If you went four and a half, you had to pay it, and you had to freaking behave, and if you did, yeah, and if you went?
Out-of-state, you don't get to go off the reservation and get my money. That's not how it works. I'm not gonna support your freaking insanity that some Communist professor told you to engage in. I'm not gonna do it, you know?
I went partying, it's called parenting, I went partying in.
College If you went off the reservation, that meant partying. Not, well, I'm talking.
About losing your freaking mind, and you know, I'm gonna, you're confused, what you're there for. You're there to take these classes, to get this degree, and if you take these classes and pass them, it's magical.
You graduate in four years.
And we go, we're sitting in the orientation at the University of Freakin, Tennessee, where the kids went and I went. And they said very proudly, we have a 57 graduation rate. of the people that are sitting in this room, 57 are gonna graduate.
And I'm thinking to myself. I almost raised my hand and said, If they make a 57 in class, don't you give them an F?
You wouldn't be bragging about that. That's called failure. Oh, and then they pipe up and say, and only 20 of the ones that do graduate will do it in four years. And I wrote across my oldest daughter's little orientation packet. So have a freaking plan in black magic marker while this idiot was on stage telling us this.
I mean, how are you bragging about a 57 graduation rate? That's failure and this.
Is another lesson that you take out loans and you may not even get the degree, and you're paying money back for a degree you never received either?
43 of the time. Yeah, apparently you don't get the degree. Oh well, Brandon.
From Maryland's Question of the Day Hope that segment that was for you, I mean.
Guys, I know, I know it's hard. You can go to college debt-free.
You choose a school that is reasonably priced. It's typically an in-state school, yeah, but $12,000 a year will put your little butt in a state school right now. 14, I mean.
Community college. It's getting worse and worse. It is okay, go and you can go.
For free in most states, you can go to a community college, get your.
Prereqs done? Yes. I mean, there's a plan to go about it. It's not the most.
Glamorous. You're not studying anything that matters in the first two years anyway, usually.
Yep, yep, so there is a there is a plan, and it probably doesn't look like.
The shiny plan that you always have at college? Here's an idea Get a degree. It'll help you get a job.
Whoa?
That was insightful. This is the Ramsey show.
Rachel Cruz Ramsey Personality is my co-host today. Thank you for joining Us America. The best way to make the most of your money is by telling it what to do, creating and sticking to a monthly plan known as a budget.
The dreaded b-word. Every dollar needs a name, every dollar needs a mission, every dollar needs an assignment, so we named the world's best budgeting app, Everydollar.
It's the everydollar budgeting app tens of millions of people have downloaded and are using the app. You can keep a pulse on your spending, make progress on your money goals, tell your money what to do instead of wondering where it went.
Pretty amazing guys. Download the Everydollar app for free in the App Store or Google Play, or even at everydollar.com free. Jarrett is in Indianapolis. Hi, Jarrett.
How are you? I'm doing good, How about you, Dave, better than I deserve? What's up?
Just wanted to give a quick shout out to Mr. Haney. He put me on the Dave Ramsey show seven years ago in high school, so I just wanted to give a quick shout out to him. He's been amazing and he's the reason I know you, man.
He's awesome, I love a good.
High school teacher Good stuff, man. How can we help today? Yeah, so my question.
Kind of comes more long term than short term. So me and my wife were kind of thinking about buying the house, like whenever. We kind of get settled in with the economy and everything. And we're just trying to think about it long term. Because she wants to be a stay-at-home mom, which obviously, like, would take away her income, and we've talked about it. She would be open to doing a part-time job, but probably not full-time, you know, with the kids and everything.
So we were just curious on like, how do we save up for a down payment on the house? Whenever like that down payment? Like, it would be saving with two incomes and then we'd go down to one once we move in. So I'm just trying to avoid being house poor.
Honestly, yeah, I mean, I would just do the math that you're, I would do the math. On one income versus two, you could save up the down payment pretty fast with two incomes. But once you guys move in and you want to go down to one, I would make sure the formula worked with that one income. Do you guys have kids now?
No, no.
It's like, very long-term. We're just trying to plan ahead as much as we can. So that when that moment comes, we're like, you know, we're ready for it. Yeah, so.
Rachel's right. Run your house payment on the remaining income after she comes home, being no more than a fourth of your take-home pay on a 15-year fixed. But I wouldn't do that now. I mean, you guys don't do that today, but when you're doing the purchase, but you don't have kids right now.
Yeah, and so, you know, and we don't know what you're gonna be making then. Yeah, that's what I was gonna say, too. So it's not what you make now. So right now, your job is to stack cash, because here's the other thing.
The more down payment you put down, the bigger a house you can buy with that exact mortgage. Let's say that at a fourth of your take-home pay, you can afford $250,000 on a 15-year at your then income. Whatever you're making at that time. And she comes home with and stays home, okay, then, you know. Obviously $250,000 is the loan amount, but if you had $100,000 saved, that means you're at $350,000. If you got $200,000 saved, you're at $450,000. And so the.
Bigger the down payment, the bigger the house, or the bigger you know that you.
Put down on the house. So the less the payment a month, or you take out less of a payment than the formula allows. But Rachel's right, you just need to be doing for today. Your job is to stack cash and then just be cognizant when the purchase. Time comes to run the formula based on the remaining income, because if you run the formula based on a fourth of your take-home pay. With her income and then she comes home, you are going to be house poor.
That's going to strap you and that's not going to work for you. Travis is in Buffalo. Hey Travis, what's up? How you doing better than I deserve, sir.
How can I help?
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