Draw a Line in the Sand When It Comes to Borrowing Money
2024-04-23 01:57:02
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Live from the headquarters of Ramsey Solution, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Rachel Cruz this hour. It's a free call at 888-825-5225.. You call us, and we'll help you take the right next step for your life and your money. Welcome back, Rachel.
You've been on the road doing book signings for your new book. I'm glad for what I have. It's good to have you.
Yeah, thanks.
It's good to have you here.
I'm glad. I'm glad to be here, George.
Glad for where I am in the studio with Rachel.
I know. So yeah, the kids' book was great. I'm glad for where I am launched, and we were in New York, L.A., Phoenix, Dallas, heading to Atlanta this week to finish it out, and it's been great. And then it was good to be home, and I thought, I'm glad for where I am, you know.
We did Smart Money Happy Hour yesterday, so she's also my co-host there, my co-host today on The Ramsey Show. Let's get to it. Marco awaits in Greenville, South Carolina. What's going on, Marco?
Well, not much. I just have a question about the advantages of renting long-term, like 15, 30 years, instead of a mortgage.
I'm not really interested in building wealth long-term. I'm more, I guess, interested in a quality of life now and not taking up my time with house repairs or my money with house repairs, but just kind of having a life that's different, through renting, and I'm not so interested in the building wealth.
How old are you?
I'm 40, and my wife is also 40.
And she's also not interested in building wealth?
No. I mean, we have retirement accounts and we're saving and all that, but in terms of real estate, wealth and that kind of thing long-term, we kind of feel like the peace of mind that comes with renting, knowing that there's no surprises, expenses, and things like that. Is there an advantage to renting long-term over mortgaging?
Yeah. I mean, I think one of the big things is just the diversification piece. So if you have all of your money in the markets, in a sense, to a degree, all your eggs are in one basket on that side of investing, and then real estate is the next way that we look at investing, because of the long track record that it has. And for you to have home ownership gives you a level of not just diversification, but, I think, overall just power. And I understand that you're, or when you say, like, I don't want to build wealth.
And, just to be clear, like, we don't encourage people to build wealth just to build wealth, right? I mean, it's building wealth, I think, to a degree that you have a level of options in your life. You have a level of peace that you're not living paycheck to paycheck. So your wealth building that you don't want to do, quote, unquote, may look different than another listener that's watching this or listening to this. But I think one of the biggest pieces of this, Marco, is just that idea of diversification and that eventually renting ends up being more expensive because you end up throwing money away.
It's a good short-term situation for some people financially, but long-term, it's better that you're kind of almost paying yourself, because you'll end up building equity.
I hear a lot that, you know, obviously, housing market prices are not coming down. So when you say it's better to rent short-term and then buy long-term, the longer, every day you wait, prices are going up. So how long, realistically, would you rent before trying to actually buy something?
I mean, I would wait till I'm in a position where you're in a position, regardless of what the market's doing, that you're in a position to buy. So for us, our parameters that we have is to say, yeah, we would love for you to have at least 5% down for a down payment on a 15-year fixed rate mortgage, and that your mortgage is no more than 25% of your take-home pay. So it's a quarter of your income. So that way you have 75% of your money that you're making going to things like investing, like you're doing for retirement, and to be able to enjoy your life like you want to do.
Gotcha. That makes sense. I appreciate you guys' help.
And Marco, yeah, the big piece here is, we're not saying get a mortgage and hang on to it for the rest of your life. The goal is to pay this off. And what that does is it lowers your expenses when you go to retire. The problem is, if you keep renting, rent could be double what it is by the time you retire, and you're stuck with that expense for the rest of your days. And so I wouldn't be as worried about maintenance and repairs as I would be about the increasing cost of rent.
And instead, I'd rather see you get the mortgage, get rid of it, get rid of that fixed expense to where you're only paying property taxes and insurance. Because right now you're paying that already through your rent to the landlord. They're covering their costs through your rent. And so the key is, when you're an owner, you own that asset. That home will appreciate.
It becomes part of your legacy. And regardless of if you want to build wealth or not, that's fine. That's a different discussion. I think it's wise financially in the long term to own a piece of real estate.
Yeah. Because, Marco, if this is encouragement to you too, people that do the baby steps, baby step two is get out of all consumer debt, but your house. And people do that on average, anywhere from 18 to 24 months on average. And then when we see baby step six, which is paying your house off early, people are paying it off in seven to nine years on average. So, to George's point, you know, you'd only have a mortgage if you're doing all of this stuff, you know, maybe for 10 years, not 30 years, like a 30-year mortgage says.
Do you have any debt, Marco?
No. My wife and I are debt-free and we have a couple of retirement accounts. So I guess what you're saying is that long-term owning a house isn't just about wealth creation, although that definitely is a piece of it. It's also about future expense reduction, which would be, you know, rent would be a big piece of that. And when you're not paying rent when you're retired, it's a lot more comfortable of a life than having more paying rent when you are retired.
Exactly. And you don't need as much in retirement, because if you have rent to pay for the rest of your life, you need a lot bigger nest egg. And so there's a nice trade-off there when you go, all right, I'm not going to have a mortgage payment. And at the same time, we want you investing 15% until that mortgage is paid off. Then you can increase that.
So how much are you investing right now?
Right now we're right at about 15% of our household income.
And do you have money in savings?
Yes. Yes. We have about six to seven months of expenses and savings, and then I have a 401k through work and two Roth IRAs.
Okay. You guys are doing great. And you're at the step where I would say, now that you have all the foundation laid out, let's start to get that down payment. And I don't know what the housing market's like in the Greenville, South Carolina area. I imagine it's pretty hopping, but I'd begin to go, all right, let's get in the game.
And that might even be a condo or townhome and maybe eventually a single family home. So let's get in the game, get something reasonable under the parameters Rachel said, and get that mortgage paid off as soon as possible.
Okay. That sounds like a great plan.
Thank you so much for the call. Great question. And I want to call out to all the renters out there, Rachel, that renting is not a sin. It's not a waste of money. There's such a hot debate on either side.
There's people saying, you should always rent. It makes so much more sense. You don't have all the liabilities. You get more flexible. And that's all true.
And the homeowners are saying, stop renting. It's wasting money. And we hear this from the older generations to the younger generations, and they're going, yeah, I'd love to own a house. It's just impossible right now. And so I want to be the referee flag on the play and go, everyone's right and everyone's wrong.
That's right. Settle down.
Yes. Yeah. And renting is a great option for a season of your life, right? While you're getting yourself in a financial position to go and buy, because, I mean, let's be honest, when you buy a home, for most people, it is the largest financial investment that you make. I mean, it's the largest purchase you make.
I mean, it's so much. And so you want to be making sure that this is wise, that you've done it really well. And renting, for a lot of people, is kind of that medium step, which is great, which is great. But to Marco's point, what he was asking, that doing that forever and ever, amen, ends up costing you.
A hundred percent. So, whether you're a renter or a homeowner, the goal here is to minimize expenses in retirement, to build wealth, to live the life we want. And that's what he was really getting at. Marco was saying, I want to have a quality of life. now.
I believe you can do that, and be a homeowner, and be a renter. The key is to be on a budget, living on less than you make, and staying out of debt, and make home buying a part of your wealth-building plan. More of the Ramsey show coming up. Don't go anywhere.
I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.
Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in, and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through, how am I going to pay my bills in the middle of all that grief? It's terrible.
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I'm George Campbell, joined by Rachel Cruz. This hour, open phones at 888-825-5225.. Call us, and we'll help you take the right next step for your life and your money. Jennifer's in New Orleans. up next.
What is going on, Jennifer? Hi. How are y'all? Doing? well.
How are you?
Great.
How can we help today?
So, I have a 17-year-old son, almost 18,, and we pretty much raised him on FPU principles since he was about six or seven years old. And he is in a pretty serious, healthy relationship with a young lady that we do really like, and I know it may seem like too early to tell or anything like that, and we're not the kind of parents that's like, oh, my God, but, you know, you have that feeling.
Well, you're hopeful she might be the one.
I'm pretty sure, so, you know, not anytime in the near future, but she is set on being an orthodontist.
Sounds expensive.
Exactly. That is my question of how to approach this with them. We have talked to him just briefly. The conversations have just started. He does think it's dumb to take out student loans.
She's briefly said that she's totally fine with having $250,000 of student loans that might take the 20 years to pay off, because that's what usually, what orthodontists have, and I kind of briefly said that you guys may not even be afforded to eat.
And I just don't know how else to approach this, besides maybe getting them to watch The Borrowed Future, take Foundations and Finance, but, you know, it's just starting.
Yeah, well, a lot of this stems from how she grew up with money and what her parents believe about money.
Right.
And so this is a money values conversation that your son will eventually need to grapple with as they head toward, maybe, a marriage.
Right. That's what we've been talking about with him.
Yeah, and I think it's, I mean, he's getting to the age, he's 17,, almost 18.
. So, and again, I don't have kids that age, but, you know, there starts to be that level of letting go, right? That eventually they're going to be off in college, they're going to be making their own decisions. Like, there is that, that season of life is coming soon. And so it always begs the question, it changes a little bit, because he's still under your roof, in my opinion.
But it always begs the question of, if no one's asking advice, you know, when do we give it? And what can we control? Because the truth is, you can't control what she chooses to do. And it gets to a point too, that eventually, soon, they're going to just be making their own decisions, regardless of what you guys think or not. Right.
So, so, if anything, it would be a conversation with him. I don't know what y'all's relationship was, obviously, they've been dating a while, but you're not her parents, right? So, but you are your son's parent. And so I think, having that relationship, of being able to have the conversation of, hey, this is what, this is what life will look like, you know, if she chooses to go down this path. And, and then, you know, we get people, you know, in the medical field call us all the time, Jennifer, pharmacists and all this, and they have $200,000 in debt, but they're making $160,000, right?
And so usually the hope is, is that you have a bigger shovel, if you're choosing to go a path, you know, in this medical type field, it doesn't always happen, you know, they could get married, she gets pregnant and wants to stay home, and then all of her options are gone, right? Because she has to go pay the step back. So there's a lot of life in there. But as a for, I don't know, I don't know how much you can control it, right?
And until they're married, he doesn't really get a vote in her life, he may have influence, but he doesn't have a financial vote as to what she does or doesn't do. The worrisome part was how flippant she was about it.
Well, she's 17,, though.
I'm just saying like, well, this is normal, I'll just pay off my $300,000 over 20 years. I think we need to give her a dose of reality. And I think you're right, like sitting them down and saying, hey, would you guys watch this documentary called Borrowed Future?
Yeah, but if it's not her daughter, and they're not engaged, and stuff, like, I don't know.
I mean, I'd probably pop on Borrowed Future because I am that dad, you know what I mean? And just to have it on in the background. Just to have it on.
Yeah, I mean, I guess if it's in like a very organic conversation, you know, but I don't know. It would, I don't know.
It would feel like overstepping boundaries. Do you feel like that? If you brought this up, it would be overstepping your boundaries?
Well, I have brought it up to my son, and he said that he would watch it with her. He has brought it up to her. And so we do plan on doing that this summer.
Okay. And as her family...
Okay, Jennifer, is he about to buy a ring? Like when you say they're serious. No. No. Okay, so honestly, too, and you know this, Jennifer, at 17, you're 17..
I'm like, I knew multiple friends that were dating in high school. They go to college within, you know, nine months or so. They're off on different schools. They meet. I mean, you change so much in that season.
But also, Rachel got married in college. I wouldn't... It could happen.
I had a semester left. It could happen. Winston had been graduated a year. I had a semester left. Thank you, George.
So it can happen. But what I'm saying, though, is I do wonder if you're ringing your... I don't want you to worry about something. that's not your problem right now. Do you know what I mean?
Right. It's not like they're getting engaged this summer and getting married, and then she's choosing to go in at 18 years old, right? Like, I don't know. Yeah. We may have different opinions, George.
I just think it's one of those things you got to.
. You cross the bridge when you get there. And if she ends up in a bunch of debt, and they do end up getting married, and she's aligned on the values of wanting to get out aggressively, then they'll be okay. Yes. Their life's not over.
You can still have a great marriage. But it is going to add a wrench in whatever their plans are.
Yes, that's right. It just adds that weight, which we all know.
It's going to hold them back, building wealth. But the long-term hope is that she gets on the same page with money and goes, you know what? I'm not waiting 20 years. If she does end up taking this debt, it's, I want to be done with this thing in three or four. Yeah.
And, Jennifer, you do this after school, too. And I know people, majority of people, change their major, right? Like halfway through. So I'm like, she may not even end up doing it anyways, right? So...
That's what I'm hoping. Yeah. Yeah. And they may not even be dating. I mean, I don't know.
That's a tough one. Yeah. Yeah. There's no easy answer here.
I don't want you to worry, Jennifer, because I just don't feel like the reality is happening. It may happen in like four years, but a lot of factors have to play in for this to actually happen. But I really do appreciate you, you know, looking out, obviously, for your son. That's what I'm thinking. It's for your son.
What she does, though, is, I don't know.
Yeah. Well, keep us posted. Call us back in a few years.
Yeah. Okay. So tell me this. Let's split the tables a little bit, George. Okay.
Okay. Let's say Mia comes home. Oh, my goodness. We need a different...
Okay. Let's go... First of all, America, Mia is my eight-month-old daughter, just for context. Okay?
So she comes home, and this is not picking on Jennifer, but it does raise the question.
Where was she? If she wasn't at home.
She was at her boyfriend's house. Okay? Okay. And her boyfriend's... I was going to use health.
I don't want to use money as the example, but health. Okay? And she comes home and she says, yeah, I mean, Brad's mom sat me down.
She's dating a Brad?
She has to date a Brad. in this scenario. She's dating a Brad.
Oh, I already have feelings about this.
And she says, oh, my gosh, Brad's mom.
. You know what?
You're not the mom.
You're the dad. You may feel differently. Brad's mom sat me down and told me, the way you've been feeding us gluten-free, all this stuff is actually really harmful, and I actually need gluten and dairy and all of this that you've deprived me of, dad. So, because of this, Brad's mom, I'm choosing to say, would you be like, Brad's mom, what the heck? Stop teaching me about...
I'm trying to put myself in a place where there's a contentious argument about gluten. I'm trying to make a different example.
I'm trying to put it in your world. Yeah.
I mean, I think as an adult, I'd have an adult conversation with the other adult and come to a compromise.
Okay. So you would reach out to Brad's mom and be like, hey, okay, so that's what I'm saying. Like the blurred line with Jennifer and this girl who's not her daughter, is it overstepping boundaries? Is it parenting another person's child when the girl isn't asking? Sure.
Do you know what I mean?
Yeah. And it's not a fiancee, it's just a girlfriend.
That's right. Yeah, yeah, yeah.
I feel like future mother-in-laws give unsolicited advice all the time. It's just a part of being a potential future mother-in-law.
I guess so. I don't know.
They may never get along.
I'm so glad you called Jennifer, because that's a really good.
. It's an interesting scenario to be thinking about, for sure.
I would love to hear from the girlfriend's parents.
But I also, and I'm thinking about little Charles now, my son, if he was, yes, dating a girl and she was going to go, I would be like, y'all, don't do, stop, no, no. I would feel that tension.
Oh, I'd feel that way too.
Of like, you're about to enter into something really hard that you don't have to enter into right now.
Yes. Because the damage hasn't been done yet. That's right. So we're going like, we can prevent a lot of this, is there another way? Right, right.
I don't know. Did the girlfriend's parents save for college at all? Did she just on a whim decide, I want to be an orthodontist one year before going off to college? Yeah. There's a lot of further questioning that we don't have the answer to.
100%, 100%. But yeah, well, if Mia starts eating gluten and she met, we have had that discussion in.
the camel house. We're like, will she eat gluten one day? I don't know. We don't have it in the house. Will she get it?
If she dates a Brad.
It's like alcohol. It's like she's not drinking it in our house. I'll tell you that much.
Oh, that would have been a better one. if you don't, if you're a family that doesn't drink in the, uh.
Save that one for next time. Yeah.
We'll do that next time.
Hey, more of your wonderful calls coming up. Always a great conversation. 888-825-5225.. This is the Ramsey Show.
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Welcome back to the Ramsey Show. I'm George Campbell, joined by Rachel Cruz. She's my co-host today. Also, co-host of Smart Money Happy Hour, where it's not a call-in show, but it's still a very fun conversational show about money and pop culture and what's going on in the world, with a lot of laughs. So, be sure to check that out if you enjoy this one.
Well, Rachel, we've got a brand new event coming up, and this is one that I don't have to travel far to, because it's right here in this building. It's a virtual event that you can join from anywhere, and it's called Dave Ramsey's Investing Essentials. So, at this event, Dave and I will deep dive into investing, and for the first time ever, he's going to unleash his personal playbook on investing, including how he buys real estate, which he has amassed quite the portfolio. So, you want to tune in for that alone. This is a two-night virtual event, happening May 21st and 22nd, and because it's online, you can watch from the comfort of your own home.
And you guys are always asking us, we want a deeper dive on that baby step. four, investing for retirement, investing beyond retirement, investing in real estate. We get a lot of questions around that.
I know. And when I heard you guys were doing this event, I was like, oh my gosh, I'm so glad because for a lot of people, as they are doing the baby steps, and for some people listening or watching, they've been doing this for 10 plus years. I'm like, they've been following. And, George, I want you to talk about, because we don't do it a lot on this show, but, like backdoor Roths, like there's options out there, other retirement things out there.
Beyond your normal 401k and IRA.
Yeah, for high income earners too. And so I get a lot of those questions on social. And so people really do. They want the detailed plan of, okay, what exactly do we do? Mega, backdoor, Roths, all of it.
And for folks that are self-employed and they don't have an employer 401k, there's tons of options for them and they don't know about it.
That's exactly right. So I'm so glad you're doing that, George. It's going to be fun. I can't wait. Step up to the plate.
Someone had to do it.
Give the people what they want.
I'm pumped for this. So join us. We're going to, of course, start with the basics, but we will quickly get into 201 and 301 and into formulas and stuff that will blow my mind.
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All right. Tariq is in Seattle. Tariq, welcome to the Ramsey Show.
Hi. First, I just want to thank you guys so much. All the work that you do has completely changed my life, and I just really appreciate it.
That means the world. We didn't do much, man. You changed it, but we're glad and honored to be a part of it.
Yeah. So my question is, I'm really struggling with grappling with car insurance and auto insurance. And so I think my case is a little special, because I've never had a car and I've never been put onto car insurance. And I know you guys always talk about buy a car in cash. I'm totally down with that.
But once I started looking into it, I tried to get a quote for insurance. And if I bought a car for, say, $4,000, I might have to pay $1,000 more for the insurance premium. And I just don't know how to plan for that. Also, whenever I call insurance brokers and tell them I'm trying to plan ahead to save up for car insurance, they immediately hang up. So I just literally have not been able to get any progress on this.
I don't know how to fit this into the baby steps. I'm just wondering what your guys' insight is on that.
Sure. So how old are you?
I'm 23.
Okay.
And you're going to purchase a car in cash. Do you know what the budget is right now? Do you have that cash saved up?
Right now, I'm in baby step two.
Okay. So you have a thousand bucks in your starter emergency fund, you're tackling debt. How much debt do you have? Yep.
I have $10,000 left in student loans. After that, I will be debt-free.
Oh, good. Great. That's awesome. How much do you make a year?
I make $138,000.
Oh, good for you. That's great. And for the car situation, what's the change all of a sudden that you're like, oh gosh, I really do need a car?
What's driving this decision, pun intended.
Yeah. So right now, I've been living in Seattle and I haven't had a car for the past two years. I just take public transportation anywhere or I take a Uber if it's time-sensitive. But I am going to be getting married soon and we're going to be moving to an area where I might have to start commuting by car to work. And it's just going to make sense for me to get a car based on my girlfriend's schedule, who will be my wife soon.
She works as a nurse. And so our hours are just going to be different. And so I'd like to get ahead on that so that I'm prepared when we need to sit down and think about our transportation options.
When's the wedding?
Next spring. We don't have a date yet, but next spring.
So we've got a year to sort of get this all, get our ducks in a row.
Yeah. I mean, if I were you, I think I would pay off that $10,000.. My next step would be to build up an emergency fund. And then I would have, yeah, I mean, you could have a goal of 10,000 maybe set aside for a car, and all of that, because, honestly, right now, and most people know this, car insurance is insane. right now.
I mean, everybody is feeling the increase, and it's been so dramatic is what it feels like over even just the last six months when it comes to car insurance. So, honestly, this time, next year, I don't know. I don't know what's going to happen there. It could be a change the other way, right? I mean, we just don't know that such a long amount of time for something that's been so volatile recently.
So if I were you, I would just plan on putting, having a car fund after my emergency funds. And it's almost like your baby's up three B, and instead of a town payment for a house, I would just do a car. Yeah.
Cool. Should I do that before investing into retirement?
Yeah, I probably would, because it's going to be a necessity, I would assume, if you guys are moving and you know you're going to need a car. And you're 23.. So, I mean, retirement, even if you have to hold off for a few more months of retirement, you're going to be okay.
Even if you start at 24, with your income, you're going to be unbelievably wealthy without any debt. Okay. Have you tried to check out our independent insurance brokers at ramsaysolutions.com?
I have. I actually talked to a trusted insurance broker, and what's interesting is that he told me, of the 15 insurance companies he covers, only three of them would even offer me insurance because I don't have any previous auto insurance.
Oh, yeah. No, right.
We did do a discussion and he said what was probably the best case would be to go onto my girlfriend's insurance, which she got from her parents, but she's paying $350 a month, which he said is way above the average, but he wouldn't give me a quote because I'm planning too far ahead. So, again, I haven't...
They'll need to actually know what vehicle and all the conditions and all that.
And that's a really good point, too, on his end, that once you guys get married, things that you can combine and maybe it is cheaper to go on her insurance after you guys get married.
Because both of your names will be on all the cars. on the insurance. Yeah. Right. That could solve your problems.
That could be helpful. But, yeah, I think... I really appreciate your planning, but I do think, yeah, there's... You can't really nail down a number, just like they're saying, because it is so far ahead.
And in the short term, if you want a car before then or need one, you might need to just budget and go, all right, it's going to be $700 a month for the short term to get insurance, but you've got to have it. Gotcha. So not something you can skimp on, unfortunately. Do you have parents that have insurance that you could jump onto temporarily?
Not that I could in Washington, because we're a different state.
Got it. Okay. Well, I like this plan. I think you're thinking the right way about it.
I would just pile.
. I would just have a pile of money and then, when it's time to buy the car and the insurance, there's just cash there and you can budget from there.
But if you're having a good time commuting in Seattle, keep it up.
Yeah, that's.
. Yeah, for sure.
That's the city life right there. I know. So good. Let's try to take a quick one here from Jared, who is in Denver. What's going on, Jared?
How are you doing, George? Doing well. How can we help?
Long story short, I was a law enforcement officer for about seven years. I was injured in the line of duty and forced to medically retire. So now I'm on a fixed income of $44,000 a year.
I'm a stay-at-home dad now, as my wife is doing real estate, and I cannot decide or figure out what type of remote jobs I could do that offer the flexibility I need for my 18-month-old son.
What does the childcare situation look like for the 18-month-old?
All three of our children so far have stayed home with my wife until they got into grade school. We have two in elementary right now and the 18-month-old is home with me.
Okay. And you're looking for a job that you could do while caring for the 18-month-old all day? Mm-hmm. So something pretty flexible where you might be able to get in a few hours during nap time and kind of log off and log back on. Exactly.
Yeah. I mean, I think a lot of those jobs exist now, especially in a post-COVID world. I'm going to hook you up with our friend Ken Coleman's Get Clear Career Assessment, as well as his new book, Find the Work You're Wired to Do. It's all paired together. Because I think right now you're in the research kind of dreaming phase.
And so I want to get you something that you actually enjoy doing versus just something that you can do. And I think, with your background, there may be something in the law enforcement world that you could do remotely.
And so I would look at.
That is actually kind of a curious part, and I'm open to your suggestion, but the curious part is, due to my disability coverage, I actually cannot do anything. first responder related. Oh.
Yeah. So that will limit you a little bit.
Yeah. That'll give you a boundary. But yeah, there's a lot of options out there, Jared. But I think George is right. If you can find something that you love and you're passionate about, get some hours in, bring in some extra cash.
That's awesome.
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This is the Ramsey Show. I'm George Campbell, joined by Rachel Cruz. The number is 888-825-5225.. You call us, we'll talk about your life and your money. And while you're hanging out, enjoying the show, do me a quick favor and do something.
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That's right, George. It's all about the algorithm. It's all about feeding the algorithm. No, but it is. Because we need to reach more people.
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Yeah. We don't have a massive marketing budget sponsoring stadiums. You know what I mean? That's right. We're not that people.
I know. But yeah, you sharing, sharing the love out there.
You are the marketing plan. You're the billboard. So thank you for that.
All right.
Kevin is in Pensacola, Florida. What is going on, Kevin?
Hi, George, Rachel. How are you guys doing today?
Doing great. How can we help?
You're good. So I just have a question. I've been watching your show for a while now, and regarding combining finances. And so I'm going to be getting married next month.
Oh, congratulations.
Oh, thank you so much. And me and my soon to be wife have taken, sorry, I'm a little nervous. We have taken a premarital counseling. And so we're on board with, regarding finances, the finance portion of our premarital counseling. But regarding my situation, we're actually going to be doing a long distance marriage.
So to give you a bit of a context, I'm actually active duty military. I have about four years left until I retire from the military. And so I'm living in Pensacola and she's living in the United Kingdom. And so the plan is, is that after I retire from the military, I'm going to be making my move over there to the UK. But in the meantime, we're not sure if we should just keep our finances separately for just a temporary until I retire from the military.
Or perhaps I was thinking, maybe another option is possibly getting a bank account that can support the UK and the US, because the bank that I currently have charges international service fees. And, you know, of course, you know, then you have the fluctuation of, like, you know, the currency conversions between the US dollar and the British pound. So I was just trying to see what would be like the best option for me to go.
Yeah. I mean, I don't know, George, what your thought is on this. I mean, mine, and I'm all pro combining money. You know that about me. That's like one of my number one things.
But there are some caveats on why you wouldn't. And I don't know, Kevin, this may be one of those. for me. I mean, if you're in completely different countries, different levels of...
If it's a logistical issue.
Yeah. I'm like, yeah, at that point, I mean, yeah, you guys could have different checking accounts, but you just, you know, communicate about it. You're obviously, you know, I guess promise each other that it's. there's no secrets, or you know, you guys look at stuff together, maybe, you know, once a month and you have a plan, you guys still have the same goals. But, logistically speaking, where your actual dollars and cents are for the time being, because you are in different countries with different banking systems.
Yeah. You may have to have separate ones just for the ease of complication, you know.
Mm-hmm. Is she working full-time?
She is, yes. Okay. She is working full-time.
And I'm guessing it's not an option for her to move to Pensacola and be near you?
Well, she's not opposed to it, but I'm actually going to be transferring to another location. So I'm not even going to be in Pensacola for very long.
But.
. Where are you transferring?
She's not opposed to moving to the US.
Say again? Where are you transferring to?
I'll be moving to Virginia.
Okay. Yeah. I mean, I think more of my concern is not necessarily the checking account, Kevin. I mean, it's being away for four years from your spouse. Like that's a...
A marriage surviving like that is just tough on its own. Have you guys been long distance for a while?
Yes, we have. And we do go back and forth. Like she'll come visit me and I go visit her. So we actually do go back and forth and visit each other.
Yeah. I mean, if she's unable for all the reasons that I don't know of, you know, why she can't move to Pensacola or Virginia, then combining finances may just be a logistical issue. There are accounts out there that help you avoid these international fees. I know one of them, this is not a sponsor, we're not affiliated, but Charles Schwab has an investor checking account that you can use internationally with no fees whatsoever. So you probably have done more homework than I have on this, but there may be, I'm sure, these kinds of accounts exist that will allow you to do this and switch currencies, and all of that with little to no effort.
Yeah. And I think the point of the combined account too, Kevin, is not just the logistical side is, you know, definitely a pro. when you're living in the same, under the same roof. Right. And you start having kids and like life starts happening.
You know, you're just functioning out of one account. It just makes communication just so much easier. That's one pro. But the other pro is, that is that piece of unity and seeing yourself as one. And I think for you guys in the season, you can still to a degree accomplish that.
It's, you know, the idea that your money, you guys are on the same page with it. But if you can't, from a logistical standpoint, figure out how to do this with currency, taxes, all of that, then for a short period of time, I mean, I would be okay.
So she's covering all of her expenses. You're covering all of your expenses. Is that the plan going forward?
Yes. That is a plan going forward. And, like I said, once I retire from the military and move over there, then we're both on board with combining our finances together.
Yeah, that's great. Yeah. And again, I never want to be legalistic with stuff. So it's not this. like, you know, I think the spirit behind it is what is the most important, right?
Is that your values and your goals?
Yes. That unity perspective, I think, is really important. So if you guys have a timeframe with all of this, and then that's the end goal that you both agree on, then I think that's great. But Kevin, too, I would really encourage you guys to look into her. moving.
I mean, it's different when you're dating and all of that. But when you're married to somebody, I mean, it's more enjoyable, because I'm sure, I mean, obviously you love her and you want to be with her. So I'm like being away would be so sad. It'd be so hard. I can't imagine.
Yeah. And again, I know we thank you for your service, too, because there are so many people that are deployed for nine months a year, right? Overseas, and all of that. A lot of sacrifice. There's so much sacrifice.
But if you can avoid some of that unneeded sacrifice, just meaning that she could be here with you while you're here, I think is going to be helpful for you guys as you start out.
Yeah. Well, that's a first. I've never taken a call like that. So thank you for enlarging my brain, helping me think a little deeper. today.
Hayden is in Denver. What's going on, Hayden?
Hey, guys. Thanks for taking my call. I was very excited. I've never called into a radio show before, so I'm a little nervous.
No, you're great. Thanks for calling.
The purpose of my call is I'm looking for some advice on what to do with the next move. So my wife and I are currently trying to sell our house. We've been Dave-ish for a little while. You know, we've been listening to the show and we want to commit to being debt free. So we're selling everything.
Selling our house, selling our cars, all that stuff.
Oh, my gosh.
Yeah. We're going all in. And the problem is that my wife is from the East Coast. I'm from Colorado. All of my family lives here in Colorado.
All of her family lives on the East Coast. We have a two and a half year old son and my family has not been, they're not very involved. Like, they're kind of cold and distant, and it's just, it hasn't been very enjoyable for my wife and she's really missing home. So she would like to use this opportunity of being debt free to move back to the East Coast. What I'm struggling with is I work as a firefighter in Colorado and I have great pay, great benefits, and I love my job.
If I were to move to the East Coast,
transferring medical certs and fire certs is not very simple and the pay and benefits are significantly less. So I'm just concerned, even with our new debt free lifestyle, of just not having enough. I'm not too concerned about not liking the East Coast. I'm sure it will be great, and having her family be more involved would be phenomenal. I'm just really torn with the idea of starting completely over.
There's a trade off here, Aiden, for sure. And it's not going to be easy. You're going to have to figure out the certs. You're going to have to figure out how to get your income up, hopefully faster, and maybe find out if there's other opportunities there that could increase your income versus taking a notch down.
And I would do a mock budget, Aiden, of what life would look like over there on the salary that you would have, and see how you guys feel. Because that's the part of being debt free, it gives you options. You can say, you know what, we're going to lower our lifestyle, to live where we want to live. And that's great. Or we want to have a higher standard of living and live somewhere else, like Colorado, where you guys are.
So it's really a choice you guys have to make.
That puts this hour of the Ramsey Show in the books. We'll be back before you know it.
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 amazing relationships. I'm Ramsey personality, George Campbell, joined by best-selling author Rachel Cruz, also my co-host on Smart Money Happy Hour. And this is your show. This is where you call in and we'll talk about your life and your money right in front of you and in front of all of America and across the world. now.
We've gone international thanks to YouTube.
And podcasts.
And podcasts. So appreciate you guys tuning in and calling in. The number is 888-825-5225.. All right, Aiden is calling from Houston, Texas to kick off this hour. What's going on, Aiden?
Hey, so I got a job opportunity to own and sell my own tools. I would own my own truck and everything, but the only thing is I would be going into a ton of debt. I'm thinking maybe $170,000 worth of debt.
Oh, my gosh, for what?
To own my own tool truck. I'd be like a franchisee.
This opportunity comes at the cost, so you're basically buying into the franchise to the tune of $170,000?
Yes.
This feels like a great deal for them and a terrible deal for you.
Well, the thing is, I can make like $180,000 a year doing it.
Why don't you do it by yourself, on your own?
I mean, because I wouldn't even know where to start at that point. But I was talking to them. I have to put like 20% down out of pocket on the table and they'll help me finance 80%.
I bet they will. I don't like this concept at all. What are you actually selling? What's the business?
I would be driving around to different shops and selling tools.
And to buy into it, you need to have the tool truck?
Yes, I would have to buy my own tool truck and I was looking at prices for those. It ranged anywhere from $100,000 to $150,000, because it has to be newer and it has to be low miles.
Hayden, what are you doing now for work?
I work at a tire shop. I make $15 an hour, but the thing is I'm only 19 years old.
I think you were sold a dream, Hayden. Can I say that? Because sometimes in these positions, and I'm not going to say that this company is like immoral or lying to you, but it's a sales position. And so if you're not good at sales, you're not going to make $180,000.. You're going to make $30,000..
I understand that you'll probably get a commission, a percentage over all your sales, and they're probably saying you could make $180,000.
But that's probably over a course of a long time of being able to have clients and long-term relationships. I mean, there's probably a lot that goes into that. I don't think it's just a light switch situation. And so they're probably selling you on something that sounds really good. And usually, if things are too good to be true, sound too good to be true, they usually are.
And with a quick Google search, Hayden, I'm finding some very interesting information about people who are also inquiring about this. Young guys who are thinking they're going to make a lot of money. And there's a lot of wisdom on the internet. And so I would do some deep research and homework into this. Here's just a quote.
This is not from me. Basically, they get you into a debt trap, force you to buy stuff you may not want. Then they make it hard for you to support your customers with warranty claims and service. They said some people are making good money. They have good territory, serving older clients.
But with the internet and the next wave of mechanics coming through, it could be phasing out these trucks for the most part. And so that's my worry. is you see other people making money, you think that could be me. And then here you are sitting with $180,000 in debt and not making as much as you thought. And so if this was a degree, I would also tell you this is a bad idea.
Yeah, but I think that you're on the right path, Hayden. You work at a tire shop, mechanics, understanding that world. You're probably really good at it, right? And so I would like to see what other positions are out there to move yourself up. I'm like, you know, like, I don't know, and being creative with what you know and what you have.
I think it's going to serve you a whole lot better than jumping into something that, yeah, I mean, that's a lot. That's a lot of money. That's a lot of money.
And also it's a sales job. So why not go apply for a sales job in that world? If you applied at Ramsey and we said, hey, you got the job, but you have to pay us $180,000.. You would laugh in our face.
Right? Yeah. I would hope you would. So I'm glad you called us before you made a bad decision and called us saying, I went $180,000 in debt for this Snap-on tool truck. What do I do now?
Yeah, that will equip you with what you need to succeed. And it's not all. the risk is on you, Hayden. They don't have any risk. It's all on you.
It's your personal loan that you're taking out to go deep into debt. So they have no risk. And yeah, that's, I wouldn't play that game. And I just, the $180,000 a year, man, that is just a, that's a sales pitch. And again, I'm sure people make that, but that's over years and years, and years, and years and years and years.
And so, yeah, I wouldn't do it, Hayden. Wouldn't do it.
Okay. Good to know.
I know, sorry to bust your bubble, but I do think there's other great opportunities out there that you can, yeah, you're making 15 an hour. I think you could be making more, right? I think that the trades is, is something, it's a lost art these days, right? I'm like, there is something there that you can make great money doing this kind of stuff.
Do you want to go into the trades, Hayden? Would you actually want to become a mechanic or do you want to stick to sales?
Well, I mean, I've talked to other people that I know that are mechanics. They said it's great for a hobby because right now I have a 91 vet. The motor just blew up. I'm putting a new motor in there. So, I mean, I've worked in my own cars before, but I don't know that I could do that for a living.
You're talking to full-time mechanics and they said it's a fine hobby, but don't get into it professionally?
Right, yeah.
That's very strange. Sounds like they don't want the competition from Hayden, giving them the smoke.
Well, yeah.
But I would look into it. I'm going to help you out because I want to help you take the right next step. And so our friend, Ken Coleman, also Ramsey Personality, has some awesome tools to help people find the work they're wired to do. So I'm going to hook you up with his Get Clear Career Assessment and his book, From Paycheck to Purpose. So hang on the line and I hope those resources help you figure out that next step, whether it is trades, sales, whatever it may be.
But at 19, now's the time to just try a lot of things out. But the key is don't go into debt for any of it.
That's right.
Thanks for calling, Hayden.
Hayden is not pleased. We appreciate that. He's not pleased with our advice. But you know what? I did my good deed for the day if I steered him away from this 200 grand franchise quote opportunity.
What did you do? You just Googled the...
Here's what I Googled, Hayden, in case you're wondering. I Googled...
On DuckDuckGo, thank you.
Tool Truck Franchise Cost Reddit. Because Reddit is where they tell you the truth, Rachel. I never go on Reddit. There's a bunch of subreddits under tools and forums and people are just sharing their story. People like Hayden saying, hey, what do you guys think about this tool truck franchise idea?
And so I go there just to see what the conversations are like.
Yes, yes. And I don't like when all the risk financially is on him and the company's not taking any.
And it's not an MLM, but it is similar in the sense that there is an upfront, hey, you got to pay to get in. There's a startup cost. You got to pay us for the tools. And then, oh my gosh, the upside of how much money you can make. They're always promising you.
They're showing you the testimonials from the 0.
001% of people who actually made good money.
And the percentage of people that actually quit and then are left with all the debt. High percentage, too.
There's the story. And we've seen that narrative happen. And so we speak out of love for Hayden and his future.
Good luck, Hayden. We believe in you, though.
We're wishing you the best, man. More of your calls coming up. 888-825-5225.. This is The Ramsey Show.
I'm George Campbell. She's Rachel Cruz. This is The Ramsey Show. Give us a call at 888-825-5225.. Let's go to the phones.
Christina joins us in Phoenix, Arizona. Christina, welcome to The Ramsey Show.
Thank you. Thanks for taking my call.
Absolutely.
Okay, so my question is, my husband and I are looking to buy our first home.
And we see a lot of these auction and foreclosure homes. And we were wondering if you recommend buying them. As well, if it looks like auction, you might have to have 100% cash, which we do not. But just wondering, kind of, information on auction and foreclosure. And if you guys recommend one or the other.
Or kind of the details of it.
Yeah, I mean, they can definitely be great options. And usually for people, if you're doing investment real estate, this is a great option to go down. Because you just get the best deal on the front end, right? You kind of get built in equity automatically. But there are some parameters.
I'm going to be honest, Christina. I'm not an expert on this. I wish my husband was here. Because he does this a lot and knows the ins and outs probably more than I do. But I do know you want to look in and make sure you have title insurance.
You want to make sure that the deeds are clean, titles are clean. There's definitely some hoops to jump through to make sure that it's a good deal for you. And, like you said, sometimes the person that bids and wins does have a lot of the cash up front. I know that's an advantage there. But yeah, what do you think, George?
Is it required?
It's not always required?
I haven't heard that it's always required. I think you can get it on a conventional 15-year fixed. What I would look into is doing your due diligence to see exactly what happened here. And what the condition of it is. You need to be extra cautious to make sure that you're not buying sort of a lemon.
Where you're going, oh, we thought it was going to be $20,000 to do the improvements. It's going to be $100,000..
Yeah, because for some people, as they're getting the auction, they'll just say sight unseen or no inspection required. Just to get their up on it, if you will. And I wouldn't want that for you when it comes to your primary home.
If you had a ton of money and you're like, yeah, if it's bad, and we could fix everything with cash, that's one thing. But I wouldn't recommend that unless you just have a ton of cash.
And the process can be slower. So here's my advice. I would choose your home based on the home that's right for you that you can afford. And if it happened to be a foreclosure, that's okay. I wouldn't just seek out auction foreclosures, because you're in a tight place financially.
I want you to move from a place of strength.
Yeah, okay, that's great advice.
Yep, absolutely. Thanks, Christina.
Thank you so much for the call.
And yeah, but those that are looking to invest in real estate for a lot of, and I know for Dave even, a lot of what he bought early on. And even with my husband Winston helping him and stuff. I mean, it was a lot of going to the courthouse steps and doing real estate auctions just to get a good deal on the front end. Because if you have the margin financially to be able, whether it is to go fix it and all of it, it is a great deal. But to your point, especially your primary home, you don't want a lot of hiccups.
And there's a cleaner way, faster way. To do it, to buy a home.
But with a foreclosure, if you can get it at 80% of the appraised value, minus the cost of repairs, we generally see that as a good quote deal. And you do, Dave said, you make your money on the deal.
That's right, that's when you get it.
Not with all your fancy renovations that you go to resell. And so, as you even do renovations, if you are investing to resell, you want to think about what's actually going to increase the value when you go to resell. And a lot of times it's cosmetic stuff. It's not the super expensive behind the scenes stuff. They just want a nice looking backsplash.
Yep, that's all they want. But, Christina, make sure to check out our real estate ELPs there in the Phoenix area. We have some great ones out there. And they can really help walk with you through that process. Because I think having an expert with you through it is tremendous.
So make sure to check out one of our real estate ELPs.
It's a good call. RamseySolutions.com is the place to go. All right, David is in Columbus up next. What's happening, David?
Hello. Thank you so much for taking my call.
Sure.
I have a question. It's kind of a mixed bag, but I'm somewhat new to the baby steps. And I'm really just trying to figure out how I can make more money. I have a full time job. I'm single.
I'm 37 years old. And I have quite a bit of debt. And the job that I have right now is I'm very grateful for my job. But I'm looking to try to figure out how I can get into something that makes more money. And something that I really love.
Right now, I have about $56,000 in debt. And I've tried. I've thought about maybe getting some certifications. But that takes a lot of time and money. And so I'm just trying to figure out how can I transition into a new career or try to find something that pays a little bit more.
I have my $1,000 emergency fund. I just did Baby Step 1 last month. Great. And I'm on Baby Step 2 now. And I have a side hustle that helps me.
That's actually how I got through Baby Step 1.
And most of my debt is student loans. I have a car loan. I have some medical debt. I have some debt to the IRS. So I just feel like if I didn't have all this debt, I could maybe pursue what I really want to do a little bit easier.
But since I do have this debt, I need to kind of keep my full time job. And be able to keep whacking away at this debt.
How much do you make a year?
About $67,000 a year.
And what do you do?
I work in the public sector. I essentially work with educational grants and administering an educational program.
What do you want to do? What's the thing that you're like, oh my gosh.
You said if I was out of debt, I could do what I want to do. Do you have that thing in your mind?
That's kind of another problem. I'm not entirely sure, but I have some ideas that are kind of all over the place. I've thought about becoming an audio engineer. I've also thought about becoming a voice teacher.
And I've also thought about going into technology of some sort. Right now, my main focus, outside of doing something that I really love, like something with music or the arts, or technology, is really just trying to make more money.
Yeah, I mean, I think if you found something that was a salaried position that you wanted and it was more income, you could totally make that move. during this Baby Step 2 process. I just wouldn't gamble on something like, I'll just make something up. Voice lessons that you're going to have to have a lot of clients and you're going to have to supplement and it's not there yet, but you really want to try it. So you're going to actually, to your point, make less at the beginning.
You know, all that. I think that will put you behind on the debt side of paying it off. So I would stick to what you're doing, doing your side hustle, unless another salaried position comes in front of you and it pays more and you feel like, oh yeah, that could be a great step. I'm just curious, how much do you owe in your car?
About $8,000.
Okay, that's great. Well, I'm excited for you, David. You sound like you're hustling, and I think that's awesome. I would just keep grinding away at the work side of it.
Yeah, I would add these side hustles and sort of make it your on-ramp to whatever the next thing is. And so, if you can find any opportunity, even if it's, you know, running the audio board at a local church, for example, and you're just volunteering on the weekends, that will give you some great experience that you can go, all right, I got my feet planted here. What else can I be doing? So have you looked into any opportunities to start doing some of this stuff you're dreaming about?
Yeah, I have. actually. It's funny that you say that, because just this past Sunday, I went to a church and shadowed their sound crew and learned a little bit about what they do, and I'm looking to do that at my own church soon. And so I'm kind of trying to connect with people and network and see if I can find people are doing what I'm interested in doing and just learn more and see if that leads to some opportunities.
Yeah, amazing. Very smart. And we'll help you with that. It sounds like you're living out Ken Coleman's proximity principle of getting around the right people to do the thing you want to do. So we're going to gift you that book as well as Ken's Get Clear assessment.
And that's really going to start to sharpen what this next thing looks like. Ken's new book coming out, Find the Work You're Wired to Do, has a free assessment in there. So we're going to send you a copy of that, because it'll help you actually make use of the results you get from the assessment and hopefully start to narrow down what that thing is. It may be a mix of all of them. for now.
You know, audio, voice, technology, they're all very interwoven. And maybe you have a little studio and you help young people get their start, whether it's vocals, music, engineering. I think there's some great fields there. And we've got lots of audio engineers here.
They're on the board right now. We love them. One of the best audio engineers, one of the greatest musicians I know, and James Child. So, you know, they did it and they're not that great.
And if they can do it, anyone can do it.
I'm kidding. They're the smartest people I know and they can turn off my mic at any time, but they've chosen not to out of kindness and grace. Thank you, guys. More of The Ramsey Show coming up.
This is The Ramsey Show. I'm joined by Rachel Cruz.
She runs at 888-825-5225.
. Alyssa joins us all the way from Alberta, Canada. What's going on in Alberta, Alyssa?
Sorry, what was that?
What's the vibe in Alberta?
Oh, it's actually pretty nice out right now. So, all right.
Wonderful. How can we help today?
My husband and I are wondering if you guys think it's okay if we stop investing for two and a half years in order to pay off our mortgage?
Whoa, why the aggression?
Because we want to be mortgage-free before we have kids, so that I don't have to work if I don't want to.
Okay, how old are you two?
23 and 25.
And what's left on the mortgage?
$167,000.
All right. What's the household income?
Gross annual income is about $150,000.
And that's with you working. So your goal is, hey, you're not pregnant, but once we start to go down that path, you want to be able to stop working?
That's right.
Okay, and you would not be able to do that today with the finances?
No, I don't think so. We would have to be cutting it pretty tight.
Okay. Well, I don't love the idea of you guys pausing, investing and unplugging that growth and those contributions, because you look 30 years from now as to what those will turn into and you'll go, oh gosh, that hurt my stomach a little bit. Because you guys have no debt in the emergency fund already, right?
Right.
Okay.
Yeah. Gosh, Alyssa, I'm actually kind of leaning because you guys are so young.
and you want to have this lifestyle change of staying home. I may be okay. I would make it a goal to say maybe we do it for a year. Maybe we pause investing for a year. and what would it look like?
Because the truth is, too, by the time you get pregnant, it's nine months, you'll have maternity leave.
What's your maternity leave situation with your work?
12 or 18 months, I get to choose.
Oh, wow. Paid?
Paid.
Not full salary, but a portion of it, yes.
Okay. Well, I would factor that in to this scenario as well.
Because if you're doing 15% of your household income, that's $22,000 that you would not invest but throw at the house. So either way, it's not going to knock out the mortgage years sooner by pausing the investing. So I'm just curious what's stopping you. Let's say you guys wanted to have kids now. Could you do that, take your maternity leave, and then see where the mortgage is at at that point?
Yes. It just wouldn't get paid off.
in my calculations because I was using an Excel spreadsheet, and put in all of the potential lump sum payments that we would be able to do over the next two and a half years. And that brought the payoff date to September 2026..
Yeah, it would be quite a bit farther.
I don't know why it would take seven years.
Yeah, that doesn't make sense.
And I don't want you to not invest for two years straight.
And so if this was on the cusp of just a few months of not investing, but right now we're sort of talking in theoreticals and hypotheticals. And so I would keep on the path you guys are at. I would aggressively attack the mortgage. I would get that budget down and also make a mock budget and see what life would be like living off of just his income.
Yeah, how much is your mortgage payment a month?
About $1,820.
Okay.
And what's his take-home pay?
Together, our take-home pay is $110.
. I'm not sure. His gross annual income is about $90..
I'm just wondering, if we can get him to take home about $7,000, about $7,500,. that would put your mortgage right at about 25% and still give you margin to throw extra at it.
Yeah, it just all depends on how busy his work is, really, because he has months.
Can he find another job to do when it's slow times?
Possibly, but he would have to be able to go into work whenever his boss needed him. He's an electrician, so if they have projects on the go, then it's crunch time. And if not, then he might be able to get a second job, but this job would have to be a priority.
I would be okay because of your age, because you guys are such planners.
You know what you want. You don't want to be working when you have a baby. There are these life-big things, and if you have to pause for a year for investing in order to make these things happen, I would be okay with it. I would, but I also would say we do find people, they pause investing,
they have a nice trip, so we'd wait another year. We'd upgrade the car for the baby. That's right. You start bringing in the stuff, and I don't want these years to go wasted for you guys financially because you put yourself, you work so hard to be in such a great position to gain so much momentum, but I also understand life choices in the moment. You want to be able to have that peace too.
Even longer than that. Also, have some of this with an open hand. We never want people to not have a baby or not get married because of where they are financially either. I do want that for you guys. I want you to be able to start that family, but I do understand the value that you have of wanting to be home, which is understandable too.
Not having $1,800 go out.
helps with that. That's serious.
That's life while you're at it, because Baby Step 4 is intense to intentional. You don't have to go full throttle, but you also have a pretty intense goal of wanting to stay at home and go down to one income. A lot to think about there. Gavin is in San Antonio. What's happening, Gavin?
I'm calling in because I'm basically in a situation where I owe more on a car than what it's worth.
Welcome to America.
It's a little different. I got a private car sale and I purchased it in cash. I made the foolish decision not to get a pre-purchase inspection.
Effectively, everything looked good. Everything appeared good, but I took it to the mechanic just to have it looked over, just to make sure everything's okay. It came back that it turns out it has about $8,000 worth of repairs on a $5,000 car purchase.
Oh, my gosh.
You bought the car for $5,000 in cash. Yeah. You didn't do the pre-purchase inspection? You did it after?
Yes.
You did a post-purchase inspection. It's like getting your house inspected after you live in it.
Let's see what's wrong with it.
That was definitely now my proudest moment. Like I said, I looked over it and everything looks fine. There's nothing glaring, but come to find out.
it looks like a new transmission.
What's going on with it?
Well, apparently, something about the front and rear catalytic converters, which are expensive. How is it?
How is it driving?
It drives fine. You really wouldn't notice. There's some squeaking from under the axle. There is a check engine light on.
Have you gotten a second opinion, Gavin?
I have yet to.
Sometimes. And I may be speaking as an ignorant person with cars, but I'm definitely one of those people you go into the mechanic and you're like, oh my gosh, you got this and you got this. It's like the dentist. You got this and this and you got to do this.
Wiping the sweat off their brow. I haven't seen something like this since 1987, man.
Holy crap,
or I don't want the car to blow up or something. We want to make sure that you're safe. But I would go get a second, even third opinion, because this is such high pricing that they have for you. before you go and do anything. I would ask around.
But I would not pay $8,000 to fix it.
I feel that too. That being said, let's just say I get a second and a third opinion, and the repairs are still worth.
and maybe best case scenario to salvage this from here is either resell it at a loss, because I'm not unethical to do what that has to mean,
or use it as a trade-in to purchase a car from maybe a lot in cash.
Either of those options would be better than what you got right now. And it stinks. That's a stupid tax you pay.
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Welcome back to the Ramsey Show. I'm George Camel, joined by Rachel Cruz. The number to call is 888-825-5225.. Well, Rachel, before we get to the lines, we've got an exciting announcement that we launched last week, the Live Like No One, Else Cruz.
It's back, you guys!
I petitioned to call it the Rachel Cruz and have you as the headliner.
Thank you, George.
They didn't go with it. It's fine, it's fine. So this will be Dave Ramsey, all the Ramsey personalities, including myself and Rachel, will be there seven days at sea, March 22nd through the 29th of 2025.. Special guests. We've got a lot of musicians,
magicians, songwriters, restauranteurs.
I'm sure we've talked about this before. The original one, you guys, was set to set sail March of 2020..
Great timing, Rachel.
We're bringing it back, though.
It's a comeback.
And it's been almost five years. Isn't that crazy? It'll be five years from when it was supposed to originally happen. But we've had so many people randomly be like, we were signed up for the Cruz. When are you going to do it again?
Yeah, there's a lot of you guys out there that really wanted to do this. So we're here for you.
Back by popular demand. Yeah, the last one in 2020.
is not for everyone. This is for those that are in baby step four and above. This is a debt-free celebration. So if you've become debt-free, you've got the emergency fund, you have budgeted for something fun to celebrate, the Cruz is a great way. We're going to go to Turks and Caicos, St.
Thomas, San Juan, the Bahamas. Book, your cabin, ramsaysolutions.com slash Cruz. I've got to work on my tan. I've got one year to get a base tan.
I'll give you my spray, tan girl.
Sure, okay, look out for that. I have one.
Mine's a week old right now, so it's faded.
And it shows.
It's fine, we'll have a good time. It'll be a blast. ramsaysolutions.com slash Cruz.
I'm so pale.
Let's get to the lines. Susan is in New York. New York, aptly named. What's going on, Susan?
Hi there.
I'm almost 59, and I have been a public school teacher for 37 years.
Oh, wow, thank you, Susan.
What a career.
Thank you. I have kids in public school, we appreciate you.
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