The Ramsey Show - App - Accepting a Monetary Gift With Humility (Hour 2)

Episode Date: June 3, 2019

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is The Dave Ramsey Show, where you learn to take control of your money and create a life you love. I am filling in for Dave, Rachel Cruz, Ramsey, and personality as Dave is out of the office traveling. And so I am filling in this hour, taking your calls on your life and your money. So it's a free call anywhere in the country at 888-825-5225. And here to hang out this hour. And it's exciting. I've, uh, well, well, Dave is out traveling. I am here in Nashville and I was looking at our live event schedule

here in the studio and realized that I am out this entire fall. I had my last money and marriage event with Dr. Les Parrott in Dallas a few weeks ago, which was fantastic, a really fun event, but I'm expecting baby number three, so I am grounded. I am here in Nashville

and so not traveling this fall, but we have some great events coming around the country, possibly to your neck of the woods this fall. We have our Smart Conference in Sacramento on November 16th, and we also are taking our Smart Money events, and we're changing it up just a little bit, and they are now our new Financial Peace Lives, and that will be in Austin, Texas on September 12th with Anthony O'Neill and Chris Hogan, two of our Ramsey personalities, and then also to Charleston,

South Carolina on November 20th with Dave Ramsey and Chris Hogan. So some fun events coming up this fall that you can definitely check out at DaveRamsey.com. Again, I will not be out any of them, but we have some great personalities with some really fun events. So you can make sure to check those out if you're making your plans this summer. All right, we'll go right to the phones this hour.

And this is Tarsha from Fayetteville, North Carolina. Hey, Tarsha, welcome to the show. Hi, how are you? Doing great. How can I help? Good. Yes, I have a question. Now, I've read the Total Money Makeover book. I've read that, but I know there's the financial piece and there's other books and things like that, and I heard about the envelope concept, too. Yes.

Just trying to see, like, what order we need to go into, because of my husband's schedule, I want him to be there with me, and I know that Financial Peace is online. So just trying to see, like, what order would you tell me to go in? Yeah, absolutely. Well, Financial Peace University is our nine-week course, and like you're saying, you can go to a class or do it online. And yes, I would definitely recommend that you and your husband start that.

And what that is, and just like the Total Money Makeover, we'll walk you through our seven baby steps of really gaining control of your money, getting out of debt, everything from even paying off your house and being able to live generously. And it walks you through those steps. So you guys together will start that process. And baby step one is $1,000 emergency fund. So that's going to be like the very first thing that you guys start.

And in the meantime, this is not a, you know, kind of a step that you check off, but the budget and the budget is something that you guys can definitely learn through Financial Peace University, or you can download EveryDollar. It's our free budgeting app, and it's terrific. I love EveryDollar. And it really breaks down and shows you exactly how to do a monthly budget, because are you guys doing a monthly budget together right now? Yes.

Now, we have the emergency fund. We have that set. Oh, good. We're ahead. We're just trying to see if Financial Peace is peace more in depth than the total money makeover or where does the envelope system come in? Sure. Well, the envelope system is just a tool to use with your budget.

And so you're going to look at your budget and find the categories that you tend to overspend on. For a lot of people, that's food, grocery shopping, restaurants, clothing, personal, whatever those categories are. And you're going to get, you can get old fashioned envelopes, you know, restaurants, clothing, personal, whatever those categories are. And you're going to get, you can get old fashioned envelopes, you know, from the bank right on the front food and take your category that is food in your budget, cash it out and put that cash in the envelope. So when you go out to eat, when you go grocery shopping, you take that and that's what you spend out of. And so the concept there is that you're using cash and not plastic.

And obviously, a debit card we're great with, and it's considered plastic, but you actually spend less when you spend with actual physical cash. And so this is a great tool to use, especially if you guys out there listening are first-time budgeters. Your first 90 days, do the envelope system. Cash it out. Have that cash because it's just a great accountability partner. So your envelope system is partnered with your budgets. And then Financial Peace University is the class that you'll walk through, which walks you through, again, through the baby steps and that you would read through with Total Money Makeover as well. So thanks, Tarsha, for calling in.

Budgeting might be one of the hardest things to create the habits because what ends up happening is you have no idea where your money's going if you're not living on a budget, right? You have no plan. You have no idea. But when you're doing a budget, you're saying, OK, this is where every dollar is going. My income minus my expenses is going to equal zero. So every dollar is assigned to a category. And so this is just, it's a powerful tool, America. It's a powerful tool. So make sure you definitely check out every dollar, do your budget. All right, coming up next is Crystal from Detroit, Michigan.

Hey, Crystal, welcome to the show. Hey, so hi. Thank you for taking my call. So I have a question. So I currently have 10 closed accounts on my credit score. I was just trying to figure out which one do I pay first and how do I go about setting a budget for my future finance? Absolutely. Okay, so how much debt do you have, Crystal?

So in total, with my student loan, car debt, car loans, and any other miscellaneous, I want to say about $37,000. Okay. And that's just your car loan? Or that's including your student loan? It's including my student loan. So I have a total of two car loans. I have recently co-signed on a vehicle for my oldest sister and within maybe a year or so, I was trying to get her to, you know, refinance, but come to find out she was never willing to refinance. So later down, maybe six months later, I didn't find out that she lost her job until the finance of people had caught me. So at this point, everything was out of my control and the car got repossessed. I was starting to make a few payments so I could take a settlement

with them, but my own bills had came in the way of trying to make up with the other bills that I was trying to pay down. So by me trying to pay down my regular bills and trying to just stay afloat with my everyday bills, everything just became too much and overwhelming and everything just closed. So now I'm in a position where I receive a new job, and now I'm just trying to pay off my past debt so I don't get into no more debt or people coming after me for soup. Sure. Okay, so Tarsha, what's the debt that you co-signed on?

It was the car, and how much is that? It was about, after the total cost, it was about $13,000. Okay. And then what's your other car debt? About $15,000. Okay. And then the rest is student loans? No, no, no.

So my student loans is only about $7,000. And then it's a credit card and like a finger hut bill and then like insurance. Because my sister, she didn't pay their insurance and it went up ran my credit score and then hey crystal i'm gonna put you on hold real quick i'm gonna take you back after this break so that we can break down these debts and get you a good plan to start paying them off and getting control because it sounds like it's kind of all over the place. So this is the Dave Ramsey Show, America. Over the years, I've seen so many families suffer by not having life insurance.

It's not that they didn't care. It's just that they didn't know. So they did nothing. That's a huge mistake. Listen, husbands and wives, moms and dads, think about it. If you died, how would your family pay the bills, the mortgage, the food? This is what life insurance is all about. And term life is the only way to go. It's not expensive and it's not complicated. Stop wasting money on cash value plans. You need 10 to 12 times your income in protection, and I recommend 15 or 20-year plans. I also only recommend Zander Insurance and have for almost 20 years. These are the people I use, and they only offer the plans I recommend.

Call 800-356-1780 or visit zander.com and compare online it's just the smarter more affordable way to buy insurance that's 800-356-1780 or zander.com welcome back america this is the dave ramsey Show, and I am Rachel Cruz, Ramsey personality, filling in while Dave is out. And it's a free call anywhere in the country at 888-825-5225. All right, we had Crystal on from the first segment that we're going to bring back in. And, Crystal, you were listing out all the debts you had, everything from student loans, credit cards, car loans, all the above. So to answer your question just specifically,

we always teach paying off your debt smallest amount to largest amount. This is the debt snowball. Okay. And so when you co-signed with that car loan, you're going to put that in because you said it's going to be repossessed? No, it has already been repossessed. They already sold it at auction and now it's just paying the depreciated amount. Okay. So you learned never to co-sign, correct? Yes. Okay. Lesson number one. And then you're going to start paying off all of this debt. So you're going to take the $7,000 credit card bill, pay that off first and the $13,000 car loan, so on and so forth. And so the reason we do this is because I want you to get some quick wins because I can tell by your situation, it's a little scary, right? I mean, you're owing a ton. How much do you make a year? I want to say about roughly $35,000.

And then I have like a little small serving job. So that's about an extra $200 in my pocket probably every two weeks. Okay, good for you. Well, I would say your life is about to end, Crystal. Because what I want you to do is I want you to sacrifice, okay? You're making a good amount, $35,000. You're serving. You know, you said, I want you to get another job. I mean, I want you to go crazy to get all of this debt paid off. And again,

by doing it smallest amount to largest amount, you're getting those quick wins. A lot of people go about this, what they do, the highest interest rate first, because they think it's mathematically correct. Yes, it's mathematically correct, but that highest debt could have the highest interest rate. And so it's like climbing this huge mountain. You need these quick wins. Your behavior change has to occur, and it's going to occur when you have the encouragement of paying off those smallest debts. So I hope that helps, Crystal. But again, getting on a plan, writing it down, and attacking this debt with fierce intensity is going to change your outcome. All right, up next is Jenny from Charlotte, North Carolina.

Hey, Jenny, welcome to the show. Hi, Rachel. Oh, my goodness, I just got your contentment journal, and I think it's the best ever. So thank you for writing that. Oh, thanks, Jenny. Oh, I'm so glad. I'm so glad you're enjoying it. Thanks.

So a quick question for you. My father is in Baby Step 7, and my husband and I are in Baby Step 3B. Okay. My father is really concerned about our inexpensive cars that we paid for cash. One is valued at $2,000, and one is valued at about $7,000. Okay. And I have two little girls, two babies, and he wants to gift us $25,000 for a car to be specifically spent on a car. And it's funny, I'm in your contentment journal because I'm in the humility section now of like,

you know, I've kind of skipped around a little bit because I've tried to find the answer in your book. But do I do I accept this with humility and humbleness and lots of gratitude? Or do I be firm with dad saying, Dad, we're still saving for a down payment. Thank you, but no thank you. What do you think? I think it's a really good question, a really mature question, and I think the fact that you're asking it is going to give me a different answer. And considering your situation, you guys are obviously working the plan.

You're out of debt. You have a fully funded emergency fund, which is Baby Step 3. Baby Step 3B is saving up for that down payment. And you guys are doing it. So if you were calling me and you're like, hey, we're living paycheck to paycheck. We got car loans. We have student loans. We don't really budget.

And my dad wants to give us free cars and sounds great. Then I would probably say, hey, you know what? I think you guys need to create some goals around yourself so you guys as a couple can win before daddy comes in and saves you. But you guys have expressed a lot of humility already by asking the question. And you're showing responsibility that this gift is not an entitlement to you. This gift is not going to hinder you. This gift is going to help you guys.

I mean, that's a huge blessing. And considering he's done the work on his perspective, it is the whole idea of I get to change my family tree. Like I get to impact my kids' lives. And I think that that's just absolutely incredible. So Jenny, if there's no strings attached, no weird emotional thing, or he has some terms that if I give you these cards, you have to do X, Y, and Z. If it is a true, tried and true free gift to you guys because of the work that you've done and where you guys are at, I would take it. Okay. He's read Dr. Henry Cowell's book, Boundaries, so he's good to go with that, and I don't

see any strings at all. So thank you. That's kind of what we were leaning towards, but just wanted to see what you thought. No, and I appreciate, again, you asking the question because not everyone has the maturity to even think through, hey, should we do this on our own? And I think that there are things as couples that, you know, you know, like getting out of debt,

I think there's these incredible goals that you can make, and you guys have done that. I mean, you've proven that you're responsible and that this gift is truly a gift that's going to help you guys and not hinder you. And that's incredible. I mean, seriously, that story, Jenny, is why we do what we do of getting people to a place where they're out of debt and they have freed up income to be incredibly generous. And that may mean that they turn to their kids and say, hey, I'm going to help you out. And again, it's not enabling.

You're not enabling bad behavior. It is a true blessing. And I think that's incredible, Jenny. So really, really excited for you guys. All right. Up next is Danielle from Boston, Massachusetts. Hey, Danielle. Welcome to the show.

Hey, Rachel. Nice talking to you. Thank you so much. How can I help? All right. So I currently make about $30,000 a year working in a daycare. I have my real estate license, and I've been really wanting to jump into that full time. I'm, you know, needing the daycare job just to, you know, paycheck to paycheck, paying the bills.

I'm in baby step two. So I am actually about to be a surrogate mom and I'm going to have about after tax implications and all that, about 50,000 over the next eight months. And I'm wondering, should I take this opportunity to like pause baby step two and jump right into the real estate to give my income a huge boost? Or should I just still be focusing on getting that debt paid off? It's going to take pretty much every penny of it. Okay, so have you been practicing real estate? Because you said you'll get a huge boost if you do this. Are you confident in that?

I had about two sales last year, but I've now joined a team that's going to give me a lot of support to really blow up. It's just I'm working 60 hours a week, so I don't have time to really do real estate the way it should be done. Okay, that's great. And how much debt do you have? I have about $15,000 left in student loans and about $7,000 in consumer debt. My car is paid off. It's like credit cards. Okay, perfect. And real estate, is that your passion? Is that your love? That's where you want to be?

Yes, I've been wanting to do this for years. Okay, sounds like it. I can hear it in your voice. So I would say, yeah, considering you're going to be getting this $50,000 over eight months, I mean, Danielle, that's going to help you knock out this debt in full, correct? Most of, well, about 25, 30, more like 30,000 would have to basically be like taking care of my regular monthly bills. But you'll be making money doing real estate because you've proven that, correct?

I'm just worried because it's not, you know, it's not always, it's not really a sure thing, sure thing. I just wonder what I should do. Yeah, no, no, no. I hear you. I hear you. Okay. So, yeah. So what I would say is if you're, if you're going into surrogacy, you're going into, you know, being pregnant, is your insurance covered by the daycare? The insurance, actually, the intended parent, she has purchased the health insurance that covers everything. There's nothing out of pocket for me.

Okay, I got you. I got you. Okay, so what I would do in your shoes is considering you're going to be pregnant, and a pregnant woman, myself right now, I know how you're going to be feeling. And so what I would say is stick with the day job. Okay, you have that going. And then when you can do real estate on the side, which is most of the time at nights and weekends is when most people go and they look at houses. It's when they're not working.

And so pick up a side gig there doing real estate. Prove some plans to say, okay, I can do this. Get some best practices. You're going to have the child, get the $50,000. And then when you come back after having that child and then look up and really evaluate. But I probably wouldn't make any sudden moves during pregnancy until after the baby. All right. Again, free call anywhere in the country, America, 888-825-5225.

This is The Dave Ramsey Show. Welcome back, America. This is The Dave Ramsey Show, and I am Ramsey personality, Rachel Cruz, filling in for Dave. And it is a free call anywhere in the country to talk about your life and your money at 888-825-5225. And so you can always check out the Dave Ramsey Show podcast, wherever you listen to podcasts, as well as the Rachel Cruz Show. We have a show over on YouTube and Facebook called The Rachel Cruz Show. And it's all about how to save money, take control of your money, but create a life that you love. So you can check out new episodes there. And we actually lifted the audio from that show and created a podcast with some other commentary and teaching around that. So that's been really, really fun.

We launch a new episode every other Monday. Some podcasts, we have some surprise episodes throughout different weeks. So you'll get one of those if you go and subscribe. They kind of just pop in randomly as well. And this last episode, which launched a week ago today, was all about no matter what type of personality you have, you can win with money.

Whether you're a saver, a spender, a free spirit, a nerd, or even getting down to the nitty gritty of personality types. I had Ian Cron on who is an Enneagram expert. If you don't know what the Enneagram is, Google it. It's fascinating. It's crazy. I've done every personality test there is out there and this is probably one of the most interesting ways

at viewing your personality. It's these nine types. So I had him on just to kind of talk about how different personalities relate to money. So it was a really, really fascinating episode. Again, you can check that out on Facebook and YouTube as well as the Rachel Cruze Show podcast. And I'm also on Instagram, Facebook, and Twitter as well as the Rachel Cruz Show podcast. I'm also on Instagram, Facebook,

and Twitter as well. We actually have what's called the official Rachel Cruz community. It just sounds so official, but there's tens of thousands of you there. It's always fun to pop in and ask you guys questions. We get ideas for the show and we take polls. You guys are my focus group, which is

always fun. We also get some great questions in. And so Alicia asked, Rachel, we have a four-year-old. When is the best time to save for college? Well, I'd say the best time is when it's time for you guys to save for the college, which means I want you out of debt, and I want you to have a fully funded emergency fund of three to six months of expenses, and then funding 15% of your income into retirement.

So that's baby steps two, three and four. And then baby step five is kids college. And when you look at this, you know, you're looking at the kids college. There's different investments that you can look into. We always recommend the ESA, the educational savings accounts. You can invest up to two thousand,000 in there a year. And it grows tax-free. It's an amazing thing.

It grows tax-free. And it's a great tool, great vehicle to use. So you can check that out. But it does have an income limit. And you can only fund a certain amount of money a year, $2,000 right now. So if you wanted to fund more or you were beyond the income limit, then what you could do is open up a 529 plan. But check out our SmartVestor Pros. You can check those out at rachelcruz.com and they will walk with you through all of that because you want someone who is an expert in this world to help you, especially when it comes to retirement investing and kids college.

But you always want to save for your kids college. Again, after you're out of debt, you have an emergency fund and you're funding retirement. And I hear a lot of parents say, well, I feel like a bad parent. I feel like I should be doing this for my kids. And I'm telling you, taking care of yourself first, meaning you're out of debt and you have an emergency fund, and then you're preparing for retirement. That is the order.

OK, that is what you want to focus on because retirement is going to happen whether you like it or not. It's going to happen. Your kid may or may not go to college and your kid, your junior, has a thousand different ways to pay for college, okay? There's so many options

and we can dig into that subject later, but man, there are options out there. But taking care of your household you first uh is so so important to lay that really strong foundation and then you can dive in to kids college but great question alicia all right up next is jennifer from reno hey jennifer welcome to the show hi thank you so much for taking my call today. Absolutely. How can I help? So we are a family of five. We have three kids under three. Oh, wow.

And we have a total debt of around $300,000. $250,000 of that is a student loan debt. And so we've, at this time, kept it a little bit separate from our snowball. And we're also in stork mode. Yeah. What's're also in stork mode. Yeah. What's the degree in? Occupational therapy. Is the person that got the degree, are they using it?

Oh, yeah. Oh, yeah. Okay. Good, good, good. Oh, yeah. Oh, yeah. Don't worry. I'm thankful because sometimes we get the opposite, and I'm like, oh, gosh.

So how much are you guys making a year? Between the two of us, so I stay home. But between the two of us, I would say that in our best year, we probably make around $90,000. I'm actually going to return to work soon, and so we probably will hit, like, $120,000. My question is that, so we have a rental that is, we're, blah, blah, blah. We are landlords by default. We lived in a house and it was too small for us and we moved out and now we have the house. It's currently on the market.

We stand to make about $100,000 from the sale of that home and that will pay off about $45,000 of debt that is not the student loan debt. And obviously, I know that according to the steps, we should be paying off, you know, the rest of that money would go towards that student loan debt. I think we're a little bit nervous, though, because we do have three young kids. And it's a huge number. And we're both in our late 30s. So I'm 38 and my partner is 37. And so I think we're just kind of wondering if we should actually make that be our next goal and follow like the baby steps true, like tried and true. Or if we should kind of come at it from a different angle and, you know, put it to the side and let it go for a little bit. I don't know. It's very scary.

Yeah, no, it is. And those numbers are, I mean, yeah, it's massive. I mean, when you look at $300,000, I mean, seriously. And even if you're making $120,000, I mean, it's still going to take you guys a couple of years definitely to dig out of this hole. Yeah, we did the math, and it's like five years or something. Yeah, absolutely. Okay, so if I were you, I would sell the home tomorrow. I mean, you have it for sale.

How long has it been on the market? Only like 35 days. And we actually had tenants in the home that was preventing it from being viewed for a while. They were being a little uncooperative. And so now it's empty and we're getting a lot more viewings. And it's summertime and it's a tourist town. So I feel like it's going to happen quickly for that. Yeah, absolutely. time and it's a tourist town so i feel like it's going to happen quickly good for that so yeah absolutely well once you get that knocked out i mean the 100k i would put directly towards your

debt so that's going to be the other 100,000 plus plus 100,000 of the 250 of your student loans oh no wait that's um that was a mistake so we stand to make a hundred thousand on the sale of the house and that's what we have to pay towards debt. That's it. Okay. But you guys have 300,000 of debt. Yeah. Yeah. Okay. Okay. Yeah. So you'll have 200,000 after that. Yeah. No. Okay. That's great. I mean, okay. Yes. So, so what I'm saying is yes, sell the home, take all the equity, everything you're going to get from that home, throw it towards your snowball, which is huge, Jennifer. I mean, like that that's going to get you like massively ahead considering the amount of debts you guys have. And you're going to have 200 K and you guys are going to sacrifice.

You're going to go back to work some. He may get an extra job and you guys buckle buckle down uh for a few years and and pay this off because i do i see the light at the end of the tunnel for you i mean it's right there and it is going to take a lot of work and a lot of sacrifice on your end because you're not going to act like you're making 120 when you go back to work you guys are going to act like you're making 50 and you're going to put all of this money towards getting out of debt because man when you can get this off your shoulders it's going to, it's going to be massive. But selling that home, considering it's not your primary home, it's a rental home,

definitely sell it. Put that money straight towards paying off that debt. And again, a couple of years of sacrifice, man. And you guys got it, Jennifer. You really do. So it's amazing. When you start looking at the math, it ends up being a little less scary when you actually can map out and have a plan.

But when debts just go in your head and it's just fogging everything up, it is tough. It is tough to make the numbers work. But, man, you guys, it is. I see it. I see the path for you. So I hope that helps. All right, you guys, again, we have one more segment left. And a free call anywhere, 888-825-5225.

This is The Dave Ramsey Show. Welcome back, America. welcome back america i am ramsey personality rachel cruz filling in for dave this hour and going back to the phones lily from spokane washington is up hey lily welcome to the show hey thanks for taking my call rachel absolutely how can I help? So, I'm in not a huge pinch, but a little pinch. I am selling my car today because it needs new engine mounts, and it's just too expensive to replace. And my mom said I could borrow her car, but she's probably going to need it back by the end of the summer. I've been approved for a $10,000 loan, which I wouldn't use all of it for a car. But would you recommend me buying a car before the end of the summer or saving up as much possible money as I humanly can? Lily, how old are you?

I am 24. 24. Do you have a job? Yes, I have several jobs. Okay, how much do you make a month? And I have a one-year-old. Okay, how much do you make a month? I think I probably make, right now, probably $1,500 a month, maybe. Okay, and are you living on your own are you in charge of all bills no i'm living with my parents you are okay so do what bills do you have what do you know

your monthly expenses are how much of that 1500 goes to bills um a lot of it a lot of it okay do you have a monthly budget? I do. I just haven't been very good at following it. Okay. Yep. Totally understandable. Okay. So a couple of things, Lily.

Number one, I want you to start taking more control over your money. The fact that you are even like, oh, I think I make this a month. Maybe because it varies month to month. But I want these numbers just like in the back of your mind that you can spit out at any time because you know your money so inside and out so living on that budget knowing what you're making knowing every single expense and then knowing what you can save a month and even talking to your parents since you're living at home right now and to say hey mom and dad listen here's the situation i don't have a car it's being sold it's sold i have mom's car

she's going to need it back in three months and so for these three months this summer if there's any bills that you're in charge of at the home maybe you ask for a little bit of grace during the time so that you can save up for a car because lily no i don't want you taking out a car loan no okay i don't no amount of money even if you have to go drive a $1,000 car, go drive a $1,000 car. I mean, do what you can. So, yeah, the answer to that definitely is no, is not to take out that car loan. And what a gift to have the car for three months and to tell your mom, Hey, listen, I'm showing a lot of responsibility and maturity because I want an end date to when you need this car

so that I know exactly to the day how much time I have to save. And I want you to map out and say, this is exactly the amount of money. This is my goal by the end of the summer to put towards a car. Because a car is a necessity, right? Your food, shelter and utilities, transportation, clothes. I mean, there are things that we have to have to survive. And a car definitely is one of those things. And so I want you to be able

to have a car and you have it and you have a one-year-old you said so I understand having a baby you want it somewhat safe and all of that but all of those things are not excuses to go and take out a car loan so the fact that you're on the fence I'm thankful for because if you called in just said well I'm going to take out a $10,000 car loan probably be a little bit of a different discussion so the fact that you're even asking the question, I'm grateful for, but my answer is no. All right. Up next is Kyle from Milwaukee. Hey, Kyle, welcome to the show. Hi, how are you? Doing well. How can I help? So I just started talking to a financial advisor at the beginning of May and he turned me on to Total Money Makeover. So I listened to that and kind of in the middle of May and he turned me on to total money makeover. So I listened

to that and kind of in the middle of May, I started to do some moves with money and stuff like that. So what I've got left now is about $9,000 in a mutual fund and I'm in debt on a student loan. I've got fifty two thousand dollars on my income a year and I would like to have a place to live in. Right now I'm trying to save money by staying with my sister and brother-in-law. So I have no rent and so I can pay off my car loan pretty quickly by September based on my budgeting. But I'm wondering whether I should rent or if I should start a mortgage to pay for a condo that's on the lower end about the same amount I would be paying for rent. Yeah, great question. Well, while you're doing the baby steps is what we call.

So you're going to want $1,000 in the bank, pay off your debts, get a fully funded emergency fund, and then save up for a down payment on a home. So the quick answer is no. If I were in your shoes, I would 100% rent and I would go cash out them. Is the mutual fund, is it retirement or is just a standard mutual fund without penalties if you cash it out? It's just a regular mutual fund without penalties if you cash it out? It's just a regular mutual fund. I have a separate retirement, which is $42,000 right now. Okay. Oh, that's great. Okay. So what I would do is stop retirement, which if your financial advisor is not a smart about SurfPro, they may kill me, the fact that I gave you that advice. But what you want to do is you want to

stop all things, cash out everything that doesn't have penalties. So don't cash out retirement, but this $9,000 mutual fund, cash that out, put $1,000 in the bank for an emergency fund. And I would put everything else, including stop pausing retirement for now, everything else towards this debt. Because with your income,

and even if you're able to live with your brother and sister for a little while, you don't want to outwarm your welcome, you want some healthy boundaries around that subject, but not paying rent for a little bit's going to help you, but to knock out this debt, which is really encouraging that you're going to get an $8,000 start

considering $1,000 of that mutual fund will go into an emergency fund, but putting everything else towards the debt, pay off the debt and then get a fully funded emergency fund of three to six months of expenses and then start paying or saving up for your down payment. So it's a little bit of a process, Kyle, but that is 100% what I would recommend

because I want you to have a really strong financial foundation before you go get a mortgage because as most homeowners out there, they know is like the cheapest day you buy a home is the day you like sign the closing papers. Because then you go into the home and there's the yard and the AC unit breaks and you have to replace the refrigerator and the washer and dryer goes out. And I mean, everything ends up going wrong with a house eventually. And when you're not renting, it's up to you to pay for it. But if you have an emergency fund and no debt, then it's not stressful. But when it's up to you, an emergency fund and no debt, then it's not stressful. But when it's

up to you, that's when things come into play that totally can change your situation, which I don't want to. So lower your risk. Rent for a little while. Even if it's a couple years. And people hate renting the idea of it. They're like, renters, no. Oh my gosh, you're a renter. But listen, pausing and renting for a little while is not a bad thing. It may not be fun. The idea of not owning your own place doesn't sound as intriguing and as wonderful. But listen, you're gonna buckle down,

do the right thing with your money, save up for that down payment after you're out of debt and you have that fully funded emergency fund. But it's a great question. And Kyle, just based on your voice, I feel like you're a little bit in the younger boat. And I love that these calls, especially this last hour, man, there's been so many younger people calling in. And I know all of you listening that are more

on the older, wiser spectrum are probably thinking, oh, Lily, like don't take out the car loan. Kyle, pay off the debt, rent for a little bit. There is still time, and that's the wonderful thing. When you get started on this stuff early, for you young people out there, working the plan and getting it early is to your advantage. Do not pause, do not wait and think, well, later in life, I'll get my money together.

Decide today, you know what, I'm going to take control of my money instead of my money controlling me. I am going to say, these are my goals in my life. This is where I'm going to live intentionally because the outcome of that is tremendous. The longer you wait, sometimes the harder it is to change habits and sometimes investments and all of that don't work in your favor as quickly. So for all you younger people that called in and that are working the plan, man, I would say stick with it because as a fellow millennial out there, I can tell you it's hard.

It's hard for anyone in our culture today. We're constantly seeing what everyone else is doing, what everyone else has, the status we feel like we should be at, the level we should be at in a certain home or a certain car or a certain job. And so you really do. You have to put the blinders on and say, this is my life.

This is my money. This is what I'm working towards. And the sooner you make that decision, no matter your age, the quicker and the better the outcome is going to be. And so start that path. It's hard, you guys. It's hard, but it is so, so worth it. The freedom is so worth it. Well, thank you so

much to our producer, James Childs, and associate producer, Kelly Daniel, and you, America. It was a pleasure to hang out with you this hour phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to National and tell Dave your story.