The Ramsey Show - App - Can I Keep Using My Credit Card? (Hour 2)

Episode Date: September 9, 2022

Take our Audience Survey & Enter to Win a $500 Visa Gift Card: Click here to take the survey   Dr. John Delony & George Kamel discuss: Paying off the house or investing, Selling the house vs. renovating it, 529 questions, Using a credit card to build credit, Why you shouldn't combine finances with your boyfriend.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is The Ramsey Show, where America hangs out to have a conversation about your life, your marriage, your relationships, and your money. I'm John Deloney, joined here by George Camel, and we are taking your calls at 888-825-5225. That's 888-825-5225.

Let's go to Pete in Dayton, Ohio. What's up, Pete? Hey, guys. Thanks for taking my call. Happy Friday. You got it. Yeah, man. What's up?

Hey, so my question is, should I contribute more towards the home mortgage or should I max out my Roth IRA looking at the rest of the year? Well, I don't see it as an either or. If you're following the baby steps, you'd be investing 15% in baby step four. Are you currently investing 15%? Yes. And so this year I switched jobs and I recently got married three weeks ago. Oh, congrats. Thank you. Thank you. Yeah. So I just moved in with my wife. And so I just started making payments on the home and I've been investing

10% all year just because of the employer match. But now, and I usually do the Roth IRA, the full 6,000 as well. And so now is that time that I'm thinking about doing it, but I didn't know if it would be, if the interest saved on the home that I would use that money, if that outweighs the gains in the long term, if that makes sense. I would be investing 15% regardless, and then any money beyond that, we can throw at the house. So if you're sitting there at 10% and trying to throw money at the mortgage because of interest, that's a bad plan. Okay. So you're investing 10% now, so we're going to ramp that up to 15, and we say match beats Roth meets traditional. So do you have a match through your employer, you said? How much is that? I do.

They match 2.5%. Okay. So regardless of the match, we're still investing 15% of our income. Okay. So don't bring that down because of the match. And beyond the match, you can then fully fund the Roth IRA. Is it a Roth 401k or traditional? It's a Roth 401k. Okay.

I personally just do all 15% in my Roth 401k. Gotcha. And you can do the same. Just keep it simple. You don't need to max out the Roth until you hit your 401k limit, and then you can look at that, maybe a backdoor Roth, if your income is too high at that point. So you can look into those options.

But no, we do these steps in sequential order for a reason. And we want you to retire with dignity, build wealth. And as part of that plan, the house will get paid off shortly. All right, let's go to Stephanie in Chi-Town, Chicago. What is up, Stephanie? Hi, thank you for taking my call. So my husband and I are kind of in a predicament with the housing market. We've been in our house for 10 years, recently refinanced to 15, now down to 14 at 2.6%. We owe about $105,000, but it's a seller's market. So we're wondering, should we sell and save the equity, which would probably be about $165, move in with my mom for a year or two, or should we maybe dump a little money in the house and just wait it out and maybe sell in three to five years? Why do you want to sell? Why do you feel this

urge to sell? So the cons are the public schools in the area. So if we decide to stay in the area, our son would have to go to private school. So tuition is about $4,000 a year. We're still about two years out from that. The other con is we live in a duplex. And now that we've been there for 10 years, we've had two neighbors and we're experiencing issues with trying to get the roof repaired, trying to have them be on the same page as us, also privacy issues. So those are really two of the biggest cons. Obviously, we're happy with the rate and what we owe on the mortgage. So right now, we're just focused on paying that down and saving for retirement.

Well, are you stuck in the area you're in? Can you move further away and buy something else? We could. We could move further out, but family-wise, we want to stay somewhat local just to be close to both my mom and my sister and nephew. And we also want the good schools. We want a better school, absolutely. We've already decided if we stay in the area, she has to go to the private school unless we move into a better area. I want a million dollars and a pony that can fly. You see what I'm saying? I do.

I know. So at some point, you've got to deal with reality, right? You know that show, House Hunters, when they're like, okay, our budget is $65,000 and we want three ocean views. And the realtor's like, all right. So at some point you make. I'll be honest with you. Okay.

We're very focused on saving for retirement. We do feel like we're in a great spot financially for our age. Okay. But I'm very focused on us being comfortable in retirement. So. What do you make a year? I definitely don't want. So comfortably, both of us together, we're at $155,000 combined income.

And no debt with a fully funded emergency fund and investing 15%? We have absolutely zero debt aside from monthly daycare, which is $1,170. We have about $240,000 in retirement assets, $55,000 in liquid assets, savings and I-bonds, and $40,000 in a joint investment account. And that's just a taxable brokerage account outside of retirement? Correct. So why don't you sell the house and not live with mom and just go get a new place. That's reasonable. We can't seem to find what we need right now. Inventory feels pretty low in all of the surrounding areas. What's going to happen is you're going to move in with your parents waiting for a unicorn to show up,

or you're moving with your mom waiting for a unicorn to show up, and it's going to end up burning your marriage relationship. It's going to end up burning your relationship between. It's going to end up burning your relationship between your mom and your husband. It's just going to get to be a mess. I'm okay with people moving into their parents, but it's got to be everybody sits at a table and has a very clear timeline.

If it means waiting on the market, that's a bad point. Right. We're going to do it for six months. We're going to save up $14,000, and we're going to move out. This deck, we just want to sell, and then we're just going to kind of float around is a recipe for resentment and disaster. But I would not hang on to this mortgage because it's a low interest rate. That's a terrible reason to be miserable. Right. Okay. So you recommend that we sell, take the equity in and find another home.

Cash out everything that is not your emergency fund and everything that's non-retirement and use that with the equity to step into a house. And if you do it with our parameters, 15-year fixed rate, no more than a quarter of your take-home pay, you're going to have a great down payment. Then you will have some financial peace in that decision. And you're going to have to make a – Are you saying cash out the – I'm sorry. You're saying cash out the joint investment brokerage? Okay. And use that towards it as well.

Because our next goal, like you mentioned, let's pay off the house and let's build wealth. And so part of that, we need to be thrown at the house right now. Once we have that paid off, then we can have some fun and build even more wealth beyond that 15%. And while I've got you, Stephanie, can I press on you for one minute? Yes. I want you to make the emotional and psychological and spiritual exercise of the next 12 months of your life. Learning to and practicing living where you are. You are somebody that is living two years ahead, five years ahead, 15 years ahead, 20 years ahead. And you're going to get there and you're going to realize you didn't live.

You're going to realize you spent all those years planning for things. So make sure you are living in the present right now, where you are, not just always planning and looking and looking dumb. And then when we get here and then we get here, make sure you have some good times, that little boy, make sure you and your husband have some laughs and some fun. Live your life. We'll be right back. hey we know a lot of you are scared right now between inflation and debt payments you feel like you're drowning and you're terrified you won't have enough to take care of your family. You shouldn't have to live in fear, but you do have to get to a point where you've said, I've had it, and then decide you're ready to make a change because you can't keep doing the same things with money and expect different results. And that means it's time to try Financial Peace University. This course will teach you our step-by-step plan to beat debt, save for emergencies, and build wealth that's worked for millions.

You've rolled your eyes. You've got TMMO, Total Money Makeover, on a shelf that some grandmother gave you. It's time. And right now, we're offering it at the lowest price we've ever offered it. We know what's going on in the hearts and minds of people when it comes to finances because we take your calls every day. We know. We know what's going on in the hearts and minds of people when it comes to finances because we take your calls every day. We know. We know. And so instead of doing what everyone else is doing with inflation,

making things more expensive, we're here to help people, man. We got to pay our rent and all that, but we like to help people. So we are offering at the lowest price we've ever offered it because you all need it. So stop living in fear. You can take control of your money with Financial Peace University. Get started right now at ramsaysolutions.com slash FPU. It's ramsaysolutions.com slash FPU. All right, let's go to Chris in Fargo. What's up, brother Chris? Hi, guys. Thanks for taking my call. You got it, man. What's up? I talked to you a couple of weeks ago, Dr. John, um, my son passed away.

Now I'm dealing with the logistics of everything. Yeah. Walk, walk the listeners here. You called on my show, um, a couple weeks ago. Uh, walk us through what's going on. What happened? Um, he was killed by a drunk driver, um, on a side-by-side ATV, and I responded to the call as a firefighter.

Yeah. So. Yeah, it's rare that a show stays with me, and my time with you has stayed with me, man. And just to add to that, I want you to know I'm still thinking about you. I'm grateful for your honesty and for calling.

How are you? Before we get to the nuts and bolts here, how are you? I'm good. Surviving. Doing help. Therapy. Friends. It's a little much at times, but I'm doing good. A few weeks after your son passing away, survival makes sense, right?

Survival is where you need to be right now. Good for you for reaching out to other folks. This is, you're a first responder. You know this better than most. George, this is the other side of somebody we love passing away. I often sit with folks overwhelmed by the mechanics, the nuts and bolts, right? Everything from what about the car? What about, I mean, just stuff, right? What do we do? And so I appreciate you reaching out with a mechanics question. So how can we help?

So we had two 529s and I instant, or not instantly, but I rolled my son's into my other son's five 29. So there's about $58,000 in his five 29 and he's 15 years old. And there's a debate between my wife and I, do we keep investing in the five 29 or just set money aside? So we have access to it if he doesn't use it. Does that make sense? Yeah. Do you know, have you talked to your son about this?

I mean, obviously he's 15. We don't know what the future looks like and where he's going to go to college. But do you think he'll plan on going to college? He's definitely college-bound. Okay. We'll have to set the parameters for him when you're not going to ivy league and i never had the illusion that i was going to pay for it all that money there was to help both of them well i don't even know how much college cost

i would a billion dollars i would continue contributing i'd rather have too much for college than not enough and have to be rushing to fill in the gap as he's heading off to college. And he's gone, you know, I want him to have some skin in the game too here and going, all right, I'm going to apply for as many scholarships and grants as I can. I'm going to work part time while in college. I'm going to work from now until I go to college to have that income. And if he doesn't need it and your 529 plan funds cover it, that's great. That's going to be an amazing Kickstarter to his future and allow him to live and graduate with some plans. But I would continue contributing to it because that money will grow. And even over three years, if you can get, you know, eight, nine, 10, 11% growth in that account on that money you're putting in, I'm going to take that. Chris, can I give you a different piece of wisdom? Sure. Chris can I give you a different piece of wisdom? Sure I would recommend

Not a different piece of wisdom What George just said is totally accurate I want you to take a break for a minute though Here's why From what, dad? From making as few long term decisions as possible Here's why I just had dinner with him last night His name is Dr. Andy Young making as few long-term decisions as possible. Here's why.

So I just had dinner with him last night. His name's Dr. Andy Young. He's here in town, Nashville, doing a training for first responders. He's the guy that trained me on crisis response. And also he sat with me during a couple of personal issues that I went through, personal crisis stuff. And one of his rules of thumb is six months to a year after something significant, don't make,

don't quit your job. Don't move houses. Don't sell cars. Stay as stable as you can. And my guess is right now, part of the conversation you and your wife are having is based in a, in a nihilistic worldview. Why are we even putting money in this thing?

Who the crap knows what's going to happen in three years? You see what I'm saying? Y'all are still in the grieving process and trying to make rational, long-term money decisions on the back end of this thing. It's just not the time to do it. It's just not the season to do it, especially if you don't have to. And so I love George's idea. Let's just keep contributing like we were.

And if you look up in a year and you've got a little bit too much money in there, you can tell your kid, well, hey, we've got more in there for you. Right. Um, if you end up not with enough, y'all can have a hard conversation in the next 18 months and say, Hey, you've got 18 months till you go to college. And it's what that's going to look like. But the fewer, we got to solve this and got to solve this. And I get the energy as a dad, you want to do something, feel like I gotta be doing be doing something. Do as few big things as possible. Okay? Just park for a minute, man.

Y'all are still healing, right? And you and your wife are going to get into disagreements that there's no reason to get into them. Y'all have enough going on between the two of you trying to both grieve this thing than to throw, like, we should do this. We should do this. It could happen in five years. Man, that's just not the time for those conversations.

Is that fair? That's fair. Cool. Well, we're still thinking about you and your family, man. I don't think that – Chris, thanks for calling. George, I don't think that episode's aired yet, but it was one of the hardest calls I've ever taken ever on the John Deloney shows. It was tough, tough, tough.

It's a great, great man and a great family and a great community that's rallying up around him. But I think globally speaking, when we experience hard things, whether it's we lose a child, whether it's we have a car wreck, whether it's we get fired, our impulse is just to run, right?

That's the fight or flight. We're just in it. We've got to do stuff. We've got to be busy. Go, action. And sometimes the wisest thing we can do is exhale and back up a little bit right and just slow down and you've talked about when you're grieving your brain is not firing on all cylinders no absolutely not you're just in a fog it's in survival that's right great decisions aren't going to happen

in those moments right yeah you usually default to training or that's why you have friends, right? We say that, you know, your community is your emergency fund for life because life will happen to you. And when I'm not in a place to make great choices, to great, make great decisions, well, I'm just going to sell the house in. I got divorced. I'm just going to sell my house. I'm going to move across. Don't do anything. Chill, chill, chill, chill. That's what your friends are for, right? They come in and they show up with tacos. They show up with casserole. They lift your arms up in the desert when you're just exhausted and they show up and help mow the yard when you aren't even thinking about it. They say, hey, let's don't cash out your retirement. Let's just sit. Let's just wait for a couple of months and

see if the fall clears, right? Maybe making a list of here's what has to happen. Here's the financial things we have to deal with because a divorce happened, a job loss, we're grieving the loss of a loved one. And here's everything that we need to deal with, but it's not that important or urgent right now. That's brilliant. I've sat with people in the middle of the night who have to go to work. It's on a Friday. They've got to go to work on Monday because there's no money.

And dad just died. Her husband just died. Her wife just passed away. Like there's a reality, an urgency. I've also sat with folks who, because they had a will, because things were taken care of, they've got some space just to grieve. And that's a totally different place to be. So I love that idea of saying, okay, what, what is on fire right now? And what are some things we're going to have to deal with the

insurance? We're going to have to deal with the, with the, you know, the film, the car dealership, we're going to have to deal with, whatever. Let's deal with that later. Let's just spend some time grieving. Let's spend some time learning how to breathe again. It's a tough, tough season. A lot of wisdom there. Chris, we're praying for you, my brother.

We're with you. We'll be right back on The Randy Show. Thank you. 888-825-5225 This is the Ramsey Show. I'm John Deloney joined with me by George Camel. Let's go to Tina in Los Angeles. What's up, Tina? Hi. How are you? Hi. How are you? Good. How are you? I'm doing well.

Good, good, good. What's up? So I was wondering, should I keep using my credit cards and building up my credit score? I pay them off right away. So should I keep using those? And then also, I've been contributing to my 401k for almost 10 years now since I started working at my current job. And should I keep contributing to that or should I stop? How much debt are you in, Tina? Well, along with my car, I'm about $30,000 in debt. Okay. What other debt do you have other than the car? Just the car and like a couple of credit cards. Okay. But the credit cards are very small. Yeah.

Okay. So to answer your first question, no, you should not continue to use the credit card to build your score. Let me ask you why you want to build the score. It's just financial advice from my parents. It like you know yeah cash is have good to have but also a good credit score is also really really good to have been there been there that is how i grew up learning about the credit score at 18 you got to get a credit card to build the score so you can go into debt so you can get more debt so you can get a good score do you see the vicious cycle this has created? Yeah. And so when it comes to the credit score, I've lived with that one for many, many years. Obviously,

when I got a mortgage, you get a score again. But as far as keeping the score and keeping using the credit cards for that, you don't need it because we're not going to go into car debt again because debt is not your friend and it's stealing from your paycheck every month. And as far as everything else goes, you can rent hotels, you can rent cars, you can do all kinds of things with a debit card. Do you have one of those? Yeah. Okay.

So tonight, what if we had an exercise where we cut up the cards and tried to live on our debit card and paid off these credit cards and never looked back? Okay. Does that sound fun to you? Oh, my gosh. Wow. Is this excitement or are you like, that sounds crazy?

I was like, yeah, that's a little bit crazy, but I mean, we're crazy around here. Tina, why is it crazy? I lived without credit cards for about five years. I just barely got them again. I think it's crazy to be like in the matrix and playing this game of what does FICO think about me? Am I credit worthy? I mean, does that not sound a little crazy? Here's the truth, Dina. If we wrote you a check for a million dollars and you didn't use your credit card for a month, you just put that million dollars in the bank, in your bank, your credit score would go down because credit score has nothing to do with your financial position. It has to do with your love affair with debt.

So let me walk you through what's going to happen. You are going to pay off all of your debt and never look back, including the car loan. What's your income? I make 75 a year. Awesome. Okay. What's the car worth? Well, when I got it, it was 26. Okay. So that's a reasonable car for your income. We say that we don't want more than 50% of your income tied up with things and motors in them because they go down in value, which your car is doing as we speak. So if you're following our plan, which I assume you're newer to this craziness. I just started listening to this show about like a week and a half.

Why did you come to us, Tina? What's happening in your life? Well, I was in a very bad financial place a few years ago, and I just had two babies. So my credit went down, and it took a while until I got like some promotions at work that it started coming back up. But then I kind of noticed once my income started going up the lifestyle I guess started going up too I'm just like I'm not just like you know I'm I need to stop like I need to

get get it together and um I was just looking for like some financial um how do I say this advice like and I went on um the podcast on Apple, and I found you guys. That is awesome. Very cool. We're so glad you're here. That's a huge step, just to hate the situation you're in. Most people are comfortable sitting in their own poop, and I'm glad you've decided to take a step in that direction.

So when it comes to our plan, we have a proven plan called the Baby Steps. Ten million people have done this, including myself, including John, and it works. So A1 is getting $1,000 saved for a starter emergency fund. Do you have $1,000 in the bank? Not yet. Okay. That's going to be our A1. If that means selling stuff, side hustles, working extra, I don't care. We're going to do this in less than 30 days. Can you do that? Yeah, I can sell stuff. I'm on salary, so I'm on a fixed income. Great. That means you got gotta fix your unfixed expenses true it means we're getting on a budget cutting back a whole lot like no going out to eat no more

eating out none none none none what's your favorite place to go out to eat tina what what is your like guilty play like i'm going if i'm getting takeout tonight on a Friday, here's where I'm going. Oh, my gosh, sushi. Okay. Bye, Felicia. You're not going to have sushi for a long time. New restaurant in town is called Tsukasa. You're going to eat at your house, Tina.

Best restaurant in town. It's a whole experience. You get to make your own food. You're going to love it. So you're going to get on a budget. We're going to help with that because you're a new listener. I'm super excited you're on the plan. We're going to gift you one year of Financial Peace University,

as well as every dollar, our budgeting app, so that you can make a plan for every single one of these $75,000 coming in. And it is going to be so freeing. I know you hear the word budget, like gross. No, I'm telling you, this is permission to spend. And you're going to feel so confident about the next steps. So on top of the $1,000 starter, then we're going to move to getting rid of all this debt using the debt snowball. So list out your debts, smallest to largest, ignoring the interest rate. Does that sound crazy too? A little bit, yeah. Good, because culture is normal. So we got to be a little weird, don't we? Right. All right. So we're going to list them out, smallest to largest, make minimum payments on all the debts and attack

that little one with a vengeance. Probably those little credit cards, right? Yeah. And then we're going to cut them up when they're paid off and say no more. Tina's the bank now. Tina's her own lender. And once we do that, we're going to beef up that emergency fund to three to six months. Then we invest. Do you know what that means, Tina? It means we're not going to invest until then. It means we're going to stop the 401k contributions. Also sounds crazy, right? A little bit, yeah. Because I've been building it up for almost 10 years. I know. This is a crazy train. It'll still grow. You'll still get compound growth, what you put in there. But right now, we need to make progress and we need to change our behavior.

And you're doing 14 things at once, which is what got you here, right? Right. So let's try to do one thing at a time with focused intensity. And if you hate it, hey, in six months from now, if you're not in a better financial situation, you can go back to Tina's plan, eating sushi, putting money in the 401K, putting everything on credit cards and hoping for the best. Buying Visa, bigger buildings for themselves at your expense. Okay, will you do a thought exercise with me? Sure.

You got two little ones, right? I actually have three. Three, how old are they? 14, seven, and five. All right, let's fast forward 18 months. And you've worked maniacally. You took a second job. You had somebody watch your kids on the weekends

because you started working. You just went bananas and paid this off. You open your eyes and you've got these three kids. They're 18 months older and you owe nobody anything. Nothing.

And you think about sleep and you think about being a little bit less stressed of a mom which allows you to get a little bit less stressed of a mom, which allows you to get a little bit closer to those kids because you're not quite as radioactive. You don't have to spend quite as much time numbing out on Netflix and whatever else device is scrolling in front of you

just because you've got to pass the day. Now you're out walking in the neighborhood and you're smiling. See what I'm saying? You're talking about changing your entire life. And it starts with you deciding deciding I want to be free. Or let's get some sushi, right? Right. Why?

Tina, how much are you investing in your 401k right now? What percentage? 6% is the company match. That sucks. You should do 15. Wouldn't that be better? You know what you can do when you don't have payments? You can invest more in your 401k.

Right. With a fully funded emergency fund. Sushi till you're sick. Do what? We also have a Roth too, so I was starting to look into it, but I haven't gotten quite into it just yet. Make a poster, put it on the wall, and say, I'm coming for you in the future.

18 to 24 months from now, when I'm out of debt, 30 months from now, when I have that fully funded emergency fund, I'm going to come back stronger than ever. 15%. And then we're going to be saving for kids college. We're going to be paying off the house. Can you imagine what future Tina is going to be like? She's going to eat so much sushi. She's going to be sick. So hang on the line. Austin will pick up. We're going to gift you Financial Peace University, every dollar and some homework for you. Go listen to episode seven of my podcast, The Fine Print, all about the dirty truth behind your credit score. You're going to be disgusted when you find out. All right. We'll be you next time. Hey, we really value the input from people who watch and listen to The Ramsey Show. It helps us know what's important to you so we can deliver the right content

that will help you with the questions and challenges you have right now. One way you can share your thoughts with us is by answering a few questions in a new survey we just launched. You can check out at ramsesolutions.com slash survey. It'll take you a few minutes, and there's a $500 Visa gift card up for grabs as a thank you for your time go to ramsey solutions.com slash survey and you can even answer it right on your phone right so just visit ramsey solutions.com slash survey and help us out say nice things about me

and george all right let's go to meredith in lexington kentucky what's up meredith hey how's it going excellent how are you i'm i okay. I'm sick today, but I got an opportunity to call in. There we go. So what's going on? How can we help? Okay, so it's a good problem to have, but my boyfriend and I, he's more the financial guru, but we are having a tough time figuring out what to do with all this money that I've saved that is just sitting in the bank right now. We're debt free, but we are, I've got about a hundred to $120,000 just kind of sitting, sitting in my bank account. And we don't really know what, what to do with it. Before George answers this, can I ask you why your boyfriend

is speaking into your money decisions? Here's why. My job is almost exclusively when things happen to people that nobody thinks is going to happen. That actually happens to a whole bunch of people. And so you're giving six figures worth of autonomy to somebody who has no, who can just walk at any time.

This is true. Why are you giving him? We did just buy a ring together. Do what? He's listening to this. I said we did just buy a ring together. So hopefully we'll be fiancé in the near future. I'm assuming you guys have combined bank accounts?

No, we have not. We just cohabitate. Okay. But you kept saying we, all of these decisions were a group decision. And so it made me think, all right, the money's all entangled together. Sure. It's not. It's not. So Meredith, I'm telling you this because I'm thinking about it as like a future together. Yes. I'm telling you this because I love you. I would not do anything with him at this point. He does not have a right to speak into your financial situation, into your money.

And I'm just telling you, the number of people we talked to, we were going to get married and so we went ahead and did this. We're going to get married and we bought a ring, we were engaged, then we did this

and then he just walks. That's totally fair. It's a mess. Okay. we're going to get married and we bought a ring, we are engaged, then we did this, and then he just walks. That's totally fair. It's a mess. Okay. Now, he might be the greatest guy in the world. I'm not saying he's a bad guy. I'm just saying you are the one exposed right now.

Sure. Right? Okay. Let's get to the financial part. So do you have any debt? No debt. Do you have an emergency fund outside of this 120, or is this all the cash to your name? That, yes.

Well, I guess some of that would be, I do also have another 20 in a high-yield savings. Okay, let's call that your emergency fund. So let's say this other 120 is just for fun. Mm-hmm. Okay, are you investing 15% of your income? Yes. My retirement account, I contribute 5%, employer 10%, so 15%. And then I put in an additional 10% in like Roth IRAs and voluntary 403B. So you're saying 15% of your income is going towards retirement in some way, shape, or form. Okay, great.

And what about the house situation? I just rent. You're renting. So it feels like the next plausible goal is to get a house for Meredith. Sure, sure, yes. Now, we don't know what the future holds for Meredith and her boyfriend. Right. So, you know, I don't want you to make a decision based on well he's moving into this new house and this it gets weird and please please whatever you do do not put his name on the

mortgage and don't put his name on the on the deed yeah if you're not married that is where situations go sideways and hey real quick george let's explain this here's why um if you put him on your deed and he's a boyfriend and he decides to bail the untangling of that is a mess it's a disaster if you're married and one of you bails there's a legal process to walk

everybody out of that and that's why we tell you you're completely unexposed forget the morality part forget the Sunday school part. I'm just saying So he's not building any asset. Now he's resentful and he walks away and it just creates a real conundrum. And so that is another issue, which one of the reasons we're against that, but I'm going to let you do you. What I would do with this money is just keep it in a high yield savings account. Cause it sounds like this decision, whatever you do with this is probably the next two years. We're not talking five years from now, right? As far as a home purchase?

Right. Yeah. I'm thinking probably in the next three or so years. Okay. If it was like three, four, five plus years, I might put it in an S&P 500 index fund and let it grow at maybe eight, nine, 10%. But because of the time horizon, I don't want your money locked up in the stock market and then it's down and all of a sudden you're like, oh my gosh, we're getting married now and the money's locked up and it's down. I don't want to sell while the shares are down. Putting in a high yield savings account is going to give you that, you know, what, one and a half to 2% right now. It's nothing special, but it's going to keep your money safe, keep it growing a little bit and buy you time to make that decision wisely.

So that's what I would do. If you need to make any other upgrades, you're like, hey, I'm driving a beater car, you can upgrade to a reasonable car. What's your income? $130,000. Awesome. Meredith is crushing it. Do you like what you drive right now? No issues?

It's in good shape. I mean, it is a 2010 Honda Civic, so I guess... Oh, right on. I had an 09 Honda Civic. But it only had 60,000 miles on it. That's the problem with the Honda. It's going to go forever. It's so good.

Man, you've done really well, Meredith. I'm proud of you. I know. He's got to get that guy. And if he likes it, he better put a ring on it. That's right. Oh, oh, oh, oh, oh, oh, right. All right, let's run out to Mark in Indianapolis.

Hey, Mark, we're right up against the clock, so get right to your question. Absolutely. I'm 60 years old. I'm retiring, and we have two properties. A home property that's worth $300,000, no debt. Another property that's worth $800,000, and I have $170,000 of debt on it. I'm paying it off over the next four years. Game plan to do that. I have 400,000 in cash sitting on the sideline that I'm wondering if I should

go ahead and pay the 170,000 off or just continue to stay with the plan. I have no other debt at all and saving about 30% of what I make today, my wife and I. So that's my question. Stay with the plan to pay it off over the next four years. Leave the cash alone and use it for other investments. We're going to convert some things out of normal IRAs to Roth. So those are some of my questions. Mark, if I'm in your shoes, that mortgage is gone today and we are celebrating. We're going to burn it on the front lawn, have a party because we don't owe anyone anything at 60 years old.

And knowing you, you could build that thing back up to $400,000 pretty soon if you wanted to. Absolutely. And without that mortgage payment, you're going to be able to do that. Yeah, the rate's so low, it's one of those mental things. It's, I think, 2.75, and I'm making fairly good money on my cash. It's just kind of a wash. So I just wanted to ask that question. Go ahead and pay it off. Well, the other mental thing is going to bed knowing you don't owe anyone anything.

With $1.1 million of cash paid out real estate assets. Oh, yeah. Absolutely. You got the money to do it. I know it hurts because you're going, well, this money can make more money and this is a low interest rate. But at some point, we just got to stop playing the game and go,

we're doing so well. Why are we even hanging on to this thing? And I think the most honest answer George and I could both give you is, both of us in your exact situation would pay the house off before the day's over. And both of us would love to have $400,000 just sitting there going, what do I do with this kind of money? Yeah. That's a great problem to have. I would do that.

You'll have, what, $230,000 left that you can be sad with that money, right? And the millionaires we talk to, they just don't hang on to debt. They just get rid of it and use all their future income to build wealth, and that's what you're going to be able to do. Yeah, people on, George, people on Instagram, they love to hang on to debt. Leverage the debt, man. Love the debt. You can roll that. Hug the

debt and then... No. No, thank you. I'll take freedom. All day long. Hey, that's another hour of the books here on The Ramsey Show. Stay with us. We'll be right back. Dave here. We just launched a brand-new audience survey for The Ramsey Show, and we'd love your feedback. You could be entered to win a $500 Visa gift card.

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