The Ramsey Show - App - Chris Hogan Answers Your Retirement Questions (Hour 1)

Episode Date: April 17, 2019

Get Started on Your Debt-Free Journey We’ve made it even easier to get started taking control of your money.  Learn How! How Fast Can You Be Debt-Free? You don’t have to be in debt for the rest of your life! Answer 5 simple questions and our Debt Calculator will show you how quickly you could be out debt!   Get the Complete Guide to Budgeting. Budgeting is often misunderstood and overcomplicated. It doesn't have to be! We made it simple. After 90 days of budgeting with EveryDollar, 9 out of 10 users feel more confident in their financial future. Get the Complete Guide to Budgeting.   Get the Coverage You Need. How does your coverage stack up? This Coverage Checkup will show you what you need (and don’t need), which questions to ask, and where to get the best coverage.   Find the Right Financial Advisor. Finding the right financial advisor doesn't have to be complicated. Our free guide makes it easy to know what questions to ask so you can make a confident choice. Get the guide!    Listen and Watch Anytime, Anywhere.   The Dave Ramsey Show app lets you download episodes for offline playback, customize your content, and see what’s coming up!

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, it's the Dave Ramsey Show, where your money and your life are the focus. Sitting in for Dave, I'm Chris Hogan. And America, we're here for you to take your questions about money, to take your questions about business or life, whatever's on your mind, we want to talk to you. The number to call is 888-825-5225. Again, that's 888-825-5225. Or you can hit us up on social at Ramsey Show.

We're excited to be here with you, and we're going to go to the phones. And I've got Laura on the line. Laura, thank you for calling. Hi, Chris. How are you today? Oh, I'm focused and not finished. How can I help you? Okay.

Well, I have followed all the baby steps, and basically we're trying to finish it up. I have $55,000 left on my mortgage. Okay. And the corporation that I work for had given us stock as a bonus. And, of course, the taxes were withheld, so it would be cash money that i could cash in and i know it's recommended not to just have one stock in your portfolio so i was wondering should i take that bonus and pay off my house and just continue to save okay fantastic now laura how much stock are we talking about how much did you get i got 3 3,000 shares. Okay, 3,000 shares. And what's it selling for right now?

Right now it's selling for around $50 a share. Okay, all right. So you got a substantial gift there. Correct. Yes. Okay, and so have you been collecting these over the years, or was this a one-time thing? This was a one-time thing. Okay, all right.

So, all right, now let's think about this. Now, how much do you currently have saved for retirement? $750,000. Oh, fantastic. All right. Is that primarily in a 401k? It's 401k. It's traditional IRA and Roth IRA. Okay. All right. So you've been saving for a while. A long time. Yes, you have. And so you only owe $55,000 left on the house. Correct. Okay. All right. So you've been intentional. So are you looking to sell all the stocks, sell some? What's your thought? I was thinking of just selling all of it and then just putting whatever's remaining into my Roth for this year. Okay. All right. And you're going to be over that dollar amount of what you can do max there.

But it doesn't mean that you couldn't put it in a growth stock mutual fund outside of retirement. Right. And I do have a Fidelity account set up. Okay. Fantastic. And Laura, what's your age? 51. Oh, you are on the ball. When did you start saving for retirement? Probably at about, I would say probably about 30, 31 years of age. Okay. All right. 30 or 31. And you obviously have thought about how it's going to feel to have this home paid off, haven't you? Oh, I certainly do. And I would just love to have

that extra $2,000 a month just to keep investing. That's right. See, you've hit the nail on the head, Laura. When that money doesn't have to leave you, it can stay with you and start to work for you. And so I like your thought process. Are you working with a smart investor pro right now? No, I am not. Walk through it. Understand all the tax nuances, all the paperwork, all the things that are coming in so you're not taken off guard. And you can locate that by going to DaveRamsey.com and clicking on SmartVestor Pro to locate someone because we want to walk through this and talk through it. Another good thing to do would also be to connect with a tax ELP just to understand how this is going to impact you because selling that, you now have a cash event going on. So this is going to impact how you file your taxes next year as well. But I love your thought process, Laura, where you are being focused, you know, you're well on your way to being an everyday millionaire with only 55,000

left on that mortgage. You are going to be in a great position to pay that thing off and now keep that mortgage payment with you, which, as you said, is going to allow you to keep investing and be intentional. So very, very excited for you and keep up the good work and keep us posted. All right, going back to the phone, I've got Josh on the line from Minneapolis. Josh, how are you? I'm doing fine, Mr. Hogan. How are you? Oh, I'm focused and not finished, my friend. How can I help you? Well, currently I have 3% of my income

going into a traditional 401k and remaining 12% going into a Roth 401k. Okay. I was wondering, is that okay or should I be doing something different or something more? Okay.

Looking at this, why do you have it split up 3% in traditional and 12% into the Roth? Well well it's because of the match okay all right gotcha are you getting any kind of match over onto the roth 401k i really have no idea i but i'm thinking they may actually combine it into one contribution, looking at the last thing I got from Gerald Price. Well, let me ask this, Josh. How old are you? 35.

35 years old. And how long have you been investing? Well, it got started when I moved to full-time, and then I turned it off to work my baby steps, but now that I'm out of baby step three and I'm baby step four, I started investing again. Okay, good. And so you're looking at this. You've got both right now,

but I would definitely speak to your employer. Find out more information about the Roth 401k. The beauty of Roth is this, Josh, whenever you hear Roth, I want you to think of after tax. That means the money that you're putting in is growing tax free. So this is a beautiful thing because it's going to allow the money to grow. That interest is gaining interest. And guess what? Uncle Sam doesn't get any more because you dealt with after-tax dollars. So if that is available, then I'm going to tell you, use the Roth 401k for the full 15%. Stay focused on that and then go from there.

That's a great scenario to be in. Find out about their match. If you're coming from the same employer and they're offering a match on the traditional, they're probably offering one also on the Roth 401k as well. So talk with them. Get those questions answered. And again, don't be intimidated. You know, going in and talking to your HR office or your benefit or your 401k provider, these are people that work with you and for you.

So I want you to feel comfortable reaching out to contact them anytime and every time you have a question about what's going on with your financial situation. Don't ever hesitate. They're there to work with you. And I think that first call is an important call because you can walk through and talk through and gain information about where you are and how you feel. I got this question in on social. This is from the Ramsey Baby Steps community, and it says, this is from Jim. Jim says, I currently have whole life policies for me and my wife. I'm in the process of getting two term life policies in place. Once I do, should I cancel my whole life policies and take the face value? Jim, this is a fantastic question. I'm proud of you, number one, for getting the term life insurance in place. It's a cheaper, better way to overall protect yourself because with term, you have coverage over the period of time that you buy, whether that's a 15 year, 20 or whatever, you've got coverage. Whole life only protects you for a certain dollar amount that can dwindle over

time. So I'm glad you have the term. Once the term policy is full and in effect, then you can look at releasing and canceling the whole life. But notice what I said. Once it's full and in effect, that means the policy is there and it's covered. Once you get that, if you've got debt, redirect the money coming from that whole life policy towards your debt and keep working the baby steps. See, it's not a surprise. Progress requires focus and being intentional. And Jim, you've taken the right steps. Now just complete it. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry.

A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Hello, America.

You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in for Dave. We are taking your calls about your money and your life. And so we want to hear from you. If you've got a question, give us a call. The number to call is 888-825-5225. Again, that's 888-825-5225. And don't forget about us on social, at Ramsey Show.

And we're in all places, on Instagram, Twitter, Facebook, all the places. Especially those of you watching us on the YouTube channel, we definitely appreciate you there. Don't hesitate to fire off your questions if you have them for us. So I'm going back to the phone. I've got Samantha on the line. Samantha, how are you? I'm doing good, Chris. How are you? I'm doing good, Chris. How are you?

I'm doing well. How can I help you? Okay, so I'm currently in college, and I'm almost done with Baby Step number one, but I don't know what I should do about my loan. Okay. All right. And what year are you in college? I'm going to be a junior.

Going to be a junior. Fantastic. And baby step number one, are you working full-time or part-time right now? Full-time. Working full-time. And what's your income as you work full-time? I just started a job. I make around $9 an hour.

Okay. So I got like around like $450 paycheck okay all right and so you are are you going to school at night or are you working during the day um i work when i don't have classes okay i like this so your focus are you paying your way through college or how are you how are you paying for school um loans okay student loans yes sir okay all right let's talk here so you're a Loans. Okay. Student loans? Yes, sir. Okay. All right. Let's talk here.

So you're a junior. Have you had student loans the last two years? Yes, sir. Okay. All right. Just call me Chris, hon. You say, sir. I look for people older than me.

So you're working full time. You've got, outside of the student loan debt, do you have any other debt? No. Okay, so no credit cards or car loans or anything like that? No, Chris. Okay, all right. So the student loans right now, do you know about how much in student loan debt you have? Yes.

Okay. It is over $70,000. Okay, $70,000. And that includes the money that you've taken out for this year as well? Yes. Okay. That includes my FAFSA and my Sallie Mae. Okay.

All right. And so what's your question to me about the debt? Are you asking should you start paying on it while you're in school? Yes. Okay. Here's what I'm going to say, Samantha, with you working, I'm proud of you for working while going to school. Here's my advice. I want you to get plugged in on campus and find out what the work study programs are available, what kind of

internships and things you could do on campus that could earn you some scholarship or grant money to go to school. Does that make sense? Yes. Because that opportunity, what we want to do is, now, you've got the $70,000 in student loans. We got that. What I want to do is let's shift a little bit and think differently. What can we do to help you finish up your senior year without a student loan? And so a lot of people aren't aware, Samantha, that even if you're in school,

there are still some scholarships and grant money that are available. For example, what are you studying in school? What's your major? Public relations. Okay. All right. So PR, public relations, every company out there uses it. All schools even have it.

So are you, have you looked at working inside the public relations office on campus? Not exactly. Okay. But that would be a great connect to go up and just meet them and talk with them and begin to find out what they have available. I think, you know, you working, I love that you're making money. You've got it coming in. I would definitely save up to get your $1,000. Let that sit in your savings account.

Don't use that for a sale or anything. Just let that sit there. And if life happens, now you've got money available for a car repair or whatever's going on. And America, this is important because especially for young people, right, helping them to understand the whole aspect of scholarships and grants. This money is there. And I'll be a people may not have gotten the right information while they were in high school.

So they didn't get it their freshman year in college. So they don't think that it's available anymore. That's not true. So it's still out there regardless of what year or stage you are in college. So either go to the financial aid office, sit down, talk with somebody on campus. Your advisor is what they call them in college, to find out what's available and where to go. There are all kinds of money that's sitting out there and waiting for people to access it. So, Samantha, stay focused,

be encouraged, but definitely look for a way to go to school that senior year without that student loan debt. All right, back to the phone. I've got Megan in Houston, Texas. Megan, how are you? I'm well. How, how are you? I'm well. How are you, Chris? Oh, I'm doing well also. How can I help? So my husband and I are on Baby Step 2. We have $42,000 in debt, which consists of two cars.

One is $24,000 and the other is $17,000. All right. Our household income is right at $100,000. Okay. We have a house that is, we owe $120,000, but it's probably worth $180,000. Okay. Our goal is to, in the next five years,

is to move to a better community, primarily for better schools for our kids. And the houses cost roughly $250,000 in that area. So our question is, should we sell the house now, apply the profit to the debt, or should we save up, keep the house we have now, save up for a baby step three, pay off all our debt, and then sell the house. Okay, good question. Tell me this.

How many kids do you all have? We have three, but the older two are the ones that are in school. Okay, all right. And what are the kids' ages? I have an eight-year-old son, a six-year-old daughter, and then a one-year-old son. Okay, and you're saying that you're looking at a home in a better school area. How are the schools in the area you're in right now? They're okay. Okay.

It's the same school district, but it's just better schools. Okay, gotcha. Better, I guess, rating. All right. And so you told me the household income's $100K. Looking at this, you know, the mindset of selling the house, here's the thing. Then where are you living? You know, once you sell it, I would never advise you to just go over and get another home that's, you know, more expensive than the home you're in now.

That's only going to mean taking on more debt. Does that make sense? Yeah. Yeah, we don't want to do that. But I like the mindset that you all are thinking ahead and planning ahead. So, Megan, what I would do is this. You say there's $42,000 in debt. It's $24,000 on one car, $17,000 on another.

I'm going to get those things paid off or get those things sold. Okay? I mean, I'm going to get one of those things out of my life ASAP. And as you said, attacking the debt, saving up that emergency fund is going to be crucial, but then also saving for the down payment of the house. You see, the equity that you have isn't going to go anywhere. The homes are going to continue to appreciate. So what I would do is start to understand the debt that's in your face right now is the stuff that's standing in the way of you getting to where it is you want to go.

So now what's the plan? How do we get there faster? What do we do to change up things in our mindset to help us start to attack that debt? I'd have a for sale sign up so fast in one of those cars or both to try to get rid of them, right? Contact your lender. Find out what the payoff is on the vehicle. Go on Kelley Blue Book. Check out the real value.

And let's start to get intentional here. Because if you all want this other house, now there's only one way to do it and do it the right way, and that's work toward it. So attack the debt, get that out of your life, get your emergency fund of three to six months saved up, and then you save up for the down payment on the house. You see, everything requires effort. So it's a matter of staying focused, being very, very intentional, and trying to get it done. So thank you very much, Megan, for your call. But I'm telling you, this is the path. You and your husband sit down, talk, get on the same page and get focused. All right. I'm going back to another social question. Jesse from the Ramsey Baby Steps community asked this. I'm currently in baby step number two means she's attacking debt. She goes, I have some credit cards that are at zero percent, but will soon expire and minimum payments

will go up. Oh, yes, they will. She says, does it make sense to get a consolidation loan and pay them off so I can avoid the increase in payment and interest? Oh, Jesse, you're trying to get me riled up. Listen to me. No, do not do a consolidation loan. You see, that's dangerous.

Consolidation loans, you want to talk about interest going up and the length of indebtedness going out? That's the way to go. Don't do a consolidation loan. Leave those things alone. List them out on your baby steps, smallest to biggest. Attack them one at a time. You can do this, but don't consolidate.

It's not the way to go. This is The Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war. If I've taught you anything, it's that blindly throwing money at a problem is a stupid plan and something you'll regret for years. The key to avoiding this rookie mistake is to call Churchill Mortgage and get certified. This easy program puts you miles ahead of your competition because you are pre-underwritten. Your interest rate is secured, and yes, you can close within 14 days.

Don't fall into the trap of offering more money just to compensate for a poor plan. Call Churchill Mortgage today and get certified. Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hogan filling in for Dave and excited to be with you. The phone lines are lit up and we want to hear from you. If you've got a question

about money that you want to talk about, give us a call. The number to call is 888-825-5225. Again, that's 888-825-5225. And don't hesitate to hit us up on social

at at Ramsey Show. That's on Twitter, Instagram, Facebook, you can go all over the place. We're everywhere. Uh, and those watching on the Ramsey YouTube channel, we definitely appreciate you and want to hear from you as well. But I wanted to let you all know that I also have a show, the Chris Hogan show it's available on YouTube, Apple podcasts, Google podcasts, as well as Sirius XM. And we have a lot of fun. We take callers. I dive in.

I rip things from the headlines to talk about articles. I give people did-you-know facts as well, coming from the book Everyday Millionaire, the largest research study that's ever been done on millionaires across the country. So, would love to have you join us as well. You can find it on iTunes and Google Play and wherever else you listen to shows and podcasts as well. So anyway, we're going back to the phones. If you've got a question, we'd love to hear from you. Next up, I've got Jonathan down in Orlando. Jonathan, how are you? I'm doing pretty good, sir. How about yourself?

Oh, I'm focused and not finished, my friend. What do you have going on? Yes, sir. I just have a main question about a situation that just happened about an hour ago. My sister got a call from a debt collector on my personal cell phone, and I'm trying to figure out the right advice to give her. Okay. So they called looking for your sister, but they called your number? Correct, sir. Okay. And so when they called and they asked, what did they ask you? They asked for my sister. Okay. And so when they called and they asked, what did they ask you? They asked for my sister. Okay.

And did you inform them that this was your phone? Yes, I did. Okay. Did you ask them how they got your number? No, I did not. Okay. All right. So odds are is this.

I mean, have you talked to your sister yet? Yes, I have. I gave her the phone for her to talk to them after they contacted me. I've had my own share of dealings with collectors, and I've been trying to give her advice on how to deal with it. Okay. Is it a medical bill or non-medical? Medical. Okay. The big thing, Jonathan, and again, it's unreal what some of these collection agencies will go through to try to find and locate someone, you know, with information online. It's easy to locate people. But, you know, you definitely handled it the right way about letting your sister know.

The reality is, is this situation won't stop. It'll only ramp up. So your sister needs to contact them and begin to have a conversation. And a lot of people, Jonathan, are fearful of having that conversation with the collector because they feel intimidated. And most of the time, if you've got someone that's in a collection situation, that means there wasn't enough money to take care of the thing, which is what caused it. But I've told people, and I've trained our financial coaches here for over the last 10

years that come in and guide them on how to help people with collection calls and mortgages and all those things, budgeting. It's our financial coaching program that we have. But guiding someone in this is giving them the confidence to call. And Jonathan, that's exactly what your sister needs right now. And so what I've helped people to do over the years is to sit down and maybe even write out a script, write out what you're going to say to this collector. When you call back, you see your blood pressure can get high. You feel intimidated already. And so we can

get nervous. And when there's fear, we can actually stall there's procrastination. So sit down and write out what you're going to say, call the collector back. Let them know it's you. Hear what they have to say. I want you to listen first. You see, oftentimes when we get nervous, we try to talk first or talk really fast or talk over someone. No reason for that. There's no disputing the money that's owed. What we're going to do now is be clear about what your sister can afford to do or the person on the other end of the call.

So call the collector back, listen to them, hear what they have to say, but be very clear on a few things. You want to detail the facts, understand exactly what it is they're asking for, but don't agree to anything on the call. You see, you're nervous already. I don't want you to agree to something financially that you can't do. I've talked to people that have agreed to make the payment the collector threw out, but they haven't done their budget yet. They don't know what they can afford. So let the collector know, if this is what I owe, that's $5,000, and they're looking for a payment of $150, you listen to those facts, you write them down, get the collector's name and phone number, and then you're able to sit down and look at your budget. If you're single or if you're married,

sit down with your spouse. You all decide what you're able to do. And you may not have $150 like the collector wants. So guess what? We're going to call the collector back, let them know your file number, and say, I understand you wanted a payment of $150, but this is what I can afford to pay. It's $50. And they may rant and rave. They may try to, oh, that's not good enough. I want you to remain calm. You don't need to participate in the drama. You need to be crystal clear on what you can afford to do. You remain calm. Once they get through ranting and raving, you reiterate, I can afford to pay this $50.

I plan to send it in by this time of the month. And see, being clear, you don't have to. You don't have to participate in the drama, and you don't need to get upset. What you want to do is stay focused on the financial things you can afford to do and how to help yourself. So that's the key. So America out there, if you're dealing with a collector or you know someone that is, tell them, call them back, take good notes on the call and remain calm at all times. All right, I'm back to the phones. I've got Lori on the line. Lori, this is Chris. How can I help you? Hi, Chris. I'm calling because I'm on Baby Step 3B. I currently have $88,000 saved.

I'm hoping to buy a home between $140,000 and $160,000. I know that you're okay to go ahead and start doing retirement as well. I'm currently doing the match of 6% at my full-time employer and 4% at my part-time employer. I'm 38 years old. My daughter is 10. So I'm wondering if I should increase how much I'm putting aside for retirement and if I should start at five as well. Okay. Lori, how old are you? I'm 38. 38 years old and your daughter's 10 and you're working a full-time job as well as a part-time job? Yes. Okay.

All right. And so right now, so you are saving up for a house, and you've got how much saved for the house? $88,000. Wow. Okay. How long have you been saving? Became debt-free December 2017. Okay. So my holdup is I don't know where i want to live

yes so i haven't bought a home yet right and and and you are absolutely smart to do that because a lot of people laurie will get so revved up and get so house happy that they'll hurry up and make a decision but you need to think long term right you with a 10 year old a 10-year-old, you know, you need to think about the school district. You need to think about location to where you're working. And it's not something to rush into. So I'm glad that you've taken a deep breath and you've slowed down to really be clear on this. A lot of people would let this money burn a hole in their pocket.

So, you know, with the dollar amount, I mean, look at you. You're looking to buy a house in the $140,000, $160,000 range, amount, I mean, let's look at you. You're looking to buy a house in the 140, 160 range and you've got 88,000 saved up. Now this 88,000 doesn't include your emergency fund, does it? It doesn't. I already have 12 of that. I like you. I like the way you think. I like you. No, I'm serious because what you're doing is you're being crystal clear and I want you to find a good real estate ELP that understands the parameters of the amount of home you're looking to buy. You told me clearly between 140 and 160 and that means you don't let any real estate agent take you to go look at anything that's over 160, okay? Right. Yeah, don't do it because you know what

will happen, right? They'll take you to go look at one that's $185,000, and you're going to fall in love with it. Right? You're going to be spinning around like a princess at Disney. You're going to fall in love with this house, and the next thing you know, you're going to end up spending more than you want. So I am very, very proud of you. I definitely, you know, you've got money saved up. Looking at it on your full-time job, if this is the job that you're focused on and doing it, I want you to get to that 15% overall of your gross income with investing because that's where you want to be, and I'm excited for you

because having patience, to be clear, about slowing down to buy a home is a good sign. Patience is a sign of maturity. That means you're interested not only in the now, but you're also interested in your future. And that's a big deal. So I'm very, very proud of you. I want you to stay very, very focused and slow down. You know, what school system do you want your daughter in, in a couple of years? And so think about that. But also, is it safe? You know, it's location to your job. I want you to really think through and take your time and do me a favor. Not only do you locate that home and go see it, I want you to go see it a few times. When you get close to finding the one that you think is right, I want you to drive by the neighborhood at night and get a feel

for what's going on. Go by that home, walk around it, bring your daughter in it. And when you find the right one, that's when you know you're ready to move forward and make the right decisions. Thank you so much for your call. And this is The Dave Ramsey Show. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave. But we've been taking your calls, diving into your questions about money, and we want to hear from you. So if you've got a question, I want you to give us a call. The number to call is 888-825-5225.

Again, that's 888-825-5225. I'm going back to the phones. I've got Chris out in Baltimore. Chris, how can I help you? Hey, Chris. Thanks for taking my call. Yes, sir. My wife and I, our only debt is only a $110,000 mortgage,

and we're looking to start a family soon, and we're looking to start a family soon, and we're looking to upgrade homes. So we're trying to figure out what we do with that mortgage now that we have an unclear timeline exactly when we're going to buy the home. We're looking somewhere in the next one to three years. Okay. All right. So looking to start a family, the current home that you're in right now, you owe $110,000,

but you know you're going to be wanting to buy a different home. Is that correct? Yes, sir. Okay. The home that you have the $110,000 mortgage on, how much is that worth? Approximately $180,000. Okay. All right.

And you guys have been married how long? Four years. Four years. Okay. All right. So looking to start a family, how does that make you feel? Very excited. Can't wait. Okay. All right. So looking to start a family. How does that make you feel? I'm very excited. I can't wait. Okay. All right. And the house that you're thinking about buying next, what's the price range on that?

Probably $450 to $550. Oh, wow. So it's a big jump. Yeah. Big jump. Why so big of a jump? Well, that's just what my wife and I have kind of been striving for. We've been working hard for the past 10 years in schooling. That's kind of where we want to live, and that's the price range on where we want to live. Okay, gotcha.

And so what other debts do you all owe on? None. None. So just this mortgage, and what's your household income? $400,000. Okay, all right. So you've got a big-size shovel looking to start a family. Are both of you working outside of the home right now?400,000. Okay. All right. So you've got a big size shovel looking to start a family. Are both of you working outside of the home right now? Yes, sir. Will both of you be

working outside of the home once the little one comes? My wife will go to part-time likely. Okay. All right. And see, that's good, Chris, to talk to and think about because a lot of times that's not something that's discussed on the front end. And so on the back end, as you all are looking at this home that you're looking to buy, you're going to be qualifying on both incomes. But in reality, you know the sustaining it's going to be on one income and a half. Does that make sense? Yes. But, you know, in looking at this, I mean, you guys, you got yourself debt free. Have you been saving toward down payment on the new home?

Yeah, we have about $80,000, not including emergency funds. Okay, okay. See, that's fantastic. $80,000, excluding the emergency funds, so you've got about $70,000 in equity. So, I mean, looking at this, I think it's going to be a matter of locating the right house, but taking your time, you know, going into it with your eyes wide open. Does moving up to this size home, does this make you nervous, Chris, or does it excite you?

It makes me nervous. I like the smaller condo we're in now, but my wife wants to upgrade. Okay. Did she tell you why she wants to upgrade? It's mostly school district, that when we have kids there, it's a really good public school district. Okay. All right. And so you guys, you don't have kids yet, it's a really good public school district. Okay. All right.

And so you guys, you don't have kids yet, correct? Correct. Okay. So now it just boils down, Chris, to timing. You guys may be in agreement on the school district thing, but now it's a matter of when do you do this? You know, because it's not a rush. You know, I mean, the kid is not here.

And even once the baby gets here, there's several years before they go to school. So I think, you know, you can begin to have that kind of conversation. So you guys both can feel good about it. Eyes wide open, know what you're dealing with, and then you can move forward. So if I'm in your shoes, Chris, that's the conversation I'm going to have. It becomes less about what we're going to do, more about timing. And so that way you guys can get clear. I like that you're saving up.

You guys have been very intentional, having $80,000 set aside. You've known about this home upgrade that you want to do. That's a good thing. But, yeah, so stay focused, my friend. Go into it with your eyes wide open and make a smart decision for you and your financial future. Thank you very, very much, Chris, for that call. All right, back to the phones. I've got Josh on the line in St. Louis.

Josh, how are you? Doing good, my man. How are you? Oh, I'm focused and not finished, sir. How can I help you today? Great, thanks. So we are $82,000 in debt, and that's my school. And we started in November with Baby Step 1. We're in Baby Step 2 now, and we've paid we started in november uh with baby step one we're in baby step two now and

we've paid uh fourteen and a half thousand dollars okay um my question is today uh should should i sell my wife's surprise birthday present in order to like work through baby step two oh so what so i got her concert tickets to one of her favorite musical artists. Okay. And just wondering, like, you know, I know we're supposed to put down, like, entertainment and vacations, cool things like that. Right. I didn't know if this would be feeding into, like, that spending habit, or should I have spent that much to do this for her, or should I just sell them and get her something else that is more affordable? Josh, how much did you spend on these tickets?

$350. Each or total? Total. Okay, total. Total. All right. And you said this is your wife's favorite artist? Yeah.

Okay. And who's the spender in the family? Are you the spender or is she? She would be. She's the spender. Okay. She's the only one who works right now. She's a spender. Okay. She's the only one who works right now. She's a nurse.

Okay. She makes about, well, our annual income is $45,000 a year. Okay. After overtime. Okay. So she's also the worker. Okay, got you. Are you in school?

I am. I'm in physician assistant school. Okay. And so you're in school full-time? Full-time. Okay. I actually did pick up a part-time job against the advice of my program, just stocking shelves, just trying to do what I can.

Yes, absolutely. And so how long ago did you buy these tickets? I bought them back in February. Okay. All right. So it was your wife's birthday. You bought these tickets. I'm not going to tell you you should sell them now. You bought these tickets. I, you know, I, I'm not going to tell you, you should sell them now. You know, you've got them. I think you guys go and you celebrate your

wife's birthday for her to have a great time. But I think moving forward, what I would do if I'm in your shoes is it would be something that you guys are talking about and you set aside some money for things like this, you know, mindset right now, things are tight right now for you guys. You've got one going to school full time, the other one's working. And so just stay in conjunction, you know, stay on the same page with each other, communicate, talk about the path, talk about what it is you're trying to get done and the timing of what you're going to do as you walk through it. And I think that's absolutely crucial. But no, definitely go enjoy the concert, have a good time. But just know, you know, you guys are staying focused and staying intentional as you move forward. So thanks, Josh, for your call. All right. I've got Susanna on the

line out in San Diego. Susanna, how are you? I'm fine. How are you? Oh, I'm focused and not finished. How can I help you? Great. I'm 79 and I have a nest egg, both a traditional IRA and a Roth. And I'm wondering if the if the mutual fund choices change as you age, or should I do the same? Okay. And right now, what's your net worth, Susanna? Oh, it's not very much. I'm on the very low end. I think with the equity in the house, it might be $500,000. But I have an income of $30,000 a year, which I budget very tightly. And my nest egg, the traditional IRA is $40,000 and my Roth is $5,000. Okay.

And I was thinking of investing the $5,000 into some mutual fund. Yeah. No, I think, I mean, you definitely can't go wrong putting it in the growth stock mutual funds. The bottom line is, is you want the money to grow. That's why we put it aside, because cost of living goes up. Susanna, you know this firsthand, but things cost more. And so money just sitting in a savings account not working for you, it's not going to do anything.

We need it to outpace inflation, which can hover between 2.5% and 4%. So if our money is sitting in a traditional savings account, getting a quarter of a percent, we all know that money is in a hammock. That money's not working. We got to put it to work so it can grow, right? So you have money to spend later. Susanna, I want you to get connected to a SmartVestor Pro. You can do that and locate it by going to DaveRamsey.com and clicking on SmartVestor Pro. Find an investment professional in your area that can walk with you and guide you to help you take the right steps for you and your money. Okay, I got this question in. This is from my Everyday Millionaire Facebook group. We've got a community of people that are fired up and wired up over there.

It's almost 63,000 people in this community. You should check it out. Go to Facebook.com slash Chris Hogan, and you can find the Everyday Millionaires group. But here's the question. It says, Hogan, I'm not a millionaire yet, but I'm working on it. How do I decide if I should keep my life insurance or if I should try to be self-insured? Well, Jack, I'll tell you this, my friend. When you have enough investable assets set aside that you can take care of you and your family, that's when you become self-insured. So if you've got a policy right now, you can hold on to it, but you want to make sure that you stay focused.

So get some guidance. Reach out to an insurance ELP. Have them look it over and know exactly what you've got going on. Well, listen, I want to thank the producer, James Childs, associate producer, Kelly Daniel, and, of course, you, America. Thank you for listening. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry.

We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.