The Ramsey Show - App - Do I Need a Bigger Emergency Fund? (Hour 1)

Episode Date: August 10, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. My co-host today on the air, Ramsey personality, number one best-selling author, Chris Hogan. Open phones for Chris and I to talk to you about your life and your money. 888-825-5225. Mac is in Ontario, Canada, kicking off the hour. Hey, Mac, how are you?

Hey, Dave, how are you doing? Better than I deserve. How can we help? That's great to hear. Thanks for taking my call. I am fairly new in the mobile crane industry. I'm a first-year apprentice, and I have about $12,000 in consumer debt. I saved up about $4,000 in my savings account, and the rest is just liquid right now. I have an infrequency of work.

I work three to four days a week, but, you know, I work seven. So I've been at this company for about three months now, and I don't know whether or not to just start dumping on debt or to keep a bit more of a security, per se, for the week or two. You know, cranes don't go out, right? So I just wonder what your thought on that is and whether or not they should just attack aggressively or be a little more conservative and have a bit more in savings. Well, there's two ways to do it.

Have you been able to make your bills the entire three months without uh i mean even if you had to scrape absolutely what do you think the probability is that doesn't continue well this is going to be my first winter going in i mean i know it's middle of august right now but um i know it slows down dramatically in October and up until about January and February. For the time for the next foreseeable few months, I don't see a problem making bills and paying off debt. Like you've said it before to other people that they get protective of, you know, or they get a bit anxious tapping into that money that they've saved up, right? Yeah. So the two things we do is one is you can just stop, stop your debt snowball,

stop your baby steps, and just pile up cash because you're unstable. The second thing we do sometimes, we don't modify the baby steps or modify the emergency funds, but one thing we have done where someone's got a volatile income, and it's not just a vague worry, it's a mathematical volatility that's measurable, then you would set what we call a hill and valley account as a separate account. So you'd have $1,000 for baby step one. You'd have a Hill and Valley account to cover the Valley months when you're on the Hill. And, Chris, we've done that calculation a bunch of times. Yeah, we have, Mac.

Now, let me ask you, my friend, when you said things will slow down in October, well, then they're going to get dark, right, in November, December, January, and February. What are you going to do during that period? Well, that's the other thing. I work for a union, so I can go back on the other work list and work temporarily for another company. Or I have had previous employment. I can run flowers down to the States so long as COVID doesn't go crazy in the fall. I, I have other ways of, of supplementing, but, um, it's, I'm new in the industry when being a first year apprentice, you don't have as much, um, experience. So they tend to send out more experience and senior apprentices. Right. So I'm kind of, you know, third on,

on my company, I've been keeping busy. but i'm just like i said just trying to determine whether or not i should prepare for slow and keep kind of what i have right now and build up more and pay off i'm gonna agree with dave yeah i think that hill and valley account is exactly what you're going to need to do and you're going to have to safeguard this money my friend i mean cutting down expenses severely. And once you get stable in your income, then you can start to attack it. So, you know, you're going to need a longer-range plan. Hopefully this apprenticeship is going to, you know, give you some relief.

I like that you're thinking ahead and you've got plans. But, Dave, it's going to be hard. You can't get traction. It's almost like reverse Christmas. I mean, you need to get ready. Christmas is coming. You have a problem coming. Yes coming you have a problem coming yes you have a problem coming christmas is not a problem but um but you have this you have a cash need coming in the winter and you need to prepare for that but let's not have this vague sense of i get security from

savings let's say i have a specific target that I've got to prepare for a downtime, and so I'm going to build some money for that, and I would call that the hill and valley account. And then leave your $1,000 alone, and the rest of the money, once you've got enough to cover your downtime in your hill valley, and that doesn't need to be $25,000 here, okay? That's a, you know, you just get enough in there to make it through the winter if you don't have a good income. And that's your Hill Valley account.

And then you go back and start working your baby step two. But I think trying to do three or four things at once is what gets people confused. And Dave, we told people during this situation, this whole COVID thing, that if your hours had been cut or your hours had been reduced, that it's okay to save. But once they stabilize, then you wake back up and unpause the baby steps yeah you're pausing though right and i'm not even saying he can pause temporarily build that hill valley and then play again but um you know the the point is that uh you don't want to get in a situation where you go i'm going to give myself an excuse to have a 25 000 emergency that's why i've got 12 000 worth000 worth of debt. That's emotional.

Just because I want to feel better. Yeah, that's emotional. And that's not the best route. Nope. But if you've got an unstable income, then you've got to get through that to be able to work the baby steps. That's what it comes down to. Amanda is with us. Amanda is in Providence, Rhode Island.

Hi, Amanda. How are you? Hi, David. Thanks so much for taking my call. So my question, and really I'm kind of just looking for some reassurance, is how do I deal with the guilt of going from full-time to part-time after building our entire goals and dreams and plans around me working full-time. So just to give you some background, we just became debt-free, paid off around $100,000. I was working full-time the whole time and really struggling because I have a very stressful career. And then after going through that for about six months, me and my husband talked and I

decided to go part-time. He totally understood, but I can't stop feeling really guilty because that's resulting in us losing about $60,000 to $70,000 of income. And we do give a lot. We plan to continue to, and we have family that rely on us. And, you know, we still make good money with me working part-time. What's your household income with you working part-time? $180,000.

Good Lord. Awesome. That's awesome. Amanda, where's the guilt coming from? Seriously. I guess because we were closer to like $240,000 at one time, and the plan was to pay off the house in like a couple of years.

I think you can do that at 180. Yeah. You're going to hit your goals. You're just going to hit them a little bit slower, and you're actually going to be able to breathe. And so what if you don't support your brother-in-law who won't get a job? Give me a break. You know?

Where'd that come from? You're supposed to work. Well, she said she's supporting family. Oh, okay. I didn't make that up. You got? Where'd that come from? You're supposed to work. Well, she said she's supporting family. Oh, okay. I didn't make that up. You got riled quick. You got riled quick. You went zero to ten.

Well, I mean, y'all, baby, there's no reason for you to feel guilty. You're making $180,000 a household income. Breathe. You're doing all right. You're all right. Life's good. I don't know how to tell you to fix that, but there's no reason for you to fix it. Just let it go. Let it go. Like Frozen. Life's good. I don't know how to tell you to fix that, but there's no reason for you to fix it. Just let it go.

Let it go. Like frozen. Like bologna. Folks, I love telling you about well-made, well-thought-out products. Today, I'm talking about Grip6 belts. I don't know about you, but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable. Grip6 belts are unique. Owner BJ designed a truly modern minimalist belt made of high quality materials with no holes, no flap, and no bulk.

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about not working full time when you make $180,000. Because you and I just didn't have any feels on that. We were no touchy-feely. No, we weren't, Dave. We weren't helpful at all. That's not our strong suit. We were not helpful at all. No, but we're going to do better. The Bob Newhart counseling video, you remember that one

when he used to say, you listen to the whole thing and he'd say, Stop it! Just stop it. There it is. That was his whole counseling. That'd be $100. Stop it. How do you stop feeling guilty? Stop it.

I don't know. I don't know how you stop. I mean, we need Dr. Deloney to help us. He needs to help us, but he also needs to help her. He does. And we'll do better. Moving forward in this show, we're going to do better. We're going to have more feelings.

Except for that part when you lied. Because we won't either. Neither one of us are good at this we're not good at saying you know i don't feel guilty when i just stop doing something you just stop you know i don't but it's just i'm i have more emotions than you though hogan's gotten a lot better on the show with talking about emotion hogan's opening up on the show james really is i used to have just three dave you how many how many emotions do you have now well i used to have just three, Dave. How many emotions do you have now? Well, I used to have three. It was happy, mad, and about to be mad.

That's all I had. Now I've got eight. I've got eight. You're growing. I am. Growing before our very eyes. See? And I'm talking about your emotions.

Wait a minute. Sazism. All right, come on. Take a call. I'm not even talking to you anymore. Let's get a call on one. All right, let's try. Caleb is with us at Colorado Springs. Hey,ism. All right, come on. Take a call. I'm not even talking to you anymore. Let's get a call online. All right, let's try. Caleb is with us in Colorado Springs.

Hey, Caleb, how are you? Hello, Dave. Hello, Chris. Big fans. I've read most of your books. I'm actually working on Everyday Millionaire right now on Audible. Fantastic. Very cool.

Thank you. So here's my question. I'm active duty military in Colorado Springs area. I have 10 years left of active duty service. I'm married with three monsters of the human species. Me and my wife just completed baby step two, and we're working on baby step three, and then on to baby step 3B, which is saving for a house. The local market and the crazy stuff that's going on a single family home that fits the needs even

in on the lower side is from 300 350k which is way past what i want to buy like finance for a house um i will most likely be stationed in the area for the remainder of my career at least the colorado area um do you think it's wiser to hold off on baby steps four and five, investing and saving for kids' college, and just pile up cash to pay outright cash for a house down the road, or just save up for the next three or four years and then put 20% down on a house? Either one's going to be okay. Three or four years will tell you a lot about your plan, so you've got to do that either way, right? Yes, sir.

So I just go about the business of saving and then make your decision when you get the money built up. You can tell what the market's doing and how your career's stabilized by then. Yeah. And, Caleb, thank you very much for your service. But you're one of the rare military people that I've talked to that said you're most likely to be stationed there for the next 10. What gives you that opinion? So I'm actually transitioning from the Air Force to the Space Force, and Space Force is predominantly in the Colorado area.

Gotcha. Okay. So I'm currently stationed at Peterson Air Force Base, but there are bases all around here that a lot of the Space Force stay. So when you move a base, it's literally moving, you know, 10 miles down the road versus on the other side of the country. Okay. Okay. Gotcha. That's cool. Well, good for you, man. That's quite an adventure you're on. And again, thank you for your service. Yes, I would purchase a home and you can decide which way you want to do it once you've got the first step done, and that's saving the emergency fund, you're debt-free and have your down payment saved.

At that point, you can analyze thefree, and have your down payment saved. At that point, you can analyze the market and say, what's happening then? Because Colorado Springs market's a wonderful market for real estate. It's not crazy high. Denver's gotten crazy high. But Colorado Springs has gone up a lot, but it's not unreachable, and I don't think it's going to become unreachable. No. But, Dave, we get a lot of military men and women listening to the show.

And just want to clarify, if you're going to be stationed and moved around, it's not time to buy a home. The last thing you want to do is be a long-distance landlord with all the headaches and potential issues. So you would wait to be able to buy a home once you were done with your service. Or you were going to be stationed somewhere for a longer extended period of time yeah absolutely well very cool very cool hey thank you man we appreciate you joining us hey have you ever done the long distance landlord thing um i bought a house uh in cincinnati when i was flipping houses before i went broke uh that i intended to flip and i couldn't get it sold so i ended up putting a tenant in it and it was a nightmare but i have worked with so many people who did

do long-distance landlording that it um there's just it's at at best it's inefficient at worst it's a nightmare because you're not you don't have your eyes on your property and all the property that i own is within a 45 minute drive a, a 40-minute drive of my current home. And I can get in a car on a Sunday and drive around. And, you know, in a few hours, I can at least see the exterior of all of them. Gotcha. And certainly, you know, my team that manages the property can do physical inspections quarterly without having to get on an airplane to do it so um you know but when you have long you got a beach property and it's long distance landlording you've got a resort

company that's managing it sometimes they do a good job they take half of the rent to start with in those situations and so um sometimes they don't do a good job sometimes they overcharge for everything and you get down there and the tenants have you know messed something up and nobody was watching it because it's not yours. Nobody watches it like you watch it. Ramona is with us. Ramona is in Olympia, Washington. Hi, Ramona.

How are you? I'm okay. Thanks for taking my phone call. I'm so nervous. No troubles. We've never lost a patient. How can we help? So I was wondering, do I pause Baby Step 2 to get a lawyer to try and fight custody for my son

um long story short I called in a few weeks ago talked to Anthony O'Neill and he gave he pretty much said about stop acting like you're married if you're not married so you know separate all the finances and separate everything between me and my boyfriend. And I've done that. And while doing that, I have found out that he blindsided me, and he decided to get a lawyer to try and get custody of our son. And I just don't know what to do, and I'm just scared. Yeah, I'll stop everything and get a lawyer. Okay. Absolutely. The baby's more important than

you're working your baby steps besides that this guy's a bully and as soon as you punch him back he'll be gone yeah it's it's been a he's got he's got you buffalo but he ain't got me buffaloed right you know anthony warned me it could get legally ugly quickly and i've found that to be very true yeah so you're not married you had the kid with him and he's trying to get the kid is that what you're telling me right yeah yeah okay yeah and and listen ramona you need to shift your mindset okay this went from love to battle and don't shift back into love, okay? Don't, because he's going to attempt to play on your emotions. He's going to try to say, oh, hon, you know, we can do it.

You need to be real clear, because the clock starts ticking when you hire an attorney. This is real money that you're going to be spending, okay? Yeah. And so you've got to get your heart ready and you need to close the door see people can't push buttons if you remove the buttons and here's the thing you're looking for you're looking for an attorney that is so mean that you're not sure you even like them because you need to turn loose a doberman on his throat this is not this is not pat this is not patty cake he's coming after your baby

yeah and if you're gonna have to stop your life and fight the guy because he's a bully then turn lucid doberman on him don't turn lucid chihuahua no thank you one bark throat and you if you're gonna fight you got to fight to win you really do and you need to cut cut off communication if you're gonna text you if you're going to fight you got to fight to win you really do and you need to cut off communication if you're going to text you text you need something get your attorney's advice on exactly how to work that's exactly right and you need to stop having conversations with this bozo yeah yeah yeah and i assume you're out of the house and those kinds of things i'm sorry honey i'm sorry you're going through this but this is this is yeah it will pass it will pass it will pass ramona i guarantee you

next year you'll look back on this and go god that was awful yep and i'm glad that's over it's in the 2020 year because pretty much want to get everything that sucks in 2020 and get it over with right just leave it all in this year wisdom teeth root canals whatever it is get it done between now and like christmas i'm gonna just try to screw up anything I can screw up so that it doesn't bleed over into next year. This is the Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions, Michael and Amanda are with us on the debt-free stage, which can only mean one thing, that they're debt-free. Congratulations. Thank you.

Welcome. How much have you guys paid off? $355,000. Whoa! How long did this take? About four and a half years. Wow,5,000. Whoa! How long did this take? About four and a half years. Wow, good for you. And your range of income during this time?

$50,000 to $178,000. Wow. What do you all do for a living? I'm an occupational therapist. And I'm a family physician. Okay, very good. So the careers took off, huh? Yeah, we started out just me working in a residency, and then Amanda joined, and then I finished residency.

Cool. Where do you live? In Gainesville, Florida. Okay, cool. Cool. This sounds like maybe, is that all medical school? Well, medical school and then my occupational therapy school. Okay, so all student loan debt or mostly?

All student loan debt. All of it. Yeah. 100%. $355,000. When you sat down and looked at that, did that like blow your brains? I mean, blow your mind? Yeah, it really did. I grew up in a house with a lot of, you know, consumer debt. And my dad was constantly getting phone calls, um, you know, for debts that he hadn't paid yet. And so actually I found you way back in the early two thousands and, um, you were given, or you, you had the financial piece going through our local church.

And I said, we got to sign up for this. And so from ever since then, he, he went through there and got rid of most of his consumer debt, and I was on board with that. But then when we ended up going through grad school later, I'd always thought of it as maybe something a little different. And about halfway through medical school, I really started to feel the weight of that. And I was sitting there. We were already like $150,000, $200,000 in debt, and I was just like, oh my gosh, we have to really change this. And so I started listening to your podcast like three times a day, basically, or three hours a day. And Amanda, she could tell you about just like she would walk into the shower and I'd be having it planned. And I mean, it was all the time, but it really changed my mindset. And as

soon as we finished up, four and a half years ago was when I finished up medical school. We were like, we've got to get this done. A lot of people wait until the end of residency to get going because that's when your big jump in income was. But I was like, no, we've got to do this right now. Yeah. So you went ahead and started. And then you come out. You're PT, right? OT.

OT. OT. I'm sorry. That's right. Occupational therapy. I'm sorry. And so you come out. Your career kicks off, too.

So you guys are doing great now. Yeah. I think it didn't really hit me like how much, like the debt, the numbers. I hadn't heard of you. I just kept hearing about you via Michael, you know. And so when he kept talking about working off debt, you know, in residency on his free time, wanting to go work a second job, you know, when residency was already all consuming, I really didn't like the idea and was like, no one else is doing this, you know?

So I struggled with the Dave plan. Well, tell him he's right here. No, this is the time. I know, I did.. Well, tell him. He's right here. No, this is the time. I know, I did. Get clear. Get him. There were many times where I... There were many times.

I was just like, turn it off. Like, I don't want to hear you listening to this all the time. Your name became a four-letter word. You joined a cult. Oh, my. Yeah, I just, I didn't grow up really learning much. So, at what point did, Amanda, did you kind of make that transition and get past all the fact that he was wearing you out with this stuff,

turn my name into a cuss word, all that? But at what point did you say, okay, I think this is going to work. I'm on board. Well, I think that he's a pretty smart guy. And so when he talked about this dream and, and like looking into the future, he's a planner and I, I'm more of a, like right now. And so I just wanted to, you know, be right now. And he kept talking about the future and like, let's just dream about the future and what

do we want? And I think I started to believe like little by little that like, okay, maybe like we could, you know, get out of this and like, you won't have to work as much. Like, that's kind of what I saw was like maybe eventually, cause I went back to work full time after having our first kid and I really didn't want to. Um, and I think I just started to dream with him about, okay, well, if we do this thing you're talking about, maybe life could look different eventually.

So I think I just was more trusting him that, let's try this and see if things change. And if you play it through, then you can be home full-time, right? Mm-hmm. And you didn't want to go back to work. I just at least didn't want to go back to work full time when, like, he was so little. Yeah. You know? Okay.

Which I think when people are getting an occupational therapy degree or any other degree, they don't think about that as a possibility versus, you know, I might not want to work all the time when I got little kids. But I've got these student loans that are demanding that I do. And so you've got two masters in your life. You know, you're the master of doing the right thing with your kids and then the master of the stinking Navient, right, coming down on your head. Way to go, you guys.

I'm so proud of y'all. Yeah, that's a big deal, Michael. As you talk to other people out there considering the medical field, what advice would you give them? Well, I would just say, you know, be thoughtful about what you're getting yourself into and realize that even though it, and many people say that it's very different than consumer debt. It's not. It's still a burden that will live with you for the rest of your life as long.

And, you know, I mean, you guys know about all the craziness with the student loan forgiveness that a lot of people pitch. And now, like, no one's getting it. And I have a lot of friends who are really banking on that and are really anxious about it. And I feel for them, but like we're beyond that, you know? And so it's been a really big blessing to just, well, you hear these headlines every day about like, oh, is it going to happen? Is the public student loan forgiveness going to happen or not? And I'm just like, I don't have to worry about that. And so that was great. You don't have any. Exactly. So what's the key? What did you tell people the key to paying off $355,000 in four and a half years is? Well, we were talking about this and saying it's really important to be on the same page.

Like with that dreaming I was talking about, like just like looking to the future, like what we want, you know. And then one thing, especially for for me was not comparing ourselves our situation to people around us you know I kept looking at other people in residency and friends or family and thinking well they're doing this why like let's just be normal and like do this too you know credit cards are fine like you know let's just get the house. I mean, all the things. But the dreaming got getting on the same page with the dream changed that. Yeah. And one thing I would just say is that, you know, in doctors, we are sort of used to living in the lifestyle, especially once they get sort of pitched that you finish medical school

and you're just like set. Um, but you know, when I was in residency, I was working a time, I was working 68 hours, 60, 80 hours a week. But basically any opportunity I had, I'd be working like a 10-hour shift doing like extra work and stuff. I was like, we're not going to do this forever. We're just going to do this for a short period of time. And now we have two kids. We have a three-month-old as well. And Amanda is able to stay at home basically as long as she wants. And, you know, if she wants to go back to work, that's great.

But, you know, there's no pressure. And I'm not sitting here working a second job anymore so yeah well i just i love that that clarity that you had that this isn't forever right it's going to be a short period of time and it's going to be intense but look at you now you know you've got options you get to make decisions for you yeah yeah congratulations you two so Yes. Very, very well done. Congratulations. Fantastic. How's it feel? It's awesome.

We did a lot of celebrating. Good. What did you do to celebrate? Well, every single time that we, you know, we list our debts from small to largest, every single time that we actually paid off one of the individual student loans, I don't know if you remember, but you had a guy on your show a while back, D1. He had that Paying Sally Maybach song. And so we'd actually play that song and, like, dance to it.

Every single time we paid off a debt. He will love that. He will love that. We have many videos throughout the years of us dancing to that. And for our last payment this December, we did that, too. And we did it with our first kid. Let's get him in the picture for your debt-free screen. That's perfect. We've got a copy of Chris's book for you, Everyday Millionaires.

And get them all in here. This is perfect, yeah. All right. It is Michael, Amanda, Oak, and Jade from Gainesville, Florida. $355,000 paid off in four and a half years, making $50,000 to $178,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! That's cool. Fire that D1 music, James, if you can find it. I finished paying, selling, maybe Maybe I finished paying, selling, maybe Maybe I finished paying, selling, maybe Maybe

I finished paying, selling, maybe This is the song I danced to, by the way, just to let you guys know. Good pull, James. Nice job. He's fabulous. That thing went viral. It went crazy. That was four or five years ago, I guess, that we got that. It's catchy.

Yeah. Yeah? Yeah, it worked out. Way cooler than me and somewhat cooler than you. Oh, yeah. Without a doubt. Without a doubt. I have no cool.

None whatsoever. I hang out with cool people. That makes me look cool. All right, Linda is in Portland, Oregon. Linda, welcome to the Dave Ramsey Show. Hi, Dave. Hi, Chris. Thank you for taking my call.

Sure, what's up? Can you hear me? So I'm going to be a little bit vague, and I apologize right now, but I am a survivor of domestic abuse. Sorry. So I'm safe. Good. I have a great job.

Mm-hmm. I'm in a great neighborhood. I bought him off the house. Um, I can be mortgage free in 17 years. Um, I have $35,000 on a truck, which I can pay off can pay off as soon as the divorce is final I want to make sure I'm being a good steward of my children and myself because I bought them out the house and I the house appreciated like over a hundred5,000 in a year. So I'm safe here. I have great neighbors, and they take care of me, and they take care of my children. I want to make sure that I'm not ignoring my head while leading with my heart.

Can you afford the house? I can. I actually have a great job, and thank you for letting me be vague and not asking me what I do for a living. Okay, that's fine. But can you tell me what your take-home pay is a month? Without child support or with? Without.

My take-home a month is, sorry, you were going to ask me this. I wrote down a whole bunch of stuff for bullet points. My take-home a month after taxes and health insurance is about $6,000. And how much is your house payment? My house payment is $2,500 a month. That's pretty steep. It is. If he doesn't pay the child support and he's an abuser so we can pretty much assume that

he's not going to pay child support at some point um no i have his wages garnished yeah but he'll change jobs and he's a manipulator and he'll hide money and you you know i i hope not i hope he pays it but um but i don't trust abusers so umers. So I have to build your life on a safe foundation, which is a word that's a big deal to you. It is. The $2,500 out of $6,000 is pretty tight. I mean, that's like 40% of your income, and I don't know if you're going to be able to do that long term. Does your income come up? Do you have a projection of your income, and I don't know if you're going to be able to do that long term. Does your income come up? Do you have any projection of your income coming up?

My job is incredibly safe. Now, is it coming up in income? Only because of yearly increases because of my years of service. Yeah. How old are your kids, Linda? That's not my name, so it catches me off guard because it wasn't Karen or Cheryl. But I can't tell you that because it's – Okay.

That's fine. Honey, here's the thing. The bottom line is that 2,500 as a percentage of 6,000 is very difficult. Yeah. That's the bottom line. So you feel safe now, but the very thing that causes you to feel unsafe may economically, mathematically lead you to becoming unsafe because you may paint yourself into the corner trying to hold on to this house.

Yeah, absolutely. So I'm not going to throw my fist down and demand you sell it today but i want you to watch this very carefully because by having that much of a house payment you're going to feel forced into not saving for college forced into not uh uh saving for emergencies forced into going into debt to buy a kid a car you're going to feel forced because've got no money because it's all going to stink in the house. You're house poor. So I'm not saying you've got to sell it today, but every year you've got to revisit this and decide again, is this still wise?

Yeah, and here's the reality. As you look at rebuilding your life, you need some stability in there. So being plugged in with the church, having good people around you. But that home is just a house, and the kids' preferences, kids are resilient. You can find nice neighbors somewhere else, but this is a matter of you moving forward. And in order to move forward means you have to grow forward, which means you've got to release some stuff. And so this house may, in fact, end up being one of those things that you have to release in order for you to be able to truly to move forward financially. Yeah. Mathematically,

five years from today, if you're still fighting this exact same ratio or within 3% a year raises of the same ratio, you're going to be struggling. You've got so much of a house payment. I mean, you're, you're very close to me going, you need to sell it right now. But if you want to fight it for a year or two, I'm just giving you the warning of what you're facing, your uphill climb. Thanks for the call, and I'm so sorry you're going through this. It's a horrible, horrible thing you've endured, and I'm glad you're getting the other side of that. That's a bigger win than the mathematical stuff. You beat this stuff, you can beat the math for sure. Our question of the day comes from Blinds.com.

They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they'll remake your blinds for free. You get free samples, free shipping, and new promos every month. Use the promo code RAMSY to get the best deal. Chris, our question. All right, today's question comes from Jacqueline in Oklahoma. She asks, our son starts college next year, but we are just past baby step three. Do we need to skip retirement savings and save for college gazelle intents or invest in retirement

for baby step number four? Well, Jacqueline, I can tell you this without a shadow of a doubt. There's many ways for your young person to get a higher education and there's a 50 50 chance that they go to college and graduate. There's a hundred percent chance that you're going to have to retire. One hundred percent. At either some point, your body won't let you work or your job lets you go. Whatever it is, a hundred percent chance. So there is absolutely no way that I'm going to put off investing for your retirement. Not at all. As a matter of fact, if you look at the baby steps we talk about, you can invest that 15% and save for college as well. College and scholarships, Dave, grant scholarships are available.

Too many people are just assuming the kids have to take on debt. Yeah. I agree, Jacqueline. The only thing I might do is I might tap the brakes for six months and get that first semester or first year cash flowed and then start my baby step four. If you can get that going with a plan to cover the other years while starting your retirement. That's fine. But I'm not going to say, oh, no, we're not going to start retirement for four years. I agree with Chris. So here's the thing about college. Pick up Anthony O'Neill's book, number one bestseller, Debt-Free Degree.

It'll walk you through exactly how to go to school debt-free. Now, number one thing when you're going to school, if you want to go debt-free, is college choice. It's simple. Choose a school you can afford. That typically is going to be an in-state school, state school, in-state, not out-of-state. And, you know, it's going to be one-fourth to one-eighth of a private school in the same neighborhood. And the other thing is, your state a lot of states now have the first two years of community college free or almost free and line those two credits up

where they can transfer choosing where to go to school is the number one value proposition of getting a good degree and getting a degree that works and getting it debt free working while you're in school for the kid is not child abuse. Getting the kid to sign up for scholarships five a week. They have to do one a day every day, and they get turned down for most of them, but if they get a few up, it'll go a long way towards getting this done. You do that handful of things with the other stuff from the debt-free degree book, your child can go to school debt-free. They're going to be working. They ain't going to be

playing beer pong. Novel idea. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.