The Ramsey Show - App - Do I Really Need to Build a Credit Score? (Hour 1)

Episode Date: October 20, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, where 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. Anthony O'Neill, Ramsey personality, is my co-host today here on the air. Open phones as we talk about your life and your money. The phone number is 888-825-5225. Well, Anthony, my friend Rush Limbaugh announced yesterday that his health has gone sideways and that the cancer has returned,

and he's not doing well at all. Heartbreaking time for those of us in the radio business and those of us that know Rush. I know some of you hate his politics and some of you are so caught up in your ideology that you say and do mean and nasty things to people during times like this. And you should be ashamed of yourselves. But here's the thing about him uh there were a couple of people in america that were doing talk shows of some kind or another before him but he pretty much invented talk radio absolutely 1988 he comes on the air and i remember hearing i wasn't in radio business until I didn't get on the air until 92, four years after that.

And so he was still fairly new, but he was already Elvis. I mean, Elvis invented rock and roll. Absolutely. Rush invented talk radio. And so whether you agree with his politics or not, there's two or three things you can know about him. Number one, he's an incredible broadcaster. Number two, his intellect is incredible. And he's a worthy adversary if you're on the

other side of him. Uh, and, uh, he takes no prisoners and, uh, goes for it. Yeah. Uh, you may or may not like some of the things he's done over the years and you know what? I don't really care. Right. Um, you know, when someone has a death sentence from cancer, uh, that is an iconic figure, uh, just because you disagree with them. All you do is you just say, man, we're praying for

you and for your family. And I sent a note to some of his guys a few minutes ago on email and told them that if there's anything we can do to help, we would. I don't know what it would be. How do you help? I don't know. But it's not like they want me to fill in because it's a completely different thing. I don't need to be on that show.

But I wasn't suggesting that, in other words. But the point is anything that you could do and, I mean, and you honor an iconic person. Absolutely, Dave. Even if they are an adversary. Absolutely. And you know what, Dave, when James and Kelly and I was teaching me how to take over the show from when you're going some days. One of the first thing I did on my own was just go back and watch some of his stuff because he's just an incredible broadcaster and knows what he's doing.

And I was able to actually learn from a guy that, you know, I didn't really listen to that much growing up. I didn't really listen. Not at all. Right. AM talk radio. You. Not a chance. Not a chance. You know, but when I joined this team and joined you and listened to you, I was like, I need to learn from him. There are some things I can learn from him. And so I want to send my love and my condolences not just to him but to his family and even to his listeners who are actually feeling this a lot right now. Yeah. And I don't know what I can do, but whatever you do, Dave, I'm supporting you and whatever we can do as an organization as well. Yeah.

So, Rush, we love you. We're praying for you. And, you know, again, we can't do anything except just say the guy invented the business that we're in. Yes. At least this portion of my business, the business where I'm on the air. And no one was doing it. And there's a whole bunch of people out there trying to be him that aren't and never will be there's a lot of people tried to be elvis yeah and they couldn't they couldn't do it and um you know they try to follow in the steps of greatness and mimic it and

you just you know there's a there's a there's a level of talent. There's a level of when someone just invents an entire space out of the, you know, crevices of their brain. It's a different kind of person. Yeah. It's a different kind of a thing. And so, you know, we don't do anything except say we're big fans of him personally, big fans of his broadcast, big fans of him. I agree with most everything he says, and a lot of you don't do anything except say we're big fans of him personally, big fans of his broadcast, big fans of – I agree with most everything he says. A lot of you don't. That's okay.

You're allowed to be wrong. This is America. But right now, Dave, let's say this. Well, I'm going to say this. Even if you don't, right now is not a time to argue what you agree or disagree with. That's exactly right. Now is just the time to honor. Have a little class.

Yes. For goodness sakes in America, have a little honor, have a little class, have a little dignity. Yeah. That, that you can say,

God's a warrior. Right. You know, and I know an adversary with honor. And so, um, no question about that. So let's talk about that class thing,

Dave. Cause you said something that's just so key. And I'm going to say it here in the air. And if you tell me to shut up, I'm going to shut up. But when Donald Trump got the COVID virus, Bishop T.D. Jakes went on there and said, I'm praying for Donald Trump. He said, this is not about politics. This is about a man's life. Yeah, because T.D. does not agree with politics.

He doesn't. I mean, we both know Bishop Jakes. And we're 100% sure he does not agree with the politics he doesn't i mean we both know bishop jakes you know and we're 100 sure right he does not agree with his politics right but the man stepped up as a christian and said hey i'm praying for his health because his health matters all human beings health matter and to me that was a classy thing and i mean you will be shocked dave of how many people went after bishop jakes no way yes because he had class like you honoring and, and what we're encouraging people.

And I think for me, sometimes we can disagree with people, not agree with certain things, but that means we can't be, be professional, classy and be, be respectful and just have love for the human being. Yeah.

And that was frustrating to me. Well, this thing where if I disagree with something you say, you do, I have to burn your house down. Yeah. It's gone too far. It has. You know, I have to have scorched earth. I will never do anything you ever do ever because that one thing you said on a tweet that I didn't even really understand,

but I'm still pissed off about it because I think I'm supposed to be. You know, I mean, some of you people really need to get a life yes you really need to lighten up a little and just step up and and you know have a little bit of idea that maybe someone that's different from you is also worthy of your respect there you go dave and so i mean i've the stuff the stuff we've learned in the year 2020 should have taught us that. But instead, we all just have to just completely tear everything up. I will get hate for two days just for this segment, honoring Rush. I'm going to be right there with you, Dave.

I'm probably getting hate right now. You'll probably get more than I get. I know what's coming. But, you know, guys, we've know, it's just, you know, guys, we got it. We got to do better. We have to. You got to be able to disagree with someone without being said that gum disagreeable. Absolutely.

It's just ridiculous. I didn't know that story about Bishop Jakes. Absolutely. I didn't know he got piled on. Oh, yeah. And I went there and said cancel cancel culture. Hit him. I mean, well, no, no.

That's Bishop Jakes. And he stand up for the kingdom. He can't cancel that. He didn't care. He really did. You know, bring it. Bring it. Just bring it.

Yeah, he's not worried about it. He's got a really sizable backbone. Yeah. And I was praying for our president. That is the president of the United States of America, and he was sick. You don't have to pray for his policies. Come on, Dave. You can pray for his health.

Exactly. I mean, and I did the same thing for Barack Obama. I didn't wish some kind of bad thing to happen to the man personally. Yes, sir. Didn't agree with hardly any of his policies. We know that. But I know most people know that it's a widely publicized fact. But I still I don't have to be, you know, I don't have to be such a jerk. And you're not, Dave. And man, sometimes I have been in the past. But I'll tell you what, I'm getting tired of people doing it, so I'm going to quit doing it. And, man.

Yeah. Now, when it comes to leasing a car, I'll be a jerk. Oh, me too. I'm right there with you. If you do any kind of debt. Get a credit card? Oh, man. Let's just get down on Visa right now.

Yes, sir. I won't cuss you out, but I will scream at you. This is the Dave for mc show folks i love telling you about well-made well-thought-out products today i'm talking about grip six 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. And the buckles come in really cool designs and are interchangeable. I personally own these belts in different styles. And talk about affordability, Grip 6 belts come with a lifetime guarantee.

And that means if you no longer like or fit the style of your belt, you can replace them for free. Plus, I like the way these guys do business. Grip 6 is determined to help build and modernize american manufacturing to learn more and get this month's dave ramsey special visit grip6.com that's grip6.com anthony o'neill ramsey personality is my co-host today here on The Dave Ramsey Show. We're going to jump on the phones and talk to a friend, multi-Grammy award-winning, platinum-selling artist. Lecrae is on the line.

He's evolved into a New York Times best-selling author as well because there isn't anything this guy can't do. Hey, Lecrae, how are you, man? Doing well. How are you doing doing well how you doing better than i deserve man honored to have you with us thanks for hanging out so i got to look through the new book it's awesome oh yeah wow thank you thank you it means a lot coming from you i am restored how i lost my religion but found my, the subtitle is a mic drop. I mean, that's awesome right there. Good stuff. So in a year like this, I mean, the year of 2020, the dumpster fire of a year,

restoration of any kind is a good thing, right? Absolutely. So you had a lot of projects going. Talk about this message of restoration and why it was a big deal for you particularly this year well yeah i think um you know when you're talking about restoration you're talking about the idea that the unfixable is fixable that the unmanageable is manageable that um it's you know, change is possible. And this is not the end.

This may be a very terrible chapter, but it's not the end of the story. And I needed to know that. I needed to know that emotionally, mentally, professionally, spiritually. And once I came to that reality, I wanted to write something to help other people navigate that space. And 2020, as you said, has been just devastating for so many people. And it's just, you know, it's divine how this book is coming out during this time period. Yeah, it's almost like you scheduled it or something, or God did anyway. So sometimes, I mean, because you're, you know, you're a little bit because you're the cool dude.

I mean, you're the hip-hop artist with the Grammys. You're the best-selling author. You're the entrepreneur, best gospel album, 15 Dove Awards. You've got all these things. And I'm blessed, like you are, to have gotten to know a lot of guys who have had that level of achievement. And sometimes what's amazing to people that are looking at you from the outside is that everything's not always perfect on the inside,

even though we've stacked up a few trophies. Yeah, absolutely. Yeah, I mean, you never thought you would be the candidate that fits that description. You know, the person who's got it all made, but it's internally just, too heavily focused on attaining. You know, I've had a lot of historical wounds that led me to subconsciously believe that the more I achieved, the more accepted I'd be. And it took me a long time to realize that if you live for people's acceptance, you die for their rejection. So that was a hard pill to swallow. And, you know, even in following the example of someone like myself and wanting to manage my finances well, I had to check my motivation.

You know, was my motivation to be a good steward or was my motivation to be perfect and have it all together so that I can pat myself on the back and others will do the same thing. Yeah, it's validation that the stage gives us sometimes can cover up this, the vulnerable side of what's really going on. So one of the things I read that I loved about you, one of my favorite trips, and I've been blessed to travel most all over the world, but one of my favorite trips I've ever taken is I've done several trips to Israel.

And I hear you guys, that you went to Israel and that you were baptized in the Jordan. Whew. Most phenomenal trip of my life. I mean, I wish I could go back every week. It was just so amazing. I felt like I just barely scratched the surface of history and faith. And, you know, it was just so amazing. For me, the Jordan was, being baptized in the Jordan was more or less symbolic. It was just trying to follow in the footsteps of of Jesus for me which was um you know just an incredible experience and so yeah I don't know you know if I've ever experienced anything quite as amazing as that trip was it was just the things that I had been

learning for years and believing uh manifested themselves and came to life. Well, it caught me off guard because it was this collision in my brain between my faith and my knowledge of scriptures and the geography, the modern times issues, the Old Testament and the New Testament, and you're standing on both of them with one foot each, and the proximity of things. I couldn't believe it. and you're standing on both of them with one foot each, and the proximity of things. I couldn't believe it. I'm standing on Mount Carmel, and I'm looking across the Jezreel Valley, which is the Valley of Armageddon,

and there's this little white village on the other side, a little Mediterranean village. And I said, so what's that over there? And the guy that was with us said Nazareth. And so I'm standing in the Old Testament looking across Armageddon at the New Testament. It just blows your mind, doesn't it? That was probably the single most amazing part for me, was just seeing those places and thinking to myself, like, wait a minute,

so they walked from here to here? So when you're reading through the scriptures, you're like, wait, they walked? And probably the single most amazing thing, I can't say single most, but one of the most powerful things for me was that, you know, they don't, you know, Israel doesn't make any graven images, no statues or anything like that. So, you know, you don't see like, oh, this must be David because they made a letter of someone who had acknowledged that he had been in a fight with Israel's King David. And it was like, wow, this is real. You know what I mean?

Just mind-blowing. Yeah, it puts a different, I mean, the Bible stories, and you go, well, that was only two blocks over there, or that was 40 miles. Yeah. And you think the proximity of things, and it tied it all together. I just came home, and I said, you shouldn't be allowed to preach until you've been there. I mean, it's just, you know. I agree.

It's pop-up Bible. It changed everything. Now, Dave, I want to ask the great question, bro. Um, look, you and I just got off the phone earlier and you speak so vulnerable, uh, vulnerably about the trauma you've experienced in your life. Um, when you say like you've experienced this stuff, how do you heal and how did you, uh, how do you teach that to others? Yeah, well, you know, healing is a process, and it's going to look different for everybody. But I think, you know, it's laying some groundwork. It's doing the work. Obviously, you know, as a believer, I believe that God is our healer, but, but if he,

but he usually, he usually works through natural processes to bring about a supernatural result. And so we often will say, oh man, I'm, I have, you know, heart condition, Lord heal me. Well, the healing is going to come through a nutritionist and a workout. That's probably what's going to happen. Or you say, God, I'm in debt. Help me bring money and heal this financial dilemma that I'm in. Well, it's going to be a process. It's going to be a process of financial education and saving and so on and so forth. And so what I would tell people is that God is not transactional. He's relational.

So he's going to walk with you through your process, not snap his fingers and make it go away. You have to join in that process. So you have to begin it and start the work. And for some, it's therapy. If it's mental and emotional, you know, if it's physical, it may be exercise and eating. You know, you know, so all those different things are part of the healing process, but he makes them available to us. And I wouldn't be remiss. Let me say this, too, because I just want to acknowledge Dave that when the pandemic initially hit, you know, I'd already been through so much mental turmoil historically,

but I had never considered what to do about something like this. And, you know, all of the money that I had worked for over the course of my career, what was going to happen in the market and so on and so forth. And, and, and I'm up on a commercial. I'm going to have to cut you off. I apologize. Lecrae, hip hop artist on a commercial. I'm going to have to cut you off. I apologize. Lecrae, hip-hop artist. The book is I Am Restored, How I Lost My Religion But Found My Faith.

Honored to spend time with you, brother. Thanks for hanging out. This is theill Ramsey personality is my co-host today here on the air open phones at 888-825-5225 Hope is in Grand Junction Colorado hi Hope how are you hi Dave I'm good how are you great how can Anthony I help well first I just want to say thank you thanks to you guys my husband and i have paid off 40 000 in debt and cash flow to ivf cool yeah and that leads me to my question because now we're expecting identical twins yay it worked yes touchdown yes Yes. Touchdown! Yes. Very exciting. So for the last, like, five or six months, we've been living just on my husband's income just to make sure that we could survive on that because this is a high-risk pregnancy.

Sure. And I have been out of work for the last month or so. Sure. And we can survive on his base pay, but it's tight, and it makes our mortgage 50% of our income. Mm-hmm. So I'm a planner and looking to go back to work after the babies come. I'm a nurse, so I can work pretty flexible hours. Mm-hmm.

And I was looking at what it would take to make our mortgage the 25% of our income just so that, you know, I would like to work when they're little enough to keep us financially successful, but also work few enough hours to spend enough time with them while they're little. Amen. Yeah, so that would be, I would need to make like $2,300 a month to make our, and that would be net, to make our mortgage a quarter of our income. But then daycare is $1,800 a month. So I'm just curious what your thoughts are on that, because it kind of seems like two steps forward, one step back, when the $2,300 would be what we would need to make, but then

$1,800 would come right out of that. What's your husband's career path look like? What's his income tracking? Possible sizable increases? Going up at what kind of rate um i don't know about i don't know about sizable increases he's a wildland firefighter so he makes a lot more in the summer and then it obviously slows down in the winter um his income has increased every year but not by huge amounts yeah so the truth is if you want to stay home, you're probably in a different house, aren't you? Yeah. And I don't, like, necessarily want to stay home.

I guess I'm just wondering. Yeah, you do. You said you did. Yeah. Well, I want to stay home enough. Like, I don't want to be at work all the time, so I guess I want to work part-time. Yeah.

But you're telling me you can't afford to do that. I guess not in-time. Yeah. But you're telling me you can't afford to do that. I guess not in our house. Yeah. That's what you're saying. So, you know, basically it's okay to make a choice to move down and house to be a stay-at-home mom. Yeah. Yeah. That's kind of a cool choice, actually.

It's a real cool choice. Yeah. Or we can look at what can you do from home to generate that income as far as in the side hustle. Are there any hobbies that you want to turn into a side business? Or anything from nursing that you can do from home. Yeah. Yeah, I've definitely started looking into what I could do more from home in the nursing field. Yeah. And let's cut the, you know, because if you could generate the, even if it's not

$2,300, if you generated $1,500 and no daycare bill, ding, ding, I think we got a winner, right? Yep. Sure. Yeah. You don't have to get it all the way to 25% as long as your trajectory is up. The point of the 25% is just don't be house poor and 50% is just not sustainable. It's not. Yeah. Something's going to come along and knock you and 50% is just not sustainable. It's not. Yeah. Something's going to come along and knock you off your stool if you do that.

Hope, did I miss this? Do y'all have any other debt outside of your mortgage? So we are, we went into stork mode and we've saved up 30,000. So our only debt left is 17. So once these babies are here and I go back to work, we'll just pay that off right away. $1,700 or $17,000? $17,000. I leave $13,000.

So you've got a bit of an emergency fund after that. Yeah, you'll be in good shape. So all of that's fine, but that still is not going to cover. It's just not sustainable to stay at 50%. So we've got to do something. And it doesn't sound like going back to work in the traditional model with the daycare is profitable enough to mess with. Yeah. And so you're going to have to do a nontraditional model or look at a move down, one of the two, in order to accomplish your goals.

And by the way, we completely affirm this goal. Yeah. I mean, you guys have been wanting babies so long, and you've gone through IVF. And this is, I mean, it's more important than a house. It is. It just is. I agree. You know, it's okay.

There's nothing wrong with that. Yeah. And you have a different version of keeping up with the Joneses here. Austin is with us in Las Vegas, Nevada. Hey, Austin, what's up? Hey, how are you guys doing? Great, man. How can we help?

Hi. So, uh, I'm 23 years old. Um, I've been working for my father for the last three years, making 15 an hour. And, um, I'm finally moving into the career field that I want to go into. And I start, um, in two weeks. Um, I'm going to be making double what I make now. So I'll be making a $30 an hour. Um, but my question is my, uh, my father says that I need to open up, um, a credit card account and build credit, um, in order to get better, I think interest rates on how, when I, when I go to buy a house and, um, I, I don't have any credit at all. And I've been listening to you for a little over a year now, and I know that's not the right thing to do.

But I just wanted to know why not to do that. And, yeah, that's my question. Well, Austin, you know why. At 23 years old, you don't need any debt, and you don't want any debt. Let me put it like that. Second, you don't need a credit score to pretty much a debt score to get a good interest rate on your mortgage. Okay? I don't have a credit score.

I didn't have a credit score, and I was able to get a solid interest rate on my mortgage that I have for my house. Just the other day. Just the other day, like two weeks ago. and I was able to get a solid interest rate on my mortgage that I have for my house. Just the other day. Just the other day, like two weeks ago. And so here's what you need, though. So, boy, stop a second, okay? The point is, no disrespect, but your dad's just wrong. Yeah. He loves you, but he's wrong.

His supposition is that you need to get a credit card to get a lower interest rate. Anthony just told you he just did it with zero credit score so apparently your dad's information is inaccurate yes that changes the equation doesn't it yes sir yeah man and it feels good to have a mortgage payment with no other debt let me just be real with you and so also i would definitely say just, um, just tell your father, Hey dad, thank you so much for your thoughts. Um, I am respectfully, um, going to respectfully disagree with you and follow the plan that I believe is best for me in my life. But dad, I love you. And dad, I appreciate you. Yeah. You can be honoring to him, but you know, one of the things about growing up is you discover that your parents don't know everything.

Right. And some of the stuff they know is wrong. Yeah. And it's just wrong. That's it. That's the only thing you can call it. It's just wrong. Rebecca's in Reno.

Hi, Rebecca. Welcome to the Dave Ramsey Show. Hello. Hi. What's up? So my question is, my husband and I are in steps four, five, and six, and he's looking at changing his career path to doing financial advising where currently he makes about 55% of our income,

so we would be cutting that in half. Wait a minute, wait a minute. What's he make now? He makes about $65,000. And he's going to make less than that in financial advising? Well, we're not sure what he's going to make. So if you're not going to make $65,000 in financial advising, you shouldn't do it. Right. Okay, so I just guess I'm trying to plan for worst case scenario if he's absolutely horrible at it and well he's not going to get to keep doing it if he's absolutely horrible at it okay a financial advisor who makes thirty thousand dollars a year ain't worth spit you don't want

to work with him right okay so he's failed he's going to go back to a different career because he sucks okay that's not going to happen he's's going to be okay. You're going to make $65,000. I don't think you can plan for $35,000 as an option. It's going to be zero, change careers back, or $65,000 plus. Should be anyway. This is the Dave Ramsey Show. Anthony O'Neill Ramsey, personality, number one bestselling author of the book Debt-Free Degree is my co-host today.

Open phones at 888-825-5225. Tim is in Toronto. Hey, Tim, how are you? I'm good. Thanks, guys, for taking my call. Sure. What's up? I am currently, my mortgage has just taken up too much of my income, and we're somewhat house poor. We've done well on the house and the investment,

but I'm just looking towards the future. And I'm wondering if I should take the equity I have in the home and change the lifestyle and put that in the bank for investing, for long-term rules, or if I should look at a multifamily home to increase our yearly income. And I'm looking for your advice on that. So by taking the equity, you mean sell the house? Yes. Okay. Sell the house and then go buy rental property? Yeah. Well, multifamily, live in part of it, rent part of it.

Yeah, that's right, yeah. Or put the money in an investment, one of the two. Okay, so why can you not afford the house? The cost of living is high up here, and I don't have another way of earning more income. What is your income? Pardon income. What is your income? Pardon me? What's your income? The household is about $105,000.

That includes current rental income from a basement apartment, my salary, and the government gives us a baby loss. Okay. And so why can't you make it on $105,000? Just the cost of living. How much is the mortgage payment? Mortgage payment is only $1,400 a month. But my wife's at home with, and she's homeschooling our four boys.

Something wrong with your numbers, brother. How much other debt have you got i have we just renovated the basement last year so the total is a hundred thousand dollars for the invent for the reno and and uh 250 on the mortgage so i'm in for 350 right now that's all you don't have a car payment? You don't have a student loan? No, they're all paid off. Okay. Yeah. So your renovation loan, which, by the way, is on the same piece of real estate, it's

not a separate investment, is how much is it? I mean, what's the payment on it? It's about $900 a month. Okay, so that puts you at $2,300 with a $105,000 income. It's still doable. Yeah. I still don't know where you're straying. I don't think you're doing a budget.

I don't think you have a written plan. When we bought, 10 years ago, I was following your plan, and we fell away from it because the house prices were a big percentage of the income. You keep talking about the standard of living or the cost of living and house prices, and yet your house payment is not a problem in the numbers you're giving us. Because, I mean, net you should bring home about $7,000 to $8,000. And so you're looking at... Our net is $6,600. But still, even with that, a $1,400 mortgage payment is not difficult, Tim. Yeah, that's doable. Well, you got another $900 on top of that. You may need to refinance the second into a new first and get a lower payment overall

to hold on. But no, you should not sell the house because of the numbers anyway. If you want to sell it for another reason, that's fine. And no, you definitely should not sell the house and buy a rental. I think you have a rental kick. You put one in the basement, now you want to buy a multifamily, and you need to stay away from that crap. You're broke right now. You're trying to get this thing lined up.

But the numbers you're giving us, I don't think you're doing a written budget. You've got to have to plan the money out because they're not that far off. Now, again, Now, again, the 900 plus the 1400 puts you at 2300 out of 6600. So that's a third. You're at 33%. That's higher than we would like, but even that is doable. Yes. If you're on a plan and you guys, you know, quit spending the rest of your money on other stuff. I don't know where your money's going, but you don't either. Right. And so you're going to have to write it out. The written budget makes you feel like you got a race. Absolutely. And that's one thing I really want to tell them. And when it comes down to a written budget, Tim, I really want you to check out every dollar. And I think for you, here's a practical tip

is I want you to write down all of your income and there must be some other expenses in there. You just not telling Dave and I, because I, I hear the stress in your voice. I'm trying to figure out where is that coming from? So there's something else that you just, you don't know. So I want you to write down all of your expenses and it should total up to zero. If you're in the negative, then yeah, give us a call back and we can walk you through those numbers. But I think you need to know exactly what all is going out because I think that's the

main thing. You're talking about your income, but you're missing something that's going out. Well, there's four boys in there. There's something going on with that. There's mouths to feed. But still, it's still doable. Lots of people do it on less. And so that's the thing.

And I think you're going to have to, the first thing you've got to do is get the operations of the current situation under control before you start talking about changing the situation yeah the situation is not the problem yeah it's the fact you're not operating where you are well first let's start there yeah andrew is with us in los angeles hi andrew welcome to the dave ramsey show all right thank you for taking my call dave how are you better than i deserve what's up well just a little background newly married in august congrats a wonderful beautiful wife you know and um our question is um we are planning to get pregnant within the next month or so but we also want to buy our house by june of next year nope uh we're in uh babysit 3b and we have about 225 000 up so far. We want to know how much we put aside for the baby and just really cash flow to get our dream home,

which is probably around $650,000. You have $225,000 saved, cash? Yeah, my wife was an awesome Dave Ramsey person, and she had a house that she sold about a month after we got married and probably made about $260,000 off of it. Okay. And very good. That's awesome.

Well, good. So you're going to buy a house with the money from her old house. That's not a problem. Correct. The baby shouldn't – do you have health insurance? We both do, yeah. So what's the baby going to cost? Nothing. We don't know. Well, yeah, you do. I. So what's the baby going to cost? Nothing.

We don't know. Well, yeah, you do. I mean, it's your deductible. I hear people say, you know, save up money or not. Why? I want to know, you know, just make sure there's money. Now, listen, dude, what's your household income? About $175.

Gee, man. Okay, so diapers and formula fit in your budget. You don't have to save up money. Absolutely. Now, here's the thing, though, Andrew. You're not paying cash for 225 in Los Angeles, California. No, he said he was going to put it down on 600. Okay, okay, okay.

Right? Know what you said? Yeah, correct. Okay, okay. So you got a down payment on 600. You don't need $50,000 to have a baby. No. Okay?

You need enough to cover the portion of the medical bills for labor and delivery that the insurance doesn't cover and you need an emergency fund anyway right but other than that the rest of this money is your down payment and that's cool all right so we're not reaching too far trying to go for like 650 700 maybe not making 175 with 225 down no that's only Maybe. Not making $175,000 with $225,000 down. No. That's only a $400,000 mortgage. That's very doable. 15-year fixed rate. Correct.

No variable, no 30. But it'll be less than a fourth of your take-home pay. You're making really good money. Yeah. Very, very cool. That's interesting how a lot of people today feel as if they need a lot of money when they have babies. I get nervous every time I hear that. Like, you need that much money to have a baby? Well, in all the baby magazines, there's these stupid articles that a baby costs $462,000

to raise a child from infancy to 18. No, it doesn't. You're already buying the electricity. You're already paying the mortgage. Putting an infant in the same room with the electricity and under the same roof does not cost more right they don't eat that much for god's sakes you can't get them to eat half the time so um you know it's like that what what there's some clothing yes you know there's a little bit of stuff here there if you're going

to spend like a bazillion dollars on their sports or on their uh school or something you can spend a lot of money but it really they're participating as a part of a family and the family has economies of scale yeah so yeah early you got some pediatrician bills the first year it's federal law you pay the pediatrician sports payment every month okay that's that's first year baby but after that i mean and some formula or whatever and some diapers but it's really not like oh god we're going to go broke we make $175,000 a year one kid you're not even going to notice

man I was about to say I'm not having any kids you need to get married before we talk about this this is the Dave Ramsey show This is The Dave Ramsey Show. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes.

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