The Ramsey Show - App - Do These 3 Things To Set Yourself Up For Retirement (Hour 3)

Episode Date: February 5, 2024

Девочка-пай Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw this hour. The number to call is 888-825-5225. Don't wear it out. You call in and we'll talk about your life and your money. Elizabeth kicks us off in Atlanta, Georgia. Elizabeth, how can we help today?

Hey, thank you guys so much for answering. Absolutely. Well, Austin answered. He just then patched you through to us. So you can thank Austin for that. He's a good man. Thank you, Austin. And thank you for having me on. So I'm currently a college student, and I am getting all of my college paid for by a family member right now,

and I'm renting, again, through that family member. And I'm in school for interior design, and I do want to get into real estate after I graduate. So I'm trying to think of a way that I can get set in the right foot after I graduate, per se. So I would like to propose the idea of buying a house to this family member and then possibly buying it from them after I graduate. Oh. And I just want to know if that's a good idea. Hold on.

They buy it for you? They buy it. I live in it until I graduate. And then once I start making a steady income, buy it from them. That is a tall order, Elizabeth. It is. It is. It is.

But with the rent I am paying right now, buying a house would be cheaper in the long run but you're not buying a house hold on i'm sorry i i don't mean any harm so you said it's the same family member so the same family member that is allowing like paying your rent now and paying your way to college you mean to tell me you're going to go to them and say, hey, why don't you also buy a house for me to live in? And then the assumption is that you'll buy it from them because you just get to decide when they're going to sell their house and who they're going to sell it to.

Well, this, I mean, this is the proposal. I, I, no. Why not just you get yourself in a position to buy a house? Why do they have to be involved? Because straight out of college, I won't, I don't have. But you don't have to be able to buy a house straight out of college. That's how it should be. I'm just trying to set myself up in the right way. Yes, but you're not the one setting yourself up. You're trying to have, you're trying to have somebody else prop you up. what what does well for us as adults is when we form and craft our way through life financially listen I'm so happy that somebody's going to college debt free right that's great but once

you graduate listen buying a house is not just kind of like a willy-nilly thing hey why don't you buy this house for me I'll live in it and then when I'm good and ready you can sell it to me that's um I don't think you understand kind of how how much you're inserting yourself into that person's life and deciding the timeline on their financial investment I and I get that you don't realize that but what George and I are trying to get at is you you don't have, we all have this checklist in our mind of, I go to school, I get my degree, I get my big girl job, I get my car, I get my house, I get married, I have my kid. And it's like, we're trying to check these things off the list to tell ourselves that that's what makes us successful. And it doesn't have to go that quickly. The fact

that you're in school without student loans, that is a major win. The fact that you are going to graduate without student loans, major win. And the fact that you are going to get a job in your field, that's thing one. And then you're going to be able to sustain rent and understand what it just feels like to have that responsibility because I don't mean any harm, but you haven't had to assume any financial responsibility yet. So this idea that you're just with what I have, I did. I did live by myself for two years with no financial stability from anybody else. And then once I decided to go to school, then I was given the opportunity to have my life paid for. But I did. I did rent a place by myself, 100 percent on my own. OK, that's good. I'm glad you did that.

I think that you should do that again when you come out now with this. This is the job I want. I'm in the did that I think that you should do that again when you come out now with this this is the job I want I'm in the career field I want pick a place in town where you want to live there is a big part to that having the three to six months saved up and just walking through this and being you Elizabeth and standing on your own two feet in no world would I think would I say that it's a good idea to say um who is the family member, by the way? It's a grandparent. No way would I say grandma, grandpa, will you buy a house worth X amount of dollars and me be the renter paying full rent? And because here's the thing, I'm just assuming, are you renting at cost or are they charging you a real rent where they're able to make some money on this investment? That's something I would have to talk about with the grandparents.

That's a big deal. So for you to even make the assumption, listen, I'll just rent at cost. You won't make any money on the renter, you know, and whatever it appreciates, whenever I'm ready, I'll buy it because they might be ready they might want to hold the property longer like what if that's the case that they're like listen this the market's not great right now we understand that you want to buy it but it's not great for us there's so many factors and volatilities there that have the ability to make you know the relationship not the best that it can be yeah how many more years do you have until you graduate i'm supposed to graduate within do you have until you graduate? I'm supposed to graduate within two years.

Okay. So you graduate with an interior design degree. You said you wanted to go into real estate, as in be a real estate agent? No, just I want to own property. Okay. So you just want to be a homeowner? That, but I also want to be able to own other properties.

Like lots of properties. Okay. You want to go full monopoly here. All right. And is the goal to be working full-time in interior design? Yes. And so you'd start off working for an interior designer, I imagine, and then work your way up to maybe starting your own interior design company one day?

That is the hope. What's starting salary? Like when you come out of college, what does an interior designer in your area earn? It really just depends. I don't plan on staying in the area, but it can start anywhere from 50K a year to maybe 80. Okay, 50 to 80. So let's say 65. So you come out, you're making 65. You've got no debt. Tell me more about your personal financial situation. About my financial situation? Yeah.

I have a paid off car. I have $2,000 of my own separate money. I've been doing commissions, like little side hustles and saving that on my own. So I've got $2,000 saved up of my own personal money and it's working its way up right now. And what's your rent right now? Do you pay rent? My rent right now, my grandparent does. It's $2,500 a month. Well, you just said the mortgage is cheaper than rent. If I was to get a house that was, or this is all very hypothetical, but if there was to be a house that was bought... Then that is assuming that you're paying it at cost, that you're not going to...

That's my worry is there's a lot of assumptions here. And one is that renting is just, I might as well get a mortgage. $2,000 in rent, $2,000 in mortgage. It doesn't work like that because there's property taxes, there's insurance, there's maintenance, there's all the surprise repairs. And you have $2,000 to your name. I'd be scared out of my mind if I had two grand and I was a homeowner. Well, she's going to live in the parents' house until she's ready. She's going to ask the grandparents to buy the house.

I would work your tail off, get a down payment, and work on just continuing to stack up cash. And when you're ready to be a homeowner, you'll be a homeowner. But I would not try to leapfrog this and shortcut your way there and ruin relationships over it. Your grandma has done enough. This is such a blessing, and I would let that be your setup for your future. And grandma, if you're listening, don't do this

deal. Because you might be listening to granny and grandpappy. Don't do this deal. It's not a good deal. This is The Ramsey Show. grandpappy don't do this deal it's not a good deal this is the ramsey show welcome back to the ramsey show i'm george camel joined by jade warshaw open phones at 888-825-5225 you call us we'll talk about your life and your money uh jay we were talking during the break and i thought this might be good content to talk about on the show.

What's that? I got an email from the social security department with my like yearly statement. Okay. So I thought, all right, I'm a young buck, but I'll open this up. Let me see what's inside this bad boy. And it was pretty interesting to see how much money the government thinks I will be given when I'm the ripe age of 62 or 70. And I wanted to break this down

because we get this question frequently on the show. People are asking, hey, when should I take Social Security? Will it even be there for me? Note on that part, there's actually a spot in the document where they know that people are concerned about this. So like, hey, we want to give you confidence in your future and retirement. So click this PDF to show how we'll be there for you well here was the the rousing uh confidence booster we know that um at least until 2034 the money will be there

yeah and i was like okay 2034 that's that's 10 years from now. So 10 years from now, they're not going to have 100% of the funding to keep Social Security going. No, not at all, and we know this. And they encourage me by saying, hey, listen, even if nothing changes, we'll still be able to pay 80% of each benefit due. Because that's fair. Because I paid into this thing for my whole life

for them to then discount it. But keep in mind that the benefit was only at a portion of your... Exactly. So they're giving you 80% of what was only a 40% benefit to begin with. So we're at 2.83 trillion in the trust funds as it stands today. And so that's why I encourage people, especially the younger generations, do not rely on this. This is icing on the cake. And I talked about this in my new book, Breaking Free from Broke Jade. Can I tell you what I wrote? Hit me. Research from the Fed reveals 26% of non-retired Americans have $0 in any kind of retirement account. That's one in four non-retired people. This is not great. And in research from

Ramsey Solutions, 48% have less than 10 grand saved in retirement. So that's going to get you about what? Three months into retirement if you're lucky. That's... So then people are going, well, Jade, at least I'll have social security. Well, we just showed you how that's not going to be enough to get by. Here's the real numbers. The average monthly benefit in 2023 from social security was around $1,700 a month. Try living on that and you'll see why we call it social insecurity. That's approaching the poverty line. That's $1,700 a month. And by the way, that's the average, Jade. Some people get less than $900 a month. Wow. And here's the last stat. 52% of workers have never

stopped to calculate how much money they'll even need in retirement. Half of them are just yoloing and fingers crossed, head in the sand yet again let someone else worry about it yet again assuming that the government will be there to handle them financially listen i i will tell anybody who will listen you need if you want to be thriving you want to be thriving during retirement years not just surviving and scratching by and and then there's the scam i'm gonna just call it a scam george where it's like okay if i take social security early at 62 i'm only gonna get it this much so i'm gonna wait till i'm fully aged you know where i can get the full benefit but if you

wait even longer you get more money this is what we need to talk about yes and this we do need to talk about it because i did the math for you i just talked with the with the, I think it was CNBC I was talking to them. And I was saying, listen, if you don't have to, like if you're going to work beyond 62, start taking social security. You know your boy's going to take that money out the day it's available at 62. Yes, and invest it. George, give them the math. Okay.

I crunched the numbers for you because, you know, I'm a nerd and I needed the numbers. So at age 62, if I took out my benefit and I started getting that every month and I invested that whole portion, let's just say into a taxable brokerage account, not even in retirement account. And let's assume 10% rate of return. Okay. From age 62 to age 80, starting from $0 in this account, I would have $1.45 million. Oh, wow. Just from extra money that I took immediately when I could take it right yes now if i wait till 70 of course people go well george you're gonna have you know a lot more money coming in from social security every month right yeah but i also lost out on eight years of compound growth

so even investing the larger amount for 10 years from age 70 to age 80 at age 80 i now have 921 thousand dollars in that account listen so that's a difference get this because i took social security as soon as i could and invested it instead of waiting till 70 it's a difference of over half a million dollars guys to my net worth and to what i can pass on to my grandchildren what i want to say because george you laid that out perfectly but i know there's still people who feel this weird sense of fear about even considering that as an option it's like well the government's giving me that money it's for my retirement i'm like number one the government's not giving you anything that was your money that you paid in and you're only getting a portion of it back let's be

clear about that the government doesn't gift anything it's just redistributing all of our money yeah you're getting back your money you gave it to them and they invested it poorly at like a 2.2 return and now that's part of the reason here that we're not having enough to fund everything they're giving your money back to you so you can take it and do whatever you want with it and what george is suggesting and what i'm suggesting is invested invested in something that gets better than a 2.2 return return because at the end of the day, they were only going to provide 40%

of the lifestyle you've been used to living. You can't rely on this. And after 2034, that 40% goes down 80%. That's crazy. That's critical. This is why it's called

social insecurity. Get this camera on me right now. Here's the deal, America. fund yourself i said it live on the ramsey show do not rely on the government to take care of you with this terrible plan especially those that are younger because it may not even be around and if it is it's going to be pennies compared to what your parents got and their pensions and all these wonderful ways they were able to just not save for retirement but it's going to be on us j Jade. And that's why we tell people, invest early. That's right. Get out of debt. Get the emergency fund. Get to investing. Compound

interest is your best friend. And if you just do the simple thing, be the tortoise inside of the hare. That's right. Avoid the crypto. And well, my buddy said I need to get an annuity and a whole life insurance policy. And I saw this rapper on hisiktok video said this is what the wealthy do just invest in your 401k i promise it's not a scam 80 of the millionaires we studied uh said the 401k was the number one vehicle yeah your retirement employer plan it is so boring and yet it works when you just invest in over time mutual funds over time the s&p 500 the overall stock market has returned 10 to 12 percent since its inception. That's the yeah, it's almost like you boil it down to just these. If you can, in the course of your lifespan, you know, we strike out when we're 18, 20 and most of us are going to work until we're 65, God willing, maybe even 70 if you want to.

But if you can do three things, if you can just pay off your debt and live a debt-free lifestyle, if you can, and so that you're entering retirement without consumer debt, then if you can do one better and invest monthly, regularly when the time comes, so you've made it a habit of investing. And if you can enter in retirement

without a home mortgage, like three goals you have in life. If you can do that, you are golden. And when you do that, George, you don't need as much of a nest egg. If you can enter into retirement without consumer debt and without mortgage debt, suddenly this need to have all this giant money, you're like, okay, I've eliminated

so much of the payment, so much of what's needed that you needed before that you don't need to have this. When you decrease your risk, you increase your peace. That's right. It's that simple. And so when you do that, and luckily for my wife and I, we decided to do that early. We thought, what would it be like in our thirties to have no mortgage payment, to be investing for a future, now bringing our daughter into this world. Yeah. It's just a different way to live. We're not as worried about inflation. And what if there's a crash and what if the pandemic, we just get to live our life with peace. That's right. We don't have payments about inflation. And what if there's a crash? And what if the pandemic? We just get to live our life with peace. That's right.

We don't have payments. And that's what I want for everyone out there. And investing consistently. Everyone's arguing about net worth and what your home equity. I'm going, listen, I'm not touching this money. That's fine. We got margin in our day-to-day life until I'm 62 and tap into social security and those investment accounts.

And Lord willing, we won't need much of it. Yeah. What we're saying is a good man leaves an inheritance to his children's children. And you can't do that if Social Security was your only out. That's it. Like you just stopped and said, OK, I'm done making money. I have no assets and Social Security is there. You can't leave anybody to anything.

Do not rely on your kids. We take enough calls in the show where relationships are destroyed because parents are relying on the kids. The kids are relying on the parents. They didn't communicate. They didn't invest for retirement. And they're calling us at 65 going, we have nothing saved. What do we do? Get a time machine. I mean, there's not a lot you can do. You can get out of debt. But folks can break the cycle today. There are people who can start breaking that cycle today. Be one of those people. Wealth gained hastily will dwindle, but whoever gathers little by little will increase it. Be the tortoise. Be a crockpot in a world full of microwaves, my friends.

This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. And in the lobby on the debt-free stage, we've got Tony and Hypatia. How are you guys doing? Doing great. Well, I can tell by your Ramsey swag t-shirts, live like no one else, debt-free. You're here to do a debt-free scream.

That is correct. Where are you guys from? Hammond, Indiana. Wonderful. And how much debt did you pay off? $301,000. Wow. And not a penny less. Okay. And how long did that take?

Four years and seven months. Nice. Wow. And what was the range of income during that time? We started at $60,000 and ended at $123,000. Let's go. I like that. What do you guys do for a living? I'm a flight attendant and a recent FCMT graduate. Financial coach graduate. Nice. Went through our financial coach training.

Yes. That's cool. Yes. Yes. And I'm an assistant principal. Wonderful. Okay. So let's talk about this $301,000. What kind of debt was this? Oh, it was student loans.

Primarily, primarily student loans. Wow. Who was it? I was the smart one. She's like, I have no problem pointing at you for this. I have a semester of high quality college education education so it's all his master's degrees so a lot of education what else was in the mix 401k loans two phones uh two iphones two cars credit cards all of that wow just the normal typical american lifestyle yeah yes yes so

just a little potpourri of debt if you will yeah and it kind of started when um we actually had our um second oldest son uh when my wife had him then we ended up um i ended up getting a torn achilles a month after she had him so we were both off work for um and i was off for at least six months wow and. And then my wife couldn't go back to work because at that time, she was taking care of two babies, unfortunately, me and my son. Who was the bigger baby? I would say he was. Okay, thank goodness. Oh, okay, okay.

Wow. Okay, so four years, seven months ago, I mean, something took a turn. What happened? I was sitting on the couch, just tired, and the Holy Spirit tapped on my shoulder and said, you have a book that can change this. And as a flight attendant, I used to go in the front and sit with the pilots because they had a lot of money. So I used to ask them a lot of questions. And one of them told me to get Total Money Makeover. And I got it in my early 20s, but I didn't need it at the time.

But it said in my library all that time. So I went to where our books were and I looked and I found the book. And I read it in a day and gave it to him. And he read it and that's what started wow so tony she comes to you with this book she just read in a day she's looking like crazy eyed over this plan i'm guessing and what was your response were you like okay honey sounds good so initially yes i said okay honey it sounds good with no intentions of reading it like like she did um but once I picked it up and actually looked through it and started it's such an easy read that's right and it just and it was just so

understandable and relatable and then just looking listening to the other testimonials it I ended up reading it within uh not not one day maybe two days. But yeah, I definitely got on board right away. Wow. So, Hypeisha, when you started talking about it, there's clearly emotion there. Is the emotion, oh my gosh, this book changed our life. Is the emotion, I wish I had started sooner. Tell me about what you're feeling in that moment. I felt like God asked me to do something important for my family.

And there was a lot of death happening. My mom and my grandma and seven people died on my mother's side of the family. Oh, my goodness. Gosh. And I felt like before I died, I wanted to do something special for my family. Well, at that point, you're like, life is short. What are we doing? We've got to get on this thing yeah i was unsure about what um what i was gonna leave what legacy i would leave behind and

so um this was something you could control you can control this yes you guys changed your family tree in four years and seven months three hundred one thousand paid off what was the hardest part of this journey because that's not a short amount of time to sacrifice. I would say cooking. Cooking every day. Listen. That's a word. Our budget in the beginning was $50 to eat out.

So we went to Golden Corral during lunch hours because we couldn't afford the dinner prices and once a month. And just the people that i thought would be here to see it they um passed on before um it happened and um that adversity just really made us stronger spiritually and stronger marriage yeah oh i bet most definitely now i just wanted to add to that i think that um neither one of us coming from a family tree that had a lot of money and not so much just the money aspect, but the knowledge of it. That's right. And so that was the key takeaway just from for me or us as a as a as a unit, just wanting to get the knowledge so we could prepare our children to have you know to have a brighter financial future as well absolutely what a crew and I'm sure they I mean they're old

enough they saw mom and dad they're gonna remember this journey oh most definitely the goodwill runs we were in thrift stores like crazy I mean there was a lot of sacrifice but it it was worth it it was well worth it and I do want to add this we paid off all of the debt the cars we sold cars we bought $2,000 cars $3,000 cars during the journey and then we just had two student loans left we paid off one student loan for 13 000 and we had a 45 000 student loan and then 123 000 left and i was watching anthony o'neill and it said if you have student loans do this before october 31st and i did it and um we went from 44 qualified payments for student loan forgiveness to 125. So that whole, all of those, it got forgiven, all of that. And so God not only gave us something to do, but he helped us get there.

Oh, man. You guys were faithful every step of the way. He gave us a quantum leap. That's amazing. This is exciting. Who were your cheerleaders? Each other. Most definitely each other.

Our Anthem Church, our children. Yes. And God. Yes. That'll do. You know what? And then we had, I do want to shout out Damian Harmon, the Harmon family. So they did, they knew about our journey as well.

Pete McAdams, a close buddy of mine. They both live here about our journey as well um pete mcadams a close buddy of mine they both live here actually in tennessee as well so those people i know we spoke to a lot about it who was right there with us from the very beginning and just told us to kept pressing keep pressing yeah and um it just um it felt good it feels good it. It definitely feels good. I bet it does. So what's next? You're debt free. How are you celebrating? So we haven't, oh, we're having a,

a debt free party. Hey, we're going to have a debt free party. We're still working out the particulars on when exactly. Cause it's still, it's such a surreal moment. Just being able to do something that we've never seen done yeah but then also do it for our children to let them know that their death destiny uh affirmation starts

here with this moment and this will be in the new chapter in their life in our lives as a family get the kids up here what are the names and ages okay we have talent 13 We have Anahi, and today is her birthday. She turned 12. Woo! Happy birthday! Get up on stage, y'all. Happy birthday! We have Valerie.

He's 9. And then Ali, she's 6. Beautiful. Oh, my goodness. Well, they get to scream with you. They were a part of this process, and they're celebrating mom and dad's freedom, because that's freedom for them, too. That's changing the family tree.

Let's do this thing. Y'all ready? We're ready. All right, we got a living gift box for you, including Baby Steps Millionaires, Total Money Makeover, and Financial Peace University. So use it or pass it on to someone else to kickstart their journey you guys are an inspiration all right we got tony hypatia the whole gang three hundred and one thousand dollars in four years seven months making 60 all the way to 123 count it down let's hear a debt-free scream. 3, 2,

1, we're debt-free! Now that's a scream, George. With the matching Better Than I Deserve t-shirts and the Live Like No One Else t-shirts. Wow. That generational curse is being broken. Listen, you heard it in their voices. That was a debt-free scream if I ever heard one. My goodness. That'll put a pep in my step. I got

some shivers on my spine. This is The Ramsey Show. Our scripture of the day, Psalm 37, 23, and 24. The Lord makes firm the steps of the one who delights in him. Though he may stumble, he will not fall, for the Lord upholds him with his hand. In other news, Slash from Guns N' Roses once said, No one expects the rug to be yanked out from underneath them. Life-changing events usually don't announce themselves. Who knew? That's the kind of wildly varying entertainment you get on this show.

From Proverbs and Psalm to Slash. There we go. Well, Jade, I don't know if you've been keeping up with the news. The Grammys just happened. The big game is coming up this weekend. Everyone's talking about Taylor Swift instead of the big game. Yes. But the big news is right here on The Ramsey Show.

You ready for this? Tell me more. We just launched a new Ramsey-trusted national partner that can help you find the right health insurance. Really? I know.

Not the news you were expecting. I didn't know. Tell me more. Well, we all know health insurance, it's not the most exciting or fun thing on people's list. But you know what it is fun? Having the right health insurance

when you need it. Facts. I mean, the amount of people going bankrupt in medical bills is frightening. And so, you know what it is fun? Having the right health insurance when you need it. Facts. I mean, the amount of people going bankrupt in medical bills is frightening. And so, you know, to get a load off your mind, protection for your hard-earned money, not panicking at the first sight of the medical bill, that's my idea of fun, at least partially. And it's why we are so excited to have a new partner called Health Trust Financial. And this isn't really new, because here's why.

Our team has worked with Health Trust Financial folks And this isn't really new because here's why. Our team has worked with Health Trust Financial folks a lot over the years, and a bunch of their independent agents have actually been serving Ramsey fans for more than two decades now. First, they were part of our endorsed local providers program, then as Ramsey Trusted Pros. And while a lot of health insurance companies out there care more about premiums than people, Health Trust Financial cares about educating you, saving you money, and shopping different providers to find you the health insurance you need. And they've done such a great job working with our fans that our team decided to expand this relationship and make Health Trust Financial the only health insurance company we recommend here

at Ramsey. That's high praise. Listen, that's big. You got to do right by people for a long time and treat them well and treat our fans well because trust is all we have here at Ramsey. That's what we're all about. So the fact that you guys have a new company out there you can reach out to for all of your health insurance needs, Health Trust Financial, that's huge.

They know their stuff and they want to help you protect your wallet from unexpected medical costs. So if you need help figuring out the best health insurance for you and your family, be sure to check them out at healthtrustfinancial.com. Very cool. Very cool partnership. All right, let's go to the phones. Chris is up next in Myrtle Beach, South Carolina. Chris, welcome to the show. Hey, how are you guys doing? Doing well. How can we help today?

My wife loves your nails, Jade, by the way, the color of your nails. Thank you. It's always Jade and never George. What's wrong with my nails, Chris? I love them. Thank you. And your watch. Thank you. Appreciate that. How can we help? So we're looking to relocate here mid-year, probably June, July. And I've done some math to where I could probably safely get us out of debt with the equity within our home and be debt free when we move. But my wife is a little skittish.

She wants to be able to buy right away when we relocate. Where are you relocating to? Pennsylvania. Okay. Is this for work? Just better lifestyle overall. The tourist town really isn't for us. We're touristy income, so to speak. Seasonal positions, that kind of thing, it's tough to get. What's in Pennsylvania? What drove you guys there? That's where I'm

originally from. We moved down here, my parents, before I became of age and didn't have a choice. Moved here. I met my wife. We've got a family here. But we've been back there to visit over the years. She likes it. Obviously, I liked it when I was up there. I would have stayed, but I didn't have a choice at that time.

So is the assumption that if you bought a place, you'd live in the area that you grew up or the area that you know? Correct. Even if we, you know, the way I want to do it with renting, we would rent somewhere within that vicinity. I got to tell you, I would vote for the rent in the vicinity that you think you want to live because, you know. Times have changed out there, I imagine, since you live there.

True that. And so part of this is financial. I mean, how much equity do you guys have in the house? We owe $140,000 and we could sell for roughly $275,000. Okay. So net of fees, you're looking at, what, $110,000 $275,000. Okay. So net of fees, you're looking at, what, $110,000, $120,000? Based on my calculations with transfer taxes and things like that, about $101,000. Okay.

So let's say you walk away with $101,000. How much debt do you have? About $48,000. That's including a vehicle. Okay, so we clear the debt, and that leaves you with $53,000 total to your name? Let's see here. Unless you have money in savings. I don't, so it would be, yeah, what you said.

That's correct. Okay, so let's call that your emergency fund plus a little bit of down payment money. So my idea was from the 101 and the debt, we could take about $26,400 rent on average for the space we would need there as of right now is about $2,200. That's on the higher end. Take that for a year, $2,600, $400, pay that up front. Why pay up front? We could then take that $2,600 that we would pay up front and then we could save that over the entirety of the year to make that our down payment on the home that we would look to purchase within that year. Hold on. The next year. I want to make sure i'm following you are you saying you want to pay your rent

up front for six months and then take for a year correct to who we would pay the lease out in full for the full year as opposed to paying it monthly i wouldn't do that i would just pay monthly and you have the money sitting in savings already. Because what if something happens and you're like, we're renting here, the guy above us smokes pot and we can't get out of this. What if there's a complication?

Are you not concerned that it could be a pain in the butt to get your money back? I hadn't really thought that far into it. I would. I just think there's too much unnecessary risk in that far into it. I would. That's part of the reason why. I just think there's too much unnecessary risk in that and no benefit. So I would just pay the normal payment, $2,200 a month. What's your take-home pay as a family?

As a family, about $950 a week. Wait, so it's only less than $4,000 a month? Yeah, about $33,000. I make $49,000 salary a year. Here's the problem. Your rent is over 50% of your take-home pay. So you guys can't afford to live in this area. Right.

But we would... What's the plan? We would... We would have that savings. We would be able to pull our six-month emergency fund. But draining your savings is not a sustainable option, even for a year, because then you're still not in a position to buy a house. 20 grand down is not going to get you very far in today's market. So I think we need to rethink this whole thing,

and if your income is not going to double in the far in today's market. So I think we need to rethink this whole thing. And if your income is not going to double in the next six months to a year, we need to rethink where we're living and what our situation is. I love the idea of you selling this place to get out of your debt and have some money in the bank, but we're not in a position to go move somewhere where the rent's 2,200 bucks. What about your wife working? How old are the kids? She works full-time in the summertime over the summer months and then part-time inside gigs over the over the wintertime months when it's not as as busy at her job could you guys include that in the 49k did you include that that's correct oh you did i'm sorry no that's just that's just my my salary the. OK, so what what is her set like? What does she bring in regularly?

If you had to average it out, what does she make in a year? In a year, we last year we grossed fifty six nine nine hundred. OK, fifty six thousand. OK, we still need to get this. So she's making six thousand bucks a year gross, is... What I'm getting at is what about her... Because if you tell me, hey, I make $49,000 and then with her money, it's $56,000. I'm like, okay, she made $7,000 in a year gross. That means net y'all didn't bring hardly any in. So what I'm getting at is, is there a way that she can make real steady money to contribute to this?

That's why I asked how old the kids are because I kind of wanted to see what that's like. Real quick. Right, they're all school age kids. 17, 13, and 8. That's the key to crack this code. If you guys are doing what you say you want to do. You need to get a six figure salary in order to afford $2,200 a month. You need a take home pay of about $8,000 or at least.

Yeah, she needs to work and match what you make. Right, but with the relocation, she would be making right around the same amount as me, so that would put us at right around $80 to $90 a year. I'd crunch these numbers hard, Chris, before you make this move. Right now, I have some hesitation that this is the time, but we need to get the income up, and you need to find a cheaper place to rent, and you need to get rid of this debt.

This is The Ramsey Show.