The Ramsey Show - App - Don’t Buy a House if You’re Broke! (Hour 1)

Episode Date: July 26, 2022

Dave Ramsey & George Kamel discuss: A convoluted housing situation, Challenges when trying to sell a house, Helping kids with a house downpayment, Selling a car to pay off debt, Using a grant to buy a house, Paying off debt using a pension.    Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the 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. We help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey Personality, host of The Fine Print on the Ramsey Networks, is my co-host today as we answer your questions about your life and your money. Open phones at 888-825-5225. The call is free and some say the advice is worth exactly what you pay for it. You jump in, we'll talk. We're going to start with Matt this hour. Matt is in Atlanta, Georgia.

Hi, Matt. How are you? Good, Dave. How are you? Better than I deserve, sir. What's up in your world? Not much. I've got a question for you in regards to selling a house.

Me and my wife are in the process of selling that. We have about $250,000 in equity. And we are planning to move to my parents' house for two to five years. Why? They are in the process of buying a house in Florida and not quite ready to sell their main property. So they won't be there while you live there? They will not. But they're letting you live there for free? Correct. And then you're going to buy it later?

Correct. Or somewhere else. We're not quite sure how that will work out. So as part of the deal, they're not making you buy this house eventually? No, we're not. Okay. It's not forced buy. But we want that equity of our house to continue to grow. Right now, my wife and I are still working through Baby Step 2. We have about $30,000 left to pay off. And just trying to decide if we continue to use the equity in our house to pay off our debts

or put that money towards something that can continue to grow for us. Did I hear $35,000 clears it and you got $250,000? Correct. Okay, that's a no-brainer. Do that for us. Did I hear $35,000 clears it and you got $250,000? Correct. Okay, that's a no-brainer. Do that for sure. Then we still park the rest of it for the future house purchase, right? Correct. Okay, I got to go back to the deal because I'm struggling. Okay, I need a little bit of detail here. So mom and dad are moving out of their house and you're going to move into it and live there free for three to five years correct where are mom and dad moving they're moving to florida what are they going to live in

rental are they buying or they're buying a house in florida have actually already bought it why are they not selling you this house now um i i don't quite know i i wouldn't want to buy this house um we're just doing this my wife and i to help them a little bit through the process of uh whether or not they want to move to florida uh for the foreseeable future future or if they want to move back to Georgia and live in their house. How old are you? 30 years old.

A little old to be doing house sitting. Yeah, I agree. This is weird. Especially for five years. I think they need a painter to get off the ladder. If they're going to Florida, they need to sell their house, and you need to go buy a house yeah here's the problem here's the problem with your deal okay it's a nice thing for them and

it sounds good because you're getting to live there for free right right but the problem is that in the next five years houses will have gone up in value and you will have been out of the market that whole time while you house sit for parents who are indecisive right i don't think this is a good deal for you okay i want you to be a homeowner with i mean and you got 250 000 or 215 000 after we paid off your debt so if you don't want to buy this house i would go buy a different house but you sold your house for the sole purpose of doing this deal. Yes, and my wife and I do love the property. Not enough to buy it.

We probably would purchase. I'm sorry, say again? My wife and I, it's a family property. We love the property. If the opportunity arises and we can buy the house for my parents i would i would do so i was just talking to a guy a minute ago who said he didn't want to buy this house where'd he go it's not for it's not for sale right now we're we're i'm not 100 sold on it that we would purchase this house if it was on the market uh it's quite a bit out of our budget

um but you know the property is great. What's the property worth? Probably $1.5 million. Yeah, it is out of your... Well, I don't know. What do you make a year? What's your household income? We make $120. Yeah, it's out of your budget. Okay. What would they sell it to you for? Would it be value? It would. They bought it at an auction, and they got a great deal out of it. If we were to buy it, it would have to be kind of a non-interest, long-term buyout of the home, which I'm not sure I would want to get into. Okay, if you're going to go forward with this deal, here's the only way you don't get burnt.

I still think the deal's squirrely because it sounds so, like, indecisive, and you're getting in the middle of other people's being indecisive, and that's always a bad – that's like playing in the traffic. Okay, so the – but what I do want you to do is i want them to give you a written option to purchase on this property today a right to buy a set price that you makes you smile okay and i want you to record that option at the courthouse as a lien on the title. Do this legally like this was done with strangers. Okay.

Okay? And that's how you do business with family, too, by the way. Not because we think family's going to screw us, but because we half-butt do stuff because we think they're not going to screw us, and then they do. So then you do business right. Okay? But you need to lock in the price at today's values and makes you smile. And if that's a million dollar purchase for a million and a half house, do that. Live there three or four years. At least then you're not, all the other properties around you in life are not going up in value

and you lose all of that appreciation in the next five years while you're a glorified house sitter. Right. So lock in. Can you do that? I could do that. Yeah. Otherwise, you're burnt, man. You're a glorified house sitter. Right. So lock in. Can you do that? I could do that. Yeah. Otherwise, you're burnt, man. You're burnt.

You're losing all the appreciation in the next five years. And then park your money in some mutual funds with a SmartVestor Pro after you pay off your debts and have your emergency fund in place. Yeah. And even then, if he purchases it for a million, he might have to take out a mortgage for $700,000, which may be way beyond. Might be, but it might not be. But if he's got an option for five years or a right to, you know, first right of refusal. If they're living there for free for five years, they can save up like crazy people while their other money grows.

There we go. There we go. Yeah. Now you take $120,000 and you take, what, $2,000, $2,500 a month that was your normal house payment or whatever, and you go bonkers and pile up cash. That's $30,000 a year plus growth, and you do that. That's another $150,000, $200,000 to put on this. That's a lot better.

Now we're starting to get there, yeah. So you get a deal locked in, and you use this time to save like crazy. Then you get there, and you don't even have to do a mortgage with them. I wouldn't do a mortgage with them long term. I don't recommend that, even if it's 0%, but I would get a deeply discounted price from them gladly and lock that in in a formal option today. Don't do this deal if you don't, because you're going to get burnt here, man. This is going to leave you out of the market for five years, and that's not a good place to be. Real estate is not crashing during this five years. It's going up. This is the Ramsey Show.

You've got a lot on your plate. A job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey Trusted Provider. George Campbell Ramsey Personalities, my co-hosthost if you haven't heard the news the sky is not falling

the apocalypse is not here and the housing market is not going to crash I know this isn't what you're hearing from tick tock where all the best economists hang out but oh that was funny but anyway the truth is you have to look at facts. And most of what's happening is simple supply and demand. There was a huge spike in home buying demand in the last couple of years. And there weren't enough houses to keep up. And that's why houses skyrocketed. We still have a housing shortage, a tremendous inventory shortage.

Demand is lower than it was. No question. People have slowed down on the buying, and it's more normalized the market. If you want to know more, watch our real estate reality check live stream that we did. Almost 400,000 people have now viewed this. It was a big hit. It's completely free for you to watch. George Camel, Rachel Cruz, and I discussing the details and the actual data

with actual charts and graphs and stuff it's kind of cool ramsey solutions.com slash reality check and you'll find out what's really happening in the real world not what the news says ramsey solutions.com slash reality check our question of the day comes from blinds.com find out for yourself why blinds.com is the number one online retailer of custom window coverings. Free samples, free shipping, and new promos all the time. Always use the magic word when you go to Blinds.com. It's the promo code Ramsey.

Today's question comes from Mike in Texas. He says, Do we need to be patient with the current housing market or take it off the market and try again next year? Good question from Mike. So it was an amazing time. It's still a good time to sell the home. So there may be other factors here, Dave, that we don't know about about this home sitting on the market. Yeah, that's probably true. We don't know how long it's been sitting

either he hasn't said yeah i mean i i have met people who put their house on the market and two weeks later are panicking because it hasn't sold that's the question has it been two weeks or has it been four months there's a difference or has it been four years i don't know i mean i missed it i missed the one chance no you didn't um so here's the thing i don't know if you have an unrealistic view of what the house is worth uh we've taken it as low as we can what does that mean okay so here's what i would do um number one the housing market we just talked about that a second ago has slowed down and sellers are experiencing a more normal process for 50 years with the exception of a two-year period of time that we recently came through the normal days on the market for a house selling was somewhere in the

60 to 120 day range you know two to four months that was a normal time to sell a house i mean and there's been times it was a little bit slower and times it was a little bit faster but in general that's what it was and then we went through this two-year period of time where after covid people came out of their caves looking for houses like baptist after a casserole they were going nuts and they drove these you know house was on the market for 32 minutes and had 87 offers and uh that spoiled everybody rotten so here's the deal we're back to a normal market it's a 90 to 120 day days on the market dom period that we're sitting in and you have to have the house completely merchandised and staged and ready to go you need to clean the freaking bushes at the front

yard so when you're standing in the street it doesn't look like trash lives there curb appeal curb appeal bubba you know and you got to clean up the dad gum and you got to get the cat has to go visit somewhere else because nobody buys a house with a dad gum cat in it and so on right and and so you can't just put any old piece of trash on the market and it sells instantly anymore. So I don't know if you've got those kinds of problems. The other problem you may have is an unrealistic view of what the price is. See, values have not come down. Prices have.

Because prices were many times someone fishing for a sucker, a sucker fish. And they were looking for a sucker a sucker fish and they were looking for a sucker and the price you price it at sucker price and go if sells for that i'll be a happy boy you know and but then you come down you recently bought a property where a guy was fishing for sucker fish oh yeah and you made him an offer complete with all the data that says the appraisal is worth less than you are asking and you didn't steal the house but you got it at appraisal yes when you look at the comp that says the appraisal is worth less than you are asking. And you didn't steal the house, but you got it at appraisal. Yes. When you look at the comps in the neighborhood and go, what have homes actually closed for in the last 30 or 60 days?

That gives you a much better idea of what this home is actually worth. Do not go to Zillow and go, my house is worth $850,000, according to Zillow, Dave. Oh, God. So it should sell for $850,000 because Zillow said so. Zillow is not just no you remember the old map quest thing oh yeah which pretty much was greek for guaranteed to be lost zillow is the map quest of real estate you heard it here first so yeah don't know no i mean it's okay to look at it it's do people still use map quest no i mean old people are the only ones even

know about it so but um i mean you know you have the dial up yeah and then print off the instructions out the paper 14-4 right so um anyway the the point being get a real real estate agent and get a real value and really stage the house put your feet up and get ready to ride it out for 90 to 120 days and if in that period of time you don't sell it then something else is going on okay but i think you might have an unrealistic view of how fast the market is i think you might have an unrealistic view of the value of your home versus the price you put on it um and the last thing is you're in texas you could be sitting near some of the areas that have been hammered by the uh oil by the energy world being turned upside down

and a lot of people aren't working and some of those individual markets are actually declining uh it's not an it's not a nationwide thing but you know've got a microeconomic situation going on in that community where a vastly large percentage of the buyers were in the oil business in one way or another, and now they're not buying nothing because they ain't got a job or they don't have an income. And so that can cause a little miniature recession in a certain area that can affect your house price. That could be a thing. I don't think that's what's going on here. I think one of the other things we talked about is what's going on.

I'd get an opinion from one of our trusted real estate agents and go, hey, look at this thing. What do you think? What do you think is going wrong here? And it may be time to switch real estate agents if they're not doing a great job getting some showings and offers. You need to have a realistic price with realistic length of time expectations, a high-quality professional real estate go to ramsey solutions.com click on elp for ramsey trusted

people and you've got a stage of the house and actually market it and you know get it ready to sell to the public which generally has no imagination and so if crap is all torn up in there they can't see past it and you won't sell the house. That's how houses have been marketed for 50 years. Yeah. And we talk a lot about this in our real estate reality check event of what is actually going on in the market. What is it still a good time to buy? Is it still a good time to sell? And we show the graph of the interest rates over time. And even though interest rates are going up, they're nowhere near what they were back when you were selling real estate. Oh, no, not, I mean, even when I started this show,

they were in double digits when we started the show 30 years ago. And now if we had double digit interest rates, I mean, if we had a 10% interest rate, can you imagine the wailing and gnashing of teeth? Can you imagine? But we were in 10% interest rate coming down from 18. So we were calling that blessed. And you were still selling houses at 18% interest rate. Yeah, not a bunch, but they were selling. Yeah, absolutely. Wow. You were just a great real estate agent.

Yeah, that's because at 22 years old, I was a genius. Yeah. All right. Alan is with us in Cheyenne, Wyoming. Hey, Alan, what's up? Hey, how are you doing, guys? Hey, I got a quick question for you. Our son wants to buy his first house.

Cool. He earns about $100,000 a year, and he has $40,000 in savings. Good. The question is, I'm trying to figure out how to financially help him get to 20% down or get off a close to it without the old uncle see I'm reaching in going well I want some of your money that you want to give to your son you can gift him up to 15,000 your wife could gift him up to another 15,000 you could gift your daughter-in-law another 15,000 and she could gift your daughter-in-law another 15,000 so up to 60,000 you can avoid gift tax simply by writing up to four checks

and making them from one individual to another not exceeding $15,000. George Campbell Ramsey personalities my co-host today. Thank you for joining us, America. Nathan is with us in Gainesville, Florida. Hi, Nathan. Welcome to the Ramsey Show. Hey, thank you all for having me on. Sure. What's up? My question today is I'm closing on a house August 5th, and I currently have a car I owe $8,800 on. I could resell it for $15,000,

but I've had kind of a hard time finding anything that's even slightly reliable around that $6,000 to $7,000 mark. So I'm wondering if I should just punch out paying it off or search for something that will, you know, work for around that price. I would continue to do the research and get a $7,000 car before you get into this house. What's your other plan if you don't do that? My other plan is to keep the car, pay it off, and I have quite a bit of repairs I need to be doing on the house. I'm currently living rent-free with my grandpa, so

I don't have to worry about payments until I get the house, which is next month. But I've budgeted all that out. I've used every dollar, and I think I'll be fine with the

payments. What do you make a year? Around $40,000. No whining. Sell your car and find a $6,000 car. And don't tell me there's no such thing as a $6,000 car that's reliable. That's absolute BS. Yeah.

Okay. Dude, you're about to get yourself in a pinch rationalizing your butt off here. Okay? Yeah. You're trying to do 17 things at once. You know what you're about to get yourself in a pinch rationalizing your butt off here. Okay? Yeah. You're trying to do 17 things at once. You know what you're supposed to do. You just wanted one of us to tell you.

What kind of car is this that you have? It's a Passat Volkswagen. Good Lord. You need to sell that anyway. Just get a Honda or a Toyota, and you'll be fine. Yeah, just get you an old Honda, an old Toyota. It might have a high mileage. They'll go 300,000 miles easy. Dadgum Honda Accords, man.

They really never just die. They never really die. They just kind of live. You can't destroy them if you wanted to. They just go forever. Yeah, you got to just do some shopping around. And here's the thing. You just don't want to sell the car.

You just don't want to make the move. You don't want a downgrading car, and I understand. And you shouldn't have boxed yourself in if you wanted to keep this car. But now you got this house that needs all these repairs. You make $40,000 a year. You're living with your grandpa. Do you do these repairs? You've got this house payment coming on on a house that still needs repairs.

And now you're talking about keeping a car payment. No! I feel stressed just hearing all that. Made me stressed. Oof. Yeah. I want to get into this house and have it be a blessing and not a curse. And that means no debt, no payments, other than we're focusing on this house.

We tell folks all the time, Nathan, you included, don't buy a home while you have debt. What? Yeah, really. Because Murphy will move in your spare bedroom. Sally Mae will move in the other bedroom. Heat and air will go out the first week you move in. The roof will leak the third week you move in. You're asking for trouble when you move into a house with a bunch of debt.

And people rationalize it all the time. And they keep getting more and more debt, and more debt more and more debt and then they get stressed out and then they get the they get the crap knocked out of them by life then and so but i i do the same thing i i try to figure out a way to get to do all the stuff i want to do at the same time where none of us like saying no even to ourselves but i guess it's kind of one of our spiritual gifts here at the show we're supposed to be here just to tell you what you already knew. No, you don't need to keep this car. If you were going to keep this car, you shouldn't have bought this house, and too late, you've already bought this house. So yeah, you need... Something's got to go, and if you can get out

from under this car and make profit, I'm doing that. Oh, definitely. Hannah is in ann arbor hi hannah how are you hello what's up hi i have a question in regards to kind of housing market and housing grants um first off we make roughly seven thousand or seven thousand dollars um my husband's in part 10 ministry. He does also a W-2. I'm a 1099. And that's combined together that we make. Do you guys, we're just trying to get out of a kind of a profits chamber kind of situation. A what situation? We live on our church property.

Oh, okay. All right. Yeah. Okay. it's it's good but it's it has its setbacks too we've been there for three years it's been great but we just need to get out now we kind of have a time frame that we need to get out by um and we're just wondering we follow your baby steps we're out of credit card debt we only have our car loan and we're trying to stock, you know, pay that off as fast as we can, but also put away money at the same time because we have a timeframe to get out. And so our question is, what do you guys think about housing grants? I do live in Michigan. What kind of housing grant are you looking at? It's what's called a MISTA grant.

They changed it a few years ago. It used to be forgivable. It's not forgivable now, in my understanding. You do have to pay that back when you sell it or you refinance the house. It's up to what we qualify for. What I'm told is $10,000. So they give you $10, grand that you have to give them back the first time you refinance or sell correct that is my under that is my um understanding

i think there's probably some other strings to this that you need to understand that are probably going to make this less than palatable okay when you get further into it i doubt it is quite as simple as i don't know i don't know the program but i doubt i mean i've been in the real estate in and around real estate my whole life and so lots of first-time home buyer programs out there across the nation this sounds like it might have some other things tied to it i would learn about that but i also wouldn't tell you to buy a house right now you're broke you just need to go rent something okay you don't tell you to buy a house right now. You're broke. You just need to go rent something. Okay.

You don't need to be buying a house with a car payment. Gotcha. How much do you owe on your car? Eight. Actually, seven. Why is your husband part-time? Does he have a full-time job in addition to that? Yes, he does. He works four days a week for a W-2 company. What does he do four days a week?

He works at a chemical company, I guess. He's a shipping manager. Okay, good. But his heart is in ministry, and so he took an additional part-time job as a pastor, and with that gave you guys a parsonage use, and now that's coming to an end. Yeah, pretty much. Yeah.

Yeah, I'd be getting out of debt, and let's go rent somewhere. Let's get an emergency fund in place of three to six months. Then we can focus on a down payment. This is all while we're renting. How much have you got in savings? Roughly $13,000. $15,000? Yes, $13,000. $13,000. So we can pay off the debt? Your only debt is an $8,000 car? Yes. Great. Pay it off

when you get off the phone, please. Okay. Today. I want you to be free. And then I want you to save aggressively. Can you stay in the Parsonage a little while longer and with no car payment quickly build up a down payment? If not, then I'm going to have you go rent for six months and build up your down payment that way. Okay. Please don't move into a house with a car payment. Please, please, for your sake, don't move into a house with a car payment. You're asking for trouble. You're letting the timing of this

parsonage deal running out drive your financial decisions instead of wise financial decision making. You're being forced into doing something. You feel like you're being forced into doing something dumb. And rent, in your case, is just buying some time. It's patience. So if you have to rent for six

months or a year while you build up your down payment, fine. But pay off your car today. Today. And these grants, they often seem like, wow, they're really helping us out. But I just heard this is a loan. It's like these student loans. They go, oh, we're going to give you scholarships and grants.

No, you gave me a subsidized loan. Thank you so much. It doesn't have any interest on it. When I was doing rehab years ago, I took a historic grant on a historic house they gave me five thousand dollars for to do repairs but what came with it was everything on the house had to be put back by the way they defined historic period which included no railing around the front porch which codes required that's complicated so i either have to do what the hysteric people want me to do or i have to do what codes wants me to do but if i

don't do what the hysteric people say i don't get the five thousand dollars and if i do the hysteric thing then i then codes won't give me a use and occupancy permit so i'm like why don't you people that all work for the government get together and like talk and stuff. That sounds too difficult. You know, but there's a reason that codes came up with railings around front porches since 1901 because people kept falling off and breaking their faces. But Dave, history. There it is. Preserve the history. Yeah, but we want the history of the broken face.

Oh, my God. But this is grants. There's always something tied in there, and I'm always a little weary. Strings attached. You know, the scariest words in the English language. I'm from the government, and I'm here to help. This is The Ramsey Show. ស្រូវានប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្រាប់ពីប្ Welcome to the Ramsey Show. George Campbell, Ramsey personality, is my co-host today.

Scott's in Indianapolis. Hey, Scott, how are you? Real good, thank you. I appreciate you taking my call. Sure, what's up? I recently retired. I'm 62. I uh not taking social security yet uh i rolled my 401k over into an ira uh i've got about 208 000 in a pension uh didn't know

if i should pay my car my life student student loan, or her car, my life student loan, and the house off. How much does all that add up to? About $80,000. Which would leave you with $128,000, right? Roughly, but I have to pay tax on it because it wasn't taxed. Yeah. Do you have any other nest egg? $13,000. You don't have another egg? Uh, 13,000.

You don't have another 401k. Your wife doesn't have anything else. This is it. No, she's got a 401k. They started about two years ago. She may have around 16 in it right now. Okay. But the 401k that I had, I rolled that over into an IRA. How much do you owe on your car? Uh, about nine, 95 roughly. And what's the student loan? that I had, I rolled that over into an IRA. How much do you owe on your car? About $9,000. $95,000 roughly. And what's the student loan?

About $95,000. About $59,000 on the house. Okay, so $60,000 on the house, $20,000 on the other stuff. Right. Okay. I'll pay off the other stuff for sure. And you're 62.

How old is she? She's 62 also. Did you say you retired? From the job I was at, yes. Are you working? I'm not working right now. I can go back to work if I want, but I don't want to. I don't blame you.

And does she work? Yes. So what is your household income with you being retired uh with just her i'm going to guess about 45 to 50 okay when did she take out these student loans um i'm going to guess two or three years ago maybe Oh, so she just recently went to school? Well, when she did go to it, she dropped out of it. It was all computer classes over on the computer. She didn't actually go to a school. Okay, here's what's bouncing around in my mind, Scott,

and you guys can talk about this tonight and decide what you want to do. Okay. I don't like leaving you only $100,000. Right. That's a small nest egg. That can go away in about three blinks, right? That scares me. Okay.

I don't like any of this, but I really don't like that. I don't like that feeling. Do you see what I'm saying? Right. So what I would probably do if I woke up in your shoes, because I don't like the strain of being that broke at 62, I would write a check today and pay off the two little debts. And then I would take some kind of fun thing that makes me smile that pays really, really ridiculously good.

What did you used to do? I worked in the propane business. What did you do in the propane business? Set up tanks, dig lines, regulators, and I was a mechanic before. Gotcha. Okay. So is there some kind of tinkering, turning of a wrench that makes you smile that you enjoy doing? Yeah, like digging with my hands. Yeah. I mean, you sound like you smile that you enjoy doing? Yeah. I like bigger on my hands.

Yeah. I mean, you sound like you're that guy or mechanic or kind of a handyman, I guess. Yeah. I mean, if you could, if you could, if you could tinker around and make $60,000 over the next couple of years and pay the house off, that'd be pretty cool. Okay. Without, without breaking your back and screwing up your return and happiness right right i mean you don't have to take 80 hours a week unless you wanted to work

80 hours a week for six months and get this over with i don't know but um i doubt that's available it could be i don't know but i mean if there's something a lot of stuff like this might be you just starting some kind of little side thing like handyman. People are paying ridiculous money for handyman. I'm one of those people, Dave. You can make $50, $75 an hour just doing general handyman work. Stuff George doesn't know what a screwdriver is, man. Exactly. I'm not talking back-breaking stuff, but it's stuff that you know how to do and other people don't.

Yeah, you get a good millennial like George that doesn't know what a screwdriver is and charge him a lot. I'd rather watch Netflix than hang pictures up, Dave. I'm sorry. That's my generation. I'm sorry. This is pitiful, George. I like the idea of paying off the little debts, knocking them out, and then getting back to work for a short period of time, getting rid of all the payments.

Here's the thing, Scott. You might mess around with this handyman thing and make a lot of money doing it, and it might actually be fun because you don't have to do it. It's no longer work. It's like the cool thing I'm doing. Oh, and by the way, I'm going to pay the house off. When the house is paid off and you've got $150,000 in there, a little more than that,

your wife's 401Ks continue to bill for a couple, three more years. Y'all's nest egg starts to be you know bump it up maybe two three hundred now i'm feeling a lot more comfortable yeah you can actually retire for you feeling more comfortable for you christian's with us in san jose hi christian welcome to the ramsey show hello mr ramsey hello mr camel how you guys doing great man what's up hey so my question is whether or not i should sell my home uh with my wife and um either rent something out or uh buy a new home okay why would you do that um so right now we live in hollister california um our commute is about an hour um when we do commute usually we just stay with my mother-in-law so we're rarely ever at home okay

it does sound like a move is in order in the direction of your work what do you make of your household income together we make approximately 180 to 200,000 a year cool that's good news well you live in a super expensive area so I was hoping you made some money um yeah so if you sell and rebuy in the other area that's closer does that work the thing is uh right now our current home um we owe 545 000 it's approximately 100 or 830 000 is what it's worth but everything we're looking for in San Jose, California, is approximately $1.2 million. Yeah, I bet. Great news is you make $180,000, right?

Yes, sir. So what I would do is quit looking at $1.2 million. I mean, that may be the worst house in San Jose. It's possible. That's a super high area. But I'm going to really try to find the house that's even worse than that, that you're just really ashamed of and hate, and at least make your move and get your life back on the commute,

and then start saving like crazy and move up into a little better house in that same community then. But all of this together does not equal buy something you can't afford and beats the crap out of you with the monthly payment, and you're sitting in the corner sucking your thumb because you're house poor. Nothing is worth that. Yeah, don't do that. So can you split the difference and maybe you live 20 minutes out from San Jose

and you can find a place that's, you know, $800,000, $ eight hundred thousand seven hundred now 20 minutes out is what he's talking about i mean it's it's it's that's just you're just dealing with silicon valley man i mean it's just unbelievable yeah it's gross i mean it it's it's a ridiculous world when you make 180 000 and can't live in that's a lot that's a crazy world but it is the world you're in dude i. I mean, it's, I mean. You got kids? Yeah, I mean, it's just, I think you start trying to make the move, but you just make it super conservative and uncomfortable. You're going to choose your discomfort. Yeah.

Choose the hour commute or a house that sucks as a stepping stone to a house that doesn't suck and that you build up with your because your income you're young enough your incomes are going to continue to go up you're in that market and man that's tough because even with you know 280 down on the new one on a 1.2 you're looking at an astronomical monthly payment oh yeah even making it's just it's just hard but that's again math you can't you gotta have the income to do the deal regardless you don't get a pass on math. You can't. You've got to have the income to do the deal regardless. You don't get a pass just because I chose to live there. It means you can't live there or whatever.

So when I was growing up, we lived across the tracks on the other side of the tracks over here, literally. I mean, behind me there's some tracks. And so one county over from here. And this county that we're in is a very wealthy county and uh we used to talk about the rich people that lived over here and we went you can't live over there you know we we couldn't afford to live over here we weren't bad people but we weren't poor people we just couldn't afford to live over here yeah it's expensive and so that's just what you're facing i mean sometimes you look across the tracks and you just can't afford to live over there

and until your income changes or something else changes. You've got to adjust your expectations. It's hard to do. That's hard. That puts us out of the Ramsey Show in the books. George Camel, James Andrews, Zach Ben, and Austin in the booth. This is the Ramsey Show. Do you love a good day brand want to see the latest ramsey show videos going viral check out your favorite moments from the ramsey show on youtube

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