The Ramsey Show - App - Don't Have Fake Hope in a False Plan (Hour 2)

Episode Date: February 26, 2021

Debt, Savings, Home Buying Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/31ricKt  Tools to get you started:  Debt Calculator: https://bit.ly/2QIoSPV Insurance Coverage Checkup: https://bit.ly/2BrqEuo Complete Guide to Budgeting: https://bit.ly/2QEyonc Check out more Ramsey Network podcasts: https://bit.ly/2JgzaQR

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Chris Hogan, and hosting along with me this hour is Anthony O'Neill, and we are excited to talk to you about your money questions. So here's the deal. I want you to pick up the phone. Call us, 888-825-5225. Again, that's 888-825-5225.

We'd love to be able to hear from you. Kelly is standing by, ready to take your call. You can also find us on social media, at Ramsey Show, or at Anthony O'Neill, or at Chris Hogan 360. We'd love to hear your questions and be able to talk to you about what's on your mind. A.O., are you ready to help the people? Man, let's do it, man. I'm ready to go to the phone. All right, let's do it.

We're going to get to the phone. We got Michelle. Michelle's on the line calling from Denver, Colorado. Michelle, how can Anthony and I help you? Hi, Chris and Anthony and company. I appreciate your time, and I'm so grateful to speak with you. Well, thank you. Thank you. What's on your mind? I am 49, self-employed, single, and I have zero

debt. And I want to know what the best method to pay for a first home is. Okay. I love it. Talk to us. You're self-employed, so how much money are you making a year? Approximately $40,000. Okay, you're making $40,000 a year. Alright, and do you have any other income as far as outside of your business coming in? No, I don't. I do have approximately $600,000 in assets saved. How much? $600,000. $600,000. Now, wait a minute. I like this. Where did this money come from? Was it inherited, or did you just save it?

No, this is saving. Oh, I love it. Investing. Lots of investing. Michelle, how much of the $600K is invested for retirement? So, approximately $200K. Okay. And so, the other $400K is just in a savings account?

No, it's divided with stocks, mutual funds. Oh, okay. Okay. And so the other $400 is just in a savings account? No, it's divided with stocks, mutual funds. Oh, okay. Okay, got you. So real quick, $200 of it is in a 401k, you said. How much of it is in single stocks? Well, it can't be in a 401k. Yeah, it's not in a 401k. It's in a retirement fund.

Oh, retirement fund. Okay, I thought it was a prior 401k. Yeah. How much is in single stocks? Not too much. Quite a bit in mutual funds. Okay. Okay.

Go ahead. I have approximately about 180 between an offshore account and another 180 offshore account. Okay. Very good. I like it. So let me ask you this question because you're in a good position. I kind of like the fact that you have some money. I'm going to let Hogan talk about that because I would really love to get your retirement package and portfolio up a little bit more.

But what's your dream situation? Do you want to pay cash for a home? Or are you okay with financing at a fixed rate with 20% down? I would be completely happy to get a mortgage, but I can't get a mortgage at the moment because of the pandemic qualifying during the pandemic, which is very difficult. Yeah, especially with the $40,000 a year of income.

Yeah. Now, what do you do? I'm curious. I'm curious. I'm a mariner. I work on selling yachts. Yep, yep, yep. Not selling them, but selling them. Okay, okay, okay.

Because I would definitely say the very first thing is, I'm thinking is, and correct me if I'm wrong, Hogan, I want to see your retirement go up a little bit more. And so I don't want to pull $400,000 from your investments. I actually would prefer for you to move some of that over into your retirement. So it's covered for retirement. But I don't have a problem with you pulling some of it out because I have some money in a mutual fund as well that I'm saving up for it for a purchase a home. So when I'm ready to purchase my dream home, I'm a pull from that. But you're right. It's going to be hard for it to get approved for a mortgage right now,

$40,000 with the pandemic. And then to pay cash for a home in a Denver area, you're going to need about $2,000 to $2,800 to get a decent home. So what are you thinking, Hogan? Michelle, is this $40,000? Is this the most you've made or was your income higher before? My income was higher. I was working overseas for approximately 10 years. Oh, you were working overseas for 10 years. And so what were you making during that time?

Anywhere between about $60,000 to $75,000. Okay. And do you have an emergency fund in place? Yes, I do. How much do you have in an emergency fund? Approximately $30,000. Okay. And what other debts do you have? I have zero debt.

Zero debt? I own a car. Okay. It's fantastic. I own a car. I do have a Roth IRA with approximately $80,000 in it as well. Okay. So in looking at this, you have done a great job of saving.

Yeah. And in looking at it, I do want to get you connected to one of our SmartVestor pros to be able to look so you can start to earmark some of this money that's over the offshore account, beginning to look at it and calling it retirement. Yeah. I think, you know, it is going to be a little tougher right now to try to qualify, but you don't have any other debt, and you are making $40,000. So if your income has been stable, I would call around, begin to talk to these banks and lending companies because your asset position is strong. Now it's just a matter of, okay, how much of that in looking at those accounts are you going to use for a down payment? Because a good down payment will put you in position to really be able to qualify. So that's what I do.

I begin to kind of think it through, sit down with a smart investor pro, but have a time frame on when are you looking to buy, right? And so that way you can understand you're not going to be renting forever. You're going to have an opportunity to be able to grow forward. It's just going to, you're going to need a plan. Now, from a practical perspective, Hogan, this is your space. This is where you're the expert at. I would say that out of $600,000, I'm going to airmark $500,000 for my retirement, take $100,000 to put down on a $200,000-some-thousand-dollar home. That means that

leaves me with a $125,000, $30,000 mortgage. She can't afford that with a $40,000 income. Yes, she could. And looking at that and putting that on a 15-year fix, she's going to be fine. Matter of fact, she might be paying exactly what she's paying in rent. Absolutely. So that's an option for you, Michelle. Again, think it through. Begin to have some guidelines.

Get all your statements together of your different accounts. You could do a Zoom meeting or a Skype meeting with one of our SmartVestor pros. Go to RamseySolutions.com. It'll get you connected. And then what you can do is start to see this picture for yourself, and then you stay in control of the time frame. That's good. But I love your saving spirit, young lady.

You're not scared to work, and you also save, which is phenomenal. It's putting you way ahead of the game at 49 years young. And we all know the income has the opportunity to be able to go up just as things open up more. Yes. All right. Speaking of this, a lot of people are stressed out about retirement accounts right now in this year. This past year was crazy. Maybe you're close to retiring, and now you're wondering, do I work a couple of more years

to try to make up for the difference? Or maybe you weren't investing in the right things, and you're thinking, okay, it's time for me to make some changes, and I need to get a little bit more aggressive. Or maybe you pulled money out, and you're looking back on it going, I wish I didn't do that. What can I do about it? Bottom line, if you're in one of these situations, I want you to know you don't have to face this pain alone. Working with an investment professional is crucial. And our SmartVestor pros aren't scared. They've seen stuff and they're not there to judge you. They're there to help you.

So go to DaveRamsey.com slash SmartVestor or Or do this, my friends. Text the word INVEST to 33789. Again, the word INVEST to 33789. This is The Ramsey Show. If current times have shown us anything, it's that the least expected events can and will happen, and we have to deal with it. That's why everyone who has a family counting on them needs term life insurance. For over 20 years, the only company I've recommended is Zander Insurance. Not only because they search all of the top term life plans to find you the best rates, but over the years they have constantly changed and updated their systems to make the whole process simpler and easier to get the protection needed. You can now apply with a completely touchless experience

with everything being done either over the phone or the Internet. They also have plans with super competitive rates that don't require an exam, allowing you to skip a step and get the coverage you need faster. Go to Zander.com or call 800-356-4282. Great rates and a simple process mean there's no excuse to not get this done, people. Welcome back to the Ramsey Show. I'm Chris Hogan, and hosting along with me this hour is Anthony O'Neill, and we are very excited to be with you. If you've not had a chance to check out the website, I want you to go to DaveRamsey.com.

We have a lot of openings, and talking about that, I was just talking about this more in the break in the lobby with someone. And so you've got a great opportunity to be able to find a position that you're passionate about and get plugged in. Go to RamseySolutions.com and check out the openings that are out there. We'd love to have you join the team. All right, we're getting back to the phones. If you're out there and you've got a question, this is the day to pick up the phone and let's talk about it. The number to call is 888-825-5225. Again, that's 888-825-5225.

We'd love to hear from you. All right, we're going to go to Georgia. It looks like we've got Sarah on the line. Again, that's 888-825-5-2-2-5. We'd love to hear from you. Alright, we're going to go to Georgia. Looks like we got Sarah on the line. Sarah, how are you? I'm good, guys. How are you? Oh, we're focused and not finished. What's on your mind today? Well, we got a little crisis going on, so hopefully you

guys can help. Uh-oh. What happened? My husband and I, we are military, so we're finally home and we bought a home va loan of course and we didn't know about you guys so don't bite my head off we didn't know about you guys till january so we bought the house in december okay so we started the baby step we're doing a rems because we're doing financial peace university so we're doing a Remedy Plus. We're doing Financial Peace University. So we're doing everything, and we're in Baby Step 2. However, the crisis is the house we bought, the basement flooded. And it's been flooding since February, beginning of February.

And we've had three planners come in, and they're telling us we need to, one, they're saying that the sellers probably did the work themselves and did not do it correctly. All three of them are saying that. And also they're telling us the work is going to cost about between $10,000 to $15,000 to get it fixed. Okay. So hold on a second. So it's $10,000 to $15,000 to get it fixed. Okay. So hold on a second.

So it's $10,000 to $15,000 to get it fixed. Have you reached out to your realtor? Yes, we did. And she looked at it and saw there's a bathroom that was remodeled and saw there was no toilet pool and then got us in contact with a lawyer trying to figure out what to do. We spoke with a lawyer trying to figure out what to do. We spoke with the lawyer yesterday, and they're saying that they're going to write a letter to the sellers hoping that they would cover the damage. But if they don't, it will take one year because of COVID.

There is a delay in court. Oh, the court things. Yeah. Let me ask you this. Did you all get a home inspection done? Yes, we did. And this was not on it at all. Okay.

Like, the realtor also double-checked. Okay. Well, Sarah, first and foremost, I want to thank you and your husband for your service in the military. I'm grateful for you. And I like that you have been hyper-proactive. Everything that I've asked you, you've got an answer for. You've been moving down the path. Now, the main thing is, is we got to get this fixed, right?

Right. So what's your all's income? We bring him $8,000 a month. Okay. It came up. And what else do you owe on outside of this home? Okay. I have it right here, my loan, Renzi Plus.

I have a government credit card, $2,400, and my car, which is $36,000. I'm sorry. You faded out on me on that. How much is this car? $36,000. Okay. You didn't fade out. I was just making you say it one more time.

What's the payment on this thing? $800. How much is the payment on your mortgage? About $1,545. Do you see a problem there, Sarah? Yes. All right. So guess what?

One of the first things you all can do to help you with this, finding this money to fix this basement, is this vehicle. What kind of car is it? It's a tell you ride. Okay. All right. I want you to go out there and tell it to ride. All right. Ride on off into the sunset.

It's time to sell this thing. It's time to kick it to the curb. You're going to free up $800 a month in your budget. Right? And so this is that mindset. Listen to me. I love that you guys are in Ramsey Plus. I want to get your thoughts on this, but I love that you're all in Ramsey

Plus. I love that you know your numbers. You're proactive. And what I would say is right now you're on the cusp of being able to make a change. But one of the sacrifices I would make is getting this vehicle. So go to Kelly blue book.com, find out the value, call up the lender,

get a 30 day payoff. So you know what it would take to get it out of your life. You guys go get a thousand or $2,000 car. You're going to free up $800 to fix this water problem. Yeah. Sarah, I'm curious. Do you have any savings right now?

Uh, we have, um, Yeah. Sarah, I'm curious. Do you have any savings right now? We have about $5,000. About $5,000 in savings. Okay. Yes. And they told us about the flood. Okay. Here's my suggestion. I agree with Hogan. We got to get that car. But right now, we need to really figure out this whole flooding thing because that can cause some more issues. And so while you're going through the process with your attorney, I will reach out to maybe one more plumber, one more person to see what they can do and try and figure out, will someone work with you? OK, while you're talking to your attorney, while you're looking to get out of this car uh to create some free some extra income there

but even if you sell your car today it's only it's an extra eight hundred dollars but right now um which you need to get rid of that car so you can get on your journey but how do we get this flooding fix so that way we don't have mildew issues we have to worry about a lot of a lot of other issues so i would you got five thousand sit on that five thousand and moving forward i want you to pause paying your debt okay i want you to pause paying your debt i want you to put that on top of this money that's going to all go towards fixing this water leak all right because this is a this is a true emergency that could impact the family and cause more issues you mean pause paying extra on yeah pause paying extra on the day. Yeah, Paul's paying extra on the day. I want you to pause.

I don't want you to pause paying your bills. Right. But I want you to pause paying extra. So, pause, baby, is number two. But then figure out, okay, talk to one other extra person. And then ask all three of them, hey, listen, we got $7,000. What can we do to fix this issue? We can give you $7,000 cash right now.

Can y'all come down? Can you help us? What can we do? but do what hogan says you guys a kid i mean eight hundred dollar car note that is uh fifty percent more than fifty percent of your mortgage payment that is ridiculous but you're right a.o the water's got to get drained out yeah've got to turn off the water down there or fix, like you said, get $7,000 worth of it done. The good thing is you all are making $8,000 a month. So you all paying the mortgage payment, making the minimum payment on the credit card, paying that car note until you can get that thing sold, you guys can get this done in phases and get it fixed. I agree.

But, yes, definitely pursue the legal options on this because this is a issue. And this is a major dollar repair that you all are dealing with. But don't lose hope. This is the thing. One of those things in life happens. A.O. was just talking about his car issues. And I've walked through some issues. And it's real easy to get so frustrated and irritated that you lose hope.

And you don't want to do that. And so, Sarah'm glad you reached out you're talking about this is on your mind uh believe me you know you you can end up giving other people hope by being honest enough and open enough to talk about your own situation uh thank you and i'm glad that you're plugged into ramsey plus it means you're connected and getting the right information. Now it's the execution of the process and trying to get this thing resolved. I agree. And it's irritating, man. I'll tell you, when you deal with a setback, when you are moving forward and trying to go down the path to the next destination and deal with life throwing you a curve, it's frustrating. It's so frustrating, Hogan.

And I understand her pain, man, because I'm literally going through it right now. Like, I didn't ask for this. I didn't want this. But this is why you got to get out of debt, have a fully funded emergency fund. For when stuff like this happens, it sucks, but you are prepared for it. That's right. And people are dealing with this in all phases, whether it's in your apartment, whether it's in your home, a car repair. I mean, it's always something popping up.

But, you know, here's what I've learned. When you have an emergency fund, an emergency fund turns an emergency into just an inconvenience. Yes. Where you just go like this. Ah, well. I mean, all right. This is what I got to do. This is what I got to do.

Right. I'm going to deal with this. But if you don't have an emergency fund, it turns it into, oh, my goodness., like where do I turn? What do I do? And then you get panicked. Then you get desperate. And then that's when stupid can creep in. So again, get your emergency fund. Be clear on what it is you're doing, but be certain of what you're not going to do. This is The Ramsey Show. Thank you. Welcome back to The Ramsey Show. I'm Chris Hogan, and hosting along with me is Anthony O'Neill, and we're excited. You all may not be aware, but there is a Ramsey Network.

Yes, we've got a Ramsey Network. Yes, we got a Ramsey Network. All of us, all the Ramsey personalities here have shows, whether it's Dr. John Deloney, Rachel Cruz, myself, Christy Wright, you know, we, Ken Coleman, we have a Ramsey Network.

Obviously, the Ramsey Show. And so you've got an opportunity to be plugged into content that actually will help you change your life. Anthony O'Neill has a show called The Table where he's having real relevant conversations with people about life and money. And so you have my show, The Chris Hogan Show, The Christy Wright Show. So I want to encourage you out there. I know people like to watch certain shows and be entertained, whether they're talking about Maisel or Yellowstone or whatever else is out there. But you've got an opportunity

to get some content to help you change your life. And this is different. So we need to be about business, about making progress, about being intentional and not just having fun. Well, hold on. Wait, wait, wait, wait, wait, wait. They're going to have fun with my show, Barbara. I said not just having fun. Oh, okay. I was about wait, wait, wait, wait, wait. They're going to have fun with my show, bro, bro. I said not just having fun. Oh, okay.

I was about to say, you're going to have fun and you're going to learn something. Well, that's what happens. Now, on your show, they may not have as much fun. They're going to learn a whole lot. I beg to differ. I'm just keeping it 100. Well, you need to. I see your show.

I learn a lot. I had fun on your show, too. I'm just playing. You had me on there. We had fun. Dude, it was one of my best shows. I need to come back. Yeah, bro. It was a lot of fun. too. You had me on there. We had fun. Dude, it was one of my best shows. I need to come back. Yeah, bro.

It was a lot of fun. You haven't had me on yours, so I just want to call that out. I beg to differ. When that free degree launched, you were on there. That was a business move, man. I want a fun move. We'll figure out some fun moves. Ayo and I will arm wrestle or something.

I don't know. We'll figure out something. We already know who will win that one. You sure do. Deep down in your little bitty heart, you know who. I don't know. We'll figure out something. We already know who will win that one. You sure do. Deep down in your little bitty heart, you know who's going to win that. But here's the deal. We want to take your calls about life and money. Don't pay any attention to us, but we are here to help you.

Call us. The number is 888-825-5225. Again, that's 888-825-5225. We want to meet you right where you are and talk about the things that are on your mind and on your heart. Alright, coming up, we got James over in Baltimore, land of real seafood. James, how are you? I'm good. How are you doing today?

Oh, we're focused and not finished, my friend. What's your question for us? Yeah, so like the previous caller, I am also active duty military. Myself is an optometry technician. Um, currently we make about, I'd say roughly around six grand a month combined. Um, and my wife has $47,000 in student loan debt. We recently just paid off our second vehicle. I just made a payment with our tax return that came in. Um, and I'm just trying to see if I'm taking the right approach to paying this student loan debt off. Currently, my wife solely works to put her entire paycheck towards the student loans.

Wow. And so I'm just wondering if while these loans are in forbearance currently with the current situation, the pandemic, if it's worse, paying the loans off or building up our emergency fund because currently we have nothing in savings. Pay the loans off, man. Pay the loans off. And I'm going to tell you why. And I try not to be so aggressive when I hear people say this,

but they're in forbearance. This means that they're not racking up interest right now. And so for you, what I'm saying is you want to go ahead and take advantage of this. Like I'm trying to figure out how to get all of these student loans knocked out before the interest is activated again. And so with the way the government is looking right now, it may be a little bit of time, you know, but I'm saying take advantage of this. I get it. You want to have a savings account and we want you to have a fully funded emergency fund.

But I want you to be debt free before you have a fully funded emergency fund, because what you're doing is, yes, you're going to put more money into the savings. But long term, you're going to spend more money into debt that you didn't have to do because you was trying to save money. So what I'm saying, save yourself true money by paying off all these student loans, which is forty seven thousand dollars. Thank you so much for your service. But I promise you, when you pay these student loans off, my brother, I promise you, you'll thank yourself down the road. Now, now, the old y'all listening. I mean, he ain't the only one, Hogan, who's asking that question. No, not at all. I mean, this is a question that you get all the time, me and Dave get, I get on my show.

Well, why pay when I don't have to pay right now? Well, you do have to pay if you want to save money. Like, that's how I look at it. I have to save money. I have to change my future. So I have to pay these student loans off so I can get my life back and start focusing on the future, not worrying about my past. Oh, you're absolutely right.

And James, I would tell you, you know, my friend, you want to get $1,000 and have that as just the starter emergency fund. And then that way, if something happens, car repair, truck repair, whatever, you've got money you can reach and not have to utilize debt. But Anthony's right. You need to attack this debt with a vengeance and delete it and get out of your life. Anthony, this brings up something else. What's that?

We'll have to go here because people are having their ears tickled out there hearing about loan forgiveness. Yeah. Hearing about how the government is going to save the day. They're going to roll through on the little horse with the student loan ferry, and they're going to sprinkle dust on people's student loans and forgive it. Yeah. You know, Hogan, man, and I'm trying to be sensitive when I say this because, you know, and this is what I study. You know, right now, studies are showing as of today that the student loan forgiveness program is not working. Nearly 85 percent of the people are being declined.

I think a higher number came out here recently today. But the government is talking. Me and Dave talked about this earlier this week, that the government is there. There probably will be something in the future, but we don't know. So for me, my thing is because we can't say yes or no, we're sticking with the no. We're going to take care of our responsibilities. And if it comes, then take advantage of it. But as of right now, past experiences are showing us the government will not forgive the student loans.

Right. Well, and they're definitely not going to do it to the level that people are expecting. No. Like, I've heard 10 grand. Yeah. But here's the thing. Have you heard this? Yeah.

If they do this, they're talking about a community service component. Exactly. Well, wait. I'm paying the 10 grand. You ain't about to make me serve. But how long? And what are you going to have to do? So my point is, is for people out there, I'm with you, Anthony.

I don't want you to have fake hope and a false plan. Right. Let me say it again. I don't want you to have fake hope and a false plan. I want you to deal with the known. Right. And so, you know, you having the mindset of you digging your way out of debt. I know the moratorium on student loans is through now, September.

And so, you know, you not being on hope, because here's my fear, A.O. Talk to me. People that have gone without paying it. Yep. And you already know what happens with people if you're not on a budget. Come on, man. Now, all of a sudden in September, you're going to be like, you're going to hear that knock. Yes.

That this payment is now active again. Yes, yes, yes, yes, yes. And here's the thing, Hogan. And correct me if you disagree. We're not saying that we don't have a problem that we need to fix. But the problem is not forgiven the problem is stopping it from even happening so i think when people hear us like oh dave and anthony is just don't they're not no no what we're saying is okay yes this is a problem

let's fix it but i can't fix the leak if i don't fix what's causing the leak okay so i can't stop the water from dripping if i don't fix the hole that's inside of it. So for me, it's like let's stop the student loan program or let's put a cap on it. Let's do something, because if we forgive like what they're talking about, the ten thousand dollars would be close to about six hundred billion dollars. We still have one point one trillion dollars in student loan debt that is still a major crisis and we'll be we'll be back to 1.7 in the next few years so what i'm saying is we're going to be back well let's pause over here let's go to the front end and fix the issue so my kids your kids our great great grandkids do not have this issue going into the future. Yeah. No, I agree.

I mean, it is certainly a massive issue. And, you know, financially, as you start to look at it, you're impacting 44 million Americans with student loan debt. And, you know, the thing that I get riled up about is that, you know, we got young people walking into financial aid offices, signing documents they don't understand for payments they can't afford. Zero. Can't afford it.

And so now you start off life in the hole and behind. So that's why, again, that's why you wrote your book, Debt Redegree, How to Destroy Your Student Loan Debt. And so if you're out there and you want to know, how do I get this out of my life, I want you to check out Anthony's book. But at the same time, stay plugged in, understanding that we're here to help you, and you're going to battle your way out of this. We're not going to just sit and wish, right?

No, no, no. We're going to work and we're going to battle and we're going to strive for progress because that's what people do when you're focused and not finished. Let's go. This is The Ramsey Show. Welcome back, everyone. This is the Ramsey Show. I'm Chris Hogan, and this young person over here beside me is Anthony O'Neill. He's helping young people all around the place.

He's helping people deal with money. He's helping people on tax, student loan debt. And I'm helping people, too, on the Chris Hogan Show, helping people understand that your retirement is about you being focused and not finished. And you can come over and check out the show. You can find me on YouTube, Apple Podcasts, Google Podcasts. We have a lot of fun over there with the segments with Did You Know, where I try to stump you and give you some information. We also do a segment called Panicked or Pumped. And that's where we talk to people that are feeling panicked about a certain situation or even pumped about a milestone that they've hit.

I like that. So, got a great opportunity. Come check it out. Go to ChrisHogan360.com. All right. Anthony and I have had a blast taking calls, and so Kelly is relaxed over there. We need to get her hair on fire, so I'd love for you to call in. 888-825-5225. Again, that's 888-825-5225.

I need Kelly to get frazzled. I see. I didn't say that. Such a brown-nosed radio. Listen, people, I want you to call in. Let's get these phone lines cracking and talk to you about your life and your money. Next up, we've got Rachel in Little Rock, Arkansas.

Rachel, how can we help you? Hi. So, I am 19 years old. Oh, Katie. And I moved out of my parents' house officially in September. That's great. And I have a full-time job. Wow.

I tried the college life and decided I wasn't going to waste money if I didn't have a plan. So I have no debt. My car is paid for. I paid for my car. I haven't had any type of credit card. But I'm trying to make a decision of if I need to buy a newer

car first for stability's sake or if I should get a house and stop renting because my car is a 2008. Okay, 2008. How many miles are on it? 151. 151?

What kind of car did you say it was again, Rachel? It's a Subaru Impreza. Okay, got you. You don't have to laugh. Don't make fun of your car. It can hear you. Yeah. Okay?

You don't want your car to get upset, so be nice. Elaine has had a hard life here. Okay. Rachel, how much money do you have in your bank account right now? So I have my $1,000 emergency fund, and then on a separate thing, I have a, I think, $2,500. When you say a separate thing. I have a I think $2,500. When you say a separate thing. I should be getting my tax returns for $2,500 because I didn't get a stimulus check when they came out

since I lived in my parents' house. So they're giving me those as well. So when you say a separate thing, are you talking about a separate bank account or do you have this invested in one of those? Okay. I just want to make sure it's not invested in one of those little apps that people are saying we're saving up for. So you got $3,500 saved up.

What are you making annually right now? Annually, $28,000 before tax. $28,000 before tax? Correct. All right, so I'm going to give you something you may not like. I get that for a way. Okay, cool. Great.

So here's the thing. You're doing great. I want to say this right now. You're 19 years old. You have no debt. You got $3,500 in your savings account. So let me go. Let's talk about the car.

I think that the car is great. You have 150,000 miles on it. It's a reliable car. I'm going to tell you, just keep up with the maintenance. If you take care of the car, getting it properly maintained, as far as oil as oil changes tire rotations making your fluids are good as long as you stick to that that car will last you to about 200 220 000 miles you know then from there on the flip side i want you to really start getting don't worry about a house right now all right i want you to skip over to baby step number three and i need you to set aside three to six months of the expenses then while you're

doing that i want you to go connect with our good friend ken coleman because we need to get your income up you're at twenty eight thousand dollars a year right now which is okay i'm okay with that at your age but we need to get you up to right around fifty thousand then we can start talking about purchasing a home but once you do get your three to six months of expenses, I don't have a problem with you going over to 3B, start saving a little bit. But what I really want you to do is get your shovel a little bit bigger.

And Ken Coleman, if you go to kencoleman.com and listen to his content, he'll teach you how to get into that career space and figure out how to really do that. But that's what I really want you to focus on at 19. Getting your income up, getting a fully funded emergency that. But that's what I really want you to focus on at 19. Getting your income up. Getting a fully funded emergency fund. But I love it.

I expect to see you in a house by 22. By 21, 22. If you really do these things over the next two years. But I think you're in a perfect place. My little dream is to have a tiny house. So the house I want would be like $20,000 to $40,000. It wouldn't even be. Wait, wait. Hold on, Rachel.

What do you mean a tiny house? Yeah. That's popular. How big are they? They're tiny. Really? They're like 300 square feet. Hold on.

Ayo, hush. How many square feet? Like 300. Listen, man. It's popular within this younger generation. 300. And she can pull it. It's about my size.

I'm living that minimalist life, y'all. Hey, there's nothing wrong with that. Listen, don't you let the world try to tell you what you need to do. It's good that you have your own dreams, you know. But at the same time, I think you move at the speed of cash, like Anthony was telling you. And you having that down payment is big. Here's the other thing. This Subaru, which you need to go out there and give it a hug and tell it you're sorry because she was making fun of it, that might be able to go 200,000, 250,000 more miles.

But here's the reality. It doesn't have to be miles that you put on it. You can move at the speed of cash. And so you thinking of side hustles, you being intentional, you could come up with money to replace that car sooner than later. But don't don't get caught up in it. The car's job is to get you from point A to point B. It's not to try to impress people. And when people get that confused, that's where they end up overspending.

That's where I did my stupid. And so you want to be smart and avoid car payments. Absolutely. Like the plague. It's that important. Thank you for your call. I love it. You know what, Hogan? I want to say this on the show. I want to learn more about this mini house. So if you're listening right now,

I want you to DM me at Anthony O'Neill. Go to Anthony O'Neill's Instagram. And if you're living in a mini house and you're a millennial, I'm going to bring you on to my show. And I want to talk about this. I want to know. I want to know. I want to learn more about it. I want to come.

Let me come on there with you. Yeah, let's do it. Because is it like, can you do you just pick it up? It's smaller than this. And I'm like, OK, I purchased house to resell. Right. So I want to learn more about it. So if you have one, no, don't don't hit me up.

If you're thinking about what I want to know, if you have one, don't hit me up if you're thinking about one. I want to know if you have one. Hit me up on my DM. I'm going to bring you on to the show. And, Hogan, I'm going to make sure you're on the show, too. Let's talk about it. Because if it's 300 square feet, you can't get all your shoes in there. I'm going to tell you right now because I know I can't get mine in there.

I so can't. But, yeah, I'd love to know more about it. I don't know anybody that's living in one. I don't either. And I've got a couple of friends that work at HGTV, and they do some stuff. So we need to get them. All right, that's what... DM AO.

Tell them your DM. How do they do it? Go to Instagram. Hit me up, Anthony O'Neal. Okay. And you'll see my information there. DM me. And I promise you, we're going to make this into a show.

Yeah, we're going to find out more. And we're not going to go crazy, but we want to learn. Yeah. I want to see what's up. And we may have to go out and go to one of these. Oh, let's do that. Let's do this. Hogan and Ayo on the road.

Yes. We are going to check out this tiny house situation, and we're going to find out how they really work. Can you imagine you walking into one? Oh, we have to get that on camera. This is going to be fun. What if we spent the night in one? Oh, I ain't doing that, bro. That's exactly what we're going to do.

We're going to do an overnight camping trip. I love this. All right, listen to me. If you're out there, see, we're willing to talk about whatever you want to talk about. You just got to call us. The number to call is 888-825-5225. Again, that's 888-825-5225. Don't forget DMAO.

If you're out there and you have one of these little tiny houses going on, you can kind of tell us what it's all about. I've been talking to people time and time again, and A.O., we're going to do the blinds.com question of the day real quick. Blinds.com 100% satisfaction guaranteed means even if you mismeasure or pick the wrong

color, they'll remake your blinds for free. You get free samples, free shipping, and the new promos they run every month. You'll save even more. Use promo code Ramsey. Today's question comes from Luke in Colorado. My wife and I are currently paying off her student loans. A wealthy family member of ours offered to pay off the loans for us and have us pay them back interest fee. We started off with $124,000 and are down to $34,000 in just under 18 months. Should we take the loan from them even though we are not currently paying interest on our loans as is?

And should we continue to pay off this debt as fast as possible? I'm going to say pretty much, hey, you guys do it on your own. Yeah, pay this thing off. You've already chopped it down from $124,000 to $34,000. You don't need anybody to try to save the day now. You got this thing. So keep throwing money at that debt.

Keep chopping it down. Get it out of your life. When you get out of debt, you give yourself a raise. Come on now. This is The Ramsey Show. Did you know The Ramsey Show is one of the most popular podcasts in the world? Subscribe or follow today wherever you listen to podcasts.