The Ramsey Show - App - Don't Look for a Mansion When Buying Your First Home (Hour 2)

Episode Date: January 18, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of BMW as the status symbol of choice. I'm Dave Ramsey, your host, Anthony O'Neill. Ramsey personality number one, best-selling author of the book Debt-Free Degree, is my co-host today. Open phones as we talk to you about your life and your money. The phone number is 888-825-5225.

That's 888-825-5225. Kayla is with us in Provo, Utah. Hi, Kayla. How are you? Hi, good. How are you doing? Better than I deserve. What's up? So I just had a question. My husband and I are getting ready to save up for a down payment on our first house. We make roughly $60,000 to $65,000 a year. When I plugged it into your calculator online, it said that with a 40% down payment, we could afford about

a $280 home. However, where we are at, there's really no homes that start until about $300,000. And I was wondering, what are your suggestions for us as we're trying to save for our first house? Well, I think to say that there are no homes in Provo, Utah, below 300,000 would be an inaccurate statement. We are more in rural Utah. Provo is kind of our closest big city. So when I looked at what I've been looking just for the past while just for fun,

and it looks like the ones that are around $250 kind of more are price range or more like your trailer homes and whatnot. Okay. I think you've just begun your quest. You're in the early stages of gathering information. So, yeah, and I do not know uh, extremely well in the sense that I can just quote numbers to you on what they're worth. The average home price in America is $225,000. And that does not trailer homes. Okay. That's the average in America. And the average household

income in America is 59,000. So that's right where you are. I mean, that's, you know, your $60,000 income and you're looking at a $250,000 house, give or take, up to about a $300,000. So I think you're just at the beginning stage of the process. And generally, for your first home, what you're doing is you're looking for a starter home. You're not looking for a mansion. And so I think you're going to keep scratching and digging and looking at a lot of properties, and it may take you a little while to find the deal that does fit your numbers. But here's the thing.

You cannot get in the business anywhere in your money situation of saying, oh, well, it costs that much, and I don't have that much, so I'm going to do it anyway because math doesn't really count in my situation. Math counts in every situation. Math works in California, it works in Utah, and it works in New York City. It even works in Tokyo, in one of the most expensive real estate markets in the world, and you can't afford to live there.

So not even rent with your income. So you just don't get a pass on math because of your situation. So you're either going to watch your incomes come up or you're going to find a bargain and you're going to shop around and learn a little bit more. The interesting thing about real estate is that there's always another one. Yes. Yes. Yeah. And one thing I want to say on this one too, Dave, let's always another one. Yes. Yes. Yeah. Yeah.

And one thing I want to say on this one too, Dave, let's just say that it's a case. You cannot find a house within your budget. Then that means you're not getting a house right now until you can find one that's in your budget. And there's nothing wrong with renting until you either get your income up or until you find a house that is within your means well and you again real estate is that's the most fun about the real estate business is there's always something yeah you just keep scratching around turning over rocks something will run out foreclosure something something that needs a little paint a little work and you know your father-in-law your husband

jump in there and you jump in there and you put a paintbrush on on those i don't know yeah but you you know there's a lot of ways to to get at this and um uh but just to go well you know it's just too expensive and so math doesn't count math counts yeah man you don't get a pass on it hope that helps open phones at 888-825-5225 ryan's in green bay. Hey, Ryan, what's up? Hey, Dave. I just got a question. So my girlfriend's currently in college, going to be a PA, and I finally introduced her to Dave, yourself, about paying off college and all that. But I currently have no debt or nothing. I just bought a house in September. And I'm thinking thinking because this is the

girl i'm gonna marry because i dated her for six years freshman year in high school it's just i'm not gonna pay anything until we're married like you say but do i save to pay that off or do i add more the extra money to my home loan right now all All right, man. Ryan, let me help you out here. Dave may give you a different thing. Talk to me a little bit. How old are you, Ryan? I'm 21. How old is your girlfriend?

She's 21 as well. Boy, y'all young. All right. I like how you're thinking about the future, but I want you to stay with you right now. All right? My thing is I want you to work the baby steps for you. Don't stop the baby steps for a potential down the road. All right. And I'm telling you that because I wish somebody would have told me that when I was your age at 21 years old.

I hear your heart for this young lady. I pray that y'all do get married and have all the dreams that you desire. But there is a strong possibility that it may not work. All right. So what I want you to do is attack the baby steps for yourself. So if you're paying off things on your end, you do that. Okay. And then wait down the road for them. It's good advice. Anthony, let me ask you this. If when he gets engaged, would you change that?

It gets engaged. Will I change that? No, that's just me personally. You wouldn't save up money to pay off the coming debt from the bride? No. I wouldn't. You would? Yeah.

Because in this generation. When you have a date, when you're engaged and it's your fiance and you have a date set and you say, she's got $60,000 worth of debt. I'm going to pile up cash to get ready for that during that six or eight months or whatever before we get married. Now, I'm not talking about vague engagement that we may get married someday and we just call it a fiancé and we really are just not even, you know, I'm talking about a set wedding date.

And, you know, within a reasonable period of time, and I'm going to get ready for that. So when we come home from the honeymoon, because we've often told grooms to pile up or brides to pile up cash. To pay for the wedding. Well, and to pay upon coming home from the honeymoon pay off her debt or or pay on her debt here's the only reason why i would say no but i'm rocking with you i understand what you're saying only because this generation they say yesterday and

then they're they're done tomorrow and they pause their whole life for well then you would take the cash and throw it at the house exactly that's why's why I said I'm rocking with you. Yeah. But if there's an engagement, I would not do it at this stage. Gotcha. Like, in his mind, it's inevitable. She ain't said yes. Yeah. So, not in a... And even after she has, it's not inevitable.

Right. So, there we go. But, yeah, that's your point. All the young people out there looking at me like, I actually agree with you, Anthony. We're taking a poll from the studio audience and Anthony wins. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Anthony O'Neill joining us. He is the author of the number one

best-selling book, Debt-Free Degree. Be sure and check his stuff out at YouTube. He's got a show called The Table that is incredible. New episodes every Monday. And you can check them out on YouTube. The Table with Anthony O'Neill. All kinds of cool guests. Conversations like this.

Yeah, except I've not been allowed on there. This is The Dave Ramsey Show. So this is the time of year when everyone starts setting goals. Going to the gym, quitting smoking, losing weight. Good for you. But what's equally important is making sure your family is taken care of by having term life insurance. Look, I've heard all the excuses, and I'm telling you it's not expensive, it's not complicated, and you need to do this right now. So stop whatever you're doing and go to Zander's website right now and get your family protected. It's an absolute necessity.

Thanks for joining us, America. Anthony O'Neill, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Have you ever made a dumb decision with zeros on the end because you didn't do your research? Yeah, me too. Most people make choices based on feelings or opinions, especially when they're buying a home. But this is a bad idea. And when it comes to the real estate market, feelings are not your friend. Facts are.

So check your facts. Find out what you can actually afford. Research what's trending in home prices. Talk to a reputable real estate agent in your area. Never buy a house without the facts. Text HOUSE to 33789. That's HOUSE to 33789. And we'll help you connect up with an agent you know that's really what we should have told that young lady from provo we should have that she could get with an agent who would help her navigate that market instead of just bouncing around on

websites zillow and everything else trying to figure out what's going on and then declaring that trailer homes are the only thing under 250. A good agent can help her navigate that and go, yeah, but there are these little neighborhood over here and you can move out there and you go 10 miles that way. And they know the nuances of the market and can help move you in and out of those. And that makes a big difference. Thing is this, if you're going to buy a, and you've been through this a couple of times, and I've bought a lot of real estate over the years, but I'm looking at a property right now, a vacation home situation. And what I've done is I have actually – I'm such a nerd. I enjoy the research. And so I go to every neighborhood, look at every house, start looking at the square footages,

start looking at what drives prices in those areas, start looking at the square foot price, look at the features and what is it that's in that market, what's different and what's new, and just learn the way people think when they're doing that market because that's what drives prices. Yes. And then you start to figure out, okay, well, they're paying for prestige in that neighborhood because that's what drives prices yes and then you start to figure out okay well they're paying for prestige in that neighborhood okay okay in that neighborhood they're paying for the access to the beach in that neighborhood they're paying you know and you can see what's the different things are moving around in the market and you just begin but all that comes from options and options and studying and studying and studying and studying so you don't look at

three houses and buy a house you don't go on three dates and get married right right so you need to go and look at some property uh you need and not just online because i gotta tell you man these so many people taking pictures are really good with their picture taking and when you get there you're going what is this the same house? No. Yeah. And you've got to be kidding me. How'd that backyard shrink that much? And so, you know, that camera angle worked on that one. Yeah. Yeah.

So it's just like, that girl's not that pretty. So there you go. Dave, that's a good one right there, Dave. I like that. You just get in there and you go visit the properties and you begin to get you start to figure out what's driving the pricing yes the location the traffic the school what is it this what's what's the what's the big draw that's that's making this property okay well what if i move uh you know 25 off of that off of that issue and i move over here, maybe schools aren't important to you.

Maybe you're retired. Yeah. You know? My shih tzu does not need to go to school. Right. So I'm pretty good on school systems. I couldn't give a rip less on where the school system is from my personal residence because I'm not going to be having any kids go to school there. So, you know, that's not a driving point.

So if school's driving the price up, then I'm probably not in that neighborhood. Nope. Yeah. Unless there's some other reason for me to be in there. But, I mean, that's not my motivator is my point. So you just start to look at things through that lens and do your dadgum research. Yeah. And if you know you're not good at doing the research, that's why you reach out to one of our pros and they will do all the research for you well and they'll take you around i mean

you gotta you you need to get your arms around what's happening yes and the pro can guide you in doing that i don't want somebody else to do your thinking for you exactly but but the uh yeah you need to you know you need a test drive i mean same thing with a car you don't just go buy a car you've never driven absolutely i not. I mean, never driven that model. Now, if I've driven that make and model and everything else, and I know the car inside and out, then I don't have to drive it to buy it. I mean, I understand. I'm fine. Just deliver the thing.

It's okay. But if you've never driven a pickup, that pickup, that particular model, don't go buy one until you've driven it. I mean, that's common sense yeah and yet people get all wired up and fired up emotionally and jump on stuff and start making all these assumptions about well it's just the way it is in our world you don't understand you don't you're a boomer you don't get it yeah so um but turns out i do go figure kelly's with us in seattle hi kelly welcome to the dave ramsey show hello hey what's up so my husband and i are in baby step number two um we uh we have a total of

three mortgages so we have the home that we currently live in, and then we have two rental properties, both with mortgages on them. And one of the homes is older, and we're trying to debate on whether or not we sell that one. Okay. Why did you tell me it was older? Does that mean you, like, probably wouldn't care? It would be like, it's not the one you would keep because it's probably not a great property over the next 10 years. Is that why you told me it was older? Well, as soon as we committed to the baby steps and setting aside, we had the savings in there.

Everything started breaking. That's like the law of Financial Peace University. As soon as you start the class, your transmission goes out. I mean, it's just the way it is. It really is. That's what happened. I'm sorry. Well, so the question is, what's the house that you're thinking about selling worth?

About $325,000. Okay. And what do you owe on it 127 000 how much debt do you have um so we are um we have 20 000 we owe on our truck and 26 000 we owe on our tractor okay so 50 um since no yeah since november first we've so far we've paid off fifteen thousand dollars that was in um credit card debt okay the 350 000 old house where stuff's breaking all of this discussion aside if you just put that house in your mind and you go 10 years from now is the 10 year now from now uh kelly happy with the current kelly for keeping that house i don't know i have it was it was my husband and i got it

uh i have a lot of emotional attachment to it that wasn't what i asked what i asked is 10 years from now are you going to be really feeling wise smart happy because you kept this house if we stay on track yes okay then i'd probably keep it and just work your way through okay but i mean okay i've owned i've owned things that i look out into the future me and i'm going the future me thinks the current me's stupid if i don't get rid of this thing you know i mean you can kind of look at it and think that right and that might not be true on this house and it sounds like it's not so that's cool but i mean i look at some of the stuff and i'm going i'm just gonna

throw that away why have i been storing that for two years? You know, that just needs to leave. I need to have a minimalist moment here and start cleaning out crap. You know, because I just, we're all pack rats in our lives. And you can do that with big items and you can do that with investments. And you can do it with all kinds of things. And just go, just because you've got it doesn't mean you have to keep it. I agree. Look into the future and go.

But it sounds like that the future you's happy with you for keeping it. So I'm fine with that, too. That's an okay answer. Then you would keep it and you would go forward. Now, it sounds like she's happy keeping it because of the emotional tie, not because of the financial investment. I think she's really tied to this house emotionally. Okay. Well, that would be a mistake then if that's the only reason.

But I'm guessing, too, that it's probably, I mean, it's a $350,000 house. It's not a bad house. Yeah, yeah, yeah. Not a bad house at all. Yeah. So this is not a slumlord here. No, it's not. So I'm thinking the thing's got to be making some money.

I'm just not sure. She's got good equity in it, too, so. Yeah, yeah, yeah. I don't know equity in it too, so. Yeah. Yeah. I don't know. I'm kind of counting on her to manage her emotions and her financial by looking into the future. That was my play there.

I don't know if it worked, but that was my play. This is the Dave Ramsey Show. free at last it was one of the best decisions of my life that's what Neil M. said about using Timeshare Exit Team to get out of his timeshare after the resort refused to let him out. Listen, I've said it before. If you've tried selling your timeshare and can't, if the resort refuses to take it back, call Timeshare Exit Team, the people I trust. Call 844-999-EXIT or timeshareexitteam.com. Anthony O'Neill, Ramsey personality, is my co-host today here on the air. This is the Dave Ramsey Show. In the lobby of Ramsey Solutions on the

debt-free stage, Roger is with us. Hey, Roger, welcome to the show. Hi, how are you? Better than I deserve. Good to have you. Where do you live? San Francisco. Oh, wow. Bit of a trip over to Tennessee. Yeah, but I definitely have to come out and try out these fresh cookies that you kept mentioning on the show. Well, they are a pretty good bait. They will lure in lots of people, I've noticed. Yes. So you're here to do a debt-free scream. How much have you paid off? $51,092.

Mm-hmm. Mm-hmm. And how long did it take you? It took me 16 months. 16 months. Way to go. And your range of income during that time? About $76,000 to $93,000.

Very good. What do you do for a living? I'm a health and safety consultant for a workers' compensation company. Oh, very good. Okay. So what kind of debt was the $51,000? Yeah, so I had about $6,000 left on my car, about $7,500 from a debt consolidation from previous credit cards. And then the rest of it actually was all spread amongst like five other different credit cards.

So one of the main reasons why I want to come up here and do this debt-free stream is because I didn't really find a lot of other people that didn't have, you know, that weren't working to pay off debt that wasn't any student loans. So, you know, I felt a little bit embarrassed that, you know, a lot of that wasn't student loans because everyone else I've heard had it. But, you know, I felt a little bit embarrassed that, you know, a lot of that wasn't student loans because everyone else I've heard had it. But, you know, I was just a really bad consumer. But it's great to finally own up to it and, you know, finally have it all paid off. I love it.

Well, this is the completion of the healing. I love it. Well, congratulations, sir. How old are you, Roger? 33 years old. And what was the hardest thing throughout this process? For me, the hardest thing was just saying no. So many of my friends just wanted to keep enabling me, and I'm not the kind of person that likes to say no. And so that was just the biggest part.

And then really the other second part thing was really just trying to build up momentum and sticking to the budget, I think, was the really difficult part. So what happened that caused you to decide to do this? What was the process? Yeah, so I basically had my I've had it moment. And so being in San Francisco, I actually had the opportunity to interview for something in Los Angeles. At this point, my finances had kind of caught up to me and I was kind of starting to feel the weight of it. And so instead of shelling out for a flight, I decided to take a bus. And then I said that I would rent a car to go to the job interview, come back, and then take the bus back home. So I took the bus.

I got to the rental car. But I noticed that in my wallet, I only had the credit card that I had already maxed out. And so going to the credit card company, I knew that they weren't going to accept that credit card because it's maxed out. And so when I got there, I told them that I didn't have any credit card or any money in a debit card to possibly do the rental. And then they swiped it, and then it said denied. And so I was kind of in a pinch. And so luckily, my Uber app still had my other credit card that wasn't maxed out saved on there. And I was able to do the job interview and then come back. But I was just so embarrassed.

And I felt like I needed to do a change. And so that night, when I got back, I added up everything. And I found out just how much actual consumer debt I had. And I was really scared. And so I had Google search debt consolidation like how to get out of debt. And obviously, you know, Dave Ramsey shows up. And so that's how I started that journey 16 months ago. Good for you.

Well done. Well done. Yeah, there's a lot of emotions that are gross. Embarrassment might be one of the most gross ones. I can't stand being, I can't, especially when it's my fault. That's just awful. Yeah, and I've been right exactly in that situation where you get, you know, the card denied and you can't move around. You're stuck.

And, man, that broke feeling. And so I was traveling a little while back and we're staying at this really nice resort. And I walk up the counter, and my card had apparently hit the algorithm, and my debit card had hit the algorithm for fraud. And so the bank had shut it down, unbeknownst to me. So I go up there, and I can't check into this hotel. Now, I've got plenty of money. But that activated these emotions down inside. Remember when I was broke and the embarrassment of not being able to do that. Man, I got so mad.

Oh, yeah. And all it was was those old emotions from being broke and being embarrassed were down inside of me and um i had to i had to call the banker back and apologize after i called her the first time so about my dadgum card getting cut off for no freaking reason and and it'll leave me stranded out here so yeah it's the same thing that that'll get you going and you had you definitely had a never again moment didn't you definitely yeah very cool so you found us on, go ahead, I'm sorry. No, go ahead, Dave. You're fine.

Okay. Thank you, Dave. So you walked through all this embarrassment. You paid off all this debt. How do you feel now? Like, I'm just so curious about that. Like, you have a lot of energy on stage right now. So I'm like, how do you feel?

What's next for this young man? You know, it's still a very surreal feeling um you know it's um it's really weird like i think um one of the things that gets to me sometimes i'll hop in my car start driving to work uh and then i just think like i actually own this whole car it's hard for me to just embrace that idea you know like this whole thing is the reason why i have like a positive net worth right now. Instead of knowing that the bank is going to be asking me for more money, being upside down or something like that. But then also, the other thing is

it's very true what you guys mentioned, is that it feels like I have a raise now, because now that I've learned to budget, now I know how to plan for my money. I'm not rich, obviously, but I definitely feel like there's a lot more than I can afford now. I know that, Dave, you say right now you're better than you deserve, but right now I feel like I can afford what I deserve now.

And so that's really how it feels right now. It's a sense of power. That's very good. Good for you. I like that statement. We may need to steal that. I can afford what I deserve. I like that.

And if you can't afford it, you don't deserve it. Definitely. Yeah, that's good, man. Well done. Yeah. Well done. So the credit cards are all cut up. Mm-hmm.

Will you ever go back in debt? Oh, no. It was great because I planned this whole trip with my debit card. And then also I made sure to go dollar to get our car rental, and I did it with a debit card. And then also I made sure to go dollar to get my car rental and I did it with a debit card. So it felt really nice to know that I was still secure with a debit card, just like you said.

And when you go into the Nashville airport with dollar, with us endorsing them, they definitely know what's going on. They got it figured out for sure there. So well done, guys. Well done. Man, I'm proud of you. That's just beautiful.

We've got a copy of Chris Hogan's book for you, Everyday Millionaires, and that's the next chapter in your story for real. And we're very well done. Proud of you. Yeah. Thanks, Dave. If you don't mind, I'd like to thank my biggest cheerleader, actually. Who's that?

So, my biggest cheerleader is my now-fiancee, Monica, who made the trip all the way out here to Nashville with me. All right. It's actually funny because I was maybe like a year into the plan, and I was starting to go Dave-ish instead by creating a sinking fund to actually save for her engagement ring. And then when she found out about that, she's like, what would Uncle Dave say? And then like, okay, I guess I'll just throw that actually towards my debt.

And that's the reason why I was able to get out faster than I originally planned. I like her. Yeah, definitely. You need to teach other young ladies like yourself. Yeah. And then, you know, the biggest thing about her cheering for me was we were only together for maybe three or four months before I really came out to tell her about just how much debt I actually had. And knowing that she was willing to put off a lot of that honeymoon feeling of spending money in the early goings of a relationship and her sticking with me through that to where I am now today, I just really want to thank her for you know not having those fancy dates that most other people might usually have so yeah and in san francisco they're not cheap either oh no

well done well done sir proud of you good work good work all right roger from san francisco 51 000 paid off in 16 months making 76 to 93 everything. He was normal, and now he's weird. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! Way to go, man.

Way to go. That's awesome. This is the Dave Ramsey Show. We'll see you next time. Anthony O'Neill, Ramsey Personality, is my co-host today. I'm Dave Ramsey. Open phones at 888-825-5225. Brian is in Syracuse, New York. Hi, Brian. Welcome to the show, New York. Hi, Brian. Welcome to the show.

Hey, good afternoon, Dave. Thanks for giving me some of your time here this afternoon. Sure. What's up? I got a question for you. Luckily, my financial advisor was already on a similar mindset as yourself before I started listening to you. My wife and I recently had purchased a home in 2020, and we also had a baby the month prior to that. So we were already on the debt snowball method. We have about $119,000 in what I'll refer to as bad

debt, student loans, and vehicles. And then our home mortgage is about $137,000 remaining at the moment. So my question to you is we have about $10,000 in savings. Do you think, and you know, with the debt snowball method, a thousand of that should be going to savings and nine towards debt. My wife has a little apprehension about that. Should we be putting 9,000 to 10 towards our debt or should we keep that to the side now that we have a baby? And then the second tier to that question is with our tax return coming up now with a home and a baby, hopefully a good return back. Should we also be putting that all towards student loan debt? I mean, absolutely, Brian. This is Anthony. And I understand, you know, both you and your wife's hesitation and why, but Babyset 1 was

not made and Babyset 2 was not made to be comfortable, 1 and 2. We want you to be uncomfortable so you can get out of it quicker. And so, yes, I was in your shoes. I didn't have six figures of debt, but I had a lot of debt. And I put all of my savings towards it. I put all of the extra income towards it. I even put my tax return towards it as well. I mean, what you'll see is that when you really get gazelle intense, when you really get focused, you all would get out of it much quicker and get to your baby set three, which is three to six months. So I would absolutely put all of your money, all of your extra money

towards it. Now, let's say something happens to the baby and y'all need to pause that. That is totally okay. We want you to take care of your family and protect your family. But at the same time right now, if everything is going well, yes, attack it fiercely and put all the extra money towards it. What's your household income? I would say our household income is around $130 to $150. My wife's a teacher, and I work in an outside medical cell. So in the last 12 to 18 months, my income's increased about 30% now that I'm actually in the industry a little bit longer and I've built a client base.

So, you know, getting back to my initial comment, about a year and a half ago, we started the death snowball method with my financial advisor. Then I started listening to you, oddly enough, right when we had our baby. Now that I work from home, I had SiriusXM on and a lot of his mindset aligns with yours.

We already had term life insurance. We were already on the death billball method. But, you know, now that I've got more income, we have more savings, which is great. So you said your total consumer debt on the car and the student loans, whatever, was what, 119? Yes, we've got two vehicles and then our student loan debt combined. What do you owe on the vehicles?

The vehicles is about 18 and 15, so about $33,000 to $35,000 between the two of us. Okay, that's good news. All right. Well, here's the thing. I try to do just big math, big chunk math, I call it, and say, okay, make $130,000 heading towards $150,000. If I pay $60,000 of that towards debt because I'm unbelievably intense and focused, then I'm done in two years. Right. And I just look at it. That helps me to get my head around, okay, I'm not suggesting that you walk around with a baby

and raise a family with $1,000 in the bank as your way of life over the next decade, but as a short-term mechanism to be all in, to be committed beyond belief. And a little bit of that is what Anthony says is the fear of not having that money. But $10,000 is not going to help you anyway. I mean, that's a small emergency, too. So, you know, it'll help more than not having it but it's um yeah when you can see that we're going to do this we're going to do this with great focused intensity and it's going to be 24 months and we're going to be done or it's going to be

19 months and we're going to be done or whatever the number ends up being then you can go okay i can hold my breath that long and then when we don't have any payments but a house payment, oh my goodness. Then you put that emergency fund in place and an eye blink. Doesn't take time at all. Because you're used to living on nothing. And you're used to pouring everything on that debt. And you turn and pour it on to that emergency fund. That maybe step three usually goes really fast for people because they're so, they got

so much momentum. Yes. And they're they've been living on nothing. Coming off that high of paying off your debt. Now you want to see all that money in your savings account. I mean, it's it's it's amazing. Yeah, that's very good. Very good.

Good job, man. Well done. And congrats on the new baby. Zach is in Marion, Illinois. Hi, Zach. Welcome to the Dave Ramsey show. Hi, Dave. Just had a quick question for you.

Sorry to listen to you about a month ago. My wife and I are on baby step two. We have about $21,000 in debt that I should have paid off by late summer. Good. But my bigger issue is we made the mistake about six years ago. My wife and I bought a manufactured home and actually put it on some land that we owned. At the time, it seemed like a good idea, but now that I'm a little older realizing that it was probably a terrible idea and it's losing value every day I'm in it. So I just didn't know if I should move now or stay a little bit longer and pay it off and then move or what you're taking that might be.

So would you build on your land if you got rid of it? I think I would just sell the land and the home package deal. And just start fresh? Yeah. Okay. All right. That's fine. Well, I mean, the bottom line is what's the thing worth today?

About $100. Including the thing worth today? About $100,000. Including the land, right? Correct, including the land. What's the land worth without the thing on it? Probably $12,000 to $15,000. Okay, so this is an expensive trailer. Yes. All right.

About a brand new and $15 All right. Yeah, but I bought a brand new in 15. Okay, yeah. So you got like $70,000, $80,000 worth. Okay, so 10 years from now, that $70,000, $80,000 is not going to be worth $70,000 or $80,000. Agreed? Agreed. Versus if you had the exact same amount of property in a traditional home, it would go up in value instead of down in value.

Agreed? Yeah, that's my main reason for wanting to get out of this. I just now realized that. So really delaying it or getting it paid off just means you're going to lose more money. So, I mean, there's no emergency, nothing's on fire, but I'm going to start talking about having this thing out of my life in the next 12, 14 months. That was my plan. I just wanted to kind of get your take on it because, like I said, I should be on Baby Step 2 this summer.

And then I don't have any other debt. Yeah, absolutely. I mean, I'm not a sn snob this has nothing to do with i hate you know trailers or something like that that's not the point or mobile homes or manufactured housing whatever euphemism you want to put on the thing what i don't like is owning things that go down in value when i have an alternative to spend very similar dollars into something that goes up in value and so that that's what it comes down to. And so people in mobile home, what do you hate us? In the mobile home business, I don't hate you.

I just think your stuff goes down in value. I mean, it's pretty simple. And so, you know, it's, I don't want to, and I'm not going to tell people to buy stuff that goes down in value. Yeah. And a friend of mine owns a huge mobile home business. And he still wouldn't do it even if you pay cash for it, right, dude? Yeah, it goes down in value.

Yeah. I mean, it goes down in value. So why not pay cash for, you know, something that goes up in value? That was very big, where I grew up at in the country. Oh, absolutely. They're everywhere. Me too. Me too.

And so it's not a snobbery thing. It's just a matter of mathematics. And it just goes, one goes up in value, one goes down in value. Choose A. You know, it's choose the right choice. And that's what he's doing. That's all he's talking about. Yes, sir.

So it's not a matter of we're angry at someone like that or something. But, you know, and it's honestly cheaper to rent. It is. Than it is for the thing to go down in value and pay payments on it. Like a car you sleep in. This is the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows.

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