The Ramsey Show - App - Don't Settle for Just Doing "Okay" With Money (Hour 3)

Episode Date: September 14, 2018

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Live from the headquarters of Ramsey Solutions, 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. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Oscar starts off this hour in Lubbock, Texas. Hey, Oscar, how are you? I'm doing well, Mr. Ramsey. How about yourself? Better than I deserve, sir. How can I help? Yes, so I'm 23 years old, and I'm going to be getting married in about a month. Congratulations. Thank you. Thank you. And my fiancee just graduated PA school.

Yay. She has a job lined up. Awesome. Yes, it's awesome. She'll be making about $120,000, I think, is what we're looking. And she wants to buy a house. I, on the other hand, bought your book about a month ago and dealing with about $25,000 worth of debt working on that. I don't think it's a good idea right now. We don't have very much saved up. She is debt-free, which is good.

I'm just, I don't know if buying a house right now is good or not. Just trying to get some direction, I guess. And she's how old? 23 as well. Both of you are 23 years old. Yes, sir. Well, to start with, let's just tap the brakes and go, you're 23. You've got time.

Right. I mean, it's not like you're going to have to make a decision in the next 20 minutes to buy a house or you have ruined your whole freaking life. I mean, that's just kind of crazy, right? So we know that that's not the case. And what I will tell you is this, having coached people. Now, I've got to tell you, too, I love real estate. And I completely agree with her that you ought to buy a house.

I just don't agree with her timing. Okay. Okay. So what we tell people to do, especially young couples just getting married, is clean up all of your debt first, have your emergency fund of three to six months of expenses, and then save a good, solid down payment. And you're going to be making a ton of money. What do you make?

Right. I don't make anywhere near that. I honestly, about a month ago when I bought your book, had just been playing around. And so after I read your book, I realized that I need to grow up. So I am a handyman working on my buy this house, and you need to pay cash for that as you go along. That's a good plan, too. I like all of that. And so you're focusing on your future career. In the meantime, you've got a little income to add to this $120,000. So she's making bank, and that's great.

So I will tell you this. The Bible talks about in the Old Testament that the young men in their first year of marriage did not go out to war. They were not required to fight in battles in their first year of marriage, that they were to stay home and pay attention to their wife. And I know that's the Old Testament, which is just full of weirdness and everything else, but there's kind of a good principle there that says, hey, the first year of marriage can be your roughest year of marriage if you don't completely focus on each other as a part of that. So I always tell folks, when you first get married, get out of debt, build your emergency fund, and wait about a year to buy. I actually think all three of those things are going to kind of correlate for you guys.

Okay. I think about a year into this, you're going to be figuring out what you're doing for school. That's going to be settled down. You'll be settled into the marriage good. And I always just laugh and say, you're going to make better decisions after you've been married for a year on the type of house to buy, where to buy. And the joke line is that it takes a year of being married to know how close to your mother-in-law to buy but you know that that's just everything seems like it's all gonna work out right now and a year into marriage you're gonna go i ain't living nowhere near that woman but uh yeah or i love her i'll move in next door i don't care it might be the other way around but you know but uh you know but usually you know a lot more about each other,

and you'll make a wiser decision on a purchase of huge size like this because of your knowledge of each other will be more in-depth after a year of marriage than what you think it is now. It won't be substantially different, but it'll be different than it is now. And so I just think you're going to make a much wiser decision at that point, and you're going to be in a much more solid financial footing at that point. So

I agree with her, yes, you need to buy a house, but I would say it's about a year out and debt-free with your emergency fund with your down payment before you need to execute on that. Do you think you can make that sale? Yeah, yeah, absolutely. Okay, you think you can make that sale? Yeah, yeah, absolutely. Okay, you think you can get her to do that then? Yes, sir, absolutely, no problem.

Okay, and you've got a copy of the Total Money Makeover book. Yes, sir. Okay, do you two want to go through Financial Peace University as my wedding gift to you? I would love that, holy. Would she go if I give it to you? Yes, absolutely. She will be there. Okay, cool.

You hold on, and I'll give that to you as our wedding gift. We're honored to have you in our audience, sir. Ellen is with us in Norfolk, Virginia. Hi, Ellen. How are you? I'm fine, thanks. I'm calling because I listened over the weekend, and I believe you told a caller that you wouldn't like to be invested 90% in real estate.

I don't know if I heard that correctly, but I thought that's what you said. And since I'm kind of in that shape, I wondered what you'd recommend for me. I don't know if I said that or not. It's possible I would have. I just like to be spread out on my investments. I don't like to be real super heavy in one. And if I added up my net worth right now, I would not be 90% in real estate. But I've got a lot of real estate.

And it doesn't bother me to be heavier in real estate than in stocks. I'm much heavier in real estate than I am in mutual funds. But part of that is I've got great buys on the real estate, and it shot up in value. It wasn't that I necessarily, quote, put that much money in, unquote. So that's the thing to think about here. But I wouldn't panic about it. It's just a matter of if that category of investments goes sideways,

I don't want to lose a bunch of stuff, you know? Is it all paid for? Yeah. Yeah. Oh, that's great. All paid for. And how much real estate have you got? How much money have you got tied up in real estate?

About 1.4, maybe. Good for you. Way to go. Way to go. Well, make sure you keep a strong cash position, because as you know, real estate always needs repairing. It always needs odds and ends done to it, right? And there's always a chance of it being vacant and different things. So you always have to be really good and liquid when you've got that much in real estate.

But you've done really, really well. I wouldn't panic about it. I just ask myself, you know, the question of do I want to be, you know, like that heavy in one category of investing? And if I said that that and i don't remember what i said i've done so many thousands of hours of radio i i generally know if something's way off principle of what i said but i don't think that you know that doesn't qualify there so i i um i i wouldn't have taken that as a dave ramsay principle never be there i just was probably voicing a concern to say man i'd be a little bit worried if I'm really

super heavy in only one kind of investing. And I like the power of the diversification, the lowered risk that diversification gives me, and that's always something I'm looking for, is lowered risk. I'm not a big risk taker. I don't like a lot of risk. I've been broke before and that'll kind of keep you from not taking risks. That's why I don't borrow any money. It lowers my risk dramatically.

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We're glad you're here. Open phones at 888-825-5225. Shannon is with us in Phoenix, Arizona. Hi, Shannon. How are you? Hi, I'm doing good. How are you? Better than I deserve. What's up? Well, I was calling because I'm currently in baby step number two and in the process of kind of getting a handle or a grip on all of the different debts that I have, which is primarily student loans.

One of the student loans that I have been paying on for the last two years has been in collections. And in doing kind of some of this investigating to kind of figure out where I'm at on things, in speaking to them last week, I found that I didn't sign anything with them when I originally tried to get this loan out of its default status. And so I'm trying to figure out, should I try to consolidate that particular student loan so I can get it out of collections, or do I just keep it in the snowball, but it's higher in my snowball, or do I just keep it in the snowball but it's higher in my snowball or should I move that up in my snowball so I can just get rid of it and have out of the hands of

collectors? Are they charging you collections fees? Well the difficult thing is I'm sure you can imagine calling them and trying to get any information about what I've paid other than like what my balance is has been really difficult. So I've been trying to figure out what's been going to principal, what's been going to interest, and what's been going to collection, or excuse me, to fees. How much do you owe them? What's the balance? About $15,000.

And what's your household income? $60,000. Okay. And how much other debt do you have, not counting that? Not including that, probably about $45,000. Okay. And how much other debt do you have, not counting that? Not including that, probably about 45. Okay. So you're going to be a couple years anyway dealing with this. Okay.

Yes. Well, if you run a consolidation on it, that's fine. All it does is firm up the terms, and you're getting better service while you're doing the two years. Make sure you do not move it from a fixed interest rate to a variable rate when you do that. And make sure you get a better interest rate, too, when you do it. But if you can do that, then I would. So I should keep it where it's at? No, I mean, you can move it as long as you get a better interest rate and you get a fixed rate.

But your main reason for moving it is just so you can get a better gauge of what's really going on with it because you're getting crummy service from the collector that's what you're saying and so if you want to move it for that purpose that's fine but keep in mind you're only doing this for two years because you'll be out of debt in two years you should be or quicker uh philip is with us in pensacola, Florida. Hi, Phillip. How are you? Hey, Dave. I'm great. How are you?

Better than I deserve. What's up? Well, I just wanted to call. I just recently got hired at a university. I was a public school high school teacher. And so now I have this option of I was on the pension plan, and now I have the option of the SussORP, you know, being with a state university, and just kind of wanted some guidance on if I should stay with a pension, go to an investment, or go to the SUSORP.

Go to the, what was the third one? It's called the SUSORP, State University System, the Optional Retirement Program. I have no idea what's in that in Florida. I mean, there's 50 states, and so I can't keep up with a lot of them. So basically it's just the university will invest 5.14, and then plus the 3% that's mandatory. And then once I get out of Baby Step 2, I'll be able to also invest an additional 5.14%. And what is that invested in? You can choose.

It's just mutual funds. Okay, so it's like a 401K then. Yeah, I guess there's a 401K and then a 403b yeah i'm really not familiar i guess on the difference basically it's they're putting the money in your name you're putting the money in your name and you're controlling the investment options including mutual funds as your investment options and it's growing tax deferred and they are matching five percent okay that doesn't sound bad at all if that's what you're describing. No, because once I'm out of Baby Step 2, it's almost like 14% being invested.

Yeah, yeah, I mean, that would get you up there. And you've got a mandatory three, you said, that you've got to do anyway. So, yeah, I'm probably looking at that. The thing is, I want you to control it, and when you die, the money is yours. It's your heirs, and you control the investments that it's in and um you know it's not it's not a payout it's a lump sum that you build and the balance is building and if that's what's going on here then i would do that and so um you know i but you got to make sure you're in control of the investments and the money is yours, meaning you're vested in it. If you were to leave the state or leave the university, can you roll it to an IRA?

Take it with you. That means you're vested. And if all of that can be confirmed, that sounds like, in general, the best direction to go, assuming your options that you can invest in and good mutual funds are reasonable. Brian is with us in Ann Arbor, Michigan. Hey, Brian, how are you? I'm great. Thank you for taking my call. Sure.

What's up? Just a little background. At first, I'm 22 years old, and I currently put 23% into retirement accounts. I have a 401k and a 457. I have a 3% match and 4% automatic that my employer pays. I'm up to $37,000 between the two of those. Cool. What's your question?

I have an $8,000 truck payment. That's a total. And a couple of small credit cards on top of that that I can pay off in probably the next three months. Should I decrease the amount I'm investing to pay off the truck faster, or should I just sell the truck? And what's your household income? Before tax, about $42. Do you like your truck? Yes. The thing that I need it mostly for is I'm in the Midwest, and I work at a 24-7 facility,

so snow cannot stop me from getting to work. Gotcha. Cool. All right. Well, it's an affordable truck in the sense that it's not that expensive a truck based on your income. It's something that you can get paid off reasonably. What we teach people, Brian, to do is to save $1,000 is what we call baby step one, your very first goal. Your second goal is to stop all investing, all investing temporarily while you clear all your debts except your home. Pay off all your debt except your home in baby step two using what we call the debt snowball.

And that's listing your debts smallest to largest, paying minimum payments on everything but the little one, attacking the little one with a vengeance. That would be the credit cards. And then when they're gone, then you attack the truck and pay it off as fast as you possibly can. If you weren't doing any other investing and all you were doing is focusing very, very intensely and intentionally on those debts, you would be debt-free in, I don't know, six months or so. And if that happened at that point, once you're debt-free, then you start your emergency fund. You go back to the $1,000 account, raise it up to three to six months of expenses.

Once you've done that, then and only then do you restart your investments. And I would put 15% of my income, no more, 15% of my income into investments in 401ks and get the matches and that kind of stuff at that point, and then I'd pay off my home. And that's where you'll be. If you don't own a home yet, then I would save up and pay cash for a home. And you're well on your way to doing that. The good news is you've started really early and you're thinking about this. But that's how we teach people to do it.

So I would stop all investments until I got these debts cleared is the answer to your question. Hold on the line. I'm going to give you a copy of our book, The Total Money Makeover. It'll walk you through those baby steps, exactly what to do, when to do it, why to do it. You'll understand what I'm driving through, why we're doing it. You'll get the motivations behind it and the tactical steps to do it so that you get there. So, hey, good question, man. We appreciate you joining us.

Open phones at 888-825-5225. Thank you for being here, America. We're glad you're with us. Open phones. This is The Dave Ramsey Show. I get asked all the time, when in the baby steps is the right time to buy life insurance? My answer is typically now. Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs.

That's when they're at the highest risk. And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives, as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance, since it's the most affordable way to get the right amount of coverage and not break your budget. Go to Zander.com or call 800-356-4282.

These are the guys I personally use. Term life insurance is inexpensive, and your family needs this no matter where you are in your baby steps. That's Zander.com or call 800-356-4282. Zander.com. In the lobby of Ramsey Solutions, Anthony and Crystal are with us. Hey, guys. How are you? How are you, Dave?

How are you doing, Dave? Welcome, welcome. Where are you guys from? Springfield, Missouri. Cool. Welcome to Nashville. And all the way here to do your debt-free scream. That's correct.

Yes, sir. Love it. How much have you guys paid off? All right. I'm the nerd, so $74,738.64. Very good. How long did that take? Just,738.64. Very good. How long did that take? Just a hair under 36 months.

Very good. And your range of income during that time? $79,081. Okay, great. What do you all do for a living? I work at a freight company overnight. I'm a union carpenter. Good.

Good for you guys. So about $25,000 a year for three years. Nice job. Well done. Thanks. Thank you. How's it feel to be debt free? Awesome.

Freeing. Absolutely. What kind of debt was the $75,000? A very expensive piece of dirt and our house. What kind of dirt? What are you talking about? Land. You just bought a piece of land?

Yeah. Okay. Did you keep it or sell it? We still have it. Okay. Very a piece of land? Yeah. Okay. Do you keep it or sell it? We still have it. Okay. Very good. Good for you guys. Fun.

So what happened 36 months ago that put you on this debt-free journey? Well, like everybody says, it goes back a little further than that. About 11 years ago, a friend from work gave me all the financial piece CDs, and I listened to him, and I was like, I can do some of this. So we paid off the cars and just kind of hee-hawed around and it wasn't working. You can't sort of do it, can you? No, you can't. So I got laid off a few years after that and realized I couldn't retire in my early 30s.

And so I decided I'd go back to work because I had big dreams and plans. So I went back to work and wasn't making any progress. So then I picked up your book. And I just got sick and tired of the hamster wheel. Gotcha. Okay. And so you go in and sit down and talk to Anthony and tell me about that. He was very skeptical until each milestone we conquered.

And he's like, oh, we'll never be able to do this. And then we did this. We'll never be able to do that. Then we did that. And then I just gained his trust that way. Yeah. The whole idea of just buying in wasn't that big a deal, but it was in the beginning kind of hard staying committed. Sure.

And that was the toughest part for me. The proof was in the pudding for you, though. That's correct. So, Anthony, do you remember at what stage in those 36 months, do you remember the debt that when that one fell over, you went, all right, I'm in? Well, I can't say one certain fall, but we had this chart there right there by our refrigerator we had to look at every day.

And, of course, she was all, you know, she's the ringleader here, so she took care of all of it. And, you know she's a ringleader here so she took care of all and then you know i just gradually just kept seeing this thing go and finally i just one day wanted her to get something to drink or something i just looked i'm like man we are really doing this wow and then from that point she didn't have to i didn't buck her no more that's good very cool so uh crystal do you remember when that was, when he kind of had that moment? Yeah. It didn't feel like a fight anymore.

But, I mean, how far into the process were you? I think we knocked off the land really quickly, and that was 18 months in. Or, no, I'm sorry. That was six months in, 18,000. Right. And there was a lot of overtime that he put in. So I think when we conquered that one i think he he was all in that was like okay now we can do this okay good very cool good for you guys well done so what do you

tell people the secret to getting out of debt is anthony um buying into it and and and believing it you know you've got to you've got to be all in with it okay and believe it and it will happen and it'll surprise you how quick it happens yeah i mean three years is a long time and it's not a long time right exactly yeah what about you crystal what do you tell people that's key to getting out of debt is obviously i budget everything big budgeter um i think we live really frugal lives so we don't buy anything new and um besides that it's just having a big enough why i that for a long time i we just did pretty good and i never really thought that we needed to go further but you had said a jim collins quote i think it was the biggest enemy to success is not failure it's doing okay and i was

like we're doing okay and that's why i haven't done more so apathy will kill you yeah it really will that's um very cool well well done you two and you brought the kiddos with you what are their ages and names marina is five and libya is four all right very cool pretty young ladies very good now have they been practicing their debt-free screen yes all right all the way from missouri huh? Yeah. Very cool. Good for you. All right. Well, 75. Oh, we got a copy of Chris Hogan's book for you.

Oh, cool. Retire Inspired. Thanks. It'll be the next chapter in your story. I want you all to be millionaires. Yeah. And I want you to be outrageously generous along the way as well. We're proud of you.

Well done. Thank you. Very well done. You're heroes. Anthony and Crystal, Marina and Livia. $75,000 paid off in 36 months, making $79,000 to $81,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

This is how we do it right here. I love it. Well done. Well it. Well done. Well done. Well done. Excellent. And that's fabulous. Good job.

Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Leanne is with us in Indianapolis. Hi, Leanne. How are you? Hi. good. Don't kill me, Dave, for calling back,

but I've been trying for two months to call back since I called you two months ago. I called for my husband, and I totally screwed up the call, he said. Okay. So tell me about it. I called. What's that? So tell me what your question is. Okay.

So I called because he's a new grad from law school, and he's working in his first job as a lawyer, but it's a really crappy job as a lawyer. And he's had an opportunity to get back in the pension plan as a firefighter because he's already had nine years on as a police officer. And I didn't tell you all the perks with that you just said no i know what the perks are no oh all of them okay well he also has a hundred thousand dollars in student loans so and they would pay that off in one fell swoop

time they'll pay it off in what period of time no 10 years so he'd have to pay on that he'd have to pay everybody gets a 10-year deal nobody wants a 10-year deal to get out of that so what happened to him being a lawyer he's still a lawyer he's i know why did he give up on being a lawyer and decide to go be a fireman because we live in Indianapolis and some of the lawyers don't make very much money and some do that's life only make around right well some of them only make around 150,000 a year and some of them make 300,000 a year yes if you if you're in the top of your class and you're you get on a top has nothing to do with being the top of your class it has to do with being able to practice law in a way that's profitable.

Right, but it's really hard to get a job, and he's working at the prosecutor's office right now making, like, no money. I know. And he's working on the weekends, too. So he's working seven days a week, and if he got on with the fire department, he would only have to do that shift. He would still make $80,000 a year. Okay, so let me get this straight. You actually believe over the

next 20 years he's going to make more money as a firefighter than a lawyer come on sorry so he would do both so he would do both he has an opportunity i forgot to say that part he has an opportunity to practice law with a very established person in our hometown um part-time and then he would be a firefighter as well so he would practice law like four days four three to four days a week he would be a firefighter as well. So he would practice law like three to four days a week and then be a firefighter too. Okay. What kind of law are we talking about? It's like a state planning that he would be doing.

He wants to get out of the criminal law thing. That's kind of how he got his first job because he was a police officer for nine years, but there's no money in criminal law. So he's trying to find his way to transition. There's no money in prosecuting criminal law. Yeah. Well, right.

And he says that he can't do the other side because he doesn't want to be a criminal. Well, we make him throw up because he's a former cop. Yeah, I get that part. Right. Okay. But there's lots of areas of the law you can work in. Right. But he's afraid that his experience that he's getting now is going to be very hard to transfer.

I wouldn't necessarily argue that. So I guess the question is this. 20 years from now, what does he want to be doing with his life? And what will be the most profitable for you all? I suspect it would be a really healthy law practice as opposed to being a fireman. I'm not against you being a fireman. There's great people that are firemen.

But lawyers make more than firemen. Good ones do. You know? So, I mean, you can do whatever you want to do. I don't care. But it sounds to me like that he's giving up. Or you're giving up and you're trying to get him to do that. One of the two.

I can't tell which one of you it is. Our scripture of the day, 1 Chronicles 16.11 Seek the Lord in his strength, seek his presence continually. Cecil B. DeMille said, The person who makes a success of living is the one who sees his goal steadily and aims for it unswervingly. That is called dedication. Boy, that's good. I like that. I'm telling you, man, when you write down what your goal is and you keep asking yourself repeatedly, what have I got to do to get there?

What have I got to do to get there? What has to be true for do to get there? What have I got to do to get there? What has to be true for me to get there? That clearly defined set of actions towards a predetermined goal. The power of that in any area of your life is astronomical. I mean, it's amazing how smart people become when they start doing stuff on purpose. Julie is with us. Julie's in Phoenix, Arizona. Hi, Julie. How are you?

Hi, Dave. How are you? Better than I deserve. What's up? Well, I have a question for you. I'm in a little bit of a financial work. My husband and I are having a financial challenge at the moment. We are in Phoenix.

However, we're getting ready to be relocated to Colorado for his work. At the moment, he's been traveling back and forth weekly, and that's exhausting to him. We have the house on the market, and we're trying to sell it, but the Phoenix market is not super great. We bought at the height of the market, unfortunately, in 2007, and we're still not quite back there yet. So we're trying to determine if we should just rent a house up there and leave the house down here and just try to sell it when eventually it sells, but then we'll have a mortgage and rent. And then we're ultimately looking at building a house up there.

So we have all these financial challenges that I'm trying to figure out what's the best thing to do at this time in our life where I'm 52 and my husband's 40 and 49. How long have you lived in Phoenix? 12 years. Actually 17 years. Wow okay so this is a big move emotionally then too. Yeah it is and we are doing really good financially. We have no debt, but the house we're on track to retire. We could potentially retire early before, you know, 60 or around. What's your household income? Um, well, it's, his is about 200. Mine is about 60, but at the moment I'm not working because, um, we're good. We're getting

ready to relocate. Um, but I'm a nurse, so I can, I can do working because we're getting ready to relocate. Right. But I'm a nurse, so I can do whatever. Yeah, you'll land pretty quick. Okay. Yeah, and I just don't want to make any big financial mistakes. So the house, what do you owe on the house in Phoenix? About $270.

Okay. And what's it on the market for? Well, right at the moment, $450. We dropped it recently. Okay. Is your realtor giving you comps in the area? Yeah, no, that is the comps of the area. Okay, so you started a little higher than comps. Yeah, we did. We started about $475. Because I'm pretty familiar with the Phoenix market, and honestly, you're the first one I've talked to who said that market's not doing well it's booming well i'm in this little pocket of phoenix it's kind of like an outskirt and not many people kind of know it's there oh okay so you've got a little micro market that's struggling

okay all right yes all right good okay that was not good but i mean i understand um that that makes sense so here's the thing you uh under youpriced your house, and it didn't sell. You are leaving 17 years of roots, and you've got that that you're grieving a little bit, which would make you human, and excited about the future, but also there's that. And you're going to lose a little bit of money, not actual out-of-pocket money, but the house is not going to do what you wanted it to do money-wise. And so you're kind of settling down now to reality is what it amounts to. So drop the price on the house until it sells.

Get it sold. If it doesn't sell at $450 in 30 days, drop it again. You do not need this house. You don't need to be fooling with this house. You make plenty of money and if you sell that house for four and a quarter versus 450 it is not going to change your life one minute okay except emotionally should we go up there and rent a house yes because he's struggling going back and forth yes move okay move but leave the house on the market. Move. You've got the money.

You don't have to rent something very expensive, but just get you... It's an adventure. You're empty nesters, aren't you? Yes. Yeah. It's an adventure. Get you a little apartment or something. And go, okay, when the house sells, then we'll buy something. And by the way, during that six-month period of time, you'll actually learn the market in Colorado, and you'll make a better decision on where to buy or where to build at that point.

Oh, okay. This is an adventure. It's an adventure. Yeah, we actually have land up there that we bought many, many, many years ago to retire. So ultimately that was going to be our retirement place anyway. In the same neighborhood that he's working? No, about 30 minutes away. Okay, so reasonable commute then.

Yeah, yeah, yeah. Well, then that's fine if you've already settled on that. You can get you a little apartment, and when the house sells, you can start building. Okay. Wait until the house sells so we can start building. Yeah, I wouldn't start. Because you don't want to get too much pressure on that house. But let's let that house go.

Let it go. Okay. Release it. Okay, and go ahead and go be with my husband up in Colorado. Absolutely. And let him have his life back. He'll be glad to hear that. He gets his wife and he doesn't have to commute.

Life is good on his planet. Yes. And he's making a couple hundred a year and you can get your new job and you'll be making, you know, between the two of you, you're going to be making 300 before you know it. You're killing it. Way to go. You got no problems here. We've just been saving so long.

It's kind of hard to make big, big financial decisions like that. And it's tied to pulling 17 years of roots out, too. And so those are tied together more than maybe you thought about. They would have been for me. Yeah. You know, I forget sometimes. I'm in the middle of something i'm going why am i so stinking knotted up about this oh wait a minute i forgot that i was there's

other things happening and i'm not grieving that at all and there's a little bit that goes with that this is an exciting new adventure it's an exciting new chapter but you're also leaving behind 17 years of connectivity and neighborhood and all these other things, good and bad. So that's just part of the equation. My suggestion is amputate that house. Let her go. Move on with the next chapter. Embrace it. And if it costs you $25,000, whoop-dee-doop-dee.

You got plenty of money. You're making plenty of money. Life is good. You know, it's not a big deal. I wouldn't let this house tear my life up for that. And believe me, I wouldn't be. Your husband's going to be so happy that you move up there and that you guys get settled in. Just get you a little place, a sweet little place that's temporary while you build,

and you can stay there while you build. In the meantime, you can stay there until your house sells before you actually start the building. But you can start hiring the builder. You can get your plans drawn. You can get everything planned. And by the time you do all that, this house will be gone, especially if you keep dropping the price. Get it out there to where it's a very marketable price. Sharon's with us in Orlando, Florida.

Hey, Sharon, how are you? Hi, Dave. I'm fine. It's a pleasure talking with you this afternoon. You too. And I'm looking forward to your opinion. Thank you. I'm in. It's a pleasure talking with you this afternoon. You too. And I'm looking forward to your opinion. Thank you. I'm in a little bit of a hurry. Go straight to your question, please. Okay. We're asking about a reverse mortgage.

We're both retired. Our income is limited. We are debt-free, but we didn't become debt-free until later in life. We didn't have time to build us a little savings account. How much is your home worth? $250. Okay. Why are you living there still? Well, we've just been living here for six years. We moved here. We bought it very reasonable when the prices were low. We bought a fixer-upper. How old are you two? We're in our 70s. Okay, all right.

And you have no money at all except this paid-for house? No, we do have a bit of IRAs and a little bit in the stock market, about $90,000. Can you live on the income that's coming in? There's no income coming off of that yet. Very little. You have Social Security coming in. Do you have income that's coming in? There's no income coming off of that yet. Very little. You have Social Security coming in. Do you have any pensions coming in? Social Security, yes, and some pensions.

My husband is currently working two part-time jobs to kind of help with the finances. But we know that down the road we're going to run out of money by about age 80, and we're trying to fix it now if there is a possible way to fix it i would not use a reverse mortgage and i wouldn't especially wouldn't make a move just for something that's 10 years out let's let's go ahead and live right now if you need to move down and home later you can do that later if you need to reverse mortgage is very high on fees their Their interest rates are ridiculous. There's a tremendous amount of fraud associated with that product line.

There's some people that do it right, but it's also very expensive even when they do it right. So I do not like reverse mortgages. I'm not going to put you back in debt. It does not solve your problem. And so the answer is no, I would not do a reverse mortgage. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, guys, it's Kelly Daniel, associate producer and phone screener for the Dave Ramsey Show. Hey, this hour of the show is over, but you can find our podcast on iTunes or Google Play. We're everywhere, for free, here to serve you.