The Ramsey Show - App - Downgrade Your Lifestyle to Upgrade Your Future (Hour 2)

Episode Date: November 22, 2019

Chris Hogan, Debt, Home Buying Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Chris Hogan filling in for Dave, and we are going to have a blast this hour. I know you're out there and you're wanting to chase down results. You've got some dreams to live and some people that you want to help. Well, guess what? It can all begin here. As we talk about your questions and get clear on the plan as well as the process, you can make some stuff happen.

So here's the deal. If you've got a question, you want to talk, I want to hear from you. The number to call is 888-825-5225. Again, that's 888-825-5225. Again, that's 888-825-5225. Or you can find us on social media, at Ramsey Show. You can find us there, whether it's on all the social media platforms, or you can look me up at ChrisHogan360 as well. Would love to hear from you. Okay, I'm going to get to the phones because that's what we do.

I've got Archie on the line calling in from New York. Archie, how are you? How are you doing, Mr. Hogan? Oh, I'm focused and not finished, my friend. What's on your mind? Thank you for having me on the show. Yes. Sorry, sir.

Go ahead. No, sir. I said, how can I help you today? Yeah, I have a question. Right now, I'm in training for my career, and I should be graduating and finishing June of next year. Okay. I do have a lot of loans, and one of the loans I had to take out was about a $2,500 loan for relocation purposes at an interest rate between 11% to 12%. Now, I do have a 403B, but 90% of that is pre-taxed,

and the rest of it, about 5%, is Roth post-tax. The total amount in there right now is about $9,000. So between the relocation loan and credit cards, I have a total of about between $8,000 to about $9,000. So my question is, should I go ahead and pull the money from the 403B to go ahead and cover the payment for those debt, especially the loan that have a substantial interest rate between 11% and 12%. Okay.

What's your income, Archie? Currently, I'm in training. I'm making $68,000 this year, but in January, actually, it's going to increase to $77,000. Okay. And of this debt that you have, so you have around $9,000 in debt of credit cards? No, no. Yeah, between credit card and just the one loan. Okay. But I do have other loans as well.

Okay. So you'd say, how much debt would you say you have altogether? I'm actually looking at it right now. Right now, just under $500,000, about $491,000. That, about $470,000 in student loans. $470,000 in student loans? Yes, sir. What are you studying? What are you? Please tell me you're calling me from NASA, like you're on the moon or something right now.

Like, what do you do? Well, I'm a medical doctor. I'm finishing residency training in June. And all of that was to get an undergraduate master's degree and medical degree. My goodness. Okay. And so you coming out, best case scenario,

is this training done in June? Is that the residency that you're done with? Yes, I'm done with training after that. Now, here, make me feel better. How much are you going to be making in June? Well, worst-case scenario, I'll be maybe $270. Best-case scenario, depending on where I go. Right.

Out there, just base salary, you're looking anywhere between maybe $1,500 to $500. Right. I mean, if you're able to get a lot over time, you're looking, you could make up to $600, maybe $700, depending on how much you work. Right. How old are you, young man? I am 34. 34 years old. Here's the reality.

I'm about to help you change your whole game here. First and foremost, no, do not pull money out of the 403B. You put that money in, it was done pre-tax. So if you pull it out, if you got $9,000 in there, you're going to probably get around $4,000 after the taxes and penalties, right? Because you can't access that money penalty-free until 59 1⁄2. And so there's no reason to pull the tree up to look at it to see if it's growing or not. So don't do that. That's not an option.

The reality is that you're going to have to make some decisions, right? Like if you will hear me and do this, you, young man, will change the game for yourself. Meaning, yes, you know the training has got to go through June. You've signed on, you took on an astronomical amount of debt from medical school and all the things coming with it. But as you come out of this and you start to make money, you're going to actually need to do this. And it's going to sound crazy, but I'm going to give you two words. You're going to need to live broke. Hear me. If you live broke, even though the money is starting to come in, what you can do is get this almost half a million dollars of student loan out

of your life. But you're going to have to, I'm telling you, you're going to have to swallow some pride and make a decision. That means you keep driving the car that you have. You don't go get anything new because you don't need to prove anybody you're an MD. Okay. You have the initials at the end of the name and the student loan debt to show for it. But if you keep your lifestyle like in broke mode, meaning just cheap, like ramen, noodle, pork and bean, okay, you can do a little bit better than that, maybe. But you get my point. You need to throw all extra money toward this debt. If you do this, you can get this out of your life in best case scenario, I would say three years if you live that way. If you don't, you have the potential, Archie, from 34, you have the potential of being 54

in 20 years and this debt has not gone down much. So which one do you want to be? Do you want to be the Archie that's debt-free and doing some stuff? Or you want to be the Archie that's still making payments on student loans 20 years later? Make that decision today and do everything else accordingly. And I'm telling you, it'll put you on a different path. You'll have an opportunity to not only have breathing room, you actually get to keep some of the money you're working hard to be able to have. And see, this mindset, and this is for everybody. This is literally for everybody. If you've got debt out there, if you make a decision that I'm going to downgrade lifestyle to make sure I can upgrade my overall quality of life, things can happen. This is where you start to eat the food that's in your cabinets.

You know, some of us have moved a lot. You all have a can of lime and beans probably that's moved with you three or four times, right? I mean, seriously, the can is just tired. The label is falling off. You're taping it back on. Eat them beans, people. Okay. Get it out of there. Quit acting like you're too good to eat that food. Eat the food. Let's be, let's be smart. You know, I was talking to a gentleman that was spending around 3000 a month eating out per month, $3,000 a month.

Okay. Eating out. That's ridiculous. I asked him, do you even have a kitchen in your house? Like, sell your stove. You're not using it, right? I said, dude, cook, right? And so for him, who had $50,000 in credit card debt, it was a game changer for him. Because to go from buying groceries to cooking, he was already used to spending $3,000 a month eating out. For him to be able to shift $2,500 of that over and start going to a debt, I'm going to tell you something.

He got excited. He got excited because he started to see some progress. See, that's what we need. Sometimes we need a new perspective so we can have an understanding of a real plan. This is the Dave Ramsey Show. We'll see you next time. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches,

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That's chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Hello, everyone. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for the big man, and we have had a blast. I just want to tell you, if you are ever in Nashville or near Franklin, I want you to come by and visit the new office. We are so excited to be here. We got all moved in in July, and we have all of us under the same roof for the first time in 10 years.

We had grown so much. We were all over the place, kind of spread out within several blocks of each other. But we're all here. And I tell you, I love meeting the people out in the lobby. Just amazing folks. One gentleman is here for his birthday from Southern California. I've met several people from Florida, a couple from Connecticut. I mean, so from all over. So if you get a chance to stop by, come visit Melissa Wilson over at the Baker Street Cafe. She will take care of you and give you coffee and cookies, all kinds of things that

I've baked for you personally. I'm just playing. No, she does the baking. I didn't do that. But we'd love to see you and love to see the smiling faces and to come visit us here at the office. All right, if you're out there and you've got a question we want to hear from you, the number to call is 888-825-5225. Again, that's 888-825-5225. We want to hear from you. Call us. Amanda is by the phones ready to talk to you. And if you prefer, you can send us a message on social media, at Ramsey Show, or find me at ChrisHogan360, however you want to do it.

But we want to hear from you. All right, I'm going to get to the phones. I've got Aaliyah on the line. Aaliyah, how are you? Hi, I'm good. How are you? I am good. Where are you calling from?

I'm from Buffalo, New York, but my job has sent me to Stockholm to work for the next few months. So you're calling from Stockholm? I am. I am. Wow. What time is it there? It is 920 and it's very cold. Wow. So it's late and you're up and you're talking to me. All right. I'm excited. How can I help you? So long story short, I'm 27.

I was raised by my grandparents. They adopted me. They sold their house to help put me through college. I went to law school. I'm now making about $210,000 a year. Okay. But I'm also $180,000 in debt. Okay. So my question is that my grandparents, they're in their 80s now.

The house that they live in, they own, but it's not in a great neighborhood. Okay. So my question is that my grandparents, they're in their 80s now. The house that they live in, they own, but it's not in a great neighborhood. Okay. I would like to pay them back and buy them a house. So I have a house, and then I have the student debt on the other hand. And my question is, do I pay down this humongous student debt, or do I just go for it, and I have about $50,000 saved up right now, buy them a house, still happy. So that's my dilemma. Another thing too is that the house that we live in, we can rent. So we can get about $900 per month so that can go towards the mortgage.

But then I would have these two sets of very large bets on my credit report. Right. So is the goal, let me ask you this, Aaliyah, because number one, you are very articulate. You've thought this through. You've been thinking about this for how long? Ever since I was maybe 14 years old. You've got a desire, a burning desire in your heart to show them how much you appreciate them, don't you? Exactly. And life's short. You're not going to be there how much you appreciate them, don't you? Exactly.

And life's short. You're not going to be there forever. Yeah. No, I hear you. Yeah. And I tell you, do they love you? They do. I know.

Very much so. Yes, they do. And I say this because as I'm talking to you, I think they love you and care enough for you that they would want you to make sure you're putting yourself on solid financial ground. Does that make sense? It does. And the solid financial ground is right now you're not in a position to be able to buy them a home. Okay?

Right. Now, I'm just being honest in looking at this for what they've done for you. Now, here's what you could do. I think you could do something amazing with them. I think you could take them on a trip. I think you could take them on a cruise or do something like that to really show them and let them know how much you appreciate them. But I do think that you do have the opportunity with your career path that you'll be able

to do something eventually. But I would say right now, the best gift you could give them and you would be to get intentional on attacking these student loans, the law school loans. I'm serious. And you said, I love that you know your numbers, but you said you have about almost, what, 200 and what, 180,000 in student loans? That's correct. Okay. And you're making around 200,000 right now? That's correct. Okay. And you're making around $200,000 right now? That's correct.

Okay. So imagine, I mean, if you were to get really, really focused, Aaliyah, how long do you think it would take you to pay off that student loan? Well, how long? I said really. Yeah, really, really focused. Okay. Three years?

I think so, too. I really do. Now, think about that. So you've got to decide there's some things you're not going to do that your friends are going to be doing because they're going to let that law school loan hang out like a family member. But if you're not and you free it up, in three years, you imagine this student loan debt is gone of what you were paying. Now you're able to start to build wealth for yourself. So I think what you have is the opportunity.

Again, you could do something really, really special for them. You could take them on a trip, take them on a cruise, do something. The house, not just yet. And the only reason why is you don't want to take on that debt. Then you're going to be trying to get a house. And now we look up, Aaliyah, and imagine. Imagine now you've got two mortgages and the student loan debt, right? You're going to be living paycheck to paycheck, young lady.

And you're too smart. You've worked too hard. You've sacrificed to get where you are. I say do something nice for them. Write them a letter. Tell them. Talk to them. Walk them through your appreciation and your gratitude. But more importantly, give yourself solid financial footing and you move forward. We don't want to go backwards. We want to go forward. And that's

what I do. I really would. I'm going to be honest with you. And you get intentional and in three years you knock out this student loan debt and now you look up and you've got an opportunity to do things with your money that you never thought you could do before. Thank you for that call. Wow. We are international, okay? You all, you need to know this.

The Dave Ramsey Show, the Chris Hogan Show, we have listeners all across the world and love to hear that, that we had someone calling in from Stockholm. Great opportunity to be able to have a conversation. All right, next up I've got Carol on the line. Carol is calling from Indiana. Carol, how are you? Good. How are you, Chris? Oh, I'm focused and not finished. What's on your mind, hon? I recently got introduced to you guys through my sister, and we have a little discussion going on about credit cards. I feel like I benefit from the credit card. My husband and I only have one, and it's to take vacations for free a year.

For free? For free, yeah. Oh, okay. Well, that's what I mean is the plane ticket. So I pay $100 a year fee for the credit card. But on a monthly basis, we put about $7,000 a month. Always pay it off because we do all of our monthly budgeting bills. Everything is inclusive. And that equals out to about 84,000 points a year. And I at least get three round trip tickets a year

with those points. So if you switch back to numbers, it's at least $600 a year, and I'm only paying a $100 fee. I feel like I'm making $500 off this credit card. Oh, you're making money. What magical card is this that you have? This is the United SkyMiles. Okay. All right.

And you all have been doing this how long? Actually, the Southwest, we just switched to United. Okay. How long have have been doing this how long? Actually, the Southwest, we just switched to United. Okay. How long have you been doing this? You know, I've been doing this for the last eight years because my husband was in medical school and we couldn't afford traveling. Gotcha. And we thought, wow, this is a good way to travel for free. And so your sister is telling you what?

What's the debate? What's the question? Because you have a magic card here is yeah i feel like i'm i but i appreciate what you guys do but i feel like i'm we are one of the wise couples that looks to benefit versus what's your net worth right now what's your net worth right now? Our net worth? Uh-huh. Probably 400. Okay. Okay. Well, I don't know what you mean by net worth. We're out of medical school. Right. Well, I mean, we're probably, yeah. Yeah. Well, here's the reality. What I mean by net worth is you take everything that you own minus anything that you owe on. And so you add that up, and it's a net worth. I'm going to tell you this.

98% of people aren't paying off the credit cards each and every month. And I can tell you something else. This is my mic drop moment, people. I talked to over 10,000 millionaires. I asked them how they got there. Guess how many told me it was because of points and rewards and miles, not a one. So, honey, you keep your unicorn card, and you do what you need to do. The rest of the people out there that are focused and not finished, pay them things off.

Shut them down and live your life. This is The Dave Ramsey Show. Hello, everyone. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave. And boy, we've had some fantastic calls. If you're out there and you've got a question about money and you want to talk about it, let's talk. Give me a call. The number to call is 888-825-5225. Again, that's 888-825-5225. Would love to talk with you. Or if you prefer, you can find us on social media at Ramsey Show or at ChrisHogan360. Send us your question, and we can dive on the phone and talk.

All right, I'm back on the phones here. I've got Alan calling in from Georgia. Alan, how are you? I'm doing great. How are you, Chris? Good to speak to you. Yeah, buddy, I'm focused and not finished. What's on your mind?

Hey, you guys are changing lives. I hope you can help me. I hope so. I have about $87,000 in student loan debt. And prior to August, my plan for having that paid off was in the entire bucket of public service loan forgiveness. I found out around that time that only about two-thirds of that, so about 60,000, applied for that program. And 30,000 of it didn't. So that started our sort of gazelle

intense towards that 30 grand. We've been really doing a great job of paying that off. However, I still have a little bit of V that wants to still stay in that mode of maybe I could receive that funding for the other 60 grand. And so I'm starting to look out at some of the percentage rates on potentially refinancing for your calculation. My average interest payment is about 6.8% for my loans, and I could refinance to around 3.5% or 3.75%. So I don't think it would be worth refinancing for just the $30,000. But if I were to give up on the dream of public service loan forgiveness, then I could refinance and make it work. And I wanted your advice on what you would do if you were in my shoes. Yeah.

Alan, tell me this. What's your household income? It's about $90,000 before taxes. Okay. $90,000 before taxes. And you owe $87,000 in the student loan debt, correct? Yes. Is that the only debt you owe on?

Yes, sir. Okay. So do you have a home yet? We rent. You rent. Okay. So look at this. Alan, I'm going to be honest with you.

I've read through some of these loan forgiveness programs, and here's the thing that makes me apprehensive about believing them. They typically, if you read in the little laws or the little bylaws or the little requirements, it talks about in there things that can never happen, meaning you can never be late on a payment. If you're late on a payment, then it forfeits you from the program, all right? They also, most of the time, will reserve the right to change the program. I don't trust it. Now, I've heard of some people that have done it.

There's teachers and or firefighters or things of that nature that have qualified. But it's one of those things where I go, do I really trust them to keep the program around or to not change something in the next six, seven years as you're trying to approach it? Now, I don't want you to think I'm being negative, Nancy, because I'm not. I'm just saying the likelihood, right? I mean, it means you could send in a payment and it get there on time, but they don't post it on time, right? And so then what? So I think you're better off with you having the mindset of it could or it couldn't. I'd rather you be in control than you be at their mercy, if that makes sense. Now, that's the $60,000 swing. I know you're thinking, okay, little bald

man. Okay, this is $60,000, Chris. And yeah, I'm going to follow it to a T. I would just say, read over the program guidelines very clearly. Look at it. Call them with any questions and just have your thing down to a T. But I would also say this, you need a backup plan if they change the game on you. And they've been known to do that a few times. And so, Alan, I would much rather you be in control and you say, you know what, we're going to handle this and we're looking at this and we're going to get ourselves free. And so I've told people, hey, be saving it up, put that money aside. And lo and behold, if they change the program, you've got money that you can grab and just say, I'm done with this. And so it's just a mindset. I want you to be prepared. Too many times I've heard of people that have waited on that forgiveness program only for the program to be adjusted or changed.

And it just leads to heartache and headache. I say attack the debt, get it out of your life, and move forward. Thank you for your call, my friend. Next up, I've got Christy on the line in Texas. Christy, how are you? Hey, I'm good. How are you, Chris? Oh, I'm focused and not finished.

I'm excited to talk to you. How can I help you? Good, me too. Okay, so I have a question about bad debt versus what I'm calling live debt or what we're currently paying. Okay, hold on. Hold on. Wait a minute. Wait a minute.

You said what now? There's two types of debt. Yeah, don't chuckle. You knew I was coming back to this. You got bad debt and what did you call the other one? Live. Live debt. Okay. you call the other one? Live. Live debt. Okay.

All right. So go ahead now. I've got live debt and bad debt. Go ahead. Okay. So we have about $85,000 total in debt. Okay. And so we're currently paying most of it, but we have two that have gone bad and haven't made payment in probably about

a year now. What kind of debt were they? So those two are both consumer debt. Okay. Personal loans or credit cards? Credit cards. Okay. All right, go ahead.

Yeah. So my question is, we just started y'all's baby steps. We've got our thousand dollars saved and we're going to hang off a bunch of these little debts this month. Um, like so $100, $600, yada,

yada. Um, and so we have an offer letter though from one of the bad debts that is the data is 6,000 a little over, but the offer is for a lump sum settlement of $1,700. So I'm wondering, should we take this offer and put it above paying off our, because I know Dave says, you know, do your snowball, and then if you have bad debt, do another snowball.

So which do you pay first? Like if they're making us this kind of good offer, should we kind of move that to the top of the priority list or should we still just focus on getting the rest of it paid off? Okay, very good. This is a great question in a real world scenario. These bad debts have been bad for how long? Probably a year. Okay. All right. And so they obviously have been reaching out, trying to call you guys and connect with you a lot. I mean, I know they have. That's how they roll.

But okay, so if you've got the two credit cards are the bad debt, one is $6,000, the other one is how much? $10,000. Okay. All right. And so then you've got $85,000. Is the bad debt part of your overall debt number? Is that the overall part of the $16,000 in bad debt is part of the $85,000? Yeah, it's included. Okay. All right. Very good.

And so you're asking me as you're making it, what are the other debts? What are the live debts, as you're calling it? You've given some new categories here. How much in live debt? How many are credit cards? Okay. given some new categories here. How much in live debt? How many are credit cards? Okay, so we have one. I have a board literally up on my wall. One, two, three, four.

Okay. But they're not that big. So, like, one of them, two of them we're going to be paying off this month. Okay. And then the other two are about $2,000 each. Okay, what else is on that board? You got the four credit cards and what else? And then the rest two are about $2,000 each. Okay. What else is on that board? You got the four credit cards and what else? And then the rest is student loans.

Okay, student loans. Okay. Here's the reality. In looking at this, you're going to have these companies call and be reaching out for you for settlement. The bottom line is most of the time to be able to settle is going to require money. And they're putting this in writing. So you're telling me you guys owe them $6,000. A credit card is unsecured, both of those, the $6,000 and the $10,000.

So if they're offering you right now to settle this in full for $1,700, do you all have $1,700? Like this month, we don't. But next month, we will. We could do it. But but hold on now listen to me you still got to take care of the other stuff right you've still got to make minimum payments so you have an extra 1700 coming in next month um honestly yes my husband is just beginning a pretty sweet christmas bonus check okay right. If that's the case,

Chris, listen to me. If that's the case, then yes, I would do that. You're able to take care of the other needs, the other things. You're able to handle business. If that's extra coming in, then yes, I would. Now, here's how I would do this, though. They've put it in writing. I tell people all the time, it's not a settlement offer if it's not in writing. So they've put it in writing. I'm going to get a check, a cashier's check, in the amount of $1,700. I'm going to overnight the check to the company to require someone to have to sign for it. So I'm not playing the game of they didn't get the check and didn't have it. We have it. And on the memo line of the check, I'm going to say settlement in full for X account number and be done with it.

Keep a copy of it in your files so you can move forward. This is The Dave Ramsey Show. hello everyone you are listening to the dave ramsey show i'm chris hogan filling in for dave and we've had some fantastic calls and i was talking to a caller before we went to break about dealing with old debts so these are debts that might be charged off. She called them bad debts. But if you go a certain period of time without payment, they can do what's called charge off, which means they're writing it off their books. It doesn't mean they've forgiven it.

It's just something that they're going to sell off to a debt collection company. Somebody else is going to start to call you. And the thing we were talking about in that call was this company had, this debt collection company, somebody else is going to start to call you. And the thing we were talking about in that call was this debt collection company had sent them a letter as an offer of settlement, which means you owe X amount and they're willing to settle for another dollar amount. The key that I want to take away from that is A, you've got to have the money. A settlement offer means nothing if you don't have the money to be able to pay it. So you need the money, and if you're going to do this, you need to get a cashier's check.

Make a copy of the cashier's check before you send it off, as well as a copy of the letter. And I want you to send it overnight, that they have to sign for it with a signature required. That way they can't play the game that they didn't get the check. Not only do you know they got it, you know what time they got it, and you know who signed for it. And you keep that in a file because it's going to take probably two months for that to be updated off the credit report to show paid. And typically it won't show paid in full.

It will show settled. So there will still be a balance showing on there. So this is all stuff that I walk people through. We have what's called our financial coach master training for people that want to learn how to coach others and to be able to help them in their situation. This is something you can check out. You can go to DaveRamsey.com and look at financial coach master training and get an opportunity, learn an opportunity for how you could work with people to start a coaching business or if you want to coach people just for ministry's sake. So you've got an opportunity to be able to learn as well as grow.

All right, I'm going to jump here on the phones. I've got Luke on the line. Luke, how can I help you? Chris, I got a little bit of a question here. Uh, I've mentioned, I've heard Dave talk about how rent kind of fluctuates, but for me, I live in a college town and the rent always is just always high. I've tried looking for, I've tried looking for places with lower rents, but the problem with that is I'm a correctional officer, so I kind of have to stay in some of the safe areas to avoid people that I've had in jail before, and there's just not really any good options.

How much is your rent right now, Luke? Right now it's $770 a month. Okay. And what's your household income? I'm bringing home about $32, and our wife's bringing about $30,000 a year. Okay, so $32,000 and $30,000. And tell me this, what debts do you all have left right now? Right now we have about $14,000 in credit card.

We have $20,000 on a card. $150,000. I'm sorry, we have $1,500 on personal loan and $10,000 in student loans. Okay. We have 20 on a card, 150. I'm sorry. We have 1,500 on personal loan and 10 in student loans. Okay. So 14,000 on a credit card, 20,000 on a car? Yes.

Okay. And then personal loan. Okay. And then student loans of how much? 10,000. Okay. Gotcha. Okay. So you guys income, household income is right at what? 62,000 a year? Right about there, yeah. Yeah. Okay, gotcha. Okay, so you guys' household income is right at, what, $62,000 a year?

Right about there, yeah. Yeah, okay, all right. And so what are you thinking? You guys are talking about buying a house? I'm feeling like if we bought a house, it'd be a little cheaper than renting a house out. No. I'm going to tell you this. I can understand the feeling.

And probably looking at the math, I could probably even say I understand it. But here's the reality. When you rent and something breaks, somebody else gets to fix it. When you own and something breaks, you get to fix it. So this mindset of, and I'm going to tell you right now, Luke, you could probably find a place that would do a home for you, a mortgage right now. Looking at where you all are, I say not yet. Now, I understand you're saying, Chris, the rent is high. I get it.

But I want you to also acknowledge this. The interest rate is high on some of these debts you have, right? And so you can get rid of, listen, $20, right? And so you can get rid of it. Listen, $20,000 of it, you can get rid of here in the next week. That's that car. You go to Kelley Blue Book and find out the value of it and sell that bad boy. That's $20,000 gone right there. So then you're left with $14,000 in credit card and $1,500 in personal loan.

See, I want you to be able to save up a down payment to be able to put down on a home. 10% minimum, 20% would be absolutely incredible because it allows you to avoid private mortgage insurance. PMI doesn't protect anybody but the lender. So I would say not yet, Luke. I'm going to be honest. You want to not only get yourself out of debt, you want your fully funded emergency fund, and then you want the home down payment. That's why we call the home down payment baby step 3B.

So I would say stay focused. I like that maybe this house for you and your wife is the thing that will motivate you guys to go faster. I want you to have that and have the American dream. I just don't want you with the frustration and irritation of getting in it too fast because then you're frustrated by it. And it should be something that should be a good thing for you guys. So stay focused, keep grinding, attack debt, get it out of your life. Then you can look at trying to buy a home later. That's my advice to you.

All right, I'm back on the lines. I got Hannah in Ohio. Hannah, how are you? Good. How are you, Chris? Oh, I'm focused and not finished. What's on your mind? All right.

So we are wondering the best thing to do with what we have at the moment. We have no debt other than a $53,000 mortgage. Okay. We've got a vehicle completely paid for. Somebody gifted it to us. Good. And it's worth probably about $35,000. Okay. We've got four kids. Our house is currently worth about $135,000, $140,000 as it is, but it's pretty small.

With the four kids, we're looking at moving hopefully sooner rather than later, but we are willing to tough it out if we need to. And so I guess just looking for a little bit of extra wisdom, like what would you do if you had what we have? Yes. I like that. I like that. I like that. Tell me this, Hannah.

How old are the kids? I have an 8-year-old, a 5-year-old, a 4-year-old, and a 6-month-old. Okay. Wee! Y'all are busy. Right. Okay. So how big of the home is it that you live in right now?

1,100 square feet. Okay. And if you all were to, you told me the value is about 135. What's y'all's household income? About 70,000. Okay. And you've been looking at homes already, haven't you? I look nonstop.

We love doing the fixer-upper thing. So we purchased this home for $72,000. We owe $53,000, and it's worth quite a bit more than we've even put into it. So we'd like to do that again. We've been in this home for two years, and we know that you have to stay in a home for two years to avoid extra tax. That's right. So that's kind of what we were planning on doing with the next house also.

I like your focus, but I want to clarify again, you don't own anything but the mortgage, correct? Correct. Okay. See, I like you all's focus. I'm, I'm saying you look at this and let's run the, run the numbers, you know, 1,100 square feet, family of five, I mean, or family of six, rather, it could be tight. But here's the thing. Imagine you guys looking at this. You don't mention that you have necessarily any kind of money saved as a down payment. No, you're going to have the equity out of the home. But looking at this, could you tough it out another seven, eight months as you look for

the right house, right? I don't think there's anything wrong with it. And one side of me says, sit, stay put, pay that thing off, right? Have the kids bunk up. They're small anyway. Like they're just, they're little. They don't take up much space. So I think you guys walk through this.

Keep your eyes wide open. Be intentional. You know, you were blessed with a car. Like you said, you all have gone into it. You've been very intentional with this house. You've got some serious equity built up. I want you to be careful, okay? Because right around this time, when people are at the crux of getting ready to make a breakthrough or run fast forward, there's always the option to fall backward, meaning you get caught up in the deserve mentality because you've worked hard or you say we're a

family of six we deserve a bigger home or we deserve a minivan by the way nobody deserves a minivan don't do that to yourself unless you got a whole lot of children but listen to me be focused stay focused my friends america we've got some things we can do we need to chase down progress it's not an accident i want to thank all the callers for calling in. I want to thank all of you listeners for tuning in. I want to thank James Child, our producer, Amanda Rogers, filling in for Kelly Daniel, as well as Bobby Robertson, our audio tech. I want to thank all of you for tuning in. I've had a blast.

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