The Ramsey Show - App - Eject the Debt From Your Life! (Hour 3)

Episode Date: February 26, 2020

Chris Hogan, Insurance, 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 Ramsey this hour, and I am excited to be with you and ready to take your calls. I just need you to call me. So I know you've got questions on money or maybe you've got a situation and you need a little bit of guidance so you can start to chase down progress

and grab it with both hands because that's what we want to do. I want you to give me a call. That number to call is 888-825-5225. Again, that's 888-825-5225. Give us a call. Kelly is ready to help you. And if you prefer, you can hunt us down on social media at Ramsey Show.

We're on all the platforms. I'm talking about YouTube, Twitter, Instagram, all those things. You can find us at Ramsey Show. Or you can look for me at ChrisHogan360 as well. So excited to talk with you, and we are ready to attack this hour. So I'm going to get to the phone lines because that's what we do. I've got Stephanie on the line in California. Stephanie, how are you? Hi, I'm good. How are you? Oh, I'm focused and not finished, young lady. How can I help you? So I need some advice on how to grow up, I guess.

Uh-oh. I will be turning, yeah, I'll be turning 26 next month, which means I'll be aging out of my parents' insurance. Okay. Um, and the current job that I have, I will be eligible for insurance at the start of the next school year, which would be around August or September. Okay. That means between April and August, I don't have any health insurance. And I know that California has recently reinstated the tax for not having health insurance. So I don't know if I should find a new plan or if I should just take the hit when tax season comes around. Gotcha.

I don't know what's the best way to go about it. Okay. No, Stephanie, that's a fantastic question. So you're 26 years old. Are you working full-time or are you going to school? I am currently a substitute teacher, so it's part-time. Okay. Okay.

So working part-time. And, you know, here's the thing with insurance. At times, they look at it and it's about continuity. Did you ever have a period where you didn't have coverage? So there's a couple of things I would do. I do think you definitely need to have some health insurance, but there's a couple of options. Either speaking to the company that your parents currently have to find out if there is a rider or some type of way you can continue some coverage there, or I want you to reach out to what we call ELPs. These are endorsed local providers. These are professionals that Dave and I trust all around

the country in various areas. We have them for taxes. We have smart investors for investing. But we have insurance ELPs on this topic. So what I'd encourage you to do is go over to DaveRamsey.com, look up an insurance ELP in for California, and begin to have a conversation about what your options are. I love the fact that you say come time in August or September, you have an opportunity to enroll in that plan, and that's a good thing. But what can you do in the midterm? And I think that's where you can get some excellent guidance to make sure that you're protected. And you are grown up and are growing up because you're thinking ahead. And so I'm very, very proud of you, Stephanie, for reaching out to make that phone call.

That is an adult decision. Insurance is protection. And I want people to remember that. We pay a premium, and in exchange, you get protection. And so this is something that we have to do. Not being inadequately insured is one of the things that I see cause people a lot of headache and heartache financially. So Stephanie, great question. Thank you for calling in. All right, I'm back on going to

line three. I've got Russell on the phone in Ohio. Russell, how can I help you? Hi, thanks for taking the call. I'm 38. I'm active Army. I have seven years until retirement, so I'm really trying to come up with a plan, and I want to pay off my debt. So between my wife and I, we have zero credit cards. Good. She leases a car, and I just purchased a used car, but it's 19.5, and I purchased it because we had our third child,

and I couldn't fit all three of them in my previous vehicle. What kind of car did you have before? A Hyundai Santa Fe Sport. Okay. All my kids are under six years old. Gotcha. I have a five-month-old, three-year-old, and a five-year-old. Okay.

A Honda Santa Fe, doesn't that fit like six people? It was not the one that had the third row. Oh, okay. Gotcha. All right. So you got this vehicle. The car lease, how much are you all paying on this fleece? The lease is $388 for a minivan.

All right. A minivan. Okay. What other debt you have? My car is an Acadia. That's $318. Okay. That's what I bought, and then our home. Okay.

We owe $148 on that. Okay, and how much is your mortgage payment? $1240. Okay. All right, what's your question uh my question is should i um keep should i pay this car off with um our savings uh 55 000 and savings between my wife and i um or should i sell this car and get something something cheaper okay but i still need to be able to get the kids around because my wife and I, at times, both have to drive them.

Right. Because of our schedules. Right. Well, first let me tell you, thank you very, very much for your service to our country. Freedom is not free, and I appreciate you doing that. Next, I need to know, how do you have $55,000 in your savings? That's from a deployment in 2012. Okay.

And my wife, she was able to save quite a bit when she was a hairstylist. Okay. We did a different salon. Well, here's the plan. I mean, Russell, do you want to be debt-free? I do, yes. Why? Because I'm getting nervous about my retirement because I'll have just my base pay retirement

and whatever disability I may accrue. Right. And my kids will be so young and not in high school, and I want to have my house and my cars paid off. That's right. Whatever pension I have, I can focus on the rest of my life. That's right. You can focus on getting the things done you want to get done

instead of taking care of debt. So if I'm in your shoes, here's what I'm going to do. This Acadia that you bought that's $19,000, we're going to pay that off. And this becomes the vehicle that you're driving for the next several years. And then this lease that you're in, guess what? Tell

it bye. Okay? Has the minivan worked out well for you all? Yes. Okay. Do you drive the minivan or is that your wife's? It's my wife. I bet. Here's the deal. Let's go get her a van. Go find her a $10,000 to $12,000 minivan, something reliable. You've got your car paid off. You're out of this lease. It's going to cost you a little bit of money to get out of the lease, but you've got a paid for car for her. So now you guys go from having a majority of your debt is wrapped up in cars. Now you're debt free except for the home. And so what I would do is we tell people to have a three to six month emergency fund. That's the cushion between you and life happening,

but you will have paid off vehicles and got driving, driving paid for cars, have that emergency funds. Cause that should put you right around in that ramp. And now you're focusing your attention on baby steps four, five, and six, investing, saving for college, and attacking the mortgage. I'm going to tell you right now, Russell, that's what I would do. Now, you're probably having some heart palpitations because I'm talking about draining some of the money out of the savings. I sure am, because I want you to eject the debt out of your life. This is The Dave Ramsey Show. business leaders i'm not gonna lie finding the right people to make an impact at your company for years to come is hard work but i can can tell you from personal experience, you can find them when you use LinkedIn Jobs. LinkedIn Jobs reaches candidates you just can't find anywhere else.

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linkedin.com slash Ramsey. That's linkedin.com slash Ramsey. Terms and conditions apply. Hello, everyone. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave this hour. And we've had a blast. If you're out there and you've got a question, I want to hear it from you. So just give us a call. Pick up the phone. The number is 888-825-5225.

Again, that's 888-825-5225. Kelly is standing ready, willing, and able to help you on the phone line. If you prefer, you can hunt us down on social media, at Ramsey Show, on all the social media platforms, Instagram, Twitter, Facebook, all the things, at Ramsey Show. Or you can look for me at ChrisHogan360. Speaking of social, I want to take a social media question here. This one is from Rebecca, who is one of our YouTube watchers. And she says, I settled three debts, and I don't want it on my credit report anymore. How can I get these off so when I go get a mortgage, they won't see it?

Okay. So, Rebecca, you settled some debts. Now you want those to just leave your credit report so when you get a mortgage, they won't see it. It doesn't work that way. And a couple of reasons. One of the words you point out in this that jumped out at me is it says settled, which means you offered them a dollar amount less than what you owed and they agreed to it and so therefore settled it, which means on your credit report it's going to show settled. It'll show marked as settled under the status. However, it will reflect a balance. So if you owe $10,000 and you settled it for $5,000, it will still show a balance of $5,000, but it will say settled.

Unfortunately, you can't mandate when those fall off your credit report. Typically, those are going to be on there for 7 to 10 years. So it's not something that can magically leave or you can control. Nor do I think you should worry about it. I think the big thing is you have the letter that says settled. You have a copy of it. You have all those things. You have a file.

And so when you get ready to get a mortgage, i.e., once you pay off debt, get a fully funded emergency fund, and then you've got a home down payment, then you're going to be ready to talk. But it will not just leave. So that's a good question, but people need to be aware. Also, if you're out there and you say, well, Chris, I don't know what's on my credit report. How do I look at it? First thing to know is that there are three credit repositories out there. So there are three places that store and grade or rank credit.

It's Experian, TransUnion, and Equifax are the three. You are able to get a free copy of your credit report from each one of those each year. So what you would need to do is reach out and write to them. If you go to the website, you can do it online to get a copy of it. But don't look at just one of those and think that it's showing everything. There could be some things showing up on Equifax that's not showing up on TransUnion. So it's really important to be able to look at those and know exactly what's going on. Okay, we're going to the phone lines because that's what we do. If you've got a question, I want you to call us. The number to call is 888-825-5225.

Again, that's 888-825-5225. Going to line two, I've got Dhani on the line in Iowa. How can I help you? Hi, Dave. This is Chris. Hey, Chris. Yes, ma'am. Sorry.

You're fine. I am asking because I am 28, my husband's 30. We're in baby step 3B, saving up for a house. Okay. We've been renting, going on to two years of rent now. And I was wondering if it was wise to continue renting so that we can save up a little bit more for a down payment on a bigger house. Okay. Or if we should just settle for a smaller house so that we can start a retirement.

All right. Ooh, I like this. So you're thinking this through. So what's you all's household income? We're right around 65. Okay, right around 65. And is it just you and your husband? Well, we have three kids.

Three kids. Okay. What are the ages of the kids? Five, three, and two months. Oh, my. Y'all are busy. Super busy. Yeah, you got three kids running around.

You're busy. So what size apartment are you all renting right now or home? Right now, we are in like, it's around 800 square foot. Okay. More or less. Okay. Family foot. Okay. More or less. Okay. Family of five. Rent is $600.

Okay. Rent $600. Yes. Family of five, 800 square feet. So the initial size home you guys were thinking about was how big? I mean, we could get a house around, square footage wise, would probably be 13 maybe., more or less, for $135,000. Okay. Or around that price.

Around that price. And if you waited a little longer and said, get a little bigger, when you say a little bigger, Dahani, how big are you thinking? Well, around here, probably something more like a four-bedroom, three-bath sort of a house. That price I gave you for $135 is going to get us like a two-bedroom, one, one-and-a-half bath. So you think the four-bedroom, three-bath would be about how much? Probably closer to $170 to $200, around that range. Okay, and you guys are on Baby Step 3B. How much have you saved up for a home down payment thus far?

Right now, we have $35,000. $35,000? Yes. Okay. You guys have been intentional. And so, I'm just double-checking here, Dahani, because sometimes people get amnesia. Okay? So, don't think that I'm questioning you, but I'm just going to going to ask just to double check you guys don't owe any debt on anything do you

no okay good so i like the idea listen i don't think that there's a problem your little one's getting riled up uh they don't like my voice or something i don't know but but here's the deal i don't think there's a problem at all for you renting and taking a little bit longer to be able to save up to buffer and to boost that baby step 3B. That's not a problem at all. And the mindset, especially, here's the pressure you're feeling. You just had another baby two months ago. And so now you're, instead of a family of four and eight hundred square feet, now you're a family of five. And you're starting, as mom, starting to think long term.

So the question is, is how long are you willing to wait? And I want to encourage you to honey, reach out to one of our real estate ELPs because when you're buying a home, you don't want to make a home and emotional decision. No, no, no, no. Don't get me wrong. There are positive emotions that come from buying the home. Yes. And the good things that can happen, but you don't want an emotional purchase.

You want to have your business hat on. You want to make a business decision. And what I mean by that is you want to make a decision today that you'll look back on in two years and say, I'm glad I made that decision. I call that Hogan's two-year decision plan. I want to think, and what it means is I raise out of my situation necessarily today, but I look forward and I think, what do I need to do to put myself in trajectory to my dreams and set myself up? And so that's what you guys need to do. Do you want to buy something smaller or wait and buy something a little bit bigger? But I want to remind you, your mortgage payment should not be more than 25% of your take-home pay. That's kind of a guide because I've seen too many people, Dahani, end up house poor,

meaning they buy a lot of house, but they can't do anything else. And now they're frustrated and irritated. So I appreciate your call. That's really one of those things to really dig in and to think about. So thank you for that. I'm going to go back to social. That was a good call. Emery on Twitter asks, I know you always say only refinance your mortgage to get a better rate.

Should I ever refinance to avoid PMI on an FHA loan? Okay. Well, Emery, actually, I don't just say only refinance to get a better rate. I will tell people that you can also refinance to get a better term and an overall better loan. So you're asking, should you ever refinance to avoid PMI on an FHA loan? First and foremost, what we'd have to do is talk about what exactly is PMI? What is it? Private mortgage insurance is PMI.

It's an insurance that doesn't protect you as a lender at all. It doesn't do anything for you. You know who it protects? It protects the bank and the mortgage company. So if you were to default, it protects them. Now, here's the kicker about PMI, private mortgage insurance. It can add an extra $150 to $350 a month to your payment. So this is a big deal and could add up to be a lot of money. So if you can refinance to drop PMI, you're obviously saving money. And if you've had this mortgage longer than three years and you refinance right now, rates are extremely low right now.

I'm encouraging people, reach out to your lender, have a conversation, find out if you should refinance. We all know come November, we've got the election coming up. It's where people start having emotions and start acting weird, right? When the reality is, is we know we don't believe in Chicken Little. I've seen the movie, people. Okay? And so the bottom line is I need to have a plan and be clear of mine.

And you stay focused. Why? Because you're not finished. This is The Dave Ramsey Show. If you do this one simple thing that we all do, you are literally at risk of being hacked and someone stealing what you've worked so hard for. Do you ever use public Wi-Fi? I'm talking about getting online at a coffee shop, a store, the airport, or even at home. Hackers can use a simple $100 device to mimic Wi-Fi, and with just a little bit of skills, they can take over your financial life. This means you may think you're on your bank's site or app or securely making that

purchase online, but hackers could see and steal that information. That's why I trust CyberGhost VPN. CyberGhost thinks about cybercrime so you don't have to. You can try it for free for seven days, protect up to seven internet devices, and keep all of your internet connections secure. That's CyberGhost VPN. Download it today from your app store and be secure in seconds. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in this hour for Dave. And we've had an absolute blast so far. I know I have.

But if you're out there and you've got a question, I want to hear from you. The number to call is 888-825-5225. Again, that's 888-825-5225. Or look for us on social media, at Ramsey Show. You can find us on all the social media platforms. You can also find me at ChrisHogan360 if you want to send me a question as well. I want to tell you I have my show, The Chris Hogan Show, where we record based on my travel schedule, but we are a caller-driven show as well. You can find it on iTunes and all the places, Google Play, where you find podcasts.

Just look up Chris Hogan, The Chris Hogan Show. But we have a lot of fun on there. I do a few segments, one called Did You Know? This is where I try to give you new information that maybe you knew, maybe you didn't, but it's stuff that will help you build wealth as you move forward in life. And then I also do a segment called Panicked or Pumped. And this is where people have reached out to me and they're letting me know that they're panicked about a certain situation or maybe they're pumped up about

something and they want to celebrate. Either way, we take that in and we have an opportunity to be able to do that segment as well. So it's a lot of fun. You can check it out over on YouTube. Just search for me, The Chris Hogan Show on there. It is a blast. But another thing we do is also, my VIPs, that's what I call my listeners, because they're very important people. But they send me articles, and they try to send me things to either get me riled up, okay, because they want to see my blood pressure go up a little bit, or they're sending in something where I'm just sharing it with people. And I want to share this article with you. This is one of the ones one of my VIPs sent in. And the article is from ThinkAdvisor.

And it says, these are the millennials' top three financial goals. And before I tell you about their goals, I'm going to tell you some of the statistics. 86% of millennials have financial goals. 86% of them. I love it. I think that's fantastic. Here's the other side of it. 69% of them. I love it. I think that's fantastic. Here's the other side of it. 69% of them have no emergency fund at all, not of any dollar amount. And 60% of them don't have a retirement account. And so I looked at this and I was like, wow, okay, hold on. I love that they

have an idea of what they want to do, but it's the plan. This is where this starts to fall off. But take a look. These are, according to the survey, they did as the oldest millennials turn 40 this year. Does that sound right, James? I mean, you think millennial. I don't know why I'm thinking younger than that. But anyway, it says as the oldest millennials turn 40 this year, many members of this generation are pursuing life milestones much different from their parents.

That's true. According to the survey, the top three goals for these millennials are, number one, was a debt repayment. Number two was travel. Number three, increasing the amount they save for retirement. And so looking at this, and I go, wow, hold on a second. We've got young people that are now kind of tuning in and they've got the goals laid out, right? They want to repay debt. They want to do some travel, but they also want to increase the amount they're saving for retirement. But if we go back to the stats on the front end of this,

my friends, we understand we got a problem. 86% of them have financial goals. 69% have no emergency fund whatsoever. And 60% have no retirement account. So what you have is you got a goal, but you don't have a plan. And as I've told people for years, I heard an NFL coach say this years ago, a dream without a plan is called a wish. And I love that we've got young people that are having the dreams and the goals. Don't get me wrong, but you need a plan is called a wish. And I love that we've got young people that are having the dreams and the goals. Don't get me wrong. But you need a plan to help you be able to get there. You can't blink.

Like when I was growing up, I used to watch a show called I Dream a Genie. And I just dated myself right there. You young people don't know anything about that. There's a little woman. She'd pop out of a box. Anyway, listen, she would blink and things would just happen. The reality is, is in life that doesn't happen. I can blink till my hair starts to grow back, which is never, but it's never going to happen. You got to have

a plan. You got to do some stuff. And so I want to encourage you out there. If you're a millennial gen X, gen Y traditional, it doesn't matter. You want to get plugged into a plan that works. And I'm talking about one that changed my life and that's financial peace university. You've got an opportunity to change the game. You really and truly do. And I want your dreams to become a reality. That's one of the things I talked about in my first book, Retire Inspired, that I want your dreams, I want you to see them in high definition, like you would see them in a TV. But what we have to do is have the plan. That's so important. So Financial Peace University, online membership that gives you a great opportunity to plug into information, not only to just drill into it and use the plan that's helped over 6 million people.

Hear this. Okay, helped over 6 million people get out of debt, build wealth, and begin to chase down their dreams. So I know it'll work for you. We just have to take that step. It's just interesting. Again, that article is from ThinkAdvisor, and it's talking about the millennials' top three goals. It's an interesting read. I think the most important thing for us is to identify what we want, but how do we get there?

What's the plan? And I think we can't waste time. We've got to be intentional. All right, I'm going to get back to the phone. I've got Stacey on the line out in Idaho. Stacey, how are you? Good. How are you?

I'm focused and not finished, young lady. What's on your mind today? Well, me and my husband, we're at the point where we're just ready to start building our wealth, and we're just trying to figure out what would be the best kind of investment to start off with. Our house is paid off. We're debt-free. We got 35% of our paycheck going in our 401k. We got a separate Roth IRA

already. We're just figuring what's the next move. Okay. So you said your house is paid off? Yes. When did you pay your house off, Stacey? A couple of years ago. That's fantastic. What's your house worth right now? What would you say? Maybe like $250,000. That's fantastic. What's your house worth right now? What would you say? Maybe like $250,000. That's fantastic. And you said you guys are saving for retirement. What's your household income? Like $110,000.

Okay. So you're $110,000. House is paid off. No debt whatsoever. Are you guys working with an investment professional um no okay so how did you pick your 401k investments uh well my husband's been listening to you for like ever since you guys i mean i think he's been i am not that old i am not that old dave is old hogan is young. Okay, Dave. He's been listening to Dave forever.

No, here's what I... He's pretty smart with it. Is he? That's good. How old are you all? I'm 37 and he's 43. That's amazing. How much would you say all total, Stacey, you all have saved up for retirement?

Like including house and everything? Yeah, in total. Yes, ma'am. With or without the house, either way. Like 1.1 million? Okay, so that would make you an everyday millionaire. Did you know that? Yeah, my husband mentioned it. Have you ever said

it, though? Yeah. No, you haven't. It just seems, I don't know. It seems far-fetched. It is not far-fetched. You added the stuff up. Stacey, I want you to count to three. I want you to tell me, Hogan,

I'm an everyday millionaire. Go ahead. Hogan, I'm an everyday millionaire. See, there it is. And that ain't an accident right there. That's not an accident. You know what that's called? That's called you all being intentional and working. That's you all keeping your eye on the prize. And so I'm proud of you with what you've done, and I want you to be proud of you.

That's nothing to be ashamed of. And I think the best thing you all could do right now in this position, because as young as you are, you're out of debt, you're building wealth. I want you to do what's called start to look at building your bridge account. Now, this bridge account, Stacey, means that before you can touch money in 401ks and 403bs, you've got to be 59 and a half. I want people, I've told people with my first book, Retire Inspired, retirement's not an age, it's a number. And so I want you all to have some money to live on when you retire prior to getting to that age. So I'm going to tell you what I'm going to do. Kelly's going to get your information. I'm going to send you a copy of my Everyday Millionaire book. And I want you all to read about that. The bridge accounts talked about in there because I think you all have an

opportunity. I don't think you need to invest anymore. Now what you need to do is start to look at what else are we investing in. So it's not an addition to you guys are already doing the 15% and you've got money set aside. So you're rocking there. But now it's a matter of being intentional on the bridge account. But I need to tell you this, Stacey, you also have to play defense. Five minutes of stupid on a car lot can cause you to go backwards. Five minutes of going to look at a boat. So you know what it is? Don't go look at stuff. Be careful, be intentional, and pay cash.

This is The Dave Ramsey Show. Hello, everyone. You are listening to The Dave Ramsey Show. I am Chris Hogan filling in for Dave this hour, and we've had a blast. If you're out there and you've got a question, I want to hear from you. The number to call is 888-825-5225. Again, that's 888-825-5225. You have an opportunity to call in. Let us know what's on your mind.

We're here to help, and that's the deal. That's what we are all about here at Ramsey Solutions. We're very focused on giving people hope and giving people guidance. Just want to make you aware, if you're out there and you're going, Chris, this information is helpful, we need to make sure that we're helping young people. And I couldn't agree with you more. The bottom line is we have what's called our foundations curriculum, which is set up to help guide middle school and high school students. And we also have a college curriculum to help guide young people on this so they can avoid some of those mistakes. And I think it's imperative for us to talk to these young people, to be able to guide them

and help them to avoid some of the things that we've done in the past. And so we've got a great opportunity. If you want more information about that, you can go over to DaveRamsey.com and click on the foundations. It's in our Ed Solutions department. You've got an opportunity to learn more so we can empower young people so they can make the right steps. Okay, let's go to the phones. We're on line three. I've got David in Ohio.

David, how are you? Great, sir. How are you? Oh, I'm focused and not finished, my friend. What's on your mind? So my wife and I are recently debt-free within the past two months. Great job.

And we have fully funded our emergency. Oh, thank you, sir. Yes. We have fully funded our emergency fund. So now we're on baby step 3B, and we want to pay 100% down for our house. We're not going back to debt. Yeah, buddy.

How long should we allow ourselves to save up for the house while not yet contributing 15% to our retirement? Okay, good question, David. Tell me this. How much debt did you all pay off? Sir, we were fortunate enough to pay off $103,000 in 13 months. Goodness gracious. What kind of debt was that? So about 90% of that was student loan debt, and then the remaining 10% was both consumer and medical.

That's amazing. What's your household income, David? We started out at $64,000, and now we're $154,000 before bonuses. Wow. Okay, so you all are extremely intentional right now. Do you have a three- or a six-month emergency fund? We have a six-month. You got a six-month.

Good. And you guys work in stable jobs? Yes, sir. Okay, that's good. You call me Chris, David. And so you look at this, and so how much do you all have saved for Baby Step 3B so far? So far, we're going to be taking a trip coming up. But if we were just to put the money beyond that towards our house, we probably have about $10,000 saved up.

Okay, about $10,000. And how much do you think you all are looking to spend on a home? I think our first home we'll probably spend around $225,000. Okay. So you look at that. So that's $225,000. You. So you look at that. So that's $225,000. You're wanting to do 100% down on a home. And so do you all have any children or is it just the two of you? Just the two of us. Okay. Well, you're wanting to do 100% down, right? Absolutely.

Okay. So this is a little bit different. So baby step three B is typically where people are saving for a home down payment. Okay. So that's minimum 10%. I'd love for people to do 20% because they avoid PMI, private mortgage insurance. But with you all trying to do 100% down, this is really sitting down, looking at the budget and going, okay, how long will that take us? Right. If that were the only thing we were doing? Okay, and I just, mindset-wise, you sound like you crunched some numbers, right? Okay, I can tell.

Yes, sir. All right, I can tell. And so if you were to just focus on that, and I'm going to ask you, David, just to go out on a limb, how long do you think it would take you guys to save up $225,000? If we're super focused like we've been, I bet you it'll probably take us about two and a half years. That's exactly where I was landing. And so now, you know, you guys have to kind of be mindful

and kind of keep your hand on the pulse. It's a little bit like driving a manual, a stick shift car. You've got to learn how the RPMs to get them up to be able to shift, and there's a time to downshift. So I liked that you guys were talking about taking a little bit of a trip to be able to breathe. Uh, and so it's that mindset of thinking, okay, that's two and a half years, right? And at you all at your stage where you are right now, you've put yourself ahead of the game being very intentional financially. So in two and a half years, you guys could do that. Now you could also also save up $100,000 and decide, okay, or your wife says, you know what? It's time.

We need to get in the house. And if you do that, I would just say, you know, you would only go a 15-year fixed rate mortgage. And then, of course, you are going to attack it. You all both will and get it out of your life as soon as possible. So I'm proud of what you all have done. I'm proud of your focus and your intentionality. That is amazing. And again, paying off $103,000 in debt in 13 months means you're not messing around. And so I appreciate you. Congratulations.

Thank you for your call. Next up, I'm going to Amy online for Amy. How are you? Hey, Chris. Focus on trying to get finished. I like that. What are you? Hey, Chris. Focus on trying to get finished. Oh, I like that. What are you doing? All right.

So my husband and I have done fairly well. We've been working James Ramsey's plan for, gosh, 10 years now. Good. We are basically three years away from paying off the house. Okay. We have been investing in our retirement this whole time. We are debt-free except for the house. Good. Baby step six. Okay. Um, we are three years away. I can see the finish line and I just want to get there. We have the added hiccup of we're putting two kids through

Christian education and we, our oldest is two years away from high school. When we get to high school, education costs are going to go up and Christian education is our choice. We choose it. We're not changing. We're going to do that, but it's going to make, it's going to get tighter. We, I'm trying to figure out, can we pay the house off before she's in school, in high school, should we pause on retirement to throw the money at the house and have it paid off in 18 months? Okay. That was me taking a deep breath. Amy, how much do you owe on this home?

$47,000. $47,000. What's your household income? $110,000. $47,000. What's your household income? $110,000. Okay. How much do you all have approximately saved in retirement, the two of you together? $500,000. Okay.

And what's your ages? 41 and 43. 41, 43. You don't owe on anything else? Nothing. How much is this private education costing? We're currently spending about $20,000 a year. On both or one? The two together.

Okay. And it'll go to $25,000 and then $30,000 respectively when they're both in high school. Do they get like a half a college diploma too? Do they get a quarter of one or something? I mean, that's a lot. Well, when I went through the same school, I came out of the high school with 23 college credits. Okay.

This is something you guys believe in. It is 100% we believe it. Fantastic. And you and your guys believe in. I 100% believe it. Fantastic. And you and your husband are in unison on this. Absolutely. Great. You know what else I want you guys to get in unison on? Finding extra money to come in to attack and pay off this house.

Okay. In unison. Nope. But not retirement. There's no reason to. And I get it. And I know, you know, initially you guys are focused. You're not finished. You're focused, though.

You've been very, very focused. And you've got the beauty of compound interest happening. You guys are digging in. You're looking at this. You're thinking things through. You're planners. Right now your mortgage payment is how much on the home? The actual payment is $1,450 a month, and we're making $1,600 a month. Okay. So you're sending some extra money toward the house. I think you guys, in looking at this,

again, it's an option. Okay, we'll call it that. I'm not going to call it a viable option or a good option, but you can call it an option to look at that, pausing the retirement. I don't like that option. So I want you guys to go back to the drawing board and start to look at this and go, what else? What's another option? You know the set dollar amounts that you're looking at. You know that you're staring at $47,000 left on this home, which is a massive deal for you to be able to attack it and pay it off and get it out of your life, which is awesome. And I want you guys to be able to do that.

But I like you putting money away consistently for retirement. Why? Because it assures you guys are never going to be a burden to your children. And that's a big deal. You're staying focused and not finished. I appreciate the call. I want you to keep drilling in. Well, listen, I want to thank all the callers for taking the time to call in.

I want to thank all of you for tuning in. I want to thank James Childs, our producer, associate producer Kelly Daniel, and our audio engineer Bobby Robertson. And listen, until next time, I want you to stay clear on your goals and know exactly what it is you're chasing down because your dreams matter. This has been The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of

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