The Ramsey Show - App - Hiring a Real Estate Agent You Can Really Trust (Hour 2)

Episode Date: October 5, 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 the 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. I think I'm getting old because I'm

getting more and more nostalgic. I was thinking this morning about the neighborhood I grew up in. And you know, as you get older, you don't remember the bad stuff. All you do is remember the good stuff and so it's very idyllic in your mind it was an idyllic neighborhood it was incredible it's full of kids and we were always doing something you ever get a piece of plywood out and put a couple of bricks up under it and go across it on your bike like the evil kenevil you were jumping and it didn't go well and you go over the handlebars.

I mean, have you ever done stuff like that? And we didn't even wear helmets. I mean, we played baseball. We played football. We spent a lot of time arguing about the call because we'd always argue about whether somebody was out of bounds. We played and played and played and played and played, running in and out of each other's houses.

And one mom always had some lemonade, and one mom would always have some bologna sandwiches. I mean, it was a great neighborhood. And I remember being a little kid, and some of the kids I played with started going to school. And I thought, man, I want to go to school. It'll be cool to go to school. i can go to school i'll be happy then you ever thought that and and then i got to go to kindergarten and i thought man next year i'll be in a grade with a number on it i'll be happy then they teach you to read in the

first grade i'll be happy then and when i back when I went to school, and I don't know where you go to school, but, I mean, we had one through six was elementary school. And so, you know, you're about a second grader, and all the sixth graders, they're the king of the hill, right? They own the school, right? And so you're like, man, if I could just get in the sixth grade, I'd be like the big dog on campus. I'd be in charge. I'd be like the big dog on campus. I'd be in charge.

I'd be ruling the school, man. I'd be happy then. Then you finally get to sixth grade, and you know what? You look over there, and we had what we called junior high school or middle school, which was 789, the school I went to. And I thought, man, if I could just get out of sixth grade and go over there to middle school. You know, they've got PE. They've got football.

They've got cheerleaders. They've got cheerleaders. They've got lockers. Man, if I could get over to middle school, I'd be happy then. Do you remember that? And then I was in middle school. I got to be about the ninth grade, and I was 14, 15 years old, and one of my buddies got his driver's license.

And, oh, man, if I could just get my driver's license, I'd be free. I could drive myself to McDonald's, and we'd go through McDonald's. I'll tell you how long ago it was. We would go through the McDonald's drive-thru, and we could get a Big Mac and a small Coke for $1.16. And we were scratching together the $0.16 always. You could scratch the buck, but the $0.16, that, you know, man. A dime, a nickel, and a penny right there, right?

Got to be ready. If I could get my driver's license, I'd be happy then. And then we got our driver's license, and we're riding around. We're all in high school. And finally, if we could be seniors in high school and homecoming queen and king we'd be happy then and then when you're a senior in high school some of your buddies go off to college and you know in college they don't even care if you go to class nobody takes role man there's nobody looking over your shoulder you could like be a grown-up if i could just get college, I'd be happy then. And then you get to college and you go, man, this is hard.

If I could just get out of college and get married and have 2.3 kids and buy a house on a street with a picket fence and start my life, I'd be happy then. And you get out and you get married and have 2.3 kids, you go, I want to go back to college. I'd be happy then. Have you ever noticed that happiness is a bully in the schoolyard? As soon as he draws a line with his toe in the sand, it says, cross this and we'll fight.

You step across that line, he backs up and he draws another line. You cannot buy happiness with money. You can't even chase it down because it's always moving. You can buy fun. It is fun to go on a really nice cruise. It is fun to go to Hanama Bay and dive one of two underwater national parks. The other one's Key Largo in the nation. It is fun to see the Hubbard Glacier in Alaska.

It is fun. You can buy fun, but you can't buy happiness. The most powerful financial principle you will ever learn in a culture that is full of angry people, in a culture that is full of isms, sexism, racism, ism, ism, ism everywhere, in a culture full of mean, angry, disjointed, toxic people, the most powerful financial principle you will ever have is this one. Contentment. When you are content to just be,

then you're not at the beck and call of a bunch of people telling you how to live with the way they live on Facebook. Their highlight reel is on Facebook. Nobody really lives that way. You don't have to do what other people think. You're not driven by other people's opinions. And you're not chasing happiness, which is a bully in the schoolyard when he draws a line in the sand, he'll back up and say, I'll be happy when I get that new car.

I'll be happy when, no, you won't, when I get to go on that vacation. I'll be happy when I get to quit work and stay home with the kids. No, you won't. Happiness is not a destination. You can buy fun with money, and I don't mind you doing that. But where you'll get in trouble is if you get confused, because if you get confused between fun and happiness, you will never achieve contentment. And if you never achieve contentment, you will always be in debt,

because you'll always be buying stuff with money you don't have, stuff you don't need with money you don't have, stuff you don't need with money you don't have, to impress people you don't even really like. Because I'll be happy when. I'll be happy when. Famous last words of broke people. Contentment. Content people.

Once you reach a level of contentment, you can get out of debt pretty quick because you suddenly don't care what other people think and you suddenly don't even care what you think. You're just like, it's going to be okay. I'm all right. When you reach contentment, your generosity goes way up because you don't feel like you have to have that money to be happy when. When you reach a level of contentment, your investing level goes way up. And the weird thing is, is your wealth level will go up. You have a higher propensity, a higher probability statistically of being wealthy by being content with not being wealthy. Because you're able to save, you're able to avoid debt,

you're able to increase your generosity, and you don't live your life in this constant state of dissatisfaction saying, I'll be happy when. This is the Dave Ramsey Show. 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, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization organization CHM members share to pay each

other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thank you for joining us, America. We're glad you are here. Vanessa in Miami, Florida. Hi, Vanessa. How are you?

Hey, Dave. I'm wonderful. Thanks for taking my call. Sure. What's up? So a few years ago, we signed our children up for a Florida prepaid college plan. And my husband and I were both making more money at that time. And since then,

our income has gone down and we added another child and we've gotten into some credit card debt and we have a car loan now. We can take the money out that we've invested over the past three years without penalty. Should we do that or should we just pay off our debts and leave that money and continue contributing to their prepaid plan? How much is in there? About $8,600. $8,600. And how much do you owe in your car? We owe $10,000. And what do you owe in your credit cards?

$5,000. Okay. And are you guys on a budget and reducing debt already? We just started FPU, and that's when I realized we did the baby steps out of order with having this pre-plaid pan, and then I don't know what to do at this point. Gotcha. Okay. And your household income is what? My husband makes $45,000,

and I have a small business that brings in about $12,000 a year. Okay, so about $60,000, give or take. All right. Yeah. No, I would not cash it out. I would stop adding to it. And you do need to get on a budget and follow through with what you're learning in Financial Peace University and just work your baby steps.

If you stop adding to it, you'll be fine. The other thing I probably would do, no emergency, no rush, but sometime in the next year or two, I would probably take that money out of there and roll it into a 529 plan in good mutual funds. And here's why. You're much better off to save for college in a 529 or an ESA in mutual funds than you are with prepaid college plans. Here is the reason. Anytime you prepay something, your rate of return is what it increases in price.

And so if I prepay an item, I pay $1,000, and it increases in price to $1,200, my rate of return, if it did that in one year, would be 20%. So that would be a nice rate of return, right? So how much did it increase in price? Because that's the only return when you prepay anything. They're not giving you an interest rate. They're not giving you a growth rate. You simply are saving the increases in tuition by paying it ahead of time.

That's all you're doing. Now, tuition for the last 70-odd years has averaged about 7.2% inflation rate. So that means you're making about 7.2% on your money when you do prepaid college. In a good growth stock mutual fund, you ought to be 10% to 14% average annual return over that same period of time. Mine do. And so you make more by putting it in, and you actually get some headway towards college. The other problem with prepaid college is, and it's a blanket statement, and it would vary from state to state, many, many, many of the state's business government are very poorly run.

And they screw up some of these prepaid college plans in the process. I mean, they're just horrible administrators. Now, some states are well-run. My state happens to be well-run. So in the state of Tennessee, I wouldn't be concerned today, under the current administration, with the stability of the fund. I still wouldn't do prepaid college, even in Tennessee, because of the other reason I was talking about.

I want a better rate of return on my money than simply the inflation rate of tuition. So all of that to say I would roll your $8,600 into a $529 on a good mutual fund at some point. Right now I'd just stop adding, get yourself on a budget, crank your lifestyle down, stop going out to eat, cancel the trip that you had planned called a vacation because you're broke and you've been spending more than you make, and you have to stop that. And that's how you got a car loan and credit card debt. So you're right on track.

You're doing the right kind of things. And that's what I would do if I were in your shoes. Matthew's with us in Fort Worth, Texas. Hey, Matthew, how are you? I'm excellent. I want to thank you, first off, for helping us going through fpu for the last seven years we paid off over a hundred thousand dollars good for you and would have been in bankruptcy had uh had we not gone through fpu wow so but to my question because this is a wonderful thing that's

fixing to happen uh we've my family my parents have received an inheritance of mineral rights in West Texas, a large portion. And haven't struck oil, a lot of oil. We've had it for 100 years and had a few oil wells, but not a ton. Speculators are wanting to sell or buy our rights for a large sum of money, over a million dollars. And we're deciding whether or not we should sell and cash out, or hopefully, you know, we're being told don't sell because there's going to be a boom. And we want a large, nice inheritance, and I want to make sure it's managed properly. Well, there's only a boom if it's not a dry hole and there's only a boom if after

it's not a dry hole there is actual uh oil prices that sustain uh drilling uh and and that's one of the reasons west texas is struggling right now oil prices are so far down that there's no boom okay i mean when gas is five dollars a gallon there's a boom baby i mean but uh and could that come back yeah it just probably depends on you know what opec does on turning on or off the faucet on the supply demand that's the issue all of that to say i'm no expert on the oil business i don't know much about it at all i think i just about said everything i know just then uh but um and so the way i ask myself the question if i'm in your shoes and you might answer the question differently than i would because you might know more or your family might

know more uh oh let me ask you this do you have to sell all of them you have to sell all of them is it all or none no it's not an all or none uh what the it's it's essentially uh they're looking at uh three million for all and uh and uh or you know obviously 1.5 for half okay so you're just talking about selling half anyway yeah and my biggest concern is the risk yeah we are not oil people yeah the thing i'm the thing i'm asking is let me i'm stopped so you're only talking about selling half? We're deciding on how much to sell. Okay. All right.

If I were in your shoes, I don't know much about the oil business, and if someone asked me if I had a pile of money in the middle of my kitchen table that said $3 million on it, would I go buy oil rights with it? My answer would quickly be no, mainly because I don't like that much risk and i don't know much about that okay those two things would take it off the table for me i would rather buy something else with it that i that i know a little bit more about like real estate and it's a little bit more predictable and less risk personally okay but that's the way you ask yourself the question if i had three million dollars piled in the middle of kitchen table would i go go buy oil rights in west texas with it if the answer is no then it's time to sell for the same reasons that you know that you wouldn't buy and exactly and that's that's what

i agree with is getting the family to understand that you know well we're afraid the stock market might crash yeah well it might but i gotta tell you stock market's less risk than drilling holes yeah we're 100 sure of that you don't i mean walking around since tells you that you don't have to be an oil person to know that now uh so what i would do uh the family has to these are family owned and so you can't just sell like yours off uh no this is i'm i'm helping uh my mother and father make a decision oh i see so is it just them yeah they can make the decision for the whole thing or not yes okay all right then if i were in their shoes i would at least sell 75 of it okay i probably would sell it all

but on the off chance that they're just dying to be a little bit in the oil business and they're scared to death of FOMO, they're scared to death that they're going to miss out on something here, right? So if it struck right after I sold it, I'd regret it the rest of my life. Those kinds of statements. Then maybe keep 25% of it and sell 75%. And then let's buy some real estate or buy some mutual funds or something that's a whole lot less risk with that.

I'm definitely not going to advise that a family's entire portfolio of $3 million net worth be tied up in oil rights. I wouldn't do that personally and if somebody asked me as a financial coach should they do that, I would say no. I would say no. I would say no. So I would take the majority or all of that money off the table.

Thanks for calling in, dude. Good news to have a blessing like that, though. Wow, that's pretty cool. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have

for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. Thanks for joining us, America. We're glad you're here. JP follows me on Twitter, at Dave Ramsey. 800 and some odd thousand of you do.

What's your opinion of buying a vacation home with cash and then renting it out when you're not there? Nothing wrong with it at all, as long as you're doing it with cash and you're debt-free, everything but that. I mean, your home's paid for, everything else is paid for. A vacation home is a wonderful extra as you start building some wealth. But basically, what is it? It's a very large toy, very expensive toy that goes up in value, hopefully. And if you rent it, it might make you some money.

My family, not me, my family, the rest of them, most of the rest of them, including the grandkids, just spent a week down at Rosemary Beach, Rosemary Beach the other day, and rented a house on the beach a really nice big expensive multi-million dollar house for the week and obviously some people own that and rent it out by the week um here's the thing about resort rentals vacation home rentals um you're gonna make some money on it but you're not going to make you're going to make usually enough to after you pay all the fees for the maid service and the you know resort rentals aren't like a traditional rental where you know for 10 or something you can get the

property managed they usually take half of it to manage it and that covers you know maid service and that kind of stuff and then there's a whole bunch of the time it's not rented. And so while you do get a great rate per week during a high season with a ski house, a house in the mountains for snow skiing or a beach house or something along those lines, you're not going to get rich on renting it out. You're really not. I mean, it's not really a great investment property. It's more of a way to offset some of your annual costs of your toy.

If you look at it that way, you won't be disappointed. But if you actually run the numbers out, you're not going to be thrilled with it as an investment. You're better off to just buy investment property. It'll make you more money per dollar invested. And it's not as volatile, and you don't come in and, you know, renters haven't, you know, vacation renters haven't torn up your stuff or spilled wine on your carpet or whatever. And I know that there's a deposit, and I know this stuff gets fixed, but I also know people are living in there sleeping in your bed,

and you just have to think about that, you know, and it's just the way it is, and even a nice home and even nice people like the Ramseys staying in your home, we didn't tear up stuff. It wasn't a frat party in there. It was, you know, babies and grandmas and that kind of stuff in there. So it wasn't anything like that. But, you know, stuff, I don't think we broke anything, but stuff gets broken.

And you just got to know that. And for some people, let me put it this way. For Sharon Ramsey to walk into the place where she wants to go on her second home as a vacation and someone else to have been in there and some of the stuff is out of place or broken or dirty, it would kind of take a lot of the joy out of it for vacating there for her. And so you have to think about that. That's a price you pay to rent it out. And all of that to say it's not an ideal

investment property it's more like a way to cover some of the costs of your toy if you want to rent it out we've got a lake house we don't rent it out we've got a condo in another city we don't rent it out and um so it has to be a our income and our assets have to be large enough that we can accept that thing just sitting there in the months that are weeks that we don't use it. But it is. In both of those cases, they're a very small percentage of my overall net worth, and so they're a toy. It's just a toy that happens to go up in value in both of those cases. That's kind of a nice part of the toy, but it goes up in value, and I still have to do the maintenance on it and fool with it.

And, you know, going in the condo the other day, we stopped in there. We got a condo over in Knoxville. We went to the ballgame over there, and the heating air was out. So it was hot. The air conditioner was out. So $300 later, it was fixed. But there's always something. You know, you just figure that's part of the equation when you own property.

The more crap you own, the more repairmen you have to know. It just goes with the territory. So as long as you can handle all that emotionally to go with it, and you're not looking for it to be in a big-time investment that you get rich on, then you'll be fine. Jamie is with us. Jamie is in Alexandria, Louisiana. Hi, Jamie. How are you? Hi, Mr. Dave. How are you doing? Better than I deserve. What's up in your life?

Well, Mr. Dave, as of August, the end of August, I have a friend who has been following you, and she gave me some information, and I have been struggling as a single parent, and I just got a new job in the month of March. And I'm like, I make enough income, but it's like I don't have any money left over to buy groceries or to put gas in my car, and I work a pretty good ways away from home, and I have two boys, one in high school who's in sports and very active, and another son who's in junior high, and he has a lot of things going on as well.

But it's just everything doesn't balance out. I pay my tithes, and I don't miss paying my tithes. I'm a good Christian mom. My income is $3,000 a month. It's just everything is not adding out. Got you. So how much is your house payment? I pay $800 a month for rent.

Okay. And how much is your car payment? It's $292 a month. Okay. How much do you owe on that car? I have $8,000 left. Okay. That's not bad.

But your take-home pay is $3,000. That's $36,000 a year, so that means you're probably making about $45,000 before taxes. Does that sound right? Yes. Okay. Each paycheck is $1,000 and something. So for the month, I make about $2,200 a month from my job, and I get about $992 in child support, so about $3,000 a month total in income.

Okay, a little over $3,000. Okay. Yes, sir. Well, you don't have3,000. Okay. Yes, sir. Well, you don't have a lot of wiggle room here raising two boys. But let's stop a second because it sounds like you're paying bills and then trying to eat. I want you to eat and then try to pay bills. What that means is that we need to start doing a written budget where every dollar before the month begins, you look at your paychecks and what they're going to be, you look at your child support,

what it's going to be for this month before the month begins, and you assign every dollar. And so we would start with a tithe off the top. You said you're a tither. That's cool. That's the first thing we do. Take 10% off. Okay, that tithe is done. Now, what are we going to do next?

Well, we're going to eat. It's the second thing you do, take 10% off. Okay, that tithe is done. Now, what are we going to do next? Well, we're going to eat. It's the second thing you do. You eat. So you do your grocery budget, and you set that money aside. And then what's the next thing you do? You pay your lights and your water. Okay? Then what's the next thing you do?

You pay your rent. Guess what? After tithe, food, rent, and lights and water, there's some money left, but it's not a bunch. Okay? Yes, sir. You probably got $1,500 left if I did my calculations correct there, give or take. Mm-hmm. All right?

I don't know what you want. No, you don't even have that much left as a food. But, you know, you probably got $1,200 maybe. Let's just call it $1,000. You know, after you just run those actual numbers right down the page child support plus my checks minus a tithe minus my food budget whatever I'm going to set up for food and minus my rent minus my lights and water now I'm living and I've eaten and the kids have eaten before we do anything

else oh now we got to pay a car payment or they're going to repo that thing and we got to put gas in the car now how much is left only then do we spend money on something else but you can't go buy something for your son's sporting event and then not be able to pay your light bill right that's not an option how long you been a single mom um they're 15 and 13 now so they were about two and three months old so a decade plus yes you've been fighting it a long time kiddo i have i've been having two jobs ever since they were little. Now you got a better job and at least you don't have that. So here's what you need to do. That's how you do it. You lay out a game plan like that and you make every dollar, but you take care of your necessities first and

then you start working towards some of the other goals and we will help you do that, okay? I'm proud of you. I think you're doing good. You just need to get organized. Jump on, use EveryDollar at EveryDollar.com, the budget app, and I'll send you a total money makeover book. Hold on. thank you for joining us america we're glad you're here alex is in omaha nebraska welcome to the dave ramsey show alex how can i help hey dave how are you better than i deserve what's up just quick question about I am paying off my house. I am 22 years old, working full-time, and I am debt-free, so that's a good quote, other than my house. But I have about $55,000 in stocks and bonds and roughly about $18,000 to $20,000 in cash, along with money in the 401K. So anyways, with my house, I owe about $80,000 on it on a 15-year mortgage,

about 3% rate. So my question was, do you suggest I take money in the stocks and the cash just to pay it off to start off fresh? I do have a job, so I am making money. Or kind of keep it in the stocks, which I have watched grow over the past couple years. So what are your thoughts on that? Dude, you're killing it. You're 22 years old?

I am. Wow. How are you doing all this? What's your income? Well, I'm only making right around 50 a year, but I did have some family help along with a lot of, well, I had some small family help and then a lot of smart people in my life that helped me invest at a young age of about 17. So it's been about five years of investments that have kind of helped boost that smaller money into having about $70,000 or so in cash or cash and stocks. Well, very well done, sir.

You are way ahead of the curve. Congratulations. Thank you. Well, what we teach folks is to follow a plan we call the baby steps. We think it is the shortest route to wealth. And baby step one is $1,000 saved. Two is debt-free, but the house. You've obviously done those.

Three is an emergency fund of three to six months of expenses. You've obviously done that four five and six you do simultaneously that's 15 of your income going into retirement is baby step four five is kids college doesn't apply here six is pay off the house early so that brings us into our question now the way i look at paying off your house with non-retirement, non-emergency fund money, which it sounds like if I heard you right, you've got $55K in miscellaneous investments that's non-retirement and not your emergency fund. Is that right?

That is correct. And you owe $80K on your house, did you say? Is that right? Yep. Okay. And the way I look at that is, if you owed $30,000 on your house, would you go borrow $50,000 to invest it in stocks and bonds? And my answer would quickly be no. Yeah. and bonds? And my answer would quickly be no. And in essence, if you do a column of your

assets and a column of your liabilities of what you own and what you owe, that's called a balance sheet. You've probably heard that before. And the balance sheet says that those things offset, so it has the same mathematical effect as if you had borrowed on your home to buy those stocks does that mean that it mean if we if we don't if we don't use that money to pay down on the house now i would not clean out your emergency fund i would be willing to take it down a little bit to three to six months of expenses it you know 23 00023,000 or $22,000 or whatever it was, might be a little thick.

I might pull that down to $10,000 or something. You'd be safe as a single guy making $50,000 with a $10,000 emergency fund. So I'd probably pull $10,000 or $12,000, $13,000 out of that, and I'd take the $55,000, throw it at the house, and you can have that house paid off in a year. What's the house worth? It's only worth about $110,000. That's not bad.

22 years old with a paid $410,000 house. That would be pretty nice. Yeah, and then you take that old payment you used to have and all of the freedom that you have mathematically now in your budget, and you use that, that $55,000 will be back in 20 minutes you'll be amazed how fast you can rebuild and how fast you can build investment portfolio when you don't have any payments at all and that's the reason for doing it plus here's what's kind of weird you've made really unbelievably wise decisions for 22 years old i mean you've you're just you're killing it you're a stud and uh thank you you know what else will happen is did you remember when you signed the mortgage

did you feel emotional weight uh yeah kind of it started off with i've actually already refinanced once um but i mean when you did the original deal the first time and you went from debt-free, young, debt-free with money in the bank to now I got a mortgage, do you remember feeling the weight of that? Yeah, especially when it said 30 years in front of it. Yeah, that's what I'm talking about.

Because there's more going on here than simple math. There's complicated math that entails risk and and even even relational and um spiritual things the borrower is slave to the lender that's the weight you felt 30 years oh i can't stand this i gotta get rid of this well the same thing will happen in reverse but on the positive side of hey when you don't have any debt, no weight, nothing on your shoulder, it changes the way you play. It changes the way you do your investing.

It changes the you get. So I got so enthusiastic, dude, when I got free with my investing and with my generosity, both that both of them went into outrageous mode very quickly and so you'll get that 55 back so freaking fast that it'll it'll it'll come back faster than the first time you got it a lot faster it's not going to take you five years this time um but you got more income now too so that's not fair but i mean mean, mathematically, relationally, spiritually, emotionally, when you're free, you just do better. And you just make better choices. And you're already making really good choices. So all of that to say, yes, I would cash out the investments that are non-retirement.

Yes, I would take that emergency fund down to about 10. That doesn't quite get us there. So you've got to lean in out of your budget and cash flow out the rest of that thing and finish it up within, you know, four or five months, be debt free on this, whatever it is, six months, whatever it takes. And then when the house is done, then you then you if you want to build up that emergency fund a little bit fine, but then kick those investments in the butt, get them going again, and you will prosper. You are on your way, sir. It's an honor to talk to you. Very, very well done.

Wayne is in Indianapolis. Hi, Wayne. Welcome to the Dave Ramsey Show. Thanks, Dave. I just want to first say God bless you for all the work you do. It's really made a difference in my life. Well, thank you, sir. How can we help today?

Well, my wife and I have been leading the life of Gazelle for about two years now, and we've pretty much become debt-free other than our student loans, which we were working on. And then we ended up getting my wife got pregnant with her first child in April. Yay! So we took your advice and stopped putting everything towards their debt snowball and started banking all of that. Good.

And as of this month, we now have enough for her to take her three-month maternity leave pain-free for us, which is great. Right. But the problem is, is Murphy has decided to strike. Last week, we got a bill in the mail from our city here, and they replaced some sidewalks here on our lot, and the bill's for $4,400. And with a baby on the way here in another two months, we don't have that kind of money in our cash flow to pay that off in 12 months before they put a lien on our home. So my question is, what would you do in this

situation? Do we deplete our maternity leave fund and pay that off, or what do we do? When's the baby due? December, the beginning of December. Okay. Well, the game plan that we usually outline for folks is push pause on your total money makeover, your debt snowball until baby comes, pile up the cash. When baby comes, push play again and take all that cash and throw it at your dad. Correct.

As long as baby and mama come home and everybody's cool. But the cash is just to make sure everybody's cool, there's no issues, and it's not really for maternity leave unless you have to have it to eat with, but, I mean, it's so that we can use it. So how much cash have you got piled up or will you have piled up by December? We hit $7,500500 this month and like i said she's going to she's wanting to take the three months off to bond with the baby and such and we can't do it on just my income alone so um that's why we were smart about this and set that goal

to make sure that so you've got from now until december to continue to save right correct and what other debts do you have in your debt snowball? How much? Just about $150 a month is what we have in debts other than our car payment. No, I mean, do you have actual debt balances you need to pay off? No, not right now. You owe on your car. How much do you owe on your car? Yeah, we owe our car about $10,000.

Okay. Well, then the $4,000 would be your smallest debt. You'd pay it off out of this cash and then start working towards your car and set aside enough for her to take the three months off. You got the cash. Use it. Hey, guys. This is James Childs, producer of The Dave Ramsey Show.

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