The Ramsey Show - App - Home Buying or Selling is Not a Good DIY Project (Hour 2)

Episode Date: October 4, 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 am Dave Ramsey, your host. Thank you for joining us. The phone number here is 888-825-5225. Mary Ann is with us in Cleveland, Ohio. Hi, Mary Ann. How are you?

Hi, Dave. Oh, gosh, I'm so blessed to speak with you. Thank you for taking my call. Sure. What's up? Well, hey, so we are on maternity leave currently and about to go back to work. So we've been saving up our money, you know, to make sure the baby and everything goes okay. And I have a question for you.

We have, unfortunately, a whole life policy where we have about $25,000 in cash value. We've been paying off debt. We have about $8,000 left. And I'm just wondering, Dave, what do I do with that money? Because we've saved up some money being, you know, planning for the baby, we have our emergency fund. So do I just, what do I do with that $17,000 after I pay off a car? Do I put it towards paying off our home or put it towards a college fund for our additional child, a Roth IRA? I just don't know what to do. Okay. Have you ever heard us talk about the baby steps? Yes. Okay. Baby step one is $1,000 saved. Two is debt-free, but the house. Three is a fully funded emergency fund.

Correct. It sounds like you've got enough from saving up before the pregnancy to call that the emergency fund. Yes. And in addition to that, you've bought term insurance, and it's in place before you cash out your whole life, right? It will be, yes. Okay. And so you have an emergency fund already. Is that what you're telling me?

Correct. Okay. And how much is in the emergency fund? Well, we actually have about $40,000. Okay. And the reason we have that is because... What is your household income? It's around $140,000.

Okay, good. Very good. And you and the baby are healthy and everything's fine, right? Correct, yes. Okay. And you owe $8,000 as your only debt other than your home? Correct. Okay, I'd write a check today and pay off the car.

Okay. Out of your $40,000. Okay. You have too much in there. All right. Your emergency fund should only be three to six months of expenses. But you built that up, like I told you to, until the baby came and everybody's healthy. So that's cool.

Okay. So now what would three to six months of expenses be? What would that amount be? I would feel good with about $35,000. I didn't ask you what you would feel good with. I asked you what three to six months of expenses would be. Well, I would say probably around $25,000. Okay.

Then maybe that's six months of expenses or three months of it. What's it take to operate your household if you had suddenly no income? Suddenly no income with everything. Do you include possibly still saving for no not saving operating you're barely keeping your household afloat i would say about three thousand a month okay so three months would be nine thousand six months would be eighteen thousand and so with you having a need to have a little more 25 is probably pretty good okay so if we're going to write a check for eight out we have 32 so there's seven left there above your you have a

$25,000 emergency fund and then that brings us to baby step four with that 7,000 or and with the 25,000 that you're going to get out of get when you do get the whole life money back later, right? Right. So your question is what to do with that. You need to start then putting 15% of your household income into retirement. You can do that without using this money and just set that up as a monthly thing. I would then use some of this $32,000, and let's go ahead and fund the new baby's college fund. Is this your only child?

No, we have – this is our second. So we already have a nicely funded one for our first daughter. Why am I not shocked? You are a saver, girl. You really are doing good. Well done. Okay, well, let's nicely fund. You know, maybe take $10,000 and, you know, go ahead and do your college fund, sit down with your SmartVestor Pro and preload that into some good mutual funds.

That still leaves us $22,000 more. I'm going to go ahead and start throwing some of that at the house then. And any more money I can squeeze out of my monthly budget without squeezing too tight. Now it's time to live. But you got zero debt except your house. Your emergency fund's done. College funds are well on their way. And you're putting 15% of your income now into retirement.

We're going to throw 20-something thousand, 20, 22 thousand, whatever. You want to blow a little bit of it, that's fine. Throw 20 grand at the house, roughly. What do you owe on your home? 117. Okay all right yeah we're gonna get it get it down below 100 and you're making 140 you'll probably have it paid for in maybe three four years that would be great yeah how old are you guys we're 40 okay yeah that'd be a time you're 45 everything's paid for two kids man you're on your way you're doing good

really well done but that's how we would apply the baby steps to your questions. So go ahead and be debt-free, everything but the house today. Write the check before the sun goes down tonight. Write the check on that car. Sarah's with us in Nashville. Hi, Sarah. Welcome to the Dave Ramsey Show. Hi, Dave.

Thanks for taking my call. Sure. What's up? So two years ago, my brother-in-law, who we thought was an idyllic Christian, was caught leading a double life, just tons of porn addiction and just various affairs. And as a family, we felt very betrayed by this. My sister, however, chose to return to him really soon after, and he has supposedly truly come to Christ and has turned his life around. But as you can imagine, I do not trust this guy at all.

And what makes it tricky is that I still have to deal with him. And I guess with Christmas coming up, it makes this issue fresh for me. Why do you think he hasn't turned it around? I don't know. Just the magnitude of the betrayal. I mean, it was heavy. It was five years of yeah how long ago how long has it been that he supposedly turned it around though two years okay how long how long has he

got to be clean and living a straight life before you believe him um i don't know. I don't know. That's the thing. I think distance doesn't help. Okay. So you think if he's clean for 10 years that he's still not turned his life around? You think if he's clean for 20 years he still hasn't turned his life around? Well, I mean, that's the thing with this type of thing. How do you know?

I mean, he got caught. I don't think he's got the problem. I think you do. Okay. Okay. All right. You need to forgive. I mean, give people a chance to turn their lives around.

If he's doing something that says otherwise, fine. But, you know, if he's really clean for two years, I mean, if you've got a reason to suspect, other than the fact that he let you down once. But let's give a guy a chance to start again. Hey, I agree with you. I think he was scummy. And he'd probably tell you he was scummy. But if he's really turned it around at some point, you've got to give him some credit for that.

I mean, that's such a gargantuan thing to turn something like that around. Somebody quits drinking, are you ever going to forgive them? Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and a struggle to make ends meet, but they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance

and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is.

Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. If you're tired of feeling powerless and stressed about your money, well, now is the perfect time to take control of your money once and for all. You just need the right plan. Financial Peace University is that plan. Almost 5 million people have changed their lives with this step-by-step class, and you can too.

You can get out of debt, get on a budget that really works, learn to talk to your spouse about money. You can save and become wealthy, invest and become wealthy, give with outrageous generosity. The average family pays off $5,300 in debt and saves $2,700 in the first 90 days. It works. Financial Peace University. You can find a class near you at DaveRamsey.com or call 888-22-PEACE, 888-227-3223. One of my favorite books on working with people changing behaviors is called Boundaries by Dr. Henry Cloud.

I read it many, many years ago, and since then, Henry and I have become really good friends. I love Henry. I love that book, too. And one of the things I grasp from reading that book and other books is this. There is a difference between forgiveness and reconciliation. Those of us that are wise in emotional maturity, spiritual maturity, and those of us that are Christians are called to forgive. When you forgive, you set yourself free from the bondage of the offense.

You're offended, and when you forgive, when you're a victim and you forgive, you're not setting the victimizer free, you're setting yourself free. You can forgive someone and not be reconciled to them. A young lady called a minute ago and was trying to figure out how to, should she reconnect with her brother-in-law? She's having trouble reconnecting to her brother-in-law after he had affairs and everything else, and he's supposedly come clean for the last two years. His wife has forgiven him and taken him back and been reconciled to him, but not the sister-in-law. She doesn't want to be around him. So here's the question.

At what point for someone's misdeeds do you forgive them? And then at what point are you reconciled to them? They're different okay someone rapes you what a horrible grotesque violent unbelievably vile crime i can't imagine can't imagine going through something like that. But to not forgive them eventually as you begin to heal from your emotional scars is to not set yourself free from that. Very difficult to do. I'm not saying it's easy.

But when you do forgive them, you set them free. But you would not be reconciled ever to someone who raped you meaning you wouldn't go on a date with them you know someone steals your wallet you can forgive them but you're not gonna you know leave your wallet with them later your new wallet for them to watch over your money, you wouldn't be reconciled with them, probably ever in that situation. But in the case of that young woman, she was not personally wronged. Her, you know, the guy's wife is who was wronged, right? And her sister-in-law was wronged, her brother-in-law. I don't know how it worked.

It was her brother-in-law. But anyway, I guess her husband's family is the way I understood it. But anyway, the lady, the wife is who was wronged. She forgave and was reconciled to the husband as he supposedly is putting his life back together. I don't have any idea if he put his life back together. I don't know the guy. You don't know the guy. Well, once you do that, you can always do it.

Well, you know, people that haven't done it can always do it. You know? Any one of you listening is capable of adulterous affairs. Everyone's capable of that. And if you think you're not capable of it you're just about to have one i mean really that's just ridiculous so at what point do you forgive someone when they've done something wrong at a distance like that i can forgive him and you know i hope he's turned it around and i'm not gonna sit around and wring my hands and be mad at him and worry about him. I hope he's turned it around.

I hope he doesn't hurt her again, his wife. I can do that. Now, at what point am I going to trust this guy again? That's what reconciliation is. At what point am I going to trust that his conversion, his turnaround is real? See, we run into this all the time with our coaching because one spouse lies to the other one about money, what we call financial infidelity. Your husband, your wife lied to you and ran up a bunch of credit cards and you didn't even know it. It's hard to trust them again after that.

Now, if you're going to stay married, you're pretty well instantaneously going to have to sit down and go, okay, I forgive you, but I'm not necessarily going to be reconciled to you financially. I'm going to watch over your shoulder on everything that's going on. Or we have a couple come in, and the guy has been found to be a gambling addict, which happens like every week. Football betting is destroying families' finances. It's unbelievable. So he comes in. He's discovered, she's discovered he's a betting addict, an online betting addict, a gambling addict.

And now he's gotten treatment. He's in Gamblers Anonymous, and he's seeing his pastor, and he's seeing a counselor, and he's doing everything he's supposed to do. Does that mean she just turns over the checkbook to him and lets him go run havoc again? No. No. As a matter of fact, we recommend that when someone's recovering from an addiction like that, that they not have control, they not have any access to money for a while

until trust is rebuilt over time. But ten years later, trust should be rebuilt. Ten months later, it should be better than it is now. Two years later, it should be better than that. It should progressively rebuild trust. And so if ten years later, you have not bet on a football game again. You've not lost any money gambling again. Are you trustworthy at that point?

Yeah, as much as anybody else is. And so we're not going to treat you like you have no ability to handle money the rest of your life. But for the short term, yeah, we're taking all access to money away from you till you prove that you can behave a little bit. Absolutely. But then gradually, trust is rebuilt. and over time, it's rebuilt. If you cannot, when someone has, on something like we're talking about here,

has not, when someone has demonstrated over an extended period of time that they're not entering into the negative behavior and you can't forgive them and you can't begin to trust them in that area, then it starts to be on you. And two years clean, if the guy's clean from his double life, adulter affairs, or whatever he was doing, porn addiction, whatever it was. It sounded like it was all of that. Two years is a long time. There should be some level of trust rebuilt, assuming it's all real. Now, if there's indicators it's not real, if it still looks like he's sneaking around, if he's still got behaviors that make everybody question whether this is real, then that's different.

But I'm assuming this guy's straight. And if he's straight for two years, then it starts to be your problem if you can't begin to trust at that point, especially given that his wife already has. She might just be an enabler. She might be. She might be codependent. That could be what's going on. It could be that he's cleaned up his life

and you're just so hurt you can't forgive. See, that's the difference. There's a difference in forgiveness and reconciliation. They generally happen at different times. Generally, forgiveness should come faster than reconciliation. But if I pet a dog and it bites me, I forgive the dog. I'm not petting that dog anymore.

We're not going to be reconciled with him. This is the Dave Ramsey Show. It's time to take another look at your budget. That means scouring every expense and making sure you're not leaving any money on the table. One of the biggest expenses is your mortgage payment. I recommend a quick Churchill checkup. In just five minutes, our friends at Churchill Mortgage can tell you if you could save some cash each month. They've helped thousands upon thousands of my listeners keep more cash in their pockets

through a smarter mortgage. I want you to call Churchill for your checkup and see if you can lower your monthly payment, or better yet, see how you can pay off your house early. Think about it. What could you do with your money if you didn't have a mortgage? Call Churchill at 888-LOAN-200, 888-LOAN-200, or visit churchillemortgage.com for your Churchill checkup. That's 888-LOAN-200 or churchillemortgage.com. This is a paid advertisement. NMLS ID 1591, NMLSconsumeraccess.org, Equal Housing Lender, 761 Old Hickory Boulevard, Brentwood, Tennessee, 37027. In the lobby of Ramsey Solutions, James and Tish are with us. Hey, guys, how are you? Hi, Dave.

Hi, Dave. Welcome. Where are you all from? Cincinnati, Ohio. Oh, about a five-hour run down the road, huh? Yes. Very cool. Well, good to have you in Nashville. And all the way down here to do your debt-free scream. Yes, sir.

Wonderful. How much have you paid off? We've paid off $152,000, Dave. And during that time, we also cash flowed another little over $100,000 for paying for kids' colleges and helping our kids get cars because they were all coming to driving age. And we did the 401 Dave plan, made them help us pay too. You had the expensive part of life hit about the time you were doing this. So how long did the $152,000 plus $100,000 take you? It took us 7.8 years. Love it.

And your range of income during that time? We started out, Dave, at $108,000 a year, and now we're north of $200,000, which is awesome. Yeah. Yeah. Are the kids all gone yet? We have one at home, but we never see her. Okay. So she just started her freshman year at nursing.

I'm just thinking as your income went up, you got rid of all the payroll. Yes, we did. It's an amazing thing. And we love it. Love it. And got rid of the debt on top of that. So what kind of debt was the $152,000? Stupid debt.

All of it. Our smallest debt was a flute that we financed a flute a flute you financed a flute a flute um we were dumb and then our largest debt was our student loan and then of course our house okay all right so i'm thinking james is gonna bump out with like jethro toll maybe i'm thinking i don't know what could i do here did you say you paid off your house yes you did your house you paid off your house? Yes, we did. Your house? Our house.

You paid off your, I'm looking at weird people. Love it. Yes, you are. No debt at all. 7.8 years, that's about the normal time. You did the whole thing top to bottom. Yep. Well done.

And lived life while you were doing it with college and cars and the whole bit. Yeah. Wow. Very fun. So tell me the story. What got you started on doing this 7.8 years ago? So I'll take this one. So I was at work, Dave, and I was talking to a good friend of mine named Josh, and he was telling us about his FPU story. And I started reading, I started listening to you,

I came home one day and I was just mad. Well, he really wasn't mad. He was pissed. I don't know if I can say that on the radio. That's like one step past mad. There's a difference. I was pissed off. And I just told Tish, I said, babe, we've worked so hard. And God's blessed us so much. And here we sit, and we've got nothing to show for it. And, you know, it, you know,

it just really tore us up. And so that day we went out and we bought a home study kit and we forced, um, all four of our kids to go through the 13 week home study kit with us. Wow. Um, and we did it. And what's awesome, Dave is all four of our kids now live on a budget. They're all just killing it. And they're doing what we should have done when we were 18 and 20 years old. Wow. They like to say we were torturing them. I'm sure.

Yeah. Like Dave Ramsey's a cuss word. Well, we did the 13-week study, so it was even longer of a torture session. You should have been at the Ramsey house when we made our kids go through it. Oh! That was nasty. It was ugly. Wow.

Well, way to go, you guys. So it took. So what was the biggest thing you learned that you tell people, this is how we got out of debt? We did this, this, and this. I love to use hope, but I like to use the acrostic for hope. I think first being honest with yourself, saying you screwed up, you did this, you got to get out of it. Looking for options and opportunities. If you don't use

it, sell it. And if you're not working, go to work. And P for plan, do the budget, do the zero base budget, do the baby steps and do it in order. Don don't become a genius on your own and then e um you got to execute it doesn't matter if you make that plan if you're not executing it and no excuses ding ding that one well that'll that'll preach right there way to go actually dave i'm preaching in a couple weeks at our church and i'm using that yeah i would act like you dreamed it up, too. That's right. I'm faking it. Well done, you guys. Very well done. That's good.

That's good. You got anything to add to that, James, or is that just too intimidating to follow? Yeah. I mean, what do you got to say after that? It's all about hope. Very good. Cool. Cool.

What was the hardest part? So the hardest part for me, Dave, was telling our kids no. You know, our kids were in the age range of 10 to 16, and we were doing everything. I mean, we had a good income. I mean, our kids were taking lessons for sports. We had them doing clarinet lessons and flute lessons. And Tish and I sat down with our kids right after, right when we bought that home study kit. And we told them, we said, guys, your mom and dad has screwed up and we've made some really bad decisions. And because of that, you're going to suffer and we're going to suffer. And that's the only way we're going to get out of it. And we got to make, make that decision. And so we made the decision that, you know, you've either got to take the pain

of discipline or you got to take the pain of regret. And we had the pain of regret for so many years. And we said, we're done with that. And we want the pain of discipline. And so we had to tell our kids, I had to tell my son, we're not doing basketball training anymore, son. We got to hoop out in the backyard. Let's me and you go back here in Auburn. We'll train together, right? And that was hard. And the same thing with my family.

We had to tell our extended, my extended family that we can't go on that family reunion that we had said we were going to go to. Because Tish and I agreed, we're not going to go and do anything. We're not taking vacation. We're not doing anything until we're out of debt. And that was the hard part for me was just saying no. Yeah. For me, the hardest part was hearing him say almost every day, I'm not contributing to my 401k. So once we were in baby step three, getting our fully funded emergency fund, I went back to work.

And I'm a stay-at-home mom. And I missed a whole summer with our kids. He came to work one day, followed me in. And I was sitting at my desk crying because I was missing my kids. And I hated being there. And I hated what I was doing. But I did it. And I did it for our family.

For a short period of time? For a short period of time for a short period of time yeah you can pay a price to win for a little while and then work like no one else later you get to work like no one else there you go very good way to go you guys I'm very proud of you we got a copy of Chris Hogan's retire inspired book for you number one bestseller and that's the next chapter in your story to be millionaires and outrageously generous along the way, and I'm sure you will be. Can we say hi to our FPU class? Absolutely. You're FPU coordinators or you're in a class?

We are. So, Dave, we're actually teaching our ninth class right now. So every year we've done at least one class that we facilitated. You went from home study into full-on coordinators. Well, and then we've taken it a step further. We actually do financial coaching. So when we talk about our income being over north of 200 it's part full-time salary and it's part hey we're going out and coaching and we're helping people win and we're just sharing what we do what

we learn way to go you guys way to go so your fpu class meets on what night thursday night thursday night in cincinnati there you go, if you need a clash, you can jump in there. Absolutely. We'd love to have you. All right. James and Tish, Cincinnati, Ohio, $152,000 plus 100 cash flowed in 7.8 years, making 108 to 200. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free scream three two one we're dead free way to go you guys well done and the confetti goes off this is a new thing that's awesome well done man that's good stuff right there. That is fun. Well, that's what you do. Man, I like that. Oh, opportunities and options. Find opportunities to make more money and options to sell stuff.

Take an extra job and sell so much stuff the kids think they're next. Work like no one else so later you work like no one else. No discipline seems pleasant at the time, but it yields a harvest of righteousness. Live like no one else so that later you can live and give like no one else. No one gets to the Super Bowl and goes, how'd that happen? Wow, that's cool. It just suddenly occurred. It was an epiphany.

No, I know exactly. No reporter has ever interviewed an athlete after a championship game that has a confusion about how he got there or she got there. 100% of the time, they know how they got there. Unbelievable focus and diligence. This is the Dave Ramsey Show. We'll be right back. Thank you for joining us, America. We're glad you are here. Open phones at 888-825-5225. This is the Dave Ramsey Show.

Jeff is in Evansville, Indiana. Hi, Jeff. How are you? Doing great, Dave. Thanks for taking my call. Sure. What's up? The wife and I have been knocking out Baby Step 2 since February. We've paid off about $50,000, and we've got 12 to go, and I just sold a piece of equipment that I didn't need anymore that brought us in about $50,000, and we've got 12 to go, and I just sold a piece of equipment that I didn't need anymore that brought us in about $10,000 additional.

Good. You're almost there. We're close. We're so close. We've been wanting to do in the future solar panels on our home to help on our utility bills, and a law has changed in Indiana this year where it makes it basically useless to do that if we don't get it in this calendar year. The whole project's about 30 grand, but if you can get your foot in the door,

which will cost me about $10,000, you're grandfathered in for life. So if I can take this 10,000, get the baby system, if you will, started, then I'm good to go for life. But I'm torn because it'll push my baby step two off to probably February. So I'm confused. They're shutting the sun off in Indiana? What do you mean? The laws change. There's something called net metering out there where you make more power than you need

when the sun's out and your meter effectively turns backwards, and so you're kind of putting power back in the bank, kind of like rollover minutes used to be on a cell phone. Then at night, you'd pull back off of those watts. Well, that's going away. You'll save on the power you make while you're making it, but you won't put anything in the bank. So, I mean, the return on investments, you know,

virtually nonexistent when that happens. Really, because half is not enough? It becomes a lot less than half, and right now it's about a 10-year rate of return. Oh, that's too long anyway. I wouldn't do something with a 10-year ROI. If I don't add to it, I should have prefaced that. There's a lot of startup stuff that's in that first $10,000, and then the cost to go forward from there. I wouldn't fool with it if it didn't have a five-year break-even.

So if it doesn't have a five-year break-even, don't even mess with it. I wouldn't do it, because here's the problem. Technology's changing so fast, and the marketplace is changing so fast. I mean, solar panels five years ago versus solar panels now, solar panels 10 years ago versus now, they're light years different. Oh, yeah. In what they do and what they cost, for that matter.

And so, number one, let's pretend you were sitting debt-free and had a pile of cash in the bank. I personally wouldn't fool with it even then if it was just extra money laying around and only a five-year break-even. I don't think it economically makes sense. But aside from that discussion, you just don't think it economically makes sense uh but aside from that discussion you just don't have the money that's true you're in debt and uh if you can get there by the end of the year you can be debt free have your emergency fund in place and then buy these

things buy your starter system if you want to get in and you can do a five-year break even that way but i don't think you can hit all of that with what you're telling me. That's a lot. That's a lot. Yeah. And so I just, I can't tell you, I mean, I'm a fan of solar panels in general, but I'm a fan, but the only way, obviously, I would tell you to do it is pay cash for it, and I wouldn't tell you to take it out of your emergency fund to do it, so doing it instead of an emergency fund is the same thing. Sure. And so I, you know, I would be inconsistent and i got you know the way answer questions here is what would i do knowing what i know i gotta tell you but here's the thing

jeff i have laid these principles in place in my life personally like i don't borrow money like we don't use the emergency fund except for emergencies no matter what ever period and it has caused me to walk away from some things like that i really did want to do like you really want to do this and you're going to walk away from it at least for now unless something changes after our conversation right but um you know if you do what i tell you to do you're going to walk away from it's caused me to do that and i kind of went ah god gosh lord what are you doing here come on god, God, show up. I mean, don't you like solar panels, God? I mean, really? Seriously. And I've walked away from some stuff and then 36 months later,

four years later, I look back and I go, oh, that's why I wasn't supposed to do that. That rear view mirror, that hindsight is 2020 i mean you can tell what was going on when you look back but you don't know going forward but i do know that when i violate the principles i always live to regret it using the emergency fund for something other than emergencies and i've not done that because sharon and i got burned so bad when we went broke the The scars were so deep. The lesson was so thorough that we don't borrow money for anything ever.

And we don't even use the emergency fund for emergencies. I mean, much less anything else, because that fund is like it's like sacred to her because of the scar that is in our lives from having gone broke. She just, it's been 30 years, and she still can remember the taste in her mouth that that terror brought, that level of fear brought. And so we really, we don't even use the emergency fund for emergencies. I mean, it's, you know, we got a big pile of cash, and for no apparent reason other than it's SWI. Sharon wants it. And even then, something comes up, either we cash flow it or we wait a little bit because we don't even use emergency funds for emergencies.

So that's served us so well over so long a period of time, Jeff. I think I would be doing you a disservice to tell you to do something I wouldn't do. Even though I get why you're doing this and I intellectually grasp your argument or your conflict in this discussion. So I'm not against solar panels. I want them to break even quick and I want you to pay cash for them. Matter of fact, I'm a fan of solar panels and I've endorsed them in several cities. But that's the case. Thanks for joining us.

Open phones at 888-825-5225. Bridget is with us in Dallas. Hi, Bridget. How are you? Hi, Dave. Hey, what's up? So I'm fairly new to your program, and last night I completed Baby Step 1 and started on baby step two good and then um I came across some medical bills that were in my stack of bills that need to be paid off and it

dawned on me that we now have a health savings account and I've only been listening to the show for a few weeks and I haven't really heard much about a health savings account, but I was just curious if I can pay those bills with a health savings account, should I or should I save that as like almost with my emergency funds since we do have three small children and they get sick, they break things. Like their noggins, yeah. Yeah. We spent some time with Staples in the emergency room with our kids as part of growing up but um i think it is anyway it wasn't ramsey house but uh so yeah i would use your your hsa to pay medical bills with and there's two reasons

if you take a thousand dollars home and pay taxes on it it turns into seven hundred dollars and then you pay medical bills with that if you put it into your hsa the whole one thousand can go towards your medical bills so it's as if the government paid 300 out of every thousand for you by by running any medical expenses through the hsaSA. And you can always go back later, add more to it when you get further along in your get out of debt, build up my emergency fund, baby steps plan. But for right now, I think you're on to something. How much is in the HSA? Right now, there's only about $650.

And how much in medical bills do you have? Oh, God. A little over $10,000. Okay. So it's not going to wipe it out or anything. You're still... No. But, yeah, that's $600.

It's a tax-free methodology to pay your bills, your medical bills, and any other money you can dump into that HSA through payroll deduct, load it up, and run it back out to pay that other $10,000 because you're saving 30 cents on the dollar. Okay, so I was under the impression that I couldn't use our HSA for bills that we acquired when we didn't have the HSA account. Oh, now that may be true, yeah. Oh, okay. Yeah, so it would have to be something that came up after that. But now you can, you can, so it would have to be something that came up after that. But now you can, you need to double-check that.

Okay. I think you're right, but I'm not an expert on that part. I could give you a wrong answer, and you need a better answer than mine, because I could screw this up. But I think you're right, though, but I would double-check it, because there's some money on the line, you know? But any medical bill you can run through, that HSA is going to save you roughly 30 cents on the dollar.

And so anything that does qualify, I would do that. No question about it. Good question. Thank you for joining us. We appreciate having you as a new listener. That about puts this particular hour in the books. Our thanks to James Childs, our producer. Blake Thompson is our senior executive producer.

And Kelly Daniels is our associate producer and phone screener. I'm Dave Ramsey, your host. And we'll be back. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.