The Ramsey Show - App - How Can I Start Being Financially Responsible? (Hour 3)

Episode Date: April 24, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend and bestselling author, George Camel, also my co-host of Smart Money Happy Hour, our other show. And we are here to take your calls, America, at 888-825-5225. This can be about your money, your life, your career, your relationships, but we are here for you. So give us a call. Up first, we have Joy in Washington, D.C. Hey, Joy. Welcome to the show. How are y'all doing?

We're doing great. Thanks for calling in. How can we help? Of course. Yeah. So I wanted to ask a question about tithing, if I can give a little context first. Yeah. So my husband and I moved to D.C. from Washington State about a year ago.

When I was living in Washington State, I was volunteering at a pregnancy center, and I got to see how they used their money, and it was really great. So we decided when we moved to D.C., we didn't have a church, so we're like, oh, we'll give our tithe money to the pregnancy center I was volunteering at. Fast forward, we currently found a church. We love the community. The people are great. And my husband and I have had the conversation of, do we want to move our tithe over from the pregnancy center to the church we're at? But the problem that we're having, just justifying that, is we kind of look around the church that we're at, and as great as the

people are, it's hard because the kind of way that they're using the money, we don't necessarily agree with. For example, they're about to go on a missions trip to a first world nation in Europe, heavily Christian already. And, you know, that's a good example of like, it's hard to say, sorry, pregnancy center, we have to give our tithes to this and just a couple of different other kind of scenarios. We just don't feel like they're necessarily using the money as we feel. And since we are managers of God's money, it's kind of hard to justify that. So we'd love to hear kind of what you would do in our situation, how we can either change our mindset or what we, what, you know, just kind of some wisdom and that would be great.

Yeah. I mean, for me, especially when it comes to something like the tithe, I never want to be legalistic about it because I feel like that just like rips the whole spirit of why you're doing it in the first place. But the, you know, the main reason for it, especially when you look in the Old Testament was for the local storehouse and it said to give your first fruits. And the reason for that was to make sure that, I mean, basically the priest at the time, right, was able to sustain and be able to continue the local church. What was the local church in the Old Testament, right? What would have been. And so I think that's the purpose of our tithe is to keep the local church in a state

financially where they're able to sustain and continue to grow and do what they need to do. Now, will you agree with every single decision? No, because I don't think any church is perfect. No church has your specific passion, right? I mean, you talk to somebody that has a passion for Eastern Europe and people meeting Jesus there, you know, they may be all about this mission trip that you see as a first world country, but someone else may say is on their heart, right? Or, you know, the church may

buy a new drum set or something. I don't know. And you're like, that's stupid. The drum set's fine, right? Yeah. I mean, like every little decision. Now, if they're doing something immoral or illegal, obviously there's red flags there. Or, I mean, for some people, even going into debt. Some people take on a ton of debt and they're like, I hate that my tithe is freaking going to like Bank of America, right?

To pay the interest. Like, you know, so there are times that people don't feel aligned. And I don't want to, I don't want to push away your reasoning, but I would say, I would look at the overall heart of number one, why the tithe is there. And number two, to have a little bit of grace that yeah, every little decision, you know, you may not fully agree on, but the purpose of it is to make sure that the local church

stays afloat, right? And to a degree financially and takes care of the staff and, and that it's being used in that way. But obviously you guys do have a heart for this pregnancy center. So my goal, Joy, honestly, would be able to do both. I do, I mean, in our home and George, can you can say what you guys do? I mean, we, we do, we, we take 10% off the top. We don't even look at it. I mean that in taxes, it's just like, we don't even bring that money home. Because it's just something for me where I'm like, I just want to be able to have my local church. And that's where I believe scripturally is where my money is. But then we do give on top of our tithe to the things that we are passionate

about. And so whether it's local ministries or different organizations, that is something we do as well. We're that part of our heart that we do feel we long for that. Those in certain communities or whatever that may look like, that's where it's given. So. I like that take. I don't know. So I don't want to be legalistic about it, Joy, but I would push you to just say, hey, you know. I would also ask more questions and find out, okay, because sometimes the tithe goes to operational stuff for the church and then outside of that, they raise money for missions. So I would inquire with whoever runs the finances at the church and say, hey, I love being here. I would love to just know kind of how the finances work.

Is there transparency with the budget? Some churches are very transparent with here's how much tithe money we brought in. Here's where it's going. And that seems to be a growing trend because people like joy want to know i want to know where this money is going if it's being used wisely and not to be like a picky church member here but winston and i for a season for about two years at our church there was a certain um part of the church that was growing that we loved and we even emailed and just said hey we would love our tithe use it as you need right we kind of gave that disclaimer but we would love our tithe. Use it as you need, right? We kind of gave that disclaimer.

But we would love that money to see that money in this part because we're so excited for that. So maybe that's even what you do, Joy, is like, hey, you know, the way my husband and I are feeling, we want to be able to give to the local church. But are you, you know, could we give to certain areas? Yeah, I mean, yeah, you could even ask that. Right. Yeah, we don't want to be of the mind of like, oh, we're not doing what we want, so we're not going to give you our money. Obviously, that in and of itself is not the right heart. But I like the idea of being able to just have that conversation with them.

Maybe not ask, you know, so super legalistically, but, you know, ask for like a breakdown, maybe a little bit, and just kind of see what their heart is long term. That's a really great idea. Yeah, and a lot of churches and nonprofits, for that matter, if you are a 501c3, legally, you do have to disclose a level of the budgets. I mean, on most places, you can go to their website and see. So I think churches would fall under that for me to know. Because yeah, golly, if you got in there and you're like,

holy crap, they're taking all the money home or something and it's not being used for other things, that's more my, you know, that would be a worry. If they're mismanaging it versus just, I don't love this mission trip they're going on. Those are two different things. But I think you're of the right, you know, spirit about it. Just wanting to ask more questions and wanting to make the best use of your tithe money. Awesome. Great. I appreciate your time.

Absolutely. Thanks, Joy. That reminds me, Rachel, I did a mission trip in college. So it wasn't through a church, but it was a Christian college. And they did a mission trip sort of like living on mission. It's like Panama City. And we went to Europe. Oh, did you?

Truthfully, these are Southern kids who have never been outside Alabama. They're like, we're going to all traverse to Europe on a mission trip. We're all just experiencing the culture. And we're trying to have these conversations with people. And not ram this down their throat, but have an intentional conversation with random people in the hostels and wherever we were right so we got back from the mission trip that you know people from my home church funded in boston they're like how many souls did you save oh my gosh like i feel like i had some we planted some seeds we had some good conversations you know the lord will bless

there was a little bit of that the people people who donated wanted to know, like, okay, what impact did it have? Yeah, or I just send George to freaking France to just hang out. And I'm like, I had a good baguette outside the Eiffel Tower. I don't know. The croissants are fantastic. We'll never know this side of heaven, the impact we had on that trip, Rachel. There's people for eternity, George, because you sacrificially took your time. That's what I do.

And other people's money. And what kind of person I am. You know, you take a 20-year-old to Europe. You can't expect much to happen. I know. God bless. It was a sweet trip and I learned a lot. About culture.

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So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I am Rachel Cruz hosting this hour with George Camel. We are taking your calls at 888-825-5225. Up next, we have Griff in Cedar Falls. Hey, Griff. Welcome to the show.

Hi. Thanks for taking my call. Absolutely. Thanks for calling in. How can we help? Yeah, so just a little bit of a back story. My wife actually got a great job promotion in a different city around two hours away. So we were in the process of purchasing a home closer to her work.

And during that time, we actually found out that Nelnet, they transferred her student loans, which she currently owes around $50,000, to MOLA. And we found out during the application process that she was getting charged twice for that amount. So we're just kind of wondering about how to go about the process of fixing that with Nelnet, which no longer even services student loans. And so you guys were able to find out that you guys were paying double, basically. Yeah. So... Was that on the principal or was it going toward the student loan? You were just making double payments toward it? So we actually weren't making student loan payments as part of the SAVE program. So they transferred it from Nelnet to MOLA.

So we started just kind of knocking that down during the process while not having any payments due. But during the application process for the new mortgage, we actually found out that, according to the credit reports, that she owes $50,000 with MOLA, which they were just transferred to, and Nelnet, who no longer services student loans. So she, yeah, so according to our credit report, we're showing that we owe $100,000. Ah, got it. Okay. Well, I would contact the new student loan company and see what they can do,

but also contact the credit bureaus and have them dispute that information on the report and say, hey, this is incorrect. You'll need proof from the student loan servicer that it is doubled and incorrect. But that should be a pretty quick fix and they have to change it for free. Okay.

Yeah, just doing a little bit of research. It seems like it's affected a lot of people, but just previously being in the mortgage industry, I know, you know, probably some people are getting declined based off of like those double-paying. Incorrect information. Yeah. Well, we tell people, pull your credit report. Now, we don't care about credit scores, but pulling your credit report once a year is a good idea just to make sure that there's no fraud and mistakes, all of that. So pulling it once a year, make sure you do it for free. I believe the website's annualcreditreport.com. You can go on there and pull from all three for free. And so I think it's a good idea to do. And then contact all three bureaus and contact

the student loan service provider and say, we need to fix this asap and they should be on it so it shouldn't be that big of a deal just the hassle of yeah it's just sloppy administration on their side they just didn't surprise surprise unbelievable all right i'm next we have peter in st paul hey peter welcome to the show peter are you there we lost them before we ever had him. All right, Peter. We'll see if we can get you back. I'll put you on hold, Peter.

So let's go on to Will in Scottsdale. Hey, Will. Welcome to the show. Hey, what's going on? I'm a huge fan of the Ramsey Show. You guys helped me get out of debt several years ago, so thank you. Oh, awesome. Love to hear it.

For sure. How can we help? Yeah. I have an interesting question. So I may have, it's, so basically I'm debt free. I'm 27. I'm single, not married, no kids. And I'm looking at doing one or two things. I wanted your guys advice. So one of the things I was looking to do is I'm originally from Chicago and I live in Arizona. So I like to go back and forth because I work remote and I was going to buy a condo in Chicago and have my sister live in it as a renter, kind of almost as like an

investment property. And I'm debating if I should do that or just save up for a primary residence here in Arizona. And I'm just kind of confused on what to do. Do you, are you renting right now for your primary residence? Yes, I am. Yeah, I would save up for sure and buy a house for you first before you think about rental properties. That's kind of the step after your home is even paid off. So when you look to invest in rental real estate or real estate in general,

whether you're going to do flips or long-term rentals, that will be with cash later on after your primary mortgage is even paid off. So I would, yeah, I would focus on, yeah, saving up a good down payment for something there in Scottsdale. How much do you make a year? $190,000. Good for you. What kind of houses do you think, are you looking at condos or townhomes or single family that you would want to buy for yourself? A house. One of the things that I'm kind of going through right now is to get a 20% in the Phoenix market, it's pretty difficult with how competitive it is out here and how expensive homes are,

and especially with interest rates. So I have people telling me, you know, wait, keep waiting, keep saving up, but I'm not really sure what to do because it seems like the prices just keep going up. Yeah, well, we tell first-time homebuyers you can go down to even 5%. I mean, that 20% to avoid PMI is ideal. But even if you want to go ahead and get in at 5% down, you could do that. So that's an option. And, yeah, I mean, as we're seeing, the prices are not going down.

I mean, if anything, you know, in an area like you guys, I mean, it is competitive. And I don't think it's going to skyrocket prices like they did in 21 and 22. It was just crazy. They have slowed down in that sense, but they have continued to go up. So if you have a good down payment, I would go ahead and get in. Because to your point, you could just keep getting out price of it. So we tell people, wait until you're financially ready, but don't wait for the right time in the market. It's kind of like timing the stock market. We don't want to ever do that because you'll end up regretting it usually.

Yeah. Do you have any money saved, Will, now? $50,000 and then about $75,000 in my 401. Good for good for you man you're killing it at 27 well done no debt so how much can you save in a given year making 190 how much of that could you sock away and add to like a high yield savings account on top of the 50 for a down payment that's what i'm doing right now so i'm just keep stocking away keep stocking away so I mean my goal would be to get to a hundred thousand yeah but then this so we'll see if I can make that happen but yeah that would be my goal yeah how much would you have to save to get into the market for where you are and what kind of home you're wanting do you know have you read numbers yeah I've ran some numbers I mean in like the

Scottsdale Phoenix market I you know for 20%, I would probably need well over $100,000 for, you know, $400,000 or $500,000 home, thinking about it correctly. But I could also go a little further out in the city and probably get something for around $400,000, but it would still be a decent sized down payment. Sure, Yeah. You could also look at a condo or townhome that will still appreciate in that market. Cause that was, you know, Whitney and I, when we first got our home, when we got married, it was a townhome and appreciated, you know, well over 50% in just a few years. And so it was a great purchase and a great part of town. So there's nothing wrong with doing that, especially as a single guy, you don't know what the future holds and where you'll move to. Yeah. I think that's one of the things too is just wondering like should i just keep renting until i meet someone and then get married and i mean that's no i mean yeah where you are financially

i mean unless there's somebody like that you're dating now they're like oh yeah she lives in her family's in connecticut and we may want to move to connecticut right but i mean i probably wouldn't wait i would go ahead and get in and yeah start that process if you move four or five years from now it's okay people move all the time yeah that's not a huge deal yeah on the line but well done Will that's that's incredible that's I mean where you're at financially is is applauded here so with rental properties Rachel we say we don't want you to be a long distance landlord and so that's that's one of the tough parts of managing a property that's multiple states away is a difficult thing to do. Of course, you can pay a property manager, but

you still have to deal with it. You're not absolved of all responsibility. You still got to make sure that you're on top of them and that they're hiring the right people and doing good work and charging the right price. So it can be a hassle. And when you involve family in it, I was going to say too. I was like, Ann, I don't want to be the Grinch here, but. I'm my brother's landlord. Yeah. I mean, there's a lot of family drama that we get on this show of, well, so-and-so, she

said she would pay and she hasn't paid. So I'm letting it go a few months. She is my sister. And then you're stuck with a mortgage because you went into the rental property genre with debt. And you don't want to charge market rent to family. And now you're losing money on this investment. It just, it gets dicey.

Yeah. Even though the heart's good, the motivation, but I would let your sister find her own place. And yeah, and you, yeah, do what's best for you, Will, which is to find a primary residence. If you'll be in Scottsdale for the foreseeable future, you're in a really good place financially to really start saving and looking for a down payment soon. So thanks for the foreseeable future. You're in a really good place financially to really start saving and looking for a down payment soon. So thanks for the call. So, you know, I've written two kids books and kids and babies, they're just on our heart.

And look who has appeared for the first time ever on the Ramsey Show. Mia Camel is here. Is she not adorable, George? I can't believe it's my baby, to be honest. I mean, she is the cutest thing in the entire world. Well, she loves your kids' book, and I was like, I know the author, Mia. I told her.

I was like, we can read this, Mia. We can hang out and talk. I mean she has does she have a 529 set up George she does that was the first thing I did truthfully I was so excited I was like no gifts please just fund the 529 thank you okay and how and how old is she tell everyone she's now uh eight months tomorrow eight months tomorrow which by the way happy early birthday oh to me to you yes thank you it's your birthday it is it is my birthday tomorrow yes um but hey and how's she been as a baby george she's been great fatherhood is as wonderful

whitney if everyone knows my ramsey story i met her here at ramsey she worked here for nine years and as of last week she now stays at home with little mia yeah so she has officially retired and it's been a huge blessing. And truthfully, the principles at Ramsey is what allowed us to be able to do this. It wasn't a financial decision.

It was just an emotional one. That's right. Yeah. And she loves this place so much. In the place, yeah, to be able to do it and do what you guys want. And one day,

Mia will take my spot on the Ramsey show. She's made for the camera. We already know that. Her and Charles could really take over an hour. That's succession, Dave, if you're listening.

It would probably trump a lot of the content. I know. Well, it's such a beautiful picture of what, yes, all of this, of getting out of debt and saving and everything we talk about on the show. It is ultimately to bring you peace and to bring you options. And look at her. I'm starting to think about legacy and getting more emotional. I'm crying at bank commercials.

I mean, what is wrong with me? What is happening? So great. Mia, we're so glad you're here. She'll be taking your calls this segment. That's right. So give Mia a call. Let's see if she can dole out any advice. 825-5225. All right. We're going to head to the phone. So we got Eric in Louisville up next.

Hey, Eric. Welcome to the show. Hello, Erin. I've been watching the Dave Ramsey show for a few months now, and I'm a really big fan of you guys. Oh, awesome. Well, thanks for calling in. How can we help? So just a little bit about me. Back in 2019, I joined the service. I was part of the Marine Corps for five years. I recently got out back in January of this year, and now I am part of the Kentucky National Guard. But during my time in the Corps, I fell into a very dark depression, and I used money as a way to escape. And I got into some financial trouble. And I'm just wondering to see if you guys can help me just try to steer me in the right direction to help me get out of this situation and be more responsible with my money and hopefully make my dream come true. Yeah, for sure.

So what kind of decisions did you make that put you in a financial hole? Was it gambling or what kind of things? No, it was just spending money that I don't have, pretty much a credit card and a personal loan. Okay. So how much debt do you have? $26,000. And I know that doesn't sound like a lot, but to someone that only makes about $44,000 a year, it is a big deal. Yeah, for sure. No, it can feel overwhelming. I mean, regardless of the dollar amount, it carries a lot of weight for sure.

Are these across multiple cards, multiple personal loans? How many individual debts are there? So originally I was in $40,000 worth of debt, but I got a bonus and I used that entire bonus to pay off four out of the six. Good for you, Eric. Well, that was a good. Yeah, that's a great decision. But now that I'm kind of on my own now with money and not really receiving any bonuses anytime soon, it's it's just I just want to get my finances back on track. I just got my apartment May 6th.

I don't really have any student loan or house payments or anything like that. But I mean, the only payment I have is just a car payment and cell phone and insurance. That's all I really have. Oh, so you have a car payment as well? Yes, I do. What's left on the car loan? It's $10,000, and my monthly payment is $268 a month. And that's on top of the $26,000?

It is, yes. Okay, so we've got $36,000 total in consumer debt, making $44,000. Okay. And we're going to help you with a budget, because the key here is to look at the reality of here's how much I'm taking home and here's how much I have in expenses. How much do I have left to throw at the debt? Because the key to all of this, as you know, is paying off extra on the principal on all of these debts and using the debt snowball method. If I may ask, what is the debt snowball method? Yeah, well, this is where you lay out all of your debt, smallest to largest. That's why I ask how many individual debts. It's hard when you

stare at it as a mountain, when you try to attack highest interest first, because it sounds mathematically smart. What we found is that paying off the smallest debt first by the balance is what causes people to actually get out of debt, because there's a psychological win. You feel motivated. You free up a payment faster. So with the debt snowball, you list out all of your debts, smallest to largest, make minimum payments on all of them except for the smallest balance.

Yeah, so let's do one real quick with you, Eric. So give us your smallest debt, whether it's a credit card or a personal loan. What's the smallest amount total? So the personal loan is $9,787.94. Okay. What's your next smallest debt? Well, so my next smallest debt would be my car, which would be $10,027.88 eight cents okay and then the next one then a another credit card which is um thirteen hundred and after that um it's just a very big one which is my fifteen thousand credit card fifteen thousand credit card wait did you say a thirteen hundred dollar uh yes i did um i was i was looking at did. I was looking at my expenses. Yeah, your smallest is at $1,300. So that's the

first debt that you're going to pay off. So your goal is, we want you to get a $1,000 emergency fund first and foremost. So do you have any money saved? No, ma'am, I do not. Well, just $100 really. Perfect. No, you're great. So that's where you're going to start, Eric. You're going to start on the very first step of the baby steps. And maybe step one is a $1,000 emergency fund. So I want you to be driving Uber. I want you to do Instacart. I want you to work at Target.

Like, I don't care what you do, but I want you working extra. Because I think your biggest benefit, Eric, to this formula is going to be upping your income, which is going to mean a lot of work. Are you single? I am, yeah. Okay, so that's great. I mean, in a sense, it's sometimes easier just to be like, this is my life and I can work till 10 o'clock every night. You're young, able-bodied. You can make that kind of sacrifice right now. So you're going to do what you can to get $1,000. And even if that's looking around and selling stuff, like if you have stuff, sell it, do whatever you can to get $1,000. And even if that's looking around and selling stuff, like if you have stuff, sell it, do whatever you can to get $1,000. And I want you to do this in 30 days. Like I want this to be a really fast goal for you. Do what you can. Cut eating out. I want you on a budget.

Do what you can to get that $1,000. And then after you have that, you're going to put that in a savings account or a high yield savings account, but just put that money away, that $1,000. And then the next goal is to pay off that credit card of $1,300. And then once that's paid off, then you're going to move on to the personal loan of the $9,700. Once that's paid off, then you're going to pay off the car loan. And then last will be that big credit card debt of $15,000. And Eric, and I would encourage you to cut up the credit cards. I mean, like I would go scorched earth on all of this. And if you already have. Awesome. Good for you. Well, and I think you're at a great place, Eric. I know you I feel like you may feel so defeated. But what we have found

and we call it people's I've had it moments where people call in and they talk about their debt free journey and they say it started somewhere. And it usually starts in a point of crisis or a point of pain, which sucks. I wish pain wasn't a great teacher, but sometimes it is where you think, okay, I'm done. I'm so done. And Eric, this is your moment. This is the moment that you said from today on, from April 24th, 2024, I started changing the way I viewed money. And I really believe if you can up your income and even make, you know, a thousand, two thousand dollars extra a month, even if it's just through side hustles, I mean, you can get this. You can get this knocked out. And I'm going to gift you one year of every dollar premium to

help you with this. And it's going to connect to your bank. It's going to be tracking your transactions. This will be sort of your accountability partner as you knock out this debt. Yeah. And we are rooting for you, man. You are not alone. A lot of people listening are relating to your story. And we believe you'll be on this debt-free stage sharing that and inspiring others. For sure. Yeah. And we'll throw in George's book too, Breaking Free from Broke, because he does talk about a lot of the money traps that we can fall in. And I think it'd be really helpful for you, Eric, too. So we'll give you that book as well. So thanks for the call, Eric. We are rooting for you.

This is The Ramsey Show. Our scripture of the day comes from Matthew 10, 16. Look, I am sending you out as sheep among wolves. Be as shrewd as snakes and harmless as doves. Jean Sebelius said, pay no attention to what the critic says or what the critics say. A statue has never been erected in honor of a critic. There you go. That's good.

Don't pay attention to the critics, George. I never do, except every time in the comment section. But that's for my own entertainment. It fuels me. That's so sad. That's good, though. It's good. They're not too mean to us and on youtube i feel like your comment section rachel you youtube people are very kind i've been told i have a punchable face which i don't know what that means they are does that

mean they think they could take me in a fight because they could it just looks like you're yeah someone just wants to punch your face i don't know that's. I know. I always just think like they need a hug. You know, they're just hurt. They're hurt people. Well, usually those people that are after people, you're like, man, I don't know how much time you have on your hands to actually like type things out. You know what I mean? Yeah, people in comment sections generally aren't doing great.

You know what I mean? Not crushing it. That are being mean. That are being mean. Sure. Yeah. I don't know. It's funny.

All the people I follow on Instagram, some of these women that, you know, they i don't know it's funny all the people i follow on instagram some of these women that you know they do clothes like that's how i shop now it's like i follow certain people that i like love their yeah i love their clothes and that's how i'll find something uh but people are so yeah and even in their comments they're like hey you know they get so mad i'm like i've never once stopped on someone's post or seen a video on youtube that i'm like yeah i'm gonna'm going to put this out there. I don't know. I tried to do some videos on money hacks.

So I put a video out like, here's how to save money at Target in the comment section, Rachel. It was just like, boycott Target. I can't believe he's a sellout. He's getting paid by Target. I'm like, I'm not getting paid for any of this. I'll be happy to, though. I just figured people shop here. Let me help them save money.

So you can't win on the internet. You just can't win. But you know, we're here to help you win, America. We'll never stop helping you win. When it comes to your money. All right. Next up, we got Michael in Des Moines. Hey, Michael, welcome to the show. Hey, thank you very much for having me, you two. I think only you could go from Matthew 10 to punching somebody in the face really, really quick.

That's how we do on the show. Just read some scripture and punch someone in the face. Thank you for having me. Yeah, thanks, Michael, for calling. How can we help? So I am through Baby Steps 1 through 4, and I'm doing something I probably shouldn't do,

and I want to buy a truck. George loves trucks, Michael. You called the right man. You know what? I love paid for trucks. Well, I do too. And hopefully I can get that done here sooner than later. But I, I'm looking at purchasing a truck.

I've got quite a few different investments. So I've got a mortgage right now of 290,000. But in the, one of the two properties, I, I am currently living in one of them and I have three other roommates who are helping pay that off. And then in the other house, I have, um, two tenants that are living in there. Um, so combined, um, I'm getting about, uh, $3,300 between the two. Um, but with, with that, that, I've got no other credit card debt, got no other student loan debt, got no other debt. Like I said, I'm to baby step number five,

and I'm looking at about a $40,000 to $44,000 truck. What do you make a year? Currently $60,000, and that's before commission. And then with rentals, it's about $35,000. On top of the $60,000? Yes, sir. Okay. So you're making about $100,000, let's say? $90,000 to $100,000. $95,000, yeah. Okay. Well, this is a lot of truck. Do you have a car right now you're driving? I do. It's a fully paid Ford 2013 Ford Fusion. Oh, you would sell that and get the truck?

I would sell it, yeah, for about $6,000. Okay. All right. Well, and this is a used truck you're buying? I would like it to be used just because I know the whole off the lot minus, you know, 25%. Yeah, the depreciation. Well, and what's your net worth? Net worth right now is about $380,000.

Okay. Well, if you're buying this thing used and the total of all of your, you know, wheels and motors, everything with wheels and motors, no more than half of your annual income, which is about $95,000, that would put your purchase price at about that $, 45 range. So I think you're right on target. As long as you're paying cash for this thing, it doesn't violate any of the Ramsey parameters. You're not hurting your financial future, other than, of course, driving a depreciating asset, which is fine. We all do. They all depreciate. And so you're doing this the right way. I would still try to find a good

deal, try to get the most out of your current vehicle as you sell it, you know, private party versus having a dealer say, I'll give you three grand for it. So I don't see anything wrong with it, Rachel. Yeah, I agree. I mean, I think if it's, yeah, if it's cash, if it's used and it's in that reasonable price range, yeah, I think you're fine. I think you're great. So I don't have too much cash put aside. I've got about $20,000. Okay. Would that be something to consider

when putting that down payment in? Well, that's where you lost me. No, not down payment, Michael. We said pay cash. So if you don't have the cash, you don't do this. Yep. Okay. And I would also make sure you don't touch your emergency fund. This is not an emergency. So have three to six months

saved up. You also need some savings for those rental properties. And so I would have a separate savings account for those. And then when you have the $40,000 in cash saved up, you can go make that purchase. Yeah, this is a total just want purchase right your ford fusion is fine right it's getting you what a car does to and from where you're

supposed to go you just want to have something different which is fine um but at that point that's when you say okay i need to slow down do this the right way financially so you're not kicking yourself down the lawn you know down the road where you're like oh my gosh i have car payments now and all of it you've gone backwards financially we don't want that for a truck for a truck right paying interest on a depreciating asset is about the most backwards math you can do yeah so don't do that so it'll take you a little bit of time michael so you'll probably slow down your purchase timeline um to do it the right way but we're not mad at well george might be mad at trucks but we're not

mad at trucks just when they cut me off and you know they're like lifted off the ground under light if michael got in a lifted truck george would say no no i just guarantee almost every truck in the road that's lifted with an under light led kit has a thousand dollar payment on it they're not paying cash rachel that's my that's my real that's your knee-jerk reaction so yeah it's um Michael's not the problem no no no but yeah save up Michael save up and uh pay cash for it and we'll we'll give you the green light if you do it that way all right let's take our last call of the day George let's go to Danny in Princeton New Jersey hey Danny welcome to the show oh thanks for having me I really appreciate it.

Absolutely. How can we help? All right. Let me not try to talk too fast. So I'm 41 years old. I'm kind of in the best predicament I've been in my life. So I'm 41, no debt. I followed a Dave Ramsey. I got $200,000 saved. I'm currently renting. And basically, I live in a very expensive area, this whole Princeton area. I pay very low rent. I'm only like $1,400 a month. Basically, I'm trying to figure out my $200,000 to me is almost useless. We'll have live. I'm trying to figure out that I just keep continuing to save for a house, which at this point, I'm not even sure it would be an investment.

Cause I feel like in six years I may or may not be moving. Cause my son will be 18 years old or take the 200 K and put the whole thing and start investing in, in stocks, mutual funds, index, split it in half. I'm in a good predicament, but where I live doesn't mean much. It doesn't make sense to buy.

Everything around here is about 500K, and it would literally be 60% to 70% of my take home. What is your income? Anywhere between 110 and 165, depending on how much per diem work I take. Okay. So the goal, Danny, when it comes to owning a home is not only diversifying what you have, so you're going to be investing in retirement and also have some money in real estate, but the goal is to eventually pay off your house. And so that way you have no payments at all, right?

No rent payment, no mortgage payment, and you own a home with equity. So that's the ultimate goal to get there. So that's why we say don't just rent forever, amen. And you're in a time frame that's really close. I always say if that five-year time frame is where you want to be. Underneath that, just put in a high-yield savings. If it's five years or further, you could invest it. Yeah, that's right. So, I mean, if you're going to be moving in five years, you may not want to be. Underneath that, just put in a high yield savings. If it's five years or further, you could invest it. Yeah, that's right.

So, I mean, if you're going to be moving in five years, you may not want to buy, but there is a part of me that's like, man, do you go ahead and get in? Yeah, put 200 down,

get a 500,000. Or even if it's a condo, Danny, it doesn't have to be a single family home. That could help as well. So thanks for the call. Thanks to everyone in the booth. Thank you, America

and George Camel. Good times. Good times. And remember to take control of your money and create a life you love. Take care.