The Ramsey Show - App - How Do I Balance My Life and My Financial Goals? (Hour 2)

Episode Date: November 27, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king. A paid-off home mortgage has taken the place of a BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us, America. Open phones at 888-825-5225. That's 888-825-5225. My co-host today here on the air, Ramsey personality, number one best-selling author, Chris Hogan. John is with us in Atlanta, Georgia, to start off this hour.

Hey, John, welcome to the Dave Ramsey Show. Hey, John. Hey, Chris, how you doing? Great, man. How can we help? So I have a little bit of this. I'm trying to figure this out mentally as well as mathematically. I'm in my mid-30s.

I have about $204,000 in my retirement. Not as much as I want or should have, but that's what I have right now. My base salary is $119,000 with a bonus. It goes up to $138,000. And with my last batch of restricted stock units, looking at about $150,000 next year, God willing, of course. Good. So the situation I'm in is I really want to pay off the house that I'm living in. I'm currently going through a refinance right now from a 30-year FHA to a 15-year conventional. And I want to be completely debt-free in the next three to four years, preferably three.

But I'm just trying to find a balance between doing retirement, enjoying some of the money that I'm also making, but likewise paying off the house within that three to four year goal that I have. What'd you say the house balance was? Oh, sorry. The house balance is 139. And with the refinance, then rolling in the closing costs,

it comes up to 146. Okay. That's 146,000. Okay. John, what's motivating you to attack and pay off everything in the next three to four years? To be honest, this whole COVID situation and also just the general craziness with the economy. I mean, it's like mixed pockets of positives and negatives.

I would just sleep better and have peace of mind if I have nothing and owe nobody nothing, basically. Okay. Do you currently owe anyone anything else outside of this house? So I paid off all of my consumer debts. I did $75,000 in 17 months about two years ago. Ooh. With the help of FPU. Wow.

Okay. And no other debts right now? Nothing. Zero. You have children? No children. Okay. All right and did you and you said you're married right i'm single oh okay all right well you don't have to talk anybody into how far you want to sacrifice you can just decide that yeah so you can decide how much of your life

you want to give up uh the only variables in our formula are fixed in your situation are you've done a great job. You're in baby step four, 15% of your income going into retirement. And then the only two things fighting for the rest of the money is mortgage reduction versus lifestyle. And you can decide that. I don't care. You can be as weird as you want to be. But, John, I would rather you tap in on the internal and find that motivation not based on anything that's going on in the world.

You're going to be more consistent in your value system and the thing that's driving you as opposed to what's happening out and how crazy the world is going to get. Okay. How restricted are the restricted stock options? They vest every few get. Okay. If we cash through, how restricted are the restricted stock options? They vest every few months. Okay. So you can roll those into cash then. Okay. So basically we have $150,000 household income if everything's going like you planned.

And you're putting 15% away into retirement. You have your emergency fund in place. You don't have any other bills. And so if i'm you what i'm gonna do is i'm gonna sit out sit down and run out three scenarios i'm gonna say if i spend if i pay off the house in three years that's fifty thousand dollars a year for three years right okay and out of my income that's 40 um that's uh forty three hundred dollars a month or whatever comes out forty two hundred dollars a month and um then i'm gonna uh uh say all right if i do that

i've got that in my budget that leaves me x for lifestyle for fun then run the same thing out if you paid off the house in four years, five years, maybe even six years. Maybe do three and five and six, or three, five, and seven. And just look and say, okay, seven I get this much fun, three I get this much fun, which is less, obviously. And look at that and go, okay. Now here's the neat thing. None of this is a contract. So let's say you said, all right, I'm going for the three-year plan.

Almost no fun. And you do one year of that and you go, well, this sucks. I think I'm going for a little more fun and a new three-year plan. That's right. Yep. You can adjust it if you want. It's your money, and you're killing it. You're doing a great job, buddy.

I mean, you really are. Thank you. And you need to hear that, but you need to believe it. But my point is this, for all you guys listening in, for John, is sometimes when I take these philosophies that are in my mind, it's like, ooh, I've got to have no life so I can pay it off in three years. But when you actually run the math out, $150,000 minus $50,000 for paying off the house

in three years minus 15%, you're a single guy. There's probably some pretty decent money left in there. Yeah. You're probably going to be like, okay. That doesn't sound like that big a strain. But you haven't really put money to it. You've just got it in your head, math to it. You've just got it in your head like this is going to be hard that's true and dave we're not

even accounting for the fact that his income could is going to go up probably you know over the next three years so again john you find that internal motivation i love the three number scenarios of you figuring out hey what makes sense for you and the good thing is is you can make the decision and remake it and change your mind if you want to you preserve that right because everything you're Hey, what makes sense for you? And the good thing is you can make the decision. And remake it. And change your mind if you want to. You preserve that right. Because everything you're doing is in the smart column, so you're not going to move outside the smart column with any of these things.

Good stuff. Our question of the day comes from blinds.com. 100% satisfaction guarantee means even if you mismeasure, if you pick the wrong color, they will replace everything for free. That's a pretty good guarantee. You get free samples, free shipping, new promos all the time, save even more. Use the promo code Ramsey. Chris, our question. Yes, today's question comes from Becky in Kentucky.

She says, I just started a job with a public university and have a 403b with them i wanted to roll over my simple ira from my former job into it but was told the rules of the 403b do not allow outside contributions to be rolled into it what should i do with my simple ira from my former job well looking at this i mean obviously you you will have a um a two-year waiting period uh before you can roll it anywhere into an eligible retirement plan but what do you mean with the the simple ira yeah you can roll that you have to wait two years don't you i thought there was a hold i'm not aware of one okay i could be wrong you might be right i might be i'm not talking about i think you can do it immediately okay but not all the the retirement plans allow outside funds to come in. And you don't want them to go in there anyway.

Yeah, because you're going to have better options outside of that. Right. We always recommend a direct transfer rollover from your old retirement accounts when you leave into an individual, an IRA. Right. Not to the new jobs place. So even if they would have let you put it in there, we would have told you not to do it. Not to do it. And so So even if they would have let you put it in there, we would have told you not to do it. And so get with a smart investor pro.

Find out if Chris is right or I'm right, if there's a two-year hold or not. Double check it. But either way, go ahead and roll it as quickly as you can with a direct transfer rollover. This is The Dave Ramsey Show. I get the privilege every day to talk to smart, creative entrepreneurs doing great things for our economy. GRIP6 is no exception. BJ and the great team at GRIP6 know how to truly create smart products that are unique and makes everyone's life a little easier. That's why I'm so excited to announce to you that GRIP6 is expanding their innovative product line. You heard me. Along with their no holes and no flap and no bulk belt buckles, they are adding an aluminum wallet engineered to be the quickest and most intuitive way to access your cards and everyday

wear Merino wool socks. The socks come in ankles and crew with wool sourced right here in the USA. And all of Grip6 products are guaranteed for life. Folks, GRIP6 is rebuilding and modernizing American manufacturing with products sourced in the U.S. Give these products as gifts this season. To get the Dave Ramsey us, you could Google them. Oh, that makes me feel unimportant right there.

I'm just saying I'm not necessary. You're not necessary, Hogan. Nope. Not at all. This is scary. It is. It is. Okay.

Becky asked us a question with Blinds.com question. Going into the break, Hogan and I are arguing about who's right. So during the break, we Googled it. So make sure you don't need an expert when you have Google. And you can't even have a good argument because you can find the answer. Right? So you can't just... We used to have these family arguments over the last days.

Oh, yeah, because you didn't have a verdict. There was no way to get a verdict. But you can get a verdict with your cell phone in five seconds. That's right. Anyway, all right. So here's the deal. The lady has a simple IRA, which is basically a 401K with a small business, is what it is, okay? And she wanted to roll it to her new companies, her new public universities, 403B.

That 403B did not allow it, but if they had, we would have told her not to do it anyway. Always roll your old place's retirement into an individual IRA. Right. And you get with your SmartVestor Pro into a direct transfer rollover. So that's standard Ramsey advice that Hogan and I would both give. Hogan pipes up and goes, she's got to wait two years anyway. And I'm like, two years? I never heard of two years.

Is there a two-year waiting period on the simple IRA? You know, from the time you leave your employer the answer is no there's not a waiting period so i was sort of right but there is a two-year thing right and from the time that it has to at least be open for two years so we don't know how long becky worked at her didn't tell us but if she worked there three years right she can roll over immediately absolutely but if she's worked there one year or are they opened it one year ago then leave it alone it's going to be a year sitting there right then roll it which it's in her name anyway it's okay because it's a simple ira so uh it's a very uh the simple ira works exactly like

a 401k for you small business people you can open it up for your employees. You have a mandatory 3% match, and it's very inexpensive. Like the 401K at Ramsey with 1,000 employees, 900-something employees, I mean, I pay tens of thousands of dollars a year in administrative cost on that 401K. But for a small business with 20 or 30 team members or two team members or whatever, administrative cost on a simple ira is 15 okay so it doesn't from an employer standpoint you do have the mandatory three percent match i do not have a mandatory match i'm matching it in in a more than three percent but i don't have to by law but with a simple you have to have a three percent match but it costs you otherwise almost nothing to manage the thing. It's called a simple IRA code for 401K for small business. Talk to one of our SmartVestor pros, and you can get one open for your team. Yep. But once it's been open two years with that individual, then they can roll it anytime they want.

There's not a two-year waiting period from the time you leave. It's from the time it was opened. Yes, sir. So you were sort of right. Yep. But you were, too. I was sort of right. That's not a two-year waiting period from the time you leave. It's from the time it was opened. So you were sort of right. I was sort of right. Google straightened the whole dadgum mess out. There you go. We're useless. All right. James is in San Antonio. Hi, James. Welcome to the Dave Ramsey Show. Hello, sir. How are you doing? Great, man. How can we help? Okay. Here's the situation. I took an early buyout at my job they gave me uh 50 000 okay uh long short i paid everything except for my house i only owe 38 000 on my house of that uh extra money i

have 20 000 left in checking or savings and 125 i rolled it over with Fidelity, and they're working my money for 1%. And I won't get my retirement until I'm 65, I believe. That's what they're telling me, because I'm fully vested with my pension. I'm trying to find out what's the next step for me. You got a new job? Not yet, sir. Okay, you hold that $20,000 until you get a new job because you're in the middle of a mess. Other than the fact you've cleaned up a lot of mess.

Way to go. Every step you've made was a good step, but you might need this $20,000 to buy bread and bologna until you get a job. Yes, sir. Okay. Okay. He might not buy bologna. No, Dave, he's not buying any bologna. I might buy bologna with a red onion and a fresh tomato.

But, James, listen, Dave's describing conserve mode, okay? And so the pension might be to think of this money as just bonus and extra. No, no, no. This is money for you to live on. So you are going to be extremely intentional with every dime until you have more money coming in on a consistent income. In other words, when you get your job, we're going to take the $20,000 and apply it to wherever you are on the baby steps. So you're going to finish your emergency fund. You're going to get your retirement going.

You're going to start talking about kids' college. And we're going to reach over and start paying off the house with any of the money left beyond that. But today, you hold on to this money until you get this new career that's right in place following your buyout you might use some of this 20 for some education if you want to get some certifications or something to go into to retool put some tools in your belt to move to the next career yeah good job we need all that 20 there uh to make the transition into the new career when the new career is settled and the money's coming in then you apply it the rest of the new career. When the new career is settled and the money's coming in, then you apply it the rest of the way down the baby steps. Okay.

And hold on. And let's clarify this for the people out there. Again, conserve mode. If your income or hours have been cut, you are holding on to every dollar that's coming in, being very smart. Once that income is stabilized, you're going to unpause and whatever baby step you were on, the money that's sitting over in savings, over and above the $1,000, you're now going to move it in the baby steps exactly where you are. In his case, he's paid off all his debt.

Yeah, he's done it. I'm just talking about the people out there, Dave, that are just sitting. You don't need $20,000 sitting in your baby step one fund. No, you've still got debt. You're going to unpause when your income gets stabilized and start attacking that debt, just like you were before. John is in Chicago. Hey, John, welcome to the Dave Ramsey Show. Hello, thanks for calling, guys.

Sure, what's up? I'm trying to determine... Your phone's cut now. Your phone's cut now. Can you get where we can hear you? Yeah, let me move real quick. Okay. I'm getting about every third word.

Let me move over here. Okay, is this any better for you? Yes, sir. Yes, sir. Okay. Your question is what? Yes, I'm looking to make a decision on whether I should move forward and purchase my retirement home now because the market I'm looking at is, it goes up.

It like almost triples in value about every three to four years. My current situation is I'm retiring in nine and a half years. I have a defined benefit pension that I'll receive in nine years. I also fund a Roth IRA and some other investments myself. Is your current residence paid for? It is. Okay. How much money do you have to put on this retirement home?

Are you going to pay cash for it? No, I'm going to put the 20% down, and I would take a mortgage on the other part. I wouldn't. I'd either pay cash or I'd wait till i was ready to retire because when i do retire my plan is to pay cash but yeah the market it's yeah maybe where are you talking about buying it's so dadgum wonderful yeah those are some ridiculous numbers uh it's in haw, actually. I've been there multiple times, and it's a place I look at higher. I'm looking at the Big Island, actually. It's the place I like the most. Yeah, it's beautiful. When I look at real estate now... I'll disagree. I will agree with you then. Yeah, the market's absolutely outrageous, and I don't know what we're doing. You know, they say

they're not making any more real estate. Actually, the Big Island is. It's adding real estate pretty regularly. But it just has to cool off before you can live on it. But, gosh, I empathize and I don't disagree with your – I thought you were full of it, but you're right. The prices are going to continue to go through the roof there unless the political climate begins to destroy the economy, which it may. I don't know. Some of these areas are going to be affected by the political fallout from COVID more than they are by actual COVID.

And Hawaii is one of says that that's possible. It could be another California or another New York. Dad, come on, man. It's beautiful. I got to tell you. As far as my debt, I don't have any debt. Yeah. I do save well over $20,000.

How much is this property going to cost? I'm looking in the range of about $350,000 with me putting 20% down. How much do you have? Do you not have $350,000 that you can get your hands on? No, not the $350,000. I'm going to put 20% of that. I know. Do you have the money, though, other than that?

I do. Well, then pay cash for it and quit calling me about this. Oh, this is the Dave Ramsey Personality, Chris Hogan is my co-host today here on the Dave Ramsey Show. Open phones at 888-825-5225. Camilla is in Las Vegas. Hi, Camilla. How are you? Hi, Dave and Chris.

It's a pleasure to speak to you guys today. You too. How can we help? Okay. Well, my husband and I are going through a divorce, and we own a small business together. And I'm wondering what formula to use to split up that small business. I'm sorry. How long have you been married?

Thank you. We've been married 10 years. What happened? He just walked out of the marriage. So who's been running the business? Tell me how that works. He runs the business day to day. I've worked in the business throughout the years,

but he's taken over all those responsibilities in the last six months. Okay. So what do you plan to do with your life? I'm not quite sure yet. I'm working on that. How long ago did he walk out? A couple, let's see, probably like three months ago. Okay.

How many kids you got? Three kids. What age? Eight years old, four years old, and a year and a half. So I assume over this three months he's begun paying child support during the separation, correct? We've had our accounts together still. So we've been working together out of one account, and he's living with his parents so he doesn't have any extra expenses.

So you're just using the money with the combined accounts to take care of the family? Yes. Okay. All right. Do you all own anything else? the money with the combined accounts to take care of the family? Yes. Okay. All right. Do you all own anything else? Any money? We own our cars, and that's it.

Yeah, that's the only thing that we have. You don't have any money anywhere. There's no retirement accounts. Yeah, we both have retirement accounts like $15,000 each. Okay. And our home, we have a little bit of equity and probably like $100,000 worth of equity. And what's the home worth? It's worth about $300,000. Okay. And so you owe $200,000? Yes. Okay. And Camilla, were you a stay-at-home mom or did you work outside of the home? I was working in our business. Okay. But yeah, but not a regular set time, yeah. Okay.

And it changed over the years that we had the business. We've had it for five years. Okay. What is your attorney saying? I don't know. I haven't gotten their advice about it yet. Okay. Let me help you with this.

Three months after your husband walks out and lives with his parents is too late to get an attorney so you know i have one i just we've been trying to mediate mostly and not use attorneys okay that's fine there's nothing wrong with mediating but you need an attorney to close and put a lid on this and so you're not getting any legal advice at all i i am i guess i just don't know what the right questions to ask are well the legal advice says the legal advice says that you're going to get a pile of child support from him for three little kids and the legal advice then should say that you're getting half of everything else, at least. Yeah. Okay. Yeah.

So what is the net profit on the business in a year? Net profit, taxable income. What did you all pay taxes on last year? Last year it was $40,000. Okay. Well, the business is probably worth between, if that's an exact figure, it's worth somewhere around four times that, so around $160,000. Okay. And so if you sold the house and you took his retirement account and you got the equity out of the house and he got the business, that's probably not a bad trade. Okay.

So you had $30,000 in retirement at that point. You got $100,000, and you get the most expensive car of the two. You're getting pretty close to half of the assets at that point. And he has the business free and clear of you, and then he can run it and pay child support and maybe alimony, depending on what you come up with. Yeah. Okay.

I also wanted to mention that in the beginning of 2019, we bought out a partner that we had for 30%. We bought them out for $90,000. You overpaid. Yeah, that's what i'm guessing yeah so and you paid cash for that uh no we took out a second loan on our homes to do that okay has that been paid off um we've been paying it down, but no, it's not paid off yet. So that's part of the equity in the home you're getting in my scenario. So that is an interesting part of the equation. Yeah.

So what I'm trying to do is to get you half of the assets and him end up with the business, because you don't want to remain in the business with a guy you're divorced from. Right. You don't want to trust him to give you accurate numbers on the P&L. No, yeah, he's already locked me out of all the accounts. Right. And here's the deal. He doesn't want you to get an attorney

just because he's trying to get it done as cheap as possible. Yeah, and he's trying to probably... I think you probably need legal counsel. You do. You do. Yeah, yeah. Camilla, that's the only way you're going to get a clarity, and it's going to be equal, and it's going to be equal, and it's going to be something that you get done in the best interest of your children.

I'm not trying to pick a fight. I'm just trying to keep you from getting bullied. Right. Yeah. It's time to make the phone call, young lady. Yeah, I agree. Okay. It is.

And you walk them through what you've been through, and they'll hear in your voice. I hear it, the fear and the nerves, but you're going to be okay. And here's the last part of the equation, and this is going to add to your pain, not take away from it on the short term, but on the long term it's going to help you. Unless you're going to land a very, very serious career very quickly, like $80,000 income or above, you're not going to be able to stay in this house. Yeah, I'm planning to sell it and just rent something cheaply. Okay, good. And then you've got to get your career started

and start putting tools in your belt with that money that you get from the house. I think you get the house equity and the nicest car and all the retirement accounts and then maybe some more. Okay. And then he gets the business. Because the business is probably worth about four times 40, maybe five times. So somewhere between $160,000 and $200,000 is his portion. And if you can get everything else to add up close to that, you're getting pretty close.

Or have him give you $50,000 and he goes to the bank and gets it. I don't care what he does at this point. He's walking off from a wife and three kids, so I'm not getting much use for him. So, man, what a mess. It is. Yeah, I think the best thing that came out of the whole call, though, Chris, is what you said, that she needs an attorney.

She does. And not everybody that ends a marriage is a horrible guy. No. It's not me guy bashing, so you stupid people that send me that stuff, I don't guy bash. We don't know the whole situation, but all we've got is what she told us. The facts. Yeah. The details.

But, yeah, you're entitled to, I think, more than it is being hinted that you're going to get. That's my opinion in listening to it. And sometimes that just requires standing up, and that's what Chris is saying. So get some legal counsel. I would get the house sold, take all of that money. I'd take one or two cars, and I'd take all the retirement and maybe some other business, unless there's some other money somewhere else. But I tell you what, I also love the fact that you're just being straight up with her

and letting her know that that house can't stay. So she can emotionally go ahead. She had already done it, though. That's good news. Yeah, she was aware. That's good news. That's a good thing. A lot of people try to hold on to a house they can't afford after a divorce,

keep the kids stable in the house. All the stuff. And it continues the nightmare. Yeah, it really does. Instead it shortens it. This is the Dave Ramsey Show. We'll be right back. Ramsey Personality, Chris Hogan is my co-host today here on the air. We're going to open phones for you at 888-825-5225. Do you remember life before you got on the plan?

Money fights, sleepless nights, hiding, the fact that you were totally out of control? Well, thankfully for you, that's in the past now. But there are millions of people out there who are searching for help, and they haven't yet taken Financial Peace University. If you lead a Financial Peace University class and help someone else get on the plan, I can promise you this, it'll put a big smile on your face. FPU coordinators are normal, everyday folks, help millions of people learn how to get on a budget, get out of debt, become wealthy, give with outrageous generosity.

And of course, there's lots of virtual classes happening right now because we are in the land of pandemic. So lots of virtual FPU classes, and you can be a virtual coordinator. And with a free coordinator guide, you'll have everything you need to do to lead with confidence. You do not have to be an expert. You can help people change their family tree. Financial Peace University Coordinators.

Text to get started by texting LEADFPU to 33789. That's LEADFPU to 33789. Jennifer is in Houston, Texas. Hi, Jennifer, your question for Chris and me. Hi, how are you? Great. I have a question. So my father just passed away, and I inherit roughly in CDs and RAs that he had put aside, like a half a million. And then in access, you know, in property and everything else, probably another300 and something. Okay. So my question is that I don't know what to do, you know, with the IRA

because I know if I move it or roll it, it's going to be taxed. And then with all the CDs that he has that he got me, what to do with that? Okay. The CDs don't have any taxes. The real estate does not have any taxes. Okay. There's no taxes on inherited property in an estate size like he had okay the only thing you're going to have taxes on you will have taxes on the inherited ira

when you pull it out you are not required to pull it all out at once the new laws that were passed in january require you pull it out over 10 years yep uh the 10-year drain it's called and each year when you pull it out there are no taxes on on it, I mean no penalties on it, but you will be taxed at your tax rate as you pull it out. How much of that $500 is CDs and how much of it's IRA? In CDs, it's majority CDs, so I would say probably about $400. So you're going to have taxation on $100,000 over 10 years of time. Okay.

On that IRA. No big deal. No big deal. Okay. And just when you pull money, you know, each year you're going to be required to pull a tenth of it out. So let's say it's $100,000 over 10 years, $10,000 a year, right? Mm-hmm.

And so you're going to set aside a couple of thousand bucks for taxes that year on that $10,000, and then you're going to do something with that $10,000. You can reinvest it into something else or do whatever you're doing with your wealth building or your living or whatever else. Jennifer, what baby step are you on personally right now? Well, I'm OCD. So I, you know, my credit, I have about $10,000 in debt. Okay. I don't have a car note.

Okay. I don't have a car note. Okay. I don't have a house note either. All that's paid for. But one thing I don't, with my current job, I don't have a 401k. Okay. All right. And then secondly, he left the house where he actually did a transfer of a beneficiary. I don't know if it's for me with that.

So I wasn't required to go through the courts or anything like that. It automatically went into my name. So the house is up north in Chicago. So I'm kind of debating, do I sell it or do I just rent it? Is there any reason to keep it emotionally? No, no, not really sell it sell it okay you would never buy a rental property that's 300 grand in chicago if you lived in houston right right you would do other things now when you say when you say ocd are you being serious or you just mean you're high detail i'm very seriously so i'm i'm really paranoid about

debt and buying out now so am i but i'm not ocd i'm ocd about that and that's a joke but that's not a clinical uh diagnosis that dave ramsey has got obsessive compulsive disorder are you i mean what are you saying here well i mean i just don't like that okay okay good i'm with you i just didn't know i don't want to give you different and give the wrong advice here because but yeah so you're just you're you're very conservative and you're very detail-oriented congratulations and so you are worthy of managing your dad's inheritance very well congratulations that's what you're going to honor his memory with your behaviors. Right, right, right.

You just want to be, Jennifer, you want to be extremely detailed and be very careful with what you do. You've got an opportunity for this inheritance to be a blessing or it can become more of a curse for you, meaning the obligation that it's bringing on if you don't take the time to really think through and be clear on what it is you're doing. So let's just clarify. You've got a to-do list here of taking out a tenth of this each year, right, out of the

IRA. The CDs, you're okay being able to look and understand when those mature and you've got them. Getting this house on the market, reach out to a real estate ELP so you can go ahead and get some guidance on it. But I want you to start to think through. You may want to even get connected with one of our financial coaches. Get over to DaveRamsey.com.

I'll tell you what I'm going to do. I'm going to gift you three sessions with a coach so you can have a game plan moving forward, knowing the timing of what you're going to do and when to do it. And now you get a chance to honor your dad's memory. That's very cool. Yeah, because the thing is here, the first thing you get when you have a situation like this is the money comes at you and you go, what am I going to do with it as it comes at me?

And then you go, okay, what's going to be the 10-year result of this? And so you liquidate the house in Chicago, the CDs start and get invested well, we roll the old IRA over into some good mutual funds and we begin the 10-year drain down on it. And so you just develop a game plan of where, okay, yes, it's a blessing, and yes, it's in these forms now, but what form does this money need to take to get me where I want to be 10 years from now, which continues the legacy, by the way. So she probably ends up buying a paid-for home and an upgrade on her home. Gets a car with cash and continues to work and to be very mindful and again.

And then treat it like most of this money's not there and move on up, and you'll really end up in a really, really sweet position. Yeah. Jennifer, thank you for reaching out. Absolutely. Well done. Open phones at 888-825-5225. Abigail is in Manchester, or massachusetts i'm sorry abigail

i'm real short on time ask your question quick hi dave can you hear me yes okay well how are you today great um well my husband and i are on baby step four uh summer. And in the months leading up to the wedding, we saved up $10,000 in our emergency fund, and we saved up $40,000 that we were going to use as a down payment on the house. Shortly after we were married, my husband got accepted into graduate school. Part-time, it's going to be paid. Altogether, it's going to cost $100,000. His company is going to pay $75,000 of it. We're going to pay $40,000 of it. We're going to pay

$40,000 of it out of pocket over the next four years. And so what I'm wondering is, would we be better off to put a smaller down payment on the house out of that $40,000 and just kind of hoard about $20,000 of it to put towards my husband's graduate school, or would we be better off to not buy the house at all until he's done with graduate school so that we make sure no matter what happens we have the cash to get him through? Got it. Make sure you have the cash to get him through. Is grad school more important than two years of house? What's he studying?

He's getting his MBA. Okay. And right now he works in the pharmaceutical industry. He makes about $52,000 a year. Okay. All right now he works in the pharmaceutical industry. He makes about $52 a year. Okay. All right. Will you move after he finishes? Probably not because he'll need to stay with his company for a few years

because they're paying for the graduate school. So he would have to pay them back if we left. Well, the further you get through this, the less risk there is that you're going to end up needing the cash. And so maybe we don't say no house until after grad school maybe we say no house for year one and let's see where we are if everything's feeling really strong after year one you got one year left and you're still sitting on the 40 then you probably could go ahead on the house and you're going to be fine yeah it's don't let that money burn a hole in your pocket. But I love her mindset of going school with cash.

Yeah, that's the only way to go. It is. It really is. Don't do it otherwise. Nope. Don't do it. You'll get yourself into a mess. That puts this hour of the Dave Ramsey Show in the books.

Chris, thanks for hanging out. Thank you for having me, sir. Number one bestselling author, Chris Hogan, is sitting beside me. This is the Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows, ask Dave money questions like, how do I invest my money? Or what is the debt snowball?

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