The Ramsey Show - App - How Do We Reimburse Our Emergency Fund After Having to Use It? (Hour 1)

Episode Date: March 17, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's The 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, Dr. John Deloney. Ramsey personality, best-selling author, is my co-host. He talks to folks about all things mental health, whether it's relationships and boundaries, crazy relatives, crazy looking at you in the mirror, I don't know, whatever it is, we'll help you with it here. And of course, we'll help you with your money stuff and your life as well.

So it's always a good time with Dr. John around here. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Kaylee's going to start off this hour in Dallas, Texas. Hi, Kaylee. How are you? Hi, I'm doing good.

Are you having a good day? I am better than I deserve. How can I help? Well, I have a two-part question. It's about how to pay back our emergency fund. We pay $1,000 a month two-part question. It's about how to pay back our emergency fund. We pay $1,000 a month on our student loans, and we had to use $900 recently of our emergency fund to pay for a car problem. So we were just wondering if it makes more sense to use most of our $1,000 this month to pay that back immediately, or if we should use a smaller portion of that for the next few months to pay back slowly so we're not skipping a month of paying loans

you're talking about your little baby step one one thousand dollar account yeah okay yeah you got to stop paying on debt until you rebuild that if you used it because for the same reason you wanted it there for the same reason you wanted it there to start your baby steps you want it there to continue your baby steps right thank goodness you had that there when that little nine hundred dollar bill came up or it'd be new debt right right so that's yeah you want to stop everything go back to baby step one finish it and then go back to baby step two again get your get you a fresh start so how are you guys doing okay we're We're doing great. We've paid off about $11,000 in the past few months. Very good.

What's your household income? About $41,000. Okay. Very good. Excellent. Excellent. So is that super frustrating, or was it one of those that you, of course it's frustrating, but was it, come on, man, we've got such good momentum, or did you and your husband smile at each other and say, hey, we've got emergency fund?

Yeah, I mean, we said a prayer of thanks that, you know, this isn't killing us. We have it, and we can just pay it off this month and keep going. What a great attitude, man. Good for you. That's awesome. That's perfect. And that's the way you, you know, if you get these ideas and these principles that we talk about in the rhythm of your life instead of being like white knuckled and forced. And that's the way you're doing it.

You're just, this is a rhythm where you said a prayer of thanks. Thanks, money. Thank you, God. The money was there. Thank you, God. We got the money to put the money back. And thank you, God, that we get to keep going. And thank you, God.

Oh, here we go. You know, I mean, and that's kind of a rhythm to that. I've heard people, when they call in and they got that $1,000 emergency fund, then the thing happens. And they throw up their hands as though the cosmos is against them. Yeah. And we're always telling them, no, that's the point. That's why you have it, right? It's for emergencies.

It's for that moment, right? Yeah, that's good for you, Kaylee. Good for. Well done. Julie is in Denver. Hi, Julie. How are you? Hi, Dave. Thank for you, Kaylee. Four. Well done. Julie is in Denver. Hi, Julie. How are you? Hi, Dave.

Thank you for taking my call. Sure. What's up? I have a question about being considered for a Habitat for Humanity house. Cool. And we are seeking counsel. We're on Baby Step 2. It sounds like a sweet deal, but I'm not sure it's a great idea.

So I wanted to see what you thought about it. Okay. Different chapters have different terms that they use for the process. And so how does your chapter work? I'm not 100% sure. We're still in the early interviewing process, but we are being considered. Mm-hmm. Okay.

I'm wondering if it's a, like if we got into the house, the payment would be about $600 a month, which is great. So they're not giving you a house free and clear. They're giving you a house that has a debt against it, correct? Yes, $160,000 mortgage. Okay. And what is the benefit of it being a Habitat house? That's, what do you mean? I'm sorry.

I mean, you could go buy a house for $160,000 mortgage without Habitat, right? Yes. So why Habitat? What are they giving you? Opportunity is what it feels like because the market in our area for a house this size would be near $300,000. Okay, so it's half off. It's half off, but I'm not sure if you actually gain the equity and ever have the chance to sell it. Yeah, some of them don't, and that's why you need to learn the terms. Okay.

And some of them you get the home, and there's all kind of wacky stuff on the default and other things and the the programs are meant to be a blessing but what they're pushing the reason they build some of these uh i guess weird terms and uh into the payment plan and into the mortgage and into the sale and so forth is they've had a recidivism problem they've had people get into the homes and fail yes and so uh like a lot of them so that's how we've gotten involved is to help them learn how to handle money so when they get a free house or a half-off house or whatever, they don't end up going and buying six big screens at Best Buy on 90 days, same as cash, and then end up losing their house. Exactly.

And that kind of crap has happened too much with Habitat. Habitat is a wonderful organization, and they do really, really good work, but they're just trying to uh people's behaviors have to change uh even if you gave them a free house they'll screw it up right right your behaviors don't change and so that in so what they're trying to do is not be enablers they're trying to be real helpers and so their their spirit is good uh i'm an i'm an admirer of habitat we've done a lot of work with them through Financial Peace University over the years. We've worked here in the Nashville community very closely with them.

But, again, you need to learn the nuances of the terms, and I don't mean terms as in definitions. I mean, what is the restrictions on the equity and the sale, and what is the payback, and can you refinance later and it not be in there and you could get you could get just stuck in some of these deals and again they're well meaning but they don't but if things all work out well it's not as much of a blessing as it sounds like sometimes depending on how they put the the process together because they're going to limit the sale or they want some of the equity back if you do sell it or if you refinance you you know you got to refinance through the portion of the equity that they gave you so that they can move on to the rest of the houses and build them

and it's just it's it gets real complicated so dig in there and learn what you're getting into you're very wise to ask a lot of questions and make sure that the blessing is not so mixed. I don't want a mixed blessing. Yeah, I didn't know. I'm learning just now from that. The public thinks that they just gave them a free house. That's right. And they don't. And there's a lot of different terms to it.

Hardly ever. And it never occurred to me now that someone could get a free house and turn around and flip it and sell it. So there's going to be all kinds of caps and restrictions. Yeah, and it should. Yeah. Because the purpose is to give someone that doesn't have a home a home. and the benefit of home ownership it's not to make you know not to be watching cable tv and go flip this house let's do habitat who knows to be you know have a place to

come home to right so it's it's you know but they've had people try to scam the system and they've got they got to put some protections in absolutely Absolutely, yeah. And so they're not bad people. But you need to really know what you're signing up for. And it's smart to do that. And then you can decide if it's right for your situation. This is The Ramsey Show. Your number one wealth building tool is your income. For business owners, this comes as no surprise, as you're used to putting in extra hours and watching your bottom line. That's why Christian Healthcare Ministries, or CHM, is a great option for those who are faith-focused and budget-conscious.

CHM is not health insurance. Rather, it's a health cost-sharing program. It's not harder, but it is different. To learn if CHM is a fit for you or your business, visit chministries.org slash budget. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Ryan is in Columbus, Ohio. Hi, Ryan. Welcome to The Dave Ramsey Show. Hi, David, John. Thanks for taking my call. Sure.

What's up? So my wife and I just paid off our house last October, so we're in baby step seven. Woo! And we're trying to figure out, yeah, we're trying to figure out what to do with the extra money we're having from not having a mortgage payment. Way to go, man. Such problems. Yeah.

So my wife's a dentist, and she's currently buying into the practice that she works at. We were actually able to do this without taking out a loan by her paying her partner each month for equity in the practice. And then their plan was to do this for four years. And then at the end of the fourth year, she would purchase the rest of the practice from him. So we're currently in the last year of that plan and we're planning on getting a business loan to pay off the rest of the practice, you know, after this year. So my question is with that, um, with that business loan coming up in the next year, and we have all this extra money from not having a house payment anymore, should we save up that money and take out a smaller loan?

Yep. Or should we use this year to save for retirement? Or no loan. Yeah. How much is the loan? How much is the buyout at the end of the year? It's about $480,000. That you're going to need more than she's already paid in?

Yes. Ooh. So it's a serious practice, or you're seriously overpaying. Okay. Anyway, I want you to go relook those numbers and just make sure that you're not overpaying for this. Dentists have a reputation for overpaying yeah we have a uh we have a accountant that works in uh buying out dental practices he looked at the numbers and he said for our area for the size of the practice

this was a good price he actually said we were getting a deal so okay all right it must be mammoth okay um okay so what's your household income? Combined right now with her paying her partner is about $200,000. Okay. But then after she owns the entire practice, she says will probably be $350,000, conservatively. Okay. So, yeah, what I would like you to do is to save as much as you can possibly save almost like your own baby step two again okay real intensity because i

really don't want you to have this loan but it sounds like you're going to but let's make it as small as you can possibly make it and then let's pay it off as fast as you possibly can um okay we've done a lot of work over the years with a lot of dentists in entree leadership and also just in financial coaching and um the uh the amount of debt around being a dentist is it's it's mind-blowing in general and in that in the community that your wife walks in every day, a million dollars or a half million dollars in debt for the rest of your life is not unusual. It's standard, and you can get sucked into that paradigm, and I'm going to challenge you not to.

I'm going to challenge you to get this paid off like it was a credit card, like you were ashamed of this debt you follow me yeah don't normalize it and keep it like it's a dadgum pet so limit the size of it this year by saving everything you get your hands on and then get into um attack mode and finish and take out as small loan as you can and take that loan out and it sounds to me like you can take that loan out in 12 to 18 months from the time you it's going to be a very short period of time if you guys won't go back and act like now i'm a rich dentist or something i i did some research back in grad school on the mental health of doctors and physicians and nurses

and one of the worst subgroups was dentists. And I have to wonder. High rate of suicide. High. We'll have to wonder if it's this crushing debt that you just carry around and carry around that's normed in that community more so than some of these other communities. Yeah. The Borrowed Future podcast that we did, we interviewed a dentist that had over a million dollars in debt.

In student loans, yeah. Yeah. And the guy was just crying. Yeah was just crying because you can't you can't clean your teeth you can't clean your way out of that right yeah well you can but it's just i mean but it takes one you gotta have a you gotta have a certain level of and you gotta be you gotta have some specialization in the thing or you gotta have some volume or something to get the income up but it sounds like she's gonna be making uh out of the $350,000, I don't know, but it sounds like she's going to be making a quarter of a million dollars a year, her part. So, yeah, let's use everything we can to limit this.

And then when you don't have any payments in the world and you're making $350,000, now you've got the ability to do all kinds of things. And it does change the way you operate a business. It changes the way you view going to work. It changes when you own a practice or you own a business. When you get the debt off of you, the borrower is slave to the lender. It changes the way you stand, the way you walk, the way you carry yourself. Dustin is in Naples, Florida.

Hi, Dustin. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Great, Florida. Hi, Dustin. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Great, man. How can we help? My wife and I are on baby step number two with baby number two on the way. We currently have an hour commute, and we're wondering if we should sell our house to move closer to work.

We both work at the same company. Yes, but you may be renting. Yes, that's what we plan to do. We plan to rent until we get out of Baby Step 2, 3, and save up our down payment. How much closer can you move to work? We can move maybe two minutes away. Yeah, and so you're going to get two hours of your life times two parents,

four hours of parenting returned to you rather than in the car every day. Absolutely. I'm doing this. I'd do it today. Yes. Yeah, I have an 11-minute commute, and if there's no traffic, less. That would be illegal. But, yeah, so I don't want to spend my life doing that.

A lot of people do, and it's normalized, and some people redeem the time with audio books and other things, and there's all kinds of ways you can do it. If you have a commute, commute's normal in a lot of large metro areas. But it is a decision that you're making and you ought to make it intentionally and if you can change it and get more sections of your life back i highly recommend you do not to mention you cut your your debt load back that i mean you're gonna find yourself with less stress and four hours of your life back man that's a that's a big turnaround for your whole home yeah the the level of uh simply the amount of sleep you're getting will change man sleep the ability to just have

conversations with your spouse ability to be present with your kids all that's gonna well they're in the car an hour a day they got the opportunity for conversation they're trapped but but yeah but it's just yeah that's uh if you're in an area and naples is an area where you don't have to do a one-hour commute in order to just have a job and be able to have a place to live, then, yeah, I always encourage that. Now, for those of you listening out there, that is not to say you move up in-house into a more expensive house. Well, the homes in that neighborhood are more expensive. Well, then you maybe can't make that move. Right.

Or save your money. You need to move a lateral move down and or become a renter for a period of time to get your finances under control. Don't use this as an excuse to go do an increase in debt, an increase in house price purchase. um you know john the um with personal finance being 80 behavior 20 head knowledge the behavior aspects having you around to talk about this stuff is um has been uh it's been helpful very helpful but the uh the power of the human mind to rationalize and to to do something stupid and figure out a way and twist it in our brain to where they it sounds smart yeah we will find what we are looking for and if i find a way the math works in my favor i will champion that if i find the way i can make this my wife's fault not mine i will champion it if i can find a a way to hear what Dave Ramsey just told me. He told me to sell the house and move and buy double the price in town.

I heard him. We'll find a way to lie to ourselves to make that happen. We have a hard time telling ourselves the truth, Dave. A guy drove two miles to work. Two miles. Went and bought a $30,000 pickup because his old pickup that was paid for in the driveway didn't get good gas mileage. Get a bike. Didn't get good gas mileage. Get a bike. Right. You'd have to drive that

new truck with the moon in back to get enough gas mileage to pay for it. That's somebody who lied to himself so he could get a new truck. Exactly right. That's what I'm talking about. This is the Ramsey Show. Thank you. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Adrian is with us in Long Beach. Hi, Adrian.

Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing? Thanks for taking my call. I appreciate it. Better than I deserve. How can we help? So my wife and I started the financial piece this month.

Yay! We're currently on baby step one, which we have about $500. Atta boy. But we want some advice on what we should do with our vehicles. Currently, I make around $ 35,000 a year. My wife makes 52. Um, we have 110,000 in debt and the vehicles we currently own. My wife's vehicle is a 24,000. My vehicle is a lease, which has $22,000 left, and I'm already over mileage, and I just don't know what to do here. I kind of want to get rid of them. I just don't know what to do.

Okay. All right. Well, the rule of thumb that we use on cars is two things. If you like them and want to keep them, the only way you would want to keep them mathematically is if they total up to less than half your annual income, which these two barely do, but they're right around it. And you can be debt-free, not counting your house, without selling them in two years or less. And that's questionable here. So both of those things point to selling one or both of these cars, and it sounds like the one you're fleecing is the biggest mess of the two.

So if we're going to start, we'd start with that one probably. Right, yeah. That kind of sounds like a conclusion you'd already come to. Yeah, and I was thinking about it. It's just I don't know. I'm just a little confused because I don't know how to sell it. If I wanted to sell it, should I just buy it outright? No.

Well, you have to buy it outright and sell it simultaneously. Here's how you do it, okay? There's a couple of numbers you've got to gather up to figure out what to do. Number one, who's the car fleeced from? Who's the fleece with? Toyota. Who? Toyota.

Toyota. Toyota. I'm sorry. I'm deaf as opposed okay toyota all right and so you're going to call toyota motor credit and say uh here's my account number what is the early buyout on the fleece if i want to pay it off today and you send me the title. Okay. So it's like having the payoff on your loan if you had a loan. But that's not what it's called on a fleece. Okay. Now, it should be at the end of your lease, there is a figure that you can buy the car for after the lease is over. And you have your remaining payments. If you add your remaining payments to that figure at the end of the lease,

that's your total exposure on this car, and the early buyout should be less than that by a couple thousand bucks anyway, a few thousand dollars. Okay. So how much is left on the fleece? How much before it's over? It's $22,000. Now, how many months uh i have one more

year left february of next year okay so you have so 22 000 includes the that you've gotten the early buyout it sounds like well i looked up on my you know on It says $22,000 left on the loan. Okay. No, that's not the number I'm looking for. All right. You've got to call them, and you've got to get the early buyout. Okay? Because that number is the number I'm talking about.

It's the total of all your payments remaining plus your buyout at the end. How much is your payment? Okay. It's about $400. Yeah. Okay. And so you've got like $5,000 of those plus you've got a $17,000 buyout at the end, it sounds like. Mm-hmm.

Does that sound about right? Okay. Right. Okay. And so anyway, let's pretend that when you call them it's $20,000 for the early buyout. That's probably not going to be that far off, somewhere in that range. Okay? Then you look up on Kelley Blue Book and find out what the car is worth private sale.

Have you done that yet? Yes. And it's about $21,000. Good. Okay. So you can sell it and pay them off and get out basically about even, right? Right. That's awesome.

And then we've just got to get you $1,000 fifteen hundred dollar car that you pay cash for and we're going to drive that hoopty for a little while while you get yourself out of debt now we're going to do the same thing with her car if we can't get you moving and get you out of debt okay either one of you got overtime available yes what do you do to make $35,000? I'm an estimator at a construction company. Okay, so what are you going to do for extra income? I was thinking of starting maybe a side business doing some power washing. Love it.

I have all the equipment here at the office office and they tell me i can use it freely so that's what i'm talking about you're the man right there man you can double your dadgum income that's right yeah and you're gonna yeah that's a ton that's awesome yeah there you go and now we're gonna put you on on a budget and you guys aren't going out to eat you're not going on vacation we're gonna list these debts smallest to largest we're going to attack these debts in like a vengeance and uh so now we've got like eighty thousand dollars i'm sorry ninety thousand dollars of debt left after we get rid of your car and if we do 45 a year for two years out of 87 you're debt free in two years right awesome and i think that's new i think that's doable but it's going to require extreme focus and concentration and no one takes your eye off the ball.

Lots of Saturdays and Sundays starting early, power washing, power washing until it gets dark, getting up and doing it again. Sounds good. The next two years are power washing, and then after that you're going to hate power washing for the rest of your life. You will be part of the California water crisis, my friend. Single-handedly cause the crisis. Single-handedly.

That's right. But they will be shiny and clean, right? Everybody's going to be clean. There's not going to be any mold or mildew. Nope. I love it. Well done. Yeah.

Hang on, man. I'm going to also put you into Ramsey Plus because you need to be in there going through Financial Peace University. He said he was already in it. No. He just started the, I think, got word of it. Okay. If he's not already in it, put him in it as my guest.

We're going to take care of him. Eric is with us in Cincinnati, just giving everybody stuff. Hey, Eric, what's up, man? Hey, thanks for taking my call today. Sure. How can we help? Well, I need your permission on buying a vehicle. No, you don't.

I want to buy my Dave car. No, you don't. I'll give you my Dave car. No, you don't. I'll give you an opinion, but you don't need my permission. You're a grown person. Yeah, I hear you. So I'll give you my stats. I'm on four, five, and six, and I think I'm in the right place to purchase this vehicle. I don't want to buy a new one.

I want to buy a Toyota Tacoma, and I don't want to buy a new, but I want to buy it like two or three years old. And so that's what I'm thinking about doing. I've got the cash to do it. What's it cost? I'm looking to spend about $25 to a little over $20. Yes. What's her car cost? Well, she has a business car through her work so she doesn't

have a car in her name the business gives her a car correct okay yes all right and what's your household income uh about 115 okay and you have your emergency fund in place and you're out of debt except your house correct yes i'd buy it okay it's a good truck all right i just wanted to make sure i wasn't like overstepping or uh you know how i did that uh i think how you did it was that it's less i have less than half my household income in things that depreciate value. There you go. Right? Yep. You're paying cash?

Okay. Yeah. And you have your emergency fund in place. So it's not an emergency to buy a taco. But tacos are great trucks. My wife, she likes to have an emergency to the emergency fund. I like her. Yeah.

And so she's very much like yours. And so I'm just trying to figure out, we would be dipping into the emergency of the emergency fund. Hey, Eric, you're a smart guy, and you clearly have worked together with your wife to get an emergency fund, get out of debt, do all this stuff the right way. Trust your instincts and trust the math, man. You guys are doing good stuff. Very well done. Very well done. Tacos are good trucks. We've got a couple of them trust the math, man. You guys are doing good stuff. Very well done. Very well done.

Tacos are good trucks. We've got a couple of them in the Ramsey family. This is the Ramsey Show. Thank you. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Cam is with us. Cam's in Jackson, Mississippi. Hi, Cam. How are you? Hey, pretty good. And kind of out in the rural area south of Jackson, Mississippi, but that's okay.

And I do appreciate the opportunity of being on the show and posing the situation with a possible blessing that we're going the right way. Okay. How can I help? Yeah, Dave, my wife and I, she's the big money person. And what I mean by that, she handles everything. I'm not much on that. But anyway, we've had her home place for years and have always wanted to have something over there.

About two years ago, we bought a little 700-square-foot 1948 house from the county, moved it over there, did a lot of work, went to get it completely remodeled and built back up and everything and of course around this rural area all the best builders they are but they want to be paid every week so construction loan was out of the way out of the way our house was paid off we used a heat lock to do it got approved for a certain amount because we used other monies we did not and have not used the whole HELOC and won't but I always wanted this little place to stand on its own debt and so it's sitting there basically free and clear uh the HELOC is the only debt we got how much is the HELOC it was we got approved for 150 how much do you owe against you you owe 90 yeah we just we just

got through with everything you spent ninety thousand dollars on a 700 square foot house well we have built the thing for old age and now did you add 10000 square feet to it? No. How do you spend $90,000 on 700 feet? Well, when you're starting from square one, now we had to add, because it was 700, we had no utility room. We had none of the amenities to it, so we had to build on to it. So what is this total problem? What's this little house and the land worth nowadays we're it's probably looking to be about 180 000 with the acreage it's got and what's the acreage worth the acreage by itself yeah probably 60 okay all right um so you have a hundred and a hundred and uh eighty thousand dollar property

that is paid for and you owe ninety thousand extra on your home and what is your first mortgage balance our first mortgage we don't we didn't have a mortgage okay so nothing had a mortgage except the only mortgage you have is this $90,000 HELOC. Yes. Gotcha. Okay. And so it's sitting at about 7, it's sitting at 7.5%. Yeah. Everything we're trying to do with this little house and all the

bank, different banks I've talked to and credit unions and stuff, the best we're going to be able to do is a cash out on it at about 3.75. Our thought is to do is a cash out on it at about 3.75 our thought is to do that put it all toward the heloc whatever little remaining balance is there we'll pay that but then make sure we've got this little house holding its own debt at 3.75 why does it need to hold its own debt it's your debt why does it have to be on that house? Why can't it be on your house?

Well, I don't want it. I really don't want it on my primary house. Why does it matter? Because the interest rate's higher. It's not higher on your personal home. On the HELOC. We're going to get rid of the HELOC and get you a first mortgage on your personal residence. What did you say your household income is?

Our household income is about $120,000. Okay, so what I'm going to do is I'm going to put $90,000 on five years fixed rate, no closing costs on your home at the credit union at $2.9. No closing costs, fixed rate, five years at $2.9 or less. Credit union won't do that. Go to a different credit union. Go to your local bank. Somebody will do that deal because you've got tons of equity in both properties. Leave the little house standing free and clear. It doesn't matter which mortgage the house is on

because you're going to pay it off in very short order anyway if you're smart. Matter of fact, you ought to be debt-free in two years. Yeah. You could just do that. You could just pay it off in two years. Yeah, but I guess I'm fixated on this interest rate. Well, don't be. You need to get to something lower.

You need to be fixated on $90,000 going away. Gotcha. Yeah, and that's true, and we are. $45,000 a year for two years. $90,000. Done. But doing a first mortgage versus what we're trying to do on this little house. If you want to get a lower interest rate during that two years on a five-year note, like I just said, do it on your personal residence because you're going to get a lower rate than you're going to get on a non-owner occupied

because that's why it's 375 because it's not occupied. Yeah, right. It's a secondary property, and you can get your local credit union to do that. But listen, here, run the numbers on this, okay? The difference in 7 and 3, let's say 2.9, is 4% on 90,000. Oh, wait, we don't have 90,000. We have 45 after a year. Oh, wait.

So you're really only paying just a handful of dollars to keep the HELOC in place if you get your button gear and get this paid off in two years. And so the actual nominal dollars that the interest rate is creating, the real dollar amount, is not enough to buy a biscuit hardly. And it sounds like the need to get this new property overrode this. Good sense. I am debt-free, and now that we went and did it, it's not making anybody feel any better. And now we realize we owe somebody $90,000. And we had everything free and clear before we did that.

Yeah, I'm just trying to get this in my head. So what we're discussing here is you refinancing this, you might save $1,800 if you pay it off in two years. It's an $1,800 problem we're discussing. And that's not worth the anxiety you're feeling over it, man. Yeah. So if you wanted to refinance it on a five-year fixed rate, 3% or under, no closing costs. No closing costs, must be fixed rate, no balloon,

fully amortizing on five years, no prepayment penalty with your credit union, they'll do that deal. I mean, you have to lean on them, but they'll do that deal. That's a good deal for them. And they portfolio that loan. They hold it in their portfolio. That loan will work, and that will save you $1,800 over two years approximately, maybe closer to $2,000.

And that's worth a trip to the bank, right? It's probably worth doing, but it's not your problem. Right. I think you used the right word fixated on the interest rate you're fixated on the wrong thing be fixated on kicking 90 grand's butt and getting it out of your life and next time you start a project like this begin with the end in mind because you have way overdone the little house well way overdone. More so, Dave, you mortgaged your home. You mortgaged

a place where your family lives for a fun getaway. A 700 square foot overdone that you spend 90 grand. Run that out. That's $1,000 a square foot. Yeah. We just spent on this thing. There's golden baseboards. Oh my God.

Yeah. You can do a lot in southern Mississippiissippi for a thousand dollars a foot i tell you what man you can buy most of southern mississippi just uh yeah they go a long way so yeah cam that's um anyway begin with the end in mind on projects set better budgets on them they give you more reasonable returns uh but you you know whatever mess you've made here it certainly can be cleaned up and the fastest way to fix this is to pay it off the fastest way possible open phones at 888-825-5225 you guys jump in we'll talk about your life and your money so let me back up what would i have done if I woke up in issues? I got mama's old home place over here.

I want to put a place on it. I make $120,000 a year. Our current residence has no mortgage. What do we do? You save up and you pay cash. That's right. For whatever you're going to do. Number one.

And you could have done the exact same deal in two years. Yep. As paying this off in two years. And then you'd have paid cash as you went. Now, here's what will happen when you pay cash instead of a loan. You don't spend $90,000 on a 700-square-foot rebuild. It's the weirdest thing. When you're spending your own money instead of borrowed money, you're more careful with it.

Because suddenly you feel like, we've got $150,000 to spend on this project, right? Yeah. Instead of, hey, we need to get this. We want to have a vision for this, and we're going to do it. Because suddenly you feel like, we've got $150 to spend on this project, right? Instead of, hey, we need to get this. We want to have a vision for this and we're going to see that vision all the way through. When you write the check out of the HELOC, you don't feel it. It's not real money. It's not real money. When you write your check out of your

savings that you pounded to put in there for two years, you're like, I don't think we need the golden base portion. That's right. Let's just go with wood. It changes the whole thing. Oh, man. That puts this hour of the ramsey show in the books so Hey guys, this is Kelly, associate producer for The Ramsey Show. Did you know that over 16 million people listen to The Ramsey Show every week? And a lot of those people listen on one of our 600 plus radio stations across the country. To find a station near you, head to DaveRamsey.com slash show.