The Ramsey Show - App - How Much Buffer Do We Need When Budgeting? (Hour 2)

Episode Date: September 2, 2022

George Kamel & Ken Coleman discuss: Paying off a home vs. starting a business, Preparing to move out of your parents' house, Why you should pay off your debt smallest to largest, The danger of comparison.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6   Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage studio, it's The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to living well. I'm George Campbell, joined today by best-selling author Ken Coleman, and we're excited to take your call, America. The number is 888-825-5225. Now, if you missed the last hour of the show, you heard that right.

Pods Moving and Storage is our new studio sponsor, and we are so proud to partner with those guys. Awesome team, awesome company. If you're looking for an affordable option that puts you in control of your move check them out 888-825-5225 is the number to call randy's kicking us off in albuquerque randy welcome to the show hi guys thanks for taking my call happy to take it how's it going with you oh not too bad i've got a conundrum I'm hoping you can help me with. Here in a few weeks, I'll be getting laid off from my job. Oh, man. I'm sorry about that.

I don't. Yeah, it happens, I guess. Yeah. I don't have any debt other than the mortgage. I owe about $163 on the mortgage. And I'm not 100% sure about the number that I'm going to get in my severance, so I'm guessing it's 75,000 to 80,000. Great. And I have 40,000 saved up, and I have the option of selling a motorcycle that I could get probably another 35 out of. So my question is, should I go ahead

and try to pay off the mortgage and be penniless and jobless, or try to start up a locksmithing business and try to continue to make mortgage payments and continue on with life? Interesting. What have you been doing in your work? I work at a power plant. Okay. And they're shutting the power plant down permanently. What's your trade at the power plant? What's your skill set in?

I'm an operator. So a race car driver drives the car, which is what I do. Actually, I'm a supervisor. Then you have the support teams, mechanics and electricians and that kind of thing. What is your salary in that job? $120,000. $120,000. And so the locksmith business, is this something you've been kicking around for a while,

or is this a relatively new idea? About a year. Okay, and how much do you know about the locksmith business? You talk to some guys, know some guys that are in it. For about the last six months, I've been running around with a guy. Okay, good. What does he make? I was actually considering purchasing his business, and this year I think he's on track for about $120 in revenue. Right, but he's not paying himself that, right? Oh, no. Yeah. I mean, George, there's a money question here,

and then there's also the work question. The key is I don't see it as binary options. Should you be penniless and jobless or start a locksmith business? I think there's a compromise here. I do, too. We hang tight. We find a new job. We have a pile of money, and then we move forward.

So let me speak to the job front because I think, George, you and I are on the same page. I don't want him wiping out his savings on this. Not when he makes really good money. He has no other debt. The $163,000, we can attack that. And we don't know what future income looks like. Yeah. So I'd like to see you use that severance.

Let's say that $75,000 of severance. That gives you a little bit of time to make some good decisions and uh i would be trying the locksmith business a little bit on the side uh give it give it or give it a run but but kind of do it on the side uh if that's even possible uh because i i know when people need a locksmith it's not like you know a nine to5 schedule. But I'd like to see you make a transition into something else professionally, get you closer to the 120, and give yourself a little bit more time to explore and find out what needs to be true for me to make 100 to 120 as a locksmith.

Until you're really clear on that, I wouldn't go all in on that. Okay. Are you married? I i am my wife works uh she just started a new job this week as a matter of fact uh how much all that's new information how much she gonna make uh 65 all right have you talked to her about this oh yeah she's she's on board with it she doesn't have a problem with it i'm. I'm at this fork in the road, and I just don't know which way to go. Well, this is new information. So if she's going to make $65,000, and you're getting, let's just take the low number.

You don't know this for sure, but let's say you get $75,000 in severance. You guys could probably be comfortable off the 75 and the 65 together, correct? The 75 Severance and 65? That she's going to make. I'd be comfortable off of that. Okay. Well, that changes my advice a little bit because I think that now you've got a chance to go for it

and see what it does. And you've got no other debt but your house. Certainly the motorcycle does represent, if you want to sell that. The fact that you're even asking us if you should sell it, are you open to selling it? Is this emotional? Is this sentimental to you? Or are you kind of like, I don't use it much anymore.

I'm good to get rid of it. Yes and no. Yes to both of those. I've been riding for a long, long time. It's part of me. That's one of my passions. But if I need to let it go, I'll let it go. a lot of motorcycle for making 65 a year. And so let's wait and see what's next for you before we sell that. You've got a big pile of cash, but I would also look into leadership and supervisor roles. How many years of experience do you have with that? Since 2012. So we're talking, you've got a decade of experience in leadership and supervising. You're telling me another company wouldn't hire you in that kind of role?

Not make the same kind of money I'm making now. Right, but I think you really want to be a locksmith. Am I hearing that correctly in your voice? You really want to do this. I really do. Yeah. But if it doesn't make financial sense, I don't want to. I'd rather be secured than be a locksmith, if that's what it takes. Right. So I don't know if you can do some contract work for your buddy, you know, when he may need a few extra hands, and you just do it, and you kind of really dive into the industry. You know what he's making, but if you had time to do a little more research and go, what would it take to spit off the amount of revenue that I need to pay myself? I think there's still too many questions

to commit to full-time. So I'm with George. I would look for another position that maybe even pays you 80 or 90, okay? While we get the locksmith business off the ground. While we figure out if we're going to, in fact, really invest in this. You don't know what you need to know to commit right now.

You just said that, and that's okay. I'd keep the bike. You don't know what you need to know to commit right now. You just said that, and that's okay. I'd keep the bike. You got $40,000. That's a very good emergency fund. And if you're itching to pay off that mortgage, and you've got the pile of cash outside of your emergency fund, and selling the bike can get you debt-free to where you can do locksmithing and not have to worry, man, I'm doing that. I'm taking my dream job over to the bike. We can get another bike later. So that's my plan, and I think that will lead you to where you want to go. It stinks you're getting laid off, but I see a lot of silver lining here that you get to step into something you've been wanting to do. And you've gotten to a place financially where you're able to do it without a ton of stress. And that's why we do these baby steps. It allows us to live more freely in every other area

of our life. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values

and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets. That's chministries.org slash budgets. This is The Ramsey Show. I'm George Camel, host of the Fine Print and Entree Leadership Podcast, joined by Ken Coleman, host of The Ken Coleman Show. You can find all of those shows on The Ramsey Network or wherever you listen to podcasts. We are taking your calls this hour,

888-825-5225. I can help answer your money questions. If you're trying to get out of debt, get on a budget, maybe save up that emergency fund, start investing, trying to figure out if you should buy or sell the car, the house. And Ken is here to help answer those career questions, which right now, Ken, there's a lot of people wondering about their career, wondering if it's time to switch, wondering what to do because of a layoff, just a lot of movement happening. Let's just talk about the fact that this is a really great job economy, and one of the ways to get through the baby steps faster is to increase your income, whether that be a part-time job or making a career pivot.

I should also mention that just today only, as we're together from time to time, but today only we're going to also talk about the strong power move it is to wear a black t-shirt to work. That's right. So we'll also add that content in as well. It's in honor of our friends, the minimalists, who always wear black t-shirts. We did not talk about this. We didn't, and I decided, let's go for it.

I was going to change because Ken wore it first, you know, but here we are living our best life. Paul joins us in Cleveland. Paul, welcome to the show. Hi there. It's great. Glad to welcome to the show. Hi there. It's great. Glad to talk to you too. You as well. How can we help?

Okay. So I'm 24. I'm ready to move out of mom and dad's place. I know renting is not a waste of money, but I put myself in a financial situation where I think I'd be ready to buy a piece of property. My question would be, would there be any downside to me buying something more or less expensive like a townhome or a condo versus a single family house? I'm a big fan of doing that move as a single guy. You don't need

a three, four bedroom house, do you? No, I do not. So where are you at financially? Are you out of debt? Do you have an emergency fund? I have an emergency fund. I have $0 in debt. Okay. So how much emergency fund are we talking? $15,000. Okay.

And that's three to six months of expenses for you? Yes, plenty. And then outside of that, how much have you saved up to buy a house? $45,000 roughly. Good for you. So what's a condo in your area going to cost you? Less expensive one, less than $100,000. Really?

Yeah. $100,000 for a condo in Ohio. Might be time to move, Ken. I'm not going. I'm not leaving, Jordan. So you're telling me you could put down 45% today on a condo in Ohio. Might be time to move, Ken. I'm not going. I'm not leaving, Jordan. So you're telling me you could put down 45% today on a condo? Yes. Well, that's also money I've saved for closing costs. I would be less than that, but yes. Sure. Man, that's incredible. What's your income?

65. Okay. So our parameters around this are you get a 15-year fixed rate mortgage where the payment is no more than a quarter of your take-home pay. And you're obviously going to put down more than 20%, which is going to help you avoid private mortgage insurance. So if you do it that way, there's no downside to moving today into a condo. Now, you might have a higher HOA fee, so you factor that into the cost. And my first two homes were

townhomes. And I loved it because they take care of a lot of things that normally you wouldn't get taken care of. And so they're going to take care of the exterior. They're going to take care of mowing the lawn and all that kind of stuff as long as it's not fenced in. Do you have an opinion, George, for our friend here, whether a condo or townhome would be better. I feel like townhome might be a little better. It just depends on what he's looking for. If he's a single guy and he finds a one or two bedroom and that's all he needs, that's fine. It may be cheaper. And so as long as it's within the parameters, buy the one that fits your needs that you love the most. But it doesn't sound like Paul over here is going to go buy a $300,000 townhome, right, Paul?

Absolutely not. That's crazy talk. They've become crazy for that. How excited are you to get out of your parents' house? Too excited. Yeah, I'll admit that. Well, Paul, you've done the hard work. Now, if you called me and said, hey, I'm $60,000 in debt, I have no money saved, I want to go buy a place. I'd say, heck no. Let's go rent for a year. There's nothing wrong with renting. I'm not mad at renters. It's buying patients. There's a lot of things you don't have to worry about as a renter. So be prepared. Make sure you've got a line item in your budget for home maintenance and repairs because there

will be lots of that. And being a homeowner is very expensive. There's property taxes, homeowners insurance is higher than renter's insurance. And so as long as you factor that in, which it sounds like you have, this is a great move. Okay, awesome. Is that the confidence you needed? Yeah, that is. It's just a lot of stuff's been moving on, and I'm like, you know what? Nice to get a good opinion every once in a while.

And hey, listen, take your time. Don't buy the first thing you see. I mean, go look at several different condos. You know, when you get excited on something like this and you get the green light, you know, you can get a little too excited and shop around. And make sure you're working with a pro. You can go to ramseysolutions.com slash agent.

Connect with one of our endorsed local providers, a Ramsey-trusted agent. And these folks have lots of experience in your area, lots of transactions to back it up, and they can help you sort through this new endeavor of being a homeowner. Ken, this inspires me to hear a 24-year-old who's got a great head on his shoulders doing it the right way. Yeah. Well, you know, he's probably been very, very wise, even though he didn't want to live with mom and dad. Living with mom and dad for a while has obviously helped him get to a place where he can buy what he wants to buy. And he wasn't blowing his paychecks. He clearly was saving it, being diligent. Thanks for the call, Paul.

Ed joins us up next in Cincinnati, Ohio, down the road. Ed, welcome to the show. Hey, thanks, George. Absolutely. How can we help today? So I am in baby step two. My wife and I are just trying to pay off our debt as fast as we can. By the way, two paid off cars and one that will be paid off next month. Wow. What do you got three cars for? Is this a big family? No, but we bought my wife's grandfather's 91 ford ranger for 500 so that i could use it for my side hustle woodworking that'll do that's a deal man yeah and then um so the question is uh

last month we came up to the uh end of the month and did not leave hardly anything in our checking account and then realized, oh, shoot, the mortgage is due on the first and our paychecks don't go into the second. So I'm wondering if there is a rule of thumb for what to leave in the checking account as a buffer so that situations like that don't happen. Absolutely. Well, we always tell people, you know, to do a zero-based budget. And some people think, oh, I guess that means I need $0 in my bank account. And, of course, you know that's not the case. It means your income minus your expenses equals zero.

And so, yes, I would have a buffer of a few hundred dollars at least in there and make that your zero baseline. So if you say, hey, we're going to keep $300, $400. Obviously, your mortgage is different. This is just we haven't planned properly when it comes to the budget. So I wouldn't say this is a buffer issue. It's a budgeting issue. So let's talk about this. You've got how many paychecks a month?

You get paid twice a month, both of you? Yes. Okay. And is it first and 15th kind of thing? Yeah. Mine usually is on the first, and then my wife's comes in around like the third and then mine goes in on the 15th and my wife's goes in on like the 17th or 18th. Okay. How are you guys currently creating your budget?

We use the EveryDollar Premium app. Oh, awesome. Well, there's a new feature in there called Paycheck Planning, which is exactly designed to solve this issue for you. So you can go in and mark all of the expenses and when they're going to come out. And then based on when your paychecks are coming in, it'll show you when in the month you're going to run out. You can start moving things around to make sure the money's there. Some people like to get a full month ahead of expenses. And that's great when you can do that. Right now in Baby Step 2, it's probably not going to be easy. Yeah. How much margin do you guys have at the end of the month to throw towards debt? Usually we're putting between

$1,000 and $2,500 into debt. It depends on if my wife's grad school class is being paid that month or not. Okay. So you were doing a zero-based budget where your income minus expenses equals zero. It's just the timing is off. Right. Yes. Okay. Got it. Yeah. Check out that paycheck planning piece. It sounds like we've got to move some things around. And you can also, you know, depending on what your bills are, you can contact those folks and say, hey, I'm going to change it online. I want my bill to come out on the 15th instead of the first. And so start to map that out. Sit down with your wife, make it a little budget date night, and start to move these pieces around so that you have some peace and confidence when it comes to when these

expenses are coming out so that we can knock out this debt. Very cool. Thank you. My free spirit wife will love the budget date night. Yes. Oh, she's going to be pumped. Just pour her a nice beverage. Make it special. Light a candle. Do whatever you got to do, pumped. Just pour her a nice beverage, make it special,

light a candle, do whatever you got to do, man. But it's so worth it when you get on the same page. I was going to suggest the bottomless salad at Olive Garden. Ooh, but not while

we're getting paying off debt, Ken. We're not going to see the inside of a restaurant. Oh, I... We'll do that at home. Sorry, I retract my statement. State. Welcome back to The Ramsey Show. I'm George Camel, joined by my colleague, Ken Coleman. Guys, have you ever noticed when you commit to change in one area of your life, it's easier to

make progress in other areas? We notice that with debt-free screams all the time here on this stage. And we've met thousands of people on their journey to building wealth who accomplished other amazing things along the way, like losing 50 pounds, finding careers they love, overcoming stress and anxiety. And what's interesting is that what seems impossible becomes possible when you have a smart plan and when you turn up the focus and intensity on your goals. And that's why we're bringing our event, Smart Conference, to Dallas, Texas on Saturday, October 22nd. Smart Conference is the one-day event where we help you build momentum in all areas of your life. Whether you just lost your job, the credit card bills are eating up your paychecks, or you're feeling all alone in this crazy world, we got you. Ramsey Personalities, Rachel Cruz,

Dr. John Deloney, Ken Coleman, Dave Ramsey, and myself will be on stage giving you a smart plan for your money, your relationships, personal growth, and career. So join us live in person October 22nd. Get your passes before they sell out. This is my favorite event we do all year long. Go to ramsaysolutions.com slash events to reserve your seats today. Taylor kicks us off right now in Kansas City. Kansas City, we're going there. Taylor, how's it going? Pretty good, man. How are you?

We're doing great. What's going on? So I just started looking at the plans here for the seven baby steps. Cool. Is this new to you? My question was, yes, it is. Welcome to the club, my friend. Thank you.

So my question is, do I keep paying the minimum monthly payments on everything, or do I stop those minimum monthly payments to save the $1,000 and then pay off from smallest to largest? Great question. We definitely want you to make those minimum payments and save up $1,000 really quickly. We don't want you to get behind on payments. We don't want you to default and these to go in collections and create even more of a mess. So how much debt do you have? $14,981. Okay, let's call it 15K. What's your income?

$16 an hour. So right around 32. What are you doing for work? Currently working at a plastics company. Plastics. Okay. And how old are you? 29. Okay. Well, I'm going to let Ken speak into how we get this income up because this is going to speed up the process through the baby steps. We talk about how your income is your greatest wealth building tool and we need to increase the shovel to get through this faster. Because right now, 15K, making 16 an hour, it's going to take you a while to pay off debt, isn't it? Yeah, that's correct.

Are you working 40 hours a week? Yes. Right now, a little bit more, about 50. Okay, cool. Now, what kind of debts are we talking? $9,000 on a car, $3,000 on credit cards, and then just miscellaneous $100, $200 debts here and there. Okay. And have you been living paycheck to paycheck and kind of living on the credit card as your emergency fund? The credit cards were actually back from when I was in the military and never got around to paying those off. Okay. So you're able to pay all of your bills without going further into debt right now? Correct.

Awesome. Well, that's step number one. We've got to stop the bleeding, stop going into debt, and just take it off the table and go, we're going to find another way. So next up, you have no money in the bank currently?

Correct. Okay. So the question is, how quickly can we save $1,000? The average person that follows this plan with gazelle intensity does it in under 30 days. And that means side jobs, we're selling stuff, we're pausing all investing, we are changing our tax withholdings if we're getting refunds, we're doing everything we can to find the proverbial change in the couch cushions. So based on all of that, how much money can, how fast will it take to save up that thousand dollars for you?

Well, if I start working the allot over time, probably three weeks. Three weeks. I love it. So we're going to make minimum payments on all of those debts for three weeks while we get a thousand,000. Then all the margin we were using to create the $1,000 is going to be applied to those debts. And we're laying them out smallest to largest, ignoring the interest rate, and we're attacking the smallest one with a vengeance until it's gone. And that frees up a payment, doesn't it? Yes. Exactly. I'm guessing towards the next smallest debt with the extra money you are already saving for the $1,000. You're getting this.

So, Ken, how can we get our friend Taylor his income up? Well, Taylor, what do you want to do long term? Are you already on that path? Yes. Once I get this paid off, I wanted to actually start going to college. It's a bit of a strange business, but people would pay me to break into their businesses to make sure no one else can break into their businesses.

You mean like physically break in? Physically, electronically, anything allowed in the contract. Okay, interesting. Why do you have to go to college for that? It looks good to have degrees and things like that is what I'm told. Anybody I'm trying to get a contract out to. Not true. No?

Nope. If you're talking about cybersecurity as one option, right, or you're talking about electronically, digitally, kind of creating security for businesses. And then if we're talking like physical security, like they can't break in this door because we've got this, whatever, the customer that you will get for that won't care at all if you have a degree. The customer will care about your credibility only. And that's the language you use, the ability to go, okay, here's my assessment process.

Here's what I do. I come in and I do this, okay, here's my assessment process. Here's what I do. I come in and I do this, this, and this electronically or digitally. And that will let me know where you've got some holes. And then I come over here and the way that you explain it, you've got a mental, a real brochure, if you will, that you can explain your services clearly, succinctly, and credibly. Then they're going to go, man, I feel like I need that. They don't care if you have a degree. If this is the business that you want to do, this is service-based, has nothing to do with the degree at all. And listen, I'm trying to

save you time and money. I'm not saying it's a bad idea to go to college. I'm saying if that was your purpose in getting a degree, brother, I could save you years and tens of thousands of dollars. I'd start doing that on the side right now. Okay. Or working for somebody who does that right now. And that's where you're going to get the real life experience. That's going to lead to the credibility. And oh, by the way, you'll get some connections. So that's me addressing your long-term direction. As it relates to you making more money right now, I reported on this on the Ken Coleman Show two days ago. We saw in the July jobs report, we just saw August come out and haven't had a chance to analyze it. But in the July jobs report, there was one stark piece of

data, George, and it was that we are seeing more people in America than ever before take part-time jobs for non-economic reasons. Now, what they mean by that is they didn't have to take the part-time job to actually make ends meet. They're doing it maybe to get out of debt. Maybe they're doing it to save up for a wedding or what, you know, who knows what. And so in this case, Taylor, we have got so many part-time jobs that are available and in making 18 20 22 dollars an hour doing something that has nothing to do with your long-term professional direction is okay in this moment because of what George has just shared with you and you're brand new to the baby steps and this increase in income can

increase your speed through the baby steps so I would say let's go get anything that we can that's paying more than $16 an hour, and that helps. As it relates to your long-term direction, save yourself time and tens of thousands of dollars by not pursuing a degree that you don't need. So it sounds like your heart is not in plastics. And so where can we go and make more than $16 an hour right now to pay off debt quickly? And most people following this plan, they pay off debt 18 to 24 months. A warehouse. There you go.

An Amazon warehouse is going to pay you $20 to $22 an hour. And they're always looking for people because they have high turnover, which is okay for you because you're not going to be there long term. That's one example. So Taylor, we want to help you out and do you a solid here. I'm going to gift you out and do you a solid here. I'm going to gift you one year of Financial Peace University. That's got nine lessons that's going to change the way you handle money. And with that, I'll give you every dollar premium, our budgeting tool to help

you make a plan for every single one of those dollars coming in. I hope that encourages you along this journey. I'm so glad you found us, man. I love when we have a new listener who goes, I just found you guys and I'm ready to pay off debt. We need a new listener gift. I like that. A little welcome basket, if you will. Yeah. Maybe from Paycheck to Purpose. Let's throw that in there, Austin. There it is, George. Financial Peace University.

Every dollar premium from Paycheck to Purpose. And that's not all, folks. Thank you, George. There you go. My kids need shoes. But wait, there's more. Is there more? No, that's it for now. Oh, okay. I don't know what else to give the guy. The kid in caboodles right there. We've got all kinds of things. Total money makeover.

Let's throw that in there. We love giving away Dave's stuff. Austin's sick of me. There we go. We're pulling for you, Taylor. Call us back when you're debt free. We'd love to celebrate with you, man. This is The Ramsey Show. We'll see you next time. I'm George Campbell, joined by Ken Coleman this hour.

This is The Ramsey Show. Open phones at 888-825-5225. We are here to help you take the next step with your life, with your money, with your career. So many people are at a crossroads right now, wondering how they can increase their income, wondering how they can leave a toxic boss, how to get out of debt. Oh, I can tell them, George. We want to help you. Ken is here for you in that regard, and I'll help answer those money questions. Michael joins us in Phoenix. Michael, welcome to the show. Hi. As I said, my name is Michael.

I'm looking to buy my first home, but I'm having some trouble with the 15-year versus the 30-year fixed. I know you guys say to put 15-year fixed. I feel comfortable with putting a down payment, but just want some guidance on how to be able to afford my first home. Sure. So give us some numbers here. What's your income?

So total monthly income after tax is around $9,000 a month. Awesome. On average. Great. Currently have, separate from my emergency savings, have $80,000 cash set aside for a purchase. But when I use the Ramsey calculator, it really only tells me that I can buy a home for around $317,000, which in my area affords you a dumpster on the side of the road. So I just want

some ideas on what I can do, whether I should just wait or whether I should just buy a different type of property. Are you single? I'm single, yeah. And you're looking at single-family homes, condos, townhomes? What are we talking? I want a single-family home. Nothing too crazy, but trying to stay away from the condo or townhome. And why is that? Well, I understand that they're harder to resell in a scenario where the market is down. False. False. George is a townhouse expert. You just told me the Phoenix area is really hot, right? Yes, it is.

So you're telling me townhomes just aren't selling, single-family homes are the only ones that are selling? I would say they're not selling, or they are selling now, but it is an area where the market does take a dip, but I'm not saying that it is going to. But even, honestly, even townhomes are looking at $350,000 plus, and they just have such high HOA fees. Have you looked into what those fees are?

Yeah, I mean, you're looking at anywhere from $400 to $500 a month. I don't buy that. You're telling me all over the Phoenix area. $400 to $500 a quarter, yeah, yeah. A quarter. Okay, well, that changes the game. So we're talking $125 a month. Correct.

That's very reasonable. It certainly could be. So, I mean, truthfully, I think you have your sights set high. There's two options here. I'll lay them out for you. You're not stuck. Either we delay the purchase and we save up more cash. So let's say you have $120 down and you wait another year.

Then we can maybe get into a single-family home on the low end. Or we can get into a townhome more quickly with the money we have. And we stay there for three, four years. Maybe we'll pay that off and then use all of that towards a single-family home a few years down the line. This is not forever. What's causing the itch, Michael? You know, we've got to wait for what we want sometimes,

and there's something that's causing this itch. What is it? I mean, I would say lots of colleagues are buying those second homes and second properties. So I know's a chasing what you want but I feel like the income is enough to support it it's just an idea on how much longer I should wait what if you lived in a vacuum and you couldn't see what anyone else around you was doing would that change things I would say so yes all right boom we just unfollowed a bunch of people on Instagram and we avoided a lot of water cooler conversations. Yeah. You got to choose what's best for you.

And, and George is absolutely right. Let's just look at this from a, uh, maybe a different viewpoint. Where do you want your life to be? Or what do you want your life to look like 25, 30 years down the line? and you don't have to answer that but but you can begin to visualize that and when you start to think about the end the destination where you ultimately want to be and what you want life to look like then it's a lot easier to uh get past the distractions of well i'm comparing my now to somebody else's now, when really this isn't about the now, it's about the long-term future. Am I right?

I would agree, yeah. I think it's perspective, my man. And listen, I'm preaching to the choir here, okay? You know, I've always been a guy that wants, you know, I want to make progress as fast as absolutely possible. But, you know, progress is, you know, progress is incremental at many times. And then wham, after many years of incremental progress, then we have this unbelievable payoff. And I think I can hear it in your voice. It's a hope

that you're encouraged. I'm not picking on you. I hope that you're encouraged that you got to be focusing on your long-term vision and what must be true for that to happen. Thanks so much for the call, man. Remember this, we don't know your friend's situation. They could be broke up to their eyeballs, losing sleep. There's a good chance they are. George, tell folks what the average car payment in America is. $733. That means a lot of people have even higher car payments to get to that average. And your friends that are buying a second house may be watching shysters on Instagram telling them to leverage themselves up to their eyeballs. A lot of shysters out there. You like

that word? That's such a great word. It's a great word to say. Stay the course, man. Don't worry. Run your own race. And I've said this before, Ken, I'll probably butcher it. But the problem with running other people's race is that there is no finish line. It's never enough. I've got to write that down. It's never enough. Say it again, George. The problem with running other people's race is that there is no finish line. And that's what we see time and time again comparing your life.

Because back in the day, Ken, you didn't know what your coworkers, where they lived and what their life was like and where they vacationed. And now it's in the palm of your hand 24-7. And you didn't know what your coworkers, where they lived and what their life was like and where they vacationed. And now it's in the palm of your hand 24-7. And there's a growing movement, a little bit of a pivot. George, there's a growing pivot all over the Internet and in social media where people want to know what each other makes. And they think this is great. Oh, we need transparency. Let me tell you something.

That's going to turn into this big, giant comparison cesspool, and people don't understand that. And the very people that you think you want to help by telling them what you make, they're going to end up resenting you. It's nonsense. Comparison never, ever, ever pays off. I'm going to throw a Rachel Cruz quote at you. Uh-oh, here we go. Comparisons are

the thief of joy. It's true. I'm taking joy. And if that means putting the comparisons down and doing it my way, even if it's slower, even if it means I don't have a house and they do right now. Here you go. If you're going to compare yourself to somebody, there's only one person you should compare yourself to. The you of yesterday. Oh, there's another tweet. We're dropping some gems. We're like Socrates over here. Well, I don't think we are. Okay, fair point.

Yeah. Aristotle? Give me something, Ken. No, we're two guys in black t-shirts. Yeah, that's a fair point. Thanks for bringing us back down. Both of those things are true, by the way. But it's a great point.

But here's the deal. If I'm going to compare myself to anybody, it's like yesterday. In my personal life, my professional life, my financial life, my spiritual life, my physical life, whatever. That's okay. But looking at everybody else as the measure of who I want to be or where I want to go is just deadly. It'll crush your spirit. It will create resentment and it will ultimately turn into discouragement.

That's why a lot of people fall off the path whether trying to get out of out of debt trying to lose weight trying to get in a healthy relationship is is they start comparing their progress to everybody else and then when you're always measuring it and everything's moving all the time of course you're going to become frustrated and then you can only take so much frustration before you just go ah forget it. Well, it's one of the reasons we see broke people driving nicer cars than millionaires. Oh, yeah. We've got this thing all twisted.

Oh, yeah. Millionaires are going, well, why would I put all my money into appreciating asset buying new cars? I'm going to drive an older car that gets me from A to B because I don't care what people think. Yeah. Woo. I'm seeing a theme here today, Ken.

What is it? Not caring what other people think is a superpower yeah and the sooner we can get there and add in some common sense and add in some discipline then we've got something on our hands here yeah you know it's interesting you say that because when you said that it's like we all fight that as humans you know why because we want to belong like humans want to belong to a tribe to to a group. We want to feel accepted. I think what has to happen is we've got to change the group of people we want to belong

to. If we want to belong to Baby Steps millionaires and people that have financial peace, let's start hanging out with those people. Change who you hang around with. That's it. That'll help. Man, good stuff there. That puts this hour of the Ramsey Show in the books. My thanks to my stellar co-host Ken Coleman, all the folks in the booth, the bro booth, as we now call them.

Austin, Ben, James, Zach, Andrew, Kyle, they're all in there. Affectionately, the bro booth. Yes. Fine, and David, too. He's upset with me now. And, of course, you, America. We can't do the show without you. We love you guys.

Appreciate you listening in. We'll be back with you before you know it. Hey, folks, Ken Coleman here. Did you know The Ramsey Show is one of the most popular podcasts in the world? Get your daily dose of advice on life and money. Check out all of our shows from The Ramsey Network wherever you listen to podcasts.