The Ramsey Show - App - How Much Is Enough for a Full Emergency Fund? (Hour 3)

Episode Date: July 19, 2022

Dave Ramsey & Dr. John Delony discuss: How much is enough for a full emergency fund, The best way to save for an engagement, Knowing when to cash out money from mutual funds, When to focus on Baby Step 3b. 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

I'm out. Live from the headquarters of Ramsey Solutions, 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. We help people build wealth, do work that they love, and create amazing relationships. Dr. John Deloney, Ramsey personality, number one best-selling author of the book Own Your Past, Change Your Future, and host of the Dr. John Deloney Show, is my co-host today. Open phones at 888-825-5225. Brittany's in Chicago. Hi, Brittany. in chicago hi britney how are you hi how are you better than i deserve what's up um so my question is actually about anxiety um i just finished baby step three and i'm scared to move on to baby step four through six

specifically baby step six um i'm a single mother of two and i'm just scared that i don't have enough saved and i'm worried about putting money where i can't easily access it um so i'm just wondering if you have any advice on getting past this fear have you had seasons of insecurity in your past? Yes. You're a single mom. How long have you been a single mom? I was trying to be facetious.

I didn't ask that too seriously. Yes. You've been through it before, right? Yes. Did you grow up struggling? Absolutely. I'm the daughter of a single mother as well. Okay.

So think of it this way. You ever been going somewhere on your GPS on your phone and somebody puts a pin in it for you to tell you where to go? Your body has put a pin in not having enough. And it is constantly trying to solve for not having enough. And it will continue to move the finish line on you. That's why it's real important when we're doing the baby steps is that we don't go by feelings. We go by the data.

Okay. You got six months. What do you do for a living? I work for a nonprofit. Okay. How long have you been there? Yeah. There specifically not too long, about a month.

If you lost that job, how quick could you find a job um 30 seconds five minutes exactly 10 minutes 15 minutes right so here's the deal the data tells us that within six months you'd be fine within one month you'd be fine your bills would be covered you got six months to sit on right and so we're going to lean into and here's the thing about anxiety is it we want to run from it and then it spins faster on us so here's what i want you to do i want you to turn and face it and walk right in the middle of it i want you to lean into the next step on this plan you're going to four five and six here six here, lean into it. Go right towards it. Because here's what we're going to do. We're going to teach our body that at one time, there

wasn't enough. Now there is. And when your body realizes you're driving, you're in control, you're running the show, and you've got the, you're not just flexing. You're not just like, you're not just some moron college kid, right? You got six months in the bank you're got a great job you've got consistency you've got fill in the blank it goes oh okay cool she's driving we don't have to sound the alarms anymore now we're good see what i'm saying and it's going to take a process you're gonna have to learn this over a couple of years i'm good right you're gonna ask yourself when that alarm kicks off uh what are you trying to teach me uh we're good we got this one and you're going to ask yourself when that alarm kicks off uh what are you trying to teach me uh we're good we got this one and you're gonna go okay good so Brittany um there's a guy

named Mike Todd that has a wonderful quote he says um I've never been poor I've only been broke poor is a state of mind and when you get the tapes running in your head either from your childhood or from this time you've had starving to death as a single mom struggling or both when the tapes run in your head you can get stuck in a mental cycle that says there's never going to be enough i'm always going to be short and it's kind of this dark cloud hanging over you and so it's kind of a thing it's a mental exercise to uh to change your uh perspective from one of oh god what's going to happen next to oh god what's going to happen next you know what good thing you know it's it's an abundance thing but that's just a decision to do that and to start practicing it is what John's talking about there.

And then that will set you free. So you've probably had the experience. I know I have where I'm all spun up about something. And then I actually get to looking at the detail and I go, oh, don't sweat the small stuff. And by the way, this is small stuff and so uh and then you because you kind of pan back or you dive in one of the two and you see that it's going to be okay and there's this kind of thing happens like um you know the time your kid got lost in the grocery store it's happened to every one of us, right?

Right. And for a minute, they're already trafficked, and they're in the Middle East somewhere in your mind, right? And your brain goes completely bonkers until they turn the corner holding the stock clerk's hand with this stupid grin on their face, and you go, oh, okay okay you were just stuck in the green beans i got it okay holding the lollipop yeah and um yeah now we're all okay right but there was a moment there that you were spun up way beyond the actual situation fearing the worst

and that's human nature and that's exactly what you're doing with this does that make sense yes absolutely so here's the hard, hard thing about anxiety. It's a choice moving forward. And what do I mean by choice? That means I'm going to work on getting some sleep at night so that my body is at its tip top shape. I'm going to eat right. I'm going to move my body. I'm going to have relationships with people. I'm going to do the things that are going to give my body's alarm systems. They're going to be all tuned up. And I'm going to choose to, like Dave said,

my identity is no longer I'm poor. My identity is I'm enough and I have busted it to get a six month emergency fund. Now I'm going to start saving for house. Now we're going to start planning for college. Now I'm going to start doing retirement retirement i'm gonna start set planting seeds for my baby

steps from millionaire in the making now we're off to the races because that's who i am so we're going to create an identity we're going to work backwards from there you got it you are incredible you know what the beautiful part about this whole thing is uh you actually could you recognized it was there and my dad used to say that to me when i was growing up he said he would say okay uh recognizing a problem is 90 of solving it and the rest of it's just execution now you gotta go do it yeah yeah he also said that about work he said i identified that the basement need to be clean so i've done most of the work now you go do the work that's right i think that was a trick of course it was i worked really hard identifying it and uh thinking of it's half the work and i've already done half the work so you

go do the other half yes this is yes so um yeah that that's uh but that's the thing we all have this stuff and that's why we always say around here, personal finance is 80% behavior. Because if I can get this guy in the mirror, this gal in your mirror to believe again and behave in such a way that we're going to win, then guess what we end up doing? Winning. There's a self-fulfilling prophecy that's tied into every bit of this. And it's a poverty mentality, a scarcity mentality versus a wealthy person's mentality, an abundance mentality. And it is a series of thoughts and training that causes your brain and your body to do these things. This is The Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids.

Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance, and the other doesn't. Big difference. If one of the parents die and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk

relentlessly about getting term life insurance. Just go to zanderinsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Well, right now you're hearing a lot of talking heads about fear in the real estate market and that the housing market is going to crash. Still coming down, Dave. 2008, it's all coming down. It's all coming down. The robots are taking over.

But you're not hearing the truth. As a matter of fact, you can't make decisions. John talks about this all the time. When you're in the middle of fear, facts are your friends. You need facts. And here they are. In 2008, there was a huge supply of homes as a matter of fact 3.8 million homes on the market in 2008

you know how's they're on the market today 800 000 one-fourth the inventory now one-fourth oh and new housing starts in 2006-7 2 million today 1.3 million so we don't and new housing starts in 2006, 2007, $2 million. Today, $1.3 million. So we don't have new housing supply. We don't have used housing supply. And guess what? We've got twice as many buyers. Twice the demand for less than half the supply. We're not going to have a housing crash.

Now, prices are going to slow down. This ridiculous increase is going to stop. And maybe the auction that we've been having where every house goes on the market in 85, offers come in is not going to happen. But it's going to slow down. We are heading into a light recession or something very close to one or something like that. We're actually in the third quarter now. So we'll just know whether Q2 was a recession

or not soon. But if it is a recession, it's not going to be much of one. I thought it was going to be, and now they're saying maybe it isn't. So we'll see when the numbers come out in a week or so. But bottom line is the market slowed down, but it is not crashing. You do need, if you're a buyer, a good real estate agent in your corner that knows what they're doing. And you do need a good real estate agent in your corner that knows what they're doing and you do need a good real

estate agent in your corner that knows what they're doing if you're a seller because they're going to explain to you your house is not going to sell in one minute or 17 minutes it's going to sell in 90 to 120 days which is when houses have sold most of history just only this recent weirdness that we've been in could you put your house up for sale and get much more than it was worth for it and get multiple offers for that you and i have a friend that's what they wait 36 hours and they freaked out and dropped the price way down for them to buy a house crazy what are you doing crazy after 36 hours you hadn't sold hadn't sold drop the price drop the price so you sellers have to have somebody talk you out of your tree, right? Yes. Because you're up in the tree chasing a cat. So you need a good real estate agent in your corner. Ramsey Trusted Agents are ELPs, endorsed local providers.

They're incredible. They're high-octane, high-protein agents with proven track records. They can help you navigate this market. And you should have somebody like that in your corner. So go to RamseySolutions.com slash agent. Get a good, high-end real estate, high-quality real estate agent in your corner so go to ramsey solutions.com slash agent get a good high-end real estate high quality real estate agent in your corner to buy or sell right now and it is a good time right now to do either uh you know a year ago it was a bad time to be a buyer but now it's

actually a pretty good time to be a buyer a year ago it was a great time to be a seller now it's just a good time to be a seller so good time to be a buyer good time to be a seller it's a weird market because you usually have to say one of the others kind of got the advantage right now that's fairly even playing field in most markets now some of these markets are still heated up uh they're still white hot and some of these markets are slowing down dramatically because they got other stuff other than just national things going on. Some of the folks around the oil fields in Texas, they ain't working. Yep.

Pretty slow. And it's hurting those markets. Yeah. Hurting those markets. But that's a local economic thing. That's not affecting Kansas City. Yeah, but they take those local stories and they dump them in the national news and put big red ticker tape around them and say, breaking news, and you think your market's falling apart. Yeah, but they take those local stories and they dump them in the national news and put big red ticker tape around them and say,

breaking news, and you think your market's falling apart. Yeah, and it's not. No. And I think, Dave, it's so important, whether it's real estate, whether it's I've been working with Dr. Norton, Lane Norton is a brilliant guy. You met him there in Orlando. Gave me a shirt that said, data is greater than

feelings. He's working with me on some weightlifting stuff and some nutrition stuff. I wanted to feel like this. And he's like, dude, you got to just follow the program. Just follow the data. Yeah, but I feel like, just follow. And dude, it's working.

And in the same conversation we have with people about their money, I feel like it. Just follow the program. Same with renting a house. Whenever you get emotional about something, slow down and follow the data follow the facts man and if you don't have them get somebody who's wise in your corner and you're always going to make better decisions when you're looking at real numbers it's just amazing how we don't do that matt is in new york city hey matt welcome to the. Hey, guys, thanks for taking my call. How are you?

Better than we deserve, brother. What's up? Nothing much. So I'm just trying to figure out. I have about $5,000 to my name right now. Good for you. That's in a checking account. I currently do not have a savings account,

but I'm looking to take portions of my salary and my paycheck from my job, you know, and put that away to start saving up money because I'm looking to get engaged in about two years and then eventually get married and move down south to Florida. So I'm looking to- Have you found her yet? Yes, I have. Why would it take two years? What are you doing, yet? Yes, I have. Why would it take two years?

What are you doing, man? Two years? I'm only 22, but just looking to stay here. Have you got a job? Yes, I do. How old is she? She's 22 as well. You're a private investigator?

Yes, sir. So where was the rule that said you can't get married before 24? I'm from Tennessee. Yeah, I mean, that's all I, you know, I was raised with, you know, with my father and my parents. I was raised to always ask, you know, ask your father for her hand in marriage and whatnot. That don't take two years. I know.

Well, her parents are a bit strict. She's 22. Who cares what her parents are? They don't get a vote, dude. Right, exactly. That's exactly what I said to her. So I think you go talk to her dad and go ahead and get married. That's my opinion.

But what am I – I don't think you need to wait two years. It's just unhealthy. I think you need to – you know, if this is the right thing, let's go ahead and go forward. If it's not, then get off the ladder but um you know if if she is not mature enough at 22 years old to live on her own as a woman then you got other issues right but if you and if you aren't but that that's a different thing but that's uh no there's no rule anyway so all of that to say uh five thousand dollars to get engaged is great i think that's a good start we got a little

bit of a beginner emergency fund you have any debt you need to clean up uh no debt at all does she no nope wow you guys are y'all are in great shape then so she has a job you have a job you have five thousand dollars correct okay and so uh i you, is there something in your life that makes you a bad guy that her dad should say, no, you can't marry her? Not at all. I mean, her dad treats me like his own son. You know, both of her parents, both her mom and her dad. Do you wear sleeves most of the time or do you cut them off dad. Do you wear sleeves most of the time, or do you cut them off? No, I wear sleeves most of the time.

All right, that's good. I'm just saying, if a guy comes to my house to marry my daughter, Josephine, and he's got the sleeves off his shirt. Who cuts leaves off a shirt? That's what I'm asking him. Is he one of those guys? I didn't even know what you were talking about. He got it.

He knew. Oh, my God. Do you have a mustache? Absolutely not. Slightly. Slightly. That's the problem, dude. You've got to shave.

I'm just kidding. I'm messing with you. I'm messing with you. Okay, so if the roles were reversed and this was your daughter and this guy that looks and acts like you came and asked for her hand, would you grant it? I mean, I don't know. Why wouldn't you?

No, why wouldn't you? If you were her dad, and some guy comes, it's your daughter someday. This role is going to happen to you. Right. And he comes, is he going to, would you be happy to put her hand in this young man's hand i would but there would be there would be some um you know i mean i feel like her i feel like her dad wants me to have a um have a steady you know have a steady job where I'm making, I don't know, a decent amount of money. Because right now, with the private investigation work, I'm making about $18.50 an hour.

So, go get a better job. Yeah. Do both. Do that on the side. And then go get the girl. Don't wait two years. That's a couple old men talking right there. Make it happen, Matt.

This is the Ramsey personality, is my co-host today. Open phones at 888-825-5225. Scott is with us. Scott is in Winston-Salem, North Carolina with Hope City Church. The church is debt-free, we hear. Scott, tell us about this. Hey. Hey, Dave.

Thanks for having us, man. This is awesome. We're all excited. But, yeah, the church is debt-free. We saw some light at the end of the tunnel, and we cast some vision for it. We pushed it. We got everybody on board, and, like, the church, God, did some amazing things. So, yeah, we're debt-free and can be generous as we possibly can be.

Yeah, it's a whole lot easier to help people in the community when you don't have payments to the bank. That's awesome, man. Congratulations. So are you the pastor, Scott? Yeah, yeah. Lead pastor. Started the church in 2011.

Wonderful. Very cool. Okay, so tell us what happened here. How much debt was there, and where did the vision come from to clear it, and how did you all do it? So in 2016, we purchased some land. We built a $4 million facility, and it's a beautiful place. We're here. About two years ago, we saw this thing getting down to right at $2

million. You know, COVID is happening around there, but we're like, you know what? I think right now is the time to get out of debt. We cast the vision to our staff. Our staff was unified in it. Our leadership team was unified in it. And the church jumped on board. And as soon as we started casting the vision to get out of debt, to pay off this last $2 million, Dave, I can't tell you, like, we had someone give us a million-dollar gift. Whoa! We had another person give us a $225,000 gift. We had some excess land that we weren't ever probably going to use.

We sold that off for another $205,000. So this thing really started to snowball. And then, like, you know, casting the vision to people who don't even come to our church. I had friends who I played some golf with. They would just give us, you know, a gift here and there. And it all just added up until right after Easter this year. That was our final push. And we only had to pay off like three hundred and fourteen thousand dollars and when you're talking four million to three hundred fourteen thousand that seems like just really nothing and we wiped out that remaining three hundred fourteen thousand and now we're debt free so it's been an amazing ride over the last year or so wow well the fear

around covid for churches like for businesses and for individuals, was that the income was going to shut down. And a lot of churches that we've worked with have told us that their income actually went up during COVID. Did you all experience that? Yeah, we did, Dave. You know, we had a couple of options that we could have gone into sort of a recluse mode, or we could have taken a couple other options that really would have taken the focus off of who our provider is, and we just, we didn't go that direction. We said generosity is one of our core values. It doesn't matter what kind of season we're in, we've got to continue to be generous, and God just provided and he's

been faithful and you know it's something you've heard all over it's nothing new but you cannot out give god and and we keep trying to do it but we keep failing at it and so we're just going to continue to roll in that direction amen brother amen that is wonderful well as as you know the leader and founder of that organization, you probably experienced the same thing I did. Before giving went up, we were in the middle of this quarantine and this shutdown, and you had to look at this and go, man, if we didn't have this debt, we'd be in a whole different place.

And so this is my wake-up call. That had to be part of this formula. Yeah, it definitely was. Really, you know, not knowing what tomorrow holds, you know, not having to pay the bank. Our note was roughly $14,000 a month, and we're not a megachurch. You know, we have about 600 people that worship with us on a Sunday morning. So, you know, one wrong move, one wrong statement, it just could go south quick. So we were just like, let's get this thing out of debt.

Let's put this $14,000 into the community to continue to truly make an impact in this community for the Lord. And that's just what we're doing. That's powerful. Yeah, that's $14,000 worth of help you can be to people around there that was just going to a stupid bank. That's so wonderful. I'm so proud of y'all. Well done, Pastor. Very well done.

And, Scott, I wrote this down. The antidote to fear is generosity. What if when we all got scared and nervous and anxious, we immediately didn't run to the mirror and say, what about me? What about me? But we looked around and said, who could we serve right now? I wonder what our culture would look like if we were generosity focused. We got scared instead of inward focus.

Good for you, man. What an example. Thank you. Well, I predict a spike in growth at your church following this. I think your people are going to be bolder, more courageous. You probably will be in the pulpit. Not that you were wimpy before. Yeah, you can do all the sermons now that you've been wanting to say.

But, you know, it does change. It changes a business person, the way we run our business. We're more bold. We've got a little more flex that we didn't have when we don't have the bank hanging around our neck, and it affects the pulpit. The other thing that you'll end up doing is you'll end up infecting these families with this debt-free disease, and they will go on and prosper inside of your congregation. And so you can't help but do it.

You can't stop it from happening because of what you've done. I'm so proud of y'all. This is such a wonderful statement and what you've done congratulations very well done any advice for pastors out there of thousand member and under congregations that are sitting on uh seven figures of debt they're sitting on a couple million dollars in debt any advice for them yeah i think you really have to go first you have have to be the leader. You know, you've heard some of the gurus out there in leadership talks. They say good leaders go first, great leaders come back and take others with them. I think this is huge for us because we can tell people that, hey, we've done this. If we've done it, we will show you how you and your family can do it as well. And so it's just, it really gives us cred, you know, credibility that we want this for you because there is a feeling, you know, I know it's not all about feelings, but there is a freedom that you feel in your heart, your soul, and your mind when you drive into

this place every day and knowing that it's paid off. With your homeowners, you say the grass is always greener now that it's paid off. You know, with your homeowners, you say the grass is always greener now that it's paid off. I remember the first day, Monday morning, coming back to this place after we had paid it off. Man, the parking lot was cleaner. The building was brighter. I mean, I'm not kidding. It was free. And every family, not only here at our church, pastors, whatever,

I want them to be able to experience that because we weren't made to be just held down and in bondage. Yeah. Beautiful. Well done, pastor. So proud of you guys. So, uh, I understand we got a video of you, a whole, of your whole church congregation doing a debt-free scream, right? Yes, sir. Yes, sir. All right. Well, we will cue that up. And, again, as we cue that up, congratulations. Our love to you and all of your team. And our congratulations to you. We're very, very proud of you.

All right. Fire that up, guys, in the booth. Ready? Three, two, one. We're dead free! We're dead free! Yeah! That's how it's done boys and girls

a church wide debt-free scream i love it very well done yeah i love the idea of the bride of christ not being in chains for real man and i love the idea of that $14,000 a month. Now they're going to look at that and say, who are we going to bless this week? Who are we going to bless this week? Some single mom needs some help. Some hungry kid needs help. The church can be about the business of the church.

Which is loving people. And you know what? I'm sorry, boys and girls, but that takes money. It does. It takes money. And that's $14,000 a month not going to some stupid bank. And if you're a stupid bank, I'm sorry. You're just a stupid bank. And if you're

a church, get out of debt, man. That's so cool. Get out of debt for your people. That is so beautiful. Well done. That's incredible. Frees you up to be able to do and be who you is supposed to be. I love it. Well done, Pastor. This is the Ramsey Show. We'll be right back. Our scripture of the day, John 10.10,

the thief comes only to steal, kill, and destroy. I came that they may have life and have it abundantly. Diane Ackerman said, I don't want to get to the end of my life and find that I lived just the length of it. I want to have lived the width of it as well. Ooh, that's good. I like that. Very good.

Good stuff. Joe's with us. Joe is in Chicago. Hi, Joe. How are you? Hi, I'm doing well. Ooh, that's good. I like that. Very good. Good stuff. Joe's with us. Joe is in Chicago. Hi, Joe. How are you? Hi, I'm doing well. I'm talking to you. He's a good one.

Thank you, sir. How can we help? I've got a question about what to do with a gift that's currently sitting in a mutual fund. So I'm 19 years old, and I have one year of college under my belt. And due to my generous parents, a good scholarship, and a relatively cheap school, I'm cash flowing college with my on-campus job and then saving what I make in the summer.

Good for you. What are you studying? I am taking a major in business information systems and it's a master's program as well for public accountancy. Wow, good for you. Good, good, good study. Good field. How can we help? So, uh, when I was born, my kind and generous great aunt set aside some money for me, which, uh, peaked at about $3,000, but it's since fallen to around 2,500. Now, uh, if I was given this in cash, I wouldn't invest it. Cause right now the

goal is just to pile up cash until I graduate. But when I talked to her about pulling it out, she voiced some concerns about pulling it because the market's down. And I was trying to balance pulling it out, which I think would be a good idea. Why do you think that would be a good idea? You don't need the money today. No, I don't. But if I had the money in cash, I wouldn't invest it. That's a fair assumption.

I don't disagree with that. If you call me and had the money in cash in your situation, I would have you pile it up just to make sure you graduate. Sounds like you've got our answers on this show dialed in. I'm sorry? It sounds like you listen to the show and you know how we answer questions yeah i listen every day okay all your shows so i mean because you're you're you're you know i'm hearing my words so uh thank you for that i appreciate that i'm honored by that so

you're right if you called me at 19 years old you had five thousand dollars or three thousand dollars cash sitting in the middle of the table and said, I want to put it in mutual funds. I would say don't because I want you to graduate debt-free first. And you've got it mapped out where you can without using this money probably, but just in case, I would use it as an insurance policy. Okay? Okay. And so you're right. I would do that.

And that's what you're saying. In this case, the money is not in the middle of your kitchen table. It is already in the market. And your aunt is actually right. It's the wrong time to pull it. Because, you know, with the market, it went down. You know, we were technically in a bear market. Probably not technically now, but whatever.

It's down a bunch either way since the first of the year, and I don't think it's going to stay down throughout your college career, and you don't need the money today, so I probably would ride this thing back up. I kind of agree with your aunt here, which I usually wouldn't do. I admit that. I admit that, okay? I usually wouldn't do it. Or if you told me that I have to have this money to keep from borrowing money to go to school,

I would tell you to cash it out in a heartbeat. Oh, yeah, no, that's not happening. That would be in a heartbeat. I mean, I'm sorry the market's down. You just need the money. But right now you have the luxury of not having to cash it out while the market's down, and that's your aunt's point, and I tend to agree with her. All right.

Well, thank you yeah so but i i man i really appreciate that you had thought through what we were going to say yeah but my my understanding is when the market's down you cash out you're solidifying the loss and so if it goes down at some point you either got us in general in general you never sell or write it down right because you what we call lock in your losses right In general, you never sell when it's down because you, what we call, lock in your losses. Solidify is the word. You're locking them in. You're promising yourself you're going to lose.

You're not just, haven't just lost on paper. Now you really lost when you cashed it in while it's down. So if you don't have to take it out while it's down, it's the exact wrong time to take it out. But if you have to, you just have to. I mean, it's just part of that it just sucks but uh but yeah i i you know i'm gonna ride it back up and and let it get back up in that 3 000 range then i might cash it out yeah and just as a matter of safety and you might i might miss out on some upward returns that seems a little backward to say that but i'm sure that's consistent but either

way it's just what i would do and it's not a lot of money it's not going to make or break your college career probably it's not like 30 000 or 100 000 that's gone down to 75 000 we're talking three grand that's gone down to 2500 that's true we're playing with we're playing with house money too well so let me let me i have a problem with that so if i worked and earned three thousand bucks and put it in there and it drops 500 bucks i feel a psychological angst that is different than if somebody gave me three thousand bucks and it's dropped down because that's house money but i don't know that that's the right way to look at it three thousand bucks

is three thousand bucks is three thousand bucks where no matter where it came from that's right that's that's my problem've got to get over. And the only thing you don't want to do is dishonor the giver here. Correct. But it didn't sound like the aunt was being controlling. It sounded like she was just advising. Being wise, yeah. Just advising and saying, I didn't sense that from him anyway.

So interesting. Good discussion. Rich is with us. Rich is in Phoenix. Hi, Rich. How are you? Hi, Dave and John. Honored to talk to both of you.

You too. How can we help? So a quick snapshot of my situation. I'm 45 years old, and my wife and I have been married for about two years, just over two years, and we became debt-free last year. Both had a little bit of car debt coming into our marriage and we paid it off really quickly. And, um, I've got about 111,000 sitting in a retirement account and we have our emergency fund saved up. So I'm just kind of at that point where if you were in my shoes, what would you do, Dave? Uh, you mean in the baby steps or what? Yeah, I, I'm, I'm debating on jumping right into step four uh with 15 percent uh but my wife and i were talking about it that we don't want to skip over 3b and i just don't know if there's like so you're wanting to buy a house yes sir okay and uh well i mean what if you took two years to work on

baby step 3b and did not put money into retirement. Okay. And you built up a good down payment. What does that do to you versus putting 15% during that two years into there? How much will that affect your down payment? What's your household income? Just over $100,000. Okay. So it's $15,000 a year swing, $30,000 swing on how much is in your down payment.

If you put 15% away, you're going to have $30,000 less in two years, correct? Correct. In your down payment fund. Correct. Yeah. So, you know, can we get to a good down payment doing that, and would we rather have a smaller down payment and do that, or would we rather – 3B is kind of optional, how much you lean into Baby Step 4 while you're doing it we let you decide that uh we suggest you don't go

zero into baby step four for more than three years while you're doing your down payment saving but uh if you want to do partial if one of you's got a match sometimes people do that uh like one of you's got a four percent match so you put in four percent to get the match and we do a partial baby step four while we're working on our down payment in 3B. And then as soon as the down payment's done, boom, we're at 4, 5, 6, which is 15% kids, college, and house. So once you've done that. But while we're working on this down payment during this three-year state of flux,

it can be 0% to 15% going into baby step four. Your choice. There's not a wrong answer it's how how do you guys want to work this stuff how much do you want to lean into it uh but i would you're asking what i would do i would lean toward um i i i would lean in in the direction of buying a house because i don't think houses are going to go down in value. And I've spent the last several weeks being criticized for saying that. But, you know, such is life. Some of my predictions come out crystal clear correct, and some of them I was just wrong.

So this one I'm not wrong on, though. So there's way too much data on this one. This is not just a dave gut feeling there's just data so anyway yeah i'm buying a house that's what i that's what i would do if you're in this market i'm gonna save up as fast as i can and i'm gonna buy a house because i think they're gonna go up next year four or five percent and next year four or five percent and the next year four or five percent and that means 15 20 up three four years from now yeah so i would buy it you know as quick as you can get the down payment saved and do your 15 year fixed where the payments

no more than a fourth of your take-home pay good job dr john deloney austin ben zach andrew james and kelly in the booth i am dave ramsey your host we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's John Deloney, co-host of The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? A lot 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600-plus radio stations across the country. To find a station near you, go to RamseySolutions.com slash show.