The Ramsey Show - App - How Much Should I Be Investing? (Hour 3)

Episode Date: July 27, 2023

Dave Ramsey & Ken Coleman answer your questions and discuss:  "Should we sell our modular home?" "Pay off student loans or save for a house?" Check out the Ramsey Student Loan Hub for tips, tools, and the fastest way to pay off your student loans, "How much should I be investing?" "Should I go back to school to become a nurse practitioner?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/TRS Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the Paz Moving and Storage Studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Ken Coleman, Ramsey Personality, host of The Ken Coleman Show and author of the number one best-selling book, From Paycheck to Purpose, is my co-host today. As we answer your questions about your life and your money,

thanks for hanging out with us. 888-825-5225 is the number. That's 888-825-5225 is the number. That's 888-825-5225. North Dakota starts off this hour. Samuel is with us. Hey, Samuel, how are you? Hey, pretty good.

Good. How can we help? Hey, real quick, I've been married three years, and we had just bought in a modular home in our, I guess it would be second year of marriage. And modular home, mobile home, however people call it. Anyways, the lot rent keeps raising up, and we're wondering if we should just sell it or what we should do with it. And the other thing that I wanted to mention is that we're expecting our second child. And so that kind of throws it into the mess of the stuff as well. So just getting some insight as far as what I should do next.

Good for you. Cool. How old for you. Cool. How old are you? 24. What's your household income, sir? 52 for myself, and then me and my wife would be about 64. Okay, good.

All right. Well, the premise is this. There's nothing on fire. There's no emergency here. But 10 years from today, owning a mobile home that goes down in value is not a good plan. They go down in value. You know that. Yes.

Yes. Okay. Okay. And so instead, I would rather be living in something that goes up in value. You know that. Yes. Yes. Yes, we do. Okay. And so instead, I would rather be living in something that goes up in value. And so that's why mobile homes are not a good purchase. Simply, it's a car you sleep in. It goes down in value. So you've got to decide then, you know, since it's not a good long-term plan,

when is the most opportune time to move out of that and what are the steps? It might be that you sell it and it may take you a little while to clean up. You may be upside down on it. You may owe more on it than it's worth, do you? Sorry, what was the question? Do you owe more on it than it's worth? No, I do not. Okay, what was the question? Do you owe more on it than it's worth? No, I do not. Okay.

What is it worth? The next-door house is about the same layout as barn layout, and it sold for $50, and we owe about $40 on it right now. Okay. So hopefully you could get $50 and walk away with $10. That would be amazing. And then what would we do? Are you out of debt except for that? 40 on it right now. Okay. So hopefully you could get 50 and walk away with 10. That would be amazing. And then what would we do?

Are you out of debt except for that? We just have one car loan. Okay. I'd clean up the car loan. I'd build an emergency fund, and I'd rent for a year to two years while I saved up a down payment to buy my first home that is a stick built wood or whatever home that's going up in value and if it takes you from 24 to 26 to make that transition and one move that's not a bad thing your other options sit there and let this thing go down in value and you're going to look up and it's going to be worth 30 and you owe 35 and then you're going to look up, and it's going to be worth $30, and you owe $35. And then you're going to look up, and it's going to be worth $10, and you owe $25.

That's where it's headed long-term. Agreed? Agreed, yes. That's not a long-term plan. But again, this month, next month, I don't care. The next month, I don't care. Somewhere in there. When's the baby due?

In February. Okay. So if you're going to do it, you should do it immediately, or you should do it after the baby. Okay. If you could get a buyer now and move into a rental with $10,000 in your pocket, or how much do you owe in the car? $9,000.

Do you have any money in savings? Yes, I do. How car? $9,000. Do you have any money in savings? Yes, I do. How much? $7,000. Perfect. Good. Okay, so if we sell this and we put $10,000 in our pocket, that's $17,000. Pay off the car.

Now we've got $8,000 in savings and no debt, and we're renting when the baby comes. That sounds a pretty good move. Now then we start saving like crazy above our emergency fund for a down payment on a home, and that might take you a year or two years. But that's what lots of couples do. Yeah. Yeah, but what you're having to do is change direction

because you've got to get off at the next exit because you realize you're heading the wrong way on the interstate. And the first step is to get off the exit, go under, then get back on going the other way. And that's what we're doing. We're stopping and heading back, and then we'll see how long it takes us to get back up to speed. Yeah, Samuel, I don't know what's keeping you from doing this. You didn't say there was anything, but I'm telling you I would do it now. The baby on the way, I'd do it immediately, get the transition underway. One transaction takes care of all of your debt, and now you're changing your season.

You're getting a nice apartment. You're going to rent. I just love this move now. I wouldn't wait. I really wouldn't, especially since you've got a unit next to you that just sold for $50. I'd be moving on that. Yeah. You know, put this one on the market for 52 tomorrow.

And now, again, if it gets up, if it doesn't sell yet and it gets up to Christmas and it hasn't sold and she's got a baby coming in February, take it off the market. Yeah. Wait till after the baby comes. Do it this time next year. You know, do it next summer. That's fine. I'm good with that.

There's again, there's no emergency here but we need to be making steps because what happens is people put they kick the can on down the road and they put off taking the steps to move in the right direction and and that will get you absolutely burned so i've got a friend that uh is a mobile home manufacturer and uh he's like would you quit being so hard on us and i'm like well i you know i you know because they really make some very nice mobile homes now i mean it's not like it's not like but but you know i don't care if you call it a modular home or you call it a mobile home or you call it a trailer it goes down in value if you can walk up to it and perceive that it was built in a factory so you know if

the home was brought in on a truck baby you're going to have trouble okay with the thing going up in value because the marketplace doesn't that the marketplace does not treat that as a value increasing situation well i know one that sold for yeah well the reason it sold for that was the land under it went up it was sitting on five acres and the five acres went up faster than the mobile home went down and that's why they got appreciation on it so if it had a regular house sitting on it that made even more so mobile homes go down in value not a good plate Not a good thing to do. Don't buy one. Don't buy one.

And I'm not mad at you if you're in the mobile home industry, but you sell something that goes down in value. Don't buy one. Buy a house or rent until you can buy a house that goes up in value. It's the problem with the tiny house movement. We've yet to see that the things are going to appreciate. It's a novelty, a gimmick. And until it's got a proven track record of appreciating going up in value, appreciating, I'm not doing it. This is, Ramsey Personality is my co-host today. Thank you for joining us, America.

Open phones at 888-825-5225. Andrew is in New Mexico. Hey, Andrew, welcome to the Ramsey show. Hi, how are you guys? Better than we deserve. What's up? So my partner and I are looking to buy a home in the near future, and I was just wondering what the balance between, you know, how much I should be investing, how much I should put towards my student loans, and then how much I should put towards increasing the down payment on the house. Good question. Okay. Well, what we teach folks is the shortest distance between where you are and wealth

and stability with your money without a bunch of risk is first to clear debt because your most powerful wealth-building tool is your income. Then have a good solid emergency fund. Then save up a down payment for a home. And then you would start, or while you're saving up for the down payment for a home, and then you would start, or while you're saving up for the down payment for the home or after either one, one of those two, you would start saving for retirement.

So that sounds like this. Pay off the student loan first. Build an emergency fund of three to six months of expenses second. That's baby step three, we call it. Then you would go from there and either go to baby step four, which is 15% of your income, or we call saving for a home because it's a temporary step, baby step 3B. So you could stop all retirement, not start retirement,

and save aggressively for a home, or you could put some in retirement and save some towards a home, or you could put some in retirement and save some towards a home at that point. So that's how we teach to do it. And we've taught tens of millions of people to do that. And it works beautifully. It's not necessarily popular because everybody wants to go buy a house, but you need to get rid of these student loans because they're not going

anywhere until you get rid of them. And so that's your first goal is to get your life back from sally may um most people don't do that but most people are broke and most people make a lot of money and have nothing to show for it work their whole life and then hope the government which is well known for its ability to handle money will take care of them so don't do that hang on i'll send you a copy of the book, The Total Money Makeover, and I'll show you exactly how to do this process. Bridget is in Boston. Hi, Bridget, how are you?

Hi, I'm great. Thank you so much for taking my call. Sure, what's up? So I had a question about saving money versus putting more into my 403B plan through work. So I've always been, like, big into saving money, So I've always been like big into saving money. So I've always had a big savings account. I only recently started listening to your show and learning more about investing for the future. So I'm just sort of wondering, I'm sort of like behind for the

year because I was only contributing like, I don't know, 5%. And that was like my part-time job. So I only have like 2,500 that that I put into it this year, but I know now that the max is like $22,500. So I'm sort of wondering if I should be aggressive for like the rest of the year and every year moving forward to make sure I at least like max that out before I'm like piling up more savings essentially. Do you get any debt except your home? No, just a mortgage.

Okay. All right. And what's your income? Household income? My household income between my husband and me is roughly around $300,000. Way to go. Very cool. Okay.

So just like the last caller, we would tell you to have an emergency fund of three to six months of expenses. Do you have that? Yes, we have like well over that, actually. How much do you have in that account? We have right now $125, 125 000 i think it's up okay that's where you said i like being a saver yes yeah because i know that's more than we would ever need but it's way more than you would ever need so yeah what what do you owe on your home uh 400 000 perfect man wouldn't it be cool get that house paid off bridget yeah so that was sort of my dilemma because we already actually made an additional payment towards our home earlier this year um of like 50 000 and i was ready to do that again towards the

end of the year we were going to like try to just do like 100 this year because we have the money too and the savings account um but but i'm sort of like wondering if first i should max out my retirement fund contributions and like prioritize that and then and then deal with the mortgage afterwards and you can do both you can do both you've got the money yeah let's sit down you and your husband and lay out a game plan with the income you have coming in and allocate it i want you to put 15 you said you're making 300k right that's 45 000 into some kind of retirement investments this year 15 of your income into retirement okay and then everything else goes at the house and you only need three to six months of expenses set aside.

It does not cost, I mean, three to six months of expenses at your place is probably $40,000 or $50,000. Yeah, that's what I was thinking, like around $50,000. All right, let's hold $50,000 and throw the rest of it at the house today. And I want you to cash flow $45,000 out of your income into retirement by the end of the year. Okay. Yeah. My husband does get some through his work plans.

Like I'm only speaking for my, myself. I want you to work on the household. You have to work together. Okay. It's you're married. You're married. So we're going to work together.

Okay. And you're not joint. It's not a joint venture. So, I mean, if he's putting in more, you're putting in less or you're putting in So we're going to work together. Okay. And you're not joint. It's not a joint venture. So, I mean, if he's putting in more, you're putting in less or you're putting in more, he's putting in less. I don't care. But the whole thing totals up to 45 K going into retirement for the two of you. And then everything else at the house, you're going to have this house paid off in about

three more years. That's going to be wild. The only caveat to that is we've talked about having a baby at some point in the next year or two. So I don't know. Like, I still plan to work at least part-time, and I should be able to maintain, like, a good chunk of my income. But assuming we end up around, like, 50.

Let's worry about that when the stork shows up. Yeah. Yeah. Yeah. For now, let's just execute this plan. Yeah. Stork shows up, you can adjust your plan. Okay. But for right now, I really think, I mean, we're getting ready to throw 100 grand at this house,

and you only owe 400, and you make 300. So I'm telling you, you probably are out of debt in about three years, and you're not that old. How old are you all? I'm 26. He's 29. Oh, man, you're doing so good. I mean, Bridget, you're a rock star, and you're so on top of it.

You just need to take a deep breath and realize there's no way you're going to screw this up. You're so responsible, and you guys, your earning potential is going to increase. Yeah, you're making so much money, and you're going to make more. So you're doing great. This is good. Everything is good. But I'll tell you what, you're not getting good use of that money that's sitting over there doing nothing in savings.

That's why I'm going to throw it at this house. Because if you get this house paid off, it's going to unleash arithmetic into your wealth building like you won't believe what's your house worth um so we bought it um for like around it was like 605 what we paid for it but um it's worth a lot more now like that was three years ago we bought it during 2020 um so it it says it's worth more and we've actually put money into it like we've renovated um and like added score footage so is it a million or more um i i would guess around 900 would be what it would sell for if i sold it like put it on the market today that's phenomenal now so you're millionaires and you're 26 i mean i guess if you put it like that i mean just about

just you're not quite but you're just about so So you're doing a really, really good job. So let's clean that up, and then you don't have that burden of any kind when you're thinking about things. If a stork comes or doesn't come on schedule, then, hey, we're in good shape, and we can adjust the plan according if we want to, and you've got the flexibility to do that with a paid for house that's where you're headed that's where i'm going to take you to because that's going to take you to a 10 million dollar net worth in the future well done very cool you guys are amazing i'm so proud of you

good good work man you get started that age can the way the math works it just blows your mind yeah stupid it's stupid money. I mean, you said it. $10 million is not an exaggeration. No, I'm not. That's not hyperbole. No, it is not. I want people to understand that.

That's very, very doable. Wow. Great income, great market where their home is to pay off a house in a Boston market. Are you kidding me? Man, that's big time. That is big time right there. So, yeah, it's amazing. When you pay attention, and that's what they're doing.

They were paying attention before they got to us. Yeah, that's right. And they're being intentional. It changes your whole trajectory on your money. This state running around with your head stuck in the clouds in chaos doesn't work. I just bought it because I fell. Shut up. stuck in the clouds and chaos doesn't work. I just bought it because I felt it. Shut up.

Adults devise a plan and follow it. Children do what feels good. This is The Ramsey Show. Ken Coleman, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage Matt and Michelle are with us hey guys how are you we're great Dave how are you better than we deserve where do you guys live just outside Milwaukee in Wisconsin oh fun well welcome to Nashville thank you and how much debt have you paid off? $147,935. All right. Good for you.

And how long did this take? About 18 months. Good. And your range of income during that year and a half? Started at about $210,000, and now we're at $300,000. Wow. Nice jump. What do you guys do for a living?

I'm in healthcare sales. And I work in human resources. Cool. So why the big $90,000 jump? For me, it was a couple of internal promotions. And then I'm very ambitious in my career and took a couple extra jobs to get that increased income. Ah, look at you. Well done.

Well done. So what kind of debt was the $148,000? You name it, we financed it. You were normal. Pretty normal, yeah. About $80,000 of it was student loans, $50,000 in cars, and then the rest of it was anything from carpet to TVs to couches, you name it, we did it. You know, I hadn't thought about financing carpet in a long time. That used to happen a lot, though.

Yeah, I get it. Okay, cool. TVs even, yeah. Okay. Everything. Everything. Yeah, I like it. How long have you TVs even. Yeah. Okay. Everything. Everything. Yeah, I like it. How long y'all been married? Just about six years.

Okay. So a couple years into the marriage, this turns out it's not going so good on the money part. What happened? Tell me the story here. I can see it coming. Yeah. So after we got married, our communication on money was really poor. I took sole responsibility of kind of looking at our finances. And as you can see, I was pretty bad at it. You know, I obviously made a lot of poor decisions and then I would turn around and get mad about a $90 Target or Walmart charge. I know a guy like that. And then, you know, about two years ago, I woke up on a Saturday morning, beautiful day with our kids and her at home. And instead of hanging out with them, I sat in our office trying to figure out where all our money was and totaled up all of our debt.

I was kind of working the avalanche plan on our big student loan and realized I dug a much bigger hole. And so a few years before that, someone at work had told me about, how about you guys? And I never really took it seriously. And so that morning I Googled, how do you get out of that easy? And the first name I saw was yours. So I started listening, and probably three days later I called on the show, and you actually gifted me financial peace on that day.

Wow. Yeah, so right around Father's Day a couple years ago. So I was on board right away, and then I had to get on board. Okay, so he comes in and goes, we have a mess I made. Would you go to class with me? And what did you say? Yeah, it took me a minute to get on board. But once we started watching some of the videos, it was actually Rachel that kind of put me on board.

She was very relatable to me. She was a mom with young kids who admittedly liked to shop and spend and eat out. So I said, you know what? And she does. I said, you know what? It's does. I said, you know what? It's time. It's time. Let's do it.

Okay. So you guys started watching Financial Peace University together. Were you in a class or just doing it at home? Did it all at home. Okay. All right. Very cool. Absolutely.

Very cool. But you did watch through the videos together and then Game On and Every Little Detail and obviously 18 months. That's pretty quick. When you first started this this did you go 18 months in the way yeah pretty much you know there was a lot of stuff along the way that we kind of sacrificed on um you know one of the things that we did was i had one of the cars was a you know new 2020 gmc car and even though i we had already paid it off i when all the used cars went up oh yeah i actually went and traded it in backwards for 2013. And got a deal.

Got a deal. And they handed me a check, and it took forever for them to go get it. And they were so apologetic, and they're like, sorry, normally people use their equity to trade up in car. And my loud mouth said, well, normal's broke. And then it took them another hour to get your check. They looked at me. So obviously a good income. and then it took them another hour to get your check so obviously a good income so 210 going into this then you guys went into hustle zone you were

busting it uh how intense did this look and feel give us give us the play by play when you really get serious about it i think we realized it was pretty serious when I came home from a Costco trip and she realized that I turned in her name brand coffee for the cheap stuff and she wasn't pretty happy with me. Yeah, yeah, that happened. Yeah, a lot of sacrifice. You can trade your car and don't mess with my coffee. Exactly, that's what I said.

Your car, my coffee, this is a problem. Yes. But yeah, I think we just just we started to realize how much opportunity there was in our budget to start really kind of peeling back we weren't really budgeting before that and so uh we started to realize all the areas we had that we could you know pull money out of and um you know put it all towards that debt do you remember how well if there was there a month where you put the most away in one month or was this a consistent rhythm once you got this thing figured out?

I think it was, you know, obviously in sales there's some ups and downs in income, but I think, you know, this past year there was a significant bonus that came through that was a, man, I think it was like a $12,000 payment or something like that. So, you know, fortunate for that for sure. Yeah, that's awesome. And before it would have just disappeared. Now it went to the game plan. Yeah, that was one of the things that, to me as i was going through i had some notes

on my phone just to make sure i stayed the course and one of the things that i had typed down was every dollar is a dollar and what i meant by that was just you know these 50 dollar payments start to become 100 dollar payments and then you know it kind of adds up as you go yep yep it does it does so between the two of you now you've really done it. I mean, you're not theory. You actually paid off $148,000 in 18 months. So people that are out there just thinking about this for the first time, they may be facing that fear you were facing on that Saturday morning,

like, oh, crap, I've made a mess here. What is the secret to getting out of debt? The two of you have done it. I think communication. We started talking a lot more about, you know, what are upcoming expenses for the month? You know, we've got three little kids and a lot of expense comes along with that. So what's coming up in the next month and not just those random, you know, $50, $100 payments at Target or whatnot. So the communication and just the actual budgeting, instead of swiping the card and hoping it doesn't get declined was, was a big one. Yeah, I mean, obviously, you know, the budget was huge. We weren't doing it before. So you know, once we kind of figured out what we

would need from a Target or Walmart or grocery store, we, you know, there was never any fights about that we had kind of dialed in the budget. And then the other thing that I certainly realized along the way was that the snowball is faster than the avalanche and you know again we were trying i was focused so much on just that student loan i didn't realize how much of a hole i dug ourselves or we dug ourselves as we uh focused on that and all of a sudden that morning i realized how much more we had gone into debt so you also have to just stop going into debt like that saturday morning we had a moment and said we're not done we're done yeah that's it we're done yeah and and the power the powerful thing is when you just make a decision like that it changes the direction there it takes a minute for the math to catch up but something changes in the air i mean the spirit changes you know and

it's uh it's it's powerful that's powerful well done y'all y'all are heroes thank you that was that was a hard 18 months yeah we we actually you know our third baby was born in January so we you know we've cash flowed that as well along the way and so uh the other piece of it too uh you talk about peace all the time we were moving our way through baby step three and we were almost done and our car that hauls the whole family around the engine went completely out and it was wildly frustrating but like we were almost done, and our car that hauls the whole family around the engine went completely out. And it was wildly frustrating, but, like, we looked at each other and just said, like, we're going to be okay.

You know, there's money. Fix the car. Fix the car. No drama. No drama. Just used to be drama and broke and car. Yeah, and everything. Yeah.

Oh, my gosh. Wow. Way to go, you guys. Thank you. Very proud of y'all. Y'all are heroes. Oh, thank you. Well done.

Well done. Hey, we've got the Live and Give box for you. That to go, you guys. Thank you. Very proud of y'all. Y'all are heroes. Oh, thank you. Well done. Well done. Hey, we've got the Live and Give box for you. That's the Baby Steps Millionaires book. That's where you're headed for sure. If you're not there yet, you're going to be there soon, the way you guys are rolling. Thank you. Way to go. And a Financial Peace University membership.

You've already got that, so you'll be able to give that away. And, of course, the Total Money Makeover. And, again, that may be something you give. But it's up to you. It's your box. We got it for you guys to say thanks for coming all the way to Nashville to do your debt-free scream. We're proud of you at Ramsey.

Thank you. Thanks for having us. You're why we do this, so thank you very much. Matt and Michelle, Milwaukee, $148,000 paid off in 18 months, making $210,000 to $300,000. Count it down. Let's hear a debt-free scream three two one we're debt-free that ken is a power couple man is boom yeah those two focus on something they're knee stopping them oh man boom i love it i love

it i love it heroes well done guys this is the ramsey show our scripture of the day matthew 6 34 therefore do not not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble. Winston Churchill said, it is a mistake to try to look too far ahead. The chain of destiny can only be grasped

one link at a time. Never heard that from Churchill. Interesting. Very cool. The dude had a way of words, didn't he? He's a wordsmith. Aspen is in College Station, Texas. Hi, Aspen. Welcome to the Ramsey Show. Hi, guys.

Thanks for taking my call and all you guys are doing. Thank you. How can we help? So I have kind of an interesting question. My husband is currently in school to be a veterinarian. He graduates in 10 months. We own our house debt-free except the mortgage, except he will be getting student loans hitting him right when we leave. So when we sell our house, we will have about 130 in equity after

the sale and he'll owe about 160. I was wondering if it would be okay to use about $40,000 of that $130,000 as a down payment on a house for when we move. How much student loan debt does he have? $160,000, and we are currently paying on it, and I believe we'll be about at $140 by the time. And you get $140 out of the house, so you could be clear if you just wait to buy a house. Yes. I would be clear of the student loans.

Okay. That's not what you wanted to hear, but I would be. No. Because I think that here's what's going to happen, okay? You're coming out of school. You're resetting everything in your mind. You're resetting everything in your life. All the math in your life is changing.

You're going from being a student, piling up debt, to clearing debt and starting to have some serious money. And do you know where he's going to be working yet? Has he got that lined up? Yes. So he's already signed a contract, and he will start off at 130. I am currently working full-time, so we're living off my salary right now, which is more than enough.

How much is your salary? 95. And it'll be the same when you move? It'll likely be a little bit higher. I'm lined up for a promotion hopefully in the fall i think it'll be closer to 110 so you guys are going to be making a quarter of a million dollars with not a debt in the world and i'm saying rent for a year rent for a year and pile up a huge pile of cash and then go buy something. You will buy something different than you would stealing this

$40,000 away from the student loan debt and trying to squeak into a house to go from house to house instead of renting for one year. You're moving to a new market. You'll know the market better. You can take your time in the purchase. You'll have the income stabilized. Your lives will be stabilized. You're going to do a lot better real estate deal a lot more accurate real estate deal for the next five years than you will do if you do what you're thinking but you're so that's a great point yeah but your friends are going to think you're crazy no they already think we're crazy it's okay that's okay they're broke and understand your parents may say the same thing oh you guys need to put a down payment but let me tell you something when

we moved i had three little ones uh they were all let's see eight call it six and and five when we moved here nine years ago and stacy and i rented for two years because we wanted to save up a larger down payment and two we wanted to get a lay of the land and figure out where we were going to plant here. And so it is not unwise to rent. Can I just tell you? It gives you options. For a short period of time. Yeah, short period of time.

And two is on the long end, but it worked for us. Yeah, yeah. And like I'm saying, one year here, you're going to know the market better, you'll take your time in the purchase, you'll make a much better purchase, and your brain is going to be in a different place making a quarter of a million than it was vet school and 90 so true and you know you'll adjust you'll go okay this is the right you're gonna make a better house decision that's more forward

looking than jumping to jumping. But everybody's so strung out about real estate. I love real estate, and I want you to be a homeowner, but I want you to do it the right way. Lee is with us, or Leah, in Boston. Hi, Leah. How are you? Yes. Hi. How are you? Thank you for taking my call.

Sure. What's up? I am 43. I just turned 43. And I am thinking of going back to school for my NP, nurse practitioner. And I just became actually, this is all my second career being a nurse. And I'm thinking about how to pay for it. It's about 50 grand. And I could pay outright for it. Good. However, my income when I'm in school, although it's part-time, will go down a little bit as well because I won't be working as much.

So I can pay for it, but in my mind, I get scared to do that and I'm more tempted to take out loans. So you feel like you'll be more secure going into debt than you would be secure with a little less money. You're wrong. I know I'm wrong. I know I'm wrong. I'm also a mom. I'm wrong. That's the thing. You know, I'm also a mom. I have one 12-year-old. Doesn't change a thing.

How much money have you got in the bank, Leah? I have about like $295. Yeah. And you're going to spend what on the nurse practitioner? $50. $50? About $50, probably a little bit over $50. You realize how ridiculous the question and the numbers you just gave me are, don't you?

No, but my rent is... The difference in $295 and $250. Right. $245 in terms of taking care of a 12-year-old is laughable. But... If you burn through $24 245 you're going to burn through 295 i love this back and forth you've gone to the butt three times and dave's interrupt you i gotta hear this but what is the butt but i have you know expenses my rent is expensive

you princess die no quarter of a million dollars of expenses? Well, no. I mean, I made a lot more money before this career. Now I've gone down because I hated my job before, and now I love my job, but it came at a cost. Okay, so Leah, hold on one one second let's look at how much are you going to make less as you're going into school how much less will you make have you got that figured out as take home how's it going to change um i well i used to make over 300 000 no that's not what we're talking about no you said you used to make eight million but that doesn't matter what do you make now that's going to go down yeah i i bring home about um between seven and eight thousand a month and you would instead you'll be bringing home how much yeah um i would say about probably six okay so two thousand a month that's twenty

four thousand dollars right can you adjust your lifestyle to where that's not stressing you out well pull 24 000 out of your 295 there's that 50 out of your 295 and keep everything exactly like it is right now and go to school without borrowing you do not need to borrow money it's insanity with your numbers there's also there's also the okay you need to go borrow money you should go deeply in debt i'm tired of arguing money. You should go deeply in debt. I'm tired of arguing with you. You should go deeply in debt and see if you can bankrupt yourself. Oh, my God, woman, how many times have I got to argue with you? This is nuts.

She's fighting hard for that loan right now. I'm desperate to go into student loan debt. Well, go at it, lady. Go at it. That's what you need to do. Oh, my gosh. Yeah. How in the world?

You're sitting on three hundred thousand dollars cash and your biggest worry is a twenty four thousand dollar shortfall and a 12 year old jeez you you're okay yeah you're okay she didn't get you didn't get there with being crazy and undisciplined to stack that kind of cash away she got there because she had a huge income bigger than this but she still saved it you know it's not like she's gonna just blow this cash but no we don't borrow money to preserve a savings account so no no no how many times i gotta say this no no ken good show today thank you sir that was. That was fun. Austin, Ben, James, Zach, and Andrew in the booth. Well done, guys.

Well done. That puts this hour of the Ramsey Show in the books. 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 Ken. If you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to ramseysolutions.com and click on the get started button. We'll help you figure out the best next step for you based on your specific situation. Again, that's ramseysolutions.com and click get started.