The Ramsey Show - App - I Feel Like I’m Drowning (Hour 3)

Episode Date: May 16, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am your host, Jade Warshaw, joined by George Camel. Good to be here with you, George. It's so great. You know what, Jade? This is a special day. As we get started this hour,

special shout-out to producer James Childs, 13 years at Ramsey today. Congratulations, James. The haters doubt it. None of us thought you'd still be here, and you've done excellence in the ordinary for 13 years now. And another shout out to associate producer austin selby who's last day at ramsay's tomorrow he's moving away from us

and he's served us with excellence now for almost three years and moved on to producing the entree leadership uh podcast with dave and he will be sorely sorely missed um so thank you austin and congratulations james a happy and sad day around here i feel like we should be singing like boys to men into the road i won't do that can i be honest i do that when any team member leaves i play that song and follow them out the door although we've come that's it that's all you get that's good let's go to a call these are very important announcements that we do have to make but i'm gonna celebrate the team behind the show of course because i just saw we were the number 16 show in the nation that's legit it's you know it's not because of

us jade definitely not it's because of the amazing team that pulls this show off every day otherwise we just listen without them we're just nerds that think a lot and talk to ourselves in the car all right let's go to the phone lines where we've got Martin in Charlotte, North Carolina. What's going on, Martin? Hi, everyone. My question is I have an RV that is my primary residence, and I was wondering if I should treat that loan as bad debt or as like if it's a house loan as I'm working on the snowball effect. Here's the thing.

It's on wheels, and therefore it's a depreciating asset, and therefore we would put it in the, or in the RV of bad debt. Because that thing is going down in value every day you live in it, unlike a traditional home, which would go up in value over time. Okay. So what's your long-term game plan? The long-term game plan was to pay down debt, obviously, then purchase a plot of land and build a house. Okay. How much debt do you have left outside of the RV? Outside of the RV, under $30,000. Okay. What's left on the RV? I think roughly $40,000. Okay. And what's it worth? Worth? It's worth about $37,000, give or take. You've made my point. We're already underwater on this thing. And so hanging on to it just means you're still going

to owe 40 or 39 and that thing's going to be worth 36, 35, 34. You see where this is going? Yes, sir. How quickly are you going to be out of debt? The 30K? Roughly in eight months. In eight months. 30k uh roughly in eight months in eight months so the plan is in eight months we're debt free we're thinking of a way to sell this rv and figuring out what it takes to get in another rental that's not going on and going down in value so that you can start saving up is that what you're thinking uh yeah either that or save an emergency fund and then go that route because the rental is going to be more expensive. How quickly can you get your emergency fund?

I already have the first up to $1,000. It's the three to six months. Yeah, it would roughly be four months, four and a half months for that. Okay. And that's, does that get you three or does that get you six? That gets me six, ma'am. Okay. I'm wondering if you go three and then start saving up to get out of this RV because you're upside down, and so I'm trying to mitigate the loss.

We want to get rid of it as quickly as possible. Okay. I'm even wondering, could you sell the RV? I know you're underwater by a few grand, so you save up the difference, sell the RV, and just go rent and get a roommate. I mean, that is a possibility. What's your RV payment? Nothing's off the table.

It's $400. Okay. I'm just wondering, in your area, could you get a roommate, and you split the cost of rent, and you're paying $500 or $600 in rent, but you've got this debt out of your life. Now we can focus on the $30. It's not going to slow you down by all that much. Yeah, that's definitely a possibility. I just have to look around, but nothing's off the table. I'd probably go that route simply because this thing is kind of dropping like a rock.

And if we're talking about, you know, a year and a half from now being ready to rent after the debt is cleared, after the three to six months, after you save up first and last month's rent, like I feel like a year from now you could look up and be $5,000 upside down or more. Yes, ma'am. Because for the next eight months, you'd be making minimum payments on the RV while throwing the rest at your other debts. And so now your balance hasn't moved all that much, but that interest is still climbing while your car is depreciating. So you kind of have a few things happening all at once converging that make this a bad plan. Okay. So I hope that helps.

Get out of this thing. Rent for a while. That's what I would do if I was in your shoes. But yeah, the RV life, it seems like a wise move, but long term, it's not going to help you out because that thing is going down in value so quickly. It's definitely not the move. But thank you for the call. We got Nate who's in Dallas, Texas. Let's see what Nate's talking about.

What's up, Nate? Hey, how are y'all? Doing good. How can we help? Yes, I was just calling. I'm 21, and I haven't been back to school yet, and I plan on going back this fall. I've been working full-time, and I'm in a job that I really enjoy and that I like and that there's there's some pretty good potential. And my girlfriend just recently decided that she's going to move and transfer to Alabama, which is about nine hours away from where we are, and I'm just kind of thinking about moving with her

or finishing up this coming year and then transferring. Are you guys getting married? Well, the plan was within the next two years, yes. How long have you been dating? Two years. Okay. Are you engaged? Are you looking to get engaged in the next few months? Yes. Yes. Okay. Are you engaged? Are you looking to get engaged in the next few months?

Yes. Yes. Okay. Can I run this? That was the plan. And then now, you know, if she moves that far away and I'm not able to follow her, I don't really, for college. For college. Okay.

Got it. So she still has a few years left and she's going to finish. Where at in Alabama? The University of Alabama. Okay. Okay. So she still has a few years left and she's going to finish. Where at in Alabama? University of Alabama. Okay. So would you be able to find a job in that area? I mean, ideally, yes. What kind of work do you do? I work at a small engineering firm and we pretty much just do bridge inspection on the side that I work on.

So you said earlier in the conversation, you were like, I'm 21. I haven't had a chance to go back to school yet. And you said that you were working full time. You had a job you really liked. Can you talk a little bit about that? Were you in school and did you stop? Why did you stop? And what are you going to go back and do? Yeah. So I got a semester of hours under my belt right now and I've just been working you know since high school for two about two years or two and a half years and I just kind of decided that I need to go back sooner than later so I'm starting up this fall I'm already registered and everything are you paying cash for uh accounting yes ma'am okay so you're going for accounting. Yes, ma'am. Okay. So you're going for accounting. So you want to switch fields entirely. Well, yes.

I mean, I'm not, I was never really for engineering. It was just kind of a job I landed. Okay. But you know, you know, you want to do the accounting deal. Yes. And you can pay cash semester by semester. Have you looked into what that's going to look like in Alabama? Since for you, that's going to be an out-of-state school. Exactly. Exactly. And it would, and it would,

I'm going to a community college this fall and I've looked at the one in Alabama and it's, it's almost double, which, you know, that's only 6,000. Here's the thing. Here's the thing. I want you to think clearly about this because I don't want, even if she's going into debt for school, I don't want you going into debt for school. You guys might have a long distance relationship for a while. Here's the thing. She decided to go to Alabama. That doesn't mean you have to follow her. You know, you might have to ride this one out and see where it ends up in the next couple of years.

But I don't want you going into debt. And I certainly don't want you sacrificing to chase a girl who's not your wife. This is The Ramsey Show. You're listening to The Ramsey Show. I'm your host, Jade Warshaw. I'm joined by George Camel, author of Breaking Free From Broke. If you don't have a copy, make sure you pick up a copy. It'll change your life. It's this generation's total money makeover. And speaking of that, 20th anniversary. That's what I'm talking about. Make sure you get one. That's apt timing for Dave to go, you know what?

Time to update this book. I'm not going to let George compete with me. George was taking some of the, he was taking some of the smoke. That's all right. There's enough room to go around. It's an honor to take smoke from Dave Ramsey. There you go. There you go.

All right. Let's get into this question of the day, George. The Ramsey Show question of the day comes from Lauren in Indiana. Here's what she had to say. After years of living paycheck to paycheck, I'm finally getting my life together, have paid off all my debt, and I'm in baby step three. But now I have a debilitating problem with anxiety around spending money. Aside from regular spending on groceries, gas, and medications, I am terrified of the idea of spending money on other things I need. For example, Mm. This is a me back. How do I get used to the idea of spending money now that I have that cushion that I've worked so hard for? This is a common problem. So number one, Lauren, you're not alone

in this. This is like a new muscle you're flexing because for so long you've been in sacrifice mode. And what we say is once you get out of baby step three, you move from intensity to intentionality. So you're on the cusp of that. And I do think once you have that emergency fund, it changes your anxiety around money because you're still not at safety quite yet until you get through baby step three. I agree. I also think there's, you know, depending on what your background is, she doesn't tell us much of her background, but if you've experienced the things that go along with being broke, like I can think about times coming home and the water's been cut off and you're like, shoot, like the water's cut off. Or you come home and the electricity has been cut off and you're like, shoot, the electricity, like those little things. Or you go,

you know, I talk about in my book, the feeling of being, you know, at the register and you're, you go to slide your card and you think it's going to be declined. You don't know, is it going to be declined? Is it going to go through like all of those things that make your heartbeat fast and make your armpit sweat that all still lives inside of you. And, you know, whether it's debt collectors calling your phone, like to this day, I keep my phone face down, like nobody's calling me, but I feel that it's in my body and it doesn't go away. And my guess is that there's probably something. I mean, she's literally says I'm terrified at the idea of spending money.

And probably there's something inside of you that is fearful of one wrong move, putting you back to where you were. It's a scarcity mindset. And what we have to move toward is an abundance mindset. And this is not heebie-jeebie power of positive thinking. This is getting a financial foundation under you, sticking to the budget to where you know, I've got the money to make the car repair. So I don't need to freak out. I'm paying cash for this used car, so I don't need

to freak out. I've worked hard for it. I'm going to enjoy the money. And that takes time, truthfully. It may take months for you to finally get into that rhythm where you know, I bought this thing, it's going to hurt a little bit emotionally, but I don't have debt hanging on the back of it. And honestly, for me, a thing that helps a lot is when you do have your every dollar budget and you can look at it and say, I budgeted for this, the money is here. And going and looking, like honestly looking and saying, okay, the car thing that you talked about,

do you have a sinking fund that you're putting away for those repairs? And just putting your eyeballs on it and going, okay, I'm being a responsible person. And when you get ready to spend that money, just working with your brain and just telling yourself, hey, I'm a responsible person. I'm not in debt anymore. I'm safe. Life is good. I can't tell you, George, to this day, your girl, I talk to myself is all I'm telling you. You know what this reminds me of? Whenever I go to the airport,

I always go straight to my gate to make sure it exists. Y'all ever do that? My husband drives me crazy with that. You just walk over. Yep, it exists. And then you turn around and go get some food. That's kind of what it feels like with money for a while. And like, I'm going to check the bank account just to make sure the emergency phone is still there.

Okay, it's still there. I can go to bed now. It hasn't moved. No one took it. And that takes a while to go. Like, there's no monster under the bed. Yeah. Like, no one's coming for me.

I'm safe. I'd love to hear in the comments comments i'd love for people to comment the thing that you know once they became debt free it was like this is the thing i struggled with or i still you know i still pay my my like some people still pay their electric bill for the whole year just in case you know like wow those kind of just in case things that you do i know i've heard dave talk about um the sharon wants it category SWI SWI. It's just there because it gives her a sense of security. And I think we all have those things that if you build it into your normal life and into your budget, it will help out with that anxiety that you feel. It's like, OK, some people, you know, we recommend three to six months of expenses. Some

people have seven or eight. And I'm not faulting them for that because there's something that's making them do that. And it's like, listen, you do you. There is a personal part of personal finance. And I think those sorts of thoughts will help her. And the last thing I would say is force yourself to give. Force yourself to spend. So put that in the budget and it will release. Once you have that open hand and you're giving more, I just talked to this happiness expert this morning, Jade, Arthur C. Brooks, some fascinating guy. He said that there is an actual science to people that give, they actually make more money.

And it's not this karma thing. He said, if you give a dollar, you get back 160. And he said, it's because you are a problem solver. And those people tend to work harder, to be more successful successful to serve others more and that ends up causing more success so it's a fascinating principle that unlocks something and i think that's behind the spirit of giving and even spending forcing yourself to have some fun money in the budget is a good thing and you have to spend that 50 bucks that's good no matter the

month i'm gonna spend it i'm gonna get a little massage i'm gonna go out with friends i'm gonna go play some mini golf go buy a book do something that brings you joy and you'll realize that spending isn't this evil thing that's right we've kind of villainized spending when you're in debt to go don't spend a dime once you're out of debt spend yeah live like no one else so that later you can live like no one else that's good and maybe don't forget that part you know have a little something that you say to yourself like a i don't know something that triggered affirmation remember on anger management goose fava remember that it is like you need a little something that you say not goose fava but you need like something that you're like this is like i'm safe like i worked for this it's in the budget whatever that is like it george all right let's go to the phone

lines cole in salt lake city joins us next. What's up, Cole? Hey, thanks for taking my call. Sure. No problem. How can we help? So about a year ago, I kind of fell into, my parents convinced me that they wanted to buy me a car kind of as a gift. Okay. Instead of just getting a beater uh like a beater okay and uh um and it was supposed to be just a gift but i've since gotten married um and they've now come back and said well you should take over this payment we want to give this to you um that's messed up a little bit that's not a gift yeah. So I'm kind of scrambling. I'm a full-time student, so I have one of these working hours.

Is the debt in your parents' name or your name? As of right now, it's in their name, but they're wanting to transfer over. My wife is actually international, and so she's not able to work yet until all the green card stuff goes through. What do you make? I work part-time. I think gross, it's about $1,700 a month. And we just moved into a new apartment.

I was paying student housing for about $500 a month, but now it's a little over $1,000 a month. And you make $1,700. Hey, can I ask you a question did is there something going on with you and your parents like is this a spite thing like they didn't want you to get married and so now you're we have now you got to pay the car note like is there something going on no i think it's just they you know that's just what like married people do and it's like if I'm old enough to be married, I'm old enough to have a car payment.

Do they know that you're broke? Be a grownup. I've explained and we kind of have this conversation, but. Like if you take over this car, it's going to get repoed. That's what, yeah. Because what's the payment? My question was the payments. So I'm about, there's about $20,000 left on it. Okay.

Payment's about $470 a month. And what's it worth? I think I'm underwater. I think it's only worth about $1670. Yikes. Dude, you make $20,000 a year. This is a problem. You can't afford this car.

Right. And it sounds like it's now their problem because that debt is in their name. And so if I were you, I'd say, mom, dad, I appreciate you buying me this gift, but it's no longer a gift and you're going to sell it and you can do what you want. Yeah. Just give it, give it back to them. It's their car. They decided on the payment and that payment is what got it upside down. You didn't decide any of this. You took a gift that they gave you. And if they don't want to give you the gift anymore then you just give it back and that's how this works and you'll need to save up and buy

yourself a car a little beater car maybe five six grand for now until you can upgrade that car but this is not cool man um and there's a lot of parties to blame here but your parents calling us a gift and then turning it into a loan is not how this should have gone down. Agree. Ooh, this is The Ramsey Show. You're listening to The Ramsey Show. I'm Jade Warshaw. This is George Campbell. We're taking your calls for the next hour or so. Give us a call.

The number is 888-825-5225. Hey, let's go straight to the phone lines. We've got Sarah, who's in Dallas, Texas. What's going on, Sarah? Hi, Jade. It's a pleasure to speak with both of you today. I really appreciate you taking my call. We're glad you're here. How can we help? So my husband and I in January officially became completely debt-free. We paid off the house. Nice. Yeah, it felt great for about two seconds because in December of last year, he was diagnosed with breast cancer. And in February of this year, I was diagnosed with breast cancer. Whoa. $5,000 to $10,000, hey, you need to meet your deductible. We need this up front. You'll be paid back. I mean, I feel like I'm drowning.

He needs a new vehicle. He has nearly 400,000 miles on his vehicle, and it's breaking. And although we're debt-free and we have more than, I mean, I have tons in an emergency fund, I guess, relatively speaking, I feel like I'm drowning still no matter what I do. And every time I turn around, it's $7,000 here or there. What is your deductible? We have a, our family deductible is $10,000. Okay. And once you hit that for the year, are you done? Is that your out-of-pocket max? That's my out-of-pocket max.

Okay, that's good. And what's your income? Before taxes, between $10,000 and $12,000 a month. That's before taxes? It varies. Yeah, before taxes. We're both self-employed. Oh, okay. And so I have to keep some back for taxes. That's right.

And some of that goes to investments. How much are you investing? Um, some of that goes to investments and... How much are you investing? I calculated it, you're going to laugh at this, usually close to about $50,000 a year. Okay. Is what percentage... Is that about 40% of your income? That's about 30% of our income. Okay.

So you've been going hard. Um, okay. your income that's about 30 percent of our income okay so you've been going hard um okay so that could be some of the reason you're feeling it because we'd say be at about 15 percent now you're you've got the house paid off so you can invest more but if you're in a season like you're in i might dial it back to get some breathing room for a sec and then dial it back up to you know 30 once you're in the clear and let your, you know, let your time and energy and money be focused on your health right now. Okay. Does it matter? Does our age matter? He's 60 and I'm 52. 60 and 52. Okay. Well, I kind of wanted to ask you, you don't have to

go too far in it, but like, what's the nature of the diagnosis? Like, is it, hey, we're going to go through radiation, and this is going to be seven months that are really tough, but we have a great prognosis at the end? Or is this looking like a battle, like a long-term deal? He had surgery, and it's breast cancer for both of us, like you said. And the surgery was considered curative for him. He's just on oral medication.

Great. I did not have a complete mastectomy. I had only a partial mass removal, basically. And we're still waiting on final results on that to find out if I have to go through chemotherapy and radiation or just radiation. Understood. Okay, praying for just radiation. Okay, so with him, let's kind of, what I would do is I'd kind of try to project some of the timelines on this. If his surgery was considered

curative, what's it going to look like healthcare wise for him now that he's had his surgery? It feels like you're a little bit out of the woods as far as him having surgery, massive bills coming in for him. But we don't know yet what that means for you. But it looks like you're going to, you know, for sure you're going to be hitting that $10,000 out of pocket max. What does it look like to make sure that that money is piled up for you? And is there any part of this that you would be having to go outside of your normal insurance provision in order to receive care. So those would be the two questions and the two kind of boxes I'd want to check right away just to put a little bit more information around what's going on.

Because if we say, listen, just be prepared for $10,000 a year, then that's something that you guys can put away for and start thinking about what that looks like and start working out plans with your provider in order to make that work. Is this a high deductible health care plan? Yes, it is. And do you have an HSA attached to it then? I do. Okay.

You may want to max that HSA out every year as a part of your wealth building strategy, as a part of your sort of tax advantage strategy because of the triple tax savings with that HSA out every year as a part of your wealth building strategy, as a part of your sort of tax advantage strategy because of the triple tax savings with that HSA and the fact that you guys are probably going to use it every year. Okay. And so that will at least, you know, you'll basically save your tax rate on your medical bills by putting it through the HSA and spending out of there. Okay. Do both of you have life insurance? We only have it on me. Unfortunately, we married a little later than most people, and his health did not allow him us to get anything that actually could be affordable for life insurance. Okay. And because I'm the primary

income for the family, we got life insurance on me. It is term life insurance. Okay, good. Costs about $60 a month. Are you guys self-insured at this point? Aside from my life insurance, yes. So you have the house paid for. How much is the house worth? $350. Great. And what's in your nest eggs combined,

all the retirement accounts? I was adding it up. I believe it's somewhere close to about 900. Great. Okay, excellent. And that's on top of your emergency fund. How much is in there? That was including the emergency fund.

I have a money market account that has about 100 in it, and that's more than enough of an emergency fund for an entire year. So I want you to breathe easy knowing that you guys have done such an incredible job setting yourselves up for a chaotic life moment like this. And so while it's scary, the actual financial part, I have total faith and hope in. You guys have done an amazing job on that front. And so nothing's going to, as long as you have this health insurance in place, nothing's going to tank you guys financially.

So I want you to sleep easier knowing that financially you're going to get through this. Okay. I mean, you guys are baby steps millionaires. You've done a really good job on that front. Do you guys have kids? No, we can't have kids. We were never blessed, but that's okay. We have each other.

You do. Listen, toorge's point financially you guys are okay you guys are going to be in our thoughts and prayers for sure this is a really tough season but it's just a season and there's going to be some joy on the other side of this i'm believing that for you guys and we're going to gift you a year of every dollar premium i hope that helps with your budgeting experience as you lay out all of your expenses and the income and you have all the bank transactions coming in and the paycheck planning tool. I hope that gives you some peace just to look at the numbers and that becomes your sort of safety to go, we're going to be okay.

The budget said so. And that's a big help. So hang on the line. Austin will hook you up with a year of every dollar premium. Wishing the best for you guys. Yes, definitely. That's tough. But this, this is why we do. And this is a huge part of why we teach what we teach. Cause it's not, if a storm is going to come, it's when a storm is going to come. And you don't know what the nature of that storm is going to be. You don't know if it's going to be with your marriage or with your health or with your children or with your job. But we do know George that money touches everything. Like it touches every part of our life. And when your money is in disarray and then you face one of those storms in life, it just causes more and more chaos. Right. It makes something just feel like you can't get through it.

But when your money is on point, that's one thing that you can go, OK, I've done that. Check that box. Now we can focus on the things that matter and in this case It's their health, you know focusing on getting well and doing what they need to you know, see it through to the other side Yes, and a lot of people jade they got well i'll i'll get the will done next year. I'll i'll pay off the debt someday But man life is short You only live once yolo is true And so get your act together now because you simply don't know what's coming down the line. So if you don't have a will, if you are an adult and you don't have a will, get it done today. We have friends at Mama Bear Legal Forms. You can knock this out in 20 minutes. They give you six months to complete it. It's affordable. We've got our code so you can

check them out. When it comes to term life insurance, it's very affordable. Get it while you're healthy. Get it while you're young from our friends at Zander Insurance. All of this stuff matters. Health Trust Financial. If you need good health insurance in place, they can help you find that. RamseySolutions.com slash health. Don't leave this up to chance. Your life is too important.

You only live once, so let's make the most of it and get our finances in order. And Sarah's a great example of that. We're praying and thinking of you guys as you go through this. And we hope that you call us back with some great news. Yeah. And all that you said, George, that is really you loving your family. Well, this is how you take care of the people who love you and you love them. And they depend on you to do this. Do it today. This is The Ramsey Show. You're listening to The Ramsey Show. Thank you for listening to The Ramsey show thank you for listening to the ramsey show i'm your host jade warshaw joined by george camel our scripture and quote of the day says this walk with the wise

and become wise for a companion of fools suffers harm that's proverbs 13 20 then bon jovi said this he said don't get too comfortable with who you are at any given time. You may miss the opportunity to become who you want to be. I dig that. Love it. And by the way, hey, thanks for listening to the show. When you guys listen, obviously it gives us jobs, George, because if there weren't listeners, we wouldn't be here. But if this show has done anything for you, be sure to like it, subscribe it, share it with a friend, share it with a family member. It just spreads that life change all over the place and honestly all over the Internet because there's a lot of crap on the Internet, George. We've got to displace a lot of filth and tomfoolery out there, Jade.

I know. That's right. We need to take up space is what I'm talking about. So if you listen to us on a podcast, share it with somebody. If you like the YouTube, make sure you like it. Make sure you subscribe it when you do that. It just fluffs it up and everybody gets to see it and it takes up more space and we want something positive out there.

Spread the love. Something that's giving you hope, something that'll give other people hope in this crazy world, this madness that's going on. We need a little bit of light, a little bit of hope. All right. Let's go over to Becky, who's in Kansas City, Missouri. What's going on, Becky? Hi. Hey, what's up? Hi. So I have a question. My husband has been transferred to the West Coast with his job, and we have a home that we just love. And we are about a third or two thirds paid off.

Okay. And we're struggling with, do we keep it? Because this is essentially where we want to retire. But the rent in on the West Coast, which the rent is like twice our mortgage. Yikes. Or yes. Or do we pay it off? Because we have money and investments to pay it off,

but the stock market right now is doing really well. And it has a higher rate of return than the interest on our mortgage payment. What kind of money is that? Is it your retirement that you're talking about? No, it's not a 401k or anything. It's we received an inheritance and a small one and we invested it and it's getting a good rate of return. How much is it? What's it at? It's at, how much is the inheritance or the rate of return? The inheritance.

Inheritance, it was, um, half a million and we invested half of that and left the rest in cash. Okay. So you've got 250 invested in 250 in cash, just in high yield? Yeah. Okay. What's left on the mortgage? 290. Wonderful. Well, I don't love the idea of hanging on to a residence across the country when you don't even know what life's going to look like. And are you going to be purchasing on the West Coast? Is this a long-term move?

No. We're here for six to ten years at the most. That's long-term. I mean, I feel like— On the West Coast. You're going to be in the West— Yeah. So let's say you're in the West Coast until 2034.

Yeah. I would want to purchase a spot over there. And in that case, I would just— I mean, because you're going to move, is this happening, you know, next week? It's happening within the next few months, yeah. Okay. Well, because of that, I mean, paying off the mortgage versus not is, you know, I would sell the property regardless and use all of that plus your savings in the investments to purchase a property on the West Coast. I would do the same. Versus renting and paying double your mortgage for that, because the same thing's going to happen. The real estate on the West Coast, it'll probably

appreciate too. And later on, when it comes to retirement, you can buy whatever dream home you'd like back in the Kansas City area. It may not be the exact home, and I know you love this home, but you're going to be a different person 10 years from now. Exactly. In a different stage of life. What's desirable will be totally different. I mean, there was a time where we liked Formica countertops and lots of walls. Yeah. Wood paneling, you know. So you'll still have to grieve it. You know, a home is still a real special place and the memories that were made there, but the actual, the countertop and the layout, I mean, we can always find something beautiful down the road. So I would sell the property. I would not hang on to it. And I would put all of that money, the equity from the sale of your home, plus the investments and buy a

property to lower your mortgage or even paying cash. That would be my goal. And to get that next property paid for. That's going to set you guys up really well over the next several years. Very good question. Thanks for the call. That's a good one. Yeah. Whenever you're moving, I think that's the hard part, George. People want to keep, it's like, oh, but it's doing so well. Or maybe you even fixed it up. Like you put money into the property. That's the hardest. And you have to let it go. We can rent it and make great money. Yeah. And then you come back to it 10 years later. You're like, this is not the house that I left. As Dave says, some guy changed the oil on the Harley in the living room. Oh, 100%. You're like, oh gosh. Listen, before Sam and I moved here to Nashville, you know, we were living in South Florida and we had put so much money in renovations,

cash renovations too, into our home. We made it just the way we liked it. And then of course we moved here and it was so hard to get rid of it. And there is that piece in your brain that's like, oh, I wish I could keep it. You know, maybe I could rent it out, which I mean, no way. But just six months later, we went back to visit South Florida and saw the house. And I was like, this is not our house anymore. Like already, whoever bought it was renting it out. And already it was a different house. Like already the weeds were all grown up. Like I was peeking, you know, peeking the window and you're like why would you buy that couch like why would you put that couch in there so it just it's not the same house is all what I'm saying George let's go take another phone call I think we can make it uh let's see we got Mary who's in

San Antonio Texas what's going on Mary hi hi, I just have a quick question. I'm getting ready to do a bunch of renovations in my home, painting and exterior and interior and some flooring in my kitchen. And so I'm just wondering which is the best route for me to go to get that money to pay for it. So I didn't know whether to go HELOC or pull for my retirement and then pay taxes on that because it'll be marked as income. Yeah, you're not 60 yet? I am 63. Okay. So what do you mean marked as tax? You're saying because it's in a traditional account? Right. I rolled over because I am retired. And so I rolled over about $50,000 into a retirement fund that it's in the market, I guess. So it's growing. Well, I definitely don't want you to do the HELOC because you're taking on debt,

you're moving backwards, you're putting the home at risk. And so that's a real bad move, even though it looks real attractive for a lot of people who have equity in their homes to go, I'll just have a credit card attached to my house and go back into debt. So that's not a good option. Do you not have the money to cash flow this and just pay for the renovations outright without tapping into retirement? No, because I'm probably looking at around $15,000 to $20,000. Do you have an emergency fund? What do you have in savings? That $50,000 is probably about what I have. What's in your nest egg? What are you planning on retiring off of?

Well, I receive a pension. I'm I mean, I'm living off my pension and then Social Security. So, I mean, I get a good monthly income. So, between those two, how much do you get a month from the pension and Social Security? About $4,500 a month. $4,500? And then what are your monthly expenses? Oh, gosh. With the house and everything else. Food, utilities, insurance. Well, can I just clarify real quick?

Do you still have a mortgage? Do you still have a mortgage payment? I do. I do. I refinanced a few years ago and uh I mean it's a long story why I had to do that but you know divorce and uh you know things happened and I needed the money so what do you owe refinance what do you owe on this on this 100 about 100,000 okay and can I just ask um what you're wanting to do these are just these are cosmetic things that you want right they're not necessity it sounds like painting

floors well like the house is 40 uh 30 years old and i haven't painted it at all so it's it needs the upgrades plus the flooring in my kitchen i had to to have my house leveled because it's on a cement foundation. So right now I have patches of cement in my kitchen floor because they had to drill through. I would only do whatever's necessary and I would use your cash flow. If your expenses are three grand, you get an extra 1500, start saving that, putting that aside and start cash flowing these as you can. But I wouldn't tap in to anything else. This is a cautionary tale, guys. We never want to borrow against our home. The goal is to have that home paid off by the time we enter into retirement so that we have that peace. And we're

really just able to live our life and enjoy it to the fullest. All right. Cautionary tale, guys. This is The Ramsey Show. you