The Ramsey Show - App - I Just Can't Stop Using My Credit Card! (Hour 2)

Episode Date: July 30, 2018

The show about you

🎵 🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America. Thank you for joining us, open phones this hour as we talk about your life, your money. It's a free call at 888-825-5225. That's 888-825-5225. Tom's going to start us off this hour in Columbus, Ohio. Hey, Tom, how are you? I'm doing just fine. How are you, Dave? Better than I deserve. What's up? I have a question for

you on how much I should save for retirement. I'm maxing out my 401k and my wife's 403b, and it's kind of like without a goal and something to shoot for, I kind of miss that anticipation going forward with something. So where do I invest my money? Very cool. Okay. And so you're out of debt except your home. That's correct.

Baby step seven. Oh, you got your house paid off too? I do. Okay. So we're maxing out everything. Good. Very good. What we have done is we laid out just some incremental things because I didn't.

Number one, with what you're doing, how old are you? I'm 49. And what's your household income? About 180 to 190. Okay. So you're going to be very wealthy at retirement. That's just established. If you're maxing out all of these things for the next 15 or 20 years, you're going to be very wealthy at retirement.

Millions of dollars. Okay, so now once we can know that, without even doing the detailed math crunching, we know that. That's a given with the numbers you gave me. And so the question then becomes, how is that motivating to keep at it, and is there more I want to do? And what Sharon and I had to do was we had to set goals for our investing around three things. One was some bucket list things that we personally wanted to do.

We call those lifestyle things. Over and above are just normal whatever. But we want to buy X or go to X or whatever. And so personal bucket list stuff, those weren't big in the scope of the millions of dollars. You know, buy a whatever. It's $100,000. It doesn't change it. It doesn't do it.

And besides that, as you quickly discover, stuff doesn't do it for you. But I'll put you a few things on their bucket list things. The second thing we wanted to do is we wanted to set some giving goals. And we wanted to be very specific about that. We said we want to fund our foundation up to X number of dollars. We want to be able to give to this certain ministry in a certain way, certain numbers of dollars. And how can, you know, what amount of wealth do we need to build to be able to do those things. And so the giving piece, the spending piece, and then the last piece was to just continue to look at it as a change your family tree.

Because you're going to have so much money, you're never going to use it all in your life unless you're just very wasteful. And you're probably not very wasteful and you're probably not very wasteful or you wouldn't have gotten here so um you know you're not you're not gonna blow it all and so we wanted to lean into our you know our three kids and teach them how to manage god's money god's ways and so they don't fall uh the money isn't a curse to them then when they get it how we're going to change our family tree in terms of the kids character and in terms of the dollar amount and then what we used was then we just said based on that then we need to set a goal at a half a million a million you know two million three million five million whatever and just you know like i like we were paying off

debt only we're doing it in reverse we're trying to hit some of these milestones, and every time we hit a milestone in net worth, we would celebrate. Just like when we would pay off a debt, we would celebrate back in the other side of it. But it kept us moving because it wasn't all about us. It was about our future generation, and it was about our generosity, and it was a little bit about us. And so those three things, the bucket list the giving and the change your family tree thing and then just some some dollar amount because that's what it's going to grow to i mean you may have i don't know without doing the math that i'm doing in my head but

you're gonna have between five and ten million dollars with what we're talking about here if you don't do anything else and so that that's assuming you're investing well and we don't have a bunch of other crises and that kind of thing but so just kind of you need to enjoy the trip and the only way i enjoy the trip is i want to know what mile marker i'm on and that's what you started with how do i what's some kind of a milestone that i can do to that i can look at to say hey this is worth fooling with uh otherwise you lose momentum and you can do all those calculations and stuff on chris hogan's website chrishogan360.com the r iq tool is on there the respire return inspired quotient to figure out your retirement iq and you can plug in the numbers and find out exactly what

i'm doing while we're talking here but you'll get a good grip on where you're headed. Congratulations, Tom. Very well done. Jonathan is with us in Israel. Hey, Jonathan, how are you? Hey, Dave. Doing great. How are you?

Better than I deserve, sir. How can I help? Well, actually, me too. I have a quick question. The real estate over here is actually very expensive, and if we would take a mortgage that would make under a quarter of our take-home pay, or a quarter, there is no way we could make it in 15 years. It would be more like 25. Then don't buy. I thought, what would Dave do?

Don't buy. I see. You live in a do? Don't buy. I see. You live in a place you can't afford. You do not make enough income to buy real estate. You don't get a pass because you're in Israel on math. All right. Math is still math. And so you're going to have to find a different location,

a different property style than you're thinking about, and or get your income up because here's my point if you become house poor because your payment is such a big part of your life or because um because you just stay in debt your whole life all because of the price of real estate and you just acquiesce to that um that's what i mean by you don't get a pass on math you're going to do damage to your future if you commit to staying in a mortgage for a long long time like you're talking about or you take a payment that's too big a chunk of your monthly income and that doesn't change if you're in los angeles israel new york city expensive real estate

markets london tokyo paris it doesn't change these are the most expensive real estate markets, London, Tokyo, Paris. It doesn't change. These are the most expensive real estate prices in the world that I just named off. But if you're going to live in there and own real estate, it means you have to make more money than people do in Oklahoma City in order to be able to purchase stuff. So I don't know how long you're going to be in Israel. You don't sound Israeli. You sound like you're an American citizen. So I don't know how long you're going to be in Israel. You don't sound Israeli. You sound like you're an American citizen.

So I'm guessing you're there for a short time, and maybe you just rent while you're there. I don't know what your long-term plans are. But if you're going to stay and you want to own real estate, you need to buy it smart wherever you live. And I know that's hard, but, you know, saying no is always hard. It's the hardest thing we do. Thanks for the call. Open phones at 888-825-5225. You jump in and talk. It's all about you, baby. This is the Dave Ramsey Show. Thank you. Can you believe this real estate market?

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761 Old Hickory Boulevard, Brinkwood, Tennessee 37027. Thank you for joining us, America. This is the Dave Ramsey Show. Open phones at 888-825-5225. Amanda is with us in Phoenix. Hi, Amanda. How are you? Good. How are you?

Better than I deserve. What's up? I'm calling because I'm a little embarrassed. I've been a Dave Ramsey listener for a long time, but I cannot stop using my credit card and I don't know how to do it. It's because, for example, if I go to the store and I see decorative things, in my mind, I think, well, if I buy them and I see decorative things, in my mind I think, well, if I buy them and I take them home and I don't want to keep them and I put it on a credit card, I can take it back without it affecting what's in my checking account. So I don't know how to stop using that. I feel like a hypocrite because I'm 34. How many credit cards do you have?

One. One? What is it? Just a Visa? Yes. Okay. Have you got a pair of scissors? Yes, I do.

Well, get them out. I know. Let's cut it up right now. Let's cut it up right now. Cut it up right now and close the account. Well, what do you do if you, like, what if you do, I just don't know how, like, for example, we just got insulation in our attic. We have the money for it, but it's easier to just put on the credit card to, like, not have to pay, like, right now. No, it's not. It's easier to just put on the credit card to like not have to pay like right now. No, it's not.

It's easier to pay right now. Yeah, I just feel like it's, I don't know. Yeah, I just, I think it's like a, I'm having a really hard time making that mind shift. I've thought about cutting out my credit card but it really freaks me out so i don't know it should freak you it should freak you out that it freaks you out that you're that emotionally dependent on a piece of plastic how lame a statement is that i know right yeah Yeah. I know. So I think I feel like we are spending a month. We need to use the credit card to kind of float us. Are you working on a budget?

No. No. Somebody's got to get on a budget. I know, right? Yeah. I just downloaded that. See, I don't think you're a hypocrite because I don't think you're working any of our stuff. Yeah.

I think you're just a casual radio listener, which is okay. But if it's time to graduate and actually do the stuff, then maybe today's your day. Right, exactly. Yes, I want to. I feel like the only thing we have is a credit card. Yeah, but you're not making progress. I know. Because you still feel out of control.

I do, and that's the part that's frustrating to me because I don't feel like we're getting anywhere, and I feel like every month it's like, oh, my God. The reason you feel that way is it's the truth. Yeah. You're not getting anywhere. Yeah. Because you're out of control. You're not getting anywhere. Yeah. Because you're out of control.

You don't have a system. You're not living on a budget. And you buy crap at Target on your credit card, promising you're going to take it back, and then you don't. Right. Exactly, yeah. And so, you know, how's it working for you? Not good. Okay.

Then it's time to change, isn't it? Right, exactly. Okay. So let's download EveryDollar. Okay. You got an iPhone or a Droid? iPhone. Okay.

Jump on iTunes and download the EveryDollar app, and then sit down with your husband tonight. You guys do a budget, and, you know, you're going to have to do that because you're going to cut up your credit card right now. Have you got your scissors out yet? I don't. I'm sitting in my car. Oh, okay.

I will cut it up. Okay, tonight. Have you got a debit card? I do. I have a debit card. So you can do everything you want to do with a debit card. I haven't had a credit card in 25 years, and I'm perfectly healthy. Yeah.

I know. I just, I don't know. i just feel like yes you do know okay i know that it's not good to have it and i know i mean you know the just the question is the the thing is this there's a saying we have that says until the pain of same is greater than the pain of change you won't change until you are sitting deep enough and do do that you will do something about it you're not going to change right and i don't want you to actually have financial problems due to your misbehavior before you actually change i'd rather you just have emotional angst like you do right now, like feeling like you need to do this. And I want that to just blow up inside your head right now.

For your sake, I don't care. It doesn't affect me. Oh, I know. I'm going to talk to Diana from Des Moines in a minute. My life is going to go on. So the question is, what are you going to do to fix your life? Are you going to do something different so that you get a different result? Right.

Yes, I need to cut it out. Today's your day. All right, I will. Have you got Total Money Makeover, the book? I do. Good. Okay. Well, get it out.

You guys get it out tonight. That's why I feel like a hypocrite. No, let's just have a come-to-Jesus-on-the-money meeting tonight with the husband, and then you two sit down, turn off the TV, put the kids to bed, and let's just talk. Baby, it's time to change. It's time to do something new. It's time to have a new life, a better life, and we're going to have to take some action to cause that to happen. And I think you can do it.

I think you know exactly what to do. You're not nearly as helpless as you like to sound like you are. You can do this. You're a lot stronger than you want to sound like you are. You know exactly what to do, and you know exactly how to do it. And you know what you're currently doing is not working, so you know you need to change. So I think you can do it.

If I can help, you call me back anytime. Michael's with us in New York. Hi, Michael. How are you? How are you doing, Dave? I'm good. How are you? Good.

Better than I deserve. How can I help? Well, I'm currently 36 years old, and I work for New York City Sanitation, and I could potentially retire in three years. So I would be 39, and I'd get my full pension, medical, everything. The thing is, everybody keeps telling me I'm too young to retire, which obviously I know I would have to continue to work somewhere else. But my question is,

I have a two and a half year old and one on the way. Do I retire at 20 years and either maybe start my own business or go find another job somewhere else? Sure. Or do I do 22 and a half?

Do I do 25? I think you're ready to leave. Yeah. So leave. Even if it's like 125 or like 1,500 a month? Listen, listen, listen. You're 39, right? Yeah.

Okay. What do you want to be doing when you're 59? What you're doing now? The answer is no. No. I already knew that. That's the way you asked the question. You telegraphed the past, dude.

I knew right where to pick it off. You know? So the answer is no. You don't want to be doing this. So you know how you're not going to be doing this? You quit doing this. Right? But even that $1,500 a month, if five more years gives me $1,500 a month to life.

So what? It's five years of your life, too. That's true. You're not going to be making money during that five years? You're going to be making money. You're going to start your own gig. You're going to start a new career. Now, here's the thing. Don't just run from something.

Run to something. So let's figure out where you're going and have a detailed plan on exactly step-by-step how you're going to get there and what process you've got to go through because I don't want you just retiring, sitting on the couch, watching Oprah reruns at 39. That ain't a plan. No, no, no, not at all. That wasn't what you were suggesting either. You're not afraid of work.

But let's have an exact plan that the day you walk out of there, we throw a little confetti and we walk straight to the next gig. So what's my next gig? It's 39 is too young. Sit on your butt. That's for sure. So there'll be something to do. I don't care what you do. Like you said, start your own deal, something along those lines.

That'll be fine. But, uh, or to start a whole new career, a whole different direction. And you may need to do some retooling you may need to take a few classes while you're still working in order to get ready for the next gig whatever the next thing is but gosh man you've already figured out you don't want to be doing this so stop doing it lay yourself out of plan and walk away i don't care when or how but not i care that you do it and that you're taking proactive steps to where you step straight into the next gig out of this. No hesitation.

No pause. No six months off to find yourself. You don't need to do that. You're freaking 39 years old. This is the Dave Ramsey Show. I get asked all the time, when in the baby steps is the right time to buy life insurance? My answer is typically now. Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs.

That's when they're at the highest risk. And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives, as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance, since it's the most affordable way to get the right amount of coverage and not break your budget. Go to Zander.com or call 800-356-4282. These are the guys I personally use.

Term life insurance is inexpensive, and your family needs this no matter where you are in your baby steps. That's Zander.com or call 800-356-4282. Zander.com. In the lobby of Ramsey Solutions, Jason and Anita are with us. Hey, guys, how are you? Doing good, Dave. Welcome. Where are you guys from? Columbia, Kentucky.

Columbia, Kentucky. What's that near? Bowling Green. Oh, okay. All right. Not far, then. An hour and a half or so. Yeah. Okay, cool. Good to have you guys. So you're down to do a debt-free screen. Yep. And how much have you paid off?

About $72,000. $72,000. And how long did that take? Around about four years. Four years. But we did do the last 60 in about two and a half. Okay. All right.

Cool. And what was your range of income through that time? We started at about $41,000 and ended up at about $62,000. Good. Wow. Nice. So what do you guys do for a living? I'm a custodian at the Adair County School System, and she's a nurse.

Oh, cool. Very good. Good. So what kind of debt was this $72,000? A little bit of medical, but it was the house. You paid off your house? Yeah. All right.

I'm looking at weird people. Way to go, you guys. What's this house worth? We had it appraised. It was about two or three years ago. It was appraised for about $94,000. All right. Very nice.

How does it feel to not have a payment in the world? Great. I bet. Not a house. I mean, that's just awesome, man. So you just leaned in and knocked out the house over the last four, but most of it in the last two and a half. Yeah. Okay.

So tell me the story. What got you started on this get out of debt plan? I'll let Anita start the story. It was my brother, Steve. Every time we would talk to him, he would try to put us through the class. And I would say, well, I'll go. And he would say, well, you both have to go through it. And I never could get this fellow to agree.

That fellow named Jason? Yeah. Okay. But my brother passed away in 2012. Oh, my gosh. On a motorcycle accident. Wow. He was one year younger than I am now.

And my sister and I, she had went through a divorce, and she said, I'm going to go through the class. Steve always wanted me to go. Would you guys want to go? And I said, well, I'll go. And I couldn't talk him into going. I went to the first class by myself and then begged him on the second one. I said, please, will you just go with me one class?

And if you don't want to go back, I won't make you, but just go one time. And he is now probably the biggest dave ramsey advocate out there oh my gosh well thanks that's awesome so uh jason you were suspicious yeah well i thought we were doing fine we paid our bills so we were fine i thought but okay you didn't think you needed it you didn't think exactly i didn't think we needed it but after after going to the class and listening to it and and just really letting it soak in and i was like yeah we need to we need to do this definitely let's let's try this and turns out old steve was right huh yes and here you sit with a paid for house i love it

i love it well he's in heaven smiling today. That's good. I believe so. That's awesome. Well done, you guys. That's very, very cool. Very fun. He was also engaged to get married on 12-12-12.

We're still really close to his fiancée, and she's listening in today. And what's her name? Let's give her a shout-out. Lena. All right. Good. Very right good very good well congratulations you guys so uh now that you're the biggest dave ramsey advocate ever right so uh tell me tell me both of you what do you tell people the secret to getting out of debt is it's definitely a budget working together, and doing things to keep up your enthusiasm, keep up the momentum. What was some of the stuff you did to do that?

I watched the show a lot. I hadn't read a book in years and started reading books again. Wow. I just started stuff to just keep the momentum up. Just keep your spirits up about it and just continue to keep slowly going and going. Yeah, you do have to feed your emotions or feed your brain, don't you? Yes, absolutely. That's very true. That's a good insight.

I like that. What about you, Anita? What do you tell people the key to getting out of debt is? Just, I think, contentment and sticking to a budget we had actually um went with steve to a show in lexington maybe 2008 march 2008 um and i don't think we ever really got a good budget going we put a truck up for sale it It didn't sell. But the second round, we were both in on it, and we just got determined and stuck with it. And it does work. Yeah.

So once Jason's on board and once you guys are in the classroom doing the budget, how much of a motivator for you, Anita, was Steve's memory? Oh, a lot. I bet. A lot. And you talk about this stuff at work. Our friends here, we probably drove it into the ground. We were just excited and wanted people to talk to. But Steve and Lena had been through the class a couple of times,

and Lena has always been a good encourager to me and family. But, yes, Steve's memory was there he was a good example very nice congratulations you guys very proud of you it's a whole new chapter in your life now very well done everything's opening up that's good good stuff well we've got a copy of chris hogan's book for you since you're reading now and uh that's the next chapter in your story to uh become millionaires and i think you're on your way and you call back in we're doing a millionaire hour one of these days and be outrageously generous along the way there's probably somebody out there you're supposed to encourage like steve encouraged you uh because he made you believe you could do it that's what

matters so very well done you two all right jason and anita from bowling green kentucky columbia kentucky area counted down 72 000 paid off in four years making 41 to 62 that's their house and everything let's hear a debt-free scream three two one we're debt-free free! Great job, you guys. Great job. Awesomeness. Man, that is killer. I love it. Very well done. Diana is with us in Des Moines,

Iowa. Hi, Diana. How are you? Oh, thank you. I'm fantastic. Thank you so much for taking my call. Sure. I have, I will get my master's in October, and before that I'd been looking for interviews, and I'd go and try to get a job, an internship, anything from anywhere, just getting myself out there, and I would get the interviews, I would go, and I wouldn't ever get the job.

And finally, I was just frustrated because I was like, what am I missing? What am I not doing? Am I lacking something? You know, and I just finally asked them to be honest with me and why I'm not getting these jobs. And she finally, one recruiter came back and said, well, you have a horrific credit score. And to her, she said a good credit score equals a good employee and i just wanted your thoughts on that or what am i doing wrong am i looking at the wrong

businesses and and what where i should go what is your credit score um i don't know maybe 600 i cut up all my credit cards and closed all my accounts so it dropped down okay all right you've closed all the accounts but you have outstanding debt somewhere correct yep i do still have outstanding debt yes are you behind on that or is it in default no nope i'm not behind i uh make the monthly payments every every month and then i'm on baby step two so i attack the smallest one first and then a recruiter who says that a good credit score equals a good employee, and if you don't have a good credit score, you could not possibly be a good employee, is too stupid to work for.

Thank you. Okay. I felt like a bad person. Well, you're not a bad person, obviously. Now, what you do need to do is if you're – that's someone in a corporate environment, is someone that's looking at that. A small business wouldn't pull your credit bureau report. And by the way, 67% of all people in America work for small business.

Okay. Business is 500 people and under. Almost 7 out of 10 people work for people like that. They actually use freaking common sense versus corporate America that are doofuses. Because if somebody won't hire you when you're current on your bills and everything else looks good, the interview goes well, and the only thing they use is they go,

oh, your credit score, we can't hire you. They're too stupid to work for. Okay. And so you've got, but now, what you may want to do is if you're going into a place like that, just do a preemptive strike and go, hey, if you pull my credit, you may see it's a little low because I'm on my way getting out of debt and I closed all my accounts.

But I'm current and I'm very fiscally responsible. And I can show you exactly what I'm doing if you ever wanted to know. But if you're actually going to not hire me based only on the credit score, we don't need to do an interview because you're too stupid to work for. Do a little preemptive strike like that and it'll help you. This is the dave ramsey show okay i need you to listen to this because one normal routine that everyone does can cause total chaos in your life. I'm talking about the simple act of using Wi-Fi.

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Download it right now. Just search Hotspot Shield on iTunes or Google Play or go to hotspotshield.com. You can be secure in seconds. Download Hotspot Shield by Anchor Free today. Thanks for joining us, America. Mariana is with us in Connecticut. Hey, Mariana, how are you? Hi, Dave. Thank you for taking my call.

Sure. What's up? I'm a single mother, and I have a student loan of $146,000 with 2.25% interest rate, and I have a mortgage of $167,000 with an interest rate of 4.85%. I started listening to you in April of this year, and since then I paid off my car, the medical expenses. Look at you. Way to go.

So, my next step was to start paying off my student loans. Good. But then I did my life insurance trust with my lawyer and spoke with her about this, and she suggested that I pay my house first. Yeah, well, lawyers shouldn't be giving financial advice. They're lawyers. That's stupid advice. The reason she said that is I need to secure the house for my children.

Bull. Because if she can make it. You need to get rid of the student loan debt. Okay. Bad advice from a lawyer talking about something they don't. Lawyers are arrogant sometimes. They talk about crap they shouldn't talk about. I don't practice law, and they shouldn't be telling you about how to get out of debt.

Okay. She basically said that if she can make them 5% owners on the house, the student loan can not get. Yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, a bunch of crap. Okay, the deal is this. You are paying off your debt. You've already had success paying off debt, and you're going to get the student loan paid off, and then you're going to get the house paid off too. But the student loan needs to go first.

How old are you? 44. You're not dying soon. Right, right. But, you know, because I am single and i'm the only source of income so get a get life insurance i did okay and that's why you have a life insurance trust and that takes you know that'll take care of the kids and take care of the mortgage and take it student loan will go away when you die if it's still there but it's not going to be there because

you're going to pay it off now bad advice bad advice that's what you were given you need to pay off your student loan you work the baby steps it just works very better mariana you're going to get your life back this way all she's planning for is your death and i'm going to plan for your life and your death and that is we're going to get both of these paid off and you're going to have insurance in the interim to make sure that your family is taken care of and these debts are taken care of. Of course, a student loan, if it's federally insured, is forgiven at death anyway. Nicole is with us in Phoenix, Arizona.

Hi, Nicole. How are you? Hi, Dave. Thank you for taking my call. Sure. What's up? Well, I appreciate all the positive changes that my family's been experiencing thanks to you and your team. Cool, good for you. Way to go. Yes, my question is, do you think it

would be worth moving to find a house for about $300 less a month to get within that range for the monthly income that your rent or house payment should be. So what is your household income? $61,000. And how much debt do you have, not counting? Oh, you don't have a house. How much debt do you have? $24,000 left to go. On what?

School loans. Good. And how much progress have you made so far? We started in January, and we've paid down $6,000 so far. Okay. All right. So good progress. You're winning.

You got some traction. You feel right. Well, let's kind of run it out, all right? If you save $300 a month, that's $3,600 a year, and we'll round that to $4,000. How quickly does that impact the twenty four thousand about one-sixth of it yeah i mean per year so um it's not like it doesn't make you go whoo-hoo this is immediately the answer but it is big enough that it's kind of helpful um moving is a pain in the butt and expensive also you're going to spend some money

to move and uh you might spend three thousand dollars to move so that might use up your first year savings there right right um um i it would be it would be it would not be my first choice because it's not a big enough change if you could make a bigger change i might look at it um because rent is patience you're not renting forever renting is just patience while you're getting out of debt and then saving up money to buy it's not like you know we're not we don't have to rent the nicest thing in the world we're just renting something to get by it's camping you know until we get until we move on to the next section of our life. And so the sooner, the cheaper you camp, the less time you have to camp. And so the cheaper you rent, the less time you have to rent.

And that's just the ratio. So the one thing I would look at, what is your rent? How much is it? $1,380 a month. So you could get like $1,000 rent. In this area, I could. And the only reason we're questioning it is because we have moved more times, I think, than the average family within the past five years.

And we're wondering if we just should stay put and stay on track since we're doing so well. Yeah. Or just go for it and get the cheaper rent. I don't mind you staying there. If you're going to, you probably need to look at adjusting some other stuff. You need to do something to get the income up. Okay. And so that we can make better, faster progress.

Because the point is we don't want to be here long. Right. We don't want to be a renter five years from now. We want to be an owner. And so in order to do that, you've got to get this $24,000 paid off. You've got to build your emergency fund of three to six months of expenses. And then you've got to save a down payment. And you've got to do all that on $61,000 a year in Phoenix, Arizona.

So it's doable. But, I mean, you're going to be tightening things down hard for the next, I don't know, four years, give or take. Maybe five. That kind of a thing. Hope that helps. Heather is with us in Minneapolis.neapolis hi heather how are you good um i just started listening and we're just kind of lost with what to do with our money right now we we don't have any debt but we have fifty thousand dollars in savings good we are looking to buy a house so we currently rent but we have a second baby due in

three weeks we don't buy a house with a three-week baby coming you can or can't i wouldn't lord of mercy that sounds like stress okay and then after the baby um my husband's debating going back to college or going to college i should say and so we were wondering if we should wait on buying a house until after that too uh depends on if you can pay for both how's he gonna is he going to quit working while he's in college? Possibly. So have a new baby, quit my job. That's weird.

It is weird when you say it like that. So, well, I guess another question, too, is should we stop his 401K while we keep saving? Because I think we have enough for the down payment on the house. Yeah, I think you do i think after you get home with the baby you guys get settled in and then you can pray about what your next options are you're in a position to buy a home and do it right on a 15 year fixed what is his income um we take home about five to six thousand His is about 3,000 a month. What's he do? He works at Kemp's. It's a milk plant. Okay. What's he want to do? An electrical lineman.

And you need college to be an electrical lineman? Yeah. Really? Yeah, there's a college about an hour away. Oh, like a technical school? Yeah, there's a college about an hour away. Oh, like a technical school? Yeah, yeah. Oh, okay, not like a four-year degree in linemen. I never heard of that. No, no.

Okay. No. All right, what does it cost to take the technical school? Probably, what, a two-year school? Yeah, and it's $14,000. Okay, cool. Well, you know, you just look at it and go, that leaves us $34,000. And if I'm going to go do this, and his income would likely go up considerably as a lineman, would it not?

Yeah. Yeah, so it's probably a good investment. Is that what he wants to do with his life, or is he just trying to make more money? Trying to make more money. Yeah, I would want to tie in my education and my career path with where I want to be 25 years from now. How old is he? 27. So ask him the question as you guys are talking about this time, this transition time in your life. Where do you want to be when you're 47 and 57?

Is it a lineman? If not, don't go be one. If you want to be, if the answer is yes, then go be one. But don't go be one, something you don't want to do, and spend money to get the opportunity to do it, and then, you know, wake up 25 years later and go, crap, just lost my life there. No, go be what you want to be and take the education and the steps to be that. I'm glad he wants to improve himself. That's good.

But let's line that up with a house purchase and do it all with cash. The education has stepped to be that. I'm glad he wants to improve himself. That's good. But let's line that up with a house purchase and do it all with cash. This is The Dave Ramsey Show. Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. All big-time extraordinary things start from ordinary things. And they start from changing the ordinary habits in your day-to-day life. You see, changing these habits is the foundation of our teachings at the Smart Conferences.

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