The Ramsey Show - App - I Just Graduated Med School Debt Free and My Parents Gave Me $40K!

Episode Date: May 25, 2022

George Kamel discusses: How to convince your spouse to buy a brand-new car, Deciding between paying the house or investing, Learning how to budget after college, What to do with a large cash gift, What to do when a renovation goes over budget. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

I'm out. From Ramsey Network, this is The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to living well. I'm George Campbell, your host today. And the number to call is 888-825-5225. I'd love to help you take the right next step in your financial journey. Matt is kicking us off this hour in Denver, Colorado. Matt, welcome to the show. Thanks, George. How are you?

I'm doing great. How can I help? Well, my household has three vehicles. Two that have over 100,000 miles on it, and one has about 66,000 miles. One's about ready to die. The transmission's going out. I'd like to buy a new car, and my wife would like to buy a used car. Ah. Okay, what's forcing you to get a new car?

Well, nothing's forcing me to get a new car, but, you know, the one with the transmission problems, I'm thinking it could die on us at any time. Okay. So what's the argument with her saying, I want a used car and you want the new car? What's the contention? Well, she's a super saver. I'm a saver, and we've saved all our lives, and I would just like to, you know, I think a new car would be better because the used car prices are pretty inflated right now, and we have the money to do it.

What's your net worth? We have, well, over, I would say, close to $3 million in assets. Wow. Good for you guys. Thanks. So have you been following the Ramsey plan? Do you guys have a paid-for house in Baby Step 7? We do. Wonderful news. Well, I mean, you guys have scratched and clawed to get to this point.

I don't see the harm in you getting a new car at this point since you are millionaires. Does she just feel like it's an exorbitant amount to pay? What kind of car are you looking at? Well, I would love to get a Porsche or a Corvette, but I'll settle for a Nissan Pathfinder. You'll settle for the Pathfinder. What's your household income? About $200,000. Wonderful. And what are these cars worth currently, the three of them? The Pathfinder is about $50,000. Okay. And the other, you said you've got three cars total.

Yeah, we have three drivers. We need to have four. Okay. And so once this car goes, the transmission dies, do you still need three cars total? It would be nice. Okay, because you have multiple drivers in the family. Correct.

All right. Well, what is her hesitation? Now that you guys have $3 million in assets, you have a paid-for house, where is your money going currently? Are you guys having fun? Yeah, we travel quite a bit. I think she thinks it's exorbitant, and she'd rather get a used car. And this would be my car.

So I've been waiting for a while to get something like this. Well, maybe you take her for a test drive, and she gets excited about it. I don't know. Maybe she'll never be excited about whatever car you choose. But she doesn't have to drive it, right? Correct. Okay. Well, normally we tell people don't ever buy a new car unless you have a million-dollar net worth or higher because you can't take the hit on depreciating – on a depreciating asset like a car.

But you guys can take this hit. You make great money. We also say don't let your cars add up to – anything with a motor in it add up to more than half of your annual income. And so I think if you kind of show her these parameters and go, hey, we're living way below our means right now. We've worked really hard to get to this point. Now's the time to live like no one else. We lived like no one else. So later we could live like no one else. And that is what it looks like. It's okay to have something nice because it doesn't have us. We're paying cash. We're millionaires. This is why we do what we do.

Have you explained that to her? I will try. I mean, I'm of no use telling it to you. So it's really, you know her better than I do. So you've got to appeal to her senses and go, hey, listen, I know this feels like a lot, and this is more than we've ever spent on a vehicle. Outside of our home, this is probably the biggest purchase you've ever made, right? Pretty close.

Are you like an exorbitant spender all the time? Are you buying boats and toys constantly? No. Okay. I mean, I'm a saver. I mean, occasionally if I want to buy something, of course, after I ask her, I'll buy it. But we're both savers, but she is over the top savings. Well, I think she maybe needs to come your way a little bit and go, hey, we've saved.

We have plenty. We're going to be okay. Is it a security thing for her where she goes, we need to keep saving? This is unwise to spend this money on a car when it could go towards XYZ. Well, I think she's probably worried that, you know, maybe if she decides to quit her job, that, you know, that would bring her, you know, her income to probably, well, it'd be more than half of a hit. Does she want to quit? Are you guys close to retirement?

Well, I'm about eight to 10 years away. She could probably work another 20, but I think she'd like to quit. Well, it sounds like you'll be able to with all the assets you guys have built up. That's my intention as well. I think you paint her a picture of what the future looks like, what retirement looks like, and this car becomes a part of that vision of, hey, the next 10 years, here's what I'm hoping for us. What are you thinking? Here's when I want you to retire. What are you thinking?

And as part of that, I would love to get this for me. I've worked really hard. We've worked hard for this family, and it's okay for us to get this car and have nice things because we're not going into debt for it. We've worked real hard, sacrificed to become Baby Steps millionaires. Are you okay with this? And I think if you do it with that kind of humility and intention, I think she'll come around. Plus the test drive. That's what, you know, you get her in a test drive, I don't know. She may not be a car person. She's not a car person. She sees it as utilitarian and goes, you're going to spend, how much is this car going to cost, you think? $50,000.

Okay. That feels very reasonable. If you're paying cash, you make $200,000 and you have $3 million in assets. There are people who make $30,000 who have called in buying a $50,000 car and financing the whole thing. Yeah. So nothing about your situation feels frivolous or crazy. So you're on the right path.

It's just I don't know how that conversation is going to go with her. But showing her the numbers and showing her what a plan looks like for the future, giving her that security that this is not going to throw off your retirement plan doing this. I think that might be helpful for you. Thank you so much for the call. All right, folks, here's some sad news for you. Half of Americans over 65 will need long-term care. And the average cost of that care is $138,000. So you've got to plan for your long-term care needs now. And I talk to people all the time whose, quote, plan is to let Medicare pay for it. I've got news for you, though. Medicare won't pay for everything. That's why we recommend long-term care insurance for people age 60 and

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Call Zander at 800-356-4282 or visit zander.com. That's 800-356-4282 or zander.com. You're listening to The Ramsey Show. I'm George Camel, Ramsey personality. Open phones this hour, 888-825-5225. Donnie joins us up next in St. Louis. Donnie, welcome to the show. Hi, George. Hey.

Appreciate everything you guys do. My question is, I'm going to be debt-free in July. Awesome. And I will have my emergency fund fully funded September of next year. And at that point, I'll be saving up for a house. But the problem is I'll be 47 with no retirement. So I'm trying to figure out what's the max amount of time I need to give myself to save for the house before I bite the bullet and start contributing to retirement before it's too late. So you have zero in retirement currently.

Yeah. And you're renting. And you said you'll be debt-free in July, but the emergency fund won't be funded until next September 2023? Yeah. Why is it taking so long? I've been doing six months' worth of expenses for the emergency fund and also saving for $15,000 for a vehicle in case, because I don't want to ever have a car payment again either. So $15,000 for emergency fund, $15,000 for a vehicle in case because I don't want to ever have a car payment again either. So $15,000 for emergency fund, $15,000 for a vehicle.

What's your income? About $73,000. All right. Is that household income? Are you single? Yeah. Okay. So you're making $73,000.

You got nothing in retirement. You want to get a house, which I want you to be a homeowner eventually, and you're looking at you won't start saving for this house or investing for retirement until September 2023 at this rate. Yes. I think we need to do better than that. That's just too far away for me to be comfortable with. So the question is what can we do? We'll be able to save up $2440 a month.

That's how much you can save up per month? Yeah. Okay. That's just doing 40 hours that's without overtime so that's worst case scenario because i like to prepare for worse and hope for the best but yeah i mean the next if you want to do this and do it right the next few years are going to be tough and you're going to be working overtime for a while until we're in this house and we're in a good place where we're investing 15%. So I think you need to have a plan for both. I don't want you just investing and never get into a house because I want you to have a fixed expense.

I mean, you've seen how rent increases have been going lately. And over the next 10, 20 years, when you think about how rent's going to increase, I want you to have a fixed expense there and eventually have a paid-for house in retirement. Yeah. My worry is that if I saved up $2440 a month and saved up for a $200,000 house, that would put me at July of 2030. That's not okay. The problem is that with houses going up now, you know, there are $100,000 more than that now than there were a couple years ago.

Yeah. My worry is seven years from now when I'd have that saved up or seven years after emergency funds funded, you know, where they're going to be at. Well, I would do my best to speed up this process of getting to a fully funded emergency fund and maybe you go three months. Is your job pretty stable? Yes. So what if you split the difference and you went three or four months in the emergency fund, and then you got after 15% of your household income going to retirement and then saving up the down payment with any money that's left over? How long would it take you then to save up, let's say, 10% of a reasonable house in your area? Maybe it's a condo. Well, I'd want to do at least 20% to get rid of the PMI. Sure.

Well, right now at your age, that's where you're at. My original plan was to save up cash for a house originally. That's what I'd love to do because I'd love to never have debt again. Well, our original plans are out the window. Now we've got to look at

what the future looks like for Donnie at 47 who doesn't want to work until he's 70, I assume. And so I'm looking at, what do we do in the next 15 years to set you up for success so that you can retire with dignity, have money in the bank, and be in a home?

So that might look like, we're not paying cash, we're not able to put 20% down, well we can put 10% down, and eventually we'll get rid of that might look like we're not paying cash, we're not able to put 20% down. Well, we can put 10% down, and eventually we'll get rid of that PMI once we have enough equity. It's not going to be there forever. So I don't like that, but I also don't want you saving up for a house for eight years. Right.

That's not a good plan either. Yeah, I've heard you guys say it's like three to five years sometimes. Yeah, my goal for you is how do we get into a house in the next three years while saving 15% for retirement? And then I want you to reverse engineer it and go, okay, what kind of income would I need to have in order to do that? What do my expenses and budget need to look like in order to do that? Okay.

So that's what I'm doing if I'm in your shoes. Are you doing a budget currently? Yes. Okay. So that's what I'm doing if I'm in your shoes. Are you doing a budget currently? Yes. Okay. I'm going to gift you Ramsey Plus to help you along this journey. That includes every dollar premium, our budgeting tool, and Financial Peace University. I think you need a little fire under your belly to get you on this plan and do it much faster. Because an eight-year plan, I'm depressed thinking about it.

That's just too long. I mean, you're going to be in your late 50s finally getting into a house. So, let's find out what you can do to get that 73 to 83 to 93 to create that margin. And let's see what expenses we can cut and go bare bones and go, I want to be

in this house in three years. I want to be investing a year from now. And then you'll have some breathing room. And in 15 years, worst case, you'll have a paid for house. If you do a 15 year fixed rate mortgage, which puts you at what? 62? Now you're not going to be in the house for a few years. So let's call it 65. You're 65. Now you've got a paid-for house. You've been investing for 16, 17 years at that point. So now you have a good chunk of change in there, and you've reduced your expenses because you don't have a mortgage payment anymore. Right. It's going to be a slog to get there for the next few years, but I would have a plan for both. I don't want you just investing and not focusing on the house. I don't want you just focusing on the house and not investing.

So I want you to get investing as soon as possible and do whatever you can to get this debt rid of fast, get that emergency fund in place, and get at it, man. Rooting for you. May joins us up next in Austin, Texas. May, welcome to the show. Hey, George. Thanks for having me. Absolutely. How can I help? So I am about three weeks away from paying off my debt, but the timing coincides somewhat unexpectedly with needing to buy a car. So my question is, given the used car market and

my general unfamiliarity with it, I'm not sure what I can get with the amount or what to set aside from waiting to pay off my debt. And I was looking for some guidance on how much I should spend on a car. Okay. What's your income? 55K. All right. And you're three weeks away from being completely debt-free, and how much money do you have in the bank? Just my $1,000 emergency fund right now. Okay. So once you get this debt out of your life in a few weeks, then we can focus on stacking up some money for the car.

And obviously we've got to get that fully funded emergency fund in place, but this car sounds urgent. Yeah. What's driving the urgency? You don't have a car at all right now? Yeah, I've been borrowing a car and they're going to need it back. And you're using this car to get to work, I assume? Yeah. Okay. Is there public transportation options in your area? No, I commute pretty far. Okay. It's a far commute. Well, let's get you in a car ASAP for your income. I mean, obviously, we need to get a car right now. It's a far commute. Well, let's get you in a car ASAP for your income. I mean, obviously,

we need to get a car right now. It's not going to be the car. So let's paint a picture in our mind of what this car is. It's going to be nothing fancy. I probably would look at spending $5,000 in today's economy. That would be considered a beater. So that's what I would start looking at. I would probably jump on AutoTrader and all these different sites and see what kind of car I'd be looking at. And I would go for a Camry and a Kord, a Civic, something of that nature that's going to be reliable for you that can be high mileage and still get you from A to B safely. And I don't care what the color is, the more rusted, the better, because that'll give you more buying power to get a deal. All right. look on Facebook Marketplace. That could be a good way to go with a private sale. They'll be better at negotiating on that end. So that might be an option for you too. But right now I'd go into research mode as you pay off this debt and figure out what kind of car we're saving up for

and then stack cash as fast as you can. Can you get a side job? Can you do some side hustles in the meantime? Yeah, I just signed up to teach summer school. Awesome. That'll be coming up. Let's go, mate. Hey, this is temporary sacrifice for long-term gains. You'll get there. Congrats on debt freedom. Hope to get you in a car soon and get you on the path to building wealth. That's the goal.

Thank you so much for the call. This is The Ramsey Show. We'll see you next time. welcome back to the Ramsey show I'm Ramsey personality George Camel taking your calls today to help you with your life and your money the number is 888-825-5225 Colin joins us up next in Oklahoma City. Colin, welcome to the show. How are you doing, George? Great. How are you? I'm doing pretty good. I can't complain too bad. So I had a few questions for you. I recently just graduated college two weeks ago, actually. Congrats. I just started my first full-time job. Nice. So obviously with that,

I've seen a significant increase in my income. And I do have school student loan debt. And I'm wanting to know from you, from your perspective, going from a college student that obviously wasn't making that much money to having a significant increase in money, how should I budget that to where I can pay off my student loan

as quickly as possible? Well, the short answer is you're going to keep living like a college student until we get rid of this debt. So that's not the fun answer. The fun answer is you have a job two weeks out of college, man. That's amazing. Yes, sir. How much are you making? I just started out with 33K a year, and my student loans are 18K. And my problem is that I've never really budgeted, and I know that's obviously an issue. Like, I went through last month and added up everything, and I spent $502 in food last month. Whenever I feel like I could be down because I was eating out a lot and stuff.

100%. I did the same thing. When I first started budgeting, I was like, I'm a small man, and I'm spending $700 on food every month. Where is this going? So I love that you're paying attention to this stuff, especially at your age. How old are you? I'm 22. I actually just turned 22 yesterday. Awesome. Well, happy birthday. That's fantastic. Thank you. So when it comes to budgeting with this newly found income, the easiest way to do it is EveryDollar. So you can go download that app. I'm happy to gift you one year of Ramsey Plus, which includes the premium version of EveryDollar. So you can connect it to your bank. It'll track your transactions, and then you can drag them into the right categories.

So here's how you want to make your budget. You're going to first list out your income. So you probably get two paychecks a month, something like that? Yes, sir. So with those paychecks, we're going to put the income at the top, and then I want your income minus all of your expenses to equal zero, meaning we've given every single dollar coming in a job, no unemployed dollars. So when you do that, you list out all of your expenses for the month,

and this will take maybe three months to get the hang of and get it dialed in. You're obviously going to have your basic expenses, your food, utility, shelter, transportation. Are you renting right now? I'm actually not. I'm still living at home with my parents, but we're looking to move out with me and my girlfriend in September. Okay. Well, you don't have many expenses right now, so I would use that to your advantage while you're living at home to pay off these student loans as fast as possible. Do you have any other type of debt? I honestly don't. Nothing besides the 18K student loans. Okay. So your take-home pay, I assume, is going to be closer to $24,000, $25,000 a year after taxes? Yes, sir. Somewhere around there.

And is this a 40-hour-a-week job? Yes, sir. Okay. I would also look into some kind of side hustle, something you can do on top of that or overtime to increase your income, even if it's temporary, to get rid of this $18,000. Now, I don't know what you can do in Oklahoma City to do that. I'm sure there's lots of options. So I'd get creative. Find something that you can do that's at least $20 an hour in today's market to knock out these student loans. Yes, sir.

So when you make that budget, obviously I want you to be tracking it, not just make it. Once you make it, you've got to actually track it. And before you make any purchase, look at the budget and go, what does my budget say I can do? That's going to be your permission to spend. Alrighty, that's my problem is I honestly have a problem saying that One of the friends want to go out and eat Well, I think we need to set up Some boundaries with friends and go Hey, I want to hang out with you guys

Can we hang at your place tonight? Do we have to go out? Can we get some pizzas? You know, find ways where you can trim down Or you go, hey guys, I'm trying to pay off this debt This is a huge goal for me I'd love your support in that And that might mean I can't go out as much, or I go out and get a soda water before I go out. And they may think you're not cool, but I'm not really concerned with that. I'm more concerned about your financial

future and you winning with money. And that's hard to do at your age, especially with friends. So that's what I would be doing, man. I'd get on top of this thing, and I don't love the idea of girlfriend moving in with you. It gets real messy real quick. So I'd encourage you to find another way to live separately for now until you guys are in a more committed relationship moving towards marriage. So that's my hot take, but I'm going to gift you Ramsey Plus, a birthday gift partially and a graduation gift.

So it's a 2-4 special here. Austin's going to pick up. We'll gift that to you. And get plugged in with Every Dollar Premium. Get plugged in with the Financial Peace University videos, and you'll be on your way, man, to getting rid of this student loan debt. Elizabeth joins us up next in D.C. Elizabeth, welcome to the show.

Thank you so much, George, for having me. Absolutely. Honored to take your call. How can I help? Well, I guess I needed a little encouragement, kind of a push to spend some of this money that we've saved up. That's a fun problem to have. Yeah, right? I know, as I'm saying it, it is a good problem. So my husband and I are debt-free, and we just sold our house in Washington. Cool.

We're going to be moving. So we find ourselves needing a second car where we're going to be moving. And I really am having trouble pulling the trigger on spending some of this money we got from the sale of our house on purchasing a car. We're looking at around between $40,000 and $50,000 to buy the second car. And I just really don't like the idea of spending this, what I view as kind of the house funds for purchasing our next house on buying a car. So you feel like this money kind of has a name on it already and it's future down payment. Exactly.

How much profits are we talking from this house sale? It was $200,000. So netting $200,000. What's your household income? It's about $300,000. Woo! What do you guys do for a living? Lawyers. Lawyers. Okay, fantastic. And you're debt-free. Debt-free lawyers. We're debt-free. We're debt-free lawyers. That is rare. We're anomalies. Yes, it is rare. Wow. We don't talk

about it in mixed companies, for sure. That's amazing. Yeah, they get upset. So you have a fully funded emergency fund? We have a fully funded emergency fund, yes. And you're investing 15% into retirement? Yep, and we're doing kids' college as well. We have two kids. Rock stars. Okay, this is a good problem to have. What is the other car worth? The other car is a 10-year-old Prius. So, I don't know, maybe it's got about 90,000 miles, maybe $10,000.

Okay. So this is the nicest car you've ever owned as lawyers? We have never owned, the Prius was the nicest, a five-year-old Prius we bought. So this feels frivolous because you're like $50,000 on a car? Okay. Yeah, it feels very, very frivolous because you're like $50,000 on a car? Okay. Yeah, it feels very, very frivolous. I think that there's no problem in you buying a $50,000 car with your income, being debt-free, being where you're at in the baby steps. It's more of the emotional side of, oh my gosh, I want to throw up thinking about spending this much money while knowing we want to get into another house eventually.

So are you guys renting in your new city? Yes, we'll be renting. Okay. other house eventually. So are you guys renting in your new city? Yes, we'll be renting. And we can spend the next year saving up, you know, to replenish the house fund. That's my thinking. I would set a very specific goal for how much you want to save up, how long that's going to take, when you want to get into this house, how much down payment you want to throw in there. And that way you don't feel bad because you have a plan. It doesn't feel spontaneous and frivolous. You go, no, the plan is to spend $40,000 on a car, leaving us $160,000. We're going to pile on another $100,000 in the next year, giving us $260,000 to

put as a down payment. And now you go, okay, none of this feels frivolous. And if you do that with a 15-year fixed rate mortgage with at least 20% down, which you guys should easily be able to do with your income and timeline, and have that payment be no more than a quarter of your take-home pay, which making 300 grand, you've got some margin there. Yes, right. Yeah, I think the lack of a plan is probably what's making it feel frivolous. Yes. It's really just kind of in my head rather than down on paper. Exactly. And so I think once you put it on paper and you look at the numbers, you go, oh, this isn't ridiculous at all. This is a small piece of our world, of our net worth, of our income that we're throwing into this car.

And you know what? We've worked really hard. We're not financing a $50,000 car to impress people. We're doing it because we want it and we don't care what anyone thinks about it. And so that's what I would be doing. Get with your husband, go on a date night and start to make a plan for what your next move looks like to purchase this house. And as long as you're following those steps, you go get you that car. I'm excited for you guys. Way to go. This is The Ramsey Show. Thank you. Our scripture of the day, James 4, 3.

When you ask, you do not receive because you ask with wrong motives, that you may spend what you get on pleasures. William Arthur Ward once said, opportunities are like sunrises. If you wait too long, you miss them. Open phones this hour, 888-825-5225. I'm George Camel, your host this hour. Chris joins us up next in Los Angeles. Chris, welcome to The Ramsey Show. Hi, George. Hey. Thanks for having me. Yeah, absolutely. What's going on? Yeah, so the short of it is I just graduated medical school.

I'm 28 years old, and luckily I'm not carrying any debt anymore. Let's go. Yeah, thanks. Thank you. Appreciate that. But, yeah, so I'm about to start residency training in July, and my family has a graduation gift essentially is giving me $40,000 just to kind of get me started so I can hit the ground running. And I have about $10,000 of my own money saved, and I'm just calling just to see what your opinion is on what I can do with it to kind of maximize my savings or my investments and retirements,

anything like that, because I've been in school forever, and I'm kind of new to this whole financing. That's awesome, man. Thanks for joining our crazy crew here. So let me recap here. You just graduated med school completely debt-free, and you have $10,000 saved in the bank. Yes. You are a unicorn, my friend. How did you get through med school debt-free? No wrong answers. So it's a combination of a bunch of scholarships and family help. Awesome. Fantastic news, man. So you got $40,000 here, and you're going, what is my next goal?

How much are you making in residency? I'll be making $57,000 pre-tax, which I calculate out to be around $40,000 take-home per year. Oh, I love how nerdy you are. This makes me happy. Okay, so you got $40,000 take-home, and you have $40,000. That'll be a lump sum that you can do whatever you want with. What is your next goal for Chris? Are you going to be renting somewhere? Yes. So I will be renting. So I'm moving to a new city. So I'm renting for now. Not really

thinking about buying a house. That's my current salary, I guess. Sure. You don't need to rush into that. Do you have a car? Do you need a car? I will need a car because my car will be staying here with my family, and I'm going to need to use some of that $40,000 to help purchase a car. So what I would do, I think your next step would be a fully funded emergency fund. You don't quite know your expenses yet, but I imagine it's going to be a little more than $10,000 for three to six months of expenses. Actually, so funny enough is that for the last four years in med school, I've actually been tracking my expenses. As you mentioned, I'm very nerdy. So I literally have like a spreadsheet going with all of my expenses and everything. And I actually try to kind of get a better idea of how I budget it out.

And I actually spend about, or with rent and everything, and rent and food and everything, my monthly expense is around $2,400 to $2,700 per month. Awesome. Now, you're going to have a new rent that'll come into play, right? That's actually, that's $2,400 to $2,700

is actually including the new rent that I just signed a lease for. Okay, so that adds up to about $20,000 to $2,700, including the new rent that I just signed a lease for. Okay. So that adds up to about $16,000. So let's call it $15,000 as a fully funded emergency fund for you. Does that sound good? Yeah. So let's take five of the $40,000 you're getting and add it to your savings.

That becomes your emergency fund. We're not touching that unless it's an actual emergency, urgent, necessary, unexpected. So the rest of the $35,000 sounds like you need a car. Yes. So let's get a reasonable used car. We don't need anything fancy here. And if I'm you, I'm probably not spending more than $15,000 to do that. Does that sound reasonable?

Actually, yeah, that's perfect. I've actually been looking at used cars. I'm looking at around $10,000 to $15, 15 is kind of what I'm looking to spend on a car. Wonderful. So that then leaves you with 20 grand left. And I want you investing 15% of your income, your future income, into retirement. So I'm guessing residency, you have a retirement option there? 401K, something like that?

Yes. I believe my hospital is going to match 4%, I think is what I read. Awesome. So I would invest 15% if you've got good options there. If there's a Roth 401k option, I'm an even bigger fan of that. That'll use after-tax dollars. It'll grow tax-free. So invest 15% of your income. That's outside of the match. They're going to match 4%. You still invest 15% of your income there. And with that $20,000 sitting there in savings, I think your next goal would be to keep stacking up money

so that eventually you'll have a nice big down payment to put down on your first house. Okay. Okay, so 5K added to my 10K as a virtually fund. Correct. Around 15, nothing more than 15,000 for a nice used car. 15% up my moving forward income into a 401K, Roth 401K if I can. Yep.

And then the rest of it just kind of hold on to and kind of keep building it up until I can put a nice down payment. You nailed it, man. You're already my best friend today. I want you to be my doctor. This is the kind of guy you want in this profession. That's awesome, man. Your family really sets you up so well. I'm proud of your, you, you're a sharp young dude and your family definitely left a legacy. Thank you. I appreciate that. I guess one more question on that would be like, so in terms of kind of just keeping the money in

as like a savings, so would you recommend or not like kind of taking some of that money and starting to invest it into like mutual funds or ETFs or anything like that? If you want, if this is a longer time horizon, you're going, hey, I know for sure I'm not getting in a house in the next three to five years. I'm okay with you parking that in index funds, mutual funds to grow while you save up. But at this rate, and how long are you in residency for? Three years. Okay.

So I think it'd be, I'd be a cool goal personally to go, hey, at the end of residency, what if I had enough to put down on a house with my newly found income that you'll have, which I assume is going to be high six figures. Right. Yeah. So I love this plan. Maybe you wait a year. Once you have that new income, you'll be able to stack up a lot of money really fast. So in four years you, uh, you put that money down on a house and maybe you could put 40, 50% down. Who knows? Right. Okay. I love this, man. I'm proud of you, dude. I'm going to send you a copy of my favorite book that changed my life, The Total Money Makeover. Hang on. Austin's going to pick up and we will send you

a copy of that to encourage you along the journey. Grace joins us up next in Portland. Grace, welcome to the show. Hi, George. How are you? Doing great. How are you doing? I'm doing well. I guess I'll set the scene for you. Set the stage. Sounds good. So my husband and I bought a fixer-upper about six months ago, and we're moving out of state into the house. So we've been doing a full renovation on it,

and it became clear a few months ago that it was costing us a lot more than we thought it would. Essentially, Murphy's Law happened to us. But that's okay. We're debt-free besides the house, and in order to stay that way, a few months ago we decided to pause our retirement investments so that we could continue to cash flow this and make the house livable so we can get out of the apartment and go ahead and move in. We were really comfortable with that decision because we knew it was a temporary decision and the renovation should be done in about a month. But with all this talk of the stock market being down and knowing that this is kind of cleaning us out, so we'll have to rebuild our

emergency fund to make it fully funded. My question is, when do we start investing again? Do we do it immediately as soon as the renovation's over so that we can get back in the market? Oh, sorry, 25. Okay, so you've got plenty of time on your side, but I want you to get back to investing ASAP. I don't see why you can't get the emergency fund filled back up, then immediately get to investing 15%, and any extra money you have left over goes towards the renovation. And if it's going to take longer because of that, I'm okay with that. And if you go, hey, we got to call it quits

on this renovation because it's not even going to ROI. We're not going to see this appreciation in our sales price because we put 50 grand in and the house price didn't go up 50 grand. So we do have to finish it

to make it livable because we don't have anywhere else to live. Okay. But you're good with us keeping a pause on the investments until we rebuild our emergency fund? Just get the emergency fund built back up and don't let this renovation hold you back from doing that.

I'd rather you pause the renovation and get an emergency fund and be investing. That's my goal for you. I'm good with a slower pace on the rentals. That puts this hour of the Ramsey Show in the books. My thanks to all the folks in the booth. To america we'll be back with you in the meantime remember spend wisely save intentionally and give generously do you love a good day brand want to see the latest ramsey show videos going viral check out your favorite moments from the ramsey show on youtube. Go watch and subscribe to The Ramsey Show channel on YouTube.