The Ramsey Show - App - I'm Nervous to Pay Off My House in This Economy (Hour 2)

Episode Date: November 25, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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. You jump in. We'll talk about your life and your money. It's a free call at 888-825-5225 that's 888-825-5225 you jump in we will talk ben is with us in st paul minnesota to start off this hour hi ben happy thanksgiving to you eve thank You as well. So what are you thankful for? Uh, just the opportunity and responsibility that I've been given this year with my, uh, career. I, uh, switched,

switched my career path. I'm, uh, very thankful for that. Good for you. How can I help today? So I am 20 years old and I make about $65,000 a year. Wow. And I want to get into real estate investing and just like investing in general, but I don't know like where I should start and when, um, with my job, I am a retail manager and I could possibly get relocated at any time every year until I become a full store manager so i'm not really sure like when when i should even start you know okay well you've got a couple of limiting factors one is you don't have the money yet and two is uh you're unstable in terms of where you're going to

end up because you do not want to end up with rental properties in every city that you visited on your career ladder climb. That'll drive you nuts. Out-of-town landlording is how you get somebody to change their Harley oil in your living room. Not a good plan, okay? Yeah. So you got to stay on top of properties once you own them, and even if you have a property manager, you got to stay on top of the property manager. There is nothing that manages itself in the property world. So I love the idea that you want to get into real estate. I love real estate. I got a bunch of it myself.

When I was your age, I started buying and selling it the wrong way, and it caused me to go broke. You may have heard that story. But in your case, what I would tell you to do is let's just pile up a big old pile of cash while you get to this store manager level. My guess is you're going to be there within five years, aren't you? Yeah. Okay.

And then when you're settling on that city with that store level, by then you'll have enough money to pay cash for your first rental. And pay cash for them. And do it slower. Don't go by, you know, I would rather have one paid for than ten with mortgages. Okay. And don't let people say, well well the renters pay the payments those are people who've never had renters because renters don't always pay the payments because sometimes the big bad wolf comes along named pandemic and the renter loses his job and he huffs and he puffs and he doesn doesn't pay your mortgage. And so you got 10 houses with 10 payments on them then

because some genius told you the renters pay the payments. No, you pay the payments, dude. If the renters pay you, that's just gravy on the biscuit. And you'll learn some harsh lessons about collecting rent and about putting good people in properties that are renters because there are plenty of renters that are wonderful. I've been a renter, so I was wonderful. You can be a renter and be wonderful.

It's not impossible, but you're looking for the right ones. And some people are renting because their lack of character has screwed up their lives, and their lack of character is going to cause them to not pay your bill. So pay cash for the first one, pay cash for the second one. By the way, when those two don't have any payments, all that rent when it comes in just piles up and lets you buy the third one even quicker. And then the fourth one even quicker. And then you get a snowball rolling in your favor. And that's what's happened to me and a bunch of other people I've taught how to do this.

It requires more patience, though, than I had when I was 20, and I tried to get in a hurry. And the best way to get rich quick is get rich slow. That's the best way to do it. Jennifer is in Denver. Hi, Jennifer. Welcome to the Dave Ramsey Show. Hi.

Thanks for talking with me. Certainly. How can I help? I am 40 years old, and I make about $80,000 a year. I have no debt. I've always been really good with money. I'm a bit of a saver. And in the last couple years, I convinced myself to put another $500 towards my mortgage, which is at $135,000. And so now I'm just, like, I've done some calculating and I'm like, okay, well, I really should probably, you know, bump it up to

like $1,500 or $1,700 going towards it. And I'm nervous as I'll get out to do that. I don't, I don't know. I just, I feel like having more of a cushion is better, and I know that that's going to be five to seven years to really hit that goal. I'm nervous, I guess, maybe the climate that we have right now. I'm just nervous. Well, it is a wacky, weird world out there. There's no question about that. So how much money do you have saved?

I have about $30,000 in savings. How much is in your retirement? $400. Okay. And you're 40 years old? Yeah. You are a rock star. Well, thank you.

My God, girl, you killed it. Oh, thanks. Here's what helps me when I have the nerves, and everybody does. Here's what helps me. I run out worst-case scenarios, and if I can emotionally survive those worst-case scenarios, then that gets rid of my worries. Yeah.

Okay? Like even when I was getting foreclosed on when I was losing everything. What happens if that property gets foreclosed on? Well, they don't shoot you in the face. I'm still alive. Right. I just got foreclosed on. I mean, it's like, you know, but I had to run it out and emotionally accept that.

So let's just say, and there's really no evidence to this fact, but since we're dealing with a dark cloud that lives inside of people like me and you, let's just run that out a minute, okay? Let's say you pay down the mortgage halfway by paying $1,500 extra, and you lose your job. Yeah. What do you do for a living? I'm a tech writer. Mm. And you own a house in Denver, Colorado.

Yeah. Yeah, and what's the house worth now, today? Probably like $300,000. $300,000 or $200,000? $300,000. And you owe $135,000? Mm-hmm. Okay.

So you paid it down to $70,000, and you have a $300,000 house, and you lost your job. Yeah, I mean... You could use your $30 30 000 emergency fund for a little while oh by the way by then you've also got 600 000 in your 401k you could cash out a little bit of that if you had to because we don't tell people to cash out retirement except to avoid foreclosure or bankruptcy but if you're about to lose a house that had that kind of equity you'd use some of your 401k money and you'd still be okay. Okay. Yeah. You're not going to lose this house.

Right. You have $400,000. Yes. Now, that's not optimum, and it's not the best way to do it, and it's not what we would tell you to do. But before we burn down that equity, we would do it, right? Yeah, absolutely. So once I run out the worst-case scenarios i'm not even gonna have to do i mean worst case is you lose your job making 80 you spend 10 000

of your 30 until you get a new job making 100 that's probably what would really happen and never skip a beat that's probably your worst case scenario but if we went all the way to scorched earth worst case, you cash out enough of your 401K and pay off the other 70 grand, and you still got a half a million dollars, and now you got a paid four half a million dollar house, you're a millionaire. Oh, darn, I hate it when this happens.

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Don't miss out on this. Open phones at 888-825-5225. Justin is in Orlando. Hi, Justin. How are you? Hey, Dave. I'm doing okay. How are you?

Better than I deserve. What's up? Hey, man. Thank you so much for taking my call, by the way. So I am 24 years old, and I'm kind of in, I think, a more of like a career dilemma with also a self-awareness journey that I'm also going through right now. I aspire for growth every day. And really my main question is, so I'm on baby step three.

I'm not in any debt or anything like that. Everything's paid for. I'm not, I don't like, you know, I don't have a house though yet. Um, so I like always live below my means. Um, my total bill is a month, like $800 basically that's rent, like literally everything. Um, and basically the question is how much do I really need to successfully, I guess, fund my emergency fund, considering the fact that my bills are so well, if that makes any sense. What do you make? So I make about $1,500 to $1,600 a month after taxes, so not much. Okay.

Well, we usually say three to six times your expenses. In your case, your income is low enough. Let's just say three to six times that. So I wouldn't have under $5,000. That would be over three months of your income. And so let's say $5,000 to $10,000, somewhere in that range, is going to set you up pretty juicy in your situation. Yes.

And are you living at home? No, I'm actually renting by myself. How much is your rent? It's $550 a month. Okay. And you don't have any debt? No, sir. What are you driving? A beautiful 04 Hyundai Sonata.

Looks like the old Jaguar. Dude, you're a stud. You are on top of it. I'm so proud of you. Well done. You are not trying to keep up with the kardashians i mean you are doing a great job you're just doing your thing and living your life how much money you got saved so i have about so that's kind of thing man i have about three like three

thousand in my savings um and i just feel like i am like really behind. I know I'm super young. You're not behind. You're ahead. So real quick, I don't want to take too much more time. So I'm an aspiring musician. I've been working on my craft for about 10 years now since I was young. And I really want to get to the next step and really fund my dreams. And I guess my question would be like, so once i do finish my mercy fund maybe like five grand or so um you know do you think it's i mean obviously i'm probably going to do it regardless but i think that like at that point do you think it's okay to kind of put like 500 a month towards

like recording and like voting and all that sure okay and here's another thing go ahead and get a better day job your day job sucks sucks. I know, man. I'm trying to get two different jobs as well. I don't necessarily get three jobs. Let's just talk about moving your career up, because while you're an aspiring musician, it's okay to make some money. Believe me, I'm in Nashville. I hang out with a bunch of aspiring musicians,

and some that aren't even aspiring anymore. They're just musicians. And a lot of them have side gigs. And it's not unusual at all. And they're not ashamed of having worked six jobs to get into the business and worked a good day job to get into the business. So yeah, go ahead and do all that. Way to go, man. You're doing better than it feels like you are right now to you. Looking in from the outside, I see a pretty impressive picture. Kathleen is with us in Albany, New York.

Hi, Kathleen. Welcome to the Dave Ramsey Show. Thank you so much for taking my call. Sure. First, I just want to say I have a traumatic brain injury, so my speech is affected. I apologize. That's okay.

You don't need to apologize. What in the world happened to you, kiddo? Well, at 54 years old, I had an accidental fall down a flight of stairs. Oh, my Lord. We're not up to code, and it was a mess. And it took me out of the workforce right at the height of my career. I had finally, I'd just been in a job I tried all my life to get, work to get, when it happened. I still had one child at home, a single mom.

I burned through my 401k trying to cobra medical benefits and make copayments and stuff. I lived in a van for a year after my son graduated high school. I struggled really hard. I lived in a van for a year after my son graduated high school. I struggled really hard. Like I said, I emptied my 401K to keep things going during that time. Once he graduated high school, I sent him off to live with his dad. We're not off. We only live two blocks apart.

We're still very good friends. We co-parented well. We didn't have a bad divorce or anything. In fact, he's still a good friend. But my question now is, I mean, I'm in an apartment I can afford, kind of, but I have to move. I have, I just settled the personal injury lawsuit against the people that were responsible for this. It's in escrow right now. I'm told by my lawyers after medical bills and everything comes out, you have to repay what the insurance paid and stuff, that I'll be walking away with about $40,000.

Not a lot of money, I realize. And I have been watching you on YouTube and even on I make I received less than a thousand a month on SSDI by the time they take my Medicare stuff out and whatever and I've managed to use some of your principles on a much smaller scale but now I'm wondering how do I stretch that 40,000 I'm expecting to get in a few weeks? There's a few things I absolutely have to do. How old are you? I'll be 60 in a few weeks. And I'm unemployable with this brain injury and the things it's had. I was blind for a while, now I have implants. But they only work at a distance. I was blind for a while. Now I have implants. But they only work at a distance.

They don't work up close. Listen, number one, there's no such thing as a money stretcher. And so having a detailed plan of exactly what you're going to do with the 40 before it gets in your hand is the closest I know. That's what I'm hoping to do. That's the closest I know to having a money stretcher. So whatever these things are that you feel like you have to do, reassess do I really have to do them because, like you said, it's not much money.

Right. And it's not going to solve the problem of trying to live on less than $1,000. No, I realize that. So we've got another problem in addition to what to do with the $40,000, and it's what to do with your income. Now, here's what I want to challenge you on lovingly. You have been through hell. Yes, I wouldn't wish a brain injury on anyone.

I wouldn't wish what has happened to you in the last five years on anybody ever. This is horrible. However, the woman that I've talked to for the last two or three minutes is employable. You carried the conversation. You apologized up front for a speech problem. I didn't ever hear it. I think you've got more going on than maybe you feel like you've got going on because of the hell you've been through. So I just want to speak life into you and say, I think there's some way, some side gig, something self-employed that you can come up with that you can do to add a little income

to this and $500 a month to change your life, kiddo. So I'm going to try to find something to do entrepreneurially if I'm you. This is the Dave Ramsey Show. In the lobby of Ramsey Solutions on the debt-free stage, Nathan and Brianna are with us. Can only mean one thing, that they're debt-free. Way to go, you guys. Welcome. Thanks for having us. Absolutely. Where do you guys live?

Lafayette, Indiana. Oh, welcome to Nashville. Thank you. Very cool. And how much have you paid off? We paid off a little over $33,000. Good for you. How long did this take? About 17 months. Cool. And your range of income during that time? It started out just a little bit over 40 and it bumped up a little bit. She picked up a side gig and got us a little bit over 50. Cool. What was the side gig? I teach online. That's good. What do you teach? I teach ESL to kids in China.

Oh, wow. And I'm a stay-at-home mom. That's a good idea. Well done. Had you done English second language before? A little bit before we started our debt-free journey, yes. But you just said, I can make some money and help some people? I was found determined.

I opened up my schedule. I said, we're going to do this. I'm not quitting. And we did. There you go. I love it. What kind of debt was the $33,000? Just about everything. We had a car loan. We had student loans, credit cards, you name it.

We probably had it. Wow. Way to go. So you're kind of normal. Yeah. Normal and normal sucks. How long y'all been married? 10 years this year, actually. 10 years back in October. So after you've been bopping along eight eight and a half years you look up and something happened what changed everything goodness crying every night and uh i i had a mix-up in payroll at my job at the time um we had a christmas shutdown that uh forced everybody out and they didn't take out my vacation pay. So I get my check, and it's just for the holiday pay.

And I was like, okay, well, this isn't right. And then we started looking at the bank account. We're like, well, we can just make through this. We don't need that money. So why are we living so broke when we don't need that money? Let's just start getting rid of this and actually have an income. okay so just kind of a little squeeze and woke you up yeah okay and then what'd you do we started yeah we started the debt snowball right then and there and budgeting talking about grocery budgets i mean gas budgets yeah we just tightened everything down. We even ended up selling a house and getting into

a house with a mortgage payment of an eighth of our income instead of a quarter. Wow. Wow, that feels good. Yeah, that was awesome. Gives you a little wiggle room. Yeah. Okay, so how'd you get connected to us? My mom actually went through Financial Peace University, and she asked me to go along with her. And this was years back, probably about. We were dating. We weren't even married yet. So this was over 10 years ago. So I went with her and I was like all on board and stuff. And then, you know, trying to get her kind of on board a little bit. Yeah. And then, you know, like you said, you just took that little tight squeeze and then kind of got her on board and we, you know, like you said, you just took that little tight squeeze and then kind of got her on board. And we, you know, 100 mile an hour since.

Yeah. So really you were a financial peace baby. Your mama started this. Yeah. And then that kind of got woke up. And you went, so I don't remember all this stuff, but I know where the guy is and he can tell me how to do this. Yep. And got back on board.

And by then, Brianna, you're like,'re like okay okay I'm tired of this too crying every night doesn't cut it exactly we're getting out of this mess we had a new baby at the time and everything too I had just given birth to our second daughter and I was like this is terrible we cannot I just cried and cried I was like wait something has to change I can't live like this like I emotionally just can't do this okay so what was the craziest thing you did to get out of that oh goodness we did not eat out we told our friends this is what we're doing you did to get out of that? Oh, goodness. We did not eat out. We told our friends, this is what we're doing. You can be a part of it or not.

And that was basically it. I mean, we had a conversation. When you get mad enough, you don't care what your friends think. Exactly. Exactly. Yeah. And I explained to our eight-year-old, same thing. I'm like, this is what we're doing.

She was on board 100%. She didn't ask for things. She knew no vacations for a while. I mean, she 100% committed as well. Wow. Good for her. Oh knew no vacations for a while. I mean, she 100% committed as well. Wow. Good for her. Oh, yeah. That's pretty cool. Oh, yeah. So you were just, all of you just game on. Oh, for sure. Yeah, whole family. Game on. For sure. And 17 months later, 10 years worth of stupidities cleaned up. Exactly. Yep. Yeah. That's pretty cool, y'all. I know. That's pretty cool. I'm proud of you. Very well done. You did a great job.

Very good job. What do you tell people the key to getting out of debt is? Because you're professionals. It doesn't matter your income. It doesn't. I mean. Look at ours. I'm a sole provider.

I mean, she's got the side gig and everything. But, you know, for the most part, she's a stay-at-home mom. And, you know, if you just buckle down, you can do it. It doesn't matter what you make how much debt you're in you can do this what was the one debt that you paid off that you went i hate you people you will never be back in my house student loans yeah the student loans for sure sally freaking may hit the door it was my student loans too and i was like oh my gosh that was the dumbest thing i ever did i'm stay-at-at-home mom. I didn't use my degree.

I mean, it's just, yeah. What's your degree in? Medical assisting. I did work as one for a while, but then when I got pregnant, we were like, okay, I really need to be at home. And that's what we did. So, but yeah. Very good. Very cool.

Good for you guys. Thanks. Very, very well done. Who were your biggest cheerleaders? My eight-year-old. Yeah. And maybe your mom? She a little bit.

Okay. Even though she took you to FPU back in the day, huh? Yeah. And she does it and everything, but she kind of- Ish. Ish. Ish is it, yeah. But, you know-

Our church family was really involved with us. Okay. So, yeah. Church family. So, did you end up going through FPU again? We did a book read on the- Total My Makeover. Oh, yeah. So did you end up going through FPU again? We did a book read on the Total My Makeover. Oh, okay. That's good.

Okay. Way to go, guys. Most excellent. Very, very well done. And you brought the kiddos with you to do the debt-free scream. We did. We did. What are their names and ages?

Alexis is eight, and Elena is two. All right. They're ready. And the eight-year-old has been practicing her debt-free screen. Oh, for sure. All the way from Indiana. I love it. Very well done.

Very cool. We've got a copy of Chris Hogan's book for you, Everyday Millionaires. That is the next step in your story, next chapter in your story to be millionaires. And you can do that on any income. Yes, you can. Absolutely. You are on your way to be millionaires. And you can do that on any income. Yes, you can. Absolutely. You are on your way. Very well done.

Nathan, Brianna, Alexis, and Elena, count it down. $33,000 paid off in 17 months, making $40,000 up to $50,000 a year. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Oh, I love it!

Happy Thanksgiving. That is seriously fun right there. You hear the freedom? You can hear it. You can hear it in people's voices. They're free. What a great couple. what a great couple. What a great couple.

Man, they took control of their lives. I don't need to be crying every night. I don't need to be stressed out all the time. I don't need everything that I make to go to somebody else. If everything you make goes to somebody else, you don't get traction, and you know it. You feel like a dadgum rat in a wheel. Run, run, run, run, run, run, have a heart attack and die. What is that, your life's goal?

Come on, seriously. You want to keep Chrysler and Ford open? you want to keep mastercard and visa open is that your goal is that your only goal because that's the only thing some of you pay your money to you pay car payments you pay on that stupid bass boat that you bought because the other one wasn't fast enough to catch a bass what really you had to have a four-wheeler? For what? I don't mind bass boats and four-wheelers. I don't mind you getting some nice things. I mind it when the nice things get you.

And when you wake up like Nathan and Brianna did and you say, hey, everything we make is going to someone else. This crap's got to stop. When you say I've had it, that's when your life changes. You've got to reach the point you say, I am sick and tired of being sick and tired. I've had it. And when you say that, that's right about the time your life's getting ready to change because no one else is going to change your life. If you haven't noticed, the Democrats aren't going to fix your life.

Oh, some of you are stupid enough to believe they are. If you haven't noticed, the Republicans aren't going to fix your life. Oh, some of you are stupid enough to believe they are. If you haven't noticed, the Republicans aren't going to fix your life. Some of you are stupid enough to believe they are. None of those people have ever sent me any money. Best thing they ever did in my life, any of them, is stay out of my dadgum way. It's up to you. When you say, I've had it, I'm going to take control of my destiny. I'm going to pay the price to win.

I'm going to sacrifice to hit the ball out of the park. I'm going to do whatever metaphor you want to lay out in front of me to get this done. I am sick of this. That's when your life changes. But it doesn't change when Dave Ramsey tells you something. It changes when you decide to apply God's ways of handling money, Grandma's ways of handling money to your life. And guess what?

Both of them are smarter than you. This is The Dave Ramsey Show. Thank you for joining us, America. Common sense for your dollars and cents. This is The Dave Ramsey Show. Open phones at 888-825-5225. Mike is with us in Philadelphia. Hey, Mike, welcome to The Dave Ramsey Show. Hi, Dave.

Happy Thanksgiving, and thank you for taking my call. It's an honor to speak with you. You too, sir. How can I help? Happy Thanksgiving to you. Thank you. So I have a question. My wife and I are currently on Baby Steps 4, 5, and 6, and my question is a two-parter kind of centered around Baby Step 4.

About a year ago, we were able to switch into Roth 401Ks at work. Great. And my question is, we're currently contributing to that, and then we'll also have a Roth IRA that we're contributing to separately. Good. Should we be contributing all 15% to the Roth 401k, or should we be splitting it? And, you know, should each one of us be contributing 15, or is it 15 of the combined household income? 15 of the combined household income? $15,000 of the combined household income.

Okay. Take that figure, and the way you distribute it is, then, among the different plans, is regardless of whose name is on them, you take a match first. Do you have a match at your 401k? Yes. Okay, up to the match, we're going to do that. Does she have a match at her 401k yes okay up to the match we're going to do that does she have a match at her 401k yes regardless of if it's roth or not take it okay those two figures both subtracted from the

15 figure then spill over into the next step which is roth and you're probably going to be at enough Roth. Does she have a Roth 401k, too? Yes. Okay. Now, beyond the match, do your 401ks have really good mutual fund options in them that have good track records? Well, I would actually have to compare them to what the Roth IRAs have to see which is better. Okay. them to what the to their Roth IRAs have to see which is better okay but I mean if they're if

they're okay or they're somewhat equal just for convenience sake I'm gonna go so it's kind of rock paper scissors you do match first then Roth second and then traditional you're not going to get to traditional probably right because you both have Roth 401ks you can max out and you can max out Roth individuals. And the only reason you would choose one over the other is whichever one has the better mutual fund options in it. Obviously, the individuals have almost infinite options, 8,000 mutual funds to choose from. But if you've got a good family of funds with a good selection across the four types inside your 401ks, you may want to just do all of that.

Would that get you to 15%? It might. What's your household income? It's a little over $160,000. Yeah, it probably will get you there. But it's okay to do either the 401k non-match or the individual Roth. That's the same thing wherever the best funds are, but the match you take before you do anything.

Yeah, the way we've been doing up to this point was, at least for this year, was we've been taking the match, and then we've been putting the maximum maximum in the six thousand for each of us into a loss ira and then the balance putting into the roth 401k that's okay too for each of us there's nothing wrong with that because because you can i know you can get good selections in your roth ira and i don't know what the selections are in your 401k but between those three things the match the 401k, and the Roth IRA, I think if you max out all three of those, I think you're going to be over 15%, probably.

I don't know what the match is, and I don't know whose income is where and all that, so I can't do the exact math in my head, but it's going to be pretty close to that. If your income was another $100,000 higher, you would have maxed out all of those and then be looking for something else uh to get there because you'd be you'd run out with the caps on the 401ks and the caps on the roths but um you're okay you're doing great and so very good good job you're going to be in great shape later man you are on your way dale is with us dale's in in Gainesville, Florida. Hi, Dale. What's up? Hi. Thanks for having me, Dave.

So we currently have no debt. Our family is deeding us some land, family land that we will inherit eventually. They're deeding us about five acres, but eventually we'll, once, you know, our grandfather passes away, we'll get the whole 80 acres. Um, so we're not really sure if we're going to end up here in a long-term or not. Um, my husband just got a job, praise the Lord. Um, and we are trying to figure out in our situation because we don't have anything really saved up at this point, should we rent or should we buy a used mobile home and put it on the property? And then that way, if we're not here, it wasn't a big investment or what we should really do in this situation. Yeah.

So what is your income now that he's gotten a job? He's making $44 a year. Okay. And you have no money saved. How much debt do you have? No debt. Good. Okay.

Now, what price range of mobile home are you considering? Well, something new. We're hoping to find. We've been looking and been finding things under $50,000. Of course, those need a little bit of work here and there, but probably closer to the $25,000 side is what we're hoping to get for. Don't do that. Okay.

Because you're going to turn $25,000 into $5,000. Okay, and that's what I kept thinking, but I'm like, you know, I'm a Christian, and so I'm just thinking I need to submit to my husband, and I need to, you know. You know, supporting your husband is one thing. Supporting your husband while he's doing something stupid is not supporting him. Okay. If he's doing cocaine, you're not supposed to support him. Of course, yes.

And if you're doing something stupid with money, it's the equivalent of that, which buying a $25,000 mobile home, it's going to be worth five in eight years. Okay. Because it's going to be worth five in eight years. Okay. Because it's a car you sleep in. It goes down in value like a rock. No, yeah, I totally agree. Yeah, so what I would do is rent and let's save up a good, strong down payment in order to talk about building a really nice starter home on this property sometime in the next five years. Okay. And there's no shame in that

and that's the other thing is where um so well never mind i won't go there um but yeah if let me tell you let me tell you how i have heard sometimes people change this story and do it differently and i might be okay with that and i'm not suggesting this i'm just telling you that this is if you're going to waste the money waste the fewest amount of dollars right we don't want to waste twenty five thousand dollars but if we're going to waste some money i have heard people get a three thousand dollar mobile home and say okay i'm just going to have that thing hauled to the junkyard when this is over i'm not even going to bother with it but we can live like that for a couple of years while we save what would have been rent and that helps us get into building our first home quicker

but that's a commitment that's a lifestyle commitment not everyone's willing to make and i'm okay with it either way okay but i've known people that did that and they you know they saved every dollar and they didn't pay any rent and but they didn't burn down 25 000 they burned down 3 000 so if we could realistically buy a mobile a used mobile home for you can but it's a piece of crap right right right no i'm and i think i'm okay with that um because in the long term in five years, we're going to be hopefully having a house that's paid off. I was thinking buying a mobile home that we could pay off.

I don't think we can pay $25,000 off in a year. No, you can't. Probably something cheaper. The bottom line is how much are you willing to burn down to hit this goal just for the sake of lifestyle? And if you're going to buy a $25,000, I would tell you to rent. If you're going to buy a $25,000, I would tell you to rent. If you're going to buy a $3,000, I'd tell you to maybe do it. But that's a lifestyle decision because there's, as you know,

a dramatic difference between what you're living in at $25,000 versus $3,000. Oh, yeah, yeah. I mean, a $3,000 mobile home is a piece of crap. I mean, it really is. It's just above camping, you know? And so it's okay if you do that, and I'm not talking down to anybody that's in one. That's not the point. The point is you're making a decision.

You're sacrificing to win. Are we going to sacrifice in rent to win? Are we going to sacrifice $3,000 to win? Are we going to sacrifice $25,000 to win? And how are we going to be living while we're doing this with kids running around and all that kind of stuff? So, you know, sometimes people build a barn with a couple of bedrooms in it and live in that. And then they build their house. Sometimes when they've got land like that.

Those are kinds of options that you can do with cash. And that way the barn actually holds its value where mobile homes don't. Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit daveramsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.