The Ramsey Show - App - Input on Paying Quarterly Taxes on a Side Business (Hour 1)

Episode Date: April 15, 2019

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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 am Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. Robert starts off this hour in Miami. Hey, Robert, welcome to the Dave Ramsey Show. Thank you, Dave. It's a pleasure to be on. I really appreciate you taking my call.

Well, thank you, sir. How can we help? My wife and I, we're currently in open enrollment. And I'm a big believer in your teachings as far as the HSA plan. She wants to do the PPO. Now, my thing is this. Whether you're in an HSA or a PPO, you have to hit the deductible before they cover 100%. More specifically, I mean, you need to get to, I guess, the max out-of-pocket. Now, for the PPO, the deductible is lower. For the HSA,

the deductible is a little higher, but the max out-of-pocket is a little bit lower for the HSA. Whether you go with the HSA or the PPO, you still have to pay that deductible and get to the max out-of-pocket level. Now, my wife and I recently had a baby, and they paid really $130,000 worth of bills, but we didn't hit the max out-of-pocket. And now she's on this, she has this concept in her mind that we still need to go with the PPO because the insurance recently just paid so much for our child. But I don't understand how they did that if we didn't hit the max out of pocket. And I can't get her to switch to the HSA, which I know is going to give us tax benefits at the end of the year, based on the fact what just happened with our child.

Okay. So she doesn't want to switch because she feels like she owes them money since they just paid claims? No, no, no. She feels that it's more beneficial. Well, I don't really care how you feel. This is a math thing. You don't need feelings. You just need a calculator.

Yeah. And so it's a calculator. Both of them will cover your family. And the only question is when you run out different scenarios, which one's going to cost your family more? Now, here are the two things that you can look at. And this is the way the math will work. If your family is very healthy and doesn't go to the doctor much at all

then the hsa is a lower premium higher deductible and you're not going to doctor much at all and so it's going to be cheaper okay the hsa is also going to be cheaper because it has a very very low out of pocket once you make the deductible, most of them cover 100%. Does yours? I think it's 10% coinsurance. Okay. Up until what? Do you know what your stop loss is?

Up until the max out-of-pocket is $7,300 on the HSA. The deductible is $4,000. Oh, okay. As opposed to the PPO, where the deductible is. Yeah, the max out to the PPO where the deductible is. Yeah, the max out-of-pocket would be a half million usually. Half a million? Yeah, it could be. I mean, what's your max out-of-pocket on your PPO?

On the PPO, max out-of-pocket is $9,000. Okay, so there's a $2,000 difference. So just run the scenarios out. Under what circumstances, and is that 80-20 on the PPO? On the PPO, I think, yeah, I'm pretty sure it's 80-20, yeah. Okay, so $20,000 would get you of expenses, would make the HSA, anything above $20,000 would be cheaper. Anything under the deductibles would be cheaper.

The only time the PPO is going to be the best deal mathematically, and you can run these numbers out, but this is the way it will work, is where, see, the $2,000 difference with your max out-of-pocket, you've got to make that up at 10% or 20%, depending on whether it's PPO or HSA. You've got to run those both out, okay? And that takes $20,000 to do that, to get that covered, because you've got a 10% difference, so you get $2,000 on 10%. So that's $20,000.

Okay, so anything above $20,000, the HSA is going to be cheaper. Anything under $20,000 down to the deductible, the PPO is going to be cheaper. So where are you going to have the most of your events happen? Between 5,000 and 20,000, above 20,000, or less than 20,000. If you have a sick child that's got chronic stuff, and you're going to be spending a bunch of time in the hospital, the HSA is going to be cheaper, because everything after 20,000, you're making money on the HSA, because it's at 10% rather than at 20% on the copay.

Right. You see how I did that? Right, right. Yeah. So it's a math% rather than at 20 on the co-pay. Right. You see how I did that? Right, right. So it's a math thing. Yeah, I do. Like, I've got a friend who, no, it's a math thing. If she refuses to discuss this based on math, then we can't have a discussion about it. We have a different issue.

Now we have a marriage issue. Right, right, right. Okay? Because it's not a feeling thing. Because both of you want your family to be covered the only question is mathematically which is the cheaper okay i have a friend who has a child with chronic illness his hsa has saved him a bazillion dollars because he has a 5100 dollar deductible and 100 is paid after that he meets his deductible the first month of every year. And so if you're not sick at all or you're sick all the time, the HSA is cheaper.

It's if you're in the middle that the PPO is cheaper. If you just want to go to the doctor and have a $20 copay and go to the doctor all the time and you're going to live over at the pediatrician three times a month and you pay the $20 copay, the PPO is probably going to come out better. Right. But if, like, we hardly, we, knock on wood, Ramseys have not spent a lot of time in hospitals or at doctors. We've been really, really blessed with health. And so the HSA has saved me a bazillion dollars because the premium is lower on it than it

is on the PPO. How much lower is your premium? See, the premium is $174 on the PPO, but what I would want to do is to just put the wife's mind at ease. I would put that same $174 every pay period into the HSA so we can eventually get up to the point where we have the max deductible, I mean the max out-of-pocket in the HSA. That's a different discussion. That's a different discussion. That's a different discussion.

All we're talking about here is the insurance portion, not the savings portion. So the HSA, the premium is how much? It's whatever we want. No, no, no, no. With nothing going into savings, what is the health insurance premium? Like I said, we're switching, but this year went on my single HSA, I put in $44 every pay period. We're switching to a family because we just had a kid. Listen, you can't compare the savings element.

The savings element is an independent variable mathematically. The savings element has nothing to do with it. So you've got to find out your premium. If the premium is $175 on one and the premium is 100 on the other you have a 75 savings a month and that's what you're and then you can offset that against the other now you're if your deductible is a little bit higher you yes you can use the savings portion of the hsa and yes you do get a tax deduction and yes those do add benefits to the math but really it's an independent discussion because her concern right now because she's got a sick baby,

is do we have the money, do we have an insurance coverage that's going to take care of my family? And do we have it most efficiently mathematically? And so I don't need to appease her. I'm not trying to appease her. I want to have an honest, intellectual, mathematical discussion, insurance to insurance. And then she says, okay, I see that, but I sure would feel better

if we throw another $100 into the HSA. Cool, we'll do that to appease her. But we've got to make the decision as a family based on math because that's all this is. There's not one of these that's better quality than the other. Both of them are going to get you good doctors. Both of them are going to take care of your family. This is the Dave than the other. Both of them are going to get you good doctors. Both of them are going to take care of your family. This is the Dave Ramsey Show.

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We're so confident you'll love Pure Talk USA that we invite you to try our service risk-free. Visit puretalkusa.com or call 844-862-3677. Enter promo code SAVEDAVE and receive 50% off your first month. That's puretalkusa.com. Patricia, well, Douglas rather, is with us, head fake, in Portland, Oregon. Hey, Douglas, how are you? Hey, Dave, I'm doing pretty good. How are you? Better than I deserve. What's up? Yeah, so my wife and I have been saving up for a down payment on a house around next year.

As part of our gazelle intensity, I picked up a side hustle at the beginning of the year. And this is turning out to be a bit more lucrative than I originally expected. So what I've been doing up until this point has been stocking away about 40% of what I make to pay in tax season of next year. However, just about last week, I learned that that's money that should be paid quarterly over the course of this year. So I guess I'm wondering am I really digging myself a hole by saving it and paying it in tax season next year or should I be paying that quarterly this year or can I deduct that from my normal salary to paychecks and do it that way

so I'm kind of looking for your input there yeah okay good question how much have you made? so far in the first three months, about $8,000. Good for you. I'm projecting probably around between $20,000 and $30,000. Nice. And what's your household income before you started this?

About $150,000. Okay, all right. Well, it doesn't hurt to set aside 40%. That's probably more than you need. Probably 30% will do it but um and check with you you need to check with a tax professional because i'm not very good at taxes um but i will tell you what used to be true and i think it's still true okay but double check me say i promise i promise okay because dave's wrong half the time you don't I promise. quarterlies, but it's not necessary if you are doing proper withholding and you're not

getting yourself in a mess, meaning you're setting the money aside so you're not getting yourself in a mess voluntarily, and you could just hold that money in the account until next year and not have penalties. The second year that you do it, if you don't do quarterlies, you will be penalized. Now, again, that used to be the rule. I think it still is, but you should double-check me on that. I made you promise you would. So just click on ELP at DaveRamsey.com for one of our tax preparers,

and they're a little more relaxed after today, and their work is all done for the year, and they can answer that question for you as to whether you need to do this to avoid a penalty. You can choose to do it either way. There's no reason not to, except that you're not making that little bit of interest you would make on that money between now and the time you file your taxes next year. But be sure you're setting the money aside. What are you doing that's making that kind of money?

So I look for security vulnerabilities in various websites and then get paid by the bug, so kind of like white hat hacking. Yeah, good for you. That's a great thing to do. So obviously you've got knowledge in that area, and so it makes us a great side gig. Right, right. I'm fortunate in that it's also what I do professionally,

so I can kind of bleed that over into a side hustle as well. Yeah, that's wonderful. And as you know, that whole marketplace is red hot right now, and everyone needs help with that. So you're in a really, really good position. Well, keep working it, man. But check with a tax pro to be sure. I think you're okay to just hoard the money, set aside the money,

the 40%, 30%, whatever you do between now and tax time of next year, and not file quarter lease the following year. You'll have to file quarter lease, but double-check Dave's information. Patrick is on the line in Ontario, Canada. Patricia. Hi, Patricia. How are you? Hi, Dave.

I'm good. Thank you so much for taking my call. Sure. What's up? I'm a new listener, so I just wanted to ask you a question. I just got accepted into graduate school after trying for about five years now. And I'm a new listener, and I'm just wondering if you would recommend postponing it because I'm getting a little bit older and I'm thinking about having a baby. But this is something I really would want

to do in the future, so I'm a little bit torn. What are you studying? So I'd like to be a mental health counselor to do psychotherapy. Okay. And you have your undergrad, but you don't have your master's? Exactly. And master's is required in your area to get a license? Yes.

That's what it is in most of the states, too. Okay, cool. All right, and so what does it cost? So it costs about $15,000 over about... How long will it take you? Sorry? You were getting ready to tell me. How long will it take you?

Oh, yeah, about a year and a half. Okay, and you have the $15,000. No, so that's the other thing. We are thinking about cash flowing it so i've been working a lot right now um i just finished my undergrad i've been working you know various jobs teaching to save up for but we do also have student loan debt um both of our undergrad degrees okay and what's your household income today so our our household income is about $65,000. Okay.

All right. Well, number one, I don't ever tell you. You said you're new to us. I tell people not to do anything unless you pay for it. So you've got to cash flow it. Or I would tell you don't do it until you can cash flow it. That's one guideline. But that wasn't the guideline you asked me about.

You asked me about the guideline of you were getting you're thinking about having children you're getting older and you didn't know which one to do first and all that kind of stuff um i don't know why you can't do both at the same time i guess my issue is that um me and my husband are alone we're um first generation in this country, so I really don't know how I would be able to put them in daycare and then still go to school and then potentially work after. I could probably wait a year to finish the school. You said you'd be done in 18 months. I guess I'm concerned about not using the degree for a little while.

I feel guilty about that. I see. Okay. So you're not planning on working until the child is what age? Probably about three. Okay. And so it would be easy enough to delay this three to five years and not really harm your plan. Yeah, I guess it's because I tried so hard to get in.

No, I'm just saying your plan. Oh, right. Not their plan. You know, assuming you could get into a school again, and I don't know why it took five years to get accepted for a master's in psychology or in counseling, but anyway, for a $15,000 one-and-a-half-year program, I don't know. It's up to you guys. I think you can do it at the same time.

As long as you cash flow everything we're talking about, babies and classes and everything, even if you don't immediately go to work, I don't think that's a sin. You paid for it, and you put it in your back pocket, and you'll use it when you get ready to use it, right? You'll pass your boards at that point.'s not it's not the end of the world as long as you pay for it um and as long as it doesn't offset everything so um so if you went through right now i mean possibly by the time um you come out with your masters you would have a baby and uh possibly you would just let that master sit there like a real pretty thing on your desk for about three years and then you would go get your license and there like a real pretty thing on your desk for about three years,

and then you would go get your license. And that's not the end of the world as long as you pay cash for it. So all of that works fine. But don't use the, it was hard to get in as an excuse to go borrow 15 grand. You guys can cash flow this, work extra, and just pay your way through. That's what I would do. Open phones at 888-825-5225 and is on twitter when i get to baby step six to pay off the house how do i do that

extra principal each month save a pile of cash and throw it i'm not there yet but hope to be soon great and way to go congratulations once a month is all you need to do more than once a month doesn't help but each month interest is reset on a home mortgage a traditional home mortgage fannie may fha va so on now if you have some kind of weird home mortgage it might not be but once a month if you do it twice a month it doesn't do any good at all. It doesn't change the interest paid at all. Interest is reset once a month by your APR divided by 12 that month. So once a month is what I would do. And if you have a troubling mortgage company, because probably half of them are completely incompetent in how they deal with stuff,

they're just a complete pain in the butt, you might want to send a separate check and a separate envelope that has big words across it. Principal only, stupid. And put your account number on there. Principal only, so that they get it right. Sometimes if you add it to your check, you can do that. Sometimes if they have a website, you can say have a principal slot on there.

Principal only slot. Anthony and Janilka are with us. Hey, guys, how are you? Well, I have to push the button, and then I can talk to you. In Dallas, Texas, Anthony and Janilka are with us. Hey, guys, how are you? Hi. Good. Welcome, welcome.

I see on my screen you're debt-free. Congratulations. How much have you paid off? We paid off $114,151. Awesome. How long did this take? 23 months. And your range of income during that time? It was $120,000 to $156,000, which just included our raises and multiple side hustles that we took on. Phenomenal. What do y'all do for a living? So I'm a therapist, and I work at a managed care company, and I'm a director at an IT

firm. Cool. What was the most lucrative side hustle you did? Let's see. It's between Toro and, I think, Equinox. I have no idea what those things are. So Toro is a peer-to-peer car rental service. So I got a new car.

We kind of rented it out to people. That was probably the most passive income. And Equinox is just a high-end gym in Dallas that we both actually work for. Oh, okay. Okay. Cool. Very good. Way to go, guys.

So what kind of debt was the $114,000? So we had about $86,000 with school loans, $24,000 with the car, and then $4,000 in credit card debt. Did you sell anything big? No, not at all. Just paid the car off and kept it. What kind of car is it? So the car is a 2014 Infiniti Q50 Hybrid. Okay. All right.

Very good. Good for you guys. Well, congratulations. How long have you guys been married? Three years. Three years in May, actually. Okay. So a year after marriage, something lit the fuse and you guys took off.

What happened? So, go ahead, Janoke. I'll let you start so i had a new year's goal of traveling more and saving more which you know that kind of doesn't make sense incompatible goals yeah so anthony kind of interjected and kind of went from there so yeah once she had that goal i said let's kind of sit down and figure out what our long-term goals are. And at that point, you know, I mentioned your name. A couple years ago, her father actually gave us a Dave Ramsey book.

He gave it to her. The book sat down, and I actually picked it back up. And I was like, this Dave Ramsey guy is pretty cool. Let's look into it. So that's kind of how it started. Yeah, and so he would listen to you probably eight hours a day, nonstop in the gym, driving. Oh, gross. Yeah, and I was like, eh.

And then finally, for me to say, okay, I'm on board, I gave him, for Valentine's Day, the gift of Financial Peace University. So we did that together. If he promises to try out at least one other podcast, yeah. Wow. Exactly. I'm me, and I don't listen to me eight hours a day. Listen to the stories were extremely empowering and just inspirational. So I would tell her, like, this person's doing it, and these people are doing it,

and they make less than us, and they have kids. It's possible. So that's kind of where we started at. It does help to hear other real people doing it. It takes it from being theory. So all kidding aside, that is a great accountability tool. So you went to Financial Peace University. How early in the 23 months did you attend the class?

Oh, pretty early. So we started January, gave them the gift Valentine's Day, February. So I think the class started about April. Oh, okay. About the fourth, yeah, about the fourth, fifth month into it. And by that time, we were like knee-deep into it because the class was done, and then we actually went down to San Antonio and went to the Smart Money Conference. She kind of took me down there, so she was all in at that point.

Ah, it gets fun now. You guys are going. Cool. So congratulations. We're very proud of you guys. Very well done. What do you tell people the key to getting out of debt is? So I usually turn to budgeting.

I just feel like it really helps us to see where our money is going. That's my biggest thing. And for me, it would probably be just making sure that you're just being accountable to what you want to do in life. It was more than just us, you know, getting out of debt. It was like, what happens when we have kids and they're going to come into debt and we want to buy a house. We have all these major goals but most of our money is actually going out the door. Just remaining accountable to each

other was really huge. Yeah, you guys were smart in that you really, both of you, started with your why. Exactly. Anthony, you start setting the big goals and she really laid the travel. I want to travel and I want to invest so I can travel more and out there. And it's a great plan.

So we're seeing some of the pictures flash across YouTube. So Cabo was on your list, huh? Yep. Yeah, and we were able to do that once we paid everything off last year. We went this year in January. Very cool. Good for you guys. One of the world's most recognizable rock features there.

So very cool. Congratulations, guys. Who was your biggest cheerleaders outside the two of you? So the cheerleaders would be our family members. So her mom was huge in supporting us. As well as her father. Her father gave us the book really early on. So her mom, Layla, and her father, Javier.

And then our family, we had a family support circle. So we prayed, you know, we prayed once a month. So we all come together. They knew our goals, and they always kept us in their prayers. We did that. And then we have friends who are now, we told our story all over the Internet. So we started telling our story more. So we started helping other people get out of debt.

So we had a lot of people that were actually supporters of what we were doing. Very cool. Well, well done. Very well done. Proud of you. We've got a copy of Chris Hogan's book for you, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth, How You Can Too. That's your next chapter.

You're going to be millionaires. You're on your way, aren't you? Yes. Thank you. Way to go. And you'll be able to be outrageously generous as you go along now well done all right it's anthony and janilka in dallas texas 114 000 paid off in 23 months making 120 to 156 count it down let's hear a debt-free scream three two one way to go you guys very well done boom just like that excellent job

chris is in los angeles hi chris welcome to the dave ramsey show hi dave thank you so much for taking my call how are you better than i deserve what's up Chris is in Los Angeles. Hi, Chris. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much for taking my call. How are you? Better than I deserve. What's up? So, my wife and I are working through Baby Step 2.

We're down to her student loans and $10,000 worth of my student loans. The cars are gone or paid off. The credit cards are non-existent. And we're expecting our first kid in the next two months. Touchdown, man. Well done. Right. Yes, they're very excited. It's going to be a girl really excited about it.

So we've started following your plan and putting that, we're putting towards the debt and the student loans, we put it aside, so just in case anything happens. Yep. And as long as everything is good to go, we'll throw everything at the student loans and at least get the lower of ours gone by the end of the year, hopefully. Sounds like you've got the plan dialed in. Well done.

I listen every day. So my question is, I live in California, and I drive for UPS, and I'm a union member, Teamster Union. And the way our pension is set up is there's three different pensions throughout the country, the West Coast, Central, and Eastern. I guess many years ago, the Central Teamster plan, they mismanaged a bunch of stuff, and the retirement pension is pretty much going to almost not be there

by the time I get to tap into it if I decide I want to move that way. We want to move maybe to Texas where everything's a lot cheaper. And I'm sure you know when you set foot somewhere and you feel like you're at home, you kind of want to get there. And that's how we feel in Texas every time. So my question is, should I not worry about it? I've got another 20 years to work with this company. Should I not worry about this pension right now and go that way, buy the house I want to buy for a fraction of California prices and start saving that money and investing correctly? Or should I try to stay within

the pension plan? Because there's like 13 other states that we can go to and try to work with that. Or should we go where we can want to go and not worry about the pension? Okay. The pension plan that you currently have, are you contributing? and try to work with that or should we go where we can't want to go and not worry about the pension. Okay. The pension plan that you currently have, are you contributing? The company. Are you contributing? Oh, no.

Okay. Would you be at the other place? No. Okay. Then it doesn't matter. You go live where you want to live. If you can choose which pension plan that the company contributes for you, go to the other place. I mean, choose which state, do it that way. But either way, you need to be investing 15% of your income above what the company is doing. Time for you to go to Texas. Last day of the $100 discount per person on the Ramsey Cruise,

which is for Baby Step 4 through 7, folks, next year. And we'll be all on it with you. It's going to be in March, and it's going to be a high-end, very nice cruise on Holland America. Brand new ship. And all the Ramsey personalities, Rachel Cruz, Chris Hogan, Anthony O'Neill, Ken Coleman, Christy Wright, me. We'll be doing workshops there on the cruise. We've got great entertainment.

Our friend Stephen Curtis Chapman, Christian music icon, Grammy Award winner, will be with us. My friends Jeff Foxworthy will be there to make you laugh, and he can make you laugh. And so a lot of fun. And Manette Shahan will be with us as well, Food Network star. She is one of these super high-end, wonderful chefs, owned several restaurants here in Nashville, has become a friend, and she'll be doing some things on the cruise as well.

It's a seven-dayer, Turks and Caicos, St. Thomas, Bahamas, Puerto Rico, wonderful stops all along. And it is, today's the last day of the $100 discount, and there is only 123 slots left. So it is 90-something, 96% sold out or whatever that is right now. So today's probably your last day to get a ticket, but it's definitely the last day to get it at $100 off. You do not have to pay in full in advance. If you've ever booked a cruise, you're putting up $250 a person to reserve it. But today's probably your last day to do that if you're hearing me right now.

So, you know, there may be a few more. And we'll do a wait list because some people don't. You know, they just get the refund of their deposit. When it comes time to pay in the fall, sometimes folks, you know, bail. And so we'll have a nice wait list. And some of you that don't get in today will still be able to get in if you get on the wait list probably. So all that to say, go to RamseyCruise.com. We launched the thing only about three weeks ago.

No pun intended. We launched the cruise only about three weeks ago. No pun intended. We launched the cruise. Get it? Ha-ha. And so anyway, but yeah, it sold out almost immediately. This is pretty amazing. Thank you, guys. We're honored.

There's apparently a bunch of you in Baby Steps 4, 5, and 6, 1, and 7 wanting to celebrate where you were. After your debt-free scream, you need to go do some stuff and, you know, pay cash for it, of course. And, you know, there will be a test while you're on the cruise. No, I'm just kidding. No credit cards are allowed. Anybody tries to come on, you can come on with firearms but not credit cards. No, just kidding. Can't bring on either one.

But I'll get in trouble. Just move on, Dave. All right, Brock is with us in Atlanta. Hey, Brock, welcome to the Dave Ramsey Show. Hey, thanks for taking my call, Dave. Sure, what's up? So I am on Baby Step 2 right now. I've been on it for about eight months, and I'll be done in about four months.

And my question is, after I do the three to six months of emergency fund and all that, I'm single, I'm 29, and the reason I got into your program is I wanted to buy a house. Cool. And I've been renting for about eight years now. Cool. Good. So my question is, should I save up and buy a house and then where I can afford the 25% mortgage of my salary every month? Or should I continue renting and put all that money into investments? I'm fine with you buying a house. That's why you wanted to do it.

You wanted to buy a house. Okay. You're doing it right. You're going to put down as much as you can put down. Obviously, you've heard me talk about this. If you put down 20%, you can avoid the PMI charges, so that's preferable. But on a first-time homebuyer, a lot of people don't put down 20%. But never go over a 15-year mortgage where the payment's more than a fourth of your take-home

on a fixed rate. Never do that. And you know all that. You've been listening. I could tell by the way you brought all this up and talked about it, so you're fine. Are you dating anyone, Steady? Not while I'm in babysit, too. They don't have the money to go out okay all right well i just the thing the only

thing i warn young guys of is when you buy a house later on when you meet that special lady and get married you will discover you have purchased the wrong house so exactly but that's that's okay i don't know how many years that'll, and it's your goal to own a house, and so I would get a house if I were you. Way to go, man. Congratulations. Alicia is with us in Salt Lake City. Hi, Alicia. How are you?

Hi, Dave. So we have been listening to you since about 2012, and we were on Baby Step 7 when about nine months ago we moved our growing family from texas up here to utah so i could take a new job as a professor here um what we're finding is real estate here is about three times more expensive and it's not yeah salt lake city is not 3x of texas compared to el paso texas our house there sold for about a third of what it would cost here. No, the neighborhood you want to live in there. No, we're looking at the cheapest homes available, and there's

hardly anything on the market under $250,000 anywhere. There's no houses under $250,000 hardly at all in all of Salt Lake City, Utah. Come on. Who do you think you're talking to? So I'm working with an agent, and the only things that we've found under $250,000, we're looking at fixer-uppers, okay? And we're looking at things 1,200 square feet or less. Okay.

They've got a few condos. And when you took the job, did you make 3X more? No. No, I did not. Did you consider And when you took the job, did you make 3X more? No. No, I did not. Did you consider this when you took the job? Yeah, we didn't realize how bad it was in comparison. So I'm bringing in another $25,000 on the side doing contract work. But what we're looking at is we were hoping to not have to take out a mortgage

and to be able to just take what we sold our house for and buy a house here. So how much cash do you have? We've got about $139,000. Okay, and that's all your house sold for in El Paso? Yes. And your new job makes what? Just over $90,000 a year. Okay, and you're married, and what's your husband make?

That's us together. Oh, household income. Okay. $90,000 a year, and you have $139,000, and you're 100% debt-free at this moment. And you have, in addition to the $139,000, you have your emergency fund. Mm-hmm. Okay, good, good. And so what are you thinking about doing?

So we've talked about a lot of different options. He's interested in things as extreme as building a home out of, I'm forgetting what they are, like where you buy the storage shipping containers and building something like that that's super tiny. We've looked at fixer-uppers. We've looked at condos. But if we get anything that's super small with a growing family, we will have to sell it again two, three, four years from now.

So we're trying to decide in terms of looking at mortgages. If we get a small home that has a basement that we could move into but we could be using for rental income for now while we have small kids. That's what I would do. You don't do the storage container thing. That's just stupid. And the reason is that five or six years from now, you're going to have a big pile of storage containers that have gone down in value because there's no market for that.

Nobody wants to live in that crap except the four people that wrote about it in a magazine once. Okay? It's not getting marketplace for it. And so it's like the tiny house movement. There's no market for it. And so it's going to go down in value, not up. So you stay away from that. So you do one of two things here.

You buy a $139,000 house that's highly uncomfortable for two years, and you save like maniacs, and then you move up with cash, or you buy a home and take out a small mortgage, and you pay it off within five years. Not a home that's rental, not a home that's any of that. Just buy a house. I mean, you could pay off $100,000 in five years easy and that's your 250 000 mark and you know you're not going to die from that it's not it's not my preference i would prefer that you pay cash obviously you know that

you called dave ramsey but um you know uh uh you've convinced yourself that there's not anything you can live in that is around that price range but i think that condo idea idea is not a bad little condo, and your family just has a little camp out here, certainly better than storage containers. And, you know, we're just crammed in here for a little bit and for two years, and we save like maniacs and side hustles and everything else, and we build up as much as we can build up, and we move up again, and we move again in two years. It's either that or take out a small mortgage. Either one of those is within our guidelines.

You know, this is the one question that I answer two years. It's either that or take out a small mortgage. Either one of those is within our guidelines. You know, this is the one question that I answer two ways. One is what is within our guidelines, and two is what I would do. Most everything else is always what I would do, and that is our guidelines. But I don't borrow money for anything. So if I were in your shoes, I would be in a little condo camping for two years, and then I'd be moving up with cash. But it's okay if you do the other. It's within our guidelines. It's just hard to go back in debt in your shoes, I would be in a little condo camping for two years, and then I'd be moving up with cash. But it's okay if you do the other. It's within our guidelines. It's just hard to go back in debt once you're free. This is The Dave Ramsey Show.

This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.