The Ramsey Show - App - Is It Smart to Sell the House to Become Debt-Free? (Hour 3)

Episode Date: June 13, 2018

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Live from the headquarters of Ramsey Solutions, this is the Dave Ramsey Show, where America is hanging out to have a conversation about your life and your money. Honored to be sitting in for Dave Ramsey this hour. I am Ken Coleman, and also excited and honored to be joined in the studio for our first segment by Andy Andrews. He's no stranger to the dave ramsey show multi new york times best-selling author in nashville today and he joins me andy andrews welcome back buddy i'm honored to be here yeah it's always fun to be with you join me on the ken coleman show on series xm a little while back now we're here dave's gone what can we take let's take the

tennessee hat yeah don't touch the tennessee helmet it probably shock you, knowing Dave, you might have a little contraption in there. Don't touch that. But hey, we're excited because you're in town doing a lot of media for a new book, The Traveler's Summit. This is the sequel to The Traveler's Gift, which is what you're best known for. Well, I'm going to read that because you told me this earlier. He wants me to read the tagline. I can't believe they put this on there. The Traveler's Summit, the remarkable sequel to The Traveler's Summit. It's remarkable. earlier yeah he wants me to read the tagline i can't believe they put this on the traveler summit

the remarkable secret to the travel it's remarkable does that put pressure on you no i already did it oh so they did that post you turned it in and then i turned it in they're the ones that said it was remarkable not me well it is remarkable so let's talk about remarkable i turned it in on time it did that too well in 15 years removed from a book that really is your signature work. You've done a lot of great books, multiple bestsellers, but you're known for The Traveler's Gift. Real quick for maybe those who are meeting you for the first time here on The Dave Ramsey Show, what was The Traveler's Gift, and then now what is the follow-up, The Traveler's Summit? Yeah, The Traveler's Gift is a story about a family going through a tough time,

and a dad gets to travel through time, meeting with seven historical figures who are also going through a tough time of their own. And each of them gives him a different principle, that if he puts it in his life, things will change. And so that was the story of The Traveler's Gift. And I never really thought about doing a sequel, really for a long time, because I really have to have a combination of story and teaching. You know, I want the book to teach them. I want it to be valuable to people, but I also want them to be able to enjoy it, right?

You know, I'm so ADD. When I grew up in school and going to church, the only thing I ever remember was the stories. And if you didn't teach me the story, I didn't remember it. And so now the Traveler's Summit is that the central character, David Ponder, is an old man. And he's wondering, you know,

if the end of his life is near. And he gets visited by one of the original seven, who's the Archangel Gabriel. And Gabriel comes and he tells him that humanity is at a crossroads. And that the travelers are all meeting together for a summit. A summit conference that Ponder is going to lead. And he's like, me? Why me?

And I said, because you are every man. You weren't president. You didn't invent anything. You're just the everyday guy. And so you've become the most famous traveler of them all. And so they go to this place, and there's this theater, and all the travelers come in. And so there's one question, Ken, that they are posed. What does humanity need to do to restore itself to

its former glory? And so they get five chances. To figure out the answer. Yeah, five chances. The answer is only two words. And they get five chances. And each time they miss, if they miss, they can call another traveler. So it's really a play on that old question about who would you have dinner with? if you could choose four or five people. And to me it's such an interesting story because you've got people from different points in time. Right? I mean, what would Winston Churchill and Joan of Arc

say to us if they could sit together and talk? Well, in this book they do. And what's also interesting about this book is that the main character of course david ponder as he is interacting with these travelers he begins to see that he still has value left even though he's in the last quarter if you were right of his life i think this is a very hope-filled book in a time where andy let's be honest it's not a lot of hope out there not a a lot of hope. And that is, you know, hope is central to achievement because hope is a product of imagination. You imagine things are going to work out well. You imagine you're going to find the answer or you imagine it's over.

It's a product of imagination and it's a product of directed imagination. And in The Traveler's Summit, the characters teach how you can be in charge of. I wrote the book in answer to a problem I saw, especially in America, with people like, well, I can't get a job. And this book really kind of pushes the idea with the principle of how to do it. Don't worry so much about a job. Create value for other people. Create your own business. You don't know what your own business will be. Create value for other people.

If you prove value for other people, you'll never be without work. You'll never be without money. And so I loved the conversation with King David and Abraham Lincoln. You really do. You kind of have fun with history. I do. I imagine you writing this, and you're just thinking, well, who do I want to pull from history? And I'm putting them in the same section.

Section 112. They're in the club seats. You've got Gandhi. You've got Churchill. Who is your favorite character to pull out of history and put in this story? They're looking into the theater, right? So there's Bear Bryant, and he's talking to Martin Luther King. And so one of the comments that Churchill makes

in between questions when they're having to wait to see if their answer is correct, somebody says, who's the woman up there? And Churchill says, oh, she's the lady pilot, you know, the one that disappeared.

You wouldn't believe where she's been. Talking about Amelia Earhart. Yeah, yeah. Unbelievable. So when they read this book, it's a fun book. It is a fun book. But it's also got moments where it really makes you reflect.

That's kind of your style. You use some fun and some pageantry and imagery, and then, boom, you've got to really weigh something. What do you want the readers who read The Traveler Summit to do, not just to take away, but to actually do as a result of this book? You're going to be surprised at this answer, but the answer is something. Just anything?

Well, you can't always do everything, but you can always do something. You can move toward it. You can move. You know, answers don't come laying on the couch eating ice cream, watching reality TV. You know, answers, truth, processing is a part of an adrenaline process. It's a part of a hopeful, imaginative process. And when we get out and we push forward, you know, Lincoln talks about that a lot in the book, about the days after his son died and how he felt in the

White House. You know, all alone, his wife was about to go crazy. His 11-year-old son died, and now he's still leading the nation. And so he talks about that. What do you do during those times? Is the book everywhere now? Is it out? It's officially out.

So he is Andy Andrews. The book, The Traveler's Summit, the remarkable sequel to The Traveler's Gift. I'm going to tell you something. If you're going to go get this gift and you haven't read this book, it is a gift. Give it away. But if you haven't read The Traveler's Gift, read that and The Traveler's Summit. You talk about summer reading, that'll help you change your life. It will.

Andy Andrews, thanks for being with us. Thank you, buddy. You're a great friend to Dave and all of Ramsey Solutions. Thank you. Andy Andrews, thanks for being with us. Thank you, buddy. You're a great friend to Dave and all of Ramsey Solutions. Thank you. AndyAndrews.com. If you want to learn more about Andy and get connected to what he is doing. Coming up, co-author, best-selling book, Graduate Survival Guide. Anthony O'Neill joins me in studios.

We take your questions about your life, your money, your career, all that. Coming up, don't go anywhere, more of the Dave Ramsey Show right around the corner. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that unfortunately they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the timeshare industry and I learned that you can't sell them and you can't even give them away. And then we talked about Timeshare Exit Team's process. Every ownership situation is different, which is why they have more solutions than any other company.

And that's when they earned my respect. Don't call any of the imposters out there, and there's a lot. The only timeshare exit company I stand behind is Timeshare Exit Team. They have exited thousands from their timeshare burden this year alone. Yes, you will write them a check, but they stand behind their guarantee their guarantee they will get you out or they'll give you a full refund call 844-999-EXIT online at timeshareexitteam.com welcome back america you're joining the Dave Ramsey Show. We talk about your life and your money.

I'm Ken Coleman, sitting in for Dave Ramsey, and also joined by fellow Ramsey personality, Anthony O'Neill. He is our face and voice to America's next generation. He's also the co-author of the best-selling book, The Graduate Survival Guide. Anthony O'Neill, welcome back, sir. Ken Coleman, thank you, sir. This is prime time for you, isn't it, with kids all over the country.

Here in Middle Tennessee, kids are already out of high school and they're into their summer, but all around the country we're in that graduation time, whether it be from high school or from college. I imagine that your website, your phone's ringing off the hook. What are you up to these days? Traveling, man. Just got back in town yesterday from speaking to 6,000 high school students. Oh, wow. They're in the Tampa Bay, Florida area.

What did you speak on? Yesterday, it was at a church youth conference. And so I just really talked about just really standing on God's word and just trusting the gifts that are inside of you. And it was an amazing time and just really addressing some of the issues that we're seeing across the country from financial mistakes to even younger people who are considering doing some harm to themselves. So we just really addressed a lot of different areas and really just spoke life into these young people. All right. Well, we are here, Anthony O'Neill and myself.

We'll take your calls. What do you want to talk about? You want to talk about money? You want to talk about life? You want to talk about your career decisions? It's a free call, 888-825-5225, 888-825-5225. We start off with Michelle in St. Paul, Minnesota. How can we help, Michelle?

Hello there. So my mom passed away about six months ago, suddenly and unexpectedly, and she left me her IRA money. I'm an only child, and my parents were divorced, so it was

her half of it. It was about $180,000. And I'm just wondering kind of what to do with it. I'm keeping, I haven't used any of it. It's all still, I rolled it over into my own name. And I have to take out like, you know, the minimum required amount every year for the rest of my life. If I leave it in there, I cannot add to it. Actually, I think I can add to it because it is in my own name. It is my only major savings. I'm a stay-at-home mom right now. We have three kids, you know, that are going to go to college and we don't have a whole lot saved for them for college. But my husband started his own company and he's doing fairly well. You know, we have

some money in savings. We don't have really any debt other than our house. And so I'm just wondering kind of what to do with that money or if I should just leave it in there and just go with it. Yeah, yeah, yeah. You know, Michelle, first off, I want to say, man, I'm sorry to hear about your mother passing. That is something that I know we all will face one day, but I'm not looking forward to that day. And the fact that you've had to experience that, I'm praying for you, your family, and just sorry you had to experience that. In regards to your question, it sounds like you guys are good. You know, you're debt-free. You're working on baby step number three now, right?

You're trying to get your three to six months in expenses saved up oh yeah we've got that we're good on that yeah so you're good so right now what i would do because you've already put the ira into your name i would not touch that um i would just go ahead and just add to it and start working on your retirement but you're saying that you you don't have that much save for your kids what i would do i would start since your since you're retiring, you have a good chunk set aside for your retirement. I would start going ahead and looking into an ESA, an educational savings account for your kids right now and start investing into that.

Since you're already out of debt, you're going ahead and saving for your retirement. You have a good chunk of change there. Start worrying about your kids. Then the next thing, start going ahead and getting rid of this mortgage payment. Okay. Yeah, and Michelle, I want to ask you. Yeah, that's kind of what I was wondering. Yeah, have you connected with one of our SmartVestor pros?

No. Okay, are you familiar with our SmartVestor pros? No. Okay, so we've got these wonderful men and women who are literally all around the country. They're going to be near you in St. Paul, Minnesota. If you go to DaveRamsey.com and you search our SmartVestor Pros, it's very easy to find what these are. They are men and women who have been vetted by our organization, Ramsey Solutions. They have the heart of Dave, which is the heart of a teacher, and they have been vetted, as I said, very carefully. They're going to teach you, or they should teach you, what Dave teaches you about investing,

and you want to go interview them. So find three or four or five and go have meetings with multiple SmartVestor pros in your area, and as I said, you're interviewing them to see if they feel like the best representative for you and your money, and they're going to help you. Anthony gave you great advice, but they're going to be able to put you on a path so that you can invest that money and put it away in the right places

and get the most out of it. So that's what I want you to do. That's going to be a great move for you. Again, the Smart Investor Pros, DaveRamsey.com. So that's where I want you to go. Okay, let's go next to Marco, who's on the line in Denver, Colorado. Marco, how can we help? Good afternoon.

So my wife and I are on baby step two, and we just sold our other house, so we have a nice chunk of equity, about $50,000. And I'm just curious, what is the best course of action for that money? Good question, Marco. How much debt are you in? So we have a car that we're paying off, probably about $3,000, and then about $25,000 in stupid.

In stupid, I got you. And then a mortgage payment. And a mortgage payment. So you're saying you're about 30K all in of debt? Roughly, yeah. Okay. And plus the mortgage. Plus the mortgage.

Okay, cool. So without a mortgage, you're looking at 30K worth of debt. You're getting 50K worth of equity. You're on baby step number two, clear as day. If Dave was in the studio today, he would tell you to go ahead and just knock out that $30,000, um, estimating and guessing that $20,000 will put you all, if not right at a little bit over your three to six months of expenses. So selling your house was the right move. So I'll go ahead and number one, pay off your debt, put the 20, uh, put three to six months of expenses into a savings account, which I think will be that other $20,000.

And then start attacking baby steps four through seven. But congrats on selling this house and moving forward. Yeah, what an exciting place to be in for Marco and family. Come on, man. One sale, boom. They knock out a couple baby steps. And you know, here's the deal. Follow the baby steps.

That's it. They work. That's it. And so you just got $50,000 to, I mean, you talk about a great feeling. Yeah. You know what I'd do with a little bit of that $30,000? What would you do? I'd go celebrate.

Just a little bit. Nice dinner. I'm going to celebrate with a little bit of the $20,000. Because the $30,000 is going to pay off today. Oh, yeah, yeah, yeah. I'm sorry. So they got $20,000 left over. Yes, $20,000.

The point is, go celebrate. Have a good time. Celebrate. That's a big step. Man, come on, Ken. And you've got some major momentum in your life. Come on, Ken. And just keep following Dave's steps.

What's your favorite restaurant? Where would you go? If Ken Coleman can go anywhere in the world, what restaurant, where would you go? Very difficult question. I'll tell you where I want to go. Wherever my locale is, I want to go to the hottest, newest place that I've not been to. Yes. Because I like to try something I've never tried before, so that's going to be

my go-to answer, but hard to pass up a great filet. You know, I mean, I think anytime you go get a great filet, great steak, maybe some great seafood, something like that. So there you go. 888-825-5225. 888-825-5225 is the number. I literally

got distracted by thinking about a filet. Got to focus, man. Focus. It's not time to eat. Kelly's looking at you like, hey, get it right. That's right. Next we go to Aaron, who5 is the number. I literally got distracted by thinking about a full house. You've got to focus, man. Focus. It's not time to eat. Kelly's looking at you like, hey, get it right. That's right. Next, we go to Aaron, who's on the line in Palm Springs, California. Aaron, how can we help?

Hey, guys. How are you doing today? Great. How are you, sir? We're good. Hey, my wife and I are in an exciting time of our life. We are about to move, and we're in the middle of the baby steps. And when we sell our house in Palm Springs, we will finish a baby step two, which will push us into baby step three. And we're just not sure where to go from there because where we're moving to Santa Barbara, houses are much, much more expensive. And so we're kind of wondering,

do we do baby steps three and three B as we save for a down payment for a house? Or do we just plan on being renters in Santa Barbara while we move to baby steps four, five, and six? You know, Aaron, that's a good question, man. What I want you to do is go ahead and just go ahead and get your three to six payments. Do not do 3B. Get your three to six months. And it's okay to rent. Rent for the next two years. Get the baby step number three. Stack up the money.

Get 20%. Boom, you're in the house. And you're doing it good, smart, and healthy, Ken. That's exactly right. Remember, renting is not a sin. It allows you to plan and prepare for that next stage. Don't let moving to an expensive area make you lose your common sense. Follow Dave's plan.

The baby steps work. Coming up, more of your calls about your life and your money. This is The Dave Ramsey Show. You know, so many people have such a negative attitude about life insurance when it's actually one of the most caring and giving things you can do for your family. But still, 7 out of 10 families have no life insurance or not enough. I don't get it. Look around. People die at all ages.

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This is the Dave Ramsey Show. I'm Ken Coleman, sitting in for Dave Ramsey this hour, and thrilled to be joined in studio by my good pal, Anthony O'Neill, a fellow Ramsey personality and the co-author of the bestselling book, Graduate Survival Guide. We're here to take your questions. You have a question about your life, money, career, your kids, your grandkids. It's open season. 888-825-5225. 888-825-5225. 888-825-5225.

Let's go to Angela who's on the line in Indianapolis. Angela, how can we help? Well, I have a question for my husband and I. We are debt-free except for our mortgage. And right now we are currently investing very little into our retirement, but we are coming into some money that we can either pay off our mortgage completely, which we do have a 15-year loan on, or we can not pay off our mortgage, invest in our retirement even more, and fund some of our kids' college.

Let me ask you a couple questions just for Anthony and I here. How much do you have left on the 15-year mortgage? About $75,000. And the payoff is when? In 11 years. Okay. And how far along are you with the kids' school funding? Very little.

Mm-hmm. Just 1,000. Okay. And I may have missed this. Angela, do you have an emergency three to six months stacked up already? No, we do not. Not completely. Okay.

Okay. Okay, cool. So, again, the baby steps work. So what I want you to do is once you get this income coming in, can the very first thing I would love to see Angela do is go ahead and stack up three to six months. And if you're getting a large lump sum, Angela, I want you to go ahead and go to the full six months. So that way you can have a solid cushion for if, if anything happens as well, it's not if, when something happens down the road. Now,

once you do that, okay, baby steps four or five, six and seven, Angela, you can do those all together. OK, so there's why there's really no rush to pay off your house. We do want you to get out of debt as soon as possible. But I do also want you to start thinking about your retirement at the same time. I want you to be thinking about your child's college education or future. But Chris Hogan always says, Ken, do not put your child's college before your retirement. So what I want you to start doing is start looking into your retirement, start saving for your retirement, look into an ESA account, and just put a little bit in there for your child's future.

And then once you get those things going, yes, start attacking that mortgage. That's right. Because, Anthony, you know, and you talk about this all the time, you and Rachel Cruz talk about this a lot, online and offline at live events, that the reason Chris Hogan and Dave say, hey, don't put your kid's education before your retirement, is why? They can go to school for a lot cheaper than parents think. Why is that? And tell Angela and those listening that are in a similar situation how it is and why it is we say that. Well, here's the thing, Ken. There's no 100% guarantee

that your child is going to go to school and finish school, but there is a 100% guarantee that you will retire. And so I'm not saying, and we're not saying, do not take care of your children, but we're saying like, hey, when you get on the airplane, the first thing they tell you when they're going through the emergency exit is, hey, before you take care of your kids, put your mask on first. So before you really start focusing on your kids future, make sure that your future is solid so they can have something strong to stand on. So, Angela, you're coming to some great money. Get six months into retirement. I mean, into retirement,'re coming into some great money. Get six months into retirement. I mean, into an emergency fund. Start investing into your 401k, which is your 15% of your income. And then, hey, let's start worrying about your child's college education.

Thank you for the call, Angela. 888-825-5225 is the number to jump in on the conversation. We go next to Amanda, who's on the line in Idaho Falls, Idaho. Amanda, how can we help? Hi, I just started helping my friend using a baby set, and she just totaled her car, and she doesn't have any money saved up for a new car, and the bank just told her that the best loan they could give her is at a 17% interest rate. And she doesn't have anybody else to help her out financially. And I was wondering what advice you would give me so I can talk to her about what she should do in this situation so she doesn't get set back too far.

Yeah. Amanda, 17% interest rate, that just gave me chills on my skin. That is a lot of money. So the very first thing I want to say is we're going to avoid any loans, borrowing any money. Here's my question though for you right now. The car that she totaled, did her

insurance cover it and pay off the car? Or is she still liable for some of that? It's paid off. Okay, cool. But that's where the majority of the money went to. Okay, so that's great. That's fine.

So what she needs to figure out is how can she get a cash car right now to get it from point A to point B. Now, here's the thing. It's not going to be what she likes, Ken. She may not be in love with the car. But the key thing is I'd rather be in a car that I may not be in love with that's going to be from point A to point B than to go borrow money at 17% interest rate? Heck no. Even at 1%, I'm still tripping and crying. Amanda, how good a friend are you? Are you guys very close? No. New friendship, but she is

young and I'm trying to help her out the best I can with the knowledge that I have from Dave Ramsey. Okay, so... She's just starting out in life. Right. And so I appreciate you, but one of the things that people do in a situation like this is they panic. Yeah.

And when, Amanda, you've been in situations in your life when you've been afraid, scared, confused, panicked, and you don't think clearly, do you? No. No. So you've got to help her think clearly. So here's the reality. I don't know how much her car cost, how much it was worth, but I'm going to tell you right now, if you just go on any website,

used car website, direct to consumers, people selling their car online, whatever site that would be, and I'm telling you, you can find cars that will run and be very dependable between $2,500, $5,000. I mean, there's an option. But here's the point, Amanda, that I want to make very, very clear. If she's got to Uber or she's got to ride share or she's got to carpool, she's going to have to reach out to somebody and say, hey, I'm in this situation for a short term. It's going to take me X amount of months to save up to buy a $2,000 car or a $1,500 car. Or how about just shaking the tree a little bit and you help and you give her some ideas.

Look into some situations. Maybe there's some churches who have a car program. I know of several here in the Nashville area. If somebody's in a distressed situation like this, they need a car to get to work, and they don't have a person that can take them, maybe they'll let you have one of their cars for a small amount of time.

My point is that buying a car right now is not the only option. And I think many times it's natural for people to think, that's my only option, what am I going to do? And then they go get a 17% car loan. That's crazy. Because they think, Anthony, that's my only option. What am I going to do? Yeah. And then they go get a 17% car loan. That's crazy. Because they think, Anthony, that's the only option. It's not the only option.

Great. It's really not. 888-825-5225 is the number to jump in on the conversation. Let's go to a social media question. This is from Ray on Twitter. He says, we're in Baby Step 2. Is it okay to put a little bit of money into our kid's 529 account at her birthday and Christmas, even though we are in Baby Step 2?

Not talking a lot of money, maybe $50 at birthday and $50 as Christmas. What do you say, Anthony? Hey, if that's their Christmas gift, I'm fine with it, Ken. If that's their Christmas gift to their future, I'm fine with it. But, hey, again, let's not get distracted. This $50 should not turn into $200 or $250 or $300. We want to make sure that we are focused on getting out of debt. Because once we get out of debt, we can invest so much more into our kids' future.

But if you just want to do it on their birthday and on Christmas as a gift to them, as a gift to their future, I'm fine with that. All right. And let's go to a question from Facebook, Dave Ramsey's Facebook page. That's Facebook.com slash Dave Ramsey. Claire writes in, I want to attend Financial Peace University, but there are no classes in my area. I can do the online version. Is it the same class? And is it just as good for me as a physical class i like that question yeah that's a great

question and is it going to be the same for you um no it's not going to be the same for you because i mean when you're around brothers and sisters who are doing that it's not but getting the information rather than not getting information is always best so there's nothing around you do the online experience and grow and change your life so you can live and give like no one else hey here's an idea claire how about uh going to davramsey.com and uh connecting with our team on this and say hey i want to lead a class oh you don't have to know the steps to lead the class dave and team do all the work about that you are the man where there is no class start one i think dave would be very happy if i'm saying that be very happy hey more dave ramsey show right around the corner

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Forbes recently pointed out that June should be the quickest month for you to sell a house. Let's look at last year where the typical home sold in 73 days. That's from listing to closing. That's unbelievable. So that means, Anthony, that it's probably going to be a strong housing market this year in the month of June. So if you're trying to sell your home on a quick timeline, this might be the time. And the way you're going to do that is by getting with the right real estate agent so that you can take advantage of a hot market and sell quickly without worrying about if you're leaving money on the table. Now, real estate agents are part of our endorsed local providers program where we vet these agents specifically in your area to ensure that you get to work with someone who has

a proven track record and who will get the most value for your home. I'm going to tell you something. I've used an ELP here locally, and it matters. It matters when you get expertise and somebody who's working for you. So to find a realtor near you, visit DaveRamsey.com slash ELP. That's DaveRamsey.com slash ELP. And the month of June could be the month where you move that house. And, Anthony, as we've heard already this hour from a few callers, moving that house can really fast-forward the baby steps if you've got some equity. That's a great move for somebody.

Hey, there's nothing wrong with moving a house, getting way ahead, renting for a little bit, keep saving, and get back in a house this time on that 15-year or maybe you pay cash. Absolutely. So good stuff. 888-825-5225 is the number. We go to Selena who's on the line in Portland, Oregon. Selena, how can we help? Hi.

I just had a question. We are just relocated to Portland for my husband's job, and the market here is pretty crazy um and so we're looking for a home but um to look at a home is basically looking at spending possibly about 50 percent of our monthly income and not a quarter of that and so i'm asking if it would be smarter to rent for a year even though that money's going towards nothing or to just get into a home to get for a year, even though that money is going towards nothing, or to just get into a home to get into a home. Yeah. That's a good question, Selena.

Let me ask you this question. You guys are debt-free, and you already have your emergency funds set aside? We have about three months of emergency fund, but we are not debt-free. We did purchase a brand-new car last October. And then we have a second used vehicle. But together, that's probably $60,000. $60,000 in debt. How much do you have in your emergency fund, if you mind me asking? About $6,000. Okay, cool. So what I want you to do is, yeah, you guys, there's no need to rush into buying a house right now.

I want you to go ahead and get rid of this debt. Go ahead and get that $60,000 knocked off. You purchased a brand new car, so we're not going to talk about the past, but we need to go ahead and get that situated. But then rent. I'm thinking you guys are renting for the next two

to three years because i want to see your mortgage at at least 25 to max 30 percent if you're debt free of your tech take home pay you do not want to go to 50 percent of your take home pay that is ridiculous that that would not be a smart move at all that would be stupid and so what i want to see you do is become debt free get your three months covered, three to six months minimum. And then after that, rent as long as you can. And if you know this is going to take 50% of your income, rent until you can afford it as far as it is down to 25 to 35%. Yeah. Walk the baby steps out. That's it. Selena, I'm going to have Kelly give you a

copy of Dave's book. I just blanked out, Total Money Makeover. Thank you very much. I've got so many book titles in my head. Total Money Makeover is going to walk you through this if you're new to this. You've got to walk the baby steps out. And the brand new car, that's a problem. That's a problem. And you're worried about your call is about the house.

And that's not what the call needs to be about. The other thing I want to address here that I was thinking as you said, I picked up on what you said. You said, do we get into a house, which is 50% of our income would be the mortgage payment. Right. Or, she said, do we pay rent, which is going to nothing? And I think therein lies the psychological problem. It's not going to nothing, Anthony.

Paying rent while you're not building equity or you're not investing, what that's doing is buying you freedom and time. Yeah, come on, man. You're not locked up. I feel you. We've got to change the vernacular. Man. And the mindset behind that renting is just throwing money out the window. Now, Ken, you're hitting on something here, man.

And I hate to sit here, but let's look at this. 50% This is the reason why people are living paycheck to paycheck. Because if her mortgage is going to be 50%, and then she's already in $60,000 worth of debt, that's another 25% to 30% right there. So she's at 80%, 90%. So that means every paycheck that they get

is going out and it's not staying in. That's right. And so I'm with you, Ken. We have to change the mindset. But you can do it. You can do it. Yeah. There it is.

Total money makeover. Follow the baby steps. Get in a class. Financial Peace University. Get in a class where you're around people who are going to motivate you and keep you fired up and keep you accountable. My goodness gracious. Let's go to Brian, who's on the line in Phoenix.

Brian, how can we help? Oh, yeah, I just had a question. I am put in week four if I'm in the FOP's university. Hey, Brian, I'm going to put you on hold. Let's see if we can get that cell signal fixed there. We just couldn't make out that call. I apologize. We'll see what we can do there.

Stay with us, or we'll get you back on on another hour or another day. Let's go to Mohamed who's on the line in Boulder, Colorado. How can we help? Thanks for taking my call. So my wife and I, we are living quite a good life, I would say. No debt at all. We just have a 10-month-old baby. She goes to daycare. My question is, we have a mortgage on our house that we really would like to get rid of it as soon as possible. It's just we can't find a way around it. So I was wondering if you guys have any advice on that.

Let me try to understand your question. You're trying to figure out how to pay the mortgage down faster? Is that the crux of your question? Yes, sir. All right. Muhammad, this is a good question, and a lot of people are asking us this question here, Muhammad. And here's one thing that I recommend. If you have a 30-year loan and you're trying to get it down to a 15-year,

one of the suggestions that Dave and I and even Chris Hogan recommend is make an extra payment every quarter. So try and get every quarter an extra full payment that goes towards your principal. Now, if you could do four of those a month, you're going to knock off anywhere between seven to 10 years worth of interest, extra interest you're paying. That's going to save you a lot of money. Another thing is, let's say if you just want to start small, take one payment, divide that over 12 months and add that on top of your regular payment.

The key thing here is can though, is anything extra that you make is to make sure that you're putting all of that towards your principal. So you have to call the bank or walk into the bank, say, Hey, here's my mortgage payment, but here's extra so if your mortgage payment for example is 500 bucks you're going to make an extra 500 payment for a total of a thousand you're gonna say hey here's my 500 towards my mortgage but i want this 500 to go all towards principal and i keep my due date for the next month yeah so you're not getting ahead you're knocking down principal because remember, interest is a cure daily. That's right. So we want to get that knocked down as much as possible. Yeah. I think when you can't get your head around, which is what he said, the idea of how do I pay

extra into my mortgage? This is about sacrifice. If you can't figure out any ideas, then let's start with the sacrifice bucket, shall we? Meaning. Meaning, I've got to get more income. Yeah. So now there's a couple ways that I can do that within this idea of sacrifice. I'm either going to sacrifice some of the things and the amenities that I'm paying for, and I'm going to add that up. Let's see if we can sacrifice three amenities or three things we do that just are extra. And let's say if that's $250 or $200 or $150.

Yeah. All right. Here's another sacrifice. You know what? I'm going to not see my wife and kids for maybe 6, 7, 8, 9, 10, 12 months. Five nights a week. I'll spend time with them on the weekend.

There is a way, if you look towards how can I sacrifice, and sacrifice in a way that reduces my expenses or brings in more money. When you do that, Anthony O'Neill, now we've found extra money to put towards the mortgage. Ken Coleman. Hey, man, thanks for hanging out with us. Thank you, Ken.

AnthonyO'Neill.com, KenColemanShow.com to learn more about what we're doing with Dave Ramsey. Hey, I want to thank our producer, James Childs, and our associate producer, Kelly Daniel. But most of all, you, America, thank you for listening. This is The Dave Ramsey Show. Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. Are high health care costs getting you down?

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