The Ramsey Show - App - Is It Smart to Use a 401(k) Loan to Pay Student Debt? (Hour 2)

Episode Date: May 14, 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. The phone number is 888-825-5225. That's 888-825-5225. Chris starts this hour in Chicago. Hi, Chris. Welcome to the Dave Ramsey Show.

Hi, Dave. Thanks for taking my call. Sure. My wife and I, we have about $80,000 in debt, and most of that is in $62,000 in her student loans. And we just purchased a house about a month ago. We have some new expenses that have just popped up.

We need to get some basement work done, which we just got it quoted around $10,000, and it might be a possible mold issue. But my question is that... You just bought a house? We just bought a house. And it has a mold issue? Well, it was not disclosed. We don't know if there's a mold issue yet.

We just think there are, because there's definitely some basement leaking, which was also not disclosed. So we're working... Did you not have a home inspector? We did, and they didn't uncover anything. So we're in the process of working with our attorney to kind of figure out that situation. But my question is, there's two. One, we're in baby step two, my wife and I, and my company was just purchased by another company, and we had an ESOP.

So over the course of the next two years, I'm going to get about $210,000 in stock payout, which is great, amazing. And I want to roll it all over, but I was wondering what your thought was about maybe taking some of it to pay towards our debt or just work our debt snowball as it is you have it's pre-tax so you have the option to roll it into an ira yes i wouldn't touch any of it then i wouldn't touch any of it what's your household income about 160 000 with my wife now i'm going to use that and cash flow my way out of debt i'm not going to give the government 40 cents on the dollar to free this money up to pay off debt yeah or to fix the basement when you make 160 because i mean you're if you to the every dollar you give them they're going to take 40 cents of it yeah Yeah, yeah, absolutely. So I guess my question was, if we have to go ahead and fix this basement,

do we just, you know, take another loan out of there and then roll it into our snowball? You make $160,000. Right. Save up and fix the basement. Well, so should we just save up until we can fix it? Yeah. Okay. You know, if it's an emergency and it's causing mold and it's going to bring health problems to your family and all that kind of stuff,

you know, even if you go legal to get reimbursed from the home inspector, the seller, or the selling realtor, all of which should have disclosed or found this crap. I mean, if it's leaking that bad, how bad a leak is this? Well, we're first first time homebuyers so i thought it was bad because there's water in the basement it's an old home um but it seemed dry during the inspection and you know we didn't have and like i said the seller it was a flip he said that he had no knowledge of it how many people have looked at this how many different contractors uh so far i have actually one that's coming today and we did one last week so exactly so this is a second person that's going to be coming looking at it okay let's just let me sidebar for just a second okay i've owned about 2 000 houses in my life i've bought and sold houses

and bought and sold real estate all over. So, I will tell you that a fair percentage of basement leaks, just as an owner who does rehabs, okay, a fair percentage are bad guttering. The gutter is dumping water right in front of your front foundation, and so it's got nowhere to go except through your freaking

basement. So, get the gutters, get the downspouts off the house, meaning get the water away from the house, make sure it's graded properly, where the water's running away from the foundation, and get your guttering away. That may be a whole lot less than $10,000. That might be $1,000 or $2,000 or something, and that changes the scenario. But let's say it is $10,000, sidebar back, abandon Dave being a real estate guy, back to answering your question.

Then I'm going to stop my debt snowball temporarily, and I'm going to fix this with cash flow. And then I'm going to restart my baby steps and debt snowball. Great. Okay, so pay minimum payments, stay current with everybody, cash flow the repair, then come back, fix everything. It's not bad enough that you can't cash flow it with your income. Yeah, yeah, absolutely. Yeah, so that's what I'm going to do. And I would roll 100% of your ESOP into an IRA and keep the government's hands off that money.

You'll be glad you did later. And you get away from the emotion of getting out of debt and the emotion of a leaky basement. Stephanie is with us in Scranton, Pennsylvania. Hi, Stephanie. Welcome to the Dave Ramsey Show. Hi, Dave. I'm so excited to talk to you and ask you for some advice. Sure.

What's up? My husband and I are both 45. We came to you in 2014 complete financial wrecks. But I'm happy to say that as of today, we're in baby steps four, five, and six. Woo-hoo! Good for you. I know. I'm sorry. I'm happy to say that as of today, we're in baby steps four, five, and six. Good for you. I'm sorry. I'm nervous, too.

Well, our struggle is I need your advice on if we should fix up a house we hate in a really bad neighborhood. Our school district is in state control. Our city is corrupt. Our mayor had his offices raided by the fbi earlier this year um we pay for private school for our youngest and we have three currently in college which we are cash flowing why would you stay there well you just described hell i don't want to live there it is um you hate the house it needs repairs you hate the neighborhood you hate the house. It needs repairs. You hate the neighborhood. You hate the city, and the mayor's corrupt. My God. It's like a movie. Now it's a money issue.

We had saved about $40,000 for either a down payment or some repairs. When we bought the house, it's worth less now than when we bought it. The realtor is telling us, an excellent realtor. He sells tens of millions in this area. when we bought it. The realtor is telling us, an excellent realtor, he sells tens of millions in this area. He said we can basically get out, sell it possibly for just enough to pay off the balance of our mortgage and pay him. Great. Why would you not do that?

I don't know. I'm just worried. We only have about $40,000 saved for either repair or to buy it now. Well, you're not going to repair. You're going to sell it and get out even. So you clear the $40,000. You either use that as your down payment when you move, or you go rent for a year and build up more of a down payment?

That's, I guess, my question to you. Is it wise to rent? We have four kids. We really want to take care of my mom, who is ill. She's been divorced. She has some mental health issues, but she's really medicated. And, Dave, I owe my love for Jesus and my strong faith to her influence in my life, so I really want to help her.

But do you think I could find a house to be able to care for my mom, have four kids? I don't know. And rent? I don't know, but I'm not staying there. I know that. Do you think we should not do the repairs and just sell out? I think you ought to leave. I've said that three times.

You need to leave. You told me all these reasons you hate this stupid house. You need to leave. Now, where you're going is up in the air. You've got to figure that out. And you need to work on that immediately. But you need to leave. And then it may be a two-step procedure to get to where you take care of your mom later.

Maybe you rent for a year, then you buy something you can take care of her then. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance.

It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. number 79 on amazon the proximity principle book launch week we are in the middle of it author ken coleman ramsey personalities in chicago and on line, checking in from the road. What's up, Mr. Coleman?

Well, Dave, we're in Chicago, actually hanging out with our friends at WCGO, 1590 AM, 95.9 FM, the exclusive Chicago home for the Dave Ramsey Show. So it's always good to be with one of our affiliates. We're having fun with them a little bit later this afternoon, talking about the proximity principle. Awesome. Very cool. And you had a couple of TV hits there earlier this morning, right?

Yes, sir. We had a good time with the folks at Good Day Chicago, and we've just got things lined up all around the country. So we're having a blast. Day two and beautiful weather here in Chicago. So good night for a book signing, huh? It is. We're going to be at the Barnes & Noble Old Orchard in Skokie at 6 o'clock.

And as you know, Dave, we've been telling folks we're giving away $450 in cash plus a $50 gift card to start the proximity principle, get people having some coffee. You've got to be present to win, but we're excited. We've seen a lot of buzz on social media. A lot of people are going to be coming out. So if you're hearing this, we'd love to have you join us at 6 o'clock in Skokie at the Barnes & Noble.

Absolutely. Make sure you've got plans down to do that. It's going to be a huge night over there. We're looking forward to that. Very cool stuff. The proximity principle, the proven strategy that will lead to the career you love.

Again, when I've done book tours in the past, sometimes it's interesting to me when I land in some of these media hits that as soon as the lights go off and the camera goes off, they start asking me questions about what's in the book. Has that been happening? Oh, yeah. Like on a personal level, you know? Oh, yeah. So, yeah, how'd you figure this out was the question I got this morning from one of the hosts on Good Day Chicago. And, you know, I just was able to share with her, you know, this is something that I just figured out. It was some intentionality to get around people that were in radio and television

and get in places where I could learn the craft of broadcasting. That was the early days of just getting in those places so that I could learn what I needed to learn and get a shot, an opportunity to do what I would need to do to make it up the ladder. And as you know, Dave, this became a thought that I shared on the radio show, the Ken Coleman show, a year ago, and it began to take hold with the listeners. And so we knew that we had something here, and this is the beginning of it. And so, yeah, we get those questions, you know,

and it's always fun to share what you and I are so proud of with anything we do, any of our personalities or energy solutions. When we put content out, it's based on the fact that it is a proven plan. It actually works, and it's repeatable. So, yeah, we're having a lot of fun talking about the book. Yeah, The Proximity Principle is number one in job interviewing, number one bestseller in job interviewing on Amazon right now. So at this moment as we speak.

So very cool. That's right. And the host said, hey, Ken, can I have the book? I said, well, sure. She goes, great. I want to give it to my high school son. Oh, perfect. That's always good to hear.

Yeah, perfect. Perfect for a college graduate for, because they're coming out. And how do you take this degree and land work in what you studied for, you know? And what's your dream is? My dream is to be an X, a Y, or a Z. So how do I get to do that? Well, you have to get in proximity of the people and the places where X, Y, or Z is occurring, right? That's absolutely the case. And it's not so scary when you can begin to identify who those people are.

And as you know, in the book, The Proximity Principle, we identify five people that you need to be looking for and getting around. We also identify five specific places that if you put yourself in, whatever that X, Y, Z career that you're talking about, all of a sudden I get the opportunity to learn what I need to learn, to do what I want to do, and continue to connect. And that's the secret of the proximity principle. It is the principle that will guide you to doing what you love but then continuing to advance and to progress because that's what we all long for.

We long for progress, and this is a principle that if practiced habitually is going to lead you to so many opportunities for you to do what you love. Very cool. Good stuff. So the first big book signing is tonight in Chicago, Skokie Old Orchard, Barnes & Noble, 6 o'clock, $450 cash given away, $50 coffee card given away for someone to practice the proximity principle. Then you guys head back home and be doing media here in Nashville with a book signing on Thursday night, day after tomorrow here in Nashville, actually in Cool Springs right near our offices, the Barnes & Noble just down the street from the office here at Mallory and Moores Lane.

And those of you listening in Nashville, that is this Thursday at 6 o'clock. Make sure you make plans to come out for that. And then next Tuesday, the 21st, Ken will be in Phoenix at the Mesa store of Barnes & Noble there at Village Square at Dana Park. And Sacramento a week from this Friday, May the 24th, the Barnes & Noble there at Arden Fair at 6 o'clock. So each of these signings are the giveaway. Each of these signings are at 6 o'clock, and so it's easy for you to remember.

Check our website. Check KenColeman.com for details on the book tour, where he is, what appearances he's doing. He's going to be all over the place. So just be watching and listening, and you could actually get in proximity to Ken Coleman. It could happen. Yes, and we're looking forward to it. Can't wait to see folks. High-five them and sign some books.

Very cool stuff. Congratulations, Ken. We're all cheering for you back here at Ramsey. Thank you, Dave. Appreciate it. Hey, thanks for hanging out, man, and thanks for calling in and letting us know what's going on with the proximity principle. Again, tonight in Old Orchard, Skokie, Illinois, the Old Orchard Center there, the Barnes & Noble. If you're listening, make sure you go out and see Ken Coleman there. Also tonight, Anthony O'Neill and Meg Meeker are doing a Smart Parent event, and that is in Minneapolis.

There are a handful of tickets left. Not many, but we'd love to have you. At Minneapolis tonight, one week from tonight, they'll be in Sacramento doing the event. And so on May the 21st, doing the Smart Parent event. This Thursday is the last money and marriage event of this calendar year with Les Parrott, Rachel Cruz. So Ramsey personalities are everywhere. I'll be in Kansas City this coming weekend.

I'll be speaking at Westside Family Church. Come out. I'll be doing all three services on Sunday morning, and I'd love to meet you. And so if you don't have church plans, make sure you come out and hang out where this church is free. Don't miss it. We'd love to meet you. And so if you don't have church plans, make sure you come out and hang out with us. Church is free. Don't miss it. We'd love to have you. We're doing an event that is sold out that night called Outrageous Generosity.

And I'm doing that event. Well, Chris Hogan is actually going to go with me up there for that. So actually, every one of us is out doing something this week. It's crazy. We're all somewhere. So that's the way it is, though. I mean, we get stuff done around here, man, and we're out here helping you guys with your different areas of your life.

Make sure we're touching the career side, the money side, marriage side, the parenting side. See, all of that's happening right there, transforming information and making you believe that if you follow a proven plan in these different areas of your life, you'll get results. You have the dignity of choice, people. You really do. Donald is with us in Riverside, California.

Welcome to the Dave Ramsey Show, Donald. Hey, Dave. How are you doing? Better than I deserve. What's up? Okay. So last November, me and my wife and our two kids came to live with her mom and dad to stay here for six months. We're supposed to be moving out this month.

And to save money so we can move out and basically get a head start. We're about to start. We already have our $1,000 saved up. We're going to start our debt snowball. We've never actually done FPU because I've always worked at night, so it's hard for me to go when you guys have the week classes. So I just wanted to know, should we be moving out of my in-laws house? Okay, so you moved in there six months ago to get ahead financially. Yes. But you didn't do it? No. Life happened. We had something happen. We ended up

separated for three months, and it's a whole story. But we're back together now, and everything is going in the right direction. So what's your household income? $71,000 yeah I would move out I think it's healthy for your marriage and healthy for your future to have your own independence even though it slows down some of the mathematics of what you're doing but the two of you together focused on that

is more important than yeah I'm going to be out on my own if I'm in your shoes you do what you want but that's what I would do this is the Dave Ramsey Show We'll be right back. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more.

Use the promo code Ramsey. So I put some blinds.com shades on my deck i've got a screened and porch thing on the back of my house the sunsets comes blaring right in your face when evening when you're trying to sit there i was up there last night and i hit that button and they went came right down blocked the sun and then when the sun went down a little bit it got a little cooler i, I blew it right up. I love blinds.com. They're cool. Very nice.

Today's question is from Carrie in Texas. Hey, Dave, wondering what your thoughts would be on what an 83-year-old should be investing in. Asking from my dad. He has about $100,000 he's wanting to invest, he says, for us kids. But I also know he needs to keep some available for his own needs not sure how to advise him he's not retired still works his own business at 83 this guy's my hero i love this guy that's me i'm gonna be here spreading hate and dissension every day when i'm 83 that's it i love it just be here stirring up freaking trouble

i love it that's great um if a hundred thousand's always got to his name then you're right he would need to set some aside for potentially his own needs um if it's extra money so to speak and he's already got a good emergency fund and already got a good some good liquidity, some money available for his own needs, and this is money he's just going to invest. He's really not investing it as an 83 year old. He's investing it for you. And so I would use where I in his shoes, good growth stock mutual funds because i'm investing for 20 years for somebody else right he's not buying green bananas okay he's 83 but yeah i get that that's what my grandpa always said that was his joke but um i'm not doing dad jokes i'm doing grandpa jokes okay

that's good but anyway the uh so yeah i'm gonna invest that just like I would have invested it if I was 40, because he's probably investing it for a 40 or a 50 year old you. And so I'm going to invest it in growth, growth and income, aggressive growth and international across those four types of mutual funds and let her grow that. Now, that's assuming it's extra money above his needs now if he needs to carve out some for an emergency fund carve out some for his needs then there might be a very small amount left to do that other kind of investing but very very cool stuff kim is with us in louisville kentucky hi kim welcome to the Dave Ramsey Show. Hi. Thank you for taking my call. Sure.

What's up? I have a question. I have two sons, and my husband and I made an agreement with them. If they make good grades through college, they had to take out student loans that we would repay their student loans back for their undergraduate work. And they both just graduated about two weeks ago. And we had paid all of their student loans off except we have about a year's worth on each that we still need to pay. It's about a little over $20,000 on each loan. So now that they graduated, and I know in the next six months they're going to need

to start paying on those, or we're going to need to start paying on those, or we're going to need to start paying on those. So my question is, one of the things we've been thinking about is taking out a loan from our 401K plan to pay one of those off. Is that a good idea, or is that not a good idea? Well, to start with, you're not paying it off. You're moving it over to a 401k loan. It's not paid off. I mean, you just moved it.

You changed the kind of debt is all. No, it's never a good idea to borrow on a 401k ever. Here's why. Okay? The reason people do it is they go, oh, I'm paying myself interest. I'm going to pay 4%, 5%, 6%, 7% to myself. Isn't that wonderful? No, you just unplug good mutual funds that were paying you 10 or 12 while you pay yourself

a LAMO rate. And if you pay yourself money, you didn't really gain anything. It was your money. So, you know, no, there's no gain there. The second problem is when you leave your company, and you will leave your company, when you die, when you get a better job, or when they fire you, one of the three things will occur when you leave your company not if the 401k loan is called due in full you have 60 days to pay it off if you do not

it's considered an early withdrawal and you get tagged with penalties of 10 and hit with the your tax rate as well so no no no what, no. What's your household income? A little over $200,000. Okay. Is there any reason in the world you can't pay off $40,000 in one year? That would be tough. I'm sorry? Yeah, I think that would be tough.

I don't know that we could... Why would it be tough? You make $200,000. $40,000 out of $200,000 leaves you a lousy $160,000 to live on. Cry me a river. Well, I mean, we have car loans and mortgage payments. So you guys are making $200,000 a year and you're broke. Well, we're not broke. Gross.

You got car loans? We don't have an extra $40,000. You have car loans? We have one car loan, yes. How much do you own your stupid car? About $30,000. Oh, my God. We just bought it about a year ago.

Okay. Listen, I really can't help you get out of debt as long as your goal is to go back in every time you want something. You're going to have to stop this. You really are i mean you need to get on a dadgum budget and clean up this mess and quit buying crap that you don't have the money to pay for oh my gosh you make two hundred thousand dollars a year and you financed a thirty thousand dollar car yeah you need to you guys need to pay off seventy thousand dollars this year you don't need to go on vacation you need to stay out of restaurants you need to cut your freaking lifestyle down and clean000 this year. You don't need to go on vacation. You need to stay out of restaurants. You need to cut your freaking lifestyle down and clean up this mess. No, you don't need a 401k loan.

You make tons of money, and you're broke. You have nothing. You couldn't even pay cash for your own car. This is awful. You have to get control of this. You're going to wake up in 10 years and cry that I have made $2 million and I have nothing to show for it. You've got to stop this and get control of your budget so that you guys can pay cash for things, so you can avoid debt, which gives you cash flow to build wealth.

You've got to do this. So, no, you don't need a 401k loan. You need to straighten up. All right. Open phones at 888-825-5225 you jump in we'll talk about your life and your money it's a free call we're glad you're here thanks for joining us camille is in amarillo texas hi camille welcome to the dave ramsey show hi thanks for taking my call and i'm just thinking about say we have made awful decisions with our vehicles

and so i'm needing your wise advice to tell me what i need to do because i'm obviously not good at making that choice so we have a um yukon that we bought it's been a little over a year ago um we got pregnant with our third child much later after having the other two uh so we were kind of in a lifestyle where we thought, oh, we're done having kids. We can go smaller with the car. Got pregnant with the third, then felt like we needed to go bigger with the car. It was the car my husband always wanted, and I felt guilty, and we got the Yukon. And it was an older Yukon at that because we're broke, and we couldn't afford the new Yukons, obviously. So right now we're $10,000 upside down because we had had my car before that, purchased a year before that.

So it just had engine issues, which luckily the warranty, which I know you told us not to buy, but luckily the warranty is covering that. And so it's really just kind of kicked me into gear in all aspects. I have sat down. We have stopped eating out. I've stopped spending any money. I have sat down. We have stopped eating out. I've stopped spending any money. My husband hates me. Why does your husband hate you? No, I'm kidding. My husband is great. I'm just kidding. He loves me. He's a great guy.

But we've stopped everything. Okay, so your question is what, Donna? I'm really trying to start saying. What's your question? What do I need to do with this car? So we have $10,000 upside down. We owe ride like $29,900 something on it. And I've listened to multiple things. What's your household income? Last year was right around $88,000 take home. We opened an Airbnb this year that is bringing in $1,000 plus. We opened it in Januaryuary so that has really brought an extra income that we didn't have before that well if i were in your shoes i would try to roll up my sleeves and just get the car paid off and drive it as fast as you can i think that's

probably going to end up being your best route with what you described to me but you're right you've got to quit buying extended warranties you've got to quit buying cars you can't pay cash for. You are right about all that. Thanks for the call. We'll be right back. Did you know that 79% of millionaires received zero inheritance according to the largest study of millionaires ever done in North America? We did the study. Airtight Research, our research team is amazing, and we worked with an outside research team to control the variables to make sure that

we were not biased in our process and that the research process we interviewed over 10 160 millionaires learning the details about them they did not inherit their money so so what did they do oddly enough they got out of debt and stayed out of debt oddly enough they invested steadily using their roth iras and 401ks and good mutual funds and oddly enough for 25 years i've taught people to do that in financial peace university over six million people have been through Financial Peace University, learning how to not only get out of debt, but how to save and invest for the future. I'm always a little bit offended and a little bit makes me smile and laugh out loud when I read, well, Dave Ramsey's advice is really good for getting out of debt,

but not very good for building wealth. He doesn't really know investing. And yet my net worth is hundreds of millions of dollars, so I obviously know nothing about investing, you dumb butt. You know, it's just humorous. I've taught more people how to become millionaires than anybody else in north america so i obviously know nothing about investing you dumb butt you know i mean it's it's offensive but it's also just humorous how stupid people are so here's the thing if you

would like to build some wealth and change your family tree, I can show you how. Our team actually knows what the flip we're doing. And everyone who purchases our nine-week class, Financial Peace University, for the first time will get a one-year Financial Peace membership. We'll get you out of debt, teach you to save, teach you to invest, you to how to retire with dignity how to change your family tree put you in a position where you can be outrageously generous it's hard to be outrageously generous when you're broke so you need to get your act together people it's so fun when you do it changes everything so mean, everyone who purchases Financial Peace University for the first time gets the one-year Financial Peace membership,

which gives you access to EveryDollarPlus, the world's best budgeting app tied to your bank, live streams to our live events, our dynamic events, trusted financial coaches. You get all kinds of bonus content in the membership, like the Legacy Journey, which is a follow-up class to Financial Peace University. Rachel Cruz's Smart Money, Smart Kids class, teaching you how to teach your kids how to handle money. The community is unbelievably cool in the membership group.

So all of this comes with it for free for one year. Wow. So, to get in the nine-week class and get the one-year Financial Peace membership included free, just go to DaveRamsey.com, click on Financial Peace University. It is the class you should have been made to take before we let you out into the world. If you don't want to use the web, just jump online. Our Ramsey concierge will help you. 888-22-PIECE, 888-227-3223. Anna is in Canada.

Hi, Anna. Welcome to the Dave Ramsey Show. Hey, Dave. How are you? Better than I deserve. How can I help? So me and my husband, we're not on the same page when it comes to buying a new home. So tomorrow will be one year anniversary of being mortgage free.

So we paid our home in five years. We put a goal when we got the mortgage. We said we'll pay in five years. We did. We paid it. And now I want a bigger home. We have two kids. My parents come stay with us for usually six months a year.

And we have a town home with three bedrooms and I now want to move in something bigger. My husband tells me we have to wait, save more for another two or three years, then we'll move. And I kind of say, well, the prices go up. And, you know, when you want something, you always find reasons why to do that. And he's the one who's telling me not to do that. So I need a third opinion. Well, the thing is this. The shortest path to wealth is to become debt-free and stay that way.

So if I made it to the place you are, I would not borrow again. You couldn't talk me into going back into debt for anything. Now, that doesn't mean that he gets to go buy stuff and do whatever he wants. I did hear that comment dropped as you did a drive-by shooting. But so I think if I'm your husband, I'm hearing my wife loud and clear that she wants to move up in-house. And so we're going to get really, really, really tight on the budget so that we can make that happen sooner rather than later. And, no, he doesn't get to buy other stuff. I mean, you guys have to be in agreement.

He doesn't get to go just buying. Is he going and buying things he wants on debt? No, we usually we just use money we don't we're not we don't have any debt so okay so he's not he's not going it he's not going into debt so but he is buying things that you don't agree with well if it's work related yeah he works from home he is like a contractor and he uh you know buys stuff that he needs for work which I say as long as that helps to bring money, I'm fine with that. But, yeah, he's not going to buy a car or expensive things, no.

Okay, all right. Well, I mean, that makes sense if you can get a return on investment on an item or a piece of equipment or something that helps him do his job better, faster, bigger, makes more money, that makes sense because that then helps you get the house faster, right? Exactly. bigger makes more money that makes sense because that then helps you get the house faster right exactly that's that's his way of saying let's save more and then you know when two or three years we might i mean i think that we can afford to buy that home because the mortgage will be similar to what we had five years ago i'm not saying you can't afford it i don't have any doubt i'm sure you can afford it but the question is what is the shortest way for you guys to have wealth and it's to stay debt free and so you do what you want to do i'm but you ask me what i would do and i'm an expert on what i would do i wouldn't borrow money

um because it the freedom of not having payments is unbelievable when you finally get your house paid off and i wouldn't trade that you know i i think you could really buy a really really nice hotel room for your parents or apartment for them being here for six months for for what you're talking about taking out on a mortgage you're rationalizing your butt off here and so you know you do what you want to do you know you people can afford mortgages but but what you give up is this incredible security and peace that you have and you've short-circuited your wealth building program because you've gone back in debt now instead of building wealth you have to go pay the debt off

and so i'm not doing that. But you could do it if you want. I'm not going to be mad at you. We'll still be friends, but it's not what I would do. Thanks for the call. Open phones at 888-825-5225. Kathy's on Twitter. Should I use my mutual funds that I have for a down payment on a new house?

I don't have any problem with that as long as you're out of debt. We tell folks to be debt-free and have your emergency fund in place before you buy a house but um you know i actually would use my mutual funds because i'm the whole goal is i would pay it use them to pay down on my house if you own the house and because we want to get the house paid off again because it is the shortest route to wealth. Why are we taking a route to wealth? Well, not because we want to be wealthy for the sake of being wealthy. We want to be wealthy because of what it does. What it does is it allows us to be outrageously generous.

What it does is it allows us to change our family tree. What it does is allow us to retire with dignity and not count on social insecurity you don't want to work your whole life and say i sure hope the government which is well known for its ability to handle money will take care of me that's a dumb butt statement and so instead you have to build wealth in the house of the wise are our stores of choice food and oil. How do you do that? The typical millionaire and the largest study of millionaires ever done that we did for Chris Hogan's book, Everyday Millionaires, pays off their home in 10.2 years. So the goal here is get the house paid off.

That's the goal. One of the big items that gets you into the, you know, launches your wealth. Not just the freedom from credit card debt, but launches your wealth. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. Did you know you can now listen to the Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at Dave Ramsey.com slash show.