The Ramsey Show - App - Is Short Term Pain Worth Long Term Gain? (Hour 2)

Episode Date: July 11, 2023

Ken Coleman & George Kamel answer your questions and discuss:   Paying down debt or getting a CDL, Taking a pay cut now for long term benefit, Is getting paid via the Cash App a good idea? Should I make my husband be a stay-at-home dad? Renting out my house to pay my new mortgage Getting my mom on the Ramsey plan. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/george Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving in storage studio, this is The Ramsey Show, where we help you win in your life, specifically your money, your work, and your relationships. I'm Ken Coleman, joined by George Camel. We are here for you this hour. 888-825-5225. 888-825-5225.

George is our money expert. He's in the saddle, ready to go. I'll help you with work-related issues. You're dealing with a toxic boss or co-worker situation. Maybe you just feel stuck. You don't hate your job, but you know there's more should i quit my job is a question we get a lot on the ken coleman show we'll take those questions together because your work and your money are inextricably tied together so let's go you ready to go my friend

i'm ready george has got the bomber jacket on if you're listening to us via your favorite podcast app or radio station you can't see him but he's uh he's just all dolled up we need to start doing a little clothing segment ken yeah well our video audience on youtube can see they appreciate it but he's got a great bomber's jacket on he's very very very sharp looking today thank you and uh and we've been told we are the uh of the ramsey personality duets we are the root beer float wow and i'd love to know all of the duets we need to name them them all. Let's have the audience do that for us. Yeah, pick your duet and come up with a... I feel like John Deloney is kind of like a Mountain Dew.

It's like a Code Red situation. Yeah, it's some type of energy drink that's unhealthy. Nobody should be consuming it. Yeah, not at all. But we love him. We love him. Let's go to Josh in Greensboro, North Carolina. Josh, how can we help? Hey, thank you for taking my call. My question is, should I pay

$5,000 to get my Class A commercial driver's license or pay off my $15,000 in debt first? Okay, so before we get to the debt thing, I want to jump in here. Is this a long-term play for you to get your license and drive a truck? Is that something you want to do? Yes. All right. And how quickly would you start driving, and then how much more money would you be making than you are now? The class would take about 10 weeks to do, and I'd probably be making at least $10,000 more a year. Okay. So that would help. Yes. All right.

George, I just wanted to know that because I think that plays into this. I don't think this is an either-or right at the outset. That would be my take, but I want George to dive into this. I think this is a both-and. So how much money do you have right now? Probably about $1,000. Okay. So we're kind of at this baby step one, getting started, and you've got $15,000 in debt. What kind of debt is that? About $10,000 in student loans and $5,000 in Could you do extra work, overtime, side jobs, side hustles?

Yes. Okay. Because my question is, how quickly could we pay off this debt and then get that $5,000 license covered as well? Could you do all of that within a year? Yes. Okay. I'm leaning towards that because I think if you kind of put the cart before the horse, it may actually slow you down while this interest accumulates because that credit card interest is a killer, man. It's probably over 20%. Yes. So that tells me we've got to start knocking away some of this debt to clear the room to cover this license and do it with some peace. And I think you can do that quickly because this is a big goal for you to get this license, isn't it? Yes, it is. Which means you're willing to do whatever it takes to get there.

And if that means you're working 60, 70-hour weeks, you're okay with that. You're not scared of work. No, I'm not. So I would set an aggressive goal for how quickly we can pay off this $15,000 because that's going to free up those payments. What are your monthly payments on that debt? Credit card in total is probably about $250 for minimum, and then the student loans, I haven't really looked into that quite yet. Okay.

Well, we're talking hundreds and hundreds of dollars a month that would be freed up, that would allow you to then save up real quick for this license. You can cash flow that at that point. Yes. How much of the $15,000 in debt is credit card versus student loans? $5,000 in credit card and $10,000 in student loan, roughly. Well, how quickly do you think you could pay this off, the $15,000, if you really get after it?

What do you think? What do you think you can earn in Greensboro knowing what you can do? Probably six to nine months. Okay. And then three months after that, you could probably scrape together the $5,000 in this license yes okay all right i gotta throw something here joe i don't mind you cross it out there i don't know this is a this is a choose your own adventure okay well i mean we understand the principles i because he's going to make more money being a truck driver and he's doing what he wants to do it gets him in there. Could you meet me in the middle, George?

I'll meet you in the middle. Could he pay off the $5,000 in credit card, because that's the high, high interest, and that's going to free up $250 a month. And then he gets the license, gets the increase. But I want him doing both. I want him working the snowball. So here's my theory, or here's my question, George.

He knocks it. He holds off on the cdl until he pays off the credit card debt it's about five thousand dollars all right he takes that 250 that he's been doing and he puts that towards the student loan so he keeps doing the snowball but i want him also working the extra hours to come up with the five uh for the uh cdl license yeah are you okay with that? I wouldn't lose sleep over it. That's for sure.

But it's not your favorite thing. It wouldn't be my, I would, the way I'm wired, I go, how do I do both and do it in a shorter timeframe to go, hey, how do I do this in six months to clean this up and cash flow this? And then I'm willing to do what it takes knowing the gap. Yeah. That's me personally. I get it.

But I think Josh, he's,'s again he's not scared of work i think if he started working 70 hours a week for a short season he's going to be able to clean all this up and get the license is this an instant pay raise josh uh yes it would be that's what i'm looking at that's a good deal so i'm looking at then i take the pay raise and i put all of that which is going to be five six seven hundred bucks a month yeah he said it was about $10,000 more. Is that what you said, Josh? A year? Yes, at minimum. It could be $10,000 to $20,000

more. Either way, get after it. The opportunity is going to be there. I like George's route too. What we're talking about is $20,000 we need to come up with. That's exactly right. $20,000 gets you where you want to be in your life. You know what I'm saying, Josh? Yes.

Yeah. You ready to do it? Are you like ready? Like you're sick of this? You're done? I'm getting out of this? I'm moving forward in my life? Yes. Well, get after it, my friend. He sounded confident. I feel good about it. You know what he sounds like? He sounds convicted. That's beyond confident. He's like, yes. Yes. That's why I asked him, is this what you really want? Are you really willing to do what it takes? Because some people go, I don't want it that badly. I'm not willing to do like the third job. Right. I don't

want it that badly. He's saying this is worth it. This is where I want to go. And I'm willing to do what it takes. And I like your approach because what that does is it makes him even more motivated to get inside that truck cab. I get it. The carrot is dangling for that goal. And I want to stipulate and that's why I left myself open for some criticism here. I believe the baby steps all the way, all the way through. I'm just saying in this situation, if I can do both, if I can keep

going on the baby steps but also fund an increase in income, I'm going to try to do that if I can. I like that plan. I like your plan. I think it gets you more excited. It's tomato-tomato at this point. Yeah, there you go. Or Toyota- if I can. I like that plan. I like your plan. I think it gets you more excited. It's tomato-tomato at this point. Yeah, there you go. Or Toyota-Toyota.

Thank you for that. That's a deep cut. Only our really informed listeners know what that means. I found out from listeners that I was saying it correctly. It is Toyota based on the actual founder's name. Oh, we'll have to debate that on the commercial break. Is it Toyota or Toyota, as George says, and supposed fantasy listeners of whom we have no proof. Hey, we'll debate it during the break.

Don't move. This is The Ramsey Show. Welcome back to The Ramsey Show. Thrilled to have you with us. The phone number to jump in is 888-825-5225. That's 888-825-5225. That's 888-825-5225. And I am looking for our question of the day. Here it is. This is from Neighborly. The question of the day brought to you by Neighborly, your hub for home services. With 19 service brands nationwide,

you can find reliable help from great locally owned businesses like Air serve mr appliance and dryer vent wizard all titles that no one will ever ascribe to me george no one will ever say there's ken colvin the dryer vent wizard mr appliance ken colvin has walked into the room never gonna happen but that's okay george that's why i go to neighborly.com. They'll help out with just about anything for your home. Today's question comes from Gene in Wisconsin. I've been offered a job that's a short-term pay cut, about 25% less than my current pay for roughly the first six months, but would be very fruitful in the long run and is in a field I'm really excited about. I'm hesitant because I don't want to put off some other goals, buying a house, wedding savings, et cetera. Should I put my short-term saving goals for this career change

or wait for the next opportunity once I'm through my upcoming life changes? Should I put off the short-term savings to do this or do I just wait until he's got this stuff covered and then take the pay cut? That's interesting. This is not as cut and dry as I thought it was going to be as we started out because what I don't know is the buy in the house, that's easy. Wait. There's always going to be other great houses out there. I want you in this new career. So this is a little bit of what I did, George. When I got into broadcasting, Stacey and I strategically took a step back. We cut our expenses. We sold our home. We knew we were going to take two steps backwards to go forward, and it worked.

And it was very strategic. We knew it would work. It wasn't some big whee! It wasn't a pie in the sky, wet finger in the air. So the house I'm not worried about. The wedding is the only one, George, that gives me pause because I don't know if we're delaying the wedding. That's a little bit tricky. I'd have some conversations about how is this wedding getting paid for?

What is the budget we're trying to set? Can we get there even with the pay cut? That would give me a lot of peace to move forward because I like this plan. I would be willing to take a pay cut for six months. I would do it. I want to make sure that spouse or potential spouse, I just don't know what's going on here,

but I would absolutely do it. I would take the 25 25 pay cut for only two reasons okay it gets me in on the ladder and it's the ladder that i want to climb yeah i said i'm really where i want to be i'm yeah i'm sorry so i'm on the ladder and i'm jacked to be on the ladder so that's why i would do this i wouldn't delay it i'd go ahead and take this opportunity now and then i would adjust my lifestyle on the wedding. I'd change my expenses on the wedding

and I certainly would relax on the house until we get that pay bump. Because the pay bump is coming. That's my hope. It's not very clear. It just says would be very fruitful. That sounds confident. I think it's coming. Six months later, there's a pay bump. But there's a lot of false promises with some companies and careers where they go, oh, well, within six months, you'll probably get a raise and you'll probably get promoted. So I hope it's coming. Six months later, there's a pay bump. But, you know, there's a lot of false promises with some companies and careers where they go,

oh, well, within six months, you'll probably get a raise and you'll probably get promoted. So I hope it's a sure thing. Yeah. Thank you so much for the question. All right, let's get to Caden, who joins us now in Orlando, Florida. Caden, how can we help? Yes, I get paid in cash for my side gigs. I was wondering if this would be a bad idea.

Why would it be a bad idea? What kind of business is this? I do cattle. I prep cattle for show, kind of like the pit crew in the NASCAR race. No kidding. Great explanation because you answered my next question. I was like, what does that mean to prep cattle? I knew what it was.

I knew Ken didn't, and so I'm glad you clarified. That's great. So you're brushing the cows, getting them looking all shiny and neat? Yep, pretty much, yep. We put glue and paint in them as well. And who is paying you? The client, whoever wants that service completed to their cattle at that show. And you're asking them, hey, can you pay me on Cash App?

And they say, okay. Yep. What is your concern? So you called us because you have some type of a concern, I'm guessing. Yes? Yes, in terms of investing. What's that have to do? Hold on on a second what does that have to do with the cash app oh are you investing in the cash app as well i would just not invest in the cash app i

would use it as a payment platform not as an investment platform so ken for those that listeners i don't i don't even know so in the cash app they've become kind of investing platforms where you can invest in single stocks and crypto and all these different things through the Cash App, as well as using it to pay peer-to-peer. And so I would not mix the two things together. And if that is something that you're tempted by, I would maybe switch to like a Venmo.

Okay. And strictly use it as a payment platform. And as far as it being a bad idea, it's fine. I mean, I pay my landscaping guy through Venmo, and I assume that he's reporting all of the income as a business account on his taxes. So it would be a bad idea if this was fraud and you weren't reporting the income.

But other than that, it's fine. It's just another payment platform. Yeah, the biggest thing was just be investing. Is it a wise thing to do? You're getting $500 and then Cash App is like, hey, you got $500, you should invest in some single stocks right now. Right? Is that kind of the idea?

Yeah, but more so maybe doing just a little bit of investing and not sitting there and then investing the 500 dollars just exactly little by little and that thing as i go through and i grow through my life to where you know when retirement comes around and i would immediately transfer that income to your bank account to a checking account and then invest from the checking account through a different platform something more legitimate if you're doing an ira on your own you can do it through vanguard

fidelity schwab i don't really like these kind of little investing apps that cause you to make bad decisions because they're giving you notifications yeah i feel like it's a slot machine it has you're just sitting there and you're just i'm just hitting the button i'm hitting the button and all of a sudden you can whittle it down. But someone's re-lettering your card. That's right. With income from your job. Yeah, I like that advice.

Let's go to Jacob in Oklahoma City. Jacob, how can we help? Well, I'm wanting to know what the best method is. Jacob, I think you just took your phone and put it under your armpit. Can you, can you pull it back up close to your ear? Yeah, it's, uh, it's up to my ear. Okay. There we go.

I'll speak a little louder. Okay. All right. I'm wanting to know what the best method is to save money to, to buy a sailboat. Cause I don't, I don't want to buy it. I want to, I don't want to borrow a loan. Okay, cool. What's your financial situation?

Are you debt free? Do you have an emergency fund? Do you have savings? I have a checking account. I don't have a savings account. And I'm debt-free. I am currently employed. And I don't know what the best method is to save money because I thought about putting it in a mutual fund or putting it in a mutual fund or putting in a bank account or putting it in a store of savings such as precious metals. But I don't know what the best method of saving money is. I sure though don't want to borrow a loan. Good. Well, I'm glad you don't want to borrow a loan. I would put this in something better than precious metals or a mutual fund because how far away is this goal? Do you want to buy this

boat in the next year or two, or is this 10 years? Between five to seven years. Okay. My personal preference would just be to put this in a high-yield savings account online. It'll help. It'll keep it safe. It's FDIC insured up to $250,000 per account category, and that will let your money grow at right now about 4% or so, which is fine. The goal here is not to double your money for the sailboat. You're more likely to lose your money than you are to double it if you start to play that game. So I would just put it in a high-yield savings account and start to set an aggressive goal and say, hey, how much does the sailboat cost? Okay, so, well, a high-yield savings account protects my money from inflation,

because I remember in 2020, inflation was like 10% or something. Inflation, you're going to be about matching inflation right now with these high-yield savings accounts. I would not worry about inflation. Your savings rate is way more important than the inflation rate. So I would just set a goal. Don't worry about it. Stop watching the headlines. Don't put it in precious metals.

Just put it in a savings account and make sure you're debt-free. I'd want you to have a paid-for home before you go out and buy a toy like a sailboat. But it's a great dream. Jacob, I got 10 seconds. Give me a sailboat term that I can use with George. What would it be? Enough room. Oh, very good. George, give me enough room to get into

this commercial break. Back away, please. Well done. I don't even know what that means. I didn't have time to ask you. We'll Google it. Yeah, we'll Google it. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid

miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of healthcare costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets at chministries.org slash budgets. Welcome back to the Ramsey Show. I'm Ken Coleman. I'm joined by my colleague,

the esteemed, the incomparable, George Campbell. That was pretty good. You liked it? Yeah. Yeah. I tried to hang out with Ken. I mean, it's just dopamine on steroids. There it is. Speaking of dopamine, we got your dopamine. We'll give you some hope. That'll give you the hit of dopamine. Some hopamine. Hopamine.

Oh, he did it. Kelly Daniel liked that one. She actually did. Like, Kelly's a tastemaker, and if she gives you the, oh. I think I transcended dad joke on that one. She actually, what you kids see in the control room, she actually toasted George with her tea or coffee, whatever she's enjoying right now. She sits in for the esteemed and incomparable James Childs,

our fearless leader. That's right. He was doing some ministry time right now. I just want to let the audience know. Ministry time or shuffleboard and bokeh? No, it's a legitimate ministry time. Oh, okay. Very good.

He's a good man. Good man. A good husband. I'll tell you who else we're excited to talk to today is Sarah, who joins us on the line in Chicago. Sarah, how can we help? Thanks for taking my call. You bet.

What's going on, Sarah? Awesome. My husband and I are on baby step three and cannot get out. Wondering if husband should stay home to get really radical with baby steps to just start stacking cash and propel us forward. Whoa, Alex. We have a one-year-old, a two-year-old, and a five-year-old. Okay.

And how would he staying at home allow you guys to make progress? Explain the numbers. Absolutely. So child care here in the Chicago area for three kids is $4,600 a month. Holy smokes. Yes. For two kids, because my oldest is going to public school in August, for two kids, because of their ages and also every year they increase tuition, which is always expected. It goes to $3,700 a month. So there's only a $900 savings.

We make $260,000 as a household. I make $170,000, and my husband makes $90,000. So when you look at the take-home, I take home after taxes and health insurance, which is on mine, my take-home would be $8,300. And my husband's take-home with taxes, because we're a dual-income family, is $4,800. So he's pretty much paying the daycare bill. And we just have no margin. If something comes up, whatever it might be,

we've built up Baby Step 3 so many times. We've been almost on it two years. We paid off $105,000 in debt in 14 months with one kid. We got after it big time. We cashed out stocks, pulled a car, got a little leases. We went really at it. But we just can't propel forward because we had more kids. We've moved.

We've propelled our careers, but we can't get ahead. So we're looking for something to unlock us. But will the margin be there? Yes, I understand that the expense goes away, but you're still at the same $8,300. Yeah, no, that's a great point. So looking at the EveryDollar app, which we love, and we've been through FPU, with my take-home of $8,300, it gives us still less to budget after doing house and insurance, solar, health insurance,

et cetera. It would give us about $2,200 less to budget. So we would try to maneuver that to be- I'm confused though, because his take-home pay is still more than you're paying for daycare. So how do you end up with more money if he stays home? Well, I think we also look at cutting different budgets and different things just to get radical because we also have to pay for after-school care as well. So why not? Oh, you're saying there's other expenses if they stay in daycare. I still think you're going to net.

I mean, I'm looking at the numbers here. You're paying 44 in take-home pay in daycare. I still think you're going to net. I mean, I'm looking at the numbers here. You're paying 44 in take-home pay towards daycare. He's making 57 in take-home pay. Oh, no, he's making 4,800 in take-home pay. I understand, 57,000 a year is what he's bringing home. Oh, yeah, sorry, sorry. And you're paying in daycare 44,000 a year if it goes down to 3,700 a month.

Right. But that's $900, George. You share, but there's $900 right there. Right. Okay. I think that's where also, too, like we've been trying, like cash flow is very challenging for us. We've been trying.

We've been trying to, like, get ahead. It just seems like something always kind of comes up. I think there's other expenses. Your daycare is astronomical. Don't get me wrong. Yeah. But you guys are taking home over $13,000 a month. We are. So where is the other $9,000 going?

Yes. I'm looking at the house is $4,500 because our rent's $2,400. And then to keep the house operating, it's about $4,500. We have gas. I'm in sales, so I travel for work. And then, I mean, we've had to, you know, I think our discretion got a little out of hand, so we've carried that back. We've had some travel. We had a parent death in the family. We've had two babies. We've had a ton of medical just because we were paying off debt. We didn't go in stork mode, so we're just behind. We're trying to figure out- Yeah, the debt is gone. Life has hit you, but now we're looking ahead, and we're going, all right, the debt is gone. Life's not always going to be this chaotic. We're not always going to be in daycare, but just look at the numbers. The first place I would cut is not his entire income.

The first place I'd cut is everything else in the budget, including the discretionary spending. I have a suggestion, Sarah, that I want you to be open-minded to, okay? Yeah, absolutely. That's what I recall. Okay, great. We're struggling. And this is from our experience, from Stacey and I's experience when the kids were younger. My kids are teenagers now, but when they were younger, I was here at Ramsey, and Stacey was working full-time.

And we needed someone to be there. So they were in school, but we needed someone to be there when they got home from school around 2.30 until around 5.30, 6, so that the kids were doing their homework. So we looked at that, and we found a nice lady. We looked for, I don't know, I'd say a long time, I'd say four or five months, and we found the right person. And it was a retired lady.

She was a grandmother. And so she was a fraction of what it was going to cost us to use a service. And I would just consider that if I were you. If your husband kept his income, and let's say, because you're already going to pay for after school care anyway so what if for the two littles that are not going to be in school in the fall you find a grandmother somebody that you met through a church or a neighbor or somebody in there you check them all out care.com and find a part-time nanny yeah but just what if we did that

and they were in your home they were being being cared for, the person did laundry, you know, they helped with meal planning, made your life. What's that? Yeah, that would be amazing. But you have to look into that. This is not like something that I just crafted in my head. Right. This is possible. And so let's just say that that person, George, do some math for me.

If you pay them an hourly rate of 15, hour, I don't know what that would be. Yeah, easily $20 for Chicago area, I imagine. $20 to $25 because we did look at nannies. That may not work out. It may not work out. But the point is if you figure out a way, some of the hours, you just got to find a way. I don't think him coming home is the right move here. Is this something he wants? Okay. You just got to find a way. I don't think him coming home is the right move here. Is this something he wants?

Okay. He's open to it. We just are trying to get ahead. I think he needs to be working more, not less. Yeah. I think he actually needs to work. I think he needs to work a second job. Maybe for three months, six months, a year.

Truthfully, the house payment, if it's just your income, the house is just too much at that point. So if you lose this income, the numbers get skewed in a bad way. And so I would keep the income and I'd find every other place to cut. Because it sounds like, truthfully, there's probably some other things we could cut first. And this just feels like a nice shortcut to hopefully fix things. But my worry is he stays home, nothing is fixed.

It's still chaotic because the numbers didn't really change. Right. Right. No, that's fair. Thank you. We're just looking at all sorts of options. So you guys heard my first phone call. I'm glad I got through. Listen, go find your Mrs. Doubtfire. I think that's the play. I really do. I really do. I think the number is going to be in your favor, but run the numbers, crunch the numbers based on your market and we'll see, George. But I like that move. They're not in the daycare system. They're in their home.

That person can also do some things around the house. You heard how she was like, oh, that'd be nice. Imagine if they're doing laundry, helping with meal planning. The daycare struggle is real. It is. Especially in these high-cost living areas. You don't get any of those home benefits. They don't do your laundry.

They're not doing meal planning. That'd be nice. They're just chalking your kids full of gummies and what do you call those? Goldfish? Those cheddar cheese snacks that you love so much, George. I do love them. George, you're going to be a dad. It's going to be here soon. I'm dreaming about it. Oh, this is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by George Campbell, and he's wearing a fantastic bomber's jacket here. So if you don't watch the show, you'll want to tune into that. Some of the smaller gentlemen out there, they can see what he's wearing,

and you can pull those off as well. That's my target demo for the small dudes out there. I got you covered. Let's go to Christian in Atlanta, Georgia. Christian, how can we help? Hey, guys. How are you doing today? We're having a blast. What's going on? Yeah, it sounds like you're having a fun time. My wife and I are in a very unique opportunity where our name is up. We're next on the wait list for our community to rent out our house.

And we only have three months to rent it out once our name comes up, and it could be tomorrow or it could be two years from now. And we're wondering your opinion on renting it out versus just sticking where we are. We're on baby step six already, so we could just keep paying down the mortgage and be out of debt in probably five to ten years. I've got a couple questions. Is this like a real hot neighborhood to the point that they've got this kind of process where it's almost like a lottery where it's like, this is your chance.

There's a wait list. There's a wait list just to be able to rent your home. Yep, number one. Where is this in Atlanta? Do you mind telling me? Yeah, we're in Dunwoody. Oh, that explains it right there in the circle. Okay. So you're getting a little starry-eyed going, we could rent this

place for four grand a month. Yeah, well, that's what I'm asking. What's the rent? What could you get? What's the going rate? What do you think you'll get? Yeah, realistically, we could get between $5,000 and $5,500 a month, and our mortgage payment is about $2,600 a month. Oh, I'm so excited to have George answer this. George, I want to know what you're going to say here. I'm such a Debbie Downer dream crusher. Go ahead. I may have questions. Well, what you're going to do is you're going to have to go buy a super expensive house and get another mortgage. Which we don't want you to do. That's the problem. And then hope that the idea here is that the renter,

they're paying the mortgage for us and everything's going to work out perfectly. What if he rented somewhere else, George? Well, I don't think you guys are going to go rent somewhere else. My guess is you're going to want to go buy another house. Yeah, we have a six-month-old kid. And part of this is we're currently in a townhouse and we bike a yard. And so that's part of the motivation. The six-month-old needs to run around, Ken.

Needs to run around the yard. Right. Oh, not yet. He jests. He jests. I'm jesting. I'm having some fun with this, too, because here's the deal. Even if you didn't have the kid and you didn't want the yard

and you went to rent, rent in Dunwoody in that area is very pricey. So this is, again, you're not making any progress financially. At least that's the way I see it. If you want a single-family home with a yard in your area, what would that cost? What's the home value? It would probably be between $500,000 and $700,000. And I assume you guys don't have a down payment.

You'd have to do some kind of HELOC situation, cash out refi to get some money to even put down on this house. No, we could get $130K. We've got about $90K cash and about $60K in investments right now. But $130K on a $700,000 house, it still leaves you with almost $600,000 mortgage. Yeah, it'd be a lot. It just feels like it feels good to get the rent money because it's higher than our mortgage, but you're also going to then absorb a huge mortgage on the other side, which is going to stress you guys out and lose the home you're in. I just, personally, I would get excited about it for about 10 minutes, and I'd talk it over with my wife, and we'd be like, yeah, we're just not going to do it. It sucks, but we're just not at that place where it makes sense.

Yeah, even though the interest rate, it's like 2625, and it just seems like such a once-in-a-lifetime opportunity. Yeah, you're going to get a $600,000 mortgage with a 6% interest rate going, oh my gosh, our mortgage is now $6,000 a month. It's not worth the spread that we were making on our rental. Mortgage rates are more than six right now. They're over seven. Am I right, George? Yeah, on a 30-year. Oh, 30, yeah, I'm sorry.

The 15's not even worth it. Here's the deal. Here's what you're doing. It's not worth it, but I want you to see what you're doing. Because this is very normal, 30. Yeah, I'm sorry. The 15's not even worth it. Here's the deal. Here's what you're doing. It's not worth it. But I want you to see what you're doing. Because this is very normal, Christian. You're getting hung up on the interest rate that you have now, and you're going, that's such a good deal.

But you're looking at one number. You're not looking at all the numbers. And what George and I have attempted to do here is walk you through all of the numbers. Make sense? Yeah, and I have crunched some numbers on opportunity cost and all of the other things, the other expenses that go into it. There's also risk.

That was the root of the question. Yeah. Yeah, it certainly opens us up to more risk. And the thing needs a new roof or a new HVAC, and then your new house needs a new HVAC, and now you're all of a sudden going, this was a bad plan. And I assume you guys have an amazing income. It sounds like you're doing so great financially that you don't really need this rental income. It's not going to change your life. That's true. Yeah. Thankfully

to my parents who are huge fans of the Ramsey program, my wife and I have really good financial habits, and we actually just crossed over the million dollar mark less than a month ago. Amazing. Oh, wow. Congratulations. You're already there. Yeah, don't do this, my friend. Thank you very much. Don't get sucked into the matrix, okay?

The way I would do it, and it's old school, and it works, and it's slow, I would pay off my primary residence and then stack up cash and buy a rental and find a deal and do it the right way. Yeah, good man, Christian. I love that. You're crushing it. Yeah, wow. Let's go to Wyatt now in the Windy City, George. Chicago, Illinois. Wyatt, how can we help? Kevin, George, how's it going, guys? Well, we're having a blast. How are you doing?

I'm doing fantastic. Thanks for taking my call. So I'd just like to start off by saying I started listening five or six months ago and in two weeks I'll pay off the rest of my student loan debt and then cash flow my senior year so thank you guys give us the numbers on that so people can hear that it's it can be done how much did you pay off all right well 50 I will in two weeks so I need two paychecks to do it will in two weeks. So I need two paychecks to do it. But in two weeks, I will finish paying off $5,700 in student loans. And then I'll be able to cash flow the senior year. That's awesome. Basically just because I chose to stay in state and living from home.

Good for you, man. Thank you, guys. Yeah. So I appreciate that. But I'm calling today because of my mom. And she is 53. And she has a $72,000 HELOC. And it's my opinion that she needs to go gazelle intense because she doesn't have any retirement. And I'm starting to worry about her that I'm going to have to take care of her.

So my question is for you guys, how can I, as my mom's son, get her on board the baby steps and the Dave Ramsey plan? This is the age-old question. How do I get someone else to do something that they don't want to do? Well, yep. I don't think she likes being in debt, and she's starting to form a plan, but I don't think she realizes the situation that she's in and how bad it is. Has she watched any of the show or listened to maybe a podcast? Is that something that she would do in her normal rhythm? Not necessarily in a normal rhythm. I've shared

one hour of the episodes from Spotify. I'm not sure if she listened or not, but she is someone who is willing to learn and grow. How often do you see your mom? Well, I'm in Chicago for the summer. I live from Massachusetts, so I'll be living with her when I begin the fall semester.

So I'm going to be with her every day starting in September. Cool. Well, what if you watched FPU with her? You took her through Financial Peace University and said, hey, mom, I'm going to pay for this. Here's all I'm asking you to do. I'm going to come over. We're going to have dinner once a week. And I want to just watch another lesson with you. We'll just have a conversation about it and see what you think. Would she be willing to do that? Yeah, I think she would be willing to do that, definitely. And I think if you come at it with empathy, because I know when you're a son going to his mom, giving her financial advice,

it just feels weird because she's like, I still remember when I changed your diaper, dude, and you're trying to tell me how to live my life. And so there's going to be a bit of that. And so I think the more you come at it with empathy, the more you reveal her own pain to her in a way that isn't judgmental, but it is out of love. And you go, mom, listen, listen to what your retirement looks like. If you keep this up, I don't want that for you. And as much as I love you, I don't want to be taking care of you in your old age because you didn't take care of your own finances. I want you to have the great retirement where you're not reliant on me. And if you do all of that with a spirit to teach a spirit to love her well, I think she'll turn around. And it may be longer

than you want it to. And she's at 53. It's harder to change those habits that she's had for many, many years, right? And there's a lot of unveiling she needs to do, which is why Financial Peace University is so great. Because you go, oh, I thought the HELOC was the solution. Turns out it was a terrible shortcut. So I'm going to gift you Financial Peace University to go through that with your mom. And I hope that that turns her around. Of course, encourage her to listen to the show, the podcast, give her the total money makeover. Try it all. She may be a book person versus a video person. Try it all and see if we can get her on board. So hang on the line. Skylar's going to pick up. We'll gift you one year of Financial Peace University. Appreciate you calling in. Congrats on the success. Well done, George.

Always good to be with you, my friend. You too. Thanks to Kelly Daniel for steering the ship this hour. Thanks to you, America. This is The Ramsey Baby Steps, go to ramseysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation.

That's ramseysolutions.com and click Get Started.