The Ramsey Show - App - It Wasn't Easy, But Every Moment Was Worth It (Hour 3)

Episode Date: June 27, 2023

Rachel Cruze & John Delony answer your questions and discuss:  What to do when you can't agree with your spouse on how much you can spend on a house, from the blog: What to Do When Spouses Don't Agree on Money "Should I focus on paying off my mortgage or investing for retirement?",  An inspiring story of how much peace and stability comes with finally being completely debt free,  Want to do your Debt Free Scream LIVE on the air? Fill out your Debt Free Scream Application today,  What to do when you have family members that won't listen to your money advice. 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/TRS 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 and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am Ramsey personality, Rachel Cruz, hosting this hour with Dr. John Deloney, and we're taking your calls. It's a free call anywhere in the country at 888-825-5225. So we're talking about, again, your careers, your relationships, your money, what?

Just the way you introduced the show, it's like you're trying to remember what my name is. I am co-hosting with- Called you Josh last time we co-hosted. That is true. You did call me Josh. Called you by the wrong name. So I do have to remember your name, John Deloney. That's fair. With Dr. John Deloney. And I'm here with Rebecca Cruz and we are taking your calls on life and money.

I was Rhonda earlier. We're excited to have you. Glad you're here, America. All right. First up, we have Heather in Birmingham. Hey, Heather. Welcome to the show. Hey, Rachel and John. How's it going? Partying. We're doing great. How are you? Love it. I'm doing great. So my husband and I, we're both 33 years old. We're having a little disagreement on how much to spend on our next house purchase slash house and renovation. And I guess a little bit about us, we have $625,000 in cash, and we make a little under $300,000 a year. We have two small children. And basically, the disagreement is we started

off saying we want to pay cash. But where we are in Birmingham, you know, these little 1500 square foot tiny homes are going for like over $400 a square foot, which I'm sure y'all seen that in Nashville a bunch. And my thought is, why don't we get you know 15 year fixed mortgage paid off in two three years whatever it is and be able to buy a little bit more to last us maybe 10 years instead of five years whatever that may look like and i feel like i've gotten him on board um to get a mortgage but he wants to pay it off in one year and i felt like the big picture of this is all silly. And there's probably people listening to this laughing at our question. No, no.

Not even a little bit. More direction from you guys of like how we should approach this. Cause it's so different. Cause the 15, keeping a mortgage for 15 years is just not even on the table. Sure. Yeah. And I would say your, your situation is better than most people even on the table. Sure. Yeah. And I would say your situation is better than most people who call the show. Most people don't have 600 grand in cash plus more than a

quarter million dollar a year income, right? But the challenge y'all are experiencing is universal. You want this, he wants that. And it comes down to negotiating or navigating those waters. So that's universal, man. So no, nobody's rolling their eyes at you or if they are, it's because they're jealous. Yeah. And Heather, I would encourage you guys, you're not too far off.

You're really close. At this point, it's basically like, do we pay it off in a year or two years? And you could just split it down the middle and say you're half, or you just pause and wait a year, save up cash and pay cash for it. So when he're half, or you just pause and wait a year, save up cash, and pay cash for it. So when he says, I want to pay it off in a year, I'll do a mortgage,

but we're paying it off in a year, what's the difference in house between one-year payoff and a three-year payoff? Well, I personally think we probably need something to get us to be in a house that's going to last us at that 10-year mark. I kind of think we need something more like we can pay it off in maybe three years, like talk about like $100,000 a year. Because he talks about wanting to be gazelle and tense about it, but I'm like, I don't feel like we need to to be and nor is that y'all's teachings either it's not but i'll also tell you i come from a history of financial insecurity and so whenever we got a mortgage we didn't go babe gazelle intense but we my wife and i did go faster than i would normally recommend to another family and so there is something important about sitting down and getting to not not spitting and throwing spit wads at each other over one year three years three years one year but listening to him if he

says hey it it i can't i won't sleep for 36 months knowing that one thing goes wrong at my job and my family we can't make this mortgage payment. And so there's something about that inner terror, that inner fear that I know that I live with. And you're on the other hand are saying, I don't want to be doing this again in three years or five years when the kids get bigger and a partridge in a pear tree, right? So I think it's listening to each other and then being really honest about, okay, this is the house that we can pay off in one year. If we go gazelle intense, we paid off in one year. This is the house we can afford. Here's what it looks like. Here's the neighborhood it's in. If we paid off in three years, here's the neighborhood that it's in. Here's the house that it's in. And let's just use real pictures and real numbers and real

data. That way it takes it less out of the ethereal realm. But I do want you to have a heart-to-heart conversation about how y'all respond to the anxiety of owing somebody money. Because it sounds like this is entrenched in his, like, this was a goal, this was a goal, this was a goal, you got it. And now it's like, oh, let's buy another house and get another mortgage. And that's just hard to, it's tough to swallow. Heather, what's making you guys move? Where are you now? Well, we're currently in Birmingham in a rental house. And we moved. We were in Atlanta for almost a decade.

And then we moved to Knoxville. And then now we're in Birmingham. And it was for a job relocation, which that's the other part of this. You know, his income almost doubled through this move. So that's the other part of the equation. We haven't really seen before that much income. So I would tell you that we intentionally compressed what the house we bought

because the temptation is to let your standard of living rise with every new raise you get. And it continues to float and float and float. Now, make no mistake, you guys are so far ahead of the curve. You can do whatever you want. Three years, one year, five years, you can do whatever you want. But there is something to be said for having a little bit of discipline in this moment when your life has drastically changed.

And there's nothing in the history you just told me that suggests y'all will even be here 10 years. Yeah. Is there a chance of another relocation heather not that i can foresee because it wasn't so much a relocation with the same company it was just a really great job opportunity with a totally different company oh okay i hear you yeah yeah well i think what john said is important heather i would really so get below the problem right get below the one year the three year but like what's going on in him what is what what's his what's driving his motivation to get this paid off

quickly and as a wife like listen to that consider that uh i would say on your end too still speaking into the situation on what you see and that you know that fear can sometimes take over so much that he may not even be able to see his way through. And your logic, because you don't have that, you're able to actually pull the numbers and say, hey, look, we could actually probably pay this off in two years and four months. And you'll have a level of possibly a level of logic that he may not be able to get to because of his fear. So you guys working as a team, right?

So coming together in it. And some people hate the word compromise in marriage, but I just feel like sometimes it's what it is. And it's like, all right, let's meet in the middle, like together, let's do this. But I would also encourage you guys don't feel like you have to rush and buy something. Renting is not bad. So even if you guys stay put for another year, you guys have been in three cities really quickly. So maybe just stay put for a year, Heather. Take a breath. Save some of this new income. Act like you didn't even get a raise. Put that cash away,

and that may open up more opportunities in the future. So thanks again for calling, Heather. Appreciate it, and we'll be back. Well, the stock market has been all over the place lately. It's gone up, it's gone down, back up again, back down again. And if you're freaking out, can I just tell you don't? The market dips, but it doesn't mean that you're going to retire broke, okay? So you have to keep a long term perspective when it comes to investing. So if you just look at the facts, if you invest $100 a month from age 25 to age 65,

you could have around $1 million at retirement. So it's not that it's just too good to be true. This is based on a long term average of the return on the S&P 500. And a huge predictor of investing success is not only the rate of return, but that you actually invest and you keep investing consistently. So no matter how old you are, no matter how much your investing intimidates you, this whole idea of investing, you can invest with confidence right now. And when you get a pro in your corner,

they will be able to help you with all of this stuff. So you can connect to a smart investor pro. They eat, sleep, and breathe investments. This is like their entire world. And they'll take the time to work with you and make sure that you understand what you're investing in, which is a really key part of investing, you guys. Do not put your money in something you don't understand.

And SmartVestor Pros are able to walk with you and teach you. So go to ramseysolutions.com slash SmartVestor to find a SmartVestor Pro today. That's ramseysolutions.com slash smart vesture to find a smart vesture pro today that's ramseysolutions.com slash smart vesture hey and i think it's important to call out on these sometimes these ads sound like we're just trying to sell stuff right dave uses a smart vesture pro the cruises use a smart vesture pro the delonies use a smart use the SmartVestor Pro. These are professionals that we use in our own homes to manage our family's legacy and our money. So this isn't just like a thing that we throw out there. This is what we all trust our lives and our money to as well. Yeah, absolutely. Yeah. Having people, whenever it comes to any type of money, I say this a lot,

but it's just true. When there are niche parts of money that can feel like, oh my gosh, it's like this whole other set of skills and knowledge and terms and words feel like, oh my gosh, it's like this whole other set of skills and knowledge and terms and words and all of it. So whether it's real estate or taxes or investing or insurance, there's all these little buckets. We have people, you guys, that we recommend because, again, there's such these niche parts and we want you to learn and understand it. But having someone that does this day in and day out to guide you and teach you, it's worth it. It is so worth it. So again, go to ramseysolutions.com slash smartvestor. Right up next, we have Borche in Portland, Oregon. Hey, Borche, welcome to the show. Hey, guys. How's it going? Thanks for taking my call. Absolutely. How can we help?

Yeah. So I was calling in because I had a question for you guys. I'm 32 years old, self-employed, and I have an ambition to retire in 10 to 12 years. For the last couple of years, I've been investing pretty aggressively, $10,000 to $12,000 a month. My portfolio is roughly around $300,000, just a little bit over. I don't have any debt. I have about $90,000 in cash and the only debt that I do have is a house payment. So I do have a college fund set up for my child as well. I have another kid that's due here in a couple of months. So we're going to bump that up a little bit. And my question was, should I start putting more money towards our

house to pay it off sooner? Or should I continue to invest that $10,000 to $12,000 a month in hopes of obviously being done in about 10 or 12 years? What's the panic? Is it part of the fire movement or like the great Mr. Money Mustache? What's this impetus to do this? Yeah, I mean, I think for me, a couple years ago, I just had a goal set in mind. I've always been a pretty competitive person, and I just kind of set my mind on being able to set aside $10,000 towards my investment portfolio. So it's more of just a goal that I personally have.

I mean, I love what I do. I don't see myself stopping however i do just you know want to get to a point where i don't have to worry about you know how my business is doing and uh you know have that peace of mind i guess so i'd rather kind of put in the work right now and get it done as quick as possible how much are you making a year for that goal uh i'm about 350 gross and about 200 net okay um well you know i mean we we talk about investing about 15 of your income into retirement so that's going to be you know you're you're investing a lot basically like three months worth how much you own your house uh we own about 350 on our house. It's currently worth just over 600,000. I mean, we definitely live well below our means. I guess the only debt that I do have is I lease my car into my business. It's 450 bucks a month, but that's about it. So do you see, would you borrow,

take a HELOC out on that $300,000 and put that in as a part of your retirement scheme? Yeah, I've definitely considered it. No, I was trying to tell you that's a dumb thing to do. Don't do that. He's like, maybe, John. Here's what I'm trying to say. You've got money sitting in account over here on the roller coaster, but you have this steady drumbeat that you are making some mortgage company executive very, very wealthy by paying them every month.

And you're so over-investing at this stage. You do have an incredible goal. Dude, I'm all about that goal. It's awesome. But you are over-investing while you still have this massive liability over here. Even if you say, yeah, but that one's a 2.9 or 2.4, and this one's going to be, I'm going to make this much. I get all the math part.

I'm trying to give your little child and the new and coming, what you said something that was so important, I just don't want to worry about this. Another word for that is peace. And when you have a house that is ours that nobody could take away from, Portland can probably figure out a way to take it from you, but that most states can't take it from you,

dude, there's a whole other, it's a whole other level of safety and security and peace in your home that you don't even know yet, even though you got all this money over here, right? So yeah, Borja, I would, I would. Pay my house off. Yep, for sure. I would pull back on the investing.

I really appreciate all the aggressiveness. You know, you're, it's like 120K a year that you're investing and it needs to be more just like a 25K, you know? So I would pull back and throw some of that extra. I really would. Cause you're going to be fine. Like, I understand, again, you want to retire, but you're 33, you're okay.

And what John is saying is so correct. Like, when you have autonomy over every part of your life, it's incredible. It absolutely is incredible. And so not having a mortgage, not owing anyone anything, there's no risk. So even if the business did, you know, have a bad few months or something, you don't have any bills when your house is paid the business did you know have a bad a bad few

months or something you don't have any bills when you're when your house is paper you don't have a mortgage so so i would pull back on investing i would still invest i would invest 15 of your income into retirement is what we say of your take-home pay so that's that 200 grand is what you're going to be looking at um after because i would love for you to do like a roth ira which is after tax dollars. I mean, so looking into 401k, Roth IRA, well, you're self-employed, so it may be a SEP, but I would, yep, invest still, but pull way back and throw that extra at the mortgage. Can I throw one thing at you real quick?

Yeah, of course. All right. This is from the greatest of Perel and I'm taking her analogy and I'm using it somewhere in a different context okay but here's here's the the basis of her um here's here's what she says you could never go sweep up all of the glass and steel and twisted metal on September 12th of the towers when they fell and rebuild those towers using that original stuff. The towers fell and you have two options when they fell. Just leave them alone, let nature take them back over the next couple of hundred or a thousand years, or get some professionals, excavate the whole thing, get an architect, build something that

is a monument to what was and something that may be stronger and even arguably more beautiful moving forward to the future. And we're going to build with our eyes moving forward. Here's where I want you to take that analogy into your own life. As a single guy or a newlywed, you had some ambitious goals and you have come hell or high water. You've been getting these things done in an incredible fashion. If you were here, I would hug you out of solidarity. I think you're amazing. And then you had a kid and now you have another kid coming.

And so the life that was is now over. I want you to consider it's fallen down and you can't say, okay, but I'm going to keep this thing going even though I got a kid here and another kid here. What I want you and your wife to do is I want y'all to set, set some, some time aside. And I want y'all to create goals that might be somewhat similar, but goals for this next phase, because you've never been a couple with two kids

and you've never had financial goals and two kids. And I want you to reevaluate where you're going and how fast you're going to get there in light of everything is different now. And this can be one of the most fun and beautiful adventures for a couple to undertake if you have the right spirit. So reimagine what life's going to look like with this new one. You make a whole bunch of money.

You're in great shape. Well, standing on the debt-free stage, we have Steve and Laura. You guys, welcome to the show. Thank you. Thank you. So you're standing up there for one reason. A really big reason. A big reason.

You guys are debt-free. Where are you guys from? Kalamazoo, Michigan. Awesome. So great, you guys. Okay, so how much debt have you paid off? Had to write this down and had to actually recalculate it a bit, but $265,901.72. Whoa.

Okay, so what kind of debt was it? So it was 14 credit cards. 14? Yeah, 14. A lot of stuff happened in there. Purchased a used car to get it out of an over-mileage car fleece. Okay. A camper loan.

Okay. A broken HVAC. Another car replacement. What? Student loans and our mortgage. Oh, the mortgage! That's what I was looking for. Oh, you guys.

So you were normal. You were normal. Okay. I don't know. They pushed the bounds of normal. How long did it take you guys on this journey? It took us 49 months. 49 months.

Okay. And how much were you making during that time? We started off about 124,000. And then we, with all the extra work, we pulled in about 150,000 for the past two years. Wonderful. Wonderful, you guys. Oh my gosh. How does it feel it's amazing

it's amazing like just you know when i hear you talk about freedom and peace i heard it for years and you know we read it in the books but like to feel it it's just it's just life-changing incredible okay so what happened 49 months ago to start you guys on this journey? Well, it actually somewhat started before that. Basically, I gave my wife a promise when we got married that I'd give her security as well as financial stability, and I failed on the financial stability part. A lot of it comes from a little bit of my history. Didn't grow up very wealthy or a little bit less income than normal, but we made things work as much as possible. But the moment I went to college, got financial aid, had those extra checks that came in, hey, there's extra money. Might as well

start using it. So I started using that and then got a job. Of course, I worked for Best Buy, got a job, loved electronics. My paycheck went got a job loved electronics my paycheck went back to Best Buy um so it just started accumulating over and over and over um and a lot of it I'd say came down to me just because I wanted everything yeah didn't have anything wanted everything and I did my best to get everything yeah so over time it was like me and my wife um going paycheck to paycheck and then being like oh you know i should get one of these and all of a sudden be like hey can we get one of these and she's like well we can't we can't afford it we don't have any money i'm like i just got paid yesterday and i got paid this much why can't i afford like a 25 thing she's

like it's all gone i'm like and we would like scuffle a little bit verbally about this and then one day it was just like we had one of those I sat downstairs and I was watching YouTube and I was like you know that's it that that enough is enough like Dave said it just it was that snapping point and lo and behold Dave's face was on like one of the suggested videos. I'm like, so I clicked on that. And that was literally three months of me watching Ramsey show videos on YouTube, just pulling in as much information and research as possible. I'm like, you know, we should do this. And then my wife's like, well, funny thing. They're doing financial peace at our church.

So we signed up, met with Jake, who I actually work with now. We actually co-hosted the last financial peace last year. And my plan is to teach financial peace with Jake as two separate groups for the church as well. Amazing, you guys. Oh my gosh. Okay, Laura, during all of this, what are you, what are you thinking? Are you just like, finally we're on board. We're going to, we're going to make progress in this or did it take some convincing on your end to start this process? I mean, I was ready and I trusted him. He's been the, he's been the money guy, you know, the, the nerd alert guy. When we read about the nerd and the free spirit, we don't really have a free spirit,

but we definitely have a nerd. So I, you know, I, I trusted him in this process. And, um, so it, it was hard. Of course it was hard. I mean, I love to travel. We didn't take big vacations. We, we camped a bit with the kids, which was great. You know, I drove a really terrible car for a while, but it got me, we still have it. My daughter drives it because, you know, we're not paying on it, right? It moves. It's perfect for an 18 year old. So it was not easy. But now, I mean, every moment was worth it because of the freedom. And I think the most important for me is this legacy that we're leaving for our kids. We started late. We're 45, so we started late in life. We were 41 when we started, but she goes to college this fall,

and we're cash flowing that. Oh, wow. So we're setting up our kids to not have student loan debt, to live without credit cards. They both have jobs. Even my 13-year-old, he scoops dog poop because he needs money to spend, and he knows he's not going to get it for free from us. You've got great parents, young man. What was it like being married to a guy that was out of control? I just kind of felt like I was just hanging on. I was trying to pay the bills and all these credit cards.

Some were teeny, some were big, but it was just treading water and trying to hang on to this lifeboat to get us through. So it was hard. It was really hard. And we struggled in our marriage because of that, because there were arguments about money. He didn't really understand the finances because I was in charge of it, and I was trying to hold on to it really tight because I was afraid. So when we became this team, this partnership, and the communication opened up, and we developed this trust about our money, and we were making these decisions together.

So not only are we financially free, but our marriage is stronger than it ever has been. And you talked about legacy change. We often talk about legacy change here in the company financially, right? You've changed your kid's financial future, but your kid's also got a ringside seat to watching mom and dad be absolute gangsters and heal a marriage and do hard things

and say, I submit to this process. What I'm doing is not working. I got to do something else. And we got to head to the basement and spend some time on the tubes, right? We got to figure this out. But your kids got a ringside seat into that. And so both of them are going to find themselves in situations where they're over their head. That's part of growing up. And now they're going to have, oh, wait a minute. Mom and dad gave me a roadmap here. We can do crazy hard stuff. We can figure this out, which is amazing. I'm so proud of y'all. It's part of that legacy, you guys. Well done. And it's been such a journey, years and years and years of doing it. And now it's done.

Yes. It's done. Have you got that first paycheck that deposited and you have no bills? Has it already come? Yes. Isn't it wild? It is wild. And it's hard. I mean, we have these habits

where we hold things really tight. You know, the budget, we have a lot of conversations about that. You can buy that $6 coffee, Laura. It's okay. We can afford it. I don't know what it was the other day. You can buy that $1.49 box of Kleenex.

You gotta go back and do it again. Slow down, Drew. Slow down. That's awesome, guys. Oh, you guys. I'm so glad that y'all came to Nashville and we get to be with you in person and celebrate with you because we're so, so proud of you guys. Thank you.

Man, what an incredible story. Well, we have the Live and Give bundle over here that we're going to gift you guys. Thank you. Thank you. It has Baby Steps Millionaires, Total Money Makeover, Financial Peace University, everything you need, but you're coordinating the class, so thank you for doing that and spreading hope to others. You can give this away to somebody that shows

up to your class and can't afford it. You got them. That's right. Absolutely. Okay, so before the scream, your kids are here, so bring them on up. What are their names and ages? This is Cassie. Cassie's 18. Off to college this fall. This is Drew. Drew's 13. Cassie and Drew I was you

I was you at your age with parents busting it and doing it and man what an incredible gift that you guys have

of parents so well done you guys as a family alright we got Steve and Laura from Kalamazoo and they paid off $266,000

in 49 months making $124,000 to $150,000. All right, you guys, count it down. Let's hear your big debt-free scream. All right, here we go. Three, two, one. We are debt-free!

Woo! Woo! Yes! Oh, amazing. Well done. Incredible. That's it. So rad.

Man. Oh, mortgage and all, you guys. Mortgage and all. So you all listening, know you can do it. You just got to make the decision and say, hey, am I going to start this process? And they are living proof that anyone can do it. So well done. We'll be back.