The Ramsey Show - App - Living Your Life With an Open Hand Brings Joy (Hour 1)

Episode Date: February 27, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where you learn to take control of your money and create a life you love. Well, sitting in for Dave, I am Ramsey personality, Rachel Cruz, and I will be with you this hour taking your calls on your life and your money. So it's a free call anywhere in the country at 888-825-5225. And guys, this is my first solo hour. If I can just cheer a little bit for me inside. We've been working on this. I've been with Ken Coleman and Chris Hogan a few times hosting the show, but here I am. I'm flying solo because I'm usually flying solo over at the Rachel

Cruz show. I have a YouTube and Facebook show. If you're unaware, go check that out. And now it's actually a podcast as well. We've taken the audio from that show and sprinkled in some more teaching and content there. So make sure to check that out. We have been busy here at Ramsey Solutions on the road. Anthony O'Neill and I were in Cincinnati last week with our Smart Money event. So all of you in Cincinnati that were out last Thursday night, thank you for coming out. About 2,000 of you, and that was so fun. It's such a fun event.

So there's some more of those. Anthony's actually going to be with Dave Ramsey on March 14th in Atlanta. And then Dad's flying solo. Dave's flying solo in San Diego on March 25th for the Smart Money event. So you can check that event out. And I will be on the road a little bit as well with our money and marriage events. I've paired up with Dr. Les Parrott. He is a money expert. I'm sorry, he's a marriage expert. I'm the money expert of the show. And we kind of hit this whole topic of your marriage and your money.

And we walk you through an incredible night. It's fun. It's exciting. It's funny. You're going to laugh and cry, all the things. So we'll be in Kansas City on April 1st, Des Moines on April 15th, and Dallas, Texas on May 16th with the Money and Marriage event. So you can get tickets there and for all of our events at DaveRamsey.com. All right, we're going to go to the phones now. And this is Dana from Chico, California. Hey, Dana, welcome to the show. Hi. Great to talk to you. How can I help? Can you hear me okay? Yes, absolutely. You're good. I'm so excited to talk to you. I've read your books and your dad's books. I just love them. And just hoping you can kind of help me. I graduated in December and I got my first big girl job working for the University of California

in their ag department. And I've already started on my retirement and I've got a savings plan going, but I was just wondering if at this point you would suggest opening a separate retirement plan, a different like 401k Roth or my university has a couple of different voluntary retirement plans. And I don't know if I should be focusing on those or just focus on my savings plan that I have now. Sure. No, that's a great question. Do you guys, do you have any debt? No. No, no debt. So you went through school debt free, graduated.

How'd you do it? Yes. Because you're like a unicorn, Dana. You like don't exist in our world. Parents helped. Like a unicorn, Dana. You, like, don't exist in our world. My parents actually got us your books, yours and Dave's books for Christmas growing up. She was very frugal with our money. I've worked since I was 15. And with their help and me working, we made it through college debt-free.

And we always buy older vehicles that we can pay cash for. And so we're doing pretty good. And I want to keep this on a positive streak. Yeah, girl, you're killing it. Absolutely killing it. As a recent college grad. So congratulations, number one. You are like an anomaly.

I'm sure everyone listening is like, man, I wish I was her when I graduated from college. So you're doing great. So yeah, so do you have a three to six months of expenses saved in a bank that you can get to liquid cash i don't right now i have um the thousand dollar savings a little over a thousand right now um and just trying to build it up but i don't know should i focus on that first yep totally so what i would do is i would pause any other savings that you have and focus on getting that three to six

months of expenses because this transition from college to the real world, which you're experiencing now, two months in, it's an expensive transition and things come up that you don't expect. And so to have that safety net that is liquid, is what we say, you can get to it quickly, is going to be important. So you can put this in a traditional savings account or a money market account, but I would pause everything and focus on that. And you'll be able to get to that pretty quick, considering you have no payments, you have savings account or a money market account but i would pause everything and focus on that and you'll be able to get to that pretty quick considering you have no payments you have your

first job you're you're single i'm assuming i didn't hear you say yeah i didn't hear you say spouse and no that's great no no i just oh i didn't hear you say husband so i was assuming so so yeah so focusing hopefully but yeah yeah oh girl yeah you're good no worries so yeah i would do that and then start looking for retirement and then you'll be saving 15% of your income into retirement. And looking into what you're saying, Roth 401k is a great option. A standard Roth IRA is great as well. And then looking at that. So no, that's great, Dana.

I mean, you're doing better than a lot of people. So congratulations. And what a testament, you guys, that like her parents, she said, got her the books for Christmas. And they really, that like her parents, she said, got her the books for Christmas. And they really, they taught her. They were showing her a path. And now she gets to experience the freedom so early on in life.

And that, and she said that her parents bought, you know, older cars with cash. So she was watching their example. Like all of this is huge, you guys. We talk about winning with money is key, not just for you, but for your legacy, for what you're leaving behind and what the example that she had, not only what she was taught, but what she caught from her parents is key. So parents out there, remember that in this process. All right, next up is Christy from Grand Rapids, Michigan. Hey, Christy, welcome to the Dave Ramsey Show. Hi, Rachel. Nice to speak to you. Absolutely. How can I help? So we're currently on Baby Step 3, and Baby Step 2 was 100% my student loans.

My husband has never had debt, and now that we're in Baby Step 3, we have the three months saved up, and I want to go to a full six months, whereas my husband's kind of ready to start buying more fun things now that we've spent all that time getting through all my student loans. We've got the three months saved up. So I'm trying to find what would be a good happy medium for that. Sure. Okay. I'm going to correct one little thing that I'm hearing you say in your verbiage. Okay. It's not your student loans and he had no debt. No, no, no. When you guys got married, it was your loans together. Like I emotionally want you to take that off your shoulder. Yes.

Was it yours specifically? Sure. But when you guys are married, you're married. And so you are unified in every aspect of your marriage, including the debt. And so I don't want you

to feel this shame and this weight with it. You guys worked it out. You paid it off, which is fantastic. But again, I want this to be a unified conversation. And so changing those pronouns is something to focus on because

that trickles in to other conversations and other decisions you make as well when you guys are unified. So just think about that as a side note. But I would say the three to six months of expenses, what you just outlined is very, very typical. Like you guys are very typical. Majority of time, women want more of the six-month emergency because the number one financial fear for women is the lack of security. And I know that for me. You'll probably appreciate this, Christy, but I told Winston, I was like, I want an emergency fund for our emergency fund. Like I'm a spender naturally, but the idea of having savings in the bank,

there's the security that I have. And it's so true. Most women experience that where most men don't. So when you guys are on two opposite pages with that, I always tell couples to find the happy medium. Maybe it is. Well, maybe you can go buy one thing. And if he goes and buys that one toy, then we're going to save up a little bit more in

the emergency fund. Or maybe you guys say, hey, you know what? We'll do four and a half months. Do one more month and a half of savings and then call it a day and move on to baby steps four, five, and six. Great question, though wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month. You never pay data overage fees and we never turn off your data. No contracts, no hidden fees.

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That's puretalkusa.com. Welcome back to The Dave Ramsey Show. I am Ramsey personality Rachel Cruz sitting in for Dave Ramsey this hour and taking your calls. Again, you can call anywhere in the country for free at 888-825-5225. And our social media always has some great questions. And so you can follow me there on Twitter, Facebook, or Instagram. And same with Dave Ramsey and all of our Ramsey personalities. But on my Instagram, I feel like the comment section ends up being like half questions

and half comments, which is awesome. So we pulled a couple from there. This is Jessica from California. And she asks, my husband and I are currently on baby step two and we just owe under $100,000. So we are so torn on tithing while in baby step two. Should we be? Yes. Now, for those of you that don't know, tithing is giving 10% of your money to the local church, but giving in general, that is something that we fully, fully, fully recommend you doing no matter which baby step you're on. Because I think as a culture,

we believe this lie that if I just had more money, I would give. If I just had more money, I would give. And I kind of always make the argument that, you guys, just because you have more money doesn't make it easier if the habit was not formed earlier. And so forming the habit, no matter where you are, always makes giving a part of your life. John D. Rockefeller has one of my favorite quotes. He said that he never would have been able to tithe the first million dollars he ever made

if he didn't tithe his first salary, which was $1.50 a week. And I love that, his first salary, he wouldn't be able to tithe that because why? Because he was not gonna be in the habit. And again, being in that and not only being a habit in your life, but the joy that you experience, the heart change that you experience when you give and you live your life with an open hand and you go on the spectrum of being selfish, selfless, life is more enjoyable. It is. There's something in you that is released and that is incredible what you experience when you give. And I want this to be a part of your

life because throughout the baby steps, we have seven baby steps. And the last baby step is to build wealth and give a bunch of it away and to be able to help people. But I want you to experience that through all the process. So yes, mathematically, a lot of it away and to be able to help people. But I want you to experience that through all the process. So yes, mathematically, a lot of people are like, it's so hard. You're telling me to put all this extra money towards getting out of debt on baby step two, but I could be out of debt X amount sooner

if we didn't give. Yes, but the things you would miss out on when you didn't give, not only from a heart change, but a life change is still critical. And so even in our every dollar budget that we have, our app, if you've not downloaded every dollar, download every dollar, it makes budgeting so easy. And you guys, March is coming up like a few days away. So download that, download that and start a budget because you'll see at the very top, the very, very first line

item in the every dollar budget is giving. So promoting that is huge. So yes, Jessica, 100% I would be giving no matter which baby step that I'm on. Jamie in Alaska asked, I am thrilled to say that we are debt-free. Congrats, Jamie. We have a goal to save $15,000, which will be three months of living expenses. We both feel like the energy has left the building.

Should we take Financial Peace University again for a fourth time to get our intensity back? This is true. If you guys are on this journey, this happens all the time. Baby step two, it's like you're getting traction. You're paying off debt. You're feeling it. You're motivated. Sometimes there's hard seasons than that, sure. But man, you feel like we're doing it. And then once you're done, you're like, okay, I want to have a life again. Like I want to eat more than rice and beans. Like we want to go on vacation. Now we want to enjoy our life. But you have to keep your foot on the pedal through baby step three. And it is, it's sometimes a harder one, but do it. And whatever intensity you need, whatever shot of adrenaline you need

in your system to keep through baby step three, that maybe that is Financial Peace University. I mean, that's a great, a great tool to use because you're in a community with like-minded people, people that are on the journey. And so I would say you can go for free within our year-long membership. So do it. Like when you have that membership, you have, you have a year to be able to go. And so I would say for sure, take advantage of that. Again, not only the tools you'll have, but the motivation around being with like-minded people.

All right, this morning I saw this article from Enterprise Financial, and it talked about the 10 top money habits of happy couples. Now, whenever I see couples on articles with money, I'm always intrigued, again, because I'm doing this money and marriage event and I'm always intrigued when it comes to marriage and money. And so it was fascinating. So they found five money habits, again, that happy couples have when it comes to their money. And I'd like to say we teach all of these. So when I read it, I was like, OK, I can believe this article.

It is true. It's true. Number one, they make money a priority. Yes, yes, yes, yes. You guys, like anything in life, if you want to win in life, you have got to be intentional. You have to make things that are important in your life a priority. So if you want to be better at your marriage, you have to work on your marriage and make it a priority.

If you want to be a better parent, you have to make it a priority. If you want to win with money, you have to make it a priority. If you want to be a better parent, you have to make it a priority. If you want to win with money, you have to make it a priority. And then, you know, making a priority together as that number one, I loved. Number two, most talk about and agree on financial goals and shared responsibilities. And I love that because I'm like, yes, you have to have a goal.

And for you guys to have short-term goals and long-term goals as a couple. Now, sometimes your goals are going to be different. And that's fine. for you guys to have short-term goals and long-term goals as a couple. Now, sometimes your goals are going to be different. And that's fine. Winston probably has a goal to live in a duck blind in Arkansas. That's not my goal. My goal is probably to live in New York City, if I were to be honest with all of you.

But you may have different ways to go about life at times. That's fine. You're going to have different interests, different hobbies, different passions, but finding some that you align on and that you say, okay, we're gonna work at this together and have goals that are five years and less, something that you can hit within five years because you're able to see it and actually get to it. And you're like, okay, yeah,

we can hit that within a year or two, within three years, have that short-term goal. And then you need long-term goals that you look at and say, okay, say we want to retire, you know, here, X, Y, and Z. Maybe we want to take all of our family on vacation, even our grandkids, like, but we want to do that in 10 years. Like, whatever it is, find those goals and agree on them together. So, so key. Number three, the article says that they set spending limits. Now, in Ramsey talk, that means they have a budget.

Yeah, they know what they're spending and they're agreeing on it. Agreeing on where your money's going. You're agreeing on more than just money. You agree on your goals, on your dreams, on your fears. You agree on so much when you your dreams, on your fears. You agree on so much when you can agree on that monthly budget. Number four, the majority have a joint banking account. Yes, this is a non-negotiable in our world. 100% of the time, if you are married, you need one account. Now, this ruffles people's feathers a lot. They're like, oh, but Rachel, I have my independence. This is my money. He pays these bills. I pay these. And I'm like,

are you roommates? No, you are one in every aspect of your marriage, including your money. And so forcing yourself to work tactically together out of one account is going to create communication. But also what it does is it opens up a level of vulnerability. So if you have been functioning in your marriage in two accounts, merging together, it's going to be scary. Like there's an element that you're like, wow, I've kind of been having this thing over here that's mine. And now it's going to be exposed. But coming together, the unity that is created

when you guys are working together, I'm telling you, not only will you succeed financially faster when you're working together, but your marriage as a whole ends up being amplified. I mean, in all the good ways. So having that joint banking account, I love that. And number five, lastly, they share the responsibility for retirement planning and investment decisions. And I love this too, because when you guys are funding retirement and baby step four, you have got to be on the same page and understanding what's happening.

Now, sure, these are going to be where you're going to have two separate accounts, right? If you're both working, you both will have Roth IRAs, 401ks or 403bs. You will be having your own accounts in this, but understanding, okay, this is what we're putting our money into. And agreeing on that. Not one of you going rogue and buying Bitcoin and gold everywhere. You're agreeing on this is where we're investing our money. And when you're investing, you guys, you have got to understand what you're putting your money in. You have to understand. You have to be able to walk out of that office, of your smart investor pro, your financial planner,

and be able to communicate what just happened. And so you guys together understanding it and you having knowledge of it is huge. And all those things, those five things, I love this article because I was like, yes, what it boils down to is communication, talking about money and being on the same page. Again, not only will you win faster with your money and your money goals, but together as

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Welcome back to the Dave Ramsey Show. I am Ramsey personality, Rachel Cruz Cruz filling in for Dave this hour and it's a free call anywhere in the country at 888-825-5225. Alright, going to the calls this hour, Michelle from Toledo. Hey Michelle, welcome to the Dave Ramsey Show. Hi Rachel, so excited to be talking to you. Oh thanks, thanks for calling in. So my husband and I are at the tail end of Baby Step 3, and I'm wondering about the balance between saving time and saving money.

I feel like I could be saving some money if I was, you know, comparing advertisements or driving store to store when I go grocery shopping, but we both work full time. We have a one-year-old son, the house, the dogs, and I'm tired. So I'm wondering what advice you have about striking that balance. Yeah, that's a great question, and I think you have to look at it per circumstance, like the grocery store example is perfect. Okay, you're a full time working mom, your time is very limited. I mean, all time is limited to people. But in your case, it is I mean,

the hours you have to go and do things, it is limited. And so I would say, for you, the amount you're going to save in the grocery store by going to five different stores versus you driving around town or just going to one store, maybe paying a little bit more, putting that in the budget, I would say do it. And especially since you guys are on baby step three, when you're on baby step two, the deeper you can sacrifice and the more things you can say, okay, it's worth doing that little extra effort because we're going to save this. But considering you guys are on baby step three, I think you're good to say, you know what, there's going to be things that I'm going to just pay a little bit

more for in order to do it. And you have to look at your life. And I think everyone's life and decisions are going to be different in this. But again, when you're getting out of debt, the deeper you sacrifice, the faster you're going to get out. But you guys being on baby step three, yes, your foot is still on the accelerator. Like we talked about last segment, you're still going. But you're able to say, you know what, my time is spent because I'm only going to save, you know, $8.92 or whatever it is by going to this other store, when you could probably make honestly smarter decisions at one grocery store and cut some things for time's sake. But if you're single out there, you don't have a spouse, you don't have kids,

there's a little bit more flexibility in what you can do with your time and who's pulling at you, then maybe you can say, you know what, it's worth it for me to do this. I would say it's going to be dependent upon each person and their season. But especially since you guys are on the tail end of Baby Step 3, I would say for sure you're good enjoying the time savings over the cost savings a little bit. It's a great question. All right, next up is Jelaine from Canada.

Hey, Jelaine, welcome to the Dave Ramsey Show. Hi, how are you? I'm doing great. How can I help? So I just feel so overwhelmed about how to teach my kids about money. My oldest is 5, and he's in school, and he sees things, he wants things, and I have no idea where to start to teach him about the value of money, giving him money, that kind of thing.

Yeah, that's a great question. Where are you financially? I'm just curious. Are you doing the baby steps? We're almost done baby step two. We've probably got about two months left. Oh, awesome. So you guys are almost step three.

Yeah. Congratulations. Well, I think one principle parents always have to remember and this isn't any part of parenting including money is that more is caught than taught so your kids are watching you meaning your five-year-old has watched you guys make sacrifices has watched you say no to yourself in order to pay off debt. They're watching this process. And so I think that that's huge. Now, all parents, no matter if you've messed up with money, I mean, we've all messed up with money, but no matter if you're paying off debt or no matter where you are, remember, you always have the responsibility to teach them about money. But the first and foremost is your example and what they're seeing. And so thankfully for you, they're seeing a great example of a mom who's doing it and killing it, which is so great.

And then next, I would implement some really small tactical things you can do. You know, he's five. Is it a son or daughter? Sorry, I heard you say five. A son. Okay. Yeah. So he's five. You want to make this very, very age appropriate. So my parents, for instance, when we turned about five or six, they got a chore chart out and put it on the refrigerator. And they're like, okay, here are, you know, three, four or five chores that you can do around the house and get paid on them. And then once a week, we were paid on the chores that we did. So we were never given an allowance. We were always on commission. So you learn that money comes from work. And if you work, you get paid. If you don't work, you don't get paid, which I love the concept because as an adult,

that's what we experience, right? You have to go to work to make money and getting that in their little brains and understanding that money doesn't just come from mom and dad's back pocket, but it comes from work. Them understanding that, they understand where money is created,

but they also have so many teachable moments because from them earning money, I want you to get three envelopes out for him and mark them give, save, and spend. And when you pay him on those chores, put a little bit and give, a little bit and save, and then a little bit and spend. And you can even it out. Some parents are like, how much? What percentage do I put in each envelope?

It doesn't matter. Okay, it matters that you do all three. So they start to build these money muscles. They start to learn how to give and learn how to save up for something and learn how to spend wisely. And so again, what you're doing is you're laying such a strong foundation. And that way, when they are handling their own money, they're going to mess up some, but that's good because they're making small, inexpensive mistakes under your roof versus the very first time he ever handles money on his own. He's 18 years old and he's on a car lot trying to decide how to buy a car, right? Like he's already learned all of this through his own experiences. And yes,

they're small and they're minor, but man, what a gift to give him. So I would start that. I want you to hold on the line and Kelly will pick up and we're going to give you Financial Peace Junior, which is our whole kit that we teach kids on how to handle money. It has the envelopes, it has the chore charts, the savings boards, like everything in there on how to teach your kids about money because this is, it is a crucial thing. And I would say too, don't be so militant. Okay. I do talk to parents and they've gone such an extreme route and they're so legalistic and they're so hardcore. And it's like this all or nothing deal. I was talking to one mom after an event and she came up to me and she was like, Rachel,

my son saved up all of his money. He was 12 for the new PlayStation. And I was like, that's amazing. Like that's hundreds of dollars. And I was like, well done. I mean, that's so great. He did that. And she looked at me well done. I mean, that's so great. He did that. And she looked at me and she said, yeah, but he didn't pay the tax. He didn't have enough money for the tax. He couldn't pay it. So we left without the PlayStation.

I was like, no, no, no, no. Like you pay the tax as a parent. You pay the tax. Okay. Like you're so dang legalistic. So parents do not go so militant that God, it like ruins your kids and they're scarred by money, okay?

You want this to have some grace in it. It's very age appropriate and it's in the ebb and the flow of life. And so not only letting them deal with their own money, but having small one-off conversations about it, right? Like the grocery store is a great place to learn about money. That's where I was taught what a name brand is and what a generic brand is, and that they basically taste the same. Some of you may have a different opinion than that. Cereals, cheese, same. It's the same to me. It's all the same. So like you learn where you can save

some money. And there's so many moments. So like you learn where you can save some money. And there's so many moments. And I remember, now again, this is like back in the 80s, people. But my mom would have these, would have envelopes. And we teach the envelope system now. So it's not an old school way of thinking you should do it. But I mean, I remember where cash was so common that you would watch people pay with cash always. Like if you paid with anything other than cash,

they like took out this big hunking thing and like, churn, churn, right? Like it was like this big ordeal. But living in a society in a world where kids are seeing cash, I think is tremendous because they see something leaving. Like when you have to pay with groceries,

with cash, and your kids are watching that, you are letting go of something to gain something else. And I think what that does is that gives such an advantage. And so, you know, showing your kids are watching that, you are letting go of something to gain something else. And I think what that does is that gives such an advantage. And so, you know, showing your kids that and showing them how to make purchases, how to negotiate, how to talk about this. I mean, it's it is it's so important, something obviously I'm rather passionate about. Actually, dad and I wrote a whole book called Smart Money, Smart Kids on this topic, because I think a lot of parents out there feel like they are not qualified

to teach their kids. And a lot of parents say, Rachel, I've messed up with money. I'm living paycheck to paycheck. Who am I to teach my kids about money? And I always look at those people and I'm like, who are you? You're their parents. You're their parents. And yes, we have all made mistakes with money. My parents filed for bankruptcy. Bankruptcy the year I was born. Like the bottom of the bottom. And thank God that Dave and Sharon Ramsey didn't say, oh, who are we to teach anyone about money?

You know, we're terrible. And that was their attitude. No, they said, we're going to change our habits and we're going to make sure our kids understand how money works. And because of that, my life's forever been changed. So parents out there, you can do this. You can teach your kids about money and change your legacy. This is The Dave Ramsey Show. Thank you. Welcome back to the Dave Ramsey Show.

I am Ramsey at Personality. Rachel Cruz taking your calls this hour, filling in for Dave. So you can call anywhere in the country at 888-825-5225. All right, going to the phones. This is AJ from Mesa, Arizona. Hey, AJ, welcome to the show. Hi, thanks for taking my call. Absolutely. How can I help? Hi, so my wife and I just finished babies at four and we're putting into a retirement right now. Everything we saved last, we actually just put towards our wedding. So everything we're saving now is going to be towards her going back to school and us purchasing our first home. Awesome.

Since she's going to nurse practitioner school and it's about $100,000 for two and a half years, we're kind of worried we might not have enough income to buy a house. So we're undecided if we should purchase a home or continue renting. How much do you guys make? Together we make about $100,000. Like I said, she's going to nurse practice in her school, so that'd probably go up about $50,000. Okay. After she graduates and gets out in two and a half years. Okay.

Okay, first and foremost, yes, you'll be cash flowing the school. So if that means pausing on the house. Right. So, no, no, you're good. You're good. So, yeah, I would say your goal for her to go to school is a priority right now over buying a house for you guys because it's something she wants to do. And so as a family, I'm assuming that's the decision you guys are making. So that's where the money is going to flow.

It's going to go towards her schooling, making sure that that's cash flowed. And then once she gets out and you guys will be bumped up to maybe $150,000 after that, then I think you save up for that down payment on a house from that point. So are you guys renting right now? Yeah, currently we are renting. Okay. Do you guys have any kids? No, that's the thing. We want to get her to school as soon as we can because we don't have any kids yet. Yeah, no, I renting. Okay. Do you guys have any kids? No, that's the thing. We want to get her to school as soon as we can because we don't have any kids yet.

Yeah, no, I think that's great. I think, yeah, so I would definitely say cash flow that. I mean, and if it's, you know, it's going to be 50, you guys will be living on about 50K a year. If her school is 100, you're making 100. That means you're going to be living like 50. You're making 50,000. The other 50 is going towards cash flowing her school for that first year and then on to the second. So for sure, putting money towards that because again, you guys are in a great spot though,

which I'm so thankful that you're out of debt. You have a fully funded emergency fund and you're taking care of retirement. So you've got your basics covered. And then once she's out, I think that you guys are going to have so much cash flow coming in because you have no payments. You're going to be able to save up for that down payment like rather quickly. So renting is not bad. It is a great place during transition is what I always say. So if you're transitioning from college to the real world,

or maybe you're just out of school to the real world, renting is a great time. Rent for a year. If you're just married, if you just got married, rent for about a year. We always laugh to say because you need to know how far to live from your in-laws. Like, understand that. If you're moving to a new city, if that's your transition, rent for a year and figure out, okay, what part of the city do we want to buy in? If you're going back to school and you're still renting, keep renting renting don't buy a house because gosh i feel like we get in this mindset too that once you buy a house like okay we'll be good we'll

just buy the house put the down payment down and it's fine houses are expensive things break like you're gonna have a lot of responsibility when you're a home owner versus a renter and so playing it safe cash flowing that college once she's out you guys are going to be able to save up very quickly for a big down payment, which is exciting, and get a home. And it's going to lower your stress. You're going to really be in a really good position financially to do that. So great question, AJ. Thank you so much.

All right, next up is Crystal from Washington, D.C. Hey, Crystal. How can I help? Hey, Rachel. How are you? I'm doing great. Thanks for calling in. Thanks. Okay. So back in 2016, you answered one of my questions on your video blog

and advised us when we got pregnant to stash and cash away until the baby was born and pause our debt snowball. So we followed your recommendation. And then in November 2017, our son was born with a physical medical condition that we were unaware of prior to birth. So that cash, oh thanks, that cash came in handy when he was born. So we've had NICU stays, two surgeries and multiple out-of-state specialist visits. So fast forward 15 months, we are catching our breath and things are starting to settle down. And we're back on the baby steps. But we are facing three surgeries ahead, one a year for the next three years.

And my question is, we're on our baby steps. We got our $1,000 emergency fund. We are paying off debt. an extra $2,000 because we know we're going to have these costs at flights, hotels, condos, eating expenses during these surgeries that are out of state. Yeah. How do I plan for those extra expenses? Do I put like a budget line? Do I just lump it into our emergency fund?

Yes. Well, I would say that you guys, I'm thankful. I'm so sorry that this happens. I mean, that's as a mom, I'm so sorry that this happens. I mean, that's as a mom. Yeah. I'm so sorry. So, but the blessing is that you guys know now ahead of time what you're about to experience, right? So, you know, there's going to be, you said three surgeries over the course of what? Three years, a surgery a year.

Yeah. Three years. Yep. Yeah. So you're able, you have time to plan it out. So what I would do is I would pause your debt snowball, pay minimum payments on everything. Make sure you are current on all of your debt. I don't want you to get behind. So stay current. And then I just want you to pile up money because you know that these medical expenses are coming. So you can almost treat this like a three-year pregnancy. Like when I talk about when you pause

it when you're pregnant, because medical expenses can happen. And so for this not to completely ruin you guys, I want you to be able to have the cash available to not only be in a place where you are not burdened by the expenses of the living, like you were saying, you have to go out of state, airline tickets, all of that. Yeah, yeah. And for the actual medical expenses.

So pause for three years on your debt snowball. And again, these are one of the cases we do say pause because you want to be able to pile up cash for your son that you guys don't get behind on the medical bills now for the expenses the living expenses I would look depending on what city you're in you can kind of just like run some rates of figuring okay roughly it's going to cost us this amount to stay we're going to be over there for you know maybe two weeks you know maybe it's 14 nights figure out how long and kind of just run some rough numbers, at least get a guesstimate, if you will. It's not going to probably be specifically spot on. But what can happen is sometimes in these situations, especially a parent to a child, our emotions are out of whack, right? I mean, like what you're going

through emotionally is so hard. And so I don't want you to make bad financial decisions because of that. And so having a really strict plan going in, say, OK, here's our money. Here's what we're going to do. It's saved up. We're intentional about that. That's going to give you some peace versus just saying, oh, we'll just figure it out when we get there. As much as you can plan on the front end, the better financial decisions you are going

to make. And I had friends and they had a medical issue with their child and they had to be in a separate hospital or at a hospital in another state kind of what you're talking about and they were there for about three months but before they did that they talked to a family that had a very similar situation and that family was able to outline a lot of what they were going to go through not only on the medical side but even the financial side like you're saying and there were resources like the Ronald McDonald house they stayed in because it was a children's hospital.

I mean, a couple of things that this family gave them some really great and helpful tips. So I don't know if there's anyone that you know, any other family that's been through this that you can talk to. But sometimes just kind of communicating that out loud and saying it and learning from other people in this process is going to be really, really helpful. But Chris, I'm so proud of you guys. I mean, what you did by pausing that and saving up while you were pregnant, because I have actually a Twitter question right here on my notes that I'm not going to be able to get to, but she asked,

she said, oh, we're so close to paying off debt. Can we go ahead and spend six months by paying off debt and just save three months after we pay off for the rest of my pregnancy? And my answer would be no, because you never know what's going to happen. Like, that's a big deal. You don't know. You want to make sure mom's okay and baby's taken care of. The debt is an important yes. Like, we want you to be debt free. Like, that is the reason we live and breathe here at Ramsey Solutions. But we want to make sure your children are taken care of and that your child is okay and that mom is okay. And so throughout that season, pausing the debt snowball for that kind of medical expense,

or if you are pregnant out there, ladies, pausing that to pile up cash. Because again, the worst that can happen is that you get behind on medical bills. So we want you guys to have the forefront. But man, what a blessing that you're able to plan out, Crystal. I'm really, really excited for that. Well, man, you guys, it's been a fun show. It's been a really, really fun show.

There was an Instagram question that I did want to get to pretty quickly, but Jennifer asked on Instagram, she said, I'm a recent college grad with no debt and a six-month emergency fund. I hate wasting money on rent, and so I want to buy a house right now. So I wanted to get to that

because that was one of our other calls. You guys, renting is not bad. Have patience. Have patience. Do guys, renting is not bad. Have patience. Have patience. Do not rush into a home purchase. Well, thanks, you guys, for listening this hour. It was a pleasure being with you and answering your questions and talking to you, America.

Thank you to producer James Childs and associate producer Kelly Daniel and you, America. And remember to take control of your money and create a life you love. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.