The Ramsey Show - App - No More Living Paycheck to Paycheck (Hour 3)

Episode Date: October 1, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. You jump in, and we will talk.

Thank you, America. We are in live event season here at the Ramsey Solutions team, and I leave in the morning for San Francisco. Chris Hogan and I do. We'll be doing an event there tomorrow night for about 3,000 folks. It is completely sold out. Thank you, San Francisco. Our very first ever San Francisco event, 3,000 folks sold out.

Thank you very, very much. Rachel and Les Parrott, Rachel Cruz and Les Parrott, will be doing the Money and Marriage event in Anaheim, California this coming Thursday. And I looked at the sales reports a minute ago. There are six tickets left. And it's 2,000 seats, so we'll call that a 2,000-person sellout as well. I suspect probably before they got the report filled out or sold out. So there you go.

Absolutely incredible. And then one week from this weekend, our day-long smart conference with all of the Ramsey personalities plus a bunch of our great friends like Dr. Meg Meeker, strong fathers, strong daughters, Dr. Henry Cloud on boundaries. Oh, they're just fabulous communicators and number one bestselling authors. Les Parrott on Marriage. And Ken Coleman of The Ken Coleman Show, one of our emcee personalities,

will be speaking at this art conference in Kansas City October the 13th. It is basically sold out. There's 94 tickets left. So if you want to go, you can still go. But, I mean, we'll be announcing a sellout on that within a matter of a few hours probably. But if you want in, we would love to have you for all. But all three of those. Thank you, Kansas City, San Francisco, Anaheim.

Thank you. Thank you very, very much. Nashville is Business Boutique November 1st through the 3rd. It is approaching a sellout very, very soon as well. So a lot of stuff going on around here, filling up very, very quickly. A lot of fun things. Thank you for your response out there. We really, really appreciate it.

A friend of mine sent me this article earlier. It's very interesting. Lawsuits filed against insurers in recent years for their practices around universal life insurance highlight the risks that these products can pose to unwary financial advisors and their clients. Transamerica, AACSA, Lincoln National are examples of firms in the crossfire of litigation for raising the cost of insurance in certain universal policies. Nationwide life insurance company also privately settled a lawsuit with two individuals in May relative to variable universal life insurance costs.

John Hancock settled a lawsuit related to universal life insurance costs for $91 million. Unlike other products like Term and Whole Life, Universal Life, which is permanent cash value life insurance, allows buyers to make flexible premium payments. That flexibility allows buyers to fund policies with a relatively low amount of premiums to keep the insurance going. However, a cost increase could leave these clients with an unattractive choice. Pay a much higher annual bill to keep the contract afloat or lapse the policy altogether. They don't know what they can do, says James Hunt, a consumer of Federation of America's Life Insurance Actuary. They paid a premium and they thought they paid for life. And now they're facing extremely high premiums to keep them going.

The recent wave of lawsuits, which began cropping up around 2015, have targeted universal life policies sold in the 80s and 90s. Insurers offered an attractive guaranteed minimum interest rate to policyholders of about 4 to 5 percent, supported by higher interest rates set by the federal government during this time. But a decade of rock-bottom interest rates in the wake of their financial crisis hurt insurers' profitability, reducing the return on the bonds and underpinning their products, and so they jacked the rates. So here's what happens with the universal life policy, why these things are happening, why people are pissed off about it. So you're told that if you pay a premium, you'll have the policy your whole life. A portion of the premium goes to pay for the insurance, and a portion goes into your investment called cash value.

The problem is these things are based on the insurance inside of them is based on an ART, which is an annual renewable term. If you think about it, every year you live, you're more likely to die statistically. A 46-year-old is more likely to die statistically than a 45-year-old on average. A 76-year-old is more likely to die than a 56-year-old on average, statistically speaking. So they charge more. It costs more because of the probability of death to insure someone who's older. Everybody get that?

And so let's say you had $100 a month or $200 a month premium, okay? And if it started out at age 35 and the cost to cover you at age 35 was $50 a month of the $200. Then you'd have $150 going in the investment. That should be just fine, right? But then what happens is over time, the cost to cover you, let's say, let's get you up to age 60, might be $250. But you're only paying $200. Where's the other $50 coming from? It's eating your savings up that you put in.

And so your insurance cost goes up every year to the point that it passes the premium and eats up the savings. When the savings is gone, the insurance company comes to you knocking on your door and says, now it costs $300 a month for you to just have insurance, no savings, because not only has the increasing premium eaten up what you were paying or the increasing cost of insurance eaten up your premium, but it's also gone over that and eaten up your savings. Now there's nothing left, and we're not going to cover you anymore

unless you pay this new higher premium for insurance only you just got screwed by buying a bad badly designed horrible financial product and so when all these guys are if you don't understand index universal yeah flexible premium yes i do understand it and i've seen this happen i've met with these people when they're 65 years old and their insurance that they paid into for 40 years has has completely self-destructed and now they're standing there with nothing and they paid huge premiums if they'd have paid 1 20th as much they'd had term insurance over all that same 20 year period of time and they could have invested and then nobody's going to tinker with their investments

and steal their investments to pay insurance premiums to some dadgum insurance company. If your insurance product has, if you have a life insurance policy that has a savings component to it, it's building up cash value. You're getting screwed. The worst of the worst are these things. Actually, the worst of the worst are the old-fashioned whole life policies. These things are right behind them. But at least the old whole life policies, they're bad as they are.

They're absolutely horrendous. It's the payday lender of the middle class. But at least they don't self-destruct and leave you standing there with none of your money. These things, these flexible premium universal life policies, eat you alive. And then people are so pissed off they sue. And that's what's happening. $91 million, one of those companies paid. Woo, baby.

I bet that wasn't fun. Well, here's a good idea. Drop that crap and get you some term insurance. Go to ZanderInsurance.com. Did you know, statistically, when it comes to life insurance and protecting your family, that women are more likely to be uninsured or underinsured than men? This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes,

and in many cases are the breadwinners and take care of their families 24 hours a day. This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance. They shop the top term life companies to find the lowest rates available. You can compare rates online at Zander.com or call 800-356-4282.

This is something every family has to deal with. That's Zander.com or 800 in Raleigh, North Carolina. Thanks for being here, America. We're glad you're here. Dominique is in Raleigh, North Carolina. Welcome to the Dave Ramsey Show, Dominique. Hi, Mr. Ramsey. How are you? Better than I deserve. What's up? Hi. So I'm 24 years old. I just graduated from the community college about a year ago. Okay, I need you to speak directly into your phone. I'm having trouble hearing you. I'm sorry.

Can you hear me now? Yes, ma'am. Thank you. Awesome. So I'm 24 years old. I just graduated a community college about a year ago, and I'd like to start making the necessary steps to moving out. However, I just want to avoid winning if I can.

I just don't know if that's a wise decision considering the amount of money that I make. So if it is doable, how much would you suggest that I save a month or per paycheck to move out in a realistic time? And I want to say, too, that I am fortunate enough to have parents kind enough to let me stay with them rent-free. That's very nice. Okay. What do you make? Monthly, about $1,100. And that's after graduating?

Yes, sir. Okay, what is your degree in? It's actually in cosmetology, but I've actually got a job with the DOT just to help me find my career. Okay, so when will your career kick in? I'm actually taking clients now, but I'm using this money to further my education and take other classes. So I'd say about another six months to about a year.

Okay. Well, at $1,100 a month, we're talking about a little over $13,000 a year. You're going to make it on that in Raleigh out on your own. Okay? You're not making enough to do that. So we've got to get your income up. That's why I was asking. And so, yeah, we need to double your income pretty quick here, as fast as you can. And when you can double your income, and then I would go get an inexpensive apartment, maybe a roommate or whatever, and just get started on your own.

And the main thing there is make sure you have no debt. Do you have any debt at all? So I do have about $12,000 in debt, which my parents are kind enough to, that they're taking care of that for me just such that I can establish some more credit. What do you mean they're taking care of that? So they came to some money and they offered to pay my loan off, yes, sir. Okay. We don't need you to establish any more credit.

You don't need any debt. You don't make enough money to breathe hardly okay so when you are 100 debt free and then you build an emergency fund of three to six months of expenses so like five thousand dollars is set aside for emergencies then you would start saving towards your home and by then you are also in your first apartment and you just start saving as fast as you can. And, uh, you won't put down as much as you can possibly put down.

How old are you? You said you're 24. Okay, good. Well, you got a good plan. So hopefully in the next 12 to 18 months, you can see that income spike up as you start using your cosmetology degree.

And because, you know, you're at $13,000, and we need to get you to $26,000 as quick as we can. That's doubling it. That's still not a lot of money, but that will at least get you out there and get you moving and get your career to start to build. So, hey, thanks for the call. We appreciate you listening. Ian is with us at Prince Edward.

Hi, Ian. How are you? Hi, Dave. Thanks for you? Hi, Dave. Thanks for taking my call. Sure. What's up? Well, my wife and I, we've got five boys, five kids, and we just moved into our dream home about three years ago. Ten, twelve acres, so lots of room for the kids to run around.

But the last few months, we just started your plan, and we're on baby step two. And we're just thinking, I mean we've got 35 000 in debt besides the house and we're just not sure if we want if we need to sell the house just to be debt free or if we should just plow through the next 10 15 years and and just make it happen 10 to 15 years you mean paying off the house and everything yeah? Yeah, like we have 28 years left in the mortgage. So what's your household income? It's about $70,000 take-home pay. Take-home pay, all right.

Yeah. And then what is your house payment? It is around $1,200 a month. Okay. House payment's not out of line here. That's fine. No. But you've got a lot of kids, and you're not used to living on a limited budget,

and you're going to have to start that. Right. Yeah. Because you've got $35,000 to clean up. I mean, you really need to clean that up. It's probably going to take you a year and a half, two years, but something like that. No longer than two years, you need to have this debt that up. It's probably going to take you a year and a half, two years, but something like that. No longer than two years you need to have this debt cleaned up. Right.

What is the $35,000 in debt? What kind of debt? Part of it is loans from our parents, and part of it is line of credits, $25,000 line of credit and $10,000 loan from our parents. Okay. So just a line of credit. What'd you buy with a line of credit? Oh, it's just been life.

It's just been, we bought a piano a few years ago. Uh, just miscellaneous things. Okay. And that's over, right? Yeah. Not doing that anymore, right? No, no, no. We were like, we're just sick and tired.

We just want to be free. Yeah. But we love the place. I don't think you need to sell the house. The house is not killing you. $1,200 out of a $5,800 take-home pay is not out of line. You're okay on the house. But you do have to get your written budget.

Get on every dollar, your written budget, and get that going as quick as you can. Everydollar.com and start using the app on your phone. And you guys need to squeeze every dollar so that and um start you know using the app on your phone and you guys need to squeeze every dollar so that you clear this 35 because if you can clear the 35 you're going to have pretty good room in this budget even with five kids and you can clear it it's just going to take you a year and a half two years a year and a half two years is 17.5 a year out of 70 000 take home that's doable you can do that that's a lay down You can do that. That's a lay-down. You can do that. 35,000 out of 70,000 with five kids, it means one year. I don't think you're going to do that.

So somewhere between the one and the two, and that's how I'm landing on 18 months. Richard is with us. Richard's in Salt Lake City. Hi, Richard. How are you? Hi, Dave. Doing great. Good.

How can I help? So I was just wondering about emergency funds. We have a fully funded Doing great. Good. How can I help? So I was just wondering about emergency funds. We have a fully funded emergency fund of at least three to six months. Good. I have about $15,000 in there. At my job, they offer an HSA account, and they match up to $1,500 a year. Great. Should I fully fund the HSA account, and should I count that towards any of our emergency fund?

Fully fund it to get that match. That's wonderful. And the HSA, of course, can only be used for one kind of an emergency, and that's medical bills. We have lots of other kinds of emergencies pop up. And so do both of you work in this house, or is there a single income? No, single income. Okay, and what's your household income? Right around $60,000.

And what do you do? I'm a nurse. You're a nurse, okay. Very, very stable career, meaning that if you were to lose a job, you can get another one in 20 minutes. Nursing is just a fabulous career field. So in terms of accessibility, you can add hours anytime you want to add hours. You can back it off.

You can change direction. All kinds of stuff. You just really have landed in a sweet spot there. So very, very good on that. Given that you've got that type of a career that's not so specialized that it might take you six months to find a job if you lost it or something, take you six minutes, then given that that's the situation, I would back, and you fully fund that HSA, between the three to six months of expenses range, I would back it down to the three months.

Okay. And so that's kind of like partially leaning on the hsa as part of your emergency fund but it's certainly not we're not really counting it because i mean you can have lots of emergencies that have nothing to do with medical in your life i mean you can get you again you could lose a job you could have the death of a relative and you had to pay for the funeral or wanted to pay for the funeral you can have all kinds of different things happen, transmission blow out of the car, all kinds of things that can happen that aren't medical, and you can't use the HSA for anything but medical.

So I don't generally count it in the emergency fund, but I'm looking at your career stability and the fact you've got a big, fat HSA with a big, fat match on it, which is just wonderful, both of them, then that makes me very comfortable with being on the three-month side of the three to six months range for your emergency fund. Hey, Spencer here from Smile Love. At Smile Love, we'll straighten your teeth and help you love your smile. That's what we do, and we do it for less than you'll find anywhere else.

I guarantee it. I'm serious. We're talking about paying thousands of dollars less without sacrificing any dental expertise. We are hands down the most affordable way to straighten your teeth. It's easy to get started. You just go online to smilelove.com and use the promo code Dave to get an additional $100 off. So go to smilelove.com if you're interested in straightening your teeth and use promo code Dave for an additional $100 off. We started this company to help people who aren't fully confident in their smiles. You know that full, unrestrained, laugh as hard as you can kind of smile? That's what we're all

about, and we think everyone deserves to have it. So if you ever find yourself holding back your smile, get started today at smilelove.com, and remember to use promo code Dave to take an additional $100 off. smilelove.com, promo code Dave to take an additional $100 off. SmileLove.com. Promo code Dave. In the lobby of Ramsey Solutions, Chris and Lydia are with us. Hey, guys, how are you? We're awesome. Great. Welcome.

Where do you guys live? Springfield, Missouri. Wonderful. Welcome to Nashville. And here to do a debt-free scream. Yes, sir. How much you guys paid off? $161,000. Woo-hoo! And how long do a debt-free scream. Yes, sir. How much you guys paid off? $161,000.

Woo-hoo! And how long did this take? 24 months. Yo! You got after it. And your range of income during that time? We started at $192,000, and then this year we'll probably finish around $225,000. Great income.

What do you guys do for a living? I'm a nurse anesthetist, and then Lydia finished grad school and works with visually impaired and orientation and mobility and works with the school districts. Okay. Very cool. Well, great careers. Obviously, great income. And I'm going to guess 161 might have had a student loan or two in it.

It did. It also had our house. You paid off your house. Yes, we did. We're weird. I'm looking at weird people. We did, yes. I love it.

What's this house worth? 200 to 225. Excellent. What's this house worth? $200 to $225. Excellent. How old are you two? 31. And I'm 39. You have a paid-for house. Yes, sir.

Did you ever think you'd have a paid-for house? No, not until we started listening to you. No, we didn't. It wasn't something that we even thought would be normal, or we just assumed. We even thought 15 years was probably, you know, we probably should have done a 30-year loan. So, no, it's, yeah, we came out here in 2015 to see you when we were engaged.

And we just kind of, you know, then, you know, being back here now is kind of surreal. We didn't think we would be where we are. But the hard work is absolutely worth it. That is so fun. 24 months you did this. Yes, sir. From the time. So what happened two years ago that made it game on then?

We got married. Oh, there it is. Okay. We got married August of 16, and literally on the way home, we cash flowed our wedding on the front end, not counting the 161. And Lydia did an amazing job of getting the wedding set up. We did a beach destination wedding, and we did it, and cash flowed it. On the way home, we were planning on how we were going to attack it and pay everything off,

and we found out within probably a month or two of being married that we were going to have this guy here, and so that kind of put some gas on the fire, and we just went after it. We got home. We put it on the dry erase board. We did everything that you guys teach, and it just came on. We did everything that you guys teach. And it was, it was just

game on. And we didn't look back. Yeah. We did, you know, after we kind of, we got the first part of everything, but the house paid off and we kind of took our, caught our breath and, and, and we knew he was coming and we cash flowed those expenses. And then we kind of looked at each other, I think kind of that summer and, and, you know, I was going to maybe buy a new truck and with cash, but we were just, it's just something felt wrong about it. And my mom always said to follow peace. And I just, um, it was like, you know, for, if I'm going to be a husband and I'm going to be a father and, you know, and this is a team and we need to put, you know, her and him first. And we just, uh, it's like I had the, I had sold my truck. And so I had the money sitting in my account and I was like, you know, I had $18,000

and I was like, she thought I was going to buy a truck, and she supported me. And she was like, you know, we've worked hard. And I was like, that almost made me not want to do it. It was like, you know what? But because of the team part of it, you know. She was just too nice to you. You know, she supported, and I think that's what makes a team work. And it made me that much more unselfish.

And I put it on the house that night. And my mom just said, you know, hey, follow peace. That kind of covers a lot of things in life. And so we just went all in, and we wanted to have it done by his first birthday, but it was a little bit longer. But, yeah, in August we paid our house off. Changed your family tree, man. Yes, sir.

Now you can drive any truck you want. Right. You're making two and a quarter. You can get you a truck, I promise. No payments in your house. Way to go, man. Way to go. How does it feel to not have a payment in the world at 31 years old, Lydia?

Amazing. Absolutely. And it really hasn't hit me yet just because it's still so fresh. We just did this last month. Oh, wow. Well, congratulations. Pretty amazing. So who were your biggest cheerleaders?

Each other. Yeah, we were, congratulations. Pretty amazing. So who were your biggest cheerleaders? Each other. Yeah, we were, absolutely. We were in your guys' ministry, hands down. Awesome. Very cool. Well, we're glad we're part of it because you guys are heroes. Man, what a great story. You're absolutely incredible.

What do you tell people the key to getting out of debt is? I'd say there's a few things. Obviously, 100%, if you're not a team with your spouse, there's no way you're going to get out of debt. I don't see how there's enough troubles and trials in life that if you guys aren't working together, if there was days when I was struggling that she wasn't and vice versa. And then obviously the plan that you guys set forth. And then you have to be real with yourself. And I think not live the entitled lifestyle that you're going to borrow other people's money to live. I mean, you know, we talked about this and if you make $30,000 in this country, you're more blessed than probably 99% of people in the world. And I think you just kind of have to square your shoulders and say, Hey,

this is what I want. And it wasn't fun. You know, she, she was, she was working three, literally three jobs. She had three different jobs. Really? I got credentialed at another university and I would go and cause I have a lot of time off with my job and I, I didn't want to, I didn't want to drive three hours and stay the night on my days off at a university and work extra. But, you know, seeing them in the rearview mirror made me want to do it that much more and just get it done. So what did you make at that gig? My average income is probably, you know, without working extra, is probably $175. So you picked up how much on that extra?

Probably another $10 or $15 just in a short period of time. And then I started getting more opportunities at my institution. And, you know, I got the only lease that I think you would approve of. This is a Dave Ramsey lease. When I sold my truck, I was going on Craigslist, and I was going to buy a beater for $1,000. And my dad's got more cars than he knows what to do with. And I said, hey, I'll give you $1,000 if you let me drive the Pontiac for the next year. And it's an old beat-up Pontiac, and I'm driving two miles to work.

And he said, yeah, sure, absolutely. So, you know, I leased it from him for a year. So, Lydia, what was the best-paying part-time job you had? Probably with what I do now. I work for different school districts within the area that we live in and I'm able to just set my schedule and being you know

with my child the majority of the time is nice so I have that free time with him you get the flexibility and you got good pay out of it very good excellent good job you guys very cool very cool well congratulations thank you proud of you very well done I love it I love it Very good. Excellent. Good job, you guys. Very cool. Very cool. Well, congratulations.

Thank you. Proud of you. Very well done. I love it. I love it. And we got a copy of Chris Hogan's book for you, Retire Inspired. And, of course, that's the next chapter in your story. And you brought Elias with you.

We did. Yes, sir. We did. Yes, sir. And he is now officially one years old. He was one in May. so now he's 16 months. Yeah, so he kind of got this thing going, and he was kind of part of our motivation. Yeah, very cool. We want to raise him the right way.

All right, I love it. All right, Chris and Lydia and Elias, Springfield, Missouri, $161,000 paid off in 24 months, making $192,000 to $225,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Home! I love it!

Well done, you guys. Very, very well done. Open phones at 888-825-5225. Home ownership can be expensive. The average single-family homeowner spends around $2,000 a year on maintenance alone. And when you buy a house, you can expect Murphy to come for a visit. You know Murphy, if it can go wrong, it will. And you should spend no more than a fourth of your take-home pay on your mortgage on

a 15-year fixed-rate mortgage. That way, you got room in your budget for unexpected maintenance costs and other stuff. If you're looking to buy a home, our mortgage calculator can help you work out the monthly payment, and look at that. Just go to DaveRamsey.com slash mortgage calculator. It's completely free to use. No salesman will call. And if you're looking for an agent to buy or you're thinking about selling your home,

check out our ELPs, our endorsed local providers. They are in the top 10% of real estate agents in your area, and they'll help you find a home that fits your budget. So check it out, DaveRamsey.com slash agent, or just go to DaveRamsey.com on the front page and click ELP for real estate, and you'll be set up to go. Very cool stuff. And that mortgage calculator is kind of fun. You can jump on there and figure out what your payments are on different houses. And as you're looking around, it keeps you from buying too much house and kind of helps you say, okay, this is on my 15-year fixed rate. Here's what I'm going to be. And just go to DaveRamsey.com slash mortgage calculator.

It's completely free to use. We'd love for you to have it as our gift to you to help you make better, wiser choices. It'll cause you to have more money. We cause you to live your dreams. You live like no one else, so later you can live and give like no one else. Thank you. Our scripture of the day, Colossians 3.17, And whatever you do in word or deed, do everything in the name of the Lord Jesus, giving thanks to God the Father through him. Anthony D'Angelo said,

You can't talk your way out of a situation you behaved your way into. Stacy is in State College, Pennsylvania. Hi, Stacy. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. What's up? Well, I have a question about moving. My husband and I are attempting to move to Fort Collins, Colorado, and we have the math working. Everything will work on paper as long as I get a job paying close to what I make now once we get out there. We're hung up a little bit on a couple of different areas,

one of which being retirement and the other being health insurance. Now, my husband is in law enforcement, and with what he does, he has a pension, and the type of law enforcement he will be going to out there has a standard 401K. Similarly with the health insurance here, we will be able to take that into retirement. We won't lose those benefits after he retires in Pennsylvania. How old is your husband? We're 30. Okay.

And so you're worried about taking health insurance into retirement 35 years from now uh yeah that's absurd i wouldn't worry about that a bit um okay and and so is his pay going to be the same in colorado as it is in pennsylvania yes it would be exactly in fact uh it would be exactly the same and uh in year one and then year two, it would jump by $10,000. Wow. That'll cover a lot. Okay. And the only difference is the 401k and your job.

Yes. Okay. Why do you want to live in Fort Collins? We absolutely love Colorado, and Fort Collins is the only place that we found that actually has a dollar-for-dollar match on his salary here. Mm-hmm. Okay. Where's your family?

All over, actually. We've got family all over the United States. Okay. And the only reason you picked Fort Collins is just because you like Colorado? Yes. Okay. We got engaged there. We got married there.

Oh, okay. I lived there for a time in my life so colorado has a special place in our hearts that's pretty cool okay and how'd you end up in state college um his job brought us here law enforcement uh it was at a point where um he uh got a job and we landed in state college so uh we went the only place you went the first place that gave him a job, and we landed in State College. So we made a life here. You went the first place that gave him a job. Okay. Absolutely. And what do you do for a living?

I work in marketing. What do you make? I make $40,000 a year. And what's he make? He makes $85,000. Good. Okay. I think you're going to Fort Collins, kiddo.

I would if I were you. That's fantastic. And I think you'll land something. Fort Collins has got a good, vibrant little economy going, and I think you can land a $40,000 marketing gig there. I don't think that's that big a thing or something similar. And if nothing else, I think you can get out there and scratch around, start your own deal, get your own business going or something as a marketing consultant and

um do some freelance and i think you'll be just fine and it's where you guys want to be i can hear it you've thought that part through you've you know you're not it's not some pipe dream you've landed his big job and he's getting a ten thousand dollar increase in one the next year that's pretty strong i i if i'm in your shoes i'm gone i'm out of here because everything about it is you want to do this so very cool stuff hey thanks for thanks for spending time with us today open phones at triple eight eight two five five two two. You jump in. Dave is in Cleveland, Ohio. Welcome to the Dave Ramsey Show, Dave. Hey, thanks.

Nice to talk to you. Thanks for taking my call. Sure, man. What's up? So I'm wondering if it would be okay to sell my condo that is completely paid for to use part of the fund to do a career change and pay for school slash living expenses since I would be working part time while going back to school. You're single? I'm married. I'm 30 years old, married. Okay. And what is the career shift you want to do? So I'm a registered nurse and right now I'm in management and I want to go back to school to be a nurse practitioner. Gotcha. Okay. And how long will that take? It's going to be about three years.

And what's it cost? $45,000. And you sell the condo and you rent and you use the money from the condo to live on while you go to school and pay for school. I was actually thinking about saving up some money in the next year to put down on a house on a 15-year loan and so loan, and so buying a mortgage. How are you going to pay for a house if you're not working? Well, I was hoping I could have some savings

slash some of the funds from the condo go towards living expenses, paying for school, et cetera. Yeah, you're not going to qualify for a mortgage if you don't have an income. I'll still be working part-time. I'll still be making about $45,000 a year. Oh, okay. Your wife work outside the home? Yeah, she's a cosmetologist.

And she makes what? About $25,000. Okay. And are you going to be in the same city doing all of this? Yes, yes. Okay. I'm not concerned about home ownership until three years from now. If you want to do this and just keep all the cash available and make sure you hit your goal, that's fine.

Let's make the turn with no debt. And when we get out of school and land the nurse practitioner's job, and your income probably going to go up in that situation pretty substantially, and you've done all of this 100% debt-free, then you think about buying. Because whatever you buy in the next two years is not going to be a house you keep two years later. Okay. Because you're going to move up in income. Your income is going to go up substantially when you come out of school.

Agreed? Yes. Yeah. And so it's a different house world then all of a sudden for you. I don't mind if you rent something and just keep all your cash available to ensure that this dream occurs debt-free. Because when a dream occurs and it's financed with debt, it often turns into a nightmare.

And we don't want to go that route. But I love the whole plan, the idea and your willingness to sacrifice to get it done and reset your life in your 30s, that's pretty cool, man. It's pretty gutsy, and I like it a lot. And obviously, you've investigated nurse practitioner and what they do every day, and that is what you want to do with your life. And you're going to be heavily invested after this. You're not going to be six months into that and go, I don't like this. I mean, you don't want to get to that.

You're paying too big a price to get there. But if you're going to play this through for the next couple decades, this could be a very, very cool move for your family and for you. Very satisfying move. Good question. Thank you for joining us. Open phones at 888-825-5225. Brett says on Twitter, you can follow me there, at Dave Ramsey.

By the way, Facebook.com slash Dave Ramsey is about 5 million. Instagram.com slash Dave Ramsey is about a million. And Twitter's about 800,000. So wherever you guys want to pick up when I'm yakking, you can pick it up there. Brett says a family member mentioned it might be a good idea to freeze my one-year-old's credit. Do you think that's necessary? I don't know that it's necessary, but I probably would do it. I froze my kids when they were minors as soon as the law came out allowing you to freeze.

And the law just shifted the other day in late September, allowing you to freeze a law just shifted the other day and in late these in late september allowing you to freeze a credit bureau without any fees now they were allowed to charge you a fee to freeze it or unfreeze it up until uh late september there was the 21st the law shifted so um yeah i would freeze it and and the only reason is if someone were to steal his identity get his social security number somewhere and try to open an account in his name, if the company they're trying to open the account with checks his credit, they'll find it frozen, and it would prevent that type of identity theft and fraud. Now, if they don't check it, it won't prevent anything.

And only about three out of ten credit card applications do they actually run the credit on. They auto-issue the other seven. So that's how they issue credit cards on dead people and dogs, because they don't even bother to check. And if they check, they'll discover, you know, a one-year-old with a frozen credit account, and they'll go, oh, well, this is fraud, and they're not going to issue the card. So it'll help you a little, and I probably would do it, and I probably, and probably I would go to Zander Insurance, and I'd get identity theft protection on your whole family, including your children.

And they have a family plan that does that. That puts this hour of the day, Ramsey Show, in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carrying on 600 radio stations across the country. To find one near you, head to DaveRamney.com slash show.