The Ramsey Show - App - Paying Off Debt When Life Comes Your Way (Hour 1)

Episode Date: May 17, 2024

Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this show today with my good friend and bestselling author, Jade Warshaw, and we are here to answer your questions. It is a free call anywhere in the country at 888-825-5225. So give us a call. We'll talk about your money. We'll talk about your life, your relationships, anything and everything. We are here for you. So first up, we have Chelsea in Des Moines. Hey, Chelsea, welcome to The Ramsey Show. Hi, thanks for taking my call. Absolutely. How can we help? Have you guys ever heard of recasting your mortgage? And I was wondering if there's any

downsides to it. What's making you want to recast? Did you get like an inheritance or like a lump sum? No, we're just very good at saving and we have maybe 20 to 30, well we are getting a tax refund, but we have $30,000 squirreled away. And yeah, we were just wondering if we could lower our monthly payment. Yeah. So let's talk through this. So for anybody listening, really the idea of recasting is usually if you've got a giant lump sum of money, in this case, $30,000, you can put it towards the mortgage and then you can go in and basically have them redo the amortization schedule. So the interest rate doesn't change. And so there's no closing, you don't have to close to do it. But the point is, it can lower your payment. And so my question to you, here, we're all about paying off debt. And the best way to pay off the

debt is to pay more, not less, right? And so that would be my question is, and that would probably also be my rebuttal against this, is I want to see you paying more towards it. So can you give us more of a snapshot of what's going on financially? Do you guys have debt? So I'm finishing up nursing school. I have $12,000 of loans, which I can write a check for in the fall when I graduate but I was waiting to see like if I get a sign-on bonus or where I'm going to work what kind of loan repayment they have before writing that check off to pay off the debt. Is that it? That's all the only debt we have. And then you guys have and all your savings is $30,000. That's the only debt we have. And then you guys have, and all your savings is this $30,000. How much will you get back for the tax refund?

$12,000. $12,000. Okay. So you have $42,000. So yeah, Chelsea, I mean, if I were you guys, I mean, I wouldn't wait. I would go ahead and just pay off your student loan because you have the money for it, the $12,000. Go ahead and pay it off with the money that you guys have saved. And then any bonus or anything you get then is just gravy on top, which is awesome. And then what's left for you guys will be that $30,000. And I would make sure that you have a good emergency fund in place. So do you know what your monthly expenses are? Yeah, they're about $2,500. Total. That includes rent or your mortgage and everything?

Yeah. Okay. Is the purpose in recasting, I'm just asking, is the mortgage eating up too much of your monthly take-home? Are you feeling a squeeze? Is that why you're wanting to do this? I think technically it is slightly above 25%, but once I start working, we're going to almost double our income. So to answer your question, we don't really have to lower the monthly payment, but I'm just like excited to pay off our mortgage. Good. Listen, I love that. The way we, let me just kind of

outline the way we would teach it in order to get to that point, because Rachel and I both want you to get to the point of paying off your mortgage and you're actually starting to get to the point where you can start working on that. So Rachel already said, like, you'll have the 30,000 saved. We could call that three to six months of expenses because your refund is going to pay off the debt. Right. So you pay off the debt. You have three to six months of expenses. When you start working, then you're going to start saving 15 percent of your income. You and your husband combined. You'll figure out what that feels like. And then, you know, you can start putting aside a little bit if you guys plan on having children in the future. When that happens,

you can start putting aside a little from that. And then you're actually cleared up to then start putting extra money onto your mortgage. And we would just say, apply it directly to the principal. So pay your normal payment. And then when you have extra money, just as you see fit,

like you can be very intentional. Yeah. And Chelsea, for you guys right now, I mean, your monthly expenses at $2,500, which is pretty remarkable if that's it, is great considering that your mortgage is included in that. If that's true, then your six-month emergency fund, it may not be that big. It may be close to $12,000, $15,000. So you may have $15,000 to $18,000 extra of cash in that fund. And if you want to apply it like jade is saying to the principal of your mortgage and go ahead and do that i would be great with that and you can even run some numbers and just say hey if i did a one-time swipe of 18,000 on the principal and

just so you know now granted your mortgage is i mean how big is it how much money do you guys owe on it um 148 okay okay so it may make it makes a dent i mean it's it's not recasting it which is great but when you do like let's say you have 13 000 to put at it like right you don't keep all that 30 000 saved it is gonna cause on your monthly payment more of that payment each month to go towards the principal when you do that and And so that's, that's really the magic of this whole thing. So that's awesome. Yep. Thanks, Chelsea. Thanks for the call. Hope that that helps. Yeah, Jade, I think that's one of these things, especially in not this specifically with the recasting, but the housing conversation, you know, trying to kind of find these like, these ways to be able to do it because people want in the market it's just crazy

expensive but when things like recasting come out it sounds good at first where it's like okay I could apply all this money I'll have a lower payment that's great but to remember the goal was not to have a lower payment the goal was to get out of that get out of debt as quickly as possible that's right that is right well I love that conversation yeah and the truth is you know I even find that when you walk through the baby steps, you get to this point where it's like, I've paid off all my debt and you're going, you've been so intense that a lot of people want to carry that intensity to paying off their mortgage as well.

And listen, I always say if you and your spouse, if you're married, if you and your spouse decide that you want to keep that intensity, great. Yeah, but you don't have to. You can kind of like pull back a little bit and say, listen, we've worked hard. We have sacrificed. Let's enjoy our life a little bit. And at that point, when you go to paying off your mortgage and baby step six, it's really about having that intentionality there. And so it's not a set amount. It's not to say every month I have to pay an extra mortgage payment or, you know, it doesn't have to be hard in the paint like that, but you can decide what that rhythm looks like. Is it anytime you just get a windfall of money, you put it on there? Is it, you know, anytime,

you know, you can look at your budget and figure out what's a normal rhythm of me being intentional, but that still allows me to have life, have a life. Yes life yes yeah because for so many people those steps you know one through three I mean it's intense you guys and and we were talking to a couple earlier even today and kind of encouraging them motivating them to be like to go all in and the deeper seeing that sacrifice the faster the faster you're going to start to see progress and it's worth sacrificing really deep for a short amount of time versus just dragging it out. And then, you know, once you're done with that, though, especially those that, man, they sacrifice like really deep,

have some breathing room, to your point. That's right. Yeah, that intentionality steps four through six. They're there. So even for Chelsea, even if they wanted to keep that and not put it towards the mortgage right now, wait till she has a job, wait till the fall a little bit, you know, that's okay too. But I would pay off those loans, those student loans today since the money's there. They have a built-in emergency fund, which is great. And then anything

extra they want to put to the house, put towards the principal. Thanks for the call again, Chelsea. This is The Ramsey Show. so for years people have been asking for clothing items jade yes that say things that they love when it comes to money things like better than i deserve or debt free and people will make their own yeah they come and yeah they have their their shirts or their sweatshirts and all of it and so finally somebody on our team had the grand idea of like hey we just need to do this so you guys we have some Ramsey merch which is really fun we sold this for the first time at the Total Money Makeover weekend live and so many people were wearing it and it was so great it's cute too it is cute this I saw a bunch of these girls wearing the sweatshirt and I remember I told the girl I honestly this

sounds terrible I didn't even know it was ours and I told him I was like I love your sweatshirts like thanks we just got them out in the store and I was like I was like I'm glad we're selling cute stuff y'all so like look at oversized sweatshirts ladies so it just says debt free good conversation it's embroidered it's not just like yes screened on like it's like very nice yes and then we have some t-shirts you guys this one says uh better than I deserve. We got a blue one. Yes, beautiful. A hat, another.

What's this one say? We have food at home. What a classic Ramsey way. A hat. Oh, and then the great. We love a good mug. Love it. That's like the Stanley kind of.

Yes. White Stanley looking mug. Live like no one else. All of it, you guys. So it's just some fun merch. So make sure to check it out. You can go to RamseySolutions.com slash store. And another great perk of it, which I think is always fun, is, you know, it's kind of a conversation starter when you have somebody that's wearing like a cute debt-free sweatshirt. You know, naturally people are probably going to ask some questions. So then you get to share your story, talk through maybe the process, the journey you're on to be debt-free or whatever it may be.

So it's some fun stuff. So again, go to ramseysolutions.com slash store and look at the fun, fun stuff that we have there for you. All right. Next on the line, we have Joe in Palm Springs. Hey, Joe, welcome to the show. Hi, thank you. I appreciate you guys taking my call.

Absolutely. How can we help? I'm calling because my wife and I, we've gotten to a point where we've only got two remaining debts. It's our car payment and then our house payment. Nice. And we want to know if we should be throwing all of our money at the car and the house, knowing that a neighboring school district. I'm sorry.

My wife is a teacher, by the way. And a neighboring school district just started issuing layoffs to teachers because they're running out of some of the COVID leftover money. And we're a little bit nervous about how hard we should be going after the debt or if maybe we should be supplement know our six-month emergency fund a little bit beyond what that six-month amount would have been um i mean do you think she could get a job within six months a teaching job um probably not for the pay that she has she she works in the more um you know probably the the higher paid district in our neck of the woods over here. Okay. And so, yeah, if she were to be losing a job like that, I mean, obviously that'd be a pretty heavy hit to, you know, our income that we have coming on in. What is the income?

She'd absolutely go and work. So our growth from last year is $146,000. I mean, right now we're taking home about probably $8,900 a month. She's also out, other caveat too, she's out on maternity leave right now, only bringing in 50% of her regular pay, at least until August when the new school year starts.

How much of the $146,000 was hers? Versus... Yeah, hers was $88,000. Okay okay and then mine is another 60 so joe i mean what's i mean have they given her any indication that she would be one of these layoffs or is this just like oh my gosh they're laying off and we're scared and we're kind of freezing i just wonder how much of this is actually a reality for her um No, I mean, her district won't tell anybody anything, but she's a relatively newer teacher. She doesn't have as long of a tenure

as a lot of her other colleagues do. Okay. I mean, honestly, Joe, you guys have six months. If you had three months, I would say I'd probably bump it up. Absolutely. I mean, I think you're six months. I think that, yeah, you guys are fine. If you want to run out a monthly budget

on what a new income would look like if worst case scenario happened and she did have to get a job with a lower pay, what that pay would be. And you guys just kind of run some calculations and see how you feel with that. But honestly, I mean, the six month emergency fund, that's the conservative side, obviously, of the spectrum.

And so I would feel okay with that um if it were me and i understand that she's you know you guys have a new baby is this your first yeah it is okay and she is planning on going back to work correct she that's correct yeah and the truth is if if the worst were to happen and there was a layoff or if she was let go she could find a teaching job it may not be be at, you know, in the district you want or at that same pay level, but she would find something until she finds the thing. So I do feel good about that.

What do you owe on the car? The car, we just owe $22,000. We've prepaid it all the way through March of next year. So as it is right now, it's not accruing any interest. No interest will hit it until next year. So as it is right now, it's not accruing any interest. No interest will hit it until next March. Why did you prepay it as opposed to making a lump sum towards the principal? We just weren't sure how our finances would shake out once our baby arrived. So we paid out. I mean, we killed off all of our debts and then tried to pay ahead on the car as much as possible,

just so that wouldn't be something we have to worry about for about a year's time. In case we just had money issues that popped up with. How much is in the emergency fund, Joe? We've got $22,000 in our emergency fund. And that's what you owe on the car? That's right, yeah. If you want to know. Do you think that we should try paying ahead on the car that's right yeah if you want to know that we should try paying ahead on the car or should we just well it's just kicking the can down the road

yeah continuing to stay in debt versus just paying it off and being done with it yeah if you really want to know what we would tell you i mean if we're just chatting face to face i would tell you i would say and this is what I would say to anybody, I'd say, you're going to be better off paying off that debt today because what's the payment? And I know you're ahead on the payment, but what is the payment? The payment is $700 a month. Okay. So think about how quickly you could save up an emergency fund when you have an extra $700 a month, along with whatever extra margin. And that way you're done. It's free and clear. You're not worrying about interest. You're

not playing a game. And then you guys are set up going forward that it's not really the question that you're asking today becomes a moot point. It's like, yeah, from this point on, we're saving up until we have a nest egg of three to six months that makes us feel safe and secure. And we're going into this maternity time and, you know, new baby time with ultimate peace because you don't have any payments. Right. Okay. Yeah. Yeah. Yeah. I hope that helps, Joe. I know it's probably not. I know. Yeah. Not the maybe not the direction you were calling. But again, it's this idea the direction you were calling. But again, it's this idea of... We wanted to run it by someone else.

I appreciate having someone on the outside looking in because we kind of get tunnel vision on what our concerns are. Yeah, totally. And I think the reality, too, is what can happen so often. Yes, the layoffs are a reality. They are happening. But at the rate of which they are and it actually coming to fruition, it hasn't happened yet.

So there is a point of that reality of saying, okay, if something were to happen, then we act upon it. We don't necessarily have to act upon it when it hasn't occurred yet. That's right. And sometimes that's a different mindset. But yeah, I'm not being able, if you guys wanted to keep, I mean,

I wonder when she would be able to know about the job, but still taking it down to that thousand dollars and then you guys saving what you can. Yes. To save up for it. And it's worth noting, honestly, for anybody listening, I'm always going to recommend you, if you have extra money, I'm going to recommend you put it towards the principal, not make extra payments. Yes.

It's kind of like the recasting we just talked about that's right degree right you're kind of like shuffling the deck a little bit versus just saying no go actually on the principal because that's going to help you better in the long term mathematically speaking and you almost always have to call in order to do that whether it's with your mortgage a student loan a car payment you almost always need to call them and say i already made my like I already satisfied my monthly payment, which goes, satisfies the interest for this month. Now this lump sum amount, which is separate, I want it to go fully towards the principal and you have to call in order to do that. So yeah, we, we were talking to somebody, it may have been on the show or on social media or something. I remember saying, and they were making extra payments, but when they saw their

principal really hadn't changed much and Yeah. And it was just catching up on all this interest payments. Yes. And it didn't do mathematically what they wanted it to do. So that's a really good point that when you are making extra lump sums towards your debt on the principal,

that usually takes a phone call, some level of communication to be able to make sure that that's where that money's being directed because that's where you're going to see the biggest bang for your buck in that. That's right. So it's a great question.

Thanks, Joe, for the call. This is The Ramsey Show. Welcome back. I am Rachel Cruz hosting with Jade Warshaw and here to answer your questions. So give us a call at 888-825-5225. And today's question of the day comes from Miranda in Florida. Yeah, she says, a couple of years ago, my husband bought a house with his mom. He told her that if she helped with the down payment, he would pay the mortgage, taxes, utilities, etc.

I agreed because I thought it would be temporary as a way to help each other out. But it's sounding more like it's a permanent thing to secure her retirement. I didn't imagine living my adult life working so hard to pay bills and still feel like a guest in our home. I'm not against him taking care of his mom. I just want to live in my own space where I can relax. I love my husband so much and I don't want to get a divorce. I told him if things don't change in a couple years, we need to find our own place. He suggested that we rent a small apartment where we can live by ourselves with our child. His mom can stay in the house while we continue to pay the mortgage as an investment property. She's elderly, so she cannot work. Is this the best solution?

Oh, man. Oh, geez. Okay, Miranda, we hear you. We hear you. Yes. And I'm so sorry. I'm so sorry. But this is why, you guys, situations like this, especially if you bought a house with the mom, I'm assuming both names are on the deed. I mean, that's where stuff gets real dicey.

Hopefully, that's not the case. Hopefully she just gave money towards the down payment. Yes. So, yeah. So what I would do is like, there's a realistic conversation to be had of, I mean,

honestly, if there, if someone's going to live in a small apartment versus a house, say it, Rachel, there's a family involved with children, right? And there,

and you can find a great spot for her, but it's just her living, right's just what she needs and now if she's elderly and doesn't have a lot of money uh you know depending on her situation and where you guys are i mean there may be a reality in a world where you would you help pay maybe the the rent in that way grandma gotta go to the apartment yes but grandma's gonna go to the apartment yeah yeah because at the end of the day you know especially if you guys are not on the same page i mean we know i mean i think it's kind of more few and far between but people that live with their in-laws and it works you know like i mean that's that happens and both parties are genuinely

happy great with the situation uh but the fact that you guys are on such uneven footing when it comes to the emotional decision of like hey living with your with your mother-in-law then yeah then something something needs to change and again and it would I mean and there's a lot in that on whose name is is on the house too because there would have to be a whole process to get someone's name off or someone's changed and all of that so in the cleanest way possible if his name and you guys own the house but she was the one that was just contributing right to the down payment um there'll have to be some conversation of equity though but um because of what the amount she put

in versus what you guys have paid um because she did put a down payment down so there is a level to be compensated from an equity standpoint in that for her for her retirement. But yeah, this ongoing process with no end in sight, that's what needs to change. And for you guys to have an end date would be the goal. Yeah, absolutely. I validate that 100%. I think it's totally fine as the wife to say, hey, I'd like our own. I'd like a place of our own and be able to experience life as our own family here and I love your mother but yeah we can help her with an apartment but there's also something to be said uh you know she says that they've been working you know paying off their debt she says we've been working our whole adult life you know and it's like you've got to be in a place where you

can help that's right other people and I don't know that they're in the place financially where they're able to help and not hurt themselves in the process that's a great point yeah for sure yeah that that's the hard thing too is because when people get in a situation especially with you know parents and when they're going to retirement we've had a lot of calls of that of kids saying what's my responsibility for my parents but if you're not in a good place financially then you're you're not going to be able to help so getting you guys in a really steady place financially that if there was margin to be able to help and that's what you guys decided together then that's a whole other you know thing but if but i would see what is in her retirement and what she can what she can float you you know, in a living situation.

But that is sticky and it's hard because there could be promises that she feels like you guys made or that he made and you're breaking those. So there's just going to have to be a really hard conversation, kind, and you may have to revisit that conversation once or twice because it's going to be pretty, could be pretty emotional. So 100% hope that helps Miranda.

All right. Up next, we have Darby in new Orleans. Hi Darby. Welcome to the show. Hello, Rachel. How you doing?

Doing great. How can we help? Um, I have a two part question. My son graduated high school recently and he was planning to join the Marines in about a, about a year. So I have a vehicle of my own, a 2017, about 110,000 miles on it.

So I'm trying to figure out how should I pass? I want to pass the vehicle to him, but should I give it to him as a gift or should I sell the vehicle and give him the cash to buy his own vehicle? That it's paid for? Yes, the vehicle is paid for. How much is it worth, do you think? About $7,000.

Okay. I mean, either way, you know, I think would work. I think maybe having a conversation with him. I mean, it's a very kind of you. Yeah. I mean, if you're in a place where you can let go of this asset and you're fine and it's paid for and everything. Yeah. Maybe just ask him, hey, do you want this car? And it may be actually a really great quality car. You know, even though it's past 100,000 miles, it still could be in a great condition versus him having to go and car shop and, you know, pay for an inspection and like all of that that you have to do when you buy another used car or give him the option. Yeah. If you want to go through the selling process, I can help you with that and even help you find another car that's worth the same amount of money. It sounds like more hassle. There's a part of me that would just take the car and be thankful for it. But I guess, you know, it wouldn't offend you if he said, oh, my gosh, I hate this car and I would much rather have another $7,000 car that you guys could kind of tag team and

do that together. Is that possible? Yes. Yeah. If I give it to him or sell it, I'm not selling it, but if I give it to him or sell it I'm not selling him but if I give it to him I take cash for it I plan to buy myself a vehicle with cash oh you're having him pay you back no I would probably just give it as a gift or just sell it sell the vehicle to somebody and get cash for it and then maybe just see what he wants to do because maybe he wants a different type of vehicle than what I have right now yeah right so I would

yeah I would ask him I think that's a fair thing yeah just to see what he wants because he may be great with just being given the car um or again if he doesn't want that specific car then he could say yeah dad could you help you know could you sell it and we'll get some cash and we can go car shopping together for that amount of cash that could be i i you know i think it'd be okay for him to make that call since it'll be his him driving it that's true yeah what will you do if he says yeah dad i i want the car uh and what will you drive and what's your plan for your next vehicle um i have cash saved already to buy a truck and i'm looking 25 to 30 thousand okay awesome so great good how generous though darby and what a great position to be in

i'm like to start off you know as he's graduating and going off to the Marines and everything for a year, to be able to have a car, that's really, that's a really generous gift of you to give your son. So I have a second part question of the same thing. Okay, yeah, we have about 30 seconds. Okay, should I put his name on my insurance? Put his name on your insurance? Put his name on your insurance? Car insurance?

And yeah. Yeah, I would price it out. Car insurance these days is getting like really crazy expensive. So I would probably price out what the cheapest option would be if it would be to bundle on yours. Or if, yeah, if it's cheaper to get an individual policy. You could go to Ramseyysolutions.com slash checkup and it'll do all of those insurance checkups for you and you can see the best option

or check with Zander Insurance, really. Yeah, that's right. Yeah, go to zanderinsurance.com and see what they would do because yeah, car insurance, it's a tricky, that's a tricky field right now, Jade. We're seeing prices. It's gotten crazy.

It's just gotten, and even home insurance, I mean, everything, it's just really gone up so i would price out and see and again if he's a responsible driver and it's not going to hurt you long term um yeah i would be okay that for a year because he's going to go off to the marines um yeah i wouldachel cruz hosting with jade warshaw and you know we've had so many new people join join the show because of podcasts and youtube and all of it and so many of you callers are even new callers you know we've gotten a lot that say oh my gosh i've just been listening for the last three months some of you have been with us for three years, for 13 years,

but regardless how long you've been listening to the show, one of the best ways to get the word out is to share it with your friends, with your family. And we see that. We see the bump when it comes to the algorithm. We see where we're rating in different lists. And what's great about that, I don't know if you're like me,

but if I'm like on a walk and I'm like, oh, I need a new podcast, I'll go to the top shows, just search like the top and kind of look through. And sometimes that's how people find us, which is awesome because we want people to have peace when it comes to their life and their money. And if we're able to help guide that conversation and hopefully give some new perspective, maybe a new plan, a new pathway for people.

That's really what we want. We really do have a heart here to help people find peace when it comes to their money because it's such a stressful topic, Jade, and such full of a lot of shame and confusion. There's so many messages out there. So if we can give common sense truth, that's what we wanna do.

And people find that and it helps change their lives. And one of the ways they do that is because of you guys sharing the show, reviewing it, subscribing, all of it. So we thank you so much for those of you that have done that or that will do that. We really, really appreciate it. All right. Up next, we have Graydon in Spokane, Washington. Hey, Graydon.

Welcome to the show. Hey, how y'all doing? Doing great. How can we help? My girlfriend and I are looking to get engaged probably near the end of the year this year and get married in 2025. And we both own our own homes. And I know normally Dave says not to invest in real estate unless you're going to pay cash. But since we both own our own homes, we were thinking of selling my house and using the equity from that to buy a home

because we'll have five kids put together that will need to fit under one roof and then would it be dumb to keep her house as a rental at that point and rent it out or should we sell both homes i'm just curious since we already own both homes and have over 200 000 in equity on both yeah for sure okay so tell me about your home how much how much is it worth if you were to sell it today? $450 to $500. Okay, and how much do you owe on it? $200. Okay, and then how about her house?

Hers is pretty much in the same range, $450 to $500, and she owes $250. And she owes $250. Okay, great. So if you sold them both, you'd walk away with what? Probably $400,000, $450,000. So you said you guys plan on having families. What would happen if you sold them both and put this money down on the house that you want to buy together? That's definitely an option. That's kind of what I was wanting to ask. Like, I know the thing is right now, obviously the interest rates are significantly lower on the homes we own and whatever we buy together, the interest rate is going to be triple plus what

we're currently paying. Or I guess double, a little, probably two and a half times what we're currently paying. So I didn't know if because of the lower interest rate, if it would just make sense to keep it as an investment property and rent it out, or if it would just make more sense to sell both. Yeah. I mean, in most cases, it's going to be to sell both. I mean, unless you had the cash to significantly put down on one of the houses and the one that you want to buy. I mean, are you guys combined when this happens, when you guys get married? What will your situation look like financially? What kind of debt do you guys have? Consumer debt?

What kind of savings comes into play? I just recently started the program and I wasn't very far buried in the first place. I only had like $3,000 in credit card debt and that only took me a month to pay off. And then I know she has 40 000 in student loans but i figured use the equity from my house to be able to pay that off quickly and then our combined household income would be in the 180 to 200 range my income varies based off

overtime that's great um so it would easily afford both houses and that's kind of why i was like maybe it makes sense i'm not i'm not Whose house is bigger? Like, what's the better property of the two? Yours or hers? So mine, we could, in theory, fit the whole family in. It's a five bedroom, three bath. Oh. So in theory, we could fit, but it has no backyard. The backyard's trash.

And the house isn't nearly as nice and stuff on the inside. It's older than her home, but her home only has four bedrooms. And we'll have five kids right away. And then we would like to ideally add another kid eventually. Why will you have five kids right away? She has two or she has three kids. Got it. Got it. Okay. So you're combining families. There's part of me, here's another option. And I mean, there's not, this is not a right or wrong, but what would it look like to sell one of the properties? Cause they're about worth the same and there's the same amount of equity it seems like just about what would it look like to sell one of them and pay off the student loans and put most of it towards the

house that you keep and it's almost mortgage free and with your income you're mortgage free in the next I don't know in a very short period of, depending on how quickly you want to go. And then you're kind of like in this place where we don't have to do anything where we don't have any debt or it's very low. Our mortgage is very low. And if you decide, okay, the five bedroom house isn't working for us, we want at some point, we're going to want a bigger yard. That's great. But you're just financially better off and you don't have the rental hanging over your heads and you've freed up a bunch of income yeah I almost would just say great into sell hers and then you guys take out what's left when that's what Jade's what Jade is saying but throw it at this mortgage and at the student loan you can basically have everything paid off yeah and then

wait a year or two I mean there's no rush and just see even at that point you know what what the housing market's doing what rates are doing all of it i because i would almost just want to be in a paid for house at this point and try to juggle two mortgages because the truth is too yeah in a dream world having hers as an investment property i get it but what happens when someone doesn't pay rent what happens when things break in it i mean like you still owe money on it so in that case it's not this cash free investment uh it's something that you guys are gonna have to deal with and a part of me would just say golly i would just simplify it all enjoy your married life newly newly married for a year or two and then if you guys want to upgrade houses you can because our all five kids um will they be

full custody with both of you like will you guys have all upgrade houses, you can. Because are all five kids, will they be full custody with both of you? Like will you guys have all five like pretty consistently, would you say? Or what will that look like? She has her kids 50-50 pretty much exact. And then I have my kids every Thursday and every other weekend. Okay, okay.

So even from a space standpoint, you know, you guys would be fine in the five bedroom. And I know you said it's older and all of that. But man, there's, Graydon, I'm telling you, there's something about. Freedom. Freedom. Yeah. Not having any payments at that.

I mean, like you guys have done really well so far. So just keep that. I would just keep that going. And I probably, I wouldn't fool with keeping an extra property. I think about whichever one, if you're really concerned with interest rates or really concerned with wanting to stick with one of them long term for some reason I'd choose the one that you maybe can make into what you want it to be right like you said one of them the yard is trash but maybe the other one is good and there's like space if you ever wanted to you know make some

improvements with it because the truth is you're going to have a lot of extra money that you can throw at fun things like that if you do it the way that Rachel and I just suggested. So I'd also put that into the equation and think, OK, maybe the yard is trash, but maybe if we put some money into it, it could be awesome. So there's there's some creative thinking, I think, that can be done here, not just financially, but to create to make these one of make one of these properties what you ultimately want it to be yeah okay and

then I'm going to give you another path great and sorry I know we're going all the way around let's go um if you sold both like the how the price point of houses right now what would a house be in in like your dream world like what's like oh yeah we could get it for x amount i mean it's kind of crazy we've been kind of looking on zillow a little bit and this is allegedly according to the end we're one of the most hottest areas in the country right now um and if you put a five bedroom filter you can put it from 300,000 to 800,000 and the cheapest house is like 600 right okay because i was gonna say and the cheapest house is like $600,000. Right. Okay. Because I was going to say the cheapest house is probably crappier. Is the cheapest house crappier than your house?

No, I would say it's nicer. It's nicer? Okay. You have a better kitchen, granite countertops and all that stuff. It's a little bit higher end. Okay. Because if you did sell both, you'd have around $550,000 but you'll still have a lot of fees in that which may take down. Yeah, which would take it down. And then you'd have a small mortgage on

a small amount on maybe $200,000. But I don't know if that's worth it right now. Great. And a part of me would just, man, it's the rates for me. Yeah, I would sell hers, take that equity, pay off her student loans, pay off most of your mortgage. And man, that's a, yeah. And you can always upgrade countertops and all of that later if you want, or wait a year or two. And if prices, you know, stay the same or continue to tick up a little bit, save some money, sell yours and, you know, put that money with it and get a, get a house that you guys want.

So I hope that helps. Thanks Jade for being a great co-host. Thanks to everyone in the booth. Thank you, America. This is The Ramsey Show. We'll see you next time.