The Ramsey Show - App - Retire When You WANT to, Not When You Have To! (Hour 3)

Episode Date: October 19, 2021

Debt, Retirement, Taxes, Savings, Home Buying As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Thank you. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, Ramsey Personality, host of the Fine Print and Entree Leadership Podcast. Open phones this hour, 888-825-5225. Now, if you're wondering who this guy is hosting the show solo, let me fill you in. I'm not quite the new guy. I've been on the team here at Ramsey for over eight years. I started as an intern and a temp back in 2013. And I followed these steps. I came in the door with $40,000 in debt. And I realized, you know, if I'm going to work here for a long time, I want to follow this plan and make sure it actually

works. And so I did that. And I became debt free in about 18 months, and I started following this plan, and I met my wife here. She still works here. It's fantastic. Great carpool buddy. And we me tell you, I'm not special. No inheritance here, no wild incomes, just diligence. Just decided that we wanted a different life for our family, wanted to change our family tree. We wanted to be able to live and give like no one else and take outlandish vacations and do some really fun stuff and not have to wait until retirement. So that's my heart. My heart is to help other people in their 20s and their 30s get a hold of this stuff and realize that they don't have to wait on the government or some legislation or the jackpot in order to live their dreams and live their best financial life. That they could pay off their debt and they could start investing

and have emergency savings to not have to swipe a credit card to get by. And so if that's you, give me a call, 888-825-5225. I'd love to help you out in any way I can. We're going to go to Robert in Knoxville, Tennessee. Robert, welcome to The Ramsey Show. Hi, good morning. Thanks for taking my call. Absolutely. Good afternoon, actually. That's all right. Time flies when we're having fun. How can I help today? I have a question of should I do it? I'm 59. I have no debt, no car loans, no student loans. Oh, about $65,000 on the house. And my wife's car is close to 18 years old. I've been paid off for a good 10 years at least. And if my money market account's getting one half or one percent and a car loan is going to be expected to be four and a half to five percent shouldn't i just take it out of savings and go ahead and pay off the car in full just to be done with it and technically i'm saving four and a half

percent right are you saying to pay for the car in cash or are you saying you're wanting to take out a loan pay for the car in cash that's are you saying you're wanting to take out a loan? Pay for the car in cash. That's what I'm thinking I should do. Oh, and you're saying, well, it's normal for people to just take out a car loan. And you're saying, why would I do that? Yeah, at 4.5%. I don't, yeah, I mean, we're in the boat of I don't care what the interest rate is. If it's 1% or 70%, we think it's dumb to take on any debt of any kind, and that you're better off paying cash for it,

especially a depreciating asset like a car. So you've got the right mentality around it. What's this car going to cost? $40,000. It's a used Mercedes. Okay. Are you guys— 43 years old anyway.

Yeah. What's your household income? About $85,000. We've got about $200,000 in each other's savings account plus another $350,000 and two other retirement accounts. And I have a fully funded emergency fund that is $60,000 just sitting there. Hold on. You've got $200,000 in cash? In the bank, sure. And you have a $65,000 mortgage. Yes. Is it a pet? Why are you keeping it around?

Pay this thing off today. I was planning on doing that in early 2022. Why not late 2021? Because the car was the question. The older car, 17, 18 years old, it's getting older. But you've got the money to do both. You could pay off the car and buy that Mercedes today. You could pay off the mortgage and buy the car.

At 59, I've probably got another good eight years before I retire, right? Okay. But you've got this money in liquid cash. Yes. So the question is, why are you holding on to the mortgage? Well, true too. Nice point. I mean, if I'm you, I want to be debt-free, baby step seven, living and giving like no one else today.

You guys have worked really hard to have all this big pile of money, and it's not working very hard for you when you're sitting there paying a lender every month. Right. So what do you say you pay off the mortgage today? Do you have any other vehicles currently? Yes, I have an old seven, I don't know, Chevy Cobalt. Hey, no joke. I had an 07 Chevy Cobalt.

Still runs. I think I'm talking to my future self, hopefully. Are you a millionaire? Is your net worth over a million? No, I'd like to be. What is your net worth? Oh, off the top of my head, maybe a half a million. Okay.

Well, I mean, it's an expensive car based on your income. We have kind of a parameter that everything with a motor in it should add up to no more than half of your income. And so you're edging up close to it. You're not in terrible financial shape obviously, so you're okay, but I wouldn't go any crazier than that car right now. Okay. And you do have a pile of money, so it makes me feel a whole lot better about this but uh is the mortgage your only debt yes sir man i'm getting rid of that thing today and i'm going to be on the car lot tomorrow and i'm gonna be driving away with that mercedes and you're still gonna have plenty of money sitting in cash in the bank are you guys on track for retirement

i believe so, yes. Because it sounds like you're heavily weighted in liquid cash and not a ton in retirement investing right now. Is that right? I've got two retirement accounts through various jobs. Okay, but they don't add up to more than a half million total without all of your assets. No, those two are only about $180,000 to $225,000. Yeah, that's my only caveat here is you don't have a ton in retirement right now if you plan on retiring soon. So I wouldn't, if I'm you, I'm taking a pause here and going, okay, let me,

what's best for my financial future in retirement? Is it buying a $40,000 car that's going to depreciate in value? Or should I really be focused on building that retirement nest egg so that I can retire at 65? Okay. I've got to wait until 67, don't I? No, you don't have to wait. You know what he says? No, absolutely. I mean, what do you wait until 67 for? Because I like my work, I guess.

Oh, well, you can keep working, but I want to make sure that you've got enough money to live on in retirement when you decide. I like to have options. I don't know about you, Robert, but I want to be able to retire when I want to and not when I have to. So there's no law saying you have to retire at 67. You can work until you're 85.

I think Dave Ramsey will. He just loves to work. But he could also stop working today, and it'd be no issue. All right. Man. Sorry, you're in a good spot, Robert. But I would be questioning this retirement savings before I jump on this $40,000 car.

You've got this pile of money. I might invest that money and let it grow so that you've got a big old retirement nest egg. But you've done a really, really good job, And I want to see all this mortgage paid off. You got this, man. This is The Ramsey Show. Hey, I'm Christi Wright. Let's be honest. When it comes to our quiet time with God, sometimes we struggle to make the time

and get into good habits. That's why I'm so excited to tell you about the Glorify app. For me, it has been an absolute game changer. Every morning, Glorify guides me through God's Word with a bite-sized Bible reading, a daily devotional, and a guided reflection that simply helps me to connect with God. Give Glorify a try. Just search for Glorify in your app store. it's free to download i'm george camel this is the ramsey show open phone lines this hour 888-825-5225 the last 18 months have been a lot haven haven't they? A lot of worry, a lot of wondering what would happen next. Maybe that's how you feel about your money too. Tired,

stuck, stretched thin. But it doesn't have to be that way. You just need a plan. A plan gives you confidence even when everything else seems out of control. And that plan is Financial Peace University. This class will teach you everything you need to know to save money, pay off debt, and build wealth for the future. You can stream the lessons on your own or get support by going through the class with others. Then you'll put that plan into practice with the premium version of our EveryDollar budgeting app. By syncing your bank to your budget, you can easily track your spending and see where your money goes. And you get all of this only with a Ramsey Plus membership.

You don't have to stay exhausted and overwhelmed. You can win with money. To start your free trial of Ramsey Plus, text TRIAL to 33789. That's TRIAL to 33789. Ken joins us in Augusta, Georgia. Ken, welcome to the Ramsey Show. Thank you. How can I help today? How are you guys doing?

Great. It's just me here. It's lonely, but I'm making it. Good. Good deal. Hey, just got a quick question for you. In the past, I've been sucked up into the leverage, leverage, leverage, and I'm starting to just look at different ways of doing stuff

and came across Ramsey in the past three to six months. I've got one vehicle payment and going to be paying that off probably within the next four to six weeks. Okay. But I'll be starting to hit the house, and I also have three investment properties. What I'm thinking about doing is taking the house and paying that down so it's below the PMI and then starting hitting the investment properties. What do you think of that? Well, I think you're trying to do a lot of

things at once right now. You've got some debt. Is the car loan your only debt other than the investment properties and your mortgage? Yes. Do you have a fully funded emergency fund of three to six months of expenses? Yes. Okay. So we're in good shape there. If I'm in your shoes, I want this primary mortgage gone before I continue in this real estate investing journey. So as far as paying it down, I mean, do you love all the properties? Would you be willing to sell one in order to pay off your primary mortgage? Well, selling one wouldn't pay off the primary mortgage. The cash flow really well. They're doing great for me. So I really am not super excited about selling any of them. Okay. Well, at the very least, I would attack the primary mortgage first,

because you live there. If the bank comes after the investment properties, you're going to be okay, but you live in this primary residence, so I want this one gone first. I've heard that also in the past, but I could also sell it, even if I have no mortgage on the investment property, I could still sell that if the bank comes after me for my personal property. Sure. I just don't want anyone coming after you for nothing. And so I want to put myself in a solid financial position to where I don't have to worry about any of that. And so the way we teach it is you're paying off your primary residence first before we are building wealth through investment properties.

And so you've already got them them and they're creating cash flow. I'm not going to make you sell them, but I do want you to aggressively pay off your mortgage and get that out of your hair and you'll have even more cash flow then. And then you can work on paying down the rest of the investment properties until you have four paid for properties. Yeah, I guess what I was looking at also is I could have all those investment properties paid off in a year

and then come back and pay off the personal property, but I understand what you're saying. Well, how soon can you have all four paid off if you attack your primary mortgage first? Three to four years. Well, I'm doing the long game here and getting rid of that primary mortgage. I mean, is this primary mortgage a big chunk of your income? No. Our gross income is about $350,000, and the primary mortgage is $335,000. The investments are $55,000. The balance due on the investments is $55,000, $85,000, and $125,000.

Well, you've got a fabulous income. You could pay this thing off in no time on your primary mortgage and then start attacking those investment properties. That's the way I would do it, and that's the way we teach it. But you do, you can, but you're doing great. You guys have a fabulous income and clearly you you enjoy real estate investing i just want you to do it in the least risky way possible and so getting rid of that primary mortgage is going to be the way to do that thanks for the call justin joins

us in glendale arizona justin welcome to the ramsey show thanks how are you today doing great how can i help yeah i got a kind of what would you do situation. Oh, these are fun. Me and my wife are renting, we're renting a house from her grandfather. He decided to sell it to us for around $200,000 and then appraise for $440,000 right now. Wow. He's actually given us $15,000 in cash on top to just kind of help out his granddaughter.

He was going to give her the house screen clear, but he decided he couldn't really do that. So this is what he's doing for us. Okay. We, we don't have any car loans or any debt. I have maybe $1,200 on some credit cards. I was honestly getting ready to pay off.

Should I pull out some of this equity to fix the house up? The house is in good condition, but there are some things that are wrong with it I'd like to get done. And then also, me and my wife have only been married for a couple of years, and I don't have really any real retirement or savings going right now. Do you have an emergency fund? I have $5,000. You got $5,000 and you have $1,200 on credit cards? Yep. Dude, pay that credit card off today. Is that the only debt in your life?

That's about it right now. What's about it? Is there more here? What's the full story? No, that's it. I have one credit card. I'm an avid hunter, so I have one credit card I was using to put stuff on to get the points. We'll let that go about six months, revolving and rotating, and then I end up paying it off when my hunting season's over. Well, look at that. Here's what I'm going to tell you to do.

Go listen to our credit card rewards episode of The Fine Print. Hopefully that'll change your mind on this whole rewards thing. It's a scam, man, and I don't want you falling for it anymore. You guys have a bright future. You've got an incredible opportunity here. But what you're asking me is should we use a HELOC to get this house fixed up, correct? Correct. The answer to that is a resounding no. The HELOC is going to put your home at risk.

It's probably going to have a variable interest rate, and it's going to set you guys back in the long run. And so what I would do is cash flow these repairs as you can. Can you get into this? You're in the house right now? We are, yeah. Renting? It's in escrow right now. I should close on the 30th. Okay. And you can afford this mortgage? Absolutely. All right. Are you getting a 15-year fixed?

It's 30-year. Oh, boy. Is it too late to switch? Yeah. Oh, boy. Okay. Well, glad I caught you at least in this moment to stop you from doing the HELOC. What we recommend is 25% of your take-home pay on a 15-year fixed.

That's what I want the mortgage to be because I don't want you to be house poor. But on the HELOC side, absolutely do not – don't mess with a HELOC. Don't do that. It's going to be a nightmare, and when you go through that line of credit, it's going to come – that balance is going to come due in full, and the bank can take your home. And so this is putting you in a real risky financial position that I don't want you guys in as you're in the early stages of this marriage. I want as little anxiety as possible. So avoid the HELOC. Cash flow the repairs as you can make them.

You said it's livable. There's nothing on fire here. Cash flow these repairs as quickly as you can. You've got some money, but I need you to build that fully funded emergency fund as soon as you pay off those credit cards. And you can do that all within a few months and then start to cash flow these repairs soon after that. That's what I figured.

I just wanted to get in. I appreciate you taking my call and kind of letting me bounce some ideas off you. Absolutely, Justin. Happy to help. That is what I'm here for. I appreciate that. Open phone lines this hour, 888-825-5225. You heard me mention that episode on the fine print.

We dug into the rat race of credit card rewards in that episode on the fine print. We dug into the rat race of credit card rewards in episode two of the fine print. You can find that wherever you listen to podcasts. And man, it was fascinating. I'll tell you, we go through a journey on that podcast. It's about 30 minutes or less. And it's a great thing to send to your friends, your family who are convinced that they've got to play the credit card reward game. They've got to get their points, got to get the cash back, got to take the free vacations. There's no such thing as a free lunch, man. And these credit card companies are taking you to the cleaners. You don't even know it. Go listen to the fine print wherever you listen to podcasts. This is The Ramsey Show. I'm George Campbell, Ramsey Personality, and you are listening to The Ramsey Show.

Before the break, I was talking about my podcast, The Fine Print, available on the Ramsey Network. And what we do on this podcast is really dig into the hidden truths that are keeping people broke. You see, I have this crazy belief that if you follow the trends, you will fall for the traps. And what I hate seeing is young people, especially in their 20s and 30s, following the trends. Here's what they do. Here's what we teach our kids. Kids, you got to build credit early. That's the way to a solid financial future. So what do you do? You give the kid a credit card at 18 years old and let them take out $200,000 worth of debt before they can take a drink of alcohol. This is America. Wow. Land of the free, home of the broke.

And then we wonder why our kids are graduating, crippled with student loan debt, worried about building their credit score. They can't start families. They can't buy houses. They're frustrated at the boomers and the economy for screwing them over. And I'm sick of it. I think we can live differently, and I have done it. And we recently released this episode, Episode 7 on the fine print, The Dirty Truth Behind Your Credit Score.

And I dig into the myth of the credit score with a scalpel, and the even bigger myth that you can't live without one. And what's the big reasons people say I need a credit score? Well, you need a credit score, a good one, when you want debt. And we teach people that you don't need debt to live your life. And therefore, if you're doing some easy math at home, you realize that if I'm going to be debt-free and live a debt-free lifestyle, then the credit score is irrelevant.

And when I paid off my debt years ago, my credit score became what's called indeterminable. It's not really zero. It's just I become invisible when it comes to my credit history. And guess what? I found out I could still pay for a car in cash. They let you do that. And I could still rent an apartment if I had houses and I asked them, and you'll hear it on the podcast, if I can rent without a credit score. And every single one said, yeah, that's fine. I mean, as long as it's not a terrible credit score that shows you're terrible with money, and as long as you're not a criminal and you have a job, I'd be happy to rent to you. Okay, great. And we talked to a mortgage professional, a mortgage loan expert named Seth, and he walked

me through what's called manual underwriting when getting a mortgage. And this mortgage loan expert named Seth, and he walked me through what's called manual underwriting when getting a mortgage. And this isn't theory. This is a process I actually used to buy my house. Manual underwriting. Because when I went to apply for the mortgage, I didn't have a credit score. And there's a way around that too. You see, back in the olden days, there were no credit scores to determine if you were credit worthy, if you are worthy of taking on this loan. And so banks had to look at your actual life, your financial history, how much money you make, do you pay your bills on time? And that's what this process is. Sometimes you'll hear it called a no score loan. And so that's what I did. It is possible. Renting a car. I've done that as well. We're sitting here in the dollar car rental studio. You can use a debit card when you rent cars. I've done it multiple times, traveled all around the country with no issues.

Getting a hotel room. Same deal. And people tell me, well, George, your insurance rates and all these things and my job checks my credit. What they're checking for is do you have terrible credit? Have you not paid your bills to where we can't trust you with this money? If you have no score, it's a very different situation. So I encourage you guys to go listen to this episode. It's 30 minutes long. It's narrative. It's something different. We've never done anything like this before on the Ramsey Network unless you've listened to Borrowed Future, similar style. We've in and out of experts and real stories

that we find and some fun monologues. So I encourage you to go listen to this to hopefully maybe change your perspective on the idea of the credit score. Good stuff there. We also have a bonus episode in the feed right now, episode eight, Student Loans Are Back, Is the Crisis Worse Than Ever? And we update you guys. If you've listened to Borrowed Future on the Ramsey Network, that was an eight-episode series we did in 2019. This is an update episode two years later. And I dig in with experts. We hear stories. We get updates. And it's a good time. It's about an hour long.

Good stuff in that episode as well. So go check it out. You can go to fineprintpodcast.com or search for The Fine Print wherever you listen to podcasts. Austin is with us in Boise, Idaho. Austin, welcome to The Ramsey Show. Hi, George. How are you? I'm doing great. How are you, man? How can I help? So I'm a junior in high school, and I mow lawns around my neighborhood. And so I've saved up about $27,000.

Whoa! And it's just sitting in my bank account. Dude, way to go! And I don't know what to do with it it because I know I'm going to go to college in a couple of years. And so I'll probably need some of it. But my dad also has a 529 account for me. And he's predicting it'll have about $40,000 to $45,000 in it in a couple of years when I go to college. And I'm also planning on serving a two year mission for my church after my first year of college. And the expenses for that mission are only $400 a month. So I'm

definitely not going to need all of my money. Um, immediately, of course, I'll use it to go to college debt free, but I was just wondering, should I be investing it? Should I have it in just a high-yield savings account like I have, which really isn't that high-yield? In fact, it's very low-yield. Or should I put it in a certificate of deposit? Or is there something I should be doing with my money that I'm not already? Well, first of all, you are crushing it. I mean, many Americans are like, this kid's a junior in high school, and he's doing better than me financially. It's time to make a change. And your dad has got a great head on his shoulders. It's so awesome that he's got that 529 set up for you, and he's throwing money in there.

So yeah, what I would do with that money, you're doing the right thing putting it in a high-yield savings account because this is money that you may need in the next year or two years, right? Yeah. So I wouldn't go investing this into the market right now because you've got a short time horizon where you may need this money. So your A1 is investing in Austin right now, which you're doing a great job of. You're not scared of work. And so you've got this 27K. I want to make sure that you can go to college debt-free. Do you have plans to definitely go to college? Yeah, I do. Where at? Do you have any idea? Well, I was hoping BYU, that's an option, or Montana State, or I could stay close to home and go to Boise State. That's right in the backyard. Love it. So we're talking in-state, affordable schools here. Yeah, Boise State would be in-state, and BYU is pretty cheap. Montana State would be the dream if I could get a scholarship there.

Yeah. I mean, I think at this point, apply for all the scholarships you can, but be ready to pay for it in cash and choose the most affordable option. Make sure that your education matches your goal. Do you know what you want to study? Some kind of engineering. I think I'd like mechanical engineering. It sounds cool, but no, I'm not completely sure. Fantastic. We'll start to dig into that and see what it's like. Maybe you shadow a mechanical engineer for a day and go,

wow, I love this. Or, oh my gosh, I can't imagine having to do this every day. So you've got time to figure that out and you've got a nice pile of money between the 529 and your money here i'm i'm counting up um 72 000 that you guys have right now that you could use towards your education i know you said you've got that mission piece that you want to do for two years and that's about five grand a year give or take uh which you're obviously going to cash flow so uh how you use the money i think we're going to use that towards college. And if we're not sure yet, I would still park it in that high yield savings account, keep throwing money in that 529 through your dad. That's awesome. And then once you get through college, we can see

what's left over. You might need it all. Or you might have 20 grand left over, and then you can use that towards your emergency fund. You can use that to start investing. Use that as a down payment on your first house, all kinds of life goals. But I would not put it in anything riskier than a high-yield savings account right now. I know it's sad. You're like, it's growing at 5.5%. This sucks. That's okay. The best thing you can do is keep investing in Austin.

Keep growing that savings that you have right now. It's so awesome. You get the side hustle, and it's crushing, man. Way to go. Happy to hear it. Thanks. Keep us posted on the journey, man. Did you hear that, America?

A junior in high school has a higher net worth than most of you. I'm not here to shame you, but I am here to tell you that we could do better and that there is hope in the next generation. Don't tell me that Gen Z sucks. Austin's crushing it. This kid's a unicorn. We all should aspire to be like this guy. So much good stuff happening there. Happy to hear Austin's story. I want more of that in 2022. I'm here for it. This is The Ramsey Show. Our scripture of the day comes from Proverbs 16, 16. How much better to get wisdom than gold? To get insight rather than silver.

Oscar Wilde said, nowadays people know the price of everything and the value of nothing. Good stuff there. Our question of the day comes from Blinds.com. Blinds.com 100% satisfaction guarantee means even if you mismeasure or pick the wrong color, they'll remake your blinds for free. I like that. You get free samples, free shipping, and with the new promos they run every month, you'll save even more.

You can use promo code Ramsey to get the best deal. Rules and restrictions apply. Today's question comes from Josh in Idaho. As we're getting close to the end of the year, I'm planning ahead to make sure I have everything I need to fill out my tax returns. I usually do them myself, but I started my own business in January, so it's not going to be a simple return this time around. Should I try to do it myself, or would it be better to use one of the online services like TurboTax? Great question, Josh. Now, I'm a fan of doing your taxes online if you've got a simple situation. I am not a fan of TurboTax. And the reason you can find out in episode one of the Fine Print podcast, me and Dave

Ramsey, we dug into their shareholder presentation, and TurboTax is taking a big turn. They are turning into basically a big financial company, one of the biggest lenders in the world, and so their job is to use TurboTax as a front door and then use all of your information to then sell you debt down the line. And that's aside from a lot of horror stories I've heard with customer service issues and TurboTax doing some things wrong and the IRS is involved. So for those reasons and the fact that you own a business now, things are a lot more complicated. And so absolutely, I am using a tax pro. And lucky for you, we've got some great pros that we trust all around the country to help you with all of your tax needs. They are called endorsed local providers. And if you jump onto ramseysolutions.com, click on trusted pros, click on taxes, we can connect you with one of these tax pros in your area who can help you do

things the Ramsey way. They have a heart of a teacher and they're going to help you make sure that you don't get screwed. You don't fill out the wrong box. You're saving all the money you can, not giving too much to Uncle Sam, all of that good stuff. And they are Ramsey trusted. We trust them to help our fans out. Appreciate the question. All right, let's go to Daniel in Kansas City, Missouri. Daniel, welcome to the Ramsey Show. George, what is up, dude? How's it going? Oh, it's going great. This has been a fun show so far. Happy to talk with you. How can I help? Nice. So my question is about the emergency fund.

I have a small amount saved. It's only about $2,700. But the unique thing is that represents about four months for me because I'm pretty good at living frugally. Wow. The unique thing, though, is that I've had, like, a couple emergencies just this year, and I've built it back up time and time again. But, like, earlier this year in May, I had about $8,000 saved in my emergency fund,

and a lady hit me and didn't have insurance. So I had to spend my emergency fund to buy a new car in cash. Are you okay? Yeah, I'm okay. I was delivering pizza, and she just hit me from the side. I had to spend the money on a new car, so I bought it cash and didn't borrow any money. But it's tricky to know exactly how much to save because that could happen again, and it might be more than my six months expenses to buy a new

car. What do you recommend for that situation? Well, it's a great question. I don't want you to live in fear and paranoia here. Most people are going to have insurance. And so you ran into a tricky situation and I'm guessing that you did not have uninsured motorist coverage on your policy. That was the thing is that I had uninsured motorists, but for my state at the time, it only covers medical damages and not vehicle damages. Interesting. Yeah, I might jump on and see if there's a different policy that would cover something like that in the future. I don't know what company you have. You can jump on to ramseysolutions.com,

click on Trusted Pros, and we have property and casualty insurance pros that can help you with things like auto insurance, and they can see in your state, are there policies that would cover something like that in the future if that's a fear of yours? Obviously, it's warranted because of what you went through. As far as the emergency fund goes, if I'm you, there's nothing wrong with having six months of savings there. What would that be for you? So that would be about $3,800.

Okay. I mean, are you in a good spot, debt-free, obviously? Yeah, yeah. So I'm debt-free. I'm investing 15%. I do 6% up to the match of my 401K. I put the remainder in the Roth. I have a couple of

taxable investing accounts. I have huge EMAs from my niece and nephew. Dude, you are crushing it. How old are you? I'm 24. Oh my gosh. I just dropped my pen. When did you find out about this stuff? The Ramsey plan? Yeah. Well, it was, um, curriculum in my high school. And then, um, I grew up in first assembly of God. So it was, it was in there too. And I was new that debt was dumb, but, um, I used to work at an outdoor store, like a camping store. And they said, Oh, if you get

this new credit card, then we'll give you a hundred dollar gift card. And I was like, you know, I'll just pay it off. Um, but I, I didn't. And so I got a little bit of debt, went on a mission trip, came back, and decided to pay off the debt and start the Ramsey plan. That was March of 2020. Wow. Did the Lord convict you on this mission trip and was like, bro, you got to be debt free? Yes, he definitely did. Look at that. What a beautiful story. That's awesome. Well, yeah, man, I would lean towards six months if I'm you, and my guess is your expenses are going to increase over time,

so you need to increase your emergency fund over time. I would not live in fear over the car issue, but you can beef it up to six months. Call at $5,000, and you'll be able to buy an upgrading car over time as you save, and you'll be just fine. Thanks for the call, man. Quentin joins us in San Antonio, Texas. Quinton, welcome to the Ramsey Show. Hey, thank you for having me today.

Yeah, how can I help? So, I'm 21 years old. I've got a small family. I'm about to get married. I've got a two-year-old son who's about to be two next week, and I don't want to rent the rest of my life. I'm just trying to figure out what steps do I need to take to save up and eventually buy a house in the next two to three years. Okay. What's your household income? Right now for us, we are probably lower 50s altogether. I am about to start. I'm looking into being a police officer over in San Antonio,

so I know my income would definitely jump up from that. But, yeah, right now about lower to mid-50s. Okay. Well, it's a simple math equation, and we've got a great mortgage calculator over at RamseySolutions.com. You can click on free tools there and jump on there. But what it comes down to is not being house poor. So I know you don't want to rent forever, but I also don't want you to be house poor and have this mortgage payment taken over your life as you try to start off this marriage with a two-year-old. And so what I would do if I were you is start

looking at what houses cost in the area and then set a goal and say, all right, the house is $300,000. And if we're going to have this mortgage payment be under 25% of our take-home pay on a 15-year fixed rate mortgage, here's how much we would need to save for the down payment. And so then you know your down payment goal. Now we have a very tactical goal. We want to save $60,000 in three years. That's $20,000 a year. How are we going to do that? Well, it might mean taking on a side job. It might mean getting a new job and getting some extra income coming in. And so you guys need to decide what that looks like for you, but it might also mean you need to adjust your expectations and your time horizon and go, all right, the houses that we want is $350,000. Are we willing to not get that house right now and get a $200,000 condo? Or are we okay waiting five years and getting that house so that it's uh inside of those parameters does that make sense yeah that makes a lot of sense yeah so i'm i'm rooting for you man congrats on the marriage and everything you've got going on and i know man renting

you're just like man i'm throwing money away no you're not you're buying time you're buying patience that's what it comes down to and if you want to listen to one of the episodes on the fine print we did on this is now the worst time to buy a house. We dig into the housing gold rush and everything going on with that crisis. And I think it's going to give you a lot of hope. Rachel Cruz will walk you through the green lights as to when you're ready to buy a house. We talked to Brian Buffini, real estate industry analyst. We talked to a guy who foreclosed back in 2008 because he jumped in because he was like you. I don't want to waste money on rent. Guys, it's been a fun show.

Solo, for the first time, we did it. No incidents, no accidents. My thanks to Ben Hill, our producer, associate producer and phone screener Kelly Daniel, the guys in the video booth, Zach and Nathan, our marketer, Alicia Mackey, just everyone has been just a joy to work with, And you, America, thank you so much for listening. It's been an absolute blast to be your host today. Until next time, spend wisely, save intentionally, and give generously. This has been The Ramsey Show. Hey guys, this is James, senior producer for The Ramsey Show.

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