The Ramsey Show - App - Say No to the Little Things so You Can Hit a Big Goal (Hour 2)

Episode Date: November 24, 2020

Relationships, Home Selling, Debt, Retirement, Home Buying Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/31ricKt  Tools to get you started:  Debt Calculator: https://bit.ly/2QIoSPV Insurance Coverage Checkup: https://bit.ly/2BrqEuo Complete Guide to Budgeting: https://bit.ly/2QEyonc Check out more Ramsey Network podcasts: https://bit.ly/2JgzaQR

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call. Anthony O'Neill is my co-host today here on the air, Ramsey personality, author of the number one best-selling book, Debt-Free Degree.

We're taking your calls at 888-825-5225. That's 888-825-5225. Jack is in Miami. Hi, Jack. Welcome to The Dave Ramsey Show. Jack is in Miami. Hi, Jack. Welcome to the Dave Ramsey Show. Thank you, Dave. Hi, Dave and Anthony. First, I want to thank you for giving me the tools to get out of debt back in 2008.

I'm wondering if you can help me with my current situation. I currently support my 65-year-old legally blind mother. I help her with her rent and other expenses. And this is going on for almost five years or more. I'm honored on helping her financially, but I feel like it's holding me back on my financial future. I currently have some family who can help or I think that they can help. My brother is living a non-financially responsible life. And he offered an empty offer to help her, give her a room in his house.

I'm wondering what I can do to help my mother to get more income or get my brother to help out. I'm wondering what you could do if you were in my shoes. Wow. Wow. How many siblings do you have that can help out with your mom, Jack? I have two siblings. One of them, I think they can help out. He has a family.

He has two kids, but he's earning good income. Cool. Great. One of the things I would say is I wouldn't assume what I would do is just maybe jump on a phone call or maybe invite them all over dinner and just say, Hey, listen, this is where mom is.

What can we do as a family to help mom? And just have the conversation from there. I don't have, you know, sickness within my parents, but every year my siblings and I sit down and say, okay, hey, listen, if something was to happen to mom and dad, here's what we can do. Here's what Anthony can do. And so we have that conversation. So I'd be one of the first steps is to see exactly what all you all can do i'm curious jack for five years you've been paying her bills and um and and it never came

up in conversation with your brothers and sisters that you're the only one supporting them it sounds like and then you're asking how to talk to them about it in most families that are moderately functional yeah you would have just said hey dude i'm paying all mom's bills right jump in here and help me right so that came about and that's when the offer of an empty room of a room in his house came along but it's not possible with my mother and my sister-in-law and his current family situation yeah so obviously that won't work because mom doesn't want to live there. But what we do need is money, yes. Yep. And if you said that to these siblings of yours, what would they say back? They said that I should give them a couple of months, some time to gather the resources.

But it's been over two years since we have that conversation well then yeah i touch base with them but they don't um take the money out of the pocket yeah well i mean listen you can't make them do it all right all you can do is say listen i'm doing i'm taking care of this it's not fair that i'm taking care of this by myself and you guys really need to start sending a couple hundred bucks you need to start sending something you need to start it this month absolutely um or you need to start it in june or you need to start it in march but when you say you're going to start it you don't kick the can down the road you need to start it and and if you don't then i'm just going to look at you cross-eyed because you're just not taking care

of your part of this and you know it's just a it's just a car you don't have to be mean about it but um i i think they think they i think they think that you're going to continue to do this no matter what, which is true. And they're they're just not they don't have any pressure. And and I don't know that you putting pressure on them is going to make them do it. But all you can do is just bring it up more often and more directly. And then at some point you give up and drop it and forget it. Well, yeah, you're right, Dave. Because, I mean, if you went three years without saying something, you've put them in a comfortable position with him. So, I mean, I agree, man. But I would bring it up. I would even shatter that line a little bit. That's fence.

Like, be firm, be aggressive, but still be respectful. Like, hey, I need your help. But Jack, this is like a business transaction where, um, I have people sometimes go, uh, well, this guy, he's a crook. I knew he was a crook. That's why I had a contract. And, and now he's being a crook, but, and he won't keep, he won't keep the contract. And I'm going, well, contracts don't make crooks not be crooks. If you knew he was a crook, a contract's not a magical wand. It's a piece of paper where we agree, but it's of no value if you're not dealing with people with integrity.

The conversation here is the same exact way. It's not that your siblings are crooks. That's not what I'm saying. But, you know, you having a conversation with them or what they ought to do is the right thing doesn't mean they're going to do it. And so far, they've demonstrated they're not going to do it yeah so i've got fairly low expectations that a couple of conversations of any kind are going to cause these people to start writing checks because if they were the kind of people they're going to write checks they would already be freaking writing checks yep like you you're the kind of guy that

writes checks and helps mom they're not and they know this is going on it's not a unfound thing you know now if if uh my you know my wife has uh five brothers and sisters and uh one brother lives next door to her dad and therefore ends up doing a lot of the work and taking care of his dad's needs and so forth but we've told him 20 times if you need anything you're the guy on the front lines here just let us know there you go and if he calls up and says we need something we're gonna do it if we can if it's anything we can reasonably do absolutely and uh because he's he's the guy on the front lines but if he doesn't call up how do i know i don't know so but if you know so the point is you put the ball on their side of the net they may hit it back they may not

i'm gonna guess they whiff yeah'm going to guess they whiff. Yeah. I'm going to guess they whiff. I think that's what's going to happen with this bunch. Our question of the day comes from blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they're going to remake your window blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more.

The promo code is RAMSEY. So what we're going to do is we're going to hold the question until after the break, because I just looked up and realized I've got 30 seconds. 30 seconds. For you to read this and then answer the question instantaneously. So we're going to do the blinds.com question right after the break. And so now you're going to be in suspense, because you're going to want to know what Sarah in Kentucky needs to know.

So you'll be sitting in your car, waiting on the blinds.com question right after this break. And it's a real good question. So y'all definitely want to make sure you come back for this one. You don't want to miss this one. No. It's the best one of the year. The radio host is apparently mailing it in because he set this thing up before not looking at the clock. So we'll try to take care of business here a little bit better.

But anyway, we'll come back from the break. We'll do the Blinds.com question that you guys are dying to hear at this point. Anthony O'Neill will be reading it. The Blinds.com question will be voiced by Anthony O'Neill. This is the Dave Ramsey Show. I get the privilege every day to talk to smart, creative entrepreneurs doing great things for our economy. GRIP6 is no exception. BJ and the great team at GRIP6 know how to truly create smart products that are unique and makes everyone's life a little

easier. That's why I'm so excited to announce to you that GRIP6 is expanding their innovative product line. You heard me. Along with their no holes and no flap and no bulk belt buckles, they are adding an aluminum wallet engineered to be the quickest and most intuitive way to access your cards and everyday wear Merino wool socks. The socks come in ankles and crew with wool sourced right here in the USA. And all of Grip6 products are guaranteed for life. Folks, GRIP6 is rebuilding and modernizing American manufacturing with products sourced in the U.S. Give these products as gifts this season. To get the Dave Ramsey special,host today the blinds.com question of the day i always remind you they have a 100 satisfaction guarantee that means even if you mismeasure you

pick the wrong color they'll remake your window blinds for free our question comes from sarah kentucky and like i promised you all, this is a real good one. She says, when my husband and I got engaged, he got a statement in the mail stating that he had $180,000 in student loan debt. He was completely unaware of the amount of debt he had in his name. He got his teaching degree on a 50% baseball scholarship. Our whole married lives, his parent promised us that they will pay off the loans and they will never, ever be our responsibility. Now, with their desire to retire soon, this is where it gets good. Their tune is starting to change. My husband and I are on baby step number two and are on track to be debt free by December

2021. So Dave, my question is, do we continue to focus on our debt and progress through the baby steps or do we take on these other loans as well? How do you suggest we proceed? Well, I'm like down the middle here. I think there's a serious conversation that needs to be had here with the parents. But then on the flip side, it's also if you and your husband are in a financial position to at least help your parents. I think you should. If this was me, I'm talking to mom. I'm talking to dad saying, hey, I get it. You want to retire soon.

But you told us that we're not responsible for it but i still do have some some point of obligation to it because it is my education that um it is costing this much but i will really have a conversation with my parents because you could have told us a while ago and it would not be 180 000 today sarah i'm calling bullcrap. Uh-oh. Your husband gets a thing in the mail right after you're engaged saying he has a $180,000 student loan in his name, which means he signed the freaking papers, and he had no idea. Bullcrap. Uh-oh. Of course he knew.

Of course he knew. He's freaking lying. Or he's the biggest space cadet on the planet how do you go 200 grand in debt and go oops i didn't know i had no idea i was playing baseball come on seriously unbelievable now that his mom and dad promised to pay it so he didn't pay attention well that's fairly likely yeah but if he's gonna play the dumb jock card i'm calling bull wow i mean he knew what was going on here yeah you got a good point dave and so here's the deal uh you just got engaged and as the new daughter-in-law you walk in there with muddy boots in their kitchen and you start throwing your weight around demanding they keep their word that's not going to go over not at all so your husband

who apparently has no idea what's going on here needs to step up and deal with his parents he has a hundred eighty thousand dollar loan in his name you married him you have a hundred eighty thousand dollars in debt yep and that's the legal facts if mom and dad choose to keep their word and help that is wonderful but you have 180,000 in debt you married a guy that had 180,000 in debt you guys knew this you're going to end up paying it if they don't because it's legally your obligation and he knew this was going on yeah bull I told you this was going to be good. I was trying to be the nice guy. I mean, if it's $18,000 in debt and he thought he was on a baseball scholarship and he signed a couple pieces of paper not half watching when he was an 18-year-old kid, I'll believe that.

But $180,000? You don't accidentally fall into that and go, I have no idea. That's just bull. And I would love to know, where did he go to school to where 50% is a 180 grand? Yeah. That's a lot of money. Yeah. I mean.

It's probably about 120, because that's probably including the interest and stuff. Well, I don't know how long, I don't know how old, how many people have been married. I don't know how old they are. Barbara's in Long Beach. Hey, Barbara, welcome to the Dave Ramsey Show. Hey, Dave and Anthony. Thanks for taking my call. I'm so excited to get your advice.

Well, give it a shot. I'm a longtime listener, and thanks to you, I became debt-free in January of 2020. So I'm thrilled to death to be there. I'm going to be retiring from teaching in la next summer and i'm going to move to virginia where my son and his wife live right now i'm renting a room so i can save money for retirement because i had literally no money for retirement before i was debt free wow good for you thank you it's it's all thanks to you and your folks well i didn't do it you did it I'm proud of you.

Well, thank you. So the question I'm asking is my son plans to move to North Carolina in a couple of years, and I'm going to be moving near them. So the first move is to Virginia, and then their plans are to go to North Carolina. So my question is, should I continue renting in Virginia for the couple years if they decide to move and when they move? I have a very small pension and less than $100,000 in pre-tax savings. So I'm pretty limited. But I could take some of that pre-tax money and put down 20% on like a townhouse or a condo and then either rent it out when they move or sell it. So I'm debating if it's like, say, three years, should I continue renting or should I take some of that pre-tax money and then purchase something and then either hope it gets more value so I can sell it without taking a loss or renting it?

Well, we're not going to hope. We're going to do a little bit of research. Yeah. Okay. So if you think you're going to be there two years or three years, you're right on the bubble as to whether this is going to work or not. You do not want to keep the property when you leave. No.

You do want to sell it when you leave. Okay. So knowing that we're going into a situation with a fairly short-term ownership, the only way this will work is if the market in the area that you buy the condo is white hot and you get the statistics from your real estate agent go to DaveRamsey.com hit the ELP for real estate in the area and say I'm looking at a condo I got one already okay ask them to send you some statistics here's the two numbers you want okay in the last five years what has been the average annual appreciation rate of condos like this one okay like the one you're looking at or the area that you're looking at or whatever

and what is the average days on the market we call it dom days on the market of homes in that area okay they usually are going to correlate meaning that if you have a low appreciation rate you're going to have a long days on the market because the market's slow it's not going up and it's hard to sell it right right so you might see a two percent appreciation rate and a 270 days on the market. That's nine months. You do not buy that condo. You rent in that one. Okay.

Because you're going to get stuck with it. Right. Okay. Now, if the condo instead says an 8% appreciation rate and a 27 days on the market average, now that's one you can get rid of, and it's going to go up 8% a year for three years or two years, which is going to be enough to cover your expenses. You're not going to make a ton on it, but you're going to make a little bit. And if they decide not to leave, you already own it.

Yep. So that's what you're looking for, something where the numbers tell you, not I hope, but the numbers tell you that there's a real high likelihood I'm going to be able to get out of this thing when they move to North Carolina and I'm not going to lose anything. I'm going to make a little bit, and it's going to be easy to sell. Excellent. And then I'll have to use my realtor for that.

And I've got one ready to go. Yeah, they can pull that off their MLS statistics. It takes them five minutes to pull up off their MLS statistics. It takes them five minutes to pull up what I'm talking about. They just do a quick ring study on the area. It's not hard at all. But what you're trying to ascertain here is can I get out of this without losing money? And Dave, I like how you said do the research first because how often do we see people just jump into something and then they're stuck in it because oh it's a great deal jumped in now it really wasn't a great deal because they can't get out of it yeah well and you know we talk to military families a lot and they're they're you

know they're they're at a location for a year two years to three years and and then they move we're talking to a guy from san antonio out here i was asking him a while ago, I said, where do you live? San Antonio now. For right now. Oh, you're military. Oh yeah. That means I'm going to be moving on, you know, and thank you for your service, sir. And so on, you know, that's, uh, um, but you know, you don't want to buy if you're going to be somewhere two years in most cases, unless you have a white hot market that you can step into. This is The Dave Ramsey Solutions on the debt-free stage is Eric and Bonnie, which can only mean one thing, that they the debt-free stage is Eric and Bonnie, which can only mean one thing, that they're debt-free. Congratulations, guys.

Thanks. Anthony, hey, guys. Hey. Very cool. How much have you guys paid off? We have paid off $189,000. Woo. Yeah. How long did this take?

Six years, 11 months. Wow. And your range of income during that time? We started out at $77,000, and then we dual income and went down to about $65,000 to $70,000 for five years with Bonnie coming home. And then we're back up to around $100,000 dual income. Wow. Excellent. What do you guys do for a living? I'm in purchasing. And I'm a part-time first-grade teacher.

Awesome. Very cool. That's about as good as it gets. So where do you guys live? We live in Belton, Texas. Okay. Which is near what? It's like an hour north of Austin. Oh, okay. Very cool. Well, welcome to Nashville and congratulations. So six years, 11 months, 189,000 in Belton, Texas. I'm guessing you paid off your house. We did. I'm looking at where people yes that's a beautiful debt free completely debt free how awesome is that we had a thousand dollars left on a car right when we started but the rest was the house wow yeah pretty cool why like why why pay off the house what was the what's the story here well where it really began began was with our firstborn seven years ago. I kind of had my nesting moment was looking at the budget that we didn't have and realizing how tight it was. We still had the car payment. We were looking at daycare and kind of realizing how tight it actually was. And so paying off the house wasn't the initial goal. The initial hope

and goal was to find a way for Bonnie to come home. We wanted to have two or three kids at the time. And after we did the first zero-based budget for the first month or two, we saw in the numbers that we really wouldn't be able to do that. So the first dream was really for me to change my job. And so because of you, Dave, because of your team, and really looking at those real numbers, we realized we needed to make that change first. But then over the years, we just kind of had that goal of like, well, what if we did the house too? What if we kept, you know, going and paying off the house?

So he kept saying we wanted to do the house. And I was like, oh, okay, maybe, maybe. Like, let's just keep doing what we're doing. And then it just kept going. And then it happened. And it was, it's just kind of amazing. Yeah. That is so fun.

What's this house worth? About $300. Wow. And it's yours. It's ours. The grass feels good. It does. It does.

I've done detailed research. 100% of the foreclosures occur on a home with a mortgage, and you're not up for that. Well done. You know, I love this story because you were making $65,000, paid off your home, and I hear a lot of people saying, I only make $50,000, $60,000. How do I get out of debt? Like, what were some of the key things that helped you all do that when, you know, throughout this whole process,

you weren't making six figures until recently. So what's the secret? Well, for me, the boring answer is, of course, the budget. It's truly paramount. He's the nerd. Yeah. And we really realize that people think maybe one month to the next month, they're not going to get too far off track. But you get used to whatever you're doing at the time. And so if you stack three or four months together, you go from eating out like maybe $75 a month to $250 a month. But it's happened over six months and you don't realize that slide.

So having that monthly, we sit down, the budget has to go to zero and we figure out where we're going. It really kept us going on our goals. But actually, so Bonnie's the spender, but she loved the AM schedule. Let me tell you. I did. That was kind of how we dreamed. We would kind of say, well, hey, what if we put an extra $5,000 on the house?

What would that do? And it literally, it turns it into a time machine. As you see those, that would take six months away. Like you get six months of your life back. Wow. So those were some of the really fun when you would get like a three paycheck month or a bonus or those kinds of things that helped us to visualize and see the value in putting that money there instead of to a car or vacation or something like that. Yeah. And I think as the, I was a stay at home mom for all these years until just now when I went back part time and being able to make those daily decisions of I'm not

going to get that expensive coffee or sure. I'll take hand-me-down kids clothes from a friend. Like making those daily little decisions helped us towards this goal. Yeah. Saying no to the little things so that we could hit this big goal was huge. We call it excellence in the ordinary. Yes. The ordinary day-to-day things, when you're excellent in those, you win death by a thousand cuts.

That's right. That's how you win. You don't win with one big machete chop. Yeah. Most don't so that that's well done you guys but the reason we're we're here is because you gave us the b-hag dave it's really because of you and so we wanted to come here to say thank you to you and your team i've listened to you most mornings for like the last five years on my way to work wow and. And, uh, and anybody else on the radio who is still working on it, keep going, keep going. Your time's coming. Six years, 11 months. Yes. So what, what enabled you to have that kind of perseverance over that period of

time? Was it just watching that M schedule go down? I mean, what was it? I mean, honestly, life has been good. Like we haven't suffered for the last seven years. Life has been awesome. We have three beautiful kiddos. We started at the very beginning with the first. So I remember our first budget meeting. Our oldest was literally a month old. And I remember, like, bouncing him in the kitchen, like, near the kitchen table while Eric did a, you know, paper and pen and thinking, like, what in the world are we doing? And now to look at our oldest and see how big he is and that we've been doing it for all these

years. Um, it's just become a part of our routine, um, through the months that we don't want me as the free spirit doesn't want to do the budget meeting, um, just continually pushing through that. Um, and now it's just a part of our rhythm. And if there's a month that maybe we're like a week late into the month and we haven't had time to do our meeting, like we start to feel a little, a little off because we haven't set, we haven't set our, our, our budget yet. So it's just become a, become a part of our rhythm, which is just a joy. Very cool. You guys, well done. Well done. We're proud of you. Wow. Thanks, Dave. We're proud of you. Wow. Very good. So absolutely fabulous. We got a copy of Chris Hogan's book for you, Everyday Millionaires.

Thank you. That is, of course, the next chapter in your story. And the three kiddos that have been born while this journey is going on are here to do their debt-free scream with you. What are their names and ages? This is Luke. He's seven. Luke. This is Claire.

She's five. And this is Lily. She's three. Thank you. is Claire. She's five. And this is Lily. She's three. Thank you. Luke's got a busted wing, huh? Yes. All right. Love it.

All right. Good stuff. All right. Here they are. Eric, Bonnie, Luke, Claire, and Lily. $189,000 paid off in six years, 11 months, making $77,200. Count it down. Let's hear a debt-free scream.

Ready, guys? Three, two, one. We're debt-free! Way to go, you guys. Absolutely awesome. Man. Yeah. you guys absolutely awesome man yeah you know if when we tell people they have to live like no one else so that later they can live and give like no one else most people can stick with it for a little while yes a couple months maybe even a year six years and 11 months seven years that's a long time dave but most of you can't even watch a tv show through without changing the channel oh my gosh six years but look at that

though look at that beautiful family this is all occurred occurred from the time that big old Luke was a baby on her shoulder in that first budget meeting. And this is what it physically looks like for a family tree to be changed. You're looking at it. And you know what? One thing I learned from their story, Dave, is especially with her being the spinner, she said, I had to have self-discipline. I had to tell myself, no, I'm not going to do this. I've got to look at it this way. And I always tell people that discipline is the bridge from where you are now to where you want to go.

And so they are here, 100% debt-free, on their own. Now they can really do everything they want to do. And sometimes people go, I'll just white-knuckle my way through discipline. I'll just hold on. I'll just grip my teeth. No, you've got to be, you're not holding on. You're reaching for something. Yes.

Past the pain. No discipline seems pleasant at the time, the Bible says, but it yields a harvest of righteousness. It always costs you to win. It always costs you to win. And it costs you to be mediocre. There's always a price to be paid. And let's call this out, Dave. They were making $65,000.

That's not a whole lot of money. When they started this, that's exactly right. Way to go, you guys. Very well done. That's so powerful. Love it. This is The Dave Ramsey Show. We'll be right back. What's Christmas mean to you? Family, food, gifts, Probably all thinking about gifts, both getting them and giving them. There's always someone on your list who's hard to buy for.

Instead of handing over a random gift card, what if you help them make a real impact in their life? How could you do that? Well, give them a money plan, and the confidence to know their situation right now doesn't have to be their reality moving forward. It's a gift anyone can use this year, and the confidence to know their situation right now doesn't have to be their reality moving forward. It's a gift anyone can use this year, and we've got great options with our Ramsey Plus bundles.

So you get Ramsey Plus, which is the all-access membership that includes Financial Peace University, every dollar, the whole thing, plus money tools, plus the teaching, plus even more content that's customized to where they are right now in their money journey. So shop all the Ramsey Plus bundles, and you can give it as a gift. Check out Ramsey Cash Giveaway, Ramsey Christmas Cash Giveaway for you. No purchase necessary there. We're giving away $500 a week. Don't miss out on that. So go to DaveRamsey.com slash store and check out the Ramsey Plus bundles.

It's the whole package that will help somebody get everything they need to do to get moving. Clark's with us in Phoenix. Hi, Clark. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for having me on. Sure. What's up?

Just a quick question as far as with COVID and the ability to pull out of a 401k. My company that I work for was matching for a while 3% of what I was contributing since I think we're going public or something like that, that they had actually done away with that program. But I was wondering as far as just the no penalty, is it a good idea, me being in my debt snowball to pull out of that um i mean right now it's about 4500 to pull out of there and then just pay off a big chunk of my uh credit card debt and to just steamroll it in a sense yeah no i would not do that. Yeah. And I think it's really dumb that the government did this because now billions and billions of dollars have been pulled out of 401ks and people are destroying their retirement because of stupid but legislation.

So, no, I just because the government allows you to do something stupid don't mean you do it. So it's almost as if they encourage it so that you stay broke. It's just crazy. So no, I would not do that. So how much credit card debt do you have total? About $9,400. And how much other debt do you have other than that? I've got a car loan for about $22,000. And what is your income?

About $52,000, $53,000 52 53 you got a very expensive car dude yeah what kind of car is that it is a um a hyundai elantra sport oh okay how much is it worth uh that's the fun part it's about i think 15 think. Yeah. Well, you're there on that, and you're making 52, and you have $30,000 in debt, give or take. So it's going to take you, if you live on beans and rice, it's going to take you a year and a half. Yeah. Yes. And that's what I would do. I would leave the 401K alone.

I would stop adding to it, though. Yeah. Okay. Yeah. And, Clark, I would leave the 401k alone. I would stop adding to it, though. Yep. Okay. Yep. And, Clark, I'll pick up an extra job. Yeah. Let's do something and get some extra income coming in and accelerate that 18 months down to 12 months. Absolutely.

That's a good idea. Yep. And because income, man, it's a magic wand on getting rid of this debt. It's pretty incredible. And so, yeah, if you could be debt-free six months sooner if you worked a part-time job just for a year yep that's it and i get you something that that is a good part-time job is paying serious bucks and um yeah i would leave we tell folks not to cash out a 401k unless it's to avoid a bankruptcy or a foreclosure jane's in salt lake city hi Hi, Jane. How are you? Hey. Well, you might have just answered my question with the last guy.

What's the question, Jane? Just to make sure. So the question is, so I have zero debt. I'm finalizing a divorce situation, and so me and my three kids are currently renting, which is pretty pricey. We'll be, I'll be getting like a portion of his 401k through like that squadro at the beginning of the year. And so what I'm trying to decide is if it makes sense to just leave that as a retirement for me for the future, or if it makes sense in any way shape or form to use a portion of that as a down payment um on a small home for me and my kids so that i'm not wasting

money in rent yeah you haven't been wasting money in rent for very long yeah no no no and what do you make what's your income so my income i am back at school so my income is probably 70 000 a year but that's just from child support and alimony okay and when you're back at school doing what um so i'm getting ready to apply to the respiratory therapy program. Are you borrowing money for that? No, I have money set aside. We set aside money from like the sale of our home to pay for my school for the next three to five years. I probably have like $30,000 in the bank to pay for my schooling.

Good. Okay. So how quick do you get this degree? Huh? How long? How quickly will you get it? Probably three years from now it would take. Why?

Why does it take three years? Well, I have to apply to the program in the spring, and then it would start in the fall, and then it's a two-year program. Oh. Yeah. Yeah, because I was thinking it was a two-year program. I was trying to figure out why it took you three. Okay, that makes sense. So it took you three. Okay.

That makes sense. So it takes you three from right now because you can't get in until next fall. Correct. And in the interim, is there anything you can do to create income? So the situation with what we decided to do with the divorce is I have a not quite two-year-old at home. So we were weighing the pros and cons of me working with probably a job, be a job that wouldn't generate a lot of money, and that would pretty much just pay for daycare costs. So that's not something that we were really interested in.

There's not a we. You're divorced. Right. Well, I don't want to do it and neither does he we'd rather i'd rather not put my daughter in daycare at this young of an age um i worked for a long time and then the last few years i've been a stay-at-home mom um my older kids are in elementary and junior what did you do when you were working um i was an underwriter for a local credit union okay and you made what oh probably like 18 an hour okay all right so you've got a game plan you're not going into debt i know i would not buy a house until you finish your degree absolutely i would rent something as

cheaply as you possibly can if you're going to buy a little house, well, go rent a little house. Yep. And because right now what you're reaching for is stability in a very unstable, volatile situation where there's been a lot of emotions and a lot of things going on, and you're somehow equating owning a home with stability. It's not necessarily true. So long-term, I do want you to be a home with stability. It's not necessarily true. So long term, I do want you to be a homeowner. Short term, I would be a renter if I were in your shoes. And no, I would not cash

out the 401k to go buy a house under any circumstances. There's not a circumstance I'm going to tell you to do that. Why do we, Dave, why do people feel as if renting is just so horrible? Well, it's been taught to us for decades that renting is throwing money away. And it is throwing money away over the scope of your life. Right. Because someone that you're paying for someone else to own something that goes up in value. And so it's not a good plan long term, but short term when you're in the middle of a transition time, like when you're going to get a new certification to go into a new career after a marriage came apart.

This is a highly volatile transitory time, and you don't need to be buying a house right in the middle of that. Twenty minutes after the divorce papers are cool. You know, it's just that you need to just, it's okay. Rent is patience until you're ready to do it with wisdom. Until you're ready to buy with wisdom. And it is not a waste in that case. It's money well spent in that case.

Yeah, because there's this whole movement of young kids, 20, 21, 22, who just happen to buy a house or townhome and flip it and put 10 people in there. I'm like, what are y'all doing? Yeah. This is not wise. No, it's not wise. It's not wise. Renting, there's nothing wrong with it as long as it's a path to ownership.

There you go. And a path to wise purchases. Yes, sir. This is the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all by saying, Alexa, open the Ramsey network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what

is the debt snowball? Find out more at Dave Ramsey.com slash smart speaker.