The Ramsey Show - App - Should I Buy a House or Keep Renting?

Episode Date: May 23, 2022

George Kamel discusses: How to manage a 529 plan by yourself, Moving up in house after baby comes,  What's the next step after you pay off your debt, Paying off the rental before you pay off your house, How to pay cash for a house, Convincing your spouse to pay off the house.  Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

I'm out. From Ramsey Network, this is The Ramsey Show. We help you get control of your money, get ahead in your career, and get on the path to being well. I'm George Campbell, your host, flying solo today. The number to call is 888-825-5225. It would be my honor and privilege to take your call and help you take the right next step for your life and your money. I host a few shows here on the Ramsey Network. Of course, you're listening to one of them right now. The other ones are the Fine Print and the Entree Leadership Podcast. You can find all of those shows on the Ramsey Network and wherever podcasts are found.

Eric kicks off this hour in Salt Lake City. Eric, welcome to the show. Hey, George. How's it going? Great. How can I help today? Hey, so my wife and I got serious about finances and life about two years ago, and we're currently on baby step six. Let's go.

Awesome. My question for you is, what strategy should we take specifically with investing options in our 529 educational plans for our children? Love it. Love that you're thinking about this stuff. How old are the kids? We have a three-year-old and a six-month-old. Congratulations. Sounds busy. Thank you. Yes, life is great though. So you've got plenty of time for college, so I feel good about the situation, especially since you're in Baby Step 6. So you've already opened to 529? Yeah, they've been open for about two years. One of them has about $1,500. The other one has about $700. Okay. And your question about the

best strategy, what do you mean by that? So we're putting in about $100 each child per month. But where we get confused is, you know, we have the option to invest with the total U.S. stock market. We can invest aggressively or balanced or moderate. Just not sure what options to choose within the platform here. So are you doing this on your own? Yeah, we are. Okay. How did you end up choosing your 529 plan? We live in Utah and we just did the local one. This one is provided by the state. And so we're not working with any company, but we've considered calling, you know, SmartVestor Pro just to see if that's a good idea. But

we did everything else on our own. So that's the route we're currently taking. Okay, cool. Just wanted to see where your options were at because they're state-specific. You can choose any state. And if I'm not mistaken, Utah actually has a great 529 plan. But inside of that, you're saying, what's the best investing strategy? I recommend going with good growth stock mutual funds, which would probably put you in the aggressive category, which I'm okay with because we have plenty of time for this money to grow. Okay. Because what happens is you invest in some conservative investments, and they're leaning towards bonds, and that money is not going to grow at the rate you want it to. Okay.

Yeah, that makes sense, and that stays in line with your other advice on 401k investing and things like that. I would invest the exact same way inside of that 529 plan. Okay. So find some good growth stock mutual fund options in there that have a proven track record, and there should be plenty of options in there, hopefully. If not, you may want to look into other state-specific plans. But I think that one should have plenty of options that will help that money grow at a healthier pace.

Okay. Yeah, last time we checked, there were a plethora of options. So we'll take a look there. And if we do get confused again, I guess we'll call it a smart investor pro. Absolutely. They can definitely help, but good for you, man. I love that you guys are in baby step six, found out about this plan two years ago and jumped into it full throttle and you're investing for your kid's future. And at three years old and six months old, they're going to go to college debt-free because of the work that you guys have put in. So really proud of you. Thanks for the call. Nathan joins us up next in Cincinnati. Nathan, welcome to The Ramsey Show.

Hey, how's it going? Great. How are you? Doing well. What's your question? So long story short, my wife and I are debt-free. Both of us have associate's degrees. We're currently renting. We're expecting our first daughter next month. Congrats.

Thank you. We're so excited. I guess at this point, we're looking into potentially getting home, but obviously the market right now is not very buyer-friendly, to say the least. Agree to agree. Yeah, so right now we have about $15,000 saved up, and we're kind of at a place right now where I make about $43,000 a year. My wife makes about $28,000.

And once the baby comes, we're hoping to have her. We've been able to save her income completely away since she started working. But once the baby gets here, we'll probably have her go to either part-time or just stay at home completely as a stay-at-home mom. So we'd just be living off of my income alone. Does that make you nervous? Do you feel good about that? We are at a place right now where we can afford that. I mean, we try to live pretty modestly.

But if we were to, I guess, getting to the point of all of this is we're looking at potentially getting into a home, but if we were to buy into the housing market right now, we'd probably be looking at at least an $1,100 monthly mortgage. Yeah. And so that would— What's your take-home pay with that, just yours? Just mine. Like I said, it's about $43,000 annually.

After tithes and everything, I come back with roughly $2,400 a month. Yeah. What's your rent right now? With utilities and everything, we're right at $950 or between $950 and $100,000 a month. Okay. And you're wondering, should we buy right now? Yes. So we have that money, and so I'm not sure if we should buy right now. So $15,000 would include our emergency fund as well.

So that's all the money you have is $15,000? Not including our checking. That's just packed away in savings, but yeah. Well, it sounds like that's your emergency fund, and so we're not going to touch that. We're going to start a new fund for our down payment. So that would be my next goal for you guys is Baby Step 3B, where we start saving up for the down payment.

And a lot of people tend to pause investing in order to save this up. If it's going to take longer than three years, you probably want to start investing at that point. How old are you two? I'm 25. My wife is 26. Okay, good. We have time on our side. I like that. So my job for you is to increase your income so that you can still hit these goals, so that you're not waiting 12 years to save up a down payment because it's going to be tight. It's going to take a little bit of sacrifice. If you can't get your income up immediately, I might go take some side hustles.

Maybe she's not able to stay home full time right now. So I'd look into what those options look like, map it all out, get a plan to get there, get on the same page, and over time, get the income up, save up the down payment, and then start investing. That would be my goal for you, Nathan. Congrats on the daughter. I'm going to gift you guys Ramsey Plus. Hang on the line. Go through that with your wife. Get excited about this child. Start budgeting for it. That'll give you a plan to do it. Ramsey Plus, including Financial Peace University and EveryDollar. Hang on the line. Austin will pick up and get that to you. This is The Ramsey Show. Building wealth is a hot topic right now. There's all kinds of opinions on how to do it.

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That's ramseysolutions.com slash events. Open phones this hour. The number to call is 888-825-5225. Kevin joins from my old hometown, Boston, Massachusetts. Kevin, welcome to the show. What's going on, George? How are you doing? Good. I'm really hoping you have a thick Boston accent.

I don't. That's just where I'm actually. I live in Rhode Island. Disappointing. It's all good. I'm a big fan of Rhode Island, too. How can I help today? Right, right.

So I'm just curious. At the end of the month, I'm going to be completely debt-free for once. Yeah. So I'm just kind of looking for advice on the next step in a sense where, you know, I'm renting right now. Is it smart just to keep holding off for a good 25% down payment for a multifamily or single family? Or, you know, do you invest in stocks?

You know, I just, I'm a little, it's kind of funny to my realtor also, but, you know, I'm just, I don't know all the answers. So I'm just looking for a little guidance. Hey, that's all right. That's awesome. Thank you for reaching out. So you're about to pay off all of your debt and you're wondering what is next. What's your income? Yeah. My GCI last year was $123,000. So I netted about $90,000. Okay. Awesome. Well, the floor expenses, of course.

Now, how much money do you have in the bank in savings? Do you have anything? In the bank altogether, after the payoff, I'll have close to $20,000. $20,000? So what's holding you back from just paying off your debt? How much is there left? It's close to $20,000. $20,000. So what's holding you back from just paying off your debt? How much is there left? It's only just $8,000. I guess I could essentially just pay it off. I just wanted that one last transaction to close at the end of the month, which I got CTC for. So I just was like, all right, I'll pull the trigger.

Hey man, if I'm in your shoes and you want to follow our plan, that debt is gone today. You got $20,000. You're going to pay that $8,000 off. That still leaves you with $12,000, which is a head start on Baby Step 3, which is your fully funded emergency fund. So what amount would that be to have three to six months of expenses? Three to six. I mean, I guess that would be about $15,000. Okay. Which means you're probably, what, a month away from having a fully funded emergency fund and no debt.

Yeah, absolutely. By the end of June, I'll be very content, I guess you could say. So you're not content right now? Well, you know, I guess I'm never content, but, you know, it's a different subject. Well, I want contentment for you. It's okay to have drive. You can have both. But if you're following our plan, that's what you would do. You pay off all the debt. You have the money to do it. And then your

next step would be Baby Step 3, which is your fully funded emergency fund. So if you're telling me that's 15K, you'll have another 3K to go to get to that number beyond Baby Step 3. So let's say a month from now, you're there. You've got 15K in the bank. You don't have a payment in the world. You've got a great income. Then we're going to begin Baby Step 3B. You're telling me you want to buy a place for yourself. Yeah, and that's another thing, too. I don't really see the benefit of getting a single family right now, because I don't have any kids.

Could you get a condo or townhouse? I'm not really a fan of condo, if I'm being honest. I don't really like the HOA fees. I don't like someone telling me what to do with my house. Well, you told me you're maybe looking at multifamily. Yeah, exactly. Owning that. But then the landlord lives right above me,

which means I can knock on his door at all hours of the night when the HVAC goes out. I know. So that's what I was thinking about. I was saving for another investment property? But like, you know, I heard an episode of Dave Ramsey today, I believe, where you should have your... Kevin, here's what I would do if I'm in your shoes. I'm saving up to get myself a home. I don't know what that looks like for you. I'm okay with condos and apartments. If you want to get a single family home that's still smaller and reasonable, and you can do that

with 10, 20% down, that would be my next step. Now, some people like to invest. They want to put that 15% into investments depending on your age. You may want to begin to do that while you save up for the down payment and then hustle to get that income up. So that's what I'm doing in your shoes, but I wouldn't go for the multifamily as your first property because it sounds like a lot of headache. But I appreciate the call, man. Thank you so much. All right. If you don't know about the fine print, let me tell you about it. This is a podcast we did back in the fall, and we did 11 episodes in the first season. And here's the heart behind the fine print.

It's all about the hidden truths that are keeping you broke. And as I looked around, and as I've been here for nine years, there are way more traps than there are successful paths. The path to success is it's very narrow, and not a lot of people take it. A lot of people are falling for the traps out there. So we went through multiple topics, and this is a narrative style podcast. If you're a fan of NPR's podcast or anything like that, these are about half hour, very educational. They're fun. They have different experts and personal stories. And I try to weave it all together masterfully. And so we did Turbo

Tax. We covered the true cost of credit card rewards. We covered how to bulletproof your money for the next pandemic. We covered buy now, pay later with these companies like Afterpay and Klar all the talk of cryptocurrency. We covered the dirty truth behind your credit score. Goodness gracious, there's a lot to unpack about credit scores. We also hit the student loan crisis, and we asked the question, is it worse than ever? You don't want to know the answer, but you may want to listen. We also covered bankruptcy, and if it's a quick fix for struggling Americans, and who bankruptcy is right for, if anyone, and trying to give people some hope if they feel like that's the next step for them. And we also covered the holiday season, the supply chain disaster, what's going on with the spending there. And finally, we talk about Robinhood and DIY investing. And so when you look at all of those, you go, man, there's so many things I could be doing with my money. What's the right thing for me? And unfortunately, a lot of people get suckered

into the latest fad, the latest trend, because their buddy told them they got in on crypto and they made a lot of money. Or their buddy told them, you can just do no money down real estate and you'll be fine. There's plenty of loans out there and banks that will give you the money without having a down payment. There's lots of people who are trying to build their credit score because they believe the lie that that is the price to pay if you want to win financially. And smart people have very high credit scores. But what we found is that if you handed me a million dollars, it doesn't change my credit score. It doesn't take into account my income. All it looks at is my relationship with debt. And so if you want to dig in to these traps to understand them a little

deeper, to hear real stories, to hear from experts, go check out the Fine Print podcast, wherever you listen to podcasts. Season one is out right now. We're working on what it looks like for season two. A lot of you have reached out asking me when it's going to drop. I don't have a good answer for you. I apologize. But we've got plenty of episodes for you to catch up on. And the other podcast that I host is called the Entree Leadership Podcast where we help business leaders, men and women all around the country, small businesses, get a hang of their profits, their team, themselves, help them grow in all of those areas so that they can win in this economy because that's truly the backbone. So go check out those podcasts on the Ramsey Network. We are here for you this hour. The number to call is 888-825-5225. I'm George Campbell. We'll be back with you. Hey, folks, welcome back to The Ramsey Show.

I'm George Camel flying solo today. And if you're wondering why, the answer is simple. They all ditched me. They're in Orlando, Florida, enjoying the Entree Leadership Summit event. Dave, Ken, John, the whole gang's out there. And so that leaves me here. But it's an honor and a privilege. So give me a call at 888-825-5225. And we will talk about your life and your money. Christian joins us in Oklahoma City. Christian, welcome to the show. Hey, thank you guys. How are you? Great. What's going on with you? Yeah, I got a question for you. So I have my primary mortgage for my primary

residence, and then I have three rental properties, two of which are paid off. On my rental property, I guess my question would be, what would make more financial sense, to pay off my rental property or to pay off my primary mortgage? Okay. What's the numbers there? So on my rental property, I owe 150 grand. It's for finance for 10 years at three and a half percent interest. And so my thought process was to take that rental income and double up on those payments each month. And I could have that paid off in five years. Then take, once it's paid off, then take that income, that rental income from those three properties, and double up payments and take that and then my regular payment and

apply it towards my primary mortgage. And then I could probably have that paid off within about four years. My primary mortgage, though, I owe $260,000 out of 4.75% interest rate. So I just wanted to see what would make more financial sense. Yeah, that's a great question. Sometimes if the rental property is a much smaller amount, it's easier just to knock that one out and it'll free up a payment. Basically what you're saying, which is you want to pay off the rental, use that freed up payment to now attack your primary, right? Yep. What's your household income, including the rental incomes?

About maybe 450 a year between my wife and I. Oh, my goodness. That's fantastic. So my question is, why is it going to take you nine years to pay off $400,000 in debt? Well, I mean, we contribute to my 401K. We contribute to our money market account, our kids' college funds. We have two little girls. We have a lot going out towards that, I guess. Our only debts really are two car payments and a boat.

Oh, boy. So now it's just got a little more complicated. We've got cars and a boat. How much is on the boat? Oh, not much. Maybe like $10,000 left on that. Okay. And the cars?

Maybe like $30, not much. Maybe like $10,000 left on that. Okay. And the cars? Maybe like $30,000 combined. We trade out our cars. I don't trade them. I sell them and get a new one. Not every three or four years just because I put so many miles on them. Okay. So you've got about $40,000 in the boats and the cars, and then you've got $150,000 on the rental outside of your primary. Well, if you're following our plan, I'm just going to pay off those ankle biter debts right there with your income. Just get rid of the boat debt, get rid of the car debt and start paying cash for everything. That's only going to help your cash flow if you want to pay these mortgages off. So that's if you want to do

our plan. And then beyond that, I don't mind you paying off the rental because I think you can do that in a year with your income. I don't see why – I mean, making $450,000, even after taxes and 15% going towards investing and putting some in the college fund, you should still have six figures left over, right? Yes. And so are you guys doing a monthly budget? I mean, yeah. Not in your head, but like on paper, a budgeting app, something like that I mean, yeah. Not in your head, but like on paper, a budgeting app, something like that.

No, no. Okay. No. Well, what I'm going to do for you is gift you guys one year of Ramsey Plus, and that includes every dollar premium,

which is our budgeting tool. It'll track your expenses. It'll connect to your bank account because what I'm seeing here is a guy who's done really, really well financially, but is doing a bunch of things at once, and you're not seeing the traction that you should be seeing for a guy making half a million dollars a year. Yeah.

And so I think it's time to start paying attention to every single dollar that you have coming in and making wise choices with where it's going. And it sounds like you're done really well. I mean you guys are going to be multimillionaires. How old are you? 43. 43. 43. And your wife? 44. 44. Awesome. Well, that's what I'm doing. I'm paying off the debts probably in the next...

How much money do you guys have in just cash reserves, savings, all that? Savings, probably close to 90 grand. Awesome. What would you call a three- to six-month emergency fund? How much? I would say probably at least $25,000. Okay. $30,000. So let's just say in theory that you parked $30,000 for your emergency fund,

leaving you with $60,000. The cars and the boats, those payments would be gone today, right? Still leaving you with another $20,000. Then we knock the rental down 20 grand to now what 130 then we get about the business of using all of our incoming cash flow to knock this thing out in the next 12 months boom now we freed up that payment plus the car payments plus the boat payments and now all we have less left is,000 mortgage, which we could then knock out within two years? Yeah, probably so.

So your nine-year plan just turned into a three-year plan. Doesn't that sound better? It does, yeah. What's holding you back from doing it? Well, I can do that. I just know that I'm going to have to buy a better car. Oh, I'm not saying to sell the car. I'm saying just pay it off.

Yeah, yeah, yeah. I understand that, but when I get too many miles on my car, I have to buy another one. How many miles are you going? Usually around 140 to 150 on my car. A year? Less than 100,000 on my wife's. No, no, no, no, no. That's from the life of the car that I have. Oh, my goodness. I was like, dude, what are you doing for a car? Are you just driving across the country every day? What kind of career are you in? I'm just curious.

Critical care medical device sales. It's a device that helps to incubate patients, put them on ventilators, and then also to prompt patients. Yeah, great income with a career like that. Good for you, man. Well, hey, thanks so much for the call. Again, feel free to do what you want. You're a smart guy,

but I like a two- or three-year plan versus a nine-year plan, and then $450,000 stays with you, aside from what you gave to Uncle Sam, which is a giant chunk of that because they punish the rich. They will punish you if you make too much money. There we go.

Our question of the day comes from blinds.com. Their 100% satisfaction guarantee means even if you mismeasure or pick the wrong color, they'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code Ramsey to get the best deal. Today's question comes from Tracy in North Carolina. She said, I recently began my debt-free journey, and I'm currently on baby step two. I was very excited about the progress I was making when I got some unfortunate news. I learned that I have thyroid cancer and need to have surgery right away.

I have excellent health insurance through my company. However, I don't have the cash on hand to pay for my out-of-pocket expense of $4,500. Should I tackle this new debt first while only making minimum payments on other debts, or should I build it into my debt snowball where appropriate? Should I use my $1,000 emergency fund to cover part of the cost? I'm not sure what would make the most financial sense and would love some guidance. Wow. Well, Tracy, it takes my breath away to even think about getting a cancer diagnosis like that, so I'm so sorry that you're walking through that, praying for the best with this surgery, that it's gone after,500, you're in baby step two, no, I would not touch your $1,000 emergency fund. On a technical level, it's not an emergency. You know it's coming up, and if you can't save up and pay for it by the time it happens, which my A1 would be,

can you talk to the hospital and say, hey, is there a cash discount? Could you do this for $3,000? And then you'd scrape together the $3,000 as fast as you can to negotiate that price down at a cash discount rate. Now, if they're unwilling to do that, yes, they would roll into your debt snowball, and I would tackle it wherever it falls in that debt snowball. And medical debt, if it's newer, it's going to be harder to negotiate it down. It's not a lingering bill that's been around for a while, but you may be able to get that cash discount. She said, hey, I don't have $4,500. What kind of cash discount could you guys give me if I paid today? And so I would try to scrape together with maybe side hustles over time, whatever you can do in order to pay that bill in full and get it out of your life at a discounted rate. Otherwise, let's roll it right into that dead snowball. And hopefully you'll be

out of that soon. I can't imagine having the debt on your shoulders on top of the surgery. That's a lot to go through. So give yourself some grace. It's not going to be easy. Give yourself time to recover. And if that means pausing the debt snowball temporarily to get your feet under you, I'm okay with that. Right now, your health is a priority over the lingering debts. This is The Ramsey Show. Thank you. Our scripture of the day, Proverbs 18.2. A fool takes no pleasure in understanding, but only in expressing his opinion. Goodness gracious, that just described Twitter, didn't it? Thank you, Proverbs, for that ancient wisdom. Benjamin Disraeli said,

The fool wonders, the wise man asks. I like that. Good stuff. Open phones this hour, 888-825-5225. I'm George Camel, your host today, flying solo. Joe joins us up next in Tucson, Arizona. Joe, welcome to the show. Hey, George. How's it going?

Great. How are you? I'm good. I just wanted to ask you more about Baby Step 3B. Sure. If Baby Step 3B is going to be over two years, and I'm actually planning to buy a home with 100% cash, do you also invest in mutual funds at the same time as you're saving for a home? How long is it going to take you in order to save up and pay cash?

Currently, I'm in Baby Step 2. I should be done with Baby Step 2 on in August. Cool. And I'm projecting that Baby Step 3 will be done by January. So after that would be probably five years. Okay. My wife and I currently make $112,000 after taxes. Great. And what's driving you to pay cash for the home? Oh, it's just motivation, in all honesty.

I hardly hear anybody say that they're going to pay cash for a home. So it's just very motivated to do so. I love it. I mean, it's a noble goal and we've heard some incredible stories of people doing that, paying cash for their home. So I'm all for that, but I would begin investing. How old are you two? We are 35. 35, okay. Now, what would the harm be? Let's just put a scenario out there. What if you were able to save up 20% down and then you were able to pay off the house very quickly?

That would be doable too. Could you do that within five years on the same timeline? Yeah. I was just kind of like, I know, I know you guys don't really press a lot on interest. So I was thinking, would interest be a thing if I finance? Would that be a thing or would it matter really mathematically if I just paid in cash versus taking out a loan? It would matter. I'll give you some numbers here. So when we got our home, we had a 3.625% interest rate on a 15-year fixed. Now, because we paid it in 26 months, instead of paying $50,000 over the 15 years, we ended up paying a little over $9,000 in interest over 26 months because those first payments that you're paying, it's mostly going to interest,

which is not fun. So that was a great deal for me seeing that amortization schedule going, oh my gosh, I am paying this mortgage company a whole lot of money in interest, not driving my principal down. So I'm all for it. Listen, I hate debt as much as the next guy. And I want you to buy a home in cash. I just know with this housing market, with it being a moving target, I don't want you to get discouraged because you're five years in and now that $500,000 house is an $800,000 house and the target keeps moving. That's correct.

And so in a market like this, if you can save up 20% down, you'll avoid PMI, which is money you're throwing away so the lender can be protected in case you can't pay. So in that case, if you get 20% down on a 15-year fixed with a payment that's less than a quarter of your take-home pay, I'd feel real good about you getting in a house sooner. And then make it an aggressive goal to

pay it off really soon. So hear me say, I'm all for you saving up and paying cash. And if that takes five years and you're okay with that, that's awesome. What I don't want is five years later, you call me and say, you guys told me to buy a home in cash. And now the house that I saved up for $500,000 is now worth 800,000 and I can't afford it. That's a real possibility. And so that's why I say that. But I do think you should begin investing. If it's going to be longer than three years, I would begin investing. You can wait three years and then begin investing, but you're 35. I want you guys to have plenty of money in retirement. So if you want to start investing now while saving up a down payment, then once you're in those parameters, 20% down at least,

15 year fixed payment, no more than a quarter of your take-home pay. Then I feel good about you getting in that house and having the margin to pay it off really early. Okay. Well, sounds good. Thank you so much, George. Absolutely, man. Thanks for the call. Awesome goal. Love to hear that. Call us back when you've got that house and it's paid for.

Jay joins us up next in Phoenix, Arizona. Jay, welcome to the show. Hey, George. How you doing? I'm doing great. How can I help? I got a thing, mortgage kind of question. Love it.

Sitting on a bunch of cash. I'm not a bunch, but I have a kind of question. Love it. Sitting on a bunch of cash in there. I'm not a bunch, but I have a pile of cash in the savings and I'm really hard to pull it out to address it towards the mortgage. That's the only debt we have was our house. I got 75 K in the house or in my bank, in my savings account. Okay. What's on the mortgage? On the mortgage, it's about $250,000.

$250,000 on the mortgage. Okay. Yep. Is it Mark to take it out and put it there, or should I take the $75,000 and pull out $50,000 and invest it? I need help with this. So is this partially your emergency fund? Well, it was originally.

We started building an emergency fund, and then we just started saving and saving. You just kept going. And got rid of all of our debt. We just kept piling it into this account, and I know it's not useful in one place. So what's three to six months of expenses for you guys? Oh, we're in Phoenix, so 15, maybe 10 even.

Okay. You know, not much. So let's, so $15,000, maybe $10,000 even. Not much. So let's call it $15,000 that we put aside. And in a different savings account, I like to keep them separate because what happens is it gets real squishy of, well, what is this money for? So I would keep your emergency fund in one account and put all other savings goals in different accounts. So let's just say we had $15,000 on the side. That leaves you with $60,000, correct? Correct. And if you put $60,000 on that $250,000 mortgage, it would get it down to $190,000? That sounds right. And that's what I would do.

No calculators involved. And you're already investing 15% of your income into your 401k or IRA or something like that? Yes, already. Okay. Then that's where you would be. And that's exactly what I would do. I would put that, slap that 60 onto the mortgage, bring it down to 190. And you may feel like, well, George, that doesn't make sense because I could have invested this and the payment didn't change. So that was a waste of money. But if you look up the amortization schedule, you're going to notice that you're paying a lot less in interest now, which means you're going to see more progress on the mortgage than you had before.

No matter what's with it. Okay. And then how do I talk my wife into that? Now, that's a much more difficult scenario. I mean, number one, you can show her the math. Sometimes that helps to look at the math and look at what the money you're throwing away in interest to the lender to make them rich. That's enough to upset anybody. So that's one route you can go, but also having a long-term vision for the future helps.

Have you guys sat down and go, hey, what is a long-term goal that we want? What do we want our retirement to be like? What do we want life to be like? What is our next goal once the house is paid off? Then the house payment, the house mortgage becomes a carrot you dangle to get to the real goal, which is financial peace. We want to give more. We want to retire early. Those kinds of things. We haven't followed the financial peace to the core, but Ramsey over the last 10 years of my life has been a crucial point in my financial goals and has helped me get through all my debt.

That's awesome to hear. All of our debt. But it's just one of these things. What's the next step? Where are we at? And we feel content, I guess. Yeah, the next step, I mean, baby step six, since you're already investing,

is to get that house mortgage out of your life. And what's the mortgage payment every month? We pay a little over about $2,200. So what's the actual payment without paying extra? I think $19,000. Okay. Another thing you could do with her on top of the interest, Math, is going, hey, what would we do with an extra $1,900 a month? What kind of vacations would we take?

How much more could we invest? How much more could we give? What would that money turn into in an investment account? That kind of stuff gets me fired up. So I would take her out on a nice date. Don't skimp. You guys are debt free. Take her to her favorite meal and have this conversation and kind of make it a dream date and let that be the fuel to make this big jump, which is, oh my gosh, we're depleting our savings account. We're still on a tight budget though, I tell you.

That's all right. That's the one thing. The budget's been great. That's the thing that's turned us around, I think. Man, that's awesome to hear. Well, Jay, I'm pulling for you, man. That's so cool to hear. Call us back when that mortgage is gone and you do a debt-free scream either on the phone or on the stage if you want to make the trip to Nashville. We're rooting for you guys. I'm encouraged.

A lot of awesome calls today. Appreciate you all calling in and helping me help you take the right next step in your money journey. It's been an honor and a privilege to solo host today. Appreciate all the folks in the booth, Will and Kelly and Austin and James and Nathan and Zach, the whole gang's in there, and everyone listening in, tuning in, watching. We appreciate you guys so much. We couldn't do this without you. Until next time, spend wisely, save intentionally, and give generously. This has been The Ramsey Show. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos

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