The Ramsey Show - App - Should I Get a 0% Down VA Home Loan? (Hour 3)

Episode Date: April 15, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Dr. John Deloney, Ramsey personality, best-selling author, and host of the ever-popular podcast by the same name, Dr. John Deloney Podcast. Be sure and check it out. He's here to answer your questions about your life. I'm here about your money and your life, and we've got an opinion about everything.

So jump in. We'll help. The phone number is 888-825-5225. That's 888-825-5225. Lindsay starts us off this hour in Los Angeles. Hi, Lindsay, how are you? I'm good, Dave, how are you? Better than I deserve.

What's up in your world? So I was involved in a car accident in February. Praise the Lord, I'm okay, my baby's okay, but my car was totaled. I got a settlement for about 10,000. I believe it was about 10,700. And I tithed on it, gave the 10% to the Lord. And I have left about 9,500. And my husband and I have 12,000, about 13,000 in debt. And I'm wondering if I use that settlement money to pay off that debt, or do I save it to get a new car? Okay, so the car you were driving that was totaled was worth how much?

I believe it was worth about $10,000. I think they gave me what it was worth. Okay, so this money is for the car. It's not for any injuries or anything like that. Yes, sir. Sorry about that. Oh, that's okay. I injuries or anything like that yes sir sorry about that oh that's okay i'm just saying so you were driving a ten thousand dollar car they gave you ten thousand dollars approximately and now you buy a ten thousand dollar car right what's wrong with

that plan um well um i'm trying it's been hard finding a car because I commute. I want to get a car that's reliable. You were driving a $10,000 car. Yes, sir. Before. And we were not having this discussion about reliability. Okay. Okay. Sounds like you're overthinking it or trying to figure out. No, we're trying to use this as an excuse to move up in cars.

Yeah, like you're going to win something. You didn't win anything. They just made you whole. If you break even on this deal, you come out really good. Or if you move down in car, you come out really good. So what was the car you were driving that got killed? It was a 2012 Camry. Okay.

Not a bad car. So go get another one of those. That 2012 Camry is pretty reliable. Yeah. Yeah, it was amazing. I loved it. I bought cash for it, and I was really upset that it got totaled. So find an amazing 2012 Camry for $10,000, because that's what that one was worth.

Okay. All right. All right. Is that okay? Yeah. Okay. All right. All right. Is that okay? Yeah, I was really wanting something that would get me better gas mileage because I can use it to work. Than a Camry? Yeah, my Camry did well. It did okay. It's not an F-150, I mean.

So, okay, what are you thinking about? Okay, let me just settle this, all right? It will be a mistake. Please do not, for your sake, use this horrible tragedy as an excuse to go further up in car and set yourself back financially. And you are rationalizing your butt off. I can hear it. So here, I'll tell you. So what I was thinking, my husband just set the record straight.

My husband thinks that we should pay this money to pay off the debt. But it's sitting in my account. No, because then you would not have a car. Right, exactly. That's what I'm thinking. So I want to use it for a car, but I want to finish paying off our debt because we're really, really close. I want to finish paying off our debt and then just save like a couple, just a couple more

thousand dollars to get myself something that's got low mileage and that will do well, like a Prius or something like that. Lindsay, think about it this way. Getting in a car wreck was not a scratch off ticket. You did land with $10,000 in your pocket. And if you were walking to work then maybe this is a different conversation but you need a good car to get you to and from and the insurance company did what they were supposed to do and they made you whole

and what you're trying to do is figure out how to make be whole plus and you can't okay i just want you to get back to where you were just get back to zero that's not worse not better that's right you didn't win anything and the insurance did what they're supposed to do. They paid you. And so go get that same car back, and move on with your day. And don't overthink it. Okay. If you owed $80,000 on the car or $50,000 on the car, and this paid the car off and got you out of a mess,

and we can move you down in car, we would talk about that. But your car is very reasonable don't move up and and set yourself back and use some of the money you should have been using for debt but you're also not required to move down to a two thousand dollar car either in this situation so if i woke up in your shoes i would buy a ten thousand dollar car that got good gas mileage and by the way there's prius on the market for $10,000. Absolutely. Yeah. I'm not sure that's moving up in cars. Well played.

I also understand you owe very little money left and you've got a $10,000 check in your account. And I get that's hard. Yeah, but you don't want to be carless. No, you can't. But I get it. And then you've got to go on

and get a car. Right. If that was going to work, you would have had the car for sale sign in the car when it got totaled. And that's where she's not able to make that leap, right? And we think that when we get an insurance settlement, we win. You didn't, man. That's not what that's supposed to be. It's supposed to make you whole.

Believe me. Insurance settlement and win are never in the same sentence. Right. Right. That never works that way. So, good question. Thank you for calling in. Yeah sentence. Right, right. That never works that way. Good question. Thank you for calling in. Yeah, I love that harp.

Anthony's with us. Anthony is in Los Angeles. Hi, Anthony. Welcome to the Ramsey Show. Hello, gentlemen. Good afternoon. I was just calling because recently I got out of the Marine Corps. I've been in there for four years.

Talk to the phone, brother. All we hear is muffle, man. You've got to speak into your phone. Sorry about that. I just recently got out of the Marine Corps. I served four years, 22 years old, and I'm looking to buy my first home

with the VA loan. I've been approved for 5.5 with zero down, and I'm wondering how much of that would be smart to actually use. None of it. None, zero. There's not a sentence that's come out so far that was smart. Except for the part where you served your country.

Thank you for doing that. That's right. All right, so let's stop. You realize the current interest rate is more like two and some change, not five and some change. Yeah, they're trying to charge you double young man did you hear me yeah um it was about 3.25 yeah uh about 275 okay quotes this morning so on a on a conventional with five percent down what's the hurry to buy a house? You're 22. What do you do for a living? I do IT.

What do you make? 90K. Good for you. It's awesome, man. That's so cool. So you got some good training in the military then, didn't you? Yes. Are you married, sir?

No, I'm not married. Excellent. Okay. All right. Yes. Are you married, sir? No, I'm not married. Excellent. Okay. My advice to you is to wait a little while longer and use some of your fabulous new income to save you up a really nice juicy down payment and get a conventional loan. The fees and the closing costs are much lower than on the VA. And certainly, according to your quote, the interest rates are better. That's a horrible interest rate.

Please do not buy a zero-down house in Los Angeles, California, with the way the market is out of control right now. Yeah, this is a bad time. You're going to be over your head, brother. Your timing is bad. Don't do this. Anytime you don't have the money to do something and you do it, it never leads to good things.

Just think about it that way. I hope we stopped you. Get a great apartment. Live your life. I doubt I did, though. But thank you for your service. This is the Ramsey Show. If current times have shown us anything,

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Jeff is in Grand Rapids. Hi, Jeff. Welcome to the Ramsey Show..com. Jeff is in Grand Rapids. Hi, Jeff. Welcome to the Ramsey Show. Hey, guys. Thanks for taking my call. Sure. What's up? I got a question.

Yeah, a question for you. I've been with the same company for over 30 years. I've invested everything within my own company. I've never ventured out to, you know, independent Roths. And I've got a daughter that's recently graduated from college doing exceptionally well, where she's debt free paid, uh, the last two years on her own. I helped her out and she got some scholarships. She's a young 22 year old with a great job, 30,000 in the bank. And my question is, um, I want to venture out to prepare for the next stage of my life and get an ELP help or

investor pro. And I don't know if we should do this together. I don't know what the best route for us to go. I know that she, I didn't try to pressure her. She's ready to invest. So she's done everything right. And I've preached into her, which I haven't really listened to much. I've come on to you the last few months from a co-worker. So I'm learning myself, and I just need some guidance as to what to do. What she should do? Both of us. I don't know if we should invest.

I'm ready to hook up with an ELP or a smart investor pro. Is this something we should do together? Oh, no. You're independent adults. This is a father, a grown lady, and her dad, right? Yes. Yeah, your retirement plans are not combined in any way. With the exception of when you die, you may leave yours to her.

But, I mean, other than that. No, I was just looking for investment. Yeah, you can both go to the same guy for investment advice. That'd be fine. So just click SmartVestor Pro, and you can schedule an appointment and go meet with a guy, and both of you meet with him, and then you can say, what do you think? Are you going to use that guy, or do we want to talk to another one? And you can talk that through and just make sure you get someone with the heart of a teacher, which you should.

We try not to have any SmartVestor Pros that don't have the heart of a teacher, which you should. We try not to have any smart investor pros that don't have the heart of a teacher. But, yeah, it is not necessary that you both be with the same person. It would be okay if you are, but it's not necessary. And you certainly don't have combined accounts or combined anything. I mean, you could share information if you want to. You could talk about what we're both doing and how we're trying to win. But, yeah, let's let her – she's done a wonderful job of stepping out on her own, and let's let her do that. And it's a common conversation, Dave, that I've had with parents over the years

where they've just – they've been needed for their coaching and their wisdom and their guidance and their direction, and suddenly they graduate college and they're off doing well, and the parent goes, what do I contribute to them now? And that's that shift where just you're enough, just that relationship. The fact that your dad, she's going to ask you. She trusts you. You're a good guy. But now your value is less about what you're giving

and just the fact that you are. You're my dad. And that's a hard transition for parents it is it is yeah because we've gone from doing everything for them yeah and to doing almost nothing yeah well and i think we were probably doing less than we thought but we sure gave that advice and we sure said hey don't forget to and then you look up and you're like i don't know i kept the grandbabies the other day. They do a lot. You're doing a lot for them.

I'm just saying. There's a lot. There's a lot of maintenance involved in them critters. Oh, yes, there is. Teresa is in Boston. Hey, Teresa, welcome to the Ramsey Show. How can we help? Hi, Dave and John.

Thank you so much for taking my call. Sure. So here's our situation. My husband and I, we're both 57 years old. We're raising our granddaughter. She gets about $500 a month for our Social Security. We've just been kind of sticking it in a, you know, no interest bank account. You have told me and others in the past that that's sort of family money, not just hers.

My main question is, should I be putting that aside for a 529 plan, or should I be rounding out my retirement with that extra $500? Why is she collecting that Social Security? Her dad has passed away. I'm sorry. And we're raising her. I'm sorry. Oh, my raising her. I'm sorry. Oh, my gosh.

Yeah. What in the world? Oh. How long ago? Six years now. Oh, wow. And she's 11. Okay. Man.

All right. Well, here's the thing. No, you should not be putting it in your retirement, and no, you shouldn't necessarily be putting it in the 529. It's okay if you put it in the 529, but you are not morally or legally obligated to do that, because the SSI that you're receiving is not enough to cover what you spend on this child. Right. She costs your household more than that.

And so then, and you are acting as the parent, and so you're going to do what is in the best interest of the child well beyond what the SSI amounts to. Agreed? Yes. Okay. So what is your household income? So it's about $140,000. Okay, and then you have the $6,000 coming in from SSI, so $146,000, correct?

Correct. That goes at the top of your budget, $146. And then you go through your budget, regardless of where the money came from, whether you made the money, your husband made the money, whether an investment comes in, whether there's SSI. It's just a pile of money. And now we're going to give every one of those dollars an assignment towards the baby steps.

And it sounds like you are out of debt and have your emergency fund and you're on four five and six are you um we yes we're out of debt and have an um excuse me emergency fund so you should be putting 15 of your household income into retirement above in baby step four above that out of your budget that consists of all of your sources of income, you would put above the 15% going into retirement, you would put some money into Baby Step 5 towards this kid's college, and that's where you're going to load up that $529. And if you have an 11-year-old, you probably are doing more than $500 a month into that. But it has nothing to do with the SSI calculation. It just has to do with you having an 11-year-old,

and you need to get caught up saving for college. Okay. You're probably going to beef up baby step five and slow down putting any extra on the mortgage because you have a rising child heading towards college wide open. Right. We also have, I mean, we're 57, so retirement's coming quick, and that 500 could help put us into the...

Honey, honey, there is no 500. Well... There's no 500. Okay. There's 146. Okay. So I need to put a little bit more into retirement. You need to put 15% of your income, household income, into retirement.

Okay. If you want to get real technical about it, I only put 15% of the 500 in just now. Okay. If you want to be real technical about it, that's the way the math happens to work out. But you need to be putting 15% of your total household income in baby step four into retirement, and then you need to put all you can scrape together beyond that into baby step five because this kid, you're late for college, and you're moving forward. You've got 10 more years to work.

This kid will be out of college, and you will have built a pretty good nest egg by then by doing just 15%. Meanwhile, you can work on your house. Okay. That makes sense. But quit parsing this money out. You didn't say, I'm going to put money aside

into retirement for my husband's income and then I'm going to put some money aside for my income. No. We called it a household income. The whole thing, baby.

The whole thing. And you don't help your kid by not having retirement, paying for their college, and then needing their help for your retirement home later on. Yeah. You're 100% chance you're going to retire.

Not 100% chance they're going to college. Or some fancy special one. This is true. This is the Ramsey Solutions on the debt-free stage, Brent and Brenda are with us. Hey, guys. How are you? Hey, Dave. Good. Thank you. Welcome. Welcome. Where do you guys live?

California. Whereabouts? Sacramento. Oh, love Sacramento. Awesome. And originally from New Zealand. I'm a Kiwi. Oh, fun. Well, good to have you guys. Thank you. How much debt have you paid off?

Paid off $172,000. $172,750 in about 9.2 years. Good for you. Slow and steady. And your range of income during the 9.2? $130,000 to $195,000. What do you guys do for a living? Brenda? I work in healthcare.

Yeah, healthcare. I'm not a nurse, though. I work like a coordinator coordinator back office type of thing front office so i'm a salesman i sell moldings and doors excellent very fun very fun so 9.2 years was this your house yes sir i'm weird you are officially weird people. A paid for house in California. You are double down on weird. Definitely. I love it, man. I'm proud of you guys.

Thank you. We are thrilled. What is this house worth? Probably about $450,000, and we bought it for about $230,000. And you own it, baby. Yes, sir. I love it. So what put you on this journey 9.2 years ago?

Well, I've been a FPU coordinator and just became a Dave Ramsey financial coach. So we've been leading FPUs. And I think just the power of compounding interest and realizing how much money you can bank in your own account. If you get ahead of the mortgage and pay it off, you can save thousands and thousands of interest. Absolutely. Also, I'm in sales, so in the housing economy, it can be up and down. So it's up at the moment, but one day it's going to be down. So having no house payment is going to be really sweet when it goes down.

Well, I mean, the whole thing just gives you stability. Yeah. Well done. So Brent and Brenda, the number of I'm going to get in shape this year's I've done is a lot. And I last about two and a half weeks. I work out real hard. I get all the forms and new weights because it's always the weights problem.

How in the world have you all kept plugging at this for nine and a half years? We're in it together. It's a team effort. And we both were determined. We both had like a little sign in the refrigerator saying we're going to pay the house off in this amount of time in this year. And so we've been plugging away at it. But we haven't skimped so much. We budget everything really well.

Use the financial principles techniques. And also just a testimony to the people in our class, too, as well. So sometimes it seems like that date is far off a little bit, but once it starts getting closer, we start getting more excited and stuff. So it's like, okay, we're going to pay the house off in this amount of time, and we get free. So when you put the number on the refrigerator the very first time all those years ago how far how long did it say it was going to

take you well it was technically october 2021 so um we just our mortgage was about i think about 1090 we put down 2300 a month and just pounded it. So you beat it by six or eight months over the original goal. Six or eight months, yeah. Very few people go longer than the original goal. You almost always surprise yourself to some degree. And you guys did. You were the real tortoise. I mean, just kept plodding, man.

Yep, definitely. That's beautiful. The beautiful tortoise. And thanks to our coordinators out here, the three coordinators, who really inspired us and helped us as well. How many classes have you all led? We've only led three classes. The last one was a virtual, but fantastic because we got to coordinate with people from Alaska and Minnesota. Just flipping awesome.

Via Zoom. Yeah, that's neat. The virtual coordination is a different animal, but it's also very cool. Yeah, very cool. Via Zoom. The virtual coordination is a different animal, but it's also very cool. Very cool. Most of our coordinators now are virtual. Good for you guys. I'm so proud of you.

You're professionals. You have a paid-for house in California. You're professional debt reducers. What's the secret? How do people get out of debt? I think it's actually writing things down. I teach my students, hey, write down what is your 20-year goal and put it somewhere. Put it in the bathroom like we did. Put it on the refrigerator.

And if you have a goal, if you have it written down, you walk past it every day. And it just helps keep you focused. And also teaching FBU, you know, you're accountable to the other students. But, yeah, just writing it down, having a goal is important for us. Yeah. Fabulous. Yeah, keeping it in front of you is on anything. Maybe that's the secret for the gym thing, John.

Appreciate you, Brent. Thanks, man. Just kicking me while I'm down. Hey, John. Here comes the Brentnt bus feel the tracks john i'm so impressed you showed up early for the show just you're my mentor although for the exercise thing since covid they've closed so that's kind of a little deterrent so but you got to keep plugging away and be creative i I don't know, Brenda, that sounds like an excuse. You should probably write that down and put it on the fridge.

I will. So, hey, who is, besides your classmates, who is your biggest cheerleaders? Well, I've got to tell you, we're pretty self-motivated, but, yeah, just self-motivated. I'm on the scale of personality. You'll appreciate that, John, is I'm probably like 11 as far as discipline. So I had to be careful to work with Brenda, you know, not just save, save, save, save, but she can spend a little money on this, a little bit of money on that. Okay, we like to shop.

And she works in health care, Brent, so they will never find your body, brother. Yes, sir. Good one. Although I'm a hunter like you, John. We have our means. You can go either way. We have things we can do with you. You guys are fun.

Thank you. This is so great. I'm so proud of you. Well, thank you. Thank you. How old are you? Oh. 59.

59. Yep. Okay. So for women, don't ever ask our age. 32. 32. It's too late. It's too late. It's too late because I don't care.

I promise I won't say she's 59. I promise I won't. Okay. So I'm older than both of you, so don't whine. Yes, sir. Yeah, but you're sitting here with a paid-for house. Did you ever think you'd get there? We did, but I want to share.

I remember at 4.35 a.m. I was in bed. I got my online payment, paid the last payment of $15,000. I remember your statement about how it feels so different. Got up out of bed, and I walked across the room, and it felt like I was walking on air. I remember that statement you made. It was so amazing. I told all the class, I said, hey, remember those positive moments, paying that small debt off. Remember and embrace that because the positive motivation is more important than the negative.

Don't do this or don't do that. That's true. Yeah. That's true. There's a lightness that is very real. Oh, fantastic. It's tangible. Fantastic.

That people that have never been there don't have. Yeah. I'm so proud for you guys. Thank you very real. It's tangible. Fantastic. That people that have never been there don't have. I'm so proud for you guys. Thank you very much. What a testimony to younger folks who are looking at a pile of student loans and say, it's going to take me three years. And you guys have set a marker out there that says, yep, it will.

And it's going to be worth it. You're just going to get up and do it every day and do it every day and do it every day. You're going to find somebody to do it with you and you're going to keep doing it. And then you're going to have that moment where you float across your bedroom and it's going to all be worth it. It and do it every day. You're going to find somebody to do it with you, and you're going to keep doing it, and then you're going to have that moment where you float across your bedroom, and it's going to all be worth it.

It was wonderful. Thank you. Thank you for the inspiration, you guys. Yes, I appreciate it. We're so proud of you. You're our inspiration. You're heroes. Well done.

Very well done. All right, here it is. $173,000 paid off in 9.2 years. By the way, that's about seven months early, making $130,000 to $195. House and everything! These guys have a paid-for California house. Shut up!

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Game on, baby! Game on! free! Woo-hoo! Game on, baby! Game on! So rad.

It changes the whole equation for the next decade. Everything. Everything's changed. So imagine in a year, the real estate market is settling, and his boss calls him in and says hey we're gonna have to we're gonna have to to downshift our sales goals for doors and he'll go all right and all right have a good week man hope hope you get hope you're doing okay yeah yeah if you need a hug holler at me i'm gonna be i'm gonna be hanging out with brenda i'm gonna be going on the book by debt free back porch yeah because because we don't have a house payment.

Have a good one, brother. Woo! So cool, guys. This is the Ramsey Show. Thank you. Our scripture of the day, Zechariah 4.10. Do not despise these small beginnings, for the Lord rejoices to see the work begin. Francis of Assisi said, Start by doing what's necessary, then do what's possible,

and suddenly you are doing the impossible. For the Lord rejoices to see the work begin. Sometimes you cannot see the end when you start, but you need to start anyway. That's what we're saying. Just start. Just start. You know how you become a writer?

You write. Start writing. I don't know what to do in an exercise program. Just start. Do it. Just start. Anyway. Just start.

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 will 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. Use the promo code RAMSY to get the best deal. All right, today's question comes from Ginger in California. She writes, My husband refuses to deposit his whole check in our joint account and hides money in a separate account.

He deposits only enough to cover our expenses, then turns around and withdraws large amounts later. He's a good father. Horsecrap. Don't want to ruin my kid's life if we divorce. That's it. So, number one, he's not a good father. Number two, he's ruining your kid's lives.

Not you being forced to do something about this. So there's not really a question here, Dave. This is more of a statement. Yeah, your husband is a twerp. He is not husband material. He is not husband material. He is not father material. He is a self-centered little child. Yes.

And he's doing just enough to keep his kids fed and you fed. But he's a manipulative, power-hungry idiot. And then he doesn't even care about y'all being fed later on yeah because he'll go get the money back yeah so uh what does she do from here um sits with a counselor absolutely and then she's the fact that she said i don't want to ruin my kids lives if we divorce tells me two things number one she's thought about it or number two the people in her life have said you're this is over And so she has built this up as I'm not going there. And so I have met with people who have said, I won't do that.

And to which you say, okay, then this is the bed you're choosing to be in. You're going to have to make the of manipulation usually comes with violence and or volume and or other types of neglect and manipulation beyond just the money. This is a symptom, right? And she's got to sit with a counselor and begin to create a or what plan because this is a mess. And it's to give you the strength, the assurance that you're not crazy. Correct. Or wrong. Correct.

And the words, the narrative on how to calmly lay down what will eventually become an ultimatum. Right. Or what. Yeah. Yeah. And you're going to say you're either going to provide for this family by putting your whole check in the thing and we're all going to work together or we're going to talk about how we're ending this marriage because I'm not going to live like this anymore. And these kids are not going to be raised with you as a model for what a husband and a father and a provider looks like. Yeah.

Because, yeah, you're damaging your children by allowing them to think he's a good father. Yes. You're throwing gasoline on a legacy forest fire. Because they're going to duplicate what he does. Times ten. Yeah. Right. And to the extent he's yelling at you,

then they're going to yell and hit. And to the extent that the mother of your children is simply an annoyance and in the way of whatever thing you need to buy, whatever event you need to attend, that's how they're going to treat romantic partners for the rest of their life. And you're painting a model. Here's what that looks like. My life is more important than all of y'all's combined. My wants and toys and fun and stuff. Yeah, the opposite of this is we often tell people, what is the best thing you can do for your children? Love their mother well.

That's it. When somebody says, hey. That's the exact opposite of this whole thing. How do I help my kid with. How do I screw my kids up? Mistreat their mother. That's exactly right. Hey, my kid's got anxiety.

What do I do? Fix your marriage. Hey, my kids are struggling with xyz fix your marriage have a great marriage start there and then we'll start talking about the other stuff yeah yeah yeah i'm sorry ginger i'm sorry it's a horrible thing there's not even a question here it's a horrible thing you're in but the uh if um you know what we're seeing you know with what you the information you gave us uh was not throwing your husband under the bus if it was truthful and it is accurate. And then you are sitting in a mess and you need to do something about it.

That's what we're saying. Yeah. And you probably are going to need some help to do something about it. It's very few people can navigate these things by themselves. You need someone to give you language to it and someone to say, look, what you're feeling in your heart that this is wrong and you're being mistreated is correct. It's accurate. It's accurate.

Because you start to feel like you're the problem and you're not the problem. It's almost a domestic abuse thing. And look at what she says. I don't want to be the one who ruins my kids' lives by taking care of me and my children. You know what? He has said that to her.

Absolutely. If you leave me, you'll destroy these kids. If you don't quit yelling at me about the money, you're going to mess these kids up. And she says, oh, my gosh, I'm so sorry. I'm so sorry. Yeah, it's got the same tone of a domestic violence. That's why you said violence, yeah.

Ryan is there. Ryan's in Louisville, Kentucky. Hey, Ryan, how are you? Hey, gentlemen. Thank you so much for taking my call. I truly appreciate it. Sure. How can we help?

Well, first off, I just wanted to say thanks to your guys' program. My wife and I, we paid off $160,000 worth of debt. Woo! What a stud, man. In December of 2018. Yeah. That was awesome. And I guess now we're sitting at what would be baby step six,

but we're on active duty military, and we rent everywhere we go. Good. And so I want to be saving so that when I do retire, we can pay cash for a house. So, one, can I save above the 15%? Yes. And two, if I can, where should, you know, what type of account should I be putting that into? Yeah, your baby step six just goes in a separate mutual fund, and you nickname that the house fund,

and you pretend like you're paying off a $200,000 house and you try to get $200,000 in there. Okay. Okay. So one of the things that I'm looking at is I'll get promoted later on this year, so I'm going to get a little over $1,000 pay bump per month. And so I just don't know how much of that, I guess, should I be. Well, you should. Now, out of your budget, your own baby steps four, five, and six, you should be putting 15% of your income, whatever your income is, into retirement, baby step four.

Five is kids' college. Do you have kids going to college? They're all taken care of. GI Bill got it? GI Bill and then some are just in the military themselves. Oh, okay. Wonderful. Okay.

So check that box, right? And so then you say, all right, everything above 15% goes towards paying off the house early. Only we don't have a house. So we are building a pay cash for the house fund. So you basically have a mortgage line, right? Which is the exact same math. Yeah. So you throw everything in that other mutual fund,

and maybe step six, above 15% go up your household income going into retirement. So, in other words, if you get a raise of $1,000, you're going to raise your retirement by $150, and that gives you another $850 to throw towards this get-out-of-debt house fund. And I just want you to pile up cash fast and furious like you were trying to pay off a house. Exactly. And the average person pays off their home in seven to eight years doing our plan. And so seven to eight years from now, I want you to have enough in there to pay cash for a house.

Okay. Be the same exact math. It's just you're getting the benefit of the money instead of the mortgage company. Okay. Yeah, it'll work for you instead of paying that interest out. That's excellent, man. Yeah. Very well done, sir. And again, thank you for serving your country. Yeah, it'll work for you instead of paying that interest out. That's excellent, man. Yeah. Very well done, sir.

And again, thank you for serving your country. Yeah. We really, really, really appreciate that. And yeah, when you move around every two years because they move you and most of the housing is in a military community where it's tough to sell a house, you can get really stuck if you start buying properties everywhere you go. So we tell folks if you're moving every two years for any reason, but particularly in the military, don't buy.

Just rent. So he was following that advice. But this gave him a leg up on how to offset the situation there. Nothing cooler than getting out of the military and writing a check for your home, right? That would be pretty neat. That would be pretty neat. That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.