The Ramsey Show - App - Should I Invest Extra Money or Keep It in Savings? (Hour 1)

Episode Date: January 5, 2023

George Kamel & Dr. John Delony answer your questions and discuss: Why you shouldn't borrow money from your dad (or anyone for that matter), How can I help my daughter and her future husband start off on the right foot, "Should I put extra money in an IRA or keep it in savings?" "How can I convince my husband to pay off debt instead of wasting it?", The best way to treat an emergency fund. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined this hour by Dr. John Deloney. That's right. He is a doctor, ladies and gentlemen, two PhDs, best-selling author, host of the Dr. John Deloney Show. What do you mean, not really, John? They weren't honorary. I can't heal anybody. I went to a lot of grad school classes. I'm the guy that walked the marathon. I get to put the sticker on my car that says 26 point whatever. I finished. I didn't win the marathon.

That's a good point. But it's funny that people go, well, you're not a real doctor, but you can have a doctorate and be a doctor and not be a medical doctor. Correct. Correct. People need to understand that. But there's also people who have doctorates in totally unrelated things. Anyway.

I tend to ask you about my health symptoms though, frequently. I answer, which is nice. You answer with confidence. I shouldn't be doing that. I love it. Well, John, I thought it would be fun while we wait on the phones to start ringing. 888-825-5225 is the number to call, by the way. That's 888-825-5225.

You jump in. We want to talk about your money, your mental health, your relationships, boundaries, whatever goals you have, whatever crossroads you're facing. We want to step in and help you take the right next step. So 888-825-5225 is the number to call and we'll get you on the phones here. So I want to start, John, with our question of the day, which comes from Fernando in Arizona. What does Fernando have to say? All right. Fernando asks, what I should do to get out of my dad's house and out of debt while looking to get married? Fernando, you got a lot

going on, man. I'm a manager for a financial institution call center making $68,000 before taxes and have 9,000 bucks in my 401. I still live at my dad's house and I pay the utility bills. I'm looking to move out of my dad's house, but Arizona home prices are still high. I have over $20,000 in debt spread between credit cards, past due taxes set up on a payment plan and 401k loans. I believe my dad would... Hey, taking out 401k loans. I believe my dad may be able to lend me money to knock out some credit card debt that would help a lot since I'm paying over 25% APR rate.

However, I've never asked him for anything since I was 14 years old, I guess except for a place to live and rent. I'm not sure if I should ask my dad for money or how to ask him if I do. Oh, Fernando. We have no clue how old Fernando is. I don't think he mentioned that.

He could be 50. He could be 20. That's right. No clue. We're going to guess he's closer to 20. Let's just for the sake of this, let's just pretend he's 25. All right. Okay, 25. So he's got a job making $70,000 at a financial call institution, and he wants to move out.

So he makes enough money right now that he could go get an apartment and get his call center job and deliver for Amazon in the morning or deliver for whatever and start working multiple jobs to get this stupid debt paid off. He could make a really clear plan with his old man and say, I'm going to live here for three more months. I'm going to have zero. I'm just going to pay the utility bills. I'm going to spend no dollars and I'm going to start wiping this debt out as quick as I can. I can come up with a plan like that. But it sounds like he's trying to do everything all at the same time.

He wants to not live at dad's house, but not have some debt, but also buy a house. I got some investments, but I had to take some loans out against my investments. He's just got too much going on at the same time, right? Yeah, that's a classic case for most people. They don't know why they're not making progress. They're frustrated and they lay out all the details on paper

and you're like, well, you could stop doing that and that and that and that and focus on one thing with intensity, which is getting out of debt. That should be your next goal, which means we're pausing investing, which means we're not going to take out any more debt which is only exacerbating the problem and so the way to free yourself from your dad is not to ask him for a loan so that you can move out from i'm going to move out but still be chained to him with payments exactly that's not going to help the relationship so imagine going to the gym george this is i'm

trying to go there this is quite the stretch i. All right. But imagine going to the gym. Do I have to work out? Well, yeah. That's kind of the point of this whole story I'm telling. You go to the gym, and you get underneath a squat bar, and you pick up one dumbbell for curls, and you attach one of your legs to one of those little band things, and you do this on a treadmill, right?

You're not going to get in good shape doing that you're gonna get a lot of broken bones and you're gonna go nowhere you might look really cool you would not absolutely would not i think it's very similar man like you're trying to do everything all at one time i love that like get out of debt first dude get out of debt make a plan to get out of your dad's house um and go from there yeah because on paper i'm going you make 70 grand you have 20 grand in debt you can do this there's people who make less with more debt that have paid it off so this is very very quickly and by the way no expenses a financial institution call center which is i love the way he said that a financial institution call center

okay um he could do that that job is is going to be shift oriented like i'm working the night shift and working the day shift so you've got plenty of time to work like crazy on another one two or three jobs figure it out absolutely all right let's get to the phones 888-825-5225 valerie is in charlotte North Carolina. Valerie, welcome to the show. Hi, thanks so much. Absolutely. How can John and I help? Well, my daughter just got engaged and I would love to know any resources or any suggestions you have to set them, get them started on the right foot. You know, we're talking about all the wedding plans and everything but it's more important that they start off well what do you think of this guy

he's lovely good does he have a good head on his shoulders he does he's a beautiful young man and has such a great family we're very blessed val, do you have a crush on this guy? No, not in a gross way, Valerie, but I mean, kind of like, man, well, he sounds great. So precious. Well, I asked because you high five your daughter a little bit. Like you're like, way to go. We, what? I'm sorry. Did you high five your daughter? Like way to go. No, as wonderful as he is, he's still the lucky one. That is the best answer. He's still not good enough for my baby.

Okay. Does your daughter have any debt? She does. She has $21,000 of college loans. Okay. Is she working full-time now? Yes, sir, she is. And he's working full-time?

She just bought a car. She just bought a car. She just bought a car. It sounds like that car has payments attached to it, based on your tone. Correct. Okay. Well, their A1, once they get married, is to combine finances. Not before. So you said, what can they do to start off financially?

They're engaged right now. So here's what they can do, is go through Financial Peace University as a couple. That is the number one thing I would recommend to any couple that is engaged to be married. And I'm going to do you one better. I'm going to gift it to you to gift it to them as a present. Can you do that for us? Oh, my God. That's so awesome.

You didn't win prices, right, Valerie? I love the excitement, though. I feel like I won the prices right. Thank you so much. You are the best. Well, hang on the line. Austin will pick up. Tell them here's the thing they have to do.

Watch all nine lessons, create a budget, and report back to you. You can even go through it with them as an encouragement. But, man, if they can get out of debt, have money in the bank, begin investing. Learn to dream together, create goals together, get on the same page. That is going to be the number one ticket to success with their marriage. This is The Ramsey Show. Hey, you guys, health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries.

CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets at chministries.org slash budgets. This is The Ramsey Show. I'm George Campbell, joined this hour by Dr. John Deloney,

and we are taking your calls about money, mental health, relationships, boundaries, career, life, the pursuit of happiness, you name it. John can answer it. He's that good. So the doctor's in the house. I'm here too. 888-825-5225 is the number to call. And John, you do your show right next door to this studio, the Dr. John Deloney Show.

What kind of calls have you been getting? Is there a bucket, a theme you're seeing? Ooh, man. I would say 95% of the calls I've been receiving the last few months have been about marriage or romantic relationships or kids. And that's everything from schools and kids and mental health diagnostics to my husband and I don't know how to talk about sex anymore. We've had, we have three kids. We don't even know each other anymore. We just had our kids leave. We don't know what's going on. So it's everything in between grief, how to deal with grief. It's, it's, it's just doing life, man. Doing life. Well, I love the way you handle these calls and you bring such a levity and humor to all of it somehow in the midst of it.

I was going to say, pursuit of happiness is kind of dumb. If you want to call and talk about that, people, we can talk about that. No one's calling in for that. Nope, nope, nope. Well, let's get to the phones. Tabitha is waiting in Savannah, Georgia. Tabitha, welcome to The Ramsey Show. Hey, George. Hey, John. How are y'all? We're doing great. How can we help? So me and my husband have started working with a SmartVestor Pro to start our retirement contributions for moving forward for our life. We are debt-free other than our mortgage. We

have our emergency fund. We have set aside an extra $10,000 for a car fund since both of our cars are six and seven years old. So we are just wondering, we got the question from our SmartVestor Pro on if we wanted to max out our Roth IRAs for 2022, since we can do that through this tax season. We are torn on what we should do. We do have the money over our emergency fund. We just are unsure because we are emotionally attached to the extra money we have set aside. Wow. Is this money special to you somehow? It's just a piece of mine. It's more emotional. Y'all talk about that all the time. It's definitely emotional.

So I'm like to shove over the $12,000. It just kind of makes me a little nervous. Well, have you guys invested 15%? Are you at that threshold yet? Is this beyond the 15%? So we are starting fresh this year with our SmartVestor program. We have not contributed anything up until this point, and we're ending out our 31 years of this.

Okay. We'll be 32 next year is what I was trying to say. What are your retirement options currently through your employers? Neither of us have retirement through the employer, so it's all going to be Roth IRA, and then in addition to that will be a brokerage fund. And you're just getting started with investing? Correct. Okay. I would totally fund these Roth IRAs and the money that you're emotionally attached to. Imagine 30 years from now, you go that 6,000 could have turned into

like 130 years from now. And I didn't do it because I was emotionally attached to 6,000. When you think about it that way, you are happy to let go of that money knowing it is going to create an amazing retirement for you down the road. Okay, great. We just wanted some advice because we were both torn and can argue backwards and forwards on either side. Well, and John can speak to the emotional side because there's something underneath that. There's something maybe in your past where you didn't have the money and you feel that feeling of, oh my gosh, what if? Oh, for sure. Yes. Did you grow up with scarcity of some sort? I absolutely did. And then we are finally getting our feet underneath us. We found, Dave came to speak in Savannah in 2018. So that's kind of when

we started our journey. And then the last year and a half, we've been working on building up our emergency fund. So it's just finally nice to have that buffer between us and life and knowing that if something comes up, we're okay. Dave and I were talking just in a personal conversation a few weeks ago, and we both noted that in the last few years, we've received more calls about what I would consider identity. And what I mean by that is, you're going to have to practice not being anxious all the time. And you're going to have to practice this idea of forward thinking, thinking about future Tabitha.

One of the, some of the research about the actual poverty mindset is I just need to get through today. And one of the mindsets that shift from somebody who grew up in deep poverty to somebody who is growing wealth is the ability to say, who can I be in five years or in 10 years? And if you look at it as a character flaw, like I just can't do it. I'm not, man, it cascades into a whole bunch of other drama. If you just look at it as like, man, that's a set of skills. I've never, I've never, I've never not been in poverty. So I'm going to have to learn how, like when I first had my kid, my son, I would get so frustrated until I finally realized I've never had a four-year-old before who just pees everywhere. I've never had that. So I am practicing on how to be a good dad. I'm going to, I'm going to work

really hard. I'm gonna get good wisdom, get good advice, and I'm going to practice it. And so what you're going to have to do is practice not being in fight or flight. And that means when you feel your body going, think, okay, I'm just going to go to the data and the data says I'm going to invest this money so that future Tabitha is going to be safe. And it's going to be, I'm going to feel weird about it and it's going to be hard and I'm going to practice it. I'm going to do it anyway.

And then the more you practice this, the easier it becomes. And then it will become, at some point it becomes fun to see how much you can sock away for future dreams and future goals. Does that make sense? Makes a hundred percent. Here's the thing. Be really graceful and kind to Tabitha because you're learning a new thing. Like if you were just learning Spanish, you were learning gymnastics or something, you wouldn't get mad if you couldn't just do round off flip-flops on the first day. You would be really happy with your somersault. So just practice the somersault for a minute, right? And then just be curious when your body tries to protect you. It's kind of a fun way to do it, I think. I love it. And Tabitha, you know what to do. You guys have worked

so hard to get here. Think about where you are now versus where you were, which is I owe people a bunch of money. We don't have money in the bank to cover emergencies. And look at the facts on paper. We don't have payments anymore. We have a pile of money in the bank. We both are working with income. And if, think about the worst case scenario, what could happen? You lose a job. Okay, we have an emergency fund. We'll go get another job. There's going to be another one. And as long as you have the right insurance in place to protect what you're building, there's no reason to kind of have that level of anxiety about money on a daily basis so let me let me i want to say something real quick there's no reason to but sometimes our bodies do it anyway right and so i think it is um it's feeling your body getting anxious and then asking yourself like all right

what are you trying to protect me from and you see me i'm smiling i've i've even like i've just practiced it over the last decade whenever i ask my body that like what are we getting anxious about man and occasionally i know exactly what it is i might get fired right i know i am anxious and then i can think okay do i have money in the bank do i have some security does my wife have a job okay we're gonna be okay and i can think through it but sometimes it's easy to tell people just quit being anxious there ain't no reason to be anxious well thanks dude but my body being sad john is responsible as responding like somebody's coming at me with a hatchet and they're not um part of that takes time that's right you gotta feel it and then move on that's right that's right it's something you gotta practice i like that practicing that as a habit it's a great way if you're trying to start new

habits this year one of them is practicing how to release that anxiety and there's a great way if you're trying to start new habits this year one of them is practicing how to release that anxiety and there's a few things you do john practices in your daily life when you feel that how do you release that uh i think as like a chemical for me if i wait until i am full-blown i have a bent towards anxiety towards being anxious about things if i wait until i am full-blown i'm, my body's rattling, I've waited too long. And so for me, I got to eat right most of the time and I got to get good sleep most of the time. And I got to have relationships most of the time. And I can't owe people money because it really rattles my cage to know I'm not safe or to know that Toyota's

deciding what I do tomorrow, not me. Those are things that I create an environment that's non-anxious, right? A non-anxious world so that, and it's taken years to do this. This isn't like some privileged finger, like I just decided today. I'm not, no, dude, it was hard grinding, awful hard work. But you create an ecosystem

where the whole system isn't stressed. And then when things come up, your body has the capacity to handle it. But when it does get bananas, I call somebody, go for a walk. I sat in a cold tub this morning because I'm anxious right now. So there's some things you can do, but if you wait that easy, it's too late. Yeah. And on the money side, just doing a budget, controlling the things I can control. That's it. And on paper, you go, all right, we got this. It's not out of control. I love it.

Good wisdom there, John. More of your calls coming up, America. The number to call is 888-825-5225. We'll be right back. Are you sick of planned obsolescence? You know, when companies make products crappy so you have to buy more of their crappy products? Well, me too. And it's why I love companies like Grip6. Grip6 is all about quality products meant to last forever. That's why their comfortable, bulk-free belts, slimline wallets, and lightweight wool socks all come with a lifetime warranty and

simple returns and exchanges. So check them out at Grip6.com today and get up to 20% off with the promo code RAMSEY. Ramsey. You're listening to The Ramsey Show. I'm George Camel, host of Smart Money Happy Hour with my good friend Rachel Cruz, joined this hour by Dr. John Deloney, host of the Dr. John Deloney Show. You can check out those shows on the Ramsey Network or wherever you listen to podcasts. Open phones this hour at 888-825-5225. Sharon joins us up next in Ohio. Sharon, welcome to the show. Hi, how are you guys? We are doing great. What's going on with you? So I'm a stay-at-home mom, and my husband has a pretty good job making

like $65,000 a year, and he moves up every year. And so my question is, we still owe my parents around $20,000 for they helped us buy our house that we're in right now. How can I convince my husband to focus on paying off that debt rather than just going slowly and then in the meantime, making extra cash here and there and then using that extra cash for fun things like vacations and hobbies and stuff. There's something about owing your parents money and then you go on vacation and it just, you know what I mean? The whole thing feels, ugh. Okay. I've got to ask, how have you tried so far? So we have a budget and we, at this point we're doing like a certain amount each month like we're saving it up um or um and then paying every couple months we'll give mom and dad a check so you're not doing you're not following the babies you're not you're not trying to get out of debt you just have like kind of a plan you're kind of like messing around but

y'all aren't actually exactly when we find a pile of money we'll give them a little bit yeah they can have some yeah pretty much i mean like it is a goal like we've talked about it both of us and we know that that's what we want to do but i guess he's not as intense about it as i am at this point and being a stay-at-home mom i don't have any other income really other than his, which is fine, except that when he goes and spends his extra income other than his salary on fun stuff, then I'm just at home, and I don't really get the extra fun stuff, if that makes sense. Where is the extra income coming from? Things like extra mechanic work for friends or working overtime at his job.

They had a big project they had to get done, so he got paid extra, stuff like that. But he sees this and says, well, this wasn't in the budget. This is extra money I earned. I'm just going to go spend it how I want. Pretty much, yeah. I mean, when I ask him about it, usually he'll say, oh, yeah, well, we can put some of it towards the loan or whatever. Yeah, he doesn't have the fire that you do to get this debt out of your life. Exactly. When you're in baby step two, it's intense.

And you can do other plans, but our plan is, this is scorched earth. We're not eating out. We're not going on vacation. We have one job to do, and that is get this debt out of our life. Do you have any other debt outside of the personal loan to your family? There's a little left on the mortgage, but otherwise, no. Okay. Well, I think that obviously we've got to get him on the same page, and it's hard for you to do,

which I'm sure is frustrating because you don't have the ability to go create extra income to do this. Well, actually, you do. Okay, so let me hop in here george um sharon somebody told you that the way you feel doesn't matter who was that that was that when you were little um possibly okay because you've carried that message that's a story you were probably told at some point and now it's a story you tell yourself that um you wish things were different but this is just the way this is and i know i feel this way but he works hard and that's fine i'm not gonna fight him and okay and you are slowly slowly drowning in what I would say is a pool of apathy.

Fair? Yeah, that's fair, I'd say. And so the reason I asked you earlier, what have you tried, and you did what many peacekeepers do, is you deflected to, well, we have a budget and we kind of do these things. What that tells me is you have a budget every month and he either over like a football game or something, he'll look up and be like,

yeah, that's great. And he'll make some more money and keep whatever he wants. And you are doing this and you are doing the best you can to use the word we so that you don't feel isolated and alone. Am I right? Right. Yeah. Okay. So at some point you're going to have to decide. And my hope is that you take initiative on the front end before this thing turns into resentment. Cause that's where it's headed is that you make a call, a direct call, honey, I'm scared to death. I'm sick of owing my parents money and it makes me feel less than, and it makes me feel unsafe. And I hate going on vacation having my dad look at the photos on social media because it embarrasses me that i

had to go ask my daddy and my mommy for money to buy my a grown-up house i want this debt out of our life please join with me on this yes that is different than hey honey it's budget time oh okay you see what I'm saying? And here's the thing. If he rolls his eyes and says no, then you can say that I'm going to have to go get a job because I'm not living like this anymore. Right. Yeah. Well, to be fair, he does help with the budget.

In fact, it's 50-50 on that. It's not. It's not. If I help with the budget but then go make extra money that doesn't apply to our goal which is do a budget so that we can get out of debt then i'm not really following a plan i'm just kind of doing what i want to do yes if if if y'all had this great agreement that y'all weren't gonna uh y'all were married and y'all were gonna hook up with other people and he was very committed to you and he hooked up with somebody on the side you would not say he's a person of integrity and fidelity right and so saying we do this budget together we do it

50 50 yeah cool y'all talk about it together but y'all aren't living the y'all the reason you have a budget is because it gets you to your goals it helps you feel safe it's not just like an exercise and yeah he may be 50 50 he may do the exercise with you but he's not living it an exercise. And yeah, he may be 50-50. He may do the exercise with you, but he's not living it out. And you can't control him. All you can control is you. And so I think it's fair for you to sit down with him and tell him probably for the first time,

here's what this is doing to me. I can't breathe. I can't think of my parents and owing them money anymore. Can we please stop? And can I ask you one more question? Sure. You're like, sorry, but not sorry.

What else are you worried about? Because this is symptomatic of something bigger going on in your marriage. What is it? No, not really. Sharon not really honestly i mean we we have a great marriage we really do and this is just um this has just been i'd say the last couple months i think okay one thing i will mention that could be um holding me up a little bit is okay right now currently in the bank we do have a little pile of money that we're planning to give to mom and dad. Um, and I told him once I was like, well, couldn't we give them, if you want to save it up for like a rainy day or whatever, couldn't we give

them a little bit at a time just so I can feel that motivation that I can still feel like we're making some sort of progress. You know, I told him it doesn't have to be much. And he's like, well, he would rather do one chunk, one big chunk at a time. He's like, if I were mom and dad, I would want a big check, not multiple small ones or whatever. So what if y'all solve this problem by just asking your dad? Yeah, we could do that, I guess. Has there been any conversation with when you're going to pay this back to them? No, honestly, there hasn't. No, it was like five or six years ago when we first borrowed the money, and at that point we were like, yeah, Mom and Dad, we'll pay you back.

But there wasn't really a timeline attack. It would help your marriage. It would help your relationship with your family, and quite honestly it would help the respect between your husband and your dad, between each other, just guy to guy there. If you all created an amortization schedule, y'all created a schedule and you printed it out on an Excel spreadsheet or emailed it to each other and said, hey, by the way, we've created a payment plan here. Because I've also heard, George, I've heard of these situations where you get to the end and you're like, that's 20 grand. And then the receiver on the other end

of this money goes, no, I've only got 18.,804. You still owe me $1,600 more. So clarity here. Clarity, clarity, clarity. Let's put a budget down in front of them. Talk to your dad. Say, do you want small monthly sums or do you want every three months? And just say, hey, we're paying this off in 10 months. It's $2,000 a month.

This thing's going to be gone. And we're going to be about the business of doing that. And any extra work you're doing is going towards that debt, not just for fun money. And that is what doing a budget means as a couple. And it's going to take a hard conversation. It's going to take a better budget. I'm going to gift you one year of every dollar premium to help you guys get on that plan. Hang on the line. Austin will gift that to you. Wishing you guys the best in getting rid of this debt. Thank you. this is the ramsey show well folks most of you you're saying good riddance to last year because it was hard enough just to keep gas in your car and food in the fridge and money's still tight. A few days later, somehow in 2023, and you're wondering,

is this going to be any different this year? Well, you don't have to live through another year of stress and worry. I can tell you that much. And that's why we want you to tune in to Building Wealth in 2023, our free live stream event on January the 12th. We want to show you that you can still make progress on your goals, build wealth, and have peace with money, even in this crazy economy. During the event, you're going to hear from myself, Dave Ramsey, Rachel Cruz, John Deloney, and Ken Coleman. We're going to talk about how to set goals, how to create margin so that you can build wealth this year. We're going to have a lot of fun too, and you're going to leave fired up for 2023. And did I mention it's free? There's no reason not to sign up, even if you don't want to watch.

It's free. I like signing up for free things, John. So even if the economy feels out of control this year, you don't have to, and it's easy to register. Just go to ramseysolutions.com slash wealth. We'll get you all the information you need. That is ramseysolutions.com slash wealth. I love it, the end of these things, man.

Some of these, as we took this across the country, some of our discussions at the end of these things, man, some of these as we took this across the country, some of our discussions at the end of the night got off the rails. And so it's just fun to watch to see what's going to happen. That's part of the reason to tune in. There's no script. There's no prompter.

Nope. Just unfiltered Deloney. And versus Rachel versus Dave. That is the best part. Plus Ken, plus George. It just gets awesome. There should not be all five of us on stage, but I think they do it for the team's entertainment at this point.

Just watching the fireworks show. It's going to be a good time. Building wealth. RamseySolutions.com slash wealth is the place to sign up. Open phones at 888-825-5225. Jay's up next in Las Vegas. Jay, welcome to the show. Thanks, guys. Happy to be getting through.

Well, glad you made it. What's going on with you? I have a unique, but I think simple question for you all. I am in the military. I'm through the six steps. I'm on step seven, with the exception, I don't have a home because I am trying to save approximately 50% for it, which is what's kind of leading me to my question. So being in the military, we get what's called a housing allowance, which means basically I get to live on base, not for free, but they just take that allowance. I don't pay any electricity or water, rent. It's all included in that. So when I first got to being debt-free and getting my emergency fund set up for six months,

I put about $17,500, which is inclusive of that rent. But I'm wondering now after listening to you guys about, well, you're the one to buy when it's down, get a discount, you can buy more stock. If I should take some of that emergency fund and invest it, not because I just want more, but because my rent will always be covered. So while I technically do have close to 18 grand and six months of expenses, I'll never miss out on that housing allowance unless the military pays for some fails, which doesn't happen. Yeah. If that happens, we're all, we're all fighting our neighbor for water. So that's a whole different situation there. How much of that emergency fund

is like rent money? So approximately $1,100, $1,500, $1,200. So the way the military works is they charge you whatever the year allowance is. So it used to be $2,000. We got a $300 increase this year. So now it's $2,300 times six. So I'd say now it's close to a $1,300, $2,000. We got a $300 increase this year, so now it's $2,300 times six. So I'd say now it's close to a $1,305. Okay. And what's the time horizon to purchase a home? Realistically, sir, since I'm not going to be staying in Las Vegas, I would say six to eight years. I'm only seven years into my career, and I'd like to get back to the South. So it would not be in the next four to five years while I'm only seven years into my career and I'd like to get back to the South. So it would not be in the next four to five years while I'm in Las Vegas. Okay. So outside of the emergency

fund, how much do you have saved for this house? So I have 20,000, basically. I have two IRAs, which I don't use as a retirement. I have the 401k. Um, and then I have about $8,000, um, in a portfolio. Is that outside of retirement? Correct. Yeah. I don't count the IRA as retirement because I'm not actually using it for that. I have my own 401k with the 15% and the matching. Well, the problem is the IRS sees it as retirement. And so when you go to take that money out, they're going to just hammer you with penalties and fees. Yeah, you can't pull that out, brother. I was under the impression after five years you could pull it out.

You could pull out your contribution, but that's just unplugging all of the growth as well. And so if you put in $10 and it grew to $30, you're're not pulling out 30 without taxes and penalties and fees. So I wouldn't stop using that as your house fund and just use that for your retirement fund down the line. Okay. How much is in there? I just started out this 2022 when I got debt-free, so I have $6,000 in mine and $6,000 in my wife's. Cool. Let's just leave that there.

Let's use the IRA for retirement purposes. And if you want to invest, you can do that in that brokerage account. And I would be investing in index funds if you're going to be saving up for that house. What are you invested in now in that portfolio? I'm going to be honest with you, sir. I'm not 100% certain. It's a swap portfolio. And I answered some questions about my level of risk comfort. Okay. But you're working with a SmartVestor Pro on this? Well, it's managed by them. My hands are off.

Okay. I want your hands to be more on. I don't want them making any decisions for you. Their goal is to guide you, to educate you, to then make the decision. So number one, your homework is to figure out what that is invested in. If it's a SmartVestor Pro, the good news is he's not throwing you into single stocks and volatile investments. It's probably in some kind of index fund or mutual fund. So that's good news. And you can use that as far as the emergency fund goes. You could scale

back down to three if you've got a real stable situation, but I would go no less than three months of expenses and include that rent in there. Okay. Because your rent is only one part of your expenses. You got to think about, you know, max out of pocket with healthcare, other things, vehicles. There's a lot of other things that could go wrong that could be very costly in today's economy. And so you don't want to go down to $3,000 just because you don't have a lot of living expenses. Oh yeah, I definitely wouldn't go that low. I was thinking probably about $10,000. I think $10,000 would be my bare minimum emotionally. So if you want to go down to $10,000, throw the other $7,000 into investments, into those index funds, that would be a wise decision since you're six to eight years out. If it was anything less than $5,000, I'd get a little

squeamish putting my money into the market knowing I want to buy a house a few years from now. And that's what I'll tell you. I am, George is much, like, George is so much better at me than me. When it's all said and done,

George will have more money than me, okay? So make, make, I'm more risk averse than John. John jumps out of airplanes. Well, but George also reads, like, he's like, well, I'm going to put it into this fund. When I was saving for a house, this isn't the best ROI on my money, but I put it in

a savings account and I wanted it to be liquid and I wanted to have it and I want to be able to see it. And I didn't want there to be a chance that I put $85,000 in for a down payment. And then it was 55,000 when I needed to go buy a house. What it sounds like you're trying to do is everything all at the same time, which is save for a house and maximize returns. And this all sounds good, but you're going to make yourself crazy, especially because you're playing with, and I don't mean this pejoratively,

but you're not playing with a ton of money. And so you're causing yourself a lot of internal angst over $5,000 here or $10,000 here. $10,000 is a lot of internal angst over five thousand bucks here or ten thousand bucks here ten thousand bucks a lot of money don't get me wrong but it's not like you're i don't know where to put a million dollars in this portfolio that's going to return this much money you're talking ten thousand bucks you're talking a couple hundred dollars here that's going to turn into maybe a couple thousand over here so i for me i'm taking the anxiety out of this thing i'm taking the stress out of this thing i I'm taking the stress out of this thing. I'm just going to open up a savings account or a money market account

and put my house money in there. And by the way, if an emergency comes up that is over that $10,000 or $15,000 threshold you've set up, you could pull it out of there technically. But I'm just going to leave it there, dude, and I'm going to save my money that way. And then I'm going to have retirement accounts

that I want to grow, like George mentioned, separately. But again, I don't know there's a right or wrong way to do that like i think it's your risk tolerance and your overall like i i've got friends who love the stress they love the of all that i like the stress of running into a building that's on fire right so everyone's wired differently for what gets their what gets their heart i like the stress of trying to get a reservation at a restaurant last minute. You love that. That's my version. I just go to Arby's because I don't want to deal with it. I don't want that. But everyone's got their different levels, but that's how I would do it. Yeah. Well, Jay, thank you so much for your service, man. We're cheering

you on. You sound like you got a great head on your shoulders when it comes to this money stuff. Stay the course, but also keep your finger on the pulse of what's happening with your money. Never just put it on autopilot and don't look at it. Don't think about it. You want to make sure you know what's going on. So thanks so much for the call. That puts this hour of The Ramsey Show in the books. My thanks to my co-host, Dr. John Deloney, all the folks in the booth.

We got Austin. We got Bob, James, Zach, Andrew, you name it. They're in there keeping the show afloat. And thank you, America, for listening. We couldn't do this show without you. I'm getting emotional just thinking about it. And we'll be back real soon on The Ramsey Show. Hey, it's John Deloney, co-host of The Ramsey Show.

Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600 plus radio stations across the country. To find a station near you, go to ramseysolutions.com slash show.