The Ramsey Show - App - Should I Pause the Baby Steps? (Hour 3)

Episode Date: September 22, 2022

Dr. John Delony & Rachel Cruze discuss: Pausing paying off debt to save up for a new vehicle, Saving up moving costs instead of investing, Investing more than 15%, Working with a spouse who is gazelle intense, Credit scores.   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

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off mortgage has taken the place of the BMW as the status symbol of choice. I'm John Deloney, joined here by my good friend and best-selling author, Rachel Cruz, and we are taking your calls on money, life, work, relationships, whatever you got going on in your life. We'll walk alongside you and help you make the next right decision.

888-825-5225. It's 888-825-5225. Let's go out to Andrew in Lexington, Kentucky. What's up, Andrew? Hi, how are you all doing today? I'm good, my brother. What's up? I am currently in baby step number two, and I have a question about putting it on pause for a moment because I want to take Dave's advice and sell the truck. Awesome.

So where are you at in the debt snowball? How much do you have left? Right now, total debt is $86,640. What kind of debt is that? House, car, truck, credit cards, and school. Take your house

out. $45,000 on the house, and the rest is all the other debt. Okay. So you've got about $45,000 left just to be able to breathe a little bit. Yes, sir. Okay. Awesome. And the truck is included in the consumer debt?

Yes, ma'am. And that, so how much, when you pay that off what difference like what will you be left with well the truck's value is roughly around 25,000 nice private sale but i owe 9,000 on it so i'm wanting to be gazelle intense by selling it and that's the reason why i want to pause baby step number two to buy a daily driver to get back and forth to work to replace this vehicle. Yeah, for sure. So, yeah, when we talk about pausing the debt snowball, the one reason we'd say is if you're getting married, one would be if you're having a baby. One would be if you have to save up for something, if something at your house breaks, you know, you can pause, save up some cash to replace the water heater,

whatever it may be. And the car is another one as well. So how much do you make? How much do you make a year? 86,000 roughly. Okay. That's great. So the only thing here, Andrew, is when you're pausing to save up for a car, you're not saving up for a nice car. Do you agree? Yes, ma'am. The car I'm looking at is, it's like a little two-door Acura. Atta boy, look at that guy.

Perfect. How much is it? It's $3,000 on Marketplace right now. That's what I'm talking about. Perfect, Andrew, yes. So, yeah, so if you're asking, is it okay to pause baby step two to save up that three

grand because you're going to be selling the truck, then yep, absolutely. So real quick on the math, you're going to get 25 grand for this truck. You owe nine on it. That's going to leave you with 16 grand. You're going to buy a $3,000 car with cash, or they're asking for three, so you're going to pay $2,700 in cash for this car, and the rest, that $13,000 plus, is going to go straight to your debt? Yes, sir. It's going to pay off all the credit card debt and everything.

It should pay almost everything but maybe school and car, so it should leave me around $28,000 if I'm not mistaken. Awesome. And with your income, which is you're crushing it, you're talking six more months and you're done with this mess, right? Yes, sir. Dude, congratulations, man. That's awesome.

Way to go. So all that transaction and stuff, so what's your plan, though, to pause for like a month just to get all this settled and everything? I'd say pause for 13 seconds, right? Just for a month, yes, ma'am. And I wish it was 13 seconds, Dr. John.

But I mean, the pause should be just as long as... With the transaction with the bank, getting the money, putting the money over, buying the car, making sure the title's good. Just the groundwork. I just threw out a month. It could be two weeks. Two weeks, yeah, yeah.

The groundwork to transition. Correct, Andrew? We're on the same page, right? Yes, ma'am. Perfect. Okay. Hey, that $13,000 you have left is gonna burn a hole through your pocket get yeah get rid of it okay get rid of it on debt yes sir here's my fear about

pausing for a month is you sell your car you get 25 000 you go to the the bank and you get your title you trade all turn all that stuff over got $16,000 and it's like, this is nice. That could be a $5,000 car. Let's get a $10,000 car and all of a sudden, man, it's not quite as it

has cracked up to me. I love that you have it already picked out. That's a great tip for people listening that are in this exact same position. Find the car

and be like, this is the car so that you don't do this lifestyle creep. It's like going shopping hungry. Don't do do that it's not like this lifestyle creep of oh well there's a there's a there's a kind of a nicer one we could we could just spend two grand more and get that so yeah have it picked out yeah be focused on it andrew and that's great that's awesome i'm proud of you man i'm proud of you all right let's go to orion in san diego

california what's up orion hey how Diego, California. What's up, Orion? Hey, how's it going? Outstanding. We're up against the clock, so get right to your question for me. What's up? All right, cool. So I'm married. I have two sons, two years old and a 10-month-old.

And my wife and I, we want to move next spring up north to Washington. Okay. We're talking to lenders, and and got approved for $350,000 and I have 92 in a mutual fund and another 22 in another mutual fund and about $7,000 in savings.

So I wanted to know to use those mutual funds and put it all down on a house or, I mean, like what? I'm just looking for advice on that and that kind of stuff. Yeah, do you have any other

just liquid savings besides the $7,000 and everything else is tied up in investments? Correct. Correct, okay. Are those retirement mutual funds or are they just off to the side? They're just off to the side. One was one that my grandmother was saving up for me for a while. Then the other one started out at $100,000 from her life insurance policy that she left with me.

Okay. Do you have retirement somewhere else with something else? Yeah. So I got my 401k that I'm starting, and I have 10% in my Roth, and then 5% in that with about a 4% match on my 401k. Okay. I mean, how much for your house currently, what's your living situation? How will that change when you guys move? What do you owe in your house? How much is it worth?

Yeah, we're living with her parents. They've been gracious enough to help us out um because i kind of went belly up when i was renting so my wife could pay off all of the debt i was trying to do it all okay and she was able to become debt free so we are both debt free um monthly payments on stuff we actually have to pay or that broke up. How much is it? Talk directly on your phone. Oh, $600 a month that we actually have to pay.

Okay, so you guys have no debts. Your $7,000 is liquid with savings, I guess like for an emergency fund or something. And then you have all this other stuff. So, yeah, I mean, man. I'd cash them out. I'd cash them out, but I would, I would say keep bump up that $7,000 to a three to six months worth of expenses.

And just because you guys qualify for 350 or run, I would really encourage you just cause that's what the bank will give you. Doesn't mean that you need it. Make sure you get a 15 year fixed rate and that the mortgage payment is no more than 25% of your take home pay. Work on that formula versus what the bank, the bank will give you a bunch, but that doesn't mean you can afford it. So run those numbers very, very carefully. But yeah, you can cash out those mutual funds and use it as a down payment on probably a mortgage less than $350,000.

Probably $250,000. Yeah. Just to be conservative. You're good. And you can always move again in a few years if you want. That's right. Hey, 888-825-5225. Find out for yourself why Blinds.com is the number one online retailer of custom window covering. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use promo code RAMSEY to get the best deal. Today's question comes from John in Arizona.

I'm a strong believer in paying cash for cars and living a debt-free life, as I just paid off my student loans and officially kicked Sally Mae out of the house. Unfortunately, my father believes in financing cars and laughs at me. My gosh, sorry, John. Laughs at me when I tell him that he should pay cash. Last time I told him, he got aggressive and caused a rift in the family. How do I help my dad stop being a slave to the lender and live a debt-free life you don't john you don't yeah it's not your job to do that can i be oh my god this may be rude i don't care john you caused the riff he doesn't want to hear what you have to say he never has and my guess is he's not dumb he's just just chosen to live differently, and let him, he's your dad.

Make the choice. Either I'm just going to love my dad, and my dad's just going to say dad things, and then we're going to go about our life, or just don't be around him. But to keep bringing this up and keep bringing it up, finally he's just snapped at you. John, you're one of those, you know, passionate.

We get this in marriages. You're one of those, John. We get these in marriages where one is just like, they're not doing this, they. We get this in marriages. You're one of those, John. We get these in marriages where one is just like, they're not doing this. They're not doing it. I'm like, you're a little, like I appreciate the enthusiasm,

but like let's simmer down a little bit because you're going to lose everyone in your life. So chill. It's okay. Yeah, John, it's not your responsibility. Just take 30% off, 40% off. Man, just the SMH moments with parents just shake my head. You just kind of grin.

You just emojied in the real world. You just, just have that, John. You're good. Let it go. Let it go. And by the way, parents, when your kids are zealous and they come to you with their excitement and their joy about their whatever, whether it's

dragons or potions or unicorns or when they grow up and they come to you with fancy solutions be kind just be kind just go with it go with it go with it there's no reason to get aggressive and cause rifts just go with it life is too short and on a serious note i've just i can't rachel i can't get out of my head the number of people i've sat with that either their parents just died or their kids just it is they have never been like you know what i'm really glad i put my foot down about i borrow money i borrowed money to buy cars that's never ever come up yeah they always i wish i could have this conversation back i wish i could just have five more minutes so i wish i got five more minutes so take all the could have five more minutes.

So take all the minutes you got while you got them and don't fight over dumb things. Anyway, that's it. That's all I have to say about that. Good job, Sean. All right, let's go to Dan. Dan. Let's go to Dan in Boston. What's up, Dan?

Hey, you guys. Thanks for taking my call. I appreciate it. You got it, Dan. Thanks for calling. What's up? In our 60s, wife and I, we just finished Baby Step 2 in March and are now in Baby Step 3.

We're packing money away for six months of our emergency fund. Awesome. Congrats, man. Thank you. Thank you so much. But the question is, I know in Baby Step 4, it's 15% and then throw the rest of the money to the house. But we're in our 60s. We only have $130,000 in a 401k.

We're allowed to do a catch-up, I guess. And can we max out? If we were to max out my 401k, it'd be like, what I'm allowed to do is like 22% of my salary instead of the 15%. And my company's awesome, does a 9% match. Can we go with the 22%? Or should we keep it at 15?

And then all the extra money go towards the house. Yeah, at your age, I would go ahead and do the 22%. So once you can kind of hit that rate where you guys are at, I would be investing more. And then you can throw the rest at the house. But I would, yeah, catch up as much as you can to retirement because you guys are getting there.

Do you have like the age that you really want to retire? Do you have that magical age? Right now? You wish you could? I'm 162. That isn't going to work. How much do you own your house, man? My house is worth around... It's over six and we owe 204. Okay.

If we can put $27,000 a year in a 401k, my company matches 9% of my salary. So that's, you know, if we could do that for seven years, that's a chunk of change. Yeah, and it'll, at the rates, the historic rates, it will double about every seven, seven and a half years on you. I also would love to see y'all get rid of that last lingering liability, which is your mortgage as you head into retirement years. What is your current income? Both of us combined about 140.

Oh, fantastic. Okay. So you could max this out and if y'all went after it for a couple of years, you could max out your 401 and knock this house out too. It would be hard. Of course it would. Dan, nothing's fun when you're trying to cross the finish line, right? Yep. But yeah, it would be really tough. But man, I'd love to,

just imagine yourself 65. You own your house. You're half a million dollar house outright. You're on your way to building retirement and now you're having different conversations because you have no liabilities, right? You just got a tax

and insurance bill at that point. Right. Right. Yeah, I put you in a different position. My wife is pushing to go to 15% and just throw it all at the house to get it paid off. Uh, if you, if you guys weren't at this age, then yes, I would agree with her. Yeah. It's an age thing at this point. And when

you're able to kind of do the catch up on all the retirement stuff, I would take advantage of that. Okay. Cool. Congratulations, man. Hey, can I, can i tell you like you're inspiring man um thank you not like the one of the the most common things i hear is i'm too young to do this or i'm 55 and it's it's all over for me i can't start anything new and so to see somebody at 62 saying no no i've been grinding i've got this done, and now I'm going to the next step. That's awesome, dude. Yeah, it was kind of scary because we finally got my wife's niece did this crazy thing. They got into a cult, and they started paying everything off and getting second jobs and selling the car. And next thing you know, she's working for the cult down in Tennessee.

Oh, is she here? Is she a team member you know, she's working for the cult down in Tennessee. Oh, is she here? Is she a team member? Oh, she is. So fun. I thought you meant a legitimate cult at first. I was like, wait. This is a legitimate cult. What are you talking about? Feel free to leave.

Dan, I'm not free to leave, man. Help, man. Help. SOS from John Del man. Help, man. Help. SOS from John Deloney. Help, Dan. They had a really nice car and a crappy car, and they sold a nice car because they had money on it, and they went down to one car and carpooling to work. But as you got to listen to their story,

you probably heard them smiling a little bit more and laughing a little bit deeper. Yep. Yeah. Yeah. Her name's Ashley. She works for you guys. So fun. Her parents started doing it.

And then we started looking at this. I'm like, you know, we need to get out of debt. Oh, I love it. And it's crazy. As soon as we paid off our credit card, uh, we always had credit card debt. As soon as we cut it up, paid it off, I lost my job. Wow. Wow. Dang. So now we're in like, you know, crush mode and it just, and make a long story short, 26 months, $89,000, gone.

Unbelievable, brother. I can't tell you how awesome it is. And we've had a well go. We had a roof go. And appliances go. Our house is 20 years old. But we paid cash. That's amazing.

How does that feel? People listening right now, Dan? It's awesome. It's amazing. How does that feel? People listening right now, Dan? It's awesome. It's awesome. It's just, I can't tell you how great it is. Way to go, Dan. Great job. You guys are inspiring.

Appreciate it. Thank you, my brother. It's never too late. All you have to say is, I'm going to make this happen. And then you've got to go do it. You've got to go do it. We'll be right back. Thank you. This is the Ramsey Show, 888-825-5225. If you're looking to sell your house right now, it can be overwhelming.

In some markets, homes are selling so fast and for more than they're asking price and other markets are showing signs of slowing down it's just a mess and it's a lot to navigate but look you don't have to sell your home alone and you know what you shouldn't it's important to have a real estate agent who knows your local housing market inside and out and who will walk you through the process. You need an indoors local provider by your side. Our ELPs are Ramsey trusted, which means they're highly vetted top tier real estate agents. Our team trusts. These are pros who are excited to serve you and help you sell your home at the right price. If you're ready to sell your home, get a Ramsey Trusted ELP in your corner. It's free to connect today. Just go to ramseysolutions.com slash agent to find one near you. That's ramseysolutions.com slash agent. All right, let's go to Carol in

the beautiful Mesa, Arizona. What's up, Carol? Hi, Good afternoon, you two. Thanks for taking my call. You got it. What's up? So my husband and I have just started taking financial peace after 20 years of waiting for him to get on board. He's right here with me, and he is so gung-ho. He is ready to get rid of our second car. We have our second class tonight, and there's a lot of reasons that getting rid of the second car would be good,

but it just seems like a really fast, big thing to do before we have everything under our feet yet. Fast? You've been waiting for 20 years for this. Yeah, they've only been to one class, though. I've been waiting for 20. Oh, so he's in. He's that kid that sits on the side of the pool and waits and waits and waits and then drops the ultimate cannonball, right? Clearly, yes.

What's your financial position? How much do you all owe? How much do you make? All that stuff. Okay, so we owe, I'm going to ballpark it because I've been looking at it, probably about at least $150,000. It's a combination of cars, credit cards, IRS debt. We also bring home, I'd say we're in the neighborhood of $100,000 a year, maybe a little bit more.

He's a home health nurse, so he has the potential to make additional money. And that's kind of where we are. How much do you owe the IRS? Oh, I really don't want to say it. It's very embarrassing. Hey, we are way past that. What is it? We've heard it all, Carol. We've heard it all. I'm going to ballpark $100,000. No, that's too high. At least $70,000, maybe more. Okay. We'll say $75,000 to be safe, just to round it up.

How much of the second car is he going to sell? I asked that in a wonky way. How much money are you going to walk away from selling that second car? We would probably have to come up with an additional $700 to pay it off, maybe $800. So you're upside down on the car? Yes. Okay. What's your payment every month?

What would you net the next month? It would be $5. It's like $525 a month. Okay. And then the other car, how much do you owe on the other car? We owe more. That one we owe probably an additional $10,000. I mean, like left is left.

Does that make sense? We've paid a lot, but we owe like, wait a minute, I didn't give you the right number. We've paid a lot, but we owe probably in the 20s at least. So you owe $20,000, and how much can you sell that car for? Not as much as the first car. How much? If you Kelly Blue Booked it right now, how much could you sell that car for?

I would literally have to Kelly Blue Book it. I'm so sorry. No, you're fine. No, no, you're fine. I would run some numbers because if there's any time to sell cars, it's right now in this market. It's getting, you know, the market is shifting where it's not becoming as wonderful to sell used cars.

But right now they're still high. So I would look, honestly, Carol, at selling both and getting two beaters is what you guys can do. Now you're going to owe some money. So you're going to have to take out a small loan on the difference. But at least you just don't have that massive, two massive car payments every month. That's going to free you guys up. So I would, because, and Carol too, because I'm looking at your numbers.

You guys make a hundred. You owe 150,000, which I know a big part of that is IRS. But you guys got to just do some radical stuff. You've been waiting 20 years. He's been five minutes into this plan. He's ready to do it. Like just go scorched earth. I feel like you guys need a radical shakeup.

So if I were you guys, I would sell everything. I would sell everything. I would sell the cars. I would look around your house. Sell him. I would scrap you. Sell him. The crazy thing is we just downsized last year and got rid of everything that we would have sold.

Well, that's fine. That's fine. Okay. And then he needs to pick up extra work. I mean, there, there has to be a radical change here, Carol, because even though you've had this feeling for 20 years, you guys have been in the same habits and the same decision-making mindset for 20 years. So to change that, that's kind of like moving the Titanic. I mean, it's not like you guys are 25 and you're starting everything out. You're having to for decades of what you've known is about to be uprooted. And I really, I mean, I would go extreme, Carol, just to

shake it up in your spirits, just to say we're doing this. Like, we're doing it. Because here's the deal too, Carol. It's a little scary. But it's also scary to be $150,000 in debt making $100,000. That's scary.

So here's the deal. It's stuff, okay? And that's what I want you to remember. This is all just stuff. You can go back and get you some stuff. We're not against stuff. We actually would love for you guys in a few years to buy awesome cars. Call us back and be like, look, we're debt-free and have awesome cars.

That's great. That's what we want for you. But for right now, Carol, you guys need this. You need a massive shakeup. So I'd be selling everything and then cleaning up the IRS debt first. That IRS debt really, I don't like it. Makes me super uncomfortable.

Y'all need to go scorched earth to get rid of that one. I'm talking, he needs to work seven days a week and get rid of that one. Yeah, you move that to the front. Yes. And that's a big one and it's going to be a pain to pay Yeah, you move that to the front. Yes. And that's a big one, and it's going to be a pain to pay off because you're going to drop $10,000. You're going to just collapse and have $10,000. It's still going to have $60,000 left to go on it.

I don't care. You've got to keep grinding your way at that one. Because they can start garnishing wages. I mean, this is serious. Yes. That's the only type of debt we say to move up on the debt snowball is IRS debt. So you guys got to clean that up. And it's going to help with getting these car payments out that you won't have the car payments.

You're going to free up some cash and you're going to be able to feel the snowball rolling with both of you working. Carol, can I ask you a hard question? Okay. Maybe. Oh, I'm going to. You can just hang up on me. How about that? And listen, I may be wrong here, okay?

Are you somebody that likes the idea of things but doesn't like the actual execution of them? Are you somebody who Googles workout programs but working out is not fun? No, I just don't work out. Here's what I'm asking. I'm wondering if part of your husband's hesitation over 20 years is part he's a knucklehead, just like I am, but part he knows, oh, geez, we're going to go do this thing and we're going to get into it and Carol's not going to want to go all the way through with it.

Well, no, I really do because I do see that we absolutely have to make some changes to get to where we want to be. We are both on the same page finally. Awesome. Yeah. So I guess I just need to feel the fear and do it anyway. Yes. Yeah. What scares you about it?

When we said sell both cars and get two junkers, when you said, oh, that's so scary, what is scary about that? So we've been trying to practice being a single-car family this week before we actually pull the trigger. And so far, so good. We've done two days. But today, I have a commitment. I have to leave very soon to go take care of this issue with one of my clients.

And we opted to go ahead and do two cars today instead of stick to the one and figure out how to make that work with one car. If you've got mobile clients and he's a travel nurse, I don't see a way you can do one car. Yeah, y'all may not be a one-car family. So do two, two crappy cars. Sell them both and buy two $5,000 cars. Okay.

And you're going to want to park three houses down from your actual client's house because that's how embarrassing to me about the car and who cares let that be a motivator for you to grind and grind and grind rachel said it you said it so good rachel it is scorched earth time it is shake the snow globe it's do every no don't shake the snow globe throw it up against the side of the house and blow it off you got to do everything different because the same normal has gotten you to this point. And to do the same and normal moving forward, you're going to stay in the same place. Blow it all up.

Get radical with it. You can do it. Congratulations. Thank you. today's scripture of the day is Colossians 3 17 and whatever you do whether in word or deed do it all in the name of Lord Jesus, giving him thanks to God the Father through him. Hunter Patch Adams says, I dove into an endless sea of gratitude from which I've never emerged. Can I say like a probably semi-dumb comment here on the radio show, the podcast? I like how you're asking for permission.

I didn't know Patch Adams. I didn't know Pat Chatham so I didn't know that was a true story the movie really yeah yeah

I don't think I knew that there's this cool thing right when it starts it says based on a true story yeah that was a conspiracy theory it's been years

since I've seen that movie and the only quote she believes stories are true that aren't true and ones that are true that's exactly right the doctors come out and say hey this is what we need to do to all be healthy and she's like whatever since I've seen that movie. She believes stories are true that aren't true and ones that are true. That's exactly right. The doctors come out and say,

hey, this is what we need to do to all be healthy. And she's like, whatever. And then a movie comes out, it's like based on a true story. And she's like, whatever. Whatever. Good job. No, I didn't know that.

I just have a quote from that movie. It's the only quote that I know from that movie. And the old lady was like, I just want to swim in a big pool of noodles. Do you remember that? Nope. It's like they ask like what your dream is and they send the old lady and she swims in a big pool of noodles. Do you remember that? Nope. It's like they ask like what your dream is and they send the old lady and she swims in a big pool of noodles.

It's great. But anyways, never knew. Never knew. True story though. We are changing lives, America. We are changing lives. Patch Adams. All right.

On that note, pickups, huh? Pick them up. Let's go to Phillips in Dayton. What's up, Phillips? Hello. How are you? I'm excellent. How are you? Good, good. Thank you for taking my call. You got it. So right now my wife and I are on baby step

two and we're in the process of getting out of debt by next year. We'll be out of debt next year. So we're having a lot more discussion on getting a house once we complete Baby Step 3. Well, right now we just can't seem to agree on the idea of a credit score and essentially how it impacts your interest rate and thus your monthly payment and things like that. So I wanted to call you guys to get your take on it. I know obviously what you guys believe about credit scores, but we seem to be in disagreement on the value of building credit scores towards, you know, getting a lower interest rate and whatnot for our home when that comes. Yeah, I mean, it kind of, honestly, I've heard all over

the map, depending on what, whether you go through a credit union, mortgage company, all of it, what kind of rate that they give you without a credit score when they do manual underwriting some we've heard that it can be a little bit higher uh some we've heard it's the same and so it really is going to depend when you guys pull those numbers when you get close to it but as you guys are getting out of debt it's still there's a um a mental shift there that when you say i'm not gonna live with debt and you go through baby step two you pay off all of your debt uh naturally your credit score is going to lower so you guys will be using manual underwriting at some point because you are not interacting with debt if that's what you choose to do um but let me say this um i, Sheila and I had no debt.

And as a part of my, I rented my home from the university where I worked. Yeah. And then when I went and bought a house, we haven't had debt for years. We had no problem. And so I, I,

I didn't have it personally experienced that. Right. Not having a big issue, not having a good relationship with debt, not like, yeah. And it wasn't like I was making a billion dollars or anything like that. Sure, sure. It was just, I just didn't run into the problem. And so I know there are people who sit down with their mortgage lender and walk away and want to point at this or point at that thing. If you're in good shape financially and you've got a good down payment and you

sit down and you're buying a reasonable house. And if you have to go through the manual underwriting process, you have to, but I just, I just, I went through it recently and it just didn't, well, it wasn't the end of time.

Yeah. Phillips, have you actually sat down with a mortgage lender yet? No, we haven't. I mean, well, we,

we've talked to one just kind of briefly to kind of because essentially her credit technically is better than mine because right now um mine was just lower so they just they told us the difference of what the manual underwriting process would be you know and how they would kind of base it off of mine uh because it's technically lower right now um it's not yet at that zero point that you guys talk about yet. Was that, did you go through Churchill? Yeah, Churchill, yes. Okay. And so they said the manual underwriting would be a little bit higher?

Well, no, they didn't say that. They didn't say like what the actual payment would be, and that's why I was calling. Okay. Yeah. I would sit down and say, hey, we're ready to get this process started. And let me put it this way. My wife and I have spent a lot of energy having hypothetical arguments that once we just got real numbers to real things, it settled the argument in an embarrassing way. So I would call and get some true data and say, all right, let's assume we're pulling the trigger here. What is this actually going to look like? And what are the dollars and cents of this? Yeah. And honestly, Phillips, where you guys are, you're still getting out of debt. You still want to save up an emergency

fund and you still want to save up down payment. You guys still could be 18, 24, however, months out. And even the Fed just raised the rate yesterday. So I mean, like things are just constantly changing in that world anyways. So, so I, yeah, I yeah i mean i would if you want to do exactly what john said i think that's great just to get the conversation going don't do what i said no no i think it's okay if you do but but just know life could look a whole lot different when you're actually ready to purchase a home so just remember that um because again i think we can get stuck in what today is and it that may not be the case. Who the heck knows what 24 months is going to mean? In my world, the mental health world, the nutrition and exercise space,

this sounds like one of those worlds where people are arguing over macro percentages. Like how many grams of protein? How much this and how much that? And they don't exercise, right? Like you miss the big thing and you start fighting over these little things. The big thing in Phillip's home right now is, let's get out of debt. Yes.

Like that's the big, that's the thing we can do right now. Arguing about something that's 24, 36 months, it's just bringing chaos into our home that is unnecessary at this moment. Totally. And then, and kind of, I was going to make the point earlier

and didn't really finish it in my head, but just this idea that, you know, when you guys kind of like, are like, oh, do we, do we kind of keep a better credit score here? Kind of still play the game here just to get the credit score because we went to hell. Like all of that back and forth, honestly, it's not worth it. Like just saying, we're going to be sticking to one plan. We're going to focus on this and go all the way through knowing that we can still get a house at the end of it.

There's just something that does in your behavior and in your spirit when you commit to something versus this like back and forth, back and forth play. And when somebody tells me it's going to cost you a quarter of a percentage point, if I'm in a financial position where that prohibits me from buying the house, I shouldn't be buying the house, right?

So yeah, good call. Go all in, man. Go all in and save that argument or that frustration or that disagreement in your home for A, something that matters, and B, something that when it's time relevant, right? All right, let's take one more call. Let's run to Jason in Atlanta. Jason, we are way up against the clock, so get just started listening to you guys recently and my wife and I are just trying to figure out the best way to do baby step number two, which is tackling our debt. And we feel like maybe our biggest obstacle is living in the house that we're living in now. We just recently bought this house. Um, it's within the 25% range of our take home pay. Um, but we were just wondering if we need to sell the house and downsize to kind of remove what we think is the biggest obstacle to paying our debt. Um,

how much do you owe? I can answer the question. How much do you owe? Um, Oh gosh. Uh, let's see. $401,000 dollars are you a doctor uh we are both nurse practitioners okay how much y'all bring in a year uh 170 okay each or combined uh combined why Uh, combined. Why? Why? Yeah. Um, what do you mean? Um, my, I've just got a limited number of friends that are MPs out in the community and they're both doing, uh, they're, they're, they're, that's about a salary for one of

them. Gotcha. So she's starting out. So she's, this is her first year out of school, and I'm in a ministry position where we serve the people who are underinsured. So I'm going to tell you something really hard, Jason, and I'm a person who believes deeply in service and my family, very similar. You can't afford to do that yet. You've put yourself in such a hole that you're going to have to put your ministry on on pause and you're gonna have to go earn a whole bunch of money to

clean this because i'm gonna assume if it's a lot of student loan debt to get those degrees you guys have a lot of debt so probably 200 grand yes yeah that it that it may not be may not be worth living in even though you're in the 25 you could probably stay it's not in your whole budget but hey uh you could sell it get out of debt i'm so sorry to be that one, but yeah, you got to get after it. I want to thank the great Bob Orquez for loving us and taking care of us. And Austin. And James. This has been The Ramsey Show.

Hey, it's Rachel Cruz, co-host on The Ramsey Show. If you want to do your debt-free scream live on the show, visit ramsaysolutions.com slash debt-free scream. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com slash debt-free scream.