The Ramsey Show - App - Should I Start a Business While in Baby Step 2? (Hour 3)

Episode Date: February 19, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Becky starts off this hour in Boise, Idaho. Hi, Becky. How are you? I'm doing all right. Thank you. Good. How can I help? So I have kind of an ugly situation. I've been married 18 years.

We have six kids ages 1 to 15. And my husband's been cheating on me for years, and we're going to get divorced now. And so we're trying to figure out how to do this. And we moved to a new location for him to take a new job, but it paid less money, but it was less stressful for him. And he's got lots of issues and, you know, semi-suicidal frequently and whatnot because of all of these issues. So he let me take the equity from our previous house, or we put it into this new house that we bought. The house cost $200,000. We put $100,000 down on it.

So my mortgage will be pretty reasonable, which he did that on purpose. We were going to see if we could make the marriage work, but he just can't stop what he's doing. So, um, but that leaves him with nothing. Um, we did have some savings, but then needed to buy a car or a van to replace another one. And so we pretty much don't have any savings now, I mean, other than a couple of thousand dollars. And he, I can't seem to get rid of him now. You know, he's, so I'm wondering, my question is. You can't seem to get rid of him?

Well, he needs to move out because you know it's just not right for him yeah he does you know what he's doing and the kids kind of see it and whatnot so what is his what is his income about 85 000 and what's your income none i'm i'm home with the kids i've been home with the kids for 14 years or so so i don't have an income so i'm just going to be living on child support to start, and I want to go back to school and get a master's degree so I can support myself in a couple of years. Why do you have to have a master's degree to support yourself?

Well, for what I'd like to do, I'd like to go into mental health counseling, so I'd need that to do that. Mm-hmm. health counseling. Um, so I'd need that to do that. So in the meantime, he, he sleeps outside in our RV so he can have his privacy and whatnot. But, um, well, I'm wondering if we should take out a loan so that he can, he just won't leave. I think he's trying to find someone he can move in with or something,

but so that he can buy, put some money down. He's a veteran, so we have a VA loan on this house, and I don't think he can get another VA loan to buy himself a home. Other than his ability to pay child support, this is the father of eight children who chooses to continue, six children, who chooses to continue to have affairs after 18 years of marriage. My concern for him at this point in this conversation is almost zero. I don't care what he does other than pay you a big boatload of child support

and get out of there. I mean, I'm over him right right now and i don't know him um so um you know he can't quit yeah he can quit he just won't so you need to change your words but um anyway yeah he needs to get it's if it's done it's done i'm not a family counselor but this is ridiculous so uh but here's the thing i don't think you can make it on child support and i don't think you have the option with six kids run around 1 to 15 to go back and accentuate your education you're going to be working kiddo what's your what's your undergrad in you don't get the chance yeah you don't get that you're going to be a nutritionist. I mean, you're going to be making up some money to feed this family.

Because let me just help you with this. Bubba's not reliable. He's not reliable. Have you not noticed? Well, I mean, he's always provided, and his plan with letting me have, his plan is to let me have all the equity in the house. You have the equity in the house. That's fine. But the equity in the house is worth let me have all the equity in the house you have the equity in the house that's fine but the equity in the house is worth nothing right now if you stay

in the house if you sell the house and go rent you have a hundred thousand dollars in your pocket with six kids that's gone in about 20 minutes right so i intend to stay here and my plan has been to to slowly get into the workforce and, but by the time I pay for babysitters for the two that are home, I think that would suck most of it up. So I'm thinking if I went to school so I could make a decent wage. I would like for you to make a decent wage, but you have a degree in nutrition. That's a decent wage. It's so long ago I couldn't just become a dietician.

I'd have to go retake all the classes and then do an internship for a year and whatnot. So that's kind of, that boat has sailed. Well, I mean, here's the thing. I don't think you have the luxury with what you're describing to me to spend the next two years in school. You're going to be working while you're doing that because you're going to be short of money, kiddo. I mean, you're counting on this guy to pay child support? I hope he does. The law says he should.

Morally, he should. I get all of that, but morally, he shouldn't be sleeping around with his wife. So morals don't enter into his equation. And, yeah, he's been reliable so far, but that's until he gets a girlfriend, and she says for him not to send the money over there. And, you know, so you've got to have a game plan here for your career. And, yes, you need to see an attorney. And, yes, the attorney needs to explain to him he needs to move. If you're going through a divorce, that's what needs to happen.

Or you go back to marriage counseling and, you know and he learns to stay at home, and you forgive him, and that's what you all do, if that's what you're able to do. But it sounds to me like the way you're describing this is it's over, and he's just such a weak character that he can't seem to even wander off. But that's what you're describing. Lisa is on the line. Lisa's in San Diego. Hi, Lisa.

How can I help? Hi, there. Thank you so much for taking my call. Sure. What's up? I have a question. I'm helping my mom with finances. She's 79 years old.

She is debt-free and has about $300,000. Good. And a nice car already. I can't remember if it's a 2011 or 2014 Honda. She drives very little, although it's a nice car. Okay. She's like, I want to enjoy life. I like new cars. I would like to buy a new car. Okay. I can get maybe $15,000 out of the current car that I have. And then I'd like to buy another new car. Maybe all in all, put another $15,000 into it with the trade-in or with selling the old car. Okay.

What do you think? I don't think you can keep her from doing it. She's 79. Is it a wise thing to do to buy a brand-new car when you do not have a million-dollar net worth? No, it is not a wise thing to do to buy a brand new car when you do not have a million dollar net worth? No, it is not a wise thing to do. Because they go down in value like a rock. Plus, this woman's not driving this car. But you told me.

Well, she is. Just a little bit. Yeah, but I'm saying a little bit. It's just, you know, if you want to do it, it's not going to break her, obviously. If she wants to do it, it's not going to break her. But I can't tell you I would do that. But, you know, $15,000 out of $300,000, she's still got plenty of money left. She could take that out in the backyard and burn it and still be okay.

You know, which is basically what she's doing. As long as you're okay with that. You might take a $100 bill and light it on fire over the kitchen table and see how she feels about that. This is the Daveave ramsey show listen there are some basic things that you should be doing to take care of your family a roof over their head food to eat even if it's rice and beans, a car to get you from A to B, and term life insurance. Term life insurance is an immediate need no matter where you are in the baby steps since your family is at no greater risk than when you're in debt.

That's why I tell you to get 10 to 12 times your income in coverage to replace those lost dollars and do it with a 15 or a 20-year guaranteed level term plan so you can make sure your family is protected long-term. The only place I send you is to Zander Insurance. They shop all the top insurance companies, and they're committed to serving you. That's why I use them and why I've recommended them for over 20 years. Whether you prefer to work online or you need personalized assistance, you pick your path.

Go to Zander.com or call 800-356-4282 please please get this done it is an absolute necessity Jeffrey is in Dallas. Welcome to the Dave Ramsey Show. Jeffrey, how are you? I'm wonderful, sir. How are you? Better than I deserve. What's up?

Yes, sir. I just wanted to know, if it was okay to start a business during the seven-step process? Start a business when? During the seven-step process, the baby steps, I'm sorry. During the baby steps, sure. Yes, sir.

Depends on what you're doing and what it's going to cost and at what point in the baby steps you're doing it. What baby step are you on? Right now I'm doing a pin-off debt. So you're in baby step two, working your debt snowball. How much debt have you got? Well, right now I have about, between me and my wife, it's about $20,000. Okay. And what is your current household income?

I bring in about $4,000 a month. That's about... $48,000 a year. That's your take-home pay, so you're probably making $60,000 a year, give or take, $60,000, $65,000 a year. Okay, good. And what kind of a business are you talking about starting? It's a landscaping company. Okay, and what will it cost you to do that? Well, I'm going to start off real, real small, so it'll probably range about $500 to kind of get the equipment. And then, of course, a cash truck, which would be probably about a good $2,000. Okay.

So you're talking about spending $7,000. Is that what you said? $5,000 plus a truck? No, no, no, no, no. To get the equipment, it would be about $500. Oh, $500. Okay. Yeah, $500. And then to get a truck, it would be about $500. Oh, $500. Okay. Yeah, $500.

And then to get a truck, it would be about $2,000, so about $2,500. Okay. All right. And what kind of equipment are you talking about getting? Like I said, it's going to be something simple, basic, just a lawnmower. We need a blower, the little small miscellaneous stuff like the gas cans. What kind of cars are you all driving? I'm glad you asked that.

I'm actually driving a 2015 Toyota Corolla, which is not technically my car. It's my uncle's car. He gave it to me so I can drive for Uber. Mm-hmm. Okay. And do you own any cars? No, I don't. But I will be here pretty soon, in about a couple weeks. I'm going to be, which I want to try to see if I want to get rid of this car and then get a cash car.

But I'm trying to figure out how to do that. Mm-hmm. Okay. Are you married? Yes, I am. And what does how to do that. Mm-hmm. Okay. Are you married? Yes, I am. And what does she drive? Uh, she doesn't drive anything. Okay.

So you have one borrowed car right now. Mm-hmm. Okay. All right. Uh, yeah, I probably would. I think you can make that money back really, really fast. Um, I would try to probably do a fifteen hundred dollar truck and so we got a total budget of two thousand how quick can you make two thousand

dollars cutting grass uh well i'm pretty good in selling so i can if i go out there for a whole month i can yeah i can pretty much earn about two thousand in a month yeah in a month okay and everything after that's going to be gravy to help you get out of the other debt and help you get some of the cars purchased and so forth. Yeah, I like your plan. I would do that. A lot of hustle, a lot of sweat involved. I would do it.

Okay. Not a problem. Just keep it. Listen, don't get out of control now. Don't call me up and say I spent $5,000. No, it's not going to be that. Okay. And you're going to do it all in cash right oh absolutely

very cool good job man well done open phones at 888-825-5225 alicia is with us in dallas hi alicia how are you hi i'm good how are you better than deserve. What's up in your world? Good. Well, I have a question. Thank you very much for taking my call. I have been struggling with figuring out if I should end my apartment lease early and just buy out the lease, or if I should stay and just kind of ride it out because I just got another cash card, and it needs some work too. So I'm trying to figure out which one is better. Plus I have student loans that I need to pay off.

So I'm trying to get. How much is your rent? My rent is $9.85. Where would you move? Just kind of down the street a little bit. What would be your rent there? It would be $875. So it's $100 a month savings.

What's your income? Right now, well, I make $40,000, but I'm on disability, so I'm trying to figure out, well, I'm not getting paid right now. You're not getting paid anything? Not right now. Yeah, I was on workers' comp, and then they ended that, and so my disability has been kicked in, and I'm not sure what's happening with that either.

Okay. How are you eating? I just have a little bit of cash that I'm using to get by, but it won't be for long. So that's what I'm trying to figure out what to do. Yeah, okay. Well, you're going to obviously have to get an income coming in. Are you okay physically? Physically, yes, I'm okay.

The issue is with my hands, and I do tech support, so I type a lot. So a carpal tunnel or something like that? Yeah. Okay. So you can't do that. What can you do to earn some money? Well, I am thinking about maybe going to do tech support in a retail space, so that way maybe the typing will be less and i can still

make good money i'm thinking about okay well what are you going to do by friday to make money because you're out you don't have any money yes i honestly i don't know i'm just selling stuff in my house to get rid of stuff. I think we need an income plan that you, as a short-term thing, I don't care if you're delivering pizzas, waiting tables, babysitting kids, I don't care what you're doing, you need some short-term money starting right now while you get your career, your big career, shifted around into something that you're able to do and you get this disability settlement done okay yeah because i don't want this to you know you're going to reach a point if you don't

have a plan that stuff is gone and money is gone and you're on the street and it's not because it's not because of a 900 rent versus an 800 rent it's because there's zero income yeah yeah no i would not move i would not move. I would not. I don't think the savings here is a big enough thing to help you. I think the, uh, in the two rents, uh,

unless there's something else wrong in this situation, I would stay because I think you've got to address the other side of the equation and that's the income side of the equation. And that's where you're just, you know, in panic mode right now. That's what you're facing. So you have really, really, really got to turn that around.

So thank you for the call. Stephen is with us in Newport News, Virginia. Hi, Stephen. Welcome to the Dave Ramsey Show. Hi, sir. How are you? Better than I deserve. How can I help?

So I have a question. I currently contribute to my TSP, and I'm doing the 15%. However, when I did the math, I could max out a Roth IRA within an annual year and still contribute to the TSP in order to meet that minimum for matching. Does it make sense to split it up, or does compound interest work better for me? Compound interest is the same either way. When you're putting in 15% of your income, whatever dollar amount that is, if it's in two different categories, it doesn't matter.

If they're growing at the same interest rate, you'll end up with the exact same amount that, if they're growing at the same rate of return, you'll end up with the exact same amount you would have ended up if it was all in one category. So that part doesn't matter. What does matter is that you can find mutual funds that will outperform the C, the S, and the I inside the Thrift Savings Plan, which is how we recommend you distribute primarily C, like 80% C, 10% S, 10% I. But that mix right there can be beat with good mutual funds with your regular Roth out there.

And so, yeah, I'm going to do the regular Roth. Make sure you do your TSP up to the match, then do a regular Roth. If you need to do a little bit more than that, then you can go beyond the match a little bit in the TSP. And in the TSP, pick the Roth option as well. You've got the Roth option there. So that's the direction I would go. Good question.

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Hey, guys, how are you? Good. Good. How are you? Better than I deserve. Welcome. Where do you guys live? Somerville, Alabama.

Oh, just over the line, just south of here. Yes, sir. Very cool. Welcome to Nashville. And up here to do a debt-free scream, huh? Yes, sir. Love it. How much have you paid off? $63, sir. Very cool. Welcome to Nashville. And up here to do a debt-free scream, huh? Yes, sir. Love it. How much have you paid off?

$63,000. All right. How long did that take you? Ten months. Good for you. And your range of income during that time? $62,000 to $82,000. Okay, cool.

What kind of debt was the $63,000? A little bit of everything. We had a van. We had van payment, car payment, truck payment. We had credit cards. John Deere lawnmower. Yeah. How much did you owe on the lawnmower?

That's embarrassing. $8,000. What did you owe on the cheapest car? Probably about $7,800. You owed more on your lawn more than your car let's see that is embarrassing i love it it's a great tractor though it's a great tractor i love it fun good for you so what happened 10 months ago that got you on this get out of debt journey we uh bought a brand new van and when we got home i'm like we have three car payments and one of them was it was just stupid we have three car payments three cars and two of us that drive and a John Deere payment. Oh, my gosh. And so that kind of freaked you out? Yes, sir.

Okay. Then what happened? Well, we started just kind of YouTubing some of your stuff. And then I guess a couple months in, we finally ordered some of your program and your daughter's book, Live Your Life Not Theirs. And we finally sold the van, the brand-new one. The brand-new one, okay. And the truck. Whoa, sold two of them.

Now he's driving the John Deere. Well, we bought me a cheap van. Okay, good. So what did the van sell for? $22,000. What did the truck sell for? About $7,300. Was it $7,300? $7,000. What'd the truck sell for? About $73,000. Was it $73,000?

$7,300. Okay, so that's like $30,000 of the $63,000 is boom, just those two cars gone, right? Yeah, and then we just got on fire. Okay. If we were going to drive junk, we might as well. If we're going to live like nobody else, we've got to get out of debt so we can live like nobody else later, right? Yes, sir. Okay, cool.

So what do you tell people the key to getting out of debt is now that you've done it? You just have to not care what other people think and know that you're doing this now for you to have something better in the future. Got it. Did you keep the John Deere? Oh, yeah. Oh, yeah, of course. All right, good.

Good man. Good man. All right, good deal. So what do you tell people, Phillip, the key to getting out of debt is? Working together, you know, contentment. And that's a big struggle point for me especially. So tell me the conversation, what it's like sitting at the kitchen table. You two are sitting there talking.

You're kind of in freak-out mode. And when does it come up? Who brought it up that we have to sell the new van? She did. She did. She did. What did you say? I wanted to keep it. Okay.

I wanted to keep it. I told her we would just treat it like a house payment and pay it off over time, you know. Mm-hmm. But she wanted to buy, she wanted to get out of debt so bad, she wanted to sell it and my truck. Mm-hmm. To get out of debt. Yeah, so not only did you do you lost two battles that night got your truck sold too right but it worked out good because the van that we bought when we sold those two was still worth less than worth less than my john deere so it kind

of worked out we've got to keep our priorities straight here it was terrible it's so fun you guys are a blast that's fun so um what was the hardest part of the last 10 months for you all i guess seeing people with brand new vehicles and stuff especially at at Christmas time. Everybody got one, it seemed like. And just knowing that it's just what we did for our family. That made you, that gave you a reason to get through it then. Yeah. Yeah. Was it worth it? Oh, yeah.

You're glad you're here now? Oh, yeah. Will you ever go back in debt? Oh, no. She says. He's grinning. You guys are fun this is great and you brought the kiddos with you and their names and ages are what olivia is six emily is four and micah is 18 months oh wow okay cool so have they been practicing their debt-free scream all the way up from Alabama?

Yes, sir. Oh, so they know how to do it then? We believe that unless they... We'll see if they don't get camera shy then, huh? Yes, sir. Okay, cool. Very good. Very good.

We've got a copy of Chris Hogan's retire-inspired book for you. We want that to be the next chapter in your story that you're debt-free, and now you move on to millionaire status and outrageously generous along the way. It looks like you've got three colleges to plan for, too, right? Yes, sir. Very cool. Congratulations, you all.

All right, it's Phillip and Wendy, Olivia, Emily, and Micah. $63,000 paid off in 10 months, making $62,000 to $82,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yay! The Happy Practices.

Well done. That's how it's done right there. Man, I love it. I'll tell you what. It's terrifying to start selling everything you own like that. It shakes the core of your life. But it gives you your life back. They got their life back.

You don't have a payment in the world. Kind of feels good, doesn't it? I promise you it does. Our question of the day comes from Blinds.com. Upgrade your home with Blinds.com, the number one online retailer of custom window coverings. Now through February 25th, you can go to Blinds.com slash Ramsey for a guaranteed 20% off right now. Blinds.com slash Ramsey. Today's question is from Glenn in Arizona.

My wife and I are 25 years old, debt-free, have an income of $140,000. We want to buy a house, but we're worried about buying at the height of the market. Should we wait for the market to crash or run the risk of buying at an inflated price now? Glenn, I don't know what makes you think the market's going to crash. The real estate market has gone down dramatically one time in the last 70 years. One time. I don't, I mean, I think these prices are white hot. I think the market might slow down. But I was selling real estate in 1980 when interest rates were 17%.

Prices of real estate did not go down substantially. The market froze. Nobody was buying houses at 17%. You couldn't give them away, but the prices, the appraisals did not go down dramatically.

Crash. Should we wait for the market to crash? I think you might be waiting the rest of your life for it to crash at least that's the historical data that's out there now there's a lot of feelings around this but i'm talking about facts the phoenix market where you live is wide open the arizona market's hot hot hot no pun intended and it was a bit of a bubble in this last crash. It was a little bit, I mean, it was up there pretty high,

so it took a pretty heavy hit, but it's back. Whatever it lost in 2008 and 2009 has regained, and then some. And it didn't take until now to do it either, by the way. It's been back for quite a while and going on up north of where it was before. So, agreed, the market is hot, quite hot in some markets. It's very difficult to get in on because it's selling so fast and prices are going up. Does that necessarily mean there's going to be a crash? There's no historic data that says that.

It's just a feeling. And I try not to make my financial decisions based on only feelings. It'll get you burnt. So my answer is, if I was ready to buy a piece of real estate, I'd buy it today. If you're out of debt, you have your emergency fund in place, you've got your down payment, and you're ready to buy on a 15-year fixed rate where the payment's no more than a fourth of your take-home pay, I'd buy. I don't know what the market's going to do. Historically, it's gone up all but one time. This is the Dave Ramsey Show. Our scripture today, Joshua 119.

Have I not commanded you, be strong and courageous. Do not be frightened. Do not be dismayed. For the Lord your God is with you wherever you go. Jeff Bezos says, if you decide that you're going to do only the things that you know are going to work, you're going to leave a lot of opportunity on the table. It's true. Yeah.

There's always a risk involved in trying something new. You need to put yourself out there, folk. There's some things for you to do, you know. And today's your day. Dion's with us in Los Angeles. Hey, Dion, how are you? Hey, how's it going, Dave? Better than I deserve. How can I help? Good, good. So I have a quick question for you. So my wife and I, about a year ago, we actually signed up for a HERO loan or PACE loan. It's an energy-efficient upgrade loan. We put about $20,000 into the house for some roofing and air conditioning replacement.

And being told now we're trying to refinance, and we're unable to refinance until the full $20,000 has been paid off. And then that's also the same on a sale, too. So if we were to sell the property, we would have to take the grant from the equity in the home. So I wanted to know, you know, what our options are. It's a 15-year financing term with 8% interest. It's adding about $2,800 to our income account per year.

I wanted to see if I could get a 5% interest. Say that again? How much do you owe on the loan? $20,000. Oh, still. Okay. Yeah. All right.

And you owe your first mortgage is how much on the home? We have $290,000 on the home. $290,000 in the first? On the first, yes, $290,000. And so $310,000 is what's owed total then? Correct. And the house is worth what? $370,000 is what's owed total then? Correct. And the house is worth what? $370,000.

Okay. And they're saying they will only loan you 80% of that. Is that what you're hearing? Correct. Okay. And the 20% has to be, or the 20 grand has to be paid off before any refinancing can be done, because I guess it's a super lien, so it actually becomes a first loan, and then conventional, they won't allow that to happen.

Good Lord. Well, it has to be paid off as a part of the refinance. It doesn't have to be paid off before. It has to be paid off at the table. Right, right. Yeah. Jeez, man, what a horrible deal. Yeah, so you can only borrow about $295,000, and you've got $310,000.

And so really your first could be refinanced, but the second can't. So how bad is your credit? Not bad at all. What's your household income? Combined, about $100,000. Okay. Run down the credit union and see if you can get a $20,000 loan. Okay.

You probably get a $20,000 loan at the credit union for 8% or 10% and get the thing off. What's your interest rate on your first mortgage? I think we're at about middle over 3, 3.5. So why would you refinance? Well, we're in FHA right now. We're looking to go conventional so we can knock off the PMI. Okay. All right.

Well, that would make sense then. Yeah. That will cost justify on a refinance on a mortgage that size for sure. So, yeah, let's see if we can move it to an unsecured personal loan of some kind and just get it off the house. Right. Yeah. And next time you get ready to buy something for your house pay for it or don't do it right right very true very true yeah this will

bit you in the butt man it's a bad deal oh what a mess hey thanks for the call erica is with us in philly hey erica how are you hi i'm I'm great. Good. How can I help? Good. So my question is, I just moved to Philly. Everything's still in boxes and everything. But I moved here for a job making double what I made at home. Awesome. I now make $100,000, and I have $20,000 in loans because of the move, because I have to move so abruptly.

$20,000 in loans because of the move, because I had to move so abruptly. $20,000 to move? Well, no, I had to move. I was unemployed for about three months. Okay, so don't blame it on the move. Yeah, no, no, no. Okay. So it was just a bunch of stuff. But it's only $20,000 at this point. It kind of feels like a joke in the bucket.

But also, on top of the $20 the 20, my grandmother paid for my school. She paid $50,000, and she asked that every grandchild pay $5,000 back. Okay. So technically, I have to pay her $100 every month until it's paid back. Good, good. She doesn't ever bring it out, but she's just like, you know, it makes her feel good. So you pay $100 a month, okay. Yeah, so my thing is, should I put that in the debt bill, too?

Yeah, definitely. Okay, okay. So debt, you got $25,000. You used to make $50,000. Now you make $100,000. You're going to pay the $25,000 off real fast. Yeah, exactly. Because you're not buying anything until you get this debt cleaned up.

No, no, no. Don't you tell me you were forced to buy a couch. No, no, no, definitely not. I don't even plan on buying a TV. No. Well, you need to be working, so. Thank you. You're going to do great.

You're going to do great. You're going to clear the $25 up in a year, and I suspect Grandma's probably going to get paid by Christmas, and that's going to be a wonderful day. Okay. Other questions. Quick question. Should I get roommates, or can I still live on my own?

What are you paying in rent? $8.75. Okay. But it's month to month, so I can have the option. I do have the option to move. Okay. Is it a one-bedroom? I'm a studio one-bedroom, yeah.

So where's the roommate going to stay? Well, no. I could move into the roommate district. That's up to you. What I would do is live there for a little while. Let's get settled and get in the groove of working and paying rent and working and paying the debt down, working and paying the debt down.

And then if you decide later you want to add roommates to the equation and make another move, then yeah. But let's just calm down. You just now got there. Okay, let's settle in. Make some money, kiddo, and get this mess cleaned up. That's why you went. And then we'll worry about roommates and stuff.

So for six months, no, stay where you are. And then let's see. Then you can rethink that idea if you want to at that point. Ed is in New York. Hi, Ed. Welcome to the Dave Ramsey Show. How are you doing, Dave? Better than I deserve. What's up?

My question is, we had some good fortune. We were listening to your show, my wife and I, and we were going to start the baby step. But then my wife's grandparents' house came up, and we decided to sell our house and accept their house. And by selling our house, we eliminated all of our debts. Good. Now, the thing is, we live with a relative there in the house that owns the house. But once he moves out, we owe him for his half of the house so i'm just wondering as far

as saving for retirement do i just keep stocking away the money until the when he determines he's going to leave and pay him or you live in the house with who uh my wife's uncle that's kind of weird well we live downstairs, we live upstairs Okay What's the house worth? We don't cross paths except for a garbage dump, you know Okay, what's the house worth? About $110,000, $120,000

Okay, so you have to give him like $50,000 Right And where are you planning on getting that? Well, right now we don't owe anything as long as he's there Right So you have zero debt that your half of the house is being given to you right as an inheritance or whatever right right right okay well you could you could go get a mortgage for 50 000 if you had to when he moves out i mean he's also willing to take payments after he leaves.

I think I'd probably just get a mortgage rather than pay him. Right. That's just messy. And also just ask him, you know, say, well, we could put it on a mortgage or I could pay you in cash. What kind of a discount would you give me if I just pay you in cash?

Correct. And then go get a mortgage and pay him in cash if you don't have any money. What's your income? My wife and I, we take home about $48 a month. Okay. Okay. Well, I mean, it'd be cool if you just start chunking away everything you could chunk away and be ready to buy out his half when he leaves.

I mean, our expenses are only like $500 a month right now. You put the bills in half. Yes, I would delay retirement in your case, and I would count this as saving up for a down payment on a house and call it Baby Step 3B. You have an emergency fund?

Yes. Okay. Beyond your emergency fund, then, how quick can we put $50,000 away in your situation? I mean, we're affecting that maybe $3,000 three grand a month yeah that's what i was thinking yeah i'm thinking 18 months you got your money if he'll live there for 18 months you'll be able to write him a check matter of fact you might even offer him the check to leave once you've got it right pretty cool situation hey neat very neat. Very neat. Thanks, Ed. That puts this hour of The Dave Ramsey Show in 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. Hey, guys, this is Blake Thompson, Chief Production Officer for The Dave Ramsey Show. This hour's up, but you'll find more on our YouTube channel, where we have over 6 million YouTube views each month. You can find debt-free screams, millionaire hour clips, Dave rants, and so much more. Go check it out.