The Ramsey Show - App - Should I Wait to Pay My Student Loans Until After the Election? (Hour 2)

Episode Date: October 6, 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. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. Anthony O'Neill, Ramsey Personality, number one best-selling author. Ramsey Personality is my co-host today here on the air. Again, your calls are welcome. And let's start off this hour with Will in Memphis. Hi, Will. What's up?

Hi, Dave and Anthony. Thanks for taking my call. Sure. How can we help? So I am currently in Financial Peace University, and my teacher, Trish Haver, told me to bring this question to you. I'm in Step 2. My wife is in optometry school, and we have about $86,000 in debt.

So when she gets out, I'm not necessarily worried about being able to pay it off. The question is, I currently am contributing to a 6% match on a 403B at my job. And my question is basically, should I stop contributing to that and put that towards the debt? Or since I'm young and I have such a big price match percentage, do I keep contributing to that? Well, the fact that you're young is the reason why I want you to stop contributing to it because the quicker you can get out of debt, then the way more money, not way more, but the more money you can invest down the road. So I want you to go ahead and just attack all of your debt right now.

So don't stop. I just want you to pause. What's your annual income a year? $60,000. $60,000 or $87,000 in debt. When does she graduate? In about a year and a half. She'll be making six figures pretty quickly after that. I suspect that's true, plus or minus COVID, but yeah. Yeah, that's probably true. It was true in the old world. Absolutely. And so that's good news.

The good news is you got plenty of time. And you guys must be fairly early in Financial Peace University because we cover in there that baby steps one through three. You stop all investing and you take all monies that are not currently in a retirement account and you apply them to whatever step you're on, maybe steps one through three. So in your case, you've got a lot of student loan mess to clean up. And it is a mess. And don't sweep it under the rug and don't act like, oh, it's okay because she's going to make a lot of money. She hasn't made any money yet. When she actually makes some money, we can talk about that. But I think she will.

I don't think she's got bad prospects or something like that but i sure hope no little thing hiccups in your perfect plan because you need that six figures to clean this mess up as soon as you possibly can and that's your first goal is baby step one's a thousand dollars two is finish off being out of debt three is have a fully funded emergency fund and we don't do any investing of any kind or going on vacation or going out to eat or splurging. It's beans and rice, rice and beans. You clean up your freaking mess.

Yeah. And the faster you clean up your freaking mess, the faster you're going to build wealth. It's the shortest distance to wealth. Oh, man, Dave, you took it right out of my mouth. I get excited when I talk to young people about that, especially in his age bracket. Like, hey, the quicker you can get out of debt and the quicker you are to building true wealth and you don't have that fake rich look all over you.

And so I really, really love that. Yeah. And you know, Anthony, I'm hearing one of the guys was telling us on our social media team, he said in the some of the social media Facebook groups or whatever, that there's always these discussions about people wanting to go on vacation in Baby Step 2.

I'm like, I guess I need to get in there and chew some butt. I mean, nobody, don't talk to me about you're on my plan. When you're on vacation in Baby Step 2, I'll make you cry. Right. I mean, that's just, that's not Baby Step 2. Baby Step 2 is I am in debt, and debt and debt sucks and i'm gonna do everything to get out as fast as i possibly can now if you want to work your own plan that's fine but don't call your stupidity my plan right right right because our plan is get your butt out of debt our plan is

gazelle intensity while you're in baby steps one through three yep that's that's it i mean by the sale like if you don't know what that means it's like a gazelle running from the cheetah trying to freaking stay alive yes it's not like well i just i think i've earned a vacation no you didn't you're broken in debt you didn't earn anything yeah well no they did earn something dave they earned the right to keep working the right to not go on vacation right you know You know? Vacation is not in baby step two. Let me just help you with that. And don't whine and tell me how tired you are. Oh, shut up. Yeah.

Right before you die from overwork, you pass out. Don't worry about it. It's okay. You're going to make it. Call the whambulance. Yes. You know, vacation? I don't even know what a vacation was, man.

Trying to raise two kids to keep the freaking lights on. You know? Vacation. Vacation was I didn't work 80 hours that week. That was vacation. You know what's so funny is too, Dave, I see people who are in debt they take more vacations than I do and I'm out of debt. That's true.

That's true. But they're, you know, it's nurturing and I have to have my time for me. My me time. Oh, give me a break, you snowflake. Seriously. Unbelievable. That's ridiculous. I hope I wasn't unclear.

You know, you wasn't unclear. But here's what we've learned with individuals who took Financial Peace University and stuck to it. The successful ones did what the unsuccessful ones were not willing to do. They were willing to make the sacrifices, eat on rice and beans, beans and rice, sell everything, whatever they can within their means to get out of debt. They were willing to do the things that the people who complain about our program are not willing to do. Yeah.

The thing with me is I'm a bandaid off guy and fast rip it off. I want to prolong the pain right what is the shortest distance between where i am and what success looks like and how much pain is involved in that distance yes can i endure that pain live like no one else so that later i can live and give like no one else now will is not he's not got the spirit of the people we're talking about he's just asking a clarifying question how the baby steps work. But that got me started on these people in the Facebook groups going, I'm on vacation and baby steps too. Wuss.

Unbelievable. You're not going on vacation. Well, my mom is paying for it. Your mom ain't paying for everything. Your butt needs to be at home working and get this mess cleaned up when you bought stuff you couldn't afford money you didn't have to impress people you don't even really like yeah you got to stop this stuff and it's like you know this live like no one else pay a price to win and later there's plenty of winning there's plenty of enjoyment yes i mean you can go on vacation anywhere you want to go i can go anywhere i want to go in the world all i gotta do is just stop it

assuming the stupid place is open right but you know, you know, they're not all open. But all that crap aside, I mean, in terms of being able to afford it, because we paid a price. Yes, sir. To get here. We did. I wasn't born on third base. I, you know, worked my way around the bases.

There you go, Dave. Didn't hit a triple. Wasn't born on third base. Thought I hit a triple. It was just, you know, crawl know crawl scrap dirt under your fingernails you did it too man you've worked your butt off absolutely i mean i'm sitting next to you so i know i work my butt off come on now let's be real yeah but you you know you have been a hundred percent true to what we teach in your personal life before you even came here. Absolutely.

Absolutely. Working hard. I've been living this vision for about the last 11 years. When my dad gave me the Dave Ramsey budget form, I was on a new mission. And it's put you in a position to do anything you want to do financially at 34 years old. And I love it. You know? And that's what I want for you people.

Yes. But don't be thinking you can just, yeah, I deserve some time off, and my children haven't seen me in like six hours. Oh, go work. This is The Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs, whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up. They could have faced a huge financial setback, but thanks to Christian Health Care

Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually support each other. CHM is the longest-serving health cost-sharing ministry and is a Better Business Bureau-accredited charity. It's Christians helping other Christians, and it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org. CHM is a proud sponsor of Dave Ramsey personality is my co-host here on the air today. I am Dave Ramsey, your host. This is the Dave Ramsey Show.

Anthony has on his website a student loan payoff calculator. Don't live with your student loans for 20 years. Use this calculator to see how you can get it paid off fast. Go to anthonyoneal.com slash resources. And also, if you want to text AO, just text AO to 33-789, and you can join the family. He'll drop you some encouragement in your inbox. Plus, you'll be the first to get exclusive content and the latest news and free resources of the stuff Anthony is putting out.

Folks, do you remember life before you actually got on a plane? Being afraid at night about money? Hiding money problems from your spouse, purchases from your spouse. Thankfully, that's now all in the past for you. But there's millions of people out there who are like you used to be and I used to be, and they're searching for help. If you've ever taken Financial Peace University or if you've been impacted by what we teach, then lead a Financial Peace University class and help someone else get on the plan.

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That's LEADFPU, all one word, to 33789. You've coordinated a bunch of classes over the years. I have, Dave, and I'm trying to coordinate some in the future here, too, with some of our tribe people. I'm looking forward to it. Yeah, it's going to be fun. It's going to be real fun. Yeah, they get you as a coordinator.

They'll be almost like me, except nicer. Well, Dave, you know, they're saying I'm becoming a little bit more meaner, too. Are you? You've been hanging out with me too much. Well, I like it. That's it. It's good for your style. Open phones at 888-825-5225.

That's 888-825-5225. Tony is with us. Tony is in San Antonio. Hi, Tony. How can we help? Thank you very much, Dave. I appreciate all your help. My wife and I have been following your advice for many years.

Consequently, we are very secure in our future. I am 60 years old right now. I'm still working. 60 years old, and I have about $1.4 million in my IRA. Good for you. My wife is a schoolte teacher, so she's 56. She's still got some years to go. She's got her own IRA, but my question is, okay, 60 years old, of course, I have access to my IRA, but my wife being 56, God forbid something happened to me tomorrow, when does she have access to my IRA?

In other words, she's my beneficiary. Right. At 56, when does she have access to my IRA? In other words, she's my beneficiary. Right. At 56, when does she have access to it? Immediately, but with taxes on it, if it's a traditional IRA, just like you would have taxes on it if you pulled it out. Sure, sure. So a spousal inheritance and a spousal inherited IRA is available immediately. There's no 10% penalty on that for early withdrawal.

Okay, so she doesn't have to wait until... No, but she will have taxes. Everybody has taxes. Now, if it's a Roth IRA, there's no taxes, but I'm assuming because as large as this is, you've been doing it over many years, it's probably traditional, isn't it? It's traditional, yeah.

Yeah, so you've still got taxes on that 1.4 whenever you pull it out or she pulls it out. Now, the difference is that she has a lot, if she inherits this, she's required to pull it all out within about 10 years. And you're not. You're not. So she's going to end up pulling it out. Even if she turned around and reinvested it, she's going to activate the taxation on it.

Gotcha. But it doesn't have going to activate the taxation on it. Gotcha. But it doesn't have to all be in the first year. It can be, I mean, there's a few years, but it's either five or ten years. They just changed the law back in January. And I can probably thumb through this huge stack of stuff I've got here if I can try to figure out what it was. But it's something along those lines. And so you're going to get hit with something. She is if she gets it out.

So why are you looking for that, Dave? Tony, I have a question for you. To younger people listening to you, I'm always teaching young people to invest into the IRA, especially a Roth IRA, as soon as possible. When did you start investing into an IRA? As soon as I became a professional, which was 27 years ago when I graduated college and got my professional job. And right then and there, I maxed out my IRA or maxed out my 401k and never touched it. Wow. Giving and giving and giving and giving.

27 years, 1.4 million later. you you didn't inherit any of this money you just built it up built it up no i inherited a wooden shovel when i graduated high school oh wooden shovel but so this idea that everybody inherits all their money is wrong so i did find the cheat sheet i've got laying here on the desk, and it is 10 years. It's called the Drain 10 Rule. And so if you were to die today, she's going to pull out one-tenth of it every year and be taxed on it, even if she turned around and put it back into an investment for 10 years.

So $140,000 a year right now. Okay. So basically, if she pulled it out and put it into a roth can't can't you got your maximum contributions and it's a whole lot less than 140 grand yeah it's not a rollover the rollover is not available okay they want their stinking tax money yeah of course and so they set this thing up to where you know you've got a minute you've got a mandatory withdrawal beginning at 70 and a half. The required minimum distributions. You know that RMD rule probably.

That's a whole lot smaller than a 10-year drain. But when she inherits this money, it'll have a 10-year drain on it regardless of her age. So it could be at 66. Bottom line is, though, you did great. You're millionaires. You're probably multimillionaires. You got this one account that's 1.4 she's gonna be great man you guys are studs way to go touchdown monica is in seattle hey

monica how are you i'm good how are you better than i deserve how can i help so i'm uh currently on baby step number two i only have um 10 left in debt, which I should be done paying by December. Awesome. I recently moved to Seattle from California, but I left my home there, and I currently do have it rented out. But now I'm just wondering whether or not it would be a better idea just to sell the home and hold on to the money. Yep.

But I'm not planning on staying in Seattle for a whole lot longer. I would say maybe max two to three years. That's okay. And then move back to California. You're going to move back in that house? Pardon me? The percentage of times you'd move back into that house is almost zero. Perhaps, yeah.

You really think you're going to go back to that house when you go to california um i mean i i like the area and my whole my family's there so i i don't mind keeping the house yeah if you if it's two years and you think i'm moving back that's probably okay it's not a long-term plan i wouldn't have a long-term game plan to be a long-distance landlord i'd be getting rid of it but if you're gonna turn around move back now i will warn you having um moved out of my residence where my children were and turn it into a rental property it always kind of hurts your feelings when you go back because it's now a rental property and it's got a different vibe and a different level of care no matter how great the

renter is and how good a job they do it's still not their house and they still didn't take care of it the way you used to when you live there so you're probably going to remodel this thing before you move back in yeah yeah i had plans to do that too if i kept it yeah if you keep it that's what you're probably looking at it's an emotional thing i've just i've never moved back in but just walking back through i'm like oh, oh, well, that's where little Bobby was. You know, it's like Daniel's room. You know, it's like what they did to that.

And it's just, you know, there's a little person inside of all of us that kind of gets our little feelings hurt because everything's not the way it always was. And that's going to happen to you when you come back to this. But we don't do long distance landlording. No. And I would say, if you know there's a possibility you're going to be there longer than two years. I would say go ahead and just sell it. I don't know what California real estate is going to do.

There's a mass exodus from that state right now that we have not yet been able to tabulate. There's no real good data on it other than the traffic is all leaving. There's no one going in. It's scary what might happen to the economy there if the governor keeps up doing

what he's doing. This is the Dave Ramsey Show. I think I'm high. Anthony O'Neill, Ramsey personality, number one bestselling author, is my co-host today. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping. And with the new promos they run every month, you'll save even more. Use the promo code Ramsey to get the best possible deal.

So, Dave, today's question comes from Hannah in Delaware. She visits DaveRamsey.com to ask. I received my undergraduate degree in 2018. I am currently making forty thousand dollars a year and I'm living rent free. I am on baby step number two and I am having trouble deciding which loan is the smallest. My private loan is only six thousand dollars total, while my federal loans are $21,000. I'm confused because my federal account is broken down into six different loans, four of which are less than $3,000. Should I pay those down individually or is my private loan technically the lowest debt and should be paid off first? Thank you so much for your help. Well, here's the thing, Hannah, Hannah. We teach line up all your debt from smallest to largest. So if you can see, and if your loans are breaking down,

broken down into 3,000, like you said, yes, you're gonna line them all up from 3,000 all the way up to the largest one. Now you're gonna make your minimum payments because also in the federal, it also tells you what is the minimum payment when you log into that account. So make all your minimum payments, but then attack that $3,000 one first, attack this one first, next, and then go on from there. But you do want to line up all of your debt from smallest to largest.

And that's exactly what I did with my student loans because I had four of them and I broke them all down when I did have them and I paid them off that way. That's exactly right. It's by individual loan. It's not by category. Right. So it's not like I have two car payments. So I add them together. No, you have two different car payments. Right. Two different loans. You have four different student loans that are federal. You have one that's private. And so you have five loans. You have four different student loans that are federal. You have one that's private. And so you have five loans. You list the five out, smallest to largest, and attack them in that order. The great news, Hannah, is you're paying attention. Yeah. And you're actually doing it. I'm so proud of you. John's in Austin, Texas. Hey, John, welcome to the Dave Ramsey Show. Hey, Dave, how are you doing? Better than I deserve. How can Anthony and I help?

Hey, so I just had a question on about how I should attack my student loans. So I actually got kind of lucky because I went to school. I graduated early and, you know, I got some scholarships from academics and I did like some essays. So I only owe about twelve thousand five hundred in loans. I have enough saved up to just kind of pay it off, but I was just wondering if I should just kind of wait until after the election, and also that interest is suspended on loans right now.

Hey, John, I'm confused, so help me understand. Why would you want to wait after the elections? Just, you know, you know, somebody, you know, I'm not going to say who, but, you know, somebody wins and maybe some new laws are passed that, you know, maybe some debt is forgiven. You know, I really don't see that happening. Well, no, it's not going to happen, John. Okay. Yeah. And that's what I was thinking, but you know what, I mean, if interest is suspended until December 31st, why not just kind of wait and see if anything does happen? Well, I'm gonna tell you why, because you're still in debt. All right. And why not just go ahead and attack it and get it taken care of now. Okay. And create freedom for you. Tell me this,

how much money is in your savings account right now? So right now I have about $30,000 saved up. John, hang up the phone, man, and go pay this debt off, brother. Because you're still going to have $15,000 in your savings. You're going to be 100% debt free. You're waiting on the White House to take care of your house when the White House is proven to us. But they don't take care of our houses. They really don't care about us as individuals. So you need to go in ahead and attack that.

And you still, how old are you, John? You sound young. I'm 22. Oh, John, get off the phone, man. Go pay the debt. 22 with $15,000. Hey, dude, let me tell you something else too. You're very impressive.

I appreciate the words you use, but I'm going to correct you. You said, I got really lucky because I got scholarships and I graduated early. Neither one of those things were caused by luck. They were both caused by you. You're a stud, man. Yeah. Well done. Yeah.

You went and did something with your, you got up off your butt and went and did something. You weren't a victim. You're a victor. So, yeah, let's just play all the way through. Now, if you want to just play one other little game just for the fun of it i completely agree with anthony and he probably has already got you convinced but i'm going to keep i'm going to keep playing here all right twelve thousand dollars at one percent per year is 0.0083 percent per month you can't buy a freaking biscuit with the money you earn between now and the end of the year on

this money okay yeah and that's that's the thing is that i i'm definitely going to pay it off i know you are but you're doing you're overworking your brain is all I'm saying. The actual reality of the math of your theory that you're working your butt off with, you burn a lot of calories just thinking about this. Yeah, you do. And so just pay the stupid thing off. Be clear. Never in all the millionaires that we interviewed did somebody go,

you know, I made.0083 for a month and a half, and it caused me to be a millionaire. It never came up. So just pay the stupid thing off. I made.0083 for a month and a half, and it caused me to be a millionaire. It never came up. So just pay the stupid thing off. You're not cheating the system. You're not going to break the system. And by the way, if a president gets elected that thinks that they will cause the student loans to be forgiven, they have another problem before that happens.

It's called Congress. Yes. And the chances of getting that crap through Congress are zero just to help you with that okay so regardless of your politics there's an administrative process that our government uses that keeps people from doing stupid butt things as dictators of the republican party or the democratic party and so they you know even if you think you can do something you got congress in your way so there's always island of misfit toys to deal with all Democratic Party. And so, you know, even if you think you can do something, you've got Congress in your way. So there's always island of misfit toys to deal with. All right. Christine is with us in Boise, Idaho. Hi, Christine. What's up? Hi, Dave. Thank you so much for your program.

I so appreciate your ministry. Thank you. Yeah, I have a problem. I just love what you are teaching, and I'm so consumed with it. But I have completely failed to get my husband on board, and I just can't wait for him to get on board. So I am wondering how can I move forward with the baby states? Don't. Without him, because he... Don't. You're going to end up divorced. Don't do that.

He has completely refused to go to marriage counseling, and we just can't see eye to eye with regards to finances. Have you gone to the marriage counselor? I have. Good. Keep going. Are you talking to your pastor? Are you in a good church? keep going are you talking to your pastor are you in a good church keep going keep talking to them get some advice on the relationship and let's get this

relationship rebuilt and deal with that don't use the money thing as a club to try to make him go along with you on anything it's not going to work. It hasn't worked so far. And it drives a wedge. It doesn't heal. So the biggest thing is that I have been very codependent in our relationship for a very long time, which has kind of encouraged him not to work. But that doesn't mean you can go off on your own and start handling money separately and end up anything but being separate yeah so that's what he has decided for us to do no i do not know no he doesn't get to decide everything that's not how it

works you have a relationship and you are getting coached on how to manage the codependence out of this relationship. And once that part is healed, then we can talk about how to work the money together. But I'm not going to tell you to run off to the side over here and start doing the baby steps and keep telling him how wonderful it is and how stupid he is, because that's not going to end up anywhere good. It'll end the relationship. Yeah. You know, David, I've got to ask this question um i'm pretty sure america was shocked to hear you say don't because you're saying you got to fix the marriage and relationship first because the

probability of her building wealth on the side is and staying married yeah is zero yeah there's almost got no data points that that occurred. It's like, we have a bad marriage, so let's have a baby. It's a dumb idea. Yes, sir. Okay, we have a bad marriage,

so I'm going to go over and handle money. No, it's a dumb idea. We've got to work on the relationship, and then you can work on the money. Then you can talk about babies. This is The Dave Ramsey Show. Thanks for joining us.

Anthony O'Neill, Ramsey personality, number one bestselling author of the book Debt-Free Degree, Going to College with No Debt. Oh! Yeah, he joins me as my co-host today here on the air. Hey, if you ever get to the end of the month and have too much month left at the end of the money, no idea where all your money went, I have no idea, I feel like I work for Congress, I have no idea where all this went, well, here's the thing. If you want to take control of your money, you have to be the one to tell it where to go.

And that means living on a budget, and that means giving every dollar an assignment, every dollar a job, every month. Manage the money in your house like you were paid to manage it as a job for someone else. The best way to do this is our new Ramsey Plus membership. It gives you all of our best money products, including the premium version of the budgeting app, EveryDollar. EveryDollar is literally the world's best budgeting app, without a doubt, and that's where you'll make your budget, track your spending, and clearly see where all your money is. Ramsey Plus, of course, includes Financial Peace University, the Baby Steps Tracker app, and a whole suite of things that cause you to know what to do, how to do it, be on the same page with your spouse for those of you that are married.

Get a free trial of Ramsey Plus right now. Never again wonder where your money's going. To start the free trial, text BEGIN to 33-789. That's a good word. BEGIN to 33-789. Les is in Wilmington, North Carolina. Hi, Les. How are you?

Hey, Dave and A.O. Doing great, thanks. Oh, man. Thank you. How can we help? So I'm in baby step four, five, and six, making about $80,000 a year take home, so about $6,667 per month. Currently spending $2,292 to the mortgage.

About half of that is extra on top of the actual payment due. Currently owe about $189,933 on the mortgage, and I'm on track to pay it off in seven years. Awesome. How old are you? About 26. Wow, good for you. Well done.

Thank you. So my question comes in, I'm about to get a raise of about $1,000 per month, and I was planning on spending most of that, if not all, to the mortgage. And I was kind of wondering, is that kind of being stuck in gazelle intensity mode from baby step two and three, so I need to kind of ease off for my wife and daughters, and so they can have more fun or keep charging ahead towards baby step six? It's been a long time since a guy 26 years old called me and gave me his mortgage balance to the penny.

To the penny. And all the other debts to the penny. And so as a nerd, I am sitting here with great appreciation for you. Right. You are an incredible super nerd. And touchdown, you're winning, you're killing it. Those of us that are nerds have a tendency to get very task and goal-oriented and forget that the humans in our house want to have what's known as a life.

Yes. Mm-hmm. Yeah. And so I'm guessing your wife gave you that hint that maybe you weren't putting this whole $1,000 on the mortgage if you wanted to have a good life. Well, we budget about about 400 a month for shopping and fun stuff uh and i think that you'd like for that to be a little bit higher i would

guess yeah yeah yeah dude you are listen here's the thing you're doing so good. And from one nerd to another, I have learned the hard way, the old nerd to the young nerd, okay? I've learned the hard way that the easiest way to win the war is actually lose a few of the battles. Because she'll get more fired up and more enthused about getting the house paid off if you don't keep the screws so freaking tight on the enjoyment of the money she's not asking to blow the whole thing up and destroy your wonderful plan she just needs a few hundred bucks out of this thousand yeah yeah okay and i think i think you're gonna end up actually getting the house paid off faster doing that even though the math says you're not yeah okay yeah because she doesn't blow up on you later so yeah you're doing great you're doing great but yeah

let's let's i think i don't know what are you hearing i mean you know dave i'm hearing the same thing too i'm curious does have you even just sit down with your wife and say babe this is what i would like to do what what do you want yeah like have you just sat down and say babe what we're going to have this increase increase this is where i see us going but this is what what is about what i see but what do you see like what would you like and then together you all just come up with the game plan um to attack it or if she says hey you know i want to go on a nice vacation. We can do that, but you better take me and the kids on a nice vacation every summer for

the next seven years. Okay, cool. I can do that. You know, how can y'all meet each other? But I think you can't have that. You got to have that conversation to have the clear understanding. Yeah. Yeah.

It's just, that's even better advice than I gave you. So just do that. JR's in Pittsburgh. Hey, JR, how are you? I'm great, thanks, Ben. Hey, generally thankful for you and your team. My wife and I became strange in January. Eight years ago, we started a financial piece and just paid off $254,873.64. Wow.

Congrats. So, thank you. You're welcome. The question I had for you today was, now that the house has paid off and we've had a full 10 months of that, we do have a family of four and a one-and-a-half-bathroom house. We're considering going back and getting a mortgage. My question, I guess, is what do you think is the best idea for us? I know, obviously, 15 years.

Did I misunderstand you? I thought you said you and your wife were estranged. No, we are strange. No, we are strange. Oh, you are strange. Okay. I'm just trying to figure out why we're buying a house. Okay. I feel so much better with you being strange than estranged.

Okay. I'd rather talk to strange. If she ever decides she's leaving, let me know so I can pack my bags and go. I told Sharon I'm going with her, so yeah. Oh, my gosh. All right. So your question is how do we move up in house? Yes.

What's your household income? Now it's about $200,000. And what's the house price that you would move to? We're looking $440,000 is right around where we'd probably be. And what's the current house worth? $240,000. So you need $200,000 and you make440,000 is right around where we're probably being. And what's the current house worth? $240,000. So you need $200,000 and you make $200,000. Yep.

Okay. So if you took out a mortgage for $200,000, you could pay it off in two years. Because you're strange. Yeah, you're right. Absolutely. Okay. Or you can sit there with one bath for two years and pay cash for the difference. Yeah, that's my question.

Those are the two options. Neither option's in the stupid column. Okay. I mean, I don't have people call me up and go, I'm going to take out a mortgage I can pay off in two years. That doesn't usually come up around here. So that's wonderful, you know. The point is that you've got the idea

that i'm not going to stay in debt the rest of my whole freaking life and pay the bank and make them rich absolutely you got rid of that problem right so this is just how long are we can i stomach a mortgage for two years it's really hard to go back in debt once you've been out yeah i think i'm i'm leaning a little more toward hey let's just bunker just bunker down and stay here and save up some cash. And my wife is a little bit on the other end. Yeah, and she's saying one bathroom and I'm done with this. That's right. Yeah.

But listen, neither one of you are wrong. There's not a stupid answer here. It's just a matter of can you take a deep breath and swallow a mortgage for two years and knock it out? Now, if I'm doing this deal with her, we're going to agree to beans and rice again because if I'm going to do this, which is really hard for me if I'm in your shoes, that's what you're saying, J.R., then, you know, you're going to, honey, we're going to do this in two years. Yes. We're not, you know, we're going to knock this puppy right out. Then you're still way over here in the smart column, way over in the smart column. I agree.

I agree. Way over in the smart. But I would try and convince my wife if we can just sit there and chill for two years. Yeah. It's fine if it's just two of you with one bath, but it's a bunch of kids running around the house all crammed in there, she's over it. Yeah. She's done with that.

So, interesting stuff. Good hour. Good hour. Thanks for hanging out, Anthony O'Neill. Thank you, Dave. This is The Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry.

We list everything you've heard about during this episode in the podcast show notes or head to DaveRamsey.com. Thanks for listening.