The Ramsey Show - App - Should We Cash Out Our Mutual Funds To Pay for a House? (Hour 3)

Episode Date: November 24, 2022

Rachel Cruze & Dr. John Delony discuss: Cashing out mutual funds for a house down payment, Pausing Baby Step 2 to pay for a car, Leaving a safe job to earn more money. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 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, what will you be left with? Well, the truck's value is roughly around $25,000 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? 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... But 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 that 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's it going outstanding we're up against the clock so get right to your question for me All right, let's go to Orion in San 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 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 kind of stuff. Yeah. Do you have any other just liquid savings besides the $7,000? 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 a 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's about 600 bucks you you broke up how much is it talk directly in your phone oh uh 600 bucks a month that we actually have to pay okay so you guys have no debts your seven thousand dollars is liquid with savings um i guess like for an emergency fund or something and then you have all this other stuff so um yeah, I'd, 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. We'll be right back. welcome back to the ramsey show we are taking your calls this hour at 888-825-5225. Coming up next, great name coming up next, Boone.

And of course he's a Texan. Fort Worth, Texas. Boone from Texas. What's up, man? Welcome to the show. Howdy, howdy. How are you guys doing? That's what I expected.

That is everything I wanted. Thank you, Boone. Thank you, Boone. You're a wonderful human being. What's up, man? You're on the right side of DFW, too. What's up? Yes, I am. Yes, I am. So I am the only income provider for my household. My wife's a stay-at-home mom.

We have a 10-month-old daughter, and I've been given the opportunity to basically quit my current job, which is for a very big corporation as a W-2 employee, to go work for a mom-and-pop shop, kind of, in the same trade, same job title, with potentially making a lot more money, but as a 1099 worker, as a self-employed contractor with no benefits. So I'm kind of like part of me wants to do it, but also I don't want to, you know, in a sense, put my family in jeopardy if it doesn't pan out. Are you a lawyer? No. Okay. What do you do? said no no no uh i uh it's called i'm a pdr technician but it's a fancy way of saying i fix dents for a living or hail damage okay yeah so what do you make now in your corporate job and then if you were to run just some rough numbers what would you make

if you went into a smaller business kind of on your own as 1099? So my job is 100% commission-based. This year I'm expecting to make between $90,000 and $100,000. And if I were to switch over to the mom-and-pop shop, and this is just off their word, I kind of just met them like within the recent months. They seem like good people. But they say I could easily clear $100,000 out of the $299. Yeah, but it's just

off their word. So you're making similar money and the other job you have benefits and then this one you won't. The other one is as a W-2 employee you have different different tax you have

different taxes 1099 you got to pay all of your taxes yeah you pay 30 against 15. yeah but um ideas like i would be making a lot more possibly a lot more money because it is based off weather because i'd be doing mainly just hail insurance jobs. There's no hail in Texas. Just kidding. That was awesome. That was a good joke. So $100,000, sorry, with the mom-and-pop shop, that's like the floor is kind of what they're saying,

and you're going to be able to make way more than that because I just heard you say $100,000. Yes, yes. Easily clear it and then up. Yeah, yeah. Here's what doesn't sit well with me um you're not the the illusion of safety you're quote-unquote safe in this job or safe in that job um people say like i'm taking i make less money for the big corporation but it's a safer job and i always go back to the story we told in another hour where my mom worked for Enron. I just don't buy it, right?

But if you told me this mom and pop was a family friend of yours and you'd known them for a long time and you had seen the numbers and this is legit, that's one thing. To just tag on to somebody like, no, you're going to make $100 easy. Man, that makes me real uneasy to put my wife and 10-year-old baby girl on that train. Like, I would be, if I'm you, I would sit down and say, I need to see your books. I want to see what y'all have reported over the last couple of years. I want to see what y'all have reported over the last couple of years. I want to see what the business is. Because I can see them just salivating over a guy like you who is out there just getting after it for a corporation making $100,000. Yeah.

Man, I'd love, I don't know, you know what I mean? Yeah, dig in more, Boone. Something's not right. Dig in more and then run all the math out and say, okay, worst case scenario, I'm going to make $110,000 with the mom-pop. But then run out your taxes, run out your benefits of insurance, run out everything, and then see how you end up

versus 90 to 100 in the corporate job with taxes taken out, right? Run two formulas and then say, okay, here's what I have to make for this move to be worth it. I have to make 130. Yes. Or whatever it may be. So run those numbers. And maybe it's not right now, Boone. I mean, that's okay,000 or whatever it may be. So run those numbers

and maybe it's not right now, Boone. That's okay. You have a 10-month-old at home. You have a great job and unless you just hate it and it's a toxic environment and you're like, I just want out and change, that's one thing. But if you're okay with it and you're enjoying it, the other numbers just have

to be a big deal for me to make that big of a shift right now. You said something to before we go to the next call rachel two important things one do the real math numbers yeah too many people like they don't want to leave their job so they kind of like well it's going to cost a million dollars to buy a new house no it's not or they are desperate to leave their job and they're like no we'll make it work and you can't make it you can't just imagine math right that's the that's important one number two i mean number one and then number two is sit down with the person that you're about to hit your wagon to like dave and i had lots and lots of meetings both ways right him saying am i gonna let this guy speak on behalf of my family's

name and me saying am i gonna quit my dream job and everything I know? Am I going to attach myself to this dude's last name? Right. And so do your due diligence both ways and make sure you feel comfortable in your soul that this is the right move. Yeah, that's great. All right. Up next, we have Ethan in Boise. Hey, Ethan, welcome to the show.

Hello. So me and my fiance are 22 with two kids. We have $34,000 in debt. We have a wedding to save for in August. That's about $10,000. We met $50,000. And with this new job opportunity, if I go gazelle with overtime, I'll be able to bring in another three thousand

dollars a month um with the debt thirty thousand is in the car and my question is do I sell the car now and get a small loan to get a used car or do I sell it privately get a little bit more for it, and then shave up. We'll shave up and sell it later. So out of your $34,000 of debt, 30 of it is a car? Yes. How much do you think you could get for it? Kelly Blue Book said today, privately, $37,000 to $39,000. And then the instant cash offer was $30,000.

Ethan, I got a great plan for you, Ethan. Sell that car. Okay, I need to hear it. Go drive. Okay, sell the car. Go drive a $4,000 to $5,000 beater, your fiance's embarrassed to be with you kind of car. You're embarrassed. You feel ashamed.

Terrible car, Ethan. Terrible car. Even your little kids are like, are you serious, Dad? Have your wedding in August. Get married. You guys together. Even your little kids are like, are you serious, Dad? Have your wedding in August. Get married. You guys together. Combine those finances.

Save up between now and then for the wedding. Wait, for August? Like a year from now? Yeah. Yes. I would. Okay. Sell the car today.

Go tomorrow and get married. You guys have two kids together. Why are you waiting until August? Don't wait a year. Go get married, dude. Go get married. Because we want to have a wedding and stuff. Have a party.

Have a party later. Have a party later. You guys are married. I'm all about parties. You have kids. You're living together. You are married. Go get the certificate.

Do it, Ethan. Seriously. Don't wait on a wedding to solidify your relationship. That is a way bigger deal than the wedding. Okay. You guys can have it in August. You're going to have a big old party

and it's going to be amazing and wonderful. And paid for in cash. Paid for in cash. You're going to get married before that though. And then you guys have $4,000 left of debt

after that $30,000 car. You guys can pay that off real soon. You're going to be in a great position. Sell it for $3,700 and pay your debt off. You'll have $3,500

in your bank account. Well, he's got to buy a car. It's true. My bad. Sell it for $40. Somebody will buy it for $40. When do you think Ethan should get married? Yesterday.

Do it soon, Ethan. Do it for the weekend. Surprise your wife. Women love to be surprised with weddings. Just kidding. Don't do that. It's terrible advice. It's the worst advice I've ever gotten on the show.

Do not do that. Whatever you do, man. No, but for real though, I think that there's a benefit for you guys as a couple to be in it, to solidify it. There is a level of commitment there that you guys need together and then you're going to knock all this out and it's going to be a forever

memory and have a big party in August if you want or sooner. Right. And live your life with your two kids, Ethan. You guys are killing it. Sell the car, my brother. Build wealth. Change your legacy, Ethan.

You got this. Thank you. We'll see you next week. so Welcome back to The Ramsey Show. Up next is... I'm going to do this, y'all. I'm going to do this. Guadalupe from Des Moines, Iowa. I was about to do it. Oh, you were?

Guadalupe. Let's see if I got it right. From Des Moines. Did I get it right? Yep, Guadalupe. Guadalupe. Beautiful. So great.

Muy bonita. What's up um well I just want to see how I can get better at saving money um we're currently on baby step number two okay but um like I think I know how to but it's just getting there like I need somebody to like help me out. We, I don't know where to start. We make over 120, 120,000 a year. And we have a brand new truck and we have medical bills and then we have the house and then that's all we have for debt.

But I'm like, i just feel we should be able to put more money away yep okay so how much is the truck payment a month the truck payment is 400 how much is it in total what's the total loan as well 26 right now currently currently, we owe $26 on it. Okay. $26. But we have a lot of, how can I put it, stuffitis. Yeah. We buy a lot of things. So it's just trying to like figure like and we don't know we don't need those things so it's just so why do you buy them um it's not me um it's my husband he likes to he likes hobbies he likes to you know just go and get it now and i'm more of the i'll put something in my cart and i'll be there for months until i finally commit that i actually need it um so it's just trying to convince him like how how can i it's more how

can i convince him how to save and how we don't need all these things um is he on board with when you bring up paying off debts all all of that. What is his? He doesn't like having debt. It's more like how can I? I've been listening to your guys' YouTube channel, and it's like you think you're normal because you have a car payment. And to me, I'm just like we have a paid car already. We don't need to have another car payment. Mm-hmm. credit cards, like they get paid off every month, but I'm like, we can be putting that money towards savings. Yep. And it's trying to, like, I've used the word Dave Ramsey, you know, I'm like, Dave Ramsey

says this. So here's, I want to try a new track. Okay. Often we get stuck in a rut and we tried the same tactics and they don't work and then we get frustrated so we tried the same tactics just louder and angrier and harder and then they especially don't work okay so you and or your husband get something from getting a new package in the mail or from having a shiny new there's something that is bringing your body something right you're getting some sort of benefit from this even though that benefit

might be killing you like think a cigarette calms you down did it right now in the moment and it kills you right yeah so i want to try a different track instead of talking about dave ramsey instead of talking about let's pay off our debts let's pay off our debts instead of talking about math problems I want you to sit down with your husband and say I'm scared I am terrified that we are going to spend ourselves into oblivion

I'm tired of waking up at 2am unable to breathe I'm tired of you having to take extra shifts I miss you you have to take extra shifts I miss you you have to take extra shifts so that we can pay this $3,000 credit card bill off of just crap stuff we don't need

and I don't feel safe in my own house anymore would you be willing to join me in creating a home that we both can go in let's start there because now getting out of debt is part of a path that y'all

are going to take together towards a common goal. It's not about math. You'll have math problems and you'll have great discussions and I want a new bow and arrow. Yeah, well, I need tires. You'll have those discussions and disagreements and fights and they'll be spectacular, but they will be in service of a greater identity, and that is we are a family who is safe. And we're a family that doesn't borrow money because we are never going to be slaves to somebody else. That's who we are.

And now let's create the behaviors that fill that. Do you see a total difference there? Yeah. One is nagging about, oh, my gosh, you got a new truck oh and one is um when you pulled up in that new truck i didn't think you looked like a big tough cool guy i thought oh no how are we going to make this payment and then i couldn't breathe yeah right that's a totally different conversation and if he's uh a husband who looks at you and goes ah get over yourself now you got a harder conversation yeah then you and goes, ah, get over yourself. Now you get a harder conversation. Yeah.

Then you got some more marriage, marriage stuff. Yeah. To dig into. But, but in the, obviously the perfect world is that he says, okay,

okay. And honestly, for, I have found with the spouse that's reluctant, but wants to get, they're not like totally against the idea, but they're like, I don't know,

logistically, I don't even know how to get, if you can map out detailed, detailed, the debt, how much could go each month towards the debt, what you would cut out, create a budget and just say, Hey, if we cut out this expense and show them and show the math though, and show the pathway out because your husband probably like John and I are, is the spender of the relationship. John and I are both in each of of our marriages. And so if my husband came to me and was like, hey, sell your car.

We're never going out to you. You can't go shopping. Get off Amazon. We are paying off debt. I'd be like, that is not a fun life. So I don't know what life you're living over here,

but I want to enjoy life. But if you told me, hey, I, as your husband, I am stressed. I am freaking out. I can't breathe. Everything, right. That John just told you to say, if my spouse came to me and said that and said, and here, here is what the next 26 months could look like of our lives. And it's not going to be fun

because it does mean I'm not going shopping. I may have to sell my car, whatever sacrifices are involved, but there is an end game. If he can see the end game that hey you can get back to enjoying stuff because we're not against stuff i think people think that about rant the ramsey solutions like oh you guys are so cheap i'm like no we are for stuff we just don't want your stuff to have you and you guys are in a position where it has you whether it's spending because it feels good and you're stressed or and you're spending with money you don't have so now you're going into debt for it so so we we can have stuff later in life. That's not the problem.

But how we're going about it is what is killing us. And so having that timeline, I think, really helps see an end game versus this being a forever long path. And you guys make great money. Yeah, you're doing good. In Des Moines, Iowa. It's not like you're making $120 in Manhattan. You know what I mean? You guys are in a position where you can do a lot.

And it may mean sacrifice of lifestyle. And I also want you guys on a budget. I mean, because if you're not being so specific with your paycheck, yes, it's going to $400, $500, $600 can slip out. And you don't even notice because you're just spending. And so really you guys getting together and saying, we're going to do this together and locking arms and knowing like this is a new way of life for a certain amount of time of the sacrifice till we get out of this debt does that help yes yes it's I I call it my my little notebook and I showed him

like he finally looked at it and he's like and his eyes just got big and I'm like this is what I explained like we need to like follow everything and and I also don't want you to be his mom you're not his mom in this process either I don't want to feel like his mom he does like he likes

nice things and he works really hard but I'm like we shouldn't just be paying off the nice things because you do work really hard. It's both and. We work really hard, and then over time, we can afford nice things. If we take something out on payments, I'm just borrowing it from the bank. It's not even mine. It's not even mine. I want stuff.

If I buy something, I want it to be mine. You don't want to own it. You want to to own it you don't want to owe on it yeah thanks for the call this is the ramsey show 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. Oh. 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 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. That was a conspiracy theory, huh? It's been years since I've seen that movie. She believes stories are true that aren't true and ones that are true. That's exactly right. yeah it's been years 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 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 what your know for 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 it's great but anyways never knew

never knew true story though we were changing lives america we were changing lives adams all right on that note big gulps huh pick them up let's go to 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. 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 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, 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 my she 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've been a debt for years we had no problem and so i i i didn't haven't personally experienced that right not having a big issue not having a good relationship with debt not like yeah um and it wasn't like I was

making a billion dollars or anything like that it was just I just didn't run into the problem so I 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 unwriting 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've talked to one just kind of briefly to kind of, because essentially her credit technically is better than mine because right now mine was just lower. So they told us the difference of what the manual underwriting process would be and how they would kind of base it off of mine because it's technically lower right now. It's not yet at that zero point that you guys talk about yet. 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 what the actual payment would be, and that's why I was calling. Okay. Yeah, I would sit down 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 yeah, I mean, like, things are just constantly changing in that world anyways. So, yeah, I mean, I would, if you want to do exactly what John said, I think that's great. I didn't even think about that. You're right. Don't do what I said.

Do what Rachel said. No, no, no, no. I think it's okay if you do. But just know life could look a whole lot different when you're actually ready to purchase a home. So, just remember that. Because, again, I think we can get stuck in what today is. And that that may not be the case. Who, who the heck knows what 24 months is going to be. And in, um, 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't exercise right like you miss the big thing and you start fighting over these little things the big thing in philip's home right now is let's get out of that yes like that's the big that's let's that's the thing we can do right now arguing about something that's 24 36 months it's just it's just bringing chaos into our home that is unnecessary at this moment totally and then and kind of i was gonna 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.

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. That's a great point, too. 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 right to your question. Hey, guys. I 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. We feel like maybe our biggest obstacle is living in the house that we're living in now. We just recently bought this house. It's within the 25% range of our take-home pay, 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. How much do you owe? That's the quickest way I can answer the question.

How much do you owe? Oh, gosh. Let's see. $401,000. Are you a doctor? We are both nurse practitioners. Okay. Each or combined? Combined. Why? Why? Yeah. What do you mean? I've just got a limited number of friends that are MPs out in the community, and that's about a salary for one of them.

Gotcha. So she's starting out. 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 gonna 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, you could sell it and 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 ramseysolutions.com slash debt-free scream we'd love for you to come to Nashville and tell Dave your story that's ramseysolutions.com slash debt-free scream