The Ramsey Show - App - The CARES Act Doesn't Care About Your Future! (Hour 1)

Episode Date: October 7, 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 market has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, and my co-host here on the air today, Chris Hogan. Ramsey personality, two-time number one best-selling author, including the latest best-seller, Everyday Millionaires. We're here to answer your questions about your life and your money. Open phones at 888-825-5225.

That's 888-825-5225. Samantha is with us in Salt Lake City. Hey, Samantha, welcome to the show. How can we help? Hey, Dave. Hey, Chris. It's great to talk to you guys. You too.

Oh, my gosh. You guys are so awesome, first of all. You guys have helped me so much. I'm reading Chris's book right now, Every Day Millionaire. I'm on baby step one. I'm working on getting $1,000 saved up. And I'm also going on the baby step two. My question is, I know that you guys teach to be the debt snowball from smallest to largest.

However, like, for example, if I have a landlord that needed pay from the last um place i was at does that take um i guess does that take any sort of like trying to look for the word here um move it up in the baby stuff move it up in your debt snowball exactly well i mean right right what is your what is your situation with them are they going to sue you tomorrow or have they said oh get to us as quick as you can or you're paying them payments or what yeah i'm just paying her payments right now but i'm just asking because i have a lot of like old debt from like medicals and student loans and stuff like that so i was just seeing how much um i should throw at it instead of doing like small smallest debt you know, um,

stuff that's like more urgent to pay, not, not by means of interest per se, but just means of like, you know, paying, paying people off before you pay off companies sort of thing. Because the P I feel like the people need it more than the credit card companies and the student loan companies and stuff like that.

I do plan on paying everything, but I'm just not sure. Yeah. So how much debt have you got total? I have about $40,000 in debt. What's your income? Right now I'm doing Lyft and Uber Eats. I don't have a sort of any sort of job right now just because of COVID and everything. So I make about, I would say $600 a week doing those two things.

So I would say maybe $45,000 a year. Okay. What is your largest debt? It's student loans. It's like probably around $15,000 in student loans. Okay. Somewhere around there. So other than student loans, $25,000 gets you out, right?

Yeah, yeah. And Samantha, are you current where you're currently living right now? I am. Okay. All right. How many debts are you not paying payments on today? Well, I'm in the process I just went and lifted my debt

I haven't gotten to How many debts are six months or more since they've gotten any money? I would say most of them Just because I've had medical and student debt for so long so you're just in you're in default on most of this yes you got a payment plan with the landlord so you're paying that the old landlord but you got a lot of medicals that have just been sitting there six months a year two years right right okay here's what we're gonna do we're gonna do two debt snowballs.

Debt snowball number one is everything that you are paying payments on now. Debt snowball number two is everything that's in collections and in default that you're not paying anything on anyway, which probably includes the student loans right now. It does. Okay. All right. So debt snowball number one is the old landlord and anything else you're currently paying payments on, which doesn't sound like a bunch. No.

And we're going to list those smallest to largest. We're going to let the others sit because they've not been getting any money anyway. So, Chris, let's not give them any money. No, that's exactly right. But when the time comes, Samantha, as I tell people, if you can't afford to pay, you can pay attention. Right? And so that means reaching out and communicating. But right now you got to focus on this active list.

And I'm going to tell you, the next step for you is going to be stability and income coming in, you know, whatever the food delivery stuff that you're doing, but you need to dust off your resume. You got you've got an income problem and that income problem is leading you to have these other issues. And so there's no more waiting on the job. You need a job. Yeah.

So setting up the things you're paying payments on on a straight-up debt snowball, things you've not been paying payments on, just set them over the side. They've not been getting money anyway. Run your way as fast as you can through that debt snowball. Then when you get to the ones that are in default, then you can list them off, and you can attack those in whatever order you want. Smallest to largest is best, but if you've got someone that's an individual friend that you owe $500 to that you want to put at the top of the list, that's fine

before you start dealing with the $15,000 in student loans. It would be up there anyway. Now, each one of those, you're not going to call the whole bunch and start payments. You're just going to call the first one on the list and finish the deal up with them. Now, it could be that that's an old credit card. You haven't paid them in three years. They're going to be surprised to hear from you. You owe them $5,000.

They'll probably take $2,000 as settlement in full. And so you save up the $2,000. They'll probably take $2,000 as settlement in full. And so you save up the $2,000. You work a settlement in full. Lump sum payments on every one of those in the second list. No payment plan. I know that you guys say, like, to wait until the end of the month to negotiate a company like that because that's the best time of the month, the last week, to call them. It doesn't matter.

You can do that, but it doesn't matter. The big thing is that you build up a pile of cash that is a portion of what you owe, and you offer them that, and you settle it lump sum. You get it in writing and no electronic access. Dave, thank you for bringing that up. The getting it in writing. If they won't put it in writing, it's not real. They're just phishing.

And so if they'll put it in writing and send that to you now what you get ready to pay them pay them with a certified check you keep a copy of the check in your file and you keep moving down the list yeah good stuff well done open phones at 888-825-5225 let me tell you what is magical about Samantha. For the first time maybe in her whole life, she is taking control of this. She's happening to all of this mess instead of all this mess happening to her. We got old bad debts, old bad landlords, old bad, which means there's a pattern

for years that this has been going on. And I'm so proud of you, Samantha, to go, you know what? I'm not going to let stuff happen to me anymore. I'm going to start happening to stuff. Old Dr. Stephen Covey said in the book, The Seven Habits of Highly Effective People, the number one habit was highly effective people are proactive. They happen to things. Things don't happen to them.

Yeah, and you can hear it in her voice. She's been taking in the information, but now she's starting to get confidence yeah and that confidence that's where the game starts to change and here's what happened you knock off a couple of those you start to feel like not like a wet kitten but like a lion coming out of the jungle i mean you get you get to roaring you know yeah this is the Dave Ramsey Show Folks, I love telling you about well-made, well-thought-out products. Today, I'm talking about Grip6 belts. I don't know about you, but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable.

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Grip 6 is determined to help build and modernize american manufacturing to learn more and get this month's dave ramsey special visit grip6.com that's grip6.com Ramsey Personality number one bestselling author Chris Hogan is my co-host today here on the Dave Ramsey Show. Open phones at 888-825-5225. That's 888-825-5225. Chloe is in Dallas, Texas. Hi, Chloe. How are you? Hi, I'm doing great. How are you? Great. How can we help? So I have this problem where the company that I'm working for now,

starting for the spring semester of my junior year of college next semester, they're going to start putting $6,000 a year toward my education, which is great. But I have started looking into internships for this summer. And there's so many, like, really big opportunities. And I've gotten some interviews for some of them. But if I were to pursue those internships, I would probably have to quit my job that I'm at now. But I don't know if I even want to be at the job that I'm at now post-grad anyway. So I just don't know what is better in the long run. What are you studying to do? I'm studying consumer experience management with a specialization in marketing.

Sounds like the other way around to me. Okay. Like a marketing with a specialization in consumer experience. But anyway anyway the um all right so the company you're working at doesn't do that um no they don't what do you get paid there 14 50 an hour and how many hours a week do you work 20 okay and6,000 a year? Mm-hmm. Okay. And the internship pays what? Most of them are around $20 to $25 an hour. And you'd be working how many hours? Full-time, 40. Until you get back to school?

Yeah, they're usually about 12 weeks from what I've seen. Oh, and you lose the job? Yeah, I would have to quit my job to work for them. I mean, you lose the internship ends at the summer? Oh, yes. Well, let's do a little math there, business student. So are you going to make enough in the summer at $20 and 40 hours to offset $14.50 at 20 hours and $6,000 worth of tuition help.

I think you are. Okay. Run the math, though. Yeah, definitely. Let's look at like a 12-month period of time, or actually it's more like a 9-month period of time, okay, of $14.50 at 20 hours and $6,000. Or look at three months, which is, and you potentially are unemployed. We don't know, but you're potentially unemployed when September comes around, right?

Yeah. However, you could go get a job when September comes around, even if it's not back with this old company. But if you're in your area, listen, the internship doesn't mean squat. You're going to go get a job after college, and the internship may or may not help one or two, 5%, 10% of the equation. You're the secret sauce on getting the job. I've never hired someone here, and I went, oh, you were an intern. Thank God.

That never came up in the interview. It was more like, oh, you were an intern thank god you know that never came up in the interview okay it was more it's more like oh you're an intern whatever okay and it's like maybe you picked up something maybe you made a lot of people coffee that summer or maybe you actually learned something while you were interning i don't know i couldn't get as an employer it doesn't bring a lot of zazz right Right. Now, Chloe, let me go a little bit more positive than Mr. Ramsey over here. I think you've got a great opportunity to learn, to make some connections. But like Dave said, once that's over, guess what? September, you're looking for another job.

And that's okay. That's okay, too. But, again, the mindset of why you're there as an intern, be very mindful. Make some connections. Don't just show up and go through the motions. Start to really look at this and understand this is your first step into this industry. And so if you work the relationships right, now the people you're meeting, you're starting to get connected with people that they know. And that could pave the way for you.

Yeah. For the sake of our listeners, Chloe, let me give you an example of what I'm talking about, okay, since Hogan's accusing me of not being positive, because I'm positive I'm right. Okay, so if you got nothing for the internship, which some internships pay this coming summer, but you got all the connections and the learning, I would tell you not to do it. It's not worth that much. Now, if you can make about the same in 40 hours at $20 versus $14.50 for 20 hours and $6,000, and you get the connections and maybe some opportunities and maybe you learn something,

well, everything's positive. Take the internship. Okay? Because, you know, but I, everything's positive, take the internship. Okay? Because, you know, but I've had people call here over the years and I've had, you know, young people that were friends of the family go, well, should I take this internship and make nothing versus I get to make, you know, 30 or 40 bucks over here and I can actually make some money this summer.

No, you're going to make the money is what you do. No, I agree. You build your character and your work ethic and, you know, there's just very few things. Now, there's a few jobs out there where you actually are co-opping like an engineering position or something like that. It's very likely you're actually going to end up

working there. That's right. Now, that might be worth it. That's right. But most of these internships are just, you know, the college student gets ripped off. See, we were both right. They make a lot of calls. We were both right, Dave. college student gets ripped off. See, we were both right. They make a lot of calls. We were both right, Dave. We always are both right.

See, I like this. That's how this works. That's right. It's all cuddly and everything. Cody's in Columbus, Georgia. Hey, Cody, what's up? Hey, Dave. Hey, Chris.

How's it going? Great, man. How can we help? Oh, so my wife and i are on baby step two okay are you there i was in one hundred dollars all right last thing i heard was baby step two and your phone wandered off let's start again my wife and i are in baby step two and what baby step two and we've paid off fifteen thousand one hundred so far. Yay. Good job. Yep, and we still have $47,757.44. My question for you, gentlemen,

does it make sense to refinance our home at the moment? I think I know the answer, but I wanted to confirm with you. All right, well, tell us what you think the answer is going to be. I think the answer is going to be don't refinance because you're taking money off the table that's not going towards your student loan debt. All right. Can you refinance the closing costs into the loan? Yes. Then it doesn't take money off the table.

Okay. Because I'm going from a 30-year to a 15-year. That's not important. Well, it's going to bump up our monthly principal. Your monthly payment is going to increase by how much? $500. So we're going to go from 20% of our take-home pay to 25% of our take-home pay. $6,000 a year.

And in the last year, you paid off how much? $15,100 in what period of time? $15,100 since February. Yeah, since February. So last... Eight months. Seven months. Eight months. months all right and so you're on a twenty thousand dollar a year schedule and if you do this it'll lower it by six thousand you'll be on a fifteen thousand dollar a year schedule for for the house no for your get out of debt plan

oh so no so my get out of debt right so so i I'm looking at your EveryDollar app here, and it says we'll pay the debt off, the student loan off, by June 2022. Okay. If we're paying what we are right now. Yeah, and if you lower that by $6,000, it's going to add a little bit to it. $500 a month is $6,000 a year. Mm-hmm. And so what's the interest rate on your current mortgage?

Four. And you can get what? 2.65, 2.6. Okay, so one and a third. And your balance is what? $300,000. Okay. So one is three grand, so $4,500 a year saved, and you decrease your cash flow and stay in debt a little bit longer.

What's your household income? We'll save a lot on the interest. Household income is $120,000 take-home. Okay. Yeah. You do the refinance. Yeah, you do it. You do the refinance.

You do the refinance. It slows down your get-out-of-debt, but here's the refinance. Yeah, you do it. You do the refinance. You do the refinance. It slows down your get out of debt. But here's the weird thing. At the end of this story, your app is showing you if everything goes exactly as planned, 100% of the time it doesn't go as planned. That's right. And the more intense you are, the not going as planned means you get out of debt sooner. So I think this is going to work out in the end.

I know it's going to work out in the end, and I definitely would do it. I definitely would do it. Good question. Interesting discussion. This is the Dave Ramsey Show. Jonathan is with us in Poughkeepsie. Jonathan, welcome to The Dave Ramsey Show. Hi, Dave. Can you hear me? Absolutely. How can Chris and I help?

Thank you so much for taking my call. I just had a question for you. So I'm in a sticky situation. I was working at a job after the past couple the past couple of years during the pandemic. And I left that job in hopes of getting another job, which had higher pay, more lateral mobility, better benefits and so forth. And I was, I didn't sign a contract to that job yet,

but I was told that I was going to be, I already got approved for that job. And I didn't break my contract to go to that job. So when the contract for the other job was over, I basically I'm out of a job. So I'm working kind of minimum wage and I have a retirement plan for $12,800 for the past couple of years. I was putting in like minimum. And my question is, should I take out some of my retirement plan and pay off all my credit card debt, my student loan debt, and put something aside, or should I keep that in there

and just kind of ride it out until I get the full-time job? All right, Mr. Jonathan. How much debt do you have, my friend? $12,000. So I have $6,000 in credit card, and I have $1,500 in student loans. Oh, but $12,000 in the 401k. Yeah. Also, just to add, I also have $10,000 in savings that I've saved from during the pandemic,

just in case I was going to be in a sick situation. But I don't want to spend too much of that because that's what I have, if that makes sense. Okay. And do you have any kind of income coming in right now as you're in this whole position? Yes. So I'm working minimum wage, which is $15 an hour.

Okay. At least 30 hours a week, but I would be at least $450 gross. Okay. And up to 40 hours, but I would be between $450 and $600. So can you stay current on your bills with that? I can. Good. I can, but yeah, I just don't know because, just sorry about that, but just because of

the CARES Act, if I were to take out retirement, then I wouldn't be charged a penalty. That's why I bought that. Well, I know, Jonathan, and trust me, Dave and I have heard this. They removed the 10% penalty, but the CARES Act is not caring about your future. And what that means is you're still going to be responsible for the income taxes on that within two years. So I would not advise you to pull money out of the 401k at all. If anything, I'm going to have you continue to be in conserve mode. But once you get some stable income coming in, the first place I want you to go is to this $10,000 that's sitting over here in savings, buddy.

And I love your heart and your mindset. You want to attack the debt. Just don't steal from your future to do it. So here's the thing. You're in a temporary hold mode, and your head is above water. The only time we tell people to pull out of retirement is to avoid bankruptcy or foreclosure, and you're not facing either. Really, at the end of the day, the only reason you're pulling out of retirement here is to not use your $10,000. Right.

And that's really unwise. So if you want to hold the 10 and stay in conserved mode until you get reemployed at a better position, fine. But no, I would not cash out retirement. It feels right on the short term, but as a long-term play, it's a really bad move. Plus, you're making the decision based on a temporary set of circumstances, not a permanent decision. That's right. And, Dave, I'm going to ask you something. I'm going to get you to attempt to explain to me what in the world Congress was thinking.

Wait a minute. You just world Congress was thinking. Okay? Wait a minute. You just said Congress and thinking. I did. But help me understand. Why would you get rid of the 10% penalty to crack the door on people raiding out their future, but you're still going to be obligated for the income tax side within two years? I'm assuming this is a rhetorical question.

Well, I want to understand. Well, like i could help you do that yeah no uh so see you have a different set of values you actually think that they actually were trying to do something where i'm old all they i've ever seen them do is try to look like they did something okay that's all they want to do they want to look like they did something right and this looks like you just oh we were a big help we screwed you well you screwed up your whole retirement but we're from congress and we're here to help which is really ought to scare the bejesus out of you when you hear that you ought to just melt in a little pile what a world what a world when you hear that so yeah no i i you know politicians are really all about appearances yeah you know where we we came forward we were there for you

during covid but then they didn't read the 2300 page bill and so then when the implementation comes out you've got the whole pp loan ppp loan debacle you've got comes out, you've got the whole PPP loan debacle. You've got this debacle. You've got people not paying off their student loans who are able to because they have a temporary reprieve on the interest rate. Oh, Lord Jesus. Instead of using the reprieve to get out of debt, they go, oh, Congress wants us to not do do anything and so we're going to follow suit and it's just the unintended consequences of screwing around in the economy with trillions and trillions of dollars of unpaid unread documentation it's um it's astronomically stupid but that's kind of like

expected so all right william is in Cincinnati. Hey, William, how are you? Good. How are you today? Better than I deserve. How can I help? I have worked many, many hours, like two jobs my entire career. I'm 65 now and have no retirement plan, but I have about $1.8 million right now. But part of that is in cash because I sold some property. At least half of it is in cash. And I'm getting ready to sell a manufacturing business I have. We have an agreement of after taxes I'll get $1.1 to $12 million in addition to this 1.8 yeah and haven't i have no debt and no mortgage um just wonder right now with coronavirus it seems to me that companies

are not doing that well i know the companies i know are struggling, but the market's going up crazy. So I've listened to you a lot, and I know you like to be aggressive in the market, and that's the way I've been. But just wondering with the current situation what you would recommend. Okay. Well, to start with, let's just dial back here and say, you got $3 million. You got retirement.

Touchdown. Way to go, man. So how much of this money did you inherit? Are you a trust fund baby, or did you earn all this? No, earned it all. A hundred percent. A hundred percent. Wow.

America's wealthy all inherited their money. Bull crap. Here's William. Okay. William, way to go, man. So proud of you. So listen, here's the thing Okay. William, way to go, man! So proud of you. So, listen, here's the thing. You're 65 years old.

You can screw this up royally, and you'll still be okay. You got $3 million. So relax on the pressure on yourself to be like a perfect investor and perfectly anticipate. You can put it all in CDs, which I would consider screwing up royally, and you still can probably make it until you die with three million dollars can't you yes okay so we know we can do that now everything from there's gravy on the biscuit and you've been pretty good about getting gravy on your biscuit dude you've done a good job so i'm 60 i'm right behind you i have

100 of my wealth invested in real estate that is paid for, zero debt, and in growth stock mutual funds across the four types that I teach other people to do. I actually do what I teach people to do. I know it's a novel idea, but I actually do it, and that's where 100% of my wealth is, other than the fact that I own Ramsey Solutions. But aside from that, the investment wealth that I have is in real estate and in mutual funds. I have not pulled a dime of it out during COVID. I have not put extra in during COVID. I am in the midst of developing some real estate. I'm building another building next door and crap like that.

So I'm dumping more money there than I am in the stock market. But it's not got anything to do with COVID. It's got to do, I got a concrete hole over here sucking cash. So, but the, you know what I'm saying? So that, it's just, I think you're fine. You pick out some good mutual funds to invest. Or if you want to do another business, buy another business and run a little while. Apparently you're good at that.

But William, do not say you don't have a retirement plan, my friend. You've got a plan, a safety net, and four parachutes. You're good to go, buddy. Exactly, yeah. A retirement plan does not have to be in a 401k. That's right. A huge freaking pile of money is known as a retirement plan. You did so good, brother.

This is the Dave Ramsey Personality, Chris Hogan is my co-host today here on the air. We're going to open phones for you at 888-825-5225. Do you remember life before you got on the air, open phones for you at 888-825-5225. Do you remember life before you got on the plan? Money fights, sleepless nights, hiding the fact that you were totally out of control? Well, thankfully for you, that's in the past now. But there are millions of people out there who are searching for help, and they haven't yet taken Financial Peace University. If you lead a Financial Peace University class and help someone else get on the plan,

I can promise you this, it'll put a big smile on your face. FPU coordinators are normal, everyday folks, help millions of people learn how to get on a budget, get out of debt, become wealthy, give with outrageous generosity. And, of course, there's lots of virtual classes happening right now because we are in the land of pandemic. So lots of virtual FPU classes, and you can be a virtual coordinator. And with a free coordinator guide, you'll have everything you need to do to lead with confidence.

You do not have to be an expert. You can help people change their family tree. Financial Peace University Coordinators. Text to get started by texting LEADFPU to 33789. That's LEADFPU to 33789. Jennifer is in Houston, Texas. Hi, Jennifer, your question for Chris and me. Hi, how are you?

Great. I have a question. So my father just passed away, and I inherit roughly in CDs and RAs that he had put aside, like a half a million. And then in access, you know, in property and everything else, probably another $300 and something. Okay. So my question is that I don't know what to do with the R.A. because I know if I move it or roll it, it's going to be taxed. And then with all the CDs that he has that he got to me, what to do with that? Okay. The CDs don't have any taxes.

The real estate does not have any taxes. Okay. There's no taxes on inherited property in an estate size like he had. Okay? The only thing you're going to have taxes on, you will have taxes on the inherited IRA when you pull it out. You are not required to pull it all out at once. The new laws that were passed in January require you pull it out over 10 years. Yep.

The 10-year drain, it's called. And each year when you pull it out, there are no penalties on it, but you will be taxed at your tax rate as you pull it out. How much of that 500 is CDs and how much of it's IRA? In CDs, it's majority CDs, so I would say probably about 400. So you're going to have taxation on $100,000 over 10 years of time on that IRA. No big deal. No big deal. Okay. And just when you pull money, you know, each year you're going to be required to pull a

tenth of it out. So let's say it's $100,000 over 10 years, $10,000 a year, right? Mm-hmm. And so you're going to set aside a couple of thousand bucks for taxes that year on that $10,000, and then you're going to do aside a couple of thousand bucks for taxes that year on that $10,000. And then you're going to do something with that $10,000. You can reinvest it into something else or do whatever you're doing with your wealth building or whatever else. Jennifer, what baby step are you on personally right now?

Well, I'm OCD. So I, you know, my credit, I have about $10,000 in debt. I don't have a car note. I don't have a car note. Okay. I don't have a house note either. All that's paid for. But one thing I don't with my current job, I don't have a 401k. Okay.

All right. And then secondly, he left the house where he actually did a transfer of a beneficiary. I don't know if it's for me with that. So I wasn't required to go through the courts or anything like that. It automatically went into my name. So the house is up north in Chicago. So I'm kind of debating, do I sell it or do I just rent it? Is there any reason to keep it emotionally? No, no, not really. Sell it. Sell it. Is there any reason to keep it emotionally? No, no, not really.

Sell it. Okay. You would never buy a rental property that's $300,000 in Chicago if you lived in Houston. Right, right. You would do other things. Now, when you say OCD, are you being serious or you just mean you're high detail? I'm being very seriously. So I'm really paranoid about debt and buying out.

So am I, but I'm not OCD. Okay. I'm OCD about that, and that's a joke, but that's not a clinical diagnosis that Dave Ramsey has got obsessive-compulsive disorder. I mean, what are you saying here? Well, I mean, I just don't like debt. Okay, okay, good saying here no i mean i just don't like that okay okay good it's a joke i'm with you i just didn't i don't want to give you different and give the wrong advice here because but yeah so you're just you're you're very conservative and

you're very detail-oriented congratulations and so you are worthy of managing your dad's inheritance very well congratulations that's what you're going to honor his memory with your behaviors. Right, right, right. You just want to be, Jennifer, you want to be extremely detailed and be very careful with what you do. You've got an opportunity for this inheritance to be a blessing, or it can become more of a curse for you, meaning the obligation that it's bringing on if you don't take the time to really think through and be clear on what it is you're doing. So let's just clarify.

You've got a to-do list here of taking out a tenth of this each year, right, out of the IRA. The CDs, you're okay being able to look and understand when those mature and you've got them. Getting this house on the market, reach out to a real estate ELP so you can go ahead and get some guidance on it. But I want you to start to think through. You may want to even get connected with one of our financial coaches.

Get over to DaveRamsey.com. I'll tell you what I'm going to do. I'm going to gift you three sessions with a coach so you can have a game plan moving forward, knowing the timing of what you're going to do and when to do it. And now you get a chance to honor your dad's memory. That's very cool. Yeah, because the thing is here, the first thing you get when you have a situation like this is the money comes at you, and you go, what am I going to do with it as it comes at me?

And then you go, okay, what's going to be the 10-year result of this? And so you liquidate the house in Chicago. The CDs start and get invested well. We roll the old IRA over into some good mutual funds, and we begin the 10-year drain down on it. And so you just develop a game plan of where, okay, yes, it's a blessing, and yes, it's in these forms now, but what form does this money need to take to get me where I want to be 10 years from now,

which continues the legacy, by the way. So she probably ends up buying a paid-for home and an upgrade on her home in Houston. Gets a car with cash. Yeah. And continues to work and to be very mindful. And then treat it like most of this money's not there. That's right. And move on up.

And you'll really end up in a really, really sweet position. Yeah. Jennifer, thank you for reaching out. Absolutely. Well done. Open phones at 888-825-5225. Abigail is in Manchester. Or Massachusetts. Open phones at 888-825-5225. Abigail is in Massachusetts. I'm sorry, Abigail, I'm real short on time.

Ask your question quick. Hi, Dave. Can you hear me? Yes. Okay. Well, how are you today? Great. Well, my husband and I are on baby step four this summer. And in the months leading up to the wedding, we saved up $10,000 in our emergency fund, and we saved up $40,000 that we were going to use as a down payment on the house.

Shortly after we were married, my husband got accepted into graduate school. Part-time, it's going to be paid. Altogether, it's going to cost $100,000. His company is going to pay $75,000 of it. We're going to pay $40,000 of it out of pocket over the next four years. And so what I'm wondering is, would we be better off to put a smaller down payment on the house out of that $40,000 and just kind of hoard about $20,000 of it to put towards my husband's graduate school,

or would we be better off to not buy the house at all until he's done with graduate school so that we make sure no matter what happens we have the cash to get him through? Got it. Make sure you have the cash to get him through. Is grad school more important than two years of house? What's he studying? He's getting his MBA. Okay. And right now he works in the pharmaceutical industry.

He makes about $52,000 a year. Okay. All right now he works in the pharmaceutical industry. He makes about $52 a year. Okay. All right. Will you move after he finishes? Probably not because he'll need to stay with his company for a few years because they're paying for the graduate school. So he would have to pay them back if we left. Well, the further you get through this,

the less risk there is that you're going to end up needing the cash. And so maybe we don't say no house until after grad school. Maybe we say no house for year one. And let's see where we are. If everything's feeling really strong after year one, you've got one year left, and you're still sitting on the 40, then you probably could go ahead on the house, and you're going to be fine. Yeah. Don't let that money burn a hole in your pocket.

But I love her mindset of going school with cash. That's the only way to go. It is. It really is. Don't do it otherwise. Nope. Don't do it. You'll get yourself into a mess.

That puts us out of the Dave Ramsey Show in the books. Chris, thanks for hanging out. Thank you for having me, sir. Number one bestselling author Chris Hogan is sitting beside me. This is the Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows.

Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.