The Ramsey Show - App - The Ramsey Show Reacts To Student Loan Forgiveness (Hour 1)

Episode Date: August 24, 2022

Dave Ramsey & Rachel Cruze discuss: The Student Loan Forgiveness announcement, How to find a good deal on real estate investments, Managing a life insurance payout, Navigating credit scores after paying off debt, How to decide if you should sell your house to pay off debt.   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, it's the 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. We help people build wealth, do work that they love, and create actual amazing relationships open phones this hour rachel cruz number one best-selling author ramsey personality my daughter is my co-host today open phones again triple eight eight two five five two two five well

rachel i was right and i was wrong. Oh, I'll take both of these. Yeah, these are good. I was 100% wrong. I thought that Washington would never actually do anything except bloviate and carry on about student loan forgiveness. President Biden is announcing today that he is actually doing it. I'm guessing that he's doing that with an executive order, and I'm guessing there will be some legal challenges to that because I don't know if he has the legal right to do that with an executive order. I'm not a constitutional expert. We'll see about all that, but he is doing it.

The thing I was right about was I was 100% sure that this ridiculously failed presidency was going to do a Hail Mary going into the midterms. And I knew, I told you guys, I've told you guys over the air here several times in the past several weeks that he was going to do an announcement this week, the week before the student loan interest rate forgiveness, repayment was going to restart on August 31st. I was 100% sure he was going to extend that and announce something about some kind of student loan forgiveness i said that was going to happen

i also said that when it happened it would not amount to anything that it would be a bunch of political crap and when you read the fine print that nothing would happen but this appears to actually have some teeth something well i was wrong about that and as we're speaking right now though the press conference has not gone live we've just seen what white house is releasing the details well they've released some of it yes but i'm curious here in the next few hours when the press conference what what actually the details of it and what ends up happening because it appears it appears that if you have that up to ten thousand dollars will be forgiven if you make less than 125 000 a year in student

loans it appears that public loans not private public not private um and one guy already tweeted and said my mortgage is now self-identifying as a student loan so just to just let you know um but the not working but i'm sorry um but the second thing that happened was uh if you're if you're a pell grant recipient uh meaning that you were in there on a, you were struggling, you're at the poverty level or whatever when you went into school, then you get up to $20,000 forgiven if you make less than $125,000 a year. Yeah. This appears to affect about 20 million student loans. I mean, student loan holders. Yeah.

And so out of the 43 million so it's pretty substantial so here's our take on this we've been talking about it around here for a couple days because we you know they they telescope that this was coming telegraph this was coming in a sense um that number one first and foremost if you are a ten thousand dollar student loan person and you make less than 125 000 and that's this is getting ready to be forgiven uh we're happy for you we want good things for you we're happy for you we were glad you got we want you out of debt as quickly as we want you to get out of debt and we're happy for you as individuals we're also simultaneously angry on behalf of the people who paid off their loans and uh feel screwed and you know why they feel screwed is because they got screwed that's why they feel

screwed and um we're also angry that this is an obvious political ploy when this presidency from an economic standpoint is the greatest failure since Jimmy Carter. We have the highest inflation. The gas pump will make you puke. Fill up your buggy at the grocery store. It'll make you puke. Your interest rates on your homes are up. The housing market has slowed down.

We're in a recession. We may be. We were with the last two quarters. We were in a recession. We may be recovering from a light recession. It's not much of a recession, but it's a recession, which, by God, the economy is not prospering. Oh, and they just passed the largest spending bill in history to add to this. And this move of the stroke of a pen of $10,000 forgiveness amounts to about $300 billion, with a B, more debt.

So you people listening just paid off all these other people's student loan debt. And your grandkids paid them off. And so while we are happy for you individuals, and we are, this slide towards socialism with this extreme left wing nuts, it's out of control. it's completely out of control this is a failed presidency the the democrats are going to have a bloodbath at the midterms they're going to get thrown out like no other party's ever been thrown out and you can go ahead and mark that word down and if i'm wrong i'll come back and say i was wrong like i did a minute ago

but if i'm right i'm gonna say I told you so, too. But it's coming. Americans are sick of the wackiness coming out of the island of misfit toys known as Washington, D.C. They are sick of it. And they're going to fire a bunch of people's butts with a D after their name. And this guy, this little move right here is not going to save it. It's not going to keep that from happening because everybody's pretty aware that when you walk up to a gas pump and there's a sticker on it with a biden that says i did that and you're looking at

your gas you know i filled up my truck i had you know when they cut it off at a hundred dollars you have to do it again because the so i'm like oh i'm running my my debit card in there in and out you know people know what's going on in the midst of this, right? Just so you know, before we went on the air, I was like, hey, as we talk about this, let's do like a book about the American and a little bit about political. Because here's the deal. Regardless of who gets in it. It is political.

It is. That's the only reason it happened. It is. But regardless of who gets in in November, that's not going to change your life. People listening, like, regardless of what happens in November and who's in Washington, D.C., they're all an island of misfit toys. And if you want to change your life,

you have to believe in the power of yourself and that you can do it. Absolutely. And you also ought to call your congressman and tell him you're going to fire him because they continue to make student loans. That too. So what about the guy

who takes out student loans next week what are you going to do to help him you you bozos keep making these loans but they're so bad you have to forgive them because americans are being oppressed by you this is talking out of both sides your mouth this is so intellectually dishonest if they're so bad you have to cancel them why are you continuing to make them you should at least stop making them before we start start forgiving them it's just intellectually dishonest and it's it's an obvious political it is yeah it's a ploy yes it was a campaign promise for a year and a half you've been in office why did it take you a year and a half if i make a promise i don't have to wait a year and a half to fulfill it i can just do it it's just like that god this is aggravating

well and it's just the whole industry though because the whole industry is so predatory it's so predatory and he's 18 year olds you can't buy beer but you can go a hundred thousand dollars in debt yeah it's just dumber than crap well and the people that and these kids too that like that's the that's the too, that's the first part of what you were saying, of the individuals that are happy. Student loans, it is this lie that has been accepted.

So stop it. So those of you that have your loans forgiven, we're happy for you. The rest of you, we're pissed off as you are. Because you got to pay the bill. And nobody asked you if you wanted to pay the bill. And nobody asked you if you wanted to pay the bill. You just got told you're going to pay the bill. That's not nice.

It's bad politics. The timing is obviously politics. This is the Ramsey Show. We'll be right back. Rachel Cruz number one best-selling author Ramsey personality my daughter is my co-host today as we take your questions about your life and your money and before we do pick up the phones i want to reiterate what rachel was saying because that is after all the overall stance of ramsey is that if i i the other problem with the student loan forgiveness is it makes you feel more dependent on washington for your. And they have never been good at delivering prosperity to you. You are the secret sauce in your life.

You take control of your life. You get up, leave the cave. You kill something, you drag it home. If you're sitting around waiting on Washington to fix your life, this is like asking the DMV to be efficient. You know, this is not going to work. Your life's going to suck. So we want you to have an awesome, prosperous, abundant life. And that is never dependent upon the government. They have never delivered an awesome,

prosperous, abundant life to anyone except defense contractors and lobbyists but other than that the rest of us have to go make our own way and you know the more people's emotions and psychology and spiritual leanings are toward dependence on the government the more your life is going to suck and we don't want that for you we want you to win the people that we know that have wonderful lives that become baby steps millionaires that get out of debt that are outrageously generous that have great marriages none of that was delivered to them in an envelope from dc because there's also something to be said and we talk to them every day on the show people that have paid off debt and the emotional process that it takes and the sacrifice, like the things that are built in that process

of baby step two of paying off debt. Yeah. The growth. There is something there that carries you when you become wealthy. And so one of my fears is I'm like, I just don't want a stroke of a pen. Again, if it's you that has that $10 thousand dollars and it's done, we are here. We want you debt free. We want you debt free.

But also there's an easy button that they're allowing this to occur. And most people have more than ten thousand dollars on average. It's thirty eight to forty two thousand dollars. So there's so much more. And so that's not good. But now they're going to sit around, wait on the next wave of forgiveness like they sat around wait on the next wave of biden bucks or the next wave of um ppp loans or the next wave of covid bailout of some kind out of washington from both parties if you become dependent on that uh you've got to wean yourself from it i mean you got you got to get off the

off the dole from washington in order to be prosperous and um it's just it's just a sickness that runs really it's a rotten smell in the air um for for the for the nation as a whole for what drives our economy what drives our freedoms all of that and so anything that just causes you to be more and more dependent I mean I came out against the PPP loans I came out against all that stuff in COVID. I didn't take any of it. I told churches not to take it because I told them it was going to cost them back later. I tell people don't get on the government dole because once you break through that and

you just like, oh, man, you just become dependent on it. Yeah. And it's just it's it's really scary. All right. Let's go. The phone's open. Phone's a triple eight, eight, two, it's really scary. All right, let's go to the phones, open phones at 888-825-5225. Kevin is in California. Hi, Kevin. Welcome to the Ramsey Show. Thanks, Dave. Great to be here. How can I help? So I'm on baby step seven and our next financial goal is to invest in real estate. It's going to be quite some time before we can afford

to buy something in cash, but I'm wanting to educate myself on the process in advance. And several times I've heard you say that you should never buy rental property at retail value. You should always get it at a discount. And if there isn't going to be a housing crash, which I was expecting, but you've given valid arguments as to why that's not going to happen, then how do you go about finding these deals when the competition in the area is so steep and so much of the competition knows more about real estate than I do because they're experts and I'm not? It's hard, but they're there. There's not many deals out there today, but as the economy continues too slow

and we don't have 27 buyers lined up every time someone puts up a for sale sign then you're going to see more and more deals happen the other thing that's going to happen is there's been virtually no foreclosures for the last two years because of covid moratoriums and so there's a backlog of foreclosures getting ready to hit the market um and there may be some deals in that pile there may be some stuff that pops up in that pile i don't know for sure but there may be um the uh but you know the first deal is the hardest it's like the first team member i ever hired here was much harder than the 1000th team member that we hired here it was much weightier that it was a decision i wasn't used to

making at the the process and the steps it was very very hard so uh but you know we're always you know old buddy of mine uh 30 40 years ago that was a house buyer um used to say we're driving for dogs and he would drive around looking for a house it was a dog. That means the weeds are grown up, the gutter's hanging off, the bushes are overgrown on the house. It looks like an estate deal that's gone sideways. It looks like a foreclosure that's happened. It looks like there's something distressed about the property. And so I smell a bargain when I see that kind of stuff.

If everything's in perfect condition, there's not a blade of grass out of place, and an OCD member of the community is out there picking every little weed out from around their bushes, that's not going to be a deal usually, you know, and so you're driving for dogs, you're looking for that, you're going to make contacts with estate attorneys, you're going to make contacts with foreclosure attorneys, you're going to make contacts with marriage counselors, whoever you can find in the area that might know where there's a property that needs to be sold. Well, divorce has caused this. I know, I know. And some, I mean, you're a blessing if you come in and buy a house and it helps people that are going through a divorce. Yeah, but not at a deal. I mean, well, it's not a deal. It can be at a deal.

I mean, it's rather than them get, you know, messed up, you know, and so get into foreclosure or something. So sometimes, you know, you just clean. Somebody's in a situation where they just want the thing turned quick. Yep. And that's where these little signs up, we buy houses, and, you know, all that kind of stuff. They're all offering $0.70, $0.65, $0. 75 cents on the dollar and is that the formula you you use i used 70 cents in the old days minus repairs i was buying houses and fixing them and

flipping them or fixing them and holding them commercial real estate i'm a little different on it's a little harder to do that because there's more variables involved and we mainly buy commercial real estate today i've got a bunch of houses but they're kind of left over from the old days but um yeah it's a just take your time learn and buy the deal and if you can't buy the deal that means you're just not ready to buy you haven't found it yet you haven't looked hard enough and when i was doing these deals a thousand years ago kevin i was buying foreclosures for a living. I would go through 200 deals to buy one. It is not, I mean, even when I was looking at foreclosures, not all of them are a deal. Some people had more owed on the house than it was worth. And that's why I was getting foreclosed on. Why would I want to pay that for it? And so, you know, I'm scratching and clawing

through a whole pile of stuff, looking for a needle in a haystack. And that's what you're doing. Take your time, take your time, take your time your time because dude if you buy a four hundred thousand dollar house for 250 000 you know you've made money coming out of the gate which is kind of which is your strategy for investment make money make money at the buy make money at the buy there's very few pieces of property i've ever paid retail for, very, very few. And I've come out on all of those as well because they do go up in value too. But it's better to start out ahead of the game from day one. Josh is with us in Charleston, South Carolina.

Hey, Josh, what's up? Hey, Dave, I appreciate you taking my call. Sure, how can we help? Well, I'm looking for your advice today. Just a quick background. My dad introduced me to you probably 12 years ago when I was in college. And so I guess I know your baby steps and your advice most of the time backwards and forwards, but I'm just finding myself in a position that I really need your guidance on what you would do if you found yourself in that situation. So earlier this year, in January, I lost my father.

Oh, sorry. Very suddenly. And thank you. And so I am, my mom's looking to me for advice as far as what to do with the life insurance. Okay, we'll help you with that. You hang on, and we'll come back in this break and make sure we get you some help on that. I'm so sorry for your loss. This is The Ramsey Show. ДИНАМИЧНАЯ МУЗЫКА Rachel Cruz, Ramsey personality, number one bestselling author, is my co-host today.

Open phones at 888-825-5225. We're talking with Josh. Josh is in his early 30s. His dad passed away in January, and he's asking what to do to help his mom. That's about how far we got in the conversation. Josh, I'm so sorry. I appreciate it. What happened to him?

You know, the doctors ruled it a heart attack, but it was something that he was fine at lunchtime. He walked into the ambulance and didn't come out. So it was something that just happened something happened very very suddenly how old was he 57 whoa oh gosh i'm sorry wow man oh man yeah and so yeah and how much how much life insurance did your mom get around 350 000 okay wow that's it he had all of the debt paid off except for his vehicle, which we're working through now just to sell it. Right.

My mom purchased the car in cash, and so now she just has the mortgage. How much is the mortgage? The mortgage left is $225,000. Okay. What does she do for a living? Well, she was working with my dad. So that has just come to an end as far as the income from that. I'm in real estate.

I've been in real estate the last five years. And so she works in real estate with me, but she's just getting started with that. So she should have some income, you know, over the next 12 months, you know, maybe between $30,000 and $50,000 is what I would expect. So she's in her 50s as well? She's 57 as well. Okay. He always managed the money just from the beginning.

They were married 37 years. They've been together a long time. And so this is all really new for her. So we've met with a couple of financial financial advisors and, um, you know, I just, I feel like it's so volatile that I don't want to, you know, encourage her to do something where she might lose 120% with, with the market the way it is.

I feel like her mortgage is almost too much to put all, you know, just to pay off the mortgage. I don't want to put her in a bad spot with cash flow. If she has zero payments in the world, it doesn't put her in a bad spot. That is true. It doesn't take much to live when you don't have any payments. Right. So what do you make a year? I made $ 400 last year I probably won't make that this year but probably 250 you know

here's what I would do um Rachel you chime in any time the I want you to to go through Financial Peace University together because it sounds like it's time for her now to learn how to handle money. She needs the tools and the confidence that that competence will give her, and you go just as moral support, okay? And I'll pay for it. I'm going to give it to her, all right? We're going to put you on hold and sign her up for Financial Peace, number one. Number two, while she's doing that, I would pay off the house.

That's going to leave her $100,000 and some change. I'm going to set a portion of that aside as the emergency fund, and I'm going to sit down with a smart investor pro, and I'm going to invest the rest. It's not much, but I'm going to invest the rest. Here's what i'm counting on i'm counting on her being able to eat because she starts selling houses and that gives her plenty of money with no payments to exist if that is an absolute debacle and doesn't happen

while she's getting a different job you make two hundred thousand dollars a year it won't take much to feed her if she has no payments that's what i would do okay and uh i mean you're making a couple you're making quarter mail if she makes nothing and you you know you pay a few of her bills here or there to help her turn the corner and because she doesn't make it in real estate and she goes on to something else but she can get a job and survive and and prosper at 57 years old she's got a lot of life in front of her and no payments in the world and the peace in this time of grief that that paid-for house will give, and the peace that that paid-for house will give her while she's out trying to sell real estate,

it takes some of the desperation out of her voice when she's talking to somebody about the kitchen. She's got a lot on her. She's got a lot on her. I'm trying to take some of it off. Yeah, and I would encourage her, too, Josh, not to do anything major for 12 months. I mean, obviously paying off the house is a big part of it, but as little change as possible that can happen for just her grieving process and you guys as a family walking through it I think is really important.

But, yeah, giving her the ability to know that she has control now over her money because um we see it we see that story so often right that the dad takes care of the mom financially she kind of knows some of it but like he he does the nuts and bolts or vice versa or vice versa yes and then when that spouse something happens um that other person they don't have the confidence and so in that that fear can be paralyzing so giving her the ability to know that she can make a monthly budget knowing that she knows and understands the investing world you know to a high level that she knows where she's putting her money and she's being smart about it and she knows she has a plan for retirement,

like all these things that you look at in your financial life, as much of that, that she can start to understand and plan for herself will give her peace because all the, all the question marks cause a stress and fear. And as many of those questions that can be answered for her, which I think financial peace university does a fabulous job walking through so much of this big stuff. But but josh you're a kind you're

good you're a good kind man you're a good man you're a good son um and just for those of you that listen to the show all the time we generally tell people after the passing of a spouse try to make no major decisions for at least six months maybe even up to a year so take the insurance money park it in a cd nothing fancy and just sit and cry for a while and let your brain clear of the waves of grief before you start making major decisions by the fact that she has now chosen a career and gone out there after six months and by the fact that she's meeting with financial advisors and they are telling her to invest the money um and he's considering that that's what what took me all the way to paying off the house pretty quick.

Because, you know, she has moved into the next stages. There's proactive. She's proactively moving past. And so, you know, if she was still sitting there trying to figure out what she was doing and I heard paralysis or I heard grief was still holding her right now, I would have just said park the money a little while longer but not invest it yes so that and very rarely on the show do we say to uh reach out and take care of family members in an eight because most of the

time it's enabling situations the calls on here I don't think he's going to have to no no well no and it's not enabling situation like if if a worst case scenario comes like what you said she's she's starting this new career path in real estate it's not working but her but i'm helping her there is a level of this generosity piece of the message of of when you do well with your money right when you handle it well and you're smart with it there's a generosity piece that doesn't have to be an enabling piece to people in your life that you love right well the point being when i pay off the house and it leaves just a hundred thousand bucks left okay immediately what starts going through his and her mind is how am i gonna pay my bills if this

doesn't work well number one you don't have to sell a lot of houses to make a living when you don't have any debt yeah it doesn't take a lot so she she just plinks one ever so often she's gonna be okay she's very unlikely to fail to that degree but worst case then i'm all the way back to right right she's got this backstop yes of a son that's very prosperous and as a temporary measure a sustainability measure not an enabling measure so you know because that's what goes through your head when I take a big most of your cash and I pay off your house with it, then you go, oh, God, how am I going to eat then if this doesn't work out?

Well, you've got to think it through. Number one, it doesn't take many houses she's got to sell. Number two, she's going to get another job if that doesn't work. Number three, she's got the backstop of the prosperous son. So all those are temporary things, and very, very unlikely that she ever gets to any of them. Probably what's going to happen is this lady is going to step into her stride and be a world-class real estate agent.

And it's the next stage of her life. The encore, the bow after the curtain call, and the song you play after everybody thought you were done. And that's what she's going to do. And it's going to be a big deal. And she's going to have a great life, and it's going to turn out okay in a really tragic and a sad situation this is the ramsey show Every time you hear someone here on the air do their debt-free scream, it's because at some point they said,

I've had it enough! Enough! i'm not living like this anymore and when you get mad like that and do what they did your life will change right now inflation stupid credit cards man it's everywhere stuff's killing you you got to start to believe that you're not, you can start to believe you're not in control with your money, but the fact is you are in control and you can control it and you can control the thing that controls it. And that's you. The person in your mirror is your solution and your problem. You go to financial peace university. We're going to show you how to change your life and change your future. We've done that with this proven step-by-step plan for nearly 10 million people, helping them get out of debt, get on a budget, build wealth, be outrageously generous, learn to work with their spouse about money.

Guys, stop letting debt and money stress control your life. Say enough and take back control. Start Financial Peace University at RamseySolutions.com slash enough. RamseySolutions.com slash enough. Jordan's in Raleigh, North Carolina. Hi, Jordan. How are you? I'm doing very well, Mr. Danzy and Mrs. Cruz.

How are you guys doing? Great. How can we help? So my wife and I had gotten out of debt about two years ago, paid off $53,000 in 19 months, and now we have a net worth about 120. The only thing that's still sticking around from back when we were in debt is our credit scores. And because we don't have any active debts or active accounts, they're just going down, and it's creating issues for us purchasing a home. When did you pay off the last debt?

It would be 23 months ago. Something's wrong. Never seen it take 23 months for your credit score to disappear. Usually it disappears long before that. You've got an open account somewhere. That's what I thought, too, until I went through each of the three bureaus, opened up all my accounts, they all say paid and closed. And I've even called each of the three bureaus.

Hmm. Do you own a home now? No, sir, we're renting. Is your landlord reporting? Well, no, there shouldn't be any debt because we actually got a deal about paying 12 months in advance. But are they reporting to the credit bureau? Do you know? You're not seeing it on there, right?

No, sir. Man, I'm shocked because usually there's still a bad debt lingering out there or an open account. You just didn't get it closed, and it's still a bad debt lingering out there or an open account. You didn't get it closed. And it's still showing up. That's very unusual for it to go 23 months and not disappear. Matter of fact, I've never heard of it before. Not saying it can't happen. I'm just, it's making me scratch my head.

But you're continuing to see it, Jordan. Go down. Get worse and worse like every time you check it. That's correct. How often is it dropping? I've used Credit Karma, so I probably open it once a month just to see if I'm down to nothing, but it's probably once a month I'll go down a couple points. Just a couple of points.

Yeah, like the graph looks pretty linear, two or three points a month. Yeah, it ought to be dropping like 50 points a month. It's usually on average around 18 months, Jordan, so I would be... I wonder if... Is there something I should be saying to the credit bureaus when I call them to ask them about it? Yeah, ask them them since you have no accounts open why it's not disappearing i don't know i don't know i've never heard of this before i'm not saying it can't happen or maybe they haven't because they don't publish their algorithms

they don't tell us anything the only way we know anything is just observing what you guys are all doing out there and so we're just not running into this um yeah yeah i would want to know why that is happening and i don't know why right now i don't i don't know how to help you but yeah your goal is for that stinking thing to disappear what's it down to um believe it was i checked today 538 was what it was. It can't get much lower than that without disappearing. That's about it. So maybe another month or two, it'll be gone. That's my hope, since I don't know the answer to your question.

I'm sorry. But I do know that this, you know, usually six to 18 months it disappears from the date of last activity and 100 of the accounts have been dealt with and are closed now if you've got an old bad debt not you jordan because you don't you've been very diligent very careful but if you're listening to us you got an old bad debt from 1972 hanging out there and it's just still sitting there it'll stay there forever well and that's an important point at least to make jordan or that that you're making in this that all of you on track of paying off debt as you pay off debt the mathematical equation of how your credit score is calculated is based on you being in debt and paying on your debt on time but when you stop

accruing new debts when there's no new types of debt that's happening and you're paying it off you are going to see your credit score drop so some people do freak out because like oh my gosh my credit score and the only reason that really is a bit is a factor is when you're going to buy a home and the goal which is not happening with jordan right this moment but the goal is for it to become undetermined. You can't. There's no factors to calculate the credit score. Then you can do manual underwriting to get a mortgage.

So you can't get a mortgage while you're on baby step two. As you're paying off this debt, your credit score is not going to be good, but we don't encourage you to get a house anyway. That's right. That's right. So Jordan, I'm hoping, yeah, in the next, gosh. Yeah, I hope it wraps up for you. Three months if not i would keep calling you know i'm gonna keep pestering people and try to find the answer to the riddle if i'm you but i don't know the answer to your riddle so i appreciate you pestering us though we're that's what we're here for

zach is in charlotte north carolina hey zach how are you hey i'm good how are you great what's up hey i was listening to your show actually this morning from yesterday, and I had a question stop me in my track. A lady paid off debt-free scream, and she had a house that really prompted her to get into it, like a flood or something. So I'll tell you my story. I'm about 18 months into Baby Step 2. I have about a year left and twenty five thousand dollars left on that

and i own a home and i'm trying to determine if i should sell that home because i'm in baby step two do you like do you like the home i do yes okay how much is your house payment uh my house payment's 800 a month here's the kicker though. It's a duplex. It was built as a duplex. And I have a renter that pays me more than that. Okay. And what's your household income? I bring in about $65,000 a year. Okay. No, Zach.

Go ahead. No, I don't think you need to sell it. No. You're going to be out of debt in a year, so no. I mean, now some people choose to go radical, and some people listening are crazy and would live in a tent to get out of debt as fast as possible. But we don't recommend you selling your house

to get out of consumer debt. Now, if your house payment is insane and a high percentage of your monthly take-home pay, then yeah, you want to look at the calculation because we want to get you out of debt as fast as possible, and you may be house poor. Or if you're going to sell it anyway because you hate it, then go ahead and sell it, and that just accelerates the process.

But if it's a house you want to keep five years from today, you plan to still be there. Three years from today, you still plan to be there. Then, yeah, pay it off and hold it. That's what I would do. Every single time is not required that you sell a house you know no no it's not but um you know some people do it out of convenience some people do it out of zest and excitement and gazelle intensity um but most of the time we tell people somebody

sell houses if they were going to sell it anyway because they don't like it and if um or if the house payment's too high if the house is the problem and your house 50 percent of your income that kind of it's hard to get traction yeah that puts you in a mess so then yeah we would dump a house but house is the most expensive thing that we own to sell selling some mutual funds no big deal selling a car a little bit bigger deal but still not that big a deal uh you can get in the car i mean but but when you sell a house you have to move moving is a pain in the butt when you sell a house it takes up a bunch of your emotional bandwidth a bunch of your time because you have to change your dresses on every stinking thing

you're selling a house and moving is a you know it takes a lot out of you out of your family out of everything else uh it's not as easy a transaction as most other things so we it's the last thing i do is tell you sell the house and in your case no i wouldn't sell it that's simple puts us our of the ramsey Show in the books. Our thanks to James Childs, our producer, Andrew, Zach, Ben, Austin, all in the booth making this show happen. I am Dave Ramsey. We'll be back with you. 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.