The Ramsey Show - App - There's No Shame in Making Money (Hour 3)

Episode Date: April 15, 2019

Get Started on Your Debt-Free Journey We’ve made it even easier to get started taking control of your money.  Learn How! How Fast Can You Be Debt-Free? You don’t have to be in debt for the rest of your life! Answer 5 simple questions and our Debt Calculator will show you how quickly you could be out debt!   Get the Complete Guide to Budgeting. Budgeting is often misunderstood and overcomplicated. It doesn't have to be! We made it simple. After 90 days of budgeting with EveryDollar, 9 out of 10 users feel more confident in their financial future. Get the Complete Guide to Budgeting.   Get the Coverage You Need. How does your coverage stack up? This Coverage Checkup will show you what you need (and don’t need), which questions to ask, and where to get the best coverage.   Find the Right Financial Advisor. Finding the right financial advisor doesn't have to be complicated. Our free guide makes it easy to know what questions to ask so you can make a confident choice. Get the guide!    Listen and Watch Anytime, Anywhere.   The Dave Ramsey Show app lets you download episodes for offline playback, customize your content, and see what’s coming up!

Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice.

I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. Malcolm is in Austin, Texas. Hey, Malcolm, welcome to the Dave Ramsey Show. Hey, Dave, thanks so much for taking my call. I've been a longtime fan since you started doing the video in 2013. I graduated college, and my wife and I got married, and I've been watching and listening ever since, so thanks so much for your material. Thank you.

Yeah. So I'm running into a good predicament, but one that I kind of grew up listening to Papa Dave and kind of running into a new situation here. Long story short, graduated with my MBA last year and on path to pay off all my student loans by the end of the year. Great. But it's tax day today, and I'm trying to figure out, we're going to be, with our conjoined income,

we're going to be over the limit for the IRA. So trying to figure out if I should hold back and put money towards the cash that I'm sitting on, if I should put that money towards my student loans or put it towards contributing to my IRA and kind of just moving forward with the plan still on or focus on a 401k later throughout the business that I now started out at my MBA. Okay.

Well, you've never heard me tell anyone to do an IRA while they have student loan debt, right? Sure. Have you? No, no, I haven't not. I'm just worried about that cutoff kind of as we move forward, an unfortunate good situation, if that makes sense. There's not a cutoff. You're going to make household income making over $200K.

That's your problem? Yeah, we are, yeah. Let's do backdoor Roths. Do you not know what a backdoor Roth is? No, not as familiar about that. Okay. Well, number one, regardless of if there's a cutoff or not, there's other ways to invest.

And I would stick with the baby steps, and I would pay off your student loans, which is what you need to be doing. Now, aside from that, the backdoor Roth, when you get ready to do it, which is not this year, but if you're making over $200, I do a backdoor Roth. I make considerably more than $200,000. And all you do is you open an after-tax IRA, and 30 seconds later you roll it to a Roth IRA. Okay. There is no limitation on rollovers on income, and there's no limitation on opening after-tax IRAs.

So you're allowed to do all that. I do one. My wife does one. We do them every year and have for many, many years. Someday they'll stop up that loophole possibly. Are you working? What are you doing? Yeah. So my wife works as a W-2 and I actually started an S-Corp and I own small businesses in the central and surrounding area of Texas. Okay. And so you've got the opportunity to either do a simple 401k or a SEP, either one. Yeah, and that's what I was considering

opening up a 401k for this year. I was trying to capitalize on the fact that last year... Not this year. No? Okay. Not this year. You're not doing any investing you have student loaned at. I thought you said you'd listen to me for years and knew everything I said.

I've got just about 75. I'm almost done. I'll be done in the next, like, eight months. Good. I'm pretty sure you'll have your emergency fund in place, and you'll be ready to go. And you've got plenty of time. You're going to be very wealthy. You'll make a lot of money.

And don't overthink this stuff. Lay the foundation before you put the roof on, sir. Okay. Thanks for the call. Open phones at 888-825-5225. Nicole is in Dallas. Hey, Nicole, welcome to the Dave Ramsey Show. Did I push the button?

Let me try again. I think I messed it up. Nicole, are you there? I must have messed it up. Check on again. I think I messed it up. Nicole, are you there? I must have messed it up. Check on her and see if I messed her up. All right. Molly is in Colorado Springs. Hey, Molly, how are you?

I am wonderful. How are you? Much better than I deserve. How can I help? Actually, so I have a question about how to get my husband on board with this. We're about $70,000 in debt. He's been gracious and let me focus on school for the last year. I'm graduating this May with two bachelor's degrees.

He makes about $47,500 before taxes per year. I'm currently not making anything, but in May I will be getting a job for a service and bringing in about $20,000 to start just kind of an internship type of thing. Why are you doing that if you have two bachelor's degrees? Because I need the field school to work towards a Ph.D. Oh, okay. Why do you want a Ph.D.? For archaeology so I can do international work.

Oh, okay. All right. So we've been doing decent, I suppose. I had a car loan at one point. I got it paid off in two years because I started listening to you, listening to you very newly. And so I realized that was done. So I just knocked that out because we still needed the car. We have no car debt. We have a little bit on credit cards and quite a bit in school loans between his and a little

bit on mine. Um, my main question is, is that question is that he's very down on himself currently, so I'm having a hard time getting him on board with the budget and having confidence in our ability to get through this. So I just kind of need your advice on how I can get him to go with me. So he generally can't visualize winning at anything right now. Not really. Why? He's pretty down about it. Why? I think he's feeling a little overwhelmed with the amount of debt that we have.

Once I start working, we can get out of this in about two years if we really stick to it. And why can't he see that if you lay out the math? I don't think he's got the confidence. No, really, it's a five-second math conversation. It's not even his confidence is not needed. All he's got to do is go to work. If he can get up and go to work every day and doesn't get fired, and then you go make that, it's a math thing,

you are debt-free in two years. Right. And you can see that, and I can see that. I mean, you don't have to have confidence to see that. That then could give you confidence. It could give you hope where you maybe felt trapped or overwhelmed. When you do the math, sometimes it's a way into hope when you were hopeless. Sometimes math will help you do that.

Right. But I think what's happened is I don't think you guys have sat down and done math i think you've discussed concepts and you know what else i think i'll just let me throw this out there and see what you think i could be wrong but i think he thinks that he's going to spend the rest of his life paying for you to go to school the rest of your life no fortunately i've had scholarships that got me through the um my school are from before I had the scholarships in my associate's degree level. He doesn't feel like he's going to be trapped in this cycle for the next 10 years while you work on your Ph.D. to be an international archaeologist.

No, no, no, no, no. I've been very fortunate to be able to work the way through my upper level degrees. I asked if he felt you're not earning an income, though, worth the crap while you're doing all this stuff. Right. Does he feel like your family is trapped because of all of that? That could be. I haven't really talked to him about that. I'm not sure.

I'm just guessing. It sounds like you're on a really long path to get to an income. It's okay. But if that's, we're dealing with him having hope issues, then we've got to get into that. I think you guys need to sit down and actually, with a pencil and paper, do some math. And I think you need to have some frank conversations about your career choices. And make sure he's on board. He's on board.

I'm on board. I don't care. This is the Dave Ramsey Show. You know, I get asked all the time, at what age should I buy life insurance? Let me be clear. If you have a family, if there are people depending on your income, now is the time to have term life insurance. I don't care if you're 20, 30, 40, 50, or whatever. Your age is less important than your financial situation. If you have debt and a lack of savings, it makes no sense to risk your family's financial well-being based on the cost of a term life policy. Term life rates are just plain cheap, even if you're not in perfect health. And the best way to compare those rates is through Zander Insurance.

Zander only sells the plans I recommend and shops among the top companies to find the best rates and the right coverage for you. Call 800-356-4282 or visit Zander.com. You got no excuse to put this off, folks. Bad things happen to people all the time, regardless of age. And it's your responsibility to deal with this. That's Zander.com or 800-356-4282. Thanks for joining us, America. We're glad you're here.

Open phones at 888-825-5225. With over 15 million of you listening this week and every week, we know how valuable the stories on this show are in giving you the motivation, the inspiration on your financial journey, and we want you to be able to get that motivation whenever you need it. So give this a try. You can find The Dave Ramsey Show on Amazon Alexa or Google Home. Just say Alexa or you say OK Google.

Play The Dave Ramsey show. It's that easy. And you can listen to the entire Ramsey network of shows, which includes Chris Hogan's show, Ken Coleman's show on careers, the Entree Leadership Podcast, Rachel Cruz,

Business Boutique, all on your smart speaker. If you want more information, just go to DaveRamsey.com slash smart speaker. But if you've got an Alexa and you've got the Amazon Alexa or the Google Home, you just say, Alexa, play the Dave Ramsey show, and it will. Or, okay, Google, play the Dave Ramsey show, and it will. There you go. So pretty cool stuff.

Now, most of you have one of our 604 radio stations in your area, and you can tune in that way, and we would love for you to do that. That's our primary way of reaching you. We also, of course, have about 6 million of you joining us on our podcast every day, and this is yet another way that you can tap into that um what's all set up with the guys over at google and the guys over at amazon or the gals or whoever does that kind of stuff and that's pretty cool i um those well yeah yeah so if the some of you alexa like runs your whole life.

Or Google, you know, the Google Home runs your life. So you do everything. I mean, I know people have their house lights on it and everything. They just say, turn on kitchen lights, and it goes. That's amazing. That's crazy. So I can't even get my smartphone on. But anyway, the rest of you are smarter than me.

And so apparently all you have to do is just say it. Alexa, play the Dave Ramsey show. Hey, we're cutting edge. That's all I can say. Nicole is with us in Dallas, Texas. Hi, Nicole. How are you? Hey, Dave.

I'm awesome. How are you? Better than I deserve. What's up? Okay. So last year, my husband was killed on a job site. And we have a nine-year-old son. And we received work insurance checks.

And I don't need this check for my household income. And I need to know how to invest that so it's not a taxable event for him or I when he turns 19. He'll be 19 when he graduates from high school in a public school. And I just need to know how to make that a non-taxable event. When it was paid to you, it was either taxable or it wasn't. It's a non-taxable because it's an insurance premium being paid out through the state of Texas. Okay. And so the only thing that would be taxable in the future would be the growth on the investment. Correct. And there are no investments that grow completely tax-free except Roth IRAs.

Now, your son is nine. Nine. And you are working now and are providing for the family without the need for this money. Correct. What do you do? I'm a transportation broker. Okay. And what do you make?

I only draw a $45,000 salary out of my company a year how old was your husband 41 i'm so sorry so construction accident or something else construction accident devastating yeah okay um well and you you got your budget lined up. Yeah. And you're making it on 45. Yeah. We also have other non-taxable. We have SSI coming in for my son. Right.

From my husband. Right. When my husband paid into SSI. Right. We also have our life insurance benefits. How much were your life insurance benefits? A lot. Well, I mean, a million, two million?

Not quite a million. Okay, good. And how much were the other month on workman's comp insurance because of his missed checks. For how long? Until I die. Wow. Until I'm 85. Oh, I see.

Okay. And how much did you get with a lump sum on the worker's comp? There was no lump sum payment oh that's that's the checks you're trying to figure out what to do with yes oh i see okay all right well here's the thing let me do this i want to set you up with two things one is we have coaches that have been trained by us that don't sell anything except advice and and I'm going to pay for you to meet with a coach. No cost.

Okay? Oh, my gosh. Thank you. And then you've been through a horrible time, and we want to be there and be helpful to you. I'm a Christian, and the Bible says to take care of widows, and so that's what I'm going to do. Okay?

The second thing we're going to do is this um i want you to sit down with one of our smart vestor pros also kelly's going to hook you up with both of them and help you get that done now the smart vestor pros are mutual fund brokers they do get paid when you invest okay but their job is to teach you about investing and how to take some of this money and move it towards mutual funds. Do you guys have any debt? I took some stupid calls in the last year since my husband passed away. Sometimes that happens. And so I personally own $12,000 in consumer debt.

Mm-hmm. thousand dollars in consumer debt but that'll be paid off in seven months because i have to feel the pain of my taking me taking my stupid pill well maybe i'm not sure i think you felt enough pain for the last year i think you pay it off and then you stop forever we're also going to put you in financial peace university which is our course on how to handle money and so that'll get rid of the stupid pills we get them out of your cabinet. It's one of the things we do. We come to your house and take the stupid pills out of your cabinet. Thank you.

I used to have a whole case of them, so I know what they look like. Anyway, so, yeah, you need to go ahead and just pay that off. But I'll walk you through. Our team will walk you through how to do all that properly so that you don't go, you don't want to go back in by goofing up. And what you did was you just medicated some of your grief, and that just makes you a human. Okay? I wouldn't even call it stupid. I would just call you were hurting, and you just, you know, you made a bad decision while you were hurting.

That's different than just being self-centered and spoiled brat. Okay? Okay. So we'll cut you a little slack. You've been through a tough time. All right, so then you're going to sit down with a smart investor pro, and they're going to teach you about mutual fund investing. And what you can do as a Roth IRA, that much will grow tax-free,

but that's only $6,000 a year. Everything else will grow tax-deferred, and there's a lot of stuff you can do to keep from paying taxes on it now. But when you take it out, it will be taxed. But if you do it properly, it will be taxed at a capital gains rate, not at an ordinary income rate, which would only be 15% for you or your son. So there's a lot of stuff you can do there that'll get you going in the right direction. And I'll put you on hold and Kelly will pick up and we're going to do those three things,

Financial Peace University, Coach, and SmartVestor Pro. Get her in with all of them and get that going. And let's figure out what we can do to help you and your nine-year-old son. You're a tough lady. You're turning the corner already. You've already worked your way through a whole bunch of this stuff, and we'll just help you with the polishing of it a little bit so that you can have a little bit more confidence to go with your toughness. So sorry for what you've been through, kiddo. This is The Dave Ramsey Show. One Dental is a company I've been telling my listeners about because I know these guys will save you money at the dentist.

One Dental is a dental savings program that allows you to go to one of over 158,000 dental practice locations nationwide and save on things like cleanings, dentures, root canals, crowns, and even orthodontics. Here's the really cool part. You can join One Dental right now and you don't have to worry about high deductibles, waiting periods, or pre-existing conditions. Just find your highly qualified dentist in the network, make the appointment, and start saving every time you go to the dentist. This is a great cost-saving alternative to expensive dental services

and a great alternative to costly dental insurance. It really is that simple. And unless you want to blow your emergency fund, everyone needs to go to the dentist. Folks, this is a no-brainer. Join today at OneDental.com. That's OneDental.com. In the lobby of Ramsey Solutions, Elvis and Evita are with us. Hey, guys, how are you?

Hi, Dave. Doing good, Dave. We're doing good. Welcome. Where do you guys live? So we live in Huntsville, Alabama. Oh, just down the road. Welcome. Good to have you. Thank you. And all the way up here to do a debt-free screen. Yes, sir.

And how much have you paid off? So we paid off $53,000, and also on top of that, we had another $7,000 that we cash flowed my school and trip to Ukraine, which went to see my family. That's where I'm from. Perfect. And how long did this take you? It took us about 17 months. Okay. And your range of income during that time?

So when we started, we made about $94,000, and this year we'll make about $110,000. Okay, excellent. What do you guys do for a living? I'm an engine systems engineer. And I work at the bank as the financial assistant. Perfect. Very good. Okay.

What kind of debt was the $53,000? It was mostly student loans, mine, $41,000 in student loans, and $12,000 on a car. Okay, cool. How long have you guys been married? It's going to be two years in June 4th. Okay, so immediately after you got married, you started on this then? Yes. So tell me that story.

How did that all unfold? So it actually started earlier than that, about 10 years ago. I have two older sisters who are both married with beautiful families, and they learned about you then, and they dragged me kicking and screaming to Financial Peace University at a local church and made me go through it, and it all went into one ear and out the other.

How old were you then? I think I was 19. Okay, yeah, yeah, okay. Yeah, and of course I was the smartest person in the world. Of course. I was considerably smarter then. Exactly. But I knew of you, and fast forward years later, and I meet the love of my life, and we're engaged to be married.

It's about six months to go to the wedding, and I get a job offer to move 1,000 miles from where our family was in Minnesota down to Huntsville. Oh. Right. And so we talked, and we agreed, and I made the move ahead of time. She stayed in Minnesota to finish planning the wedding. And we, you know, I started trying to budget the move, you know, finishing off budgeting for the wedding. We were paying for it ourselves for the most part, the honeymoon, and then moving our whole family down to Alabama. So I was really digging into the spreadsheets like for the first time. And I looked

at how much, you know, how big a chunk of our money was going to be going towards debt. And I realized like, this is a lot of money. This is really ridiculous. We're going to really do this for 10 years or however long the student loans were and then the car loan. And so I just said, you know, what would happen if we do, like, that one weird Dave Ramsey guy said long ago and just focus on it? Like, how long will that take?

And because I'm an engineer, I'm a numbers guy, I was really blown away. It was like a year and a half, but in numbers is what it would take. And we talked about it and we're like, hey, that's totally worth it. Let's go through Financial Peace University and get ourselves on track. And the amazing thing is we started out and we made budgets together and we went to Financial PC University right before our wedding, and then actually again later on after we were married for a couple of months to really drive it home. Right. And we were making budgets together, and at first we budgeted things like blow money and extra money for restaurants and extra money for entertainment.

And as we started paying off the debt and the sort of snowball turned over and it picked up steam, we got really, really excited at the prospect of getting out of debt so quickly, and we just cut all that extra stuff out. And so we were living on a minimal budget, throwing everything we could at the debt. And for fun, we had a subscription to Netflix. We loved going on walks. Right. And that's what we did for a year and a half.

And we also got extra jobs during that time. Wow. Hiking. And that's what we did for a year and a half. Okay. And we also got extra jobs during that time. Wow. Very cool. Very cool. So what do you tell people the key to getting out of debt is? You paid off $53,017 months. You're successful.

What's the key? I think for me the most important was to see the light at the end of the tunnel, just to find inspiration from other people too. And the main thing we did is when we were cleaning offices in the evenings, which was really frustrating to go after a first job to go to the second. So we were listening to your podcast a lot, and it really helped seeing other people getting out of debt, which made us think that, hey, we can totally do this if these people did this.

So that was just to get an exploration. And then also to find a partner. Accountability partner is very important. And there's a very important verse in the Bible that I actually wrote down, because I'm going to forget it. That's from Ecclesiastes chapter 4 and 9. Two are better than one because they have a good return for their labor. If either of them falls down, one can help the other up.

And you definitely do fall down during this journey because there is a lot of temptation, a lot of great food around. You just want to go out and eat. You don't want to cook and stuff like that. So we were there for each other. So that was really important for us. Very cool. Well, and like you said, you plugged back into an FPU class,

and there had to be some people in there cheering you on, too. Oh, there was that, and then we also started leading class as well. Oh, wow. We were coordinating an FPU class. Oh, thank you. And your sisters are off in the background going, He finally got it! Yes, you have no idea.

We got even more gazelle intense than they were before. Right. And there, another thing I wanted to mention is do not be afraid to take any extra jobs or maybe some jobs that people are not willing to take. Because for us to take a cleaning job was not like, some people were like very skeptic about it, especially people who were hiring us because they got to know that he's an engineer. It's like a joke. Are you cleaning offices at night?

So we just took it and like, we just decided there's no shame in making money, whichever way you're making it. That's right. That's right. Yeah, and my friends were giving me a lot of crap about that. Rocket scientist by day, office cleaner by night. There you go. Well, why not?

Well, and Evita, the way you were brought up, you said you're from the Ukraine. Right. Did that change your perspective on that kind of a thing? Like, we just do whatever we need to do. We can do it for a short period of time, and it'll be okay, right? To be honest with you, I did not have any debt. My family didn't. So to me, having a debt was really bad.

Yeah. It was really hard to. You were willing to do anything to get out of it. Oh, yeah. Like, I grew up, my family lives on the farm, so we were, like, doing a lot of labor. So I was not afraid of any type of job. So I was like, oh, yeah, we totally can do this. Yeah, it's fine. Like, I grew up, my family lives on the farm, so we were, like, doing a lot of labor. So I was not afraid of any type of job. So I was like, oh, yeah, we totally can do this. Yeah, it's fine.

Yeah, very cool. I love it. That is so cool. You guys are neat. Well done. Well done. Proud of you. Thank you.

We got a copy of Chris Hogan's book for you, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and Became Millionaires. And, of course, you can too. And you're going to. That's what you're on track for. You're willing to do what it takes to win. 17 months in, boom! $53,000 plus a $7,000 cash flow on a

trip and some other school and so forth. So very, very well done. Alright, it's Elvis and Evita. Is it Evita? Did I pronounce that correctly? No, it's actually Evita. What? It's Evita. Evita. Is it Evita? Did I pronounce that correctly? No, it's actually Evita. What? It's Evita. Evita. Yes.

Okay, thank you. I'm sorry. I apologize for missing that. That's fine. I'm used to it. Well, Hillbilly's trying to say Ukrainian. That's what you get. All right, $53,000 paid off in 17 months, making $94,000 to $110,000.

Count it down. Let's hear a debt-free scream. Three, two, one. hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Love it, love it, love it. Fabulous. Well done, you guys.

Very well done. Lydia is with us. Is it Lydia? Okay. Is with us in San Antonio, Texas. I'm gun-shy on names now. How can I help, Lydia? Hi, Dave.

It's so wonderful to be on the phone with you. I was praying to God I need help with my finances, and I just couldn't figure it out, and I was trying to avoid even thinking about it. How can I help? I'm a single parent of three sons, and they're all in college, but I have two at home and one's off in college in New York, and he's actually graduating from the university in May.

Anyway, I cashed out all that. I had ESAs. I had the GI Bill because I retired from the military. Lydia, what's your question today, honey? I'm sorry. My question to you is how right now I'm working a full-time job and I'm going to school full-time, but I can't seem to get control of my finances. So do you think I should actually get another job? Okay.

Why is it you have a bunch of debt? Yes, I do. Well, I have about $58,603 in debt. Okay, and what are you making at your main job? At my main job, I make about $60,000. Okay, and what is the $58,000 in debt on? Most of it is consumer debt, like credit cards and a personal loan. All right, I'll tell you what we're going to do. We're going to help you out. We're going to put you in Financial Peace University. I think you need a whole program around you on getting out of debt

and getting on a budget, and we're going to show you how to do every bit of it. Our scripture of the day, 1 Corinthians 13. And now these three remain, faith, hope, and love. But the greatest of these is love. Max Licato said, forgive and give as if it were your last opportunity. Love like there's no tomorrow, and if tomorrow comes, love again. Keith is with us in Wichita, Kansas. Hi, Keith. Welcome to the Dave Ramsey Show. Thank you, Dave, for taking my call. Sure. What's up? I have a question

on disability, long-term disability. My company offers it to us, and they pay for it. It don't cost us anything. They even have short-term and long-term. But doing some checking in on that, if I was ever to have to use it,

they said that I would be taxed on that money that's true and i know you said don't get anything that you that will be taxed uh so should i be looking uh into somewhere else to buy it so i pay for it with after-tax dollars no it's free okay and so uh there's no way around it that since it is furnished to you as a benefit, it is taxable income if something were to occur. But that doesn't destroy the benefit. I mean, you would still get the money. You just have to pay taxes on it. It doesn't cost you a thing to get the benefit covered.

No, I wouldn't worry about that at all. The thing is, the only reason I would do this, the only situation in which I would do something different would be if your company gives you a amount of benefit dollars, there's a thing called a 125 plan, or sometimes it's called a cafeteria plan. Okay. And they say,

okay, we're going to give you $500 a month to spend on different things. And you can either spend it on disability or you can spend it on this, or you can spend on that. And you have a choice that way on how to structure it. Then I would buy my disability that way with after-tax dollars, and I would use those cafeteria dollars to buy something else inside your benefits package. But in this case, your company is like our company.

I just pay for it. It's a benefit I give to my team members, free. Doesn't cost them a thing. But the downside is that it is then taxable, and there's no way around that, other than to turn around and make them pay for it some way, which is truthfully a payroll pain in the butt, so we've never done it. But I wouldn't worry about it. I would just accept the benefit and rock on.

Melissa is in Lancaster, Pennsylvania. Hi, Melissa. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for honoring me with your time today. I appreciate it. My pleasure. How can I help?

So I am selling my house, and I stand to make about $40,000 on it. After I sell it, I have a car loan that's about $9,000 that I plan to pay off. After that, I'm completely debt-free, but I also don't have any retirement. And so I'm just trying to determine, is it better for me to take the $31,000 that I have left over and kind of put that back into purchasing another house, or should I put that into savings, retirement, or what would you suggest? Okay. What's your income?

About $42,000 a year. Okay. And what's the price range of home you sold? The house that I'm selling is about $280,000. Wow. Yeah. And I'm only looking to buy one that's around $165,000. Okay. You weren't servicing $280,000 on $ 42,000. No, no, no, no. I was not. My husband and I were together and we have separated, and so I'm going from a double-income family to a single. Okay, that's what I was guessing. Okay.

Sorry about that. Yeah. You have children? I have a 20-year-old daughter who's in college. Okay. All right. So you don't have children that you have to worry-year-old daughter who's in college. Okay. All right. So you don't have children that you have to worry about for housing. Okay.

No. Well, the first thing is, yes, you did do the right thing by paying off the car out of this in your mind and following through on that. And, yes, I would set aside three to six months of expenses as an emergency fund. I would cheat down to the three side in this situation, giving you as much of a down payment as you can possibly have on the next house. And that house should be where the payments are no more than a fourth of your take-home pay on a 15-year fixed.

I don't think that's putting you into a 165. Okay. I think that's going to bring you down further than that, which could mean that you may, how long were you married? What, 20 years, probably, or 30, 25? How long was I married? Yeah, probably 25 years. Oh, no, no, it was a second marriage, so we were only married for eight years.

Oh, okay. All right. I was just thinking it's okay to set, okay, pay off the car, set aside an emergency fund, set the other portion aside in a separate account, call that your house fund, rent something inexpensive, and whatever emotional recovery you might need, give yourself six months, and then make a decision on buying a house. Okay. The only problem with that is it entails a couple of moves rather than one move.

Right. And I was kind of concerned because my rent around this area is more than what my mortgage could potentially be, but it would be a 30-year fix at only 10% down, and that's why I was kind of going back and forth. Yeah. I'm always going to put you down. Because the thing is, it's an okay thing in your situation to do the 30. On the short term, that feels like the right thing to do. I get back into home ownership.

I got my future lined out and those kinds of things. Let me ask you this. What's the path on your career look like? I mean, are you looking to see your income come up substantially in the next few years? No. Okay. All right. So the 30-year mortgage is not a good long-term play.

Okay. And because it just traps you, and it ends up not being the best thing for you long-term. So I'm going to move on down in-house, or I'm going to tap the brakes and wait. And rent is always higher in every area, by the way. That's not different there. Rent's always higher than payments.

But payments, but owning a home is always more expensive annually than renting, but it is not more expensive over the long haul because it goes up in value. But you've got repairs and you've got all kinds of issues and other things you have to deal with. When you're the homeowner, anything that breaks, you've got to fix it. When you're a tenant, the landlord gets to fix all that. And so this is one of the reasons that rents are a little higher. So a temporary measure, even though rents are higher,

might be okay to kind of get stabilized and start thinking about your long-term career prospects and plans given this life change that you've gone through. And then that might change what you purchase or where you purchase even. And so there's just a lot of upheaval and a lot of change and a lot of pain in your life. And those are never good times to make great decisions. So you sound really stable and upbeat and everything on the air. So maybe I'm overstating this. Maybe I'm adding melodrama to it.

I don't know. But those are always just concerns with what you're going through, and I want you to just be careful and be steady. Careful and steady always wins, you know. So take your time. But, yeah, pay off the car and set aside an emergency fund. Work with what's left. And then if you're going to do something today, I would do a 15-year fixed,

and I would do it where the payment's no more than a fourth of your take-home pay. Thanks for the call. Open phones at 888-825-5225. Mark is on Facebook. Per a divorce agreement, I must have a policy to cover alimony obligation. I also must have additional $100,000 coverage for one child in the event of my death. Would I need two policies or one with two beneficiaries? One with two beneficiaries is less expensive.

And if you'll go to ZanderInsurance.com. Get a quick quote on your term insurance. I don't know if there's a time period that you have to cover these things or if it's for your entire life and what you have to do. When your child is no longer a minor, do you still have to carry that portion on the child? And that's what I would carry the shortest policy that makes sense. So if it's a 10-year obligation, take out a 10-year. If it's a lifetime obligation, take out a 20-year and then renew it later. But ZanderInsurance.com can walk you through every bit of that. And, yeah, you can have two beneficiaries very easily.

Less expensive to have one policy with two beneficiaries in almost every case. So thank you for the call. Or they follow me on Facebook. have one policy with two beneficiaries in almost every case. So thank you for the call. Are they following me on Facebook? That puts us out of the Dave Ramsey Show in the books. We will be back with you before you know it. In the meantime, remember, there is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey guys, it's Blake Thompson, Senior Executive Producer for The Dave Ramsey Show.

This hour's over, but you can find more great content on our YouTube channel. Catch the most watched Dave Ramsey, death-free screams, and the very popular Everyday Millionaire segment. Go to the Dave Ramsey Show YouTube channel and click subscribe.