The Ramsey Show - App - There's No Such Thing As the Mortgage Fairy (Hour 2)

Episode Date: May 11, 2020

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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. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225.

Joining me on the air as my co-host today on The Dave Ramsey Show is Chris Hogan, Ramsey personality, number one best-selling author. We're going to start with Amanda in Kansas. Hi, Amanda. Welcome to The Dave Ramsey personality, number one best-selling author. We're going to start with Amanda in Kansas. Hi, Amanda. Welcome to The Dave Ramsey Show. Hi, Dave. Hi, Chris. I just want to thank you all for everything you do.

You've changed lives. Well, thank you. Oh, that's so sweet. How can we help? I am going back to college right now, and we are cash flow in college when the monthly payments come up and so in about a year or so we are looking to purchase a house save up for the down payment that's not a problem my concern is that after we purchase this house some repair comes up because that happens when you buy houses and it's going to happen the same month that we need to pay tuition.

So my question is, do we need to save up extra money to either pay off all of the college or have a repair fund already set up before we buy the house? Do you have your emergency fund? Yes. I just don't like using my emergency fund if it's not an emergency because repairs, you know what's going to happen. Well, Amanda, are we talking about a repair or a renovation? Mostly repairs. Renovations, we know we have to save up and pay cash for those as we want to do

them. Okay. So a repair would technically qualify for something to use your emergency fund on. So I'm just overthinking everything? Yeah, you are. But, I mean, in the mindset. Good. I'm glad you are. Yeah. You are, yeah.

You at least are thinking. There's a start. It is. You are. You really are. But, you know, I like that you all are paying cash to cash flow college um i think i know you're going to save for the down payment and then in there in your mindset you know here's the reality if you do have to use the emergency fund amanda this is

where most people forget and mess up you pause everything until you replace that money. Everything stops. Everything. That way you always keep three to six months in your emergency fund in a money market account, which means it's liquid and you can get to it if you need to. There would only be two kinds of repairs, emergencies and renovations. Okay. Yeah. That does make sense.

The hot water heater goes out, the heat and air goes out, the roof springs a leak. Emergency. You know, that kind of a stuff. But the roof is looking shabby and we need to plan to replace it would be a renovation, right? Or the heating and air system is getting a little old. Maybe next spring we need to replace it. That's kind of a renovation. You've got some time.

When you don't have time and it gets sprung on you is what you're concerned about. Definition of an emergency. okay awesome thank you so much for everything you do thank you good call that's a good clarification and you know here's the thing if you just do this stuff on purpose even if she did it the other way it's not the end of the world no but that's how i've operated my house is i use emergency fund actually i don't use't use the emergency fund for emergencies even because Sharon makes me have an emergency fund for the emergency fund after I went broke. That's right. Because she doesn't. If I even get near the drawer where that's kept, oh, hell to pay. Is there a problem?

Don't even walk over there. It activates her security gland. Well, let me know where this is so I don't walk near it. Yeah, well, it's just me. Okay. You're not a danger because you can't use it. Okay. But I could go over there and buy something with it, and that'd be...

Well, I don't need that little woman fired up. After going broke, you don't want that hillbilly woman mad at you. No, I do not want no part of that. She's small, but she's feisty. That's very true. That's true. Very true. All right, Anthony's with us in Michigan.

Anthony, welcome to the Dave Ramsey Show. Thanks. I built a large restaurant. In the process, I've accumulated about $137,000 of credit card debt. You financed the building of a restaurant on a credit card? No, no, no. It was just in the process of. Where did the credit card debt come from?

Did you go on vacation while you were building it? Some was from before, but a good amount was not being able to pay myself during these first few years. Thankfully, though, it got to the point earlier this year where it was actually paying off its debts quickly, and this was starting all to go down, but including the $150,000 that it owes me. But, of course, the crisis hit. We made some quick changes to the business that have worked out, and though the business isn't anywhere near where it was before, it's stabilizing much better than I thought it would.

Good. But paying off the debt the business owes me and others seems way out of reach anytime soon. So with the business stabilized, I feel good about being able to have a household income now about $150,000 going forward. And our family's expenses are less than that, right, about $2,500 a month. So they should be able to get out a plan to pay it off. They're good about that. But some of the interest rates are high.

So the question is, how do I go about finding the most efficient way to dig out of this hole? Dave, let me take this one. Okay. Well, looking at this, you know, first and foremost, Anthony, if you want a surefire method of getting out of this debt, how many credit cards do you have for this 137? It is a total of six. Okay. And you were financing your lifestyle as you were working the restaurant with these credit

cards, right? Partially, yes. Yeah. So here's the reality. I want you to list these out, smallest to biggest. I know you're thinking interest rate. I know you're trying to do math, my friend, and you're looking at it and you're going, this one has a higher interest rate than this one.

I'm going to tell you, the debt snowball approach, list it out, smallest to biggest. You make minimum payments on everything except for the small one. Throw it out. Smallest to biggest. You make minimum payments on everything except for the small one. Throw everything but the kitchen sink at it. That's how you get out of debt. It's about momentum. You said we, are you married? Yes. So what would your household income be if you're pulling 150 down? There's only one earner. Oh, that's the household income. Okay. Sort of're sort of committed to that. So that's nice. I'm glad.

And I hope you can do that. That would be a wonderful success story on the restaurant. So the average household income in America is $59,000. Okay? Mm-hmm. So what I would want you to do if you have made a mess this big, if I were in your shoes, what I would do if I had made a mess this big is I would live on less than that, less than average, like nothing at home, dude.

You have a huge mess. You're not a prosperous restaurant owner. You are a broke restaurant owner, deeply in debt and very scared if you're smart. And so $30,000 out of $150,000 is wimpy, wimpy, wimpy, wimpy. You need to put out of $150,000, you need to put, I don't know, $100,000 on this debt or $75,000 on this debt and be done with this whole thing in 18 months to two years and then chris is right the interest rates start to not matter because you're not going to be in debt very long don't keep this crap around like like it's a pet and dude you've been

rationalizing on your lifestyle for some time because how you went this far in debt just to support your family means you didn't cut lifestyle while you were building it. And if this only went to cover your family's needs, you wouldn't be this far in debt. You bought a bunch of family once while you were building the restaurant, and that's what put you this far in debt. Michigan's not that expensive. This is the Dave Ramsey Show. we're all going through challenges and our lives have been impacted in ways we've never anticipated if we learned anything it's the change constant, and having a plan is crucial to our family's livelihood. This is why I talk about term life insurance every day.

And for those of you that haven't taken care of this for your family, I'm not sure what you're waiting for. Hopefully, recent events have opened your eyes, and if you need some extra motivation, companies have started raising rates. So the smart move is to get this taken care of right now. For over 20 years and through all the challenging times, the only company I have recommended who gets the job done is Zander Insurance. Their team will shop all the top companies, find the best rates for the coverage you need, and get this done quickly. Go to Zander.com or call 800-356-4282.

Your timing is crucial, so please get this done. Thanks for joining us, America. We're glad you're here. My co-host this hour, Chris Hogan, number one best-selling author, Ramsey personality. Our question of the day comes from blinds.com, the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. The promo code is RAMSY. So this is the largest online retailer of blinds, window blinds. People are at home doing a lot of renovations. Blinds.com sales, I suspect, have gone through the roof during this time.

Oh, I would think so, Dave. Yeah, and they're a great company. We've enjoyed endorsing them a long time. So their question is from Meg in Wisconsin. Dave, Chris, I'm currently on Baby baby step two paying off my debts i have federal student loans which i've been paying a minimum on all surplus money i have has gone to the four smaller debts than the student loans so far however with covid the monthly payments are not due my question is should i make the payment even though it's not due and then go on the

smallest debt and then the last remaining credit card the others are paid off and then start back on the student loans i mean dave as i look at that what we've been dramatically consistent in telling people is if your income and hours have not changed continue to make your payments and continue to make that progress on that thing and get it out of your life it won't really matter if you continue with gazelle intensity on this mathematically here's what's going to happen if you pay 50 on your student loan that you didn't have to right now that reduces what you put on the credit card by 50 so you stay in a debt a little bit longer on the credit card but you're when you get to the student loan it will have been reduced by that 50 right if instead you just follow what

the government says and say i'm'm going to pay minimum payments required, which would be nothing right now on the student loan. So I'm going to go ahead and put the $50. It speeds up knocking out the credit card. But, of course, you hadn't reduced the student loan. Right. So at the end of the day, you will have paid the $50 one way or another, one direction or the other. So it doesn't cost you any money to go one direction or the other or even any time. It's just a matter of the way you feel about it.

So we always say, and Chris is right, we've always been dramatically consistent, pay the minimum payment allowed. And in this case, the minimum payment allowed is you're not required to make a student loan payment, no payments, no interest until October on federally insured student loans. So that will accelerate how fast you knock out the others, and then you'll get to this. But if you want to make the minimums, your old minimums on there, you can do that too. Either one of those would be within the guidelines of what we teach, but the concept being that you don't just go, oh, I don't have any student loan payments,

so I'm going to do nothing. Yeah. Now, that would be dumber than a rock. It would and in september dave when this moratorium goes away you're going to have people that are in payment shock yeah they really are yeah because they're out of the habit it's going to come back it's going to come back if you haven't if you're but if you're working a plan that's right you see it coming you know what's going to do you're going to be just fine either direction mathematically now that's a lot different than skipping a payment on your house because you're not really skipping a payment there.

That payment's waiting on you. That is so true, Dave. It's either waiting on you at the end or in September, and we're not doing that. It is not a mortgage fairy. There's no such thing. I talk about this in Financial Peace University. In the real estate lesson, you all have heard me say that. No mortgage fairy.

There you go. Folks, things have been rough this year your emergency fund might be getting low chris and i've been consistent to tell you not to cash out your 401k yes we know there's a stimulus bill yes we know you don't have a penalty for cashing it out uh but listen if you're 30 years old and you cash out your 401k to do something with it right now the 60 year old version of you is going to come back and find the 30 year old version of you and kick its butt because you're you're spoiling the nest egg that's exactly right you're killing the nest egg don't do

that so if you've already withdrawn from it you need to get it back in there you do not want to lose besides that you're withdrawing in a down market when it's cheap that's the exact wrong time to do withdrawals so if you need some help with your investing you need a smart vestor pro click dave ramsey.com smart vestor these folks and the smart vestor pros do not work for us but we have recommended endorse them many of them for many many years they have the heart of a teacher they'll sit down with you you get a plan uh You're going to leave there knowing what you're supposed to do. Yeah. And, Dave, you know, typically we all have been around slimy salespeople.

And you know the kind where you know you need to take a shower after you've been around them. Yeah. This is not that. These are people, heart of a teacher. That means their desire is to help you get to your goal. And so many people, Dave, have reached out and talked to them, whether it's a real estate ELP, a smart investor pro, on the investing side or a tax. And they go, they're different. And I go, absolutely.

That's what I've been trying to tell you. You know? It's the heart of a teacher. And you feel, you know, you feel, we've all had meetings with people at varying degrees of slime. Yes. But you just come out of there feeling slimed and then other times you've had meetings with people where you just went gosh man i can just i can see this face i can see this lady's face i can see the way she carries herself the way this gentleman walked

into the room it's just i feel good about that now you're not going to completely trust anybody you're going to make your own decision that's right because you've got someone's got the heart of a teacher you're making the decision not someone decision. That's right. Because you've got someone who's got the heart of a teacher. You're making the decision, not someone else. So don't ever go, I lost all my money because my money guy said. No, that means you were stupid and you didn't learn about it yourself. You just went along with what some guy in a suit said to do. Don't do that.

No. You need to invest in the money and things you understand. And the investment broker's job is not to make your decisions for you. It's to make recommendations along with teaching. And then you take that teaching, and it should confirm the recommendation. That's right. And that's the way you do this stuff. The people that build wealth, they use, I mean,

we found a large percentage of the people in our millionaire study for your book, Everyday Millionaires, that they use a professional to help them. Almost 80%. 80% of them reached out and said the number one reason they were able to get there was because they had worked with an investment professional. So don't go it alone. Get someone in your corner that you can talk with. And Dave,

I think you mentioned this last week. A lot of investment professionals are saying right now they're spending a lot of time just having conversations with their clients. Yeah, trying to talk them off the ledge. That's right. That's right. Because they're trying to cash out in the middle of this downtime. It's craziness. Absolute craziness. All right. Let's go to Matthew is in Utah. Hi, Matthew. Welcome to the Dave Ramsey show. Hi, Dave. Thanks for taking my call. Sure. What's up? I have kind of a complex issue that I was hoping I could get both your financial and familial advice on. I'm currently contemplating a career change from IT to law enforcement. And I'm working on baby step number two, reducing my debts.

This career change would put me at a $15,000 to $20,000 negative from where I'm currently sitting at and would come with a sacrifice of potential visitation time with my child out of state. The reason for the change is professional satisfaction, moving to a career that will give me some challenge and make me happy in my day-to-day, but obviously has some financial setbacks there. I'm wondering what advice you might be able to give me there. Well, anytime I have two options that both suck it means i need another option okay so how what would we do that said i don't get a pay cut i get to be in law enforcement near my kid how do we do that well relocation isn't really something that I can do.

I'm sorry. Are you near your kid now? No, I'm not. She lives in Ohio. I live in Utah. And why can't you relocate to Ohio? One cost, and then also I lived in Ohio before, and my mental health suffered greatly while I was there.

That's weird. What do you mean? You mean because of her family or toxic stuff around her? Not so much her family, just the general environment, the people that I met there. Dude, if you can't survive Ohio without having mental health problems, you don't need to be in law enforcement. That's a little scary. Yeah, we're talking about your daughter, you know, and you've got options.

Ohio's not evil. No. I'm not saying it's better than Utah or worse than Utah, but, I mean, that's strange. I don't know what to tell you, man. So you're where you are, and you would take a pay cut just to go into law enforcement. If you want to do that, I guess you can, but I think you need to explore some of these other issues. This is the Dave Ramsey Show. Folks, since you're spending more time at home these days, why not make the most of it? Now, I know not everyone has the means to do a full renovation, but thanks to our friends at Blinds.com, there are some small changes you can make to help improve your home. Blinds.com makes it incredibly simple to shop

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and restrictions apply. So like the rest of the country, our area has been on lockdown and our thousand folks have been working from home, with the exception of about 20 of us brave souls in here running the show. Two weeks ago, the state of Tennessee, where we live, opened back up, with the exception of a few of the metro areas. And the following week, or that week, we allowed our team to volunteer if they wanted to come from home. Last Monday, we reopened with the team.

And this Monday, we reopened to the public. To look out here in our lobby and see human beings standing out here is really refreshing and nice and warms our hearts. Yes. And so on the debt-free stage, to do their debt-free scream in person, by goodness, Chad and Erica are with us. Hey, guys. How are you? We're great.

What's going on, man? So where do you guys live? Hermitage. In Hermitage. Oh, in Metro Nashville. You're refugees. Yes, we are. You escaped because it's still all shut down, right?

Yeah, it is. And it's just, I mean, this is the first time all of us have been out and like in the van in the car outside like together it's been amazing it's kind of weird it's the weirdest thing it's eerie i know i feel like i'm doing something wrong near you and it's like oh right it's it's it took me a while it's kind of a shock yeah i have to re-acclimate to people again it's strange this glass between us here is really nice so i'm just saying thanks man it's kind of like where i buy gas yeah they got a glass between us here is really nice so i'm just saying thanks man it's kind of like where i buy gas yeah they got a glass between that i feel like i'm gonna line up okay we're coming out there at the break i'm just warning you so perfect perfect hey and dave's a hugger

so bring it on man bring it on oh well welcome guys welcome so all kidding aside congratulations on your debt free how much did you pay off? $34,000. Woo! And how long did that take? Ten months. Yeah, ten months. All right.

And your range of income during that time? $48,000 to about $130,000. Good Lord. Big jump. Somebody got a job. No, somebody stopped caring what anybody else thought and said, screw it, we're going to go for it and do what God made us to do. Whoa.

You tripled. You almost tripled your income. Yeah. It's been amazing. What do you do for a living? Producer, mixer, full-time musician. Oh. Yeah.

Yeah, that world in Nashville might have a little peer pressure. It does. It does. And it's ridiculous. Yeah. It really is. It really is. When you just let loose and be an artist, things go crazy.

Well, when it's like, you know, I'm designed to have a certain sound, a product that my brand does. Yeah. And if I stop caring about that and if I don't care and don't give a... A rant? Don't produce anything. Exactly. And, well, it's the...

All of a sudden, I'm doing... I'm operating on all 12 cylinders. Yeah. You know? And when you do that, people are like, oh, I'd doing, I'm operating on all 12 cylinders. You know? And when you do that, people are like, oh, I'd like that. Let's go work with that. Yep. It's, you know, when you operate in confidence, it's a totally different world.

It is. And it clearly, financially, shows. Yeah. That's pretty amazing. Congratulations. Yeah. I mean, so. This one right here.

So she pushed you. She said, you got to stop caring. You got to go for it. Oh, by the way, we need the money because we're in debt or what? I mean, well, here's man as a musician, you know, it's up and down, up and down. And a lot of bad decisions were made. One, just to try to keep up with Joneses and all that. And then just by a musician.

Really? I know who to thought this one. But or, you know, like if you're not touring you're not working and you're not exactly so and you know we just got real tired of having great months and then having nothing to show for it okay yeah and so it wasn't a matter of you know i finally got up and started working it was like okay we need to really unify and her like she jumped on the you know watching your show it was like on like 24 7 in the house and it i i just told her i said look we're a team whatever you want to do i'm fully on board with it and the good bad the ugly of it let's do it

so chad are you the spender in this relationship? You know, we're both really good. We're so good at it. Because here's the great thing. We're like, hey, you know what? You know what would be really fun right now? Let's take a vacation. Oh, we could do a vacation. And then we both just start feeding each other. It's like, let's go, let's go, let's go right now. And before we know it, it's like book, there's debt, there's all sorts of stuff. We can be

really impulsive together. That's awesome. But, and then we also can be really, as you see in 10 months really dedicated to a dream and a plan so what kind of debt was the 34k it was a sweet van sweet van for all these kids a van with a sweet yes and credit cards of course of course all right yeah very cool so what happened 10 months ago because it sounds like there's this huge metamorphosis and the whole family transformation in the whole family not just the money or the money precipitated that or that precipitated the money or something i

can't tell but it's it's an you guys have had an awesome 12 15 months yeah really have um you know doing what i've what i've done i've done it since i was you know 15 years old and all of a sudden you know in in the musician uh profession you get opportunities and some are great and you know sometimes you really capitalize on others and i had a really amazing opportunity come uh at the beginning of 2019 and you know it was a label project which you know tends to have a little bit more uh just weight behind it and so we both looked at each other and we're like okay look there's some this is a great opportunity not just to further our family and do some fun stuff but it's like we can actually now use it as a foothold and like step

up out of this yeah so that was the real change man you know i've been doing this for so long but it was finally the the mentality of like okay we're not just going to take this i don't i don't want to live with regret later after having getting this extra money we got to do something smart exactly okay that makes sense well and i had come from money and the whole thing growing up i'd ask what's a budget and i was told well it's for poor people and because we had money we didn't need a budget and we lived like it was just never going to end so i mean i blew through so much and had to swallow pride and go i don't know what the flip i'm doing what

what caused you all to uh connect with us and actually get started on the technicalities of this 10 months ago my parents went through financial peace when I was 10. And then they said poor people needed a budget? And they just didn't follow through. It was a cool thing to do at church. Everybody got to go and got dressed up and went to dinner. Okay. And filled out their booklets.

Okay. And it just was never put into practice. It breaks my heart. And things would be way different if it had. But we just looked at each other we said no more but you remembered the name from when you were 10 i've just always kind of tuned in and gone i mean we didn't have credit cards we didn't have debt when we got married and that was a pride point for us and then it just got to the point where we tried to keep up

and we cared way too much and it just snuck in and happened yeah and you know what the fact that you all woke up and looked at that and attacked it that same kind of defense is going to be required moving forward it really and truly is because it's always one signature away from going backwards yeah oh we're not going backwards oh no no no and in that time too we got all of our debt paid off we got our six month emergency fund taken care of. And then all this happened, and it's not affected any of us. I bet. It's been incredible. I just told her, I said, look, I'm not good at handling this money.

But what I am good at, I can get down and I can work, and I can just plow the field. And then everything that I was plowing up, she was then collecting. And then it was labeled. Every dollar was given. A name, a nickname, initial, I mean, everything. It was like put in its place. And we found the way that we work together, that I wasn't trying to come in and just because I'm the husband, I got to take care of the money. No, I'm really bad at that.

She's amazing. So let's just work that out. Work as a team. I mean, I was given this amazing partner in life, and just why not team up? There you go. Get them brownie points while you can. You know what I'm saying? You brought the kids to do a dead free scream. Yes, sir.

And what are their names and ages? Have them join you on the stage. Well, our first is Kalei. She's 11. And then we have Brixton Towns. He's 9. And then Eleanor eleanor vera and six and royals almost five all right well way to go you guys we're so proud of you congratulations what a great story you're inspiring all right we got a copy of chris hogan's book for you everyday

millionaires that's the next chapter in your story We want to hear about that when you hit it. Yes, sir. In the meantime, $34,000 paid off in 10 months going from $48,000 to $130,000, but more importantly, a family-wide metamorphosis transformation. Count it down. Let's hear a debt-free scream. All right, guys, you ready? Three, two, one.

We're debt free! I love it! Oh, that's fantastic. Way to go, you guys. We're so proud of you. Very, very well done. Life is good. Man, love seeing people again.

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Home sales are not down. Home sales are not down. Hmm. We endorse 2,500 endorsed local providers nationwide, and the leads of people coming to them and actually closing on a house are about what we budgeted. It's not been a significant change. Yeah, that is surprising. Now, that might change market by market.

Some of the areas are more tightly locked down than others. I think a lot of people, I mean, I've read stories of people buying homes with a virtual tour and not having seen the home. Now, that freaked me out. But if you want to do it, it's okay. I'm just an old guy, and I kind of have to smell the carpet or something. virtual tour and not having seen the home. Now, that freaked me out. But if you want to do it, it's okay. I'm just an old guy, and I kind of have to smell the carpet or something. But, oh, my gosh.

Oh, wow. So if you're interested in buying a home, you're interested in selling a home, we have a list of endorsed local providers, ELPs, that we have gone through and have vetted. And these are the highest-producing, high-octane, high-protein real estate agents in your area. You just go to elp.daveramsey.com for real estate, or just go to daveremsey.com slash homebuying, and you can get the answers on how to make a smart decision, even in a pandemic, how to sell a home in a pandemic. Real estate agents are like everyone else they

don't have a playbook for this they've had to learn it all in the last 30 days but uh they're either developed a playbook or they're out of business and you know what the high producers did well they stayed in business they developed a plan well they figured out a way to sell houses yeah and they can guide you through this and uh so i'm just so impressed with them uh they are just high quality people you're going to notice the difference as you have that conversation and begin to just ask them the basic questions just watch how they treat you it's some it's it's remarkable chelsea's with us in oklahoma hi chelsea how are you hi good thank you so much for taking my call sure what's up um so i have been

um pausing my debt snowball because we started your plan in January when I was six months pregnant. So we've been stockpiling money. And my husband lost his job due to COVID about two weeks before the baby was born. Ouch. So we've been saving. Yeah, it's not good. So we've been saving and saving. And now we have about three months of expenses in the bank, and the student loans are sitting there irritating me.

But I'm not, yeah. Because I could just wipe them out. There's no room for Sallie Mae. I just brought a baby home. I know. So my question is, should I keep it paused until my husband's job comes back and is really stable? Yes. Or should I go ahead?

Okay. Yeah. Oh, that's hard. It's really tempting, but here's the thing. Yes. You know, you went from one thing that was a potential emergency, a pregnancy, which we always tell people to pause for that, straight into another one, a real emergency, unemployment.

Yes. And during a crisis, we always tell people to push pause on their baby steps and that would involve baby step two is paying down the debt obviously and uh push pause on that so what did he used to make he made about 50 000 a year doing what he was kicking it he was a physical therapy assistant but he was prn for three separate companies okay so if you work like six days a week you can make like 50 yeah and so that'll come back won't it i hope so i'm scared that a couple of the companies might go under well those those companies might but the demand for pt won't go away right and he's got the experience to move right straight back into that industry. And when some of those companies go away, some people will change careers and leave.

And so there may actually be a shortage of what he does. Yep. Chelsea, how much in student loan debt is left? We have about $27,000. The one that's bothering me is about 2200 okay all right and how much in savings we have uh 7400 right now yeah brand new baby i'm sitting tight on seven grand okay i'm really not gonna mess with that and is he out doing some side hustles while he's waiting on the shutdown, the suppression to get past us?

He's looking right now. Yeah. I'd pick up some side hustles. We got a little settled with the baby, but. Yeah, well, that's true. But I'd pick up some side hustles immediately. Pizza or Uber Eats or, you know, lots of people hiring right now, just not in his field. Right.

Yeah. And Chelsea, it's so much easier for him to find a job when he has one and so bringing in some money so make sure you're encouraging him uh you know you as as his wife you're yours should be his primary cheerleader and it'll do a lot for his psyche it really and truly will very smart mike is in new york hey mike welcome to the dave ramsey show thanks gentlemen first time long. I appreciate you taking my call. Thanks, man. How can we help? My wife and I, both mid-40s, both public school guidance counselors here in New York.

Guaranteed pensions. We both make around $135 a year. We hit the ground running babies it, we hit the ground running babies 4, 5, and 6. Our plan of savings for retirement in addition to Social Security and our pensions is our 403Bs. And the question is

my wife and I, we both want to put an amount of work into the house. You know, tens of thousands of dollars renovations over the next year to two years. The question comes down to is should we pause, like I said, we're both in our mid-40s, pause putting into our 403Bs maximum out, because when we max them out with 15%,

it comes out to around 19,500, which is the federal limit. Maybe another year, just so that we can rack up as much cash as possible so that we can pay cash for all these renovations. My thought process is let's keep doing the 403Bs. Or let's hold off another year, two years, so that we can accumulate as much cash as possible so that we can accumulate as much cash as possible so that we can get this done sooner than later because she's a spender. How much do you want to spend on the renovations? Right now, obviously, we're in a hot spot here in New York,

so we just haven't had any contact. We're looking at doing some, I would say, at least north of like $70,000, maybe $75,000, I would say at least north of like $70,000, maybe $75,000, I would say. Yeah, and you make $135,000 total or $135,000 each? This is where we're at $135,000 gross each, so around $265,000 to $70,000. And you ought to be able to do 15% and still save $70,000. Yeah, I agree. You make $270,000.

Yeah, absolutely. We'll gross $270,000. Yeah, absolutely. Well, gross $270,000, correct. My wife just says, you know what, if the ice does not happen, put into the 403B so we can just save up and do it in that much shorter time than, you know, that much longer time putting into the 403. So doing four, five, and six at the same time, you know, and following your plan. Well, six I would stop. Mm-hmm. Six is fine to stop, but four and five are not. You've got enough money, man. Y'all need to sit down and do your plan. Well, six I would stop. Six is fine to stop, but four and five are not. You've got enough money, man.

Y'all need to sit down and do a budget. Oh, yeah, we do. Yeah, yeah, yeah. No, it's just a matter of being a, you know, it's a matter of saving or not. No, no, it's a matter of having a game plan laid out where you both look at it. You make $273,000.

You have enough above 15 percent to do a 70 000 renovation very quickly but you're going to stop doing a bunch of other lifestyle crap you're doing yeah yeah well we basically want to maybe uh curve back the uh step number five and you're seeing stuff that's okay all. Mike, more important, the thing to hear is the budget and the plan. And you guys, with whatever this renovation is, I would do an extremely detailed thing on what we're spending and the cap, because it sounds like you all 70 could easily turn into 90. And so just being clear on it, and again, you've got a big shovel with your income. You all can do this.

You're just going to take some being intentional. Okay. Here, there's two major things that I want you to come away from this call with Mike. Um, one is, um, you might do this renovation in two phases. You might break it up and go, Hey, there's a $25,000 portion and a $50,000 portion or a 35, 35. I don't know. Something like that. If you can break it into two parts, at least you could get started on it. The second thing is you all are discussing this in generalities and philosophies, not with real numbers. Sit down, do 270 minus your household expenses, minus 15%. And if you can't find 70 after that, something's wrong.

I mean, you're just talking in general concepts and she's going yeah i just want to do this so we need to cut that you don't need to cut it you can do both you you may need to cut some other crap you're doing yep but you can do this renovation this is the dave ramsey show In the middle of these uncertain times, Ramsey Solutions wants to give you some hope. For the very first time ever, we're giving you Financial Peace University free for 14 days. Go to DaveRamsey.com slash hope so you can watch from home.