The Ramsey Show - App - This Is the Worst Wedding Advice EVER

Episode Date: April 8, 2022

George Kamel & Rachel Cruze discuss: When to discuss money when dating, How to really save for a wedding (instead of putting it on a freaking credit card), How to afford housing in this crazy market, What to do with the money from a home sale. 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

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined today by Rachel Cruz, best-selling author and host of The Rachel Cruz Show. And we are excited to take your calls, America. So give us one. 888-825-5225 is the number to call. We can talk about your life, your money, what's going on in your world, inflation, weddings, kids, cars, houses.

So much to talk about, Rachel. All of it. All of it. I'm overwhelmed just thinking about it. Weddings and inflation, two great topics that's true and we are here for you today to give you the right next step for wherever you might find yourself so give us a call 888-825-5225 eric is kicking off this hour he's in harrisburg pennsylvania eric welcome to the ramsey show hey thank. Great to be on. Awesome. How can we help? Hi, so I'm a 20-year-old college student.

Right now I'm working full-time. Basically my work pays for my schooling, and I have about $70,000 in savings. Awesome. So I've been dating my boyfriend for about six months now. Okay. And I was wondering when the right time is to bring up the finance question in a relationship. Finances and a relationship. How long has this relationship been going on? About six months. Okay. So pretty early on. I mean, I like to, as you're heading towards, you know, a more serious commitment, like a marriage, I think you can start talking

about values now and where you stand on your views on debt and money. I don't think you need to go showing bank accounts and be like, well, here's my situation because we're not combining any finances until marriage. Yeah, that's right. Yeah. And I mean, with anyone, when it comes to relationships, you know, it's when you know, okay, I'm going to be doing life with this person, getting married, and we have our future ahead, right? And so when that happens, that's when all conversations come out. It gets real about every subject, and it needs to include money for sure. And the problem is that people go into relationships, and then they take the next step.

And for whatever reason, fear, they don't think it's that important, whatever it is, they end up kind of holding back and pushing back. And then once you're married and you realize, oh, wow, we have to actually do life together, that's when it gets complicated. Yeah. So are there fears right now, Eric, when it comes to finances and what the takes are? I would say yes. The main reason being is because, you know, I know my boyfriend has about maybe $30 they've got student loan debt, so I can't be with a person who has debt.

To me, it's more about the mindset and their values when it comes to money, and that's the stuff you can talk about now. But you don't need to be like, well, we've got to make a plan right now. This is the time. No one on a first date is going, you know, Rachel, I want to know how much debt you have before we move forward in this date. Show me your tax returns and all that. So there's a level of respect. You don't want to be disrespectful. You don't want to know how much debt you have before we move forward in this date show me show me your tax so there's a level of that you know respect you don't want to be disrespectful you don't want to come on too strong here but i think talking about values so like hey just curious like what are your thoughts on on debt how do you view money yes what did you learn about money growing up for sure because the truth is too that one of the number one causes of fights

and then that lead to divorce is money so i'm, if we know there's a big thing out there that's an issue, it would be unwise to, you know, it would be unwise to ignore it. Yeah. The earlier we can nail down that, hey, we're on the same page with money, the better. Yes. So I like that. But we don't need to get into the weeds and the details until there's more commitment in this relationship.

So thanks so much for the call, Eric. Appreciate it. Let's move on to Connor. He's in Houston, Texas. Connor, welcome to the show. Hey, it's great to be on here. Absolutely. Good to have you.

What's going on? So my question is similar, actually. I just got engaged last week. Congrats. Thank you. Thank you. Thank you. And we're wanting to know if we should put money or open like another savings account,

like specifically a high yielding savings account and just fill that with money for the wedding. Love it. Or if we should just keep it or yeah, yes,

or if we should just keep it in our own, you know, bank accounts and just throw cash in there and just use that. So that's our question. Yeah, that's a great question. I love the idea of having a separate account for something that's going to be, you're going to be using it a lot.

It's something you're going to want to stay on budget for. And so you want to know the exact number of what you guys have, when you have it, all of it. And it's just easier to separate it out you know getting a savings account I mean or a check or even a separate checking account because you probably will be writing a lot of checks or using the money obviously out of it uh for vendors and that kind of thing so to to continue to stay uh up with what's going on what's being paid out all of it I think it's great to have a separate one Winston and I did that actually that was our first and then we and then we ended up going into that account

my first checking account that's sweet our first checking account yes wow because we had our separate and then we got one you get married and we put all the wedding budget stuff in that one account and then after we got married i was like well both our names are on it so we're like we'll just transition all of our stuff to combine into that account. Well, that was already existing. Oh, that's smart. Does that make sense? No, it wasn't my first checking account.

No, no, no, no. I mean, our. Like, I just meant. Yes, yes. That's right. That's right. As a couple. So I like that idea just because it keeps it separate from everything else.

Yeah, I'm a big fan of that. And do you guys have a budget right now that you're saying, hey, this is the number we're shooting for? Yeah, we want to keep it somewhere from like $10,000 to $15,000. $15,000 being like the most we'd want to spend. So ideally $10,000, but $15,000 is the hey, we're not spending a dime more than this. Ideally, yes. You'll probably spend $15,000, Connor. Just prepare your heart. We had a range, too. Well, we were on the other end of that range.

But I like planning. Plan for $10. How about that? Let's plan for $10. That's good. George would say $10. I'd say you'll probably do $15. That's great.

Either way, Connor, you've got a plan. You're using cash. It's going to be great. Enjoy the process. Yes. You can get stressed out and all of it don't let anyone pressure you into making decisions about this wedding that you don't feel comfortable making you and your fiance this is your day and so many people rachel they put so much pressure on the wedding day and they don't

even think about setting themselves up for marriage yes they spend more time planning the wedding than the marriage and then they walk into the marriage going oh my gosh what what the crap happened actually connor i'll give you the piece of advice I gave my little brother when he got married. Take that budget, split it in half, and keep the other half for marriage therapy. Later on, so you have this whole account, and you're like, good, when we need counseling, when we need therapy. Did Daniel take that advice?

No, he didn't. No, he didn't. It's a joke. It's a funny joke. But for real, though, your marriage is a lifetime. The wedding's a day. Enjoy it. I hope it's wonderful.

I hope your fiance feels beautiful and she loves it. All of it. But it's a fun but for real though your marriage is a lifetime the wedding's a day enjoy it i hope it's wonderful i hope your fiance feels beautiful and she loves it all of it but it's just the day so don't get too caught up but it y'all i think y'all are gonna do great connor yeah you're the fact is thinking about this connor can i give you a wedding gift yeah absolutely sweet i'm going to give you one year of ramsey plus and i know it's i know it's not a lame gift no it's not a lame gift, Rachel. No, it's not a lame gift. I thought you were laughing because you thought it was lame. Wait, what are you doing, George? That's what I'm doing.

One year of Ramsey Plus. Kelly's going to pick up and get you connected with that. Plug into the EveryDollarPlus budgeting app we've got for you. It connects to your bank account. Watch all the Financial Peace University videos. It's like premarital counseling. It's a great gift, George. Go through it.

Plug into it. You're going to love it. Super excited for you guys as you enter this chapter of your life. Give us a call. 888-825-5225 is the number. Let's talk about your life and your money. I'm George Campbell, joined by Rachel Cruz today. This is The a smart move.

I get questions all the time about where to start and what to do first. Time of year it is. Focusing on your family's financial plan is always a smart move. I get questions all the time about where to start and what to do first. One of the most crucial and affordable first steps to take is to protect your family and get term life insurance. I know it's not glamorous, but all the other steps mean a lot less if something happens to you and your family has no financial protection. Getting term life insurance needs to be a top priority. Steps mean a lot less if something happens to you and your family has no financial protection. Getting term life insurance needs to be a top priority. I recommend 10 to 12 times your income and lock in rates for 15 to 20 years.

This gives you plenty of time to get out of debt and build wealth. I've been recommending Zander Insurance for over 20 years and they understand and live this strategy and will take the time to help you find the most affordable term life rates go to zander.com or call 800-356-4282 it's not that expensive it's not complicated and you need to do it now Welcome back to The Ramsey Show. I'm George Campbell, joined today by Ramsey personality Rachel Cruz. And we just took a call about weddings, and I want you all to stick around because later this hour, we're going to be talking about this big wedding boom. We're seeing weddings back bigger than ever before. And we're going to share with you some of the worst wedding advice we have ever heard.

It's a big claim, but it might be. It's up there, Rachel. We'll just hashtag TikTok. That's right. People love it. Are hashtags still a thing? I don't think. I don't use them.

Do you? I don't know. I don't know. I'm not that fancy. We have social media professionals here to help us with all that. But anyways, it's great. So stick around for that. We're going to be talking weddings. It seems to be a hot topic lately. We're going to get into it. All right, let's go to the phones this hour. Open phones, 888-825-5225 is the number to call. Caitlin joins us up next. She's in Arizona. Caitlin, welcome to the show.

Hello, how are you? Good. How can we help today? Yeah, I just had a quick question in regards to overcoming a negative mindset. So I'm 29. I live out in Arizona. I'm a single mom. And as you know, our housing market has been gazelle intense, to say the least. And I'm paying about 60% of my take-home pay in rent.

Yeah, I can't buy in this market. I don't make enough. I pulled down to about 40 last year. And I just feel like I'm spinning my wheels and that treading water feeling is really starting to get to me. So I was hoping you could provide some insight on that if possible. Yeah. I mean, I'll be honest, Caitlin. I'm like, I would feel that too if more than half the paycheck is going to housing. That's a big chunk. So tell me a little bit more about kind of the situation because you are obviously in a more expensive, I don't know if it's an area or apartment or what it is. Is there other options for you to change locations just to at least catch your breath and bring it down to at least, you know, we recommend 25, 30%, but even if it went down to 35%, that would change your world.

Right. Yeah. I live in a two bedroom apartment right now. And I pay about 2000 a month. I had looked at going down to a one bedroom. The only trouble with that, it was, it would only save me maybe 300 bucks a month, but I actually work from home. Um, so I need, and I have my son here with me too. So I don't know how we would make that work. Yeah, no, too bad. Yeah. Yeah. Yeah. So have you, I haven't, I'm sorry. I was going to just say, have you, have you driven, you know, 20 miles either direction of where you currently are just to see other prices? Right now, I'm already kind of on the edge of what I would consider to be a safe area. So I can look maybe a little bit deeper into Phoenix, but I just want to make sure we're still safe and everything's good like that. So I could, I mean, I work remotely, so I could probably buy in other states and other markets, but my son's father's here and I really just don't want to leave my home state. So.

For sure. For sure. And how much do you make a year? I pulled down about 40 last year. Okay. What are you doing for work? I work at a call center for an insurance company. Okay. So there's only two ways we can go about this. We can spend less and we can make more. So do you have any payments in your life that we can get rid of? Do you have any debt? I don't have any debt.

I do have that going for me. I don't have any debt. And I do anticipate my income going up. Actually, I had a conversation yesterday with my supervisor that made me feel like maybe something close is on the horizon for getting my pay up. I think it's just this waiting period between making more money and trying to find something cheaper to rent. It's mentally been draining me, I think. For sure. Especially as a single mom.

I mean, how old's your son? He just turned six. His name's Mason. I think he might be listening. That's awesome. Hi, Mason. There you go, Mason. That's awesome. Oh, you're doing an incredible job, Caitlin.

I mean, you know, the hard thing is it's nothing that you're doing wrong. It's just that the numbers are kind of stacked against you. And so, like George said, you know, an option of bringing in more. I mean, right now the job market is just insane. And so I would push and look to see if you can even, I mean, 40 grand, you know, you're doing fine. But man, people are paying just insane amounts of money right now for jobs. And since yours is not like very specifically specialized, you know what I mean? I feel like you could do all sorts of things, even with the experience that you've had in this insurance role. So I don't know if it's looking for something else or a different apartment, but one of those two things really probably needs to shift for your own sanity, Caitlin.

You know what I mean? Even temporarily. Yeah, to have the numbers work for you is going to be a big deal. Do you have an emergency fund, Caitlin? I do, yeah. Okay, three to six months in there? I still have my baby one. I have a $1,000 emergency fund, and then I have about $4,000 in my actual emergency fund, so I still need to build that up. Okay. I think building that up may help with a little bit of that financial peace and anxiety about what if something happens, if one check doesn't come in, what are we going to do? And if you get that in place, then I'm going to start saving up for a house slowly. And I know

it's hard because there's not a lot of margin right now, but that feels like it's the long-term goal. And I'm hoping that all this craziness is not forever. And so a year from now, hopefully we're looking at a very different picture. And you are work from home, and so that does open you up. But I know you've got to still stay close to home because of the situation with your son. And so there's not a ton of options here other than let's look at the budget. Let's do a budget audit. Where can we save?

Every single insurance premium, every single expense. I'm going through that with a fine-tooth comb going, how can I shave off $10, $20, $30? Yeah, absolutely. And then the income, I mean, yeah, income and apartment situations would change too. But you're doing a great job, Kaylin. You really are. You're doing a great job for where you're at. Incredible.

No debt. You have savings. I mean, all of it. You really are. But that 60%, oh, that hurts me. You really are. But that 60 percent, oh, that that hurts me. It's a tough situation. And this inflation stuff, I mean, it's hitting people all over their pocketbooks from rent to gas to food. And so there's just batting down the hatches and let's get to work. Let's get the second job if we have to. Let's trim the subscriptions that we're not using right now. And all the little luxuries that we once enjoyed might need to go away temporarily. Yeah, for a season because they're saying, you know,

I read a report and they think in the next 18 months with just even the supply chain, all of that, but I'm like, I mean, the hard thing is after two years, I've just learned who knows. Who knows? That's right. I remember April of 2020 doing Instagram lives. I did one like every other day just to answer questions. And I remember I said, guys, I think by August, this will all be one like every other day just to answer questions.

And I remember I said, guys, I think by August, this will all be over. It's all going to be over. Here we are. So I'm not predicting anything. But I think you just have to prepare with where we're at, the reality of what's going on. And what sucks is that that means cutting back some because the numbers, everything is going up. Yeah. And if you're single, you don't have kids, there's more options because we can go, all right, let's get you a roommate. Now,

it's more difficult when you have a family, when you've got kids involved. It's not that simple. Right. But if you work from home, that can open you up to a lot of options, too. You may not want to live on the outskirts of town, but temporarily for a year, if we have to sign that lease to go, all right, we can now breathe and still hit our other financial goals. I'm okay with that. And it's amazing what peace of mind even does, right? Like we can talk about the numbers and the percentages and all of that all day long, but there is just something to be said

about when you do have margin, it gives you a level of peace, like a level of like you can take a breath and sometimes it's worth, the things you never thought you would do. I never would live this far from wherever. People make these claims, and then when life starts hitting you, and you think, okay, is it now I would rather live farther away

and actually have peace of mind and margin and enjoy life a little bit more than everything just getting sucked out of the paycheck. There's so much out of our control, too, and so I always like to go, what is in my control? So in Caitlin's situation, if I'm anyone listening right now, I'm going, all right, let me make a list of ways I can make more and ways I can spend less. I'm going to make a list of five things and I'm going to go,

okay, which one can I go do this week, this month? And just start trying things. What can I sell on Facebook Marketplace that's been sitting in the closet for a while? What is that second job I can take for a few months to just supplement my income temporarily? And so if you start doing all that, and that's why I love the budget audit. It's kind of a real nerdy thing, but you go, man, I'm way overpaying for auto insurance. Let me connect with Xander. Oh my gosh, I just saved a hundred bucks right there. And you start doing that in all areas. We've talked about this on your show, Rachel, with cable and internet. And how can we start shaving all this down, our phone bills, to where now we have 200 bucks a month in margin. We can breathe a little

bit. And it's not easy. I'm not trying to make it sound like it's just... No, but it's the stuff that's kind of the auto draft, the auto pay, where you're just like, oh, and then you look up two years and you're like, wow, I've never pushed on that or seen that. You know what I mean? And doing that, it does, it gives you some more margin. Yeah Yeah. You got to advocate for yourself and get yourself in a better financial position. And that's why our plan works in good times and bad. I mean, imagine if she had all these debt payments looming in her life. Yeah. Great work, Caitlin. You've done a great job. Good job. This is The Ramsey Show. We'll see you next time. Welcome back to The Ramsey Show. I'm Ramsey personality, George Camel, host of the Fine Print and Entree Leadership Podcast.

Joined today by my co-host, Rachel Cruz, host of The Rachel Cruz Show. You can check out all of those shows and podcasts wherever you listen to podcasts and on the Ramsey Network. All right, Rachel. So we've been talking about weddings and I've got this article here from CNN. Weddings are booming again. They're bigger and more expensive than ever. We love to hear that. This year's wedding boom is projected to be big according to a new report from wedding planning site The Knot. It anticipates as many as 2.6 million weddings taking place in 2022. The big events will also be much bigger and likely more expensive amid record levels of consumer price inflation. On average, couples spent a total of $34,000 on their wedding in 2021,

including the ceremony, reception, engagement, and wedding rings than not reports said. This is getting crazy. I mean, it's wild. And I just know, I know people personally that, yeah, they didn't have their wedding because of COVID. Like they weren't able to have the wedding they wanted, so they waited. Actually, we know someone that's on our team, and she's getting married tonight.

That's right. So, yeah, I mean, it's just, it is wild. And it's an expensive day. It's an expensive event. I always think about the Friends episode with Chandler and Monica, and Monica's like, if you call it a party one more time, because it's like our big party. She's like, it is not a party.

So, yes, it's an event. It's a day. It's a day. Yeah, when you divide the cost out by how many people are attending, and you go, oh, my gosh, is Uncle Richie really worth $214? Well, that's the problem. It's like the per head thing. It's when you start getting declines, you're like, okay, good. Thank you.

That's a great feeling. The people you didn't really want to show up that your parents made you invite. I know. Hopefully they're not listening right now. Sorry. They won't even know who they are. I was going to say, yeah, you're good. So here's the deal.

With all these expensive weddings comes a lot of wedding advice. And a lot of that advice happens to be on the Internet. And a portion of that Internet is TikTok, Rachel. And I know you have some feelings about TikTok. But there's a specific video that I wanted to show you. I wanted to watch together as a family. And I wanted to get your reaction. Are you okay with this?

I can't wait. Okay, here is some of the worst wedding advice I've heard. Okay. Let's go. So I wanted to share with you the worst wedding advice I've heard. Okay. Let's go. So I wanted to share with you the best wedding advice of all time. The second that you get engaged, open a credit card. Now, I know what you're going to say.

I already have a credit card. Of course. Get a new one. Get one that's running a promotion. But what you're going to do is you're going to put every single wedding expense you ever have on that card. Even if the vendor charges like a 2% credit card fee, pay the fee. It is worth it. Seriously. We got a ton of bonus points. We put everything on that card because we already have cash saved. And so I think a lot of people think like, well, let's just pay with cash. Then we're not in debt, right? But you already have the cash. So we just use it to pay off the credit card every month,

but we're still getting miles. And that's like where the money really is so then when you have all these miles you use it to literally book the honeymoon of your dreams for free okay oh there's so much there to unpack rachel we could we could sit here all day i know but it's the mindset that is so it's a mindset that's a good point that's so normal this is the normal cultural most people listening and watching goes i don't get it what was wrong with that that advice that's true yep yeah use the points go on the free vacation it's all gonna work out even if you have the cash that'd be okay that was the wildest part they've got the cash to do it apparently and she says even though you have the cash, put it on the card.

Here's the thing. And this is tried and true. It's always been true because there's been study after study after study that when you choose to spend someone else's money, naturally you are going to spend more because there is not an emotional

connection to the money you're spending. So as you're planning this wedding and putting everything on the credit card, you're like, well, yeah, yeah, yeah, let's do that. Or that dress, the dress is like $800 more. It'll be fine because we're going to get the points. That's future Rachel's problem. You start to justify.

You really do. These transactions and the expenses and doing a little bit more is actually better. I'd rather spend more because I'm going to get the airline miles on the back end so it's going to be fine and the crazy thing is when you look especially at wedding budget the average wedding is $34,000 and you give yourself any leeway emotionally to say oh we can spend a little bit more how much more thousands and thousands and thousands that you're probably going to spend, again, because there's just not that, there's not a feeling of, okay, that's my money leaving. So you are to get a plane ticket to Cancun.

And I'm like, listen, plane, it's expensive right now. I get it. Sure. But it's not thousands of dollars. Let's just say a thousand. Let's say it's $500 there, $500 back. Two people, it's $2,000. I guarantee you they spent more than $2,000 because of the idea,

oh, okay, but we're going to get some on the back end. Oh, yeah. Can I just go one more? Please. All day. And I know everyone's like, oh, I don't feel this way. This is one of the reasons that I really just don don't like i don't like the whole industry of credit cards because in order to get those miles in order to get those points it's not because

mastercard is like this generous you know giving it away and they're like you know what you've been just so great so i'm gonna just give you give you something they have trillions of dot like billions billions i'm gonna say trillions of dollars, like billions, billions, I'm going to say trillions, I don't even know if that's true, but billions, we can say for sure, of dollars for people that don't pay their credit cards off

and are paying interest. So the people that are mismanaging their money, you get to go get your $700 plane ticket paid for by them. And I'm like, it's gross. That doesn't feel good. Well, to me, I'm like, you know what? Gross. Can I just use my money and like stay away from like i don't even want to

participate i don't participate so i know part of that system i don't like it i don't like wow well we dug into this on the fine print podcast that we did and we interviewed an ex-employee at capital one who was overseeing one of these programs and here's what she told me the average credit card has 30 different price point and reward tiers. And that's on purpose. They want it to be confusing and overwhelming. And they do 10,000 experiments. That's a direct number, she told me, on customers. You are a hamster in the maze. And you get to the cheese and you think, I won. I won. I got airline miles. I won. And then you zoom out and you're a hamster in the maze, on the wheel, in the cycle of

trying to get more points to go on your next trip. And I just go, dude, become your own cashback program. Save up for your trip. I'll teach you how to budget. We can do this on our own and not have to hope for some miles to come through. And the fact that she said, and you get those airline miles and that's where the money really is. And I'm like,

your airline miles are worth $0. You can't cash those out. You can cash money out of your bank but your airline miles, 100,000 miles, where does that get you? That's not 100,000 miles of travel. That's an arbitrary number

that these credit card companies use to confuse you. If they were so generous, they would just say, all right, 2%, it's going to be full cash back. Here's $2,000. They make it confusing on purpose to get you to spend and spend and spend.

To spend more and more. Don't do this. And only 48% of Americans, so a little less than half, pay off their credit card every month. So you hear people say, well, I pay mine off. Yeah. Half of those people that say that don't. That's the problem with advice like this is she's saying a blanket because i can manage my credit card spending well everyone should go get a credit card and then half of america is in credit card

debt average 68 000 i'm sorry 6800 dollars so almost 700 seven i'm sorry gosh seven thousand dollars and and i'm like you, and the credit card arguments, because I'm like, the math, like, okay, get it. Like, sure, yeah, you spend that, you get, okay, yes. On the sheet of paper, I'm like, yes, that, that, that. But again, what you don't take into account is everything else we've been talking about, of how much more you're spending,

how much you're just in the rat race of them knowing you better than you even know yourself um and it's and then you know and i know some people use their credit card to make ends meet they literally do not make enough to live and so that's one reason they use which we would say hey you've got to cut expenses and you have to earn extra money. You can't continue to live in the negative. Can't keep digging the hole. And win long term. Yes.

Yeah. And then the other is just buying a bunch of stuff. I'm like, and then you end up with almost a $7,000 balance on average for people. And I'm like, and I think about the minimalists, some of our friends. And I'm like, it's just this American standard of what we expect to live like. And we don't expect to live like this. We're going to do anything in our means possible because this is the expectation. I'm like, who set the bar? Who decided that?

The credit card companies did. And here's the truth. You can't spend your way into a meaningful life. No, gosh. And you sit there with your credit card and you spend. Look at your transactions. How many of those were wants versus needs? Don't tell me you only spent it on gas. Listen, you're having some fun. And that's okay, but that stuff's going to have you if you're not careful.

And you're going to be sitting there with credit card debt, hoping for some airline miles so that you can go to Cancun. Pay for your own dang honeymoon. We'll teach you how. We can do this all day long, dude. You don't have to wait on Capital One. This is The Ramsey Show. I'm George Campbell, joined today by Rachel Cruz. And we are hitting the road, Rachel.

Our Building Wealth live event is coming to Las Vegas and Orlando this May. And Building Wealth is a hot topic right now. There's all kinds of opinions on how to do it, whether it's crypto, single stocks, zero down real estate, NFTs. It seems like everyone wants to get rich and quick. Plus, inflation has everyone freaking out right now. So join me, Dave Ramsey, Rachel Cruz, Dr. John Deloney, and Ken Coleman as we unpack these hot topics. We're going to walk you through what's going on today and teach you how to build real wealth. The financial principles that we teach are the only principles that work in prosperous times and in hard times. And we're going to show you the quickest and surest way

to become what we call a Baby Steps Millionaire. So get ready, Vegas. We're coming to you Thursday, May 5th in Orlando. We are coming to you Thursday, May 5th. In Orlando, we are coming to you Thursday, May 19th. And we are really excited. We've just confirmed four more cities for our Building Wealth events in the fall. So stay tuned. More on that next week. Tickets start at just 25 bucks

or you can get a four pack of tickets for just 60 bucks. This is a great deal. Don't wait. Tickets are flying off the virtual shelves. Go to ramsaysolutions.com slash events if you want to learn more. It's such a fun deal. Don't wait. Tickets are flying off the virtual shelves. Go to RamseySolutions.com slash events if you want to learn more. It's such a fun event.

We did this in January here in Nashville. Had about, what, probably 1,800 people or so. And it's such a great conversation to have right now and what's going on.

So we're pumped. We're hitting all the trending stuff and of course it points back to our timeless principles. Yep. So it's going to be a great time.

And Vegas and Orlando. Two great cities. Good cities. They chose well. They did. We're going to be a great time. And Vegas and Orlando, two great cities. Good cities. They chose well. They did. We're going to have some fun. Thanks, Live Events team. RamseySolutions.com slash events.

All right, we're going to the phones this hour. It's a free call, 888-825-5225. Anthony joins us in Bridgewater, New Jersey. Anthony, welcome to the show. Hey, George and Rachel. God bless you guys. Thanks for taking my call. I appreciate it.

We appreciate that. How can we help? So my question is around what to do with the extra cash from selling my house. So my wife and I bought a house in January 2020, right? So right before everything went crazy, COVID hit and market went up. So the value of our house went way up. And also we've pretty much doubled our income in the last four or so years. So we were able to afford a bigger house.

Yeah. So, yeah, we wanted to upgrade. We wanted to also move closer to parents. This way, when we have kids, it's easier for us to continue to work part-time or my wife. So we bought a new house, and we're selling our current house. And essentially, we made $150,000 from when we originally bought it. And so we want to do a couple upgrades to the house with the extra money we're getting. But with the remainder, I just wanted to know exactly where I should put it. So we're going to make sure we put in at least 20% equity so we avoid the PMI.

But also, we have about an extra $30,000 after everything's said and done. So I was wondering, should I just put the rest of it toward the mortgage? That's what my original plan was. I have still about $40,000 left in student loans. So I was wondering maybe I should put it there, get most of that out. And then lastly, should I be tithing any of this? So originally I was like, you know, I don't think so because it's just all staying in housing stuff and, you know, the whole market went up. But, you know, God gave us the house right before everything went crazy.

So it's like we're able to do this, you know, because of his provision. So I was like, maybe we should, you know, tithe some of that. And we have the ability to, right? $15,000 to be the 10% of that. So just want to know what you guys thought. That's great. Lots of great questions there. Yeah, and some good problems to have too.

I'll start from the bottom and we can work our way up. So the tithing thing, you know, for me, I mean, I think it's totally a personal conviction. I mean, you guys really may talk about it and say, God, we just, we really feel led. And those of you that have a spiritual walk, you know that feeling of like, it may, you know, right or wrong, but like, I just, I feel like I need to do this. So that may be for you guys, Anthony. I would say, you know, really, when we talk about tithing, it really is the money that you make from work that comes in.

And we always say giving 10%. So again, if you're a Christian, that could be in the tithe category. If you're not, it could be somewhere else. But any level of generosity is something that we really highly recommend. So for you guys in this specific situation, I don't think it's necessary, but if

you guys really feel convicted to do that, you can't go wrong with generosity, right? Like you're never going to look back and be like, dang it. Regret. Why did we give that money? You never do that. So if you guys are just kind of leaning that way, I think it's great. I don't think it's a legalistic right or wrong answer for me personally. Yeah.

And you were talking about what to do with this money. How much debt do you guys have total outside of the mortgage? Just the student loans, so just the $40,000. So you're making $150,000 profit. Why not just pay off these student loans completely? That's a good question. I guess we could. I was thinking put it into the mortgage just so that helps us pay it off a lot faster,

avoid a lot of interest over the years, but could definitely do that too. I'm on track to finish paying them off in about six years. Oof, that's not a good plan. Six years? Yeah. You said you doubled your income. I'm tackling that quicker, but... Do you have an emergency fund?

Yes, we do. Yes, so we have a $5,000 emergency fund. Is that three to six months of expenses, or is that a little low? No, that's definitely low. It could be more around the $20,000 we want to save up for that. If I'm in your shoes, which is how I answer questions, and you're following the Ramsey plan, which is why you called into this show, that means we're paying off all of our consumer debt and we're getting a fully funded emergency fund in place. Before anything else.

Before anything else. Now, ideally, if you called before you got this house, I would have told you to do that before you even jumped to this house. But you've got some profit here and we can use it wisely to set ourselves up, which means those house upgrades may have to wait. We can cash flow those later on. Right now, I want you to put aside, let's pay off the student loans, 40K has a name. Sally Mae's name's on it. Then the next 10 or 15 have the emergency fund name on it. Beyond that, we can talk about cash flowing some of these upgrades over time. How much will your down payment of the new house be, Anthony? Because i know you guys said you wanted to do 20 percent yeah i'm trying to think 20 it's about um around 150 i think uh i forget exactly what are you under

contract um on the new house the new house or the of the new house yes um so we already purchased the new house and we're under contract for the selling of our house. Oh, we had enough funds to bridge the gap. Oh, gotcha. Gotcha. OK. So, yeah, I would do exactly what George is saying, because once you pay off, you know, the student loans and you do a little bit, maybe 10 grand more, whatever it is for the fully funded emergency fund, you got have 20%. But right now, I think having those things, the debt payoff and the emergency fund, going into a new house, I think that's one of the smartest things you can do. Because then from there on, you guys have doubled your income, you're gonna be able to put more money towards investing and towards paying off this house even faster. And once you get to that 20% equity, contact your mortgage lender and see if they can drop that PMI that you're paying if it's under that 20%. So you're saying you haven't

put the money down on the house yet, but you've closed on it. What's going on there? So we've closed on it. We did put down already 10%. So 10% is already in. Oh, okay. The rest that needs to go in would be $60,000. Oh, that's great. So out of what we're making from the other house, yes, $60,000 we want to put towards that. That's amazing. Well, I love the idea of paying off the house, but we have to get our ducks in a row here, and that means getting rid of the debt, getting a fully funded emergency fund in place. That's going to free up those student loan payments that you would have been making.

It's going to give you some financial peace, some foundation, because as a homeowner, man, you know it. You're signing up for some things. There's going to be some costs associated with this, some upkeep, some foundation, because as a homeowner, man, you know it. You're signing up for some things. There's going to be some costs associated with this, some upkeep, some maintenance. Obviously, you want to do some upgrades, but we can cash flow those with our newly found income because we don't have student loans in our life anymore. Sounds good to me. No, I appreciate it. That's a great idea. Absolutely. We're full of great ideas here at the show. We're full of a lot of things, Rachel, depending on who you ask.

Hopefully great ideas. That's right. Yeah. But this housing market, it's a crazy one, Rachel. And a lot of people, we've been getting a lot of calls lately, should I sell the house? A lot of people are like, should I sell the house to get out of debt? Love the idea. Not always something that I just tell people to go jump on that today.

Because a lot of times they go, oh, you have $12,000 in debt. We can pay this off really fast. We don't need to sell the house to do and anthony i mean that's a pretty he's in a remarkable position because not only did you buy a house january of 2020 like we moved into ours november of 19 and i look back now i'm like by the grace of jesus i don't even know how that even happened but yeah so i'm like you bought at the perfect time you've doubled your income which we've heard that a lot with just market rate going up for people in their careers. So that's

amazing. I mean, you just have a lot on your side, Anthony. So when we talk about doing these little things that almost can feel like an ankle biter of like, oh, paying off the debt, getting the emergency fund. But to get from point A to point B to win long-term financially and to build wealth, this is the fastest route.

So this is what we would do for sure. But thanks for calling. Appreciate it. That puts this hour of The Ramsey Show in the books. My thanks to my wonderful co-host, Rachel Cruz, all the folks in the booth, Kelly, Ben, James, you name it, Andrew, they're all in there, and you, America. Thank you guys for listening. We couldn't do the show without you.

We appreciate you. We'll be back with you before you know it. 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 ramsaysolutions.com slash debt-free scream. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com slash debt-free scream.