The Ramsey Show - App - Turn Your Dreams Into Visions (Hour 1)

Episode Date: January 2, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Open phones this hour as we talk about your life and your money. The phone number is 888-825-5225. That's 888-825-5225. Well, a new year is upon us. I love a new year.

Feels like I'm walking up to a whiteboard with nothing on it. I can write whatever I want on this whiteboard, and then I can go about the business of making it so. It's a time to dream again, a time to reset again, a time to put the hurts and failures of the past where they belong in the past. A new year just means opportunity and upside for me. Yeah, I'm a glass half full guy and I want you to be too. So you can do this. What are you going to do this year? How are you going to change this year? How are you going to use this wonderful day, this wonderful month, this wonderful year that is given to you

with a clean slate to start again. Time to change some things, isn't it? We always kind of do that at the new year. Everybody sets new year's resolutions and everybody has this idea. We all kind of like a fresh start. And, you know, this year I'm going to lose weight. This year I'm going to quit smoking. This year I'm going to be a better dad, a better husband. This year I'm going to actually go to church every Sunday. This year I'm going to get out of debt. This year I'm going to lose weight. This year I'm going to quit smoking. This year I'm going to be a better dad, a better husband. This year I'm going to actually go to church every Sunday. This year I'm going to get out of debt. This year I'm going to really stick to my budget. This year maybe we're going to go to Financial Peace University finally.

Or maybe this year we're going to quit doing Dave-ish. Instead, we're actually going to change our lives and our family tree. What are you going to do this year? Let me just tell you, there's only one way that your dreams become a reality. Your dreams become a reality when you blow the smoke and the mist off of them and you turn them into a vision. The Bible says where there is no vision, the people perish. And you know what a vision is with work clothes on? It's called a goal, where you actually start to write down what has to be true for your family tree to be changed. You actually write down what has to be true that is not true now for me to lose weight.

How do you really build out goals here at the New Year? Well, goal setting has been taught to me since I was 10 or 12 years old. Mom and Daddy were in the real estate business. They used to take us to motivational seminars. I know it's geeky. I know it's nerdy, but that happened, and it's real, and it's been a part of my life my whole life. And so goal setting is second nature to me, but I have found that people who know how to set goals properly actually win. And there's seven areas of your life you need to set goals in. You ready to write? Write it down. You need to have financial goals. You need to have intellectual goals.

So you need to have some money goals. Are we going to get out of debt? Are we going to become an everyday millionaire? And you can set the goals for this year, for this decade. I don't care. Intellectual goals. Are you going to read some books this year that are nonfiction? Are you going to do something other than memorize everything on reality TV? There's nothing intellectual about that, I'll just tell

you. Family goals. Maybe there's some things we need to, I'm going to spend more time fishing with my grandpa. I don't know what your family goal is. What's your family goal this year? Spiritual goals. Going to read through the Bible this year. Going to take a Bible class this year. Spiritual goals. You're going to read through the Bible this year. You're going to take a Bible class this year. You're going to go to church on Sunday. Not kidding about that, other than just online. You know, are you really going to engage something and change something? What about physical goals? You're going to run a half marathon, a marathon. Are you going to lose some weight? Are you going to do a Spartan race? What are you going to do? What's your physical goals? Career goals. I mean, Ken Coleman will help you change your job, and some of you need to. This is your year to do that for some of you, for sure.

You're in a toxic work environment or you're in a good work environment, and you're just too lazy to leave or too scared to leave because you hate it every day, but it pays the bills. Social goals. Some of you, my wife always told our kids growing up, if you want to have friends, be a friend. Then maybe you need to be a friend to some people this year. Maybe you need to set some time aside with just a guy trip, just a girl trip. Engage some people. And then when you're setting goals, there's a couple of things. Goals have to

be five things. And if you do these five things in each of those areas that I outlined, it will change everything. Your goals need to be specific and they need to be measurable. That's number one and number one too. I want to lose some weight this year. You won't. That's measurable, but it's not specific. I want to make more money. You won't. How much more money? I want to pay off some debt. How much debt? It's measurable, but you need to get very specific. I want to lose 30 pounds. I'm going to pay off $30,000 this year.

I'm going to increase our income $30,000 this year. And as soon as you start putting some actual specific things to it, to the deal, then you can start to achieve these goals specific and measurable the first two the third one is it needs to be have a time limit i want to lose 30 pounds when over the next 30 years the next 30 days that's not realistic 30 years is nobody will notice not even you so you know what are we going to do? We're going to lose 30 pounds in 90 days. Oh, okay. Now we got a goal. You're starting, you're starting. It's specific. It's measurable. It has a time limit, 30 days, 30 pounds over 30 days. Oh, that's 10 pounds a month. That's two

and a half pounds a week. Increase your water intake, decrease your sugar in your bread and increase your sweat time on the treadmill by 30 minutes a day. And voila, you will lose weight. You don't even need Oprah. It works every time. You don't pay off $30,000 this year? Oh, that's $2,500 a month. Oh, that's $1,250 every two weeks. Oh, got to sell something. Oh, immediately it makes it real. It comes alive. And these need to be your goals. You know why people don't achieve goals? Sometimes it's my wife wants me to do this. My mama always wanted me to do this.

You're just pitiful. Why don't you have your own goals? You have your own goals. You need to own it. And when you own it, it'll happen. And the last thing is your goals need to be in writing. An old lawyer friend of mine says when it comes to doing contracts, that a contract is worth the paper it's written on,

and he always said if you didn't write it down, it didn't happen. It's as if a tree fell in the woods and no one heard it. If you don't write your goals down, it didn't happen. It's as if a tree fell in the woods and no one heard it. If you don't write your goals down, it didn't happen. Habakkuk 2.2 in the Bible says, write the vision and make it plain. When you write out your goals, you suddenly start to go, okay, here's what I got to do. I got to do something. I got to change this. Something's got to change. What has to be true that's not true now? And you start changing your life, your family tree, your physical presence. Everything starts to move. It's going to be a great year for you. I'm so proud of you. If your financial goal is to get out of debt for good and take control of your money, you should do what nearly 6 million people have done. Take our world-class money class. It's

called, if you haven't heard, you've been in a cave, Financial Peace University. The average family that goes through this saves $2,700 and pays off $5,300 in debt in the first 90 days. That's an $8,000 turnaround in just three months. This is a big deal. And you can find a class starting near you online or right now, or you can do it online. Learn more at DaveRamsey.com slash FPU. Financial Peace University. Now, maybe you're new to us. You're not quite ready to go into something that heavy. Hey, just jump over and take a quick free three-minute assessment, and we'll show you where to start. It's free, and it's a customized plan for you.

Text the word START to 33789 or go to DaveRamsey.com slash START. That's text START to 33789 or go to DaveRamsey.com slash START. And we'll show you how to live your dreams, baby. We're going to show you and walk with you while you hit these goals. It's time to change your life. You got a whiteboard in front of you. Draw a beautiful picture on it. It's going to be a great year.

I love New Year's. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable affordable biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accred organization, CHM members share to pay

each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Mark is in Columbus, Ohio. Hey, Mark, how are you?

I'm doing great. How's Dave doing? Better than I deserve, sir. How can I help? I guess I would say, what would Dave do question? We're in the process of selling a property that we are debt-free, but for the mortgage. Selling a property that we're going to have close to $50,000 left over. My question is, should I apply that to the mortgage of my primary

home or should i take some of that and invest it for retirement i'm 52 years old my wife is 51 are you um debt free except the home then at that point for the home yeah and you have your emergency fund already fully funded emergency funding we're in baby step six yes so you're putting 15 of your income towards retirement already. Pretty close. We're not exactly at the 15%, but very close to that. Any kids' college need to be done? No.

Okay. All right. Then, yeah, it goes at the house. You would put it all towards the house, none of it towards retirement because of our age? No. If you want to crank it up a little, throw an extra Roth on there or something. Well, that's what I'm thinking is opening a Roth for my wife, funding her Roth, completely, you know, fully funding hers.

What's the balance on your home? The balance on the home is about $190. Okay. And the home is probably worth $250. What's your household income? Around $100. Okay. So, I mean, how quick you want...

If you throw $5,000 at the Roth, it doesn't keep you from paying off your house, okay? Right. It doesn't change anything, really, here. So, if you want to drop, you know, $6,500, you guys are old enough to do $6,500 and open her a Roth and put that in a growth stock mutual fund, that's fine, and then throw the rest of it at the house, it's okay. Especially since you're coming up a little short on your 15%. Right'm coming up just a little bit short on that and i don't have we just started your plan probably seven eight years ago we were in a um dumb graduated from

that okay well you're you got you're good i mean you're going to be fine you make good money you're going to get the house the house will be done in about probably five years. That's the plan, yeah. And, you know, if you keep cranking 15% of your income in, you're going to retire with dignity. You're going to be in good shape. And this one move is not going to cause one or the other thing to not happen. And so, yeah, that's a good move. Good question. And especially since you're running

it gets you up to your 50 if you've been coming in at 13 or 14 or something then in the last few years on your baby step four and then you throw an extra 6500 on it this year it kind of brings that back up a little bit this is you know it's not a perfect science here the whole thing is save and get out of debt that's the whole thing. Anthony is with us in Wilmington, Delaware. Hi, Anthony. How are you? I'm well. Thanks for taking my call.

Sure. What's up? My situation is I just heard about you about two days ago, and I haven't stopped watching the videos on you. I don't have any debt, and I have $120,000 in the bank. Good for you. I don't, um, I own my cars, me and my wife. I don't own a house.

I currently rent and, um, I'm scared to invest my money because I think everybody's going to try to scam me. So my question is too, is I want to invest because I've been listening to you for a few days, but I don't know what companies and, like, I don't know. Like, I hear what you're saying, but I don't know what that means. I understand. Sure. Well, number one, take your time.

There's nothing on fire. How old are you guys? I'm 35. And what's your household income? 130. You've done very well. Congratulations. Excellent job. How old are you guys? I'm 35. And what's your household income? $130. You've done very well. Congratulations. Excellent job.

Well, four years ago, I was a homeless drug addict. Really? So I'm working on some stuff here. Wow. How'd you get dry? God. I had an encounter. Way to go.

Very neat. I love it. Good for you. Well done. Yeah. Okay. So, you know, whatever you do, you you go all in and you went all in on saving money and and it's paid off for you so very well done sir so what i would do if i were in your shoes is i'm going to set a portion of that 120 aside and call it my emergency fund three to six months of expenses you probably already heard me

talk about that a hundred times yeah Yeah, I've been hearing. And then the rest of it is either going to be used for purchasing your first home and or to begin some investing. Both things you need to do in the next couple of years. But there's no huge rush. People make mistakes with money when they get in a hurry. And you know why what

you've done has worked? A, you were comfortable with it, and B, you understood it. You weren't feeling like you were getting scammed. You didn't worry about doing something you didn't understand. So you use the same principle going forward on your investing in a home or investing in some mutual funds for your Roth IRAs and stuff. You just slow down, and you get with somebody and you learn. And you learn about investing enough.

It's not like you've got to get a master's degree in finance. It's not rocket science. You can sit down and learn about it. It's like if you can learn to operate a car, you can learn to, you know, operate an investment. There's not that much to it. But you just learn about it to where you are making the decision. Dave Ramsey's not making the decision. Some guy Dave Ramsey sent you to is not making the decision. You're making the decision. Dave Ramsey's not making the decision. Some guy Dave Ramsey sent you to is not making the decision.

You're making the decision, and you understand it. And don't put money in it until that happens, because it'll rob your peace. It'll steal your peace of mind. Right now, that 120 is very safe and gives you peace of mind. If you invest this in something that someone else is watching over, and you have no freaking clue what's going on, you're going to be up nights with worrying about it.

And it gives you the exact opposite of the effect it should give you, which is the sense of power and the sense of investing. I mean, the sense of confidence and peace from a financial perspective anyway, that you can move forward. So

what I would tell you to do is jump online at DaveRamsey.com, click on that SmartVestor, and put in your stuff. It will drop down a list of the SmartVestor pros there in your area. Sit down with one of them. There's no obligation. They're not going to charge you anything to sit down with them. And you're looking for someone with the heart of a teacher. That's how we vet them, because you're not there to be sold.

You're there to learn. And if you learn, then you decide what you want to buy. And so what do you do for a living? I do construction. Okay. And so construction technique to do a certain thing, to build a certain, whether you're doing framing or whether you're forming concrete or doing steel work or whatever it is, there's a process that you use there that has to be learned.

And when you learn it, then it kind of becomes automatic. And that's true of investing. It's no different than just what you do every day for a living. And so, you know, this is how you do there's a this is how you do it once you know how to do it you just do it and it's not a there's not a big uh intellectual heavy lifting thing going on here so just sit down with one of these guys or gals with the heart of a teacher and begin to learn do not feel pressure from anyone including me me or them, to put money in something until you understand it.

And then once you understand it, I use, as you've already heard, growth stock mutual funds for my Roth IRAs and so on. And that's what I'm going to recommend you move towards with your baby steps and, you know, start talking about using the larger portion of this money for a down payment and get you guys a home and let's move on to that uh you know get that part of your life locked in and dialed in and uh stabilized and and that's the purpose of controlling all these money variables is it stabilizes these different corners of your life and allows you to prosper then and continue with your sobriety, which is an awesome, awesome path that you're on.

I'm so proud of you. Well done. So hold on. I'm going to send you a copy of the book, The Total Money Makeover, which will give you the exact step-by-step plan through what to do and show you what to do just as a gift to you. I want to be part of your continued success that you're having here. Thanks, Anthony.

Appreciate you calling in, man. Open phones at 888-825-5225. You jump in, we'll talk. Richard's on Twitter. Dave, I was turned down for term insurance by one company. Should I keep my universal policy? You should keep your universal or whole life policy if you're uninsurable and can't get term. Being turned down by one company does not mean you're uninsurable or can't get term.

And so you keep it until you have, you always keep your current life insurance until you have new life insurance in place. Always. Even if you think you're not sick and you're not worried about being insurable, you still keep it in place just out of an abundance of caution. You never cancel current life insurance until you have the new life insurance in place. Once you have it in your hand, policies in your hand, then you cancel it. So get in touch with Zander Insurance, Z-A-N-D-E-R, zanderinsurance.com, and they'll walk you through and look at your medical condition or whatever it is that's bothering them, Richard, and see if you can get insured.

If you can, only when you are from Cape Girardeau, Missouri. Hi, Jody. How are you? Hi, Dave. I'm good. How are you? Better than I deserve. Welcome. Good to have you visit. Thank you. Thanks for having me.

So you got a question. I do. I have a what would Dave do situation. I've taken FPU and my fiance Hunter and I are taking FPU again or we're taking it together this weekend. Good. I feel like I know the answer to this, but I just would really like your guidance on this. So I just started my new job on Monday. Um, that's why I'm here in town and I'll be traveling. I'm, I'm a sales rep,

so I'll be traveling some, maybe once, twice, maybe three times a week. Um, I will be, I have an expense account, so I'll get reimbursed on everything, but I don't know. Here's my question is I don't know how to, how to budget for it, how to plan for it. Um, I think because I don't know dollar amounts, right? I don't know how to how to budget for it how to plan for it um i think because i don't know dollar amounts right i don't know exacts everyone keeps telling me everyone keeps telling me like get a credit card so you get all the points and the miles and i know i know that's not the answer i'm like no dave dave i can't do that dave won't like that so my my question is how do i how do i plan for this how do i budget for it that's kind of where i'm at what are you gonna be selling um it's agricultural marketing type products great good for you thank you cool well um let we'll have to use some examples because we don't know yet in your situation exactly okay um what are you estimating

your income to be um in the 70s okay good all right so the best way to do it is set a separate checking account aside with a debit card on it just for travel. Okay. And because the problem with expense accounts is people will use their personal credit card for things on the road that are okay to put on the expense account. And they use it also for comfort stuff because traveling is tough for things that are not okay but you got the whole thing set up under the rationalization i need it for my reimbursable expenses but people end up running up debt all the time that travel because uh they they buy stuff that they cannot turn in on their expense account while they're on the road it's not it's not okay and uh or they lie

and do turn it in which we'd never recommend that so anyway you figure out what your actual reimbursable expenses are going to be in a given week or month how often will they reimburse you you know i don't i don't know i think every pay period so every other week is what i'm assuming but i'm not 100 percent sure on that that would be fairly normal. Okay. Okay, so we would say every two weeks. So two weeks' worth of expenses. We'll just make up a number, $2,000.

Okay? Okay. Might be more, might be less. You figure it, but you find the real number. Okay. And you put that much of your money in the account one time. Okay. And then as you spend down your money you turn in the expense report

the next week or two weeks later they give you the money back it comes back up right so all you have to do is put it in there one time to prime the pump so to speak and then every time it drops down it's only dropping down by reimbursable dollars that you're going to get right back two weeks later in our discussion here. So it comes right back up. So let's say you spent $700. It goes down $700. You get a $700 check.

You put it in there. You're always going to have that $2,000 in there that's just sitting there going up and down, up and down, up and down, up and down, and you use a debit card. You don't have to get into the credit card business. The credit card is really dangerous in these situations. Again, I travel a lot. I don't travel as much as I used to. I used to be gone all the time.

But travel is rough. People that think traveling is romantic or something don't do it. And what happens is we get tired, and we overeat, and some people overdrink, and some people do other things on the road and um it can just be you know little silly expenses just for comfort because you're just uncomfortable because you're on the road and uh people just spend money is what amounts to and you'll end up with ten thousand dollars in credit card debt of unreinforcible expenses in an eye blink in a situation like you're in as much as you're going to be gone. So you've got to avoid that.

And by having that real money in there and it being a real debit card and it only being reimbursable stuff, you'll be super careful and you'll watch it and you'll do it. So you've got to prime the pump one time so that it doesn't run dry during that two-week period of time if it's a two-week reimbursement. So you've got to get all that dialed in, get an estimate on the expenses and how often it's going to come, and then that tells you what your goal is to set that thing up and to get you going. Does that help?

Yes, it's very helpful. Thank you. Hey, thanks for coming by. Thank you, sir. Thanks. Congrats on the new job and the new marriage. Thank you. Things are going good. All right, Tommy's with us in San Antonio.

Hey, Tommy, welcome to the Dave Ramsey Show. Hey, thanks, Dave. What's up? Well, I'm 27 years old. For my company, I'm kind to the Dave Ramsey Show. Hey, thanks, Dave. What's up? Well, I'm 27 years old. For my company, I'm kind of the road warrior. I'm home 30 days a year. I'm traveling the country for work. Luckily, while on the road, all my expenses are paid for.

I pay them, and then I turn in all the receipts for eating, renting, whatever else I use. And so it otherwise saves me quite a bunch of money that I wouldn't be saving if I had been home all the time with a desk jockey kind of job. My gross income was $66,000. This includes a $10,000 bonus, which fluctuates based on company profit. This results in $53,000 net. I currently have $62,000 in my checking account, $18,000 in a Roth IRA, a target fund. I don't have any college debt. I don't have any debt. Way to go. But I do have a degree. My monthly expenses, because I'm never home, comes out to less than $1,300 a month. That's including rent, water, Netflix, everything. My sister just bought a house.

I'm wondering if that's something I should be doing so that I'm not just spinning my wheels, money sitting in a checking account. I can keep putting it into other forms of mutual funds, but I've been throwing it into a Roth IRA for retirement purposes. Do you recommend a house? Do you recommend more investing? I just fear I'm not home. It may not be feasible to have something that's just sitting there without my eyes on it. So you rent an apartment now?

I do. Okay. $750 a month. Okay, cool. Well, what I would do is Okay. $750 a month. Okay, cool. All right. Well, what I would do is take the $60,000 in your checking account, let's allocate a portion of that and call it an emergency fund and separate it out into a different account.

Sure. And the money above that is your down payment. How old are you? 27. Okay. And you said you're making $66,000. If I woke up in your shoes and I was 27, I would buy a condo in a nice condo, okay? Okay. Because I don't have to worry about the maintenance while I'm gone.

I don't have to worry about the yard being cut. Number one, I'm single. I don't want to screw with it. I don't want to screw with it either, by the way. But if I'm in your shoes, I'm just thinking like you. You don't have a yard to cut today. That's a good thing, right? You don't have to worry about maintenance today.

And if you're gone and something springs a leak, there's a landlord there that knows it. And the same would be true around the property management firm overseeing the HOA for the condo. And you could actually have somebody look in on it and check it every so often and that kind of thing, depending on how long you're gone on these stints. But a condo, because of the maintenance issues, and it gives you the same benefits as the apartment, but you've got that ownership, and it's going to go up in value, and you've got a good down payment saved.

And the way you're working, man, you probably turn around and pay the thing off pretty quick. What's the liability on a condo i mean is that do i cover drywall in and they or yep if something happens you buy a condo uh policy a homeowner's policy uh that's specifically written for condominium documents and it does you're exactly right it covers drywall in and your hoa fee covers your exterior structure the condominium association covers the exterior structure with their um with their policy and so if there's a fire for example all of the exterior from the drywall out is on their policy and your contents kind of like you have a contents policy now on your apartment, except you've got, you know, the kitchen dishwashers inside there.

So that one's yours, right? That's your baby, as an example, those kinds of things. But the condominium policies are very standard. They're fine. I own several condominiums, and I've got that on all of them. And, you know, it's a good investment. Again, I want to be careful that you get a condo in a good area where it's going to go up in value, but you're not overpurchasing.

And it gives you something to turn around and target some of this money at because you're just doing really good with the money, and you're looking for a place to stick some of it. And you're doing 15% going into your retirement, your baby step four. And then above that, we're going to reach over and pay that condo off as soon as you can. And that's going to put you in a really cool place. And yeah, that's exactly what I would do if I woke up in your shoes. But I personally, you can buy a house if you want to buy a house.

I don't care. I personally wouldn't want to mess with a house if I were 27 years old traveling in your shoes. You know, it's up to you, though. You can do whatever you want to do. Hey, good question. Thank you for joining us. This is the Dave Ramsey Show. Thank you. Steve is with us in Lexington, Kentucky.

Hi, Steve. Welcome to the Dave Ramsey Show. Hi, Dave. Got a question around a couple of bills to pay. I've got a car loan at $19,000. I have a 401k loan at just about $14,000. Can't prepay the 401k, but I have about $9,500 to apply. I was wondering if it would be advantageous to pay that on the car loan or just wait. What's your household income and how much debt have you paid off so far? So we paid off all of our credit card debt.

Our household income is about $190K a year. So we're a couple months out from closing both of them, but I was just curious what you would recommend in the short term. Well, you're going to do this in just a matter of months, so mathematically it's not going to matter much. It's just a matter of how you want to think about it. When in doubt, I stick with the dead snowball, which is the smallest one. And so what I would do there is just that means that $9,500 sits in an account, and you add $4,000 to it, $4,500 to it until you've got the $14,000.

You're going to have that in like a month, and then you pay off the 401K loan, which is good. Then, of course, we're going to try and knock the car out shortly thereafter. Paying off either one increases your cash flow because the 401k loan has a payment associated with it. So does the car. So, but the cash flow on either one of these debts is not the magic here. The magic is the ratio of your income to the remaining debt. And as you said, this is just a matter of months. So I'm going to stick with it and just do the 401k since it's smaller. You're almost there. You be there in a month and um i'm gonna set that 9500 aside put 4500 with it pay it off next month and then head on into that car loan man hey thanks for the call congratulations you're almost there i can see the

light i can see the i can see the finish line matt is in dallas hey matt how are you oh my gosh dave i am going so fanboy right now. I can't believe I'm talking to you. Well, you're going to be underwhelmed, bro. How can I help? Okay. So last August I got a new job, and I'm still doing Baby Step 2. I'm going to be out at the end of the year, I hope, with my student loans,

which I just got under $100,000 as a last paycheck. So I should be out at the end of the year, at which point around the first of the year I can opt into the 401k at my work, but I won't have my emergency, fully funded emergency fund set up. But I'm in a job where if I got fired, the next day I could go do the leave work and not really miss a beat. Yeah, the only kind of loss of employment is not the only kind of emergency. Transmissions go out on cars and people die die in other states, and you buy an airline ticket. All kinds of emergencies pop up, and loss of job is only one of the types of emergencies that you can get into.

So now I'm going to finish up. Now, if you get to three months of expenses in the three- to six-month range, then you're there, and you've finished up your baby steps. But you want that emergency fund in place before you start the 401K. That'll come back and bite you if you don't do that. Now, here's what I predict, though, okay? I predict that you're talking to me in January, and you said by next January you've got to decide to get into the 401K, and your projection today is you're going to pay off the student loan in December.

I predict you're going to pay it off faster. Oh, yeah. I hope so. Yeah. I'm tired of it. Yeah, which is going to give you – you've got an emotional momentum, I can tell that by talking to you on this whole thing. You're game on.

I mean, you're leaning in. You're leaning towards the tape. And so you're going to – some things are going to happen on the positive side of the equation, and you're going to knock this thing out, and you're going to have your three months by January. So it's going to become a non-issue. But if I'm wrong and it does become an issue, finish your emergency fund before you start your 401K. I want you in your 401K. It is a leading indicator

to becoming an everyday millionaire. Being in your 401k is a big deal. Doing your Roth IRA is a big deal. Getting a good growth stock mutual funds and making money for your family, long-term, steady, steady, steady. It's a big deal. It's one of the biggest data points in our millionaire study that Chris and the team did for the Everyday Millionaires book. Seventy percent of those millionaires use steady investments and were millionaires because of their 401K, their Roth IRAs, and so on. So I really, really, really want you there because the goal is to get you not only out of debt but then to the everyday millionaire. That's the goal and and so uh but i also know that when you try to skip a step you'll get your knee kicked and you'll have a sore knee murphy will

kick your knee so make sure you have your emergency fund before you start your 401k really good question thanks for joining us corbin's with us in Austin, Texas. Hey, Corbin, welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? Okay, so I have an interesting question. So me and my husband, we are looking to purchase a house, but I have anxiety about it, and he is ready to jump in with both feet, And our issue is price and what's the best, I guess, most affordable way for us to go about it to secure our future. We have a unique situation to where we are fortunate, unfortunate how we got it, but fortunate enough that we both are medically retired from the military. So we receive $54,000 a year without working.

And that's amazing compared to some other people. But with working, we both make about $120,000 a year without working. And that's amazing compared to some other people. But with working, we both make about $120,000. Excellent. So for me, I say let's go more around the $90,000 range because what I do, I'm a licensed massage therapist, so my work is in and out. But he is a project manager. So $90,000 to me is a safe annual income to judge for the price of a house. But he is ready to go for it. I don't think that using your entire income is unsafe. Okay. Unless you have a real reason other than vague worries

that you actually don't think you're going to be able to do your job. Okay. Our plan, we are able to do your job? Okay. Our plan, we are planning to do a hefty down payment because right now we are renting, but we live so well, like within our means, we're saving about $4,000 a month. Wow, look at you. Yeah, so we're like killing it on the making sure everything's paid and we have a hefty down payment that we want to do. And I know that you also say 15-year fix, no doubt about it.

Absolutely. Our mortgage broker, because we are going to be VA, has also pushed around the idea, which I think I know your answer, but has pushed around the idea of doing a 30-year just paying it twice as fast, which is kind of ridiculous to me. It makes no sense. Why wouldn't you just do the 15-year? You would do a 15-year. Exactly. And you really wouldn't do a VA loan.

They're more expensive than a Fannie Mae loan. No, wait a minute. Wait a minute. You're on disability. So they're going to waive the funding fees for you. Yes. Yeah. There's a lot of benefits for us.

So it's unfortunate that we get paid, but it's fortunate for our financial future, I should say. Well, you served your country, and you got hurt doing it. So, I mean, that's what that's for. I got no issue. I mean, I'm sorry you went through that, but, I mean, I'm proud as a taxpayer that you're getting that money. So thank you for your service to both of you. Now, a 15-year fixed, the VA might be cheaper given the fees that are waived due to your disability. Might probably is cheaper, actually.

But a 15-year fixed, put as much down as you can. And the reason for putting as much down as you can is we want to turn and pay it off as fast as we can. Exactly. But no more than a fourth of your take-home pay but i would use your total income to calculate it you're you're just really i mean you're conservative you're doing really good but uh you're your personal nature is you're the tightwad in the house and you're just you're just wanting to pull everything back but i i think you're fine i think you're fine the two of you are go-getters you watch what you're doing you're very intentional i would do that.

And then let's turn around and get it paid off as fast as we can. That's the idea, of course, because a paid-off house and the steady use of the retirement plans are what lead to this everyday millionaire. So very good stuff. Well, Corbin, thank you again for serving your country, and that's exactly what I would do in your situation. Hey, thanks for the call. Open phones at 888-825-5225 you jump on we'll talk about your life your money free call around here

our thanks to james childs our producer kelly daniel our associate producer and phone screener i am dave ramsey your host and we'll be back before you know it. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.