The Ramsey Show - App - What Are the Financial Implications of Getting Married? (Hour 1)

Episode Date: August 11, 2020

Education, Debt, Relationships, Home Buying Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 🎵 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. My co-host today on the air, the one and only Dr. John Deloney, Ramsey personality. So, Dr. John, here to answer your questions about life and me about money and life. And we're just going to talk about you right in front of you.

I love that. And it's a free call. And some say the advice is worth what you pay for it. I still think it's double that, but we'll take them at their word. Easy double. Easy double. Easy double. Like when I went to work for that guy for free one time, I told him if I wasn any good he could cut my pay in half that's the same thing there we go open phones at

888-825-5225 that's 888-825-5225 we're going to start this hour off with janelle in dayton ohio hi janelle how are you good how are you better Good. How are you? Better than I deserve. How can Dr. John and I help? So I am currently starting my master's program, but I have a lot of student debt from my undergrad. A portion of it is in my parents' name. It was a Parent PLUS loan, but it's kind of mutual understanding that I will still be paying those back as well as the ones in my name. The Parent PLUS loan, though, have much higher interest rates, and I'm trying to start paying some of these loans off while still in school, even though I don't have necessarily a super steady income. And so I'm trying to decide if it's best to start paying on the ones with the higher interest rates or pay on the ones that are actually in my name to help my score.

Okay. Probably neither. How are you paying for your master's? Still on loans. I'm sorry? I'm still using student loans. Okay. Well, before we would pay down one student loan with the left hand and go borrow another one with the right hand, we would just use whatever money you have to pay down student loans

to take less student loans or no student loans for your master's. Okay. It's kind of silly to pay down a student loan and then turn around and take one out. Yeah, it's like filling the bathtub and drilling a hole in the back of it at the same time. What are you getting your master's degree in? Public health. When will you complete it? I have two more years yet.

Are you already in it? Have you started yet? Yeah, I've started. Why is it not a two-year master's? It is. I have only, like, just started. I'm only a semester in oh okay all right all right and and how much do you make uh currently i'm only working part-time at twelve dollars an hour but i'm applying for full-time position since my master's classes will only be in the evenings. Yeah, yeah, you need a full-time big girl job. And then pay cash for your first goal is to pay cash for your master's.

That's goal one. And just don't pay anything on these other student loans. They're not due right now while you're in your master's. Just let them sit there. Yeah, I was just trying to get some payments on them while their interest rate was 0%. Yeah, I understand, but it doesn't matter. It is kind of ridiculous to be borrowing student loans while you're paying down another one. So get the big girl job, pay cash for your master's. That's job one.

If you're doing all of that and you've got the money to pay for your living expenses and your master's and you're taking out no more debt, I'm going to call that a win. But if you go past that and you have extra money, then list the other debts, smallest to largest, and attack them in that order. That's what I would do. All right, Julie is going to be next in Chicago. Hi, Julie. Welcome to the Dave Ramsey Show. Hi, thank you so much for taking my call. It's an honor to speak with you both. You too. How can we help? Well, my boyfriend and I were friends for about 20 years and became a couple about 17 years ago. We were both divorced at the time.

He has three kids. I have two kids. All five of them are beautiful, amazing kids, all wonderful adults now. The thing is, is that we've always raised our kids in separate households. So we've never lived together. We've not combined anything together. And I'm going to be 55 this year. He's going to be 53. So I'm wondering at this point, now that the kids are adults, should we get married at this point? Because, you know, I've been told that there's a marriage penalty.

His income is higher than mine, significantly higher than mine. Mine fell because of COVID, unfortunately. But if we combine households, then I'll lose head of household and then I'll be added in and then be at a higher tax rate. So I was just wondering what you thought about that. Yeah. You won't be significantly higher tax rate. There may be a little bit of a bump married filing jointly, but very little. And here's the thing.

To me, that is a minor issue. If you're 55 years old, you love this guy, and you want to spend the rest of your life with him, get married. Just get married. I'm so glad you said that. You all been together 17 years? Yeah, painter, get off the ladder. So, you know, we both want to. were just like i said kind of concerned we've heard

so many naysayers about you know combining income well there's a lot of people out there there's a lot of people out there that have little small lives you're not one of them have a big life get married wonderful you're halfway julie you're you. Julie, you're halfway done. You're halfway down the aisle. Well, you're all the way. No, y'all are done down the aisle. You're 17 years together. But I'm saying you're halfway done with your life.

You're going to live to be at least 110, Julie. I can tell by the joy in your voice on the phone. Talk about test driving the car. You have test driven this car for the better part of two decades. I think, yeah, get married. Get married. And listen, here's the other thing. There is some actual statistical data in the tax law that may or may not cause you to pay slightly higher taxes.

There's a lot of other data that says that people who are married have a higher tendency to prosper than singles in their careers in their wealth building the combined household is much more powerful mathematically uh and so anything that you lose in a little bit of taxes you're going to gain back probably 10x by the quality of your life going up and as a result a lot of your life going up, and as a result, a lot of your health issues go down. Your married people live longer. They do make more money on average. There's tons of data that shows, they call it the marriage lift in the financial world, that married people just have a higher tendency to prosper. It's not so you can't do it single but there's a uh you know whatever you whatever

downside there is in the tax law you know it's going to be a lot of upside on the other and combining households and combining your finances is an exciting adventure it's called living life together that's right and she she's got the back half the kids are gone she just gets to create this i mean you're walking in as a universe you're walking in his empty nest you've won you got the best part to go yeah this is great yeah get married tomorrow i love it go catch up go catch your pastor and say i need to go to coffee and bring your little book because we're getting married i love it this is the the Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs, whether they're anticipated or completely unexpected.

For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up. They could have faced a huge financial setback. But thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually Thank you. nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org.

CHM is a proud sponsor of, Ramsey Personality, is my co-host today here on the air. Joey is up next, and Joey's with us in Louisville, Kentucky. Hi, Joeyey how are you hey dave dave and dr d thanks for taking my call our pleasure how can we help all right so i'm on baby step 3b um i'm getting married in november and i have a car uh it's paid off i paid cash for it but it's a it's a german It's an Audi, and I just put new tires on it. They cost me a grand last month, and then I had something going on with my brakes that I just got quoted. $1,900 to fix the rear brake.

I think I'm getting a second opinion. Yeah. That sounds like a dealer to me. No, that's like a mechanic, but they're telling me to go to the dealer because the parts are so expensive. Wow. The car has 40,000 miles on it. What's the car worth? I could get rid of it for $17,500.

Okay. All right. So what's your question? My question is, should I fix these brakes and sell it? And then I only paid $21,000 for the car, and I could get $17,500. So do I fix this and sell it? Because down the road, I don't want to drop $2,000 every time something goes wrong with this car. Well, I mean, it is a more expensive car to work on than a domestic car

or a more standard Honda-Toyota thing. I mean, an Audi, a Mercedes, a Beamer are going to cost more to work on. In any case, a $1,900 brake job blows my mind. But, so, I mean, if you're tired of that stuff and you want to move into a, quote, more reliable, less expensive to maintain vehicle, that's fine. But don't use this as an excuse to move up in car. We're going to, you know, buy a $17,500 car when you sell a $17,500 car. Does that make sense?

Yeah, exactly. I guess so with me getting married and we're saving for a house, it's like a $2,000 expense every isn't gonna well i don't think that's gonna happen but you know but it has exposed the fact that you have an expensive car to work on so when it does break but i mean you don't really we don't none of us sitting here thinking you're gonna spend two thousand dollars a month for a year you're gonna spend twenty four thousand dollars to keep this car running that's not the case they're out he's not a piece of crap they're a good car but uh you know but obviously there's some expensive parts on that puppy or something i am really going to get a second third and fourth opinion on this i'm just not going to when something seems weird it's

usually because it's weird right and that mean both john and i had a physical reaction when you said 1900 and you know we're not mechanics we don't work on cars uh but we both uh have enough redneck in us that we've turned a wrench here or there and so you just you just kind of go huh i just know my first two or three cars didn't cost 1900 for the whole machine man much less the brake job on it well that's true there's that too that gives you head tilt but yeah if you're going to move just move to something that you know look for what you're looking for is reliable and or low maintenance cost uh or both and there's no problem to do that and you can move down a little bit in car but let's not move up in car because that is working

against your uh in terms of cost uh it's working against your goals, your preset goals. All right, and Catherine is in Los Angeles. Hi, Catherine, how are you? Hi, Dave, I'm doing great. How are you? Better than I deserve. What's up? So I'm 27.

I'm a nontraditional college student. I just finished off my two years at a local community college, and now I'm trying to figure out where I want to transfer to. I'm a little bit nervous in making that choice. I've got about $30,000 in savings, but I'm currently unemployed. So the two schools that I'm deciding between, one is in California and I've got a full ride to go there, which seems like the obvious choice. The other one is out of state. It would deplete my savings, but it's where I want to live and it's where I want to build, like, my life.

So I think I'm feeling a little bit behind and stagnant in life and trying to maybe skip a few steps, but I really want to go to that school out of state to build my life there. Where out of state? Oregon. Okay. And have you told them that you have a free ride and they need to give you one in order to get you to come? Oh, yeah. I've tried to negotiate it. I've gotten

a little bit of money out of them, but I haven't been able to get quite enough. Okay. I would be hesitant to borrow any sort of money to deplete any sort of savings in the current higher ed environment. I would, even if it's for another semester, I would go with where the money is free. I would go, you've got two years, another semester. Nobody knows what this fall is going to look like. Everyone I know across the country working in colleges is trying to figure out what the next day is going to look like. I would take the free money right now, settle down for a second. You don't know. None of us know what the world's going to look like in 24 months.

So I would take the free money and hold on to my savings. Yeah. I agree. And it does not preclude you from continuing to work on this. Not at all. So where in Oregon are we talking about? I'm looking at the University of Oregon. Okay and what field of study are you in? Marketing. Okay good okay so that could land a lot of places.

So the University of Oregon is not as much of the issue and that's located what Portland? It's in Eugene. Eugene, Eugene. What I like about them is they've got a really great pipeline into Nike and Adidas, and my background is in entertainment marketing, so it seems like a really great parallel to me to dive into that. It doesn't matter. I'm just worried about it.

Marketing is marketing. Marketing is marketing. That's not, I really, I don't think so. And, I mean, your goal in life is to end up in eugene oregon yeah i i really love it there i'm done with california okay all right all right are there any other schools in eugene uh there's a couple i haven't looked at them a whole lot i was more drawn into the relationship that uofl had with nike your uofl had with your what uofl had with nike nike oh crap absolutely do not chase that no don't do that oh don't do that not at all no that that's gonna you have narrowed your focus

all the way down to a laser night a singular possible outcome and that is a bad plan marketing career is a great plan nike might be the case i doubt it you probably are going to do something much bigger and better okay and when you when you have college for free i i can't i can't express this enough this is something you're gonna have to experience for yourself and feel it you will walk through the world lighter as you head into internships as you write papers as you work full-time jobs while you're going to school and you start getting into the marketing world if you have no debt you've got no she's not taking out that she's you got no cost that's right yeah and you're not burning through savings you're

going to be able to focus psychologically and just physically on this job in a way that I'm telling you, if you are worrying about finances, trying to figure out, watching your savings just dwindle down, I get being done with California. My understanding is you're going to have to get in line to leave the state right now. But I'm going to recommend take the free college. Take the free college and go for there. There's a traffic jam on the 405. Hey, my buddies in Texas, they're calling it the great eastern migration, man.

It's a gold rush in reverse. Yes. All right, Catherine, let's stop. Let me put a bow on this because I don't want to run out of time. So John, if you didn't know, I'll give you his background, came out of higher ed. He's got a PhD in higher education. So that's what you stumbled into was a guy who actually knows what he's talking about. That's the other guy, not me. And so his advice matters on this. And from my perspective, I've got a 27 year old. If you were mine, my daughter, this is what I would tell you. Stay there and work it for free until higher ed shakes out a little bit, number one.

Number two, use that time. You could finish up your last year at U of O because you spend this year while you're in school there free, talking them into giving you the last year free. Because they may need to draw some students that direction. You know, higher ed is just going to look different. They've been strutting around acting like they had everything you wanted, and so now they don't. They need you.

And now they need you. So the world has changed to your favor, and it's going to continue to for at least the next six months to a year. And so use that year to your advantage and go ahead and go free it doesn't mean you have to stay there free forever but and don't chase a nike dream chase a bigger dream this is the dave ramsey show Most people's money problems come from not paying attention. That's why before I spend a dime of my money on something, I do the research and make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called

Shady Rays. When you're looking for sunglasses, it feels like your options are limited. Name brand sunglasses cost too much and the cheap knockoffs are ugly and really don't protect your eyes. Discovering Shady Rays is a game changer. With Shady Rays, you can count on premium sunglasses that protect your eyes and are affordable. They give people the best overall value in sunglasses. They also replace your shades with a brand new pair if you lose or break them from day one of your purchase. And they guarantee your sunglasses for life. Plus, they offer an exclusive for Ramsey Show listeners.

Go to ShadyRays.com and use the code RAMSY for 50% off two or more pairs. That's ShadyRays.com, code RAMSY. Dr. John Deloney, my co-host today here on the Dave Ramsey Show. On the debt-free stage right here in the lobby at Ramsey Solutions, which could only mean one thing, they're debt-free. Kyle and Kelsey are with us. Hey guys, how are you? Good. Thanks for having us. Absolutely. Where do you guys live? We're in small-town Iowa, around Des Moines.

Oh, fun. Very cool. Welcome to Nashville. So how much debt have you paid off? We paid off around $60,000 in around 14 months. Good for you. And your range of income during that time? We're about $140,000 to $160,000. $140,000 to $160,000. Cool. What do y'all do for a living? I'm a police officer. I'm an HR generalist. Okay, great. Well, welcome. It's good to have you guys. Thank you. So what kind of debt was the $60,000? Most of it was student loans, a little bit of credit cards in there. But yeah, most of it was student loans.

And what inspired you to do this in 14 months, 14 months ago? Well, at the time, Kelsey had stopped working to stay at home with the kids and decided to go back to school. And funny enough, we started taking out loans because at the time we thought that was the only way we'd be able to handle the school. And at some point we look up and we've got all this debt. And I came across you on YouTube. I was familiar with you before, but I was getting into YouTube podcasts, things like that. And I came across your YouTube channel, and I started talking to Kelsey about that. And she was like, I've actually got his book in by my bed, which I didn't even know until that time. So, yeah, it was kind of funny.

I went in there, sure enough. It was right by her bed. Never saw it in there before. And I think I read almost the whole thing that night. Wow. And we both jumped on board, and, yeah, the rest is history. Okay. So the book was being used as a coaster, pretty much.

Not really. Keep the rings off the coffee table. I was trying to muster up the courage to talk to him about it, because we both like our hobbies, and we both like to spend money. Oh, so you thought you'd mess up everything if you told him about it. Well, I just had to be articulate about how I presented this. You know, because sometimes it's easier to present it like it's their idea and then to buy into their. Now, this is a knowledgeable wife. Every wife ever, right?

Yeah. That's good. Not sometimes. All the time. Yeah. That's a great way of presenting things. One thing worth mentioning about our debt is during the time we were paying off our debt, I was finishing my master's degree, he's finishing his bachelor's,

and we started cash flowing the remainder of our degrees during that time. So it could have been a lot worse than it was had we not started when we did. So you finished the cash flowing and you paid off the debt. So it's like a double dip. Well done. Yeah, very cool. So it had a big impact. Oh, for sure.

So what was it that, obviously, you had this this need this thing that's scratching at you right and so uh but what was it when you read this stuff that you said we're doing this well the funny thing about it is when you read the book i can like hear your voice like when you're talking um so i can hear that and it just it's common sense stuff i mean this stuff makes stuff makes sense. Um, I'm going to say Kelsey was a lot more naturally. I think we were both naturally what quote unquote good with money. Um, but she was a lot more natural to be debt free. I don't think she had any debt, any consumer debt when we got in a relationship. Um, I was a little bit more free spirited, um, not willing to say no. And I think that was probably one of the biggest things I learned from this is be willing to say no to stuff.

And when we did this as a couple, as a group, it just made things so much easier. There was really never any – once we came on board, we were both 100% in and bought into it. Once the book came off the nightstand, here we go. And the YouTube is activated. Well done. Proud of you guys.

So what's the secret to getting out of debt? I would say surrender to yourself while you're there. Nobody put that credit card in your hand. Nobody made you go back to school and start accruing all the student loan debt. And once you figure that out, you can define are you interested or committed. And we went in both feet. We were committed. Hey, hold on, Kelsey.

I think I misheard you. It sounded like you said you have to take personal responsibility for the way you're choosing to act and live. Is that what you said? Absolutely. Wow. Don't be the victim. You are blowing minds across the country today. People are going, what?

I can't blame someone else? Wait, what? I can't blame someone else? Wait, what? I can't blame someone else? Yeah. And the quicker you realize that, I mean, it was easy for us. You set that budget. You stick to it. You plan.

You succeed. And that's what we did. We did it in a short amount of time. I graduated with my master's in May. He's halfway through his master's right now. Wow. And we're debt-free. It's awesome. And your master's was in HR. Wow. And we're debt-free. It's awesome.

And your master's was in HR? Yes. And yours is in criminal justice? In public administration. Public administration. Okay. Very cool. Good for you guys.

What great careers you got ahead of you. Great education under your belt. And you learned to work together, and you hit some serious milestones in one of the toughest subjects on the planet. Yeah, and I'd say that the communication for me was important. It was funny that we wouldn't have went out and made like really big purchases without talking to each other before, but it would have been nothing for me to spend two, $300 on something and not talk to her. And when we started on this, I mean, I wouldn't have bought a soda without talking to her

about it. I mean, we just got that intentional about stuff. And I think the other, one of the things you talk about is having grace, you know, and I think that helps a lot is that we probably could have done this a little quicker than what we did it. Our original goal, I think we set a little bit more aggressively. But throughout the process, just being, being willing to do a couple of things, as long as it was budgeted.

I think that kind of helped us just having a little grace and just made the process easy. But like I said, it really wasn't hard for us, and we saw the progress almost immediately. In that first month, it was like, holy cow, this really works. Wow. Well, congratulations. Who were your biggest cheerleaders outside the two of you? Definitely our family.

I talked about this a lot. Um, pretty much anybody that listen, I've said your name to them. So, um, it's just, again, it was so, it meant so much to us and we see the progress in it. So we talked to a lot of people and everybody was cheerleaders. I would say there was some people that were like, yeah, you know, they'd make the excuses. They can't do it for this reason or that. Hope you can, but I don't, I don't think that's for me. Yeah. So you see some of that, but our family't think that's for me. Yeah, so you see some of that. But our family has been great the whole time. And, you know, when we weren't eating out, parents would take us out to eat

and let us enjoy some of that stuff that we weren't willing to do at the time. So, yeah, it's been great. That's cool. And you brought the kiddos with you. What are their names and ages? Let's get them in the shot. Faith is six and Abel is eight. All right. Very cool cool so are they uh

are they plugged into this whole process or were they uh spectators they have you know we bought we kind of got into the whole system so um we've done smart money smart kids we've read that book we've read a lot of the stuff and we've started the um letting them work for the money and give save and spend and um so they've got their own envelopes that they save up their money. I think they're naturally more savers than we are, so it's harder to get them to spend the money than it is to get them to save it. But, yeah, they've been a big part of the process. So they've been practicing their debt-free scream.

That's the other thing we need to know. Well, yes, and we said it's not a scream, it's a yell. Naturally, younger people have high-pitched voices. You don't want to hear their scream. It's a yell. Naturally, younger people have high-pitched voices. You don't want to hear it as a scream. Okay. I got four-year-old granddaughters. They can shatter glass. Yes.

Yes. The DBs are pterodactyl level. I love it. Way to go, you guys. We're so proud of y'all. Way to go, heroes. Thank you. Look at that family right there.

Everything changed because mom and dad stood up. So well done. It's incredible. So well done. Incredible. so well done it's incredible incredible very well done we got a copy of chris hogan's book for you everyday millionaires because for sure that's the next chapter in your story well done you guys very very proud of you all right kyle and kelsey able and faith from des moines iowa sixty thousand dollars paid off in 14 months, making $140,000 to $160,000. Count it down.

Let's hear a debt-free yell. All right, here we go. Three, two, one. We're debt-free! Woo! I love it! Well done, you guys. Very, very well done.

And they cash flowed their degrees while they're doing it. That's impressive. You don't drive by that one. No, the amount they paid off is deceptive because they paid off also on top of that, they paid off their school as they went, too, which is incredible. Yeah, there's a lot of stuff going on in that story mathematically. And can I mention this? They're both in high-stress jobs. She works in HR. She deals with systems and with people who are struggling and trying to figure out their next steps.

He's a police officer who's getting into public administration. Both of them bring calm and peace to messy situations and messy people situations. And the fact that they've taken this off, the debt off their shoulders, it's going to give them, they're going to sleep a little bit deeper, their stress is going to be a little bit lower, and they're going to be able to present themselves fully at home and at work. This thing is going to pay off systematically throughout their communities and organizations. Yeah, there are layers to the slavery.

Being debt-free changes everything. Borrowers slave to the lender, and there's layers to what that means. You're exactly right. This is The Dave Ramsey Show. Thanks for joining us, America. This is the Dave Ramsey Show. Dr. John Deloney, Ramsey personality, is my co-host today here on the air. Well, nearly every great success has a never-again moment in your past where you reach the point where you're sick and tired of being sick and tired, and you say, I've had it, never again.

When I filed for bankruptcy in 1988, I said, never again. Never again am I going to be in debt. Never again is American Express going to call my house. Never again is my family going to be on the edge of homelessness. Never again is my electricity going to be in debt. Never again is American Express going to call my house. Never again is my family going to be on the edge of homelessness. Never again is my electricity going to be cut off. Never again. COVID could have been your never again moment. The pandemic may have knocked the socks off of you financially.

There's a global economic crisis along with this pandemic. It's a one-two punch. So start taking control of your money. Let's get on a budget. Let's get out of debt. Let's have savings and get our life-changing books and tools for up to 73% off. What? You're giving your books away, Dave.

Yeah, what? So weekly deals right now at DaveRamsey.com and whether you want to get rid of debt or whether you want to get your kids started on the right path like the couple that we just did the debt free scream with um there's all kinds of back to budget deals out there and so uh just daveramsey.com we will walk with you while you have your never again moment we'll show you how. That book that, late on the nightstand that she was talking about, it's a deal right now.

It's a special. So check it all out. Up to 73% off on tons of our different products and best-selling books to help you get started so you're never susceptible to this again. Be the little pig that builds the brick house. So when the big bad wolf huffs and he puffs the house doesn't come down you said that important not if but when that wolf comes yeah the wolf will come yeah and because they do they do it's the nature of wolves right that's what wolves do nature of life yeah it's uh it's you know it's not you know you're not thinking positive no i am positive it's gonna rain you're gonna have a rainy day

i'm absolutely positive more than one so more than one it's gonna happen rain comes and that's how we know what sunshine looks like so alex is with us in san diego hey alex welcome to the dave ramsey show hey there how are you guys doing today thanks for having me sure man what's up so i want to thank you guys because i've been listening for the past six months or so and i've had a pretty good savings built up but uh had baby steps one and three and kind of backtracked after listening and building up the courage and this week we paid off $25,000 with the debt and that was it so attaboy Alex way to go man good job so you're debt free and do you have your emergency fund now we have an emergency fund we have about $130,000 in savings and about $30,000 invested good so still getting used to

transferring it out of uh out of a bank account. It kind of makes me feel good to open up the app and see that those figures, to be honest, I'm just that kind of person, but I'm, you know, building up the courage that way as well. Good. I guess my question is, they're just, you know, in my heart, I don't want to buy a home right now. We're not really settled down where we're at. We have family in different places, but financially, you know, we're saving a good chunk of money every month. And our family tells us buy a house, buy a house. And I know it's not a bad investment in a lot of ways, but from a lifestyle perspective,

I don't see it. So I know, you know, baby step kind of six is to, is to pay off your home early, but I don't even have a house. And I feel like, you know, where do I go from here from a financial perspective? Your family doesn't get a vote, Alex. Yeah. I interrupted you, Dave. No, you didn't interrupt me. I wasn't saying anything. You have entered into the territory of the weird.

You've entered into the ecosystem of people who make different types of life decisions and choices. And so part of that is, comes with people speaking all kinds of their various wackadoo truths to you. And usually they're speaking to you out of love. They care about you. But if you're not ready to buy a house, you're not ready to buy a house. If you don't think you're going to settle down in one of the most expensive real estate markets, this side of Mars, then hang on to your cash, right? Mars has a real estate market? That's the rumor. They're working on it.

So, Alex, here's the thing. Short term, that's fine. It is not a good 15-year, 25- or 30-year plan. And the reason is very simple. Rents go up continually until you own. And once you own, you fix the largest cost item in your in your line item budget is your rent your cost of housing you fix the cost of housing when you buy and of course you fix it low when you actually pay it off the second thing is and rents aren't going anywhere

but up i mean i'm old i've watched rents go way up my first apartment was 235 a month and you can't even get a steak sandwich for that you know so it's unbelievable uh so yeah you're going to see that and it's going to rob your wealth over time if you don't buy so that's where the idea of home ownership comes from because it works for you on stabilizing your today and causing wealth building in your long-term tomorrow. Out of the 10,000 millionaires that we studied, we found two primary areas that caused them to become worth a million dollars or more. Primary area number one was they continually invested in their retirement plans,

their Roth IRAs and their 401ks and good growth stock mutual funds. Primary area number two was they had a paid-for home. Now, does that mean you have to do this in the next four months or four years? No, it does not. But just say, what you're meaning as a short-term lifestyle decision, I'm not sure I'm going to stay here. I kind of want to play this. I'm enjoying the pile of cash right now.

That's cool because I'm probably not going to stay in San Diego. I may end up in wherever. That's all okay. No troubles with that. But the 10-year-from-you-now version of you needs to own a house. Is that okay? Yeah, that makes sense. Would you recommend me, if we still are kind of, you know, I'm 25 years old.

My wife is 21 right now. So, you know, perspective and life could change all of that. And, of course, if we had a family, we would be thinking of buying a house wherever we're at or picking a location. When you kind of, quote, settle down more, you're still in play right now. Yeah, exactly. If we get to that point, though, and we're still kind of a little bit mobile, would you recommend getting something, you know,

just as an investment at that point, five or ten years yeah down the down the line as a backup as long as you're going to stay in it two years or more you're probably going to make money in most most areas okay so yeah you know you're you're not it doesn't it's not like you can't sell a house unless you buy a weird house don't buy a weird house but i mean you see what i'm saying buy something that think about the resale appeal of the product that you're looking at when you're buying it. You know, and so if you buy a house that's ugly, when you get ready to sell it, it's an ugly house. So, you know, don't do that. Buy something that's got some appeal, right?

And then you can jump in and out of it fairly easily. But, you know, and in the meantime, go ahead and pile up your cash fund. You might even pay cash for your first house. You're 25 years old with $130,000 in the bank and no debt. That's a good way out of the garage right there. Pretty studly, man. You're the kind of guy that could end up paying cash for a little starter house somewhere, especially if you jumped out of San Diego.

San Diego starter house is a different world. But, I mean, if you jumped into a more traditional real estate market than a California real estate market, you might see the ability that you could pay cash for a $200,000 house, pretty nice starter house. And that makes it real easy to get into a fairly generic product that has a lot of market. When you get ready to resell it, it'll go up in value.

And again, you've stabilized your largest expense, and it's not going up. The rent's not going up. And somebody doesn't come in and go, you know, we're going to sell the house out from under you, and so you've got to move. You get control of, you know, this big section of your life, which is where you live. And there is an emotional value to that. There's a financial value to that. There's a relational value to that. And I underestimated that for a long time. I was always looking at it through this ROI, ROI, ROI. What's the money? What's the money? And I had a great friend, Todd, who told me, man, your wife needs a home. You need a home. Your kid needs a home. And so I'd love to hear you mention both of that, Dave. It's something about roots and security as well as a place to park and grow your wealth.

And that's a matter of a life philosophy, though. That doesn't say you have to run out today and do it. Absolutely not. But you just go, at some point, there is value to this that's intrinsic as well as financial. That's right. Yeah, very good. Good stuff, man. You're doing great.

I'm proud of you, Alex. I mean, you've done amazing. That's pretty stinking cool that you're in that place. You've done a great job with your money. So just keep being intentional with it. Pile up some cash. And then when you feel good about it, not your family, then it'll be time for you to buy based on this discussion.

That puts this hour of the Dave Ramsey Show in the books. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host, and we'll be back. This is James Childs, producer of the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money?

Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.