The Ramsey Show - App - What Should We Do With Our New $500,000 Income? (Hour 1)

Episode Date: November 27, 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. My co-host today on the Dave Ramsey Show, Ramsey personality Chris Hogan, author of two number one best-selling books, the latest being Every Day Millionaires. The phone number, 888-825-5225. That's 888-825-5225. David is with us to start off this hour in South Carolina.

Hi, Davidid how are you i'm doing good dave i have a question for you and chris that i've never heard you guys touch on before and wanted to get your thoughts on okay so me and my wife we are on baby step seven and we don't have any kids currently and we're looking to do foster to adopt. One of our heartbeats is to treat these kids like any normal kid. So how do we fund college not knowing whether we're going to get a kid when they're 6 or 16, just that wide range? What would you guys invest in? What are you guys' thoughts?

How should we plan for that? Very nice. Yeah, no, that is. You know, as I look at this, David, and you guys are starting to think and plan ahead you're right there is the unknown of the age and stage uh in which they may come to you uh but i want you to keep in mind you know you have many ways that you can start to save money you might look at just establishing a gross stock mutual fund that's outside of retirement for you to be able to save toward. Again, that might go toward college. It could go to a wedding or home down payment. It gives you options without it being in a person's name.

It can be in you and your wife's name. But you've got a lot of options as you sit down and you start to look at that. Yeah, you're in baby Step 7, and so you should have some money, and it just can stay in your name. You don't have to have a quote-unquote college fund in the kid's name. And in this situation, you know, you've got plenty of time. Even if it's a 16-year-old, you don't have a lot of time between now and the time they go to college, but you've got the money to take care of this.

You'd just merely be moving it into their name, right? Depends. If my wife decides to stay home, that'll cut our income significantly, so we may not be able to cash flow it like we'd want to. Right, and it won't matter whether you put it in his name or your name at that point. Mm-hmm. Yeah, so, you know, just pile up cash in your name it wealth in your name like chris is saying and then you've got the option to do whatever you want to do with it uh and you know as you

as as god sends you the appropriate child that you're supposed to take care of here which is awesome then um then you'll know exactly what you've got to do and lay your planning out. But you'll be fine. You've got plenty of room here in this. Good job. Oh, it is good. Tanner is in Idaho. Hi, Tanner.

How are you? Good. How are you guys? Better than we deserve. What's up? So, my wife and I are wanting to start saving up for a down payment on our house. Good. And I know that the Roth IRA has, I mean, first of all, a good rate of return,

a really good rate of return generally. And also, I believe that from what I understand, that you can take money out of a Roth IRA to, if you're buying, if you're using that money to buy your first home, you can take that money out of the Roth IRA with no penalty and no taxes. So I guess I just want to get your thoughts on that, what you would recommend and why. Start where the Roth IRA does not have a rate of return. What you invest the Roth IRA into has a rate of return. And what we recommend you put your Rothoth ira in is in good mutual funds so you could use good growth stock type mutual funds if you wanted to to save money for your house not sure i would recommend that unless you got five years or longer but if you're going to you could do that

and not mess up your roth your roth needs to be used for retirement not for house savings yeah tanner what kind of debt do you all have right now? Currently, we've got the only debt we have is a student loan that has about $1,000 left on it. We're going to pay it off here in the next couple of weeks. Good for you. Good job. How old are you guys? 26. What's your household income?

About $60,000 a year. Good for you. Well done. Well done. Yeah. Tanner, I would tell you this, buddy. Write that check. Pay off that $1,000 student loan debt. I want you to build up a fully funded emergency fund, three to six months of expenses.

And then start saving. And then baby step 3B is start saving for the house. I'm not going to tell you to liquidate. I really am not. Well, and I wouldn't use a Roth as a savings vehicle for a house. No, yeah, not at all. Answer your question. You can only use mutual funds.

That's okay. But that's taking a little risk with that money. It is. It's not a recommended thing. But I definitely would not. I don't mess with retirement funds. They're to be used for retirement. So I wouldn't cloud your Roth with that.

No, I really wouldn't either. And you guys only own $1,000 in the student loan debt. It's about to be gone. Get your three to six month in place. You guys save up cash for this home down payment. You can do this without touching the Roth. Mike's in Ohio. Hey, Mike, welcome to the Dave Ramsey Show.

Hey, Dave, how's it going? Better than I deserve. How can we help? First of all, thanks for having me on. It's a pleasure. Sure. I am midway through Baby Step 2. I got maybe like

$15,000 left. And I currently have three cars. One of them is a Jeep, which is our family car. We owe about $6,000 on that. The other is a Suisse, my truck. I have been for about another year.

And then I just bought a 2010 Toyota Sienna for $1,500, and it's worth about $7,000. And my question was, do I sell the Sienna and pay off the family Jeep? Or do I keep it for when my truck is gone describe the bank what's your household income about 60 okay and so you make seven grand right or six grand yeah after insurance and taxes and everything come out it it's more like $4 a month. No, I mean, I'm talking about the profit on the Sienna. Oh, yeah, yeah, yeah. I can make exactly enough to pay off my Jeep pretty much. And it's a really nice Sienna.

It's like a steal. I don't think I'll be able to find another $1,000 car. Hold on, Mike. Let me ask you a question. Who drives the Sienna? Well, I will drive the Sienna and my wife makes fun of me. But you drive the Sienna right now?

No, it's actually just sitting in my driveway. I just bought it. Well, why do you have it? He bought it to flip it. He bought it at a deal. Oh, okay. Bought it at a deal. I bought it at Flip It. Oh, okay. Bought it at a deal. A deal, yeah. Uh, 12 months from, what's the truck worth?

The, I have a 2019 Dodge Ram, so. So it's going to be turned in at the end of the lease. It's a lease, yeah. And then you've got to buy something else. I'm going to go ahead and flip it. You can find you another car deal any year. Pay off the Jeep? Yep, yep. Let's go ahead and accelerate this,

and then start saving towards a car for a year once you've gotten your emergency fund in place. That's the end of it out of there. Yeah, yeah. Make money. That's a good move. You did a good thing there. No, it is.

Good deal. Good job, Mike. This is the Dave Ramsey Show. Life sure has a lot of twists and turns. Unlike a roller coaster, we never know what's around the bend. The same can be true with unanticipated medical bills. That's why Christian Healthcare Ministries, or CHM, is a great option for those who are faith-focused and budget-conscious.

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That's chministries.org slash budget. Chris Hogan, Ramsey Personality, is my co-host today here on the Dave Ramsey Show. You jump in, we'll talk about your life and your money. Randy is with us in Hanover, Massachusetts. Hi, Randy, how are you? Doing great. How about yourself? Better than I deserve. What's up? So, just have a question. My wife and I just recently got into a business, a strong business, and we're making more money

than we've ever imagined in our life. Wow, good for you. What are you making? No, it's a true blessing, and we're super grateful, and know just God has continued to bless our family. How much are you making? Coming from, excuse me? How much are you making? Coming from, excuse me? How much are you making?

Let's, probably this year we'll probably do more than 500. Wow, good for you, man. Congratulations. Thank you, thank you, thank you. But again, we come from uh i did military for a long time so we had that and then so come from very humble um beginnings and so now that we're making this income we follow a budget but we give ourselves a very um i can't think of the word but we just give ourselves very modest budget, and we feel bad spending money.

And at this point, we're just like, we put all this money to the side, and we're like, we're giving, we're putting in for retirement, we're doing those type of things, saving up for our kids' college fund. What else should we be looking to do with this? Very good job. Well done. Well done. Well, Randy, Chris and I have worked with professional athletes and artists and so forth over the years and other just uber-successful people with huge incomes.

And many of them struggle with this because most people didn't start out with this. And, by the way, thank you for your service to the country. And I'm glad that you have become uber-successful with your income. And so what we teach people to do is come up with a basic budget, not a modest budget, but a basic budget. Like we were with a football player a while back. Chris and I were sitting there, and we just got a yellow pad. We just did it right quick.

And he's like, you know, he's kind of a tightwad guy. He didn't want to spend any money, but he's making serious bank. And we said said all right what is a good budget and he said oh fifty thousand dollars a year and i went no dude you're making millions shut up okay fifty thousand dollars a year stupid you need to have a better budget than a budget where you can have a decent enjoyable life without and you can do the funding of the retirement funding of the kids college you can you can repurchase a car every so often. What's the budget?

I think we ended up with him. We finally got him up to $120,000. $10,000 a month. Pulled some teeth, but we got him there. But he was like making $800,000 or $900,000 a year. Right. Right? Right.

Same as your situation. So we set a basic budget. And this is what Sharon and I do, by the way, as well, because we've got a good income. And so we set a basic budget like that, and then we run our household on that. Then everything above that, we apply a percentage formula to it. We're Christians, so we put 10% tithe. The government takes 40%, so that's half of it. The other 50% we spread across three things.

Lifestyle increase, in other words, fund money. Extra generosity, outrageous generosity. And extra investing. So you got 40% for taxes above your budget. You're going to give away 10%. That leaves you 50%. So divide that 50% up and spend something on extra fun. So here's an example. If you put 10% on extra lifestyle, that would give you your regular household budget

and 50 grand to blow on cars, trips, or whatever. Okay? And then that leaves you still 40% to invest and to split up among outrageous generosity. So every time I get a check from a publisher, I got one today. Total money makeover check came in today, and that's always a good day. And that check came in today. So, you know, what I'll do is it's real simple. I just apply that formula to it.

10% tithe, 40% for taxes. It has to be set over before I even think about it. And then I'm going to put my percentage on investing, my percentage on increased generosity, and a percentage on increased lifestyle. And what you'll be amazed is that you actually get to enjoy the money on the increased lifestyle. The giving, you'll be thinking about it more because it's allocated. It's already kind of like doing a budget. It's already spent. And so when we do that, it frees people allocated. It's already kind of like doing a budget. It's already spent. And so when we do that, it frees people up.

It really does. And Randy, it'll free you up too, my friend. And I think you and your wife sitting down and making that list of goals of the things you're looking to do or maybe the trips you're looking to go on, what it'll do is it'll help you kind of get out of your head and get on the paper and say, hey, this is what we're excited about. Or the room in the home that you're going to renovate, or whatever it is. It makes it more practical, and it makes it more exciting. Yeah, I got a buddy of mine that's building habitat houses out of his outrageous generosity,

and so every time he gets a big old check, he gets more excited because that's that many more habitat houses he can do. And see, that formula I just used will work with $5 million a year, it'll work with $500,000 a year. Right. I love $500,000 a year. Right. I love it. Thank you so much. I appreciate that. And we were just talking about last night dreaming in HD

during the talk recently. Yeah, buddy. Trying to set up that date where we can dream in HD and really put the picture... And what you're doing now is a different level of dreaming. Yeah. Okay, this is now legacy dreaming. Some people are dreaming about when they're out of debt that they finally get to go on a vacation.

Okay, you're way beyond that. We're talking about completely changing your family tree, massive amounts of money into a couple of ministries to completely reshape your community with your generosity. I mean, you talk about a guy who starts building multiple habitat houses. This is a guy that's fired up, okay? Or you start buying tractor-trailer loads of bicycles to give away in an inner-city area

where people are struggling with a ministry there. And it's not two bikes. You're starting to do stuff with scale because you've got the capacity to be outrageously generous, outrageously change your legacy, and it works beautifully. Hang on, I'm going to send you a copy of the last book I did, which was Legacy Journey,

which is all about living in that level of thinking, and it's a different place to get. Your brain works differently. It really is, and for those of you out there, you're hearing him say, dream in an HD. I talked about that in my first book, Retire Inspired, Dreaming in High Definition. Like, you can see the details in a high-definition TV. I want you to see those kind of definitions in your dream. But we can't just dream. We've got to plan.

So go over to my website, ChrisHogan360.com, and I'll talk to you about having that dream meeting. But I'll also show you the RIQ, which is the Retire Inspired Quotient,, free tool to help you identify how much you're going to need to live those dreams. Yeah, it's important. And I think what I'm pointing out there is, Chris, you know, what happens is as you reach different levels of wealth, the first one is just to get debt free so you can breathe, right? I'm debt free. You do your scream, right? Then you've got your emergency fund. Your dreams start to change.

Yes. Because for so long we lived just hand-to-mouth in survival. Yep. And your dream was Friday. Yes. You know? Yeah. And then your dream starts to be Christmas.

And then your dream starts to be, you know, I'm paid cash for the kids' college. And then your dream starts to be, you know, and then your dream starts to be. They grow. And they should move at different levels because otherwise, you know, you don't have anything to reach for and you get bored. That's exactly right. And then you lose that motivation. Hey, we were talking about the bicycles. Remember the entree leadership thing we did down in Florida where we put together bikes?

Yeah, I'd forgotten that. And we brought these kids in and the little boy that I had had never ridden a bike. And so the bike that I worked on, thank God there were other people there to make sure the bikes stayed together. But I got a chance to kind of help him with that bike and kind of riding around. And I'll never forget that. That was a moment that I know those kids will never forget, but also those leaders there being a part of that. They'll never forget that. That's very cool.

It really was. That kid was scared to death. He had to learn to ride a bike just because he wanted you to let go of the seat. He was not going to fall. Let me go. I was strong. The people were strong. He said, I'm scared to death.

That was a lot of fun. It was. We did a team building thing. We brought a bunch of bikes in, and everybody had to jump in random teams in this leadership thing. And everybody had to put the bikes together. I've forgotten. That's like five, six years ago. It really was.

And then we had the kids lined up to come in and get the bikes. Man. And that was just a little small. It really wasn't any scale to that, but it was a good leadership activity. And then you put the icing on the cake with a generosity piece. That's right. That's exactly right. Yeah. That's right. That's exactly right. That's fun. Good stuff.

This is the Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions on the Dead Free Stage, Stephanie is with us. Hi, Stephanie. How are you? Good. How are you? Well, better than I deserve. Welcome. Thank you for having me.

I'm honored to have you. And where do you live? I'm from a suburb of Chicago in Indiana. Oh, very cool. And all the way to Nashville to do a debt-free screen. Yeah, of course. How much have you paid off? $64,071.

Good for you. How long did this take? 38 months. You kicked it. Way to go, girl. And your range of income during that time? I started out making $34,000 and ended with $44,000. And then I made like around $10,000 of side jobs on the side.

You were focused. Yeah. I lived on nothing. I mean nothing. Seriously. Because you paid off $20,000 a year for three years. Yeah. Average.

And you're not making but $34,000 or $44,000. Mm-hmm. Wow. I mean, beans and rice. Yeah. Way to go. What kind of debt was this? $3,000 was a car and the rest was student loans.

Okay. So what's your degree in? Art education. Good. I'm an art teacher. Good for you. So that's what you do for a living. You what's your degree in? Art education. Good. I'm an art teacher. Good for you. So that's what you do for a living. You're an art teacher.

Good for you. Way to go. So you got out of school and just decided to attack this. Tell us your story. What happened? I actually graduated in 2012, so I'd been out of school for a while, but it wasn't like a certain event that caused me to start, but more like a mentality of being tired of having this weight of debt and wanting to do all of these things, but not being able to do them because I was

feeling the weight of my debt and not feeling that peace. So I knew about you from other people that I heard from and also any church that I'd gone to had financial peace. But I started listening to your podcast every day when I was prepping at school in the morning. And I heard debt-free screams that were very similar like me. And I was like, well, if they can do it and they have a similar income than me, then I can, of course, do this. So, and then I got started. And once I first started paying off debt, then I was like, I totally believed that I could do it, and I just would do anything that I needed to do to pay off debt. Wow. Very cool. You were very focused. Yeah.

I mean, what were some of the things that you sacrificed that were difficult for you um so i because i was a teacher i didn't get paid overtime to do anything but um i would babysit every before school after school on holidays like on breaks um i lived had like low income living condition or like um the lowest i could um pay by also babysitting for the person that i lived with and um just renting out a room instead of having my own apartment. Right. So sacrificing any time that I had in doing all of those things, but just working as much as I could and putting it all towards that. Let me ask you, was it worth it?

Oh, of course, yes. You've got this grin on your face from all just, you know, from all the hard work, because sometimes it gets hard, right? And the mountains get tall. You've got a long three years. You really did, young lady. I'm proud of you. Thank you.

Very impressive. Yes. Very impressive. Wow. Good job. Okay, so you're the hero. You did it. You paid off $64,000 in 38 months, making $34,000 to $44,000.

When people say, how did you do that? What do you say the key to getting out of debt is? You can do it too, so what do you got to do? Yeah, I think the first thing is believing and having that mindset to just know that, okay, you can do this. And then also, like you said, the sacrifices, knowing that it's a short-term sacrifice and that it's not going to be forever, knowing that I was only doing that for a short amount of time was really motivating for me. And also because I'm so visual, I was able to fill in charts and be able to see those visuals for me. And every time I was able to do that, that was really motivating.

So I'd always crunch the numbers and see how much more I could pay towards debt and how much I could just fill in. So yeah, I would say having a short sacrifice mindset. Stephanie, how long ago did you hear the debt-free screams on Dave's show and you said, I want that to be me? How many years ago was that? Well, the whole time. I was listening the whole time. I would just hear the debt-free screams. And, of course, when there was someone that was very similar to my income, I would kind of even get teared up sometimes because I would know that that could be me in the future. Hey, guess what? It is you. Yes.

Because you're here. Not only did you dream it, you dared to chase it down. It is you. And you're going to motivate all kinds of other young people out there. I'm proud of you, young lady. Thank you. I really am. That's amazing.

Pretty stinking incredible. Absolutely amazing. Well done. Well done. So who were your biggest cheerleaders? I had family friends that were like family to me back home. And anyone in my small group at church. Anyone that I came across was really supportive.

Okay. So who came with you on this trip? It was my roommate in college and her family. They're like a second family to me, and we came down to Nashville to celebrate. That's fantastic. Very good. Well, good cheerleaders. I noticed you had a cheering section over here, so I want to figure out who that was. Good.

Way to go. I'm proud of you. We got a copy of Chris's book for you, Everyday Millionaires. That is the next chapter in your story. You are on your way. You're free. You did it.

I'm so proud of you. You're a hero. Well done. Stephanie in Chicago, $64,000 paid off in 38 months. Count it down. Let's hear a debt-free scream! 3, 2, 1.

I'm debt-free! Yeah! That's how it's done. Yes. The interesting thing is that it doesn't matter what your income,

your age, your sex, your color, the number of kids you have, we've had someone like you do a Dad Free School. Yeah. Because we've been doing them for decades, and they're all different, and they're all special, because that's her story. That's right. But there is someone, like she said, she'd find the ones that were like her, making $34,000 a year, and it made her tear up, because she said, I can do this. Yep.

You've got to find stories in your life that go, there's a guy guy like me there's a gal like me that went and did what it took and they won yeah and they came from the neighborhood like i came from or they i relate to them in this way or and they still went and they did it and that what that does it takes away your stinking excuses it sure does dave and i'm going to tell you something we you, and during this largest study of millionaires we've ever done, it busts down a lot of those myths. And, you know, as my coach said, don't make excuses, son, make plays. And we've got to get rid of that victim mentality and grab a victor mentality and understand if we can believe. And Stephanie hit on that. We've got to believe we can. Because we found that while the millionaires came from every possible background,

96% of them, when we surveyed them, said, that was all of them, by the way, said that belief in the fact that you can do, that you can become wealthy, is essential. And when we interviewed non-millionaires and asked the same question only 62 said that big drop off yeah so while belief is not magical and it doesn't it doesn't keep you from having to do the hard work right it doesn't it's not a magic potion um you know it it pretty much ensures you're not going to get there if you don't have it. If you don't believe it. That's right.

It's a contributing factor. It really is. But you've got to put in the work. Yeah. And, you know. If your belief causes you to take action, now we've got the magic. There you go. There you go.

And I said that. I talk about it in the book. You've got to believe. You've got to grow in your knowledge. And you've got to take the right actions. That's the key. That is the key key it's absolutely how it's done and so that's why this um book and white paper that goes with it you got the white paper yeah i do i do it's not a white paper and we're not it's got like a cover with your face on it well dave it's a quick read it's not a quick read it's a nerd book it's all the statistics from the stinking study.

It is. If you have trouble sleeping. It's written NyQuil. Yes. If you want to. NyQuil between two covers. The National Study of Millionaires. That's right.

If you have trouble sleeping, If you want the research paper, baby. It'll be like this. They're nerding out. Yeah. Normal people will be like. They're gone. Better. It's there. It's there for youding out. Yeah. Normal people would be like. They're gone. Better.

It's there. It's there for you if you want it. You can grab it. No alcohol required. Oh, my gosh. Yeah. It's only, what, nine bucks or something, right? Yeah.

Yeah. It's under $10. $10. Quick read. Yeah. A lot of stats. Quick read. Lots.

It's not a quick read. It's short. That's. It's what we call quick reads because it's short. It is short. But there's a lot. There really is. This is the Dave Ramsey Show. Oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, Chris Hogan, Ramsey personality and number one best-selling author, is my co-host today here on the air.

Nick is in Anchorage, Alaska. Hi, Nick. Welcome to the Dave Ramsey Show. Hi, how are you? Better than I deserve. How can we help? My wife and I have about $41,000 left to pay on our house, and we're wondering if it would be a good idea to cash out our deferred comp to help pay that off faster. Man, I would really want to, but I'd hate to pay all those taxes. Yeah, let's keep going back and forth. We're just getting impatient, probably.

Yeah. See, the way I look at it is you're probably going to pay out 25%, 30% tax on that and it's kind of like borrowing money at 25 or 30 percent interest to pay off your mortgage yeah and i just i wouldn't do that so we tell people not to cash out retirement uh unless it's to avoid a bankruptcy or foreclosure and that's certainly not your case you're almost done with your mortgage way to go. Nick, how much was this home when you all bought it? We paid $215, but it's probably worth at least $250. You all have been intentional. My goodness.

How much are you paying each month toward this thing? Our payment's about $1,650. Okay. But you're adding extra, too. Yeah, yeah. We've been chunking away at it. We try to do at least $2,000 a month extra. That's really good. You're going to be done. you're adding extra too yeah yeah we've been chunking away at it and it's a chance we try to do at least 2 000 a month extra that's really good for money you're gonna be done yeah yeah how old are you all nick i'm 38 and my wife is 35 yeah yeah way to go yeah you're gonna be done in a year

they're like unicorns in anchorage dave unicorns uh because that's awesome and nick i understand the mindset around it and the irritation, but you want to be smart. Remember, you're playing offense as well as defense. And so let your money keep growing, but you guys keep throwing money at this thing. I think you'll have this thing out of your life faster than you believe. Well, I mean, when you start putting $2,000 to $1,600, that's $3,600 on $41,000. Do the math. You're done in a year.

Yep. I mean, you're probably done in 11 months, actually. But somewhere right there. Yeah, yeah. And, you know, when you get close to the finish line, the other thing that happens is they're just going to start just going, ah! Right. Oh, yeah. Sprinting.

Knock it out. So you're probably done in 10 months. But, okay. Well done, sir. Proud of you. Janae is in Dallas. Hi, Janae. How are you?

Hello. I'm doing well. Thank you guys for having me. Sure. How can we help? Me and my husband are on a disagreement on when to buy a house. We are completely debt-free. Thanks to your principles, in 2013, we paid off $49,000.

Way to go. Well, Chris and I are here to tell you who's wrong. Yes. And Janae... I feel like it's going to be me. Hold on, Janae. You have to agree to go with what Dave and I decide. Do you agree?

No. That's so rude. I think you've been set up, Janae. That's rude. I think you've been set up. Tell us. I was terrified to hear that Chris was the co-host. I'm like, this is not me.

Uh-oh. All right. Tell us the scenario. I'm like, this is coming at me. Uh-oh. Uh-oh. All right. Tell us the scenario. I'm ready now. Oh, okay. So we are currently renting in North Dallas, so housing is expensive. Mm-hmm.

But my husband would like to save up and buy a smaller house in probably one to two years. Mm-hmm. Or buy that house and then five to ten years down the road upgrade our house. I would like to wait, put more down on the house, buy the same priced house in seven to ten years. Okay. And in both cases, you're debt-free and have the emergency fund in place before you buy the house, right? Correct. Okay.

All right. Darn, this is not as good as I thought it was going to be. No, it's not. Because this is just like, because you're both right. Yeah. You can do either one. Either one's fine. It becomes a matter of preference then.

So, this is the one item on this show that I give advice or quote, allow people to do that is inconsistent with the way I live, because I do not borrow money for anything ever in any circumstance, no matter what the building we're sitting in with $70 million, we paid cash for it. We're not going to build it. Newspaper headline was Ramsey builds at the speed of cash, you know, because we don't build unless we have the money. So, you know, so my answer would be at Dave Ramsey's house would be different than we would allow you to do. Now, where you're buying a home on a 15 year fixed with a good, strong down payment and the payments no more than a fourth of your take home pay. You're out of debt and you have your emergency fund.

You're in the zone of buy a house. Now, do you want to wait a little longer? Buy a different house? Do you want to put more down? You're out of debt and you have your emergency fund. You're in the zone of buy a house. Now, do you want to wait a little longer, buy a different house? Do you want to put more down? Do you want to do a 100% down plan in five years rather than a 20% down in 18 months? Those are all things you two can decide, but neither one of you are in the stupid zone. Yeah. I got to keep my flag.

Yeah, I got to keep my flag. Whatever you gotta keep whatever you tell me we're gonna do it oh whatever janae oh my goodness janae i do want to know why are you willing to wait longer before getting the house um because the rental house that we're in provides us a lot more space than a house that we'd be able to purchase. Oh, okay. She'd be moving down in space. Okay. Correct. And so that gives you the ability emotionally to have the patience. Correct.

Yeah. How many kids you got? We have two and are starting an adoption process, but would like four. How old are you two? Right now, three and one. No, how old are you guys, mom and dad i am 31 and 33 and uh what's your household income my husband is the sole worker and he makes about 85 okay so you could you know what what you probably will do is somewhere between your idea and his idea

just kind of hit the middle because it's still in the smart zone. Neither one of those are going to be done. You're going to put it on a short term. You're still going to pull off the exact same goals because what you've not used in this calculation, unless you're highly unusual, is increases in income that will occur during the five- to seven-year period. You didn't consider those, did you?

No. Yeah, so you linearly took your existing income out and used it as your only projection method. So you're a little low. And so I think you could probably do your plan in five years. And you probably do his plan and your plan in four years or five years, something like that. Okay. And so I'm going to land in the three to five range as really just coming together between the two of you. Because you're both within the range of smart.

You're both. This is not a thing where you're being silly. You're being immature. Because I thought when you called, you know, you were just going to be, I want a house. Right now. I want a house. We have $64,000 in credit card debt and two lease cars. And I want a house because rent's expensive in North Dallas.

I was ready, Dave. I was ready to pounce. You were ready. I was. You were growling. Look at her. Yeah, you were growling. You're mean.

I didn't get to pounce. You're intimidating. Oh, stop it. Because, well, I mean, she wasn't that caller. No, she wasn't. And, Janae, do me a favor. Talk to your husband. Hear his heart.

Make sure he hears yours. And you guys decide for you this is not something you need to be at odds this is about something gain agreement like how we're going to do this and you may find ways to bring in extra money he may find ways and you guys can surprise yourselves but be aligned and be rowing in the same direction you know what here's a thing to enter into this conversation too i was thinking because that really smart, listen to the heart part of this, because sometimes when Sharon and I are talking about this and we're having this argument about what to do, when to do it, and all that kind of a thing, it's oftentimes not what to do,

it's just when. And what comes first, what comes second, and that kind of thing. And so I'll just go, okay, on a scale of one to ten, is this a ten for you, like really a big deal, or a one and for her the space is a big deal especially with two added kids okay and not being in a cracker box and jammed in there with three little kids four little kids i'll drive you nuts and so uh that's a that's a ten for her right and he hears that then he goes okay i get that that's the big deal. So now we've got to modify the plan that allows us to move into something that has some space. Right.

And that might be her time frame to get her space. Right. Instead of, because he's not the one at home with four littles. That's right. But in his mind, he's wanting to attack something and get out, stop renting. Yeah, he's tactical. He's ready to start owning. It's all tactical.

You guys got the perfect blend, Jene. Yeah, this is great. I like this. And you guys will do what's in the best interest of the family. Yeah, anywhere from three to five year plan is probably going to be where you guys land. It's going to be smart and you're going to do well. And Jene, don't lie to your husband and say we voted for you. Go back and play this for him so he can hear it.

Listen to the show. I bet he does because I think he sent her in here. Oh my God. You shouldn't be having this much fun and be getting paid too, Hogan. You're going to cut your pay. Don't you dare.

That puts this hour of the Dave RamZ Show in the books. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.