The Ramsey Show - App - Why Should I Pay Off My Car? (Hour 1)

Episode Date: April 17, 2023

Dr. John Delony & George Kamel answer your questions and discuss: "Should I use my emergency fund to pay off the house?" "Why should I pay off my vehicles?" from the blog: Should I Pay Off My Car Early? "We bought a house we can't afford", "Should I rent my house out to college students?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where we help people build wealth, do work they love, and create incredible relationships. I'm John Deloney, joined here by my good friend George Campbell, and we are taking your calls on money and life and relationships and work. Whatever you've got going on in your life, I am confident we have an opinion on it. Advice and opinions are two very different things.

Correct. I will not give you advice, so I'll give you my opinion. Give us a buzz at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Good grief, man. The lobby's packed out there. I think these are leftovers from our Smart Conference event that we just had over the weekend. I don't think they're leftovers.

I didn't mean it in a bad way. I mean, they don't want to go back to Coeur d'Alene or wherever they came from. They're like, Nashville's where it's at. Let's hang out here. But we did have a great event Friday and Saturday, John, with over 2,000 of our newest friends. Yes, it was fantastic,

and it's good to see everybody still hanging out with us. Thank you all so, so much. All right, let's go out to Dane in Sacramento. What's up, Dane? Hi, George and John, can you hear me? We got you, man. What's up? Great.

Hi. I appreciate everything you guys do for us. Question is, I've been working the baby steps for a number of years, particularly baby steps six. I've been paying on my house, trying to pay it off for about seven years. I'm at a point where I have about $29,000 left on my mortgage, and I have basically emergency fund and some just cash around thirty five thousand dollars and so I can you know smell the finish line I'm kind of like well should I use you know pay off my mortgage and have a have a lower emergency fund for a while to build it back up to get out of debt or should I just kind of keep uh keep doing what I've been

doing way to go dude yeah Yeah, what does lower mean? Well, I mean, I think it's just, you know, I would, $35,000 is basically my emergency fund, so it would be down to $6,000. Yeah, that frightens me. You're so close. I know, but I can feel it for him. I can feel it. How many months is this emergency fund currently of expenses?

Oh, it's probably, I mean, it's between three and six. Okay. Probably, I'd say four. How much do you make a month? I gross about $9,500. A month? Yes. So either way, we're talking two months from now, this thing's gone.

Three months from now. How close would you be? Yeah. If you just followed the same pace you were going without touching the emergency fund, how many more months until it's paid off with just extra payments from your paychecks? Yeah, I mean, I was thinking kind of end of the year would be my, you know, the definite, right? Okay. My personal preference is that you keep minimum three months of expenses.

Anything beyond that, you throw at the house, I'm good with. Okay. And I would probably, if I'm in, I can just feel it, man, for you. And so I'm trying to figure out a way to accelerate this. Maybe you look at three months and you also at the same time, you say, I'm going to leave three months in the account, but I'm going to go bare bones those three months. We're not going to go out.

We're going to go back to baby step one just for 90 days. And we're going to pay this sucker off right now. If you think you could do that, some people pay their house off and they just kind of have a freebie month they just kind of go bananas and then others um just walk around in a daze for a few months because they can't believe how good it all feels and so i i'm with i'm i'm i don't know george i'm kind of splitting the difference with you well you're a you're a risk taker john you're like i'll just do it i just hate waiting i hate wait but he's waited

seven years with such diligence and patience. And the last thing I want is for him to do this like Hail Mary. And then the HVAC goes out. And he doesn't even have enough in the emergency fund to cover it. That's the part that my brain goes to. Funruiner.org.net, man. Here's the other thing, though. Your expenses will get lower without a house payment by the principal and the interest.

You'll still have taxes and insurance. So factor that into the emergency fund. And that will give you kind of a new number for that three months. And once you have that amount over the limit, you can pay it off. Write that check. All right. I'm in George. Sorry, John. Doing your facts. All right. Let's go out to Amanda in Kansas City. What's up, Amanda? Hello. How are you? I literally couldn't be better. How are you? Doing well. Excellent. What's up? So my question today, so technically we're in baby step two. I started listening to you guys last fall and I'm kind of backtracking. So we've been kind of doing like all the steps at once. And at this point, I have one big expense that needs to be paid off. It's my vehicle. And I'm having a hard time justifying

doing it. Wait, you're trying to do all the steps at once? Well, yeah, I've kind of like backtracked now and I'm trying to do baby step too. What do they call it when you hit all of the steps? I feel like going up the stairs and you hit them all at once. What does that mean you've done? You face planted. You ate it. Don't do them all at once. That's falling down.

All right, George, save this for me. So you're saying why pay off the car? Yeah. Well, what's your car payment? Well, it's like $560 a month, but I've been paying more on it. Why would you not pay it off? So the question is, if I was able to hand you $560 a month for the rest of your life, wouldn't you rather take that than pay it to a lender with interest?

But I could use it for other things while I'm using that money. That logic makes no sense. Right now, you're in the whole 560. I'm up 560. Who has more options, me or you? So, okay, so here's my thoughts on this. So, it's a pretty low interest rate, which

I know that's like, it's not supposed to matter. It's just nobody cares. It's just less stupid versus more stupid. Okay. Keep telling us about Amanda's plan. Keep going. If I, if I pay it off, then I'm going to feel like I'm constantly car shopping. I'm like always looking at cars. This feels like you have a nice car. What car is this? Um, it's a, it's a Telluride. Oh, that's a sick whip. What car is this? It's a Telluride. Oh, that's a sick whip. What are those things, 60 grand?

I got a better deal on it than that. What do you make a year? Between my husband and I, we're at 230 a year. You're crushing it. Why do you need a car payment? I heard what she was saying. You're charging yourself $560 because you can't close an internet browser. Okay. Fair enough.

You have to deal with the fact that you think that your joy and happiness are somewhere other than where you are sitting. You're just chasing happiness. that your joy and happiness are somewhere other than where you are sitting. And the moment... You're just chasing happiness. You're chasing it. It's elusive. You will never catch it. My other part of this is I feel like... So we've got funds, like...

I've got funds and rental accounts, stuff like that, that I don't really want to touch. But I have an emergency fund, you know, like our three to six months. I have that. I could deplete that and pay this off. That's exactly what you should do, and there's a 99.9% chance you will not do it. We can't help people who don't want the help, and it sounds like Amanda's plan is better than a proven plan that's helped millions of people become wealthy.

You like spending $500 to $600 a month to have your account numbers look nice over here and your internet browser down over here. You gotta grow up and be an adult. You gotta grow up and be an adult. Y'all make too much money to be this broke. Pay off your stupid car for crying out loud and then get on with your life

and make real money. You gotta tell your money where to go instead of tell you ride, Amanda.anda geez this is the ramsey show hey you guys health insurance costs are only moving one way and that way isn't down and if higher costs aren't enough the wait times to see your doctor are longer and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries.

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So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. This is the Ramsey Show, 888-825-5255. I'm John Deloney, joined here by George Campbell. We're taking calls on money and work and life and relationships, whatever you got going on. We are here for it. Let's see here. Hey, George, you got an ad mention.

Go ahead. I do. And I just mentioned we had an incredible smart conference event this weekend at our brand new ramsey event center and it was so awesome that we're going to do it again but this time we are heading to chicago for a smart conference weekend so if you're a new listener or you haven't been to one of our live events smart conference is our biggest event it's every single one of our personalities just crushing it in their lanes, doing their thing. John got a standing O. I don't think there was a dry eye in the room, John. Well, I paid them. That makes more sense. You pay 2,000

people a dollar each to do a standing O. Hey, some of us have it, George. Some of us have it. Well, if you want to join thousands of other people just like you who are following the baby steps, whether you're just getting started or you've been doing it a while or you need some encouragement, Smart Conference is the place to be. We've had tons of people tell us how motivated they are, how this is exactly what they needed to get back on the plan, or how they finally got their spouse on board. So if you want to leave with a plan to improve every area of your life, your money, your mental health, your career, your relationships, join us all on September 15th and 16th in Chicago. It's going to be Dave Ramsey, Rachel Cruz, Dr. John Deloney, Ken Coleman,

Jade Warshaw, and myself for this two-day event of a lifetime. Plus, you're going to have a chance to meet us. We love going out there during the breaks and signing stuff and taking photos. Maybe we'll even do another Smart Money Happy Hour live recording, which was a big hit. Was it? And the fun doesn't stop there. A lot of surprises. Maybe John Deloney up there ripping a solo on a guitar. We don't know. I'm going to bring the bagpipes this time.

We're going to rock. That's worth the ticket price alone. And this event always sells out, and it starts at just $79, which is insane for a two-day event like this. So go to RamseySolutions.com slash events. Get your tickets today. And even if you're not in Chicago,

we've had people travel from all over the country to be here. So make plans September 15th, 16th in Chicago, ramsaysolutions.com slash events. All right, let's go out to Haley in Providence, Rhode Island. What's up, Haley? Hi, can you hear me? With crystal clarity. What's up? Okay, thank you for taking my call. I'm really grateful for both of your work. Okay, my question is, should we remain in a house that our budget would be like razor thin for the next 12 to 15 years?

So here's my question. You absolutely 100% know the answer to that. So what is the thing going on inside your soul that makes coming to that realization to a, we would want to downsize the size and the scale of our home, but it doesn't seem like the numbers are making sense. So what's your take-home pay? Okay. So our take-home pay is about 110. My husband has a handyman business on the side. So there's sometimes we can make more. Okay. And what's your mortgage?

Okay. So the mortgage is $2,500. Right now, $1,000 of it is covered by my mom. I've been her caretaker. We built her an in-law, and she's declining. She needs a facility care, and we don't feel comfortable without her rent covering the size, the utilities, the upkeep of the house.

Well, based on what you told me, your mortgage is about 27% of your take-home pay. Yeah. The numbers here don't scream fire to me so where is the actual problem do you guys have other piles of debt hanging around we uh we just have my car which we're working on paying off but um i guess where i'm at is that the amount of like replacing the deck replacing the deck, replacing the windows. That number for us takes away from time with our family to cover it. I feel like we're too thin. Well, those are one-time repairs that we can do over a period of time.

That's not a monthly expense. So if we just set a small sinking fund, let's say $400 a month, that's about $5, grand a year goes towards home repairs. Would that solve this problem? I just feel like there's other pieces here because you guys make 10 grand a month. Yeah, there's something, your mortgage is 2,500. Where is the other 7,500 going? Do you just want to not live in this house anymore? Well, the house is hard on us. Yeah, and maybe it's not

exactly 10 grand a month. Those are good weeks with handyman stuff. Those are when all the stars align. Hold on, hold on. Listen, listen, listen, listen. Sure. You don't need any permission

to move. Okay. But how do we know where we're gonna go go rent a house go rent a house what's the fears underneath all of this what's wrong with you going to rent somewhere for a year um so if we were to rent it would be about the same price point that we're paying now but you said the big issue was that you don't want to do all the repairs and you're paying for all these things and it's stressing you guys out. You're describing to us a pot of boiling water and you're in it

and we're telling you to jump out and you're like, yeah, but it's hot over there and it's cold over there. And so you're painting this picture that you can't win. And I just don't buy it there's got to be another solution it's not going to be a comfortable one but there's got to be a solution you just you just circle the wagons on yourself and you have nowhere to go right yeah that's where yeah i think you guys need to do a written monthly budget and you need to figure out what your low months are what your normal months are what your low months are, what your normal months are, what your high months are, and start planning for those low months. And everything that's

gravy on top, we can set aside. Do you have an emergency fund right now? We do. We have three months. Okay. So that should give you a level of peace that if something goes down, we have an emergency fund to cover it. And so I want you to get away from this razor thin mentality where there could be one thing that just takes us out because that is stressful. That's going to keep you up at night. And let me tell you this. It's not uncommon when someone you love is hurting and struggling and you are seeing end of life transitions happen right before you. You're a part of them. It's almost surreal. The decisions you're having to

make, the conversations you're having, the documents you're signing. And when we do that on a foundation of chaos, when you and your husband aren't aligned, or your kids aren't and you aren't connected, or you're worried about your finances, or this house just has some memories in it that you're ready to move on from, your body will just start sounding the alarms and it's going to make everything around you feel like it's the end of the world you're going to feel pegged into a corner boxed into a corner that you can't get out of and it's just simply not true you just got to turn the lights on and so some of this is going to be solved by you sitting down and grieving the fact that your mom's moving from your home, possibly to her last place, that she's ever going to live.

And that stinks, and that's hard, and it's heartbreaking, and it's sad, and it's something to be grieved. And you and your husband may have had a cool house, and y'all had all these dreams of fixing it up and doing it all nice, and it's just become a nightmare. Even though financially it works out that's okay but just grieve that we had this picture in our head we thought it was going to be this and now it's going to be something else and i'll tell you the year me and my wife sold our house i actually had to bring a check to closing because we sold it at a loss and we moved into a dorm, a two-bedroom apartment with a toddler just to let the smoke clear, to pay our debts off and to recalibrate our marriage and our life and all that stuff. It's the best year. It's the best investment we ever made. It changed our life in a bunch

of different ways. It revealed some chaos that has taken years to heal from, but it was worth it. And for others, just running from your house, great. Your problems and your challenges and your grief is going to go with you. So that may not be the solution here, but it sounds like you're just circling these challenges instead of sitting at a kitchen table with your husband and a yellow pad and a pen and just saying, we can't run from these storms. We can't run from the smoke. We've got to head straight in. Does that sound right? Yeah, that sounds right.

Ellie, hang on the line. I'm going to send you our EveryDollar budgeting app. It's going to help you make a plan for these dollars. I'm selling the car before I sell the house. And if that doesn't give you enough margin, then we can consider our next move. But I think John's right. This isn't a financial question. This is largely emotional and relational. And we're cheering you on either way. This is the Ramsey Show, and we have two beautiful people over there

on the debt-free stage, Chooks and Virginia. Welcome, welcome, welcome to Nashville. Where are you in from? Dallas, Texas, or Fort Worth. The right side. The right side, Fort Worth. Salt of the earth.

And so how much have you paid off? $418,000. Holy smokes. Man, you're coming in hot. Okay, how long did it take you? It took us about four years and 10 months. And I always love, George, I always love when someone says, about, and then they give you exactly how long.

I was waiting for the days to come in. What was your range of income during that time? Well, we started off at about $300,000 and then we kicked it up to about $550,000. But funny story, this is actually our second debt-free scream. So we actually paid off our debt in, I think, 2017. We paid off about $418,000 at that time. It was student loans and credit cards and a bunch of other stuff. And then we got a house, which is what we paid off here so this is completely you came full circle yeah you took on almost half a million dollars in consumer debt paying for the past

and now you're building for the future yep and you knocked out another freaking mortgage yeah yeah you guys are incredible what do you guys do for a living so I own a couple businesses one of them I'm actually an executive career coach so I help mid-level professionals find jobs you know within three months or less

George wants to talk to you after the show we'll be in touch looking for a job yeah come on clearly you're very good at it yeah and I also

own a learning company so we work with a bunch of different online universities where we do course management and teaching and things like that

and then and I work for Gateway Church in South Lake Texas and I'm on their training learning development team so been there now for eight years and it has been a blessing it's been wonderful so that's extraordinary okay so let's just stick with the mortgage. What set you on this path? What made you decide, you know what, let's just pay the sucker off? Yeah. Actually, take us all the way back. How did you get involved in this crazy cult that we have over here? Yeah, it's a good cult.

So when Chicks and I got married, we had like tons of student loans. And so we both knew like this is crazy. Like how could you possibly live life with this magnitude of student loans? And so he has a PhD. I have an MBA that's like 19 years of higher education. And the bill reflected every single penny of it. So honestly, we were just kind of like in a shock factor. And we, my parents and my sister are avid fans of Dave Ramsey from years and years ago, like 20 years

ago. And so he was always a book like on the shelf, you know, and he was always a part of the conversations in my family's life. And so when we got married, I said, well, hey, have you checked out Dave Ramsey? Have you checked him out? He seems like, you know, solid, solid, solid dude. And, um, he checked him out and he like fell like nosedive into all of his content. I was like, I think you're taking this way. I wanted you to be passionate, but this is like, so my eyebrows, put on the saffron robe, drank the Kool-Aid, did the whole deal. So he was like committed. He was in it. And then the next thing I know, we are like in the thick of paying off our student loans, like with gazel intensity, as Dave refers to. And so that was quite the journey. But that started off us with like the student loan part of it. Well, whenever we were finished that out,

we enjoyed all of like maybe eight weeks of this serenity of debt free. Well, I wanted a house and I wanted like we were moving into the next stages of our life. And so look at him nodding. Yep. And so, you know, Dave talks about paying off the house like over, you know, a period of time. It's not the first thing, you know, but it's like you're going to be intense. You're going to be dedicated. And so I was like, okay, we're going to do 15 years. We're going to do the extra payments. Well, my husband came to me and he was just like, no, we need to clear this off the books completely. He was like, I don't want to gradually do this.

I want to go back in like intensity and so i was like oh my gosh i wasn't quite there yet but i knew like with his personal conviction that we just couldn't live life um with the mortgage on the books like for us like that was a decision like i just knew that i knew that i knew he wasn't going to rest he wasn't going to settle until we got it off the books and so that started us on this nearly five-year journey of paying off our, you know, very beautiful home. So what's the house worth now? About 720,000. Yeah. Yeah. We bought it at 465 and yeah, put our 10% down. And then of course just worked at it. I wanted to pay it off a lot sooner, but that was our biggest money fights. You know, I know that's some of the questions you guys asked, but you know, it was mainly how much money are we going to put towards the house,

you know? And so she kind of wanted to relax a little bit. I kind of wanted to just move, just let's pay this off now. But we had to find a happy medium. Yeah. I was very much doing it in style. I was like, can we do this in style? Can we do this in comfort? And he was like, yeah, if you're comfortable with 90 miles per hour, like that's how we're going to do it. And I was like, okay. Well, you blinked and you're here. I mean, most people have mortgages for 30 years. You guys are like, nah, we're good. Less than five years, this thing's gone.

And now, I mean, are you Baby Steps millionaires now? We are, we are, yeah. So we have about $466,000 in retirement and about $80,000 in cash savings. Incredible. And so about 1.2 million net worth. Not that we're counting,000 in cash savings. Incredible. And so about $1.2 million net worth. Not that we're counting, but $1.2. So most people, here's the objection I hear.

Well, Dave Ramsey's great, but he's for broke people. You guys don't seem close to broke, and yet you dove full head-on into this stuff. What do you say to those people? Because let's be honest. At your income, you had people in your life asking you, why are you driving that? Oh, 100%.

What are you doing? Why don't you come out with us? You need to be leveraging debt and you don't need to get rid of that car payment. Yeah. Well, I... You want me to go? Go for it. So when we first started, I mean, we were making about maybe $100,000 together.

And, you know, of course, you know, we just worked really, really, really, really, really hard. I mean, I was working 14-hour days, even longer than that, sometimes seven days a week, you know, just pushing it, pushing it, pushing it. And, of course, in the midst of that, we had our little one, you know, and it was a lot of hard work, a lot of sacrifice, a lot of salmon in the can. And I don't want salmon anymore, You know, oatmeal and all that stuff. Even though we were steadily climbing, I'm thinking to myself, man, you know, I can, you know, I've got folks who are not making even close to what I'm making and they're driving amazing cars. And, you know, and it was hard.

You know, I wanted and I'm still driving a 14 year old car, you know, so, but hey, I'm going to get something, you know, soon. But nonetheless, now you're going to be driving like no one else because you drove like no one else. Yeah. So it was definitely very, very tough. What do you tell people the key to getting out of debt is? Well, two things. One is you just can't quit as tempting as it is on a daily basis and as much as you want to.

At least that's for me. Minute by minute. Yeah, it was definitely a moment by moment. So don't quit. And then I would say like, it is a sacrificial lifestyle. So with our paying off our student loans and then our house, like that's been seven and a half years, you know, most of our entire marriage, we've lived this very extreme lifestyle. And so I would say it's like enduring the pain. There is a pain point to this type of lifestyle. It is sacrificial.

And so if it's not painful enough, you need to probably work harder at it. And that's the surprising. People are adverse to pain, but this is like one of those processes where you run into the pain. Chooks, bro, you better buckle up because she's going to spend some money. She's already spending money. She's already spending money. She's already spending money. She's been winding up. For eight years, she's been winding up.

You guys are incredible. All right, hey, we've got the Live and Give box for you. It's got a copy of Baby Steps Millionaire, which you already are. We've got the Total Money Makeover, which is a book you can give to somebody else that you love and you think they would benefit from it, and a year to Financial Peace University with every dollar app you can give away to somebody else. Go ahead and bring up the little one. Yeah.

And it's Benaiah, is that right? Yes, Benaiah. Oh, look at that handsome guy. How old is Benaiah now? He's three and a half. Wow. Handsomest head. He's not even going to know what – he's never going to understand

that sleepless nights, the fights, the frustration. He's just going to think, Dad always drove cars like this. And Mom always had three different kinds of couches. Always. Y'all have changed everything. Congratulations, guys. Thank you. It's amazing.

Thank y'all. All right, we got Chooks in Virginia and little Benaiah paid off $418,000 in four years and 10 months, making between $300,000 and $550,000. They paid off everything, including their house. Count it down. Let's hear your debt-free scream. Three, two, one. We're debt free!

Welcome back to the Ramsey Show, 888-825-5225. Listen, if you're a new listener, it doesn't take long to realize we have a bunch of inside baseball. We have a bunch of weird things that we chant about and weird things that we do. And understand it can be kind of bonkers, and the message is so countercultural. We tell people we don't care about your credit score. We tell people we don't care about your interest rates.

We can sound nuts, but we also tell you the truth that millions and millions of people have had their entire lives changed. Their whole family trees changed because they went through these programs and they've got on board with just deciding I'm unplugging from the matrix and I'm doing life differently. If you want to know more about what we're talking about, you want to take a deeper dive into the Ramsey Baby Steps, go to ramsaysolutions.com and click on the get started button. We'll help you figure out the best next step for your financial journey based on exactly where you are today. That's ramsaysolutions.com. Click get started. All right, let's go out to Amanda down the street here in

Nashville. What's up, Amanda? Hey, how are you guys? Incredible. How are you? Doing well. Thank you. So what's up? I am going to give you a little bit of framework and then I'll ask my question. So my husband and I are debt free except for a mortgage, car payments or anything like that. And I'm not going to disclose my income because I am local. But we are thinking about moving in with a family member, or we are definitely moving in with a family member, and we're going to rent out our house. And we don't know if we should rent it out to a single family and have them cover the mortgage, or if we should attempt to rent out to a couple of different college students and have them cover the mortgage

that way because we're close to a local college. And that's something that we both actually did when we were in college about a decade ago. So I was just wondering your thoughts on that. So why are you moving in with the family member? We don't know what we want to do. So we're just going to kind of park ourselves for a little bit. And the family member is a lot closer to our job than we know that we want to move anyway. So we're just going to park and save some money for a little bit and figure out what we're going to do with this house. And we figured while it's not being used, we would rent it. Why don't you sell your house?

Because we like the idea of having a rental for now and making a little bit of profit on it. It sounds like you are trying to do everything all at the same time. And usually that tornado of activity, there's the great Rollo May is a great psychologist that talks about when we get anxious and we get that, we have people in our life that we love and care about and those relationships are getting frayed, and our bodies get anxious. It kicks into this obsession towards action. We're just going to do a bunch of stuff all over the place.

We're going to move in with a family member to save money on expenses, and we're going to keep a rent house, and we're going to plan for the future, but also it just gets all over the place, and you end up not going anywhere. You just spin your wheels in the mud and get real deep. Back out a second. What are y'all trying to escape from?

What are you trying to move away from? What are you trying to pause? You're trying to hit pause on your life and recalibrate. What's happening here? Well, there's no anxiety or anything like that. It's really just the fact that we're both commuting about 45 minutes to an hour to work every day and we want to be closer to our jobs. So you're going to be landlords an hour away?

I mean, I guess in theory, yes. Why not sell this house and then move closer for work? Well, that's the plan. We just don't know where we're going to end up just yet because we just don't know where we're going to end up yet. He's what? I honestly don't know what I was going to say just then. Okay.

I thought you were about to say something and you thought better of it. We can answer the original question of single family versus college students. I don't see a large difference. You know, college students, you're going to vet whoever these people are. And so if you get a bad juju, you get red flags, I'm not renting to either. And so as far as, you know, who's going to pay more, could you get more for it? Either way, I feel like you're going to have to charge the same for rent. And I also, I do think this though, I think it might be cleaner if you choose to keep this rental, which by the way, I think it's a bad idea. I think it makes little to no sense in your situation,

both financially, both stress wise, in any shape, form or fashion, it just doesn't make sense. Cause then you're going to try and buy another one. You're going to have two mortgages outstanding. The whole thing just doesn't, doesn't sound right. It sounds like y'all are trying to do one thing, but keep on another thing. Anyway, I think renting to college students is going to be much cleaner because you may get a family member in there that doesn't want to move or doesn't want to have their rent raised. And it's just going to make things a little more complex. Whereas if you have some college students, they cycle out every year or maybe every other year. Or if you get some law students they cycle out every year or maybe every other year or if you get some law students that's amazing because they'll stay three years and

they're great young men and women so I might lean towards the college students just to keep the whole relationship business and not have that extra complexity of having family there yeah that was my thoughts too and like I said like we definitely are moving just to be closer to our job. So like if it ends up not working out, like we would never have two mortgages. So if like it doesn't work out after us doing it for a year or so, we would sell the house at that point. So we're just trying to figure out what to do in the meantime. Sure. I just, I get, George, we get a lot of calls about the allure of, I just want to, I want to have rental property.

You know, I will scroll on Instagram a lot. And if I don't have real estate, then I must be failing and losing and the world's passing me by. People get starry eyed when they go, well, it's passive income and they're paying my mortgage. And both those things aren't true. There's a lot of assumptions there that worry me and I feel the anxiety and it's not even my house. When especially, what was it, 12 months ago, all the colleges went home. 18 months ago, they all went home. During the pandemic, you couldn't evict anyone legally.

So if they didn't pay, they just went, sweet, I can stay here. Spotter's rights. Hooray, right? So I love the idea. I mean, if y'all want to move closer, you have an opportunity to help out a family member and they can help you out, that's great.

Just do one thing at a time as you're making your way through. Making my way down south. All right, let's go to Tommy in Evansville. What's up, Tommy? How are you guys? Could not be better, literally. What's up? Yes, sir.

I've got a question for you. So I have basically two parts of debt. I've got student loans and a car payment. I have enough to pay off my car right now. My student loans don't start until September. And I'm wondering if I should pay off my car right now or wait until my student loans come due and then pay it off. What's the amount? What's the balances on those? So I owe $3,000 on my car and then my student loan debts are $15,000. Okay. Well, I'm paying off the car,

but for the reason that it's the smallest balance and then whatever you have, do you have more money than that sitting around? No, I have a thousand in my emergency fund. I'm on baby step number two. Okay. But you're saying you have another three you could pay off the car today? Yes, sir. Great. Let's do that and let's start attacking the loans right after that. Okay. But I wouldn't wait for them because that can keep getting kicked down the road. So I'd just want to be free and have it on my terms, regardless of what happens down the line.

What's your salary, Tommy? How much do you make? About $55,000 a year. I'm fresh out of college, so I want to try to attack my debt early. Man, I want that stuff gone by September. By the time there's some sort of, you've got to start paying it back, just be done with it. Yes, sir.

Like, literally just live wild. How good would that feel? By September, you have no debt, all $55,000 minus Uncle Sam's take stays with you. You start building that emergency fund. How old are you? Start investing. I'm 22. Good grief. Tommy start building that emergency fund. How old are you? Start investing. I'm 22.

Good grief. Tommy, you'll have one. 22, and you won't owe anybody anything. And because they're so disorganized, you will get a letter, even if you've paid it off, saying your payments begin next week, and you can just smile and be like, no, they don't.

And I don't know why. That just feels like an Evansville flex, if you ask me. Feels like it would feel good he's flabbergasted he cannot are you still there yeah i'm still here i just gotta put it into action all right yeah it's easy for us to say doing it it's emotional because you worked hard for this money and you don't know what's gonna and what a forgiveness and what if you just paid the money that you took out and then you moved on with your life? How good would that feel? George, real quick.

Sometimes when someone says I have $15,000 in student loans, that's six different loans of $900, $2,000. Mine were split up in a bunch of baby loans. Do you recommend someone, and he has a $3,000 car. Would you take that $3,000 car and put it in the middle there and pay them up all the way or just knock the car out and then start really kind of back at square one with paying these things? I go from smallest balance to largest. It doesn't matter what the thing is.

It doesn't matter because I feel that momentum. Okay. And it's the next one in line and the next one in line, and it works every time you do it. I love it. Versus trying to get fancy with it. I love it. Well, that's an hour in the books, everybody. Be nice to each other.

Turn off the news. We'll be right back hey it's dr john deloney if you love the show and want a deeper dive on your money journey we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for our newsletter. Again, that's ramsesolutions.com to sign up for our weekly newsletter.