The Ramsey Show - App - You Can Break the Cycle of Student Loan Debt! (Hour 3)

Episode Date: September 16, 2019

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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. I am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225.

That's 888-825-5225. Matt is with us in New York. Hi, Matt. Welcome to the Dave Ramsey Show. Hey, Dave. Thank you. I just want to start out by saying thank you for everything. I read your total money makeover at the end of 16, went through a financial piece in the beginning of 17, and in two years got out of $120,000 in debt, funded my safety fund of 30K. Wow.

And now I'm on maybe steps four, five, and six. Look at you, man. Rock it. This stuff works, guys. So if you didn't pay the money to get the financial piece, do it like right now. Thank you, sir. Yes. So the question is, I don't see anywhere in the book or in a financial piece to where it would say, so for baby steps four, five, and six, I'm putting 15% into the investment account and investments. But what percentage should I put into the other two? So let's say I have six grand left over, and I put 15% of the total, which would be like two or three grand.

If I have three grand left over, what do I put towards the other two? The college fund, I have three kids. Okay. Well, the reason that's blank is because we don't know how many kids and how old they are. Okay? Right. And so if you have three three-year-olds, you can start out, you know, $50 or $100 a month. If you have three 18-year-olds, you've got a problem.

Sure. Six, four, and zero. So one month old. So you've got a little time. And so, you know, there's a couple of ways to go at it you could sit down with your smart investor pro and figure out what you need to be putting into them at their age into their 529 or their esas and mutual funds so that there's enough for them to go to college when they reach 18 and you just sit down and calculate that out and they can you know you need to put 150 a month for

this kid and 50 a month for that kid and whatever it is. They'll work it through and run you the math out on it based on some assumptions about where you'd want them to go to school and in-state school and what that might cost in 20 years and that kind of a thing. And so you just do some projections, and a SmartVestor Pro can help you lay all of that out. And then any money above that would go towards your house. Okay. And then the other thing was I didn't qualify for the 401k. I'm an entrepreneur, so I don't have a 401k.

I can't qualify for a Roth IRA. So do you recommend just doing a regular IRA for myself? You make over $200 a year? Yes, $250. Okay. You can do a backdoor Roth IRA in your marriage. You can do one for you and your spouse. That won't get you to 15% of your income,

but all that is is you open an after-tax, not before-tax, an after-tax IRA, and you roll it to a Roth. I do that every year. It's perfectly legal. It's part of the system that's in place today. It's kind of a loophole, actually, but you can do it. It's called a backdoor Roth IRA, and your SmartVestor Pro can help you do every bit of that.

And you said you're self-employed, so you've got other options you can do as well, things you can do if you've got self-employed income. You've got the SEP available, a simple IRA. You've got all kinds of different things you can do in addition to regular roth iras well backdoor roth iras hey good question kate is with us in california hi kate welcome to the dave ramsey show hi there dave thanks again for taking my call sure what's? I wonder if I should get another job or if – I wonder actually two things. Should I get another job and sell my house, or should I put more pressure on my husband to do more? Okay. Well, you shouldn't have to put pressure on your husband. You should be able to sit down and say, these are our goals.

How are we going to get there? And then you would decide together what you would do to get to your goals he's not your son he's your husband right i that's how i wish it would be but no that's how it's supposed to be tell him to man up and sit down with you and let's be adults and start talking about our goals together i don't want to be married to a little boy. I want to be married to like a real man. You're not his mommy. Don't treat him like a little boy. Expect him to be a man.

There's nothing wrong with that. And all that means is that you sit down together, and you lay out where you're going to go. Let me just tell you, my wife putting pressure on me to do something doesn't work me putting pressure on her to do something doesn't work what has worked in 38 years of marriage is when we both sit down and we identify this is where we want to go together and we both are willing to sacrifice to get to the thing that we're going to that's two grown-ups with shared goals and shared vision and uh but you know sharing deciding i're going to. That's two grown-ups with shared goals and shared vision.

But, you know, Sharon deciding I'm going to do something, that doesn't fly. And it certainly doesn't fly if I do it to her either. I'd make a mad hillbilly woman out of her is what that'll do. So, no, you just don't. That's not how you treat each other. We're not children. We're adults. Submit yourselves one to another, Scripture says.

And so, you know, you gang up on the problem together, and then we go there. And then you've got to look and say, well, with our incomes and with some potential extra income to get some debts cleared up, does then this house make sense to us in this overall situation. But this is a decision you and your husband make together as you look at your current house payment in light of your future goals, in light of your incomes. And this is how you do it properly. You're going to struggle if you go the other direction. I promise you. You're going to struggle relationally, and you're going to struggle with your wealth building.

This is the Dave Ramsey Show. Open phones at 888-825-5225. Thank you for joining us. Up next is going to be Shana. Hey, Shana, how are you? Shana. Hi, Shana, how are you? I'm good, Dave.

How are you? Better than I deserve. What's up? I have been looking forward to talking to you for a while. You too. How can I help? Well, I have a looking forward to talking to you for a while. You too. How can I help? Well, I have a 401k from a previous job, and I recently started a new job and have not rolled it over, mainly because I wanted to know if it's better to go ahead and just roll it over.

Yes. Or is there a yes, okay. Or what? Well, I didn't know if there was, if I should put it in a Roth, or if there is a better way to build money, build it up. No, I would just roll it to an IRA across the same four types of mutual funds we talk about, growth, growth and income, aggressive growth and international. If you roll it to a Roth, it's all taxable. How much is in the account?

It's only about $4,000. Okay, so you have a $1,000 tax bill if you roll it to a Roth. And you don't need another $1,000 tax bill right now. You're still trying to get out of debt, right? Yes, almost out, though. Okay, yeah, but we don't want to plunk a $1,000 problem down in the middle of your baby step two, right? So later on, you can convert it to a Roth if you want. But for today, I would leave it as a traditional and just do a direct transfer rollover.

Get in touch with one of our SmartVestor pros. Click SmartVestor at DaveRimsey.com. They'll help you do this. Fill out the paperwork to buy the mutual funds in a direct transfer form, and the form helps allow the current 401K administrator to release the funds directly into the IRA. It's a direct transfer into the IRA, and that's what you do. So, good question. Thank you for joining us. This is The Dave Ramsey Show. Business leaders, if you're not using LinkedIn jobs, you're missing out.

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Visit linkedin.com slash Ramsey. Terms and conditions apply. A lot of people have made the unbelievable mistake to think that the only way to go to college is with a student loan. And now we have a college student loan crisis in America. $1.6 trillion worth. The typical graduate that is in debt graduates with $35,000 in student loan debt. But, of course, those of you that listen to this show know that's really a fairly small student loan these days. Now, lots of people do graduate without a student loan, but they don't talk about it as much.

Well, we're talking about it around here. We figured out the answer to the equation is not a government handout. It's not a government program. The answer to the equation is for you guys to start understanding you've been screwed and quit falling for it. You got screwed by your own Congress and by these banks and then by the universities that ran the prices up because they had an endless supply of money.

So we have a whole series, podcast series coming out in about a month, in about three weeks now, called Borrowed Future that will blow your mind. We have completely uncovered all the garbage under the hood. This stuff, it's not conspiracy theory stuff. It's real. and it is unbelievable and your kid can go to college debt-free and we can show you how anthony o'neill ramsey personality best-selling author has his new book coming out october the 7th it'll ship it's called debt-free degree the step-by-step guide to getting your kid through college without student loans

debt-free degree teaches parents the step-by-step plan to help their child pay for college without debt you don't make adult decisions with a child brain and a hundred thousand dollars in debt's called an adult decision Without debt. You don't make adult decisions with a child brain. And $100,000 in debt is called an adult decision. Parents, you've got to walk with your kids. It's bad parenting to let someone do this stuff. And you condone it. You encourage it.

And you co-sign for it when you're really stupid. And it's a mess. And it's got to stop. And we're going to show you how. Not only are we going to show you how to get out of debt, and not only are we going to help you if you were stupid, because I've been stupid. I know what stupid looks like. It brings pain into your life.

I've done it. And we're going to show you how to get out. And we're going to show you how to break the cycle so that none of you ever borrow another dime. If I have my way, I'll show you how. We'll put these bozos out of business. I can fix the student loan crisis without a government program. Just stop borrowing it. It's over.

Just like that. Oh, there's $1.6 trillion still laying out there but we'll wander through that but you can't talk about getting rid of that 1.6 trillion while you're adding to it every day you doofuses freaking left-wingers i'm gonna forgive your student loan debt meanwhile we're gonna add more back in so that you stay beholden to me so i can keep buying your votes. I don't feel the burn. I'm sorry. This is ridiculous. It's absolutely dumb. You can't keep going into debt and have a whole program where you've screwed over the people you're supposed to be representing called the student loan debt

and then continue and then talk about, oh, we're going to forgive your debt. Here, why don't you go into a debt of $100,000 and we'll forgive $10,000 and act like we did something. Classic government program. Unbelievable. So debt-free degree is coming out. It's only $19.99. We're going to throw in $40 worth of stuff with it. We're going to show you how you can fix your life.

I'm not going to pay off your student loan debt. I'm not going to make you that promise, but I will show you how to do it, and you will be the hero of the story. I don't want to be the hero. I'm in good shape. I don't need to be your hero. You just do the stuff I show you how to do. You go be the hero.

Fix your freaking lives. You can do the stuff I show you how to do. You go be the hero. Fix your freaking lives. You can do this stuff. Debt-free degree. It's got about $40 worth of items that go with it. If you pre-order it, it's only $19.99, and we throw in $40, including the e-book, including much other stuff. It will ship October the 7th. But if you want the $40 worth of extra stuff, you buy it ahead of time, like now, at anthonyodeal.com or daveramsey.com. It includes the entire two hours of talks with Anthony O'Neill and parenting expert Meg Meeker, Dr. Meg Meeker, from the Smart Parent event that the two of them did back in the spring.

Debt-free degree at daveramsey.com or anthonyoneill.com or talk to the Ramsey Concierge Team at 888-22-PEACE, 888-227-3223. Wanda is with us in Wisconsin. Hi, Wanda. Welcome to the Dave Ramsey Show. Hi. How are you? Better than I deserve. What's up?

I have a question to ask. I've been struggling with that I've been at my job for 14 years, and I want to make a change, but I don't know if I'm going to make the right change by taking a new job that I was maybe offered. So just asking your advice to see how I would weigh it out to make sure I'm making the right choice. How old are you?

47. Okay. What is the new job doing? The new job would be working at a dealership. Okay. What do you do now? I manage a restaurant. Okay. And so you're 47. When you're 57, what do you want to be doing? Hopefully not working 75 to 80 hours like I do now. Okay, so you don't like the hours of your current gig. But what do you want to be doing? I want to probably be managing a restaurant,

but not having to work as much as I do now. If you're managing a restaurant, you're working 70 hours. There's not much around that. I think it's seven days a week. It's just a lot. That's a good change. It's a tough business. It's a tough business.

Okay. So if you want to run a restaurant, you want to be a manager of a restaurant, you want to work a reasonable number of hours, you need to take some steps that cause that to happen. Okay. What does this other job have to do with that? The other job has to do with that the other job has to do with that i would have benefits and 401k it doesn't have anything to do with becoming a restaurant manager that works a reasonable number of hours it doesn't but right now i currently don't have 401k i have

no insurance um that's okay no no um benefits at all okay And this new job would give me all of that plus $3 more an hour. Yeah. So all you're doing is chasing money. You're not chasing your dream. Okay. I want you to go get something with a 401k and benefits and a reasonable number of hours that causes you to move towards your goal of where you want to be in 10 years. Okay.

Don't just take something just for the money you'll hate it okay and maybe you don't want to be when you really sit down and do it talk about it and think about it and you know sitting on your back porch with a cup of coffee by yourself and talking to god maybe you really don't want to be a restaurant manager i don't know what you want to do but whatever it is you want to do the decision that will lead you to the decision you need to make because where what do i need to do next in order to get there what's my next step to get to where i want to be and uh it doesn't sound like this dealership thing is taking you anywhere except into a little bit better benefits package and some better hours and if you want to work for a dealership that's not a bad thing but nowhere in this discussion did you ever say my dream 10 years from now is to work for a dealership

you actually said you want to be back in the restaurant business which i'm not sure you can do restaurant management and not work a lot i think that goes with the territory in that gig it's a a very hands-on business, very much. But maybe there is a way to do it. I've never been in the business. I've just observed it from the outside, and it looks to me like it's a lot of hard work watching it from the outside. So hang on.

I'm going to send you a copy of Ken Coleman's book, The Proximity Principle. It is our best career book, the proven strategy that will lead you to the career you love. And it's going to inspire you to take a job that's going to lead you towards your dreams, which is where we want to go. So hold on. Kelly will pick up. We'll send that out to you as our gift. We appreciate you being a listener. This is the Dave Ramsey Show. Let's talk about low interest rates, baby. I know right now that Churchill Mortgage can get qualified buyers into a 15-year conventional loan for well under 4% with no discount points or no hidden fees. Listen, if you're even thinking about buying a home or refinancing, do it right now. These rates

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In the lobby of Ramsey Solutions, Zach and Kalisha are with us. Hey, guys. How's it going, Dave? Welcome. Thank you. Where do you guys live? We live about an hour north of Detroit, Michigan in Fairhaven. Wow. Well, welcome to Nashville.

That's a bit of a haul. Thank you. A short hour and a half flight. Ah, there we go. And all the way down here to do a debt-free scream. That's right. Love it. And how the way down here to do a debt-free scream. That's right. Love it. And how much did you pay off?

We paid off a total of $215,900. Very cool. And how long did this take you? That took us three years and seven months. Okay, very good. And your range of income during that time? We started at about $160,000. We got up to about $200,000 when we were both working overtime.

And we finished at about $140,000 with Kalisha becoming a about $200,000 when we were both working overtime. And we finished at about $140,000 with Kalisha becoming a stay-at-home mom. Love it. Very cool. Fun. What do y'all do for a living? I'm a power plant operator. I worked as a nurse for most of this and then I became a stay-at-home mom. Yeah. Cool. How many kids? One kid. One. All right. Fun. So that was one of the goals is to get out of this mess so you can stay home, huh? It was. Very cool. So what kind of debt was the $216,000? It was $17,000 in auto loans, about $32,000 in student loans, and $167,000 of it was our home.

You paid off your house! We did. We paid off the mortgage. I'm looking at weird people! Yes, you are. How old are you two? We are 26 and 27. Oh my goodness.

And you have a paid-for house. That's right. You are totally weird. Thank you. You're not even 30 years old and you have a paid-for house. Oh, and your student loans are not a burden. Look at you guys. You're amazing.

Well done. Thank you. Very fun. What in the world happened to you guys? Well, our story starts about five years ago. We were at a family Christmas party, and Zach's cousin gifted us the Total Money Makeover. We put it aside at the time. I don't even think we opened it.

I mean, who gives somebody a book like that? Right. Really? Right. Especially at a Christmas party. Yeah. Come on, man. And then about a year later, it was our wedding,

and the same cousin gifted us the total money makeover again. So we went on our honeymoon. We came back, and I decided maybe I should look into it. So I started reading it, and I don't even think I got a quarter of the way through. And I told Zach, this makes way too much sense for us not to try it. So he started reading it we read it in a couple days and we didn't look back here we are game on you just plowed through the house and everything you got with it we couldn't stop so you at what point in

the process did you say i could just completely quit and stay home with the baby if we knocked out everything. Did you see that from day one, or were you down in the thing before you realized that? It was always a dream of mine and to stay at home with our kids. But I don't think it was until almost the very end that we were like, okay, we can do this. Yeah, so it was it was great yeah because you basically three quarters of what you paid off was your house in this process all and just plowed through the whole thing yeah wow very cool worked a lot of overtime huh that's right both of us both

put in a lot of hours and uh yeah it was worth it here we are yeah so did you tell your cousin yeah you're doing all this? We did. What did your cousin say? We don't know if he realizes that they got the book for us twice yet. They probably will when they watch this. They were very excited. Yeah, they're a little enthusiastic.

Maybe you didn't read the first one. We'll get you another one. At the second time, we were like, man, these people are really pushing this thing hard. Maybe we should look at it. Maybe we should see what it's all about so why not yeah glad we did so who was your biggest cheerleader your cousin yeah i would i would say it was each other really um we kept pretty quiet about the whole process and really we just found the motivation through each other the debt-free screams to keep going on it yeah the debt-free screams the youtube channel we watched so many other people that gave us inspiration to keep keep the process going and

that's where we found most of it was each other and uh your channel yeah so brand new married three years and seven months of overtime and busting it and game on and nose down i mean that had to be hard what was the hardest part for y'all? 100% the overtime. It was hard when I worked it. It was hard when I was a stay-at-home mom and Zach was gone every single day. Yeah, it started out, it was time away from Kalisha when we first started it. And then after Aria was born, it was time away from the family, so it makes it even harder at that point.

So, yeah, for both of us, I think it was the time away from the family so it makes it even harder at that point so yeah for both of us i think it was a time away from from home away from each other really uh that was that was the toughest part for sure now we have so much more time with our kids and sure that was one of our biggest whys was so that we could both be there for our kids growing up as much as possible and not have one or both of us working all this overtime really to afford a lifestyle that we shouldn't have been living in the first place and that was our biggest why. Yeah very cool you guys. How much is this house worth? About $350,000. How does that feel? You don't even have a house payment. It's amazing.

The sense of security that you get when you walk around the yard and everything you see is something that you actually own. The bank doesn't own it. The sense of security from that and just knowing that if anything ever happened to me, Kalisha would be able to continue living her life with our daughter and everything would be okay. We don't owe anybody anything. It is an amazing feeling.

And how old is your baby? 16 months. 16 months. All right. Very cool. Very cool. So what do you tell people the key to getting out of debt is? I would say it's the everyday small decisions.

It's the meal planning so you don't order out. It's the saying no to things you don't need in a store. It's the meal planning so you don't order out. It's the saying no to things you don't need in a store. It's saying yes to the overtime. Those just all add up to success. Yeah. Consistency. You really, you got to be willing to change. You got to be willing to say, okay, the way that we've been handling money, it may have got us by, but it's not the right way. There's a better way out there. You have to be able to put your pride aside and say, there's a better way to do this. And that was, I think, a big key for us was doing that.

I mean, there's no secret. The stuff that you teach, you tell people, get out of debt. You tell people, live on less than you make and stop owing people money. It's simple. It's a simple principle, but it's hard to complete. But, yeah you just you got to start it you got to be willing to change very cool well congratulations you guys we're very very proud of you thank you you're an impressive young couple all right little aria is going to join us for the debt free scream love that 216 000 paid off in three years and seven months.

House and everything. Making $160,000 to $200,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Love it! Way to go, you guys that is so fun aria wasn't sure she wanted to be in the middle of that it's great oh it's precious i love it man can you imagine being 27 years old, living in a $350,000 paid-for house, and not having a payment in the world.

I think 27 years old, by the way, qualifies you as a millennial. And just in case you're wondering, I'm a huge fan of millennials. A lot of people are running this generation down, and I get to meet Zach and Kalisha every day. They're everywhere. This millennial generation is some of the smartest, some of the most hardworking generation I've ever run into. They just, well, I mean, there's some of them who just won well i mean there's some of them just want a participation trophy and some of them suck i understand and some of them are

waiting around on bernie to fix their life i got all that but i gotta tell you there's a whole bunch of zack and kalisha's out there too kalisha out there as well um there's a bunch of them i got a bunch of them on my team work here. I mean, average age in this place is under 30 years old. And there's a reason. We love this generation, and they work like maniacs. When they have a plan, they believe in the plan, they will execute the plan.

They're very, very, very sharp. What a sharp young couple. What rock stars. I mean, maybe you're 57 and you're listening to me. Well, maybe it's your turn. You can't go back to 27. You've got to start where you are. They did it.

You can do it. Maybe you're 22. Maybe you're 28. I don't know how old you are. That's not the point. The point is you can do this stuff once you decide it's up to you. This is The Dave Ramsey Show. Hey, guys. At The Dave Ramsey Show, we really value your input.

It helps us to know what's important to you so we can deliver relevant content to help you crush your money goals. We just launched a brand new survey, and we'd love your feedback. It only takes a few minutes, and you'll be entered to win a $100 Amazon gift card. No purchase necessary. Take the survey at DaveRamsey.com slash survey or text survey to 33789. Our scripture of the day, 2 Corinthians 9.8 And God is able to bless you abundantly, so that in all things, at all times, having all that you need,

you will abound in every good work. A.W. Tozer said, Let every man abide in the calling wherein he is called, and his work will be as sacred as the work of the ministry. It is not what a man does that determines whether his work is sacred or secular. It is why he does it. Rosita is with us. Rosita is in Florida.

Hi, Rosita. How are you? I'm doing good. How are you? Better than I deserve. What's up? Hi. I'm starting the numbers for Baby Step 2.

And I was wondering if I have to add my line of credit to the debt snowball. You're saying it's a HELOC on your house? It's a HELOC, yes. Okay. Is it less than half your annual income, household income? It's less than half. What is your household income? Monthly.

Annually. Annually. One second. Give me one second. I have it here. You can tell me what it was monthly. That's fine. $156K, roughly. Okay. So you're. That's fine. $156K, roughly.

Okay. So you're making $160K, $155K, whatever. And so what is the HELOC? The HELOC is $88,000. So it's right about half. It's right about half, yeah. Okay. So you could put it either place.

I'm probably going to roll it off to Baby Step 6 and consider refinancing your home mortgage and just rolling it into that. Okay. That's a large HELOC. What's that from? It's from when we purchased the home. We took a, in order to buy the house, we took a line of credit from another home we had. And then at some point we refinanced and they had refinanced the other home. We did a HELOC on the other home and the bank asked to put this HELOC on our property.

Yeah, where did the – so what do you owe first mortgage on your current property? We owe $335,000. And the second is $88,000. $88,000. And so what's the house worth? I think we can set it for $500,000. Okay. So you've got a little equity in it with the HELOC and everything.

Right. And what's the interest rate on your first mortgage? It's about 3.7. Okay. Yeah, I would consider refinancing and rolling them all together and putting it on a 15-year. Okay. Yeah, I would consider refinancing and rolling them all together and putting it on a 15-year. Okay. We're paying about seven-something on the HELOC. Yeah.

But the problem with the HELOC is it's a variable rate. It probably has a call, and your rates are going to change on you all of the time. So, you know, I cannot, you know, I don't want that thing hanging around. So you either need to put it in Baby Step 2 and knock it out or, you know, go ahead and start talking about just rolling it into a new first mortgage with your first mortgage currently rolling in, getting a cheaper rate on both of them, and let's work our way out of that. So, hey, good question. Thank you for joining us. Open phones at 888-825-5225. Up next is Bradley in Illinois. Hi, Bradley, how are you? I am better than I deserve, sir. How are you?

Just the same. How can I help? to thank you for taking my call. And my question kind of comes in two parts. The first being a thank you. And then the second being the actual question. So I started listening to you probably a year ago. And at the time I was dating a girl for roughly two. So in following your baby steps, obviously started taking her, taking us out less to eat and all the small stuff and went on a budget. And then she eventually cheated on me. She was a little bit of a princess, and we know how you feel about those. So first and foremost, I want to thank you for helping me avoid a very lengthy and dreadful life. But the question would be, how do I get back out there while remaining financially responsible?

And what maybe are some things that you've seen over the years to keep a head on my shoulders but still be out there and still enjoy myself? Yeah. Well, I think, number one, you get with a group of friends that are probably going to connect you to people. I mean, if the only person you're going to find is in the bar scene, then you're going to spend a lot of money working the bar scene, right? If that's what you want to do. But if you're, you know, if you're hanging out with groups of friends, that's often, you know, a potluck dinner at somebody's house and, you know, playing cards or doing whatever. It's not,

it doesn't have to be super expensive to run around with groups of people and pull things together. And so I think that's the kind of thing I'd be looking for. The other thing I would do is I would put a line item in my budget if I were in your shoes that says I'm going to spend this much on going out to eat or going on a date, whatever it is you're going to do when you're going on a date, and just have some money allocated to it. going out to eat or going on a date, whatever it is you're going to do when you go on a date. And just have some money allocated to it, even if you're working your baby step two. It's just going to be a part of your life, and that's going to be a route you're going to want to go.

But the trick is, if the only way that you're attractive to someone is because of how much money you spend on them, you know, you got the wrong person. Because as you said, that's going to be a long and terrible life. But also, you don't want to be such a cheapskate that you're not, you know, that you're not being, you know, you're not having a nice dinner or something with someone that you care about occasionally. So if you're married, you can get away with both of you deciding to turn it down and say we're not going into a restaurant, we're not going into this, we're not going into that. But I would just say versus the normal, quote, dating scene, I would cut it back 75%, but I'm going to put some line item in there for the nicer dates especially the first several or something like that and then i'm gonna really pursue um stuff you know in group type of settings and that's how you're going to meet someone probably

that's a quality person anyway so a good question, good question. Like I know anything about it, but you asked my opinion, and I'm an expert on my opinion. Thanks for joining us. Open phone is at 888-825-5225. Ashley is with us. Ashley's in Arizona. How are you, Ashley? Doing well, Dave.

How are you doing? Better than I deserve. How can I help? Well, thank you for taking my question. My husband and I are in our mid-20s and the only debt we have is school-related. So my husband's getting his master's degree right now and we don't have any credit cards. We never have and so we don't have any credit. And right now we're not looking to get a mortgage for a house, but someday we would like to. And I was just wondering what your advice was for someone like us

and how to prepare to get a mortgage without taking out a credit card. Is there a way to do that? Well, yeah, basically there's two kinds of mortgages. There are the ones that are issued exclusively on the FICO score, which is 90-something percent of the mortgage companies do that, and 90-something percent of the mortgages are done that way. But a small percentage are still done the old-fashioned way. It's called manual underwriting.

And manual underwriting is where they actually look at the actual payments that you've made to your landlord. They actually look at your actual income. They actually verify that you have the down payment money in the bank. And that's how mortgages used to be done, you know, back in the 70s and 80s, as an example. But it was only when we got stupid that we started using the FICO score exclusively for mortgages.

And so talk to someone like a Churchill mortgage, and you'll be ready to do that. Now, of course, you're going to have paid off your student loans, if you're listening to me, and you're going to have a good emergency fund of three to six months of expenses. And above that, you've saved up your down payment now once you've done all of that see you're going to be in really good shape financially you'll be real steady into your jobs he will have finished his master's he'll be in the big boy job from the masters and be making his money you know you're going to be doing really really well you'll be sitting on some money and you'll have no payments. Not a single account open at that point. If you have zero

accounts open, eventually your credit score becomes zero. Which is a wonderful thing. It's what you want to aim towards. If you can get to a zero credit score, that puts you in a position to do the manual underwriting very, very easily. And that's what I would lead you towards.

No, I'm not going to tell you to get a credit card because a credit card is necessary to get a house because it's not. Hope that helps. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Blake Thompson, Senior Executive Producer for the show. Christ Jesus.