The Ramsey Show - App - You Don't Meet Generous People That Are Depressed (Hour 1)

Episode Date: November 30, 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. I'm Dave Ramsey, my co-host today here on the air, Ramsey personality Dr. John Deloney, as we talk about your life and your money. Open phones at 888-825-5225. So we get to add a new moniker to Dr. John Deloney. He's a doctor a couple times over, a couple PhDs, which is a couple more than any of the rest of us have around here.

But he is now a national best-selling author. When 2020 can't get any weirder. Golly. I was standing on a hunting ranch in nowhere, Texas, when I got that phone call. What a neat Thanksgiving surprise. Absolutely. So, Redefining Anxiety, What It Is, What It's Not, and How to Get Your Life Back, is a quick read, which is basically a couple of chapters. Laughingly, I mean, not to take anything away from you or anything, brother, but it's not even a real book.

It's a grad school paper. It's a couple of chapters. It wasn't intended to be a real book, but it came out number two on the bestseller list last week. And so, in other words, it went out with a rocket. And very, well, congratulations. I'm proud of you. I appreciate that, man. So now yet another Ramsey personality that is yet a national bestseller.

Very cool. Very neat. And why don't we do a real book? What will happen then? That meeting's this afternoon right after this show. We're already on it. Game on. I mean, what will happen then when we actually put effort into it and everything?

And. I mean, not into the book, but into the marketing. Yeah. Within 48 hours, I asked somebody at a Thanksgiving table, hey, will you pass the rolls? And they said, ooh, Hollywood, why don't you get your own rolls? So, in case you're wondering, having a best-selling book doesn't change much with your family.

No, it doesn't. You can get your own rolls at Thanksgiving. As a matter of fact, even the subject you wrote about, they won't ask you about. Because they're your family. They're the cause of it. That's right. In your case, anxiety. In my case, money.

Yes. They are the cause. That's right. That's funny. I don't know whether they are embarrassed to ask or you're just not a prophet in your own land, but it's probably number two. It's probably both. Yeah. It's probably both. Yeah. It's probably both.

Yeah. Redefining anxiety, what it is, what it's not, and how to get your life back. Now a national bestseller. This is not a death sentence. It is not a chronic sentence that you have to have this the rest of your life. You are not anxiety. Anxiety is a thing independent of you. And what it is, what it's not, and how to get your life back.

Be sure you pick up a copy they're ten dollars and um that's um that's actually a lot per page exactly exactly per thought that's a that's a good bang for your buck and nothing says i love you for christmas like anxiety book honey you should read this that's right that and a weight loss book would you read this and how to lose weight? Yeah. And how to get out of debt, you idiot. The next book is going to be called Surviving Divorce.

It'll be a few chapters, too. Caused by Ramsey personality. All right. Open phones at 888-825-5225. Let's start this hour off with Miami. Dave is calling. Hi, Dave. How are you?

Hi. How are you? Hi. How are you? Better than I deserve, sir. How can I help? So I'm looking over some things, and I've spent about $3,000 a year on gas because my SUV requires premium. Just a silly oversight when I bought it a couple years ago. And I'm curious if I should look at trading it in, getting something else. I drive about 25,000 miles a year or just keep putting up with the gas pump. and curious if I should look at trading it in, getting something else.

I drive about 25,000 miles a year or just keep putting up with the gas pump. So what's the SUV worth? It's worth about $8,500, and I'd be looking at maybe getting something similar that doesn't around that same price range, maybe spending a little bit more to get something with less miles. My car's got about 110. I think if you spend the same money, it becomes a no-brainer. If you spend more money, now you've got to do math. Okay, and most of the time, gas mileage, most people don't drive enough to,

you know, you wouldn't believe the number of times, Dave, I get a call over the years that somebody's driving a $10,000 car. They want to move to a $25,000 car, spend $15,000 more so they can save $6 on gas, you know. And it's because it becomes emotional, you know, by filling up the tank and go, God, the hell, $60 worth, you know. And that's with gas at $250, you know. So it's that kind of thing. So, yeah, if you break even, now if you spend $1,000 more even, now you've got to go, how long does it take me to recoup that with the savings this car has at gas mileage versus this SUV on gas mileage and on gas cost?

By the way, most nicer cars now require premium, so that's not that unusual. Yeah, I mean, a hybrid would, you know, I'm still getting $30. If I were to get a hybrid, I'm only looking at, like, $1,500 in savings. So that's what I'm looking at. And so if you say $1,500, if you cut your gas bill in half, which would be highly unusual, but if you could do that, then, yeah, you could spend $1,500 more on the car than you're sold for, and you'd break even after a year, which I wouldn't even do that. I would say buy a hybrid that is, as you can buy a hybrid for $8,500 used,

or something with gas mileage, I mean, just a Honda Accord, you know, whatever, that's going to save you money. If you spend the same money, the answer is a no-brainer. If you spend more money and you use this as a rationalization, which is really what this discussion most of the time comes down to, now you're getting into math that you're going to lose. You're going to lose the equation because you just don't do it. My favorite one, John, was when I very first started this.

I had a guy that had this classic he's in one of my fpu classes i knew him in church i was teaching it live in church you know way back he had a classic 1960s chevrolet truck and it had not been driven just beautiful it was just gosh it was all original. He'd had it forever. And one day he comes in in a new truck, like $25,000, $30,000, and he'd gotten rid of the Chevrolet. And I'm like, where did the truck go? And he goes, I had to get rid of it.

The gas mileage was killing me. But the thing is, he drove over the road truck. So he would drive it four miles to the tractor trailer get in his tractor trailer be gone all week drive it four miles home i mean he'd have to he'd have to drive it 400 years to make it to make the gas mileage difference on this there's just no possible way this math will ever work he just wanted a new truck that's right that's all it was and he got rid of a classic. I mean, it was so, it killed me. But he completely rationalized it with a four-mile commute on the gas mileage.

And I've seen people do that with hybrids. I've seen them do it with electrics. You know, sometimes they get all up in the air and they're, like, trying to save the planet. And it's like, dude, you know, you really got a different job than saving the planet personally. And you're going from a $15,000 car to a $30,000 car than saving the planet personally and you going from a fifteen thousand dollar car to a thirty thousand dollar car to save the planet and going in debt that's a bunch of crap i i had an old banged up beat up truck that i had in my head i was going to restore it if you don't know what you're doing don't do that by the way golly i was i'm an

embarrassment to all of us to the neighbors um but i I kept an old banged up Corolla. You might be a redneck if, yeah. Dude, it was every day. I felt Jeff Fox really just talking to me. But I had an old Corolla that I drove while I was trying to fix this thing up. And I hadn't done the math on the insurance and oil changes. Just having a car sit in the driveway was another couple thousand bucks a year. My free car that was just sitting there was costing me money. Paid for car.

And it really wasn't an expensive car. It's just not getting the... I was all emotions, right? And I just didn't do the math on it. Yep. And when you do that, it's just... Man, all of us... But I mean, we're car people.

We all... Americans are car people. We loves our car. I was until that moment. This is the Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income,

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Call 800-356-1780 or visit zander.com and compare online. That's 800-356-1780 or zander.com. Ramsey personality and best-selling author, Dr. John Deloney of the Quick Read, Redefining Anxiety, is my co-host today here on the air. Open phones at 888-825-5225. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. Now, when most of the time I hear that, it means if I'm not satisfied with a product, you know, I don't like it or something like that, or it didn't work,

then they would give me my money back, usually if it's defective or something like that. Their 100% satisfaction guarantee means even if you screw up when you are measuring the window blind, it's the wrong size. It's idiot-proof, man. That's it. Or John Deloney-proof. If you don't speak Latin. It's the wrong color, which I could do.

Easily the wrong color. I mean, my clothes don't even match, so it could be the wrong color, right? Then you get to reorder it completely free. You get free samples, free shipping, new promos all the time. Use the promo code Ramsey to get the best deal. John, our question. Today's question comes from Tom in Massachusetts. It says, I have a rare growth disorder that resulted in me needing 12 surgical procedures before the age of 18. My disabled single father spent all his savings bringing me to a specialist hospital. He dedicated his entire life getting me through my education,

and next year I'll begin practicing tax law. I planned on repaying his kindness by allowing him to live with me and paying his bills, but he died of cancer last year. How can I symbolically pay my father back to fill this void he was my only family and losing him has overshadowed achieving my dreams wow that's poignant that's heavy heavy well my thought here dave is you don't symbolically pay your father back to fill voids, but instead you honor his memory and who he was. Obviously, he was a giving guy. He was a world-class dad.

Yeah, that's the phrase. You live into – you go live your – you achieve your goals. You achieve your dreams. You achieve the things you want to do. You help people. You become that person for other people and for your future kids. Exactly. And that's the way you honor somebody who's passed away.

Well, and that, you know, you ask yourself, what causes him to sit in heaven smiling? A, you achieve the dreams that you and he had, and you continue to live out those dreams with excellence, with boldness, with integrity, with courage, and you just go be like a freaking world-class lawyer because that's a big deal that you got through law school with all the stuff you've done here.

And you go blow it up, man. I mean, you don't be mediocre. You don't mail it in. That's honoring to his memory. And then the second thing is he was obviously a servant. And let me tell you one thing about servants, and generous servants like he was, a servant. And let me tell you one thing about servants, and generous servants like he was, a servant's heart. 100% of those people are happy people.

That's right. You don't meet depressed people who are generous, and you don't meet unhappy people. They don't frown all the time. They don't look like they were weaned on a pickle. And so that was your dad. He was happy. He was doing what he was put on the planet to do.

And he wasn't doing it for some sort of ROI or as an investment that you're going to pay him back, right? Exactly. Exactly. We know that. There's nothing in between the lines, no spaces here that indicate that at all in this storyline, this narrative that you gave us. And so the second way you pay him back is exactly what John said. You just go be like him be be almost recklessly generous right be generous serve like crazy outrageously

generous i love it yeah that's exactly what you do and uh that that is honoring and that is symbolic by the way too without but it's not a thing of he needs a statue or a foundation formed in his name. Nah. None of that's needed. Matter of fact, he wouldn't like that. Most of us, Dave, when we think of words like legacy, we think of what comes after us. I love the idea of Tom thinking he is somebody's legacy, right? He's in the middle of a legacy.

I am a legacy. His dad created a new generation of this family and he is now going to steward that on and um it's not something that's going to happen in the future something that's happening right now and you know it can be an overwhelming weight or it can be looked at with a grin and a blessing i was with a fifth generation guy this weekend fifth generation uh big landowners and uh you know great great grandpa put together the 60,000 acre farm wow and uh it's you know it's been dispersed among the kids the grandkids the the cousins but the guy i was with had 20,000 now he had got his share and then added back to it and to him it was this great there was a freedom in it

there wasn't a weight in it you know it wasn't a a burden that he was carrying on his shoulders he wasn't whining about oh this is a horrible thing that family wealth has trapped me or something like that and it wasn't he wasn't a trust fund baby living on the back of a yacht or you know he wasn't trying to do a reality show. You know, just a dude. Yeah. And just saw this wonderful, you know, he was in sync with his great, great, great grandpa. How cool is that? It was very cool. It was very cool because I love family stuff.

That's right. Family generational wealth because I'm always talking to you guys out there about change your family tree, change your family tree. Well, great, great, great grandpa did that. You know, when you amass 60,000 of anything, you know, you're starting to change your family tree, much less acres. And then it becomes about stewardship and honoring it for folks that you'll never meet, right? Yeah, it's the old thing of, you know, you're going to be sitting in the shadow. Old men plant trees, young men, that they'll never sit in the shadow of.

That's right. You know, that kind of thing. And that's legacy. That's good stuff. Cody's with us in Minneapolis. Hi, Cody. Welcome to the Dave Ramsey Show. How can John and I help?

Yeah, first of all, I just want to say I appreciate your guys' time. Hope you guys are doing well. You too, sir. I was just wondering if I should essentially dip into my savings to write a check to pay off the rest of my student loans. I believe in paying off my loans. I don't think anybody's responsible for that debt but me. I signed it, and I've paid off the majority of it.

But my main thing is, am I leaving money on the table by paying it off early with the potential that Biden could come in and forgive some student debt when I could then use that money to max out a Roth IRA contribution. Yeah. Pay it off today. Okay. You might be leaving money on the table, but by the way, you're leaving money on, do you have a job? Well, I did. I live in Minnesota. I'm in sales for a fitness facility. Are you on welfare? No. Okay. If you are you on welfare no okay if you're not on welfare then um you have left money on the table because you could choose to not work and be on welfare you could choose to not pay off your student loan and went on the government to do it for you same dadgum thing

same exact thing that makes sense yeah and so and as you just mentioned it um you said you said i want to own this debt right i don't i don't want to wait for somebody to pay it off and in the same breath you said but if someone's going to pay it off that's cool um i'll i'll go one step further i love your heart you signed your name on that paper you owe that debt you have that that amount of money sitting in your checking account i think it's a matter of personal integrity for you is what it sounds like. Yeah, I don't think you'll like yourself in the mirror if you wait on Biden to pay it off, if he does. And I don't think he's going to. I don't either. I think you've got to get that through a Republican Congress, and I don't think that's going to happen. So I hope it

doesn't happen. For all the people out there that paid off their student loans, I hope the others aren't forgiven. That's called not fair. Hello? Just for those of you that wondered. But anyway, yeah, you need to knock that out, dude, like by close of business today. Dude, today you'll feel good, man. Yeah, you'll feel great. Merry Christmas. Michael's in Fayetteville, North Carolina.

Hey, Michael, how are you? Doing well, Dave. How are you doing? Better than I deserve. How can John and I help? Yeah, I'm in the military here. We purchased a house in April of 2017, and I'm really not satisfied kind of in my current job position. I was offered a new position in Texas, which is great, but the housing allowance that the military gives would make us have to considerably downsize and maybe even pay more to rent. And our house in North Carolina here would need some, you know, fencing, landscaping work in order to sell. So my question is, should we sell and move to maybe a better opportunity to have better job satisfaction, but downsize and maybe pay more for less should we suck it up another couple of

years in this house and then sell and try to get maybe a little more money to pay more towards baby step two or should we rent it out since there's like a 99 chance yeah you need to sell it there's not a 99 chance of anything in renting sell that house sell it and you move to move to texas still live your life brother yeah life's too short life's too short sell it and you move to Texas. So live your life, brother. Yeah. Life's too short. Life's too short. Sell it. It's just a stupid house. They got them in Texas, too.

This is the Dave Ramsey personality, Dr. John Deloney is my co-host today here on the air. Brandon and Brittany are with us. They are in Spokane, Washington, and it says on my screen you guys are debt-free. Congratulations. Thank you. Thanks. Awesomeness. So how much have you paid off?

We paid off a little over $76,000. Very good. And how long did this take? 17 months. Wow. And your range of income during that time? It stayed at $76,000. You paid off $76,000 and you made $76,000 and you did that in 17 months.

Yeah, we did. Did you have money in savings or what did you sell? Yeah, yep. We had a little bit in savings um about 12 000 okay um we sold a truck how much the truck sell for that sold for 19 sold for 19 and so we used nine of it to buy another truck and tend to pay off our rv but what really helped is we didn't have rent or a mortgage. Oh, wow. That's nice.

How'd you get that? Our grandma let us stay in a second house she owned for free. Oh, very nice. So she liked your goal, huh? She did. She was a big supporter. Okay. So you moved $22,000 worth of stuff against the $76,000. So you had $54,000 that you cash flowed in 17 months making 76 so that

means you're still on a real tight budget you're still doing beans and rice weren't you oh yeah definitely so uh what got all this started 17 months ago well i had a co-worker who took a fpu class and kind of told me about it i was like oh like, oh, okay, that's cool. And then we ended up maxing out a credit card, financing an RV. And when we got that credit card bill, it was like, oh, we've got to do something. And so you went to FPU? We did. We did end up taking the FPU class and just kind of got on a real strict budget and yeah we started we started actually um a couple so 17 months ago and then a few months into it we were

like we should take the fpu class and found one at a local church and went there oh very cool good yeah good okay so that helped give you more information and propel you along. Yeah, absolutely. It was a huge motivator. Very cool. So what was the hardest part of this for you guys? For me, it was by far saying no to our friends. We had lived a very expensive lifestyle before this, going on weekend trips all the time with friends, buying anything and everything I wanted, and just having to say no to friends who sometimes didn't quite understand why we were saying no was really hard.

Yeah. What about you, Brandon? The hardest part, I'd say, shoot, the saying no to friends and then when you work the second job on the weekends. Saying no to Brittany? Yep, yep. There's no Brittany, no friends, just me. I think we know who the spender is, Brittany.

I think you confessed there a minute ago. I could be wrong. I could be wrong. Well done. I'm proud of you guys. How long have you been married? Well, two and a half years. Okay.

So fairly early in your marriage. You got started on this then? Yes. Yeah. But it took you about a year to run it up high enough that it scared you. That's exactly it. Yeah, we went to Hawaii and put it all on a credit card. And we came home.

We're like, uh. Hawaii came with you, right? It did. So are you all going to stay in this rent house, or what are you going to do for housing now? Yeah, now we're going to buy it from our grandma. Ah. Yeah, and she's going to give us a really good family deal. I like it.

This is a great plan. What a great story. How old are you two? I just turned 26. And I'm it. This is a great plan. What a great story. How old are you two? I just turned 26. And I'm 27. So how does it feel to have no payments? Oh, my gosh. It's so amazing.

Relieving. And what's even more amazing is the month we paid off our debt, we found out we were pregnant. Yay! Congratulations. Thank you. Awesome. That's as good as it gets right there absolutely so now we can cash flow our baby we can cash flow everything yeah better to not have the baby

repoed and britney i'm looking at these photos here and i think you can also afford to get brandon a beard trimmer as well whoa Whoa! I think it's time. I don't know about that. He's got a pretty serious lumberjack beard here. You need to leave his beard alone. John has beard envy, Brandon. I'm just saying. Listen, I have not shaved since January.

And nobody cared. No one can tell. That's awesome. Way to go, you guys. Very, very well done. So your grandmother has to be one of your best cheerleaders right yeah absolutely yeah because she's always lived this way right um not really to be honest okay that's all right so uh next question now that you did all this you're 26 will you ever go back in debt? Oh, Lord, no.

No. That was quick. That was good. We have so many people telling us that you have to have a credit card. You have to have a credit card. No, you don't. Why would I? Yeah, why would I?

That's exactly the answer. For what? For what? Yeah. Why would I shoot myself in the foot? I have a perfectly good foot. Yeah, why would I go back to that? I can't trust myself, obviously.

Well done, you guys. Well done. So proud of you. We've got a copy of Chris Hogan's book for you, Everyday Millionaires. We want that to be the next chapter in your story, and I think it will be. I think you guys are going to live life large, and you're always going to be intentional from this point forward, and you're going to avoid debt. Very, very proud of you.

Thank you. Brandon and Brittany, Spokane, Washington. $76,000 paid off in 17 months, making $76,000 with the sale of a truck and a little of their savings used and Grandma letting them stay in the house for free. I love it. Count it down. Let's have a debt-free scream. Three, two, one.

We're debt-free. Yeah. This is how it's done right here. Very, very, very well done. Open phones at 888-825-5225. Gabriela is with us in Tallahassee. Hi, Gabriela. How are you?

Hi, Dave. I'm doing well. How about yourself? Better than I deserve. What's up? Well, thank you for taking my call. I'm currently on baby step number two. I work full time.

I make $60,000 a year, and I'm finishing my master's degree online. I found you, unfortunately, after I already took out student loans to pay for school. I have about $12,000 worth of loans right now that are included in my Baby Step 2. My question for you is I have a year and a half left of school until I complete the degree. Should I pause on school and classes in order not to take out any more loans, finish Baby Step 2, and then continue when I can pay for it? Why don't you just pause your baby steps and pay for it? I could do that, but I would still have to wait, I guess, to enroll in classes just because of what would have to save probably a month or two, and then to enroll. So when are you supposed to enroll, January?

Yes. Okay. And how long have you been working to get out of debt? I just started two or three months ago. Okay. And how much do you need for January to enroll? About $5,000. I have the emergency fund of $1,000, but I know that's not in emergency. So you're paying $20,000 for a two-year MBA program. A little bit more than that.

I just did a rough estimate just based on the couple classes I took so far. It's an accelerated, quick program. Who's it with? Which university? Arizona State University. Okay. All all right so it's all online? Yes. Okay. So I didn't know if we would pause on the baby steps and if like. Well I'm okay if you slow down or you know just pay your minimum payments and you cash flow school I'm okay with that or I'm okay but I'm not I'm not going to give you any answer where you're borrowing money. You can also go to the financial aid office and for $25,

and Dave, hit me with a stick if I'm wrong here, but you can cash flow your semester. They'll pay for it in installments as you go. Technically, you're in hock to the university, but you're paying for it as you go there as opposed to just having to write a $5,000 check. Yeah, and you don't have to go take out a student loan to do that. Absolutely not, no.

Right. Okay, so do that. I would do that and then just, you know, and get ahead on that. As quickly as you get ahead on that, then get your next semester saved up. And then, you know, everything above that, put on your debt snowball. But let's cash flow it. No more debt. That's rule one.

First step to getting out of debt, stop borrowing more. This Deloney, Ramsey personality, my co-host today here on the air. If you hadn't heard Redefining Anxiety, his first book with us, hit the bestseller list last week, so I'm very proud of him. Christmas is just around the corner to celebrate. We're giving away cash all season long. You can enter the Ramsey Christmas Cash Giveaway

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books that, gifts that actually help people. DaveRamsey.com slash giveaway. No purchase is necessary to win, and check out the deals. Justin is with us in Roanoke, Virginia. Hi Justin, welcome to the Dave Ramsey Show. Hey, Dave. Hey, John. Thanks so much for having me on. I really appreciate it.

Sure, man. What's up? So my question, my wife and I are in baby step two currently. We're absolutely slaying debt, doing great. We should be completely debt-free by next summer. But what that's done is paying off so much debt has increased our almighty FICO score. So my question in regards to my current mortgage situation is, should we consider refinancing our mortgage, which is currently at 4%? Our banker told us we could get down to about 2.5 or somewhere in that range. So we're wondering, since our FICO score went up, does that make us more credit worthy to refinance our home loan and get that dropped down to a lower rate while we've, you know, kind of raised our credit score that we're trying to get rid of? Sure.

Yeah, there's two ways to get a loan, a high credit score or no credit score. Being in the middle is not a good thing. Low credit score is not a good thing. So, you know, in terms of getting a loan, that simple issue. So the, yeah, I would go ahead and do that. If you're going to stay in the house, what's your loan balance? Loan balance is about 160. The original was 170. So we've been there for a few years. House sold for 180. We put 10,000 down and then and then you know it paid down principal and interest since then and so um so yeah our banker had reached out to us about negotiating or like refinancing

because we put a new roof on the house we've cleared about a third of the land in the back we put a new shed in the backyard so there's a few other upgrades that appraise for 200 000 so we got it from a friend actually who we purchased it from so the value in the appraisal so we could kill pmi with a refinance as well and that's a big help because you're going to save twenty five hundred dollars a year on interest alone okay yeah so that's what i was thinking and so my wife and i were kind of talking about it but we're like you know we're still in baby step two so is it is it wise to refinance when you're still paying down debt yeah obviously the down payment and things like that get added on.

Yeah, it's not going to cost you any cash except you're going to have a higher payment because you're going to a 15-year. Yeah, we're going from the 20 to the 15, right? Yeah, and it'll be slightly higher because, again, you're saving $2,500. You're saving $200 a month in interest. More, more accounting PMI. And so your payment's probably not going to go up much if it goes up any at all. You definitely go ahead and do all this. Now, make sure that's a fixed rate. I always worry

when a banker calls me. Bankers offering me help is always scaring me. Yeah, yeah, I understand that. But the concept, you know, the general concept of what you're doing is good. You might check with Churchill Mortgage and see if you can even get a cheaper rate. And, you know, shop your closing costs and your rates and that kind of thing with Churchill and make sure that your banker is offering you something good. And, of course, fixed rate only, 15-year only is the only thing we consider in these cases. What's the time, Dave, that you give to pay yourself back for a refi, the closing cost? You should recoup your interest savings, should pay your closing costs back within a couple of years.

Okay. Maybe three on the outset. And that's assuming you're going to stay in the house. If you're not going to stay in the house, you don't do it at all. Don't do it, right. Like if you're putting your house on the market in the spring, you don't refi that. Right. You don't lose money on the refi.

But if you're going to be there long enough to recoup your closing costs. So in his case, he's saving about $2,400 a year in interest, a point and a half on 160. And from four to two and a half. Okay. And in addition to that, he's saving PMI, which is probably another 75 bucks a month, maybe more, maybe 100 bucks a month. And so he's probably saving $300 a month, give or take, $3,600. So if his closing costs are probably $4,000, $5,000, he's going to break even in under two years would be my guess on this.

And do they just roll that into the loan? Yeah, they can put the closing costs into the loan. But in terms of the bottom line is the net, it's not how it's cash flowed, it's how the break even is done. Right. Meaning because you are now further in debt by $3,600, if that's your closing cost, or $4,000. But then you save $3,600 a year in interest. You might not save that in payments.

Right. Because your payment might go up, but your overall savings, you're, you know. But you're drilling the house down faster. To get to the end. Yeah. To get to your end goal is getting there at about $4,000 a year faster. Love it. That's a lot. Love it. That's a lot.

Love it. And you want to do that. And if it costs you $4,000 to do that or $5,000 to do that, then you got that money back pretty quick. And then you got gravy on the biscuit after that break-even point. Love it. And that's the way you do the break-even analysis on it is find out what your closing costs are, what you're going to save in interest in actual dollars. Divide that into that. It'll tell you how many years it takes you to break even.

So 2.3 years, 4.1 years, whatever. You don't do, you know, if you're saving a quarter of a percent, it's going to take you seven, eight years to break even. You don't do that one because most people don't keep a mortgage that long for various reasons. Eric is with us in Tucson, Arizona. Hi, Eric. How are you? Hi, Dave. Thanks for taking my call. I greatly appreciate it. Sure. What's up? My wife, Brianna, is here too. Hey, Dave. Hey.

Here's the scenario. We moved to Tucson a year ago. We both left our jobs for me to take a position here in college athletics, and my wife accepted a position with a non-profit Christian organization as a local ministry missionary with a two-year commitment here in Tucson. And here we are a year later. My position was just eliminated due to COVID, and we are left with paying off $74,900 in student loans. We had $115,000 a year and a half ago. And because of our two-year commitment here in Tucson, I'm unable to pursue my passion in college athletics at this time. So my question is, in order to pay off these student loans,

do I risk looking for a job that I may not be passionate about that pays well, or do I pursue a job that I'm more passionate about that may not pay as well? How about picking an option that doesn't suck? How about find one that pays well that you're passionate about? Why is that off the table? It's not. Okay, good. Yeah, you've hemmed yourself in a corner, man.

You dreamed all this up where it's all going bad for you. I don't know why. I think one of the dilemmas here is that i've committed two years here in tucson and if eric wants to continue working in college athletics i mean really that's not an option at this time and so that's really well there's not a lot of going on in college athletics have you noticed there's nobody in the stands right all of them's budgets are blown up with an atomic bomb so i don't know how how you are causing him to not be able to do that i think this pandemic is causing him to not be able to do that so you need to figure out what about college

athletics that you were passionate about and find different ways to do that until college athletics can come back oh and by the way that time, two years could run out. Now, let's pretend on just one other thing, and then I've got to get John in on this. But, Eric, your wife's name is what again? Brianna. Brianna, okay. Brianna, you said you gave a two-year commitment as a missionary. Yeah.

So let me just tell you, as far as I'm concerned as a Christian, you're released from that commitment if your husband has to move because your family has to eat. Right. You go to your supervisor and say, hey, here's my new situation. I'm not going to be able to fulfill this. Right. A missionary is a voluntary organization. It's a non-profit situation.

And so, you know, you're making 12 cents a minute or something and he gets a chance to go make, you guys get a chance to make a living in another city, but I don't think that's really an option anyway. I think he's going to be doing something completely different. Don't box yourself up into this binary choice. Don't. These two choices in both of them suck. You don't have enough options here. That's right.

Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes or head to DaveRamsey.com. Thanks for listening.