The Ramsey Show - App - You Don’t Need a Credit Score! (Hour 2)

Episode Date: March 2, 2023

Jade Warshaw & George Kamel answer your questions and discuss: "Can I get manual underwriting after a foreclosure?" "Will cutting up my credit cards hurt my credit score?" from the blog: The Best Way to Improve Your Credit Score, "How can we speed up Baby Step 3?" Doing a monthly budget on a weekly paycheck, Saving up to buy a home. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX 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

МУЗЫКАЛЬНАЯ ЗАСТАВКА МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm your host, Jade Warshaw, and I am joined by the wonderful, illustrious, Wow. George Campbell. I know you like when I say illustrious. Illustrious makes me feel,

it's a timeless adjective. It definitely is. And we're here to take calls about your life and your money. George, he is an expert on investing, insurance, all sorts of things. So kind. I'll help you with the baby steps. I'll help you get out of debt. I'll help you stay motivated. Give us a call today. The number...

Jade, we'll say the number first because we got to get the calls on the board, but I got something to talk about. Okay. The number is 888-825-5225. George, what do you got to say? Well, I had to ask. You just hosted the record-breaking virtual Financial Peace University class yesterday. And I just wanted to know how it went. That's right. Yes, George is correct. We did.

We started a Financial Peace University class with myself leading. The first class was last night. George, we had 1,081 people sign up for this class can you believe it that's wild unbelievable it was great and this is like a boot camp version you're doing in five weeks meeting twice a week correct wow yes we're going super speed people are changing their lives this like the stuff it really works okay so it's too late to sign up for yours but it's not too late to sign up for a class. It may not be as great as Jade's, but that's a high bar. I mean, look, it's gonna be great.

We had to close off this class because we didn't want that many folks. It's gotta be helpful for you guys. So we don't wanna go past a thousand, but yeah, you can't get in mine, but please, please, please. We have amazing coordinators all over the country who help us run these things. And man, they're the arms and feet of this place. We so appreciate coordinators all over the country who help us run these things. And man,

they're the arms and feet of this place. We so appreciate them. That's right. And you can do the Financial Peace University class in person, like in small groups. There's different groups that meet all around the country. Or if you're like, I'm not trying to be around folks. I like staying in my house. Then you can do. You got seven kids and it's hard to get out. You can still do it. Yeah, you can do the virtual version. So whatever you do, this is your year to change your finances. This is your year to change your life. I was talking to the folks earlier today and a guy asked me, he said, what do you do? How do you stay motivated?

I'm like, you just have to want to change. The pain of staying the same has to be greater than the pain of changing. You've got to be like, I can't live like this anymore. Something's got to give. Something's got to shake. And that's when you sign up for Financial Peace University. And that's when you start listening to shows like The Ramsey Show. If you're walking through this, good on you for tuning into a show like this to stay motivated. And let me tell you something. If you like this show, if this show has changed your life, please share it with somebody. All right. Share

the share the good news with somebody who is out there broke and struggling because they need this too. If you're listening on YouTube, subscribe, subscribe to the show. It's great for you. It's great for us. It kicks it up in the algorithm so more people see it and it puts it top of mind for you as well. So you can continue to consume this and also leave a review we would love if you wrote something nice about the show whether it's on the podcast whether it's on youtube say something nice so that all the haters out there sipping on that haterade will shut it up all right that's right i know that's right so let's take a couple of calls here we got roslyn over here in richmond virginia hey i have family in Richmond, Virginia. What's going on, Rosalyn?

Hello. Hi. Can you hear me? I can. Hi. Hi, Katie. Hi, George. Thanks for taking my call.

I'm calling because I came across Dave Ramsey in January 2022 last year. Really improved my life. Got the debt out of the way and everything everything. But of course, I made a lot of bad decisions before, but I want to buy a home by the end of this year. And y'all kind of say, okay, manual underwriting and well, basically to get rid of your credit score. Well, I was wondering if that's really the good strategy for me because in my past, I have a foreclosure. So I don't want to make things harder for myself if I were to have no credit score, which is actually improved now because I've been going through a lot of things and we think so. What do you think about that? I mean, I'm not sure. a lot of things being off debt and everything. So what do you think about that?

I mean, I'm not sure. It kind of makes me kind of nervous. I'm not using the credit cards, but they still are, you know, on my report. So how long ago was the foreclosure? 2016. And it's coming up on seven years on September this year. So it'll get cleared from your history? Does it really?

Because I don't... Well, from your report. It may always be on your history, but as far as if you pull the report, it's not going to affect your chances of getting a mortgage. And it depends on what you did. Do you know what kind of bankruptcy this was? Well, it's the one where I had to pay a lot of money back.

It took money out of my check. So it was a's the one where I had to pay a lot of money back. It took money on my check. So it was a payment plan? Yeah, it was a payment plan. And I paid a lot of money out of my check that went on for how many years, like five years, four years, something like that. Well, generally, you've got to wait four years after bankruptcy to be able to apply for a conventional mortgage loan. And it sounds like you're not at a place to be able to apply for, you know, conventional mortgage loan. And it sounds like you're not at a place to be a homeowner based on what you've told us, because you still have some debt hanging around. How much debt do you have left? No, no, I have no debt. Oh, okay. Because when I came across Dave in January and I did everything, I mean,

he used to say this thing about, you know, the new home, the home mortgage paid off is better than a BMW. Yeah. So anyway, I got rid of my BMW and a great big payment. I got a Toyota. I mean, I wiped that off. Very good. I paid my student loan, paid the credit cards. And so now all I have is I have an apartment and living here like,

you know, for like double digit years. I'm older. I like the idea of one day not having to pay for a roof over my head, so that's why. I would really like to go in and purchase a home. I have saved so far, like, I've saved minus my emergency fund, which is $25,000, so I have an extra $40,000. And I know I can have another $45,000 by the end of the year. Awesome.

So you'd have $85,000 to put down? Yes. Very good. Hey, can I just hold off and say, very good. You had a messed up past with this money, but you have totally turned it around. And I'm just so proud of you. That's incredible. I thank God for finding him because it is very late, but still, it's better than never.

Yes. Very good. Very good. Have you contacted, like, Churchill Mortgage and said, hey, I went through this foreclosure seven years ago. Here's where I'm at. I'll have this much down by the end of the year. Have you kind of looked into it and done some homework? No, I didn't even know if that was something that was,

that was a good strategy. I don't know if I should just go on the normal with my credit. Well, it'll help you. What's your credit score right now? Right now it's 730. Okay. And based on your numbers, if you're walking in with a 730 credit score and you've got 85,000 to put down, you know, obviously depending on the Based on your numbers, if you're walking in with a 730 credit score and you've got $85,000 to put down, obviously depending on the house and your income, I don't see why they wouldn't approve you for a loan. But still do some homework. Call our friends at Churchill Mortgage and they'll walk you through the process. And they'll explain to you exactly what you'll need to do in order to become a homeowner.

And we are cheering you on along the way. What a journey. That just goes to show your past does not have to be your future. This woman went ahead and changed her whole life. Yet again, another thing that proves this plan works if you work it. She went from bankruptcy to now $40,000 to $80,000.

She had all the excuses. And she said, I'm going to get back up. I'm doing this thing. Love it. 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. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs.

Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. You're listening to The Ramsey Show. My name is Jade Warshaw, your host. I'm here with George Camel. Give us a call today.

The number is 888-825-5225. And if you're planning to move soon, we know that it can be expensive. I know firsthand because your girl just moved from South Florida here to Tennessee, but I've got great news for you. Our studio sponsor, Pods Moving and Storage, wants to help someone move for free.

Just get a quote at pods.com slash Ramsey between February 20th and March 3rd. So you got two more days to do this deal and enter to win. It's really that simple. Matter of fact, my buddy called me the other day. They were like, I entered the pods moving storage thing. was like yes one listener will get a free move valued up to five thousand dollars and ten thousand dollars in cold hard cash that's what i'm talking about if you're following the math that's a total value george of 15 15 smack 15 000 smackers i wish i was eligible i know right man not for us so kind of, Pods just made moving that much easier, George, with flexibility that you need, the control that you want, and customer service. Can we just take a moment for customer service?

That's an oxymoron in today's world. I know, right? We're not used to it. Pods is known for it. They are. And if you're looking for a company that is going to help you on your move on your terms, I love that, then it's Pods. Pods is the only Ramsey trusted moving

provider that's out there. So go to pods.com slash Ramsey to enter for your free chance to win this free move and you get the $10,000 in cash. So today go on to pods.com slash Ramsey. I love it. I love it. And George, we got a question of the day here. Let's take a look at this question of the day. It comes from Katie. North Dakota. Here's what she says. Once I become debt-free and cut up all my credit cards, will this hurt my credit score? Lower credit scores mean higher interest rates on the house I would like to buy in the future. Or do you recommend saving for a house with cash, even though that might take a long time? This is a great question because the credit score industry is so confusing. Oh, yeah.

And they're very, they keep it with lock and key. And so there are a few things we know about how the credit score is made up. But yes, canceling your card could mean that your credit score takes a dip. Yeah. Because that makes sense. You pay off your debt and close your accounts and they go, not okay with us. Well, I mean, think about it. The whole credit score is based on your relationship with debt, right? How much debt you have, how long have you had the debt?

You know, what's your debt to income? We're like all debt, debt, debt, debt, debt, debt. Yeah. Payment history is the biggest one. 35% of your scores. That's the factor. Amounts owed is 30%. Length of credit history, another 15%.

New credit, 10%. Credit mix, the variety of credit, another 10%. credit 10 credit mix the variety of credit another 10 and so it's all having to do with how much you play kissy face with the bank man i'm not doing it i i'll be the first to tell you guys when we canceled our credit cards and the ones that were in my name uh yeah my credit score took a dip i'll be honest my credit score was not great to begin with it was probably like 6 30 or something like that. And yeah, it went down. And then it had a period of time where it just kind of stayed the same and did nothing. But let me tell you something, George, as soon as that last debt was paid off, it went down to zero. That's right. So what we're talking about here is not a tanking of your credit score. It means

your credit score becomes invisible or indeterminable. So six to 12 months after you pay off all your debt, you close all those accounts. Six to 12 months later, that score disappears. And here's the good news. Once you cut up your cards and become completely debt-free, you're not out of the woods. You got to have a fully funded emergency fund and start saving up the down payment. And so you actually don't need the credit score for that process if you go through manual underwriting. Yes. Come on and tell them, George. So manual underwriting is a little known fact. I did a quick clip from the show, went viral on social media, and people think, oh, I can get around the system. I have a terrible

score, but I can still get a no score loan. No, no. No, it's in the name, no score loan. And Churchill Mortgage is the number one lender in the country that does these. Yeah. And so that, you know, if you go through Churchill Mortgage for an example, and you want manual underwriting, you got to have no credit score at all to do these manual underwriting, no score loans, which means you're completely debt free. You've got to have a good down payment, you know, let's say minimum 10% down and you got to do the 15 year, which I know is crazy in today's culture. It's worth it. But if you do those things, hear me say this, you will have the same exact interest rate as someone with excellent credit. That's right. And I verified this with our friends at Churchill. I've had multiple discussions. We ran numbers where we actually showed people

your quotes for your mortgages. Yeah. And they found if you do 10% down on a 15-year fixed with a good, you know, your numbers all check out, your W-2s are there, your income is there. Yep. You've got proof of 12 months of rental history verified verified by a landlord or even your parents and you have other utility bills you've been paying on time for 12 months your insurance premiums your cell phone bills your utility bills all of that counts towards this financial picture yeah to where a real person says you are approved for the mortgage at a great rate. And let me, can I just say, cause I know somebody, regardless of how well and how eloquently George just described that there's still somebody sitting out there going, I don't know. And can I just tell you, I was that person when Sam and I were going through the baby steps, you know, we were like,

there were some things that I was like, I know Dave is saying this. I know George and Rachel and all them are saying this, but can it really be true? I'm telling you, I'm sitting in this seat telling you it works. Credit score went to zero. And I was like, oh, I was excited, but I was a little bit nervous. And then I did what they told me to do. We went to Churchill Mortgage, Jeff Green, shout out to jeffrey green at churchill mortgage he walked us through the process and here's the thing it's even easier if you've got like a standard nine to five job because it's easy to show you know all the records and everything they

want to show but as a small business owner it still worked the proof is in the pudding i'm sitting here telling you and i've done the same i went through this process and the crazy part is people still commented going bs and i went what part of this do you not understand? Well, I just told you I did it. And then here's the frustrating part, Jade. People started popping in the comments going, well, yeah, look at that guy's skin color. Of course he got approved for a mortgage. What? What? What? What? So Jade, can you verify? Look, the melanin is real and your girl's got a house and she got it on a zero credit score.

Now, here's the thing. Why do you want to be right so bad? That's what I want to know. Why do you want to be right that you cannot buy a home with a zero credit score? What is that getting you? What is it getting you? I kind of like the fact that we live in a world where you don't have to bow down to the credit gods. And there's still a way for you to make a way without borrowing money from credit.

Why are you mad about that? I'm mad. Y'all got me mad. We got riled up. It's so true, Jade. We can rise above this broken system. Yes. And people just go because they've never done it.

And because there's so much baggage, there's so much shame. There's so much crap that they've had to deal with financially. They just go, well, that might work for them, but it's not going to work for me. But what's crazy about our plan is it works every time you work it. And when you become completely debt free with an emergency fund and you're patient, you save up that down payment, you make the sacrifices you need to make, you can become a homeowner without a score. Yeah.

Regardless of your skin color and where you came from and all the baggage that you come to the door with, you can win financially. You can win. But it starts when you put all that baggage aside and say, I'm going to win in spite of all that. Boom, George. And here's the thing. Here's the thing. If you want to play with debt, if you want to go and do the credit card deal, you want to do the credit card shuffle, you want to play with assets and liabilities and leverage and go ahead and go on and do that and get yourself an 800 credit score and go buy your house and have trouble sleeping at night. But for the rest of us, as for me in my house, as for me in my house, we are not going to serve these FICO gods. We are not going to do it. We are going to have our own money and our own account doing our own thing. And if you want to be mad about it, you go ahead

and be mad all day because we're going to be laughing all the way to the bank and we ain't mad about it. We want to share the good news. And with this credit score stuff, even aside from home ownership, people go, well, Jade, your insurance rates are going to be terrible. And how are you going to rent a car and a hotel? Listen, I have lived my life without the credit score using a debit card. And I even checked. I checked every major rental car company's policies. They all have a debit card. Yep. And I even checked. I checked every major rental car company's policies. They all have a debit card policy. Yes, they do. And yes, you might have a slightly higher deposit.

Yeah, you got to have a little money in your account. But aside from that, it wasn't much different than a normal process. No. And the same goes for pretty much everything. Renting an Airbnb, getting a hotel. Yeah. And car loans. That's a big one people say well

jade how am i gonna get a car loan you don't you don't get it you pay cash even fraud you know people have said well you gotta have a credit card what if you have fraud i'm like well number one i got xander to cover that and two anytime i've ever had fraud on my account they they've given me the money back it's the same thing you don't need credit cards. That's a lie. I'm done with this credit score. That's a lie from the pit. Come at me, Fico. Come at me, bro. That's what I'm talking about. When it comes to credit, George and Jade Warshaw are not playing. George Campbell and Jade Warshaw, we do not have the same last name. Hashtag debit life. I know that's right. We got that debt free lifestyle and we want that for you as well. This is The Ramsey Show.

What's up guys? You're listening to The Ramsey Show. I'm Jade Warshaw joined by George Campbell. We're taking your calls today so give us a call. The number is 888-825-5225. We're willing to discuss whatever it is that you guys want to discuss as it relates to your life and your money. We're going to take a call from Brett in Kansas City. Second one from Kansas City today. What's going on, Brett? Yeah,

so I was calling because for the past five years since my wife and I got married, we've followed the Ramsey plan and principles I got married, we've, uh, we've followed, you know, like the, the Ramsey plan and principles and everything. And we've been debt free since, uh, since we were first married all the way until, uh, we got our first mortgage. Um, but we did incur some debt

at the beginning of the last year because my wife, uh, had our first baby and had to make some, uh, for some medical reasons, we incurred some medical debt over the course of the last year because my wife had our first baby and had to make some, for some medical reasons, we incurred some medical debt over the course of the year. But from January to the end of last year, we managed to get all of that, you know, paid off or settled. and then I think it was about, oh, I don't know, halfway through the year, we got into baby step three and have just kind of got stuck there where it feels like we accumulated and we accumulated about half of our goal for the emergency fund. Um, and then it just feels like we've stalled out because, and I feel, I don't know if it's a budgeting problem I have, but it just feels like we've stalled out. And I don't know if it's a budgeting problem I have, but it just feels like every time a car breaks a little bit

or some little thing comes up, we're always dipping into the emergency fund. And so I've just been getting frustrated because we haven't – I thought we'd be closer in making more ground on the goal, and it really just feels like we've been slipping for the past couple of months. Yeah. And I'm trying to figure that out. Can I ask a couple of background questions just to kind of get an idea? How much debt did you guys pay off? So, like I said, it was kind of a mix of paying it off and also settling with the different medical establishments we had to work through. But we ended up getting rid of about $8,000 in debt. Okay. And, uh, cause you told me that you've been kind of listening to this for five years

and that you guys got debt free early on and then you had the deal with it. Yeah, we didn't have any debt when we were married and we bought two cars with cash in that time. Okay. And, you know, got our, we did get our first house. That was the first debt we incurred as a couple was getting our mortgage. Okay. What's your household income? It's about, we're kind of in between about, I think, 40 and 45,000 each year. I'm a contractor, single income household. My wife is stay at home. Okay. So what I want to encourage you is from this point on is really do these baby steps in order because I think you kind of got out of order. You guys did some of the debt, then you bought a house and then you kind of did your own thing. And I think that's why it's taking you a

while. Now with this baby step three, it's going to take as long as you let it take, you know? And so the big key for this is a budget. And it kind of sounds like you said that you're using a budget, but it doesn't sound like you guys are living, you know, swearing by this thing. It sounds like it's kind of there and maybe you follow it and maybe you don't. Am I wrong or am I right? A little bit of both. So one of the struggles for us is my income does like week to week fluctuates quite a bit being in contracting. You know, sometimes there's, it feels like there's way more than enough on a week and then there's another, you know, week things come up kind of short. So we've uh and i don't know what the best practices are for budgeting on a on a you know an income that kind of fluctuates like that but well you want to

you want to budget based on your your lowest possible month right so if you look back on the last six to eight months and you say okay like on average this this has been my lowest month then i start the budget based on that and pay as much as you can. And then all the extra money, that money goes towards the gravy of the wants within the budget. So with a regular income,

you would start with the most important things, your four walls, food, utility, housing, transportation. Then beyond that, if there's more money that month, we start moving down the list of things we got to take care of. You know, if you need to upgrade, you know know the baby needs some new clothes whatever it is and then at the very tail end is the luxuries and you may not have room for those right now with your income and where you guys are at so how much money do you have in baby step three in that emergency fund right now um as of right now, I think we have about, I think it's about 2,800 right now.

And what's your goal? Started out. The goal is, uh, 10,000. Okay. Good goal. So we're, we're about $7,000 shy. And if you, can you pick up extra work as a contractor? Um, I do a few side jobs, uh, here and there. So I do most of my work exclusively through one guy, but I'm still considered independent. But I do some side jobs on my own and I am also a licensed barber. I barber on the side as a side hustle. And maybe there's something your wife can do too.

Yeah, we've been trying to figure that. She does occasionally do a little bit of substitute teaching. Here's the thing. Here's the thing. You guys, if you're wandering through this thing, it's going to take forever. And it kind of, I'm not trying to get on you, but it sounds like you guys are kind of like, oh, if it works, we'll do it. You know, if she feels like it, she'll do it. We try to go over here and do it. You've got to decide. And I know this is not baby step two, but baby step three is equally important because you have seen that if you don't have this baby step in order and you don't have this emergency fund there, what happens? You end up going back into debt. So you've got to get this done. And honestly,

it's up to you guys how quickly you want to make this thing go. This can span out another year and a year and a half where you guys can knock this out in the next several months and have that $10,000 saved. So it's truly, truly, truly up to you, Brett. All right, George. Well, I'm making, you know, that's about 20 bucks an hour if you're making 40 grand a year. And I'm going, he's a contractor. He's good with his hands. I'm going to go be a handyman on the side and i know this because i pay these people yeah you can charge 50 to 75 or more an hour as a handyman in your neighborhood yeah my handyman said i go to people's neighborhoods some of these wealthy neighborhoods i change out a light bulb and they're happy to have me there yeah and you're you're helping

these people out so get a post in a neighborhood facebook group and say hey i'm willing and able here's my rate and do it word of mouth happens and all of a sudden you just doubled your income i just paid the man to come to the house and hang the tv on the wall i couldn't believe how much it costs all right thanks for the call brett let's take another one we got gordon in des moines iowa what's going on gordon hi how are you guys doing today we're doing great how are you doing pretty well yeah I don't know it's another day with a brand new baby oh you're in the throes okay now I understand how can we help I mean there's so much my guy is tired George he's tired a little bit but it's a happy tired good good yeah um so my question is actually quite similar to Brett, the last caller.

I am a welder working full-time 40 hours a week, well, at least. But I get paid weekly, and I'm trying to figure out how to do a monthly budget on a weekly paycheck. And in the EveryDollar app, I've separated it out into four paychecks. And I don't know. I can't quite figure it out there. And it seems like I'm losing money money somewhere so I'm making me mad well I got you it can be frustrating so you're using every dollar do you have the the premium version yes okay so on the desktop for sure um it should be on your mobile device too but there's something in there called paycheck planning and I think that's really going to be helpful for you because you're going to be able to space out and actually

like plan out when you're going to use each piece of money that you've budgeted for. Does that make sense? So each expense, you'll mark the due date and it will show you in every dollar when you would run out of money so that you can adjust, move things around, change a due date on a bill and be proactive about that. Yeah. Because when you're getting paid weekly, you've got to be smart about holding back some money, you know, and when it's time to pay. Otherwise, you're going to come up on moments where it's like,

okay, why don't I have enough to pay my car note? What's going on here? So I would suggest using that paycheck planning feature. It's only a part of every dollar premium. So if you don't have premium and you're wondering, you're like, Jade, what the heck are you talking about? You got to have the premium version. And you can literally, you're like, Jade, what the heck are you talking about? You got to have the premium version. And you can literally, like George said, plan out when you're going to

spend each line item in your budget so that you don't have to worry about not having enough money when bills are due, not overdrafting and having enough money to do the things that you need to do and that you'll want to do. This is The Ramsey Show. You're listening to The Ramsey Show. My name is Jade Warshaw. I am joined by my host, George Camel. And we are taking calls today about your life and your money. It's a free call.

That's what Dave always says, although I don't think people pay for calls these days, George. It's 888-825- We might need to start charging, Jade, if they start getting snappy with us. Junk fees. 888-825-5225. We might need to start charging, Jade, if they start getting snappy with us. Junk fees, 888-825-5225 is the number. If you want to give us a call, we're talking about anything going on in your life, your money, you're having trouble budgeting, you don't think you need to have a zero credit score, you're trying to buy a house. I mean, you name it, we're going to talk about it today. So let's go to the phone lines. We Andrew in San Francisco California what's going on Andrew hey Jay and hey George I was just laughing I hope you don't start charging for this call not this time you sound like a nice guy yeah you're a good dude

anyways I'm a big fan I've been listening for a while so thank you again for your time absolutely yeah my my question here my wife and I here, we have no kids. We live in the Bay Area, and we all know how expensive it is here. The big question that everyone asks is, like, how do we even begin to save for something like a home and retirement the next few years? Should we be thinking about moving out of California ultimately? Yeah, I'm not going to give you the details as we go forward, but that's the big question. Sure, that's a great question.

Can I ask, do you guys have any debt right now? Yeah, we do. I can list them off for you. Does that work? Yeah, sure. Okay, yeah. So the big one is going to be our student loans. It's roughly around 90K.

Okay. That's for both of us. And we're both students right now. We're both working, but both students as well. Are you currently paying cash for school or are you going into more student loan debt? I just got into student loan debt for my master's. Yeah. What's the master's in?

It's a master's in design, human computer interaction. So it'll be more than 90K when it's all said and done? No, no, that's it. Okay, okay. Okay, great. Yeah. All right, keep going down that line. Yeah, this is probably, yeah, getting close. Sorry.

So $90,000 for student loans and then $6,000 for a car loan and then $6,000 for a credit card. Okay. What's your income right now? I know you're both in school, but... Yeah, so I'm working full-time. We're both working full time and students full time. So, um, I, I make around 130 K a year plus bonus and she makes around 36 K a year. What kind of bonuses do you make?

I think, I think around 10 to 12% on that a year. Okay. And she's a caretaker, so I'm not sure if there's bonuses there. She just started again. But she's in school to be an RN. She has two years left, and I graduate this September. Cool. And you'll go straight to the workforce. Will you increase your income once you have that master's? So the idea, well, I've been working in the industry for almost four

years now. And I went back to school last year to get my master's. And so I think $130,000, yeah, it's a lot lower than probably Bay Area standards, but I'm looking to hopefully open my own thing because I do make, I have some side hustles as well. And your wife's her income is going to go up, obviously, when she becomes a registered nurse. Yeah, yeah, that's that's the plan. I think it's anywhere up from 80 to 120, whatever it is in the Bay. Right. I mean, you've got a lot of options. I think that if I were you, I would let this play out a little bit. You've got debt to pay off. And right now you've got the income to to make headway on that debt and start getting it paid off and walk through the baby steps. Now, when the time comes and you get to baby step 3B and you're saving for a down payment,

life is going to look a lot different than it does now, income wise and just the state of the world. We don't, you know, in the next two to three years, we don't know exactly what things are going to look like. But the good thing is this, the fields that you guys are in, you can do that anywhere. You don't have to be in the Bay Area if you don't want to. And ultimately, you know, you're going to make those decisions based off of where do we see ourselves? What's important? What's a priority to us? And, you know, I do think it's important to have home ownership in your future. If you truly want to build wealth, I think that's a huge part of it. And who knows, with your income, the way it's going, it may be possible for you guys,

you're going to have to buckle down, get out of this debt quickly, and really start working this plan so that when the time comes, you can afford these down payments so that you can buy real estate in that area. And if for some reason, you're not there yet, and you're like looking around the country and you're like, hey, you know, I was looking pretty good right now. You know, that's it's your prerogative. You know, I think that there's something really freeing when you kind of allow yourself the ability to make the the world in the United States your oyster. You know, you don't have to stay in the Bay Area. Yeah. These ultra high cost of living areas. You also need an ultra high income in order to survive there's no rule that says if you make you know 20

grand a year you get to live in manhattan and so the key for you guys is to understand it may feel like a long time but six years ain't that long and so if you guys start making 300 grand a year which is very possible with where you guys are headed. Well, we're going to take a year and pay off the 100 grand of debt. We can do that making 300 grand. And now we freed up all those payments. We can save up over 100 grand a year and throw it towards the down payment. And so now within five years, we have half a million dollars to put down on a million dollar condo. Who knows what it is in San Francisco. And now we have a $500,000 mortgage. We're making 300 grand and we're going to start attacking that house once we're investing.

And so it's not that far. It's not a 20 year journey, but it's also not a two year journey. That's right. How old are you guys? So map it out. Yeah, I'm sorry. How old are you guys?

I turned 30 in August and she's turned 29 in June. All right. Awesome. So we got some time here. We got some time to work this out and George made a really good point. You know, six years, it all depends on how you, you know, how you view that. It's a long time, but it's not a long time. You know what I'm saying?

Well, there's a lot of emotion wrapped up in that. Jade, I mean, six years from now, who knows what inflation will do in the housing market. Yeah. But guess what? Six years is going to be here regardless. And so I'd rather be saving up a giant pile of money versus just complaining and not doing anything about it. Absolutely the case. And, you know, just to give people some some good feeling about this. You know, I think a lot of times we think about homeownership, starting a family, all of these things. And we feel like for some reason I had to have done this in my 20s. And if I didn't if I didn't get married in my 20s, if I didn't have kids in my 20s, if I didn't buy a house in my 20s,

if I didn't start investing in my 20s, if I didn't have kids in my 20s, if I didn't buy a house in my 20s, if I didn't start investing in my 20s, then it's too late for you. And I'm like, George, if it was too late in the 20s, then I may as well give up on life because I didn't get started. Can I just tell you guys, Sam and I were married. We were married for 10 years. And then we decided to start a family. So number one, that's different because most people are popping out these babies early on. Oh, yeah, then we decided to uh Wait to buy a home because we needed to do things the right way and then we had to wait to invest We did not purchase our first home until age 35

We did not start investing until age 36 and your life isn't over. So my life is not over I was looking at the the portfolio the other day and i said this is not bad life's a lot better now than it was 10 years ago yes 15 years ago yes so the key is make progress make progress not excuses and don't let whatever somebody else is doing make you feel like you're behind because your life is your life you run your race don't look to the right don't look to the left you look straight. You run your race. Don't look to the right. Don't look to the left. You look straight ahead and run your race. Well, at your left are your friends who are broke and they just look good. And on the other side are your in-laws who are questioning why you don't give them grandkids yet and how you don't have a house because they paid $11.99 on a bushel of raspberries for their house back in 1985. And it should be easy for you too because they pulled themselves up by their

bootstraps, Jade. What? And you need to do to do this listen you've got to shut down all of that noise and put up the boundaries and you need to get laser focus on what your life is going to look like what your race is going to look like because if we start chasing after other people's marathons there is no finish line at the end there's no there's no finish line at the end and so you guys can do this you can have the life that you want you've just got to walk through the steps and do it the right way. I know he's excited to get a house. There's a lot of other folks that are excited to get a house too, but you want to do it the right way. Okay. And it matters. So let me see if I can get through this real quick. The truth is, if you're living a debt-free lifestyle, eventually you're not going to have a credit score. And we know that. And

you're going to want to buy a house and you're going to want to find a good lender like Churchill Mortgage, who can help you do manual underwriting. That's where they personally review your financial history to approve you for a mortgage. So you don't need a credit score. So if you're interested in that, you can go to ramseysolutions.com slash agent. And that's what we're talking about, George, having the life we want, doing it the right way. That's the theme this hour hour is rising above this broken system and realizing that not only is it better,

but there's so much more joy and freedom and options on the other side. And you realize, oh, I don't miss my credit score. I don't miss my credit card rewards. I don't miss having to play this stupid game that has caused me to be broke. That's all it takes is you deciding and then being about the business of doing it. I'm not trying to play these games anymore, George. I want to do broke. That's all it takes is you deciding and then being about the business of doing it. I'm not trying to play these games anymore, George. I want to do things. It's a rat maze and you feel like you won because you get the cheese, but you're stuck in a maze. And the cheese wasn't that good to begin with.

Get out of the maze. All right. That does it for today's show. Be sure to join us next time. And remember, when it comes to changing your life and your money, yeah, you can tell me that you won't do it, but you better not tell me that you can't do it because I know for a fact all things are possible with God on your side. Hey, George Campbell here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to ramsesolutions.com today to sign up for the newsletter. Again, that's ramsesolutions.com

to sign up for our weekly newsletter.