Live from the headquarters of Ramsey Silentium, broadcasting from the car rental studios. It's the Dave Ramsey. Work that is done has been a paid off home market, has taken the place of the BMW. A status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. America open phones at eight eight two five five two two five. That's triple eight eight to five five two to five. My co-host today here on the air, Ramsey personality number one, bestselling author Chris Hogan.

John is with us in Atlanta, Georgia, to start off this hour. Hey, John, welcome to The Dave Ramsey Show.

Hey, John. Hey. Hey, great man. How can we help?

So I have I have a little bit of this in trying to figure this out mentally as well. It's mathematically I mean, I'm in my mid 30s. I have about two hundred and four thousand in my retirement. That is, my dog won't or should have, but that's what I have right now. My base salary is 119 with bonus goes up to one thirty eight with my last batch of restricted stock units looking at about one fifty next year. You know, God willing, of course.

Good. So I mean, I really want to pay off the house that I'm living in. I'm going to go with or refinance right now from the 30 year FHA to a 15 year conditional. And I want to have I want to be completely debt free in the next three to four years, preferably three. But I'm just trying to find a balance between doing retirement, enjoying some of the money that I'm also making, but likewise paying off the house within a three to four years ago that I have.

What about the numbers? Oh, sorry. The house down is one thirty nine and with the refinance the morning in the closing calls it comes up to one forty six. OK, so one 140000.

OK John, what's motivating you to attack and pay off everything in the next three to four years.

To be honest, that's all whole call the situation and also just the general craziness with the economy. I mean, just like mix pockets of positive and negative. I would I would just sleep better and have peace of mind if I have nothing and. No, no. And oh, nobody. Nothing basically.

OK, do you currently anyone anything else outside of this house.

So I paid up all my consumer debt. I did seventy five thousand in seventeen months, about two two years ago with the help of the Wow.

OK and no other debts right now. Nothing. Zero. You have children. No children. OK, all right. And did you and you said you're married, right. I'm single. OK, all right.

Well you don't have to talk anybody into how far you want to sacrifice. You can just decide that. Yeah. So you can decide how much of your life you want to give up. The only variables in our formula are fixed. In your situation are you've done a great job. You're in baby step for fifteen percent of your income going into retirement.

And then the only two things fighting for the rest of the money is mortgage reduction versus lifestyle. And you can decide that I don't care. You can be as weird as you want to be.

But John, I would rather you tap in on the internal and not find that motivation, not based on anything that's going on in the world.

You're going to be more consistent in your value system and the thing that's driving you as opposed to what's happening out and how crazy the world is going to get, OK, if we cash out restricted or restricted stock options the best every few months.

OK, so you can look at all those into cash then. OK, so basically we have 150000 on our household income. If everything's going like you planned and you're putting fifteen percent away into retirement, you have your emergency fund in place, you don't have any other bills. And so I'm you. What I'm gonna do is sit down and run out three scenarios. I'm going to say if I spend if I pay off the house in three years, that's 50000 dollars a year for three years.

Right. OK, and out of my income, that's 48, that's 43 hundred dollars a month or whatever comes out, forty two hundred dollars a month.

And then I'm going to say, all right, if I do that, I've got that in my budget. That leaves me X for lifestyle. Then run the same thing out if you paid off the house and fought for years, five years, maybe even six years, maybe, maybe two, three and five and six or three, five and seven, and just look and say, OK, seven, I get this much fun. Three, I get this much fun, which is less obviously.

And look at that and go, OK, now here's the here's the neat thing. None of this is a contract. So let's say you said, all right, I'm going for the three year plan. Almost no fun. And you do the you do one year of that and you go, well, this sucks. I think I'm going for a little more fun and a new three year plan.

That's right. Yes. You can adjust it if you want.

It's your money and your collinet.

Oh, you're doing a great job, buddy. I mean, you really are you and you need to hear that, but you need to believe it.

But what my point is this for all you guys listening in for John is sometimes when I take these philosophies that are in my mind, it's like, oh, I got I got I have no life second man for three years.

But when you actually run the math out, 150000, minus 50000 for paying off the house in three years, minus 15 percent, your single guy is probably some pretty decent money left in there.

Yeah. You probably going to be like, OK, that doesn't sound like that big a strain, but you haven't really put money to it.

You've just got it in your head. Math to it, you've just got it in your head. Like this is going to be hard. That's true.

And Dave, we're not even accounting for the fact that his income is going to go up probably, you know, over the next three years. So, again, John, you find that internal motivation. I love the three numbers scenarios of you figuring out, hey, what makes sense for you? And the good thing is, is you can make the decision and remake it and change your mind if you want to preserve that. Right.

Because everything you're doing is in the smart column. So you're not going to move outside the smart column with any of these things. Good stuff. Our question today comes from Blind's dotcom.

100 percent satisfaction guarantee means even if you miss measure, if you pick the wrong color, they will replace everything for free. That's a pretty good guarantee. You get free samples, free shipping, new promos all the time. Save even more. Use the promo code. Ramsey Gressler question.

Yes. Today's question comes from Becky in Kentucky. She says, I just started a job with a public university and have a 403 B with them. I wanted to roll over my simple IRA from my former job into it, but was told the rules of the four O3b do not allow outside contributions to be rolled into it. What should I do with my simple IRA from my former job? Well, looking at this, I mean, obviously you will have a two year waiting period before you can roll it anywhere into an eligible retirement plan.

But what you mean with the simple IRA? Now you can roll that. You have to wait two years, though. I thought there was a whole lot I'm not aware of. OK, I could be wrong.

You might be right. I might be talking about I think you can do it immediately.

OK, but not all of the retirement plans allow outside funds. Then you wouldn't want them to go in there anyway. Yeah, because you're going to have better options outside of that. Right. We always recommend a direct transfer rollover from your old retirement accounts when you leave into an individual, an IRA. Right. Not to the new jobs place. So even if they would let you put it in there, we would have told you not to do it.

And so get with a smart Vesterbro. Find out if Chris is right or I'm right. If there's a two year old double, check it. But either way, go ahead and roll it as quickly as you can with a direct transfer rollover. This is the Dave Ramsey Show. As we continue to face challenging times, I hear that a lot of you have been calling Xander Insurance to see if term life plans are still available. The good news is that the insurance companies are starting to loosen up the restrictions.

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So I don't really want to tell you guys this, but some of the questions you ask us, you could Google.

Oh, that makes me feel unimportant right there.

I'm just saying I'm not necessary. You're an unnecessary hog. You know, this is scary.

So, OK, Becky, ask this question. With Blind's dotcom question going into the break, how are arguing about who's right? So during the break, we Googled it.

So make sure. Yeah, you don't need an expert when you have Google and you can't even have a good argument because you can find the answer. Right. So you can't just you just have these family arguments over the last days. Oh, yeah. Because you couldn't have you didn't have a verdict. There was no way to get a verdict.

But you get a verdict where your cell phone and five seconds strike anyway. So here's the deal. The lady has a simple IRA, which is basically a 401k with a small business is what it is.

OK, and she wanted to roll it to her new companies in her new public universities for O3b that for O3b did not allow it. But if they had, we would have told her not to do it anyway.

Always roll your old places retirement into an individual IRA.

Right, and you get with your smart Vesterbro into a direct transfer rollover. So that's Standard Ramsey advice that Hogan and I would both get Hogan pipes up and go. She's got to wait two years anyway and I'm like two years. Remember her two year? Is there a two year waiting period on the simple IRA? You know, from the time you leave your employer, the answer is no, there's not a waiting period. So I was sort of right.

But there is a two year thing right from the time that it has to at least be open for two years. So we don't know how long Becky worked that she didn't tell us. But if she worked there three years. Right. She can return immediately. Absolutely. But if she's worked there one year or are they opened it one year ago, then leave it alone. Going to be a year sitting there. Right. Then roll it. Which it's in her name anyway, because it's a simple IRA.

So it's a very the simple IRA works exactly like a 401k for your small business people. You can open it up for your employees.

You have a mandatory three percent match and it's very inexpensive, like the 401k at Ramsey with not with a thousand employees, not some employees.

I mean, I pay tens of thousands of dollars a year in administrative cost on that for a one K, but for a small business with twenty or thirty team members or two team members or whatever, the administrative cost on a simple IRA is fifteen dollars. OK, so it doesn't mean it's from an employer standpoint you do have the mandatory three percent match. I do not have a mandatory match. I imagine it a more than three percent, but I don't have to by law.

But with a simple you have to have a three percent match, but it costs you otherwise almost nothing to manage the thing.

It's called a simple IRA code for 401k for small business. Talk to one of our smart Mr. Pros and you can get one open for your team. But once it's been open two years with that individual now you can then they can roll it anytime they want.

There's not a two year waiting period from the time you leave. It's from the time it was opened yet.

So you're sort of right. Yeah. Was sort of right. That's right. Google straightened the whole dadgum mess out.

You got. We're useless. All right. James is in San Antonio. Hi, James.

Welcome to the Dave Ramsey Show. Hello, sir. How are you doing? Great, man. How can we help? OK, here's a situation. I took a early buyout at my job. They gave me fifty thousand. OK, we long story short, I paid everything except for my house. I only had thirty thousand on my house. Oh that extra money. I have 20000 left in checking or savings and one hundred twenty five. I rolled it over with Sodality and they're working on one for money for one percent.

And I won't get my retirement till I'm 65. I believe that's what they're telling me, that I'm fully blessed with my pension. I'm trying to find out what's the next step for me. You got a new job? Not yet, sir. You hold that 20000 until you get a new job because you're in the middle of a mess, other than the fact you've cleaned up a lot of mess. Way to go. Every step you've made was a good step, but you might need those 20000 dollars to buy bread and baloney until you get a job.

Yes, sir. OK, ok.

He might not buy baloney. No, he's not buying. I might be able to buy the red onion and a fresh tomato. But.

But, James, listen, Dave's describing conserve mode, OK? And so the pension might be to think of this money is just bonus. An extra. No, no, no. This is money for you to live on. So you are going to be extremely intentional with every dime until you have more money coming in.

And a consultant, in other words, when you get your job, we're going to take the 20000 and apply to wherever you are on the baby steps. So you're going to finish your emergency fund. You're going to get your retirement, going to start talking about kids college, and we're going to reach over and start paying off the house with any money left beyond that.

But today, you hold onto this money, so you get this new career that's right in place following your buyout. You might use some of those 20 for some education if you want to get some certifications or something to go into to retool, put some tools in your belt to move to the next career. Yeah. Good job, James. We need all that twenty there to make the transition into the new career when the new career is settled and the money's coming in, but then you apply it the rest of the way down the baby steps.

OK, and hold on and let's clarify this for the people out there who, again, conserve mode. If your income or hours have been cut, you are holding on to every dollar that's coming in, being very smart. Once that income is stabilized, you're going to unpause and whatever baby step you were on, the money that's sitting over in savings over and above the thousand dollars, you're now going to move it in the baby steps exactly where you are.

So in his case, he's paid off all his debt. Yeah, he's done it. I'm just talking about the people out there, Dave, that are just sitting. Yeah. You don't need twenty thousand dollars sitting in your in your baby step one fund. No, you've still got debt. You're going to unpause when your income gets stabilized and start attacking that debt just like you were before.

John is in Chicago. Hey, John, welcome to the Dave Ramsey Show. Hello. Thanks for the call. You guys. Sure. What's up in the process of trying to determine if your phone's cutting out, your phone's cut now, can you get where we can hear you?

Yeah, let me move your call, OK? I'm getting about every third word.

Oh, over here. OK.

Is this any better? Yes, sir. Yes, sir. OK, your question is what? Yes. I'm looking to make a decision on whether I should move forward and purchase my retirement home now because the market I'm looking at is it goes up. It's like almost triples in value about every three to four years. My current situation is I'm retiring in nine and a half years. I have a defined benefit pension that I'll receive that in nine years.

I also fund a Roth IRA and some other investments myself.

Is your current residence paid for? It is.

OK, how much money do you have to put on this retirement? How you going to pay cash for it? No, I'm going to put 20 percent down and I would take a mortgage on the other part, I wouldn't I'd want to look at either pay cash or I'd wait till I was ready to retire, because when I do retire, my plan is to pay cash.

But yeah, that market.

Yeah, maybe we're worried. You're talking about buying it. So dadgum wonderful.

Those are some ridiculous numbers. It's in Hawaii actually. I've been there multiple times and it's the place that I. Yeah. Which I like. I'm looking at the big island actually. It's the place I like the most. Yeah. It's beautiful.

I look at real estate, disagree and you know, I will, I will agree with you then. Yeah. The markets are absolutely outrageous. And I don't know what are you know, I don't know what we're doing.

You know, they may not make any more real estate. Actually, the big island is it's adding real estate pretty regularly, but it just has to cool off where you can live on. But but the. Oh, gosh, I. I empathize and I don't disagree with your I thought you were full of it, but you're right, the way the prices are going to go through the continue to go through the roof there, unless the political climate begins to destroy the economy, which it may, I don't know.

Some of these areas are going to be affected by the political fallout from covid more than they are actual covid. So I know why he's one of those.

It's that that's possible.

It could be another California or another New York had come. And it's beautiful. Tell you like my dad. I don't have any doubt. Yeah, I do too. OK, well, how much is how much is this property going to cost. Oh, I'm looking in the range of about three hundred and fifty thousand with me putting 20 percent down. How much do you have if you do not have three or four Dekay that you can get your hands from.

No, not to be able to put 20 percent.

I know. Do you have the money though other than I do.

Well then pay cash for it and quit calling me about this. Oh, this is the Dave Ramsey Show. Your personality, Chris Open, as my co-host today here on the Dave Ramsey Show, Open Phones of Tripoli, eight two five five two two five. Camilla is in Las Vegas. Hi, Camilla. How are you?

Hi, Dave and Chris. It's a pleasure to speak to you today.

You too. How can we help? OK, well, my husband and I are going through a divorce and we own a small business together. And I'm wondering what formula to use to split up that small business.

I'm sorry. How long you've been married? Thank you. We got married 10 years. Mm hmm. What happened? He walked he just walked out of the marriage.

So who's been running the business? Tell me how that works.

He runs the business day to day. I've worked in the business throughout the years, but he's taken over all those responsibilities in the last six months.

OK. So what do you plan to do with your life? I'm not quite sure yet, I'm working on that. We'll go to the walk out a couple, let's see, probably like three months ago. How many kids you got? Three kids, what age? Eight years old, four years old and a year and a half. So I assume over this three months, he's begun paying child support during the separation. Correct. We've had our accounts together still.

So we've been working together and have one account and just and he's living with his parents, so doesn't have any extra expenses.

So you're just using the money with the combined accounts to take care of the family. Yes. OK. All right. Do you all own anything else? Any money we own our cars and and we that's yeah, that's the only thing that we have. We don't have any money anymore. There's no return. We have yeah, we have we both have retirement accounts like fifteen thousand dollars each time. And we are home. We have a little bit of equity and probably like a hundred thousand dollars worth of equity.

And what's the home worth. It's worth about three hundred thousand dollars.

And so you owe two hundred.

Yes, a little less than that. Were you a stay at home mom or did you look outside of the home?

I was, I was working in our business, OK, but yeah. But not not a regular set time. Yeah. It changed and it changed over the years that we had the business. We've had it for five years. Right.

What is your attorney saying. I don't know. I haven't gotten their advice about it yet. OK, let me help you with this. Three months after your husband walks out, lives with his parents is too late to get an attorney.

So, you know, I have one. I just we've been trying to mediate mostly and not his attorney.

OK, that's fine.

There's nothing wrong with mediating, but you need an attorney to close and put a lid on this. And so you're not getting any legal advice at all.

I, I guess I just don't know what the right questions to ask are.

Well, the legal advice says the legal advice says that you're going to get a pile of child support from him for three little kids. And the legal advice then should say that you're getting half of everything else at least.

Yeah, OK. Yeah. So here are what's what is the net profit on the business in a year? Net profit, taxable income. What did you all pay taxes on last year?

Last year it was forty thousand dollars. OK. All right. Well, the business is probably worth between, if that's an exact figure. It's worth somewhere around four times that. So around one hundred and sixty. OK. And so if you sold the house and you took his retirement account and you got the equity out of the house and he got the business, that's probably not a bad trade.

OK, so you had 30000 thousand in retirement at that point, you got 100000 and you get your call, you get the most expensive car of the two. You're getting pretty close to half of the assets at that point. OK. And he has the business free and clear of you. And then he can run it and pay child support and maybe alimony depending on what you come up with.

Yeah, OK. And I also wanted to mention that in the beginning of 2019, we bought out a partner that we had for 30 that had 30 percent. We bought them out for ninety thousand dollars.

You overpaid? Yeah, that's what I'm getting. Yeah.

So. And you pay cash for that. I know we took out a second loan on our home to do that. OK. Oh. Has that been paid off?

We've been paying it down, but no, it's not paid off yet. That's part of the equity in the home you're getting in machinery. So that is an interesting part of the equation, you know. So what I'm trying to do is to get you half of the assets and him end up with the business because you don't want to remain in the business from the guy you're divorced from.

Right. You don't want to trust him to give you accurate numbers on the PNL know.

Yeah, he's already locked me out of all the accounts right now.

And here's the deal. He doesn't want you to get an attorney just because he's trying to get it done as cheap as possible.

And he's trying to probably I think you probably need legal counsel. Do you do?

Yeah. That's the only way you're going to get clarity and it's going to be equal and it's going to be something that you get done in the best interest of their children, not try to pick a fight.

I'm just trying to keep you from getting bullied, right?

Yeah. It's time to make the phone call, young lady. Yeah, I agree. Yes, it is. And you walk them through what you've been through and you'll they'll hear in your voice. I hear the fear and the nerves, but you're going to be OK.

And here's the last part of the equation. And this is going to add to your pain, not take away from it on the short term, but on the long term.

It's going to help you unless you're going to land a very, very serious career very quickly. Like eighty thousand dollar income or above. You're not going to be able to stay in this house.

Yeah, I'm planning to sell something cheaply.

OK, good. And then you've got to get your career started and start putting tools in your belt with that money that you get from the house. I think you get the house equity and the nicest car and all the retirement accounts and then maybe some more, OK, and then he gets the business.

That's because the business is probably worth about four times forty. So somewhere, maybe five times. So somewhere between 160 and 200 is his fortune. And if you can get everything else to add up to close to that, you're getting pretty close or have him, you know, give you 50 grand. He goes to the bank, gets it. I don't care what he does at this point. He's walking off from a wife and three kids, not going much use for him.

So, uh, man, what a mess it is.

Yeah, I think the best paying came out. The whole call, though, Chris, is what you said, that she needs an attorney. She does. And not everybody that ends a marriage is a horrible guy. It's not me Guy Bash. And so you stupid people ask me that stuff.

I don't guy bash. You know, we don't know the whole situation, but we're hearing all we've got is what she told us, the facts.

So the details. So but but yeah.

You're entitled to, I think more than it is being hinted that you're going to get. That's my opinion in listening to it.

And sometimes that just requires standing up. And that's what Chris is saying. So get some legal counsel. I would get the household, take all of that money on, take one or two cars and take all the retirement and maybe some out of business if there's unless there's some other money somewhere else.

But I tell you what, I also love the fact that if you just being straight up with her and let her know that that house can't stay so she can emotionally. You had already done it. Yeah, she she was aware. That's good. That's a good thing. But a lot of people try to hold on to a house you can't afford after divorce, keep the kids stable in the house, all the stuff. And it continues the nightmare.

Yeah, it really shortens it. Huh. This is the Dave Ramsey Show. Ramsey personality Chris Hogan is my co-host today. You're on the air, open homes for you, a triple eight eight to five five two two five. Do you remember life before you got on the planet? Money fights sleepless nights, hiding the fact that you were totally out of control. Well, thankfully for you, that's in the past now. But there are millions of people out there who are searching for help and they haven't yet taken financial peace university.

If you lead a financial peace university class and help someone else get on the plan. I can promise you this, it'll put a big smile on your face if you coordinators are normal, everyday folks help millions of people learn how to get on a budget, get out of debt, become wealthy, give with outrageous generosity. And of course, there's lots of virtual classes happening right now because we are in the land of pandemic. So lots of virtual FPU classes and you can be a virtual coordinator.

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Jennifer is in Houston, Texas. Hi, Jennifer. Your question for Chris on me.

Hi, how are you? Right. I have a question. So I my my father just passed away and I inherited roughly Seasonale that he had put aside like a half a million in debt and Access's, you know, in property and everything else and probably another three hundred and something. So my question is, is that I don't know what to do, you know, already, because I lose I lose it a wrote it, it's going to be taxed.

And then with all the seeds that he had that he got me. What to do with that.

OK, the seeds don't have any taxes. Real estate does not have any taxes. OK, there's no taxes on inherited property in an estate like he had. The only thing you're going to have taxes on, you will have taxes on the inherited IRA. When you pull it out, you are not required to pull it all out at once.

The new laws that were passed in January require you pull it out over ten years. Yep, the tenure drain, it's called.

And when you pull it out, there are no taxes on it. But there I mean, no penalties on it. But you will be taxed at your tax rate as you pull it out.

How much of that 500 is CDs and how much of its IRA in citizens is Majority City? So I would say probably about 400.

You know, any taxation on a hundred thousand dollars over ten years of time. OK, on that, IRA. No big deal. No big deal. OK, and just when you pull money, you know, each year you're going to be required to pull a tenth of it out.

So let's say it's tenth and say it's one hundred thousand dollars over ten years. Ten dollars a year. Right. And so you're going to set aside a couple of thousand bucks for taxes that year on that. Ten thousand dollars. And then you're going to do something with that. Ten thousand, you can reinvest it into something else or do whatever you're doing with your wealth, building your thing or whatever else.

Jennifer would baby step. Are you on personally right now?

Well, I'm OCD, so I you know, my critic, I don't have like ten thousand dollars in debt, OK? I don't have a car. No, I don't have a house note either. All that's paid for. But one thing I don't with my current job, I don't have a for one day. OK, all right. And then secondly, he he left the house where he actually did a transfer of beneficiary. I don't know if you saw me with that.

So I wasn't required to, like, go to the courts or anything like that. It automatically went into my name. So the house is up north in Chicago. So I'm I'm kind of debating do I sell it or do I just ran it.

But as any reason, is there any reason to keep it emotionally? No, no, not really. So sell it.

And you would never buy a rental property this 300 grand in Chicago if you lived in Houston. Right. Right. You would do other things now when you say when you say OKd, are you being serious or are you just mean your high detail?

I'm being very seriously, so I'm really paranoid about that. And buying out so am I. But I'm not OCD.

I'm OCD about that. And that's a joke. But that's not a clinical diagnosis that Dave Ramsey has got obsessive compulsive disorder. Are you I mean, what are you saying here?

Well, I mean, I just don't like it. OK. OK, good. It's like being nervous when I'm with you.

I just I don't want to give you a different giving wrong advice here because. Yeah. So you're just you're you're very conservative and you're very detail oriented. Congratulations. And so you are worthy of managing your dad's inheritance. Very well. Congratulations. That's what you're going to honor his memory with your behaviors.

Yeah, right. Right, right. You just beat up Jennifer. You want to be extremely detailed and very careful with what you do. You've got an opportunity for this inheritance to be a blessing or it can become more of a curse for you, bringing the obligation that it's bringing on. If you don't take the time to really think through and be clear on what it is you're doing. So let's just clarify. You've got a to do list here.

I've taken out a tenth of this each year right out of the IRA. The CDs are OK being able to look and understand when those mature and you've got them getting this house on the market, reach out to a real estate EOP so you can go ahead and get some guidance on it. But I want you to start to think through. You may want to even get connected with one of our financial coaches. Get over to Dave Ramsey Dotcom. I tell you what I'm going to do.

I'm going to gift you three sessions with a coach so you can have a game plan moving forward, knowing the timing of what you're going to do and when to do it. And now you get a chance to honor your dad's memory.

That's very cool. Yeah, because the thing is here, the first thing you get when you have a situation like this is the money comes at you and you go, what am I going to do with it as it comes at me? And then you go, OK, what's going to be the ten year result of this? And so you liquidate the house in Chicago, the CD starting get invested. Well, we roll the old IRA over into some good mutual funds and we begin the ten year drawing down on it.

Right. And so you just develop a game plan and we're OK. Yes, it's a blessing.

And yes, it's in these forms now. But what form does this money need to take to get me where I want to be ten years from now?

Which continues the legacy, by the way, she probably ends up being a paid for home, I hope, and upgrade. Yeah.

On our home and a car with cash. Yeah. And continues to work and to be very mindful and and then treat it like most of this money's not there.

That's right. And move on up and you'll really end up in a really, really sweet position.

Yeah. Jennifer, thank you for reaching out. Absolutely. Well done.

Open phones at eight eight two five five two two five. Abigail is in Manchester. Are Massachusetts. I'm sorry, Abigail. I'm real short on time.

Ask a question quick. Hi, Dave. Can you hear me? Yes. OK, well, how are you today? Great. Well, my husband and I are on baby steps for the summer and in the months leading up to the wedding, we saved up 10000 in our emergency fund and we saved up 40000 that we are going to use as a down payment on the house. Shortly after we were married, my husband got accepted into graduate school part time.

It's going to be paid altogether. It's going to cost 100000. His company is going to pay 75000 of it. We're going to pay 40000 out of it, out of our pocket over the next four years. And so what I'm wondering is, would we be better off to put a smaller downpayment on the house out of that 40000 and just kind of hoard about 20 percent of it put towards my husband's graduate school? Or would we be better off to not buy the house at all until he's done with graduate school so that we make sure no matter what happens, we have the cash to get him to go.

How long you make sure you have the cash to get him through grad school? More important than two years, a house. What's he studying?

He's getting his MBA, OK? And right now he works in the pharmaceutical industry. He makes about 52 a year.

OK, all right. Will you move after he finishes?

Probably not, because he'll need to stay with his company for a few years because they're paying all the graduate school. So he would have to pay them back if we left.

Well, the further you get through this, the less risk there is that you're going to end up needing the cash. And so maybe we don't say no house until after grad school. Maybe we say know how for year one and let's see where we are. If everything's feeling really strong after year one, you got one year left and you're still sitting on the 40, then you probably could go ahead on the house and you're going to be fine.

Yeah, don't let that money burn a hole in your pocket.

But I love her mindset of going to school with cash, and that's the only way to go.

It is. It really is. Don't do it. Otherwise don't do it. You get yourself into a mess. That puts us out of the Dave Ramsey Show in the books. Chris, thanks for hanging out. Thank you for having me, sir. Number one, best selling author, Chris and sitting beside me, this is the Dave Ramsey fan. And this is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey network skill.

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