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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollars Car Rental Studios, it's the Dave Ramsey Show where debt is dumb, cash is getting a paid off home mortgage. Can the police, if the BMW as the status symbol of choice, my co-host on the air today, Rachel Crooge, number one, best selling author a couple of times over, and Remzi personality, also my daughter, and she is launching today.


We are launching today. Know yourself, know your money. Her new book will be out in January. And the presales start today.


And there is the cover for you, YouTube's. We'll put it on camera for you. And the. Rachel, this will be the third best seller, without a doubt, talk about no yourself, know your money. Yeah, I was excited to to write this because I think I said in the in the first hour, but it's just true that we, you know, have spent you've spent, you know, close to 30 years. I've spent 10 years, a decade of my life helping people on how to handle money.


This is how you do it. This is how you budget. This is how you get out of debt. This is how you prepare your life for the future and get your money under control. This is how, how, how, how you become a millionaire, how you become a millionaire, all of it. And I realize, man, we only talk about the how all the time. But what if I kind of dug into the why kind of go under that foundation and figure out, OK, why do I handle money the way I do?


And that self discovery, I think, really helps people. Once you once you realize things in your life and why you are the way you are with money, you can correct bad habits. You can amplify the good habits. And you really it takes you just kind of on this fast forward course, pushes you further into life change and helps you win with money faster. And that's that's kind of the exciting part. It's kind of a different take on what we've done with money around here, Ramsey Solutions.


But it's a it's all new stuff, all new content, obviously, through this lens of the of the why asking that question. And so walking people through everything from their household, growing up to their gosh, their their dreams, their fears, their tendencies, understanding, you know, even why you save the money you save.


Why do you spend, why you spend, why do you give the way you give or if you don't give, you know, all of those questions are answered, digs in and went, you know why it not only helps you to adjust your path and make sure it adds fuel to your engine on the path you go faster. But I think the biggest thing it does is any time we know ourselves better, it helps us in all of our relationships.


Yes, particularly with money. The key one is for those of you that are married, your spouse, and for those of you who aren't married picking your spouse.


Yeah, yeah. You know, forever. Yeah. And that's a great point because the relational aspect in the book is huge. I mean, everything from understanding your parents and even how to go about talking to them, your friends, even talking about to your kids about it, but especially your spouse for sure. Like that's the one relationship, obviously, that is the closest in your life that when you're doing money, you're a team and you're working together and and how opposite people are.


I mean, and you know this if you've done you know, if you've tried the budget together, you realize, oh, well, one of you is kind of a spender, one of these kind of saver. One of you probably loves doing the budget. The other doesn't. And that's the tip of the iceberg. Like we've talked about those kind of things in the past about the free spirit in the nerd, whatever. So this kind of gets even deeper with with understanding even more, if even those tendencies, too.


And you kind of enjoy this just over the years. I mean, you like when we first did the disk, you were, you know, reading that book to you that Gary Smalley wrote The Treasure Tree, where a little kid you're like you kind of like understanding why think people do the way they do and why you do the way you do.


And they just come out.


And then I remember the first time I I was telling Ian Crawlin, he was on talking about the Enneagram last week. And I remember I said, you know, he said, well, where's the first time you heard about I said, well, I heard about one time on a trip I was on with some people. And then two weeks later we were at the lake house and Rachel was just going on and on and on because you just enjoy that, I think.


Oh, interesting. Fascinating. Oh, it's so fascinating. And they even shipyard's book Voice of the Heart. I understand the emotion. I mean, all of it. I'm like, oh, wow. It's so much the love languages. Yes. All of that stuff. I think it's just I do I think that stuff is so fascinating.


I'll give you a framework on a tool to look at yourself and go, OK, I can be a better version of that. Yes. Not a toxic version of that.


Yeah, I can be a better version of a safer a better version of a nerd or a better version of a free spirit. A more mature version. Yeah. There's an immature free spirit is just a princess, you know. But you can be a spender. I'm a spender. I'm nature spender, I'm a free spirit and I'm a nerd. But I'm an unusual mix of the two.


But that kind of stuff gives you tools to go, OK, that's what's going on. And now I can stop doing a negative behavior and enter a positive behavior and not have to change who I am.


No, absolutely. And then you do talk about the relationships in your life, but you start to have empathy for others. Right? Like the way the Enneagram kind of like enlightened me, where I was like, oh, like my husband's a five on the Enneagram, like the rarest number of anyone. And I was like, oh, can I read all the stuff about I'm like, that is so I get him now. And so, you know, hopefully that book has that same you kick back door.


Yeah, yeah, yeah, yeah. Oh yeah. Like oh I understand that now. Instigator.


Yes. Oh I didn't think of. Interesting. OK, that does make sense. Yes. So he does investigate everything he does.


Yes. Yes. And you know everything from. Yeah. But when it comes to your money that's what, that's what the book is, it's just, it's just unpacking why you handle money the way you do and what to do about it.


So it's if you want to if you want a glimpse into some of what she's talking about and what she and her research team have dug up. And it's really insightful stuff.


You can take a free. Catch that word free money quiz right now and it'll give you some insights, give you kind of a sneak preview.


Yes, Insight's will test money quiz one word, text that word money quiz to three seven eight nine to 33, seven, eight, nine. If you pre purchase the book, of course, when we launch a book around here, we always give you lots of goodies to do the pre purchase. It helps us with our marketing and helps with the presales and all of those things work together.


So if you want know yourself, know your money, discover why you handle money the way you do and what to do about it. Preorder before January 5th and you will get the book comes out January 5th.


You're not going to get it until noon, but you'll get know yourself, know your money audiobook as read by the author and know yourself. Know Your Money e-book. And an exclusive video lesson from Rachel. About 50 dollars and bonus items. The video lesson will come early. The other two items will come January the 5th because the book doesn't release until the end. And so the audio book nor the e-book will release. Until then. Dave Ramsey Dotcom is where you can get the book or Rachel Cruise Dotcom.


Be sure you do know yourself, know your money.


OK, when you were working on this, what was one of the things that you did not anticipate that you discovered and you went, oh wow, that's so interesting.


Oh, man.


I think unpacking. I think what when when learning I had was when I was doing the the fears section, I kind of unpacked six money fears and there were fears that, you know, I was that I've heard of and I've heard people talk about him. And I was kind of, you know, I jotted notes down for sure, and then I ran them through my team to you off on any of any more. And the one that kind of came the last bit, but it was so good and so true was the fear that you might want to end up like your parents and unpacking that for so many people, the people that negative money.


Yeah. And a lot of people did. And a lot of people dead. And so kind of unpacking. That was a really interesting one.


Most people are broke, so most people come from a household that had a negative money experience. Yeah. And so I don't want to end up that way. It's not like I hate my parents. No, no, no. Dishonouring. I just don't want to be broke. The subject. Yeah. That's you know yourself know your money at Dave Ramsey Dotcom or Rachel Kroos Dotcom. This is the Dave Ramsey Show. We're always looking for ways to save money, and that's why I'm a huge fan of Honey Honey is a free online shopping tool that automatically finds the best promo codes and applies them to your car.


It's so easy. It's saving more than 18 million people over two billion dollars. Shopping online ad honey on your browser today for free. Make sure they know you're part of the Ramsey tribe by going to join Honey Dotcom Ramsey. John is with us in Arrington, Virginia, Arlington, Virginia, I'm sorry. Hey, John, how are you?


I'm doing good, sir. Thank you and Mrs. Crews for helping us appreciate that. Sure. How can we help? I'm having some trouble cutting loose of some money for our new the money truck. I've know I always made plenty of money and I always spent plenty of money even better than I made it. And that's what I got myself together. And now I've got the I've got the money and I'm just having a little bit of a release it.


It's kind of hot.


How long ago was it that since you had a spending problem, probably 2007 and then, you know, about a year ago, a friend of mine got in financial jeopardy and. And I revisited a bunch of your work and I signed signed you up for the Financial Peace University and I got the every dollar budget and I had to learn how to use it so that I could help her use it. And you might find this hard to believe, but your system was better than mine.


So shocked. Shocked. I know.


If only there was a system to help people with money. You're good.


You got it. How much how much is the true cost? How much is the truck? The truck is the fortune.


Fifty six thousand dollars. It's six thousand dollars. Fifty six. Fifty six.


Fifty six thousand dollars. OK. Six thousand truck. OK. Yeah. And I think you might be familiar.


It's a it's a Ralph F 150. So you may be familiar with that.


Yeah I had one, I got a Rousch Raptor now so it's a beast man. It's a wonderful truck. All right. So what's your household income about one sixty.


OK, and you have the 56000 and how much other money do you have? What's your net worth?


I've got about seven hundred in a 401k and about seven seventy in other retirement. OK, my house is paid for, my house paid for. OK, yeah. Jonathan, what's your house worth?


A house worth about four seventy five right now.


So you're millionaire. Yes, I suppose, yeah, I don't know that, yeah. Yes, it's not a feeling, it's a minor thing. It's a math thing. It's not a feeling. Yeah, yeah.


700 plus 400 is one point one. You're a millionaire. Yes. Well done. I'm proud of you. Thank you. Thank you.


Yeah. I mean, at this point, John, we it is funny, though, because as much as we push people to sacrifice their life to get out of debt and get their money in order the moment that they have to release it and even I mean, you're much further along than even some people we talked to, but even people that are, you know, starting baby steps four through six, like we saved up money to go on a trip.


Are we OK spending a couple thousand dollars on this trip? Like, oh, you know, it really does become this weird emotional thing that you can let go of the money there, that the facts are there. And for you, you're even further along those people. I mean, your your house is paid for your good. You have the cash in the bank, your retirement's good. I mean, everything is lined up that you are 100 percent free to do this.


And it kind of takes some practice to kind of get that spending muscle back in, if you will, because it's like you haven't been using it as much.


Yeah. And what you've told yourself is no one you like extended out to everybody. No one should ever spend it on a truck.


Right. And then and now you're the guy doing it so and so. But, you know, but but the thing is, no one this broke should. All right.


So the way I analyze it nowadays is if I get ready to buy something that feels emotionally weird to me and I've got you know, I'm you know, you've got plenty of wealth. I got plenty of wealth. We're OK. We're doing good. Right.


Is I ask myself if if I if the thing without any insurance just burned down in the driveway.


What I still be OK financially. Right. Yeah, your net worth would drop point, oh, five percent. If you lost 56000 dollars, it will be nothing you wouldn't even notice it out of a million to. Right, That's right. And so that helps me always is like, you know, in other words, if I wanted to just set fire to that much money in the front yard just to watch it burn, it really wouldn't change my life.


It be kind of strange, but it wouldn't change my life, they'd question my psychology, but, you know, we take him off the family that the old man has lost it.


But yeah, but the bus no longer has a radio show, Vernon Cassiterite Yard. But, yeah, one someone's out there burning the yard again.


Yeah. But I mean, that's how I look at I look at it emotionally like that.


Have I hurt my family.


Have I been as a ratio to my situation unwise. No, because if I could just burn that much cash in the driveway and it didn't bother me, I mean it didn't, didn't affect my life, then I'm OK.


And you're in that case, dude, I mean, 56000 dollars go by your truck.


Thanks to a lot of good in that. Thank you. And I'll tell you one other thing. I there's an antidote is I always make sure that if I'm going to increase my spending, I also increase my generosity. Yes. And that just gives me emotional permission now. OK, well, well, yes, but I was also going to say it was interesting. One of the stories in the book I talk about is it's actually it was a family, friends, but that he was like, I mean, multimillionaire.


And he sold his company and then went back and started working again. And, you know, I'm talking and being like, OK, is that because you just want to be bored or whatever? And he was like, no, no, no. I just want to end up back where I was. I just want end up back where I was. And I thought, what's so interesting? Because you're fine, but it's like this this this fear of like ten million dollars.


So he's fine. Yes, totally. Totally. But that was one of the anecdotes I write about, though, is that giving aspect? It's true, because if you're that kind of tight and scared to do this, you're probably that tiny scared to give. And so, yes, I think you're exactly right. Playing off of that, though, is like as you're spending more in your lifestyle increases, so should you're giving and it kind of just like opens up your heart in all those ways.


And it's percentages. You know, if you if you're going to increase your lifestyle five percent increase, you're giving five percent.


And, you know, and when you do five percent of a lot of money, it's a lot of money. Right. So you still get to do a lot of stuff. If it's eight percent or 12 percent, it doesn't matter.


But the point is, is that you're not making fifty six thousand dollars a year and have 110000 student loan debt and call me up one, the lease of 56000, our truck, which is most of America, which is why we have a career.


Right. Right. That's normal. America is just plain straight up money, stupid. And so I've been there, too. I know what stupid looks like. I've got a Ph.D. into Unbe so I can readily recognize it. John, you've done a great job.


Very proud of you, sir. Very, very proud of you. Jessica is next. Jessica is in San Diego.


Hi, Jessica. How are you? I'm guilty of her, you better than I deserve. What's up? OK, good. OK, so my husband and I are on baby steps. OK, good. And we're looking at refinancing our home up from a 30 year to a 15 year fixed and a lower interest rate.


The. Yes, we'd be going from a three point sixty five to a two point three seven five. So my question is about your role of spending the twenty five percent of your income on the mortgage and we've done the math with our budget and if we go with a 15 year loan, would be increasing our monthly payment by six hundred, but still saving about two to three thousand each month. And the ultimate goal is to use this first home as a stepping stone to go to the next home.


That would be more of a long term investment that really, if we do the 15 year mortgage out of it, would be about twenty five percent of our gross income, but about 40 percent of our Take-Home income after taxes and insurance investment are taken out of.


OK, taxes, insurance and investments don't count in the equation, OK? You don't know that it's 25 percent of your take home pay after taxes is what amounts to. And so you would be at about 30 percent of your income on it.


Is your income on an increasing? Is your income steadily increasing?


Yeah, I would be so sure. It's not going to be there for very long. It'll be back down to 25 percent soon, right? I would hope so, yeah. Not not a big deal then. The whole point is just don't lock yourself into a situation where your house bought and you're not going to you're going to be just fine. This is the Dave Ramsey Show. One of the questions I get all the time is which life insurance company should I use for my term life policy?


Look, it can be a tough decision when there are hundreds of plans out there with rates all over the place and rip off riders. That's why the only company I use and have recommended for over 20 years is Zander Insurance. They're a broker, which means that they shop only the top plans from reputable companies that I recommend. Call them at 800 three, five, six, 42, 82, or visit Zander Dotcom for instant online quotes.


Thanks for joining us, America, Rachel Cruze, my co-host, Remzi personality number one, best selling author on the debt free stage to do a debt free scream.


Tim and Teresa are with us. Hi, guys. How are you?


Good. How are you? Welcome. Welcome.


How much have you guys paid off?


Oh, we paid off one hundred and sixty five thousand dollars. How long did this take? Two years. Oh, good for you. Where are you guys from?


We live outside of Chicago, Illinois. Oh, welcome to Tennessee.


Thank you so much. Thank you. And what was your range of income during that two year period?


It was 165 thousand to two hundred and eighteen thousand nine. What do you do for a living? So I'm a supervisor and a volunteer firefighter oil refinery and I'm an occupational therapist.


I work on faculty at a in a master's program for occupational therapy students. Very good.


Good for both of you. Well done. Thank you.


So what kind of debt was the one six five mostly student loans mine.


About 80000 of that was student loans. We had a vehicle that we bought before we realized we maybe shouldn't have and then loaned by a family member that we had to pay off as well. How much do you owe the family? Uh, 54000. Oh, yeah.


A third of this. Yeah. Yeah. Wow. That probably felt good. Yes, yes, yes. Like you said, Thanksgiving dinner will taste a lot better now that we don't know any money.


Yeah. Very nice. Very nice. Oh, my goodness. So what started this journey two years ago?


I would say, you know, Tim's family is from near where we live in Illinois. And my family, it's about 800 hundred miles away on the East Coast. And we were having a discussion about when we could afford to go back home to visit my parents and my sisters. And visiting family is really important to me. But it just with all of the kids that we have had, you know, it's a significant expense. So, you know, Tim looked at me and said, you know, if we didn't have these student loans and this debt that we have, we could go home whenever we wanted.


And it just hit me then that, you know, some of the poor choices I made in graduate school did not be as responsible with money as I should have and have accrued all those student loans. It was not just affecting me, but it's affecting my husband and then affecting my kids and their ability to go see grandma and grandpa. And so that was kind of what really made me tired of the debt and said, I've got to do something about this.


And, uh, yeah.


So that's kind of how it got started. OK. How'd you find us?


I had seen your name mentioned and some like mom groups on Facebook and here and there and I just decided to investigate. I started listening to the podcast on my commute to work a couple of times a week and then I had to convince this guy to get on board.


Oh, OK. So what did that look like? Was it. It was not easy. No, I, I, I'm terrible with money or have been in the past. He's a very, very good with money. He's a good saver. All of that. So you know, at the time we had separate bank accounts for the for the first six years of our marriage, every bank account was separate. We tried to divvy up who paid for what when we went out to dinner, we'd say, who is going to pay for this?


And we thought it was working for us, but it really wasn't. And so his attitude was kind of like that. He was good with money and I was the problem and I had to fix it myself and I had to tell him. I said, just like on a sports team, you're only as good as your weakest player. And I'll own that.


I am the weakest right now. That's fine. But I it's not just it's not an issue of me not trying hard enough. It's an issue of I need help and we need to figure out how to do this together. And so the other thing that helped was sitting down and doing the math, you know, doing the budget, showing him that it would be possible. He didn't believe it was possible in two years and the math didn't lie.


So, yeah, it's right there. Yeah. OK, that's interesting that the point about the combining your accounts, combining the idea that you're a team together, because that's the one piece I know for me that pushed back the number one push back I get.


Yeah. Oh people hate when I say you need to combine accounts, you are a team. So talk me through that side of just your marriage. And you guys like how much did that change your perspective?


There was a lot of trust that had to develop for that. And I think that was probably the most difficult thing for me because I was a saver. She was better. Right. But I think, you know, especially over time, the first couple months of it was rough. But the numbers don't lie and the trust got better and and more frequent and just it became natural. And then after that, it was OK. How fast can we do this?


Right. Yeah, right.


Do you guys feel like you have a stronger marriage today than two years ago? Two years ago. Yeah. So that's awesome. Yeah.


Yes, yeah. And I would say that, like, we just it was hard for me, like those student loans were mine. I didn't want him to feel responsible for it. But the reality was like, we have four kids. We you know, I work part time. We're trying to manage this household together, we needed to manage our money together and just accept that we were one unit. And then I think the most remarkable thing for me was to see how much power our money had combined versus separate.


That's when things started changing, as when we put it together and just had one powerful weapon to pay off this debt. And that I did. I miss here something I kind of think I heard him say. Part of what made him able to do that was he started where he started believing they could trust you.


Yeah. Yes. You became trustworthy, right? I had to show him, you know, I had.


That doesn't mean I'm not telling you to prove yourself to your husband or something like that. No, I did. But my point. I know.


But my point was it is easier for people to trust actions instead of words. Yes. And the fact that you were really doing this, you weren't just it wasn't just your latest grand scheme. Right? Exactly. You were doing it and you were actually living there.


And he goes, well, I can go with that. Right. And every month I got a little bit easier, like every month when there was money at the end of the month to put towards that every month when we didn't overspend on our budget categories and every dollar every month just kind of rolled into trust us build trust is built and this works for us. And that's how we kind of continued on. You know, we're we're good at following a system.


Once we got the system, it worked. It just was the initial convincing.


Well, both of your businesses are systems. Yeah. Your careers, your systems, people. So.


And how are the how are the kids? I see four. Yeah.


Five do in November away. Wow.


How is it doing that. Because you're you guys are you know you're being parents full time hands on little ones. All of it. How, how was that.


I'm actually thankful we did it while they were young instead of when they were older. You know, when you have young kids, a lot of time is spent at home anyway. I also think it's pretty easy to convince kids that anything is magical and exciting. You know, like Friday nights, we make pizza at home, we watch a movie together. And so Friday night pizza night is a big deal in our house. And they think it's a big deal.


And they don't know that it's a budget deal. Right.


They don't they don't know that it's partially to save money and all of that. They just think it's fun. And they have great family memories of Friday night pizza night. So I love the little things that we might be doing to save money can still be made magical and exciting for the kids. And now when they are older, we're going to be able to do stuff that costs money and they'll remember that. So what do you tell people?


The key to getting out of debt is you did it, you're successful. You paid off one hundred and sixty five thousand and two years. You're heroes.


I'm proud of you. Thank you.


So for me, I guess communication and teamwork, three said mentioned it earlier. You're only as good as your weakest link. So I think her being on the turn, I've been on the same page and doing it together help because if she was doing her own thing and I was doing my own thing, it wasn't working before, at least for me.


And I would say you just have to talk about money. You know, I was a person who would never check my bank account because I was too afraid of what it looked like and what that number would be and if I was overdrawn or not, you know, and now I went to being a person who checked every dollar regularly. And then we every Saturday after breakfast would check in and talk about money and we would have conversations monthly about the budget.


And so you just need to talk a lot about money.


Well, let's get the kids into the shot for the debt free scream. Let's get them all in there. It's Marley Flynn, Bridget and Nolan Ryan, sir. All right.


Well, there's a beautiful family, you guys. We're so proud of you. We got a copy of Chris Hogan's book for you every day, millionaires, because that's the next chapter. You're going to be there before you know it. These guys are incredible. Very well done.


Tim and Terry and the gang. One hundred and sixty five thousand paid off in two years, making one sixty five the two eighteen. Well done, countdown. Let's hear a debt free scream.


Three to one. We're debt free. Love. That is how it's done, a great family, so good to see them winning like that. This is The Dave Ramsey Show. Rachel Kroos, Remzi, personality number one, best selling author, my co-host today on The Dave Ramsey Show, Elliott is in and out there. Let me try that. Elliotts in Dallas, Texas. Hi, Elliott.


How are you? Hey, Dave. Thanks for taking the call. Sure. What's up?


So I'm getting married in May of next year. I wanted to throw out some numbers for you and see if you can help me with that potential house purchase. OK, so we make 180 combined. I'm debt free. She has about 17 debt that I'll pay all the time of the wedding in May. I'm receiving a 50 grand gift from my father towards the house. And right now I save about three grand a month of my salary alone, wanting to see kind of what range of house we would fall into.


OK, so you have 86000 dollars down, give or take? Yes, OK, maybe a little more.


I mean, you might get excited and end up with, say, 100 down as an example. So you're how much down is part of the house price equation. But then what we tell folks, Rachel, is a 15 year fixed rate and your payment being no more than 25 percent of your take home pay with the 15 year.


Yeah. And how old are you two?


Third. And she's thirty one. OK, neither one of you own a home now. No, we rent right now. OK. All right.


Yeah, there's no rush to buy a house instantaneously, so if you wanted to be married a little while, there's some wisdom in that.


I tell younger couples like, you know, the 23 year old or whatever, getting married not to buy a house in the first year because it takes a year of being married in that situation to know how close to your mother in law to buy.


I mean, you got to get to know each other, you know, but you guys are a little bit older getting married. So, you know, maybe we shorten that year down, maybe didn't take a year for you to get to know each other.


But I don't know that there's a I know there's not a law that says you have to buy a house the first month you're married.


It's a matter of fact, it might be really wise to lease for six months or something or stay in one of your two places for a period of time and just really, you know, kind of let the dust settle on the marriage before you start making a purchase decision on a home.


Because I promise you that as you get to as you go through your life, you will make different decisions on that. Right. For you and what you've experienced.


Well, I was going to just say, I mean, it's, you know, getting married. That's a transition point for sure. And anytime there is a big life transition, making a large purchase right after it sometimes is not always wise. So I think taking a deep breath. Yeah, just kind of what you were saying. I mean, just a few months to kind of get your feet under you and then look. But then you just run off the numbers and for you guys and that cash that you have may not have to go.


I mean, putting it for a down payment. But be careful to you that the mortgage lenders, sometimes they talk you up and how much house you can get because they see that cash. So making sure that you are pretty strict on what the numbers are with that formula that, you know, going in. This is the amount of house that we're going to get because they always try to talk you up.


Yeah. So your take home pay, not counting money coming out for 401k, not counting money coming out for insurance. But I'm talking about after taxes, your take home pay about 25 percent of that on a 15 year fixed rate then plus your down payment gives you your house price that you would go for. So good question. Well, this has been a wild year. It might have been a year of loss for you. It might have been a year that you've done really well.


There's all kinds of money goals people have right now, and some of them have shifted in the last few months. Some people are saying never again don't want to be there anymore.


And some people are just trying to understand how they got where they are and if you want to.


If you want to celebrate the preorder launch of Rachel Cruz's new book, Know Yourself, Know Your Money, we are giving away cash every week in August. We're in August, enter our giveaway right now and you have a chance, we're giving away 500 dollars every week this month and a grand prize of 3000 dollars at the end of August.


So anyone who enters can get exclusive deals on books, all of our products out there to help you create some lasting money. Habits go through your whole never again process. Never again will all be caught with no money and a bunch of debt when life happens like covid-19. Right.


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Caleb is in Marietta. Hi, Caleb. Welcome to The Dave Ramsey Show.


Hey, Dad, thanks for taking my call. My wife and our own baby step six, and we are aggressively trying to pay our house off. We just found out that we're expecting our first baby.


Yay! Thank you.


I know you've always talked with the baby steps that you would cause your debt snowball to save up cash for the baby. Since we're on baby step six, how aggressive should we keep paying down on the house? Or should we kind of apply that same philosophy to slowing down and saving up some cash?


You have a fully funded emergency fund. I got fifteen thousand unit. What, your household income.


Oh, gross. One thirty. One forty.


So what's fifteen thousand represent and month's number of months of expenses.


That's probably about three for us. If we cut back on expenses more so than we would not a normal day to day basis. So it's on the slimer side, you'd you'd have to cut expenses and then it's still only three, right? So it's not you don't really have a fully funded emergency fund. Well, that's always that's if we you know, I've always based it off of if one of us lost a job and now it's not, what is this, honey?


I know the circumstances emergency because here's what's happening. You're emotionally realizing that. So you're wanting to stop paying extra on the house because you realize your emergency fund short. Actually, I would love to stay aggressive, I just don't know if that's the wisest thing to do or not. Yeah, I would say, Caleb, if I was in your seat, I would probably bump up that 15000 to at least get a cushion of like four to five where life is still the same as what once and I've always said, like our family, our fully funded emergency fund, we have six months and we have it.


We're like our life doesn't really change. That much of income slows down at all. And so I would get that because the baby's on the way. So you don't have to go all the way up to six. You could say that four to five range. I think having a little bit of buffer is going to give you guys a little bit of breathing room and then going back and attacking the house. So you you won't be pausing the house for much for or putting extra on the house for a long time, just for a short time.


Get a couple of thousand more in there and then and then move on and keep paying off the house.


Yeah, I think that's. That's the way to do it, I think the emergency funds, like insomnia, beef it up a little bit and then get back to the house. But the point is, as a principle, no, you wouldn't need to stop baby step six because the baby's on the way. You wouldn't need to stop aggressively saving paying your house down if a baby's on the way. But what we discover is, is that really the emergency funds a light.


So that's that would be a reason to do that. So actually, baby wasn't on the way. I'd probably still do exactly the same thing.


Yeah. So and some people, they live a little bit more at the with the higher risk tolerance of like, oh, we'll figure it out if something happens. I think we're good. That's him. Yeah, exactly. So I would wish your wife was on the likes. I'd be curious but she would say because she may be probably the opposite was like I would like a little bit of cushion in there.


That's how I am at least. But I think it's smart to to have that again we say fully funded and again, I'd bump it up to four to five months just considering the baby.


You know, one thing you're going to say is I have never in 30 years of doing this had someone say. You know, I really wish we didn't have six months saved. It's just never come up, you know, I wish we didn't have six months of expenses saved.


Not I do. I would say I wish I didn't have 12 months. Maybe you should be investing it. You know, it's too much. But I wish you know, I have I just have too much money in savings that's just usually doesn't come off. Doesn't happen usually. Yeah.


Rachel Guerrouj, thanks for hanging out. Yes. Thanks for having James. Giles's our producer, Kelly Daniels, our associate producer and phone screener. I'm Dave Ramsey, your host.


And we'll be back. 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, it 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 Dave Ramsey Dotcom.


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Hey, it's James, producer of The Dave Ramsey Show. This episode is over, but check the episode notes for links to products and services you've heard about during this episode. Thanks for listening.