My Husband & I Disagree on Paying Off Our Student Loans (Hour 1)

January 14, 2022

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Home Buying, Debt, Education, Relationships, Saving, Budgeting

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Transcript

mhm Yeah. Mm hmm, mm hmm, mm hmm, mm hmm. Live from the headquarters of Ramsey Solutions. It's the Ramsey show where daddy's dom cash is king in the paid off home mortgage has taken the place of the BMW as the status symbol of choice, Rachel, Cruze Ramsey personality, bestselling author. My daughter is my co host today As we answer your questions about your life and your money. It's a free call at Triple 882552-5. And some say the advice is worth exactly what you pay for it. This is a show about your life, your career, your money, your work, your relationships, you and we're here to help you with all of it in this crazy, mixed up angry world out there. There's still some people out here with common sense and the good ones end up being attracted to this show. We're glad you're here. Open phones again. Triple 882552 to 5.

Adam's gonna start us off in Atlanta Georgia. Hi adam. Welcome to the Ramsey show. Hi Dave and Rachel. How are you both doing today? Great man, What's up? So my question is whether I should buy or rent. Um, so a little background, I'm currently serving in the army, getting ready to move duty stations here this summer. Um, my next assignment will be for about three years and I'm just wondering what is going to set me up in the best position to buy or rent. It's a great, great question adam. Number one. Thanks for your service.

We appreciate that. Um, everyone that serves, we greatly honor you and appreciate you. And when it comes to um buying a home and staying in something long term kind of the rule of thumb that we always uses around five years. So if you're gonna be somewhere five years and permanently stay there, then investing into a home is a great option. Um But we've talked to a lot of military folks out there that you know that that you guys in essence of what you do, that you you are moving constantly and sometimes it's it's more of a headache to own something and try to keep that going versus just renting because oftentimes it's short term, like you said, just three years. Uh So usually the rule of thumb there is is if you're there five years or longer, that's what I would recommend buying. Here's the two sides of the equation adam that you and you can run the equation for yourself. All right. What happens too many times is guys in the military, girls in the military think, oh, owning a home is always smart, Everybody should own a home. You ought to buy a house to buy a house and they buy a house in a military community where there's constant turnover and it's very difficult to sell a house because there's always a bunch of houses for sale. Also they don't always go up in value as much because there's always a bunch of houses for sale and then they end up oh well I'll just rent it and you look up at the end of your career and you've got seven rental properties in seven different cities that were former residences that you became a landlord by default. Well that we don't want you to do and you don't want to do that.

Okay. Now the times that you can buy is what Rachel's saying when you reach a point in your career or you take the type of a position in your career where you're gonna be there a little longer. It's gonna make sense even if you're there only three years there's a few times it might work and here's how you can actually do the math to make the decision. Okay. You can contact one of our LPS in the area, one of our real estate E. L. P. S. In the area. And you're looking for two things in that market. And I would go back a couple of years. Um I wouldn't I wouldn't count uh this last 12 months because they're weird In the real estate market.

But other than the last 12 months I would say what is the average appreciation rate within five or 10 miles of the area? I'm looking at? Okay And if the average appreciation rate is 3% and you're there three years you're gonna lose money when you resell you understand. But if the average appreciation rate, not counting whacked out 21. or or at the end of 20, if the average appreciation rate is 7-10, what's going to go up 30% while you're there. And you know, you could probably make money agreed. But you need to be able to resell it. And that's the second statistic you're looking for, which is D. O. M. Days on the market. What's the average days on the market?

On homes within a 10 mile radius of where I am looking, if the average days on the market is 270 that's nine freaking months, you're stuck in this house. You can't give it away. You don't buy there, you follow me. But if the average days on the market within a 10 mile radius is three days or 21 days or something like that. That's a pretty hot market. Oh by the way, you're going to see these numbers correlate if you're seeing good uh good increases in value, you're going to see short days on the market, uh, you're going to see them together. If you see long days on the market, you're going to see lower increases in value. And it literally depends on the area. I mean if you're navy and you get stationed in san Diego, you probably roll in and out of that baby and make some money. But if you're in the The plains of Kansas and there's no one within a 20 mile radius except military people, you're not going to get out of that one, You know, that's not gonna be a long-term investment for you unless you're there long term. So that's the way you can run the numbers on it and tell. But most of the time I'd say 90% of the time when you do all that you're going to discover if I'm here three years, it doesn't make sense.

And even that, I mean Whether it's, you know military or we even talked to two young couples that you know, they just newlyweds to get married, they want a house. But just the factor of owning a home and everything that it takes to keep up with that there's just a level of that responsibility. You always have to filter through when you own a home because it's it's all yours 100%. So so they're, so sometimes it's, you know, and I think within the military, I know different positions take, you know, different levels of stress for sure. But especially if you're in a stress filled, you know, role in the military, there's a part of you that's like there's a just don't yeah, it's something you have to worry about when you're renting, especially if they're going to call the landlord, you know, I don't know, there's something I like about that call the landlord and your house is broken, fix it, fix it and yeah, and then when you're done that's it. Yeah, there's something to be said for that for sure. Open phones that. Triple 88255225. Thank you for joining us. Kelly is in traverse city michigan. Hi kelly. Welcome to the Ramsey show.

Hi David, Rachel. Pleasure talking to you both you two. How can we help? My husband and I are disagreeing on what to do with his student loans. We currently Owe $17,000. We have the cash right now to pay them off. Um but we're both registered nurses here in northern Michigan. And the ceo of our hospital is implementing a retention plan which is um forgiveness for $12,000 of federal student loans. But because of the retention planet is $200 a month for the next, you know 4-5 years and I would like to just pay them off and be done with it and not have the debt hanging over our head. But my husband um thinks that taking an advantage of this free money is the smarter, it's not smarter. Your husband's wrong. So what do you do in your marriage when your husband is wrong?

Well Ellie, I'm sorry I feel for you I do. And this is hard because here's let's come back, let's come back to this. This is a good conversation. Hold on, hold on, kelly will come back, Rachel wants to Rachel wants to be reasonable. Hold on, we'll come right back with you. This is the Ramsey show. And then. Mhm. Mm hmm, mm hmm. Yeah, Yeah. Mhm folks, I don't have to tell you what your student loan debt is doing to your budget. Go to splash financial dot com slash Ramsey to see if you qualify to refinance your student loan to a lower rate.

Refinancing through splash has no refinancing fees. I'm talking no application fee, no closing costs, no early payoff fee. And if you qualify, you could get lower rates to help you get out of debt. Go to splash financial dot com slash Ramsey terms and conditions apply. Mm hmm, mm hmm. Rachel, Cruze, Ramsey personality. Bestselling author is my co host today here on the Ramsey show. We're talking with kelly in traverse city, Michigan, her hospital is offering a $12,000 forgiveness over five years. Um, and they Owe 17,000 on student loans. They have the money to pay it off. She wants to pay it off. Her husband doesn't.

What do I do was her question and I was joking with her and saying, what do you do when your husband's wrong? But um, so anyway, that's how far we got. Is that a fair summary of what you told us Kelly. Yeah. Okay. Okay. So what I was gonna say, kelly is And again, this is a little stereotypical, so it's not true, 100% of the time, but generally men tend to lean more on kind of that, that the, the logic math side a little less on the emotional side, right? Women can I feel like can naturally go there a little bit quicker than men. So when it comes to debt and and even student loans, there's this this idea that, yeah, if I can just do the math, it's gonna play out, right? So he's looking at the math, He's seeing the logic and he's thinking, yeah, I mean this is someone's gonna pay this off. This is great where you're feeling on the other end, we have the money and there's a level of of probably less stress, a level of freedom that, you know, you're going to experience when this is paid off. Um, I am I right or wrong.

Is this correct? Yes. So whenever couples do tend to disagree, especially when it comes to money, um, I think going to him because you hesitated when he said, what do you do when your husband's wrong? Uh, so I don't know how you guys do conflict. I don't know how you come to decision making. We've only been talking for about 30 seconds. But one thing I really would encourage you to do is to go to him. And and we always say tell him your why and and and that why may not make logical sense because to him he's thinking I'm gonna get free money and someone's going to pay this off and you know x, y and Z and to and to really unpack with him, you what you're seeing what you're feeling and why you want this paid off. And that could be because you don't want Your destiny in someone else's hands. We've talked about that a lot. When it comes to student loans, a lot of people depend on whether it's D. C.

or these programs and say, Hey, if you work for us, 10 years will pay it off, who knows what's gonna happen right in all this time and when you're passive and you let other people handle your future, you're letting go of really the will to go and say, I can change my life. So there could be an ownership issue that you struggled with for you, Maybe you are distressed with just having debt, Whether it was a car loan or student loan doesn't matter. You don't like having the debt. I don't know what it is for you kelly. But whatever that Y. Is of, I, I want this paid off because we have the money, go to him with that first and foremost versus blaming or being accusatory. Uh, really, when you go with that, why I think it's one of the best ways to start and open up the conversation. So that is really good council, let me give you the, let me tell you why he's wrong and maybe that'll help too. Okay if you told me they were going to pay you $12,000 as a retention bonus in 12 months. I'd go with him on it. But you're not, you're getting $200 a month, it's not spit, it's not spit that's $2400 a year. And this is dragging out forever.

And this is this is golden handcuffs and a highly volatile Covid laced vaccination world that you live in the middle of where where healthcare workers are on the front line and you don't want to be handcuffed to anything you want to keep your freedom because you may have to make some different choices. And this is golden handcuffs. Yeah right now. But the interest is 0%. So interest isn't relevant side of it, right? But when once it goes back that's $200 isn't even covering the interest. That's a good point to but it is relevant that mathematically. But here's the thing it's dragging out too long. It's the free money is not worth the trade off for the length of time. If it was a short period of time, I would I would I would throw the flag and I would argue with you that he was right, okay. But it's too long. It's drug out.

The borrower is slave to the lender and Rachel's right. There's a sense of release, there's a sense of employment, freedom of medical freedom. Your your medical freedoms aren't trapped, you've got you get to choose what happens in these. If you don't handcuff yourself to one particular situation and the trade off is not worth it here Because it's just too long. And uh, you know, the, and all of this to say five years from today, 10 years from today, which of these two decisions puts you guys in the best position, pay it off today, paying off today. And the reason it puts you in the best position is it frees you up to work wherever you freaking choose to work, that is best for you and you don't, you're not looking over your shoulder going, oh, but they got that student loan forgiveness thing, you know, and you're not, you're not handcuffed to it. Uh, and so it's golden handcuffs is what it is. And, and that's why they're doing it. By the way, it's retention and that's why they're dragging it out is to keep, to keep you in a volatile environment for healthcare workers. You guys are, you know, that that world is, has been going through medical hell. Now it's starting to go through legal and vaccination hill and there's just a huge turnover, huge problem. There's gonna be a huge shortage of healthcare workers, uh, with what's going on out there.

And it's the same thing with teachers. Same thing with policemen and uh, when the teachers, the healthcare workers and the policeman in our culture are all being mistreated at the same time. We as a culture, we've got some issues coming that are gonna be pretty and you're gonna be caught, right in the middle of that, You're gonna be caught right in the middle of that trapped by this one decision to get a little bit of free money, it ain't worth it. Kiddo. And again this is when we always say here on the show personal finances, 80% behavior, it's 20% had knowledge. The head knowledge part, the logic part that he's functioning in. There's so much more when it comes to money than just looking at just the math and so, but but when you sit in the math, that's what he's playing over and over and over his man, his math formulas wrong. My point. Okay because here's the situation, here's what's coming in her world. She's gonna have the opportunity to Raise her income by more than $12,000 by changing jobs 62 times in the next five years and she doesn't want to be trapped with this stupid little $12,000 benefit over here in that particular job. 100%. No, I hear that totally.

But again, he has to be able to get above that and look at all the options on the table. Yes, partly math. He went down, he went down the rabbit hole and got stuck down there with a little short term, a little limited vision on the math. That's my point and he's super nerd in and didn't he and miss some of the variables. Open phones at triple 88255225. Thank you for joining us. America Daniel is in L. A. Hey Daniel, Welcome to the Ramsey show. Hey how are you? Better than I deserve? How can I help?

Hey. Yeah. So my wife and I currently live in an 850 square foot house that we bought two bedroom one bath. I work from home and we have a baby on the way. Um And we were wondering if we should take money and buy or build like a accessory dwelling unit or granny flat in the back of our house. We have a little more space so that when our parents come visit, um and when I work from home there's a little more space. Might do it for work for home, but not for parents, visiting parents visiting, go to a hotel because it doesn't, the math doesn't make sense. I mean what you're going to spend there so they can spend the night eight nights a year or five nights a year. It doesn't make sense. But for you to have a place to work with the kids screaming in an 850 square foot deal. Yeah, I'm in. Okay.

So it would cost about $180,000 and we could pay cash. It's L. A. You know, it's not L. A. L. A. Has got the same construction costs. It's just the dirt under this expensive and he's already got the dirt. What are you building back there dude. Um We can maybe build like a two bedroom, two bath house, building a house. I thought you were building a little room back there.

Yeah, I think the plan would be to build like a two bedroom, two bath, you maybe over building the neighborhood, You need to look at that. That's, that's a big project. You might be better off just to move to something that's not 850 ft. This is not a renovation. This is a tear down rebuild. I mean that's a big move right there. I think it could be over building your neighborhood. You may want to just take 180 and go to a different place and live that's got the square footage altogether and nice and built in and don't overbuild your neighborhood be careful. I really think there's a chance you are. I'm gonna think about 850 ft. Yeah, it's almost one of those mini house things. This is the Ramsey show.

Yeah, mm hmm. Yeah, it's a book launch here, flip book launch week this week here at Ramsey. Baby steps millionaires is uh, selling very well. Thank you very much. We appreciate all of you picking the book up how ordinary people build extraordinary wealth and how you can too. We had an exciting event last night with Rachel Cruze George Kamal and I, uh, talking about building wealth in 2022, it was a free livestream for about 150,000 folks joined us online and then we had about 1500 in the audience. It was a lot of fun. Yes, it was, it was a great, great event, Good stuff in the lobby of Ramsey solutions on the debt free stage Brittany is with us. Hi Brittany, how are you? Hi Dave. Hi Rachel, I'm great, how are you? Better than we deserve.

I like your T shirt. I'm debt free. Thank you. I like it, I like it, I like it. Where do you live in Akron Ohio cool. Welcome to Nashville. How much debt have you paid off? 138,000 $346 dang girl, get it, get it, get it. How long did this take? 47 months, wow four years. And how much, what was your range of income during that time? I ranged from 57,000 up to 74,000.

And then Covid kind of killed the side hustles. So I ranged about 68,000 last two years. Good, good for you. What kind of debt was your 1 38? All student loans? All student loans, you gave Sallie Mae, her eviction notice, toss the old woman in the street. I like it. Good for you. Well done, Well done. I have a masters of occupational therapy, that's what you're doing, I assume. Yes, good, good for you. Okay, so tell us your story, what happened four years ago that started you on this whole journey to get out of debt.

So I just remember standing in my kitchen scrolling through facebook and my friend from high school Emily she posted about her debt and her debt free scream and I immediately messaged her and said we have to talk. So she asked me questions and um what my bank account looked like, what I was doing for retirement. And she just walked me through the baby steps and she said during your account to $1000 and stopped contributing to retirement. And the next day that's what I did, wow, coached you right up, wow. And then you just followed what she said or you got plugged into us or what? So um for christmas actually my boyfriend bought me financial peace university. Um and so I listened to you every day on the um on the podcast. Um so some days I had really long drives and I listened to you for hours. I had a five minute drive, I'm still listening to you. That's a pretty quick turnaround just from a facebook post. So up until that point were you feeling the tension of the debt? Was it like, I'm gonna have this like, was it just, what were you feeling like before that?

And then you kind of saw this ray of hope of like, oh my gosh, I can't get rid of this. Yeah, so I actually a couple of months before that signed for a mortgage and my student loan was higher than my mortgage. Um And so that was just kind of a tipping point that it was in my head like this, this is going to take me forever to pay off and then The website of your student loans is great and it shows you the chart of how much you'll actually pay off with your terms. So it was $270,000. Yes. And so I saw that and you know, in two years, um my debt getting out of grad school, my dad was $127,000. And then when I started being intentional it jumped to 138,000. So that's, it was just kind of, I'm going to have these for the next 2025 years. There's no way out of this. And then your friends post gives you a glimmer of hope and that's what you're doing for somebody today. I hope somebody's watching this debt free screen right this second and they're going wait a minute, wait a minute. It doesn't have to be this way I can get out.

I can be free. I can be free. It's hard though, isn't it? It is, it's a long four years. Yes. What was your best side hustle? Um personal training? That makes sense, occupational therapy. I bet you're a great trainer actually would know what the flip you're doing? That's cool, Good, good for you. What was the, what was the hardest part for you? Um, you know, it was really, it was a lonely journey because you have your friends going out buying stuff and or inviting you out.

Um, and then you would just watch the numbers sometimes stay stagnant. So I remember I saw the dead I was working on was $80,000 and I'm Um, but how the loans work their little tokens. So you have like the little loans in between, but you see one going down while your other ones are just kind of staying there. So I saw one lone just sit still at like $60,000 for a long time and I'm like, this is never going to go away. That is hard and it can, I mean it would feel isolating right? I mean when you're, when you are, you're, you're doing it by yourself as you're single, right? And you're like, I mean that and there's a blessing and a curse to that, right? That you, it's just you, that you've got to do it, but it's also just you that has to do it. And there's a level of intentionality that I always think when people do this on their own obviously had great, you know, you have friends around you, I hope and supported you, definitely my boyfriend levi um, he supported me a lot. He actually walked into the bathroom and saw my razor without the handle and he went to throw it away. I'm like, no, no, that's mine. And he's like, it has no handle, like it's, it's fine.

Like, so then like, the next month he like bought me razors and he's like, here, please, like, like, please, like put this in your budget. Um So he definitely was and whenever I would get to zoned in and you know, like every single quarter penny he would reel me back in and be like, it's okay, you're going to make it through this. Yeah, that's good. That's good, good balanced like, it like it well done, I'm proud of you. How's it feel to be free? Amazing. I'm just working through baby step three now and that's harder than baby step two. I know you guys say that a lot and you know, it's a few months, but it's hard because you don't have that debt anymore and you're still saving to get to it, but It feels so great that I don't have that lurking over my head. Absolutes. I mean, $138,000 is gone. That's pretty stinking incredible. Well done.

Very cool, good job, good job, good job. What do you tell people? The key to getting out of debt is you have to be intentional, you have to follow the budget. Um Dave you talk about when your wife has a feeling um I remember I had a feeling when january that I was going to come into a big expense. And I was like, okay, I'm just gonna hold all my money and see what happens. And then March came in, my car broke down and um you know, you go to different car places and they're just, you just feel slimy when you go to leave and I found a car from a reliable guy and it was the exact amount I had saved up minus my $1000 emergency fund and I was like, done did the trade, loved it. Um and then you know when you get off track, there was another morning that I'm I had an opportunity to go to paris and I was like, I can't go to paris, but um I was being torn and then the next morning I'm driving and I'm at this red light and the sweet girls like five AM calls you and says Dave, I have an opportunity to go to paris and you're yelling at her like no. And I'm sitting, I'm sitting there at the red light like, Dave knows he knows right now. And then the next month a pandemic occurred so I couldn't go anyways. Um but you know, it was just like, the universe is just kind of telling you when you're intentional, but when you're not, you can just, you know, I've had those months that um I found $100 and then it's just gone because you know, it's like, it wasn't budgeted, it was spent way to go, way to go. That's very cool. I love that.

That's a great story. So fun. Well we've got a copy of baby steps millionaires for you because for sure that's the next chapter in your story. You're amazing. You are, you're a force of nature, kiddo and also a copy of the total money makeover for you to give away and get somebody started because you never know who's gonna call you when you post this debt free scream on your facebook. You never know. So well done. I'm proud of you. Good stuff. Good stuff. Well done Brittany Akron Ohio 138,000 paid off in 47 months. Making 57 to 74.

Count it down. Let's hear a debt free scream. Okay, 321. I'm debt free. Yeah, this is how you get it done. Yeah, wow. So great Brittany congrats. This is the Ramsey show a mm hmm hmm hmm hmm hmm hmm hmm. Yeah, mm hmm. Our question of the day comes from Blinds dot com. Find out for yourself, why blinds dot com is the number one online retailer of custom window coverings. You get free samples, free shipping.

And with the new promos they run every month, you'll save even more. Here's the promo code Ramsey to get the best possible deal and today's question comes from kensi and Utah. My husband and I recently are recently married and debt free. Our household income is a bit over 100 k. We recognize that we've been blessed to be a blessing to others. So we give pretty substantially out of our income. We're very committed to our church and to giving resources to mission efforts around the world. As we talked about buying a house in the next few years, we find it difficult to plan and save when our heart, when when our heart is to give out of our abundance. How do we find a good balance of giving generously and planning for our future? That's a great question Kinsey was about to say you sound amazing. Um, well, you know, there's, there's kind of this, this way of looking at giving in two buckets. I think there's a little bit more of kind of the emotional side, right?

You, you hear of something, you're at something, someone mentions some amazing nonprofit or something and you're like, you think, okay, I just want to write a check, I just wanna give wanna give wanna give right there in the moment. And then there's a spontaneous, you know, factor. Then there's more of the planned giving where you say, okay, I'm going to really map out and look at the places that I give research them, making sure that they are legitimate, which I'm sure you guys have done with your church and your, the efforts that you're giving to with missions around the world. Um, but your strategic on the amount to that, you say, okay, here's our budget and here's what we're going to give to. So neither one necessarily is right or wrong. I think that leaning toward that plan giving the kinsey is what I would encourage you to do to say, hey, sit down and actually put numbers to what's going on, because if you are budgeting and you guys are debt free, so you're going to be able to have more margin to give, which is amazing. And to say, okay, we want to give, I don't, I don't care what it is, 2025% 10% 12% whatever you guys feel like, okay, this is a good amount for us to give and plan that and then say, okay, out of that and over budget, how much do we have to save for a down payment on a home and then just map it out over the next couple of years and see where that gets you because both are great saving up for a down payment on a home is awesome. And giving generously is amazing, but you guys need to put a little bit more detailed um planning around it so that you can make both happen instead of kind of just, it sounds a little bit on a whim. Some of your giving, um, I would be a little bit more detailed with it, but I want to reframe right now in your mind, I want to reframe your paradigm on this kenzi, because right now, in your mind, the way you described this, it's as if buying a house feels selfish, um, and, uh, counterproductive because that money could be used for generosity. And it feels like these two things are competing with each other. And I don't think that's correct. I don't think that's real.

What's real is buying a house will cause you to become wealthier than renting. If you rent your entire life, you're gonna have less money than if you buy a house, because rent goes up every year when you buy a house, the house goes up and it becomes an asset and you've stabilized and locked in your housing cost, it's not going up every year other than taxes and insurance might go up. But I mean, the, the cost of the biggest cost you have is your residence where you're, where you're gonna stay, you know, And so if you want to give more, the best way to give more is to build more wealth and stabilizing your housing cost, uh, is going to cause you to build more wealth. So they're not working against each other long term, they might be this month, Or they might be over a year while you're trying to get into the house and it's more expensive than where you are now, it might be right, then but over the course of 40 years or 30 years, owning a house is gonna cause you to be able to be more generous and so let's not, let's not frame this, that these two things are competing, but if you pan back with a long enough lens on this, you will see that buying houses going to cause you to be able to be more generous. I'll give an example, okay, I don't have a house payment, Rachel didn't have a house payment. We can be more generous than somebody that has rent. You know, it's pretty simple. So, you know, you just don't have that big hairy payment that most people have got. You know, there's a couple of $1000 in most people's budget a month or 1500 bucks a month or whatever it is in most people's budget that we don't have. And so you can, that's money, we've got that's free to invest in or to give and there's nothing unholy about planning either. Right? Because there's a little bit to the mind of man plans his ways and the Lord directs his steps, scripture says, So there's a, there's a level of being a good steward in this to kenzi of you guys sitting down and actually planning what's happening.

Yeah. And you know, I we plan our impulses. Yeah, I mean, it's, we leave some, we plan a line item in the Ramsey family Foundation budget annually to do some giving that we don't know what it is yet. And so we planned, but, and then we've got certain ministries and things that we are supporting that we very definitely lay down there, but we leave some margin in there for things that are gonna come our way that we don't know yet. And so that's planning your impulse. I mean, it's, it's kind of funny, but it's very true. That's what we do good stuff. Everyone needs health insurance if you're alive, I assume you're listening and that means you, you need health insurance, everyone needs health insurance, healthy people, high deductible plans the best way. Uh, and if you need to know more about health insurance, a place to get the best deal, you can do that with one of our health insurance. E. L. P.

S, they will shop around and get you the best possible deal and help you customize the plan to your situation. What's the best type of plan for you? H. S A P P. O. What's the best thing in your situation? They'll walk you through every bit of that Ramsey solutions dot com slash health. I'll plug you in with the health insurance. E LP Charles is in Greensboro north Carolina. Hey Charles, Welcome to the Ramsey show. Hey Dave. Thanks for taking the call Rachel.

Um, I was on the building wealth seminar last night and covered inflation, high level kind of definition there had um, question. It's a deeper advice budget wise, like on certain categories. I mean, uh, in our budget, we're seeing food go up, We can eat out less or is it a horrible time to do some home improvements, we've kind of had plans obviously cost her up our car replacement fund, I've added to that. Um Just given the cost of used cars going up so we get time to replace it. I'm gonna have a little more saved up. And um and then all that said as that kind of fits into our budget. Um I'd like to answer that is kind of the first part is there are certain areas of the budget more advantageous to change than others. And then the second part, If I run out of room anywhere else, is it a horrible time to adjust 401K. We don't have any debt, but just temporary during short term inflation. Um No, I would adjust everything before I just did that. All these other, you know, these home improvements and car replacement funds and all that stuff. That's, that's all zeroed long before you touch your 401 K.

15% going into four oh one K. It's not the time to step out of that. Uh, that's panicking or even even adjusting it down. I wouldn't, I wouldn't know. But um, I think the main thing you need to adjust for more than anything else is your, your timing on a large purchase like home improvement. You may want to wait and let building supplies and labor come down because they're both out of control right now buying a used car. If you don't have to buy a car right now. It's a horrible time to buy a car. Absolutely horrible. And uh, if you don't have to, this is not the time to buy a car. Um, I'm not, I mean, I like cars and I'm not buying a car right now, not a chance. So I'm just gonna let this like, because it's just, it's just moronic.

It's just out of control. I mean, the used car market and it's all about what we were talking about last night. It's a shortage. It's a shortage of vehicles. And so when the new mark, when the new factories get back up to speed and they're dumping new on the street like they used to and it's not a nine month waiting period for a freaking Toyota truck. How absurd. You know, but when we get the people back in the factory and we get those trucks hitting the street again or cars hitting the street again, then that's gonna loosen up the used car market. But the used car market is being driven up because the new car market has tremendous get the technology. Yeah. So there's gonna be some adjustment and it's not the time to do those two things, I would put those off the main place, you need to adjust your budget more than anything else other than timing. It's just the stuff. That's the reality.

I mean, we talked, it costs, it costs more to fill your gas tank right now. Getting food and gas Rachel drain your utility shouldn't have changed much, I'm not seeing those move much. So you just kind of look at what's the reality of my budget and just map it out. This is the Ramsey show, I have a friend or family member that needs a daily dose of Ramsey advice in their life, let them know about the Ramsey call of the day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey call of the day podcast wherever you listen to podcasts. If you're looking for fun and practical ways to save money in your everyday life, you need to check out the Rachel Cruze Show, a podcast from money expert and my daughter Rachel Cruz, Hey guys, it's Rachel Cruze and I'm so excited to tell you about my podcast, a lot of people are living paycheck to paycheck, They're in debt. They don't even know where to begin, but they have this, need this, want to get in control of their money and if that's you, you have come to the right spot. So in each episode you're gonna get a ton of inspiration and practical advice. If you're not subscribed to the Rachel Cruze show podcast, make sure you do it today. Hear more from the Ramsey network, including the Rachel Cruze show wherever you listen to podcasts. Hey, it's James producer of the Ramsey show, this episode is over, but check the episode notes for links to products and services you heard about during this episode.

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