Don’t Trade Peace for Payments

**SPEAKER_1** (0:01)
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**Jade Warshaw** (0:11)
A normal is broken, common sense is weird, so we're here to help you transform your life and your money from the Ramsey Network in the FAIRWINDS Credit Union studio. This is The Ramsey Show. I'm Jade Warshaw. Next to me, George Kamel, and we will be taking your calls about your life and your money.
For the next couple of hours, 888-825-5225 is how you get on the line. We've got Daniel here who's in Orlando, Florida. Hey Daniel, how can George and I help today?

**SPEAKER_3** (0:38)
Hey guys. Thank you very much for taking my call. I'm sort of in a dilemma and would like your guidance and expertise right now. I make about $90,000 a year before tax. My wife is a second year pharmacy student, with two years left in the educational. She's not working. We have $95,000 in liquid cash, 80K saving, 15 in a brokerage account, and $40,000 in my 41K employer sponsor account. We have $26,000 in student loans. I have about 11,000 and she has about 15,000 in her student loan. We're currently living with my parents rent free, which has helped us save tremendously. We've been married for a year now.
But my wife recently has been asking for our own space, right, for the sake of our mayors. For sure. And because of that, yeah, because of that, you know, I started looking into buying a house, a 350,000 house was a 20% down. But the conflict I'm facing right now is I'm fighting hard to keep us out of debt. Just this year, I paid about $40,000 out of my pocket for her semesters of second year. So we don't continue inquiring more debt. But my dilemma is, you know, if we purchase a house and we put down 20%, that's our saving, right?
It takes 50% of my net $6,000 net take home pay on a single income. So my question is, how do we balance saving our marriage and getting her space without trapping us into a house poor nightmare?

**Jade Warshaw** (2:25)
I love that question. I think it's a fair question to ask. And I think she's in the right for wanting to have your own space. I think there's a couple of things to consider. Number one, just because you get out of your parents' house doesn't mean you have to move immediately into a home that you've purchased. The option to rent is there. And I actually don't mind that option because it does buy you some time and it buys you some money to save up the down payment that you want. Which gets me to the second option, which is you kind of arbitrarily landed on 20 percent. And my guess is you landed on that because we tend to teach that. Like there was a time where that that formula really worked out. Like hey, save up five to 20 percent down on your down payment. But we all know that the housing market has inflated to such a degree that for many folks putting 20 percent down does not allow that mortgage payment to be in a comfortable place in their budget, especially where we teach it to be 25 percent. And I think I heard you say that you bring in 90,000 a month. So how much, I'm sorry a year, how much per month is that for you?

**SPEAKER_3** (3:30)
So after tax, I would say about $6,000 in net take home pay. Hopefully, I make 90,000 a month one day.

**Jade Warshaw** (3:37)
Right. But if you do what you said you do, I mean, and this is just a guess with the property taxes and insurance. But if you do a $350,000 house at 20 percent down, just looking at the Ramsey Solutions Mortgage Calculator, you're going to be around $6,000 a month, which is fair to say, that's half of your take home. You're going to be at $3,000, yeah, a month of half of your take home.

**George Kamel** (3:59)
So I think what's happening here is we've prioritized the home above all else. And right now, it's like goal number five. So goal number one, you mentioned this. I don't want to go into any more debt.
I love that. So can you guys cash flow the rest of her school?

**SPEAKER_3** (4:14)
I think I can if I'm truly still living with my parents, right? I can pay off the school, but again, that's a trade-off. You've got a lot of cash.

**George Kamel** (4:22)
You said you have 95,000 cash and 80,000 in savings.

**SPEAKER_3** (4:26)
Correct.

**George Kamel** (4:27)
So we can use that to cash flow her schooling.