Why Can't I Buy A House While Paying Off Debt?

[Music] thanks for joining us America it's a free call a triple eight eight two five five two two five Peter is with us in Charleston South Carolina i Peter how are you hi there thanks for taking my call hello I I am recently married about five months ago I got married and we came into the math thank you we came into the marriage with $5,000 credit card a $10,000 credit card both on me and then seventy thousand dollars in student debt now we use our wedding money and tax refund to pay off the five thousand dollar credit card good and then we had about ten thousand dollars saved up and we were just about to put that down for a down payment on a house and then at the last moment it killed us but we instead paid off the other credit card which was the right citizen but you know obviously it hurt and so recently now we've really started to try to attack the student debt good and we've been using me every dollar budget app to do that good now we currently live in a one-bedroom apartment and again we were about to buy a house but we didn't so we read up to one more year on our apartment and it's you know I it's horrible living in this apartment but you know I do want to get out but you know but we're willing to go another year and so my question is you know at what point should we be looking to maybe start saving for a down payment on a house is it once we finally pay it off all of the student loan or should it be a little bit earlier because you know I look at we bring in our gross incomes 118 thousand our Nets about eighty and so we're putting half of our monthly income towards the student debt which is about three thousand dollars cut out a lot already and even doing that it's going to take twenty four months to fully pay this off and then you know after that twenty four months we won't have any money for a down payment yet so we'll have to go another full year and you know three years and the single bedroom apartments just kind of you know a very a feeling that doesn't feel too good how old are you I'm 20 I'll be 24 and in a few days and she's 25 okay the the 38 year old version of you will be very happy with the 27 year old version of you that saved up and with student loan debt free and then saved up and bought a house it feels like crap now but three years of the scope of your life is not much you're gonna be fine this is how people that are mature do things adults devise a plan and follow it children do what feels good if you want to change rentals that's fine but don't buy a home until you get the student loan paid off why are you only taking home a D if you make a hundred and twenty you pick on me because I'm receiving for retirement I have a stop or I'm I mean stop it okay alright you're trying to do three or four things at one time you're in a hurry okay and what we found that for 30 years of teaching people how to handle money the people that went with money focus on one thing and killing then they move to the next thing and kill it then they move to the next thing and kill it and that's the ones that win when you try to do six things at once it ends up nothing gets done because all of your mathematical power gets diluted I also suspect that you're that you've probably over withholding I think you got too much coming out your check for taxes I personal I think I might I I think I come out as out a little bit more too much withholding it and she comes a little bit under but because I make more I think it does wind up we do get a pretty sizable tax refund a sizable tax refunds means you're over withholding okay that's the definition up one more allowance on that okay well no more than that what was your tax reform tax reform last year was about five thousand dollars but I had a pretty good few credits to go along with it and because I was single for most of the year and then got married at the end I was able to claim married for the whole year so mm-hmm that had a pretty good view okay so what you may want to do because everything's new in your tax situation because now you're married and you have the combined income and you'll be doing married filing jointly you may want to sit down with the tax pro and actually calculate what your taxes will be for eighteen and let's adjust your withholding to that amount I think you're over withholding in excess of $5,000 is what I think I'm hearing okay as a couple as a couple right now okay right and so because 118 should not be 80 take-home pay even with a 401 K deduction right it's too far down that's the math I'm doing and done this a couple times so anyway that that that's I think what we're going to do is bring home another $20,000 a year with this discussion you and I are having okay that'll change things a lot yeah there we go I see and a customer 100% focusing on kicking Sally maze but there's not room for that woman in a one-bedroom apartment she's got to go knock her butt in the street she gets her eviction notice because I want you out of that apartment as bad as you want out of the apartment then we're going to build an emergency fund of three to six months of expenses maybe fifteen grand in your case just for rainy days then you save up your down payment and you're gonna do all of that in under thirty six months but I don't know how far under it's probably going to be between 24 and 36 months then when you buy a home you got no payments in the world you got 15 grand in the bank when you move in and Murphy will not move in your spare bedroom if you buy a home while you're broke all crap is gonna break loose everything that can go wrong will your life will look like a country song you are inviting trouble and that's how life works man it is when you're broke you invite trouble you know what I'm talking about yep absolutely seen it a few times already I'm beyond but I've seen it yeah I think you're sharp dude man what do you do for a living okay I thought you had a good mind you got good critical thinking skills talking to you so good I think you did a good job man so hang on I'm gonna send you a copy of the book the Total Money Makeover which is gonna walk you through why I did what I did here and it gives you more than a radio answer and since you're a software developer you'll see the flow chart you'll see the process that I'm doing when you see the whole thing in a holistic sense then it'll click and you'll go oh okay he's not as crazy as I thought he was okay awesome thank you so much dad I appreciate it hang on Kelly I'll pick up will send you the Total Money Makeover

Channel: The Ramsey Show Highlights

Views: 396,182

Keywords: the dave ramsey show, dave ramsey, ramsey, debt, buying a house dave ramsey, mortgage, buy a house, buy, Why Can't I Buy A House While Paying Off Debt?, home, real estate, money, buying a house tips, How to Buy a House, buying house, dave ramsey home buying, how to buy house, buying a home, how to inspect a house, house, what to look for in a home, first time home buyer, home buying, when should i buy a house, buying a house, The Best Way To Buy A House - Dave Ramsey Rant

Id: cpoMbSMn4F8

Length: 6min 54sec (414 seconds)

Published: Wed Apr 11 2018