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Chapter 1: Should we use severance to pay off our house?
Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is the Ramsey Show, where we help you win with your money, your work, and your relationships. The phone number is 888-825-5225. 888-825-5225. I'm Ken Coleman. George Campbell joins me.
This hour, we are here for you, taking your money questions and your long-term, short-term work and professional questions, because that affects your income. They all go together. I'll be here to help you with those questions. And George has got you covered on the money stuff. And here we go.
Chapter 2: Is investing in a vacation home a wise decision?
Let's get going. Chris is joining us now in Denver, Colorado. Chris, how can we help?
Hi, thank you for taking my call. I am calling to ask about paying off our house. We are on baby step four, five, and six, and my husband just lost his job about three weeks ago.
Oh, no. I'm sorry. What happened?
That is a really good question.
Chapter 3: What are the implications of living with family while saving for a down payment?
He was a paramedic for 28 years, and this came out of the blue. So we're still trying to figure out... Yeah. We're still trying to figure it all out.
Any severance at all?
A small amount. Yes.
Which would give us what that's going to cover. Is that any portion of his income?
They said it's three months.
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Chapter 4: Should I pause investing to focus on paying down my house?
He did a lot of overtime. So it doesn't, they say three months, but it's not really what he would make in three months because he worked a lot of overtime. Okay.
And are you working outside the home?
Yes. I am a teacher.
Okay. And so what is the current household income?
I make about $50,000.
All right.
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Chapter 5: What does it mean to do the baby steps backwards?
Is that enough to get you guys by?
Well, that's my question. We will not be able to pay all of it just on my income with our house payment and all the bills. I've already paused all of our retirement withdrawals and all that. So we have... We have that small settlement, and then we also have our emergency fund. But we are in the middle of a remodel project on our house.
Our son is going to college in about two weeks, and our daughter is getting married in October.
Oh, my. This is the perfect storm, isn't it, Chris?
Chapter 6: How can we manage unexpected financial challenges?
It is. It really is.
Yeah. So I'm just trying to figure out what's going to be the best for us to do. The remodel is about 75% done, but we are planning on cash flowing the rest of it, as well as what we have left on the wedding. Okay. My son has done awesome and he's got scholarships and he is prepared to hopefully pay what he will need at least for this year.
So my question is, do we use the emergency fund that we have and what we're getting from the company and do we pay off the house? Because we could, it would be really tight, but I think we can pay off the house and then my income would be able to meet our bills. What's left on the mortgage?
Chapter 7: What are the pros and cons of buying property in Italy?
I'm sorry?
What's left on the mortgage?
About $56,000. Okay.
And how much money do you think you guys would have a pile of cash once all is said and done?
It honestly depends on we haven't received the money from the company, so it depends on how much comes out in taxes. It's going to be very close to that $56,000.
I would pause. This feels like when you're going through a storm like this, I don't like making a giant financial decision. And because we don't know when he's going to have stable income, let's wait until he does and then look at the pile of money we have.
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Chapter 8: How can I balance paying off debt while planning for future investments?
And so if he has his income back, he's rocking and rolling. And now we have this pile of cash we can throw at the house.
Well, I have a quick question, Chris, and I may have misunderstood. If the $56,000, you said, would that include your emergency fund money? Yes. No, we don't want to use that.
No, no, no, no, no, no. Because you have no house payment.
Now the HVAC is out, and now we're extra screwed. You see where we're going here?
Okay, yeah.
That emergency fund is for an emergency. Now, let's be clear. Him losing his job feels like an emergency.
Yes.
I know. I know. And I do not want in any way to minimize that, okay? Because the research shows, the psychology research shows, George, that losing a job has the same traumatic impact as losing a loved one, okay? So I feel bad for your husband, too, especially the way you answered that question. We're not even quite sure what's going on.
I didn't want to dig into that because, frankly, it doesn't matter. But That emergency fund must stay in place for emergencies. He's got a little bit of breathing room. Does he have three months of breathing room? You said maybe not. But he's got a couple of months. He's also a paramedic, an experienced paramedic. My guess is he's got some options. True or false?
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