Drain Savings to Pay Off My House?

[@calebdoner]

As soon as you pay off your mortgage, you don't need nearly as big of an emergency fund, because your monthly expenses go way down.

[@dbf70]

But new mainlines cost the same LOL😅

[@hampuskarrlander7492]

There's only two real consistent things in this world: 1. Taxes. 2. Dave doing better than he deserves.

[@LittleMopeHead]

Taxes is theft.

[@TreuNorthExplorers]

I’ve always wanted to ask Dave, “Why is that?” When he says ‘better than I deserve’

[@noconsentgiven]

Lol this is the best one so far😂😂☝️.

[@hampuskarrlander7492]

@@pn9959 oh, we still lie, but Dave and taxes are just a little more consistent ;)

[@jessvagnar4957]

@@LittleMopeHead Your education was theft!

[@dt93]

It's refreshing to not hear a stupid question every once in a while. This is a good one. Caller was prepared, did his homework, and was in a good spot. Good job, man.

[@PS_on_youtube]

It's more refreshing to hear the caller doesn't make $300k+ per year like the majority of Dave's callers.

[@triad6425]

@@PS_on_youtube definitely not the majority.

[@JD2jr.]

@@triad6425 Well, they make either 300k+ or just 300.

[@MouseRata]

Right?!

[@freedomworks3976]

Yes true. Dave is personal finance 101.

[@tnddiving6166]

We owed 119,000 on the house. We had 120,000 in the bank. I knew what we had coming in. We took the leap and the sky was the limit! Congratulations dude!!!

[@Wolf-rc1tf]

How’s the situation now? I’m getting closer to that situation with 100k in the bank and 172k left on the house.

[@hobt1234]

@@Wolf-rc1tf why not recast your loan? it will only help you pay off your house faster with paying less interest

[@Wolf-rc1tf]

@@hobt1234 I’m not familiar with that term recast?

[@h.e6604]

@@Wolf-rc1tf think they meant refinance

[@nathalielady2592]

I will probably put 70K toward the principle and keep 50K for emergency.

[@kim-o-san]

Jamie asked exactly what I was thinking. But I risked it since both me and my wife have our jobs. Paid off my mortgage yesterday. Going to build my emergency fund back up by end of 2020. Love ya Papa Dave.

[@judymckee5992]

That is smart, huge savings sitting in the bank makes me uncomfortable.

[@Yummy2u]

Congrats.... I will be paying my mortgage off by the end of next week!

[@kim-o-san]

@@judymckee5992 I have disobey Papa Dave once and lived to regret it. The only reason why I can blow away my emergency fund now is coz my wife is also working and we have no debt.

[@f.-j.j.5738]

Please be dedicated in building it back. Many blessings!

[@kim-o-san]

@@f.-j.j.5738 Thank you. That's my "gazelle intense" target for now. Peace

[@cheezybred]

Right now or next year, it doesn’t matter. He will be alright regardless. Paid for house and no debts making 60-70 is a good place to be.

[@sami-9233]

65 k is nothing when you really think about it not with this inflationary environment

[@Mrtkm]

Sami - It’s not a lot if you were to pay rent/mortgage but it’s a lot when your biggest expense is eliminated

[@LG123ABC]

@@Mrtkm I still have to set aside $500/month just to cover property taxes and insurance even though the house is paid for so you're never really truly free. And that doesn't even include maintenance!

[@Mrtkm]

Lyle G Oh yea that’s true, you’re never free. But it sure does give a big relief. If you didn’t own your house how much would you be paying for rent where you live?

[@cheezybred]

Paid for car / home, no debt. 65k is plenty to live on in Sarasota FL. It all comes down to living below your means and being content.

[@ryant2568]

having that 3-6 month reserve of funds just makes a world of difference to your state of mind knowing that you are not living paycheck-to-paycheck and that if life happens you have the funds there to deal with it.

[@todd2456]

Use half of it and get the balance to $15K ish. Then save the $2K each month to pay it off. This close to the end of your mortgage, you are hardly paying any interest.

[@todd2456]

@John Adamsct No one likes you little Johnny. Get lost.

[@thecurrentmoment]

When I'm faced with a financial dilemma because I'm thinking "should I do this or should I do that?" I often find the answer is "I can do a bit of both"

[@SwimmingintheDeep]

About exactly what I was going to post. Little John here in the comments does not get that the mortgage company only charges interest on the OUTSTANDING amount. As soon as he puts down 15K he'd cut the interest per month he's paying in half. Then put down another 5K later and then pay it off yet again later....maybe by Dec 31.

[@todd2456]

@John Adamsct speaking of moms. They used to call them jumpolines until yours got on one in '79

[@vascularlab]

I agree with Todd. Interest rates decrease with the term of the mortgage, the payments on £15k will be minimal.

[@DaveMcTKD]

So then why not send them $20,000 NOW, then send extra each month for the next two months ?

[@dinac6250]

You won’t pay interest

[@dinac6250]

So you will save money

[@twincherry4958]

Toward principal left

[@RobynElms]

This was exactly what I was thinking, especially if mortgage interest is calculated daily..

[@ginaredscott4602]

This is exactly what I thought too!! Thanks for saying it Dave McDonald ....

[@jsboening]

We paid off the mortgage in our cottage this month. It took a few days for it to set in. Now we are going to try to pay off our house in the next 12-18 months. Can’t wait.

[@DandyFinance]

Dave said it at the end, the emergency fund is there for exactly one reason - emergency, unexpected expenses. So I would stay the course, keep the fund, but also keep the peace of mind. He can finish with the loan next year. Thanks for sharing!

[@engrpiman]

I second the guy that said stuff happens with you have a baby. I have a 3 yr old and during the 3 years. My appliances went out, my roof started leaking and I had to replace the hvac and water heater. If that was not enough wife went to the ER. I survived. Not sure how but I survived debt free.

[@sherrieludwig508]

Your guardian angel needs a vacation, LOL. Yeah, in getting to our debt-free scream, we had a few Murphy moments, some of them months-long.

[@staceystrukel1917]

Yeah, it's the babies fault, not old appliances.

[@JDHopeful]

@@staceystrukel1917 I didn’t take it as it being the kid’s fault. I generally have the position that you’re less willing to live without certain things when you’re subjecting a kid to those choices too. I know if I had kids, I’d have a much lower threshold for dealing with a broken stove and only having a microwave or not having a working washer than if it were just myself and my wife. Me and my wife can live off of microwave food or take turns going to the laundromat as needed but if only one is as home and you have a sick kid, it’s not reasonable to cart them off to the laundromat before they close while they’re sick. Guess It just seems more pressing when you have kids then if there’s only adults in the house.

[@---cr8nw]

Focus on the finish line, not the hurdles. When you get to the finish line, look back at how high the hurdles were. You'll be amazed. You might even see some hurdles that you don't remember jumping.

[@jusplay7309]

Sounds familiar. 2020 threw some curve balls for sure. Year started of with heater dying in freezing middle of Jan, had a spring baby in middle of pandemic and then work ended up cutting pay, early summer rolls around and storm drops tree and took out roof, in the fall transmission choose to quit on us then water well pump went out. Finally winter and preparing for holidays and mother in law gets seriously ill. So glad 2020 is over but 2021 is already gearing up to be a stellar year

[@canceraxe1447]

This is a good call. Watching Dave’s video, I paid off 8K debt in 2 month. Now working on to save emergency fund. I’m avoiding any use of credit cards and use debit mostly. Coffee, tea or cigarettes addictions are gone because it’s expensive 😀. Life feels so good when you have no debts!

[@dinac6250]

Absolutely,I think more people should try it

[@capnskiddies]

Coffee and tea are not expensive. €25 a month. But I hate getting coffee out, I find it burnt most times. Cigarettes, yeah deffo. €10 a day.

[@canceraxe1447]

capnskiddies ya bro it’s best we don’t use nerve stimulant substances. 😊

[@justinc2633]

​@@canceraxe1447 I've never bothered drinking coffee, i figured id rather invest the $2 a day and retire with another $200k lol. Besides, I feel like at some point coffee and other stimulants would have no effect on you unless you *stop* drinking it, which is very ironic.

[@loft27ss]

Cigarettes cost 29$ in Australia , healthy nation😊

[@IreneZGoodman]

Hold on to three months of emergency fund, then use the rest of pay off the mortgage. Whatever's left on the mortgage just pay it down.

[@gamerschannel9610]

Pay 23k and keep 10k for emergency fund.

[@insideoutsideupsidedown2218]

Gamers Club good idea aswell...

[@tendrams]

Yup....or split the difference. 16k and 16k. This is, to some degree dependent upon what the mortgage payment is as well. If his payment on that house is between $1800 and $2500 a month, paying it off with $33K means a pretty healthy increase in the amount he can save over just a few months to replenish the emergency fund.

[@EadsB7002]

10k just isn't a very good emergency fund for a family with a small child and spouse who doesn't work (no other source of income). Quite risky!

[@teresaevans4840]

Smart 🤓

[@loft27ss]

When you pay off the loan, then with no mortgage repayments he builds up the emergency fund quickly.

[@ezmealstravels9221]

I'd pay it off in a heartbeat. At least he'd have a roof over his family's head (paid for home) the rest you can deal with. Plus he has a job. God bless 🙏🌹

[@GruncleJohn]

This topic is a blessing for me today. I’m exactly in the same boat. I’m just older, and I have a little bit more liquid asset, same mortgage I owe. Thanks and God bless Dave

[@daveramsey2552]

Wow! I didnt believe they really work, I thought my sister was just ranting about how fast Gina got her credit fixed lol. Thats really nice, I'll definitely check them out now.

[@xxpowwowbluexx]

Check out The Money Guy show.

[@foxdays]

Thanks for your work, Dave! Someone totalled our car, and we were this close 👌🏽 to financing one. Then we sat down together, asked ourselves „what would Dave tell us to do?“, we revised our budget and pid cash for the car 👍🏽

[@teresaevans4840]

So smart 🤓

[@marcusj97]

I drained savings (not 401k), and paid off my house early. I'm single with no kids though and make decent money for my area. In my case i 100% wanted my house paid for. Yes life could happen, but life can also happen to where I'd much rather have a paid off house than anything. ZERO debt is life.

[@paulstandaert2042]

I did exactly what this guy is contemplating this year. Murphy loses a lot of her powers when you don't have any debt. I figured that the worst case scenario is that I have to, dare I say, resort to the credit card for a bit. The money flows back into the bank account quite quickly without a mortgage to pay. I say do it. 2020 has been one of the best years for me financially. The downside? I have to remember to pay my property taxes on my own now.

[@paulstandaert2042]

And I may also add that there are a lot of jobs out there right now. If I lost my job, I could go stock shelves at Walmart at a low wage and get by reasonably well without having to pay for a roof over my head.

[@spankynater4242]

That was my exact line of thinking when I did this 10 years ago.

[@darrelllee2107]

I am in the same boat as Jamie (minus the baby) with close to the same numbers so I am going to follow the same advice! What a way to bring in the new year! I have been debating just using my savings to wipe it out but I can wait until then and at least have a few thousand saved. Great idea!

[@Alexander-vl1lg]

I love Dave and Graham. A lot can be learned from Daves advice of getting out of debt and from Grahams advice on living a frugal life.

[@gregcvmpbell]

Put up some. I would probably put 15-20k to principle. That way emergency fund isnt fully depleted then you can build it back up

[@hollyb6885]

I was just gonna say the same thing. 👍

[@lebanonlouise]

He never mentioned what his wife’s opinion is. Dave should have asked.

[@Heywoodthepeckerwood]

Nope

[@loft27ss]

The results being smoothly on the track- it tell me is was a team work with his wife😊

[@firststreetbarbershop3326]

Paid off my house a few years ago 100% debt free since thanks to that I’ve been able to stay home with my toddler for the first year and a half only working a couple days a week theres no better feeling than bonding with your kid at that stage in his life.

[@ToOpen6seven]

Amen!!

[@GruncleJohn]

“Freakin dumpster fire! “ I love it!

[@CaseyBurnsInvesting]

Patience friend. You’re almost there.

[@letty4558]

This guy is on track, he has his stuff together.

[@curly437]

Good segment BUT your emergency fund has changed drastically the moment you paid off the mortgage. The mortgage is usually the hugest part of your emergency fund if not THEE biggest. Your emergency fund can be cut down for a few months as you rebuild your it and your savings. So, if you have 15k in emergency, to use 10k to put the final nail in the mortgage coffin, that's ok. Because if there was emergency during this time, no mortgage payment would have to be made.

[@mikestevens2053]

I think having an ample emergency fund makes for better long-term decision making. It takes a lot of the immediate stress out of the equation, allowing for a more "big-picture" orientation.

[@Justin1020304]

Husband: the baby is a year and a half Wife: the baby is 16 months and 13 1/2 days !

[@That-Wanderer]

I hate when girls do that... 🤦🏻‍♀️

[@jordanbaldi2832]

@@That-Wanderer lol

[@rdb0819]

Facts!! 🤣

[@Thisnthatwitholivia]

🤣🤣😂😂

[@ericson0504]

It actually makes sense that it's spoken that way. A 13 month 1 year old and a 22 month 1 year old are both one. But developmentally its an enormous difference. One is a baby and one is a toddler. Now, anyone who says "months" after the age of two, judge wholeheartedly. 😂 But saying months between 12-22 months makes sense.

[@cherylnielson4710]

Did Dave ever understand that simply moving his wife's work (child-care, cooking, cleaning, etc. 24-7) from their home to their "vacation cabin" did not give her a vacation? Didn't sound like it.

[@YPEFFLE]

Right!

[@suen5006]

He should have sent her away to a friend's overnight - doesn't have to be expensive, just a break from the child care and cooking for a night was what she wanted.

[@turdfurgason8476]

Can't really put your kids in dog cages, right? Have a pizza night and use paper plates.

[@gehmangang8006]

I cannot wait to be in his shoes!

[@sarahs.9292]

I was so thankful for BS1 when my AC broke over summer in July NC. SO thankful.

[@imjustplayinwithya9034]

Great advice - I’m in the same situation right now. Really helpfull. Cheers from Poland!

[@chiquicat1]

Paying off the house is like having a massive pay rise, definitely worth it but have your emergency fund there first. David rocks.

[@dinac6250]

Absolutely

[@Yoyomanmanholla]

When you have the paycheck to paycheck mentality, then yes

[@TheHales]

I have this same thought process having the money in the savings knowing you could pay it off ASAP seems logic. Not everyone is blessed to have extra money to float around.

[@zachdarr7605]

Wow, a called that's actually in the same situation I am. 30k owed on the house, 30k in savings.

[@ldtriton]

I agree with Dave... Don't want to get hit by something unexpected as soon as you wipe out your savings. 3 more months won't hurt anything. In addition and to fine tune the math, he probably would be somewhere around $10K by New Years Eve since he's still paying the mortgage for the next 3 months. (Assuming his mortgage is at least $1200 a month)

[@mikesawyer4707]

Where do we turn? Who do we pay off first? I am 65, and in a large slice of dept. I will not file for bankcupsy. That will not happen. Pray for me. Thank you.

[@carlososante7748]

Hello Mike Sawyer, I am a single father of 3 daughters and I found a home to purchase for my family but due to my low credit score I don`t qualify for FHA loan. I saw review about Gina and decided contact her, Then I gave her the info she requested for her to get the credit fixed. She helped raise my credit score to 780 and She also deleted negative collections items on my credit report within 72 hours. I finally approved for the FHA loan and I was able to buy the house. Contact G I N A - @ - creditmasterfixLLC Dot CoM

[@emailadmin6811]

Mike, Gina also helped me.... You can just go to her website on CREDITMASTERFIXLLC,COM and see things for yourself

[@daveramsey2552]

Wow! I didnt believe they really work, I thought my sister was just ranting about how fast Gina got her credit fixed lol. Thats really nice, I'll definitely check them out now.

[@ryankiel4895]

Call Dave Ramsey to get a financial coach and help you !

[@bluegillmich]

I might drop 20k on the house, hold the rest for now. It could take 2 more years, relax - you got this.

[@jpdst29]

This was an excellent call. I was wondering the exact same thing. Too nervous to drain my savings just to pay off my house. It’s a nice feeling to have that money available for any unforeseen emergencies. Edit: on another note, this guy must really be living below his means to be able to save $2000 a month while only having a household income of 60 K. Especially having a newborn.

[@Gio-nl7eg]

I thought the same thing, that’s some crazy savings for his circumstance

[@spankynater4242]

I would have, and I actually have, drained my savings to pay off my mortgage, zero regrets.

[@jpdst29]

@@spankynater4242I actually am going to do the same thing. The security of knowing that even if I got into financial trouble, they wouldn’t be able to take my house is comforting.

[@Candisa]

I'm actually surprised at what most people I hear on this show are spending. Saving 2k a month on a 60k a year income still is a 3k per month income. With no payments other than a low mortgage, and a healthy dose of frugality that's plenty.

[@MichaelJanzer]

What a way to look at this terrible year! Good job!

[@BeoXify]

I've always wondered do the callers know when Dave mutes them? Or do they just keep talking even though no one can hear them

[@BrendanEvan]

The better of 2 good options. These are the problems I want.

[@BryceJohnson88]

25k left on my house! Wife and I make 170k. 2020 should be a great year! Should be done by Jan1

[@EadsB7002]

THIS is an actual scenario where i'd say yeah...go for it! Congrats! This caller makes 60-70k and is considering draining their only savings to pay off house (and is the only source of income, i take it). Just not wise.

[@jordanmcconnell3409]

Bryce, did you end up killing the mortgage?

[@BryceJohnson88]

@@jordanmcconnell3409 I did!!!! We paid it off on new years eve! Best way to end 2020

[@coldsoup8958]

@@BryceJohnson88 Tell me what it's like. You know, to not have a mortgage payment due.. I'll be there on September 1st, 2024, God willing.

[@BryceJohnson88]

@@coldsoup8958 it's feels amazing! You don't even have to think about it. All my money stays in my account. Saving money like crazy bud. Keep it up. Soooo worth it

[@user-tz5uq2bt1s]

When I was in debt on my car I paid that off so aggressively my bank account was always empty so I understand this guy's perspective. Anything unexpected comes up and you struggle bad. I personally paid off the 72 month loan in 26 months and learned a valuable lesson. Just save up next time so you don't have to worry about the debt.

[@Candisa]

Most people can't just save up for a house. Even the 20% down 15yr mortgage Ramsey preaches is way to aggressive for a first home if that means you have to waste rent money to get there. There's nothing wrong with getting a 30yr mortgage with a lower downpayment for a first home as long as you don't keep it as a pet of 30 years (or even if you do and invest). OTOH a 15 year mortgage with only 20% down isn't agressive enough to move. I took a 25yr mortgage with only the fees coming out of my pocket that I'll hopefully pay back in about 17yrs total, totally happy with that (no other debt, emergency fund in place, saving a bit), but if I ever move it'll be 100% cash or with a very short and very low mortgage.

[@2legit2Kwit]

Dave’s smile when he said he has enough to pay it off was so cute!

[@fortunatototti8292]

Nothing cute about Dave.

[@insideoutsideupsidedown2218]

Keep the 35k in the bank. The house is going nowhere. You are almost there. Save up like you said 2k a month for the next 6 months and then drop the mortgage into the paid for bucket. No need to place yourself in Murphy's bullseye.

[@dinac6250]

Makes no senses

[@azucena7castro]

I just closed on my house in July but I can’t wait to be able to say the same words Jaime did. Congratulations to him and his family

[@carlososante7748]

Hello Corazón Traicionero , I am a single father of 3 daughters and I found a home to purchase for my family but due to my low credit score I don`t qualify for FHA loan. I saw review about Gina and decided contact her, Then I gave her the info she requested for her to get the credit fixed. She helped raise my credit score to 780 and She also deleted negative collections items on my credit report within 72 hours. I finally approved for the FHA loan and I was able to buy the house. Contact G I N A - @ - creditmasterfixLLC Dot CoM

[@emailadmin6811]

Corazón, Gina also helped me.... You can just go to her website on CREDITMASTERFIXLLC,COM and see things for yourself

[@daveramsey2552]

Wow! I didnt believe they really work, I thought my sister was just ranting about how fast Gina got her credit fixed lol. Thats really nice, I'll definitely check them out now.

[@nickysunshine8494]

It tickles me when he says “better than I deserve” I love it 😂😂😂

[@lesstalkmoredo8613]

I like this

[@Brandons125]

You don't have to pay it down in one big chuck. Since you already have an emergency fund you can always just put that $2k in savings towards the principal on your loan. It's not a big difference, but seeing the number go down and saving a very small amount on interest is always nice.

[@Candisa]

It depends on the mortgage company/policy. F.e.: I can't just pay more and expect my bank to use the extra to reduce the principal. I did a payment towards principal last year. I had to call them first, tell them how much I would be injecting, and tell them if I wanted it to result in a lower monthly, a shorter term, or a bit of both. It also took them over a week to process and ofcourse they recalculated the interest based on the day they processed it instead of on the day I did the payment. If I would just make an payment, they would either wire it right back, or worse, hold it and take their sweet time to contact me about it and then take their sweet time again to actually process it. I could theoretically do this every month, and it would be saving the most interest to do so, but it's not worth the hassle for me, I just save up for half a year to a year (depending on how well the saving goes and other plans/expenses) and then make the call.

[@acesup26]

I have an addiction....... More Dave Ramsey

[@kindredkey]

Dave!!🤣 "Freaking dumpster fire!" --omg i laughed so hard

[@youngjedi5599]

Him breathing into the phone is driving me crazy!! But good job

[@teamtakeover7317]

That's wind not him breathing

[@alexpasko9540]

maybe wind but I was so happy when he cut his mic

[@ceecee8757]

It's the wind! We have Hurricane Delta that's coming up into the Gulf of Mexico soon.

[@ashleym6765]

You too lol

[@rdb0819]

Don’t touch the savings. It’s better to have $33k saved these days than $10k. If there was no child involved then I’d say pay half of the mortgage off now then just pay as much as you can towards the remaining balance until it’s paid in full. Also keep in mind, the house will have equity so they’ll be ok regardless

[@wesl8787]

Thank you, I needed that information.

[@evalina98000]

"Is what you're asking, an emergency? If the answer is no, then you shouldn't use the e-mer-gen-cy fund for that." Classic DR..spell it out fo us 🤣

[@thesocksexchange9449]

26 here owing 24k on my house and 25k saved up. I also think in abundance :)

[@mocheen4837]

Where do you live that you can pay off your house by 26? I could not purchase my first house until 30 and by that time I had saved up $300,000. My first house was $500,000 and my second house was $850,000. Now the houses in my neighborhood are selling for $1.6 million. I want to sell and move to a cheaper area so I can pay cash for the house and be debt free. Especially since I am now able to work from hone.

[@thesocksexchange9449]

@@mocheen4837 I live in a very cheap town in central Illinois. I was able to get a good deal at 40k. Im from Chicago and hope to eventually move back and buy a high price home. But that will be yeats from now

[@mariahsmom9457]

This guy is a rockstar!

[@allysonloper2777]

I'm in the EXACT same boat. But my job is more volatile right now, so I'm basically hoarding the savings until Q1 next year just to make sure.

[@chancecooper4006]

Pull the trigger! Don't hesitate...I paid off two rental homes that way, by taking the leap! Never regretted it once. Now have two paid for homes.

[@robertcroft8241]

My opinion is (And I have always done it ), I paid off my own house and my mothers house. My rental houses I never pay off , I keep on borrowing to buy more. (Here In England) .

[@TimeisUp22]

This doesn’t sound like a SAFE idea w/ a 1 year old. 2020 got some bs happening every month. But congrats and good luck. 🍀

[@1.5Koreans0.5American]

Thank you for sharing 🙌

[@paca3773]

Why not send like 16k to pay down house then add 500 to the amount of the house payment he has now till he saves up another big chunk to pay it off completely

[@garyhost1830]

Corona was an emergency holiday

[@That-Wanderer]

Not for us "essentials" 😂 Talk about BUSY

[@Lex0863]

Excel Detail my husband doubled his hours too... and I started my job as a nurse beginning of March. Needless to say we’ve been swamped with working so much and taking care of our two kids 😅 gotta look on the bright side and be thankful we still have our jobs

[@Dfgzx12xyw]

Pay 20k towards your mortgage and save $10k for ur emergency. That way u save on interest. Then pay the rest as money come in. U will pay off ur mortgage in a few months and still have emergency fund.

[@robmckee5295]

Way to go! I'm sure you are looking forward to that Release Of Lien letter from your bank in 2021. Great job with the savings.

[@JohnTube2K]

Great advice about Murphy’s Law… regarding paying off house at the detriment of not having an income emergency.

[@yaboijuan4052]

This dude's kid is gonna be straightttt

[@ericbartha6313]

Did you just assume his kids orientation???

[@VState60]

@@ericbartha6313 bahahahhaha

[@TAPPChannel]

Great question and great answer:)

[@inkbythebarrelandpaperbyth6905]

Thank you for this question.

[@soonermagic24]

This is one video I thought dave would go outside the steps, and say go for it dude

[@Faith-un7ns]

I almost thought he would too.

[@johnhwang339]

It would be a shame if an emergency came up and all the savings was used up and unable to work and still have that mortgage due at the end of the month. Don't want to possibly lose the house, too.

[@jaimecruz5367]

He won’t have a Payment because he has all the money to pay it off. However he won’t have money if something else happens.

[@johnhwang339]

@@jaimecruz5367 If something does happen, he can borrow money for the expenses, but they can't take away his house if he doesn't pay it back on time. If you think about it, not paying off his house is like a loan guaranteed loan on the emergency fund with your house as collateral.

[@scuba535]

John Hwang the point of getting out of debt is not to go back into debt.

[@johnhwang339]

@@scuba535 Having a mortgage means you're already in debt.

[@dinac6250]

John Hwang absolutely ,pág off house. That’s the best thing he can do ,yes if he wouldn’t be able to work,Hod forbidd ,it would be a blessing not to have that payment at the end of the month !Its a piece of mind !I know most people don’t think that way which is totally wrong ,that’s why so many have lost their homed

[@c103110a]

Simple: Compare the interest rate you are earning on the savings with the interest rate you are paying on your mortgage. If the interest on your savings is less than the interest rate on your mortgage - pay it off.

[@Frissdas1207]

It took me 28 years to realize that "rich people" have the exact same problems I do. The only difference is they can afford their problems. 4 years later, I can too. Stay consistent people. It's 100% worth it. I went from being a single dad with 47k in debt to very happily married and only a mortgage that we're paying double on.

[@EadsB7002]

Love that. SO very true too!

[@juniordunkley2751]

Don't always agree with Dave but he does come out with a lot of sense"hen you break something and you got money it's just an inconvenience"

[@iamjacquesbarjon]

It’s crazy how Dave is okay with having an emergency fund once you’re out of debt. Seems inconsistent. It’s okay to have $1K for five years while you’re paying off debt but not for two months if your house is paid for? I get that you should have an emergency fund, but you should ALWAYS have that in my opinion. Even if you’re in debt. Murphy is just as likely to come if you’re broke or rich. I couldn’t sleep at night if I only had $1000 in the bank. Ever!

[@thecarrots5]

100%. Only difference here is that having a house paid off with 1k in emergency fund with a paid off house is different than having 1k in emergency and DEBT. Much worse situation. Not to mention that he will get paid next week or month and the 1k won't be for very long.

[@jeffjohnson3620]

Good advice Dave. He’s so close and looking to cut corner to finish it off. Just needs to be patient a little longer.

[@armandochavez9510]

Patience is a virtue

[@Candisa]

Such a recognisable feeling. I took a 25yr capped variable rate (affecting the monthly, not the term) mortgage in 2010. Up until last year, with constant low interest and plenty of other stuff to deal with and save up for, that thing was in the back of my head "well, I'll have my own home in 2035". Last year the interest rate shot up from 2.85% to 5.35% (the cap). After a bit of thinking and maths I decided I didn't want this to affect how much I could save/invest, and I rather took a step back (still having a healthy emergency fund) to continue at the same pace over not taking the step back but continuing slower. I didn't want to give myself the "well, everything is more expensive now, I can't save anymore" excuse. So I took the step back and did a big payment, simultaneously shaving 3 years off the mortgage ànd keeping the monthly payment at a nice even number I like. Now, just a few months later, there's a voice in my head getting louder and louder shouting: "You can pay this off in 3-4 years instead of another 8.5!" and I'm very tempted to listen. I also know that same voice will be shouting "you can pay this off entirely if you go all-in!" when the numbers are similar to the callers' in 2 years. It's funny how the mind works, in 15 years I went from telling myself "I need to get rid of this consumer debt," to "mortgage debt is normal, just pay it off as planned, it's part of the retirement," to "hey there, not so fast, just follow the plan, no need to get ahead of yourself".

[@theliteratemiddleclass]

This is exactly where I’m today... thanks Dave

[@laneblount9888]

I’d throw 15k at the house and try to knock the rest out within a year that way I still have some emergency fund

[@teresaevans4840]

Me too 👌🏿got my house paid off this year,my daughter bought my rental,so I am retired and enjoying life

[@markplenty2631]

If I was in that position, I’d pay $12,000 to make it a easy €20K left and then to keep Murphy at bay, a couple grand a month for 10 more months.

[@Jebusankel]

But you're going to pay so much in Forex fees.

[@brianbutterworth6107]

"The emergency fund is Murphy repellant." - Dave Ramsey

[@SherylRose]

Or he can also pay extra principal of 20k NOW if he's comfortable with a 13k emergency fund. It will accelarate his payment faster as most of his mortgage payments in the next months will mostly go to principal payments. For example, if his interest rate is 4%, only $33.34 of his mortgage payment next month will go to interest and the rest will be towards principal (and escrow). I think that will be better than waiting till February.

[@Raistlinsdragonclaw]

Great call.

[@pigbenis2812]

Just pay double each month till it’s gone and keep the savings.

[@onedangerousmanreacts]

Fantastic question!

[@futurecollector]

Meh, Wait 6 months, pay if off and have another 20k saved up. Look at the interest you are paying on the monthly payment as insurance. 6 months of insurance seems worth it.

[@jfcustomfab]

Had 70k in March owed 70k on the house .. during the market down turn decided to put the 70k in the market transferred it all to Merrill .. got nervous .. pulled back 50k .. invested 20k .. paid 10k per month over the next 5 months .. saved 20k over that time .. paid the house off oct 1.. decided to live off my income since we have no debt anymore .. wife’s income goes straight to Merrill direct transfer we never even see it .. 42 years old .. net worth 900k ... next year should be millionaires (net worth not liquid cash).. should have been living off one salary a long time ago !!! My advice to anyone with two incomes .. the goal should be to be debt free and live off one income.. invest the other.. or if not living debt free .. live off one income .. other income goes straight to debt .. then invest you will already be living off one income ..🤙

[@JuiceBuzz]

A lot of people failed to think about one important thing...where the person is in their mortgage payments. He could own a $50k condo and only be into his mortgage a few years. If this isn't the case and he is later in the payment schedule the mortgage company has already received the bulk of the interest on the loan so I would let them wait for their money and invest some of the nest egg. To me it would be better for him to be in a place where he can take some investment risks instead of going broke to pay the mortgage company in advance. That's just me.

[@ritatharp5238]

Thank you for sharing! This information is very helpful. 👍

[@zshotty189]

This dude is crushing it

[@pimpballer3]

Why not keep the 6 month emergency fund and pay the rest on the house. This is a cash flow issue not a debt issue.

[@dextermorgan4172]

I'm in the same boat. I'm 31 and owe 60k on my house and I have 60k in the bank. I don't have any student loan or credit card debt.

[@edwinl423]

You can pay off 40k on your house and have a emergency fund of 20k. The interest you save is also a money you earned.

[@dextermorgan4172]

@@edwinl423 I did a 15 year fixed rate at 3.375%. I was even considering refinancing to get a much lower rate and my mortgage would be less, but I would continue to pay what I'm paying now plus a little extra to pay it off even faster. I really like have that money saved in the bank and I don't have to worry about any emergency really

[@edwinl423]

@@dextermorgan4172 It's really good that you have cash reserve, but once you make another 6 month of Emergency fund it's better to pay off the house. I can understand interest rates are low on your mortgage. But that 60k which is sitting idle in your account is really depreciates about 5-6% each year from Inflation and you paying additional interest on your mortgage about 3.5% adds upto it. Make a wise decision of getting out of your debt as soon as possible and have a limited amount of emergency fund of 6 months and start to Invest to beat inflation and becoming wealthy.

[@dinac6250]

Edwin Aldrin absolutely

[@dinac6250]

Dexter Morgan just pay more every month so you don’t spend the money refinancing,that’s what I did and paid my mortgage off a few years ahead of time

[@richardle7469]

Yes with my past luck ,Murphy has always knocks at my door. And always lets him in.

[@xukeepax1286]

i think he should go in to detail how much interest will he be saving by paying it of immediately, its pretty much paying for peace of mind of having a emergence fund over x amount of time. But i do think that 30k is a bit over kill, i would use 15k to bring down the debt saving a bit of interest.

[@catt99mahal8]

“Freakin dumpster fire”. 🔥 🤣