Stay Gazelle Intense to Pay Off Our House?

Summary

Ramsey Everyday Millionaires: "Stay Gazelle Intense to Pay Off Our House?"

Release Date: January 8, 2025

In this engaging episode of Ramsey Everyday Millionaires, the hosts from the Ramsey Network—Dave Ramsey, Ken Coleman, Rachel Cruze, George Kamel, Jade Warshaw, and Dr. John Delony—delve into the financial journey of Grace from Cleveland, Ohio. Grace seeks advice on whether maintaining a Gazelle Intense approach is appropriate while paying off her mortgage during the later stages of the Baby Steps plan.

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Caller Introduction and Financial Situation

Grace's Dilemma
Grace reaches out to the show expressing her and her husband's progress through Baby Steps 4, 5, and 6. Despite knowing that maintaining a Gazelle Intense strategy isn't typically recommended during these stages, she contemplates whether it makes sense for her young family to continue this aggressive repayment method to eliminate their mortgage early.

Grace [03:25]: "We calculated that we would be about three and a half years out. If we are Gazelle intents to finish the mortgage, that would take us four and a half years total to get to baby step seven."

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Hosts' Perspectives on Gazelle Intense

Jade Warshaw on Balancing Intensity and Enjoyment
Jade Warshaw addresses Grace's query by highlighting the importance of balance. She acknowledges that while a Gazelle Intense approach can be beneficial, especially for those who have dedicated significant time and effort to the initial Baby Steps, it's crucial to also enjoy the fruits of their labor.

Jade Warshaw [01:47]: "You need to take a chill pill. You deserve, because you deserve to enjoy some of the fruit of your labor."

Jade emphasizes that during Baby Steps 4, 5, and 6, couples should transition from intense focus to a more intentional and balanced financial strategy. This allows them to indulge in life’s pleasures while still making thoughtful financial decisions, such as extra payments towards their mortgage or saving for their children's education.

Ken Coleman's Inquisitive Approach
Ken Coleman probes deeper into Grace's motivations, suggesting that her question might stem from seeking validation or permission to continue her aggressive repayment plan.

Ken Coleman [03:32]: "You don't need our permission. It's your life."

Ken supports Grace by validating her commitment and highlights the maturity involved in her decision, reinforcing that as long as both spouses are aligned in their values and goals, their financial strategy is sound.

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Financial Projections and Strategic Planning

Grace's Financial Trajectory
Grace outlines her current financial status, noting their combined household income of $170,000. At ages 27 and 28, Grace and her husband have rapidly progressed through the initial Baby Steps, allowing them to consider the aggressive payoff of their mortgage within an estimated four and a half years.

Grace [05:34]: "We have figured it out that if he kind of continues at his trajectory, when I am done working, he should be at about $5,500 monthly income. But our expenses are only $2,500 a month."

Grace shares that post mortgage payoff, her husband is poised to significantly increase his income, which will sustain their lifestyle and provide a financial cushion. They also engage in side hustles, adding an extra $2,000 to their income, ensuring they remain financially resilient.

Preparation for Income Changes
Ken Coleman raises a critical point about the sustainability of their plan, ensuring that Grace and her husband have strategies in place to handle potential income fluctuations.

Ken Coleman [05:03]: "Will you guys prepare for that and adjust your lifestyle so that doesn't put you under pressure?"

Grace assures that their expenses are well within their projected income, emphasizing their preparedness and the cushion they will maintain after paying off the mortgage.

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Values, Education, and Role Models

Financial Peace University and Shared Values
Grace credits Financial Peace University for aligning her and her husband’s financial values and enhancing their financial literacy. This strong foundation has been instrumental in their quick progression through the Baby Steps and their current strategic planning.

Grace [06:06]: "We actually did Financial Peace University. Our church and college had offered it and my husband and I wanted to do it before we ever got engaged."

Inspiration and Affirmation
During the conversation, Grace expresses admiration for Jade Warshaw and Rachel Cruze, viewing them as role models. In response, Jade warmly acknowledges Grace's achievements, emphasizing that Grace herself embodies the principles the hosts advocate.

Jade Warshaw [06:28]: "You're the role model. You've created a life that you love and I think that's excellent."

Ken Coleman echoes this sentiment, commending Grace's maturity and strategic planning, reinforcing the positive impact of their Financial Peace journey.

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Conclusion and Final Affirmations

Validation of Grace's Plan
The hosts collectively validate Grace's decision to maintain a Gazelle Intense approach during the later Baby Steps, recognizing her thoughtful planning and alignment with her family's values. They commend her for her proactive financial management and readiness to adapt to future changes.

Ken Coleman [07:18]: "You're okay. You don't feel like you're overheated and you've got a really great why."

Closing Remarks
Dave Ramsey concludes the episode by encouraging listeners to connect with investment professionals through Ramsey Solutions for personalized financial guidance, underscoring the network's commitment to helping individuals build and sustain wealth.

Dave Ramsey [07:32]: "Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramseysolutions.com/smartvestor."

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Key Takeaways:

1. Balance is Crucial: While aggressive debt repayment strategies like Gazelle Intense are effective, it's essential to balance financial goals with enjoying life and maintaining a healthy lifestyle.

2. Alignment of Values: Successful financial planning hinges on partners sharing and aligning their financial values and goals, ensuring cohesive and supportive decision-making.

3. Preparation and Adaptability: Anticipating future income changes and preparing for them ensures financial stability and reduces stress during transitional phases.

4. Continuous Learning: Engaging in financial education programs like Financial Peace University can significantly enhance financial literacy and facilitate quicker progression through financial milestones.

5. Role Models and Community Support: Drawing inspiration from financial role models and the support of a community can empower individuals to stay committed to their financial plans and make informed decisions.

This episode exemplifies the practical application of Dave Ramsey's Baby Steps, illustrating how young couples can strategically manage their finances to achieve long-term stability and the flexibility to adapt to life's changes.

Transcript

[Grace]

Foreign.

[Dave Ramsey]

This episode is sponsored by SmartVestor. Connect with an investing pro for free at RamseySolutions.com invest. You're listening to Ramsey Everyday Millionaires, where we talk investing, retirement, building wealth, and outrageous generosity.

[Ken Coleman]

All right, let's get to Grace in Cleveland, Ohio. Grace, how can we help today?

[Grace]

Hi, you guys. Oh, my gosh. Thank you so much for taking my call.

[Ken Coleman]

You bet.

[Grace]

Okay, so my question for you guys is, my husband and I are in baby steps four, five and six. And we know that you're not necessarily supposed to be gazelle intense all the way through steps four, five and six, but we are wondering, since we're such a young age, if there's ever a situation where it is appropriate or makes sense to stay gazelle intendence through paying off your mortgage.

[Jade Warshaw]

Yeah. You know, it's funny, we get this question a lot. And I'll tell you what I, Jade's opinion, my opinion is if you were a person like Sam or I who, you know, baby step one, two and three took you an inordinate amount of time, Right. You were doing it for four years or five years or even three. Three years of really being laser focused. You got your head down, you're sacrificing at a deep level. Yes. When it's time to go to baby steps 4, 5 and 6, you need to chill out. You need to take a chill pill. You need to move intentionally, not with intensity. You deserve, because you deserve to enjoy some of the fruit of your labor. Life is. Life is your life. And hard enough, it's hard enough. Like you've, you've done the hard part. Now you get to say, okay, let's enjoy this a little bit. We go on a vacation, we buy a new couch, but we're still being intentional in figuring out the rhythm of when we're going to do extra payments, whether it be to 529 or to the house. Now.

[Grace]

Yeah.

[Jade Warshaw]

If you're a person who you're like, you know what, I kind of just automatically avoided debt and I didn't have much of it. And when we found the baby steps and figured out that there's this idea that you could pay off the mortgage too, we never really had that head down, laser focused time period spent on debt and savings. Then, yeah, I could see where you could say, you know what? For us, this is kind of our Baby Step 2 vibe for this mortgage. And I'm not mad at that. And I don't think, do you see what I'm saying? As long as you and your spouse are on the same page. And you go, for us, this is. This is the that moment. I'm not mad at that.

[Ken Coleman]

But what's at the root of that question, Grace? Because I think it's interesting that you ask us, can we remain. It's almost like you're looking for permission or maybe your spouse is looking for permission. Tell us what's behind that question.

[Grace]

Yeah. So it took us about a year to get through baby steps 1, 2, and 3. So we did it pretty quickly. We are on a two income household income right now. And we had a surprise baby. He's six months old now. And I would love the opportunity to stay at home with him like my mother did with us. But right now I am the breadwinner of our home. So it's just not possible with our expenses for me to just completely stop working. And I want to be financially responsible for just the future of our family. But if we have another kid, I would love to be able to stay home. So kind of the root of that is we calculated that we would be about three and a half years out. If we are Gazelle intends to finish the mortgage, that would take us four and a half years total to get to baby step seven. And then at that point, we wouldn't have a mortgage and I'd be able to stay home if we decide to have more kids.

[Ken Coleman]

Well, then of course, that. Why then if that's. That's all I asked for that you know what the answer is. You were calling us kind of looking for permission.

[Jade Warshaw]

Yeah. This was a question of values.

[Ken Coleman]

You don't need our permission. It's your life. I love how Jade answered it. I agree with what she's saying there. I think in this case you're okay. You don't feel like you're overheated and you've got a really great why. And I just think motivation is not an issue for you guys. So, yeah, I'd go as hard as you guys want to go on that.

[Grace]

How old are you? My husband? I'm 27.

[Jade Warshaw]

So you'd be 30 and a half with a paid off mortgage?

[Grace]

Yeah, we'd be on baby step seven at 30 and a half. My husband was like, what kind of income? His income is like, kind of untapped with what he does. So he was like, I mean, from age 30 to whenever he decides to retire, he's like, I could put more than 15% into my retirement at that point, so we wouldn't have good a mortgage because we busted our butts.

[Ken Coleman]

Now do you guys have A plan to replace your income with his growth or get close to it.

[Grace]

Yeah. So right now we're at 170,000 between the two of us. I'm 27, he's 28. And his income should definitely easily hit that throughout the course of his career.

[Ken Coleman]

Well, but how soon? So let's just, let's fast forward your timeline. Do you think he could get to a place where he's almost or has replaced your income or surpassed your income by the time you got the house paid off?

[Grace]

Surpass mine? Yes. Surpassed both of ours total? Probably not. But he also, we both have like side hustles that we started doing on the side and we're, I think we're starting to get a little more intense. Intense with them. So we have the opportunity to add an extra 2.

[Ken Coleman]

I may not have asked it. Well, so. But I heard what you said. He's not. And by the time you pay the house off in this timeline, he's not going to be making what the two of you make together. So my follow up question is, and I think I know the answer, will you guys prepare for that and adjust your lifestyle so that doesn't put you under pressure? Because what you don't want is to be jacked and excited about coming home with the babies, but then feeling the pressure of the squeeze. So we want to adjust our lifestyle so that he also doesn't have pressure. Is that going to be the case?

[Grace]

Yeah, so that's a really good question. So we have figured it out that if he kind of continues at his trajectory, when I am done working, he should be at about 5,500 monthly income. But our expenses are only 2,500amonth. So we should still have like a $3,000 cushion every month.

[Ken Coleman]

And that's. And that's no house, correct?

[Grace]

Yes, that's with no house payment. Correct.

[Jade Warshaw]

Okay.

[Ken Coleman]

Yeah, I see. That's the margin. That's all I'm checking you on. And it sounds like you guys got a great plan. Jade, I feel great about this decision. This is maturity. And a young couple.

[Grace]

We, we actually did Financial Peace University. Our church and college had offered it and my husband and I wanted to do it before we ever got engaged. And we just think it was the best decision we ever made because we were both very aligned on values and financial literacy and everything. And I just have to say, too, before I go off, Jade, you and Rachel are both like my role models. So I'm super excited I got to talk to you today.

[Jade Warshaw]

You're the role model. You're sitting here. You've done everything that we could possibly hope someone would do and this is the outcome. You, you have choices and you get to live your life based on your values. To say it like Rachel Cruz, you've created a life that you love and I think that's excellent. So you're the role model and I'd.

[Ken Coleman]

Like you to receive that.

[Jade Warshaw]

Though I receive it.

[Grace]

It's definitely my parents because my parents are definitely the thing, not me.

[Ken Coleman]

You and Rachel deserve that. Grace. That's phenomenal. 27 year old Grace looking up to you and Rachel Cruz. Holy smokes, Grace, you have picked two fabulous role models. I'm blessed to know both of these ladies and you are on a great track. So thanks for sharing that. Sometimes people need to hear that. So how's that feel? Does it make you feel old?

[Jade Warshaw]

Does it make me feel old? Why do I have to be old, Ken, to be a role model?

[Ken Coleman]

Oh boy. There I just stepped right. America, this is a classic male error here. I was trying to be nice. I just was showing you some honor and then I go and ruin it.

[Dave Ramsey]

Thanks for listening to Ramsey. Everyday millionaires need help with your investments? Connect with a smartvestor [e-mail] invest or click the link in the show notes. Ramsey Solutions is a paid non client promoter of participating pros. Learn more at ramseysolutions. Com smartvestor.