My Girlfriend And I Are Building A $700,000 House (We Only Make $70k)

Summary

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Podcast Summary: The Ramsey Show Highlights

Episode: My Girlfriend And I Are Building A $700,000 House (We Only Make $70k)
Date: December 3, 2025
Host(s): Ramsey Network Financial Advisors
Caller: Joseph
Theme: Financial Reality Check for Young Couples Planning a Major Home Purchase

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Episode Overview

In this concise yet impactful episode, Joseph, a 21-year-old caller, seeks guidance about building a $700,000 home with his girlfriend—soon to be fiancée—while their combined income is approximately $70,000. The Ramsey advisors tackle the realities of relationships, money, and ambition, offering candid advice about timing, risk, and prudent financial planning for young couples.

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Key Discussion Points & Insights

1. Relationship Status and Financial Ties

• Red Flag on Joint Commitments:
  • Advisors immediately question the wisdom of entering a major financial obligation without being married or even officially engaged.
    • Quote [00:20] Financial Advisor:
      “Numbers aside, you're in way over your heads. There's not even a ring on the finger. And you're going to sign up for a mortgage and put your names on a deed together?”

2. Alternative Path Suggested

• Smart Sequence Recommendation:
  • Advisors propose: get engaged, get married, rent and save, then buy or build when ready.
    • Quote [00:59] Financial Advisor:
      “Let me lay out a different path. ... Why not get engaged, get married, rent together, save up on your own and then purchase a house or build when you're financially ready?”
• Caller’s Rationale for Rushing:
  • Joseph and partner want to avoid “throwing money away” on rent and hope to start a family soon.

3. Financial Snapshot

• Savings & Parental Matching:

  • Joseph and girlfriend have ~$60k in savings, aim to put $100–$130k down; her wealthy parents are willing to match their down payment—$260k total.
    • Still, this leaves a large mortgage.

• Income Clarification and Mortgage Reality Check:

  • Confusion about monthly vs. annual income leads to a sharp reality check:
    • Quote [03:21] Financial Advisor (mishearing income):
      “A month?”
    • Turns out they make about $70k/year, with commission and business income potentially bringing it closer to $10,000/month (uncertain, fluctuating).

• Advisor Crunches the Numbers:

  • Even with best-case incomes, the mortgage (approx. $4,500–$5,000/month) would consume about half their take-home pay.
    • Quote [04:02] Financial Advisor:
      “So we're already setting ourselves up where half of our take home pay goes toward the mortgage.”

4. Being “House Poor” and Risks of Banking on Future Income

• Financial Experts Warn About Overextension:
  • Joseph admits the mortgage would be a stretch but expects incomes to rise and business/commission earnings to double.
  • Advisors caution that relying on everything going perfectly is a major risk.
    • Quote [04:47] Financial Expert:
      “You're setting yourself up in a situation where everything must go as planned for this to work out. ... even if everything is perfect, you're still house poor for several years.”

5. Advising Patience and Strategic Upgrades

• Pump the Brakes:
  • Advisors urge Joseph to slow down, prioritize order and timing, and purchase a home that fits today’s realities, not tomorrow’s ambitions.
    • Quote [05:27] Financial Expert:
      “I truly would love for you to slow down a little bit ... Let's just do it in the right order and at the right time.”
• Wait for Stronger Financial Foundation:
  • Emphasize saving, income growth, and an emergency fund before leaping.
    • Quote [06:20] Financial Expert:
      “It's both [increasing income and saving]. ... As you do that you're saving up more too.”

6. Debunking the Myth of “Too Late” for Success

• Perspective on Age and Success:
  • Joseph, at 21, feels pressure to accelerate, but advisors stress there’s no rush.
    • Quote [06:55] Financial Advisor:
      “Who told you it's too late? Who told you you have to rush into this or else…?”

7. Flexible, Realistic Approach to Home Ownership

• Start Smaller, Upgrade Later:

  • Advisors suggest purchasing a more modest home (e.g., $400,000 three-bedroom), paying it down quickly, and upgrading as life evolves.
    • Quote [07:37] Financial Advisor:
      “I would go with what you guys can afford and if you can get a $400,000 three bedroom, I would do that and have a small mortgage that you can knock out quickly and you can upgrade over time.”

• Life Changes—Don’t Prematurely Build for “Someday”:

  • Caution against overbuying for a future that may involve change (kids, one income, job switches, etc.).

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Notable Quotes & Moments

• [00:20] Financial Advisor:
  “Numbers aside, you're in way over your heads. There's not even a ring on the finger...”

• [05:27] Financial Expert:
  “Let's just do it in the right order and at the right time.”

• [04:47] Financial Expert:
  “You're setting yourself up in a situation where everything must go as planned for this to work out... even if everything is perfect, you're still setting that up [to be house poor].”

• [06:55] Financial Advisor:
  “Who told you you have to rush into this or else and you got to do this by this time and we're going to make this much?”

• [07:37] Financial Advisor:
  “...I would go with what you guys can afford and if you can get a $400,000 three bedroom, I would do that and have a small mortgage that you can knock out quickly and you can upgrade over time.”

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Important Timestamps

• 00:06 – Joseph introduces their home-building plan.
• 00:20 – Immediate concern about lack of engagement/marriage.
• 00:59 – Advisors suggest “rent, save, then buy/build.”
• 02:11 – Caller shares savings and family gift plan.
• 03:21 – Income confusion clarified; financial reality check.
• 04:02–04:47 – Advisors caution about being "house poor."
• 06:14 – Joseph asks: income vs. emergency fund; advice is both.
• 06:55 – Advisors push back on “rush” mentality.
• 07:37 – Recommendation to buy a home you can afford and upgrade later.

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Episode Takeaways

• Do things in the right order: Engagement/marriage first, then shared financial commitments.
• Don’t overextend based on hoped-for income; buy based on today’s numbers.
• Focus on saving, income growth, and emergency funds before jumping into a major mortgage.
• There’s no need to rush—take time, start smaller, and upgrade as your life and finances improve.
• Planning for a perfect future leaves you exposed if anything goes awry; build flexibility into your plans.

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This episode delivers a clear, tough-love perspective: dream big, but take practical, prudent steps—especially with relationships and major financial commitments.

Transcript

[EveryDollar Host]

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[Financial Advisor]

Today.

[Joseph (Caller)]

My girlfriend going to be fiance and I are going to be building a house costing around $700,000. And we want to know if we're way over our heads or if this is actually feasible.

[Financial Advisor]

Numbers aside, you're in way over your heads. There's not even a ring on the finger. And you're going to sign up for a mortgage and put your names on a deed together?

[Joseph (Caller)]

No, the by the time that the deed is there, there would be a ring on the finger.

[Financial Advisor]

So this is going to be a new build and you're just hoping that all the plans work out perfectly.

[Joseph (Caller)]

Yes, we, we do have the ability to live with either of our parents rent free. Obviously that's not ideal, but we're going to have to do that while the.

[Financial Expert]

House is being built.

[Financial Advisor]

Why do we have to do any of this?

[Joseph (Caller)]

Yes.

[Financial Advisor]

Let me lay out a different path. You tell me why it doesn't work for you guys. Why not get engaged, get married, rent together, save up on your own and then purchase a house or build when you're financially ready?

[Financial Expert]

Yeah. What's the rush?

[Joseph (Caller)]

So we would like to start a family early around 2028, 2027. And our initial thoughts are renting is putting money into a place that doesn't build us wealth. So we might as well put it towards a house that's going to be building us wealth. And if we have to live with our parents for a year or two, we're perfectly fine with that because we do have stable jobs that we're able to.

[Financial Advisor]

How much money do you guys have right now?

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[Joseph (Caller)]

We can't help you with that.

[Financial Advisor]

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[Joseph (Caller)]

Right now we have about $60,000 in savings and then a little bit more in checking.

[Financial Expert]

How much do you plan on putting down on this $700,000 house?

[Joseph (Caller)]

We are looking to put down around between 100 and 130,000 down the house. And then her parents are extremely wealthy and they Were planning on matching whatever.

[Financial Expert]

Whatever you put. So 260.

[Joseph (Caller)]

Yes, yes.

[Financial Expert]

Okay.

[Financial Advisor]

And why do you need a $700,000 home?

[Joseph (Caller)]

As newlyweds in Pittsburgh, we are looking to have kids. So it's in the suburbs and we're going to be building so that we don't have as many maintenance house issues. Simply put, we're trying to set ourselves up for the future where we don't have to move, we don't have to do all these other things. We're just on that path of get a house and live there.

[Financial Expert]

What's your income?

[Joseph (Caller)]

Not a custom build. Our income. We are both around 32 to 35,000amonth.

[Financial Advisor]

A month?

[Joseph (Caller)]

Yes. And that is not including commission. So you Both are not 1,000, 3,200.

[Financial Advisor]

Goodness gracious. So it's like, well, yeah, you guys are making a million dollars. Okay. So you're making like 70 grand and you're. How are you gonna afford a $5,000 a month mortgage?

[Financial Expert]

Yeah, that's what I'm doing because I just. We both did the math. That's funny.

[Joseph (Caller)]

So we also. She has commission that she is an insurance agent so she has commission coming back for her. I also own my own company that brings in two to 3,000 as well. On top of that a month.

[Financial Expert]

So you're at 10,000amonth?

[Joseph (Caller)]

About that, yeah.

[Financial Advisor]

So we're already setting ourselves up where half of our take home pay goes toward the mortgage.

[Financial Expert]

Yeah, you're still at half. Before you were even worse. But Even with the 10,000, what I'm seeing on here, 4,500 for, for the mortgage. If you put down 260 on a $700,000 house, your house poor.

[Joseph (Caller)]

Right? Right.

[Financial Expert]

And you're fine with that?

[Joseph (Caller)]

No, we're not fine with that at all. We're obviously going to be expanding our income. We're trying to see if this is feasible now because we do have career projections going forward that it won't be anywhere close to that as well as my business and her commission are expected to double everything.

[Financial Expert]

You're saying, Joseph, I'm with you. I love dreams like I love a good dream. I love to plan, I love goals. But you're setting yourself up in a situation where everything must go as planned for this to work out. And even if it does go as planned, you're still setting yourself up for several years of a situation where Your house is 50%. Where your house poor for several years. So even if everything is perfect, you're still setting that up, which is not good. I truly Truly would love for you to slow down a little bit on this and say, okay, let's do all of this, but let's just do it in the right order and at the right time. Let's get married then. If you want to live with your parents, that's your prerogative. I wouldn't do it. But if you want to live with the parents to save more money faster, like that's yalls choice. If you want to do that and then save up. Make sure when you do buy a house when it's time that it's the right percentage of your take home. Make it to where you're not house poor. You. You have this amazing deal where your in laws are going to match that amount. That's awesome. Milk it for all it's worth and make sure you get to a point where you can get this thing to 25%. Okay. Then you're in a situation. I'm fine with you guys doing this thing believing that this is going to be the only house you ever buy for the next 20 years. If you want to believe that, that's okay. But let's. Can we just do it right? Can we pump the brakes just a little so it's all done in the right time?

[Joseph (Caller)]

Yeah. Is this a thing where to increase our incomes first or a savings and emergency fund kind of deal?

[Financial Expert]

I think it's both. And you said that there's a. There's a path where both of you guys earn more and it's. It's as you do that you're saving up more too. Right? Because I'm also looking at this on a 15 year fixed. My guess is that you were looking at it on a 30 year. Am I right?

[Joseph (Caller)]

I have both in front of me. But yes, I was looking at a 30 year fix.

[Financial Expert]

And again all that. You're doing that because you're trying to go fast.

[Narrator]

Want to go fast?

[Financial Expert]

Why? You have your whole life together. I get it. I know, I get it. But.

[Joseph (Caller)]

So I. We are both 21. Who.

[Financial Advisor]

Who told you it's too late? Who told you you have to rush into this or else and you got to do this by this time and we're going to make this much. I just think we're. There's something else going on here where you're wanting to rush the process and leapfrog into a lifestyle that you just can't afford yet.

[Joseph (Caller)]

No. We've been dating for about four years and going to be graduating this upcoming May from college. I'm working around 50 to 60 hours a week. She's working 30, going to be 40 this upcoming semester. It was just one of those things where we were looking at it. Yes, we were dreaming big and we saw that we could afford it and we would still have extra income coming out.

[Financial Expert]

We couldn't afford it.

[Financial Advisor]

It's already artificially propped up with the in laws money. And so I would go with what you guys can afford and if you can get a $400,000 three bedroom, I would do that and have a small mortgage that you can knock out quickly and you can upgrade over time because the truth is you're going to hate your house five years from now for whatever reason and you're going to move. It's okay to move six years from now as your life changes, but we don't need to plan for, well, one day we're going to have five kids. So we might as well get the five bedroom now and just get ahead of it. We don't even have a ring on the finger. So I would just do things in order. And I love how excited you are. You're a planner, you're futuristic. I have a lot of that in me. But I know I fall flat on my face when I make too many plans and one domino doesn't work out. Yeah, what if she stays home once you guys have kids and you go, oh my gosh. Well, we projected that her income would be a hundred thousand by now. This totally screws up our plan. So I would move real slow and realize you don't need the lifestyle that her parents have today. At 21 years old, it's okay for it to take a while. That's actually healthy.

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