The Ramsey Show - App - $1 Million In Student Loans?! (Hour 1)

Episode Date: February 27, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work they love, and create amazing relationships. I am Rachel Cruz hosting this hour with Jade Warshaw, and we are here to take your calls. And you can call us at 888-825-5225, and we'll be answering your questions on life and money and career, relationships, all of it, all of it. So let's get to the phones this hour. We have Amy in Pensacola. Hi, Amy. Welcome to the show.

Hi. How are you? Welcome to the show. Hi. How are you? We are doing great. How are you? Good. How can we help? I'm really, really excited to be on the phone. I have a bunch of questions, but my husband and I are definitely in need to help with

overall financial plan. We have more than over a million dollars in debt. What's it in? What's the debt in? Well, we went through a really long school life. Okay. So our student loan was a million when we graduated. Oh gosh wait you can't just cruise past that you got to tell us more what what are your degrees in amy so we are both in dental specialists so you know college well we actually didn't have any loans for college dental school we had loans specialist residencies we actually didn't have loans because my husband served in the military. So they pay for that. So just dental, four years of dental loan, we have a million dollars together.

Okay, but you earn a lot of money, right? I sure hope so. So now we came down to like $750,000. So we're proud of it. But since he's in the military, we don't actually earn that much money. But the good news is he's getting off of military and we're going to start a new job where we should, our minimum income will be about 600K. Okay, so wonderful. That's good. Is this a business that you're opening a practice together?

Is that what it is? Actually, no. So we wanted to make sure like our life is in a little bit less of a mess before we even think about opening our own. Sure. That would require a lot more capital. So you just said we, so I didn't know if you were working together or you're just going out and getting separate jobs.

We are working together in a practice together, but we don't own them. And combined, you'll be making $650,000. That will be a minimum, yes. When does that start? Summer. Okay, so soon. And these are guaranteed jobs and salary, like this is what you're going to make? Yes, so it's a per production. And these are guaranteed jobs and salary. Like this is what you're going to make. Yes. So it's a production.

So, you know, that's going to be a minimum. And if you make more, you know, you're going to get more. Well, that's the great news of this story, Amy. So for you guys, I mean, I would work to live on 70K. Uh-huh. And you throw everything at this debt and you get it paid off in a year and a half and be done and then go right off into the sunset making $600,000 a year debt-free. Like your numbers sound really big but ratio-wise it's the same as the person who calls in and makes

$60,000 a year and has $100,000 of debt. Yep, that's right. It sounds a lot because a million dollars is just a big number, but the ratio is the same. How are you living right now? Tell me about your numbers right now. What does rent cost? What are you bringing in right now? So that's another question. Thanks for asking because that will be my next question

because we now technically own a house but not pay off. Okay. So we are planning on, well, in the beginning, before I started listening to you guys show, I wanted to either rent this place and buy another place in our new job will be, because we have to move, and buy another house. But then I was thinking that our ceiling was so high, we decided to sell this house, pay all the mortgage. If you sell it, what will it bring? It doesn't bring much because our financial advisor told us to pay as minimum as possible,

so we actually didn't pay that much off. Okay. We bought this not that long ago actually not even three years ago so we are trying to sell this and then okay but amy talk in real numbers because right now you're saying like it's it's all kind of up here i want to know real numbers if you buy if if you're moving give us more details if you move where are you moving from and then where are you moving from? And then where are you moving to? If you sell the house, how much will it bring? And what do you

plan on doing with that money? Give us a few more details so we can really dig in with you. So we have a mortgage still left for about $370,000. Okay. So you owe $370,000. If you sell it, how much will you take home, do you think, after the sale? Maybe $40,000. If you sell it, how much will you take home, do you think, after the sale? Maybe $40,000. And that's after fees and whatnot from the realtor and everything like that. Okay, so the $40,000, you're thinking you're going to roll that into a new mortgage when you move this summer for this job? Is that what you're thinking?

We were thinking that, but now we're thinking that maybe we should just rent a place. I'm thinking that too. Yep. Yep. Yeah. And that's $40,000 more to the student loan. Yay. That makes some progress.

Yeah. So Amy, here's going to be your struggle. It's not going to be income. And usually when we're talking to people like this, we're like, you got to get side hustles, all this, all this. And honestly, with what you guys have, you can have this paid off in a year and a half. Yep. But your problem is going to be, Amy, that you guys are going to, if me and Jade were

in this position, I would just tell you, like, both of us with our spouses, our decisions would probably be very similar. We're getting a one bedroom apartment. We're living as cheap as possible for two years. And Amy, the biggest struggle that's going to happen is you're going to get into this new job, into this dental world where people are making insane money, which is great. And they should. They do great work.

But they're going to be living insane lives. To make $600,000 a year, the trips, the cars, the out to eat, the parties, the game. I mean, everything you could imagine, Amy, is the world you're about to step into and you're not going to be a part of it. And you're going to say for a year and a half, 18 months, 24 months, we are not going to live like we make $600,000. We're going to live like we make $60,000. And I'm telling you, the faster that you can just stay in this mentality and get through this, Amy, the unbelievably better part this is going to be. Not only are you going to appreciate that $600,000 even more,

but you're done with this mess. I mean, yes, your shovel is big and a million dollars is big, but it's a million dollars, I think, to anyone. I mean, it's a gasp. It's a lot. And if you just act normal in this, you're going to keep this around for five, six years, and you'll make the payments and you'll figure it out.

But it's just going to be floating where we want more intensity and be done. And then you can go get a bad day home. I mean, you can get so much. Like, here's the upside. You can do so much with this. The upside is you're moving somewhere where you're brand new and you don't know anyone and you don't have any heirs to keep up. Like, do you know what I'm saying? It's harder if you had been if you had called us and you don't know anyone and you don't have any heirs to keep up.

Like, do you know what I'm saying? It's harder if you had been if you had called us and it was five years later and you were in this job making 650. You had the house. You had the cars. You were used to this lifestyle and you had to cut back. It'd be difficult, but you haven't even got into it yet. So you and you don't know anybody yet. There's no standard to keep up. Like you can fly under the radar, do your thing.

And then after a year and a half, you can pop out like, what's good? Let's take a trip. Let's spend some money. Amy, the faster you get rid of this, I'm telling you, the faster that burden lifts. And you guys, I'm so glad you found us. I know you're a new listener, but I'm telling you, this is the proven plan. So do it. Do it well. We're excited for you, Amy. Congrats on the big education and the big salary, but make some right decisions here. This is The Ramsey Show. All right, Jade, my favorite season in life is coming up. Do you know what that is? Tax season. Tax season. I'm just kidding.

We're both just kidding. It's the worst. And what's so hard too, Jade, is taxes can be so confusing. I mean, there's all these terminologies. Do I work with a pro? Do I do it myself? I mean, it just is a confusing thing. Yeah.

And if you buy what some tax services out there are saying, they think that you'll never be able to get a grasp on this, Rachel. They think that you're just not smart enough. You need to, you know, use them and they'll tell you the truth. But we're going to we think that you deserve the truth and we're going to tell you the truth. And so here's today's tip. If you're ready for it, you have two choices for claiming tax deductions and understanding the difference can save you big bucks. So basically, we're saying we're going to teach this to you. You can understand it. It doesn't have to be like this big mystical equation. We can help you through this.

So two choices for claiming tax deductions and understanding these differences. You can either take the standard deduction or the itemized deduction. You've probably heard those two phrases before. Both options can lower your tax bill, but which one is the best? That depends on your tax situation.

So let's take a closer look, shall we? Yes. Okay. Taking the standard deduction is the easiest one and it's the one that most people do. It subtracts a set amount from your taxable income based on your filing status. So let's say that you're single and you make $65,000 a year. The standard deduction is going to knock off close to $14,000. So you're just going to pay taxes on what's left, which is $51,000 of your income. It's like a freebie, right? It's like a discount. It's a coupon, if you will. And you can just take it and go, whatever it is. That's right. Then you get a little bit more work on the next one.

Yes. The next one is the itemized deduction. And this does take more work. That's because you actually have to subtract all of your deductible expenses from your taxable income so you're doing this one by one so you're looking at things like medical expenses charitable gifts state sales tax i'm already starting to fall asleep right now as i'm talking about this if it adds up more than the standard deduction so if it's more than 14 000 based on your bracket, it's worth it to itemize. So that's how this thing works. For more help in making sense of these income taxes and filing with confidence,

you can go to ramseysolutions.com slash tax. That is ramseysolutions.com slash tax. So great. Well done. Well done. Itemized versus standard deduction. We itemize. I itemize all day baby yes

do you yeah do y'all keep up well i i feel like i could be writing off more if i kept up with stuff but it's like the big chunks like our charitable gift that kind of thing that we like for sure just do um but i was just talking to winston about this the other night i was like man i should keep you know receipts more and like all of it but to me sometimes i'm like oh if it's 20 bucks is it worth like actually doing it but people that do it and they and who have jobs in areas where they can they can uh take some of those deductions it's worth it like you have to be a real like bean counter like you have to be like every which is the way my mother-in-law is so that's perfect she does our taxes it's great it's great all. We're going to the phones. We have a Tord in Hartford, Connecticut.

Hi, Tord. Welcome to the show. Hey, how you guys doing? We're doing great. How can we help? Yeah, so basically, I've been financially stupid for many, many years. And today, my car actually got repossessed. Oh, no.

Today? Yeah, literally today. Oh my gosh, I'm sorry. It's all right. And my biggest question is, I don't have enough money. I'm getting about four. I don't have any savings right now, but I'm getting a lump sum from my unemployment, about $4,000. And I don't really have any bills. I'm a truck driver and I'm over thousand dollars and i don't really have any bills i'm a truck driver and i'm over the road i don't pay rent or anything like that so it's very easy for me to uh table a bunch of money okay so but my my question would be what is the best approach to this should i did i owe about eighteen thousand dollars in the car okay um i think it's worth about they were celebrating000, $17,000

from my research. So, from a credit standpoint, since they already repoed it, would my best course of action is to have them sell it and have me pay the difference, which I'd be able to do, or should I get it back?

How many payments behind are you? How much is it going, or should I get it back? How many payments behind are you? Like, how much is it going to cost you to get it back? It's about four payments behind. So minus, you know, $2,000, it's paying $500 a month. Okay. Was it a voluntary repossession toward, or? No, it's just I was expecting to get the unemployment lump sum a lot sooner to pay it, and I just didn't get it in time.

Can I ask what's caused you to be late on payments in general? What got you into this cycle of being late for car payments? Yeah, I've been suffering with addiction problems for many, many years. I was a closet addict. Okay. No one really knew about it, so I was just doing the bare minimums to survive and support my habit. Okay, okay. And I'm now, you know, I've been sold for two months.

I'm trying to get everything back together again. Wow. Congratulations. That's huge. You know, we talk to a lot of people who have dealt with addiction in their story because it does usually lead to a lot of financial issues for obvious reasons. And we always want to applaud those of you that have worked this part of your life, because I think that's, that's the biggest celebration, honestly, even more so than the money. I mean,

the fact that you've stayed clean for two months and you're walking this path and doing, doing the work. Yeah. We, we very much applaud you. So we want to be able to help you with the, with the money side, which is why you called. So you're, I'm not depressed by it. I feel good stitching things down. You sound like you're in very good spirits. Like you sound super positive.

Thank you. So you owe $2,000 in back payments. What about the cost of the repo and everything like that? What are those fees associated? I don't know at the current moment. I know Connecticut State Law is $25 per day for storage. What are those fees associated? I don't know at the current moment. I know Connecticut state law is $25 per day for storage. That's the maximum.

Okay. And you just started today. I'm going to hire a repo of $500. You know, it'll be about $20. If I was to do it right now, it'd be about $2,500. Okay. But I doubt I'll get my unemployment check within the next two weeks. What other debt do you have? Tell me more about your financial situation.

Well, that's the good part. Since I've been really bad financially, I was never able to get loans or anything. I only have about $8,000 of consumer debt. $8,000 of consumer debt? Yes. Okay, is that credit cards? A mixture of credit cards, you know, not paying cell phone bills,

just, you know, regular. So you have things that are in collections Or like that you're delinquent on Everything's in collections yes everything Okay Yeah go ahead Rachel Well I know for me I mean I think a goal would be to get this car back Because you're going to be able to Sell it well I mean you'll only be in the whole

$2,000 and it's an asset For you right so Versus you'll only be in the hole $2,000, and it's an asset for you, right? So versus it just going off in the wind, and you owe $18,000. I mean, yeah, I would do what I can to talk to them and say, hey, in the next, yeah, two weeks. Are you sure that you're going to get this check in two weeks? That's my only fear. You thought you were going to get it earlier, and you didn't. It's the government.

I'm not sure. Yeah. Are you working now? Yes, I'm working'm not sure yeah are you working now yes i'm working now um how much are you making a month i make about 80 000 a year so about five six thousand a month okay so the the unemployment was just back unemployment pay like it was a lump sum they owed you on top of what you're trying to get Yeah, I've been trying to get it for two months. So it's been a while. I was unemployed for about two months. I still haven't gotten anything in the back and forth.

How many months ago were you employed? Like how long have you been making consistently 5,000 bucks a month on your own? I just got, I've been here for a month. Okay. So what I would do toward, I mean, if I were you, because like you said, it's the government you're dealing with. You thought you were going to have it two months ago. You don't. I would hate

for you to depend on something that you don't have control over for a big asset like a car that you could be able to get back and sell privately and take the difference and all the things. So if I were you, I would, you said you have no expenses. expenses I mean I would try to save I would work extra do what you can to save that 2,000 it probably ends up being you know 2,500 after the all the you know the fees that you're going to have with it yeah those back payments and try to save that within the next two to three weeks and if you get the unemployment check as well it's great that that's gravy yes but I would make a plan on my own and again this may be you working outside you know doing some extra work even outside of your day

job i mean doing what you can because i think um owing 18 000 without an asset and you're starting from zero to pay that it just seems so much more defeating yeah than yeah than getting it back right working a month but i would call i them, contact them, make a plan, put it in writing. And before you get off the phone, Christian's going to pick up and give you every dollar. That's a budgeting app. So you can see what to do with this $5,000

that you're making every month. Thing one, like Rachel said, get the car back. And thing two is get current on all of your bills. Cell phone, water, all of your utilities, get current. Yep. And Christian, throw in a total money makeover book as well to get you on this plan because we're cheering for you toward you've done the hard work. You can do this. This is The Ramsey Show. So many of the callers that we have been getting, I just feel like in recent

months have been new to the show. So many people say I've just started listening in the last month or two. And so usually when that happens, it's because somebody they know has shared the show. Maybe they've YouTubed something about money and we come up on the side. But whatever's going on, if you enjoy the show, will you share it with your friends and family? It's one of the best ways to get the word out because we want to help people all over the world now, which is amazing that we're not just here in America, Jay. Thanks to the internet and podcasts and YouTube, we're all over. And we hear from you guys literally all over the world who want to get in control of this idea when it comes to your money and the tool that it is in your life and how to put it in the right position in your life.

Because for so many people, it is such a struggle and it's the thing that controls them. And we want that narrative flipped for you. And so again, one of the ways to bring that hope and to have other people hear about this is sharing the show. So share it with your friends and family. Subscribe as well. Leave a review on any of the podcasts or shows that you uh listen to because we we read those we want to know your feedback so we are we are here for you you guys that is our job we sit in these studios uh day in and day out because we want we want you to get control get control of your money your relationships your career and all of it so all right we're gonna go to the phones and we have Joey in Manhattan.

Hey, Joey, welcome to the show. Hey, hi, Jade and Rachel. Thanks so much for taking my call. I also just want to say I'm a huge fan of you both and the show. So I really appreciate it. Oh, thank you, Joey. We appreciate that. Thanks for listening. How can we help? Yeah. So my question is essentially since I turned 18, I've been so fixated on just putting pretty much all my money into retirement accounts and like stocks. And it seems like I blinked and now I'm 23 years old, still living at home. And I essentially have not enough money to move out and or buy a house because they're so expensive.

So my question is pretty much, is it OK for me to stop putting money towards retirement to save up cash quicker? Because I feel like I'm losing out if I sell the stocks, but that might also be an OK route to go to. Yeah. Yes. Yes to all of it. So you've been living at home. You've been stacking up lots of money, putting almost all of your income into retirement savings what do you have in stocks right now uh so just in like stocks and mutual funds it's around 31 000 okay so non-retirement is about 31 000 do you have any other money saved anywhere else yes so i have um about a little5,000 in like a high yield savings and then also just $1,000 as like an emergency fund. Sweet. So $6,000 that we could call an emergency fund. And then do you have any debt? I'm guessing no. I do. Unfortunately, I have $19,000 from college.

I know that is one of the kicking bucket for me. Okay. So just the 19,000, what about a car? No, other than that, I have no, no debt. Okay. So, and how much do you, how much do you make? What do you do for a living? I'm in advertising. So I make around 62,000 per year. Okay. What do you bring home of that pre-retirement? It, it, it comes out to about a little over 45 and change after everything. Okay. So that's good. You have a good income starting out for yourself, not a whole lot of debt and you've got some money laying around,

which is good. If I woke up in your shoes tomorrow, Joey, I probably would liquidate the non-retirement stocks for sure. And I'd keep the, I keep the thousand dollars set aside that you have and i take the the stocks and some of your emergency fund i'd pay off the 19 000 and then with what's left i'd say okay this is the beginnings of my three to six months of expenses

and so the way that i would calculate three to six months of expenses for you since you live with your family is i would start looking around at places that i want to rent and i'd go okay if i were to rent this place how much is it going to cost me along with you know food and groceries and everything like that and i would build a three to six months of emergency fund based on those numbers because the fact is at some point you are going to move out and you're going to want that emergency fund to cushion that lifestyle right that's true fair enough so yeah so so as we're looking at these numbers i think if you you'll have to pay some taxes on when you cash out the stocks but i would go ahead and just do that um and you have 5 000 in the high yield so i think with everything left you'll probably have i, I don't know, around $15,000-ish. So that could just be your starter emergency fund. You may,

as Jade said, as you start pricing out some other things, you may want to bump it up a little bit more. But I would keep that in a high yield savings account and with your $1,000 emergency fund. So you'll have anywhere from $15,000 to $17,000 and keep that in a high yield savings. Kind of earmark that as your emergency fund. And then, yeah, I think, Joy, your next best step is to be looking around. And yeah, you may not want to buy right now, whether it's going to take you just forever

for a down payment. But renting and I think getting out, I think that's a great plan. I think, you know, once you kind of hit that adult stage in life and you have your own job and all of it, you're kind of itching. And you're a smart guy.

I mean, you've been investing a ton, which is amazing. But I would just let that money work for you. And since it's not retirement, honestly, I would not put them in single stocks. I would just do something safer with an emergency fund. And then once you kind of figure out, okay, where am I going to live? Then that's when you can press play again on retirement and start putting 15% of your income into that. So if you had an ideal timeline, what would it be to get out of mom and dad's house? Cause I always like having a clear, I mean, the numbers are going to speak to that, but. Yeah. I mean, ideally it would have been yesterday cause mom and dad's spaghetti and

meatballs are getting old, but probably in the next year or two. Okay. So what I would suggest in that year or two is start paying your mom and dad something so that you can show renters history, which is going to be helpful to you, A, trying to get a place on your own that you're renting, or if you do decide at some point that you're going to come out of this and buy, being able to show 12 months of rental history is really important, especially if you've paid off this car and you've gone to the point to where your credit score disappears because you don't have any other money borrowed. That's going to be really important for you. Does that make sense? Okay. Yeah. So in terms of renting for my parents, is that something that

they would have to claim on their taxes? Like how does that go on record i would just it's it's going to be something that you're going to be able to show this money came out of my account whether i wrote him a check for 300 or whatever it was and they cashed it and it was for rent and so you're going to be able to show that as a renter's history and it's just something that when whenever you buy a house or even sometimes try to get an apartment without a credit score they want to see that you've paid some level of history some level of history and that's just going to be helpful for you but and i would and i never thought about that yeah and i probably would too joey you know maybe be a little bit more aggressive on your timeline of getting out of your parents house

you know maybe do it in six months eight months love it but i would i would i would because i think it's just going to be you know i think it's just good for you and then that's when you have to start making these real decisions where you're like okay I have rent due do I is a salary gonna support me do I need to be looking you start making other critical moves in your life to keep you sustained which I think is really important so thanks for the call Rachel real talk yeah let's go back in time you're 23 years old yep there's no Winston in the picture no there is just well let's pretend oh in time you're 23 years old yep there's no winston in the picture no there is just well let's pretend oh i was like there was i was a baby when i you're just a single shoddy yes yes are you gonna are you dating or going going with the guy who lives at mom's house

it would be a want want situation it wouldn't be a i'm not like a black and white deal breaker yeah it's not like a absolutely not um but yeah there there is a uh yeah there's a little piece to the puzzle a little bit of like a huh okay all right you want to know more i want to know more versus if it's like oh no i'm out on my own doing my own life have my own life have my own say there's a level of responsibility there that i think that's another thing when you live with your parents it's these it's these parts of life that you don't even think about yeah that you have to think about when you're on your own I mean it's everything from having milk in the refrigerator to I mean whatever it is but like there is so much that you're like oh my gosh I have to problem solve a lot in life a lot more when it's this situation so 23 years old we're what about you what about you well let's move the timeline now he's 26 oh yeah joey's 26 yeah joe you gotta move out once the timeline the older

it gets it's like it becomes less of like a huh yes and more of like a and you know what the saving grace where we sit today in 2024 the housing market's crazy the rent all the right people like that like we do live in a crazy time. But a roommate's different than living with parents. Oh, yeah. I'll take a roommate all day. Get a roommate, Joey. That's a great idea.

I know. We have to keep it real. It's tough out there, Joey. You can do this, though. We're glad you called. This is The Ramsey Show. Welcome back to The ramsey show i am rachel cruz hosting this hour with jade warshaw and we are taking your calls up next we have tate in montgomery alabama hi tate welcome to the show thank you guys thanks for taking my call absolutely how can we help

well first off rachel you and george only on Smart Money Happy Hour, just to throw that in there. Oh, I'm so glad. That's a fun podcast. We have fun. We have fun on that show. Me and my wife, we're on Baby Step 2, and in the past seven months have paid off almost $21,000 in consumer debt. Nice. Congratulations. Thank you. And so we've got two car loans left and we're trying to figure out if we should just stay intense like we are. Um, and we can be done according to the debt snowball calculator by next April. Um, or if they're, you know, we get the bug of being even more intense and think about selling one and trying to pay cash for another one and i just wanted your wanted your thoughts on that

yeah okay give us some numbers what what do you owe on the first car what's it worth and the second okay okay the first one we owe um 29 000. And I'm actually upside down on that one. About between $8,000 and $10,000. I could sell it and make probably $20,000 on it. Okay. And the other one, let's see, we owe $21,000 and it's worth about $30,000. Oh, wow. Okay.

And how much do you guys make a year? $150,000. Okay. And how much did you guys make a year? $150,000. Okay. What's with car number two that it's worth so much more than what you owe on it? Did you put down a big down payment? Yeah, we actually bought a kind of brand new car right after COVID hit. And found a good deal and traded in. Family got bigger, so we traded for a bigger one and had a really good equity on the car we traded in.

So that one feels like a no-brainer to me since there's money to be made on it, right? Right. I mean, honestly, Tate, there's a part of me, I would probably keep the one that's upside down. I mean, it's $30,000's a part of me, I would probably keep the one that's upside down. I mean, it's 30 grand, but you guys make 150. And yeah, I mean, you're not out of sorts with the amount of debt that you owe compared to your income. We don't want it to reach over that 50% of what you owe

when you guys aren't there. You make 150, you owe about 50 on your cars. So again, if you guys want to just to buckle down and say, hey, for the next nine to 10, 11 months, we're going to pay off these cars and we're going to

stay gazelle in tents and all of it. But, you know, you've paid off 21,000 so far, which is incredible, but you got

another 21,000 and another 29,000. So it's like, how much do you love these cars or how much do you just want to be done? So if I were you,

I would just be done with the 21,000. Make nine, go buy a car, be done. I'm just you i i would just be done with the the 21 000 make nine go buy a car be done or just curious selling both yeah i have my my wheels are turning i'm just giving you options i'm not saying that you have to do this but i'm wondering what it would look like because basically the amount that you could sell car number two for is the amount you're upside down in the other car so if you wanted to like clean slate this in some way, but that would cause you to...

Have to buy two new cars. Or at least one decent one that fits the whole family. And then you're starting with cash and you're just building up from there. You're not in a rush, so there's time to think about that. Like in the next six months, how much money could you save up

to replace one of these cars in cash? I mean, we're probably, let's see, probably around $10,000 to $15,000. So that's kind of interesting to me. Like there's some interest in saying, okay, if we continue paying our payments and maybe even a little bit more on all these for the next six months, we can look up and say, okay, we feel good about this. We've got 10, 15 grand saved. Let's sell car number two. Let's take the money from that. And let's clear the upside down on car number one. And then let's buy ourselves a $10,000 van in cash. And now we're off to the races. We have not a payment in the world. And now in the next six months, we can save up another 10 to $15,000 in cash flow, a second

vehicle, which would cause you to have a six-month limbo when you're a one-car family. Yep. It's just interesting to think about. You have options. Yeah. or newer quote unquote newer to you nine thousand dollar car and a paid off car in 12 months or what jade said you're out of debt that much faster and in 12 months you have two newer car two cars again that are new to you but you're out of debt faster so it's kind of like do i want to be out of debt faster or do i want to be saving for a car faster but in a year you get to the same point hopefully

still having two cars that's right and no debt but which avenue do you want to take it is interesting math it kind of is like one of those is it a coincidence or is it not that's about like what hopefully still having two cars and no debt, but which avenue do you want to take? It is interesting math. It kind of is like one of those, is it a coincidence or is it not? And it's about like what you value, like a little bit of what you're valuing in the moment. How old are your kids? Five and two.

Five and two. Yeah, I mean, listen, when you have the option, it's good. Like whoever's driving the kids around most might be like, I'm fine with paying off this car that I have because it's a nice car and it does what I want to do. And I'm fine paying that car off in the next six months or however long it's going to take as opposed to the plan that I laid out.

So you and your wife have some things to talk about. Right, right. And what's funny is we have talked about all these scenarios we're just trying to find a oh you wanted us to say you need to do this one i do the one that i laid out but i'm not saying it's right i'm just saying jade would do that i would probably lean towards paying off the second i just i wouldn't want to just i wouldn't want to be stuck with these two cars and it take a year 14 months to just be paying off a car i would do one drastic move if it were me so i would probably pay off that second car get 9 000 get another

car for that and then work my butt off and pay off that first car the 29 000 because what kind of car is it uh the 29 000 uh-huh i'm just curious. It's a Toyota Camry. Okay. Okay. I just have a hard time with 30,000 for a Camry. I don't know why. I do. I'm like, oh, let's get something else. Some dumb decisions led to being upside down in the Camry. Okay.

I see. I like Rachel. You know what? Now that I'm thinking about it, I do like Rachel's option because you get one car paid off basically as soon as you can sell it, which is great. And you get it replaced with a cash car. And then the other loan even if you wanted to keep both tate i mean not to keep muddying the water for you again from the mathematical standpoint you guys could just work hard and pay these two cars off but but what jade and i are saying is that amount of sacrifice for a car is not worth it for me i would cut i would cut that time in half because i don't want to sacrifice my life that long for a car so i'm going to drop one of them pay the other one off yeah and keep going not for a camry i can't sacrifice for a car. So I'm going to drop one of them, pay the other one off. Yeah. And keep going. Not for a Camry. I can't sacrifice for a Camry. I could sacrifice for like a Tahoe or like even a

Jeep Wrangler, Rachel. There you go. There you go. Oh, I don't know if we helped you, Tate. We may have confused you even more, but that's, um, yeah, again, you're not going to go wrong. You're doing the plan. You're doing it well. And the point here is that you're actually working a plan T and you're going to look up in 12 months, your life is going to look different. It's just a matter of how fast you want to do it. So yeah, I think, I think getting one of them off the plate just feels like a whoo. Okay. We're, we're making it because you know how hard you've worked to pay off that first 24,000, $21,000 that you guys have already paid off. Right. I mean, it takes a lot of intentionality, a lot of work just to do that. And the question is, do you want that again for a car?

Listen, I'm of the mind of anybody listening. If you're in debt and you have a car worth $20,000 or more and you can sell it and you're not upside down and if you could possibly make a profit, I'm taking that deal just about every time because it's easy money to get back. And $20,000 is a lot of money. Like sometimes we think, oh, it's just a car. It's $20,000. I'm like, no, if you have $60,000 of debt, you sell off a $20,000 car. Now you're only in $40,000. I'm taking that bet every single time. It's not a bet. It's a deal. I'm taking that deal every single time. Yeah. Because that is the, if there is a silver lining when it comes to the car debt if you're not upside down

is there is an asset to sell right like with credit card debt yeah you can look around and see the crap that you bought that maybe you can try to sell but sometimes you paid for an experience that you can't sell that right a vacation or something um so that is when you have those assets that you're able to offload to get you further in this process, it is. And it is amazing to me, Jade, the amount of people we talked to who have done this,

they've sold the car, they've done the sacrifice. One of the comments that we hear a lot is like, we just didn't realize that we didn't need all this stuff to begin with. Right. When you don't live, when you live without it and actually know that you can have an incredible relationships in your life, you can have all these other parts of your

life that are great without all the crap. You realize, oh my gosh, I'm just fine. We can do this. We can do this. So we are cheering you on Tate. You've got this. You've got this. Well, thanks to all the guys in the booth making this show happen. Jade, thank you. Always being a great host with me. And thank you, America. We'll be back. you