The Ramsey Show - App - A Rundown on Retirement Accounts (Hour 1)

Episode Date: August 16, 2019

Chris Hogan, Retirement, Debt   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE   Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Sitting in for Dave, I'm Chris Hogan, and America, we are going to have some fun. So here's the deal. If you've got a question or you've got a comment or you've got something about money that you can't wrap your head around or you want more clarity, I want you to call me. The number to call is 888-825-5225. Again, that's 888-825-5225. Or if you prefer, you can hit us up on social at Ramsey Show.

We're excited to talk with you, America, and we want to know what's on your mind and what questions you have. We're here for you. So I'm jumping on the phone. I've got, let's see here, Joe from Canada on the line. Joe, how can I help you? Hello, Chris. How are you today? Oh, I'm focused and not finished, my friend.

How can I help? Well, I had a question for you. I'm a federal employee, and I have a pension that is sitting there ready for me. Okay. I'm just kind of wondering on what you would do if you were in my shoes. There's about 400K in there right now. Okay. And I can get a transfer value out. I don't know if you know what that means, but I can just take the bulk of it out. 140% of that, so 165 will have to remain in a registered plan of sorts, and 240 would come to me for free. The problem that I'm dealing with, I would like to do that and exercise that because I know that Dave teaches to take your pension out whenever you can because

it'll do a lot better outside of the plan itself. That's right. But my stipulation is I'm 48 and I'll be 50 late next year. I have to exercise this right by age 50, meaning for my particular case, I have to quit my job in order to do this. That's the stipulation they have. If you're 50 and you're still working there, party's over. You're locked into the old, ugly stuff.

Okay. I'm just kind of wondering, what would Chris and Dave do? Okay. Well, my friend, this is a complex situation, and you've got to understand all the variables. So how long have you worked for this company?

13 years. 13 years. Okay. And tell me this. What is your net worth right now? Net worth would probably be, do I count this 400? Yes, sir. Yes.

Okay. So let's call it about six. Okay. No, five. Okay. All right. And what baby step are you on? Are you familiar with those?

Yeah. Yeah, I am. We're on baby step four, five, and six. Okay. All right. All right. And what baby step are you on? Are you familiar with those? Yeah, I am. We're on baby step four, five, and six. Okay. All right. And how much is left on the home? 120. All right. And so the way you're making decisions right now, how much longer, Joe, were you planning to work?

Well, I'm only 48, so I'm planning on working. I mean, I could continue to work there, but as soon as I cross my 50th birthday threshold, I'm locked in, and it's like I don't want my family to suffer because of this decision that I've made in staying where I'm at when I could have put that money to better use. No, I understand. Okay, so you guys are on four, five, and six. You're investing right now. How many kids do you have? I have two children.

They're late teens. Okay, so college is on the horizon for you all. Right, yeah. Okay. My children are taking care of that a little bit by themselves. Okay, all right. And what line of work are you in, Joe? IT.

Okay, all right. And so you look at this, you've got to make a business decision. You have a pension, $240,000 you could pull out without any kind of penalties, but you'd have to do that within the next two years. So here's what I'd do if I'm in your shoes. I'm going to start to think about if I'm not working there in the next two years, where am I going to? What kind of income can you command out on the open market? And begin to kind of walk through and understand that decision and where you are. There's no doubt. You guys are not far from being millionaires.

You're about halfway there. But if you can get that $240,000 out and start to invest it on your terms, now you can really start to grow that money. I would do my research. I'm going to sit down and really start to grow that money. I would do my research. I'm going to sit down and really start to understand where it is. And it also depends on how much do you enjoy working at this company. Is there an opportunity for you to continue to be able to advance and move up? And you and your wife really sit down and talk about this. This is not a decision you go into quickly.

This is something you want it to be really well thought out and well planned so it can kind of keep you on the forefront. But I like where you are. You owe $128,000, you said, left on the home. So there's no doubt you want to continue to work. I don't want you to retire and bring debt with you. I want you to move forward with options. So Joe, thank you so much for your call. I got a social question in on twitter this says hogan i know you're an outdoors type of guy well i mean outdoor ish okay we might go with that i'm not hunting down anything or whatever but here's the deal he goes i love mowing my own grass but i don't have a mower i currently pay someone to mow my grass for me but i could get a loan for a lawnmower and

do it myself because i'm pretty sure my payment would be less than what I pay the lawn care guy to do. What do you think? That's Taylor on Twitter. All right, Taylor, here's the deal. First thing is you lost me because you said loan and payment. That's not a direction you want to go. I want you to be allergic to debt. And there's nothing wrong with you cutting your own grass.

So here's what I would do. I'm more apt to go over to a neighbor and pay to rent their mower less than what you're paying the person to cut your grass. You get outside. You get a chance to cut the grass. And you start to save up for a mower. But I don't want you rolling into some hardware store to try to get a payment. That's the option. That's what I would do.

It keeps you away from a payment. It gets you outside cutting your grass. And it allows you to be able to enjoy the freedom that you have right now so that's exactly what i would do taylor thank you for your question all right let's see here i've got uh on line let's see here line three i've got adam adam how are you man i'm doing just fine sir how are you oh i'm focused and not finished buddy buddy. What's on your mind today? Well, just like you, man, I'm focused. Ever since I started listening to Dave, it's either being focused or nothing. That's good. I have a plan.

I just kind of need some confirmation. I'm 30 years old right now. In about nine months to a year, we will have no debt. House, everything paid off um and my company currently offers a 401k with a with a match okay what's the match go up and i want to say six percent okay go ahead and i was looking into ross a roth for me and my wife both because i understand those are tax-free and so i was going to invest in both me and my wife with the roth versus just do the 401k or i or i thought about just saying screw it and just doing both of them all three of them doing

the roth for me and my wife and doing the 401k and getting out of this place when I'm 55. Okay. I like that you're focused. Does your company offer a Roth 401k version? I will look into that. What if they do? What if they do? Okay.

Well, here's the deal. Anytime you hear the word Roth, I want you to understand, America, you're talking about tax-free. This is after-tax dollars, so this money's going to grow. The government's not going to touch it anymore. They can't get their hands on it. So if you have a Roth 401k option, I definitely want you to check into that. But here's the deal. I want you, if they don't have a Roth 401k, I want you to invest up to the match. In this example, it'd be 6%. And then from there, take the remainder over and do the Roth IRA. Because Roth, our match beats Roth. That's free money from your employer. But check with them. If you have a Roth 401k option, that's definitely the direction you want to go. We got to invest America. The government's not

going to save the day. We have to get our own cape. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually

supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Hello, America. You are listening to The Dave Ramsey Show. And before the break, we started to dig in and talk about investing.

And I wanted to take a minute to really start to unpack this. You see, investing is so important. If we don't put money aside and grow our money, we're not going to have any money to spend. So first and foremost, we've got to get ourselves out of debt, begin to build up that emergency fund of three to six months of expenses. Then you want to invest 15% of your household income toward retirement. Now, here's the deal. You've got all kinds of vehicles out there that you can invest in. But I was talking about traditional. Now, a traditional 401k, this is that you would find at a typical workplace, which simply 401k simply means you're able to put money aside for your future. That's

all that means. But a traditional 401k is pre-tax. Now, what that means is you're going to put money in, but you're going to have to pay taxes on it later when you take it out. That's what pre-tax means. So when you hit 59 and a half is when you're eligible to pull money out of a 401k without penalty. Okay, so that's a traditional 401k. But then you have this thing called Roth. Roth, it was brought in in 1997 by Senator Roth, an amazing gift to us financial people and all Americans because we then have an opportunity to invest for our future tax-free. Because Roth uses after-tax dollars, so you've already paid taxes on the money. Now you can invest it, so that means it's growing tax-free. The government doesn't mess

with it anymore. So you have that option. So if you have a Roth 401k option, this is a beautiful thing for you to take advantage of. Now you need to go into it with your eyes wide open and know what's going on. But the previous caller said that his company had a match. Now, when you hear match, we're talking about free money, America. We need to look at this and acknowledge it. So I told him he had a 6% match with his company. That means he needs to invest up to the match. That's 6%.

So he's getting 6% free. But then we want people to be at 15%. That's the benchmark for you to put away for your future. So he needed to invest 6 but he also has the after-tax advantage of the Roth. So just helping people to understand these options. And here's the deal. You don't have to go at this alone. We have smart investor pros that are located all around the country that are able to help you. And I also have an investing guide that I want to tell you about that will break this down even further for you. All you have to do, it's called the Everyday Millionaire's Investing Guide. It's a step-by-step playbook for building wealth. It's a 30-page guide, and it's absolutely free. All you have to do is go to my website, chrishogan360.com slash start now. Again, that's chrishogan360.com slash start now, and you can start reading this information, sharing it with other people, and really starting to move forward.

It's really important that we prepare for our future and that we don't sit around waiting and hoping someone else will save the day for us. That's not going to happen. All right, I'm back to the phones. I've got Angela on the line. Angela, how are you? Hi, Chris. Hello there. I'm doing well.

Good. My husband and I, we're on baby step seven. Okay. Salary-wise, we gross $100,000 a year, and then we make about $20,000 on a cattle herd we have. Okay. My dad is a farmer-rancher who's ready to retire, and he would like to sell us a piece of property. My question is, is how do we structure the transaction in a way that aligns with our beliefs financially but also helps provide for his retirement? Ah.

Has your dad, Angela, does he have money saved for retirement? No. Okay. All of his money went into his farm. Okay. How much land does he have on this farm? Well, the piece he's trying to sell us is 220 acres, and then he has another about 80 acres, and this is all pasture land. Okay.

So he's trying to sell you all a majority of this farm. Well, he's already sold us a third of the overall and my sister a third of the overall, too. Okay. What's the price on this 220? It's $1,400 an acre. So, $308,000. Okay. Now, here's my question, Angela.

Do you and your husband, what's your husband's name? Jason. Do you and Jason have $308,000? No. Okay. All right. So, and looking at this, you guys are on baby step seven, so that means you're completely out of debt. You've got a fully funded emergency fund.

Yes. What's the time frame your dad's trying to get this deal done? Well, we would like to do this within the next year. Okay. All right. And so your household income is how much again? Gross, $100,000 on salaries, and then $20,000 when we have a small cattle herd. Okay.

How important is this deal for you? Well, there's some emotion types in this deal. Yeah, it is. Yeah. um well there's there's some emotion types yeah it is so yeah uh when dad sold us a third earlier he gave us a significant discount on that 300 acres okay well your dad understands a couple of things you know the bottom line you guys need to have this needs to be treated like a business decision and what i mean by that is you're right emotions are there on both sides, but you can't go into this. This can't be an emotional decision.

This is a business decision. And I think talking with your dad to find out, A, the market value, the sales price, but here's the deal. Now it really boils down to where are you guys going to come up with the $308,000 if you and your husband decide to do this? You see, I want you all to approach this with the $308,000 if you and your husband decide to do this? You see, I want you all to approach this with your eyes wide open. Now, he wants the owner finance it for us. That's what I was going to come to because that owner financing is an option to where A, you all are able to pay cash. He's able to have some income coming in and he knows this land is staying in with the

family. Now, with this owner financing, I would utilize an attorney to draw up this agreement because it allows you to get your feelings down on paper because people can get amnesia. And I'm not saying your dad might have amnesia, but I just know how people can be. We don't want anyone to get confused, meaning your siblings or anyone else. It needs to be a legal binding contract that you all are entering into. But the owner financing is a way for you all to kind of be aware and everyone's on the same page. And if something happens and you all aren't able to pay this, he still retains the right to the land.

So I would call that a win win without debt even entering into the picture. But I'm going to say this again. It's going to be really important for you and your husband to not only sit down and you all have this agreement because I don't want your husband to feel obligated to do this just because this is your family. So this is a you all's family decision. Go into it with your eyes wide open. Get on the same page.

Do your budget. If you all aren't doing every dollar you need to, it's the best budgeting tool on the planet. But even though you're out of debt, you've got an opportunity to really have an impact. So you sit down and start to think, how much could we pay dad each and every month to be able to attack this $308,000 owner financing purchase price to own the land? And I think it's really important. And I want to encourage you with this also, Angela, don't make a today decision. I want to encourage you to make a two-year decision. What I mean by that is, is that you want to make a decision today that you'll look back on in two years, and you'll be glad that you made that decision. I think with the land you all have already bought, you've already kind of been down this path.

You're bringing in $20,000 from your cattle and things that you're doing already. So I don't think you're going into this blind, but we want to be clear. And we don't want emotions to get in the way of business. So I would really encourage you all to have that kind of conversation. And America, for anyone else out there, I think having the taking the time to really slow down and downshift

and taking that two-year decision approach, it helps us to rise out of our situation and really look forward. It helps us to start to look at things a little bit different because we don't want to get caught up in the here and now. We want to do things that set us up to be successful in the future. And so obviously, Angela and her husband have done a fantastic job of getting out of debt. They're paid off the house. They're all the way down into baby step seven. So I know they know how to focus and I know they're

not finished. But if we can do this and really start to look and think about how we're going to approach things, I think it can set us up for success. And I want you to hear me. No matter where you are right now, no matter what kind of financial situation you may find yourself in, you may have up to your eyes in credit card debt. You may have car loans and you think, Chris, I can't fix this. Yes, you can. I meet people all across the country that have been in that scenario. What you have to do is decide. Decide may have car loans and you think, Chris, I can't fix this. Yes, you can. I meet people all across the country that have been in that scenario. What you have to do is decide. Decide that you're worth it and decide that your future is worth it. And then you start sacrificing some stuff. We're

Americans, my friend, not Americans. This is The Dave Ramsey Show. Thank you. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in for Dave, but we want to hear from you. So if you've got a question, I want you to give us a call. We'd love to talk with you. That number to call is 888-825-5225. Again, that's 888-825-5225. Or if you prefer, you can find us on Twitter or any social media platform, at Ramsey Show. I'm giving a shout-out to all the social media folks out there,

and they're sending in questions. We took one from Twitter earlier. Now I've got one from Lauren on Facebook. And she asks, what is the best way to do necessary home repairs while still on Baby Step 2? So what's the best way to do necessary home repairs while still on baby step two. So what's the best way to do necessary home repairs while still on baby step number two? Well, Lauren, I want you to know this. Remember, when you're on baby step number two, you are battling to get your money back.

You see, what you've done is you've realized that the credit cards, car loans, all those places, all of them had a plan for your money. So you're trying to get your money back. But I like how you did this. You tried to be sly on me and you said necessary home repairs. And we need to talk about this a little bit because I, in years past, have gotten confused. Like I've confused want versus need. Like have you, you know, I mean, I got people out there watching me right now out there watching the show. And as soon as I said that, everybody kind of chuckled and the married couples even elbowed each other because that is a discussion we've all had. Because you can want something so bad that you feel like you need it.

For example, a bathroom remodel or a game room. Right. So here's the deal. If it is truly necessary and it's a home repair, Lauren, you're going to do it with cash. You're going to set aside money. You're going to be very intentional, but I want you to scale back from something else for meaning you already shouldn't be eating out much, but you're going to look for ways to bring in extra money. Are you taking on an extra job? Are you selling some stuff? And you're going to do it very cautiously. But again, I want to point to necessary home repairs necessary for me. I'm thinking like roof, right? I'm thinking the

heat, the air, things of that nature. We don't want to get that confused. We're not doing anything cosmetic. So you do it with cash. You do it very slowly and you do it intentionally. That's what I would say. All right. I'm going to the phones here. I've got Judah on the line in New York. Judah, how are you? Hi, Chris. How are you? I am fantastic, my friend. How can I help you today? Good. I'm 19 years old, and I've saved around $4,000 soon to have $9,000 over the next year. Should I save it for real estate, or should I invest it now? And if yes, what then?

Fantastic. I'm sorry. We must have had a connection issue. How old are you? 19. I like you. Who taught you about money? My dad.

That is fantastic, buddy. Like, how did you save this money? What did you do? So, like, spare jobs here and there. I'm, like, in school currently. So, like, here and there, I would just grab a job and try to put aside, you know, summer jobs and stuff like that. Well, I'm going to tell you something. You're doing a fantastic job.

So, you're saying you're going to have around 9,000 at the end of the year? Yeah. That's amazing. Okay, what, are you in college? So, I'm in, like, a religious school., so I'm not really going for any degree yet. I'm currently doing stuff like that. That is fantastic. Listen to me, the habit that you have of saving money,

this is a habit, Judah, that's going to take you somewhere, buddy. I like this. I like the idea. Are you working full-time or part-time? I'm working now. I'm working full-time during the summer, and then I'm working part-time during the idea. Are you working full-time or part-time? I'm working now. I'm working full-time during the summer, and then I'm working part-time during the year. Okay. Here's what I want you to do. Your parents have done an excellent job of teaching you about money.

I want to take this a step further. I want you to have a conversation with them about investing, and I want you to go sit down and talk to whoever their investment professional is, and they can be with you or you can go by yourself and have a conversation. But where you are right now, you've got an excellent opportunity because you want to keep an emergency fund. That's if life were to happen. You've got a little pile of money there to be able to help you. But starting to invest right now at your age is absolutely fantastic. It puts you on the path to absolutely become an everyday millionaire.

And as you get out and you get that full-time job and you participate in the 401k or the 403b and you have that habit of staying allergic to debt and saving and investing, you're going to be able to do anything you want to do. And most importantly, you're going to be able to build wealth and be able to give to be a blessing to other people. So Judah, I'm proud of you. Matter of fact, I'm going to send you blessing to other people. So Judah, I'm proud of you. Matter of fact, I'm going to send you my new book, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too, because you have already the skills and the traits to put you on that path.

Fantastic job, my friend. Keep up the good work. All right, I'm going back on the phones here. I've got David in Florida. David, how are you? Hey, Chris, how are you? Oh, I'm focused and not finished my friend how can i help you uh very well uh just briefly i'm 55 i'm retired

uh our primary residence is paid for i have two paid for rental homes um that are currently occupied okay and so i have a question about an old pension fund. I used to work in health care, and that fund is now closed, as I understand it. It's no longer being participated in. Okay. And not only that, I understand that it's disallowable for me to contribute to that fund anymore. So this little bit of money is sitting there, and as I understand it, it's not in any kind of a growth fund. So I really think it's just sitting there and not doing me any good. And so at my age, yes, I could take a disbursement, but I'd be looking at like a 30% total, you know, 20% tax and 10% early withdrawal.

Right. So sum total, we're looking at about $16,000 that are in just this little old pension fund that I had. Okay. And my question is, what do you think I should do with that money? And, and also is that rollable to something else or, you know, is there any kind of fund that you would recommend, uh, you know, or, uh, uh, a medium for me to put that money in? Okay. Fantastic. And David, tell me this. Are you familiar with the Baby Steps? I listen to your programs every day. But my wife and I are in pretty good shape, and we haven't gone through the program yet.

Okay. All right. And so you still have some debt? Oh, no. All of our homes are paid for. Cards are paid for. We have a couple of minor credit cards that we keep but we pay them off every month um so essentially except for daily expenses or monthly

expenses such as you know your homeowner's insurance taxes power bill water bill okay things like that we're we We're essentially debt free. Okay. All right. Well, and I'm asking this because it's good to have an understanding of where people are sitting. Right now, obviously, with where you all are being completely debt free and being intentional, the dollar amount that's sitting in that pension fund of $16,000 is not something that's necessarily going to be a game changer for you. And you being 55, if you did have to wait four more years to be able to do something,

that's okay. But here's the deal. Because the pension has been closed, you have some options available to you. Now, you were calling from Florida, so I want you to get connected with your investment professional to be able to talk through those options, meaning you may have to roll an amount, a certain percentage over. You may be limited in how much you can roll out each year, or you may be able to completely roll it over into an IRA right now.

But I want you to go into it with your eyes wide open and understand. Now, notice I did not say cash out. I said roll over. So we're not creating a taxable event at all. We're simply moving it because right now it's stagnant. It's just sitting there. That money's not working for you. So definitely go to Dave Ramsey.com. You can click on the smart investor pro and find an investment professional near you to really start to talk that through. I'm proud of you all with what you've done as far as attacking and paying off not only your home, but all the rental properties.

That's amazing. And remember, and I have to talk about this because I talk to people all the time that battle to become debt free. But do you know how long it takes to go backwards? About 60 seconds, right? Oh, 60 seconds on a car lot or looking at an SUV or doing something crazy can send you backwards. So what we have to do, America's continue to play defense. Stay aware of the things that you're chasing down and don't ever get caught up in deserve Island.

It's dangerous and it typically brings a payment. This is the Dave Ramsey show. Thank you. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in for Dave. And we are here to take your calls. So if you've got a question or you've got something you want to talk about that's money related, want you to give us a call the number to call is 888-825-5225 again that's 888-825-5225 or if you prefer you can find us on social at ramsey show or you can send me a message at chris hogan 360 also i want to let you know a lot of people aren't aware that the Ramsey personalities, and that would be myself, Rachel, Ken, Anthony O'Neill, Christy Wright, we all travel around.

We do events in churches or corporate events, and you can reach out and find out more information by going to DaveRamsey.com slash speakers. Again, that's DaveRamsey.com slash speakers. Again, that's DaveRamsey.com slash speakers. If you're interested in bringing one of us to your event, we've got a team here that walks through and talks that through and can give you more information. But I want to share with you an article. This is from the Sporting News. It says the NFLPA, the NFL Players Association, is suggesting that players sell cars, homes, clothes ahead of a potential work stoppage. And it's hilarious.

It's talking in preparation of a potential lockout has been kicked around following the 2020 season. advice that they gave to the players and this was found by pro pro football talk includes some real life advice for players that may be living the upper crust kind of lifestyle and i wanted to share with you some of the tips that they gave for people to for other players to do ahead of being prepared financially here it says consider selling a car that you've not driven in the past six months. Really? Okay. Yeah, I think that's probably a good idea. It says, try cooking at home instead of eating out.

That's good. Adopt a weekly no spending day. Consider renting instead of buying. Sell clothes you haven't worn. Cut down on giving money to family and friends. It says, save half of each paycheck, if not more. But it also has this down. Avoid co-signing on loans.

Now, I need to tell you something. Co-signing is absolute no-no, right? Because if you do that, you're essentially guaranteeing that if this person doesn't pay for any reason, you're guaranteeing that you're going to take care of the bill for them. Now, we look at this, and as people that have been following Financial Peace University, you and I know that these are some things to do. Not just a weekly no spending day. Maybe you have a no spending weekend, right?

But we use cash. But I like how they're trying to get players to wake up and really start to engage and be aware of where they are financially so they can make wise decisions. This is stuff that we talk about each and every day. So, interesting article, again, from the NFLPA, from SportingNews.com. We'll have more information for you if you're interested. All right, I'm back to the phones. I've got Brenda on the line.

Brenda, how are you? I'm doing well. How are you? Oh, I'm doing okay as well. How can I help you? Yes, I have a question to ask you. So I am actually just received a full-time job, and the offer was $35,000. And I had student loans for $50,000, and I just kind of wanted to get some guidance as to how fast I should be able to pay this off.

You know, I want to get this paid off right away because I was actually wanting to go back to school for a second degree. But I obviously wanted to fund that, just cash. Okay. So you have student loans right now of $50,000? Correct. Okay. And that got you an undergraduate degree. What did you study?

Mathematics. Okay. And that got you an undergraduate degree. What did you study? Mathematics. Okay. And the job, are you using that degree in this job? No. Okay. All right. And so 35,000, what other debts do you have, Brenda? That is including one credit card of 1,000.

Okay. So you got one credit card. Any $1,000. Okay. So you've got one credit card. Any car loans? No. Okay. And so you're asking how fast can you pay that off? So, well, let me ask you this. Are you renting right now or do you have roommates?

Actually, I just live at home right now. Okay. Okay. Pretty nice. Okay, good. Are you paying any rent or anything at the parents' home? Okay. Well, here's my mindset around Okay, good. Are you paying any rent or anything at the parents' home? Okay. Well, here's my mindset around it, Brenda.

How much is the payment on these student loans? So actually, I just, I haven't even made one payment yet because I just got one in May. Ah. So I haven't even looked into it. Okay. Well, I definitely want you to go ahead and talk with them about what that is going to be. And I'm saying that because you starting off with this new job,

if you will hear me, you've got an excellent opportunity to be able to knock out this debt in the next two years. There's no doubt in my mind. Making $35,000, you're right now living with your parents. You need to talk with them about what it is you're going to be responsible for there. Are you helping to pay for some utilities, right? Your gas, things of that nature, because you want to contribute to the household, a dollar amount for groceries, because you've got money. You can do that now,

but I'm going to tell you something. If you stay focused and you, you send the rest of your money toward this debt. And I mean like you, you might go like get one cup of coffee with friends, right? Maybe you share it, get a straw or something. I'm not, I'm just kidding. Kinda. You can go do some things, but I want you to be intentional. You can get this debt out of your life. And this is a massive step for someone so young.

Now you said something and you tipped your hat to me. You talked about going back and getting another degree. No. Okay. Uh-uh. No, no, no, no, no, no. See, we're not going to repeat this cycle. You got a $50,000 souvenir right now with the student loans. The only way you go back to school is if you got a scholarship or if you saved up and paid cash. Don't do that. Too many people get into that mindset. And the next thing you know, they've added another 50,000 on top of the other 50,000. And so we don't want to become a professional student. We want to work in a career. So I think you've got an excellent opportunity, young lady, to really get started on the right foot and to be able to move forward. I like where your mind is, but you're going to have to play defense. I was talking about that a little bit earlier,

where you don't let your guard down. Don't go look at a car. Okay. Like seriously, don't even go on a car lot. Don't go look. Because years ago I did that and I went look at and guess what came home with me? A payment. Okay. A payment came home with me and I needed to find somebody to find me and just shake me.

Right. I wish I hadn't done that. And so I want to encourage other people. Don't fall for that trap. Whatever it is you're driving right now is good enough. Stay focused. And I'm telling you, this is a huge step. I saw a recent study that said one in five millennials expect to be paying on student

loan debt past the age of 50. Did you hear me? We've got people that are 19 and 20 years old that are expecting to pay on a student loan debt for 30 years or more. This is terrible math. And we've got to help shake up this culture to think differently about this. And so you've got an excellent opportunity, young lady. Brenda, be focused.

Attack that debt. Throw everything at it. Don't take your foot off the gas. No, it's not going to seem fun at the time, but I'm going to tell you, as you bump into friends of yours that are letting that student loan debt hang around, you'll find out what fun doesn't look like. It looks like irritation because you don't want student loan debt to get in the way of you deciding to get married or deciding to have a family. I'm telling you. So debt steals. It's not your friend. So you stay focused. You attack this debt. And it's okay if you want to apply for scholarships and look to go to school at night

as you work. But I want you to continue to work so you can save up and move out of your parents home and be a productive citizen, right? You want your own independence, and that'll come in time. But just be aware, keep your eyes wide open. Don't do anything that's not going to set you up for success in the future. Great call. Thank you very, very much for taking the time to call in America. I want to let you know, uh, financial peace live. This is the event where we travel around the country and we walk people through the baby steps. And I'm going to tell you, if you've not seen us live, you need to come check us out. We have a lot of fun and I'm not talking about some boring financial conference, right? Where, where we've got a pocket protector and a calculator. And no, no, no, we're going to have fun.

And Anthony and I are going to be traveling around and we're going to be bringing this message to several cities. We'll be in Austin, Texas on September 12th. So we're looking forward to that. Then we'll be in Tacoma, Washington on October 2nd. And then we will be in Phoenix, Arizona on October 10th. So again, we've got Austin, Texas, Tacoma, Washington, Phoenix, Arizona. Anthony O'Neill and I will be bringing the message to you and walking you through this process.

The same information that has helped millions of people across the country take control of their money to learn how to get out of debt, how to be able to build wealth and provide for themselves and their future. So we're excited. We want to see you out there. I want to thank our producer, James Childs, associate producer, Kelly Daniel, and of course, you, America. We appreciate you.

We appreciate your support. And we want to tell you to keep listening. This has been The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.