The Ramsey Show - App - Am I the Exception to Your Credit Card Rule? (Hour 3)

Episode Date: October 26, 2022

Dave Ramsey & Kristina Ellis discuss: Why you're not the exception to the credit card rule, Dealing with a toxic parent plus loan situation, Why Dave hates I Bonds (despite the hype), How much to save for college. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

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🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving and storage studios, it's the Ramsey Show, where debt is dumb, cash is king,

and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help people build wealth, do work that they really love, and create real amazing relationships. Christina Ellis, Ramsey Personality, is number one best-selling author, is my co-host today. Open phones at 888-825-5225. Folks, if you like this show, would you help us out by doing three things? One, subscribe to it on YouTube or podcast if you're doing that. Push the memory button on your radio. If you're a radio listener, make sure you've always got us tuned in.

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hey, listen to this. I did that with my friend Mike Rose's podcast this week. I was listening to it, or last week rather. I was listening to it and sent Ken Coleman, because it was all about jobs and stuff, as you might guess, with Mr. Dirty Jobs himself, right? So, yeah, good stuff. Hey, thanks for joining us, America. We're glad you're here.

888-825-5225. Bruce is with us, and Bruce is in Abilene, Texas. Hi, Bruce. Welcome to the Ramsey Show. I just want to say we love loving all of you. You guys are great. Thank you, Bruce. Welcome to the Ramsey Show. I just want to say we love loving all of you. You guys are great. Thank you, Bruce. How can we help?

Well, I started a business in the first couple of years. I used a credit card, I mean a debit card all the time, and I was having to break down anywhere from 180 to 220 transactions on my bank statement every month, and it was an accounting nightmare. Now, here's where I get in trouble. I got five credit cards for my LLC, one for seal coat, one for aggregate, one for fuel, one for asphalt, one for supplies. There's always money in the bank, and they're all on auto pay, and it has taken all the accounting nightmare away and i'm is it possibly is it possible to be an exception to the rule uh i don't understand why five debit cards wouldn't

do exactly the same thing well because i've gotten a you know free iphone i get travel you know you didn't tell me about free crap you said accounting nightmare it is and you went to five credit cards why would five debit cards not do the exact same thing for your accounting on a debit card could i have five different ones on one account yeah yeah they'd have different they'd have different numbers on them i've got 78 on one account ramsey solutions runs on debit cards that goes to show me okay well i hear you and i'll make the transition yeah and here's the thing you can do whatever you want to do bruce obviously you're not going broke from this if you're auto-paying them

and you're not carrying any balances. But what I've had to learn to do was two things, and I became fanatical about it, and I think the fanaticism helped me, and that's why I'm going to continue selling it. Okay. The fanatical thing, number one, I did was I figured out smart things that I could automate and I put auto, I put smart on auto meaning like auto, uh, deduct from my paycheck going into a 401k auto deduct from my checking account in the early days when they

very first started doing it i was one of the first ones to do it to pay my utilities always on time and i always got the discount okay auto saving into um kids college coming out of my checking account auto saving going into the roth ira out of my checking account every month so i I did smart things on auto. That was the first thing I did. I automated smart. And the second thing I did was anything that looked like a snake, it could bite me, I don't play with it. And a credit card that is a snake, for sure, that can bite you,

even though you've got your pretty good snake charmer, you've got them kind of tamed, you've got them laying in know five distinct buckets and you've got them on auto pay and all that kind of stuff you've at least smart did the auto pay that was a smart move you know but you still you know you play with snakes long enough you're going to get bit and that's the problem and so that's why i just don't have a credit card, and I haven't all these years. I don't want to accidentally end up in debt. It's just not going to happen. I know I don't owe anyone any money under any circumstances because I don't have any tools that I use in the financial world that can result in debt. It's impossible because I don't sign up.

And so I stay away from things that I can accidentally get bit with, number one. Number two, I put smart on auto. And those two things take even – I'm smart enough. I kept trying to outsmart all this crap and scheming and scamming, you know, and it'll get you. I think that's a lot of people's stories. I mean, most people who start out using credit cards, they don't think they're going to be the person $30,000 in debt.

No one does. No one does. No one takes it out it and i got ten percent off at macy's and i got the discount no one ever says and i'm going to end up on these bozos three grand for 400 years no one says that no one they just go i got ten percent off i got a free iphone you know bruce i'll make fun of you, right? Okay, whatever, right? And so no one says, oh, God, look, I'm going to go. Let's go. I'm intentionally going to go.

The average credit card right now is 22%. Ouch. With inflation, the banks helped you out. They went up, okay? Because they inflated the interest rate from 18. The average is 22%. So no one says, I'm going to intentionally go deeply in debt at 22% and then why i'm broke no one says that you're right everyone sees the points they see the bonuses and they think that they're going to be the ones that take advantage of the system they beat the

system and yet the system is still building skyscrapers they're still taking people thousands of dollars in debt yeah now i do know people that have credit cards to pay them off every month and they're not going to cause them to go bankrupt but you are walking around with a very small rattlesnake in your pocket and the small ones bite harder than the big ones i hear you know so be careful sneaky just be careful yeah i see them coming they don't they don't hold back they love they empty all their venom and so yeah it's it's a problem and so i just i don't you know i'm gonna put a home equity line of credit on my home but we're not gonna draw on it but it'll just be there in case i need a bass boat in case i want to go to disney world in case and yeah you're in case changes

later and then but you set yourself up you're playing with snakes and you put a financial thing in place that allows you to do that and um another one of these is overdraft protection we're going to set up overdraft protection you're never going to be an overdraft because it turns into a loan and guess what a hundred percent of the time that's going to turn into a loan this is what happens with it. But I'm being wise. I don't want to pay any overdraft fees. Well, here's an idea. Don't run your dadgum checking account down to zero

and actually keep up with what money's in there. Duh. Why is this hard? It's not hard. But we rationalize our butts off out there. I do it too. Bruce has done it. I've done it.

Christina's done it. We've all done it. I've done it. Christina's done it. We've all done it. The question is, what's the shortest, fastest, best path, most proven path to wealth? And it's not that. This is the Ramsey Show. ДИНАМИЧНАЯ МУЗЫКА christina alice number one best-selling author ramsey personality is my co-host today open phones here on the ramsey show we're glad you're with us. It's launch week for our brand new Gazelle debit card. This is the coolest looking debit card ever, and it is the debit card that will help you spend and save the Ramsey way.

We don't use credit cards here. The Gazelle debit card works the same as your standard debit card with the same FDIC protections. No fees. Some of these cards have more fees than a French poodle. Fee, fee, feeodle fee fee fee fee fee and you know you just don't want to get assigned up with that stuff so got built-in accountability

for your budget it ties you directly into every dollar the app and so if you're doing your budgeting app if you want to spend and save the ramsey way this is a brand new thing we just launched this week we're very excited about it no we're not in the banking business there's a brand new thing we just launched this week. We're very excited about it. No, we're not in the banking business. There's a bank that stands behind this product and is actually where your money is going. That's where the FDIC insurance comes from. The fraud protection comes from MasterCard, the same as with any good MasterCard debit card or Visa debit card, for that matter. And so go to RamseySolutions.com slash Gazelle to get started today. It's free to create an account. And, Christina, the guys in the booth, James and such,

Austin suggested that we remind people that we teach in Financial Peace University, and we were just talking about it in the last segment. You don't carry a credit card. I don't carry a credit card. Ramsey, the Ramsey way is we don't have credit cards, period, period. Okay. So part of following this proven plan is to not have a credit card. Here's what's really interesting and sad. 50% of the applications that come in to do a debt-free scream, one of the things we ask is, are you still using a credit card? 50% are saying yes.

100% of those that say yes do not get to do their debt-free scream. And a portion of those are pissed off because they're not following our plans. So they're not doing a debt-free scream here because we're not going to promote your stupid're not doing a debt-free scream here because we're not going to promote you're stupid we want to promote smart here that's what the debt-free scream is about it's about a milestone a goal that you achieved and that you are following the ramsey system and you're out of debt you're staying out of debt you're not going to use a credit card and so if you are using a credit card don't even apply to do your debt-free screen because the answer will be no. We're not going to let you do it.

And so you can get mad if you want to get mad. Go get your own show. Then you can do your own debt-free screen, you know. This one says Ramsey on it, and Ramsey don't do credit cards. So just helping the guys out in the booth because they get all the flack from you people that are mad at them. Why, when I did all this trouble to get out of debt? Now you won't let me do my debt-free screaming. That's because you're still stupid.

That's why. And so just let you know where you stand on that. And we're not doing it. We're not doing it. I don't think I'm stupid. That's good. That's fine. You go do your own.

Just go stand in your driveway and scream, I'm debt-free. But you're not coming on here and do it. Well, and the heart behind it is we want you to stay debt free forever hello right it's it's for your own good so that you know you eliminate that temptation so that you're not walking around with that rattlesnake in your pocket exactly all right our question of the day comes from blinds.com find out for yourself why blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY and you'll get the best deal. Today's question comes from Tommy in California.

In 2009, my mom took out a Parent PLUS loan for me to go to college. I also took out $70,000 of student loans. She never made a payment towards them. In her mind, it was my loan under her name that I should pick up whatever I'm financially stable. Because my mom never paid, she now owes $100,000 and is begging me to take it back under my name. I just got a new job where I make $143,000. It's a huge jump from 30 to 40,000

I've made for several years, and I can finally make a dent in my own loans. She asks me every week or so, when are you taking your student loans back? Ouch. My mom is a nurse practitioner, but often complains that she is broke. She is currently paying off two luxury cars that she bought within 24 hours of each other one for work one for church who has a church car a luxury church car so great loans that she borrowed from her 401k to purchase land and other credit cards she says that her own student loans are such a burden that she had to stop paying her life insurance to afford the payments. Should I take the $100,000 back under my name since she feels like she was tricked into getting them? There is a lot.

Your mom is a freaking head case. Oh, my God. Man, there's a lot of sticky stuff out there. So you're a child, and I'm an adult, and I take out a loan in my name for you to go to college, but I got tricked. And I'm still being irresponsible with my money. So has this woman ever done anything wrong in her own eyes? She has a church car, for God's sakes. I'm going home and telling Sharon I need another car.

I don't have a church car. I need another car. I knew I needed a car. I just didn't know what it was for it's for church geez what in the world that's weird oh man and so much guilt and shame in that yeah so here's the thing if you promised your mom when you were a child that if she took out these parent plus loans that you would pay them and you and you pinky swear and spit shake at the kitchen table and you're 18 years old and you told her you would cover them then you should cover them but the story i just read or that christina just read doesn't say that it sounds like your mom did this she was trying to help she did a stupid thing trying to do a good

thing and she's done a lot of stupid things in her life you listed a whole bunch of them here and um and and now she wants to dump it on you uh so here's what i would do um number one under no circumstances do you take it back under your name okay uh number two if you choose to help her with it you can help her by throwing grenades over the fence throwing money over the fence but we're not going to move the loan over into your name okay since i'm not even positive you can pull that off with a parent plus loan i think it's pretty well stuck in her name and you're not qualified so first thing you're going to do is you're going to get your stuff paid off so no you can't help her until you're debt free then if you choose to help her at that point, here's how the conversation would be if it was me.

You can do whatever you want to do. But it would be, Mom, you are really ridiculously dumb with money. I am willing to help you with you taking out this loan because it was for my benefit, but I'm not willing to do it all, and I'm not willing to do it while you're paying two car payments, including a church car. Just shoot me.

I mean, that's just stupid, straight-up stupid. And a nurse practitioner should be making a pile of money in California. You should be able to work your way through a lot of this stuff. So we're going to get rid of a bunch of cars. I'm going to help you do that. I'm going to be your biggest cheerleader. You're going to get on a budget. You're going to get rid of a bunch of cars i'm going to help you do that i'm going to be your biggest cheerleader you're going to get on a budget you're going to go through financial peace university and then every thousand dollars you pay on that old parent plus loan i'll put a thousand

dollars on it oh i like that if you pay nothing on it and you continue to stay out of control i'm going to match that nothing that's exactly i'm gonna put on exactly what you put on and i'm gonna help you get this out of control under control get your life back coach you through a complete transformation because darling you need one but you know this idea that somehow she is a victim she's a victim of her own stupidity like all of us are when i went bankrupt you know whose fault it was dave's it wasn't ronald reagan's he was the president it wasn't jimmy carter's he was the president right before that and both of them did some really stupid stuff but neither one of them caused me to go bankrupt it was dave's fault and it wasn't my dad's fault it wasn't my mom's fault and it wasn't my dog's fault it was my fault so part of part of straightening up your dadgum life is taking responsibility for it yeah

and i think this just also highlights what i think i've heard rachel say where it's like a lot of the student loan crisis is a parenting crisis it's parents letting their kids go into debt but if you're a parent who takes out a parent plus loan and then expects your kid to pay it off, that's a lot. That's rough. Well, I mean, some parents do that and the kid says, okay, I'll promise. Then you made the promise. I'll stick you to your promise then. But he didn't do that.

But even if your kid says, I promise at 18 years old, that is still a kid, barely an adult, promising to pay that back. As a parent, you should stop and say, are you really willing to make that promise? Do you understand what that promise means in the long run? Because that's a heavy promise to make at 18 years old. It's like one of you parents co-signing for a 16-year-old to get a BMW. You're an idiot. You're an idiot. You deserve the problems that are coming your way. You just signed up for stupid on steroids this is the ramsey show Christine Alice Ramsey personality number one best-selling author is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Brayden and Nadia are with us. Hey, guys, how are you?

Hi. Hey, Dave. How are you guys doing? Good to have you. Where do you guys live? We're from Scottsburg, Indiana, but we neighbor Louisville, Kentucky. Ah, gotcha. Okay.

Welcome to Nashville. How much debt have you paid off? $138,000. All right. How long did this take? Four years and eight months. Okay. And your range of income during that almost five years? Started at $40,000, and then we worked it up to $160,000. Yeah, we're about $160,000.

Woo! Nice jump. Well done. What do you all do for a living? I work at my family's used car dealership and i'm a hairstylist very good very good so what do you attribute this huge income increase over five years to i got pay raises over the next few years and then nadia she began working yeah i when we met i had just finished hair school and but pretty much the last year I've doubled my income oh wow so really just focusing on my career and to grow that both of you're in the zone yeah well done what kind of debt was 138,000 uh 11 about 10,000 11,000 were my student loans and then the rest was the mortgage oh you paid off your house yes look. Looking at weird people. I love it.

Way to go, you guys. So what's this house worth? The current market, probably somewhere around $240,000. I love it. How old are you two? I'm 30. I'm 26. I'd have paid for a house.

$250,000, quarter of a million dollar paid for a house. Woo! Way to go. Woo! All right go. Woo! All right. Tell us what happened. Man, you started this young. Yeah.

Y'all were baby children when you started this. Like 20 years old you started, right? Yeah. We met when I just turned 21. Okay. So what in the world, what made you plug into this whole Ramsey thing at that age? To be honest, before I met her, I went to college and just went just to go. And then I ended up dropping out after a year. And then I kind of set up a goal after that,

that I was going to buy a house and save up for a down payment from talking with my mom. And then I bought your book and I read it at the time and it just kind of set a fire underneath me to start saving up for the next four years and just putting all my money towards a big down payment for a house. Wow. Okay. And then kind of fast forward, we met right after I graduated school. I had my student loans. I didn't have a job yet. And then he had already been searching for a house for a while. So he, a few months after we met, he bought the house and we both moved in. And, you know, for the first couple of years, the income was about 40,000. And then I started working, but it was really just, you know, we always had the long-term goal of

paying it off early. He, I don't think realized that we could do it as quickly. So we were on a walk during COVID and kind of locked down and I was like, we can do this. And, you know, maybe, I think we said four or five years, but then that was kind of, I could control my income. So it was that driving force for me that I wanted to accelerate and just serve my clients and the people around me and use that as kind of the driving force to increase my income. Wow. That's amazing. I love that. And I love that you're so young. I love that you even saw your job as service. You're like, I can serve my clients better. And in that, use that money to propel us forward. Exactly. So what would you tell people is the key? The key to getting out of

debt? The key, I think, is just being intentional with your money. And then if you're with someone, being transparent and making sure you have one goal and going for it. Which is amazing, especially as such a young couple, you guys are building such a strong foundation, not only financially, but with your conversations and in your marriage. Yeah. Early on. So when we moved into the house, I found the book just on a shelf or something, and I immediately read it because it clicked. It made all made sense to me immediately. So I was like, so I used, you know, the snowball effect to pay off my student loans. And, and then, so early on, we had those, those financial discussions and the money, money discussions. But I would say that just staying

content through this whole time was a huge, a huge thing, because as our money, our income increased, we easily could have justified to spend and you know spend a ton of money on our wedding um so we got married a year ago and then combining our finances was the key like you cannot achieve any goal together if if you're not doing it financially together in the same bank account and and always always talking about it so because we did that combined our income the last year we paid off 80 000 whoa of that so so the lion's share of this in one year yeah wow yeah so we spent our first year of marriage um i would say we sacrificed a lot of time um together and we didn't take vacations but it was because we

could see the finish line yeah it's right there i can i can touch it i can smell it i'm doing this yeah i love it i love it how's it feel to be completely free? It's great. I feel like it's just now starting to hit us. It's been a few months, but it's kind of wild just to think we're planning a trip next year. Where are you going? We're going to Hawaii.

Good trip. Very good. Y'all have earned that. Who are your biggest cheerleaders? My mom. She's really, she's a big saver and kind of goes with your principles and things. So she kind of lit a fire under me to do this. And then when I read your book, it was more explain, your book explained why I was doing these things that she was kind of telling me to do beforehand.

And I would say my parents as well. I remember years ago, my mom paid off her house and I just thought like oh wow that's you know that's wild um and uh and then just so to me it was always a tangible thing um but you have to believe it if you don't believe you can achieve these goals then it's never going to happen what do you think made you guys open to believing it because I think a lot of people a lot of parents even has hate to have these conversations with their kids because they think that, you know, they're not interested. They're not going to believe it. But what was different about y'all? I feel like I've grown up and always believed that, you know, you set your mind to something and you just, you can do it. And so setting small goals and once you can see yourself achieving

those goals and then you can learn to apply those to some larger goals. Um, but really learning to just kind of break it down. Cause I remember we, we passed the a hundred thousand mark on the house and it was just like, oh wow. And then we, we would celebrate kind of every, you know, 5,000 and 10,000 and then, but that's the motivating, motivating force is, is being able to, to visualize all that and track it is, is really important. I think Kevin faith in what you do in the beginning that it's going to pay off later on. And then as you get closer to time, then it's going to light a fire underneath you to finish it. Like kind of like the last year, we were so close, we just kept pouring more and more money towards it. But at first, you just kind of got to believe

that it's going to work later on. Well, it makes you really question the things that you purchase and spend your money on. And it really makes you like, I'm like i'm good driving my five thousand dollar car like i i i'm now hesitant to think he's got a whole lot of cars over there exactly exactly so i don't even know i'm like you don't have a church car no um but but yeah you just have to uh you really start to reevaluate your entire life and what's important especially in yours, because you've got friends that are probably having lavish weddings and driving fancy cars and just sitting in their student loan debt, not worried at all about paying it off, but not well. My wedding dress cost less than $100.

And I think I DIYed and got things secondhand for our entire house, like all the furniture, everything. It was like i i was building things myself and we were going to goodwill we shopped at goodwill for our clothes and furniture and everything for years wow wow and now you can do anything you want to do we can do anything yes yeah i mean this is pretty cool you make a couple hundred thousand a year real soon and not a payment in the world you're gonna be baby steps millionaires in a heartbeat here that's the plan well done very very well done live like no one else now you can live and give like no one and not a payment in the world. You're going to be Baby Steps Millionaires in a heartbeat here. That's the plan. Well done.

Very, very well done. Live like no one else. Now you can live and give like no one else. Absolutely. It's a beautiful thing. Yes. Proud of you guys. Thank you.

Well done. Thank you. Very well done. You're an impressive young couple. Very, very well done. Good stuff. Hey, we got a copy of the Total Money Makeover book for you. You can give that away like Mom gave it to you and get somebody started.

Baby Steps Millionaires book, our latest number one bestseller, and that'll, of course, be the next chapter in your story, a one-year membership to Financial Peace University. If you haven't been through it, go through it. If you have, then give it away. All of this is the live and give bundle. It'll help you with both of those things. Very well done.

Brayden and Nadia, Louisville, Kentucky area, $138,000 paid off in four years and eight months. House and everything! Making $40,000 all the way to $160,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Yeah! Woo-hoo! Gotta love it, man. You gotta love it. Man, they're impressive. So impressive. This is The Ramsey Show. We'll see you next time. Our Scripture of the Day, Romans 8, 38, 39, For I am convinced that neither death nor life, neither angels nor demons,

neither the present nor the future, nor any powers, neither height nor depth, nor anything else in all creation will be able to separate us from the love of God that is in Christ Jesus our Lord. Corrie Ten Boom says, God takes our sins the past present and future and dumps them in the sea and puts up a sign that says no fishing allowed you gotta love that so christina there is quite a little stir going on uh even among the uh ramsey baby steppers community uh about these eye bonds uh we've got a couple of days if you want to put money into an i bond and get 9.62 percent annual interest for series i bonds and so because the

rate has gotten so high uh it's gotten everybody's attention not everybody's attention but people are buzzing about it um and so people are saying dave what should we do what should we do what should we do well um let me tell you that what how much have in I-bonds and how much money I will be putting in I-bonds. Precisely zero. Hmm. Why is that? Well, 9.62 is the annualized interest rate for the first six months. After six months, it will drop to whatever the

prevailing rate is at that time and that has traditionally been down closer to five percent we're thinking most people are thinking it's going to be about six and a half percent beginning in november so you're pretty sure it's going to drop at least to that after six months and if you do not leave your iBond alone five years to cash it out early you get charged three months of the interest that would be one-fourth of the interest and so if you average six and a half and nine and a half uh you would get eight and three quarter something like that or eight and a half roughly um and seven seven and some change anyway and then take a fourth of that away uh that's what you're going to be making and even less because it's going to adjust down further later so the problem is this it's giving you it's giving you decent it's giving you way above average short-term interest rates, but it's not really a short-term interest product.

It punishes you if you don't leave it alone long-term, and it's a lousy long-term product because I can make a lot more than 962 on average investing in good mutual funds. The stock market is averaged north of 11%. I've been investing in mutual funds for 40 years and i've averaged way north of 12 on my mutual funds over that number of years way better than 9.6 oh wait it's not really 9.6 it's only 9.6 for six months oh wait you can't get it out earlier than five years unless you get one fourth of the three months of interest is a penalty and so people don't read the small all they do is read the big and the big print says whoa 9.6 9.6 you get can't

beat 9.6 9.6 is amazing it's amazing and yeah it is amazing that's a great interest rate on a short if i could get 9.6 on a six monthmonth cd i would take it absolutely and i you know i talk about moving some of my emergency fund there maybe but that's not the terms on this the terms are five years or you have a three-month penalty the terms are it's not 9.6 for a year it's 9.6 for six months on a one-year bond. And you know what the last six months are? No, you don't, because they don't tell you until later. It could be anything.

And I-bonds have traditionally hovered down in the five and sub-five range throughout their history. This is an anomaly that has jumped up. And so you just can't lock it in. And so it's a myth right and it's getting a bunch of hype in the news and the headlines are saying that 9.6 percent and then at the very bottom of the article it says in like a small paragraph the downsides and it explains that change in the lock and all of that so it's important to not just get lost in the hype but realize the cnbc article we have laying in front of us, for instance,

says your last chance to secure 9.62% annual interest rate for Series I bonds is October 28th. Wait a minute. Not true. It's not annual. It's calculated as annual, but only for six months. Six months is not annual. So, I mean, right off the bat, we've misled with the headline. But it gives you something to write about.

It's clickbait. It causes people to jump on your little site and read your little stuff. So, you're not stupid if you do this, but you're stupid if you do this thinking you're going to get 9.6% for more than six months, minus three months if you cash it out early. So, if you're using this for your emergency fund, you cash it out early, you're going to negate most of what's there. So I don't screw around with this stuff. It's a variable interest rate product with long-term implications and heavy fees for cashing out early.

So it's not a good short-term product, and it doesn't make enough to be a long-term product. So I don't have any money in it. That's why I don't have any money in it. That's why I don't have any money in it. I'm not trashing it. It's just, guys, you just got to learn to look at these things a little more carefully, and once you realize all the gotchas, then you go, well, it's just not as sexy as it sounds. Yeah, not quite as attractive as the headlines make it seem.

Absolutely. All right, Morgan is with us in Baltimore. Hey, Morgan, welcome to the Ramsey Show. Get straight to it before we run out of time. Okay, how much time do we have? Not much. Go. All right, I'm gonna go. So many questions, but the major one is, okay, I have three kids. They are 10, almost 9, and 6. I'm wondering how much you really need to put away per kid for college. I know there's not an easy answer.

Well, the closer you are to college, the more you're going to do almost all of it in actual cash. There's not going to be a lot of growth. So you only got about eight years for this money to grow. We've been putting away the minimum on the 529s, like the Maryland 529s. So I think that's $2,400 a year since each of them was born. Oh, so you've already started, okay. Oh, we have, listen, we have like a lot of cash reserves, hundreds of thousands. We have money on the market. We have money in all these different buckets, so thank God we have a lot of disposable income, but I want to know how much of it really,

realistically, might need to put away for their college? Well, the average in-state tuition today is about $12,000. Right. Average in-state tuition. And then room and board. Plus room and board. And so if you say $20,000 times four is $80,000. And that's if they're going to go to an in-state school and you're going to put them in a dorm.

Okay? And so, you know, you've got $80,000 a kid. Now, how much have you got and how much is it going to grow in eight years to cover that? And that's the calculation. And so it would be different for a three-year-old than it would a 13-year-old. Yeah. I'm not going to solely rely on the 529s, but you think the number is 80 grand per kid if it's in-state. Call it 100.

Call it 100. Yeah. Because we're not there yet, and it's going to go up. It's going to go up. Yeah, and if you're feeling kind of stressed and anxious about it or you just want to be as accurate as possible and as close to the number as possible, I would definitely sit down with a SmartVestor Pro.

I mean, that's what we do, and they can really help you lay out exactly how much you should be putting out, putting aside every month for each kid at their various age and you can you can use how much you've got now how old the kid is and what mutual funds are invested in and what they've been returning and use that formula and it will tell you exactly what you need to put in there once you establish a target amount with a smart investor pro but my point is you can do some quick numbers and go hey my target is a minimum of 100 a kid um and that's if they do bare minimum schools okay and they get out in four years hello uh there's a there's a little miracle for you um and so you know all of that and so we've got to start training the kids. But, yeah, Christina is exactly right.

I would sit down with a smart investor pro, and you can get the exact numbers. And I would put the right amount in a 529 to end up equaling about 100 at 18 years old. Yes. To get it there. It can also just reduce some of that stress and anxiety because college costs are going up. And, you know, you've got kids at different ages. So just to have someone walk through the math with you and just give you that assurance that you're on the right track,

it can just give you a lot of peace in that area. Yeah, it sounds like you've got the money. It's just scattered all over a hell's hand basket. So if you just pull it all together and line it up and make it dance with a SmartVestor Pro and make these ducks get in a row with a 529 in a good mutual fund, you're at least going to get seven or eight years of tax-free growth on each of these kids. And using the 529 in good mutual funds, that's going to be a good plan. So that's what I would do.

Go to RamseySolutions.com, click SmartVestor Pro, and you'll find somebody there with the heart of a teacher and help you sort through the actual numbers. But it sounds like you probably are on track, but you just need to get them lined up. Christina, good job. Austin, Ben, Zach, to get them lined up. Christina, good job. Austin, Ben, Zach, Andrew, and James in the booth, good job. I'm Dave Ramsey. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today. Ramsey Network.