The Ramsey Show - App - Best Practices for Handling Money in Marriage (Hour 2)

Episode Date: August 22, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave 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. I'm Dave Ramsey, your host. Thank you for being here. Open phones at 888-825-5225. Michael is with us in St. Louis. Hey, Michael, how are you? I'm good. Thank you for taking my call. Sure. What's up? I have a question. I'm nearing 50 years of age. I taught school for 25 years. Recently, in the last year, I have taken a job in the business field.

So I could draw my retirement from my teaching pension at the age of 55 for $24,000 a year, or I could wait until I'm 60 for $36,000 roughly per year. I was kind of wondering, you know, I've kind of went back and forth. If I start at $55,000, by the time I'm 60, I'll, you know, have drawn roughly $120,000 or waiting until I'm 60 and, you know, it would really take probably 10 years to gather that money. I would have had that. Okay.

The difference in 24 and 36 is 12,000. After 10 years, you'd have 120,000 plus whatever return on investment you'd made if you invested 100% of that. So if you took the investment, you took the retirement at age 55 and put 100% of it into mutual funds and it grew, the 120,000 would likely be more like $250,000. Okay? Okay.

And how much would $250,000 beginning at age 65 produce? Well, if it made 10%, that'd be $25,000 a year, and that'd be, say, $2,000 a month. Okay? Okay. Which is more than $12,000. You gave up $12,000. You're not going more than $12,000. You gave up $12,000. You're not going to get $36,000.

You're going to get $24,000, correct? Yes. In our plan, we're going to start at age 55. We're going to invest 100% of it until age 65. You follow me? Yes. In order to do the comparison mathematically, that's what we're going to do. Now, if we invest it from for that period of

time whatever amount of money is in there will it produce enough interest to offset our investment income to offset the fact that you've got twelve thousand dollars a year or less for the rest of your life from 65 on because we started early does that is? Yeah, I see what you're saying, yes. Okay, and the answer is yes, it easily would. Okay. If you don't spend the freaking money. Right. If you're going to spend the money, then it's not smart.

Yeah, if the pension isn't capped, you know, I could continue to work in other fields at that age. Yeah, and at all ages. Right. And the other question is, is there any lump sum option available? There is. Not now, but at age 55. Well, that's what I mean.

My actual contribution is around $100,000 over the 25 years. That's all you'd get? As a lump sum. Are you sure sure i'm not exactly sure no okay that wouldn't be normal most pensions have a calculation and their calculation says it's called it's a it's a financial calculation it's called the present value of what they're going to have to give you if they have to to give you, from age 55 until death, $2,000 a month, $24,000 a year. If they have to give you that, that's not worth the total of those dollars because some of those dollars aren't coming until age 70, age 80, right? You know, however long you live.

So you put that into a financial calculator, and it gives you the present value of those dollars and the only way you can do that though is you have to assume an interest rate the interest rate that a pension will assume is usually around five to seven percent and you can make more than that if you invested in good growth stock mutual funds over a long period of time. And so the translation to all that gobbledygook is you can take your lump sum and invest it in good mutual funds, and you'll have a lot more money than just taking the payments. And so I would roll the lump sum, get with a financial planner,

a financial counselor, one of our SmartVestor pros, and when you turn 55, you don't have to do it now, but find out exactly what the offer is, and you can put that in a formula and determine, will that not produce, were we to invest that in mutual funds, will that not produce more money than the monthly payments would have produced from the pension? And my answer is 90% of the time it will. Okay. Here's the other thing. When you die, your pension dies. from the pension? And my answer is 90% of the time it will.

Here's the other thing. When you die, your pension dies. When you die with $300,000 in a mutual fund, it goes to your heirs. So if you take a rollover that's not 100, but it's 200 or 250, which it probably is honestly here, let's see, 24,000.

I can tell you what it'll be. Hold on just a second. Yeah, it's probably $260,000 is probably what the lump sum is. Okay? Okay. We'll see. We'll see when you get there. You don't have to do it today.

I'm just guessing, but I'm probably not wrong. It might be, you know, $20,000 one way way or the other but it's probably right around that amount now if that's the case um then you die you got 260 000 in your account but if you die with a pension you got zero so take the lump sum you got more when you die take the lump sum it's going to produce more income while you're alive so take the lump sum in almost's going to produce more income while you're alive. So take the lump sum. In almost every case, that's going to be the equation. So get with one of our SmartVestor pros. You can find them online at DaveRamsey.com. Click SmartVestor. Put in your information.

It drops down a list of the pros in your area. They don't work for me, but they're who we recommend. I'm not in that business, but we recommend them because they have the heart of a teacher, and they'll walk you through all that gobbledygook I just did and help you calculate what's going on and how to do that. David is with us in Seattle. Hi, David. How are you? I'm hungry, Dave.

How are you? Better than I deserve. What's up? Yeah, listen, your last caller is a good segue to my question. My question to you is, I'm trying to figure out my net worth. My wife and I have four annuities. I'm 66, we're both 66,

and I've been retired for 14 years. And I'm drawing a pension from the Teamsters Union, which is an annuity. Then, of course, we have our two Social Securities, which is an annuity. Then, of course, we have our two Social Securities, which are also annuity. They have great value to me. I'm getting the check every month. It's great. But how do I sign a value to that when I'm trying to figure net worth?

We also have a fourth annuity. It's a private annuity. That's our own funds. So anyways, if I'm figuring my net worth, you take your assets minus your debt. It's what could you get your hands on. Social Security doesn't add to your net worth. I'm glad it's a value to you, but it doesn't add to your net worth. It adds to your income.

As far as the Teamsters, they should be able to give you a lump sum value of that pension, much like you said. That's a segue from the last caller. What's the value? Even if they don't allow you to roll with it or cash it out, what's the value of that annuity? And it might be like we were just discussing, $260,000. And just for purposes of calculating your net worth, if they won't give it to you, what do you make a month on that one? Well, actually, Dave, since 2004 2004 i've already received over uh no

how much do you make a month on that one on that one it is uh fourth i get uh four thousand okay forty eight thousand dollars a year take that and divide it by seven percent divided by 0.07 and you're going to be very close to what your lump sum is. Not going to be far off at all. Did you know, statistically, when it comes to life insurance and protecting your family, that women are more likely to be uninsured or underinsured than men? This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day.

This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance. They shop the top term life companies to find the lowest rates available. You can compare rates online at zander.com or call 800-356-4282. This is something every family has to deal with. That's zander.com or 800-356-4282. We teach you on this show how to invest and become wealthy so that you can live the life of your dreams,

change your family tree, and most importantly, be outrageously generous. You can be generous when you're broke, but if you have $10,000, you can't give as much as if you have $10 million. There's nothing wrong with being broke. It's not immoral, and you're not morally superior if you have more, but if you want to give more, you're going to need more. Pretty simple equation, isn't it?

It's something to think through. You can take control of your money, and you can reach those goals by getting out of debt and having a plan and learning to work with your spouse. And we'll show you how in Financial Peace University. Over 5 million people have been through this program. Our easy-to-follow steps, we show you how to spend wisely, save, build your emergency fund. What if you just had no payments and had $15,000 in the bank?

That'd be different. Financial peace, two words that don't go together, like airline service. You know, you start investing, couldn't you? This is what we show you. Financial peace university right now, $119. It's a deal. That's for the one-year membership. That includes every dollar plus for the year.

That includes online access to everything. That includes the kit. You go to the local church and find a class, and you go through nine weeks of the class, and you can watch all the videos online, and you got every dollar plus, and, and, and. It's only $119 for the entire year. That's a good deal. This is a deal right now.

DaveRamsey.com, or call us at 888-22-PIECE, 888-227-3223. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. That means with them that even if you mess up, if you measure wrong and get the wrong length of blind, you try to put it up and you go, Dadgummit! Well, there you go.

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Well, praise God. I have exceeded the minimum required miles by 5,333 miles. I do not have the cash to pay the balance of the car, which is $26,000. Of course, the dealership is offering to take it off my hands if I finance another car through their lender or get a new lease. I wish I'd read your book sooner. Any advice would help. Well, you need to find out what your actual cost is per mile for your overage. And if you have to find it, you already have that debt. That's a debt you have. And so I'm going to give them the keys to the car and we'll walk away and I'm going to pay that debt.

Now, you either work it out with them, you go to the credit union, borrow that much money, but it's not going to be that much. I mean, it'd be a couple grand, and you're going to be out of this thing in most cases. And no, you don't use this to buy another car, Len. You don't fix stupid with stupid. Think about it. Stupid never fixes stupid. Sometimes stupid will relieve the stress of stupid temporarily,

but you just extended the stupidity. No, we're not going to buy another car through them with their lender or get fleeced again. Give them the keys and turn that mess in. Have you not learned your lesson? Oh, my goodness. Stop it. Rob is with us in Philadelphia.

Hey, Rob, how are you? Rob, how are you? Good. How are you, sir? Better than I deserve. What's up? Question for you. I've got a couple questions, so I'll make it as brief as possible.

A little background. I'm 24 years old. I work as an accountant. I make about $62,000 a year pre-tax. I'm going to grad school. I'm just finishing up. I just have a semester left, and I've been paying for grad school straight cash. Grad school has cost me about $30,000 of cash over the last two years or so. When do you finish?

I finish in December. Good for you. When do you get married? Thank you. I'm planning on getting married as soon as I get my other debt paid off. I've been able to pay for grad school straight cash, but I do have some loans from undergrad that I haven't paid off yet. They're in deferment at the moment.

I have about $30,000 in student loans from undergrad. Where did you read a law that says you have to be debt-free to get married? I haven't, actually. I was just curious, should I take on more debt? Because I don't think I could afford a wedding straight cash at the moment. Well, you can afford one. It might not be the one you want. Right.

I have about $10,000 or so in savings. You can get a really nice wedding for $10,000. How much do you think I should pay for an engagement ring? Because I've seen the typical rule is two months to three months salary. What do you... Yeah, that came from jewelry stores. That's who made that rule. There is no rule. There is no data that says the size of the ring equals the success of the marriage.

As a matter of fact, there is data that shows the inverse of that at times. Not to say your marriage is doomed if you've got a big ring, but, you know, it's got a less chance of making it. So, yeah, I mean, my wife got married with a chip, baby. I'm talking.23 here. You've got to look for it to find it. It's in the safe right now because she wouldn't wear it now, but she's got a headlight on her hand now. But back then, I mean, she got married on a chip.

It was $1,166, baby. So one month max. One month? Max of your take-home pay. So a couple grand for you in your situation you got a mess and i would not wait until you pay off the thirty thousand dollars to get married assuming that the two of you both know what's going on with the money you're both completely in agreement you've been through good pre-marriage counseling you've been engaged more than 20

minutes you know you have a reasonable engagement period and um is she graduated from school correct uh she's she's working as a registered nurse she also makes about sixty thousand dollars so you have a hundred twenty thousand dollar household income ten thousand dollars in the bank thirty thousand dollars in debt how much debt she got about twenty okay so you have $50,000 in debt. You're 25 years old when you get married. You got $120,000 income. How fast do you pay off $50,000?

One year. Okay. Right? Both of you are 100% debt-free in one year. You live on beans and rice your first year of marriage, and you clean the messes up. And you get married and spend under $10,000 on the ring and the wedding because that's all you got. But I do not, you know, people don't, people, I do not recommend people wait to get out of debt to get married.

I do not recommend people wait to have kids, wait to get out of debt before they have kids. Those are things that are not, they're independent of the debt equation with reasonable parameters. I mean, if you've got 19 kids, it might be time to rethink this, right? Or if she's got $2 million in debt, you may want to think about this. But within reason, there's no thing that says that you need to be debt-free. I'll tell you, there is a thing that says, lots of data points that say, that you need to be on the same page about money you two

need to go through financial peace university together as part of your pre-marriage counseling okay to make sure you're on the same page so that when we get married we're knocking this debt out and so that when we get married we're paying cash for everything so that when we get married we buy a reasonable ring and the bigger ring you buy, the smaller your wedding's going to be, because $10,000 is the budget for both. Right. Because that's all you got. That's what you told me, right?

Yep. That's all I have at the moment. Yeah, so I got you getting married in March. Correct. Oh, I just made you nervous. I'd like to be married by next summer. Yeah, well, there you go. March is before next summer. Good. Okay. I'd like to be married by next summer. Yeah. Well, there you go. That's March is before next summer.

Good. Okay. I think you can do it. You know, you got good degree fields, both of you. You're going to have good incomes, both of you. You got a lot on the run here, but make sure you're on the same page. Well, if you get engaged, Kelly will put you both through Financial Peace University as our guest. We're going to pay for it for you as our wedding gift for part of your pre-marriage counseling.

Hold on. I'll set you up with Ms. Kelly right now. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life. Folks, I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search you're doing online. It doesn't matter if you're doing it on your cell phone or your laptop.

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That's hotspotshield.com slash Dave. You can be secure in seconds. Download Hotspot Shield today. Daniel's with us in Detroit. Hey, Daniel, how are you? I'm doing fantastic, Dave. How about yourself? Better than I deserve, man. Welcome.

I've been waiting to hear that. I see on my screen you're debt-free. What's up? Oh, paid off, yeah, paid off $32,441.39. How long did this take you? It took me 12 months. Good for you. And your income during that time?

I went from making about $53,000 up to $61,000. Good for you. What do you do for a living? I'm a chef. Cool. How old are you? I am 33, 33 years young. What kind of debt was the $32,000? Oh, what kind wasn't it? It was a little bit of medical, all consumer debt, so credit cards. It was personal loans, personal loans to pay off other personal loans, so just tax stupid on top of stupid. Car payment? Yep. Car paid off my car. I had a car payment. Yep. Okay. So you were just kind of normal.

I was very normal. I was probably about as normal as it gets yeah normal just sucks okay normal absolutely wow very good man very good good for you well done so what happened at 33 years old 12 months ago that said hey game on we're doing this well you know i know, I was driving home, and my brother lives out in Portland, Oregon, and I decided to give him a call, and we were talking about, I told him I had just refinanced that car, and he kind of jumped to, what did you do, take out a six-year loan on the car? And that was actually the truth um i had taken out i had taken out a six-year loan on on uh on sixteen thousand dollars um

and i just got really mad and he was he had said uh you know i listened to this guy called dave ramsey and then at that point i think i i said, you know, that's okay. I got this, and I hung up the phone on him. And then it made me take a real good look at everything. And I looked you up online, and I just jumped in. I just jumped into it head first. So I was sick of being sick and tired, sick and tired of being sick and tired. You know, some of the best times of my life were things when someone I love made me really mad. Absolutely.

Absolutely. And leave it to my brother to do that. He's got a gift. Yep. I love it. How does it feel, man, now that you did this? Oh, my God. It is just a huge weight off my shoulder. I just, I just did,

I sat down yesterday to do my budget for next month. Um, and, and it just, and I just circled the debt portion of everything, uh, put a big line through it and it just says debt free. And, and I got so much money that I can, I can save up and, uh up and, you know, just start giving, start saving and start giving. So it feels amazing. How long have you been chefing? I've been a chef. I work with my aunt and uncle. I've been a chef for probably about, I think, a little over 10, 11 years or so, give or take. Most of the chefs that I know well, anyway, are, if they're really good chefs,

they're crazy about cleanliness in the kitchen and organization. They're like OCD about their knives and everything else. Are you that way? I am very OCD about everything on my station. It always stays nice and clean and all that stuff. So, yeah, absolutely. And you had so many dinky butt little payments flying around all over the place. It's kind of got to feel like your station's clean right now when you got rid of all this.

Absolutely, absolutely. Like, you took the words out of my mouth. Yeah, very cool. Good for you, man. I'm proud of you. Did you have people making fun of you while you were doing this or people cheering you on? Your brother's cheering you on. You know, I got to give a quick shout-out to my partner, Daniel.

He was a huge cheerleader for me. My aunt and uncle, they gave me tons and tons of opportunity, which I took to make more money and to prosper. And then my FPU coordinators, they were going to be here, but they're out living and giving like no one else, so they couldn't make it today. So, yeah. You ended up going to Financial Peace University too then? Oh, FPU. I'm currently enrolled in the, I'm doing the fcmt oh you know you're going all the way

oh my god i read all of zig ziggler's books i'm doing the legacy journey uh you name it i'm doing it i'm not doing dave ish i'm doing the dave for sure wow very cool man well i'm proud of you congratulations very well done well you probably got a, but we're going to send you another one of Chris Hogan's book, Retire Inspired, because we know you're on your way to being a millionaire. That's the next chapter in your story. Daniel in Detroit. $32,000 paid off in 12 months, making $53,000 to $61,000. Count it down, brother.

Let's hear a debt-free scream. Three, two, one. I'm debt-free! Oh, man. This is how it works. This is how it works. Now, here's what you need to understand. We teach people to get out of debt.

Why? So they can become wealthy. This is a wealth-building program. It's not a get-out-of-debt program. You're getting out of debt so that you build wealth so you can secure your future, retire with dignity.

You can leave an inheritance to your children's children. A godly man does that, the Bible says. You can be outrageously generous as you go along. There's a reason to do all of this. Get out of debt is just one of the steps.

It's just one. It's actually baby step two out of seven steps. This is not a get out of debt program. This is a build wealth program. Financial Peace University is not a get out of debt class. Yeah, we're going to get you out of debt, but it's so that it's also that so that so that so that that's the whole point of this process so that we want you to be a millionaire these everyday millionaires we talk to all the time on these everyday millionaire shows you know what they did they got out of debt they stayed out of debt you know what they did they got out of debt they stayed out

of debt you know what they did they paid off their house on average in 10.2 years you know what they did because they didn't have any debt they invested in their 401k and their roth iras and good growth stock mutual funds for 15 20 30 years and then they're millionaires or multi-millionaires we stood did the largest study of millionaires ever done, over 10,000 millionaires. Yes, some of them were Dave Ramsey followers. We hired an outside research firm to assist us in this, and the vast majority of them were not Dave Ramsey listeners. Regular people out there and found out where millionaires really come from.

No, they did not inherit their money. Way less than 10% of millionaires inherited their money. Way less than 10% of millionaires inherited their money. Over 90% became wealthy by doing the exact stuff we talk about. And that's what the book Everyday Millionaires reveals. Now, it's on sale now. It comes out. It's Chris Hogan is our author that did it with our research team here and the research team that we hired outside of here. This was a massive project, the Everyday Millionaires Project, how ordinary people build extraordinary wealth and how you can too. If you pre-order the book, it doesn't come out until January,

but if you pre-order it, we're going to bribe you to buy it now. If you pre-order it, you can get the book for $20 and $50 worth of bonus items. You get the audio book read by Chris Hogan, and you can listen with his voice to him reading a phone book. The e-book, a video lesson from him on how to retire inspired, a video lesson from me called It's Okay to Be Wealthy. And if you want to tie it in the bundle and get a real deal and go to peace university like

that guy did just now that daniel did they became debt free and then move straight into millionaire status 129 dollars includes the book all the free bonus items and financial peace university membership for a year wow this is the dave ramsey show All it takes is one emergency trip to the dentist to blow your budget quickly. Now, I'm not a fan of dental insurance. I think it's a waste of money. But there is another option. It's called One Dental, and it's not dental insurance. One Dental is a discount program that functions like a membership club.

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That's OneDental.com. Cassidy is on Twitter. Dave, is it better for newlyweds to rent or to buy? Rent. If you rent for one year, if you're a brand new young married couple, you make a better decision on what kind of house to buy. You just know each other better after your first year. First year of marriage is wild. It's weird.

It's crazy. And it takes about a year of marriage to know how close to your mother-in-law to buy. You just get to know each other better um unless there's some extenuating circumstance other than and i want to buy a house houses are going up so fast i have house fever that's not extenuating circumstances that's you being a twerp okay but no just 99 of you need to wait a year Now, in addition to that, no one should buy a home until you get out of debt And you have your emergency fund built with three to six months of expenses Plus your down payment

No one can do that, Dave Yes, they can And that might take you longer than a year You get married with a couple student loans and a car payment Yes, they can. And that might take you longer than a year. You get married with a couple student loans and a car payment, and you've got entry-level jobs or beginner jobs, it might take you longer than a year to get out of debt and build your emergency fund, build your down payment. So that's going to delay you anyway.

If you do not wait to get out of debt and build your emergency fund before you buy you are inviting trouble murphy will move in with you and bring his three cousins broke desperate and stupid you move in a house with no money and a bunch of debt the water heater will go out the heat and air will go out and the roof will leak in the first three weeks. You're inviting trouble. You're begging for problems. And now you've got financial strain on your brand-new marriage. That's just stupid on steroids. So don't buy in the first year, and don't buy even then until you're out of debt and have your emergency fund

plus three to six months of expenses. It's okay if it takes you a couple years to do that. Do it as fast as you can. I want you to buy a house, but I don't want the house to own you. I want you to own it. Brandy's in Jacksonville, Florida. Hi, Brandy. How are you?

Hi, Dave. I'm great. Thank you for taking my call. Sure. What's up? So currently, my husband and I, we have separate bank accounts, and we really handle our finances completely separately. We split the rent and utilities, but everything else is on our own.

I brought $60,000 worth of debt into the marriage, not including my student loans, and I'm wanting to start the debt snowball method to pay it off slowly. I'm also starting grad school next week, and we're expecting our second child. You're starting what next week? Graduate school. Graduate school. And you have a're expecting our second child. You're starting what next week? Graduate school. Graduate school. And you have a baby on the way. And you're in debt.

And you make $60,000. What are you going to study in graduate school? A nurse practitioner. Oh, okay. All right. So I'm wanting to get my husband on the same page as me as far as budgeting, but I'm having difficulties. Even though we're in a paycheck-to-paycheck situation.

You know, he'll tell me he's going to budget better, but then he'll still eat out or spend unnecessary money, and I'm not comfortable getting a joint account with him until we're on the same page budget-wise. Okay. All right. Let me just tell you, this is not going to good places i've been doing this for 30 years and what you're telling me is not good it's a lot worse than you think it is the two of you immediately need to address this in your relationship you're you're acting like your roommates for god's sake do you

split who buys the mustard i mean it's unbelievable it's ridiculous when you got married the preacher said and now you are one he did not pronounce you a joint venture and you need to combine your incomes combine your debts for better for worse in sickness and in health for richer for poorer, we're doing this. He's not your roommate. You're not his roommate. And this is, you know, we took this on. We're doing this.

So you guys need to sit down together. You need one checking account, one budget, one income, and one set of debts that we're paying off, and a set of goals that we're both trying to achieve together. And that can be babies in graduate school and it can be getting out of debt. It can be building wealth. It can be travel.

I don't care what your goals are, but you need to combine your goals and you need to combine the process to get there, which is the budget and combine your incomes to get to those goals. This is the precursor for divorce. Couples who operate this way don't stay married. Now, today you don't believe that. But I'm telling you, I've been doing this for 30 years. Sometime in the next five to seven years,

this split that you all have done inside the house is going to get formalized. You're going to have a problem. Because you're both trying to live separate lives instead of being married. It's relationally a disaster. Right. You're pulling at each other like we're roommates. And, you know, it's not your dad. It's our dad.

You got married. It's not his dad. It's our dad. You got married. It's not his income. It's our income. My wife, Sharon, hasn't had a personal income in 32 years but we have an income we have an income she has as much right legally morally spiritually relationally to the income as

i do and you don't think she does try getting a divorce they have this thing called alimony you don't think she's got rights to that income she's got all kinds of rights to that income even though she didn't personally go create it in any state so you know that that you really really really really really and if he won't sit down the two of you can't work through that then you need to sit down with your pastor you need to sit down with a good marriage counselor and work this through please get on one page not only is it tactically and practically much easier to operate your household when you're on one page and in one checking account,

but it forces the two of you to combine your goals, your fears, your dreams. It forces you to talk about the future. It even forces you to talk about the past. It forces you to deal with these things. And as you do that, then you're going to see an increase in communication. You're going to see an increase in everything in your marriage. The quality of your marriage, you're going to see every bit of it change. Please, please, please combine everything.

Thanks for calling. Melanie is with us in Baltimore, Maryland. Hi, Melanie. How are you? Hi. How are you doing? Better than I deserve. What's up?

Great. I'm calling because I'm trying to get some idea of where to start, basically, with my dad and starting my baby step one. So, basically, I'm'm 35 i just graduated last year um i work for a non-profit i don't make much but i have about 30 000 school loans what do you do i work in human resources but i work for a non-profit so i only make about 38 000 this is my first job you have a degree in human resources? Yes.

Why did you choose to take less money when you're broke? Because the problem, I was looking for a job. I couldn't find a job because I didn't have any experience. Okay, so it's the best job you could get? Yes. So far, okay. All right. Because you told me twice in 30 seconds I work for a nonprofit, I don't make much money,

which you've identified that you could make more money. That's why I was asking. Yes. I believe I could. I know I could. All right. Let's go do that, too, and that's going to help a bunch of things, because you could possibly go make $58,000, right?

Yeah. Now, let's go work on that, too too as a part of this discussion okay and then your question is what do you do with the student loans while you're doing all this yeah because i deferred one the 25 000 one and the five thousand dollar one i just do income base okay but you need to get on a written budget yeah get on a written budget do you have any other debts other than the student loan? The car that I just got four months ago because I was frustrated. How much do you owe on your frustrated car? Like $12,000.

Good gracious. It was my first car. Yeah. You were already broke and couldn't pay your student loans, so you took on a $12,000 debt. See, this has got to stop, kiddo. This has got to stop. We've got to get you out of debt, not into debt. So, yeah, you may have to take a hardship deferral.

You need to get your income up. We're going to get you on a written budget. Jump over to EveryDollar.com. Download the EveryDollar app and start living on a scorched earth lifestyle. No life, no life, no life. Get the car paid off. Get the student loans paid off. Get your income up.

And get on a written budget. Every life. No life. Get the car paid off. Get the student loans paid off. Get your income up. And get on a written budget. Everydollar.com. Hey, guys. This is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamney.com slash show.