The Ramsey Show - App - Big-Name Colleges Aren't Worth the Loans (Hour 3)
Episode Date: March 14, 2019The show about you...
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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios,
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 am Dave Ramsey, your host.
Thank you for joining us.
Open phones at 888-825-5225. Brenda's with us in Las Vegas. Hey, Brenda,
welcome to the Dave Ramsey Show. Hi, Dave. Hey, what's up? Well, my husband and I have been,
we started saving for our children's college education, and with our oldest starting college
in just a little over two years, I just feel like we are way behind,
and I would love some advice on what I need to do,
what we need to do to properly save for our children's college education.
What's your household income?
Well, my husband's a pastor,
so our actual take-home pay is kind of a little bit different, but monthly we bring home around
$5,000 a month.
Okay.
And you have kids at what ages?
Two kids, 16 and 14.
Okay.
And how much do you have saved now?
In the education savings, we have about $5,800.
In our general savings, I have a little over five thousand dollars okay all right and then we have kind of a vacation fund savings which right
now about three hundred okay all right um well basically what we're saying is is that in two
years you're going to have um probably not even half of what you need.
Probably not even a fourth of what you need.
And so there's a couple things you need to do if a kid wants to go to school debt-free
and doesn't have any money or has limited money.
And we're kind of between no money and limited money in this discussion. So the first thing is that you need to really get a realistic grip on
the number one cause of student loan debt is college choice.
People choose a freaking college that broke people don't need to go to.
Yes, and my children have a college in mind already.
I don't care.
I don't care.
They don't get to make the decision.
Right.
They're teenagers.
They need help.
And they need these things called parents.
Because, you know, if you participate in the decision for them to go to a $45,000 a year school,
you are pretty much ensuring your child is going to hate you when they're 30
because they're going to be looking down the nose of about $100,000 in student loan debt.
Right, and we want to avoid that.
Yeah, so where you go to school matters and so basically these kids are going to in-state state schools and or community
colleges for the first two years to get their basics out of the way for little to no money at
the community college and then finish up at an in-state state school here's the interesting thing
there's almost no jobs and almost no degree fields that care where you went to school.
I have never gone to a doctor and went, oh, I can't let you look at me because you went to the wrong school.
I have never hired an attorney.
I said, oh, we can't get you to work on us because you didn't go to George Washington.
You know, I have never, never one time have I hired somebody in this organization based on where they went to school or didn't go to school.
So that garbage is out there floating around, but in the real world it doesn't exist.
Okay?
Nobody asks, nobody has ever denied your husband a position as a pastor based on where he went to seminary,
unless it was a doctrinal issue indicated by where he went to seminary,
but not based on the quality of education.
Okay? No. And so, youary, but not based on the quality of education. Okay?
No.
And so, you know, that's just not the case.
So this garbage of you have to go to some big-name school, or those of us that are Christians,
sometimes my fellow Christians want to send their kid only to a Christian college because it's like they're going to go to hell if they don't.
And maybe they could be salt and light in the community college.
Maybe they could be salt and light in the public college
because these kids haven't got the money for Christian school.
You can't afford it.
You can't afford it unless they get 100% free ride.
So number one is college choice.
Number two is they are going to be working while they're in school
and before they get to school.
Did you go to college? I did. Did you work while they're in school and before they get to school. Did you go to college?
I did.
Did you work while you were in college?
I did.
Yeah, me too.
And I came out of college 100% debt-free, though.
I had no student loans.
Me too.
Well, no, I had $3,000.
I take that back in student loans, but that was before I was Dave Ramsey.
I had hair then.
So anyway, so they're going to be working, number two.
Number three, their job right now, starting now, is to start taking the ACT and take it again and take it again.
Most schools are now super scoring the ACT, which means they take the best of, if you take it three times, they take the best of if you take it three times
they take the best science score you got of the three they take the best math score of the three
they take the best english score of the three and they put them together and that's called a super
score and that becomes your act score and then every time you take it you take mentoring and
tutoring in between that's a good thing to spend money on on on how to take the test so that next time you take it, your score goes up.
All three of my kids took the test more than twice.
Okay?
Right.
I did, too.
I took it more than – actually, I took it twice.
Yeah.
And every time their scores went up, by the way, because we did just exactly what we were
talking about.
And then that leads us into number four, which is scholarships.
They are now in the I want a scholarship business.
And it can be based on their Christian faith and their mission work that they've done
and the citizenship that that represents into the citizens of the world
or citizens of the culture or whatever.
It can be based on academics.
It can be based on, but it's usually just based on somebody's giving away a scholarship
and the kid that has the best essay that turns it in gets it.
And there's millions and millions and millions of dollars that go unclaimed every year on scholarships and so you go to something like myscholarly.com or some of these other services
that are online and your child needs to fill out 1 000 scholarship applications between now and the
time they go to school literally Literally. Okay. Literally.
Not 100, because they're going to get turned down for 900 of them,
or maybe 950 of them.
But if they get 50 scholarships that average $1,000 apiece,
they just went to school.
Great part-time job for a teenager.
So scholarships, work, ACT, and overall college choice.
You do all of those things, you can get through school now.
Because if you start looking at an in-state tuition versus a private education that you can't afford,
you're going to see it's 5X.
Private education is going to be 5X.
And what happens, though, is that people let their teenagers make these decisions in a vacuum based on the town is pretty, and so I want to go to school there.
Or based on I've always thought I wanted to be a Ph.D. in German polka history.
I want to study something that has absolutely no applicable use in the marketplace.
And so your job as mom, your job as dad is to parent these kids and they are kids i know they look like they're grown up and all that kind of stuff but they're not because every one of us that
have been 18 years old are shaking our heads going we were stupid and we needed parents
that's how people get 150 000 in debt because their parents aren't involved.
And they make stupid decisions about education.
Isn't that oxymoronic?
That we make stupid decisions about education?
Think about how dumb that old phrase I just said is.
This is the Dave budget each month.
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That's puretalkusa.com. Jeffrey is in Dallas.
Welcome to the Dave Ramsey Show.
Jeffrey, how are you?
I'm wonderful, sir.
How are you?
Better than I deserve.
What's up?
Yes, sir.
I just wanted to know if you were okay with the service during the seven-step process.
Start a business when? During the seven-step process. Start a business when?
During the seven-step process, the baby steps, I'm sorry.
During the baby steps.
Sure.
Yes, sir.
Depends on what you're doing and what it's going to cost
and at what point in the baby steps you're doing it.
What baby step are you on?
Right now I'm paying off debt.
So you're in baby step two, working your debt snowball.
How much debt have you got?
Well, right now I have about, between me and my wife, it's about $20,000.
Okay.
And what is your current household income?
I bring in about $4,000 a month.
That's about...
$48,000 a year.
Yeah.
That's your take-home pay, so you're probably making $60,000 a year, give or take, $60,000, $65,000 a year.
Okay, good.
And what kind of a business are you talking about starting?
It's a landscaping company.
Okay, and what will it cost you to do that?
Well, I'm going to start off real, real small.
So it'll probably range about $500 to kind of get the equipment.
And then, of course, a cash truck, which would be about a good $2,000.
Okay, so you're talking about spending $7,000.
Is that what you said, $5,000 plus a truck? No, no, no, no, no.
To get the equipment, it'd be about $500.
Oh, $500, okay.
Yeah, $500. Okay. Yeah, $500. And then to get a truck, it would be about $2,000, so about $2,500.
Okay. All right. And what kind of equipment are you talking about getting?
Like I said, it's going to be something simple, basic, just a lawnmower.
We need a blower, the little small miscellaneous stuff like the gas cans.
What kind of cars are you all driving?
I'm glad you asked that.
Uh, I'm actually driving a 2015 Toyota Corolla, uh, which is, uh, it's not technically my
car.
It's my uncle's car.
Uh, he gives it to me so I can drive for Uber.
Okay. And, uh, do you own any cars? It's not technically my car. It's my uncle's car. He gives it to me so I can drive for Uber. Mm-hmm.
Okay.
And do you own any cars?
No, I don't.
But I will be here pretty soon, in about a couple weeks.
I'm going to be, which I want to try to see if I want to get rid of this car and then get a cash car.
But I'm trying to figure out how to handle that.
Mm-hmm.
Okay.
Are you married?
Yes, I am.
And what does she drive?
She doesn't drive anything.
Okay.
So you have one borrowed car right now.
Mm-hmm.
Okay.
All right.
Yeah, I probably would.
I think you can make that money back really, really fast.
I would try to probably do a $1,500 truck, and so we've got a total budget of $2,000.
How quick can you make $2,000 cutting grass?
Well, I'm pretty good in selling, so if I go out there for a whole month,
I can pretty much earn about $2,000.
In a month?
Yeah, in a month.
Okay, and everything after that's going to be gravy to help you get out of the other debt
and help you get some other cars purchased and so forth.
Yeah, I like your plan.
I would do that.
A lot of hustle, a lot of sweat involved.
I would do it.
Okay, not a problem.
Just keep it.
Listen, don't get out of control now.
Don't call me up and say I spent $5,000.
No, it's not going to be that.
Okay, and you're going to do it all in cash, right? Oh, absolutely. All right. Very cool. Good job,000. No, it's not going to be that. Okay. And you're going to do it all in cash, right?
Oh, absolutely.
Absolutely.
Very cool.
Good job, man.
Well done.
Open phones at 888-825-5225.
Alicia is with us in Dallas.
Hi, Alicia.
How are you?
Hi, I'm good.
How are you?
Better than I deserve.
What's up in your world?
Good.
Well, I have a question. Thank you very much for taking my call.
I have been struggling with figuring out if I should end my apartment lease early and just buy out the lease, or if I should stay and just kind of ride it out
because I just got another cash card and it needs some work too.
So I'm trying to figure out which one is better.
Plus I have student loans that I need to pay off.
So I'm trying to get.
How much is your rent?
My rent is $9.85.
Where would you move?
Just kind of down the street a little bit.
What would be your rent there?
It would be $875.
So it's $100 a month savings.
What's your income?
Right now, well, I make $40,000, but I'm on disability,
so I'm trying to figure out, well, I'm not getting paid right now.
You're not getting paid anything?
Not right now.
Yeah, I was on workers' comp, and then they ended that.
And so my disability has been kicked in,
and I'm not sure what's happening with that either.
Okay.
How are you eating?
I just have a little bit of cash that I'm using to get by, but it won't be for long.
So that's what I'm trying to figure out what to do.
Yeah, okay.
Well, you're going to obviously have to get an income coming in.
Are you okay physically?
Physically, yes, I'm okay.
The issue is with my hands, and I do tech support, so I type a lot.
So a carpal tunnel or something like that?
Yeah.
Okay.
So you can't do that.
What can you do to earn some money?
Well, I am thinking about maybe going to do tech support in a retail space,
so that way maybe the typing will be less
and I can still make good money.
That's what I'm thinking about.
Okay.
Well, what are you going to do by Friday to make money?
Because you don't have any money.
Yes.
Honestly, I don't know.
I'm just selling stuff in my house to get rid of stuff.
I think we need an income plan that you, as a short-term thing,
I don't care if you're delivering pizzas, waiting tables, babysitting kids,
I don't care what you're doing, you need some short-term money starting right now
while you get your career, your big career, shifted around into something that you're able to do
and you get this disability settlement done okay yeah because i don't want this to you know you're going to reach a point
if you don't have a plan that stuff is gone and money is gone and you're on the street
and it's not because it's not because of a 900 rent versus an 800 rent it's because there's zero
income yeah yeah no i would not move i would not i don't think the savings here
is a big enough thing to help you i think the uh in the two rents uh unless there's something else
wrong in this situation i would stay because i think you've got to address the other side of
the equation and that's the income side of the equation and that's where you're just you know
in panic mode right now that's what you're
facing so you have really really really got to turn that around so thank you for the call steven
is with us in newport news virginia hi steven welcome to the dave ramsey show hi sir how are
you better than i deserve how can i help so i have a question um I currently contribute to my TSP, and I'm doing the 15%.
However, when I did the math, I could max out a Roth IRA within an annual year
and still contribute to the TSP in order to meet that minimum for matching.
Does it make sense to split it up, or does compound interest work better for me?
Compound interest is the same either way.
When you're putting in 15% of your income, whatever dollar amount that is,
if it's in two different categories, it doesn't matter.
If they're growing at the same interest rate, you'll end up with the exact same amount that,
if they're growing at the same rate of return, you'll end up with the exact same amount you would have ended up if it was all in one category.
So that part doesn't matter.
What does matter is that you can find mutual funds that will outperform the C, the S, and
the I inside the Thrift Savings Plan, which is how we recommend you distribute primarily
C, like 80% C, 10% S, 10% I.
But that mix right there can be beat with good mutual funds with your regular Roth out there.
And so, yeah, I'm going to do the regular Roth.
Make sure you do your TSP up to the match, then do a regular Roth.
If you need to do a little bit more than that, then you can go beyond the match a little bit in the TSP.
And then the TSP, pick the Roth option as well.
You've got the Roth option there.
So that's the direction I would go.
Good question.
Appreciate you joining us.
Common sense for your dollars and cents.
This is the Dave Ramsey Show. Thank you. In the lobby of Ramsey Solutions, Spencer and Emily are with us.
Hey, guys, how are you?
We're doing great, David.
Welcome.
Where do you guys live?
We live in Elizabeth, Indiana, which is just across the river from Louisville, Kentucky.
Ah, gotcha.
Okay.
Great t-shirts.
Live like no one else with gazelles on them.
Thanks, sir.
I love it.
How much debt have you paid off?
We paid off $70,000.
70K.
How long did that take?
23 months.
Good for you.
And your range of income during that time?
We started about $51,000, and we went up to $101,000.
Whoa!
How did you double your income in 23 months?
Well, Emily started going to work full-time and a couple job changes.
And my parents opened up a small business,
and we kind of started working there on the weekends and stuff
to kind of make a little extra income.
Okay, so lots of extra work that wasn't there the year before.
Gotcha, okay.
Money everywhere, though.
Good for you.
What do you guys do for a living?
What are your careers?
So we work at the same company.
We work at Rinaldo Designer Jewelry.
Okay, doing what?
I work in sales, and he's Jewelry. Okay. Doing what?
I work in sales, and he's a shipping manager.
Okay.
Great.
Very good.
Good for you guys.
And what kind of debt was the $70,000?
It was all our mortgage.
You paid off your house?
Yes, sir.
I am looking at weird people.
I love it.
How old are you two?
We're 24.
Oh, my gosh.
You're really weird. I mean, you're not just weird 24. Oh, my gosh. You're really weird.
I mean, you're not just weird.
You're like really big time weird.
Yeah.
24 with a paid for house.
Yes, sir.
What's this house worth?
Right around 100. You have a $100,000 paid for house.
This is unbelievable.
Nobody does this.
Way to go.
Thank you.
Way to go, you guys.
Absolutely incredible. There's got to be a story
here so tell me how does this happen 23 months so you start this you're 22 yes sir this is yeah
tell me what what in the you tell me how this happened um so i um grew up kind of knowing about
you my dad kind of talks about you through our house we didn't really live by it but we kind of
knew about you and your principles um and so and so I was like, I'm going
to go to college and I'm going to graduate debt-free payoff semester, you know, at a time.
And so I did that for the first two years. And then I met Spencer and I kind of told him my plan
and he was like, okay, we're doing this. So then we did the rest of the rest of my school, um,
cashflowed it. And then we got married, cashflowed that. and then we bought a house and we were like, okay, we're
paying this off as quickly as possible.
We kind of made the goal for ourselves two years and we did it
in 23 months.
Did somebody tell
you you should do this?
I mean, not really.
My aunt and uncle gave us
the book Complete Guide to Money
for our wedding and we kind of read through
it. We're not very good at reading, just sitting down and reading.
So we kind of would just read it in the car.
She'd read it while I was driving or I'd read it while she was driving.
And so we kind of went through.
So once we decided to buy the house, we followed your principles, put it on a 15-year fixed
rate, and made sure the payment wasn't more than a quarter of our take-home pay.
And we just said, we're going to kill it.
Just get on it. You look up did you when you bought it did you think
you would pay it off in two years maybe not quite that fast um but once we started throwing down
some uh chunks of money we looked at it we were like you know what let's set our goal at you know
24 months and we should do it and then uh december of last year we were like hey we can finish it
this month let's do it as a
christmas present let's kill it month early yep yeah there you go so emily you were just coming
out of school that's what you getting the job is is that what that was yeah i didn't work i was
going to school for education so the last semester i couldn't work at all and so that's why we were
only at that 51 000 right i got you okay so then you come out and out of school take the full-time job and then both of you work an extra and everything else, all kinds
of different jobs, everything just going crazy for a period of time.
So, Spencer, was your family doing this? I mean,
did you grow up? No, I mean, I never really
had even heard of you until I started hanging out with Emily and her dad
had some of your videos and a couple books and stuff. And so I was like, this guy
seems like he knows what he's talking about. So both of you just kind of, it's your nature
to have avoided dad. I mean, it was a natural
thing for you. Yeah. And that probably somewhat attracted
you to each other then too. Wow. Amazing. Way to go, you
two. I mean, did you have people i
mean did that were there cheerleaders in the offing somewhere i mean people telling you to go
on you can do this and are most people telling you you're crazy yeah most people were cheering
us on especially her parents and stuff every uh every time we'd go throw down a couple grand or
a few grand down on the house we'd uh tell them about it and they'd be like that's awesome just keep plugging away at it and keep going and keep going and uh we're actually uh
fpu coordinators that were just started our second class this past wednesday and uh having that
community it is really important in uh just your accountability and stuff like that yeah the
community is encouraging because everybody's on fire everybody's gazelle intense living like nobody
else and then when you're leading it you have to do it i mean it's like you know Everybody's gazelle intense, living like nobody else. And then when you're leading it, you have to do it.
I mean, it's like, you know, it's not like a rule, but, I mean, it's like you'd feel weird.
You'd feel like a hypocrite if you weren't into it, you know.
So, and this is your second class.
So most of the time you've been doing this, you've, you know,
been through a couple classes during the 24 months.
Yep.
Wow.
Well, thanks for leading a class.
Got to be pretty inspiring to have your coordinator walk in and go, I'm 24, my house is paid for.
Shut up.
Yeah, really.
I think they can go, you know, can't really argue with that.
This stuff works.
Wow.
Way to go, you guys.
What do you tell people the key to getting out of debt is?
I think the key is to just do it.
I'm not trying to make this a Nike commercial or nothing, but it is.
It's just do it.
Like we were sitting there and we were like, could have decided to be like everybody else
and just spend 20, 30 years with a mortgage, but we decided we were going to do this.
And so literally just not being that victim mentality, having life just happen to you.
We were going to happen to life you we were going to happen to
life and we were going to do it now to start right now well you got an early start you're going to be
so wealthy it's going to be unbelievable if you keep your eye on the ball and keep the thing
between the ditches man i mean you're the math on where you are is incredible absolutely incredible
emily what do you tell our what do you tell people the key is? Pretty much the same thing.
Just go ahead and start doing it, and then it's just going to get easier from there.
Not easier.
I mean, it is definitely hard, but just start it, and then you're going to learn it and get an accountability partner.
We were both kind of on board from the start, so it was really easy for us to keep each other accountable.
But if you don't have an accountability partner or your spouse isn't on board, if you can't get them on board um just find someone who's going to stay
with you and help you through it just walk you through it wow you make it sound so simple what
was the hardest part for y'all tell me tell me something was hard please honestly for me it was
um vacations and not even like extravagant long vacations.
My grandpa owns a house on a lake in Michigan, and that place has always kind of been home to me.
It's kind of where I grew up, going up there with my dad and stuff.
And we didn't get to go up there as much as we wanted to because we were making a decision that we weren't going to spend that extra money on that. And then last year we skipped out on a family cruise in order to be able to throw some money on the house.
Ouch.
Yeah.
So what are you going to do to celebrate now that everything's paid for?
I want to buy a nice guitar.
Oh, good for you.
But what?
You make $100,000 a year, you don't even have a house payment.
Why can't you buy a guitar?
Of course you can buy a guitar.
I'm sure I will.
Yeah.
Emily, what do you want to do to celebrate?
I'm going to get LASIK, and that's about $5,000.
So we're just going to save up for another, you know, a few months and get LASIK.
And then we're looking at buying our, you know, bigger forever home with cash down the line.
So kind of just start saving for that.
Start moving towards something a couple hundred grand.
Yeah.
Wow.
You guys are impressive.
You're amazing. I'm 24 years old. Wow grand now. Yeah. Wow. You guys are impressive. You're amazing.
I'm 24 years old.
Wow.
Wow, wow, wow.
Well, we got a copy of Chris Hogan's retire inspired book for you.
That is the next chapter in your story.
You will be millionaires quickly before you're 30.
Easy.
Oh, my gosh.
Amazing.
Amazing.
So congratulations, you two.
Spencer and Emily from Louisville, Kentucky.
$70,000 paid off in 23 months, making $51,000 to $101,000.
That includes they paid off their house.
Wow.
Count it down.
Let's hear a debt-free scream.
Three, two, one.
We're dead free!
Woo-hoo!
Man, oh, man, oh, man.
You see why I'm a fan of millennials?
You find a couple of them like that, you'll become a fan of millennials.
Because there's a whole bunch of them that fall in that category too wow that's so impressive they get on something they get on it man now if they're not on anything they're enthusiastically ignorant too but the ones
that are on it man these that like that couple they got it dialed in man that's just dadgum
impressive very very very well done.
This is the Dave Ramsey Show. Our scripture today, Joshua 119 Have I not commanded you, be strong and courageous
Do not be frightened
Do not be dismayed
For the Lord your God is with you wherever you go
Jeff Bezos says
If you decide that you're going to do only the things that you know are going to work,
you're going to leave a lot of opportunity on the table.
It's true.
Yeah.
There's always a risk involved in trying something new.
You need to put yourself out there, folk.
There's some things for you to do, you know?
And today's your day.
Dion's with us in Los Angeles. Hey, Dion, how are you?
Hey, how's it going, Dave?
Better than I deserve. How can I help?
Good, good. So I have a quick question for you. So my wife and I, about a year ago, we
actually signed up for a HERO loan or PACE loan. It's an energy efficient upgrade loan.
We put about 20000 into the house for
some roofing and air conditioning replacement. And being told now we're trying to refinance,
I was unable to refinance until the full $20,000 has been paid off. And then that's also the same
on a sale, too. So if we were to sell the property, we would have to take the 20 grand from the equity in the home.
So I wanted to know what our options are.
It's a 15-year financing term with 8% interest.
It's adding about $2,800 to our income account per year.
I wanted to see if I could get a 5%.
Say it again?
How much do you owe on the loan?
$20,000. Oh, still.
Okay.
And you owe, your first mortgage is how much
on the home?
We have $290,000
on the home. $290,000 in the first?
On the first, yes.
$290,000. And so $310,000 is
what's owed total then? Correct.
And the house is worth what?
$370,000.70 okay and they're saying they
will only loan you 80 of that is that what you're hearing correct okay and that 20 has to be or the
20 grand has to be paid off before um any refinancing can be done because i guess it's a
super lean so it actually uh becomes a first uh first uh loan, and then conventional, they won't allow that to happen.
Good Lord.
Well, it has to be paid off as a part of the refinance.
It doesn't have to be paid off before.
It has to be paid off at the table.
Right, right.
Yeah.
Jeez, man.
What a horrible deal.
Yeah, so you can only borrow about $295,000, and you've got $310,000.
And so, really, your first could be refinanced, but the second can't.
So how bad is your credit?
Not bad at all.
What's your household income?
Combined, about $100,000.
$100,000.
Okay.
Run down the credit union and see if you can get a $20,000 loan.
Okay. You probably get a $20,000 loan. Okay.
You probably get a $20,000 loan at the credit union for 8% or 10% and get the thing off.
What's your interest rate on your first mortgage?
I think we're at about middle over 3, 3.5.
So why would you refinance?
Well, we're in FHA right now.
We're looking to go conventional so we can knock off the PMI.
Okay.
All right.
Well, that would make sense then.
Yeah.
That will cost justify on a refinance on a mortgage that size for sure.
So, yeah, let's see if we can move it to an unsecured personal loan of some kind
and just get it off the house.
Right.
Yeah.
And next time you get ready to buy something for your house, pay for it or don't do it, right?
Right.
Very true.
Very true.
Yeah, this will bit you in the butt, man.
It's a bad deal.
Oh, what a mess.
Hey, thanks for the call.
Erica is with us in Philly.
Hey, Erica, how are you?
Hi, I'm great.
Good.
How can I help?
Good.
So my question is, I just moved to Philly.
Everything's still in boxes and everything.
But I moved here for a job making double what I made at home.
Awesome.
I now make $100,000, and I have $20,000 in loans because of the move,
because I had to move so abruptly.
$20,000 to move? Well, no. I had to move, because I had to move so abruptly. $20,000 to move?
Well, no, I had to move, but I also had to.
I was unemployed for about three months.
Okay, so don't blame it on the move.
Yeah, no, no, no.
Okay.
So it was just a bunch of stuff.
But it's only $20,000 at this point.
It kind of feels like a joke in the bucket.
But also, on top of the $20,000 um my grandmother paid for my school she paid 50 000 and she asked
that every grandchild pay um 5 000 back so technically i have to pay her a hundred dollars
every month until it's paid back you know just because like she doesn't ever bring it out but
she's just like okay you know it makes it her feel good. So you pay $100 a month, okay.
Yeah, so my thing is, should I put that in the debt bill, too?
Yeah, definitely.
Okay, okay.
It's a debt.
You got $25,000.
You used to make $50,000.
Now you make $100,000.
You're going to pay the $25,000 off real fast.
Yeah, exactly.
Because you're not buying anything until you get this debt cleaned up.
No, no, no.
Don't you tell me you were forced to buy a couch.
No, no, no.
Definitely not.
I don't even plan on buying a TV.
No.
Well, you need to be working.
Thank you.
You're going to do great.
You're going to do great.
You're going to clear the $25 up in a year,
and I suspect Grandma is probably going to get paid by Christmas,
and that's going to be a wonderful day.
Okay.
Other questions.
Quick question.
Should I get roommates, or can I still live on my own?
What are you paying in rent?
$8.75.
Okay.
But it's month to month, so I can have the option.
I do have the option to move.
Okay.
Is it a one-bedroom?
I'm a studio one-bedroom, yeah.
So where's the roommate going to stay?
Well, no, I could move into a roommate district.
Oh, okay.
Well, that's up to you.
What I would do is live there for a little while.
Let's get settled and get in the groove of working and paying rent
and working and paying the debt down, working and paying the debt down.
And then if you decide later you want to add roommates to the equation
and make another move, then yeah.
But let's just calm down.
You just now got there.
Okay, let's settle in.
Make some money, kiddo, and get this mess cleaned up.
That's why you went.
And then we'll worry about roommates and stuff.
So for six months, no, stay where you are.
And then let's see.
Then you can rethink that idea if you want to at that point.
Ed is in New York.
Hi, Ed.
Welcome to the Dave Ramsey Show.
How are you doing, Dave?
Better than I deserve.
What's up?
My question is, we had some good fortune.
We were listening to your show, my wife and I, and we were going to start the baby steps.
But then my wife's grandparentsparent's house came up,
and we decided to sell our house and accept their house.
And by selling our house, we eliminated all of her debts.
Good.
Now, the thing is, we live with a relative there in the house that owns the house.
But once he moves out, we owe him for his half of the house.
So I'm just wondering, as far as saving for retirement,
do I just keep stocking away the money until we determine if he's going to leave and pay him?
You live in the house with who?
My wife's uncle.
That's kind of weird.
Well, we live downstairs.
We live upstairs.
Okay.
What's the house worth? We don't cross paths except for. We live upstairs. Okay. What's the house?
We don't cross paths except for a garbage dump, you know?
Okay.
What's the house worth?
About $110,000, $120,000.
Okay.
So you have to give him like $50,000.
Right.
And where are you planning on getting that?
Well, right now we don't owe anything as long as he's there.
So you have zero debt. Your half of the as long as he's there. Right. So you have zero debt.
Your half of the house is being given to you.
Right.
As an inheritance or whatever, right?
Right.
Okay.
Well, you could go get a mortgage for $50,000 if you had to when he moves out.
I mean, he's also willing to take payments after he leaves.
I think I'd probably just get a mortgage rather than pay him.
Right.
That's just messy.
And also just ask him, you know, say, well, we could put it on a mortgage or I could pay you in cash.
What kind of a discount would you give me if I just pay you in cash?
Right.
And then go get a mortgage and pay him in cash if you don't have any money what's your income
uh my wife and i you know we take home about 48 a month okay well i mean it'd be cool if you just
start chunking away everything you could chunk away and uh be ready to buy out his half when he
leaves i mean our expenses are only like 500 a a month right now. You put the bills in half.
Yes, I would delay retirement in your case,
and I would count this as saving up for a down payment on a house and call it baby step 3B.
You have an emergency fund?
Yes.
Okay.
Beyond your emergency fund, then,
how quick can we put $50,000 away in your situation?
I mean, we're betting on maybe $3,000 a month.
Yeah, that's what I was thinking.
I'm thinking 18 months, you've got your money.
If he'll live there for 18 months, you'll be able to write him a check.
Matter of fact, you might offer him the check to leave once you've got it, right?
Pretty cool situation.
Hey, neat. Very neat.
Thanks, Ed.
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