The Ramsey Show - App - Co-Signing for Loans Changes Family Relationships (Hour 3)

Episode Date: December 20, 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. The phone number here is 888-825-5225. That's 888-825-5225. That's 888-825-5225. Well, guys, my favorite show of the year is tomorrow. Friday, December the 21st, our entire three hours will be focused on giving.

While a lot of folks this time of year are thinking about what we'll be getting for Christmas, we all know there's so much more than giving. Yeah, it's called so much more in giving than in receiving. And so we're going to celebrate generosity, and we're going to take stories tomorrow. And if you want to include your story, email it to Kelly right now, Dave on air at DaveRamsey.com. Put giving in the subject line, DaveOnAir, because I want to hear giving stories and receiving stories,

something that will inspire, make people that are riding along in their cars laugh and cry and be more noble as a result of hearing about generosity. That's what the three hours will do. You do not want to miss it. It is always classic. So DaveRamsey.com. You can learn more. Don't miss it.

Tons of ways to watch and listen. This show is everywhere. It is really easy to get a hold of. Robert is with us in Chicago. Hey, Robert. Welcome to the Dave Ramsey Show. Thank you, Dave. I'd like to thank you for your time and taking the call. Certainly.

How can I help? All right. I'm 50 years old. Just went through FPU, finished it up last month. Wife and I are on baby step number two. And we have $130,000 in debt. And let's see, I'm a subcontractor, and so however much I work is how much I get paid. Before the class, I was working roughly 40 hours a week.

I took the class, I'm working roughly 80 hours a week, working seven days a week, trying to get our debt knocked out. Gotcha. What kind of debt have you got? I've got $20,000 in a truck payment, $13,000 in a car, $60,000 in student loans, and the rest is medical. Okay. And what do you guys make? What's your household income on a normal year? Let's see. This is, it has varied with the type of work that I make, with Dave.

But in a normal year, we should make, I'm going to say, 130 to 140. Okay. All right, good. And you're kicking that up right now with all the OT, right? Yes, sir. Okay. And your question's what? All right.

I've been in construction for 27 years, you know, roofing, home repairs, home building, that type of work. And so the company that I'm subcontracting for now has offered me a position with the company. It's a salary position to instruct people on how to install the product that I'm currently installing. It's a salary position of $55,000. Why would you take that? What do you make now? Of the $130,000 to $140,000 income, how much of that's yours? All but about $35,000 to $140,000 income, how much of that's yours? All but about $35,000.

Okay, so you make $110,000 now, and they're offering you $55,000. Yes, but I would be just instructing people on how to do the job that I'm currently doing. I understand, but you're cutting your pay in half. Exactly. Why would you do that i've got ankle problems knee problems back problems shoulder problems and it gets me out of doing manual labor we need a different plan to get you out of manual labor that doesn't cut your pay in half okay and um how old are you 50 okay all right so what i would start saying is what do i need to be doing three years from now five years from now two years

from now i don't care that pays a hundred thousand dollars a year and has an upside from there that is my new career what we call our encore career our next take a bow after the first act, right, of the play. Yes. The curtain goes down, we take a bow, and then we go on to the second act. What's your encore? What's your follow-up here? And I don't know what that is exactly. It might have to do with you teaching,

but teaching in a different way than what they're offering you, because that's no bargain what they're offering you, because that's no bargain that they're offering you. You're just wanting to not have, you know, you got a lot of physical pain, and I don't blame you for wanting to get away from that, because I'm pretty much a wuss with physical pain. But let's just develop a plan here that says, okay, in X period of time, I'm going to take the steps. I'm going to take a class myself, or I'm going to open a business teaching people to do what I do.

I don't know. Or maybe you start hiring people to do what you do and run a business. And if you could teach them and, I mean, let's say you ran a remodeling company and you were the general contractor. Well, you know what everybody's supposed to do, and you can look over and make sure it's being done, and you know what it should cost. You know how to estimate a job, and so you can do everything with a clipboard and, you know, as the GC, without swinging a hammer or turning a wrench. And so maybe that's your thing. I've got a friend of mine that does renovations and

does small repairs, everything from replacing a dishwasher or, you know, minor stuff, almost handyman stuff, all the way up to putting a deck on the house or whatever. And he's got a couple, three crews running. He's making about $300 a year. Okay. You could develop into that. I don't know. I don't know what you're going to do.

I don't blame you for not wanting to do the stuff that's causing you physical pain. And I'm with you to move away from that. But I think you're worth more than $55,000. Okay. Maybe not to these guys to do that job. I'm not saying that job that they're trying to rip you off or something. I mean, that may be all it's worth to hire somebody to be a teacher to teach that stuff. But I know you can be a GC and make $100,000.

All right. Because let me tell you, I've been around the construction business and own a bunch of real estate, have a lot of people working on the real estate all the time. If you want to get rich in the construction world, you have to show up on time, price your stuff fairly reasonably, and complete the job on time, and show up every day until it's done. If you do that, you'll have more work than any, because nobody does that in the business. You know it. Yes, I do know that.

People are contrary, and they don't finish stuff on time. They don't do what they're supposed to do, you know. And, you know, if you just show up on time and finish the job like you said on the price you said, and you give them a fair price to a high price, not super high, I'm not gouging them, but, you know, you can charge a lot if you follow through, and people will just line up to use your services. And I think maybe that's your deal. Maybe you build a contracting business.

I don't know. But it may be time for you to direct other people rather than swing the hammer and turn the wrench. For today, though, you're going to keep that job while you're working your way out of debt and making your conversion over to a general contractor's position. Or whatever it is you're going to do. That was just one idea, one radio call.

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We operate on the largest GSM network in the U.S. to ensure you receive reliable coverage virtually anytime, anywhere. Plus, you can keep your same phone and number and add multiple lines to save more. We're so confident you'll love Pure Talk USA that we invite you to try our service risk-free. Just visit puretalkusa.com, enter promo code SAVEDAVE, no spaces, and receive 50% off your first month. That's puretalkusa.com, promo code SAVEDAVE. Elisa is with us in Wyoming. Hi, Elisa. How are you? Good.

How are you doing? Better than I deserve. Merry Christmas. What's up? Merry Christmas. Well, my mom co-signed about five or six years ago on student loans when I was going to college at a university out of state. And she has now recently come up where it's probably two or three times a week that she calls me and wants me to get her off as a co-signer. You can't. And at this point, I don't have a way.

You can't. And that's what I've tried to tell her. I just... Her next solution was to get a loan from a bank. So I don't know really where to go with the conversation. So what do you... What do you two owe on these loans? Right under $25,000.

Okay. And what do you make? I'm actually a stay-at-home mom. Okay. My husband makes about... What's your degree in? I'm still working on that. I'm going to school for special education and elementary education.

So there's nothing being paid on the loans right now? We're making payments. Why? My husband is just to keep some of the payments down. I see. So what does your husband make a year? We write a little over $100,000. Okay.

And how much other debt other than $22,000 do you have? Not counting your house. Probably $25,000. So $50,000 gets you out of debt and you make $100,000. Yes. Okay. And you're paying for school000? Yes. Okay. And you're paying for school also? Yes.

Okay. And when you finish the degree, you plan to go to work? Yeah, right away. Okay. And how much do you like finishing the degree? About a year or two. Okay. All right.

And if you're going to go to work when you finish the degree, why are you not working now? I recently decided to quit my job, and with the money that I was making as a special ed aide, was paying for insurance and daycare. And so my husband got a job with insurance, and I decided to stay home. Okay. All right. So you weren't making enough to even cover the costs of you working? Not really.

Okay. But getting your degree in that field will allow you to make more? Yeah. Okay. They start off teachers here at like $46,000 as first-year teachers. Okay. They start off teachers here at like $46,000 as first-year teachers. Okay. Well, aside from your mom's request, number one, if you guys can get a bank loan and you want to get a bank loan, you can. There's nothing wrong with that.

Okay. That's up to you if you want to do that and if you can do that. Probably a better plan would be let's just pay it off in a year. Let's get on beans and rice, rice and beans. You figure out some stuff you can do while you're at home that generates some income. And I am doing a little bit of that. Okay, and let's do more. And let's get on a really, really tight written budget.

And you and your husband start looking around going, what have we got to do to get out of this debt? Okay. And, you know, let's knock off the $22,000. I think you could have her off of this and you off of this in one year. I know you can. Should we move that up on our snowball? Well, no. I mean, you only have two debts, I thought.

$22,000 and $25,000. I have the $25,000 and then the other is like student loans from his degree and credit card and oh so that's not your only debt no so it's not 22 and 25 bigger no okay i ask you what your other debts other than your house was and And I got $22,000 and $25,000. What else is there? Just one credit card that we're working on. We have my car payment. What do you owe in your car? I want to say $22,000.

No, not $22,000. $10,000. $10,000 on your car. Okay. And so you have a $10,000. Go ahead. I'm sorry. We have cattle so our cattle from our calves check goes to the loan every year plus monthly

so you owe money on your cattle no No. It goes on what loan? Our car payment. Oh. Our car loan. Okay. All right. What is your cattle worth if you sold them all today? Probably $100,000.

Not even $100,000. $35,000. Yeah. Sell them. $1,000. Sell them. Okay. And let's clean your debts up.

Okay. And then aside from that, okay, so we got $35,000 to throw at these debts. I got $22,000. I got $25,000. I got $10,000 on a car. And then there was about, what would you say, how would you sell on the credit card? $800,000. $800,000, so nothing.

Okay. All nothing. Okay. All right. Yeah. And so if we sell, if I got it right, there's four debts. Is there four debts? Yes. A car. What's the $25,000?

We have $25,000 for my student loan. Oh, he has like $10,000 student loans also. Okay. All right. And what's, okay, so 10,000 on a car, 10,000 on his student loans, 22 on your student loans, 800 on a credit card, and then you mentioned 25. What is that? My student loans is 25. They're not 22? No. Okay. So there's not a 22? No. Okay, so there's not a 22.

No, it's just the other ones combined. Okay, so let me try again. All right, so you owe 25 on student loans, he owes 10. You owe 10 on a car and 800 on a credit card. Is there anything else? No. Okay, and so that's $45,000.

$35,000 worth of cattle pays off almost everything. Okay. And you'll have her paid off and be debt-free very, very quickly making $100,000. Yeah. That's what I'm doing. And that's not because of her request. It's because

it's a smart thing for you guys to do to get out of debt. Because effectively, if you line it up on a balance sheet, assets on one side, liabilities on the other, it's as if you have borrowed on student loans to buy cattle. Because instead of paying off your student loans, you bought cattle. My husband has had those since he was six. Okay. So they were just there anyway. Mathematically, it is as if, since one is on asset and one is a liability,

on a balance sheet, if you list two columns, you know, assets on one side, liabilities on the other, debts and things you can sell on the other, when you compare them against each other mathematically, it is the same thing. So I'm going to sell all of his sweet little cows and he can get him some cows later when you guys are debt free and he makes more money and you make more money and your mom is not calling you about a co-signed loan that you should have already paid off. And so, yeah, let's get it cleared up. Let's get it done. That's what I would do. Thanks for the call.

Matt is in New York. Hi, Matt. Welcome to the Dave Ramsey Show. Evan, Evan, I'm sorry. I don't know where I got Matt. I'm losing my mind. Evan, how are you? Good.

How are you? It's really an honor to speak to you. And it's the first time I call a long-time listener, so I'm hoping you can help me out. How are you, Dave? really an honor to speak to you. And it's first time caller, long time listener. So I'm hoping you can help me out. How are you, Dave? Better than I deserve. Merry Christmas. How can I help? Merry Christmas. Basically, I've always been debt free. I've been listening to you since I've been in high school on the Fox Business Channel back in the day, many years. Anyway, I've always been debt free,, stayed away from credit cards, and been good.

I love my life. I asked her to marry me, and everything is great. But, of course, we have $300,000 in student loans. Good Lord. Is she a doctor or a lawyer? She's going to be a pharmacist. Great. Yeah.

But it's $300,000. Obviously, that doesn't change anything. But I want to fix it, and I want to move forward with her. But now, real quickly, this is where I'm in a little bit of a dilemma. What I'm thinking about doing is eating beans and rice and rice and beans and just beat the snot out of this debt and move forward. Yeah. However, this is a federal loan. I would do.

No, listen, you need to pay it off as fast as you can after you're married. You don't need to pay a dime on it until you're married. But pile up cash as high as you can pile it. And when you come home from the honeymoon, throw as much cash at this as you can. And as long as she is on board with you guys attacking this debt with a vengeance, then she's a keeper. But if she thinks you ought to keep it around

like a pet, she might not be. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress.

And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice and I can tell you where to go.

But it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. James and Amanda are with us in Chicago. Merry Christmas, guys. I see you on my screen. You're debt-free. Congratulations. Hi, Dave. Merry Christmas to you.

Well done. Congrats. How much have you paid off? $77,000. Say it again. $ you paid off? $77,000. Say it again? $77,000. $77,000. And how long did this take you? About 25 months.

Good for you. And your range of income during that time? We started off at $80,000 and ended just over $115,000. Great. Very cool. What do you all do for a living? I'm a nurse. And I'm an operations supervisor. Okay, good. What kind of debt was the $77,000? We had majority

student loans, some medical bills, and then cars. Okay, cool. How long y'all been married? Oh, gosh. About seven and a half years. I don't know if i like the way she said that jane it's a long time i think it's seven and a half years oh man okay so what happened two years ago 25 months, that caused you guys to go crazy and get out of debt?

Well, Dave, when we first started, I had a friend, a co-worker, introduce your book to me. And as you say, the student was not ready when the first teachings had come. I got a new job, bought a brand new car, and started looking at two very large car payments that were close to the mortgage and thought, this is crazy. So I started digging in deep and trying to find out how can I get this done, and then I started telling Amanda what I wanted to do and not why I wanted to do it. It didn't start off too hot, but then once we got on the same page, everything was excellent. Okay.

So Amanda, when he decided to talk about why it was important to get out of debt, did that change things for you, or how did you come around? It took me a little bit, I won't lie. I liked the freedom of spending what I wanted, but once we got started and I saw how much money we were saving and how quickly, how much quicker we were paying off the debt, I was on board, and it was great from there. Okay, yeah, there's nothing like traction to convince you.

Yeah. Yeah, and Dave, you don't come home and tell your wife, I'm ready to sell your car, and she doesn't understand why. It's not a good plan. Yeah, that probably violates about six things, you know. Wow. Well, that's why she's going like, we've been married a long time right there. All right. Very cool. So what's the secret to getting out of debt, Amanda?

I'm going to say budget, budget, budget, and you've got to have discipline. Now, you were the one that didn't want to limit on your spending, and now you're the one saying budget, budget, budget. Did you feel unfairly constricted, or did you have a vote in how much you guys tightened this up? At first, it was all James and how he worked out the numbers, and I wiggled a little bit out of him, a little bit more. But once we had it set, I actually found, like, he gave me this certain amount a month, and I actually found I wasn't even spending that much per month. Okay. Yeah, Dave, you can kind of decide and, you know, listen to who's the nerd and who's the free spirit.

And quickly I learned if I allow some of the small battles to go by and just take it, you know, the war can be won. But you've got to give and take. Yeah, well, that's right. That's right. And she has a vote. Absolutely. Very cool. Good.

Very good. And so what about you, James? What's the key to getting out of debt? Obviously, as we stated before, I don't think you could get through this if you're not on the same page with your spouse. If you're married, I came home and i was super fired up type a i wanted to sell everything put the dog on ebay and i could just see in her eyes she was confused what why are you so fired up and who are you and what you do with my husband yeah weren't you the guy that just bought a new car yeah yeah because i and the

problem with the new car dave was i i bought the car, I got the new job, I thought I deserved this, and I was as frugal as can be, and it's almost like I had to force myself to buy the car, and I felt immediate regret. Interesting. But then when I told her, look, I'll sell my new car I just bought a couple months ago, and then she said, no, you're not. But we did. Okay, you sold that we did yeah i bought a 29 000 honda and sold it um for the same model honda just uh what 14 years older that's great you had to do and it still gets you there yeah that's hilarious absolutely very cool well congratulations you two very proud of you who were your biggest cheerleaders i would say our family and friends um also our local church cornerstone family church

came around us we're able to do financial peace here through some of the church leaders, and there were some people at our church that also follow your guidelines, so we thought I wanted to give them a shout out. Yeah, very cool. So Financial Peace University and being on the same page and being on a budget, and here we are, $77,000 lighter. How does that feel? Amazing. Never again will we be in debt, I can tell you that. Yeah, and Dave, the pressure I felt that I didn't realize I felt, and even in my wife's eyes, I could just tell there was tension there, and we had just these little bickering moments back and forth all the time, and now we'll go to dinner and we just look at each other like,

this is really nice. We'll never go back. You just bought something. Yeah, it's just nice. You don't have to think about it. A friend of mine says you've got to learn to read the menu from the left to the right again. Yeah, absolutely.

Because everybody reads it from price over, right, instead of reading like, what do I really want? Yeah, absolutely. Good for you guys. Well done, well done. We're proud of you. We've got a copy of Chris Hogan's book for you, Retire Inspired, and signed by him. Of course, that's a number one bestseller.

And right after the first of the year, we're going to send you the Everyday Millionaire book that he's got coming out in early January, because that's your next step. That's your next chapter for you to be everyday millionaires. Excellent. Thanks, Dave. Congrats, y'all. We're proud of you. Very well done.

Thank you. James and Amanda, Chicago, $77,000 paid off in 25 months, sold the car, making $80,000 to $115,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're not free! This is how it's done.

I love it, you guys. I absolutely love it. Fabulous, fabulous, fabulous. Beautiful job. Open phones at 888-825-5225. Well, tomorrow is our giving show, and then you will be getting best ofs, of course, for Christmas and New Year's. So that was our last debt-free scream of the year. This year, just on the air only,

$41.6 million of debt-free screams. Just this year. Last year it was more than that. But we average between $40,000 and $50,000 a year, sometimes a little higher than $50,000, right around there. So roughly every couple of years is $100 million. And so that means over 20 years, yeah, you start adding it up. If every year is roughly $50 million, then that means 10 10 years is 500 million and 20 years is a billion.

That's just on the air. That's just the people that stood in the lobby or called in. And you know that that's just the tip of the iceberg, right? You know that's just a small percentage. Because a lot of you don't want to be on the air. A lot of you just love hearing other people's stories and you're happy and I run into you somewhere and you go, well, I never called in,

but I am debt-free. Can I just do my scream? Sometimes I stand out in the middle of the parking lot and do it. But that's okay. You know? That's okay. You're debt-free.

But of the people that called in this year, that's pretty amazing, y'all. You people are incredible. We're proud of you. $41.6 million paid off in debt-free screens this year alone in the year 2018. Wow. My work is not done yet, though. This is the Dave Ramsey Show. our scripture of the day hebrews 10 35 and 36. So do not throw away your confidence.

It will be richly rewarded. You need to persevere so that when you have done the will of God, you will receive what he has promised. Robert Shuler said, tough times never last, but tough people do. Matt's with us in San Antonio. Hi, Matt. Welcome to the Dave Ramsey Show. Hi, sir. Thanks for listening to my call. Sure. How can I help? Yes, sir. I got a question for you. I'm 47 years old now. I've got

a mandatory retirement in about nine and a half years. And I've come to the question of whether or not paying down my mortgage or starting on some college savings for my 12-year-old daughter. Okay. And I've kind of got a predicament here because I may have to retire sooner than expected at 57, maybe in a couple years. I had cancer. I'm in remission right now, but this is the second time it's come back. And I've been trying to follow the baby steps,

but this whole situation kind of got me worried that maybe I need to pay out down the house first rather than paying for the college. Okay. Well, both have to be done, right? Right. rather than paying for the college. Okay. Well, both have to be done, right? Right. So I don't know why the order changes here.

If something happened, you would want your daughter to go to school, and you would want your mortgage to be paid off. Both are very, very important. So what do you owe on your home? $99,000. And what is your household income? $157,000. Okay.

And you're putting 15% of your income away, and you're out of debt except the house? I have $25,000 in debt total. Oh. $9,000 in savings. Okay. And about $325,000 and a 401K. Okay.

What we teach folks to do is to work what we call the baby steps, okay, because it's the shortest path to wealth, and that's the path you want is the shortest path to wealth. Now, what we teach folks to do is baby one, is you are on a tight budget. You're in agreement with your spouse that we're going to hit some of these goals, and we're going to cut our spending, and we're going to completely focus on these goals as we hit them. And then as we hit them, we move right up and we lay a foundation,

and then we start building our financial house once the foundation is in place. So temporarily stop investing anything. goal number one is a thousand dollars in the bank you've already got that you've got nine goal number two is take all money that is not retirement money and throw it at all non-mortgage debt and all money from your budget that you can squeeze out and throw it at non-mortgage debt. So you have $9,000. We'll set aside $1,000 for Baby Step 1. That leaves $8,000 to throw at the $25,000.

You make $157,000. And so we've got $17,000 left. We're going to clear that $17,000 in just a matter of a few months. Okay. And you're 100% debt-free except your home. Then you go back to the $ dollar account in baby step three and raise it to a fully funded emergency fund of three to six months of expenses and uh now once you've got that rainy day fund in place then the next thing you are to do is to start your retirement at 15% of your income. Then your 12-year-old needs to go to school. We need to start thinking about how we're going to do that.

And above that, anything we can squeeze out, we're going to throw it at the house. And so what I would do, I think you've got enough to accomplish all of your goals. I don't know if you're going to accomplish them exactly when you want to, but you've got a pretty good income, especially if you can retain your health. There's a lot of places you can go from here. So what I would do is walk your way down through those steps, putting 15% away. I would sit down with a good broker and help you lay out exactly how much you need to save you got six years and which kid is going to where's she going to go to school we're going to put her

in an in-state school in-state tuition and four years worth of school is going to cost x and you can look it up and figure that out we know exactly what the target is and how much do i have to save a month to cause that to happen in addition addition to 15% going into my 401K. And then every other dollar I can get my hand on, I'm going to throw at this house. I think you'll have your house paid off and do every bit of this in five to seven years. Okay. But that's not 57. You said you're 52.

I am 47. Oh, you're 47. My mandatory retirement is at 57. Yeah, mandatory, but you were hoping to retire sooner. Well, it just depends on how my health goes. Okay, so if at 52 to 54 you were 100% debt-free and college was done, we have won, right? Yes, sir. Yeah, and then the only thing left to do is to become very wealthy and you know

become an everyday millionaire and take care of everything with just piles and piles and piles of investments so yeah you get that house paid off it goes zoom zoom from there depending on what you do with your income and so forth and you've got a mandatory retirement you said coming at you if your health stays in place you need be thinking about what you're doing for your encore. Because you'll still be young. Yes, sir. And you've got the potential to make a lot of money after your mandatory retirement. And so, yeah, you're not going to sit around on the fishing boat the whole time.

You may do some fishing or some golfing or whatever, but we're not going to spend all of our time there. So, hey, good question. And that's exactly how I would do it. Hold on. I'm going to send you a copy of the book, The Total Money Makeover, which will show you exactly how to do that step by step. Scott is with us in Minneapolis. Hey, Scott, welcome to the Dave Ramsey Show.

Hey, Dave. Hey, first of all, thank you. A year and a half ago, I bumped into you on YouTube. At the time, my daughter had just graduated from college, had $20,000 in the bank. And we said, when you get your first real job, you can go buy a new car. Listen to you, and three weeks into that, I realized, no, buy a $10,000 car and send $10,000 away for an emergency fund. And that's what she did. So thank you.

Great. So we's what she did. So thank you. Great. So we've got four kids. Our second oldest will graduate in May from college in three years. Thank her for that. That will leave us, when we pay that bill, $725,000 in 529s, which my parents had established. We've spent our money down first. We'll only have two kids left and $725,000.

I'd like to transfer money, ownership, hypothetically, like $30,000 today to my 20-year-old. Why is there so much money in your $529,000? So I think they superfunded. And the principal on those accounts is anywhere from 50% to 66%. So obviously the oldest, that one grew the least. Yeah, so it grew. It wasn't, yeah, they became uncomfortable with it. They're not here anymore. But what I'd like to do is tame some of that down.

So, again, we're going to have $725,000 and two kids left to go. Has anybody gotten scholarships? Well, yes. So what I'm doing now, I know, like this year, I'm taking all the scholarship money out, and we'll just pay on the gains. We won't pay a penalty. But I also want to transfer $30,000 or $40,000 today to my 20-year-old, put it in her name, and then she can turn around and request a check, and then she'll need to pay a 10% penalty on the non-principal part plus income tax.

My wife isn't comfortable with that. She's worried that there's not going to be enough money, but we're not going to have a doctor or a lawyer. So I really want to, you know, this year, next year, trim those to save $30,000 or $40,000 a year. Yeah, definitely. They're completely out of control. I mean, unless these kids are going to

freaking harvard or something well and dave you'd be proud my oldest second most expensive school in minnesota she got through it for 50 of retail because of merit-based scholarships yeah every bit of that you can pull out without taxes or penalties you may want to go back and do some omitted returns but yeah you're going to take some hits on this money as you pull it out. There's no way around it. And you need to get some professional tax advice to work your way through how you can drain these things down. Because you're going to end up hammered here. Wow.

Yeah, you don't think I've ever run into anybody overfunding college. That puts this hour of the Dave Ramsey Show in the books. 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. 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 DaveRamsey.com slash show.