The Ramsey Show - App - Coupons, Contentment, Consistency and Commitment (Hour 3)

Episode Date: January 1, 2019

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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. This is your show, America. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Starting off this segment, Long is in Sacramento, California. Hi, Long. How are you? Hi, Dave. Thank you so much for taking my call. Sure. What's up? I really need your help. Just thank God I came across your videos. I just came across some of your videos the last week here, and I thought I'd

give you a call just for some help and advice. I accumulated about $40,000 in debt, and I just want to know where I got to start got to start. I'm just lost. Okay, cool. What's your household income? $60,000. Okay. You're single? I'm engaged.

Good for you. When are you going to get married? January. Fun. Fun. Good for you. So you make $60,000 a year, and you have $40,000 in debt. Correct.

And what is the debt on? $20,000 is in student loans, and $18,500 is in a car. Okay, cool. All right. Well, what we tell folks to do is to get really, really angry and get really, really focused on the debt, because the quicker you have no payments, the quicker you're able to be more generous and to build wealth. You can't do that when you're broke.

Your most powerful wealth-building tool is your income. And when you can get rid of the payments, it cleans up everything. And so if I woke up in your shoes knowing what I know today, getting ready to get married, I would get really excited about paying this stuff off as fast as I possibly can. Beans and rice, rice and beans. You don't need to see the inside of a restaurant unless you're working there. I have to add in something else, too. I do have $50,000 in cash that I saved up for an emergency,

but I don't know if I should just cash out on all the debt first. Okay. How is the wedding being paid for? We're going to go to Hawaii and Elope, just a destination wedding. Love it. Good plan. Got the money for that? Yes.

Okay. Is that included in the $50,000? No. Okay. So in addition to $50,000, you have the money to take care of the wedding? Correct. Does she have debt? No.

Wow. Very cool. Okay. Well, here's the thing. Personal finance is about 80% behavior. It's only about 20% head knowledge. So I would write a check today and have you debt-free. That would definitely feel good.

Yeah. The downside is this. If you don't pinky swear and spit shake with her that we are never borrowing money again, and you don't get on a budget, and you don't say, next time I want a car, I'm paying cash, and everything we do from this point forward, we're paying cash, we're getting rid of the credit cards, we're going to get debit cards, we're going to be on a budget, we're going to have a plan. If you don't start doing the things that you're supposed to do to avoid debt,

then you'll go back into debt. Right. Where'd the $50,000 come from? I've just been saving cash on the side and, you know, just paying off the minimum payment of my bills, but I've just been saving up cash over the last couple years. So you already know how to live frugally. Right.

You just were putting it in savings instead of on the debt right okay well that's good news so you can take that same live frugal idea and now without any payments you'll be able to be able to save even more and by combining incomes with her and she's debt-free at marriage you'll be able to save even more and so and have a good life in the process so you're going to have a great life. But you see my danger signal. My warning is if we write a check today and pay off the debt, which I would do, the warning is make sure the habits that allowed the debt to be there in the first place are changed.

Now, student loan debt, you did, obviously, back when you were in college. You bought a car after you got out of school. But next time you get rid of a car long, you've got to pay for it in cash or you can't buy it. Next time you go on vacation, you've got to pay for it. You can't buy it. You can't buy anything unless you pay for it. You just kind of have to make that pact, that covenant with yourself. And if you'll do that, then I've given you good advice.

But if you use this $50,000, you turn around and go back in debt, then I gave you bad advice. So you need to have that warning built into this advice michelle's with us in utah hi michelle welcome to the dave ramsey show thanks dave it's an honor to talk with you and you how can i help well my husband and i recently figured out a plan where we can pay off our home in five years, but it would require us to stop contributing for retirement during that time. So we're just wondering if we should do that or if that's too long to not be contributing. Okay. Well, we teach people to put 15% of their income into retirement

after they're out of debt and have an emergency fund. Call that baby step four. Sorry, that's what we've been doing for about the last three years. Okay, and what's your household income? It's $60,000. Okay, $60,000. And so let me put that in here. Okay, so that's three.

I did something wrong. Okay, what is that? So that's three. I did something wrong. Okay. What is that? $60,000. $9,000 a year, right? It's 15%. Okay. And so if we don't stop retirement, it changes the equation by $28,000 over three years.

Five years, it changes it by $50,000. And so it's going to take you eight years to pay off your house if you don't stop your retirement. And you don't get any raises. Right. It's going to take you five years if you do stop your retirement. So the argument is not over really whether to stop the retirement. The argument is, is it worth stopping retirement for five years to gain three years?

So we're only arguing about three years. Yeah. It doesn't really give you that much. It only arguing about three years yeah because that's all it doesn't really give you that much it only gives you three years no i wouldn't stop it for no more gain than that i think you're as you're going to get raises and i think you guys are so on top of your money and i think you're doing such a good job managing it that i think you're going to probably hit about the five-year mark anyway even if you don't stop it um because i think you're going to see your income come up during that time and you're going to see your income come

up during that time, and you're going to continue to see prosperity because you've managed your money well. It might take you six years. It might take you seven years, but so what? So what? No, I would not stop Baby Step 4 in order to do it in this case. There's very few cases I will stop Baby Step 4 to pay off your house early. I want your house paid off, but we're not talking stop Baby Step 4 to pay off your house early. I want your house paid off.

But we're not talking about whether or not to pay off your house. We're talking about whether to pay it off in five years or whether to pay it off in eight. I'd pay it off in eight. But I think it'll be sooner because I think you're going to see raises due to your diligence. That's what usually happens here. Hey, thank you for calling in and thank you for listening. This is the Dave Ramsey Show. It's time to take another look at your budget. That means scouring every expense and making sure you're not leaving any money on the table.

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or better yet, see how you can pay off your house early. Think about it. What could you do with your money if you didn't have a mortgage? Call Churchill at 888-LOAN-200, 888-LOAN-200, or visit ChurchillMortgage.com for your Churchill checkup. That's 888-LOAN-200, or ChurchillMortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Thanks for joining us, America. This is the Dave Ramsey Show. Open phones at 888-825-5225. Natalie is in Abilene, Texas.

Hi, Natalie. How are you? Very good, Dave. Thank you. Good. How can I help? Well, my husband and I got married in April. We cash flowed our wedding.

Yay! We had plans to get debt-free, you know, aggressively, you know, working two jobs and overtime and stuff. And, of course, God had different plans. And we're now expecting we got pregnant a month after. It's been a it hasn't been an easy pregnancy. I've needed physical therapy and things like that. And and so now we're just trying to and my company has had several budget cuts this year due to Medicaid costs because we work with Medicaid clients. And so now we're just getting really nervous because the baby is due next year. Our insurance rates, thanks to healthcare.gov, are doubling. It'll be $950 to $1050 for our family, which is twice what we're paying now.

And I'm taking a severe budget cut for the three months I'll be home. And hopefully I can come back to work full time. And we're just trying to figure out how much does a baby cost? How do we budget for this? Do we put our student loans on hold? Do we stop paying 401K? I mean, we're six years out paying $2,300 a month aggressively for student loans, and that's not counting the $1,000 a month that we've been told we should set aside for the baby, for daycare and diapers and all these things.

So we're just trying to budget. We're trying to and diapers and all these things. So we're trying to budget. We're trying to be proactive and not get surprised. But, I mean, we don't even know what numbers to use. Gotcha. Okay. Well, the first thing is we tell folks not to be investing in their 401K while they're getting out of debt. So stop that.

Okay. For how long? I thought that was only for like the two years. No, you're going to be out of debt. How much okay second thing i thought that was only for like the two years or i mean no you're gonna be out of debt you're gonna be out of how much student loan debt do you have 165 good lord who's the doctor or lawyer i have a master's degree from a private university it was before i knew of you and my parents had no idea so So what is your household income? We bring home net on average about $4,800. And we're putting $1,000 aside every month right now. I got that.

I got that. Just a second. So you're at $60,000. So you're making about $75,000, $80,000 a year, and you got $165,000. What is your master's in? Occupational therapy. Why are you not making more? I know.

I don't know. I mean, Medicaid. Every time Medicaid or Medicare. No, I'm not talking about the stupid company you work for. Your career is worth more than you're being paid. The average occupational therapist in Texas makes $75,000 to $80,000 a year. I mean, I would love to know for which company. I left New York City for Abilene for a pay raise, and I still, I mean, my maximum has been like $65,000 to $70,000 on a high year.

Yeah, but that's what your whole family's making. What does your husband make? He makes a gross $30,000 a year. What does he do? He is an industrial rehab technician for a company here in town. They do drug screenings and physical fitness screenings. He has a bachelor's in exercise science. So, I mean, I bring in the bulk of our income.

Stop a second. The the thing is you guys are going to be maximizing your income you're going to stop doing any 401ks and you're going to stop paying any extra on your student loans right now when you have a baby on the way that's what we always suggest and you pile up cash as high as you can pile it and when baby comes and the adjustments are made to the house and everybody's okay and you're okay and everything's fine we settle into the rhythm of our life again then we push play again on our total money makeover at that point you don't start your 401k but you're going to have to attack this student loan debt and both of you are going to have to

really do a lot to maximize your careers long term and do anything you can short term to increase income. Because neither one of you are doing very well with your degrees. No, we're not. And that's what's frustrating. I don't know how else to make money doing what I went to school to do. It's a great career. Well, all I'm saying is that you've got some work to do in that area.

I don't know that we solve it in this thing here. Now, I don't know that a baby costs $1,000 a month unless daycare does. Daycare is $600 a month. We've already got a spot for her, and that's the average here in this city. Okay. All right. Well, then you probably are going to spend that because you're going to have doctor's visits and certainly going to have formula and diapers and other stuff.

So that's fine. And what are you paying for housing? because you're going to have doctor's visits and certainly going to have formula and diapers and other stuff. So that's fine. And what are you paying for housing? $700 on our mortgage. Okay. Then you can do this. You can do this. The student loans, it may take a while, but as your income goes up, you just don't increase lifestyle,

and you start applying that to the student loans and begin to clean the student loans up long term. But it's going to be a while before you start applying that to the student loans and begin to clean the student loans up long term. But it's going to be a while before you start investing again. You've got a mess on your hands. But you don't need to panic. The panic in your voice needs to leave. You're okay. You make plenty of money to eat and feed a baby.

The baby's going to be fine and pay your rent and that kind of stuff. The only question is how are you going to move your future along? And your future involves getting rid of the student loan debt, and your future involves getting back into the 401K and that kind of stuff. And you're not going to move that along as fast as you want to until you're able to both of you get more income created out of your degree fields, and you should be but is that does that have to be fixed today no it doesn't have to be fixed does that be fixed for you to bring a

baby into the world no calm down you're okay you make enough to pay your rent eat take care of the baby and do you make enough to do that and pay off ten thousand dollars a month towards student loans no you don't but you're going to be okay so just just begin to prioritize it out and i would stop paying extra on anything and just pile up cash when baby comes if you've got an extra pile of cash then we restart we start attacking the student loans again we restart the careers we relook and what can we do there what extra can we work what can we do here what can we cut there And then you just keep attacking. You get back in attack mode on the student loan at that point.

But the problem, the thing that's giving you stress is you got like six things on your plate in front of you, two of which you don't need to worry about today. And the others you can do. So as soon as you do that, then all of a sudden your pulse rate is going to go down and you're going to be fine. You're in better shape than you feel like you are because you're panicking really about things that are future-oriented, and that can be addressed with shifts in your horse career over time. But, wow. Hey, thanks for the call.

We appreciate you joining us. Open phones at 888-825-5225. I want you, Dave Ramsey Show listeners, to hear the nuance in that call. Okay. That's a sweet lady, a smart lady with a master's degree, stressed out, first baby's on the way, new marriage. Did you hear her say she had $165,000 in student loan debt? Did you hear her say her parents didn't know? So one of the things we tell folks all the time, and I get a lot of pushback,

a lot of you get angry with me, is I say we don't have a student loan crisis as much as we have a parenting crisis. There's no possible way one of my college-age kids is going to be in school running up $165,000 in student loan debt, and I don't know. Because I'm going to know where they're going to school, and I'm going to know what the resources are to pay for it, and I can do sixth-grade math and see that this child is getting ready to make a dadgum mess of her life. And I'm going to pull the plug on this crap. Because she went to a school that was ludicrous.

To pay that much to get that degree is just crazy. It's crazy land. Now, she's there, and I'm not picking on her. But because, I mean, she's fighting through this stuff. I'm on her team. I'm helping her. You're helping her. You're praying for her that are listening I know that so we're not picking on

you know Natalie that's not the goal here that's not the point the point is some of you parents you need to put your arm around your kid and give them the word the word is no no you're not going to go $165,000 in debt to get a degree

at a private university that affords you the ability to make $70,000 or $80,000 a year. That's called stupid land. No. No, you're not going to do that. And you parents have got to get in the middle of their lives and help them guide because their 18-year-old brains don't work. I'm sorry if you're 18 and you don't like that. But your brain doesn't work. I'm sorry if you're 18 and you don't like that. But your brain doesn't work like your parents' brain works.

Because 18-year-old brains make decisions like that. This is the Dave Ramsey Show. Did you know that if you combine the data breaches that have occurred in the past 12 months, almost every American has had their personal info compromised or hacked. Over 50% of our listeners and viewers tell us that they or someone in their family has been a victim. And 70% of those folks have had it happen more than once. See, this is unbelievable. Once thieves get your info, the risk never goes away, and they can use it whenever and however they choose. It truly has become an issue of not if, but when.

That's why the only plan I've ever recommended is through Zander Insurance. I actually sat down with them, and we put together a plan that I felt provided the best protection, but didn't waste dollars on things you could easily do yourself or were just gimmicks. The key is getting protected before you're a victim and it's too late. Go to zander.com or call 800-356-4282. We are all at risk and it doesn't make sense to wait. Numbers don't lie. That's zander.com or 800-356-4282. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225.

Morgan and Megan are with us in Nova Scotia. Hi, guys. How are you? Hi, Dave. Better than we deserve. Awesome. I see on my screen you're debt-free. Congratulations.

Thank you. Very cool. How much have you guys paid off? We've paid off $308,200. Way to go. And how long did that take? 52 months. Good for you.

And your range of income during that time? Around $125,000. Very good. So what kind of debt was the $308,000? We paid off our host, Dave. Yay! Talking to weird people. Very cool. We really are. So what made you decide to do that 52 months ago? We had paid cash for a lot, and then we got house fever and started to build

our house before our house had sold. And so we were living in our house, and we had two mortgage payments back to back, day by day. So I panicked, and I went to the library really quick and got every financial book I could find. And your Total Money Makeover stuck with me and your daily podcast. Oh, very cool. So, wow. So then you got after it and decided to pay it off, huh? Very hardcore.

Yeah. Now, you had two houses, right? We had two houses, and we sold the other one finally five months ago. Wow. So we took the equity from that and put it towards the $308,000. Wow. We did have some renters, though. Okay.

But you got it clear. You used it to make a big step forward on knocking this out then. Absolutely. Yeah. Very cool. How much of that equity, how much was equity of the $308,000? How much did the other property bring in equity? We got $71,000 from selling the other house.

Okay, very cool. Good for you guys. How old are you guys? I'm turning 40 soon. I'm 39. All right. And you have a paid-for house. We do.

Life is good. Way to go. Life is really good. Sofor house. I do. Life is good. Way to go. Life is really good. So you went from stress to peace over this four-year period of time, basically. That's right. And now we're learning how to spend money again. You forgot how. I forgot how i forgot how it's been four months and i'm slowly getting around to uh

accepting that i can go to the store and buy whatever i want i hear you well you definitely can what do you tell people the key to getting out of debt is uh well we we came up with uh we call them the four c's coupons content, contentment, consistent, and commitment. I like it. Those are good. And not necessarily in that order. No. I'm quite the couponer and frugal, and I stockpile anything I can get my hands on.

So through that, we've saved a lot of money and been able to accumulate. I bet you have. Well, congratulations, you guys. Very well done. I'm proud of you. Thank you. Was it worth it? How's it feel?

It was worth every moment. There were times when I would get on Facebook and see all the things that everybody was doing and have moments of jealousy, but then I would put my eye back on the big prize and realize that soon we'd be able to do whatever we wanted, and we got through it. Awesome. And here we are. Very cool. Well, we've got a copy of Chris Hogan's retire-inspired book we'll send out to you.

We want that to be the next chapter in your story, that you're millionaires and outrageously generous as you go along. And thanks for being a listener to the show. We appreciate it. Morgan and Megan from Nova Scotia, $308,000 paid off in 52 months, house and everything, making one and a quarter. Count it down. Let's hear a debt-free scream. Charlize and Natty are going to count it down for us. Three, two, one.

We're debt to play! Well done, you guys. That's as good as it gets right there. You heard that one all the way from Nova Scotia. Good stuff. Good stuff. You know, we're approaching our 600th radio station. We'll be making a formal announcement soon on the Dave Ramsey Show, making us the second largest talk radio show in America,

by number of stations anyway, and not necessarily by number of listeners. I think Sean still has more listeners than I do. So it'll be Rush and Sean and then Dave, and everything else is a distant, distant, distant third, or distant fourth, rather. But that podcast there, you know, that podcast is what got them. So you never know, right? If you want to find a radio station near you,

just click on DaveRamsey.com and click Find a Station. Jessica's with us in Phoenix. Hi, Jessica. How are you? Hi, Dave. I'm doing well. Thank you so much for taking my call, Jessica. How are you? Hi, Dave. I'm doing well. Thank you so much for taking my call. Sure. What's up? Well, I'm a little nervous because I feel like you are really

not going to be happy with me. I'm kind of scared, but I really need your advice. Okay. I grew up in a very strict household where my parents felt like I can't move out unless I'm married. So finally at 27 years old, I said, you know what, I have to leave. I have to grow, spread my wings, and learn for myself. So I moved to Phoenix. I'm staying with a family member. So everything was going really well. I found a really great church community, got a great paying job.

Everything seemed to go great. But unfortunately, I had a manager that she just seemed like she had a bone to pick with me all the time and constantly was belittling me. And I was in this corporate environment that I just really did not enjoy. And I, you know, one day, you know, after the stress, I said, you know what, I can't do this anymore. And I left. And I just started doing these odd jobs and delivering pizzas and, you know, Ubering. I'm trying the best that I can to survive. I am going to get an apartment soon. I have a bunch of places that I'm applying to. How can I help you today? So basically my question is the extra money that I have, do you feel, because I do understand that I will be able to pay my rent. It's really cheap

and pay my bills. But the extra money that I have should i save that up and because i i feel like i can't hold a job like i i just constantly go in and out of these jobs and i'm frustrated i heard you quit one because you had an abusive manager i didn't hear you can't keep a job when did the story change well i just feel like uh how many jobs how many main full-time career-based jobs have you had? Well, this was my second potentially salary good-paying job. In what period of time? In the past six months, but then before that I had just a bunch of retail jobs that weren't that great. And what happened to the other one?

They just let me go. I had surgery. And then while I was recovering, they just let me go. I think two jobs, one due to surgery and one due to bullying, is that's not I can't keep a job. Really? No, it's not. It's hard for me to, you know, because I constantly feel like I'm the common

denominator. There's two different situations. Okay. If both of them, you were incompetent, you'd be the common denominator. Both times you stole and they fired you, you'd be the common denominator. And so would the incompetence or the stealing. But your behavior, your competence has not caused either one of these other issues, if you told me correctly. Yeah. Yeah. So keep a pile of cash right now, but don't let these two experiences take your confidence away as to your personal value in the marketplace.

You just had two situations that sucked. Right. And they just happened to be back-to-back. But part of what, let me tell you what I heard, okay? And I might be wrong, but here's what I heard. Your mom and dad told you you couldn't make it, so you shouldn't leave home. And now you've been out to prove that. Right.

That's not true. What they told you is not true you're perfectly intelligent you're perfectly capable you can make it you can hold down a job you're going to be all right don't listen to that crap that's running around in your brain it's just not true you're fine you're going to do all right but hold some money until you get settled and get you settled into a good strong career job and enjoy the ride kiddo this is the day, Romans 12, 2, do not be conformed to this world, but be transformed by the renewal of your mind, that by testing you may discern what is the will of God,

what is good and acceptable and perfect. George Patton says, If everyone is thinking alike, then somebody isn't thinking. Boy, that's the truth. Robert's with us in Atlanta, Georgia. Hey, Robert, how are you? Doing well. I do appreciate your time and talent.

My son spoke with you a couple years back, and you helped him out a little bit with basically some recommendations to decide to do something, and he's gotten through school, gotten his BAs and BSs. Wow. Not fully employed yet, but he's working a pair of part-timers, and we're hoping for him. Cool. So, thank you.

My own question, a bit more complex perhaps. We were about five, six years ago, 70,000 in debt. We now are not. I owe about $8,100 on the house, and that's it. Everything else paid off. We normally get around $85,000 on my income with overtimes and everything, plus my wife's $42,000 in teacher income. But I'm going to give you a problem. This year we're getting about $142,000 in my income due to some extra contract jobs. Wonderful. What do I do with it?

Obviously, a boatload, as they say in the trade, is going to go to taxes. Perhaps we may even hit that AMP boom model. We are adding some more to charities. We are paying off. I'm going to couple extra house payments just because there was nothing else to pay off. I've got now right at $42,000 in various savings and checkings accounts at various places. Did you say you had $8,100 left on the house? Right.

Okay, I would pay the house off today. Yeah, we can't. Just write a check and pay it off today. Okay. And you're done with that. I won't give us an extra $1,000 a month. Exactly. We won't. Just write a check and pay it off today. Okay. And you're done with that. I won't give us an extra $1,000 a month to do what you have. Exactly. Now, then the second thing I want to do is I want you to do very careful tax planning

because a chunk of yours is, as you said, contract, which means there's no taxes withheld, and you really don't want to get behind the eight ball with the IRS or the KGB, I mean. Right? Yeah. And so get with your tax planner, and let's set aside, before you do anything else, let's set aside enough for taxes so you've withheld on yourself effectively in a separate tax savings account and make sure you're paying your quarterlies.

You're supposed to be doing quarterly estimates. I'm sure you know that. I'm salaried over time, but, yeah, I understand what you mean. Right. Okay. We definitely will owe more. I thought you said you had some contract labor on the side oh i'm sorry we had extra my usual hourly usually yearly income oh i see so you just got some extra work at work it wasn't contract labor okay anyway um

so yeah make sure your taxes are in line first. Then there's nothing left for you to do. You're at what we call Baby Step 7, and you max out everything at Baby Step 7 that you can. There's three things you do with money. You invest it, you have fun with it, and you give it. And you mentioned all of that. You said we're going to increase some of our charitable giving, and we're going to make sure – I'd make sure that all your 401ks and Roth IRAs and anything else available to you is completely maxed out in good growth stock mutual funds,

and then I'm going to be investing some above that in just open market funds, meaning they're not in a quote-unquote retirement fund. But I'm going to be doing that, and what I personally have done, Robert, is I maxed out all of the retirement that's available to me. And then above that, for investing purposes, I would throw money just in an S&P no-load mutual fund and just let it grow and keep throwing money in there until it got big enough. And then I pay cash for a piece of real estate that's income producing. Because I personally like real estate.

You may or may not want to do that. That's up to you. But that's what I've done. If you want to just stick with tons of mutual funds, that's okay too. Fine with me. But we're not going back into debt, completely debt-free. We're going to just build wealth, give, and enjoy. That's really all that's left to do because building wealth is not only for you,

it's for changing your family tree and for enjoying ensuring that future generations are generous as well as you being generous so every dollar that we take in above our needs for our budget at home every dollar i make above our needs has a percentage applied to it. 50% goes for taxes and tithe. I'm an evangelical Christian, so I tithe a tenth to my church. Then the other 50% is split among those three things, some to giving, some to investing, and some to lifestyle increase and enjoying things. And I don't have to put much of a percentage on that lifestyle increase

for it to get really sweet. And I get to buy some nice toys and do some nice things. And I don't have to put much of a percentage on that lifestyle increase for it to get really sweet. And I get to buy some nice toys and do some nice things. But it's a very small percentage of my overall world, but it just has worked out because I don't have any payments anywhere. It puts you in such a strong position. So you've done very, very well, Robert. Congratulations. That's how I would fine-tune it if I were in your shoes, sir.

Rachel's with us in Houston, Texas. Hi, Rachel. How are you? Hi, Dave. I'm doing great. Thank you for taking my call. Sure. What's up?

I just finished my graduate program, and I'm currently on a one-year postdoctoral fellowship, and I'm just trying to strategize for paying off my student loans. I entered graduate school with no debt, but I'm out of graduate school with $102,956 of debt. And how much does your fellowship pay? For this year, I'm making $47,771. And you finish that, you'll be doing what? I am studying for my licensure as a psychologist. Okay, but you're a Ph.D., right? Yes, so I completed my Ph.D.

So you're going to be a practicing psychologist or psychiatrist? Psychologist, yes. Psychologist. Okay. going to be a practicing psychologist or psychiatrist psychologist yes okay and so um you'll get a license and so forth and go through the process of practicing in texas correct okay all right um go ahead and so i have um so all of my debt is student loan debt and um i have no other debt. A little over $100,000 of that is Stanford loans, a combination of subsidized and unsubsidized. And then I have just under $2,000 of that is graduate plus loan, which is accruing at a 7.9% interest rate.

And I'm just wondering if I should just go ahead and pay that off by the end of this year and just kind of sacrifice. I have a goal of putting away about $10,000 by the time my fellowship is done by following a budget, a very tight one. And I'm just thinking maybe I can just go ahead and pay that graduate plus loan off by the end of this year and just kind of take that out of my goal for the 10K. That'd be fine. Is that your smallest one? That is my smallest one. Okay.

I want you to pay off the smallest one first and just begin to work your way through this process. So when you finish the fellowship, what's the purpose of the fellowship if you're going into practice? Well, it's usually just to accrue more hours to be eligible for licensing. Oh, okay, that makes sense. Okay, all right, because I couldn't figure out how it was going to make you more marketable. Okay, but that does make sense for licensing because you need, you got to have a certain number of hours in most states to get that. Okay, cool. So then you're going to open

your own practice or you're going to join a practice, or do you know? Well, I work at the VA, the Veterans Affairs Medical Center, and I want to kind of stay within that system because I enjoy working with the veteran population. And what will the pay be? The pay would range depending on where I would be in Texas, but it would be somewhere between $65,000 and just over $100,000. Okay, perfect. Well, just work that system then, and then what we're going to do is just have no life

and completely attack this $93,000 that's left on your debt at that point. And if you do that as a single person making $65,000 to $100,000, you ought to be done with that in three years or so. That's what it sounds to me like. But you're going to have no life during that three years because you've got to clean this mess up that you've made. And that's what we would recommend, focused intensity on your debts. That's the big deal.

That puts us out of the day. Dave Ramsey showing 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, it's Blake, Chief Production

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