The Ramsey Show - App - Credit Card Marketing is Insidious (Hour 1)

Episode Date: October 19, 2022

George Kamel & Ken Coleman discuss: Settling with a credit card company, Why credit card marketing is so insidious, Should I pay off a "same as cash" debt before Baby Step 1? How to best utilize an HSA. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, joined this hour by bestselling author of the book From Paycheck to Purpose, Mr. Ken Coleman. And we are taking your calls this hour at 888-825-5225. And this is the show all about breakthrough, all about hope. And so if you need that in any area of your life, especially money and career, we are your guys today. Yeah. So when we say career, that's that's a big broad statement so let's break it down into work-related questions maybe you got a toxic boss or leader and you're feeling miserable burned out but you're in the baby steps you feel like i i have no choices i can't i can't move on

yes you can we'll help you through some of those type of work-related questions hey ken i want to get a promotion i want to make more money is it possible? I'm in an okay job, but I'm not sure what I'd love to do. So those are some contexts that are real that we handle on The Ken Coleman Show, and we'll take on those today. And they all have money components. Oh, yeah. And George and I love being together. We are, a listener labeled us as the root beer of the Ramsey Show. I just got a message about that. It makes one listener giggle every time they hear it. They love it. Oh, so there you go. So we're here to please just an audience of one today.

That's right. And we've done that. So now we're ready, I think, for phone calls, George. Well, you jump in. We'll talk about your life, your money, your work. 888-825-5225. Christine kicks us off in Dallas, Texas. Christine, welcome to the show.

Thanks for having me. Yeah, what's going on? So I'm on babysit number two, and my question is, my largest debt has a judgment against me, and they recently sent me another letter saying that they're looking for post-judgment discovery requests, and I have 30 days to produce, about six days away from that. And I guess my biggest question is, while I have other smaller debts that I was trying to tackle, what is your advice for navigating the settlement when the debt is so high? What's the details of this? How big is the debt, and how much money do you have, and what's been the latest communication? Okay, So I have, I owe $22,000 roughly. And when I called them, they told me they would take $18,000.

They asked me how much money I had saved and I do have $5,000. And they told me I could put that down and then be on a payment plan for 12 months to pay off the rest to get it to $18,000. Okay. And so that would add up to $18,000 over the following after you give them the $1,000? Yes. No, after I give them the $5,000. Oh, you have $5,000? Yes, I have $5,000. That included my emergency $1,000.

Okay. So that means that you now owe them $13,000, or that was the remaining amount that had to be paid off in 12 months? Yes. Okay. Okay. And you're six days away. How much have you paid? Oh, I'm sorry.

I'm six days away from just having to turn in all of the discovery requests where they ask for all your bank statements and all the different things. They want to make sure you're not sitting on $50,000. I'm sorry. Okay. Okay. Yeah. Okay.

So your question is how do you navigate this while in Baby Step 2? You have other debts to deal with? Yeah, I have another one that I was just speaking with as well. That one is $9,600. They told me they would take $2,800, which is roughly about 30% of what I owe. So now I'm kind of stuck because they don't have a judgment against me, but it is in collection. So I was just trying to tackle all my small ones, but then the biggest one comes at me with the judgment. Yeah, I would tackle all of the debts that are in collections, all the ones you're behind on, and tackle those first because those are going to be the ankle biters holding you back. And if you can make minimum payments on the rest of your debts that you're current on, are you able to do that?

Yes. Okay. So are these the only two that you're current on, are you able to do that? Yes. Okay. So let's, are these the only two that are in collections or are there more? Right. These are the only two that are in collections. I'm buying everywhere else. I have one car payment. That's about it. Okay. So let's, you're on the payment plan for the largest debt. You're going to settle with the next one. I'm not on a payment plan yet. That's, I guess what I was going to ask you, because they want to put me on one, but everything I've read says to try to do the lump sum, but I know I can't pay $18,000 off. Have you talked to them about doing a lump sum later on? I did, and they still said $18,000.

Which is a break from the $25,000 that you owe them. Right. But they're not going to wait 12 months to get the $18,000 is what you're saying. Well, I was trying to see where I could get the 18, is what you're saying? Well, I was trying to see where I could get with a lump sum, and they said I'm accruing interest every day of $3.11 every day since the judgment. They said they would waive that fee. They would waive those fees and take 18. Okay.

And are you needing to give them access to your account for this, or can you write them a cashier's check or money order every month? They said I could make a payment each month, and if I miss one payment, then it goes all the way back to what I owe. What's the language of the judgment, George? I'm a little naive on this particular. When you say judgment, does that mean a judge is involved? No, they sent me something and they said, you know, that they were, they went to the

county where I live and they did file a lawsuit. I was actually having a baby when the hearing was, but I did respond. I responded and I said, this is the first I've heard of this, you know, going to court. Can you please give me some more information? Because I wanted to make sure it was legit. And all of a sudden, all I got was a letter from the county that said, here's the date of your hearing. And I wasn't able to physically go. I was in the hospital. And then I got a letter that said that they were granted this judgment on me. And then I didn't hear from them at all until towards the end of September. I got this that said that they're looking for more information so that they can see how much money I have. And they do say at the end that they would like to resolve this matter amicably to contact them.

And so that's when I did call the law firm. Nothing sounds amicable like you just got sued in court. Let's do this amicably. Yeah. Yeah. Well, I mean, if the county has the judgment against you, we now have to deal with that situation. And so I would put that on the top of your list of things to deal with, followed by the settlement. And let the other collector know, hey, listen, I'm dealing with this right now. As soon as I'm done, my next goal is to settle with you for that 30% amount. Here's when I'm going to be able to do that. And so as long as you're in very clear, constant communication,

we're going to get rid of the collections monkeys off your back, and then we're going to focus on the rest of your debts. How many other debts do you have? What's the total amount? I have just not much. I have one credit card that I keep open and I pay off every month. Let's cut that up today. Can we please cut that up today, Christine?

Yeah. It's a rubber crutch. And it's part of the reason we're in this hole is because we thought, well, the credit card companies, they're going to be my savior. They're going to be my emergency fund. And as we're realizing, debt is not a friend. It's not a tool. And so I think as a moment where you go, I'm going to draw a line in the sand, never again, I've had it,

we're going to cut up this card today, and it's not going to become, well, I'm going to keep it open and pay it off. Just cut it up, be done with it, and use your debit card. Do you have one of those? Yeah, I do. Okay, great. What's your income? I'm actually just got a new job, and it's $127,000. Heck yes.

Nice. Let's go, Christine. So how quickly are we going to clean up this mess? How many months? Yeah. How many months am I going to take to clean up the mess? Yeah, to get rid of debt completely. I would say about a year.

There we go. A year from now, you're going to be looking back on this, Christine, going, that was the moment when collectors were calling me. I'm in the hospital while getting sued. Debt is not my friend. I'm going to become the bank. Never again is someone going to tell me how I'm going to live my life. We are rooting for you, Christine. Wishing you the best on this debt-free journey. Give us a call, 888-825-5225. This is The Ramsey Show. One of the most common pieces of advice I give folks trying to get out of debt is to sell the car. And I get it. That's easier said than done. Selling a car takes a lot of time and hassle unless you use CarWiser.

CarWiser is a free service that gets you the best offers instantly from dealers around the country. And it couldn't be simpler. Just enter your vehicle's information and boom, you've got offers to choose from. So go to CarWiser.com slash Ramsey. That's carwiser.com slash Ramsey. Welcome back to the Ramsey Show. It's your show. Give us a call.

888-825-5225. You jump in. We'll talk about your life, your money, your work, all of it. I'm George Campbell, joined by Ken Coleman this hour. And we just took a heart-wrenching call. Yep. Woman who's got a judgment against her for a bunch of credit card debt and still has got the card open, trying to pay it off every month.

And it just got me thinking again. There's a lot of slick marketing out there from the credit card companies and a lot of ads as we watch YouTube videos and so I saw this one from Credit Karma. So we wanted to play it for you and get your live reaction, Ken. He's never seen this. Never seen it before.

Let's roll this Credit Karma ad. Alright, here we go. What are you doing? I'm applying for a credit card on Credit Karma. They have this thing called the Karma Guarantee. It's sort of like a card fairy. Wow. If you apply for a credit card that has the Karma Guarantee and you don't get approved, the card fairy will slip 50 bucks under your pillow.

Is he coming tonight? Nope. Just got approved. The card fairy will just have to rummage around in someone else's fridge. Get approved or get 50 bucks on offers with the Karma Guarantee. Ah, how heartwarming. Wow, it's so precious. We have the little angelic voice.

What you doing, Dad? The creepy wizard man. And so the whole thing is like someone's going to come save you, you know? And I love the idea that if you don't get approved for one of these credit card offers, because that would mean you're in such bad financial shape, even credit card companies are going, nope. Yeah. Then Credit Karma will give you 50 bucks. Right.

Put it under your pillow. Yeah. That's the thing that was sickening. And I got to tell you, the other thing that it does, the thing that really bothers me is they're playing to kids. Kids are in the room while mom and dad are watching TV. And what's really insidious about this is, and I mean insidious, is that they're, they're normalizing credit and credit cards to little kids who don't even have the foggiest idea what it really means.

That's what's really, and I'm telling you, I can see it right now, that there are marketing agencies that do all this stuff for these companies. They're sitting there going, okay, we have a couple things we want to accomplish here, right? And don't think for a second that the credit karma executive said hey try to make it this and let's kind of i mean they are pounding this into very intentional it's very intentional to create normalcy remember folks marketing is all about removing your objections to anything right it's why like we're sitting there watching sports the other night my boys watching football is all about removing your objections to anything, right? It's why, like, we're sitting there watching sports the other night

with my boys, watching a football game. Commercials come on, and first thing, it's one of these pharmaceutical companies. Same tactics. Do you have dry mouth, sore neck, and itchy feet? I'm going, well, I got two of the three. What's wrong with me? Two out of three ain't bad.

There's nothing wrong with me. But it's like it's a normalizing of activity, a normalizing of symptoms, normalizing drugs, normalizing debt. I got to tell you, folks, these people are very talented. And it's a game. And you are in the matrix. And until you wake up, you're going to be susceptible for this. I got to tell you, shame on that. That is so ridiculous. It drives me nuts. And here's how this works, Ken, because Credit Karma is partnering with all of these credit card companies. And so they're offering up Discover

and American Express and all of these different offerings, and they get kickbacks if you sign up. And so they must be making buku bucks if they're just throwing out $50 bills for anyone that gets denied. Not to mention the ad development and the ad buy. Now let's just go to where we are real time. All right, George? Let's go to reality, Ken. In my hands right here, a CBS News article.

Here's where we stand and why Credit Karma is thriving. The average credit card rate in the U.S. is now more than 22%. It's the highest since 2019. This is according to LendingTree data. For people who carry a balance, the average rate is 18.4%, according to the Federal Reserve. And so with inflation, you know, tightening people's everyday activities, instead of reducing expenses, increasing responsibility, responsibility more discipline what do people do well inflation's more than my pay raise so i gotta use a credit card you sound just like them ken

that was an amazing impression well now that's actually the inner character what was that disney movie that it was like a thing it had all these little emotions and they became like characters that's what that that's what that emotion inside inside out thank you from james on top of it because he's got the littles at home he knows uh but that's that same sniveling victim type personality i think that's what they sound like yeah is that inner voice the headline of this article is inflation slammed americans are piling on credit card debt it goes on to say searing inflation is driving americans to make more purchases on their credit cards leading them to amass more debt that is becoming costlier as the fed hikes interest rates all right so you

know what the number is george hit me 887 billion dollars in credit card taking my breath away can that's up 13 from a year ago%. We're heading up to a trillion. Well, we hear about the student loan crisis, and the number you hear is 1.7 trillion, which means we are halfway there in credit card debt alone. Nearly six in 10 Americans who earn less than $50,000 a year carry a credit card balance from month to month. But Ken, everyone I talk to says, I pay it off every month, Ken. What's wrong with hanging on to my credit card i'll tell you it's a very good question george you have no margin all right so you start looking at i was looking at some data today uh i was talking about i was reacting to a viral tiktok video on the ken coleman show and where a tiktoker went out there and said

look if you make 25 an hour or less you ought to be terrified as if life is over. Okay. Now I want people to make more than $25 an hour. In fact, I commit my entire professional life to, you can make way more than that. Here's how I want you to make more. However, it was so doom and gloom. So I looked into the numbers. He had this spreadsheet basically showing that a person who makes 25 an hour can barely make ends meet in today's America. Well, what's on the spreadsheet? A bunch of debt? The car payments.

And he had $400 as the average car payment. You and I both know it's actually $667 for new cars. It's $519 for used cars. I looked it up today. And I also looked up that the median income right now in America per week is just over $1,000 a week. So what happens is you do have a lot of people who are really squeezed. But they're squeezed not just from income, but they're really squeezed by expenses. Because all of a sudden, if you take out that 500 600 700 car payment by the way that's the average we saw a tiktok recently i think james showed it to us where people were

like gleefully bragging on these tiktoks i have a car payment of 1200 oh yeah do you remember they all work for car dealerships they work for car dealerships and it's like it's mind-numbing george well and it goes back to this whole thing that we've normalized all of this through marketing. It's all around you.

Everyone you know has payments. That's right. It's in every commercial. Well, it starts with this little girl. Hey, Daddy, I'm going to have

a $1,000 car payment one day. And it's just insanity. It's like the Pied Piper leading people off the cliff. I mean, what are we doing here? Well, it does start with the parents. Do you want more voices, George?

All of them, Ken. You could do a one-man show at this point on Broadway. All right. So here's what this turns into. You mentioned it, Ken, but yes, you can make more income, and income can be an issue, but we have villainized every company for not paying us enough. All the while,

we're throwing thousands of dollars a month to lenders. We're not doing a good job with what they are paying us. The answer is not pay me more and I'm all for you making more. The answer is, what are we doing with what we have? Yes. And the truth is, when you look down, you go, oh, it's all going to lenders who are building really big buildings and sponsoring every stadium in North America today. Isn't that the truth? So how about we leave our own legacy and put our own names on some buildings and get out of debt once and for all? These credit card companies are not your friend.

Debt is not a tool. And the truth is credit cards have become the cigarette of the financial world. We all used to think it was cool, and now we know too much. And here we are in $887 billion of credit card debt going, I don't understand how we got here. I thought the credit card companies were my friend.

I go on free vacations, Ken. Yeah. I get my points. Yeah. I'm beating the system. No. No, because life happens and you don't have an emergency fund and you're not hitting your financial goals. And so what do we do?

We turn to the credit cards to be our savior. And then they transform, Ken, before our eyes into a devil instead of the angel. You know, I got to tell you, for all of the wokeism and all of the people outraged by the bad people of society, it's high time the American people, the average person, whether you're conservative, progressive, liberal, or whatever, wake up and go, the actual bad guys are the credit card companies. It's predatory lending is what it is. Take that. American Express, if you're listening, you've been outed.

Discover, if you're listening. Capital One, what's in your wallet? Money. That's what I want to be in your wallet, not a freaking Capital One card. This is The Ramsey Show. I'm Ramsey personality George Campbell, joined by my colleague Ken Coleman this hour. Open phones at 888-825-5225. Felicia joins us up next in Grand Rapids, Michigan.

Felicia, welcome to the show. Hi, George and Ken. Thanks for taking my call. Absolutely. How can we help? Yeah, I have two really quick questions. The first is we have, we just started Financial Peace University. We just finished lesson three. Awesome. So we're on baby step one and we're halfway through that. And I realized that we have an upcoming debt credit card bill that was same as cash because my dog had emergency surgery a couple months ago. And that due date is coming up soon in about four weeks. So we were wondering, should we go ahead and pay that so we don't get

the interest or should we just continue funding our emergency fund and then put that into our snowball? Well, how much do you have in the bank right now? Just the $500 for our emergency fund. Okay. How quickly can you get the other $500? Probably a week or two. Okay. And then what is the debt, the same as cash credit card debt? How much? Uh, it is, uh, 1200. Okay. And it's due in four weeks. So the question is, can we scrape together that kind of money in four weeks? Can you guys do side jobs,

side hustle, sell stuff? Um, I think so. There's only one answer here, and it's yes, we will do whatever it takes to get out of this, because what's going to happen, and you know this now, because you read the fine print after the fact, that same as cash is not the same as cash, because the interest will be triggered, and it's going to be retroactive to the beginning. So have you done the calculation on that? I have not. No, I actually tried to call them and wasn't able to get through. That's convenient. They'll happily give you the money instantly, but to get in touch with them, it's a nightmare. So my guess is this is a very, very high interest, even higher than your normal

credit card, probably in the high 20s, maybe even 30s, that will be triggered retroactively. So I would do everything in my power to clean up this debt. What's your other debts that you have? Well, that goes into my next question. We have quite a bit of home things that we had to do, student loans and two cars. And my other question was about the cars. One of the cars we are upside down on, and I've been listening for about a month now to you guys, so I didn't know if we should sell that, but then I don't have the $5,000 to cover the difference. Yeah, so either you'd have to come up with the difference and then sell it to cover the loan, or the other option is getting a small loan from a credit union to cover the difference

and then attacking that smaller one. I don't love the second option, but it's the only time I would say it's okay to go into debt is to clean up a mess like this when you're underwater on the car. Are you underwater on the other car? No. Okay, what's that one worth? I think it's worth about $17, and we owe about $17 on it. Okay.

I might consider selling that car today and do private party and do your research with Carvana. You can try Carwiser. You can try Vroom and see how much money you can get for that car. Because if you can get $18 for that car that car, and you owe $17,000, well, now we can clean up this emergency vet debt. Okay. And so I would do some drastic things to get out of this mess.

What's the total debt you're in? Oh, gosh. It's over $180,000, including my student loan. And that doesn't touch a mortgage? No. Oh, man. What's the biggest debt out of the $180,000? The biggest debt is student loans.

Okay. And then you said you did some house stuff. Are you saying, like, you did a HELOC? What did you do to finance the repairs? Yes. HELOC? What'd you do to finance the repairs? No. Yes, we had, we moved into a house and it had water in the basement, which became a whole big issue. And we did not know that it had that issue in the basement. So we had to get the whole basement fixed. Was it not disclosed? It was, I guess it was. I mean mean how did an inspector not catch that i don't i don't know

because the bathroom tiles actually caved in and we thought it was just a little water in the bathroom but we started pulling up the floor well felicia what is your household income i hope it's really high it's not as high as i want to be. My husband and I combined make about $114,000. Okay, great. Can you put every penny from the next few paychecks towards baby step one and two and clean up this same as cash loan and start these baby steps? Yes. Yeah, I want to jump in. We have the EveryDollar i've i've done the beta thing to tell me when to put money where so i am up for any suggestions all right so then i'm going to jump in on that one and make a couple suggestions so earlier in the call george asked you are you

willing to work extra hours take on a second job you know whatever, whatever. And you were like, I think so. And I'm going to have a second job. Good. But your husband needs to get a second job. And then you need to sell stuff. He works overtime. Then he needs to sell stuff. I think we need to do.

All right. My point is, I want you to take off the limitations and stop thinking, well, I'm doing this. I'm doing this. And I want to go, how much more can I do? It's for a short season. I understand what I'm suggesting is, I'm doing this, and I want to go, how much more can I do? It's for a short season. I understand what I'm suggesting is not in any way fun, but I would tell you that what I'm suggesting is doable. And I'm telling you to put the fire out.

We do everything possible. When the house is on fire, we don't go, well, I'm already 30 minutes into my Netflix show. No, it's like, put the fire out. It's like, let's go.. You know, it's like, let's go. And I think that you need that urgency. I understand you're tired. I understand you guys are already doing a lot, but we got ourselves into this. We can get ourselves out, but it is going to take extreme measures. Okay. We're talking urgency. And I don't sense that in you. And I'm not beating up on you. I'm just trying to challenge you to say you can do more.

Sell everything. Get a fourth job for a season. I don't care. I mean, just so people don't think I'm doing rah-rah stuff. Okay? If I'm the husband, and I'm going to speak to a dude here. If I'm your husband, and I'm going to speak to a dude here, if I'm your husband, I'm going, all right, how many nights a week could I do an overnight shift at Walmart making $22 an hour? Just for a short term. How many nights could I do that? You stack that up times 10 nights,

15 nights in a month. Are you going to be exhausted? Yeah, but you could get out of this situation pretty quick. Am I right, George? Yeah. Are you guys doing any investing right now? No, we stopped investing. Good. Are you eating out right now? No. Do you get tax refunds every year?

We do. Okay. I would look at changing my tax withholdings, and I would get in touch with a tax pro, because that means the government's hanging on to your money. And right now you need that money. And so I want you to have a $0 tax bill and make sure that you're maximizing every dollar you have coming in. Beyond that, keep doing that budget. When you see any bank transaction comes in that you go, we don't need to be paying for that. Let's cut that subscription. No, that's too much. Let's not do that. Find any way you can get really creative work as hard as you can. You guys have the income to do this. It's just a decision of are we going to go all in or not? Yes. And me and Ken are more

fired up than you are at this point, I think. I'm ready to tackle some debt. I'm fired up. It's just my husband. He's like, oh, but aren't you exhausted? Aren't you this? I'm actually more fired up than he is. Well, play this back to him. I just got him on board. Well, you know what? I just spoke to him a few seconds ago. Rewind it for him. Get on the YouTube playback. Rewind the tape. And I'm speaking to him right now.

Come on, dude. Man up right now. I will. And he watched FPU as well? He went through lessons one, two, and three? He did. Okay. Let's check.

Make sure he has a pulse on him because I'm worried about this guy. Does he understand the fire that you guys are in right now? The mess that you're in? The interest rates that are about to kick in? Honestly, I want to say no. I think I understand it more because I do all of the budgeting. Oh my goodness. Felicia, you've watched FPU. That's not how this works. This is a team effort. He needs to have input. He needs to have buy-in. You're not going to do anything for him. That's why he's so comfortable because you're taking on the stress and weight of all this debt. He doesn't even know how broke he is.

Show him on paper. Show him. Tell him. I'm stressed. We are not okay. I am angry. I'm frustrated. I'm anxious.

I can't live like this anymore. I need you to care as much as I do. Oh, man. Ken, I'm fired up. We need more men to step up like this anymore. I need you to care as much as I do. Oh, man. Ken, I'm fired up. We need more men to step up in this country and be the husbands that we need in America today. This is bad news bears. Yeah, I agree. This is The Ramsey Show. Every time you hear someone do their debt-free scream on the show,

it's because at some point they said, I've had it. I'm not living like this anymore. And when you get mad like that and do what they did, your life will change too. And right now, inflation and your stupid credit cards are killing you. You've been led to believe that you are not in control of your money. But that's wrong. You have to decide what you can control, and that's you,

your behavior, your money. You have the power to change your future, and Financial Peace University will show you how. This is the course that will teach you the proven step-by-step plan that's helped nearly 10 million people beat debt, master budgeting, and build wealth. And you can do this. Guys, stop letting debt and money stress control your life. All you need to do is start with three magic words, I've had it, and take back your control. You can start Financial Peace University right now at ramsaysolutions.com slash FPU. That's ramsaysolutions.com slash FPU. Open phones this hour at 888-825-5225. I'm George Campbell, joined by Ken Coleman this hour. Diane joins us up next in Hartford, Connecticut. Diane, welcome to The Ramsey Show.

Hi, guys. Thanks for taking my call. Happy to take it. So I'm in Baby Steps 5 and 6, and I have a question regarding my flexible spending account through work. I have a $1,500 deductible, which I have used up for the year. And I do have the 10% saved for the rest of my bills for this year. I'm wondering if I should still keep contributing a little bit out of my paycheck each week, or if I have the $1,500 in a lump sum, which I'll have in a week, should I set that aside and use that?

Now, you said a flexible spending account. Are you saying that versus an HSA? Are you sure it's an FSA? It's an HSA. Okay. Okay. They're different. So I want to make sure I get my ducks in a row. Flexible spending accounts, that money would run out at the end of the year, whereas an HSA. Okay. Okay. They're different, so I want to make sure I get my ducks in a row here. Flexible spending accounts, that money would run out at the end of the year, whereas an HSA, that money would roll over year to year. Oh, yeah. It'll roll. Sorry. Okay.

Great. Just wanted to make sure. So right now, you have no money in there? I have like $20 right now. Okay. And you're thinking, hey, I'm going to need this money, and I want to throw this $1,500 into the HSA. Correct. And then stop taking out of my paycheck each week.

Oh, okay. So you're just splitting the difference and say, do I do a lump sum now or do I let it roll in with each future paycheck? I mean, where you're at in baby steps five and six, it's fine. If you want to throw that lump sum in there, me and my wife, we get an employer match in our HSA. And so at the beginning of the year, we just throw a pile of money into there. Me and my wife, we get an employer match in our HSA. And so at the beginning of the year, we just throw a pile of money into there, we get the match, and we go, great, that kickstarted our year off. And so I see this as the same type of thing where we're throwing that in to cover the deductible, which will protect you later on if there is some kind of health emergency or you have big bills, you'll be able to cover that. Okay. And I have a follow-up

question on step five. So I need to save 10,000 total for both of my girls to go to college because they're going to discount. And I have three more years until they'll use that money. So I've been aiming to save 3,000 a year, which I have a little over 3,000 for 22. Should I continue to get that 10,000 saved and then throw it all at the house, or should I stick to the 3,000 a year and put my extra stuff towards the house payment? So you're saying, should I put all my focus in five currently? Yes.

Are you putting this in a savings account? Where's this money going? It's going in a savings account because talking um, talking to my Edward Jones advisor, um, at 529 at this point, she didn't think was the best plan. Sure. Because of the short time horizon, they're going to need this money pretty fast. Yeah. I would put it as in a high yield savings account at least. Uh, probably not. No. I would move it to an online high yield savings account because right now the interest rates keep bumping up. And so you can get, you know% in there instead of about zero in a normal bank savings account.

So it'll help that money grow at least over three years as you continue to throw some in there. But I would continue – if you've got kind of a – looking at it like a sinking fund in a budget where you say, all right, I'm putting this much every month into the college account, it's not going to – I'm not going to lose money because it's going to continue to grow safely in that savings account. And after three years, I know I'm going to have $10,000. And are you sure it's going to be $10,000 for college three years from now? At today's prices, it will be $10,000. It goes up about 3% a year. So I will adjust it according to each year. Okay. And hopefully three years from now, you make more money, you're in a better place financially than even you were today, and you're able to cash flow anything remaining. Correct. That's the goal.

So I would do that. I wouldn't focus all your energy into that 10K for college right now. Just keep at it. You've got this thing down, you've got the plan, and I like it. You're doing great. I sure do. Thank you very much. I appreciate it. Way to go. Imagine, this is like 1950s pricing, Ken. $10,000 for college. I know. There are a lot of people going, I'd like the name of that college, please. Well, it sounds like she's employed there. No, they have a discount.

Yeah, yeah, yeah, yeah. That's a great benefit, by the way. By the way, that ought to be what it costs. Yes. It's a lot more reasonable. You want to get me fired up, and then we don't have time for that in this segment. But man, the skyrocketing cost of tuition. Well, it is great. There's a lady out in the lobby that wants me to go after it she's not maybe we'll work the ran in later i'll

talk to james it'll fire you up if you look at the soaring cost of tuition and what it has done uh to our students and our parents and family it's it's an absolute racket oh yeah well we just uh it's a great segue ken we just aired just aired Borrowed Future on demand for free on YouTube for the very first time. And so if you want to get riled up like Ken is right now, you can go check that out. It's a 90-minute documentary, and it's been available to rent on our website and many platforms. But right now it's totally free for the future. So go watch it with your kids this weekend. Spark that conversation, and they're all going to go, I don't want to go 200 grand into debt. No, thank you. I got to throw this in here

very quick for people who haven't heard me say it before, but for you parents that are in this situation, kids going to be coming into that age soon about college, there's a two-part question that you've got to employ. Is a degree the only way for your kid to do what they want to do? The second question is, is the degree the best way? If the answer is not yes to either one of those things, slow your roll, swallow your pride, get over the fact that maybe your kid is going to go a different path and it's going to be okay. College degree has become so much about status and an extended summer camp. And I'm willing to say it. It makes a lot of people uncomfortable, but I don't care because it's the truth. Now, if it's the only way and if it's the best way, we've got the resources here to help you do it but boy

oh boy i mean this is a marketing message that has just sucked us it's just like the i was ranting about this early about pharmaceuticals and credit cards it's a marketing message you know to where parents i mean we've down we've looked down our nose at the trades in our society. We elevate white collar work and we poo-poo blue collar work as if it's a less than life. And I know so many blue collar men and women that are wealthy and multimillionaires. Not only that, they're employing people, creating jobs, the heartbeat of our economy. And yet we've accepted this, me included. Now, I've long since spit it out of my mouth, but we've allowed ourselves to walk into this message that,

well, kid needs to go to college or else they're going to be a loser. And you know how many losers are rocking college campuses right now? Well, look at them. They're on the path to losing. They graduate with a degree, and then they can't get a job, and they're angry. They call my show. They call my show at 38. Well, I fell into it.

Well, how was college? Man, it was great, man. I partied my face off. Why don't you just go to Europe at that point for a year and have a great time? Because most parents, they grow up there, Ken. It's a social experience. You know a year and have a great time because that most parents there you go they grow up there Ken it's a social experience you know what that's a great point if the parenting message is well I think it's a time to come of age well here's an idea take a gap year that they got to pay for themselves and let them go drink their face off in Europe if that's what you're

all about parents go eat pray love and eat some linguine in Italy and call it a day it's way cheaper than college sadly there you go yeah live in a day. It's way cheaper than college, sadly. So there you go. Yeah, live in a hostel. Yeah, that's great. Golly. But it's true. I mean, a lot of these folks with degrees, they're going, Ken, I'm making $15 an hour.

How do I make more? While the guy who went to trade school, who's a plumber and electrician, they're making $50, $60, $70, $80 an hour. Yeah. With no four-year degree. So you tell me who's winning. And guess who's more useful? the plumber and the electrician,

because I need those guys to come because I'm not touching the wire, Ken. I've said it before. I'll say it again. I live in Tennessee. If my air conditioning unit goes out in the middle of July, the dude that shows up at my house is more important to my wife than I'll ever be. That's a hero right there. Come on.

That's a good word. Good hour, Ken. My thanks to all the folks in the booth, Austin, James, Ben, Andrew, Zach, you name it, and, of course, you, America. We appreciate you listening in. We'll be back real soon with more of The Ramsey Show. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral?

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