The Ramsey Show - App - Do We Put Money Towards a Tax Bill or Investing in Property? (Hour 3)

Episode Date: May 24, 2021

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Anthony O'Neill, Ramsey Personality, is my co-host. Open phones here at 888-825-5225. That's 888-825-5225. You jump in, we'll talk about your life and your money. Samantha starts off this hour in dallas

texas hi samantha how are you i'm good thank y'all so much for taking my call sure um okay a quick summary um so my husband and i are paid off except for our house um our debt free um and we're currently saving a lot of money because for our next house, we want to buy land and build a house on it. Cool. But I also went to move some old 401k accounts into an IRA, and they told me it would be about $20,000 to convert it to a Roth. And so I'm wondering, is it better to put more money towards the land and next house, or is it better to pay the tax bill now and go ahead and convert that into a Roth account? We'll have the cash either way. Neither one is under the dumb column.

I mean, you're going to have tax-free growth on that Roth from this point forward. That would be awesomeness. And, of course, paying cash or almost paying cash for the land and the property going forward would be awesome as well. Either one is fine. Either one moves you ahead in your wealth building. Let me think which one I would do. What would you do?

I'm doing the land. You're doing the land? Yeah. Mr. Real Estate over here. Oh, yeah. I'm going after the land. Hmm. I don't like the irs that much they come second well i don't like them i'm trying to keep them away from it later that's the point so that's true what's your household income um our household income right now is probably

around 170 i eventually want to be a stay-at-home mom, though, so we're living off my husband's income. Yeah, I know, but right now you're making bank. Okay, so how much do you need for this land? The land, we're looking around $150. And how much do you have? And we've already got $60. I'm sorry?

$60. We already have $60. Okay, so you're $90 away. See, I think you're going to do both, but you don't have to do them. But the only question is the order. Do we do the Roth now and then the land and pay cash, do both, or do we do the land and then convert to a Roth? By then the account will have grown a little more and it will be more than 20,

but I still would convert it later. I'm probably with Anthony. I'm probably going to go ahead and save up and pay cash for the land but then i'm also going to convert you can convert this to a roth anytime you want right you don't have to do it on this transaction right so go ahead and move it to a traditional do your land deal but come back and flip it to a roth later when you're debt free okay perfect pay your cash pay your taxes at that time of course when you do that that that that i would do i like that's good i like that now how long do you think that would be dave it didn't sound like it's going to be two years yeah so then 20 000 is maybe what 22 maybe

yeah well you know it might be you know i don't know it depends on what the account grows to but here's the principle too that we can go back to. We tell people not to, let's say she was in baby step two. We would never do that. We always need to get out of debt first. And I wouldn't do it in place of baby step six. I would say finish getting your house paid off before you convert to a Roth and create extra tax money while you're doing that. And so this is kind of like that.

I see you now. And so that got me over to your side on doing the land first. I think your instincts were right on that. Thank you for admitting that, Dave. It means a lot. Very good. And I'm Dave Ramsey. You're Anthony O'Neill now.

Okay. We can switch. My stock just went up considerably. I'm way cooler than I was five minutes ago. You're cooler. I'm richer. Yes, sir. Wait a minute. That wasn't a good trade. Right. Pam're cooler. I'm richer. Yes, sir. Wait a minute.

That wasn't a good trade. Pam's in Akron, Ohio. Hey, Pam, welcome to the Ramsey Show. Hey, Dave and Anthony, thanks for taking my call. Sure. What's up? My husband and I are on baby step six, and he is 57 and currently eligible for retirement. He has a pension, and if he takes that pension as a lump sum,

it would be about $387,000. Currently, he has about $135,000 in his 401k, and our question is should he retire and receive the lump sum, and should we dip into our 401k to finish paying off our mortgage, or should he keep working until the mortgage is paid and then consider retirement? And what's his yearly income right now? Right now he makes about $45,000, and I make about $55,000. What do you owe on the house?

$77,000. Oh, man. Well, you understand he can't access either one of these until he's 59 and a half without penalties right yeah we were thinking under the rule of 55 he could access the 401k money yeah you probably get some r you probably get some rmd out of there but i don't think you can get it all um okay i don't know he might um well number one if you're going to retire yes you take the lump sum always and yes you roll it to an ira and you don't pay taxes on it when you do that okay that's number one move um our concern i guess too about retiring um in the lump. Is this like he's eligible right now?

And if something happens to him, like say before, you know, now in two years from now, when the house is paid or whatever, he keeps working, then if he passes away or something happens, then we lose that pension money. We would only get about a year's worth of salary as a benefit instead of the whole pension. Is he ill? No. He's in good health. Okay.

He just drives too fast. Okay. Yeah. He's a risky kind of guy. We hear him in the background. He is right. I am kind of on it. That's risky.

I'm just wondering why you didn't think he's gonna make it okay you just never know i guess yeah the other thing is this okay um i'm gonna read into this that this is not his dream job okay you're correct there okay he's factory job he's only 57 years old i'm 60 okay and i'm gonna work 20 more years just because i love what i do i'm gonna work till i won't let me talk anymore because i don't make sense so um that might be tomorrow but i'm hoping for 20 more years anyway. But the point is that he doesn't have to stop creating an income just because he retires. And we've thought about that. Yeah, what I would do is if you can pull the money without paying any penalties on it under 55 rule,

if you've already looked into that and you can confirm that with a financial advisor, with a tax person without me doing it on the radio, because that's not a good plan, then yeah, I'm going to quit either way. I'm going to roll it to an IRA either way. And if I can pull enough out without paying any penalties to pay off the house, I'm going to pay it off now. I'm going to pay it off later otherwise. And I'm going to take a bow.

And then they give you a standing ovation. And then you get what's called an encore career. And for the next 20 years, do something you love with your life and make twice as much as 45 while having fun. Doesn't mean you have to make nothing for the rest of your life. I love it. As we continue to face challenging times, I hear that a lot of you have been calling Zander Insurance to see if term life insurance plans are still available.

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Zander's team will get you the affordable coverage to give your family the peace of mind they deserve. Anthony O'Neill Ramsey personality is my co-host today. Open phones at 888-825-5225. If you're tired of feeling stuck with your money, like you'll never get out of debt or you'll never have enough saved for the future, it does not have to be this way. You can make progress with your money and you can make it faster than you think. The only way to make it happen is with a budget. And that's why you need a Ramsey Plus membership. You get access to the premium version of the world's best budgeting app, EveryDollar, and you'll plan out every dollar that you're going to spend

and save before the month begins. It connects to your bank so you never miss a transaction. You get customized budget reports to show you exactly where you can find more money. You can get into Financial Peace University and go through the whole class, plus a bunch of other classes and all kinds of groups that you can participate in and even online coaching as well. When you budget and you get intentional with your money, you will make progress fast. And you can start a Ramsey Plus membership today for free.

If you want to start the free trial of Ramsey plus text trial 233 789 text trial 233 789 our question of the day comes from blinds.com find out for yourself why blinds.com is the number one online retailer of custom window coverings you get free samples free shipping and with the new promos they run every month you'll save even more use the promo code ramsey to get the best possible deal so dave today's question comes from sean in missouri uh sean says i'm 21 years old and currently making 31 000 per year at my job i've been able to complete some college courses in the evenings but it's challenging to keep up with school while working full time. I have a plan that will allow me to work part time during school and graduate without loans.

Is moving is moving to a part time job worth the risk or should I keep my full time job and continue with college courses part time? Great question, Sean. And one of the key things that I personally teach our young people is to work part time while you're in college and part time, meaning anywhere between 20 and max 22 hours, maybe. And so, yes, I don't have a problem with you going down a part time. So you can focus on getting your education because I want you to do that. I do not want you to go down to working less than part time. The only time I am OK with full time work is if you're full time. It's not intervening with your education and or your full time going part time in school. But in this situation, which you're going full time, part time hours are good, especially if you can do that and still graduate 100 percent debt free.

Yeah, I mean, 12 hours a day, that's not bad. Yeah. That's part-time. That's half-day, right? Yeah, I mean, 12 to 20. Work half-day is 12 hours a day. Yeah. Well, wait.

No. I thought you meant like 12 hours a week. You know, come on, Dave. Dave, he's trying to confuse me, y'all. That's half-time. I mean, that's working half. No. You're not even working full-time.

It's just half. I mean, now you're talking about working 12 hours maybe on Saturday, and he doesn't have to work Monday through Friday. Okay. You know, come on, Dave. Come on, Dave. Don't do him like that. Listen, the deal is this, man.

What most people call work isn't real work. So stop whining and finish your degree debt- if you can do that part-time that's fine if you quit your full-time gig and your part-time isn't enough crank it up and take three part-times and call it full-time and get back after it whatever it takes to get that degree debt free that's what you're going to do yeah um and so you're not at risk as long as you're willing to work there we go and don't listen to Dave. Do not work 12 hours. That's part time, Anthony. No whining.

That's just a half a day. There's 24 hours. It's only a half day work. Just lightweight. You know, in the last segment, Dave, you said you're going to be here for 20 years unless you say something crazy. So I think unless I quit making sense, that does make sense. It's still just a half a day. I think you're down to one year, Dave.

I'm losing traction fast. Josh is in Atlanta. Hey, Josh, welcome to the Ramsey Show. Hey, guys. How y'all doing? Better than I deserve. What's up? Fair enough, fair enough.

So, little context. I'm a new listener and first-time homebuyer. And this market, as I'm sure you're aware, is just kicking my butt. The real estate market? Yeah, real estate. I'm buying a single-family home. It's wild, isn't it? Yeah, a little bit. So my question for you is, you know, I put a couple offers in, you know, got blown out of the water because everyone right now is thinking with their emotions.

So it's like, I got to have this house and, you know, they're going 20 over asking and I'm putting offers in for five over asking. I guess my question is, do I restructure my budget for a house? Because I've got a sizable down payment, you know, and luckily I make pretty decent money. How much do you have down and how much do you make? So I've got down about $50,000 to $60,000. Good. And I make around $100,000 base.

Good. How old are you? I turned 26 this week, actually. Good for you. You're single? Yep. Well, I'm going to, you know. Yeah, but you're not married. Okay, good.

No, I don't know. I wasn't asking about your dating life. I was just asking if you're married. Okay. So a single guy, 26, making 100 with 60 saved. Well done, sir. Very well done. No debt, Josh?

Nope. Paid for car and cash. Got one credit card just for 2% cash back that I pay off every month. No student loans? No, no, no. Okay. All right. So what you're calling about is down in your heart,

you have recognized that people have lost their freaking minds. And you're trying to not join the crazy parade. Please don't. Exactly right. Like I got a text from my real estate agent today. She was like, yeah, they're going with another offer. Yeah, and she's the drum major at the crazy parade. Yeah. Yeah, she's just trying

to keep all the stuff in order here well she wants you by a house and if you don't go crazy you're not gonna buy a house right now so here's the thing have you ever seen one of those movies or ever been to a live auction where they're auctioning off something oh yeah like the jabbering auctioneers yeah yeah and uh there's an old one with the old comedian jerry lewis and dean martin or something an auction and he kept scratching his nose and accidentally bidding and all this stuff you know i'm talking about but what happens at an auction is people get excited and in the exuberance and the emotion of the moment they overpay for stuff and that really does happen that's why it makes a great movie scene as well

that makes sense yeah totally that's why it makes a great movie scene as well. Does that make sense? Yeah, totally. That's what you're in the middle of. Yeah. So you need to emotionally steel yourself, put a buffer up in your emotions psychologically, called your intellect, that says, I am willing, regardless of how many crazy butt people are around me, to pay X for this house. If it goes for X plus 20 grand, that is God saying I'm not supposed to get this house.

Yeah, fair enough. I mean, it's every house that I put in. Hey, Josh, it's the market. But you know what? You think it's going to be every house that I put in. You know what I mean? Hey, Josh. It's the market. But you know what? You think it's going to be every house for a decade? No. You think it's going to be that way for two years?

No. It might be that way until Christmas. It might be next year before you buy a house. But don't get in the crazy parade. And, Josh, why are you interested in getting into a house? Yeah, really. There's nothing going on fire here. Yeah.

You're young, successful. You got some money. Yeah. I've been dying for my own space, you know. Well, go get an apartment. Go get what? Are you living at home? So, yeah, we're renting a home right now.

Okay. All right. So, rent a home. Big deal. Don't join the crazy parade. Don't do it, bro. Listen, if you can buy a house and you have done it in a way that you feel proud about how you did it instead of ashamed that you joined the crazy parade then buy a house i'm okay with that i'm okay putting in some bids but don't overpay i looked at a house the other day for fun there was a million dollars over the comps heck no the dude is smoking crack all he's doing is fishing for the king of the crazy parade i'm not in the crazy parade so i just kind of looked

at him and i went dude i'm gonna stand back over here and watch this this is spectator sport right this is not a game i want to get in so we'll stand back and watch and if some idiot wants to pay that for it that's fine but over over comps! No man, just calm your butt down. Take a cold shower. You got house fever. Just calm down. You're going to get a house. You're going to be wealthy.

If you don't join the crazy parade. But pay X no more. Anthony O'Neill Ramsey personality is my co-host today on the debt-free stage right here in the lobby of Ramsey Solutions. Michael and Amanda are with us. Hey guys, how are you? Great, how are you? Better than we deserve.

Where do you guys live? Raleigh, North Carolina. All right. And how much debt have you paid off? $128,000 or $128,712. Ah, okay. And how long did this take? Three years.

We were originally on a four-year trajectory and finished a year early. Jacked it up. Yes, sir. Cool. And your range of income during that 36 months? $144,000 down to $127,000. Cool. The miss here went from full-time to part-time. All right.

Love it. And what do you guys do for a living? I am a police officer and a retired captain in the North Carolina National Guard. Thank you for your service. Thank you. Oh, yeah. And I'm a registered nurse. All right.

And you work whenever you want, all you want. Absolutely. What hospital in Raleigh? I actually work at Wake Med. It's in Cary, North Carolina. Yeah, yeah. I know about Cary. Yeah, yeah. My father was in Fayetteville, Fort Bragg.

Familiar with Fort Bragg myself. I bet you are. Very cool. What kind of debt was this $129,000? It was everything. We were normal. It was mostly school loans, but car payments, credit cards, and 401K loans. Sally May took the bulk of it, though.

Yeah. Just trucking along normal. Yep. Two good careers, but loaded up with student loan debt, and then other stuff starts piling in there. How long have you all been married? Gosh, just since 2017. Oh, wow.

Three years, four years. Okay. Good. Yeah, funny story. As we were going to recon our wedding venue, we listened to your show the whole way up. It was about a four-hour trip from Raleigh to the mountains. So that's how it got started. And the first thing we did as a couple was financial peace, and then the rest was history.

Oh, wow. So dope. Well, only the military guy recons his wedding. Absolutely. Of course. Of course. So romantic. Yeah, he's just blossoming over there yeah that's great so you the trip though gets you turned on to it and then you dive into financial peace yes sir yeah we're kind of doing our own thing and then as soon as we were married then

we merged everything just like you suggest and then it was game on um we actually kind of uh had to hit pause a little bit about seven months in um we found what we were expecting yay so it was a happy you know a happy pause but we did have to kind of rein in in just a little bit for a while there yeah very good it's a good reason to pause baby comes and hit play and go again and there we go finish it up finish it up that's a lot 129 000 is a lot does that feel like when you started like you were never going to get through it? It absolutely did. And we just continued to listen to your show.

I have a 30-minute commute to my job, so that's what I did. As I was on my way in and on my way back, I'd listen to the segments. So it just helped keep me motivated. And I had the spreadsheets out and did all I could to keep us on track, and we did it. So I'm looking at the math here, and it seemed like y'all were very aggressive, especially being a newlywed, new parents. What would you say was one of the hardest things throughout those three years? Getting to the 129, I think every every time i looked at it it seemed uh

impossible but we for one um she was a good support system for me and vice versa and we had our monthly budget meetings and we kept each other on track and accountable and that that was key for us so just trying to you know saying no sometimes especially as a new parent you know in your ear the whole time you're hearing you know you have to do this you have to have this you have to whatever and it's and you don't it's okay or being newlyweds it's like well you know we didn't take a honeymoon we still haven't taken a honeymoon but it's like it'll come you know in time it'll be fine we don't have to do anything yeah and now you can go anywhere you want to go absolutely and uh how old are you two? I'm 44, almost 45. And I'm 42.

Okay. Okay. Young people. Very nice. Of course. Younger than Dave's. That's good. Very good.

Well, you'll be honeymooning the rest of your life. That's right. Very good. So this is impressive. Very well. I'm proud of you guys. Thank you. Who were your biggest cheerleaders?

I would have to say each other. Yeah. I was going to say, I really do. We did tell people along the way. I think we got a lot of crazy looks for it. A lot of people didn't quite understand, like, why don't you just keep on doing what you're doing? Make good money. You'll be fine.

It's okay. It's all going to work out. Exactly. And sure, maybe it would, maybe it wouldn't. But we just had to boost each other up and just keep each other on track primarily. So I think we were really each other's biggest support system. Yeah, I had a crew at work, too, that weren't crazy enough to go down the baby steps road, but they helped keep me motivated along the way. Even though they're not doing it, but they were always keeping up.

They were at least positive. Yeah, they were keeping up on what i was doing instead of making fun of you too bad yeah that's cool but now you're done so i mean no debt this is a how's it feel we finished up uh new year's we were done i guess december 31 and so we made the last payment and so to wake up on the first of the year and say this is it like. Like, it's a new year. Everything is a fresh start. It was amazing. That's cool. It's a great feeling.

Yeah. So what's next? I'm curious. Is honeymoon in the future or? Maybe once, our little guy is two, so maybe once he gets a little bit older. Okay. Okay. We might just save up and do something even bigger than we thought before.

Sure. Yeah. We haven't talked about it yet. We're halfway through baby step three, and then we're negotiating the rest of the steps, and then I think we'll get aggressive about a good, good honeymoon. That's good. Good for you guys.

Thank you. Very fun. So as you're going through the 129, how much of it was, Sally Mae? About $75,000. A little over half then. Two master's degrees in there. So at what point when you were going through there, did you kind of top the mountain and you go,

ah, we're going to make it? You know, that kind of that breakthrough emotional thing, like you go over and you go, yeah, we got this. I think for me, I think at the halfway point, it was just like because it's that upward, upward, upward climb. And then once we got this i think for me i think at the halfway point it was just like because it's that upward upward upward climb and then once we got to the halfway point i was like it's downhill from here so like 65 000 yeah and for me at least i mean certainly there were times that were tough after that where you were like this is never going to end but really and truly once you crested the hill and you were coming down the other side it was like you know like

the wheels came off it's's like, let's go. When we got through everything that wasn't student loans, it got real to me. I was like, all right, this is serious. Let's do it. And then I looked down. I was like, I'm running downhill now. Oh, wow. Okay.

But it's still $75,000 to go. Yeah. Which is a lot. But it's not about the math sometimes. It's just the way you're feeling about it. And you're going, you're feeling about it. And you're going, got it, got it. Wow, we're doing this. You know, there's that moment where you kind of break through.

This is really going to happen? This is not a theory. This is happening to me. Yeah, it's really. There's a thing that happens somewhere in there for everyone. And it did for Sharon and I, too. So way to go, you guys. So proud of you again.

We've got a copy of the Total Money Make makeover an extra copy for you to give away and that'll be a way to pay it forward and help somebody else get started on this and a copy of the legacy journey for you guys because that's the next step for you because you got a two-year-old we're legacy we're changing our family tree here absolutely got a real reason to do all of this very very cool so proud of y'all thank you well done well done thank you all right michael and amanda raleigh north carolina 129 000 paid off in three years making 144 to 127 count it down let's hear a debt-free scream three two. We're debt free! Yeah! We've been doing this a long time, and you know what?

The only thing I'm positive of, if you're listening to us right now, you can do this. Absolutely. $129,000, 28 in in debt paid off in three years if you don't get encouragement from that i don't know what else can give you encouragement but in every case it's someone who looked up and saw a mountain and said okay we need a path to the top of the mountain we need a path we need a way to get there we need the climbing gear we're going to learn how to do it we're going to you know and it's always gear. We're going to learn how to do it. We're going to, you know, and it's always, you know, we're going to listen to the podcast. We're going to get on the budget with every dollar.

We're going to go through Financial Peace University and Ramsey Plus. We're going to read Total Money Makeover. We're going to read Debt Free Degree and send our kids to school debt free. In every case, they got the toolbox. Yes, sir. And they filled up the tools. And they said, there's the mountain. And there's the path.

And here's the mount. And let's go do it. And it's not easy. No. But it's worth it. Yes, sir. And with the plan, it's easier. And it's there for everyone.

Yes, sir. You. I'm talking to you. Yeah, you. This is the Ramsey Show. MC show. Our scripture today, Matthew 634, do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own. Margaret Thatcher said,

you may have to fight a battle more than once to win it. Well, that's the truth. Some of these battles are just what are known as ongoing. Oh, well. This is what happens. Better a wounded warrior than to have never been in the battle. Open phones at 888-825-5225. You jump in.

We'll talk about your life and your money. Anthony O'Neill, Ramsey Personality, is my co-host today. Jake is in San Diegogo hi jake welcome to the ramsey show hi dave uh very excited to speak with you i am currently 24 years old and i just graduated from law school i have 130 000 in debt all of its student loans i am starting a job taking the bar in july and starting a job the first week of october that job is going to allow me to refinance through a bank at about two percent and then uh fixed and then on top of that i'm going to be making 190 000 plus bonus my question for you today is does it make sense while I'm in baby step two and aggressively

paying down the $130,000 to max my 401k and a health savings account? No, that's baby step four. Yeah. What did you make this year? This year, I didn't technically work, but the firm I'm going to be working for sent me about $40,000, and I had another job, so it's $46,000. So did you pay any of that on to the student loans? I paid tuition for my final year, and before I started listening to you, I actually funded a rock. Okay.

Okay. All right. So what my challenge would be would be to live like a college student. You know what? If I woke up in your shoes, I think you have landed an unbelievably awesome job. Absolutely. And you have an unbelievably awesome future ahead of you. Would you agree with that? Yes. awesome future ahead of you would you agree with that uh yes did i understand you correctly to say at 24 years old you're going to be making 190 000 next year uh yes okay and you owe 130 000

in student loan debt yes you know what i would do i would live on nothing, and I would be debt-free in one year. Absolutely. Okay. Can you stay home, Jake? I can't because of where my job is, so I'm going to have to pay rent and stuff. Where's the job? I'm working. It's going to be in New York City, and the hours are going to be very long. As in Manhattan? Yeah.

Okay. You are not going to be debt free in one year you're not yeah okay but you're going to be debt free in two years yeah okay yeah you're not you're not you're not gonna be able to buy housing and you're not gonna be able to pay for housing of any kind in new york city and do what i was talking about so you cannot live on uh absolutely nothing but just the same you've still landed a wonderful income. Yes. And congratulations.

You obviously were quite a star pupil in your law school because you got recruited by a big-time firm that's paying you big-time money. Way to go. I'm so proud of you. Yeah. Well done. But listen, don't fall into the trap of doing what a bunch of the goobs that got recruited with you will do. Don't do it. These goobs will be in debt for 10 years because it's two percent you don't want to pay out two percent

bullcrap son pay it off now fast okay fast attack it bro as fast as you can and jake this means you need to look for roommates in new york you you need to really i mean bro you are living as cheap and as low as possible they're going to work you 80 hours a week anyway you're not going to have time to do anything but work right yeah what i'm expecting yeah your first year out they're going to try to kill you that's your job yeah so yeah just just work all the time do nothing and pay debt and do that for a year and a half to two years you'll be free and all your compadres, all of your peers will still be struggling with $100,000 to $200,000 to $300,000 worth of student loan debt. And they'll all be walking around the halls with their lips stuck out and making a ton of money and have no money. And you, son, will be on your way if you'll do what I say to do.

Not many people will do this, but let me tell you, wealth is weird. Even in the hallways of big-time law firms in New York City, wealth is weird. There's a lot of people walking around with their chest stuck out, act like they've got something, and all they've got is payments. Don't be one of those. I want you to look and act like you are poor, because you are. You are deeply in debt. And clean this mess up as fast as you can.

Now, I don't know if you'll do it or not, but, man, if you don't, this conversation is going to haunt you later. Sure will. It sure will. And he could be free. So what a killer job. Man, he'll be. He's a stud. Yeah.

And he's a lawyer. I mean, and if he works it right, Dave, his income is going to go up. Yeah. And he'll be making a quarter million dollars with no debt. No debt. In his 20s. In no time. At 24 years old.

Man, what was I doing back then? Ding, ding, ding, ding. Well, it wasn't law school. It so was. Man, I'm so mad. If it had been, I wouldn't have been one of those. But anyway, I didn't qualify for that. But it's still very cool.

And the point is, mathematically, if you will lean into this, he has a future that's so bright. Susan's with us. Susan's in Memphis. Hi, Susan. How are you? Good. And yourself? Better than I deserve.

How can Anthony and I help? I have a question, kind of twofold. I have a daughter who came out of a four-year undergraduate program debt-free. We were able to get our gift to each four kids is four years debt-free. Now she's in a graduate program in a veterinarian school. And, you know, welcome to adulting. She took out loans to pay for school. So after four years of school, she will be in debt probably around $160,000 to $180,000.

So, you know, as a parent of grown children, I've been really kind of talking to her about, you know, do you want to just pay some interest off? Can you get in the habit of, even if it's $100 a month, just pay something off on it to get her to be disciplined toward that. She's asking me, Mom, do I need to open up a Roth IRA right now with the money I get from grandparents, from just the odd jobs that she's able to do? She's very industrious.

She's already gotten a job over the summer, but I think she's a little confused about what she needs to do first or second while she's living on loans and just studying, you know, 21 hours each semester. So do you guys have some steps for her? Well, Suzanne, here's the thing that I really want to challenge you on that you may not like. I think instead of her taking the money to have your daughter pay towards her loans, I want to kind of challenge you a little bit and suggest a different route, which is have her take that extra money and start paying it towards her school now.

OK, as far as this way, she can stop borrowing as much money. Now, you're right. It may not be a whole lot, but if she has an extra five hundred dollars, she needs to put that towards her school. Not into a Roth IRA, not into investments, not even into paying off. The key thing is I want her to stop borrowing as much money as possible. And then from there, once she graduates college, then we can have a conversation on how to start paying off debt. But I want her to stop building up the power. That's the conversation I will be having with your daughter at this present time. Now, as fast as she can, as much as she can limit the borrowing or down to no new borrowing and then the next step will be

to clear the debt and the roth iras are way after that she does not need to worry about investing right now she's broke yeah and getting broker yes yes she is and she's actually going down on her housing by moving in with somebody else by five hundred dollars a month so she is trying to lower her her monthly quote installments because she only gets a certain amount in which she's trying to borrow the least that she can yeah but you guys would not even if it's just a little bit of her getting a habit no okay the habit is don't borrow more exactly okay everyone wonderful thank you every one of those dollars is avoid going further into debt further into debt further into debt um because that's just the that's less of a mess to clean up when you get out.

Absolutely. And that's where, because the opposite is what usually happens is that people just go and borrow for everything. They buy a car. They rent an apartment with a skylight, a jacuzzi, and a racquetball court. And it's all on government-funded student loans. Yes. As if that were necessary for education. And she's not doing that.

That's what a lot of people do. Right. Good show, Anthony. Hey, thank you, Dave. Thank you, America. Good job, James Childson. Kelly Daniels in the booth. I am Dave Ramsey, your host.

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. Did you know you can listen to The Ramsey Show on your smart speaker? Just tell Alexa, Google Assistant, or Siri to play The Ramsey Show podcast. Check out all Ramsey Network shows on your smart speaker today.