The Ramsey Show - App - Don't Do This With Your 401(k) (Hour 3)

Episode Date: February 2, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warshaw, joined by your other host for the day, Rachel Cruz, taking your calls all afternoon long. Your life, your money, we want to hear about it. The number is 888-825-5225, and we will get into it. So, you know, come ready, because we're going to give you our thoughts and our advice on it. All right, so let's go to the phone lines where there's Vanessa in Dallas, Texas, waiting.

What's going on, Vanessa? Hi, ladies. Thank you so much for your time today. No problem. Absolutely. I'm so glad it's the two of you because I really, really want your opinion. I just got engaged two weeks ago. Congratulations. Thank you so much. We don't have a date yet. We both rent separately. We're both completely out of debt. No secret credit cards, nothing like that. Nice. And I was just curious, what should we prioritize first? I'm really, I'm one of those soon to be brides where I care more about getting into a home rather than a very large, expensive wedding. And I just, I feel like I'm suffering from paralysis of the analysis and

I don't really know where to go from here. Okay. Good question. Oh my gosh. So for you guys, the wedding, is it, um, is it you guys paying for it? You and your fiance? Yes. Just us. Okay. And how much do you guys make a year? Um, we both make 65 respect respectively. So altogether one 30, one 30. Okay.'t combined any finances yet yes oh you're you're good this is like i swear we're doing this right i know i love it um okay do you guys have money saved what would be the money saved to that if you were to combine savings not like you're going to but if you were what would that be at this point we both have a fully funded six month emergency fund and that is it like we we paid off all of our debt saved up baby step three all of that and then he popped the question so we're really like we're

basically starting from um like baby step three b slash wedding fund yes so you both have a six month emergency fund separately correct awesome okay so how much how much is in how much is in yours how much is in his mine is since we make the same amount of money um like it's right in the neighborhood of about twenty thousand dollars each of you has okay correct uh okay that's great yep and i would i would leave that alone yeah um i would keep that as is and um okay what is his take is he more is he more on the house side or is he at all have any i don't know i feel like dudes don't really care about the wedding as much usually stereotypically yeah i would think so he's kind of torn as well because um he was raised catholic so his his his family's um approach to everything is like try to get married in the church, which I know is around like $10,000 to $15,000.

But if it, I mean, at the end of the day, we're both sort of like, what if we just went down to the courthouse and could be done with it then? When you said that, like, are you saying that the church is more expensive than like another venue? Because I always feel like the church route is less expensive than like a ballroom right so the church comes with a lot of like prerequisites that you have to go through like marriage counseling which is wonderful um and like things like that um i think it just sort of as like all encapsulated is about 10 to 15 thousand dollars like we would be able to do it probably for that much money okay but you guys don't want to do that necessarily not necessarily okay and you don't have to yeah I mean I I would lean on what you guys want and it sounds like Vanessa unless I'm mistaken that you both lean to like

hey let's I mean it's I mean you could do a lope you could go a step up from a lope get the license go have a great party. Yeah, like an engagement party. Yeah, have a great reception at some date, you know, later in the future. But it sounds like your priority is because of how, I mean, I can tell how focused you guys are, is really looking towards the future and looking at like, hey, what's going to last us longer? And saving more for a down payment on a home is quote unquote technically a better financial investment I won't necessarily say emotionally and all the things but like I do think whatever you choose you have to make it a memory like you

have to yes do something that makes it like special like if you say okay we're just going to go down to the courthouse right now in your life you're really um focusing on the financial thing but there might be a point later on where you see something or something sparks a dress i wish i had done a couple of things yes um there is part of that that i think that she should include or you know that you should include vanessa even though even if you choose to go like the do the least route, right? Like still have a beautiful dress, still do something that's going to create a memory in your mind where later on you will look back and not feel like you missed out because

you still did something. And it is interesting because these types of situations and you could probably put vacation in this realm that I'm talking about or other things. It is so personality driven I had a cousin and they went to Washington literally went to the top of a mountain had a pastor do it and they were done that's cool like that's all because that was like their thing and they're like that's all we want we don't need a bunch of people around we're good uh you know and then you know for me I'm like I love I love a good party and I love dressing I love all the things so I'm like I would tend to

lean which I did I I enjoyed my wedding and I loved it um you know but all that to say your personality and what you guys want and what you guys value is going to drive this and so maybe Vanessa would be a fun exercise to write down maybe three things for you in the wedding category that you would genuinely love to to have and maybe that's you know maybe that's the dress or maybe that's a really good idea yeah and just the idea of like what three things are important to you what three things are important to me and like see what we meet in the middle and you guys may yeah be be very similar in it and we i mean we've talked to some people on the show they do it so inexpensively yeah have a great

time and then they they write off in the sunset and and you know do it and then we know some people too that are like no this is an important day for us we really want to take the most of it and we're going to save put more money here and we'll worry about the house in two to three years you know so yeah i don't think there's a right or wrong honestly i think going into debt yeah or making decisions like that i think are will put you guys back but i really think there's a right or wrong, honestly. I think going into debt or making decisions like that, I think will put you guys back. But I really think that it's a lean into what you guys both want, not what everyone else around you is saying.

So true. And listen, there's two, like thinking towards the future, there's two ways to think of this. Number one, Rachel, I think in some ways I'm like you, which I like a good party probably not to the extent because I love my wedding like I have great memories of my wedding it's not something I think of all the time and so I do like to you know when people call in I do like to call out like listen it is one day and you're not going to think about it all the time that's right and the flip

side of that is Sam and I are big on like renewing of vows. So it's like, if you don't do everything you want to do the first go round, listen, in 10 years, renew your vows. It'll give you something to work towards. My husband and I did a vow renewal at 10 years, and we're going to do another one at 20 years. And each one will be nicer and better. Come on. Listen. So just understand like like there's you have room to go up and that's a great point yeah that's a great point i love it i like that conversation yeah congratulations vanessa i feel like you guys are making the right decision i'm not worried about you guys you're pretty pretty strange the straight line when it comes to the money 100 do you

remember there was a netflix show was like, the people had the opportunity to choose between, I think it was $10,000 or $30,000 on a house or a wedding. It was a great concept. And that's basically what that call was. But do remember, your wedding is one day, your marriage is a lifetime. So do the marriage counseling beforehand, do it in a year, all the things like it is it is one day that's right don't get too caught up in it this is the ramsey show all right you're listening to the ramsey show i'm jade warshaw this is rachel cruz host of the show on youtube if you happen to be on there also smart money happy hour is a great one um listen rachel this kind of came up uh several

months back i saw an article where they were just talking about more and more people drawing from their 401ks and from like their actual retirement um to cover month-to-month expenses and of course we've all seen in the news like the extremes where people pull from their 401k to go see beyonce or to go see Taylor Swift. Right, right, right. But they're, and don't do that. That's terrible. But there's a lot of folks out there who are kind of facing that paycheck to paycheck cycle. They're feeling the stress and the strain of their money and they don't know where else to go. And they're thinking, is it better, you know,

I don't want to put this on a credit card or I don't want to take out more debt. Here's money. That's my money. Maybe I should take out from this money and I can, you know, I don't want to put this on a credit card or I don't want to take out more debt. Here's money. That's my money. Yeah. Maybe I should take out from this money and I can, you know, make my situation better. Matter of fact, the guy called the show the other day. He had just had his taxes done and the fee for the taxes was three hundred dollars, but his return was only one hundred dollars. And he was like, oh, crap. Like I thought I was going to be able to take some of the money from my return. And he's thinking, like, maybe I'll just go to my four. Matter of fact, the tax guy, not one of our trusted pros, but the tax guy that he was working with told him, hey, why don't you go to your 401k and take out a loan?

So people are just tossing this around as an option. Like, it's just nothing here. And I need people to understand that if you withdraw from your retirement, you're going to have to pay a 10% penalty on that money that you take out and by the way if you happen to draw from your 401k if you lose your job that money becomes due in like almost immediately and you've got a year to pay it back before you start facing more fees and penalties so this is more serious than what people really are drawing into it um it says uh i'll get to that part in a minute but what i want people to i read an article that said the average withdrawal rachel is about five thousand dollars like people aren't looking

to get thirty thousand dollars it's not tens of thousands no on average it's five it's five thousand dollars and do you know what i figured out rachel that if you took a less than average car payment that you that's basically the five thousand dollars like if you went a year without your car payment you'd have the five thousand dollars for sure or you did a side hustle for fifteen hundred dollars a month yes you could get it yep so i kind of um want to have some empathy for the fact that people feel like they're faced against a wall, right? That there's no other thing. But what I want you to see is, listen, start looking around because there's other options and avenues for you to get out of this. Well, and in that case, it's such a, we see this all the time. If you're in a crisis or you feel like you have no options,

it feels like this is the only choice. This is the only I have so even if it's three thousand five thousand dollars I'm gonna I'm gonna do that and it's such a short-sighted view versus pausing letting the chaos settle right and actually formulating a plan and when you actually start looking at other options so it is that that quick kind of grab of like oh my gosh I gotta just yeah yeah just, yeah. Yeah. Have it. It's, it's tough. And some people are like, listen, I'm having a hardship and there are, you know, there are hardship withdrawals. A hardship means that it allows you to take money out of your 401k to meet an immediate and heavy financial need. That's what the IRS says, immediate and heavy financial. And so many of us would look, could look at that and go, listen, I needed those Beyonce tickets.

Whereas others will look at it and go, okay i've been without my you know i've been without a job for x amount of months or you know what we're saying is this could include something like a natural disaster right repairs from a natural disaster covering funeral expenses for a loved one um or paying rent to avoid being evicted. Like those are really, really serious situations. You're only allowed to take out the exact amount that you need for those expenses. And remember, you'd still have to pay taxes on it. So there's really no way around

some of the financial strings that are attached to this, even if it was a hardship withdrawal. And again, we're seeing that these are on the rise. Unfortunately, more and more people are lying about their situation rachel to qualify to get it which is for odd that's fraud yeah yeah that's illegal yeah yeah we don't want to do that so um what we just want you to take away from this is a don't lie about your situation and don't commit fraud but b understand that there's always options um there's always a way that is better than probably what you're scared and anxiety-filled sleepless brain is coming up with in the moment right that's right because when we're panicked

we're like okay what can i do what can i do and your brain just fixates on one thing that usually feels like the easiest answer that feels like the answer with the least amount of friction but a lot of times it's not the best answer. Like it might be what we talked about, you picking up a side hustle in the midst of an already very busy schedule, you selling a car and having to coordinate with your spouse a one car situation when you've had two cars your entire marriage. Like no one is sitting here and saying that that wouldn't be difficult or very hard to pull off or require tons of coordination. But it's bigger and better than borrowing from your future, because what happens is when we pull from our retirement, it does draw a line in the sand of, OK, this is something that I have the option to do.

Yeah. And once you start that, it's it's it's kind of like you've said, this is this is available to me. And then the next time a hard situation comes, that's an option that you know you did in the past. And so it really is about building the right behavior over time, Rachel, for me. Totally, because it fixes, like you said, the issue in the moments. But man, it takes away from so much growth that could be happening.

So do you make the sacrifice on the short term? That's why we tell people not to take money out of your retirement, 401k or Roth or IRAs to pay off debt, because this is something that you can do on your own without that money. Because again, you lose so much, so much growth when you do that. So if you want to know more about this,

we do have a really cool article. By the way, we have tons of articles on Ramsey solutions.com, but we've've got one here that's called Why You Shouldn't Withdraw From Your Retirement to Pay Off Debt. There's a nice ring to it. There you go. But it's at ramseysolutions.com and the link is there in the show notes. So take a look at that. It's just, listen, knowledge is power. The more you know with the little rainbow at the end. So with that, let's go to the phone lines. We've got Caden in Boise, Idaho. What's going on, Caden? Hey there. How's your guys' day going? Great. How about you? Terrific. So I got myself

into a little bit of a pickle. I'm 22 years old. I make about $80,000. I made $80 eighty thousand last year. I'm planning on making a hundred thousand this year. Nice. And I am roughly two hundred and eighty thousand dollars in debt. That includes a house, a car, a motorcycle and other miscellaneous like credit cards and stuff. How much is the house of that debt? House is $225,000. Okay. And go ahead and just tell me the rest of them as well, the car. Car is $4,000. Motorcycle is $12,000.

And then credit card is another $4,000. And then I have a $4,000 home improvement loan for an electrical situation that had happened. And that's four as well. Listen, I think you do have some debt here that I think that you'll be able to clean up relatively quickly. I think because you're grouping it in with the house, it feels even more overwhelming. And that might be because is your home payment too high for your income? What's your home payment? Home payment is, I have a first and a second mortgage. I went through FHA, so the down payment assistance. First mortgage payment is $1,750. Second is $100. Okay. So you're paying $1,8 1850 and what's your take-home pay?

Um, uh, roughly, uh, I, I work hourly plus commission. So it varies, but, uh, anywhere from four to like seven. Okay. So I think on most months you're fine with this mortgage. Um, I, I, if I were you, I mean, the way we teach is the mortgage is completely separate from the rest of the debt. And I think if for right now, while you're in baby step two, which is paying off all of your consumer debt, except your mortgage, I think that'll break it down into like more manageable bite-sized pieces. Do you have any money saved, Caden? I do not. Okay. Yeah, so if I were you, I would probably sell the motorcycle.

I would look to say, okay, then that takes a good chunk off. Then we got $12,000 left between the other, the $4,000 car, $4,000 credit card, and $4,000 on the electrical issue. And I would just work to pay that down, Kaden. I mean, I would work extra. I would do what you can. I mean, you're 22. If you get all this stuff cleaned up, it's amazing what can happen when you don't have all this debt. And I would cut up the credit cards and I would really start living a life to say, okay, I'm someone that doesn't use debt. You pay it off, you save up an emergency fund and Caden at 25 is going to be pretty dang in a great situation. You are listening to The Ramsey Show and thank you for listening to The Ramsey Show.

I'm Jade Warshaw. Join me, join next to me is Rachel Cruz and we're taking your calls for the rest of the hour. So you can give us a call. The number is 888-825-5225. I mentioned it before and I'll mention it again. We are doing a really cool live event coming up May 10th and 11th here on our campus here in Nashville, Tennessee. It's the Total Money Makeover weekend. So it's over the course of a couple of days. You come up here on our campus and we are going to walk through,

really what it's about is, it's based on the book, The Total Money Makeover. So that's the baby steps. And so basically everything you hear us talking about on the radio, if you want that deep dive, if you wanna be around like-minded people, you wanna just get into it, get that deeper level, be motivated, this is the event for you.

All the personalities are gonna be there. If you've been to a live event before, this is not going to be like the one you've been to. This is completely different. So if you want to get those early bird tickets, they're $99 and they're only going to be here for a limited time. So you can get those at ramseysolutions.com slash events and we'll see you there without further ado. All right, let's go to Rachel, who's in Spokane, Washington, the city I was born in. What's going on, Rachel? It's a pretty all right city, I'll say that.

It's great. Hey. What can we do? Thanks for taking my call. I would love some advice. It's sort of financial related, kind of not my finances, but I am 32 years old and I'm an independent parent, which means like I chose to become a parent by myself after, you know, I was

25, 26, 27, couldn't find anyone. We never aligned with like finances or like financial ideology or having children. So three years ago, I decided to have a child on my own. I love my daughter. She is the best. Oh my goodness. Um, I, so I feel like I really child on my own. I love my daughter. She is the best. Oh, my goodness. Good for you. I feel like I really made some good decisions. And she's a little older now. She's four now. And, you know, a lot of friends and family are always asking me, like, you should start dating soon.

Like, why aren't you going on dates? Like, why are you not doing this? And a really big reason. So I'm 32. I don't have any debt. I don't have any credit card debt. I paid off all my loans, credit card debt, car, all that when I was 26. really big reason. So I'm 32. I don't have any debt. I don't have any credit card debt. I paid off all my loans, credit card debt, car, all that when I was 26.

I was 26. And a huge reason is kind of a feeling of, you know, there's the obvious, you know, not just like letting anyone around my daughter, not just like in a, you know, I don't want to, there's that reason. But the reason I'm calling is that my friend set me up on a date with one of her work friends or something. Um, her husband's work friend. And we were just chatting. He's like, well, how do you do it? How do you like single parent? It must be so hard. And I was like, Oh, well, like I don't live with debt. I like my job. Like, it's not really that hard. Like like it's it's hard if you are like if I'm like very financially stable and he um he was like oh I have like I'm like 450,000 in debt and like all

these things and started just kind of naming him this is my first date with this person and I was like oh I know a lot about you um and what we say not to do on a first date I know well at least now you know. Yeah. And I was like, maybe this is my fault because I was just casually just trying to like keep it lighthearted. Like, oh, I don't live with that. But like me, it's been so long since I've lived with that. But I was like, maybe this, maybe people just love talking about this. And then I was talking to my friend. She's like, oh, like how to go. It's like, you know, I don't really think this is like for me. And when I was explaining, like, it's not just about introducing someone to my daughter's life. It's also about introducing that whatever.

Like, sure. Yeah. I'm not going to date without the intention of marriage. And sure. And I don't know how to explain. And I don't even know if it's wrong to like not give somebody a chance. Well, they're so we're on totally different pages. And you get to set your non-negotiables. pages and you get to set your non-negotiables listen you get to set your non-negotiables you get to have that list of

here are the things that I really at this point in my life want to align on and you get to say what that is and you also get to reevaluate that with time like listen you could come up with a list of five things and if you find out that after 10 years, no one is meeting up to your expectations, you get to decide, well, maybe I am being a little too, like maybe, is there anything that I can change? Or is there anything that I'm being a little too judgmental on? And having, listen, you guys talked about this really early in the relationship. Had you have, had you have dated for four months and fallen in love and then him sprung on the the five the five hundred thousand dollars of debt or however

much it was listen you might have married him anyway like i did but but um yeah so i think i think rachel i think you have to you know i would go into it and i wouldn't i wouldn't um put this you know thing out there that if if do have debts, it's an absolute no. And I'm not saying you're saying that. But what's important is the value system, right? So if they came to you and was like, oh, my gosh, I still have $100,000 of student loan debt and I hate it. I don't want to, you know, I feel this burden. I'm trying to pay it off.

Like that's somebody that you're like, okay, I can get on the same team. We are running in the same direction. And I think the same would be We are running in the same direction. And I think the same would be true for a spiritual aspect, how you want to raise kids. In-laws and family, these are big topics in life. And when you marry somebody, those topics collide. And you're not always going to be the same person. You're not going to marry the clone of you, right? So you're going to probably always have a different take, a different spin on these things. But the overall direction is what you're not going to marry the same, the clone of you, right? So you're going to probably always have a different take,

a different spin on these things. But the overall direction is what you're looking for. So yeah, I don't think, I wouldn't find someone really attractive if he's like, I got $450,000 in debt and I'm about to go buy another property and keep leveraging myself. I'm like, that's great for you,

but that's just not attractive to me. Like I can't, you know, and I would say the same thing, lines like that in a spiritual sense or with kids like, right. There's things that you're just like, we just won't be aligned in life. So I don't think you're being too picky. I would, I would say, you know, if you, if you called and said, yeah, just because he has that, I won't date him.

Yeah, that's no, I wouldn't say that that's, yeah, I would not go down that route, but especially if they've been like, and I want to get out of it. Right. So it's all about where they're going and what the values are going forward. But, and I think everyone has kind of that one subject in life that they're really passionate about with the other person, right? And so naturally yours might be money, Rachel, not from a shallow perspective, but something that you really cherish your convictions and you really want to partner in this. And I think that's big.

The thing to consider, especially with the debt aspect of this is, let's just say, you know, you've gone on four or five dates and it comes up at Applebee's and you start talking about it. Remember, there's still time, like you're not getting married tomorrow. So if this guy has $60,000 of debt, there's time for him to pay that off before you get married. Like, does that make sense? Like, if you're really feeling some type of way of like, man, I really sacrificed to pay off my debt.

I don't know if I have the stomach to go through another $60,000. Just think about the fact that there's still a timeline. Like, you're not getting married tomorrow. And you'll be able to see if this person really does show and prove what their values are because are they actively trying to get out of debt it has have has eight months passed and they've paid off nothing you know i'm saying like you're you're gonna see that come out in the wash so i i wouldn't get too too hung up on it um within you know the first few days or even the first few months necessarily if you're on the fence does that make sense that makes sense yeah i think

that something was just like a bit of a flag he was like oh i have all this money like but the government's gonna cancel student debt so that's fine oh no red flag no no no i feel like that for me so maybe i should have added that and i was like okay there's one thing to like know you're at least i mean some people don't even know how much money they're in debt but i felt really bad No, I feel like that for me. So maybe I should have added that. And I was like, okay, there's one thing to like know you're, at least, I mean, some people don't even know how much money they're in debt. But I felt really bad. I was like, I felt really shallow. And I know that it's one thing to ask for someone to not be in debt.

But this is great advice. Thank you. No, I just, I just walked away. I was like, I have no idea how I feel about this. Yeah. And I think it's, I think, I think give yourself some grace too because $450,000, even if he's trying to get out, that is a, it's kind of a, you know,

especially if it doesn't include a mortgage, that's a breathtaking number. So I think that's fair that you're like, oh gosh, you know, like that is a lot of debt. And so, no, I don't think you're being too judgmental. I wouldn't count someone out just because they have debt. It's all about the value system and where they're going moving forward.

And could you see yourself with them in the future, right? If they're walking that. But that's separate. And Rachel, you're a very, I mean, to do what you've done, even with a child, you know, like, was she 30 years old? Yeah, independent. That is a beautiful, beautiful thing. And you've made choices in life that are very mature

and you've taken on a lot of responsibility in life. And so I do think your husband has a high bar and I don't think that's a bad thing. Hey, in the chat, I would love when people get a chance to put their thoughts on this in the chat, like what your non-negotiable is. Oh, like dating.

Yeah, and we can talk about it at some point because listen, after paying off the debt that we paid off if god forbid something happened to sam warshaw and i had to get out there in this in these streets if somebody came at me i don't know if i could do it again oh it was even like 30k would be like no so everybody's got their limits that's fair jade i'd be interested to know what you guys think about this. Throw it in the chats and maybe one day we'll talk about it. This is The Ramsey Show. You are listening to The Ramsey Show, our scripture and quote of the day.

My favorite, whoever picked this knows me. Galatians 5.1. It's for freedom that crisis set us free stand firm then and do not let yourselves be burdened again by the same yoke of slavery one version says don't be entangled again by the same yoke of bondage oh love it in other words when you get out of debt don't go back in just putting putting that out there. Okay. And then Janice Joplin says, you are what you settle for. Oh. Booyah.

There you go. Love it. That's good stuff. All right. Let's go straight to the phone lines. The number is 888-825-5225 if you ever want to give us a call. We're going to go to Eric who's in Austin, Texas. What's going on, Eric?

Hey, y'all. It's so great to speak to you guys. How are y'all today? Happy Friday. Oh, thank you. Happy Friday to you. Oh my goodness, you guys. This is great. Let me take a deep breath here. I'm kind of nervous. But hey, so I am calling because I started out kind of in a position like you were, Jada, and I had $215,000 in debt. And that was, I know, it was a lot. It was between student loans, two cars, a credit card,

some medical bills and whatnot, but I'm down to about $77,000 now. So I've really, yeah, I've been really building that snowball, but I've come to the final mountain here, that final amount of debt that I've come up to and everything else prior to has only been like 10,000 or $20,000. And now I'm facing a $78,000 mountain. So my first question is, what piece of advice do you have for somebody that has been like really pushing and really going through this, this, uh, that snowball method for the past couple of years? And it's just like, yeah, you know, you're tired. How many years has it been? Um, I started this in 2020, so I've been doing this for, we're coming. How many years has it been? I started this in 2020. So I've been doing this for, we're coming up on four years now. It's been, it's been a lot. Listen, that is a lot. And

four years is a lot. So congratulations. Let me be the first one to just kind of like clap you up and say, very good. The 78,000, what is that big chunk? What is it? That's all student loans. That's all what's over for my student loans. Yes, ma'am. Oh, I know the feeling. Oh, I know the feeling so well. So the $78,000, let me ask you this. Is it one, like I remember ours was one payment, like it was a chunk of $78,000. But if you looked closely, it was actually a bunch of little loans grouped into that one payment. Is yours like that? Mine is just one giant loan at this point. I think I worked with my parents at one point to just, what do we do?

We consolidated from Sallie Mae into like another organization, and it's just one giant sum at this point. With one interest rate and one account number and one everything, right? Correct, yes ma'am. Okay, so I'm sorry about that. That is tough. It's hard to see that. The good news, it's your last one, probably another set of good news is how much are you able to chunk away at it every single month? Well, that kind of leads me to my second part of the question is I'm currently in Austin. And as you know, the tech industry isn't necessarily very reputable for staying consistent whenever it comes to jobs. So I've actually put myself into storm mode because I believe that my

organization will be doing layoffs here in the next couple of months. So that's my struggle is not only do I have this mountain in front of me, but I also have, you know, to kind of put everything aside temporarily before I can start paying my student loans again. So which I think is smart. It's probably smart for you to do that. I want to go back to your first question, which is, listen, I've been in this four years. What do I do to stay motivated? Right now, you kind of have a little bit of a I don't want to call it a breather because you're still stacking up as much money as you can. But what I think is really important, and just for anybody listening, you know, we say all the time on here, the average person is out of debt, you know, in two years or less. And it's important to remember that there's people to the right of that average number.

And my guess is, you know, if you continue paying off this debt, you might have another year or two into this so that you're going to be six years in, which I relate to. And I do think that for you and anyone listening, you have to have to have to include milestones of your own, ways that you can celebrate, ways that you can, the way I describe it is like a humpback whale, right? A humpback whale is swimming along. He's swimming, he's going after it, he's doing what he, and every once in a while, he jumps out and he just like has that moment of like, oh, I can breathe. And he goes back in. And I think that that's the way you have to navigate this because we say on here all the time, beans and rice, rice and beans, gazelle and tents. You're not going inside of a restaurant unless you're working inside. Like, and that's so, so true, especially when you're in that average. But once you cross over into the four and five year mark, there is a part of this that mentally for your health, you need to go into a restaurant.

Like, and I'm being clear, like, I am not talking to the folks in average. I'm talking to my six figure freedom folks who have this six-figure debt in this case 215 000 you're in this thing for an above average time four five six years you need to become a humpback whale and you need to jump out and you need to do maybe you did save up cash to replace a beater okay like go ahead and replace your beater if it's falling apart and you've got eight thousand in cash do it i remember it's a marathon yeah you're in a marathon yeah and let me just for the people listening some of the things that sam and i did in our debt payoff journey which was seven and a half years that was not paying off debt a we uh cash flowed another vehicle because we we it was time okay we did take a couple of very small trips like weekenders to

like okay like we're good and again this is at that four five and six year mark right you just have to do something that you've said when we get to this point we're doing that when we pay off that next sally may or nelnet or navion or whatever you have when i get to 80 000 i'm doing this and when i get to 100 000 i'm doing this and when i get to 80,000, I'm doing this. And when I get to 100,000, I'm doing this. And when I get to, and so you have to set those milestones in there and set them ahead of time so that you don't feel the need to get sloppy. All right. So you've got 78,000 to go. I feel like in that 78,000, there's probably one, one medium to decent milestone within that. And you've got probably two years to go after a four year journey.. And you've got probably two years

to go after a four-year journey. Sounds like you've been hitting it pretty hard. So how much do you make a year, Eric? I make after taxes, probably about 4,800 a month to about 5K a month. Okay. Yeah. So I mean, my goal is to...

Go ahead. Oh, go ahead. I'm sorry. No, you go. I want to hear what you have to say. Sure. My goal is to pay it off by the time I'm 30 right now. I'm in 28 and a half. And so I just, I really want to get after it. And I've been very gazelle intense about this. And I want to pay it off and I want to get rid of it by the time I'm 30. But, you know, it's just 77,000 staring at that mountain to me. And you're right. I need to set those milestones. I guess I need to be a humpback whale in the situation.

Yeah. And Eric, I like what Jade said. I haven't heard you say this before, Jade, but I'm like, that is so true. Be intentional with those milestone moments too, because I think there is a point that you're just so exhausted that you're like, oh, and there can be a sloppiness in the milestone celebration and you end up spending more than you think. Right. And so it's like you're being so proactive it's part of the plan as you look out that you're

like i'm planning for this at this date this is how much i'm going to spend here to enjoy this to get that breath of fresh air to keep on moving but when you get to the point of complete exhaustion sometimes then that's when you're like oh my gosh i'm gonna make you could make some poor choices out of pure exhaustion. That's right. You haven't planned for it. Yeah. As intentional as you can be, which kind of takes the fun out of it sometimes. But like, but it gives you something to look forward to.

Yes. And it's not a trip to Europe because I already heard I heard somebody thinking I can finally take that trip. It's not a trip to Europe. It is not a seven day vacation last year. What'd you say? I said not me taking a trip to Europe last year. Listen, I'm not going to go off because I don't know the details. But my point is, be a humpback whale. And since you did take that trip to Europe, this next milestone is not going to be quite as extravagant. It's going to be, you know, know I mean it's different for different people the things

that you value um I know for me it was including certain things that I had cut off for such a long time like I was like listen I'm gonna start getting my nails done again like I it was certain self-care things that I was like I'm not doing this anymore and I've worked really hard um and so you have to be reasonable and I mean I can't decide what that's going to be for you on this phone call but you have to be reasonable and figure out what that is for us we had one vehicle and the the windows were held up by shoestrings so it was like listen we've got the money saved it's time to upgrade the car and i remember calling in the dave ramsey show and saying to dave can i do this and i think that's what happens And this shows me that he's in the right spot.

When you're just so in it that you don't even, you can't see the forest for the trees anymore. You need somebody to tell you that you can take a break. That's a good indicator that it's time to take a break. So good. Really proud of you. Good job, Jade. I'm glad you were here today.

Thank you. So good. I'm glad you were here too. Such good stuff. We have fun together. Again, Jade Warshaw here, Rachel Cruz. You were listening to The Ramsey Show. Thanks for hanging out with us and make sure you see us on Down the Line on the next Ramsey Show. Take care.