The Ramsey Show - App - Flying Through $125K of Student Loan Debt in Just Three Years (Hour 2)

Episode Date: December 5, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. Elizabeth is with us in Albuquerque, New Mexico.

Hi, Elizabeth. Welcome to the Daveave ramsey show hi dave thank you sure what's up so i have a question our home has been on the market for five months we have purchased a new home and we we are trying to sell our home. We've done everything possible as far as making sure that the price is right. That home is in an HOA, so to make sure that people understand how the HOA works, which it is also on a land lease, which when we purchased the home, we weren't able to buy the land but then had recently within the last few years been able to purchase the land, which we did not because we knew we would be moving.

But our thing is, is our home has been on the market. It's beautifully updated. It's not overpriced. It's priced well within the same price range as that other homes in our neighborhood are going for. But other homes have been on the market and off the market in less than the time that our house has been on the market. Were they on the land lease?

Yes, they were on the land lease as well. Okay, so that's not the distinguishing factor then, right? No, and our home is on the outside of the neighborhood, so the neighborhood is raised up a little higher than the street is. So on the street side, the wall is eight feet, which we recently just raised it. So now it's 10 feet high. And now on our side, it's six feet high. So we did raise it because I think that was probably a deterrent.

But I do know that we're going into, you know, it's December now, and I know that the market can have the tendency to slow down. And so that's what I was concerned about. Okay. So I haven't heard your theory yet on why it hadn't sold. We think that possibly it is because it's on the outside of the neighborhood and that it backs up to a major street so that was the wall that we had built up yeah so traffic noise yes traffic noise and so what we did is raise the wall because we had talked to the other the other houses that sold were not against that wall. Correct.

Okay. That's a possibility. So that devalues the house. Okay. That's a deterrent, and so that causes your value to go down compared to those other comparable sales. Okay. So you're probably priced high.

As far as that goes, even though we're in the same price range as the other houses, we should probably lower the cost of our house. The other houses don't have a traffic noise in the backyard. Okay. And so that's, you know, you have to do something. Okay, if I'm looking at two houses and everything's equal, the price is equal, the features are equal, one has traffic noise in the backyard, one doesn't, I'm taking the one that doesn't. Right.

Unless you give me a reason to take the one with the traffic noise, and that reason would be price. So, yeah, it's not going to bring as much. Okay. Okay. So that's your advice on what we should do as far as lowering the price to be comparable. Has your realtor not told you that? I mean, she just said it would take time.

And then, you know, other realtors have come in and said, you know, you should build up the wall. So we built up the wall because it's kind of one of those things out of sight, out of mind. So if you can't see it, then it won't be such a big deal. You can't hear traffic noise if you're inside the house it's only when you're outside in the backyard and it's mainly at certain times of day you know when the traffic is a little bit heavier sure our house is a little more updated than other houses that have sold but i think definitely that is the biggest deterrent. Well, if all things are equal except traffic noise, they're not going to pick yours. So all things can't be equal.

That's what we're saying. You've got updating to your advantage in some cases, maybe over a certain house on the street, but other houses on the street may or may not have been updated. But someone, even if they're not in your particular neighborhood, if they're two neighborhoods down and they've got a similar per square foot cost and similar attributes to the home, it's still going to be comparing, you know, apples to apples, plus or minus stuff like traffic noise. And so, you know, that's you're going to you're probably going to pay someone vis-a-vis a price cut to move in. There's what it amounts to. It's what it sounds like to me.

I don't know. But just listening to you talk it through, that's what I think I'm hearing. And if you haven't talked to one of our endorsed local providers as a real estate agent, you probably should. They're one of the top selling agents in the area, and they will, you know, they'll tell you the truth on this and help you set the price appropriately so that it can actually get sold. Because I think you're going to get stuck here, and you've got two house payments now,

and you're going to end up being a dadgum motivated seller soon if you don't watch what you're doing. Mark is with us. Mark's in Phoenix. Hi, Mark. Welcome to the Dave Ramsey Show. Hey, how are you, Dave? Better than I deserve. What's up? So I got a question. I'm starting to pay off my debt that I have.

I'm going to finish paying off my truck in the next six months. Good. And my question is, with that to be paid off so aggressively fast, I'm going to stop my TSP that I have right now going. I put the max in there every pay period, so it's going to give me a substantial bump. My question is, I have a house in Virginia that I rent out, and what I'm wanting to do is pay that off instead of sell it. Why?

And I'd like to keep that eventually as rental income. Why? You live in Phoenix. You live in Phoenix. You live in Phoenix. Correct. Yeah. I mean, having rental property in Virginia is a nightmare. Well, I have family out there that takes care of it,

and we eventually plan on moving back there. When? In the next four years. Okay. Well, that's fine if you want to do that i mean you can get it paid off and keep it i just as a long-term game plan you ended up with this house because you moved out of it not because you bought it while you lived in phoenix right it's you know you're a landlord by default not by strategy it wasn't your strategy to do this and it's not a good

strategy long term if you can do it quick because because 36 months, 48 months, and get back up there, that'll be okay. But I wouldn't be owning a house 5, 10 years that's in a different city as a rental. I think that's a bad idea. But you are wise to stop your TSP temporarily. We tell folks to temporarily stop your all investing, all saving, including retirement, including even if it has a match, temporarily do that until you get your personal debts paid off. You clear those personal debts,

then you finish your emergency fund as three to six months of expenses, and then you move into putting 15% of your income into retirement. So that's the point. You restart your TSP is after you get your emergency fund in place and your debt-free, except your houses. So, hey, man, thanks for the point. You restart your TSP is after you get your emergency phone in place and you're debt-free, except your houses. So, hey, man, thanks for the call. Appreciate you being part of the show today. This is The Dave Ramsey Show. Okay, things are getting pretty weird out there.

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Open phones at 888-825-5225. This is the Dave Ramsey Show. Tina is in Milwaukee, Wisconsin. Hi, Tina. Welcome to the Dave Ramsey Show. Good afternoon, Dave. Thanks for taking my call. Sure.

What's up? So, my husband and I are kind of at a disagreement right now. We currently save 15% of our income towards retirement, but we have about $30,000 in debt on auto loans. And he wants to get those paid off, but in order to do that, we have to stop contributing for the next two years to our retirement accounts. What's your household income? $115,000 a year.

So why does it take two years to pay off $30,000? It's only $15,000 a year. Well, I mean, we have all of our bills between the mortgage taxes. You have other debt? We do not. Okay. Let me try this again. Do the math with me here, okay?

$115,000 minus 30. You should be able to do that in one year. Okay. You see how I'm doing that? I mean, I'm not looking at the details of your budget, but what I'm challenging is your standard of living. Sure. Your level of commitment to sacrifice deep enough to get this done. I don't think it takes two years to pay off $30,000.

As a matter of fact, I know it doesn't. Millions of people have paid it off faster. So you're just beginning to fool with this idea. You guys are just starting some of these discussions and somewhere along the line i entered the picture and i'm starting to become we did your financial peace course 10 years ago oh okay you flunked okay you i suppose if you want to say that there's no way you graduate from that class and have thirty thousand dollars in car debt you flunked the past 10 years we paid $70,000 worth of other debt between school loans and credit cards.

Meanwhile, you borrowed $30,000 on two cars. Correct. Yeah, you flunked. Yes, you did. I suppose if you want to say that. Well, we were pretty clear, never borrow again. I mean, that's the only way to get out of debt, stop borrowing. So the formula is this.

It's an emotional formula because it's a behavior-based situation. The angrier you are at the situation or the more motivated you are at the situation, whether it's anger or fear, the deeper you will sacrifice. The deeper you sacrifice, the faster you get out of debt the faster you get out of debt the faster you don't have any payments and you now have that money to build wealth the shortest distance between where you are and wealthy is debt free because it clears up all the money you're spending on this other stuff that's what you learned or should have learned in the class. I agree.

So what I'm saying is if I'm in your shoes, I'm not going to just kind of wander out of debt. I'm going to get a little more fired up. I'm going to do it in one year. And, yes, of course you know we teach you to temporarily stop investing while you pay off debts. Correct. That's what we teach. Yes temporarily stop investing while you pay off debts. Correct. That's what we teach.

Yes, that is correct. Okay, and so who's not wanting to do that? It was you. Me. I'm the free spirit of the group. Okay. Well, it's not a free spirit thing, really, on that. It's a free spirit just means I'm not as nerdy and I'm not as detail-oriented and that kind of stuff.

It doesn't mean that you're. Because I see it as if we're already contributing 15% to our retirement funds and we have a net worth of $360,000. We're 35 years old. What's a little car debt is how I look at it. Yeah, you know, what's a little backache? Not a big deal. You know, it's just a, you know, what's a cigarette every now and then? It doesn't kill you completely.

It just makes you sick. I mean, you can do whatever you want to do, but that's the same logic pattern you're following. The critical thinking is bad. I mean, you can tolerate a lot of stuff, but the question is just what's going to get you to where you want to go faster, to live like no one else so later you can live and give like no one else is what I would do. I didn't even say to sell the cars.

I just said, let's just roll up our sleeves and let's get serious about this and clean this mess up. And then let's get back into saving 15% of our income. Because, see, if you had followed what you were supposed to have learned, you wouldn't have a $350,000 net worth now. You'd probably have a million-dollar net worth. It's probably cost you that much in the decade while you've been screwing around with this stuff. So that's the problem is the data points all tell us the shortest way to wealth. The wealthy people avoid consumer debt of any kind, and that gives them the control of their most powerful wealth-building tool, which is their income. And you just got to decide if you're going to do that or not.

We can be friends and you not do my stuff. I got lots of friends that don't do my stuff. But if you want to do, you call me on the radio. So if you want to do our stuff, that's what we teach. And the reason we teach it is it's the shortest distance between where you are and wealth. And we want you to be wealthy so you can change your family tree and so you can be outrageously generous. Everyday Millionaires.

Ann is in Sonoma, California. Hey, Ann, how are you? Hi, Dave. It's so great to talk to you today. You too. Merry Christmas. How can I help? So I just recently came into a pretty significant inheritance,

but it's split into three very interesting ways, and I'm curious to see what you think I should do with it. Okay. What is it? So my dad just passed away. I'm sorry. Thank you. How old was he?

So in his checking account, I will inherit about $10,000, which completes my emergency fund. Okay. And I have zero debt, and I'm already saving 15%. He has about $90,000 in a traditional IRA, and I'm able to either roll that into my own IRA and minimum distribution over the course of my lifetime, or I can take a lump sum, but I'm worried that that puts me in a really high tax bracket, and I'll have to pay a pretty significant amount of money to the IRS in order to do that. Right.

And then the second piece of the inheritance is a house that's fully paid for in Arizona. I'm in California. But it's a really good family friend who was one of his best friends that lived there. And he's 80 years old. He'd like to live there until he dies. He's a great caretaker. So I was planning on just keeping that as a rental because it's pretty zero maintenance, actually, on my part. What's it worth?

It's worth probably about $240, $250. And what's the rent? The rent is $1,300. That's low. Okay. You need to find out what the rent is worth. I don't mind the gentleman staying there, but not at 50% of what it should be. If you want to give him a deal, that's fine, but not at 50% of what it should be. If you want to give him a deal, that's fine, but not at 50%.

And my guess is that this property is probably worth $2,000 to $2,500 a month. Okay. I'm guessing, but you need to check with a realtor and find out in the area somebody that manages property. Probably do a little bit of online research and find out as well. You say it's in Phoenix proper? It's in Sun Lakes. It's a retirement community.

Okay. I can't live there until I'm 55, which I don't spend on everything. No, it might not be worth that then because you have a limited type of renter that you can put in there. They have to be 55 or above. Right. I had a realtor do a market analysis, and she put it between 230 and 260. Ask her what it should rent for and do a market analysis, and she put it between $230,000 and $260,000.

Ask her what it should rent for and do a market analysis on that. Okay. It might not be full market rent because you are limited to $55,000 and above, and so it might have to go cheaper than that. But a typical $250,000 house, a good rule of thumb is just I'm guessing, but it's not always true. But I just start with this, and then I do actual research, 1% per month. So $240,000 is $2,400 a month. Okay.

That's why I'm challenging it. Okay. I may be wrong, but I want you to research it. Okay. Moving on, what's your income? It's about $140,000 a year. Okay. How old are you?

I'm 39. How old was your dad? 73. I'm sorry. How old was your dad? Yeah, 73. I'm sorry. Well, I'm with you. I think you keep the house and rent it to the gentleman. Let's just try to get the rent adjusted to something that's a good deal for him, but that is a little more accurate, I'm guessing. And I would roll the IRA into an inherited IRA and some good mutual funds.

Get with a smart investor pro to help you do that if you don't have a broker. The inherited IRA that you described is the right way to do it with a minimum distribution. You don't need the money and let it grow tax deferred. And that's a good plan. Hey, thanks for the call. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry.

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What if you never had another credit card bill? What if instead of worrying about money, that you had a plan and you were focusing on building wealth. Well, that doesn't have to be a what if. You actually can do all of that. You actually can get control and change everything. It's called Financial Peace University. And if you go to the class and you do what we teach you in the class, you will not only get out of debt, you'll be on the road to be an everyday millionaire.

It's a step-by-step course that teaches you how to spend wisely, get out of debt, handle your insurance properly, learn about real estate. This is the class you should have been taught in school but weren't. And then you're set to move on to more advanced classes that are also part of the membership. It's a pretty cool thing. Financial Peace University. Check out our Kickstart Bundle at DaveRamsey.com, and there's all kinds of goodies there, all kinds of Christmas presents and ways to do this. Harley and Chelsea are with us in El Paso.

Hey, guys, how are you? Pretty good. How are you doing, Dave? Better than I deserve. I, guys, how are you? Pretty good. How are you doing, Dave? Better than I deserve. I see on my screen you're debt-free. Congrats. Thank you. Thank you very much.

How much have you paid off? We've paid off $125,000 in a little less than three years. Good for you. And your range of income during that time? Well, during that time combined, it was about anywhere between about $75,000 to $80,000. And then once we got debt-free, we went down to just $48,000. Now I'm the one that's working, and she's staying at home taking care of the kids. Cool. What do you all do for a living?

Well, I'm an one that's working, and she's staying at home taking care of the kids. Cool. What do you all do for a living? Well, I'm an Air Force pilot, and then my wife is, she was a social worker at various different capacities as we moved across the country. Very cool. Well, thanks for your service. What kind of debt is the 125? Student loan debt. All of it? All of it.

Every bit of it. Yes. How did you do that in three years? So, thankfully, as soon as we got engaged, we were both, I was just finishing up my master's program. He was finishing up his undergrad. So the first thing we did is take FPU when we were engaged. And so we started kind of implementing principles. And then by the time we got married, we moved right to Mississippi to start pilot training and we were ready to go. So we did we

moved three states in three years but fortunately I was still able to be employed and we just lived off of all my income went towards debt and then we lived off of less than Harley's and that's how we made it work. Wow very cool. So what do you tell people the key to getting out of debt is? What's snapped inside of you? What's the thing that your friend is talking to you over coffee and you say, you have to do this? I think the biggest realization going into it is debt is debt. No matter how you slice it, and that's such a cultural stigma to break.

And it's so ingrained in us now that, like, oh, you know, you've got car loans, you know, you've got certain other loans, payments, X, Y, and Z, that are actually still debt. And that kind of hit us pretty hard, I think, when we took FPU and just made us think about it. And that was a huge driving factor. But I would say realize that debt is debt and also tell your money where to go. If you're sick of it running away from you, tell it where to go.

Yeah. And that's the budget then? Absolutely. Okay. Cool. Very cool. So you guys really have been doing this since you got married? Yes.

Just about six months ago, actually. We knew because we're kind of moving all over, actually preparing to move overseas, we wanted to get rid of the debt before we thought about kids. So thankfully, by the grace of God, we paid off our debt about six months ago, and our daughter arrived a month later. Wow. I couldn't be more thankful as we head overseas that I don't have to have the pressure of finding a job right away because I'm pretty limited, and I get to stay home with my little girl.

Cool. Where's your next assignment? I'm going to Osan Air Base in Korea. Okay. Wow. Yeah. Wow. What do you fly?

I fly the F-16. Oh, the beast. Wow. Look at you, man. It's the best one. I F-16. Oh, the beast. Wow. Look at you, man. It's a fast one. I'm telling you. Well, very cool, guys. Thank you again for your service.

I'm so proud of you guys. Who was your biggest cheerleader? That's a good question. We had so many within the family. I think it was probably mostly the church leaders that we were taking the class with were some of the biggest cheerleaders, and also some of our closer friends that we chatted about this. Because I think still a lot of people don't really understand the whole debt is debt.

Like it's normal, I'm always going to have it. The lady a few minutes ago, what's a couple of car payments? What's the big deal? Right, right. And we heard so many times everyone has debt just keep paying the minimum like a car is not dead or college loans isn't dead or why are you why are you freaking out about this why like it's only a burden because uh you you're saying it is it's like no no no like no it actually is a burden we just lost guys. See if you can get them back. Kelly, see if you can get them back. We just dropped the call.

And I want to make sure they get their debt-free screen in. So it's the second time that call's dropped in there. So what a great, what an impressive couple, though. $125,000 paid off in three years. And he's a pilot. And she's got her master's in social work and is doing that kind of a thing. And so it's – are you getting them? I'm not even seeing the phone dial.

Okay. Well, we'll just have to come back in a minute then. Did you get them? No. Okay. All right, cool. All right. Well, we'll see have to come back in a minute then. Did you get them? No. Okay. All right. Cool. All right.

Well, we'll see what can work out then. So that's impressive, though. I mean, they pull that off making $75,000 to $80,000. They pay off $125,000 in three years. And let's see if I can get them back up here right quick. Okay. Thank quick. Okay. Thank you. Good.

All right. We got them back. Somehow the call dropped on you guys. I'm sorry about that. I don't know. We're on a landline, so I don't know. That's the second time. I'm sorry.

I apologize. Well, I just want to make sure you got your debt-free screen in because you've done all this work. So we're going to stall around here on the air until we get you back on. All right, very cool. Harley and Chelsea, $125,000 paid off in three years, making $75,000 to $80,000. Count it down. Let's hear a debt-free scream. Three, two, one, we're debt-free.

Yay! I love it! Well done! Well done, you guys. Great job. Well, hang on. We've got a copy of Chris Hogan's retire-inspired book for you, and we'll also be sending you in January a copy of the new book,

Everyday Millionaires, because you are on your way to be one of them, without a doubt. So very cool times for you guys. Very cool times. Brandon is in our private Facebook group called the Ramsey Baby Steps Community. I have seven payday loans from $500 to $1,000 each. This is not my only debt. I also have a couple of credit cards that are around the same amount.

I don't make enough to pay all the minimum payments, and I certainly can't get my $1,000 saved while still owing all this. I'm so lost, I don't know what to pay all the minimum payments, and I certainly can't get my $1,000 saved while still owing all this. I'm so lost, I don't know what to do. Can you help me? Yes. You need extra jobs, lots of them. You need to be selling stuff this weekend at a garage sale, and you need to put the rest of it on Craigslist. And you need extra jobs, lots of them. By nightfall, you need to put the rest of it on Craigslist. And you need extra jobs, lots of them.

By nightfall, you need to be delivering pizza somewhere. Not that difficult to get hired to do that. Stop by, tell them you've got a car and you haven't killed anybody, and they'll let you deliver pizzas. Go do that. Get on Uber. Make you some money by nightfall. You need money, and you're not making any money.

When you have a problem that consists of increments of $500, that says you don't have an income. That's what that tells me mathematically. And the answer to these situations is lots of ridiculous work. Hour after hour after hour of work. Good paying work, but work that you don't ever want to have to do again. It's uncomfortable, but pays beautifully. You work like no one else so that later you can work like no one else. This is the Dave Ramsey Show. Thank you. Tom is with us in Columbus, Ohio.

Hey, Tom, welcome to the Dave Ramsey Show. Hey there, how are you doing today? Better than I deserve. What's up? So, I'm 26 years old. I make about $42 a year, and I have no debt. Good for you. All right. So, my question is, I've got about like three grand in savings bonds. They're making between 2% and 4% on interest. Yep.

And it's just not that much, so I was kind of wondering, like, what can I kind of do with this right now? Okay. Well, I don't use savings bonds because, as you said, they don't pay any interest amount to anything. And people tend to misplace them, forget they have them, and they just sit around. And so I don't use them as a vehicle. What we teach folks to do is to have an emergency fund of three to six months of expenses in something like a money market account.

Do you have that? I don't. I just have a basic savings account. Okay. I've got about two grand in there. I'm trying to have a fully funded emergency fund. You have how much in there? Two grand.

So you're trying to get it up to a fully funded? Yeah, yeah. Okay. Let's cash those savings bonds out and use them towards that goal then. Okay. Just put it right in? Yep. Put it right in and then move it from a savings.

Talk to your bank about giving you a money market. It's not going to pay much more, probably 1% or something instead of a half a percent. But it's still a joke. But at least you've got it separated, and you do not have an ATM on it, and you do not have it attached to overdraft to your checking account. So that way you use it only if there's an emergency. You have to stop what you're doing, move everything around to get there. And that's the only way around it.

All right. Open phones at 888-825-5225. Rashad is with us in Charlotte, North Carolina. Hi, Rashad, how are you? Hey, Dave, how are you, man? Better than I deserve. What's up? Hey, real quick, first off, man, I want to thank you for taking my call, let you know that listening to your show has changed my life, man. The whole, if if you can't pay for it now you can't afford it as like changed my life so i want to thank you for that just to start off with you know thank you i'm honored my question is i uh

i personally i'm about to get married uh i'm about to pop the question i'm sure she's going to say yes so i was finished with baby step two this, but now with me getting married, I'm going to bring her on board. So her debt's pretty low. She's got like $4,500 worth of debt, but she's got this car that she's leasing. It's like a 2017 Honda. She's already over the miles on it. And so I was wondering what you think I should do to try to get this squared away, because I know you're a big fan of selling cars.

Have you guys discussed all of this? cars. Right. What do you think? Does she, have you guys discussed all of this? Are you on the same page about money? Yeah, she's good at, like, following my lead about this, and I don't know if she'll be okay with me selling her car, so I'm hoping that you guys can advise us on that. Yeah, that's where you don't want her following your lead. That's where you guys want to be talking this through and both of you using your brains and both of you buying into what's best for the family long term.

And that's, of course, once you're not only engaged but once you're married. But the way you deal with a car lease is there's a couple things to look at. You get the early buyout on it which is like the early payoff okay right and uh you compare that to what it's worth and look at look at a private sale on kelly blue book and so let's just make up some numbers let's do you know any of those numbers by chance i don't sir okay all right so let's just say that the early buyout is $24,000, okay, to get out of this car. And you can sell the car for $20,000. Well, that would leave you $4,000 in the hole in order to sell the car.

You've got to have the other $4,000. You've got to borrow it. You've got to save it. You've got to have it from somewhere. Does that make sense? Yes, sir. Yeah, and so once you've got that $4,000 and you cover that difference. Yes,500. I'm making that number up, okay?

Find out what the mile overage is going to be by the time she turns it in. And you estimate with the number of miles she's running how much more she'll be over. And so you put the mileage overage plus the remaining things, and you compare that to the hole that you're in if you sell it now. So what it amounts to is the longer, the more that is left on the lease the more likely you are to sell it now the closer to the end of the lease you are the more like you are to grit your teeth and bear it and just take it on through but try to limit the mileage so that we don't go over do you have any idea how much time is left on the lease?

Well, she just got it last year, so I think maybe two years. So you think it's a three-year lease? I believe so. Okay, you're probably selling it. She's got like a 0% rate on it. Yeah, you're probably selling it, though, okay? Because when you add up 24 of her payments versus what you find out that she's in the whole, then you're going to find that 24 payments is a lot out that she's in the hole, then you're going to find that 24 payments is a lot more than she's in the hole.

That's what I'm going to guess, okay? But you've got to get those three or four numbers together, and that way you can compare what it looks like to keep it, how much does it cost to keep it in payments and in mileage overage, and through the end of the lease and then turn it in, or what does it cost to sell it now because we're in the whole x and compare those two numbers and then that'll tell you what you're supposed to do the math will tell you and uh i think as long as is left on this you're probably gonna want to sell this car but she's got to want to sell it too and this you guys need to get on the same page that is absolutely imperative that the

two of you talk this through and she doesn't just follow your lead hey thanks for the call man appreciate you joining us open phones at 888-825-5225 thank you for being here america we're glad you're with us cliff is in san francisco hey cliff how are you hi i'm good thanks for taking my call sure Sure. What's up? So I'm planning on starting medical school in about a year and a half. And right now I'm saving up as much money as I can, but I just don't foresee how I can pay for it without taking out student loans. So kind of my situation right now is I so far have $58,000 saved up,

and I'm hoping to have $160,000 saved up by the time I start medical school. And I guess my question for you is what else can I do to minimize the financial burden of the academic choices that I'm making? Two things. One is school choice, and that's not something that people in your shoes like to hear because you're just feeling lucky to have been accepted anywhere. Yeah, well, the thing is California in-state schools either don't have in-state tuition or they really like to accept out-of-state tuition, so there's no guarantee at all that I'm even going to get into one of the less expensive schools. Yeah, but school choice, the thing is, I've never gone to a doctor and asked them where they went to school.

That's a fair point, yeah. And so I want to pay, I mean, assuming the education is reasonable, and I think it is, I want to go to the least expensive school. That's variable number one. And that variable could be half the cost of another one easily.

Right. And so just because you got in doesn't mean you need to go do it. You may need to keep working it. The second thing is I would begin to approach some of the hospital equipment companies and some of the pharmaceutical companies and see what scholarships they offer for med school students. They're rare. They're hard to find. But if you can find them, they go well.

The third thing is talk to some of the big hospital companies and ask them if they have any kind of a scholarship program or indentured servant type program, I call it, where you promise to work for one of their hospitals for a year or two after you get out. In return, though, they give you like $100,000 or something, that kind of a thing. And there's some of that out there, the HCAs of the world and that kind of a thing. So check in with all of those while you're at it as well. The only other thing I can think of is the MD-PhD programs, which are, again, very rare and hard to get into. But if you can get into one of them, that basically makes you an employee of the university,

and you go to school free. Right. And so look into the MD, PhD programs. They are powerful as far as saving money goes on this stuff. And that's the way to go with that for sure. So, hey, good question. I think you can make it. You're just going to poke around until you figure it out.

Thanks for calling in. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host, and we'll be back. Hey, it's Blake, chief production officer for the show, and here's a little tip for 2018. Go download our revamped Dave Ramsey Show app from the App Store. We're always listening to your feedback and adding new features to make it even better.

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