The Ramsey Show - App - Going to a Famous School Does NOT Equal Success! (Hour 3)

Episode Date: January 18, 2022

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Starting point is 00:00:00 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and a paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. George Campbell, Ramsey Personality, is my co-host today here on The Ramsey Show. We talk about your relationships, your money, and your work. We're here to help. Open phones at 888-825-5225. Erica in Destin, Florida, starts off this hour.
Starting point is 00:00:58 Hi, Erica. How are you? Hi, sir. I'm good. How are you? Better than I deserve. What's up? All right. So you have to be gentle with me because I'm sensitive, Uncle Dave.
Starting point is 00:01:11 Okay. I'll try to be nice. What's up? So me and my husband are currently active duty military. I'm 22. He's 28. Thank you for your service. Yes, thank you. Yes, sir 28 thank you for your service yes thank you yes sir thank you for the support so um uh i'm my contract is coming to an end as in my final out date is may 2nd and my contract to be over which means we won't be receiving we'll be losing half of our income. And we got quite a bit of debt. And I'm nervous. Okay.
Starting point is 00:01:48 All right. So what are you going to do with your life, honey? I don't know. I don't have any college or anything like that. I don't know if I have to stay in to support my family. I mean, I'll do whatever I have to. No, you need to go on. You need to do, you can stay in.
Starting point is 00:02:09 There's nothing wrong with a career in the military, but it doesn't sound to me like that that was your choice. You just don't know what you're going to was your problem. Yes. Is that right? Yes, sir. Okay. So if you close your eyes and you said, I could click my heels together,
Starting point is 00:02:26 I'm Dorothy on The Wizard of Oz, and the man behind the curtain could tell you to do whatever you wanted to do, what would you go do? Anything I wanted to do. That's what I said. Well, I would love to be, I would love to work for myself. I'd love to grow a blog and maybe be, you know, a YouTube influencer. That would be like my dream.
Starting point is 00:02:54 But I don't know how realistic that is. Well, do you have anything to say? Well, yeah, I think so. Are you going to be entertaining or are you going to be informative you know a little bit of both i'm pretty smart okay i guess and humble yeah you're fun you're fun i like you thank Now, Erica, in the meantime, I love this idea that you're passionate about, about being a blogger, influencer. And let me tell you, it is realistic. It's going to be about 28 times harder than you think it will be.
Starting point is 00:03:34 This doesn't just happen. It's not a job you apply for. It's a job that you have to put in 50, 60 hours a week until it's working, and then you continue to make it work. But I absolutely want you to pursue that. In the meantime, it sounds like you might need to get some income in the door and get rid of this debt, which will free you up to focus more time on that dream of yours, right? Yes.
Starting point is 00:03:55 So let that fuel you on this debt-free journey. How much debt do you guys have? So in total, we got like 49. Okay. What's your husband make? My husband makes 50. Okay. And how many kiddos in the background do I hear?
Starting point is 00:04:13 Just one. He's just loud. How old is the loud one? Five months. Oh, he's perfect. Okay. What kind of debt is this? Well, my husband has some credit card debt and personal loans from his prior marriage,
Starting point is 00:04:32 and then I have a car. Okay. How much is the car debt? $20,000. Of the 49? Yes. Okay. Let's sell that.
Starting point is 00:04:42 Yes. Okay. That's exactly what we already planned on doing. Good. We just got rid of almost half your debt so you're down to 29 000 in debt now do you guys feel a lot better do you have any savings any cash a thousand okay you're working the plan i love it you're working the plan that's the perfect amount to have so what is ken's what's ken's assessment called uh get clear the get clear assessment have you taken that yet no okay it's 30 i'm going to give it to you for free it'll take you about 30 minutes to take it
Starting point is 00:05:12 and it'll help you it's in ken coleman's process from paycheck to purpose the first thing you've got to do is you have to get clear on where it is you want to go with your career okay now i think you need to develop a plan a career uh or a plan b career whatever we want to call it that is what george is saying where you get out there and quote get a job right now and you start your youtube thing as your side hustle and let it grow now uh i got a few million folk on the youtube and um uh tens of millions and um so here let me give you a little clue about this because we've studied these folks uh that are making a lot of money on youtube and i'm i just kind of joined it because we were already doing this and they just put it on youtube but so it's a little different than starting from the ground up. But we know a lot of people that are
Starting point is 00:06:07 doing very well in that space and what you need to have as you work on that. But really, this is after you take the Get Clear and you figure out some kind of a job you can go get while you begin to work on the YouTube. But you got that part, right? Yes, sir. Okay, now, then you start working with your blog and your YouTube and really the big thing you need to do and you can do it out of this get clear assessment as well is you need to not figure out what it is you're going to say or whether you're going to be entertaining or whether you're going to be smart uh or both but instead what it is you're wanting
Starting point is 00:06:38 to accomplish who it is you're wanting to help okay if you if you're a comedian what you want to accomplish is you want to make people laugh yes and that's fine that's your job then okay so my job is me so if i'm doing something on youtube then it needs to make people laugh that's what i'm doing so you need to say what is your youtube show for what is your blog for and just i want to be an influencer is not a four okay who is it you're going to help and what help are you providing them entertainment information whatever it is and really start to get a mission to drive your youtube channel because if you don't have somewhere you're going with it. It won't go anywhere. Okay. So I did already start it. Okay. Yes.
Starting point is 00:07:28 Do you have any idea what your mission is? I'm curious. Yes, sir. I would love to empower just young women, but especially new moms. I feel like there was a lot I didn't learn growing up. Oh, I like it. I've had to teach myself. Yeah, a new mom's empowerment blog and youtube channel i'm in
Starting point is 00:07:46 okay that's it that's exactly what i'm talking about that's exactly what you're already ahead of me you already knew what to do i didn't even help you at all okay so good yeah i think you start all of that but in the meantime i think you do get a job and it's a little hard to walk off from a five-month-old that's part of what you're struggling with too uh it's a little tough but you guys need the income right now and you need to clear up this debt you're only 22 you got all kinds of time here and if you can get that blog and that youtube channel making some money you can quit that job but you got to get making money first not just be a dream this is the ramsey show This is The Ramsey Show. I heard a statistic recently that absolutely blew my mind.
Starting point is 00:09:00 In the U.S. alone, over 3,000 people die every day without life insurance. Now, I don't want to sound unsympathetic, but this drives me crazy. What are people thinking? I don't understand how taking care of your family is not a top priority. Most of you probably just spent a bundle on Christmas on things you really didn't even need, and now you're making New Year's resolutions that are focused on yourself. But if you want to use the New Year as a reason to do something right, like protecting your family, then take care of it right now before it's too late. Term life insurance is something every family needs, and that's why I talk about it every day. It's not complicated, it's not expensive, and Zander Insurance is the only place I recommend. Go to zander.com or call them at 800-356-4282. Please learn from other
Starting point is 00:09:48 people's mistakes and get this taken care of. That's Zander.com or 800-356-4282. Well, you hear me say all the time that every adult needs a will. That's true. It's a basic adult responsibility to get your will done. There's really not a good enough excuse to not have one. You need a will. If you have changed states of residence, you need a new will. If you've changed your marital status, you need a new will. You need to keep your will updated based on where you live and what your marital and family status
Starting point is 00:10:38 is all the time. And you've heard me recommend an online will as the fastest, most cost-effective way to get a simple will taken care of. Get a lot of questions asking if that's right for everyone's situation. And what if you need a trust or you need a mirror will or what kind of powers of attorney? A lot of those basic things you can get online. So if you want to learn about all of this, you can take a quick quiz to figure out the kind of will that you need to protect your family and your wishes. Free service. Go to RamseySolutions.com slash wills quiz slash wills quiz. RamseySolutions.com slash wills quiz.
Starting point is 00:11:16 And it'll walk you through the whole process. And I know I can think of a lot of things I'd rather do than take a wills quiz. But you've got to get your will, and you've got to make sure it's done right, and you've got to take care of your family. It's part of being an adult. So get her done. RamseySolutions.com slash wills quiz. Our question of the day comes from Blinds.com.
Starting point is 00:11:36 Find out for yourself why Blinds.com is the number one online retailer of custom window coverings, free samples, free shipping, and new promos all the time. You'll save even more. Always use the promo code, the magic word Ramsey, to get the best possible deal. Today's question comes from Laura in Tennessee. Our family has been a Dave Ramsey family. I always agreed with the quote, expensive college is a rip-off idea, and my older son is in community college now. My younger son announced at age seven that he wanted to become an economist and fix poverty and wealth inequality. Almost a decade later, he still wants to become an economist. He wants to go to Harvard or Wharton and feels strongly that going to such a school would help him develop connections that would allow him to
Starting point is 00:12:20 advance his goals as jobs for economists are mostly appointed. We can afford to pay his way, but is it really worth $250,000 in tuition alone? There's a lot going on here. I'm intrigued by it. I personally, this is my personal take, I don't think it's worth 250 000 to go be an economist for the connections but if they have the cash to do it and that's something they want to do for their son that's the decision they can make but personally if i'm if i'm mom and dad i'm going no we're not doing this okay this kid is obviously a child of great intellect, and he's also a super nerd. Yeah. Seven years old, he wanted to fix poverty and wealth inequality.
Starting point is 00:13:08 Seven years old, I want to be an economist and do away with wealth inequality. What seven-year-old says that? Come on. Strange ones. Very smart ones. Yeah, that's an unusual child. And so, in a good way, maybe, but maybe, maybe. And now the child is... You said almost a decade later. So he must be... Maybe, maybe. It sounds like he's 17.
Starting point is 00:13:25 Now the child is... He said almost a decade later, so he must be close to college age. A decade, so 16 years old. Okay, let me help you with this. At 16 years old, you do not know what you're talking about. You're so full of crap that it's unbelievable. I want to go to Harvard because I can make connections because economist jobs are all appointed.
Starting point is 00:13:50 Horse crap. You're 16. You do not know what you're talking about. You don't know what you're talking about, young child. This is why you have parents. Thank God. You need parents. You need a keeper.
Starting point is 00:14:04 Even if you're a very smart and unusually bright young man who has had a focus since you were a child, a little child. So here's the thing. There are economists in all parts of life. I have a friend who is one of the best-known economists in the world. He invented the Laffer curve, Art Laffer. He has a phd from economics i believe it was cambridge if i remember i served in reagan's cabinet and he served on the in the trump cabinet as well wrote the last trump tax law is absolutely brilliant and made almost doing those things he instead manages um wealth for others i'll just leave it at that and um
Starting point is 00:14:51 like lots of wealth with bees on the end of it billions and so um in arts like 80 something years old now he's brilliant he's again he's a friend still real sharp in the area probably one of the best known economists on the planet at this's alive at this moment, in the top five anyway. And so he would tell you that education is vital and education is important, and he would tell you Cambridge was worth the money because of the path that he ended up going on. But I will tell you that that job, there's only about three of those in the world, and the rest of the time, the economist ends up working for a mutual fund company, or the economist ends up working for a financial planning company, or the economist ends up working for a large corporate entity that needs
Starting point is 00:15:38 some economic predictions and models run out on their revenue projections and an economist and in all of those cases there's no roi on what you're talking about so these schools are not better schools and no they do not provide better connections they're just more famous let me also let me point out to you this here's an example of what i'm talking about. Wall Street Journal did a study a few years ago, and 78% of the Forbes, I'm sorry, 78% of the S&P 500, the 500 largest publicly traded companies on the stock exchange, 78%, 8 out of 10, of the CEOs graduated from state schools. Let me help you with that again. Of the largest 500 companies traded on the stock exchange,
Starting point is 00:16:31 eight out of ten CEOs graduated from state schools. They went to the University of Phil in the state. But, Dave, they're missing out on the connections at Harvard. But they're the CEO on the connections and harvard but they're the ceo of household name companies and by the way the cfos same situation the ceos same situation the chief digital officers some of them didn't even graduate from college and so yes you can get a degree there but this idea that the connections you make in college are going to open your doors and make you successful is as dumb as the idea that the degree is going to make you successful. What makes you successful at the end of the day is you.
Starting point is 00:17:17 Education is important. It's even vital. But where you get it and who you are connected to there is no data to back up this theory of where you went to school matters that these prestigious universities that there's an roi on them we cover a bunch of this in borrowed future i was just going to say this is all reminding me very heavily of the borrowed future documentary where we go into this and we talk about is is school worth it are degrees worth it what about trade schools and state schools versus the big name and what we found out was that there's there's really no
Starting point is 00:17:49 correlation between success of hey i went to harvard or i went to a state school learn to play golf join a country club for a tenth of what you would pay at that school and go get a degree from a state school and you'll be better off and if if this kid really has the intellect that I think he has, I think he can get scholarships. They're going to be knocking at the door trying to get him to show up. If he can go for free, that's fine. But that isn't what she asked. We can afford to pay.
Starting point is 00:18:13 Is it really worth $250,000 rent? No, it's not worth a quarter of a million dollars. No, it's not. No. But is he smart enough that he's going to be just fine and maybe could be an economist and love what he does? Sure. But I wouldn't pay a quarter million dollars for the pleasure of it yeah and um it's
Starting point is 00:18:29 a um but just because your kid has an unusual proclivity for articulating his ideas at seven years old does not mean he actually knows what he's talking about. That's a good point. Or 17. And sometimes parents get all enamored with their kids' wishes. And that's just why you're supposed to be parents. And, you know, it's like, I don't know, one guy called me from Michigan. He said, my daughter told me she's going to this expensive school. What am I going to do?
Starting point is 00:19:01 And I said, well, you messed up a long time ago because my daughter didn't tell me stuff. I tell her stuff. That's how that works. So that's where we got confused. We got confused as to how this works. Got confused as to who's in charge here. By the way, it's my money. So, of course, she's trying to make a decision, you know, reasonably.
Starting point is 00:19:15 And I'm not picking on your kid. Your kid's obviously a special child in a lot of good ways. And that's all fine. But it does not mean he's wise. And so his opinion about the connections is something he heard from somebody or read with an internet article. This is The Ramsey Show. Thank you. In the lobby of Ramsey Solutions on the debt-free stage, Ashley's here. Hey, Ashley, how are you?
Starting point is 00:20:22 Hi, how are you? Welcome, welcome. Good to have you. So you're here to do a debt-free scream. Yeah. How much have you paid off? $68,808. Good for you.
Starting point is 00:20:31 And how long did that take? Two years. Good for you. And your range of income during that time? Started out about 65 and then got up to about 90, 92. Wow. What do you do for a living? I'm a teacher.
Starting point is 00:20:43 Good. Good. What do you teach? I teach ESL. English as a second 92. Wow. What do you do for a living? I'm a teacher. Good, good. What do you teach? I teach ESL. English as a second language. Excellent. What kind of debt was the 69,000? I just had two loans.
Starting point is 00:20:52 I had my car and then my student loans. How much was the student loan? So my car was only 10 and the rest of it was all student loans. So, my gosh, 59,000 in student loans. Yeah. All right. How long have you been out of school? 2012.
Starting point is 00:21:08 Okay. So, 10 years. Yeah. All right. What happened two years ago that lit you up, girl? So, I went on vacation, actually, with my sister, and we went to visit our aunt and uncle and cousins. And she was asking him about, like, financial advice. And I wasn't really paying
Starting point is 00:21:25 attention I um you know I thought I was fine that was normal and then um you were normal yeah um he threw out a bunch of different names and he's like you just have to choose a philosophy of what you want to do and how you're going to live with your money and then um you know research it and kind of get involved in it so he threw out one he threw out your name and um like i said i wasn't paying attention so a couple months later um i was actually walking my dog and pandora ad comes up and it's your podcast um yeah so i was like oh that's that's who he was talking about so i listened and i was terrified because i was
Starting point is 00:22:05 completely ignorant i didn't understand anything that you were saying so it's a different language to you yeah i wasn't doing a very good job explaining it but it was just because i had no idea of anything with financials i just you know paid i got my paycheck paid my debt and then went on to groceries and everything else some food yeah and then that was it there was nothing you know it was paycheck to paycheck kind of so um then i kept listening kept listening and i was learning more and more and then i decided that you know september comes um because i don't get a paycheck over the summer so um september comes and i decided i wanted to start the plan and i did september 9th and then I paid off my last
Starting point is 00:22:46 bill September 9th of this year wow exactly two years yes good for you yes so you went from not knowing what we were talking about to actually executing the plan for two years yes good for you I learned a lot good for you yeah you feel confident now yeah better yeah at least I know where to get the answers now so if I still have At least I know where to get the answers now. So if I still have a question, I know where to go. Okay. That's good. That's good.
Starting point is 00:23:09 And you chose a philosophy. I chose philosophy. Yes. You chose the right one. I guess the Pandora adds what did it. That's pretty cool. Yeah. If it wasn't for that, you may not get plugged into this stuff.
Starting point is 00:23:19 But you went from knowing nothing to then just doing this plan and paying it off. So you know more than you think you do, clearly. So it's funny because if you ask my family, they would say I was good with money. But I'm just naturally a saver. So I don't really spend a lot of money. But I just didn't know what to do with what I had. So I didn't have any investments. I didn't have anything.
Starting point is 00:23:40 So now that I'm on baby step three, I'm almost done. I'm working with my smart investor and getting that all set up. Wow. This is impressive. And you realize that it's 20% knowledge, 80% behavior. And that's why you only needed a little bit of knowledge. What you needed was the plan, then you needed to commit to the plan. And that's exactly what you did. You are very impressive. Very cool. Proud of you. Thank you. Who was your biggest cheerleader along the way?
Starting point is 00:24:07 My family. They didn't necessarily know what I was doing the Dave Ramsey plan in the beginning, but they knew that paying off the debt was important to me, and they were very, very supportive with it. That's very cool. Yeah. Very good. Now they know all about the Dave Ramsey plan.
Starting point is 00:24:22 I can't stop talking about it. I love it. That's good. Well, it's your uncle. He got you started, so there you go. plan. I love it. I can't stop talking about it. I love it. That's good. Well, it's your uncle. He got you started, so there you go. Yeah. That's fun. I'm proud of you.
Starting point is 00:24:29 Thank you. Very well done. Very, very well done. You're a hero. Good stuff. What do you tell people the key to getting out of debt is? You're successful. You paid off $69,000 in debt.
Starting point is 00:24:40 Congress can't even balance their budget. So the thing for me that was hard was because I only had the two debts. And I paid off my car relatively quickly. And then it was just one big loan. Just sticking through it. Yeah. Yuck. Stuck in a hole.
Starting point is 00:24:57 And I kind of stalled out a little bit in the middle just because I never had the snowball. Because it was just the one. Just a big old. Yeah. So accountability charts was huge for me. Like I downloaded like debt free charts and I would put it on my fridge and color it in. And then, you know, when I would get to certain levels, I made sure that I would celebrate that and would, you know, give myself some sort of reward for. Yeah.
Starting point is 00:25:20 You got to do something to get. Yeah. Human mind needs to see progress. Yeah. So that definitely. You got to gamify it. Yeah. This is brilliant. You've got it. something to get – the human mind needs to see progress. Yeah. So that definitely – You've got to gamify it. This is brilliant. You've got – it says detritus.
Starting point is 00:25:30 It's like Tetris, but it's a debt-free chart that you color in. That's fabulous. And that I actually started when – because that's only about like $35,000. That I started halfway through when I found like that I was really slowing down and was kind of losing the motivation. So that wasn't even the full amount. But still, I framed it. Yeah, absolutely. I would. You need to keep it because you changed your life. Not because necessarily you got rid of the debt,
Starting point is 00:25:52 but you just took control of your life. Yeah. Instead of just letting things happen to you, you started happening to them. Yeah, that was the big part. You're an impressive young woman. Very well done. Very, very well done.
Starting point is 00:26:02 Very cool. Very cool. So what was hard about this the getting stuck in the middle yeah and just before i had the chart and before i would kind of do the celebrations i would be like go go go um and then you know i was very gazelle intense but um you know having to have you know even if it was like going out to a restaurant you know when i hit a level on that chart or you know something, something like that. Ordering in, you know, something. You paid off $35,000 a year average.
Starting point is 00:26:30 Making $65,000. I mean, that's beans and rice. Well, I got up to about $92,000. And that's because of tutoring. I was tutoring every day. So how much did you make tutoring? Probably about $15,000. $1,000?
Starting point is 00:26:44 Yeah. So what were you making an hour? I do about $60,000 an hour. $1,000? Yeah. So what were you making an hour? I do about $60 an hour. $60 an hour. Yeah, New York. And that's low in New York. Yeah, that's a good deal. Great side job, though.
Starting point is 00:26:53 What are you tutoring? ESL? ESL, reading, social studies, whatever. Whatever they need. Elementary. Okay. Oh, anything in elementary. And so just line up.
Starting point is 00:27:02 And you can probably stay booked up, can't you? Yeah. In the middle of it, I was doing at least three or four clients a day. elementary and so just line up and you can probably stay booked up can't you yeah i would there is in the middle of it i was doing at least three or four clients a day so after school after school yeah working a full time and then doing that yeah yeah now it's all 60 bucks an hour man i know lawyers don't make that good for you they're not good lawyers clearly i'm kidding you're a great lawyer but yeah uh yeah that's amazing so that that's really that's what you do right there yeah so teachers number three most likely career to become a
Starting point is 00:27:35 millionaire engineer engineers who we found the most in our millionaire study accountant was second and teachers were third uh entrepreneurs and middle managers fourth and lawyers there they are fifth they made it barely teachers actually have a higher probability of becoming millionaires than lawyers yeah isn't that wild teachers have a head on their shoulders that's why lawyers are out spending themselves like crazy well there's that there's that but you will get there you don't have to hope if you just keep following this look at you have been look at you the budget is huge this plan like you have been. Look at you. The budget is huge. Like, even coming down here, everything that we did, just put it into every dollar and keep track. Because then you see, you know, where your money is going.
Starting point is 00:28:15 I had no idea. And there was so much. Once I did the budget, I was like, oh, wow, I actually have kind of margin here. Yeah. I mean, all of them dead. Where was it all going? Where was it all going? Yeah. I feel like you got a raise yeah pretty impressive we've got a copy of baby steps millionaires for you that's the next chapter in your story to become a baby steps millionaire
Starting point is 00:28:33 how ordinary people build extraordinary wealth and how you can too also a copy of total money makeover so you can disturb someone's life with it that you love and tell them this is what i did you can go do this and you can win too you're an impressive lady thank you so much for making a trip all the way from new york we appreciate you being here all right ashley from smithtown new york 69 000 paid off in two years making 65 bumping it up to 92 with the tutor action count it down let's hear a debt-free scream three two one i a debt-free scream. Three, two, one. I'm debt-free. Yeah! I love it!
Starting point is 00:29:15 Well done. Well done, kiddo. That's impressive. That is impressive. I got to tell you, man, you got a teacher out there that's tutoring things real. I need to go get tutoring, Dave. That's a good gig. It's not a bad gig at all this is the ramsey show Our scripture of the day, 2inthians 4 8 and 9 we are hard pressed on every side but not crushed perplexed but not in despair persecuted but not abandoned struck down but not destroyed
Starting point is 00:30:18 desmond tutu said hope is being able to see that there is light despite all the darkness. Talitha is with us in Nashville. Hi, Talitha. Welcome to the Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up in your world?
Starting point is 00:30:36 Well, we, my husband and I, are in our mid-30s. We are on saving for college and paying off the house early baby steps, but we've had an issue with our van door not wanting to open. So it's in the shop today. I don't know how much it's going to cost, but my question is, depending on the cost, would it be wiser to pull that money from our emergency savings, $1,000, or not put into our private retirement?
Starting point is 00:31:03 We do our matches with our companies, but then the extra to get up to 15% we do on our own. And I didn't know which bucket to pull that money from for this van fix that we need. I mean, this is an emergency, right? It is. So I'm going with the emergency fund. I'm not touching the retirement. Are you saying pull money out of the retirement?
Starting point is 00:31:26 No, she's saying don't put it in. Or just don't invest and use that money to pay for it. Right. So we would still do our employer stuff, but what we do privately at the end of the month to meet 15% instead of putting that in our private account, we use it to pay for the van. I would just continue investing as you guys are.
Starting point is 00:31:44 Do the full 15%. You've got the money in the emergency fund, so cash flow this, and then you're going to fill that emergency fund back up really quickly, and you can still be investing. You guys have the margin to do that, right? In baby steps four through six? Right, yeah. That's what I would do. So how much is in your emergency fund? We have $1,000 in our emergency emergency fund and in our three to six months that expenses we have about 20 000 you have two different accounts no supposed to be combined by now so now you have 21 000 in your emergency fund right okay and so what is the uh repair do you guess i know you don't know exactly yet but what are you thinking i'm hoping it's under a thousand
Starting point is 00:32:21 that would be real great that it would be awesome if it was only around $500. So we'll see. So let us know. But if the whole world comes to an end, it's $2,000 out of $20,000. Right, right. And you guys' household income is what? Combined income is about $140,000. Okay.
Starting point is 00:32:42 And so if your target is $20 and you use a thousand out of your 21 we could could just leave it alone at 20 right yeah okay or you could read if your target is if your target is 21 and you drop it down to 20 then you just budget you know whatever it takes it over a few months and build it back up to the 21 target, cash flow it out of your budget. But George is right. This is an emergency. This is why you have it.
Starting point is 00:33:17 An emergency fund turns an emergency into an inconvenience. And the very fact that you were asking this question says that it did what it was supposed to do because you're actually not panicking about this you just kind of have this intellectual decision about which way you're going to do it so it turned it into an inconvenience instead of an actual emergency and so as it should so good and you make 140 grand you got a 500 possible you need to start saving for a car too i don't know what this van is what the state of it i don't know what that situation is aaron is in indianapolis hey aaron what's up hi dave uh how are you doing great how can we help um so i have a little bit of an issue um so i purchased a home back in 2020
Starting point is 00:34:01 um after that my mom actually passed away from cancer um before that happened um i ended up going tax exempt on my bill or my uh my check so i'm sorry you went tax exempt yes so um i know that was an issue but i did that because i needed the extra money to help her out. You mean you quit taking taxes out of your check? You just didn't withhold anything? You had that option at your work? Yes.
Starting point is 00:34:34 Okay. That's weird. So I did that. Prior to doing that, I had some issues with taxes. So now you owe the IRS. Correct. How much? So I owe them 17 000 oh good lord
Starting point is 00:34:48 so the issue with that was is that i had back taxes my aunt used to do my taxes for me but she didn't do them for like a several years so i paid them back um before i bought my home but then everything happened with my mom so so now you're 17 the whole again right so i have a payment plan with them right now i pay them uh 250 a month but i also have other debt i've got about fifty thousand dollars outside or actually i'm sorry fifty thousand with the irs and what's your what's your income uh seventy thousand okay irs is at the top of the debt snowball. Gotcha. That's what I was wondering. Yeah, it's the top of the debt snowball because the penalties and interest are unbelievably expensive and they have almost unlimited power to screw up your life if you
Starting point is 00:35:36 miss a payment on this installment plan. And even if you don't miss a payment on the installment plan and they screw up because they're incompetent, they'll come clean out all your accounts and go, we messed up and they do that kind of stuff accidentally sometimes so no you want this out of your life as soon as possible and please tell me that after messing with these people two times you're never going to do this again absolutely not i have a daughter now and she is the why behind I'm trying to get out of debt. Do you have a tax pro you're working with? I'm sorry? Do you have a tax professional that you're working with? I do not. Okay, this may be another solution. Jump on
Starting point is 00:36:17 ramseysolutions.com and you can get connected with one of our trusted ELPs to help you walk through this so that you don't have this giant tax bill ever again. Never again set yourself up where you're under the thumb of these people. Anyone, for that matter, of kind of debt. But this is the worst possible kind of debt, and it goes to the top of your debt snowball. Portia's in Houston, Texas. Hey, Portia, welcome to the Ramsey Show. Thank you, Dave, my favorite person. Well, thank you. I am obsessed with your show. See, George, my favorite person. Well, thank you. I am obsessed with your show. See, George, I told you.
Starting point is 00:36:47 It hurt a little bit. I'm not going to lie, Portia, but I'm fine. George. I'm fine. I'll earn your love over time. No, George, you're one of my favorites. Sure. Okay, we'll get to your question.
Starting point is 00:36:58 Among the Ramsey personalities, George. Wow. All right, Portia, what you got? So this is what I have and basically i'm paying for being stupid in the past i've already beat myself up okay and i need to climb out of it so we don't have to okay yeah i made uh i'm 111 000 in debt 84 of that student loan 16 of that is my car. My car, I owe $17,961.71. I made, in the past, before COVID, I made $120,000 a year as a general manager at Fitness Connection. I ran multiple locations in Houston.
Starting point is 00:37:40 Now I'm taking a huge salary cut by $78,000. I only make $42,000 a year now. With the same company? No, with a different company. Were they shut down because of COVID on the gyms? They made major changes. I'll just say that. We made a lot of major changes.
Starting point is 00:37:58 So what are you doing now? I work at my school, at the University of Houston downtown. I'm in grad school, and I'm getting my MBA in finance and also investment management. Since being in my MBA program and learning from you, I've just learned so much about following the math, pretty much. And so now that I'm calculating everything i'm just kicking myself when are you finishing all this and going to get back into the 120 range um well actually i've been taking out grants and scholarships when are you finishing all of this and going to get back into the 120 income range all this mba and school stuff. You're right. Summer 2023, I'll be finished.
Starting point is 00:38:47 But there's a caveat. I've actually received corporate finance certifications and approaching an internship to get experience. Yeah, what is your income going to be there? I'll be in the six-figure range. Oh, good. Okay. So then you can start knocking this out, right?
Starting point is 00:39:11 So you don't suggest that I should start knocking it out now? You can start knocking it out now, but you can't knock it out now at 48 like you can knock it out when you're making 100. So I was trying to get your income up. That's where this conversation was going, and you're already ahead of me. You already got a plan, which I'm glad to hear. You're a sharp lady. You've got a lot of stuff going on in your brain.
Starting point is 00:39:30 Make sure your brain takes you to tactical answers that cause money to come into your wallet. Because you have a good brain, and you're using it, but it needs to cause money to come into your wallet and then pay these bills. That's how this works. George Campbell, good show. Thanks, man. Appreciate it. That's this hour of The Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace
Starting point is 00:39:51 and that's to walk daily with the Prince of Peace. This is James Child, producer of The Ramsey Show. Did you know The Ramsey Show is one of the most popular podcasts in the world? Subscribe or follow today wherever you listen to podcasts.

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