The Ramsey Show - App - Handling Money Alone is an Unfair Burden (Hour 2)

Episode Date: December 12, 2018

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Music Music 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. Joining me on the air this hour, at the bottom of the hour, will be our own Anthony O'Neill, Ramsey personality. And so if you've got questions about college agers or you are a college ager or high school ager, get questions for Anthony, he'll be here. But he'll also just be answering financial questions with me. So whatever you got for Anthony, you can load up the phones. The phone number is 888-825-5225.

Ilya starts off this hour in Portland, Oregon. Hi, Ilya. How are you? Hello, sir. How are you doing? Better than I deserve. What's up? Awesome.

Merry Christmas. Merry Christmas to you. Thank you, sir. Quick question. So we're a growing family. We've got three kids. I'm 31. My wife's 28.

We currently own a house out in southeast Portland, free and clear. The idea here is it's a two-bedroom house. It's getting a little small for us. Question with regards to we have some property here. We've got about a three-quarter acre lot, and we can partition it or subdivide it to make it buildable. Either we – our dilemma right now is either do we subdivide and build a house in the back or subdivide and sell both? We have about $100,000 saved up cash. And the question being is the current house would probably sell in the market right

around 400 right now. If we subdivided it off and made it small and had the lot in the back, probably a half acre lot, it would probably bring in about closer to about 550 between the lot and the house. Our kids are four, three, and one. So we're busy, and the kids need some space here coming up. So the question being is, what direction would you go if you were in our shoes? I would subdivide it and sell both. I would not sell the vacant lot after subdivision prior to selling the house, meaning I'd put them both up for sale, or I'd put the house up for sale with or without the second lot so that the buyer of the home can choose to include the lot. You see what I'm saying?

But if you sell off that second lot, it might be that you ran off a buyer that wanted a bigger lot or wanted a bigger situation. But they have to pay full price to get both. They have to pay the lot price plus the other. So what's the value of the lot after subdivision, do you think? Value of the lot would probably be between about $150,000 and $270,000. Okay. All right. And so if it's $150,000, then that sounds like the house is $350,000, right?

Around there, yes. After subdivision. And so put the house on the market for $350,000 or $500,000 with the lot. If it sells for $350,000, then put the lot up for sale. But do go through with the division process. Yeah. And then it sounds like you're going to make another $100,000 by doing that. Yes.

I mean, if it's something you can pull off, you know, subdividing stuff and dealing with planning commissions can be a complete pain in the butt. But if it's something you can walk through and you've got the time to do it and so forth, and you're going to spend a little bit of money on, you know, having it drawn up and all that kind of stuff and getting it approved by the city and the whole thing. But, yeah, it's $100,000. That's a pretty nice look. Look, extra, right? Yes, sir.

Yeah, let's go get the extra $100,000, and then let's completely move and go buy something or build something that you want. Yes. Okay? Awesome. Thank you, sir. Thanks for the call. Open phones at 888-825-5225. Samuel's in Miami. Hi. Awesome. Thank you, sir. Thanks for the call. Open phones at 888-825-5225.

Samuel's in Miami. Hi, Samuel. How are you? Hey, Dave. How are you? Your phone's breaking up. Try again. Hello?

Yes, sir. Okay. Better. How can I help? I'm not working. Not working. I'm going to put you on hold. We'll come back to you open phones at triple eight eight two five five two two five shane is in indianapolis hi shane how are you

hi dave i'm good how are you better than i deserve what's up awesome okay so i've been married for about 11 years um for the duration of that time i've done traveling construction i'm a welder pipe fitter. I was one of those guys who kind of handed my finances over to my wife for our entire marriage. So we recently decided to stop traveling and settle down. We've been in Indianapolis now for almost a year. Our finances got to the point to where I was starting to think I was going to have to go back on the road. We were really paycheck to paycheck pulling out of our savings just to make monthly bills. So in my digging, I kind of found, you know, once I started to get into our money, I found that my wife had taken out three credit cards without me knowing and racked up

about $20,000 in debt, along with, not handling our month-to-month very well, which is partially my fault. And I'm just curious. We're really wanting to start getting into FPU and start on the baby steps. I'm just nervous to give her any kind of control over our money, and I don't think that starting starting your plan with that mindset would be very productive and i didn't just didn't know if you had any advice for me our plan does not recommend that you give her control nor that she gives you control

that our plan is is that you work together with full transparency that we lay out a budget we both have a vote we both put it together and then we both agree to stick to it, and we start trying to hit some of our financial goals. And, you know, one of those is going to be cut up these stupid credit cards and do them. I am guessing that your wife did not spend this money frivolously, but that instead you dumped the whole job of handling money on her. She couldn't handle it and ran up debt trying to make ends meet.

Most of the debt on the credit cards, she got in really bad with multi-level marketing companies, like eight or nine of them, and most of the debt was incurred buying those products that she in turn was not able to sell. Right. But you know why she did that? You know why she did those multi-level things? Because she was desperate because the budget wasn't balancing. And so she was falling for the scam.

Yeah, I mean, she's definitely hook, line, and sinker. Yeah, she was completely alone. Yeah. Left to fend for herself. I agree. Yeah, she screwed up some stuff here, but I'm going to place the blame 50-50 here. You abandoned her, and she did the best she could do, which was not very good. So we've got to work together now.

And you carry the weight of going forward and the weight of building wealth and the weight of handling this household and the decision making together from this point forward. And that will keep you from feeling so her from feeling so desperate that she falls for crap that isn't going to work. And, you know, she was looking for a way out. She's trying to find people fall for get rich quick all the time when they're desperate. Yeah.

And that's what I mean, multi-level can be quasi-legitimate, but not for her and not in a situation like this. For her, in this situation, it was a scam because she just bought their stuff and never did anything with it, and it was just horrible. So you work together. You go through Financial Peace University together. You do your budget, your every dollar budget together. You make your decisions together. You go through Financial Peace University together. You do your budget, your every dollar budget together. You make your decisions together. And we're going to both accept the blame for the past, and we're going to put it in the rearview mirror,

and let's look out the windshield and go forward. You can do this. It's clean. It's grace. Let's do it. This is the Dave Ramsey Show. Can you believe this real estate market? Home shopping has become so competitive.

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They've helped thousands of listeners and team members here at my office win the bidding war without having to bust their budget. Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brinkwood, Tennessee 37027. Matthew is in Moorhead, Minnesota. Welcome to the Dave Ramsey Show, Matthew.

Hello, Dave. I appreciate your time today. Sure, what's up? Quick question for you. My wife and I got our statements yesterday from our universal life insurance policies. And we both had them for about 10 or 12 years. And when we look at the cash out value of them, our two cash out values come to about the exact amount that we owe on our home mortgage. And otherwise, we are debt-free except for the small home mortgage.

Just asking your advice, should we cash out those plans and pay off the mortgage? We lose about $3,000 between the two policies in penalty for doing that. Absolutely. If I do it, how long do I buy the term insurance for? Now, you buy term insurance first before you cancel any other policies, and then you cancel them and you pay off your home. And the term insurance is simply this. What does your wife need to live on in addition to the assets that you have if you were to pass away today?

And how does that change over the next many years? And that's how you judge this out. How old are you? I'm 43. Okay. And how much is in your 401K? Oh, the two of us together, $300,000. Okay.

And you get kids at home? Yep, three kids, 12, 9, and 6. Okay. 12, 10, and 6. Okay. So the 6-year-old 15 years from now will be 21. Okay. And so if you had a 15-year level term policy that replaced your income, which would be 10 to 12 times your income

in a month, then you'd be in good shape. Are you healthy? Yes. What is your personal income? Everybody's healthy, as a matter of fact. About 70. Okay. So, $700,000 to $900,000 on you.

What is her income? $50,000. Okay. So, $500,000 to $900,000 on you. What is her income? Okay. So $500,000 to $600,000 on her. And if you're both in good shape and healthy, that's not going to be that expensive for a 15-year level term. Now let's fast forward, okay? 15 years from today, you have no life insurance. Your $300,000 will have been added to and will be over a million. Your home will be paid off, and your kids will be grown and gone. If you die and she has a paid-off home, no kids to raise, and a million dollars in mutual funds without life insurance, she's just fine.

She's just fine. So by becoming debt-free and continuing to invest, you put yourself at that point in the position of being self-insured. Okay. And that's what we're working towards. I looked this morning out on Xander and got a quote for me for 20 years. It would be about $43 a month. Wow.

For 15 years, I think it dropped down to like $36 a month. Okay. Would it be fine just to go with the 20-year? Sure. Sure. It gives you a little extra pad. And, you know, you can always cancel it. You don't even have to keep it, right?

And so it gives you a little extra pad. No trouble with that at all. And that way the youngest is not 21 but 26 when this all expires. So exactly. That's the plan anyway. We want them to leave and come back with grandchildren. So, yeah, you're right on track, man. You're doing beautiful.

Really nice. Very well done. Open phones at 888-825-5225. Ramsey Personality, Anthony O'Neill joins us at the bottom of the hour to answer your questions. And as you guys know, he speaks in high schools and colleges all over America and churches as well. So whatever your question is, but particularly if you are a youngster or you've got a youngster, high school, college age, and you've got questions about that, you're going to have the man here to answer your questions. So you can join us here at the bottom of the hour. The phone number is 888-825-5225.

Jessie is in Ann Arbor, Michigan. Hi, Jessie. How are you? I'm good. How are you? Better than I deserve. What's up? We are looking to purchase a home in Florida.

My husband is active duty Air Force and we are scheduled to move there in August. So my question is what price range we should be looking at. We personally do not have any debt. I do own a business in Ohio that has, I owe about $5,000 left on that. So I guess we make around $100,000 a year. So I just, of course, what I want is really expensive. And what I think we can afford. So I just didn't know what you had recommended for price point. Okay, first thing is I want you to pay the $5,000 off.

Once you've done that, I want to make sure you have an emergency fund of three to six months of expenses. Once you've done that, then you're saving towards your down payment and you're ready to go. As far as the house price goes, the loan amount, not the price, but the loan amount that you should take out would be no more than a 15-year fixed-rate mortgage where the payment is no more than a 15-year fixed-rate mortgage where the payment is no more than a fourth of your take-home pay.

Okay. And so what's your take-home pay, right? $100,000, so $800,000, probably $6,000. So a house payment of no more than $1,500, give or take. I'm roughing that out. But, I mean, your take-home pay should be around $6,000, right? Okay, yeah. And not counting retirement withholding and that kind of stuff.

I'm talking about after taxes, okay, in terms of a definition of take-home pay. And based on that, a fourth of that, roughly $1,500 house payment on a 15-year fixed-rate mortgage, and then whatever down payment you've got, you add to that amount, which gives you your house price, and that sets you up to be able to do that. Now, here's the other thing. In the military, in the Air Force, thank you for your service, tell them thanks for your service.

They're going to move you again. Well, we are retiring. This is our last spot. okay so this we're we're not sure if we will stay but we want to eventually have a retirement home or a vacation home i guess so um that's why we were looking into purchase we've been renting for a long time yeah well i don't mind you purchasing i would not purchase with the idea that it becomes your second home before you have a first home um and so if you're going to move somewhere else after this you sell this and you buy your vacation home later um but but just buy a home if you want

that's fine the thing is it takes about two to five years of home ownership to break even on a house in a typical market okay so if you're going to break even on a house in a typical market. Oh, okay. So if you're going to turn around and sell the house in two years, there's a chance you're going to lose money on it. Gotcha. And that's something to think about here. That's why we tell military families a lot of times because they're, you know,

they two-year cycle, right? A lot of times it's better off to rent, which is what you've been doing. It's very wise because otherwise you'd be stuck with houses all over the freaking nation right every time you landed somewhere you'd be having a house you couldn't sell somewhere and that's you can get into all kinds of messes with that so um make sure your plan is to stay there a little while i want you to buy a house it sounds like you're ready i'm good with that i don't have a problem with it but let's do it in a way that's wise and thinking it all the way through and uh uh and that is you know we're going to be here more than two years because the house needs to go up in value and by the way you can check the activity level in the market is this an active vibrant dynamic, meaning can I sell this house when I get ready to sell it?

And you can do that by asking the real estate agent that you're working with. Check with one of our ELPs. They'll help you. What the DOM in this area is, the days on the market, the average days on the market. And so you've got this house over here. In this neighborhood, the average DOM is 27 days. Well, that means you can sell a house in less than a month. Boom, that's it.

Average day on the market over here is 380 days. That's more than a year. You don't buy a house there unless you're going to stay a long time because it's going to take you a year to unload the thing. It's not a dynamic market, not a market that's got activity. And so that's what we're looking for here. Hey, again, thank you for your service. Merry Christmas.

This is the Dave Ramsey Show. We'll be right back. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way.

Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice and I can tell you where to go. But it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. Joining me this half hour answering your questions, Ramsey Personality, the Anthony O'Neill, co-author of the best-selling book, The Graduate Survival Guide, Five Mistakes You Can't Afford to Make in College,

and producer of the Teen Entrepreneur Toolbox, Everything Your Teen Needs to start making money. And we were just looking at your schedule for the spring. You are going to be doing Smart Conference, Smart Money, five times, Smart Parents twice. There's a lot of smart here, Anthony. A whole lot of smart, and hopefully I'll be smart and ready for it myself. But, you know, I'm really looking forward to, you know, the Smart Parent event.

I'm looking forward to all of them, Dave, but, you know, just excited to launch, you know, I'm really looking forward to, you know, the Smart Parent event. I'm looking forward to all of them, Dave. But, you know, just excited to launch, you know, our new event for parents of all ages. If you have a kid, teenager, child, just really partner with Meg Meeker and just inspire some parents out there. So Anthony O'Neill, Meg Meeker doing our very first Smart Parent event. Anthony, from the teenage perspective perspective because he works with teens all the time and then in addition to that of course dr mcmaker the well america's mom yes for sure and the two of you are a pretty serious uh pretty serious combo right there yeah we've been doing it for like the last three years ashley dave just on smart conference just doing some vlogs

together jumping online together. It's just to have both in the building, the team perspective, the parents perspective, combining those two. We're going to be taking questions, Dave, on stage and answering parents' questions. It's going to be an amazing event. Yeah, those are in May, May 14th in Minneapolis, May 21st in Sacramento. We've got Smart Money events that you and Hogan are doing in Colorado Springs, Raleigh, North Carolina, Grand Rapids, Michigan. I'm doing that one. Yeah.

And Cincinnati, Ohio, and Atlanta, Georgia, and I'm doing that one with you. So that's cool. And of course, coming up just in 20 seconds here, I mean, January 12th is going to be here in about 20 seconds. It is. That's going to be in Dallas, the SMART conference. And that's all of us. Yeah.

We'll all be there. All the Ramsey personalities, plus Meg Meeker and plus Dr. Les Parrott and Dr. Henry Cloud and some of the best speakers and teachers on the planet. That is a long day and it is a deep day. It's a deep day, Dave. And I learn something every time we do this conference. I'm out there in the audience with you taking notes and just learning from all these speakers. So if I'm learning and growing, you guys, you will learn and grow with us.

So join us January 12th in Dallas, Texas. So that's a rundown of what's happening with Anthony. Let's check in and see what's happening with you guys and how we can help you this half hour. Shannon's in Richmond, Virginia. Hi, Shannon. Welcome to the Dave Ramsey Show show how can we help hi um i have a question about a rental house um and so we've been doing your program since this summer and we've paid off on 10 000 which we didn't even realize we had extra so we've just been really tickled to like do a budget and realize we can throw money at this debt and actually save at the same time. Way to go.

We did not know if we should sell a rental house and wipe out the debt. Okay. How much debt have you got left? $55,000. Okay. With the rate you're going, you'll be done with that pretty quick. That's what I was thinking, like 16 months. Do you like the rental house?

We were thinking about maybe using it for the kids' school. Do you like the rental house? We were thinking about maybe using it for the kids' school. Do you like the rental house? We've got a great tenant in there that's been there over 10 years. Do you like the rental house? No, probably not. You don't? Well, it's not. We have two, and I really do like the area of one better. We make more money off of that one than this one.

Okay. You wouldn't buy it again if you didn't own it. No. Then sell it. I think we haven't paid off to use for the kids' school when they get to be older. So sell it and do another one of those, but in an area you like, later after you're out of debt. Oh, okay. You can swing back around, but you don't like this one. another one of those but in an area you like later after you're out of debt oh okay you can swing back around but you don't like this one i know and it was my husband's it was like his

family home but i think he is in the same boat that um i think you've said before like if you had the cash would you purchase it and um he and I have talked about that. And we were thinking we probably wouldn't purchase that one. Yeah. Yeah. So, Shannon, this is Anthony. If I was in your shoes, honestly, it sounds like both of you all are not happy with the house. So if you're all on the same page, hey, we don't like it. And you're $55,000 from being debt free.

I'm going to sell the house, like Dave said, become debt free. I'm safe. And then down the road buy another house you can do that for your kids but right now i'm selling the house getting debt free and uh living living a good life emily's in fargo north dakota hi emily welcome to the dave ramsey show merry christmas merry christmas to you too so i am graduating college in two days and i have not touched my efas and i'm wondering what i should do with them i have about four thousand dollars and a 529 and a little under 15 in a coverdell what uh did you get scholarships i got basically full rides from my school okay you're allowed to withdraw and you

should have done it back during those years you may have to go back and file amended tax returns but you're allowed to withdraw the amount of your scholarships from the coverdale or the esa without any taxes on them okay and so you definitely got more than $19,000 worth of scholarships, didn't you? Yeah, somewhere in the neighborhood. Yeah, if you did a four-year school and you got a full free ride, you got more than $19,000 worth of scholarships. Yeah, Dave, let's talk about it. She's about to graduate debt-free, which is uncommon.

Wow. I mean, that is amazing. One thing I want to suggest to you, Emily, as well, though, when you do get the money out, do the right thing with the money. Now, enjoy a little bit of it because you've worked hard. But hey, start thinking towards the three to six months. Start thinking towards your future. But congratulations, Emily, to graduating with graduating college debt-free. Yeah. So you need to get in touch with a tax preparer and find out what steps you need to do to file properly.

And you may have to swing back through the admin office and pick up proof of these scholarships and their value for your taxes. But the concept is simple. The concept is that you're allowed to withdraw from a 529 or from an ESA the amount equal to your scholarship without any taxes. And it doesn't matter what the result of the scholarship is, whether it's academic, whether it's athletic, or whether it's just you signed up for the JCs or the Kiwanis Club gave you a scholarship. It doesn't matter. Scholarship amounts can be withdrawn.

And so you're not penalized for getting scholarships that way. The money comes out completely tax-free, which is amazing because that means all that growth was tax-free. I was just about to say that, Dave. That's exciting. Amazing is one word. That's exciting. So Emily's in good hands.

Yeah, very good stuff. Anthony O'Neill, Ramsey Personality, joins us this half hour. Rachel is with us in Tampa, Florida. Hey, Rachel, what's up? Hi, how are you? So I'm a co-signer on two Salome education loans for my 58-year-old brother. He became abruptly sick, actually, last Christmas,

winded up in the hospital, and it had been downhill. So we did ask for two forbearances, and now we are at a point where I've got to face this. So Sally Mae is offering me a payment of $209,000. A total of $22,000. Did I say that?

No, but that's okay. Go ahead. And they're offering me a payment of $291,000 for two years at 2%. So, one loan is 8%, the other loan is 9%. How's your brother's health? Huh? How's your brother's health? How's your brother's health? Huh? How's your brother's health? How's my brother's health?

Yes. Not good. I mean, it's not good. I mean, he's not, you know, he's not at the point of asking for disability, pondering about it. If he becomes permanently disabled, these student loans are forgiven. I know that. I looked it up.

If he passes away, they become forgiven. So I'm going to slow walk and pay as little as I can to get ready for this. Because if he's heading towards disability or worse, these loans are going to go away. So I'm going to slow walk it. Pay as little as you can. And let's see what happens here.

In the meantime, the problem is your credit's getting dinged up. That's the problem with co-signing. Yeah. That's why we recommend you do not co-sign for nothing. Ever. Yeah. It'll put you in this situation. I'm sorry you're there.

I'm sorry for what your brother's facing, kiddo. This is The Dave Ramsey Personality, Anthony O'Neill joins us this half hour. The phone number is 888-825-5225. Tom is with us in New York City. Hey, Tom, Merry Christmas to you. Merry Christmas, David. How are you today? Great.

How can we help? I have a high school senior. She just got accepted to her choice college, early decision. We're really proud of her. Cool. We've done a fairly good job of stocking away money for her college in a 529, but we're going to be a bit short. We project it's going to be about $100,000 over the four years, and we've got in the 529 just over $60,000. So my question is, do we cash flow the rest

either on the front end, back end, or just along the way? Tom, let me ask you this question. $100,000 to go to school sounds like she's going out of state or to a private college. Is she going? Is that the case? No, it's our premier in-state school. It's New Jersey, so everything's a little bit expensive up here in New Jersey. Okay, okay, okay.

And what does she want to major in? Marketing and communications. Okay. And what's your income? Household income is about two and a quarter. Oh, okay. So you can handle the 40 easily. Yeah.

Deficit. And so I'm probably handling it off the back. I'm probably going to use the 100 for the first few years that's in the 520 and use it up. And that gives you basically four years to save up $40,000, making $2.25. Yeah. Yeah. Yeah. I mean, my monthly contributions at this point aren't going to add up much,

so I should just sit inside and saving and sock it away. Yeah. Yeah? Yeah. Yeah. And let's use up, but let's burn through the 529 first, that 60, and knowing that we've got to have the target of having the other 40 sitting there by the time that happens. Yeah. Yeah. And then, Tom, as well, I agree with Dave doing it on the back end, but make sure on

the back end, on the front end, your daughter is actually looking up scholarships and grants while she's in school because it sounds like your daughter is a very smart young lady um so she can secure some scholarships have her check out my scotland raise.me my scotland.com and raise.me she'll find some great scholarships there to where that 40 may come down to 20 000 over the next two years while she's in school and that's a great my come down to zero yeah and um yeah because she's obviously bright i while she's in school, and that's a great, great bounce back. Might come down to zero. Yeah. And, yeah, because she's obviously bright. I mean, she's picked out a tough-to-get-in school and has gotten in. Yeah, yeah.

And that might really open up some pretty serious doors. The other thing I'd do is take a run at the school and see what they'll do. Come on, Dave. Yeah. Because, you know, yeah, you let her in, but now what are you paying? Yeah. Because they paying? Yeah. And because they do. They regularly do.

And they don't if you don't ask. So the worst answer you could possibly get on applying for scholarships or asking the school is no. They won't throw her out. They won't look down on her or anything like that. So, yeah, I'm going to poke around on that and see what she can get and try to cover the other 40. But you've definitely got three years to save up 40 grand, which is a no-brainer making the kind of money you're making. You're in good shape. So it sounds like you've done a great job.

Congratulations. And you know what, Dave? While I'm on the road, Dave, you, myself, and Hogan, one of the first questions I'm asked at Smart Money is, will a 529 or ESA really help me? $60,000 will definitely help you. So, America, I hope you're listening. This guy started early. He started investing into his child's future earlier on.

And, yes, it will help you. So invest as early as you can. Exactly. Exactly. It's a big deal. And, you know, school choice. And they picked out a fairly reasonable school. Got a great degree selection, marketing.

You're not getting a degree in left-handed puppetry, so there's a lot of good things going on in that call right there. Very well done, Tom. Good fathering. Alex is with us in Kansas City. Hey, Alex, welcome to the Dave Ramsey Show. Your question for Anthony O'Neill. Hello. Well, my first question was about moving out to be able to make it an easier commute to school. I'm a freshman in college right now, and I'm living at home. I have no debt, not taken out any loans, and to continue my degree program, I need to transfer and to still live at home and do

that. It'll be about an hour commute every day to school, and I'm still working pretty close to home. So just wondering, is that a good idea, or what options are the best for me? What are you making at your job? I'm making about $15,000. $15,000 what? $15,000. Oh, okay. A year, okay. A year, yeah.

Okay. Our commute is a long way. It is. Okay. I'm moving and getting a new job. Because you're going to be commuting back to the job if you don't quit the job. Yeah. So I'm going to get a new job at the location, which $15,000 is replaceable by delivering pizzas or driving Uber or whatever.

You can replace $15,000 doing that and live next to school, but get something super inexpensive. I mean, you're a college student. Act like it. Yeah. And get roommates and keep your costs down. What are you studying? I'm a mortuary science student. Wow, very cool.

That's unique. That's definitely unique. Alex, have you started looking for apartments around that way already? Yes, I have. Okay, and what are they going for? Will they be below your budget? Will you be able to afford it? They're going to be on the higher end.

It's Johnson County, Kansas, so it's pretty high. Okay. But budgeting correctly, I should be able to make it by. That's good. What I want you to do is go into the college campus, man. I want you to go on most college campuses have resources to where other college students are looking for roommates. So I want you to go there and ask them, are there anyone looking for roommates that you can go and join? And normally they'll have a room for right around in between three and six hundred dollars, depending on your state. But the highest we've seen is about six hundred. The lowest has been around three hundred.

But go to your campus to Resource Center and ask them, hey, are there any other college students looking for a roommate? Jasmine's in Oklahoma City. Hey, Jasmine, your question for Anthony O'Neill. Hi. So my question is I am graduating in two days, actually. Woo! Yeah, on Saturday, and I have a job coming up. I'll be making $42,000, but I have $34,000 in student loans,

and so I'm really determined to be debt-free. So I was wondering what you suggest I do in order to pay it off. Okay, let's stop a second. Yeah. You got a college degree, and you're making $22,000? No, $42,000. Oh, $42,000. Oh, I'm missing it.

Okay. I feel better already. What's your degree in? Human Development and Family Science. Okay. What are you you gonna be doing um i'm gonna be a case manager and i'm also getting my master's okay congratulations thank you so you have how much in student loan that 22 000 34 000 i got two i'm not getting any numbers right okay 34 and you make 42 and how are you paying for your master's? So my parents are actually going to pay for that for me. Cool.

Yeah, I got really lucky. Okay. Yeah, you have. Now, outside of your student loans, Jasmine, any other debt you have? I have a credit card, but there's like $935 on that. So, like, I don't have any other debt that I can't pay off out of pocket. Okay, cool. Well, Jasmine, you're walking into good, a good paying job. The average person is going to make about $37,000 graduating from college. So you're ahead of that game. Two things

I want you to do. Number one, get rid of the credit card. Trust me, learn from my experience, go to my YouTube and check that out. And then two, just line up all of your student loans from smallest to largest and start attacking those because you're about to walk into your master's debt free. But start living and get get a budget, you know, and live below your means. But start attacking these student loans right now. If you take 34 and say I'm going to do 17 a year out of 42. Yeah. In two years, you're debt free.

So really, by the time you get your master's, you're debt free. And then your income is going to go up and you're not going to debt so really by the time you get your master's yep you're debt-free and then your income is going to go up and you're not going to have any costs hey now we're headed towards building some wealth but you got to get rid of that credit card dave yeah i need to chop it up time for plastic surgery for you miss jasmine time to time to have a little placectomy going on and then get on a written, detailed budget like Anthony suggested here, make that money stretch, make it work. 17 a year is about $1,500 a month, and you can do that if you'll live like a college student instead of live like somebody that just got a new job.

There you go. Anthony O'Neill, thanks for stopping by. Dave, America, thank you. Ramsey Personality, he'll be with us at the Smart Conference January the 12th in Dallas. You should be, too. That's this hour of The Dave Ramsey Show. 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. Check it out.