The Ramsey Show - App - Her Mom Stole Her Identity! (Hour 1)

Episode Date: July 12, 2023

Ken Coleman & Rachel Cruze answer your questions and discuss:  "My fiancée's mom took out a credit card in her name and we didn't know what to do." Why couples really fight about money,  from the blog: 7 Steps to Stop Fighting Over Money How to determine if the degree you want is worth the time and money, from the blog: How to Choose a Career What to do when figuring out if you should pay off your house or student loans first. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/TRS Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is The Ramsey Show. We help you win in your life, specifically your money, your work, and your relationships. All three of those areas are connected. We want you winning in all of them. The phone number to jump in is 888-825-5225.

That's 888-825-5225. Ramsey Personalities co-piloting the ship today. I'm Ken Coleman, joined by the incomparable, the lovely, the gracious, graceful Rachel Cruz. Keep it going. Just keep it going, kid. Thank you. About three more. Next hour, I'll do about three more adjectives.

We'll just see if I can come up with new adjectives. Always good to be with you, friend. You as well. It is summertime. The three kiddos, lots of activities. How's it going? Oh, man. Good summer so far.

We got dance camp, one riding her bike to friends' houses. I mean, they're scattered. Isn't that fun? Literally today, yeah. But it's great. Well, it's good to have you in studio. It's always fun rachel's gonna help you on your money questions and i'm here to help on your work related questions so you know hey i'm in a toxic situation can i get out if i'm in the baby steps uh how do i make more money we want to help you

make more income so that you get through those baby steps faster and that's why i'm here as well with rachel so let's get this going. Trent joins us in Chicago, Illinois. Trent, how can we help? Hey, Mr. Coleman, Mrs. Cruz, how are you doing today? Good. I'm glad you called her Mrs. Cruz because I thought this was going to be Mr. Coleman and Rachel and I was going to feel like Mr. Rogers. The age gap is real. I was going to feel so old. Good to talk to you, Trent. How can we help? So I just got engaged last month. Oh! For the love of my life.

Congratulations. We are planning our wedding. I'm actually going out to see a venue today. But while getting ready to take this big step in my life, I decided to run a credit check on my fiancé, who doesn't have, or at least to her knowledge, didn't have any credit card, didn't have any debt. And I've been following the Ramsey plan for the past five, six years. So I have no debt. I've been able to cashflow college and everything like that. I'm on my senior year.

So I'm almost done. But in pulling her credit report, I found something a little bit disturbing. There was a credit card and her name that showed up as having a balance of $19,000. Whoa. And so obviously she was completely shocked by this and I was shocked by that. So when we went back and I confronted her family, come to find out her mom had opened that card back in 2019 and had, um, I guess the entire family on it from what she's been telling me, I haven't been able to,

um, to, uh, to corroborate that story with the rest of the family. But there she's saying that, that it's kind of like a family vacation card. And then she told me that she pays it off every month. And by tracking the,

uh, the stuff on credit karma, looking at the credit score and everything, the carryover balance, I know it's not true. So now I'm in a situation, I brought it up to her. She got super defensive, told me that I can't live without a credit score and the whole nine yards of I can't get a mortgage and all that. And I told her that, listen, I've saved up. I'm going to go through manual underwriting. I don't need a credit score. I don't need debt to live my life. And I'm going to be debt free for my entire life. And she's telling me that I need to find or go to counseling financially so that I can figure out how to take

care of her daughter since obviously I don't understand finances. So here's some counseling. Oh my gosh. We're your counselors. Is that it? I need to swing a Pepto-Bismol. My stomach has turned about four times already. My goodness. Okay. So Trent, there's two elements of this. The second element I'll just hit first because I think it's an easy one. You're not going to convince her otherwise otherwise so by you guys just going back and forth with your opinions you're not going to convince her she's not going to convince you and so you have to be able to go forward in this relationship with her daughter and obviously your fiance needs to be comfortable and secure enough and you guys to say yeah whatever my mom says because she's going to be saying this for the next 50 years possible. You know what I mean?

So like you're going to hear this all the time and just making sure that you and your fiance are on the same page because that's all that matters. Right. The extended family, whatever they choose to do or what they believe, that doesn't matter as much anymore because it is your family. It's now you guys that once you get married, like it's you guys. So making sure your fiance and you are on the same page and so not trying to sit there and convince your mother-in-law. So that was kind of one part. The end of your call is what you were speaking of were those arguments. And that's so frustrating. And I'm really sorry about that. Okay. And then the first one, which is obviously the one that majorly affects you and your fiancé, is, I mean, it's illegal.

She stole her identity is what she did. And I guess forged a signature she signed for her and everything? I mean, had to have to open the credit card. I would assume so. Yep. So what I would do is contact, she needs to remove the balance. She needs to open up, if she's living the credit card life, that $19,000 immediately needs to be put back in her court. And so that's what I would say, is that the next move is that, and I don't care how you do it,

when you do it, or not I care when, but like whatever avenue you choose, this $19,000 balance needs to be off of my fiance's name because she didn't do it. Does the mom see anything wrong with it, Trent? Because here's what's messed up too is there's a lot of, there's a trend going around, Ken, with people opening up cards in their kids' names and doing this and they pay bills

so that their child gets a good credit score when they turn 18. I mean,' names and doing this. And they pay bills so that their child gets a good credit score when they turn 18. I mean, there are parents doing this now. And the whole idea is, yeah, but if they get stuck with a balance, then it's the kid's responsibility then to pay it at 18, which is just absurd. So this is exactly what's happened,

but she did it in secret. So was she, like, does she under, does the mother, like, does she under, does the mother, like, does she take any ownership in it at all? Like to say, yeah, there's facts that there are $19,000 that you've not paid that is your bills, not your fiance's. No, ma'am, unfortunately she does not.

She thinks that she's helping her out by building her credit score and getting her started and giving her a, at least from the conversation that I've had with her, giving her a ability to just in case you fall into hard times when you first get married. What has your fiancé said or done to this point with her own mother? she's a little bit more of a non-confrontational type. And the mom has always kind of run her finances and she still stays at home with her parents. Hey, dude. Well, your fiance needs to close the account.

It's under her name. So she needs to go and just close the account completely. That's right. And if this mother keeps this uptrend, I'm like, I hate to say it this is like where where legality comes in I mean this is like this is legal stuff and I know yeah but you guys you don't have the money Trent necessarily to go and fight your mother-in-law in court no no but here's the deal Trent that I'm going to tell you this Rachel's right but this is a serious

conversation with your fiancee she has to close the account. She must confront this on some level. Or if I were you, my friend, I'm not saying break up with her, but I would hold off on the wedding until this stuff gets solved between your future wife. She's got to say, all right, mom, boundaries here. She's got to put up some boundaries. In fact, can we get her a copy of the book Boundaries by our dear friend, Dr. Henry Cloud? Hang on the line. I want you and your wife to read this together. This is a fantastic book that will really help you. And while we're at it, get them necessary endings while I'm giving away free books.

You need some help here, and you too need to be on the same page. It's dangerous, dangerous territory going forward. Wow. Thank you for the call. We're praying for you. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by my colleague, Rachel Cruz. This hour, the phone number for you to jump in is toll free. It is

888-825-5225. That's 888-825-5225. We'll take your questions related to your money, of course, and then we've got some job and work questions, income-related questions. We're here to help and taking on a topic that I don't think is new to anybody. If you're talking about money and you're thinking about money, it's money fights, Rachel, money fights. And I've been married 25 years. How long are you in Winston? How many years? I'll be 14 coming up. So combined, we've got a lot of money fights and I've been married 25 years you're how long you and Winston how many years I'll be 14 14 so combined we've got a lot of money fights that you and I represent in all

those years everybody has the money fights and a fascinating article you've got headline why do couples really fight about money what is going on here? What do we know? Yeah, so this is interesting. So this came out from psychologytoday.com and it says, yeah, talk to anyone about their relationships with their partners and you'll discover that every couple has disagreements. So in an attempt to identify the contents of financial issues, I said this name, I said the, I think the name wrong.

Oh, Pete's. Pete's, is that what you would say? Yeah, yeah, yeah, they did a study, two studies. Conducted, yep, two studies. Study one, they gathered descriptions of fights about money from posts on Reddit. God bless you. From this large pool of data, they were able to identify two overreaching themes when it came to money arguments, Ken. One was concerns about fairness.

Number two was perceived responsibilities and many of them identified these issues falling under these two overreaching themes they list some of more of the issues down below and then they did a second study where they gathered data a financial conflict from couples in a committed relationship and two overarching themes happened in study two concerns about fairness and responsibility re-emerged and additionally new con uh was mundane expenses the conflict of that which was related to disagreements about minor purchases such as how much money you should spend on a birthday party oh 100 or yeah who can pay for uh yeah related expenses so car really yeah no car related expenses so here's the thing i identify with that one because we joked about this i think last time we were on the air i get a little

irritated at stacy spending money on like little gifts um and she's being responsible i am a giver but women just find reasons to buy gifts you know and so i remember early on now it's not a big deal i'm talking early on when we were really trying to figure all this out I'm talking early in marriage yes listen I said I've been married 25 years I've long since learned to let that go or I wouldn't be married this long okay so this was a long time ago but I do remember that like little things like well we're spending this much on this little party or right there's another one that got us when the kids were little they get invited to birthday parties you're in the thick of this now. Oh, man.

Are your three getting in? At least the two girls are getting invited to birthday parties all the time. Consistently. I'm going to venture to say that both your girls get invited to five to ten parties a year minimum. Sure. True story? Yes.

That adds up. Oh, yeah. Oh, yeah. That's why I love Amazon because you can get really cheap gifts. And you have some good content on this on instagram at rachel cruz i know because you could easily spend you know for these toys that these kids want they ridiculous 50 bucks easy so i'm like no we're gonna lower that okay so here's what's interesting about what they found though ken the first study concerns

about fairness and perceived responsibility i think tell me if i'm being naive if you can if you had all of your money together as a married couple like we talk about there's not technically fairness because you're seeing it all together right it doesn't matter who brings in the income the amount of money that hits our account is ours that's right and then perceived responsibility we're all responsible for all the bills together because we're one. It's actually perceived irresponsibility. And so if you look at that, so what they're saying is you're being irresponsible with debt. You're being irresponsible in planning.

These were the things that came up that created conflict. So they were perceiving that their spouse was irresponsible in the areas of impulses, of course, gambling, broken promises. And then under fairness, I pointed this one out, terms of arrangement, such as should we combine finances? And we talked about that a lot. You know, if you look at another one under fairness, contributions, you know, who's paying these expenses?

And it's like that all goes away if you do what Ramsey Solutions and what we believe, which is we're all on the same team. It's not your money, it's our money. Yes, yes. So pretty interesting there. Okay, but perceived, why does it say perceived responsibilities up here? Or, yeah, anyways. Well, are you responsible or irresponsible?

So what I'm seeing is the findings were- So not just specifically about what bills you're responsible for. That's right. It's more about are you responsible or irresponsible as it relates to debt, budgeting. But here's the point. The reason I point that out is because a lot of tension there when one of them, this comes back to what our basic teaching is.

We begin to move people through Financial Peace University is the nerd or the spender. And so the idea is there can be tension there because the nerd, the natural saver, thinks that you're being irresponsible. And you go, slow your roll. I'm not irresponsible. I'm just trying to live life and have fun. Enjoy. Yep. Yep.

100%. 100%. Well, what's interesting, too, about that is I'm like, even the nerd could actually be the spender. And, like, that's mom and dad. Dad is the nerd, but he's way the spender. My mom is a little bit more of the free spirit, doesn't care the budget but she's the saver so you combine all these this twisting of everything and it's all braided together there in marriage and having to figure it out so yeah i mean but this is a big thing you guys because under all of that is budgeting impulse spending gambling broken promises planning debt so all of that for the most part overarching

can't i hate to say fixed because i know it's just never quote-unquote fixed but it can be this level that yeah we actually are way more on the same team when you communicate you sit down and you talk about it so all of that it's just fascinating and then uh yep all of the mundane expenses which is uh which i tend to spend more money on. That's where ours are coming in. But it's really, you nailed it there. I mean, that's what the study finds. That's where the tension lies.

And so to the extent that you can go, all right, so responsibility, irresponsibility, what I'm feeling, this is a conversation to go, I feel this because this is the way I'm wired with money. Know Yourself, Know Your Money, a fabulous book that you wrote, really does help unpack stuff like this to know, wait a second, how I perceive money may be very different than how my spouse perceives money, but that's important to understand because that's where tension arises. A hundred percent. And going into those conversations, you guys, with, this is one thing I feel like I've just learned over and over it's humility like I feel like I know what's right and I feel like I know what's good but what if I don't know everything

and same with the spouse like if you both come in and say yeah I I feel like I can learn so I want to learn I want to hear what you have to say and you both come in like that like that's a totally different emotional take than I'm coming in with what I want, what I know is right. It's like these absolutes that I think really get us in trouble, Ken. And there's probably so many other areas of marriage, but especially with money, like if you are the spender, go in with the saver, with your spouse and be like, what are they feeling? Because maybe they actually have wisdom going on within them that I can learn from and then savor same thing like go to your spender and say gosh what are areas of me that probably need control I have a level of scarcity

you know like these things that could be negative on your side what can you learn from your spouse but that humility piece I think putting the pride aside it's really good I wrote down I wrote down four words just looking at the study. Did they all have the same beginning letter? No, they don't. Oh, man, Ken. But it starts off that way. I wrote down same page, same account. I think the key to not having a bunch of big fights, same page. That means, what do we believe about debt? What do we believe about saving? Like, are we on the same page? Gambling. Right. That's right. Are we on the same page? It doesn't mean that we agree on everything, but it means we're on the same page. Stacey and I have realized this in parenting.

I know you and Winston are in the middle of this. You're learning your parenting styles. And as the kids get older, the conflict gets greater and your styles come out. And we have learned that, and I think this is true of money, Stacey and I aren't always on the same line. There's lots of lines on the page yep but we are on the same page and i think with money i think it's as complex as parenting yeah there's a lot of stress in parenting too and so i think if you're on the same page we may not always want to be on the exact same line the same word but we agree this is where we are on the same page and i think think that allows us to then go, okay, we do need to be on the same account.

I'm still flabbergasted, Rachel, by the amount of couples that may be on the same page but still have separate accounts. And that creates all kinds of weirdness. All the time. I don't know that you could truly be on the same page if you have separate accounts. If you're paying for separate bills to run one household, that's just weird to me. Yeah, it's weird. It doesn't help you get on the same page for goals, shared goals, a shared future. So really interesting stuff, Rachel. Hey, we're here to help you. Don't move. We got to do a few commercials,

but we're coming right back. You better be here when we get back. This is The Ramsey Show. Welcome back to The Ramsey Show, helping you win in your money, your work, and your relationships. I'm Ken Coleman. Rachel Cruz joins me. This hour, the phone number to jump in is 888-825-5225, 888-825-5225. Bradley is on the line in Hattiesburg, Mississippi.

Bradley, how can we help? Hey, how are you all doing today? We're having a blast. What's going on with you, sir? I had a quick question about going to PT school. Okay. I was crunching the numbers down and I was looking at how much it's going to cost and calling the schools in the state and out of state, it's going to run about 120 grand. Wait, you said, wait, real quick, Bradley, in-state and out-of-state? Because those should be two different numbers.

I looked at some out-of-state programs, and some of the other schools do have a little bit cheaper programs, but those are kind of far in between. But this is like, this is the, like, basically what you're saying, 120? Yes, ma'am, the average. Okay. And I asked about, you know, what's the average salary coming out of PT school? And they were telling me about $70,000 to $75,000. And so I was just kind of wondering, you know, if it's kind of worth going down that path,

if I'm going to possibly take on that amount of debt. I would like to do it debt-free, but looking at that amount of money, it's going to be hard to come up with that kind of money. Well, this is a tough, I get this question a lot, and it's tough to answer because you get to determine whether or not it's worth it. Now, it's not worth it to go into this kind of debt and to move into that price range to make that kind of money, if you don't have any kind of growth beyond 70 to 75, that's a long slog and it's going to be really hard. You think it's hard to come up with 120. It's really hard to pay it off once it's sitting on top of you. But is it worth it? It depends if that's what you really, really want to do. And I think you have to determine that first.

And if you determine that that's what I really, want to do then you will wait as long as it takes see I think most people when I if I were to go on the street with a camera crew Rachel and say hey are you willing to do what it takes to do something you love and they'd go absolutely and if I ask the question are you willing to wait as long as it takes people kind of go how long is that and I think that's the real tension here for you and And I know it seems like an insurmountable hill to climb. I'm going to try to walk you through that it's not. But the question is, do you really want to be into physical therapy or is this something you're just kind of

interested in and you're kicking the tires? So when I first started my undergraduate degree, this is what I kind of wanted to do at first. And then they kind of started changing it up. It went from like just a master's degree to a whole full-fledged doctorate degree. And so that kind of, when they did that transition, that kind of turned me off a little bit from it. But I've kind of gotten this far. I'm about to finish my master's degree here in December. In what? Kinesiology. Okay, nice. So let's pause for a second. What attracts you to being a physical therapist? What do you—

I've always liked human anatomy and physiology, specifically how to improve somebody's physiology and anatomy from an injury or cardiovascular event, anything like that. Okay. And what can you do with that master's in kinesiology? What fields are open to you that allows you to do that? It may not be exactly physical therapy, but you can still have an impact on someone's physical health and performance.

I think that's what you're drawn to. Am I right? And I'm trying to summarize that. No, that aligns. Okay, so here's the deal. What else can you do with that master's in kinesiology or maybe a little bit more certification process but not the full-blown $120,000 degree?

What's available to you? So in my undergraduate degree, I had an opportunity to work at a cardiovascular rehab clinic in a hospital. Great. And I can go that line of work but I was trying to find jobs online and calling around and it's not as plentiful as physical therapy it's okay but let me throw it to you this way let's say that I made a phone call today and I had a job for you in that role would you take it without looking, or would you go, nah, I think I'm going to stay the course and try to do PT?

The role in cardiac rehab? Yeah. I probably would, yes, sir. All right, so here's my point. It's worth waiting and looking and knocking on doors, connecting to get into work that allows you to, again, as I summarized it, help people in their physical health and performance and not have to go into debt and not have to save

and wait and wait and wait and wait for years. You're qualified right now to do what it is you want to do. You're just going to have to shake the tree a little bit and be patient and be persistent. That's not a fun tension. Bradley, how old are you? I'm 24. Okay.

So here's what I would say. Because of how you answered all of Ken's questions, it's not like it was this dream since I was five years old to go and be this, and now I'm here. It was kind of like, oh, this is, in general, what I enjoy, what I'm good at, what I like, and so I'm going to go in this direction. And then it suddenly got started to funnel down to PT. And now that you're funneling back, you're looking at other options. So what I would say is do what Ken said. I would not go for this. I would not go into any more school that I have to take out debt for. So I would just draw a very hard black and white line right there. And say, okay, now what are my options? You know, possibly exactly what you're just describing to Ken. Take some time, find that job.

And then Bradley, honestly, when you're 28 years old, you may say, man, I would love to go to PT school. And your job at that point, you'll be able to save some great cash and you'll be able to go back for your degree. I've known lots of people that have done that. So it's this idea that we have to cram all of our stuff, all of our schooling before we're 24, 25 years old. I think it's just crazy because you may not even know what you want to do. And that's not a bad

thing, but you know, this more general, you know, practitioner of what you want to do. So go that direction. And then if your passions start to turn in the next few years, then go back to school. You can save up for it. Yeah. What do you do now for a living and how much do you make? So I'm a graduate assistant. So I have my master's degree being paid for right now. Oh, awesome. I work for the university. That's great. And so I get a little bit over a grand each month, just enough to kind of cover the lights and food. But, I mean, are you doing anything in this lane of physical therapy or something like a trainer or anything like that? Not right now.

So my assistantship is all research-based. So the professor I work with, we work in a physiology lab, doing ECGs and putting people on treadmills and that kind of stuff. You know, both my boys play football, and I will tell you that they've both been through major injuries and both surgeries in the last season. Boy, I'm done with that. But I will tell you that they go to a great school,

and they're the head trainer, the athletic trainer, which is working for a local clinic, and then they're assigned to the school. They work hand-in-glove with their physical therapist because both boys are recovering from surgery. I'd look into that space as well and just see what does a ladder look like? Can you make 50? Can you make 60? I think getting an idea now while you're in school of what are all my opportunities that, to Rachel's point, might set me up to the point where I'm making good money and I'm saving. And if I want to pull the trigger on the PT later on, maybe someone pays for it because I'm a part of a larger

organization. You have to see. But I think what's happened is you have selected being a PT because it looks like the most attractive career step with more jobs available. But he answered that question like if that cardiac therapy job opened up today, he'd take it. So don't be discouraged because there's not as many of those jobs. But let's also look at all the different jobs that would fit that. And then, hey, how about going after someone? Listen, here's where I'm at. If a job opens, I'm ready. I'm willing.

And you make the connections. You hustle. And I'm going to give you a book that I wrote called The Proximity Principle. And it deep dives into how to turn connections into opportunities, getting around people in different fields that are all connected to the type of work you love to do. So hang on the line, Bradley. I want to give you that as my gift. And what it does is it's going to demystify how to find opportunities. And Bradley, I just applaud you on even asking the question, because there's a lot of people that we talk to on the show and that are out there that PT was always going to be their

next step. And regardless of price tag or not, they keep going. And then we talk to them when they're 28 and they're $140,000 in debt because they haven't been paying and interest is built. You know what I mean? It barely makes an ends meet. Yeah. And so it's just, you just saved yourself a lot of life, Bradley, I think,

by even just asking the question. So well done. I'm glad you called. I know no one wants to be a physical therapist and have two side hustles. Yes. That's what I know. And that's what you're going to do if you go into debt for a PT degree and then have to get in and pay your dues. So great question. Great discipline. I believe there's another path or two or three for you that would work, Bradley. So good on you, sir. And thank you for the call. All right. She's Rachel Cruz. I'm Ken Coleman. This is The Ramsey Show. More coming right up. Welcome back to The Ramsey Show, helping you win in your money, your work, and your relationships. I'm Ken Coleman, and Rachel Cruz joins me this hour.

Hey, if you're a new listener or viewer, first we want to say welcome. We're thrilled you're here. We're experiencing some tremendous growth, but we also understand that if you're new to all this language, we've got seven baby steps, and we talk about gazelle intensity and all kinds of things, and it's a lot. But it's actually a really simple process, and we've got a website option for you at RamseySolutions.com,

and there's a button there called Get Started, and that will allow you to kind of click, get in there, figure out where you are in your financial journey as we teach these seven baby steps to living like no one else so that later you can live and give like no one else. That's RamseySolutions.com. Click on Get Started, and we are here to help. Again, thank you for joining us. New York City, the Big Apple is where we go next. Michael is

there. Michael, how can we help? Yes. Hi. How are you? Oh, we're having a blast. What's going on? I need some help in terms of what is my next step in terms of paying stuff off or moving forward. It's a little bit of uncharted water for me, and I need a little bit of help. All right, lay it out for Rachel here. What's going on? Show us the financial picture. All right, financial picture. I have $200,000 in student loan debt.

Uh-oh, right? Everyone's worried. We've heard this before. Hey, Michael, you're normal. We hear all these. It's a lot, but we got you. So I hit you with the bad news first. But I will tell you, if you ask me today,

sorry you did that to yourself, I'm going to say no. So I'm an immigration attorney. That's what that $200,000 is for. The greatest job I have, I work for myself, and I absolutely love it. Good for you. My wife has just graduated with her nurse practitioner license, and she works in the operating room here in New York. Between the two of us, we make about $350,000 a year.

In terms of debt, we have no debt except for a mortgage of $120,000 at this point. In terms of savings right now, I'm able to save about a third of my wife's salary, which goes directly into 401ks, which right now we have about $150,000 cash right now. I have about $200,000. I could pay off this student loan debt if I wanted to. I don't know if there's a possibility. I know in the past, in terms of paying off debtors, you're sometimes able to wheel and deal, throw a one-time payment down, and maybe they take it. I just don't know whether it's beneficial to me. And on that $200,000, I'm making 4% interest in the bank, just kind of waiting, even though my 401k is making 10 or 15%. Really, I'm kind of in a holding pattern of what to do, how to go forward.

I know if, in fact, I was to die, even though I'm still in my 30s, the student loan debt will die with me. It's not something that my family is going to have to deal with. But I'm just a little bit unsure of where to go from here in terms of what to pay off, how to move forward. It's actually a good problem to have. Just looking for a little bit unsure of where to go from here in terms of what to pay off, how to move forward. It's actually a good problem to have. Just looking for a little advice. So, Michael, your question is, do I pay off the house or do I pay off the loans?

Is that what I'm hearing? Right. That's the general question, yes. Yeah. Well, the short answer is I would pay off the loans first. And is $200K you have saved, that's all the liquid cash you have okay okay because i would take some of that michael and keep it um for an emergency fund i would do you guys have kids you and your wife i have three kids three kids okay i would probably i always venture more on the conservative side of just having just cash in the bank so i would i would

have more like a six-month emergency fund so you and your wife look at your budget and say, hey, expenses-wise, what does it take to run our household per month? Multiply it by six, keep that amount to the side, and then I would write a check for majority of this money and go ahead and put it towards your student loans. And then you guys, I mean, I would pause 401ks, even if it's for two, three months, I would go through the hassle doing all that to pay off the student loan as quickly as possible. Because once that's paid off, all that consumer debt is done. And then you guys can turn right back around, be funding retirement, 15% of your income into retirement is what we recommend. And then I would be looking at your mortgage, which with your

income, Michael, I mean, you guys could be debt free completely so quickly. I mean, it's really encouraging looking at your numbers. So that's the progress I would do. And I'm walking you through what's called the baby steps. And it's our seven step plan that we really go by because it's the most efficient and effective way to build wealth we have found. And the most effective way, meaning that you're also going to probably keep your wealth because within that, you're making decisions in your life and in your money where you have a really strong foundation financially with this, having no debt and an emergency fund in place, but also you're starting to switch the way you're viewing money. You're starting to switch your habits

that will actually be able to handle the wealth that you're going to create later because you guys are doing incredible stuff, but that's the order I would do it. I would be paying off the loans as quickly as possible, the student loans, and then press play back on retirement, 15%, and then be paying off the house. Okay. Okay. In your opinion, do you think that a student loan provider

is at least open to the idea, or have you ever heard of someone negotiating? Private? No, it's through the government. Yeah. I doubt it. I doubt it. doubt it i hate to say medical usually i feel like you can negotiate i mean there's there's different like

yeah but hey michael it's not illegal for you to take a shot man ask yeah why not right if i tell them 130 000 i'll write you a check right now right and they could you know write off the rex of the 70 to keep it by emergency fund i love it i put a little extra new york accent on that too when you do it i like it i mean a new yorker tells me a one-time deal 130 000 let's do the bada bing bada boom i mean maybe it works you know and even if it doesn't i'd still i'd still pay off a chunk of this though michael if i were you but yeah ask why not i mean it's the government so i don't have a lot of hope in it but you know the only the only thing that was really holding me back was like i said

uh it's just something where it's something that if i passed away suddenly yeah but you're not in bad health michael are you right so like the stats of you dying it's very low it's very low that reasoning is kind of weird I shouldn't pay it off because if I get hit by a bus tomorrow, I mean, you don't want to think about that, you know? And here's the deal. As Rachel said, you're totally free of this. I mean, this is a massive amount of money and to have amassed the amount of savings that you have to take a huge chunk out of this and pretty quickly pay it off. Really excited for you. Just to picture life on the other side of this. I think that's the visual for you. And Michael, I do wonder for you, because even just talking to you, you're a pretty logical guy. But what we have found too, Michael,

is that money, it's not just the math we look at, which we look at that a lot, but there's something physiological too that happens when you owe someone money and there's this level of freedom i think emotionally spiritually that even your body is going to get out of this like self-protection mode that it even is when you owe someone money when someone has their name on your life that you have to owe regardless of how people you know factor their way out of it through the math and all the things, there is still something to be said about holding that. And so for you, Michael, I would be so curious with you and your wife, if you guys just go crazy and you pay this off,

the weight that is lifted that you're carrying that you may not even realize you're carrying. Right. I'm just curious. What is your home worth? Half a million. Dude, you're going to, you're going to be debt-free and have a half a million dollar house paid off. That's what you, what Rachel's talking about. What's that going to feel like? And I think you got to catch that vision that she's given to you there. And it's a no brainer. So you're ready to do it. It feels

like you're still chewing on this a little bit. We told you what we would do, but it's your call. What are you going to do, Michael? I got to know call what are you gonna do michael i gotta know what are you gonna do i'm gonna think about it a little bit more i'm gonna digest what you told me well wait a second what were you thinking about doing before you called us which way were you gonna go i think i know can you believe it it's actually neither it's actually neither you were gonna sit on the cash no i'm not gonna sit on it. I really didn't explain the whole story to you. So I worked for someone for six years as an immigration associate for someone. And in the last year, I've went out on my own and I've really just kind of

blew the roof off of Long Island immigration. And what I was thinking about doing is reinvesting it into myself and reinvesting it into a business. Well, I would say if you pay off those student loans, that is a massive investment in yourself and remove that weight. But I hope you do that. I hope you see that that's the best play. But either way, excited for you and your future. You'll figure this out one way or the other.

I hope you get rid of that debt. It's going to change your life. Rachel Cruz, great hour. Thank you, my friend, for hanging out. I want to thank our team, Austin, and the crew behind the glass that keep us on the air. And we want to thank you, America. This is your show. This is The Ramsey Show. Hey, it's Rachel Cruz. If you like what you heard in this episode and want to know more about getting started

on the Ramsey baby steps, go to ramsaysolutions.com and click the get started button. We'll help you figure out the best next step for you based on your specific situation. That's ramsaysolutions.com and click get started.