The Ramsey Show - App - Here’s How You Determine Your Financial Priorities (Hour 3)

Episode Date: November 4, 2021

Debt, Career, Savings As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Thank you very much. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality, number one best-selling author of the book The Proximity Principle, host of The Ken Coleman Show, where he talks about careers and jobs and getting work you love and work that matters. He is my co-host today as we take your calls. The phone number 888-825-5225.

That's 888-825-5225. Michael's with us in Wisconsin. Hi, Michael. How are you? Good, Dave. Hi, Ken. Just got a quick question for you here. I recently, about a year ago, left my job and had a pension there through the sponsor system. It's a 401A plan. There's about $60,000 in it. I know you always recommend to roll that over when you leave or take it to a personal investment. I'm wondering if I should do that. In leaving that plan, you lose the employer contribution, which is about 50%.

So that would be $30,000. I'm wondering what my best move is, if I let it sit and access it when I'm able to and I'd be eligible to, which is age 50, or I'm 30 years old right now, or do I take that out and take a portion of the loss and invest it? The 401k plan at your old company does not vest your matching until you're 50 it's a 401e i know but that just means after tax is all that means uh yeah they don't vest your Uh, true. Yes, correct. That's asinine. Okay. Um, and it's how much money? $60,000.

That's the match portion. Uh, $30,000 is mine. $30,000 is their match. Okay. And how, what's it invested in? It's distributed. Oh, geez, I don't even know what the breakdown is. They are pretty limited on what they give you. You don't get to choose your investments in that plan. Yeah, and how old are you?

30. You don't get to choose the investments in your plan? Negative. It's a pension plan to the state. Okay, here's what's running through my head, and then you can decide what you want to do. You're how old now again? 30. 30. 30 years old. Okay. So for 20 years, you either are going to have $30,000, $60,000, underperforming, sucking. $60,000. Or you're going to have $30,000 performing well in good mutual funds. I figured that was the route you were going to go. And I don't know which one's going to end up with more money is the wait a minute

wait a minute yes i do the 30 000 will double if you've got it invested at 10 percent if you're if your mutual funds perform at 10 which which they should, it will double about every seven years. And so it will double three times in 20 years, 21 years. So it will go from 30 to 60 to, okay, I can do this. Wait a minute. It will go from 30 to 60 to 120 to 240, okay? That will be your $30,000. It will double three times.

One, two, three times. That's it. Okay. Now, 60, let's say it's making, I don't know. Do you have any guess what the stupid thing's making? I would guess. I've looked at the averages over the course of the last, say, 40 years. Put it all together.

I think I came out with like a 7% or 8% average. Okay, at 7%, it'll double every 10 years. Okay. So 60 would be 120, would be 240. It's exactly the same. Yeah. Okay. Your 30 will grow to as much as that 60 will grow if you invest it at 10% or greater versus

7% in a 20-year period of time. I actually could do that. That's crazy. I did it. But, okay, but the, yeah, that, so, and here's the other thing. There is a, there's a philosophical, spiritual thing that happens when you take control of your money and someone else is not take control of your money, and someone else is not in control of it.

In other words, you've kind of got it tucked over here in this underperforming, crappy thing, or you take it out, and you say, I'm responsible. My destiny is in my hands. And there's something that happens in that inside of you, assuming you take control and you take your destiny in your own hands, then you will end up with more. And so when there's a tie, I always take my money and figure I'm my best shot. Not the freaking state government. I'm my best shot. In the freaking state government. I'm my best shot. And in case of a tie. Now, if this had been double leaving it with the state,

I would have held my nose and left it there. But it's going to come out about the same, plus or minus the I'm in control of my own destiny factor. And Ken, we see that in lots of areas of people's lives, that when you take personal responsibility when you take control when you say this is up to if it's to be it's up to me thing and you you shoulder the wheel you put your shoulder to the wheel we see a change in their careers we see a change in their marriages we see a change in their money yeah engagement is what

the real what's going on there is now I'm engaged. If it's just sitting there and the government's handling money, well, everything's passive. If I'm handling it, it's not passive anymore. It's active. And that is an engagement issue. And I absolutely couldn't agree more. When someone takes responsibility for their health, their marriage, their parenting, and you become very engaged, well, all of a sudden, you feel the pain, you feel the victories.

Everything has got so much more personal involvement in it, and there's no question that's going to win for him because now he's looking at that. He's got his dashboard set up with the SmartVestor Pro, and he's watching that thing grow. He's also adding to that $30,000 as well. So, yeah, I think that's the right move. Well, you're going to be doing that in your other accounts and your other retirement things. But that $30,000 versus that $60,000. Yeah.

They both should end up. And I don't trust the government, Dave. I'll be honest. I don't know it like you know it, but I don't know. Could the state screw that up? Oh, yeah, they could screw it up. Okay. So that, to me, is another reason.

Look at the finances of a state. Exactly. How badly, like, I mean, if you're in Illinois, be very afraid, you know? Okay, so that to me is even another reason. Look at the finances of a state. Exactly. How badly, like, I mean, if you're in Illinois, be very afraid. You know? Yeah, that's even more reason to take the 30 out. Math eludes them, you know? So, yeah, it's, I mean, you've got states like the state of Tennessee is very well run.

Right. You know, in terms of the business aspects of the state. So, you know, you don't have to sit and tremble about it. But, I mean, there's some of these states pension funds are in trouble. Oh. Because the state is just, they just suck. Yeah. At running these things.

So, yeah, that's another factor in there. I wasn't even thinking about the failure side of it. I was more thinking about the upside. Yeah. But, yeah, this idea, that's a good word, engagement. If something happens, people that engage an area of their life are 100% of the time more successful in that area than people who wait on someone else to fix that area of their life. That's what it comes down to. 100% of the time.

Now get with the SmartVestor Pro and roll that puppy over. This is the Ramsey Show. You've got a lot on your plate. A job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your healthcare. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey Trusted Provider.

Ken Coleman, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Well, I've heard all the excuses that people have for putting off making a will. I'm busy. It's confusing. It's a downer. It's morbid. It's expensive. If I do a will, I might die. That's my favorite yeah you're gonna die

okay 100 mortality rate in the human race okay we've done detailed research you're gonna die you need a will in fact ramsey solutions research team found that% of parents don't have a will. Come on, guys. That's not good. It's too important. You need a will to protect your family. Stop putting it off. Get it done. Start with our free will preparation checklist.

This guide helps you think through the seven important areas like naming of guardians, beneficiaries, plus all the little things you hadn't thought of. And once you've gone over the checklist, setting up your actual will will only take you about 10 or 15 minutes. Get the guide, the free will preparation checklist by texting WILL to 33-789. And you can start the morbid, uncomfortable conversation. Text WILL to 33-789. Give your family peace of mind by getting yourself a will.

Mine's so stinking detailed, Ken. We have a meeting once a year to go over all the estate plan with the family and the leadership team here. I call it the Monty Python meeting because we all discuss Dave's death, and I always go, I'm feeling much better. It's just a flesh wound. I don't know how you do that. When you tell us that's kind of that has to be weird it's creepy as crud do you like multiple times in the meeting remind everybody that you're still in the room other people do

because it's awkward for them so like Mark Floyd our CFO goes I don't like talking about this and he says this every year for eight years now I don't like talking about you dying and you dying in front of you and I'm like well you're going to talk about me behind my back about dying? I mean, come on. What is the deal? It's funny. But it is a matter of diligence to get these things in place. Because if you don't, it costs your family so much heartache. Brandon is with us.

Brandon's in Tampa, Florida. Hey, Brandon, how are you? Hey, Dave. How are you doing today? Better than I deserve. What's up? So I am contemplating switching jobs, and I wanted to give you a little detail and see if you can help me to make an informed decision. Okay.

So I've worked for the same company for 15 years. I love my company, and I think what I like best about my job is I work from home. I have really flexible hours. So one of my kids has special needs. If he's meeting with a therapist, I can take a quick break from work and I can meet with a therapist too. Or if they have a function going on at school, I can meet them at school and I'm home every night for dinner. And then I can log back into work if I need to after they're in bed so it kind of lets me be super dad uh while you know my kids still like me you know until they become teenagers

right okay so the uh so why are you leaving why are you leaving nirvana uh so unless i move to another city they won't let me apply for other jobs and they're going to lay me off in the next three months to three years. Oh, okay. So this is then I kind of Nirvana's in there. You got kicked out of the garden. Okay. I will. It's just kind of, when do I pull off the bandaid? Right. So I found another job that would actually pay me more and it would have a lot of job security it'd be a great job uh but it's probably two to two and a half hour commute a day and it would be a lot of hours and i wouldn't be home or able to do any of this stuff with my kids yeah that's it no we're not doing you have to move is what you have to do yeah

we're not doing a two and a half hour commute that's that's just asinine yeah you would last more than three months your heart your heart's already telling you that's a bad idea that's just your brain because you've got a little bit of fear a little bit of pressure so that's not an option unless you move and then you said i'm I'm not willing to move. Why are you not willing to move? My kids are in a great school district, love my house, love my neighborhood. I have a rental on the same street. My in-laws live on the same street. You haven't found the new job yet. Yeah, you got to keep looking. There's a good list of reasons why we say no to that. So I started looking for that other job that I have in 2018 and I was getting ready to start that job and then it went on hold during the pandemic and they're trying to get me to come back

now. My wife and I kind of want to just wait until we get laid off. Just so you know, I'm on baby step seven. I have a fully funded emergency fund and a large chunk of money that's in our checking account because we're getting ready to buy a car. So financially, I'm in good shape where if I got laid off, it wouldn't be the end of the world. But if and when I went to look for another job, it's very likely that I'd take a big pay cut because the technology that I'm working on is very proprietary. So not a lot of other places need it. So I'd take a big pay cut because the technology that I'm working on is very proprietary. So not a lot of other places need it. So I'd have to kind of start at the ground floor.

What's the place two and a half hours away with a raise? Do they have the same technology? They do. It's kind of a government job. So it's not just that it's two and a half hours away. It's that it's a long commute with traffic. I got that part. I'm asking what was the job.

Is it the same technology? It's not, but they're willing to take me because of the security clearance. All right, so what would you say is your type of work? Are you a programmer? Are you in cybersecurity? Give me a job title so I can have an idea of what we're looking at here. Senior systems engineer. One thing that's kind of funky is my

current company, because I can't apply for jobs. They just move me wherever they need me. So right now, I'm not working on technology I would apply to a job for, because I've been doing it since February. Okay, here's the deal. In Tampa, Florida, a great job market, good size area, the systems engineer, what you have to start doing right now is start finding other different types of opportunities that allow you to take your experience and your skill set. Those are two different things. But I think you've got a wonderful future.

You know, the idea of waiting to be laid off, that's just not how I'm wired. But because you're in Baby Step 7 and you've got a whole different perspective on things, I'm not going to say that's not a good idea. You certainly can do it. It's not. But I don't like it. Okay, good. I don't like it.

I think that that is too passive. Brandon, you're in denial. Yeah. You're in denial that this nirvana is going away. It's going away and and all you have said all you have set up are these impossible freaking scenarios that are fatalistic all around you where your life is not going to continue unless you keep this job that's right and that's a bunch of bs this you you have a skill set that is totally marketable within 30 minutes of your house and you need to go look for

a new position and that what has happened dave those excuses those are all excuses those scenarios become excuses for him because he doesn't want to leave the nirvana because he doesn't want to leave the i'm sorry but nirvana's ending they're kicking you out of that garden of eden yeah you don't get to live there anymore yeah and so it's they've told you and and the instability of that is is is eroding you guys it's it's eating at you guys. Yeah. And that's why you went and considered something two and a half hours.

Two and a half hours? No! Yeah. And by the way. You just freaking moved to Orlando. Oh, my God. And you know what? You don't have to trade off being a super dad and being there for your kids if your scenario changes.

That, again, is a false choice. It's a false narrative and we do this we create all these reasons why we should sit tight and in this situation he's so marketable the opportunities for him are endless as a systems engineer i mean technology that's the place to be and because he can go just about anywhere yeah you're You're going to be fine, son. You're going to be fine. But, you know, I'm just calling you on your stuff here. You know, you need to go look for something that's not two and a half hours away. And if it's a little bit of a pay cut, so what? And, you know, I'm not going to sit and wait on this to come hit me in the back of the head.

We know it's coming. And so, you know, go land you something and get yourself get yourself a projected future that feels good again you don't have a good feeling about your projected future nothing in your future that you laid out sounded fun nothing did and that's just not accurate there's a way to put together a life that you love here again and um amen Appreciate you. Glad you're at Baby Step 7. Proud of you for doing that. It gives you some options, gives you some comfort. Don't wallow in the comfort.

This is the Ramsey Show. We'll be right back. in the lobby of ramsey solutions on the debt-free stage brad and jamie are with us hey guys how are you doing great how you did better than we deserve. Good to have you guys. How much debt have you guys paid off? $196,302 in 27 months. Love it. Good for you. Where do you guys live? Memphis. North of Memphis.

Cool. Okay. And your range of income during that 27 months? We started at $137,000, ended at $166,000. Good. What do you all do for a living? We both work in the VA. Okay. Cool. Well, it's great to have you guys. What kind of debt was the $166,000. Good. What do you all do for a living? We both work in the VA. Okay, cool.

Well, it's great to have you guys. What kind of debt was the $196,000? Well, we were kind of normal, Dave. We had a bit of everything. We had lawnmowers for my landscaping business. We had TSP loan. We had credit cards, car, RV all of it wow yes two hundred thousand dollars worth yes normal yes normal sucks unfortunately yeah wow so what in the world happened that lit you guys up i mean you must have sold a bunch of stuff to do that in 27 months

uh yes and no um uh what got us started we actually heard about you probably 15 years ago. And we actually got debt-free while we were in the Air Force. And we never got past Baby Step 2. We did that. My behavior didn't change. I wanted to live and enjoy the money right now. I didn't want to have to be on a budget. $200,000 in debt later.

I used the budget the wrong way. Jamie gave me the budget many years ago, and I started using it to say, okay, this is how much is left at the end of the month, so I can afford that payment. And when it got down to where it was less than $100 or $200, I was like, okay, we can't afford that next thing. And it got to where we were making too much money to be struggling like that. We grew up, both of us grew up where we didn't have much and God blessed us with such a large income and we were squandering it. We were not being good stewards. And it started to really hit me hard that God had blessed us with all this income and we weren't living right.

And we had gone to get some tires for my motorcycle. On that was also a motorcycle. And my son needed a pair of shoes. And when we were going down there, we said, we have too much debt. We're not going to use this credit card. We're going down here and doing this in cash. And that was kind of the start of the journey. And when I couldn't afford in cash to buy him shoes, I snapped. I cracked. This is insane. I make this much money and I can't buy my son shoes.

And we got back from that trip. And about a week later, my coworker actually, he brought you up on YouTube. I was like, oh, I know who that is. And he started listening to it. And I just got intense. Like, I went crazy. I started listening to every single bit of every Ramsey solution, every other personality, and it got me fired up.

Uh-oh, Jamie. Uh-oh. I was in trouble. What did he do? He went into overdrive, completely gazelle intense. Did he bring you with him? He did. I tried. Struggling. Sometimes I just wanted to see the attitude change. drive to completely gazelle intense uh did he bring you with him he did i tried struggling sometimes i just wanted to see the attitude change i wanted to see the behavior change

and it took a while for me to warm up because i had seen him yeah we can afford this yes work on it we can do this and i was hesitant i'm like i'll support him but i was like i want to see it change i want the behavior change. And I knew there was a light at the end of the tunnel, but it was still so dark. So dark. So desperate. What all did you guys sell? We tried to sell my Subaru, and we did. We were able to downgrade my car.

I now have a 2010 Honda Civic. It's not bad. CR-V. Not bad. And it gets me. CRV. Not bad. And it gets me from point A to point B. I absolutely love my little roller skate, as we call it. And that was the biggest thing. Did you sell any of his toys, like his motorcycle?

No. No? Did you sell the camper? We tried twice. We tried twice to sell the camper. Twice. It stayed on the lot for 90 days. They didn't understand why I wouldn't sell.

And I just kind of chucked it up as, you know what? camper and it stayed on the lot for 90 days they didn't understand why i wouldn't sell and i just kind of chucked it up as you know what god wants me to just work hard and and take care of this thing but it was insane though once we were doing it god's way and we were i was living on the budget and sticking with it and godliness with contentment is great gain and i learned a whole new meaning of that verse and And that's become like, that's stayed in my head this whole time. It's like money just starts showing up everywhere. It took five years for my medical retirement

to show up for the Air Force. And it was three years prior to this, or three and a half years. And during this, shortly after we got this start, all of a sudden that showed up. Lump sum of money. Come in. I mean, I think there was like $13,000. And just things like that just kept happening.

Of course, COVID, we felt bad because it didn't hurt us. We ended up making all kinds of extra money. We got extra incentive pay because of that. I got a job because of it. She works with me now in IT. Oh, yeah? I was curious. How did you go from 137 to 166?

That's a good jump. That was mostly me. I was working at one position, and I've always wanted to be in IT. I was in IT for the military, and COVID happened, and there was special incentives, but it had to be temporary. So I left a permanent position for a temporary position in IT. And before the temporary position

became non-existent, there was a permanent that opened up and I applied and got accepted. Leap of faith. God bless us. That's so fun, you guys. How does it feel now that you're done? Unreal. Was it worth it?

Oh, yeah. Definitely. If there was some way that I could just drag somebody kicking a screen, but I know I can't. You've been trying to do that for 35 years now. But I tell everybody. I mean, you have no idea how much that is. It was like a noose around my neck, around our necks. The debt is horrible.

And the minute that we paid off the last debt, it was like that bondage just gone. What was the very first one you paid off, the little one? Actually, it was one of my mowers. It was a walk-behind 36-inch bull hydrostatic, nice mower that I got from my landscaping company. I paid that one and the next one off almost within the first two months when our taxes came in. Okay.

All right, so boom, boom. And then that got you going. Yes. Yes. Yeah. See a little progress, it helps. It got hard, though. It got real hard.

$196,000? I guess so. Well, we actually, we kind of topped off a lot higher than that because overtime. I, at one point, did 100 hours of overtime within a two-week period.

Whoa. And that about killed me. I bet. I said, God 100 hours of overtime within a two-week period. Whoa. And that about killed me. I bet. I said, God, let me see if I can do it. And there was people praying for me. And it was only by God's grace that I had the strength. Because I was at work 4 o'clock in the morning, left work at 8.30 at night, home by 9.30,

back up again at 3 o'clock in the morning to get back to work again. I want people to hear this. Because they just heard you describe how hard it was. What was the direct – I want people to hear this because they just heard you describe how hard it was. What was the direct benefit coming out of that two-week period? More than quadrupled my paycheck. Yeah. I mean, I was blessed with the fact that we just had blanket overtime because of COVID, because I was doing a big project upgrading our comm closets.

So let me tell you, there was a lot of comm closets in that hospital that have tears on the floor because it was – that's the reason why I wanted to come here and do this because I'm not very an open person. I don't like to be out in public a lot, but somebody else needed to hear this. Yeah. Because there were so many death-free screams that sent me into tears. I heard their numbers close to mine. I said, I can do this. And it was halfway through, and it was just painful, so painful, so tiring.

That's good. So proud of you guys. That's good stuff right there. So proud of you. So well done. Excellent, excellent job. You brought the kiddos. What are their names and ages?

This is Michaela. This is Elisha. All right. It's good to have all of you. We've got a copy of the Legacy Journey for you. That is definitely the next step in your process. You've changed your life now you change your legacy well done very well done and a copy of the total money makeover for you to give away

and get somebody else going on this so good stuff all right brad and jamie mckayla and elisha 196 000 paid off in 27 months two and a half half years, making $137,000 to $166,000. Did it, man. Game on. Overtime. Whatever it took. Knocked it out. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free! That's how it's done man I love it Very well done Very well done This is the Ramsey Show We'll see you next time. Our scripture of the day, Psalms 145, 16 and 17. You open your hand.

You satisfy the desire of every living thing. The Lord is righteous in all his ways and kind in his works. My friend, Truett Cathy, said nearly every moment of every day, we have the opportunity to give something to someone else. Our time, our love, and our resources. Our question of the day comes from blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color,

they'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run all the time, you'll save even more. This is a great American company. If you need window blinds, they're the number one seller on the Internet. Check these guys out. I've done business with them. They're incredible window blinds, they're the number one seller on the internet. Check these guys out. I've done business with them. They're incredibleblinds.com. Today's question comes from Steve in Massachusetts. I'd love to move into a management position, and I've been working with

my superiors to gain additional training and certification to be the best candidate for this position. I'm cautiously optimistic about this opportunity, but they have a history of working with employees to move up the ladder, but never actually hiring them for the position. I know nothing is guaranteed, but how do I navigate a conversation where I bring the subject up? I don't want to jeopardize any progress I've made, but I also want to address this concern. You know, Steve, I don't like you bringing this up. I don't know where you're getting your facts. I don't know if you've been able to do your own research to see, well, they'll talk a good game, but they never actually move anybody up. I don't know where you're getting your facts. I don't know if you've been able to do your own research to see, well, they'll talk

a good game, but they never actually move anybody up. And regardless of the scenario, about how you've come to this conclusion, talking to them about being concerned that they're not going to promote you is not going to actually get you the opportunity to get promoted. You have one way to do this, and that is do all the things that you're

doing. You're getting the additional training, the additional certification. You're talking to leadership about it. The only thing I would add to this is get it in writing and say, hey, if I do these things, will I be in a place where I've got the best chance to win the position? If they say yes, you do that. If they keep kicking the can down the road, you know that your suspicions or that the rumors are in fact true, and you've now hit a lid at this organization,

and then you begin to look for something else to move on to. But to have a conversation about concerns about something that may or may not happen, it's not going to help you. You go for it, and if you don't get the shot, then you decide to move on. Yeah, there's not really a way to say to your leader, hey, I've heard you don't have integrity and have that help you with promotion yeah that's probably not going to work out no robert is in mozambique hey robert how are you hey dave thanks for taking my call sure what's up uh so i work for a company and all of our jobs

are outside of the u.s uh because we spend all of our time outside of the U.S., all of our income is tax-free. So I qualify for the 30-330 tax exempt, where I don't have to pay any federal taxes for the year. So last year on paper, I made about $12,000. In actuality, I took home about $90,000. But I want to start investing in the 401 thrift that my company offers. The $19,500 cap, will I find any penalties or anything if I invest more than what I actually claim on paper? And should I choose the Roth or traditional because of the tax situation? You can invest up to your earned income into a Roth or into a traditional or into the 401K.

But if you're showing an earned income on a U.S. tax return of $12,000, that is your cap. Gotcha. Now, you can't put more into a 401k than you got paid. Okay. So the tax paper shows that I made the $90,000, but because of the exemption for working out of the U.S., the actual adjusted...

Well, it may be that they count that earned income. You need to check with a tax advisor in the U.S. then to find out. You could check with one of our endorsed local providers that does taxes. But if they're counting that as earned income, even though it's not taxable income, it could be earned income and not taxable income. But, for instance, you cannot, give you an example, If you live on disability income, the IRS, for purposes of putting money into a retirement account, that does not count as earned income. If you have investment income that you live on, that is not earned income for purposes of doing an IRA. And so if you've got a million dollars in mutual funds and you pull $100,000 off the investment every year,

but you don't have any income that you earn from a job or anything else, then you cannot do a retirement plan on investment income. It has to be on earned income. So it may be the 3330 income is considered earned income, and then you can max out. And if that's the case, I certainly would be. Sorry, I don't know the answer to that i'm not a tax guy uh but check with one of our endorsed local providers at ramsey solutions.com and they'll help you walk through that uh sarah is in new york city hi sarah welcome to the ramsey show hi thank you so much for taking my call. I'm super excited to be on the show today.

Sure. So yeah, I am a recent graduate of a master's program. I'm graduating with about $58,000 in student loan debt. Despite the debt, luckily I was able to increase my income through a new job substantially. However, with this increased income i just feel like there's a lot of just upcoming things i'm thinking about for example i'm getting married i want to buy a car i need to buy a house pay back my student loan debt and i'm just having a hard time really trying to figure out how to balance like the new income i'll be making with these. Cool. What will you be making? Financial. So my base will be about $165,000,

and I'll be getting stock and things like that. So my total will be $240,000. Good for you. Way to go. Excellent. When are you getting married? Right now it's set for June 4th, so next summer. A year.

Okay. What does he make? He's in real estate, so next summer. A year. Okay. What does he make? He's in the real estate, so it fluctuates. Last year, he made $160,000 and now it fluctuates. Well, we teach a process called the Baby Steps,

and it's the order of attack that is the shortest distance between where you are and wealth. We've done it for 30 years, and millions and millions of people have used it to become millionaires. So it really does work. It's not magic. It's hard work.

But the first thing you do is save $1,000. That's kind of a no-brainer in your situation. And the second thing is you work to become debt-free as fast as possible. So making $240,000, how fast are're going to pay off uh 58 000 in debt really really freaking fast before you talk about buying a house um and uh you're going to do that in just a few months i mean because you're used to living on nothing that's true yeah now do you have a car no i don't not at all yeah so like the only only debt I have is from the student loan. Oh, but you're, okay, you're in New York City.

I see. Yeah, exactly. Are you leaving the city? I'm thinking of moving elsewhere to sort of cut down on the rent I've been paying as a student, but it's still pretty much up in the air. But your career is there. Yeah, my career is there, but I can move to Jersey or, like, somewhere else. I got you.

I would do that, Dave. If you can move to Jersey and save on rent and you're going to ride. But I would use public transportation. Absolutely. I mean, it's what you've been doing all these years, and that's not a problem there. I mean, you just catch the subway to get around, don't you? Yep, exactly. Perfect.

If you're in Jersey, you can ride the train in or wherever. I mean, and it's perfectly fine. I would do that for a short period of time, and let's get the debt cleaned up and get you an emergency fund of three to six months saved, and then I would save up and buy a car, and then I'd start saving towards a house. And somewhere in there, we've got to stop and put enough money in the bank to pay for the wedding.

Yeah, I think the biggest issue is, like, for example, like my my family like i don't come to the family with a lot of money so when it comes to the wedding will probably be much pretty much me and my fiance covering the whole cost yeah so how much you're gonna spend on the wedding as of right now like i i want to stay under 15 000 and i i think think that's a comfortable number, but it's still something I would be thinking about. Okay, let's pretend for a second. Let's pretend for a second. Let's pretend you make $240,000, and you need $15,000 for a car and $15,000 for a wedding and $60,000 to pay off student loan debt. That's $120,000.

Mm-hmm. You should do this in... That's six months of your income. Yeah. You have to live out of that. And so... But the point is, by next June, you should have accomplished all of those goals.

It would be very reasonable to have $120,000 out of $240,000 in one year. Yeah. So that's where you've got to go. That's the way to go. That puts us out of the day. Ramsey Show, or the Ramsey Show in the books, will be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen.