The Ramsey Show - App - Here’s Our Most Hated Financial Advice (Hour 1)

Episode Date: October 25, 2023

Девочка-пай Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by the illustrious Rachel Cruz, who also is my co-host on Smart Money Happy Hour. That's right. Here we are together answering your questions, America. It's a very different show. We're very serious, very professional on the show. And then we have a good time on Smart Money Happy Hour. Just dishing, just talking like us old girls, old gals.

But this show is very different. You call in with your questions and we will do our best to give you sage advice. And that comes from Rachel. So, 888-825-5225 is the number to call. And Talon, I believe is how I say it, is in Provo, Utah. Talon, welcome to the show. Thanks so much. Appreciate you guys taking my call. Sure. How can we help?

Yeah. So, I am currently working on Baby Step 2. That should be ended up. That should be finishing baby step one should be finishing that by the end of the month. I'm kind of planning a roadmap for baby step two on paying off all my debts. Um, and looking on paper, I'm seeing one of my cards that I have is, uh, kind of ugly on paper and looking at the value of it. I'm upside down a little bit on it. And I'm wondering if it would be worth taking out a loan on my 401k to pay down what I'm upside down on it, and then to sell it from there.

Well, short answer, no. You want to take that one, George? I don't like this plan and we'll we'll talk about why um what is the car worth and what do you owe on it so i currently owe 26 five on it and the at least the kelly blue book value from what i've been seeing it ranges from um 18 to 21 and looking at similar cars on the market and on different classified ads and stuff like that. I'm seeing like 20, about around 20.

Okay, so you're about six grand underwater. How much money do you have in the bank, if anything? I have very little. Okay, and what's your income? I currently make average $65 a year. Okay, and it's just you? It depends on how much overtime is given to me. What was that?

Are you single? It's just you? I'm married and have two kids. Okay, and is your spouse working outside the home? No, we're on a single income. Okay. Is she able to? She could, but we've kind of decided

between the two of us that she's going to stay home with the kids. Okay. What other debt do you guys have, Talon? We have her car, and then we have... Which how much student loans which is uh

24 000 and we're right on track on hers like the car is worth 24 yeah okay okay and then how much student loan debt uh we have um six grand six thousand thousand? Yep. Okay. That helps us. Okay, so back to the 401k loan situation. The reason you don't want to do that, the only time we would tell people, hey, tap into that 401k is in case of emergency. And by that, I mean a foreclosure or bankruptcy. But never just a payoff debt to help you get out of this bind. And there's two reasons. One,

you're going to decimate all of the future growth of that money. And so if you take out a $5,000 loan, even if you're going to pay it back over time, the possibility of that money growing for you in that time will hurt your brain to see compounded growth over the next few decades. And number two, you're going to pay taxes and penalties on that money, which means you're taking a 30, 35% hit just to get out of this debt. So I'd rather see you use future income to get out of this mess versus trying to rob Peter to pay Paul. Yeah. And I'll say this, Talon, you know, you guys are well over, you're getting close to your annual income in car debt. I mean, you guys are right at that $50,000 mark of car debt.

And our recommendation is always not to have cars worth anything on wheels. We say engines and wheels, more than half of your annual income. And so you guys are beyond that talent. And so, you know, if I woke up in your shoes, honestly, you got two kids at home, you have a wife, your family, and I'm like, I think I just would want some relief. And so if I were you, I would look at selling both of these cars. You'll have to take out a small loan for the difference and a small loan just to be able to buy another vehicle. But I would just want some relief from this. And the amount of stress that you're probably carrying over a car,

it's not worth it. Do you know what I mean? And you guys can go get a great car again. It's not that you guys can never drive a great car, but this is a lot of your income that is wrapped up in car payments right now. How much is your car payment and how much is her car payment a month? I'm just curious. So mine is about $587 and hers is $500. So over $1,000 would get freed up.

Over $1,100, yes. And then, I mean, if you think about it, Talyn, like you do that and yeah, you'll have a small loan, but that means, I mean, that frees up money to be at a completely out of debt in probably seven months and then be able to save an emergency fund. You have no money in the bank right now. And so that's stressful. I mean, you guys are one life event or one decision away of this going,

spiraling down real quick and not having the option of like, should we sell or not these cars we're gonna have to to be able to do x y and z if you don't get a paycheck in right before they get repoed right i mean like that that's and i don't i'm not trying to like base all these decisions off of fear but it's just the reality of where y'all are and you're so normal talon like like this is what everyone does it's what everyone does but everyone you're not even special according to Rachel but like it's just not worth the stress and as you're and you know and I have three kids at home and I'm like and just even the stress your wife probably feels of like man you know we don't have

money in the bank like we don't have a lot saved so just the entire situation talent I would flip it on its head I would probably just sell the cars and just for the sense of a radical change in your life, it'll free you guys up emotionally, financially, and then reevaluate and be like, all right, we want to buy something else. So let's look at replacing it here in the next year. You know what I mean? You'll have the option to do that soon, but just for the moment of relief, that's almost what I would do. You've got a few decisions to make. So this is how it would play out, Talon. You would go to your local credit union. You'd get a loan for $15,000.

And that would cover your underwater portion and give you guys a little bit of money to get some beater cars. We're talking you get a $4,000 car, she gets a $5,000 car, and the other six will get covered in the underwater portion. Get it? Okay. So then you have these beater cars. You still have her car you could sell, freeing up that payment at that point.

And I would encourage you to do both. Because here's the other side of the coin. It's either this or she's got to get to work and bring in income. I mean, staying at home is a luxury at this point. Or you're going to be able to work extra. Or you've got to take on two jobs to bring your income up to 80, 90 grand. Yeah, because by April, you guys will have your student loans paid off. And then you'll have that $15,000 loan

and just working, and again, working extra, cutting lifestyle, all of it, and I would want to pay that off in nine months. You know what I mean? You look up next Christmas, you guys would be in a totally, totally different financial situation. Yeah, this is like triple bypass surgery is what you're about to go through, but you're

going to have some big relief on the other side, man. Relief and sleep. You'll have peace. I'm going to give you three months of our budgeting app, Every Dollar Premium, to help you guys make a plan for all of this money because I want you to call back and celebrate with us when you're debt-free. Thanks so much for the call. This is The Ramsey Show. Welcome back to The Ramsey Show. I george campbell joined by rachel cruz this hour this is a show for you about you and the number to call is 888-825-5225 now as i mentioned i'm co-hosting with my friend rachel cruz and we also co-host smart money happy hour which is one of the hottest shows on the ramsey Network. It's people's favorite.

And we have a good time. I'll just say that. Why do you think that is? Here's my theory. Okay. I think people want a lighthearted, casual conversation, easy listening where they can laugh and then they accidentally learn something. Oh, that's good.

I like that. That's the way I see it. Yeah. Yeah, yeah, yeah. It's like you're kind of eavesdropping in a conversation with friends. Yes. You're part of the happy hour. I don't know if you wish that we were your friends that's like that would be ideal rachel obviously that's been rachel's vibe i want to be your friend

let's just say that i'm not accepting applications for new friends right now i have a newborn rachel priorities but one of our episodes that we did that became one of our highest ones 113 000 views explain this is what it was called explaining our most hated financial advice and for some reason that we did that became one of our highest ones. 113,000 views. And this is what it was called, explaining our most hated financial advice. And for some reason, people really, the haters showed up as well as the fans. Yes.

So we're gonna go through that. You know, people do not like us sometimes and we're gonna talk about it. It was also cathartic for me. Can I be honest? It felt good. To just like have my rebuttals. Oh, yeah. My retorts. oh yeah my retorts

okay okay uh you got that first one george this is this is very you thank you i don't know if that's a compliment but i'll take it the first one we say is crypto is a terrible way to invest and spend your money we say it and all the crypto i'm gonna say dudes it's not a lot i just don't feel like a lot of the women. I haven't ran into a lot of women. A lot of women don't get mad. Well, I think it's because women. The way the guys do. The guys are like mad.

Women use something called logic a lot. Whereas guys are like, it's like a flex. It's like, come on, man. Yeah. Crypto. Now, you know, women have girl math. And so they're not innocent here. That's true.

We can justify some spending. Crypto, from the very beginning, I was just like scratching my head about crypto and i thought well maybe i'm not dumb enough to understand and the more i looked into it the stupider it got and now on the other side of it we kind of all know it was a farce just not good and the reason is i'll give you a real reason crypto is not based in anything it's just based on hype when you even buy a single share of a company you're hoping that the company produces more profit and revenue whereas crypto is just i made a coin this is the coolest hottest coin come get my coin and so it's very multi-level marketing vibes and so i always joke that crypto is just mary kay for young men for that reason which no offense to the mary kay ladies okay there are some

some yeah die hard mary kay out there so that's that the second thing people just yeah they don't care for us on uh you shouldn't use credit cards oh we talk about this a lot that one increasingly is controversial yeah and people you know it's because the points and the airline miles what they get from it they claim is is worth it um but when you sit in rc we talk to so many people where credit cards are not a blessing. It's not a thing that has helped people. It's actually gotten people into a lot of trouble and they end up being in a financial position where the credit card company is winning and they're not winning and we want you to win. And then you can go through all the, you know, the amount of stuff that doesn't work when it comes to the points and the airline miles playing the game you can go through the moral side door of

they get to you get these points and you get this cash back and you get the airline miles and everything because other people are not paying off their cards banks make their money off of interest and so they're making all this money off of people that are struggling and then you know reaping the benefits so it's like it's just a gross it's a gross thing all the way around to me and i'm like if you have a debit card like just pay for everything in the present and then go pay for your southwest flight like just save up and save up it's so much more free and statistically what you save by not paying on a credit card in turn could actually help you have hundreds of dollars throughout the year to spend on an airline ticket that you pay for and i'm going to call out

all the ramsay fans who what they're what we call ish where they go i did everything but i still have my credit card i pay it off every month rachel so i'm fine and i've convinced a whole bunch of people to try a 30-day credit card challenge where they just saw this put it in a block of ice and we're starting to get the results. And there was an interesting, someone just said this, I thought it was interesting. They said, a few months ago, I decided to ditch the Apple card and just use the money I have. I just wanted to try it out. They said, I've definitely seen a noticeable reduction in my spending and I've created more margin in my budget for savings. And they said, it's just the little things. There's something about checking my balance,

seeing it instantly go down after a purchase that really worked to optimize my spending. I go out to lunch less. I buy less extra stuff at the grocery store. You just make more intentional decisions. And so- When it's your money and you feel it. Even if that's you, you're the perfect spender, as I call them. Yeah. You're still spending more than you would have. It's true. All right, next.

Next, save $1,000 dollar emergency funds people are like inflation 2023 this is the same advice y'all gave in 1993 you know shouldn't it change with expenses being higher and things being more expensive that's a big one and funny enough when dave came up with this principle baby step one 30 years ago a,000 wasn't enough back then to get the new HVAC system and cover the big life emergencies. And so the principle of it is it's meant to be a starter emergency fund. Dave started this because people were trying to get out of debt, but they'd have these little ankle biters that would knock them back and knock them back. And so the goal is to cover the ankle biters. If you have a big emergency, number one, we want you to have good insurance in

place to cover some of that, the health stuff. And number two, you pause the baby steps, you save up fast, sell stuff, whatever you need to do to cover the expense. Most of these emergencies are not the money's due today or else the house is getting foreclosed on. Right. That's right. That's right. Yeah. So yeah, the thousand dollars, it's meant to be a quick step to 30 days or less because we want you to get traction and so much of personal finances is behavior change and for some people they can't even cover a 400 emergency in cash yeah four out of ten people have zero in savings that's right so we found so even a thousand dollars may feel like an uphill battle but when you do it quickly and you have it and you can move on to paying off debt that that's what it's there for it's for the quick win it's for the ankle biter

stuff that comes up in order to pay off debt, which leads us to number four, George. Pay off your debt, smallest amount to largest amount, regardless of interest rates. This is where the math nerds show up. All the math nerds are like, why in the heck would you not pay off the 25% credit card versus the- They're like, well, you'll save $300 in interest, Rachel, if you pay off the highest interest first. That's so dumb.

And I'm like, or you could have paid zero in interest if you never went into debt. So why are we having this theoretical discussion? It's so silly. But the reason we do it, again, is what I was saying earlier, is these quick wins. And when you pay off that smallest debt, even if it's a $400 credit card bill that's been just like laying around, right, you pay it off, you start to actually win and you start to feel like, oh my gosh, I can do this. And so that's, it's a powerful motivator. Yeah. Getting out of debt is way more about hope and momentum and progress than it is about mathematical interest. And we've done the math. The amount is negligible about how much you're really going to save by doing the avalanche. And I just have not seen people come in droves saying, Rachel, I did the debt avalanche and that's why we got out

of debt. It's likely you'll stay in debt longer or give up or fall off the wagon if you don't see that progress fast. All right, last but not least, if crypto was yours, George, I feel like this is mine. Married couples to combine accounts. You would think that I just told you.

You got three heads, Rachel, telling us to do that. Yeah, I mean, like, I don't even, I mean, like, people get so mad. My last two... Where's the anger coming from? On Instagram, George,

the last two reels I've done about this, over, like, three million views each. And all in the comments, they're like, this woman says a woman, says a woman.

Says a woman? That's what a lot of them say. And I'm like, I'm sorry. Can I go out on a limb and say those guys are single? And I'm like, like yes she's gonna say that out loud oh man people get pissed about this well they see joint bank accounts as she's gonna take you to the cleaners that's the very toxic mentality that some guys out there and i always have the asterisk you guys and and on the show we do this and we've actually had callers that call in with situations, and we tell them the opposite of this advice.

If there's an abuse situation, if there's an addiction that's not being addressed, like if there are things that you have to do to keep yourself safe, absolutely, like absolutely. I am not against that. But if you're just the married couple out there, both bringing in an income, but she pays these bills, I pay these, you go on vacation. They get the hotel.

You get the... I mean, you're roommates. You are acting like you're roommates. And it's never just about the money. It's never just about the account. It's the idea that you actually don't see yourself fully as a team and don't fully trust your spouse. And if that is you, then you need to ask, okay, why is that? Because there's probably going to be other issues going on that are going to come up in other parts of your marriage. So we can go on and on about this. But I'm telling you, people that win with money when you're married, you see yourself as a team. You win faster.

And I think you and your marriage becomes better. So many people have stood on the stage, George, to scream they're debt free. And they talk about how much how unified they are. It's transparency, accountability, communication, you know, all the hallmarks of a great marriage. Be married, be a team. So anyways, there you go. That is our most hated financial advice. And we love it.

Haters gonna hate. You're only fueling us. This is The Ramsey Show. Hey, you guys, health insurance costs are only moving one way. And that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy.

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CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budgets at chministries.org slash budgets. This is the Ramsey Show. I'm George Camel joined by Rachel Cruz this hour. The number to call is 888-825-5225. You jump in, we'll talk about your life and your money. Derek is up next in Minnesota. Derek, welcome to the show. Derek, are you with us? Hey, guys. How are you doing? We're doing well. How are you? Pretty good. So my question is, I qualify for a VA home loan. I'm in college right now, so I'm not looking at buying a house, but probably in a couple of years, once I graduate, I'm looking for it. And I'm wondering what the advantage of your 15 conventional loan versus a VA home loan would be. Cool. Okay. So talk to us about this home purchase. Are you out of debt? Do you have

an emergency fund? How far away are you from this decision? Well, I got about a year and a half until I graduate. I have no debt. I'll have a fully funded emergency fund by that point. And I already have a job offer afterwards, which would be roughly about $75,000 a year. Awesome. Way to go, man. Yeah. Crushing.

And thank you for your service as well. So are you a veteran yourself? Yeah, I'm a vet myself. I just got out of the Army a month ago. Oh, wow. Amazing. Very cool. Okay, so let's talk through the VA loan versus the 15-year. So the 15-year loan is as conventional as it gets. So there's not going to be any special fees or anything like that. There's a set fixed interest rate, and it's a 15-year term. And it's that simple. The VA loan, there's virtually no down payment. So the reason people find the VA loans attractive is you can get in this thing with 0% down.

The problem with that is that means broke people can get into a house which can make them broker because they have no equity. And if the market shifts like it has been, they could be underwater on this house with too big of a payment on top of other fees. And so the VA loan does have an extra fee called a funding fee, which will add one and a quarter percent up to a little over 3% of the loan amount, which will make your overall payments and your interest higher. And there's also a lot of property requirements that you have to look into. So there are some restrictions there. And do you have any service-connected disabilities? Just a little bit, but nothing that affects my job. I just get 10% for that. So it's not too much. There are situations where if your disability rating is high enough, that funding fee can be waived, which can make this a decent option. But those circumstances are very unique. And so if I'm in your shoes, if you're going, hey, the 15 year is

crazy unaffordable, that would make me question if you're ready to buy a home. Gotcha. So I would want you to have a good down payment before you jump into this. Overall, Derek, the VA home loans usually are just more expensive because of all the fees and everything. And then just like George said, it doesn't require much of a down payment. And we always say somewhere between five to 20% down. So again, those are the big differences. So if I were you, I probably would just go with the conventional 15% or 15 year loan. And yeah, and you can compare different interest rates if there's difference there,

maybe that actually will save you. If the VA loan for some reason has, you know, a lower interest rates, but I would, I would ask, ask around and look at your different options when you're ready to buy a home.

I would not buy it while I'm in school. And don't feel like you have to buy just because you've graduated and have a great job. Yeah. So you can even rent for a little bit. And I mean, if I were you, Derek, I would I mean, I would save up, you know, five to 10 percent for a down payment, regardless of which loan you choose to go with. But I would probably just go with the 15 year conventional loan if you if it were me. Gotcha. Does that help you out? Yeah, it does. The only reason I was asking is because, you know, in like college, you know, a few thousand dollars feels like a lot, you know? Oh, yeah. I always

keep thinking about the buying versus renting for a couple of years after graduating and whatnot and stuff like that. So it's great that you're thinking that far ahead. And what I would do if I was in your shoes is start crunching some numbers and go, hey, the homes in my area that I would want to go for are $250,000. Okay. So how much down payment do I need to get that mortgage payment to be about a quarter of my take-home pay of my after-tax income? And so that'll help you start to get a picture of what you're actually aiming at. Because right now there's this pie in the sky if I want to be a homeowner, which is great, but having those very specific goals is going to help you take the next steps. So thank you for your service. We're wishing you the best, man. Joel is up next in Modesto, California. Joel, welcome to the show.

Hey, George. Hey, Rachel. Thanks for taking my call. Sure. How can we help? So my wife and I are on baby step two. We just moved into our home into September. We're renting. And essentially, we're down to our last payment, which is my wife's car. It's a 2019 Kia Soul. And we are just debating about whether or not we should sell it and get a return on that and clear up all of our debt. A return, you say? Tell me more about this return. What's the car worth and what do you owe? Yeah, so currently we owe $5,600. So by the end of the year, it'll be about $5,000. And then we could flip it for about $10,000, between $10,000 and $11,000. Okay. You could sell it for

$10,000 to $11,000? Yeah, if we did private sale. That was the KB. And then you'd take that $5,000 and get a different car? Yeah. I was thinking either just another Soul or just anything that we could get that was relatively reliable. It is our only car, and my wife and I both work. How much do you guys make a year? So currently, per diem, I'm looking to get a full-time job,

but our income's a little bit variable. But I would say we're in between the $35,000 to $5,000 a month bringing in. If we both have a good month, it's about $5,000 after tax. After tax. And in California, I feel like that would disappear pretty fast. Yeah, well, it definitely goes by at the beginning of the month. Our rent is $1,500, which is actually pretty good for our housing situations. We have a three-bedroom.

But, yeah, it does go by with all the expenses and groceries and such, so. Yeah. I mean, Joel, if you guys found another great car for five grand, you could do this deal, but also, you know, if you told me it was 20 grand, that's one thing, but- Five grand, you can knock that out fast. Five grand, you guys can knock that out.

Just, yeah, keep paying on it. If it's been a reliable car, I don't know that it's worth the spread on this thing. Yeah. Because what I don't want you to do is call us back and say, hey, we got that car for five grand. It's given us a lot of issues and it's our only car. Now we're in a real bind,

so we're going to go get a new car for 50 grand. That's usually the emotional roller coaster. Yeah, I mean, unless y'all found a car for that price that you guys feel real good about and you're like, yeah, we're great with this. I just don't know that it's worth the hassle. Yeah, but it's just five grand. I think you guys can just pay that off.

Okay, yeah. No, and honestly, we were thinking that. That's what my wife has been trying to tell me. I think just the weight of the... You're ready for it, Joel. You're ready to be done. Yeah, I'm ready. This is like you throwing the towel, but we can just clean this up.

And this is your last debt. So how much debt have you guys paid off in this process? Yeah, funny enough, we actually paid my wife's $1,000 credit card the day after our daughter was born. Good. We've been doing good. And I want to say altogether,

we've paid off about four or five grand. Yeah, since we've been married. Awesome. Good for you guys. That's awesome. I think increasing the shovel is going to be the key to getting rid of this debt faster. Yeah. I would have an aggressive goal and say, hey, we got to be able to throw a thousand bucks a month of this thing and be done in under six months.

Then you go, okay, what's the gap? We can throw 700 a month now. How do we get an extra 300 bucks a month? Yeah. I'm going to go do these side hustles. You go do this. That to me is very, that motivates me to find out what the gap is and then get there and set a goal that's a little bit uncomfortable for you. Yeah. Yeah. Would you say, um, uh, would you say that with our daughter, she's four months old, um, would you say that we're still in a little bit of stork mode? Because I guess

that's kind of my only hesitancy with, you know, I want to knock out the debt, but I also want to be here for kind of these, you know, this precious first year. So what would you guys say about that? Well, stork mode is usually, hey, let's wait until mom and baby are home. They're healthy, they're safe. Then let's continue. And so technically you're outside of those boundary lines. And I think at this point, the best thing you can do, you're outside of those uh those boundary lines and i think at this point the best thing you can do your four month old is not going to remember dad doing side hustles right now yeah i was gonna say joel it only gets harder if i were to be honest so for now i'm like i would just put my head down get it done with and then you're gonna look up and be

like okay we're free from that we can get our time back and all of it. So I think it only, because then she's going to be looking at you and being like, dad, dad. They're going to start talking and then you're like, I don't want to leave. I don't want to, dad, free. That's really encouraging, Rachel, as a father of a now two-month-old.

She's like, it's only going to get harder, you idiot. Good luck with that. Thank you. Very encouraging. Congrats, Joel. You guys are doing awesome. You guys will get there soon enough, my friend. This is The Ramsey Show.

Welcome back to The Ramsey Show. Welcome back to The Ramsey Show. I'm George Camel, joined by Rachel Cruz. Hey, if you're a new listener to the show, first of all, welcome. We're glad you're here. Don't know what brought you here, but we're blessed to have you. And if you want to dive deeper on all the stuff we're talking about, the Ramsey baby steps, so on and so forth, you can go to ramsSolutions.com and click on the Get Started button, and we'll help you figure out the next best step for your financial journey based on where you're at today. That's RamseySolutions.com. Click Get Started. All right, let's get to the phones.

Isabel joins us in San Diego. Isabel, welcome to the show. Hi. So I'm a freshman in community college here in California, and I'm 16, and I have a guaranteed spot transferring to whatever institution I like tag to. And my parents are moving out of state this year, which means I only have one year of in-state tuition. And I will have a full ride with that in-state tuition and I have a, I will have a full ride if with that in-state tuition and I have enough credits where I can graduate in one year after I transfer. But in order to do that, I would have to pay 12K for summer classes in total. And that would be

the only cost. And if I do it in more than one year, it would cost me over 60K for the living expenses and everything. So this is my only option. So your options are pay $12,000 or $60,000? Yeah, and so $12,000 is obviously what I'm going with. Good. And the thing is, my parents cannot afford that. $12,000 is way too much, especially in a couple of months. And there's no way they're going to be able to afford it. I can't work a job.

I'm currently taking 30 credits. I'm going to be taking 36 next semester and I also homeschool my sister I just do not have the time to work a job and also my parents commute so there's no way for me to get to a job there's a plethora of issues I can't work a job I can't save up for it

so the only option would be loans the thing is I'm going to be 16 at the time still at the time where I have to pay it and my parents don't want to help me take out loans so I think my question is how do I convince them or find another way to pay for it okay um yeah yeah okay are you like some kind of prodigy I'm so confused and impressed at the same time no um I graduated high school at 15 because I took an exam where in California like they discontinued it this year, but they let you graduate early if you pass an exam with certain things. So you are a prodigy.

No. You're really smart, but for real. But for real though, Isabel, because that's going to be part of my answer. So you're graduating in one year. Okay, so I want to make sure I get all this right because I think there is a plan. Okay, I feel very hopeful. I feel very hopeful. Okay, so you are hopeful. You are 16.

You are in community college now and it's free. But the problem is your parents are going to be moving out of state. When are they moving out of state? At the end of this year. For the college I'm going to be transferring to,

they do your tax forms for financially the year before. So I'm going to be a resident for this year, so it'll be free. But the next year, so my second year there, it won't be free. So I have to do it in one year, which I can. 2024 is what? Like in 2024? 2024 to 2025 is when I'm going to be transferring, and that's going to be my only year.

And that's going to be your year, but it's still free then? Yeah, it's still free except for the summer classes. Okay. So my question is, what state are they moving to? Nevada. And are you not going with them? No, because I'm going to be transferring. So you're going to be living by, you're going to be you're going to be living by you're going to be on your own at sick at 17 years old and 17 yeah 16 17 years old and you are going to be technically what a junior in college with your

credits uh with my credits i'll be a senior you'll be a senior okay so how many credits are left with this 12 grand because this i understand the summer school thing so how many credits are in the summer school program okay so i'm going to be transferring with 70 i need 120 total i'm going to be taking 20 over the summer which is doable because i took 20 over this summer but it's but the 20 but those 20 cost 12 grand and you can't do that, right? Yeah. Okay. So those don't count because you may not be able to do this summer is what I'm going to be getting at. But you'll be able to get 100 of the other credits done free, right? So you have 20 credits left and the 20 credits... I'll have 30 left. Do what? I'm transferring with 70.

I have to do 20 over the summer and I'll have 30 left in the year. And those are free. The 30 left are free. Okay. So you have 20. You have 20 credits that you need. They cost 12 grand. You don't have 12 grand.

We're not going to tell you to take out loans, Isabel. So you have 20 credits left to get a college degree. Yes. So what I would do, Isabel, is I would look at schools in Nevada and I would say, hey, I'm going to for a year stay here in California, get it free. And then in order to get these 20 credits, I'm going to be moving schools in Nevada. And here's the beautiful thing, Isabel, you are brilliant. You are 16 years old as a basically a junior in college right now and so whether it takes you for those 20 credits a full semester to do you're used to do it you're

you're doing double that now right so so you're gonna be doing half of that in Nevada taking in-state tuition from your parents applying for every scholarship and grants and you're gonna and you're gonna do it it's gonna look a lot different than your plan but i'm telling you as about i at 16 years old i would not take out twelve thousand dollars i don't you're not even able to because your parents won't pay for it or won't sign it which is good on them i'm proud of them i am so i think you you're gonna have to look at multiple options and lower your expectations. And there's no rush either, Isabel. Like I know like.

You're moving a million miles per hour. You are. And you're doing all of this because it's free and you want to take advantage of that. So I'm all for that. But everything else can just take a breath, take a breath. And you can slow it down. Do it over the course of a year when you're 18 years old and work part time and do it then and graduate debt free.

You know, the rush and the urgency is going to cause you not to be able to have the capacity to look at all the different options out there. And it may cause you to make a bad decision because you're so laser focused on one way. Does that make sense? Yeah. I just like had a question about that because I thought about that too, like taking credits in Nevada. The thing is they don't, for UCs, they won't transfer.

I called them and everything. They won't transfer those 20 credits. So I have to take those 20 credits over the summer. So my plan kind of is contingent on convincing my parents to co-sign it. No, no. And it's like really stressful. No. Delete that plan.

Don't do that, Isabel. No. I would look at other options. Maybe you don't go to this school. Maybe you just go to Nevada. Go to Nevada with your parents at the end of the year and go to school in Nevada

and get scholarships and grants and graduate from a school in Nevada. California, there's other places that have degrees other than just California. This plan is so contingent on every variable working, which scares me. Yes, and if I'm your big sister, Isabel, I'm like, it's not wise.

We talked to so many people on the show, Isabel, so many people, and they are still paying off loans. Almost every caller we have with debt still has student loans. And there's a way around this and and i'm and i feel confident in that because of how freaking smart you are and so the scholarships and grants and everything else like there's still going to be there's going to be options out there for you the other piece of the puzzle is you said you're homeschooling your sister where is she going she is um okay so I'm going to stop homeschooling her because they expect me to transfer by the end of this year.

One of my brothers is going to start staying home and doing that. Okay, wouldn't that free up some time for you? It's going to be about the end of next year. So still for this semester, I'm going to be homeschooling her still, and next semester. Oh, but your parents are moving without her. Without her? No, no, Oh, but your parents are moving without her. Without her?

No, no, no. They're going, okay. So for this year, from 2023 to 2024, I'm going to be homeschooling her. And then they're going to move at the end of this summer. Oh. Yeah. And then my brother's going to go homeschool her. Okay.

Can we delay their move? What's the urgency for them to move? They're buying a house. And they've already bought it? I have no clue, but they said, we're buying a house, we're moving. They probably want out of California. My mom's been here for 50 years. She's been paying taxes longer than I've been alive.

She just does not want to be here. I know. In my head, though, I'm like, if I'm able to let my daughter go to school debt-free by sticking around for a few more months, I'm like, that would be ideal. But it sounds like that's not part of the equation. Yeah, I mean, that's out of your control, Isabel. You're not going to be able to do that. Oh, man.

So, Isabel, I mean, honestly, girl, I would just be looking at other options. And you're so young. It's not like you're 24 still trying to get your undergrad degree. I'm like, you have time. Time is on your side. So slow it down. Slow it down and look at options. Do this wisely.

You don't need debt, Isabel. You don't need debt. Don't need it. And here's one more piece of homework, since you're very good at it. Go watch our free documentary, Borrowed Future. You can watch it on YouTube. Go to BorrowedFuture.com. Check that out.

You'll see why Rachel has such urgency. I'm proud of you, girl. To help you go to school debt free. I think you're smart. Right. You'll see why Rachel has such urgency I'm proud of you girl. to help you go to school debt free. I think you're smart. Right. You got this. That puts this hour of the Ramsey Show

in the books.