The Ramsey Show - App - How Can We Stay Motivated To Pay Off College Debt? (Hour 1)

Episode Date: March 10, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Ramsey Show, where America hangs out to have a conversation about your life and your money. My name is Anthony O'Neill, host of the popular YouTube show and podcast show, The Table with Anthony O'Neill, and co-hosting with me today is number one national best-selling author and host of The Christy Wright Show is number one national bestselling author and host of the Christy Wright Show, the one and only Christy Wright. And together we'll be answering your questions, taking your phone calls. If you have a question about your life, around your money, or if you're a young person, you want to start a business, or if you're a lady and you just want

to learn how to get balanced, how to go after your purpose, give us a call, 888-825-5225. Again, the number here is 888-825-5225. We have a couple of phone lines open, but keep calling, and we'll get you through, and we'll love to have a conversation with you about your life, about your money. And, Christy, what all are you talking about? Because every time I get on the show with you, I'll be saying, Christy, this, Christy, that. What's your sweet spot, Christy? You know, it's interesting because you've kind of watched this transition over the last couple years.

But for five years, I helped women start businesses. And that's certainly still something I love to do. We have the Business Boutique event. I have my book. All that stuff is still there helping people. But in the last year or so, maybe two years, I've really felt God kind of urging me into this new space to not help women with just businesses, but to help them in their lives in the area of personal development and even specifically faith. And then what's cool, Anthony, is while I felt God leading me in this space, you start to see the market kind of going in that direction, too. We'd have women come to the event.

Women come to listen to the Business Boutique podcast or read my book, and I would always say, oh, what's your business? And they would say, oh, I don't have a business. You just help me reach my goals. Wow. Or you help me in my relationship with my spouse, or you help me push past my fear to apply for this job. So one of the things that I really want to do, and you and I are big vision people. We love helping people have vision. We have vision for ourselves.

But I think there's a gap in the market between faith and personal development. And people tend to think they're mutually exclusive and they're not. You need both. You need to have a faith. And I believe God can lead you in his plans for you. And you need to work really hard and have goals and follow steps and be smart with what you have. And so I want to help people do that. I want to help people have a bigger faith and a better life and bridge that gap between faith and personal development. That's what I'm doing. So it's been fun. Man, every Tuesday, you guys, you can

check her out on YouTube or anywhere you listen to podcasts. Breakthrough was holding you back. Create a life you're proud of and build confidence in yourself and the God who created you. Every Tuesday on YouTube. This is Christy Wright. Check her out. So 888-825-5225.

Give us a call. Right now we have Josh with us in Charlotte, North Carolina. Good afternoon, Josh. How can Christy and I help? Afternoon, guys. How are y'all? Doing well. Hey, good. So me and my wife are in a position where we are probably going to want to refinance just the way our market is right now. The big thing that we are having a concern about is I run a small business that is growing income that I use one of our spare bedrooms for. Now, we want to have a second child, and we don't have another bedroom that's available. So one of the things that we've considered is when we go to refinance, seeing if it would actually be worth it to try to expand onto the house and add an

extra place so I can actually run my business from that and have a place for our future children. So, and I have no information on how to go about that or if it would even be worth it to do so. And if I do, what way to go about it? Okay. So you're pretty much refinancing not to go down to a 15-year fixed rate loan. You're pretty much refinancing so you can do some home renovations. Am I correct? That's the big thing. We want to refinance anyway because we got in one of those bad situations where because we couldn't put 20% down on the home, we had to have a mortgage insurance, which does nothing for us. PMI. And so we're losing about $1,300 a year anyway.

Okay. Just from that. So we want to try to refinance just to get that off, if anything else. Do you have 20% equity in the house? Do you have 20% equity? Our loan we did at $170. Our balance is $150, but they are estimating the value of the house currently to be about $230 to $240. Okay. All right. So you will have more than 20% equity in the house if the house values at that

price. And so I like that. So a refi so you can get rid of your PMI will be a good option. I would recommend you check out church, your mortgage for that. When you refi. No, I'm not going to say take out money to add on to your house. If you're going to do that, you're going to do that cash. OK, I don't want you to take out money to put back into the home. Now, I want you to take out refi so you can get a better interest rate, get out the PMI. And then I want you to cash flow any renovations that you want to do to the home. No, I want you to take out refi so you can get a better interest rate, get out of the PMI, and then I want you to cash flow any renovations that you want to do to the house. But before we talk about renovations, Josh, do you have any other kind of debt right now? We do have a little bit of debt. We have about a $4,000 medical bill, and then we were debt-free up until the house was purchased, but then we had some

credit card that got away and it's about 3,500. So we have about 7,500 in debt right now. Okay. So we're $7,500 in debt. Do you have any money in the bank? I do. We've got 2,000 in emergency fund, and then we've got some couple thousand in other things that we're just trying to make sure taxes go through okay okay we could probably throw that at something if we need to so here here's here's what i'm thinking chrissy uh you know um is one we do refi so we can get rid of the pmi because that will free up thirteen hundred dollars right there in income okay and then from there it's josh i want you to pay off this seventy five hundred dollars okay i want you to take a thousand dollars out of that.

Go ahead and put that towards the $7,500 in debt. Get out of this. Get you a fully funded emergency fund up. And then from there, because listen to what you just said. What you said was I got a mortgage. We were debt free. Then when we got the mortgage, we had to go back into debt because we need to do some stuff around the house. So we want to prevent this from happening again.

And so go ahead, get out of debt, get a fully funded emergency fund up, follow the baby subs, and then from there, cash flow any renovations that you may need. Yeah, and I would say the one thing I would add in relation to the business expense would be to find all the options you have. Are there co-working spaces? Is there somewhere you can sublease? Is there something that's a lower cost where you can have that room for your baby, have that room for your family that's growing without taking on this extra expense in your home,

this extra loan like Anthony's talking about? If you get really scrappy and get really creative, you will come up with a lot more options. Right now, this is just the easiest, most visible option for you. You have a lot more options. You can run your business a lot of different ways, I'm guessing. So I want to challenge you to make a list of what are all the different ways that you can find space for your

business if and when your family grows to not feel like that you're painted in a corner there. That was so good, Christy. I like that. And here's the thing, you guys, we're never going to tell you to deviate off of the baby steps. The baby steps work. The baby steps got me out of debt. They've helped Christy. They've helped all of us here. So we never going to tell you to deviate off of the baby steps. The baby steps work. The baby steps got me out of debt. They've helped Christy. They've helped all of us here. So we're going to go right in line with the baby steps. And so the key thing here to remember for those of you all listening right now is when you get a mortgage, we're never going to tell you to refi so you can do things to the house.

No, we're going to tell you to refi so you can pay off the house sooner quicker faster anything when it comes to adding on to the house fixing up the house we are always we will always tell you to read not refi we will tell you to cash flow that because we want you to pay off the house we want you to build equity we want you to build wealth the number one thing that we found in our millionaire study was that most of these millionaires had a paid-off mortgage. And that is important in America to remember. Make sure that we have a paid-off mortgage so we can start building wealth, start building legacy. This is Chrissy Wright.

This is Anthony O'Neill. This is The Ramsey Show. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you.

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888-825-5225. That's 888-825-5225. My name is Anthony O'Neill, and joining with me today is Christy Wright. And we're here to take your phone calls, answer your questions, talk about life, talk about purpose, talk about money, talk about careers, talk about all things around life. We had a phone line just open up so give us a call 888-825-5225 and chase is with us in st louis uh good afternoon chase how can christy and i help hey guys thanks for having me on the show no problem at all man how can we help bro so i'm a i'm a second semester junior so i've just i'm about to finish my junior year of college. Okay.

I just transferred to my four-year university after attending community college in the past. Okay. Up until this point, I've paid for all my tuition out of pocket by myself. Awesome. Because my goal is just to graduate debt-free. So I took out a subsidized student loan of $5,500. My plan for the next two semesters of college is to pay the last two semesters out of pocket like I did in the past.

But I'm starting to rethink that idea as federal student loan forgiveness is kind of a discussion in politics. Do you guys think I should get two more loans to cover the remainder of my school, or should I just pay for as much as I can out of pocket? Chase, let me ask you this question, man. You sound like a very bright, smart young man. Have you done any research around these forgiveness programs? Not completely.

Okay. Let me help you out because I want to make sure that, you know, I want to give you an opinion. I want to give you facts, okay? Facts are showing that only 1% of the people who actually apply for the Student Loan Forgiveness Program are getting approved. So that's 99% of the people loan forgiveness program are getting approved. So that's 99% of the people right now are not getting approved. So let me ask you a question with knowing that fact right there,

as a young man in your shoes, do you want to rely on them to forgive you? No, exactly. I probably should not. Exactly. Who's the best person you can rely on definitely myself there you go there you go young man that's it right there here's the thing um to answer the question directly and i'm pretty sure christy will agree with me no you should not rely on someone else you should not rely on the, you should not rely on someone else. You should not rely on the government. You should not rely on the White House. You should not rely on Congress to take

care of your house, bro. You've worked hard to stay out of debt. Continue working hard to stay out of debt. Continue working hard to take control over your life. And I promise you, when you turn 30 years old, when you turn 35, you have a wife, you have kids. You're going to say thank you to your younger self because you put in the work and you avoided debt at all costs. OK, it's going to be hard. I'm not going to sit here and play with you. It's going to be hard. It's going to be frustrating. There's going to be some days you feel like giving in on these last two semesters. But when you walk across that stage, brother, and i hope america you all are listening to me when you walk across that stage with a debt-free degree and when you get around

your friends and they're talking about a college experience and they're over here crying and whining because they have fifty thousand a hundred thousand dollars in student loan debt and you're like i have nothing you're gonna feel like superman you're to feel like man it was worth it so do not give in to because of the talks right now no stay true to your path stay true to who you are and graduate 100 debt free and our brother i'm telling you right now you do that you're setting yourself up to be a millionaire here's the thing too chase that's so cool number one you've already done it you're really really, really close. You've already done this. You've already cash flowed your college up to this point, which is incredible and unlike the vast majority of college students. So you have this skill. You have the confidence. You've done it before. You know you can do it again and finish

this out. But I want to unpack something for you really quickly. And this is for all of you listening about any type of debt. What I want people to understand, Anthony, is that when we talk about debt, we're not just talking about the financial aspect of it. This is not just a numbers game. Yes, you pay more when you take on debt and you have interest. There's the financial implication, but there's a power and control element. Chase, we want you to have all the power, all the control. When you sign your life away, when you sign your future away, when you sign your finances away, you're giving up those things. You're giving up power. You're giving up control, not just the finances.

And so we want you to keep all the power, keep all the control, keep the risk low. And when you stay out of debt, you do that. No one can tell you what to do because it's your money and your future and i want people to understand that anthony because sometimes they think it's just a financial thing they're like well i don't mind the payment of fifty dollars a month well i don't mind the interest of x hundred dollars it's like no no you're giving up power right you're giving up control and you're right to your decision making in your future and man that to me is more motivating than the money side of it.

Because I'm like, I don't want anybody to be the boss of me. I don't want anybody to be able to tell me what I can and can't do in my future. You know what, Chrissy, you're teaching good. One of the things I talk about on my show over at the table with Anthony O'Neill on YouTube is I was just the other week with one of my good friends, Leo.

He said something that was so good and something that I teach as well. He says, every dime you give into interest, which is the penalty for debt, is one dime you're taking away from you and your family to build wealth. So not only are you giving up power, but you're also giving up the opportunity to build wealth. You know, he said just in his student loans alone, if he just would have paid the minimum payment on the student loans, he was going to pay one hundred and twenty five thousand dollars in interest. I believe it. One hundred and twenty five thousand dollars in interest. That's not going towards his debt.

That's not going towards building wealth. That's going towards someone else. That's robbery. Yeah. And so this is why I'm so passionate about this message, especially with young people, you know, all people, really. But when I hear young people say, I want to take out the student loans and get it forgiven. No, no, no, no, no.

Stay away. Work hard so you can build true wealth at a younger age. Well, and the reason I bring up this power control element, not just of the debt, but in relation to Chase's question with loan forgiveness, if you say, I hope, I think, I'm going to cross my my fingers a wish and a prayer that they're gonna forgive me and then they don't because they probably won't again you've given up your power you've given up your control for a wish and a prayer that didn't work out instead we want you to follow a proven plan that has no risk it's not a wish and a prayer it works and

it's proven and then you're gonna graduate debt free and there was no oh i wish i could have should have would have you controlled it every step of the then you're going to graduate debt-free. And there was no, oh, I wish I could have, should have, would have. You controlled it every step of the way. You hit it off. Man, I love doing this show with you, Chrissy. I know. We get so excited. Man, this is good. Lindsey is with us in Cincinnati.

Good afternoon, Lindsey. How can Chrissy and I help? Hey, guys. So I'm going to, like, make you guys even more fired up because I have a best with my student loan. So we are in baby step two, obviously. We have been the Zell Intense for two years now. It'll be two years in May. Okay.

And we still have $150,000 left, and we've already paid off $100,000. Woo! Okay. Okay, Lindsay. But it's just exhausting, you know? It feels like it consumes every part of me. It's everything we think about. It's everything we talk about.

And we are being so intense because we want to wait to have kids until we're done with our debt, which I know you guys say, like, that's not exactly what you recommend. But our minimum payments on our student loans are $1,300 a month. And it's just like we feel, I don't know, like if we don't get to pay it off, we wouldn't feel right about bringing that child into that. So anyway, I guess I'm just looking for like motivation or tips or tricks or anything you guys can think of to help us stay motivated and on top of it. So before Chrissy talks real quick, I want her to talk because this is her sweet spot, especially for ladies. How much do you all make a year annually?

Close to $150. Okay, cool. Go ahead, Chrissy. All right, so I'm going to give you a running example, Lindsay. I love to run. I feel like I can come up with a running example for about anything. She's a B-sack, too. Depending on the distance that you're running, you set a different pace. So if I'm going to run one mile, I can and will run that

a lot faster than if I set out to run a marathon, which is 26.2 miles. But when you know the distance that you have to run, you set your pace accordingly. Now that's not saying you shouldn't be gazelle intense. I love that about you. I think that's amazing. I just want to give you permission to pace yourself. It's a marathon, not a sprint. Take a deep breath. Enjoy little wins along the way. Celebrate here and there, and you will be able to last for the long haul. But you're doing great.

You've got a year behind you. You can do this. And, Lindsay, I'll add this real quick before we go to break. If your why doesn't make you cry, then the price of commitment will. You and your husband should sit down and really write down what's the why. Why are we doing this? Why are we going this hard? And if that doesn't make you cry, then the price of commitment will. Find a why that'll make you emotional. When you get emotional, you get the energy to push on and push forward. All right. This is The Ramsey Show. America, by now, you've probably probably seen all the tax software as saying it's free to do your taxes with the big companies.

But newsflash for most people, it's not because you have to meet the right criteria. By the time you realize you don't meet the free criteria, you've put too much time into it to start all the way over. So you pay up. That's money for the company and here's the truth that same company has loads of customer data and they can sell it their own privacy statements say so so if they know you wound up paying and owing taxes they've got a green light to send your information to their business partners who will then kindly keyword their kindly sell you loans and credit cards to help you pay off your taxes. The tax software guys get a bonus. You get, guess what, more debt.

Check this out. They're making a killing off of their customers. You need something better. And I mean much better. That's why we stepped into the ring with Ramsey Smart Tax to give you a way to file your own taxes without paying more than you expected and without putting you at risk to getting more debt. I want you to text the word tax to three, three, seven, eight, nine. I'm say this again. Text the word tax to three, three, seven, eight, nine, seven, eight, nine to learn more and get started for free. That's tax T.A.X. two-3-3-7-8-9.

I don't like tax season, Christy. Who does? Let's be honest. I'm just going to be real. There are, there are a handful of people that get excited about it. I'm not one of those people.

I am not one of those people. But you know what? We got to do what we got to do. And yeah, I think I may be texting the word tax. 888-825-5225. Christy Wright, Anthony O'Neill here. Ramsey Personalities.

Taking your phone calls around money, around life, around if you want to start a business. Or I would encourage any ladies out there. If you're trying to figure out how to balance your life, how to figure out how to find your purpose in life, give us a call. Ashley, give Christy a call and she'll give you the wisdom and knowledge. Then I can come in there and help you get your money right.

We're a tad team. We are. I like it. We need both. All right. Sebastian's with us in Tampa, Florida. Good afternoon, Sebastian.

How can Christy and I help? Hey, how you guys doing? A huge fan. So I have one quick question. I have one debt. It's to my grandparents. And they're really nice about it. Like they're not rushing me. But it's one of those things that like, when you sit next to them at dinner, it just don't taste as good because I know I owe them that money. It's $3,000. And I have $1,000 right now saved to pay them back. So I make 15 an hour at my job right now working 33 hours a week and I'm going to school. No student debt. I've been cashflow in that. I have a side hustle of reselling shoes like Nike's, Adidas, all that. So my main question was, I want to kind of take it to the next level with reselling shoes because i've had like pretty decent success but to do that i need to invest in the computer so that i could run

like softwares like to act like people so i could pick up more shoes and the issue with that is a computer for that is very specific so i need to build it and that's fifteen hundred dollars but i know like my profit margin would be really like it would be guaranteed because I already know how to use most of that stuff I just don't have the computer would it be wise to go ahead and invest in the computer before paying my grandparents off so that I could like pay them back faster or should I just keep saving up as I've been doing to pay them back so the thousand dollars1,000 is your total savings? That's all the savings?

That's what I've been saving up for probably the past three weeks, and that's what I've gotten so far. Okay, help me understand this software. I'm not disagreeing. I just don't understand it. Tell me what you are going to be able to do with this computer and software that you can't do right now on your phone just being scrappy manual hustling getting it done okay so what it is it's called box so a bot i would i'm in a cook

group which is like i can rep box prefer let's say anywhere from 50 to 240 depending on how good of a software i want and what that software will do is on this computer, I can have like, instead of one tab open, that is for me to add a shoe to a cart, I can have 100 to 200 tabs open and be able to get multiple pairs to resell. Oh, so you're trying to get, you know, fancy. You're just, you're trying to turn these shoes faster. Yeah. Yeah. I have friends that they're already into this and I see the numbers that they're able to pull off from it but i don't have a computer that's capable of having that many tabs open and i can run boss on all right here's what i want you to do i want to challenge you on something sebastian i'm not against

you getting this computer and this software but i want you to do two things before you do the first thing i want you to do is i want you to, if you have a friend that is truly doing this, either ask them if you can borrow it for a day, for an hour. I want you to prove that you can do this. I want you to actually test the software and prove to yourself that you can turn this profit that you think you can before you drop $1,500 into it. I just want you to test it out. However you go about that, whether it's a friend or whatever you do, I just want you to test it. The second thing, if that works and you're like, yeah, I've validated my idea. I definitely can get it. I want you to sit down with your grandparents, tell them your plan and ask their permission for you to make this expense with the

intention of you want to pay them off sooner. I want them to feel a part of the decision since you're in debt to them, just out of respect for them and for your own conscience that you're not sitting down at dinner feeling like you just bought this software and feeling even worse about it and you hid it from them. So I just want you to take a couple steps. And then the other thing is if you decide to do it, they're good with it. You prove your idea. I want you to set a goal that you are going to turn. You are going to pay that back to yourself. You're going to make that much money back in less than three months. I want you, I want you.

And that's why I was kind of hesitant instead of just jumping into it because I don't want them to think that like, oh, he just spent this much money on a computer and he's not paying us back. Like I saw that I set a budget and it's like, if I do, if I live by my budget, which I've really, like, been strict to myself about it, I can have everything paid off to them in three months. And I was like, oh, maybe if I can invest into this, I can have it paid back in, like, two months. All right.

But like you said, I would have to talk to them first about it. Well, but here's the thing. You're in school. You're cash flowing. You've got a side hustle. You're a driven guy. You're not just sitting around eating popcorn, expecting people to make a way for you. You're in school. You're cash flowing. You've got a side hustle. You're a driven guy. You're not just sitting around eating popcorn expecting people to make a way for you. You're trying.

And I hear that in your voice and see it in what you've already done. I just want to make sure when you do this, you're up front with your grandparents. You're clear and prove your idea that you can do it. And then you hold your feet to the fire to get it done in two months, three months, something like that. And I think you will. I think if you do that, that's the right way to go about it to get it paid off even faster. Sebastian, let me ask you this. What was the $3,000 for that your parents loaned you the money for? So last year, I actually moved out to go to school in Gainesville. And so I didn't have a job when I

first went there. And so I had to pay my own rent. I had to pay for food. And I made really bad decisions. And I joined a fraternity, which I knew I couldn't afford, but I still did it anyway. I wasn't listening to you guys, obviously. And so now that it's like that I am, I'm like, man, I really should not have done that because that was like $1,500 on its own. So luckily, my grandparents, they helped me and they're like, Hey,

you can pay this back whenever you're able to, but this is so that you can like keep going to school over there. Since then I'm back home ever since like classes went online for COVID. So I don't have to worry about paying rent or anything like that. Thank God. So you're at your home, your home doing online school. Yes, sir. So that means home doing online school? Yes, sir. So that means you have access to a computer?

I have a computer, but it's like eight years old and it's not something I can run. Nah, bro. Nah, bro. Nah, nah, nah. This computer won't have that software? You can make this work. Yeah, you can make this work, Sebastian.

I thought he didn't have a computer ao i mean we just had to ask the right questions here's my thing ma'am um you know i was agreeing with christy until you said you had a computer uh i don't i don't sell shoes you know same um i don't know the business you can sell shoes and you may not be able to sell it as fast as your friends but right now i think you have to really lay down some priorities you you borrow money from your mom your parents so you can join a fraternity you need to pay them back okay it's time for you to step up to be a man so you know what let me do what i gotta do pay them back and then if you want to save up to get the computer a better computer to sell more shoes

then you do that but i think the first step to being a man is paying the people you love. Use what you've got. If you've got a computer, you've got a phone, use what you've got to do what you want to do, then you can upgrade it. I like that. That's it, Chrissy. Do what you've got to do so you can do one day what you really want to do. I like that. This is The Ramsey Show. C-Show. Welcome back to The Ramsey Show.

My name is Anthony O'Neill. Co-hosting with me today is number one national bestselling author and host of The Christy Wright Show. The one and only Christy Wright. Give us a call at 888-825-5225. We're taking your questions here live on the air. And Caden is with us in Denver, Colorado. Good afternoon, Caden. How can we help? Hey, how are you guys doing today? Thanks for having me on. Oh, man, thank you. Yeah, what's going on? So I have roughly $120,000 in student loan debt. I have one that's about, it's a consolidated like $96,000 loan. And then I have two $5,000 loans and then two just under $4,000 loans.

And I have the option to refinance my largest $96,000 loan to lower my monthly payment by $140 right now. Okay. And I'm on the snowballing step, so baby step number two. Okay. And so I planned on refinancing to get that $140 to put towards my smaller loans. Okay. But on top of that, I'm currently putting in 8% into my 401k, as that's what my company matches. And I just didn't know if I should pull that 8% out and

put it towards my loans to help me get out of debt faster. And I do have $10,000 saved in my savings as well. And so I was just looking for some guidance and how to maneuver and use what I have to get those rolling in the right direction. You called the right show, man. Chrissy and I are going to walk you through this and help you out as much as possible. So let's rewind. Talk to me about the refi. Two quick questions for you, and you may or may not know them. If you do not know these, what I want you to do is go and find out. Here's the very first question. Is there a cost that whoever's refining your student loans, are they charging you a fee to do the processing to do it? Do you know if they are? They are not. Okay, cool. So that's the first step. I like that. Number two,

is the interest rate at least a good full percent below where you are now? It's just under 2%. Just under. I'm loving it. I'm loving it. So, yes, we are refiing. Okay. So what we're definitely going to do is going to refi.

Then I like how you said it because we're going to take that extra money that we got back and not just the extra money you got back, which is about $140. We're going to go out there and we're going to get a job. Okay. We're going to get an extra job and we're going to attack it. So yes, you're going to line up your student loans from smallest to largest. Now, let me ask you this question, because I want to make sure that we're teaching the correct stuff. Do you have any other debt outside of your student loans right now? I have no credit card debt, but I do have $20,000 in a loan payment, an auto loan.

Okay, cool. So this is what we're going to do. Walk this down. So you're going to put 4K. That's number one. You have two of those. You're going to put 4K there, 4K there. Then you have two 5K.

You're going to line that up right behind the 4Ks. Then you're going to put the 20K in there, okay? Then you're going to put the 96K of student loans. So that's how you're going to line it up so you're going to take that 96 uh whatever you refi any extra money the first ones goes towards the first four you're gonna make minimum payments on all of them but then you're going to do that now you got ten thousand dollars you're not you're not gonna like what i'm about to say all right but i'm gonna tell you how it is because you called into the ramsey show and just on this day you got christy and anthony and so we keep it raw with you you're going to

take nine thousand dollars of that you're going to knock out both the four thousand dollar loans and you're going to put a thousand of that towards the 5k so now you're down to 4k left um and then 20 000 with your auto loan to the 96, then you're going to aggressively attack it. So do you follow what I'm saying? Yes. Okay, so you're going to go ahead and spend an IK on your debt. You're going to stop investing the 8%. What does that come out to for you?

About what, $200? That's $540 extra a month. Oh, yeah. That I could be getting. Yes, yes, yes. Stop it right now. As soon as you hang up from us, email HR. Tell them, hey, we I could be getting. Yes, yes, yes. Stop it right now. As soon as you hang up from us, email HR. Tell them, hey, we need to stop this.

We need to pause this. And don't pull nothing out of your 401k. Okay? All we simply want you to do is pause. We still want the money to grow, but we're going to take that 540 plus the extra 140, and we're going to put this towards your debt. And if you aggressively do this, this man and if you get an extra job on the side you can definitely definitely get out of this i was saying about two two and a half

years um i'm gonna let chrissy talk to you but then stay on the line i'm gonna have kelly send you a copy of my destroy your student loan debt uh book that's free on chrissy and myself actually free on me because this is my my book chrissy's just shaking her head. Thank you. I appreciate that. Yeah, yeah, yeah. Read the book. It'll take you an hour to read it, but any other insight, Christy? Yeah, here's the thing I just want to call out because it may be tempting when you get into this, Caden, to list your debts from smallest to largest, just like Anthony told

you, but then you're going to have a thought, you're going to be like, wait a minute, wait a minute, but what about the interest rate? Shouldn't I attack the highest interest rate first? And people start getting into the numbers and they start getting into the math of it. And they start to try to watch to do it different because my situation is special and I'm different and I got a different set of baby steps. Let me tell you something. If we were thinking about math, we never would have got ourself into this situation to begin with. This is more about motivation than math. And when you do what Anthony just told you to do and you knock out those small debts, it's going to give you a burst of motivation and momentum and progress. And you're going to get that much more fired up. You may go get two or three jobs to start to

attack that next debt because you can start to see the progress of you knocking them out. And I just want to encourage you, follow the plan as we've laid it out. Don't get distracted by the interest rate numbers if that's a different order for you. You want to stay focused on smallest to largest because it's more about motivation than math. I love it. Katie is with us in Minneapolis. Good afternoon, Katie. How can Christy and I help?

Katie? Hi. Hey. Hello. Hey. Hey. Great to be talking to you guys. Absolutely.

Thanks for calling. How can we help? I have a quick question about the every dollar budget philosophy and cash flow. Yeah. So I've been using the every dollar budget app for a while, and the last few days of the month I go in and I sort of do a true up on the budget, see if we have any money left over, make the debt payments. We have a sinking fund for the house, so I move the money into the savings and all of that. Now, for peace of mind, we keep about $650 in the savings account, just

in case I forgot something major during the month. So at the beginning of March, we had a situation where March 1st rolls around and the state takes $500 out for the taxes we owe them and daycare takes $300 out for our weekly amount. Now, both of those items are in the March budget, so that's not a problem, except that our first paycheck doesn't hit until the 7th. So for those five days, I've got a little bit of a cash flow issue and just wondering how you'd recommend accounting for that in the every dollar. How many months have you been doing an every dollar budget? What was that?

How many months have you been doing an every dollar budget? What was that? How many months have you been doing an every dollar budget? Off and on, I got off of it a little bit around the holidays with a lot of other stuff going on, and I kind of fell off the wagon, but I've been doing it for a solid three or four months now. Okay, okay. Yeah, yeah, yeah. Go ahead, jump in. So here's the thing. Now, you sound like it was a surprise.

Cause I mean, your, your daycare is not a surprise. Was this taxes a surprise to you? The timing of it was, we knew it was coming out. Like I said, I had it in the March budget.

I didn't know exactly when they were going to draw it out. So the timing on it being exactly March 1st was like, Oh, yeah. Yeah. So here, here's what I do, because, you know, both Chrissy and I income fluctuates. One month we can have a great month, next month we can,

you know, not have a great month. But what I do with inside of my every dollar budget, what I do is if I know I owe something, for an example, my mortgage is due on the 1st, I actually set that up for that to be the last payment of the last month. So for an example, if I say if I get paid on the 15th of the previous month, well, I'm taking it from that check that's going to pay anything that's in the beginning of the month. And so for you, what I would do is make sure that you know and do research. Call the people, whoever's pulling from your account. Say, hey, when are you pulling this? You have to be very detailed. No one just says, hey, we don't know when we're going to pull it we're just going to pull it whenever no everyone has

a due date everyone knows when when when they want the money and so you need to identify that moving forward everyone has a due date everyone says payment needs to be in on this particular day so that's what i would recommend for you on an every dollar budget is make sure stuff like that for taxes call them hey when are you pulling this money out of the account? Yeah, and I think as you learn those rhythms, it will just get easier. Just like your point is, our main commission check comes on the 15th. So if we didn't plan right, then the 1st through the 15th, if you literally did it 1st of the month through 30th of the month,

you wouldn't have as much money for what you need the first half. You just have to get in that rhythm where that money is there before, and it may be changing your auto draft payments a little bit differently. You just got to learn and adjust. Absolutely. Chrissy, it was a great hour. It was fun. This was really fun.

America, thank you all for rocking with us. Thank you, James, Kelly. And, yo, at the end of the day, this is The Ramsey Show. God bless you. 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 to podcasts.