The Ramsey Show - App - How Do I Get Through College Debt-Free? (Hour 3)

Episode Date: November 13, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of BMW as the status symbol of choice. My co-host today here on the air, Rachel Cruz, number one best-selling author, Ramsey personality, my daughter, YouTube star, YouTube. Yeah, there we go. My daughter, YouTube star. YouTube. Yeah, there we go. And there you go.

Because she's the nice version of the family. And people like her on YouTube because she's not nasty. No, I don't know if that's it. I'm bold sometimes. I didn't say you weren't bold. I just said you were nice. I mean, we have a different approach of how we give the advice sometimes. People love you, though.

That's why they're listening right now. That's great. You make good radio. Well, it's compelling, yeah. It's true. You're compelled to listen. All right. We're going to talk to you guys about your life and your money.

We're here to do that, and we obviously have a good time doing it. We hope you are. 888-825-5225. The advice is free. Some say it's worth what you pay for it. Adam's in Philadelphia. Hey, Adam, what's up? I'm doing well.

How about you, Dave? Better than I deserve. How can we help um so i think my wife and i just recently bought a house that might be uh too much for us oh yeah it's a bad time to discover it's too much after you've already bought it yeah well actually we bought it in two months late two months later discovered you so not not the greatest timing we've already done it beforehand that happens a lot though adam it's okay so what so what's the what's the math what's happening so i mean it's not well you might tell me it's different actually but um so based on our monthly income what i understand is

we want our mortgage payment to be about roughly 25 on a a 15-year. We're about 30.5% on a 30-year fixed mortgage, and we still have debt. So I'm not sure if, like, I may be jumping too fast to conclusions that we need a downside, or if maybe I should follow my gut and we should downsize. Yeah. sides yeah there's two levels to uh making it two levels of panic or there's two levels of something of motion that caused you to move on this level one is panic which you can't exist today and you can exist today okay then there's another level that says out there four or five years are you still not prospering because of this thing but you've been able to exist okay you're not in the first one you're not in the panic but you've got you do

have a little bit too much and you've accurately identified that you signed up for more than we would tell you to sign up for um so what is your household income and what do you do for a living? So before taxes, we're about $1,000, $1,500, $1,200 based on bonuses, and my wife and I are both teachers. Okay. So you're probably not going to see a skyrocket in your income. We're not going to project it's going to double in four years, right? No. We're both charter school teachers as well so she's performing

but um i'm pretty much the inflation rate so no we really won't see much of the climb yeah okay all right and how much debt do you have other than the home 24 000 okay all right not too bad yeah i feel, for you, Adam, you kind of are on that, on that cusp and, and what's, what's hard again, it's like, okay, look out five years. Yeah. You're, you guys are both teachers, like you said. So it's not like you're going to, you make commission and you're going to be able to like, just blow your income out of the water kind of thing. So, so you have to take that into account and then do the math and figure out, okay, how quickly or how much we're willing to sacrifice to get out of this $24,000 of debt?

How long will it take us to get an emergency fund? Like kind of go ahead and map out like the next couple of years mathematically of what your money is going to look like and then see where you guys are and be like, okay, if we had a 25% take home pay mortgage, how much would that be? Would we, that extra money, is it worth it at that point to sell and buy another house and go through that whole process? So it's kind of one of those, I mean, if it was 50% of your take-home pay, it's like a no-brainer for me. You got to go now. Yeah, that 30%, I mean, it's right there at that, you know, kind of that edge. So I think

it's something you and your wife need to talk about and say, okay, is it worth it of what we're going to save if we did get a lower mortgage in a different house? Or are we going to be in this and we're just going to have to sacrifice other parts of our lives to get out of this debt faster? Agreed. Let me give you a strategy that goes exactly with what she's saying. Let's try this, okay? Let's say we're going to tutor extra after school and create some side income.

We're going to get on a beans and rice, rice and beans budget and clear up the $24,000, which is stuff you already knew we were going to say, right? And as soon as that's cleared up or while that's cleared up, let's run the math out and say if we were to pay this mortgage that we currently have at the current interest rate at a 15-year rate rather than a 30, that creates a payment of X. What does our income need to become so that that X is 25% of it? And let's say that within three to five years, somewhere in that range, if you don't get your income to that level, then you probably are having a house that's slowing down your

progress. Because the problem with having a house that's slowing down your progress. Because the problem with having a high house payment is not that you can't pay it in your case, because you can pay it. The problem is it weighs down everything else. So when you get ready to buy the next car, you didn't have any wiggle room in your budget to save up to pay for the car. When you get ready to go to Christmas or go on vacation, you're having a budget really, really, really tight because all your money is being sucked up by a house payment.

And in your case, it's not all of it. It's just too much of it. And I think you can make it. You're just going to have to make very careful choices. And I think your income is going to reach the point that you're paying a 15-year on this mortgage, and it's 25% of your income. I think you'll probably reach that in three to five years and so you'll be fine it's not ideal it's not what we would have signed you up for but it's not bad enough to force the sale of the house artificially right now

okay well that's encouraging um but yes we'll get to work right now we'll make sure we're doing exercise stuff yeah absolutely and then adam i will add the other side of the coin too, that we do talk to people in that they decide on their own, even with all that math, they're like, you know what? It's not worth it. We're going to just sell, get a smaller house, and just have extra money to go crazy on the debt and lifestyle and all of that. We just have more wiggle room, and it's worth it for them to do it.

So, again, it's not like an either-or answer, and so it is up to what you guys want to do, because we've heard both sides of the story. Rachel, I'll give you an example of that. It's not Adam's situation, but when you were a tiny child, a couple that was in our church, and they had three kids that were older than you all, and we considered them good parents. So we were kind of looking, as parents of babies, we're kind of looking at this couple like, I kind of like to have parts of their parenting i like what they're doing um they right

before we met them they had moved down in house like 30 down i mean way down like a substantial change in neighborhood and house and everything because they felt very very very strongly in their house and i'm not impugning this on everyone that that that the lady wanted to be at home full time with her kids and the only way she could be a full-time at home mom with the kids was not in the house they had so they said we're making a choice here She can either be home or we can have this house. Oh, yeah. And they said, we want her home. And they moved them home.

And they did end up raising great kids, for that matter. This is the Dave Ramsey Show. Life sure has a lot of twists and turns. Unlike a roller coaster, we never know what's around the bend. The same can be true with unanticipated medical bills. That's why Christian Healthcare Ministries, or CHM, is a great option for those who are faith-focused and budget-conscious. CHM is not insurance. Rather, it's Christians helping other Christians carry one another's burdens with healthcare expenses. You know how important it is to be ready for whatever life throws your way.

And unfortunately, medical expenses can be some of the biggest, most unexpected curveballs. With CHM, you'll have peace of mind knowing you and your family have a caring, faith-based community behind you. As a Better Business Bureau accredited charity, CHM has helped its members successfully share over $5 billion in each other's medical bills for nearly 40 years. To see if CHM is right for you, visit online at chministries.org budget. That's chministries.org budget. thanks for joining us america rachel cruz ramsey personalities my co-host today here on the air open phones at 888-825-5225 heather is with us in Topeka. Hi, Heather. How are you? I'm doing good. How are you? Better than I deserve. How can we help? Okay, so I'm an incoming freshman at a public university, and I'm trying to figure out how to find funds. Well, not necessarily find funds, but manage my money through college so that I can graduate debt-free.

Good for you. That's a great question. Heather, how much money do you have saved right now? Well, my parents have been saving. They've been very, very, very gracious, and I am so lucky to have them. I have quite a few different funds. I have CDs, a mutual fund, ESA, and a savings and checking account. Um, total that is up to $59,000. Um, I will come up with like coming up soon because my car is starting to die and I'm trying to figure out how to cashflow. Uh, what, what's wrong with your car? and I'm trying to figure out how to cash flow. What's wrong with your car?

Well, so it's an older car. It's got 1,000 miles on it. You're cutting out. It's got how many miles on it? 180,000. Typically, that's not a lot, but we took it to a shop, and they said it cost $1,500 to fix it. What's it worth?

It's not worth that much. Okay, so you wouldn't fix it? I don't, yeah, so we're not fixing it. So how much did does school cost? Well, with all of the scholarships, I think the first semester will cost $5,000, but that's not going to last. Like I'll have to go to school for seven to eight years to be what I want to become. What are you going to become? Either a surgical nurse or a nurse anesthetist. So I have to get my four-year bachelor's degree and then go back to school for either anesthesia or just other certifications.

Okay. Have you mapped out what all of that is going to cost? No. I just thought, well, I didn't even really get how much it's going to cost this semester. I think the balance this semester will be $5,000, but it'll go to the college that I'm going to. Are you able to live at home and go to school? I can, but I'm in the honors honors program they want me to live on campus with the honors students yeah i want you to too but you don't have any money so it's not really an option you want to be a nurse anesthetist you don't want to live in the honors dorm yeah one's one's a high calling the other one's not so um be great unless if they want to pay for it and if you can live there for free that's fine Yeah. One's a high calling. The other one's not.

So be great. If they want to pay for it and if you can live there for free, that's fine. But I don't think that's what they're offering, is it? No, it's only a $500 scholarship. Yeah. But it costs you how much to live in that dorm? Well, total cost. The dorm. I'm not sure.

The dorm is probably, with the food meal plan, is probably close to $10,000. Yeah. And you can save $10,000 by living at home? Yes. Yeah. Done. Ding, ding. Okay, we just moved that money.

All right. So you're going to sell your junky car, and you're going to get you a little better junky car, but not much better. But not much better. A $2,000 car. And in case your dad and mom aren't walking with you on this, let me tell you what kind of $2,000 car to buy. Ugly. But very reliable mechanically. Okay. Yeah, that's the problem with mine. It's not mechanically. Okay.

Yeah, that's the problem with mine. It's not mechanically sound. Yeah, one of my buddies picked me up the other day to drop me off at the shop in Big Red. Big Red is a 1994 Granada land yacht. Land yacht, okay? 22,000 actual miles it had been sitting in his grandmother's garage it is pink it's not really red because it's faded it is the ugliest freaking car i have ever seen and it is so reliable and it's 500 bucks but only 22 000 miles on it now you but you got to give a car like that a name but you know what that name is that name is nurse anesthetist school you know what a nurse anesthetist

makes i'll tell you what they make a lot a lot 300 400 grand some of them okay so i want you to go get that school and drive anything you want later because you drove big red okay and i want you to live at home so you get that degree because you got a great career path but here's here's a rule when you're setting goals and rachel and i talk about this all the time we talk about here in our business all the time begin with the end in mind steven covey said in his book the seven habits of highly effective people what that means is you need to go ahead and lay out exactly what we're going to do. We're going to live at home, and we're going to do this, and it's going to cost us this. I think you can get through undergrad there for less money than you have.

Okay. If you live at home, matter of fact, I'm positive you can, that you can get through undergrad in an in-state school, an in-state public university in Oklahoma or in Kansas. I'm sorry. And you can get through for less than $60,000 and buy a $2,000 Big Red. Yeah, and I would say, Heather, you don't have to buy a Big Red. Just get you a little black Honda Civic.

Call it a day. Do what you got to do. Dave, let's talk about the ugly cars. You can find a cheap car that's just black. Yeah, but don't concentrate on it. I know people that want a little Mazda 626, and the stupid thing's got 180,000 miles on it. But it's sexy when you're sitting on the side of the road broken down. Right.

I think, Heather, I don't want Heather to take you literally. If it is big red, it's great. But I'm just saying, you can find a great $2,000 car that's a black Honda Civic. Well, that was a $500 car. True. So that's what you got to do. Get you an old car. It's fine.

And then you need to map out very specifically what this school is going to cost you for four years. Look at your ESA. Look at the growth. Look exactly what's going to happen. Map out how much money, if you need some each semester how much you need and then how many hours you have to work to fulfill that and then you're looking on to to medical to medical school much easier to work a bazillion hours in undergrad than it is in grad school yes much live oh live like the classic college student just broken working no not even no don't live like

you're not playing bear pong you're working don't you know classic classic college student is like broke and you are working like that's like that's a college student you eat ramen noodles that's what i did in college yeah you're broke you don't have money so like that's how you need to live it's because i'm a good dad that's right that's why you had ramen noodles in college built character turned i'm not complaining about it at all i'm not complaining i'm just telling heather you're gonna have to work and you're gonna be broke and it's fine like that that's the time to do it you don't want to be broke and eating ramen noodles at 32 years old with two kids well you don't want to do that you call me you're four hundred thousand dollars in debt that's right

because you wanted to be a nurse anesthetist and um so don't you know you can do this you're a bright young lady this This is very possible. All we did was take you through the first couple of steps of making decisions that cause you to hit your goal. Once you have your goal, you say, this is the goal. I want to graduate here. I graduate in six years, 6.5 years, and here's a program I can do that in. And that's about really what it'll take you. And here's a program, and here's a less expensive program,

and I've got to get qualified for that, and I've got to get scholarships, and I've got to drive a cheap car, and I've got to live at home. And what has to be true for me to be able, with my $59,000 worth of stuff, what has to be true, how much money do I have to make, how much money mom and dad ship in in addition, mom and dad have been generous already, so that we hit this goal. And if you come out of school as a nurse anesthetist, 100% debt free, touchdown, baby. Touchdown.

I mean, the financial goal, the financial milestones you will be able to hit will blow your freaking mind. Or you'll spend the next decade cleaning up the mess because you didn't have a plan. So you are too smart to do it the wrong way. You're going to do it the right way. You called here. Thank you for the bravery to do that. I applaud you. You're a rock star.

Develop a detailed plan of what has to happen and what prices you're going to pay to get there. And it'll be worth it. You can do this. This is The Dave Ramsey Show. to get there and it'll be worth it you can do this this is the d of Ramsey Solutions on the Dead Free Stage, Alex is with us. Hey, Alex, how are you? Hey, Dave. Hey, Rachel. How are you? Welcome. Where do you live? I'm from Hartford, Connecticut. Cool. Welcome to Nashville. Yeah, thank you. And all the way here to do your debt-free screen. Uh-huh. How much have you

paid off? About $193,900. Good night, girl. Wow. How long did this take? 19 months. Okay, this is a story. And what's your range of income? I started about $100,000, worked its way up to about $160,000, and then COVID shifted that a little bit since then. Okay, cool. What do you do for a living? I'm a software engineer for data analytics with a healthcare company. And you are kicking butt. Yeah.

Well done. Very well done. So $194,000 in what? 19 months. Student loans? No. What was it? It was my house.

You paid off your house! Oh, yeah. Alex is weird! This is a weird girl! I am, for sure. Way to go! How old are you? I'm 27.

Oh, my gosh. Woo! Yep. You are awesome! All because of you. You did it. I didn't pay any of it. What's this house worth?

It's probably about $270, $280 now. Good Lord. That is amazing. Yep. I really hustled. You've got to be like on air. It feels great. That's incredible.

It feels great. What made you, Alex, want to do this? Because at 27, a lot of people just kind of settle in with the mortgage and just say, you know, it's just the 50, you know, we'll have 15, 30 the 50 you know we'll have 15 30 years yeah why did you decide to kill it well i well my story started before then probably about 10 years ago i graduated college didn't know anything about money but happened to listen to podcasts got books from family and was able to pay off about 30 000 student000 in student loans pretty quick. And I love learning, so I kept listening to the podcast. I kept reading your books, and it just was more and more ingrained in me over all that time.

So I bought my house about two years ago, and I thought, well, I'll probably do it quicker than 15 years, but I wasn't going to go super gazelle. Then it became a game. If I throw this bonus at my house, if I get an extra roommate to live with me and I bring that in, if I get an extra side hustle, I think at one point I had up to six side hustles. Wow. So I was doing a lot. I liked staying busy. What kind of side hustles?

What was the most lucrative side hustle? Probably having roommates for sure. Okay. Anywhere between two and four at a time, but I had a couple of catering jobs. I turned all of my passions into hobbies. So I love fitness. I became a personal trainer and a bunch of other little side miscellaneous things, but it became a game. The more I could throw, I saw my spreadsheet nerd through all this extra money, how many months it would take off of my mortgage, being able to pay off the house. And eventually, you know, down to 10 years, down to eight, down to five. And then it was 19 months. And I said, you know what? I got to do it. So I did it. Knock it out. Yeah. Amazing. And your family's with you.

They are. So what have they been saying about this? Wow. Not much they can say, but yeah, they're very impressed and they helped me along the way. Parents became debt-free last year, so that was helpful along my journey. Yeah. Friends from Connecticut following the plan just became debt-free, so we're kind of doing that together. Yeah, everyone's very happy. Human whirlwind, everything you touch gets knocked over. Well done. Something like that. Well done. Well done. Wow. So what was the hardest part? Are you? Yeah, because you're what? 27? 27. So man, so okay, as a 27 year old, I mean, you're working like crazy. Yeah. Making sacrifices, obviously not doing like anything crazy extravagant with your bonuses that you're getting none of that.

So, like, how does that work? Because some 20-year-olds are watching or listening and they're thinking, oh, man, I don't know. Is it worth it? She didn't have a very good life. Well, I was still a little bit in poor college student mode, maybe a step above that. But I was able to save a lot and I didn't really need to spend money. I knew what my needs were versus wants and just prioritized. I wanted to get my house paid off.

It seemed like a great goal. So that was my priority. I stuck to it. Have you always been, like, goal-driven, like, since you were a little kid even? Probably. Yeah. Family's shaking their head, yes. Entertainment for you is knocking stuff over. Yeah mean knocking goals over set a goal that's entertaining

more entertaining than going out to a club or going on a trip entertaining for you is knocking something down get knocking it out oh yeah raising something up i'm gonna hit that and then you hit it yeah you just you're built that way that's's incredible. Yeah, yeah, very exciting. And you applied it to this subject matter. Yeah. Yep. Wow. Exactly. And obviously to your career as well, because you were making an outstanding income for a 23-year-old.

Mm-hmm. So just touchdown, girl. Yeah. Way to go. Score. So great, Alex. So what was the hardest part as, you know, I think of the 20-year-olds watching right now, and they're thinking, that is impossible.

I don't even know how, like, how did she do that? Like, what would you say is like, oh, yeah, this was the tough part of it. But obviously you still did it. Because it's not all unicorns and Skittles, I mean. Well, maybe it is unicorns and Skittles. So I'm a very disciplined person. And so it really wasn't that difficult for me. I knew what my goals were and I stuck to it.

Some days, last summer, I probably worked 16 to 18 hours at three or four jobs a day. You were tired. I was tired. I would come home and I'd have roommates all over, which they were all great people. But sometimes you just need to relax and rewind. But I knew what my goal was. So as tough as that might have been I was able to get through it amazing absolutely incredible Alex absolutely incredible I'm blown away the bumper sticker on

her refrigerator door says no whining I mean she knocks it out you're incredible you're absolutely incredible very very very well done okay so we have somebody out there that has a mortgage or has a large student loan debt that's in your age group. And we've all read news reports that say some people think in any age group, but always in your 20s, you're more susceptible to it, that I'm stuck and I can't get ahead. So what do you tell them from your life experience? You literally paid off $194,000 in 19 months. So what do you tell them the key to getting out of debt is? Because it can be done. You're standing here as proof. Yeah. One of my favorite sayings that started when I was big in fitness came came into my financial life, is sacrifice today for a better tomorrow. So you'll make your life better with the things that you do today.

You say multiple different versions of that same quote throughout your show. Live like no one else so later you can live and give like no one else. Yeah. And it feels great when you're there. So just pursue. Yeah. So basically it's a short-term sacrifice and you can do almost anything for 19 months. Yeah. You really can't if it's only 19 months. If you did that for 19 years,

we would call you a workaholic and you'd be out of balance psychologically and everything else. But for 19 months, it's paying a price to win the Super Bowl. And now I have so much freedom because of that. You can do anything you want to do the rest of your life. You're going to be a multi, multi, multimillionaire before you're even 40. That's cool. The math is unbelievable. I mean, you take 150 grand a year coming in and you have zero payments in the world, no house payment even. And you start investing just a decent share of that. It's amazing. While you have an incredible life of consumption and generosity, but just investing a decent share of that, it turns into serious money. So how did it feel the moment you

paid that last mortgage payment? It was great. I was in the office and it was two days before Connecticut shut down for COVID. Whoa. And so I was able to do a little I'm debt-free scream with my family because no one was in the office. I was alone. But it was great. It was great. It felt amazing. Well, and then COVID hits and you got no payments.

Exactly. I didn't have to worry. I wasn't really worried about jobs in particular then. It was pretty stable, but I still had that in my pocket. Yeah, you didn't have to worry about it. You're so impressive. What a hero. Thank you.

Well done. You're inspiring to our viewers, our listeners, everything else. Absolutely, absolutely incredible. All right, we've got a copy of Chris Hogan's book for you, Everyday Millionaires, because there's no question that's the next chapter in your story. Yep. So very, very well done. Alex from Bloomfield, Connecticut, 27 years old, $194,000 paid off in 19 months.

That's her house and everything. She is 100% debt-free. She's officially weird. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah!

Woo-hoo! Wow! Absolutely incredible. Amazing. That's so impressive. Wow. This is the Dave Ramsey Show. Thank you. our scripture of the day first samuel 16 7 but the lord said to samuel do not look on his appearance or on the height of his stature because i have rejected him. For the Lord sees not as a man sees. Man looks on the outward appearance, but the Lord looks on the heart.

Herman Melville said, It is better to fail in originality than to succeed in imitation. That's good. Very good. All right. Up next is going to be Jacob, and Jacob is in Washington, D.C. Hey, Jacob, welcome to the Dave Ramsey Show. Hi, Dave.

Hey, Rachel. Thanks again for taking my call. Rachel, congratulations on the upcoming publication. I'm looking forward to preordering today as well. So I'll just kind of jump right in. I am just starting. I just finished reading your books, Dave, and I took a bonus pay from work and used that. Traditionally, I would just throw that in savings and let it sit, but I actually used that to pay off my credit card debt. So I just paid off about $35,000 in credit card debt, and I'm looking to start chipping away at student loans, which is 50 grand for me. So thank you. My question is actually, I'm driven to go Gazelle, but I'm a little hesitant, kind of multifactorial. One,

obviously the state of the world right now, but also my company might be going through a restructuring. So I'm very highly motivated to go in Gazelle after paying off the credit card debt. I'm a little bit hesitant, so I would love to have a little bit of advice from you. Okay. Okay. Well, whether you – I wouldn't not – I would either go Gazelle or I would just push pause and pile up cash. Okay. You're either not doing the plan or you're doing the plan with Gazelle. Does that make sense?

And pushing pause is a reasonable and a smart thing to do depending on the level of uncertainty that you've got. All jobs are uncertain. Some people are under the illusion that they're not, but they're all uncertain. Everyone is on straight commission. Try not going to work for six weeks. You'll quit getting a check. Everybody gets paid when you work period and so you know everyone has a level of uncertainty

whether they perceive it or not now yours is added because of a restructure and some covid implications so what would you put percentages percentage of probability that you're going to lose your job before you get the 50K paid off? I would probably say less than 10% now. However, with a potential second wave, that would exponentially increase within the next six months. Okay. So what do you make a year?

Around $140,000. And how quick do you pay off $50,000? Is that your only remaining debt? I have a mortgage as well. Okay, but I'm talking about your baby step two gazelle intents. Okay, so $50,000 makes you debt-free since you cleared the credit card. Do I understand correctly? Correct.

How fast are you going to do that? I would like to do that as soon as possible. Give me a date. Number of months. Let's do by end of year. I would like to have my student loans paid off. So you're going to pay off $50,000 in six months, making $140,000. Correct.

Pretty aggressive. That's like zero life. I'm not even sure that you can do that mathematically, but let's just say you did. Okay. So then what happens, during that six months, you have almost no probability of being laid off, correct? Correct. But you'd be 100% debt-free. And then after that six months, your probability of being laid off would be what?

I would say close to 30% to 50% in their ballpark, depending on how they're restructuring. And what do you do? What is your career field? I work in medical sales. Oh, good. That's wonderful. Okay. So, and if you've been successful doing that,

you can do a lot of different stuff, right? Correct, yeah. Including other medical sales. Very transferable skill big time yeah and i think you said jacob if a second wave hits that's the probability of you losing your job but we don't oh i mean you're talking about second wave of a covet or the restructure of the restructure oh my bad sorry i'm in covet brain i was thinking the second wave that's why i guess it could be either you guys are both correct sorry yeah so the restructure is going to have two waves of of of occurring and your your probability being laid off in the second

wave comes up here's what i let me ask you this are you going to get more news during the six months that's going to give you an indicator up or down? Yes, absolutely. That's usually how the leaves end. Yeah, the rumor mill or whatever increases, and you get either more secure or more scared, right? Correct. Yeah, why don't we crank it and play it, and we can keep our ear to the ground. Let's listen to what the tea leaves are saying.

Sounds like a plan. I just needed that external guidance. I appreciate that, absolutely. Yeah, I'm just thinking through. All I'm doing is asking you questions to kind of think. So if overall your worry is 10%, period, the answer is no. You go gazelle and tense because everybody's got a 10% worry. Some of them just don't know it.

But the month-to-month reassessing, I think, is great. Yeah. So staying gazelle intense. Go a month. But then if there's like, oh, no, I really need to pause right here because in two months it's going to get bad. Sure. Pause it then. If you get news in September that there's a 60% chance in January you're going to lose your job, push pause. Yep.

Pile up cash. But that's new news that you don't have today. Right, right. And you just work that through. You're exactly right, Rachel. Just do the month-to-month reassessment. And so, yeah, what you're doing is you're setting up a war room to do a battle plan, and you're just fighting your way through this.

And you're going, okay, how far can we extend that without getting ourself in trouble? But at the point that you can see a true probability not a worry of a layoff at that point push pause and pile up cash wherever that is and just constantly be watching that and and that's a north of 50 probability you go okay there's a better than half chance i'm gonna lose my my job. Boom, push pause. I'm kind of generally worried. No, go for it. That's a good principle to run on. James is also in Washington, D.C.

Hi, James. How are you? I'm focused but not finished. How about you, too? Better than I deserve. How can we help? Got a good problem, I guess. My in-laws have very generously offered my wife and I $250,000 to help with the down payment on our home.

Obviously, the amount exceeds the yearly gift, so they want to structure it as a family loan. And they're telling us that it's one that we won't have to pay back. So I just want to kind of get your guys' feeling on how it could potentially impact our relationship. If we say yes, then we'll technically owe them a lot of money, and if we say no, they may be offended. My wife is fully on board with taking the money. Oh, it's her dad. Yeah, that makes sense.'s got a more she's more

comfortable with it i i would do it i would want it all in writing and it sounds like this okay uh that it's going to be forgiven at the maximum maximum allowable annual gift rate and in the event of death it is included in estate, and there will be zero call on the note. In effect, that's not debt. It's an advance on your inheritance then. Does that make sense? You don't have payments to your in-laws. Under no circumstances do they have any grounds to ever call the note,

nor would any other heirs have the grounds to call on the note. Upon death, the loan is forgiven and can or might be applied to the estate balance. In other words, you might lower the amount you inherit versus your brother-in-law. Okay? You see what I'm saying? Maybe they hadn't done that for the 17-year-old yet or whatever. I don't know. But, yeah, 100 percent forgiven at death or applied to the estate and uh and it's forgiven at the maximum allowable which is four times the annual

by the way okay so he could he you know father-in-law can give you mother-in-law can give you father-in-law can give your wife and father-in-law mother-in-law can give your wife that's four times annual. Yeah, and that's the maximum forgivable. And that's the way I would set it up, and that way it's not debt, and it doesn't get weird. That's a good question. Nice gift. Rachel, good job.

Thank you. Thanks for having me on. That puts this hour of the Dave Ramsey Show in the books. We'll 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. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top four most popular podcasts last year.

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