The Ramsey Show - App - How Savers Can Overcome the Reluctance to Spend Money (Hour 2)

Episode Date: January 31, 2019

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. And some say the advice is worth what you pay for it. Justin is with us in Portland, Oregon.

Hi, Justin. How are you? Good, Dave. Pleasure to talk to you. You too. What's up? Well, my wife and I got some medical debt here a while back. And we have a bunch of different offices trying to get money from us, and it's a little bit more than we can just pay off a lot of it, like $100, $200. And we were wondering, since it's hard to keep track of, can we maybe get something to kind of condense those together and pay on them

and get them knocked out? Even though they're not interest, it's just such a headache to try to keep them all together. Like in line, we keep missing them. How many are there? Oh, probably 15, 10, 15, because it's just like, you know, you go to the ER, the doctor, the hospital, the x-ray people. Why is it difficult to make a list of 10 or 15 bills and pay them? That's fairly basic.

The unfortunate thing is I didn't have all of them and then you get another one and you know just busy with work it's difficult to try to keep track of them all you know you're not spending enough time managing your money right you turn off the television i mean seriously making a list of 10 bills is not that big a deal. And updating it once a month. I mean, because you got a new one in. And you said the balance is only $200 or something, right? Yeah, I think total we owe about $6,000. So what's your household income?

Take-home, we're about $4,500 a month. So, you know, about $50,000 a year. Okay. And, well, that's your take-home, yeah. Yes, sir. So... Probably more like $80,000 if you did gross. Okay.

So you got money going out for your 401K? Yes, sir. I have UPS. So I have a pension through UPS, and then I also have, like, I think 10% going for my 401K. Yeah. I would temporarily stop that until you clean this mess up, and I would get you on a written, detailed budget. You should be able to pay this $6,000 off in six months and be done with it.

And those little bitty ones will all be gone in one month. The little $100 ones and $200 ones will be gone in a month once you start doing a written budget each month. So are you a UPS driver? Yes, sir. I do freight for them, like semi-truck. Oh, you're a truck driver. Okay.

You're not a delivery driver. All right. And what's your wife do? She's a hairstylist. Okay. All right. Are you home every night or are you due over the road? No, I'm a local pick-up-and-deliver.

We just do freight. It's just like UPS, but imagine heavy stuff. Gotcha. So it's like local freight. It's all in town. Yeah. I got you. But you're still working your butt off.

I mean, you UPS guys, you work. 10 hours, 10, 12 hours a day, five days a week. So that's why it's hard to get time to deal with it, you know. Yeah, five days a week. Yes that's why it's hard to get time to deal with it, you know. Yeah, five days a week. Yes, sir. At least two off days. Budget an hour, budget an hour, you and your wife, set aside, no kids, no TV, and start doing your written plan.

Because here's what's going to happen. When you write it all down, you're going to smack yourself in the forehead and go, Dad, gum it. I feel like I've got to raise. Because the fact that you're not making this behave is causing all these little mosquito sized bills buzzing around your head to give you great stress. And they're too small to give you great stress. Yes, sir.

Another question I had in this same topic here is we have a $20,000 car loan, but it's got a 100,000 mile bumper to bumper warranty. It's a pretty new car. It's reliable. Other cars paid off. We were wondering if we should sell that, get out of the $400 a month payment, and buy her mom's car that's been gently used for, you know, $4,000 or $5,000 alone again, but much less.

If you're not going to sell it, you need to look at your budgeting process that we're talking about and be able to see your way to pay it off within two years. I think you could be debt-free, all the medical bills and the car loan. Do you have any other debt that is not your home? No, sir. We just rent the home from her parents on the home. We just rent it from them. I think that's about it, actually.

So here's what's happening, okay? What are you guys, 28? We're mid-30s. Mid-30s actually. So here's what's happening, okay? What are you guys, 28? We're mid-30s. Mid-30s, okay. Here's what's happening. You guys work your butts off, and the money comes in, and the money goes out, and you have no idea where it went. You're just normal people.

You work really hard, and you work too hard to be broke as you are. You really do. I mean, you work hard, both of you. Stand are you really do i mean you work hard both of you stand on your feet cutting hair not an easy job putting up with people not an easy job delivering the stuff you know the work you're doing it's not easy job so you guys are working your tail if you work too hard to be broke and so i'm going to challenge you i'm going to be your coach i'm going to do locker room and say all right halft, time for you to get out there in the second half and win because you're behind on your score right now by $26,000. And you're either going to sell this car or we're going to pay it off, but I think you

can pay it off if you like it. Yeah, we do. Okay. And then you're going to have to just start making intentional, very careful decisions with every dollar. And it doesn't take an hour a week to manage this. That's all it takes. And to make these dollars behave.

But you guys are just run, run, run, run, and you're really tired when you get home. You don't feel like screwing with anything. Right. And so that's why you've got to set aside like some weekend time or something and just go, okay, this is our time, and this is the time we're going to commit to spending on managing money. We're going to get the EveryDollar app. It's free to use for your phone or your desktop, either one. You and your wife sit down and give every one of your dollars of income a name before the month begins.

Stop your 401ks temporarily. Stop having anything come out of your check. Get as much money coming home as possible, and then we're going to attack that $26,000 with a vengeance. If you'll do that, you can turn this around. If not, you're going to work your whole life, and you're going to end up with an old pay-for car and no money other than what you put into your 401K and what they set aside for you at work. But that's just, if you'll do this on purpose,

you'll have millions of dollars more, and you'll have a lot less stress on purpose. So that's what you need to do, dude. Hey, thanks for the call. Dave is with us. Dave's in Tulsa, Oklahoma. Hi, Dave. How are you? Hey, doing good.

So good to talk to you. We just finished last night number four, dumping debt. It's great. We are really enjoying it, my wife and I. It's been fantastic. Well, thank you. So great to speak to you live. One thing, I'm in my lower 60s.

My wife has at least 20 more years. She wants to work. She's younger than me. And we live very frugal. Don't have any debt of anything our house is paid cars paid no credit cards they pay them off every every single month awesome what's your question my question is um we have my mother passed away we have our house right next door to us. And my question is, we were thinking about purchasing it, you know, for an investment, and I would have to borrow $90,000. I just cringe at

the thought of being in any kind of debt. We really hate debt. But it would be, you know, 15 years or whatever, of course, with the option of doubling up on some payments. You know, we looked at home equity loans. I didn't like how that sounded. Well, you watched the lesson last night. I don't believe in debt. And I haven't used debt. I save up and pay cash for my rental properties or I don't buy them.

And I want to recommend the same for you. I'd save up and pay cash for it or I wouldn't buy it. You got the cash, that's fine. You don't have the cash, I wouldn't buy it. This is the Dave Ramsey Show. Your goal this year is to get rid of your debt, but here's the deal. In order to keep your momentum going past January, you have to make small changes that get quick results.

That's why you need to attack your debts smallest to largest. I also recommend you look for ways to find extra money to pay off your debt sooner. It's there, I promise you. Take a look at your mortgage. If you call my friends at Churchill Mortgage and request a five-minute checkup, they can help you find extra money. Churchill Mortgage Checkup has helped thousands of my listeners save big. In just a few minutes, the Churchill team can tell you how much cash they can potentially

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761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Our question of the day comes from Blinds.com. Brand new custom blinds from Blinds.com are the easiest and most affordable way to give your entire home a facelift. With Blinds.com, you get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the magic word, the promo code RAMSY, and you get the best possible deal. Blinds.com. Today's question is from Ricky in Washington. He said, Dave, I've just gone through my second beater car, tired of being on a first-name basis with the AAA tow truck diver.

I'm out of debt. I have my emergency fund saved, and I have the money to get a little nicer car. Having a hard time parting with it because I work so hard to save it. Can you talk a bit about the struggle people have with spending money, even when they have it to spend? Yeah, it's so hard to finally get some in savings, it's hard to release it, especially if you're wired as a saver. Now, I'm wired as a spender.

My wife is wired as a saver. Usually we fall in one of two categories. I think you're wired as a saver. She gets great comfort from having that pile of money as a saver she gets great comfort from having that pile of money more than she would get great comfort from having a reliable car me i'd rather have a reliable car um past the emergency fund you're at the you know this is an emotional thing at this point it's not a financial thing it's a i have the money but i have trouble releasing it and so what that says is you're just getting some you know it's a normal thing and it's

not a bad thing but it's it just says i get security from that extra money beyond my emergency fund um and i'll tell you this i i think it's something we all have to work at one of our money skills. There's really three basic money skills that you have. Spending, properly, reasonably. Learning to enjoy money falls under spending. Learning to enjoy life with your money, which is kind of what your question's about. The second one's saving. You've got to learn to save money for emergencies, for college, for retirement, which is kind of what your question's about. The second one's saving. You've got to learn to save money for emergencies, for college, for retirement,

to change your family tree, to build wealth. You've got to learn to invest. You've got to learn to ride the investment waves, right? And giving. The power of generosity to completely change you when you learn to give as the natural rhythm of your life. It changes everything. So giving, saving, and spending. Everyone has at least one of those that they struggle with.

Mine is saving. I'm a spender. No trouble for me to enjoy money. There's also no trouble for me to give money. A lot of spenders, it's easy for them to be generous. Because the release of money doesn't bother us as much as it does a saver. But I'm weak at saving. And that's why God makes me teach this every day i'm no

longer weak at saving but it wasn't my natural default i had to intellectually decide to have an act of my will to save and invest and really what drove me to do that as a spender giver is that i would have more to spend and give if I built more wealth. I can spend more and give more. And that's my only reason for saving. It's not because I just love saving money. I still don't to this day. So you're on the other side of this, Ricky, is what we're saying. You don't enjoy spending.

We don't know about giving. You didn't address that in your thing. Sometimes I can get spenders or savers like this to turn loose of their money first by increasing their giving. And then that kind of gives them permission to also enjoy the money themselves. But it would be a shame to save and work and not enjoy some of your money. And one of the things you should enjoy is a reliable vehicle. And you don't have a reliable vehicle. You've been doing beaters. And so, you know, you need

to go buy the car. You already knew that. You weren't asking about that. You already knew that. But maybe also take a little bit of that money and give it. Find some place to be generous at your church or find a couple that's struggling or a single mom that didn't pay her light bill for a year or whatever. But find something to do because there's something about giving that kind of then gives you permission down inside your spirit to also enjoy money because money's fun if you got some you ought to enjoy it you don't enjoy some nice things now if that's all you do and you don't save you don't give then you're just a shallow twerp right right? But, you know, to assume that just because someone has the ability to enjoy money means that they're greedy or shallow, that's just bogus. And the way you can tell is what percentage of their financial situation is going towards stuff for them.

And if all the money you make is going to buy you crap, then you're out of balance, you know? But if you're giving a percentage of your income and you're investing a good percentage of your income and you're enjoying some of your income on lifestyle purchases, travel, cars, clothes, whatever it is, then that's in balance once you're at baby step three and beyond. And that's where Ricky is.

But it's a really good question, Ricky. It's a good question for me to stop and just kind of rant on or vent on for a second here, teach on for a second, because sometimes people think, well, you know, no one should ever have a car like that what would anyone need a house like that for now i've got a friend that's worth about three billion dollars now a billion is a thousand million he has three thousand million he has 3 000 million he spent 6 million on his house

and people send him hate mail no one should ever have a house like that his house as a percentage of his net worth and his income is like you going through the drive-thru at chick-fil-a and buying a biscuit it didn't affect his life one iota to spend six million dollars on a house as a matter of fact that's a very conservative house for someone who has three billion dollars but see that see, that's where people get out of whack, right? And, of course, that's where people, you know, in our culture today, it's like this, it's an art form to judge other people, to get in other people's business.

Now, it's called Twitter. And what's intriguing is, is that people are so stupid, that this, you know, I need to tweet tweet this out because I'll stir up some people. This younger generation that is so technologically savvy, if I don't know how to work my iPhone, I can hand it to one of you in your 20s, and you can fix it in a heartbeat. You're so technologically savvy,

and when it comes to understanding human nature, you're just stupid. Because the number of you on the Internet that believe everything you read on the Internet, that's just absolutely stupid. I have a keyboard. I can type up whatever I want to type up and put it on the Internet, and you'll believe it. And so you automatically assume when you read something that it's true on the internet a blinken said everything on the internet was true i mean

and they believe it hello a blinken was not yeah okay it's so basic it's that's the ultimate sarcasm right there but i mean it's nuts Because it's on the Internet doesn't make it true. And because you put out your opinion on the Internet doesn't make it true about what someone else purchased. Because you don't know what you're talking about. You should maybe mind your own freaking business. So that kind of comes into the same equation. Comes into the same discussion.

Your friend buys a car and you like got an opinion about it. Maybe you ought to just have an opinion about your own self. Because you pretty much suck right now and you got a lot of work to do on you. Instead of figuring out what's wrong with your friend and putting that on your little Facebook, Instagram account. Jeez, man. And then everybody thinks it's true just because you had an opinion. People believe anything that's printed on the Internet.

It's just ridiculous. Just automatically assume that it's true. That's just dumb. This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and a struggle to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right

amount of term life insurance, and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to Zanderinsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and

responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Thank you for joining us, America. Chris is with us in Los Angeles. Hi, Chris. How are you? Hi, Dave. I'm doing well. Thank you for taking my call. Sure.

What's up? I'm a pretty new listener, but the good thing is with a little cleanup, I should be in baby steps four, five, and six in no time. Good. My question is on my mortgage. So currently, my minimum mortgage payment is about 28% of my take-home pay. Bad news is it's on a 30-year 7-1 arm. I've been paying about an additional principal of $1,500 a month that I'm expecting to continue. And I'm a math nerd, so I think I should pay off my loan in the next 7 to 8 years.

Given that, should I go ahead and refinance to a 15-year fixed? My fear is that my minimum payment ends up being about 40% of my take-home pay at that point. Yeah, which is about where it is with what you're paying on extra. Right. With what extra you're paying, you're taking it over that. Yeah. Your $1,500 is what I'm talking about, right? But the only problem is we're locking that in, and we don't give you anything.

The downside with the – I would never tell someone to take out an arm, as you've already discovered, even as a new listener. And the reason is we're in – it's been 60 years since interest rates were this low, and so you'd want to lock that rate in always. And yours can go up – you said a 7.1? Is that what you said it was? Yeah. So it can go up 1% a year for seven years, hypothetically, maximum.

In about six years will be the first reset, and it can go up 2%. And then one year after that, it can adjust. Oh, okay. Every year. Oh, that's what you meant by 7.1. Okay. So it's not an annual cap, or it doesn't start annual for six more. Yeah. What's your balance?

What's your balance? $475,000. Okay, and your income? $180,000. Good. What do you do for a living? I'm an accountant. Good for you.

Well done. Okay, I'm hearing a lot of things. Number one, you're already debt-free, or almost. And number two, you're systematically prepaying this thing down to the tune of an extra $20,000 a year, give or take, throwing at it. You think you're going to be done before it starts adjusting much, or almost done. A little bit after, but at the point where I don't think the interest rate matters much because it's mostly principal at Benton. Well, that's not how it's calculated, but the interest rate will matter, but it'll be such a small balance that it's calculated on that it won't matter much.

So that part of the statement's true. I would not put it on a 15 and take it to 40%. I know that in your case. And I wouldn't jump up and sell the house in your case because you've got a plan. You've been working a plan already before you got to me even. So this is not an out-of-control situation. I don't like uncertainty on your home. I don't like risk, and this represents risk, and that's scaring me.

So your current APR is what? Three and an eighth. I would just go ahead and refinance it on a 30. Okay. The refinance cost is lost. Why would you pay the refinance cost is lost. Why would you pay the refinance cost? Whatever you spend on the refinance will be your buying insurance, that something's not going to happen.

I mean, let's say that things don't turn out over the next six years exactly like you've got planned, like you got married and had three kids or something, you know, and all of a sudden you're like whoa i can't pay extra on this anymore and you know and then all of a sudden you're still sitting there looking at 250 000 and then that stupid thing starts adjusting you out of your house um and that that life happens in these scenarios it doesn't all run in a vacuum and so i i'm willing to spend the cost of refinance, and you'll end up with approximately the same interest rate to take a 30-year mortgage today fixed to get rid of the arm. And then let's run your plan out.

At least if your plan doesn't work perfect, you're still going to have a fixed locked-in situation, and that volatility doesn't run you out of your own home later. So, yeah, that's kind of a middle ground in your case. You know, you make really good money. You're really good with math. You're an accountant, for God's sake. You're smart. You're on point. You're being intentional.

So there's a lot of positives in this story. Those are variables that are controllable. You control you. And so, you know, if I heard a lot of sloppiness in your background and in your approach to this, I'd probably be telling you to sell the house because you've got too much house. But I think you can make it through it. And obviously, Los Angeles market is a great market to own some real estate in. It's going to go up. Dan is with us in Grand Rapids. Hi, Dan,

how are you? I'm doing very well. How are you, sir? Better than I deserve. What's up? So I have a question regarding two things. I am currently a third-year undergrad, and I'll be graduating next year. I have two big expenses that I'm looking towards in the future, one is a study abroad trip I'm taking this time next year, and then grad school after so i already have a little bit of money saved up i have no debt i just want to know like what kind of funds what i should do with my money that i'm going to put towards grad school so it can work best for me okay you're not going to have time for it to grow much or to ride a cycle if you put uh you know ten thousand dollars aside and the market drops ten percent you got nine thousand dollars and and that's not a big deal if you got us if you got time to ride the roller you know, $10,000 a side, and the market drops 10%, you've got $9,000.

And that's not a big deal if you've got time to ride the roller coaster out. But you're going to need that money about the time the market's screwing around with it. You have a fairly short planning window is what I'm saying. And so I'm not going to try to make money on it. I'm just going to park it in something safe like a money market account. And, you know, how much money have you got saved? I personally have $1,600, and then my parents are great people, and they have about $5,000 left for me.

Yeah. I'm not going to try to make $500 on this instead of making $50 and lose some of it. Okay. It's too precious, these dollars are right now. And so what are you going to study in grad school? Well, right now I'm studying sport management and Spanish, a double major, so I think I'm going to do sport administration or go for an MBA with an international business concentration.

Okay. All right. Sports management, your graduate in sports might be what? Sports administration, so sports business essentially. Gotcha. Okay. All right. Give you a suggestion.

It's not an absolute rule, but I probably would do the MBA and take some sports management classes. Okay. Then you can enter either field. That MBA's got a lot broader brush, a lot of different things you can enter either field that mba's got a lot broader brush a lot of different things you can do uh and then it'll still work going into sports management especially if you put some of those in your pocket while you're there like i did a bunch of grad psych work while i was doing undergrad with no intention whatsoever except i wanted the knowledge and with what i do every day it's turned out to have been a good investment.

So, you know, I had no intention of becoming a counselor. I had no intention of getting a master's and that kind of stuff. But I went ahead and took it just because I was interested in it. And so you can, you know, put another feather in your cap, so to speak, another tool in your belt that way. You do whatever you want, but that's just an old guy looking from the outside at what you're studying. Because I always want people to get a good rate of return on the investment that they make in education. And the best way to do that is the education leads them to lots of possible options where they make a lot of money.

And that gives you the rate of return. And so if you study something that's too nuanced and too narrow, you might struggle. And I'm not saying sports is too nuanced or narrow, but it is more narrow and nuanced than a general MBA. An MBA is a great field of study. There's a lot of different stuff you can do with it. I've got a bunch of them on our team here, very smart folks, and I've learned a lot from them over the years. So, hey, thank you for joining us.

Open phones at 888-825-5225. We are glad you're here. We appreciate you being there. Kathy's on Facebook. Why do I pay taxes on Social Security? Is this not a double taxation if I paid taxes when I was working? Yeah, it is. I can't answer that.

You'd have to call your congressman, your senator, your president, and tell them you don't want to pay taxes on stuff you've already paid taxes on. It's kind of like an estate tax. I pay all taxes on all this crap. I finally am able to save a little bit of it and leave it to my family. But if I'm due over $5 million of that, you want to take 55% of it called an estate tax. I call it a death tax.

But I've already been taxed on that stuff once. Pisses me off. I'm with you. So call your congressman. Tell him you don't want to be taxed twice. I agree with you. Like, Social Security is a bunch of money anyway. I mean, social insecurity is what it is.

This is the Dave Ramsey Show. We'll be right back. thank you for joining us america vanessa's in detroit Michigan. Hi, Vanessa. How are you? Hey, this is actually Adrian and Vanessa. We're married and we called in to get some advice on how we should pursue our path right now. Cool. How can I help? Right now we have $123,000 gross annually, but our take home is about $5,500 a month. We have $183,000 in student loans, about $10,000 in credit cards. Our rent is currently $675,000 in the apartment. We were recently married this year, and we graduated this year. So it's possibly going to be going up next month because we got it during the good time when everything was low.

Who's the doctor or lawyer? What's low. Who's the doctor or lawyer? What's that? Who's the doctor or lawyer? Oh, no, I'm a nurse, and she's a social worker. $183,000? Did I hear that right? Yeah. Holy crap.

It's been a little bit longer than we were supposed to be. Holy. What a mess. Yeah. Yeah. So what is your all's income doing 123 sounds low well um yeah we just started well i just started and she just got a raise with because she got her master's and i just graduated so that's where our income is right now who just graduated you're the nurse or the social worker we both graduated she got her master's and i just finished my um my rn degree okay so you're the nurse and she's a social worker um okay yeah all right now number one uh your take-home pay is wrong or your

gross is wrong or you got a bunch of crap coming out of your check that doesn't need to be yeah we have um we're still doing our 401k you're broke you don't need to be doing a 401k you're 183 000 in student loan debt you don't need to be doing anything that's the other question that we kind of had um because we're in a student loan repayment programs and um it drops off in 10 years so we're trying to we're in the process of trying to look for a house because our rent will be going up um when we renew in august no way possibly go up to eight hundred dollars no way and um we're trying to see if it'd be better to find a house no in that same payment range no no no no no no you are broke you do not need to buy a house with 183 000 in student loan debt you get the cheapest possible rent you can.

You need to get your take-home pay corrected and start bringing a whole lot more of it home, stopping all investing. You need to stop everything. And you need to keep living like you were broke college students because you are broke. And list your debts, smallest to largest. Pay minimum payments on everything but the little one and attack this. I'm not waiting 10 years to get out of debt.

Well, I think we might end up waiting that long. Why? That long. Why? It just feels like that, the way our income is versus how much we have. Okay, let's do a little math, all right? Let's do a little math. What did you guys make the year before you graduated?

Your students. Well, the year before I graduated um my income was about 20 000 yeah hers was hers was still 50 and we were at 70 at that okay so your income has virtually doubled in one year yes okay but i wasn't paying on anything but i got it i got it just hear me out okay if you were to keep your lifestyle super low like a fifty thousand dollar lifestyle and you make 123 that's seventy thousand dollars not counting taxes okay 123 minus 50 if you lived on 50 which is doable for a young couple getting started, as a matter of fact, the average household income in America is only 59. So I know it's doable, okay?

So let's say you lived on 50, and you put 20 in taxes, and you put $50,000 a year on this. $200,000 divided by 50 is what? Four years. I'm trying to write down everything you're telling me. Okay. That's all right. You have $183,000 in student loan debt plus all the other crap, right?

So if you throw $50,000 a year at your debt for four years, that's $200,000, isn't it? Yes. 50 times four. Okay. You're debt free. Now, here's what's going to happen. You're going to do it in three years because your income that you're giving me right here is your starter income. And as a nurse, you have a wonderful field, career field, that you are entering.

You have unbelievable income-earning opportunities. Okay. And your income is going to go up very quickly. And even if it doesn't go up at the particular job you're at, it can go up just by working the ER. You've got all kinds of places you can pick up extra jobs as a nurse and make serious bank if our goal is. Now, because I want you to get a house.

I just don't want you to get a house while you're broke because it'll kill you okay and so i want you to get this mess cleaned up because dude if you move in a house with all this debt you have to buy an extra bedroom just for sally may yeah i mean you this is this is a lot of weight and i certainly don't want to walk around with it for 10 years so my game plan for you guys would be that you get very focused and very intense you stop all investing temporarily you stop all saving temporarily you get on a beans and rice rice and beans no life budget like you were a college student making 50 grand and you throw every you squeeze every dollar out of each paycheck that you can find and you throw it at your smallest debt first pay that off your. Your next smallest debt, then pay that off. You don't borrow anymore. You get out the credit cards and cut them up.

You get in attack mode. Like it was like you were in the ER trying to save somebody's life. Clear, right? I mean, you got to get after it. That's what you got to do here. Because otherwise, you're going to waste your life away for a decade. You don't want to give a decade to this stuff. No way. I was thinking about how much would be forgiven so i thought that was a good idea no no because what you're

going to lose seven years of your life that's what you're going to lose yeah and you just don't want it's not worth it you the beautiful thing about your particular career track is you have the ability to make a lot of money as a nurse, as an RN. I mean, you really, you're always going to find employment, and you can always get extra employment out there. So did you say you guys just got married too? Yes. Cool. Well, congratulations. Have you heard me talk about, you sound like you're kind of new to all this,

have you heard me talk about our class, Financial Peace University? I know we've actually been through the class, and we're kind of redoing it right now. Yeah, you need to because you didn't get it. Because you just called me up and asked me to buy a house with $183,000 in debt, so that means you didn't get the class. Yeah, I guess so. Well, because the student loan repayment forgiveness wasn't addressed in the class. So we knew that we were going to snowball, but we didn't know about,

since it's forgiven, should we be making our minimum payments and allow it to be forgiven and just leave that income? If it wasn't a decade of your life that you were a slave, if it was three years, we'd talk about it, but it's a decade. And if you had almost no income upside potential and you got tremendous income upside potential. So, yeah, go back through the class then. Get a reset. Get refocused.

Get re-energized. Reset your goals. Jump on. Get every dollar's budgets going. You need to get over and stop your 401k. You need to do that already and you didn't do it. And you need to stop all savings temporarily, and you need to make sure no other trash is coming out of your check

and they're not overwithholding on you so that you get big refunds. You don't want a big refund. That's just you giving the government too much money. And we're going to just dial everything in, dial everything in, dial everything in. We're going to squeeze every dime out of your life, and we're going to clear this debt off the table fast. Then you save up your emergency fund, and then you go buy you a house. But that's the smart way to do it.

This is the price you're paying for having been unbelievably sloppy in your study process and in what you are willing to pay for your education because you guys have overpaid for your educations tremendously and you got a mess on your hands as a result so but you clean it up you can clean it up you got a good future but uh don't don't just fall into uh slavery mentality i'm going to be in there for a decade please don't do that please please please don't do that thanks for the call open phones at 888-825-5225. I've read that some people feel guilty after paying off student loans.

Is that possible? I don't think so. What would they feel guilty about? Most people cheer, dance, have a party, shoot off confetti, open a keg. Most people celebrate. I have never met anybody who said, you know, I feel really bad. I paid off my student loans. I have never in 30 years of doing this, I've never met anybody that said that.

Nope. Hadn't come up. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs and Kelly Daniel in the booth. I am Dave Ramsey and we will be back. Hey, it's Blake Thompson, senior executive producer for the show. You know, you can listen or watch Beanie Wear with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests.

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