The Ramsey Show - App - How Should I Be Saving and Investing Right Now? (Hour 1)

Episode Date: November 16, 2022

George Kamel & Kristina Ellis discuss: The latest updates on student loan forgiveness, How to invest and save money, Buying a house now vs. waiting, What to do with an IRA, Finding scholarships for trade schools. The value of HSAs. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm Ramsey personality, George Campbell, joined this hour by my colleague, Christina Ellis, bestselling author of Confessions of a Scholarship Winner. And we are excited to be taking your calls about money, life, student loans, forgiveness. Is it happening? Is it not happening? Nobody knows, Christina. It's been absolute chaos. And let me say, I am hot off the flight from San Antonio, where we ended our live events season for the entire year with our Building Wealth event. Many thousands showed up, and I love connecting with people.

It gave me so much hope for this generation, for the economy, for the world. It's amazing what happens when you stop reading the headlines and you get around real people who are wanting to improve their lives, regardless of what's happening in the White House. Yes, the energy is just electric. People are craving not only that information and inspiration, but to be around other people who are motivated and excited and changing their own lives. Yes. And so it's encouraging because the whole point of this event, yes, we talk about how to build wealth despite of whatever's going on in the economy. But at the heart of it is this idea that we have control over our financial destiny. We can't control a lot of things in life,

but we can control our habits, our behaviors. We can set goals. We can aim for those. And that is what causes people to succeed. Yes. And so what's happening with, I've just saw headlines floating around while we were traveling around the country,

but you've been keeping up with the latest and greatest on the student loan forgiveness debacle. Tell us what's happening currently. Well, it's pretty much feeling like the exact opposite of control, right? So many people are counting on this forgiveness right now. So many people have been promised forgiveness, have been anticipating it, but so far it's not looking so good. So this past week, another court blocked the student loan forgiveness plan. So Biden's student loan forgiveness is definitely in limbo right now. That's the second court to block this.

So people expecting $10,000 to $20,000 in student loan forgiveness don't exactly know what's going to happen. And there's just a lot of questions, a lot of anxiety in the air. Because as of right now, that pause is set to end on December 31st. So January 1st, payments are due. Unless they bump that back again, it's due January 1st. So I just think it's such an important conversation to have right now and a wake up call for a lot of people that, you know, this may not happen, which is kind of a scary thought, because a lot of people are counting on this right now. A lot of people, you know, they're not even thinking about making a student loan payment

right now. They're not thinking about that. So if you're in that position right now and you're really counting on that forgiveness, I would encourage you to take a moment and think through, you know, if this doesn't happen, how am I going to pay these loans off? Like, take this moment and think, how can I be in control of my finances? I don't want to just sit here waiting and feeling all this anxiety to see what the, you know, Biden administration is going to do, what Washington's going to do. Like,

take control of your own finances, get on a budget and start thinking through, what will my financial picture look like if this forgiveness doesn't happen? Yeah, well, 26 million people right now are in that limbo as the courts decide all of this. And the email came through at 3 a.m. after voting closed. And it was like, hey, we're shutting down applications for student loan forgiveness as we deal with this. And so it just goes back to what we've always said. Regardless of who's in office, never rely on a politician or a policy to change your life. Right. Control the controllables. You can't control whether or not they're going to do

this forgiveness. Like that is completely out of your hands right now. So the way to reduce that anxiety, the way to reduce that concern is to start thinking through a plan for yourself and what's going to work for your family. Beautifully said. Well, let's get to the phones this hour. It's a free call at 888-825-5225. You jump in. We'll talk about your life and your money.

Nathaniel kicks us off in Jacksonville, Florida. Nathaniel, welcome to the show. Hi, it's great to be here. How are you guys doing? We are doing great. How can we help today? All right. So I'm 17 and I'm sitting on $19,000 in the bank. I have two jobs and I make about $12 an hour. I'm wondering, where should my money be going? Gosh, Nathaniel, I just want to high-five you so badly right now. You're incredible. How did you get the $19,000? Just working your tail off? Yeah, pretty much.

I mean, the moment I could get to working, I started. And you've been working for what, two, three years now? Yeah. Wow. That's incredible. I'm about right. And so are you living with family? Yep. Okay, what you living with family? Yep. Okay, what are your future plans?

Are you looking to go to college, go into the workforce? Yes, actually. I got a college I'll pick out, and it's only going to be 10K for the full four years. Whoa. That's great. How did you do that? There are, you have the smaller state colleges that we have here in florida i just picked one that looks good and that's what i wanted to do so so what are you doing right now what's your

what are your two jobs um one is working as an associate for panera and the other is working for mcdonald's nice and what do you want to do in the future? What are you going to study? I'm going to be studying computer development programs and all that. Cool. So you want to be a software engineer, developer? Mainly a developer, actually. Awesome.

That's a great field to go into. And as you're finding out, you can do that and not spend $100,000 on a degree. So I love that you have a $10,000 college picked out. That's amazing. Is that $10,000 including housing and meals? Or what's your plan for paying for everything outside of the cost of tuition? Yeah, so I still plan to work while I'm going to college as well, but it's not that far away from where I'm living right now. It's like an hour and a half away, one way drive, but I could potentially make a move to be a bit closer if I need to.

And get an apartment with some roommates? Actually living with family again. I'd be like 30 minutes closer. That's cool. Okay. Well, what to do with this money? You have $19,000. I would not recommend you invest this money because right now we need to invest in Nathaniel and the next few years have a lot of question marks and unknowns. And so I want to make sure that we get you through college completely debt-free with a pile of money in the bank. And so the best thing to do with this money is to put it in a high-yield savings account and use it to get through the next few years as you graduate debt-free. And Nathaniel, I'm going to challenge you too, is to look into scholarships. You sound like a very on top of it young man, like you've really got a lot going for you. And if you can also just

save this money, I love that you're keeping it in a high yield savings account, that you're going to have that money at the end. But if you can also get somebody else to help pay for your education and award you for your accomplishments, I mean, that's just going to be a bonus, like icing on top of the cake. Absolutely. And part of this is going to be your emergency fund. You're driving a car right now, right? Yep. Is it pretty reliable? I have actually like two different vehicles that I swapped through. The car that I usually use is pretty reliable, but then I have another one that's 50. And you're paying for the insurance and everything on both of them? Not on both. So

this is where it gets interesting. One of them is my mom's car that she uses when she's not driving down and back from Daytona. Okay. So you're only paying for one of these cars? Yeah. All right. That makes me feel better. Well, Nathaniel, you're a bright young man. You've got more maturity than I had at 17. I'll tell you that much. And so it gives me a lot of hope for you. Get through college debt-free. Keep this money safe and sound. Don't go crazy investing it. You've got plenty of time to do that once you graduate debt-free with an incredible job. So proud of you, man. More of your calls coming up. 888-825-5225. This is The Ramsey Show. welcome back to the ramsey show i'm george campbell joined this hour by christina ellis and we're taking your calls at 888-825-5225 i appreciate all of you listening into this show. I heard from many at our live events.

They listen every single day relentlessly to stay motivated and inspired on their journey. So if you like the show, here's a reminder. Please consider subscribing, leaving a review, and sharing it with a friend. And another reminder, if you want to visit us, we are just south of Nashville, Tennessee, and it's always a good time in the lobby. Right now, there's a lemur named Draco who I just got to meet in the lobby. I think the guys are getting a shot there if you're watching online. And you just never know what you're going to stumble into. And so we love to meet guests who travel from all over the country, and we love to meet lemurs named Draco as well. It licked my ear, Christina. It made me very

uncomfortable. It was fun watching you squ Christina. It made me very uncomfortable. It was fun watching you squirm. Good times. So we're going to go to the phone lines now. Sean joins us across the pond in London. Sean, welcome to the show. Thank you. What's going on? Well, I am 31 years old, and my wife and I, fortunately, we've been fortunate to stay debt-free through our doctorate degrees. And it's time to buy a house. And I have never taken out any debts or anything ever in my life, and I'm really hesitant to take this big step, and especially with rising interest rates.

Sure. So you got your doctorate's debt free? Yes, sir. That's amazing. Was it through scholarships? Did you save? How'd you do it? It's through the U.S. military.

Oh, that's awesome. I guess I should say I have time commitment, but not money debt. Yes. Well, thank you for your service, especially as we celebrated our Veterans Day the other day there. Yeah. What do you all plan on doing with your degrees? So my wife is a stay-at-home mom. She's awesome.

And I'm a physician for the military. Cool. So how long are you going to be in London for? Just a short time, actually looking to buy a house in the U.S. What's the timeline for that? So looking to buy in the spring at some point, and we'll be in one place hopefully for at least four years or longer. Okay. And so are you moving in the spring or are you moving sooner than that?

Moving in the spring. Okay. Would there be harm in, let's say, getting a shorter-term lease for six months, 12 months, while you guys come back and figure out where you want to live, what neighborhoods? What's the rush and going, we've got to buy before we even get back? Yeah. what's the rush and going we got to buy before we even get back yeah actually we i mean i plan on being back by the time we are buying so but to answer your question there's there's no rush per se and is this city that you're moving to is this a new city are you moving near family or kind of what does the situation look like with your new placement

yeah so it is a new city and and actually, being in the military, I'm not sure where it's going to be. It's one of three, hopefully three places. But the concept of buying a house in this inflationary environment and the current housing boom or bust, I'm not sure, and rising interest rates kind of makes me squirm a little bit. Well, there's also just, you know, the fact that you don't have to rush. Like, it's not that, you know, you shouldn't buy a house or you should buy a house, but there's also just a lot of external factors, like the fact that this is a new city, the fact that you're going to move probably in four years, the fact that you don't know

the different neighborhoods, that you've been in another country for a while. So I would also just majorly weigh the personal factors in your decision because we can walk you through the financial part, but I think there's probably a lot of emotions to that decision. Definitely. I think so. Does it feel like, hey, we're successful, we worked hard, we're in our early 30s now, we should be homeowners. Is that kind of part of it that's driving this? I mean, kind of, but at the same time, I think part of it is, you know, when I started looking

at rent at, well, let me back up. I look at a house payment and I look at the proportion of money in a mortgage that goes to interest and that kind of turns my stomach sour. But when I think of the rent I'm paying, and one way, and I know this may be erroneous, but one way to look at it is to say, my rent is 100% interest. And, you know, I don't want to continue paying 100% interest with no equity and no forward momentum. Yeah. Well, you know, when you look at it as just a math equation on paper, it doesn't make sense. When you look at it as, oh, I'm buying myself time, I'm being patient,

I'm transferring risk to the landlord, to the owner, that I'm not having to deal with the headaches of home ownership, and there's all kinds of costs associated with that. And so I think you're ready when the numbers make sense. And that means we're not going to be as concerned about interest rates because we can always refinance later down the line if it goes back down. And when it comes to paying the interest, that house is going to appreciate over time. You are buying an asset that goes up in value over time. And so, yes, I hate paying interest and it makes me want to pay it off faster. And that's exactly what we did. And I think that's exactly what you're going to do too,

Sean. So as long as you stick to a 15-year fixed rate mortgage where the payment's no more than a quarter of your take-home pay, that will dictate how much house you have. And instead of it feeling like this giant, scary step, you go, oh, this isn't that much of our world. We can handle this and more. We still have margin to live our lives, to be generous, to pay off our house early. So that's the goal of living within those parameters. Yeah. And like George said, do the math, but also factor in the closing costs with real estate too. If you're going to be there four years as you're doing that math, remember that there are closing costs when you sell a house. So one, factor that in as you're doing the equation of how much equity you're really going to get over time and what it's going to cost you. And then just also,

you know, take your time. Maybe you do take that six months and kind of feel out the neighborhood because while it's, you know, great to be in the market, it's a great way to build wealth. We're seeing a lot of articles now with a lot of people having buyer's remorse where they rushed into buying a house during the pandemic. They got caught up in this, you know, white hot market and this floor green. They felt like the next step in life is I have to be a homeowner. And so they got in line with 60 other people and they were getting so competitive and aggressive that they just bought these houses that they didn't love because they felt like it was the next right thing to do. So yes, I would definitely weigh both and really feel through both. Do the math,

put it all on paper, make sure the numbers make sense. And then also just, you know, emotionally make sure it makes sense with your family and also make sure it makes sense with the actual house you find that it's something you're going to be excited about versus it just being a check mark on the road to success. Absolutely. Sean, what's your income? It is about $120 per year. Awesome. And then do you have money saved currently for the down payment, or is that next? We do. We have, it's not a lot, it's $30,000 saved for a down payment,

and we've been good at maximizing our IRAs and our 401K every year up until now. Awesome. Well, you know, you're in that kind of baby step four land and some people, we call it baby step three B, some people will go, hey, I'm going to invest up to the match to be more aggressive with the down payment. With your income, you guys are going to be multi-millionaires at your age being completely debt free. And so regardless of how you do it, if the house is more urgent, you could put more towards that down payment right now to save up, you know, a hundred grand by the time you guys move. And now we have a serious down payment, which lowers our monthly payment. And so I want you to feel peace about this. And that's why I recommended, hey, get back

to the States, rent for a while, really do your research, work with one of our endorsed local provider, Ramsey Trusted Real Estate Agents. You can connect with one at ramseysolutions.com. While you're there, use the mortgage calculator that we have. It's a free tool to help you figure out how much of this in my world is this going to be. And that gives you peace as well when you go, all right, the mortgage is going to be two grand with our down payment, and we make eight or ten. Well, that's very reasonable. Right. And that becomes from moving from a big step into a small little walk.

And you go, wow, this house is a blessing instead of a curse because we didn't rush into it. So we are cheering you on on the journey, man. Call us back when you got the house and when you pay it off. That'll be fun. Yeah. Do a debt-free scream once you're back stateside.

I love that. Christine, I was just talking to one of our real estate ELPs, endorsed local providers at our event in San Antonio. And I said, how's it been in real estate? Because I know the interest rates are crazy, which is causing less people to buy. And he said, well, George, actually, it's been great because a lot of people regret the house they bought. And so now they're looking to sell and get to the actual house they want because they rushed into it. And so a great life lesson there. There you have it.

Don't rush into it. Do it with peace. Do it over time. And it's okay if it doesn't happen tomorrow, regardless of the pressure from your in-laws. Okay. More of The Ramsey Show coming up. 888-825-5225 is the number to call. We'll be right back. Are you sick of planned obsolescence? You know, when companies make products crappy so you have to buy more of their crappy products? Well, me too. And it's why I love companies like Grip6. Grip6 is all about quality products meant to last forever. That's why their comfortable, bulk-free belts, slimline wallets, and lightweight wool socks

all come with a lifetime warranty and simple returns and exchanges. So check them out at Grip6.com today and get up to 20% off with the promo code RAMSEY. Well, folks, Thanksgiving is just a week away, and how nice would it be to have some extra wiggle room in your Black Friday budget? Well, good news. The Ramsey Christmas Cash Giveaway could help take the stress out of the holiday season. Right now, you can go to ramseysolutions.com slash giveaway to enter for your chance to win one of our weekly $500 prizes or the big kahuna, the $5,000 grand prize. And what's really cool is you can enter every single day to increase your chances to win.

No purchase necessary, but sorry, kids, you got to be 18 or older to win. So tell mom and dad to go enter at ramseysolutions.com slash giveaway. While you're there, check out a major sale happening right now where you can find Christmas gifts for everyone on your list. Some of my favorites right now are the 2023 Ramsey Gold Planner that Rachel Cruz, Dr. John Deloney, and myself worked together on to make great, or Rachel Cruz's new wallet in red for the amazing women in your life. I'm going to get one for my mom, I decided, Christina. Oh, that's so sweet. Mom, I hope you're not listening because I just ruined the Christmas gift. Gosh, I'm not great at this. And for the men, we've got some awesome new Ramsey apparel, t-shirts, crew necks, hoodies with some of your favorite Ramsey sayings on them. I'm hoping

for a better than I deserve sweatshirt myself. We'll see if my wife is listening and she gifts that to me. So for all of your family, friends, coworkers, we've also got questions for humans conversation cards that are a must. They're hilarious. They'll spark some great convos and select decks are on sale right now for only 10 bucks. And if you've used any of our best selling books and tools, you're fired up to share what they've done in your life. Now's a great time to pay that forward, to be generous, to give it to someone else to start their journey. So trust me, there's something for everyone on your list. You can get it all done in one place at ramseysolutions.com.

You don't have to doom scroll Pinterest and Amazon and Etsy hoping to find a great gift. There you go. And who doesn't love a good giveaway? That's always so exciting. You know, you just want to enter. Now this is different than Powerball, you know, because number one, it costs me nothing

and there's a much higher chance of me winning. Yeah. That's how I feel about our giveaway. Now, you won't win $2 billion, but. Hey, any giveaway is exciting. I once won a giant Yoda doll after entering at a Blockbuster, Blockbuster video giveaway every single day and I finally won it. What happened to the Yoda? I sold it on eBay for 400 bucks. Oh my goodness. That is next level. I'm very impressed with you, Christina. Thanks, George. Golly. Way to hack the system. All right. I showed Blockbuster. You showed them. Now they're bankrupt, thanks to you. It's your fault. Me and my Yoda doll. All right. Open phones this hour at 888-825-5225. Greg

joins us in Arlington, Texas. Greg, welcome to The Ramsey Show. Thank you for taking my call. My wife is retiring due to health matters December the 15th, and she's got in her 401k, she's got $50,000. Our house is paid paid for but everybody has a different opinion because we may have to turn to that fifty thousand dollars for an emergency or we would want to draw the interest that it would make which i understand is not a lot of money to a lot of people but it'd be a ton to us uh uh once year, draw that interest out. And some people are saying, oh, I'll just put it in a CD. And some are saying an IRA and an IRA Roth.

And, God, it is so confusing that I don't know what to do. Well, you've got a lot of voices coming at you at once, don't you, Greg? Well, you can read on one page on the Internet, don't eat eggs, and on the next page it'll say, eggs are the best thing ever. Yeah, that's so true. And that's what I run into when I read or try to obtain knowledge. So I was sitting here watching YouTube and there was

the Dave Ramsey and I thought, why can't it hurt? All he can do is give me some decent advice. And so I thought I'd call in because the 50 is, it's important to us. Like I said, we put all our money into the house and it's paid for. And so I don't know. love it do you have any other debt i have you know three thousand dollars on a credit card on credit cards that i could pay off easy enough so you both still have income yeah well i have my social Security, and she'll get her Social Security. So our standard of living, or the amount of money that we get per month, will drop greatly. What will that be once she retires? What will your monthly income be? Oh, we're going to be around $25,000 a year.

Wow. And Greg, are you still working or are you fully retired? No, I, you know, I do a lot of jobs here and there, but I was a salesman and salesmen are not the greatest people in the world. They're doing odd jobs. And so that's kind of been hard, but where I can find things to do, I do them. I've got some money in the stock market, and I try to stay on top of it, but it's not much. It's like $5,000.

Is it in single stocks? Where are you investing currently? It's in single stocks, just things that I look at, I think, well, you know, eventually. Cheap stocks, though, they're, I think the most expensive one-share stock that I would have would probably be $7, $8 per share, you know. And you got a car payment as well? Yeah, I have a car payment that's $398. What's left on the loan? Beg398. What's left on the loan? Make a pardon? What's left on the whole?

How much do I still have left on? I'm about $16. Okay. Well, I think what's going to... So I've heard a lot of the interest. Go ahead. I'm sorry. Well, I'm just looking at the numbers here going, man, if you guys could get rid of this

debt, it would give you a nice cushion of margin to have if you're going to be living off of Social Security. And so I'd want you to... rid of the cheap. If you could, I'd pay that stuff off ASAP. I don't know if it's worth selling at this point because you need to go out and buy another vehicle. But on the financial side, when you're looking at your investments, I want you to get out of the single stock game. That's going to be a volatile game. It's not worth your time. It's not worth your money. And as far as that 401k, I don't want you touching it unless you have to. And I don't want you using it as an emergency fund because that's what your emergency fund is for. So do you guys have money outside of retirement, just in the bank? No, we put everything into the house, which now I'm finding out is not such a great idea for us. I don't know.

I mean, what does a paid for house do for us financially? Well, it gets rid of your largest fixed expense, which is your mortgage payment. So that's a great sign, but I would not have told you to drain your bank account for it. We want you to have an emergency fund of three to six months of expenses with no debt and then pay off the house. And so you did some good things in this picture, but if I'm in your shoes, I'm going to stop listening to the internet and random voices. And I'm going to connect with a Ramsey SmartVestor Pro. These are financial investing pros that we vet that do things the Ramsey way that want to help you, want to teach you. And so go connect with one of those, go to their website, RamseySolutions.com,

click on Ramsey Recommends, and you can get connected with one in your area. And then tune out the other voices. Tune out all the different people's opinions. Be careful who you listen to. Get somebody who's a real pro. And we appreciate you calling in today and trusting us to give you advice. But sit down with a smart investor, and they'll really be able to guide you through all the different aspects of your finances. They can kind of talk you through, you know, developing that emergency fund and your 401k and how to make sure you can afford everything moving forward. Yeah, I don't want you to just scrape by. If you go in a car, I'll just add conversation.

If you go buy another car, you're immediately starting that interest again. Well, we're not going to tell you to buy one with a loan. I paid the majority of the interest on this particular one. I mean, that's how all car payments are set up. I used to run a car dealership. Well, we believe that you can live without a car payment, and that means buying a used car with cash. No interest, no payments.

And so if you're not doing a lot of driving... Okay, well, let's say I paid $400. What my real question is, is what should I do with the 401k? I know we'll leave it where it is, but don't I want to leave it somewhere where it's going to make the maximum amount of money? Sure. Because where it's sitting now, it's making like two and a half percent. Well, you can do better than that in a high-yield savings account, Greg. So here's what I'm going to tell you to do. My recommendation would be once she retires, do a direct rollover

to an IRA. And that SmartVestor Pro that you connect with can help you through that process. That's going to be the safest bet with no tax burden, and that will allow it to continue to grow with some good mutual funds. So wishing you guys the best in retirement and getting through all this mess. I believe you don't have to scrape by in retirement. You guys can enjoy it if we start doing the right things right now. Thanks for the call, Greg. This is The Ramsey Show. I'm George Campbell, joined by Christina Ellis this hour. The number to call is 888-825-5225. You jump in, we'll talk about your life and your money.

Up next, we head to St. Louis. Lindsay is on the line there. Welcome to the show, Lindsay. Hi there. I'm excited to talk to you guys. We are excited to talk to you. How can we help today? Awesome. Well, at the beginning of the year, I'm looking to make a career change.

And I actually read Christina's book, and I'm looking to work my way through hair school. So I don't qualify for FAFSA because of how much money I make and how much money I have. But I'd like to get as many scholarships as possible so I don't have to pay it out of pocket. And so I just wanted to see if you guys had any advice for getting scholarships for a trade school versus like a normal four year degree. And if it's like the same, I couldn't, I didn't find as many scholarships, so I don't know if it's, I'm just not looking the right places or if it's, um, just a little different. Well, I love that you're motivated to go debt free. That just makes me so excited. And that you've done the research, you've done the homework. I'm just like, get it, girl. That's awesome. But okay, so starting with scholarships, I mean, there are some scholarships

that are specifically for trade school, but a lot of times just the regular scholarships that you find also qualify for trade school. So I'd encourage you to not just limit yourself to trade school scholarships, but look for a broad range of scholarships. And in that, you know, check the guidelines. So that's a thing that a lot of people don't do until they've applied for a scholarship and they've spent all the time doing it. And then they realize perhaps they didn't qualify or there were some certain little guidelines they didn't check. So, you know, there are millions of scholarships out there and you can't apply for all of them. So take the time on the front end to, you know, read the little fine print and make sure, you know, that it qualifies for a trade school that,

you know, it's not just limited to four years because a lot of them, you know, are open to either. And if you can't find that info, just give them a call or email. I think a lot of people feel like scholarship programs are these like far out there things and that there's not like real people behind them. But a lot of times it's, you know, foundations, it's people who are really passionate about education and giving away money. So I mean, just picking up the phone and asking for clarification is totally okay. Okay, awesome. Can I ask a follow up question? Yeah, of course. Okay, so this is kind of like an entrepreneurial route, like going to hair school.

And I'm wanting to, you know, replace my income next year even while in hair school. But also my husband is looking to leave his job. So I'm wondering, like we're trying to follow the baby steps, but we have a little bit more in our emergency fund than normal. And we just got married. So I'm trying to figure out like, how much should we set aside being that we both are looking to leave our jobs in the near future? So is he going back to school or is he just trying to find a different job? No, he does video and photography full time at a company and he's looking to do that on his own.

Okay. So he's going to be an entrepreneur. So I definitely would say if that's the case, go, you know, we recommend a three to six month emergency fund, go to the upper end of that the six months, you know, especially if he's going to be an entrepreneur, you're going to be in school, you know, go for the upper end of that. And then also with you going to school, you know, one of the biggest priorities right now is for you to go debt free. So any extra cash that you have, I would set aside, you know, for an education fund. You know, of course, we want you to win scholarships. I hope that you get it fully funded with scholarships. But if you do need to cash flow some of that, you know, I would take,

you know, the money that's over and above that emergency fund and really set that aside for your education. Okay. How much is hair school going to cost? So it's about $23,000. Okay. And do you have the money now, or are you just hoping to cash flow it with scholarships along the way? I do have the money, but obviously I don't want to spend it if I don't have to. We're also trying to pay off our house early, so I'd like to spend that on the house rather than on the school.

Well, for sure the school is going to be the priority to get through debt-free. And if it slows down the house process, I'm okay with that because I don't want you to go backwards in this process. And if he's able to continue working while getting his side hustle off the ground, starting his own business, I would rather that than have a gap in income. And so regardless of what happens, there should be no gap in income, even if it's you guys are hustling, you're doing Uber, you're doing everything it takes to keep income coming in the door. Because that's a recipe for disaster for both of you to just stop working and hope to get through life. For sure. For sure.

That's awesome. I'm pumped for you guys. Yeah, I would also just encourage you to spend a little time researching if there's any programs that specifically help with trade school in your state. So I know here in Tennessee, we have this program called Tennessee Reconnect, which it helps, you know, adults go back to school and get trade certificates. So I would encourage you to see if there's anything like that in your state because, you know, scholarships are great. But if there's some program that's kind of a direct route, you know, that could be a much quicker and easier process. Yeah, I'll definitely look into that. Thank you. Yeah, we're excited for you. Thanks so much for the call, Lindsay. Very cool. And thank you for

reading Christina's book. How awesome is that? I love that. All right, let's move on to Brittany in Dallas, Texas. Brittany, welcome to the show. Hi, thanks for taking my call. Absolutely. What's going on? So my question is in regards to an Hsa medical account insurance okay um so i currently have a it's open enrollment for my company right now and i currently have a good traditional insurance is that ppo um i don't know what it is it's either a a PPO or HMO. It doesn't say. Okay. There's usually either a high deductible health care plan or a PPO, which is preferred provider organization. Does any of those ring a bell? Yes. And I am looking at this big chart and a HSA is looking enticing because of the drastic saving on the biweekly contribution,

but obviously the deductible is higher. The reason I'm asking about this now is because my husband and I, we do know that ideally we want to start trying for kids at some point next year. So I don't know if now would be a good time to switch from a good traditional insurance to something with a higher deductible, higher maximum out-of-pocket, that sort of thing. Well, the nice thing with the high deductible healthcare plan is once you hit that max out-of-pocket, it should be covered at 100%. And so if you can find one, like my wife, we just went through this process here at Ramsey, and there was an option that was a slightly lower max out of pocket.

And then it covered 100%. And the trade-off is you pay a slightly higher premium. And so that might be a good option for you guys. And I always recommend to have that amount in your emergency fund, depending on where you guys are at in the baby steps. So are you trying to pay off debt right now? No, we're completely done. We're on 456. Oh, I love it. Then let's max out that HSA and make sure we have enough to cover the max out of pocket because then you know, hey, we're covered. Regardless of what happens, we're not going to be on the hook for some crazy medical bill. Okay. So I'm looking at the chart now, and it's saying after I hit my deductible,

the non-preventative services, I would pay 20% up until the max out-of-pocket. Correct. So that's still what you're talking about with the 100% coverage after? After the max out-of-pocket. Okay. What is it? Would you recommend transitioning? Yeah.

I mean, if everyone's relatively healthy here, and it's a great option. Many, many people here at Ramsey do it. My wife and I included have the high deductible. So that's how you get the HSA account is through a high deductible healthcare plan. And then with that, you get the HSA, which is the health savings account. And that allows you to, I love it because it's triple tax benefits. You put the money in completely tax-free from your gross income. It grows tax-free. You can invest it beyond a certain threshold and you can withdraw it tax-free for qualified medical expenses. So it's an incredible, incredible option. A lot of it, a certain threshold, and you can withdraw it tax-free for qualified medical expenses.

So it's an incredible, incredible option. A lot of them have employer matches. Does yours? Yes, $1,500. Oh, that's incredible. Lovely. So, I mean, obviously I want you to read the fine print, do what makes sense for your family, but if I'm in your shoes just hearing what I heard, it makes a lot of sense to move over to that high-deductible health care plan. Okay. What is the max out of pocket on it? For the employee plus one is $7,000. Okay. Oh, that's similar to ours.

And so if you've got that in the emergency fund, you can max out the HSA as well to have that come out of there. That's a great option. And so I would recommend going that route. You can also talk to, there's usually someone connected to your healthcare plan that you can reach out to. We actually just met with one that was here at Ramsey from Zander Insurance that helped us go, oh, here's what this means. Here's what makes sense based on what you're telling me. So I would reach out to your HR team as well and see if they can get you in touch with someone who can help walk you through the options. Okay. Yeah, that makes a lot of sense. Awesome. Well, thank you so much for the call, Brittany.

Awesome. And, hey, folks, it's open enrollment season. Like, help your HR people out. They're all frantic right now trying to make sure everyone does what they need to do. So hit those deadlines, make it easy on them, and ask questions. Make sure you do your due diligence because this is big decisions. And bankruptcy, number one leading cause of bankruptcy is medical bills. So you got to get healthcare coverage right. What a fun note to end the hour on, Christina, talking about HSAs and PPOs. We love it. You truly do love HSAs.

I really do. I'm such a nerd. That puts this hour of The Ramsey Show in the books. We will be back with you before you know it. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from the Ramsey Show on YouTube. Go watch and subscribe to the Ramsey Show channel on YouTube. Go watch and subscribe to The Ramsey Show channel on YouTube.