The Ramsey Show - App - How to Avoid Student Loan Debt While in College (Hour 2)

Episode Date: March 11, 2019

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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 the BMW as the status symbol of choice. I am Dave Ramsey, your host. We're glad you're with us. Open phones at 888-825-5225. That's 888-825-5225.

Pat is in Springfield, Illinois. Welcome to the Dave Ramsey Show, Pat. Hello. Thank you for taking my call. Sure. I'm a little nervous. It's okay. We've never lost a patient. How can I help? I'm a Sure. I'm a little nervous. It's okay. We've never lost a patient.

How can I help? I'm a grandma. I've got four grandchildren, and the first one is going into high school in the fall, so she's our test case. And so we've been talking about college since it's coming up soon, and we're trying to avoid student loans because it seems like that's a big problem in everybody's debt that I've heard of. We've got 529 accounts for all four of the kids. We've had them since they were all born.

But they're not going to probably cover the entire four years. I hope it gets through two years. The rest, I think she's going to have to buckle down and try to get scholarships, grants, a job. What I was wondering is, should she just go ahead for the rest of her college life, get loans as she needs them. And then when she graduates, we see what the bottom line is. Just pay them all off before there's any interest. No. No.

I would never go to college on student loan debt, ever. Not get any. Never. Okay. There's three things that she can do uh and that you guys can do together in addition to paying in addition to piling up cash between now and the time she's there and if you get her through two years that's really about four years from now that you've got to build up for years three and four right but the biggest the biggest problem the biggest cause of student loan debt is college choice.

Uh-huh. Choosing a school you can afford. Do not buy a Bentley when you have a Chevrolet pocketbook. Right. Champagne taste beer pocketbook, you've heard the saying, right? Right. pocketbook you've heard the saying right right and i have never hired someone or not hired someone and i have 800 almost 900 team members based on where they went to school uh-huh think about it a few colleges that are real close to where they live here we go go. And you live at home. They will be the first ones.

There's two things that people buy when they go to college on student loans, and they spend about equal parts on each. One is tuition and books. The other is the college life, in quotes. Oh, yeah. The apartment with a jacuzzi and a skylight and a racquetball court. The, oh, I have to join this or I have to join that. Oh, you know, I have to have a certain amount of money to do this or that and eat out all the time.

And, oh, and the money people spend on food and board and lifestyle almost equals what they spend on the school. Right. And when they're being stupid, okay? Now, because we forget the purpose of going to college is not to graduate with a degree in beer pong. It's to graduate with knowledge and an actual degree. And that's the purpose. Now, if you can gather up some money and have some of those other experiences, that's fine.

I'm not mad about that. But the idea that you rationalize and say, I had to borrow money because I couldn't afford to go to school is absolute hogwash. Because you can go to school, a state school, the average tuition in America is $12,000 a year. That's $1,000 a month. You can make $1,500 a month delivering pizzas and walking dogs and babysitting. Uh-huh. And so number one is go to a college you can afford and stay home for two years and do a community college is even better. Right.

Number two is work. I'm not talking to you. I'm talking to her. Uh-huh. Work while you're in school. And don't work at minimum wage flopping whoppers right those numbers don't work you can make twenty dollars an hour cleaning people's toilets called being a maid uh-huh and that's you know you you can make that kind of money walking dogs

or do whatever start your own little business cut grass i don't care work at something you make good money at and work your butt off while you're in college and oh by the way then you won't have the money to party or the time to party so partying is going down grades are going up it's amazing people who work in school have a higher gpa than those that don't isn't that interesting yeah that's something she's gonna have to do yeah number three take the act repeatedly and take a class on how to take it in between almost all the major colleges are now super scoring the act there are four parts to the act uh and so if you super score it that means you take the test and every time you made a little bit better on one but no better worse on the other one, the section you made better on, all your

best ofs on all four sections are put together. That's called super scoring. And so if you take the test four times and you get four different grades, obviously, on each of the four sections, they'll take the best grade of each section and create a super score for purposes of getting into the school. Now, some scholarships won't count the super score. They'll just count your best ACT score, which is fine, too. And then one of your other part-time jobs, as you said, is applying for scholarships and grants.

If she does all of that with you guys in the background chunking money at this and you've got two years of it covered and you just start thinking about, okay, what is the goal? The goal is a four-year education that is usable in the marketplace. Can we scrape together the money to pay for that? You can. You can actually work your way through school doing that mathematically. $20 an hour will put you through school working 30 hours a week.

I don't think I can do that. Yes, you can. Jeez, the whining is unbelievable. Working while you're in college is not child abuse. You can do it. I did it. How many of you worked when you were in college? Raise your hand out there.

Everybody in the booth just did. I hardly know anybody that did nothing while they were in college except go to class and graduate with a degree in sorority. I just don't know any of those people. I mean, there's a few of them, but I mean, the ones that I knew in school, there just wasn't that many. I worked my butt off. I worked 40 to 60 hours a week and graduated in four years with a 297. Yes, I'm still pissed about that three one-hundredths of a point, but think about it. And I worked my tail end off, man. And you know why I graduated in four years?

Because I was tired of giving them money. So I made sure I took every class to get out of there. This was not summer camp for adolescents. This was, I want knowledge, a degree, check that box, move on into adulthood as fast as I can. That's what happens when you're paying for it. But when you're riding on my butt, meaning I am the idiot taxpayer who has agreed to loan 18-year-olds up to $100,000 unsecured so they can get a degree in left-handed puppetry, yeah, I'm that idiot taxpayer. I've allowed that to happen.

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It's the only plan worth buying. Go to ZanderInsurance.com or call them at 800-356-4282. Thank you for joining us, America. We're glad you're here. If you have a college-bound graduate in your life, we were just talking about college, who's waiting to receive their college acceptance letters, well, right now we've got an awesome graduation gift on sale starting at $18.99. The Graduate Survival Guide, Five Mistakes You Can't Afford to Make in College by Ramsey Personalities, Anthony O'Neill and Rachel Cruz.

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888-22-PIECE 888-227-3223 so let's continue that college discussion for a minute i haven't had that in a while um so let me tell you um all four ramsey kids went to the university of tennessee all three ramsey kids there's not a of Tennessee. All three Ramsey kids. There's not a straight one. All three Ramsey kids. One of my sons-in-law graduated from there, too. That's what runs through my head, okay? But all three of my children went to the University of Tennessee, an in-state school.

Okay? They did not go across state lines and pay triple for the exact same education. So if we go to the University of Kentucky, fine school. Go to the University of Alabama, fine school. University of Georgia, fine school. University of South Carolina, fine school. Nothing wrong with them. We can have discussions about football later, but I'm talking about the academics.

Okay? There's nothing wrong with any of those colleges. You graduate from any one of those colleges, universities, you did great. Glad you went there. You didn't get a substandard education. Okay? But if you move across the state line and go to the University of Georgia, instead of paying $12,000 a year, you pay $30,000 a year for basically the same education.

Why? Because just because you walked across the state line, that's all. So there's just no excuse for that. There's no value added for the extra money spent. If you've got the money laying around and you just want to buy it as a luxury, that's fine. I've got a friend, his kids all went to Auburn and he just paid for it. He has plenty of money and they just wanted to go to Auburn. Well, that's fine. I've got a friend, his kids all went to Auburn, and he just paid for it. He has plenty of money, and they just wanted to go to Auburn.

Well, that's fine. I've got no issue with that. But I'm talking about people going into student loan debt because college is so expensive. We're all going to die. Okay? It's just the whining and the beagle chasing a rabbit out there. Man, it's amazing.

Okay, so that's thing one the thing too it there's nothing wrong with private education if you can afford it but uh i mean vanderbilt university is right at 60 000 bucks university of tennessee is right at 12 000 now i'm sure that vanderbilt is superior academically to the University of Tennessee in some areas. But I am 1,000% sure it's not 5X. I know this because I graduated from the University of Tennessee, and people who graduate from Vanderbilt work for me. So to tell me that it's worth 5X is kind of humorous to me. Again, if you've got the money, or you're going on, I have a niece that got a full ride at Vanderbilt.

She was valedictorian. Yeah, go. That's awesome. Not mad at Vanderbilt. Certainly not. But I'm not my kids. I'm not paying. My kids were not going to get free rides. Okay.

They were just normal students. And so they didn't get a free ride on academics or on athletics or anything else so ramsey dave is going to be writing a check and so am i getting more for my money not 5x so we didn't do that we went to the university of tennessee well i don't really care where you want to go it's my freaking money i choose no i i i appreciate your little feelings well you're a control freak yeah i'm kind of that way about my kids and my money i want them all to win and i'm smarter than you because i'm older than you i've lived longer and i've seen stupid in a bag most of my life and you don't need to

be stupid in a bag. You're my kid. And so what I'm saying is this part of our student loan crisis is not a cost of college crisis. It's a parenting crisis. Some of you parents need to put your arm around the shoulder of your teen and kick their little butt. No, you're not going over there. This family cannot afford that. No, you're not going into debt. We're not doing that.

We're going to find a way for you to get a good education and become a smart person, a smarter person, without being a stupid person in the process. No. I had a girl call me on here about four months ago from South Carolina that wanted to go to Ole Miss. I said, why don't you go to South Carolina? Well, I like Ole Miss. Why do you want to pay three times as much to go to Ole Miss as South Carolina. You know what her answer was? The houses are pretty in that town. This is why people need parents. No, young lady, says her father or her mother who loves her, your little butt is going to South Carolina, which is a fine school, or something that's a state school here,

if we don't have any money. Now, if you've got the money, I don't care where you go. Do whatever you want to do. I'm talking about the $1.6 trillion in student loan debt that's about to be a bubble that's going to smack all of us around in this entire economy because we didn't tell a bunch of 18-year-olds no. We, the people, have been stupid. We have allowed this to go on as parents and as taxpayers.

We're stupid because in the name of education, we were stupid. It's crazy, y'all and now some of these kids i mean they're in their 20s and they have legitimate problems i have 280 000 in debt dave and i have a degree i have a master's degree in sociology oh shoot me you know you're a caseworker for the state making $32,000 with $280,000 in debt. No wonder you feel the burn, because you feel stuck and you think Bernie is Santa Claus. That's why you feel the burn. You're stuck. You're scared to death.

You're hopeless in anybody coming along with anything. Hey, I'll take communism. I'll take socialism. I'll take Santa Claus. I'll take whoever. Just get me out of this dadgum mess that I got into. That's what they're saying. They're scared to death, man.

I don't blame them for being scared. So parents, and for God's sake, some of you school administrators, grow some integrity. And some of you school counselors, quit signing all these kids up for this crap and sending them off to get this debt. You're complicit, too. Oh, by the way, Congress, you need to put an end to the student loan program. You need to just stop it. You need to stop it.

It's a disaster, and it's not necessary. Any of you all remember economics? not necessary have you ever any of y'all remember uh economics did any of you ever take economics it was a class we had in college or in some of us had in high school basic economics says this if the supply exceeds the demand the price goes down if there's a bazillion houses on the market and not many people looking for houses, house prices drop.

You want college prices to go down? Let's stem the demand. Oh, you want the entire population to be ignorant. Nope. I'm going to quit sending them to colleges they can't afford. That's all I'm going to do. And the colleges that they can't afford will suddenly get more affordable.

What a novel idea. I'd almost be willing to forgive a percentage of the student loan debt out there under some kind of a program if we stopped the current one completely. It's a disaster, folks. It's a real, real sociological, financial, economic, and governmental problem. It's a real problem. All because no one in our culture had the backbone to say no to a bunch of freaking 18-year-olds. No.

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churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. In the lobby of Ramsey Solutions, Josh and Lauren are with us. Hey, guys, how are you? Hi. Awesome. You're the man. Welcome, welcome. Where do you guys live?

Virginia Beach, Virginia. Oh, nice. Welcome to Nashville. Thank you. And all the way here to do a debt-free scream. Yes. Love it. How much have you paid off?

$241,187. Amazing. Good for you. And how have you paid off? $241,187. Amazing. Good for you. And how long did this take? Just under 24 months. Wow. And your range of income during that time? $168,237, and Lord willing, it's still climbing.

Wow. What do you guys do for a living? So I'm in technology sales, also a part-time worship leader. Lauren had a photography business and now an essential oil MLM business. Oh, excellent. Very cool. And you're making some serious bank, man. Well done.

Thank you. What kind of debt was the 241? Half of it was school loans, about $122,000, $44,000 of a car loan, dumb decision, $47,000 in 401k loans, more dumb decisions, and $28,000 in credit cards. Wow. Look at you guys. Cool. So did you sell anything big?

Yes. We sold two cars. We sold our new car, a Honda Pilot and a Range Rover. Whoa! Yep. Dumped all the big cars. Yep. And anything else we could think of.

What did the cars bring? The cars brought just over $40,000. Okay, so you still had another $200,000 to go. Yep. And did you have money saved up to go towards this or did you cash flow

the rest of it? Cash flowed it. Yeah, we were really bad with managing money. So you just got angry and said, okay, $100,000 a year for two years

and we're going to be done. Yes. All right. Way to go, you guys. So how long have you all been married? Just about five years. Okay. That's right. All right. Way to go, you guys. So how long have you all been married? Just about five years. Okay.

But two years ago, something lit you up. What happened? We had a kid. Oh, that'll do it. Yeah, we have a three-year-old and a three-month-old. But my wife's a rock star. She always has been pushing us in the right direction. And we came across your book, Total Money Makeover.

It was on the shelf at folks that we know really well. And a lot of people saw us trying to read that and just told us that that doesn't work, it's not possible, or we've done that before and we just gave up and we decided that we weren't going to do it that way. Okay. So you did it straight from the book? Oh, yeah.

A hundred percent straight from the book. Wow. Okay. So no ish, just that's the plan, we're doing the plan. Yeah. Any other stuff, if we even thought about it, we just quickly realized that was not going to work. I love it.

Well, congratulations, you guys. Thank you. Very cool. How does it feel to be rid of $241,197? We feel so free. Yeah. We are looking at our big why is legacy and what we hopefully can do for our children, Lord willing. Yeah.

And like Chris Hogan's book, he mentions that budgeting is how you emulate the millionaire behavior on living less than you make. So we look back and we were paying $10,000 a month on debt. And we were like, what if we just started investing that kind of money? Where would that put us when we're 50, 60, 70? Whenever we pass and our kids and our children and our children's children, what would that look like for them and all the families? There's tens of millions of dollars. That's what we're hoping. There will be. I mean, $120,000 a year invested?

That's tens of millions of dollars. How old are you two? I'm 32. I'm 27. Oh, man. Y'all are incredible. Wow. Wow, wow, wow.

Yeah, it's a lot of money. It's a lot of money where that's going. Well, congratulations. Thank you. Congrats. How's it feel to have no payments? Awesome. Everything's different.

I mean, a big, big why other than legacy for us was just trying to be obedient to the Lord and living within his provision. So that provision mentality has taught us so much. Living on debt is going outside of that. Contentment. Contentment. I mean, we were able to take a trip here, road trip. We made the most of it, even with two young kids.

Yeah. Everything's different. Yeah, it changes. So who were your biggest cheerleaders outside of the two of you? We actually, we were in an FPU class. We coordinated the class. And we didn't have a whole lot of cheerleaders up until then.

The pastor of our church, Jimmy, and his wife, Dee, Roe, Harry, and Mary Blake, Trey Queen, these were all folks that were in our class. And whenever they decided to make some changes, even though we were already 75% of the way done, that really motivated us. And then other people came out of the woodwork. Wow. Guy named John, who's a financial master coach in our area. He's an active duty military.

He actually took some of y'all's team out to shoot, I think, at your farm at one point. Yeah. But guys like that are just amazing and have a life coach named Wynn, who's a good buddy. So we kept praying for people to be cheerleaders. Yeah. Financial peace actually provided that in a sense. Yeah. Yes. named win who's a good buddy um so we kept praying for people to to be cheerleaders and yeah financial peace actually provided that in a sense yeah yes very cool that's what it's supposed to do very good way to go you two can i add one other one other couple i'm sorry sure um our sister and brother-in-law jenna and sam watching i might start crying I didn't think I would do that. Watching them want to change their family really spurs us on still.

Amen. Very cool. Well, way to go, you guys. Way to go. We got a copy of Chris Hogan's book for you, Everyday Millionaires. You're going to be wanting about 20 minutes. Man, you are on the way, man. You are killing it.

So proud of you guys. Very proud of you. Good job. What a rock star couple. Absolutely cool. And you brought the kiddos with you. They started the whole thing. What are their names and ages?

So this guy here, he wants to be in your chair, I think, is Taylor. Okay. He is the man. All right. And then this little amazing cuteness is Tinley. All right. Taylor and Tinley. And Josh and Lauren, Virginia Beach, Virginia.

$241,000 paid off in 24 months, making $168,000 to $237,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free! We're Dan Frey! Love it! Wow! I love it.

Excellent, excellent job. You guys are incredible. That's how it's supposed to be done. Open phones at 888-825-5225. Paul is in Minneapolis. Hey, Paul, welcome to the Dave Ramsey Show. Hey, Dave, thanks for having me. Sure, how can I help?

Well, so I listened to you about a year and a half ago, and had I called in then, you would have told me to write the check, pay the debt off. We had enough in our account to pay what we owed, and we did that. You know, I was sort of very unsure about it, but it feels tremendous and would never take that back. So anybody on the fence, I hope you take that advice. Cool. My question is, we're on baby step 5-6.

More so question is about number 6. We've been gazelle intense. We've worked what we feel like is really hard, and now we're staring at the biggest piece of debt, not consumer debt, but our mortgage, wondering how to get re-motivated and that mind shift to really attack the mortgage. I know that sort of sounds like it would answer itself, but is there any advice you have for kind of re-revving the engine in that regard?

You know, it's just a long slog is the problem. I mean, it's like you're mile 14 on a 26-mile run. You're just a long way to go. And so what is your loan balance? $226,000. And your household income? About $215,000. Okay.

So when are you projecting you'll be done? You know, I feel like I'd love to do it somewhere between $10,000 and $15,000, but I honestly haven't even looked that closely because I think, like I said, we're trying to change the mindset into now this is the biggest goal. between 10 and 15, but I honestly haven't even looked at closely because I think, like I said, we're just trying to change the mindset into now this is the biggest goal. We haven't even quite gotten there, to be honest. Okay, so you wrote a check before from savings and became debt-free, and you have your emergency fund in place, right? Correct. Are you putting 15% of your income away for retirement? We are. Are you doing a written budget every month that you're both agreeing to? Yeah, we've been on the same page, which has been really a great thing.

And that's why it's a little bit hard now because we did... Yeah, because I look up with a $200,000 income, and I don't hear 10 years to pay off $200,000 debt. I hear four. Yeah, and honestly, it's a mindset shift, I guess. Yeah, just got to look at the budget and go, okay, what do I want to do with my money? And it's, I want to play through so they don't have any payments of any kind because of the spiritual, financial, economic freedom that gives me to live and give like no one else.

And so I'm not necessarily going to be gazelle intense, but I mean, you're making a quarter million dollars a year. Jeez, find 50 and be done in five years. This is the Dave Ramsey Show. Thank you for joining us, America. Alex is with us in Buffalo, New York. Hi, Alex. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up?

I had a question. I just turned 20 years old. I have a Roth IRA account. It's been open for about five, six months now, and I am putting money away every month in a savings account. And I could put more in my Roth IRA, but my question is, should I take some money, put it aside, because I do want to get into real estate investing as well. You're debt-free? Yes. And you have your emergency fund in place?

I have $6,300 away right now. Okay. You need three to six months of your living expenses set aside, six months of your living expenses set aside as an emergency fund. Then I would be putting 15% of my income away into retirement funds. And then I would start saving towards buying real estate with cash. So is that what you would suggest to put money away to buy real estate, or is there any other avenue to get into real estate investing?

I would not suggest you borrow money to buy real estate. I did that at your age, and I went broke, number one. But number two, the problem is that people in real estate business, by and large, do not have a good sensitivity to what risk they've really taken on. And so the renter will pay for it. They say stuff like that. Well, the renter doesn't always pay. You don't even you know the renter will pay for it they say stuff like that well the renter doesn't always pay you don't even always have a renter and so you know you could have a property

that's vacant you can have property worse that's not vacant they're tearing it down and not paying you and you can't get them out and so um you're going to learn all those kinds of lessons owning real estate and it's much much better to grow your real estate portfolio slower and then not get yourself in trouble and actually get to keep the real estate so i pay cash for real estate as i buy it jess is with us in new york hi jess welcome to the dave ramsey show hey mr ramsey hope all is well it is how can i help So basically, I just started listening to your program, and I realized that my finances are a hot mess. So I have a student loan for $40,000, and it's variable interest rate. And I have the opportunity of getting the $40,000 from my mom.

That way I don't keep paying interest. So even though I have, like, two smaller loans, should I just get rid of that $40,000 and then just pay that back to my mom? You're not going to like my answer. I wouldn't do any of it. I would rather owe student loan people than owe your mom. Really? Yeah, because she told me she wanted me to get a notarized letter and everything.

She wants her money back. The reason is that it puts a strain on your relationship, even in a best-case scenario. And your relationship with your mom is just a whole lot more valuable than a little bit of interest. Okay. No, I would continue to stand on your own. How much debt do you have, not counting the 40 in student loans? 53. 53 more? No, 53 total. Fifty-three more?

No, 53 total. So 13 more. Yes. On what? Six on a car and another about, I guess that's seven in another student loan, the federal student loan. Oh, okay. And what do you do for a living? I'm a tutor.

Cool. And what kind of money are you making? So this year I'm supposed to make about $50,000. Oh, good. Okay. And you're single, obviously. Yes. And in your 20s.

Yeah, and I've tried to refinance that student loan without my dad as a cosigner, but I think part of the issue is that basically my work looks like freelance, so I haven't been able to refinance from that variable, and I'm just paying more and more every month on interest. Yeah, you would have to have two years of tax returns because your work is self-employed. You're 1099, I'm sure. Right.

So, yeah, to get your dad off would be a great thing and just get a traditional loan if you could get it, but no, I would not borrow it from your mom. Here's the thing. 53 divided by 2 is 27.5. Okay? Okay. And you make how much?

I'm supposed to make 50 this year. Okay. How much extra work can you pick up? That's why I'm, after listening to your show, I'm going to try to much extra work can you pick up that's why i'm after listening to your show i'm going to try to get extra work anywhere really because i have a chemistry degree so yeah some side tutoring would be very valuable you could probably make 20 25 an hour doing that wouldn't you think right yeah and so let's pretend you did that for $25,000 worth. That makes you at $75,000.

And let's pretend you paid off $27,000 to $30,000 a year. You could be debt-free in two years. Okay. You see how I did that? Yeah, I feel like I've been trying to do that and then it just doesn't work out.

I was just trying to get out of it quickly. Yeah. Well, you weren't getting out of it quickly. You were moving it. I know. You weren't getting out of anything. You just changed the name on it. Right, and avoid the interest rate.

The interest is not your problem. The problem is you need to be putting $2,500 a month on debt. And if you do that, in a little less than two years, you'll be debt-free. In order to do that, you're going to have to be on a really tight written budget, have no life, and be working an extra job. Right. And if you do that, you could be debt-free in two years. And that's very, very possible in your situation.

A lot of the people calling in here doing their debt-free screams worked very very similar numbers to what we just outlined for you there i had a guy well i mean you just these are people that very similar incomes but um you know you're late you live in an expensive area and you would need to get some additional income to make that work if not you're probably looking at three years but i want you to do the math like that and lay it out put it put it put it on the you know refrigerator door and mark out a bar at a time or something where you're getting there the thermometer or whatever metaphor you want to use i'm going to get there i'm going to get there i'm going to get there and i'm going to and i'm going to do what it takes to be free forever because if you you don't, you're going to look up and spend a decade, and that student loan is still hanging around.

An ugly old Sally May will have her own bedroom at your place. And she is not a good roommate. She smells. Mark is with us in Springfield, Illinois. Hey, Mark, welcome to the Dave Ramsey Show. Thanks for taking my call, Dave. Sure, how can I help? So in not a good situation, in the middle of a divorce,

so obviously the issue I have is trying not to take out a loan or borrow money with obviously the different bills coming in from a lawyer. Sort it out okay, and then my bill was doubled what I expected it to be. So I did have to make one decision and cash out a small 401K to get out of the situation. So I'm just kind of sitting and waiting, trying to figure out what's the best route to go. To do what? Well, just as far as money goes. What is your income?

About $90,000. Okay okay and so your lawyer bill is how much well he's supposed to be every two about two grand every every 30 days um 45 days in i got a four thousand dollar bill so six thousand out the window you make 90 grand and you have no money i mean i've got i've got eight000 in the bank and a $1,000 emergency fund. Why didn't you run them a check out of the $8,000 instead of taking out your 401k? Well, that was part of that. There's still some left over.

And it was only small. It was $4,000 that I cashed out. I know. But you borrowed that money at 30% interest. Why do you have money sitting in the bank? Well, between being separated and moving out and getting my own place and you know just so do you have any money in the bank or not what's that do you have any money in the bank now yeah total i've got 8 500 today today after you moved out and separated

and have paid the lawyer six grand already yep Yep. And how much more is the lawyer projecting his fees are going to be? His estimate is two grand every 30 days. For how long is this going to go on? That's part of the issue. So you have four months and you make $90,000 a year. Why can you not pay $2,000 out of a $90,000 income? Well, I'm hoping I can. I'm not hoping you can.

Mathematically, you can. And that's what you, the answer to your question is you need to get control of your budget. While you're going through all this emotional stuff, you're justifying just going crazy with your money. And you're not paying attention to nothing. And the car is spinning around and around and around on the ice. It's going to hit something. You need to sit down, do a written budget. You make enough money to cash flow $2,000 a month.

And you have $8,000 in the bank. You do not have a crisis. You have an emotional crisis. Hey guys, this is Blake Thompson, Senior Executive Producer of The Dave Ramsey Show. Did you know over 15 million people listen to The Dave Ramsey Show every week? And a lot of those people listen to one of over 600 radio stations across the country to find a station near you head to Dave Ramsey.com slash show