The Ramsey Show - App - Husband Borrowed Against 401(k) for His Business (Hour 1)

Episode Date: March 6, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. You jump in, we'll talk about your life and your money.

Renee is with us in Maryland. Hi, Renee. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? So, my husband and I are on baby step number two, and he's decided that he wants to open up his own dump truck business. And while I'm excited about that, I am also nervous because the dump truck itself is about 90k and he's pulled funds from our 401k to cover the down payment so i'm a little nervous about one are we going to be able to meet our goal of being debt free by next year and are we even going to be well wanting to be successful with the business as well

and wanted some advice from you and encouragement i'm confused your husband is on baby step two trying to get out of debt and he went and bought a $90,000 dump truck on payments. These things don't seem to go together. Yes, sir. Has he already done this deal? Yes, he has. So I work and he works.

So he was previously working for a company and he's going to be putting in his paperwork to quit in two weeks. So yes, he has already done the paperwork. The bank has already approved the loan. He's planning to go pick up the truck as of next week. And I'm sure I probably can't convince him not to do it. I tried to convince him in the beginning to get a cheaper truck. He went down there looking at vehicles, came back with something significantly higher, and it's been rolling since then. Yeah.

If someone's doing something destructive to themselves and is way in the middle of it, I don't know how to encourage them. So I don't know how to encourage you, honey. This is a nightmare. This is an absolute stupid butt decision. It's a horrible decision. It should not happen. It should stop immediately.

There's so many things wrong with it i can't count them all and um but there's no stopping people that are you know bound to the terminal run their car into a wall no pun intended but uh um you know to start with buying a ninety thousand dollar dunk truck the break even on that if he were to pay cash for it doing hauls, is astronomically long. It's a dumb business decision. Add to that the fact that he's financing it. Add to that that he took the down payment out of the 401K.

Add to that he has no business sense at all because he quit his job and he has absolutely no customers lined up, and he's going to go broke. So, no, I can't really encourage him. Not him, but me. I know, but, Darlene, I mean, unless you can put duct tape around this man and keep him out of that truck dealership, I'm going to have trouble encouraging you. You duct tape him to a chair maybe. I don't know.

I think that's kidnapping, though. Maybe you don't want to do that. But this has to stop. It's a bad idea for about seven reasons. It really does not need to go through. Okay? If he wants to go in the dump truck business, he needs to get out of debt, save some money, buy a $15,000 or a $20,000 truck, make that truck make money that he paid cash for, and then use the cash to make another truck make money, and then grow a fleet of trucks.

But you don't go $90,000 in debt to haul rock and dirt. This is just a bad business move it's a bad idea so i i'm not yelling at you i'm just scared for you i'm scared i don't know what to and i don't you know and you're you know he's already the you know the cows are already out of the barn i don't know how to get them back in he's already way down the road on this there's no putting the brakes on this bubba so i don't know if there's any way you guys can stop this even if you lose some money and delay this i want him to be in business i if he wants to be in the trucking business i want him to be in the trucking business i want him to live his dream but when people live their dreams and violate seven principles in the process that dreams become nightmares and that's where you're headed this is not going to end well so please play this back for him tonight i want him to live his dream

but this is not going to work i mean there's nothing in the mathematics here that works so here's the deal here's what's going through my head okay and and i'm the problem is i do math so here's the if you take what he gets paid per load and how many loads he can do in a day he can't even pay his payments so in in the in the dc metro area he seems to think he can. I know he seems to think he can, but he's the same guy who made all these other decisions. So I don't really care about his math skills. I'm telling you, the D.C. metro area is not that... You're not hauling gold over there.

They're not paying you in gold bars to haul this stuff around. He's going to get slayed. I don't know what to tell you. You got to stop him. That's what I'm going to tell you. That's what I would tell you. And you call me, so I can't just sit here and go along with insanity and go, oh, well, it'll work this time, because it's not going to.

The whole plan is a bad plan, every aspect of it. Please stop it. And you're attached to this guy at the hip. Well, there you go, Dave. Encouraging Dave. We'll just start this hour off with encouraging Dave. Oh, my gosh. All right.

Peter's with us in California. Hi, Peter. How are you? I'm doing well. How are you? Better than I deserve. How are you? I'm doing well. How are you? Better than I deserve. What's up?

So I had a question. My company's benefits package just opened, and we currently have an EPO, but I know you've suggested in the past that an HSA is the better route to go. The difference being is that my wife is pregnant right now, and she's expecting in August. You do the EPO? Do the EPO? Yeah, because it's going to have a very low deductible and probably 100% coverage on the delivery, isn't it?

So even if the premium on the HSA is $475 less monthly, you still have the EPO. Wow. Well, what is the HSA coverage for475 less monthly. Woo! Wow. Well, what is the HSA coverage for the labor and delivery? It's 15% pill insurance, and then the max out-of-pocket for an individual is, let me second. Now, labor and delivery usually falls in a different category. Are you sure that's true for the labor and delivery? Yeah, unfortunately.

Before, we used to have an EPO where it covered labor and delivery. Oh, the EPO doesn't. What does the HSA cover for labor and delivery? It's the same deal. Okay, then I'm wrong. You need to do the HSA, especially for

$475, but most EPOs cover labor and delivery 100%. That's why I jumped on that. No, I think you were probably on to it ahead of me. I think you had the answer before I got to you. It sounds like the HSA usually is going to be the route to go unless you've got a pending

event of some kind right in front of you, like a labor and delivery. The calculation on that, and then you may want to do the epo for one year if you do this one simple thing that we all do you are literally at risk of being hacked and someone stealing what you've worked so hard for. Do you ever use public Wi-Fi? I'm talking about getting online at a coffee shop, a store, the airport, or even at home. Hackers can use a simple $100 device to mimic Wi-Fi, and with just a little bit of skills, they can take over your financial life.

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because it saves hundreds and even sometimes thousands of dollars when they do it. Here it is. Shop your insurance. Shop your car and your homeowner's insurance with an independent agent who will shop among many different companies representing you and get you the best possible deal. That will almost always beat a captive agent that works for one company like a state farm or somebody like that right so go to dave

ramsey.com click on elp endorse local provider for insurance it's free to check with one of the brokers that we endorse in your area got an entire network of these and they can work with their entire network of insurance companies, and most people save on average around $700 when they work with an ELP over what they were paying. That's a lot. Click on insurance on ELP. Chris is with us. Chris is in New York. Hi, Chris.

How are you? Hey, Dave. I'm doing pretty good. How are you doing, man? Better than I deserve. What's up? Awesome. So first off, really appreciate you here to help me get out of debt.

Huge fan of yours. So thank you for that. Actually, a quick question that a friend had asked me. His real estate guy called him and was looking to bring his interest rate down. And I said, you know, let's call Peter Ramsey and see what he has to say about this. So my friend has a 30 year mortgage and his interest rate was 3.25%. His real estate guy said he's going to be able to bring it down to 2.75% with no closing costs. It kind of sounds like too good to be true, so I was just wondering,

and he was wondering what kind of questions should he ask before moving forward with this. His mortgage guy, you mean, not his real estate guy. His mortgage guy, yeah. I don't own a home, so I don't really know the term. That's okay. I'm just making sure because typically a real estate agent would not call you with a refinance deal. Okay. So, well, you know, I think he just needs to get into it because what he's being presented is below market.

The rates are down again, but I don't think they're that far down. I get a quote every day, and I didn't see anything this morning that shook me up and made me think they were that low right now so um okay that's below market uh i mean 325 is a pretty sweet deal right that's what you said he's got yeah and they're offering and they're offering him a 275 yeah and it's still a 30-year. Okay. Well, a 15 is usually cheaper than a 30. And so if they got a 275 on a 30, he might get a 250 on a 15. And if he truly is doing that with no closing costs, it's very weird. It sounds too good to be true, but it's possible.

I mean, you know, I would want to ask more questions and learn more and be sure exactly what he's getting into, that they're not putting, maybe they meant out-of-pocket closing costs, or maybe they're putting closing costs into the deal. You know, and if they're doing doing that then that doesn't make sense so but the way let's say there are closing costs okay the way you analyze this is you say a half a percent savings on his loan balance which is five hundred dollars on a hundred thousand okay fifteen hundred dollars on three $500 on $100,000. Okay, $1,500 on $300,000. That's what he would be saving.

And if his closing costs are $4,500 and he saves $1,500 a month, a year, that takes him three years to get his money back. Now, that would be more of a normal analysis that you would do. But that's where there's closing costs involved so you know i i just want to know more because this is this is very inexpensive interest rate and zero closing costs both are a little bit making me wonder how the deal's happening right sounds too good to be true it usually is so but look at it i mean you don't have anything to ask more questions and look at it. If it's completely true, ask them for what the rate is on a 15 and do it, you know, while you're at it. Good question.

Michael is with us. Michael is in Canada. Hi, Michael. How are you? Hi, I'm good. Thank you very much. How are you? Better than I deserve.

What's up? Okay. So pretty much me and my wife have been married for 13 years. We've been in debt pretty much that whole time. We finally are out of debt. Good for you. We have five kids. Thank you. We have five children, 12 to 2. We now have a stable work where we're bringing in a solid income. We have a surplus every month, but we don't have a zero budget, which we do have a budget. We budget every month.

We keep track of all our dollars, but we would really like to have the zero budget. We listen to your show quite often lately. But we don't know where to start putting our money. We don't know where to start putting our money. We, like, we don't know where to start. We hear everything, like, we hear you talking about 401K, Roth, something or others, and, you know, things like that. But, like, where do we start putting this money that we are going to be building up here very quickly? I think we're going to probably have about a $1,500 surplus almost every month. Yeah.

Well, congrats. That's awesome. Okay. So a zero-based budget simply means every dollar has an assignment. And what you're saying is you're at the point that you want to assign the $1,500 or so to retirement or to wealth building. And that way your budget now equals zero, right? And so every dollar needs an assignment.

And we teach a thing called the baby steps. It sounds like you're through with baby step two of your debt-free except your home. And baby step three is you need to make sure you have an emergency fund of three to six months of expenses. Once you've done that, then any surplus you have in your budget, the first 15% of your household income needs to go towards retirement. Now, you don't have Roth IRAs and 401ks in Canada. You have a different retirement system. And so you need to learn your retirement system. I'm not an expert on it. But put 15% of your income, and I recommend mutual funds of some kind.

Figure out something where there's good growth on it that's above average. And so we're putting 15% of our income towards retirement. Now, if that $1,500 a month is $18,000, that likely, I don't know what you're making, but it could be that that's your 15%. You could be there. Beyond that, let's say $1,200 is your 15%. Well, what are we going to do with the other $300? The next baby step is start saving for kids' college, and, boy, you've got a need to start doing that. You're going to need to start saving for kids' college. You've got a bunch of kids. And as soon as you've got kids' college underway,

if you find any other money, baby step six is begin paying off your home early. And that's the process we use here, and that's how I would tell you to do this. But the good news is you got up on top of this thing. You got your income up, and you're making the money that you have behave, and you're asking the right questions. Hey, thanks for calling. Amy is with us. Amy is in Oklahoma.

Hi, Amy. How are you? Hi. I'm wonderful. How are you? Better than I deserve. What's up? Awesome.

Well, I'm in a financial peace university class right now, and I'm working the baby steps, and I'm just a little bit stuck on where I should focus or prioritize because I have a couple of accounts in collections, which to my understanding, I shouldn't really worry about, but I've gotten notice from one that's in collections through an attorney's firm. And it's also my biggest, um, one of my biggest credit card debts. So I don't know, like timeline wise, should I start working on that first or should I, um, just work the snowball, the debt snowball that way? Yeah. How much do you owe that debt on that debt? It's $19,000. With who? Discover. Okay. All right. And how long has it been since you paid on it? August. I stopped using it and stopped

paying on it. I have three other, that's my third credit card. And they're all they all kind of maxed out so um well usually they do not sue someone this quickly eventually they will get around to suing you so probably this is just a scare tactic at this stage of the game if you can plow on through and get cleared up with your other ones you are making payments on it's going to enable you to save up and offer a lump sum to settle this quicker. Obviously, if they do actually file suit, you'll have to stop everything and address it. But I think they're just beginning to rattle the cage is what they're doing. This is the Dave Ramsey Show. We talk about it daily. Character matters. When I'm looking for team members, I'm looking for men and women who have character.

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Terms and conditions apply. In the lobby of Ramsey Solutions on the debt-free stage, Brandon and Emily are with us. Hey, guys, how are you? Good, Dave. How are you? Welcome, welcome. Where do you guys live? Wabash, Indiana. Welcome to Nashville. Good to have you.

And all the way here to do a debt-free scream. Yes. Absolutely. Fun. How much have you paid off? $47,787.52. Excellent. How long did this take? 16 months.

Good. And your range of income during that time? Started at 41 and ended at 96. Okay. That's a nice jump in 16 months. Yeah. Sounds like somebody got a job that didn't have one. Well, we got married.

Got married. Oh, well, okay. That's a way to add income. Okay. Good. What kind of debt was the $48,000? All student loans. Great.

Okay. So when did you get married? Eight months ago. Okay. So halfway through the journey. Yep. And were you working on it individually before that? And so this is the combined number or just one of you?

Just me. Just you? Yep. You had $48,000 in debt. She married you anyway. Absolutely. Took a little convincing. A little arm twisting huh okay very cool guys okay so you were attacking and attacking attacking it you get married it accelerates the process right absolutely but uh so tell me how this story went down so i actually grew up in a home where dave ramsey was it was

always talked about and i grew up going to the classes. My parents taught the classes. Oh, you're a financial peace baby. Yes. Okay. Yes. So I didn't have an option. Like student loans were not an option for me.

I commuted to school. Whoop, whoop. But then Brandon came along and drank the Kool-Aid, and here we are. Okay. So it was probably part of the way through my freshman year, I kind of realized that the decisions that I was making probably weren't going to be the best long-term decisions. And I spent a lot of time driving back and forth from college,

listening to your podcasts and realizing the hole I was digging for myself. So once I graduated, it was time to start getting out of it. Yeah, you were probably engaged by that point. Yes. And are eight months when you start this process. So what's your degree in and what do you do for a living? My degree is in agribusiness management and I work in ag finance. Good, good.

Okay. What do you do? I'm an HR and payroll in a long-term care facility. Oh, good. Okay. Very good. Cool. All right. do you do i'm an hr and payroll and a long-term care facility oh good okay very good cool all right so you get out of school get engaged and you engage to a financial peace baby so it's not really optional now nope you gotta get and besides that you were already you were already heading

that way right yes so were you already kind of working on that before you all met or did uh and then her her uh upbringing just put fire on it or how'd that work no so we were high school sweethearts we dated we've been dating since or we're dating uh as of 2013 um so i think it just kind of slowly kind of grew on me okay so she would mention it you turn on the podcast she would mention it you turn on the podcast yeah yeah and here we go yeah okay so there we go so you get out and you get married so was this like um once it started getting serious uh emily and and because people ask me about this all the time and it's always so intriguing to me at what point like a guy emailed the other day what at what point in the dating process do you bring up the dead snowball you know oh brother that's so nerdy but uh it's about the least romantic thing I can think of but anyway

at what point were y'all talking about all this it really wasn't like a struggle for us so I never really had to say this is what we're going to do or I recommend doing this he just kind of bought in and once he went to school he realized I don't really want to make minimum payments for 12 years plus so okay it really wasn't like that okay so you're just working together the whole time and it was more of a gradual incremental thing there wasn't like that. Okay. So you're just working together the whole time, and it was more of a gradual, incremental thing. It wasn't like this big one moment where there's come to Jesus meeting or something like that. Right. No.

No define the relationship moment or whatever you call that crap. Okay. Cool. Cool. Good for you guys. How's it feel? It feels awesome. Yeah.

Yeah. It's great. So you get married, and for the first time in your life, you're in debt. Yes. How did that feel? It didn't feel good. Oppressive, right? Yeah.

Oh, my gosh. Yeah, I hadn't thought of that. That's a different feeling. Yeah. Yeah. And, of course, you knew it. You kind of could brace yourself. It wasn't like a surprise.

But, yeah, you'd never had that feeling. And so, yeah, game on. we're getting out yeah yeah and uh all right so now that you've done it what's the secret tell you're a success you paid off 48,000 in 16 months that's pretty rowdy by the way excellent very well done um what's the secret to getting out of debt i would say probably about like what everybody else will say you know you have to know where you want to go and have a plan on how to get there. So obviously debt-free was where we wanted to go, and the budget is how you get there. You have to know where your money is going.

Very good. I would say the budget as well and just communication was key. Yeah. So I'm guessing your mom and dad, Emily, were like cheerleading for sure. Yes. Who were your other cheerleaders? I think our whole family was really supportive of the whole thing. Okay.

So you didn't have anybody calling you stupid or anything like that? No. You're crazy. You should just keep that debt forever. No. Some of these morons on Twitter. You don't have any of that stuff. Yeah.

Okay. Good for you guys. Yeah. So proud of you. Very, very, very well done. Very cool. So during the eight months before marriage and the eight months in marriage what was the toughest part of really leaning in on this i would say for me the toughest part was just not

allowing the lifestyle creep to happen i i graduated college when i was poor in college i didn't have any money so just just continuing that mentality and not um you know a a lot of my peers around that time, they would go and buy a lot of nicer, newer vehicles and everything. And I lived with my parents until we got married, so that was really nice. I was able to throw the majority of my income at my debt and everything. So just, yeah, just maintaining that broke college kid lifestyle i guess yeah way to go good job y'all well we got a copy of chris hogan's book for you everyday millionaires that's the track you're on that's awesomeness your parents decided years ago to change their family tree and you are proof that

that can happen so very very well done very well done and uh we'll get that make sure that that is signed by chris he's wandering around here somewhere, I think. And so thank you guys for coming down to do your debt-free scream. We're really, really proud of you. You guys are heroes. You're starting off your life so good. I mean, it's clean now. You can go do whatever you want to do.

Most people wake up at 48 and try to figure this stuff out. How old are you two? I'm 21. I'm 23. Oh, my gosh. This this is awesome you guys are awesome all right brandon and emily wabash indiana 48 000 paid off in 16 months count it down let's hear a debt-free scream three two one we're debt free man you're 21 and 23 years old you make 96 000 a year and you have zero debt you know how rich you're gonna be you've already lived like no one else now Now you're going to be able to live and give like no one else.

Unbelievable. Now what you need to hear in that story that was so beautiful was her mom and dad. See, her mom and dad years ago decided to get out of debt. Years ago decided to follow the stuff that we teach here, be on a written plan. Her mom and dad years ago decided to change their family tree so she never knew dad and as far as she was concerned you don't do that it's horrifying it's awful and and yet she falls in love with a guy who's got 48 000 in student loan debt but um and he's not you know he's not resistant so that mom and dad so they work

together they get it cleaned up that mom and dad's dream emily's mom and dad's dream of changing their family tree is still happening even even when she marries into dad it still happens because they still clean it up they still have that right mindset they still go forward so there's always hope on this stuff it It's absolutely amazing. Because, I mean, one thing you can do is really straighten your kids out, but then they marry poorly, right? That can happen. That's happened to friends of mine.

I've been blessed. Our children all married absolutely incredible people. We're really, really blessed. And I used to say we hit the son-in-law lottery, but that wasn't true. We taught the girls how to pick. And, boy, did they pick. I mean, my sons-in-law and my daughter-in-law are absolutely incredible people. So we are blessed. And, obviously, Emily picked well.

I mean, Brandon had a little debt. But, hey, on game together. Let's get rid of it. We get it cleaned up. They've got a bright future. They're way mature and wise beyond their years at 21 and 23 don't most of some of you old people listening that you wish you had half that brain when you were 21 just half of it just a half of it would have been good oh this is the dave ramsey show We'll be right back. Thank you for joining us.

Open phones at 888-825-5225. This is the Dave Ramsey Show. William is with us in Arkansas. Hi, William. How are you? Hello there, Mr. Ramsey. I am blessed and highly favored. How are you, sir?

Just the same, sir. How can I help? We have a mandatory retirement contribution at my job i work for the state of arkansas it's six and a half percent mandatory plus they do a match plus which takes me to 17 on my retirement they do i'm sorry what is a match. They match what you put in addition to the 6.5? They give you your 6.5 back, which is 13%. Then there's a plus to that where they put in an additional 4%. Okay.

So that has me at 17%. So you have to put in the 16. You have to put in 6.5. They match it with another 6. a half and then they give you some more yes sir and that gets you to another four percent that gets you to 17 going in what is that going into i well it's a state retirement package so i do not know okay so we don't know what it's invested in nor do you get to pick options or control the investments you know you do not get to control the investment that would be normal but i'm just verifying okay all right we've also got a deferred

comp package which i'm also invested do you have a 401k also or a 403b also no it's just it's called a deferred comp yeah well there's different sometimes i have deferred comp and those other things that's why i'm asking so this is oh this and the deferred comps Yeah. Well, there's different. Sometimes they have deferred comp and those other things. That's why I'm asking. So this and the deferred comp is all they've got. But the deferred comp you can pick mutual funds to put money into, right? Yes. Okay. That's a 457 plan it's called.

It's what deferred comp is. And all that means is you're not taking compensation today. You're saving it instead, and so you're not taxed on it today. You will be taxed on it, of course, when you take it out, like you would with a traditional 401k, and you'll be taxed on any growth when you take it out, like you would with a traditional 401k. So it functions a lot like an old 401k, okay? All right, so in your case, what we tell folks to do is to put 15% of your income away, regardless of the match. And so you're putting six and a half away,

and that means you would put another 9% away. So would I put that 9% in the deferred comp after I get out of baby step two and get my six-month plan going here? I probably would put it in Roth IRAs independent of your job first. Okay. Not probably. I would put it in Roth IRAs independent of your job. That is exactly what I would do.

What's your household income? $43,000. Okay. All right. You're allowed to do, if you're under 50 years old, you're allowed to do $6,000 a year each if you're married and i go i turned 50 this year single okay okay so you can do 7 000 this year uh into a roth ira and uh let's see that's more than you need to do anyway so you'd be just fine yeah so what i would

tell you to do is your advice i'm sorry i sure appreciate your advice. I'm sorry? I sure appreciate your advice. Sure. So what I do is sit down with SmartVestor Pro and open your Roth IRA in some good growth stock mutual funds. I invest my growth, my mutual funds, and I suggest the same for others across four types evenly, growth, growth and income, aggressive growth, and international, and sit down with SmartVestor Pro and understand those, understand those understand the Roth IRA comes automatically out of your checking account and I would put the equivalent of nine percent of your income uh which would only you know you make forty thousand or forty five thousand and so that's going to be four or five thousand dollars you don't even need to max

out that Roth to get there so you do the six and a half over at work and then do, you know, do four or five thousand, something like that, into a Roth. You do 400 a month, it'd be 4,800. That'd be an easy number to remember. And get that across those four mutual funds, that'd be 100 bucks each one going in. That's probably a good way to do it, actually. But sit down with your SmartVestor Pro and they can walk you through that. Click SmartVestor at daveramsey.com those folks don't work for me but they're people we endorse that have the heart of a teacher hayley is with us hayley is in texas hi hayley how are

you hi jay oh my goodness how are you good how can? So I, my husband and I have just started this. We're not even a month in. And we used our tax return to pay off four credit cards. And we still have, I went to school and I have two student loans. One's from the Evil Navient and then the other one's from Great Lakes. And my question, I actually have two, but my biggest one is, should I or can I consolidate my Great Lakes student loan? Is it possible and is it worth it? It's $29,017.28. What's the interest rate on it?

Well, there's three of them, and it is, so there's two of them. One's 5% and the other's 7%. Okay, and what's the interest rate on the Navient? There's three of them, and it's 29 altogether. Interest rate? Yeah. No. Navient doesn't have three of them, and it's 29 altogether. Interest rate? Yeah. No. Navient doesn't have 29% interest rates.

29. No, I mean altogether that I added it. But what are the individual – no, it's not calculated that way. What are the individual interest rates on Navient loans? Like you gave me three different rates on the Great Lakes loans, right? Five, five five and seven right okay what is it on that yeah um i'm not sure i think it's like seven like i don't know off the top of my head um well there's three of them and they total 29 one of them's over 10

yeah okay another a lot i mean okay well the only reason you consolidate student loans is if you get an end up with a lower overall interest rate and um and so it's not adding them together like that where you get 29 that's not the calculation oh you get you got you got five on a certain amount, and that amounts to a certain number of dollars. And you got seven on a certain amount, and that amounts to a number of dollars, and so on, and over on Navient. So you've got six different loans you would calculate and then say, okay, is the net effect of this? So for instance, if you could consolidate them at 6%, but some of them were at 5% and some of them were at 12%,

and the total across the whole board was larger than 6%, then you would do the consolidation. Okay. And so... Would it matter? I'm sorry. Go on. I didn't mean to interrupt. Okay. So you don't have any refinance costs if you go to Splash Financial that we endorse, okay? And they can help you run it. I tried to go there. Do what?

I tried to go there, but they said that they don't do it if you haven't graduated. Oh, well, that would be true. That would be true. Okay. So when do you graduate? So I went to Lee in Cleveland, and I didn't get to. So I went to Texas instead. I was originally in Tennessee. Are you currently enrolled in school?

No. Well, then they didn't understand. They thought you were still enrolled. They won't refinance them or consolidate them if you're still enrolled, but just because you didn't graduate doesn't keep them from refinancing. That's not how it works. So holler back at them again. Jump on the phone with them.

They'll help you. They're good folks. And what you need to do is you've got to calculate the overall rate compared to the current rate they're quoting you, and then that will tell you what the best need to do is you've got to calculate the overall rate compared to the current rate they're quoting you and then that will tell you what the best way to go is you probably do need to consolidate these because it will save you some on interest but overall hayley your bigger problem is not your interest rate your bigger problem is to get your income up your out go down so you start chunking big dollars towards these things because they're not going to go away based on interest rate.

They're going to go away based on big, hairy principal payments. That's what makes them die. Go away, Sallie Mae. Go away, Navient. Go away, Great Lakes. But, yeah, holler back at Splash and talk that through with them again and then start working on things you can do to get your income up and get yourself on a really, really tight budget, kiddo.

You can do this. You can do it. It'll work for you. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host, and we'll be back with you before you know it. You know what? Hey guys, it's George Camel, host of the Dave Ramsey Show video channel. You can now listen to the show on your smart speaker. Just tell your Alexa or Google device to play the Dave Ramsey Show or find out all the ways you can benefit at DaveRamsey.com slash smart speaker.