The Ramsey Show - App - I Have $1 Million in Student Loan Debt! (Hour 1)

Episode Date: November 4, 2019

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Music Music 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. Thank you for joining us, America. We're here to help you. Open phones at 888-825-5225. That's 888-825-5225.

Kelsey starts off this hour in Ohio. Hi, Kelsey. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks so much. I'm really looking forward to getting your counsel. I'm honored. How can I help? Okay. So I think I'm on baby step seven. Let me give you some background. I'm 26 years old. I have no debt. I have an annual income of

about 48 to $50,000 and very limited expenses. I'm unmarried. I have no kids. I don't have any on the horizon either, but you know, that could really change even within the next year. Who knows? And I have, for me, it's a significant amount of savings. I have about $130,000 just currently in a savings account, which I know is a terrible idea. I am planning to keep roughly $20,000 of that as my emergency fund. I was thinking about keeping about $60,000 as just a prepaid 100% down payment for a house if and when I need it. And then I also have $11,000 in a Roth retirement account. But my question is, how should I treat the remaining $40,000, if my math is correct, and whatever else I can save for each paycheck?

I mean, I've got a couple of options that I was considering, but I'm not sure what really the best way to approach this is. Where did the $110,000 come from? $130,000, I've saved it. Wow. And you're 26. Yeah. You're a rock star. Very cool. Thanks. Good for you. 100% debt-free, $130,000 in savings. We're going to set aside $20,000 for emergency fund, the other $110,000. Why would you not buy a $110,000 house when you get ready? Well, it's not something that I need. Even if I were to get married and have a family, I don't think I would need anything more than a small little house to begin with. And I would feel uncomfortable having 100% of my assets tied up in one property okay not the end of the world uh i wouldn't feel

uncomfortable because you're 26 and you're an incredible saver uh so it's not like you're never going to have any money again um you know and the 110 000 home is a legitimate investment is going up in value um and generally speaking i don't know where you are in Ohio, but generally speaking, a $110,000 home is more than double nicer than a $60,000 home. Yeah, I'd say so. Yeah, I mean, it is more than double. It's not even double the money, but it's more than double nice and would go up in value commensurate with that and so forth.

So that's probably where i would lean but only when you're ready to buy and you're not ready to buy today so uh you can you can park other than your twenty thousand dollar emergency fund you can park it wherever you want you can leave it all in a savings account if you think you're going to buy something in the next five years that's probably what i would do uh if you want to put some of it into a mutual fund you could do that i would just use something like a-load S&P for a short-term park like this. And, you know, if you put $50,000 of your $110,000 in there and left $60,000 in savings and $20,000 over in your emergency fund, that'd be okay. If you've got something else you want to do with it, that's fine.

It's no problem with me either um you're you're doing really well you're going to be fine i think you can uh you you have good instincts and uh i would completely deputize you to trust your instincts you uh because you got good ones i mean the the thought processes and critical thinking skills that you have brought you to where you are i don't think they're going to steer you wrong. So you're fine. And if you want to stay a little more diversified, I completely get that. Hey, thanks for joining us. Open phones at 888-825-5225.

Konesha is with us in California. Hi, Konesha, how are you? Hi, Dave, how are you? Better than I deserve. What's up? Hi. Well, I am Colleen. My question is my husband and I just started our baby step number two this month.

Good. And prior to learning about you, I literally learned about you last month and we started this month. So prior to that, we were in the process of purchasing a new primary residence. And this primary residence that we're looking into is significantly more expensive than our current home. And we also own another home whom my stepson lives in. So it's just kind of a rental property for us. And so my question is whether or not

we should actually move forward with purchasing this new process since we've begun this get-out-of-debt plan. I would not unless you're contractually obligated. I wouldn't tell you to break a contract. Have you signed a contract? No, it's actually something that I know personally. So it's just been we have put things in writing, but the purchase is actually not to kind of move forward until January.

Okay. I mean, this is someone you know personally. We're just trying to treat other people like we'd want to be treated here. Are you breaking your word and going to leave them harmed? No. Actually, the seller actually owns countless properties, and this just happens to be one that they're just like, hey, I think I'll sell it, but if I don't, I'm okay with that.

So it literally was just kind of a random conversation that we had. Good, let it go. Yeah, okay. Let it go. You've got debt coming out of your ears. You're just learning to get control. The last thing you need is to move up in house and a bigger house payment right now. I mean, wouldn't it be so much more satisfying and wise to do this after you had your financial act together, right?

Right. And that's what I'm, I mean, I want the house to be a blessing. Right now it kind of feels like it's on a wing and a prayer and a hook and all this. And, you know, it's kind of scary without even getting into your numbers is what it feels like. Am I wrong? It would be basically we'd go from, you know, $1,900 mortgage to anywhere between $3,400 to $3,800.

And what's your take-home pay a month? Take-home between my husband and I is about anywhere between $10,000 to $11,000. Yeah, $3,400 is pretty rich. You've probably already figured out we tell people not to take on more than 25% of their take-home pay on a 15-year fixed rate, and this would violate that. Plus, you're in debt. Other than that, you're working your baby step, too. So I think there's a lot of houses out there, and I think there's another one that will be a bigger blessing to you than this one will

because it's purchased in the right time, in the right order, without getting yourself stretched. And I wouldn't do that deal, especially since we're not obligated into it. Hey, thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Kara is with us, and we'll come back to her after this break.

One of these days I'm going to learn to re-clock. I've only been to a talk radio 30 years, you would think. You jump in. We'll talk to you about your life and your money. The phone number is 888-825-5225. I am Dave Ramsey, your host. You know, I get asked all the time, at what age should I buy life insurance? Let me be clear. If you have a family, if there are people depending on your income, now is the time to have term life insurance.

I don't care if you're 20, 30, 40, 50, or whatever. Your age is less important than your financial situation. If you have debt and a lack of savings, it makes no sense to risk your family's financial well-being based on the cost of a term life policy. Term life rates are just plain cheap, even if you're not in perfect health. And the best way to compare those rates is through Zander Insurance. Zander only sells the plans I recommend and shops among the top companies to find the best rates and the right coverage for you. Call 800-356-4282 or visit Zander.com. You got no excuse to put this off, folks.

Bad things happen to people all the time, regardless of age, and it's your responsibility to deal with this. That's Zander.com or 800-356-4282. Justin is with us in Florida. Hi, Justin. How are you? I'm doing well, Dave. How are you? Better than I deserve.

What's up? So I had a question for you. I just recently graduated from residency to become an orthodontist, and I have student loans that total just over $1 million. You're kidding me. No, sir. What were you thinking? Well, I wasn't thinking clearly.

So I sat down and calculated my interest rates, and my interest is about $5,800 a month. So my fiance and I were trying to decide what's the best way to try to attack this if we were this first year able to pay $10,000 a month. I guess there's basically two ways that we thought of it. I can do income-based and my required payment will be about $3,000 and then we can take the remaining $7,000 and pay it directly at individual loans or should we cover the interest and then pay additional monies towards other loans. So what is your income going to be? When are you getting married? April.

Okay. And what will you be making as an orthodontist? About $250,000. Okay. And what does she do and what will she be making? We actually just opened up an office, and she works in the office, so she's not taking any income out of the office. Okay.

So if you make $250,000 a year, why are you only putting $120,000 on your debt? Well, I mean, the $250,000 I calculated pre-tax and everything else. I mean, we're going to put as much as we possibly can on the debt, yes, sir. I mean, and in the years to come as the income goes up, we're hoping to be able to make payments of $20,000 or $30,000 or $40,000 a month. I mean, that's what we're praying for. Otherwise, I'm just up a creek without a paddle. Yeah.

Okay. I think the thing you have to – yes, I would – the income-based option does not do away with interest. And so interest is going to be accruing greater than you're putting in. Okay? So you don't – you're not making any mathematical progress by doing the three and seven idea, but you will make emotional progress because you'll be able to knock off some of the smaller ones. Right, right. And God knows you're going to need some emotional progress in this process so um and then the the only other commentary i would just add is that um

this is such an extreme situation uh your income is extreme and your debt is extreme that you have to be very very careful to um just act like you're a broke college student because you are a broke orthodontist. Right. And so that means you guys aren't going on vacations. You're not buying a house. You're not leasing a new BMW. You're not going to a restaurant. You have a million.

I can't even say it out loud. I can't breathe. A million dollars in student loan debt. It gives me an anxiety attack, and it's not even my debt. But the horrible news is that ridiculous figure. The wonderful news is you have great income potential and a great income right now. So you cannot relax. Right, right. You have to cut as deeply as you can cut. Right, right.

You have to cut as deeply as you can cut. Right. And so be dialing your taxes in. I don't want you to get behind on taxes, but other than taxes and food and water and electricity, I really want everything else just going on student loan debt. Is a 250 gross sales in your new office? So, you know, like I said, I just graduated this year, so I work part-time for another orthodontist to have a steady income.

And the office that my fiance and I work in, we just opened two months ago. So, you know, the income is just steadily increasing on that. Right. But I guess I'm asking the $250,000, how much of that's from the new office and how much is from the orthodontist gig? About $200,000 of that is from me working at another orthodontist, where I still work three days a week, and then I work in my office three days a week.

So I work six days a week right now. Okay, that's good. That's good. So we ought to be able to turn that 50 into 250. Oh, sure, yeah. Yeah, over time as you build your clientele and so forth. Okay. Mathematically, is there any benefit, though though to me like i was mentioning before doing

okay okay because you have a set interest rate and a set amount of principal you have to pay both you have to pay both and so not paying one and paying more on the other is just hiding the p under a different shell okay the only but the only benefit of doing the income based is because your interest is probably close to five thousand a month no fifty eight hundred oh it is the that's the actual interest rate okay and so i'll calculate yeah and so let's pretend that you paid the income based at three thousand so somewhere another uh two thousand eight hundred is landing on the books as increased balance. Right, right. And then you're reducing other balances by seven, principal and interest on the smaller ones.

And so, like I say, we're just moving the P around under a different shell, but it will give you the benefit of getting to check off some of these smaller ones what is your smallest one uh well i mean i have a consolidation that's like 800 but most of the small i have maybe half a dozen small ones that are 4500 or less yeah and so you're going to knock those out like one a month two a month that kind of thing and for the first little while and you know then we're going to get down to the big the big mama jama the 800 and then it's going to slow way down in terms of the emotional benefit and it'll be very simple to do the calculation but you're going to accrue 5800 worth of interest somewhere, and you are going to reduce principal by $4,200 somewhere.

Somewhere. In total, by using $10,000. So it doesn't matter. The only benefit is just to be able to check those little ones. I like cleaning up the little ones, getting the dust out of the corner, getting rid of the mosquitoes, and then we'll get down to the bear hunt, because you go from mosquitoes to bears pretty quick here. And so that's overwhelming.

But the good news is you've got a great shovel and you have a great bright future with your income potential. And, you know, that gets you out of this. It's not a reason to get into it, but it does get you out of it. It gives you hope for your future. Thank you for the call. Open phones at 888-825-5225. So if you were worried about your $12,000 in student loan debt, that guy was for you today. A million dollars in student loan debt.

Insured by you and I. We're the taxpayers. We insured that loan against default. I think he's going to make it. I hope he makes it. I want him to win. But on a cultural level, on a policy level, the fact that we have a system in place that would even allow that to occur, that Congress has put in place a system that allows that to occur,

for you and I to guarantee his student loans, is about as asinine as anything I've ever heard. This is the Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions on the debt-free stage, Billy and Jessica are with us. Hey, guys, how are you? Fantastic. How are you? Great, Dave. How are you?

Better than I deserve. Welcome. Where do you guys live? Minnetonka, Minnesota, just outside of Minneapolis. And all the way to Nashville to do a debt-free screen. Welcome. Good to have you. Thanks for having me. How much have you paid off? Paid off $51,481.70.

Cool. And your range of income during that time? Range of income, $88,000 to $100,000. Okay. How long did it take? Exactly 16 months. 16 months to the dime. Okay.

And $51,000 worth of what kind of debt? Oh, what didn't we have? We had two student loans, we had a car loan, a credit card that we just had to have the miles on, and a little bit of consumer debt. Cool. Good. Okay. So you were kind of normal. Very, very normal. How long have you guys been married? A little over four years. Okay. So a couple years after being married, something happened, Let this fuse to where 16 months later, boom. What happened?

Well, it goes back further than that. Back in college, I listened to a lot of talk radio, and I heard your show. Didn't do any good, though. No, no. Me and my 19-year-old wisdom thought I knew more than you. So I knew about you in college, and then fast forward, we got FPU as a wedding gift. Oh, okay. And we were still stubborn, and it collected dust on the shelf for about, oh, three years or so.

It does that sometimes. Yeah. Yeah, so we figured the next step for us was to get a house. We always wanted one. And so we went to an open house about, yeah, three years ago, and I remember distinctly, because it was such a hot real estate market, I think there were multiple offers on the table, I remember distinctly walking through the house and just getting like a really bad feeling

of fear and of pressure and doubt and all that stuff. So I really, I just thought, okay, well, we're making the biggest financial decision of our life and we have a minimal down payment. We had just gotten pre-approved for a loan a week prior. And so I think Bailey and I really aren't impulsive buyers or anything like that so we thought okay we're walking through we're going through the motions thinking that's what you're supposed to do but um just realized there has to be a better way than this and just that feeling that we had it couldn't have been good and we just kind of took a couple steps back and um dusted off FPU from under our bed and thought I think it's time okay so you So you joined a class. We watched the DVDs.

Okay. The home study version. Yep. Okay. And you go through it. So the house, the potential weight of overbuying a house in a situation when you're broke scared you straight. Yep. Absolutely.

Yeah. Okay. And you get the box out, and you start going through the DVDs. And when you're both sitting there looking at them, what's the first reaction? I mean, the first thing that happened that you were saying, wow. I really think it just, there's so many people who are just normal, have so much debt, and have a car payment, a house payment, an everything payment. And we just thought there has to be, this can't just be all.

There has to be a better way. There has to be a much more sound way that we can go through this. And we're thinking about starting a family in a couple years and things like that. We thought, okay, if we're not financially sound, if we don't have the confidence, if we don't feel good in what we're doing, then that's going to no doubt carry on to our children. So we thought we need to put the brakes on now. We need to figure out where that better way is, and it's obviously through you and your team. Yeah, and FPU really gave us the confidence to see a clear path

and how we can achieve those goals. So you paid off $51,000 in 16 months. What's the secret to getting out of debt? Well, really, it's the budget. It's the written stuff. That stuff is obvious, and all the financial, the tangible stuff that you and your team teach. But the biggest thing for me has just been intentionality.

The power of that is absolutely incredible. Yes, you teach finances, but that's such a small part of it. It's the behavioral stuff. It's the immaterial things that we learned. I mean, our marriage was strong, but, God, it's grown stronger than ever. And just the appreciation, the patience, the love, all that. I mean, that's cascaded in a couple things for us. The first thing is billy has lost over 40 pounds so far where's billy yeah um he yeah he's he still has a little bit to go he wants to but i mean just to watch the

transformation for him too and it's honestly all because we've got the financial discipline and now we've got all the other discipline. The second thing, too, is... Discipline always begets discipline. Yes. Exactly. Good. Yep. The second other big thing was your team with Christy Wright and the Business Boutique has been a huge... It's been awesome. We've listened every day since we decided to get out of debt.

And three weeks ago, we just started our own business. It's a home bakery out of our place. Good for you. How fun. Thank you. So your husband's losing weight and you start playing yeah that's that's right out of your place yeah that'll work yeah yeah really testing the discipline i'm thinking yeah so i just so just the stuff that your team has taught us i

mean it's just it's been it's been pretty amazing finances is just a tip of the iceberg from what you guys have done well we're honored we're honored to walk with you. You're rock stars. Very, very cool. Heroes. Well done, heroes. Well done. Very well done.

You know, it's interesting. The number of times we hear the story that someone lost weight or their marriage was impacted, the discipline begets discipline once they start. But I think there's something about having some wins. Yes. I think the more self-confident you are, the easier it is to have discipline. Yes. Sometimes a lack of discipline is, I don't believe I can do it.

And that's a lack of confidence is really what it is. But once you've had some wins, you go, well, I can do that over there then, too. And I can do that over there then, too. And I can do that over there. And now I can start a business. And our marriage over there then, too. And I can do that over there then, too. And I can do that over there. And now I can start a business. And our marriage is going to be better. And I can lose weight. And, oh, by the way, I paid off $51,000 in 16 months, too, by the way.

Way to go, you guys. Very cool. So outside of the two of you, who were your biggest cheerleaders? Definitely our parents. We told a few close friends and family. But they are definitely our biggest cheerleaders. I think we're both of our parents. Who gave you FPU?

Do you remember? It was a cousin, his wife of mine. Yeah, to Chris and Gina. Okay. Do they know you did this? Yep. Okay, good. Good.

Well, they should know. Exactly. It's all their fault. Yeah. They should know. It's like the perfect Christmas or wedding gift or whatever. Yeah, exactly. Went to a couple of weddings this weekend.

I'm thinking, yeah, you need this stuff. I can't give FPU. That'd be a little tacky. But I just really want to. It's like, yeah, Dave really likes himself. He gives us his own stuff. Yeah. But, yeah, very cool, you guys.

Dave, that's funny you say that because we actually, part of our wedding gifts now, we give total money makeover. And we just write a note on the first page and just kind of say how it's impacted our marriage, how it's made it a lot better better and kind of a good gift for newlyweds just to start their journey so yeah very cool hopefully it won't collect too much dust yeah good good job you guys very very good very proud of you we've got a copy of chris hogan's book for you everyday millionaires because that's the next chapter uh when this bakery goes big here we go man here we go and uh yeah you're going to be outrageously generous and very wealthy congratulations

can i say something real quick today sure yeah so since the first day we um started getting out of debt i wrote this on our fridge it sounds really silly but it's just made such an impact on us um you you wrote um or you said um getting out of debt isn't an intellectual exercise it's an emotional event and so if anyone asks us like how this process has gone for us how we explain that in two sentences that's what we'd say because it's just this sorry i'm gonna emotional bully the stuff that you're in your team i've taught like like finances yes that it's just numbers at the end of the day like you can do that together and just like the importance of spousal support too it's just how many callers call and saying i can't get my wife on board i can't get my husband on board i mean the way he had dealt

with that he sent me to like he was just absolutely brilliant and so if i can give anybody advice anyone who's listening was struggling anything like that like spousal support is everything and just know that finances is only the beginning because what can come after that is pretty pretty amazing so thank you well done you guys you guys. Very good. All right. They did it. I'm proud of them. You are, too. Billy and Jessica, Minneapolis area, $51,000 paid off in 16 months, making $88,000 to $100,000.

Count it down. Let's hear a debt-free scream. Get ready, Dave. Three, two, one. We're debt-free! Yeah! Woo-hoo! Yeah! Woo-hoo!

Yeah! This is how it happens. Wow. Started a business, lost 40 pounds, and had their marriage impacted. Oh, and by the way, paid off $51,000 in debt. See what people can do when they believe they can? The old Henry Ford quote is correct. If you think you can or you think you can't, you are correct.

That's the deal. Now, is it harder in some situations? Yeah. Do some people have some stuff stacked against them that others don't? You bet. In spite of that that you can win in spite of that you can do this stuff it's always in spite of it you know it is and you really ought to get in spite of your debt like i'm yeah i'm in spite of my debt time to get out people they did it they did it way to go, Billy and Jessica.

This is the Dave Ramsey Show. We'll be right back. Cara is with us in South Carolina. Hi, Cara. Welcome to The Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. I have a question. So my 401k plan right now with my job, they do offer a match.

It's a 200% match up to 4%. That's wonderful. I know you recommend doing 15%, so is it okay for me to factor in their contribution as that 15%? No. No, I want you to put in

15% of your money. Okay. And this 200% is just going to be gravy on the biscuit. I mean, that's amazing that's wonderful have they got a roth ira roth 401k option um no it's a 2055 i don't know what a 2055 is it's a target retirement 2055 fund okay that's all i know about it so far i don't know what that is there's a lot of stuff dave doesn't know and that's one of the things so anyway cool yeah no i would put i would be do you

have control of the mutual funds in it that you pick i'm not sure i haven't looked that far into it okay yeah you need to learn about that and i don't know what the other thing is, but if there's a Roth option to the 401k or to the 2055, take it. Now, the matching portion will not be Roth, and that's fine. No problem. I'll definitely take the 200% anyway. But wow, that's awesome. Now, you need to have the exercise of putting 15% of your income into retirement. It may be step four.

Five is kids' college. Six is pay off the house as soon as you can. Once it's paid off, then seven is you just, you know, you pour money into all your investments and you increase your generosity. And so it just goes, it goes zoom, zoom then. So very cool. Very well done. Our question of the day comes from blinds.com.

They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they remake your window blinds.com they have a 100 satisfaction guarantee it means even if you mismeasure or you pick the wrong color they remake your window blinds for free you get free samples with these guys free shipping new promos they run all the time you save money use the promo code ramsey blinds.com seth's in north carolina i'm-free, looking to purchase my first house within the next 6 to 18 months. This year, we have until April 2020 to contribute $6,000 to our

Roth IRA. Should I contribute $6,000 for the 2019 tax year, or save it and use it towards my down payment? Either one's okay. Either one's okay. You're at what we call, you need to have an emergency fund in place of three to six months of expenses plus your down payment. And then that puts you at baby step three.

And now then we're moving, once you have your emergency fund in place, you are putting 15% of your income away into retirement. Or sometimes people push pause right there, and we call it baby step 3B where they just save up for their house, which means that you could put money towards retirement or you could put it all in the house, fund either one. You're young enough at 27 that I'm probably going to lean towards the house because I want to get that house paid off, and you've got plenty of time to dump money into retirement funds.

But you do want to get with it. And the good news is you're smart enough at 27 to actually be asking this question. So the answer is either one is fine by what we teach. Courtney is in Arizona. Hi, Courtney. Welcome to the Dave Ramsey Show. Hi, Dave. How are you?

Better than I deserve. What's up with you? Hi, okay, so basically I am 24. I recently started a new job, so I'm making somewhere between $56,000 and $58,000 right now. It's on probationary period where in January I'm going to be bumping up to $69,000, which exceeds what I need. I have $17,000 in debt on my car, which on my current payments plan should be paid off in about a year and a half. And my question for you is with this extra income, I feel like there's a lot of good things that I can do for myself to set myself up in the future. And I'm not sure if I should try to pay off my car faster.

Should I be putting it into a Roth IRA? Should I be investing it somewhere? I'm kind of thinking about, like, I'm going to want to buy a house one day. I'd like to pay for my kids' college education one day. Like, all of these things that I'm just not certain. It's a good position to be in. I'm just not sure. Yeah. You're doing really well.

Way to go, Courtney. 24 years old, getting ready to be making $70,000 a year. That's pretty impressive. What do you do for a living? You know, I work in occupational safety um in the aviation industry yeah and my dad actually listens to your program a lot so cool so what we teach is because what we teach you to do is we have had people come at us with all this all these choices for years yeah and what we figured out was all of those choices are actually good choices they become better choices when you attack them in the right order.

Okay? And so we came up with an order years ago, and now about 5 or 10 million people have used this process. We call it the baby steps. I'm going to send you a copy of the book, The Total Money Makeover, which will outline these baby steps for you. But the first goal you have is you need to have $1,000 dollars saved do you have any money in savings that's not retirement yes how much you want to know okay it's seven thousand seven thousand dollars okay so then baby step two is to become

debt free other than your home you don't own a home so right now it would be to become debt free do you have any debt other than your $17,000 car? No. Okay. Then what we teach you to do is be on a written budget in great detail, and with great focus and with great intensity, we're going to attack this car with every dollar we can squeeze out of your life. Eighteen months to pay this car off is ridiculous.

You should pay it off in six months. Okay. Because I'm also going to take $6,000 of your $7,000 and throw it at it today because Baby Step 1 is only $1,000 in savings. Everything else goes on the debt. So now we've got $11,000, $2,000 a month, and you are done in six months. $3,000 a month, and you are done in four months. $3,000 a month and you are done in four months. And you almost can do that with your new money coming in. Now, you don't have a car payment anymore.

The next step as soon as that's done is you raise that $1,000 account up. This is baby step three to a fully funded emergency fund of three to six months of expenses. And in your house, that's $10,000 to $15,000. Okay. Somewhere in there. And you don't touch that fund for anything. That's not a, I want to go on vacation, I want to go on a road trip, I want to buy a couch.

It is not for any of that. It is only for if you lost your job or the transmission went out in your car, big emergencies, okay? Beyond that, if you want to start saving for a house is when you would do that, and you would start baby step four, which is to start putting 15% of your income into retirement plans, 401K at your job or a Roth IRA on your own or a Roth 401k at your job, especially if they've got a match at that point. Up until then, you're not doing any investing. So we're going to get out of debt, have the emergency fund,

and then work on the down payment for a house and start investing. Baby step five is kids' college. You don't have kids yet, but you did mention that. Someday you'd like to do that. And baby step six is pay off the house that you buy someday as quickly as you can so when you get that house paid off then it takes you to baby step seven which there's nothing left to do at that point but become very very wealthy and give a bunch of it away so hold on kelly will pick up we're going to send you a

copy of the book the total money makeover and help you get this done. Way to go. Great job. Very proud of you. All right, open phones this hour at 888-825-5225. If you aren't strapped with student loan payments, odds are you know someone who is. We launched a brand-new podcast called Borrowed Future. There are eight episodes. Episode 6 drops today featuring interviews from insiders, thought leaders, whistleblowers, Mark Cuban, Seth Godin, Seth Frotman, and of course me, and we dive into

the Student Loan Forgiveness Program, which is, of course, another joke and another epic failure. And you can learn all of this. The podcast is called podcast is called borrowed future and it has already got over 5 000 reviews this guy says i had no idea what the student loan crisis was this bad and it is shocking to hear how the government is such a big player in this crisis if you have a child please listen to this podcast it can save you and your child's future. So Apple Podcasts, Spotify, Google Play, anywhere great podcasts are. It's called Borrowed Future. You do want to hear this. It is a new endeavor for the Ramsey Networks.

We've not usually done this type of interview type documentary version podcast, and it is very good. Lights out. We've already had hundreds and hundreds of thousands of downloads so be sure and check it out that puts this hour of the dave ramsey show in the books 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 DaveRamsey.com slash show.