The Ramsey Show - App - Living Broke, Desperate and Without Hope (Hour 1)

Episode Date: September 3, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America, because it's all about you. Open phones at 888-825-5225. That's 888-825-5225. Wendy starts off this hour in Miami. Hi, Wendy. How are you? Good. Hi, Dave. How are you? Better than I deserve. What's up in your world well first i want to thank you for taking

my call and um i wanted to call and speak to you for some guidance my husband and i were both 40 we just moved from new york over to uh south florida and we started our own dog walking pet sitting pet taxi service um it's called boogie and Pals after our dog. Cool. Yeah. And the problem we're running into, which is not a surprise because you've mentioned before that debt doesn't happen from one day to another, is that we have accumulated debt that is way above what our income is. Currently our outstanding balance for our lenders is $31,000.

I mean, because this is a startup company, two things. We don't have any money, very little every month come in. And secondly, it's an irregular income. And to add more stress to this problem, a personal side note is that since I am 40, we want to have a baby, but time is of the essence. And the longer I wait, the higher risk of this pregnancy will be. So what I would like to do, what I'm working towards, what we're working towards is to reduce our debt by this time next year. That way we could plan for a baby. I don't think it's a smart thing, and neither does my husband, to start a family with so much debt and an unknown income, but at the same time, I realize he tries to mansplain things to me about the finances, but as a woman, it's kind of difficult for me to wrap

my mind around that. Okay, let me tell you what I'm hearing. I'm hearing that your irregular income is not your problem. You guys aren't making any money. Right, right. And how long have you been doing this business that doesn't make money? Well, we moved here about a year ago, a little over a year ago. That's too long for a dog walking business and that's too

long for a dog walking business to not make money that's too long way too long i mean you walk dogs you get paid you take care of dogs you get paid the money that we get goes towards paying our bills and our emergency funds that we have using the company money keeps getting decreased every month. You're not making any money. Okay. You're not walking enough dogs. Right.

Your problem is income. Okay. That's your problem. You don't have any income. Right. Well, we have, unfortunately, well, fortunately fortunately we do have uh some income he ubers and we uh have about 1800 coming from his trust fund which we significantly reduce from 2500 per month because we don't want to wipe out his uh his trust fund that's a good idea it's gone from 25

to 1800 so the dog walking thing by 200 the dog walking thing has from now until Christmas, and it triples its income, or you close it and go get a job. Okay. Because you're not making any money. I mean, you're not making any money. Because you got Uber income plus $1,800 dollars and you can't even live with that so i know you're not making a thousand dollars a month two thousand dollars a month on this dog thing no no we're not we're starving to death about six to seven hundred and we're usually in the

red about six hundred which means it's a bad part-time job is what it means okay so i i think you either both of you can't commit to it for sure one of you maybe and one of you and both of you work in x you know so one of you probably needs to go get a job now until we get the dog if you get the dog thing making eight hundred thousand dollars a year you can quit right of course i mean you make ten thousand dollars a month you could quit But your problem is not an irregular income. Your problem is no income. That's the problem.

In two years and you're making $600, you've got nothing. So you have got to get your marketing kicked into gear or completely abandon this idea and move on. Because people make a lot more than what you're making. Housing and babysitting and walking dogs. A lot more, especially in freaking Miami. I mean, this is, South Beach would be heaven for this stuff. And so, yeah, you really, really, really, really need to get your marketing in gear or give this thing up, one of the two.

I think one of you needs to get a job now in addition to the uber full-time real grown-up person's job and what that will do is it will quadruple your income almost instantaneously and um that or you got to have a plan to get this dog thing really to five thousand bucks a month pretty quick and that means you got your hiring people and because you've got so much work you can't possibly do it yourselves and so that's what your issue is that's what you're struggling with is the income side of the equation that will solve your irregular income question and it will solve your i want to have a baby question you need more income period Let's figure out ways to do that.

Get the dog walking thing up and or take jobs or both, you know, and all of that works together to get you exactly where you want to be. You're way too long at $600 a month to be where you are. Hold on. I'm going to send you a copy of Christy Wright's book, Business Boutique, Equipping Women to Make Money Doing What They Love. Jay is with us in New York. Hi, Jay.

How are you? Hey, Dave. I'm doing well. How about yourself? Better than I deserve. What's up? Not much. I have a question.

Basically, I'm a concerned millennial, concerned about my parents and their retirement as well as their spending habits. Basically, the back story is I have a younger sibling who's 10 years younger than me who's 19 years old. And they've agreed to send him to college. However, it's a pretty expensive college. I tried to see what them and let them know that a commuting is okay. The home was okay.

And state college is okay. But they insisted that, you know, $25,000 a year school is okay, in-state college is okay, but they insisted that, you know, $25,000 a year school is okay. I pretty much disagree with it because I commuted 10 years ago. I went to college, I commuted, saved a lot of money, paid my way through college, and basically graduated with little debt. Good. And I fear that my parents will, or they are on the path of getting into significant amount of debt,

and it'll just delay their ability to retire. Exactly. And I'm pretty concerned about that as well as, you know, my brother, his debt. The problem is that you can't make people you love not do stupid stuff. If we could, it'd be a better world, but we can't. Stupid's not illegal, and even in our families it's not. And it's heartbreaking to have to stand back because they're grown-ups. They're allowed to make decisions, your brother included.

I mean, legally he's a grown-up, you know. I'm not saying he's a grown-up, but legally he's a grown-up. I'm not saying they're grown-ups, but legally they're grown-ups. But they're making stupid decisions, and you've talked to them about it, but they're not listening. And it's one of the most painful things in the world to watch people do stupid stuff, and you can't stop them. Especially people you love. The more you love them, the more painful it is. So the only thing you can do is take care of you and go be very wealthy because they may need your help someday. This is The Dave Ramsey Show.

Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has dead and has struggled to make ends meet, but they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen. Their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance.

Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Welcome back to the Dave Ramsey Show. Joining me this segment, our own Chris Hogan, Ramsey personality, number one bestselling author of the book, Retire Inspired, and America's trusted voice on retirement and on wealth building. Welcome back, Chris. Thank you, sir. Good to be with building. Welcome back, Chris.

Thank you, sir. Good to be with you. You know, Chris, something has happened since I started this show. It's almost 30 years ago now. When I first started, I pulled up a bunch of statistics to kind of make the case that people were struggling. Like everybody didn't know people were struggling. But you have to have statistical evidence because nobody knew who Dave Ramsey was and

nobody cared. And a lot of people still don't know and still don't care. struggling. Duh. But you have to have statistical evidence because nobody knew who Dave Ramsey was and nobody cared. And a lot of people still don't know and still don't care. But I found this thing in the Wall Street Journal and it said 70% of Americans are living paycheck to paycheck. And for years, I quoted that stat. Sometimes I forget and still quote that stat. From the Wall Street Journal, 7 out of 10 Americans are living paycheck to paycheck. Now, apparently, at my career of helping people with their money, I'm a failure.

Because the latest statistic says not 70% are living paycheck to paycheck, but 78%. Yes. Ah! We're going the wrong way. Well, there are more people now, Dave. No, the percentages don't fix that. I know. I tried.

Math goob. I know. I tried. You math goob. I know, I tried. But that reality, when you look at that and you think about it, you're talking about almost eight out of ten people. And when you think about your family and your friends and you start to count off and you get to ten, you start to realize something, that this is not something that's okay, that this is a trend that needs to stop. And, Dave, that's what we're doing. Regardless, we're trying to help people turn this around and take control of their money. When you're living paycheck to paycheck like that, you're broke.

What ends up happening is, is that something, well, there's a lot of drama. I mean, when you're broke, everything that can go wrong. Well, I mean, your life looks like a country song. I mean, I just remember everything that can't go wrong does. It's just depressing. It really is. And you can lose hope. And Proverbs says, hope deferred makes the heart sick.

And I think what happens is I remember distinctly some of the dumbest financial mistakes, some of the dumbest mistakes, period, that I've ever made in my life. The things I regret the most, I mean big ones, were when I was desperate. When you're desperate, you're scared. You do stupid stuff. And that's how people get in with these payday lenders. Because they know it's 800%. They know it's horrible. They know it's crack cocaine for money.

They know what it is. Once you get in there, you can't get out. You're stuck. But only desperate people would go into one of those places and get just completely screwed over by them. You know, only desperate people, people that have given up hope, would pay for a washer and dryer six times while they did rent to own instead of just buying one used at a garage sale. But you've given up hope. And what happens a lot of times is when you're living paycheck to paycheck, an 80%, 78%, 8 out of 10, they end up doing stupid stuff. And a lot of it's around debt.

They go into debt, go into debt, go into debt. You're always going to have a car payment. The little man can't get ahead. You're stuck. And what we figured out is that debt's not really a tool. It's a trap. It really is. And it's not only a trap, Dave.

It's a thief. Because what I want people to understand is it steals from your now, but it also steals from your later. Because it prevents you from doing what you could be doing, and that's growing your money. Now, looking at this, are you ready for this we conducted the largest research study that's ever been done on net worth millionaires i mean ever and the number one thing that they all agree on is this to get out of debt and stay out of debt now the same research also shows the majority of net worth millionaires have this. They've never held a penny of credit card debt, Dave. Not one penny. Not one penny ever. They've also never had a car loan. Okay. And they've never borrowed money from family or friends. Now, looking at this,

you understand there are some things that they've done, but there's some things they didn't do. They never took out student loans to get their college degree. And they all say this, Dave, your favorite line. They live on less than they make to stay in control. But some of them did. The majority didn't. Right. But some of them did. And in every case, not every case, but almost 99% or whatever, they said we quit doing it years ago.

I did have a car loan once back in my 20s. I did use a credit card one time and I cut it up. I did have a student loan, but, my 20s. I did use a credit card one time and I cut it up. I did have a student loan, but boy, I got rid of that thing. And in every case, so if you're listening and you've got a credit card debt and you've got a car loan and you've got student loan debt, you could still be a millionaire. You could still make it, but it's got to stop. This believing that this is the path to wealth, it's got to stop. It's the path to the poverty house house the poor house is what it is well i heard you make a statement years ago dave and you were talking about when you use debt that

you're making other people rich and that was a line that really stuck with me because looking at it and understanding i wasn't doing things that were technically savvy i thought i was being cool i thought i was being cutting edge and what I was doing was being stupid, making the same mistakes and getting in the same traps that keep people stuck. And we want to help people get unstuck by following a plan that actually will work. So we've been teasing you about this millionaire study. You guys have listened to me a lot. Chris and I've been talking about a lot because we've been really excited about it behind the scenes over here. I mean, our teams, the findings are amazing and and so we have announced and we are launching the pre-sales of chris's new book now you talk about a number one best

seller this thing is going to be zoom zoom baby everyday millionaires how ordinary people build extraordinary wealth and how you can too this is is going to ring the bell. And again, it's based on, it's got the statistics in it, but it's also got the stories. I like good stories. And it's got a lot of your aspirational talk from the coach, Chris. Chris has got a coach down inside of him somewhere, and that comes out in the book too.

And so it's not just a dry white paper of the 10,000 millionaires, but it's got the data. The data's there, the hard data that shows. And so these stories aren't just made up. This is what really happened. And it changes everything if you start to believe it. And we've got a deal for them. We really do. You right now, ladies and gentlemen, you can preorder my new book, Everyday Millionaires, for only $20.

But get this. You're going to get $50 in free bonus items. By that, I'm talking about the audio book. You're going to get the e-book. You're going to get a video from Dave. You're going to get a video from me talking about how to be able to retire inspired. You've got an opportunity. Here's what you need to do.

Just go to DaveRamsey.com or go to ChrisHogan360.com or give us a call at 888-22-PEACE. There you go. That's a deal. Now, the book comes out in January, so you'll get the book, the audio book, and the e-book all then. We'll collect all your data now and help you do that. And, of course, we'll send you the talk I did on It's Okay to Be Wealthy and the talk that Chris did, the video that he did on retire inspired and you get to see both of those now but the better deal the best deal of all is this we're going to bundle

this like we've never done before we've never bundled a book launch with financial peace university but the whole purpose of financial peace university is getting on a budget getting out of debt building your emergency fund so that you can become an everyday millionaire. You need to be one of these people because that way you live like no one else so later you can live and give like no one else. Now, Financial Peace University, for the nine lessons with a local group and the one-year membership for every dollar plus, all the stuff includes $129. We're going to just sell it for $129 and throw in Chris's book.

Or you can say you buy Chris's book and you get a discount on Financial Peace University. I don't care how you add it up. It's $129. It's the best deal we've ever put out here on this. And we are so excited about this new book. So you could actually go through the nine lessons this fall at your local group with financial peace university got the membership for the whole year and then in january when you kind of got everything moving and you need another kick to get going you need one more rah-rah session hey in the mail comes

chris's book now right and you know you're going to get the it'll show up there and you're going to see this smiling face everyday millionaires how ordinary people built extraordinary wealth, and how you can, too. Yeah, that's the deal right there. And so don't miss out on this, folks. You do not want to miss this brand new all-inclusive bundle for $129 or the book at $20. Either way, you get the $50. And check it all out now. This is what we've been talking about on the show for 30 years,

and this data proves that you do not have to live paycheck to paycheck. You're not stuck. That's right. No matter who you are, where you are, where you were raised, where you went to school, you've got an opportunity to make a difference in your financial future, but you need to act now. I love that saying Condoleezza Rice says,

it doesn't matter where you're from, it matters where you're going. So where are you going? What about you? Are you going to sit around and talk about it or are you going to do something about it? Where are you going? You! Talking to you! Where are you going? Thanks for

hanging out, Chris. Thank you, Dave. This is the Dave Ramsey Show. Kelton is with us in Memphis. Kelton, welcome to the Dave Ramsey Show. How are you? Better than I deserve. What's up? Okay, so I'm 16 years old, and I'm a frequent listener, and I'm in your homeschool, high school curriculum. And I have a great-grandma who is 93, and her health is great, but she's getting older. And I was wondering how, like, her house would be a great starter home for me. And I was wondering if I should start saving for a down payment

or should I find an alternative option to work out with my grandma who inherits the house from her? You're 16. Yeah, but I've been making pretty good money. I've been making $250 to about $400 a week for the past few months. And I make some money from other ways, too. So I've been making about like $400. So what are your plans after high school?

Right now I'm going to go to school, community college for account management. I just need to get my associates and then I can go on and my uncle is going to give me work at his IT company. Okay, so you're going to go the technical route and knock out two years of a vo-tech degree at the community college and then your uncle is going to hire you. Yeah, and our community college is free in Tennessee. Yeah, I know. Yeah. That's very cool.

Okay, good. And that's the field you want to go into, obviously. All right. Yeah. And you'll graduate from high school when? I graduate in two years. Okay. And what is this home worth?

It's worth about $100,000 to $110,000. It's in a great neighborhood. It's a great school. My grandma said she'd give it to me for a little bit less. I think it's worth more. I think you could get about $125,000 or so. Okay. Well, the thing is you don't need a house for about five years. Yeah, but right now I'm making about, let's see,

I make 400 from just working with my dad doing HVAC, and then I have a couple things I do, and I make about 200. So I've been making about 700 to800 a week for the past two months. For two months. Yeah, for the past two months I've been. But, again, you don't really need a house for five years. Yeah, well, I don't know. Because it would be when she passes away.

She's doing great, but, you know, it's hard to determine health and all that. Yeah. When you buy something that you don't need, it's almost impossible to call it a bargain. Yeah. And, um, so, you know, let just say, if my son were 16 years old, I would tell him not to buy a home until he had finished his college and you're living at home and commuting and you're free and finished school and you land in a new job, get settled in the new job, save some money,

you know, continue to be debt-free. I think you're going to put unnecessary strain on yourself to be a homeowner while you're doing these other things, and I don't think it's worth it for a house. There's a house on every corner in Memphis. I've been there. Yeah. I mean, I have enough for a down payment. I have $12,000, and I have a car worth about $8,000 that I paid for.

That's worth $8,000? Yeah, it's a BMW 540i. Okay, all right. And so you'd sell the car and put your other money with it and buy the house that you don't need because you have a place to live for five years. Yeah, well, total in investments and everything, I have about $24,000. the house that you don't need because you have a place to live for five years yeah well total and investments and everything i have about 24 000 because i uh i make a lot i do i resale um like um shoes and everything from i flip it i can do like 100 to 200 a week and then

other stuff's 400 a week so total i $24,000 of everything I could sell. So when you're in community college, are you going to continue to do all this work? Really, it's not much work. I'm only working about 16 hours. I put maybe four hours into the computer every week, and I'm making two things I two things i make 200 from so well i mean if you use all of your money sell your car and use all your money except for a down except for an emergency fund and you buy the house at 18 years old uh and you want to go ahead and do that then you know

there's no harm in that it just feels to me like you're jumping the gun it's just a house i mean there's houses all over memphis dude you can buy a house like you're jumping the gun it's just a house i mean there's houses all over memphis dude you can buy a house whenever you're ready to buy a house and you got plenty of time you you're obviously doing very well with money you've obviously you're way exceeding you know the typical 16 year old with what you've pulled off so congratulations very well done obviously a go-getter you're hustling you're making stuff happen um i just personally wouldn't buy a house when i'm 17 18 years old when you're in college i just wouldn't fool with it it's just something

else an added problem an added thing to deal with just um enjoy your enjoy those years and you know live at home if you want to at the point you're 18 and ready to go out and you know graduate from high school and you want to buy something you're in a position to it just i like real estate and i want you to own some stuff but this feels like that there's the situation is leading you to do it before you're probably would have normally gone and bought a house that's what i I'm saying. And so I probably wouldn't. But if you want to, as long as you leave an emergency fund in place and you put down a solid down payment and you can qualify for the mortgage and you get a loan that's no more than a fourth of your take-home pay

on a 15-year fixed, then I'm not going to yell at you for doing it. But I'm not sure at 18 years old I want that on me. I'm not sure I want to deal with it. Go ahead and finish your school and make some money, man. That's the way I look at it. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money.

So when I was in college, I was selling real estate for a living. That's how I got through college and i was selling in uh merville tennessee is how we say it if you're a yankee it's maryville tennessee is how it's spelled and uh it's just outside of knoxville over nestled in the edge of the appalachian mountains the smoky mountains beautiful beautiful little town and great people and just a wonderful area. I had a blast. I sold real estate there for three years while I was in college and actually made a little bit of money, kind of like Kelton.

You know, I was out there getting it done. And a house in town came up on a foreclosure that I could buy, and it was really cheap. I mean, it was just a tiny little bungalow house. There wasn't much to it. It was a good, solid, blue-collar neighborhood. Back in those days, you know, I could buy it for $20,000. And a house like he's talking about would have sold for probably $60,000 in those days.

You know, that's 1982, right? And so 1981. So I had the chance to buy a house for $20,000 while I was in college. And I'm selling real estate, so I believe in real estate. I'm thinking, you know, I need to get a house. I need to get a house. I need to own a house. And so I went to the bank, and they turned me down.

Because, number one, I didn't have any down payment. I didn't have as much money as Kelton had there. They turned me down. Now, so I wasn't able to get the deal. I was all mad, of course. You know, I didn't make enough money either, but I didn't have a down payment at all. And I was trying to get them to just finance the whole thing. It was only $20,000.

Even then, only $20, fast forward a year and a half later, I'm married and living in Nashville, 200 miles away. What if I had bought that house? That house would have been a problem, not a blessing because of the stage of life I was in, not because real estate's a bad investment. And that's what I'm talking about with Kelton there. But boy, I was all hot on it, man. I was going to get it.

Thank goodness the bank turned me down. There you go. Sometimes things, the situation dictates whether something's a good idea or not. Not just generally saying, is real estate always a good investment? No, real estate's not always a good investment. In some situations, you don't need to do that stuff. This is the Dave Ramsey Show. Thank you for joining us, America. We're glad you are here.

Ruth is with us in Wichita, Kansas. Hi, Ruth. How are you? Hi. Hi. How can I help? Well, I own a rental house that has been assessed by the county for sewer repairs for $4,100. And they say that I can pay it off all at once or I can put it on the 20-year payment plan.

They can't tell me what the interest rate is yet until bonds go out, and I was just wondering which way I should go. Do you have the money? Yes, but I'm thinking I might be helping out my kids with some of it or most of it. So, I mean, I could, but I'm not sure if I can. Are your kids starving? No. I'm wanting to take over their loans from my ex-husband

because they don't want to have him on it anymore. What kind of a loan do they have? It's a land contract on their house. And you want to go get a mortgage? I have enough that I can take over the mortgage for them, so they wouldn't have to deal with him anymore. But if I did that... You mean you would pay it off? I would pay it off with him, yes, and then they would be paying me.

Okay. Why don't they just go get a mortgage? I guess they could. That's what they should do. They don't need to owe you money. The borrower is slave to the lender. And when you eat Thanksgiving dinner with your master instead of your mother, it tastes different. You're going to change the quality of your relationship with your daughter-in-law or your son-in-law.

Your kid will probably be okay. The other one, it's hard on them when they owe you money and they run into a rough patch and then mom's, all her money's tied up in our house. No. Let them go get their own mortgage and you need to pay cash for your sewer. That's what I would do. Rebecca is in Scotts

Bluff, Nebraska. Hi, Rebecca. Hi, Mr. Ramsey. Thank you for taking my call. Sure. What's up? I need some advice. I've got four teenagers. One's going to be graduating next May, and then I'll have two graduating the following year, and then one graduating two years after that.

Wow. Yeah. My husband and I just started our baby Step 2 a couple of months ago. And, Dave, I don't have anything saved as far as a college fund for any of my kids. And so I guess my question was, you know, do we kind of hold off on Baby Step 2 and start, you know, intently saving to get them started? What's your household income? About $86,000. And how much do you have in debt in Baby Step 2?

About $92,000. What is that on? Some student loans, a lot of medical bills. My husband had a heart attack, and we weren't fully covered, and so we're having to pay quite a bit of that. One automobile. How much do you owe on the automobile? About $14,000.

Okay, so it's not much of the problem. No. Okay. No. What I would do is to try to help out of cash flow what i can but you've got to get this mess cleaned up for you guys i mean you're not let's pretend you were debt free you had no payments but your house payment you're not in a position to cash flow for kids through college even then. No. The way you're going to have, because you're going to have four in there at once, aren't you?

Absolutely. Yeah. That's going to be a hard year. Yeah. If you were writing all the checks, you don't have the money to do all this anyway, even if you were debt-free. So let's just say you didn't pay anything except minimum payments and put it all towards college. Still can't make it. Yeah. So that means we've got to come up with a different plan because that plan won't work.

Yeah. Okay, so what's our other plan? Well, the other plan is there are four or five things when you're facing this with college that allow a kid to go to college debt-free. The largest part of the decision is that they choose, at your insistence as their parent, the cheapest possible school that they can go to. Usually that's in-state tuition and or a community college. Okay?

Yeah. They do not get to go to a private school. They don't have the money unless they're getting a full free ride scholarship. But unless they're going free, they're going to an in-state school or a community college. That is the biggest difference. And when you start looking at the difference in a $9,000 a year tuition and a $52,000 a year tuition, you'll see what I'm talking about. It's a huge difference.

And the difference is not that huge in education quality. It's definitely not that huge. So number one is college choice, that you have to put your arm around them and go, kiddo, your mom and dad are broke. Daddy had a heart attack. We got a lot of debt here we're trying to clean up. All we can do is cheer you on and maybe help you with a few little things here or there or there but we're going to cheer you on and there's what we're going to do we're going to require that you go to a school you can afford to go to so we choose a cheap school number one number two

they need to plan on working the entire four out four years that they're there and that's not at a minimum wage job at burger king flopping whoppers. They got to make more than that. So they're going to be doing something industrious or that is unpleasant where they can make $15, $20 an hour, which you can do babysitting. You can do that walking dogs and cutting grass and building websites. And you can do that if you just think a little bit and don't just go take a minimum wage job for 30 hours a week. You can't make it on that, but you can make it through college if you'll take a cheap school and get a good-paying job

and plan on working your butt off while you're in school. And by the way, a lot of us did that. I did that. I said in the last segment, I sold real estate in college. I worked 40 to 60 hours a week every week. For three years, I was in school. And one year I lived at home and went to a local school. But the last three years of my college career, that's what I did.

The third thing is they need to, and it starts right now with this oldest one, start applying for scholarships at least an hour a day. They're a part-time job starting today, an hour a day applying for scholarships. That means that this kid that's getting ready to graduate is going to apply for 1,000 scholarships. They're going to get turned down for almost all of them. But if they get 30 scholarships at 1,000 bucks apiece, average, that's $30,000. They just went to school. That's really good pay for a high school student to spend an hour a day working on that.

The pay is just absolutely excellent doing that. And the last thing is, and this is something you can put in the budget and pay for is pay for them to take tutoring and or a class on how to take the ACT and SAT test that they're going to need to take and then take it again and then tutor and then take it again and get your scores up they'll go up every time you do that if you get a good tutor or a good class and the higher their scores the more scholarships and other things they can qualify for and of course one thing they can qualify for. And, of course, one thing they can do while they're working, if they're going to be leaving home to go to school in-state, they can be an RA, be a resident assistant in the dorm, and you can stay in the dorm free if you do that.

You can get rid of that cost. So you just, or sometimes there's a situation where you can actually go to work for the university, and if you become go to work for the university, and if you become a janitor for the university, tuition's free. That kind of stuff is what they're looking for. And this is, there is, all of this is really good for the kid. None of it is harmful to the child. It's, you know, they're not going to spend their nights playing beer pong.

You know, they're not going to be, like, number one in their sorority or number one in their fraternity. But they're going to get through college, and they're not going to come out with $60,000 or $80,000 or $160,000 worth of debt. And let me tell you what else will happen. When they're doing all that, they'll go to class, and they'll study. Because when you're paying for it, you do the work. When somebody else is paying for it or you just get a stupid student loan, you know, this is when people just get off the ranch and, you know, you have a 52% graduation rate with a typical college in America today.

That means that almost half the people don't graduate and start. And yet they all got the student loans, right? So this is how you work through it. You're not a bad parent, Debra. You're not a child abuser. That they get this opportunity to build character as they go along. This is the Dave Ramsey Show. Hey, it's Blake, Chief Production Officer for the show.

And here's a little tip for 2018. Go download our revamped Dave Ramsey Show app from the App Store. We're always listening to your feedback and adding new features to make it even better. Check it out.