The Ramsey Show - App - My Parents Loaned Me $15,000 to Get a Bassoon (Hour 1)

Episode Date: January 9, 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'm Dave Ramsey, your host. Thank you for joining us.

Open phones at 888-825-5225. That's 888-825-5225. Kylie is with us in Utah. Hey, Kylie, welcome to the Dave Ramsey Show. Hey, thanks, Dave. How can I help? So I am 24. I graduated a couple years ago. I work full time. And I owe my parents about $15,500 for a musical instrument. And my husband is getting ready to go to grad school for a doctorate program in about a year and a half. And I'm wondering, do we pay them back or pay off the rest that they haven't paid? They've paid about half already, paid off their line of credit. Or do I keep saving to fund my husband's program?

We're pretty sure that he'll get it all paid for, talking to other students in that same program. But we also saved, using our EveryDollar app, $16,000 plus or $1,000 emergency fund. So I'm just kind of not sure where to go next. Okay. Well, the first rule of getting I'm just kind of not sure where to go next. Okay. Well, the first rule of getting out of debt is to not add more. So we have to ensure that your husband's going to school without you adding more debt. Yeah. Beyond that, once you've got that assurance, either from cash or he's gotten his scholarships

or his fellowships or whatever it is he's looking for, and if that happens and you clear this money, then you don't need this money for him to go to school, then you would use it to pay your parents off. Did you say there's a line of credit that your parents use to buy this musical instrument? Yeah, they did a line of credit on their house, and they paid half of it off they have or you have they have okay so you still owe them fifteen thousand five hundred but they only have a seven thousand dollar loan yeah i just take the idea of them having monthly payments that are because of me yeah yeah so you bought a $15,000 what? A bassoon.

Say it again? A bassoon. A bassoon. Okay. Yeah, and I played professionally on an international broadcast, and my school's all paid for. So it was, I mean, not an amazing choice, but it has had some benefits. Yeah, and so you're using that now to make money? Yes. And so what is your income?

My income is about $40,000 a year. Okay. And your husband is working while he's going to work on his graduate level work? Yep. He works at a lab on campus about part-time. Okay. So your household income is what, $50,000? Something like that. I get commissioning for sales, so it ends up being around $55 usually. You get commissions on sales? Yeah, I play professionally, and I also work for a nonprofit where I sell advertising and memberships to our organization. Oh, I see. So how much do you make playing professionally? Not as much as I make at the nonprofit.

I make a couple hundred dollars a month. Wow, okay. All right. And so what is he studying? Metallurgical engineering. Okay. Whole other industry. I'm focusing on metals, yeah.

So you guys are right brain, left brain couple, okay. All right. So, well, I think I want to get your mom and dad paid off as fast as possible. But if the net result of that is you borrow money for your husband's education, you really just moved the money. You just moved the debt around. Right. So I don't want to do that.

I want you to have figured out in your budgeting and the cash that you have available and the benefits that he gets lined up that he's going to school without any additional debt and then any money that's left after that can go to your mom and dad okay that's what i would do okay interesting story i took me a minute to get to the bottom of it but thank you thank you very cool all right caitlin is with us in ohio hi caitlin how are you good how are you better than i deserve what's up all right um so back in september's when we started um we got a diagnosis for our baby girl um she has a hole in her heart um so we started crushing our debt because we were pretty much living paycheck to

paycheck and i said well if i need to take off or started crushing our debt because we were pretty much living paycheck to paycheck. And I said, well, if I need to take off or if we do this surgery, we can't be living like this. So we've gotten rid of all of our credit cards. We just paid off. We have my car paid off. And then we just paid off my student loans last Friday. And so we still have a mortgage, my husband's student loans, and a small car loan left. We were wondering, we're going to have the car loan paid off by March,

if we should do our emergency fund after the car loan's paid off because we'll have to have open heart surgery and I want something to fall back on if I'm going to take off some time with her for that open heart surgery. When is that scheduled? It's not scheduled. Somewhere between ages two and five. Which is when? But she is 13 months now, so just over a year. Okay, so at least a year before that occurs. Okay, and how much student loan debt does he have? $36,000. And what's your household income? Around $80,000. Okay.

All right. Well, how much notice do you think you will have before the surgery occurs? Like the doc says, okay okay we need to do this and six months later you do it or six days later you do it or a year later you do it um so it can depend if she's showing symptoms or they think that they need to push it up i mean we could go to an appointment it could be the next day okay all right and what do you earn and what does your husband earn? I earn around 60. I'm an RN and he's a teacher and he, well, I guess around like 27, 28. So I guess around 90,000 a year. Okay. And so you would be the one taking off. So you're going to cut your household income by two thirds. Yes. Wow. And I have PTO saved up, so we can use some of that

PTO, but if I wanted to take like six weeks off, which is normal recovery after open heart, I would want to be able to take off with her. Okay, what's the probability of that occurring sooner than a year? She's doing fine right now. She's meeting our milestones. So we're shooting for possibly year three. So we're about 18 months, 20 months out. So unless something changes. If that's the case, you would be debt-free, student loan and everything.

And have your emergency fund. So as long as it goes that way, you would stay right with the baby steps. So for right now, I'm just going to stick with the baby steps. Here's the thing. I would not suggest you change the baby steps, but I would suggest if your daughter is going to have open-heart surgery that you stop them. You push pause, and you just go,

Hurricane's coming, we've got to put some plywood over the windows, right? And so we got to, you know, we got to get ready for this storm, which is what you're talking about here. This financial storm that's going to go with this surgery. And so, you know, at the point that you need to stop your whole total money makeover and just pile up cash to be ready for this, that's when you would do it. So my preference would be that if everything goes like you're talking about, that you've got three years and you'd have all your debt paid off and your emergency fund in place.

And that puts you in the strongest position to weather the storm. That's your best route. But if it comes sooner than that, just push pause, pile up cash quickly, and get ready for this. And then when you get to the other side of the storm, push play again. I heard a statistic recently that absolutely blew my mind. In the U.S. alone, over 3,000 people die every day without life insurance. Now, I don't want to sound unsympathetic, but this drives me crazy. What are people thinking? I don't understand how taking care of your family is not a top priority. Most of you probably just spent a bundle on Christmas

on things you really didn't even need, and now you're making New Year's resolutions that are focused on yourself. But if you want to use the New Year as a reason to do something right, like protecting your family, then take care of it right now before it's too late. Term life insurance is something every family needs, and that's why I talk about it every day. It's not complicated, it's not expensive, and Zander Insurance is the only place I recommend. Go to zander.com or call them at 800-356-4282. Please learn from other people's mistakes and get this taken care of. That's Zander.com or 800-356-4282. coming up at the bottom of the hour ramsey personality anthony o'neill will be joining me for a half hour answering your questions if you've got questions about student loan debt or going to college debt free he's the author of the number one best-selling book debt free degree

he's been on media in new york all week this and just got home. And so he's going to come in here and hang out with the lowly Dave Ramsey show after doing all the big shows. So cool stuff. Honored to have Anthony back in the building. And so if you've got questions as a college student or about college students or about going to school or about getting out of debt, college student loan debt in particular, you can call right now. We've opened up a couple of lines. The phone number is 888-825-5225. That's 888-825-5225. In the lobby of Ramsey Solutions on the debt-free stage, Kelly's with us. Hey, Kelly, how are you? I'm very nervous, but I'm excited to be here. Dave, how are you? Well, we're honored to have you. We've never

lost a patient. We'll make it together. Okay. You can do this. All right. Where do you live? I actually live here in town. Oh, a local. All right. That's cool. So in Nashville or in Williamson County? So I live in Nashville. I'm from California originally, but I've lived in Nashville for about seven years. Cool. Very cool. And here to do a debt-free scream, how much have you paid off? Close to $28,000 in about eight months. Good for you. And your range of income during that eight months? I started off close to $80,000, and I now have a gross of $105,000.

Nice jump in eight months. Yeah. What do you do for a living? I work at Escape Day Spa as a massage therapist, and then I also am a personal trainer. Okay, wow. So you're just hustling. You're just getting. I like to stay busy. You're working a lot and that's what's driving that income up. Good for you. Well done. What kind of debt is the $28,000? It was a mix. A lot of it was

student loans, it was medical bills, credit cards for sure. And then also I paid off my car. Yeah, love it. Very cool. How old are you? Uh, 24. 24 years old and you paid off all your debt. Yeah. What in the world happened to you eight months ago? You went crazy, kiddo. I did.

I just was ready to finish what I started a few years back. Um, I moved here to the city when I was 18 years old and I knew that in order to make it on my own, I didn't have to be rich, but I did have to be financially smart. So, uh, my second day in town, I got my first job at a Waffle House and I was able to work my way through school. And then once I graduated, I was making about $35,000. So I actually started this journey back then. But along the way, I felt like there was always something that would knock me off course. At one point, I lost everything and I was living in my car. Wow.

And I didn't have any money to even get back home. So I was able to restart and move on from that. And I got a really good job. And once I was almost there again, I fractured my back. Oh, my God. And I didn't have any health insurance. I'm drowning in medical debt. I was living off credit cards.

But I was able to do it again. And that time I was like, hey, I'm going to make it happen this time. So a year ago, my only New Year's resolution was to pay off my debt. And I wasn't going to put my energy anywhere else. So I just started saying yes to more clients and no to going out with friends so often that they just stopped inviting me out. But about eight months later, on September 17th, I actually paid my final payment and I became completely debt free. You did it. So, yeah. I love it.

Very well done. Very well done. Okay. So how old are you in this story when you're in your car? I was newly 21. So two years after you came to town. Yeah. And three years ago. Mm-hmm years ago okay so how do you go

what did you do because you're in the car obviously didn't have a place to live and uh did you have a job at that point i did but all of my money was going towards hotels um because i needed to shower and i needed to sleep so i would go to hotels a lot and then whenever i would run out of money i would sleep in my car so i would get a good week a month to shower and I needed to sleep. So I would go to hotels a lot, and then whenever I would run out of money, I would sleep in my car. So I would get a good week a month to where I was able to sleep in a hotel. I was able to crash on a friend's couch every once in a while. All of my money was going towards food. So how did you break out of that and get back into, quote, more of a normal situation?

Yeah, so those three and a half months months I was doing that, I was like in a fog and I couldn't really tell you an exact reason. I just know that one morning I woke up and I know I was in the Target parking lot. And when I woke up that morning, I really felt like I just woke up. Something in me just like sparked up again. And I found that drive and I found that motivation to find myself again. And I just, I got an apartment and I kept working and I was just able to keep going. So I, there's not like one specific reason. It was just. I mean, so you immediately after that Target parking lot morning, you scraped together the money, got an apartment?

Mm-hmm. So you just didn't think you could before? I think I could have. I was just so numb at the time. There was a lot going on in my life that I let take over. You were depressed. Yeah. Yeah. Wow. going on in my life that I let take over. You were depressed. Yeah. Wow. Which is hard to believe looking at you right now. There's nothing depressing at all. Good. I'm not. So yeah, that fog of depression is real.

It keeps your logic from working. Yeah, it really does. And so once you woke up and it fog cleared, you just said, I just need to get a place. Yes. So it was that easy. Yes. And I made it happen. So it really wasn't actually a financial blocker as much as it was just a mental blocker. Yeah. But that hurt my finances because I was almost, yeah, I had almost paid off debt. And once I almost did, I then had to use all of my money to like do whatever it was I was doing. Yeah. Yeah. You had to turn it around. And so how did you get connected with us to begin the new year's resolution and do this in eight months? So I love the Bobby Bone Show. And so I always listen to them every day. And then you have been on their show a few times. So that's how I heard of you. And my first month when I started this, I downloaded your book on Audible and I listened to your book probably

about three times in the first month, just over and over and over. And I listened to your podcast every single day to stay motivated. And I would hear people doing the debt-free screams and I would get the chills every time. And I was like, I can't wait to be there. I'm going to be there. So I did it to keep me motivated. And here I am. So yeah. Well, I'm Bobby and the whole crew over there, friends of ours. They'll be very proud of you. We're very proud of you. Thank you. That's a neat thing. That's a good connection. All right. Way to go.

So who were your biggest cheerleaders while you were doing this in that eight-month period of time? My parents, for sure. My dad didn't exactly know who you were, so he didn't quite understand exactly what I was doing. And my mom wasn't really a fan of you. She doesn't really believe in, like, the day way. But she respected that that was the way that I wanted to do it, and she was there. She answered the phone every time i was just like hey i paid off a credit card or if i wanted to talk anything with her um she was there to cheer me on and my parents taught me a lot um growing up we had a lot of money and then when the economy hit in 2008 we lost everything and

we didn't have any savings so i was able to see both sides of having money and then not having anything my dad had to start working again and we had to move into a smaller house so I was able to see both sides of having money and then not having anything. My dad had to start working again and we had to move into a smaller house. So I was able to see both sides. So I learned from them to have the means to take care of yourself when you can lose everything because you can lose everything without it even being your fault. So I love them for that. And actually, because of you, because of this journey, I was able to take my mom on a trip for her birthday, and I paid for it completely in cash. So thank you for that. Well, I didn't pay for it. You did. Well done. Congratulations. Thank you. You're an incredible young lady.

Thank you. What an incredible journey you've been on. Yeah. And if you do all this by 25, I mean, it's going to be boring from now on. I know. I have to think of something else to do. Let's not do crisis for no for adventure in the future yeah well well done very very well done we've got a copy of chris hogan's book for you everyday millionaires i suspect you're going to be one yeah i hope so this is going to change your family tree this is going to change this

this is good very very well done well proud of you excellent job all right this is kelly from nashville twenty eight thousand dollars paid off in eight months making eighty thousand to a hundred and five count it down let's hear a debt-free scream a year ago i never thought i would be here so i'm excited to finally say i'm excited to finally say i'm debt free i love it wow and three years ago in the target parking lot for sure you didn't think you'd be here wow very impressive very impressive coming up at the bottom of the hour remsy personality anthony'Neill, who also spent some time homeless in his car because of debt at around the same age that she did, actually. And now goes around the country speaking in high schools and colleges and on big stages everywhere, major media outlets and the number one bestselling book, Debt Free Degree. debt-free degree. And I'm always interested because of how someone gets off that bottom rung,

that bottom socioeconomic rung of the ladder, and says, I'm going to get out of my car. I'm going to move from homelessness to an apartment. Because that's a big leap and i often find not always but i often find just like her situation it's mental as much as it is mathematical this is the dave ramsey show I love talking about companies that know how to do business right. You've heard of Grip6 belts, right? Well, if you haven't, it's the only belt you can get online with no holes, no flap, and no bulk. I'm talking weightless. And the buckles come in really cool designs and are interchangeable. I personally own a number of these belts, and they're so comfortable, you forget you're wearing it.

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And it was a great hit. If you haven't seen it, you guys haven't seen the hit. You haven't seen the segment when Anthony was on talking about college debt and so forth. You can just go to Tamron Hall's website, and I'm sure the clip is there. And Anthony speaks to high school students, college students, and anybody who will listen about teenagers and about getting out of debt and staying out of debt and never going into student loan debt. The book is Debt-Free Degree.

It is a number one bestseller. And you speak to high school students all the time. You're used to this. I'm used to this. I'm used to it, Dave, and I'm actually excited about it because the message is starting to resonate with that tribe. And one thing I'm really picking up on is they're really getting the message of I need financial literacy. I need financial education. And I actually just got off an interview with two young students.

They're in high school, Dave, and they're actually doing a contest for C-SPAN. And they're trying to win this award going against uh student loans so i spent 30 minutes with them just answering some questions and they were asking me some real good questions of and this young lady said you know if we forgive all the student loans that doesn't help me anthony like what about us like how does it set me up she's like i disagree I disagree with counseling student. I mean, I agree with counseling student loans. I disagree with forgiving them because I want to make sure that I go into college without any student loan debt. So the message is resonating. I'm just excited about it. Yeah.

Very cool. Well, you're going to have to help me because I'm going to be speaking with you to teenagers, which is a tough crowd. It's not a tough crowd. They not a tough crowd they're a tough crowd especially if you're an old ball-headed boomer oh you know you're dave ramsey they're going to listen just because they die all right so people ask us all the time about teaching students the best way to handle their money in the real world and a lot of you already know we have a curriculum and it's in 46 of the high schools in America, called Foundations in Personal Finance, the Ramsey Curriculum. And I'm in the curriculum.

Rachel's in the curriculum. Anthony's the star of the show. And we're doing a workshop with that curriculum called the Ramsey Start Right Workshop, How Money Really Works. It's happening here in Franklin, tennessee at the ramsey solutions headquarters right here in our new building march the 7th it's for students for high school students and if you want to come uh chris hogan anthony rachel cruz all four of us will be speaking it's a full day of teaching for high school students. The basics of budgeting, paying for college without loans, the secrets to stacking cash for the future.

And if you want to come, just look at our events page at DaveRamsey.com or DaveRamsey.com slash events. And the tickets are free. No, the tickets are free? Yeah, they're free, yeah. Okay. They're not free. They're $30. No, tickets are free. Yeah, they're free, yeah. Okay. They're not free. They're $30. Oh, okay.

We're getting sign language, and some of it is useful from the booth. Yeah. Yes. Yeah, yeah. $30 tickets. Okay, for a person. That's still a deal. That's still a deal.

It's a full day of teaching by four of the nation's leading speakers and teachers in finance. All happen to be Ramsey personalities. You, me, Hogan, Rachel. Yes, sir. And also, Dave, you said it's for students, but we also are encouraging parents to come as well. Okay. You can bring your mom and dad if you want. Yeah.

It's going to be a great event. You know, when you put all four of us on the stage, and I'm excited about this because we're really teaching young people how money really works. What is budgeting? How do you budget? How do you really set yourself up to be financially successful going into college and also graduating college, which this is something that every student needs to have. So I know this is going to sell out quick. Well, if you've not seen, you know, Anthony, Rachel Hogan speak, this is funny. Yeah. There's a lot of humor. It's a lot of fun. It's not going to be like your mother's 401K meeting. This is fun. It is when we speak to adults and when we speak to students as well.

So DaveRamsey.com. Tickets are $30. It's March the 7th. There's a very limited number, just a couple of hundred. So this will sell out extremely fast. And you can also call the Ramsey Concierge team at 888-22-PIECE, 888-227-3223. It was going to sell out faster when they were free, but now that they're $30, it's just extremely fast.

It really is. It really is. All right. Good stuff. Good stuff. Welcome back to Nashville. Good to have you. If you all want to talk to Anthony,

the phones are open for him at 888-825-5225. That's 888-825-5225. Anthony, you and I are both having happen what we thought would happen with the debt-free degree book. People are the haters in social media. The trolls are saying what we thought they would say. And typically it comes from a political mindset that, oh, you guys are privileged guys. And so you don't understand that real people have to take out debt to get a degree. You can't go to college debt free.

We're hearing it. We're hearing it. We knew we would hear it. When you were writing the book, I said, Anthony, we're going to get people saying you can't do this because there's always somebody that wants to be a victim instead of a victor. You know, that victim message is kind of frustrating to me, Dave, but you're all right. I'm hearing it. You're hearing it. But here's what I'm also hearing, that it is possible. Here's what I am hearing, that with work, with dedication, with living with intentionality, I was able to go to school 100% debt-free. I have several testimonies, thousands of testimonies of not just parents,

but even students saying, hey, I did it. And I have high school students saying, I'm about to do it because they're following the plan that we've laid out for them inside of debt-free degree. And I'm just excited to see this grow down the road because it's definitely happening. Yeah. And so just to recap, if somebody is new to this discussion between you and me, there's a couple of tenants in the book, a couple of things that you need to remember, kind of a clear path, if you will, if you want to go to school debt-free. What are they? The number one thing, Dave, is you have to pick your most affordable school. As far as in, school doesn't have to be expensive because the average in-state schools on the college

stream are between $6,000 and $11,000 to go there within one year. And so you have to choose the best school that's within your budget. So if your budget is, let's say, $10,000 a year, then that's the school that you need to be going towards. You don't need to pick a school that's going to cost you $20,000. The number one decision that you can make is the school that's within your budget. The number two is you got to step back and say, you know what, I'm going to keep debt off of the table. This is no credit cards, no student loans. We're not financing nothing. We're going to look at all of our options. And let's just say for an example, you don't have enough scholarships, you couldn't come up with enough money, then we're going to

look at a community school and maybe a trade school. Okay. Cause we're going to step back and make sure that we're below that budget. And then there's three main things up underneath that you're going to work, work 19, about 19 to 20 hours a week. You're going to save by choosing the in-state school. And number three, are you going to find some money? You can look at some grants and scholarships. And when we say work, we don't three, you're going to find some money. You're going to look at some grants and scholarships. And when we say work, we don't say work at minimum wage. No, sir. Babysitters make $20 an hour now.

That's some good money. Yeah. People cutting grass make $20 an hour. We interviewed a young kid who was 19 walking dogs, and he made $5,000 in one month from just walking dogs. I said, I'm in the wrong business. Really? He's a dog walker? He's a dog walker and dog babysitter.

He was just walking dogs. That's $60,000 a year. I think that'll get you through school. Well, wait, he did that just during the summer. Oh, the summertime. Just during the summer. Wide open, okay. Yes, sir.

But that was his month, and that sets him up for half of his year or more. Yes, sir, half of the year or more. And actually, if you go to an in-state school that set him up just those two months paid for his whole year yeah yeah for his tuition yep very very see that's it so work yes uh pick a school you can afford yes well i want to go to a school because the better school you go to the more likely you are to be successful well dad we already know that studies have not proven that fact at all and it it's not about if you're smart, you're smart. It's not about where you graduate from. To me, it's all about how you graduate. If you graduate 100% debt-free, if you're living

with intentionality, you have hard work ethic, you're a young man of character, and you're willing to put in the work, you will be successful. Whether you start off at a community college and transfer and graduate from an in-state school, as long as you have those four things and you're really focused and determined to be successful, you will be successful. We were doing the Borrowed Future podcast. Seth Godin made a really good point. He said, we need to stop calling these expensive schools better schools or prestigious schools. He said, they're just famous. They're not better. There is no data, the data that says that you're more likely to be successful. They just cost more.

They're famous. And so don't go to a famous school unless you have a famous-sized checkbook. So Anthony O'Neill is with us, author of the book Debt-Free Degree. Open lines for your calls at 888-825-5225. joining me this hour anthony o'neill ramsey personality author of the number one bestselling book, Debt-Free Degree. Brianna is with us in Texas. Hey, Brianna, your question. Hi, Dave. I'm really quick. I just want to say you've changed my life. We attend Celebration Church in Austin, and my husband and I heard you speak. We joined in an FPU in October, and it's been amazing. Awesome. That's a great, that's a great church. We love your passion. Yes, I know you do. And we love you. Thank you so much. So

my question is my husband and I are in step two. Um, we have about 75,000, not including our mortgage. And I work two jobs. Um, one job is the full-time job and I work on the weekends as a server at a restaurant. So I pull in about 15001,500 to $2,000 a month in tips. The situation is every single year, because our income's a little high and every year it grows, we owe taxes. So last year we paid a $5,000 IRS bill with a credit card. But since we've cut up all our credit cards and we are done, my question is when it comes to this year, we're going to owe again. So should I start saving now and stop my step two to start saving, or should I just wait to get that tax bill? Okay, just wait. Yeah, push pause. Push pause on your total money makeover, on your

baby steps, and go ahead and do your taxes. You don't have to send them baby steps and go ahead and do your taxes. You don't have to send them in, but go ahead and do them because it's all for last year. And that will tell you what you owe. And that tells you how much you've got to have by April 15th. And so as soon as you have that amount of money, you push play again. Got it. Does that make sense? Yes, sir. That makes perfect perfect sense we'll just pull up

stop and then get going anthony anything no i like that pause and attack this issue and then get back to it but just get back to it do not prolong it now brianna what are you gonna do for the show it doesn't happen next year um i i'm hoping to get this debt paid off as soon as we can we make about 135 a year i'm working seven days a week i'm i'm pushing myself so hard i'm i'm gazelle intense so i'm just hoping we can get this done so i can quit the second job and we can get going on the next step okay so um but you're probably through 2020 you're going to be working the job right yes sir i've been there 13 years so you're going to next year at this time you're going to have the exact same problem.

Yeah, I am. If you don't correct it. So let's go ahead and correct it. Here's how you correct it. If you paid $5,000 over last year and this year you do it again, that's about $400 a month. $400 a month is $4,800, okay? So I would go to one of your jobs that does do withholding and increase your withholding by $400 a month. Okay. So you don't have a tax bill next year. Wow, never thought of it like that.

My husband said maybe I should put aside that money from tips, you know, and and save it for next year but i actually like this a lot better in a sense that's doing the exact same thing we're just taking it out of one we're taking out of the other check is all okay and this and that's a lot easier and you just it's already the tax bill's already paid and you're not going to get any kind of a penalty or anything from uh dramatically underpaying so good question all right, Dylan is with us in California. Hey, Dylan, your question for Anthony and me. How's it going? I had a question as far as transferring credit for a better APR interest rate.

I'm currently 21, found myself in a little bit of debt, which is okay. I'm going to get out of it. But my thing is my minimum payment on that is too high on my card. So I've looked on ways to transfer the balances right, and I'm wondering, like, the best advice, if there is an offer out there for me through another banker, do you believe it's the best thing to do that to get me a lower payment so I can afford to pay the credit card?

Dylan, how much debt are you in? So as far as credit card, it's about 13K. And then I have a motorcycle, which I'm getting out of right now to sell it, which will take it down, knock it off about 6,300. So it will leave me just about seven grand in the hole. Okay. Seven grand in the hole. Okay. $7,000 in the hole for that, so you're about $20,000. And what's your income annually a year? $51,000. $51,000.

Okay, so $51,000 with about $14,000, $15,000 credit card. I'm going to suggest that you just do the debt snowball method on this. Follow baby step number two. I'm not a fan of really transferring credit card debt, so you're going to fall into the trap, keep transferring, keep transferring. $13,000 with the income that you have. If you aggressively go after that, you can win, you can succeed, and just really focus on that. Do you have $1,000 already set aside for your emergency fund? I am getting there.

I'm close to it. About $300,000, $400,000 away. Okay. So we need to get that stacked up, and then we need to just go ahead and do that and attack that. Dave? Okay. So did I understand you to say that when you sell the motorcycle, your credit card is going to be reduced from 13 down to 6?

No. So the way the motorcycle got financed was through a Yamaha motor finance card. Right. So that has 63 sitting on it. Right. And I have about between two cards um i have about nine on one credit card and about four on the other okay so when you sell the motorcycle after that is over how much credit card debt will you have after 13 13k i'll still have 13k

okay and you make 51 correct okay so the question you were asking is the wrong question. The question you were asking is how can I pay a smaller payment? The question you should be asking is how can I pay a larger payment? I need to be on a really tight beans and rice budget, and I need to be paying $1,000 a month, and in 13 months I'm debt free. There you go. Okay. We don't want to transfer for a smaller payment. If you get a lower interest rate, it would help a tiny bit.

But the big thing is to remember that you and your budget living on nothing and pouring all the money onto the credit card is the secret sauce. Dude, you are your secret sauce. It is not a math problem. And you can't get out of debt by paying smaller payments. You get out of debt by paying huge payments, like you're delivering pizzas, and so you're putting an extra $2,000 a month on this debt, and it's gone in six months, that kind of a thing. And you're smart to sell the motorcycle.

So you're getting this lined up. You're thinking about it, but get on the every dollar.com get your budget going and really tighten down the screws on your lifestyle down to scorched earth and that'll be your next step so all right julie's in illinois julie your question for anthony onio and me hi guys just wondering my husband and i have been saving for we have two daughters 17 and 14 we've been saving for their college since the day they were born. Cool. And we're finding now with our senior as she's applying that, unfortunately, the savings is kind of shooting us in the foot a little bit because they're asking us to pay sticker price because they're looking at all the savings that we have. I'm just kind of wondering what to do about that. Sticker price, you mean you're applying to private schools and they're

not giving you a discount no actually even in-state schools here in-state schools don't give discounts not not ours no none of them do yeah right oh don't give discounts to anybody regardless uh it's just a price the only ones that take up you know if you got a twenty five thousand dollar a year tuition at a private school they'll cut that to twelve maybe but uh if you've got an eleven thousand dollar tuition for the university of illinois they don't they don't cut those prices gotcha okay i was thinking that it was uh a lot of people with you know financial need and stuff would get a discount financial... No, financial need does, but discounts for... You don't have financial need, so you don't qualify for welfare.

Gotcha. You have a job, so you don't qualify for unemployment. Sure. Oh, darn. Gotcha. No, you didn't shoot yourself in the foot. You did the right thing you saved up the money good job sure well thank you i appreciate it it was just a little frustrating realizing that

the numbers were so high and um just trying to figure out where to where to send her the for for the best of everything yeah where is she applying to school um just about everywhere we're trying to get her to narrow it down, but she's got just different ideas of what she wants to do, and we just can't get her quite in one spot. What is her grades looking like, Julie? She's actually top of her class and did really well on all the tests and stuff. And how much do you have saved up for school? We've got $100,000 for her.

Good for you. $100,000. She can go to school debt-free, Dave. Oh, absolutely. So here, Julie, let me tell you a couple things. One is it's okay to guide her. She doesn't need to make the choice by herself. She still needs her mom and dad.

And it's okay to guide her. By the way, it's your money, so you can guide her. That's not a bad thing at all. And you're doing good work there. You've done a really, really good job. This, Anthony, thanks for stopping by. Dave, America, thanks for having me. This is The Dave Ramsey Show.

This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.