The Ramsey Show - App - No Debt Or House Payment Make For An Exciting Retirement (Hour 1)

Episode Date: July 21, 2023

Ken Coleman & George Kamel answer your questions and discuss:  How to budget when starting a new job at a lower starting income, What to do when the recommendations you give to improve your workplace are shrugged off, If it's a good idea to pay off your house before retiring, from the blog: How to Pay Off Your Mortgage Early If it's smart to take a pay cut to move for health reasons, from the blog: Moving Checklist: How to Make a Smooth Move The best strategies to using extra income to pay off debt faster, from the blog: How to Get Rid of Debt Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/george Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is The Ramsey Show. It's where we help you win in your life, specifically your money, your work, and your relationships. The phone number is 888-825-5225. That's 888-825-5225. I'm Ken Coleman, joined by my comrade, compadre, co-worker, colleague.

Confidant. Confidant. We've got five C's there, and he is the one, the only, George Camel with a K, and he's playing hurt today. Got a throat issue going on, but he's not contagious. I've had him screened. I trust you with my life, Ken. And so we've got a, you can't see it here, but I put a little plexiglass thing here between us, so I think everything's going to be all right, but he's playing hurt, but I'm glad you're here, pal. I can't miss this. It's my favorite day of the week for my favorite person.

Well, we have a lot of fun, and we're going to have fun today in helping you. So let me set the table. George is the money expert. I'm the work expert, or at least that's what they tell us we are, and so we say it. Don't believe the hype. And so your work issues are always money-related. So if I can help you get unstuck, if I can help you pivot, because your greatest wealth building tool is your income, and I'm the income guy for Ramsey Solutions and love working with George.

So he's got his Gap Kids denim jacket on. Oshkosh bagosh, Ken. Oshkosh bagosh. He's ready to go. Credit where credit's due. I'm trying to look hip with the young sweatshirt today. Young?

Okay. Is it not? I don't know what's hip anymore. Neither do I. Why do I even say that? We are not fashionistas. Well, I put that out there for you to smack me, and you were very kind today. That was a little pickleball for you.

I can tell you're under the weather. You can. Yeah. No, I can't. But I do want to get you out to play pickleball. Consummate professionals. You want to come out and play pickleball? I feel like I wouldn't be good at it.

I'm not good at ping pong or tennis, and it tells me I'm probably not great at pickleball. It's probably true, which is why I want you to come out. Easy win. I'll stick to radio. All right. Good deal. Dalton is up next in Owensboro, Kentucky. Dalton, how can we help?

How you doing? Good. I'm running a little predicament. I start an apprenticeship program, and basically how it works is this job. I work for them for two or three years, and then I basically get the full-time, like, regular job. It's the state police. So my starting income for this apprenticeship is really low. It's $24,000 is the salary with the possibility of overtime as much as I want.

I have to drive 170 miles round trip every day to work. And so with the salary being so low and the drive so far, I need the most economical way to travel while keeping money in the bank account. Is there no option to move closer to this? Because it seems like you're going to be making the move at some point, yes? No. So when I actually get the, like, state trooper job, I'll be located closer to home.

Okay, I see. Okay. Could you – where's home? Are you renting right now? No, I live with my parents right now so could you go rent somewhere closer to that area for three years uh no because the i mean that it's a big city so anywhere near it's going to be a big portion of my paycheck i don't know anyone up there to share a house with could you get some roommates and get on Facebook and make some connections?

That's a possibility. I'm trying to stay home because I don't have to enter lease agreements and all that. I don't know that you're going to survive 170 miles for three years, dude. You got to choose your heart here. That's hard. Really hard. All while making minimum wage at this point. I mean, 24 grand, are you going to be able to survive off of that? Yeah, I'll be able to survive. It's just going to be tight. So, like, with me preferring to stay at home, I mean, I'm trying to explore all my options here, of course.

Is there another option to become a state trooper outside of this? Yes, but this program, like program guarantees me a spot to go in the academy. I've already done all my testing. Will you have hours where you can work a second job? Possibly, but with this position,

as soon as I get certified in this position, they offer all the overtime I want to work. Okay, so how long will it take before you're eligible for overtime? Depends when they can certify me. They're going to send me out of state to certify me. Do you have a ballpark? Dalton, we're trying to help you out.

Do you have a ballpark idea? Hopefully within the next half year. I mean, at most, worst case scenario. All right, so here's why I'm digging here. George, this is what I'm thinking. I want to get George in on here because I want George to dive in on the budgeting piece. But let's just say it's six months to get certified. You may be able to drive that bite a stick and just keep driving like that. And you're staying at home, keeping your expenses low.

But once you get the option for overtime, I think you've got to move there because the overtime is going to give you much more income. And you do what George is talking about, one or two or three roommates, and then you're okay. But you are not going to be able to do this for three years. I'm here to tell you. I'd be shocked if you could put up with that mentally. Do you know what the overtime would pay? The overtime would be the time and a half. So the hourly rate comes out to like 12, so I'd be looking at like 18 an hour overtime.

Okay. I was just making sure the overtime was worth it, even comparatively to getting a second or third job that could pay 25 bucks an hour. But it sounds like that's probably on par, and I would rather you get the experience working overtime so that you're even more equipped when you step into this role. Does overtime include things like helping big churches get their people in and out on Sunday? Is that something you can do on the side as well, or is that considered overtime? No, that's not considered overtime. My friend, then I'd be doing security and high school football games. I tell you what, I know policemen who do the old traffic control in front of big churches. It's extremely lucrative.

So there's a way for you to make decent money in that three-year period. How old are you? I'm 18. Dude, if I was 18, I'd have five roommates. I'd just be doing whatever it takes, but I'm not driving, what is this, three and a half hours round trip every day? About two and a half hours. Now you're a state trooper. You got to drive the speed limit now. Can't be breaking the law. Not a state trooper you got to drive the speed limit now can't be breaking the law not a state trooper yet ah okay so yeah but you can't be getting tickets when you're in the program and driving there you know that's not going to look good on the old resume here's the point i'm looking at now all right is so the car i drive is a dodge charger and there and back gets about 23 miles a gallon so i've been doing the math and all that, and that's going to cost me the same as if I get, like, an electric vehicle.

Please don't. This is not the solution. It's not about the car. It's not about the mileage savings. It's moving. Now, if you stay home, that will bring your budget to where all you really need is gas and insurance at that point, right? Yes.

And so you're going to be able to make that work on $24,000. And so I'm not concerned about that. Now, if you move and you get a few roommates and you get a little more expenses on your side, that's when the overtime might be needed to help you make ends meet and still have a life at 18. But I'll hook you up with one year of every dollar premium to help you make a plan for every dollar, whether it's 24 grand or 36 grand with overtime, whatever that is, you just got to make a plan. However much you have that month is how much you can spend. And you have no debt? No. Well, the current charger I have, it's $250 a month. Oh, boy. Let's get rid of that car payment, and that'll help with your budget, my friend.

So either pay it off fast, or if it's... It sounds like it's more than half of your annual income. So I might sell that thing and get an old Prius or something that has good gas mileage. That's exactly what I would do. I don't want to take any shots at our good friends at Dodge, but the reliability ratings on the old Charger aren't good. You don't want to be putting those miles on that, George. You might look cool, but you'll be broke. That's the problem.

And it'll break down. Watch out. Hey, don't move. More calls coming up. This's the problem. And it'll break down. Watch out. Hey, don't move. More calls coming up. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman, joined by George Camel. The phone number to jump in is 888-825-5225.

The question of the day is brought to you by Neighborly, your hub for home services. With 19 service brands nationwide, you can find reliable help from great locally owned businesses like AirServe, Mr. Appliance, and DryVent Wizard. Visit Neighborly.com today for help with just about anything for your home. Today's question comes from Charlie in Arizona. Currently, I work at a call center job where they constantly change processes without training us on the new stuff, constant system errors, lack of good communication, issues in the company with vendor communication, managers not caring, and a host of other things that could and should be fixed, all boiling into longer call times for us, which hurts our performance scores.

I've made suggestions, laid out solutions, and all of it ignored, all things that could improve the circumstances for everyone, including boosting business. Though without a college degree, they ignore me. I have said stuff to coworkers who just shrug it off. As a fuss, having consistent system problems is just part of the job, but it greatly hurts us. Do we have to put up with tons of errors? Or am I right to try to improve things? Am I just complaining and spoiled?

Or are my coworkers complacent? They seem to regard me with an air of annoyance. Wow. Yes. Yes to everything you just said. All of it can be true. It can be true. If you're being treated with an air of annoyance from your coworkers, it doesn't mean that you're wrong.

It just means that there's too much of whatever it is you're putting out there and that you can't change it what's laid out here is really what we need to focus on charlie and that is you're at a call center and call centers by nature are very formulaic very chaotic a lot of turnover and they should be run better and i think that you are uh you're right to say i think it should be better it bothers me but you're at a place now where you it looks to me like you've hit hit your lid and and what i mean by the lid is whether charlie's right or wrong george whether he's a little bit too persnickety uh or whatever whatever it's it's not a good fit for him. And at some point we got to go, it's call center

and things have gotten progressively worse. And I'm going to turn into this big, giant ball of resentment if I don't move on. You've tried, you've raised your hand. It's been ignored. For whatever reason, you got to move on. Yeah.

And what I'm seeing here, I've never heard of someone who's like, I spent 25 years of my career at the call center, finally retiring. This is a good point. It's really not a long-term gig for most people. Now, here's the good news. Your skills will transfer to some great customer-facing roles at great companies that don't have this

complacency around them. So, no, you're not spoiled. Yes, you may be annoying because you constantly want to make things better when everyone else is kind of phoning it in, pun intended. See what there ken yeah i did i see and you did not like it you know you picked up what i was putting down and then you put it back down i you know i like i'll laugh out loud if i think it's worthy if i'm him i'm gonna go search for a better job with more pay with a better culture yeah it's that simple i agree his skills will get him there that's right john is up next in Tampa, Florida.

John, how can we help? Yes. Hey, thanks for taking my call. I have a question, kind of a nearing retirement question. I am 60. We're planning on retiring at 62. We've been pretty blessed. I've had a career in ministry and mental health. And so right now we're debt-free,

except we have a mortgage on our second vacation home. We have a $200,000 mortgage. And at this point, I've got enough funds to pay that off. But at that point, I would need to then stop all my retirement savings for the next two years and to build that back up. I have a first home that's worth about $550,000, and then the vacation home is worth about $700,000. My plan was when I retired to sell the one home and pay the mortgage off, but, interest rates as high as they are. I'm just trying to see what's the best financial decision because I'm running into some obstacles about finding work after retirement from my current position. But I basically want to figure

out what should I do about this $200,000? Do I delay it for a couple of years or do I pay it off now and let's stop the retirement so I can build up the liquid savings again? What's your income? Household? Yeah, household income, let's see, I make about $140,000, and my wife makes about the same. Wow, so you're bringing in $280,000. Yes. Okay, and how much do you have in a retirement? I have a pension. She's going to have a pension. And we probably have about 1.3 in just retirement funds. Oh, you guys are doing great. Okay. If I'm in your shoes, this is a great problem to have. Here's what I'm doing. You said you want to retire at 62. That's two years from now. So why don't we throw 100, 140,000 a year? That still gives you 140 grand to retire at 62. That's two years from now. So why don't we throw $100,000, $140,000 a year? That still gives you $140,000 to live off of,

and we knock out this mortgage with future income without touching our retirement. Because right now you have a great opportunity to do some of the catch-up contributions for retirement. I don't want you to miss out on that. So while you have that earned income, I want to be funneling that into retirement and paying down the house. Yeah, and the big thing was, you know, liquid cash, because if we do 62, we have to look at, you know, things like benefits until 65. And, you know, I think I need to have that liquid cash. But the only way that if I paid the mortgage off now, I'd have to stop the retirement stuff and just save up all that money. Where are you going to live? Where are you going to live after you retire?

We're going to live in the second home down in Tampa. So we're going to live there. So there's your liquid cash. You do what George says, you sell your primary home right now, and there's your liquid. Yeah. We need to be in our primary for another two years before we can move into that. Okay. So as soon as you retire, we sell the primary and move to the rental? Yes. Because then you could invest all of that money, and you guys are going to be more than okay at that point. Okay. So just kind of stay, you know, don't use the liquid cash right now to pay that off.

How much do you have liquid? Liquid, I have about 230. So why can't you use the liquid cash and still fund retirement? You said you'd have to pause all retirement if you use that. Well, I used to just to build that back up, I guess. But that's what I keep saying. I would just pay it off today, man. You'd have 30 grand left over. You'd still have your amazing income to then funnel into retirement, so don't pause retirement. And then a primary home to sell, and there's the liquid is what I'm getting at. Gotcha, gotcha. How much are you going to make on the primary home two years from now?

I would say right now it's about $550,000, so depending on what the market does, but it's somewhere in that range. So it could be $600,600 and it's paid for. So outside of fees, you'd walk away with a pretty penny on that. So there's the liquid, John. That's what I'm trying to tell you. If you do what George says, you pay off the vacation home where you're going to end up living. I love paying this thing off today.

You still got $30,000 and you're not stopping retirement investment from your actual income. And then when we sell the house, we got a chunk of cash. And by the way, that retirement, the vacation home, you're going to free up a payment there that you can now invest. So you got to think about that too. You're in great shape, John. But I'm paying this thing off today. I know it hurts to see that money go because you guys have worked so hard to get that savings account up. But man, having no debt in the world, no payments in the world, if something happens, if you can't work the next two years, you're still going to be okay because you don't owe anyone anything.

So I love the idea of you paying that thing off today. You will not regret it, my friend. Gotcha. Okay, that makes sense. I appreciate it. Thank you so much. Yeah, you're in great shape, John. Really good situation.

That's impressive. Vacation home paid for, primary home paid for, millions in dollars of the bank. It can happen, Ken. And they have an amazing income. So let's not forget about that fact where they're making nice high six figures. For the next two years, let's take advantage of that. Yeah, I agree. I think, what's going on there? I mean, he's got it all laid out, but it's like he couldn't see it. And I think it's, I'm going to bring it back to, is it just liquidating? Not completely, but you take $230,000 and you take $200,000 out. That just feels scary to people. Yeah.

Well, and there's also this false illusion because he's got $200,000 on a mortgage. Right. So he owes the bank $200,000. Correct. But when you have $200,000, it's hard to let go of that and see that it's really a wash. But I'm proud of him for seeing the light at the end of the tunnel here and going, dude, we could retire completely debt-free and have so many options. They're going to have two pensions, $1.3 million in the bank, plus the home primary sale.

Yeah. I feel good about this. And didn't he say it's down in Tampa? Yeah. Yeah. Not the worst place to be. I'll tell you, the Camels and Coleman's are coming. We're going to get Stacy in the car.

I don't think we got invited, but we're showing up. Listen, we go out together, the four of us. That's true. We'd have a good time. Let's go down and see John and have a good time on the golf course. Just at least one dinner. I think that's fair. We gave him good advice.

Get some fresh seafood. The advice was free. That's the least he could do. Oh, we're so excited for you, John. This is the Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer,

and it's harder than ever to get anything approved through the bureaucracy. So, if you feel like the system is working against you, try a biblically-based alternative to health insurance. Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs.

CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Helping you win in your money, your work, and your relationships. This is The Ramsey Show. I'm Ken Coleman, joined by my colleague, George Campbell. 888-825-5225 is the phone number. 888-825-5225.

Let's go to Dani in Houston, Texas. Dani, how can we help? Yes, thanks for taking my call. Sure. So I have a, it's probably a more personal than money situation, but obviously everything's interconnected. So I am having a lot of health issues because of where we live. I have really bad allergies that lead to really bad asthma exacerbations and, um, on and off of steroids and in and out of ERs. Um, and I'm trying all

the therapies and, um, as a, as a physician in a special, a specialty, um, I am in a unique area. Um, I absolutely love what I do. I love the people I work with. I don't want to move. But my husband, being a good man, wants me to be healthy. Yes. And wants what's best for me and my health. And what we've found from what I can tolerate is the coast, either one would be better. And, you know, of course, that higher cost of living, higher tax bracket. And for whatever reason, in my field, academic positions are not paying as well. And so I'm looking at, if we were to move, taking a 50% pay cut. And it's really hard for me to look at that and be like,

how can I choose myself over my family's future? Well, let's pause there for a second. Yeah. Yeah. How, what would your household income go to? Combined income go from what to what? Oh, okay. Okay.

So it would probably go from sixes, sevens to fours, fives. Okay, so if I'm hearing you right, six to 700,000 to four to 500,000. Mm-hmm. Okay. I don't want to minimize in any way the feelings you're feeling, but your family is not going to be destitute, nor is their future going to be hampered by that kind of a drop when you're making that kind of money after the drop.

That's assuming that that is going to be hampered by that kind of a drop when you're making that kind of money after the drop. That's assuming that that is going to be the case and that you can't increase that. But let's just, as just two strangers that you called, George, am I right? Every listener out there is like, I think I could make $500,000 work. And we know you don't mean it that way, but most people heard that and they're like,

I think I could scrape by on $400,000 to $500,000. I'd find a way. And so I'm not in any way criticizing you because a cut is a cut. I don't care how much money you're making. And there's still maybe sacrifices to be made that will hurt. But I wanted to start there, Danny. And then I would also tell you that if I were your husband and your husband's already stepped up in a big way, I want you to choose you.

Choosing you over the income, choosing you over your role with the rest of the family, we'd rather have you than not you. Yes? Yeah, and of course those are the exact same things that are being said. I just, I'm like, there's no guarantee that I won't get out there and still have those same issues. Well, let me ask you this. Have you been to the coast, let's say the East Coast? Have you spent two weeks there? Yeah, when we've done different vacations. Did it improve? When I leave, yeah, yeah. It is, but I've never lived out there, so who knows what would happen during certain seasons or illnesses. And what is it that you do? I'm a subspecialist in pulmonary medicine. So you said you're in the academic side? No, it's just that you are typically associated

with an academic center for when you're in that. Well, I also want to challenge you that there's, it's always going to be a pay cut. I mean, I don't know that you've checked every single role in every area and we don't know what the next six months holds as you begin to do more research, but I think it's kind of like you're like, it's going to be less pay. It's going to be hard. I want you to be optimistic about that. I'm going to get my health back. And as a physician, you know that health is wealth.

I mean, it's everything. What's holding you back? I think you kind of said it, but I think there's one thing here that's really holding you back. Well, we're so close. We'll have the house paid off. We'll be good. We'll owe nothing to nobody. Okay.

How much do you owe on the house? $200. Okay. Yeah. But here's the thing. Again, I think that's another false hurdle. There's a lot of sand on the East Coast. Are you aware of this? It kind of goes all the way. I mean, it's kind of, we got up north, it goes all the way down, a lot of states. And your specialty

pays very well. And I just believe with all the states that have sand and sea air, that there have got to be some places where you can move that the income doesn't drop that much. But even if it does, you're still making really good money. You sell the house you're in. You may be able to pay cash for something somewhere else. I just think you're coming up with a lot of limitations. And I still think it's deeper than that. I know I'm digging. Is it deeper than this?

I think it's, I think you really like where you live. And I think this is a massive change for you that even could totally change your life because of your health. I think you're reluctant to change and pull up roots. That's what I think. I don't think you're wrong we've got three small kids and it's you know to to find you know child care and get them restarted and then you're talking about probably private schools depending on the areas that we're looking at so it's another added expense and it just changes it changes the whole thing where well do you so hard to become really, really comfortable. Do you want to be miserable or uncomfortable? I mean, I have been for like three years, so I've made it this far.

They're going to get their mom back, so let's do that for another 25, 30 years. Now's the easiest time to move when the kids are little. They're not attached. They don't care where they're at. I think this is a, do I want to be miserable physically or do I want to be uncomfortable emotionally? And I think you guys got to do more research. I think you got to spend more time on this. This is a massive move and I honor what you're feeling.

That's what I thought was going on. You know what this is? This is actually not about paying the house off. This is about the massive amount of change that this move is going to require, and that everybody understands. Yeah. I'm just a very regimented, everything's scheduled, everything's been done out, and it just feels like it's a huge wrench in everything. It is, Dani, because you know what? I bet you your husband's not. Am I right? He is not. I knew it. I i knew it because i would be like yeah

let's move let's go i love change i really do i think change is great change is exciting but you pretty much have two types of people in the world freaks like me and then normal people like george thank you with a slight bit of neurosis you know but the point is is that now that you've identified what's going on here's why i was. I love that you listed out new schools. Would they have to be private? I like you creating a list. George is actually great at this. I'm going to pass this off to you.

Where she started, give her the list that she would need to make as she begins to look at different states and different cities to begin to the point where she goes, okay, I can check this off, this off, this off. And even now I know we can make this change and it's not as painful as possible. Yeah. There's two lists for you, Danny. One is the financial side. So let's start to make a fake budget using every dollar and go, here's what our life could be in this. Look up all the cost of living things, look at private school costs and start to actually look at facts. And you may go, oh, we're going to be fine.

We're still going to have plenty of money. And then look at housing. Say, if we looked at this kind of house, here's how quickly we could pay that offer. We could pay cash if we did this. And that will give you some peace on the financial side. On the logistics side, start to write down every single decision you're going to have to make. And it's going to be overwhelming at first, but I promise it's also going to be cathartic

once you get it on paper and your husband starts to go, cool, I'll take that one. I'll take that one. You take that one. We'll divvy this up. Let's come back and do another budget meeting, another meeting to talk about the future. And that's going to give you so much peace. Right now, there's so many variables. There's so many unknowns. That's just fear. You got this. We're going to walk with you. Hey, hold on the line. Let's get Danny. We've got a checklist and the name of it escapes me right now, but we've got a great moving checklist that connects the things that she needs to do and look at along with our providers. Let's give her also every dollar premium as well. Every dollar premium. Let's do that. We've got realtors, we've got accountants, we've got tax specialists, all at RamseySolutions.com. And this checklist will help you walk through this.

And pods moving in storage. Our friends over there. And pods. Pods will take care of you. My goodness. We've got this, Danny. Don't worry about it at all. This is The Ramsey Show.

Welcome back to The Ramsey Show, where we help you win in your money and your work and your relationships. If you're brand new to the show, first of all, we want to say a big welcome. Thanks for being with us. We know we've got some jargon, some language that you may need to get used to. You're figuring out which baby step, what is a baby step, what is gazelle, what does all that stuff mean. We've got a great little survey for you. It takes just a moment to kind of get caught up. It's called the Get Started button at Ramseysolutions.com. Just click on Get Started, and we'll just walk you through a couple questions, and we'll send you some free resources and kind of let you know where you are and get

you caught up. And it's a really great help for those of you that are diving in deep. So thanks again for joining us. 888-825-5225. 888-825-5225. Samantha is up in Columbus, Ohio. Samantha, how can we help? Hi, nice to meet you all. Nice to meet you. I have a question. I hope it is coherent. If it's okay, I would like to just throw out some hard numbers for where I am financially George is ready he loves this okay so I'm a teacher and I bought a car and for some reason I got

on a tangent explaining loans to second graders and one of my kids yeah I want to know before we go any further did they understand anything one of my kids raised me from the sleeper. You should have paid in cash. There you go. I was like, what?

That's incredible. So I know it's not ideal. We tend to lose common sense as we get older. These kids get it. I know, they do for sure. So I have a car loan of $13,372. Student loans, about $26,000. And then, um, saved up, I have about $5,000 and a high yield savings account. So I was, yeah, so that's pretty much where I am. I was accepted

into, um, a grant program requiring me to commit five years to teaching in an underserved area so with that I'm awarded $32,000 over the course of five years the first $10,000 I will receive in August so my plan bought me in my tracks if I'm veering off. Um, yeah. So my plan was just to take that 10,000 and then take out the remaining 3000 for my high yield and just pay it off in August and just be done with it. Pay off the car? Yes. Okay. I like that plan. Okay. Then that would leave me like back to the baby step one, just about $1,000 in my savings account. Then I'm left with the loans.

I am eligible for the public worker student loan forgiveness program. So if I make 120 payments after 10 years, it's forgiven. Don't like that plan as much? You're saying you'd start that from scratch? Yes. So I just was wondering what my course of action should be with tackling that debt. Are your student loans broken out into a bunch of smaller student loans? They are. Okay. I'm wondering in your debt snowball where those would fall.

If some of them are lower than your car loan, let's attack those first. Okay. So I'm guessing you've got like a $5,000, a $6,000, a $10,000, all kind of in there. Yeah, they're about like $4,000 to $6,000 each. Okay. So let's lay those out in the debt snowball, and you can do that. We'll gift you one year of every dollar premium, and that will help you list that out, do the math for you. Okay. And that'll get you on the path. But what's your next stipend after that?

The next what, sorry? Your next stipend. I believe it's $10,000, $10,000, and then it goes down to try to match, I guess, close the gap with the salary. And then I think it goes down to six after that, and then decreases following. Okay. What's your income? I will be making pre-tax $36,000. Okay.

I think this is the plan. I don't like the public student loan forgiveness one as much, because 10 years of your life to have to serve at a certain place, right? Because you might miss out on a pay jump to skip to another school that could pay you double down the line. Do you understand, Samantha, why we're saying this? Like this idea of I'm just going to slog through, pay these payments and just let it air out. You know, this is just, it's keeping you trapped. It's not smart. You want to get through this a lot faster, and you can. Do you understand what I'm saying? Okay. I do, for sure. And so that's why George is saying that,

and that's what's going on here. It's like you're just accepting this thing as opposed to motoring through it, powering through it. And that's what we want you to do here. There's also this sunk cost fallacy where six years in, you go, I can't go to the other job. I'm already into this thing. By the way, George is not emotional. He's struggling. He's not.

Yeah. He's Samantha. He's not crying on your behalf. His voice is killing him and he's dying in here. So I just. But I want to help Samantha so badly. He wants to help you so badly. I don't know why. This is up he because he looks like you look like you're about ready to break down you're so passionate in helping samantha it's just allergies it's just

oh and i'm his co-host i'm trying to help him but i can't stop laughing i got the church giggles folks that's what's going on you You okay, buddy? I'm good. I'm good. Because if you need me to get up and do the Heimlich right now, I will do that. I go easy. Samantha, here's the deal. Speaking of the Heimlich, I had to do that on a kid in a classroom. What?

That's frightening. You did? I did. Did it work? My first year of teaching, it did. I looked up, and this kid was white white and he had his hands around his throat. This sweet little boy had brought a mint for everybody. Wow. And he had a mint

stuck in his throat. And you got it. I got it out and he threw up in front of the whole class. Oh gosh. That took a dark turn. That's where the trauma starts right there. See what happens when you choke on air. And he brought one for the whole class. How sweet is that? Yeah, he's never going to forget that day.

All right, George. Let me end on a high note here. If we could. That would be good. Samantha, let's do the debt snowball. Smalls to largest, regardless of interest. And then I would also recommend getting a second job where you can pay off the rest of the student loans faster.

Okay. Because even making 36, even having 26 left, it's going to feel like a slog. So we've got to get our income up, even if it's outside of teaching. Maybe tutoring, summer jobs, some evenings working retail or delivery gigs,

anything to get rid of this debt. But I would not do the forgiveness program, not because I'm mad about it. If you're like a year away, I'd be like, all right, let's just stick this out. You're here anyways. But 10 years of your life is too long to devote to this thing for the golden handcuffs

yeah and i'll be honest with you george when i heard she when i heard her say this i've got to go do the research because when biden announced that i thought that that was the forgiveness was for people who've already done that i'm not saying she she's wrong, but I'm going to dive into that. I'm not sure that that program is for people that are in it now and they just get to, you just, well, give us 120 payments and after that we're going to let you out. That's what I heard her say. Did I hear that correctly?

Yeah, that's the PSLF program. It's been around a long time. Oh, okay, this isn't the Biden thing. No, no, this is different. This one's been legit, but it's had miserable success. Okay, that's what I'm confused about. Incrementally getting better, but still, it was like

at a half percent success rate to apply and get through. That's what I thought. Now it's, you know, a three percent success rate. Therein lies my confusion. Okay, I'm glad I got that cleared up. I just didn't want to rely on that,

and then a lot of people, they have to stick to certain areas, certain jobs, certain schools in order to get it, which, again, limits their career potential. And that's what we've been talking about. She plays that out as it keeps you tied down. Well, even this grant, she said, hey, I've got to work in this underserved area,

which means you have lower income, which is great. If you're passionate about working at the underserved area, you're nothing wrong with that. But don't do it just because I'm going to get this grant or this forgiveness. It's generally not worth it. That's exactly right. And I think this is the key. Here's the message. And again, I'm not anti-grant, but when you take money and it has a bunch of conditions, you've got to weigh the conditions versus the choices you will be able to make. And there's a big difference.

And I'll tell you this, I don't think people realize this, George, until they make a decision like this and they realize, oh, I sacrificed some freedom for this opportunity, whereas I can have opportunity that doesn't require me to sacrifice some freedom. Now, sacrifice time, sacrifice money that you pay yourself. Great, but no conditions. And I think that's what we want people to be careful of. Grants.

And again, grants are nice. Loans. They all come with conditions. Strings attached. Fine print. Yeah, it's tough stuff. Read the fine print. Good stuff.

All right, good hour, George Camel. Thank you. Appreciate the guys behind the booth keeping us going. Austin, our fearless leader today. Thank you, sir. Thank you, America, for listening. This is The Ramsey Show. Hey, it's Ken.

If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Go to ramsaysolutions.com today to sign up for our newsletter. Again, that's ramsaysolutions.com to sign up for our weekly newsletter.