The Ramsey Show - App - Only the Financially Strong Can Help the Weak (Hour 1)

Episode Date: August 5, 2019

Debt, Home Selling, Budgeting   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE   Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Robin in Tennessee. Hey, Robin, welcome to The Dave Ramsey Show. Hi, Dave.

Thanks for taking my call. Sure. What's up? So out of the blue today, my mother-in-law all of a sudden asked for my kid's social security card. She says she wants to open a savings account in her name. And I am wondering if this is a wise decision to give her those or if there's a better option that we can steer to her so that she can still, you know, save for the kids like she wants to. Okay.

Is there another reason that your mother-in-law is untrustworthy to have your children social? Not that I know of. It just really caught me off guard, and she wanted them, like, right now, this minute kind of thing, and it just really threw me off guard, and made me uneasy, and so I wanted to find out, is that even something that we should be doing? Okay.

And if there's, if the relationship with your mother-in-law is okay, and she's an okay person, there's no harm, no foul at all. But it sounds like something else is going on here. Well, she and I don't have a good relationship. She has a good relationship with the kids. Oh, okay. And what about your husband? He's sort of caught in the middle.

Okay. All right. So she's bossy. Yes. And this was like one more time she just was trying to do a command performance. She likes telling everybody what to do and seeing how high they jump. Yes. And you don't like jumping.

I don't blame you. Nope. I don't blame you. So, well, what I would do is just say, hey, you know, I'm going to talk with your son, my husband, and we'll discuss, you know, what we think is the best route with our children. Appreciate your generosity, and, you know, we'll get back to you in a couple days, and let her sit. That has nothing to do with financial.

That has to do with managing mother-in-laws. Okay. I didn't know if there was some other account that would be better. No. It's perfectly normal as a grandpa, as Papa Dave, if I wanted to open an account in the kid's name, and I wanted to be the custodian, and I wanted to put money in the kid's name, as long as the parents were all okay with that, with the relationship part of it,

there's no legal, there's no danger, there's no nothing. I would need the social security number of my grandchild to do that. Okay. Now, in our case, what we have done instead is, Sharon and I, we've chosen to let our children, the grandchildren's parents, meaning you, manage the money because we trust their ability to manage the money and we're not trying to control freaks. So we just give them money and say, hey, why don't you open up an ESA in the kid's name

or a 529 in the kid's name or put this in the 529 you already got open or something like that, right? I mean, we might make a suggestion. We just give them a check, but we don't try to, but we trust their ability to handle the money and our relationships are all strong. Do you see the difference? Oh, yeah. So, but all it is is a custodial account which you name a an adult as the custodian

who's in charge of the money until the child is 21 and um then the you have to have a kid's social security number to open that account the child is the beneficiary so there's no downside it's not like but if she's like a scumburger and she's doing cocaine or something you don't want her having anybody's social security number because she's going to do identity theft and use it to open credit cards in the kid's name so she can buy Coke or something. If that's the kind of stuff that's going on, you would never give it to them, right? But that's a different issue. That's not really a financial issue.

So it sounds to me more like you are tired of being told what to do, and suddenly she decides she's going to do something, throw her weight around, and you just don't like that i don't blame you let's this is a good time to put a little put a bride along mama so and the way we're going to do that's just say tap the brakes till i talk to my husband and you know we'll get back to you thank you for the thought though mom that's a wonderful generous thing to want to do something for the kids we appreciate that and you know that's the truth you do have to feel that way. Dana is with us in Michigan. Hi, Dana. Welcome to the Dave Ramsey Show. Hi, Mr. Ramsey.

How are you doing today? Better than I deserve. How are you? I'm okay. So I just recently found you on YouTube and definitely opened my eyes about different things. My debt is only about $6,000, but my issue is I make only about $525 about every two weeks. So I need to know what you would suggest, how I should tackle my debt, and how do I survive? Gotcha.

Are you single? I am, but I do have a partner that i live with and you know obviously he helps contribute but you know i want to how old are you independent how old are you oh i'm 30 years old okay do you have children i do not okay all right so if if you were uh single without um without a boyfriend in this situation, you would, in Michigan, making $12,000 a year, you would be below the poverty level. Yeah. Which is why these numbers aren't working.

I mean, I understand. I appreciate it. So what do you do for a living? I work at a luxury retail store and that and that's another issue is that i hello hello oh sorry that's okay um i the playback is confusing me but but my issue is like i work on commission and sometimes i get commission sometimes i don't and now that i have medical bills you know okay so if you if you turn down whatever device you're listening to and just listen to me on the phone we'll be able to talk a little more efficiently

it's on the phone the playback is on the phone oh that's that's weird. Okay. Yeah. I don't know what we got going on. New studio. Okay. Anyway, so really what you've got is a career and an income issue, right? Yes. So what are you doing about your career and income issue? Well, my career is great. No, it's not.

It sucks. Well, I have full benefits. So you're starving to death. I don't care if you've got full benefits. You don't even make enough to be off the poverty level. It's a horrible career. Yeah. You don't make any money.

I know. Part of a career is making money. This is very true. If we doubled your income, it still wouldn't be great. But I have about $5,000 in health debt. Which would be no problem at all if you made $60,000. Yes, exactly. You have a career and an income crisis.

Short term, you fix that with lots of part-time jobs. Long term, you ask yourself, I'm 30. When I am 34, what am I going to be doing that makes $60,000 a year, and what are the 14 steps I've got to do to get there? Well, unfortunately, you know, I don't have the extra money to go back to school, to re-educate myself, to find, you know. That's not the only way to get your income up yeah well i don't know if you're very familiar with you know michigan's economy but you know and it's it's a if you want to find an excuse to live at the poverty level honey you can there's lots of excuses to do that if you've got to move if you've got to work more if you have to change careers if you

have to do all of those your problem is an income problem and it's not going to be fixed until you get your income up i'm not trying to be mean to you but that's the issue and you've got to decide what you're willing to do to address that it's not going to change until you do. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable affordable biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry,

a Better Business Bureau-accred organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. This is the Dave Ramsey Show. We're glad you're with us, America.

We appreciate you being here. It's all about you. The phone number is 888-825-5225. Our question today comes from blinds.com. They have a 100% satisfaction guarantee. It means even if you mismeasure or you pick the wrong color, they will remake your window blinds for free. You get free samples, free shipping,

and with the new promos they run every month, you'll save even more. Use the promo code RAMSEY. I'm getting some new window blinds for a Florida room we just built at the house from these guys. They just sent me the free samples. I'm experiencing these things I've been talking about. They're a wonderful company. Today's question is from Rachel in Iowa. My dad took out a cash value whole life plan on me when I was born.

Now that I'm 21, he says I should continue to pay the premiums because the cash value will keep growing and I won't find cheaper insurance. However, after I've listened to your show, it seems like you believe any cash value whole life plan is a ripoff. Correct. I was wondering if you think I should cancel it and take the cash value. Yes. And if you need life insurance, if there's someone that is counting on you for support, you have a dependent of some kind, you're worried about leaving someone in a lurch and you need life insurance,

then you would get your life insurance in place before you cancel any policies. But I suspect the policy we're talking about is a very small policy anyway, probably a $5,000 face or something like that. Your dad has been sold a bunch of crap and he still believes that it's awesome and it's not. It's a horrible rate of return. One of the worst places to store money is inside a cash value policy. All right. Christy's with us in Utah.

Hi, Christy. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. How can I help? So my husband and I are currently on baby step number two. We've got our $1,000 emergency fund, and we've got gazelle intense about January.

We've currently paid off about $10,000, and we have $1,600 left. We just have our two cars left and our mortgage, of course. One of our cars, and it's the heftier amount, we 11.4 on it it is a lemon we've had it for three years and in the three years that we've had it we've probably put around five to seven thousand dollars into the car already and so every time we drive it there's a new problem so we're wondering if we just need to we feel like we want to get out of it okay but that's kind of against no it's not everything that's not long you don't move up and car to get out of it. Okay. But that's kind of against, you know, everything. No, it's not. As long as you don't move up in cars.

So we don't know how to get out of it. As long as you don't move up in cars. So you owe what on it? We owe $11,400. And what would it sell for, as is? As is, honestly, probably like $6,000. Okay. So you're $5,400 in the hole, right? Uh-huh.

Okay. And we looked at, we decided to swap our snowball and we put the we were just doing like an estimate of what it would be so if we put the traverse first to get out of the negative equity we could potentially be positive equity by december and so we were like well do we do that but then it's kind of going against what you've taught what is it how much is the other debt you only only had two left, right? Yes. So we've got one car that's got $5,000 and then the other car that's the $11,400.

Okay. And so what's your household income? Right now it's $66,000. But we're kind of in a crunch time because I'm going to be losing my free babysitter next fall and it doesn't make sense for me to work anymore. So we're planning on growing our family next year and dropping to one income. So we're trying to get all of this done in this short period of time. Okay.

How clean is your credit? Pretty good. Okay. But one thing you could do is just go ahead and sell the Traverse now and borrow the $5,400 plus maybe $3,000 and buy you a $3,000 car. So you'd be $8,000 in debt instead of $11,000. Doesn't move the needle that much, but it gets you out of the Traverse. Okay. Would you suggest doing that rather than swapping the Snowball?

Yeah. I hate the idea of getting a personal loan. Well, you've got a loan now. It is a personal loan now. You have a personal loan now. You're right. Car loans are personal loans. It's the same thing.

Okay. I mean, it's just, you know, you're going to pay off one, you're going to pay off the other. That moves the needle a little bit. It doesn't move it much because you've got such negative equity. If your $6,000 estimate is not somewhat of value, is not a little bit drama based on the fact you hate this freaking car, I mean, maybe you could sell it for $8,000. I don't know. I mean, maybe. I've looked on, you know, the local, what, everybody's selling it privately, and there's some that are $8,000.

Have you looked at Kelley Blue Book? I have. Kelley Blue Book? I have. Kelley Blue Book says about six. Oh, okay. Then I'm wrong. Okay, cool. That's really bad. I mean, that's awful.

That thing's gone down fast. Well, you know, the thing I would do is say, you know, you've got crunch time. It doesn't matter what you do. You're not going to be done by fall. And so it's just a matter of you're going to have some debt somewhere when you lose your job. It's fall of 2020, so we've got a whole year. Oh, oh, you've got 18 months.

Okay. Or 14 months or whatever. Okay. All right. Okay. Well, that's better. You know, obviously, you know, 15,000 making 60 should be done 100% by that time. Mm-hmm. You're out of debt.

You sell the $6,000 car, you buy a $6,000 car. You can drive the Traverson, too. Doesn't matter. To be completely out of debt? It doesn't matter, right? You're going to be out of debt at the same time, whichever way you go, if you keep the car. Okay. If you keep the car until you get it paid down you're

going to be out of debt exactly the same period of time completely out of debt i mean not just out of debt on that car but 15 000 makes you 100 debt free 10 000 makes you down to break even on this car and the other cars paid for okay and that's what i would do i would just get that i know i'm going to stay with the debt snowball i want to get your car paid off the other car paid off as fast as i can drive this thing a little while you just hate it because it's a piece of crap i don't blame you i mean it's giving you a hard time but you know let's just plow through stay with the emotions and just ride ride with the emotions and let's get it done but i'm you know the more i hate it the

more i'm going to do more radical things to cut spending to put on the debt snowball, too. You changing this around is not going to change the situation that much. It just doesn't move the needle that much for you. You can do whatever you want to, but I wouldn't. I'd stay with the debt snowball. Andrew's with us in Georgia. Hi, Andrew. Welcome to the Dave Ramsey Show.

Hey, Dave. Thanks for taking my call. My pleasure. How can I help? I'll try to make a long story short here. Back before I got married, I bought an ATV, and it cost me about $16,000. I put it on payments. Paid it down to about $8,000, and my wife decided to go to college um so i sold it um i thought i

sold it to pay her college help pay her college fund with that payment that was coming out and um well i got scammed when i sold it and it was actually what i believe is the bank's fault. And I don't know. It went to collections, and now they're really, really harassing me and my wife, my job, everything. So you owed $8,000 on the thing down from $16,000, and you sold it for how much? I sold it for the exact amount that i owed on it okay were they supposed to take over payments or were they supposed to give you eight thousand dollars basically what we had agreed to um is they i called capital one we called on a three-way call and they were just going to give Capital One their bank information

and pay it straight out from Capital One. At one time, $8,000 or pay payments? No, pay it straight off, pay it straight off. And we did that, and everything went through. Capital One said it was good. Capital One said wait about a week to make sure everything goes through. I waited a week and a half, and they called me and said everything is good, and he came and got the side-by-side. Capital One sent me a notarized letter with release of liens, and they're satisfied

it's paid in full, and a month later, they called me back and said that I still owe $8,000 on the side-by-side. You need a lawyer. That's right. I actually have an appointment with a lawyer on Thursday. Yeah, you need a lawyer. Capital One's, it's Capital One's fault. They gave you a release of lien. You're free, baby.

You don't owe a dime. And this is Capital one misbehaving again yeah what's in your wallet money because i don't deal with you people this is the dave ramsey show Thank you. Regis is in Canada. Hi, Regis. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? So my wife and I are working hard to pay off our student loans. Our question kind of comes in more of my in-laws. So my wife and I are working hard to pay off our student loans. Our question kind of comes in more of my in-laws.

My wife's parents took out about $40,000 in loans to help my wife through her schooling, and that $40,000 has now grown to about $70,000. I don't think any payments have been made on it in, well, I don't think ever. And so we're wondering kind of should we help pay it off how much should we help pay it off we're kind of concerned about how um willing or i guess how motivated they are to pay it off um they're kind of not not sure what to do when the loans were taken out what was the agreement between your wife and her parents were she to pay them or were they to pay them? I think they had said just worry about it. They wouldn't really tell her, like, the amounts that they were taking out or anything. My wife had a conversation with her dad earlier this year just about their expectations

and whether or not they expected us to help them pay it off, and he said they didn't. But it's still something we're wondering, like, morally, is it something that we to help them pay it off and he said they didn't um but it's still something we're wondering like morally is it something that we should no help them pay off no um there's no moral obligation whatsoever you don't have a legal obligation because she didn't sign the papers and she did not um make an agreement with her dad and mom to they were going to borrow it in their name but she promised them that she would take care of it after school. That did not occur. She didn't even have knowledge of it, and he admits that when he had the conversation earlier on.

They're just financial misfits, right? Yeah, they've ignored a loan that was $40 until it became $70. Right? Right. Okay. So what do you guys make? Well, I make $60,000 annually. And then my wife, I'm Canadian, my wife's American,

so she legally can't work right now. We're working on getting her status so she can start working. Okay. So it's single income right now. Okay. So it's single income right now. Okay. If you were making $500,000 a year and you had $2 million in the bank and you wanted to write a $70,000 check as an act of generosity, that would be fine. You have no moral obligation to strain with a $60,000 income,

newly married, to pay her debts that are not her debts. You just don't. It's a very sweet sentiment, but it's not a moral obligation. That's what you asked me. Now, again, if the parents don't prosper and they struggle and they continue to mishandle money and you guys become very wealthy and you want to just do something nice, that's fine. I got no issue with that at all.

I had a buddy of mine paid off his daddy's house the other day, but he had no moral obligation to do that. It was just a really cool, nice thing to do. But he's in a financial position in Baby Step 7 to do all of that, right? And so, you know, you guys keep working. If you become multimillionaires and you look up 10 years from now and they're still over there struggling and you want to stroke a check and help them out, that would be a very sweet thing to do. It is not a legal obligation for sure, and I don't think it's a moral obligation. Had she told them she would pay it, then I would put it in your debt snowball

because a handshake is as good as a legal as far as I'm concerned. Do you think it would be unwise for us to because i mean we said we would like to help but do you think it would be i guess unwise for us to help you're not in a position to have our own you're not in a position to you know the only the strong can help the weak and you're not strong yet financially right right i mean you're not you're not sitting around with a bunch of money you got you got your own deal to deal with and so when you finish dealing with your deal if you want to help some other people with their deal then that's great that's outrageous generosity if it's inside the family that's fine i mean i love doing stuff like that as an act of generosity generosity is

different a different set of moral values than the moral obligation to just help mom and dad, this generic guilt trip thing that's out there. And I think it's wonderful to do nice things for people, especially people that you love inside your family. I think all of that's a great thing to do. But no, you're broke. No, I would not put this in your dad's snowball. I would put it up there as a generosity item, excessive, outrageous generosity item at Baby Step 7. And that's where it belongs.

And maybe you can inspire them to get their act together because obviously they are not dealing with their finances. Kelly is with us in Florida. Hi, Kelly. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my Ramsey Show. Hey, Dave. Thanks for taking my call. Sure.

What's up? Me and my wife are in a serious dilemma. I'm a firefighter, and she's an online school teacher. We have a combined income of about $80,000. Our total debt, including our house, our vehicle, and our credit card is about $310,000. How much of that's house? $243,000 is what's owed on the house. Mm-hmm.

Okay. My vehicle is paid off. My wife's vehicle is a 2015 Traverse that we owe $26,400 on, and I think it's worth about $21,000, so we're upside down by $5,000. But our biggest problem is our credit cards. We kind of got taken on the house, so we used the credit cards to fix the house, and combined we're about $50,000 in credit card debt. So my question is, are we at the point of filing bankruptcy to get rid of the credit cards? Not even close. Okay? Not even close.

Okay. Not even close. No. No, you guys are at the point you need to be on a budget, and you need to chop up the credit cards. But listen, I put bankruptcy in the same category I put divorce in. It's what you do after you've tried everything else, and there is no other alternative, and then you still waited two weeks.

Okay. Because it's not – it ain't a fun trip. I did it. It was 30 years ago. I did it. It's not fun. I don't recommend it for anybody. I mean, there's good people go through it.

I'm not going to be mad at you if that's what you end up doing. We'll still be friends. But, you know, I'd sell the car. I'd work two jobs. You're a fireman. Were you on 24 off 48 or something? We work at an airport, so we work like 60 hours a week. Just solid straight through.

Okay. Yes, sir. And this income includes all that overtime? Yes, sir. Okay. All right. Good. All right.

Anything you can do for extra money, either one of you, and I'd sell the Traverse. Even if you stopped paying the credit cards and paid them nothing what are they going to do eventually three years from now they'll get around to suing you right and your credit will be run uh by the time three years gets around i think you could have made an 80 could have taken care of 50 sure okay and you could have done it pennies on the dollar, and you weren't bankrupt. You just had some bad credit card debt, which is on a scale of 1 to 10, a bankruptcy is a 10. Bad credit card debt is a 5 or a 6. Okay.

And so you don't want to do that. But the traverse is killing you. It's got a big high payment, and I would dump it first and foremost. I'd look for extra work. I'd get on a tight budget, and the two of you join hands and say, this stress is killing us. I hate this minute in our life and our marriage. We don't want to live like this anymore.

I've had it. Let's change our ways. Because you've done a series of decisions that brought you to this point, and this is your opportunity to do a 180. Agreed? Yes, sir. I mean, a bad car purchase, a bad house purchase, and a bunch of stupid credit card debt purchase a bad house purchase and a bunch of

stupid credit card debt on the bad house purchase did i miss something that's that's everything yeah i've done it too man that's why i can see it it's real clear and i mean i was dumber than you were so i got you beat man so how old are you guys 25 no no i'm 38 and she's uh she's 36 okay all right i should have i should have caught that there's yeah you're not can't do that by 25 all right so um all right so what we're going to do is we want you guys to go through our nine-week class and one-year membership in financial peace university as our gift and we'll walk with you as you guys go through this because you have a very hard 12 months ahead of you my friend but you do if you file bankruptcy too yes sir so you got very hard 12 months ahead of you, my friend, but you do if you file bankruptcy, too. Yes, sir.

So you've got a hard 12 months coming. It's just a matter of what medicine you want to take, whether you want to do gastric bypass or whether you just want to do it on a diet and go on workout. You know what I'm saying? Sure, sure. And so gastric bypass is the bankruptcy. I'm going to do that as absolute last resort after I've tried everything else. So let's put you on a diet and put you in a workout regime. I think I can help you turn this.

I can see the numbers. You're just beat up and tired of fighting it, and you feel a lot of shame from being stupid, but we all do that, brother, so no more shame. This is time to move on. Hold on. Madison's going to pick up. We're going to sign you up for Financial Peace University.

My gift to you. Someday later, you find a young firefighter who's broke and scared, and you pay for it for him. But I'm giving you yours. This is The Dave Ramsey Show. I'm out. Thank you for joining us, America. We're glad you're here. Ryan is with us in California. Ryan, welcome to the Dave Ramsey Show. Hi, thanks, Dave.

What's up? We went out of California, so we're looking to sell our house. My parents have offered us to live in their house as we work on transitioning out of California to find a place to live. And so we only have about $30K in debt, and we figured we're going to get about $135K equity out of this. Awesome. So we want to know. Yeah, it's really awesome. We want to know what we should do. Um, with let's say once we, well we're going to pay the debt off and then we're going to go into the next

step. What should we do with all the extra money? Um, should we just save it for down to the next place we want to move to? Yes. When are you going to move? And then Aren't you going to move now? No, we want to find a place to move. We're not sure. We were thinking about just going across the United States a little bit since we homeschooled our kids and look at all the different areas and see where we want to settle for the rest of our lives. Okay. Yeah, my recommendation would be to put a timeline on your adventure.

I love the adventure. It sounds fun. But I don't want you to look up three years from now and that money be dribbling away. I have that fear, exactly. So I'm going to give myself a deadline. Okay. So we sell the house. We pay off the debt.

We put $100,000 in a savings account. I'm assuming you're going to continue to work. Yeah. I own my own business business i'm an entertainment business so we we can do our business anywhere we go gotcha okay so you can just kind of go gypsy mode for a year and at that during at the end of that year i'm going to make a call okay and just i don't i don't care if it's 14 months you decide what your timeline is but i if i I know myself well enough to know I need that because what that does is it forces me to gather information at each one of these stops, knowing that I'm coming, this thing's coming to a head, it's coming to a point. And it's, you know, we're going to say this date is the decide date. And you put it in the calendar and you go, okay, well, there's one more place we want to visit before then.

Okay, we've got to get it in then. Let's go. And, you know, that kind of stuff, right? And so, you know, you don't make it too short, but you don't make it too long. Okay. I don't think that's 90 days because I think this sounds like it's a one-year adventure to me. Yeah. Yeah.

Is it 90 days or is it a year? I feel like a year. i think you're right and we'll so we just make a list of all the places we need to hit up yeah and you're saying just just tackle it and do it yeah this is just kind of it's an adventure but it's not a wandering generality okay while we're on this adventure and we're seeing everything we're going to also be doing research this is a year year of enjoyment, fun, and research. And so just put it on the calendar one year from the date of the sale of the California house. We hit the road. Jack.

And I don't care. You make up your date. But you see my point. I don't think three years is healthy here. No, yeah. Okay. You agree? I agree. Okay. Okay. So just other than other than that i mean and here's the thing as long as you make enough to live on then your hundred thousand net

of paying off your debt you're getting 130 out of the house you pay off your debt you got 100 left it's still going to be sitting there waiting on you and if you're not in california a hundred thousand dollar down payment will be a nice down payment in most places depending on what what you're buying, what your income is, and all that kind of junk. But, I mean, that's not bad. That's a good start wherever you land. And you decide, you know, what area has the values you want to raise your kids in, the taxation, best for your career, the area you like, all of those things. Proximity maybe to grandparents, spoken like a good grandparent, that kind of stuff.. Proximity, maybe, to grandparents.

Spoken like a good grandparent. That kind of stuff. So, there you go, man. Thanks for the call. All right. Zach is with us in Pennsylvania. Hey, Zach. Welcome to the Dave Ramsey Show.

How's it going, Dave? Thank you for taking my call. Sure. What's up? Just calling. So, we took out a home equity loan. My wife and I redo our kitchen. And we have a decent amount left over, $9,500,

and I'm starting graduate school in a couple weeks, actually. I was wondering if I should put that towards tuition so I don't have to take out as much student loans, or should I just put it back towards the home equity loan and start paying it back off? Well, debt's going to be debt, and I'm not going to tell you to borrow money for grad school at all. Right. You've already got this money laying there if you want to use that as a jump start, but the part of your statement I don't care for was to limit how much I borrow in student loans. No, let's just change that whole plan.

But as far as this goes, if you want to use this and just go, okay, home equity loan paid for part of my education, either way, you've got to turn around and pay it back off, right? Right, right. My only issue was that the student loans is a higher percentage. It's six and a half to seven. But it's also not got payments on it until you get out. Right, right, but the home equity loan. So we can't afford it.

We've been making the payments now. I'll be able to make it during school, too. Mm-hmm. So. The payments on what? On the home equity loan. Yeah. Yeah, we've been paying that.

Yeah, I know. But how are you paying for school then? You're going to use this $9,000, and how are you going to pay for the rest of it? So it's $34,000 a year. I already took out $20 it so it's it's 34 a year i already took out 24 a year what are you studying uh physician assistant okay that's steep all right um so you're paying 75 70 grand huh correct okay and uh and you've already paid how much uh i haven't paid any of the tuition yet. I took out $20,000 in federal student loans because that's the max that they'll let you take.

So that would leave me, at least with this year, with $13,000 left to pay this year, either get a private student loan or pay that $9,500. Well, we're paying the $9,500. And are you working? I am now a highly discouraged working during school. I'm sure. It's a very rigorous study. What's your wife make?

She makes about $40,000. Yeah, she's a hairstylist. And when does school start? Starts in about three weeks. Oh, wow. Okay. All right. starts in about three weeks oh wow okay all right uh well i i'm if i'm in your shoes the only thing the only caveat is yes i would use the 9 000 that's the question you asked me i'd answer that but if i'm in your shoes um i i don't like your path of just piling up student loans here

uh federally insured private or otherwise uh and you don't seem to have an idea of how to pay for this other than that and so i'm going to work on lots of different ways to pay for it other than that even talking to some hospital companies and see if um see if i can get scholarships with them by promising to work for them for a little while or something when i get out whatever whatever you've got to do that's that's legal and moral um rather than go seventy thousand dollars in debt uh i'm not going to recommend that although I think PA is a wonderful field of study. It's very usable. You'll have a great income.

You'll always be able to land somewhere and make money. You know, it's going to be a – if you finish and pass your boards and don't flunk out or something, you know, you will get a great rate of return on that field of study. But I am not going to ever tell you to go into student loan debt to do that. And I do not like what you're doing there as far as the student loan side of this. I'm going to try to find some other ways while we're at it. Hey, thanks for the call.

Open phone's at 888-825-5225. That's 888-825-5225. You's 888-825-5225. You can follow me on Twitter if you'd like. There's just under a million there. Instagram's about a million and a half now hanging out. And Facebook is millions and millions. But you need to remember with Facebook, they don't always send you everything we post. They throttle some of our posts and so forth.

And Instagram does not. Twitter does not. But anyway, Roseia, I guess is how you say that, is on Twitter. Dave, you said we had three to six months of expenses as our emergency fund. How do we decide with three months or six months, and how do we determine what's right for our family? Three months or six months, somewhere in there is right for your family. The more stable and predictable your incomes are, the more you can move towards the three-month side.

So if you have two incomes in the house instead of one, that's more stable. If they're both very stable jobs, that's even more stable. So a teacher and a firefighter, both government jobs, extremely stable. Two people working. You could cheat to the three-month side real easy. A self-employed person and a straight commission person, two people working

but both volatile incomes. So I'd go towards the six-month side. And so on. So how predictable are your incomes and how stable are your incomes? And that'll take you there. So, good question your incomes, and how stable are your incomes, and that'll take you there. So, good question. Thank you for joining us on Twitter.

This is The Dave Ramsey Show. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know, you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the app store and download it today.