The Ramsey Show - App - Pay Off Debt, Buy Car, or Do Home Repairs? (Hour 1)

Episode Date: August 13, 2021

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Thank you very much. live from the headquarters of Ramsey Solutions broadcasting from the dollar car rental studio this is the Ramsey show where America hangs out to have a conversation about your life and your money I'm Christy Wright and joining me today for Fun Friday is my best friend, Rachel Cruz. Christy Wright! I can't believe they let us do this. We, this is our job. That's what I want to know. Someone gave us the microphones, and here we are.

It doesn't happen often, and I feel like maybe there's a reason for that, but that's okay, because here we are, and we're going to live it up. Y'all, listen, we are here for you. We're answering your calls. 888-825-5225. You know the number. Give us a call. We are answering your calls about money as always. But we've been on a little bit of kick lately because of my book on life balance. So if you've got questions about time management, back to school, all the questions, being overwhelmed. Today was Conley's first day of school. And so it's like you're packing lunches, you're getting through the whole routine. Maybe some of you are feeling that you're feeling the pressure of I've got to

get in a new routine, a new rhythm, manage my calendar. All the school calendars are coming in. All the sports calendars are coming in. All the show up for this parent and me, coffee, PTA, this, that, and the other. If you need help managing your time not being overwhelmed rachel and i are in the thick of it we've got six kids between us we get it six kids under six who had six you're like wait a minute on me math rachel you're with me uh we would love to talk to you about your money about your time management if you're feeling overwhelmed or maybe you just need help making a decision. Sometimes it's good to have a third party. It's good to have an outside perspective.

Run your situation past us and then we'll give you the best advice that we can. 888-825-5225. And we're going to start with Heidi in Columbus, Ohio. Hi, Heidi. How are you? Oh, we lost her. Oh, no, that was quick. All right, Rachel, I got a question for you. Because here's the thing, right? Dave and I were on the

show this week. And we were talking about something funny. And you know, I've not talked about this. So Dave and I were talking about budgeting. And the caller was asking about how do I manage my cash envelope system, like with sometimes I use my debit card and so on. And how do I play that into the budget? And so we got to talking, I talking I said Dave that's got to be harder now because for example your food envelope some food comes out of the envelope some comes out of your debit card if you buy groceries on Amazon Fresh or so on same with clothes some clothes I buy with cash some clothes I buy with you know online and so we got talking and I said, and then there's just those add to cart days. And he goes, what? And I said, you know, like add to cart. And he goes, like you're shopping and the website

recommends you might also like, I go, no, just like, sometimes you're just like feeling like adding to cart. I just need to add. And he goes, you should be ashamed of yourself. Oh my gosh, he did? And I said, and you could tell he had no idea what i was talking about so please for the listener let's talk about this i was like it started in covid right like i mean it maybe got worse in covid when we're home we're buying everything online but there is a real there is a real effect because sometimes boxes show up and you're like i don't know what i got oh it's the worst i mean like in that way so i have kind of two add to cart mentalities. Okay, let's have it. So one is just the complete emotional, I just need to buy.

I'm bored. I'm bored. I'm bored. I'm stressed. It feels good. I haven't bought something in a while. I need to buy something. The adrenaline kind of pumps like the total medicator, right?

Like that is like the scientific, you know, when you look at purchasing and what your brain does, how your body responds, all of of it it's like literally is one of the coping mechanisms in life so sure now i started an ad to cart where i get all those feelings but i don't quite press the checkout button you just leave them in the cart and there is something about just putting it in the cart. Not even buying it. That does something for me. I don't know. And I don't even buy it,

but I'm like, okay, that's cute. That's cute. Because I kind of just want to go shopping. So I'm like, I'm just going to add. It's window shopping online. It is. And then I can forget about it.

Of course, they send you like 80,000 emails. Like, you left something in your cart. You left something in your cart. I'm like, I know. I'm doing this on purpose. And then I go back and sometimes I'm like,

okay, there's one thing in there. Sure. That I may want and I'll get. But there's just something about just literally adding it to the cart on my phone that does something. I don't know. I probably shouldn't be teaching about money. That should not be my job.

Listen. But this is true. Let me tell you something I discovered this week. In addition to teaching Dave Ramsey about what add to cart means, the emotional side of it, I go home that night. I don't know what day it was this week. And I told Matt about it. I was like, yeah, it was so funny today.

I was like telling Dave on air about Add to Cart. And he goes, yeah. He goes, when I go into our Amazon account, because we share one, right? Sure. He goes, and I see that cart is full. Sometimes I just remove from cart. I was like, that is my saver husband.

He's like, she doesn't need this. So be careful because if you share it with your spouse, they may just delete from cart. Just keep it. Yes. Okay. Okay. Yes. Okay. Okay. Yep.

Okay, great. We're going to get Heidi back. We're going to get Heidi back. We lost her. I promise I know how to work these phones, guys. All right. Here we go. All right.

And Heidi, are you there? Hi. Yes. Heidi, you're with us from Columbus. I'm so glad we got you on. How are you doing? I'm good. Thanks. Thanks for taking my call. Yeah. Well, absolutely. We're glad you're with us from Columbus. I'm so glad we got you on. How are you doing? I'm good. Thanks for taking my call.

Yeah, well, absolutely. We're glad you're here. What can Rachel and I do to help? So three years ago, my second child was born. We have three, five, three and five months old. And he has had chronic medical issues his whole life. So we decided at that time for me to stay at home and be a stay-at-home mom. But the problem that we're running into now,

I was doing some babysitting on the side. By the side, I mean like two to three days a week. But with his mounting schedule for therapies and school, we can't keep me doing it. And I've also developed severe like RA and having some anxiety and depression issues as well. So I'm working through those on my own and my husband feels for the safety of our family and benefit of our family. It would just be better if I stopped work being and just focused on our three kids.

And I agree, but we're starting to get a little bit perplexed when we look at our budget because we have $11,000 deductible to meet. Now we had a baby, so that covers half of us. Like I, my 5,500 has been met. So anything I need for the rest of the year is covered, but he has been pending Achilles tendon surgery, probably next month. And that's going to be another 5,500. So we owe nearly $11,000 from this year on medical bills. And my husband brings home about $60,000 a year. So we're just trying to figure out first how to tackle the medical because it's not going to go away. And then where's that life balance of, you know, I spend all time with the kids and doing therapies. And I'm not going to lie, I'm

exhausted by the end of the day. You know, I'm physically fried trying to figure out, I have a accounting and business management degree. Like, could I do something different? And I'm not thinking about it, just trying to get some perspective. Yeah. So what are the ages of your kids, Heidi? Sure.

My oldest is just turned five. The middle one, the three-year-old, he just turned three. He's the one with a ton of chronic. And then the three-year-old he just turned three he's the one with a ton of chronic and then the five-month-old she's on my lap i'm trying to keep her quiet oh yeah well first of all i just want to start heidi and tell you you're doing a good job i know it doesn't feel like it because you feel like the world is on your shoulders and you you are doing better than you think now i, I want to encourage you with one simple thing before we go to break.

And that is the whole premise of my book and my heart behind my book is doing the right things at the right time. It will not be this hard forever. You are doing the right things at the right time by taking care of your family. If you want some ideas of how to make extra money from home, I'll send you, stay on the line,

I'll have Kelly send you my Business Idea Bootcamp, which is a course that'll help you come up with business ideas you could do from home around your kid's schedule. But I just want to encourage you not to put that pressure on yourself. You're dealing with health issues. You're dealing with three kids under five. That is more than a full time job. And you are doing a great job. There will be a season for you to earn more money in the future, but it might not be that season right now. This is The Ramsey Show. Hey, I'm Christi Wright. Do you struggle to find time to connect with God?

Well, I have great news for you. Glorify is an app that makes it easy for you to have a quiet time practice that works for you. In fact, it's the number one daily worship and well-being app trusted by over 1 million Christians. And the great news is the app is free to download. Just search for Glorify in your app store. You could also access their entire content library at half price by using the promo code Christy. Download the Glorify app today. I'm Christy Wright and joining me today is my very good friend and multiple New York Times bestselling author, Rachel Cruz. And we're taking your calls about money. Of course,

as always, we're talking about time management, life balance. That can be hard, especially with back to school. Like I know so many of you guys that our parents are experiencing right now or just the second new year. August is kind of like this for everybody. We're kicking it into gear, which is awesome. You've got goals. You've got a lot of good things going on, but sometimes even having too many good things going on can be overwhelming. So give us a call. Triple eight, eight, two, five,

five, two, two, five. And Rachel, before we went to the break, we were talking to Heidi and Heidi was a stay at home mom. And this is one of the things that's interesting.

I've actually talked to Dave about this. When we get these calls about people that are in baby step number two and they desire balance. And I don't even know if they know what they mean by that, but they desire some type of balance, but their life is anything but balance in a season of going all in on sacrifice on their debt and even in Heidi's example not just the debt being a focus but she's got a ton of medical things going on she's got things going on with the kids and and you know anybody can relate to that if you haven't had a challenge with your, that is all consuming. It's not just consuming from a money perspective. It's consuming from a time, emotional energy, the amount of your day that you're spent,

your thought process, how much percentage is in there. It's so draining. And so I love to help people kind of take the pressure off of like, hey, you don't have to do all these things. You can do one thing at a time. What's right in front of you? But I'm curious from your perspective, especially helping so many people get out of debt,

you know what, I've talked about this balance, but balance looks different in different seasons. So when you're doing the right things at the right time, you actually feel balanced, even though you're doing all one thing possibly. But what were your thoughts on Heidi's situation? Because I know we had to go to break, but especially someone that has so many things

on their shoulders, so many, I mean, money pressure, but also emotional pressure, health pressure, all that and desires to work or do whatever. Well, I think you always kind of look at the risk reward and situations, right? And in her case, multiple kids, again, a child that's sick, she herself is struggling. You hear all of that. And I'm like, the risk to the family dynamic and if what it will do to her if she puts this pressure on herself is so much greater right now right than that reward of getting out of debt four months earlier right do you know what i'm saying

like you kind of have to look at the whole picture and yes we are all about gazelle intensity doing what you can sacrificing uh but not at the detriment of of yourself right that looks different for different people and it does that's right right some people they're able to both go outside the home work they're out of debt and crazy amounts of time crazy amount of debt and you're hearing like it's amazing you can applaud that for some people it took two years because of a decision to say hey for our family dynamic in this time this was better utilized for me to be at home and i think you have to give yourself permission to say, hey, this is what's best for us in this moment.

Yeah. And kind of get above everything else. But it's tough. And I think, you know, we talk to a lot of women that are home and they want to go back to work maybe because they have a passion. Or some of them I think maybe feel guilty for just being at home. I've heard that before. And I'm like, you know, to her, to Heidi,

I just would say as well that the encouragement of you do so much. When you are home, like you are saving on childcare. You are saving. You know, you are doing a lot of things, not just financially for your household already, but for the stability of the home. So that role, don't take that lightly, is what I would encourage her to do as well.

And anyone listening, because, but it's tricky. It's hard. hard and I mean you and you and I we know this but I'm like I think men and women have different maybe same type of struggles in different ways different struggles different times I mean all of it right but as a mom when I hear another mom yeah like I can go there I know what that feels like like there's just something there so for I think you gave her such freedom and that and permission which i think a lot of women need well you you make a good point with the guilt because i i definitely see that a lot of even with women with business boutique that are starting businesses because they're excited to they have those gifts and so on but there's there's an element of guilt for in particular for stay-at-home moms because and they say to me their words not mine i feel

like i'm not you know earning anything and i say them, I go, as radical as this sounds, I don't care if I make people mad. I'm like, add up what it would cost to put your children in childcare and pay yourself that because that's what you're doing. You are saving that equivalent of money in your household. And so there's a value to that, even though you may not see it that way.

And so that's a huge piece of it. But you know what else you pointed out? I think comparison, and you talk about this all the time, but comparison plays into this because someone that is in, let's say that one mom has, Heidi's example, she's got three kids under age six. One of them has health things going on. She has health things going on. And then she might see another mom that has teenagers and she doesn't have the health issues and she's not in debt and whatever and be like, oh, I need to be doing more because she is or we scroll social media or we see people in our peer group in our church in our school and we hold ourselves to the same standard that maybe they are when our situation is totally

different and i just i just love that reminder um not only just the not comparing piece of it but the pressure is off the pressure is off like like you've got to do what's right for you and what's right for you is going to be different than what's right for someone else. I just love that permission because I think a lot of women feel weighed down by that and they don't need to. I had a friend say too, if you're spinning too many plates,

you can't keep them all spinning. No one said it's wrong to set down a plate and then maybe pick it up in two years and spin it again. You get to create a life that you love. You get to make these decisions. And so there's a level of control we have to put back in. But when we're,

like you said, when we're focusing on what everyone else is doing and what you think, quote unquote, I should be doing, right. Then it screws with everything. Well, and sometimes it can start as a simple idea in your head.

My best friend, Jenny sent me a message this morning. We were just playing catch up because she's a lives a little further away. And she said, I said, you know, give me an update on your life. And she said, well, you know, the kids started back to school this week. And she said, I told myself that I would start, you know, working part time when they went back to school. So now I've just got this pressure. I've got to like fill out my resume and I've got to do this and LinkedIn. And you could hear in her voice, she was getting anxious. And she's like, I just, I mean, I just got to do this. And I sent her a message back and I was like, you decided that. You can just

undecide. You decided you were going to go back to work part-time when your kids are in school. They've been in school five minutes. You can decide that you're going to start doing that in October. That's right. Or November. Sometimes it comes from an idea that comes in our head, like, oh, I could do this. And it turns into, I should do this. And then I'm a failure when I don't do this. It's like, you're the one that decided that. Just like you said, I could do this. And it turns into, I should do this. And then I'm a failure when I don't do this. It's like, you're the one that decided that just like you said, the personal responsibility. Like you can change your mind. You can change your plans. You can change your priorities. Why do you think that's hard for people? I mean, you, you're kind of in the trenches with women. I feel like a lot in this, like what, I wonder what it is. What, what, yeah.

Is there a couple of things that you can think of patterns that you see that, that cause that, that we put on ourselves? Well, I think there's an element of a very practical element of momentum that once we start thinking something, then we start taking action in that direction. Then once we get momentum, we don't ever stop to question it. And I've been on coaching calls with academy members where they are holding their feet to the fire, putting pressure on themselves to achieve some goal. And then we identify through my coaching that that goal doesn't even make sense anymore they're chasing something that's not even right for them anymore they said it two years ago it is right it's not right but we never stopped to question is this still right and it's interesting

you bring this up because one of the things i talk about in my new book that i think is that we don't talk about enough is the concept of seasons and we just think oh priorities are set it and forget it thing these are my priorities for my whole life. Or because something's right right now, it's going to be right forever. And when you start to look at your season, like Heidi's a great example. We have different seasons depending on our family, our work, our health, these major areas. And depending on the season we're in, that will determine what balance looks like for us. That will determine what our capacity us. That will determine what our

capacity is. That will determine what we put on our calendar or not. But if we don't consider the season we're in before we set our calendar and our to-do list, then we're going to pile it on way more than is realistic or even desirable for us in that season and then beat ourselves up when we fall short. But the problem wasn't that you didn't do enough. The problem was that you never took into consideration your season when you put all that pressure on yourself. Of what it is. Yeah. I think there's such a, there's such an important aspect of considering your season.

Maybe you're in a season of getting out of debt. And so you are working two jobs, but remember it's a season. That's right. When you get out of debt, you're not going to be working two, three, four jobs. Hopefully, you know, maybe you're in a season of newborns and you're like, I don't ever sleep. Right. You don't, but I promise you, three, four jobs, hopefully. You know, maybe you're in a season of newborns and you're like, I don't ever sleep. Right. You don't.

But I promise you, you will sleep again when their child is older. And so just understanding how our season affects us gives us the strength to get through it and helps us take the pressure off and shake the guilt whenever we don't meet our own expectations of ourselves in that season. Yes. It's so good. And again, it changes. Yes. It's going to change.

Seasons change, literally. It's not this idea fatalistic that forever, ever, ever, ever, ever this way. Even though it feels like it sometimes. It does. It does. But I'm like, you can be able to say, okay, we can look out here. We took the girls to Florida two months ago. We left Charles with

Winston's parents, but it was the first trip. We didn't have high chairs, cribs,bs diapers strollers nothing and we were like we're here we're getting there it's happening so yeah find the light find the light it's there it won't last forever this is the Ramsey Show Most teens are graduating high school with no clue how to handle money the right way.

Ridiculous. If your teen is prioritizing visits to the drive-thru over saving for their future, we can help. Our fully digital Foundations in Personal Finance self-study course will walk your teen through how to save an emergency fund, buy a car with cash, graduate from college debt-free, and all the money lessons they'll need to thrive now and for the rest of their lives. And the best part, there's no instructor needed. This course has engaging video content, auto-graded assessments, and all the resources that your

teen will need to complete the lessons on their own time, at their own pace. For a limited time, you can snag this and other self-study courses for teens for just $29.99. Parents, text SELFSTUDY to 33789 to learn all about the courses we have available for your middle or high schooler. Text SELFSTUDY to 33789. nine. Does it feel like no matter what you try or how hard you work, you just can't get ahead with money? I know that feeling. It's exhausting and stressful and sometimes it's terrifying. But you don't have to live like that. If you're sick and tired of being sick and tired, and sometimes it's terrifying. But you don't have to live like that. If you're sick and tired of being sick and tired, decide that you're ready to do something different so you get different results. It's time to commit to a plan that actually works. Financial Peace University

is the step-by-step plan that's helped nearly 6 million people pay off debt and take control of their money. Combine that with the premium version of the EveryDollar budgeting tool and you will make progress right away. And it's only available with a membership to Ramsey Plus. Decide today to break the cycle of living paycheck to paycheck this month only. We're taking $30 off the price of a 12-month membership. Start your free trial of Ramsey Plus today by texting TRIAL to 33789. That's TRIAL to 33789. All right, we're going to go to Joseph in Springfield, Missouri.

Hey, Joseph, how are you? Good. Hey, Christy. Hey, Rachel. How are you guys? Great. What's going on? Hey, I got a money question for you. So my wife and I are trying to figure out what to do. We have $30,000

in our savings account. We have $25,000 of student loans. We did buy a house almost a year ago that needed some renovation and remodel. So we have about $ 20,000, I'd say, until we are kind of done with the house to where we're, you know, happy and comfortable. And we've been on one car for five months, and that time has ended. We definitely need to get a second car. So just kind of want your opinion, your advice on kind of what to tackle first, and then maybe kind of how much in each category to prioritize. Yeah, absolutely. Joseph, how much do you guys make a year? Our monthly budgetable income is about $4,500. Okay.

$55 to $60 is take-home. Yeah. What are these improvements? Because I understand some improvements are necessary when you move in a house, if it's like mold or something major. But you said happy and comfortable, Joseph. Tell me about these improvements. Are these optional, Joseph? Be honest with me.

Yeah. Some are needed, you know, tubs, faucets leaking, stuff like that, need bathroom remodels. Some are, you know, we'd like to updated fixtures in the kitchen and stuff. So we know that some is absolutely like, yep, we need to do it. And some is like, well, if it's Instagram worthy, you know, we'll get there eventually. But yeah, like remodeling the bathrooms, fixing leaky tubs, putting on doors and putting new floors in, picking out the moldy carpet and stuff like that. Have y'all calculated the amount of things that are like really necessary, like moldy

carpet and then kind of itemized like two separate lists, like things we must do now to live here and things that would be nice to do later when we have the cash. Yeah, it's about, I would say it's about 10 of those 20 that we calculated. Half of that is like, okay, we really need to do this. And then the other half is like, these are some things coming up in the future that we want to do. And we kind of like having that security of the extra, you know 10 000 sitting there for those things gotcha yeah okay well what and uh i'm sorry i'm going to ask about the car situation so you guys have been doing it for five months how'd you do it for five months and why

suddenly is that season over um well i am an educator so uh back to is around the season. I'm also a sports official, and so I have to travel for games and stuff. And so since both of those things are coming back up for the fall semester, we can't juggle it with just one vehicle. Yep. Okay. So where you guys are at because of the house repairs, because of the debt that you guys still have, the good thing is you have $30,000 in savings. So from that, we're going to kind of just split that. We're going to categorize that $30,000. Are you ready?

Yeah, I'm ready. I would spend nothing on a car right now. Nothing. $5,000 maybe. I mean, get a cheap, cheap, cheap, cheap, cheap, cheap, cheap old car. Something that's reliable, obviously. We don't want it breaking all the time. But I mean, get a cheap, cheap, cheap, cheap, cheap, cheap, cheap old car. Something that's reliable, obviously. We don't want it breaking all the time.

But I mean, like, just go look. Go find an old Honda Civic and a Core. Just an old, nice car that is reliable, okay? Nothing big. Nothing fancy. Your 10K, I'm going to press you on it just because I could just hear in your tone. I'm going to say do it in 5K, okay? So that's $10,000 of the $30,000 that we've already spent. 5K in- say do it in 5k. Okay. So that's 10,000 of the 30 that we've already spent

5k in house stuff of absolutely needing it. And this is pricing out different options, different vendors. Don't just take the one guy that you hear. I mean, this is kind of like, this is gonna be bare bones for just this for a little bit. So I would, I would find the things that you absolutely have to do and do it as inexpensively as possible to get it done. So, again, I'm going to cut your 10 and 5 just for fun. So that's 20 grand left. You guys have 25,000 student loans. I'd keep 1,000.

I'd throw everything else at the student loans. And then you guys are close at that point then to getting out of debt. I mean, you're going to be – you're going to have about 6,000 left on those student loans, and I want you guys gazelle intense at that point then to getting out of debt. I mean, you're going to be, you're going to have about $6,000 left on those student loans, and I want you guys gazelle intense at that point. I need something in you, Joseph, that feels committed, okay? Like, I need you to say, I'm done.

It doesn't feel like you're super sick and tired of the loans. It's kind of like, they're there. I got this, this, and this. Like, if it's going to leave, it's got to leave. And the sooner you guys clean this up, you get rid of it, you get some actual cash as an emergency fund.

So when repairs are needed for the house that you actually need, you have that cash to pull out. And then from there, you can say, okay, we have our fully funded emergency fund after you pay off your debt. Then we can look to say, okay, now do we step up in car? Now do we go and look at the house and do the things that we want to do more than just the repairs? But, I mean, I want you guys to go bare bones because the more you sacrifice your lifestyle, the more cheap of a car you get, the more you price out these home

repairs and you do what's absolutely necessary. And the more money you can throw at the student loan, the faster you guys are going to clean this up. And you're going to be in such a different position financially if you do this. And you're going to make your money go so much further if you do what Rachel says. Like you've got $30,000 and you look at that like, oh wow, that's so much money, which is great that you have it. You guys have done well to save that up. But I want you to make, I want you to pinch every penny out of it. Not just go, oh, well, we can just do $20,000 of home repairs and then just, you know, hang out and let these student loans hang around. If you do what she's saying and you really put off those home repairs, those light fixtures,

all the things, even the ugly bathroom, you keep that ugly tile in there. You don't have to remodel the whole bathroom and gut it to fix a leak. That's right. Just fix the leak. And I know it's tempting to justify it in your mind and go, oh, but if we're going to do it, let's do it at the same time. I hear you. I hear you.

I have that voice in my head too. Home repair girl. But listen, you don't have the money to do it. Let's do it at the same time. I hear you. I hear you. I have that voice in my head too. Home repair girl. But listen, you don't have the money to do that. That would be nice if you had the money to do that because you have this debt. You actually don't have the money to gut the bathroom and do all the nice to haves at the same time. So what you're going to do is you're going to make that money go as far as you possibly can, like Rachel said, and you're only going to do the home repairs that you must do from a health, safety type of standpoint in order to live in the house, even if that bathroom is ugly. That's right.

Just until you get your student loans and debt paid off. And here's the thing. Let that ugly bathroom motivate you. You walk in there, you see the lime green tile. You're like, this is why we're paying off our student loans. This is why we're doing this our student loans and joseph what's hard what we just outlined for you it's again it's easier said than done because now emotionally you and your wife both have to say oh no but we moved into this house knowing we'd have

to do repairs and we were going to do repairs in x y and z time and we just pushed your timeline by about eight months so it's a hard reality pill to swallow because your expectations are now changing. But I would rather you guys have no debts. You're not paying more interest on the student loans, all that. You're out of debt. You actually have cash in the bank, so this home could be a blessing rather than a curse.

And then you wrap back around and say, okay, now let's fix what we need to fix and what we want to... And that's being an adult, right? Dave says all the time, adults devise a plan and follow it. Children do it, it feels good. It feels good to get the new bathroom.

It feels good to do the repairs on things that are just cosmetic, but hold off. And it's what we were just talking about. It's a season. It's a season of sacrifice. We're not saying have an ugly bathroom forever. We're not saying drive a terrible car forever. We're just saying it's a season while It's a season of sacrifice. We're not saying have an ugly bathroom forever. We're not saying

drive a terrible car forever. We're just saying it's a season while you're going to prioritize this debt that's dragging you down and stealing your income so that once it's gone,

you can do all the home repairs you want to that you save up for in cash. You can get a nicer car that you save up for in cash that has no payment dragging behind it. And you will experience

that car, that bathroom, whatever, completely differently when there's not all this debt attached to it. And that's what we're trying to help you do. Short term. It is a sacrifice, but it's a short term sacrifice for a season. And just know this is our why. At the end of this, we're going to save up and do awesome home repairs that we're going to be really proud of.

And they're paid for in cash. This is The Ramsey Show. I'm Christy Wright and joining me today is my very good friend and New York Times bestselling author Rachel Cruz. We're taking your calls about life and money, time management, overwhelm, whatever you want to talk about. We are here for you. It is Fun Friday, and we want to talk. Give us a call, 888-825-5225. And we're going to go to Sandy in South Dakota. Hey, Sandy, how are you? Good. How are you?

Good. What's going on? All right. So I just finished residency, so I start my first real doctor's job Monday. Congrats. Awesome. Thank you. Thank you. Thank you. So my salary is going to be $200,000. And then

there's, you know, bonuses and all that later. But I am currently in debt $287,000. The all federal loan debt. I do have $5,000 in credit card debt, but with no interest. Um, and I plan on just paying that off like right away, my first paycheck and 8,000 and savings because I saved up, um, I saved up, I saved up to 12,000 total because of my move and the fact that I have like two months off between residency and my next job. So now I have like 8,000 left of that. So my question is, do I stick to the public service loan forgiveness that I'm currently on because I'll be out of VA hospital? I have 27 out of the 120 payments towards it, you know, with the

possibility of paying a lot less of my loans if I go through that route for 10 years. But the issue is, if I don't stay at a nonprofit hospital or at the VA, I will lose that. Or do I end up just paying it off in, you know, three to five years aggressively that way with 3.5 interest if I refinance through SoFi. Yes. Well, number one, congrats, Dr. Sandy. I'm so excited for you. Here's, yeah, so with these debt forgiveness programs, a lot of them really cause you to be handcuffed to something, right? You're still in debt in a different way.

And you're not having the freedom to choose a different spot. So if you wanted to leave the VA hospital, like you said, you lose it all. So what you're doing is you're kind of giving power to someone else when it comes to your money and the debt versus you saying, I can just clean this up and I can clean this up quick because the great awesome thing too, Sandy, is 200K you're starting out, which is amazing. So number one, I would not do the debt forgiveness program. I would pay this off so that you're not attached to something for 10 years of your life, not

just the debt, but also the career and where they're making you work in that instance. And I mean, even with the 5K and credit card debt, I love that you said we're going to just pay that off um you're going to have to have a lot of discipline sandy because you are about to make two hundred thousand dollars and there's a thing they always say is doc itis right you go out and get a nice car you're making all this money and you're done with school you're ready just to enjoy life well i plan to drive my Mazda 3 until it dies.

So Sandy, just looking at the math, I'm like, you could be completely out of debt in 18 months. If you lived on like $30,000, $40,000 a year, which people do all the time, and you just sacrifice. Do you live in Sioux Falls? Is that where you are? That's where my new job will be.

Okay, which is amazing, too. I'm like, that, from a cost-of-living standpoint, you're not in Manhattan. You're not in San Francisco. You're in a great place to literally live on nothing, Sandy, for 18 months, two years. And you have almost $300,000 in student loan debt gone. I mean, I look at the math. When I first heard you say $287,000, I was like, oh, no. But then you said, I'm going to make $200,000.

I was like, brilliant, perfect. But you have to have the discipline, Sandy. But you can do this. You can absolutely get this debt knocked out. And then the beautiful thing is once that's done, you have $200,000 that you're going to make in the next year. That's yours. So what I'm afraid of is like once I refinance and don't have my government loans anymore,

I'm scared. Like, what if I lose my job and then I'm stuck with the payments? I'm forced to pay it. Where I could just keep the government federal loans and don't refinance it. What's the refinance? What's the rate? What would you get difference? It's at 3.5%.

Okay, and you would go down to what? No, sorry. So the government is about 6%. Okay. And so I gave you 3.5%. Well, honestly, Sandy, the interest stuff isn't even that big of a deal because it's not going to be that long.

Well, and there's no sign that you're going to lose your job. That's a scarcity mindset, that out of nowhere you're going to lose your job. We could sit scarcity mindset that like out of nowhere, you're going to lose your job. Like we could sit here and do what if scenarios all day, but you have absolutely no evidence that you have any reason to lose your job. So we're just going to go based on what you know today, which is you have a job and you're making good money. And I wouldn't get all twisted up about the interest, honestly, because again, if we were

talking about eight years of this, then yeah, that's something. We're talking about 18 months or I am. I'm 18 months. So it's not, it's not even going to really make that huge of a difference over that short period of time. Yeah. Sandy, you can do this. It's going to take the discipline for the season, just like we're talking about, but it's going to be worth it on the other side of this. When you have this incredible income and you're not having to make those payments. The thing that's interesting though, Rachel, that I think some people miss, and we talk about this all the time, when we talk about money, we're not just talking about money.

We're talking about what money can do for you. The options, the power, the control, the possibilities, the future that you have. Because when you have money, you get all kinds of options. When you have stuff, you don't. So the reason that I love that we want Sandy to get out of debt so quickly with her taking control of all of it is because then she has options. If you keep doing this government program, you have no options and you are in debt just in a different way. It's not financial, but you're indebted to them and

you're stuck with them. You have no options, no power, no control. And we want you to have all the options, all the power, all the control. That's why we teach what we teach. So you got this, Sandy, and you call back when you're debt-free because i want to hear your debt-free scream all right we're going to go to trey in ohio hey trey how are you i'm good how are you good how can rachel not help oh i was just i'm curious uh so i'm 25 years old uh right now I'm living on a friend's couch for $300 a month. I make $45,000 a year. Me and my girlfriend just broke up.

I kind of been thinking. I discussed it with my roommate or whatever, and he told me I could stay for a year and build my money. The only debt that I have is my vehicle. I have $5,000, um, and, uh, savings. I did have upwards, uh, I think it was nine, but I paid the car down to $3,000. And then I figured I would leave 2,500, um, in my savings kind of for backup. Um, and then I still have my paychecks coming in on my checking as well so that savings wouldn't be touched

and I could give as much money as possible toward that car payment a month. I was just wondering the best possible way to save with having that $250 a month car payment and me making roughly $2,500 a month. I was just kind of trying to develop a plan here. Yeah, absolutely. Um, okay. So Trey, you, you owe 5,000 left on your car, right? I owe $3,500. Okay. Um, are you on a budget? Right now, I just am. I try to do 25% of my paycheck into my savings each week.

That's what I'm trying to do. I have an emergency fund account with like $300 on it. Every week, $50 goes into that out of my paycheck. And then I have $5,000 in savings. Okay. So, Trey, I want you to do a very, very detailed budget,

meaning you're going to list out everything that you spend money on. So, we're going to talk about, we're going to do some giving, possibly some savings. We'll talk about that in a second. And then I want you to list out all of your bills, okay? Put dollar amounts next to each of those. Now this is everything from food, from your $300 of rent that you're staying with your friend, to insurance, cell phone, I don't care. Everything that you pay for, I want you to list out. And the goal here is for

your income every month that's coming in, that $2,500 minus all of those expenses equals zero. So every dollar you have is going to a category. So here's the deal. You make $45,000, Trey. I'd leave your friend's house. I'd go run an apartment. You can have some dignity as a man. You got this.

And then you're going to start paying off this car because you only got $3,500 left on the car payment. You got this. You got some savings. Throw all the savings at the car. Leave $1,000, though, for an emergency fund. Go rent an apartment. Do that budget. And we're going to sign you up for Ramsey Plus.

So stay on the line, Trey. We're going to give you part of our free subscription of Ramsey Plus. That's good. He's got what he needs. He can do it. He can do it. He can do it. This is The Ramsey Plus. That's good. He's got what he needs. He can do it. He can do it. He can do it. This is The Ramsey Show.

Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.