The Ramsey Show - App - Pay Off the House! (Hour 3)

Episode Date: November 16, 2022

Kristina Ellis & George Kamel discuss: Reducing investments to pay off the house faster, How to better hit your money goals, What to do with money from a pay raise, Why you shouldn't get whole life insurance, Going to school while paying off debt. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 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 Paws Moving and Storage Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm your host, Christina Ellis, joined by my co-host, George Hamill. Give us a call, 888-825-5225. First up, we've got Brian calling from Greenville, South Carolina. Hey, Brian, welcome to the show. Hey, guys, thanks for taking my call. Thanks for calling. How can we help? So I'm working through baby steps, um, four, five, and six. I'm contributing

like 21% to my 401k, but I want to know if I should back that down and tackle the house. Well, how much do you have left on the house? Um, I just bought it two years ago. I owe 192. What made you decide to go with 21%? That's very specific. So I put in the 15% that Dave recommends. My company matches 4%. And then every year, they automatically bump up my contribution 1%. So I guess I'm contributing 17% myself, and then my company matches 4%. Oh, okay. Can you stop the automatic upgrade in your 401k there?

Yeah, I can. Okay. Yeah, I'd bump that back down to 15% until the house is paid off, and then you can go hog wild. So should I back mine down to 11%? No. You'd go to 15% of your income, regardless of what's happening with the match.

Okay. And do you have kids? I have one. Okay. Are you saving for college? Yeah. I started a 529 for him a year ago. Awesome. Great. Well, you're doing awesome.

I mean, you're pretty close to being right on plan just with that little 2% change. I mean, you're right on track, and I love your motivation to pay off the house. I love that you're getting so fired up. What's your timeline to pay it off? Yeah, I got a plan for about eight years. Oh, I think you can do better than that. What's your income? My base salary is $60,000, but with overtime, I do close to $70,000, $72,000.

That's awesome. And you've got some margin to put on the house once you get that 2% back? How much are we talking towards the extra towards the mortgage? Right now I do minimum $100 a month, but I get yearly bonuses through work that are a few thousand dollars. I have a couple side hustles, and any extra money kind of goes towards that. I love it. And your income is going to go up over the next eight years.

Yeah, hopefully anyway. Yeah, you're a sharp dude. And so that's going to speed up this payoff. So absolutely, I'd bump your contribution down to 15%, keep saving for college, and then any extra margin you can throw, put that onto the mortgage. Way to go. Yeah, way to go. You're definitely in a really good spot,

and I love that you're just walking out the example of how to do the baby steps well, and I also love the match. That's just such a great thing. We love a match around here. We love a great match. All right, next up we have Luke calling from Indianapolis, Indiana. Hey, Luke, welcome to the show. Hey, guys.

Thanks for taking my call. Hey, thanks for calling. How can we help? So I feel like my budget, like my margins each month, I'm not quite achieving any of my goals. I'm trying to be as aggressive with as I can with my student loan repayments, but I also have a couple other things I'm saving for. My truck has not been super dependable, so I'm saving to replace that. And then I'm also getting married next year, so I'm kind of saving for those expenses and moving out and stuff.

And so I'm looking at my account each month, and I'm not really getting anywhere because I feel like I'm spreading it all too thin. So maybe you guys could help me prioritize. Yeah, well, congrats on getting engaged. That's exciting. You've got some cool things on the horizon. So how much debt do you have? Thank you.

Right now I have about $19,000. Okay. All in student loans. All right. And what's your income? About $50,000. All right. And when you're doing your monthly budget,

do you think it's a spending problem? Is it because you're saving toward the car and the wedding? Where do you think the problem lies? Is it an income problem? I'm not, it could be an income problem. I'm not spending anything. And part of it could be, maybe it's, maybe it's not necessary to save as much as I think, like for the car and for the wedding, but, um, like I'm saving pretty much 50% of my income goes towards my debt. So I live off of the rest and, you know, I'm saving about, I don't know, four or $500 a month. And I guess I'm just not sure. Should I make less aggressive payments on my debt and save just kind of for this season?

Is this truck on its last leg? You said you're trying to replace your car? It's hard to say. I've had to take it to the shop pretty much every month. Nothing major, but $150 here, $300 here. And that's also kind of slowing down my saving. What do you do for a living? I'm a teacher.

A teacher. Okay. And are you doing any sort of side hustle or anything to make additional income? I'm not. The primary reason is I teach band, and so I have a lot of after-school commitments, a lot of extracurricular activities. So I don't exactly have a normal teacher schedule. Yeah, no band can get pretty intense.

What about off seasons? Do you have, you know, seasons where you're not, you know, having after school hours with the band? Yeah, my summers are definitely available. I've worked over the summers in the past and been able to make, you know, three or four thousand dollars in a month or two, like June and July. Yeah, I think, I mean, right now, I love that you're taking 50 percent of your income and throwing it towards the debt. I think right now it's just that season where it's a challenge. You got to be gazelle intense. You got to kind of go through the slog. This is the not fun part of it. But you

know, it's going to get you to a spot where once that $19,000 is out of your life, once that debt is gone, that money is going to be able to really go towards savings. And you're going to see a lot of progress. I know it's frustrating right now because you don't see that savings progress. You're going, oh, man. But it's going to get there. I think it's just kind of one of those seasons where you got to stay the course and keep pushing through. Do you know how much you are having to pay for this wedding? Have you guys talked about with the families? Who's paying what? Do you have a clear number?

Yeah, so the family is able to contribute pretty much everything for the wedding. I'm paying for the honeymoon, and then I'm also wanting to save some money just for like the first month rent and the deposit. And I have no furniture. So I live at home right now. So I mean, I'll be moving out for the first time. So I've also been saving a little bit for that. Awesome. Well, it sounds like you're doing all the right things. I'd get a clear number of what I'm going to need for all those wedding expenses. If that's $4,000 for a honeymoon, plus, plus, plus, then we backtrack that out and go,

all right, every month I need to save $400 to have $4,800 12 months from now. And so you start to do that kind of math and that gives you your goal. And if that means I need a side hustle, then go get you a side hustle for a season. Yeah. And I think that's just important to remember that it is for a season. You know, you're that marriage, and it's going to feel so good to do it debt-free and to be really seeing that traction with your wife as you're able to throw that money into savings. We'll be right back. Give us a call, 888-825-5225.

This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី if you've gone through fpu chances are it's because someone in your life lit a fire under you mom and dad gave it to you as a gift. Your pastor offered it at your church or that one friend wouldn't stop talking about it. So you finally took the class, started working the baby steps and now everything's different. Your entire future changed. Now you can light a fire under someone else. You can give someone you care about

Financial Peace University and share the same hope you've discovered with money. And with Christmas coming, this is the perfect time to do it. And when you give FPU as a gift, they get more than just a course. They'll also get the premium version of every dollar so that they can start living on a budget. Plus, they can even join in on group calls with our financial coaches, which I've been on those calls. These are amazing. This Christmas, give the people you care about a gift that actually matters. And that's hope. That's freedom. To buy FPU as a gift,

go to ramsaysolutions.com slash give FPU. That's ramsaysolutions.com slash give FPU. George, see, we get some interesting messages on Instagram. Some of them are a little wild, and some of them are actually pretty eye-opening. And you got one recently. Our fans like to send me this stuff because I know what riles me up, Christina. And Tosh sent me this. She got an email from her credit union in California,

and it's a new product from the credit union. It's called the Making Memories Loan. Oh, gosh. So let me read you their marketing copy here. They have beautiful photos of graduations and weddings and families having a great time. And it says, You can focus on enjoying the occasion.

Altura is there to help with the expense. Oh, what a blessing. It goes on to say, Whether it's a wedding, family reunion, graduation party, or any other type of celebration, Altura can help with the Making Memories loan. It's quick and simple, great low rates, no collateral needed, up to 30 grand with just

your signature. What a gift this is from the credit union that has a whole bunch of strings attached. We'll put you in debt for years. It's lovely and pretty and light and airy. What gets me is this, like, they're going to pull at our emotional heartstrings to go like, do what's right for your family, even if you're broke, so that you can make a memory. That's just kind of gross, actually. It's extra gross. You know, it's funny. I was listening to the radio the other day and I heard a commercial for a cash advance company and the

language around it was similar. It was really kind of disgusting. They were like, you can take control of your finances. You can be the person in your family. You're struggling with bills. You're struggling to do things. If you take out this loan, you're in control. You're in charge. At 200% interest. Right?

Yeah. I'd like all companies to be promising that. You are not the company. Well, I expect that from a payday lender and cash advance folks. I don't expect it from your local credit union. Be better. Be better. Be better.

Unforgettable moments. Just the flowery pretty language. It's just sad because you know somebody's falling for that. You know, the reason they're doing it is because for someone that worked. Yes. Don't be that someone. The memory comes with payments every month with interest. And now you get to relive that memory every month when you send that credit union your payment.

Angrily going, well, I guess there goes that vacation. Yeah, that's painful. All right, let's go to the phones. Up next, we have Paul calling from Seattle, Washington. Hey, Paul, welcome to the show. Hello. Hello to the Dave Ramsey team. Really glad for you for taking my call.

I appreciate it. Yeah, thanks for calling. How can we help? Yeah, I have kind of a happy problem. I probably know what you're going to say, but here's where I'm at. Recently, I was very fortunate to land a job that pays significantly higher than what I was making previously and with a different pay structure. And I have a mortgage and with the added income, I'm wondering how I should think about putting towards my mortgage versus adding more towards my retirement.

Yeah, that's my question. Love it. Congrats on the pay bump. That's great. So what is your income now? Yeah, right now it's an all cash income, about $765,000 a year. Whoa, $765,000 a year? What do you do for a living? I'm a software engineer. In Seattle. All right. I could probably guess who it's for. That's very impressive, man. Good for you. You must be a very

good engineer. I don't know about that, but yeah, I consider myself lucky to have landed the job. I love it. Okay. So what is your mortgage? What's left on it? It's 1.3 million is left of my mortgage. It's a 2.6% interest rate. I pay about 6,500 per month. And to get the lowest interest rate, I opted for a seven-year ARN, which was offering at that point the lowest interest rate. So there are six years left on the ARN. And that could change. That is correct. Okay. Do you think you could pay it off in six years?

I think so. Six years, it might be tight, but I think I should be. With the new income, I should be able to. Yeah, because that's doing the math here. That's throwing $216,000 of your $765,000. Obviously, high taxes there, so I don't know what you're taking home out of that $765,000. Probably closer to $350,000?

Yeah, $380,000, $390,000 is what I take home. Okay. Yeah, I think that's doable. Do you think you could throw $200,000 a year at this thing, I think that's doable. Do you think you could throw 200 grand a year at this thing? I think so. Yeah. I'm just wondering, should I use some of that towards my, I'm already probably maxing out my 401k, Roth IRA, mega backdoor Roth, HSA, FSA. Oh, that's amazing. I can do more towards like with a traditional brokerage account. So should I do a little bit of that or should I just go towards the mortgage?

I would cap it at 15%. And so whatever gets you there from that, you know, obviously that's a giant number from 765 and you take 15% of that, that's 114 grand. And so if you've already maxed out everything and there's still money left over to get to that 15%, you can throw that chunk in a taxable brokerage account to kind of finish it out. I see. Do you have any kids? Yeah, I have a one-year-old. Okay. Have you started a 529?

Yes, I have. Okay, great. You're just a rock star. I'm just so excited for you. I'm like, this guy, I mean, are you already a millionaire? I don't know. My house is probably at about $2 million. So adding all of that up and some of the stocks I have from my previous job, probably close to, yeah, I'd say so. Wow. Could you cash out of those stocks at this point? I can. I will have to pay a lot of capital gains, though, because I did have quite a lot of gains on those stocks. This may be a silly question, but I just want to ask it just in case. You don't have any other debt, do you? No, no other debt.

I love it. Yeah, I mean, I would work with a tax pro to look at the kind of tax structures and what you would owe if you did certain things. But it may be really cool to cash out of some of those stocks, maybe over a period of time, so that you don't have as much of a tax burden and pay off the house. So that's so cool. That's amazing. There's one more thing about my situation. So I'm an immigrant in this country, I'm on a work visa. So just thinking about like a worst case situation. So if I lose my job and I'm not able to get another job, I might have to leave the country. Does that change your answer at all in terms of paying off mortgage or versus putting towards the retirement? No, it doesn't.

Because if you had to leave the country for some reason, I would sell the property, leaving you with a giant chunk of money. And all the money you're putting into that mortgage is now built in to the sale of the home. You're going to get it all back in equity. I see. Okay. Yeah, you're doing great. This is amazing. You're going to be able to leave quite the legacy to your child and build quite the nest egg. You're killing it. I had to almost blink for a second when he said his income. I thought he said $75,000. And then I was like, wait a minute. Well, those Seattle software engineers, Christina, they make buku bucks. And of course, in Seattle, it's very expensive. There's high taxes. And so it's kind of like a Silicon Valley level situation. But man, I'll take $765,000 even with high taxes. That's impressive. Great way to build some wealth. I love the motivation. We've had so many people call today about wanting to pay off their house and getting

excited about paying off their house. But I think it's still important to kind of have that discussion of how important it is to still save for retirement. Of course, you know, the last caller, he's being aggressive with retirement still, but there's been some calls where people are tempted to stop retirement investing just to pay off the house. What would you say to those people who are kind of feeling that pull to stop investing? Well, I think we have to have a long-term mindset and think about, I want to be able to retire in 20 years

and not have my kids have to cover the bill. I want my kids to not have the burden of student loans. So let me make sure I invest 15%, my kids' college is taken care of and the house will get paid for. And if it slows it down, that's okay. We gotta think long-term. Yes, we love the motivation.

We love how inspired you are, but we're in it for the long game. We're trying to- There's more to life than just paying off the house. Right, we want you to be baby step millionaires. And that means focusing on all areas, following the steps, step-by-step. We'll be right back.

This is The Ramsey Show. I'm Christina Ellis, joined today by my co-host, George Camel. We're taking your calls at 888-825-5225. Next up, we have John calling from Los Angeles, California. Hey, John, welcome to the show. Hi. How can we help? I had an insurance question, life insurance.

I'm 70 years old, and I have a term life insurance policy that's good until 2025, and it's costing me about $200 a month. And my financial advisor said that I should get a whole life insurance now while I'm still 70 instead of waiting until I'm a couple years older. And I've already applied for it and I can get it, but it's going to be like $1,165 a month. And I was just wondering if it would be better to hold off, let my other term life run out, and then try to get another term life or to try to get a whole life. Did your agent quote you for another term life or did try to get a whole life. Did your agent quote you for another term life or did he just offer you whole life? They just offered me whole life. Can I tell you what's

actually going on here, John? Pardon me? Can I tell you what's actually happening here? Yeah. Your financial advisor is just a whole life salesman. And the reason he's pushing whole life is because he's making a giant spread on that premium. And he's going to make very little comparatively on a term life policy. Yeah, the fact that he didn't even offer you or quote you the term life is a pretty big red flag. So tell us a little bit more about your financial situation. Do you have any debt? I have a house payment. That's the only thing. What's in retirement?

I have Social Security and a retirement from the IBEW. Okay. What's that amount to? It's not a lot. It's only about $3,800 a month. Okay. So the idea with term life is that by the time it's over, you're self-insured and you'd be able to cover any costs. So if you don't have that ability to cover those costs, I would still steer you to another term life policy, even though it's going to be expensive. But it still won't be nearly as expensive as that whole life policy. Right. That's what I was thinking. I'm just, he's trying to tell,

and the whole life that they're talking about is $300,000, and the term that I have now is $500,000. Yeah, it's because whole life sucks, and it's super expensive. And as an example, a $250,000 policy might cost you $260,000 a month on your premiums with whole life. But with a term life policy, it might cost you $13 a month. So it's astronomically cheaper for the same amount of coverage. And the money you save, you can invest the difference if you've got it. And whole life is terrible because it tries to do two things at once. It tries to be

an investment vehicle and an insurance vehicle, and it ends up not being great at either one. So if I'm you, honestly, in your shoes, I'm firing the financial advisor and saying, hey, it's been great working with you. Sayonara. And you can go connect with a better financial advisor called SmartVestorPro at RamseySolutions.com who isn't going to steer you towards these crappy whole life policies. So wishing you the best, John, with these decisions, but run far away from this. Yeah, that's... It just breaks my heart when financial advisors who you go to because you trust them with your biggest life decisions and your biggest money decisions, steer you to these crappy products. Also, they can get a bigger cut. That's just sad. It feels like such a cash grab. But thank you for calling. I'm glad,

you know, you did have that gut check that made you go, this just doesn't feel right. Thank you for that, John. Hopefully we talked him off the ledge. Up next, we have Julie calling from Chattanooga, Tennessee. Hey, Julie, welcome to the show. Hi. So I'm going to jump right in. So I'm working two full-time jobs right now and physically just kind of feel like I'm killing myself. So I'm wondering, does it make sense to pay for a certification and go through some training that would allow me to take an online job, even though I'm still dreaming in debt and all of those things? Well, how much debt do you have? About $60,000. Okay, and what kind of work are you doing right now with these two full-time jobs?

So I am a teacher, and then I work in a factory at night. Wow. You are hustling. Those are not easy jobs. No, no, they're not. No wonder you feel tired. What's your total income from those jobs? My total income is about $60,000 with those two.

So if you were to go back to school, what would you want to study? Well, I have a degree already in business administration, but I was thinking if I go more for a certification not in a college, either something in accounting that would allow me to do that or something in web development, maybe back end web development. I mean, that's definitely a possibility. I mean, have you looked into jobs that you could get right now without an extra certification that are outside of teaching? Well, the teaching job is the one that I really want to hold on to. It doesn't pay much of anything, but it's kind of what makes me human.

So I want to hold that. Hey, we need more people like you in the world. God bless the teachers. As a mother, I am very concerned about the education system. So thank you for what you do. Well, thank you. So this extra job, are you looking at another full-time job that's basically online? Yeah, maybe full-time. I think part-time I could probably do, but it would slow down any process of getting rid of debt for sure.

Yeah. Have you looked at the price of the certification programs? Not really, no. I've looked just a little bit here and there um but it would take a lot of research to figure out you know get past just all the advertisements to get to what's real yeah well i know that there are some pretty affordable ones right now and some are even free i know that a lot of companies like i believe google's got a really cool program right now where they'll train people for jobs that they're that they have in demand and they'll train people for free.

So, I mean, with a business administration degree, I mean, there's a lot of possibility right now to look into potentially a very low cost or free program that could yield a pretty cool job. Yeah. And I'm going to give you, Julie, Ken Coleman's Get Clear Career Assessment to help you figure out exactly what the path is because you mentioned a few options there. And I want you to not just do the one that pays the most, but do the one that you're also passionate about.

And I think you can make great money doing the thing that you love. And that's what our friend Ken teaches every day. So we're going to give you that. It'll take you about 20 minutes to go through, but that will help steer you towards the right direction. What kind of debt is this, the $60K? So it's a pretty even three-way split with student loan, a car, and then just credit card, you know, junk debt. Okay. Have you cut up the cards?

No, but I don't use them. Then cut them up. That's a great way to never be able to use them. It can become a crutch when you fall on hard times and you go, well, at least the credit card companies are there for me, except they're not because they're there at 22% interest, keeping you in debt longer and longer. So cut those up. Would you consider selling the car? Is it worth more than you owe? No, it's not.

So I actually just bought out my sister's lease, which was the cheapest way to get a car because our other car didn't have air conditioning. We'd fix it several times and then it goes back out. We were just kind of draining money. Um, so I'm not sure that there's really a better option for me to go for right now. So what's left on the car loan? We just did that. So it's right at 20. Okay. When you say we, who was involved here? My husband. Okay. Is his income factored into this? No, it's not. So is his income not

helping pay down this debt? Yes and no. We're not organized. We're all over the place. And so we still feel like we're living paycheck to paycheck, pinching the pennies. Yeah, that's the real crisis here, Julie. I'm going to be honest. I'm going to put you guys through Financial Peace University on us if you're willing to do it. Is he on board or is he kind of skeptical towards this whole thing and going, well, that's your debt, not mine? What's his attitude? Well, we share our finances. We share the finances, but I'm really the one who manages it. And so I think it's, he doesn't feel all the stress that I do because it's easier for him not to look at it as intently as I do.

So you're carrying the brunt of all of the stress and burden and two full-time jobs, and he's like, well, she manages the money. I guess. Oh, Julie, Julie, Julie. All right, we're going to gift it to you. I hope that you guys go through it, have a serious conversation and go, I'm not okay. I'm scared.

I'm tired. I'm burnt out. I need you on board in this marriage. And if he's not willing to do that, we got bigger issues and counseling needs to get involved here. Yeah. I'm so sorry, Julie. That's tough. And y'all are just running so fast right now, taking the time to, you know, slow down, get educated, get on a budget. That alone is probably going to save y'all so much. So hang on the line. We'll get you the Get Clear Assessment and Financial Peace University.

We're cheering you on. This is The day that the Lord has made. Let us rejoice and be glad in it. Psalms 118 24. Give every day the chance to become the most beautiful day of your life. Mark Twain. That's beautiful. Beautiful reminders there. Yeah, sometimes you just need that little reminder. All right, let's go back to the phones. First, we have Louis calling from Miami, Florida. Hey, Louis, welcome to the show. Hi, guys. Thank you for having me. Hey, thanks for being here. How can we help? Well, I'm in a financial crisis and actually I'm anxious and I'm scared. We sold our home eight months ago, and we had proceeds of about $70,000.

But because our debt-to-ratio is upside down, we've been finding ourselves dipping off of that money and paying bills. And we're down to $37,000 to buy a home, and we're scared because we're still upside down in our debt. Well, tell us about this debt. How much debt do you have? Well, together with the two vehicles that I have, I have about $76,000 in debt. Just all vehicles? No, that's just $33,000 is credit cards and small loans, and the rest is for the two cars. That's $76,000 the total. Correct.

Okay. What is your household income? Household income is about $115,000. Okay. I mean, looking at the numbers here gives me a lot of hope, But I think part of it is, have you continued using the credit cards? Shame on me, but yes. Well, that's okay. But starting today, I think we need to cut them up because it's a crutch that's causing you to go further into debt.

And on top of that, you're depleting the money. So you're using the credit cards, but you also said you're dipping into the proceeds from the home sale. That's correct. And is that going to just cover the bills, or is there spending habit issues as well? Well, it's mostly covering the bills from spending on credit cards and small loans and things like that. Now, what are the cars worth? The cars are worth, actually, coincidentally, I went and appraised one of the cars today, and they're actually giving more than what I owe on the vehicle. This is a great situation. If I'm in your shoes and you're feeling that level of anxiety,

like you can't crawl out of this thing, I would sell the cars and purchase something, a very reasonable, affordable used car with cash with the savings that you have. And with the proceeds from the, you know, the profits from the car sales. Okay. Because that would leave you with how much debt? If you got rid of all the car loans, you just had the credit cards and personal loans, that leaves you with 33K? That's correct. And frees up the payments that you were making on those car loans. Now making $115,000 with more margin, how quickly could you pay off $33,000? Right. Makes sense. You feel that energy that we just created there,

the momentum? Yes, you did. And so I think that is your next step. But beyond that, we have to change our behavior because selling the cars is a great shortcut. It's like a life hack, right? But we have not touched the behavior of what caused us to spend. And so part of that is the debt payments for sure. But part of it is we got to get on a budget. We are not eating out.

We are scared to our, we have got to get out of debt. It's the last thing we do. And I think that's part of the reason you've called today. I can hear it in your voice. It sounds like you've had that I've had it moment. It may have just recently happened, but it seems like it's happened. Is that correct? Oh, no, that is definitely correct. I've not only had it, but I'm almost to the scared point because this is the money that we had to buy

our home. We're renting now, waiting to find our home, but the money's depleting pretty quickly. Well, and that's when a lot of times real life change happens, when people hit that spot where they're like, we cannot live life like this anymore. It is time to change. That's when real change happens. So I know today is scary, and I know that you feel that palpitation in your chest, and it feels nerve wracking, but I know today is scary. And I know that you feel that palpitation in your chest and it feels nerve wracking. But I know it's hard to hear this, but that's a good thing. Because today is the day that everything's going to change. Today's going to be the day that you look back on when you're on that debt-free stage and you say, that's the day that everything changed. That's the

day I made a decision. I stopped spending on credit cards. I changed my mindset. I got an FPU and I was all in. And Lewis, I don't want to be the bearer of bad news here, but you're not ready to be a homeowner right now. And so I know you see this pile of cash and you go, well, that's for the home. Right now it's to pay off the debt because that home's going to own you if you jump into it right now. And so if I'm in your shoes and you want to follow the baby steps, you want to be gazelle intense, here's what you're doing. You're selling both cars, and hopefully the profits from that can get you used cars. If you need to dip into some of that savings to make it happen, that's okay. But the rest of that money, you might have $33,000 left in savings or $34,000,

and you can clean up the rest of that debt this week. Right. Think about that. You're in a position where by the end of the week, you could be completely debt-free with no payments and about a thousand bucks in the bank. And yes, it feels like, well, we're moving backwards. No, my friend, you are moving forwards because you are not paying interest. You don't owe anyone anything. And now all of that 115,000 can help you build back up your fully funded emergency fund, which means you're never going

back into debt again. And then we can start saving back up for the house. So it may be three years before you're ready to jump into a house, which I know is frustrating. But man, you're going to be in a different place financially by the end of the week if you follow this stuff. Lewis, how does that feel? That makes a lot of sense. Well, I want to equip you. I know we can't do it all on a radio call. I'm going to gift you one year of Financial Peace University. I want you to watch those videos with your family, all nine lessons, get fired up, use the EveryDollar budgeting tool to make a plan for every single dollar coming in. And man, please call us back when you're debt free. We always love the where are they now stories, Christine. We never get to hear it. And I can feel the fire that Lewis has got. And we

want to keep that going. So hang on the line. Austin's going to pick up. We'll gift you one year of Financial Peace and EveryDollar premium. Yes, I'm want to keep that going. So hang on the line. Austin's going to pick up. We'll gift you one year of financial peace and every dollar premium. Yes, I'm excited to hear that success story. All right, we've got time for one more call. We've got Hannah calling from Peoria, Illinois. Hey, Hannah, welcome to the show. Hi, guys. Thanks so much for taking my call. I just had a quick question about where to look for scholarships. I have the opportunity to start a bachelor's program in January with my employer paying pretty much all of the tuition. Amazing. It covers things like books or fees or anything like that. Okay, that's great.

That's amazing that you got your employer to cover that. That's fantastic. And you can still make money while going to school. So that's fantastic. Yeah. millions of scholarships out there and it takes information about you and helps match you with scholarships that specifically fit you. So that's where I would start is looking at databases. I'd also look at the school that you're going to. So that's awesome that your employer is, you know, covering tuition, but see if the school has any scholarships. Have you checked that yet? Not yet. I just got the news that I had gotten accepted as one of the 55 that they're offering this to. And so I got that call earlier this week. is to immediately start thinking through how can I pay for the rest of this without debt? That your first thought is, you know, what scholarship can I find?

How can I hustle? How can I figure this out? So that's outstanding. Yes. Do you know, is there any... Well, this is actually my... Yeah, keep going. This is actually going to be my second bachelor's, and I did the first one with about $90,000 in student loans

that I'm still working on trying to pay off. So I definitely do not want to be going back into any more loans. Yes and amen. We just said debt is off the table because I know what that's like. Never again. Yes. Oh, that is so cool to hear, Hannah. Well, we're cheering you on.

And it's amazing what happens, Christina, when you just decide, you pre-decide that debt is not an option. All of a sudden you get real creative and it causes you to be patient and do your research and be intentional and look for the scholarships and work. And all of these things combined cause you to have that success, to cause you to go to college debt-free. Absolutely. Taking it off the table is just a game changer. And I will say with scholarships, be willing to be patient on the front end and do the research. I think people want to get on Google in about 30 minutes and find a list of 100 perfect scholarships that just apply to them. But it can take some time. You got to do the work on the front end so that you're really applying for the scholarships that fit you best. But I'm excited

for you. That's amazing that you're going to go to nursing school debt-free. I love it. So that puts this hour of The Ramsey Show in the books. If you like the show, please consider subscribing, leaving a review, and sharing it with a friend. Big thanks to all the guys in the booth for running the show, and to my co-host, George Camel, and to you, America, thanks for listening. We'll be back soon. This is The Ramsey Show. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from the Ramsey Show on YouTube. Go watch and subscribe to the Ramsey Show channel on YouTube. Hey, it's James, producer of the Ramsey Show.

This episode is over, but check the episode notes for links to products and services you heard about during this episode. Thanks for listening.