The Ramsey Show - App - Should I Pay Off the House? (Hour 1)

Episode Date: September 29, 2022

George Kamel & Kristina Ellis discuss: Paying off the house, Investing in an HSA, Helping a parent set up their will, Going to college vs. focusing on a small business, Applying for the FAFSA, Selling a car to pay off debt. 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

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the pods, moving and storage studios. This is the Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, joined today by bestselling author and fellow Ramsey personality, Christina Ellis. And we are taking your calls about life, money, budgeting, debt, credit scores, credit cards, how to get out of them, what to do. Instead, we are here for you, America.

The number to call is 888-825-5225. That's 888-825-5225. You know, Christine, I get a lot of questions via Instagram. And they're usually like, it starts like, hey, I got a question. And it's 17 paragraphs. So I want to let all of those people know, call into the show because it's really hard. It's like having a full-on conversation via text. It just takes too long. So call us up instead and we can help you that way. That's a good call.

Yes. And Gia has done that. We appreciate that. In Lincoln, Nebraska, starting us off. Welcome to the show, Gia. Thanks so much, guys. How can we help today? So my husband and I are trying to find out.

We are 25 and 30 years old. We don't have any debt besides our house. We have about $30,700 less. And currently in the bank, we have somewhere around $28,000 to $29,000 in savings all combined. All of that's just liquid cash. So we're trying to decide after our paychecks next month, we would have more than the 30, like we would have enough to pay off our house. So we're trying to decide, should we just go ahead and pay it off and be done and basically just put that extra money that we've been putting towards our house, basically just paying ourselves back and

replenishing that savings? Or should we just keep plugging away on the current plan that we have? Is the 30,000 that you have in the bank, is that your emergency fund or is that money separate from your emergency fund? That is emergency fund included. So we have the $1,000 emergency fund and then we have $18,000 for the three to six month. Okay. So my short answer is no. And the longer answer is no. And here's why. Murphy is going to be knocking at your door as soon as you pay that house off, and the HVAC is going to go out, and then you're going to be broke and have to go into debt to fix it. And so I don't like the idea of you guys draining your emergency fund in order to pay the house off. Now, I know where it's coming from. You guys are so excited, and you see the numbers,

and you go, oh my gosh, you see the light at the end of the tunnel. Is that what you're feeling? It's a little bit of that. And it's also just a little bit like I looked at the insurance, like not the insurance, the interest that we're paying every month on the house. And I'm like, well, we could just knock it off. And then instead of putting that, like the extra money that we were putting towards the house and all of that, we basically would give ourselves like a $2,300 pay raise in a sense, because instead of that extra $2,300 just going to the principal every month, it would just go back in our bank account without the interest payment on top of that. Well, I love that you're seeing that interest and you're going, man,

I want to knock that out because a lot of people, you know, they go, that's not a whole lot, like let's just keep pushing off the mortgage. But the fact that you're seeing that and going, nah, I want to knock that out. Because a lot of people, they go, that's not a whole lot. Let's just keep pushing off the mortgage. But the fact that you're seeing that and going, nah, we want to pay this off, that is great motivation. But as somebody who has had an HVAC and a transmission go out in the same month, I would definitely want to keep that emergency fund. Because like George said, Murphy will hit when you least expect him. And if you only have that $1,000 in your emergency fund, that's great when you're in baby step two. But when you can have that flexibility to have that emergency fund for those type of major issues, it's definitely a lot more comforting and keeps you a lot safer. Yeah. Gia, are you both working outside of the home? Is there two incomes?

Yes. And are they stable? We have a double. Yes. They are both stable. I'm a registered nurse and then my husband works for a furniture company. And then actually within the next year, starting in September, we're looking to actually send him back for HVAC and palming. Awesome. To go back to school. Well, we can split the difference here. What you could do is go down to a three month level emergency fund and use the rest to pay off the house sooner. But that is as low as I would go since you both have stable incomes. So I would do the math on that and go, okay, what's three months of expenses to cover everything that we have on our budget?

And whatever's left, we can use that plus our future income and savings to pay off the house in the next few months instead of six months or whatever it would have been. So how much faster would that get you guys completely debt-free if you went down debt-free? If you went down to three months. So 18, so it would be 18,000 added. So that'd probably take us like the next, we would be debt-free probably in the next six months. But my job, I'm actually going from part-time to full-time and I'm not a hundred percent% sure what my paychecks are going to be completely because I get paid hourly and not salary.

So probably more like four or five months. I know I'll be going. Yeah, so probably something more like that. I just don't know for sure. I haven't been able to get the numbers concrete yet because I haven't gotten that first paycheck yet. Yeah. Well, just listen to that. You're 25 and 30 years old, and in four months, you have a fully paid for house. So you guys are just so driven. And

I love that. But sometimes with people who are driven, like Christina and I are the same way. And we're like, we just want to see it gone. We'll do whatever it takes. That can cause us to make some poor decisions along the way. And so just have your eye on the prize four or five months from now, that mortgage is going to be gone and we're still going to have a fully funded emergency fund and have that financial piece. That's good stuff. That's going to feel so good. And I hope you all come to Nashville and see us. I want to hear you on the stage. I'm excited to hear more about your journey because the way you're motivated, the way you all have fought through this and the fact that you only have $30,000 left and you're 25 and 30, that's so exciting. So I want to hear more about this

story and how you got there because that's just awesome. And Christina, we've been seeing an awesome trend where we have people in their 20s and early 30s doing debt-free scrims saying we paid off our house. Yes. And a lot of those are what we call financial peace babies, meaning their parents went through financial peace and they raised their kids in such a way to give them good money principles and they latch onto this stuff so much earlier. And so we see people graduating college debt free. I hear so many people that come visit us on the stage and they whisper, yeah, we actually sent all four kids to college debt free because of you guys. And we're like, we did nothing.

Yeah. Or they're kids who went through foundations, our personal finance curriculum for high school students. I see a lot of students who, you know, they went through it in high school. They learned all the things that we wished we would have learned in high school. You know, when I talk to adults, they're constantly like, why didn't we learn about basic budgeting when we were in high school? Well, these kids are doing that. And then they're getting out of high school and they're starting out the right way. They're getting that debt-free degree and they're immediately putting together an emergency fund and paying off houses at like 21 and 22, which is incredible. And we also hear people who are in their 40s,

50s, 60s going, gosh, I wish I knew this stuff 20, 30 years ago. And the beautiful thing is, parents, you can give that to your children. And it is your responsibility to teach them these money principles because guess what? Culture is not. Social media is not. And what happens is they end up going hundreds of thousands of dollars into debt because we've taught these kids from a young age, get good grades, so you can go to this college of your dreams, no matter the cost. And by the way, we haven't saved a penny for it because we're broke as parents. And then they walk out of college with hundreds of thousands in debt going, we were lied to.

You guys said this was the path to the best life. Yeah. And here we are feeling screwed. It's painful to see that, but we see that every day. And so even if you're not a parent, if you're just a mentor, if you're somebody in a church who works with young people, have those money conversations. I know they can be kind of awkward, but invest in young people and have those.

Have it early and often and make them listen to The Ramsey Show at 13, and they will hate you now and they will love you later. And that's parenting, isn't it? Hey, more of your calls coming up. Give us a call, 888-825-5225. This is The Ramsey Show. ДИНАМИЧНАЯ МУЗЫКА i'm george camel joined by christina ellis today this is the ramsey show give us a call triple eight eight two five five two two five cody joins us up next in Denver. Cody, welcome to The Ramsey Show. Hey, George and Christina. Thank you for taking my call. Appreciate it.

Absolutely. How can we help? employer provides, it comes with the option of investing it in various funds, just like a retirement, a 401k. Included in those are mutual funds. And I was just wondering, would that be wise to do, or should I just treat the HSA as a savings account? It is absolutely wise to do. I love that. Now, it depends on where you're at in your financial journey. So do you know the baby steps? Where are you at in that? Do you have debt? I guess I'm on baby step seven. Oh, awesome. You got a paid for house. I do. As of last week. That's awesome, man. How old are you? 32. And what's your house worth? $350, $400. You are a rock star, man. Way to go. Thank you. So as far as the HSA, yes. So once you're past a certain threshold in that account, for ours here at Ramsey, I have an HSA with a high deductible health care plan.

So my threshold is once you have over $1,000, you can invest money beyond that. And so do you have that already in your HSA? How much is in there? Yeah, there's just over 1,000. And I think 1,000 is the threshold as well in that plan. Perfect. Yes, you can go in there and select investments. If you need help with that, of course, you can reach out to a SmartVestor Pro. And depending on what's in there, you can match what you're investing in your 401k and do those same mutual funds and just make sure they're diversified across the four types that we teach. Okay. So use the same exact investing principles. Yes. And something Dave Ramsey does himself is he invests in his HSA, but he uses his own money to cover his health expenses and just

lets that money grow. And so it becomes a second kind of retirement and investing vehicle that you can use later in life. Because as we know, your health expenses go way up later in life. Sounds great. Well, thank you very much. Yeah. And you're just a rock star. I love that. Are you coming in to do your debt-free scream? I would love to, but I actually just moved away from Tennessee so that I could kind of get into this situation. Well, hey, we are cheering you on from here. That's amazing. Yes, way to go, Cody. Christina, this is only perpetuating this beautiful theme of young people doing amazing things with money.

Right, 32, paid off house, that is incredible. Live in the dream, Cody. Yeah. Love to see that. And the HSA, it's a great point for all of our listeners out there that it is a great investment vehicle. So not only can you put in money tax-free, it grows tax-free, you can withdraw it tax-free for qualified medical expenses, but there's also the investment side of it too. And I love the strategy you were saying with Dave, where he will pay for the expenses separately to let that build up.

This is my first year at Ramsey and getting to do the HSA, which that's such a great strategy because I've had, I've looked at it and been like, man, I want this to pile up so that when I'm older, it's a lot bigger of an investment, but that's a great strategy. I love that. It's something you can do. Once you get to that baby step seven side, you can really go hog wild. Otherwise it's good to have up to your deductible in the HSA. You're out of pocket maximum. Yep. So that way you have, if it's 7,500 bucks, it's good to have that level in there. Once you're past, you know, your baby step three and you want to start really covering your family

and protecting yourselves, that's a great thing to do. So look into that. I know it's not fun digging into your like health insurance fine print, but it's super helpful to know that you're covered. Yeah, it is super helpful. And it just, it's good to just be on top of it. It's been interesting.

I was sick recently and having a high deductible plan, it really makes you evaluate your expenses a lot more. It makes you go, hmm, do I want that extra test? Do I want that extra thing? We had a call just the other day with someone going, I got billed for all these tests. And so I asked for an itemized and now he's fighting it. So always make sure you know the healthcare services you're getting and verify them. Because when you ask for

the itemized bill, all of a sudden it's a lot lower because they went, oh gosh, this person is paying attention to the $90 Advil we gave them. Right. Well, and medical debt, that's one of the top debts in America. So it is important to be really on top of what you're being charged for and being proactive and looking at those line items because a lot of times they do just assume you're going to pay for everything or if you have a really great insurance plan maybe they do pay for everything but if you're somebody with an HSA with a high deductible plan you really want to pay attention to those line items. Oh yeah and medical debt is one of the most frustrating because it's the only debt you don't really choose to go in. Right there's not like a glamorous cool thing you get to hold at the end of it. Yes. So I have a lot more empathy for that side. And the good thing is a lot of the times you

can negotiate medical bills if they've been sitting out for a while, especially if they're in collections, which I don't recommend you send them to collections, just negotiate them. Pay them, but you can also negotiate with billing and get on payment plans if you're struggling. And so there's a lot of financial aid in that healthcare space, but it is a screwed up system. We can all agree on that. Well, and it's important too, just to have an advocate with you when you are going through something major and medical, you're overwhelmed. Like that's a lot. And when you're feeling like your health is struggling, the last thing you're really thinking about is how much am I going to be charged for this? Or I got to call billing and be on a phone tree for the next 28 minutes.

Right, exactly. So if you're going through something, it is really helpful to have somebody in your corner who's willing to advocate to have those conversations and kind of stay on top of the money side of things so you don't get through that major health episode and go, oh man, what is all this? I didn't see it coming. And you're paying for it for months and months. All right, let's go back to the phones. John joins us in Anaheim, California.

John, welcome to the show. Hello, how's it going? Great, how are you? Pretty good. So I'm kind of, like, confused in the situation I'm in, so I'm going to go back six months. Six months ago, me and my girlfriend are living at my parents' house, and the plan is to stay there and start a family there

since my parents are in their late 60s. My mom doesn't work. She gets Social Security. And my dad doesn't work because he's disabled. So the plan is for us to start a life there and help out dad in case he needs help for anything. Four months ago, my father actually passed away. Sorry.

Thank you. I'm getting ahead of myself. I'm living there with my parents. I have a brother and a sister. They both live outside of the city. In the future, the plan is for us three to split the house like an inheritance. Now, my

father passed away. My mom cannot afford the mortgage, so I'm going to take over the mortgage. So I want to know what's the best way, I guess, to handle things in the end, to be fair with, I guess, me, because I'm taking over the mortgage, and also fair to my brother and sisters, since that we're also going to get that inheritance. What's left on the mortgage? $250,000. What's your relationship like with your brother and sister? Is it pretty...

It's a good relationship. That's why I want something to be fair, you know, because in the way I was... My mom was thinking, well, what if in the end you guys just split what the house is worth, like, what you need to pay right now? Like, instead of what the house is worth at the end, you guys do end up selling it, let's say in 40 years, I take 50% and then they split the other 50%. What is the house worth right now? The house right now is worth, I believe, $850,000.

Okay. So there's about $600,000 in equity if you owe $250,000. Right. So here's one way to do it, and this all involves a conversation and everyone agreeing, but what you could do is say, hey, there's $250 left on the mortgage. So when we do sell this thing and it becomes all of ours, you would owe your portion of that $250. So you'd subtract that from whatever the profits of the home were. Does that make sense? Yes. So $250,000, you said there's two other siblings?

Right, right, right. So it's three of us. Okay, so let's say the home, you sell the home years from now, and it's worth $900,000. Right. And you split it three ways. That would be $300,000 each if it's paid for, right?

Right. But since you paid that mortgage over those years, and hopefully paid it off early, they would subtract 83 because that's their portion of the mortgage that was left. Okay. That's one option. And you may want to get with an estate attorney

just to talk this through to make sure everything is clear because it can get a little bit sticky, especially in the future when your mom does pass. You just want to make sure that everything is really clearly lined out, especially if you're paying for that mortgage for the next several years. You just want to make sure that everything is really clearly lined out, especially if you're paying for that mortgage for the next several years. You just want to make sure that everything is on paper, even though it's family, even though handshake agreements here, right? Because we don't want these to turn into broken relationships because of this inheritance, which we see all too often. So have the conversation, do what's fair that you all agree

on and deal with that when the time comes, But talk about it now and have a game plan. Thanks so much for calling in. This is The Ramsey Show. Well, it is no secret that we love talking money around here, but we know not everyone feels that way. And that's why Rachel Cruz and I started thinking about what it would be like to talk money for those who'd rather just have some fun. So last week, we launched a new Ramsey podcast called Smart Money Happy Hour, where Rachel and I dig into the stuff you and your friends would talk about at your weekly happy hour with a little bit of a money slant. So we're talking pop culture, what's going on in the world, and how to afford a life you love. This is fun, casual money advice that will make you feel less stressed and more in control of your money.

Plus, there's some hilarious moments there, Christina, if you've listened. I don't know that you have, but we've been having a great time. And people have been telling me they are talking to us, like in the car. They're talking to us. They're engaging in the conversation, which makes me feel real good. And there's always a takeaway. You learn something in there. And so it's been a lot of fun to see the feedback.

We've been hanging out in the top 20 of all podcasts for a week straight. So impressive. And I love it because it's just, that is genuinely who y'all are. It is really like having had a happy hour with y'all. It is like who you are in real life. I could see people talking in the car to y'all

because that's just hanging out with your friends. It's our most authentic self. Yep. And so we sometimes have a mocktail or a cocktail in hand and just to create a casual environment. And we've got three episodes. One, a new one just released today. So we started with is convenience culture worth being broke? Hitting all the trends out there with Amazon and Google.

And we then went into the TV network that brainwashed us all. Spoiler alert, it's HGTV. And just today we released How Rich is the Royal Family and How to Build Your Financial Empire. This was a fascinating one. We dig into exactly what their estate is made up of, what kind of income it creates for them, how they have passed this all on, what's going on with the will. I mean, it is mind-blowing stuff. Oh, man. Regardless of how you feel about the royal family, which I didn't know much about them. Rachel follows it like it's a reality show. I'm with

her. It's like keeping up with the Kardashians and then keeping up with the royal family. So I learned a lot. And we also talk about how to leave your own legacy for your family, how to build wealth what net worth really means and so there's some really cool takeaways in there and the best part is hearing Rachel's

British accent oh man which I think I said in the podcast was offensive to all people groups oh but it got better

we did some training behind the scenes and so I think we included that at the end for your listening pleasure oh I'm so excited so thank you all so much for the feedback so far.

You can go subscribe, follow Smart Money Happy Hour wherever you listen to podcasts. And it's also on YouTube, just the audio. We'll have video. A lot of people have been asking for that. We've posted some clips to social media, but video is coming for season two. I loved your clip when Rachel said she had a, what was it, a droid?

A droid. Your face was priceless. And the Android users, they're like bots in the comments. They're so angry at me for being an Apple. Listen, I worked at the Apple store, and one guy even said he has a haircut like an Apple guy. I was like, I didn't know we had certain haircuts. Whoa.

I don't know. I guess we're all just like that hipster. We take care of ourselves. You know, we shower daily. Sorry, Did users. Get on it. But we have a good time, even if we rib each other on that show.

So don't miss out. Every Thursday, we've got a new episode for you. The next one is on Disney and Disney adults and Disney trauma, and are they pricing out the middle class? We're just stepping on eggshells here, walking on them, because there's a lot of Disney fans out there. Yeah. And I might

ruffle some feathers in that episode. There's a lot of Disney fans in this building. Yes, there was one in the room, and she shared her thoughts as well. Hey, and just to brag on you guys, George, it's number one in Apple business charts on the podcast. It's number 19 overall for all podcasts on Apple. It's number one

in Spotify business, so you guys are crushing it. That's amazing. Well, all podcasts on Apple. It's number one in Spotify business. So you guys are crushing it. That's amazing. Well, thank you, producer James, for pulling the numbers just so people don't think I'm making this up. And it's no credit to me. The team has done an amazing job with this from the design to the recording, to the editing, to the marketing. It's been so fun to work with our incredible team of talented folks. And me and Rachel just, you know, we yak and they put it out there. So go check it out. Let me know what you think, good or bad, because I know you're going to do it anyways. So might as well encourage it. So there you go, Smart Money Happy Hour. Go check it out. All right, open phones this hour, 888-825-5225. Mark joins us up next in Springfield, Missouri. Mark, welcome to The Ramsey Show.

Hey, how you doing, George and Christina? Doing great. How can we help? Well, first off, I want to say grown-ups use Android and little kids use iPhones. Wow. Let me tell you why, Mark, before we get into your question. It's because Apple makes an intuitive device that even children can use, and to use a Droid,

you have to be a software engineer to figure that thing out. So there you go. That's my hot take. All right. But anyway, my question today is I started my own business about 17 months ago, and I'm in baby step two. And I was wondering if I'm a veteran, retired military, and I was wondering if I should use my GI bill to go back to school for like business administration or something like that to get some extra income because as you know with the GI bill I will get paid to go to school. So I was wondering if I should do that to get extra income to help with baby step two or if I should just focus on building my business. What kind of business do you have right now?

Pet waste management. I'm a pooper scooper. Oh, how's it going? Are you making good money doing this? Yeah, right now I'm making about $1,200 a week before taxes. Way to go. And is this like in your neighborhood? How have you been marketing this thing? Well, I'm in the entire Springfield metropolitan area. So there's all of Springfield, Missouri, and then like five other cities that are fairly decent sized, you know, around 10,000 or more people. Way to go, man. And thank you for your sacrifice as well.

Yeah. You're a hero. Hey, if you go back to school, how much do you anticipate it'll increase your income? I think, I'm not positive, but I think it'll be about $1,000 a month. Extra a month. And that's strictly through... They pay like a housing allowance thing. Okay. And that's, okay, so the housing allowance is what you're counting on.

Do you want to go back to school? Is that something you're desiring outside of the financial aspect? Not really. I mean, I, I, well, the way, the way I am right now is I know how to do my job, but it's getting more business oriented and I'm not sure how to handle all of that. I'm, I'm doing my best, but I'm not great at it. Are you solo right now? Are you solo or do you have a team? Okay. Are you looking right now? Do what? Are you solo? Yes, sir. Or do you have a team? Okay. Are you looking to expand?

Eventually, yeah. Okay. You hire a few people so you can have them in different areas and not have it all be on you. Yes. Well, $1,000 a month for the GI Bill, I mean, I think you can make another $1,000 a month in your business. And like George said, expand. You could bring on someone who is good at business who could help you with some of the administrative part of it.

And you could focus more on growing and doing what you do. So that's kind of one side of things. And then you could also go back to school, that's something you really desire. Of course, it's great to gain business skills, but I would want you to do it because you really want to do it. And you want to gain those skills versus just getting an extra thousand dollars a month. Yeah, that's what I was looking at was, you know, I'd get the extra thousand and I'd get the business, you know, like knowledge, I guess. And, you know, it's, you know, school's never been my cup of tea, but if it's something that I could do to help, you know, my business and help me through baby step two, then, you know, I'd be willing to do it type thing. Yeah. How long is it going to take you to get this business degree? Are you looking at a four-year program? Yeah, I was looking at on one of the online

universities and it was a four-year program. And do you think you can maintain your business currently at $1,200 a week while going to school? Absolutely. Where I'm at right now, I'm not even working a full week yet. Okay. Wow. That's pretty awesome. So you think you can still keep growing your business and expanding and making that money while going to school?

Yeah, because I'm working about 28 hours a week right now. Okay. This is impressive. Yeah. You've built a cool business here that seems sustainable, especially if you get a team around you to scale this thing to where you can make even more while working even less. Yeah. And, I mean, if you have the motivation right now to go back to school

and it's paid for and you think you can maintain the business at the same time, I mean, I don't see any loss in that. Yeah. And this extra $1,000, does it have to be any kind of qualified expenses or are they just writing you a check every month? They just give you a check every month. Wow. You have to go to school for a certain amount of time,

like a certain amount of hours each. Yeah, full time. I would do it, man. I mean, I would do it, but I'd also want you to really be invested in the education and not just for the paycheck. So, you know, search your heart there and if would do it, but I'd also want you to really be invested in the education and not just for the paycheck. So, you know, search your heart there. And if it feels right, go for it. Either way, you're succeeding and I'm proud of you. So thank you for your service and congrats

on the business. Who knew? Pest weight management. Hey, somebody's got to do it. That's awesome. It's like Dirty Jobs with Mike Rowe. Yeah. With our friend, our friend on the line here. Thank you so much for the call, Mark. This is The Ramsey Show. I'm George Campbell. She's Christina Ellis. This is The Ramsey Show. Our question of the day comes from Blinds.com. Their 100% satisfaction guarantee means even if you mismeasure or pick the wrong color, they will remake your blinds for free.

You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use promo code Ramsey to get the best deal. Today's question comes from Rhonda in Ohio. I was wondering how you feel about applying for FAFSA. Is it worth the time if you think your income is too much and you won't take out student loans? I absolutely think that you should apply for the FAFSA. The fact that you're even asking this question means that your income is

probably on the line where it's close enough that you likely could qualify. And it's worth the shot of at least checking to see. there are no income limits. So you can apply for the FAFSA, no matter who you are. And it literally takes less than an hour. I think a lot of people feel really intimidated by it. They think that it's going to be, you know, hours and hours and hours of work, but it's, they continually simplify it. So it's getting a lot easier to do. And it's worth checking. Plus, even if you don't get a lot of financial aid, you don't get a lot of need based aid at your school. Some scholarships actually require the FA. Plus, even if you don't get a lot of financial aid, you don't get a lot of need-based aid at your school, some scholarships actually require the FAFSA even if you have a high income. So, for example, the Tennessee Promise, they require you to submit the FAFSA.

It's a two-year scholarship for students in Tennessee, and everybody is eligible for the Tennessee Promise with certain parameters, but financially everybody's eligible, but you still have to fill out the FAFSA. So, you might well apply. Plus the sooner you apply to when the FAFSA opens up, the more likely you're going to receive aid. So you don't want to wait until April and go, oh man, I just found a scholarship that requires me to apply for the FAFSA. Then you apply then and realize, oh wow, I could have had so much aid if I would have applied back in October. So give it a shot. It doesn't take a lot of time. Plus, they're making some changes on it in the 24-25 school year that will make it even quicker.

You're going to be able to sync with the IRS website and just transfer your tax information over even quicker than what they allow right now. Right now, you have to go out into a data retrieval tool and then come back. Soon, it's just going to be synced together, which is pretty awesome. Makes it just a lot easier and less intimidating for people. Wow, the government is like a Baptist church. They eventually get on the trends. It just takes them a little longer.

It just takes a bit. That's great. Well, look at it this way. If it takes an hour to fill out the FAFSA, then you make $100 in scholarships even. That's $100 an hour you just made. Right? So don't poo-poo this.

Don't put it aside. I'm reading a stat here. 57% of high school graduates from the class of 21 completed the FAFSA. So those that did not, they missed out on this. $3.75 billion in Pell Grants went unclaimed in 21. Ouch. Money just sitting out there. Money just sitting out there. And some people might say, oh, my family didn't qualify for a lot of need. We only got a thousand bucks and financial need. And it's like, that's a thousand dollars for one hour of work. Yes. Yeah. This is big. And I remember when we did this, we were gifted so graciously inside of the FAFSA with loans. And so do not fall for this. Part of this is they say, hey, part of this financial aid package is a bunch of these unsubsidized loans, subsidized loans, plus loans. If it has the word loan on it,

it's not a gift. You have to pay that back. So I'm only taking the financial aid that is actually free money. 100%. That's such an important point. I was actually just at a college counselor's conference last week, and they were saying that around 50% of families couldn't identify the difference between a loan and gift aid in the financial aid package when they were reading the award letters. And it's like, yeah, that's a lot of people looking at those loans and thinking, oh, I got gifted money. And it's not free money. So it is important to be able to distinguish the difference. And that's part of the reason I had $36,000 of student loan debt when I graduated. And I didn't really understand at 18.

I just thought my parents are loaded because they're just going, yeah, well, we got this. Don't worry about it, buddy. And I realized, oh, they just like co-signed a bunch of loans for me. Yeah, I got to pay these back now. And so you are the opposite side of that,

getting half a million dollars in scholarships because you were very intentional and strategic and had the conversation early with your mom. And so this is what to do and what not to do with me and Christina on the air today. But man, I have so many friends in that situation. That's why I wanted to dive into this space is because I've had so many friends that went, you know, I had responsible adults telling me it's okay to take out $50,000 in loans or $100,000 in loans. Why didn't somebody stop me and say, hey, there's a different way. You don't have to go into debt. This is what it will mean in the long run.

And so I just think it's so important to have those conversations. And I'm so passionate about this space because we have to create this conversation with young people and help them avoid it. Yes. And it starts with you parents. And an easy way to do this, because I know it's awkward to talk to your kids about this because you have your own shame and baggage when it comes to your money mistakes. And so you feel uncomfortable talking to your kid about this. A really easy way to start the conversation is to just sit down with them and watch Borrowed Future.

This is our feature film documentary. It's 88 minutes long. It's entertaining. So if you're a teenager, you are going to be hooked and your eyes are going to be like popping out of your head going, wait, what now? I had no idea. Sally May was in it with the government. And this is how this thing got out of control. And I had no idea that this is how much people actually make when they get out of college versus how much loans they have. So it's a great way to spark a conversation. Yeah, it's such a good way. It's one thing to just talk at kids and say numbers and they're like boring but to have like a visual to see a doctor in tears in the documentary because you know he took out a million dollars that moment is seared in my memory it is worth watching just for the orthodontist wow

so it's inspiring it's heartbreaking christina stories woven in there so go to borrow future.com you can watch it uh this weekend with the kiddos. Yeah. And maybe you incentivize them. Say, hey, we'll go to your favorite restaurant if you're willing to watch this with me. Because I know as a teenager, like, what are you doing, mom? I don't want to watch anything you want to watch. You're lame. But it's good stuff. All right. Logan joins us up next in Asheville. Logan, welcome to the show. Hey, guys. Thanks for connecting with me today. Sure. What's up?

Yeah. So quick question for you. So I'm in baby step two. Should be done by the end of the year, all that's left is student loans. And so I'm a hustler by nature. So I've got a full-time day job. I work in full-time ministry, but I'm also renting my vehicle out on Turo, which is basically Airbnb for your car. And so with that, my car has been just rented out all the time. And so I had a friend sell me a really old 4Runner that I really like personally. I like driving that more. And so I'm considering now selling the vehicle that I have put on Toro. Now, keep in mind, all of these cars are paid off.

I don't owe anything on them. But I just feel like right now I could probably get more. So the car that I'm renting out is a 2015 Crosstrek, about just north of 100,000 miles on it. Kelley Blue Book has it at roughly 15,000 right now, which is private sale. And so in my head, the value for this vehicle on the app will only start to tick downwards as the car gets older, as the miles add up. And so I'm just considering selling it now, getting out of Toro and just driving that 99 4Runner and then having my wife's car and just going about that. So I'm just looking for some advice. Yeah. How much debt do you have left?

I have about $ for some advice. Yeah. How much debt do you have left? I have about 30,000. We've paid off just about 60 at this point and all that's left is student loans. Way to go. So this is going to cut your debt in half and speed up the process by half. So how much further, let's say you sell the car, how many more months to pay off the rest of the 15? I could probably do that within three to four months um just again trying to sell stuff working odd jobs you're talking five grand a month just at the debt even without doing turo right well we so we we've also had a child so i still have that flush phone we press pause on baby step two while my wife was pregnant and I gave birth to our kiddo. And now she's healthy. She's good. So we have extra to take it down.

So how much do you have in the bank? Just about 15. Oh, wow. So you could almost be completely debt free tomorrow. Right. I like that plan. Now also, so I'm making roughly a thousand to000 to $1,200 a month with Toro. And so I do like the idea of keeping it going, but I also see just the quicker play of getting rid of the car,

making that money now, finishing Baby Step 2, maybe somewhat into Baby Step 3. Yeah, if I'm you, I want freedom faster. And if you want to get back into Toro and buy a cheap car just to do that with, that's on you, I want freedom faster. And if you want to get back into Turo and buy a cheap car just to do that with, that's on you if you want to do that. But I like the idea of in the next 30 days, you got a new baby, let's be completely debt-free.

Let's then stock up that three to six months emergency fund in the next three or four or five months. And now we're in a really different place financially. Yeah, and you said you're a hustler. So it's like, I think you're going to get there quick with knocking this debt out. You're going to be able to get that emergency fund built out and just be in such a comfortable spot. Yeah. And you're willing to drive the beater forerunner versus the sweet cross track. I'm doing it, man. Anytime someone's willing to sell the car, even though you're not in debt on it, this is going to speed up the financial process

for you through the baby steps. Just make sure you keep you know, that it is a 99 forerunner. You may have some. You're going to have to upgrade. Right. Expenses on that. Good call. That puts this hour of the Ramsey Show in the books. Have you been inspired to make a change with your money?

Want to know where to start? Take our three-minute money quiz to get a plan you can follow. Go to ramseysolutions.com and search for Get Started to get a plan for your money.