The Ramsey Show - App - Should I Stop Paying Off Debt To Buy a Car? (Hour 3)

Episode Date: August 26, 2021

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Thank you very much. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's The Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, Dr. John Deloney. Ramsey Personality is my co-host today. He's the host of the very popular Dr. John Deloney podcast. The popularity is going up and to the right. It's hockey sticking.

The numbers are amazing. So if you want to hear a really entertaining show about life and people's questions about relationships and so forth, he's there. And he's here today to help you as well. The phone number is 888-825-5225. Speaking of calls for Dr. John, Caleb's with us in Austin, Texas. Hi, Caleb. How are you?

Good. Better than I deserve. How about you guys? Just the same, sir. How can we help? Good, sir. How can we help? Figured. Well, I'm calling on behalf of my amazing wife. Her and her mom had a falling out probably about three years ago.

I'm sorry. Say that again. How long ago? Probably about three years ago. Three years ago. Okay. Yeah. And it's still pretty hectic.

What does that mean? What does hectic mean? It's not a good relationship. So we had our son. He just turned nine months. They met once. And kind of the rules we have is he's not allowed at our house, and our son's not allowed over there.

And it's weighing heavy on my wife. So why'd you feel the need to draw? That's a hard boundary. Why'd you feel the need to draw that boundary? It's just a cancerous person, I guess, to say. Be more specific. You're talking pretty vague. Be specific.

Something happened that said you cannot be with my kid. What does she do that is a danger to your child? Well, just the environment. happen that said you cannot be what does she do that is a danger to your child yeah uh well just the environment uh her boyfriend is not uh not the best man in the world um she just she's very negative she's always heard our marriage would last and tell people we're not gonna last when my wife got pregnant said uh you know that i wasn't gonna to stick around. And we had a miscarriage and she just blew it off. And my wife just recently asked her to, if they could go to counseling and try and fix it.

And she was just like, I'll think about it. And it's just, I mean, it's just, to me, my kind of view is if it's just the thought of being around someone stressing me out, I just don't even want to deal with that. That's easier said than when it's your mom. Yeah. And your wife has a picture in her head of this new baby, and her mom's a part of that. And she had to draw boundaries for whatever reason.

I still don't fully get it, but she had to draw some boundaries that doesn't include her. She's got a grief in that picture. I'm trying to understand just as a guy. I'll let John talk in a minute. So your mother-in-law's series of offenses are that she's a jerk. her so i'm trying to understand just as a guy i'll let john talk a minute but but so your your mother-in-law's uh series of offenses are that she's a jerk uh yeah and i was i mean she's done something other than has she done something other than just been a jerk to your wife uh no no like physical harm no but i mean is there i mean is there is she just like nasty and kind of mean

snarly snarly yeah and i mean there's's a lot of ethical things that have gone on with, like, finances and stuff like that that I don't want to air out. Well, like she stole from your wife? Well, from her father. Okay. She's just a person of no character, right? Yes. Okay. And, like, so she only will talk to my wife when her boyfriend's out of town,

and then when her boyfriend comes back, she doesn't respond to anything. So what's the challenge? Is your wife just struggling with just putting a period at the end of that relationship and moving on? Yeah, it eats her up inside. Yeah. And that's where I'm calling. And, like, I'm just trying to, you know, I guess the man to me is just like, well, you know, so long. And for her, it's harder, and I'm just trying to figure out.

Yeah, it's her mom. Yeah, it's her mom. Yeah. You got to honor that. Don't get in the trap of talking bad about her mom. Get in the trap of supporting her and loving her. At some point, she's going to have to make the decision. She's going to have to put a period at the end of that sentence.

Her mom's never going to do it with her because if she would, you wouldn't be in the situation in the first place. So your wife's going to have to decide to grieve this loss and then start creating a new picture that's going to include her baby, you, and whoever else but not mom. And your wife's going to do that on her own terms and her own time. And that's frustrating and annoying if you're a husband who loves his wife and doesn't want to see her hurt. But any time there's a separation from a mom like this,

they're just going to be hurt. It's going to be hard. Yeah. Especially when they're not together. Yeah. Especially at night. So let me throw out something. The secret to happiness is low expectations. Yeah. And so if her mother had a, I'll just make up something.

I don't know. Something where, let's say she had Alzheimer's. Okay? And when people get Alzheimer's, they generally either become much nicer than they used to be or much meaner than they used to be. My mother-in-law got Alzheimer's, and bless her soul, she got nicer. And kept feeding the dog until the dog got fat. I mean, it was almost humorous. And so, because she forgets she fed the dog until the dog got fat. I mean, it was almost humorous because she forgets she fed the dog. So if you had someone like that, you would not – we never looked at Sharon's mom when she was going through that and said,

we lowered our expectations of her because she was deficit. Does that make sense? Yeah, no, that makes sense. I mean, my expectations, I don't think you can. Yeah, and I think your wife still has high mom expectations of a woman who can't deliver. Yeah. And so if she lowered her expectations and just said,

pretend like mom has Alzheimer's and she's a little nutty, because she's a little nutty, dude. The woman you just described is like Oscar the Grouch. Yeah. And she's really not got her crap together mentally. This woman doesn't. But I can see the challenge between someone with Alzheimer's and saying, this person's got that character. I'm talking about his wife.

If she said, instead of hoping mom is going to be all super mom. Oh, she's never going to be. I know. Instead said, let's treat her as if she's deficit because she is. Gotcha. And you just go, oh, that's just my crazy mother. This is just my crazy mother. That's just my crazy mother.

You know what I mean? And then you don't get all tore up about it. Because the reason the girl's getting all tore up about it is she keeps thinking mom's going to come through. She's got this picture wrong. Am I wrong? Yeah. But I think that having lower expectations isn't going to make her feel good. She's still going to have to grieve that thing that mom's never going to come through like that.

I don't disagree with that. Yeah. But I'm saying if every one of these conversations, it's like, oh, mom did it again. Well, what did you expect? Yes, yeah, yeah, yeah. If the rattlesnake's going to bite you, right? That's it. The stinking snake bites,

so don't be, when they start, you know, when that little tail starts wiggling and making that little noise, you just get back, you know? Caleb, let me ask you this. Are you in a place, have you all backed yourselves into a corner with an either or that was a little bit over the top,

or do you feel good about it? And I'll ask you this. I know a lot of first-time parents who who make these big declarations you can't come into my home unless you've you've showered in lysol and wash your hands and by third kid you know the kids walking in with a handful of dog do and then nobody cares right have you all first kidded this situation where you have you've made these declarations? Yeah, and I don't know. My mindset is if you have to hide seeing my son, then why are we even going to be around that type of person? I don't disagree with you. Well, yeah, the bottom line is there's a lot of heartbreak for your wife.

It's very hard for her. Crazy mom's just going to be crazy. You're looking at it very like, ah, that's what it is. And it's her mom. You can't take that loose. There's still that umbilical cord in the spiritual world. Be gentle with her grieving, man. I'll send you a copy of Henry Cloud's book called Boundaries.

He's a friend of John's and mine, and it's a world-class book on this subject. Hold on. I'll send you a copy of it. You've got a lot on your plate. A job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your healthcare. Their generous maternity program and budget-friendly monthly programs have been a blessing to members

welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. That's chministries.org slash budget. Dr. John Deloney Ramsey personality is my co-host today. Have you ever made a dumb decision with zeros on the end because you didn't do your research? Yeah, me too. Check your facts. As we were just talking about, if you're moving a piece of real estate, if you're trying to sell a piece of real estate, particularly right now in this wacky, crazy market, it's not amateur hour.

You need a pro in your corner. Never buy a house without the facts. Text HOUSE to 33789. That'll get you in touch with one of our real estate ELPs, an agent who is a high-protein, high-octane agent moving a bunch of properties and knows how to navigate this market, especially if you're selling in this market. Text HOUSE to 33789.

33789. Megan is with us in Greenville, South Carolina. Hi, Megan. How are you? Hi, Dave. Thanks for taking my call. Sure. How can we help?

I guess I just don't know where to start. My husband and I just got married in January. Congratulations. We're renting. Thank you. We're renting. I just don't know where to start. My husband and I just got married in January. Congratulations. We're renting. Thank you. We're renting. I just started a new job last September. I'm a lawyer, and he just switched jobs working for a big steel company. Now he works for my parents' company, and I'm three figures in student debt combined with his. We about 10 000 credit card debt um probably 30 000 debt in cars and like i said we went and we're kind of at our breaking point um i have like 200 dollars on our checking account and we just don't know where to what to even do what is the actual balance on the student loans i'd say say about $175,000.

Okay. And what are you making? I make $75,000. What's he making? $50,000. Okay. So we have $125,000 to attack this with. All right.

Well, the great news is you have a good degree. The bad news is you paid a lot for it, and you're deeply in debt because of it. So you're going to be shoveling a while. Yeah, and that's hard because I know that a lot of that is me. I'd say I've got about $150, and he's got about $25. So together, about $175 in got about 25. So together about 175. So tell me about the cars. Are they two 15s or a 20 and a 10 or what?

One's a 2016 F-150 and one's a 2015 Acura. We're upside down in the F-150. So what are they worth each? Or what do you owe on each what do you owe on each of them i owe 25 on the f-150 and we owe 10 on the acura okay you need to sell the f-150 yes it's ridiculous what if we're upside down in it i don't care you need to get rid you're gonna have to borrow the money to cover the difference or scrape up the money to cover the difference so you owe you owe 25 on it what do you think it's worth maybe 20 maybe 19 it's got 175 000 miles yeah okay yeah that 5 000 bucks

gets you out of that thing and you need to get a beater car to drive because you have 175 000 worth of debt to clean up you don't need a 25 000 pickup. Okay. It's out of control. I mean, you have a $600 truck payment. No, it's $645 a month. It's crazy. Almost like I've done this before. What kind of law are you practicing? Civil defense.

So defending companies that have been sued. And, you know, going back to the student loans, I guess I have the option in the future to go work for the government and I know that no no no okay you need to just keep working there and go double your income in the next four years yeah that's what and I know that that's coming because I make 75 now I'm sure that a raise or a bonus I think you're you'll be making 100 pretty quick and 100 and a half pretty quick after that if you keep on a standard track for an attorney and you have a decent firm and all that kind of thing. And hopefully your husband's income will continue to go up as well. So here's what you've signed up for.

You need to get into a beater car and get rid of the pickup, and then you're going to get on a written game plan, a detailed game plan called a budget, and you're going to live on nothing and just clean this mess up. And it's going to take a while. $200,000. If you do $50,000 a year, that's going to be four years. If you do $75,000 a year, it's going to be three years. And that means every big bump you get or every bonus you get.

It means you're not going out to eat, you're not going on vacation, and you're not buying a house. You're broke. Yeah. And listen, I spent years working with lawyers. I love them. And they will look at your car in the parking lot and then look at you with that disdain that, what did you do all this for if that's what you're driving?

And they're going to ask you why you're renting. They're going to ask you, man, you've got a mess to clean up. Well, I'll be honest with you the reason why i called in today is because that's literally the question i've been asking myself um but for the past month like why did i go to school this long like why did i take out all this money because you're gonna make a hundred and a half three years from now yeah and besides that you can't un you can't unring the bell it's there so let's just deal with it yeah asking backwards questions gets you nowhere i wouldn't have signed you up for it but you're signed up so now it's about hey what are we going to do to get even and then yeah when you

when you and your husband when he's making great money you're making 150 and you're you've made partner if that's even what you choose to continue to do, you owe nobody any money. That stacks up real, real, real fast. So I want you to think about $75,000 a year on debt, which means you're going to take all the OT. He's going to take all the OT. You're going to do anything you can to create income, and you are going to spend nothing.

That's going to be very hard this year. Next year, your incomes will go up. It'll be easier. And the next year, your incomes will go up again. It's going to be even easier. But that'll get you out in three years. You'll be 100% debt-free in three years if you do that. And you passed the bar exam, so I know you can figure out a way to do this.

Yes, I did. So you think selling the truck first. that's the first order of business. No, we're going to do it all at once. We're going to get on a budget, live on nothing, and sell the truck. Okay. But list your debts, smallest to largest, pay minimum. Cut the credit cards up. They've not been a blessing.

No. Time to chop them. Time for plastic surgery. Okay. And he's going to feel like a dingbat driving up to his construction sites in a 2014 Camry, and y'all are both in it, right? You're both in it. You're in it to win it now.

You don't care what other people think because other people are broke, and you're going to... So, Megan, do you think this will work? Yeah, I think it'll work. So, I think we've just got to do it. All right. I'm going to so megan megan do you think this will work yeah i think it'll work so i think we've just got to do it all right i'm going to help you do it then i want you to i want you to go through our class it's called financial peace university it's inside of a membership called ramsey plus i'm going to pay for it for a year as your wedding gift oh thank you and the two of you need to sit down tonight and start going through the class. Get one of those coaches in your corner. Get that community in your corner.

Get on EveryDollar, the budgeting app. It all is included. It's all free. I'm giving it all to you free. And I want you to work this because you can do this. You can do this. But you have a big mountain to climb. But I've been to the top of it a bunch of times, like a thousand times this week with people.

And so I can show you the way to the top of that mountain, and you're going to make it. If you'll do exactly what we tell you to do, I can get you out. But if you screw around and start coming up with your own plan, or you water it down, or you start whining, you're not going to make it. But if you roll up your sleeves and bow into this, plow into it, you can do it. Hold on. Kelly will pick up, and we'll get you signed up to go. I love it. it you can do it hold on kelly will pick up and we'll get you signed up to go i love it man and you get a lawyer focused on something you better get out of

your way yeah i mean because you don't get through law school unless you have a level of determination perseverance you can grind and grind and grind for three years that's what you're asking her to do yep and they can do it yeah she just finished grinding for three years now three more that's right and what they're going to do is going to get real resourceful they're going to find new jobs they're going to going to do is they're going to get real resourceful. They're going to find new jobs. They're going to find extra jobs, and they're going to knock that thing out. Yeah, it's going to go. It's going to go. She can do it.

Absolutely she can do it. There's no question about it. I'm positive of it. And, you know, the interesting thing is, you know why? She believes she can. Yeah, that's right. But, I mean, if you run the numbers, you make $100.25 now, you live on 75, or you spend 75 on debt, that leaves you $50,000 to live on. That's the average household income in America is $59,000.

You're doing just fine. That's right. It's not like we're actually struggling here. No. There's a bunch of taxes coming out of that, and, of course, you're evil rich people, so the current president's going to tax your butt off, it sounds like. And nobody's starving. That's a whole other discussion. But, yeah, you're going to get there. You're going to make it in spite of Washington getting in your way.

Go, go, go. This is The Ramsey Show. Thank you. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Riley is with us in Kansas City. Hi, Riley. Welcome to The Ramsey Show. Hi, Dave and Dr. John. It's an honor to speak to you guys. You too.

What's up? So my wife and I got married back in January. Congratulations. Thank you, sir. We finished up Baby Step 3 in March, and we're trying to figure out now whether we should move on to Baby Step 3B or move into Baby Step 4 with the idea of throwing whatever else we can into a savings account for a down payment eventually.

Awesome. Good work, man. That's incredible. So how old are you guys? I am 23, and she is 21. And what's your household income? It's going to be roughly $100,000. So she is still in school.

She finishes in May, and she'll start working full-time in July. What's she going to do? She's an architectural engineer, a lot smarter than me. Well played, man. Well played. Always good to marry up, brother. So what do you do? I work in landscaping.

Good. Very good. Okay. All right. So $100,000 household income. You're in your early 20s, and you're thinking about starting to save for a house. What's the downside? Well, we're not entirely sure when.

We know the place that we're living at now, we have a contract through until next July, and we're kind of thinking we'd potentially be in the position to buy a house maybe next spring, but we're also not sure, so I don't know if if it's if we should you know save up and i really wouldn't know how much exactly to save up or at this point and then start baby step four or start baby step four and throw whatever we can well you got plenty of time to do either you're very smart very wise very ahead of the game at your age and so you're very smart, very wise, very ahead of the game at your age.

And so you're not calling me up at 62 with this question. You're already, you know, you've got 50 years here to play this out. So you're going to be fine, dude. You've done well. So you're going to get both. You're going to get retirement and you're going to get a house. So it's just a matter of what the order and what the first things are. So what's the, in my mind, as young as you guys are, I would, you know, how much to put down?

I'll give you a hint. The more you put down, the better off you're going to be. Okay. You can't put down too much. It's impossible. So just start saving. I mean, why don't you just pile up as much money as you can pile up in the next 12 months? Okay.

And guess what? If you don't want to buy a house then, you still got to be able to pile up money much money as you can pile up in the next 12 months. Okay. And guess what? If you don't want to buy a house then, you still got to be able to pile up money. It's okay. Okay. And then you can start your baby step four. And if you run numbers from 25 to 65, that 40 years investing 15% of $100,000, that's going to be like $15 million. That's what you're going to have. So my point is if you put this off two years and save for a house and then start saving for retirement, as long as you do 15% the rest of your life,

and that's if you never get a raise, which, by the way, if you work 40 years and never get a raise, you're a loser, okay? So I think you're going to be okay, right? You follow me? I mean, the set of assumptions here is very conservative, is my point. Yes, sir. Yes, sir. You're going to do great.

I'd just pile up as much as you can pile up this year. Just make it a game. How much of a down payment can we save? He sounds like a guy that got in a football game, and on the very first pass, he made some good moves and scored a touchdown, and he crossed the line, and the crowd's cheering. And he didn't know what to do with the ball. He didn't have a dance planned. He doesn't, like, do I just hand it back to the ref?

I don't know what to do, man. And it's just celebrate and then go to the next step. Yeah. Right? It's this weird we're 23 and we are crushing it and do we, uh... I don't want to screw this up. I scored, man. Hey, I scored a touchdown, dude. It's awesome. It's awesome.

It's awesome. That's fun. You've done so well, sir. So well. Monique is with us in Bangor, Maine. Hi, Monique. How are you? Very well.

Thank you to Kelly for taking my call today. Sure. If you got by her, your life's good. What's up? That's a good move, Monique. So I am looking for some guidance from Dave and Dr. Delaney about my will. I have two daughters, one of whom is doing very well financially. She and her husband are in the 1%.

And the other daughter earns about $50,000. And for several years, I felt uncomfortable about how to divide up the assets. I'm an everyday millionaire. But more recently, I've gotten to the point where I don't want to give either of them any money. I feel like I've worked so hard my whole life. I paid for college for them. I've paid over half a million dollars for college for them. And they've turned into socialists. But they have. You're still in the wrong college.

Yeah. Monique, you're my favorite call maybe in two months i i know we're all laughing no we're with you we're with you i'm depressed i'm very depressed about where i see my children heading and i think i don't want my money to go to them and i feel terrible about that. You shouldn't. They're not entitled. They didn't hit the DNA lottery. They're not entitled.

My children have been instructed since they were small that in order to get the opportunity to manage the money that God gave me to manage, meaning that I panned off the responsibility to manage some of the Ramsey fortune to them, they will have to be people of character. Socialists are not people of character. Okay. They're parasites. And so if my children are going to be parasites, I'm not going to finance their lives so that they have a reality show.

Is there a way to put money in, let's say, a trust where they couldn't get access to it until they were, let's say, 70 years old? Well, I mean, then they'd just be a 70-year-old socialist, right? Well, but I'm hoping by then they will have kind of woken up. You can. All of our estate is trust-based, and our trust is – we've done it from a faith perspective, not an economics perspective. But if they're not walking with God, they don't get to manage God's money. That's what the trust says. Really?

Yep. In no uncertain terms. And so, you know, in your case, you could change that lingo and just go, you know, when you become a capitalist, you get the opportunity to manage this money. Monique, here's what I would do. I would take some time to distill down beyond the monikers and the labels. The book report on Atlas shrugged. That's fantastic. Man, I am not usually at a loss for words, and you got me on that one.

Monique, here's what I want you to do. I want you to distill down beneath the quote-unquote word socialist. What are the things that they are saying that concerns you, that you think that you are leaning into, and I want you to have a direct, straight conversation about what these things are, and then I want you to identify them. And like Dave said, it's your money. You can do what you want to with it.

I've seen more and more over the last four or five years a lot of semantic shell games. And when you're trying to talk to somebody, it's like, oh, we're way on the same page. I just thought this about this about that, right? I think you can say that you are not required morally, ethically, legally, spiritually to leave your money to people that you do not agree with how they live their lives.

Period. Full stop. In there. Right? So, now, once you've said that, then you can start to have some discussions with them that are very gentle and very life-giving and very kind. Gentle and direct. Very kind and very clear. And it's like, okay, you know, I've paid for all this stuff for you, and truthfully, I don't agree with the way you're living your life,

and I'm not willing to finance that going forward. And so it's up to you if you want to do that. I'm not being controlling. I just want to let you know that I'm going to go ahead and do a reading of the will, and you're not going to be in it as long as you're living this way, whatever this way is. If your kid's a heroin addict, you sit down with them and go, I'm not funding your heroin with my death. But what you did that is unique is you articulated what that meant not you're not vague yeah no no

i'm very clear very clear it's unbelievably detailed and it costs twenty five thousand dollars to write the trust very clear it's ridiculous yeah the legal field fees on this were amazing but i just you know and and then we get to have this meeting once a year where we revisit and go oh by the way remember what we said if you're going manage money for God, this is what managing money for God looks like. First, you've got to be walking with him. And, you know, and we do this kind of stuff. And you don't get, you know, and so it's not, we're not mad about it. But we feel a responsibility to not fund heroin addicts or socialists.

You know, I mean, it's like, wow, this is the Ramsey Show. Our Scripture of the Day, Proverbs 9.9, Instruct the wise and they will be wiser still. Teach the righteous and they will add to their learning. George Patton said, Accept the challenges so you can feel the exhilaration of victory. Amen. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. Dr. John Deloney, Ramsey personality, is my co-host today.

Max is, I'm sorry, Mitchell is with us in Chattanooga. Hi, Mitchell. Welcome to the Dave Ramsey Show. Hey, John. Hey, Dave. Quick question. I'm in the tail end of Baby Step 2, and I have a car lease or a fleece, as you would put it, and the turn-in is in June. So I'm wondering if I should pause where I'm at on the Baby Steps.

I have obviously Baby Step 1 done, but should I pause Baby Step 2 to stack cash toward buying a new vehicle after I turn it in and cover any expenses that I would have at the end of that fleece. Yes. To buy a $2,000 or $3,000 car. Yes. Have them try to sell me this thing out of finance. Yes. Okay.

You're right on. That's a really brilliant idea. You properly looked into the future and avoided an emergency that really shouldn't have been an emergency because you thought about it six months ahead of time, five months of time you're going to be able to do this well done yes that's exactly what you should do right on thank you thank you sir there is a principle there that christmas should not be an emergency they don't move it right doesn't surprise anybody this lease is coming up that you know you're in the fall. You're going to go to school.

These are not new pieces of information. And so, you know, develop some kind of a game plan. And that's what he was doing, shuffling, you know, moving the shell around, hiding the pee, until we find a game plan to figure this out. So I don't know how I'm going to get a car. I can't be walking. I can't turn this thing in. I don't want to finance this thing.

I don't want to keep it. It needs to go away. And how am I going to do that? I can't say. I'm going to get a car. I can't be walking. I can't turn this thing in. I don't want to finance this thing. I don't want to keep it. It needs to go away. And how am I going to do that? I can't say. I'm going to stop. Beautifully done. Good critical thinking. But people don't look out past freaking Friday.

I was going to say, I have not read a book on it, and I could probably call a buddy of mine that's got some theory on it, Dave, but you've been doing this for a long time. What is this? Where there is no vision, the people perish perish when you don't look out past friday everything yeah yeah it's the car lease it's christmas it's you're gonna die have a will it's that your kid's gonna go to some sort of secondary education i mean it's everything one definition of maturity though is just the ability to delay pleasure the ability to look into the future and go i this should not be a surprise. The tires wearing out on your car are 100% probability that's going to occur.

An oil change coming up is for sure going to happen. It's 100% probability. And so you shouldn't need, oh, the tires suddenly went out on my car. I mean, you wouldn't believe the number of times I had somebody that the tires suddenly went out of their car, so they traded cars. Max is with us in Seattle. Hey, Max, welcome to the Dave Ramsey Show. Yes, hi, Dave. Hey, John. So I'm 17.

I'm a hospital senior right now. And so I'll be a freshman at my state school as a business finance major. And I'll be living with my parents during this time. And so I have a guaranteed full ride for all four years. And this year, after tuition and fees, I'll have about 10 grand leftover scholarships for the first year. And so my question is, what should I do with this leftover money? Should I save it for after college? Should I invest it or give away part of it?

That's my question. And put it in a savings account to keep going to school with. That's right, man. You may want to get an opportunity to study abroad. You may get an opportunity to do an internship. Something else may fall through, and you may need this money. Right. It's 100% to be invested in Max's education. Nothing else.

And I can tell, if you're a business finance major who's got a full ride, that means you're a person who thinks ahead, just like we were just talking about. Don't overthink this. Just put it in a savings account and have it there available for you when you need it because you're going to need it. Here's the math for you, Max. You completing the degree and completing it debt-free is much more valuable, exponentially more mathematically, financially valuable than you can make on

a mutual fund. Okay? You put $10,000 in a mutual fund, you make $1,000. Max is worth a lot more than $1,000 because Max is a freaking bright student. And he's got a degree not in underwater basket weaving coming up or left-handed puppetry. He's got a degree that's very usable in the marketplace. So you finish this degree. You finish it on time because you keep looking ahead.

You make sure you take the freaking classes necessary to graduate on time. It's amazing. It's a whole other story. And you keep this money set there. Now, let's say you go all the way through and you never need the money and the money's still sitting there. Well, then it's there to help you start your new job with a new apartment in the new city, maybe buy a little bit of a better car or something after you graduate.

But you are the secret sauce in this equation. You are worth more finishing this degree than any mutual fund will ever pay you. I'm ashamed to say this, Dave, because I had never done the lost sunk cost math here. But I was sitting with a group of folks in a think tank working through the how do we lower the cost of higher education. And there's a million different options on the table. And one of them was get out early because you don't do the math not only on the cost of this education but on the lost cost of unearned wages. And I went to the University of Tennessee with my oldest daughter, the first one to go to college. I'm sitting in the freaking freshman orientation.

And they go, well, 57% or 52% or whatever it is, graduation rate. And of the ones that graduate, only 25% do it in four years. Oh, yeah. That 50% is on a six-year graduation rate, right? And so, yeah. And so I reach over on her notes and wrote in big letters, have a freaking plan. I mean, when I was in school, they gave us a catalog. I'm sure it's on digital now.

But you look and you go, these are the classes I i need to take and they are all offered during the four-year period you can't schedule that how do you qualify for a college degree but dave i don't want to get so lame i don't want to get up before 11 a.m and you know eight o'clock classes bother me because my beer pong gets interrupted 11 p.m the night before all right you give me a hard time by 4 p.m so i don't want to take any afternoon. Don't get me started. By the way, that extra year costs money. That's what I'm saying.

You can take a full load, not even a full load, and graduate in four years. But it costs 25 grand. I mean, on what? 100% of the degree fields. It costs 25 grand, let's say, and that's on the low end. But if you were going to go make $45,000 at a job, it costs you that too because you're not working, right? There's a cost on top of that.

That's true. And that's when I thought, oh, my gosh, it's the tuition plus. This five-year plan, I mean, I'm sorry if you graduate in five years. You can be pissed at me if you want. But all three of my children graduated in five years. You can be pissed at me if you want. But all three of my children graduated in four years because I said 100% of the money stops at the four-year mark. And I'm going to kick your little college butt. I mean, unbelievable. Just have a plan.

You could go to high school now and do dual credit courses. There's so many options you can take. You can get down to five years with a master's degree now. I worked 40 to 60 hours a week when I was in school and graduated in four years. So cry me a freaking river. Get done. Seriously, get her done. You know why I graduated in four years?

Because I didn't have the money to keep going. I didn't want to keep going. I wanted to get out and make money. It's like I was so broke I couldn't breathe getting through. I didn't want to live that life anymore. It wasn't party central. so broke i couldn't breathe getting through i didn't want to live that life anymore it was not a it was it wasn't party central no it's not living on my daddy's frat and my daddy's frat and my daddy's frat paying the bill it's not unbelievable man it's unbelievable so you got you gotta go to

school so higher education you know you can blame these universities if you want or you can blame your lazy butt for not following the dadgum syllabus. Well, nowadays, you can take 30 to 60 hours in high school for free. Yeah. A community college for free. Right. And then roll in and be out in 18 months or 24 months if you want to. And then hit the workforce and get ready to rock and roll. So you get a four-year degree effectively in two years.

The number of students coming in with 30 to 60 hours, it was impacting the college bottom line because kids were taking the classes in their high schools for free. AP classes. That's right. Just dual credit courses. Oh, the dual credit AP. You can figure it out. And or clap out, right? But it goes all the way back to what we were talking a minute ago.

Just the number of parents I would talk to over the years. Good people that just suddenly went, oh, my kid's a senior. They've got to go to college next year. Yeah. Like it's a surprise. Like they just showed up. That's right. Christmas is in December.

That's such a great line. Don't move it. Christmas is in December. Good show, John. Good job. James Childs, Kelly in the booth. Well done. I am Dave Ramsey, your host.

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