The Ramsey Show - App - Single Mom in Public Housing Wants Out (Hour 2)

Episode Date: December 7, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Katie is with us in Memphis, Tennessee. Hi, Katie. Welcome to the Dave Ramsey Show. Hi. Hey, what's up? Yes, so I'm glad to talk to you. I've been listening to you for a while, and I just wanted to call in and ask a question. I'm trying to figure out if I need to take a break from school and pay off some debt,

maybe get a second job and then go back to school later, and just kind of wanted to get some insight on that. What are you studying? Psychology. Psychology. Psychology. Okay. And why did you laugh when you said that? Well, because I'm starting to realize that there's not really any money in it.

And, I mean, it's my passion, but... What is your passion? Yeah, there's just no money, so... What is your passion? Well, I really want to be a licensed therapist but okay well licensed therapist i mean if you if you got your master's um and built a practice a lot of them make 100 a year and that was my original plan but i don't see how that's possible right now so why maybe later down the road why um because i made some bad financial decisions

and i only make like 29 000 right now and i'm 30 000 in debt where are you studying uh liberty university where i'm doing liberty Okay. Yeah, I did that because all the local schools don't do night classes, and I work full-time. Okay. All right, cool. So University of Memphis doesn't have any kind of an adult program? No. They only do daytime classes. Okay.

All right, how old are you? I'm 28. And you make $29,000 a year doing what? Well, I just got a job working at FedEx World Headquarters. I'm a customer service representative, so I start Monday, so obviously there's potential for growth there. Oh, great. So you're making $29,000 there with some upside, and depending on what you're doing there there with some upside.

And depending on what you're doing there and how it's structured, you may even be able to just take some OT if you could. So what kind of debt is the $30,000? Okay, so when I went to school, I took out, I'm not doing this now, but I took out some loans for a little while, which is like $20,000. And then about three years ago, I had epilepsy, and I had a really bad spell, basically. And I was in and out of the hospital, and that was $10,000.

Okay. So you don't have a car payment? I don't have a car payment. I pay for my own car. And your student loans are not, they're accruing, but you're not paying anything on them if you're in school right correct okay so um are you still stressing me out they're stressing you out just sitting there okay and and the deal is is i don't have enough money right now to um i i'm short every month

i'm taking out my emergency fund to pay for school. So I'm just like, is this smart? How much is in your emergency fund? Okay. So there's $25,000. Okay. Where did that come from? My parents passed away when I was a teenager.

Oh, I'm sorry. Okay. Okay. Okay. And what were you making at the insurance place before? You're making $29,000 now at FedEx. I was making like $30,000, but the issue was I really couldn't sell. They liked me. I just couldn't produce the sales part of things, so I didn't want to stay in it and just continue because I had been in it

for like four years. But it just wasn't working. I wasn't seeing any me growing any. And then they let me go a few times. I got let go a few times because of my low sell. So I figured it might be time for a change. Right on the wall. Okay. All right. But you're not making more money now. You're making about what you Okay. All right. But you're not making more money now. You're making about what you were making. Correct. So you're still burning through your emergency fund to go to school, right? Yes.

Okay. All right. Well, the first thing is, let's name, out of the $25,000, I would name three to six months of expenses the emergency fund, and that would not be $25,000. That would be less than that, three to six months of expenses, and that's your real rainy day fund, and we're not really getting into that. The rest of this money is to be used to invest in you,

and I would use it for education. I love the idea of getting your income up to where you can address these medical bills and get them cleaned up. How old are those? You said it was epilepsy, and it was how long ago? Three, four years. I'm sure I could get it down. It was originally $30,000, and I called and debated with them and got it down,

and I've been doing that off and on for the last three years, and I've got it down to $10,000, and I think I could probably get it down even maybe a little bit more. Yeah, I bet if you called and offered them five cash, you could probably clear it and use some of your money to do that, I would. Okay. Lump sum and be done with it, not payments. Then we're down to just student loans that are sitting there waiting on you to graduate,

and they're going to just sit there, and we're not going to do anything with them right now, and then we're going to start investing into you. I'm not 100% sure you want to be all over this psychology thing because I'm not sure you want to do it. I don't mind you doing it. If you follow through and you get a degree and you've got a plan to get your master's by working and using some of your savings to get there, that is a a valid goal and you could go for it and do that not getting into your emergency fund but using some of your other savings five thousand of it clears up to ten thousand dollars in debt some of the rest of it is used for tuition and you have a lay out a game plan to where i'm

going to graduate by this date by taking these classes at this cost and you just you lay the whole out as a program, and you budget it, and you go, okay, now where am I going to get that money? Well, I can use this much out of savings, no more, because I don't want to get down into the emergency fund. I can use this much out of work, and I can work extra, and I can do this. I can take some time off and then go back. Or, you know, what kind of a plan can i develop to graduate and get that but i think you need to stop and go why was i getting this degree and is that really who i want to be when i'm 40

i don't mind if you do it but you did not call me up passionate about being a licensed therapist i didn't hear passion anywhere in this discussion. You were not disappointed about it. You were just kind of, it's kind of an eye roll. Well, I guess, I mean, I am passionate about it. Then fight for it. I just struggle so much. Then fight for it. And fight for it.

The reason you're scared is you don't have a plan. You cannot see the end of the, you can't see the end of the tunnel. And so the light looks like an oncoming train. But if you'll lay out what I'm talking about, you say, okay, five grand gets rid of the $10,000 worth of medical. We're going to set aside $10,000 for my three to six months of expenses, and I never get below that. That then leaves me $10,000 to start buying some tuition.

That's not enough, so I've got to have some work plans to pay for this. But here's where I'm going to take the classes over this many years. Here's what they're going to cost. I'm going to end up having to quit my full-time job at this point and go do my master's or whatever it is. I don't care, but lay out a detailed game plan of how you're going to fight through this and get there. Then you're going to start getting there. I think you can do this this you're a sharp young lady i just love it when the companies we work with make it a point to give money away especially

during the holiday season once again this year year, Zander Insurance will donate 25% of all sales from their ID Theft Protection Plan in December to Operation Homefront. Operation Homefront is a very special organization that provides emergency financial assistance and housing to our wounded veterans and their families. To date, Zander has raised and donated over $300,000 with your help. That's amazing. And if you don't have ID theft protection, there's no better time to get it. Not only will you receive the smartest, most affordable plan available,

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It's called The Ramsey Baby Steps Community. The Ramsey Baby Steps Community. You can join it if you want. Dave, do you recommend getting a loan or a credit card to consolidate multiple credit cards in order to only have one interest rate in payment instead of multiple? No. I don't. I would rather list them smallest to largest and get the traction of paying them off. Very seldom does that result in a lower interest rate overall,

and it gives you this feeling that you've done something and you haven't done anything. You just piled up all the trash in one pile is all you did. There's still a trash pile. It doesn't matter if it's three little pieces of trash or a pile of trash. It's still trash. It's still got to be cleaned up. And so it just makes you feel like you did something. And debt consolidation, we call it debt consolidation,

88% of the time results in you going further into debt because you don't change your behaviors. And that will get you in a mess. Sierra is in Dayton, Ohio. Hey, Sierra, welcome to the Dave Ramsey Show. Hi, Dave. I'm so happy to finally speak with you. You too. What's up?

So, Dave, I'm a single mom living in public housing, and I just want out of my situation. Okay, great. Cool. So what do you do for a living? I'm a manager in training for a fast food restaurant. What does that pay? Gross yearly is probably just about $11,000 a year because I'm working part-time. How many kids you got? I have four.

Okay. Well, that's not going to do it mathematically kids you got? I have four. Okay. Well, that's not going to do it mathematically, is it? No, it's not. So what you've got is a career issue, right? Yeah. I'm currently in school online, Indiana Wesleyan University. What are you studying? Business administration.

You're studying business administration. Business admin, okay. Yes. And how long before you get your degree? November 2020. November of 2020, okay. Yes. And is that a two-year degree or a four-year?

It will be in my associates. It will be a two-year. Okay. Yes. And is that a two-year degree or a four-year? It will be in my associates. It will be a two-year. Okay. All right. All right. And what do you plan to do with that? I want to go into marketing and real estate. There's a few different paths I want to take with that.

I don't want my hand in a lot of things. I also have a nursing facility, nursing background. You do? Nursing assistant background, not nursing, but yeah. Okay. And how long did you do that? Since 2009. What's the most money you've ever made in your life in one year?

In one year? Well, probably about the same. No, I'm sorry. I would double that. Probably about $20,000. Okay. All right, cool. And how old are your babies?

10, 9, 2, and 6 months, 7 grand. Okay. All right, cool. And how old are your babies? 10, 9, 2, and 6 months, 7 months. Okay. You got family around? Well, my mom passed in 2010, and my father's a truck driver, so he's pretty much all the time gone. But my grandfather is probably my backbone. Gotcha. Okay. All right. Gotcha. Okay. All right.

Good. Well, the thing that I hear more than anything else is that you've got these babies to feed, and you've got to try to find a way to create income. And what is the best thing you can do to create income? The most income, the fastest. And I think you go ahead with the fast food thing until you've got something better but i think you start looking today because i i think you can if you can find a full-time gig making 30 to 40 now which you probably could do with the nursing thing um

and who's watching the kids if you're doing that? Daycare? Yeah, they're in daycare. I do get assistance with that. Okay, all right. If you were not in public housing, would you still get assistance with the daycare? Probably, but probably not as much assistance. Yeah, okay. Well, what I want you to use is the assistance wisely, meaning that you're using it as a platform to jump from, not a hole to get stuck in.

Yeah. And so what we've got to do is we have to find something to get your income up long-term and short-term. Short-term is 16 jobs, you know, working everything in sight, doing anything, cleaning houses, walking dogs, babysitting. I don't care what you're doing, but you're making money doing it, and you get your mindset moved from $11,000 a year to $11,000 a month. Right. We start heading that way, and it might be some kind of a side hustle thing.

It's just simple. I mean, a babysitting service. It could be a house cleaning service. It could be a, I don't care what it is. It may be with your nursing background that you could find a place to, you know, there may be an elderly person that needs care that you stay there and has a large home and you stay in the basement with the kids you know that kind of a thing that could be your way out but but we've got to have short-term and long-term

ways to create dollars and when you start finding those that's going to be your pro your possibilities for moving out i can't give you a lot of mathematical hope on eleven thousand dollars with four kids right that's not going to get you you that's not gonna be able to pay the rent and food right um i do have the possibility of going to a full-time working where i'm at now um the only reason that i've been doing part-time is because of just trying to juggle everything with school, kids, and working, and it just being me. Yeah. And just trying to keep my stress levels at a minimum. I hear you.

For obvious reasons. Yeah, you're just trying to exist, kiddo. I understand. I don't blame you. So I think what you've got to do is you have to identify which things we're going to work on and what areas I'm going to embrace some stress to have less stress in another area. Okay? An example of that is I'm going to embrace the stress of being in school and working all the time so that I can get out of school and make more money so I don't have to work all the time.

You know, it's like I'm going to embrace that stress right now because it's my way out it's my escape it's my escape mechanism and uh but it's not a it's the problem with stress is you can do anything stress wise and time wise and fatigue wise you can bust through anything if you can see the end of it but where you feel like you're a rat in a wheel the stress becomes overwhelming yeah a friend of mine refers to it as uh when you're up to your neck in alligators you can only think about alligators exactly that's exactly right that's that's how it feels and so the thing is you can deal with alligators if you go all i all i gotta do is swim through swim past three more of them and and i'm going to be over there,

and over there is where life is better. And so just keep scratching and clawing through. So that's why I think you've got to have a game plan on laying out exactly where you're going, how you're going to get there, and don't be vague about it. And make sure when you're spending time that you're making the most possible money for that time. And I'm not sure a fast food gig is going to be that. You might do better than that income per hour than just getting that as a full-time gig. I don't know.

Maybe if you went from part-time to full-time, it goes from 11 to 35. If it does that, it's something to look at. That could be your first step out, right? But you embrace some stress now so that you don't have to later. It's just like you embrace the stress of running two miles so you have less weight. You know, it's the same thing. We always embrace some kind of stress with an end in mind, though, and with an end in sight.

Otherwise, it's too much and you can't bear it. You call me back, Sierra, anytime I can help. I'd be honored to walk with you while you're doing this. This is The Dave Ramsey Show. Can you believe this real estate market? Home shopping has become so competitive. There's a ton of new buyers in the market, and bidding wars are the new normal. Folks are under a lot of pressure to offer more money to get into that house. Don't do that.

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Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee, 37027. Adriana in Austin, Texas is with us to do her debt-free scream. How are you, Adriana? I'm doing well, Dave.

Cool. How much have you paid off? I paid off $40,000. And how long did this take you? 14 months. 14 months. And your range of income during that time? Started off at about $15,000 to $65,000. $15,000 to $65,000. $15,000 to $65,000. What were you doing making $15,000?

I was working retail. Okay. All right. And you're single? Yes. Okay. Cool. And so what did you do to get out of retail?

What do you do now making $65,000? I actually am a recreational therapist and along my journey um i started my own business oh wow okay good for you well done that's inspiring to the lady that i was talking to a few minutes ago trying to figure out how to get up from eleven thousand dollars a year that's why i was curious well done. What kind of debt was the $40,000? Student loans, credit cards, and one small loan. Ah, okay. So what happened 14 months ago that put you on this journey? Well, I was being normal. I was sitting around a bunch of family, and I was complaining about I'm going to probably pay a student loan for the rest of my life,

and I'm coming to accept that. And my brother was telling me, haven't you ever heard of Dave Ramsey? And I was like, who? So they never said anything else. I was like, I looked you up, and I got on board, and I was like, I'm going to do this, and I'm going to do it the way Dave teaches. And it has just changed my life, and it's just been amazing. Wow. Very cool.

Very cool. So did you go to the Financial Peace University class? Yes, I did. I did. And through watching that free stream, I saw Maddie and John, who are, this is where I'm doing my phone call from. You're doing it from their house? Yes!

Oh, my gosh! Wow, very cool! Yes. Well, they had a wonderful story and a wonderful Debt-Free Scream, and they've become millionaires and they're FPU coordinators and everything else, and so you were in their class. Wow, very cool. Yes, they were so supportive and just amazing and just really made me get through the end of my dad.

So it was amazing meeting them. And it was through watching your show. And when I met them, I was like, oh, my God, I know who you are. You're stars. I love it. That is so fun. Well, they are. That youtube story of them is very popular it's had a bunch of hits so very cool well congratulations well how does it feel to

not have any payments amazing and i can breathe and it just you just wake up feeling just different. So how old are you? I am 26 years old, but I paid off my debt four days before my birthday at 25. I love it. At 25. Okay, very cool. Good. So it took you 14 months. So there's a 24-, 25-year-old single lady out there that's whining to her family that she's going to be in debt the rest of her life.

Tell her what she should do. Tell her what she should do. What would you tell her? What advice would you give to you from two years ago? I would say get your big girl pants on and get to work. And that's what I did, Dave. That's the key to getting out of debt is lots of work. Yes, and get used to saying no.

Okay. Yeah, turn off the I want it machine and turn on the I work all the time machine. And what else did you do to get out of debt? So along the time, I started my business. And so I have therapists who work for me, and that has really helped. But going along my journey, I was like, you know, they say make money, make money. How can I do that? And so I sat down and I said, you know what, I'm going to start my own business.

And that really just started it. And I got to, and I was working hours. I was doing evaluations. Definitely had to work. Work is what really helped. Yeah. Just creating dollars to throw at it and having a plan when you do create them on what to do with them. Yeah.

Very good. Yeah. Well done. Well done. So I know John and Maddie were your cheerleaders. Who were your other biggest cheerleaders? I would say probably some of my friends as well. I did have some that were like, no, you shouldn't do that.

But my friends, people in my SPU class as well. And, you know, I think also to my boyfriend and then me, like, giving myself that push every day to wake it up and saying, Adriana, you've got to do this. You've got to do this. Love it. Love it. Well done. All right, Adriana, Austin, Texas, $40,000 paid off in 14 months,

making $15,000 to $65,000 a year. Count it down. Let's hear your debt-free scream. Three, two, one. I love it. I love it. I love it. And hold on, Adriana.

We will have Kelly make sure she sends you a copy of Chris Hogan's Retire Inspired book. And for the first of the year, we're going to send you a copy of his new book, Every Day Millionaires, because you're going to be one. I love it. This is fabulous. So proud of you. Very, very well done. Open phones at 888-825-5225.

That is how you do it, folks. Edward is with us in Maryland. Hi, Edward. Welcome to the Dave Ramsey Show. Thank you, Dave. How can I help? We are getting close to ending up step two. We have three out of 11 credit cards left or debts.

Good. Well done. And actually four, really. And that's one of them that I'm calling on is the fourth. It's a defaulted credit card for about $18,000 that they haven't been calling on us lately. So we've just been dumping it, everything else, trying to get ahead. Got it. And that is in the back of the mind.

And we also have PMI on our house. So I'd like to get that taken care of so I can refinance and get out of that PMI. So the question is, do I keep on plugging away at those other three items and not worry about the other one? Right. Or do I attack that at the same time and call them up, try to settle? It's your largest debt remaining in your debt snowball, right? Right. I would just, when you get to it, I would wake it up then but i wouldn't wake it up and now go ahead and get the other three

because they're not calling yeah go ahead and get the other three knocked out as fast as you can sounds like you're making really good progress and you're going to have those behind you pretty quick and then build up some lump sum money so you'll have something to make an offer when you call like ten thousand dollars or something five or ten thousand dollars how old is this debt how long since you paid on it uh since we started about two years ago coming up okay so it's not at any active debt any activity on the account positive in two years no no who is it i went from it went from a credit union to a lawyer and we haven't heard from him once i went to the lawyer okay all right the lawyer is a basically a um you know they're a debt collecting firm is what they are with a lawyer on staff and they're either working for the credit union or they are one of the debt buyers one of the two if it is a debt buyer either way it doesn't matter um18,000 was the balance the last time you did payments on it two years ago?

Correct. Okay, so they will have added interest for that two years. They will have added a lot of late fees, and they will have added a lot of collections fees and attorney's fees and so forth. Okay? All of that can be negotiated away back down to $18,000 or less. And so what I would do if I were in your shoes is I would call them up and offer them $10,000 cash, regardless of if they say there's 30 owed or not. And they're probably going to tell you there's 30 owed.

Okay? I appreciate it. Yeah. And, you know, make the solid cash offer once you get to the point that you have that cash in your hand. And then once you come into agreement with them on the amount, and it's an amount you have, get it in writing. And do not allow them to have electronic access to your checking account. This is the Dave Ramsey Show. Thanks for being with us, America.

We're glad you're here. Larry is in New York City. Hi, Larry. How are you? I'm doing Hi, Larry. How are you? I'm doing well, Dave. How are you? Better than I deserve. What's up? I wanted to give you a little bit about myself. My wife and I were 33 years old. We're debt-free. Good.

We both have a household income of $180,000. We're currently maxing out our 401k, our Roth IRA, and our health savings account as well. Wow. We have about $155,000 in cash, $17,000 in checking, and $273,000 in retirement. Way to go. We feel like we're in a great spot. We live in Westchester County, outside of New York City. It's a very expensive area, and our next thing we want to do is look to buy a home. Yeah.

Beautiful area. Yeah. Yeah, no, it is great. And right now we are living, uh, we're running an apartment that's eight 50 a month. That's a small one bedroom. Um, and we're actually able to get a discount because my employer owns the apartment and is offering it to us at a subsidized rate. Um, so, you know, I look where we're at now and I'm very excited about our future. But at the same time, looking at the mortgages here and also looking at the taxes here for property,

which seem to range from $12,000 to $15,000 a year for the price point we're looking at for a home, I'm just kind of anxious about laying that kind of money down and looking at that kind of taxes over the long run. So part of me is debating moving closer to home, which would be closer to family, which would be either in upstate New York or part of Pennsylvania, where the, you know, 20% down payment here for home could be well north of 60% of the total cost. So I just wanted to hear your opinion on that and think, you know, is it worth moving in a way at this point and taking what we got or to kind of keep it here? House prices would not be the only reason I did that, given that you have the income to live in the area you're in.

If you told me you made $50,000 a year and you said, I want to own a house, well, you're not going to in your area, so you're going to have to move, you know. But you make a couple hundred and you're 33 years old. You're doing great. You're killing it. Well done. So I think the bigger question is not house prices and taxes.

It's where does the 43-year-old you want to live? Yeah. And your wife and raise kids or not or whatever your plans are where do you want to be where do you want your life to be and your life should not only be around your career but it is one of the elements it is one of the things you know you decide for i'll give you an example okay obviously i Obviously, I do a radio show, and there was a tipping point with the Dave Ramsey show 15 or 20 years ago where we had 100 and 200 stations, and we have 600 now,

and we were getting a lot of advice from a lot of people saying the Dave Ramsey show is never going to be a major national force unless you broadcast it from L.A. or New York, so you need to move. And I said, you know, i'm making really good money i i love tennessee i'm a tennessean i grew up here it's how i want it's how i see myself for the next 15 or 20 or 30 or 40 years and i don't really see myself in new york and nothing wrong with new york i just didn't see myself there. And so we made the decision to stay here. And it probably, you know, it's shocking to some of those people that gave advice that we made it anyway. But but but, you know, the point being, though, that sometimes, you know, you do need to live in a

place to do your career. But if that's the only thing motivating you then your life is all about your career singularly and that's bad so again where do you guys want to have a life your career is part of that your home ownership is part of that the quality of life the type of people around you is part of that your your church if you're a spiritual person is part of that and so on yeah and you know where do you see yourself living and you might have you might be sitting where you're sitting right now and it was like 98 career driven and you're kind of looking up going that's not doing it for me or you might be going you know i really just like this area if you love what you do you love the

area you love everything else and the only motivator is house price i would just buy a house there and stay right i think the biggest thing is again is we we are thinking about starting a family and it's we don't have any family in this area and i also know that um you know i'm thinking about once we have a child would one of us not want to work yeah and i think that if we would move uh that could be an option um because, I think we'd have enough of a cushion to make that work for a while. Agreed. I don't think we could cut our household income in half and now make that work here. I agree.

I agree. See, now you're talking, okay? That, combined with house price, combined with everything else, says move. That's what all of that. But it's all part of the gumbo. It's not just, we're not just looking at one ingredient. Right. And then I have one other thing that there's one other kind of option I kind of see with this,

and it's the sportsmen of where I work. If our family would grow, there's the potential that we could continue to be in an apartment that we would rent that would be subsidized by my employer. And then I've thought in my mind, would I then possibly buy a two-bedroom, two-bath apartment and potentially offer, you know, that's a place for in-laws to stay to try to bring family a little bit closer where they wouldn't have to sell their home. I think that is a long-term financial plan that has golden handcuffs. If your employer blows up or there's an ethics breach or you just decide you don't want to work for the guy who's a new guy there

that's a jerk 10 years from now, you're stuck with that plan. That's golden handcuffs. So, no, I wouldn't build it around someone else providing me housing. You've done a really good job of setting yourself up for independence here. So don't retreat from that. I think you're moving. I don't know what it does to your careers, and that's what you've got to think through. And there's no panic.

You don't have to move today. You can do it over the next three years. I don't care. You sit there and make some money, pile up some more the next three years i don't care you sit there make some money pile up some more you know before you move i don't care but it sounds to me like there's enough ingredients drawing you family house price the ability to cut your income in half and still prosper all of that kind of stuff is is drawing you away from you know the more expensive new york city area that's what it sounds like to me. It's up to you, but I'm just listening to you talk.

Hey, man, thank you for the call. Open phones at 888-825-5225. Cody is with us in Salt Lake City, Utah. Hi, Cody. How are you? Good, Dave. How are you? Better than I deserve. What's up? Well, I was curious. My company was recently acquired this year,

and so at the end of December, the 401k that I have with the company that I was working for freezes, and then next year I start contributing to the new company's 401k. Exactly. I know that I would do a rollover. Yes. And I wasn't sure because part of my 401K is traditional 401K contributions, but the other section is Roth 401K contributions,

and then company match and what used to be their pension plan. Yep, roll it all. It's going to end up in different sections. You're going to move some of it to Roth. You're going to move some of it to traditional, depending on how it's structured or you don't have any taxes, but do a direct transfer rollover because you're going to move some of it to traditional, depending on how it's structured, to where you don't have any taxes, but do a direct transfer rollover, because you're going to have so much more control over it, and you're going to have so many more options

that you can invest it in than an old, frozen, previous company 401k that the company's no longer in business. So, yeah, you definitely want to roll that, and just get with your broker. If you don't have one, click SmartVestor at DaveRamsey.com. Put in your info. It'll drop down a list of SmartVestor pros in your area. They'll sit down with you, help you put that together. And it's a pretty easy thing to do a direct transfer rollover.

And if you haven't heard, Cody, I personally invest and I personally recommend spreading your rollover across four types of mutual funds evenly, 25% in each, growth, growth and income, aggressive growth, and international. And that should work for you. Growth, growth and income, aggressive growth and international. And if you'll do a direct transfer rollover, which means you sit down with a broker, you figure out the mutual funds, you fill out the paperwork.

That paperwork is directly submitted to the old 401k. They will send the money directly into the IRA. You do not want them to give you a question. You do not want them to give you the money directly because they're required to withhold 20% on it, and you're going to create a tax problem for yourself. There's no taxes on a direct transfer rollover. So do a direct transfer, direct transfer rollover with this.

It's the proper way to do it, and you won't have any taxes. Hey, thanks for calling in. This is the Dave Ramsey Show. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt. That's pretty impressive, and it could be you this year. Keep listening for more inspiration.