The Ramsey Show - App - There's No Such Thing as "Good" Debt! (Hour 1)

Episode Date: October 21, 2021

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Thank you. Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, host of the Fine Print and Entree Leadership Podcast, joined today by none other than Rachel Cruz, best-selling author and all-around great person. Rachel, it's so good to be with you. Thank you. You know what John Deloney says when I host him? All-around great human being. It's true.

I'll take whatever I can get, George. Well, Ken likes to say colleague, and that feels a little old-timey to me. So I'd rather say friend, great person. She's a mother. Ken Coleman is like a solid 85-year-old in to me. So I'd rather say friend, great person. She's a mother. Ken Coleman is like a solid 85-year-old. He's an old soul. In the heart.

I know. Yeah. We're pals. Yeah. Oh, he loves to say pal. My pal. Well, Rachel, this is a first. Milestone Day.

First time that we have co-hosted the Ramsey Show. I know, George. It's a distinct honor. When I saw it on the schedule, I thought, yes, me and George You were legitimately excited? I was. Okay, that makes me feel good. Because you're great, George.

You're, yeah, and you're driving, you're doing the whole thing. I'm doing it. I'm excited. No training wheels. I know. So it's been a...

But it is, it's great, it's great. You've had a big couple weeks. Number one, you went to Disney. I did go to Disney. And I don't know if you loved it more than the kids did. Oh, man. It's just, it is the happiest place on earth people will will argue that but i'll say what made it so fun is our girls we left baby charles at home so we took we took the six-year-old the four-year-old the four-year-old was just that 40 inches if you know anything about disney world

you you gotta hit that 40 inch mark and then you can do most everything. Most everything. Anyways, they were just game on. I mean, they did every roller coaster. They did Tower of Terror. I mean, they loved it. Little Caroline did Tower of Terror? Oh, we got down, and she was like, Mom, Tower of Terror is so crazy. My stomach was all the way up, and she pointed to her throat.

I was like, I know. Isn't it the craziest feeling? That's amazing. That's a proud mom. But the fireworks, you know, there's something about being there, even as an adult. Like, I mean, I tear up at the fireworks because the song that plays and all the old movies are flashed on the castle. You know, they do this crazy projection.

And it makes you feel like you can do anything. Childlike wonder and joy. It makes you feel like anything is possible. Anything. I can chase my dreams. Anything is possible. Rachel, you're living the dream. That's how I felt. This is so great.

That's how I felt, George. But thanks for bringing that up. I knew it would light you up. And I wanted to start off the show on a good note here. So it's a free call this hour, 888-825-5225. I almost threw like 11 numbers in there for fun. 888-825-5225. Rachel and I would be happy to take your call about pretty much anything. I mean, we'll give it a shot, you know,

whatever you're going through. Sometimes people call and they just need some affirmation. They go, I think I know that this is the answer, but, or I know what to do, but I just can't bring myself to do it. That's right. Absolutely. Well, and it's about everything. And that's what I love. I love the format of this show because I love diving into people's stories and problems or celebrations, all of it. And we kind of get just a four-minute little insert into their life. And so we just want to talk, yeah, and hang out and ask good questions, hopefully, to you, the listener, to get you to think and give some guidance on what we've experienced over a few decades of doing this. Oh, yeah. Not your first rodeo, Rachel.

Well, I'm excited. Let's do it. Let's go to the phones. Tyler is in Tallahassee. Tyler, welcome to The Ramsey Show. Hey, how are you guys? Doing great. How can we help?

Hey, so I have kind of a conundrum right now in my life. I work full-time as a a maintenance guy and I'm also, I own my own business. I have a small blueberry farm and my farm is almost to the size where I can say, you know what, let's just forget maintenance. We're going to do farming full-time, but it's nice to have two incomes right now and I'm kind of like torn as to what I should do. But where I'm currently located, like in my job, I'm as high as I can possibly get. Like I cannot make any more. Like there's nowhere else for me to go.

I'm already as high as, you know, I'm going to be paid for basically the rest of my career here. And so I'm kind of like on the fence of whether I should make the big jump into, you know, own my own business and become my own, you know, boss or stay where I'm at. And I'm only 26 years old, so I'm kind of like, the 26-year-olds are not supposed to be making these decisions right now. Yes, you are. You're doing it. You're crushing it, man. Tyler, you're killing it.

Okay, so my question is, I think I know the answer, but I'm going to just ask, what do you want to do full-time? Do you want to be in maintenance full-time or do you want to do the farm full-time? Oh, I would love the farm full-time. I just, I love it. Yeah. So what do you make at your full-time job in maintenance? Around 41 right now. And that's the max that you'll ever make? Yeah, we get like a 3% raise every year, but that's just cost of living. So, but yeah, I'm as high as I'll ever make. Okay. And what's the farm bringing in right now? So this year was our first actual crop we made. We probably netted about 40.

Next year we're going to net around 60, and that's just, you know, this is only like 10 acres. And I have a lot more land that I could expand on if I didn't have, you know, 40 hours a week that I was working as a maintenance guy, you know? Yeah. Well, Tyler, whenever we talk to people that have kind of this side thing that they love and it gets built up to a point to transition full time, you know, Dave always says that it's not like this leap of faith

and just picture like a boat and a dock, and we don't want you stepping off the dock into water. You want the boat close enough that maybe it feels a little uncomfortable. It's a little bit of a stretch, but you can still get on. And these numbers, Tyler, like if you were saying, I'm making 15 grand at the blueberry farm, and I think I want to jump into that, I'd be like, let's give it a little bit. But you've proven it and obviously proven a level of business because you're going to be growing next year. And so, yeah, I mean, if it's comparable to what you're making now, that's kind of the perfect situation, Tyler. And you said that you're going to miss this extra

money from having two incomes. Where are you guys at financially? Are you out of debt completely? Do you have an emergency fund? Well, we do have emergency fund, and that's part of like, it's taken us a lot of money to get to where we are um we owe a little on our house still probably like a hundred thousand um we i just bought a truck that i basically had to um we got it used but we still owe like i think twenty thousand on it and then the farm has its own you know that we we did it with like a llc to you know completely separate to where if something was to happen to the farm business we would never know, we were not putting our house up against anything. So we wouldn't lose our house. So you've got farm debt plus the truck other than your primary residence,

your mortgage. Yes. Just a little bit, probably like 30 grand left on the farm. But my hope is next year to pay that off using some of that extra. So I'm not, it's kind of a twofold deal because I'm like maxed out on my physical strengths right now. Like I cannot, you know, I can't expand, you know, off of working 40 hours a week full time as a maintenance man also, you know what I mean? Because I work every night on my blueberry farm. Yeah, I bet. You're hustling, man. I'm proud of you. I think what you need to do here, you got to get out of debt. We got to get rid of the truck loan. We got to get rid of this farm debt so that when you go down to one income, you're not freaking out. There's not anxiety around it. Your budget's not too tight. That's what's going to set you up for success.

So if I'm you, I'm keeping this full-time job until I can get out of debt. And as soon as I'm out of debt and this farm is bringing in some steady income, I'm going to take that nice little walk off the dock, Rachel. Yeah, that's right. No, that's a great point, George. Because again, setting yourself up, well, having two incomes right now, you're going to be able to grow this farm. It doesn't have to be tomorrow. It can be in six to eight months once you pay off the truck. Yeah. And the blueberry farm, that just sounds like a nice life, Rachel. If I could just jump today, I'd probably start a little blueberry farm. I love blueberries. I do a little blueberry that's great sounds

awesome way to go man hey this is the ramsey show give us-based and budget-friendly way of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a nonprofit organization that helps members carry one another's burdens with health care expenses, and they have successfully shared each other's medical bills for nearly 40 years. See if CHM is right for you by visiting chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. I'm George Campbell, joined today by Ramsey personality, bestselling author,

host of The Rachel Cruze Show. You guessed it, Rachel Cruze. This is awesome, Rachel. It's been a big week for you. Your wallet is one of my favorites. And here's the thing. I'm biased towards the color camel for obvious reasons. But you released a new color this week that's very exciting. Yes. What is it? Release it to the world if they don't know yet.

Oh, guys, I'm so excited about this. So it's by popular demand. This is the one color that people were asking for. So we were like, okay, we hear you and we will deliver. But it's called Classic Brown. Oh, nice medium brown there. Yes, I know. So this is really, I think, a perfect gift for people.

I wanted it before all the holiday craziness happens. I was like, I want to get it out before. Because if you have a lady in your life, if you are a woman, and you're like, you know what? I want to make budgeting just beautiful and fun and stylish. There's a lot of ugly wallets out there. I know. Especially, and here's the thing.

We preach the envelope system. That's right. And you have built-in slots, which is incredible. That's right. For each category. Yes. So with this, yes, there are four slots for your cash specifically and lots of debit card and card space from membership cards all of that card i know i

know but it's um it's great because we partner with join which is an incredible organization in india and they employ people out of really just hardship um there in that country and teach them a skill and a trade. And they're the ones that truly make these. And each wallet, too, I love that you get a card with the person who made it. That's so cool. So you get their signature. But it's authentic, handmade, really, really great quality.

I mean, you can probably smell it from here. I know it does. I mean, it's like, oh, it's so good, you guys. So, again, if you want to get this for a lady in your life, if you are a lady and you're like, I want this for Christmas. So make sure it's available. Not your husband's, your man. That's right. And say, hey, here's an easy gift.

Here it is. Yep. So it's available to order now. We'll ship in early November. And so you can text RCBROWN to 33789 to get all the information here on the new Classic Brown Wallets. I love it. We had the founder of Join come speak at a devotional for our team. She was absolutely incredible and hearing the stories and the impact and how passionate she is

about this, it just made me happy that we partnered with cool people like that. Yes, and there are incredible organizations out there in the world. That's kind of what I, I don't know, I just, I love I feel like it's more than ever it seems like, but Join is definitely one of those that you're like, okay, when I purchase something like this, like obviously it's going to help me with my budget, my money, everything we talk about, cashing out certain categories in your budget, helping you stay on track. But literally

this purchase helps someone on the other side of the world. And it's, I don't know, there's something powerful about that. I love it. Yeah, absolutely. Well, congratulations on that. Open phone lines this hour, 888-825-5225. Jamie joins us in Philadelphia, Pennsylvania. Jamie, welcome to The Ramsey Show. What's going on, guys? Hey, how can we help? So I've been listening to you guys for the past couple of weeks, but I get to read and look into the steps for financial peace, I guess.

I'm 19 years old, and I plan on buying my first duplex pretty soon, but I'm going to be purchasing with a mortgage. I plan on – like, I've been hearing from a lot of you guys to stay out of debt, but I also heard from other sources to stay out of bad debt. So I was just curious, like, what is the difference of, like, bad debt and good debt, I guess? I mean, I plan on renting out both sides of duplexes so i'm gonna have some cash on top of it but yeah i'm just pretty much curious on so i guess that's pretty much yeah so jamie i'll say what the world says what the culture is saying

when they're saying quote unquote good debt it it's usually in purposes of an investment. You know, people say, well, student loans are good debt because it's an investment in yourself. They'll talk about a mortgage being good debt or if you're taking debt out on your business because you're gonna make money. So like that's the way the world kind of operates when it comes to this system. But here at Ramsey, I'll just tell you we're pretty weird. And so we say all debts, all debt is bad debt. Now, a mortgage, I'll say this with the asterisk, a mortgage is the one type of debt that we will not yell at you for on your primary mortgage.

So other than that, though, and the reason why, Jamie, is because one of your largest wealth-building tools out there is your income. And for a lot of people, 78% of Americans are living paycheck to paycheck and the money comes in, their income does, and it's going out on average $500 something to a car payment. They're paying their student loans. Average family has $16,000 of credit card debt. I mean, like their income is leaving.

So there is no margin in their life to do things like giving investing saving even spending on what they want in order to do those things they have to go deeper in debt right so it's like the cycle that ends up playing and then what we have found too is over the course of time that cycle just wears on you emotionally spiritually financially you're just not able to seem to get traction. And so the idea of avoiding debt completely gives you power. It gives you control. It gives you choices. When you don't owe anyone anything and you want to quit your job and move to another job, you can because you don't have bills. There is something powerful when you don't owe money to anyone. That would be my take. And George, you... Yeah. Yeah, well, Jamie, the thing is,

the people who tell you there is such thing at good debt, they don't pay your bills. You do. And so when it comes down to debt, really it's stealing from your income. And so I know you want to get into this duplex and you're 19. I mean, that's very impressive.

Yeah, it is, absolutely. And I think it's awesome that you want to do this. But I would challenge you to go against the grain when it comes to pretty much anything society says. So when it comes to good debt versus bad debt, yes, we do believe that all debt is bad because it steals from your income that you work really hard for. Do you have any debt right now? I mean, I went to trade school and I ended up paying like, it was like $25,000 total. So yeah, I do have debt, but I make 80K school and I ended up paying like, it was like 25,000 total. So yeah, I do have debt, but I make 80K a year.

So it's like- Wow. What do you do? I'm curious. It was an investment. It's HVAC, so heating, ventilation, air conditioning. Wow. I mean, that's why I didn't look at it as like too terrible.

And that's why I'm calling you today because exactly like if you guys think that like investments like if you're buying a mortgage to like maybe make some more money you know and it's not necessarily a bad thing like say i get the house for under market value and it's worth more than i've paid like that's what i was pretty much curious about obviously you guys cut me off a lot yeah i appreciate it thank you no absolutely and i'll just kind of tack on to that jamie too that, that, you know, when it comes to people try to play the math game so much when it comes to life and money, right? And so that idea, hey, I'm going to, you know, people say, well, I'm going to borrow on my

mortgage because I can actually put that money in the market and borrow against my house because the math works. I can make more in investing or I'm not going to pay off my mortgage because there's a math game that we can play all day. But one thing, Jamie, just to note that people do not take life and risk into consideration. People don't take in 2008 when the market completely crashed, the housing market, and people that had these mortgages that thought they were okay went into foreclosure. People didn't factor in a recession where entire industries were out of work. I mean, there are things that happen in life.

So when you don't have debt, even a mortgage, but when you don't have debt, you don't have risk. And there is something about that that is huge. And even the student loan idea, and I know you went to trade school, you said, and you took out money and it was an investment in you and all that, which is great. I don't want to shame you for any of that. But also pushing people to think differently, to know that I can actually go get an education. I can actually go to trade school and do things that I don't have to take out debt. So we really do here at Ramsey, we push against these messages because what we have found time and time again is that people live with this debt and

it eats into their income. And then it eventually is this thief that it steals your peace of mind, it steals your sleep. And again, there is something powerful when you don't owe anyone anything. Yeah. Rachel, and we talk about this all the time, but the quickest way to building wealth is to get back your greatest wealth building tool, which is your income. And so, Jamie, I think it's awesome you want to get this duplex, but you're telling me how you have this debt and you're wanting to get into this investment property or your primary residence. So I would challenge you with this amazing income you have, pay off all of your debt first. Get a fully funded emergency fund of three to six months of expenses if you don't already have that. If you do have some money sitting around, attack this student loan debt first. That's baby step two. I know you've been

listening just for a few weeks now. Baby step three, you're going to get that emergency fund in place. And then we call it three Bs where you save up for that down payment on that house. And we want you to do that on a 15-year fixed rate mortgage with a payment that's no more than a quarter of your take-home pay. So a lot of numbers there, but all of this is so that you can win with money so that you don't have this anxiety and burden in your life when you're trying to do too many things at once. So that's the way to do it, man. You're 19, you're making a great income,

and shout out to the trades, man. 80K a year, 19 years old, because you went to trade school. Amazing. Way to go. This is The Ramsey Show. People always say, when I get this promotion, I'll be able to make a real impact. Wrong. When you make a solid plan on how you need to grow, you can become the leader you want to be.

And that's why Ken Coleman, America's career coach and national bestselling author, wrote his new book, From Paycheck to Purpose, The Clear Path to Doing Work You Love. And it's available for pre-order right now. If you want to grow or create a legacy in your career, you need this book. It's not just a concept. It's a proven, clear path that will walk anyone in any industry through a step-by-step plan to take their career to the next level. Plus, if you pre-order From Paycheck to Purpose today, you'll receive our Get Promoted bonus pack for free,

which includes the audio book, e-book, disc assessment, an exclusive talk from Ken, and access to our live event and more. Pre-order From Paycheck to Purpose, Ramsey Personality. Joined today by Ramsey Personality, Rachel Cruz, and on the debt-free stage in the lobby of Ramsey Solutions, we've got Jason and Katie. How are you guys doing? Hey. Good. How are you?

You excited to be here? We are. We are so excited. You guys are just a cute couple. I'm excited. Y'all are. I know. I'm pumped for this story. Where are you guys doing? Hey. Good. How are you? You excited to be here? We are. So excited. You guys are just a cute couple. I'm excited. I'm pumped for this story. Where are you guys from? We are from, I'm originally from Georgia, Valdosta, Georgia, and Katie's from Hattiesburg, and that's where we met. Very nice. Okay. So how much have you paid off? $130,000 in 22 months. Oh my gosh. Whoa. Okay. And what was the range of income during this time? I started out at $110,000 and then from there we moved up to around $155,000.

Heck yeah. So that's where we're at now. Okay. So whose debt was this? All mine. Ah. All student loans. All student loans.

All student loans. So was Katie on this journey or was this kind of a solo journey and she came along? It started on a solo journey and she came along after that. got married back in july we met two years ago um before that and everything so okay everyone listening cannot see you obviously people on youtube right now because you guys are you look young can i ask how old you are i'm 27 and i'm 22 27 22 so you are debt free at 27 years old. Yes, ma'am. What kind of debt was this?

So this was all student loan debt from my grad school, really. $10,000 of it was undergrad, but the other $120,000 was from cardiovascular perfusion school. Wow. So I went to Nebraska, and perfusion school is not cheap. It sounds expensive. I just learned that word, and it just feels like an expensive word. It feels like six numbers. I owe you money every time I say it.

So what is that? So basically it's a small field, not a lot of people know about. We operate the heart-lung machine during heart surgery, keep the blood flowing. We're basically the heart and lungs for a patient whenever we go on bypass. We're essentially the bypass for them. And it's a small field. It's less than 4,000 perfusionists in the United States total. So that's what you do full-time, obviously, because you're making a great income.

Yes, ma'am. And Katie, what do you do? I'm in grad school for accounting. Awesome. Wonderful. Some smart people here on this stage. And Katie went to school debt-free completely. And now she's got a GA position, which pays for her school, too, which is awesome. So you're going grad school debt-free

too. I assume so, because you guys are on the debt-free stage together. So that's amazing, Katie. Well done. Thank you. This is amazing. So 22 months ago, you were sitting there with $130,000 in debt. Most people just go, I'll pay it off when I die, right? What made you get on this journey 22 months ago? So it was really four years ago. I started listening to Dave Ramsey and stuff like that. And whenever I was in perfusion school, I started out, I was in Minnesota, you know, on a rotation there because after our first year, we have to go on rotations. And when I was in Minnesota, I was mountain biking one afternoon.

And I just was, I love to do anything outdoors. And, you know, after a long day at work that's what I was doing and I was just like I've got so much debt and I've got to get a plan figure it out for something so for that entire year every morning when I was going to any of my rotation sites I would listen to the Dave Ramsey show listen to the podcast and I was hearing all these people talk about their debt-free screams how they paid x amount of income they had whatever job and they were doing it. And it was a little bit of debt, and some people it was a ton of debt.

And it was just like, I know I can do this too. And so my motive was, you know, right after I graduated, you know, a ton of people in my class, you know, or not a ton of people, but a few people, they went out and bought houses. They went out and bought new cars. Some of them went and bought pets. All these things that add up. Nothing wrong with pets. I'm just saying dogs are expensive sometimes.

But anyways, so a lot of people went and bought a lot of stuff, and I was just like, I don't want to be one of those people. I want to be one of these weird people. So basically what happened was I took this job in Hattiesburg. It was a good income, and Mississippi's pretty cheap to live at. And so, you know, with that, I was just like, I've got to figure out a plan. And so my plan was, you know, in total money makeover, Dave talks about, you know, pay off your smallest debt to your largest debts.

And I had my undergrad loans, which were $10,000. You know, so I paid those off in the first two months I started working. And then after that, I had four loans that were $20,000 were 10,000, you know, so I paid those off in the first two months I started working. And then after that, I had four loans that were 20,000 a piece. And I just started chunking away at each one of them one at a time, you know, paying off, I'd pay off 20,000 and then be, oh, this is exciting. Let's do another 20,000. And I just kept it rolling every month. I'd pay a minimum of 5,000 on these loans. And I have my check split where 25% of it would go on my bank account that I used and the other 75% I knew it was just going to go straight to the debt straight to the debt every month so I wouldn't get like sidetracked with that and so then the biggest one was like 37,000

you know from perfusion school and that was the last one and that one was the most difficult you know really but what i would say what really you know helped a lot those first six months were extremely difficult you know because everybody else was buying stuff i wanted to go play golf all the time i wanted a golf membership i wanted to join the country club all this stuff and i was just like i can't do that right now maybe afterwards but not right now and so um there's two things that really kick-started after those six months that made me like okay i'm kind of seeing the light in the tunnel. You know, COVID happened.

And, you know, that was really bad for a lot of people, a lot of businesses. And I hate that for everybody. But really, for me, that was one of the best things. Because, you know, everything was shut down. I felt like I wasn't missing out on anything. We were cooking in a lot. You know, I'd go see Katie up in Starkville. We'd eat in.

You know, she'd come to Hattiesburg and we'd eat in. You know, we couldn't go out to eat. And so that was a lot of what we did. And we couldn't go to concerts, couldn't go to football games, nothing like that. And so it made it a lot easier. And, you know, the president put the student loans at 0%. You know, so I told myself, now I've got to put six thousand away every month it was a little more difficult but I just made sure it happened and then we started

talking about marriage you know and so I told Katie before we got married I was going to be debt-free and have six months of my emergency expenses saved up and we did it you know and she was a great supporter. Were you just so attracted to him? Were you like, man, this guy is absolutely going to take care of all these situations? Literally, there are so many couples that they are not on the same page. And I talked to a lot of women, and they just are begging for their husband to get on board. Like, I just want my husband on board. And man, we just did it.

It was awesome. We had to think of a lot of things to do without spending money when we were... Because we started dating like right when you graduated. Yeah, about a month. So he was paying off his loans. And so we would go do a lot of outdoor things and cook in, like he said. You live like you were broke so that later you could live like you're not broke. That's right.

It's the best. We did a lot of like, you know, up in Starkville, we'd go hiking. We'd drive to North Alabama, go hiking. I hiking i mean hiking's free it doesn't cost anything so that's what that's a lot of what we did now it's one of our favorite hobbies that's incredible man so any other cheerleaders in the story obviously katie was probably the biggest yeah katie was definitely the biggest um my family was definitely supportive of me as well and her family um also a lot of people thought i was crazy like trying to pay off all this debt they just looked at me like there's no way you'll do that like

good luck but that's not gonna happen and i was like if i set a goal i'm gonna accomplish it don't challenge jason man don't get in his way it's impressive but even the things you set up jason like having 75 of your paycheck going to right like? Like having all this, this even manual. So you can't get in the way, right? You're like, I'm going to put things in place to protect me from myself. Right. Absolutely. But it is, it's impressive.

And you, I mean, you did it in less than two years and there, there is something. And even the student loan thing where I, when it went to 0%, like you took advantage, a lot of people took their foot off the gas and said, awesome. I get to just coast. And instead you did such a smart move of stepping on that even more. Yes, absolutely. And another thing too that I failed to mention was, you know, at my clinic that I work for and all, so we get access to the doctor's lounge

and they include, and everybody's going to laugh when I say this, but they include like free meals for us for lunch, you know, every day. And so what I would do is I would eat half of my lunch at work take the other half home and eat it for dinner and people would like say all kinds of things they laugh at me thought it was the dumbest thing and i said i'm trying to get debt free this is free this is part of my salary so this is what i'm gonna do now sometimes we would share it he's like bring it home and we'd share it for dinner this is lovely it brings him togetherall are adorable. It brings them together. Well, let's get to it, guys. We've got a copy of The Legacy Journey for you. That's the next step in your very young lives.

And a copy of the Total Money Makeover for you to pay it forward to maybe another young couple who's starting out their life with student loan debt. So let's get to it. Jason and Katie from Hattiesburg, Mississippi. $130,000 paid off in 22 months, making $110,000 up to $155,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Woo! Yeah! There it is. Look at the smiles on those faces, Rachel. I love it. That's as good as Disney World in my book. Oh, it is. Well, that's life-changing.

I love seeing young couples start off their married lives on a good foot. So good. On a good foot. This is it. This is The Ramsey Show. I'm George Campbell, host of the Fine Print and Entree Leadership Podcast, joined today by none other than Rachel Cruz. You know, Rachel, we just heard a great debt-free scream about paying off $130,000 in student loan debt.

And this is an absolute crisis. You've dug into it a lot. I've dug into it a lot. And if you're not strapped with student loan payments, the odds are you know someone who is, someone that you love, family members, friends. Millions of people are putting their lives on hold. They can't buy a house or have kids

because they feel stuck. Or even worse, they're waiting and waiting and waiting for the government to save them with student loan forgiveness. What a joke. So our team has produced a brand new feature film documentary called Borrowed Future, and it is finally out. It uncovers the dark side of the student loan industry and exposes how the system is built

to work against you. You'll see Dave Ramsey weigh in on the epic failure otherwise known as the student loan program, along with featured interviews from industry insiders and thought leaders like Seth Goad and Seth Frotman and Dr. John Deloney. We are coming at this issue hard, folks. We're taking big swings at the student loan industry with the goal to arm parents and students across the country with this mind-blowing truth. You do not have to take out loans to get a college education. You can be a student without a student loan,

and you can graduate debt-free and avoid the predatory student loan industry. So go watch this thing. Borrowed Future is available to watch now on Apple TV, Amazon Prime Video, Google Play, or at borrowedfuture.com. We are taking your calls this hour, 888-825-5225. We're happy to answer them. And Carla is in San Antonio. Carla, welcome to The Ramsey Show. Hi, guys. Thanks for taking my call. Absolutely. How can we help today? Okay. So my spouse and I, we're currently wrapping up on Baby Step 3. We'll be done at the end of the month.

And as we start preparing for the 15% into retirement, I have a question about volatile income. So we have some side hustle income, and my spouse is a new real estate agent. So I was wondering, is it okay if I take my fixed salary and save 50% of that and then take the side hustle money and throw it at the mortgage? Or how do I just, or I guess like, how do I balance that into the 15%? I guess is my question. Okay. So you've got, you have your full-time job and you have some side hustle income and you're saying, Hey, can I invest just my full-time job and not the side hustle income? Right, because it's so volatile. Yeah, exactly.

Yeah, that's a great question. We tell people to invest 15% of their household income. That means any money coming in that year. So if I'm you, I'm taking 15% of the side hustle income, and I assume you're still going to have margin left over because you're debt-free with an emergency fund to still put that money towards your next step, towards the house. Is that right? Yeah. Well, kind of. Yes and no. I was thinking, sometimes it's a good income, sometimes it's not a lot. And so just a little extra towards the mortgage and like really attacking that with team, I don't know, like a better use of time, I guess. I don't know. I'm not really sure how to, how that would work. Do you guys have kids or is it just you two? No, we have, we have two kids. Okay. So we also tell people after the 15% to be investing for the kids college.

Have you guys, will you guys plan on doing that after you're investing 15% to be investing for the kids' college. Will you guys plan on doing that after you're investing 15%? Yes, that's the plan. So it sounds like you might need this income not for paying off the house right now, but to at least make sure we've got the kids' college taken care of first. Okay. Okay. So I love the idea. I can tell that you are very excited to pay off this house, and I'm in that stage now too in baby step six. We don't have kids, so we're not as worried about college at the moment. But what I'm telling you is to take 15% of that side hustle income, and you're still going to have 85% of that side hustle income to put towards your other goals. And you should have margin in your full-time jobs to put towards those other goals. So if I'm tracking with you,

you've got a few steps before you're getting to the house payoff. Okay. So then how do we take the 15% of the volatile income? How do we do that month over month if it changes? We're not really sure of what that looks like. So do we just take another 15% off of that as well and put it away? Exactly. Yeah. If $1,000 comes in, well, you're going to take 15% of the $1,000. If $100 comes in, you're going to take 15% of that $100. Okay. So that keeps it simple, and that way you're not racking your brain each month. Yes. And Carla, you know, my husband and I, because I'm on mine and some of his, is a lot of commission

based, so there's some months that is much larger than others. So we'll even true up at the end of the year. We try to be as consistent as we can, and then we'll up at the end of the year. We try, you know, be as consistent as we can. And then we'll look at the end of the year to make sure, hey, have we did we do the 15%? And if we didn't, we and we have a money market account to the side, and we will pull like we we make sure it's that 15 and beyond because we're on baby step seven, but but making sure that's hit because again, sometimes it is hard. I understand it's life and it's crazy. And you know, month months just fly by,

and sometimes you're not as diligent every single month. So just truing up at the end of the year, too, just to double-double-check is something that we do as well. Carla, how much of your take-home pay is this house, the mortgage payment right now? How much of my take-home pay is the mortgage? I'm not really sure. Our mortgage payment is about $1,800 a month, and we make, at my full-time job, I make $93 a year.

Okay. And that's not your full household income, or is it? No. So that's what we kind of live off of, but that's what we've been doing. So we live off the full-time income, and then all this side hustle volatile income is what we've been saving for our emergency fund then so now what we're trying to do is like okay how do we i guess capitalize on this fact that we have the room to just live off of one income yeah um so my 93 a year covers all of our expenses everything and then the rest of it we're just wondering like can we just really

take that and be aggressive and throw it toward a mortgage? But, you know, I guess what I'm hearing is that we need to take also 15% off of that and throw it into retirement and baby step five as well. Yeah, don't forget about that baby step five, for sure. And the reason I ask is to make sure that this mortgage payment isn't just like eating up your entire income to where you don't have that margin. So you're doing the right things. We just got to add that step in for college and that the mortgage payment will come and you'll get rid of that thing in no time with your gazelle intensity that you guys have. So I think that's awesome. Andrew joins us in Indianapolis. Andrew, welcome to the Ramsey Show. Hey, Rachel and George. Thanks for taking my call. Absolutely. How can we help? Yeah, so just a quick question. My wife and i are on baby step three and we've got about 5 000 in

our emergency fund um i'm in a commission-based job and so a lot of my pay gets deducted at a 22 tax rate um which we are not anywhere close to that so um i did some calculations and our tax refund is going to be, um, pretty large, pretty substantial, and it will complete our baby step three, um, in March of, of 22. And so I was just wondering, do we just continue filling up that, that, that, that baby step three, even though it's like only two to $700 a month? Um, Or do we go ahead and stop and start investing like we're in baby step four, five, and six, knowing that that emergency fund will be complete in March when we get our tax refund? Yeah, I wouldn't wait until that tax refund comes in. I mean, you guys sound like you're

on this plan. I would keep saving up for that emergency fund. And when that refund does come, you can use that towards your next steps. So maybe that's a down payment on a house or whatever that goal may be. And then obviously you're going to be investing that 15% of your household income into retirement once you have the emergency fund. But I don't want you waiting till March. That's like six months from now. You guys could be away further along if you just do this thing, you're on your own. Yeah, absolutely. And the great thing is keep chipping away at it because when that check does come, if you guys haven't hit your savings goals,

again, you know that check's coming. So when it does hit and you actually have the money, then you can say, okay, great. Here's a couple of thousand from that refund that we can put here. And then we can throw a big lump sum maybe into an investment or like

George said, you guys are saving up for a house. So you're going to be able to use that money. But still, I would still, because something could happen in January and you're going to need an emergency fund. money. But still, yeah, I would still, because something could happen in January and you're going to need an emergency fund. That's what it's there for, right?

It's there for when life happens, or not if, when life happens, because it will. So that's awesome that you know you'll be getting this refund and that you will have some cash. Can you not adjust the withholdings? No. This is a forced 22%.

I've tried. Yeah, I've contacted every HR department. Wow. I just don't like the government holding onto your money interest-free. I don't like that at all. You and me both. But, all right. Well, thank you. Absolutely.

Yeah, thanks for the call. Appreciate that. Yeah, and I think, you know, it's a great question that he asked, because I think for a lot of people, whether it's a bonus, an end-of-the-year bonus you know is coming, a tax refund, you know a chunk of money is coming, but to still be diligent in the moment to say, okay, I'm still going to work this plan. It takes intentionality, but then when the money does hit, then it's great. Then it's just the cherry on top.

I just love when things are in your control and you can just decide to save up for that emergency fund instead of hoping, waiting. I don't like that at all. I'm impatient, I guess, Rachel. Who knows? Well, that puts this hour of The Ramsey Show in the books. My thanks to our board engineer, Ben Hill, acting producer, Kelly Daniel, and many other people that keep this show afloat. Of course, my co-host, Rachel Cruz, and you, America. Thanks for listening in. We'll be back with you before you know it. This is The Ramsey Show. Have a friend or family member that needs a daily dose of Ramsey advice in their life?

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