The Ramsey Show - App - THIS Is the Shortest & Surest Path to Paying Off Debt (Hour 3)

Episode Date: April 12, 2022

Dave Ramsey & Kristina Ellis discuss: Where to save money for a house, How to pay for college without taking out loans, The shortest and surest path to paying off debt. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, 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. Christina Ellis, Ramsey Personality, best-selling author, is my co-host today as we take your questions about your job, your career, your relationships, your mental wellness, your money, your wealth, your whatever you want to talk about, your life. It's what we're here for. The phone number is 888-825-5225. Shadrack is in Utah. Hi, Shadrack. How are you? Hey, Dave. I'm good. How are you? Better than I deserve. What's up? So, my wife

and I are thinking we're hoping to buy a house in about five years. I'm a junior in college. I've also been working full-time as a software developer for a year now. And we have $30,000 saved beyond our emergency fund that we're planning to pay for a master's degree.

I have a really inexpensive program and our next car. So our next thing is we're saving for this down payment, and we're wondering if we should put that in a Roth IRA and what the advantages and disadvantages would be. Now, I do not use Roth IRAs to save for house down payments. Is that what you're saying? Yeah. Yeah, I wouldn't do that, no. You know, I would just put it in something like an index fund, an S&P 500 fund and let it sit there. If it's going to sit there five years, that's a long enough period to ride the waves of the market out. But and you'll make a little money on it.

The truth is that in a five year period of time, the amount of money that will grow or the amount of taxes you would save screwing around with a Roth or whatever it is is not really what's going to get you the house when you actually run the math out you know you know let's say you save 50,000 bucks okay and it makes 10 a year all right that's five thousand dollars a year five thousand dollars does not get you into the house the fifty thousand dollars gets you into the house and so the fact that you save money and don't spend it is where your house down payment comes from. It's not from the whoop-de-doo investment, and it's not from the whoop-de-doo tax savings. Okay, so it's not tricking the system that gets you the money. It's you putting the money in the stinking account. That's what does it.

So that's how you're going to get there. Way to go, man. How old are you? I'm 23. Impressive. I love it. So that's how you're going to get there. Way to go, man. How old are you? I'm 23. Impressive. I love it. Hearing you're a junior in college and you're having that forethought is amazing. You guys are on a great track. Yeah. And you're going to make some bank as a software engineer, man. What are you making now? Right now I'm making about $55 as a junior developer.

I'm increasing that with side work, and I'm hoping after another year or so to pivot to a new role, probably at a new company, and hopefully increase that by $30,000 or $40,000. Oh, yeah, you will. If you're a Dev 1 and you keep increasing your skill level to Dev 2, Dev 3, you're going to triple that easy, if not more, depending on, you know, the area you're in and so forth. And why are you getting a master's in this? What does that give you? So I'm in an information systems program,

and they have an integrated fifth-year master's program where I get a master's of information systems management. What does that give you, though, in your world? Because, you know, I've got, I probably got 300 developers working on my team, and I've never considered whether they have a master's or not. It never comes up in the hiring process. All I want to know is, can they do the code sure um i've been talking with some some people who are a few years into the field now and are are looking into management positions they've a few of them have expressed that it's given them a leg up on their peers who are now feeling we need to go back and get an mba or something okay if you're going into leadership and into management then

i'll go with the masters right if you're doing this to get code if you're doing this to be to do code and to be a software developer no i wouldn't i wouldn't waste my money okay you see the difference because the mat because the masters is not going to increase your code your your your ability to code your ability to go into the upper echelon of coders. Sure. And start doing platform and architecture and all that. You don't need an information systems master to do that. Your certs will do that, and hands-on work in the environment that you're already in will do that.

The only reason I know this is because I have a whole bunch of them on my payroll, like millions and millions of dollars worth of them. And so I've had to learn it because I give them a lot of money so i kind of wanted to know what the flip was going on so that that we do not hire people now we do have some people with graduate level degrees in leadership and i'll go with that that that does assist you in that process but the uh the computer world the information systems world is not a postgraduate world by and large right well i think it's amazing that he's working at the same time so many juniors in college are The information systems world is not a postgraduate world by and large. Right. Well, I think it's amazing that he's working at the same time.

So many juniors in college are just kind of coasting still. And he's making money, too. Right. So he's gaining experience. And even if he gets that master's degree, if he keeps rising through the ranks in his job, he's going to really win when he gets in the workforce. Absolutely. Very, very, very well done. Open phones at 888-825-5225.

I understand what you're doing now. Go for it, Shadrach, by the way. I agree with you. Have at it, brother. And don't get too far ahead of yourself on buying the house. Let's get this education stuff finished, get this career going, and then we'll get over there and buy that house. But, you know, the trick to saving money for something like that on the short term

is how much you put in not how much the investment makes i gotta tell you christina i'm excited about dr john deloney's book coming out next week this is um this book has been we've been talking about it in pre-sale for quite a while and this is a book that is it's as if dr deloney is sitting across the table from you doing personal counseling with you. When you read the book, and I've read a lot of psychology books. I love that field. And I've read a lot of them, done a little bit of post-grad work myself a thousand years ago in that world. And I just love what he does.

I love how he does it. And when I read the book, I felt like he was coaching me. It was, I, you know, I got a lump in my throat. I'm like, John, you know. So it's pretty incredible. The stuff he works with on relationships, how to have a more restful life, a peaceful life. It's financial wellness for people who aren't sick, you know. Or if you are sick, it's okay.

He'll help you with that, too. But, you know, it's like when you say mental health, sometimes people think crazy, right? And this is not like crazy. This is like we're all a little crazy, okay, kind of book. It's that we all need a little leg up. We all need a little help in relationships. We all need a little help dealing with our story from our past. And it's Own Your Past, Change Your Future.

That's the title of the book. It comes out next week. It comes with one month of weekly free therapy sessions from the folks at BetterHelp. It comes with the audio book version, the e-book version. It comes from all of this with $20 if you pre-order the book. You do not have but six days to pre-order the book. It is coming out next Tuesday.

You will have missed all these free goodies. So go order the book right now. We will give you the stuff and ship it to you next week, and all for $20. And I promise you, this is going to change the way you feel, the way you look at your life in the past, the way you look at your life in the future. And it's touched everyone who's read the book, including me.

I've heard some incredible testimonials from people who thought, you know, I'm just reading this to be nice to John, but it changed my life. It's rocking, man. Yeah. It's really good. It's powerful. RamseySolutions.com. You got to get John Deloney's new book.

This is The Ramsey Show. I just saw a study that really made me sad. It showed that families owning life insurance in the U.S. was at its lowest point since the 1970s. After what we've been through the past few years, I'm just lost on how people don't make this more of a priority. How are you going to make sure your family needs are met if something happens to you? This is why getting term life is an absolute necessity. Rates have never been cheaper and the whole process to apply is pretty simple with many companies not even requiring an exam anymore. This is why I send you to Zander Insurance and I have for almost 25 years. They'll make sure you get the right

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RamseySolutions.com slash smart tax. Andrea is with us in Kansas, in Wichita, Kansas. Hi, Andrea. Welcome to the Ramsey Show. Hi. Hey, what's up? Well, I just have a question. How can we help our son go to college if we can't pay for it?

How old is he? He's 18. He'll be graduating next month oh wow okay so like this fall huh yes what's he want to study he wants to be a chemical engineer and in kansas there's only four colleges that offer that program and three are private and one is a state school so of course the state school is going to be the cheaper route. Yeah, I think. Yeah, like a fourth. Yeah. Okay.

So why does he want to be a chemical engineer? He has always just enjoyed science, math, and chemistry is something he absolutely loves. How's his grades? He has almost a 4.0 uh 3.98 he's number three in the class um he's yeah he did really well and so you're in luck christina ellis is my co-host today she found a half a million dollars in free scholarships so she's going to answer your question yeah well you said that there are four schools in the state what's what's his current plan so he he wants to go to k-state and he has applied for every scholarship that he has um or he he that he's found and that he's eligible

for so he is mad at us because we actually make too much money right now, so he doesn't qualify for a lot of scholarships. You don't want income-based scholarships anyway. There are a bunch of those. I know, but Christina got a half a million dollars worth, and none of them are income-based. Oh, okay. So I guess we just need to be pointed in the right direction

because what we are finding is not. Well, I love So I guess we just need to be pointed in the right direction because what we are finding is not. Well, I love that he's got such strong grades. A lot of schools, they list their merit-based aid on their website. So if you go to the financial aid website, they actually have it listed out how much merit-based aid. Because he's a strong student, I would encourage you to even look outside of the state and see if there are any schools where he can get really high automatic merit based scholarships based on his GPA and test scores, especially just being a strong student. That's just an easy first place to start. Do you know how much merit scholarships he's been offered at the four schools he's applied to? Fifteen hundred dollars. Yeah, I would definitely look outside, look outside of the realm, look outside of the box and see if there are other schools in other states. Even just getting online and looking up, you know, chemical engineering programs that have massive merit based scholarships.

You might be surprised. I mean, between 50 different states, if you open up your search parameters, you'll probably find a lot more options. Where else should they look for scholarships? I would definitely go to some scholarship databases. A lot of people go to one scholarship database and then they get discouraged because they don't find scholarships that match them. But I typically recommend people use at least five different scholarship databases because not every database is going to match you with all the scholarships that you are eligible for. So if you use several different databases, you can compile a list that actually applies to you. Plus, there are millions of scholarships available. So you can't take the time to apply

for every single scholarship. So you want to find targeted scholarships that fit you and are within your niche. So especially with him wanting to do engineering scholarships, there are a ton of STEM based scholarships. There's a lot of engineering based scholarships. So I would really narrow in and search within that field of his interest and where he wants to go. Andrea, what do you guys make? Well, I'm a teacher. What's your household income? It's a simple answer. Our household together right now is $112,000 last year. Okay. And why are you broke?

Because we were dumb and tried to live with the Joneses and we have about $76,000 in debt with our student loans. So you guys are working to clean up your mess is what it amounts to right now. Yes, we are. That's fair. So we're on baby step two. That's fair. Okay, now here's what I think happened and you tell me if I'm wrong. Okay. I think an 18-year-old wandered into the freaking FAFSA nightmare

filling out those forms, and whatever dropped in his lap, he took. And what drops in his lap is student loans, the first thing they gave him on the merit-based, and a bunch of Pell Grants that he doesn't qualify for, and then he called it a day and walked away. Yes, he's pretty nervous. Yeah, zero perseverance and well he has that he has been trying to apply to scholarships that we've heard of it okay but we just yeah but it doesn't you can't apply to three yes you gotta apply to 133

okay okay and the other thing is this is i i'm. I don't think it's lacking in manhood on his part for his mom and dad at 18 years old to put their arms around him and even go over to K-State and sit down with them and go, hey, we're about to send this kid somewhere else, and he's a freaking almost 4.0 because you bozos hadn't stepped up. And meet with the counselors over there and just jack them up a little bit. And you may find $10,000 in one conversation. Oh, okay. Do that, and then I want you to be his biggest cheerleader. One of the things Christina had was a mom who gently or sometimes not so gently

encouraged her to fill out a scholarship application every freaking day. Okay. And was like her accountability partner and was up in her grill about it i can do that and that's what i i kind of think this kid's out there wandering around doesn't know what to do by himself and i think he would benefit for to for you to distribute some of your strength to him absolutely well and a lot of people feel like they're applying for a ton of scholarships. And whenever I boil it down, it's often like 10 or 20.

And then they get discouraged that they didn't win any scholarships based on 20 applications. And it's like, I want you to apply. How many did you apply for? I applied. I got very fortunate. I applied for a little bit over 50. But now I recommend kids to apply for hundreds of scholarships. The market has gotten so much more competitive. It's like, put yourself out there.

I saw a stat recently, and it's like, I believe it's like, students win one in every 20 scholarships that they apply for. So it's like, if you have applied for 10, you're not even in the running right now. You've got to up that. Plus, if you already got one out of your 20, then you need to do 20 more, and then you get another one, and that's the averages.

There you go. So that's the kind of stuff we're pushing for. The last thing is this. K-State's not that expensive. Junior can work while he's in school i mean you can make serious money walking dogs you can make serious money cutting grass you can make serious money delivering pizzas and you can work it's not child abuse to work well he's in chemical engineering. It's difficult. It's difficult to be broke, too. It's difficult to be in debt, too. Work is not child abuse. As a matter of fact, when I'm hiring here at Ramsey,

and our team is hiring here at Ramsey, it's not me. It's somebody else doing it here. But, you know, somebody who's actually worked while they're in school, they get an A in the hiring process. Someone who's never had a freaking job but is really, really smart, it's a little more of a risk because we might be the first person who actually teaches them to work, and that's a scary thing. This is what employers really look at in the real freaking world here.

Well, and there are stats out there that actually say that kids who work in college do better grade-wise, which is a win-win. I mean, they're walking away with work experience, plus their grades are better. No time to play beer pong. Right. Yeah, there you go. That's how that works. Who knew?

Yeah, this kid's a good kid. He's smart. Anybody looking at chemical engineering, he's probably not a problem like I was. But, yeah, get up there with him. You guys walk through this. I'm going to send you a book, Debt-Free Degree, by Anthony O'Neill. It's a Ramsey Press through this i'm going to send you a book uh debt-free degree by anthony o'neill that's a ramsey press book it's going to help you with this and get you going give you some give you some angles and thank you so much for calling andrew you can do this it's just going to require some effort and it's less effort than paying off

student loans if he took them out after he graduated. This is The Ramsey personality, is my co-host today in the lobby of Ramsey Solutions. On the debt-free stage, Rasa is with us. Hey, Rasa, how are you? I'm good, Dave. How are you? Better than I deserve. Where do you live? During my debt-free journey, are you? I'm good, Dave. How are you? Better than I deserve. Where do you live? During my debt-free journey, I was in Philadelphia. In Philly. Where are you today? I am a digital nomad, so I've been traveling. A digital nomad? Yes. So you live on the internet? I live, I Airbnb hop. I'm kidding. Okay. You became an avatar. I did. I never met one. I'm not so fun. All right.

How much debt did you pay off, kiddo? $64,000. $64K. And how long did that take you? About two years and 11 months. Two years and 11 months. Very, very good. And what was your range of income during that time? About $60,000.

And my OTE this year is $160,000. So $60,000 to $160,000. Yeah. Yeah. Nice nomading. Well done nomad. So what do you do for a living? I'm in customer success with a tech firm. Okay. All right. So and you can do all of that remote. I can. Which allows you to just travel the world. It does. And today camping out in Nashville toville to do a debt freeze cream i like it yes very well i love it good for you what kind of debt was the 64 um there's about 12 000 in credit card debt and the rest was student loans okay so what started this journey two years and 11 months ago so i got let go two new years in a row on the same day so the thursday before christmas

and boy your business sucks yeah well that that wasn't it wasn't following the right day so the thursday before christmas and boy your business sucks yeah well that that wasn't it wasn't following the right path at the time it's full of sharks it was rough i mean who fires people two days before christmas in an industry twice in a row oh my gosh exactly and um it it kind of knocked me back as you imagine um i had already booked a vacation and so i didn't enjoy it because i'm you know i was unemployed at the time um making some real deep reflection about not wanting to be in this position in the future um and so the second half of my um my vacation was actually a meditation retreat and up on the mountain you don't get a radio signal um coming down the mountain the radio kicked in and it was you no way i swear and so i listened to you the whole way home and i was like

radio signals is my biggest promoter exactly um and i listened to the whole way home and i was just like yeah this is it um jumpeded online, found Financial Peace University locally, bought your book, and it just clicked. It made sense. It was game on. It was just ready to go at that point. Wow. Yeah.

And then you land a new job. Yes. And then you land a new job. Yes, it was actually two jobs just like that. I got focused on my money and realizing that I wasn't valuing myself. And I just got, I mean, to use y'all's words, intentional. I was intentional with my money. It was month over month, grinding it out and then reviewing month over month. What isn't working for me in my job?

What isn't working for me in my income? Why are my peers making more? And it was because I wasn't valuing myself. And I just started making different decisions. And yeah, and kind of the rest is history. I love my job. I'm just the weight off my shoulders. You know, since I've been debt free, I paid my last student loan payment, and then I hit my digital nomad life the very next day. And it's just, it's been wonderful. That is amazing. I love that level of intentionality. That's just, that's super powerful. What was the hardest part of your journey? I think in the beginning, it was what felt like such a huge mountain even though i was really convicted and i knew i could do it it just it felt so long you're really ambitious in the beginning and you're

like yeah i'm gonna tighten my budget i'm gonna do everything right i'm gonna be debt free in nine months and it's like then the the heater goes out and then and then my dog got injured and then you know but i was able to cash flow nearly $20,000 worth of emergencies during that time, which was probably the more empowering piece of it because life kept happening over the three years. How old are you? I just handled it. I'm 41. Okay. Because this sounds like that the money piece was about 10% of the transformation.

Yeah. That the other 90% of the transformation for you was career, spiritual, psychological, mental health, everything. You came out of this a brand new you for sure. And the money piece is just a little part of the journey really. Absolutely. It's a big journey and we're getting to hear a part of it with the debt-free scream. Completely. That's what I think I'm hearing. Absolutely. Wow hearing absolutely wow powerful i'm so proud of you thank you well you had to have people cheering you because that that type of all-encompassing transformation

is uh it is more difficult than simply paying off debt because it's uh your guts turn over several times inside of your body and reform a different you when you're done. I don't know how to, that's not a good way of describing it probably. But I mean, I went through it in a sense when we went bankrupt. It was a spiritual thing. It was a relational thing. It was a psychological, emotional thing. And it was a money thing.

And so I just reached a point, like for instance, I used to really worry about what people think and as of going bankrupt i don't care what they think anymore and i really should care a little bit more but i just don't care at all it's awful and for 30 years it served me well so i don't care at all but that was part it really wasn't a money thing it was uh i gave up this need for affirmation from people i don't even know which is stupid in america we do it at a level that and social media that never before record levels we do it at a level that and social media that never before record levels we do that and when you give that up you can you can do in your case though you had this whole thing you valued yourself and it changed everything i can see it we can see it on your face can't you yeah it's amazing you're glowing thank you

who are your biggest cheerleaders um my friend crystal who's actually here with me today um my um my mom of course and then my sister she was probably my day-to-day cheerleader um she would she would be the one that i would confess when i like fell off the wagon i'd call her or text her and be like oh god dave's gonna be so mad like i personally knew yeah like i knew that That girl up there in Philadelphia, look at her. I knew you didn't pop up on the radio coming down from a mountain. I'm all powerful. But the funny thing is, is that, like, I would fall, you know, everybody falls off the wagon. Like, it's not, if you haven't, like, congrats, but you do.

You fall off the wagon, you make a bad choice, you fall into old habits, and I would be like, oh, Dave's going to be so mad. And then I would jump on every dollar, and would do it clean up my mistakes and rebudget everything and realize that i could just let it go and move forward and and and and just keep trucking and that was just instrumental you gotta feel like a completely different person because you are a different person i am and it's it's i i want to encourage so coming down that mountain i remember a very specific caller and like this is a ton of fun and i like highly encourage everyone to do it but but hearing yourself and other people's stories um share

your story with people because you don't know who's going to hear themselves i've got people dming me on social media just in my private circle asking me questions and that's been the best part about this journey is being able to help others, truly. Yeah, so the radio comes into a signal and there's somebody on the radio with your exact situation. Yeah. Yeah, that's called God doing that.

Yeah, you can't, that's not coincidence. Pretty impressive. Your life sounds so interesting now. How does it feel to be debt-free and to have the freedom to be a digital nomad and travel? It's wonderful. So it's a there's not a map for it, right? So growing up, you you see things modeled for you. But like being a digital nomad was not modeled for me growing up in the 80s and 90s. And so it's I've been able to craft the life that I want to live. That's right for me,

like this time around, and the freedom to do that and to fly home and be near my nephew if i need to or i spent a month in florida closer to my father who i don't haven't lived in proximity with in two decades and and being able it gives me the freedom to make different choices um that you know serves serves my heart and and my soul and i just i couldn't couldn't be happier we got a copy of baby Steps Millionaires for you. That's the next chapter in your story for sure. Yeah. We're very proud of you.

Congratulations. Thank you. You're an impressive young woman. Thank you. Very, very well done. Also, a copy of Total Money Makeover for you to give away and then stir up a ruckus with somebody else. That'll be good, too.

So, good stuff. Very good stuff. Rasa is with us from, formerly from Philadelphia. Now, she's from God knows where. And paid off $64,000 in two years and 11 months, making $60,000 to now $160,000. And the best kind of homeless, I'm saying. This is what we're saying right here. So count it down.

Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! Woo-hoo-hoo-hoo! Well, I'm going out at the break and meet my first digital nomad. I've never met one before. This is The Ramsey Show. Let's pray. Our scripture of the day, Psalms 127.1,

Unless the Lord builds a house, the work of the builders is wasted. Unless the Lord protects a city, guarding it with sentries will do no good. William Arthur Ward said, Four steps to achievement. Plan purposefully. Prepare prayerfully, proceed positively, and pursue persistently. And the other one is,

Learn to say your P's in a row. My goodness. Wow. I don't know if I can get all that out there. A bit of alliteration. Can you help me with that, William Arthur Ward? Wow. All right.

Let me see if I can do it again. Plan purposefully. Prepare prayerfully. Proceed positively. Pursue persistently. I did it. Nailed it. It sounds like a voice coach exercise to see if you can hit those Ps. That's pretty impressive. All right.

I've got to get out of this. Kevin's in Houston. What are you doing, Kevin? Hey, Dave. Can you hear out of this. Kevin's in Houston. What are you doing, Kevin? Hey, Dave. Can you hear me? Sure. What's up? So I'm calling in.

I've been in a little bit of a pickle trying to decide what loans to pay off and whether or not to pull out of investment accounts that were set up for me when I was younger. My buddy Brandon recommended actually just calling on your show, which is why I'm here now. Um, I've got, uh, right now I've got actually, when I look at a total, quite a bit of that, um, 95,000 total, um, 13 of that as a car, seven of that as federal student loans, 42 as private student loans. Um, andtwo is private student loans. And I'm paying just a little bit over minimum on most of those. I'd round it to the next hundred.

But I am – Well, what's the other 40 grand? Oh, sorry. Forty is private student loans. You said 32. You said 32 was student loans. Seven was student loans. And 13 was a car. Shoot, I'm mixing them up.

Thirty-two is a rental property that I own. It's a house that I don't live in that I rent out. Oh, okay. 42 is private student loans. Okay, now I'm there. Now I'm to 95. Okay. Yeah.

I'm caught up with you. And how much money you got in the bank from all these different things? So between my checking and what I consider my emergency savings, I've got $10,000. $9,000 that's sitting in kind of investment accounts. Some of that was set up before I was even able to talk. And then $4,000 that I had earmarked for some travel that I was trying to budget and save ahead for. Okay. So I've got, like, I guess what I'd call, like, 23,000 that's,

scare quotes, available, although some of that's the emergency fund. Yeah. So it's like I've got, like, 23,000. I currently make about $64,000 a year base salary. I do get overtime and some bonuses, which I usually throw into savings. Okay. Your friend sent you into a bear trap. Because I could tell by talking to you that you're not super familiar with everything we do,

and so I'm going to be super gentle, okay? Is that okay? I have read Total total money makeover believe it or not i feel like i'm definitely half-assed everything okay well you definitely have yeah without a doubt okay then i'm not going to be as gentle okay i'm gonna love you well i'm gonna love you well um so here's the thing. What you've got to decide is, are you going to keep doing what you've been doing? You don't have to decide it right now, but you do need to make that decision because, as you said, half-assed doing it doesn't work. Being half-butt gives you half a butt. I mean, it's just that you're not going to get there.

So the thing is, if you study the data, which we have done over the years with what millionaires do, people that become millionaires starting from nothing, and you have the potential to do that, the first thing they do is they clean up their debt because your most powerful wealth building tool is your income. And so once you make that decision and you say, all right right i want to become wealthy and the shortest distance between where i am and wealth is to get rid of the debt then debt becomes the enemy once you put that set of assumptions in your brain do you agree with that yes do you agree with that okay if you if you if you say the shortest way to something is X, then X becomes the thing, right?

If the shortest way to lose weight is drink more water, then drink more water becomes the thing. You follow me? Yes, absolutely. Okay, so you either decide that what we teach is right, or you decide it's not right, and you go find a different way of doing your life, and that's okay. I'm not mad at you for that but millions and millions of people have followed this exact plan and we've got data to back it up and we've got lots and lots of case studies to back it up that it works so given that yeah you're not traveling anywhere you're freaking broke so your little

travel fund goes on your debt and you list your debts smallest to largest you take six extra jobs you don't see the inside of a restaurant unless you're working there and don't talk to me about vacations you're working all the time you are a broke guy and you need to clean this freaking mess up and this is how i talked to myself when i got out dude so i'm gonna talk to you this way because i love you and i want you to win all right so you list your debts smallest to largest and you this way because I love you and I want you to win. All right? So you list your debts, smallest to largest, and you attack them with a vengeance. What's this rental worth?

So it's a single-family house. It's about $50,000 in value. Good. Sell it. Sell it. It's a crappy little house. It's a cash-flowing property. It's a crappy little house. It's a cash-flown property? It's a crappy little house. It's a lot of hassle in your life.

You're not cash-flowing $100 when all the smoke clears and the repair is on it. I own real estate. There's no margin in this deal. You've got a 30% equity position, and there's no margin in it. And it's not the answer to your wealth building. I want you to get real estate later, and I want you to pay cash for it. But right now, it's a distraction, and it costs you money when the smoke clears are very, very close to it. It certainly costs you your time, and you're making a dollar an hour screwing with this thing.

So you need to get rid of it. List your debts, smallest to largest, and get in attack mode, and you could be debt-free in like 14 to 18 months, if you do what I'm talking about, and you follow the total money makeover. But you've got to decide if you want to do that or not. Not everybody does. Les Brown, Christina Les Brown, the great motivator, said people change their lives when they finally say, I've had it. I've had it. I'm not doing this anymore.

Yeah. And I think it's great that he called in because he's in a great spot to make that change right now. While 95K in debt sounds super intimidating when you break down a situation, it's like he can do this pretty quickly if he sells the rental, if he pulls some of those investments from when he was a kid that could go towards that debt,

he's in a great spot. But like you said, he's just got to make that decision and go all in gazelle and 10. I forgot about that other 20 grand. So we sell the rental, it gets rid of 30 of the 95. I got 42, I got got 7 i got 13 and i got 19 23

in the account i got a hold of 1000 for baby step one so i got 22 to throw to this so the car's paid off the student loans are paid off the only thing left is the 42 in student loans yep and he can do this if and whatever the whatever you make on the rental you throw at the student loans too and you clean this freaking mess up dude now you're out of that he's out of debt in nine months if he gets to gazelle intensity but if you keep screwing around with it half button it this doesn't work it just doesn't work if you have buddy you got to go you're going to get a different system if you're going to half butt and i appreciate that he was willing to admit that right yeah me too i mean because i mean the thing is the the definition of insanity the

12 steppers say is continuing to do the same thing over and over again and expecting a different result so you can keep doing what you've been doing in your marriage relationship and you're going to have the exact same marriage relationship it could be good if you're if you got a good one keep doing it right you know you could keep doing this parenting stuff but i remember mom when we would be raising cane as little hillbillies running in and out of the house she would say and the worm has turned and we didn't even know what that meant except the beatings were about to begin and and but that that was shakespeare it turns out who knew mom knew shakespeare, you know, but what that meant was enough. This craziness stops.

And you got to do that to yourself. You got to go enough. This craziness stops. I'm not going to keep baking a cake, wondering why it's chocolate when I used a chocolate recipe. Change the recipe, you know, and that that when they do that, Christina, life changes. Absolutely. And that's why we say that money it's 80 behavior 20 head knowledge it's about changing your behavior the way you think around money and actually shifting things exactly exactly christina ellis ladies and gentlemen our first day as a co-host ramsey personality best-selling author i. I love it, I love it, I love it. Very well done today.

Very well done. So much fun. And James and Kelly, you guys did a good job, too, in there. You know, in spite of yourselves, life's good. We'll put this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace.

Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.