The Ramsey Show - App - Too Embarrassed to Get Out of Debt (Hour 2)

Episode Date: July 16, 2018

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🎵 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. This is your show. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Brian is with us in Charlotte, North Carolina.

Hi, Brian. Welcome to the Dave Ramsey Show. Hi, Dave. How are you doing today? Better than I deserve. What's up? All right. So recently come to a divorce, and I am self-employed of a fairly successful business.

But with the divorce and the way it left, made some bad decisions in the past year, racked up quite a bit of business and credit card debt. Of course, since I'm self-employed, it's all my debt. But long story short, I now have two homes, my primary and a rental, that I'm thinking about selling them both to move into an apartment to use the equity to clean up my debt so I don't feel like I have a cobblestone around my neck every day. Generally speaking, I like the idea.

Fresh start all the way around. How much debt do you have on the business? Okay, so business and personal, well, counting them both is about $163,000. Okay. And how is that fine? Credit cards and what else? That is all credit card. So about $120 was business debt, and it is on a business loan, which is basically treated like a credit card, and then the rest is on personal credit cards. But, of course, I'm personally guaranteed on the business end of it. There's technically no business debt in a small business.

You're on all of it. So it's all personal debt. You just labeled it business. The homes will bring equity of how much? $150,000. So it won't quite clean up the debt then? Well, it will leave me about $16,000 in debt. I have about $11,000 in savings, which I

didn't let go because with the divorce, I wanted to make sure I can make my mortgage payments because I wasn't sure what was going to happen. Literally, if I sell the houses, the market is extremely hot right now. And with what I have in savings, and if I keep $1,000, I will be left with probably $5,000 worth of debt, which I'll be able to cancel that out in another just few months with my income. So what is your income? Clear $4,200 a month. That's net. Okay.

What kind of business? I do custom aquariums. Okay. I like orthodontists, pediatricians. As you've gone through this horrible time in your life, your business has not suffered? It has a little bit. Most of my clients I've had for 10 to 15 years, I've actually picked up new clients. So it's one of those things that it's not affected it negatively.

I did pull my advertising, which is called the slowdown, but that was really just to kind of regroup with my company to refocus. So, no, my income really for the past 10 years for the most part has been fairly consistent. You got any children? I have two kids. Okay. Do they live at the house with you? One, I have 50-50.

The other, I do not yet because he has some medical issues. But within about a six-month period, I should have both boys 50-50. So there's a child support payment as of now. As of now, I'm getting ready to move into an apartment that's, you know, the lowest cost is I can cut everything and kind of the beans and rice deal. I'll be left with about $1,500 a month left over after all expenses, child support, everything. Yeah.

But the apartment will be okay for them to stay in when they're with you? Yeah, it's a three-bedroom apartment. It meets our needs. No issues. It's actually, I'm like five miles away from the kids' school. And my three-year-old, of course, he's out of three-year-old and a five-year-old. Five-year-olds get restarted kindergarten. So it accommodates the kids.

And, you know, about five years ago, we moved into, or maybe eight years ago, moved into an apartment. Me and the ex-misses, you know, we paid off about $80,000 in debt, saved up enough to buy our house with, you know, 20% down, 15-year mortgage. We still had $30,000 left in the bank. All I was trying to figure out is how the kids are going to be affected by this idea. But it sounds like they're okay. It sounds like they're fine. They're totally going to be affected by this idea. But it sounds like they're okay. It sounds like they're fine. They're going to be fine with it.

So, yeah, our divorce will be complete in October. Okay. Yes, at that point, when the divorce is complete and the properties are in your name, I would sell them. Yeah, I've done the quick claim deed. They're in mine, and like I said, I'm ready to sell out, fresh start. I was going to hold them as a rental, but they still have that debt holding over me. You're not in a position to be a landlord right now.

You're broke. Exactly. I think you're making a good move. It's a clean slate. You've gone through a hard time emotionally and heartbreak and everything else, and you're starting over, but you're going to start over with almost no debt and soon to be no debt. And, yes, I think that's a great move. If you're going to liquidate these properties before the divorce is final,

make sure your attorney is in the loop on that and goes along with that, because I don't want that to come back and bite you and change the settlement. Understand. But other than that, if the divorce was final, I'd do it today. But if it's not final, I want some assurance that you don't sell these houses and pay off your debt, and then she wants half your business or something. That would not have worked to your advantage, obviously, then. So we've got to have all that locked in and dialed in.

But good question. I'm sorry you're going through this. Open phones at 888-825-5225 elena is with us in orlando hi elena how are you good how are you there better than i deserve what's up so i am um almost 250 000 in student loan debt good Lord. And I'm not even planning on being a doctor. You're not? Are you going to be a lawyer? No.

What kind of a degree did you go get for $250,000? I got my bachelor's in psychology. For $250,000? Yeah. I think it was $100,000 a few years ago, and I didn't even think about it, and then it just sprang up even higher. But I am planning on going back to school to be a social worker. Yeah, because everybody knows they make six figures. True, they don't.

You're broke. You can't go be a social worker. What's your household income? Right now, I'm actually not making anything. I am a caregiver for my grandma at the moment. Are you single? Yes. Okay, how old are you? I am 27.

Okay. This is mean old Uncle you? I am 27. Okay. This is mean old Uncle Dave on the line. Are you ready? Yeah, I'm ready. You have to go make some money, kiddo. You have to go make some money. A lot of money. And social workers don't make a lot of money.

So you gave up the right to be a social worker when you spent $250,000 on a psych degree. So now we have to retool your career and reset your career because you need to go make some money. You have a mess on your hands. You're going to spend the rest of your life as a slave to this student loan if you don't. I don't want that for you. Hold on. I'm going to get you signed up for Financial Peace University, and I'm going to send you a book called Start. But it's not going to be Start Being a Social Worker.

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Hi, Amy. Welcome to the Dave Ramsey Show. Thank you. My husband and I just need some help trying to figure out if we should move or stay in our current home. Where we live, sometimes it takes my husband an hour and a half to get to work, so we're contemplating on whether or not to move closer to his work. But the problem is, or the reason that we're hesitant,

is we just paid off the MIP on our current home that we purchased about 10 years ago. So we were just trying to figure out if it would be smart for us to just stay where we are since we just got that paid off and continue to make payments and eventually pay this current house off? Or would it be smarter to move closer to his work, less wear and tear, and gas with his vehicle? So your home is where in Nashville? It's in Murfreesboro. It's about 45 minutes outside of Nashville.

I live in Nashville. I live in Franklin, so I know where Murfreesboro is. Okay. And he works where, in Nashville? Yes. Downtown Nashville? Right by the airport. Okay. And that takes him an hour?

I guess it does, yeah, during traffic. Mm-hmm. You said an hour and a half. Sometimes if the traffic is bad or there's a wreck, it can take an hour and a half. Yeah, that's not the normal day, though. But anyway, still a long way. Okay. Of course, the closer you move that direction, depending on where you are in Murfreesboro, your prices may go up.

Mm-hmm. Too. Okay. Yeah, I noticed that. Depending on the particular area that you're in. I mean, there's some places you could get there, though. I mean, you could get to the Hermitage area and probably not see a substantial price difference in that, depending on where you are in Murfreesboro.

But anyway. Right. Around the southern end of Murfreesboro. Here's the thing. We own a home because it's a nice investment and goes up in value, and we want to be financially smart with it which is why you're asking this question we also own a home because it's where we live and if i were spending an hour to an hour and a half each way on the road every day that house would have already been sold before you even made this phone call.

My commute is seven minutes. Now, if you live in Los Angeles, you may have an hour and a half commute. But even though Nashville traffic has lost its ever-loving mind, but aside from that, an hour and a half commute in the Nashville area is unreasonable. That's too much of your life gone in a car seat. You know? Right. I just want him to spend more of that time with you and kids if he's got kids and just have a life. I mean, his level, his energy level, well, his stress level will go down.

His energy level will go up. You can give him his life back by moving an hour closer and be 20 minutes or 10 minutes or something like that away. Assuming his job is stable, I'm moving tomorrow. Yeah, he works for the state, so it's pretty secure. Okay. Yeah, I'm moving tomorrow. I mean, as soon as you can figure this out, I mean, I'm exaggerating, but you see what I'm saying? You're just going to get your man back.

That sounds good to me. You lost him to traffic, you know. Yeah, and you can find another house. I mean, it may not be the exact perfect deal, and don't use this as an excuse to overspend on the house. No, we definitely don't want to be house poor. Yeah, I think about a lateral move is what i'm thinking about a lateral move is a no-brainer a slight move up it could be a no-brainer depending on the rest of your financial

you know your finances but um just quality of life when you don't have to um i'm done man i'm moving if i'm you and i know the real estate market well enough to know that you, depending, again, depending on where you are in Murfreesboro, Murfreesboro is a hot market. And some of those neighborhoods are much pricier than some of the neighborhoods around the airport in Nashville. And so, I mean, you can look at Donaldson and Hermitage and that kind of stuff, and he could get his life back. So I'm gone.

Thanks for the call. Mike's with us in Houston. Hey, Mike, welcome to the Dave Ramsey Show. Hey, Mike, how are you? Dave, how are you? Good to talk to you. How can I help? Well, we've got $536,000 in debt between house and property and some business loans.

And I've got $339,000 in managed account mutual funds. And I thought I was smart until I started listening to your show. And I need to know, should I cash out the mutual funds and pay off all this debt and everything but the house? Okay, you said it's on property, a house, and a business, right? Correct. So break that down for me. How much on your home?

$258,000. $258,000. Okay, and how much on your business? $130,000. Okay, and how much on the other property? $70,000. their property? 70. And then there's a $77,000 loan on the truck for the business.

Okay. So the business actually has 207. Right. If I put those two together, right? And you have a piece of ground or something that's 70? 100 acres. Okay. And what's your household income?

270. Oh, excellent. Well done. Okay. Well, there's no need to panic because you have a huge income. How old are you? 40 next month. Okay.

So the shortest distance between you and a much greater portion of wealth is to have no payments, not to keep that pile of cash. And so I'm going to move with my income and with the pile of money that you have that's non-retirement. The mutual funds you have are non-retirement, right? Yes, sir. You managed to count. You said you had $300,000 and something, right? Yes, sir. You managed to count. You said you had $300,000 and something, right? Yes, sir.

Okay. The shortest, so if I woke up in your shoes and I said, the fastest way I can become the wealthiest is to continue to manage my income well and to have no payments at all. If you make $270,000 a year and you have no payments, house payment or anything, you're going to be so rich it's going to be unbelievable. You follow me? That's what I'm thinking.

My financial advisor has never told me that. Yeah, yeah. But instead, you've got a pile of cash and a pile of debt. So I wouldn't sell anything you've described to me because I think it's all stuff you keep if you have a $270,000 income. Now, if you told me you had a $70,000 income, I'm probably starting to sell some stuff here. But like that 100 acres is probably gone in that case. But you make enough money with that $350,000 to be completely debt-free in what, a year and a half? Pretty much.

Yeah. I mean, you throw a bunch of your income at the debt, and you throw this $350,000 at it, you're done in a year and a half, two years anyway, right? Yes. What if you had no payments? Oh, my gosh. You're 42, two years anyway, right? Yes, sir. What if you had no payments? Oh, my gosh, you're 42, 43 years old, not a payment in the world? What kind of business is this?

It's a mobile distribution business. Cool. So what's the 100 acres worth? $250 probably. And what's your house worth? Last appraisal, about $335,000. Okay. So with all of that paid off, your net worth alone is a half million dollars.

Right? Yeah. So you're well on your way to being a millionaire with all that paid off. And I'm keeping it all. I don't see any reason to panic and sell stuff. what would i do if i woke up in your shoes probably gonna change financial advisors because he's probably not gonna think you're anything but crazy and i'm gonna clean out that managed account i'm gonna pay off some stuff as soon as possible and i'm probably gonna pay off everything but your house and then i'm gonna start working on your house very very aggressively with any money i can find above that from income or whatever's left in that managed account.

And I want you completely debt-free in two years. And then you're going to be a millionaire in four years. Five years, actually. Good question. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference

is that one family has the right amount of term life insurance and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story,

and it puts you on course for better things ahead. In the lobby of Ramsey Solutions, Michael and Delinda are with us. Hey, guys, how are you? Hey, Dave, we're great. Welcome, welcome. Good to have you. Where do you guys live? Queens, New us. Hey, guys, how are you? Hey, Dave, we're great. Welcome, welcome. Good to have you. Where do you guys live?

Queens, New York. Ah, the city. All right. That's right. Welcome to Nashville. Thanks for visiting us. Thank you. And all the way down here to do a debt-free screen.

Yes, sir. Absolutely. It's a long journey, Dave. Well, not that far from New York, but a long journey to be debt-free. How much have you paid off? $75,000. Cool. And how long did this take? 20 months. All right. And your range of income during that time? Our range of income, we started at $115,000. We went up to $215,000, and then we went back down to $130,000.

Okay. There's a story there, obviously. What do you all do for a living? I'm an assistant principal at a high school in downtown Brooklyn, and Mike makes shoes and designs footwear for a living. Oh, fun. Very cool. Very cool. What kind of debt was the $75,000? Most of it was student loans. About $30,000 of it was credit card debt that I had racked up in my 20s. And then part of it also was a loan to my parents. And how long have you two been married?

Six years. Okay. So what happened 20 months ago that put you on this journey? Because you guys went crazy here. Yeah, we went a little bit crazy. In a good way. Yeah. You know, honestly, we were sitting in a Tuesday night prayer meeting at our church at the Brooklyn Tabernacle in August of 2016. And we had kind of piddled around with that for a long time because he graduated with about $200,000 in student loans. And we had done it. We'd worked on it. And we'd paid a little bit of it off here and there and kind of toyed around with it. But we were sitting in a Tuesday night prayer meeting in August of 2016, and the Lord just really gripped our hearts.

The pastor was talking about how, you know, God tests you in areas, and he tests you to prepare you. And it really just spoke to me, we're not passing this test of stewardship we are not being responsible and we actually went through financial peace university five years ago because once we got married is when our finances completely crumbled into the ground and it uh so you got you got part of the way back but then let your foot off the gas and this was the put the foot back on the gas yeah Yeah, exactly. Gotcha. That's right. So Pastor Jim Simbla.

Yep, Pastor Jim Simbla. Okay. And so we went through Financial Peace University five years ago, but we didn't stick with it, and the reason that we didn't stick with it is because we tried to do it in secret. My parents really taught me your principles my whole life, and then I didn't listen and racked up the debt and he had the debt from the student loans. And so I was very embarrassed and I didn't want to, I didn't want my

family to know about it. I didn't want my friends to know about it. And it was that prayer meeting we were sitting in and, you know, I, God said, you have to do this. You have to bring it out of the dark and into the light. And from that time on, we put the posters up. Anybody that walked in our dining room knew everything there was to know about our finances, Dave. Wow. And everybody that would listen, we talked to about it. And we really saw progress at that point. It really moved forward.

And I saw a change in her where she was kind of freed and released and didn't feel that embarrassment or anything about it really turned into a big momentum for us you know there is something in and it sometimes it takes different forms but there's something that happens when you don't care what other people think correct sometimes that you don't care what they think so you do stuff but sometimes it's the I'm just going to say what it is I'm just a regular person here and, and this ain't working, and I've got to do something different. And in your case, it was just to get past the embarrassment of it. That's kind of what we went through. I mean, we filed bankruptcy, and hardly anybody knew we filed bankruptcy.

You know, it was years later, I started telling the story, and they're like, what? You know, and Sharon was all embarrassed. She's crying the first time I told the story in public. Why didn't you tell everybody? God said tell everybody, and that opens it up to healing. And then you really go on. Because then you can't go back when everybody else is watching. There's something to that.

The confession to one to another out in the open where you can do something about it. That's powerful. It's a great spiritual story. I learned that people don't really care how perfect you are. They don't. They care how humble you are and how willing you are to share your weaknesses and how you overcome your weaknesses through God's power. There's something about being authentic like that that is highly attractive.

And everybody else is trying to put on a show. That's true. And that happens everywhere. It does happen in Brooklyn, too. And so you don't live in on a show. That's true. And that happens everywhere. It does happen in Brooklyn, too. And so you don't live in Brooklyn. Now you live in Queens. That's right. I work in Brooklyn, but we live in Queens.

Okay. Because I spoke at a church there. It was a sister church to Brooklyn. Pastor Durso? Christ Happener. Yeah, Christ Happener. That's a long time ago. That's probably 10 years ago.

I couldn't remember. Great people. Great people. They are wonderful. They were feeding me. That's a long time ago. That's probably 10 years ago. Great people, great people. They are wonderful. They were feeding me. Man, I got some food. Wow, it was great. Don't go to a marriage conference with them, Dave. They'll light you up. It was good.

In a good way. They're good folks. It's a good family of churches, good people. Well, well done, you two. Thank you. What do you tell people the secret to getting out of debt is? Releasing your pride. Obviously, you have to have all of the tools.

The budget is paramount importance. Communication, extremely important. But for me, it was releasing my pride. That was the biggest thing, getting over the embarrassment. What was the biggest thing for you? I would say for me, I currently run a small business now. So that was something we always messed around with in this whole debt payment was when to start it. And I started it early and then we were stressed under the debt and we couldn't focus. But now that

we're out, it's actually doing very well and thriving at this point. So it seems like the timing is right. So, you know, mine was when to start that and being willing to go back into corporate work, which is something that I didn't want to do at that time, but to clean up the mess and now you're really free to really focus. Okay, so that explains the income change. Yes. That's where the extra hundred grand came from. You jumped in and you kept the business as a side hustle.

Yes. You jumped in and made an extra hundred grand to knock this out and then jump back out. Correct. And Dave, that was a really big sacrifice for him. Huge. And there's a part... He put his dream on hold. Yeah, absolutely.

It's tough. It's tough. But worth it. Well worth it. Well, now you can do it. You got nothing hanging around your neck. That's right. Wow, very cool.

And you brought the kiddos with you, and their names and ages are? Malachi, and he's three, and we have Olive, and she's one and a half. Okay. And they are beautiful. Come on. They're absolutely gorgeous kids. Oh, fun. All right.

Good deal. Well, you changed your family tree, you two. We're proud of you. Thanks for making a trip down here to do your debt-free scream. We've got a copy of Chris Hogan's book for you, Retire Inspired. That'll be the next chapter where you become millionaires. This business is thriving and growing. And I want to hear next time you're making $300 a year out of it.

All right. So you're on your way, man. I'm proud of you guys. Very well done. I know your pastor is proud of you. Thank you. Well done. Good stuff.

Michael and Delinda, $75,000 paid off in 20 months, making $115,000 to $215,000 to $130,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! That was more than he wanted. That's great. I love it.

Oh, congratulations, you two. Very well done. There's a phrase that the Bible says that you don't hear it set out in public much, but it's the fear of man. The fear of man. And that doesn't mean physical fear of man. What it's referring to is this need to impress others, this need to be accepted,

to be approved, for everybody to be okay with your decisions. And there's something that happens in your emotional maturity and in your spiritual maturity when you won't be kind to other people and truthfully, as long as we're all breathing, we care to some degree what people think. But you reach a point you don't care what they think. And if, you know, you put your stuff up on the dining room wall

and they want to make fun of you, that's okay. I'm still putting it up there. This is who we are, and this is where we've been, and this is where we're going, and I'm not going to live like this anymore. And sometimes we buy stuff out of a fear of man. The whole thing of Rachel's book, Rachel Cruz's book, Live Like, I'm sorry. I can't even make, I started to say live like no one else, so later you can live like no one else, but that's what it is.

It's, you know, the whole theme is to just not be worried about impressing someone else. Love your life, not theirs. Love your life, not theirs. Don't care what they think about your life. It's a spiritual growth to not have the fear of man making your decisions. It's an emotional growth to not have the fear of man making your decisions. What a powerful testimony from those two. This is the Dave Ramsey Show.

Guys, let's talk about that timeshare pitch that you fell for. They promised you exclusive access to travel anywhere you want, tropical beaches, mountain getaways, or whatever. Oh my gosh. They claimed it was the affordable way to travel, and then they convinced you it was a good investment. But here's the deal. Search any auction site for your exact timeshare and see what it's selling for. It's listed for a dollar with no bids. That's not a good investment. Now, I know I'm just adding salt to a very old wound, but look, if you tried calling the resort and they won't take it back, if you tried selling it and no one will buy it, call Timeshare Exit Team. Timeshare Exit Team will get you out. You'll

have to be patient. It can be a long process and it costs money, but it works. They're so confident in their exit service that if they don't get you out, you get a 100% refund. Call 844-999-EXIT. It's free to talk. 844-999-EXIT. TimeshareExitTeam.com. Joe is with us on the big island in Hawaii. Hey, Joe, how are you? Hi, Dave. Thanks for taking my call.

Sure. What's up? I was wondering if you would recommend me taking a job in another state. Why? I haven't been offered a job yet. I have an interview scheduled and they want me to pay for the interview to fly to California, to Northern California, and it would be a pay raise of about $16,000. And we would be relocating from where we live now to California. What part of Northern California? It's near Lake Tahoe. It's in Alpine County. Okay.

All right. The cost of living will probably be less than the big island, and so the effective raise might be more than $16,000. You said we. Are you married? I am. My husband is disabled, so he stays home with our son and watches our son and collects about $18,000 a year, and I make about $69,000 a year, so this pay would be about $85,000 a year starting. And how old are you? I'm 35. Were you born in Hawaii? We both were.

Okay. All right. And how old is your child? One. Okay. And so when you're 45, do you want to be living in Hawaii? Yes and no. I mean, our family is here, so we love it here,

but there's just a lot going on with the volcano and everything and the air quality and then, of course, cost of living. I feel like our quality of life would be better if we relocate. Mm-hmm. Okay. You're going to spend some money on airline tickets if you relocate yeah because your entire your entire world is there yes you've never known anything else your whole family all of your social structure everything is there so you're going to be coming back on trips there's

nothing wrong with that but you're going to spend some money on that you need to know that right because you're going to have you're going gonna have we would be with what you've described you two are native hawaiians you've spent your whole life in in in that state born and raised there your culture is there everything is there and you're gonna get homesick unless you're weird i'm expecting we would be homesick um we would be debt-free if we relocate, so that's part of the... And how are you having to pay for the interview? You just have to pay for the airline ticket? Well, the airline ticket, yeah.

I asked them if I could do the interview via Skype or phone, and they said for this position it would require an in-person interview. And what is the position? It's a deputy director for the child and family services. Okay. And what do you think your probability is of landing that job? I'm not sure. I'm a supervisor now in Hawaii, and so I'm not sure if it would be, you know, because it is a different position. You know, it's higher up than what I'm now. So what I would want, I would want to have some more phone conversations with them

because if there's 73,000 people applying for this position and you're one of them and they don't care if you spend money on an airline ticket but you care, you want to know that. But if there's just a handful of people. I did email them and ask them that. Yeah, you know, just what are, you know, I'm sorry, I don't want to know that. But if there's just a handful of people. I did email them and ask them that. Yeah, you know, just what are, you know, I'm sorry, I don't want to be rude. I really am very interested in this, but I'm also trying to be very responsible with my money because it's real money to me to spend an airline ticket and come over there. And I just want to know that I got some good shot at this.

You know, I'm not asking you to hire me over the phone. I'm not asking you to make me a promise of income but i want to know what you know what are what are my chances if i'm going to do this and i before i spend my money i would do that but if you're you sound uh emotionally ready for a new adventure to take the job and move and it might be that it is only for a period of time it might be that you move back in a decade or something. That could happen. It might be that you never move back. And there's nothing wrong with that. I'm not saying you're doing anything wrong at all.

I'm just trying to help you with the life part of the decision because it's not just about income. Sometimes people move only based on income and they don't think through the other implications of the parts of their life. The church you grew up in, the street you drove down,

your neighborhood, all your friends, your family is all in one place, all of this kind of stuff. And so, you know, you've got to just think that through and say, you know, on each side of the scales, what are the plus and minuses? The pluses on this is it's money. You make more money, you've got a lower cost of living, and as you said, you've got better air quality, lots of cost of living issues going on, especially on Big Island right now, as you said, with the volcano and so forth. It's causing all kinds of economic upheaval as well.

So, yeah, I think it's a good time to make a move, but I don't think it's a slam dunk. I think you have to consider all those variables. And, yeah, go take the interview if you can get some reasonable assurance on how serious they are about you. Zach is in Green Bay, Wisconsin. Hi, Zach. How are you? Good.

How are you, Dave? Better than I deserve. What's up? Yeah, so I just had a quick question. I am currently doing the public forgiveness loan for my student loan, and I'm just about six years through, so I have about four years left. My balance is about $26,000. Currently I don't pay anything a month due to my household size and income,

but I'm considering a career move into the private sector, which I wouldn't be qualified for the public forgiveness loan anymore. So I'm just wondering, should I start paying towards my student loans just in case I do decide to take a different job in the future? What is your income now? $32,000 for myself, and then my wife is at about $16,000. Okay. About $45,000, $46,000. How many kids do you have? We have two. It's for my wife's previous marriage, we pay, or we have 50-50 custody. Okay. Okay.

And if you made a career move, what would you make? Right now, I did an informal interview, and I still have to sit down with the gentleman. Obviously, I would have to take into consideration, you know, having to pay my student loans back. That wasn't what I asked. I asked how much you would make at the new job. Probably about $40,000. So $8,000 a year more. Yeah.

Okay. So in three years on student loans of $26,000, you'd break even. Correct, yep. Everything after that's gravy. Okay. Yeah, there's no question you'd do that. There's no question you'd do that. Okay. But, I mean, I would take the job before I changed my game plan,

but as soon as you change your game plan, then I would get after it. Definitely. Yeah, that's, you know, you want to clear the student loan. I think you're on a, I would love to see your household income come up dramatically 40 000 just being the first jump and then you continue to work from there and and move along right now you're at about average and i'd like for you to see you know have some goals to get you well above average and um uh you know create this whole income situation where $26,000 is not your motivator anymore. Boom.

You just knock it out fast and be done with it. That's what I'd rather see you do. Good question. Thank you for joining us. Sandy is on Twitter. How much can I save in my Roth 401K? Can I also add a Roth IRA with catch-up contribution? Yes. The catch-up contribution is if you're over 50 years old, you can put $6,500 into a Roth

IRA. The 401k, Roth or regular, is limited to $18,500 per year that you put in. If your company matches, it's on top of that. And so if you're over 50, you can do $6,500. If you're married, your husband or wife can do $6,500. If you also have a 401k, you can do another $18,500 all in Roth if you have a Roth 401k available to you. And anything that comes in match will not be in a Roth, but you can roll that to a Roth and pay the taxes on it at the end of each year. I do that with mine because I don't intend to access it.

I want to let it sit there and grow tax-free because I love stuff that's tax-free. Just two wonderful words that go when they go together. Tax-free. Say free, everybody. That's what Roth means. No taxes. No taxes. Think about that.

Some of you just kind of drive by that and don't stop and think about it often enough. This is the Dave Ramsey Show. Hey guys, this is Blake Thompson, Chief Production Officer for The Dave Ramsey Show. Here's a tip. To keep from missing Dave's classic facial expressions to some of those calls, make sure you watch him live. Just visit DaveRamsey.com slash show each day from 2 to 5 p.m. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life. I'm talking about the simple act of using Wi-Fi.

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