The Ramsey Show - App - We Have Over $100,000 in Car Loans! (Hour 2)

Episode Date: June 23, 2023

Ken Coleman & Rachel Cruze answer your questions and discuss:  "Should we sell our house to pay off debt?" "We have over $100,000 in car loans..." from the blog: How to Get Out of a Car Loan, "Pay off my rental first or my home?" "How can I be more competitive in the job market?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/TRS Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Ramsey Solutions Privacy Policy

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🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is The Ramsey Show, where we help you win in your life,

specifically your money, your work, and your relationships. I'm Ken Coleman. Rachel Cruz joins me this hour. The phone number is 888-825-5225. That's 888-825-5225. Let's get it started right here in our backyard, Nashville, Tennessee. Austin is there. Austin, how can we help?

Hey, hope you guys are doing well. Thanks for taking my call. You bet. I am wanting your input. My wife and I are in baby step two. I'm just kind of plugging away, but we just found out that my wife is pregnant with our first. Oh, congratulations. Yeah.

Thank you. Thank you. Still kind of doesn't feel real. Yeah. We are wanting to, you know, we're considering looking at our debt and everything and wanted to get some input on whether or not we should consider selling the house, using all that equity, and then just wiping out all the debt and just kind of basically starting over. Okay. So how much do you guys make a year?

I make 30,000 working in ministry and she makes about 35,000 as a therapist. Okay. So 65, how much debt do you guys have? We've got 50,000 in student loans, 25,000 in credit cards and 10,000 on a car. 85, that on a car. Is that $85,000 total? Yeah, and then we've got a mortgage. We have $254,000 left on the mortgage, but the house, we could probably sell it for about $370,000. Okay. Man, y'all have a lot of debt. And with this and with the income, okay, so here's my hesitation, Austin,

when I'm talking to you about this. Because first and foremost, now that you guys are expecting, I would recommend not making a big move right now on either end, but just pile up cash. We always say to pause baby step two while you are expecting, make sure that mom is good, baby is good. If you needed some extra cash on hand, we want that available to you during the pregnancy and after labor delivery.

And then we can go back to this. So I don't want you to do anything major for nine months. I mean, I want you to pause and wait. Can I throw an alternative in here? I just want to talk through this. Yes, do. But I understand what you're saying. Can you guys even pile up cash, given that you guys have a somewhat limited income? Can you even pile up cash without you having to go work extra?

Yeah, based off of just the regular income, not a lot of wiggle room there. I mean, I am door dashing and I'm in the process of getting my real estate license. All right, so let me ask you this, all right, because I just want to get Rachel's take on this, because I have an aggressive approach. Does it mean it's what he should do? All right, is this house that you're in now, is this your forever house? Is this a house you guys are absolutely in love with, or do you consider this a starter house that you're in now, is this your forever house? Is this a house you guys are absolutely in love with, or do you consider this a starter house, and you definitely see a different housing situation down the road?

Definitely not what we plan to be long-term. I would sell the house. Before we found out about this, we thought we were going to move out of state in the next three years. All right. So, Austin, I would sell the house, and I want Rachel to disagree with me here. This is what I would do if I were you. I wrote down the numbers.

I would sell the house because you guys have a lot of debt, and with this baby coming, I want you to get a fresh start. You're a young couple. This is not a long-term play for you guys. The value of this house, it's not a big-time investment play that you could live in, even if you paid it off. So if I got the numbers right, after realtor's fees, you're going to walk away somewhere in the $100,000 range you'll have left over. Is that about right?

Yeah. Okay. That takes care of all of the debt. We are debt-free. We got $15,000 left, which, based on your income, is a really nice emergency fund we're at baby step three yep baby comes yep that gives us a little bit of margin that's that margin because they can't really save and stack cash right now with their current income so that 15k is that hey that gives us a really nice emergency fund if something health issue wise with the baby it just gives us a

cushion then once baby gets here, we decide what your wife's going to do, what that's going to look like. I like you renting right now and resetting with this new life that you have. And then we're resetting, if you will, from baby step three. And essentially you would be moving into what we call baby step 3B, beginning to save towards that next house rachel that's what i would do take a lot of pressure off of mom and dad here as they begin to a new chapter of life i like this move i like this move a lot i would sell yeah so so it's that option which is more the aggressive route or it's hey we're gonna just knock out this debt but you have to remember your

wife's income is basically going to be going away after she has the baby if she's not going to be working. So it's going to be years and years and years and years of paying off this debt. What were you guys leaning to before you called us? I'm curious. We've been talking about it the last couple of weeks. We decided that we were just going to keep plugging away. I'm about to get my real estate license.

So we're going to use that as income to just. All right. I interrupted Rachel on that. So this plays into that. Yeah. So again, I don't think there's a right or wrong here, Austin. My only hesitation and or challenge, I would say to you, Austin, if you went Ken's route, because I think that that's an option.

That's a very reasonable option. I don't think it's extreme at all. I think if you guys are not, if you don't see anything moving, it's going to take a lot of movement to get this debt paid off where you guys are with your income, but you're getting your real estate license, all that. So here's what I'll say. If you choose option A, Ken's choice, you're wiping it all out. You're wiping it all out without really much sacrifice. Yeah, you're selling your home, but there's not a ton of change that is occurring because you're going to get a lump sum. You're going to shift that money to the debt and it's all going to be done versus going through the process. Not that it's wrong to do that, but you guys have $25,000 in credit card debt, Austin.

You guys have a car you can't afford. You took out loans for school, which again, you're normal. But you have to know that there's a level of pain I kind of want you guys to feel because I want you to think I will never, ever, ever, ever, ever go back. And $25,000 of credit card debt for whatever reason that you guys are in, you have to live a different life than what you've been living. And people that walk through the debt-free process, there is so much sacrifice. There is so much like, I hate this. I can't wait to be out that they will not, they don't want to go back. But when people get an inheritance or the sale of their house and they get a lump sum, which is a gift, that's a blessing to be able in one fail sweep sweep wipe everything out

again amazing and from paper like you're going to be able to move forward quickly but please you and your wife have to sit down and promise each other that we're not going to get back into this because what this debt is is decisions that are made from a lifestyle perspective especially the credit card debt you have to remember that so austin if you guys do this and you do option a again great option um you you have to really feel deep in your soul that our behavior has to change we can't because if you keep leaving like living like you've been living there's not going to be another house that's going to wipe out the debt you know yeah it's interesting you make a very good point. But the real estate license could be...

Yeah. I want him to go with A and take the commitment. I think that's... I want him to go A, but to your point, you make a very good point. It's the right point. I didn't make it. I'm glad you did. It's right. Don't just think, oh, we wiped this out quickly and then we're tempted to play with debt again. Don't do this unless you're serious about never taking on debt again. Good, good, good point. But I'd sell the house. This is The Raging Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than

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Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to the Ramsey Show America. I'm Ken Coleman. I'm joined by Rachel Cruz, and we are here for you this hour taking your calls about your life, your money, your work, your relationships. Those three areas tend to always be connected one way or another. 888-825-5225, 888-825-5225.

Rachel, you ready for our question of the day? Yep. Our question of the day is brought to you by Neighborly, your hub for home services. Neighborly has 19 service brands nationwide and a network of local service pros. Molly made Mr. Rooter Plumbing and Lawn Pride, to name just a few. Visit Neighborly.com to find available service providers near you. Today's question comes from Jenny in Oregon. Oh my goodness, get out the peps at AC.

We have over $100,000 in car loans. $55,600 on a 2019 Tundra. $36,100 on a 2016 Toyota 4Runner. $12,000 on a 2018 Honda Accord. I would like to dump $91,700 of this debt by selling the Tundra and the 4Runner. However, my husband doesn't like paying the stupid tax on it. We are very underwater on the Tundra, and I have high miles on the 4Runner. We have listed them and have had low offers, but no real bites. If we took the offers and got a loan for the difference we could be 33 000 in the hole but the miles keep going up on both and i'm ready to get rid of them now she writes in all caps a

little bit of emotion she's jenny's had it jenny is motivated she ain't happy she says what do you think should we wait for a better offer while the clock ticks on value or cut bait? Now, I would like to hire Jenny as a lawyer. She's fantastic. She's using great phrases. She's leading us right into this, Rachel. Or should we face the stupid text? This would free up $1,900 a month to throw at other debt.

Our take-home each month is approximately $10,000, and we have $277,000 in debt that does not include our home. So dumping the vehicles would be a huge, and we have $277,000 in debt that does not include our homes. So dumping the vehicles would be a huge, and she goes all caps here. Huge help. Now, I am Mr. Get rid of the cars immediately and find the cheaper car. It's like a sport for me now because I've got three teens. I got one in a car. And you can find them.

Find the cheap cars. I got two more on the way next year, and I'm always looking. What do you find, Ken? What do you find? There are very serviceable, decent-looking cars in the $5,000 to $7,000 range. I'm not making this up. Now, are they higher miles? Yes.

Is the carpet perfect? No. But, I mean, look, if I'm trying to get out of debt here and i got to get from point a to point b as i said earlier in the show nobody cares what you're driving and here's the other thing if they do care pull around back park somewhere else okay but the low so i was saying this on the show last week but i had the car mom on instagram live with me and she's awesome she has She knows everything about cars. She's like my age, and she knows everything about cars.

So she was talking about, though, that the high mileage myth, it's become a myth. It is. She's like, these cars can run well beyond 200,000 miles. Forever. Because they are so well made. Let me tell you this. So the whole high mileage thing, I'm like, whatever. Like, buy the high mileage car.

You're not going to be in it forever. No. But get rid. Oh, I would get rid of this. So the whole high mileage thing, I'm like, whatever. Like, buy the high mileage car. You're not going to be in it forever. No. But get rid, oh, I would get rid of this stuff in a heartbeat. Cars make me like. You'd sell them all. Yes, yes. So Jenny, our answer is. I'd rather be $33,000 in debt than $100,000 in debt.

Yeah. And she's laid it all out. Jenny, you don't need us to teach you on this one. You just wanting our approval and our approval. And you've already paid the stupid tax by paying a car payment every month at this point. Yeah, I think you've got to sit down with the hubs, and you've got to change his mind from the focus on the stupid tax to what this really does for us every month. Real numbers.

He's worried about the stupid tax as opposed to the numbers. If you have almost $2,000 a month, all day, every day, y'all. By the way, one quote. All day, every day, y'all. By the way, one quote. All day, every day. I'm no car mom. All right. But I will tell you as I'm looking at cars for my kids, you have to, there's a calculated risk here, but you can get really nice luxury cars.

And I'm just going to pull out a couple of brands a mercedes or a bmw yeah that may only be about 10 years old are in fantastic shape on the outside and the inside now these cars do cost more to repair so you you'd have to have that emergency fund and margin but you can buy them less than ten thousand dollars because you know why because those owners of those cars are taking car payments and they're just re-upping every time the next model comes out. So their value goes down. But you could be like, I don't want to drive a beater.

You could be in a nice looking Mercedes from like 2007, 2010. And again, if the previous owner took good care of them and you have the emergency fund to fix them. They will run for 250, 300,000 miles. That's right. I'm just pointing that out.

Yep. And you could go even cheaper on a Toyota. Yes. Like in her case, we would say, you know, you drive the crappy car. Right. But to your point, even people, yeah, on baby steps four through six, like if your net worth is not a million dollars, that's what we always say it needs to be in order to take the hit of buying a brand new car,

there are still nice, to your point, there are still nice cars out there that are used. Like this whole idea that you can't find one. Yeah, and you're not embarrassed by the way to drive up in these things. No, well, that and... I'm driving an older Mercedes, and you remember you saw it when I got it.

Yeah, I was like, man, nice car. I had no idea. It's a 2013. Yeah, would have no idea. It's 10 years old. You didn't believe me when i told you well in most 10 year old car and again most people are not car people most people in the interstate that you're passing at 70 miles an hour they don't know they don't care and then uh the psychology of money that book the author pointed this out and i've never forgotten it because i'm like it is so true and i'm not a big car person so it doesn't relate to me 100 but he was like whenever you drive whenever you see a cool car you're

looking at the car right rarely are you looking at the driver and being like cool guy look at him he's awesome great point he's they're just like what use this car man what did my I don't know I don't know what car things people say they resent you but they're looking at the car right they don't like you they don't care about you they're not even really looking at you but they're looking at the cool like you know we pass an exotic car there's there's an there's an exotic car yeah that passes on our street not our neighborhood street but like our one of our main streets and we see it and it's blue so it's very obvious but you'll see it kind of around they usually are by the way and i'm like and the windows are tenants i'm like you don't even see the person that's in there but you see this like i have a confession which is fine

but i'm just saying like again to that point you're driving something that people aren't even looking at you for for some weird identity thing so forget it i have a confession that may actually shed light on what you're saying or it's just going to expose me as being a jerk can't wait love jerky ken when i see those kind of cars those high-end exotic cars driving by what do you think i love jerky ken it just hit me uh i judge them i judge the person i go what kind of complex are they making up for anybody else in the live studio audience i see some i i immediately go oh you gotta have the cobalt blue fancy car so that everybody in your life thinks that you're special what are you covering up for i don't think what do you and i want to be like that guy

anybody else in the city i mean am i the only one that thinks that way i immediately start judging you not respecting you sure and that's more of the crazy exotic but if you see like a night like a new like yeah escalators i'm only talking no no i'm talking about your neighbor yeah he's got my neighbor but it's the like oh sorry i've just offended your neighbors no the point is the exotic car the tinted windows it's really loud it's like look at me that's what i think of that person i know i know or i just think so what's the real to your point what's the real to your point what's the real reward like if you're if you're taking it out on the racetrack and you got

god-awful amounts of money and that's probably maybe well that's one thing but just like you you're stuck with a 1200 car $1,200 car probably more for these kind of $1,500 yeah it's like what's the whole point you are driving something that's losing value every time you burn rubber, pal. Right. Absolutely. You know? I know. I don't know.

There's some nice cars out there. And I love a nice car, so don't get me wrong. I know. I think it's great. You were griping about your minivan, though, the other day on social media. I wasn't griping. I just said I acknowledge that I drive a minivan, and every time I do, my soul does die a little bit because it's a minivan.

All right, folks. But it's fine. And it's great. I've been waiting for this moment to confront you on this. I tried to talk you out of it. No, I don't want to be talked out of it. No, but you said your soul dies when you get in the minivan. A little bit.

Get a Suburban. No, because the minivan is amazing. No, I disagree. You sit in that minivan, Ken, and you have three freaking small children that take a peanut butter and jelly sandwich and do this and rub it on the seats. I don't want a Suburban. All right, thank you. I got to have time for a rebuttal. That's a third of the cost of a freaking SUV.

Stacey and I had three kids. Those SUVs are insane. And one day I will. Three kids. Hold on. We had three kids and never once did I go, gosh, I wish the door slid open. Yes, you did, Stacey.

No, it's a marketing ploy. No, no. Please get you some captain chairs. No. You're fine. When those doors open and slam, nope. No, not's a marketing ploy. Please get you some captain chairs. You're fine. When those doors open and slam. No, not at all. Nobody cares. Sliding door.

It's a myth. This is the Ramsey Show. Welcome back, America. You have joined the conversation here on the Ramsey Show. I'm Kid Coleman. She is Rachel Cruz. The phone number is 888-825-5225. That's 888-825-5225.

And I've got something I've got to tell you about. Where is that? Oh, yes, here we go. I'm in the middle. I'm landing the plane, if you will. I've got three classes left on my Financial Peace University class. Oh, yeah, how's it going? All of the Ramsey personalities are coordinated class. It's great fun. I've got the Wednesday, if you will. I've got three classes left on my Financial Peace University class. Oh, yeah. How's it going? All of the rams and personalities are coordinated class. It's great fun.

I've got the Wednesday, Friday night group. So like after today's show, I'll get a little bit of green tea with honey, get my energy up, rest my voice, got to get home. We do it on the back patio with the wooden American flag behind me. That's fun. Thank you very much. And a great crowd. I people signed up for a Wednesday night and a Friday night. I get the Wednesday night, but Friday night FPU class, we're having a party. People getting out of debt.

They're hanging around. They're not going out on Friday night. They're saving their money. It works. The class works. It's just got an unbelievable track record. Because we have a lot of people that are coming in new to the show, Rachel, as you know. You see the numbers. So exciting to see more and more people discovering the show via podcast, via YouTube, and learning about the process. They listen to the calls, but they haven't truly decided to jump in yet. You know you're learning

about what to do with your money based on how we teach, but you haven't believed it and started doing it. And as Davis said, for decades, personal finance is 80% behavior, 20% head knowledge. So the proven way to change your behavior is through the knowledge, but also the community and the accountability of a Financial Peace University class. It is the difference between trying to get in shape on your own versus hiring a trainer. So it's worked for millions. It's a nine-week commitment, and you'll never handle money the same way again. Don't just listen to the show.

Commit to doing what it takes to win by joining an FPU class at ramseysolutions.com slash FPU. That's ramseysolutions.com slash FPU. Laura is up next in Salem, Oregon. Laura, how can we help? Hi. Thank you for taking my call. Nice to be able to talk to you guys.

So I read Total Money Makeover years ago before the pandemic and started focusing on paying off my $200,000 plus in student loans. Then the pandemic hit, and I kind of fell off the focus wagon but luckily i had my auto savings like setups i stopped making payments to my student loans but set everything up to auto save so i'm now to the point where i can between my savings and my investments that i've been playing with over the last few years i can by the end of this summer, I should be able to pay off all my student loans. Wow. 200,000. That's amazing. Well, I was paying on them a little, I mean, I've been out of school for 14 years, so it's been taking, it's a lot, it's not just been a lot, I'm down to 149 right now. And so it's, it's been a

long process, but, and I don't have any credit card debt. I do have a loan on my solar panels, but that's it. And then my mortgages. So I have, my question is I have a primary mortgage and then I also have a rental house and I know you guys always say to sell the rental, but my, the rental was purchased for my mother and my sister because they were getting priced out of their rent. And so my mom has since passed and now it's just my sister on her own in my rental house. She has been diligently paying me and I get about $400 a month income past the mortgage from that every month. So I don't want to kick her out and sell it. So I just need to know which one I should focus on first, the rental or my primary as far

as paying off once I'm done with my student loans this summer okay so once you pay off your loans how much is the solar panels like 30 000 30 okay my next set my they do offset that my my power bill so it's not i mean yes it's a loan, but it's not costing me anything. So, yeah, because you're not paying like utilities and stuff. Correct. Is what you're saying. But you are having to pay monthly payment. Right.

So instead of paying a utility bill every month, I pay the solar panel. Right. But that is debt, though. I mean, you still, yes, I hear what you're saying. But that's still, oh, yes. Yeah, exactly. I just want to make sure we're on the same page there. OK. Yeah. So I honestly, Laura, I mean, I would we teach smalls to largest. So whenever you you cash out, you said you had some investments. Are they non-retirement? Correct. Yeah. I have about a half million in retirement 401k. Oh, good for you.

I've been maxing that out since I got out of school. Okay, good for you. How much is in the other investments? So I got about 77,000 in my other investments, and I've got 66,000 just in a high interest savings. Okay. So I'm like, together, I've got 143. But by the end of the summer I should have the 149. Okay, perfect. Yeah, I mean, I would lump those solar panels in too. That would be the next thing I would. And technically with the debt snowball, knock out the solar panels and then have some of the student loans left to then knock out, you know, as the year goes on.

How much money do you make a year? About $145, not counting any overtime. Okay, perfect. Yeah, so I would attack the, go ahead and get the solar panels out of the way so that that monthly payment that's going to the solar panels and not having to pay utilities,

that you have that so that you can, you know, that's extra cash too to throw at the student loans. So I would knock out that smallest one first at $30,000, pay off the student loans. Then once you're done there, save up that emergency funds. And then you're still funding retirement. How would you feel about pausing retirement? That makes me nervous. Yeah. So I did.

How much a month is going to retirement? Well, 15% is going to my 401k. Okay. And that maxes, it maxes out usually in August or October, I mean. And so actually what I did when I saw how close I was to being able to pay off these student loans, I backed off my retirement investment for the summer so that I can take that money and put towards this and then back up after the student loan. You have $500,000 in retirement. You're doing great. If you paused for a year, you're doing great. Because we want to free up as much cash as possible to get all of this paid

off. And, and again, I'm not talking yet your mortgage, but even just this, because you'll still have some consumer debt left or some of the student loans left even after you cashed out everything and with the solar panels. So if I were you, Laura, I would pause everything. And I know you hate that and that's so scary, but you're doing, I mean, you're doing great.

I also have a 14 year old that's starting high school that I need to put some money aside for college. Yes, yes. And you will do all of that. I got lots of buckets to put money in. I know. And that's what's hard, Laura, is you're trying to do it all. You're trying to do it all.

I want you to focus on one thing, and I want you to focus on getting these solar panels and this student loan paid off. Everything needs to pause. Yes. What's the rental situation? Can I stick my nose in this? What's one of the numbers really quick on the rental? So I owe 130 and it's probably worth about 250. I get 1200 a month rent and then payments only 800. I'd sell the rental tomorrow. I'd put it, I'd list it tomorrow. My sister is living in it. Well, she can live somewhere else.

Not for that price, honestly. Honestly, she can't rent for that. I've got a good price. I understand, but look what you could do. You could sell it for $250. It's worth $130. Take away the realtor's fees on there. We're talking about a massive life change. You've got too much debt to have a rental what's your yeah you're i mean just what we teach you should not have this rental given the debt you've got so so i bought the rental originally from my mother who passed in 2021 she was being priced out of her rent she was i basically forced her to retire because of medical things and so she was living on social security and her the option was

for her to live with me or to find her a place that i could basically all right real quick because we don't have a lot of time i gotta cut you off because are you single married what's your situation i am single i would listen to me i would sell the house the rental and sister can come live with you and pay you some rent you're gonna get to get this whole... No. Well, okay, here's the deal. Laura, you don't need... I love my family too much. You don't need a rental. Does your sister, is she not able to work?

Oh, she's working, yes. She's paying the full $1,200 for the rent. Then she's a grown woman. I know, Laura. There might be some... You could be... Oh, my gosh, I'd sell this rental, Rachel. It changes everything.

I hear your heart in it, Laura, and I think it's okay to help, but also we want you to win, Laura. And your sister may have to make some hard grown-up decisions on her own too, and you not having to be the one caring, caretaking that for her. I just want you to wrestle with this question. How would selling that rental change your financial picture? Wrestle with that and decide what you want to do. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by Rachel Cruz this hour. The phone number for you to jump in and talk about your life, specifically your money, your relationships, and your work is 888-825-5225. That's 888-825-5225. Bryce joins us now in Columbia, Missouri. Bryce, how can we help?

Okay. Thank you for taking my call, guys. I really appreciate it. You bet. Okay, so I'm a junior at the University of Missouri studying finance and investment banking. Basically what my question is, is what can I do to be more competitive in the job market since I'm attending a non-target school? These jobs usually recruit from Ivy League schools like that.

I'm going to be graduating in between $120,000 and $130,000 in student loan debt. Now I've already taken some steps to help me when I get out. I'm in the KPMG Financial Advising Accelerator. Okay, good. So I have that on my resume already. What specifically are you looking for? I just basically want to be able to be on par with Ivy League students because I have a mountain of debt that I'm going to have to pay.

No, no, no. I'm sorry. It was a bad question on my part. Are you looking for financial advising, investments? Like, what's the specific lane, that seat on the bus you're wanting to land? I would say financial advising. That's what I'm mostly looking for right now. Okay, gotcha. Well, it's a good question. I understand the question.

I will tell you that anybody that claims to say, well, there's a very clear answer to that, I think they'd be wrong. This is going to be just straight opinion. I will tell you that you, the candidate, are what they are looking at more than the name on your diploma. Now, that's not true across the board. I mean that you could talk to, you could talk to 10 hiring managers and eight would agree with me or two wouldn't or five would. And they might say, well, if you're from an Ivy league school, I'm going to pay attention to that. That, that may be true, but I will tell you getting into the initial interview process, it won't have any effect at all. If you're just going to apply the old school way, which is I'm going to put a resume in and I'm going to go into the system,

then I can tell you at the level you're going in, they are using artificial intelligence to pre-screen candidates. It's just on some level you're dealing with that. So the Ivy League thing, is it going to stand out more or not? I don't know that there's a whole lot of evidence that says it does. It might open a door, but I don't believe it's going to win out more or not? I don't know that there's a whole lot of evidence that says it does. It might open a door, but I'm not, I don't believe it's going to win you the job. So here's the advantage that, that I will tell you that I believe you can have relationships. So let's just say you want to go work for KPMG, just using them, their big time firm. All right.

So you, you identify a job for KPMG that you want and and and you're up against you know ivy leaguers what will make the difference is is if you have a relationship connection you may have a one-to-one or it may be one to three what i mean by one to three is i know somebody that knows somebody that knows somebody over there and and they are making a call on your behalf emailing on your behalf they are submitting your resume with a letter of recommendation to say i know bryce bryce just graduated from boom and this is what his gpa is and this is what he's done and they are presenting you with their credibility I think, is the only viable competitive advantage that you can have over an Ivy Leaguer if you have the same degrees and virtually similar GPAs. I think it's going to come down to relationships where someone's vouching for you, and that goes a long way.

Go ahead. I said, so basically networking, getting to know people who already work there, that way it gets me past the AI screening process. A hundred percent. You're still going to go through the AI because you're still going to have to go through the formal application process. But the point is, is now you're seen. If you just go through the AI thing, you don't know what AI is looking for. That company is not going to tell you what they're looking for on the resume. So it's a relationship situation.

So, for instance, you want to be thinking about your local connections. Guys and gals that you know that are in this field. Do they know somebody? You see where I'm going here? Yeah. You've got to start digging. Now, that's for the competitive advantage. How do I be more competitive?

That works works by the way whether i'm competing against an ivy leaguer or not uh relationships and referrals i'm like that's that will get your thing pulled out of a stack that's the idea because yeah there's an actual person like what ken's saying that that's looking at it and that knows your name but i also want to encourage you the course that you're taking now above and beyond your schooling anything like that any additional qualifications certifications of that, I'd stack all of those. Those are worth the time and the effort. As long as you're not going into debt to pay for these things, these are all going to be valuable. But it's all about relationships, relationships,

relationships. I'll tell you what, hang on the line. I'm going to give you a copy of my book, The Proximity Principle, which is a deep dive on this. The power of proximity is just simply this. When I'm around the people that are doing what I want to do and I'm in the places where that's being done, opportunities will come to me. And so this is about the right people, the right place. It's a deep dive, super easy to read. Hang on the line. It's a bit of a guidebook for this very thing, making the right connections so that opportunities actually come to you. Let's go now to Jake in the Twin Cities. I always love, do you know the Twin Cities? St. Paul, Minneapolis. There you go. Don't mess with Rachel on the basic trivia, folks. She's got it. Jake, how can we help? Yeah, thank you so much for taking my call this morning. I sorry this afternoon you bet my wife and i just had a baby about six months ago oh congratulations thank you appreciate it do you have a minivan jake oh we do we don't have a minivan and we don't have any plans to but good for you jake hold strong stay strong jake. That is part of the reason I'm calling is because we, before having a child, my wife worked.

And now after having our child, my wife decided to be a stay-at-home mom. And we decided to, a couple of years ago, to buy a truck. And before we started listening to Dave Ramsey, we took out a loan on it. We've been pretty smart in all the other things. So the only loans that we have is this truck loan and our mortgage. We're trying to decide if we should pay off the loan with our savings, sell the truck, and maybe buy a beater car, or continue to try to take every single penny that we have

and kind of go gazelle and tense and trying to pay off the truck with new cash coming in. How much do you guys make a year? So I do software sales. So I make a $100,000 base, but last year I probably did about $200,000. Oh, good for you, Jake. That's awesome. Yeah. How much is left on the car loan? It's about $29,000.

$29,000. What do you guys have in savings? Yeah, so for cash, we have about $50,000 in cash, but that would deplete our six-month emergency savings, which I put aside quite a bit just because we wanted to make sure that we had enough. Having a little one and my wife not working anymore, we wanted to have six months worth of savings instead of three months. And so that's most of our six months worth of savings there. Okay. I would sell the truck and buy a minivan. I'm just kidding, Jake. I would take the savings and I'd pay off. Not a bad idea. And I would pay off the truck. I would pay it off. And you guys have plenty of cash. You're in a very stable job, right? If you were

transitioning jobs or there was big stuff happening, then I feel like you'd be like, okay, yes, having a lot of money in the bank, okay, that could be really scary. But you guys are fine, Jake. You're fine. I would totally take that, pay off the truck, bump it back up to six months, which your income is fabulous.

You guys are going to be able to do that really quickly. And then just work yourself down the baby steps. So if I were you today, I would, I just paid off, paid off. What kind of truck is it? It's a Ford F-150. And it's got the extended cab? Oh, yeah. It's got all the fun features and all the other fun stuff.

And you make a good income. So your truck is not out of proportion to you guys. Pay it off. And I just want to point out to Rachel that you have the F-150 with the extended cab, and the baby seat goes fine in there. Except you have the carrier, Jake, don't you? You have the carrier. You don't need sliding doors.

Jake's strong. He can put the baby in the back. It's going to be okay. Stay-at-home mom. You've got to build that muscle. Jake, pay it off. Have a great weekend with a debt in the back. It's going to be okay. Stay at home, mom. You've got to build that muscle. Jake, paid off. Have a great weekend with a debt-free home. That's awesome. And a heartbeat, I would.

And a paid-off truck. I mean, paid-off truck. I appreciate the caution. New baby. Life is shifting. I get it. You guys are good. You're in a very stable position job-wise. You'll get that emergency fund back up. And that truck payment is a raise. That's coming right back to you, to Rachel's point.'ll get that emergency fund back up. And that truck payment is a raise. Yes.

That's coming right back to you, to Rachel's point. That's right. So really nothing to be afraid of. Good logic, but you're okay. Pay that truck off and don't buy the minivan. Rachel Cruz, great hour. Thanks for being with me. James Childs and the crew keeping us on the air.

And you, America, even those that drive a minivan, we love you. This is The Ramsey Show. Hey, it's Rachel Cruz. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.