The Ramsey Show - App - What Should We Be Doing With Our Money? (Hour 2)

Episode Date: July 28, 2023

Ken Coleman & George Kamel answer your questions and discuss:  "Should I take an unwanted promotion to pay off debt?" How technology is and isn't changing the workplace, "What should we be doing with our money?" "When is it OK to make a career change?" "How do we budget an inconsistent income?" "Do you have any tips on taxes and investing?" "Can I afford to buy a house when I have debt?" 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/george 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

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. 888-825-5225 is the phone number. 888-825-5225. I'm Ken Coleman, joined by the incomparable, the inimitable George Campbell.

The insufferable, some might say. The insufferable, some would say. But I think he's pretty fantastic, and we have a lot of fun together, and we're here to help you. Let's go. Megan is up in the Windy City, Chicago, Illinois. Megan, how can we help? Hi, I have been with my current company for just under seven years and was recently approached by a leader within my department to apply for a position that they

have with their team. And so I'm just looking for advice. I love my current team, my leader, the work that I do. I'm a little bit apprehensive to love my current team, my leader, the work that I do. I'm a little bit apprehensive to apply for this new position. However, it would come with a salary increase and my family and I are in baby step two. So I'm just wondering, do I listen to my gut, my husband, both of which are usually correct, or do I seek out this opportunity that would come with a little bit of a pay bump in order to pay down that debt faster? All right. I want to get the facts.

And George and I will weigh in on this. But based on what I hear, you should always trust your gut. And the husband agrees with the gut. That is two for two there. But let's look at this. Because you also said a little bit of a pay bump, which tells me it's the ROI on this of changing. And everything that goes with changing is probably not worth it. But what are you making now and what would you make if you took this promotion?

Sure. So currently I make $86,000 and I think that I could get close to about $100,000. But our household currently is at $148,000 combined. All right. So we're talking about $14,000 before taxes. Yes. Okay. And our current debt is 135k, so that changed it a little bit. That's all consumer debt? Yes, student loan, credit card, two vehicles. Yeah. What are your concerns about this promotion? In other words, lay out for us the reasons as to why you're apprehensive and you just didn't, you don't feel like it's a good fit.

Sure. So the hiring manager, I was actually up against them for a different promotion day one out. They were the better fit. So this new position that I would be applying for would be reporting to them. So they're a new leader. And I'm just not sure how their leadership style will be. Whereas my current leader is incredible. There's a lot of flexibility, autonomy, wonderful work-life balance, having small children at home. So I guess it's just the fear of jumping into the unknown when I have a sweet deal right now. Yeah. But I also think you know enough, and I'm just curious, the only other thing I want to know is do you know enough about the position to compare it to what you're currently doing? And you

can clearly see, forget the new leader and all the good things I have with my current leader. I just am better at this other work that I'm in now. I enjoy the work now. Is that clear to you? It is. I enjoy the work that I do now more. It's a no-brainer. Yeah, this new role would just open up my skill set a little bit. Okay. So I want George to step in here because he's the money numbers guy, but you take $14,000. It looks really good when you look at it that way, but it's not going to be $14,000. So you're talking about making a change with all of the unknowns about the leader and all of the knowns about your current leader, your current flexibility, you love the current job. It's not worth it because after taxes, it's not going to be that much.

And you and your husband would be better off selling stuff, making side hustle money to come up with that extra 14. But let's just say you were to step into this and take it, go against your gut, what your husband knows, and you end up stepping into this and you don't enjoy it. Think about how much time you're spending in a role that's not a good fit for you from a flexibility standpoint with the kiddos to the relationship with the new boss. I mean, it's not worth it. It's not that big of a payoff. If it were a hundred grand and I knew you could step back into the old position a year later, maybe, but this is an absolute big blinking neon no. Stay put. George?

Yeah, I'm with Ken and I'll make the caveat that looking at these numbers, I'm scared. I mean, $135,000 is a whole lot of debt comparatively to your income, and you have a great income. Are the cars really nice, or is this all student loans? It's predominantly student loans. The vehicles are fine, but yeah, I would say it's student loans, both of which are mine. Okay. If you're going to keep this current role, I would go get a second job. I'd be willing to sell one of the cars, maybe both, and get something cheaper because I want this debt gone in 18 months. And if you can't do that, then we need to find out another way to make that happen right now. Because that means

you're throwing, in two years, that means you're throwing 70K at this debt a year. Could you guys do that currently with your budget? I think so, yes. All right. Are you doing a monthly budget right now? Because that's, you're talking throwing six grand a month at this debt. I think that we could if we went scorched earth. Now, let me say this because George just brought up a good point. Megan, instead of us talking about you changing jobs, how about we change cars? That's a whole lot less traumatic. Do you have some equity in those cars?

Yes. Megan, if it were me and George is right, that number scares me. I wouldn't be able to sleep well. I'd start selling cars and that changes the timeline. And you still have flexibility. Great job with the kiddos. I'm telling you, I would sell the cars. I really would. Wouldn't you, George? Yeah. I mean, depending on what the cars are worth and what you could get for them and you're downgrading. I think there needs to be some level of sacrifice here, and if it has to happen in the cars, let's do that. But we need some behavior change, because what got us into this was some behavior.

Credit cards, getting nice cars we couldn't afford, all of that. It sounds like you guys have made a change. I don't know what your why was, what that trigger point was for you, but you're ready to do something about it. But you're unwilling to take the promotion, So we need to find another place to sacrifice, because this would have been great. It would have added another, you know, probably 900 bucks a month to throw out the debt. So we need to figure out a way to create that margin if it's not going to be from a promotion. What are you thinking, Maggie? We've hit you with a lot. You know what?

It's exactly what I needed to hear. You're just holding up a mirror for me, so thank you both. All right. That's what we're here for. You're awesome. I love your spirit. If you guys can do the car thing, it's only short term. And just think about the Scorched Earth.

That's part of Scorched Earth strategy right there. You get out of this thing a lot faster. You guys are making really good money. And then we replace the cars. So now's the time to do this when the kids are little, you know what I mean? Like this is the time to do that. They don't care what the car looks like. Absolutely. That's a great point. Thank you. You bet. So we did what we could. We held up the mirror and went, here's what's going on. So there's a lot of options here. The only option is we can't keep staying the same.

So if we're going to turn down the extra $14,000, we've got to figure out how we're going to get rid of $135,000 in debt. Well, but I want to be very clear. She's not turning down $14,000. That's not real dollars. And to change your life in a potentially negative way in the workplace where you're spending all that time, there wasn't enough ROI on that for me. I want to make sure people, I didn't, she's not turning down 14. That's not what it really is. I'm a numbers guy. I have to pitch it that way. No, but you understand why though? To get her to see it from a different perspective.

It's not worth it. She'd be better off getting a second job. Yeah, I don't want to call back and get rid of it. I'm miserable with my career, Ken. Hell, I took a promotion I shouldn't have taken. Yeah, life's too short to be miserable. Not fun. Let's get after it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman, joined by George Campbell.

And we are coming to you from our Nashville, Tennessee area, base world headquarters. I bring this up because we live, George and I both, live in a suburb of Nashville called Franklin, Tennessee. And, boy, everybody's talking about this. And, James, this is funny that you bring this in there. Our fearless producer brings this in to us, this story. He's so brave.

Did I say he was brave? He said fearless. It's just a it's an empty compliment it it's just what else am i gonna say you know what i mean i'm trying to say i didn't mean to derail you ken i was just adding some color commentary i love it so james my wife tells me about this last night and then you bring it in and uh this is the headline here uh in my hands franklin tennessee kroger converts to entirely self-checkout we live in the future no grocery clerks is that what you call them by the way do we still call them clerks i even know what a clerk is i think it ages you to say clerk oh there it is see there it is you taking a shot at my age again. Well, I don't think the 16-year-old at Publix is like, I'm a clerk. That's why I asked the question.

You don't have to be snippy about it. Just a yes or no suffices. Clerk went the way of the stewardess. There we go. Thank you, James. We're done with it. Oh, so we don't say clerk and we don't say stewardess, apparently. It makes me want to say it all the more. Anyway, a Kroger in Middle Tennessee, right here in this area. This is in the Cool Springs area. It's kind of the business district of our town. So this is a corporate affairs manager for Kroger's National Division, Lauren Bell. She's quoted as saying, these allow our customers to scan and bag their own items. It's a fast, friendly experience.

They're talking about it like it's a new invention. I've been doing this for years. Before it was cool. Yeah, the story is that that's all there is, is the self-checkout. Now, do you or do you self-checkout? If I have, I'd say under 10 or 15 items, I'll do it. Oh, so there's a point where you say, that's too much for me. Or if I have like 19 different things of LaCroix, it's just a lot to carry. I'd rather have them come out and scan it and make it easier on me.

Okay. Or if it's a lot to bag. I'm not a big fan of bagging. And if there's a bagger at the end, I love that. They're my favorite piece. I like where you went there. So really it's about the bagger. It's about the bagging experience for me.

Okay. For those who are not fond of the experience of self-checkout, staff will still be available in the store for customers who don't want to or are unable to scan their own. So this is where I go. Why is this a news story? Why are we talking about it? They said it was going to be all automated, all self-checkout.

But then if you really don't like it, we call barney from the back and he'll check you out so see i don't know what i will say if i have this kind of stuff bothers if i have fruits or vegetables i'm out i don't want to be looking for a tiny little code and going through their little ipad on the screen trying to figure it out yeah all right but they say it's not going to happen at all locations and the reason the tie-in to this show yeah what's the tie-in we talk a lot about career and work and how technology is changing things and people get spooked going like ken what does this mean for my job yeah and they stated at the bottom there that no no one is uh being eliminated so no one's getting fired and well you know why no one's getting eliminated

because of all the cranky people like you that'll go, I don't want to scan my banana. I want you to do it. And so they're going to drink somebody from the back to take care of your fruit. Thank you. Or if you get, you know, wine or something like that that requires ID, Ken, you've been there. I get it. I just, I don't understand. Like either go all self-checkout and we lay people off and give them a better job somewhere

else. I don't understand. I need to take it back, Ken, because I just looked up Kroger jobs. They're called grocery clerks. Still? Yes. Thank you. They do have cashier.

It comes full circle. Grocery bagger, general merchandise clerk. So clerk is still used. Well, what would you want to be called? A bagger or a clerk? Yeah. Yeah. See?

I make the point. He makes a fair point. All right. So will AI, in all seriousness, will AI eliminate and reduce the need for a certain amount of humans? No question. But remember this, if you look back over the last 50 years, you sat there and thought for a second, technology and how it's coming into the world, it's always spit off new jobs. So if you are in certain types of positions, clerical roles, administrative roles, gathering information, those kinds of jobs will be eliminated because AI can take care of that. But you take this right here, this very story to me is a bit absurd and it points out the absurdity

of fear over AI. They've got self-checkout. They say the whole store is self-checkout. But if you really don't want to do it, we're going to get somebody else to come out of the bag. Well, it's still like an Apple store there. Everyone's just hanging out, waiting for something to go wrong. Well, I did it the other day, and we had a problem with one of my coffee creamers. It wouldn't scan.

Wow. And I would normally get frustrated with that, and I look over, nice young man, zips over, boop, boop, boop, boop, young man zips over a couple things on the screen and i'm a nuisance you know i'm at costco or something the red light goes off i see it didn't weigh it properly well that's because you're so neurotic to me i don't care it's exhausting so i try to do self-checkout when i don't want to deal with people but trader joe's for example don't doesn't have self-checkout it's all people and they're the nicest people you could ask for i now see this is a very good point if you gave me the

option to do self-checkout or i get someone to take care of me every time i'm going to take the human touch there's no question about it you love people some people want to avoid people yeah i like being taken care of so do you that's your issue you like being pampered well ken's looking for the compliment from the cashier i am no but they always got one especially if there's a tip involved i'm not tipping the cashier clerk but if you're at the ice cream shop and they go oh i like your uh i like your shirt you big golfer all of a sudden kenny boy's hitting that 20 not true my response is yes i uh you know i to play. I'm not very good, but I enjoy the clothing. Thank you very much. What do I owe you? I'm not tipping the ice cream

or the coffee, people. I'm not doing it, George. Well, now self-checkout is asking for a tip. So that's where I draw the line. What do you mean self-checkout is asking for a tip? Self-checkout screens are now starting to ask for tips. Who am I tipping? Myself? Yes, but it doesn't go to you. Great job, Ken. We're going to give this money to someone who actually needs it. The tip thing's gone. It's out of control, folks.

Neither here nor there. Listen, Americans need to unite. The people in the lobby are shaking their hands. It's time for Americans to unite, arm in arm, and stop tipping anybody other than a waiter or waitress.

Can we say that? Call in for Congress 2024. Or the delivery person. Sorry, we're going to get hate mail over that one. Got to get the delivery people in there. Who else am I missing, George? That covers it. Who is it okay to tip? That's it. My barber.

Service-based work. I do have to tip the barber. But that's because I get a shampoo and a condition plus the cut. Oh, we're off the rails. I know. Alright. Let's go to Stephanie in Austin, Texas. Stephanie, how can we help? Well, not self-checkout. Say that again. You got an opinion on this? You broke up. Yeah. I'm team not self-checkout. I want someone to check me out every time.

All right, Stephanie. Thank you. That is your right as an American, and I appreciate you voicing it. How can we help today? So I am calling because we got into the baby steps and we're pretty far along, a little backwards, but we're here. And the only debt that we have left is on our primary residence and an investment property that we have. So it's substantial, but it is our house and our renter property. And we feel a little frozen as to where we should focus our dollars now that we're kind of moving into this world. And so I'm just hoping you can enlighten me a little bit with what we have in our income. Do we pour it all into knocking out the investment property, which we might be selling, by the way, so it might take care of itself, or do we pour it all into paying down our primary dwelling? What's on the primary? What's on the investment? 613K is what is owed on the primary, and the investment property

is 84K. That's owed. Please tell me you have an amazing income. I don't know what translates to amazing, but it's 200K a year myself alone. My husband's probably 150K a year. That's what I was hoping for. I was like, that is a big fat mortgage, and you guys have an amazing income. Okay, so we're up against the clock. I would pay off the investment property first, set a goal for that, then start attacking primary and just set a goal. I want it done in less than 15 years. I think you guys could do it in probably closer to five to 10, get all of this knocked out. So it doesn't need to be every single extra dollar, but set an aggressive goal and then try to beat that goal and still live your life while you're at it. We move from intense to intentional in baby steps four and on, and you guys are there.

You're crushing it. And she said they may sell that investment property. And so if they decide to do that, throw it on the main house. You got a four savings plan at that point. So I'd still knock it out. Fantastic. All right. Well done. Thank you, Stephanie, for the call. All right, George and I are going to take a break. We'll continue to argue in the commercial about self checkout versus the clerk. We'll see what we come up with. Don't move. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman, joined by George Camel. We are here for you this hour. The phone number is 888-825-5225. taking your money calls, your calls related to your work. In other words, your income. I'm here to help you with that as well.

888-825-5225. Let's go to Connor now, who joins us in Dallas, Texas. Connor, how can we help? Hey, Ken, how are you doing? I'm doing well, sir. What's going on? Oh, nothing. I just had a quick question for you. I'm kind of at a point in my career where

I have a few doors that are open to me. I work for a really good company now, and because of that, they are big about developing their people. And I'm just kind of wondering how you know which road to pick when you have a few different options. I feel like I have skills that could help me go down any of the roads. Okay. I love this question. All right. So I'll reframe this. So when someone has multiple professional opportunities, how do we weigh those and make the choice? That's what you're asking. Yes. So the first thing I'm going to look at is long-term. I'm always going to look at long-term first because most people make professional decisions based on the short-term. In other words, they look at, well, I'm going to get a pay bump of X percent or a certain amount of money, and I'm going to get a nice title, and that feels really good. I'm wanted, I'm valued.

And so we think, oh, well, that's a no brainer. And we will step into positions many times that aren't a good fit for us in the short term. And even worse, don't position us for the long term. Okay? So that's why I like to look at the long term. So let's say you've got, well, let's just be very, very realistic in your situation. How many opportunities do you have in front of you, potential jobs at this company? So you've got three. So I'm going to look at the three and I'm going to go, okay,

which one of these three best positions me for the long term or where i want to be long term make sense is that clear to you of the three which one let's call them one let's call them uh a b and c which one um is is the best long-term positioning for you to get where you want to go? Like you want the actual position? No, just tell me. Of the three, call them A, B, and C. Let's call this one A. So which one is it?

Describe that to me. Position A is the one that is the best long-term. What is that? I think that is going to be more of a finance-related role, and I think it does position me best to use the education i have now and the skills that i have okay but what do you want to do long term in the fine i'd like to i'd like to get into more of a managerial role down the road i have some good mentors now and uh i think that is probably the area where i would best get that chance the other

side is more of a uh it's a good it's a better job for now, but I don't think there is really a leadership roll down that corridor. Okay. That's a perfect example of what I'm looking for. I want to look at long-term and then I'm going to look at, is this of the best fit for me? And in the short term, meaning I can get in here and I know I can at least do the job. I may not love it, but I've got enough talent to do it, and it's positioning for the long term. It feels like you know the one.

Is that correct? Is there a clear winner? Well, the reason I'm calling is because there is quite a big pay disparity between the two. Meaning going backwards? No. Both of them, if I went down in option A, I would make slightly more than I make now. But option B, even though I think the long-term where I want to go might be a little different, I think the earnings opportunity is considerably better.

How much better? Like 40% better, 35-40% better. Okay. How long do you see yourself, if we took both positions, how long before you would think that you'd have a chance to move up? Because at some point, if we take the one with more money now, you would have to, sounds like, pivot or move left or right, not just keep going up. Is that correct? Yeah, I think so. How long?

What would be the length of time in the position that pays more? Well, in the position, I think I could do that job for four to five years before I would kind of age out of that and they would want me to go a different direction. What about the other one that is less of a pay bump, but it's the better long-term positioning? How long would you stay in that before you felt like you would be moving to the next rung? I think that would be like two to three years because that department is smaller. And I think the opportunity for growth there will be larger. And would the money catch up after that?

If you move on in two or three years? I think even if I moved up in that role, it would get me closer to that job. But still not the same. So I guess it's just a priority thing, huh? Well, you're talking to a guy who named a book, From Paycheck to Purpose, because I've just talked to too many people that'll take a job for a paycheck and it wears off. Okay. George, you know this. There's something about us humans. It doesn't take us long to adapt to more money.

And once the high of the money wears off, now you're stuck with, do I enjoy this? Is this something I want to do long-term? And that's my concern, Connor, is that you take the 40% bump, but it doesn't put you in position to get where you ultimately want to go. And you'll end up regretting and resenting that position. Okay. Is this the company long-term? Because you're telling me the kind of role, you want to be in leadership, but do we know for sure, hey, I'd be here forever? Yeah. If the opportunity was there. I have really good bosses. I have really good people around me and it's the industry I want to be in. Okay. So you're in the right place. How much do you want that leadership position? How much? You know, I've never been in

it, so I'm not sure at this point. I just feel like it's the natural step, right? And like when you're progressing in your career. Dig into that though. Go hang out with some leaders that are in that type of management role in this company. Have a lunch with them, coffee, and find out. You think you want it. You don't know that you want it. And George, that concerns me.

And Connor, go find out. You can hang out with leaders in those type of positions enough to get an idea. Would I really enjoy doing that all day long? That's a key. You got to make sure you check that out. Sometimes we think it would be a natural progression. And a natural progression doesn't mean that it's the right progression for you. Younger in your career, you look at the leaders, you go, man, they make great money.

Look at them. I want to be like them when I grow up. And then you realize, man, they're in meetings all day, and they're dealing with people issues. And unless you love that stuff, don't step into it just for the bigger paycheck. It's true. It wears off quickly, folks. Let's go to JC in Cedar Rapids, Iowa. How can we help?

Hi. Hi. My question for you today is, how can I be successful in budgeting and that ultimately leading success in paying down debts and saving for a house when our income is sporadic? How sporadic are we talking? Amount. My husband can get paid large sums of money, like once a week or every two months. Are there months with $0? The month last February, the most we had the entire month was $1,200. Okay. And are you bringing in income as well?

No. Okay. So if it's all on him, we've got to, and where are you at in the baby steps? Probably the beginning because we started paying down debts and saving money. And then we got to a few months where we didn't have enough income to cover the bills and ate up all of our savings. Well, I'm going to help you with this. I'll give you the short answer now. I'm going to gift you one year of every dollar premium. And inside of that, there's a paycheck planning tool,

which will help you with a regular income, which is awesome. But the key here is you create a prioritized spending plan if you have a regular income, which means we're going to budget based off the lowest estimate. So if we get a thousand bucks this month, where's it going to go? Well, you need food, shelter, utilities, transportation. That is your A1. If there's extra money beyond that, we're going to apply it towards our other goals, our debts, a subscription, whatever those things may be. And so that will help you to create that priority list and then pay the first one. And then whenever the money runs out, that's when it runs out. And you may want to set aside money when a big lump sum comes in, set aside for those leaner months to help you with this. And for those of you that want to check that feature out,

you can go to everydollar.com slash George. We've got a really cool promo right now, two-week free trial of EveryDollar Premium and $15 off at EveryDollar.com slash George. But JC's special. She's going to get it for free. Hang on the line, JC. We'll take care of you. And we need to get that income up. That's what I'm hearing right now. Consistent income is going to help. I'll tell you what I'm hearing. You're such a giver. That's what I do. Giving free stuff away. It's Dave's special website. It's unbelievable. This is The Ramsey Show. Welcome back to The Ramsey Show. Thrilled to have you with us as we talk about your life,

specifically your money, your work, and your relationships. 888-825-5225 is the number. I'm Ken Coleman. George Campbell joins me riding shotgun today. Let's go to Panama City. Oh, down to the 30A. Panama City, Florida. Isaac is on the line.

Isaac, how can we help? Hi, Mr. Coleman and Mr. Campbell. Thank you for taking my call. I've never felt so old in my life. Thank you for the respect. Yes, thank you, Isaac. How can we help? Okay, so I'm 18 years old.

I will be a freshman in college this fall. I've been homeschooled all my life. And my senior year of high school, I took the Foundations and Personal Finance course. Quick shout out to my teacher, Ms. Kim Vermilia, who taught me. Nice. After taking the course, I was fully on board with the Ramsey plan. I read Financial Peace Revisited. And so I'm all on no credit cards, listening to financial advice from broke people. Wow. And I'm living on a written budget. Dude, you have the wisdom of, he's got

all the lines. Sharp 60 year old. So I'm really proud of you for figuring this stuff out this early. Yes, sir. So I'm finishing up an internship that will pay me about 40,000, $4,000 at the end. And I'll be working part-time as a math tutor as I go to college full-time. And I will be attending a local state college and living at home to cut down on my costs. And I have multiple scholarships and my generous grandparents have a 529 plan five 29 plan for my siblings and I, so, um, college will be well taken care of. Wow. And, um,

so I should be able to get through college without debt. And so, um, I have some like questions about as I enter adulthood in the finance world. So my first question is, should I start investing in my 401k while I'm still in college because I have so much margin? And then my second question is, when I write my budgets, do I have to include an item line for taxes? Great questions. Okay, so what are you doing for work right now? Right now it's an internship at my local Navy base, and we're basically working with STEM outreach, and it's about to end actually today.

Okay, so what's next? So next I'll be going to college full-time, and then I'll be studying for engineering, and then I will also have a part-time math job while I'm at it. Awesome. So you won't have access to a 401k then? No, I do have access to a 401k. How is that possible if you're not employed? I will be employed. You said the internship is over.

This upcoming month. But you're going to now go be an employee there at the Navy base? No, I'm going to be employed at my local state college. Got it. Okay, and they have a 401k program. No, I'm opening up one with our family's financial advisor. Okay. But a 401k is connected to an employer. Are you talking about an IRA? I'm not really sure. I know I'm just opening up an investment or a retirement plan. Okay. My guess is that's going to be an individual retirement arrangement.

And that is a retirement plan that is outside of an employer. That's what was confusing me. You kept saying 401k. I was like, what? He's the, there's no employer here. Okay. So with the IRA, you're going to have a much lower contribution limits, but it's a great thing.

If you're telling me that college is covered 100% and that you have money, some money in the bank already? Yes, sir. How much? I've got enough. I'm not quite sure, but from what my grandparents told me, I could have taken an out-of-state school and still been fine. So they said I'm well covered. So if that's covered and you have a small emergency fund while you're in college and you're bringing in income, then you can and should contribute to a Roth IRA. That's what I would do if I was in your shoes. And if you can max that out every year, you know, this year at $6,500, you will be crushing it and cruising later on in life as that money grows for you. And I would invest inside of that Roth IRA.

You're going to have so many investment options. So when you sit down with your financial advisor, you tell them, hey, I want to do it the Ramsey way. I want to be spread across four different types of mutual funds to diversify and spread this thing out. And that will put you in a really, really great spot. And that's all the investing I would do for now. Until you have a full-time job, you'll probably have access to a different retirement plan and you'll be off to the races then. Now, as far as taxes, are you saying you're just normal, your tax returns? Yes, all I know is that the government will require taxes of me sometime, and I've just never, just not sure how to do it. So I know it's different right now because my part-time job probably won't put me at

a, you know, any high income or income tax or anything. Yeah. So here's what you want to figure out. Does your employer take out taxes? My guess is that they will, unless you're like a 1099 contractor. And if that's the case, I would set aside whatever money you get, just set aside 25% of that, just move it over to a savings account so that when it comes time to do your tax return, you will have that money because you're going to have a bill. And you can also do something called quarterly estimated payments to the IRS if you know you're going to have consistent side income coming in like that. So that you can work with a tax pro, you can get connected at ramseysolutions.com as well as a smart investor pro for the financial

advising side. But man, what a sharp young guy. Yeah, he's got it together. That's amazing. This is what happens, parents, when your kids watch the foundations in personal finance. I was talking to like a grown adult. Yeah, he really had it stuffed down. Really great. He's off and running. Let's go now to Emily, who joins us in Madison, Wisconsin. Emily, how can we help? Hi, I am in the process of possibly buying my first home. I'm 28 years old. I currently make $42,000 a year. I work for Thrivent Financial. I do have some debt that I'm concerned about when it comes to being able to afford a house,

and I was just kind of wanting your guys' opinion on that. Okay. How much debt do you have? Including my car. So my auto loan is around $10,800. I have two credit cards, one of them with a balance of $650. The other one's around $400. And then I also owe on tuition, which is $968. Okay. So let's call that what? 13 grand or so? Yes. Okay. So how quickly can we clean up this 13 grand if we start selling some stuff around the house, get a side job, stop going out to eat? How quickly could we get rid of this debt?

So I actually clean houses like Airbnbs, RBO's, and then privately owned vacation homes in the area. And we don't, it's a friend and I that do this. And so we don't have an LLC and they actually pay us in cash. We get paid once a month through that. And then I actually plan on at the end of this month, taking a decent chunk of that and putting that towards all of my debt. Good. I would take all of it and throw it at the debt. That should be your singular focus right now. Do you have any money in the bank? I have $5,000 in a savings account for the purchase of my home. And then I have around $2,500 in my savings account.

You got $7,500? Yep. And then for the purchase of my house, I also have a mutual fund with, um, $3,000 in there. Okay. That we're at 10, five. Awesome. Okay. Well, I'm going to give you some good news and bad news. The good news is that you have $10,500 cash, which is awesome. The bad news is you keep saying this is for the house. This is for the house. And if you're following the Ramsey plan, which I'm telling you is the best path to a peaceful financial life and doing this the right way, that money, most of it's going to go towards the debt. Baby step one, $1,000

in a savings account. Everything else is going towards that consumer debt. But guess what? That would knock out your car loan like today almost, right? If you put 9,500 towards that thing, next month, next month or two, that car loan's gone. And now we're down to what? Two grand left of debt? Yes. And then once we have that done, let's get a fully funded emergency fund.

On top of that thousand, let's stack three to six months of expenses. And then we can start saving up for the house. Okay. Now that's going to delay your house purchase, isn't it? Yes. And that's the to delay your house purchase, isn't it? Yes. And that's my, that's the situation that I'm in right now is that my current place, I'm needing to be out of here by October. Okay. Well, let's go rent somewhere else. And if we need to get a roommate, let's do that. But we're not ready to just jump into a house because our lease is ending. That is a real

bad decision. Emily, here's what I want you to hear. When George tells you this, you don't have enough money really saved up for a significant house down payment anyway. So this is going to free up so much money in your budget to actually reduce your expenses. That's why this is such a good move. You're not going backwards. You're actually moving forward when you use that money to pay off this debt. Then now we get very serious about the emergency fund. Then we start saving for the house.

And it's going to be worth the wait. I promise. Renting is not a sin in your situation. Good hour, George. Good stuff. Thank you, James Childs and the team. And thank you, America, for listening. This is The Ramsey Show.

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