The Ramsey Show - App - What’s the Best Way To Pay Off Student Loans? (Hour 2)

Episode Date: June 23, 2022

George Kamel & Ken Coleman discuss: Dealing with news of a job loss, Buying a car after a lease, Whether or not to sell a house, The best way to pay off student loans.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 From Ramsey Network, this is The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to living well. I'm George Campbell, joined today by Ken Coleman, and we are taking your calls, America. The number to call is 888-825-5225. Lenore kicks us off in Austin, Texas. Lenore, welcome to the show. Hi.

Did we get the name right? Yes, you did. Thanks for taking my call. Happy to take it. How can we help? Well, I've been listening to this show for quite a while and been wanting to call. And today I was extremely motivated to call because something came up and I've been wanting to call and speak regarding this topic. My company, I just found out today that I was just let go July 22nd, and I've been with my company for about 23 years or so. Oh, my goodness. I'm so sorry.

It's an investment company. Yeah, I kind of expected it. I'll tell you why. is I just want to prior to this happening for the last couple of years I've kind of wanted to do something different for the last part of my career working life I'm 57 and I just wanted to I don't want to stop working right now because I enjoy working but I want to do something that is something that's coming from my spirit that I enjoy and not just necessarily my head. And what is that? I work at an investment company.

What is that? Right now. I think you know or you've wondered about it enough. Give me a description of it. Don't worry about how pretty it sounds. Well, I'm not. Actually, I know what I used to want to do, but I don't think I'm going to go through all that right now in counseling or psychology. But I really don't think I'm prepared to want to go back to school for that.

Sure. I was interested in getting my real estate license, something that I could work from home and do well because I know how to talk to people. I have excellent customer service. I work in an investment company, and I actually place trades all day and deal with the other dealers back office. I do not talk to clients or shareholders and we just talk money and trades and this and that. And I'm just kind of tired of it anyway. Sure. But, um, I, this company recently, uh, since last December, uh, required us to get the COVID vaccine. And for my own reasons, I did not want it.

And it's a commitment where I do trust God, and I know he's got something for me, but they allowed us to submit an exemption request twice, and it was not approved. So they did notify me today. So Lenore, we're sorry about that. I'm glad that you had at least some kind of warning. So it's not as shocking. But listen, you've been with these folks a long time. And I think the one thing I want to encourage your heart on is that you haven't lost your value and you have developed over the 23 years with this company

and whatever work you did before, you've developed some very valuable experience and you certainly have developed some skills. And so what your exercise is right now is, is I think that there are some really clear clues in the fact that a long time ago, you were interested in psychology or counseling or therapy. And so I totally understand at this stage in your life, you don't want to go to the schooling that's necessary for that. But it doesn't mean that you are completely abandoning what's behind that. And you take the previous desire to maybe do some form of counseling or psychology type work,

and you combine it with the fact that you just said, you know, what I do all day is pretty much numbers, and I'm not customer facing, I'm not dealing with people. And you combine the fact that you mentioned real estate, which would allow you to have flexibility, of course, working from home. But this is the theme that is emerging in all of these things is people. You love working with people, and in the next season, the final work season of your life, you want to work with people. Is that true? Correct.

I do, and I also want to work with people. And what motivates me, too, to work at least 10 to even 15 more years. Great. I'm young. I can sit on my own. Of course you are. But I really want to put more towards my retirement as well because I don't have much left on my home. Good.

So here's what I want you to focus on, okay? And I'm going to give you my Get Clear Career Assessment at the end of our call, and I want you to take it. It's about a 20-minute assessment. It's going to allow you to see what you're most talented at doing. And none of this should be a big surprise, but it will confirm for you, this is where most of my talent is. And I think you're probably going to score high on people talents.

So that's what you do best. And then it's going to help you see the type of work that you love. And I think it's going to be very people focused type work. We call that passion. And the last piece is what motivates you when you do work. And we call that mission. What missional results? And for you, I bet you're going to score high on service and influence. Okay. So I'm going to give you that to take on your own time, but here's the exercise. Even when you get your purpose statement that this assessment will spit out for you. I want you to look at it as a high level job description and you're looking in on who are the people I most want to help. So if we look at real estate, I want to help new home buyers or people that are looking to level up in their home

purchase, their place of living and it has has memories, and it has safety, and it has all these things tied to it. If that's the problem you want to help people solve, great. But if there's another problem that you want to help people solve that pulls and tugs at your heart more than anything else, you've got to pay attention to that. And you go, okay, now, where in the workplace, in the marketplace of jobs, can I help the people I most want to help solve the problem that they have with the solution that I can get connected to and fired up? So I just want to encourage you on the process.

That's why I asked that question. What have you wondered about? Who are the people you most want to help? So I'm going to put you on the spot. If you don't have an answer, that's fine. We'll give you the assessment, and it's going to come clear. But I want you to just don't think for a moment. I want you just to react.

Are you willing to do that? I am, yes. All right, from the top of your heart, here's what I want to know. Forget about qualifications or money for the moment. Who are the people you would most like to spend the next 10 to 15 years of your working life helping? Who are the people? What pops in your mind right now? Well, while you were talking, and I've thought about this before, is over the experience that I've had and things that I've

learned and what I'm going through, I would really love to help people that are in my, or not just in my world, but not to be afraid of money and to know how to. To have financial peace, to have financial peace. That's what you want to help people with. So here's the deal. Take the Get Clear Career Assessment. Hang on line. We're going to give it to you.

And let's see if your purpose statement aligns with that. I think it's going to, absolutely. And then where in the marketplace do I work for a smart investor pro, since I'm familiar with Ramsey Solutions, and I am contributing to financial peace? That's just one idea. Maybe you're a financial coach. Take the test. Get really clear on who you want to help and why. And then we figure out, where can I do that? Hang on the line. Austin will pick up. We'll get you the Get Clear Assessment. Thank you so much for the call. This is The Ramsey Show. People all over the country are discovering a faith-based and budget-friendly way

of meeting health care costs through Christian Health Care Ministries. Christian Health Care Ministries, or CHM, is a nonprofit organization that helps members carry one another's burdens with health care expenses. And they have successfully shared each other's medical bills for nearly 40 years. See if CHM is right for you

by visiting chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman. Reminder for you folks, you can come by and visit us here at The Ramsey Solutions Headquarters. Me and Ken were just out there saying hi to the nice people and getting away from a young gentleman out there. Thank you, sir. We're just south of Nashville, Tennessee.

We've got free baked goods, coffee. It's a whole visitor center experience. There's like a timeline wall museum you can check out. You get a free mug on your way out. Bring the whole family, Ken. It's a good time. Yeah, and there's a whole visitor center experience. There's like a timeline wall museum you can check out. You get a free mug on your way out. Bring the whole family, Ken. It's a good time. Yeah, and there's a fun little doll. It's the Dancing George, and we give that away to kids under the age of 10.

So that's always good. Again, someone's going to show up asking for the George doll, and we're going to have to let them down and say that doesn't exist. Why are you so worried? No one wants to see a Dancing George doll. You assume that when I say that, people think that's serious. You'd be surprised. There's a niche audience that would request that. Okay. Folks, I'm kidding. Thank you.

Having fun today. There is no dancing George doll. Although, George, when you come out, we come out in the lobby and say hi to folks during breaks. George will dance for you upon request. I told him I'm a tiny dancer. Yeah, you are. There you go. Alright, open phones this hour. 888-825-5225.

Donnie joins us up next in Boston. Donnie, welcome to the show. How's it going? Hey, man, it's going good. Thanks for having me on. I appreciate you guys taking my call. Sure, happy to take it. What's going on?

So, you know, I just started listening to the show, I'd say, in like the last two months or so. Oh, cool. My parents' church back home in Georgia, they've gotten real big with the Financial Peace University. Yeah. So they've been doing a lot of that. I know my parents have done classes, but I never really paid any attention. And fast forward now, I've gotten a job after college. I was supposed to start law school.

It went virtual, so I kind of said, bump that. I have a travel job that I do, and I've been doing it for about a year now. And I'm in a situation where they pay for my housing and my transportation, and pretty much my cost of living is almost a zero. Wow. Other than a car payment. So what I'm trying to figure out is how can I take advantage of, you know, the current state of our economy and the downturn so that a year from now

and, you know, even five years from now when hopefully I'm, you know, starting a family and I'm married that I look back and appreciate, you know, what I did now. I love it. So how old are you? 25. 25. And what's your income?

It's like between 70 and 80. Wow. Love it. And that's on top of most of your expenses being covered. Yep. So they, you know, they pretty much just put me like in Airbnbs because the nature of the work is really... It's like a travel sales job? It's politics. You know, they pretty much just put me like in Airbnbs because the nature of the word is really.

It's like a travel sales job? It's politics, so don't hate me for it. Oh, no hate here. Well, wait a second. Now, Donnie, I used to be in politics. Are you working on campaigns or are you working for a PAC and you're just kind of moving around from place to place? So it's a mixture of both, essentially. Good. Yeah, I totally know what that is.

That's what I did when I was in my early 20s. Absolutely. So we don't hate you. How about that? Okay, cool. Yeah, you're fine. I started in BC where I was under the law school. Yeah.

Kind of said, I don't want to do that. Tapped into my network. I started in politics when I was a sophomore in high school. Good for you. And it just kind of tapped into my network. And honestly, it's been a huge blessing, the position that I'm in now. Good for you, man. That's fantastic.

So how much debt do you have? Zero. Well, you just said you had a car payment. Oh, yeah, yeah, okay. Well, then you're right. Hold on, Donnie. You're already lying to me. We just became friends.

He's new to the show. He didn't pay attention to the financial peace classes in his church. Give me a break. Riling me up. Yeah, see, that's why I'm calling. Donnie, I got your back. Is there any other debt that you want to let me know about, Donnie, while we're being honest? No, yeah, just my car payment.

It's $600 a month, and it comes out automatically, and I paid it ahead three months. So I try to stay three months ahead of that, just because you know the nature of this, you know, with politics and stuff. I just try to, you know, keep myself ahead of any cost that might be coming. So with traveling, are you taking the car with you, or are you flying and then getting a rental car to get around? So I take the car with me. I got a dog, so it makes it a lot easier for me to get around with her.

Okay. What's left on the loan for the car? $18,000. Okay. What's the car worth? $27,000. Oh, that's a good day. Well, here's the deal. You called not asking about any of this. You called asking about how you can be taking advantage of the market and saving and investing.

And your number one wealth building tool is your income. That's $70,000, $80,000. And right now, you're sending $600 of your take-home pay to a lender every single month. Correct. And so with our plan here's how we like to put it we want you to become debt-free with a fully funded emergency fund before we ever start investing so the question is how quickly can you get there do you have any money saved in the bank yeah so i mean i could almost turn my car off completely

i'd sell the car but i'm always very aggressive on that you know for a 25 year old who's traveling around the country i mean dog i mean come on man you could sell it sell it and i'd buy a ten thousand dollar car nine thousand you're gonna make nine nine grand if you sell it no i know and the truth is i bought it when i was in nova because i thought i'd be in the dc area and then it's just been such a whirlwind. Sell the car. Hey, sell the car. You're immediately debt-free.

You get a decent car. You're young. You're making really good money, and it's a transition car until you save up. Man, you can get ahead as a young guy. Are you planning to just keep moving from campaign to campaign for a while? No. What's your plan politically? So politically, the three-year plan is to go back to D.C. and either sooner than later get back into law school,

which that's not really where my heart's at. Don't go to law school. Don't go to law school. Whoa, whoa, whoa, whoa, whoa, whoa. Sorry, George. You riled Ken up about his career stuff. Well, that's why I'm pausing. I want to make sure we give him the financial advice and finish that,

and then I want to talk about this law degree. I'm going to save you a lot of money on the other side. So, Donnie, the car's not killing you. I mean, based on your income, it's okay if you want to aggressively pay it off, but you told me you're way more excited about saving and investing. And so that tells me you don't really care about having a $30,000 car right now. So let's sell it. Let's get something cheaper so that

we can begin investing. You said you had savings. I still want you to get three to six months of expenses, which right now you don't have much, which is great, but still get six months of expenses saved up and then begin investing 15% of your income into great retirement accounts, into mutual funds, things of that nature, not stocks and crypto.

Yeah. And Donna... I've stayed away from crypto. Good. All my friends got into the hype, and they tried to convince me. All your friends are broke now, aren't they? Oh, I don't want to say that. A few of them might be listening, but I'm happy I didn't do it. Good for you.

Good man. Now, Donnie, let's skip law school for a moment. What's the long-term play for you? Where do you want to be in 20 years? I mean, long-term play, i want to be president one day but i mean everybody says that no but donnie donnie donnie you're talking to the right guy i mean the one day you call into the show you get me because dave and and everybody else doesn't care dave would get this look on his face like he has indigestion and i actually get what you're talking

about and so here's you want to run here's you want to run for office sure the end of the road would be president but the deal is you want to serve your country as an elected official and i get that that was the path for me when i came out of high school and then it changed for me but here's the deal you don't need a law degree to become an elected official in fact that was the i will tell you that was the plan. That was kind of the way to do it 30 years ago. But the political landscape has changed. You know that. You don't need a law degree that you don't want, and that's another chance to go into debt.

I thought about being an entrepreneur. I'd have a lot of interest in opening a brewery. Atta boy. Here's what I think you ought to do. I think you ought to ask yourself, I know long-term that you want to run for office, but until that timing is right, what kind of work would you really enjoy doing? And if it's business, small business, entrepreneur, can I just tell you, that's going to set you up to be a much more attractive candidate than being a lawyer.

You're a guy who pays attention to polls. You know this. Go look at it. I'm not'm not knocking lawyers i got some good friends who are lawyers but go look at what the perception is of lawyers among the american people i'm telling you a small business person who creates jobs and who uh earns something by the skin of their teeth the sweat of their brow that whole sweat of their brow that's whole sweat of their brow. That's what attracts people. So don't go law school, please. You don't need it to run for office. I think I'm sold. I've been having that same thought process that, you know, being an entrepreneur is the job creator.

People tend to like you a lot more if you're, you know, selling them beer than they would, you know, if you're just some, you know, guy in a suit. That's right. That's how Sam Adams did it, right, Ken? Absolutely right. Yes! Started a brewery. George, with the Bostonian...

I'm kidding, guys. I'm from Boston. It was a joke. Well, yeah. But hey, Congressman Coleman's got a ring to it. Oh, stop it. It's got a ring. That's all I'm saying.

No, it doesn't. It sounds awful. It sounds terrible. You're in the right. I'm a man of the people, but I don't need to get anybody to vote for me to do that. Just come on over to the Ken Colbert. You've got my vote. It's the only one that counts.

Thank you, George. Hey, more coming up. This is The Ramsey Show. I'm George Camel. Next to me is Ken Coleman. This is The Ramsey Show. Open phones this hour, 888-825-5225. Logan joins us up next from Lexington, Kentucky. Logan, welcome to the show.

Hey, gentlemen. How's it going? Great. How are you? Great, man. Doing well. How can we help? Just a quick question.

Yeah, just a quick question. So I currently have a lease. It's a 2019 Camry. It's due in August is when I have to return it. The way that the market's going right now, obviously, I've been looking at Kelley Blue Book. I think trade-in is about $27, $29, and private is about $29 to $31. My wife and i just had our first uh child he's about a week and a half old at this point all right i appreciate it yeah man listen you are remarkably coherent given the fact that you have a one week old i'd be exhausted i wouldn't know how to tell i wouldn't have to speak at all make a phone call yeah very good good for you coffee yeah good man good man

so you're looking at your options what's your question following anything ramsey related at all but we paid off about 85 000 in student loans in a year way to go um yeah yeah it was tough but we did it and now we're debt free. Just seeing if it's worth it. Should I just turn the car back in, or should we buy it out and try to get a little bit of profit off of it? Yeah, it's going for about $20,000 right now is what I owe on it. Okay. And you can make $31,000? I think so.

That feels about right for a 2019 Camry. Yeah, it's pretty decked out, so it's pretty sweet. I hate to get rid of it, but it doesn't fit a car seat. How much money do you have? So that's the next question. So we have about $20,000 in just the bank, and then we have about $24,000 in a brokerage account, which used to be $35,000. So selling that would be tough since the market's so low,

and that's kind of why I'm trying to get some advice. So you would have $0 in the bank if you bought this car outright? Yeah, so my wife and I make pretty decent money. We have before tax for about $210,000 a year. And since it's due in August, I'm thinking we can probably save up quite a bit until then. But again, I don't... All right. So this is relevant, George. I'm interjecting here because between the two of us, I'm the one with kids. Fair. Sorry, George. That's all right. You can fit a car seat. You got one little dude.

You can fit a car seat comfortably in a Camry, dude. I'm not trying to bring some judgment on you. I'm just trying to introduce that fact of this conversation because it does figure into what you would do. This idea that once we have a kid, we got to have a minivan or we got to have an SUV. Total garbage. One kid fits beautifully in a Camry. All right. Now that I've interjected that, George. Sure. I mean, the car is very reasonable compared to your income. So if you're good with it, I'd buy it out and keep the car and try to have a few thousand dollars as kind of your starter

emergency fund when you do that. And then let's be about the business of saving up a fully funded emergency fund of three to six months. And then then we invest so if you're doing any investing right now just pause that until we're in a better spot financially gotcha do you like the car forget the car seat issue that i just jumped all over do you like the camry yeah no we definitely love the car um what's your wife's what korea so she has a prius yeah i get it is she wanting a uh certain vehicle we're thinking about maybe getting a rav4 or something a little bit bigger um that's what we're thinking but i gotta tell you the rav4 is not bigger it's up higher it may be of a different chassis george i'll explain what that means later i was not expecting chassis to be brought into the show i watch nascar all right

don't judge me okay do you understand what i'm saying logan like i just want you guys to make the right financial decision you know and not to be swayed by an emotion that a rav4 is somehow more equipped for a baby than a Camry. It's not. Got it. So I guess you guys would recommend just buying out the car or getting rid of it in general and just saving the $20,000 that we have on hand. Yeah.

I mean, you get to decide. But I mean, yeah. Worst case, you do the buyout and then you sell it and make $10,000. Yeah. And that gives you some money towards the next one. Gotcha. And the point is, if you could afford it, is the RAV4 more expensive than what you got now? A newer one?

It would be. Yeah, see, that's what I'm leaning towards. I'm not, just for all the RAV4 lovers out there, I have no problem with the RAV4, but it's like you got enough car for the season that you're in right now. RAV4 cancel culture is coming for you, Ken. Oh, I know. I'm going to get hammered online for that. Logan, you guys make a great income.

I would be about the business of stacking up as much cash as possible temporarily, getting out of this lease, and then we can make a wise decision from a place of peace. Then when you get three kids, like we had, then I had to get something that would fit three kids. But, man, I'd stick two kids back there. Back in the day, Ken, you know, it was a different time. We can throw goldfish at each other. Kids fit in any car back in the day. Don't even start. I grew up when you sat in the front seat.

Gosh, I miss the 50s. And you didn't have a seatbelt on it. If Dad had to hammer the brakes, he did one of these numbers. For our listening audience, it's a full extension of the left hand. Please don't slap me. Right into the chest. And if that didn't work, you went headfirst into some legitimate steel. The 1950s were a different time, Ken.

I know. I hate to take us back to nostalgia, but the point is the Camry's enough car, and it gets you ahead financially. Fair point. You don't need to spend money on a cute little RAV4. Next up, David joins us in Houston, Texas. David, welcome to the show. Hey, guys. Glad to be on the show.

Yeah, great to have you. What's going on? So I had a kind of particular situation where I got the opportunity to assume a loan on a house for $156,000 at an interest rate that's awesome, and now I'm deciding whether or not I should just move into the house and live in it or sell it off. So what do you mean you're assuming the loan? What's the situation? So a family member is moving away, doesn't want to put it on the market, doesn't want to deal with it anymore.

And so they were like, if you just want to take over the loan with the loan company you can and effectively what happens is all of the debt just transfers to me so she's got 26 years left on the loan at a 2.25 percent interest rate but you would be the owner of the property correct where do you live now uh well i live in San Antonio. I'm just renting now. So I'm deciding whether or not, and it's just down the road from me. It's not a much of a move. It's just a difference of owning versus currently I'm renting. Got it. And what's the mortgage payment compared to what you're paying in rent? So currently I'm paying 600 in rent. If I was to pay with mortgage and the interest rate,

it's a little bit more. It's about $650. So what's your income? So our household income is like $97,000. Okay. So what's the house worth? So I just had it appraised with the intent of removing PMI, and it appraised for $215,000. So my question is, should I just take the raw equity I have,

sell it back off to someone else, and move on with my life with $50,000 free, or should I move in? Wow. And you're sure there's not going to be any, I mean, wouldn't you have capital gains on that? I would have capital gains on that, but if I 1031 it, I can roll it into a newer house or something more. But that would have to be an investment property. Pardon me? Then, yes, they would have to pay capital gains on it.

But even so, I assume that I'd lose 25%, 30%, so walk away with $20,000, $30,000. All right. Okay, so he's laid it out beautifully, George. So now I think it comes down to where were you thinking about housing? Were you planning to rent for a while, or were you thinking, I want to buy at some point prior to this situation coming in out of the sky? Well, our rent is so cheap that I just plan on kind of running that for the next, you know, while I save up money and then eventually buy a house with cash.

Well, I think that that plays into it. I would just look into all the details. It feels a little fishy for them to just hand this over to you instead of them selling it and keeping the profit. Well, it's a situation where they bought it with their husband and there's some bad mojo, so they just want to wash their hands of it, essentially, which is why they're just like, hey, I don't know.

I don't think it's fishy. I think it's fabulous. I've already done the due diligence and spoke with a lawyer and whatnot. Okay. Yeah, I just want to make sure you've got your T's crossed, your I's dotted there. Talk to tax pros. Talk to real estate agents. Just make sure you're walking into this slowly with wisdom and not impulsively to try to

make a quick buck. That's what I want. This is The Ramsey Show. I'm George Camel, co-hosting today, Ken Coleman. This is The Ramsey Show. The number to call is 888-825-5225. We can help you with all of the crossroads you're dealing with in life, whether it's with your career, your money, your life. We are here for you, America.

Garrett joins us up next in Raleigh, North Carolina. Garrett, welcome to the show. Hey, gentlemen. Thank you guys for taking my call today. Absolutely. How can we help? So just have a really quick question. So right now, me and my wife, we both, I've graduated college. She's actually in her doctorate program at school, and we have about $75,000 in student loans between the both of us, and we're just trying to kind of figure out what we need to do here. Okay. So how many loans is this across?

So it comes out of the same company both of them do, and it's just like a lonesome kind of thing bound together. So there's like five inside of each one. So mine's $20,000. Hers right now is 52. Okay. So we recommend using the debt snowball method to pay off those debts, which is listing them all smallest to largest, and just ignore the interest rate on all of them because we want you to make progress really fast. So what's the smallest loan? So actually, let me ask this question very quickly. So like I said, she's still in school, so we're still technically accruing some debt.

What would it take to cash flow the rest of school? About $45,000 a year. Okay. What's your income? $86,000. Okay. Is that just you, or is she working as well while she's doing the doctorate program? It is just000. Okay. Is that just you, or is she working as well while she's doing the doctorate program?

It is just me. Okay. Cool. So $86,000, and it would take $45,000 to cash flow. Is that just one year she has left? Two. Two years, and it's $45,000 a year? Yes.

Yes. So she's going to go $90,000 more into debt to get this doctorate? Well, we already do pay $15,000 out of pocket each year. So $15,000 out of pocket. So it would be acquiring of $20,000. So it would be about $41,000. $41,000 on top of the $75,000. Yes.

Okay. Well, right now you're going to have a hard time making progress while we're digging the hole even deeper. I understand that. And so my goal would be to stop the bleeding here and try to cash flow as much as possible because she's not having to pay on her student loans while she's in school, right? Correct. Okay. So, I mean, once she's out of school, how much is she going to be making?

What kind of work will she be getting into? It'll be the medical field. We're probably going to be looking at somewhere between $80 120. Okay. On top of your 86? Yes. Okay. So then it becomes, well, making 200 grand, how quickly are we going to pay off 110? That would be one year. We were planning on one year when it comes to that. We're just kind of wanting to see what we probably should be doing right now. Right now, your best bet's to take out as little debt as possible, hopefully nothing. But it sounds like that's not an option for you, and she's not going to pause the program. Yeah, no, we're definitely not going to pause the program. We're already disinvested into it. Sunk cost fallacy. Okay,

well, what do you think, Ken? Because you talk to people a lot who are getting education and paying for it and trying to help them navigate the financial side. Well, I mean, look, I don't know that I can add a whole lot to this because she's committed to this, and it's happening. And so the reality is they don't have the financial wherewithal to actually cash flow this unless she presses pause. Is that fair, Garrett? Yes. Yeah. Are there any scholarships, grants available that she could be applying for

no this is a doctor program yeah so what what's happening here garrett is is that you know i i'm look i would press pause if it were me and i would cash flow it that's what i would do um because i at the end of the day you look at the unbelievable debt burden that you guys are going to walk away with. And she's going to come into this new path all excited about it. But the reality is we know what the emotional grind is like because you're calling today because you want to get out of it. And so you're assuming that. And this is not popular. And I'm not suggesting that you tell her that I said this.

But that's what I would do. I would press pause because the doctorate is still going to be there, and I would cash flow the rest of it and not take out the debt. That's me because I know what the work economy looks like, and I know that she can go do something, and you guys could double your income theoretically and get to a point where you can walk into that doctorate and finish it out with cash. Is that going to delay the destination? Absolutely it is. But that's something that I

would do because I think the trade-off is so much better. It's agonizing waiting, but it is so depressing getting out and wanting to be all excited about this work and feel like everything you're doing is going to pay it off. It's a different mindset. Both are hard, but one is so much more fulfilling, and it's so much more fulfilling when you don't have that debt. Does that make sense? It makes perfect sense. What other debt do you guys have, Garrett? None. That's it. It's only that. Okay. So remind me what the total would be if you don't do what I said and pause. What's the total debt burden coming out? Sounds like it's about $116,000. $116,000. Okay. Yeah, it'd be right around there. Yes. And also, I kind of wanted to bring

this up also. So we do have a good established emergency fund. I know we probably need to dwindle it down to about $1,000, but there's about $35,000 in that. Whoa. And there's an additional, yeah. Dude, this debt is the emergency. For my retirement. And you're investing too? Yes, my retirement's also an additional $35,000. So wait a second. Wait a second. Now we don't have to press pause for very long. What if? If you pay it off. We go down to $1,000.

You take $34,000. You cash flow the next year. You get about the business. You stop investing, which is going to free up cash flow from your income. And we be about the business of cash flowing the final amount. Could that get you guys, without adding any more debt, could that get her her doctorate? Yes. I think it would be good. That would be my plan. That's an option. It's the best option. Oh, sorry. You called us and asked for our opinion. It's worth what you

paid for it. So yeah, you would do that as opposed to pressing pause on the doctoral program and paying off the debt they've already accrued. If the option is we're not pausing it, I'm going, you've got $35,000 sitting. Now, I'm not touching retirement. Don't touch that. But I would pause retirement until you're completely debt-free. I think those are two really good options. I'll go with George's as the best option. Because here's the thing.

You're feeling pretty comfortable with $35,000 in the bank. But the truth is the house is on fire. We're walking out of this thing with six figures in debt. I'm going to tell you something, folks. You come out of school. I don't care what your fancy doctorate is. I don't care how fancy your freaking school is. And you come into the marketplace and you've been desiring to do this work. And you come home after the first two weeks, four weeks, six weeks, and you realize how much your debt repayment is, it is so stifling. Oh, absolutely.

So, Garrett, here's what I'm going to do for you. Austin's going to pick up. We're going to get you a code to use to watch Borrowed Future, the documentary. I want you to sit down with your wife, make it a date night, have a nice meal, and watch this 88-minute documentary that we released last fall. And I think it's going to get you closer to the option I recommended, which is let's stop the bleeding. Let's not go further into debt so we can be saddled when she gets this new job

and goes, wait, wait, wait, I'm making great money. Where's it all going? Oh, it's going to Navient and Maximus and Sally Mae and making them rich instead of helping us build wealth. And so I'm looking for your long-term future versus your short-term comfort. That's what this is all about. And I think if you do this plan, you liquidate most of that savings except for $1,000, and you feel that fire under your belly going, this doesn't feel safe.

It shouldn't. I want you to get rid of this debt so that you guys can live the lives you are meant to live. I like that you used the word saddled. Saddled. I don't think it's used enough. Well, I got to tell you. Imagine what a horse feels like. And I'm not Mr. Animal Rights Activist, but honestly, you know, they just want to eat. They want to graze. And you slap a saddle on them and then you throw your body into that saddle and you're carrying a person around like,

oh, here we go. So in this situation, you're the horse and Navient and Sally Mae are the saddle on your back. They're on your back. You're dragging them to work with you every day and on the way back home. I think it's a really good, I like that you use saddle because I started thinking about it. I always feel for the trail horse. You know these guys. They've been in it a long time.

What don't you know about, Ken? You know a lot about sports, horses, politics. We're in dangerous territory here talking about horses. Yeah, you know, Ken, I got canceled by horse culture because i told a caller to sell a horse because she was very broke and i wish i'd have been on with you that day because they said here's what they said it's like selling a child i went no that's called trafficking that's illegal people sell horses all the time yeah they do so don't come at me with that logic yeah i mean these people make big money breeding these horses and selling all kinds of things around horses. That's right. I'm not a bad person. George, you're a good and decent man.

Thank you. I'm going to tell you that right now. Take that all the way to the bank, America. Yeah. That puts this hour of the Ramsey Show in the books. I'm George Camel. That's Ken Coleman. Appreciate all the folks in the booth keeping the show afloat.

And you, America, we appreciate you listening in. Hey, folks. Ken Coleman here. Did you know The Ramsey Show is one of the most popular podcasts in the world? Get your daily dose of advice on life and money. Check out all of our shows from The Ramsey Network wherever you listen to podcasts.