The Ramsey Show - App - What's the ROI of a College Degree? (Hour 1)

Episode Date: January 10, 2023

George Kamel & Kristina Ellis answer your questions and discuss: "I'm late saving for my kids' college - what can I do now?" How to Pay for College Without Student Loans "My house burned down and friends raised $100k for me - how should I use it?" The ROI on college degrees (and why you shouldn't consider a student loan an "investment"), Cash-flowing a master's degree, Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell. Joined this hour by my good friend Christina Ellis, and we are taking your calls at 888-825-5225. You jump in, we'll talk about your life, your money. Maybe you need a second opinion. You need some motivation, some inspiration. You're at a crossroads. We are here for you. We want to help you take the right next step with your money. Larry kicks us off

this hour in Houston, Texas. Larry, welcome to The Ramsey Show. How you doing? Doing well. How y'all doing? Doing great. How can we help? Well, thanks for taking my call to start it off, but I wanted to ask a question. My wife and I are trying to get tired of being in debt and trying to get back on track. And I've got a daughter that's a sophomore in high school right now. And her goal is to go to college, and I haven't done any saving. We had our own business for 15 years, and, uh, we had to shut it down. And so the thing, what happened was, is, uh, all the savings that we had and all that stuff I tried to, I put back into the company to try to keep it going. And so anyhow, my main thing is,

is I just need some, some encouragement or some guidance. I'm sorry to hear about your business, Larry. That's a tough thing, and so many business owners felt that same pain during the pandemic. How are you guys doing now financially? Man, I believe that I make good money. My wife got a part-time job now. The thing is, it just seems like we don't know where to win, you know? What's your household income?

Household is $130,000. And how much debt? A year. $35,000. What kind of debt is that? My wife's Jeep, we owe $15,000 on her Jeep and some credit cards. We owe $9,000 on some credit cards, and we have a camper that we owe about $9,000 on. Okay.

And what's the conversation been like with your daughter regarding college? She wants to go to college. She wants to be a vet, and that weighs heavy on my heart because I don't want to have to tell her that I don't want to just take a deep breath. And there are so many different strategies. Just because you don't have the money to pay for it out of pocket right now does not mean that she can't go to vet school. So what have the conversations looked about money with her? So have you had this conversation about finances and the cost of college? Well, yes, ma'am. And the thing is, is they're big into ag and things like that. So they do show animals. And when they make sale and they're animals, when we're fortunate to make sale, we do put money back for them for their college, things like that.

But I'd like to try to find out about some – I listen to y'all quite a bit and some scholarships. There's one personality with y'all that went to college on nothing but scholarships. You're talking to her, buddy. That's me. There you go. There she is. How perfect is this?

And I was telling her the other day, I was like, there's a lady that, you know, got a half a million dollars in scholarships. But where do we start? How do we do that school, she can come out with a two-year college. So a long-star college is actually with our school also. And she is in college classes plus high school classes. That's awesome. She sounds really bright. So from what I can gather, she's motivated to pursue this herself.

She's motivated to figure out how to pay for it. Is that a correct assessment? Yes and no. I mean, she wants to do her, but she's kind of like I am, I guess. She's not for sure. I really don't know. The thing is, she wants to go to college. Her and her cousin have this big goal that they're both going to be vets

and have their own practice. And I don't want to beat that down. I mean, she's really good. She's good with animals. And she's been wanting to do that for a long time. Well, the very first thing I'm going to say you should do is sit down and watch Borrowed Future, our documentary, do that together.

Make it a movie night. And that can really start some conversations because one of the biggest things in talking to a high school student, a lot of times they just don't realize what they're up against. They've never had to pay for a mortgage. They don't know how it is to pay monthly bills. So having those conversations early about, you know, this is what student loan debt is. When you turn 18, when you go to college, there's going to be all these people who are offering you student loans, but there's another way. And that documentary, it really lays it out because I found a lot of

parents, you know, it's hard to have that conversation. A lot of times students are resistant to it. They're like, I don't want to hear it. All my friends are taking out student loans. And I just want to take out a student loan and YOLO and figure it out later. But this documentary, it lays out the consequences of student loans. We talk to doctors. And we talk to people who took out debt.

And now, you know, they're 10 years from their degree. And they're in tears because they're still overwhelmed. So having that picture painted as to the why, why to avoid debt, I think that's the very first step. And that can hopefully trigger some motivations to start pursuing scholarships, to start doing the research. And I love that you're so motivated as a parent because part of my story was my mom got in the ring with me. She didn't have the money to pay for college. She was like, that's disappointing. That's frustrating. But what I can do is I can get in the ring with you and help you figure out scholarships. We're going to go to the library together. We're going

to set aside time and carve out small goals for making this happen. So, you know, be willing to do the research, you know, help her walk through, you know, if you apply to so many scholarships a week, this is how much it's going to be over six months. Help her create that vision for why this is motivating and then get tactical. A lot of times parents, you know, you can sit down with your students and think through, you know, what are the best scholarships for my student to apply for? That's usually one of the things that like is just overwhelming for students actually finding these scholarships. There are millions of scholarships out there given away every year, billions of dollars, but you have to narrow them down and figure out which ones fit you best. So really sitting down and helping create that list

so that you can start applying for scholarships, that's going to be key. And there's a really great database called Scholarship Owl that we work with, and we just love them. They do a great job of kind of filtering out some of the scam scholarships, some of the junk scholarships to get you a really targeted list. Okay. Yeah. And that's one thing is she hasn't talked about getting any loans or anything like that. I think she wants to, I'm pretty sure she wants to go debt-free. Both the kids are way better than I was with money whenever I was that age. That means you raised them right, Larry. Yeah, exactly. So one more question on that too is my wife and I want to get out of debt. We're starting it now. Three months ago,

I sold my 17 Tundra. I had to, you know, I was $4,000 upside down. I went to my bank. They gave me the loan for $4,000 after I sold it. The thing is, I might not communicate all the time, so I've got my wife on board with getting out of debt. Okay. But how do I get her to where she's wanting to do the same page that I'm on? Oh, I got the perfect thing for you, Larry. Hang on the line. We're going to send you Financial Peace University.

Go through all nine lessons with her. Get on a budget using every dollar that's a part of it, and get rid of this debt, and soon you'll be able to actually help your daughter cash flow college. You can do this, man. You're $35K in debt. You make $130K. Sell the camper.

Do whatever you have to do to set yourself free financially, and you'll be on the path. Thanks for the camper. Do whatever you have to do to set yourself free financially, and you'll be on the path. Thanks for the call. Welcome back to The Ramsey Show. I'm George Camel. Joined this hour by Christina Ellis. 888-825-5225 is the number to call. You jump in. We'll talk about your life and your money. Well, here we are in 2023. Most of you are glad to be done with 2022 because it was a tough year. It was hard enough just to keep gas in the car, food in the fridge, and money is still tight. And you might be wondering, is this year going to be any different? Are we going to make any progress? Are we going to be just as stressed as we were last year? Well, good news for you. You don't have to live

through another year of stress and worry, regardless of what happens in the economy. So watch our free live stream, Building Wealth in 2023, happening this Thursday night, because we want to show you that it's still possible to make progress on your goals, build wealth, and have peace with money, even in this crazy economy. During the event, you're going to hear from Dave Ramsey, Rachel Cruz, myself, Dr. John Deloney, and Ken Coleman. We're going to show you how to set goals, how to create margins so that you have the ability to build wealth this year, whatever your goals may be. And we're going to have some fun as well. There's some fun surprises that I can't leak out just yet. We'll get there. And here's the good news. Even if the economy feels out of control, you don't have to be. So please register for the

free live stream at rseysolutions.com slash wealth. Tell your friends. Again, it's completely free. You can tune in from wherever you are around the world and ramseysolutions.com slash wealth is the place to sign up. We'll get you all the information you need. All right, let's go to the phones. Jojo joins us up next in New York City. Jojo, welcome to the show. Hi, thank you. How are you doing? Better than I deserve, as Dave would say. Love it.

How can we help today? So three weeks ago today, basically to the hour, I came home from work to find that my cottage burnt down. Oh, my goodness. Yeah, I lost everything, including the cat. The cat? Yeah, Abigail. Oh. Yeah, Abigail. Oh.

Yeah, it's been a ride. It's been an absolute ride. And I rented, and I had no renter's insurance. But I have a community to get to the point of love that is just ridiculous. And God is using this for good. He's putting me on a track that I needed to be on, and I'm just so grateful for it on every level. But GoFundMe was set up.

It's about $97,000 right now. I'm George Bailey right now. Wow. Talk about a community. Wow. Oh my goodness. It's a lot of love. Full of love.

And then this Thursday, sadly I'm going to miss that live stream. I wanted to watch it. But they're having a go fund, not a go fund, they're having a fundraiser music. It's a big music community, and they put together five of my favorite bands, and there's going to be more money coming in from that, maybe a few more thousand.

That's incredible. I'm going to break a thousand easily. Wow. Well, there's some silver lining there for sure. Oh, no doubt. So how can we help today? So that being said, I started the Dave Ramsey course again. Failed at it years ago, but now it's like taking control and it feels great.

Let's go. I make good money. I don't have much debt. I got some back taxes that I need to talk to the accountant about. I got a truck that's 2016 Tundra, about 16,000 I owe on it. Where do I go with this money? Do I pay the truck off? Eventually I want to buy a house.

I still need to live, but I don't want to take anything from this to live. I want to find, you know, hopefully God just put something in place that I can afford because what I had was an incredible deal. The rent I had was amazing. It's unheard of here in the Hamptons.

And I need to find something like that again. I just want to rebuild day by day with the Ramsey thing and with my normal work. So I got all this money that I have to allocate to a future for myself. Well, welcome back. Welcome back on board. We're proud of you. That's wonderful. So is that $16,000? Is that all of your debt? Is the car everything? Besides the back taxes, which I'm not sure, there may be $9,000 to $13,000 in back taxes that I've

been holding off since 2013. I don't give them anything, but they are going to come after me. And then there's another thousand dollars in unsecure like PayPal credit card, which I make payments every month on. Okay. And with this money that you're getting from the fundraisers and from the GoFundMe, how much with the rental and with the fire loss, what was the total loss on that? I'm sorry, say that one more time. So with what you lost in the fire, what is your total loss? What is the amount? The amount of like as far as property?

Money, property, everything. Like how much money are you trying to raise? What is the goal with that? Well, I don't know if I'm trying to raise anything for the stuff I lost. That's all. You know, I had a vinyl vintage collection that was worth thousands and concert posters that are worth thousands of dollars. And I'm not trying to replace any of that stuff. Um, I mean, I will, but not with this money that I got from them.

Eventually I'll just build up. So where are you living right now? All right. So, uh, a friend has a place that he rents out in the summer. So I got three months of being here. However, my rent, if that's what you're asking, it was $1,000 a month and $500 worth of labor because I was a caretaker of the property on top of my regular job, and it's unheard of. So you won't find that again? I would love to. Before that, I was paying $1,300 to rent a room where I didn't feel comfortable in a person's kitchen or living room, you know what I mean? What's your income? My income is about about annually with my side

gigs, about 120,000 I bring in. Okay, great. So the good news is- And I have child support. Okay. How much is that? 1,600 a month. Okay. Yeah. So we can clean up this debt real quick and you can keep the truck. I want you to set aside the money for taxes and start paying that regularly. You might want to do quarterly estimated with your accountant to avoid the IRS coming after you with fees and penalties. I mean, you cannot get them off your back. So something you want to pay attention to, obviously, going forward. And I would want to sit down with a tax pro because like you said, they're going to come for you at some point, but you're not really sure exactly how much you owe, what the situation is.

So I would want to sit down with a professional and kind of walk through that. Walk through if there's any extra fees, any extra things that you're going to have to pay. Because especially with the IRS, you want total clarity. And with this money coming in, you want to wipe them out of your life. That is not somebody you want to be in debt to. Do you already have money in the bank, aside from the 97? Yeah, I have about 4,000 saved on my own. Okay, so we're talking, we got 100 grand, what would we do to start fresh on the Ramsey plan? Yes. Well, looks like about 30 of that, let's say, is going to go towards debt.

Now we've got 70, right? Now we need a fully funded emergency fund of three to six months of expenses. So let's call that for round numbers, 20,000. Okay. That now leaves you with 50,000. And it puts us at baby step four, where we begin investing 15% of our income into retirement. So then we can start to walk that out and go, all right, what are my retirement options? Do you have a 401k through an employer? I do. There's about 50,000 in there right now. Okay.

Is there a Roth option with that or is it traditional? I believe it's traditional. Now, I did borrow from it. Uh-oh. I borrowed against myself, though. So I borrowed. So I'm not sure how that works, but I owe $22,000. I pay $108 a month.

Not a month, $108 a week into that. And it's a 5% interest that comes back to me. That's how it's written. So how dumb does JoJo have to be to borrow money from himself with interest? That doesn't sound like a gift. You know, it just keeps the money out of there, making money for at least five years. That JoJo guy sounds like a gift. You know, it just, it keeps the money out of there making money for- That JoJo guy sounds like a real jerk charging you interest. So this is not a gift. I'm paying off the 401k loan as part of the debt snowball.

And so how much is the 401k loan total? Looks like it's almost done. You're almost there? Oh wait, say that again? How much is the 401k loan? What's left on it to pay back? Oh, $22,000. Oh. Okay. Well, this money all of a sudden has some jobs to do, doesn't it?

You're not going to have a whole lot left over to have fun with, but you know what you will have? Your income back in your life because you're not making all these payments left and right on top of the child support. Right. Right now, you've been out earning the stupidity in a sense, because you're making good money, but there's not much left at the end of the month, is there? No. And so I want to free up all of that income so that you can use it to build wealth, to do the things that you want to do, to afford rent in the Hamptons, which is going to be absurdly expensive unless you can find a situation like you had before. And so I'm listing out all of the debts, everything from smallest to largest,

and paying it off with that gift money you have. The rest is going to go towards three to six months of expenses, begin investing 15%. Whatever's left over, you can park in a high-yield savings account and use that as a future down payment to be a homeowner one day. That would be my goal for you, JoJo. So sorry for what you went through. That's tough. And JoJo, again, just to reiterate the tax probe, that money coming in from fundraising, make sure to talk to a tax professional because there may be gift tax that applies to that and you don't want to once again be in trouble with the IRS. Look into do your due diligence with

the GoFundMe stuff, man. Wishing you the best after that awful, awful situation. This is The Ramsey Show. Are you sick of planned obsolescence? You know, when companies make products crappy so you have to buy more of their crappy products. Well, me too. And it's why I love companies like Grip6. Grip6 is all about quality products meant to last forever. That's why their comfortable, bulk-free belts, slimline wallets, and lightweight wool socks all come with a lifetime warranty and simple returns and exchanges. So check them out at Grip6.com today and get up to 20% off with the promo code RAMSEY. Welcome back to The Ramsey Show. I'm George Campbell, joined by Christina Ellis this hour. The number to call is 888-825-5225. Let's get to our question of the day. It comes from Corey in Oregon. What does Corey have to say, Christina? You often say the best thing you can do is invest in yourself.

So how is taking out a student loan that will allow me to drastically increase my income, pay off debt, and build wealth faster such a bad idea if I'm going to get such a good return on my investment? Whoa. I like the snark in Corey, but Corey's got to get off his assumptions. There is a lot going on here. So number one, he's saying you often say the best thing you can do is invest in yourself. Generally, when we say that we are talking about people who are 18, 19, 20 saying, hey,

I've got all this money. What do I do with it? Should I invest it into the stock market? And we don't know what their future in education is. Do they need that money to pay for that? And so that's why we say, hey, the best thing you can do is invest in yourself instead of the stock market right now. There's that. But this idea of the student loan is an investment. It's going to dramatically increase my income and help me do all of these things. Why is it such a bad idea? The ROI is there, Christina,

isn't it? Oh, obviously. It always works out how we plan. And the thing is, is that it doesn't always work out. There are actually studies that show that most students don't graduate in four years. A lot of students take either six years or they don't graduate at all. Actually, 40% of students take six years or don't graduate at all, which is a scary statistic. We talk to people all the time who have student loans that didn't even get the degree. That's scary. That's the scariest part is if you don't finish, you still owe that money. Right. And if you put strategy into it, you can go to college debt free. So the idea that you need to take on loans to go to school, that's just not true. And we also see

people all the time who are drowning in student loan debt. So while yes, a lot of people take out student loans, a lot of people feel the pain and ramifications from it. And it's just not worth it. We say take loans completely off the table. Yes, invest in yourself. Absolutely. You need an education to some extent. And that may look like an apprenticeship. That may look like an internship. That may just look like job experience. But we want you to get educated, but just do it without debt. Yes, invest in yourself, but do it debt-free. We cover a lot of this in the Borrowed Future documentary, but it comes down to this philosophical issue of is the college degree still worth what it was? And we're seeing over time it's just worth less.

For our parents' generation, it was a safe bet to get the degree because you knew you were going to get a better job because of it. And that's just not true today. I mean, I grew up in the Northeast and half of my friends are still working on their fourth master's degrees and they've never had a job. And I'm going, what are you guys doing? Because the companies that are going to hire are going to go, do you have the experience? And yes, they want you to know how to do the job. And part of that is education. But these days there's so many ways to get it. It's more of a checking a box than it is, hey, Christina, what school did you go to? And unless you went to some Ivy League school, most companies don't give a rip. Right. Well, and it's not a knock on education. I still think the value of a college degree is there. But there are so many other factors playing into it. Before, it seemed like it was a guarantee.

You know, you had to have a college degree to be successful. And we are seeing all the time now that that's just not true. And it's time that the higher education industry got checked because for so long, they just ran around like they didn't have any accountability. They could just raise tuition to whatever they wanted. People would just take out loans to pay for it. And I feel like we're finally getting their attention and saying, hey, you can't just charge whatever you want and put 18 year olds in thousands of dollars of debt without us questioning. Well, that's part, that's their entire marketing strategy is if you go to our school, wow, your kid's going to have such a bright future. The ROI is always going to be there. And so it's part of the narrative that your life is just going to be better if you go to our

school. And what we're finding is there's a lot of time in between classes that turns out and not everyone finishes and not all degrees are equal. And so if you got your degree over here, it may not be equal to the one over here. And so you've got to think about what is my goal with this education? What job am I after? What career am I after? Does that career actually require a four-year degree? If so, great. Then do that and do it without debt and do it the most affordable way possible. Right. And one of the things to look at, if we're going to talk about return on investment, look at college ROI. So there's starting to be a lot of ratings and people evaluating colleges based on their return on investment. And that is a really good thing. We want to make sure that that degree pays off. We're not just trying to get a degree for a

checkmark just to say that we had it. We want it to have purpose. We want it to help us make more money and to be more successful in our career. So a few things to look at when you're evaluating ROI on a college. You want to look at the net price. So a lot of times people will look at a college and they just get overwhelmed by the sticker price. They're like, oh my gosh, I could never afford that school. But there's this thing called a net price calculator where you can actually go on a school's website. You can type in your information. You can type in your GPA, your test scores, your financial situation, and they have to tell you how much about an estimate of what you will actually pay to go to that school. So they'll tell you potential grants and scholarships, and you can get a better idea of what the college cost will actually be.

Another really important thing to look at is the four-year completion rate. So if you're thinking about going to a school that's four years, you know, you're looking off into the horizon, and you're thinking, you know, this school costs $20,000. Okay, I think I can afford that. But can you afford it if it takes you five years? can you afford it if it takes you five years? Can you afford it if it takes you six years? That's a whole different equation. That's $20,000 to $40,000 more, which a lot of schools are way more than that. So this can be a huge, huge difference. So, you know, look on average, do most students finish that school in four years? And a lot of times that data is out there. And the statistics are scary. They say there was a study that was done that said only 40% of students finish school in

four years. Yikes. That's crazy. And then 20% take between four and six years and 40% don't graduate at all. And, you know, sometimes this is because of a student, you know, not having ambition. They're slacking off. They're going to parties. But a lot of times it's because the school's not great at scheduling. Maybe some of the classes that are requirements aren't

actually available. They're difficult to get into, or they don't have great advisors that help students walk through exactly what they need to graduate in four years. You know, so look at those, look at those statistics, see if you're likely to actually finish that degree in four years. And then another big thing that you think would be really obvious is earning potential. Oh, that's such a fun word, earning potential. Right? I'm going to make so much more money because I went to this school. And how do we figure that piece out?

Well, look at the stats. Look at the stats on the different majors within the school, how much are their graduates typically earning? That's important. Then also look at your specific major. I mean, this is kind of hard to choke down, but we've talked to a lot of teachers who went and got $200,000 educations

to make $38,000 a year. That's tough. I mean, we love teachers. And by all means, we need teachers. We need teachers to get educated. But unless you have a lot of scholarships, unless you're getting grants to go to a specific school that's cost $200,000 a year, you're probably not going to get a great return on investment. Like we've talked to teachers that

have over $100,000 in student loans, and it's, you know, two, three times their salary. You got to think about those things in advance. You don't want to put yourself in that situation where even best case scenario, you're not likely to ROI. Yeah, that's scary. And I hate that we have to keep saying this, but you've got to do the math. And most people are just following their heart's deepest passions because that's what we taught our kids was just follow your dreams and go to college at all costs. And that's that's the path to success in the American dream. And they got out of school and they've got a pile of payments. They can't afford rent.

They can't breathe. They can't even do the jobs they wanted to do because they got to get that paycheck and pay the bills. Right. And it's like, it's important when looking at a major, even if it looks really cool, even if it's something fun to study, even if you're interested in it, like you still need to have a career path after that. There still has to be some way to make money from that. I mean, you can read books, you can do things for pleasure, you know, go to a library and read books for fun. But when we're talking about something you are paying for, that you are hoping to get a return on, like you need to be clear about the numbers up front. Is this degree, is this major going to pay off? Well, and we've got to talk about the alternative

careers out there like the trades. They're so overlooked, undervalued. They're poo-pooed by the parents out there. And yet we get calls on the Ramsey Show and they're going, oh yeah, I've got no debt and I make $85,000 a year as a plumber. And I'm going, that guy is winning. Old junior over here with his fancy four-year, six-year degree who's making 40. Let's do the math on that one, parents. Well, and one more thing is opportunity cost. Like if you want to go into a trade, you may not need a four-year degree. And if you didn't do the four-year degree, how much money could you have been making in that time that you were in school? Well, this all starts with a conversation with your kids. Don't leave it up to chance. Don't leave it to the guidance counselors. This is on you, parents. Start the conversation early and

often, even if you can't afford it. We've got to get a game plan for these generations to graduate debt-free with actual jobs on the other side. This is The Ramsey Show. I'm George Campbell, joined this hour by Ramsey personality, Christina Ellis, and we are taking your calls at 888-825-5225. Hey, I know we get a lot of new listeners to the show, and if you are new to the show, you want to learn more about these baby steps we're always talking about, you want to know how to get started on the Ramsey way, you can go to ramseysolutions.com and click on the Get Started button. If you're on your desktop computer, you'll see that in the top right. If you're on mobile, just hit the menu and you'll see it right there at the bottom. It'll say

Get Started. Our team has created this tool to help you figure out the best next step based on your specific situation. So you answer a few quick questions, and we're going to guide you to the best resources, the best tools to get you started on the path. That's ramseysolutions.com and click get started. Let's go to Andrew over in Phoenix, Arizona. Andrew, welcome to the show. Thank you. It's great to be here. I've listened to your show for a few years, and it's cool to be the caller. It's like you're inside of the Matrix, man. Welcome. It's a good time. We're happy to have you. How can we help today? Thank you.

So my question, first of all, is just what the next best financial step would be to take. I'm recently married. We just got married a few months ago. Congrats. And our household income is around $70,000. I'm planning on starting a master's degree in August, but we'll have to move states for that. And we're planning on cash flowing that whole thing. We don't want to take any debt for that. And so basically, should we kind of try and start maybe step four

or maybe start on what I've heard you call a 3B, saving for a down payment for a home, or just focus on maybe renting for a while? So you guys have no debt, and you have the fully funded emergency fund currently? Yeah, we have about $50,000 in savings and then $10,000 in an index fund currently. Great. And will that cover the master's degree without touching the emergency fund?

Or do you need to continue saving for that? Yeah, it will. And that'll cost around $25,000 just for the tuition. And then we'll probably save up around $40,000 more before we have to move. So $25,000 total for the whole master's degree. Is that correct? Yeah. What's the program? It's a public administration.

Cool. And is that something that you just want to seek out to get a different job or a different career? What's driving that? I graduated in biochemistry, and I want to be more in, like, healthcare administration, something more business-related, so that program just would allow me to gain some of those skills in accounting and other leadership skills. And where do you have to move? It's up to Salt Lake. Wow. And your wife is cool with this? Yeah, she's cool with it.

She's actually here with me. She just bought me a whole bunch of the books for Christmas and stuff. What a lady. That's awesome. And is that going to affect her job? Yeah, so she actually just works from home right now, just part-time. So she can kind of do it anywhere. Okay.

And what about you? The $70K, will you continue making making 70k while you're in school? No so I actually can't work the first semester it's a commitment we have to make to enter the program but then the next three semesters I can but I'm not sure I'll be making. Okay and that's something to think about for sure if you guys have a giant dip in income because how much is she making working from home part-time she's making around 25 right now out of the 70 yeah okay and have you all figured out your budget with the new city because salt lake is that going to be a pretty expensive yeah yeah it's a lot we we've kind of estimated that right now we're only spending about 30% of what we're earning. It's pretty cheap down here. We're probably spending closer to 60% that first semester that I'm not able to work.

Here's a question, Andrew. Could you find a program that is either local or online that would check off the same box? They have some online programs. The tuition is a lot higher, and this program is kind of something that I've been wanting to do for a while. I'm sure there would be more local programs, but maybe in like U of A or something like that.

I'm just wondering if there's one that you could do online, you could start now and keep your income, and so you could keep your household income at 70, keep your living expenses low. You could do all of this without having to move as newlyweds. Well, also, Andrew, is part of this that you want to move? Like is Salt Lake somewhere where you want to go? Is that part of this equation? Yeah, it is somewhere we want to go and kind of get a new experience for the next couple years before we start a family.

Okay, so it's, yeah, partial for fun. It's an adventure, a newlywed adventure. Well, I would just do my due diligence and figure out what it's going to cost to live out there. What does life look like if we go down to $25,000? How are we going to afford life out there so that this is an exciting move that's moving you forward instead of looking back with regret going, oh my gosh, what have we done? Yeah. And George, correct me if I'm wrong, but if I'm in your shoes, I'm just saving cash right now. I'm not worried about investing it right now. I'm not worried about putting it somewhere. I'm just saving it, one, to make sure that I can graduate debt free. There's a lot of factors

that can play into things. A lot of unexpected expenses can pop up. So I would just want to make sure I have plenty of money for that. And then also, you know, that first semester in Salt Lake, it may be a lot more expensive than you factor in. And, you know, you've got the 50 and the 10 and the emergency funds in there and the 25K in tuition. But with all those factors, you're still kind of close on it. So I would be saving as much as I can right now just to make sure that we're good. And that dream of homeowner intuition. But with all those factors, you're still kind of close on it. So I would be saving as much as I can right now just to make sure that we're good. And that dream of home ownership will come. But I would want you out of the master's program, figure out where you guys are going to live long term. Then we can start looking at homes and the bigger pile of money you have,

the sooner you can make that happen. And the good news is that high yield savings accounts, they're making great interest rates right now. Like I almost said 4%. Yeah, we looked into that as well, maybe some kind of CD or something for the next few years because the money we make in the next six months will pay for all of school. So we'll have that just kind of sitting around if we're going to be renting. And one thing to think about, Andrew, with that index fund,

if you're going to need that money soon, I would move that to a high-yield savings account, even over a CD, because that will keep it liquid. We call them certificates of depression. And right now, that high-yield savings account will get you about as good of a rate, if not higher, than any CD out there. So good things to think about. Do some more homework, but it sounds like you're making the right moves and doing it without any debt. We love that. Let's move on to Joseph in Cadillac, Michigan. Joseph, welcome to the show. Thank you so much, George and Christina, and thank you very much for taking my call. Sure. What's going on? So just a little bit of a backstory here. December 30th of last year, I paid my truck off, and I am now officially debt-free.

I've been over $45,000 officially debt-free. Woo-hoo. Awesome. I've been over $45,000 in about five months. Way to go. Thank you very much. My question today is, I live in a double-wide on 20 acres with a barn, and within the next two to three years, I plan on moving, and I only owe $54,000 on my mortgage. And my question is, did I treat this as baby step two and just get this paid off? That way, when I go to sell the house, I can just use the profit from the sale towards the next home? Or should I just continue on to baby step three? So right now you have the debt paid off, but you have no emergency fund.

Correct. I just started actually, my last paycheck, I just started my emergency fund. Okay, cool. I would continue on with that emergency fund because in the midst of you trying to pay off this mortgage, life's going to happen. And the mortgage is very different from the consumer debt. And so I would just continue on with the baby steps, put that in baby step six. So begin investing after you've got the emergency fund, any money left over beyond that. Let's start attacking that mortgage. And you can still do all that. What's your income?

It ranges anywhere from like 85 to 120, depending on overtime. Love it. I mean, if you paid off 45K in five months, once you've got the emergency fund, you're investing 15%, you could probably still pay off your mortgage within what, eight months? Yeah, probably. If I guess that goes out in terms of it, I probably could. I love it. I would just set that for a goal for the year. Say, hey, how cool would it be if by the end of 2023, I've got obviously no consumer debt already. I've got a fully funded emergency fund. I'm investing 15% toward my future and I don't have a mortgage payment.

Perfect. Awesome. That sounds great. Thanks so much for answering my question, man. Absolutely, Joseph. I got excited just thinking about it, Christina. I'm pumped for Joseph. That's pretty exciting. And even if he went half that pace, he could still have this paid off. That's true. He three or four years. He seems like a driven guy. He paid off 45K in five months. I'm like, he's not fooling around. Impressive.

I love it. That puts this hour of The Ramsey Show in the books. My thanks to my co-host, Christina Ellis, all the folks in the booth, Austin, Ben, James, Zach, and Andrew, and you, America. Thanks for tuning in. We'll be back real soon. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral? Check out your favorite

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