The Ramsey Show - App - Why You Shouldn't Use Student Loans to Pay Credit Cards (Hour 2)

Episode Date: April 15, 2019

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Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. This is a free call. 888-825-5225. That's 888-825-5225. Anthony O'Neill, Ramsey personality, joins us at the bottom of the hour. Author of the book, The Graduate Survival Guide, Five Mistakes You Can't Afford to Make in College.

Make sure you join us there. And if you want to talk about teens and you want to talk about college and you want to talk about millennials and you've got any financial questions, Anthony will be with us in the second half, and make sure you're tuned in for that and you're on the phone lines as well. Our question of the day comes from blinds.com they have a 100 satisfaction guarantee means even if you mismeasure you pick the wrong color you goof up they will remake your blinds free free samples free shipping the new promos are every month

use the best code out there ramsey and you'll get the best deal sophia is in utah dave my husband and i are trying to follow your plan. My one-year-old son received money for his birthday. My husband thinks we should use it to pay down our debt. We have $1,000 saved, and there's one bill, $200, we're struggling with. I don't think we should use our son's birthday money, but my husband does. I don't think you should use your son's birthday money either, unless it is the only way that your family has food on the table.

If your son got $15,000 as birthday money, we could talk about it, but it sounds like he got $100 or $20 or something, and your husband's wanting to take your little kid's money. That's just weird. Who takes your kid's money? That's strange. No. Hope I wasn't unclear.

Open phones this hour at 888-825-5225. Starting off this hour is Jacob in Columbia, South Carolina. Welcome to the Dave Ramsey Show, Jacob. Hey, sir. Thank you for taking my call. Sure. What's up? So I just got eligible.

I'm in my fourth year of school. I'm graduating in May, and I have zero student loan debt. But I have racked up about $2,700 in credit card debt. And I just finished the application for student loans, and I've already paid off everything for school, but they're letting me take $7,000 in loans. I'm able to accept that as of yesterday. It's $5,000 subsidized, $2,000 unsubsidized. but should I take those loans and pay off my credit card or even a portion of it?

No. Okay. No, you don't use student loans to pay off credit card debt. To start with, it's morally wrong to borrow money on the taxpayer's back to go to school and use it to pay your bills. So, no, you're not supposed to do that. But aside from that, no, I mean, it's $2,700. What's your degree in? Finance.

What? Finance. Finance. Good. Okay. And so that's what's causing the problem. You're overanalyzing this mathematically, aren't you? Okay.

It's only $2,700. You're going to get a nice job in May, right? Hopefully so, yeah. And just pay your $2,700 off, man. Don't monkey around with trying to beat the system for a couple of points of interest for just a few months. You're going to be debt-free by September. Okay, hopefully so. I've already cut up the card but um good so yeah i mean

if you run the math out you're comparing the interest rate annually on the credit card to the interest rate annually on the student loan debt weren't you yes yeah and so you're trying to run arbitrage on it what we're taught when we do when we get finance degrees i've got one too and so uh but the problem is there's two things when you run it out what i had to learn to do in personal finance especially was when you run out the math that actually occurs here okay so let's say that you did this and you still paid off the 2700 of700 of student loan debt only, okay, by September. And so you have borrowed money effectively from now until September. Let's call it six months, okay?

What is the student loan interest rate? The loan interest rate is 5%. Okay. And what is the credit card interest rate? Between 16% and 26%. Okay, let's call it 20 for round numbers. Okay, so we have a 15% spread. Oh, but wait, we only have six months, right?

Okay. So we have a 7.75 spread. So let's put $2,700,.075. It's a $200 discussion we're having okay you see that that's the whole savings after all this gyration with the arbitrage so the problem with what the way you and i are taught in academia and you're going to have to avoid this in your personal finances is that we are taught these theoretical things that happen in a vacuum uh like this vacuum, like that interest rate savings is pure. It's not pure to start with because you're going to have costs, you're going to have

postage, you're going to have envelopes, you're going to have your time invested, you have all those other things, and so the arbitrage is not pure. You're going to end up making enough to buy fast food dinner one night by the time this all clears on all this saturation because you get caught up in the gross interest rates rather than the nominal actual savings net, net, net of all expenses, including opportunity cost on your time to screw with this. Not to mention the fact that you shouldn't borrow student loans to pay off credit card debt, but that's a side issue. And I wanted to go back and cover the other part because sometimes we do things with our intellect, mental gymnastics that actually tricks us into a bad decision. And that's what I was trying to help you to avoid doing in the future. Eric's with us in Salt Lake City.

Hi, Eric. Welcome to the Dave Ramsey Show. Thanks so much for taking my call, Dave. We're huge fans of you. I'm honored. Thanks. How can I help? So I just started a new job. show. Thanks so much for taking my call, Dave. We're huge fans of you. I'm honored. Thanks. How can I help? I've got, so I just started a new job. The one I was at previously, I wasn't at very long,

so I have about $7,000 in a 401k at the last job. I had an idea. We've been trying to kind of fund an IRA. We've had a couple medical things go on, so we haven't been able to do that. I was wondering if it makes any sense at all to cash out that 401k to put in a Roth IRA, or should I just roll it into my traditional IRA? I would roll it into a traditional unless you're at Baby Step 6-7 right in there, and then you could pay the taxes separately with extra money you have. Are you and Baby Step 2 still getting out of debt? No, we're 4, 5, and 6.

We're out of debt other than our home. Okay, if you want to pay the extra $2,000 tax bill out of pocket, out of cash, at this stage of the game, you can roll a Roth at the Baby Step that you're on. You don't think that's a silly idea? No. I ran out by my wife, and she was like, no, let's call Dave and see what he says. Mathematically, it works out. But I just don't want you to do it from a cash flow standpoint.

If we added a zero to it, I would wait until you paid off your house. But it's a small enough amount, it's not delaying anything much. So just for cleanliness, if you want to flip it to a Roth and pay the tax bill, that's fine. You're going to come out ahead doing that. It's a small enough amount, it doesn't affect your baby step six progression much. This is the Dave Ramsey Show. The last thing I want you to feel is buyer's remorse, especially when you offered thousands more on a new home to win a bidding war. If I've taught you anything, it's that blindly throwing money at a problem is a stupid plan and something you'll regret for years.

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or if you are any of those, you call and he'll be here for you. 888-825-5225. Journaling can make you a more content person. Did you know this? This is important. Content people don't feel pressure to keep up with a lifestyle they can't afford. Consequently, they don't have a tendency to live paycheck to paycheck or rack up debt.

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Toby is with us in Salt Lake City. Hi, Toby. How are you? Great, Dave. It's an honor to speak to you today. I appreciate you taking my call. Certainly. My pleasure.

How can I help? Well, I'd really love your opinion, Dave. I'm kind of in a situation. I'm 46 years of age, and I'm in baby step two right now. I have about $9,000 left. I'm on my final debt, which is a car, but I'm trying to get it paid off. And I'm currently contributing to my 401k. My company, actually, I put it into a Roth IRA and my company matches up to 6%. I'm just wondering, based on my age, the amount of debt that I have, I feel like I'd be giving that money away if I stopped putting that money in. And I just wanted to get your opinion that money away if I stopped putting that money in, and I just wanted to get your opinion on what you think I should do.

Well, we've told people for 20 years to stop investing while they're getting out of debt in Baby Step 2. As a matter of fact, that is the definition of Baby Step 2. So you're not in Baby Step 2 right now. You're just working on your debt. But Baby Step 2 is you stop all investing and completely focus. And your feeling about losing the money is absolutely correct. You are losing the money, but it's for a very, very short period of time. And what we have discovered is that money is not unlike anything else in life. What you focus on is what you win at. People don't become successful at something, wealth building or other things, without focusing on it. They don't successfully become debt-free without focusing on it.

You eventually will wander out of debt. But the complete unbridled focus is the big issue here. Are you married? Yes, sir, I am. The reason you are is there was one point when you were dating her that you were so completely absorbed with her that you were focusing and to the exclusion of everything else actually the unhealthy exclusion of everything else probably for a short period of time but that wasn't unhealthy because that's the proper way to work through a courtship and

establish a connection that you get married and you stayed married all these years because of that. And so that's, you know, what you focus on is what you win at. And you can do whatever you want, but that's what we teach and that's what has worked for so many millions of people for so long. Haley is with us in New York. Hi, Haley. Welcome to the Dave Ramsey Show.

How are you? Hi. How can I help? So I'm 17, and I'm about to head off to college in a couple months. Mm-hmm. And I'm out of state for my school, so after my scholarships, it comes about 30 a year and my parents collectively make about 320 a year, give or take. Um, and not to sound ungrateful, but I knew from a young age that they weren't going to contribute to anything for college for

me. So I was wondering how I would go about the federal loans because we didn't qualify for any of the student loans. Your parents make $320,000 a year and their plan for you is to go into debt to go to college. Yeah. I don't think I need to be talking to you. I think I need to be talking to them. That's absurd. I know.

My dad, we've discussed it a little bit, and he makes primarily most of the money. He makes about $280,000 or $260,000. The thing is, is they just bought a second house last year, and they're older than most parents, so they just bought a second house last year. And they're older than most parents, so they're planning on retiring probably within the next, like, seven to ten years. So my parents, my mom is just, like, saving all of her money for that rather than, like. Well, that's sweet. They bought a second house so they can't afford to send their kid to college.

Yeah. That's some screwed up value system see that's what i mean i should be talking to them instead of talking to you darling because i i am not going to tell you at 17 years old here on the radio to go into debt to go to college i think there's other stuff going on here and i know you've got your heart set on that particular school and this particular path and your family is going to do what your family is going to do but you call me here on the air and ask me what i would do um i would challenge your parents and it's not it's not that you're ungrateful um i can't possibly imagine making 320 000 a year and not sending my kid to school

letting them go into that to go to school. I can't imagine that. That doesn't occur to me. My children are more important than my second home. It just doesn't calculate well with my value system. So you probably need to sit down and talk with them and get a different understanding, and you need to get some other coaching in detail on how you might head off to school, a different place where you can afford it without student loans, because I'm not going to tell you to go into student loan debt, kiddo.

The 30-year-old version of you is not going to like the 17-year-old version of you that made these decisions, which you're apparently making by yourself as well, which is also bad parenting on your parents' part. They should be in there helping you make decisions to not go into student loan debt in addition to helping you make decisions to not go into student loan debt in addition to helping you financially. So that's what I would tell you to do is try to get some help from some coaches, some counselors, and your college choice and where you can, the cheapest place you can go if you've got to pay for it yourself, and what kind of jobs you can line up and what kind of scholarships you can line up so that you can go to school without going into debt. Open phones this hour at 888-825-5225.

I wonder what Anthony would have said about that. We'll know in just a few minutes. He'll be on with us, and we'll ask him his opinion about that. He might be nicer than me. He might not have drunk as much coffee as i've drunk today or something i don't know dave ramsey's such a jerk yeah yeah that's me that's me calling out somebody making 320 a year not sending their 17 year old kid to college that's me i'm a jerk i just called him out so just just put me under the jerk label if that's how you do it. Robert is with us.

No, he's not because I'm heading into a break. All right. I'm just distracted. I'm on Baby Step 456. Nikki says on Facebook, having to relocate to a new area. Should I rent for a year or so to become familiar with the area? Doesn't hurt. I've only been in my home for one year.

Not a whole lot of equity when I sell. Okay. Yeah, I'll probably rent for a little while and build up a good solid down payment. Save like a crazy person. Really learn the area. You will make a better decision on purchasing if you're completely unfamiliar with the area when you do that. But it sounds like you're doing a really good job, Nikki. You're in 4, 5, 6, meaning you're doing investment.

You're thinking about kids' college, thinking about paying off your home. Home doesn't have a ton of equity. You are making a decision to make a move. Very cool. These are good times for you. This is the Dave Ramsey Show. Thank you. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM,

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That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org Join me this half hour, Anthony O'Neill, Ramsey personality, author of the bestselling book, co-author with Rachel Cruz, The Graduate Survival Guide, Five Mistakes You Can't Afford to Make in College. And, of course, he's the guy, the inventor of the Teen Entrepreneur Toolbox, a box of teaching aids to teach your teens how to start and run a business, how to start making money and learn skills that they can use in the real world. Welcome back, Anthony. Thank you so much, Dave. Feels good to be back. Been traveling again.

I have. I have. And I leave Thursday to go to Lumpkin County High School in Atlanta, Georgia, to speak to all their seniors who are graduating. So they all bought the Graduate Survival Guide and a couple of teen toolbox kits as well. So I'm excited. Fun stuff. Okay.

Were you in the studio when I called a minute ago? Yeah. I'm sorry. I just can't figure that out. Of course, you and I didn't come from parents that made $320,000 a year, so we don't know

how to deal with that. Yeah, but it's still stupid, Dave. I mean, a parent that makes $320,000 would rather get another house than send your kid off to college. And I always say this, too.

The caliber of your future will be determined by decisions you made today so to help your your daughter make a dumb decision today now is a horrible decision for their future so you know it's not about disrespecting the parents but i would definitely say that that is a horrible decision that they're making but i definitely want to say this about the young lady dave clearly she knows that this is not a good decision because she had to get some call and ask you for advice so she's seeking help she's seeking wisdom um but was she you're right i want to talk to the mom and dad and privately not on the air so you're just so much nicer than me i think it would be entertaining radio oh dave see i'm just saying i'm just saying

i mean i agree with you dave but there's some other things i want to say behind closed doors it just wouldn't be so good on the radio and i don't want you know you're dave ramsey i'm anthony o'neill so you can get away with things that i can't it's just because i have for so many years that's the only reason oh anthony's going to be doing with meg meeker speaking of someone who gets away with a lot of stuff um he'll be with dr meg meeker doing smart parent event on may 14th in minneapolis and smart parent may the 21st in sacramento and then meg and anthony will be with us speaking at the big smart conference in sacramento on nove November the 16th. That one's going to be a home run. Home run.

These smart parent events are brand new, and you can still get tickets to all of those. Now, what do you think Meg would say about that idea? Well, you know, Meg is going to be much nicer than both you and I combined, but she would definitely say that's a horrible decision as well. Yeah. She won't be as blunt, but she will. Well, she'll yell at them and make them feel horrible with such loving words. You know, me, you said that's stupid. America's mom can thump you and you didn't realize you were being thumped.

Exactly. You'll be like, did she just knock me out? She sure did. Well, that's why she and Anthony are such a good one-two punch, no pun intended, for the Smart Parent event, May 14, May 21. Those are coming up pretty fast, Minneapolis and Sacramento. If you want to be in on those, those will be some of our last live events of the year.

And so, again, open phones and open time for tickets right now at DaveRamsey.com, AnthonyO'Neill.com, or with Ramsey Concierge at 888-22-PIECE, 888-227-3223. Connor is in Youngstown, Ohio. Hey, Connor, your question for Anthony. Hi, how's it going? So I'm a trade school student. I'm a senior at a vocational high school. Cool. What are you studying?

I take advanced manufacturing, so machining with milling machines, lathe, CNC. Good. Yeah. So I'm graduating here pretty soon, and I work through the school. I do a co-op program, so I'm able to work instead of go to high school two days a week. Mm-hmm. work through the school i do a co-op program so i'm able to work instead of go to high school two days a week um and i was just wondering if i should if you feel that going to college say for like four years would provide a good enough roi because like to make a higher income than say a machinist would make depends on what you're going to study. Well, like say I were to study mechanical engineering.

Well, I know mechanical engineers that make 100, 120. I don't know many machinists that make that. A lot of the machinists that I work with make around 60, which isn't bad. No, it's not bad at all. And there's no shame in that if that's what you want to do with your life. But as far as ROI, that's return on investment, what you would pay for your education to become a mechanical engineer and make, I mean, you make your money back like the second year you did it.

That's a pretty strong ROI. Yeah. I'd probably work as a machinist through college and pay out of pocket just because I feel like that would be... Yeah, but the point is, if you pay... Let's just use an example. I'll just use round numbers, okay? And then I want to get Anthony's take on this.

But let's say that you could make $60,000 as a machinist, all right? And let's say that you made $110,000 as a mechanical engineer, okay? Right. Average over a 10-year period of time, okay? It might not be first year out, but let's just say average, okay? So the difference is $50,000, right, year one, or average over year one, right? Yeah. Okay.

110 minus 60, you follow me? Mm-hmm. Okay, if you spent $50,000 for your education out of pocket, you made your money back in one year, right? Right, yeah. That's a pretty tremendous ROI. That's called a 100% return on investment. There's not any mutual funds paying that, dude. So, Anthony, what do you think?

I'm rocking with you, Dave, and that's what I recommend, Connor. Start off going to community college because you can do that for about $3,000 to $4,000 for the first two years. That's with you, Dave. And that's what I recommend, Connor. Start off taking start off going to community college because you can do that for about three to four grand for the first two years. That's eight thousand. The average in-state school to transfer from there is about twelve thousand. So you're about twenty four to about thirty thousand dollars for your income. So now you're you're now you have a better return on your money right there. So is college worth it? Yes. Let's just be straightforward. It is worth it. Figure out how to go about it much cheaper so you can pay for it quicker, but solid return. But, man, the fact that you're calling and asking this question, Connor, I want to commend you on that.

And I also want to commend you for working and getting it up front, saying, you know what, I want to work and pay cash for it throughout. So you are going to have a huge ROI because the biggest investment you can make right now, Connor, is in yourself. And you're making the best one by doing it debt-free. So you said you're how old? I'm 17. Okay. Well, you are mature beyond your years in the way you're looking at all of this. Yeah.

You're way ahead of the curve. You're not afraid of hard work. Those two things are going to make you more money than anything else we're discussing to start with. Now, then the other question I would ask you is, it sounds to me like these two different things have one thing in common, mechanical engineering or working with the machines themselves and being a machinist. It sounds like you see things, your mind has a natural ability to see things spatially. You see the way things are shaped, the way they work together easily. Definitely, yeah. I like mechanical systems and how they work.

Okay. And so that's something to recognize because it could be that that could be applied in other ways without, I mean, you could go get your machinist degree and then open your own company that did something and make more than either thing we're talking about. And all you have is your trade school because all you are is a machinist. For instance, I have a good friend who is a gun manufacturer and has a high school degree and makes millions of dollars a year. He owns a huge brand. And he started out as a machinist. He's a huge brand. And he started out as a machinist.

He's a gun guy, and he started messing around. Guns are basically a manufactured piece of metal, right? It's something that are machined. And he sees things like you do spatially. He's a spatial genius, actually. He's probably a savant. But that's why he's built such unbelievable weapons that have been sold all over the world. But anyway, that's an application of your skill that came into my mind when I was talking to you,

and he did that. So the question is, where do you want to be when you're 40, and which of these two tracks takes you there? If you want to just, say, compare the two jobs, machinist to mechanical engineering, the original thing that we laid out here is the best way to go. And there's nothing wrong with being a mechanical engineer and a machinist. Nothing wrong with both of those things. And, you know, you could really open up a lot of – that would give you the ability to own and or run huge manufacturing operations that your income could be amazing.

And again, with your ability to see things at this young age, I can work my way through. I'm not scared of work. He's doing his whole high school thing in an untraditional way, going against the system. Yes. This guy's got a future. His future is so bright. Anthony O'Neill, Ramsey Personality with us this half hour. This is The Dave Ramsey personality, joins us this half hour.

Author of the book, The Graduate Survival Guide, Five Mistakes You Can't Afford to Make in College. Robert is in Cincinnati. Hey, Robert, welcome to the Dave Ramsey Show. Your question for Anthony. Yes, thank you, Dave, for having me on. So I'm kind of facing a predicament. I've been stressed out to the max, and my mother, unfortunately, passed away last July. And family hasn't really been there, so it's

literally just me that's kind of out of the picture. So I'm 23. I'm getting my master's degree in communication. And my question basically is, I have $38,000 in student debt from my undergrad. And then I also have $15,000 left on a car payment. And like I said, I had no idea what I was supposed to do. And looking back now, it's like, well, I shouldn't have gotten that car probably. But when the estate closes, after talking to my probate lawyer, he mentioned it could be anywhere from $50,000 to $60,000 that I get back. So basically, do I just pay off the loans and the car, or do I pay off the student loans from undergrad and pay out of pocket for the rest of my master's degree? Are you working? I currently just got an internship with a minor league baseball team,

and it's a paid internship and it counts as course credit. What does it pay? $12 an hour. And how many hours? It could just range. It depends on if games get canceled or not. But there's five games a week, so it could be anywhere from 30 to even 50 hours, so it just kind of depends.

Okay. All right. Robert, what is your degree in right now? What are you studying? Communications. Communications. Masters in communications. Well, my undergraduate degree was film and media arts and communications, so I want to

be a sports broadcaster or get into public relations. How much longer before you finish your master's? I am due to finish in December of 2020. So a year and a half. Okay. A year and a half. Okay. Well, Rob, this is what I'm going to recommend.

And I would love to get Dave's advice on this too. But I'm sensing once you, and again, I want to apologize about your passing of your mother. But I would love to see you not borrow any more money. So I want to see you stop, stop borrowing money immediately. And so I would take that money, pay for the rest of my master's program and start lining your debt from smallest to largest, like what we teach in the debt snowball.

But then once you finish your education, then yes, I want you to start attacking and really attacking all of your debt. But the key thing is right now, especially at your age bracket, I don't want you having any more debt coming up here in the near future. And so I definitely want to see you go that route. So what would it take money-wise to finish your master's? How much will it cost you to finish it? So for six credits, which is considered full-time for a semester where I go to school, it's going to cost $3,100. So for the summer internship, it kind of sinks in a way because I have to pay for the credits for the course.

So let me just ask, round numbers, $10,000 finish your master's? Yes. Okay. That's what I was thinking. All right. And so we set $10,000 aside out of your mom's inheritance. And again, sorry about your loss. I appreciate that.

You set that money aside, and that finishes your master's. Done. You feel less stress? I feel less stress. Okay. The second thing I'm going to do is I'm going to pay off the car. Okay. Now I feel less stress.

The only thing left is $38,000. That's $25,000 of the $50,000. That leaves you $25,000, and there's $38,000 in student loan debt, right? Correct. And you don't have to touch it until you graduate, right? Correct. Six months after I graduate, yes. Right. Okay.

So I would set the $25,000 in an account and not touch it. I would work enough baseball to pay my bills and eat, because now tuition's covered and you don't have a car payment. Yep. You got $25,000 as a fallback account, but don't you dare touch that and tell me you went on spring break. I'll kill you. Absolutely.

I completely understand. And I'll drive them to come kill you. So this is not party money. This is money that must be used in a wise way in honor of your mom's memory. Right. Yeah, I've been trying to save money, too. I've literally just been, been like it's been hard i just need to like peter burton's early sandwiches and like ramen like yeah the longest time and you

know trying to deal with all this stuff myself so when will the estate when will the estate settle out uh so my probate lawyer said it could settle within two weeks or a month and a half okay so tell him you like the two tell him you like the two-week plan better and get it going. Sometimes an attorney, it's good to remind them they work for you. You don't work for them. They need to get it done. You've got the money to pay the rest of your tuition. Set that in one account. $10,000 in that account. Don't touch that account.

Two separate literal account numbers. Okay? Okay. Savings account right across the front of that little book they give you when you open the account. Tuition money. Don't touch it. That's your tuition money. Pay off the car. Set the other $25,000

aside. Don't touch that until you graduate. And work your way through for your living expenses until you graduate and you can do that can't you absolutely okay with no car payment especially now when you graduate what are we going to do with the 25 000 with the 25 000 we're going to go ahead and hit that student at heart. Boom. Touchdown. There you go. You got it. That leaves you $13,000 with a new job. It won't be a touchdown.

It'll be a home run in your case, right? But, yeah, we're going to have $13,000 left, and you're going to pay that off very, very quickly with your new job and your master's in communication under your belt, okay? Awesome. Thank you so much i appreciate it you're gonna make it if you need some more help you call me back or anthony either one we'll help you out man that's what we're here for it's scary it's definitely three years old mom dad's out of the picture mom's gone yeah yeah and it's uh it's sad to hear that but he called in got the advice

i believe he's going to stick to it dave and He was stressed. Yeah. Yeah. That's how it works. Vince is with us in Nashville. Hi, Vince. Your question of the day. My question was, so I'm a sophomore in college right now. I'm finishing up my last semester at community college. I work in a restaurant right now, but I was looking at changing careers to something like FedEx, UPS, or a company that offers a tuition reimbursement. Love it.

But I'd be taking a cut in pay to do that. Yeah, but you'd be getting an increase in situation because the cost of tuition is added to your pay. Yes. So my question was a... So what do you make now? What do you make now in a year? In a year, I make about $18.

Okay. And what would you make in money at FedEx or UPS? I'd be getting paid between $11 or $12 an hour starting out. How many hours would you work, and what would you make in a year? A year, I'd be looking at closer to $15,000 a year. So you're $3,000 in the hole, and how much is tuition that they're going to pay for? After one year of working there, I could be eligible for up to $5,000 a year in tuition reimbursement. So that's like making $20,000 instead of making $18,000.

Yes, sir. That make sense to you? My question was, would that be worth it to take that year of losing a little bit on money that I'm paying towards school now to get that one year down the road, that increase in cash flow. Well, you're guessing at the hours they're going to give you. Right. Yes, sir. And if you're in there begging for hours every day, they'll give them to you, especially

at Christmas. Yeah. Right. So, yeah, UPS and FedEx both offering that in Nashville right now? Different amounts, but in Nashville and surrounding areas, Murfreesboro, Nashville, Montjuic, those areas. Very good, good. Well, I knew that in Louisville where UPS is based, they've done that for years.

As a matter of fact, they'll pay for your entire college there if you're in Louisville. And I've seen them do that. I didn't know FedEx was doing it yet. But, yeah, just run the numbers out like we just did, okay? But let's pretend you picked up enough hours that you made $18,000 and you got $5,000 in free tuition. Now it becomes what's known as a no-brainer, right? Yes, sir.

And that's the way I would go on it. Hey, look, Anthony, these tuition reimbursement things are around. You've seen them, right? I've seen them all the time, and I definitely want to say I love that route for him, Dave, as well. But as well, hey, if you want some extra money, Uber. Uber is booming right now in downtown Nashville. So you can get another $1,000, $1,500 a month right there. Yeah, on top of what you're already doing.

Yes, sir. And now you're there. Or you can wait tables, too. You can. That's part time. Both, both, both. That puts this hour of the Dave Ramsey Show in the books. Anthony, thanks for hanging out.

Dave America, thank you so much. Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.