The Ramsey Show - App - You Don't Have to Give Up on Your Dreams to Get Out of Debt (Hour 3)

Episode Date: August 5, 2020

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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, Anthony O'Neill. Ramsey personality, number one best-selling author, is my co-host today here on the air. Open phones at 888-825-5225. That's 888-825-5225. Heather is going to start us off this hour in Knoxville.

Well, there it is. Heather's in Knoxville. How are you, Heather? Hi there. Thanks, Steve, for taking my call sure how can we help um well i am a small business owner i'm actually an artist who works from home um i had um a lot of credit card debt and then i received a small business loan um and so i was i i saw one of your shows passed when I accepted, or no,

I guess it was earlier. And it was like a no, no, don't do that. So can you explain that? It's at 3.75% 30 year. I do plan on, my goal is to pay it off sooner. But can you help me with this? You know, I basically use the loan to pay off the credit card debt. Okay. Which was very high interest. So you just moved your credit card debt to a small business loan. Yeah.

Correct. And so your credit card debt was 18 or whatever, and now you've got a 4% loan. And it was how much money? About, well, for that loan it was about $19,000. Okay. And how much were your payments if you added up all your credit card payments back before you moved them? Yeah, $400 a month. And how much are you paying on the on the small business loan oh i'm sorry i i said that wrong four hundred dollars almost four hundred dollars was just

interest okay so the actual payments were um i don't have that number in front of me probably probably about a thousand dollars yeah yeah you're about right and how much have you were, I don't have that number in front of me. Probably about $1,000. Yeah, yeah, you're about right. And how much have you been paying on the small business loan? Well, I just got it weeks ago. What's your first payment? It will be $105. You got it how long ago?

It will start just a couple weeks ago. Okay. All right. It's going to be $105. It will be $105, which will set in one year from now, which I hope to pay off early. And did you say it's over 30 years or three years? Yeah, 30. $19,000.

Okay. Yes. Let me point out to you what the problem is. Yeah, please do. Okay. You did save on the interest rate. Yeah. Let me point out to you what the problem is. Yeah, please do. Okay. You did save on the interest rate. Yes. That's wonderful.

The problem is you feel like you did something. Well, yeah. And what ends up happening is now you're going to pay $105 a month payment instead of paying $1,000 a month. Right. If you paid $1,000 a month, you'd be done in 19 months. But 99% of the people don't do that right because they fall into this psychological trap of a debt con consolidation loan that's basically what this is you got conned thinking that the lower interest

rate was your problem when in reality your problem was not interest your problem was you you had a 19 000 problem and you tried to solve that by borrowing your way out of it. So now you're there, though. I'm not going to beat you up for where you are today, but you ask me what the problem with it is. The problem with it is it doesn't get people out of debt because they don't change their behaviors. Matter of fact, they do change them, but they change them negatively, meaning you end up paying less on your debt instead of more. If the net result of this was people would pay 1500 a month instead of a thousand a month if but they don't as you can well imagine they pay what is asked and nothing more and your lifestyle goes up 800 bucks a month

and you know all this i gotta buy this and oh i needed to do this and now and i'll get around to it later i got 30 years yeah yeah yeah heather so let's talk about this where you at now i mean you have you're here you got 30 years uh you're not i probably don't actually but okay well i was about to say that you're not taking 30 years um no i honestly want you to go back to paying what you were paying i want you to put more snowball yeah go back to paying what you were paying. I want you to put more. More. Yeah. Go back to doing like the $1,500 a month, $2,000 a month. What do you make? What's your household income?

Okay. It's, well, I'm self-employed. I'm an artist. I know. But what do you make? You know, I make enough just to cover the rent. I mean, I'm sorry, the mortgage and the bills and feed and all that. And then, so I guess, you know, I have to take in at least about four to five grand a month to get by. Forty-five hundred.

Yeah. Forty-five hundred. Okay. Yeah, that's fair. So would you agree, Heather, that maybe you need to pick up something else on the side? Pardon me? Would you agree that you need to get some extra income coming in? Well, I honestly, I don't know how to do that. I mean, I'm 53. I have not even a high school education. I'm an artist for a living.

This is what I do. I don't know anything else. Can you do more art? Honestly, that's me working a lot. Okay. Well, we may need to raise your prices because the bottom line is that you need to pay $19,000 off in one year. Yeah. That's what you need to aim at.

And that's about $1,600 a month. And that means you're going to tighten your budget and raise your income. But I think you were looking for me to say that this is all okay. I'm not going to be mad at you for doing it, but it's not okay because it gives you permission to stay in debt longer rather than get out of debt faster. And that's what the banking institution wants from her. They want you to be there.

They want you to be owned by them the rest of their life. And I'm estimating, Dave, $19,000 with a 3.75 interest rate over 35 years is what, about $28,027? No, it's just ridiculous. She wasn't planning to do that. Yeah. But people don't plan. That's what I was about to say.

Yeah. So she wasn't planning to, but she probably. But people don't plan. That's what I was about to say. Yeah. So she wasn't planning to, but she probably would have. Jane is in Rochester, Minnesota. Hi, Jane. How are you? Hi there, Dave. I'm just great. Just hoping to chat with you for a few minutes.

We've got a daughter going through a divorce. She has three children. It's been ongoing for two years now. And lawyer costs, of of course have been astronomical but we're at a point now where she's going into finally the financial negotiations very soon so we're just kind of looking you know to give her some advice going forward she enrolled in nursing school she'll be graduating from nursing school in next next spring so hopefully employable by June of next year and then she'll go immediately on for

her BSN. So, um, that will be a good income at that point in time. Up until then they have relatively nothing. Um, so they're, they're in a home. Um, she wants to leave that home for a lot of different reasons, but, um, in the interim, between this period now when the divorce becomes final, hopefully by the end of this year, and when she graduates now in the spring, we just want to kind of give her some insight as to what steps she might be able to take here to get her credit online, get going with that, and, you know, a long-range look. She has three children, so she needs to get into a home at some point. I mean, what would you suggest?

Yeah. The main thing we have to do is just take care of her, and we call that the four walls, food, shelter, clothing, transportation, and utilities. And then, as you've wisely pointed out, get the career track going. I'm not really worried about her credit. I want her to take care of her and the kids and finish this education, get this income coming in, and credit will solve itself way down the list of things. Obviously, we want to clear the debts and build an emergency fund as fast as we can.

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Flint, Michigan. Hi, Amy. Welcome to the Dave Ramsey Show. Hi, Dave. How are you guys? Great. How can we help? So earlier today, I was in a meeting for work and they started off you know good news with oh this is happening with our company and also we were just acquired from a large fortune 500 company however our division is looking to possibly dissolve and I am still in the midst of baby step two. Um, so I mean the likelihood of us losing our job, they basically told us today to start looking for something else. Whoa. And, and I, I have a house and, um, a Jeep that I'm still paying for for that's part of my baby steps and i'm just scared yeah i don't blame you what a horrible day i'm sorry and you're single yeah i have had a roommate to help with the bills but okay yeah you stop everything and start piling up cash. So what do you make?

Right now it was $36,000 a year. What do you do? I was doing medical billing, but we haven't been able to do most of it from home, so I've been kind of at a standstill for work, and I was kind of worried that something like this would happen, but, you know, you always say, what's the possibility, and I always thought it was more like 10% instead of 95%. Okay. Wow. All right.

Now it's there, though. So we stop everything, we pile up cash as high as you can pile it. And you are in job search mode 100% starting today. Ready, set, go. And you'll get another job. 36,000-hour jobs. You can come by that. Yeah. Yeah. Have you started the process already, Amy? I have started to apply with some, but since i've been working from home i've found that i had a mold issue so that's something that i'm also dealing with too

and then i'm going to have to fork out some money for you know paying my deductible for that and different things so i've been yeah again again though that you push all of that out as far as you can push it out because what you're dealing with is today yeah today you got new information yeah okay and so the the information you got today says don't write checks for anything that you don't have to you're in war zone mode you just went to war starting today. You're piling up cash, piling up cash, piling up cash, piling up cash. You go to Ken Coleman dot com and you download all of his stuff on how to do a resume on how to do an interview. I'm going to give you a copy of his book, The Proximity Principle, to help you with getting started on this job process. And it

may be the best thing that ever happened to you. Right now that doesn't sound good, but how many times has it happened to you, like it's happened to me, that when crap like this comes, I look back five years later and I go, man, I'm really glad I got knocked out of that because I ended up with a good thing. Yeah, yeah. Probably too many times. Yeah.

And it isn't like you're losing a $536,000 a year job. You're losing a little $36,000 a year job. I know it's what you got. I'm not picking on you. I'm not shaming you, but it's an opportunity to move up for you. Absolutely. And Amy, are you in a budget already? Yes, I've been doing every dollar consistently. Just go look at your budget today. As soon as you hang up the phone, sit down and start cutting off any extra stuff, subscriptions, any extra stuff that you have in there, stack cash. At the same time, you are downloading this resume update so you can get a better job. Yeah, I want you to delay the mold thing as long as you can delay it without putting your health at risk.

Delay anything you can without putting it at risk. Right. And then you start saying, all right, how much cash you start saying all right how much cash can i pile up how much cash can i pile up because cash gives you patience and uh and then you start thinking about two things one is what is my long-term career and how am i going to land that job and that might be making 60k yeah yeah yeah yeah and then the other thing you think is whose house can can I clean for $25 an hour? Or whose dog can I walk? Or what other stuff can I do?

Start Gap, just to pile up cash to go into full-on emergency create money mode. She's in Flint, Michigan, Dave. She can do Uber. She can do Uber Eats. She can deliver groceries. I mean, they're hiring instantly. Yeah, you can start that by nightfall. Yeah. And so you're going to start doing a whole bunch of stuff and just anything you can do to create an income that's legal and moral

and anything that you can do to pile up cash and pay as little out the door as you can pay until you land the new job. Yes. And as you walk away with the medical billing in your rearview mirror, that's going to be a really nice day. And you're going to move on to the next thing you're going to be great hold on i'm going to have kelly pick up we'll get you a copy of ken coleman's book the proximity principle number one best-selling book on uh the proven strategy that will lead you

to the career you love download all of the all this all the tools on his website ken coleman.com his stuff on building a resume his stuff on getting in the door, and then his stuff on doing interviews, it's all downloadable stuff on his site is absolutely world class. It will help you land the job that you need to solve this problem. I'm sorry you had a horrible day, honey. And the only thing I'm sure about horrible days is tomorrow's not going to be as bad. And the next day will be a little better.

And the next day will be a little better. And a month from now, you may be smiling. You just never know. I kind of think you're going to be. You are a person who develops a plan and executes it. Our question of the day is from Blinds.com. Find out why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos every month, you save even more.

Use the promo code Ramsey. Anthony, our question. Sean in Ohio visits DaveRamsey.com to ask, My wife and I are in baby steps four and seven. We paid off our house last year to knock out step six. We are expecting our first child in November. So we had a question about step five that we hope you can help us with. Rather than spread contributions to our children's

529 over several years, would it be a good idea to contribute substantially to their 529 over just the next couple of years, allowing the maximum amount of time for the investment to grow and minimizing the amount of initial investment needed to reach our goal love it that's a good question i mean i'm saying start uh with 529 and just just put as much in there as you possibly can max it out yeah run the numbers with your smart investor pro and figure out what the number is when you quit yeah when you got enough and you stop yep Yep. And that's what we did. And once we got enough in there, we just stopped. And that box is checked and we don't have to think about college anymore.

Yep. That's easy. And I like your plan. I love the plan. Thinking about your kids early on, it's just beautiful. Yeah, that's a fact. And you can chunk in most 529s if you find one. When you're picking a 529, always pick the one that allows you to control the options.

It doesn't move options around for you. They're not fixed. And they've got good mutual funds that you can pick from in there. That's what you're looking for. And then that way, if it changes, the market shifts on you or whatever, then you can decide I'm not going to stay in that mutual fund and that kind of thing. But most of those 529s allow you to put 10K a year away. You do that for about three years, the first three years,

that 30 will probably grow to more than you need. And that's, you know, sit down and run the calculations with your SmartVestor Pro, and they'll help you figure that out. This is the Dave Ramsey Show. Thank you. Most people's money problems come from not paying attention. That's why before I spend a dime of my money on something, I do the research and I make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called Shady Rays. When you're looking for sunglasses, it feels like your options are limited. Name brand sunglasses cost too much, and the cheap knockoffs are ugly, and

they don't really protect your eyes. Discovering Shady Rays is a game changer. With Shady Rays, you can count on premium sunglasses that protect your eyes, and get this, they're affordable. They give people the best overall value in sunglasses. They also replace your shades with a brand new pair if you lose or break them from day one of your purchase. Plus, they offer an exclusive for Ramsey Show listeners. Right now, you can grab most polarized pairs for just $28 at ShadyRays.com with the promo code Dave to get $20 off your first pair of Shady Rays. Anthony O'Neill, Ramsey Personality, is my co-host on the air today. One of our favorite things to do is debt-free screams. Our next favorite thing to do is a debt-free scream from the debt-free stage in the lobby of Ramsey Solutions. But our favorite thing of all to do is a debt-free scream from the debt-free stage in the Ramsey lobby with one of our own Ramsey team members.

Yes, sir. That's what we're doing right now. Come on. Jody Norcio is with me. I can't remember. I'm sorry, Jody. I know this, but I can't say it. Is, sir. That's what we're doing right now. Jody Norcio is with me. I'm sorry, Jody. I know this, but I can't say it. He's with us and been with us about a year and a half, right? Yes, sir. And works on the Entree Leadership Team. Correct.

And your husband, Mike? That's right. Mike, welcome. Good to have you guys. Thank you. And you're debt free! Yeah! I like it! How much did you pay off? A little over $157, over 157 000 and how long did this take well we paid off our house so nine years and ten months weird people another paid for house that's awesome what's this house worth about 325 something like that kind of hard to tell around there i love it well congratulations so how long did that take again What's this house worth? About $325, I think. Something like that.

Kind of hard to tell around there. I love it. Well, congratulations. So how long did that take again? Nine years and ten months. Nine years. So the normal process, that's about right, takes usually seven to ten, right in there. So that's right where you are.

Perfect. Well done. So tell us the story, because kind of the end of the story, you're coming to work here 18 months ago, huh? That's right. And you've been already working on this a long time. Tell us the story how this all happened. Well, I think that we met you and heard about FPU in 2005, and we had $60,000 in consumer debt at that point and went through FPU.

We wrote our check to the church and literally prayed that that check wouldn't bounce because we were so in the hole and so we went through the class and i was kind of like i don't really want to do this i was driving a really expensive car and i really liked my car and i'm like i deserve this car because i work really hard and i think on lesson three you said if you can't pay cash for it you you don't deserve it and i felt him like looking at me and i was like we gotta know what kind of car was i had an audi tt it was a limited edition six speed they only made two thousand of them it was nice girl go fast yeah i like that yeah girl go fast wow i've had one of those cars for a little while that That thing will run out from under you. I love it. But we paid that debt off in 17 months, and we were going to call in. You did the calls on Fridays.

We were going to call in, but we just went back to work. We were so busy working that we never did our debt-free scream then. So we've led FPU several times since then, and then we bought this house, and we're like, we're getting this thing paid off in 10 years. You still have the Audi? No. No. We have two paid paid for cars that are much older now mike what do you do for a living i work at costco okay very cool yeah nice good way to go you guys you paid your house i know it's and it's a beautiful home yeah thank you yeah we appreciate that it's been really nice We had to say no to

a lot of things and we've got friends that are, you know, out having a good old time, but we wanted the house paid off because you always say, what can the people of God do for the kingdom of God if they're debt free? And that's what we have been focusing on. Yeah. So thank you. It's, it's been a huge blessing to go through your program a couple times. It's been, it's really been amazing. program a couple times. It's really been amazing. Well, thank you, and thanks for leading Financial Peace. We're getting ready to lead again at the end of this month. And thanks, Jody, for all the help and the work you do with the coaching team down in Entree Leadership.

I know they treasure you. So absolutely incredible, you guys. Thank you. How does it feel? It feels weird. To not have a pain in the world sometimes i can't i don't know sometimes i it's just you go about your day-to-day you don't think about it but when i do we talked about it the other day when i think about it it just blows

me away it's like i never grown up never really thought this i could be in this position yeah it's just not something that i ever thought about doing but you you know, we, with, with the Lord's help and, and going through the FPU and getting on a budget and doing all that stuff, man, this is, it's a reality. It's kind of hard to believe sometimes, but yeah, it's amazing. I'm curious if you could go back to your, how long have y'all been married? 20 years. Cool.

Great. I was about to say that. If you can go back to 20 years ago to when y'all first got married, what would you tell your younger selves going into marriage that you wish you would have known that trust in the Lord always put him first. Absolutely. And get on a stinking budget. But I mean, yeah, that's, that's good too good too yeah that's good it works it's been a

lot it's taken a lot to get us this point but yeah it's all been worth it trust in the lord and get on a stinking bike i like this this is a book title yeah it's a book title right here the faith and the work side well it is it is you work like it all depends on you you pray like it all depends on yeah yeah that's right and that's what's next absolutely fabulous well we're going to the beach to celebrate our anniversary yeah which beach i can't tell you no he says that it's capes on blossom florida he just doesn't want anybody to know about it oh you don't want you don't want to spread the. Oh, you don't want to spread it around. Exactly.

You don't want to make it famous. Well, too late. We just told 17 million people. Jody, see what you did. It's terrible. Come on, Jody. No, it's great because now we can give like nobody else. It's amazing.

We're so incredibly grateful for that. We're going to focus on retirement until you start building wealth. Just keep going. Just keep going. You'll be everyday millionaires before you know it at this rate. Very, very well done. I'm sure you've already got a copy of Chris Hogan's book, but we'll give you another one and you can give it away if you want. It's Everyday Millionaires

because that's the track you're on. The whole Entree Leadership team is out here not working and cheering for you. We've got to get them back to work. And a whole bunch of customer care team as well hanging out. And they all love you, Jody. We do. We're so honored to have you on the team for the last 18 months.

And, Mike, we thank you guys for leading Financial Peace University and for setting a standard, setting an example that you can pay off your home and you should pay off your home yeah and uh then when you do uh you live like no one else later you get to go to the beach amen yeah baby this is right this is as it should be very very very well done all right here it is jody and mike 157000 paid off. House and everything! Did it in nine years! Count it down!

Let's hear a Ramsey Solutions debt-free scream. Three, two, one. We're debt-free! And the crowd goes wild! Man. And the crowd goes wild. Woo-hoo! Man. That gives me punt, Dave.

That just gives me punt. I'm telling you, it doesn't matter the income. It doesn't matter the age. It doesn't matter married or single. It doesn't matter what you've been through, what your journey is, what your story is. You get to determine a certain portion of your future yeah and if you don't do that with intentionality it will drift away like the other like the portion that you don't have control over absolutely and so you i can't control

whether somebody's mean to you or not i can't control whether somebody's fair to you or not i can't control you know the mean old toxic boss i can't control sexism i can't control racism i can't control but i can control what i can control yeah and they got after it yeah and they get their house paid for and that puts them in a position to go to the beach and not even this that day but just wake up on the first of the month and have peace i don't have a mortgage payment i don't have nothing but uh just utility bills and and and a cell phone bill and insurance like that is just so much freedom man so much money yes it's a lot of money that is and it you start to realize then for the first time this idea that the rich rules over the poor and the borrower is slave slave lender and you

know sometimes you don't realize you're a slave until you're free yeah and when you're free you go dad come i was a slave yeah i was stuck i mean these people owned me i had to make different choices than i normally would have made because they were in my life they're they being that stupid bank yeah and i'm gonna get the stupid butt bank out of my life. I'm going to get the stupid butt mortgage company out of my life. The stupid butt car fleece out of my life. I'm going to get rid of the Sally Dadgum Navient stupid

stuff. And I'm going to get stupid out of my life. I'm tired of being a slave. And when people decide that, magical things happen, man. Listen, it sure does. I'm so proud of them. Me too. Woo! Well done. Very well done very well done jody and mike well done this is the dave ramsey show Thank you. Our scripture of the day, James 5, 16. Therefore, confess your sins to each other and pray for each other so that you might be healed.

The prayer of a righteous person is powerful and effective. Brene Brown says a leader is someone who holds her or himself accountable for finding the potential in people and processes. Pam is with us in Cincinnati. Hi, Pam. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks so much for taking my call. My honor. How can we help? Well, I am 60 years old. I'm a teacher. I cannot officially retire until I'm 65, but this school year, right about a week before the school year started, I was advised by my healthcare professional that I should not return to the school due to the COVID situation and some underlying issues that I have. I'm able to work. I was working five jobs. I work a retail job on the side. I do copy editing on the side. I do a lot of stuff on the side. But

with this big chunk of income gone, my husband, who also works, wanted to take a loan out on his um thrift savings plan he works in the government thing and i don't i desperately don't want him to do that made that mistake years and years ago no and i i i'm on board with you but i don't have another option and that the thing is there's a lot of things i can just ramp up like my copy editing business and stuff, but those will take a little bit of time to build up. He's just panicking. He's very scared. Absolutely. So what does he make?

He makes about, well, I can tell you, he makes about $45 a year. And you all can't live on that? Well, not with the house that we have at this point and we have a lot of debt okay and um how much what do you have what is the debt on uh we've got credit card student loans and another big loan that we had taken out what is the other big one i think it was we desperately had to do some house repair. You don't have any car payments? Well, we have $6,000 left on my car.

Okay. What do you owe on your home? We owe about $205,000. And what can you make with your situation right now? Well, I mean, I really think I can ramp it up and make as much. I mean, I figured out mathematically that I only need to bring in $30,000 a year for us to be okay. And that's with paying down debt and moving forward. But the problem is just this month, like these next couple of months where everything's not, I haven't built up everything.

We just don't know how to navigate those couple months. I thought about doing DoorDash. I mean, because I'm a scrapper. I'll do whatever I have to do. So it's not okay to be in the classroom, but it's okay to do DoorDash? Yeah. Well, the environment of the school, because schools are notoriously not well ventilated, I teach choir, and so the singing and the air of souls in a room in a crowded environment,

that's what he was most concerned about. That DoorDash probably isn't, well, see, I'm not really in contact with anybody. That's what I'm thinking. Okay. I don't care. I mean, can your husband pick up some extra? See, all we've got to do is do this for 60 or 90 days until your other stuff kicks in, right? Right, yeah.

Well, yeah, until I get the other stuff built up. And he already does. He works all the overtime he can right now at his present job, and that pretty much whips his butt because he's working every day of the week. And that's him $40,000 after overtime and everything. No, I think with the overtime, now that he's doing that, that'll probably bring us in some more than that. Yeah.

Yeah. Because now he's bringing home about $15,000 twice a week, or not $1,000, $1,500 twice a week. Yeah. Yeah. I'm looking at extra jobs, especially for the next 60 to 90 days. I'm with you. I like DoorDash.

I also like maybe even doing some Uber Eats. But let me ask you this other question. What can you do as far as in a small business from home to generate some income? Yeah, you're a music teacher. Why don't you start doing piano lessons or something? Yeah. I do already. I already do lessons, and that's one of the things I can build up.

See, I didn't do a lot because I was busy teaching school. Yeah, but the kids, a bunch of them aren't going back to school, so you could probably add some kids on piano easier than you could add DoorDash. Right, and that's true, and it's just going to take time to build that up. Not much. That doesn't happen. Not much, and I'll tell you this much. I had a vocal coach, not for singing, but for speaking.

And she did that online. And so maybe you can take your opportunities online and generate money. And there are websites out there that you can actually put your information on. And they will actually push you out there some more. So you have some options here to go ahead and get some extra income without touching the TSP. Yeah, I'm not touching it. I'm going to make it. Yeah. I would rather get behind on a couple of bills than borrow on the TSP. And I don't think you're going to have to, because I think some tight budgeting, lots of ingenuity on extra job things for you and hubby, the overtime he's

already working. And you guys tighten this budget down tighten this budget down tighten this budget down cut the cable off all that kind of crap and let's just go to work and um then and then as you get your income up from some of these different areas you may end up making more than you did in the classroom when it's all over and um sadly they may have lost a really good teacher in the process. That's really sad. I'm sorry you guys are facing this, but you're a scrapper. I can tell by talking to you. I think you're going to make it. I think she's going to do just fine.

She's going to do perfectly. Rochelle is with us. Rochelle's in Chicago. Hi, Rochelle. Welcome to the Dave Ramsey Show. Hello. Thanks for taking the call. I am 50 years old, a probation officer. I make 50K a year.

I have 182 in student loans. Good Lord. 32,000 in collections. I have no savings. And I'm trying to figure out, should I give up my dreams of getting a house? How old are you again? 50. Man, you sound so young.

5'0". Yeah. 182,000. What's your degree in? I have a, my bachelor's is in criminal justice, and I have a master's, an MBA with a concentration in human resources. What do you make in a year, Rochelle? I only make 50, 50K a year. And you're 50 years old.

Okay. Okay. So you're dramatically underemployed giving your education? Yes. Yeah. So you have a career path problem for one thing. No, I'm not giving up a dream of winning, period. And if part of the definition of winning is buying a house, I'm not giving up that dream.

But one of the things we ask ourselves when we're setting goals around here is what has to be true that's not true now yeah in order to get there okay so we have 182,032 of which is already screwed up yeah right in collections and so we've got this ridiculously expensive degree and now we got to use it yeah so what has to be true is your income has to come up that's what has to be true and then as it comes up we're going to put you on a tight budget where you have no life for a couple years and you clean this whole freaking mess up and by the time you're 60 you're 100 percent uh debt free and you own a house yeah yeah yeah and and here's the thing rochelle you have to tell, I'm not going to give up.

Okay. So stop asking yourself, am I giving up on my dreams? No, you're not giving up on your dreams. What you're doing is you're just preparing yourself for your dreams right now. It may seem like it's late because you are 50, but that's not late. That's not late at all. You know, so what I'll go ahead and do is just use your dreams to fuel the fire where you are right now. But you have to really get hard. You don't

have any time to play. You have an MBA, right? Yes. And you live in Chicago. Yes. Yeah. You need to be making double what you're making, right? Exactly. Exactly. Or would you even consider moving? Yeah. If you can't land something, you need to move. Yeah. But the point is that that you have overpaid for the degree and then underutilized the degree in creating incomes. That makes sense. That makes sense. And that that's caused you to feel overwhelmed and it feels like a crap been beat out of you, right? Exactly. Yeah, like you're stuck. And so we're about to unstick this, get some dynamite and light it.

Rochelle, where did you go to school? I've got to ask that question. I'm a school guy. I just want to know. That's fine. I went to Aurora University in Aurora, Illinois, and I got both degrees at the same place. Okay. Hang on.

We're going to send you a copy of Ken Coleman's book, Proximity Principle, to help you get going. And you call us back, and we'll talk to you anytime. We're going to be your biggest cheerleaders. You're going to make it, but it's an income issue. Anthony, good job. Hey, thank you, Dave. Thank you, America.

That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top four most popular podcasts last year. To get your daily dose of motivation and inspiration from The Ramsey Network, subscribe or follow today wherever you listen to podcasts.