The Ramsey Show - App - You Have to Set Boundaries With Your Kids (Hour 3)

Episode Date: July 24, 2019

Budgeting, Home Selling, Savings, Insurance  Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE   Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 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 am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Michael starts off this hour in Canada. Hey, Michael, welcome to the Dave Ramsey Show. Thank you.

How can I help? Yeah, so I just got engaged to my partner of two years, and I'm $37,000 in debt. And I want to get that plan together to get that cleaned up before we get married and kind of want to start on a fresh foot before we enter into that union. Phenomenal. And I'm really not too sure where to get started. I never learned money skills, and I'm a new listener and just started kind of to get a rude awakening to all the mistakes i've been making in my last couple years here well i'm glad you're i'm glad

you're focusing on i'm glad we can help so uh well well we teach a couple things in tandem that'll help you get started on this the first thing is is that uh you don't win with anything in life accidentally now that you're paying attention intentionality is going that uh you don't win with anything in life accidentally now that you're paying attention intentionality is going to cause you to win intentionality in the personal finance world starts with a budget and that's you sitting down uh you can download the every dollar app for your phone if you want it's free and you can build a budget there but basically all a budget is is you tell every one of your dollars each month unique month each month what to do before the month gets here on paper every dollar has an

assignment every dollar has a mission you figure out what your income is going to be for this coming month what your bills are for this coming month what you want to do and when you do that you're going to feel like you got a raise because you're going to be more efficient more organized with your money and the it's going to drop the impulsiveness down it're going to feel like you've got a raise because you're going to be more efficient, more organized with your money. And it's going to drop the impulsiveness down. It's going to go to the things that you want it to go to, which in your case is $37,000 worth of debt. That kind of thing. We want to knock that out as fast as we can knock that out.

Now, once we're doing the budget and we have that found money in the month, what are we going to do with it? Well, we work a plan called the baby steps baby step one the first thing you would do is set a thousand dollars aside do you have any savings um i did but i just used them up after being uh laid off here a month ago so just uh working the oil field is kind of uh right do you have any savings today? Right now, no. Nothing. You have zero money. Well, I have enough for this month's rent, and I will be on unemployment soon. So I will have enough to cover basic expenses. When will you get back to work?

Within a month or so. Good. Yeah. Okay, so when we get back to work is probably when this is going to start. You may be in survival mode until then, right? Yeah, it's beans and rice kind of thing. There you go. Okay, so when we got a little money in that budget, a little room in that budget,

the first goal is to set $1,000 aside as a starter, beginner emergency fund. Then the next goal is going to begin to pay off your debts, to become debt-free. And to do that, we recommend a process called the debt snowball. And that's where you list your debts, smallest to largest. You pay minimum payments on everything but the little one, and you attack the little one with a vengeance. When that one's gone, then you attack the next one down. When that one's gone, then you attack the next one down.

And every time you pay off one, you've got more money to attack it, and you have more hope because you're actually making progress that's your first two baby steps and that'll get you started in the right direction denise is on the line in new york hi denise welcome to the dave ramsey show hi dave i'm really excited to talk to you thanks for taking my call my pleasure how can i help? My brother introduced you to me, and I'm very grateful for that. Cool. So I just wanted to say that. I have made some movement through Baby Step 2, trying to use gazelle-like intensity,

but I've only paid off about $30,000 in a year. That's pretty good progress. Well, my question is, I moved about a year and a half ago from Columbus, Ohio to Buffalo to be with my partner. And I've been living in his house for about a year and a half, haven't had to pay mortgage or utilities. I'm close to paying off all of my debts. And I'm wondering, because you say that, you know, unless you're married, you shouldn't share any debt. Should I help him pay off his mortgage? No. When he doesn't pay off his mortgage? No.

When he doesn't have that much left? No. It's not your mortgage. He's your roommate. But it helps our relationship, and I haven't... No, it doesn't. He's your roommate. Even though I'm not paying rent?

He's your roommate. Legally, you have zero rights to this house. You're paying off somebody else's house. I can give you the address of a whole bunch of people that would like you to pay off their house. Okay. And that would be stupid. So once I pay off my debt, I should just kind of do my own thing and not... You are not married.

When you're married, you start acting like you're're married i'm worried that i may never be married well that's your decision and his decision i guess but if you know but you you can't you you can act like you're married if you want to move in together that's your decision okay but legally you got zip and you're just you would be, it would just be naive and silly and dumb to pay off someone else's debt. Now, if you get married, it changes the whole thing. Not if you get engaged. When you get married. Because some of these people have been engaged for 10 years. They don't know how to paint or get off the ladder.

So, I mean, you got to decide what you're going to do here. But, you know, if what I would suggest is that you guys start talking about. Now, this is old. This is Uncle Dave talking to you. Okay. You got to start talking about getting married. You know, the old fashioned thing we would have said back in the day was he needs to make an honest woman out of you. Have you ever heard that saying?

Now, that's an old saying. It's an old southern saying, probably. You probably would have never heard of that in New York. All right, Christina is with us in California. Hi, Christina. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call.

I'm so excited to talk to you. You too. What's up? So I just had a quick question for you. My husband and I are really big fans, and we listen to your podcast all the time. And I recently put my resignation in at my job to go back to school full-time. Cool. What are you going to study?

Social sciences, hoping to become a teacher. Good. Good for you. Yeah, thank you. So we have about $30,000 in savings, and we don't have any debt. And our savings includes our emergency fund. And so I also have about $2,500 in a traditional 401K. So I was just wondering if you would recommend I roll over my 401K into a Roth IRA after I quit.

I would roll it into a traditional IRA unless you want to just pay. If you want to roll it into a Roth, unless you want to just pay. If you want to roll it into a Roth, you can. You're going to pay taxes on it when you do that. So you're going to create, you know, 500 bucks in taxes or something like that when you do it. You probably afford to cover that. But since it's small, if you want to go ahead and make it a Roth, that'd be okay. But at least take it with you. Yeah, I always take a 401k with you when you leave your company. And if you have a retirement plan that you're allowed to roll, and that can be anything, a TSP, a 401k, a 403b, a 457. If you're allowed to roll it when you leave your work, roll it into an individual account.

Because you've got much more control over it. You've got much more options to pick from. You're going to do a better job managing it and maximizing it. In this case, it's not a ton of money, but I'd still do it anyway. It's good practice. This is The Dave Ramsey Show. We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives.

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That's linkedin.com slash Ramsey. Terms and conditions apply. Allison is in Virginia. Hi, Allison. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Great to talk to you. You too. How can I help?

So me and my husband are kind of at a job opportunity crossroads. So basically, long story short, we have a little over $150,000 left on our mortgage. We have $77,000 in consumer debt, and our household income is about $115,000. And so basically my question is, my husband has gotten an opportunity to move basically up north, like to the northern part of the state, about a few hours from our family. And the jump would be from about 70,000 a year to 125 a year or just to self. And so he's wanting to take that. And I have a two-year-old and we're wanting to build our family. And I'm just not thinking that that's the best plan only because he would be away Monday through Friday away from us and be home

just for the weekend so i'm sorry why would you not move up there so i did ask him that and he did not really provide a good um answer he just said um he would want to just come home on the weekends i mean that was really really my only solution to him doing this. Yeah, I wouldn't do that. I would just move. There's no reason not to move. It's closer to your family, and you would be with your husband. Why would you not move?

So it would be further from our family. So our nest egg, where we are now, it would be about two hours from our house. No, you would sell your house. Is this not a permanent job? So it is. However, the cost of living in the northern part of our state is significant, and so that's the reason for the increase in the salary is because it's near D.C. Yeah, the cost of living is not that much higher.

Real estate is higher, but the rest of the cost of living isn't that much different. So the only question is real estate would be higher. So what would your home sell for? Probably as is, maybe $150,000, $150,000. And you owe $150,000? Yeah. Okay, so you don't have any equity there. So you're going to move up there and rent and he's

making 70 he's going to almost double his income yes yeah what's he do for a living it okay and um and so your family is currently around where you are now they are not we we don't have that luxury both of both sides of our family are in two opposite directions, about an hour and a half difference. And you would be moving further away? Yes. But you're already an hour and a half away, so you'd be two and a half hours away. Yes, and we actually have moved to this area. We lived there about two or three years ago, and we moved from there because we didn't like the area.

I don't understand. You didn't like the area, and you moved away, and now he's wanting to go back. Because of the money and wanting to speed up our debt snowball. That's his only reason for doing it. No, I would not do that. I would not separate him from his family as a career move, as a career decision. Take your family with you or don't take the job? That's exactly right.

Yes, that's my thought. That's what I would do. Either you guys as a family say, this is a smart move for our family across the board. We make more money, and we'll sell our house, and we're going to lean into, rent, lean into the $77,000, knock it out. And you're going to get your job up there if you have a job now or whatever. And you're already apart from your extended families anyways. Two hours or three hours is not different than one and a half hours. You're still not down the street.

So it's not like you run over there to eat dinner with them or something now. So it's a trip to see your family. So dinner with them or something now so you it's a trip to see your family so it'll still be a trip to see your family but no i'm not i'm not sending him um up there monday through i i wouldn't do that i i just i i think the tax on your family is not worth it um it sounds like this is a temporary thing he wants to do anyway and then he would quit it after a couple years and if that the case, he just doesn't need to do it, period. If you're not willing to invest into the long-term career aspects of it, then let's find a different thing to do in a different place. One of the two.

So thanks for the call. Jake is with us in Colorado. Hi, Jake. Welcome to the Dave Ramsey Show. Thank you for having me. I got a question for you, Dave. Okay. So my wife and I, we bought a house out in Colorado three years ago, paid $307,000 for it.

We've been torn at the notion of possibly moving because the market right now here is just going crazy. And our house is appraising for roughly $515,000. And we've been torn from the idea of moving across the country to like Florida or Georgia to where the housing market's so much lower, we could basically pay everything off, be debt-free, own our house in our mid-30s. But the question I have is, is it something, is that a good idea? Or because the market in Colorado is so crazy, do we hold out to see if the house gains more value? Because I would be leaving my job and starting fresh. You know, no idea what I'd do down there yet.

But being debt-free and my wife works from home, I mean, money really wouldn't be a worry as far as her job would pay for everything. But I'm just worried if we're going to be missing out on getting more money out of our house. You need a better overall plan. Okay. I don't mind you moving and selling your house but you need to have the other components of your plan figured out like what do you want to do with your life and where do you want and where do you want to live yeah and then we start this is all being driven by you got this hyped up thing about the particular real estate market you're in you do

not make the decision based on that alone okay cashing in and running off somewhere and no plan no no no we're not doing that now if you say hey our family is in the georgia area we love georgia we've always wanted to live in georgia uh i can get a job there you go get you a job there uh you know and your career there is going to be fulfilling and it's going to grow and you can do what you want to do, yeah, then sell and make the move. That's a complete plan, a holistic plan. All the different elements are touched. You're only looking at one variable in your whole life, and that's housing price. Yep.

You've got to get the whole thing together. Yep. And the house right now, I mean, we love it, but we had a family. You know, we bought a house to have a family, a big family. We were only able to have one kid to where we don't need a 3 000 square foot home anymore and i said we would be in our early 30s and everything be paid off credit cards house i mean would own everything that would be nice right now that would be nice but we're unemployed and we live in a place we don't like no that wouldn't be nice got you got so you know it needs to you need to touch some of these

other bases and i think you could probably execute your plan you're willing to leave and cash in pull your chips off the table you know and let's and and it's gonna it's gonna leapfrog me forward if i move to an area where real estate prices aren't nutto you know and if and i get your concept but put the other pieces to the plan and then it becomes a really good plan you're not there yet you got some things to add to the equation to make this fun hey thanks for the call well for some of us summer means a lot of time in the car whether it's a road trip or driving the kids to soccer practice before hitting the road it's important to make sure you have the right coverage that meets your needs our independent insurance elps not only will make sure you have the right insurance for your car i'll also find you the best deal saving you money in the process

you know a lot of people save five to eight hundred bucks when they call these independent agents and they shop if you haven't shopped you ought to shop doesn't cost anything to shop yeah you may just be blown away that the people you've been buying insurance from have been charging you too much yeah to find an insurance elp someone that we trust that has a heart of a teacher and will help you shop go to daveramsey.com slash ELP and click on insurance. It makes a big difference. I got a tweet the other day that asked me, Dave, what's the difference in a State Farm agent and one of your ELPs? One of our ELPs will get you a better deal, for one thing. State Farm is nationwide.

These guys are what are called captive agents. They work for one company. One company only. That's it. And they can only price you one company. An independent insurance agent or an independent insurance broker shops among a bunch of different companies and gets you the best possible deal. They work for you. They don't work for a company. Ah, there's a big difference. This is The Dave Ramsey Show. You know, I get asked all the time, at what age should I buy life insurance?

Let me be clear. If you have a family, if there are people depending on your income, now is the time to have term life insurance. I don't care if you're 20, 30, 40, 50, or whatever. Your age is less important than your financial situation. If you have debt and a lack of savings, it makes no sense to risk your family's financial well-being based on the cost of a term life policy. Term life rates are just plain cheap,

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to deal with this. That's zander.com or 800-356-4282 jack is with us in Pennsylvania. Hey, Jack. Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing? Better than I deserve, man.

How can I help? Well, I think I might have gotten myself into this situation, and I might be facing bankruptcy. I just kind of stumbled onto you and your website, and I'm afraid it might be too late to kind of jump on board and get on with your program, but it's kind of a two-fold question. I know that you and your past have filed bankruptcy. How do I morally deal with that decision, and how do I decide if it's something I could do? It might, as I said, be too late for me. I had a senior program a couple months ago, but I'm at the point where I'm behind in my mortgages. The credit cards are past due, and I'm in a mess. I'm sorry.

How old are you? I'm 46. Okay. So did you lose a job, or how did you get in the mess? I didn't lose my job. My wife, she lost hers. She has some health problems, and we also have some medical bills. And then I have a son who has some addiction problems.

So you've been funding some of the help for him? Yeah, it's every day with him. How old is he? He 16 16 okay oh okay well i'm sorry i'm like you said i've been there and it's it's a no fun no fun situation so um first let's look at uh your your situation let's see what we can maybe see what we can figure out and I'll walk with you for a second here. So how far behind are you on your house? Three months behind on the mortgage. And how much is your mortgage payment? With the taxes and escrow comes out to roughly $1,900 a month. Okay so $6,000 brings you current. Yeah. Okay.

And what else are you behind? Are you behind on your utilities? The utilities are current. I'm behind on the credit cards. Actually, my son, I caught him stealing from my credit cards and making some purchases, so I didn't know if I could dispute them, but it's mostly just the mortgage and the credit cards. Okay, that's it. How much credit card debt do you have?

Probably about $17,000. Okay, all right. How much do you owe on your cars? The cars, actually, we have an old Beater minivan, and I drive a work truck, so we don't owe any car payments. Okay, so cars are paid for, and they're not worth much. Both cases, right? Right.

Okay. All right. Do you have anything of value? I really don't have any emergency savings or anything. We were very, like I said, I just. Do you have an item sitting around that we haven't talked about? I mean, I'm sure we have some things we can get rid of. Okay.

Is there a... There's not a camper in the backyard. There's not a classic car sitting in the garage. There's not a... I don't know. I mean, some item like that that's sitting around you're not thinking about but is worth some amount of money? No, not necessarily. Okay.

And what do you make a year? I make $67,000. Okay. And how long has your wife been out of work? She's been out of work two years, but she's on disability. She brings home $1325 a month. Okay, so another $15,000. So that puts us at about $85,000, give or take.

Right. Your house payment's pretty high. Yeah, the thing is I have a great interest at $3.875. Your house payment's pretty high. What's your take-home pay between these two pay incomes i bring home roughly about 900 and like my wife gets paid monthly so like i said that's 1325 and you get paid 900 how often twice twice a month? No, that's every week. No, I'm sorry. Four times a month. Okay, so

you're bringing in four and it's $5,300 and you have a $1,900 house payment. That's pretty steep. But I do have a 401k and I have $150,000 in that that I've had for the last 20 years. Here's what I would

say. You're not bankrupt. You're just scared and tired. Okay? So here's what happens in bankruptcy. Your credit cards get paid nothing. Okay? So what I would do to start with is let's just set them to the side for a minute

and pay them nothing. Okay? For right now. I'm just going to pay them nothing for a minute because we've got to get your house current. And so they're not getting any money. They're not getting any money for a while. I'm just going to pay them nothing for a minute because we've got to get your house current. And so they're not getting any money for it. They're not getting any money for a while. Okay.

And you've got 401K coming out of your check, don't you? Yes. Go stop that today. How much was your tax refund? This year it was $3,700. Okay. So that means $4,000 a year too much is coming out of your check. $300 a month in your case needs to be added to your check.

Okay. So go add $100 a month to your take-home pay and stop your 401K. Temporarily. This is all temporary. The house is on fire. We're trying to keep it from burning down, okay? Okay. Then we're going to get it from burning down, okay? Okay. Then we're going to get you on a written, detailed budget.

And no one buys anything at your house unless it is on this budget. And here are your priorities on the budget. Okay. The family eats. You buy food before you do anything. Agreed? Yeah, that's rough. My son son he gets very violent abusive he's he's hard to deal with well the family eats you have to deal with him because if you don't deal with him he's not going to be able to function in society and your family is

going to lose everything because a 16 year old is abusive i know and that's i can't kick him out because he's not a great team but no i'm not taking him out i was buying food at the grocery store and cooking at home we're not going out anywhere your house is in foreclosure right you don't need to go out to eat going out to eat it's a luxury i have to be honest with you if i don don't give these kids, especially my son, the things he wants, it's a living hell. He destroys the walls. So is homelessness. I've tried to explain it.

He's a monster. Okay. You're not going to be able to fix your financial situation until you're ready to face that right i understand bankruptcy is not going to fix that bankruptcy is not going to fix your situation you're going to be right back in the same mess because no landlord's got no landlord's going to put up with your crap either right you're going to be homeless if you don't deal with this and so i'm sorry but i mean what happens and what happened to me when i went bankrupt was i um i started realizing that debt is not my problem it was the symptom

of other things going on in my life and that's the case at your house debt is a symptom of everything that's going on so i'm not a family therapist i don't know how to tell you how to handle this i raised three teenagers they all survived it barely um i did pretty good but it was pretty tough on them um and so but i'm an old school parent and i don't know how to deal with the kind of stuff you're dealing with i truly do not know how to advise you on that i'm sorry but you you're going to have to put some boundaries on your family and you're going to have to i don't you know some people are going to hear no around there or you're going to lose your house and then when you move into the next place the landlord's going to kick you out

and then you're going to be living in your car bankruptcy does not solve any of that there is no form of bankruptcy not a chapter 13 not a chapter 7 that will allow you to live in a place and not pay the bill there's no such thing it doesn't work that way so you have to pay the bill somewhere and that means that someone's not going to get something they want and so you're going to have to set those boundaries sir this is about being the daddy now you're the daddy and this is what the daddy gets to do so i'm sorry uh i know it sounds tough and i know i i know i don't understand all the things you're facing i don't grasp it um but you're going you do not have a choice. You have to deal with this so that you can get your house payment caught up. And if you do the stuff

I was beginning to lay out, you'll be able to catch this house payment up before they foreclose. It's really your best option. And then you can circle back around and work on these credit cards later. Cut them up, close the accounts, and begin to negotiate them and work them off. But your biggest issue was the ending part of our conversation. By far. That's how you got here, and that's how you'll get out. This is The Dave Ramsey Show. Our scripture today, Proverbs 4, 6 through 7. Do not forsake wisdom, and she will protect you.

Love her, and she will watch over you. The beginning of wisdom is this. Get wisdom, though it cost all you have, get understanding. Interesting that in the Proverbs that the pronoun for wisdom is female i love that yeah in my friend's book the shack he has person has uh people assigned to some of these things in that storytelling process and wisdom is a beautiful woman in that storytelling process, and Wisdom is a beautiful woman in that book. And, boy, is she. Wisdom is amazing.

Stephen Covey says, I am not a product of my circumstances. I'm a product of my decisions. Whoa! That's some non-victim talk right there. All right. Kristen is with us. Kristen's in Ohio. Hi, Kirsten. Hi, kirsten hi kirsten how are

you how are you better than i deserve what's up so um i have been following closely to your principles for about five months now and um i was looking for some ways to save on insurance that we paid semi-annually, and that's come up now. So we got a quote from another insurance company where I'm going to be able to save close to $800. Good. Yeah. We were offered to be able to pay for the whole year in advance and save like $123 or we can pay month to month. So the price difference would be either $157 every month or $147 if I budget it, you know, appropriately throughout the year. So I just didn't know if I should go ahead and do this all at once because it would overall save me money. Yeah, it'll save you $120 a year, which in this case is about a 15% difference.

That's kind of like making 15% interest on your money, right? Right. That's pretty good. That's a of like making 15% interest on your money, right? Right. That's pretty good. That's a pretty good deal. And I pay almost all, I think, well, not all, I pay all of my insurance annually because of that, because almost every version of insurance gives you the best deal annually. Now, there's nothing wrong with putting it on a monthly draft if you're struggling to get your budget going and you're just learning how to do a budget but the way you described all of this in great detail tells me you

are already budget queen lady aren't you hello oh i lost her okay yeah take the deal i said the words you were using and the way you described it kirsten said that you knew you what you were doing and that you have a budget and you have a plan that you're not going to your car insurance is not going to sneak up on you once a year. You're going to budget and be ready, budget and be ready, budget and be ready. And of course, that's what I do. And you get the advantage then of having the cheaper cost on your insurance. Josh is with us in Pennsylvania. Hi, Josh. Welcome to the Dave Ramsey Show.

Thanks, Dave. I appreciate you taking my call today. Sure. What's up? So my wife and I have $74,000 in student debt. I have about 14 of that. The other 60 is hers. Out of her 60, 40,000 of that is in private loans with Wells Fargo,

and they have very high interest rates. And I heard you advertising the other day about Splash Financial. I'm just a little confused about what it exactly means to refinance or consolidate, and if that would be something worthwhile pursuing right now. It's definitely, if you've got a high, what's the high interest rate? What's the rate? 12, 13%. Yeah, I mean, if you can get seven, I would consolidate.

As I said in the Splash ad, the only consolidation loans I do recommend are student loan consolidations. And Splash, if I understand correctly, can do private and public, or private and government insured. And so you ought to check with them and let them give you a quote on your particular situation. It doesn't cost anything to get a quote on it. And if you can get a better deal on the interest rate, it won't hurt. Interest rate doesn't solve your problem. What solves your problem is big, large payments, right? Right.

And so, you know, tens of thousands of dollars going at this mess, cleans up this mess, not a small savings in interest. But it doesn't hurt anything to save some in interest while you're at it. So, yeah, I would check with them, and I'd let them give you a quote for sure. Hey, man, thanks for the call. Appreciate you joining us. Maria is in the Ramsey Baby Steps community. My brother-in-law is getting married in Puerto Rico.

I want to just send my husband to the wedding and stay home with our three kids. But my husband wants all of us to go, which will easily be $4,000 for the whole trip. We're just starting Baby Step 2. We have $38,000 in debt. We can cash flow it if we pause Baby Step 2, but I'm wanting to send that money to debt. What do we do? Get somebody to watch the kids and you two go,

and that will cost you about $1, 1500 and uh that's what i would do but uh listen missing someone's wedding uh is a big deal uh and your brother's wedding is a big deal and so you're not you're you can't if you miss this wedding um you're going to be remembered by that family for having missed this wedding. So, and keep poking around and see if you can't get a better deal on air than you've gotten. I think you can get to Puerto Rico and back cheaper than $1,500 for two people. That sounds a little high to me. And $4,000 for five sounds high to me. I think you're being melodramatic and trying to make the case in your side,

and you need to figure this out and go on the cheap, cheap, cheap, cheap, cheap, cheap, cheap, and the two of you go and get somebody to watch your kids. Call in a favor or three and make this happen. That's what I would do in this case. David is next. David is in this case. David is next. David is in New Mexico. Hi, David. How are you?

Good, Dave. Thanks for taking my call. How are you doing? Better than I deserve. What's up? I'm a pastor, and I have student loans. I earn about $45,000 a year. My school loan, it just turned into $80,000 because of the interest,

and I'm on the PSLF, the public student loan. But I'm, okay, so I'm four years into it, and I just saw the thing where only 96 or so people even got accepted. And so I'm wondering at this point, should I stick with it for another six years or should I bail on it? I'm 50 years old and I want out of it, but I don't earn a lot of money. You're going to have to be a bivocational pastor and pick up a side gig. 82% of pastors in America are bivocational now.

And so you've got a side gig coming, pastor, to clean this mess up because your ratio of income to the debt, the hole that you're in with the shovel you have is not tenable, is it? No, the shovel isn't big enough is what you're saying. Yeah, so you're going to have to increase income for a couple years doing something else, adding to this equation. Are you married? Yeah.

Your wife works outside the home? She works part-time and brings in a little bit to help us. You got children at home that she's watching? We have two kids and we both watch them. What age? One of them is eight, the other one is six. Okay.

I just think that between the two of you sit down and go, okay, for a period of time here, we're going to have to do some crazy stuff to create an income to knock out this $80,000. Because, you know, you cannot depend, as you've recognized accurately, you're not going to be able to depend on the student loan forgiveness program. It's just not reliable. It's not working for people. People are not, you know, they're not getting out of them.

And it's just horrible that people have hung their dreams on a government program that didn't work. Oh, wow. Go figure. Hey, thanks for the call. I'm sorry, Pastor. I wish I had better news for you. Open phone is at 888-825-5225. Lauren is on Twitter.

My husband and I have a seven-month-old daughter. We're on Baby Steps 456. How do we know when to start a college fund and how much to put in it? You'd start it on Baby Step 5 because Baby Step 4, 5, and 6, you run simultaneously. So it's now is when you start. How do you know how much to put in there? Well, we start doing it. If you want to get real nerdy about it, you can start saying, I'd like to send them to this school.

Find out what the school is now, cost. And you would add inflation to that of about 7% a year, and then that would tell you how much you need to save, or how much your target is, which would then tell you how much you need to save. Click SmartVestor at DaveRamsey.com. SmartVestor Pro can help you get your college plan going. We're not in that business, but that's who we recommend. That puts this hour of the Dave Ramsey Show in 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. 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.