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Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by my good friend Ken Coleman. This is your show, America. We are here for you to help you take the right next step with your money, with your work, and with your life. The number to call is 888-825-5225. I'd be happy to chime in on your money questions. And Ken, you're welcome to call us.

He is the work career purpose guy. If you feel stuck, you feel like you're not doing what you want to do. You feel like you could be making more money. You're not sure how to have that conversation with your boss or your coworker. Ken is an expert at walking you through those predicaments. And so we're happy to take your call. 888-825-5225. Matt joins us up first in Raleigh. Matt, what is going on, my friend? How are you doing today?

Good. How are you? Good. How can we help? So me and my wife, we've been together for about five years, married for two. We just found out a little bit ago that we are expecting, and she's about 15 weeks. So we've kind of made some changes in kind of our spending habits and being able to save up for when our child is due. One of the things that came up was

uh saving for college which i'm able to provide that i'm in the military and i'm actually going to be passing along my 911 gi bill which is a full ride scholarship for that child great one the other thing that the other thing that we were looking at was a custodial brokerage account when the child is born me and my wife have been kind of talking about it

doing $100 a month until they're 18. The only thing is, is my wife is concerned that much money when our child turns 18 is going to be too much. I kind of did the math, $100 with a 10% rate of return. By the time they're 18, they'll have $53,000. Just trying to get an insight if that's too much money or not.

Well, I personally don't think so. If you just look at the inflation and what things could cost 20 years from now, I don't think it would be a waste to be investing for your kid's future, whether it's in a custodial brokerage account or a 529 plan that has tax advantages or an education savings account. Yeah, so we looked at the 529 plan.

We think we aren't going to go that route just because I'm able to pass along my post-9-11 GI Bill. It's a full-ride scholarship, and it includes housing as well. Oh, great. So all expenses are 100% covered. And what would the custodial brokerage account be for then?

Uh, more of just having a savings account. Uh, from what I looked at, they, once they turn 18, that goes into their possession and they can do whatever they want with it. Um, I, me personally, I've never inherited anything, uh, from my parents, uh, all the, uh, income and savings that I have. I've, uh, me and my wife have done it together. And so it's just more of a way to get a headstart for our child. Um, that way, uh,

they don't feel like when they turn 18 that they're on their own. Well, I don't think you could have too much then. I've never heard a parent go, well, they had too much to set them up and get the car and get the down payment on the house. I think whatever you put in there is going to be an amazing blessing, and you guys have done a great job already. Gotcha, gotcha. So $100 is not too much. It doesn't sound like it's putting you guys out to put away $1,200 a year, is it?

No, no. Me and my wife, I mean, we make a little over $90,000. I already have $38,000 in a Roth IRA. Are you doing 15%? $30,000.

So I'm doing 10% and military matches 4% or 5%. The only difference is my 10% is Roth and the 5% is traditional. Yes. Okay. I would still up your percentage to 15%. And so if you're investing 15% of $90,000, you're putting away some money for college, then you're attacking the house, that puts you right in line with these baby steps that have helped so many people build wealth.

Gotcha. So if you can still do all of that with $100 left over to put away, I think your kid will be very happy at that surprise. And I think you're going to raise a great kid that's not entitled. Because that's always the fear, Ken, is you go, here's a pile of money, don't ruin your life. But I think if you raise your kid the right way with the right mindset around college and adulthood, they're not going to ruin their life. They're going to say, thank you for helping set me up for success. And to that end, Matt, I don't know that I would reveal to the child that

that this money is coming, I'd almost make this a surprise on their 18th birthday and raise them in a way that they don't know that that money is sitting there. And so they develop grit. They develop hard work. They don't have that sense of entitlement. That would be my only thing. That would be a great, awesome surprise.

But I would not reveal it early. Because, you know, listen, who among us doesn't change our gear? If you know $50,000 is coming up, why would you work that part-time job for three years? What do you think about that? In fact, I didn't have a strong opinion on that until you said surprise. You said it would be a great surprise, and that made me think. I don't know that I would tell the kid.

Well, there's a few schools of thought. Dave did the 401 Dave plan with his kids when it came to saving up for a car. He would match. So I think it's good. But that's for the car. I'm talking about this is like, they don't have access to their 18. Yes. So presumably we got the car beforehand. Yeah. What do you think, George? I like to hold off on it.

There's no reason to. I mean, they're going to avoid debt. And so it's okay to have a string attached and go, listen, this is the caveat is we're not touching debt. You will not take out any debt. If you do, the situation is going to change. And right now with college, they're not going to.

Well, yeah. And that's the thing is, I mean, the college is paid for now. If we have a second kid, all right, then only half their college is paid for because I'm going to be splitting up evenly. And if we do have a second child, um, that, that's what I was kind of telling towards my wife is, I mean, if they have $50,000, they'd be able to go to college and not have any debt and possibly even leave college with some of that money still left over. Hmm.

Yeah, I mean, I think you're making the wise decision because you've got the GI Bill. And the cool thing is with a secure 2.0 Act, you can roll over a portion of funds from a 529 into a Roth IRA over time. And so it's not a, quote, waste. A lot of people just go, well, I'm not going to save for college because what if they don't go?

What happens is the kid doesn't have the money to go. They take out six figures in student loans, and then there's trapped with payments. So I love that you guys are thinking through this in a really wise way, Matt. And I think this kid's obviously going to go to college debt-free, but the better thing is they're going to learn money management at an early age. Yeah, and that's the goal. That's the goal. I love it. Well, hey, thank you for your service, Matt. And what an inspiring story to see at least one more student becoming a student without a student loan.

It is possible. And sometimes it's the GI Bill through the military. It's one of the great benefits. If you're a service member and you're able to go to school debt-free or your children are able to go to school debt-free and not have that burden of student loans, what an incredible way to set your kid up, Ken, to not be in chains when they graduate. Because then no matter what job they have, they feel broke. That's right. Because they got payments all around them. And I'm one of these guys that's holding out hope. I'll be misty-eyed when the day arrives, George. I think it's going to happen.

When we see the current higher ed situation just completely broken up and we see the cost of getting educated back down to way more feasible, true ROI on the amount of money people are spending and we see the student loan crisis gone forever. That's my hope. Amen. It's supply and demand. Let's just stop paying these colleges exorbitant amounts of money. This is The Ramsey Show.

This show is sponsored by BetterHelp. Hey good folks, the back-to-school madness is upon us. It's hitting us right now. We got travel and work and all these forms to fill out now and sports to travel to and on and on. My family's schedule is so packed and we haven't even begun talking about things like exercise and date nights and counseling and church and home projects. And those are the things that make our life even worth living.

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Well,

Welcome back to the Ramsey Show. I'm George Camel, joined by Ken Coleman this hour. The number is 888-825-5225. Don't be shy. Don't be scared. Give us a call. We'll walk you through. Why would you be scared of us? People are frightened, Ken. Very intimidated by us. Well, because of the live, you know, kind of on-the-air business. But if you look at us two, I mean, you couldn't be less scarier of two guys. But if you can't see us, you only hear us, you think, wow, these guys must be intimidating.

No, I'm pretty sure that when anybody hears you, they're not intimidated. Fair point. My baritone maybe, but yours? My tenor? Kind of a mousy tenor. Kind of a honey-soaked tenor, if you will. Oh, honey-soaked. I like that. Dude, that's good. Well, Jack's not scared. He called in. Jack is not. Let's see what Jack's got going on. From my hometown. Oh, yeah, Boston. Boston, Massachusetts. Let's go. Jack, how you doing? Hey, doing well, guys. Thanks for taking my call. Sure. How can we help?

Um, had a quick question here. I'm trying to figure out if I should sell or keep my condo, my primary residence where I'm at now. I recently found out the condo association hasn't been really managed that well over the past 15 years or so. Um, I've been here for about eight, but I just found out that, um, there's about $3 million worth of damages on the property in terms of like a roof that need to be replaced and siding. And, um,

and things like that, possibly mold, but they're not sure yet. There's about like 15 buildings on the property that need to be, you know, fixed and everything and repaired. They did have a guy come on site and do a full evaluation assessment of the property and documented all the damage that he found, but I'm just

I'm just trying to figure out how much of an increase in an HOA fee is too much to the point where as an owner, I should probably think about selling my property or just saying, but considering how much home prices have appreciated over the years and the high interest rates with mortgages, and I would certainly be taking on more debt than the current mortgage that I have now, which is at about $120,000.

$100,000 that I owe currently. So $120,000 on the mortgage, and once these damages are divvied out among all of the homeowners, what do you think it'll be? Right around $30,000 if I were to pay it out of pocket, up front. And what is the stipulations? Can you just pay it over time with no penalty? But you can't sell the condo without paying the fee.

Right. I'm sure that's probably how it works. They're not there yet. They still need to get quotes and everything. Like that $3 million mark is just the preliminary company that came in. They want to get quotes from three others before they take action. Yeah. Oof. And so what's your current HOA fee?

Right now, they just bumped it up to 500. And next year, so like by the end of this year, hopefully they should have a plan in place to repair the damages. That's their goal, the board. And they had like a projection increase over the next 20 years. It would be a 20-year loan that they would take out most likely to do the repairs. And the HOA would max out around the 15-year mark, so somewhere around like 20%.

$30 something. It would be up around like $725 it would cap out at. But next year, it would be around $600. But this year, we're at the $500 mark. Got it. So we're talking about an increase of $1,200 a year, potentially, and then eventually $2,400 a year plus. But that kind of caps out. You're not going to be paying $2,000 in HOA fees.

No. Okay. So that's what we're talking about here. I just like to put numbers on it to give me some real facts because this does stink and it happens all over. And you're right. A lot of HOAs are not managed well and things like this happen and it gets passed on to the homeowners, of course. So not fun to deal with, but this is part of life as a homeowner. You get to deal with. So what is your mortgage outside of the HOA fee? What is that up to? Like the monthly payment? Yes. Okay.

It's about $888 principal and interest. Okay. And then what is your take-home pay after taxes per month? Take-home, I think I'm right around maybe $3,300. Okay. So as a percentage of your income, that mortgage plus the HOA, it's taken up a good chunk. Right. You know, when you look at $1,388 out of $3,300, it's 42% of your take-home pay right now is going toward this house.

And so as that goes up, you know, it could creep up to 50% of your income is going toward this house, which is then going to be hard to invest for the future, hard to live your life. Are you feeling that pain right now?

Not so much right now. I'm pretty frugal. I try to save as much as I can. But I'm definitely concerned about the future, especially as the HOA fee creeps up to $600 by 2025, potentially. Yeah. Well, here's the thing. Once you put numbers to it and you add this into your budget, the extra $50 a month they're going to start charging is not going to crush you. That's $600 a year, correct? Correct.

So it's not fun to pay the extra 600 bucks a year, then 800 bucks a year. But it's not it's not worth let's go ahead and sell the condo today because you might have to deal with more HOA fees and higher HOA fees elsewhere if you went and sold and bought another property, especially in the Boston area, because my brother's got a condo in the Boston area and he knows this life well. These are some old condos that have not been taken care of very well.

So Jack, if I'm in your shoes, I'm going to hold off is what I'm telling you right now. It's not worth it to save 600 bucks a year. I would rather you go make more money. So how can we get your income up to where this isn't as big of an issue? What are you doing for work? Yeah, I work in at a health insurance company. Okay. How long you been there? I've been there about two years. Okay. Are you making around 50K? What is the actual gross salary?

So the actual gross salary, and I might have messed up the take-home pay figure there after taxes, but I gross about $80,000 a year. Oh, great. That's good. What's promotion look like for you?

That's a little bit uncertain at the moment. The company is kind of going through a restructure. So I might be at that salary for a little bit while longer. Well, and again, but you're a young man and you've got plenty of option, plenty of energy. And to George's point, at this season of your life, that gig, you know, the gig economy right now where people are using their professional skill set, which you have plenty, to make money on the side, you know, contract labor, you know,

Look, you know, that's the way you get more margin right now. And if you want more margin, go get it. You know, you may get to a certain point where you go, okay, I'll do it for six months. I'll do it for 12 months. I'll do it for 18 months.

to save X amount of dollars, it's not a bad idea if you've got the margin relationally to be able to do it. Yeah. And Jack, when you do, if you did choose to sell, you got to also think about the fees that you're going to pay to sell it, the fees you're going to pay to buy a new condo, moving costs. So there's a lot of other figures to factor in that I think would outweigh the extra 600 bucks you're going to pay in the next year.

So down the line, if you want to move because of other reasons, you can move. But I would stay put for now. But what do you think is going to happen on the other side of the improvements if he stays? And I agree with you, he should stay. But I think he benefits. I mean, sure, he's going to pay more in HOA. But then, you know, if he sells it down the road, I would imagine these improvements are going to help his sales price. You would hope. One would hope, especially in the Boston area. And I'm sure even in the eight years, Jack, you've been there, the condo is appreciated. Correct? Correct.

Correct. Yep. So that's a win right there. I like, that's the other thing I was going to mention. I like the benefit of the improvements. If you hold, like George says, and I think George is right for every point he makes, but I'd add that to it. You're going to benefit from that. You know, think of it as an investment in your resale value.

And even paying the $1,300 total with HOA and the mortgage, that's still pretty reasonable for a metro city like Boston. Incredible. To have your own place. So you've done this really smart, Jack, and I'm proud of you for living on less than you make. That's the key to this whole thing. Do you have any debt? I don't, no. I just paid off $33,000 over the summer for my student loans. Way to go, man. Way to go, man. How does that feel? It felt awesome. Yeah, it was pretty sweet. I love it. You got an emergency fund as well, three to six months? Yeah.

I do. Yeah. Right. And you're investing in your retirement plans? Yep. Look at that. I have one more question. Jack, are you born and raised or been in the Boston area a long time?

No, I grew up in the New Hampshire area, so north of Boston by about an hour. Still a New Englander. The reason I ask is because you and George, both, you'd never know that you've lived a long time in that area. I'm pretty impressed with the lack of accent. We lose it, Ken. We're chameleons. We can bring it up when we want to. Give me an example. Take us to break in Boston. Bostonian. Dude, you been in the Red Sox game? Dude, it was wicked sick, dude. Poppy just smashed one to the Green Monster.

You actually have to know about baseball to finish that. I almost lost it at Green Monster. That one you've got to get for Fenway. Monster. This is the Ramsey Show.

Welcome back to The Ramsey Show. I'm George Camel, joined by Ken Coleman. And Ken and I are going to be at a brand new event that we've got coming up May 10th and 11th right here in Nashville, Tennessee, called Total Money Makeover Weekend. I know there's millions of you out there. You've been listening for a while. Maybe you're still sitting on the sidelines. Well, no more sitting around. You've got to take action.

So in just one weekend, you're going to get a crash course on everything we teach about money. We've got all brand new content, new talks from all of the Ramsey personalities, including Dave Ramsey, on budgeting, beating debt, investing, making more money, and so much more. So no matter what baby step you're on, if you're just getting started, maybe you're even at baby step seven and you're looking for ways to build wealth and give generously, this event will light a fire under your butt to keep going, to keep making progress. We've also got some special...

Things happening during the event. We've got a live Smart Money Happy Hour recording on Friday night. That'll be a blast. We've got live Q&As throughout the weekend, which is one of my favorite things to witness from our friend Ken Coleman. When he dives in with one person in the crowd, it is magic. So you don't want to miss this. Our events are actually fun. These are not boring. We've got musical experiences. Our team is world class. So early bird tickets start at just 99 bucks.

but they're going to keep going up. This is the cheapest you're going to find them. So get your tickets now, ramsaysolutions.com slash events and make plans to join us Nashville, Tennessee, May 10th and 11th. ramsaysolutions.com slash events. And we're kicking around some fun ideas, you know, that may or may not make it.

Is this you pitching to get on Smart Money Happy Hour again? Well, I've already done that. I already did that last week, and I'm not going to pitch it again. So you brought it up, but that's what people want. I knew it was ruminating in that little mind of yours. No, I've got another idea that you and I, you know, a lot of guys don't care what they wear. Their wives care what they wear. What if we had a special bonus session, you and I lead it,

couples only and we we kind of help the wives out we call it total clothing makeover and the wives will volunteer their husbands to parade on stage and we will judge their fashion and give them some tips yeah so this is good content uh we'll give them tips and then you'll help them do it on a budget this is actually good ken i start with deloney we could start with john thank you james everybody knows that guy needs a total clothing makeover i mean first of all would it kill him to dress like a doctor

I think we all have that teenager that dresses like Deloney in our lives, you know? But listen, I actually make no fun of it because you know what? The guy doesn't have to make a lot of decisions. That's true. You and I, on the other hand, we're stewing every morning. Which tall cardigan are we going to throw on this morning? Hey, I haven't rocked a cardigan in a while, but you know what? I'll do it next time we're on together just so you can take shots at it. Oh, that's fun. We have a good time. We do. We enjoy it and we're going to have a good time helping people out. Who's up next?

Well, it's time for the Neighborly Question of the Day. Oh, the Neighborly Question of the Day. That's right. Yeah, don't get too excited. This is a really good one. I'm excited to get your input. So then, Ramsey Show Question of the Day brought to you by Neighborly, your hub for home services. Neighborly.com slash Ramsey is the place to go. You can download their winter maintenance checklist completely free and full of tips to get your home through the colder months with no issues. Again, you can check it out at Neighborly.com slash Ramsey.

Today's question comes from Billy in Indiana. Ten years ago, I was destitute and owed $15,000 to the IRS. I raised my kids by myself with no contribution from my ex-wife. I followed your teachings, and I'm now debt-free with money in savings and investments. I'm retired and living very frugally, but I'm terrified of being destitute again. My weekly grocery budget is, am I reading this right, $35? I don't use the AC in the summer and won't turn on the heat in the winter. This is from Billy in Indiana.

He turns it on when it gets below freezing. Yikes. I've taken all the light bulbs but one out of all the fixtures in the house. I take three-minute showers and haven't eaten out in two years. How do I live without my phobia of being broke again? Man, this is intense. But let me just say, destitute, it's a heavy word. The kids, the youngsters don't know what that word means. There's some stories behind that.

It takes down and out to a new level, and I think that him having nothing at all so seared his conscience. Yeah. I mean, this is as much emotional, relational as it is financial. I do, and I think this is therapy. Because he has money now. I think I would get some therapy on this to be able to create a narrative that is...

uh, in opposition to the voice of fear because the voice of fear is rooted in tremendous pain, George. And so you've got to counteract that. This again, Deloney's not here, but the bottom line is this is a form of OCD, right?

And OCD is anxiety, and I'm not in any way diagnosing him with OCD, but I'm saying it feels like he's so obsessed with saving money that you're talking about $35 a week, not using the air conditioning. I've seen this episode of Extreme Cheapskates. These people do not have...

thrilling, joyful lives. They're terrified. They're terrified. And so I would start with, I think Ken's spot on here. Billy, you need to go to therapy and deal with the past. And a good start is reading our friend, Dr. John Deloney's book, Own Your Past, Change Your Future, because you're not there anymore. You're doing well now. And so we tell people to make a budget and actually look at how much margin you have and force yourself to go out and eat once a week.

force yourself to go be generous. We found that generosity can unlock something when it comes to that destitute mindset, and it will make you have an open hand when it comes to money. So I would start to give, save, spend in each area. You're great at saving, and that muscle has been flexed, but you got a flat tire when it comes to giving and spending. So I would increase both of those, force it in your budget. And the other thing I would do is get people around you. You sound like you're isolated, like you're living like a recluse.

start making some community. Get plugged into a local church. Hang out with family and friends. That's going to help you break out of this. Yeah, I agree. I mean, this is just overcoming the trauma and then beginning to get the tools to get over it. But then...

Then you got to take some steps and go, okay, what if I spent $150 a week on groceries? Is it going to tank you? No. But I think the fear is so great here that even seeing it on paper, I don't know that that's going to solve it. Stair-step it. We're going to spend $40 this week, $45 the next week until you're spending a reasonable amount. I mean, this sounds like it's affecting your health. If you're living in a 34-degree house eating literal rice and beans-

That's frightening. So, Billy, we're wishing you the best, man, but you've got to take some steps to knock yourself out of this vortex. Sorry to hear you're going through that. All right, let's go to the phones. Janice is in Orlando. Janice, welcome to The Ramsey Show. Hi. Hey. Thank you for taking my call. Sure. To give you some background, well, I'm 58 years old, divorced. I work full-time.

I have no debt. Hey, Janice. Janice, sorry to interrupt you. Could you maybe adjust your phone? You sound a bit muffled. Oh, okay. Who's better? A little bit better. Go ahead. Okay. So 58, divorced, you're working full-time.

Yes, no debt. I have an emergency fund, so I'm currently saving for retirement as well. The problem is I currently rent out a studio, and with rents increasing the way they have been, I'm getting a little nervous, and I'm wondering if at 58, is that...

Is that a good age to maybe purchase a condo? I don't want to get into a situation where the rents get too high and I'm not able to pay, basically. Yeah. No, it's a reasonable fear. The right age to buy a home or condo or whatever is when you're financially able to. And so...

I think now is a great time if you have the money and you can put down the down payment and you're able to cover this mortgage. It's no more than a quarter of your take-home pay. That's how you know you're making a right decision. But I think you're right. I would rather you have a fixed cost and pay off that house so that you can retire with dignity without these rising costs of rent weighing you down in retirement. So how much money do you have saved outside of the emergency fund?

Okay. But you haven't started on the down payment savings? Okay. I would begin there. How much money can you put away every month for this down payment now? Okay.

Is that in retirement, though, or is that liquid cash from the bank?

Okay, I don't want you touching those retirement accounts. We need to build up money outside of that with future income. And so that's what I would do. Increase your income, put that money aside. When you're ready, reach out to a Ramsey-trusted real estate agent at ramseysolutions.com. And we're wishing you the best with the homeownership journey.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman. If you like this show, be sure to check out all of the shows on The Ramsey Network, including The Ken Coleman Show, which films right next door to The Ramsey Show, which is fun. And, of course, the Smart Money Happy Hour. I co-host with Rachel Cruz and my YouTube channel. We're having a good time over there, Ken, breaking records around here. People are enjoying the YouTube content. Well, I mean, your team's doing a great job, and you obviously are really great for that quick, snippy...

You know, entertaining. You're just perfect for YouTube. That means the world. I'm being serious. Well, I've got a face for radio, and I think YouTube is the next best place for people who don't have the face, you know? You can make it as a YouTuber out there. You don't have to be good looking. You just got to be good.

That's the best encouragement I could ask for from Ken Coleman today. I like that. I think you're a good looking guy. I'm trying to compliment you here. I'm not fishing. You're what? I'm not fishing for compliments. I know you're not, but I'm just saying, I'm not surprised that the channel's doing great. I think it's fantastic. Very happy for you. We have a great team here. All right, let's get to the phones before we get in a massive fight. CJ, break this up, my friend. How can we help you today?

Hey, George. Hey, Ken. So I'm a 21-year-old, and I've just accumulated about $90,000 from a sign-on bonus for becoming a professional baseball player. And my goal is I'm just trying to maximize this money and kind of set myself up for an easier road down the line. Nice. So I just don't really have a starting point, and I just want to get some advice for what to do with this money. Congrats. Yeah. Okay, so let's talk about you said you're 19? Yeah.

21. 21. Okay. 21 years old. This is the most money you've ever seen in your life, I imagine. Yeah, it's more than I know what to do with, for sure. Good. It should take your breath away just a little bit. Not cause you to go in paralysis mode, but enough to pause and go, breathe. Have you already gotten it? I take a deep breath every time I see it. So is it in your savings account right now? It is. It's just sitting there. Okay. Okay, cool. So let's talk through your financial situation. Do you have any debt?

No, I'm debt-free. Nice. Emergency fund, three to six months? Yep, it's included within that. Wonderful. Okay, so you already have no debt and a pile of money in the bank regardless of the 90K, or is this on top of that? No, that's it. As well, I'm going to have a checking account with like my, I keep my weekly pay or my bi-weekly pay in that checking account and just use that. Great. So how much will you be making going forward?

It's about $2,000 a month going forward. Okay. Do you get also expenses taken care of or are you required to take care of your own expenses?

Yes, for the next five months at least. My living is taken care of. Two out of three of my meals are taken care of. And so I really, my only expenses right now are groceries, gas, and whatever I want to do for fun. All right. What happens after the five months? Because this is going to dictate what George is going to coach you on. What happens after that five months?

I would either have to move back. Well, right now I'm renting out a house, so I would have to either move back into the team-sanctioned hotel, or I would be set up at an apartment complex at one of our affiliates where I'd be playing. When you say set up, are they paying for it? Yes, my living can be taken care of after this next five months. Great. Good, good, good, good. All right. As well as meals.

At least two out of three, yeah. Okay. So that's going to really limit your expenses going forward, which is wonderful, as long as you have this career. Mm-hmm. Okay. Well, without getting into the particulars, he's in the early stages as far as professional baseball goes. Yeah, yeah, yeah. He's got quite a path. If things get better, I mean, you're in the minor leagues right now, I'm guessing. Is that right?

Yeah, that's correct. Yeah. So as he moves up, obviously he could get a really large contract, but as long as he's in the minors, the actual pay is not very big. Yeah. So. Right. It could be a very long journey. So I would just want to be able to back him up. So the sign-on bonus is great, but we also have to manage this well because you may end up needing some of this. That's correct. Down the line. So.

Sorry, CJ. I'm catching him up on this. That helps me. Ken is my sports historian. He helps me with this stuff. Thank you, Ken. So you're in a great place financially already. Are there expenses coming up that you know you're going to have to pay for, like a car repair or upgrading the car, things like that? A flight. I know I'm definitely going to have to pay for a flight soon, but that's $300 to $400. Great.

So the key here is we got to continue living on less than we make. We don't want to go use this sign-on bonus to just go buy a $90,000 car on vacation. What about taxes? Taxes are another thing we have to be thinking about. Is this going to be taxable income, I assume? You're going to owe 25%, 30% on? 40%?

It's already been taxed already, but I'm still learning tax and everything, so I'm sure there's something I'll have to pay. I would connect with a Ramsey-trusted tax pro at ramseysolutions.com, and they can help coach you through this to make sure, because what I don't want is you wake up to a huge tax bill that you're not prepared for that eats up all of this money. Right, right. So for now, CJ, I'm going to leave this in a high-yield savings account.

And I would continue to invest out of your paychecks. Is there some sort of retirement plan provided or are you on your own for that? I'm on my own for that. Okay. And for that, you may want to reach out to a SmartVestor Pro. These are investing pros that can help you with the investing journey. But a Roth IRA is always a great place to start when you have earned income as long as you're not above the income limit. And so you could fund one of those with this $90,000. Just get a head start if you haven't been investing at all. Okay.

And if you haven't been investing at all, so a Roth IRA is a good place to start. Roth IRA. Yes. And as long as you're, I imagine you're under the income limit right now, you could be getting close with this 90K sign on. So again, check on your growth, your adjusted gross income for the year. And if you're able to contribute to that, that's a great place to start. I believe for 2024, it's now $7,000 you can contribute a year.

And within that, the Roth IRA is just a shell, CJ. You want to actually buy funds within that. And I would not recommend single stocks. What you're looking for here is good growth stock mutual funds. And our team will send you a resource for that. I've got a video called Investing for Beginners on YouTube that walks through all of this. And that will help you out immensely as you start this journey.

But at 21, CJ, if you continue to live on less than you make, you invest 15% of your income, you never touch debt, you're going to be so unbelievably wealthy. And you're just getting started with this career.

Yes, right. So thank you all so much for the advice. I'll look into Roth IRAs. Not the single stock, but what's the other one? Mutual funds. Growth stock mutual funds. That just means a giant pool of stocks, like 90 to 200 stocks in one bucket so that you're diversified because you don't want all of your eggs in one basket when it comes to investing. Right. And CJ, you don't have to answer this. You don't have to answer this. I got to ask, are you allowed to tell us your position or would you rather not?

Yeah, I'm a pitcher. Oh, I was wondering. So, okay, what's your best pitch? What's your go-to pitch? That's a fastball, baby. That's a fastball. Yeah, the high heat.

Yeah. I know about the fastball. Do you know about the fastball? I played a little MLB 2000 back in my day, Ken. CJ knows what's up. There you go. CJ, man, that's awesome. Listen, man, we're cheering for you. Yeah. And George, let me tell you this. If CJ keeps advancing as a pitcher, we're talking. He's going to call back one day with a lot of zeros. He's going to be like, I'm buying my seventh rental property. Let me tell you, George, the pitchers make the big bucks. That's right.

I'm proud of him. Yeah, good job, CJ. Well, keep at it, buddy. Take care of your body. Ignore all your buddies who are out buying really expensive stuff because they just got the signing bonus. That's going to be the hardest part for you is avoiding the distractions. I agree. And to help you with that, I'm going to send you a copy of my brand new book called Breaking Free from Broke. There's a great chapter on investing traps in there. There's a chapter called Wealth is Patience. It's going to teach you all the stuff I just outlined. So I hope that helps you along this journey and helps you avoid mistakes.

This is the book people wish they read when they were 21, CJ. So hang on the line. Austin's going to pick up. We will send you a link to the Investing for Beginners video as well as a copy of my book, Breaking Free from Broke. All right. Honest question, George. How fast? What's the fastest pitch that you think you could even just get the bat around and touch the ball? Forget hitting it solid. You could get around on it and make contact. How fast? What's the fastest pitch?

Oh, like if someone threw a 70-mile-per-hour pitch. Yeah, have you been paying attention to what we've been talking about? Yeah, I mean, I'm going to be modest. What do you think? What's the fastest pitch you think you can hit? 40 miles per hour. 40 miles an hour. Is that reasonable? That's ridiculous. You're saying I couldn't do it. You should be able to. 40 miles an hour is not that fast. I wanted to go modest. Well, that was ridiculous. What could you hit? Could you hit a 70? I'm going to say I could get around on 70.

For sure I could get a round on it, whether I hit it squarely. I think I could still probably hit an 80-mile-an-hour pitch. We'll see. I think we should. I play a lot of pickleball. Let's hit the old diamond, Ken. Let's see what you got. Let's do it. That puts this hour of the Ramsey Show in the books. I'm George Campbell. He's Ken Coleman. We'll be back before you know it.

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Camel, joined by my esteemed colleague, Ken Coleman. Esteemed today. Very esteemed, and we are so pumped to take your calls about money, about work, about your life. 888-825-8255.

5-2-2-5. If you've got a question about that job opportunity, the job you feel stuck in, what you're really meant to do, what you're wired to do, Ken is the man for those questions, and he can expertly guide you through that. If you need to just make more income, we talk about how your greatest wealth-building tool is your income. Yes. And if you need more shovel, because you've got the big hole. You're in some debt.

Ken can help you make more money and find some opportunity for you there. So we are here for you to serve you this hour at 888-825-5225. Lydia is up first in St. Louis. Lydia, what is happening? Hi.

Hi, thank you for taking my call. I just had a question. We are, my husband and I currently have our own business. And in addition to that, he just took up a part-time job at our church. Now that he's on staff, they have offered us a free house to live in, you know, as long as he has a job. And so we do currently own a house. We've got a really good interest rate on it.

um, like 2.4%. And so we kind of hate to let it go, but we do not have savings other than a thousand dollars in emergency fund. And, um, we currently have $20,000 of debt. So we're trying to figure out what the smartest move for us would be. Is this our chance to, um, just, you know, pay off all of our debt and just kind of get it in a better situation and then just save the money that we make.

off of the sale of the home to eventually buy another home when we're in a better financial situation? Is it worth taking the risk to rent our house out without any savings? Just what would be the smartest move? How much equity do you have in the home? If we sell it right now, we would make $30,000. And that's after fees? Yes. Okay. And that would pay off your debt and give you half an emergency fund, most likely? Yes.

It would pay off the debt and we would have $10,000 left over. Okay. And I'm guessing three to six months of expenses for you guys is in the ballpark of $15,000 to $20,000 based on your expenses? It would be $30,000 probably. Okay. So it would definitely speed up your progress along the baby steps.

And I do agree with you that you're adding a lot of risk by becoming landlords here while having zero in the bank. That's going to be real stressful making that transition. And so I understand you don't want to let go of the lower interest mortgage rate, but you're just going to add stress on the other side.

Sure.

Now, this free housing, is there a stipend if you don't take it, or is it just free housing or you don't take it? It's completely free, and if we don't take it, then we just don't take it. There's no additional benefit. Got it. And does it cover utilities as well? Everything. Wow. Yeah, that's hard to pass up. Yep. I would do it. I would list the house this afternoon. That's for a part-time job at the church they're offering this?

Yes. Goodness. That's amazing. So my other question then, if we were to sell the house, are you saying that we should take the sale, like the money that we would make off of the sale of the house and put that just directly toward debt? Or we're projected to pay off our debt by the end of this year as is, or should we just keep paying our debt as we are and then after that? Yeah.

As soon as that money hits your account, you're never going to see the money, essentially. It's going to go towards the debt and whatever's left is going to go sit in a high-yield savings account as your starter emergency fund as you continue to build it. Yeah. And Lydia, let's walk through the numbers you just gave us. If you pay the $20,000 off...

You still have $10,000. You said you're on track to pay the $20,000 off by the end of 2024, and you said $30,000 was the number. So that means we're debt-free instantly, and then by the end of the year, we have a fully funded emergency fund. That's the order. That's the way that George and I would do that. Do you understand? Yes. That's great. You're getting to freedom and stability faster by doing it this way.

Okay. And I don't think it's worth the risk of renting this place out. You're not going to make much spread probably because of the mortgage and what you're going to rent it for on top of one thing going wrong and you guys can't cover it, putting you further into debt. Because the first time they do something or you can't prove they did it or something happens, guess who pays for that repair?

Of course. Sell the house immediately. Immediately upon deposit, as George said, pay off the $20,000, put 10 in savings, and keep going on the debt process.

plan, except now that's going into savings to get us to three months of expenses or three to six, whatever it is. And then now you guys are rocking and rolling and just keep stacking cash in the form of baby step four. Once you get to that stage, while you're getting that free housing, come on. This is a great situation. All right, let's go to Alexander in Dallas. Alexander, welcome to the show.

All right. What car is this?

It's a 2015 Subaru Forester. And have you checked Kelly Blue Book private party value? Yes. Private party value is about 12 or so. Okay. And the trade-in is about eight or nine. Yeah. That's my issue is trade-ins, you're not going to get high dollar for this. And so the closer we can get to the amount of loan that you owe, the better. So how much money do you have in the bank right now?

I currently have $1,000 or something like that, but that's all set aside for expenses and stuff. And what is your income? It's about $40,000, so about $4,000 a month. You bought a lot of car for making $40,000. Yeah, I bought it when I was making less, so...

Yeah, we need to get rid of this thing, but you're going to need to come up with the difference that you're underwater on. So you've got two options to do this. One is you can go to your credit union or go to the place that holds the loan and say, listen, you've got some bad collateral here because this thing's worth $9,000, I owe $20,000. Can you give me an $11,000 loan to make up for the difference and I get rid of this car? Now, obviously, you need another car. So you probably need to save up a few thousand dollars before you do this. The other option is you go out and save up $6,000, $7,000, $10,000,

Alright.

Sorry for the bad news, Alexander, but those are your two options. So I would try to get that personal loan to at least eliminate some of this debt and get out of this underwater car. But either way, it's going to involve some sacrifice, and it's an expensive lesson to learn. But man, car loans are killing people with these underwater situations, Alexander. I hate to hear that you're going through it. This is The Ramsey Show.

I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills? How

I'm going to eat next week. Yeah, in the middle of all that grief. Like it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here.

You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. Welcome back to the Ramsey Show. I'm George Campbell joined by Ken Coleman. Hey, if you enjoy the show, we'd love if you do us a favor and share it.

subscribe wherever you're listening, hit the follow button, leave us a review, and just tell people about it. Maybe that's a text. Maybe you hit the little share button and send a link to a certain episode or clip that you loved. But you guys are the best marketing plan we could ask for. And it's one of the reasons we hit number one out of all podcasts on Apple Podcasts earlier. The fact that my mom figured out a way to hack the system and clicked on the thumb a lot.

That's amazing. Yeah. Barb. I need to ask Barb how she accomplished that. I don't know. I don't know. She wanted her boy to hit the big time. Just her and May Camel. Just really hitting that like and subscribe button. How is it that Barb and May have not met? Barb, they need to. They'd get along. They really would. Mellifluously. Is that a word?

Is it ever? Mellifluously? You're welcome. No, mellifluously. Mellifluously. Yeah. Boy, I got to tell you, you've been working hard because I don't ever remember you pulling a word out that I don't know what it is. If I can teach an old dog a new vocabulary word, I'm doing something right. All right, I'm going to look that up on a commercial break. But Jordan awaits. Or what are we doing right now? Are we doing a little, do we have a little 401k thing? Yeah, I have a little teaching segment. I'm getting excited right now. Oh, I apologize, George. Teach away. Don't jump the gun here. So here's the deal, Ken. We get this question a lot, and I wanted to address it

because a lot of people are going through this right now. They're leaving jobs. We've seen a huge migration of just people moving around, switching jobs. What do I do with my 401k? What do I do with the 401k? That I left behind? Yes. Oh, this is a big question. So it's a big one and it's an important one that has a lot of zeros on the end. So I want to walk people through the thought process when it comes to rolling over the 401k. So of course you have a bunch of options.

Number one is cash out your 401k, which is a terrible idea because you're going to pay taxes and penalties if you're not of retirement age. The other option is do nothing and leave the money in your old 401k. Also a terrible idea, probably in second place in the terrible idea list.

The other two options are you can roll over the money into your new employer's plan. So if you have an old 401k, you got a new job, you can roll it directly into the new employer's 401k. And then finally, the last and probably my favorite option is you can do a rollover into an IRA, which is outside of an employer.

And so I like that one the best, Ken, because it gives you the most control over your investing options. The IRA basically has unlimited options, whereas your 401k has a fewer, more select options. All right, so let's play this out. Excuse me. I leave company ABC and I have a 401k there. And so I take a job in another company.

And they've got a 401k plan. I'm going to go to my smart investor pro, the person who handles my retirement. I'm going to say, all right, I need to take my old 401k. I need to roll it over into an IRA. And I'm going to jump right in immediately with the new 401k.

And so that 401k from the previous company is going to grow. You're just not contributing to it, but it's going to sit in that amount in the IRA. Or can you choose to contribute to it in the IRA form?

So with, you know, that's called a rollover IRA. Right. So that is an option where that money continues to grow. You can continue to contribute. And so that is a solid option because of the amount of control you have over your investments. And I like that one the best because as a bucket, when you think about your retirement plan, it's good to have different buckets. Right. And if it's, here's the big thing though, people don't think about. If you had a Roth, if you had a traditional 401k plan and you decide, hey, I'm going to do a rollover to a Roth IRA. Right.

You don't want to do that because there's going to be a Roth conversion that you pay. That's right. And the only time you should do that is when you're in baby step seven. You have a paid four house. Now this is extra money you have laying around and you can pay the tax burden to basically convert that to tax free money. There's no purpose in taking a 401k and putting it in a Roth.

because you're going to pay a tax. And that's the whole purpose of having a Roth is to get it out later with no tax. You want that money to grow tax-free. So there's a time and place to do that, but you're going to pay a hefty fee in order to do that. And that's why we do the IRA. You want to do a direct rollover. So let's say you have a traditional 401k, you want to do a direct rollover to a traditional IRA. If you have a Roth 401k,

you can do a direct rollover to a Roth IRA. So you want to keep them equally yoked, if you will. I like that. To keep it biblical for you, Ken. I know you like that reference. Thank you. Thank you for the reference. So if you've got the old one, it's time. And you got to do something. Don't just leave it sitting out there. You don't have control over it. The fees are now eating up what was left of your nest egg there. So do something. Roll it over to the new employer or

Roll it over. Direct. Roll it, roll it, roll it. Direct is what you want. Not indirect, Ken. Direct. Yeah, direct. To avoid any fees. Equally yoked. You don't want to see that money. Yeah. That's the important part.

So if you have questions about this, you can, of course, ask your employer and HR department, but you can also get an investment pro in your corner. And if you go to RamseySolutions.com, our SmartVestor program can get you in touch with someone who can help you with this rollover process. That's something I did, Ken, when I worked at Ramsey. I had an old 401k from my Apple retail days.

And so they helped me roll that over into an IRA, and that money's been growing ever since from a Roth 401k, direct rollover, Roth IRA. I love it. And it's been growing with my control. I love it. No reference to my rolling, rolling, rolling, nothing. I didn't want to acknowledge it, to be honest. Why? Why?

Was that an old Walmart ad? No, it's not an old Walmart ad. Is it an old Walmart ad? Keep those prices low is the next line. I heard a Limp Bizkit reference. It's not Limp Bizkit. Joe knows. It's an old song. Rawhide. Rawhide? It was a Western Rawhide. Yeah, like an old... I mean, George, you wouldn't know what it is because you don't even know who John Wayne is, but I digress. Yeah.

No, it is Rawhide by Frankie Lane. We just went the whole range there, but that's what I do. I like to create good conversation over absolutely nothing. I think that tells you the zeitgeist that we were born into, Ken. You're mentioning songs from 1961, and I'm thinking of the old... Oh, did you pull it up? Yeah. Well, give them the full reference now. People want to know. Rawhide by Frankie Lane. Rawhide by Frankie Lane. Released in 1961. See? You're smarter now.

You're smarter. I don't care if you like it or not, but let's help Jordan out. Can you admit your references are a bit dated? Well, there's no question they're dated, but that's the spice that I bring to the show. You and Rachel don't know about anything since like 2000. We don't know what Deloney knows. What's going on inside his head is just dangerous. So I got to bring a little bit of culture, a little bit of knowledge. I bring some vocab, you bring some culture, and we meet in the middle.

I love it. Nobody's complaining about the Rawhide reference. Plus, I think people want to hear me sing more. Oh, gosh. I could be wrong about that one. Nope. We want to hear from Jordan in Missoula. Love that place. Jordan, what's going on? Hi. Thank you so much for taking my call. I appreciate it. Sure. What's going on? First of all, I enjoy the banter between you both. It's pretty comical. See, James? People like it. See, James? James is always honest about the banter, and Jordan likes it. So there you go. Well, Jordan, we like you.

Well, thank you so much. So my question is, I've been following the Baby Steps stuff for quite a while, and I'm considering upgrading my truck. My question is, should I just cool my jets and be patient and content with what I have, or based on where I'm at financially, is it reasonable for me to consider an upgrade?

Just a quick background. No debt other than my mortgage. My house is worth roughly $450K, and we owe $180K on it, a 15-year fixed-rate mortgage. I make $120K a year gross, and my wife is a stay-at-home mom. Our other vehicle is a paid-for Honda Pilot that's worth roughly $30K, and I would consider spending $40K.

on this new truck. My current truck is 20 years old. I can maybe get 10 grand for it. It's starting to show a little bit of signs of breaking down. So considering just keeping that thing until it just completely dies or maybe splurging and getting something a little nicer. So we're talking 20K. We'll get you this truck. Exactly. Yeah, I'm doing it today. Yeah, I agree.

Well, that was easy. Yeah. Well, listen, you did a, first of all, you did a really good job of laying out the facts. Every Ramsey show caller should study your model. That was fantastic. You laid it out perfectly. You've got the money, you got the value. You've lived like no one else. And so now you're, you went from intense to intentional and baby steps four, five, six,

You've got this mortgage you're chipping away at diligently, but it's okay at that point to go on the vacations and splurge and upgrade the car. You're doing it with cash, and you're right there in our parameter where the total of all things with motors and wheels adds up to half of your annual income. So between the Pilot and this truck you're getting, you're right there at about half of that $120,000 at $60,000. And so you're doing it the right way, Jordan. What kind of truck is it? What is it?

So I probably would get a Toyota Tundra. I'm not totally sure. Still in the researching phase. I like to nerd out and look up a bunch of stuff like that. I just rode in Winston Cruz's Toyota Tundra. Oh, you did? Let me tell you, Ken. Name dropping. I think I'm a truck guy now. So way to go, Jordan. Love that for you. You're doing it the right way, man. Living like no one else and now driving like no one else. Yeah. Paying cash, selling the other truck.

It's going to be a 20K gap. He's got the money. This is what we like to see, America. Smart decisions. Very exciting. Nice new truck. And we're off the air. This is The Ramsey Show. I'm George Camel, joined by Ken Coleman. The number to call is 888-825-5225. Up next, we've got Bill in New Haven, Connecticut. Bill, how's it going?

Hi. Thank you for taking my call. Sure. My wife and I are in a very difficult situation. I'm 71. I'll be 72 next month. My wife is 66. She teaches at a private school. We moved from a state where the salaries are considerably lower than they are here in Connecticut.

And the cost of living is not a whole lot different. And this past summer and the heat of the summer for Connecticut, our air conditioning went out completely. And it's going to cost us almost $14,500 to get a new furnace and everything ready.

to replace the one that went out. And that's going to... We have a state program here. I can finance it. It'll be almost... It'll be about $175 a month for 10 years. Additionally, my wife took out a parent loan for our daughter to go to college. I was adamantly opposed to it, but...

Her philosophy is, "She's my baby and I love her, so I'm going to do it." And due to being in forbearance twice, once due to getting sick and having to take off work during the school year in the other state, and then moving up here to Connecticut, she went into forbearance each of those two times.

And what that means is that you don't have to make a payment, but the interest accrues. As a result, she still owes over $100,000 on that. Yes, our daughter went to a private school in New York. And yes, it's like I've been fighting a losing battle financially all these years. And I'm 71 now. I'll be 72 next month. And I have to go back to work. Mm-hmm.

I took an early retirement a few years ago, but all I'm getting is a small Social Security check because my salaries were always low. I have a small Army Reserve retirement. Thank goodness I stayed in that for over 20 years. And then I have a very, very small state retirement from our most recent state. I worked for the state recently.

retirement system for a few years. So what is the household income add up to right now? Our total income, our AGI is less than $100,000. Okay. Including everything.

And my wife is 66, and she would like to start receiving Social Security when she can get the maximum dollar amount. And I would like her to do that, too. But she's talking about starting to receive Social Security as soon as she can, which I believe is about another six months or so, something like that. And it would be considerably less.

And she teaches at a private school now. She's happy there. The salaries at private schools are very low. But she says at her age, if she were to get a Connecticut teaching certificate, nobody would hire her because who wants a 66-year-old woman? I don't buy that one. Well, that's what she says. And plus, she loves where she is now.

She was in a miserable teaching situation in the previous state. That's why she went on sick leave because the superintendent drove her to that, to make a long story short. And then we moved up here. And so due to those two situations is why she went on the forbearance because we did not have any money coming in to make the payments.

I'm looking at going back to work, whether it's full-time or part-time, preferably full-time because, like I said, I need the money. How much do you guys have that's liquid? Liquid cash. We have bills up to our eyeballs. You have more debt than the Parent PLUS loans and this 14-5 HVAC? Yes. What else? Yes. Credit cards, of course.

And it's about $70,000. Goodness gracious. Yes, I know. I know. It's horrifying. Is your wife concerned about this, or is it just you? Oh, absolutely. Yes. Both of us are concerned. And what other debt? Well, the house. What's left on the mortgage? Oh, gee. Probably about $200,000. Okay. What's the house worth? Uh...

I don't know. We're not sure about that. It's about... What'd you buy it for?

I'm trying to remember. We bought it for $300,000 and something. Okay. Now, like I said, I'm looking at going back to work, and I know that some of the places I've come across mention in their ads that they offer 401Ks. Some mention that they offer 401Ks with a match. Some do not mention a 401K at all. Now, my understanding is that

you have to begin withdrawing from a 401k at a certain age. And I'm wondering if at my age, would I even be allowed to put money into a 401k? And if I did,

What would I do? Put the money in the 401k and get the employers match and then start withdrawing the 401k? Well, truthfully, Bill, I don't want to be there. Bad news. But we got a ways to go before we would even begin investing. So we wouldn't recommend you do any investing until you clean up this mess.

Even with the employer match. Even with the employer match. You guys are so underwater on payments, you don't have a dime to invest. Exactly right. So we need to clean up this debt. And so I'm going to start with the smallest balance to largest. I'm going to try to... Can your daughter make the payment on these student loans? She won't do it. Why? She says it's the parent's responsibility to pay for the child's education. Goodness gracious. I paid for all of my education. Who taught her that? Mom? Mom?

uh how did you guess oh my goodness well okay so bill here's the reality you've been catered to her whole life well this is as much a marital problem as much as financial yeah you've got some resentment towards towards your spouse yeah you got a marriage issue and george and i can't solve the marriage issue unfortunately the marriage issue has created a mountain of money issues

And, Bill, look, here's the bottom line. We teach the baby steps for a reason, whether you're 71, 51, or 31. And right now what you have to do is $1,000 as an emergency fund. And, unfortunately, you had a massive emergency in the form of an HVAC system. You've got to take care of that, George. That's –

That's a tough situation. You can't use credit cards to do that, but you guys are going to have to scramble and work, and it's time for you and mom to have a conversation with the daughter, and it's time for her to grow up. That's going to be a difficult conversation. If your wife is as concerned as you said she is, then it's time for her to have some hard conversations. This is a mess.

Yeah. I mean, you're looking at $200,000 outside of the mortgage that you guys owe if you're taking on these Parent PLUS loans while making $90,000.

And you're already almost 72, Bill. And so we've got to make some big decisions. You've got to go make $25 an hour at least, 40 hours a week, to help. But you need your wife on the same page first. You're not going to make any progress when you're trying to do this on your own. And you need to have that hard conversation with your daughter and say, listen, mom and dad are broke. And unless you want to be taking care of us for the next 20 years, we need to clean up our mess and you need to clean up these student loans.

But again, the legal responsibility is on you guys, which is the worst part about these Parent PLUS loans, Ken. High interest rates, forbearance, the kid doesn't pay, it's on the parents, and Thanksgiving dinner is real awkward. Bill, I'm so sorry you're going through this, man. I hope that you can clean this up and one day retire again, but this time the right way, with some dignity, with some peace, with some patience, and with a pile of money. This is The Ramsey Show.

I'm George Campbell, joined by Ken Coleman. This is The Ramsey Show. The number to call is 888-825-5225. You call in. We'll talk about your money, your work, and your life. We'll help you take the right next step. Daniel is in Raleigh. Welcome to the show, Daniel. How are you doing? Hey, thanks so much for having me. I'm a big fan. We appreciate that. What's your question today?

Of course. So I'm 18. I'm a freshman at UNC and I'm studying business and entrepreneurship. Cool. I own my own business and I've been having difficulties being able to do a good job both running my business and also doing a good job in school. What's your business?

We are an event entertainment company. We specialize in balloon animals and face paint. Cool. Are we talking like kids' birthday parties, carnivals? What are your main gigs? We do some kids' birthday parties. We do lots of festivals, restaurant work. We work with some of the sports teams in North Carolina, like the Panthers and the Hornets. Cool. Yeah. All right. And how successful has this business been, and how much time are you putting into it?

It's been pretty successful. I started it when I was 12, and for five years I was practicing and getting to be the best balloon twister I could. And I've hired up a team to help me run this while I'm in college. Last year, in 2022, we only made $2,200, but this past year we were able to make over $25,000. Great. And that's net profit?

Yes. Wonderful. And you're saying, hey, this is a lot for me to run while I'm in college. Yes, sir. Yes. Okay. And how many classes are you taking? Like how many hours are you devoting to school and how much free time do you have right now? I'm devoting about probably 30 to 40 hours to school and another 30 hours to my business. Okay.

And it's just kind of a lot while I'm also trying to be social and have a good time in college. So the question I have is, is this a long-term business play for you or is this something you kind of started? It's thrown off the cash and you kind of enjoy it. I mean, what's the strategy here with this business as it is today? I, I,

I I'm enamored with what I do. I love making balloons for a living. It's a lot of fun. I want to do it for life. Um, this is a business I want to own and grow to hopefully be a national change someday. Um, and we've been growing really well this year and last year, and this is what I want to do with my life. Um, and I'm going to school for, uh,

chance to learn how to better grow my business while also getting to have fun while getting an education. Well, so you've got, you mentioned three things. You've got school, you've got the business, and you've got a social life. It doesn't sound like you can do all three of those to the level that you want. So you've got to start going, okay, let me reverse engineer this. What's most important long-term? And that's going to determine what's most important in the short term. And I'm not trying to be coy with the answer, but

It's like, okay, maybe I don't take as many classes. I can still pursue the degree. I'm not in any way telling you to drop out of college, but I'm saying something's got to give. Or you do less gigs with the business. Yeah, that's the other one. Or you're less involved. That's right. The business stays where it is for now, meaning it doesn't grow until you have more time to give to it. Something has to give way here. That's true. Can you delegate more to the team?

I can. I've hired up a manager that will start, I'm training him in sales right now and that's a big thing I've been dealing with is sales for the business and taking the sales calls and hopefully I'll have more time to book

Focus on other things, whether that's higher leverage opportunities for our business or more time towards school. I'm not sure yet. What is the thing that you're most valuable in in the business right now? You just mentioned one aspect. You've been doing sales. What's the thing that only you can do right now? Right now it's sales, but hopefully soon it won't be.

I'd say I have a lot of the strategy for the business. I'm the one that makes the instructional videos on how to learn balloon twisting since we train our own balloon twisters. So just, I guess, HR and growing the team as well as finding the customers and making the right decisions to get customer leads. Okay. And who's paying for school right now?

Right now my parents are. They're paying for the first year or two, and I won't have issues paying for school afterwards either. So you have no debt, and you have a pile of money in the bank, and you're also putting money away that you're making from the business?

Yes, sir. I save almost all of my income. Incredible. Because that's an important piece of this equation is not going into debt. I want to see you finish school if that's a goal for you to get this degree that will help you flourish in business. And it sounds like you want to do this long term, full time as soon as you're out of school. Yeah. So this is a temporary, you got what, three more years or are you in the first year?

I'm in my first year. I'm a freshman, yeah. So the other question is, how do we expedite college? Can you take on more credits and just crush through this so you're 21 years old graduating to pursue this business? That might mean you slow down in order to speed up.

And so that might mean delegating. It might mean the business just doesn't go for a season and that you got to be OK with that because you're doing a lot at once right now. And I don't want to see your grades suffer while the business suffers and you end up not making progress on either.

That's true. That's a good point. I appreciate it. Yeah. So I'd sit down with the folks that you have, see what kind of hires you need to make while making this business sustainable because you don't want to eat into all the profits trying to just keep this business afloat to where it's not really accomplishing anything for you. Yes, sir. So that's some big decisions to make at your age. I'm proud of you, man. You've done really well.

Thank you. I really appreciate it. Thank you. Best of luck with the future. Anything else we can help with? Yeah. So I've been following you guys as Baby Steps and I'm now on Baby Step 5 and

And I mean, I'm 18 years old. I don't have a wife or kids and I don't even have a girlfriend. So it feels a little premature to start saving for my child's college fund. What would you recommend doing once I make it to baby step five? And I'm not sure how to move forward. I would focus on a home down payment fund. And that might just be a general high yield savings account. And you put every extra dollar you can into that high yield savings account. And it's sitting there making you four to five percent.

The other thing you could do is open up a Roth IRA and contribute to that. And Max went out for the year based on your stage and based on the fact that you told me you're going to graduate debt free. So I think both of those are wise for your future goals, because when you graduate, adulthood is going to hit you like a ton of bricks with bills and you're going to want to do stuff and buy a home one day. And so to be ahead of the game with no debt and a pile of money in the bank, dude, you're going to be light years ahead of your peers.

That's the plan. Thank you. Right now, I have about half of my money saved in a high-yield savings account and half of my money saved in the stock market, specifically with VU and RSP. How do I know how to allocate money to reinvest in my business versus allocate money for the stock market? How do I know...

where I should be investing more of my money. Well, I would look at what the last year of business expenses has looked for you, what's coming up in the next year for hiring, and we got to upgrade our equipment. And so that's the amount of money I'd be starting kind of a sinking fund and reserves for.

But outside of that, you've got the money set aside in your savings account. And so worse came to worse, you could kind of rob Peter to pay Paul in a sense to cover any business expense. But if you're running this thing debt free and you've got some money to cover those equipment, expenses, rentals, whatever your needs are, you're in great shape as far as the business. And so unless it's making a new hire, which hopefully they're going to produce enough revenue to offset what they cost you. So that's going to be the goal running this business.

I'm going to send you a copy of Dave's book, Entree Leadership, as well, Daniel. That's our playbook for how Dave built this thing from a card table in his living room to the Ramsey Empire with over 1,000 team members and this amazing campus. And I think it will encourage you along the way as you're actually hiring people at 18 years old. I mean, what an impressive kid.

This is an adult, and his parents did a great job raising him well. He's asking the right questions. Yeah, I mean, certainly at 18, looking long-term like this and having to make these kind of tough decisions, very entrepreneurial. You love seeing that in this generation, and really interesting to see. And, you know, I never want to push anybody to drop out of college, but at some point...

What business training do you need versus a true four-year degree? Maybe even looking at more business classes, business training, small business things like that. That's what I'd be looking at. And Daniel, if you ever come by Ramsey Solutions, I'd love for you to twist me a little camel balloon. I think that'd be fun. What do you think, Ken? Yeah, I would actually love to see that. That puts this hour of the Ramsey Show in the books. Oh.

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Ken Coleman, and we are your hosts this hour. The number to call is 888-825-5225. If you've got a question about money, work, purpose, your career, the job you feel stuck in, we are here to help you take the next step. 888-825-5225.

Adam kicks us off in Miami. Adam, what is going on in Miami? Hey, thank you for having me. Sure. How can we help?

Yeah. So, um, I, I actually found out today. So this is kind of the reason for my call. I found out today that I, uh, owe $31,000 in student debt. And I know that sounds a little crazy, but the reason is, is because, um, so, um, I had, I guess two, a call to, I guess, um, one was a parent plus, and that was taken care of by, uh, that was forgiven because of a GI bill. And, um,

my family a little bit dysfunctional. Um, and kind of every time I brought it up, I would see in my credit report, this $31,000 and it was actually 27 before that interest. Um, and it was just told that, you know, um, it was taken care of. Don't worry about it. It's wrong. It'll be updated. It was discharged. And so I just kind of did a research today and found out that it's totally separate and it's in my name. So, you know, I have to take care of it. So basically it's, uh,

You know, student loans spread about 31,000, spread across nine loans, you know, throughout the four years. So I was just considering consolidating it. I just wanted to, you know, kind of have a, I don't really know where to start. So I was just hoping to get some advice on how to attack it. Well, it's a rude awakening for sure. And I'm sure very frustrating and not causing, not causing any repair with the relationship with your family that told you, hey, don't worry about it.

We've got it. Yeah, exactly. I was saving up for a car. So where are you at now? Do you have any other debt? No. Okay. And how much money do you have in the bank? Investments in a wealth IRA, about 10, and then in stocks, about 10 and about two or three, just sitting in an account. Okay, great. So what's your income?

Um, so my base is about 75. I started a new job recently should be could could could potentially be. It's hard to speculate, but it could potentially be well over 100. Wonderful. Okay, so the good news is in this mess is that you're going to be done with this debt. My guess is within six months.

I mean, yeah, I'd love to hear how, especially like consolidated. Is that something, you know, across like across those, it's nine summer, nine loans ranging from two to 7,000. Yeah, I was in a very similar position to you when I was 23. I did pull my credit report, realized I had 36,000 in student loans across about 11 loans. And the way I did it is the way I'm going to recommend to you. And that is to not consolidate these debts because all you're doing is just moving the debt around into one big pile instead of tiny piles.

So you didn't really do anything. You just have the illusion that you did something. So instead, what I would do is just attack the smallest one with a vengeance. And I would also, and this is also something I did, I would sell those stocks that you have. Yeah. That's not retirement, right? You just invested in a bunch of stocks and it's at 10K.

Yeah, well, it's an Acorns account that I used. Okay. So I would liquidate that and I would move away from single stocks anyways. And instead, once you're debt free with an emergency fund, then I would begin to invest 15% into tax advantaged retirement accounts. And I would quit. I wouldn't use the Acorns app if I'm in your shoes.

Yeah. And I think that's going to give you a better long-term future and it's going to get you out of debt the fastest because you told me you've got, you know, 2000 plus the 10,000 in stocks. The rest is retirement accounts in the investments. Yeah, that's correct. Okay. So you've almost knocked out, you know, you've knocked out a third and almost a half of your student loans just by doing this.

So that leaves you with $19,000 left. You're going to make $100,000. So the question is, how quickly can we pay off $19,000 making $100,000? How much margin can we throw at these debts from smallest to largest balance, ignoring the interest rate?

Yeah, that's definitely something I'll have to figure out. But I definitely don't want to not have anything in the bank. Well, you'll have $1,000 you'll leave as a starter emergency fund. And then for six months, what you're going to do is try to throw $3,000 a month toward your smallest debts and make minimum payments on the rest. Okay. So $3,000 times six, $18,000.

Which is about what you'll have after you sell the stocks, put a little bit of the money you have in savings, and put that all towards your debts. That's going to knock out almost half your student loans. You tracking? So you're going to free up payments. I am tracking for sure. That payment gets rolled into the next debt, along with all the margin you're mustering up from your income. And I'm telling you, man, you could be in a very different place six months from now. And six months after that, you're going to save up a fully funded emergency fund. Three to six months of expenses. Yeah.

You wouldn't suggest at all like going with, you know, monthly payments or anything like that? Monthly payments on what?

Well, I guess, I guess, nevermind. You know, while I was just thinking consolidating and turning into monthly payments, but that's not the right call. So, well, it doesn't move you forward. I'm trying to help you move forward and get rid of this debt instead of just move it and go, well, I've made it into one big payment because I can't keep up with nine. Instead, I found that it was much more motivating for me to see each net debt get knocked out one by one, freeing up a payment, applying it to the next one and the next one.

And with doing this plan, I'm telling you, 12 months from now, you're debt-free with a fully funded emergency fund and you're investing 15% of your income in retirement.

If you do it your way, you're going to be calling back a year from now. Interest growing. I got to jump in here. Adam, I know you understand what George said, but after he explained it really clearly and you said you understood it, you jumped right back into the consolidation thing. It leads me to believe that you've got some people that are pretty influential in your life that are pitching you on this. And while you understand what George is saying, I'm not sure you believe it yet. Am I right or am I wrong?

No, you're wrong. I honestly don't really have anyone to go to for financial advice. Okay, good. So listen, do you believe then, so I'm glad I'm wrong, but do you believe that you can do what George is saying? Yeah, I believe it's going to get very tough, but that's very possible. Dude, I did not make $100K. I was making a starter salary and I had more debt than you.

And I did this in 18 months with some hustle. I was doing side hustles. So you got to be willing to sacrifice and you can do this in six months and a third of the time with this amazing income and with these stocks you're going to sell. That's right. And so you got to quit getting distracted. That's what's happening here. You're doing a lot of things at once.

And you had amazing income. And your greatest wealth building tool is your income. And right now, it's being siphoned away from student loans and your stress and distracted by Acorns micro-investing apps. And I talk about these investing traps in the book. And I specifically call out ones like Acorns because I think these apps are designed to take your money, not make you money. I would like to give the first...

book of yours that I've given away. What an honor. Breaking Free from Broke. It's your gift, Adam. I'm giving it to you, but George did all the work. See how I did that? I like that. Hang on the line. Austin will get you a copy of that because...

George, you really do do a great job of explaining the game that people are in. It's kind of like you're breaking down the matrix in this book. Yes. The financial matrix. And once you see it, you can't unsee it. And I hope it helps Adam break free from broke because he's a wise young man making good money. And I want to see that money help him build wealth instead of big towers in the sky for Sally Mae. So hang on the line, Adam. We'll send you a copy of Breaking Free from Broke and wishing you the best with that payoff. This is The Ramsey Show. ♪

Welcome back to The Ramsey Show. I'm George Camel, joined by Ken Coleman. The number to call is 888-825-5225. Well, let's get to the lines. Lisa joins us up next in my hometown, Boston, Massachusetts. Lisa, welcome to The Ramsey Show.

Thank you so much. I really appreciate this opportunity to discuss and get your insights on this. Absolutely. I'm single. I was recently laid off. I'm collecting severance for about the next 15 months. I currently rent. As you know, my rent continues to go nowhere but up. And I'm at a pivotal time in my life where I'm actually thinking about relocating to an area where I can afford to buy

purchase a home for around a price that will keep my mortgage even lower than my rent. And I was looking for some insight and advice on that. Okay. So what job did you get laid off from? What were you doing? I was in media for a long time. I was fortunate, you know, they owe me nothing. I was there 25 great years, but it's a little bit scary now because I'm a little

So,

I was thinking about relocating, you know, purchasing a home. I can't, as you know, right, can't get a house from anywhere near Boston for $325,000, but I can if I relocate. And I was actually toying with, although this is where I'm looking for your insight,

over like about four years just purchasing my home outright. So in like four years time, I have no debt. And at that point I could afford to live on, you know, my pension and my social security and my remaining 401k that I don't touch for my home. Okay. So where are you thinking about moving to? Florida. Oh, okay.

All right. There you go. Yeah, big change. Yeah. But I love the sun. I'm not a cold person, not a skier. I've always stayed here for my family. But I'm at a point now where, you know...

It's not a good enough reason to keep me grounded. I can continue to come home and visit family. They'll come to me. So I just think this maybe is serving as a catalyst for me to do something, put my big girl pants on, which I never would have done before, and take that chance and move and purchase a home. I like about a lot of what I'm hearing. I am just curious why you wouldn't continue to work. You've got a lot of experience. Well, I'm not...

Yeah, I'm not saying I won't. I think it's I don't want the pressure of having to go out and get what I had, right? That's fine. I'm trying to be a realist. What did you have? Tell me a little bit more. Like, what were you doing and what were you making?

I was making about $140,000 a year. Doing what? I was in media. What? Sales. Sales. Sales. Okay. And so when you say you don't want to go out and feel the pressure to get a sales job, make it 140, is that what you mean? Yeah. Yeah. And I also have some health things I might be facing that I might have to take a little bit of time for myself. Okay. Gotcha. I was recently diagnosed with...

you know, an issue that has to be addressed, nothing life changing, but might need to take a little bit of downtime for myself. So, you know, because of those factors, I'm just trying to think, well, what can I do to get myself where I feel in a better situation that I don't have to make this money and

And, you know, I have, you know, I guess it's all relative in life. I think I have a pretty good, you know, retirement strategy and savings in my 401k and liquid savings. I don't have a lot of debt, but I also don't, you know, I've been so disciplined and worked so hard. I don't want to, because I'm now suddenly faced with like,

a health thing and losing my job that I panic and make a really bad choice. So that's why I was calling into, you know, to you gentlemen, because, you know, I'm a big fan of the show. You mentioned you have debt. I have one debt. I have a car payment, which I can easily pay off. I just haven't because I was working. What's left on the loan? 17,000. Okay. And how much money do you have in savings?

I have about $800,000 in a 401k, $100,000 in liquid savings, and then I have like a lump sum for better words, lack of better words, that I can take out as a pension or I can roll over to a 401k. That's a lump sum amount as well. Okay, great. Well, Lisa, I'm going to answer this as if I was in your shoes. How old are you? 58. Okay. Okay.

If I'm in your shoes and I really wanted to move to Florida, I would, number one, take some of this liquid savings and pay off the car loan today. Okay. Now you're debt free. It's going to free up a payment. And then here's the crazy part. I would go rent in Florida for a little while until I figured out what was next.

And I would be I would personally be looking for a job so that I'm able to pay off this house. Once I had the house paid off and I had enough in retirement, then I would go, all right, Lisa's out and she's going to maybe have an early retirement or an encore career. But I wouldn't just, you know, pack it up and go to the, you know, the 50s living community in Florida. Yeah. Margaritaville. Yeah.

I keep thinking of the Seinfelds. That's actually like a neighborhood in Florida. They're all over the country. They actually look amazing. I've been going to this area for a while, guys, and I do love the area. And I have friends there, so it's not a needy reaction from that perspective. Can you rent? No.

Excuse me? Can you rent over there for a little while? I can. The rent will be high. The rent will be high. And I just, the market's kind of going up. My friends bought two years ago and their house doubled. I'm almost a little pressured where I feel like I know I can still go buy a nice house for $325,000. So you'd buy a house for $325,000 and your down payment would be the rest of your liquid cash outside of an emergency fund? I'm thinking of not doing that. I'm thinking about just putting 10% down and then over four years withdraw the money and

from my 401k and paid off outright. But you're going to be unemployed and we need to pay a mortgage now that's $300,000. But I have, I have, I've already been pre-approved because of my severances and my 401k. They do a continuance program where I can guarantee that I can pay it. But what happens when the severance is over?

The severance is 16 months and I'm sure I'll have a job by then. It's no different than if I'm here renting and strapped down. I guess where I'm going with this guys is I know if I own a home and I get a job making half my money, I can say, Hey, you know what? I'm going to pay $75,000 a year and just get rid of this in its entirety. Now all I have is my food,

I can never say that.

or put the rest of the, what are you going to have left after the car payment? 17, you're going to have a what? About $83,000 to put down? Yeah, about $83,000. Well, you know, look, that's 20% down. Yeah, $65,000 is that much. You can leave the rest as an emergency fund. I would put as much down as possible. I would, too, put it all down, but you easily have the 20% that we like to recommend. Yeah, it'll help you avoid PMI and get a job. And I'm willing to do that. Take a couple months. And I'm willing to do the 20%.

Okay. Here's what I would do. I'm going to add to what George said. I would take a couple months. Okay. Chill out, right? Take care of your health issue. You're going to be okay. I'd take two months max. Get down there, get the girlfriends, you know, have some fun times, you know, throw the marks back a couple nights, but we're now looking for a job down there. We're going to have a good time. We're going to get employed. We're not going to use that severance money.

to live off of. I would be stacking that severance. If it were me, I'd be trying to only use a couple months of that severance, George, get employed down there, take the rest of that severance and plug it into the baby steps. Yeah, well, Lisa, you told us you don't want to be pressured into getting back into the sales job. Well, you're going to feel pressure when the severance is running out and you haven't found that dream yet. So I'm going to start searching ASAP

and land that to give you some cushion. And I want you to take as small of a mortgage as possible because the goal is to pay it off as quickly as possible. And it's going to reduce your mortgage payment down. The more you put down, the smaller the payment. That's right. Less pressure you have to go out and make 140 grand. And I don't think it'll be a pressure situation with your personality, your sales experience. You could crush it down there. Lisa sold us on this dream. I know. She's got the sales skills. George and I are going to come down and visit. Let's go.

It's going to be great. Kenny Boy and me in Margaritaville. Margaritaville. It's going to be great. We'll hang out with the 50-somethings. What's that drink you like? The Gumby Slumber? The Gumby Slumber. That's a Ken Coleman favorite right there. Fantastic. Look it up. She'll have one ready for you. Lisa, we're wishing you the best with this next chapter of your life. And, of course, wishing you the best with these health issues. Hope you get them taken care of. And we'll see you in Florida. This is The Ramsey Show.

This is The Ramsey Show. I'm George Campbell, joined by Ken Coleman. The number to call is 888-825-5225. Hayden's up next in Dallas, Texas. Hayden, welcome to The Ramsey Show. How are you doing? Great. How are you? I'm doing good. So my question is, I'm 18 years old. I'm still a senior in high school, and I figured out relatively before my senior year started that I want to be a large animal vet.

And I know that it's going to be very pricey and I don't have any money saved up for college besides what I'm going to get for showing my barrels, which would be about like,

maybe $8,000, and I have no idea how to go about scholarships or anything like that. What's the price range? I'm assuming there are more than a handful. How many schools would train you in that, and then what's the range of price on that? Are they all pretty similar? So the route that I was going to go is I'm just going to go to my local school

college in my county and get my basics and go over to commerce, which is around, I think when I calculated it was 20,000 a year. I think it was.

Okay, so we need to be super crystal clear on that, and then you need to do a lot of research to go, how many large vet schools are in the country, and what are my options there? Because $20,000 a year, how long is the program? Let's just say it's $20,000. You need to be really sure on what that number is, first of all. But how many years are we talking about? 20,000 times what? So that's just the animal science, and that would be four years. So we're talking $80,000, then what?

It's either two or four years for pre-vet, which I can either go to A&M, OSU, or Texas Tech to do. Why are those the only three options? Because those are the only ones near me that I'm comfortable driving to that has a vet license program. Okay.

Okay, so let's keep adding this up because it's important to what we're going to walk through with you. So two or four years, how much is that? How much is that? Four, what was it? The second one. I don't know what the first one was something about animals and the second one was pre-vet. Pre-vet, how much is that going to cost? Pre-vet, if I take it at A&M Commerce, it would be I think $20,000 as well. Total or per year? Per year.

Per year. Okay, so you're talking $40,000 to $80,000 on top of that. Goodness gracious. And then you have actual vet school? Yes, you have to go through a licensed school. How many years and how much? We're playing the same game here. How many years, how much? Let me look it up real fast because I've not looked up that aspect of it.

So if I get accepted... That's the hope. Yeah, that's the hope. It's very hard to get accepted. All right, I'll tell you what. Just for our listeners' sake. It's like an accountant getting the taxes done. I don't even care what the number is. It's crazy.

Yes, it is. It's $22,000 a year. Okay. For how many years? Another four years? We're not sure. Two to four? I think it's two for just the vet license. Pre-vet, you can take a two-year or a four-year. All right. So what are you wrestling through? How can we help specifically? Because we're not going to tell you to take a loan out for that. That's insane. If you just play the numbers out and you look at what you would make your first year out,

your second year out, what your path to growth is, and you run the numbers on an interest rate and what you're going to be paying back, you're going to find out pretty quickly it's really not worth it. But most young people, because we don't teach you in our culture to actually run the numbers and think about what it's actually going to look like when you get out, you've been told your whole life that this is just the price of entry.

And it is the price of entry, no question, but it doesn't have to be loaned. Maybe we're going to get in that field and we're going to make a lot of money and we're going to cash flow this. But you've got to think through this. Scholarships, what can you do? What are my options around the country? I don't care that you can't drive to some place in Arkansas, but if Arkansas has got something and it's a lot cheaper, I can tell you this, no animal owner cares where you went to school, and I promise you the animal doesn't care.

But you as a young man have got to look at this stuff and go, is this worth it? Is there another way? These are two big questions that you don't have the answers to. So to the worth it part, there is one thing that kind of makes me think it might be worth it is

After you get out and get a vet license, you have to practice for a little bit under a company, of course. But the USDA can give you a contract for three years to go to a county they choose and pay $25,000 a year off of your student loan debt. And you can sign that contract as how many years you need to.

But there's some golden handcuffs there, because what are you going to be making there? It sounds like it's a limited income. You're not making much. I got news for you, young man. You're not going to make a lot working for a county vet. In fact, you're going to be making the bottom of the barrel. So they'll pay you $40,000, and they'll pay off 25 of your student loans. That's a $65,000 deal. Yeah, no thanks. You could probably go make more than that elsewhere. Yeah, that's another thing that I've been thinking about is also you make $40,000.

working under somebody. You need to go talk to some vets. You got to figure out what vets are actually making out there in your area, doing what you do and then figure out, okay, is this still what I want to pursue? And then how do I do it affordably? And so there's a few steps. I'm going to send you my book, Breaking Free from Broke, because I've got a whole section on student loans and how to go to college debt-free. Here's the spark notes. Number one, you got to take debt off the table, Hayden. You got to say, I'm going to do it without debt no matter what. When you pre-decide that, it changes the rest of your decisions.

Then we can talk about college savings accounts, choosing an affordable school, which might mean you might need to move across the country for this dream. And you can't limit yourself to these three schools that might cost a pretty penny. Then we get into applying for scholarships and grants as if it's a part-time job. I'm talking 15 to 20 hours a week. You're applying for so many scholarships and grants, your head is spinning. You hear me? And then you're also going to work part-time while you're in school.

And all of this is going to help you cash flow it and help you leave without debt. And that might mean it takes longer. But right now, you're looking at a 10-year journey to become a vet. Is that right? Yes, sir. And about $200,000. Yikes. With this current plan. Hey, how sure? If you could do it for free, okay, you wouldn't have any of this debt. And that was one option on the table right now.

And then I said to you, but I've got some other options that would allow you to use what you do well to do stuff that you like. Would you say, I'm not interested in that? I want to work with animals. I mean, how much of this is passion versus just a genuine kind of, I'm intrigued by it. It seems like it might be fun. Because you're 18, awfully young. How well do you know that you want to do this?

So pretty well, because 16 to 17 years old, I had no idea. That's when I was trying to figure out what I wanted to do. And I'm in FFA, and I show bears, and they would have me go down and give shots to pigs, cattle, whatever. And when I was doing it, I was like, this is actually kind of fun, taking care of these animals and birds.

make sure they're okay. And I've been interning with a vet. Okay, good. Let me ask you this really quick because our time is short. Is it possible? And if the answer is I don't know, that's okay. But I'd like for you to check into what would a path look like if you were to go work for a veterinarian at a lower level and pay your way through

some lower-level degrees. Would they be interested in paying some of your education or reimbursing you? Is that done at that level? I would think it's a pretty—you talk about the large animals. I would think there's a lot of demand, yes or no? Demand, yeah. I think there's like a 195% increase rate for veterans. For veterinarians? Yes.

Yeah. Okay. It's okay. Here's what I'm saying. I would like you to see if you could talk to some local veterinarians like George is talking about and get an idea of entry to

and what they're making, what their path was. Are they interested in finding young people like you who know they want to do it? And would they be willing to supplement your education so you don't have to go out and get a loan for it? I would at least kick the tires on that, George. You got a lot of homework to do. And Hayden, we're going to help you out. I'm going to send you a copy of Breaking Free from Broke. Read chapter four on student loans. This is The Ramsey Show.

Our scripture of the day, Psalm 1-3. They are like trees planted along the riverbank, bearing fruit each season. Their leaves never wither, and they prosper in all they do. Booker T. Washington said, Excellence is to do a common thing in an uncommon way. Good stuff.

Open phones at 888-825-5225. This is The Ramsey Show. I'm George Campbell, joined by Ken Coleman, and we're about to be joined by Walter in Raleigh, North Carolina. What's going on, Walter?

Hi, thanks for having me on the show, gentlemen. Sure. I have a better question than I have been having in the past. My wife and I went from a dual-income, no-kids family to a single-income, one-kid family with a birth of a three-month-old. We're on baby step six, and we have an outstanding balance on a mortgage of around $220,000.

The kicker is that I'm active duty and I can't take on extra jobs. My wife is going to school and we're cash flowing that. And in about two to three years, we're going to have to move somewhere. We don't know where. My question is, is it worth it?

still paying down as much of the principal as I can when I know mathematically there's no way that we'll be able to clear the home? Or is there something else that we should be still in stork mode for an eventual move? Well, there's no stork on the way, right? We got the one kid? Correct. Okay. And then when is your wife finishing school? In about two years. Okay. What will she be doing after that with the degree?

Environmental science. Cool. All right, so back to your question about the mortgage. There's a fallacy that paying down the mortgage is like wasting money in a sense if you're not going to pay it off in full. And I don't see it that way because what you're doing is really creating a forced savings plan. So all of the money you're paying into that is built into the equity. And when you move and sell that property, you're going to roll over that equity into the new home that you buy. Does that make sense?

It does. I'm just, I'm, I'm wondering how much extra should I, uh, like, I mean, I guess I can go with what I'm comfortable with, but if we, if we just keep making the minimum payments on the mortgage and just, uh,

I don't know, just kind of like keeps beefing up the six-month emergency fund. Could we then just pay the principal later, or is it better to pay it incrementally? It's better to pay it as soon as possible because your interest is calculated every single month.

And so the sooner you make that extra payment, the sooner the interest starts to get knocked down. More is being thrown at the principal with each payment. And that allows you to make real momentum and progress versus putting it aside and waiting to do it at the end of the year. Doesn't make sense. And you're not at risk of losing a job, sounds like.

No. So we don't need more than a six month emergency fund. You're going to be employed. You're not scared of work. And thank you for your service, by the way. And so I feel good about you continuing to pay down this mortgage and just rolling the equity over. And when you're ready to buy a new house, the money's ready to provide for you right there.

Okay. But that's what I did personally, Walter. Even if you're going to move, I still tell people pay down the mortgage. It's a forced savings plan. You guys don't have any debt. You have an emergency fund and you're investing 15%, correct? Correct. Then the next move there, outside of putting some money away for that, your child in a 529 plan or an ESA, or do they have some kind of GI bill?

They do. Wonderful. This is an awesome plan then. And so next up is getting rid of this mortgage. What's your household income? 85. Okay. So my goal would be how much can we, because you're cash flowing your wife's school as well? Or is that covered? Correct.

We're cash flowing her schooling. Okay. So anything beyond cash flowing, I would be throwing at the mortgage, Walter. And you're going to be thankful when you sell that house and you get so much equity out of it to roll into your next goal. So good luck with the move. And again, thanks for your service. Jenny's up next in Colorado Springs, Colorado. What is going on?

Hey, Ken and George, thank you so much for taking my call. I'm super excited to talk to you. What's happening? Just to get to the meat of the question, I've been in private practice for a couple years doing counseling. And

Income is kind of, it's not consistent, I would say. My husband's in sales, so his income is not consistent either. I accepted a job about a month ago to work for a university doing counseling. But this job has kind of a clause where you can't do any outside work. And the yearly salary is $72,000. So the main thing that I'm worried about is us paying off

When you say work outside, is it in counseling or you couldn't even drive for Uber?

Well, so right now I do Instacart and DoorDash. And you have to get any sort of permission for outside work other than counseling. So I could potentially if I got permission from like the dean and the regents. It's this whole process that you have to go through to get the permission. But I definitely couldn't do counseling on the side. That's fine. I get that. Have you already taken the job and started or you just recently accepted?

Yeah, so Ken, I'm glad that I'm talking to you and George, of course, but I accepted the job, but it took about two and a half months to get credentialed for it. So the start date is in a couple weeks. So you effectively can get out of it. Is that what I'm understanding? Yes, with a major feeling of guilt and... Well, let me just say this. Disappointing them because they credentialed me. Well...

Again, you've got to do what's best for you. And so if this is not the right decision, I'm not saying that it's not, but if it's not the right decision, you don't compound a mistake by making another one. So what were you making before you took this job?

So in private practice, I can make anywhere between maybe $60,000 and $90,000 a year, just depending on my client load, caseload. All my expenses are the same, really. So what drove you to take the university job? More stability on the number?

Yes, because both of our jobs are inconsistent, and the university job has benefits. It's more consistent. Okay. I thought we'll have money to plan on. All right. So I'm going to hit rapid fire here because we've got about two minutes, and I want to be able to help you. Yeah. How much money? Let's say that the university automatically rubber-stamped your side hustles.

How much money would you want to make where you go, okay, man, that's awesome, Ken. They said I could do this and we need to make this much. What's that number beyond the 72 that you'd want to make on the side? I think realistically I could probably only do like $1,000 a month for the side hustles. But would you be excited to have that additional $12,000 or would that even make a dent?

It wouldn't quite make a dent. What's the goal of making more? You see where I'm going here? So we're scratching our head about making $12,000 that wouldn't make a dent. And to George's point, what do we need the additional income for out of your side hustles? What do we need it for? You mean on top of the income that I have already? Yes, and top of your $72,000. Just to make more of a dent on our debt because we're about $750,000 in debt. How much of that is mortgage? Mortgage.

$490,000. Whoa. What's the other part? I know. Two cars, student loans, personal loans. My student loans are about $130,000. I have my master's. What does your husband do for a living? He's in sales. Oh, that's right. So he sells steel buildings. How much are your cars worth? We're a little upside down in one of them, but the loans on those are about $40,000, $20,000 each. Okay. And what's your household income? $40,000.

He can make anywhere between, yeah, I'd say $60,000 for him, $70,000 if he's doing really good. I'm going to give this to George. You've got to follow the baby steps. You're familiar with the baby steps, yes? Oh, yeah. Okay, so here's the deal. Your husband is in sales. In Colorado Springs, only making $60,000. He needs to sell something that he can make a whole lot more money.

Listen, you work yourself silly with the limited time you have and make $12,000. That's like throwing a pebble in the ocean. He needs a six-figure sales job and working weekends and everything else. You need the stability and the benefits for where you are now. You guys got to clean up $250,000 of consumer debt. Sell the cars, everything we always say, but he needs to go make a whole lot more money. He's selling the wrong things and not enough of it.

Yeah, we got a big hole here, and we got to get that shovel to match up. That puts this hour of the Ramsey Show in the books. I'm George. He's Ken. Thanks to all the folks in the booth. And you, America, will be back before you know it.

Hey guys, I'm Rachel. And I'm George. And you've probably heard our voices before on The Ramsey Show. And do we have a surprise for you? Yep, we have our very own show, Smart Money Happy Hour, where we talk about pop culture, current events, and of course, money. George, it's a great show. And what else do we talk about? So much, Rachel. Not enough, and yet too much. We talk about guilt tipping, because tipping is out of control and I won't stand for it anymore, which is why I'm sitting. I'm glad you're taking such a stand. Okay.

And we also talk about something else I'm passionate about, Disney adults. Oh, George. Why is it a thing? Listen, some adults still find the magic. Sure.

We also talk about toxic money traits and girl math. And if you don't know what those are, you have to listen to the podcast. Yeah, there's a lot there, you guys. It's pretty fun. We keep you relevant is what I'm trying to say. We help you out. So pull up a chair to the happy hour you wish your friends were having. We promise you won't regret it. And if you don't have friends, we'll be your friends. We will. We're great friends. So make sure to check it out on Apple, Spotify, YouTube, or the Ramsey Network app.