If You Follow the Proven Plan, This Stuff WORKS

headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically with your money, in your work, and in your relationships. The phone number to jump in is 888-825-5225.. That's 888-825-5225.. I'm Ken Coleman, joined by George Camel.

want to be anyone's guru, but I see where you're going with this. All right. The.

point is, people are going, okay, they're new to the show. Okay, where's Dave? Money and work. Money and work, and that's what we're going to do today. We're going to help you out there.

City. Oklahoma, Heather, how can we help? Hi. Okay, so my question is, my husband and I are currently on Baby Step 2, and so a little over $700 a month is going towards our debt payment. So once we get done with Baby Step 2, and then also have our fully funded emergency fund, then the next step is doing 15% towards retirement.

this budget and go, where are these money leaks happening? Because sometimes it's an income problem, and that's where our friend Ken Coleman comes in handy to go, let's increase the income. Because, truthfully, 15%, even without debt. for some people, it's too tight. Now, if you've got a dollar for every name, and you're still accomplishing all your financial goals, it's okay.

hanging out, or is it both? I don't think it's much expenses. I mean, I don't use your guys' budgeting program, but I do use the YNAB. You Need a Budget program. And so I'm very aware of our expenses and all of that, and everything gets a job and is accounted for.

you call that? Is that like a manufacturing... I guess you're manufacturing milk? Yeah. Okay, and how long has he been doing that?

doing? I'm working part-time from home, doing data entry, and one of the reasons why, and so the reason I need something flexible like that is because we have five children, five young children, and two of them are special needs, and so like I need to be able to take them to their appointments and things like that. Okay,

so, and your husband's working, did you say 50 to 60 hours a week? Yes. Wow. And so.

he makes like, I think, $22 an hour, and then anything above 40 hours is overtime. And then he's even like Ubering some nights after he gets off work, there's days that, like, I don't even see him. Oh, okay. Is there room for growth?

in this field where he can be making $25, $30, $35 an hour in your area?

Working in maybe management?

time. More than 60 hours? He's already there all the time. So if he can be there 60 hours and make 80 or 100, I would rather that. Is he not...

more the managers make. Well, here's my question. If I were sitting with him.

today, I would say, okay, based on your skill and your experience, what is transferable out of that industry that he's in, or specifically that type of company where he could, I mean, he's got, my guess is he's got a lot of skill and a lot of experience that would be transferable to where he could be making $75, $80,000.. What does the path look like to that? Now, that may take some time, but it may not. And I think many times it's very intimidating for somebody. In his shoes, he's been doing this for 10 years, and he wonders, am I limited?

correct? Yeah, I mean, he may be maybe $10 to $20 an hour, maybe like $20 at best.

Yeah, that's not worth it. What are you bringing in with your part-time?

work?

That's right. On an hourly basis. Yeah, I think that's our room for growth. I think he treats us like a full-time job. I really do.

can. I think there's a path to that. What's your mortgage payment?

to have more cash flow every month. Yeah. But I will tell you, Heather, I mean, I wish I could take your husband on full-time. I believe we could get him into a $80,000 with a path to six figures. That's what we've got to be thinking about.

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Welcome back to the Ramsey Show. I'm Ken Coleman. George Campbell joins me. We're your guides this hour. We're here to help you win.

Hi. Well, my wife and I, we have had some money discussions recently because I was living check to check. We were living check to check, and I recently lost my job.

Oh, no. What happened?

Well, it's a company that was going through some changes, and in the technology industry, where I've had a lot of experience, there have been a lot of changes lately. So I was one of.

those changes. Well, listen, you're not alone. Spotify just announced massive layoffs today, interestingly enough. So that happens in tech companies. They staff up, then they staff down.

Yep. Yeah. We would hire engineers and everyone else you would need for software companies.

Okay. So you know what's going on. You have a good idea of the landscape. Is that true?

Absolutely. Yep. I've been doing it for about 15 years.

And what's great is, your skills are very transferable to any company that does HR and recruiting, which is every company. So I believe you're going to bounce back quickly, but let's talk about where you're at right now. How are you guys keeping the lights on?

Is there other income? Is there severance? So I did receive a severance, and that's also why I'm calling. We do have quite a lot of debt, and we are trying to figure out what we should prioritize here over the next couple months. When it comes to the industry, a lot of my colleagues have had changes over the last several months, and my concern is how quickly I can actually get back up on my feet.

Well, you know, I'm a big fan of debt payoff, but this is one of those times where we would call this storm mode, where you want to just pause and stack up as much cash as possible to weather the storm before we go make any financial moves, and that includes paying off debt. Okay. So the goal right now is let's maintain, let's keep the lights on, food, utilities, shelter, transportation. That's your A1.. If nothing else gets paid, those get paid.

step is. Is your wife working outside the home? No, she's not. I've made a commitment to provide for the family, and she's taking care of our son. Okay.

Yes. Hey, listen, I'm going to jump in real fast. Just as George said, there are times where we kind of deal with the snowball. I think there's times where we have to maybe be flexible with some principles and commitments. And I love the fact that you said, I've made a commitment that my wife worked from home, but she's got a 12-year-old, not a 12-week-old, not a 12-month-old, and maybe for a season, she's working at least part-time.

Thank you. I appreciate the advice. So what's your plan currently? Let's say you don't get a land and HR job for the next three months. Are you going to just burn through the severance?

That's not the plan for me right now. I am working every day, looking for a new opportunity. And I'm also basically starting my own business. So putting up a shingle and reaching out to contacts for either work and or offering my services. So definitely...

Like HR consulting or what?

HR consulting, recruiting consulting. I've also had to run some HR layoffs recently as well. And so I've been on both sides of the table and unfortunately there are a lot of reorganizations.

going. So I can help with that as well. So, on top of hitting up your LinkedIn crew, unfortunately that doesn't pay the bills. So we need to do something that is actually creating an income right now, even if that's work in retail. And that might mean swallowing our pride and going, I'm going to do whatever it takes to make that 20, 25 bucks an hour to keep the lights on this month.

Yep. So the severance is two months worth of pay. And it's going to be gone in two months. So...

And you have no savings?

The savings is very minimal. I have my 401k, but I don't want to really cash that out right now.

Okay. So yeah, give us a number. How much money are you going to have in the bank?

Yep. We have 30,000 right now.

And that will only get you by for two months?

$15,000 for monthly expenses.

How?

We have a lot of debt and I was making a lot of money.

So you guys have a car you can sell?

We do. actually. It's on our list.

I think that needs to get sold today. This is, I mean, how much money were you making?

I was making $190,000 a year.

And what's the total debt load?

We have a mortgage that is at $480,000, with the second at $80,000.. And then we have about $60,000 in credit cards and about $60,000 in loans.

And the car loan, $60,000?.

The car loan is separate. That is at $30,000..

What's the other $60,000 in loans you said, after the credit cards?

Those were debt consolidation loans. So credit card consolidation loans. And then we're dumb and ran out of cards again.

Man, you guys make way too much money to be this broke. This is a sad wake-up call. I wish you didn't have to land this way with the layoff. But I hope this is your. I've had it moment.

And I'm now going to say I think the wife needs to work full-time. The 12-year-old can let himself in after school.

Is the 12-year-old in school right now? full-time?

He is. He is. And he can let himself in.

Yes. Hey, man, let me tell you something. I hope you're receiving this with the right spirit. But it's time for her to work. I mean, it doesn't have to be forever.

Maybe three months from now, you're back to making $200K. But even then, you guys have a giant pile of debt to clean up. So maybe she works until we're totally debt-free.

A hundred percent.

Because living in that area, you know, the Bay Area is where you're at. Sacramento, where are you at?

Pretty close. Pretty close. I can drive to the Bay Area today.

So life ain't getting any cheaper out there. And so this is a scary moment where you go, are we going to have to move? If we can't sustain this lifestyle out here, you know, that's a tough spot to be in. So I would just have some hard conversations with your wife and say, honey, you know, I wanted you to be able to stay home full-time forever. Right now, here's the sacrifices we're going to have to make.

Okay. You got it, Nathan. They're your marching orders. I mean, this is doable. I mean, it's not impossible, but I can't stress this enough.

Yeah. Well, you know what, Ken? This is going to be for our friend, Nathan. It's going to be a comma, not a coma. And he has to remember that.

Get busy. Keep bringing money in, do whatever it takes, and then it's going to get better. All right. Good stuff. Thanks for the call, Nathan.

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Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. We're here for you this hour. The phone number is 888-825-5225, 888-825-5225..

You might as well have mentioned, hey, go to your nearest payphone and give us a ring.

Yeah, some guy on Instagram was like, oh, yeah, from the payphone, the toll-free number from your home phone, all of the things. So I've got to work on the old man references here.

I like that you remind us of what a different time we live in.

I think that's what I'm unwittingly doing. That's the sad part. But we're still helping people, no matter if it's toll-free or not.

To your credit, there is no toll. It's a free show, which is amazing.

I know. I'm just trying to keep the young kids attached. Let's go to Hayden, who's in Lansing, Michigan. Hayden, how can we help?

Hey, guys. First off, I wish you understood the impact you've had on my house in the last 12 months. You have flipped the place upside down, and that's the reason for my call. My wife and I have been married for two years now. Brought a little baby girl in in the spring.

Cool. Well, I'm glad you called. Sounds like you're ready for some more life change. You guys have already been at it, but you're saying we're ready to fully combine. What does that mean?

So she has the checking and savings. I have a checking and savings. She pays some of the smaller bills. She's a stay-at-home mom with a side business that keeps her busy. I'm a full-time sales guy making anywhere from $100 to $150 a year.

It's this simple. You can actually make your account into a joint account. So you don't even have to go make a new account. You just go to the bank and say, hello, we'd like to make this a joint account instead of just mine, and then she can shut her accounts down, and you guys just use one checking and one savings, and that's it.

That's exactly what we did last week. The only hang-up there, we have her car that we're both paying on very quickly to make it go away. That's on her account, so we can't kill hers yet because we've got to pay that car off because we don't want to refi it. We've got a great interest rate at what it is.

But where does it get paid from?

She takes her side business money, and that is her sole bill today. I have taken over pretty much everything.

I'm confused. Can't you just pay that car loan from this other bank account starting tomorrow?

We could, yes, but you can't close the account.

I'm not asking you to close the loan account, but you're saying it's tied to that bank account?

It is tied, yeah.

I don't know. I think you can just pay that loan from this different checking account. It's not tied to the checking account.

I think you're correct.

So I don't think there's any excuses left. I mean, you guys are done living like roommates. Combine it all, and you asked about what? about his money and her money. Just in your budget, there's a line item for Hayden's fund money, and that gets spent from the same checking account.

We just downloaded EveryDollar. We just dug into it. We laid everything out, what comes out every month, when it does. So we're probably halfway through a budget, I would say.

Okay. I'm going to hook you up with EveryDollar Premium that will actually connect to your bank account, which is going to make this whole process a whole lot easier. Would you use it if I gifted it to you?

Without a doubt.

Okay, wonderful. We're going to gift you one year of EveryDollar. You guys are going to get together on a weekly basis right now and just take a look at the budget. And before the month begins, you're going to make a new budget and go, what's coming up this month? And that level of communication and alignment is going to take out all the money fights, and it's going to take away all the stress of button heads on.

I think anybody out there that's been married for any amount of time knows that money can cause a lot of stress issues. You've probably seen the data about how. it's probably the number one issue of stress in a marriage. And one of the things that when we're separated on money, that being in the same account and then on the same page does is remove all that. There is unity.

Hey, guys. Appreciate you taking my call. Sure. I just wanted to ask you quickly. So I'm 33..

Awesome.

Just depending on what our expenses are. But really what we're looking for is the next steps, right? Neither of us are very comfortable or experienced in investing. And we're looking for what would be a good strategy for us, being the age we are, you know, kind of what we should be looking into and what we should be putting our money into.

Fantastic. You guys are crushing it, man. You're going to be in your early 30s without a house payment, which means baby step seven, which means, instead of investing 15%, you can increase that. And you're going, hey, what do we do now as far as investing?

Sure. Yep, exactly.

Cool. What's your current retirement options through your employers?

Yeah, so me, currently, I get a 4% match. So I've had that maxed out since I've been working, you know, just a 4%. But, you know, I haven't personally been doing the 15%. My wife is closer to that. She also gets the 4% match.

So let's get some clarity on what all the options are. And then you're going to filter through this real, simple strategy. Match beats, Roth beats traditional. So if you both have a match, let's invest at least up to the match. If you guys have Roth options, like a Roth IRA, let's max those out for the year.

Okay.

Did any of that click? Are you like, what the heck did, he just say?

Yeah, no, no, I do. I do believe, well, my wife does have Roth currently through her work as an option. So I know that is an option for her. I don't. So I've been kicking around the idea of getting one, you know, outside of my employment.

What kind of account do you have through your employer?

I just have the 401k.

A traditional 401k. They don't have a Roth option for that? Okay. So for you, you might go max out the Roth IRA and then go back to the traditional 401k and max that out. But that would be.

Yeah, so I make, just depending on the bonus for the year, I make around $120,000 to $150,000 a year, and my wife is right around $100,000 a year.

Oh my gosh, you guys are amazing. So you're making $250,000 about to have no house payment. You absolutely, both of you should be maxing out those 401ks, maxing out an IRA. If your income is above the threshold, you can look into something called a backdoor Roth IRA. And your next step, because I can tell you need some homework here.

Yeah, I love it. You guys have such a bright future. Love it. Good stuff, George. So fun when you kind of see the light bulb for people.

Hi. Well, I'm 25, and I don't have a college degree, and I'm unemployed. But I'm in a lawsuit right now. that's about to reach settlement. And so I'm going to have about around $3 million after I pay my lawyer.

Wow.

Now, how confident are you that this number is what you're getting? You said it's about to settle. So is this just all about signing, dotting the I's, crossing the T's? Just curious, before we jump into the advice on the money, how confident are you that it is, in fact, $3 million that you'll be walking away with?

Like 85%.

Okay. Do you have any idea what the range would be?

Definitely $3 million or more.

Oh, okay. Oh, okay. I got you. $3 million or more. Okay.

So my first question is, is this going to be taxable income, or are you confident that it will be tax-free?

Yep, it's tax-free.

Wow. And how much money do you have currently?

Zero. Well, not zero. I probably have like $100 going in right now.

That's pretty close to zero. Yeah. Okay. So this is life-changing money, and you're calling us to go, I don't want to screw this up. I want to be a good steward of this money and use it wisely.

I want it to last as long as possible.

Absolutely. And I think you can do that. I'm glad you're calling us and not going on a spending spree and then calling us later saying, I blew $3 million. What do I do now? So I'm glad we're on the other side of it.

One question, George, before you break the numbers down in the investing side of this and saving, are you planning to work in the near future?

Yeah. I mean, I was a college student, and I left school because I had to take care of my family. And now I'm kind of just trying to figure out, because I don't want to go back into debt. I already paid the college loans off.

Good.

And I am in debt, $12,000, but not for student loans. I just think if I go back to school, that's another thing. I'm like, should I pay it out of pocket, or should I take the loans out? And then I'm like-.

No. But maybe-.

You're going to have enough money.

I don't got to go to college-.

That's the issue. That's why I'm asking that. Like, what is it that you want to do?

I just want to, I mean, I don't really want to work for anybody.

You want to work for yourself.

I don't want to work for anybody, but I do, I mean, I don't mind having my own business, but that's never really crossed my mind.

Okay.

Well, I'll tell you what. I don't want to sidetrack you here. We've got some resources, George, I want to give her, towards the end of this call to kind of help you, kind of forge your path. But I was just curious. Here's what I don't want.

Excuse me. Yeah, this is-.

I did have a job. I just quit in October. I just, I mean, I was just, my job is really inconsistent with communication and I just was over it.

Okay, good. All right. Yeah, there's two pieces here. We got to find you a career you love, regardless of this money. And then the other side is we want to steward this wisely.

Yes, I'm about, I have, let me see, like, maybe like $15,000 in debt.

Okay, what kind of debt is that?

It's probably like $3,000 in credit card and then the rest is from like a car loan.

Okay, so when will you get the settlement money? When will it actually show up in a bank account?

In the next three months.

And is this a lump sum? You're getting $3 million just on a check or wired to your bank account?

Yeah, it'll be wired to my bank account. Well, my lawyer said that it's going to be a check with both of our names on it.

Who's our names?

Like my name and my lawyer's name, like the law firm.

Okay, is he getting a cut of the $3 million?

No, it's going to be, we're actually filling them for six.

Okay.

And then, um, but I was like, if I didn't divide it by 60%, yeah.

Okay, so there's a few things I want to tell you. Number one, the best thing to do with this money is just filter it through the baby steps. And so, as soon as you get that money, let's pay off the debt and get you a fully funded emergency fund in place, which is going to be six months of expenses for you. So we pay off 15K and then let's stack up, let's say what, 30K. Would that be a full emergency fund for you?

Yeah, that should be good.

And what that does, that's a never get into debt again fund, isn't it? You never need a car loan again. In fact, I would cut up the credit cards today and be done with them forever. Because you just became your own bank. You don't need Capital One's help.

Actually, I live rent-free right now because I'm living with my sister.

Cool.

And do you plan on staying in Baltimore long term?

No, I want to move to Korea.

Whoa, well, that's a dream. Yeah. Okay. And this money could set you up for that. if that's your goal.

I do want to work. Actually, I think I want to work for an American company and then work in Korea.

Now, wait a second. What happened to the person who said they didn't want to work for anybody, wanted to work for themselves?

Well, whatever I've done,

Yeah. Well, a couple of things. You don't have to work for the rest of your life. You do what George tells you right now. with this, and you invest this wisely, you're going to be fine.

Yeah.

And I think if you play around with that, you can figure that out. In fact, I'm going to give you my Get Clear Assessment. It takes about 15-20 minutes. It's going to measure your skill set, what you do best. It's going to measure what you love to do, work that brings you enjoyment.

So, Simone, here's your next steps. on the financial side. You need to assemble a dream team around you. And what that's going to look like for you is a really great insurance broker, because you need an umbrella policy to cover you. now, on top of great auto insurance, homeowners insurance, you name it.

Yeah.

Now, if you invest that $2.5 million, and you can get connected with an investing pro at ramsaysolutions.com, they can help you with this. If you just invested that into the stock market, and you saw returns of, let's say, 8% to 11%, you could have anywhere from $40 million to $100 million when you turn 60.. Does that blow your mind?

Yeah.

And so that's the power of compound growth. and letting this money grow for you, so that you never have to worry about money again. And I have faith you'll get there. Don't go, blow this money. Walk slowly.

Yeah, you got this, Simone. We believe in you. Hang on, we've got some goodies for you. Appreciate the call. Good hour, George Campbell.

Hi, George. Hi, Ken. This is Sonia, yes.

Yes.

We got it right.

OK.

It's such an honor to speak with both of you. I'm so nervous. My heart is pounding.

Oh, my goodness. Well, first of all, all right, take a deep breath and know that you're already doing a wonderful job. So we're here for you. You can't mess this up, because it's all about your story. So what's up?

All right. So we have two residences. We have a rental property out in Arkansas, and we have a primary residence out here in Dallas, Fort Worth, that we just bought last year. And my husband and I have been at a tug-of-war between whether we sell the Arkansas property as a paid-for rental property to pay off our primary residence. Or, I should rephrase.

Is this rental property changing your life financially?

Yes, in a way, because that would mean that it would, like, very quickly pay off our primary residence.

I mean, currently, with the rent you're getting from this place, and the headache, is it just, like, wow, we're making 50 grand a year from this rental?

No, we're not. Because if it's okay, I'd like to give you some numbers.

Sure.

And so we make a pretty decent income. We make about $220,000, and our rental property is worth about $350,000, and our primary residence, which we still have a mortgage on, is about $548,000.. We have no other debt. We have a pretty decent retirement 401k set up, and we're both under 40.. So I think, you know, either way, I know that we'll be okay.

Okay. What is this rental property bringing in?

It's bringing in about $24,000 a year.

Okay. And that's on top of your $220,000?. Correct. And what's your monthly mortgage payment?

Here, it's about $4,000..

So you're telling me, if you pay off this mortgage, you would have $4,000 back in your life every month?

Yes.

Which is double what you're making from the rental property.

Yes. And not to mention interest, because, you know, that's the killer, because we ended up buying it, I think, at the peak. Well, it's still pretty bad, but I know last year, right before it kind of slowed down, that's when we bought our current home that we live in.

So what's your interest rate on the primary?

5.5..

Okay. And what's the mortgage? You said the 548.. Is that what's left on the mortgage, or is that what it's worth?

It's worth about 675.. We have about 548 left.

Okay. Yeah, that's a hefty mortgage. Makes sense that it's $4,000 with those interest rates. And you're going to take all of the equity, all the proceeds you get from the rental would go on to your primary, knocking it down to about what?

That's what I would like, yes.

Close to 200 left? Yeah.

I mean, after capital gains, because we haven't lived in that, we've been running it out for the last, like, four years. So after the capital gains, I'm not sure. But it's still a very substantial amount that we would knock it down to. And, you know, it's just about, you know, I guess, us trying to be on the same page about it. But I am always, you guys have really changed our lives because I know we found you in the pandemic, and we've had two kids since the pandemic.

Absolutely. Well, I'm on your team, maybe not for the same reasons, but I think, you know, the way we look at it is this, and Ken, chime in on this. If you were living in Texas and you said, hey, we're looking at this investment property in Arkansas that we want to buy. You wouldn't do that, would you? It doesn't make sense to be a long distance landlord.

Right. And his argument is just that he does not want, he doesn't think that he's going to get an investment property at such a low, because when we bought it seven years ago, we bought it for like 200,000.. And so he just feels like it's just, that's not going to happen. now, even after we pay off our primary residence, which I disagree with. I'm trying to make this call just so that I'm able to persuade him that he does, and we end up selling it and putting it towards our primary residence.

And I'm like, you know what?

I will do it.

I'm glad you did, because he can watch this. You can actually watch this back. George asked me to chime in. This is what I'm going to say. I think that what he has to understand is that he's looking at this from a scarcity mindset versus abundance.

Absolutely. He also needs to remember that he almost doubled the home appreciation here. He bought it at 200 and now it's worth 350.. Let's celebrate that. That's a huge win.

Leverage it. That's what you have to think of is how much further we get ahead in life by leveraging this investment.

That's the right kind of leverage right there.

It really is.

Instead of debt leverage. So you guys have done a great job. I'm proud of Sonia and her husband.

I'm excited.

They're not even 40 yet, and here they are making these kinds of choices.

Hopefully Hubs gets on board. For the record, Hubs, George and I are with your wife.

It's three against one.

It's three against one.

I'm not a math prodigy, but I think we're winning.

I think it's one. if it's a vote. We voted. We'll see. We'll see what happens.

Inextricably tied.

Thank you.

That's the word you were looking for.

You knew it too. I love a good usage of inextricable. By the way, use that at your holiday party. It's a little bonus. And that's a 50 cent word that people go, okay.

I was going to go $10, Bob, but...

You think it's $10?.

It's a $10 word.

Okay, very good. Hey, listen, let me tell you what I think is maybe one of the most invaluable shows we do here at the Ramsey Network and the Ramsey Show. And that's our giving edition of the Ramsey Show.

It's a fan favorite.

We do this every year around Christmas time. What does that mean? We want to hear your stories. You're always the star of the show as we take your calls. But we want to flip it a little bit and say you're the star, but you're going to share stories.

That's speaking of generosity. We'll see how generous I feel this holiday season.

I'll try to be nicer throughout the rest of the show.

How many cashmere sweaters do you need, Ken? That's all I'm saying.

Well, you know, you need one of every color. Don't forget the cardigan cashmere is the double combo. That's right. If you really love me, that's what you'll get me. Just so you can make more fun of me.

I don't think they want it from us. I'll tell you that much.

I think they probably would like it if you and I harmonized Neighborly and kind of went up, kind of just the octave.

Yeah, let's work on that.

We're going to work on that. We'll see how that goes. James is shaking his head vociferously right now. Your hub for home services is Neighborly. When you need to make repairs, schedule routine maintenance, or get local help for home improvement projects, like George and I need, because we can't do anything around the house, go to Neighborly.com slash Ramsey.

Today's question comes from Maria in Arizona. I'm trying to make a decision. I recently started a new job, but I feel like the nature of the work is not my passion. However, the job pays really well. I'm making around $91,000, but I'm thinking about going into another position where I would be taking a drastic pay cut, more like $42,000..

Oh, I love this question. I love this question. And can I just tell you?

Tell me.

He's not here today, but Dave kind of doesn't like it when I throw this out there. And let me tell you what I think about this. And I base this on fact. Ramsey Solutions, George, as you know, has done the largest study of net worth millionaires, all time, over 10,000.. Number three in the top three group of net worth millionaires were teachers.

It's more and more bigger. That's increasingly difficult. Newer, nicer.

That's right. So that's philosophically setting up my answer here. And I believe that if Maria can live off of $42K versus $91K, that's a big cut, George. But if she and her family in that situation, they don't go into a super tight, paycheck to paycheck style of living, then I'm all for it. So if you can afford it, do it.

Well, they've seen their parents work jobs they hate.

They don't like the rat race. They're watching it and they're going, I don't get it. We're seeing more and more of these videos pop up on TikTok, and I actually applaud them. And so, in this situation, if you can manage the drastic pay cut, but on the backside of it, you're not hurting yourself financially, putting yourself in a negative situation, and you are content and fulfilled, I say absolutely do it.

Yeah, I like that caveat.

How controversial is that, George?

I think you have a great point. It's not all, you can't just look at, well, I would never take a pay cut. I've been there, and you might take the pay cut temporarily. Now, my goal for Maria is that if it's something she loves doing, that tells me that she's probably going to be really good at it, because she's focused and intense about it, which tells me she's probably going to be making more money soon. And so I would be looking at the overall trajectory.

I want to caution against that.

She might not be making $100,000 ever doing this, we don't know.

I want to use an extreme example here to make a bigger point, if we could. Mother Teresa lives her life in poverty. I understand, but the point is made. This is a woman who was given to ministry and service, and she decided to live, she changed her lifestyle to be able to do the things she was called to. I'm not saying we all are called to poverty.

But are you willing to make the sacrifices needed to do that mission?

That's the issue. What's driving you, stuff or significance? I do think it's that simple. And I think you could change your lifestyle to fit that. I really do.

I believe that. I believe that wholeheartedly. So just hold on to that. Yeah, if we were on the phone with Maria, we'd have a lot, a better picture of what her financial life looks like, if this is a good idea right now. But that's a great answer, Ken.

All right, let's get to Joe in Washington, D.C. Joe, how can we help?

Hi, yeah, I was just calling because I have some student loan debt. And I was just wondering the best ways I should go about handling that.

Okay, how much student loan debt do you have?

I have just under $40,000, $38,000..

Okay, and are you working in a job right now? If so, what do you make?

I am. Right now, I make $4,000 a month after taxes.

Okay, any other debt besides the student loan debt?

Nope, just student loans, no credit card or anything else.

Great. All right, George, how many student loans do you have? If you broke them all out, how many are there?

I believe four.

Okay, awesome. So if you look at the smallest debt, you want to attack that one first while making minimum payments on the rest. That's called the debt snowball method. It's just smallest to largest balance, focus intensity on the smallest one. And I had a very similar situation to yours.

How'd you do it, George?

It was side hustles, lean cuisines, living on less than I make, saying no to friends, keeping my lifestyle in check, all of those things. Over 18 months, you start to go, all right, this becomes a math problem, doesn't it? If you make $4,000 a month, you have $38,000 in student loan debt. I want you to pay it off. in 18 months.

I believe I can, but I also have $42,000 in savings. Oh, my gosh. My one predicament was if I should just...

Why'd you bury the lead, my man? Okay, this becomes a lot easier.

Tell him, George, we got about 50 seconds.

Pay it off today. That leaves you with $4,000, right? Yes. Now, we're going to build a fully funded emergency fund from there with this newfound money, because you just freed up all those payments. I'm telling you, it's worth it.

Sally and Fannie Mae, the sisters of misery.

Get them out of there. Sisters of misery. It sounds like a rock and roll...

Nice ladies, though. Really? You get to know. I'm kidding. Sarcasm, folks.

What a nice change of pace, Ken. You're going to be honest.

Yeah, we're going to be honest. So the amount of gifts we feel pressure to buy in America around Christmastime, it's endless, George.

I feel it.

It used to be the family, and then it was like, well, our Uncle Larry and Aunt Maude coming in. Well, we got to get him something. We got to get Aunt Maude. And then, at what point do you go, well, we're not going to send gifts away anymore. It's just all this stress around gift buying.

Well, the Ken Coleman show team, I know they're getting some nice gifts this year.

Yeah, the Isotoners are going to be great, thanks to Dan Marino. Okay, so what do I get? What if I get a gift that keeps on giving? And this is not the jelly of the month club from National Lampoon. Is it jello or jelly?

I think it's jelly.

I think it's jelly. How about meaningful gifts in our $12 sale at Ramsey Solutions? Our bestselling books like Total Money, Makeover, Baby Steps, Millionaire, Own Your Past, Change Your Future, Don't Forget, From Paycheck to Purpose, just $12 each. Questions for Human cards, there's only 300 of those decks.

Something for everyone.

Something for everybody.

I think they have it for dogs at this point.

I saw one the other day, it was Question for Humans, octogenarian version. Wow. If you're hanging out at the old folks home.

For those that have some years experience.

Because it's like a decade-sensitive type deck there. That's true. So that's out there. All kinds of great stuff at RamseySolutions.com.

Hi guys, thank you for taking my call.

You bet. What's up?

A few years ago, I stopped working my nine to five to do ride share. And recently they said that we can't do the luxury ride share anymore. So I've been going through my savings. But, most importantly, my daughter helped me purchase the car for Lyft. And I've been hearing her show that we should just sell these bad loans or cars with bad loans.

What were you doing before ride share?

I was working as a technical writer.

Okay. Were you making more money doing ride share? Is that why you quit it?

Exactly. I started making about $300 more a week. And I had more time for myself. So I said, it sounds like a better gig. So I started working less hours, doing ride share and earning a little more money.

Okay. Now, what happens when you get rid of this car? Because you just lost your full-time job, essentially.

Exactly.

Oh, you got two cars. One is for ride share. One is your personal, essentially?

Yes. Now, I had an old Bietersen in the backyard that I never drove. But now, if I can get rid of the car, I don't mind driving it.

So you're upside down?

Very, very much so.

All right. Give us the numbers.

I still owe a little more than $52,000.. And it's only worth about $25,000..

What car is this?

This is a Tesla Model X. And I used it for luxury driving. And they said, I looked, I said, we're not going to do luxury driving anymore in my area. So I can't, it can't support it. When I was, when it was going strong, I had no issues at all.

What year is it? Why do you think it's only worth $25,000? Is it just super high mileage because of how much driving you do?

Uh, the mileage and the condition, and they, they, they don't have a good resale value to begin with.

So, well, what year is it?

This is a 2016..

Okay. So it's older, but you bought it brand new back in 2016?.

I did not. I bought it used a few years ago.

And you still had a $52,000 loan on it.

Exactly. Yes.

Oh man. Well, you probably bought it. the height. On top. of, you know, the market car market taking a dip.

I've been, we've been going, I went through my savings trying to find another job. So I don't have anything. I have about $1,200..

And my guess is your credit is shot, considering your daughter had to co-sign for you.

Indeed it is.

Goodness, gracious. You know, when you said my daughter helped me, she did not help you. She enabled a terrible financial decision that she's now caught up in.

Two bad financial decisions.

What is her financial state?

You mean my daughter?

Yeah.

Uh, it's okay. I helped her, uh, get a, buy a house a few years ago. And the, uh, the car is actually doing damage to her as well. I did tell her to get a house.

I think y'all need to stop helping each other. Cause it usually ends up with bad decisions being made. Yeah.

I was going to say.

Let's let her do her thing and you do your thing.

Yeah.

So, George, I think there's no short sell option here, because he can't get a loan from a credit union.

Yeah. They're not going to give you the difference.

I think you're going to be working yourself to almost asleep. You're working like crazy and way better pay. You're not driving anymore, but you got to pay this thing off, or at least pay it down to where you can make a little something on it.

You still owe 52?.

I still owe a little more than 52.. Yes.

What was the original balance?

Uh, it was around 60.. I didn't originally have it for a ride share, but I got it because it, the free, it was free gas or free energy. I didn't have to pay for, for the energy to use. And I was using a ride share. I was paying for a lot of gas off that might well get this kind of free energy.

Going 60 grand into debt for free energy.

Basically.

Yeah. Okay. Well, you can try going to, you know, where the loan is held and walking into that bank and saying, I need to talk to the manager. Here's the situation. You guys have a bad loan on your hands because this car is only worth this much.

But you got to fight for it.

Those are three tough options.

But you got to fight for it. You got to really convince them that they're going to get their 25 or 27 back. They're probably not going to get the 50, whatever. And you got to hope that they look at that and they believe you. And there's your shot.

But I mean, you're going to need another job.

A couple of jobs.

Yeah, I'm looking out to do a replacement. I thought I could try to find something that makes the same amount, but I'm going to be selling here shortly and I need to get back in the workplace.

But again, like I said, two or three jobs. Four jobs. Selling everything else. You got anything else you can sell?

My house, actually.

Well, that's an extreme situation.

But then you're going to have... You said you own it free and clear?

Technically, because I bought it and then I maxed out some credit cards to get it operational. But yes, it's technically free and clear, besides the credit card that I maxed out to make it right.

Okay. And I would do some more homework on that car value, because I'm looking it up right now. It seems real low. What I'm seeing online right now is anywhere from 33 to 40 is what that car should be worth. So before you just go, it's worth 25, you might have a shorter gap or smaller gap than you think you do.

Okay, okay.

Yeah. That's just the same area as he is in it?

I just did my zip code with 100 mile radius and see what these cars are going for. 2016, Model X.

Okay, so Andrew, let's go. Let's go multiple sites, get the value up on that. Let's get the most we can, get to the bank and get busy. You got to change this stuff. And I would not right now sell that house.

That's a last ditch effort to avoid bankruptcy.

Yeah, don't rush into that. Thank you for the call. This is The Ramsey Show.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey Trusted Agents aren't just experts who guide you through buying or selling. They're someone you can trust to have your back from the first call to closing day.