You Can't Outearn Your Stupidity

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 actual, amazing relationships. George Campbell, Ramsey personality, YouTube sensation and newly minted bestselling author, is my co-host today, his brand new book, I'm Proclaiming It, a bestseller. It isn't technically yet, but it will be breaking free from Broke, the ultimate guide to more money and less stress. And by attacking all of the evil villains out there in the money space. George very carefully and with great craftsmanship, unpacks all of the traps that you have to avoid. And the people that are out there to get you and in the process, gives you hope.

That's the goal, and the feedback has been amazing on that. It's at exactly that people are saying. You've dismantled not only the myths, but all of the objections that I've had toward a debt-free lifestyle. And the things that you've heard over 30 years. Dave and I've heard them on the show as we take calls. And so what I try to do with the book was get in their heads before they could even say it and say, I know what you're thinking right now.

Well, and you clearly define, I mean, when we talk about it on the show here, a lot. What normal is normal sucks, and if you're going to be normal, you're messed up. And Romans 12 says Be not conformed to this world, don't be normal, but instead be transformed. How? by the renewing of your mind.

Yeah, and it starts with that paradigm shift, because why would you even attempt any of this Ramsey plan if you don't believe it's possible? And so when you start to think differently, the renewing of your mind, you begin to act differently, and when you act differently. And we see this on the debt-free stage, you believe that a different life is possible. It's amazing the relationship between those three.

I'm amazed people can run through a wall when they have hope and they can't cut paper. They can't find their way out of a wet paper bag when they have believed that the little man can't get ahead.

Oh, it's so easy, you look at the headlines, and it's easy to lose hope.

It's the natural state of mediocrity and of loser talk and busting through the loser talk and getting. I'm not going to live like this, I'm not going to live like this. And then you see a path, you see, I think I could go from here to over there.

Well, and I was that guy. I was cynical back in 2013 as the guy who fell for all the traps and followed the path. Society told me. $40,000 in consumer debt. I was cynical toward adulthood, and so I actually end the book with a chapter called Ignorance was Bliss. Because I believe, you know, too much to still stay broke after reading this book. And so I tell people it's easy to be cynical.

Yeah, and part of the action is clearly identifying that there are some people out there operating in the world that do not have your best interest at heart. Hello, their job is not to help you, their job is to take stuff from you. And legalized fraud, you know, we're going to, you know, legalized horrible financial products. And you know everything from the stupid timeshare, which is definitely legalized fraud. To the credit card point that nobody ever redeems.

To the credit score, that is the gateway drug into all of the debt.

Yeah, which is, you know, that's worshiping the golden calf there, you know? The Great Fico is now your provider. Oh, Great Fico. We bring you offerings of stupidity and interest.

Well, it's amazing, Dave, is that, you know, debt has not been around that long in its current form, our obsession with debt, especially American culture. And so I actually walk through the history of the credit score and the history of the credit card, because it gives us some perspective to go. Wait. This thing was like, invented by the 90s, that's crazy, this wasn't around.

The old American Express thing Don't leave home without it, turns out. Daniel Boone Did you know? I mean, who knew?

Absolutely, and you've talked about this, Dave, for years. That money is a tool, but for so many, money is an obstacle. It's not a tool that they can use to build wealth and give generously. Instead, it's a stress point, not a bless point.

What are two or three of the ugliest things you've found in the things that these companies are doing to people?

Oh my goodness, well. I interviewed an ex-Capital One manager who spilled the tea and said, Straight up, Capital one. 10,000 experiments a year on consumers to keep them trapped. There is a reason why they moved from cash back to points and rewards to try to confuse consumers. And they can devalue your points at any time if you don't play their game perfectly. So that was one piece, and the other was a Federal Reserve study that showed exactly where credit card rewards comes from.

Wow, so you're participating in wealth inequality, whoa, look at that.

That one was for the social folks out there who were going well. If you're going to get on your moral high horse, there's an argument that's hard to argue against. And one lady even messaged me and said, Hey, I had done the Ramsey plan, but we kept the credit cards. After reading that chapter, you convinced me to finally cut them up. I needed a shower after reading that chapter. And we decided, we're done with this game. It's not worth being a part of that system.

Well, these goobs are not agnostic, they're not without belief systems. they have a belief system, and their belief system says, take all your money.

Well, there's a reason. Capital One sponsors the Taylor Swift Tour, and we can't afford tickets to the Taylor Swift Tour. They are winning.

You can't beat the house, the house always wins, so stop playing the debt game.

Be free.

There we go. The new book, Breaking Free from Broke comes out. It came out this week. You can pick it up anywhere that important books are sold, like Ramseysolutions.com, your bookstore, Amazon, all those kinds of things. This is the Ramsey Show.

Yeah, I didn't even know that that was possible with a quick read. So here we are.

They sometimes will sneak on there, you never know. Good job, that's exciting, that's a lot of fun.

Hey Dave, thanks for having my call.

Sure, what's up?

Hey, so I've been watching your show since I was like 17. It's done me pretty good, thank God. I'm about 25 years old now.

Well, if you've been listening to me as much as you say, you have, you know the answer to that question.

That's accurate, I guess. My question was if I'm in an area where I know I'll have tenants. I know you always say you can't depend on them always paying your mortgage for you, but do I take that risk? If I'm so? I'm living with my parents right now, I don't have my own mortgage.

I don't borrow money because I don't think it's a risk worth taking. And I have not for 30 years told anyone ever once to go. Borrow money for an investment property because I don't think it's a risk worth taking. And that's probably not going to change today, David.

What do you owe on the first mortgage, the one that you have, the rental?

So I just bought it two weeks ago, it's a $400,000 property and I dropped 20, so I've got, I think, $325,000 left on that.

Yeah, I would definitely take this money, I'd probably cash out the stocks, I'd take the $75,000. I'd set aside. Three to six months of your personal expenses, keep that aside, and then I'd throw the rest at this mortgage and pay it off as quickly as possible.

Okay, fair, that sounds good. I mean, the $90,000 I'm talking about is aside from any emergency fund. I've got that set aside already.

David There's three rules in business. It takes twice as long as you think it's going to, it costs twice as much as you think it's going to. And you're not the exception. And so you're all bright-eyed and bushy-tailed. And you act like you can automatically get a renter. And you're in an unusual situation, so that there's no risk, and you're wrong, there is risk.

I hope he can afford that mortgage payment if he doesn't have a renter, otherwise he's going to be up a creek without a paddle.

Yep, that's the thing. So guys, I don't want to pick on David straight out of the chute here, but let me just go ahead. And I'll remind some of you that are fairly new to this place. If you come on here and you say, I've been listening to you for 10 years and you know what I'm going to say, don't be shocked that I say what you think I was going to say, because it's kind of been the same.

You're very consistent, David, Yeah.

I mean, my pastor said, Dave, you're a one-trick pony, you only have one story, and I said, Well, so do you ah-ha.

One sermon.

That's hilarious, so true, I've been preaching the same thing.

Oh, there you go. Open phones at 888-825-5225. Natalie's in Los Angeles. Hi Natalie, how are you?

Hi, thank you for taking my call today.

Sure, what's up?

My question is. My husband and I have been saving for a house for almost six years. Our plan we thought would be three to five years, but then Covid happened and everything. And inflation, and we still aren't in a position where we can afford a house. And so my question is, we have money saved and I'm not sure what we should do with it because it's just sitting in the bank.

How much do you have saved?

We have about $90,000 and my goal is by the end of the summer we'll have $100,000.

That's awesome. So can you just drop it in a high-yield savings account, like one of those online ones?

So how long would you suggest? I guess you just....

The high-yield savings accounts don't have a time on them.

You can just drop it in there and kind of set it, just forget about it. And when you're ready to use that money, you can pull it out. There's no stipulation on pulling the money out.

Oh, okay.

I'm a little curious, what's your household income?

So we have a very unique situation. We live in L.A. County. My husband is a school teacher, we live just on his income, but we don't pay any housing expenses. We manage a property, so I'm a property manager.

What's his household?

Yeah, so it's 57 a month after taxes and health insurance.

Okay, so he's making $80,000 a year, and you've saved about $20,000 a year for five years, right? Mm-hmm, okay.

Yeah.

How much house are you trying to get when the time comes?

I mean, at this point, it's like, I'm not very picky, like whatever we can get.

Well, that's.

I'm not quite sure. We've kind of said maybe we'll leave the state, but we just haven't made that decision yet.

You live in one of the most expensive real estate counties in the world, and you make $75,000 $80,000 a year, and so that's what you've got to consider. I mean, L.A. San Jose, San Francisco, New York City, London, Tokyo. these are super expensive markets. San Diego not far behind, right? And so I'm not telling you to move. But you may reach a point that what you get paid, you can't afford to live there. I mean, you can't....

Listen, my sister-in-law was a teacher living in Los Angeles, and they decided that they moved to.

Well, that's exactly true, that's very true. And you can start to make a decision about career path. And where do we want, what part of...?

Hi Ramsey, thank you so much for answering my call.

Did you get the degree?

Application.

Oh, did you get the degree?

I did, I got the degree.

In what?

In my Master's in Business Administration.

So why don't you go get a job?

I am, I'm in the process of doing that right now, it's taking some time.

Why?

And.

People are hiring everywhere.

Say that again.

People are hiring everywhere. You've got an MBA for God's sakes.

I know, I know I'm in the process of that.

Why is it a process? You should get a job?

Right now I am, I am interviewing exactly good.

Where are you interviewing?

Goldman Right now, Goldman Sachs.

No, I'm talking about what cities?

In Salt Lake City and Florida, Miami, Florida.

Okay, good. And what do those positions pay?

Right now in Salt Lake City, the cost is a lot lower, so they're not going more than $90,000.

Okay, so you're a 33-year-old, full-grown woman that's going to make $90,000 a year. Why would you even consider living with your mommy?

I know they just they came. They were like, Listen, you have $200,000 in student debt if you just want to come and recalibrate, but I just don't....

I think you've recalibrated enough.

Yeah, yeah.

You go wherever the job goes.

Whoever's going to pay you the most money, go get you some money and a life girl, it's time.

Yes.

It's time.

Yes.

I agree, you can't bob and weave and duck anymore, you get to face the whole thing now, you can do it.

I can do it.

You can.

You can do it. I hear someone that's more capable than she thinks she is.

Thank you, it hasn't been easy these past years.

No, it's not an opportunity. Hey, what's, you're hiding?

What's messing with your confidence because you're scared? What's messing with your confidence right now?

Yeah, really.

My confidence is the fact that I haven't defined the income yet. I'm still in that process, but I know I'll get through.

I wouldn't even put living with mommy on the table. Hon. Not even an option. I want you to go out there and lift some things and grow your back muscles so you get a strong back.

Yeah, yeah, that's what happened, yeah.

And you do really got to go do this now, and here's the thing you really can go do this. Getting an MBA is not an easy task.

Thank you, thank you. I forget most of the time due to the fact that I do. I hate loans, I hate that.

You're going to pay it off when you get a big old job and you work like a crazy girl and you get the stuff paid off.

And let's reframe how we're viewing this debt if you look at a pile of debt and all you feel is fearfulness. And oh my gosh, I did this and da da, da da. You've got to really refuel that and reframe that in your mind and say this has got to be the fuel for the fire. Like, I've got $200,000 of debt, I can't let it paralyze me, I've got to lean into it and go forward.

That makes sense, 100, yeah.

I don't want you running home if you're my daughter, my daughter's not a lot younger than you, I would tell you. The best thing you can do is strengthen your wings by flying, and you're capable of flying, you're capable of soaring. You've proven that by getting your MBA.

Hey, how's it going? Thanks for having me on the show.

Sure, how can I help?

Yeah, I just had some advice, questions. I feel like I'm on the right track, but I just wanted to hear it from somebody of stature. You know, other than my dad, who's an investor, he's got the mindset he's a business owner. But you know how hard it is for a son to hear something from their father and take it 100 to heart, especially about money and business decisions.

I think you need to teach your son just like your dad, did you you teach him to work?

He instilled a lot of good core values in me and I've had the same conversations with my dad. I spoke to him two days ago and he said, You know, I'm proud of what you're doing and you're going in the right direction. I just want to make sure I'm not missing any steps for my son.

A big old pile of money is not what a grown young man needs, they need work ethic, integrity, honor, dignity. You instill those things in them. Then they won't need money, they won't need money, and if you leave them money, then they'll take that money and do wonderful things with it. If they have those character qualities.

Absolutely yeah.

And so much of that's going to be them watching you do those things.

Yeah, it's hard to show them things like that, though, because a 5-year-old, 8-year-old kid's not going to understand sitting and looking at a computer.

Yeah, they do, they catch everything, kids catch and absorb everything. You would be shocked and amazed.

More is caught than taught.

It is my first time my friend's got kids, but this is my first one.

Hey, I'm going to send you. Rachel and I did a book together called Smart Money Smart Kids, How to teach kids how to handle money and how to work. And how to give and how to save and how to spend. And it was a number one bestseller. I'll send you a copy as my gift.

This show is sponsored by BetterHelp. Hey, good folks, it's Deloney. And with back-to-school madness on deck, my family's schedule is already so packed. And we haven't even made room for things like exercise and date nights and counseling and all the other things that make our life even worth living.

Jade Warshall Ramsey Personality is my co-host today. Thank you for joining Us America, the Ramsey show. Question of the Day is brought to you by Neighborly, your hub for home services. In case you're a new listener. What does that mean exactly? Well, Neighborly is a family of locally operated home service providers who are dedicated to giving homeowners excellent service.

Alright, today's question comes from Robert in Minnesota, he says. Last year, against the wishes of her mother and I, my 18-year-old daughter signed a lease with an apartment complex. She committed to one year, but she never moved into the apartment. Fast forward a year later, and now she's getting calls from a collection agency to pay back around $9,000 for unpaid rent. She is currently going to college, has no assets and no income.

No, I would not.

But I mean, like, even like to help her, because it's only going to get, it's only going to get more.

She's 18, she gets a job, get a job and pay it $9,000. I mean, come on, you can do it, that's a lot of money.

Right?

Would you help me with this? Yes, I'll help you. Here's what you're going to do, You're going to work, you're going to, you're going to scoop dog poop.

Oh man, I wonder why she never moved in, like, did she not realize that when she signed it?

Well, and then there's the other thing she's currently going to college, and who's paying for that? That's the question, that's the question.

True that?

Okay, and especially because it's not an act of love. It's an act of helicoptering, and writing checks is an act of helicoptering, and, you know, helicopters create snowflakes.

That's good, Dave, but here's what I'm wondering. Here's what happened. What if she was like, Mom, Dad, I'm moving into an apartment and they're like, we don't want you to do that?

What she does realize is her mom and dad love her and they're smarter than she is. Unless you're a rebellious little twit and then you go sign the thing anyway and you get to pay the stinking $9,000..

You were the rebellious twit.

I've done everything stupid under the sun that can be done, so I recognize these attitudes. The question is, for me, and what we don't have, the information we don't have. Here is the state, her current state of repentance, repentance, meaning I realized I was wrong.

Yes, I am.

I mean, because she's going to learn this lesson. If she's already learned the lesson and only has to pay the bill, that's the easy path. If she hasn't already learned the lesson. It's going to get painful before this is done.

Oh man.

And man let her experience that pain at 18.

Listen, Dave, you and I saw this on two different sides because you went straight to rebellious little Twit, which you own that. And I'm looking at this. Here's what I'm looking at when I was 18, Here's how dumb I was.

But you were sweet.

I did all right. When I was 18, I was dumb enough to think, Okay, I got student loans for school. And you know, if there's leftover, they give it back to you. Called a refund, right? They call it a refund.

You just borrowed too much money.

But I took that money and I thought that I was buying a car in cash, and I bought a car quote in cash with my student loan. That's how dumb I was. That's why I'm looking at this 18-year-old.

Yeah, but was anybody looking at you that loved you and said, Don't do that?

No, because when I told them, I said, I saved up this money in cash.

Well, no, but if they had realized what you were doing and told you not to do that.

They probably would have stopped me, yeah.

If they told you not to do it and you went and did it anyway, that's where we're sitting here. They said, don't do this.

Right? But she may not have known that when she signed that lease, she was locked in. Come on, Dave, think back 60 years.

Yeah, or 50 years, 50, thank you, but yeah, it doesn't matter a lot of decades.

Dave, you were smarter than the average bear, man. I'm talking about these.

But hey, mom and dad looked at you and said, Don't do this, it's a dumb idea. That's enough.

That's true.

That's enough. That's when you do full stop, that's when you do full stop, and if you don't, then you get to eat $9,000 worth of stupid. I'm not saying she's currently rebellious.

Oh man, that's funny, Dave. I think she was like, Okay, I won't do it, and didn't know that she did it anyway. Because if she was a rebellious twit, she would have moved in, realized after two months she couldn't pay the rent and then left, but I'm like, she never moved in.

This is a mystery.

This is unsolved mysteries.

It's so fun, you get to be the daughter and I get to be the dad. That's the funny thing here. I know, I know.

My dad would have been like, you're on your own.

Now you know how Rachel was raised? Okay, I'm just saying she turned out great. This is how you create a Rachel Cruz right here, okay?

True that, true that.

I need grace, I need lots of grace, and so I don't mind extending grace, but I'm not going to extend grace. That says, Oh, that was actually very smart when it wasn't.

To the extent they don't learn the lesson.

Right, because it's not helpful, I get that.

Hey Dave, thanks so much for taking my call.

Sure, what's up?

So I've worked really hard and I've sacrificed a lot to pay my way through school. I've got one class left in my bachelor's and I plan to go on to attain my master's degree in business. Cool, I've saved up my money really well. My girlfriend and I live together and we've been together for two years.

When are you planning to get married?

I'd like to get married in probably two and a half to three and a half years.

Why so long?

Well, we've had a few ups and downs in our relationship and it's been going pretty well. But I also want her to get some school under her belt before we go and figure out some other financial things before jumping into that with both of you. And I kind of want to have her grow with God a little bit more, my relationship with God is a little bit stronger and her and I are growing in the faith together. But I kind of want her to get to a good point with God and with the idea of marriage before jumping into marriage. Because I want her to have a chance to really succeed rather than fail like more than 50 of marriage.

Okay, so Dylan, I hear you saying that you've got a point. You want her to be somebody different, you want her to grow with God.

No, not necessarily a little bit. I just want her to have an opportunity to grow with God, because she hasn't had a chance to really meet God. Only except for when she kind of met me.

Is she a Christian person? She's a Christian person, yes, and you've been with her two years.

Correct, okay.

I'm just being honest with you, I don't know you, I just met you two seconds ago, listening to you talk. You have a version of her that you want her to be. We don't know how long that's going to take.

That's a good point to think about.

And then other than that, because then it's like, okay, like when couples who are dating are in therapy, I'm like, listen, give it up, like you shouldn't be in therapy yet. So does that make sense? I'm just a little worried about some of the things you're saying, don't get me wrong.

Yeah, that's a long time, that's like you're waiting on someone else to grow up and or something like that. I mean, she's 14 and you're waiting until she's 17. I mean, I don't know, but I mean, that's the way, that's kind of the that's a long time.

Honestly.

You didn't understand. It involved blood and guts, and animals dying, and so on.

They're not puppies, they're old and crusty.

It's, you know, so you're not, you're not six anymore, and so I'm, I'm guessing she has moved past that. But, you know, if we're blowing up a six year old's dream, that's fine if we're drawing up, blowing up a 24 year old's dream. And saying, Define it and approach your dream as an adult. So it doesn't become a nightmare that I'm in.

Yeah.

And we can go that direction. And so, yeah, I would, I would do that. Um, Dylan, I'm going to jump on one other thing and then, uh, cause you, you walked into this brother?

Yeah.

Did you say you're living together?

Yes, for financial reasons for her, she wouldn't have a basically a place to live.

You remember that, you remember that God part?

Yeah.

Yeah, you remember that Bible that goes with that God part.

I hear you, okay. I felt like that was coming.

Well, I mean, you know you, you.

Well, I got another one coming. I don't like that, He's like taking care of her, I don't. I don't like that. I feel like she didn't have a place to, she didn't have a place to live.

Dylan, I'm talking about you.

But I don't like this relationship, I don't.

I want people who are equal and they see eye to eye. I feel like you're up here and and you're viewing her down here and your big papa who's got to take care of her. I don't like that.

Pretty young to be a sugar daddy. This is the Ramsey show.

Is completely new.

Good stuff, new content around, old ideas, that's right there we go, which is what we've always done, by the way.

Hey, thank you guys so much for the opportunity to be able to speak with you here.

You too? What's up?

So I'm 34 years old.

How long have you been married?

I've been married almost seven years, I have two little girls together.

Oh man.

So my question, as direct as I can be with it, is. I have bought into the baby steps in the process and everything that we have been working towards has been in line with that. And now, with this divorce, it's kind of obviously thrown a big wrench into those plans a little bit. So what I'm trying to figure out is I purchased the home that we live in before we were married, so I know the house will stay with me. What I'm trying to decide, though, is I have about $71,000 worth of debt and I have roughly between $200,000 to $250,000 worth of equity in the house. The plan was always to pay off the debt, sell the house, and then use that money to build a house outright and become completely debt-free.

What do you make?

I currently make $84,000 a year, but within the next six months I expect that to be between probably $100,000 to $120,000. Based off of the incentives with the new company that I'm at.

What is the $70,000 in debt?

I have $18,000 in credit cards, I have $30,000 in a truck, I have $10,000 worth of student loans. And I was previously at my own construction company, so I still have about $13,000 worth of debt related to that company that I'm working on.

What is she driving?

She is driving a vehicle that her parents had given to her.

And it's paid for.

Yes, sir.

Okay, how old are your girls?

Five and one will be four tomorrow.

No, I would sell my truck, I wouldn't sell my house.

Correct.

And you make $120,000 a year coming up soon. You can pay off $40,000 in debt really fast as a single guy, with nobody telling you what to do.

Right, unfortunately, the $30,000 is what I owe on the truck, but I'm upside down in it. I took out a higher interest rate loan on it than I should have known better than to do.

How much upside down?

Probably about $9,000.

That's okay, go borrow the $9,000 you got any money at all.

I have very little saved up the transition from when I was self-employed to now working for somebody else. I had about a two-and-a-half-month period where I had very little income and that drained a lot.

So what do you have saved?

I have about $2,000.

So, yeah, you're going to get a loan for $9,000 if that's truly the difference. You're guessing because you haven't really looked it up, because you didn't say so. I'm going to find out from Kelly Blue Book what the private sale value on this truck is, and let's get it sold. It is the biggest item in your situation, and it moves the needle the fastest, the furthest, and it's just a stupid truck. I would hold on to the house.

No, I'm not, I promise you, I have no emotional attachment to the truck.

I know, I know, I know.

That's what I'm thinking.

Not at all cost, but if I can choose a truck over that, I'll choose keeping their bedrooms there.

Yeah, I'm also looking back. He said. He had $13,000 from his construction business. I'm wondering if there's some things that he can sell off to clear that a little bit, if there's something laying around.

There may be some negotiation with some of those vendors at Pennies on the dollar because they don't think they're going to get paid.

True that you've got options.

Yeah, I think you can plow through this debt pretty quickly. If you got rid of the truck. And that's where I would go before, I would go to the house in your situation, Rob, but it's not wrong to sell the house. I just think this other route might be better.

Hello, thank you for taking my call.

Sure, what's up?

Well, we started doing your program several years ago, kind of got off track, now we've got our baby steps kind of all jacked up.

Your baby is walking with a limp.

Pretty much it's like bow-legged or something.

What's your household income?

$75,000.

We're joking around about your baby and all this stuff, but are you guys really going to do it this time?

Yes.

Really.

Yes, really. yes. I have a daughter that's getting ready to go to college.

Then let's line this up and do it exactly like we teach.

Right, exactly.

No flinching.

Is the credit card debt it? What else is there?

We have a car, yeah.

How much do you owe on the car?

How much is the car?

$35,000.

$35,000.

$75,000.

You told me that I'm sorry and you have $15,000, how much in your emergency fund?

$10,000.

Okay, go ahead, I'm sorry.

And then you just got the $5,700 on credit cards, that's it, right.

And our house is $54,000.

Okay, but that doesn't come until later. So why can't you reach over with this emergency fund? why can't you reach over, pay off those credit cards? And let's look at this car and see about downgrading it, and aren't you done very quickly after you do that?

Pretty much we just didn't know with that 401K if we should, since we're kind of did the baby steps backwards if we should pull out of that.

We're not going to worry about having done them backwards before, we're going to start going forward right now. Okay, right now, if you started and you'd never heard of us before and you called us today. We would tell you. To take everything out of your emergency fund down to $1,000 and throw it at your smallest debt, how much in the emergency fund again?

$10,000.

Okay, so we paid off the credit cards now. have you cut up the credit cards yet?

No.

You have.

Yeah.

All of them.

I only have one. What happened is –.

Is it cut up?

It is, it is. What happened is we had like three or four just little ones, and then we transferred them over for 0 APR for 24 months. Yeah.

But you never paid it off, didn't work.

No, the 24 months don't end until December 30th, okay?

So, write a check today and pay off the credit cards.

Now, what about the car?

And then you need to sell your car.

Okay, see, I've already been doubling up on the car.

The car's too expensive.

It's too expensive for you.

You don't need a $35,000 car when you have a $75,000 income. Mm-hmm. You shouldn't have vehicles totaling more than half your annual income, and you do because you have another car.

Right, that's the only one we have, though.

You have one car.

One car, yeah.

Okay, all right. Well, you're right at half your annual income. If you want to keep it, you can keep it, but I probably wouldn't. I think it's too expensive.

I'd sell that car simply because they need to feel something like they've been down this road. They had a boat-legged baby. This is how you start walking, right, is when you feel it.

Yeah, I would, and the thing is, it stands out in the situation.

100%.

It looks weird, yeah, it's the only big thing laying there, and it's a car and it's an out-of-balance car. So there's a lot of things that say, sell it.

I agree.

I would if I were in your shoes. And it's not to say you don't get a nicer car later. But I wouldn't have that car. And I would get rid of those credit cards today, I would not cash out the 401K, nope.

Something tells me they're a single income family. Did we ask that? Something tells me there's room for somebody to start working more, yeah.

Could be, could be, it's possible. No, we did not ask that, but it's possible. Rob's in Ann Arbor, Michigan.

Hey, thank you, thanks for having me on the show. For the situation I'd like to throw at you guys and get your opinion. I have a son who's a senior at Naval Academy. They're responsible.

Yeah, it's a horrible benefit.

Well, I surely agree. It could be. What he's done, though, is taken that loan and he's dropped it to a 6 CD, and what he's going to do is when the CD matures. It's about the time the payments are due. Put it in a high-yield money market and then just draw off that fund to pay it back over the term of the loan. And looking at the numbers, he'll probably put $7,000, $8,000 in his pocket once the loan is paid off. What would be your thoughts on that?

$7,000 does not make you rich. He's put a lot of risk at his footsteps. Oh, this is so scary. No, there's so much that can go wrong here and so little that can go right. If he does it all perfectly, he doesn't make anything, don't amount to anything.

Hi, how are you?

Better than I deserve. What's up in your world?

So I just want to give you a little bit of background. I'm a graduate student right now, and I have usually been working three jobs at the same time while getting my degree. So that I didn't have to take out loans for grad school.

Good for you. What are you studying?

I do have some loans. Wildlife biology.

Say it again.

Wildlife Biology.

Oh, wildlife biology. Okay, cool, okay.

So I was able to follow your methods. And I was working on getting my debt as low as possible because I did have some student loans from undergrad. But unfortunately, due to recent life, I've had to pull a lot more out of my savings than I would like. So now I have about equal amounts of debt that I have to savings. And I hopefully will graduate in May. But there's no guarantee that I will have a job straight out of school. Because the market is so flooded in my area. So I was wondering if you had any advice on which debt to focus on first and foremost?

Okay, have you got all the bills paid from now until May? So there's no debt associated with the graduation?

So I have about $1,000 of tuition left to pay for this semester, but I paid all of the rest of it.

And you have the money to pay the $1,000.

In savings, Yes, I do.

Okay, because I don't want to add any debt, that's the first goal. Yeah, so graduating with no new debt, and then how much debt is there now?

So I have about $3,000 of student loans which were originally paid off, and then Biden said he was going to refund them. So now I have to pay it off a second time.

Okay.

And then I have $3,000 in car loans, about $300 in credit card debt that I've whittled down from, about $1,000 and $300 in medical debt.

Okay, well, you're a hardworking lady, you've been busting your butt. I can tell by the numbers and the way you're talking through this, and you're really on top of and know your numbers. So that tells me you've been very intentional in concentrating.

Yes.

And you're telling me you've got about $6,000 or $8,000 in savings.

Yes, I do, yeah.

I'm not going to start your total money makeover until you graduate and start your job, because it's only a couple months away.

Should I focus? Should I focus on trying to pay down the student loan debt before I graduate so that it doesn't accrue interest?

If you have extra money.

But I shouldn't spend my savings on that is what you're saying.

That's what I'm saying. I think I want your savings there as a buffer to get you out of school. I mean, you've got two little ones, I'd write a check and get rid of those two little ones today. $600 worth three each, right?