Debt Is a Trap That Will Hold You Back From Building Wealth

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Number one best-selling author, Rachel Cruz, Ramsey personality, co-host of the Smart Money Happy Hour,

is my co-host today, my daughter.

Open phones at 888-825-5225.

Carol is with us. Carol is in New York City.
Hi, Carol. Welcome to The Ramsey Show.
Hello. Thank you so much for taking my call.
It's a thrill to talk to you all. You too.
What's up? I have a husband who's retiring within the next 12 months, and we'd like to finish paying off the mortgage on the house. Good.
Yes, but per your advice and our financial advisor is advising us not to because the mortgage is at under three percent and our investments are doing well above that. However, that doesn't matter to us.
We want to plow ahead and get this done and our next question to him is how can we best divest of our investments and pull the money out, make the cash available to do this. And his next tier of advice is to pull from our bonds that are earning at tax-free rates, as opposed to pulling from our mutual funds that we'll have to pay capital gains taxes on.
What do you suggest we do? You probably got no gain on your bonds. They're probably value is down, even though the coupon rate stayed the same.
But as interest rates rise, bond values go down. And so my guess is that you bought them during a lower interest rate environment, so they're probably not even worth what you paid for them today.

Is that right?

I'm not sure.

That's a good question.

I don't think you're going to have any gain to amount to anything.

So I like his advice on that basis.

Okay.

And what is your total nest egg?

$4 million.

Okay.

And how much is the mortgage?

$800,000. Okay.
Good. And you guys are how old? $69 and $67.
Cool. And how much have you got in these bonds? That I don't know.
That's a good question. Is it about $800? Is it enough to do this? I think so, yes.
Okay. Yes.
By the way he was talking about it, I was not that specific with him. Okay.
Is he the one that put you guys in the bonds, Carol, to begin with, or was that something that you had? Yes. No, he's been, we've been with him for our entire working career.
Okay. Okay.
Yes, I agree with his advice on that. I would use the bonds first to answer your question um okay okay this guy you you need to be aware of uh a couple things here with this guy um i'm not quite ready to fire him but i'm close right okay i hear you.
Number one, because his job is not to take his glasses on the end of his nose

and speak down to you little people who have $4 million,

and you shouldn't be paying off your mortgage.

Listen to the wise financial advisor, because bull crap. His job is to say, okay, what are your goals and how can I help you accomplish them? Yes.
So I don't like his approach to this, and it's very typical in the financial advising world, this level of arrogance. It's just below the – it's not overt arrogance, but it's a subversive arrogance.
But this advice is very prominent among financial advisors. That's the second problem I've got with him is he did two very standard things in the financial world that I completely disagree with.
One is he told you not to pay off your mortgage, and the second is he put you in bonds. Right.
And so these bonds, you have a fourth of your money tied up in something that's substantially underperforming because of this guy right gotcha okay and that's these bonds so i'm um and because here's the thing again the simple thing to remember about bonds is this in the financial advising world we have been taught and everyone for some reason decided to agree with it rather than actually making their own decisions, but the people like me and him that are trained in this stuff, we've been taught that as you get older, we use what's called the asset allocation methodology or theory, and that as you get older, you should be in less and less and less risk. And so that by the time of your age, you should largely be in bonds and money markets and have very little inequities, okay? The problem is that everybody just accepted this as if it's a fact.
It's not a fact. It's a theory.
It's an idea. And I disagree with it.
I'm 64. I have zero in bonds and almost the same amount in money markets.
I got a little bit in money markets just because I like some cash, but I haven't moved everything away from equities because as you get older, you should limit risk because that's horse crap. If I live to 94 and I'm 64 and I've been in an instrument making 8 instrument making 8% instead of instrument making 12 or 14 the amount of money I've lost during that 30 years is millions so it's bad advice this asset allocation methodology it's bad advice and so he puts you in these bonds the second thing you need to know about bonds is that they they are not

legitimately safer than stocks or mutual funds okay because when you track the volatility of bond values versus the volatility of bond of mutual fund stock values they're very similar it's not safer

it's really not

and the reason is the third thing and then i'll let you go okay is this thing but i mean it's teaching for everybody that's good it's good it's everybody out there so thank you bonds the thing you remember about bonds is there's a set interest rate on the bond so when interest rates rise in order to achieve that same, a higher, let's say you got a 4% rate and interest rates are seven. And so people are expecting seven, but your bond is only paying four.
So the value of your bond goes down as interest rates rise, it goes up as interest rates fall. Bond prices are exactly

inverse to the prevailing interest rate market. So in a record low in the last 100 years, we had an unprecedented 3% interest rate environment for a decade, right?

Mm-hmm.

Yeah.

And in the middle of the lowest interest rate environment in known history, this guy puts you in bonds. And where is it going to go from the lowest interest rate environment in history? Up.
As interest rates go up, your bond values go down. And so I'm afraid you may have actually lost money on these bonds when you get into them.
But I'm hoping you at least broke even. That's what I'm hoping.
So interest rates, folks, bond prices, the value of a bond goes down as interest rates rise. So you never would buy bonds in a rising interest rate environment.
You would buy them in a falling interest rate environment if you were going to buy bonds at all. And that's because of the yield on the bond has to approximate the prevailing rate.
And yet the coupon rate is fixed. Yeah.
And I think one of the most important things we've learned with the financial advisor is exactly what you said at the top of this, is that here are my goals. And if they're not respecting or hearing that, they're going to do the inverse of that, right? Where else have I got to figure out that you're giving me bad numbers? That's right.
You know? Yeah. So I'm not ready to fire this guy, but I really dislike bonds from him, and I dislike his mortgage advice.
and I dislike that he's kind of telling you what to do instead of asking you what you want to do. This is The Ramsey Show.
Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John.
Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys. I didn't even think about it.
And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.
That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse.
They've lost somebody important to them. Me too.
They don't know what to do next. You're going to have a crisis here.
You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow.
That's exactly right. These are the two options.
It's saying I love you to your family. Term life insurance.
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So I remember the year you were born, Rachel. I was standing in line at Kroger at the corner of Bell Road and Murfreesboro Road over there in Priest Lake where we used to live back in the day.
Those of you in the Nashville market will know that intersection. I think that Kroger's probably gone now.
It was 30 plus years ago, right? So, and i'm standing in line and i'm buying basic groceries not with your mom and a baby or two in tow and we weren't really spending like a ton of money and we weren't buying anything frivolous it was just meat and potatoes just to feed the family right we were broke and i remember as i'm back in those days you would write a check not use your debit card as i'm writing the check i'm wondering if by buying these groceries if there's going to be enough money left in the account to pay the electricity bill and i didn't know but i groceries anyway, of course. And then just kind of on a hope and a prayer, get home and everything works out and I can pay the light bill, right? The reason I remember that specific experience is I think it's the last time that ever happened because I started doing right after that, Sharon and I, your mom and I started doing a written budget before the month begins.
And we knew we had a certain amount of money to spend on groceries and that by spending that money, we weren't worried about everything else because we knew it fit in the overall, because that was a line item

and the electricity was a line item.

So we knew we didn't spend the electricity money on groceries or vice versa.

Yep.

We didn't worry because it was all laid out.

We had a plan.

And the amount of peace that we got, having the month laid out, as long as we stayed within

those guidelines, we knew the whole thing was going to work.

Instead of going from anxiety to anxiety to anxiety, every time you're paying a bill,

there's a freak out.

A question.

And I'll see you next time. we knew it was the whole thing was going to work.
Instead of going from anxiety to anxiety to anxiety, every time you're paying a bill, there's a freak out. A question always in the back of, is this okay? Am I okay? Is this okay? And even later on when we started having some money, buying something, a luxurious item, is this okay? And you've got to go, well, is it okay? And does it fit in this written-out plan where every dollar has been giving an assignment? Folks, if you want to have that change of experience in your life where you go from when I'm doing something as basic as grocery shopping and that being anxiety, an anxiety event, going from that to peace, the only step that does that is a written plan, a detailed plan.
And that's called a budget. Before the month begins, you're giving every dollar an assignment.
You and your spouse agree to it and then you stick to it. And that way, the electricity gets paid and the groceries get bought and the kids can have shoes and no one died yeah you know you know it's just like yeah it's a thing most people though have that experience standing in the grocery line crap I don't know when I finish this if we're okay oh yeah well yeah.
Well, and there's a thought, too, that a lot of people have that think, okay, if I know and I plan out and I do a budget and I see a number in a specific line item like groceries, then I can't just go and spend whatever I want. And that doesn't, that, I hear the opposite, too, of like, oh, that's just that sounds so constricting and like it's that sounds so controlling.

And I don't know if I want that. And then you start to realize there is an underlying level of anxiety, whether you address it or not.

When you still have a question mark in your head of thinking, OK, as I'm taking stuff and putting it in my car and I'm going to check out and I see that total.

The feeling of, oh, I thought that was going to be restrictive when I know, oh, this is how much I have to spend each week. it actually becomes such freedom.

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know what's going on you're creating anxiety with that immature look on life that's right

that's immature to go I can just spend like I'm in Congress yeah and that's just a that's a childish

view because obviously we all know we can't do that it's not I mean grown-ups know the money

runs out somewhere and so you know and and you know even like we had to go so far as we went to

Thank you. at.
I mean, grown-ups know the money runs out somewhere. And so, you know, and, you know, even like we had to go so far as we went to, we went hardcore more than we recommend today on the envelope system.
Like we had envelopes for everything, like envelope for groceries and envelope for restaurants. And your mother would not buy herself clothing because she's a classic southern bell martyr and she's like well i'll just be scarlett o'hara i'll make something out of the drapes and uh the kids can have new clothes and it's like no that's not necessary we have the money to everything so what would happen is we would have clothing budget and she would spend it all on the kids.
Wouldn't buy herself anything. So I had to finally separate in the budget in the early days.
Sharon's clothes was a separate category. And she was not allowed to spend that on anything but Sharon's clothes.
Amazing what that did. To give her guilt-free spending.
Yes. It is such permission.
Okay, we're okay. we can do this not only permission it was it became like a command you have to buy yourself something i mean it's not you know i mean really because it's it just got weird it got weird right right right right so the the thing you know and so we we had envelopes for everything and the first time we had a babysitter at home with you and Denise, and we're going out to dinner, one of the rare times we got to do that, as we're starting our climb out of being broke, and we got halfway to the stinking restaurant, 10 minutes away, and realized we did not have our restaurant envelope.
Now, we had the car repair repair envelope and most people would just go on and use the car repair money and when you get back home switch the money out i probably would have done that yeah i would i would do that today probably but we were so intent on something has to change we have to stick to something for the first time in our lives. We cannot keep doing the same stupid crap and expect to be anything but broke.
We turned around, went back home, and got the food envelope. I specifically remember doing that.
It's impressive, yeah. Blew the babysitter's mind because these people come back home 10 minutes after they left.
Oh, God! You know. So, but, or I guess her boyfriend probably ran out the back door.
don't know whatever but you know the uh right but anyway but i mean so we got the uh i'm kidding i'm sure angie wouldn't have done that but um uh you remember angie yeah but anyway she was a great babysitter but the uh um anyway the yeah so this idea that i can with my spouse write down what we're going to do, and I have guilt-free permission to spend on a category because our plan is accomplished and it includes this spending item. Yes.
Yep. That is so freaking powerful.
People, it changes everything. And John Maxwell used to say a budget is people telling their money what to do instead of wondering where it went.
So download the EveryDollar app and start budgeting. It's free.
You can do that in the App Store or Google play. It's a very simple plan and it has all kinds of extra paycheck planning.
You can plan out not only the month ahead of time, you can plan out each paycheck ahead of time. Yeah.
The premium version is so worth it. You all, because the trans you connect it to your bank account.
So your transactions drop in, so you drag and drop them. So some people still use the cash envelope system, but most people, this is like the 2024, 2025 way of doing.
Version of it, yeah. And you don't have to go back home.
But you're sitting there and watching it and you're able to drag and drop these transactions to know per category what's left. And to your point, all the other features, the paycheck planning, because some people, if know, if you are paycheck to paycheck cycle, it is so difficult to break that because you're using that paycheck to funds your life up to the 15th.
And if too much is getting taken out at the beginning of the month, you're going to be bouncing checks more. I mean, it just, it gets, it gets really complicated.
So the paycheck planning helps even within that to get on a great cycle when it comes to your paychecks and to stay on top of it. It's so helpful.
Guys, you've got to start doing this. It changes everything.
You'll breathe different. Your shoulders are dropped.
The tension will leave. Download the EveryDollar app.
It's free in the App Store or Google Play. And get yourself started, boys and girls.
This is The Ramsey Show. as in next of kin box, is a complete system that helps you be sure that you leave happy memories, not a mess when you pass away.
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From the Ramsey Network app, we get our question from Corey. Dave, you recently took a call where the person had 35 credit cards.

How do the banks even allow someone to get that many cards?

Actually, a good question, Corey. Corey, that's sweet that you are naive enough to think that the banks even think.

That's sweet that you would think common sense would enter into this transaction. That's so sweet, Corey.
No, it doesn't. And, you know, this is the same kind of mentality, Corey, that you've got that people say, well, I must be able to handle the payment or they wouldn't have given it to me.
No, they'll give it to you. The same, yeah.
Whatever the payment is. They'll approve you for the loan way beyond 18 year old 200 000 in loans for for college sure sure right yeah just they just just like hand it to you so cory the most aggressively here's an interesting fact this is let's just take it even a step back further We now at this moment in 2024 in America, the United States, live in the most marketed to, sold to culture in the history of the world.
in the history of the human race,

you will receive... In the history of the world, in the history of the human race,

you will receive more marketing impressions on your ears and eyes and brain in this coming calendar year than any set of humans ever has in history.

That's pretty interesting when you think about it.

And when you are sold that much stuff, people buy that much stuff. And among the most marketed to group of people in the history of the human race, the most aggressively marketed product in the most aggressively marketed time in history is debt.
Debt is a product. They sell it.
They sell home equity loans. They sell student loans.
They sell car loans. They sell private loans.
They sell title loans. they sell any kind of home loans, any kind of loan you can dream up.

Put a word in front of the word loan, and it happens.

Dog loans, cat loans.

There are loans for everything. I was trying to buy a T-shirt, for God's sakes,

and they offered me payments on it with Klarna the other day. I'm like, it's a t-shirt.
Why would you? Three easy payments of $1.26. I mean, come on.
You know, it's like, what? On a $5 t-shirt. I'm kidding.
I don't remember. That probably wasn't the number.
Ten easy payments. It's at the end of every transaction you do online.
Twenty easy payments of $1.26. No, I got you.
Whatever it is. Yeah.
And they're always easy payments. No one says hard payments, right? Yeah.
And yet when you make them, they're always hard. They're not easy.
So, and among the most aggressively marketed debt products, the most aggressively marketed debt product, debt being the most aggressively marketed product, in the most aggressively marketed to group of people in the history of the human race is credit cards, Corey. American Distress, Visa, MasterCard.
They're your new master. And Discover discover bondage together spend those four names spend more american express i said that one yeah american distress they together they will spend a billion dollars on marketing it's more than beer it's more than chevy pickup trucks going through muddles.
More than all your car advertising put together.

More than any other category of advertising.

What's in your wallet?

Says the failed actor.

The actor who can't get a part now.

What's in your wallet?

Or the great actress because they're paying billions or millions of dollars to her too so yeah because they have it gotta admit i'm a jennifer fan there was a um that's who i was thinking of jennifer garner yeah she's actually great but maverick her dad would not be proud i know and i'm trying to look up because it was sent to me by multiple people now i can't find it so, the credit card is the most aggressively marketed product out there. And so in the midst of that, they are issuing credit cards in mass to people who can't pay them, don't need them, including dead people, dogs.
We used to collect bizarre credit card stories. I remember that.
And I had a guy send me one from Virginia. He, as a joke, which was fraudulent and he shouldn't have done this, but as a joke, he applied for a credit card in the name of Buck Naked.
Okay. They issued the card to Buck.
Buck got him a card. Another guy sent me from New Orleans a credit card, card an actual card he sent me the card and a letter it was um issued to frou-frou who was his poodle who had died and that was unsolicited it was i picked it up off the akc registration and meant to send it to the owner of the dog, instead issued the card en masse to the dogs.

Literally. was unsolicited.
They picked it up off the AKC registration and meant to send it to the owner of the dog. Instead, issued the card en masse to the dogs.
Literally, it's gone to the dogs. And so, I mean, this is the credit card world.
So please, God, don't think you're special if somebody gave you a credit card. I mean, when I was in college, I thought, well, if they give me, if I can get an American Express, then by God, I'm successful.
And if I get a gold piece of plastic versus a silver piece of plastic, then I'm really someone because of the color of my plastic. And you get to pay more fees to get those cards.
The color of my plastic dictates the quality of my personal identity. Yeah.
So, Corey, that's what you're dealing with. Yeah.
Yeah. we've had people with 200 credit cards.
There are people that believe that credit cards are excellent, and they have their own YouTube channel and all this stuff on how you can live off of the points and how you can be the card man or whatever and all this stuff, right? Yeah. So it's a thing because it's so prevalent that any moron can get more credit cards than they can pay so that's that's how cory because the you know you're making the sweet and naive assumption that the bank actually cares about you and would look at you and say you can't afford this so we're not going to do harm to you they don't.
None of that is true. They will do harm to you in a heartbeat if they get the opportunity.
And just to remember that they're here to make money off of you, and they know how to do it. That's their job.
That's their job. And there was a recent clip.
It went crazy. The one you were just trying to find.
Yes, and I found it. The president of, or whoever it was, of MasterCard and Visa, it was the two, they have 80% of the market share, and they're in front of Congress.
Testifying. Because of antitrust.
Yeah, and they won't lower fees for small businesses, like they give deals to big corporations like Walmart. And they have to verbalize and say what they're making, their profit margin.
It makes you sick. It makes you realize, literally, off the backs of Americans, this is what they're making.
Like it is, they make, I know we know that they make billions and billions and billions. But as you sit there and watch these two people, you're like, oh my God.
And they're not even, you know, from any level of integrity, trying to help small businesses, even though we're against credit cards. But like even that, right? I mean, everything is about making money.
It's all they're in it for. And so they know how to do it really well.
And they market it to you and bring you into this cycle and this mindset of it that is very, it's crazy. So just remember, if you're issued a new credit card, you're no better than frou-frou or buck.
Moral of the story. Look up the Congress clip.
The dead poodle. Or the naked guy that doesn't exist.
There you go. One of the two.
I mean, you're no better than either. This is The Ramsey Show.
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My daughter is my co-host today.

Open phones at 888-825-5225.

Jake in Savannah, Georgia.

Hi, Jake.

How are you?

Good.

How about yourself?

Better than I deserve.

What's up?

I was just calling regarding how I can stay focused on getting out of debt and not incurring more.

Okay. How much debt do you guys have or do you have?

I have about $20,000 and my fiance has about $20,000.

Okay.

Why are you getting out of debt?

I just want a better life and we have a kid on the way and I'm tired of living paycheck

to paycheck. Okay.
So the thing that we find is that the bigger and more pure the reason for getting out of debt, the why, why I'm getting out of debt, the more intense and sacrificial and disciplined you will be. It sounds like you have a really good why, and if you came to truly believe deep down in your soul that the only way you're going to become wealthy and provide an incredible life experience for your brand-new bride and baby is to get out of debt, then the discipline starts to become easy.
It's almost as if I said, if you don't pay off $20,000 in two years, your child will not be alive. If you said that, you would find $20,000.
Now, obviously, that's crazy. That's not going to happen, right? But I'm saying, if you had to buy a thing to keep your child alive and you needed $20,000 to buy that thing and you only were allowed to pay cash, you'd find $20,000.
Agreed? Yes, sir. Because your why would be so huge.
Your reason. Discipline wouldn't even come.
I'm having trouble being disciplined to save the life of my child. No, that would not be something that would come out of your mouth.
And so the more deeply you understand and believe that by getting this $40,000 paid off between the two of you and the two of you getting married and creating a double income and creating a situation where you dive in and stay out of debt and build wealth, the more you believe that that is the path for your family to have an incredible next 50 years, the more disciplined you'll be. But if you just kind of go, well, being out of debt would be kind of nice.
And I think we'd probably be better off, but if you just kind of go well being out there be kind of nice and i think we'd probably be able to be better off but it'd be kind of nice well that's like a three on a scale of one to ten and i'm talking about a ten you see the difference yeah i do do you feel that jake where do you feel like you are on the scale um i i feel like i'm definitely on the high end of scale, probably a 7 or an 8. How about your fiancé? Her situation's a little different.
She doesn't see eye to eye with me on the getting out of debt thing. Okay.
Have you guys talked about that? We have, and I've kind of tried to explain to her, like, hey, us getting out of debt means less payments.

It means more money to take towards our kid and ourselves and our life together.

And she, her side of the coin is she's like, well, she has the mentality of, well, you can't have the nice car unless you have a payment.

And you can't have the nice house unless you have a payment.

You ought to see my house and my car.

Yeah. unless you have a payment and you can't have the nice house unless you have a payment you ought to see my house in my car yeah it's just better than what she dreamed of and no payments yeah yeah I tried to explain that to her and I'm I'm fighting to fix my own debt as much as I can and we do basically.
Yeah. You're going to have trouble, Jake.
You're going to have trouble being disciplined. Yeah.
As long as the other side of your brain called your wife is tearing you down. So the two of you getting aligned on this is your all's biggest issue.
You cannot singularly carry this household on your back to wealth while she simultaneously isn't in agreement. You guys have got to get on the same page.
It's a problem in your marriage going forward. It's one of the top, it's always in the top five list, sometimes the top three, sometimes it's number one, depending on which list you look at of reasons for fights and disagreement in marriage.
It's a's a really big topic so i would and i would talk to her too about you know the why behind it for you um and even on a deeper emotional level too jake not just oh yeah so we don't payments and we can build wealth but there's a level of a value system at which you look at life that needs to be so aligned together to enjoy your marriage and your life together Crystal's in Tampa. Hi, Crystal.
Welcome to the Ramsey show. Hey, Dave and Rachel.
Thank you so much for taking my call. Sure.
What's up? Okay. So, um, I've been listening to you guys for about six weeks, really diving in.
I actually, I look forward to the, the, uh, show every day, like at two o'clock. So thank you.
Um, I've been, I've been talking to my husband about all the things and kind of keeping him in the loop. I'm the main one that does the finances and it's been that way for years, but we're on baby step two.
And so I have, you know, our snowball list. We don't have like a lot of line items.
It's just a big amount, unfortunately, in total, but obviously listening listening to y'all's advice, and I know it's going to take some time and a lot of hard work. But my main question is, I have not taken into account the $5,000 worth of medical bills that we have sadly racked up.
And so with list my snowball is how do I incorporate or incorporate the payment for the medical bills with like my loans and my credit card that we are currently working on or do I how did you prioritize your snowball list you listed it how smallest Smallest to largest. Smallest to largest what? We're knocking out the small.
Balance or payment? Balance, correct. Sorry, balance.
So you have balances on the medical bills, right? I do have balances on them, yes. Just redo your list.
Okay, so that's what I was curious on. Should I should i just yep because there's multiple lists of or multiple different bills of medical should i just add them into that list so then yep it'd be one single list okay no and um you know and the problem the bad thing about the medical bills and the good thing about the medical bills some of them are tiny like you got a 78 dollar from diagnostic just because you drove near a hospital.

Yes.

Right? You know what I'm talking about?

Yeah.

We don't even know what the flip that is, but they sent us a $78 bill for it.

And it's like you got all these little mosquitoes flying around.

They're not even big bills. They're just bothersome.

And so that's the bad news. The good news is you're going to plow through like one through number 10 really fast.

And you're going to get this sense of, I just did something. Feels good.
It does feel good. I've paid off most of the little ones.
Of the medical? It's the bigger ones that, yeah. Okay.
Yeah, most of the little ones. So it's the bigger ones that.
What's your smallest medical bill right now? Probably $190 right now. now still small one still very small yeah it's still small for sure how much total uh crystal is your debt snowball i'm just curious what your journey is how much you're paying off so um right now without the medical bills um because currently it's a separate list i've got about $80,000.
So $85,000. Exactly.
And your household income is what? So I think we make really good money. We've got $230,000 a year.
Oh, great. You're going to be done in a year.
I know. We've just made a lot of, what is it, you say, mistakes with zeros on the end.
We've made a lot of those. Yeah, you paid a lot of stupid tax.
Yeah. But, I mean, if you live on $100,000, you're debt-free in a year, right? Yeah, that's the goal.
That's pretty cool. That's absolutely the goal, and my husband is all on board.
Good. Good.
Well, yeah, the more he's involved, the more helpful he is. I don't want him writing checks because you're the nerd.
You're the good one to write the checks. But I do want him emotionally standing there, not just saying, honey, you're doing a good job.
I want him saying, honey, we got this. He is.
He is. Absolutely.
Yes, I agree. Thank you.
I appreciate it. That's good.
I'm proud of you. Way to go, Crystal.
Oh, thank you. Thank you so much.
Very exciting. That's very well done.
So fun. She's going to knock this out so fast.

Yes.

It's so fun when you have been going along and you don't know what to do and you suddenly discover fire.

And you do it and you're like, oh, it'll be done in a year.

Look at that.

That's fire.

It's awesome.

I can cook stuff with that.

Yeah.

It's knowledge is powerful.

It really, really is very cool.

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Make sure to check it out, you guys. 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.

I'm Dave Ramsey, your host, Rachel Cruz.

Ramsey personality, number one best-selling author, is my co-host.

You jump in, we'll talk about your life and your money.

The phone number is 888-825-5225.

Sarah is in Boston.

Hi, Sarah, how are you?

Good, it's so nice to talk to you, Dave and Rachel. Good to talk with you.
How can we help? Yeah, my dream is to achieve financial freedom and continue to build wealth, but I feel like my spending habits are getting in the way of that. A little bit of background.
I'm 25. I'm making over $150,000 a year.
Wow, good for you. Yeah, I have no debt.
I'm putting myself through school, but I find myself spending unnecessarily on things I don't need, and I'm just wondering if I can get some advice on how to rein in my spending and start building wealth and achieve my financial freedom goal that I'm shooting for. What do you do, and what are you studying? I am studying studying engineering and I am in pretty much an entry-level engineering position.
And I love what I do. I'm able to work from home and I have a lot of great benefits, but I feel like there's more that can be done.
So what are you wanting? Yeah. When you say there's more, because I mean, you're putting yourself through school debt free, correct? You have no other debt.
So is it investing you're looking at? Is it just your spending habits that you feel like you're making a lot, but there's not a lot to show at the end of the month? What's your biggest pain point? Yeah, I feel like I don't have boundaries when it comes to spending.

I feel like I could be using my money for better things, like investing for the long term, but I find myself spending a lot of time online shopping or going out. And I don't have a lot at the end of each month to put in my investment accounts like I'd like to.
Okay. Are you on a specific budget, like a pretty detailed budget? Not really.
I just kind of spend as you want. Yeah.
I mean, honestly, for you, Sarah, that's that in an investing goal are the two things that will, I think, completely change your life. I mean, if you have it, if you have a budget, because you're doing well financially, right? You're not going deep into debt.
You're not trying to pay off debt. You really are able to use the cash that is coming in your income.
And you're going to be able to spend some. I mean, you're at this point that you will be able to enjoy some of it, but you're not able to really enjoy it because you're questioning every purchase.
And so being able to put a line item and deciding a dollar amount ahead of time to say, OK, yeah, I can go shopping, but I'm just going to put this amount. And that automatically is going to give you a guardrail to enjoy it.
And still, you know, because you're at the point, again, I will reiterate, you don't have debt. You have a great income.
So you can enjoy part of it. But you want to do it with some level of control and purpose.
And then knowing on the other end that you do have an investment goal, and I would tell you 15% of your income should be going into retirement and knowing you're doing that as well is going to give you a lot of peace and freedom. But that monthly budget I think is going to be a really great tool for you to help because I'm the same way.
I'm a spender. I enjoy spending, shopping, all the things.
And I do it now with such more peace knowing, okay, yeah, there's a specific dollar amount per month that I have the ability to spend and I'm going to cut it off after that and so that that takes a level of discipline but it also allows you to enjoy life and enjoy your money so much more. So as an engineer you're learning or have learned to project plan what Covey used to say beginning end in mind, and with your money, what's happening is you're getting to the end with no plan, and it's not satisfying because it didn't go where you wanted it to go.
And so it'd be like building a bridge and making it up as you go. Well, you don't do that.
We lay out a plan. We do drawings.
We run the math to make sure the structure will hold. And then we build the bridge.
We don't just kind of start moving dirt and hope it all works out. And that's kind of what you're doing with your money.
So let me ask you this. Let me see if I'm getting this picture correct.
Okay. You're 25.
You're single. You're in Boston and work from home, and you go to school, correct? Yes.
Is school online? Yes. So your work is online, and your school is online, and you said, I spend money shopping online, and I go out, which would make you, thank God, a normal human being, because otherwise you're trapped at home online, and instead you actually go out for human connection.
Good. Okay? So you should allocate some money.
Sorry, I had a screen for like 12 hours a day. Yeah, you should allocate some money for what's called a social life.
Yes. Because otherwise your brain is going to melt, okay? That's good.
It's not good that man or woman be alone. We should be out seeing other humans, okay? So I want you to do that.
Now, the problem is you need a – I'm going to recommend a non-internet hobby to be done on downtime, an analog downtime, because your downtime now is Instagram, Facebook, and Amazon Prime. And there is a direct, there's research out there that says the more time you spend on social media, the more money you spend.
Because social media is the world's worst Joneses next door. You see everyone else's highlight reel, and they splash suggested products, mix it into your Instagram feed, mix it into your Facebook page, and whatever else you're consuming.
TikTok is even worse. And so instead of when I've got 10 minutes, I'm going to doom scroll, your spending is always going to be there if you do that.
Just unplug from, do a social media fast and say, I'm only going to do social media 30 minutes a day between 5 p.m. and 5.30.
That's all. Or 5 and 5.15 would be okay with me.
All right? That's all. And your spending will go down.
And you cannot go on Amazon ever again unless it is to specifically purchase a certain thing that you thought of as a part of your budget. You cannot go on there and scroll because Amazon is the world's best marketer.
They will sell you crap. You following me? Does this sound right? No, this definitely sounds right.
I definitely need a hobby outside of the screen. Yeah, because it had to be with the way you're living your life because your life is in front of the screen, and you go, okay, I've got 10 minutes.
I'm going to have some brain junk food, and I'm going to doom scroll for a minute just because my brain is hurting from class. Right? That's what I would do, and I'm 64.
I'm not susceptible to it like you 25-year-olds because you grew up with this crap. I didn't, but I still have to watch myself.
If I get bored, I end up buying something if I'm not careful. Does that sound familiar? Yeah, that's definitely me.
Okay. And I am putting money away for retirement.
I'm just wondering. But you start with the, I want you to give it.
If I'm not putting on Amazon, where should I put it? Yeah, give every dollar an assignment before the month begins. On your budget, on your every dollar budget.
Put your every dollar budget down. And you cannot go to Amazon unless it's to buy something you budgeted for.
And the other

money to save, she asked, besides just retirement, you know, open up a high yield savings and have a savings goal to say, yeah, I need a fully funded emergency fund of six months. And beyond that, have things you're saving up for to at least have the motivation to put that money away.
And do spend some money on social engagement. You need it.
It's good for you. This is The Ramsey Show.
All right, Dave, you have some strong opinions. Possibly, yeah.
I think so. Okay, because you really prefer credit unions over big banks.
So why is that? Well, credit unions, for one thing, are non-profit, which means that the members, the customers, own the credit union. So any profits that the credit union makes goes back into customer pricing.
So you get better interest rate on savings, cheaper checking, and so on, that kind of thing. But what's more important than that, though, is the fact that the customer is the owner changes the spirit on the credit union.
So I find very few credit unions that aren't very customer centric. Yes.
Well, and I think we have found one that is incredible and that's Fairwinds. They are an incredible credit union that is really out with the heart to help the customer.
You know, that's why we're partnering with them because they've got a scope to be able to handle the Ramsey audience and they're the right kind of people with the right kind of values. And they've done a really, really good job with customer service, and the deals that they're offering, the Ramsey tribe is incredible.
Yeah, absolutely. And you're right, their customer service is unbelievable.
Winston and I just signed up, and we got an account. And I'm not kidding.
It took less than five minutes. It was so user-friendly.
The step-by-step approach was unbelievable. And then the next day, my phone rings and it says Fairwinds on my phone.
So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience.
And I so, so appreciate that. So again, you guys, I know it can be a pain to switch banks or to open up new accounts, but Fairwinds, again, they make it so easy.
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Might not be in all states. Today's question comes from Lucy in Nebraska.
My husband's daughter and son-in-law wants us to get a mortgage on a house for them. Our house is paid for and we have no bills, but we're on a fixed income.
They want to keep their house they have now and rent it out to pay the mortgage that they want us to get. He's a cop and she's a firefighter.
We cannot afford a mortgage, but my husband is considering it and I'm not in agreement with this plan what do I do man Lucy yeah I mean I would agree with you I wouldn't be in agreement with this plan either and with you and your husband yeah I mean I think continuing to sit down and understand and unpack why you're not in agreement and it's not pointing fingers at him saying well you you you this is talking about you and what and your desires your fears which you are worried about in this and just the simple math of even though yeah you said you guys your house is paid for and you have no bills but you're on a fixed income I don't know if you're working towards retirement or what that looks like but realistically running these numbers out even for a decade right the next 10 years um and what the reality is for your situation because i do think some parents the the heartstrings get tugged so deeply that sometimes you lose the reality of your situation and that's maybe what your husband's doing since it's his daughter um but i would be looking at not just the emotional side, but also the numbers side with him a lot and keeping that conversation going. Sometimes it helps to reframe the proposal and use words that explain what this actually is.
Honey, your daughter and son-in-law who have two good jobs want us to borrow money so they can

have a rental property. That's exactly what it is.
When you say it that way, it sounds dumber than

crap because it is dumber than crap. That's why it sounds that way.
Instead of like, oh,

we're helping them get a home.

No, you're not. They have a home.
They want a rental property. And they read this and some stupid thing on the internet to go to their retired parents to get a mortgage.
Why can't they get a mortgage? They both have a job. Oh, wait, they haven't been paying their bills on time and their credit is bad oh hello yeah this is this just screams stupidity really loud like with a capital s t u p i d say the cheer with me everyone give me an s give me a t seriously oh't do this.
Absolutely. And here's what happens at our house.
We start with trying to reason and talk things through. And when one of us just absolutely is not going to do it, the heat just gets turned up.
And so our rule is that if we're both not on board, we can't do it and uh you're not on board and you're not going to get on board please don't get on board please get through the fog of this yeah and it's not what do his kids need they sell the house and they get their own mortgage and not only is it not good for you guys you see but this is a disaster waiting for Like, this could set them up to fail in a major way, too. So it's on both ends not great, even though he feels like he's helping.
It's actually putting them in a pretty dire situation, having to float a mortgage through a rental property. Not good.
Not smart. Yeah, you're buying them a rental property.
No, absolutely not. Heard this on TikTok.
Deb is in Oklahoma City. Hi, Deb.
How are you? Hi, guys. So great to talk to you.
You too. What's up? So my husband and I are on baby step seven.
We have just over a million dollars in our net worth.

And we have run into a scenario where we think that we have found our dream house.

And it would have us go back into debt for it.

We would take out a small mortgage to basically we'd sell our house for roughly 450 and then turn around and have a mortgage again for about 250,000. You don't have the 250? No, not all liquid.
What's liquid mean? All in retirement? Not liquid, not all. No, I mean, Yeah, we have about half a million in retirement we have 45 cash and we have a 15 000 emergency fund and then um a little bit other money in some investments i believe that's probably about 50 or 60 and you don't own any other property?

No.

How much do you guys make a year, Deb?

200.

And not including his bonus.

That kind of fluctuates every year.

So 200 is, like, for sure.

I mean, you can do that. It's not going to bankrupt you.
Yeah. There's no possible way you could get me to go back into debt after I finally got out.
That doesn't sound like a dream. That sounds like a nightmare to me.
But I mean, it's just a stupid house. There's no way I'm going into debt for it.
But, I mean, if you want to do that, you can do that.

But yeah,

I know. But I mean, it's just a stupid house.
There's no way I'm going into debt for it. But I mean, if you want to do that, you can do that.
But yeah, in a reasonable time, you know, because a mortgage is the one type of debt we do talk about. Yeah, but you're out.
Yeah, but if it's a small amount and you liquidate the 50 from the retirement, the other 45, you know, that's half of it. And if you guys commit to say we're going to pay it off in 24 months or whatever you know what i mean like if there's a you can do that just save up the money and buy something that's what he thought you were gonna say well i mean you never heard me call up and tell somebody baby step seven to go back in debt yeah no i mean no and i think probably we've we deep down we know know that we probably would have buyer's remorse.
Yeah. I just threw up a little in my mouth, and it's not even my house.
Oh, my gosh. It's not even my house.
Oh, gross. It's just gross.
No, I mean, if you want to do it, honey, I'm not going to be mad at you. We'll still friends but i i it no we do not tell people to go into debt in baby step seven to buy so to buy a luxury upgrade and if you want to do that if you want to do that you're not going to go bankrupt it's not a sin you're not going to hell we'll still be friends and you'll just be my friend with a mortgage and you know uh you know okay but we have known people that this is like not for a car or anything but we don't we don't tell people to do it for real estate in baby step seven i just don't i mean because the goal is to get out so that you don't have to go back and and voluntarily going back to jail after i've been set free i don't want to go i'm i i'm free i i like my freedom i don't i love my interest rate on my mortgage zero um you know i i so deb i mean i i'm making i'm poking fun but the truth is the borrower is slave to the lender the truth is the fastest way to wealth is to avoid debt period the truth is there is there's more peace associated with that.
The truth is you guys have worked so hard to become debt-free that you will have some buyer's remorse. You will feel this regret, this taste on the back of your tongue that when you go, man, I just feel like I did something wrong because you did.
So, I mean, it's not, you know, that's what it's going to feel like. But is it bankruptable? No.
Is it going to keep you from building wealth completely? No. It just slows down everything, and there's the emotional and psychological.
I think that's the biggest. You fell off the wagon.
It's less about the math and Deb situation. It is because I'm like reasonably all the things, but that's what we talk about is that personal finance, It is more than just the math.
It is that element of like, oh, we're going back in. You can buy a house just like that one in 36 months and pay cash for it.
That's what I would do. This is the Ramsey Show.
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Rachel Cruz, Ramsey Personality is my co-host today. Open phones at 888-825-5225.
Jacqueline is in Minneapolis. Hi, Jacqueline.
Welcome to the Ramsey Show. Hello.
Thank you. Hey, what's up? So I just have a question on, I'm not familiar with the baby steps, first of all.
We have mounting credit card debt and a mortgage and one loan on a car.

And I do have some retirement para that could be cashed in, but that sounds like a terrible idea.

And I just want help and guidance knowing what is the not easiest, because I know this isn't going to be easy, but the most efficient way to pay off this credit card debt. Yeah, that's a great question, Jacqueline.
How much debt is it total? Credit card, I would guess $55,000 to $65,000. Okay.
Is that over multiple cards? Correct. How many would you say? Three cards.
Three cards. Okay.
What other debt is there? The car. How much is it? Car is $26,000 on my husband's.
Mine is paid off. What's your household income? My husband retired last year.
He, I would say, 120. Currently, it is 120.
Correct. Okay, good, good, okay.
So what did you spend the credit card money on, do you think? My son has congenital chronic tumors, and we had to pay for those,

and so we had to put the credit card debt on things for living expenses

just because it got too much.

So it's not like frivolous spending or anything like that,

but it was things we needed.

How old is he?

My son or my husband your son uh eight how's he doing now um it ebbs and flows he just he has a lot of surgeries and um the state i live in blue cross blue shield and the children's hospital um couldn't come to an agreement over who got paid what.

And so my son was in the hospital, and we were on the hook for the bill while he was in the hospital.

Have you gotten that straightened out?

We're working with the attorney general right now on it.

Good.

So you've escalated this.

I'm proud of you.

I'm so sorry you guys have been through this. There's nothing scarier than dealing with a child with medical stuff.
Man, that's a big deal. Thank you.
so basically you had 50 to 60,000 of medical bills with your son that you paid for and then used the credit cards to buy the things you would have used that money for. Correct.
Okay. But the prognosis going forward on your son's situation is that hopefully insurance will be picking up whatever he has to deal with going forward, right? Correct.
Okay. So we've stopped the problem in terms of the credit cards.
Yes. How old is your husband, Jacqueline? Because you said he's retired.
Yes, he's 56. And so when he retired, I had to pick up the family health insurance.
So I advised him to get a job with my company because if it's a dual spouse, if both spouses work for the company that I work for, the insurance is free. And so that saved us about $1,400 a month.
Um, but obviously he doesn't, he was in law enforcement, so obviously he doesn't really want to be working, but such is life. Um, so I'm happy that he was willing to go back to work.
Um, well, if you're driving a $26,000 car, you can't afford, it's kind of one of the things you have to do right so exactly yeah that's good all right so the answer to your question is how do we efficiently get through this and the reason we're asking all these questions is we're trying to figure out if you know where the spending came from so that it's stopped because you're going to have to reverse you not only have have to stop the trend, but you have to reverse it now. So in other words, now we got to find 80,000 bucks to pay off a car and some credit cards and we make 120.
Right. And so if I take 80,000 bucks and I say, I'm going to do 40 a year out at 120, that means I got to live on 80 minus taxes, right? Mm-hmm.
So you need to be paying off three to $4,000 a month in debt, and you'll be debt-free in two years. Now, how do we do that? Well, you're going to sacrifice some other things.
There's no going out to eat. There's no vacations, and we're going to take lifestyle to ashes.
Nothing. You get nothing.
You got to be on beans and rice, rice and beans. And both of you got to work every hour you can work and still take care of your baby and get this knocked out as fast as possible.
And that sounds like three to four thousand dollars a month towards this, which gets it done in two years. And would trim six months out of it too, Jacqueline, as if you guys sold the car and you got a crappy car for a season.
Now I have the opportunity to get a different job. I went back to school two years ago and I got a paralegal degree and I want to use that.
And so I do have the opportunity in the next four months or so to more than double my income. Great.
Wow. Um, yeah.
So, I mean, that's excellent. Um, you know, it comes with the sacrifices of, you know, family time and whatnot.
So if I do get that job, it would make most sense to me to live on my current, on our current income and put the extra money, you know, the difference in the income. I would live below your current income.
Okay. So live below the current income.
Live on nothing. The faster you pay this off, the faster it goes away, the faster you get your life back.
And Jacqueline, do you want to be a paral be a paralegal long term like do you want to do this for the next okay you do okay just making sure yep I wouldn't do it for a year just to make more money and then feel like you have to go back to your old job right so I want to make sure you're that career shift was what you wanted in the first place too so a written game plan list these debts smallest to largest it sounds like there are four debts, three credit cards and one car.

So what is the smallest debt, a credit card?

Which one?

That one, I believe it's $12,000.

Okay.

We're going to pay minimum payments on everything else,

and I want you to pay that off in three months. Okay.
And that means no life. I'm okay with that.
It's for a short period of time. Yeah, and stress is causing a whole different set of stress.
So I'm willing to do whatever it takes to do this and i know my husband is on board yeah um there's some side jobs that i can also do to pay this off i just well and you know here's the thing and are you guys funding retirement too jacqueline because i would pause that yes yep i would pause retirement temporarily yep for two years for two years till you get this clear or one year till you get it clear, depending on how big the job is that you get. You get that big job, you might be done really fast.
Um, or both of both of you pick up some extra income, you might be done really fast. I don't care.
Let's just, let's put it on a schedule where we get it done quickly and knock out the 12. The 12 is gone.
You don't have that payment anymore. You take that payment that's freed up and everything else we can squeeze out of the budget.
And we put it on the next one down and the next one down and the next one down. So you list your debts, smallest to largest, minimum payments on everything but the little one.
And you attack the little one with a vengeance. Okay.
And listen, you are a great mom and dad. You've done a wonderful, you took care of your baby.
And now you're standing up like two grown-up adults and saying, what have I got to do to clean up the mess now that I took care of my baby? I love you guys. You're amazing.
We want you to go through Financial Peace University, our class, and I want to put you in the premium version of EveryDollar, our app. I'm going to pay for all of it just to say, I'm proud of you.
And I'm, I like having people like you and our audience that are good human beings that take care of their family and take responsibility, even for messes that are beyond their control. Way to go.
You're amazing. You got this.
You can do it. Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes.
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That's RamseySolutions.com slash SmartTax. Rachel Cruz, Ramsey Personality, is my co-host today.
Open phones at 888-825-5225. Erica is in Philadelphia.
Hi, Erica. Welcome to the Ramsey Show.
Hi, how are you? Better than I deserve. What's up? I wanted to get advice on an upside-down car loan that I'm in.
I owe $20,864 on it. It's a 2020 Chevy Malibu.
I've been trying to get rid of it for a while now, but they're saying the value is down. It now is worth $7,000.
And I guess I do have a little bit of damages on it, but they were saying like, basically the car, it's just so many of the cars and they're being used as rentals that the value of it isn't that great, pretty much. Wait a minute.
What's a little bit of damage, Erica?

Well, it's just the back cover mirrors are off,

and there's like a couple scratches on it,

but it's really nothing that bad.

Okay, and when you're saying they are telling us,

telling me, who's they?

The dealer?

Yeah, the dealership.

Have you just Kelly Blue Booked it at all?

I did.

It's priced it now, I think, between like $8 and $9.

Man, that dropped a lot.

You must have had a negative.

You must have been upside down in another car.

You rolled it into this one.

No.

This is a new loan.

I had a co-signer with great credit because my credit was trash at the time.

How long ago did you buy the car? Was a 2022 and what's your interest rate 11.89 okay you may be looking at the wrong number i think you've got a subprime loan because they're screwing you on the interest and i think the 21 000 is not the actual payoff i think it's the total of your remaining payments. Well yeah no so when I looked at the loan it said we we got the car for $27,000 and some change.
I can't remember the exact number but right now the payoff is $20,864. That's the payoff not the total of remaining payments.
Exactly but I've made 13,000 000 payments so i had called them and i was

like why where's the money going and it's all going to interest pretty much well yeah it's 11 percent it's two thousand dollars a year yeah so i want a new car i want to know what to do like should i pay it off and keep it at this point and then just start a new like be on a new lease and not get a new car.

How many miles did you put on this car?

It is 95,125 right now. It was 95 when you bought it? No, it was, like, 46.
Oh, but you've run it up to 125,000 miles. No, it's at 95,000 now.
Oh. So it was, like, 50.
There's something wrong with these numbers, okay? Because Chevy Malibu has not dropped 70% in value during that period of time. Okay.
So when you pulled up Kelly Blue Book, did you look at trade-in or private sale? Trade-in, believe yeah i think you did okay so maybe you could sell the car private sale for let's call it 12 000 okay okay and then you would have to cover the difference and so you'd still need nine thousand dollars to do that do you have any money at all i'm sure you don't not that no that, no. How much do you have? $2,000 in savings and then $1,000 in the checking.
Okay. What do you make? $50,000 a year.
Okay. All right.
Yeah, you do need to get out of this, but, you know, basically if you went to the credit union and you borrowed $9,000, $10,000 to get a thousand dollar car and cover the difference to sell the thing for 12 to an individual that would get you out of it. And, but you still have payments on $9,000 instead of $20,000.
Um, the thing I might do instead is I might just go make an extra twenty thousand next year by and pay it off in one year by working all the time like a maniac like six jobs and then get this off of you she goes oh man yeah well i mean do you have have any other. Listen, it depends on.

You don't have to do that, Erica, but you're trapped.

And the way you get out of a trap is it hurts.

Yeah.

Yeah.

Do you have any other debt, Erica?

Or is it just this?

School loans.

How much are those?

Close to $200,000.

I think it's $189,000.

I know.

What's the degree in?

Master's. Well, I'm in school now for my master's in marriage and family therapy.
Is the 180 include that master's? Is that the total once you get out or will there be more? It might be exactly at 2,000 when I get out. I'm in my last year.
200,000. Okay.
And what are you doing now for a job? I'm a case manager at a rehab. Okay.
Okay. Yeah, Erica, it's going to be a long road.
It's going to be a long road. It's going to be a long road.
But can I just say, though, number one, we hear people with these numbers, okay, and they get out. It does take years.
But this is going to be a total change of lifestyle for the next probably five years. Yeah, and you've got to quit just every time you want to do something, going freaking borrowing to do it.
That's true. It's killing you.
I mean, you're a quarter of a million dollars in debt. You got to stop.
I mean, you're like an alcoholic. You got to stop.
Well, it's all student loans. I mean, in that case.
No, it's not. It's an 11%, 12% loan on a car that she impulsed and then scratched it after she went out to happy hour.
Stop it. No, stop, stop, stop, stop, stop living like this.
You're a case manager. You see people doing stuff.
Stop it. You've got to say no more debt.
Next time I want a car, the answer is no. I don't need a car so bad.
I got an 11.8% interest rate. What that tells me is I know enough about the car business.
They not only screwed you on the loan, they screwed you on the car when they sold it to you because you paid premium for both. They saw you coming a mile away.
They said, here comes Erica. We're going to take her.
That's exactly what they saw. You got had kid.
Same thing they did when they told you $200,000 was a good deal to get a master's and to be marriage and family therapy. That's a complete screw job too.
You paid double what you should have paid for that degree. And you got to say no more borrowing.
My life is not better when I borrow to make my life better. It doesn't do it.
You got to stop that kiddo. So if I'm you, I'm going to go get that degree, finish that thing up, pass your dadgum bars, get out there, get your dadgum income up to a hundred K live on nothing and raise your right hand and swear.
I am never borrowing again because it has not brought me blessings. And yes, you have to work all the time.
That's the way it is. That's how you get out.
You've got to pay a price to clean up your dadgum mess. That's the way this works.
No other way around it, kiddo. You got to do this.
You got to lean into it. This is what they teach you in the field you are studying.
You can't keep doing the same thing over and over again. Expect a different result.
That's the definition of insanity. That's counseling 101.
Well, and I think you made a good point earlier that, and this is good for people to especially young people that are entering into adulthood of buying new cars maybe getting advanced degrees getting jobs like this whole thing is don't take the one offer out there the one car and go and take exactly what they say the one school you look at and get accepted to and you just take right there's a life of options out there and i don't think people do that right they you know they get into a situation and they just okay this is great this is what they're offering and I'm just going to sign my name and do it and so thinking through this stuff when you're my multiple options when your mind tells you there's only one way to do it your mind is lying to you and Erica that could be your situation right you you go and come into this car loan you get accepted to a school and you know you accept it's just this one option path that a lot of people take that ends up usually not with a great deal like you were saying getting screwed in the car whole thing and the degree and you're not you're not roi things you're not looking at other options and and have five or six different things in front of you to say, what's the better deal? So, forward thinking. Guys, all education is not good.
Some education is overpriced crap. Just to go to school, hey, you got to go to school.
No, you don't. Being stupid when you're doing your education is a bad plan.

I'm not saying Erica was completely,

but she got taken.

It's bad.

I'm sad for her.

What a horrible situation she's in.

I'm angry for her.

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