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The Ramsey Show

Short Term Convenience Has A Long Term Cost

13 Oct 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What is discussed at the start of this section?

29.107 - 56.463 Ken Coleman

Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically your money, your work, and your relationships. The phone number to jump in is 888-825-5225. That's 888-825-5225. I'm Ken Coleman, thrilled to be joined by George Camel with a K. And we are here for you this hour. George is our resident money expert today.

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56.924 - 75.146 Ken Coleman

I'll help you in areas of work that is very much tied to your money when we're talking about income. So if you're feeling stuck, confused, burned out, overlooked, and you're a little bit worried about whether or not you can make a professional move, while in the baby steps, I assure you, you can. And I'm here to help on those questions. We team up on all of it. George, you ready to go?

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75.186 - 76.147 George Campbell

We have a good time, Ken.

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76.308 - 86.867 Ken Coleman

Always a good Friday when I'm joined with you. It's always good to see what you're wearing today. I like that you've got an ensemble here. I'm going for the fall, you know, the autumnal wardrobe.

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86.887 - 92.076 George Campbell

You look like you've stepped out of a J.Crew hat. I was going for more of a Tim the Toolman Taylor, but I'll take J.Crew.

92.197 - 105.317 Ken Coleman

Yeah, I don't think you'll ever achieve Tim the Toolman Taylor. I can turn a wrench if need be. Yes, so can I, but just in the air. I can turn a wrench around. That's all I can do. That's where we're served best. George and I stay away from the tools, but we can help you.

105.818 - 113.549 Ken Coleman

And by the way, before we get to the phones, I want to acknowledge a fabulous crowd out in the studio, live studio audience in the lobby of Ramsey Solutions.

113.569 - 114.61 George Campbell

They have people to look at.

114.89 - 136.241 Ken Coleman

Yeah, we're very excited. Sometimes when it's empty, we get depressed. But these people out there, fabulous looking. They look very excited to be here. We know they're disappointed that Dave isn't, but they're pressing through. They're pressing through. That's your tagline, press on. Press on. So thank you very much. Let's go. 888-825-5225. Tim joins us in the Windy City, Chicago, Illinois.

Chapter 2: How can I financially prepare for a potential layoff?

524.028 - 554.808 Ken Coleman

This is The Ramsey Show. Don't move. More coming up. Welcome back to the Ramsey Show America. Thrilled that you are with us. 888-825-5225. 888-825-5225 is the number to jump in. I'm Ken Coleman. George Campbell joins me. We're here to answer your questions. I'll take any work-related questions as it relates to your income. Maybe even your... stress, the anxiety at work, any of that stuff.

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554.828 - 564.507 Ken Coleman

We'll talk about your work. We'll talk about your money. George is here for your money questions, and we're thrilled that all of you have joined us today. Kara is up in Philadelphia, Pennsylvania. How can we help?

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566.591 - 568.454 Shayna Goldman

Hi. Thanks for taking my call.

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568.474 - 568.755 Ken Coleman

You bet.

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569.225 - 601.312 Shayna Goldman

um yeah i'm uh so i'm new to dave ramsey by like five days wow and that's awesome welcome yeah thank you yeah i'm excited and terrified so i have um i have a master's degree that i've been working on for three years and i only have three credits left Um, and I, uh, obviously I'm not going to borrow money to finish it, but I'd like to finish in the spring.

601.332 - 631.792 Shayna Goldman

Um, so I have a IRA, a SEP IRA from a previous employer. Um, and that business has since closed. I don't work there and there's nothing being contributed to it at this point. Um, but it has about $5,000 and it would cover a tuition to finish my master's. So I'm just wondering what your thoughts are on should I should I cash out the IRA and pay for school that way?

632.033 - 639.647 Shayna Goldman

Or should I just kind of put off graduating and keep working and saving? And yeah, so that's my what I'm asking.

639.627 - 658.946 George Campbell

Well, it's a great question. And since you're new to the program, first of all, welcome. And second of all, if you keep listening to the show, you'll probably hear us say, don't rob yourself of your retirement. And there's a few reasons for that. Number one, if you cash out from the SEP IRA, you're going to miss out on all the future compound growth.

659.486 - 665.652 George Campbell

And if you want to know what I'm talking about, you can go punch that into our investment calculator and put in, you know, how much money's in there right now.

Chapter 3: How do I manage debt during a strike in my industry?

852.269 - 860.081 Shayna Goldman

Yeah. I have six years to finish the degree, and I'm three years in. But hold on.

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860.221 - 879.166 Ken Coleman

Hold on. You guys, you need to focus on getting out of debt. We're not worried about the three extra years. There's time between now and three years. where you can finish that degree. Right now, you don't need it. You don't need to be focusing on it. That's $5,400 that needs to be going to something else. Yes, George?

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879.487 - 890.718 George Campbell

Yes. And you both need more jobs. We need to increase this income because you got a great shovel, but the hole is massive. I mean, you got 300 grand in debt making 100. It's going to take you forever to pay this off.

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890.959 - 896.885 Ken Coleman

Yeah. One master's degree is enough for you right now to go make some money to dig out of this, okay?

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896.925 - 897.025

Yeah.

897.612 - 905.083 Shayna Goldman

Yeah. Some of it's my husband's. He had to get a doctoral degree in physical therapy. No, no.

905.323 - 906.485 Ken Coleman

You guys both have it.

906.505 - 910.731 Shayna Goldman

It's not his. Right. Yeah. It's all together $287.

910.911 - 913.775 George Campbell

How do we get you both making six figures? What are you doing for work?

Chapter 4: What should I consider before cashing out my 401(k)?

1835.137 - 1839.384 Shayna Goldman

Not private party, I haven't. Okay. I've only did it, okay.

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1839.404 - 1843.631 George Campbell

My guess is that's going to be closer to 15, 16. What is it? What kind of car is it?

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1844.653 - 1849.862 Shayna Goldman

It's a 2017 Infiniti QX60.

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1849.882 - 1851.965 George Campbell

That should sell for a pretty penny. How many miles?

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1853.268 - 1856.453 Shayna Goldman

I have 130,000 miles.

1857.462 - 1879.302 Ken Coleman

2017 Infiniti QX60, 130,000 miles. Ken's doing some beautiful mind math in here somehow. Well, I actually, you know, I'm shopping for cars for teenagers. I'm pretty well versed in this. That should be getting private party. You should be getting in the $16,000 to $20,000 range. There we go. I absolutely believe that'll hold up. I think it's closer to $20,000.

1879.282 - 1908.715 Ken Coleman

so we've got to look at that as a viable option we will come back to that if we have time but you have got to get some help if you're not confident in that how to put it on facebook marketplace look up kelly blue book today put the fin number in this will take you three minutes to get an actual real number okay please do that because i think you've got to look at that because that's going to change your life if you get rid of that debt yeah and that that car staring you down it's i think getting rid of that would give you a lot of peace it would just give you the student loan and the car the credit card to focus on right

1909.488 - 1910.309

Yes.

1910.329 - 1912.992 George Campbell

Okay. And do you have any money currently?

Chapter 5: What are the financial implications of selling a house?

3410.751 - 3455.747 Shayna Goldman

8,700 of that is student loan. And 20 of that is a loan that my mom gave me to, um, put down towards the house that we currently live in right now. And, um, So yeah, the house that I live in, I think that I can get about 400 for it. I owe 200. So my initial thought was sell the house, list it January, sell it, put that money into a bond or some type of savings. And then while we...

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3456.74 - 3470.899 Shayna Goldman

So let me back up a little bit. We are aiming to pay off all the debt, including my mom, by early March, latest April. And so my thought was this would be the first time we ever have money in our hands.

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Chapter 6: How do I decide if I should sell my house for safety reasons?

3470.979 - 3487.901 Shayna Goldman

It would give us a chance to restart, to let him really find a career that he enjoys, go to renting, and we don't have anything really holding us down. But I don't know if that's wise just because You know, we're not drowning right now, but I mean... What's your reason for selling the house?

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3488.421 - 3490.003 George Campbell

Because it's not your consumer debt.

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3491.805 - 3515.656 Shayna Goldman

No, so the neighborhood is going to crap. There was a drive-by shooting right down the street. It's like our street is fine. It's everything around us is just... How far outside of Seattle would you need to go to find a safe neighborhood? So I'm not in Seattle. I'm about three hours away in Tri-Cities.

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Chapter 7: What should I do with the equity from my house sale?

3516.077 - 3532.944 Shayna Goldman

But I guess to be safer, I would actually, in a safer neighborhood, I would be closer to my job. And, I mean, the houses that we're looking at in that area are about 500. Okay. So we were thinking.

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3533.405 - 3558.109 Ken Coleman

So let's jump in here for a second. Okay. If I were in your situation and the neighborhood around me was going to crap, I would be getting out of Dodge. And the fact that you've got some equity in this home right now is great. So you don't have to sell it to clean up the debt. Um, I like the fact that with your husband's, I mean, he's still got some great income potential.

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Chapter 8: How can I overcome the fear of using my savings to pay off debt?

3558.169 - 3568.595 Ken Coleman

So do you. And the fact that you're already on track to pay off this consumer debt in just about six months or less, that's great. Are you saying you'd pay that off if you sold the house or with regard?

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3569.397 - 3576.875 Shayna Goldman

So regardless, the house is also old and it's breaking down like I'm driving beaters. My age is going out. Okay.

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3577.095 - 3577.636 Ken Coleman

Sell it.

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3577.656 - 3588.081 Shayna Goldman

So, okay. So then that would lead to the next question. So is it stupid for us to let that money sit for two years while he tries to figure out what he wants to do for a career? Like, is that unwise?

3588.061 - 3594.451 Ken Coleman

I don't think it's going to be two years. I'm not sure where you're pulling that number, but no, it's not on wise on the surface of it.

3594.471 - 3604.026 George Campbell

Well, number one, you're going to take the equity, whatever the profits you get from the sale of this house, and you're going to pay off the debt, which is $30K. You need an emergency fund, which is probably another $20K, $25K.

3604.347 - 3604.467

Right.

3604.447 - 3620.073 George Campbell

So all of a sudden you've got a hundred K that's sitting in a high yield savings account parked for your future home purchase. I'm going to call it a down payment fund for a future home. Maybe you guys rent for a year, keep saving up, get yourself in a good financial spot. He gets the new job. Great. Now we're ready to purchase a new home.

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