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Chapter 1: What is the main topic discussed in this episode?
Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is the Ramsey Show, where we help you win in your life, specifically your money, your work, and your relationships. 888-825-5225 is the phone number. 888-825-5225. I'm Ken Coleman, joined by the incomparable, the inimitable... George Campbell.
The insufferable, some might say.
The insufferable, some would say. But I think he's pretty fantastic, and we have a lot of fun together, and we're here to help you.
Chapter 2: Should I take an unwanted promotion to pay off debt?
Let's go. Megan is up in the Windy City, Chicago, Illinois. Megan, how can we help?
Hi, I have been with my current company for just under seven years and was recently approached by a leader within my department to apply for a position that they have with their team. And so I'm just looking for advice. I love my current team, my leader, the work that I do. I'm a little bit apprehensive to apply for this new position. However, it would come with a salary increase.
And my family and I are in baby step two, so I'm just wondering, do I listen to my gut, my husband, both of which are usually correct, or do I seek out this opportunity that would come with a little bit of a pay bump in order to pay down that debt faster?
All right, I want to get the facts, and George and I will weigh in on this, but based on what I hear, you should always trust your gut. And the husband agrees with the gut. That is two for two there.
Chapter 3: How is technology changing the workplace?
But let's look at this because you also said a little bit of a pay bump, which tells me it's the ROI on this of changing and everything that goes with changing is probably not worth it. But what are you making now and what would you make if you took this promotion?
Sure. So currently I make $86,000, and I think that I could get close to about $100,000, but our household currently is at $148,000 combined. All right.
So we're talking about $14,000 before taxes.
Yes.
Okay.
And our current debt is $135,000, so that changed it a little bit.
That's all consumer debt?
Yes. Student loan, credit card, two vehicles. Okay.
What are your concerns about this promotion? In other words, lay out for us the reasons as to why you're apprehensive and you don't feel like it's a good fit.
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Chapter 4: What should we be doing with our money?
Sure. So the hiring manager, I was actually up against them for a different promotion day one out. They were the better fit. So this new position that I would be applying for would be reporting to them. So they're a new leader. And I'm just not sure how their leadership style will be. Whereas my current leader is incredible.
There's a lot of flexibility, autonomy, wonderful work-life balance, having small children at home. So I guess it's just the fear of jumping into the unknown when I have a sweet deal right now.
Yeah, but I also think you know enough. And I'm just curious, the only other thing I want to know is, do you know enough about the position to compare it to what you're currently doing? And you can clearly see, forget the new leader and all the good things I have with my current leader. I just am better at this other work that I'm in now. I enjoy the work now.
Chapter 5: When is it OK to make a career change?
Is that clear to you?
It is. I enjoy the work that I do now more. It's a no-brainer. Yeah, this new role would just open up my skill set a little bit.
Okay, so I want George to step in here because he's the money numbers guy, but you take $14,000. It looks really good when you look at it that way, but it's not going to be $14,000. So you're talking about making a change with all of the unknowns about the leader and And all of the knowns about your current leader, your current flexibility, you love the current job.
It's not worth it because after taxes, it's not going to be that much. And you and your husband would be better off selling stuff, making side hustle money to come up with that extra 14. But let's just say you were to step into this and take it, go against your gut, what your husband knows, and you end up stepping into this and you don't enjoy it. Think about how much time.
How much time you're spending in a role that's not a good fit for you from a flexibility standpoint with the kiddos to the relationship with the new boss? I mean, it's not worth it.
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Chapter 6: How do we budget an inconsistent income?
It's not that big of a payoff. If it were $100,000 and I knew you could step back into the old position a year later, maybe. But this is an absolute big blinking neon no. Stay put. George?
Yeah, I'm with Ken, and I'll make the caveat that looking at these numbers, I'm scared. I mean, $135,000 is a whole lot of debt comparatively to your income, and you have a great income. Are the cars really nice, or is this all student loans?
It's predominantly student loans. The vehicles are fine, but yeah, I would say it's student loans, both of which are mine.
Okay. If you're going to keep this current role, I would go get a second job. I'd be willing to sell one of the cars, maybe both, and get something cheaper because I want this debt gone in 18 months. And if you can't do that, then we need to find out another way to make that happen right now. Because that means you're throwing, in two years, that means you're throwing 70K at this debt a year.
Chapter 7: What are some tips on taxes and investing?
Could you guys do that currently with your budget?
I think so, yes.
Are you doing a monthly budget right now? Because you're talking throwing $6,000 a month at this debt.
I think that we could if we went scorched earth.
Now, let me say this because George just brought up a good point. Megan, instead of us talking about you changing jobs, how about we change cars? That's a whole lot less traumatic. Do you have some equity in those cars?
Yes.
Megan, if it were me, and George is right, that number scares me. I wouldn't be able to sleep well. I'd start selling cars, and that changes the timeline. And you still have flexibility, great job with the kiddos. I'm telling you, I would sell the cars.
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Chapter 8: Can I afford to buy a house when I have debt?
I really would.
Wouldn't you, George? Yeah, I mean, depending on what the cars are worth and what you could get for them and you're downgrading. I think there needs to be some level of sacrifice here. And if it has to happen in the cars, let's do that. But we need some behavior change because what got us into this was some behavior. Credit cards, getting nice cars we couldn't afford, all of that.
It sounds like you guys have you've made a change. I don't know what your why was, what that trigger point was for you, but you're ready to do something about it. but you're unwilling to take the promotion. So we need to find another place to sacrifice because this would have been great. It would have added another, you know, probably 900 bucks a month to throw out the debt.
So we need to figure out a way to create that margin if it's not going to be from a promotion. What are you thinking, Maggie? We've hit you with a lot.
You know what? It's exactly what I needed to hear. You're just holding up a mirror for me. So thank you both.
All right. That's what we're here for. You're awesome. I love your spirit. If you guys can do the car thing, it's only short term. And just think about the Scorched Earth. That's part of Scorched Earth strategy right there. You get out of this thing a lot faster. You guys are making really good money. And then we replace the cars. So, you know, now's the time to do this when the kids are little.
You know what I mean? Like, this is the time to do that. They don't care what the car looks like.
Absolutely. That's a great point. Thank you.
You bet. So we did what we could. We held up the mirror and went, here's what's going on. So there's a lot of options here. The only option is we can't keep staying the same. So if we're going to turn down the extra 14 grand, we've got to figure out how we're going to get rid of 135 grand in debt.
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