Drain My $30,000 in Savings to Pay Off Debt?!

Drain My $30,000 in Savings to Pay Off Debt?!

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• The Ramsey Show (Highlights):

[snugglebear]

Caller: I have debt
Dave: pay it off
Caller: I never thought of that before

[thefall]

Paid off around 45, 000 a year ago this coming may. Cleaned my savings down to $1000, currently debt free and have doubled my mortgage payment and my savings account is back up to $28, 000. It can be done people. Be mortgage free very soon.

[cacallis]

That's how you walk someone towards debt freedom Dave and team spirit to rescue

[insideoutsideupsidedown]

Beans and rice, rice and beans for about 6 hours and he is in the clear....

[nkyryry]

He makes almost $100, 000 a year. Pay off the loans.

[seniormgmt]

Students: if you don’t know, a lot of companies offer tuition reimbursement. I work 20 hrs/ week at UPS and they pay $5, 250/yr for my tuition. Definitely wouldn’t be graduating debt free if it wasn’t for that.

[Ryan_DeWitt]

I understand where he is coming from. It is a very scary thing to completely get rid of your security blanket to pay off debt. $1000 is nothing.

[Takar]

He sounded so surprised that he could be done with debt in like 2 - 3 months. Do it man! Stay in front of the 8 ball, don't get behind it!

[JonathanDennill]

The mindset Dave is trying to instill is to realize that 30k is savings isn’t truly Joshua’s money. If he is in debt, either future money earned or his 30k in savings is not his money.

That’s the mindset - when you owe someone money, the money you are making isn’t yours. Many of us like to think in separate terms of net worth and then keep debt in a separate bubble, but that leads us to unconsciously spend more than we have.

You can try variations of savings that work best for you, but always have an approach that goes toward aggressively paying off debt.

[ndNegociator]

Love the way Dave walks him through the months. That really helps picture it.

[jimroscovius]

If he's nervous about only having $1000, then he could keep $2000 or $3000 back. It won't hurt him much.

[mlj_the_shield]

These are the ones that drive me crazy. "What's your income? $8k pre-tax!" - Ok, I'll then walk you through steps that ignore those taxes along with rent, food, utilities, and assume you have the full 8k to play with. Dave said "I want you to save 4-5k per month into baby step 3". So $8k pre-tax becomes $5500 post tax, not factoring in food, water, shelter, gas, etc. and is told to save 4-5k? Unless Dave heard he makes $8k POST tax, this makes 0 sense.

[mariejones]

no no dont use all the savings..Use half for the debt and keep half in the bank..Then start saving again and put that money towards the debt..You need emergency money especially these days..

[JorgeCorradi]

Sometimes I find Dave's advice a little off. Maybe I'm too conservative and a little skeptical regarding cleaning up a savings account to pay off debt and then starting from scratch on creating the emergency fund... What if the guy goes ahead and pays off his debt and loses his job the next day? That's just something to think about... Sh*t happens...

[CaseyBurnsInvesting]

This guy is killing it. Great job man.

[JayTarsia]

I'd keep 3-6 months of expenses (minimum) and apply the rest towards the debt. I'd rather be able to live worry-free for a few months instead of no debt.

[tylerdiebs]

Why not wait the 4 months to pay it off and maintain a 30k-50k emergency fund for the time being? Not worth the risk of needing the cash to save only 4mos of interest.

[katstix]

Mentally, I get it. Emotionally it makes me sweat 😢.

[Dr.C_Stag]

In response to the title of the video, “Yes.” Call over.
Oh, get on beans and rice. Always beans and rice. Maybe, on special occasions, rice and beans.

[TheGearShots]

I just talked a coworker into taking $14, 000 from his $20, 000 he had in his savings to pay off his car. He was so against it at first but has thanked me a lot since then!