Dave talks “Let’s shift the focus.”

Dear Dave,

I graduated from college six years ago with a business degree. Currently, I’m in data analytics making about $40,000 a year and have $155,000 in student loan debt. Do you have any recommendations as far as refinancing my student loans and getting the interest rates and monthly payments down?

Austin

Dear Austin,

I’m not trying to be mean here, but what in the world are you doing in data analytics that pays so poorly? Most of the folks I know in that area make a ton more. And you’re going to need to start making a whole lot more to pay off $155,000 in student loans.

For starters, you shouldn’t be looking at this from a what-can-I-do-to-make-this-manageable perspective. You don’t want to give this Sallie Mae nightmare a haircut, then tell her to sit in the corner all nice and pretty. You want her to leave! Now, there’s nothing inherently wrong with refinancing to get a lower interest rate, or lower payments, if you do it the right way. But in most cases that translates into keeping the debt around forever. You need a better plan.

Instead, let’s shift the main goal from that to paying this thing off as fast as possible. That means big, hairy chunks of payments on the principal. And that’ll probably mean picking up an extra job or two, because right now you’ve got what I call a shovel-to-hole ratio problem. The hole you’re in is a big one—a $155,000 one. And you’re working with a $40,000 shovel. You need a bigger shovel, and a lot of extra work, instead of trying to keep these loans around like they’re pets. What can you do—for a short period of time—that’s legal, moral and will make you the most money the fastest?

On the day job side of things, you may want to consider looking for a position with a different company, Austin. You’re way underpaid if you’re in data analytics and making just $40,000 a year.

Good luck!

— Dave

  * Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of “The Ramsey Show.” He has appeared on “Good Morning America,” “CBS This Morning,” “Today,” Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO for the company Ramsey Solutions.

 

 

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Dave Says – without links

(Your Financial Life Depends on It)

Word count: 463

 

Dear Dave,

I’ve been struggling for about a year, ever since I made a stupid new-college-graduate decision to finance a car. It’s a 2018 Jeep Compass, and I owe $21,000 on it. The trade-in value is about $11,000, so I really got stung on the sticker price and everything else. I also have $85,000 in student loan debt and around $7,500 on credit cards. The good news is, I make $63,000 at my job, and that should increase to $75,000 by January of next year. My girlfriend and I are renting an apartment and engaged to be married in 2025. How do I clean all this up before then?

Austin

Dear Austin,

Well, the good news is, you have the rest of your life to never make this kind of mistake again. I’m really sorry you’re going through all this, son. What a horrible thing to experience right after college.

So, you’re $10,000 upside down on a vehicle you owe $21,000 on, right? The truth is, you’re kind of stuck. If you’re serious about getting out of this mess and not repeating the same mistakes twice, you’re going to be working like a dog for the next year or two. Right now, you need a serious side job nights and weekends—maybe two. And I’m talking bare-bones living. No vacations, and no eating out for a while. You don’t need to see the inside of a restaurant unless you’re working there. Get what I’m saying? No unnecessary spending. Period. On top of all this, you’ve got to start living on a strict, written monthly budget.

Now, about your fiancée. I get the desire to fix things before you get married. But married people work together on this kind of stuff all the time. Believe it or not, there’s no perfect time to get married. I mean, it sounds like you two have already decided to go there and figured out neither one of you are perfect. That’s just called being human. So, there’s really no reason to wait on tying the knot at this point. And the truth is, the two of you can whip your finances into shape faster and much more efficiently working on it together—as a married couple.

Austin, I want you tear into this debt like your life depends on it. Because guess what, dude? It does!

— Dave

*Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.

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