I Regret Paying Off My Student Loans Last Week!

I Regret Paying Off My Student Loans Last Week!

Gerard is kicking off this hour he’s in philadelphia pennsylvania gerard welcome to the show hey george how are you great how can i help today so i graduated law school about five years ago with 145 000 in student loans i got a car and a condo which i know wasn’t the best idea but um i ended up last year selling the condo for a 50 000 profit and i paid down a

Lot of that debt so up until about a month ago my debt was student loan debt was still 106 000 i uh i got a bonus at my job of about 91 000 which was more than my salary and uh yeah last week i decided that i was waiting around to see what would happen with the pause and i i wrote a check for 106 000 and paying off all my loans whoa that’s awesome good

For you man and yeah yeah thank you and you don’t sound excited let’s oh yeah i i paid down pretty much all of my debt but it drained almost all of my money and uh i just found out today that they’re extending that pause again and my friends are giving me a hard time and i’m just kind of like your friends are broke aren’t they worried about they are they are

Broke lawyers as well yeah so let’s not take opinions from broke lawyers let’s take opinions from lawyers who have no payments in the world yeah and so i mean i i don’t have that much money left but i was just sort of wondering where to go from here you’re about to have a whole lot of money you have yeah what’s your household income uh it’s just me it’s uh

80 80 000 of my base salary okay so let’s say 80 000 base and you have no more debt you still have the car loan no no that was the last of it so you have zero debt zero debt um and i i i moved back home my parents are in florida and i decided to stay at their house while they’re there and i did that was a huge help and paying down my debt but i kind of want

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To get out of my own but i now i don’t have that much money and i’m kind of so how much money do you have to your name in savings and your checking account uh savings and checking combined about 13 000. and to you that’s zero dollars you said you have no money uh no it’s money but i mean you know well to go from you know 125 to the bank and 13 in a week is

Kind of yeah but we’ve got to look at you’re 125 in the bank with 106 in debt you don’t have 125 000 to your name that’s true so when you look at your net worth right what you own minus what you owe it’s a very different picture if i’ve got 200 000 in the bank but i owe 2 million i’m broke right and so i want you to be encouraged that you did the right thing

It sounds like you’ve got some remorse here some regret yeah i just think because they they just announced today that they’re pausing those payments i don’t care if they kick it to 2028 man you did the right thing by paying off your debt there’s no point in kicking the can down the road even further because how much was your student loan payments when you add

Them up um but when they when they restarted they probably would have been uh probably eight or nine hundred a month okay so let’s do some basic math here 900 a month times 12 means you can invest that money you can save that money that’s money back in your pocket from your hard work not going to a lender to make them rich so they can build another building

Downtown so i don’t want you to have any any fomo about how you pay it off your student loan debt and your friends are going dude you’re an idiot they’re gonna you’re gonna keep pausing it until three years from now and they’re going to continue to be broke they’re going to continue to live on payments i want to encourage you you’re going down the right path

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You make 80 grand you have 13 in the bank what is three to six months of expenses for you uh about eight eight was about um about three months that’s five months okay so let’s call it 10. let’s call 13. you’ve got your emergency fund in place now let’s begin investing 15 okay do you have any retirement options i did put um i have a roth ira um that my family

Told me to start before i started making too much money um and that has 23 in it and then i have um a 401k that was just started and asked for in it great so let’s invest and this is the way i would do it match beats roth beats traditional so do they have a match in the 401k uh no it’s just a it’s a flat contribution regardless of what i contribute okay so and

That’s already busted and then i’m gonna move to the roth options so do we have a roth 401k or is it just traditional um it’s not it’s just a traditional 401k and then i have my own roth ira those are my only two so if i’m in your shoes i’m going to fully fund the roth ira for the year with my paychecks once i’m done with that i’m fully funded i’m going to put

The remaining 15 into my work traditional 401k until i hit 15 okay that’s it and if you do that and you’re renting right now well i’m my parents are in florida and i’m staying with that i’m staying here in florida okay um but i i would like to get my own place because we’re coming back soon so beyond that we can start saving up for a house down payment and

I want you to save 10 to 20 percent 15-year fixed-rate mortgage where the payment is no more than a quarter of your take-home pay if you do those things you are going to have what we call financial peace and you’re going to do it really quickly because you’re not paying a lender 900 a month that same 900 now becomes your down payment savings you see where i’m


Going with this right yeah i do man i’m more excited than you are i’m ready to get into this house man i’m ready to do some things you gotta stop listening to your friends yeah he was just you know it was just it was the biggest check i ever wrote by about a factor of 10 so it’s kind of you know a lot more fomo like you said well you didn’t really have that

Money because you owed it and debt is when you owe anything to anyone for any reason and so you had a facade that you had a lot of money and i’m proud of you for even saving up that much money that’s unfathomable to a lot of people but i want you to be encouraged that that money had a name it had the lender’s name on it from day one when you signed those papers

To take out 146 000 in student loan debt you owed that money right well gerard i’ve gone as far as i can go man i don’t know why you’re bummed out i mean america’s cheering you on going gerard way to go the whole crowd out here and ramsay solutions lobby’s cheering you on you did the right thing you just got to stop hanging out with broke lawyers your life

Will change drastically man get plugged in with people following the ramsey plan you’re gonna realize man i’m on the right path i’m doing the right things for my financial future i’m not doing things to impress anybody anymore i’m doing what’s right for gerard and that is how you know you are winning

Transcribed from video
I Regret Paying Off My Student Loans Last Week! By The Ramsey Show – Highlights