0:00 Please remember: These are real people who had the courage to come on my podcast and ask for help. Would you be willing to come on this podcast and share every detail of your financial life? Feel free to leave comments based on what you think, but remember that we are here to help in a supportive way, not to demean and criticize. Download the Conscious Spending Plan so you can use your money GUILT-FREE: iwt.com/csp-youtube
Frustrating how financial responsibility is just not common place anywhere. If it's not learned at home and it's not communicated in high school - how can we expect people to NOT make stupid decisions. My older is a HS senior now. Told him the ONLY way he should be looking at an expensive school like Northeastern is to have a full understanding of the post-grad financial outlook.....and understand how it can work (even if the plan is to live at home post-grad to crank down student loans). Loved your Netflix special and just starting to listen to your podcasts......keep on educating and helping people become better/more educated!
I would consider it maybe. I am married with no kids in our 30s and I worry all the time about the ability to afford a house with my student debt and also being able to eventually raise children. We do live like kings now but it really sucks having to worry about spending more to gain a home but at least remove wasted rental payments
@ramitsethi I'm really enjoying your channel. I stumbled upon it a few weeks ago and have been soaking up as much information as I can. However, I find it completely unacceptable how vitriolic and despicable some commenters are towards your guests. Recently, I saw a vile comment from a woman who criticized the guest for having a child despite their student loans. This kind of argument is not only irresponsible but downright cruel. I appreciate that you emphasize wanting supportive comments, but it’s crucial to address this toxic behavior. We should stand up for your guests and create a more respectful environment.
Look at it this way, instead of paying off your student loans, Mom is letting you live at her home almost rent free. Pay the loan off. There is nowhere you can live for $450 for a family of four.
seriously! your utilities alone on a medium size house are more than $450/month. Both need 2 jobs, work alternate schedules so reduce daycare even further. They need to take care of their kids during debt payoff, not outsource most of the care.. stop thinking that "mental health" is a full stop, oh we can never breach her mental health, let's spend $5K more/month on daycare if it increases her "mental health"
@degracianizza9367 Same! Sometimes I feel like they should change guests. Some of Ramits guests really need a caleb wakeup call, while some of Caleb's guests need a calmer approach
One thing I notice about this episode versus some others, is this couple are having a conversation with eachother and Ramit is facilitating it, rather than each of them talking to Ramit about the other like some other episodes. Its good so see that they’re here for eachother not just to tell Ramit how the other is messing up like the other isn’t right there.
It killed me that Ramit did not address the rental car and vacation. I’m sure the vacation was a temporary respite, however I imagine they came home feeling like crap because now they owed more debt. A $2000 rental car plus a small portion of vacation equals the entire year of what they about to ask mom for a break in rent and cell phone payment. It would not sit well with me if my children said, “hey mom, can you support us further by paying more on your mortgage, utilities, property taxes, and home repairs?… while we step off to Disney World?” Hopefully after this experience with Ramit they will take responsibility for their own actions.
I totally agree. We have to forgo instant gratification for greater good in the long run. And mooching off mother seems so opportunistic cause as a math tutor you can make so much more !! Looks like they are always looking for hand outs , from grand mom and then mom.
There are ways to have vacations without spending huge sums like this. Drive your own car to a new place. Stay in a city and use public transport to get around (granted the hotels might be more expensive). But this did not sit well with me either. My family would go camping or somewhere with a pool to get away and we always drove there. There are so many lakes and beautiful places in our country and especially in the northeast! Flights+Rental sound like $4000 minimum right off the bat.
What kind of maniac spends $2000 on a rental car when they're $150k in debt?? Absolutely nuts. I just rented a car for 4 days for $50. Depending on the country I've managed to rent a car for less than $5 a day, so I'd be interested where on earth it could cost $2000
We just rented a car for 16 days in the Netherlands for €500 including insurance with no excess. I can’t get my head around student loans as we don’t have them in Ireland. Uni is free except for €3k pa. Registration fees for a Bachelor’s degree and postgraduate Master’s is around €5k to €10k depending on what it is. Medicine postgraduate is more expensive. I have friends in the US whose kids are dual Irish/US citizenship and they all come to Europe for postgraduate studies. One did a master’s in Spain for €6k, would’ve cost ten times that in the US.
I have a lot of admiration for this couple. I think they are so loving and respectful towards each other, even though they clearly have a lot of stress in the relationship. I was really moved by their vision of what they want for their kids.
First of all, want to say that I am a big fan of Ramit and his message. But this one left me feeling angry. I felt like he skirted the fact that they live beyond their means (extra day of daycare?! vacation when in debt?!). Ramit’s first solution was to ask the mom, who already has 4 people living with her and seemingly pays the majority of the upkeep of the house, for a break on their already incredibly low rent and stop paying for her cell phone! I found this appalling. Take responsibility for your own family and situation. Ramit dropped the ball on this one
100% spot on, I just disagree on one point. Vacation when in debt is and should be fine; But they're not just vacationing, they're expending significant sums of money ON a vacation. You can go somewhere local and cheap and still have a vacation weekend once in awhile; Likely for less than the cost of the $2000 rental car alone, to cite the example posed, all other costs of their typical vacations aside. Vacations are a means to relax and destress the mind, Putting yourself under a thumbscrew and breaking yourself by going sans-vacation of any sort is not the right way to do things. They are absolutely vacationing well beyond their means while they have a mountain of debt to handle, and that's not good. Just changing their vacation plans alone would make a huge dent in their debt problem and REDUCE a lot of their stress by making the vacations an actual vacation and not a momentary reprieve before getting home and realizing "Oh god we just spent $5,000-7,500 and made our problems even worse."
@@KazanaAoiwell said! Can’t afford anything and think about going to vacations? There are less expensive ways to relax without breaking the bank. I don’t hear about taking a second job on or seeking a better paying job or investing of learning a trade for better income.
And how she brings up screwing their mother in law over when she's asked to save on day care by spending a day with her kid. She turned the tables so fast on that, I'm surprised Ramit didn't call it out. The poor MIL is helping them out and they still want to ask for more? But she can't save $400 on daycare by spending a day with her other child? She also said she could work more so that woman definitely doesn't like her older child. I wonder if he's a step child. That's so wrong.
@@AlejandraBecerraRI was a teacher for decades. The pay isn’t great, but almost every teacher I knew had some kind of side hustle to supplement their income. And we all worked during summer vacation at some kind of job. No one went to an expensive university to get a teaching credential. It’s not necessary.
I felt the same way initially with this episode. I believe the point Ramit was going for was to try and create the ability of hope. The first step to helping them is to allow them to believe it can even be possible before they can make any type of effective plan. Yes, they are overspending. They know they are but have no ability to change without the hope of a better future being possible. Beating them down on their spending when they already feel hopeless would most likely cause them to disconnect.
Does mom even want them living with her or does she feel obligated to help? It’s not wise of them to count on inheriting her house or money as mom will most likely need it during her retirement years. One needs to first take care of themselves before helping others. Wife seems entitled. If I were mom I’d be meeting an estate attorney to draw up a very clear trust.
I bet they claim ownership of the house somehow if the mom needs nursing home care so the house couldn't be sold as her asset. No way are they going to care for her until her death
I do empathize with anyone with a high student loan But, as an aging and divorced mother myself I know the struggles of trying to stay ahead financially. Raising children is expensive and very hard work to manage it. In order to put money away from my son's college fund I had to totally sacrifice everything. I would pay the mortgage, utilities, buy food, vehicle gas, pay for the life insurance monthly bill, and put the $250.00 per month PER CHILD into their college fund. Then I would have $35.00 left for the month. That $35.00 would go towards buying milk, cheese, bread and oranges (my sons after school snacks) in between grocery buying day. I drove an old used vehicle, took NO vacations, no eating out, no Starbucks, no cable TV and no a/c not even a dishwasher. This couple is obviously not saving for their children's college because they cannot. But they also seem NOT compassionate with their mother and grandmother's own family situation (the unplanned burden of her own mother moving in and the loss of their monther's husband?) Please understand his mom's money/his grandmother money and their choice of what to do with it. Don't you realize that your mother needs her home to live in? Do you REALLY expect her to sell her home and give you the money - how is she expected to live? Are you living in her home mortgage free - and does that not count for her contribution to your life? Who is paying for the constant maintenance on this home you are living in? Are you aware that maintaining a home is expensive (replacing roofs/furnaces/water heaters, utilities etc.) (This is not making any excuses for the predatory lending of the college lending processes.) I do NOT and will not ever understand child/adult children who believe they are owed a college education. What about your responsibility to NOT go on vacation, paying $2,000 for a rental car or eat out when already living in debt? I don't get this situation either....If I did not have the CASH I did not do it- PERIOD!
I think the primary complaint is that Sam was told it was handled, and it wasn't. You make valid points. Their rent is impressively low for a family of 4, especially making $120k/yr gross.
This couple should 1. start cooking at home 2. Avoid going on vacation till the loan is paid off 3. Pay maximum towards the student loan 4. Only use debit cards. DO NOT USE CREDIT CARDS 5. Shop for clothes only during Christmas & birthdays This is what people in India would do, if they had a loan.
Lucky you have never dealt with these student loan servicers. They give you bad information that's worse than nothing at all, but then that bad info costs you in interest capitalization (when the accrued interest is added to the principal going forward). Interest capitalization is triggered in certain circumstances (sometimes unavoidable, like after you graduate) and the servicer will advise people to take those actions without letting them know it makes their loan bigger. I'm set to pay off my student loans soon, and I have bought and sold a home. You get _way_ more information about a mortgage than a student loan. It's really night and day.
And okay after he explained it, I can see why he would feel bad about his college savings being used for something else, without his knowledge, after telling him it was set aside for him. That's like offering to pay for a wedding and then telling them you don't have the money after everything is booked. We took care of my grandmother at home too. We didn't have a big house but we didn't need to build an addition. The youngest adult just sleeps in the living room. I'm wondering if they was just an excuse to build the addition. I feel like there was more to that story...
I really understand Sam’s feelings and the crushing weight of student loans. It’s a terrible stress and load to carry. It does feel much easier to ignore when cash flow is limited and out of reach.
They said they don't have a good relationship with his mom. Probably because she knows they are just waiting for her to keel over so they can have the house 😬
Hi Ramit, I notice that BetterHelp is one of your sponsors. I don't know if you're aware that the FTC recently (July 2023) fined them over $7million because they were selling sensitive client information to Facebook etc? Licensed therapists can't do that
What's the goal of the comment? Are you trying to publicly make ramit forgoe his sponsorship for fear of public humiliation for being associated w/ the brand and being "cancelled"
I think they are worried that Ramit having Better Help as a funder erodes his credibility and they want to help him see the disconnect between having a podcast that helps people while having an unethical sponsor and correct it by finding different sponsors.
I got news for you. EVERYONE sells your info. I know why this is sensitive but the sticking point is that a therapist has your info it implies you sought treatment. But be aware, every site you visit is tracked.
I’m having trouble understanding how the partner who wanted more children cannot imagine spending four more days a month with the children she already has-
I love this couple. Ramit is right, hit the credit cards first and the highest-interest student loan next. I think 12% interest on a student loan is criminal. My student loan at its highest was $88,000. I paid it off. You can do it! You will do it! Set yourself free. You are a sweet couple. Best of luck.
Beyond cheeky to ask his mother if they can pay less rent when it’s already extremely low. She looked after her mother with dementia and now has seemingly taken in her adult child and his family. Find something else to cut.
I understand this because I’m in a similar situation, I’m 28 though. Its motivated me to be serious about money since I graduated, and I’ve job hopped 3-4x. At 17 my dad told me he’d help pay for my school, and that didn’t happen. He ended getting remarried and having kids. Hey I’m grown I get it, but its the emotional aspect of someone leaving your life coupled with the costs. I mean when I agreed to go to school I honestly didn’t really understand what I was signing up for. Now I’m woking hard to pay off loans in my name and then getting my first multifamily.
I had $80k between undergrad and grad. I went to public undergrad and private with a partial scholarship. It was tough but I paid. My parents helped but could not cover everything. Today, 529 plans can really help someone plan.
Daycare - If this can’t be reduced right now because the kids aren’t in school yet and there’s no cheaper options then I’m assuming that this will be reduced by a lot in the next few years, which will free up more money to go toward debt. In other words, some fixed costs are just temporary, and knowing that should give them hope that things will get a little more manageable in the future.
Yep. Plus, I’m sure they can get their phone bill down a lot further. They should get something like Mint Mobile.. $25 per person so that’s down to $50 all the way from $264! $132 would be something like AT&T..
Hi Ramit. Love your content and have learned a ton. I know you welcome feedback about sponsors, so here goes. Way too many ppl who are not high net worth spend too much for Door Dash convenience. My husband and I cut our food budget in half by limiting those orders.
Jilljoseph Not trying to shame you in any way, what you are saying is absolutely true, limit convenience purchases--- that is good for the budget. And I'm not trying to say I'm the all-knowing oracle of things either. Again you are correct. When we were in debt payoff mode, which lasted 56 long, hard, exhausting months, we ate out a total of 3 times and went on zero trips or vacations. Simple math we spent a total of less than $150 eating out over a 5 year period. The end result is we can now afford to eat out every week if we wanted or have Uber Eats grace our doorstep several times a week, but those 5 years of doing for ourselves everything we can do for ourselves, not paying someone to do basic life tasks such as making dinner or watching the kids has become habit. Someone might say life is too short to not have some fun or a break from routine chores but we personally wanted out of debt far worse than any convenience we could purchase. I get it, not everyone thinks that way but still a bit of pain goes a long way to maintain discipline. If we had it to do again we would have gone with more scorched earth, not less. It all comes down to living below not above our means. To cut expenses, I actually taught myself how to cook during our debt free journey so my wife didn't have all that burden placed on her. Today I do 90% of the food prep, I enjoy it more than she does.
Just bc it might not make sense for your budget doesn’t mean others might not be able to afford it and enjoy it. It’s a premium service but that doesn’t = bad.
The couple uses a lot of blaming others. Even when he talks about the student loan forbearance he says, “ they didn’t tell me that the interest keeps accruing…” Well, yes, they did. It was in the financial disclosures, he just didn’t take the responsibility to read them. He also clearly didn’t look at the numbers of what a high school teacher makes and realize that he didn’t need a “name brand” school to get a job as a teacher. I’m not trying to shame them. We all do stupid things. But my point is until he loses this “entitlement” pov (ie his moms house is HIS money just sitting there…) they will get no-where. As that great philosopher Nina Simone said: “God bless the child that’s got his own, that’s got his own.”
He's very entitled. When talking about his grandmother's diagnosis, the thing that bothered him the most is that "my money" which he quickly corrected "well that's her money but it was allocated to ME" went to her disease costs. :/
Thank you for having regular income couples instead of those high income ones you usually have but together they still make over $100K. I wish you’d have couple making under $100K to be more relatable to average people. Secondly, parents should never have their children oblige to take care of their financial needs at old age. But most of all, children should never oblige their elderly parents to take care of their financial mistakes no matter who has told them to take out loans. He wasn’t placed on gunpoint to take out those loans.
After watching most of these convos on this channel. The women in the relationships are way more aware of the situations, and honest. The guys are out to lunch.
@@FreedomFinanceFun Yes, he should know the numbers. But being a high school math teacher has nothing to do with knowing your personal finances. Teaching what a hypotenuse is doesn't mean you are aware of your credit card debt.
I spent 20 years paying off student loans (4 degrees) that I never expected my parents to help with from day 1. It gives me pride to know that I did it all myself - without travel (except to visit mom), concerts and 'dumb' - now I'm in good shape. The irony is that my sister believes my parents paid for all of it! I will say that I would NOT borrow the amount that these same colleges/universities cost now! It would NOT be worth it!! The pay in the Mental health field does not compensate for the education costs now. Same degrees - same places $250,000!
I don't understand. If they are living for $450/month in the mother's house, why can't they make the loan payments? Pour all of their salary into loan payments, except for the minimum required stuff like food, utilities, clothes and other necessities. Why isn't the husband or wife working part time on weekends? My phone is like $45/month, not $260/month. I buy open phones used on ebay for like $300.
Yeah, I agree some serious discipline and planning has an end in sight. But they are clearly avoidant with money and probably aren't motivated enough to switch accounts and take calculated steps to lower bills. They feel trapped and they are learning to stay trapped If I had to live with my dad, I would be clawing my way out (hes not a bad guy, but that just sounds terrible 😅) But I don't know if I could plan for retirement when I'm that deep in debt, I would just focus on being a positive net worth or just out of debt to start with
Omg!! As a fan and supporter of Ramit it was thoroughly disturbing to me that this guy was not advised to take responsibility for his own educational expenses!! He seems to blame his deceased grandmother for his choosing a good education! Noone wants to admit the fact that grandmother's money was used for her own care! Her primary home was most likely Sold in order to fund "addition" to their current living quarters! After grandmother's death, Mom's money is hers to spend as she pleases! These two are waiting around like vultures for mom to sell or die!!! She must surely feel that energy from her Son and daughter n law who are Living there With HER!!! It's like he's still chasing the ghost of granny $$ money. I am disappointed you didn't address this as "morbid" !!
I'm disappointed in Remit as well The couple are extremely selfish I hope the mom said no to the lower rent. If she said yes, I hope she told them to either pay more for utilities or use less electricity .
As someone from Canada, I find it completely appalling how student loans in the US can be this predatory. Tripling in 3 years? How is this not illegal? Even if they happen to negotiate the debt to half, it’s still a very healthy return for the lender. It’s the parents’ job to educate their children on money and debt. While this couple does not take responsibility for their finances, their parents did a very good job setting them up for failure. The least the mom can do is provide free housing until this debt is paid off.
It is generally legal to lend and borrow money in the US under whatever conditions both parties agree to. Not saying it’s good or bad, but it’s the American way to allow commerce.
yah, about 50% of parents have their head up their ass. But I think the tripling in 3 years was an exaggeration. These people have been paying minimum payments, even though if they change their behavior, they're capable of paying much more, but when you do that on a debt w/ principal that high, the interest accrues rapidly almost like a mortgage, look how much interest you pay on that. Anyone w/ large student loans needs to really buckle down and act like they're running from a fire. no extras, no pricey vacations, no eating out, etc.
Totally agree. Ugh, I kinda wish the mom would kick them out for a year just to learn the reality that the rest of us have to deal with. Yucky yucky move…
Agreed. Together with the implication she’s “betrayed her promise” by not funding his school or selling the house. She’s covering that obligation by saving these people 1500+ a month on shelter, nobody’s being let down.
@@tinad8561 She did not betray any promise in the first place. Grandma made the promise. And then grandma's money had to be used for grandma's care - as it should be. They likely had to choose between adjusting the house and sending grandma to a care facility. Either way, there would be no money left for his degree. Circumstances changed, the money was no longer available, end of story. And let's not forget that he dropped out of the first college and went back later for a different degree.
Minute 53.42 I know you make a joke about the house but it doesn't feel like they see it as a joke. He really thinks he has the rights to his mother's house 😮
I asked my mom what “we” were going to do about my student loan…. And let’s have mom sell her only major asset and pay off our debt with it……. Time to grow up boys and girls. If he had made payments consistently even if not in full….things wouldn’t have gotten to this level. I feel for the position they’re in now but….a call years ago would have made a big difference instead of waiting for his wife to do it for him.
I agree with some comments regarding how Ramit appears to ignore some big red flags - spending out of control, no accountability on the part of both of them, ignoring a huge debt. I wonder if Ramit used kid gloves to present options for the couple because of the way the husband described his complete shutdown when dealing with money issues. The important result of the session was a feeling of empowerment the couple experienced when Ramit showed them how changing their choices can make significant improvement to their financial situation. Now, they went from feeling overwhelming anxiety when discussing money to finding they do have the means to affect their situation positively.
This is really hard to watch. I don't understand how you can ignore your student loan debt when it's less then 30K and let it get to 157K. This is just ignorant. He has been living with his Mom the entire time, and he could have easily worked two jobs or at at least worked 60 hours to get out of debt. Sam really dropped the ball here, and this guy is a math teacher. Smh. He made this debt insurmountable by ignoring it and not paying it. This guy is like almost 40 and he still hasn't figured it out. I agree that Student Loan debt is really killing our growth and economy, but some people basically want a bailout for their silly decisions like ignoring your student loan for 20 years. The Federal Government needs to stop guaranteeing loans because this is a clear example that some people will never take responsibility and will never grow up mentally. I feel sad for his Mother and I would literally give them a timeline to move out and see what the real world has in store for them outside of her house and their almost rent free living. Sam needs to get it together and if being a Math teacher is not enough, then go get another job paying more, or go get a second part-time job. Come on Ramit, don't let these ppl get off so easy.
This episode is so annoying. Why on earth, with that kind of debt, would you think you were ready to bring children into the world, you are not responsible enough to pay your own bills, why would you have a child? And living with your mother. What a dismal existence. I usually really like Remit’s you tube shows, not this one.
I racked up 30k (after interest) in student loans in the 80s to pay for my teaching degree. I paid them off by getting a different career. You can do it!
PSLF. Public Service Loan Forgiveness Program. The PSLF is a ten-year program. There is also a federal program for teachers who teach five years in Title I schools to have their loans forgiven.
I have a very similar situation to Sam. Being told that your parents or grandparents are going to help pay for your college education and then pulling out the rug from under you is the worst feeling you can ever imagine as a recent graduate. Being told that your college tuition etc. is paid for and you have nothing to worry about besides choosing the best college, getting good grades, making the best of your time there, and focusing on getting a good job after. I empathize deeply with Sam as I am in a similar situation however, I have been slowly paying down my debt especially the private loans because those aren't going anywhere. These stories are why we need to fight for student loan reform, caps on interest rates, and in some cases forgiveness. These things would only help to boost our economy.
I know I haven't listened to all of the episodes of this podcast yet, but I've listened to dozens. This is the first one that I've listened to that directly addressed how student loan debt can affect a family. I've been literally waiting for months to hear them talk about it. Because even episodes from this year (2023), when we knew that student loan payments were being re-started, they just kinda said, "We have $Xk in student loan debt, but it's been on pause since the start of the pandemic." OK, but what's gonna happen when you gotta pay that come October? You can't pass that by! It's very important to any financial discussion for those who carry that debt.
If I could make $100 per hour tutoring and consulting, I would quit the teaching job and focus on that if possible. Even at 15 hours per week, you'd be making $97.5K annually, and you could spend the rest of the time minding the kids and eliminate expenses for child care.
I can’t understand the cell phone expenses, three phone lines should not be more than 100 per month and they overspending on vacation but asking grandma for a rent reduction. However he had done amazing work and changing their perception of money. So great to see his coaching working. Congratulations Remit
Wait, 130k is just interest? So he had 40-50k which would have been managable, at least the minimum payments until he gets if forgiven as a school teacher. That takes 10 years and it has already been 12. This is him and his family being negligent by brushing if off and felling him he will be fine... He went to an ivy league school, at least for 2-3 years and works as a math teacher. There is NO excuses he could make
My 50k was set up for 30 year payback, I’m over halfway through that and still owe 27K. The system is a mess. Salary nothing close to what was promised. The system is very stressful and burdensome.
@@CH-vm6cqIt's only for federal loans. And it's only for certain teachers in certain circumstances. They also don't forgive the entire loan. I believe it's around $10k, and only after 120 straight months of full payments.
Ramit’s body language when she said in the beginning that his interest alone is $130K. It gave him anxiety and that’s not even his loan. Heck, it gave me anxiety 😮
I'm from the UK, so the loan situation is a bit different here for students. It's clear from this perspective that young people and their parents are not educated and informed enough about the private loan situation in USA... Encouraging kids to dream of going to the very best universities without a consideration of the cost is bonkers to me. I can see why (for example) a lawyer may opt to go to Grad school at Harvard or Yale and would gladly borrow $500k to make that happen... because it's only a matter of a few years before they could be earning $300-500k in income to pay it off. However, for most professions, that level of earning is just unrealistic and the issue is, I think, in the lack of sensible guidance for these young people who are now burdened with crazy loans for education/professions that are never going to earn them that level of income where repayment is easy. 12% is crazy.
If he's a teacher he can qualify for student loan forgiveness after 10 years in the field, as long as he works for a qualifying employer. They should look into that and pay off the student loan debt in 10 years.
I get the feeling this couple prefers to be seen as victims rather than admit poor choices and complacency are big sources of their issues. Ramit was a bit too soft on them, in my opinion. I think they could have benefited from a stern reality check.
Didn’t finish the episode yet but I hope someone told this family about PSLF (public service loan forgiveness). There are also teacher programs where you get money to pay for your loans!!!
One thing not mentioned is that many school districts pay on a once a month schedule. My district gave us an option for a breakdown of getting paid a percentage of our salary on the 25 of the month. I chose that option. That gave me the knowledge that I would never go to zero or hit a negative balance.
My wife is a public school teacher and doesn't get a paycheck from June 10th until Sept 15th, that is 13 weeks. We put money aside for this. The time off in the summer frees up time for Sam to either make more money or save some money by not using child care or better yet both, but I didn't hear anything about those options, maybe I missed it?
@@thomaschew2191Maybe that depends on the district? Or maybe that's a contract choice? My husband is also a public school teacher. He gets paid every two weeks, including during the summer months.
@@laurao3274 My wife's district offers the option of a smaller paycheck with year round paydays or bigger paychecks with nothing in the summer. The amount of salary is the same either way so if there is no paycheck it is up to the teacher to plan for that.
These people are all about give me, give me, They should feel bad about the older mom losing money at the expense of her own retirement. They both need to get a 2nd J.O.B or hustle and Stop the vacations. 2K rental car WTF... how about you stops the Vacay and pay your rent and utilities that are below market.
It’s funny when I was graduating high school they always said go to the best school too. To this day I tell people that’s one reason the predatory student loans are such a problem. That was adults telling children what to do and then the children turn into an actual adult and have a bunch of debt
Listen guys. These loans suck, but they are manageable. He can get on a plan and pay about $450-$550 per month. Maybe even less. It sucks that he’ll likely never pay it all off, but the plans say pay 25 years and they cancel it. It’s like any other bill. Put funds in your 401-k to decrease your income, still invest, get the HSA and maybe Roth. You just work around these if they are government loans.
I paid off a $165k condo in 8 years while raising kids... I have a hard time feeling bad for him/then for sitting on this and not paying it down. Just ignored it.
This couple is so rude towards their mom! They both work! They should be able to PAY full rent and all the rest! Mom is giving them a HUGE BREAK! Two adopts and two children for only 450 per month!
You need to be organized with all your debt, monthly payments, budget and income/month in order to make any positive progress. Living within your means and not over spending. Learning to be grateful for the little things.
Why not suggest they look into if their employers offer a Flexible Spending Account or HSA to load that up pre-tax for daycare. It lower their tax rate. Avoiding the credit card all together.
So much entitlement and blaming parents. Like i know they made promises. But life is unexpexted...she got alzheimers, the parents had to spend money renovating their home and caretaking for their mom. After all that, a divorce and still working at her age they are waiting hand in foot for her to sell the house. But now, they are complainjng because if the "conditional" nature of having essentially free housing and promised gift house upon her death. What if, God forbid she gets sick and needs full time care? The state will take the house to cover any medical costs that exceed what she can afford. If thats the case, she needs her house to pay medical bills. So they need to stop living off mommy and daddy and planning their future and just complaing about bills sitting on their hands. Ughhhhh they upset me
If I were an adult and a parent let me live in their home rent free with my family, I’d take over all the utilities. This couple makes over $100K/ year and are not paying rent, there’s no reason why they could not pay $400 to the parent. They need to learn how to live within their mean and manage their money properly. They have been spoonfed for too long, and specially him.
@@makayla4292 - That’s like nothing for 2 adults. And telling his mother that they can’t afford that either is not fair. There’s money to be made in 🇺🇸 , but people are just lazy.
Sorry but this guy constantly looks like a human pikachu. I get really annoyed that he has his Mommy pay his rent and he still feels entitled and resentful toward her spends in an entitled way always expecting someone else to be responsible for his expenditures.
Do they not keep some kind of checkbook? I feel like that would be really helpful for his anxiety about money in the account. I use an excel spreadsheet and then I don’t have to worry about if there’s enough money between now and after when I get paid or the monthly bills come out.
1. Never count on anyone else. Not to pay off your loans. Not to give you security. Always bet on yourself 2. He would be better off learning to be an electrician, plumber or welder for a fraction of the cost and be financially free. School is great, but not with loans. He needs to take accountability and shift his life to a new path to get out of this.
@@vulpixelful that’s not SL what I said. That’s specifically allocated for that. But you shouldn’t expect to pay off loans by selling your parents house. And when someone says “just go we’ll pay it later” you better know exactly what that means.
@@adeltoral710 It's not "someone" it's his mom 😂 and it sounds like she actually had a fund going. I realize not all parents are trustworthy but people generally assume that they are at first, we're not robots out here 🙄
Except that he already has the debt. He might as well use the degree that he has. If he were to go get more training in a completely unrelated field, that would be more money he would have to spend. Plus, he would likely have no income for months, if not years. So no, him becoming an electrician or whatever would not help him in his case. If you were talking about a kid straight out of high school, that would be a different story.
The problem is the major he originally took. Almost nobody took the psychological major ended with a great career, it’s an easy major to finish though.
@@samuisun6684I don't agree... She should have taught him how to get a federal loan, not a private loan. And if she didn't know, that's what high school guidance counselors are for.
I remember having student loan debt. It was never clearly explained how much a two or four year degree would cost or how long to attend. Remember the two and four years is someone taking the max number of credits a semester not just 12 units full time. Example two years requires 60 plus units. That’s 15 units a semester if not going to summer school not minimum 12 units full time. People seeking a college degree need to know exactly what they’ll be paying for by checking with a financial advisor before signing the loans especially private student loans. College and lenders are businesses like any other. A college doesn’t have to be listed as “For Profit” all colleges and lenders are all for profit!! Know the occupation studied will be able to afford the student loan debt payment ahead of time. Good luck 🍀
The mom is paying back his student loans by letting his whole family live there for such low rent. And the fact that the interest is allowed to multiply at such an alarming rate on these private student loans is criminal.
Why not sacrifice a little more and pay off the credit cards asap. Up the payment to atleast 2000 a month and make sure you dont spend on the cards anymore. Taking over a year to pay off 8000 on a xredit card would stress me out. They could pay it off in a couole months if they wanted.
OMG! Same. Told I HAD to go to college. I HAD to get good grades and was promised, for all of my hard work, my education would be 100% paid for. Total bait and switch. LOL!
I finished watching the Netflix show but my only question is about the advise to "invest" your money instead of putting it on the bank. When we say "invest", what does it literally mean?
Ideally, you should have money in several different investment vehicles, as diversification is typically advisable, but investing in something is almost always better than letting your money sit in a bank account where you may only be getting less than 1% interest on your money, which is likely not enough to keep up with the average inflation rate, which is closer to 3.8% per year, based on the last 50 years, and is probably getting higher each year. This means that each year, due to inflation, your money sitting in the bank is actually losing value. So what is one to do about this? Invest! You must invest in assets that will appreciate in value! But to your point, what are these assets that fit that criteria? Well, one easy investment vehicle, that most working people have access to, is a 401k. The beauty of a 401k is that they are tax advantaged, meaning that the contributions to your 401k are made with pre-taxed dollars, which means that your taxable income for the year that you contributed is reduced, that means that you will pay less in taxes. The money in the 401k can then grow tax-deffered, meaning that taxes won't actually be taken out until you withdraw it in retirement. Plus! Many employers offer 401k matching, where they will match a certain percentage of your income. That's free money that you are making for simply investing! Now, of course, most require a minimum and have a maximum limit of how much they'll match, but you should take advantage of it if it is available. It should be noted that, even if you are investing in your 401k, there will often be a plethora of funds to choose from within that 401k account, to allocate your money. This can be confusing especially to the unlearned person. Of course, you can look up a suggested allocation for a person your age(this changes as you get older), but then you have to worry about reallocation and rebalancing each year as you get older and as your investment grows. A simple alternative, 401k plans will often include some "target date" funds. These funds are often indicated as "Target Date {insert year of retirement here}". The beauty of these target date funds is in simplicity. You can do 100% allocation to that one fund and you no longer have to worry about reallocating or rebalancing your investment. It's all handled for you and done specifically for your age group. Set it and forget it. Why is this investment in a 401k better than money in the bank though? Because the 401k and other retirement accounts are tied to the stock market, which historically speaking, assuming proper allocation, you're looking at a return on investment of about 7-9% annually adjusted for inflation, meaning that 7-9% is what's leftover after inflation is taken into consideration, which also means that your money in these investments is growing WITH inflation and not being hindered by it. If you have invested in your 401k and maxed out your employer's matching, you might decide that you want to look into other investment vehicles. One of these, that I think everyone should look into is known as a Roth IRA. A Roth IRA, similar to 401k, has a variety of funds tied to the stock market and even has target date funds, as well as individual stocks, bonds, and securities. The interesting bit about this type of account is how it is tax advantaged. As opposed to a 401k or Traditional IRA, where contributions are made with pre-tax dollars and can be used at the end of the years tax deduction, a Roth IRA's contributions are made with after-tax dollars, so you can't use them for a tax deduction, BUT you get the benefit later in life of not having to pay tax on the withdrawals in retirement. Why would that be a good thing? Well as counterintuitive as it may seem, paying taxes on the frontend rather on the backend, can actually provide you with more money in retirement. Let's exemplify this. Bob and Alice are 30 years old and plan to retire at 65. Each has $5,000 to invest annually. Alice has a Roth IRA with a starting balance of $1,000, and Bob has a traditional IRA with an equal amount. Let's assume the annual contribution of $5,000 at an annual expected rate of return at 7% and a tax rate on contributions and withdrawals at 25%. By age 65 Alice will have an account estimated at $701,163 tax-free, as to where Bob will have to pay taxes on his invested savings which will ultimately leave him with an estimated $481,390 dollars after taxes. Again, Bob will have been able to claim tax deductions on his contributions ultimately saving him money throughout the years, but in real life depending on your tax rate, this has the potential to hinder the amount of money that you save in the long run. It's probably best to have both types of accounts, a Roth and a taxable account, to leverage the tax benefits of both. Important to note that 401k accounts do sometimes have a Roth option that makes the account behave like a Roth IRA from a tax perspective. A Traditional IRA, uses pre-taxed dollars, but usually has the same investment options as a Roth IRA, and can be a reasonable alternative to a 401k if you're employer does not offer one. What I haven't mentioned is that all of these retirement accounts have annual contribution limits. As of 2023, the limit on a 401k is $22,500 and for both a traditional IRA and a Roth IRA, the limit is $6,500. The reason I bring up the limits, is because while you can have both a traditional IRA and a Roth IRA, the contribution to both accounts will count towards the $6,500 limit, because it is a total limit for all traditional and Roth IRAs. So it's definitely something to be aware of. Your IRA contributions however do not count toward your 401k limit, and vice versa. Ultimately, the choice to have a traditional IRA, a Roth IRA, or both, is gonna depend on your tax and retirement needs. The retirement accounts I mention in detail because they are probably the lowest barrier to entry, for most average people, when it comes to investing. Probably also among the least risky investments that one could get into. There are a ton of others though! I suggest you conquer the retirement account first, but if you do, there are regular stock brokerage accounts, where you can invest in stocks, bonds, options, mutual funds, commodities, and cryptocurrency; there's also CDs(certificate of deposit), Real Estate, Annuities, Precious Metals, HSA(health savings account), art, collectibles, investing in starting a new business, and probably most important of all, investing in yourself, whether that be education and/or health. None of this matters, if you're not healthy enough to enjoy it. And you can't expect to grow your nest egg unless you are also supplementing yourself with education, and I'm not talking specifically about schooling. I'm talking about school, yes, but I'm also talking about online courses and masterminds and conferences and even just simply talking to other people and being open minded enough to realize that everyone you interact with has something to teach you, sometimes you just have to figure out what the lesson is. I know this response probably expands past the scope of what you were asking, but nevertheless I hope you got some value out of it! Have a wonderful day!
These people take no responsibility for their own actions. It’s the fault of their guidance counselor, grandmother, and mother. Definitely not his fault. Right
It's easy to see how a kid being guided in a certain direction could land in a spot like this. It's his problem now, and here is is showing up to find a way out. Good for him.
The loans are most certainly their responsibility. However, his family set up an expectation to support him with school at a point in his life when that assistance would have been needed. Therefore he made decisions based on that financial support coming through but circumstances changed. I see what you’re saying, but his family also pulled a bit of a “bait and switch” on him (even if it wasn’t intentional), and it doesn’t sound like he received the proper guidance to navigate those changes to lessen the financial impact. Most people don’t graduate high school and suddenly become experts at making the best financial decisions. Personally, I was completely clueless and had no one to help me figure it out at that young age. Unfortunately, some lessons are learned the hard way.
I have fn cancer and I can't crank out my student loans. I am well enough to go to work but sick enough I have to leave after only 1-2 hours. wtf. I miss the days of being well enough to swing 2-3 jobs.
Ok, so he was promised money by his grandma. But her circumstances changed and she no longer had that money. If it hadn't been spent on the house to make it possible for her to live there it would have gone to a care home for her. He is still clinging to that money promise and now expects his mom to sell HER house which surely is part of her retirement plan. In the end, he chose the college, he dropped out of his first degree and he decided to go back and get another degree. It's HIS debt, he needs to start paying it and not hope that mom will sell her home. Besides that would mean that they would have to pay rent, utilities, etc from now on for a family of four. I doubt that this would really improve their financial situation.
These loans are predatory, he probably just shut down. These servicers give you bad information that's worse than nothing at all, but then that bad info costs you in interest capitalization (when the accrued interest is added to the principal going forward). Interest capitalization is triggered in certain circumstances (sometimes unavoidable, like after you graduate) and the servicer will advise people to take those actions without letting them know it makes their loan bigger. I'm set to pay off my student loans soon, and I have bought and sold a home. You get _way_ more information about a mortgage than a student loan. It's really night and day.
Debt is a choice. Many people don’t accept that debt is a personal responsibility or realize it too late and then consider it other’s responsibility vs. put in the grind they signed up for. A change in the system is definitely needed.
Except, when it comes to student loans, they're in an impossible to avoid student loans for most people and, since the government removed the regulations preventing lenders from engaging in predatory lending practices, the cost of the loans and tuition is artificially inflated.
@@bestyoutubechannelever3206 That goes for student loans as well. We need to teach kids about the value and opportunity cost of education. I realize the US and institutions haven’t done a good job of this but kids shouldn’t be going to school for careers that won’t pay dividends and put people in unaddressable debt. Educating people about the fallacies of collegiate education is critical so they can take the ownership that debt deserves. It’s unfortunate that many people where caught with wool over their eyes and learned the hard way. Changing the institutions isn’t likely so we need mindsets to change on value.
@@bestyoutubechannelever3206i disagree. You can pay your way through college. It might take twice as long but it’s possible. In highschool, everyone looked down on community college and everyone wanted to go out of state to get “the college experience”. It’s a personal choice.
@rehanas.4092 Except you shouldn't be forced to have to spend twice as long in debt because of bad policy and they you certainly shouldn't be negatively criticizing people for being upset over it. You don't seriously think this way? Community College only has limited selection and only two years and it cost more than university did before the bad policy we have now. Again you don't seriously think this way do you?😧
@@bestyoutubechannelever3206 I agree with the other person here. I make 200k a year and never finished college. I saw through it. Other people should be able to as well but they choose to be blind to the experience.
0:00 Please remember: These are real people who had the courage to come on my podcast and ask for help. Would you be willing to come on this podcast and share every detail of your financial life? Feel free to leave comments based on what you think, but remember that we are here to help in a supportive way, not to demean and criticize.
Download the Conscious Spending Plan so you can use your money GUILT-FREE: iwt.com/csp-youtube
Frustrating how financial responsibility is just not common place anywhere. If it's not learned at home and it's not communicated in high school - how can we expect people to NOT make stupid decisions. My older is a HS senior now. Told him the ONLY way he should be looking at an expensive school like Northeastern is to have a full understanding of the post-grad financial outlook.....and understand how it can work (even if the plan is to live at home post-grad to crank down student loans). Loved your Netflix special and just starting to listen to your podcasts......keep on educating and helping people become better/more educated!
I would consider it maybe. I am married with no kids in our 30s and I worry all the time about the ability to afford a house with my student debt and also being able to eventually raise children. We do live like kings now but it really sucks having to worry about spending more to gain a home but at least remove wasted rental payments
Wow. Better than Kaleb Hammer. 🫡🇺🇸🇮🇱🇺🇦🏴
@ramitsethi I'm really enjoying your channel. I stumbled upon it a few weeks ago and have been soaking up as much information as I can.
However, I find it completely unacceptable how vitriolic and despicable some commenters are towards your guests. Recently, I saw a vile comment from a woman who criticized the guest for having a child despite their student loans. This kind of argument is not only irresponsible but downright cruel. I appreciate that you emphasize wanting supportive comments, but it’s crucial to address this toxic behavior. We should stand up for your guests and create a more respectful environment.
Look at it this way, instead of paying off your student loans, Mom is letting you live at her home almost rent free. Pay the loan off. There is nowhere you can live for $450 for a family of four.
So true , I think they need to change the mindset on the student loans and pay off asap.
Exactly. Rent is 1800-2300/ MONTH here, so there's most of the loans payment right there
seriously! your utilities alone on a medium size house are more than $450/month. Both need 2 jobs, work alternate schedules so reduce daycare even further. They need to take care of their kids during debt payoff, not outsource most of the care.. stop thinking that "mental health" is a full stop, oh we can never breach her mental health, let's spend $5K more/month on daycare if it increases her "mental health"
With a net worth of 25 million dollars how can Ramit worry about dropping revenues?
Cut the vacations...go with staycation...Pathetic to pay mom les!!!!
I really like this format and how calm you are. Not yelling and screaming at people is the way to go. Keep up the good work!
Are you referring to a certain Hammer 😂
Caleb is for a different audience for sure. Love my self some Kaleb , love Ramit as well
@degracianizza9367 Same! Sometimes I feel like they should change guests. Some of Ramits guests really need a caleb wakeup call, while some of Caleb's guests need a calmer approach
One thing I notice about this episode versus some others, is this couple are having a conversation with eachother and Ramit is facilitating it, rather than each of them talking to Ramit about the other like some other episodes. Its good so see that they’re here for eachother not just to tell Ramit how the other is messing up like the other isn’t right there.
It killed me that Ramit did not address the rental car and vacation. I’m sure the vacation was a temporary respite, however I imagine they came home feeling like crap because now they owed more debt. A $2000 rental car plus a small portion of vacation equals the entire year of what they about to ask mom for a break in rent and cell phone payment. It would not sit well with me if my children said, “hey mom, can you support us further by paying more on your mortgage, utilities, property taxes, and home repairs?… while we step off to Disney World?” Hopefully after this experience with Ramit they will take responsibility for their own actions.
Yeah - maybe no vacations for a few years or just go to places near home that are cheap and pay off that loan
I felt upset about their vacation too
I totally agree. We have to forgo instant gratification for greater good in the long run. And mooching off mother seems so opportunistic cause as a math tutor you can make so much more !! Looks like they are always looking for hand outs , from grand mom and then mom.
There are ways to have vacations without spending huge sums like this. Drive your own car to a new place. Stay in a city and use public transport to get around (granted the hotels might be more expensive). But this did not sit well with me either. My family would go camping or somewhere with a pool to get away and we always drove there. There are so many lakes and beautiful places in our country and especially in the northeast! Flights+Rental sound like $4000 minimum right off the bat.
@@paulaooook we camped for many years as a family. More freedom for the kids and saved us tons of money.
It’s amazing to see how his face relaxed as the session went on. I love their openness and vulnerability.
What kind of maniac spends $2000 on a rental car when they're $150k in debt?? Absolutely nuts. I just rented a car for 4 days for $50. Depending on the country I've managed to rent a car for less than $5 a day, so I'd be interested where on earth it could cost $2000
We just rented a car for 16 days in the Netherlands for €500 including insurance with no excess. I can’t get my head around student loans as we don’t have them in Ireland. Uni is free except for €3k pa. Registration fees for a Bachelor’s degree and postgraduate Master’s is around €5k to €10k depending on what it is. Medicine postgraduate is more expensive. I have friends in the US whose kids are dual Irish/US citizenship and they all come to Europe for postgraduate studies. One did a master’s in Spain for €6k, would’ve cost ten times that in the US.
I am so curious where they went that a rental car cost $2k. Hawaii is the only place I can think of that's so pricey. Were they there for two weeks?!
Maybe they rentes a luxury car.
Maybe it was during a holiday? I rented a car for a week one time during Christmas and it was like 24th - 30th and it was like $500
@@MissMiaAfroGoddess no one should be taking a holiday with 6 figures of student loan debt.
I have a lot of admiration for this couple. I think they are so loving and respectful towards each other, even though they clearly have a lot of stress in the relationship. I was really moved by their vision of what they want for their kids.
Wow, that’s very nice of you, I have zero respect for this couple
A public school teacher would qualify for PSLF... 10 years of paying 10% of his salary then all loans are forgiven
That also surprised me, that any kind of loan forgiveness wasnt even discussed
Wasn't the debt from his first degree? He said he dropped out of the fancy college, took a break, and went back later for a teaching degree.
First of all, want to say that I am a big fan of Ramit and his message. But this one left me feeling angry. I felt like he skirted the fact that they live beyond their means (extra day of daycare?! vacation when in debt?!). Ramit’s first solution was to ask the mom, who already has 4 people living with her and seemingly pays the majority of the upkeep of the house, for a break on their already incredibly low rent and stop paying for her cell phone! I found this appalling. Take responsibility for your own family and situation. Ramit dropped the ball on this one
100% spot on, I just disagree on one point. Vacation when in debt is and should be fine; But they're not just vacationing, they're expending significant sums of money ON a vacation. You can go somewhere local and cheap and still have a vacation weekend once in awhile; Likely for less than the cost of the $2000 rental car alone, to cite the example posed, all other costs of their typical vacations aside. Vacations are a means to relax and destress the mind, Putting yourself under a thumbscrew and breaking yourself by going sans-vacation of any sort is not the right way to do things.
They are absolutely vacationing well beyond their means while they have a mountain of debt to handle, and that's not good. Just changing their vacation plans alone would make a huge dent in their debt problem and REDUCE a lot of their stress by making the vacations an actual vacation and not a momentary reprieve before getting home and realizing "Oh god we just spent $5,000-7,500 and made our problems even worse."
@@KazanaAoiwell said! Can’t afford anything and think about going to vacations? There are less expensive ways to relax without breaking the bank. I don’t hear about taking a second job on or seeking a better paying job or investing of learning a trade for better income.
And how she brings up screwing their mother in law over when she's asked to save on day care by spending a day with her kid. She turned the tables so fast on that, I'm surprised Ramit didn't call it out. The poor MIL is helping them out and they still want to ask for more? But she can't save $400 on daycare by spending a day with her other child? She also said she could work more so that woman definitely doesn't like her older child. I wonder if he's a step child. That's so wrong.
@@AlejandraBecerraRI was a teacher for decades. The pay isn’t great, but almost every teacher I knew had some kind of side hustle to supplement their income. And we all worked during summer vacation at some kind of job. No one went to an expensive university to get a teaching credential. It’s not necessary.
I felt the same way initially with this episode. I believe the point Ramit was going for was to try and create the ability of hope. The first step to helping them is to allow them to believe it can even be possible before they can make any type of effective plan. Yes, they are overspending. They know they are but have no ability to change without the hope of a better future being possible. Beating them down on their spending when they already feel hopeless would most likely cause them to disconnect.
Does mom even want them living with her or does she feel obligated to help? It’s not wise of them to count on inheriting her house or money as mom will most likely need it during her retirement years. One needs to first take care of themselves before helping others. Wife seems entitled. If I were mom I’d be meeting an estate attorney to draw up a very clear trust.
Right
I bet they claim ownership of the house somehow if the mom needs nursing home care so the house couldn't be sold as her asset.
No way are they going to care for her until her death
I feel so sorry for the mom. What kind of person she raised and living with!!
I do empathize with anyone with a high student loan But, as an aging and divorced mother myself I know the struggles of trying to stay ahead financially. Raising children is expensive and very hard work to manage it. In order to put money away from my son's college fund I had to totally sacrifice everything. I would pay the mortgage, utilities, buy food, vehicle gas, pay for the life insurance monthly bill, and put the $250.00 per month PER CHILD into their college fund. Then I would have $35.00 left for the month. That $35.00 would go towards buying milk, cheese, bread and oranges (my sons after school snacks) in between grocery buying day. I drove an old used vehicle, took NO vacations, no eating out, no Starbucks, no cable TV and no a/c not even a dishwasher. This couple is obviously not saving for their children's college because they cannot. But they also seem NOT compassionate with their mother and grandmother's own family situation (the unplanned burden of her own mother moving in and the loss of their monther's husband?) Please understand his mom's money/his grandmother money and their choice of what to do with it. Don't you realize that your mother needs her home to live in? Do you REALLY expect her to sell her home and give you the money - how is she expected to live? Are you living in her home mortgage free - and does that not count for her contribution to your life? Who is paying for the constant maintenance on this home you are living in? Are you aware that maintaining a home is expensive (replacing roofs/furnaces/water heaters, utilities etc.) (This is not making any excuses for the predatory lending of the college lending processes.) I do NOT and will not ever understand child/adult children who believe they are owed a college education. What about your responsibility to NOT go on vacation, paying $2,000 for a rental car or eat out when already living in debt? I don't get this situation either....If I did not have the CASH I did not do it- PERIOD!
I think the primary complaint is that Sam was told it was handled, and it wasn't. You make valid points. Their rent is impressively low for a family of 4, especially making $120k/yr gross.
This couple should
1. start cooking at home
2. Avoid going on vacation till the loan is paid off
3. Pay maximum towards the student loan
4. Only use debit cards. DO NOT USE CREDIT CARDS
5. Shop for clothes only during Christmas & birthdays
This is what people in India would do, if they had a loan.
Lucky you have never dealt with these student loan servicers. They give you bad information that's worse than nothing at all, but then that bad info costs you in interest capitalization (when the accrued interest is added to the principal going forward). Interest capitalization is triggered in certain circumstances (sometimes unavoidable, like after you graduate) and the servicer will advise people to take those actions without letting them know it makes their loan bigger.
I'm set to pay off my student loans soon, and I have bought and sold a home. You get _way_ more information about a mortgage than a student loan. It's really night and day.
And okay after he explained it, I can see why he would feel bad about his college savings being used for something else, without his knowledge, after telling him it was set aside for him. That's like offering to pay for a wedding and then telling them you don't have the money after everything is booked.
We took care of my grandmother at home too. We didn't have a big house but we didn't need to build an addition. The youngest adult just sleeps in the living room. I'm wondering if they was just an excuse to build the addition. I feel like there was more to that story...
@@vulpixelful Same, more to the story on this one.
I really understand Sam’s feelings and the crushing weight of student loans. It’s a terrible stress and load to carry. It does feel much easier to ignore when cash flow is limited and out of reach.
They said they don't have a good relationship with his mom. Probably because she knows they are just waiting for her to keel over so they can have the house 😬
Hi Ramit, I notice that BetterHelp is one of your sponsors. I don't know if you're aware that the FTC recently (July 2023) fined them over $7million because they were selling sensitive client information to Facebook etc? Licensed therapists can't do that
What's the goal of the comment? Are you trying to publicly make ramit forgoe his sponsorship for fear of public humiliation for being associated w/ the brand and being "cancelled"
@@whitneyw.7919 My intention was to draw Ramit's attention to the fact of the FTC's decision against BetterHelp
I think they are worried that Ramit having Better Help as a funder erodes his credibility and they want to help him see the disconnect between having a podcast that helps people while having an unethical sponsor and correct it by finding different sponsors.
@@StorytellingHeadshots Yes, thanks for understanding!
I got news for you. EVERYONE sells your info. I know why this is sensitive but the sticking point is that a therapist has your info it implies you sought treatment. But be aware, every site you visit is tracked.
I’m having trouble understanding how the partner who wanted more children cannot imagine spending four more days a month with the children she already has-
Ok I wasn’t the only one 😅
Thank you for pointing this out.
I noticed that too. She damn near had a panic attack when he mentioned that option.
It's not difficult to understand, it should tell you how supported she is in the child rearing.
That broke my heart for the kid. So obvious she doesn't want to care for the older child.
I love this couple. Ramit is right, hit the credit cards first and the highest-interest student loan next. I think 12% interest on a student loan is criminal. My student loan at its highest was $88,000. I paid it off. You can do it! You will do it! Set yourself free. You are a sweet couple. Best of luck.
Beyond cheeky to ask his mother if they can pay less rent when it’s already extremely low. She looked after her mother with dementia and now has seemingly taken in her adult child and his family. Find something else to cut.
Why is it up to his parents to pay for his education? He says he felt brushed aside. He is an adult, take care of your own bills!
I understand this because I’m in a similar situation, I’m 28 though. Its motivated me to be serious about money since I graduated, and I’ve job hopped 3-4x.
At 17 my dad told me he’d help pay for my school, and that didn’t happen. He ended getting remarried and having kids. Hey I’m grown I get it, but its the emotional aspect of someone leaving your life coupled with the costs. I mean when I agreed to go to school I honestly didn’t really understand what I was signing up for. Now I’m woking hard to pay off loans in my name and then getting my first multifamily.
I had $80k between undergrad and grad. I went to public undergrad and private with a partial scholarship. It was tough but I paid. My parents helped but could not cover everything. Today, 529 plans can really help someone plan.
Daycare - If this can’t be reduced right now because the kids aren’t in school yet and there’s no cheaper options then I’m assuming that this will be reduced by a lot in the next few years, which will free up more money to go toward debt. In other words, some fixed costs are just temporary, and knowing that should give them hope that things will get a little more manageable in the future.
Yep. Plus, I’m sure they can get their phone bill down a lot further. They should get something like Mint Mobile.. $25 per person so that’s down to $50 all the way from $264! $132 would be something like AT&T..
Hi Ramit. Love your content and have learned a ton. I know you welcome feedback about sponsors, so here goes. Way too many ppl who are not high net worth spend too much for Door Dash convenience. My husband and I cut our food budget in half by limiting those orders.
Jilljoseph Not trying to shame you in any way, what you are saying is absolutely true, limit convenience purchases--- that is good for the budget. And I'm not trying to say I'm the all-knowing oracle of things either. Again you are correct.
When we were in debt payoff mode, which lasted 56 long, hard, exhausting months, we ate out a total of 3 times and went on zero trips or vacations. Simple math we spent a total of less than $150 eating out over a 5 year period. The end result is we can now afford to eat out every week if we wanted or have Uber Eats grace our doorstep several times a week, but those 5 years of doing for ourselves everything we can do for ourselves, not paying someone to do basic life tasks such as making dinner or watching the kids has become habit.
Someone might say life is too short to not have some fun or a break from routine chores but we personally wanted out of debt far worse than any convenience we could purchase. I get it, not everyone thinks that way but still a bit of pain goes a long way to maintain discipline. If we had it to do again we would have gone with more scorched earth, not less. It all comes down to living below not above our means.
To cut expenses, I actually taught myself how to cook during our debt free journey so my wife didn't have all that burden placed on her. Today I do 90% of the food prep, I enjoy it more than she does.
I would have to agree... Ive probably spent 5k on doordash in the last 1-2 years.. and its so overpriced. worst sponsor ever Id say
Totally agree. Door dash is such a waste of money. Door Dash is bad for customers, restaurants and most of their drivers.
Just bc it might not make sense for your budget doesn’t mean others might not be able to afford it and enjoy it. It’s a premium service but that doesn’t = bad.
Same!! Or even just driving to get my own take out.
The couple uses a lot of blaming others. Even when he talks about the student loan forbearance he says, “ they didn’t tell me that the interest keeps accruing…” Well, yes, they did. It was in the financial disclosures, he just didn’t take the responsibility to read them. He also clearly didn’t look at the numbers of what a high school teacher makes and realize that he didn’t need a “name brand” school to get a job as a teacher.
I’m not trying to shame them. We all do stupid things. But my point is until he loses this “entitlement” pov (ie his moms house is HIS money just sitting there…) they will get no-where.
As that great philosopher Nina Simone said:
“God bless the child that’s got his own, that’s got his own.”
He's very entitled. When talking about his grandmother's diagnosis, the thing that bothered him the most is that "my money" which he quickly corrected "well that's her money but it was allocated to ME" went to her disease costs. :/
Thank you for having regular income couples instead of those high income ones you usually have but together they still make over $100K. I wish you’d have couple making under $100K to be more relatable to average people.
Secondly, parents should never have their children oblige to take care of their financial needs at old age.
But most of all, children should never oblige their elderly parents to take care of their financial mistakes no matter who has told them to take out loans. He wasn’t placed on gunpoint to take out those loans.
Nailed it at the start? - Ramit asks about their primary money challenge and Sam says they probably overspend a lot
After watching most of these convos on this channel.
The women in the relationships are way more aware of the situations, and honest.
The guys are out to lunch.
My impression is that it's more evenly split, gender-wise, who is engaged with finances. Glad that they're willing to come on the show!
Sone of the women spend like crazy too.
Nevermind, he teaches high school math. He should know the numbers
@@FreedomFinanceFun Yes, he should know the numbers. But being a high school math teacher has nothing to do with knowing your personal finances. Teaching what a hypotenuse is doesn't mean you are aware of your credit card debt.
There are a number of conversations where it’s the opposite as well but it seems 70% women being the aware ones lol
I spent 20 years paying off student loans (4 degrees) that I never expected my parents to help with from day 1. It gives me pride to know that I did it all myself - without travel (except to visit mom), concerts and 'dumb' - now I'm in good shape. The irony is that my sister believes my parents paid for all of it! I will say that I would NOT borrow the amount that these same colleges/universities cost now! It would NOT be worth it!! The pay in the Mental health field does not compensate for the education costs now. Same degrees - same places $250,000!
He was told "not to worry about it". That is the key difference.
How are their fixed expenses so high? There’s two of them making $120K with a small rent payment.
Kids 😭
@@wavy2k single mama here paying a rent, a mortgage, and all expenses for my children. No child support. I don’t make 120k but sure need to.
I commend them for coming on here! Wish them the best!
I don't understand. If they are living for $450/month in the mother's house, why can't they make the loan payments? Pour all of their salary into loan payments, except for the minimum required stuff like food, utilities, clothes and other necessities. Why isn't the husband or wife working part time on weekends? My phone is like $45/month, not $260/month. I buy open phones used on ebay for like $300.
Since he is a teacher maybe he can work in the summer. Or one or both of them can have a side hustle to help
Pay the debt off more quickly.
Yeah, I agree some serious discipline and planning has an end in sight. But they are clearly avoidant with money and probably aren't motivated enough to switch accounts and take calculated steps to lower bills. They feel trapped and they are learning to stay trapped
If I had to live with my dad, I would be clawing my way out (hes not a bad guy, but that just sounds terrible 😅)
But I don't know if I could plan for retirement when I'm that deep in debt, I would just focus on being a positive net worth or just out of debt to start with
Why would they do that when it's so much easier to mope and feel victimized?
Omg!! As a fan and supporter of Ramit it was thoroughly disturbing to me that this guy was not advised to take responsibility for his own educational expenses!! He seems to blame his deceased grandmother for his choosing a good education! Noone wants to admit the fact that grandmother's money was used for her own care! Her primary home was most likely Sold in order to fund "addition" to their current living quarters! After grandmother's death, Mom's money is hers to spend as she pleases! These two are waiting around like vultures for mom to sell or die!!! She must surely feel that energy from her Son and daughter n law who are Living there With HER!!! It's like he's still chasing the ghost of granny $$ money. I am disappointed you didn't address this as "morbid" !!
Right. And since they're bad with money if I was the mother, after selling the home I would make the check DIRECTLY to the loan officer.
Remember he teaches kids math in high school.
I'm disappointed in Remit as well
The couple are extremely selfish
I hope the mom said no to the lower rent. If she said yes, I hope she told them to either pay more for utilities or use less electricity .
How does a family struggle to live when they have 9500 after housing is covered? That’s absurd.
I have no idea. I am still wondering how this is possible.
As someone from Canada, I find it completely appalling how student loans in the US can be this predatory. Tripling in 3 years? How is this not illegal? Even if they happen to negotiate the debt to half, it’s still a very healthy return for the lender.
It’s the parents’ job to educate their children on money and debt. While this couple does not take responsibility for their finances, their parents did a very good job setting them up for failure. The least the mom can do is provide free housing until this debt is paid off.
It is generally legal to lend and borrow money in the US under whatever conditions both parties agree to. Not saying it’s good or bad, but it’s the American way to allow commerce.
yah, about 50% of parents have their head up their ass. But I think the tripling in 3 years was an exaggeration. These people have been paying minimum payments, even though if they change their behavior, they're capable of paying much more, but when you do that on a debt w/ principal that high, the interest accrues rapidly almost like a mortgage, look how much interest you pay on that. Anyone w/ large student loans needs to really buckle down and act like they're running from a fire. no extras, no pricey vacations, no eating out, etc.
Yes i was about to say this! I was able to pay mine off by 34, it was a great feeling🎉
To ask for lower rent would be sickening and insulting. They’d be paying 4x that amount in most places.
Totally agree. Ugh, I kinda wish the mom would kick them out for a year just to learn the reality that the rest of us have to deal with. Yucky yucky move…
Agreed. Together with the implication she’s “betrayed her promise” by not funding his school or selling the house. She’s covering that obligation by saving these people 1500+ a month on shelter, nobody’s being let down.
They both need evening side hustles.
@@tinad8561 She did not betray any promise in the first place. Grandma made the promise. And then grandma's money had to be used for grandma's care - as it should be. They likely had to choose between adjusting the house and sending grandma to a care facility. Either way, there would be no money left for his degree. Circumstances changed, the money was no longer available, end of story.
And let's not forget that he dropped out of the first college and went back later for a different degree.
Minute 53.42 I know you make a joke about the house but it doesn't feel like they see it as a joke. He really thinks he has the rights to his mother's house 😮
Ramit did a great job putting on surgeon gloves for this one. So much stress on the call but it was navigated gracefully.
No offense, but how do you apply to come on this show, do the CSP, and not know how much CC debt you have?
I asked my mom what “we” were going to do about my student loan…. And let’s have mom sell her only major asset and pay off our debt with it……. Time to grow up boys and girls. If he had made payments consistently even if not in full….things wouldn’t have gotten to this level. I feel for the position they’re in now but….a call years ago would have made a big difference instead of waiting for his wife to do it for him.
I agree with some comments regarding how Ramit appears to ignore some big red flags - spending out of control, no accountability on the part of both of them, ignoring a huge debt. I wonder if Ramit used kid gloves to present options for the couple because of the way the husband described his complete shutdown when dealing with money issues. The important result of the session was a feeling of empowerment the couple experienced when Ramit showed them how changing their choices can make significant improvement to their financial situation. Now, they went from feeling overwhelming anxiety when discussing money to finding they do have the means to affect their situation positively.
That's a great take - he only has a little time with them and he got a good outcome.
This is really hard to watch. I don't understand how you can ignore your student loan debt when it's less then 30K and let it get to 157K. This is just ignorant. He has been living with his Mom the entire time, and he could have easily worked two jobs or at at least worked 60 hours to get out of debt. Sam really dropped the ball here, and this guy is a math teacher. Smh. He made this debt insurmountable by ignoring it and not paying it. This guy is like almost 40 and he still hasn't figured it out. I agree that Student Loan debt is really killing our growth and economy, but some people basically want a bailout for their silly decisions like ignoring your student loan for 20 years. The Federal Government needs to stop guaranteeing loans because this is a clear example that some people will never take responsibility and will never grow up mentally. I feel sad for his Mother and I would literally give them a timeline to move out and see what the real world has in store for them outside of her house and their almost rent free living. Sam needs to get it together and if being a Math teacher is not enough, then go get another job paying more, or go get a second part-time job. Come on Ramit, don't let these ppl get off so easy.
You summarized it perfectly, couldn’t say it better
Thank you Ramit!
You are a north star for me. I appreciate you and the work you do.
This episode is so annoying. Why on earth, with that kind of debt, would you think you were ready to bring children into the world, you are not responsible enough to pay your own bills, why would you have a child? And living with your mother. What a dismal existence. I usually really like Remit’s you tube shows, not this one.
I racked up 30k (after interest) in student loans in the 80s to pay for my teaching degree. I paid them off by getting a different career. You can do it!
PSLF. Public Service Loan Forgiveness Program. The PSLF is a ten-year program. There is also a federal program for teachers who teach five years in Title I schools to have their loans forgiven.
That’s no teacher, thats a life long learner
I have a very similar situation to Sam. Being told that your parents or grandparents are going to help pay for your college education and then pulling out the rug from under you is the worst feeling you can ever imagine as a recent graduate. Being told that your college tuition etc. is paid for and you have nothing to worry about besides choosing the best college, getting good grades, making the best of your time there, and focusing on getting a good job after. I empathize deeply with Sam as I am in a similar situation however, I have been slowly paying down my debt especially the private loans because those aren't going anywhere. These stories are why we need to fight for student loan reform, caps on interest rates, and in some cases forgiveness. These things would only help to boost our economy.
I know I haven't listened to all of the episodes of this podcast yet, but I've listened to dozens. This is the first one that I've listened to that directly addressed how student loan debt can affect a family. I've been literally waiting for months to hear them talk about it.
Because even episodes from this year (2023), when we knew that student loan payments were being re-started, they just kinda said, "We have $Xk in student loan debt, but it's been on pause since the start of the pandemic." OK, but what's gonna happen when you gotta pay that come October? You can't pass that by! It's very important to any financial discussion for those who carry that debt.
@@tscottbaker2980charging for education is criminal
If I could make $100 per hour tutoring and consulting, I would quit the teaching job and focus on that if possible. Even at 15 hours per week, you'd be making $97.5K annually, and you could spend the rest of the time minding the kids and eliminate expenses for child care.
I can’t understand the cell phone expenses, three phone lines should not be more than 100 per month and they overspending on vacation but asking grandma for a rent reduction. However he had done amazing work and changing their perception of money. So great to see his coaching working. Congratulations Remit
Wait, 130k is just interest? So he had 40-50k which would have been managable, at least the minimum payments until he gets if forgiven as a school teacher. That takes 10 years and it has already been 12. This is him and his family being negligent by brushing if off and felling him he will be fine... He went to an ivy league school, at least for 2-3 years and works as a math teacher. There is NO excuses he could make
My 50k was set up for 30 year payback, I’m over halfway through that and still owe 27K. The system is a mess. Salary nothing close to what was promised. The system is very stressful and burdensome.
Simple, the servicers lie
It's a private loan, are those forgiven for teachers? I thought it was just federal
@@CH-vm6cqIt's only for federal loans. And it's only for certain teachers in certain circumstances. They also don't forgive the entire loan. I believe it's around $10k, and only after 120 straight months of full payments.
In our 30s we had a negative net worth like this. Now we have positive 550000 net worth at 47. It can be done! Income the same too.
Ramit’s body language when she said in the beginning that his interest alone is $130K. It gave him anxiety and that’s not even his loan. Heck, it gave me anxiety 😮
Why does he feel betrayed? It is his debt, his education, his decision to take it. I feel he feels betrayed by his grandmother and mother. Why?
Because Grandma promised she'd pay for it!
@@Capycorg
I'm from the UK, so the loan situation is a bit different here for students. It's clear from this perspective that young people and their parents are not educated and informed enough about the private loan situation in USA... Encouraging kids to dream of going to the very best universities without a consideration of the cost is bonkers to me. I can see why (for example) a lawyer may opt to go to Grad school at Harvard or Yale and would gladly borrow $500k to make that happen... because it's only a matter of a few years before they could be earning $300-500k in income to pay it off. However, for most professions, that level of earning is just unrealistic and the issue is, I think, in the lack of sensible guidance for these young people who are now burdened with crazy loans for education/professions that are never going to earn them that level of income where repayment is easy. 12% is crazy.
His problem is also he used private loans and not federal which have a much lower interest rate.
If he's a teacher he can qualify for student loan forgiveness after 10 years in the field, as long as he works for a qualifying employer. They should look into that and pay off the student loan debt in 10 years.
I get the feeling this couple prefers to be seen as victims rather than admit poor choices and complacency are big sources of their issues. Ramit was a bit too soft on them, in my opinion. I think they could have benefited from a stern reality check.
Didn’t finish the episode yet but I hope someone told this family about PSLF (public service loan forgiveness). There are also teacher programs where you get money to pay for your loans!!!
It sounds like he has private loans, so he might not qualify.
One thing not mentioned is that many school districts pay on a once a month schedule. My district gave us an option for a breakdown of getting paid a percentage of our salary on the 25 of the month. I chose that option. That gave me the knowledge that I would never go to zero or hit a negative balance.
My wife is a public school teacher and doesn't get a paycheck from June 10th until Sept 15th, that is 13 weeks. We put money aside for this.
The time off in the summer frees up time for Sam to either make more money or save some money by not using child care or better yet both, but I didn't hear anything about those options, maybe I missed it?
@@thomaschew2191Maybe that depends on the district? Or maybe that's a contract choice? My husband is also a public school teacher. He gets paid every two weeks, including during the summer months.
@@laurao3274 My wife's district offers the option of a smaller paycheck with year round paydays or bigger paychecks with nothing in the summer. The amount of salary is the same either way so if there is no paycheck it is up to the teacher to plan for that.
These people are all about give me, give me, They should feel bad about the older mom losing money at the expense of her own retirement. They both need to get a 2nd J.O.B or hustle and Stop the vacations. 2K rental car WTF... how about you stops the Vacay and pay your rent and utilities that are below market.
I liked the couple. definitely connect with what Sam feels about money. Hope you guys keep up the good work & best wishes for your family :)
It’s funny when I was graduating high school they always said go to the best school too. To this day I tell people that’s one reason the predatory student loans are such a problem. That was adults telling children what to do and then the children turn into an actual adult and have a bunch of debt
Listen guys. These loans suck, but they are manageable. He can get on a plan and pay about $450-$550 per month. Maybe even less. It sucks that he’ll likely never pay it all off, but the plans say pay 25 years and they cancel it. It’s like any other bill. Put funds in your 401-k to decrease your income, still invest, get the HSA and maybe Roth. You just work around these if they are government loans.
Nice moment - Ramit telling Sam that he could take a break if he was too uncomfortable
5:35 The phrase I know is "monkey on my back" for unshakable burden
I paid off a $165k condo in 8 years while raising kids... I have a hard time feeling bad for him/then for sitting on this and not paying it down. Just ignored it.
Frankly being a high school teacher, I can’t think of anything else that would stress me out more
This couple is so rude towards their mom! They both work! They should be able to PAY full rent and all the rest! Mom is giving them a HUGE BREAK! Two adopts and two children for only 450 per month!
You need to be organized with all your debt, monthly payments, budget and income/month in order to make any positive progress. Living within your means and not over spending. Learning to be grateful for the little things.
You want mom to sell her house to pay his student loans? NO.
"Cable" is not a utility, unless your phone service is cable-based (which in this case is not true). Cable is a luxury.
Why not suggest they look into if their employers offer a Flexible Spending Account or HSA to load that up pre-tax for daycare. It lower their tax rate. Avoiding the credit card all together.
These budgets needs to be better detailed
Why don’t they just get a HELOC from the equity in the home and use that to pay off the high interest debt?
It’s not their house.
So much entitlement and blaming parents. Like i know they made promises. But life is unexpexted...she got alzheimers, the parents had to spend money renovating their home and caretaking for their mom. After all that, a divorce and still working at her age they are waiting hand in foot for her to sell the house. But now, they are complainjng because if the "conditional" nature of having essentially free housing and promised gift house upon her death. What if, God forbid she gets sick and needs full time care? The state will take the house to cover any medical costs that exceed what she can afford. If thats the case, she needs her house to pay medical bills. So they need to stop living off mommy and daddy and planning their future and just complaing about bills sitting on their hands. Ughhhhh they upset me
After Ramit let the $2K car rental expense slide, I just couldn’t connect with his voice anymore on this.
Mint Mobile! that would reduce the cost to $45/month for three lines!
If I were an adult and a parent let me live in their home rent free with my family, I’d take over all the utilities. This couple makes over $100K/ year and are not paying rent, there’s no reason why they could not pay $400 to the parent. They need to learn how to live within their mean and manage their money properly. They have been spoonfed for too long, and specially him.
they have $450 of rent lol
@@makayla4292 - That’s like nothing for 2 adults. And telling his mother that they can’t afford that either is not fair. There’s money to be made in 🇺🇸 , but people are just lazy.
Sorry but this guy constantly looks like a human pikachu. I get really annoyed that he has his Mommy pay his rent and he still feels entitled and resentful toward her spends in an entitled way always expecting someone else to be responsible for his expenditures.
Do they not keep some kind of checkbook? I feel like that would be really helpful for his anxiety about money in the account. I use an excel spreadsheet and then I don’t have to worry about if there’s enough money between now and after when I get paid or the monthly bills come out.
1. Never count on anyone else. Not to pay off your loans. Not to give you security. Always bet on yourself
2. He would be better off learning to be an electrician, plumber or welder for a fraction of the cost and be financially free. School is great, but not with loans.
He needs to take accountability and shift his life to a new path to get out of this.
So if you put away college savings for your kids they shouldn't trust it'll be there when they need it?
@@vulpixelful that’s not SL what I said. That’s specifically allocated for that. But you shouldn’t expect to pay off loans by selling your parents house. And when someone says “just go we’ll pay it later” you better know exactly what that means.
@@adeltoral710 It's not "someone" it's his mom 😂 and it sounds like she actually had a fund going. I realize not all parents are trustworthy but people generally assume that they are at first, we're not robots out here 🙄
That is literally what he is trying to do. Hence, the appearance on Ramit's podcast.
Except that he already has the debt. He might as well use the degree that he has. If he were to go get more training in a completely unrelated field, that would be more money he would have to spend. Plus, he would likely have no income for months, if not years. So no, him becoming an electrician or whatever would not help him in his case. If you were talking about a kid straight out of high school, that would be a different story.
The problem is the major he originally took. Almost nobody took the psychological major ended with a great career, it’s an easy major to finish though.
I wish the update had included how the discussion with his mom went. I loved that idea and I hope that she saw the logic.
Yeah since she spent his college savings that's a good compromise
Seriously - they committed to paying his education and turn didn’t.
@@samuisun6684I don't agree... She should have taught him how to get a federal loan, not a private loan. And if she didn't know, that's what high school guidance counselors are for.
You are an amazing person Ramit. Love you man.
Best of luck to this couple!
I love seeing a family represented on this podcast who makes a little less money. More like average people like the rest of us :)
My TWO favorite podcasts to kick off the week: Mon = Scott Galloway & Tue: Ramit! 🎉
Why in the budget cut did they not address discretionary spending? Vacations? While asking for less rent?
This couple seems very entitled.
I remember having student loan debt. It was never clearly explained how much a two or four year degree would cost or how long to attend. Remember the two and four years is someone taking the max number of credits a semester not just 12 units full time. Example two years requires 60 plus units. That’s 15 units a semester if not going to summer school not minimum 12 units full time. People seeking a college degree need to know exactly what they’ll be paying for by checking with a financial advisor before signing the loans especially private student loans. College and lenders are businesses like any other. A college doesn’t have to be listed as “For Profit” all colleges and lenders are all for profit!! Know the occupation studied will be able to afford the student loan debt payment ahead of time. Good luck 🍀
I'm sorry but many people just want to pay minimum payments that's what kills us.
At this point, she could safely stay home and keep the kids, cook at home and they would save so much on childcare and food.
The mom is paying back his student loans by letting his whole family live there for such low rent.
And the fact that the interest is allowed to multiply at such an alarming rate on these private student loans is criminal.
Why not sacrifice a little more and pay off the credit cards asap. Up the payment to atleast 2000 a month and make sure you dont spend on the cards anymore. Taking over a year to pay off 8000 on a xredit card would stress me out. They could pay it off in a couole months if they wanted.
OMG! Same. Told I HAD to go to college. I HAD to get good grades and was promised, for all of my hard work, my education would be 100% paid for. Total bait and switch. LOL!
I finished watching the Netflix show but my only question is about the advise to "invest" your money instead of putting it on the bank. When we say "invest", what does it literally mean?
Where do you invest?
Ideally, you should have money in several different investment vehicles, as diversification is typically advisable, but investing in something is almost always better than letting your money sit in a bank account where you may only be getting less than 1% interest on your money, which is likely not enough to keep up with the average inflation rate, which is closer to 3.8% per year, based on the last 50 years, and is probably getting higher each year. This means that each year, due to inflation, your money sitting in the bank is actually losing value.
So what is one to do about this? Invest! You must invest in assets that will appreciate in value! But to your point, what are these assets that fit that criteria? Well, one easy investment vehicle, that most working people have access to, is a 401k. The beauty of a 401k is that they are tax advantaged, meaning that the contributions to your 401k are made with pre-taxed dollars, which means that your taxable income for the year that you contributed is reduced, that means that you will pay less in taxes. The money in the 401k can then grow tax-deffered, meaning that taxes won't actually be taken out until you withdraw it in retirement. Plus! Many employers offer 401k matching, where they will match a certain percentage of your income. That's free money that you are making for simply investing! Now, of course, most require a minimum and have a maximum limit of how much they'll match, but you should take advantage of it if it is available. It should be noted that, even if you are investing in your 401k, there will often be a plethora of funds to choose from within that 401k account, to allocate your money. This can be confusing especially to the unlearned person. Of course, you can look up a suggested allocation for a person your age(this changes as you get older), but then you have to worry about reallocation and rebalancing each year as you get older and as your investment grows. A simple alternative, 401k plans will often include some "target date" funds. These funds are often indicated as "Target Date {insert year of retirement here}". The beauty of these target date funds is in simplicity. You can do 100% allocation to that one fund and you no longer have to worry about reallocating or rebalancing your investment. It's all handled for you and done specifically for your age group. Set it and forget it. Why is this investment in a 401k better than money in the bank though? Because the 401k and other retirement accounts are tied to the stock market, which historically speaking, assuming proper allocation, you're looking at a return on investment of about 7-9% annually adjusted for inflation, meaning that 7-9% is what's leftover after inflation is taken into consideration, which also means that your money in these investments is growing WITH inflation and not being hindered by it.
If you have invested in your 401k and maxed out your employer's matching, you might decide that you want to look into other investment vehicles. One of these, that I think everyone should look into is known as a Roth IRA. A Roth IRA, similar to 401k, has a variety of funds tied to the stock market and even has target date funds, as well as individual stocks, bonds, and securities. The interesting bit about this type of account is how it is tax advantaged. As opposed to a 401k or Traditional IRA, where contributions are made with pre-tax dollars and can be used at the end of the years tax deduction, a Roth IRA's contributions are made with after-tax dollars, so you can't use them for a tax deduction, BUT you get the benefit later in life of not having to pay tax on the withdrawals in retirement. Why would that be a good thing? Well as counterintuitive as it may seem, paying taxes on the frontend rather on the backend, can actually provide you with more money in retirement. Let's exemplify this. Bob and Alice are 30 years old and plan to retire at 65. Each has $5,000 to invest annually. Alice has a Roth IRA with a starting balance of $1,000, and Bob has a traditional IRA with an equal amount. Let's assume the annual contribution of $5,000 at an annual expected rate of return at 7% and a tax rate on contributions and withdrawals at 25%. By age 65 Alice will have an account estimated at $701,163 tax-free, as to where Bob will have to pay taxes on his invested savings which will ultimately leave him with an estimated $481,390 dollars after taxes. Again, Bob will have been able to claim tax deductions on his contributions ultimately saving him money throughout the years, but in real life depending on your tax rate, this has the potential to hinder the amount of money that you save in the long run. It's probably best to have both types of accounts, a Roth and a taxable account, to leverage the tax benefits of both. Important to note that 401k accounts do sometimes have a Roth option that makes the account behave like a Roth IRA from a tax perspective.
A Traditional IRA, uses pre-taxed dollars, but usually has the same investment options as a Roth IRA, and can be a reasonable alternative to a 401k if you're employer does not offer one. What I haven't mentioned is that all of these retirement accounts have annual contribution limits. As of 2023, the limit on a 401k is $22,500 and for both a traditional IRA and a Roth IRA, the limit is $6,500. The reason I bring up the limits, is because while you can have both a traditional IRA and a Roth IRA, the contribution to both accounts will count towards the $6,500 limit, because it is a total limit for all traditional and Roth IRAs. So it's definitely something to be aware of. Your IRA contributions however do not count toward your 401k limit, and vice versa. Ultimately, the choice to have a traditional IRA, a Roth IRA, or both, is gonna depend on your tax and retirement needs.
The retirement accounts I mention in detail because they are probably the lowest barrier to entry, for most average people, when it comes to investing. Probably also among the least risky investments that one could get into. There are a ton of others though! I suggest you conquer the retirement account first, but if you do, there are regular stock brokerage accounts, where you can invest in stocks, bonds, options, mutual funds, commodities, and cryptocurrency; there's also CDs(certificate of deposit), Real Estate, Annuities, Precious Metals, HSA(health savings account), art, collectibles, investing in starting a new business, and probably most important of all, investing in yourself, whether that be education and/or health. None of this matters, if you're not healthy enough to enjoy it. And you can't expect to grow your nest egg unless you are also supplementing yourself with education, and I'm not talking specifically about schooling. I'm talking about school, yes, but I'm also talking about online courses and masterminds and conferences and even just simply talking to other people and being open minded enough to realize that everyone you interact with has something to teach you, sometimes you just have to figure out what the lesson is.
I know this response probably expands past the scope of what you were asking, but nevertheless I hope you got some value out of it! Have a wonderful day!
Index funds
Open a Vanguard account. Just Google it. And set up automatic payments to go out every month.
I would read Ramit's book, or read The Index Card. You'll get a clear explanation from a pro vs us yahoos online 😅
He needs to move to a state that pay off loans to teach. South Carolina is one of those states
Best idea ever…
But then they women’s basically live for free with mom
@@MittenGal_inCal huh?
These people take no responsibility for their own actions. It’s the fault of their guidance counselor, grandmother, and mother. Definitely not his fault. Right
It's easy to see how a kid being guided in a certain direction could land in a spot like this. It's his problem now, and here is is showing up to find a way out. Good for him.
The loans are most certainly their responsibility. However, his family set up an expectation to support him with school at a point in his life when that assistance would have been needed. Therefore he made decisions based on that financial support coming through but circumstances changed.
I see what you’re saying, but his family also pulled a bit of a “bait and switch” on him (even if it wasn’t intentional), and it doesn’t sound like he received the proper guidance to navigate those changes to lessen the financial impact.
Most people don’t graduate high school and suddenly become experts at making the best financial decisions. Personally, I was completely clueless and had no one to help me figure it out at that young age.
Unfortunately, some lessons are learned the hard way.
thanks a lot ramit, great show and perspective as always👍🏻
I have fn cancer and I can't crank out my student loans. I am well enough to go to work but sick enough I have to leave after only 1-2 hours. wtf. I miss the days of being well enough to swing 2-3 jobs.
Sorry for ur medical issue, pray u get better Amen
Is the spreadsheet available for download?
Thank you for another great episode
wow $157k in student loans and not in a healthcare profession is new to me. bless them
Ok, so he was promised money by his grandma. But her circumstances changed and she no longer had that money. If it hadn't been spent on the house to make it possible for her to live there it would have gone to a care home for her.
He is still clinging to that money promise and now expects his mom to sell HER house which surely is part of her retirement plan.
In the end, he chose the college, he dropped out of his first degree and he decided to go back and get another degree. It's HIS debt, he needs to start paying it and not hope that mom will sell her home.
Besides that would mean that they would have to pay rent, utilities, etc from now on for a family of four. I doubt that this would really improve their financial situation.
These loans are predatory, he probably just shut down. These servicers give you bad information that's worse than nothing at all, but then that bad info costs you in interest capitalization (when the accrued interest is added to the principal going forward). Interest capitalization is triggered in certain circumstances (sometimes unavoidable, like after you graduate) and the servicer will advise people to take those actions without letting them know it makes their loan bigger.
I'm set to pay off my student loans soon, and I have bought and sold a home. You get _way_ more information about a mortgage than a student loan. It's really night and day.
Debt is a choice. Many people don’t accept that debt is a personal responsibility or realize it too late and then consider it other’s responsibility vs. put in the grind they signed up for. A change in the system is definitely needed.
Except, when it comes to student loans, they're in an impossible to avoid student loans for most people and, since the government removed the regulations preventing lenders from engaging in predatory lending practices, the cost of the loans and tuition is artificially inflated.
@@bestyoutubechannelever3206 That goes for student loans as well. We need to teach kids about the value and opportunity cost of education.
I realize the US and institutions haven’t done a good job of this but kids shouldn’t be going to school for careers that won’t pay dividends and put people in unaddressable debt. Educating people about the fallacies of collegiate education is critical so they can take the ownership that debt deserves.
It’s unfortunate that many people where caught with wool over their eyes and learned the hard way. Changing the institutions isn’t likely so we need mindsets to change on value.
@@bestyoutubechannelever3206i disagree. You can pay your way through college. It might take twice as long but it’s possible.
In highschool, everyone looked down on community college and everyone wanted to go out of state to get “the college experience”. It’s a personal choice.
@rehanas.4092 Except you shouldn't be forced to have to spend twice as long in debt because of bad policy and they you certainly shouldn't be negatively criticizing people for being upset over it. You don't seriously think this way?
Community College only has limited selection and only two years and it cost more than university did before the bad policy we have now. Again you don't seriously think this way do you?😧
@@bestyoutubechannelever3206 I agree with the other person here. I make 200k a year and never finished college. I saw through it. Other people should be able to as well but they choose to be blind to the experience.