Personal finance personality Dave Ramsey is known for spelling it out like it is.
When it comes to debt matters, he is famously blunt.
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An advice-seeker recently asked him about dealing with college debt. Ramsey, unsurprisingly, had some choice words of advice.
"Dear Dave," a questioner identifying himself as Austin wrote, according to KTAR News in Phoenix. "I graduated from college six years ago with a business degree. Currently, I’m in data analytics making about $40,000 a year and have $155,000 in student loan debt."
"Do you have any recommendations as far as refinancing my student loans and getting the interest rates and monthly payments down?" he asked.
Ramsey seemed a bit exasperated in his response.
"Dear Austin," he wrote. "I’m not trying to be mean here, but what in the world are you doing in data analytics that pays so poorly? Most of the folks I know in that area make a ton more. And you’re going to need to start making a whole lot more to pay off $155,000 in student loans."
The author and radio host said Austin needs to think more about his finances.
"For starters, you shouldn't be looking at this from a what-can-I-do-to-make-this-manageable perspective," Ramsey said. "You don’t want to give this Sallie Mae nightmare a haircut, then tell her to sit in the corner all nice and pretty. You want her to leave!"
"Now, there’s nothing inherently wrong with refinancing to get a lower interest rate, or lower payments, if you do it the right way," he continued. "But in most cases that translates into keeping the debt around forever. You need a better plan."
Ramsey explained his belief about setting financial objectives and raised the possibility that finding a side gig might be necessary.
"Instead, let's shift the main goal from that to paying this thing off as fast as possible. That means big, hairy chunks of payments on the principal," he wrote. "And that'll probably mean picking up an extra job or two, because right now you’ve got what I call a shovel-to-hole ratio problem."
"The hole you’re in is a big one -- a $155,000 one. And you’re working with a $40,000 shovel. You need a bigger shovel, and a lot of extra work, instead of trying to keep these loans around like they’re pets," Ramsey said. "What can you do -- for a short period of time -- that’s legal, moral and will make you the most money the fastest?"
Ramsey then offered some straight talk on career advice. And that involved a suggestion that Austin's current employment situation might be a up for a big change.
"On the day job side of things, you may want to consider looking for a position with a different company, Austin," he wrote. "You’re way underpaid if you’re in data analytics and making just $40,000 a year."
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