It's Time To Take Full Control Of Your Finances
2024-05-13 01:55:04
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people do work that they love, build wealth, and create actual, amazing relationships. Dr. John Deloney, Ramsey, personality, number one best-selling author, and host of the ever-popular Dr. John Deloney Show, is my co-host today. Open phones at 888-825-5225..
You jump in, we'll talk about your life and your money. Spencer is in Memphis to start this hour. Hey, Spencer, what's up?
Hey, I am calling because I have gotten myself into quite a bit of debt over the past about five years, and it's come down to, I'm debating if declaring bankruptcy would be one of my options. Wow. I want to avoid it at all costs, but I don't know what else to do at this point.
Pretty scary, dude. You married?
Not anymore.
Hmm. How long have you been split?
About three and a half years now.
Money play a part in that?
It did.
I'm sorry. How old are you?
I am 24.
. Wow.
So how much debt have you got?
It started about four years ago, and I got 20, it's about $23,000 worth right now.
$23,000 in debt. On what?
I had two vehicles, and then I got a $3,000 personal loan, three credit cards that were only like $500 a piece, and then I had a military star credit card as well that went into collections.
So how much of the $23,000 is the credit cards?
Maybe $1,500, maybe $1,000.
Okay. Do you currently own two cars?
I do not, and that's the problem. I lost just about everything during the divorce, but I ended up keeping the debt for it.
So wait a minute, she's driving both of the cars?
No, it's kind of a long story. Long story short, whenever I went through the divorce, she took one of the vehicles, and she had it for about two years, refused to sign the divorce papers. I couldn't file the car as stolen because she was my wife. She would never pay on it, so I ended up not paying for it at all. They couldn't repossess it because I didn't know where it was, and then so that was one car I didn't have.
Where is that car today?
It finally got repossessed, but now I still owe $9,000 left on it.
Okay, so you have a repo of $9,000.
. All right. Where's the other car?
The other one, as I got it, I never turned in the title to it to the bank, so I believe it turned into a personal loan or a vehicle loan with no collateral. That one was for $6,000..
Where is that car?
Technically, I do have a car to show for that. I have a 2008 Yukon and a 1995 Ferrari.
Okay, so it didn't have a lien on it, and you sold it and bought a Yukon.
Correct.
All right. What's your Yukon worth?
Maybe $5,000.
. I'd probably get $5,000 for it.
Okay. And it doesn't have a lien on it?
No, it does not. I have the title.
Okay. And what do you make?
I just got a new job making $58,000 a year.
Okay.
All right.
All right. You're not bankrupt. You're scared and you're hurting.
Correct.
But you're mathematically not bankrupt. Hear me. No, sir. I've been doing this a long time. You just don't know what to do next.
That's all. Correct. Okay. You're hurting because all this stuff was out of your control. The divorce broke your heart, and you've just kind of swept stuff under the rug, and now you've got a really lumpy rug.
Exactly. Yeah.
And this stuff has a high rate of resurrection. It comes back to life. Zombie money problems. Yeah, they don't die. They just keep coming out of the grave, and they're uglier every time they come out until you shoot them.
Now, so here's the thing. If you file Chapter 7 bankruptcy, you can clear every bit of this, and you'll keep your Yukon, under current law in the state of Tennessee, and you live in Memphis, okay? So that is possible. I would not recommend it, though. You can settle repo debt for somewhere around 15 to 20 cents on the dollar, and a lot of your debt is repo debt.
So if we're looking at $20,000, $4,000 or $5,000, will clear that with some negotiation and some fight, okay? But you've got to call them up. Like the $9,000, they'll probably take $1,000, $1,500, maybe $2,000 and clear that on the ex-wife's car that you never really figured out, whatever, all that stuff, right?
Right, right, right.
Okay? So if you call those people, it's not $9,000, it's $2,000, because that's about what you can settle it for. Because they're just going to be so happy somebody called, because they can't find nobody in this story. They're everybody. Even the freaking car disappeared in this story, right?
Absolutely. And so if you don't pay anyone and file bankruptcy, you could do the same thing and just not pay anyone and not file. Then the only thing that could happen is they could come and sue you, okay? But none of them have yet. None of them have yet.
Not yet, correct. Okay. I have a court hearing in July, for ... I got a set of rims and tires after I got out of the military, and I honestly never paid on it.
Okay. So here's the thing. Can I be mean to you for just a second, in the middle of all your pain? Please do.
I need to hear it. Please do. Okay.
You got to quit buying crap that you don't have money for. Period. Period. Okay. I mean, rims and tires sounds like a 16-year-old.
Absolutely.
Okay. I mean, that's kind of what you are when you're coming out of the military for the first. ... Yeah. Absolutely.
Yeah. I mean, so let's throw our shoulders back and start acting like we're 30 or 40 with our maturity level on our decisions rather than a wounded 24-year-old guy who's had the snot beat out of him, okay? Absolutely. And I think you can do that, and we'll help you. So what I'm going to do is I'm going to assign a Ramsey counselor to you for free, and they're going to walk you through step-by-step how to clear every one of these debts.
It's going to take you about maybe a year to clear them all and to negotiate, and you're going to have to be tough, and you're going to have to quit buying crap, okay? Can you do those two things if I help you?
Absolutely.
Okay. So what I'm saying is $23,000.. We can probably get all that cleared for somewhere in the neighborhood of $10,000 or $12,000, and you make $50,000.. You can do that in a year, but you're going to have to scratch and argue with these people a little bit and get it done.
Absolutely. Yeah.
And so if you file bankruptcy when you could have cleared it for $12,000, that'd be just silly.
I would agree with that 100%. Okay. That's why I needed somebody to tell me.
All right. So you're a good man, Spencer. You've just been hurting.
Does that give you peace, Spencer? Does that give you some grit?
It did. That helped a lot. It did. I felt like I was on the edge of the walkboard for quite a while now.
She beat you up pretty good?
Yeah.
It wasn't nice.
Was there a little one involved, too?
Not at the time. I do have one now, yes.
Okay.
You're 24 right now?
Correct.
All right.
When you get done with here, I want you to write 30-year-old Spencer a letter about the man you are going to be when you're 30.
No more kids unless you're married, no more borrowing money, no more buying stupid things, so you can look cool to 18-year-olds. I want you to write 30-year-old Spencer a letter, and I want you to live into that. Got it?
I can do that.
Cool, man. Hey, I was 28 when I filed bankruptcy. I'm 63 now, and I'm a multimillionaire. You're going to be okay, son. Hold on.
We'll pick up and get you dialed in. This is The Ramsey Show. The Ramsey Show. So here's a quick math refresher. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money.
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Open phones at 888-825-5225.
. You jump in. We'll talk about your life and your money. Dr. John Deloney is my co-host today.
John, I love the suggestion, as we're going into the break with the young guy, to write him his future self a letter. I kind of almost feel like we all ought to do that. Like there's just a, there's something about. what do you want to be when you grow up, you know, kind of thing. Yeah.
Who do you want to be?
I just keep going back to that conversation that was such a before and after that I had with my wife, when she asked, like, what do you want this house to feel like when you walk in from work? And I was like, well, I want it to feel warm and I want it to feel, I want us to be laughing when I walk in. Not both of us be so tense. And then that started a conversation. Well, then here's what's got to be different.
And I just wonder what do I want it to feel like when I'm 40, what do I want it to feel like when I'm 60, what I want my relationship with my kids to be like, and what do I have to do right now to live into that? That's so different than let's just get to the next day and the next day and the next day. And you wake up and you're a hundred miles from your original destination. I just love that idea of sitting down and being intentional. Where do I want to be, man?
Yeah. Cause you just don't.
Or, more important, who do I want to be?
You don't accidentally become good things. No. You accidentally become bad things.
And life happens and I get really mad and I start to spin and make a decision.
I don't ever do that.
You've never done this, but I find myself way over here, and it's just, I like the idea of 55 year old John going, whoa, whoa, whoa, whoa, whoa, whoa. Like letting him be a little bit of a guide for me. Right.
Yup. Absolutely. Open phones at 888-825-5225.. Aaron is in North Carolina. Hi, Aaron.
How are you?
I'm doing great, Dave. Thank you and John so much for taking my call.
Sure. What's up?
So my wife and I just bought a house and I'm feeling a little buyer's remorse and I just wanted to get y'all's take on our financial situation to see if there's some validity in what I'm feeling or if it's just, you know, I'm just in my head on it. I'll give you just a rough kind of breakdown of our financial.
Before you do that, tell me what the house payment is.
$3,700.
Okay. And what's your take on pay in the house?
$180 a year, roughly $9,500 to $10,000 per month.
Uh, no, it's not. Something's wrong. I'm talking about take home after taxes.
$180 is not $10,000.
. $10,000 is $120.. You don't have $60,000 worth of taxes on $180..
You don't.
Well, no. Okay. So are you taking out 401k and all that?
No, I'm not. Taxes only.
Oh, taxes only? Uh, I don't know the number off the top of my head.
Yeah. So it's probably... Okay. So how much are you putting into your 401k?
Um, currently I'm 10% and my wife is 10%.
Okay. All right. So that's $18,000.. So, um, that makes sense. then, right?
Because your take on pay, not counting your 401k, would be more like $14,000, okay? Something like that.
And 401k, health insurance, whatever else. the crap's coming out of there, because something's coming out of there. But that's what it ought to be. Because $180 is $15,000 a month. Okay.
That makes sense. So you'd be at $13,000, and $3,700 is not out of line. then. That's my point. I had to get to real.
take on pay before I sold your house, and now we don't have to sell your house. So that's good. So.
My wife will enjoy that.
So you're the saver and she's the spender. You're the nerd and she's the free spirit.
Yes.
And you feel like you caved and bought something you can't afford.
Well, we're good on the house. The only debt that we have in our names is a car. And my biggest stress right now is, dude, I just, I have $85,000 in the bank. The car I have, I have $39,000 on my car.
Write a check and pay it off today.
Okay. I was going to go sell it and buy a beater, because I didn't know if it was smart to just.
Well, you can still sell it later and buy a beater if you want to, but for today, let's get rid of the stress.
And you guys are not doing a written monthly budget called every dollar on the every dollar app, where both of you agree on every dollar before the month begins, where it's going and what its name is. And if you'll start doing that, you'll feel much more in control.
It'll give you a lot of, it'll give you a lot of peace. It may cause some fights because it may expose what some people in the house are spending and it's not you.
Yeah, you're correct. And we do, we did, we did do the every dollar app and we're able to save around $2,200 a month. But for some reason that just seemed low. And I got on Reddit, which I shouldn't have done, and everybody was like, oh, you're house poor. And I just started freaking out.
Listen, Reddit is not, Reddit is not a source of anything except trouble.
No, Reddit is for if you're feeling exceptionally well and you're like, you know what I need in my life? A little depression. Then you should read Reddit. Other than that.
If you get, if you get a medical diagnosis, if you go to Reddit, you're dead by morning.
The only thing that will kill you faster is, is, is WebMD. They'll kill you, they'll kill you within an hour.
So seriously, you're right. So, Daniel, Daniel, what you guys need to do is you need to get above this and think about your source of information. And we are making fun of Reddit, but it's not a good source. Okay. And because the numbers you're giving me, nothing's out of control.
I think what I'm hearing is a good guy who's a nerd, who's very responsible, like me. I'm a nerd. And your, your wife, has not let up on the spending. You all are not in agreement. You've been, kind of, you know, swinging at this whole money thing instead of actually making it dance, getting it in line and making every dollar dance.
And both of you being in agreement, paying off the car. And then I think you're going to have a lot of peace. The numbers you're giving me are not stupid. If they were, you know, I'd tell you.
Yes, sir. Aaron, can I ask you a few other peripheral questions? Yes, sir. You got any friends?
Oh, yeah.
That you go hang out with once a week?
Yes.
What's the state of your health?
What's the state of my health?
Yeah. You exercise, you go for walks every day?
Oh, yeah. Yeah. Work out six days a week.
Okay.
Eat clean.
What's the state of your marriage?
Great. Really good. Really good. I think my biggest... I just want to be a good dad.
I want to be a good husband. I want to lead my family to wealth. And I didn't come from that, so I just strive for that.
Okay. There, it is. There it is. Yeah. You don't want to screw this up.
So you're walking a tightrope. Yeah. I get that.
Good man.
Good for you.
That's a good motivation, as long as it doesn't take it so far, you can't sleep at night.
That's right. I'm going to send you building a non-anxious life.
Or if it doesn't take you to Reddit. Yeah.
Yeah, exactly. I'm going to send you building a non-anxious life. I want you and your wife to go through that book together.
Yeah. And then you guys jump on EveryDollar, the app, and get it going too. And make sure you get this stuff dialed in. Because I think you're there. I think if you get 100% alignment with her using the budgeting process called EveryDollar, that's going to...
And you're probably 85 right now. Okay? If you get 100% control and command over the dollars, and you're probably 90% on that, and you pay off the car, then you're going to... And you start doing the Ramsey stuff the rest of the way and quit ishing it, then I think you're going to find an immense flip from the... I think that little bit of lack of alignment and then this tremendous drive to be a good guy is where your disconnect is, your dissonance.
Yeah.
And yeah, his body put a GPS pin in money worries. And so it's just... He's got a new big debt, and he's got a kid, and his body's sounding all the alarms. It's going back to those ratios. And you and I have talked about that offline.
Those are just important things. I'm doing it right. We're safe. I'm doing good. I'm doubling up on my payments when I can.
I'm taking overtime when I can. I'm getting the stuff done. And you slowly practice that.
Yeah. But when you do something that your inner voice, the Holy Spirit's telling you not to do,
then don't be shocked that you're stressed.
Right. Exactly.
So when you buy a house while you have a $39,000 car debt and you knew you shouldn't, don't be shocked that it's upsetting.
Right. Or one step further, if your parents were screaming at each other growing up over their house payment, even if you put 50% down and you buy a house, expect your body to feel a little tense. That's okay. I know that I have to outsource that, because when I get emotional, I get real emotional, and I get real... I start making decisions fast.
And I get a friend or two, or I get somebody that I trust to say, okay, I'm about to do something uncharacteristic. I'm about to sell my house. we just bought. Is this wise? Yeah.
And then you can get some exhale in your life. And they'll go, no, I got your six. You're doing good. It's helpful. It's what this show is, right?
Yeah.
When you do things that are inconsistent with what you believe, people in John's world call that dissonance. There's a disconnect. Your actions are perpendicular to your belief. 100% of the time, you get stressed.
This show is sponsored by BetterHelp. Hey, good folks. It's Deloney. And with back-to-school madness on deck, my family's schedule is already so packed. And we haven't even made room for things like exercise and date nights and counseling and all the other things that make our life even worth living.
When it comes to taking care of me, I have to remember to put on my oxygen mask first, meaning I have to do the things that help me stay well and whole. And you have to do the same thing too. Together, we can show up and be strong in all of this chaos. So don't skip the things that matter to you, including therapy. When it comes to therapy, call my friends at BetterHelp.
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Dr. John Deloney, Ramsey Personality, is my co-host today. Well, John, it's finally happened. My 35-year stellar career has been reduced to selling T-shirts.
Finally! We get some Ramsey cool gear, dude.
I thought I was an important author, and now I sell T-shirts. So we have Better Than I Deserve T-shirts.
Finally! We have Food at Home is the T-shirt. That's a great T-shirt.
I got that one.
T-shirt that says Better Than I Deserve. And some cool sweatshirts that say Debt Free. I guess I should hold them up for you. YouTube people. Yeah, because YouTube people need debt free.
Where do I put it? There? it is right there. Okay. So model it, Dave.
Come on, do your Vanna White, Dave. Come on, buddy. I'm drinking out of my own Better Than I Deserve Yeti, because God knows I didn't have enough Yetis. They breed like rabbits in my cabin.
Dude, they are. They breed.
They're everywhere. And then we got our version of the Stanley Cup thing over here, whatever that is.
They'll live like no one else.
Yeah, but it's the, what do the women call that thing?
Stanley.
It is Stanley.
Yeah, that's the brand.
It's the Stanley Cup. I was thinking hockey for a minute.
My brother-in-law works on the railroad, and he's had a Stanley for 117 years. And his daughters were like, Dad, we want Stanley. And he goes like this. And they all went, oh.
He does. He's got the real green ones.
Dad's way.
The real ones.
Dad's got it going on. Made by Aladdin, I think it was. So. anyway, you've been asking for the Ramsey merch, shirts, tumblers, hats, Better Than I Deserve hat. Yep.
T-shirts, Yetis. Yep. You got them. We got food at home. I can't believe that one's popular.
But you're wearing that one, you said, huh?
Yeah. I like that one. Cracks me up. Yeah.
Okay. So you've got a story the world needs to hear. You can kick off some conversations. I'm not crazy. I'm just getting out of debt.
And it's kind of fun. And it's high quality. You know the new soft kind of T-shirts? Yeah. That all feel like pajamas now.
Yes. Everything's, you know, the old scratchy cotton T-shirts are kind of gone. These softy ones are, yeah. Well, it's.
Yeah.
It's fun. I'm glad we're doing it.
Listening to you sell clothes is one of the funniest, most awkward moments of my professional life.
I'm just saying.
I'm going, you know, yeah, Ramsey Solutions changed my life. I bought a hat from them. Oh, yeah, that just.
I will work so hard to get an underwear endorsement from somebody, just so you have to pitch it.
Not a chance. It's amazing. Just so you have to pitch it. There we go. All right.
RamseySolutions.
com slash store. Check out all the new merch.
It's awesome.
It is actually high quality merch. I hope we're charging a lot for it, because it's just embarrassing that we're doing it. So anyway.
It's fantastic. Hey, for years, people have been showing up with their homemade. They make their own.
That's true. That's true.
This is good stuff.
That's, yeah. That's not on me, though. No. This is on me.
Nah. This is good.
Happened on my watch right here. This is good.
Well, it allows people to be a, we say it all the time, like we don't do big $400 million sponsorships.
They can be a walking billboard for us.
They are like, they don't have to say anything. If you get a little social awkwardness.
Just be drinking out of your better than I deserve, Yeti. That's right.
There we go.
Coffee, by the way.
Or where you're debt free. Because who at the mall doesn't want to know what your net worth is? That's important. Just announce it.
I see.
Put some sweet tea in the Yeti and go for a walk. Here we go.
Yeah, that's what's in your sweet tea, for sure.
Yeah. All right. Daniel's in Detroit. Hey, Daniel, what's up? Hello.
A lot of debt.
How can we help, sir?
Well, I'm going to be having a baby soon. I'm like two months.
Yeah, I've been fighting every month trying to get myself back on track. I fell behind on bills a few months ago, and I haven't gotten anywhere with it. I'm just over $200,000 in debt, and I'm trying to figure out what my best options are to get back ahead.
What kind of debt is the 200K, bro?
I've got $163,000 in the house. I've got two cars.
How much on car one? How much on car one?
$19,000.
How much on car two?
$15,000.
Okay.
That was co-signed on that one.
I'm sorry?
That's what I co-signed on, on the second one.
For who?
My wife.
Well, if you have a baby with somebody, you can buy a car with them, too. It's okay.
You all have made a human. You can share a checking account.
That's $34,000.
. You've mainly got car debt and house debt, right? What's the other debt?
I've got $6,000 between credit cards and tools.
Tools. What do you do for a living?
Avionics tech. Okay.
And what's your household income, sir?
It's about $50,000 right now, for a while. It went way down. I had to drain my savings account and everything.
Why did it go down?
The hours. I was lacking in hours at work. And then my wife, she ended up getting really sick for a little bit and was out of work. She's finally back to work, but there's no savings account left to fill back up.
So, between the two of you, both of you working, you make $50,000?
Yes. She's only part-time right now.
Okay. Because I was under the impression Avionics Tech's made more money than that.
Yeah. It may be higher. I'm just kind of giving you a rough estimate. Things are looking better. I'm working more hours.
You work on airplanes, dude, right? Yeah. Okay.
What do you make in an hour?
$30,000 an hour. Okay.
How many hours a week are you getting?
I'm finally back to about $40,000 right now, and I'm trying to push for $50,000 to $60,000.
Okay. You're making more than $50,000 a year. Okay. You're doing your math wrong.
Yeah, I do.
That's helpful. But between hours going down temporarily and her being sick, and now a baby coming, the stress of all that, you've been out of control, and all the money is in total chaos. Is that right?
Yeah, absolutely. It seems like I'm just getting my paycheck, and now it's completely gone, and we still don't have bills paid that we need to have paid.
What does she do for a living?
She's a hairstylist.
Okay. All right, cool. All right. Well, here's the thing that I know. I know that if the two of you sit down together tonight with the TV off after dinner, breathe, and start writing down what you've got coming in right now, and what you could have coming in in the future, you can see your way to getting these two straightened out.
Whose car is the $19,000 car?
Mine. Good.
What is it worth?
I'm real upside down on that one. I was going to sell it not too long ago, and I checked into it, and it's blue booking at about $8,000 right now.
That'd be trade-in. Yeah.
Trade-in, I would say, in five.
What'd you do? Tear it up?
Did you roll a bunch of negative equity into it?
Nope. I did not.
What is it?
It's a Chevy Silverado, 2012.
Chevy Silverados. do not get that far upside down without some other piece of circumstance involved. You've torn it up. There's extra miles, or you rolled negative equity from the deal before into it.
Nope. I didn't have a car loan before.
Wait a minute. Is this a high interest rate loan? Yes. $19,000 is not your payoff balance. $19,000 is the balance on the account.
There's a difference. On a high interest subprime loan, they book it on TOP, total of payments. $19,000 is your total of payments. If you take a check over there today and pay them off, it's more like $15,000..
Okay. You need to call them and ask them not what your account balance is, but what your payoff is today, so you're not nearly as upside down as you thought you were. I knew there was something wrong with that math. Okay. Now, so here's the prescription for this.
The great news is you feel the pressure because you're a good dad, going to be a good dad, of a baby coming, and that's going to make you guys sit down and get control of this and not spend any money except food, lights and water, shelter, and get caught up. Oddly enough, sir, you make enough to do all of those. It's very possible.
And don't count that mortgage in your debt right this second. Let's worry about those bills and those debts, and we'll get that stuff squared away.
First thing I want to do is be current and in control. There you go. And you're not that yet. I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable. Yeah.
And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through, how am I going to pay my bills? How am I going to eat next week? Yeah, in the middle of all that grief.
It's terrible. Life insurance is the one thing, especially as a mom with three little kids, that I'm so big on for people to get, because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much.
You just have to admit that someday you're not going to be here. You've got to say it out loud, and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. It costs no stinking pizza. To get a free quote, call 800-356-4282.. That's 800-356-4282, or go to zander.com.
Guys, thanks for joining us here on the Ramsey Show. Dr. John Deloney, Ramsey personality, best-selling author, is my co-host today. Open phones at 888-825-5225.. If you like this show, we can always use your help.
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Lisa's in Portland, Oregon. Hi Lisa, welcome to the Ramsey Show.
Thank you.
My husband passed away unexpectedly a couple months ago, and he was kind of in charge of all of our monies and stuff. And I'm going to get through this call without crying.
No, you're not, because I'm not.
Yeah, you don't have to, you're good.
So how old are you?
I'm 54, and we've been married, for, next month would be 36 years.
What happened to him, hon?
He just went to sleep, I guess, and didn't wake up.
What was his name?
Troy.
Well, we can all be envious of that methodology, can't we?
Yeah, that is one thing I'm at peace with. He liked to be home, and here he was.
There it is, just like that. Wow, I'm so sorry. So you got any babies at home?
I got three grown children that are all married.
Good, good. So it's you, and you said you're up in the air on the money stuff, then, right?
Yeah, yeah. So he did set me up, I'll be okay, but I just don't know what to do with everything. And do I pay my house off with life insurance that I got?
How much life insurance did you get?
I have, right now. I have $500..
And what about right now?
And I think I'm going to end up with, yeah, then I'll have, I think, another $100,000.
. And then in monthly, I added it up, and I think I should get at least $7,000 a month.
Boy, I love your husband.
I know, so do I.
Yeah, Troy did good.
What a great job, Troy.
We did so bad when we were young, yeah. He just said, no way, we've got to turn it around, so we did. Yeah.
Well, and he left you set with having no idea that he was going away at 50.
. That's pretty crazy. That's young.
Completely, I know.
Every day I live, that looks younger. Oh my gosh.
All right, so you only owe on your home, what do you owe on it?
I owe $240.
Okay, and do you work?
I do not work.
Okay, but you've got $7,000 a month coming in. Mm-hmm. For life? Where's that coming from?
That's going to be for life.
What's that from?
Military. And then he was a police officer.
These guys are freaky.
And so I have that retirement, too.
This dude's amazing, huh?
What a great guy, oh my gosh. All right, so...
I'm the salt of the earth.
Yeah, wow.
Okay, so let me play pretend. You have any other debt?
I have two credit cards that are about $12,000.
Okay, all right.
And I own my cars, though, so nothing else.
If you didn't have a car payment and you didn't have any credit card debt.
I think you can make it on $7,000 a month, don't you?
Mm-hmm, definitely.
Are you going to get on a written budget, so you don't screw this up?
Yes.
Okay, because people can screw this up.
Oh, I know.
Okay, so that's what's scaring you. That's what's scaring you. Troy did such a good job, and I don't want to mess it up. That's what's bothering you, am I right?
Yes, it's totally it.
Good, good, okay. That's a good motivation. I don't want you to live in the terror of that, because I want to give you the information. so you are doing it right. But if I had you on a detailed written budget monthly, where you knew that you were easily living on $7,000, which you should easily do with no house payment.
Oh, yes.
You cut up the stupid credit cards and never borrow money for anything. ever again. Say, I promise, Dave.
I promise on that one, Dave.
So we're not going to have any debt, and we have a paid-for house, and we've got $350,000 to invest. And we have $7,000 a month coming in. Am I missing something?
No.
That's a pretty strong position. I think you and Troy did a good job.
Lisa, I'm going to inject a question here to you, but, Dave, I'm asking it to you, too. Lisa, is there a chance that in six months, when the smoke clears, you want to go live by some of your grandbabies?
No, I'm going to stay in the house. I have three grandbabies close to me here, and I'm having a new one in Montana.
Okay, awesome. Normally, I'd tell somebody, don't do anything for six months. Don't pay off, and just sit. But this is where you want to be. This is where your family is, where the little ones are.
This is your home, right? Oh, yeah.
I'll add to that question, then. I'll just go ahead and be real tacky. You said he died in his sleep. In the home?
Yes.
Are you going to be okay living there, then?
Yes.
He's here.
Nope, it's staying forever.
Okay. Here's what I'm going to tell you, and you're not going to believe me, but I'm just going to tell you. That's about 98% of the people like you have had the blessing and honor to sit with the first couple of months out. And it's all good, and there's no rush.
Okay.
But in nine months, two years, four years, we'll see, right? You don't solve for that right now.
The longer it goes, the weirder it is. That you still got the clothes. But today is fine. Today's fine.
Today's great.
27 years from now, if those clothes are still hanging there, that's an issue. I'm just saying. But today, you're fine. Just let it go. It's part of your grieving, and you're a strong lady.
There's some comfort there.
And you did get through this without bawling. Good for you. And I almost did. I only had one little tear, but I cry at Applebee's commercials. Okay.
Can I ask you one more thing?
Uh-huh.
And this is not money-related. I grew up in the home of a police officer, too. Okay? There is an extra layer of... And I still feel it.
My dad's in his 70s, and I'm in my mid-40s. And there's still a level of, when I get around my dad, I just exhale. Because policemen walk around as though everything's going to be okay.
Yes, exactly.
I want you to make sure you have somebody to call, because you're going to lean on a crutch that's not there anymore. He's in your heart, but he's not going to be there in that restaurant. And you know he would always sit up against the back of the room, and now you're going to... Right? So he's got all those little things that you always had.
that extra layer of everything's going to be okay. And your body's going to feel like that's gone.
Because it is.
Because it's gone. And you can reach out to.
Are you in a good church, Lisa?
Yes.
Good. Okay. Here's what we're going to do. Here's what we're going to do. I've been doing this 35 years.
And I've sat with people exactly where you are, hundreds and hundreds of times. And you and I just went through the numbers, and everyone listened to us. go through them. Your numbers are just fine. You're just fine.
You were married to a wonderful man who did a wonderful job, making sure you were going to be okay, and you are okay. Mm-hmm. I would pay off my house. I'd pay off my house, and I'd get on a written budget, and I'd pay off those credit cards, and I would cut them up.
And I'm going to put you into Financial Peace University so you learn how to handle money, so you feel confident in this subject area going forward.
Okay.
And I'm going to have you sit with a Ramsey coach that's been trained by us at my expense. You're going to pay nothing for any of this, okay?
Oh, okay.
Okay? Because we're people of faith, and our book tells us to take care of orphans and widows. And we go by the book. Okay?
All right. Thank you.
All right. You hang on, and we'll have the team pick up in there and get you signed up for financial peace and get you with a coach. You're going to be fine, honey. You're in really good shape.
This is my dream, Dave.
Yeah. Hey, guys. Here's the deal.
This is it.
What it means when you put life insurance in place, have a will in place, and have your pensions lined up and so forth, to make sure that your family's taken care of. It's how you say, I love you. Now, the rest of you that are listening to this, get your butt in gear and get over to Zander Insurance and make sure that you're Troy. Because all of you ought to be Troy. This is the Ramsey Show.
Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. Where we help people build wealth, do work that they love, and create actual, amazing relationships. The phone number is 888-825-5225.. Dr. John Deloney, Ramsey personality, host of the Dr.
John Deloney Show, and author of a couple of number one best-selling books, the latest, Building a Non-Anxious Life. He's my co-host. 888-825-5225..
Auburn, Alabama, Ashton is calling. Hi, Ashton, what's up?
Hey, how are y'all?
Better than we deserve. How are y'all?
We're good. I'm so happy y'all took my question, because we really need some help with this.
We'll give it a shot.
Okay, so me and my husband, we're 25, and a year ago we purchased a camper and a truck, because the payments on that were going to be cheaper than what our apartment was going to be, which was going to be almost $3,400.
. And now we're stuck with a camper and truck, and we're going through baby steps, and we're trying to figure out if it's worth keeping the pay down until it's out of the upside down, or to sell and then pay on the upside down.
Do you still live in it?
No, we do not. My mom has a rental house that became available, so we live in the rental house now.
So the plan that it was cheaper was not executed?
Well, yes. It's not cheaper. if you didn't need it. Now you just have a camper payment.
Yes, now we just have a camper payment, which we are renting it out currently as an Airbnb vacation, and it's paying for it, but we're worried when summer's over. I just don't want to have that, if it doesn't get paid for.
How much do you owe on the camper?
$115,000.
Good gosh!
It's like an apartment on wheels. It has a washer and dryer, king size bed. It's a massive fifth wheel.
What do you all make a year?
Last year, together, we made, I think, $145,000.
. I'm a hairstylist, and he, at the time, was a firefighter paramedic.
And you all are 20, did you say 24?
Yeah, we were 24 at the time.
And they loaned you $115,000 on a camper.
I'd appreciate it.
Yeah, I don't know how that was possible, because we couldn't get a house. No one would loan us a house, or get us a mortgage for a house. With me being a hairstylist, my income fluctuating wasn't a fixed income.
You're the dumbest smart person I've talked to today.
I'm trembling to ask this question. Have you figured out what the actual value of the camper is today?
The actual value of the camper is $90,000.
And you owe $115,000?
Yes, $115,000.
So you're $25,000 in the hole.
But if you go to Camping World, and they want to buy it back from you, they offered me like $63,000.
I'm sure they did. And Camping World sold you this crap.
Yes, they did.
Okay, and I know the news is going to get worse, but I have to just keep going. How much do we owe on the truck?
The truck is $50,000.
I'm laughing with you, not at you, Ashton.
No, I'm laughing at myself too.
And have you priced the truck's current value?
His trade-in value when we talked to a dealership was $42,000, I believe.
Okay, so you can get close to what it's worth if you private sell it. Or close to what you owe if you private sell it. Because trade-in value doesn't work. Do you guys have any money?
Like saved up?
Like money, yeah.
Yeah, we're in the baby steps. We have the emergency fund saved up.
The $1,000.
. You have $1,000, okay.
Yes, and then we're just dumping all the extra money we have into credit cards to get them finished.
And how much do you have in credit card debt?
Total $7,000.
Okay, good.
And then my car is $10,000.
. Your car is what?
My car is $10,000.
Okay, good. And I assume you've been so far paying everything on time, and so your credit's probably stellar.
Yeah, our credit's still good, thankfully. It's still very good.
Okay, the longer you wait to sell the camper, every day that you wait, the spread between what you owe and its value gets wider. Agreed? The value is going down faster than the loan balance. Agreed?
Yes. Yes, sir.
So we don't want to delay. We want to sell the camper as soon as we possibly can sell it, without giving it away to Camper World, or whatever they're called. I don't want to go over there again, but at $63,000, no, we're not doing that. But if we can get $90,000 for it, or $89,000, or $92,000, or $85,000, the sucker's gone. Okay?
So get it up for sale today. And then you're going to have to go to the credit union. Where's this loan? Is it? Camping World gave you the loan, too?
Yes, it's the Reliant Credit Union, I believe.
Of course it is, yeah. Of course it is. That's who makes loans like this. They're probably not going to be any help, but contact them and ask them if you can sign a note for the difference unsecured.
So you sell it for $90,000, you owe $115,000, you're going to have a $25,000 note with Reliant if you did that. Otherwise, you've got to go to your credit union or your local bank and get them to loan you $25,000..
And do it like a personal loan?
Yep.
All we're doing is reducing $115,000 to $25,000.
. That's a good move.
Yes.
Okay.
And it's not a $1,000 payment like we're making now.
Exactly. And we're going to sell this truck as soon as we can get close to what is owed on it. Okay. So put it on Craigslist and put it on other stuff. Okay.
Because we can get a vehicle down closer to your vehicle. that is doable. And then, of course, we're going to clear those credit cards. So now, if you're making $145,000 and you owe $25,000 and you owe $10,000 on your truck and $7,000 on credit cards, and a little bit on some kind of car we get for him or truck we get from him, like $10,000, we can clean that pretty quick. You could be out of debt.
We're already down $1,000 in two weeks.
Yeah. But you could be out of debt completely if you'd make those moves. Sell his truck and the camper by the end of summer if they're gone at a reasonable price. And that way the hole's not too big on either. one of them that you've got to pay back.
But you could be debt-free in 18 months.
That would be awesome.
But that's living on beans and rice, rice and beans. Yes. No more pipe dreams. Absolutely. Because this was a pipe dream.
Like drugs were in the pipe, pipe dream.
Yeah. We smoked this pipe dream.
But it sounds crazy to do a $3,400 apartment too.
Compared to the truck and the camper, the $3,400 apartment is freaking lights-out genius.
Compared.
Think about it this way, Ashton. At $3,400, you would have paid about $40,000 this year in rent in this apartment. You're hoping to sell this at a loss to minimize your loss to $25,000, to $30,000 to pay off.
Yeah. So there it is. You paid it anyway.
You paid it anyway. You just didn't get to live in an awesome apartment.
Yeah. Instead, you were in an apartment on wheels from Camping World.
Dave, it's so great. I can feel you try not to laugh right next to me.
I'm just.
$200,000 in depreciating assets.
As they say in Auburn, Alabama, bless your heart. This is the Ramsey Show.
Thank you for joining us, America. We're glad you're here. Dr. John Deloney, Ramsey personality, is my co-host today. Today's question of the day comes from Tracy in Texas.
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