Debt Does Not Add Peace to Your Life

From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey personality, George Campbell, joined by the incomparable Jade Warshaw. That's right, best-selling, author of Money's Not a Math Problem, and we're gonna be taking your calls today about your money and your life, and it could get messy, and we're gonna give you some advice you may not like, but, at the end of the day, here's what we want. We wanna see you win, we wanna see you have more peace in your life, we wanna see you build more wealth than anyone has ever built in your family, to break generational curses, to finally just go to bed and sleep, and not be worried about what's gonna happen tomorrow with the bills, and how we're gonna accomplish that financial goal. We wanna show you a proven path to get there.

Not much, sir. How are you doing?

I'm doing.

All right. So, in a nutshell, I bought a home last year for me and my daughter, and then I met someone, and I am looking at getting engaged, and she is talking about wanting to put $40,000 down to help pay off the home faster.

So she won't.

I plan on popping the question here, probably within the next month or so.

Okay. Well, hopefully she's not listening, or else she just got a spoiler.

So, just to clarify, you have the home.

I have a four-year-old daughter.

Okay. Got you. Okay. So how much do you owe entirely on the house?

Just over $138,000.

And so her putting the $40,000 down, is that just her to be like, this is gonna be ours together? What's her motivation behind that? Just to help pay off the debt?

Just to help pay off the debt. We also talked about possibly refinancing to add on, but then the $40,000 is what she has been saving up for a long time now to buy her first home.

So what would happen if, after you guys got married, you guys decided how that $40,000 was best spent, whether it's to put it towards a mortgage or some other thing that you might?

need to.

How's that hit you?

My line of thinking is it's a three-bedroom house. We've had the discussion about possibly having more kids, and if that happens, the house I'm in now is not big enough for that.

This feels like a very future decision, because this doesn't have to be your forever home together either. She could move in. So let me play out how... If I was advising you guys kneecap to kneecap, I'd say, hey, let's wait until we have the document from the courthouse, we come back from the honeymoon, we combine the bank accounts. Now let's talk about what to do with our money.

She had just brought it up of, you know, after we were married, that's what she wanted to do. And I just kind of hit the panic button, I guess.

Well, after we get married is a great sentence. That changes everything. And so you can start to make plans. Just don't make any actual moves until you're back from the honeymoon. But I hope it works out.

That is exciting.

A man on the cusp of proposing.

Oh, yeah. Hopefully she didn't hear this.

Well, I think she knows it's coming. It sounds like. It's going to be no surprise to her.

The names were changed to protect the innocent.

All right. Doug is in Atlanta, Georgia. Up. next. What's going on, Doug?

Hey, guys. Really appreciate what y'all do. I am starting medical school in August, and I've never been in debt in my life. And I looked into different types of loans that I could get to pay for this. And it seems like the smartest decision would go for the federally unsubsidized loans.

What do you have saved up?

So I have about $30,000 in cash and another $30,000.

What a life.

And the other amount is in investments, but not a retirement fund.

How much is in the investments? That's not retirement.

About $30,000 as well.

So you've got $90,000 just laying around?

No, no. It's about $60,000..

Okay. $60,000 laying around. Okay. There's your answer, my guy. We're not going to tell you the best debt to take out, because we don't think that there's a scenario when it is best to take out debt.

It's like saying, what is the best Nickelback CD? I don't know that I could tell you, honestly.

No, I totally hear you on it. I just don't look in the long term, for... I'm just kind of scared to completely liquidate all that.

Well, yeah. I have that. That's my question for you. You called with a question for us. My question for you is, why is it more appetizing for you to take out debt rather than just pay cash and be done and done with this?

I mean, it totally makes sense. But the situation is that the tuition for medical school, that's yearly. So it's $43,000 a year, and then cost of living and things like that. So it's over four years of medical school, and I won't be even making any type of income until residency, which will be essentially five years from now.

But the good news is you have the better part of that for two years. I mean, you've got 30...

You could cashflow. half of this, is what we're saying, with the money you have.

So can you come up with another $13,000 or $15,000? Within a year's time, I think that you could. And then get ahead on the next year prior to that. And if you have to take a semester break in order to make this happen. The point is, don't go into debt when...

And you have any help from family?

Not really. That's kind of at this point is like everything's on my own.

Man, that's real tough.

If I'm you, before this semester starts, and even if you can put it off a semester, I'm stacking up as much cash as I can. Because if you can come up with a little bit more cash to make this work, you're going to be able to cashflow this whole thing, which I think you can.

Thanks for the call, Doug. This is the Ramsey Show.

Yeah, the ship's horn. Let's go with that.

I feel like someone out there is like just glazed over and I'm going, this guy, the ship horn. It's going to be Dave, all of the Ramsey personalities, seven days at sea for the ultimate debt-free celebration, March 22nd through the 29th. And on top of our whole crew being there, we've got special guests. We've got Steven Curtis, Chapman, Monique Chohan from the Food Network, Dina Carter. We got comedians, magicians, you name it.

George, I want to hear you do a set, a comedic set.

Oh, Jade, that's called a tease in the biz.

I'm working on it.

Oh, man. I'm working on it. Because I got a captive audience who can't leave. I thought this is the time to try out stand-up comedy.

Listen, you and a Speedo is not enough. We need to hear the comedy, George.

Yeah, that's not funny. That would just send people to get refunds. So you won't be seeing that. But we will be seeing some sites, Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas.

Let's do it. I'm here for it.

So VIP upgrades already sold out. Most of the suites are sold out. In fact, many of the cabin types are completely sold out. So if you're trying to pick a cabin like one with an ocean view, you got to get your deposit in right now. This thing's going to sell out real soon.

Woo-hoo.

Can't wait. All right. Charlie is in Everett, Washington. Charlie, welcome to The Ramsey Show.

Hey, I really appreciate you guys taking my call. How are you guys doing?

We're doing great, man. How can we help?

Well, I'm trying to get it directly to the point. I am drowning. Paycheck to paycheck is a nice way of putting it. I own a home. My biggest, I guess, mistake is an auto loan.

How'd that happen?

Well, I purchased the vehicle about three years ago when I was making significantly more money. Okay. A recent and abrupt breakup with who I bought my house with had me, because I drive truck and I did drive long haul over the road. And when the breakup happened, I switched driving positions to a local job. And so I'm making roughly, I'd say conservatively, about $4,500 a month.

$4,500 a month.

That's your take home pay?

That's take home after taxes, yeah. Okay.

What other debt do you have? So you've got this car, you're $20,000 upside down on, and what do you owe on it, by the way?

$52,000.

Yikes.

Yeah.

And you're saying it's worth $32,000?

Yeah, roughly. And so I've tried to sell it for about a month and a half, close to two months maybe. And there's just, I mean, I can't blame anybody, but there's, you know, it's not going anywhere.

At what price point? What were you selling it for?

Well, at first I put it up, you know, basically kind of like a takeover payment, this is what's owed. And then I put a couple grand aside in hopes that I could maybe like pay the difference and that didn't go anywhere. And so like, I don't know if I should just do like a voluntary repo on the thing.

No, no, no, no.

No. We'll walk you through some options. Let's get through the rest of your debt. What else do you have?

Okay. Well, I got $230,000 left on my house, $53,000 on the truck, one, $12,000 credit card. A $3,000 credit card. And I got my lowest one, trying to do the snowball, I got my lowest one down to about $600 now.

Okay. Good.

And that's all the debt.

All right. So if we knock out the credit cards, all that's left is fixing this car problem. Now we just have our mortgage to deal with.

Correct.

All right.

And so with the truck payment, my mortgage is just under two grand. And it's $1,828, and the truck payment is $979..

That mortgage is eating your lunch a little bit right now when it comes to your take-home pay, don't you think?

It is. And so, and where I live, I looked around. Luckily, me and the ex are on good terms. as far as the house goes. She moved out.

She didn't, her name wasn't on the deed or the mortgage? She didn't have any equity in this thing?

She does. She's not on the, how the mortgage company explained it is. I'm the primary, but she is on the mortgage.

Okay. So what happens if you stop paying? They go after her?

No, no, no. She moved out, and that was part of my, I don't know if it was maybe an ego thing, but it was, you know, in the heat of, you know, because, like I mentioned, the split was not mutual, and it was very abrupt, and out of emotion and maybe ego, I said, okay, well, you want to do this? I don't. I'm not losing my house.

So did you refinance? No, I didn't refinance. Or did you get her name off the loan?

We are in the process of working those details out, but that is the end goal of getting her off the house. Okay. And so, but with the credit cards, one of my, the higher credit card, that's kind of eaten up my trying to do just the minimum payments, which, on the one, it's like $600 a month.

What were you making before as a trucker?

Yeah, you mentioned you changed your trucking schedule to where now you're making less.

So you're making less doing local. What were you making before?

I was making about $120.

How can we go back to that?

Well, currently, I got a kiddo and animals at home, and so doing, going back to what I was doing is kind of out of the question for another couple of years anyway.

Is the kiddo new?

No, no, no. She'll be, she'll be 18 in about a year and a half.

So again, how does that change from before? Because you had the kid in the pits before. We're just trying to understand what made you make that shift and why you wouldn't go back to it temporarily to clean up this mess.

Well, the reason I was able to be gone on the road was because the ex was at home. And so when she left, I, all the, because when I was on the road, it was, you know, payday hit. I sent her the money and the bills were paid.

When does your 18-year-old go off to college or kind of do their own thing?

She's thinking about it. She doesn't know if she's going to go to college or not.

And you feel like you've got to be home with her?

To a degree, just because a lot of her growing up, I was on the road. And so it's, I'm kind of, I feel like kind of a rock between a rock and a hard place. And I'm just kind of, I feel like I'm, you know, doing minimum payments.

Here's the deal. If you're going to, if this is between a rock and a hard place and you're saying, well, there's gonna be a voluntary repo, probably can't afford the mortgage long-term, I'd rather you go to work now for a year and clean this mess up. Because here's the deal. You get out of this credit card debt and we get out the underwater piece on the car. Now we can breathe again, but you need to be making eight grand a month instead of four grand a month in order to make this work.

Okay. Because, to your point, even cleaning up these credit cards is going to free up 600 bucks a month. I mean, what, that's going to change the equation big time with your numbers, to have an extra $600 a month to put towards this upside down car payment. So, if I'm you, I understand what you're saying, kids, you know, obligations with pets, pets, I could care less about in this situation, but with your daughter, maybe it's you having a sit down conversation with her and saying, listen, I know I haven't been there. I have made a mess of things and I'm getting about the business of cleaning that up.

That's a different kind of sacrifice, but it's the one that'll stick with her, seeing her dad get out of a mess and just own up to the mistakes and go, I want to have a different legacy for your future. Maybe you help her cashflow college, but you got to have money to do that. This is The Ramsey Show.

So we've got kind of a weird and unique situation. I like that. In 2018, we went through Financial Peace University. We moved out of our rent house, we moved into a super small apartment, and we went hard and we saved up enough money that we were able to get completely out of debt. Awesome.

Yeah, that's beyond sick. I'm so sorry, Ashton.

It's okay. I'm just glad they know what's wrong with me at this point, because it took them a really long time to get here. But in the meantime, I was no longer working my husband how to quit his job because he couldn't get me to and from all these doctor's appointments and help me take care of the kids.

How many kids?

And that was kind of in a situation. Three.

Three kids. Okay. So you're in the house, three kids, you've had these medical issues. Where are you guys financially after the storm?

Okay. So right before we get to that, so when he quit his job, we opened up a company and we ran that company. We stayed positive the whole time. It was great. We were able to replace his income and we did really good, just him running solo on his own.

What year was that?

That was in 2021.

Okay.

No, no, I'm sorry, 2022.

And how long would that take before you've paid the full price?

Roughly, we estimated that it was going to be around 18 months. The industry, because of the economy, has kind of tapered down a little bit. So I'm thinking we're going to be closer to about the 24 month mark right now. I don't think it'll take us very long. It's also profitable.

Okay.

And, um, there's a very good possibility that they're not going to be able to do the surgery here. while we do have health insurance, we do not, we can't use it out of country, and that's kind of problematic.

What would it cost?

We've got about $50,000.

Ooh, yay. Okay. And do you have any money saved?

Uh, we've got a little bit, I would say we've probably got about 5,000 in savings right now.

Okay.

And no debt?

Uh, we, I have about $1,500 in credit cards, but, to be honest with you, the credit cards are what we use for the business, just so I don't have to have people have a debit card and I can track their expenses a lot better. So each, we have two employees and each employee has a credit card.

We run a $300 million company with company debit cards. Just saying.

It just makes me nervous.

Um, it makes me nervous because y'all are racking up debt and your health is on the line. I'm just saying, debt is not adding any peace to your equation right now.

So can you tell us the urgency? Sorry, I'm just trying to, I want to make sure we spend plenty of time with you. So you need to have the surgery. Can you, can you explain to us the urgency of the surgery? Is it like, Hey, I got to have this thing instantly, or else my health...

I'm going to go blind.

Okay.

How, how soon?

I've got, I've got like less than a year.

Less than a year. Okay.

So the surgery needs to happen within the next 12 months.

Yep. Okay. Does it get riskier the longer you wait? Or is it just kind of the same thing?

It's more of a chance that there's, right now. they feel really comfortable. If they did it right now, that my vision would return.

Okay.

But it, we don't know in the future if this will continue. And if when they do the surgery, if I will get my vision back.

Okay. Tell us about your assets. What type of vehicles do you have that you have paid off?

I have one vehicle that's worth about $5,000, um, that we paid cash for. that I own outright. We do have two car payments. Um, we kind of got in a situation with one of the work trucks that we have to have a work truck and we couldn't afford to pay cash for one and the other one was, it just wasn't financially reasonable to repair at this point.

So those two have debt on them. So they're not assets. Um, anything else do you have that you could sell off?

Because obviously, the only place that we're at right now is the possibility of selling our house, using the proceeds from equity in our house to buy an RV and live in an RV for a year or two. And just kind of do what we do.

Well, I wouldn't do an RV. I wouldn't do an RV, but I mean, your health is on the line. Few things are more, I don't think anything's more important than that. So it's a possibility for the house. Yeah.

So my only concern with renting and that's kind of where, why I wanted to reach out to y'all is that the rent prices are really more, even for like.

a two bedroom apartment, an RV is going down in value. And so you have to calculate both costs. You might say, yes, I'm spending X amount of dollars on rent, but you're spending a lot more upfront to buy something on debt that is going down in value when you do an RV. So you're losing a heck of a lot more money. You just don't feel it in the same way because you're accustomed to debt, but, trust me, you're losing a lot more money.

Five people in an RV?

I've worked at, so we have about a hundred, about $125,000 in equity in our house, if we were to sell out.

I think that where you're at and unless there's something that you haven't included with the $50,000 surgery coming up with no real assets other than your house, you're, you are against a rock and a hard place. And because you do have a lot of debt between these trucks and you've got some other things going on with the business, it could make sense for you to get your health in place. You guys rent temporarily, you get your financial footing back on. Cause to what George said earlier, the amount of peace you're going to feel, going into the situation, owing nobody, nothing is priceless. Then you're getting the surgery that you need.

Yeah, that's kind of, that's kind of where I'm at.

What is your household income? You're living off 40% of the profits. What does that amount to a year?

We take home about 70,000 and then I leave the rest in the business account.

Okay. So you guys are making 70, you have to pay all these payments. Here's what I would do if I was in your shoes, I'd sell the house. You have the equity, the 125, use 50 of that for your surgery. If that's where you guys are going to go next, right?

Yeah. And mind you, it's not going to just be 50,000 for the surgery. Cause I mean, you're going to Spain and your husband's going to, and he's staying somewhere and there's flights and there's recovery and the trip back. So really make sure you price this out with that money from the sale of the house.

That's an all-inclusive price.

All in. Okay. Okay. Great, great, great. So I love to hear that.

The healthcare over there is tremendously, tremendously cheaper.

Okay. Well, I w I wouldn't do the RV move. I would rent, even though it hurts, because right now you've been building all this equity and you're going to trade that and quote, throw away rent. You're buying peace during a time where your life is chaotic. Yes, sir.

Wonderful folks.

Great. Let's get to our question of today. Today's comes from Alyssa in New Hampshire. Yeah.

She says my fiance and I are getting married next year and plan to merge our finances. We agree on working together after the wedding date to be debt free. Love that. He will be coming into the marriage with student loans and a car loan. I am budgeting with.

Harvard Business, Time Magazine, they all came out saying, we agree with Dave Ramsey. This is actually the better, more, this, this method will get you to success more times than the avalanche method.

So, so now we're getting into the nitty gritty. His financial advisor is telling him non Ramsey things. And I think here's the thing, here's what I want to clarify. When we tell people, wait until you're married to combine finances, that really is the nuts and bolts of, uh, bank accounts and debts and things like that. But you can still be talking about what your methodology for handling your money is going to be.

Yeah, I'm concerned about this financial advisor. I might consider, uh, firing him and finding someone else.

But there's another piece of this, that it's a problem.

Yeah. This whole compromise. Once we get married, I think what it's going to be is, you know, your, your word versus his and what the better method is. And, you know, we have a proven plan. Millions of people have followed it.

If you want to be my lover. That's all I thought about when you said that spice girls, that's usually what's.

happening in Jade's mind. If you're ever wondering, Nathan is up next in Reno, Nevada. What's going on, Nathan? How can we help you today?

Hey, Jordan. Jade. Thanks for taking my call. I appreciate it. Um, so I left my job of about five years, uh, like two months ago.

What do you do?

It's not the nature of the work.

Yeah, it's, it's not, well, it's a little bit the nature of the work too. So I, I am a, uh, a programmer, slash, uh, database professional. Um, and they kind of sold me this dream on this job to say that, you know, we're very high tech, we're very fast moving. And I came into this job and I, I realized very quickly what they meant by high tech. and, and fast moving was a spreadsheet.

So we can't stay here.

What would light you up? Like if I snap my fingers, are you in an office and you're doing this, you know, are you in database administration? What's the sort of goal if I could put your role on paper?

Yeah. So what would light me up is, so I really liked the work I did at my last job, just not the management. I love working with databases and scripting data pipelines, things like that. And so that would make me very, very happy. And I don't, I don't see it.

And you don't think that exists locally. Um, it sounds like you want to be in person, or at least have the flexibility to be in person.

Yeah. It, it doesn't really, there's not a lot where I am. Um, I know my, my location was listed as Reno. I'm actually in Elko and it's a, it's a really small town. There's not a lot of options here.

What was that? What's keeping you there?

Um, I really liked the town. Um, other than that, not much. We have family here. We have family all around here, but when you say we, are, you married?

You have a wife?

Yes. Yeah. Sorry. I have a wife and a child and another one on the way.

Okay. Congrats. What's your wife do?

Uh, my wife is a stay at home mom.

Okay.

Well, you, you've, we can't have the cake and eat it too. So we've got to decide, is this where we want to live? And if so, I've got to be okay with A, working remotely, doing the work that I love, or B, I'm going to have a commute getting to whatever loc, locale has the, you know, the work that I want to do. Right.

Yes.

Yeah. So there's going to be some level of compromise in there. Either I've got a 45 minute commute, but I don't mind because I love it. Or, you know what, if I just had the right boss, I could do this remote work thing and fly out for the company, you know, yearly meeting, whatever. And so I think we need to start looking at other options.

Okay.

I don't want you going back to the old job. There's reasons. you left there. And for those same reasons, you're probably not going to like it once you get there. Okay.

Uh, yeah, just a little bit.

So, unless you were hired into a management role or something where you went, Hey, I want to lead people. It doesn't sound like that's you, but you know, you have to go and step up an opportunity, not down.

Is there any way, and this is just me throwing this out there. Is it a large enough company where there might be a move laterally, where you could go into the database thing and maybe you're working with a different leader?

Yes. Yes, there is.

I explore that. And I don't know if your leader is the person you would go to for that, based on your relationship. Hey, I don't really like working with you, but the other guy seems great. Um, so, you know, be, be kind, you know, treat others the way you want to be treated, but also don't settle. Nathan's life is, is precious and it's worth more than just staying at a job you hate.

How we doing? Thank you. Thank you for having me.

Absolutely. How can Jade and I help?

I'm just trying to figure out if I should file bankruptcy or not. Pretty simple.

That's a pretty serious thing. You just lobbed out there. It's like, I'm like, I'm not sure if I should go with Coke or Pepsi at dinner tonight. What do you guys think? Goodness, that's pretty serious, Alex.

Well, just, uh, been out of work for about three and a half months, had about 30,000 saved, down to my last 10,000.

Oh gosh.

Not your first rodeo.

So how much debt do you have? that's making it bad?

I got about, I got a hundred thousand dollars in credit card debt and a lease, uh, which is about 15,000.

So you didn't learn your lesson from 2008.

No, I actually went through a separation in 2021 and our life savings, uh, was taken by my ex and I became a single father at the time.

You didn't get anything from the divorce?

Uh, it wasn't actually a divorce. It was just the kind of snatch and grab.

What?

Yeah.

A snatch and grab.

So there was no legality to it?

No, no, I didn't, I didn't pursue it. And I do well when I'm working. So, I mean, she needed it more than I did. And I had my son, so I was just focused on that.

Are you saying this is like a robbery? Like they like cleaned out your bank account and like, well, they probably needed it more than I did. So.

Uh, no, I said that, but yeah, she did clean out the bank account.

So she cleaned out the bank account. You walk away with nothing. Is that what this hundred thousand in credit cards is? Tell us, tell us what that came from.

Well, some of the depth I did tell her to transfer. Cause I kind of seen, uh, the relationship or the marriage coming to an end. Um, so, like I said, I, I, I do better than her when I'm working and I just was trying to be, you know, the, the bigger man, how much was the life savings? A hundred thousand.

Okay. So she took a hundred thousand and then you took 80.. She took 80.. Okay. And so, and then there was also debt that she transferred.

About 60,000.

And then you went $40,000 into debt over the last few months.

Uh, no, it's been since 2021.

Okay. And what kind of, what, where did that come from? Is that you trying to keep food on the table?

Just, just, just, uh, robbing Peter to pay Paul balance, transferring the percent, paying off all the balance transfers and just kind of caught up to me now.

Okay. And why I'm trying to get to the bottom of this, cause I never want you to have to consider bankruptcy again. So if you hear me asking you a lot of questions, it's not me trying to drill you into the wall. It's me trying to understand what's going on. So I just want to throw that out there.

Just transferring from state to state because of work. Yeah. Moving around a lot.

What kind of work do you do?

Alex, you with us? Yeah. Okay. Yeah. What, what line of work are you in?

Oh, I managed car dealerships and motorcycle dealerships.

Got it. Okay. So you're in car dealerships. Um, what are you earning? Like what's a normal take-home pay for you every month?

Um, anywhere from eight to 10. take-home after taxes net.

And that's currently.

You said you have, you've been out of work for three and a half months. What happened over the last hundred days, where you've been unable to earn a single dollar?

I've just been looking, you know, swinging and missing. Uh, just, you know, made a move. I was at a place, made a move. It was a wrong move. It wasn't a good fit.

But can you work at a dealership? Does it have to be, you know, managing one? Could you get some job in that world?

I probably could, but I've been, I've been managing for many, many years. So it's kind of.

It feels like a downgrade.

I like a fish out of water.

How many, um, how many, um, shots have you taken at this? Was it just 30??

I got 32 applications on Indeed right now, currently.

Okay.

And they're all for a car dealership management roles?

Car, car, power sports. Yeah. Motorcycles or cars.

Do you know anybody in these roles? Cause? Ken Coleman would say proximity principal. Okay. So you've got, you've got, you've made your calls and you've said, Hey, I'm applying, tell so-and-so, put my resume at the top.

Absolutely. Networked with about 20 different people at 20 different dealerships. And I've worked at probably eight different dealerships in Orlando, met some people and everybody spread out, but yeah, I'm networking.

Okay. Do you feel optimistic? Cause? it sounds like not, if you're talking about bankruptcy.

Well, just because I have nothing coming in and I don't have so much left.

So what I say all the time is any job until you get the job, because I wouldn't want to sit and piddle away.

Can you drive for Uber?

Yeah.

Yeah. With my lease at 10,000 miles a year. Sure.

I mean, you're sitting here with a whole lot of debt and no job prospects.

I get it. I get it. I get it.

Whatever, whatever it is.

It is hilarious when people drive up in luxury cars doing Uber as a side hustle, cause they're trying to get out of debt, and I got nothing about respect for someone just trying to get a better life, even if they made some mistakes.

Yeah. Because your choice is you piddle away or, you know, you burned through $30,000 of savings or, at the 20,000 mark, you go, okay, this is it. I got to do something. What does it take? What's your bare bones budget?

Comfortably 7,000.

Not comfortably. bare bones. 7,000.. Okay. 7,000..

Do you have a mortgage?

No, no. I sold my home.

Okay. So you're renting right now. You've got the car lease and a hundred thousand in credit card debt. That's it.

That's it.

Okay. What's the interest rate on these credit cards? Are we talking like 22% APR?

Uh, we're talking anywhere from 15.

Are you paying like 2,500 bucks in interest a month right now?

Oh gosh. I don't know. When the, when the promotion, the 0% promotion end, which I wasn't aware of. Um, they actually charge you the interest on your balance plus your minimum payment.

Here's what I would do. I'm going to go do my homework and calculate exactly how much interest I'm paying, exactly how much I'm getting screwed. Cause I think we need to turn, uh, turn some anger into action here. And sometimes you got to pull that rubber band back to feel some pain. Cause you've been living pretty good, Alex.

Oh yeah. What's your home? Tell us about your living situation.

Yeah.

Oh boy. Yeah. Any job until you get the job. And I'm talking about any and every job you can get your hands on, because you got $7,000 a month to make my friend and you don't have much time to do it. You have 30 days to lock down something.

We've got to get back to making six figures fast, and then we can easily avoid bankruptcy. We can clean up this debt in a few years with some sacrifice and bringing our lifestyle down. But income is what you need right now. I don't care how you get it and how much pride you have to swallow to get there, man. You need this.

Hi.

Hey, how can we help?

Well, I was calling today to see what your recommendation would be on not having health insurance per se, a year or two, to knock out debt.

This is not real. You're not really asking this. Are you Erin?

Oh, absolutely. My husband and I went four and a half years when our children were young, without health insurance. And, um, and, and, you know, it was a blessing at the time because we needed that thousand dollars a month to pay bills, but that was just love.

That's like saying, well, I used to play in traffic as a kid and I never got hit.

So I just see it as it's $16,000 a year. That really has no return.

Oh, just wait until you get a medical bill.

I'm changing your name to Jon Bon Jovi because you're living on a prayer.

Oh, well, you know, I mean, it's like, it's just realistic. Like during that time period, you know, it was one of those things when all three of my children needed to have shots for school, and, you know, the pediatrician, it was going to be $600 at this place. It was going to be $400.. I went to the, you know, health department and it was $56..

Sure.

So, you know, there's options out there. There's lots of free clinics.

I love the deal. But what happens if somebody like really breaks their arm or you...

We had a call recently where she went through four brain surgeries. Yeah. Oh, well, you just don't know what life's going to throw at you.

I know. I get it.

Okay.

Let's talk about the reasoning behind this all. Why would you do this?

Um, just to knock out the, so, okay. As of this morning, I had $155,000 of debt in two car loans, a student loan, and my solar panels. Um, I paid off the two car loans and the student debt, which just leaves me the solar panels.

How much are those?

I guess it's $86,000.

Oh my goodness. Wow. You got smoked on these solar panels.

Well, I mean, not, okay, but well, no.

Yes. But what's your income?

Uh, income is $25,000 a month.

Okay. So you guys have a killer income.

You make 25 grand a month and we're worried about 16 grand a year for healthcare.

I know. Right. Seems wrong, but.

Why not just use your amazing income and be done with the solar debt within, you know, six months.

Right. Well, and, and that, you know, is definitely doable, especially since I just, you know, knocked out $2,000 a month of other debt. Um, but I was just curious to know your opinion, because I always go back and forth on like, I'm raising my hand again.

Why I'm raising my hand again. Did you say you knocked down $2,000 a month of debt?

Of the payments. Yes. So this morning I paid off.

Okay. 2000 payments and payments. Okay. I was about to say, okay. Yeah.

So your take home pay is 25 K.

I'm sorry.

Your take home pay is 25,000 a month.

Yes. And how long has it been that?

Um, just only over the past, like say two and a half years.

So is this you and your husband combined? Do you own a business? Tell us more about why?

So I'm self-employed.

Okay. Self-employed. That's why you don't want to buy health insurance. Cause it's so expensive.

Oh, right. Yeah.

Riddle me this, you guys make 300 K a year. take home. You have 86 left in debt, right? Right. You have 25,000 a month coming in.

Um, well, yes and no. Um, you know, I do have, uh, six acres of land with a nice house, a nice barn. I mean, my, for, uh, the house payment, which I've just increased, um.

What do you mean? you increased it?

The house payment. Well, I increased, um, how much I'm paying towards it.

Oh, got it. Okay. What's the payment?

I upped that. So that is 3,600.. And then, on average, real estate taxes and insurance is about a thousand a month.

And then you have like, what, uh, a little over like 1,500 bucks for healthcare?

Right. Yes.

So where is the other, like, I don't know, $20,000 going every month?

Well, it was 2,000 a month going to car payments. Okay.

18 left. Keep going. Let's see. Let's see. Keep going.

Some of it, but are you investing?

My question is why aren't we having $15,000 in margin every month to throw out our debt?

Yes. Well, so, yes, I should tell you that, um, so, the money that my husband makes, so, like last year, I saved 100% of his income, which typically can be anywhere from four to 6,000 a month. Okay. So, yes, I, I had saved all of his income. So that's four million.

So how much do you have in savings?

Well, other than this morning, I had a lot, but you know, I just spent it down.

What happened this morning?

That's when she paid off the debts.

Oh, you paid off, so you, in a lump sum, got rid of a bunch of debts today.

Yeah. And what was the total amount that you got rid of today?

77,000.

See, this is what I like to hear. I love that you're making headway. I think you're doing the right thing. I don't want to have to convince you to buy health insurance. You can afford health insurance.

And it's the same reason you have home insurance, same reason you have auto insurance. You're transferring the risk that you can't carry over to an insurance company. And in exchange, they ask for a premium. And so that's what you're saying. You're doing the same thing with health insurance.

Right.

And it's the same thing with your health. And so that's the way I think about it. It makes me feel better about dishing out that coin. And you guys are blessed with an amazing income. And the truth is, if you put 14,000 of your amazing income a month toward the solar panels, they're gone in six months.

Right.

And so if you just do that, auto pay 14 grand to your solar panels, 14 grand. Can you live off $11,000 for the next six months?

Um, I mean, yes, we really could.

If you can't, your lifestyle is out of control. If you can't live off $11,000 a month in take-home pay. All of America is slamming their heads against the steering wheel right now. Going, oh my goodness, if I had $11,000 a month, my life would change.

Right. Do you have a spending, like coping mechanism?

I feel like you, you're like living LaVita Loca, but you're not quite telling us.

Well, no, because I am. The numbers.

Okay. So now I will say like over the past two years, because, you know, yes, my business has been so well that, you know, it really has been just kind of like a, oh, you know, again, I've, you know, 100% of my husband's, um, money just went into savings and so then it was like, whatever I made, spend it. Yeah.

Okay. So you have the budget definition that I used to have, which is, as long as I am taking care of the most important things, rent, cell phones, groceries, I've, I know that amount, everything else is for. treat yourself, right? That money should be up for grabs. And before you get off the phone, I'm going to give you a copy of the book.

Go to ramsaysolutions.

And, might I add, be open to the opinions. Y'all are calling in to ask us our opinion and what we might do.

Yeah, that's a good call out, Jade. Some people calling in looking for validation and justification of what they're going to do, what they did do. And I'm not here to cast judgment. We just want to help you with the next right step. And we're confident that it will work if you do it.

They're not doing any of that.

So that's fine, but we got people to help. And so, if you want to waste our time, like don't, don't hog up our phone lines.

Just know, we love you. We want what's best for you. We're not trying to make good radio. We really are thinking about what's going to serve you in your situation. And we want you to get out of debt and we want you to have all those great things.

And it's what we would do. And it's what we have done. These sacrifices we tell you would do, tell you y'all to do. We would do them ourselves. And Jade's lived it.

You know, I'm like, I'm done with that life.

I'm done with that life, Jade. Now I go to the grocery store. I walk right past the Lean Cuisines.

As you should.

I don't care if they're on sale or not. You're not going to tempt me.

It was just a season. It was worth it. Oh, all right.

Steve is in Harrisburg, Pennsylvania. Steve, welcome to the show. How can we help today?

Yeah. Hi guys. Thanks for taking my call. Appreciate ya.

Yeah. What's going on?

Yeah. So in a, in a nutshell, how do I prioritize? I'll just ask the question. How do I prioritize baby step two with where I think where my career could be in the future? So I left the wastewater field, wastewater treatment.

And that's a pretty serious for us.

It's a pretty serious raise.

So, well, how much more would you have to do with your current job in order to make an extra 1200 bucks a month?

It would take a promotion. Um, uh, a few, um, yeah. And so it's tough though, too, because this, uh, in the municipal wastewater, I started a side hustle. I do it on the side as well for private mobile home parks and campgrounds. They need somebody with my certification.

And how much do you earn from that?

Um, last year I made about 20,000.

Okay.

How much debt do you have?

Uh, just about 66,000.

All right. What kind of debt is that?

Vast majority of student loans. So it's going to be like 60,000 as student loans, one home equity loan, because our boiler went out for 5,000 and then credit cards are about a thousand.

Okay. So let's play out the scenario where you take this new job, you get the pay raise. What will you be making a year?

Yeah. So, uh, well, I know the numbers per month. Um, so, from like, so, from right. now it's 33, so it'd be 4,500 per month.

Um, okay.

Yeah. And you said.

4,500 per month. That's not including the side business. And I take home 1,500 on top of that. Okay. It'd be like six.

Six grand a month is what you'd take home? Yes. That's 72 grand, and take home. All right.

What about your wife or somebody? you said our boiler went out?

Yeah. My, my wife, she stays home with our three kids.

How old are the kids?