The Ramsey Show - App - Get on the Right Track to Smarter, Debt-Free Living (Hour 3)

Episode Date: June 14, 2018

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Music Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey. The phone number is 888-825-5225. 888-825-5225. Maggie starts off this hour in Fort Worth, Texas. Welcome to the Dave Ramsey Show, Maggie.

Thank you so much. How are you? Better than I deserve. What's up? Well, I got married a couple of months ago, and we are a blended family. We both brought children into the marriage, and we went through FPU before we got married. I set up my life insurance with Xander, like you recommend. And since we weren't married, I listed my children as the beneficiary. But now that we're married, do I need to list my husband now or leave my children as the beneficiaries? I would not leave mine or children as a beneficiary ever.

If you're going to fund it directly for them, we would use a trust as the beneficiary, and the trust is managed for the good of the children. But I wouldn't leave it into their names because whoever ends up being the guardian may have control of that, and that's not my goal. So who would take care of your children if you passed away? My oldest one is an adult. She's in college. But I do have two minor children, and they would go live with their father. Okay.

All right. And what about the opposite situation, if your husband passed away, who would take care of his children? They primarily live with their mother. Okay. So we just have them every other weekend. Okay. All right.

So here's the thing. What we're trying to do, if someone passes away, is take care of the people that are counting on their income to exist. Okay? And so, let's kind of walk through this scenario. If you die, who depends on your income that's not going to be there anymore? Your children would go to your ex-husband, and they would need some additional support, but he would mainly take care of them. Right.

Correct? And so I would have some of the beneficiary go to them. Your husband and the household that he operates, your current husband, would also have been dependent upon your income and wouldn't have it anymore. We all will have set up a life that is both of your incomes, right? And so I probably would do something like 50% into a trust for your minor children, and you can set up whoever you want to manage that trust. It could be your ex-husband, probably not.

It could be your parents. It could be your parents. It could be your current husband manages it for the good of your children. And that trust has very distinct things to it. How old are your children? My oldest one is 20. They don't get anything. Are they counting on you?

Right now, she does live with us while she goes to school. Okay, so we might leave her some money to finish school then. Okay, I'm sorry. And then my two minor children are 16 and 9. Okay, all right. So a trust might have little stipulations in it. What's the balance or what's the amount of your life insurance? Approximately $550,000.

Okay. And so let's say you left $300,000 to your kids, okay? That's $100,000 each for three kids. And it goes into trust. And the trust says, okay, the money is to be invested in mutual funds, and the income off of the mutual funds is to be used for the care of the children, almost like child support. Okay? They get a check.

He would get a check to help him take care of those kids. Then the money that is in the trust can be pulled out in addition to the income it creates if they're very ill and have a medical problem, if they wanted to buy a car, and if you wanted to pay for college. That's an example. You can have the money, do whatever you want, and you need a will and a trust that kicks into place upon your death. And so we've got Maggie's Trust, Maggie's Kids Trust, you name it, whatever you want to name it, and here's how it functions. And we're going to put Maggie's Kids Trust as the beneficiary of $300,000 of the $550,000.

And the other $250,000 goes to your current husband or something like that. That's what normally happens in these situations. You can do whatever you want to do. It's your money. Okay. But you can have a partial beneficiary going into the trust and a partial going to your husband. And that would be a fairly normal thing to do. But if you just look at it through the lens of who is counting on me to be

taking care of my income to be taken care of, and I want to help replace that with this $550,000. And in my mind, that's somewhat children and somewhat your current husband. And you can put that out however you want it. It can be 100 to him and 450 to them. I don't care. You just make up a number. I'm just trying to think of something that divides by three well.

That's all I was doing, but it's just a math thing. So, good question. Craig is with us in Nashville. Hi, Craig. How are you? Hi, Dave. How are you? Better than I deserve.

What's up? Hey, so my wife and I are getting ready to actually move up to Indianapolis here in a little bit. We've saved about $43,000. We've been listening to you for a long time, so we really appreciate it. We've saved about $43,000. We have no debt. I have about $25,000 in retirement. And we just signed for a $239,000 house. We were wondering, you know, my wife and I sat down and thought about it a lot. We felt like it was a good move. We're building a brand-new house rather than buying. So we're not going through realtor or anything like that. But we're wondering if we made a good decision.

We did sign up for a 30-year mortgage instead of a 15 like I would have liked, but I'd like your insight on it. I would never do more than a 15, and I would not have your 15-year payment be more than a fourth of your take-home pay. Sure. And if it fits that, then it fits the guidelines that we teach. Okay. That sounds good.

Our 30-year is definitely not going to be a fourth more than our take-home pay. I make about $90,000 a year, plus I have contract work that I do, so oftentimes make between $5,000 and $10,000 more from that contract work. But the 15 would probably be pushing it towards more like 30% rather than 25%. Yeah. Well, it's up to you. You get to do what you want to do. That's the guidelines that we teach.

I mean, 30% is not going to kill you, and probably your household income is going up to where by a couple years from now, it'll probably be at 25%. That's fine. The point of that guideline, Craig, is on the 15 years, hey, let's get this thing paid off, because all the data points on the millionaire study that we've done indicate a paid-off home is a big part of becoming a millionaire. And so we want to get your house paid off. We don't want to live in that thing with a debt forever.

Just don't, let's not take a forever mortgage here. And then the second thing is you don't want to be house poor where so much of your income is going to a house payment that you don't have a life. And it just sucks down your ability to do anything else. And, you know, that's the process you go through. So anyway, you can do the deal. I would not do it unless I put it on a 15-year. And even if it strains you a little bit for now,

but I'm guessing your income is probably on an upward trajectory. This is The Dave Ramsey Show. Okay, I need you to listen to this. Because one normal routine that everyone does can cause total chaos in your life. I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and every search you're doing online. It doesn't matter if you're on your cell or your laptop. They can see you visiting websites, streaming or downloading, uploading photos, files and more.

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A little bit of an upgrade there. Nikita is us in grand bend kansas hi nikita how are you i'm great now that i'm talking to you how are you better than i deserve how can i help okay so um stupidly about four years ago my husband and I entered into a timeshare. We got home and read the contract, and, of course, we were one day short of the 10-day take back, and we were back home in Kansas and not in Florida any longer. I have called and spoke with the timeshare exit that you recommend, and they said with the type of timeshare that we have, they were not able to help us at that time. We are getting ready. I've started reading a couple of your books in between work and all of that, but our biggest

thing we don't know what to do with or how to get rid of is our timeshare. Did Timeshare Exit Team have any suggestions on how to get rid of it if they couldn't take care of it? That's unusual. They can take care of most of it. Yeah, I know. They said to try back. It was a few months ago, and I have not called back to see if anything has changed since then.

But I guess at this point, we are so tired of paying our monthly fees and the yearly fee that we're at the point that we would rather just stop making our payments. But I guess my biggest question is, and that I can't get anybody to answer for me, is what could be the worst-case scenario if we stopped making those monthly payments? Well, technically, it's a contract you've signed. They could sue you on the contract. I mean, they could sue you. It's a debt.

It becomes a bad debt at that point. Yeah. They'll certainly report you to the credit bureau for sure at a minimum and harass you at a minimum. But past that, what will they do? I don't know how many of them actually follow through on a lawsuit. Do you know what it was about your particular timeshare that was unusual enough that Timeshare Exit Team couldn't handle it?

Did they tell you? They did. I don't recall. I was driving and listening to your podcast, and I was like, I heard the commercial. I'm like, I'm going to call them. So I didn't have anything to write it down with. So do you have a debt on it? Yeah, we do.

We are paying it as a monthly. Yeah yeah so what's the balance on the debt um we probably have about we bought it at 21 000 um probably so i know and their biggest thing you know the guy was good at what he did great salesman go back home, they'll refinance, you know, your family, but, you know, he was a great salesman. He was a liar. Yes. There's a difference. A great salesman is not a liar.

Okay. He was a slickster. Okay. I think you ought to call Timeshare Exit Team back again and ask them, and so you get a real handle on why they couldn't handle it. If they still can't handle it on why they couldn't handle it if they still can't handle it why they can't handle it and do they have any suggestions on what to do from this point um and you know try to figure it out from there but yeah not paying it you may be able you may get them when

the debt goes bad you may get them to settle with you at that point and let you out for a certain number of dollars. You will damage your credit in the process at a minimum. But you've got to decide from there what your steps are. But I think that's the exposure that you've got. And I'm with you. I think just continuing to pay it is probably not a plan I'm going to do. But I'm going to go back to Timeshare Exit Team and try to get, say, hey, guys, if you can't handle this, tell me why and what you think I should do

and see if they have any suggestions. And then if you have more trouble with that, give us a yell back, and we'll see if we can't get some answers for you. It's very unusual. They can take care of most of them. That's the first one I've ever heard. They couldn't, so I'm shocked. But anyway, Charlie is with us in Salt Lake City.

Hi, Charlie. How are you? I'm doing all right. How are you? Better than I deserve. What's up? So I'm in the process of becoming a single mom and just slightly terrified of how to afford living with two small children on just my income because it's, you know, half of what we usually have. So you're going through a divorce.

Mm-hmm. I'm sorry. Okay. So what do you make? Hello? Lost her. Okay. Oh, sad. Drew is in chattanooga hi drew how are you hi dave i'm very good how are you better than i deserve what's up so i have a quick question for you i'm a college student and i listen to your show i'm going

through school without any debt uh i have a paid-for car, all that kind of stuff. I like what you talk about a lot. But I always hear you talking about where do you see yourself in 10 years or so? And I always want to see myself doing something similar to what you're doing, helping people be financially stable and making better money decisions. I don't know how to make a career out of that, though. I'm a double major in accounting and finance, and I'm just looking for some advice.

What would you do if you were in my position? The most lucrative side of the business, and it does still have the ability for you to coach people, would be to be an investment advisor, to go into the side where you're selling mutual funds and you're helping people build wealth on that side of the coin. And the money that you would make off of those sales and off of working with those families would allow you to give them coaching on things that don't make you money. In other words, you can coach a family about getting out of debt because that leads them to be able to invest with you. You can coach a family about being on a budget because it leads them to invest or to be able to do that with you.

We are not in any of those businesses here, but that's the point of entry for a young person coming out of school with an accounting degree, a finance degree, that most people would follow. I mean, you can open up a shop doing financial coaching, fee only, but it's a much tougher road to make a living doing that. And, I mean, we make a little money around here on, um, and, uh, I mean, we make a little money around here on our one-on-one coaching, but not,

I mean, it's, it's a 10th of 1% of our revenues or something like that. It's, it's just not there. And even when I was doing one-on-one coaching back in the day, um, this is when I made the least money in my life.

So, uh, I mean, you can, you make 50, $60,000 a year doing it. But, um um i quickly added speaking and writing books and stuff to the equation just to get an income and and i came

up with financial university so i could do a one-to-many business model instead of a one-to-one business model and if i can collect you know ten dollars from a thousand people i'll make more than if i collect a hundred dollars from, that kind of a thing. And that's kind of how some of this business model around here evolved was a survival mechanism for us. But anyway, you can come out and just do coaching. And we have an actual coaching program here that you can take online, and lots of people do that.

And it's not unusual for cpa to do that and add it to the tools in his belt and he's a cpa and a financial coach and uh you know he's a this and of that and or she's a this and of that and so um but the uh you know our smart investor pros um you know that that business of uh helping helping people with investments is the side that a lot of people in your shoes would move towards as a first step. Now, sometimes you can use that as a, you know, you build a book of business over the years and you can expand into other things. But it's not a bad first step at all. And it's a legitimate way to, with integrity, make a good living and help a lot of people in the process.

This is the Dave Ramsey Show. Hey, this is Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors. Some of these guys are just scum. But then there are the collectors that are just plain crooks. These are the guys that take it a step further and they violate the Federal Fair Debt Collection Practices Act on a daily basis. They're breaking the law and they need to be stopped.

The truth is, debt collection is the most abusive, out-of-control industry in America today. But you don't have to put up with it. If you have collectors calling you multiple times a day, calling you at work after you've asked them not to, cursing or threatening you in any way, then you need to visit CollectionBully.com. These folks will connect you with an attorney who I know can help you. These attorneys know how to stop collection agencies from bullying and threatening you anymore. CollectionBully.com. Go to CollectionBully.com today.

That's CollectionBully.com. Go to CollectionBully.com today. That's CollectionBully.com. In the lobby of Ramsey Solutions, Tyler and Crystal are with us. Hey guys, how are you? Great, Dave. Welcome, welcome. Where are you guys from? Oklahoma City. Awesome. Good to have you. And here to do a debt-free screen. Absolutely.

Love it. How much have you paid off? We've paid off about $50,000 in about 10 months. Good for you. And your range of income during that time? We started out with about $38,000 and we're looking to get about 100 this year whoa nice increase she got a job oh there it is okay so what do you do crystal i'm a clinical dietitian there you go and what about you tyler i'm a welder very good good okay well about doubled you guys income plus some And you've been working extra, I assume, as well. Yes.

What kind of debt was the $50,000? Well, I totaled her car, so I bought her a car with debt and then her student loans as well. Okay. All right. And so how much did you owe on the student loans? $43,000. Okay. And then $7,000 on a car?

Mm-hmm. Okay. Cool. So what happened 10 months ago that set you guys ablaze? Because you were definitely on fire. Well, Ashley and Ethan, they invited us to our financial peace class and kind of got our ball rolling. Oh, okay. So I had heard of you, and I had actually even bought some of your stuff.

And we got it from Amazon, and I opened it and stuck it on the shelf. And then never touched it again. Of course. So whenever they asked us to go to that class with them or host a class, we thought it was a good idea. And once we were in it, it just made so much sense. For those of you that weren't with us last hour, their friends did their debt-free scream in the other hour. And you guys knew them from where? Church camp.

From church camp. Growing up. Growing up. Oh, known them a long time. Yes. Okay, since kids. Okay. And so they call up and go, we're doing a financial peace class.

You're in. Yes. And you went, okay. Yes. Okay. Pretty much. So you kind of went, the stuff's on the shelf. We already knew this, but we're going to go over there for our friends.

And then when you went into the class, I mean, it sounds like you're kind of medium or, well, we'll go check it out. Or were you just like ready? I think we were ready. We knew that we didn't want debt. We knew no credit cards. We never had a credit card. So we just, we knew that we were about to start our lives like I was about to get my job. And we didn't want to make a whole bunch of mistakes that I've seen other people make.

Gotcha. How long have you all been married? Five years today. Okay. All right. So you were kind of getting things rolling. You got married a little while, and now you got the job. And so we don't want to go in any further.

We've already made a couple mistakes, and we've got to clean that up. Great. So what was the big takeaway from the financial peace class that enabled you to do this in 10 months? What's the secret to getting out of debt? Just putting us on a budget was the biggest thing in mind that helped us to figure out actually where our money was going instead of just guessing where it was going. Right. And I would say contentment because, you know, I was just finishing school and, you know, getting that first paycheck after.

And I, you know, wanted to go buy all these things. Sure. Just being content and having to wait for all that stuff. Ten whole months. Yeah. Now you can do anything you want, right? Yeah. Well done. Very whole months. Yeah. Now you can do anything you want, right? Yeah. Well done.

Very well done. Congratulations. So what was the hardest part for y'all? The hardest part for me, my dad passed away back in 2009, and he, through Workman's Comp, left us a large chunk of money, and I was trying to save that up for a down payment for a house, but we ended up throwing that, and it knocked out about half of our debt that we had oh so like 25 grand yeah wow yeah releasing that but that's that's a good thing to do in his memory though it was he would be

proud of that wouldn't he yes yeah that's one of the things I always think about from an inheritance am I doing something with it that would make that person smile from heaven right and I think he would be yeah because it sets you up now. You can save up easy for that payment, right? Oh, yeah, definitely. You're making $100,000. You've got no payments, right? Right.

Life is good. Wow, very cool. How old are you two? I'm 27. 25. Okay. Well done, you guys. That's fun.

Very, very, very well done. How does it feel to not have any payments? It feels great. Yes. It feels so great. I mean, I never really even had a student loan payment because when we started, I was in that grace period, and we were throwing thousands of dollars at it every month, so I never even got like a bill for it.

Wow. Did people think you were crazy or cheer you on? We've had a really good support group with our friends and family, but then we just had people who didn't seem to understand what we were doing or understand why we were doing it. Yeah, they think you're crazy. Yeah, they do. Yeah. If broke people are making fun of your financial plan, you're right on track, right?

Yeah. That's a good thing. Well done, you guys. Very well done. I'm proud of you. Proud of you. Very cool. Very cool.

All right, we've got a copy of Chris Hogan's book, Retire Inspired, for you. That's the next chapter in your story, to be millionaires and outrageously generous as you go along, okay? Absolutely. So I just want to say that it's been five years with this man, and he has been working 50 to 60-hour weeks, and he has a very physically demanding job. I am so proud of him. Amen. Very good. Hey, you got a man to work job. I am so proud of him. Amen. Very good.

Hey, you got a man to work hard. You got a good man. That's a good thing. I'm glad you're proud of him. We are too. Well done. Very well done. Tyler and Krista, Oklahoma City, $50,000 paid off in 10 months, making $38,000, now making $100,000.

Boom! Count it down. Let's hear a debt-free scream. Three, now making 100. Boom! Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! This is how it's done right here. Oh, man. I love it.

Wow. Congratulations, you guys. Very, very well done. Well, Father's Day is here, isn't it? We've got lots of gifts starting as low as $12.99 at DaveRamsey.com. You can get Dad the perfect book, the Total Money Makeover. You can get the Ramsey Book Club, our monthly membership for personal growth and inspiration. We've got the Adventure Pack, our best-selling kids bundle.

Right now it's 63% off. And don't forget to get Dad the perfect gift. Entree leadership, maybe he's in leadership, or maybe he wants to be. Check it all out at DaveRamsey.com or call us at 888-22-PIECE, 888-227-3223. Tanya's on Facebook. Dave, should I even have life insurance? My children are grown. I'm debt-free with money saved for emergencies.

My husband has enough money in savings to cover burial expenses. Well, Tanya, if anyone counts on your income to live the life that they're currently living, you would replace your income with the investment return of a life insurance investment. I mean, you die, they leave a lump sum, you invest it, the investment return off of that should replace your income. That's what life insurance is for. It sounds like you're reaching the point, if you haven't already reached the point, of being what we call self-insured. When the kids are grown and gone, you're debt-free, and you have a pile of money, and you die, well, your spouse is fine. And if you're 54 years old, and the kids are grown and gone, and you have $700,000 in your retirement account, and you have no debt at all, house is paid off, everything's paid off, boom.

You know, you're good. The kids are raised. You know, you've got an investment. have no debt at all. House is paid off. Everything's paid off. Boom. You know, you're good. The kids are raised. You know, you've got an investment. You're debt-free. This is called financial planning. And you become, you know, self-insured over this period of time by doing these things. So enough money in savings to cover burial expenses, that doesn't sound like he's got enough, Tanya, in there to retire on.

It doesn't sound like there's hundreds of thousands of dollars laying around. If you've got an emergency fund, you're debt-free, and you still have a big home mortgage, and you're counting on your income to help pay that home mortgage, just because he's got enough to plant you doesn't mean he can pay that mortgage. So, you know, only if there is a large, large nest egg and the house is paid off, then, yes, you would be self-insured at that point. But if you're basically broke and have a mortgage and he's counting on your income as part of that equation to do that, no, you probably need some life insurance still. And we recommend, generally speaking, if you want to replace your income, just take your

income times 10 or 12 and you about got it. And the way that works is, let's say you're making $50,000, 10 times that would be $500,000, 12 times that would be $600,000. So if you invest $500,000 or $600,000, you make around 10% on it, you're going to make $50,000 on $500,000 invested. And that replaces your income that dies when you die. That's where the 10 to 12 times comes from. We recommend 15 to 20-year level term for most families, but it depends on the situation.

You may only need it for a few more years until you finish rounding out some of these things we're talking about. You may only need a 10-year policy, something like that. This is the Dave Ramsey Show. I talk about the importance of term life insurance all the time. But how many of you actually have it or have the right amount? I know you think this is a hassle. You think it's too expensive or that you have plenty of time to buy it later

or that you're afraid of making a mistake so you do nothing. And I end up getting calls all the time trying to help families through the financial mess left behind. Listen, if you're married, if you have a family, a mortgage, or other debt, people relying on your income, then you need term life insurance. And the reality is it's not a hassle. It's actually pretty simple. Term life is not expensive and the rates have never been lower. You can lock in rates for 15, 20, even 30 years and then focus on getting out of debt and growing your savings. No mistake there.

Call Zander Insurance at 800-356-4282 or go to zander.com and make sure your family is protected. Maybe I won't have to take those heartbreaking phone calls as often. Our scripture today, Isaiah 40 and 29. He gives strength to the weary and increases the power of the weak. General George S. Patton said, Success is how high you bounce when you hit bottom. Jordan is with us in Fort Worth, Texas. Hi, Jordan.

How are you? Doing good, Dave. How are you? Thanks for taking my call. Sure. What's up? So we have kind of a situation here. My wife and I recently got married

this last November, and she has about $250,000 kind of a situation here. My wife and I recently got married this last November, and she has about $250,000 in student loans from a PhD program, which she is finishing up, graduating next year. They're in deferment right now. And then we have about $14,000 in credit card debt on top of that. and I'm just trying to figure out what the best way to approach this is. I sure hope she's planning to make some money. Me too. She wants to establish a private practice eventually down the road and then go into college, like be a professor somewhere.

A Ph.D. in what uh psychology so she's a licensed uh professional counselor um she works in a a psych hospital right now wow oh okay uh what do you make uh i make 55 she makes the route the same so we pull in 110 together good lord um all right well what we've got to do is we have to start working on there there has to be some mathematical uh payoff for this phd that beats 55 000 um maybe 155,000. And that's a professorship and private practice combined or something like that. But in pursuit of her Ph.D., she has made a financial disaster. And the only way to solve that is income.

She does have a 10-year forgiveness program. I know other people have mentioned that in the past, and you said, you know, why wait 10 years when you can pay it off now? But once you make 10 payments for 10 years, I'm sorry, payments for 10 years, it'll forgive the rest. I know how it works. But, I mean, why would you want to be in debt for 10 years? I mean, I agree.

I mean, why would you want to be in debt for 10 years? I mean, I agree. I mean, I totally agree. We do have a house that's worth $165,000 roughly, and we only owe $100,000 on it. So what I was thinking is, like, maybe try to sell it and rent and use that $65,000 in equity to at least knock out a quarter of it. Yeah. That would be my last resort. My first choice is for her to do something that maybe is not necessarily what her first choice is.

Hopefully it's her first choice, but do the thing that she can do with a Ph.D. that makes her the most possible money. Yeah. And pay a price for a little while to clean this mess up if it's if the price is discomfort or it's not self-actualization will so be it uh because you've got a tremendous hole and the only way you know what i always look at is just the shovel to hole ratio jordan and the shovel is your income your household income is 110110,000. I need it to be $200,000 to make this work because the whole is $250,000. And so if you had a $200,000 income, you can pay this off in three or four years, and you'll be done.

But that may be doing something she doesn't necessarily deem as wonderful, but the only other option is something that's not wonderful, and that's being $250,000 in debt. And so I do not know what a professorship pays in that setting, but my guess would be north of $100,000. And what has she got to do to get to land that? And you can simultaneously, in most cases, do private practice. And I would do anything I can do to create money for a short period of time the more money you create in the shortest possible

period of time the faster you're free and so the whole idea here is to be free and then you go do whatever you want to do with this wonderful degree and so forth but not much thought was put into the cost of the degree going in. Now, so we're going to have to put a whole lot of thought into the income produced by the degree to clean the mess up. Daniel is with us in Philadelphia. Hi, Daniel. Welcome to the Dave Ramsey Show. Hi, Dave.

I'm well. How are you? Better than I deserve. What's up? Well, I did something really stupid. I, uh, two years ago, I built a house, and I didn't have the money, and I built it using credit card and personal loan debt. Uh, I ran out of money before I was able to finish it, and I got a bank to give me two different loans at Parmon

and a home equity line of credit to pay off the debt that I had. Now, I don't have enough money to finish it, and I can't refinance, and that HELOC loan is going to pop, per se, in a couple years. And I don't know if I need to sell my house now to get out of this. So obviously you're not living in it. I am living in it. The kitchen is not complete, and the bathroom isn't complete,

which is just enough for us to get by. So you passed codes enough to move into it? Yes. Really? Okay. So what's your household income? $50,000 a year. And what does it take to finish it? It probably needs another $15,000 a year. And what does it take to finish it? It probably needs another $15,000.

Okay. All right. And does your wife work outside the home? She has a part-time job at the post office. How many children do you have? Three. Okay. At what ages?

Four, two, and two months. And they're living in a home that's basically incomplete? That's correct. Okay. All right. Well, the good news is you can make around $1,500 a month working five nights a week delivering pizzas, and you need to go do that or something like that because you need $15,000, and you need to go earn it as fast as you can working six part-time jobs.

I don't want to be away from my kids. Your kids are living in a dump. You need to go earn it as fast as you can working six part-time jobs. I don't want to be away from my kids. Your kids are living in a dump. Go get away from your kids and make some money right now and clean this mess up. But $15,000 is gettable. If it was $150,000, I wouldn't know how to tell you how to fix it other than maybe sell it at a deep discount, which you could do. You could sell it to an investor and give it away, basically. What do you owe on it?

$140,000. Good do you owe on it? $140. Good Lord. In a home equity loan? Oh, you moved all the credit cards and everything onto the home equity loan, didn't you? That's right. Okay. Yes. So what would you think it would sell for like it sits?

As it sits, I talked to a realtor. He thinks we could sell it for $155, and that would be enough to get me out and get a change in cut. Okay. Well, that's not a bad plan either if you want to do that. So you've got to choose between do you want to give up a year of part-time jobs on steroids and finish it up and make more money on it, or do you want to just sell it as is and call it a day and go rent until you get the rest of your finances straightened out

and save up a good down payment and do it right this time? Right. Either direction is fine with me. I probably would have a tendency to tap out and just sell it and move and just go, well, this was a bad idea, and I got out of it with my skin intact, which is a minor miracle, but I can get my kids into a rental that actually has a freaking kitchen. And let's move into that and take care of my family with a rental, and then we'll start

saving, make sure we're debt-free, make sure we have an emergency fund in place, and then start saving a down payment, and let's do this right this time and just purchase a home that is actually fully functional, and let's not get in the rehab business or building business again, certainly with credit cards so that yeah i'm probably just tapping out if i'm you the good news is you can get out of this so let's just get out of it whatever dream you had of making money on it's gone um that's what i would do if you want to do the other thing and that's work you know work an extra job every night for a year and that gives you the 15 000 to finish it you probably sell the house for 200 grand then or you can stay in the house

if you want to and finish it but either you know which one do you want to do which one does your family want to do but i have a tendency to like to see my mistakes in my rearview mirror instead of out my windshield and so i have a tendency to cut bait quicker. But that's just a personality thing with me. I don't want to look at it anymore. I feel stupid every time I'm on the driveway. I want to be done with it. And I'm going to tap out. I'm going to sell it.

But you do whatever you want to do. I'm not saying either way is right or wrong, but you can either do one or the other. You cannot sit there in status quo and wait on this train to run over you. Hope that helps you, ma'am. Thanks for calling in. That puts this hour of the Dave Ramsey Show in the books. We will be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. Are high healthcare costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your healthcare costs?

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