The Ramsey Show - App - How to Become Debt Free With Scorched Earth Living (Hour 1)

Episode Date: July 12, 2018

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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 am Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It is a free call, 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Summer in Baton Rouge, Louisiana.

Hi, Summer. How are you? Hi, I'm good. I'm very excited. Today's my birthday, so I'm very excited to be able to talk with you and get you to help us figure out our problems. Happy birthday. Thank you. So basically, I picked up Total Money Makeover about a month ago and read it, loved it, shared it with my husband. We realized how stupid we've been for the past 10 years that we've been married, realizing we need to change everything about the way we do things in our life.

He got on board. We've been listening to as many shows as we can and, you know, everything on YouTube. So we're totally excited. And yesterday he wakes up and decides, let's sell our house to pay off all of our debt, which, you know, I'm not totally opposed to, but we've had four houses in the past eight years. We have five children. So it's a very, you know, overwhelming process to move. And I'm not really sure.

It is the last thing I tell people to do. And that is what I told him because you're like a friend in our house. We're like, what does Dave Ramsey say? What does Dave Ramsey say? So, you know, I told him, well, Dave Ramsey says there's a lot of things to do. So let me ask you a couple of questions. What's the house worth um 345 and what do you owe on it 245 okay how much are your payments um 2001

and it's a 19 year fixed loan okay and uh what is your take-home pay that is one of the variables he owns his own business what is your average annual income last year was 130 and this year it's some months it's nothing and some months it might be 15 000 but he actually signed for a new job today with a base of 96 000 and then he's able to make up to 115 commission a year in addition to his other stuff or well in the 96 is the base and then one that's a whole that's his full-time gig now that well that right but he knows that he still has to somehow do something with his other company whether it's get it ready to sell or what but they're not making profit for him to be able to take home money uh right now okay got it all right and how much debt do you have not counting your

house a hundred thousand okay on what okay well some stupid cars which were upside down on one of them how much do you owe on the stupid cars individually 42,000 and 10,000 okay no you don't need to sell your house you need to sell the 42 $42,000 car. How do we do that? And I've listened to several things, ideas that you've had. Our credit is shot. It's upside down $12,000. Have you pulled out the, who says it's $12,000 upside down? Who says it's worth $30,000?

I went to Kelley Blue Book. That was the private sale. Okay. Right. And then I looked at my statements. $42,000 is our balance. What kind of car? A Nissan Armada.

And who's it owed to? I think Nissan. Is that a? Yeah. Yeah, Nissan Credit. Yeah. All right. Well, you put $12,000, which is the amount you're upside down, in your debt snowball.

Okay. To save up, to write the check, to to sell this car you don't have the ability to borrow it because your credit shot and you don't have anything to sell do you other than your house other than your house yeah right your husband is really entrepreneurial very and i know that because i'm really entrepreneurial and most of us that are entrepreneurial are ADD. We have an idea about every 20 seconds. That is him.

Anything that's shiny distracts us. Yeah, that is him. We're like a bass, right? He's a great person, but his ideas drive me crazy because I don't know what he's got. And this is his latest idea to sell the house. Exactly. He's already got a house he wants to rent. It was a drive-by idea.

Kill it. It's a bad idea. Okay? Okay, good. He'll move on to another idea tomorrow. Don't worry about it. Yeah, it's just a bad idea. He's just a quick-fix guy.

We all jump on it. We see a problem, we jump on it, and that's what he's trying to do. So his heart's in the right places. Methodology is bad. Okay? So put the $12,000 that you're upside down in your debt snowball. How many debts do you have smaller than that, than $12,000? How many?

Oh, my gosh. Like $27,000. Now, $50,000 of that debt is taxes that he was not getting taken out of his check because his tax guy said, you know, oh, you own the business, and, you know, we'll figure it out, and then we realized we need to keep everything we have, so we couldn't put any savings for Social Security at the end of the year. Mr. Entrepreneur needs to go make a bunch of money,

because you all have done a bunch of stupid stuff. I mean, this car and those taxes together, that's $92,000 of your problem right there. Right, right. And they're both a big chunk. That's $92,000 of the $100, the 100 000 in debt yeah you only have 8 000 and other stuff right okay cool well you need to get with the irs and put them on as little a payment as you can get by with you need a new tax man fire that idiot that told you not to pay your taxes right so go on daveremsey.com and click on elp for taxes get yourself on an installment plan

with the irs so they don't come over to your house and start picking up stuff because they will, including your husband. And so we need to not do that. And we need to get a plan going here to get the $12,000 in place to get rid of the stupid van. And that's your car. That's the mommy steroid mobile. Right. That Nissan van is a wonderful van, but it's not in your price range

and so we got to get rid of that and then we attack the irs full force when the other stuff's gone and really lay into them and get rid of them it's going to take you two years of dramatic intense focused and your husband the good news about this guy is he is not scared of work right he is a worker i can tell by just listening about him and he just a little he just needs to get really focused and really intense and really goal oriented and i want him to go make the most money he's ever made in his life in the next two years so we can clean this up in two years right all of it and keep your and keep your house your house is not your problem so should i just keep paying off smallest to largest and then get the 12 000 will be second

to last and then taxes just throw everything at that yep okay exactly because you're gonna knock that 8 000 out real quick right right 12 000 is going to be right there on the horizon by christmas the car is gone right okay and and you're down to the irs so we got rid of 42 000 of your 100 000 in that part of the discussion you're following that right right that's a big deal so and i'm okay i've now listen if the world caves in and the irs the kgb standing at your door trying to haul your kids off or something, that's when you sell the house. Right. Because you can lean on that $100,000 worth of equity and get rid of these guys if you want. Now, but if your credit's not destroyed, you might look at a second mortgage to take out the IRS.

Okay. I know normally you don't recommend doing that. No, but you've already got the debt. And believe me, the IRS has a second mortgage. If they want to place a lien on the house, it's done. Just like that. They have unlimited freaking power. And so rather than them having a lien on your house because they get nasty with you, I'd rather you get them out of your life and take a second.

And you might even get a second for $62,000 and knock out the $12,000 on the car and the IRS all on that second, and then go back and clean that up and your debt snowball. But that gets the pressure of the car payment and the IRS out from around your neck, and that might be advisable here. You've already got the debt. All I'm doing is restructuring it. I'm not having you borrow money. I'm having you move the debt. And in this case, I'll probably do that for us all day. Okay, I need you to listen to this.

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Marissa is with us in Milwaukee. Hi, Marissa. How are you? I'm doing good, Dave. How are you? Better than I deserve. What's up in your world? Well, Dave, my husband and I have $130,000 in student loan

debt. And I just started listening to your podcast, and we're in the process of doing our budgeting. And it hasn't worked the last two months, but we're getting better each month. But I had an idea, and I wanted to run it past you to see if it makes sense. Part of the loans that I have are like a chunk of $75,000 and the total monthly amount due comes out to $666 a month. The other half are a lot of really, really small loans that are tied into like one or two bigger loans. What I was hoping to do was maybe to defer, and I don't know anything about loan deferment, which is utterly what my question is. If we could defer the larger loan of 666 and take that amount that I'm paying towards that every month,

which is towards the end of my debt snowball, to go ahead and pay off these smaller loans quicker, or if that even is something that would make sense. It won't change the end result one day. Oh. Because the deferment does not defer the interest. Oh. because the deferment does not defer the interest. And so, in other words, let's say you don't pay any payment because it's in deferment, and the interest, I'll just make up a number, is $500 a month.

That's freeing up $666, of which $166 would have been going down on the debt, and $500 would have been going to interest, right? Right. In my example. And you're going to put that on the other debt instead, but it's going to build up the $500 over here. So you're just trading hands. You're just swapping hands.

That's what I was afraid of. Yeah, you're just going from the right pocket to the left pocket. And, I mean, it does feel better because you're going to knock out those little ones post-haste if you want to do it, if there's no penalties of any kind for deferment. Now, some of them put late charges and penalties on in addition to the interest, in which case you'd be losing ground by that amount were you to do that. And I wouldn't do that. But if you want to do it just to be able to kind of feel like some progress is there, that's fine. What's your household income?

It's $89,000. Oh, that's good news. What other debts have you got? That is really it. We have our mortgage, and we owe $180,000 on our house. Nothing on cars? No. Okay. And you just started Nothing on cars? No. Okay.

And you just started working on this? Yeah, just a few months ago. What are your degrees in? What was so stinking expensive? We both went to private school, and our degrees are not that great, to tell you the truth. What are they in? I have a business administration degree with a marketing emphasis, and my husband has a psychology degree. A business marketing degree shouldn a marketing emphasis, and my husband has a psychology degree.

A business marketing degree shouldn't be bad. Are you working? Oh, yeah. Oh, yeah. I'm working, and I also have a couple of side hustles for marketing. So I'm trying to see if I can do anything else on top of it. Yeah, anything you can do to create some extra oomph to knock this out. And here's the thing to give you hope, okay?

You just start doing big number math, I call it, like sixth grade math, and say, okay, 130. If we did it in two years, that would be $65,000 a year. That's probably not going to work. If we do it in three years, though, Mike can do that. That's like $35,000 a year. $40,000 a year, I'm sorry. And that means living on beans and rice, rice and beans.

So, you know, and if it doesn't quite make that, maybe not three, but maybe three and a half, but somewhere in there, once you lean into it, but it's going to mean during those years that you have absolutely no life. Right. Scorched earth. I mean, no restaurants, no vacations. Christmas is a freaking craft. I mean, you are going to be getting out of debt because you've got a mess,

and it's overwhelming emotionally. Look at it right now, isn't it? It sure is. Yeah, you need to feel some progress and see some progress. But when I do some big number math like that, I can see your way out of this, but it's going to be a long three years. Okay. Really tough three years. You're going to be doing stuff that years. Okay. Really tough three years.

You're going to be doing stuff that you're causing your family to make fun of you. Right. They already do. Well, you're going to have to crank that up even more, you know. So have you guys been through Financial Peace University yet? No, we have not. Okay. Would you two go through as my guest while you're doing this?

Because I think it will help you with the hope factor with what you're facing. Absolutely. That would be wonderful. You call me back if you need anything while you're fighting through this. You got it. You can do it. But it's going to be tough. It'll be worth it.

You can do it. But it's going to be tough. Hold on. Kelly will pick up, and we'll get you guys in the class. That'll help give you that push that you need as you're going out there to do this. Casey's with us in Minneapolis. Hi, Casey. How are you? I am a super duper. How about you, Dave? Just the same. How can I help? Well, I currently have a roommate and my plan is to live on my own soon. And I will be debt free in the fall. So I figure that's a good time to live on my own. And I'm currently using the every dollar to figure out my budget.

And for the kind of apartment rent that I'd like to be paying on my own, the way I've budgeted it, I would have maybe like $500 to put away into my savings every month. And I think that's my biggest concern is just making sure I have enough savings, I have enough in my emergency fund to keep things afloat. I've asked friends if $500,000 feels like a good amount, like what they experienced when they were single and living on their own, and they've all said the same thing. Like, I didn't keep track of those things, and, you know,

I'd never really thought about that, so I don't know. What is your income? $45,000 a year. How old are you? I'm 29. Okay. And real estate-wise, housing-wise, where do you want to be in three years? I mean, I'd be happy renting for as long as I can.

I would like to own a home at some point. Okay. And are you debt-free, you said, by the fall? I will be probably in about October or November. Okay. All right. Because here's the thing. If you're working towards something or saving towards something in particular

and renting is your patience while you're trying to wait to buy a house, that kind of a thing, then I start to think of, well, is a roommate something I tolerate for a while longer in order to, if buying a house is my big thing, I'm 29, I want to buy a house in a year, then, you know, can I buy a house a year faster if I keep a roommate? Obviously, you kept one until you got out of debt to hit that goal, right? And so I don't know that, you know, living on your own with no roommate isn't necessarily that big a milestone is, I guess, my point. But it has to do with what you're saving towards,

and is it worth it to put up with a roommate? Maybe not. Maybe you've had bad roommate experiences, and you're like, heck with it. I'm not doing it. That's cool if you want to do that. But, you know, if you could pick up another $500,000, and instead of saving $6,000 a year, save $12,000 a year, and so you're buying a house in 18 months instead of 36 months,

is it worth that? Because this is not renting, you know, and living on your own should not be your end game. That's my point. It ought to be a stepping stone to what? And you think that through, and then is it worth it to put up with a roommate? If you say no, that's cool, but you can look at the numbers on that. It was worth it to put up with a roommate, for instance, to get out of debt.

So you did make that decision. And then decide from there, you know, how much more of this you want to do. But you're kind of presenting it to me as endgame to finally get to live without a roommate as a renter, and I don't know that that's necessarily a really great endgame. It's okay if you want to do it, but I would want to have a bigger endgame than that, a bigger goal that I'm reaching towards. Thanks for the call. Open phones at 888-825-5225.

Summer is here. It is time to take control of your money. You heard what she said she was doing. She was living on the every dollar budget, didn't she? Well, millions and millions and millions of people are living on the every dollar budget. It's free. Everydollar.com. You can download the app for your iPhone or your Android.

And Stephanie and our other every dollar budgeters who are winning with money are out there. She paid off all her credit card debt and her car using EveryDollar. Check it out. It's free. Make July the month that you take control of your money. EveryDollar.com. This is the Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance.

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send you to Zander Insurance. They've been helping my listeners find the right plans at the lowest cost for almost 20 years. Call 800-356-1780 or visit zander.com and compare online. That's 800-356-1780 or Zander.com. In the lobby of Ramsey Solutions, Marius and Karen are with us. Hey, hey, hey, guys. How y'all doing? Great. Hey, Dave. How you doing?

Better than I deserve. Who'd you bring with you? This is Rachel. Welcome, Rachel. Good to have you. Very cool. Where are you guys from? Marietta, Georgia.

Welcome to Nashville. You're here to do a debt-free scream. Absolutely. How much have you paid off? We paid off $140,000 in 10 1⁄2 years. Wow, good. And that was our house. House and everything.

House and everything. Looking at weird people. Zero debt of any kind. Yes, we basically were living debt-free about 26 years without any credit cards or anything else except for our house. Okay. And then just reached over 10 1� a half years ago and started on this. Absolutely. So what's your range of income during that time?

Around $85,000 to $130,000. Okay. And what do you guys do for a living? I'm a working capital solutions advisor. And I'm a music pastor in Atlanta. Oh, cool. For who? For Life Church in Smyrna.

Okay. Good. Excellent. Good for you guys. So what's this house worth? Just under $400,000. Way to go. How fun.

And you don't even have a house payment. How weird are you people? We are very weird. Absolutely. My daughter says we're weird all the time. It's like a family brand. It is. It is at the Ramsey House.

I'll just tell you. We're proud of it. We're proud of Weirdness. Good for you guys. Very cool. So what put you on this journey? What made you think you could actually live with no payments, not even a mortgage 10 and a half years ago? Well, we just came off the heels of an adoption, an international adoption.

For Rachel. For Rachel. She's from St. Petersburg, Russia, originally. And we also then moved from St. Louis to Atlanta and heard you on the radio. I thought you were kind of a southern Bruce Williams. And I also had your book. Bruce might not like that, but I'll take it as a compliment. I'm a Bruce Williams fan.

We picked up your book a couple years prior to that, and I'm thinking this must be the same guy that we're listening to. And on Fridays, you had your debt-free scream, and I really wanted to do that, but realized that we needed to pay off that $140,000. So we started paying it down, and in fall of 2012, I was told that I was going to lose my job. And the good news on that, we had gone through Financial Peace University, and we were also coordinators at the time. We had saved up about nine months for our emergency fund.

So that carried us through for the whole year that I had no job at all. Wow. So after getting a job back, I didn't want to be in that situation again. No. There's no way we wanted to face that. So with intensity, we paid off $86,000 in three years. Whoa! Okay.

So a little curve on the end of this deal. That's right. That's right. Exactly right. But it's like, yeah, I've had enough of this. We're done. No more. We're done.

We're cleaning it out fast. We're done. Man, you leaned in. We did. That's amazing We're done. No more. We're done. We're cleaning it out fast. We're done. That's right. Man, you leaned in. We did. That's amazing. Well done. Well done.

So now that you've been a coordinator and you've lived through all of these things, what do you tell people the key to getting out of debt is? The budget is a key, but it's also having the intensity. You have to see yourself through it. I mean, you need to know that you're able to accomplish that and set that as your goal and work towards it. That's your priority. Every day you're waking up and saying, that's my priority, that's where I want to go. It's almost like losing weight. It's the same concept last fall when I was teaching the class was, while they were going through their getting out of their debt, the class I had, it was also

a matter of saying, I'm going through the same thing by trying to lose weight. My goal was to lose about 65 pounds by February, and I was able to do that. Wow. Congratulations. Thank you. Thank you. Very neat. Karen, what do you tell people the key to getting out of debt is?

Well, I think you just have to choose to make good decisions. And I think we started doing that right after we first got married. We've been married 27 years, and we got a little nest egg from people for our wedding, and I was brought up very poor, and that little nest egg meant everything to me. It was just $2,000 or $3,000, but it was like I felt rich because I had it. I'd never had anything. And Maria said to me, we need to take that money and we need to apply it towards your car loan so we can get the car loan paid off.

And I said, what are you talking about? No, not my mister. No, this is my security. So he said, no, but here it is. You're losing this much money and interest and all that kind of thing. And I said, okay, I married this guy. I got to trust him, right? So he said, do it.

And we threw that money towards that car payment. And since that time, we've not had any car payments of any kind for 27 years wow and so i think you just have to make one step and take the next step take the next step with the idea that we don't want to have that hanging over our head so when he came home after getting the new job but had y'all had the scare of him being unemployed and said we're're going to turn the heat up. What'd you say? I said, let's do it. Let's do it.

Game on. Yeah. Because I didn't want to have that feeling of, oh my goodness, what are we going to do if, you know, we went through that once and we were okay because we'd saved the money, but I didn't want to feel uncertain. So how does it feel now that you don't have a single payment in the entire world? Great to me because I feel like we can do so much more with the money we were giving somebody else. Now we can use it for Rachel's future, and it's a legacy we're handing off to her.

Plus, we just love to give money away. We love to do that, and now we can. We can do it more towards people who really need it. Very cool. Yeah. Well, congratulations, you guys. very proud of you thank you well done and thanks for coordinating a financial peace university class that means a lot to those folks going through the class absolutely makes things happen so we've got a copy of chris hogan's book for you as always retire inspired

and that's the next chapter in your story to be millionaires and outrageously generous along the way because you love to give. That's right. There you go. That's exactly how it works. All right. It's Marius and Karen and Rachel from Atlanta, Marietta, Georgia. $140,000 paid off in 10 and a half years.

House and everything, baby. Count it down. Let's hear a debt-free scream. Three, two, one. We're dead free! Well done! That's how you do it right there, man. Just like that.

Boom. I love it. Love it, love it, love it. Very, very well done. Joel is with us in Detroit, Michigan. Hi, Joel. How are you? I'm better than I deserve, Dave.

How are you? Just the same. How can I help? Well, I'm 22. I'm starting school again in August, and I'm quite forward-thinking and savvy about starting to save for retirement and get into the stock market. And there's these apps out there called, there's like Acorns and Stash, and they round up your transactions from your debit card and invest that in the stock market. And I was wondering what your thoughts were on that, and if that's something wise that I could be doing to at least get started rolling into that.

It's okay. The thing about it, I mean, they're not doing anything wrong nothing i would say oh don't do that uh the thing you got to remember joel is if you put a little bit of money into an investment you will have a little bit of money in an investment and so pocket change is not going to cause you to be wealthy. It's just not. And so, you know, the scary thing about those kinds of things for me is it makes people feel like they did something, so they still don't have to address the retirement issue. Now, you don't have to address it at 22 anyway.

You're in school. And so the fact that you want to do it, you want to fool with it because you're like me, you're kind of a math nerd and you like messing with it, that's okay. But, you know, what we tell folks to do, the primary thing you need to do when you're in school is get through school completely debt-free. That's your primary goal. And before you do any kind of investing, certainly retirement investing, because your best investment is an

investment into you and that's your education assuming you're studying something that is actually has a marketplace use that you're not getting a degree in left-handed puppetry as rachel says or something like that so um that that's what you want to that needs to be your primary goal graduating and graduating debt-free Your secondary goal would be to do some investing that you use or to set some money aside for an emergency fund. The third thing you would do is to do some investing that you would actually use after graduation, for instance, buying your first home and that kind of a thing. Your third goal would be retirement, or your fourth goal.

That would be the furthest down goal that'd be the that'd be the furthest down the list would be the retirement thing the pocket change things okay but i mean when you invest a small amount you're going to have a small amount so it doesn't solve the issue of becoming wealthy and wealthy happens when you concentrate with large sums of money going towards investments and i don't do single stocks at all. All I do is mutual funds. Too much risk. This is the Dave Ramsey Show. Are high health care costs getting you down?

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It's what Christian Health Care Ministries has done for over 35 years, Thank you. Ramsey live events. chministries.org Live from the headquarters of Ramsey Solutions, Aaron is calling in from Jacksonville, Florida for the Dave Ramsey Show. What's up, Aaron? Hey, good afternoon, Mr. Dave. Thanks for taking my call. Sure. I've got almost a situation like the last debt-free people you have. I'm actually going to be losing my job in January. I'm currently looking for another one.

But we kind of did the baby steps backwards. I just ran across your show maybe five weeks ago. But anyway, we're about $215,000 in debt. That includes mortgage. We have some timberland and also a rental property that we have. I'm just curious as to, I think we're actually selling the timberland pretty quick. I have about $20,000 in the savings account, and I have another account for the rental with $4,000 in case things arise with that.

What will the timberland bring? We currently owe about $25,000, and we're selling for $40,000. Okay, so that'll put another $20,000 in the bank. What do you make a year? Me and my wife make between $110,000 and $120,000. What do you make? You're losing your job. I make about $85,000.

Okay. What do you make? You're losing your job. I make about 85. Okay. What do you do? I do instrument control work at a coal-fired power plant. Okay. So will you move to get another job like that, or will you be able to land something similar in the area? I got a couple of feelers out for stuff in the area, but if we have to move, that would be a last resort, of course. Right. But that's definitely not off the table.

Okay. All right. Well, there's just not a power plant on every corner is what I was thinking. But that skill set could land you jobs in other parts of industry, right? Yes, sir. Okay. All right. So what do you think

your job looks like, your job hunt's going to look like? I'm pretty optimistic about it. Pretty optimistic? Okay. With the savings and all that we have without selling, and there's a severance package, we should be able to live for the next maybe a little more than a year

without any worries. Is there any reason if you got a job today you wouldn't just quit now and take it um it's a severance but so what right no i'm not going to hang around for a severance if i get a job that's comparable yeah how big is the severance um it's about twenty thousand dollars or so yeah you wouldn't you wouldn't you'd go ahead and take it now if you got it okay yes sir and um and you don't get the severance unless you stay till the end right that's correct okay all right well the ideal thing obviously would be this and this is the way i would coach you i would try to find a job making more money that starts the day this one

ends then the severance becomes effectively a signing bonus. Yes, sir. And I would work really, really hard toward that end. But who knows? You might find something that pays you more money that starts immediately, and so you have to miss the severance and just go ahead and take it. But I would gear up. I mean, you've got a solid six months here to work your tail end off

and find something. And I'm going to spend all of my energy on that, and I'm going to pile up cash. I'm going to put the house on lockdown, man. I mean, we're spending no money. We've got a big storm coming. We've got to get the umbrella ready. We've got to get the raincoats ready. So we've got to pile up cash, pile up cash, pile up cash, pile up cash.

We're not going on vacation. We're not paying extra on debts right now. We're not going on vacation. We're not paying extra on debts right now. We're not going out to eat. We're just piling up as big a pile of cash as we can get. Then when you land the new job, whenever that is, then you can turn the lifestyle back up and release that cash towards paying off debt or towards some fun or whatever at that point. But right now, the bigger a pile of cash you have, the better you're going to interview

because it changes the shape of your vocal cords when you're broke. I mean, you just sit in a chair different when you're broke and desperate. And so I'm going to make it a huge priority to land something long before this hits, long before this ends. But the ideal thing is if you've got something lined up to start that day that the other one ends, and then effectively your severance package becomes a signing bonus. But that's about attitude a lot of times.

So I'd be really pushing this job search really hard, really fast, with great intensity. Michelle's in Wichita, Kansas. Hi, Michelle. How are you? Hi there. I can't complain too much. Nobody listens.

Well, you do, I guess. It's just the same. How can I help? Hi. I recently left a job that was paying about $50,000 a year. It was a teaching position. I've been doing it for 20 years, and I've just gotten to the point where it was too emotionally taxing, physical stress. Kids are not the same as they were. I could go on forever.

Anyway, I took another job for this coming school year, but it's in a religious private school, and they're only paying me $35,000. So I've just taken a humongous hit. I've also started working part-time at a radio station as a broadcaster to bring in a little bit more money, and I also compose music for concert band, and so I get some royalties from that, but not a whole ton. My question is this. I have some debt.

I have about $9, thousand in student debt about five thousand credit card debt and i still owe about fifteen thousand on my car i don't want to be one of those deadbeat people that just doesn't pay their bills and walks away from it what do i say to the credit card people um is there some way i can talk them out of giving me high interest rates so i can get this stuff paid off i'm just throwing every extra penny I have at it to make sure it's taken care of. No, they don't do deals like that. The only deals they do is if you don't pay them and you're in default, they'll settle with you, but I don't recommend that.

Yeah, I really don't want to do that. Yeah, that destroys your credit. What is your long-term prognosis on your job? Five years from now, what do you think you'll be making? Well, being that it's a religious private school, I probably am not going to be making a ton more than I do now. Then your car probably doesn't fit in this equation. I'm sorry, I didn't quite catch that.

Then your car probably doesn't fit in this equation. Yeah, well, I actually work for three different schools in the diocese, then your car probably doesn't fit in this equation. Yeah. Well, I actually work for three different schools in the diocese, and one of the schools is about 40 miles from where I live. It doesn't matter. Right. A $15,000 car does not fit in a $30,000 equation. Exactly.

So should I try to sell the car? That or have a different career path. Exactly. So should I try to sell the car? That or have a different career path? Yeah. I'm pretty specialized as a teacher. I'm a music teacher, so it's not as if I can just go anywhere. What about building a tutoring business to go alongside? I've thought about that. I'm not quite sure where I've fitted into the schedule, being that I already have the

second job as a broadcaster. Tutoring pays more. Yeah, it probably does. Most anything pays more than broadcasting. Yeah, I'm finding that out. I really enjoy it, but, boy, you can't see the table. It's a lot of fun, and it's good for the ego, and ain't much for the wallet. That's true.

Yeah, I could probably do some of that i would just like to see you get your income up long term and not have to assume that just because you didn't want to put up the with the abuse in the other situation that that automatically means you can't use your teaching skills to make a really good living, and you settle for 70% of what you used to make. I'd like for you to have a better long-term prognosis than that. Short-term, I'm okay with whatever. We can pull it off. You can work six jobs and backfill and everything else and work it out.

But it's just, you know, you're going, you got a tight budget. What you're giving me is tight. It's hard. And you're doing a good job just staying afloat with the numbers you're giving me is tight it's hard and you're doing a good job just staying afloat with the numbers you're giving me so uh but if you want if you want to have a reasonable uh or a different kind of a long-term plan that allows you to get back up in the 50 60 range or something with the total income at that point probably involves some kind of tutoring model or a different way of teaching other than $35,000,

then the car is going to fit. But if you're going to be making $30,000, basically, you're going to have a hard time with that car. It's the biggest thing there by far. So I would prefer to see you do something longer term to get your income up and keep the car and work your way through these debts. But you've just got to think this through a little differently on the income side of the equation. Thanks for the call. Appreciate you joining us.

That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs. He's our producer and engineer. Blake Thompson is our senior executive producer. And Kelly Daniel is our associate producer and phone screener. I am Dave Ramsey, your host. This is where we give you the same financial advice your grandmother would, only we keep our teeth in. We'll be right back.

Hey guys, it's Blake Thompson, Chief Production Officer for The Dave Ramsey Show. This hour's up, but you'll find more on our YouTube channel, where we have over 6 million YouTube views each month. You can find debt-free screens, millionaire hour clips, Dave rants, and so much more. Go check it out. Guys, let's talk about that timeshare pitch that you fell for. They promised you exclusive access to travel anywhere you want. Tropical beaches, mountain getaways, or whatever.

Oh, my gosh. They claimed it was the affordable way to travel, and then they convinced you it was a good investment. But here's the deal. Search any auction site for your exact timeshare and see what it's selling for. It's listed for a dollar with no bids. That's not a good investment. Now, I know I'm just adding salt to a very old wound, It's listed for a dollar with no bids. That's not a good investment.

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