The Ramsey Show - App - I Am Drowning in Credit Card Debt (Hour 1)

Episode Date: October 17, 2023

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walsh, our Ramsey personality, is my co-host today. Open phones here at 888-825-5225 as we talk about you right in front of you. Wayne starts off this hour in Canada. Hi, Wayne, how are you? I'm doing great, Dave. Thank you for taking my call. How are you doing today? Better than I deserve. What's up? Oh, Dave, a little bit nervous here, but we're going to get it out. Anyways, we had purchased two vacant, well, actually one vacant lot.

Again, just a vacant lot, lakeside, beautiful property. I ended up subdividing it, putting it, splitting it, putting it on the market. It's going to come on two years, probably October, end of this month, sorry, not quite two years. And again, we've had a little bit of an issue with that property being on the East Coast. Of course, we've had a hurricane, then we had a fire, then we had another hurricane, then we have interest rates, and we're struggling. Nothing's moving, of course, in the market there, and then where I am, too, also as well. We do have a loan on that property.

And, again, we're just paying the interest only on it. And I just, again, we have an appointment with our accountant. But our accountant isn't a real estate person. And then our real estate person isn't a money person like yourself, Dave. So I would just like some advice on that. I could give you kind of a rundown of what we have. Wayne, you're in the perfect place. I'm an expert on my opinion.

All right. So how many lots did you end up with subdivided? One lot was 5.2 acres, and the other one is 7.2 acres. So two lots. So you bought a 12-acre tract and split it. That's right. Okay. And what are you asking for the lots?

So the one lot we plan on keeping, the other lot we are asking $9.59 for it. Are you keeping the larger one or the smaller one? We're keeping the larger one. Well, I would. All right. And it's a lake lot, after all. And you've got enough buffer there to keep the neighbors off of you. Life's good.

So what do you owe on it? $700. Okay. And do you have $700,000 in cash and investments? Yes, I can give you a rundown if you'd like. Yes, 700. Okay. And, uh, do you have 700,000 in cash and investments? Yes. I can give you a rundown if you'd like. Yes, please. So combined, my wife and I, we have $2.2 million in investments.

We have, uh, 700,000 and two other vacant properties that are in our hometown. We have, uh, a mortgage of $500,000 on our primary residence, which is worth $1.2 million. And we have no debt. We both have our emergency funds. What's your household income? Combined household income would be about $425,000. Oh, cool. And how old are you two?

I'm 59 and a half, and my wife is turning 47. Well, you guys are amazing. Well done. I mean, you're worth $3-plus million. Congratulations. Approaching $4 million net worth. Well done at 59 years old. Ding, ding.

Score. You're not bankrupt. You make $425 net worth, well done, at 59 years old. Ding, ding. Score. You're not bankrupt. You make $425,000 a year. You can survive this. So this is a philosophical money discussion almost, meaning that you have enough money that you really can't screw this up either way. You follow me? Correct.

I mean, you can ride it out and sit on it and pay the interest and someday it'll sell or you could cash out enough to pay off your house and pay off the lot be 100 debt free and be 1.2 million dollars less in investments but now you've transferred your investments into your personal residence and into some lake lots and that way you're not a motivated seller anymore because you almost sound like you're emotionally motivated and i want let me tell you there's only one time you make money in real estate and that's when you sell it correct so when you sell it you cannot be a motivated seller and sometimes you can be motivated by finances but other times you can be motivated by disgust like three hurricanes of fire and interest rates.

Correct. Like, crap, my plan to clear this lot by splitting this off and selling the other one was such a good plan. Crap. That's a motivated seller. You follow me? Yes. Am I wrong? No.

Okay. I think the way you make money in real estate is you chill. And the best way to chill is just reach over and pay that sucker off. And while I'm at it, I'm going to go ahead and pay my house off. Was the plan, Wayne, for you to sell those two vacant properties to grab the $700,000 so you can buy the tract of land that you want to keep? No. When he sells off the other lot, it sells for $900,000.

Yeah. And it's going to pay off the $700,000. He's going to off the other lot, it sells for $900. Yeah. And it's going to pay off the $700. He's going to clear the first lot. But he's also got two other vacant properties. He's got the other two tracks. They're just an independent issue. You can sell those if you want to. That would get him to where he wants to go.

I mean, are they going up in value? Why are you holding those? One's right next door to our primary residence, and we're just going to give that to our young son later on. Again, that was just going to be just whatever. That's a buffer. Yeah, that's a keeper. Okay, what's the other one?

The other one is it's going up in value because it overlooks the city. Okay. And another big lake, too. And then part of that question was… Would you rather have that or would you rather be and or would you rather just have left less liquid cash because I just use 1.2 of your 2.2 I think I think I think I just wanted to hear you say what you said and just gonna ride this thing write it out because so far to date, we spent $72,000 in interest, right?

And if we're getting $950,000, we're still ahead of the game. The best time to sell something is when you don't want to or need to because you get the most for it. I mean, you've got to have walk-away power. I'm at a minimum liquidating enough to pay that lot off. The 2.2 in investments is that retirement investments or is some of it non-retirement he's 59 oh i missed that part well there you go so okay yeah i might you shouldn't have any penalty i mean it's canada it's different

but you don't have any penalties in canada at 59 and a half either do you no that's right no you're correct um yeah yeah and you've got lots i mean you've got options you've really just got to look and see what makes the most sense for you can afford to hold it what would i do if i woke up in your shoes i'd pay my house off and a lot off tomorrow yeah and i'd have only a million dollars left in investments oh darn only a million did you hear i said that only a million dollars but i have not a payment in the world and the lot that's overlooking the city also goes up for sale probably if i'm you and i'm probably not gonna say i'd probably rather have the liquid than have that but uh but i'm getting

rid of all the debt and that just chills you and then some goober comes along and says okay you're asking 995 but the market's slow and hurricanes in interest rates. And so I'm going to offer you $7.50, which pays off your loan, which they can look up at the courthouse and tell what your loan is. So, which is exactly what I would do where I'm buying the lot from you in a down market. I try to buy it for what you owe and just let you out of the trap to heck with the cheese. But instead, there's no trap. We just got rid of the trap. That's great.

I love that. Great strategy. And so then you go, no, we're not going to take $750. I'll just wait. And I did that not long ago. And as soon as you call someone's bluff, the price goes up. There you go. This is The Ramsey Show.

Jade Warshall, Ramsey Personality, is my co-host today. Sam's in Austin, Texas. Hi, Sam. How are you? I'm doing pretty good. How y'all doing? Better than I deserve. How can we help? Well, you know, I'm calling because, you know, I've, uh, over the years we, or the last couple of years we bought a house, things seemed to be going okay. And then we ended up getting kind of taxed on the actual build of the house. And that just kind of started a slippery slope where we started having to pay more than what our mortgage originally was. And we ended up relying on a lot of credit cards and they got really bad and right now we're in i'm i'm especially in collections for a lot of cards and

my wife has a few she was sued i've got a case coming as well and i just don't really know where to turn or how to turn this around. It almost seems kind of hopeless. Sorry, Sam. How much credit card debt is there total? Probably around probably $15,000 to $16,000. And how much income do you guys bring in every month? Every month, about $6,000. How much is your house paying? $6,000. How much is your house payment?

$2,100. How much are your car payments? We only have one car payment, and it's $250. And as far as the mortgage, when we were being taxed on the improvement after about a year of having a lower payment, it was about $2,700. And now we're down to, I finally paid off the overage on the escrow. And now, you know, the $2,100 is about normal. Okay. All right.

And what do you guys do for a living? I'm in technical support, and she works in a dental office. Okay. Your mortgage is high. Your car payment, all car payments are bad. This one's not super bad. The credit cards are, the way you were talking, I thought you were going to tell me you had $100,000 in credit card debt.

Me too. The weight that you're emotionally carrying listening to your voice. I'm pleasantly surprised it's only 15 me too yeah i think the mortgage being a third of your take home is really what's and it was higher than that for a while but even that where where else are you guys just disorganized and you were living in panic and money's just flying out of there and you had no idea where it's going that's a pretty good way for you yeah okay because i mean your numbers aren't as as bad as the they don't indicate you should even be behind yeah and and and i agree with you there because

when i you know when i sit there and kind of add up numbers and you know look at it that way i look at it i'm like okay how many kids have you got we have five total and how old are they? They range from teenagers down to seven. Okay. How many are in daycare? None. They're all in school. Okay. And our oldest, she works.

And, you know, she just graduated high school. Yeah. And the main thing is that, you know, I think what... Okay. How many credit cards are you behind on? Probably, I would say, it's a pretty good number. Probably about eight to ten. So there's a whole bunch of little ones.

Yeah, yeah. And you're behind on almost all of them. I've got four myself that I started a payment plan with them. Okay, so you said two have gone to collections? No, they're pretty much all in collections, but I have four that I've started a payment plan with them. Okay, so you said two have gone to collections? No, they're pretty much all in collections, but I have four that I've made a payment arrangement with, but two of them have filed lawsuits. Yeah, you said your wife got sued on one of them, right?

Filed lawsuits. Yeah. Oh, that's cute. On how much? Hers is a little bit over $3,000. Yeah. The same for mine. Oh, man my man okay let me just tell you you live in texas am i got that right is that the truth that's correct okay well their lawsuits

useless they can't garner she wages or take a lien on a house in texas right so it's just hanging their lawsuits hanging out there in the ether It's just dangling out there in the nothingness. It has, there's nothing they can do about it. Because with hers, we hired a lawyer. Why? And they're working on the case. Why? It was the fear thing at the time.

I know. That's the thing, Sam. Like, looking at the numbers that you've given us, maybe there's more debt out there that you haven't mentioned. But I think that you're way more, what you're feeling is way more emotional than it is financial. It's like, oh my gosh, I've got 12 credit cards. They're suing us. You know, the kids are like, it's like all these things going on. And if you just stop for a moment, if we really look at the numbers and look at the math, there's no reason that we can't list these from smallest to largest. Cause like Dave said said most of them are probably lower balances because there's tons of them and they're only

equaling up to 15 to 16 000 so my guess is that if you can just kind of pull all of this out of space get it down on paper like i said list them smallest to largest figure out what it looks like for you guys to get an extra one to two000 to $2,000 in every month, and you're knocking them out like dominoes. You're going to feel so much better. How many cars do you own? We have two that we use for getting the kids around. Our oldest son has his own that he uses for school. And you bought it for him?

He's a stepson, and his dad gave it to him as a gift. Okay. Yeah, it's just a little truck okay i'm just trying to find out what's going on here all right so what did this lawyer tell you he could do that the law has already done for you in texas yeah they basically said that no no they just basically said that they could either get the case dismissed or work out some type of lower settlement essentially that's all they offered. Okay. Well, the case is not going to get dismissed. You owe the money you lost.

Right. You owe the money you didn't pay it. You lose. Ding. Okay. Now, then can we settle it for less? Well, sure. It's $3,000.

They can't collect it in Texas. So, of course, you can settle it for less. And you can do that with all of these, by the way. And next time, don't use a lawyer. What did you pay the lawyer? $750. Okay. I sure hope he of these, by the way, and next time don't use a lawyer. What did you pay the lawyer? A $750. Okay. I sure hope he gets $750 off the balance, at least earns his keep.

I don't know how he took your money in good conscience, but all right. Now, the main thing I worry about is, like, because I've heard that, you know, I understand they can't charge my wages, but they could, like, take it from my bank account. Not unless you give them access to your bank account. Well, they can take a lien on it in Texas. That's true. Well, if you've got a bunch of money in your bank account, I guess we'd pay the bills, huh?

Yeah, I mean, I really don't at the time, but at the current moment. But, you know, working on this here and building up, you know. No, I'm just saying, I'm just saying that if there's $10,000 in your bank account, you wouldn't have called me. Yeah. So you don't have any money in your bank account, so it's not a big fear. Yeah. Okay. Okay.

So anyway, what we've got to do is, A, get organized and get a very detailed plan, and B, let's prioritize. First thing is house is paid, food, then house, then lights and water, then car. Are you behind on the car? No. No. Okay, good. Stay current on the car. Go to work.

And we're going to get you on an every dollar budget with Jade and put you in one of her webinars. When's your next webinar? Oh, gosh. It's not until November. I don't know that we have an exact date we'll get you we'll get you plugged into an every dollar webinar so you can learn how to do a budget with your wife and uh we'll put you into financial peace university because basically what we're going to do is we're going to take care of food shelter clothing transportation and utilities first you've got the money to do that and then we're going to force rank these things and work them through and lump sum settlement all of them each smallest to

largest i'm not paying payments on them anymore i'm going to lump some settlement you're behind the lawsuit is got no teeth where you live okay so just argue with them and say i'm broke i owe you three thousand dollars uh you say it5,000 after you added a bunch of fees. I have $2,000. If you'll take that and give me that in writing, that that's a settlement in full. Remember that phrase. And no electronic access to your checking account. As Jade said, they will never know where your checking account is. But settlement in full, in writing.

And then I'll send you $2,000. Oh, you won't do that? Did you know there's nine other credit cards that will? of them's going to take the money i got you on the phone last chance going once going twice i'm going to the next card okay second card here's what we're going to do i just hung up on the other guy because he's an idiot let's see if you are all right and we're going to settle this going once and going twice and you're going to work your way through this and then you cycle back through after you finally get one to take the money. Then you pile up a little more money and you start the whole process again.

Remember last time I called you when you didn't take the deal? You sure you don't want to take it? Because I'm here with another deal and I'm getting ready to go on to the second one. Going once, going twice. And this is how you deal with these people because credit card collectors are scum. You can tell they're lying if their mouth is moving. So beat the snot out of them and get this cleaned up. That's what you do.

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Jade Warshaw, Ramsey Personality, open phones at 888-825-5225. Thank you for hanging out with us, America. Jade is my co-host today. And we mentioned you're going to be doing the Every Dollar webinars with that last caller on budgeting your next one is not till november you said that's a couple weeks away rachel cruz is doing them george camel is doing them if you want to go to a free every dollar budgeting because webinar they're going to show you how to do this go to every dollar.com slash budgeting because jade when you're, it sounded like with him, with those credit cards, he's got the money to pay them. He's just disorganized, and the budget

is literally a way to get organized. Yeah, that's exactly it. When you don't have a plan for your money, it just feels like it's chaos. Money's going out. It's going in all directions. You don't know where it's going, but when you have the piece of a budget, you get to see how every dollar is being spent, and it helps you identify those problem areas. Well, 100% of the time that you put your income that you have for the month at the top, and you start deducting basic necessities out, you will feel like you've got a raise. Yeah, we see that. Because you're like, where is this money going?

And I don't know where it's been going. Well, it doesn't matter where it's been going well it doesn't matter where it's been going all that matters now is that it starts going to where it should be going on purpose intentionally you know too many people to go ready aim aim aim aim aim that's right aim fire you got to pull the trigger and you got to you know you're going to hit what you aim at and if you aim at nothing you will hit it every time zig ziglar said that and he's exactly right and so john maxwell says a budget is uh people telling their money what to do instead of wondering where it went and that's again you feel like you got a raise you have a sense of control even if you can't pay everything you get a sense of peace because you know that you can pay the things you have to pay, like food.

Yes. And lights and water and house payment. And, oh, well, I got this one MasterCard I can't get to this month. Okay, then we got to sell something. We got to get an extra job. It starts to, you start to solution almost immediately. Yeah, and you get that sense of power over you making the choices instead of it just happening to you, right?

And the other thing that happens is when you got that much financial stress with eight credit cards or nine credit cards and they're all behind and two of them are in lawsuits, that much financial stress in the house, 100% of the time it takes an effect on your marriage. Oh, 100%. I can vouch for that. Me too. All those in favor. It was this moment in our marriage that Sharon realized

she had married Goober, not Sir Galahad. So there we go. She realized I screwed up. I picked poorly. Oh, man. That's what she had decided at this point. But yeah, I mean, it takes away your self-confidence. It puts terror in the relationship.

There's nothing good about being out of control. No, nothing good. And, you know, I could hear in that last caller in his voice, and what I heard in his voice was a sound I'd heard in Sam's voice. Yeah, I heard it in mine. You know? It's just like this uncertainty. Fear.

A little fear creeping into the uncertainty. And there's that guilt. You know, it's like. So I went and got a lawyer, and the lawyer said, Oh, I'll take your money. Oh, man. fear a little fear creeping into the uncertainty and there's that guilt you know it's like so i went and got a lawyer and the lawyer said oh i'll take your money i mean oh man asking a you know i was really surprised he didn't say file bankruptcy because asking a bankruptcy attorney if you're bankrupt it's like asking a dog if it's hungry yeah i mean you know it's like oh yeah so of course you're bankrupt you came here didn't you you know that's good to mention dave because

people get scared when credit card companies say i'm gonna sue you and we're filing a lawsuit and your your first thought is well i better lawyer lawyer up too but you do owe them the money like this is a movie yeah this is not a movie yeah you are not on trial the fact that you didn't pay a credit card is on trial and let me tell you folks here's what happens okay you ought to actually have you probably never done this have you ever gotten a speeding ticket? I have gotten one speeding ticket. Did you go to traffic court? I did go to, and it meant nothing.

I had to pay the ticket. They still charge you anyway. But traffic court is a little bit like a joke. I mean, you go in and the judge goes, okay, you 17 people that came in here, that are here, that this is your first offense uh go to school or we'll just wave it or whatever they did okay and it's like and you're all geared up like you got your arguments in your head it was foggy and the officer i forgot my glasses alcohol on his breath and you have all these things in your head right that you're going to say and the judge is

like yawns and goes dismissed dismissed dismissed dismissed, dismissed, dismissed. And it's anticlimactic. Well, why did I have to pay mine? Why? I don't know. That's a personal problem. Let me get on the dismissal list. I don't know. I have my theories, but I'm not going to bring it up.

It could be that you were driving 200 miles an hour. No, no, Dave. Not me, not me. But Sam's going to tell me the truth later but the um seriously though when you go to small claims court or a small claim even if it's not technically called small claims court and you go in and the attorney is suing you for three thousand dollars on a credit card here's what happens folks the attorney shows up with a two-wheeler he's got so many files and there's like a thousand literally cases on that judge's docket this morning and the judge is going to go bump on all

of them except the three people that show up and the judge is going to go you guys go out in the hall with the attorney and cut a deal interesting it's it's so lame and anticlimactic because here's the deal if you owe someone money and you have signed a contract like a credit card agreement to pay them money and you didn't pay them money there's only one possible result of the lawsuit you lose the lawsuit because you didn't pay them yeah you're in violation i mean showing up and going i tried i tried your honor is not a defense i lost my job your honor is not a defense i got cancer it doesn't matter you didn't pay the bill pay the bill didn't pay the bill that's all that matters if you got proof you paid it that'd be the only

time that's right and they've got they've done the accounting wrong or something that'd be the only time you could possibly win the lawsuit but if you haven't paid the bill you lose that's right now then what happens? Nothing. Yeah. The only consolation is you can settle for less. Then you go back. Now you settle the lawsuit instead of settling the credit card debt. Whoopee. It's such a, we get this emotion built up because the collector's like, we are going,

they play music in the background. Boom, boom, boom. Everything's in big, bold red letters. We are going to sue you. And you're going, oh, please, anything. Don't sue me, please. Anything. I'll do anything.

Yeah. And that's exactly what they want. That is true. It's all emotional. We think Perry Mason is about to come in there and prosecute us. You were watching reruns as a kid.

Wow. I would have gone, I would have at least gone Matlock. That's two decades later. There you go matlock i'll take that locks but both of them are dead i'll just say it but oh my gosh oh it's a modern it's not a modern day lawyer thing is there oh yeah yeah there's got to be like like uh law and justice la law la law there you go that's pretty characters themselves anyway yeah so anyway

the uh yeah there's nothing like that going on. This is not a courtroom drama. Right. It's a factory that produces lawsuits very efficiently. Bump, you're done. Just like that. Just like stamped out another widget, and you be it. So just chill about the lawsuit. It's not, I don't want you to get sued.

You don't want to get sued. But if I can't settle it, and they're going to take me to, no, don't worry about it. Just keep working it. If you pay them money, they're going to go away. That's right. Until you pay them money, they're not going to go away. You owe them money. That's how this works.

But they don't like to settle. You do have, like, before you even get to all this, you have to call so many times to get them to take your, to get them to take your deal. Yeah. Let me, let me, let deal yeah let me let me let me let me rephrase that they love to settle they don't like to settle easily there you go that's even they want to milk as much out of the deal as they can milk because they finally found a cow because usually they can't even find the cow it's just loose it's running around in the country

somewhere they can't find the cow but if you show up and they go oh i got a cow i'm gonna milk this as far as i can that's what they're doing so uh yeah they love to settle because they bought these debts usually pennies on the dollar if they're a debt buyer on old bad debts and uh they probably got five they probably got a nickel on the dollar in it so on three thousand bucks they probably got 150 in it that's what they paid for the debt so will they settle that do they like to settle oh yeah it's their whole thing because you think about all the cows that $150 in it. That's what they paid for the debt. So will they settle that? They will. Do they like to settle? Oh, yeah. It's their whole thing.

Because you think about all the cows that got loose. We just got one. We're going to milk it. Maybe we can get a grand out of this three grand, and it'll pay for 10 of the other cards that I can't even find the cow. It just disappeared because I got one that showed up here. So they'll work with you, folks. You just got to get up in their facing.

But you've got to get organized. You've got to get up in their facing. But you've got to get organized. You've got to get on a budget. You have to buy your food for your children first, your lights and water and your shelter second and third before you do anything else. Don't talk to me about I settled a credit card and now we don't have any food. No, no, no, no, no, no, no. Master card, not that important. They're not the master. They're just the card.

That's it. No, you work it. You work it. You work it. It's a system. It's a process. For them, it's all business. For you, it's all emotions. Get the emotion out of it when you lay it out on a plan. Use the EveryDollar app and get your crap together and get this mess cleaned up. jade walsh all ramsey personalities my co-host today open phones at triple eight eight two five five two two five ryan's in green bay wisconsin hey ryan how are you great yourself better than i deserve what's up hi so uh me and my wife are on baby step six right now.

And my dad's uncle recently approached us about buying a 40 acres up on our family land up north. And we're debating if it's worth going back to baby step two or not. So you're saying that you would go back into debt to get this land as opposed to pay off your current home? Correct, for a short period of time how much is the land uh forty thousand a thousand dollars an acre and where is it how far away from you and now we're north of here and you want it for what uh we use it for hunting i mean our whole family, it's been in our family our whole life. So we've got 300 acres up there that we family share. And this 40 acres is part of the 300?

Correct. So what happens if you don't buy it? That's a good question. I don't know. I mean, does your uncle want to keep it? He wants to sell it to somebody else in the family, or he's going to hold it, right? Well, the thing is, he's tight for money, so he wants the money. It's worth about $250,000 to $275,000.

Is there anyone else in the family? Oh, wait a minute. The 40 acres that is hunting land is worth $250,000? Correct. This is not hunting land anymore. Not at that price. I mean, deer meat is not that big a deal, dude. This is expensive deer meat.

I mean, you're paying like $80,000 an ounce here. Wow. You know, I mean, seriously. This is not hunting properties, cheap property, $250,000. I mean, this must have some proximity to a – this is not out in the country somewhere. This is close to town. Well, that's what it's worth. Like like i said we would be buying it for only 40 so yeah i'm something's wrong with this equation okay either this is not hunting property

that it is close to a metro area or it's not worth that because hunting land you don't pay 250 000 for 40 acres to hunt on. Up here it is. Well, you don't have the money to buy it right now. Let's go back to that. I would not go back to baby step two, and I would not pull out another, pull out debt on this. Let's just pretend I could buy something that's worth $250 for 40, and I don't have the 40. I can't buy it.

Let's just pretend that all of that is accurate, okay? I can't buy something I don't have the money for. Now, he wants the money now because he's hard up for money. So I guess another relative is going to do this deal. If you have something you can cash in or sell, sell your truck. Yeah, you could do that. Get you a hoopty, get rid of your 30 000 truck and then you know go go a big garage sale work six jobs and close on it and uh by end of the

end of the year and pay him cash okay if you want to do that that's fine but i'm calling bs okay there's something wrong with this i buy real i bought real estate my whole life i own several hundred million dollars worth of real estate i've got a 250 acre farm in that mix okay and dude no way you don't buy stuff to hunt deer on for 250 grand not even in michigan not even in wisconsin wherever you are oh my god no no no unless you pay cash i wouldn't do it you do whatever you want to do ryan but that's what we tell people it's a toy and extra properties and second homes are toys yeah pay cash and you pay cash for them and um and even if it's a good deal it's not a good deal if you can't afford it yeah the shirt is half off but i got no money it's not a bargain sure it's not half off that's

right didn't get the shirt it's same deal i mean it's not a bargain sure it's not half off that's right didn't get the shirt it's same deal i mean it's not a bargain when you can't afford it so um and i i just hear rationalization and yeah nope don't believe it joe's in youngstown ohio hey jo, what's up? Hey, Dave, thanks for taking my call. Sure. I am about $130,000 in debt. On what? And a lot of it is, well, the majority is my truck and my wife's car. Which is how much each? The truck is $40,000, and the wife's car is at $15,000. Okay.

So you're the problem. What else? Well, that is at $15,000. Okay. So you're the problem. What else? Well, that is a lot of the funds. Sorry, I went straight to it. But go ahead. My income is only $30,000 a year right now. You said $30,000? What?

Yes. Your income is $30,000? Yes. And whose income is that? Is that just one or the other, or is that both of you combined? That's just me. My wife is a stay-at-home mom right now. How many kids?

Three. Okay, what's the rest of the $130,000? Okay, so I own a home in PA that I don't live at. I have it on land contract, which was a mistake. You sold it on land contract? Or I have it on land contract, which was a mistake. You sold it on land contract? Or you bought it on land contract? I sold it on land contract. Okay.

So that one is still $15,000 on the mortgage and $28,000 on the line of credit. That was with that. Is the payment coming in enough to cover those two? Yes. Okay, so that's the purpose of a land contract. So right now, that's a break-even land contract all right so right now that's a break-even it's not your issue okay right that's 45 of the 130 right 90 so there's another 40 what's the other 40 a lot of it is i had a i was self-employed for quite a few years, and so I made some mistakes with some job estimations that I did,

and so I owe quite a few metal companies a lot of money for metal. And how long has it been since you paid them? It's been months. Okay. Is it companies or company? So you've got $40 40k in vendor debt yes there's actually 31,800 precisely in in building materials there's another 8,000 floating somewhere what is it um it is personal loans from uh small lenders and stuff for just what happened to your income because you used to

make more i I did. I quit my business because I was going through a struggle for a short period of time, and I decided that I'm just going to quit, go for a job, and it didn't work out. So I started a new company later, two years ago, actually. And right now I am self-employed. I do commercial roofing, and I have been struggling more than I have ever struggled with a business. So here's my thing. And until your business is making you enough money to float your lifestyle, it's really just a hobby or a side hustle. And I commend you for starting that business, but it's not making enough money to, to manage your household bills obviously

so you've got to treat it like a side hustle that's got to be something you're doing on the side and building while you have a full-time job what how much how long you been doing that the current business two years yeah yeah okay jade's right i mean that thing should have been pushed to the side as a side hustle about 18 months ago. I also work with another commercial roofing company that I work for like two to three, sometimes four days a week. I mean, that's great, but are you going to argue that $30,000 is fitting the bill right now? Because it's not. No, absolutely not. Is the $30,000 from your business or the $30,000 is total of the two?

That's total of the two. Yeah, you're not making enough. You used to make close to six figures, didn't you? I have never made six figures. I mean, I think the most I ever made was, what, 50,000. Okay. But I didn't have any expenses. There's two glaring things in your math that are going on.

Okay. And part of what we do here is we have the advantage of not being in the forest so we can clearly see the trees. Mm-hmm. Okay? The glaring things are you have two cars that you could never afford at any time in your life. They should never have been purchased. Both of them belong in the crazy column. Nuts.

Sell them both. Get two $1,000, two $2,000 cars. And then the second glaring area is your income. Yeah. You've got to do some things to get your income up short term and long term. And I'd even be looking at the wife staying at home. I want to know how young those kids are because it might be that she can go out and get some work as well. Because you worked your tail end up. Yes. When you guys were getting out. Like crazy. Yeah. So yeah, income is one side of the equation and two cars in the

cray-cray column is the other side of the equation. If you get those two things fixed, your life's going to shift very quickly to the good side. That's right. This is The Ramsey Show. Hey, what's up, guys? It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending

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