The Ramsey Show - App - It IS Possible to Be Debt-Free! (Hour 3)

Episode Date: July 1, 2019

Take control of your money once and for all. The Dave Ramsey Show offers up straight talk on life and money. Millions listen in as callers from all walks of life learn how to get out of debt and start building for the future. Check out the fifth most downloaded podcast of 2018!   Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE     Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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, your host. You jump in, we'll talk about your life, your money. It is a free call, 888-825-5225.

That's 888-825-5225. Amanda starts off this hour in Las Vegas. Hi, Amanda. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call, sir. Sure. What's up? starts off this hour in las vegas hi amanda welcome to the dave ramsey show hi dave thank you for taking my call sir sure what's up um so my my question is me and my husband we live with my grandmother um she's elderly she's starting to get dementia um and we moved in with her because we needed help with our debt and things like that. So now we want to move out, and the thing is, if we move out, we'd be paying, we pay $625 now in rent,

so the place we're looking at would be $1,200 a month in rent. And we just got the total money makeover book, so we're trying to do better and trying to have a plan with getting rid of our debt. So we're just wondering if we should move out now. The reason we're thinking of moving out is because she is getting older and my parents would be the ones to move in with her. And they want to? They do. They don't have a place of their own.

They're currently staying with friends. And their friends are basically, they don't, they aren't really good with money. My mom had always been the sole provider. She doesn't have a job. and my dad gets military benefits that equal to about 625 so that's all they're living on okay um how old are your parents um they are 58 and 56 yeah all right um Hmm. Yeah. All right. Hmm.

Okay, so how much debt do you guys have? We have about $74,000 in debt. What's your household income? The household is $73,000. Your household income is $73,000, and you have $70,000 in debt? Yes. Okay, and we're talking about a 1200 rent yeah it's a little steep okay yeah um how many kids have you got we have no kids it's just me and my husband that's definitely a little steep i think you need to look for a different rental

um okay because you need to get out of debt. But it sounds like you're moving. Yeah. I mean, what if you don't move? What happens? Your parents don't have a place to live and your grandmother, I mean. Not necessarily. My husband was saying if we don't move and we stay, we can pay our debt off faster.

And my parents will just have to figure it out. My mom does come in to the house, like to our condo every day to check on my grandmother because me and my husband are at work. So, like, that would continue. She would still be checked up on. Let's just say right now you're paying $6.25, and you're providing care in the evenings for your grandmother, right? Yes. Okay. So let's say that you moved, and not to $1,200, but you moved to something that was $9.25, okay?

That's $300. That's $3,600 a year difference. That's not spit against $70,000. What moves the needle on $70,000 is you guys working extra jobs because you don't have to take care of your grandmother. What moves the needle is you guys tightening your budget and really, really, really making your $73,000 work much harder towards this debt. $3,600 a year is not getting you out of debt on $70,000 worth of debt unless you want to be in debt for 25 years.

No. So your husband's math is wrong. Okay. It's just a minimal amount. I mean, if you were saving $25,000 a year by living there, well, now we can talk about it, but you're saving $3,000 a year by living there. Right. So get you something under $1,000 to rent and pick up two extra jobs while you, since you don't have to take care of your grandmother at night, let your parents take care of your grandmother, which is what they want to do anyway, and you're going to get out of debt even faster.

That's what the net result's going to be. Chris is in Fresno. Hi, Chris. Welcome to the Dave Ramsey Show. Hey, be. Chris is in Fresno. Hi, Chris. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up?

Hey, so I currently make $125,000 gross annually. The problem is a few years back I went through a divorce, so now I have $80,000 in debt, credit cards and loans and whatever, plus my mortgage of $233,000. And right now, because of everything, the way it hits, I'm at the point where I'm barely treading water. So you're single? No, no. So we divorced back in 2015. I actually just got remarried last year in November. We have four kids together.

What does she make? She is currently a stay-at-home mom. She's with our youngest. Okay. And you make $125,000 a year, and you have 100 and what? How much debt again, not counting your house? So I have $80,000. And what's that on? I'm secured. That would be like a consolidation loan, a car loan on my truck.

I have $8,000 left on that. And then the rest would just be credit cards and other, yeah, just attorney fees and stuff like that. Okay. So when did you get remarried? November of last year. Okay. All right. So how long were you married before?

Before, I was married for eight years. Okay. And there was a lot of debt back then, too, here you brought some of it forward into this right right right and before i was in the military so the money wasn't that great so it was kind of it's just been like a decline for the last however many years it was a decline until the divorce after the divorce you you stepped off the deep end a little bit because your heart was broken and you didn't do squat and you weren't paying attention and you were disorganized because you were hurting until you started healing enough that you met the new lady and

your life started turning last November or probably last summer, actually ending in November. And so we're heading back in the right direction. And now you feel like fighting this again, but you hadn't felt like fighting this again but you hadn't felt like fighting it for a while so that's where part of your tank is empty so you make enough money to clean this up is my point you just hadn't felt like it until now right which is not a bad thing i mean you're just a human being you went through crap and your heart was hurting right and so yes correct you know and now you're healed and you're ready to fight again. You're battle ready again, to use a military metaphor for a military guy, okay?

Yeah. So, you know, you're ready to fight again. So now we fight. So now we get down on beans and rice, rice and beans. We get on a written budget, get on the EveryDollar app. Have you heard of Financial Peace University, our nine-week class with the one-year membership? Yeah, I actually went through it before about five years ago. Okay.

Well, you're going to go back through it again with your new wife as my gift. I'm going to give it to you. You know from going through the class you can do this. It's just time for you to do it now. Now it's time for you to live your life the right way. You got this, dude. Hold on. Kelly will pick up.

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We're glad you're here. Open phones at 888-825-5225. Thanks for being here. Kenny is with us in San Bernardino. Hi, Kenny. Welcome to The Dave Ramsey Show. Hey, Dave. Thanks for taking my call.

Sure. What's up? My wife and I sold our house. We're closing Monday. And we had this crazy plan to take the equity out of our home while the market is, like, really bloated here in California and wait for it to – we're going to rent our in-laws' house, wait for the market to drop, and then buy back in. But I didn't know what to do with our equity in the meantime. Maybe you had some advice for me?

Wow. for me wow um problem is we don't know when your market is going to crash enough for you to be motivated to jump back in right if it waits 10 years it won't crash enough to come down to where it is today which will kind of mess up your plan well it's the lord's plan well it's in the lord's hands anyway no the plan you had was not the lord's plan the plan you had was to cash out at the uh top of the market thinking that the market was going to crash in california that's not the lord's plan that was your plan right okay we're not blaming this on god no no okay you're taking your best shot at something so um what i would do if um if if i was sitting where you're sitting now is um i would give myself a time limit that i was going to stay out of the market to wait on the wait on a drop you don't want to wait indefinitely on a

drop because you're going to get yourself in a real pinch. Do you understand what I'm saying? Yes. If it doesn't drop for 10 years, it's going to go up so much that when it does drop, it'll just drop down maybe to where it is now. Right. So you don't want to stay out of the market perpetually waiting on a drop. That's a doomsday scenario that you're playing. That won't work mathematically okay so uh i would give myself a time limit i'm going to say i'm going to sit on the sidelines for three years or whatever you think something like that but a number like that would be you know three years four years two years something like that if you're going to

be under five years which you need to be on this scenario i think um you probably don't need to invest the money, or at least all the money, because the stock market could be down at the time you're trying to buy. So how much money are we talking about here in this equity? We're going to get about $100,000 in equity, and then we're going to add our $20,000 we have saved up besides that to it, so $120,000. Okay.

So if you invest that in mutual funds, and let's just say for easy math, that 120,000 made 10%, it made $12,000. Okay? If it did that three times over three years, you would make like $40,000, $45,000 investing in mutual funds. Okay? investing in mutual funds okay if you did so uh however it could go down and your 120 000 could turn into 10 or turn into 100 000 so if you're willing to take that kind of a swing risk with this particular money in the play that you're making you could invest some or all of it in some

simple growth stock mutual funds because you've got a very short window, I would use a no-load fund, and I'd probably just use what I personally do when I'm doing stuff like that. Short-term investing is I just use an S&P 500. Just a simple, like, go to Vanguard or somebody like that and just get an S&P 500 fund, a very easy purchase, kind of a no-brainer. And it's going to do whatever the stock market does, though. though okay so the stock market's up a half a percent today that's not bad you know if we did that every day it'd be a great day right it's the dow sitting at 26 000 but if uh trump decides to to burp when he's playing with korea or Iran or China, that thing could go down, right?

So your 120 could be worth 100. I don't think you could lose more. I doubt you'd lose more than 20 or make more than 40 over a three-year period of time. That would be my guess. And if you're willing to play that kind of a spread on it, you're willing to take that kind of a risk emotionally, fine. If you're scared to death about all that kind of stuff, just park it in the money market, and you're going to make nothing on it, but you're going to lose nothing on it you're willing to take that kind of a risk emotionally fine if you're scared to death about all that kind of stuff just park it in the money market and you're going to make nothing on it but you're going to lose nothing on it you make one percent you know you make instead of making 12 000 make 1200 bucks or something a year so it's not you know basically we're just

parking it it's a glorified shoebox it's what a money market is these days so but uh if you don't want to do the risk that's the way you do it. I would not stay out of that real estate market more than three years, more than four years if I were doing the plan you're doing. So I'm afraid that it might not correct enough for your plan to work out for you. Denise is with us in Lincoln, Nebraska. Hi, Denise. Welcome to the Dave Ramsey Show. Hi.

Thank you for taking my call. Sure. I have some money in a retirement account at my bank, about $105,000. And it's not making much, and I don't know what to do.

Banks are not good places to do investing because they're not very good at it, as you've discovered. Mm-hmm. Mm-hmm. And so is it in an IRA in there, or is it just sitting in a savings account? Yeah, it's a simple IRA. Okay.

I would just roll it to a series of good mutual funds with a good investment broker to help you advise and teach you about investing. I would be, I personally, and I've been recommended for 30 years that you put your money across growth, four types of mutual funds, growth, growth and income, aggressive growth, and international. And if you need some help with that, just click smartvestor at daveramsey.com, and it'll drop down a list of the people we recommend in your area. We call them smartvestor pros. You choose which one or ones that you want to interview, and you're wanting to learn and take your time and not do investing because Dave Ramsey said to

or because the Smart Investor Pros said to. You need to understand what you're putting the money into, And once you do that, then at that point, I think you've got a shot at making a little bit more money on this. And you just do a rollover with your IRA, a direct transfer rollover. Jason is in Pueblo, Colorado. Hi, Jason. Welcome to the Dave Ramsey Show. Thanks for taking my call. I'm excited to talk to you.

You too, sir. What's up? Oh, trying to figure out what's the best solution here for some money that we're going to have coming into our savings account in a couple of months. A couple of options. We're looking at paying off our house, investing in college for our three kids, buying more rental properties, just trying to get a good grip of what we should be looking at.

I would not buy rental properties until your house is paid for and until you can pay cash for them. So that was easy. Okay. I have the two rental properties, and I own one free and clear. Okay. And your home, you owe how much on your home? $78,000.

And how much money are you coming into? We're going to have about $80,000 in a couple of months. Okay. Kind of an odd figure. Pays off the house perfectly. All right. Yeah, almost exactly. We've been kind of shooting for it for a little while here. And you're debt-free and you have your emergency fund in place? We do. We have an emergency fund. Now, if we paid off the mortgage, it would knock our emergency fund down a little bit less than what we'd want, less than the six months, but we would still have an emergency fund in place. Oh, so you, wait a minute, I thought you were coming into $80,000.

No, we're going to have $80,000. Oh, including your emergency fund? Total, yeah, it'll be $85,000, $86,000. Okay. So it'll knock down our emergency fund a little bit less than what we might want. Yeah, but your emergency fund is three to six times your expenses, and you don't have a house payment anymore, so your expenses change. And we don't, no car payments, no credit card debt.

Yeah, but I'm saying your emergency fund calculation changes when you don't have a house payment. Right, right. So I don't want you to get down to nothing, obviously, but it sounds like you're going to have $6,000 or $8,000 laying around. What's your household income? It's $82,000 to $85,000, and that just went up from $55,000 to $60,000 when my wife got a job last year. Cool. How much do you owe on the rental?

$29,000. Perfect. Okay, here's what I would do. I'd i pay off your house i'd beef up the emergency fund a little bit more after that and then i'd reach over and start knocking on that rental and knock it out i think you're 100 debt free by this time next year dude you are in sweet shape love it well done oh man it's fabulous. This is the Dave Ramsey Show. Thank you. Patrick and Jean are in Orlando. Hey, guys, how are you?

Well, I guess I need to try to push the button and then I can talk to you. Hey, guys, how are you? Oh, we're great. Doing well. Good. Welcome. I see on my are you? Oh, we're great. Doing well. Good. Welcome. I see on my screen you're debt-free. Congratulations. We are.

Thank you so much. How much have you paid off? Well, we paid off $272,000 in 30 months. Woo! And your household income ranged during that two and a half years? It ranged between about $180,000, $188,000. $180,000 to $ 188 180 to 188 excellent what do you guys do for a living uh i'm a physician assistant and i'm a uh professor of history at a local community college very cool good for you guys and so i'm guessing 272 might have been some pa debt yeah that was in there for sure.

How much of the $272,000 was the PA debt? Student loans for Altogether was about $180,000. Oh, wow. Okay. And most of that was mine. Okay. What was the other $90,000? There was a mortgage. Oh, you paid off your house and everything? It's not our house. It was one house. It's our rental house.

Oh, okay. We became landlords by default. Okay, got it. I had purchased a house before we met. I had purchased a house and so it's cheap. And then there was a car loan. There was a personal loan. There was credit cards and a home rental loan.

Wow. Way to go, guys. Congratulations. How old are you two? I am 33. And I'm about ready to turn 40. Awesomeness. Very cool. How does it feel to get rid of $272,000 in debt? Oh, man. It feels like a burden off the shoulders. It's amazing. Yes. Yes. I didn't think it'd be possible to get here.

It was crippling and very scary before. It was, yes. Well, well done, you guys. Very well done. What started you on this journey 30 months ago? We were about to get married, and I heard about you really just on the Internet. I ended up clicking on a debt-free stream on YouTube, and I thought that was really cool. And I started listening to the podcast, and I've listened to a lot of podcasts since then. And I really thought it was really cool concepts, and it really got

me motivated watching the YouTube videos. Love it. Patrick, do you think she'd gone crazy? Well, I thought it was wonderful. I didn't know it would be possible to become debt-free. And when she started talking about it and started telling me about the shows, the episodes that she was listening to, it just seemed more and more plausible and freeing, too, because the way he put together a plan felt so good to know that, yes, it's possible we're going to be out of this burden. Love it. So when people ask, how did you do this,

what do you tell them the key to getting out of debt is? Well, I think one thing it started with is kind of a contendent in a life with non-material things. You know, I think we live in a very kind of materialistic culture, and to balk against that I think was great. But teamwork, too, both of us being on the same page and having that be a goal. And then we'd like to celebrate kind of some of the small milestones along the way. You know, we had Jean do this wonderful thing. She put up a little board in our garage, a whiteboard, and she clocked down to the end of our debt. So that was wonderful.

Very cool. Yeah, it's good to have a visual to follow the progress. Yeah, and we did actually sell that. The house that became the rental, we did sell that. Oh, yeah, that was huge. So that obviously we renovated it ourselves mostly, and then we sold that. So that obviously helped a lot. Yeah, very cool. Well, well done, you guys.

Who were your biggest cheerleaders? Oh, gosh, probably our parents. All of our parents were just really, really big supporters. And our friends and our coworkers were great as well. But our parents were 100% behind us. Love it. Well done, you guys. Well done.

We got a copy of Chris Hogan's book for you, Everyday Millionaires, and you're on your way to that. If you live like no one else later, you can live and give like no one else. What you were saying a minute ago, Patrick, that's a big deal. Well done, you guys. Very well done. Patrick and Jean, Orlando, Florida, $272,000 paid off in 30 months, making $180,000 to $188,000. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! I love it! Way to go, you guys. That's incredible. Way to go. Very well done. Fabulous. Griffin is in Miami. Hi, Griffin. Welcome to go. Very well done. Fabulous.

Griffin is in Miami. Hi, Griffin. Welcome to the Dave Ramsey Show. Hi. Thanks, Dave. What's up? So I'm looking at some numbers, and it's pretty overwhelming. I've got $165K in debt, 27 years old. I've got $40,000 of that,. 45,000 of that's college student months. The car payment, I think the biggest area to maybe

knock down some of the stupid payments that I'm making per month is the car that I have. That's my biggest question. What do you owe on it? I owe $32,500. What kind of car is it? It's a Mustang GT 2017 with 28,000 miles on it.

Sweet, sweet, sweet car. Love it. What's your, uh, what's your income? The income right now is at an all time low in the last three years. It's, uh, 30, 3,200 per month. Um, on average, I say that's a low number because it doesn't count commission that I make. So what do you do? So I do sales, B2B sales. Basically, we work with a lot of companies to help get them communication that helps make them more broadly known. Why are your sales down? Why is your income down?

I'm new to the job. I've been with the job six months. My pipeline is pretty small. I need to get the pipeline where I've got more repeat business. So you're making more at the other job, but you took this. Why? You know, actually, my sales were down at my prior job. I got up to the point where I made $13,000 one month,

but the target for new salespeople in that organization was $1 million in sales your first year. If you don't hit that number, then they cut you. Another job I had to do was tax. What did you make? How much of the million did you sell? I got about $600,000. Some of the deals were split with senior sales reps. When you're new, you kind of split deals with people.

So I didn't get the full revenue on some of the contracts I closed. Yeah, but they still expect you to hit a million in sales. So the new place got a quota, too? A quota, yes. Well, my new place or the old place? The new place. You know, they're pretty lenient on me, honestly. They've been pretty gracious with that.

You've been there six months. What's it going to take to turn this around? When are you going to start making money? You know, it seems like every month I'm like, you know, things are going to pop off. Maybe I'll sell $30,000 this week, which fortunately for me would be, you know, 10% of that. So I'd get $3,000 commission off of it. You know, I've had a couple weeks where I would sell 15 grand, and a week later I made 1,500. Okay.

Well, there's two things that happen to salespeople, because I'm a salesperson, okay, so I know this, in these scenarios. When you're broke like this, it affects your attitude, and your attitude affects your ability to sell. And the other thing that happens is sometimes we think we can out earn our stupidity yeah and buying a 32 000 awesome car when you're broke is stupid you're right so i did it i know i know what stupid looks like you're not as dumb as i am but but um i get to teach this because i was so dumb so um yeah the car's got to go. Need to get it sold. Yeah, and it tilts that down, you know, and that's the thing.

It's like I would have to pay them to get rid of it. I know. But you wouldn't be $32,000 in debt. You'd be $8,000 in debt or $5,000 in debt, and you get your beater, and you get on a budget, a written plan. You start selling everything in sight, and you quit going out at night. You work. All you do is work until you start selling everything in sight. And you quit going out at night. You work. All you do is work.

Until you start getting this turned around. You've been playing the Miami lifestyle, brother. It's time to get to work and put your nose to the grindstone. You can do it. Hold on. I'll send you a copy of the book, The Total Money Makeover. We'll help you with it. This is The Dave Ramsey Show. Our scripture of the day, Jeremiah 29 11

I know the plans I have for you, declares the Lord Plans to prosper you, not to harm you. Plans to give you hope and a future. John Carmack says, focus is a matter of deciding what things you're not going to do. Well, you might think your summer budget is airtight, but I bet if you had to, you could find $700 that you hadn't found yet. I know it sounds crazy, but stick with me here. You can find that money simply by checking your insurance rates. It's seriously unreal to me how many people overpay for their insurance, and they're doing it right now.

And, of course, insurance companies are not going to tell you this. That's why you need an independent insurance agent. They can check your rates against scores of other rates to see if you've really got the best one. If you're not working with an independent agent, go to DaveRamsey.com slash ELP. Click on insurance. And if you haven't had your rates checked in two to three years, you're overdue for a check-in. And the average person that makes a change is saving $700. See? I just give you money just like that.

Jason is with us in Albuquerque. Hi, Jason. Welcome to the Dave Ramsey Show. Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? What's up? Each one of my kids has a little whole life policy that we're going to cancel and take the cash value out. Good.

And I've heard you talk about... Hey, turn down your radio in the background like Kelly told you to. Oh, let's see how it gets that set. Yeah. Is that better? Yeah, that old follow instructions thing. Okay, how can I help? Yeah. All right, so old follow instructions thing. Okay, how can I help? Yeah.

All right, so I'll start over. Each one of my kids has a small whole life insurance policy that we're getting rid of. And I've heard you talk about some people in the past that have small businesses and a way to use that business to create them a paycheck and then allow them to invest it. What would you suggest how I go about that? Well, it has nothing to do with the whole life policies. I just get rid of the whole life policies on babies. They're ridiculous. It's not a good way to save money for college.

It's not a good way to invest money at all ever in a cash value life insurance policy. So let's just get rid of those. That's simple. Then as far as your kids goes uh if you are audited by the irs you have to be paying them a reasonable wage so you can't pay a kid a hundred thousand dollars for sweeping the floor once so you can't just make up stuff so four-year-olds don't get paid but if you've got a 14 year old and they come down and work in shipping for the parts of the summer and you pay them, you know, reasonable wage, a high wage for a shipping, part-time shipping clerk, but a high wage, you can do that.

That's perfectly legal, and then you can file a tax return on that amount of money or any money that they earn from any source, for that matter, and you're allowed to, at any age, fund a Roth IRA up to your earned income for that matter and you're allowed to at any age fund a roth ira up to your earned income for that year and you need to have filed a tax return in order to prove your earned income so like when our kids would they'd work back table sales at one of our live events they'd be selling books uh schlepping the books in and out of the truck and helping people load there's a lot of load in load out at those kinds of things uh they'd be running around working for people that work here uh during an event or you know making phone calls as they got a little bit older we put them on the phones like up in their late teens

seniors in high school that kind of thing even into college years in the summer when they're home any of those kinds of things plus they were babysit dog sit cut grass whatever else they did we added up all of that income and we filed a tax return on it. And whether it was self-employed or not, I mean, whether it was working for us or not, and then, of course, I funded their Roth IRA up to that amount. So if they made $3,642 that summer, then that can put $3,462 into a Roth IRA for them. And they put up to $6,000 this year into it. So if they made $12,000, you can still only do $6,000.

But, you know, that kind of stuff. That's what you're looking at. That's the process. Elaine is with us in New Orleans. Hi, Elaine. Welcome to the Dave Ramsey Show. Hi. Thank you for taking my call.

Sure. I have a question. I'm going through a divorce. My husband filed bankruptcy chapter 13. And I'm in the house. I have like $100,000 equity, which I'm sure he's going to get some of that in a property settlement.

So what do I do at this time? I only make $ 000 and there's no way i can afford the debt that he's in and i don't think he's going to be able to make his chapter 13 successfully okay so you're on the debt as well no well why would you have to pay his debt property state yeah but you wouldn't have to pay his debt if he filed a chapter 13 okay i'm not on the debt yeah i think i'm going to check with your attorney again and let's really learn from your attorney what your liability is how much debt did he file on chapter 13 400 000 including the house no without the house what in the world did he borrow two trucks and a lot of loans okay so he's running like 18 wheelers

yes okay all right whoo that's some expensive mistakes so he didn't give up the trucks he's 18 wheelers? Yes. Oh, okay. All right. Whew. That's some expensive mistakes. So he didn't give up the trucks. He's still running them. I'm surprised they didn't put that in a Chapter 11. That's interesting. Okay. Hmm.

Well, you're right. He's not going to make it because he doesn't know how to run a business. He knows how to drive a truck, but he doesn't know how to run a business. And he's in debt up to his eyeballs, and he didn't drive enough truck to support the payments, right? Right. Trucks don't stay busy enough to keep him going. That's his problem. Ouch.

Yeah, the great dream is if we go in debt far enough, we can always be successful, and that just kills people. So in your case, what's the house worth? About $320,000, and I owe $210,000. Okay. So are you planning on selling it? I don't know. That's what I need advice on. What's your income?

$75,000. Can you afford that payment? The house payment? Yeah. Yes. I don't know if you can or not, kiddo. That house payment is probably 50% of your take-home pay, isn't it? It's $1,500.

And your take-home pay is? $5,000. I'm sorry? The $75,000. Yeah. The $75,000 is your take-home pay or your gross? The gross yearly. Yeah, gross yearly is $75,000.

So your take-home pay is about $5,000 a month, isn't it? Yes. Okay. And you got a $1,500 house payment. That's pretty rich. You can probably make that, though. But you're afraid you're going to have to give him half that equity right yes sir and how are you going to do that i would either have to get a home equity line of credit to get it or i would have to sell it you have children? Two. At home?

One in college and one at home. I'd sell the house, kiddo. And let's get as far away from this mess as fast as you can and start your life fresh with $50,000 in your pocket and a great income. Hopefully you can be shed of this debt. I hope that the way the Louisiana law is written that you're not nailed with it i don't know a lot about louisiana law it's very unusual law so um it's a uh it's a different uh theory of law behind a lot of stuff there so i don't know what you're going to end up with you need to talk to your attorney about it but if i were you i would not try to hold on to this house um i think you need a fresh start and you need a fresh handful of money

to do that and uh trying to hang on and make everything okay is uh it's not okay he made a mess and you're going through a divorce it's a mess i'm so sorry these are hard decisions but um it's just a house there's how there's house on every corner you can get you another house and doing a whole bunch of gyrations try to hang on to something and then it'd be the very bane of your existence is not worth it i personally would just get me another place i'd go rent something heal emotionally pile up some cash talk about buying a year later after this gets behind you so hey thanks for the call i'm so sorry you're facing this. That puts us out of the Dave Ramsey Show and the books.

Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host. We'll 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, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.