The Ramsey Show - App - Money Stress? You Don't Have to Live Like This! (Hour 2)

Episode Date: March 25, 2019

The show about you

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. Thank you for joining us. We're glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Sarah starts off this hour in Billings, Montana. Hi, Sarah. How are you? I'm about right where I deserve, Dave. Thanks for taking my call. Sure. How can I help? Well, long story short, because of a car wreck in October and our mortgage company blatantly lying to us, we're now facing foreclosure.

When we got in the car wreck, the auto insurance decided they didn't want to pay anything right away. I'm still fighting with them to pay up on all of our doctor bills. We were forced to choose between paying the mortgage or being able to continue getting treatment for me when I was hurt the worst and couldn't walk or dress myself for two months. We called the mortgage company, let them know what was going on. They verbally told us, don't worry about it. We'll put it on the end of your mortgage. Call us in December when you're ready to make a payment. It'll be fine. December rolls around. They're saying that conversation never took place, and now we are officially in default because everything we have tried to send them

is now considered a partial payment because of the two months we were behind. And they send it back. Yeah. Yeah. So how far behind are you? How many months? Since October. Okay.

So October, November, December, January, and February. Five months. Yep. Six. Six with March, right? Yep. Okay. And how much is your payments?

Our payments are $13. Hold on. Let me flip this page back in my notebook. $13,966. Okay. All right. in my notebook 13 90 66 okay all right so uh you're 10 i did something wrong let me see here we're about 8 000 plus behind in default we're still technically in default yeah um my question is because the mortgage company has been just real lovely jerks to work with right now. I did pay $175 to speak with a lawyer who basically confirmed everything that they told me is not just a scare tactic,

but actual fact that they can do with the way our mortgage is worded, which is the fact that they can not only foreclose on our house and kick us out, but then turn around, sell the house for whatever they can get and still come after us for the difference. So my question is, is it financially better for my family to stay in the house until they throw us out and go with the crapshoot as to whether or not they're going to sue us for the difference or try and negotiate something like a deed in lieu of foreclosure? The lawyer that I spoke to said that a deed in lieu of foreclosure was like a 1% chance of happening,

but I just wanted what Dave would do in this situation. Okay. What kind of a loan, FHA, VA, or conventional? FHA. Okay. Well, the deed in lieu of foreclosure would have to go through HUD to be approved. The mortgage company would have to get HUD's approval because HUD is the one guaranteeing the loan. The bank has got no risk.

They're going to get 100% of their money from the government after the foreclosure, and then they'll turn the house over to the government. So the attorney that you hired did not know what he was doing. In a FHA foreclosure, they have the right to come after you for deficit, but in the history of FHA, they never have. They made a policy decision years ago on HUD loans to not chase deficits. Okay. That gives me a little comfort, but Murphy doesn't live with me.

Riley does. Riley is Murphy's cousin who says Murphy is an optimist. Yeah, I know. But the deal is this. You're not going to be chased for a deficit. That's not an issue. So the issue then becomes what is it? Is it financially smarter to stay here?

Maybe. Let's just talk through it a minute, but let's take that part off the table that the big thing a deed in lieu of foreclosure does is it stops the deficit if you do a deed in lieu of foreclosure without recourse meaning they can't chase you for a deficit in this case they're not going to chase you anyway so there's not much benefit to the deed in lieu of foreclosure. It hits your credit about like a foreclosure does. So it doesn't help your credit much. My goal is zero credit score. Yeah, the biggest thing is that they just don't chase you,

and FHA is not going to chase you. So what's your home worth? Best case scenario, $80,000. Okay, and what do you owe on it? $153,000, $4,067, and $0.38. So you're in the hole, $70,000 in Billings, Montana? Why? No, actually, I'm in Fairview, Montana, the middle of no and where. We bought here when we had no choice.

We're a family of three. You always have a choice. No, we really didn't. Yeah, you always have a choice. No, we really didn't. Yeah, you always have a choice. You're not a victim. You always got a choice. You chose to buy there. Okay.

But anyway, so bottom line is the house is upside down. The house is upside down 70 grand. Well, it didn't turn out to be cheaper than rent. You're about to get your butt foreclosed on. That's true. Your theory sucks. But aside from that, the thing is the house is going to go away because there's no reason to fight to keep it. Right? Which is fine.

Yeah. We're not worried about that. Okay. So where do you want to live? Anywhere but here. Okay. I can imagine. You've been through hell there. I Anywhere but here. Okay. I can imagine. You've been through hell there.

I don't blame you. Yeah. A bad car wreck and a lost home. So have you guys got jobs in the area? Yes. My husband has a very good job that he is very loyal to and he likes a lot. He is a lead mechanic at the Ford dealers dealership and his boss is pretty dang good to us and i'm a jack of all trades master of none i'm doing whatever i can to bring in a buck

so what's the household income um last year was about 90 okay good well you guys are hard workers all right um good well i i would uh rent and i would just stay there until they take it because i i don't i'm i'm sure enough if i'm in your shoes knowing what i know that they're not going to chase you and uh and when they do take the when they do take it on foreclosure they're not going to come up the next day this isn't a cartoon and throw you in the street they have to go through an eviction proceedings so you know what i would do is find out what the actual foreclosure date is and i would move the week before they may not foreclose for it may be 9 to 12 months before they get around to it okay because that didn't that'd mean the rest of our debts paid off if it takes that

long yeah and just you know pocket the money make sure you've got good money saved up to make your move, to pay cash for the move and have your deposits for everything else and so forth. But this is just a tragic situation, and you're just going to put this in your rearview mirror now and say, all right, you know, this is a car wreck. What could we have done different to be prepared ahead of time, like an emergency fund and being debt-free, so we're going to get there. And part of this was not in our control.

Part of this is what happened to us. That was a horrible, tragic event, and that's where you get to. But, yeah, there's not an FHA program where they add the payments to the back of the loan. So whoever told you that at the mortgage company did lie to you. That is correct. But I don't think you've got legal grounds to do anything about it. They don't have the power in the collections department to change the contract. And the contract does not allow you to add payments to the end of an FHA loan.

So I don't see any – I'm not going to fight to save this house. You're $70,000 in the hole. It's not worth it. Let it go. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ

to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills.

To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Thank you for joining us, America. Phone number here is 888-825-5225. Morgan is in Boise, Idaho. Hey, Morgan, how are you? I'm doing well. How about yourself, Dave? Better than I deserve. What's up? So my wife and I, we got ourselves into about $250,000 in debt.

What? Student loan. All of it? Yeah, all of it. Who's the doctor or lawyer? Who's the doctor or lawyer? My wife will be shortly. I hope she'll have her doctorate in

pharmacology. A doctorate and she's going to have a Ph.D.? So what do you do with that? That's not a pharmacist. It is a pharmacist. That's actually what's required now. Really?

Yeah. Okay. All right. So she's going to be a pharmacist, and what do you do? I work in manufacturing. Making what? About $55,000 a year. And this $250,000 is all hers?

Yeah, 100%. Jeez, man. Unbelievable. We actually moved across the country, and before, we used to deal finances together, but I've been doing all the finances for the last four years, and I recently came across you. I listened to a few of your books, and I'm just trying to figure out how. I mean, she has a lot on her plate, but she just doesn't want to be involved in finances at all. I'm trying to get her on board, and I'm not really sure how to do that.

Well, when does she graduate? In May. And passes boards after that in order to get a job, right? Yeah. Okay. So she's going to be concentrating on all of that between now and August. I mean, she's completely absorbed in hitting this goal. Okay.

Yeah. um i mean she's completely absorbed in hitting this goal okay yeah but what i would do is just begin to plant the seed that at the time that that happens we are going to start handling things together okay i'm not your daddy i'm your husband and you are too smart to not be involved emotionally in making the decisions of cleaning up this $250,000 mess. So we are going to have to make some very tough decisions together. I am not going to make them by myself. You and I are going to make them. You get a pass through your boards After that it's grown up time

And the two of us are going to sit down together And we are going to make decisions about our future And about cleaning up this mess And how deeply we're going to sacrifice to get that to happen I am not going to drag you kicking and screaming Through $250,000 in debt I have no desire to be married to a woman where I'm her daddy. Now, you can be a little kinder and less blunt than that, but that's the message.

Yeah, I was going to say, how do you say that in a more kind and gentle way? Well, I mean, here's the thing. The number one cause of divorce in North America today is money fights and money problems. You've got money problems. You are going to get sick and tired of carrying this intellectual genius that you're married to and making all the hard emotional decisions for her. You're going to get really tired of it. You're probably already a little tired of it, but you're just too nice to be as blunt and brash as I am.

But by the time 10 years from now rolls around, you're going to be sick of it. And you're going to meet resistance every time you try to create a sacrifice to pay this dadgum disastrous mess off. Because she's probably not going to make $100, $100 and a half. So your household income is going to be like $200. And it's going to take you guys three years of living on, like your college students, on beans and rice to clean this mess up. This is a ridiculous – Yeah, it'll probably be under $200,000. It's a ridiculously large debt, and it's going to take a while.

So anyway, the way you say that is just say, number one, honey, the number one cause of divorce in North America today is money money fights and money problems i've been studying this guy he's making a lot of sense i get it that you're all in until your boards are passed i'm with you on that at that point you and i for the sake of the quality of our relationship have got to work on this together i'm gonna need your help you're bright i'm sorry i'm sorry uh do you think it would make sense for maybe after that period after she's graduated for us to do financial peace together to get us on the same page sure sure lots of people do that um okay but she's got to want to do that there's a conversation that gets her in the path on the path before you just announce hey we're going to this class together i mean you could do that uh sometimes that works but usually it's more like it's very important

and that we work together on this i'm going to need your help um i don't mind doing the details but i do mind carrying the weight of all the decisions and you not having visibility and making part of the decisions so let's walk together and make sure that the quality of our marriage a good way to do that might be that we go through this class that might be what you do but that yeah she's she has you know the way you get through something like a phd program or you know uh you know become an md or whatever you know at that level is you have to have a singular focus, you know, become an MD or whatever, you know, at that level, is you have to have a singular focus. And, you know, what I'm saying is that as a couple, you're going to have to change your singular focus from that once she passes

her boards to cleaning up the mess that was created by getting that degree. So, hey, thanks for the call. Open phones at 888-825-5225. Jake's in Cincinnati. Hi, Jake. How are you? Good. How are you, Mr. Ramsey?

Better than I deserve. What's up? I had a question here. Planning on getting engaged tomorrow? Yay! Thanks. Wanted to get on the horn with you and talk through some goals that I actually talked to my soon-to-be fiancé about yesterday. We've talked about how we're both on board, we're both in the program, and she's working through her debt snowball.

And hopefully, you know, when we've kind of projected this whole thing out, we'll be married with about six grand in the hole. But one day she wants to, you know, work from home and be a stay-at-home mom. And I had the concept in my head that she can maybe stay home with kids one day and we can have some real estate. And I wanted to talk with you through if you think it would be a good idea and if it is, how it would be a good idea to have her be some sort of like property manager. So that could be her supplemental income and maybe just some tips and how to get there and how to do it the best way okay well um we don't tell people and i didn't personally so i'm consistent in that bought to buy real estate until they have their home paid off and then they pay cash for their investment real estate

the length of time it's going to take to do both of those things probably does not line up with having kids and her coming home with babies. I mean, it would be a few more years than that before you had enough paid-for real estate for her to manage it. And I'm not going to tell you to go into debt to do this. That's not a good way for her to be a stay-at-home mom because the risk associated with rental real estate when you've got debt on it is very high, and the stress associated with rental real estate when you've got debt on it is very high, and the stress associated with it. She'd be better off to have a side business of some kind, a side hustle that she just ran from home or some freelancing that she did.

You'd make more money and have less stress and a lot less risk to your household by doing that. So I think probably your first goal for her to, quote, be home with the babies um would be to get your income your personal income to such a position that your family can live on it it's that simple and if you can do that then you're ready to go lots of people pull that off by just simply keeping their lifestyle down and then by concentrating on you know raising your income to be able to hit that goal but no i'm not going to tell you as a matter I'm going to tell you don't go buy five rental houses and think that's going to support her being at home. It'll do just the opposite.

It'll cause all kinds of problems in your life. Charlie is with us in Atlanta. We'll come back to Charlie after this break or sometime shortly thereafter. Anyway, thank you for listening. We're glad you're here. This is common sense for your dollars and cents. Thanks for hanging out with us. This is the Dave Ramsey Show. One Dental is a company I've been telling my listeners about

because I know these guys will save you money at the dentist. One Dental is a dental savings program that allows you to go to one of over 158,000 dental practice locations nationwide and save on things like cleanings, dentures, root canals, crowns, and even orthodontics. Here's the really cool part. You can join One Dental right now and you don't have to worry about high deductibles, waiting periods, or pre-existing conditions. Just find your highly qualified dentist in the network, make the appointment, and start saving every

time you go to the dentist. This is a great cost-saving alternative to expensive dental services and a great alternative to costly dental insurance. It really is that simple. And unless you want to blow your emergency fund, everyone needs to go to the dentist. Folks, this is a no-brainer. Join today at OneDental.com. That's OneDental.com. Jason and Katie are with us in Grand Rapids, Michigan.

Hey, guys, how are you? Doing well, Dave. How are you? Better than I deserve. What's up in your world? Well, we're calling to do our debt-free stream. I love it. Congratulations. How much have you paid off? We've paid off $93,845. Love it.

How long did that take? Well, we started this journey 45 months ago. We didn't know about you 45 months ago. We just knew we wanted to be debt-free. But when I started listening to your radio show 18 months ago, we paid off within the last 18 months $63,696 out of that amount. I love it.

So what's your range of income in the last 45 months? I started off at a household of $51,000 with the two of us, and we were down to zero for a little while, and then now we're at $85,000. Cool. What do you all do for a living? I am a truck driver. I haul gas for Marathon. I am a domestic engineer with a side hustle.

Love that. Very good. Very good. So what kind of debt was this, $94,000? Well, it was, you know, like everybody else, it's all the normal stuff. We had cars, credit cards, medical bills, a small student loan when I got my CDL, owed parents money, furniture, and I guess our craziest thing, we actually financed with a golden doodle, which was like $2,700 with the dog and everything.

Is the dog still alive? No, we actually got rid of it two weeks later because we realized that, well, we didn't have a conducive living environment because we lived in like a small box of an apartment in Florida. And we ended up getting rid of it and took a huge loss on it. So you're paying payments on a dog you don't have? Yeah, pretty much. Yeah. Oh, my gosh.

You guys are fun. I mean, you made every mess possible. Wow. A golden doodle for $2,700 and our living conditions aren't conducive. Oh, my gosh. All right, fun. So tell me the story. What happened that got you guys on board?

You went, okay, we want to get out of the land of stupid and we want to visit the land of smart. Well, in short, it was basically our biggest why was this. Excuse me. It was when our daughter was born 19 months ago. After she was born, I knew we had to do something to get out of debt because we wanted to give her the life that she deserves, and we didn't want her to see her parents battle with foreclosure and bankruptcy like I had to do with my parents. I've had to see them go through that. And so that was the biggest

why. You can't really get rid of those if the living environment isn't conducive. Yeah. And just excuse me, just to backpedal just a little bit further than that. Even before that, before my, you know, I was living in florida and i was working for my stepfather at the time and you know unfortunately he ended up taking his own life due to severe money issues and you know i ended up finding him it was a it was a pretty it was a pretty bad situation and just between that you know seeing what my parents had to go through um and then you got like you got two big wake-up calls, a new baby and a suicide, man. I mean, wow.

Yeah, it was bad. That's 18 months ago. That's when it lit you up. So what did you guys do when you got lit up now? The baby gives you the motivation, we're going to do this, we're getting out of this mess. And 63,000 of the 90 goes in 18 months. I mean, you guys went hard then, didn't you? Yeah.

I mean, really, all it really took was't you? Yeah. I mean, really all I had to, all it really took was for us to look in our daughter's eyes. I mean, that was really the biggest thing. And I knew we had to do something because my wife, she wants her little girl to go to Catholic school, the same school she went to when she grows up. And obviously that's not cheap. And I told her it wouldn't be nice just to pay for this in cash rather than make payments and be stuck with other payments owing other people, and she was like, yeah, and so that ultimately was the biggest sell for her. So what did you do? Tell people what the main thing you've got to do if you want to pay off $63,000 in 18 months,

make an $85,000. Definitely a lot of sacrifice. Yeah, I definitely agree with that. And, you know, really coupled with that is you got to have that huge why, just like you always, you know, talk about on the show, Dave, you got to have that huge why that come to Jesus moment. What did you say? The other thing really is you just, you know, you got to come to reality with the numbers and set that budget. When we listed the amount of debt we had, the types of debt. It was just amazing just how much we had when we actually listed it on paper.

And, you know, you can't get where you want to be if you don't already know where you're at. So you've got to really come to reality with those numbers. What did you sell? Well, really the biggest thing that we had to sell after we bought it, like I said, was that dang dog, that golden doodle. Because I know you make the joke on the show all the time, you know, sell everything to the point where the dog thinks it's next. Well, literally, the dog was gone. Yeah, that's funny.

That was not a joke. Do you sell any cars? Well, yeah. Well, see, really long story short on that, before I met my wife, I had, I bought a, well, I financed a 2009 Mustang GT. Oh. Yeah, that was kind of cool at the time, but stupid now thinking, you know, back on it. Had an impulse buy moment three years later, got a 2013 Mustang GT. Well, now when my wife and I are together, we got rid of that to try to, you know,

save money, and this is, you know, how you always say you can't outsmart stupid, well, I thought I could do that by trading in that Mustang for a pickup truck, because I thought I could save money each month on our payment, well, I did, but ultimately put myself a little further in debt in the long run, so that was really dumb. So, yeah, I had three new cars, and when we figured out our daughter was going to be born, we ended up doing our last rollover. We got rid of the pickup truck and got two pre-owned cars, rolled over the negative equity among those,

which was the Ford Fusion and the Ford Focus. And anyway, to make a long story short, we paid those off, and we were done with that cycle because I realized how stupid that is. Wow. Good for you guys. This is fun. You guys got a bright future. How old are you?

I am 31. I am almost 31. All right. Good for you. How does it feel not only to get control, which is the biggest thing that happened with you guys, because you were just out of control on every front. I mean, cars and golden doodles and everything and then not only did you get not only did you get control but then you you not only got control but you wrestled it all the way to the ground and got out of debt how

does that feel it feels um it just feels liberating it just feels really just it feels really good i mean when we when we made our last payment, which was on her car, I paid off my car literally this past January this year, which it had only like $5,000 and some odd dollars left. I had some money, and, you know, we had some money. I'm like, let's just knock this out. And then I got a bonus and then our tax refund. And we had about, you know, we kind of did things a little goofy,

but we had $10,000 in savings that we had just sitting there, and we didn't want to touch it because, obviously, with our baby. I mean, to make a long story short, I said, you know, my wife and I came to an agreement. We said, listen, instead of fronting this money up front now, let's wait until we get to the last part of our debt snowball and, you know, use the $10,000 then because then we know we're out of debt. We owe nobody anything, and then, then obviously we can rebuild our emergency fund. So that's our last car payment, which was her car.

We paid our largest payment was $10,847.14, and we were done with it in February. Congratulations. Well done. Thank you. We've got a copy of Chris Hogan's book, Retire Inspired, for you. We want that to be the next chapter in your story, that you become millionaires and outrageously generous along the way and i think you're on your way jason and katie grand rapids michigan 94 000 paid off 63 of which in the last 18 months great story 51 000 income down to zero back up to 85 along the journey

count it down let's hear a debt-free scream. Three, two, one. We're debt-free. Ha, ha, ha, ha, ha. Yeah. There you go. Wow. Just like that.

Boom. Doesn't get any better. Man. You know, it's amazing. These stories, there's always a moment in a story. It's almost like you're watching a movie where there's that moment and the music changes. You know, where people's lives hit that point and they go, uh-uh, no more. No more.

I'm done. I'm done. I've had it. I'm sick and tired of being sick and tired. Do you hear those? I always hear that. It's like you come right over the top of that story arc in every one of these stories. It's really there.

They're heroes, man. Heroes always say it. They always say at some point in the story, I've had it. I'm not living like this. This is the Dave Ramsey Show. you can follow me on twitter at dave ramsey dave what time do you go to bed to get up at 4 45 a.m do you actually feel rested yeah get plenty of rest i actually have a little thing on your apple watch that tells you if you slept good if you've ever seen that little sleep app, it's pretty cool. And it said last night I got 100%.

So I scored just like that. But that means you just go to bed early. That's how you get up early, right? I mean, I'm pretty boring. I was in bed by like 9 o'clock. And I didn't, you know, apparently I missed something. There was a show on last night that somebody was all upset about or something. The Bachelor, like, was an epic fail or something. And so I miss all. There was a show on last night that somebody was all upset about or something. The Bachelor was an epic fail or something.

And so I miss all that kind of stuff. So I'm culturally irrelevant, which is probably a very positive thing considering what the culture worships. So, yeah, I go to bed. That's how I get up. It's pretty simple. David is in Bozeman, Montana. Hi, David. How are you? Fantastic. How about yourself, Dave? Better than I deserve. What's up? So I've got kind of a situation I've almost, I don't know,

put myself into. I own a home in Billings, Montana, which is about two hours away from Bozeman, and my job moved me to the Bozeman area. So I currently rent in Livingston. My tenants moved out of my Billings house. We have the option to sell the house, move back in, re-rent it, or whatever, you know, the decision is made. My job lets me kind of relocate wherever and just upon my supervisor's approval, but I'm just looking to get some advice on how to move forward with this. Where do you want to live? Well, Billings would make us closer to family,

and I think that would be appropriate for the time being um i would really like to be able to help my wife out and have her closer to immediate family so and billings is where the rental house is yes sir okay why did you move away um my job has kind of brought me to the Bozeman area. But now your job will let you go back? I've actually moved to a different job as of January 2 of this year. Oh, okay. So, yep.

Okay, so your new job will let you move back? Yes, sir. So the only reason you moved in the first place was a job transfer? Yes, sir. Okay. And what do you make a year? I've been blessed with a newer income. It's going to be about an average take on before overtime should be about $67,000. Okay, cool.

And they'll let you move that to Billings without any trouble? I travel a lot, so I really just need a home base wherever, and just, you know, that's about it. So, yeah. All right. And so the airports or the roads or whatever, the central location is good enough? Yeah, yep. It's not like adding two hours to your daily commute or something? It's, you know, between Bozeman and Billings, it's kind of a wash for drive time,

so it's just a matter of, you know, where I want to be based at, I believe. Sounds like it's time to move back into the rental house. Right. I don't know why you wouldn't. Right. My current rent is $950, and my mortgage in Billings is like $1,003, so it's just a matter of... It's a wash. It's a wash there, too.

The utilities will be cheaper in the home that I own, and it's under my name, so it just makes more sense to me. Yeah. Why would you not move into the Billings house? The sale of the house would allow us to pay off some debt and, you know, just move better in that direction. How much debt have you got? A little bit quicker.

Total about $12,000. Well, you ought to be able to do that on $60,000 anyway. Right. So move to Billings. Move back in your old house. That's what I would do. Brock's with us in Oklahoma City. Hi, Brock.

How are you? Doing well, sir. How are you? Better than, sir. How are you? Better than I deserve. What's up? I just had a question. My fiance and I, we're doing your steps, and we'll be married in November. And at that point, the only debt we should have will be the house and my student loans.

Wonderful. And we're wondering which one to pay off first. Student loans. The house. Okay. How much do you owe on the student loans wonderful and we're wondering which one to pay off first student loans the house okay how much do you owe on the student loans about a hundred thousand whoa who's the doctor i wish i was but what's your degree in uh business and then i have my master's as well in mba yes good what's your household income going to be in november uh 130 000 awesomeness okay how much do you owe on your home it'll be about 95 000 okay i see why you're asking the

question then because they're about the same size here's the thing the stupid student loans will stay around your whole freaking life and they will dog you if you don't punch them in the face with great passion. Okay. And so you just have to go, this is a $100,000 Mount Everest climb. I make $130,000. We're going to pay this thing off in under two years. Debt-free about the house in under two years. Boom.

That's what we're doing. Put the focus on. Get mad. Punch it in the face so much that's what we're doing put the focus on get mad punch it in the face so much that it just falls over out cold because these things they just i i get you've got an mba i get you're looking at interest rates i get you're looking at secured asset versus an unsecured asset i get all of that i understand all the concepts here's the deal get out of debt and clear the student loans first if you will do that you can be completely debt-free house and everything in under five years what a great way to start your married life oh my goodness you are on track to kill it

pablo is with us pablo's in odessa texas hey pablo how are you hey. Hey, Pablo. How are you? Hey, Dave. I'm doing good. How are you? Better than I deserve. What's up? Well, this is going on with me. I've managed to save $20,000 within the last few months. Way to go. And it's been awesome. And, well, I have some student loans that I've actually defaulted on.

How much? And my question is $47,000. Okay. And what's your household income? I make about $40,000 a year, but with overtime, I'm pulling about maybe $60,000 or a little bit more, maybe. And that's where your saving of your $20,000 came from? Yes, sir. Way to go, man. Good, good.

And I'm just trying to figure out, should I pay these defaulted student loans, or should I invest that $20,000 in something else? Oh, no. No, you wouldn't borrow money on a student loan to invest. And if you don't pay a student loan and invest it instead, it's almost the same thing. You follow me? Okay. So, yeah, you've got to clean this up. You know, it's been – how long have those things been laying over there?

Oh, man, it's been maybe going on five years. Yeah, see, they just smell up the house the house just smells bad sally may doesn't even keep her own bedroom clean and that's how i feel like i feel like it's a a weight on my shoulders and i feel like maybe once i pay it off i'll feel better about it i can promise you you will plus it's not going away it's only going to get worse it's like a splinter under the skin it's just going to fester and you're going to end up getting gangrene have to amputate something no man get after it 20 000 boom that leaves 27 more overtime boom do that in a year okay knock it out man that sounds like yeah okay and you'll be done

you'll be done man a year from now you're debt free okay i was thinking that'd probably be the best route you're right that was right. That was the right answer. The way you were thinking is the right way to go. Thanks for calling in. Guys, you hear this theme. You hearing the theme? The theme is the people that get out of debt have a couple of attributes that they have developed, and they're a choice that you can just decide.

Number one, they get sick and tired of being sick and tired. They say, I've had it. And there's this thing that happens. Those are the people get out at the people that focus the ones that can focus on just one thing and say, I'm cleaning this up. You can clean up mountains of student loan debt. You can clear up that stupid car debt. You can clean up anything you've done that was dumb.

I've done dumb. I know what dumb looks like. I've looked at dumb in the mirror. He looked back at me. I got a PhD in D-U-M-B. I understand having done something dumb. But the point is, get over it. Get over it.

Get over it. Say, I've had it. I'm not living like this anymore. I've had it. When you have that moment, then you become extremely passionate, angry, and focused in a good way. That causes you to not care what other people think. It causes you to cut the junk out of your budget. And it causes you to be able to throw big piles of cash at these debts.

Listen to these numbers on these people they're calling in. They've got the money. You've just got to live on nothing. Beans and rice, rice and beans, scorched earth, baby. And sell so much stuff the kids think they're next. Let's get focused and get out of debt. That's what does it. That's what does it.

It's not some mathematical genius formula. It's being angry in a good way that causes you to focus and not listen to any other noise. This is The Dave Ramsey Show. most downloaded podcast last year. To get your daily dose of motivation and inspiration, subscribe today.