The Ramsey Show - App - Pay Attention to Your Income! (Hour 2)

Episode Date: August 8, 2019

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🎵 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. Open phones at 888-825-5225. That's 888-825-5225. Well, we are in the new Ramsey headquarters.

And next week we will be open for business. And for those of you in the public to come by and visit us, the bookstore is being assembled now, and we should have our homemade cookies and coffee going by the 15th is the official opening date, but you probably come by a day or two before that and still get in around here. We are still a little bit under construction right this second, but we're almost there. Our new studio that i'm broadcasting in and ken coleman's broadcasting his show in are both on the glass here and you can come in and

enjoy uh enjoy a full display of everything we're doing and and just get to come around there's a a new debt-free scream stage for picture taking and so forth. And there's a timeline of our history that you can visit and a place for you to take pictures for yourself and of yourself and a lot of stuff going on. So it's going to be going to be a lot of fun. We'd love to have you and we'll be open for you guys next week. We've been in here for about two weeks and we've certainly got all of our offices dialed in. These public areas are the last ones to come together, and they're almost there.

So we're excited for next week. Thank you guys for coming by and visiting us. It's easy enough to do if you just Google Ramsey Headquarters or Dave Ramsey Show or your Apple iMaps. Either one of those are updated, and you can find us easy enough at our new location south of Nashville in Franklin, Tennessee. Beautiful town of Franklin. So honored to be in this area. And a little bit of a winding thing back here in the country to get back and see us. We're kind of out on the edge of the growth around here and back in a field.

But you can get here, and when you do, it'll be worth the trip. We'd love to have you come by and see us. Open phones at 888-825-5225. Lisa is starting off this particular hour in Idaho. Hi, Lisa. Welcome to the Dave Ramsey Show. Hi, Mr. Ramsey. I'm a huge fan. I was raised in a household without debt, and I've pretty much lived my whole life without debt. And I'm thankful I took FPU just to make sure I didn't get tempted into starting some debt. But I'm in

a really strange situation right now. A little background information. About a year and a half ago, my ex-husband called and said that his company was switching to an out-of-house payroll company. So my payments would be slightly different. They would be every other week instead of twice a month. And so some months I would get three payments. And shortly after this new out-of-house payroll company took over, they kept screwing things up. I couldn't get anybody to respond to my phone calls. Finally, I had to get health and welfare involved.

Several months went by of just erratic payments as they tried to figure it out and get things caught up. Well, in the meantime, I got engaged and my budget was changed between wedding expenses, paying for all those with cash. And then my fiance helping with some of my regular bills, I just wasn't paying as close of attention as I should have. And last month after the wedding, I was all proud of us for paying for the whole wedding with cash and not having any debt. I sat down and I looked and I noticed that I've been getting too many payments, too many, too many child support payments. Um, so I notified

my ex-husband and his company swears they're paying the right amount and they're taking the right amount out and they're not doing anything wrong, but I've literally been overpaid around $8,000. And at some point, somebody's going to come asking me for this money back. And so I wanted your advice as far as, you know, how do I prepare myself for this? How are you calculating you've been overpaid $8,000 in just a matter of months? And how in the world could that happen and you not notice? $800 you might not notice eight thousand dollars well i just got done um with a thirty thousand dollar wedding and like i said my yeah but eight thousand dollars turning up most people wouldn't notice yeah yeah you would think but it was like six hundred dollars

one month or a thousand dollars the next month and we were just sending money out left and right. So I kind of was at the point where I was just checking to make sure I had money in my account. If I had money in my account, I was good to go. So how much is he supposed to pay a month? He's supposed to pay two payments of $628. Okay, so he's supposed to pay $1,250 a month roughly. Yeah. And you have received how much a month?

Well, it's very sporadic. So I printed out the total history, and I noticed the first occasion of it was, well, in July of last year, there were no payments. And then in August, there were five payments. And so I'm like, okay, well, they're getting caught up. And then in September, there was one payment. October, two payments. November, three payments. December, five payments. And so I'm like, okay, well they're getting caught up. And then in September there was one payment, October two payments, November three payments, December two payments. Then January there were four payments and I didn't notice that extra payment in January. These people are idiots.

I can't believe it. I mean, and then in March there were five payments. So it was so sporadic. Like I said, I was just checking to make sure there was money in the account paying bills for the wedding i wasn't paying attention i just wasn't i honestly just wasn't paying attention well listen so where's the money have you set it aside well i was i was spending it yeah but i have i mean but i had kept eight thousand dollars in savings for our honeymoon we were going to take a honeymoon next year. So I have $8,000. So if they say, you've got to pay us back right now, I have the money. But that's my honeymoon fund. So I'm kind of like, well, it's not really my fault that they overpaid me.

Yeah, it is. You haven't been keeping up with it. You had your head in the sand. Of course it's your fault. They're screw-ups, but you didn't even know $8,000 too much came into your household. Yeah, that is your fault. Over the course of a year. It doesn't matter.

It's a lot of money. I mean, you really did. You really were not paying attention. They haven't even noticed it yet. You really were not paying attention to your freaking stuff. I mean, you really had your head in the sand. You were not doing a budget. You were not managing money.

You didn't have a clue. I was in the sand you were not doing a budget you were not managing money you didn't have a clue i was in the process of getting married i was very distracted and working 60 hours a week so so this is your fault if i had money okay but now what how do i pay this back i mean do i just empty out my savings and no i wouldn't i wouldn't empty it out i mean i would just uh but over a course of the next few months, I would be making sure I had the right amount. And for God's sake, start tracking it now. Oh, I have been.

Oh, yeah, every once in a while I notice I have been, and I just set those payments. Okay, so let's say this happens, okay? You go on your honeymoon. You come home. You build up $8,000 to be able to pay them back. You print out the spreadsheet that shows that you owe them eight thousand dollars you send it to your husband you send it to the goofballs that cannot seem to get out two checks a month i don't know why that's difficult um and uh i would go ahead and send it to health and welfare and go, I owe you $8,000.

Look at this freaking sheet. I mean, it's sixth grade math. If somebody in this entire story would bother to freaking pay attention, one of you people, between you and this ridiculous payroll company or your husband, ex-husband, could actually figure out that this is not right, then we can just transfer the money back over to where it should be, or you can give him a credit, and he doesn't have to pay you for a while, which would be even better. Just do that.

Just say, I'm not going to pay you back, but you don't have to pay me for a while until we get caught, until I get caught back up with you. And gee, but you guys all got to start paying attention. Time for all of you to be grown-ups. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance

is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive.

It's not complicated, and Zander will be there as your guide every step of the way. Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice, and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. Thank you for joining us, America. Rob is with us in Salt Lake City. Rob, welcome to the Dave Ramsey Show.

Thanks, Dave. Thanks for taking my call. It's an honor to speak with you. You too, sir. What's up? My wife and I are debt-free except for our mortgage this month. And my mind has started moving to thinking about other things in our finances. Good.

The question that I have on my mind at this point is, we have a 30-year fixed-rate mortgage, but we took the mortgage out before we started following the Dave Ramsey program. And so it's an FHA loan, and we're spending about $200 or so a month on the mortgage insurance premium. Right. What is the interest rate? Three and a half. Okay.

All right. And what's your loan balance? 204. Okay. And what's your household income? 120. Okay. And what's your household income? 120. Okay. Oh.

So if you lean on this mortgage, how fast do you think you're going to pay it off if you don't refinance it? You just said, okay, 204 out of 120, I'm just going to beat on this thing. I'm going to be done in five years? Probably longer than that. We've got five kids, and number six is on the way so yeah we're super excited okay so what what is your what's your projection on paying off your home well my thought was to refinance into a 15 year to get rid of that 200 um i know i know but i'm that's not what I'm asking. I'm asking, making $120,000 with the sixth kid on the way,

how fast do you pay off 204, regardless of interest rate? Probably like a seven to ten years. Ten years would be $20,000 a year. Okay. That'd be easy. Okay. Okay, so seven years would be $30,000 a year okay that'd be easy okay okay so uh seven years would be 30,000 a year okay right i'm just doing division right yeah no you're you're exactly right i haven't i haven't

done it in the in those you know basic math well the reason i'm doing that is is if you're going to pay this thing off in five years you're probably not going to benefit a whole lot by refinancing. Okay. You might. The $200 a month is killing you, but your interest rate is competitive. And if you take a mortgage and pay extra on it, it pays off in that amount of time. So in order to convert it from a 30 to a 15, you don't have to refinance.

The only reason to refinance would be getting rid of the PMI and saving on your interest. If you were to put this on a 15-year fixed, you probably could get about a 3% today. So you might save a half a point there, which is about $1,000 a year, and you're going to save about $2,400 a year on getting rid of the PMI. So that's about $3,400 a year for five years is $15,000. Okay? And it'll probably cost you $4,000 to refinance. So this discussion is probably going to save you about $10,000 if you pay off your house in five years.

Okay. And so it's okay to refinance it if you can get a 3% fixed rate, 15-year minimal closing costs. Right. But I think the big thing is just to go ahead and let's – you don't have to stay on gazelle intensity and live on beans and rice, rice and beans once you're at baby steps four, five, six, which is where you are. You have your emergency fund in place. We're putting 15% aside for retirement. We're starting kids college, and we're going to beat on the house.

And I think your house is five to seven years from being done. I think that's what you're going to find. Because the other variable we haven't even built into this is I suspect five years from today you'll be making more money than you make now, wouldn't you? Yes, I hope so. Yeah, so, I mean, that would be normal. And so, you know, that's not even in this equation. So somewhere in that five- to seven-year range is probably where you're going to pay this thing off. So if it takes you four years to break even on your closing costs with your PMI and interest rate savings, well, don't bother doing it.

It ain't worth it. But I think it's going to make you $3,000, $4,000 a year, and it's probably only about a $4,000 or $5,000 refinance cost. So you probably do need to do the refinance but also then let's go ahead with a without the gas pedal pushed all the way to the floor but still have our foot on the gas have an intentional plan of when we're going to have this house paid off okay and again it's not gazelle intensity beans and rice but just paying attention. Right. And don't just assume a 15-year.

No, let's assume a 7 or a 5 or divide 210, and what are we going to put into it? You know, 200,000, what are we going to put into it? So good call, man. You're going to be there. Way to go. Very, very well done. Kyle is with us. Kyle is in Kentucky.

Hi, Kyle. How are you? Hey, good evening, Dave. Listened for about 20 years. Thank you. This is the first time I've ever had to call. Okay. Well, thanks for calling.

How can I help? Our grandmother is 90 years old. She lives on her own. Most of the time she does have some assistance from family. We've got a cousin that we have caught on video. He has stole medications, household items, food, laundry items. He has also got into forging checks in her name, which has now totaled into the thousands of dollars. Have you put him in jail?

No. I swear I don't want it for his arrest. He's a thief. We have just installed the camera, and we caught what we thought was going on. My father is the oldest of eight siblings. So he's trying to seek guardianship. However, three of the siblings do not want my grandmother to lose control of checking and her meds and so forth. So we really don't know what to do from here or how to talk to the siblings about it to get something done.

You know, what do we do? Just call the police and have him arrested. Okay. That'll fix it. All right. Well, you know, I want to run into my father. Listen, it's scum that steals. Right.

It's super scum that steals from their own freaking grandmother. I mean, what kind of scumball is this guy? Well, this has gone on for years. That's the worst of the worst. It's gone on for years, and without real proof until recently, we now have the proof. Yeah, yeah. So, you know, you can call him up and say, if you ever set foot on the property again, we have cameras installed, we're going to have you put under the jail.

Well, I actually tried to confront him. He got away from the house less than a minute before I got there. It was that close. So you don't have any way to contact him? He actually does not have a phone that I know of currently. And does not have a place of residence? He does. Okay.

Well, I mean, you can ride over there and just tell him, next time you're on the property, we're going to have you arrested. Okay. Or just go ahead and have him arrested, either one. I don't have to have the siblings' permission to do that. The guy's a thief. He's stealing from your grandmother. He is.

If he was a neighbor next door, if he was a stranger, if he was your cousin, none of that really matters. He's just a thief. Yeah, yeah. stranger if he was your cousin none of that really matters he's just a thief yeah yeah that's uh that's i got that's going to be our only option from here yeah because your family listen your family's screwed up man it's uh it's uh well we've got a couple of enablers so we need to hopefully address those as well they they now know what's going on so i'm hoping this all comes back around and we can do something about this pretty quick. It's up to you, but, I mean, you call me to say, you know,

you don't have to have guardianship and have to have everybody's agreement to put the guy in jail. And so he's going to stop, or I'm going to put him in jail if I'm in your family. I mean, what kind of scum steals from his grandmother? That's just hillbilly stuff, man. Put a stop to that stuff. I know how that works. I know a bunch of them people.

I grew up that way. There's only one way to deal with that kind of hard head, and that's deal with him. Oh, man. What drama. Yeah. Just slap it down. This is the Dave Ramsey Show. We'll be right back. Becky is with us in Kentucky. Hi, Becky. Welcome to the Dave Ramsey Show.

Hey, Mr. Ramsey. I'm so excited to talk to you today. You too. How can I help? Yeah, we've gone to Financial Peace University through our church, so we've got that in our lives, and we're really working hard on our personal side. But we do have a couple of small businesses, and I'm wondering, how do I apply those baby steps to our small businesses?

Is there anything different? Are the steps in the same order? I don't use the same exact baby steps when I'm dealing with business. We certainly use the same exact baby steps when I'm dealing with business. We certainly use the same principles. The principles are have a plan, a budget, live on less than you make, meaning your business should not spend more than it takes in. Obviously, that would be taking a loss instead of a profit. Always save money so in business you'd have retained earnings and avoid debt.

Now, does your business have any debt? Yes, yes. We have what I call the huge property loan. I've been looking at it like the mortgage for our house. Right now it's sitting at $570,000, and it has an interest rate of 4.35%. Okay, and what is it, a farm? No, actually we have two car washes and an office building. Okay, all right.

And you operate the businesses on this property? Yes. Okay, so this is a mortgage on a commercial property? Yes. Okay. Are you personally signed on it? I assume you are. Yes. Okay. Are you personally signed on it? I assume you are. Yes.

Well, they're covered under LLCs, and my husband and I, we're 50-50 partners on both. And I assume you're guaranteed it personally as well. Yes. I'd be surprised if you got a loan that size without it. Okay. Good, because a small loan like that usually will require a personal guarantee. As a commercial loan goes, that's a small one. Okay, good.

All right, so you've got a real estate debt associated with your business. What other debt have you got in the business? Well, at the end of this month, I'm making the last payment on the equipment loan. And then, of course, you know, the baby steps, the next thing to do is top off your savings. So I was wondering if that was the next step or... Well, what I do in business is I say take a percentage of your net profits each month. You should be doing a profit and loss statement each month. And we do this here at Ramsey.

At the close of the books each month, we take a percentage of the net profits. You decide what percent that should be, and set it aside to grow your retained earnings, to grow your business emergency fund. And that retained earnings in business can be used for more than just emergencies. It can be used just for cash flow crunch. It can be used for buying equipment. It can be used for all kinds of things. And beyond that that then i would

begin to try to pay this uh commercial loan off uh but that's more of like a baby step six item for you personally because it's really a personal loan on a piece of investment property is really what it is yeah i mean if you look at the bottom line, we are guaranteed on the loan. Yeah, it is. It's just a big piece of investment property is the way I would look at it, and I would just put that in baby step six. How much do you owe on your home? Right now we're sitting at $88,000. Okay, and what is your household income taxable a year?

That's a good question. He has overtime and stuff, so it's hard to say. It's usually about right under $4,000. But you make money on these businesses, I assume. Yes, yeah. Well, I'm too worried about paying things off. I do have one employee pay him. What's the profit on these businesses that you're paying taxes on? It's about

$20,000 a month on average because we have our high months, we have really low months. It's all weather related. Is that gross revenues or profit? That is gross. Okay, what's your profit? Yeah, I'm learning. Okay. Well, you have expenses. You have revenues minus your expenses of operating the business gives you the net profit of the business. Yes. Okay. And so I assume you're running these car washes, right?

Yes. And so you're running pretty good payroll at those, aren't you? And I'm able to make the payments and then some because i do have an employee and i am making some extra payments here and there that one what i asked what are the expenses of operating the car wash you have one employee let's see yeah because it's a coin operated oh okay we just stop by every day make sure it's clean make sure everything's working, nothing's leaking. So really just fixing, repairing things and paying this one person are your only expenses?

And I pay myself and my husband. That's not what I'm talking about. I'm trying to get your profit that you're paying taxes on. I assume you've turned this over to your accountant and pay taxes every year, don't you? Definitely. And we're making the quarterly pre-tax payments. Right, good. Okay, so if you have a gross revenues of $20,000 a month and you spend $5,000 on repairs and this employee, you would have a net profit of $15,000 a month. Well, then there's the chemicals and utility bills and bills and stuff well that would be one of your expenses how much does all that add up to be if you add both the car washes together that would

be about four thousand on utilities um anywhere from four to six thousand on um chemicals okay um and then let's see What's the employee cost? I think it's about $1,000 a month. Okay, that's $11,000 so far, and you're taking in $20,000. Yeah, and then I pay myself $1,000 a month. I'm not talking about paying yourself. I'm talking about real expenses. I pay employment taxes and stuff on myself, too.

You're going to either way. I'm just trying to determine what the profit of the business is, not counting what you guys pay yourselves. So it sounds like you might be making $8,000 or $9,000 a month before you pay yourself anything. After chemicals and utilities and the employee, $11,000 or $12,000, and you're bringing in $20,000. So you need to do a P&L like that on your business like we just laid out.

That was what we did. We just did your P&L, okay? Okay. And then you would say, okay, now I've got to pay me, and now I've got to pay the payments on the building out of my profits. But the business itself has a profit, and out of that you pay yourself, and out of that you start to pay on this other stuff. So bottom line is, you guys, it sounds like you've got $100,000 a year coming out of this thing anyway,

net profit, taxable income is what my guess is, and you're using it to pay you a little bit and to pay down this big mortgage, and you make about $40,000 a year other than that is what you said, right? He does. Well, his electrical job that he has, he brings home probably $75,000 a year. Oh, I missed that. Okay. On the personal side.

Okay. So basically we got about $600. I'm sorry. We got about 600 grand in Baby Step 6 stuff. And, you know, you're making 100 and a half to 200 somewhere in there. So you got to just start looking at it that way and saying, how quick are we going to knock out these mortgages? I'd knock out your home mortgage first. And then the last one I would do is the big commercial mortgage, both as Baby step six items is what I would do.

But you really do need to get with your accountant. Jump online at DaveRamsey.com. Find a bookkeeper, a CPA that we have for taxes, and you need to get a set of books where you actually understand what your business is making as a profit um much better than you do today and so that that's a really good way to do that but the baby steps themselves we don't use in business in your case you don't have anything in business to pay off except this one loan and we're it's a really a baby step six investment

property loan anyway so if you want to leave some money in the business for retained earnings, you can do that like we talked about and then just go from there. Hey, thanks for the call. We appreciate you joining us. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Common sense for your dollars and cents.

That's what we do every day here at The Dave Ramsey Show. Thank you. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. Faith is with us in Virginia. Hi, Faith. Welcome to The Dave Ramsey Show. Hi, Dave. My question is, last night my husband and I met with one of your ELPs for real estate.

We're looking to buy a home next year. And so we were trying to figure out exactly how much above a down payment we would need for various fees, like closing costs and homeowners inspections and all of that. And it's about $15,000 to $18,000. And we have $3, dollars saved above our emergency fund and if we went like gazelle intense on saving for the next six months um we could save about fourteen hundred dollars a month my question was if we stopped retirement we could push that number closer to two thousand and have that fifteen thousand dollars that the ELP recommended that we have. And so I didn't know if it was okay to push pause on Baby Step 4 to save for the next like six to eight months to make sure that we have everything ready to go and are ready

to buy a home. Yes. People do it all the time. We call it Baby Step 3B, which would be before you do Baby Step 4, you save up a down payment for your house above your emergency fund. And as long as you can do that in a fairly short period of time, which you can, then Baby Step 3B is fine. I don't want you doing that for five years.

Right. But for a year or something like that is not unusual at all. People save up for their first home. All right. I thought that was what you would say, but my husband wanted me to check, so I was checking. Thanks. Good luck with it. I'm glad you're getting your house.

Victoria is with us in Illinois. Hi, Victoria. Welcome to the Dave Ramsey Show. Hi. Thanks for taking my call. Sure. So I just turned 30, and I'm new to your show, so I've had a major financial wake-up call. My husband and I, we owe $115,000 in student loans combined and about $10,000 in credit card debt.

We do own a townhome here in River Forest. It's a suburb of Chicago. So as you can imagine, the taxes are pretty high here. So we're thinking of possibly selling because we have an equity of at least $80,000, possibly $100,000 based on what the current market is. And so we're debating whether or not we should just sacrifice and rent for a couple years since this is not our forever home and really focus on paying off our debt. I'm not sure if that's a good idea or if we should still, you know, stay where we're at. What's your household income? It's $125,000. Okay.

I did not hear you saying you hate your house and you would sell it anyway, even if you were debt-free. It sounds more like, okay okay we may sell it someday so we might as well do it now so we can push the debt away yep i think i stay in this house and fight this debt down okay because i um number one like you said you're new to this and i think it's going to be a valuable exercise for the two of you to learn to live on a budget and learn to live sacrificially to begin to plow through this debt, chop up these credit cards and get rid of them, have that plastic surgery moment, right?

And then if you reach a point anywhere along here that you say, you know what, it's time to sell this house whether we were debt-free or not. We just don't want to live here anymore. If that were the case, then I would go rent for a little bit until you cleaned up your debt and saved up a new down payment. But just to become debt-free, you make enough to clear this debt in two to three years. Okay. So my husband does contribute to his 401k i would stop that stopped okay temporarily while

we're in what we call baby step two which is paying off all debts except your home smallest to largest credit card debts to student loans okay and stop anything you don't need to go out to eat you don't need to be going on vacation you need to be on beans and rice scorched earth budget and attack this debt with a vengeance because what's been happening is you guys have been relaxed oh maybe a little sloppy even with the handling of your money you've not not been intense, for sure. You've not been intentional, for sure. You were sloppy enough that you at least spent $10,000 more than you earned, thus the credit card debt. So basically, you're kind of treading water.

You're making no progress on the student loans, and you make good money, but you've been spending all of it and then some, and that's where the $10,000 in credit card debt came from. So what I'm suggesting is we're going to cut this way down. We're going to get real organized. We're going to get real specific. We're going to get real sacrificial. We're going to cut up these credit cards and pay them off immediately.

And then we're going to tear into these student loans. And I'm talking, you know, $3,000, three four thousand dollars a month going on these debts you have no life and that's what i would do and then when that's cleaned up then that might change the decision on the house you might decide to sell then or you might decide to stay a while longer once you don't have this hanging over your head so but if at any point you're going to sell anyway then go ahead and sell pay off the debt and rent for a little while until you have your down payment saved. Good question. Thank you for joining us.

Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Wendy is next. Wendy is in Delaware. Hi, Wendy. How are you? I'm good, Dave.

Thank you for taking my call. Sure. What's up? I have good, Dave. Thank you for taking my call. Sure. What's up? I have a quick back story and then my question. I'm 52. I've been married for 30 years. And the back story is 10 years ago we had a bankruptcy. And in January of this year we took FPU.

And we are on Baby Step 1. However, two years ago, my husband... From January to now, you can't get $1,000 together? No, we have that. Okay. Why are you not on Baby Step 2? Well, that's my problem. My husband, two years ago, insisted on buying a nice home, and we had a major disagreement about it. He won, so we bought a home for $273,000.

The home needed upgrades, but he promised he would not upgrade. He did upgrade and added another $50,000 to our $120,000 at the time other debts. So we have a total debt of $443,000. We bring home $110,000 a year. So combined, it's about $6,000 a month. And $6,000 comes in, $6,000 goes out. And what he is asking for me to do now is something I need help with. He wants us to take, he wants to refinance the home since the interest rates have dropped.

And in order to do that, our current mortgage company said that he had to get his credit score up 10 points. He wants to take out a personal loan for $35,000 to put on the credit cards that have more than a 20% a month interest. And then he wants to do a cash out at the refi of $35,000 to pay it off. And the difference in the house payment is $200, and it adds two years to our 30-year mortgage. I don't know what to do. Well, I mean, lots of people do what he's talking about doing, and lots of people stay broke their whole lives.

You've been following his plan for quite a while, and it hasn't worked. At what point is he going to stop trying to borrow his way out of debt? I don't know. Yeah. He's got to stop borrowing. And this scheming and scamming and trying to do stuff you can't afford to do instead of actually rolling up your sleeves and actually saying, we're going to live on less we make. We make $110,000 a year and we're broke.

It's time to address it. So you don't have a financial problem, you have a marriage problem. Yeah. So you guys need to sit down with your pastor and he's going to have to decide. Because, obviously, he flunked Financial Peace University. You can go back through, by the way, if you want.

But you flunked the first one. He did. And so you cannot borrow your way out of debt. All this gyration for $200. Good Lord. It's time to decide to smack debt in the nose. This is the Dave Ramsey Show. Hey guys, it's Blake Thompson, Senior Executive Producer for the Dave Ramsey Show. This hour's

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