The Ramsey Show - App - Should I Sell My Car To Pay Off Debt? (Hour 2)

Episode Date: September 26, 2022

George Kamel & Dr. John Delony discuss: Selling a car to pay off debt, Getting inspired to get focused with money, Tithing on a home sale, Getting out of $135k of debt. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving in storage studios, this is The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, joined by Dr. John Deloney today, and we are excited, pumped even, to take your calls about life, money, relationships, marriage, boundaries, mental health, anxiety, you name it, we are here for you. Dream team. That's right. Thank you, John, for that. Poorly timed, but you know, we're working on it. This is a team effort. That's what my wife tells me. I'm the worst with timing. It's all right. You're doing a great job. Thanks, man. I don't know if this is therapy for you or you're going to actually help people today,

but either way, it's going to be a good show. 888-825-5225 is the number to call, and we will get you on the lines. Alex joins us up next in Los Angeles. Alex, welcome to the show. Thank you very much. How's it going? How are you? We're doing great. I'm doing well. Yeah, I just started listening not too long ago, but I heard a lot of folks with similar issues to mine, and so I thought I'd give it a call and get scolded by Dave. Welcome to the club. We will be his proxy today.

We have taken our share of scolding, so we're happy to pass them along. What's up? Right on. So, you know, recently I've always kind of been in control of my money and life and everything. But recently, I guess, you know, I got married a couple of years ago and the wife, sorry, we bit off maybe more than we can chew. We did buy a home for five hundred ninety K. It's worth, you know, about eight now. I use the VA loan. So zero down. I rent two of the rooms out pretty much for the last two years. So house hacking, I believe it's called. So it has made me money. I've only paid about half the mortgage. I tried to sell the house in June. I was on the market for like three, four months.

You know, I stood, I was going to make about a quarter million in profit. And unfortunately, it didn't sell. The market, you know, did what it did during that time. And I also have a sports car. It's pretty expensive. I did refinance it once. And I have $18,000 in credit card debt. I paid $2,000 last month. I expected it would go down. It was $16,000 last month. I thought it would and I have $18,000 in credit card debt. I paid $2,000 last month.

I expected it would go down. It was $16,000 last month. I thought it would go down to $14,000, and now I look at it, and it's $18,000, and I paid $2,000 last month. Well, the credit card interest is insane. What's the interest on that card? They're like 24% or something like that. Yeah, that'll climb real quick.

And what's left on your car loan? The car loan has 25K left. What other debt do you have? And it's at 3%. What's that? What other debt do you have? I have the house, the car, and the credit cards. That's it. Okay. So we'll leave the house alone for now. We are focused on our steps. Baby step one, $1,000 starter emergency fund, baby step two, all consumer debt except for the house using the debt snowball.

Have you heard about those Baby Steps? Yes, I'm somewhat familiar with them just from like the last month or so I've been listening. Is that your one car, the sports car? We also have like an EV that we leased. It's very cheap, like $230 a month. Wait, so you have a lease as well? Yes, sorry, we do have a lease. That's my wife's car. So that's more debt. How much is that? That one is $230 a month, about $100 for insurance and like $40 to charge it. So relatively cheap. Okay. Well, we call leases fleeces because it is the most expensive way to operate a motor vehicle.

So whatever the early buyout amount on that is, I want you to do your homework and figure that out. And we're going to throw that into the debt snowball if you want to keep it. You know, it's $27,000, I believe, is the residual value. And I could actually sell it for about $34,000 right now. So that's what I would do. And I'd probably also get out of the sports car. What's the sports car worth? The sports car is worth about $55,000. I bought it for $60,000 like a year ago. And even with the mileage, it still held its value because of the market,

but also because it's kind of rare. And I believe that they've only sold about 2,400 of them since 2017 in the U.S. So I do believe that it's going to retain its value pretty well over time as they're going to stop making them here soon. Okay, Alex, these are not investments. Yeah, I'm going to hop in here and then – sorry, George. I'm doing some beautiful mind math trying to help our friend Alex out. Listen, Alex, here's what you've got to decide.

You live in a fantasy world where money exists and it kind of doesn't. I was going to make a quarter of a million dollars. It just didn't happen to be there, and this car is going to probably hold its value. You can live in that world, and it's going to be chaotic, and you're going to stumble through. You're going to be married and having roommates in your house with some sort of house hacking scam.

Here's the deal. You can play that game, brother. The game that we play over here is I sleep really deeply at night. And when I laugh, I laugh from my guts because I don't owe anybody a freaking thing. Nobody. And I drive not a cool car that's not holding its value because I seriously don't care. So you see what I'm saying? So we're playing different games.

If you want to play the game you're playing, we're not the right gang for you, dude. If you want to have your life back, we're all in. See what I'm saying? Gotcha. I'm listening. Yeah. Okay.

This is like a radical way to live, man. And what happens is you create a halo around you your buddies are gonna want to know dude why are you laughing all the time why are you able to pick up the check why'd you tip double the cost to that waitress and you just can smile and say because i can right it's a totally different way of living man now when you called in you said i want to be scolded like d would scold, which tells me that you don't feel like you've made wise decisions. You know, yeah, in this last month, really, since I started listening to the show and getting really serious, you know, I'm looking at my credit card debt and I'm like, hey, this is not good. I've

never had this much. You know, I'm having trouble paying it down. You know, I want to build wealth. I don't want to lose wealth. You know, so that was kind of the plan with selling the house. How much do you make? I know it's not. I make about $140 with my income and the rental income and stuff. Okay. I'm going to walk you through this plan real quick. If I was in your shoes today and I was fired up and I was sick of not feeling like I was making enough progress with my money.

Because you called in, you said, hey, I feel like I'm in control of my money. Brother, you're not in control when you owe seven lenders money when you put your head on that pillow every night. So here's what I'm doing. And it's radical, but we're a radical group over here. So here's what I'm going to do. We are selling the sports car. You said you could sell for 55, you owe 25, that's 30K in your pocket. You said you could sell the other car. That's not the least. $34,000 and you owe $27,000. That's $7,000 profit. You tracking? Yep. You now have $37,000 in your bank account. With that, we're going to pay off the $18,000 in credit card debt. That leaves us with $19,000, right? Yep.

But we have no car. So we're going to go buy a reasonable car and the rest is going to go into our emergency fund. Do you have savings right now? Not really. Okay. Well, now you will. And now you become your own bank because you don't need to turn to credit cards in case of emergency. And you're driving a reasonable car. And while it's depreciating in value, you're not paying interest on it. And you don't need a credit card. We're cutting it up. We're going to switch to a debit card and use our own money so that we make different decisions. But do you feel the freedom there?

You could get out of this stuff tomorrow. But the question is, are you actually sick and tired of living the way you've been living? Of trying to play the game over here and move this card around to the 0% and now we're sitting here paying 24% interest on these cards and still feeling like we're winning. Yeah. So are you going to commit to this? Are you in? Yeah, I definitely think so.

I mean, I've been seriously considering selling the car even before. We're not considering anymore. You're talking to your wife going, hey, honey, hope you like these cars because they're gone tomorrow. Hey, stay on the line, brother. Listen, stay on the line. We're going to give you Ramsey Financial Peace University and the EveryDollar app. You guys have to watch the videos, though. I'm not going to give this and just have it sit in your inbox. You got to get it, watch these videos, and change your life. If you don't watch it,

you're going to Venmo me and John 20 bucks each. All right? That's the deal. You got to have some skin in the game here. John's in. Hey, thanks for the call, brother. Can't wait for you to call back and tell us you're debt-free. This is The Ramsey Show. welcome back to the ramsey show i'm george camel joined. John Deloney, and we are taking your calls, 888-825-5225. Matt joins us up next in Sioux City. Matt, welcome to the show. Hey, thanks, guys. How are you both doing today? We are doing great. How can we help? Hey, real quick, just intro. I am 27. My wife's 27. We have a year and two months old little girl. And my question

for the day is I just feel really Davish as of today. I don't know why it hit me so hard today. But like my baby steps are kind of all over the place. I got $15,000 left in my student loans. I went to pharmacy school, graduated a couple years ago, been putting $5,000 towards it, um, ever since I graduated each month. Um, but we have the 15,000 in, uh, a savings account. And we kind of did that baby step, obviously backwards where we saved three to six months. And that's just been a comfortable thing to do. We said, first, we're going to do it when we were having our daughter, but we've kind of kept with that. Um, another thing too, is like with our, um, way that we do checking our savings or just seeing how we do our payments, we kind of do it retrospective instead of actually doing like how you guys have every dollar out.

Like we know what's going out, but after a month has happened, we're not really, you know, fine tuning and figuring out each, you know, each day kind of what we've been spending and how we can improve on that, I guess. So I was just looking for some inspiration. If you guys had some,

um, I heard the last call, there was some, a little bit of not like he wanted to get yelled at. And I kind of don't know if I'm at that stage too. I actually, can I tell you, can I tell you what it sounds like? Um, yeah. not like he wanted to get yelled at and I kind of don't know if I'm at that stage too. Actually, can I tell you, can I tell you what it sounds like?

Um, yeah. You sound exhausted. Yeah, a little bit. Today was a little bit of a, a little bit of an exhausting day, which kind of got to this point.

I feel like how much the student, most of the pharmacy students I know graduate with a lot of debt. How much did you graduate with? 80 to 85. Okay, that's actually not bad. That's about a quarter of what it usually is. Yeah. You sound tired, man.

I am. Here's the, I want to free you. If you don't want to follow this plan, you still be a good guy, still be a good dad, still be a good husband. Go about your life, man. If you want to do this, go all in. Because you're torturing yourself in the middle. Yeah.

Millions and millions. Yeah, I think that's what's hard. It's not. It's not. It's not. It's not hard. You just got to make a choice. You could be debt-free today. Is that what you're saying? You'd wipe yourself out, but you could be debt-free today. Is that what you're saying? You'd wipe out your, you'd wipe yourself out, but you could be debt-free today. Yeah, I could. Yeah. Why? What is the security blanket?

Um, yeah, that I, that I can't explain. Well, the way, the way I explained it the first time was we had a kid coming and I remember hearing a few times from, you know, just listening to you guys that that was one where it was okay to save. We have some older vehicles, but they're working great. I love them. I got an 04 Grand Am that I've drove since high school and that thing's still amazing. Got an 03 Ford Taurus. I don't know. They're running great. So that's kind of something where if we need to upgrade another kid, potentially my wife and I are trying to have another kid. I don't know. I guess the unknown, and I know that it's going to be paid off. Like I said, I've been doing $5,000 each month.

Just be done, man. Three months from now. Just be done. I know. Just be done. You are choosing to hang on to a variable, and as a scientist you know the goal is to reduce the variables, get it out of the picture and then be really uncomfortable. What's your take-home salary

household wise? So my wife and I, this is another problem too. So I'm just being straight up with you guys. It's, we get about a hundred thousand dollars after we get retirement out of there. So we're taking out retirement too at this time too. Oh, you're investing. Yeah, correct. Well, you can continue doing that if you pay off the debt today. And also you need to get your emergency fund back in order. So you probably need to pause for a few months.

But one of the reasons you're exhausted is because you're running 14 different directions and wondering why you're not getting anywhere. And then you hate yourself every time you take another step. You're like, ah, I shouldn't have taken that step. I'll run over here. And then I hate that guy. We can't sit here and inspire you to greatness and motivate you. What we can do is help you build a habit and build discipline to where you're just the kind of guy who budgets and pays cash for things and who has a vision for his future. And that vision

doesn't include paying a lender every month. So that's what we can help you do is create a vision and help you get those values in place versus inspiring you with an amazing sentence like you've never heard it before where you go, all right, I'm all in, man. We can't do that in seven minutes. No. But we can pull the rubber band back and cause you to feel that pain that you're in. What's been inspiring about... Go ahead, Jordan. I'm sorry. No, it's all good. What's been inspiring?

I was just going to say, what's been inspiring is like listening to George, like George hearing you paying off your house. That's been one that's stuck with me for a long time. And that's what I'm excited to do. I want to get this debt done. And next up to that is... There's a vision.

Hold on. You don't want to. You want to want to. No, I want to. You don't. Because if you did, you'd be debt free. You'd be debt free already.

Yeah. Something is keeping you from doing it. So make the choice, man. Yeah. Here's the thing. Yeah, you're right. Most people don't realize that they are already in

the ring they think they can avoid the fight that is being an adult and what happens is you are just saying like i don't want to fight and the world just starts throwing punches at you at some point you either tap out which is fine i quit cool or you have to swing back and you're trying to pretend like you're not in a fight and you are fine, I quit. Cool. Or you have to swing back. And you're trying to pretend like you're not in a fight, and you are. You could be debt-free today. The wants you have, the inspiration. George inspired me, dude, by the way.

So I get that. I get where your heart's at. He's got to choose. One of the best things we did is to decide that our plan wasn't working. And that's a really hard pill to swallow because you've got to swallow your pride and go, dang it, I thought I could outsmart the system. And so when we decided to do this plan, we just decided, we pre-decided that we were going to go all in on this plan, that Dave-ish wasn't going to get us to where we wanted to go fast enough. And when you go all in and your wife is on the plan too, which means we got to get to the root of maybe that security gland that was going, hey, we really need an emergency fund before we start paying off this debt. And we really should be investing because that's a wise thing to do. Those things are all great. But the problem is when you do them all at once, you don't feel the progress. And so the great news is you can make a different decision today.

Right now. Yep. And it's scary. You're right. But you have to choose. Do you want to be comfortable? Because that's what you mentioned. Well, just more comfortable to have the emergency fund while we owe a lender $15,000.

Comfort to me is freedom. And the way you do that is by not owing anyone anything. And you have a great income. We can pause investing. You're going to get the emergency fund way faster in place if we stop the investing and stop messing around, which is going to create a real sense of security. Because right now you have a false sense of it.

And you're 27. And for whatever it's worth, George and I always say, sometimes the best advice we can give you is, this is what we did in our house. There's been several times in my adult life, my wife and I have paused investing to meet a financial goal for a short period of time, a couple of years here, six months here. And so I'm just telling you what I do in my own house to get ahead. And you're, you're way younger than me, man. Yeah. I mean, I, like I said, that, that was enough though,

what you guys said too. I, sometimes you just got to need to hear from people that have done it. And I know, I know you guys have done it. I've listened enough to you guys said too i sometimes you just got to hear from people that have done it and i know i know you guys have done it i've listened enough to you guys but you know it's it's something that i don't know what it is it's maybe something for you john to talk about more further if you guys want to but davishness just regarding even money and stuff too like my faith i'm sometimes davish i just feel like maybe i'm hard on myself for being davish in many aspects of life but that shouldn't stop me from actually doing what I need to do. Well, at some point, if you start to see some recurring patterns in your life that are disruptive, do the most, the boldest, bravest thing you can do and go talk to somebody.

Yeah. I've done that. When the color in the world starts to turn down on me and, um, I reach out and I either have a group of friends, a group of men in my life that I trust. I'm like, dude, I, I'm starting to slide and they'll say, Hey, we'll come over. We're grabbing dinner. We're going out tonight to hang out. Or I can see a therapist, man. I've got a coach that I work with once a week. Like I have to surround myself with other people that say, hey, it feels like the color's draining out of your life. It's not. Look how bright that is.

There's beauty over here. There's joy over here. And by the way, go work out. Go exercise. Get this crap paid off. And so it's both and, right? But go call somebody, man. You know what to do, Matt.

Now the decision is yours. Are you going to do it? Or do you want to continue living the way you've been living? Either way, we're cheering you on. This is The Ramsey Show. The number to call is 888-825-5225. I'm George Campbell, joined by Dr. John Deloney today, and we're taking your calls. Brian joins us up next in Atlanta, Georgia.

Brian, welcome to the show. Hey, guys. I really appreciate you taking my call. And by the way, you guys are doing a really great job. I'm enjoying listening to you. Thanks, Brian. We're the dream team. That's right.

Yeah. Never forget. Don't disagree with that. So what's up, man? So my wife and I are not necessarily having a disagreement. We're in a, fortunately, a good situation where we're, we're selling our house. And historically, we've been really good on tithing for, you know, standard income. Uh, where we're having a disagreement is I think we ought to use the money that we're making off the home that we're netting

and tithe that money like we would if it was normal income. And she just disagrees with me. She's looking at this as just money we could put away. And I'm like, well, we will, but I'm looking at it as normal income that we should tithe. And our agreement is, well, whatever you guys say is pretty much what we'll do because we've always listened to you and you've helped us out to this point. So anytime a husband tells me we're not really having a disagreement y'all are in like really like she's holding a knife you've you've got like a stick of wood listen i'm married up i've got the best wife in the world she's she's awesome all right so yeah is she there brian yes she is she's i got you on my cell phone, and she's right next to me.

Wow. Well, do we want to hear from her? Do we want to hear her side of the coin here? It may help. Do you want to talk? No, she doesn't want to talk. Okay. That's fine, too.

Now, I don't know that, you know, the finer you look into the fine print of this, the less it feels generous if we're like splitting hairs over it. So I don't think there's a biblical mandate on the sales of homes and profits on that. So let's get into the numbers here. How much did you buy the home for? How much are you selling for? Well, we're netting about a little over $400,000. So we sold it for $650,000.

We owed $200,000 on it. So after commissions and everything, I'm estimating a little bit over $400,000 will walk away. What did you guys pay for it? What did you buy it? $265,000. Okay. And you're selling it for how much? $650,000. Way to go, first of all. When did you buy this house? About 15 years ago.

Well done. And is this after all expenses? Realtor fees, you name it, you're going to be netting how much? Somewhere north of $400,000? Exactly. Okay. Way to go. So you are in the boat of you don't think this needs to be tithed on

and she's like, I think we should? No, opposite. You think you should write a $40 dollar check to your church she thinks you should take that money and put it in the account what are you guys doing next we are moving into an apartment uh that we in a mixed use community that we love to be in uh it's like it has retail restaurants so we're gonna we're gonna live there for a year or two and enjoy living in an apartment and an area that we know that we enjoy while we try to find our forever home, for lack of a better term.

Brian, what's it like being married to a woman when you're so much of a better Christian than she is? I'm just playing. He's trying to get her to talk. I'm playing, man. I'm absolutely... I'm messing with you both. I'm messing with you both. Yeah. I mean, you can look at, you can parse scriptures and go to Deuteronomy,

you know, 1422 says fully tithe all the increase of your grain that the field produces year by year. So we would say, all right, if you want to do it, do it off of the actual net profit after all expenses. And if you want to consider this income, because you have an extra 400,000 that you didn't before, and you want to tithe on that, I think you guys are going to be fine either way. Will it hurt? Yeah. Maybe, but maybe that's good for you to realize, you know what, this wasn't my money to begin with. It's never been easy because I'm in sales and I make just 100% commission and I've done very, very well. Thank you guys and the Lord. So when we're writing a check, a lot of times it is $10,000, $20,000, $30,000. And it's never

been easy because you can find a lot of things to do with that money. But we historically have been disciplined. We've done it. And for some reason, she's looking at this as maybe the exception. For me, it comes down to one thing, and that is, who do you and your wife as a couple, who do y'all believe actually owns the money? Yeah, not us. And if that's the sentiment, then this idea that you're just stewarding something that's not yours that's a different proposition than i'm giving 30 000 of my dollars to a thing right um it's just it's just a difference in how you're going to hold your hands how tight you're tightly you're going to hold your hands i don't believe like scriptural i don't i don't believe there's a

i don't know maybe i get struck by lightning here i don't believe there's a, I don't know, maybe I get struck by lightning here. I don't believe there's a right or wrong here. I think it's what- This is not a salvation issue. You and your church have agreed to what is in your heart, and are you going to violate your own conscience on this deal? Yeah. I don't think you're getting to the pearly gates,

and the angels are like, hey, hey, pay up. You host us on 40 grand. Where's my money? Where's my money? But I do think there's amazing power while you're here on earth of what that will do for your spirit as a reminder. So I'm not saying she's right and you're wrong. I think you need to come to an agreement on it's a heart issue and what feels good for you guys and what are you not going to roll all this into equity and buy a new home, I go, okay, I mean, this is going towards the next thing. This is not just freed up money that's going to be sitting out there. But if you're going to go live in an apartment and this is just truly increase and you want to tithe on that or she wants to tithe on that, I think it's the wise thing to do. And I think if you looked across the board here, if you lined up me and George and Dave and Ken Coleman and Rachel Cruz and Christina, probably all of us would do a version of something a little bit different. Um, or maybe a few would do this way,

do it this way. And so I just don't want to get hung up on the legalism of it. And I particularly don't want there to be a rift in my marriage over it being unified in it. And, um, if in, end of the day, your wife says, I think that what we're doing is wrong, I think this money is for us to build our home and fill in the blank, and you can find peace in that, man, high five you. And if she says, you know what, if you're that convicted, if you're $40,000 convicted, this is the right thing to do, I'm going to go with you on this. Great, man. Great. You sound like you are going to lose more sleep by not giving than she will by giving. It'll gnaw at me. Yeah.

That, to me, would be the driver. The times in my life when I haven't listened to that inner growling, it's almost always been a mistake. Yeah. Well, she wants me to ask y'all one more question, if you don't mind. Sure. So we both drive very old Kias. We've never been big on vehicles. We were planning on buying two new vehicles, not with the sell of the house money,

but I'm having a very good year in sales and paying cash, one for her and one for me. But it's going to be probably, if you add everything up, about $160,000 for her and one for me. But it's going to be probably if you add everything up about $160,000 for the two vehicles. Whoa, y'all are screwing around. So where do you draw the line? No joke, dude. From Kia to Tesla. Where do you draw the line on the amount that you pay for cars versus the income you make? Well, we say we don't want you to have more than 50% of your income tied up in things with motors in them. And also, we don't want you buying brand new cars 50% of your income tied up in things with motors in them. And also, we don't want you buying brand new cars unless you're net worth millionaires.

It sounds like you guys are net worth millionaires. We are. Okay. So I'm not mad at that. What's your household income? After this year, probably 1.5. 1.5. Go buy your cars, dude. And we're fighting over 40 grand?

Brian, get off the phone. Brian, get off the phone. Brian, get off the phone. Go buy her a $40,000 watch. I mean, good grief. Yes, you're good. You'll make 40 grand this month. Let me be honest with you, Brian. So this is hard for me, and Dave actually walked me through this.

Personally, off air, I get that benefit by sitting next to him. At some point when you have grown up without a lot and it's those people who have that kind of money and those people who drive those cars, sometimes these purchases, you have to look at them as the ratios because you can spend $160,000 on cars and that's the equivalent of me spending $500 on cars when you look at my overall net worth. And if you've given away $200,000, $300,000, $400,000, if you are that generous spirit and this rests well with your conscience, because it clearly works well financially, dude, buy your cars. If you make one and a half million and you spend 150 grand on cars,

that's 10%. That's like someone who makes 4040,000 spending $4,000 on a car. $4,000, that's right. We would say that's very reasonable. Yeah, yeah. So you guys have done really well. Now knowing that, I don't know why we were chomping at the bit over a $40,000 check of time. Next time you ask a financial question, lead with, I'm going to make $1.5 million this year. Helpful information, Brian, but way to go.

You guys have great hearts, and the Lord has blessed you, man. Love to hear that. This is The Ramsey Show. So a few days ago, we were in lovely Phoenix, Arizona for two completely sold out events on our Building Wealth Tour. And the energy in the room both nights was absolutely incredible. So if you've been thinking about joining us, stop thinking, do it. Don't miss your chance. The events in Sacramento and San Antonio are completely sold out already. We have a few seats left for Building Wealth Minneapolis on November 10th. So if you want tickets to see us in Minneapolis, you got to buy them now

because for sure this one's going to sell out too. Prices go up this Friday for the Minneapolis event. So get the early bird discount before it's too late. It's going to be Dave Ramsey, Rachel Cruz, Dr. John Deloney, Ken Coleman, and myself. We'll be talking about building wealth in this current economy and show you how you can get on the path to building real lasting wealth. So we already did Phoenix. Sacramento's on November 1st. That sold out. Minneapolis, November 10th.

A few tickets left there. San Antonio to end it out on November 15th. That one sold out. Tickets start at just $25 or you can get a four pack starting at $60, which is $15 a pop. That's an amazing deal. Go to ramseysolutions.com slash events to reserve your seats now. Looking forward to getting back on the road with you, John. Dude, Phoenix was a blast.

We ate some good tacos, too, didn't we? Dude, crushed some tacos. There was a lot of queso before the event. Torchies, baby. Torchies. Why so much queso before the event? That was a bold move on your part. Hey, dude, if you can put me on Torchies queso. Good things happen.

It can do some damage. I love it. Let's go to the phones. The number to call is 888-825-5225. Charlie joins us in Dallas, Texas. Charlie, welcome to the show. Hello, thanks for taking my call. Sure.

How can we help? I am about $135,000 in debt. $85,000 of it is about student loans, and then I've got two cars. My wife makes about $2,000 a month, and I make anywhere from $38,000 to $6,000 a month. And I do not know how to get us out of debt. Well, I'm glad you called us, man. Are you a new listener? How long have you been listening to the show?

On and off for a few years, but religiously for the last three weeks. So what made you call us today versus three years ago? I am tired of not being able to sleep. There you go. It's a good place to be, and it's a bad place to be. But it's good because you're ready to get out, aren't you? And you're willing to do whatever it takes now.

Yes. And you guys are bringing home anywhere from $6,000 to $8,000 a month total? Yes. Okay. That's good news. Now, these car loans, what are the cars worth? One of them is worth $5,000 and I owe $8,000. And the other one's worth probably $12,000 and I owe, I think, $18,000 on it. So you're underwater on both of these things?

Yes. Okay. Well, how much money do you have saved in the bank? Zero. How little can you live on out of that $6,000 to $8,000 a month? What are your actual expenses? I've looked it up, and I believe it's about $5,000. You have $5,000 in expenses?

Yes. You guys own a home $5,000 in expenses? Yes. You guys own a home? In what? We pay $1,500 a month in our rent, and then one car is $500, the other car is $280. Our utilities are about $250 a month. Cell phone, we pay almost $400 a month. $400 for cell phones? For four of us, yes.

Wow. You guys are getting ripped off, man. Big time. That's T-Mobile for you. No, no. That's way too much. That is not T-Mobile's fault. That's you.

They can charge whatever they want to charge. You signed up for it, man. Yeah. Okay, so you're A1. I'm going to get you on an every dollar budget and I'm going to gift you the premium version for a year if you're willing to do it. Thank you. But here's what that means. You are going to track every transaction like a madman. And before you make any decision, you're going to ask yourself, does this help me become debt-free and find the freedom that I've desperately been looking for? Okay. And when you do that, here's what you're going to do.

You're going to go, why are we paying $400? We've got to find a better deal. We're switching cell phone companies today. Who are the four people in your family? My two kids, my wife, and I. How old are the kids? 16 and 13. They can participate. They can get jobs and help out with a hundred dollar a month cell phone bill. Good God almighty.

All right. I'm going to also gift you Financial Peace University. Is your wife on board with this or is it just you? Yes, she is. She's fully on board. Yes. Okay. We need to find out where all of this 8,000 is going. Because you're telling me even if your expenses are five, you have an extra three to throw at the debt. Yes. Can you work overtime? Where's the variable pay come in? I'm an independent contractor. I usually work 10 hours a day, 10 to 12, about six days a week. And what is your wife doing for work? She works for the school district. Okay. Hold on, hold on. You're an independent contractor.

You're an independent contractor working 10 hour days, six days a week, and you make about 70,000 bucks a year. Yes. You need to find another job. You're either not doing very well as an independent contractor or you are being dramatically underpaid, but you are killing yourself for 70,000 bucks.

You can go drive a truck for what, for that, that annual amount of money. Okay. You see what I'm saying? What do you do? Like the general contractors, if I can get one to call me back right now for work at my house

that I'll pay with cash, I mean, it's a premium for the privilege of coming out to my house just to look at it. Are you not charging enough? I work delivery service, so I get paid by what they offer for the delivery. Okay. Do you like this work? Yes, and it works with our scheduling of everything that we got going on. Okay. George is walking you through this. There's only two things you can do with money. You can cut expenses or you can make more of it.

Okay. And I want you to do both. Yeah. If this job is taking your, like it takes every last hour of your life and that's what it gets you it might be working for your family schedule wise but it might make paying this debt off take five years instead of three or six years instead of two so it might work for you every week it might not work for you long term okay okay now you said you were 135 in in debt but the numbers aren't quite adding up. Because you said you had 85 in student loans and two car loans, but the two car loans don't add up to $50,000. And then we have two loans we took out, and then which I think we owe about $800,000 left on it.

We have three credit cards, and then our medical debt that we have. How old's the medical debt? Anywhere from 10 years to just recent. Okay, you need to call and negotiate that today. But you need to scrape together some money to throw at it. How much is the total medical debt? Last time I looked, I think we owed like $13,000 total. Okay, you're gonna need to scrape together maybe $4,000 or $5,000 and call them and say, listen, I can pay you $4,000 or $5,000

if you call it good and settle in full and in writing. And beyond that, we're going to pay off smallest to largest regardless of interest rates and start attacking this debt. If that means you need a personal loan because you're underwater on the cars to get out of these and get two really cheap beater cars to get you around to speed this up, I'm okay with that. But we've got to start making some drastic decisions if we want to see progress. And that means maybe your wife is going to find a different job

because she's getting paid minimum wage working for the school district. Right? You don't seem to like our answers. No, no. It's good advice. It's okay if you don't. You're a grown man. You can do whatever you want to. It's just I don't think you recognize how radical you've got to get to pay this $135,000 off. It's going to take some work, man.

Hang on the line. Austin's going to pick up. We're going to gift you FPU and every dollar. And I'm going to give you four tickets to our Smart Conference event in Dallas. And I want to see you. When we come out during the breaks, I want to see Charlie from Dallas say, Dude, I'm all in. This event is part of that journey. My wife is here. My kids are here. We are all in on this thing. So hang on the line. We're going to get you the whole kit and caboodle to get you on this journey, but you've got to want it more than we do, man. This is The Ramsey Show. Hey, it's John Deloney, co-host of The Ramsey Show.

Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600-plus radio stations across the country. To find a station near you, go to RamseySolutions.com slash show.