The Ramsey Show - App - Stay Allergic to Debt! (Hour 1)

Episode Date: September 23, 2019

Chris Hogan, Rachel Cruze, Debt, Insurance   Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Sitting in for Dave, I'm Chris Hogan, and I'm excited to be with you. And I also am joined in studio by a very special guest, the one and only Miss Rachel Cruz. Thank you, Chris Hogan. How are you special guest, the one and only Miss Rachel Cruz. Thank you, Chris Hogan. I love the one and only. Last week you said the same thing. I was like, I love that title.

Wow. I appreciate it. I know if I don't say it, I'll get grief. I'll get grief. No, but I'm glad to be here. Glad to be here with you. It's fun hosting with you. Glad to have you here.

The last time you and I were on, we had a blast. America, you reached out. You phoned in with a lot of different questions, and we dug in. So guess what? We're going to do it again today. So if you've got a question about money, you've got a question about life, I want you to call us. The number to call is 888-825-5225. Again, that's 888-825-5225.

Or if you prefer, you can look us up on social at Ramsey Show or you can find Miss Rachel over here at Rachel Cruz. She's all over the place. Twitter, Instagram, Facebook and all the other stuff. I'm out there too at ChrisHogan360 but we'd love to hear from you. You're everywhere too, Hogan. I'm out there a little bit.

Are you ready for these calls? Yeah, let's do it. Let's jump on line one. I've got Ryan calling in from Texas. Ryan, how are you ready for these calls yeah let's do it let's do it all right let's jump on line one i've got ryan calling in from texas ryan how are you good how are you oh we're fantastic my friend what's on your mind today uh so i'm uh right in the middle of the baby steps uh baby steps to uh pay on my debt and um we're trying to decide whether or not we want to break away from the debt in the interim so that way I can pursue to get my CPA. I have a master's in accountancy, so that way that will yield more money, so that way we can pay down the debt quicker or go ahead and find another job, job number two for me,

and then pay down the debt. And then once I'm completed with all of my debt, then pursue the CPA. Okay, Ryan, tell me this, my friend. How much debt do you have right now? $140,000. Okay, and? $140,000. Okay, and this $140,000, break that down for me. How much of it is student loan debt? $106,000.

Okay, and what is the other $34,000? Car note. Okay, and how much is the payment on this car note? $621 a month. Goodness gracious. Okay. And you told me you have a master's right now in accountants? Yes.

Okay. So why are you wanting to go back to school? Well, it's not necessarily going back to school. It's sitting for my parts for the CPA, the sections, and the study material, the bookers, CPA review course costs about $4,000. Okay, $4,000 total? $4,000 for the review course, and then once I set it for each section, it'll be about $200 a section. Okay. All right.

So, I mean, Rachel, I hear this, and I say, well, I mean, bottom line, he's got $106,000 in student loan debt. So if he was talking to me about going back and getting another master's or something, I'd have jumped through the phone, right? Like, absolutely not. But now looking at this, you've got $4,000 to be able to use the degree that he's applied for. I mean, to me, it makes sense. It's just a matter of you're not borrowing from it. I would say you've got to take on another job. And first of all, sell that car.

Well, I was going to say, that car payment's killing you, Ryan. And depending on how much you make a year versus what you will make, coming up, you've got to run those numbers as well. But for sure, I mean, four grand, yeah, yeah. You're not talking about going back for $30,000 a year for getting a master's at Vanderbilt University or something, right? I mean, you're talking about it is a smaller amount of money for probably an uptick for sure on your income. But 100% have to cash flow it. And then get rid of the car. And then you have to get to the point where you get so angry at that 106,000. I mean, that's the epidemic we're seeing, the student loan crisis. I mean, this is it. This is the

storybook version of exactly what's happening in America. And so if you do decide to pause, Ryan, because you know you're going to be making a significant And so if you do decide to pause, Ryan, because you know you're going to be making a significant amount more if you run those numbers out and you know that, then it may be worth stop pausing the debt snowball and investing into that. But if you're only going to be making 15 grand more a year or something super small, then no, stick with your current job and pay off this debt. Well, and the bottom line is, is that you've got an opportunity. Now it's a matter of how hungry you want it. You're going to have to sacrifice some stuff.

I mean, too many people out there are expecting just something to come easy, and that's just not the case. You're going to have to dig your heels in. And you're right. How much do you think we have in student loan debt across America right now, Rachel? Trillions. $1.6 trillion. Trillion dollars. Yes. I mean, it's astronomical yeah and you know i i get frustrated

because i know young people are walking into financial aid offices to to to sign papers they don't understand for payments they can't afford right but they think that that's the path because it's the it's been the norm that's right and we we have got to change that pattern too many young people are starting off life behind the eight ball and it's frustrating well and he's it i mean he's the example of that of 106 000 in student loan debt and so looking to for you ryan again your situation to to to clean it up but again let it be a lesson to all especially young people listening and anthony o'neill i know is joining you uh later in the show for debt-free degree and this is like kind of his bread and butter what he talks about all the time.

But man, learn from these people's mistakes. No, you really can. And I'm going to tell you, you and I have seen it as we've traveled across the country. You can pay off student loan debt. Yes. I've seen people do it. Oh, and crazy amount, crazy numbers. What's the biggest amount you've heard of?

Oh, there was an uptick of like a $300,000. I had one around that amount. $300,000. Okay. I had one around that amount. I mean, both of them. And that's the hard part is where it starts to feel hopeless because that mountain is... I mean, that's more than most people's mortgage, right? I mean, it's just... It's absolutely insane. And so realizing and kind of taking that personal responsibility and saying, okay, it's up to

me to fix this. But knowing that you have a marathon in front of you, it's not going to be a sprint. It's not a $4,000 credit card bill. But there always is hope in what it looks like. But again, learn. Parents, with your kids going off to school, learn. If you're a college student or high school student, learn from this. I'm curious.

What are some tips you tell someone? If they've got student loan debt out there right now, what are tips you give them? I know on the Rachel Cruz show, you have all kinds of segments where you're talking and giving people guidance. But what are some tips? If they have $300,000 or more in student loan debt, what do you tell them to do? It's a lot. Well, we never recommend debt consolidation because it doesn't fix the problem. But student loan debt is the one type that we say we're somewhat okay with if the numbers match out.

Because most people don't go back into student loan debt, right? They get that degree when they're 18, 19 years old. Right. And then they go on with their lives. So to look to see, okay, is there any possible mathematic reason to be able to get a lower interest rate, all of that? But that's not going to solve everything because we know personal finance, it's 80% behavior. It's only 20% head knowledge. So the math is not going to fix it.

But in something that huge, looking at that, taking that step, and then I always say, make a small debt snowball within your student loans for yourself, right? Not necessarily mathematically because you have to get those quick wins

and you have to celebrate throughout the process because it's going to be a really long process. No, it really is. It's a lifestyle adjustment. And like you said earlier, you've got to get mad.

You've got to get focused and you've got to sacrifice. And if you're a dual-'ve got to get mad. Like, you've got to get focused and you've got to sacrifice. Yep, that's right. And if you're a dual-income household, try to live on one income. But you turn it around. It can be done. Don't tell me you can't, but you can tell me you won't. This is The Dave Ramsey Show. Over the years, I've seen so many families suffer by not having life insurance.

It's not that they didn't care. It's just that they didn't know, so they did nothing. That's a huge mistake. Listen, husbands and wives, moms and dads, think about it. If you died, how would your family pay the bills, the mortgage, food, and plan for a better future? This is what life insurance is all about, and term life is the only way to go. It's not expensive, and it's not complicated. Stop wasting money on cash value plans.

You need 10 to 12 times your income in protection and I recommend 15 or 20 year level plans. I also only recommend Zander Insurance and I have for over 20 years. These are the only people I personally use and they only offer the plans i recommend call them at 800-356-4282 or get instant quotes online at zander.com trust me these simple steps will let your family know how much you care hello everyone i'm chris hogan filling in for Dave, and I'm joined in studio by national bestselling author and host of The Rachel Cruze Show, the one and only Rachel Cruze, and she is just a bundle of joy. If you've not checked out her show, I want you to go watch it because Rachel is the only

person on the planet outside of Mama Hogan to get me to do this thing that I did for her show. Tell the people what you had me do, Rachel. It was fantastic. Well, A, you called me a bundle of joy. I feel like I'm carrying a bundle of joy. You are. That's where it came from. Eight months pregnant.

Yes. I love that, too. Yeah. This was really fun. I've always wanted to know what Chris Hogan's voice sounds like with helium in it like you know if you like take the air out of a balloon you're like talk like a chipmunk normally for us normal people what does chris hogan sound like and at the end we give financial advice with helium in our lungs and chris hogan then sounds like a normal person with helium. And it was really funny.

It was hilarious. So go to RachelCruz.com. She is all over YouTube with the Rachel Cruze Show. You'll have an opportunity to watch that, get a chuckle. I'm not doing it again, Rachel. So, America, I'm going back to the phone lines. If you've got a question about life or money, I want to hear from you. Rachel and I want to hear from you.

The number to call is 888-825-5225. Again, that's 888-825-5225 or find us on social media at Ramsey Show. All right, next up, I've got Angela on the line from California. Angela, what's the question you have for Rachel? I have a student loan for $83,763.07. I have exactly $70,000 in my savings. I have $18,000 in my IRA. I'm self-employed. I make between $5,000 and $6,500 a month, and I'll be divorced soon. And I'm not sure how much money to apply to my student loan

so that I can get the payment down. So, Angela, is the entire debt student loans? It's that $78,000 is all student loans? The $83,000. Or $83,000, I'm sorry. Yes, yes. Yeah. Well, Angela, I mean, I would walk you through exactly

what we teach with the Ramsey Baby Steps, keeping that $1,000 emergency fund and then throwing the rest at that debt. Because you can make, obviously, a huge dent by paying it off. But my only asterisk to that would be that the fact you said you're going to be divorced soon. Is that what you said? Are you going through a divorce? And I'm self-employed, and so I'm dealing with a little bit of arthritis right now. I'm being treated for it. Just a little nervous about that because I'm a hairstylist, so I don't have my hands, you know.

Yeah, absolutely. Yeah, I am trying to transition to a new career, but that in terms of income will still be at least six months to a year off. Sure. But I'm working on that, though. And so the divorce and everything, when will that be final in the next couple of months? The first of the year. How long were you guys married? Only three years.

Okay. So I would say because of that life change, I would hold a little bit. I would go ahead and just pay a chunk. I mean, you could even do $20,000, $25,000, $30,000 and just go ahead and get a bulk of it out. Have that safety net there through this process for some savings. And then once you kind of get through that, look at your employment situation, the arthritis and all of that to see, okay, am I still consistently going to be able to make this amount? And then throw the rest at the debt once you have that security. Because then after that point, hopefully you've been saving, too, throughout these next couple of months.

And you'll have a little bit more cushion, too, to get that three to six months of expenses saved in the bank. Because I want you to have that for sure soon. But because of a big life change like this, I would say it's okay to kind of pause and not go all in right now. Which again, a different situation, I would probably say write the check and get going. Angela, tell me this.

Why did you save this $70,000? I sold a home. It's part of the money that i got from saving okay all right good so i mean that mindset i i like what rachel i agree with you whenever you're dealing with a life change you obviously want to make sure that you've got some money there uh to deal with whatever your new living situation might be uh as you're self-employed and making a transition in career. So just having that mindset. But sending that chunk, Rachel, as you said, it would do so much for her to be able to see that balance go from $83,000 down to $63,000 or whatever it is.

You see that movement. And so I think Rachel is absolutely right. Mindset, looking at where you are, taking a stance on it. But I'm going to tell you, you still want to make sure that you remain allergic to debt. Don't use this life change as a justification to go out and get another car or to go out and do X, Y, and Z, because what you end up doing is trying to medicate to make yourself feel better. And none of that stuff is going to work uh it's not yes and and

whenever you're in an emotional and i would say more of a negative emotional situation whether it's you know you're dealing with a death or a divorce or there's something like that you're exactly right chris that like you have to be so on guard to know that a you're not being taken advantage of by someone making sure that you you have everything lined up financially, meaning you know if there's lawyer fees, you know exactly what's coming. And having as much logic in this emotional situation is really going to help you. So the most you can plan out, the more detailed you can be in this process, the better off you're going to be. Because it's a high emotional situation, and you can't overlook that.

That's right. And so if you're not plugged into a local church, I definitely want to encourage you to, just so you have people around you that you can talk to, because oftentimes if we're left to our own devices, we can isolate, and it's not healthy. It's not a good thing. So you want people around you that care about you, that want to be there to walk this walk with you. You will get through this without

a shadow of a doubt, but you're going to have to stay focused. Thank you so much, Angela, for your call. All right, next up, we've got David down in Florida. David, how can we help you? Hey, guys, how are you doing? Doing great. We're doing great. How are you?

I'm doing very well. I wanted to call you guys to ask a question. I recently was looking through my wife's credit history because we applied for a credit card just to have a bigger balance. David, you're not going to get our support with that one, but you keep going. Sorry, this is just a little bit of the backstory, but essentially we saw her credit is very negatively affected because a couple of years ago, her parents actually had her co-sign on all of their cars, which is three different cars. They're all leases. One of them was repoed and two of them, they still have and they have had some late payments here and there, and our lease is almost up soon, and we're going to be looking to maybe move into a new place, but I see her credit is so badly impacted by this that I'm not too sure what we can be doing.

I saw the balance is still like about $15,000, and we're not in a place where we can in any way attack that debt that isn't ours, you know. So I just wanted to call in and see if I could get some advice on that. Right. Well, I mean, I can tell you this. I mean, cosigning is a no-no, people, okay? Cosigning is saying, I promise that if this person doesn't pay the debt, I'll pay it, right? And if you need a cosigner, it means you didn't qualify on your own.

So cosigning is an absolute, I mean, it's just a horrible option. And it's frustrating, especially now in dealing with this situation on three different cars. And here's the deal. They're not going to drop you all as cosigners because you're the guarantors of the loan. And so the goal is, is this going to have to either get paid off or you guys are going to have to pay it off? So, David, the only option you have as you guys are looking at your living situation is a stay put and get focused and clean up your own financial situation. Or you're going to have to look at trying to get something that you can live in on your own without your wife on the application. That's what I was going to say is pulling your credit report, David.

I wonder what that would do. Because if they do pull a credit report and you do have a bad credit score, obviously it is going to ding you majorly. But I think that that's obviously a lesson that you guys have learned, that co-signing is never, ever a good option. And for you guys to see if there's a place that, yeah, you can just use your name on the rent. But I would not go get a credit card to try to build your credit to make it better.

At the end of the game, you're trying to play the game, and it's not going to win. Don't do it, David. Don't make Rachel and I drive down to Florida. Okay? Seriously. Don't do it because it's that step toward where you start to lose consciousness. And the next thing you know, you get one, then you get another one, and you get another one. Maybe I'm just talking about myself back in the day.

Number one is avoid it. Stay clear, stay focused, and stay intentional. This is The Dave Ramsey Show. Welcome back. You are listening to The Dave Ramsey Show. I'm Chris Hogan, Ramsey personality, joined in studio by Rachel Cruz, who's also a Ramsey Personality. And we've been taking your calls on money and life, and we're excited to keep it going. So if you're out there and you've had a question on your mind and you thought, you know what? I want to know what Rachel and Chris have to say about this, then you need to call us.

The number to call is 888-825-5225. Again, that's 888-825-5225. Again, that's 888-825-5225. We'd love to talk to you. And you can find us on social media as well, at Rachel Cruz or at Chris Hogan 360. We'd love to talk with you. All right, we're going back to the phone. This time, we're going out to the desert. I've got Justin on the phone in Arizona. Justin, how are you? Hey, Chris and Rachel, I'm doing good. Stress level 5 and I'm still breathing. Uh-oh, stress level 5. What's causing the stress? So I,

in total, I have about $65,000 in debt between credit cards and a car payment. My main question, I've just got off the phone with four of the five credit card companies getting into a hardship program. I need advice on this last one because it's the one that's causing the most stress.

Okay. So you said $55,000. How much of this is car? So it's $65,000, and $19,000 of it is a car. Okay. All right. So you've got some substantial debt on these credit cards. What have you been using them for? Uh, back when I moved out to the desert, I had to

use it to pay living expenses. Um, as I was going through the hiring process for my job. Uh, also I was dumb enough to use that to cover debt payments so i didn't go delinquent so that's where my problem was okay all right so you were trying to do the three card monte technique and you realize that doesn't work with credit cards does it no it does not no all right so this just how much do you make a year can i ask um so i make about without overtime, I make about 2,500 a month. Um, with overtime, I'm this month, I made about 3,500 a month, uh, this month. What do you do for a living? I'm a 911 dispatcher.

Okay. Okay. And so you said you have been talking to these credit card places about a hardship. So what, what what what are you trying to get from them um so i with the overtime that i can work that's pretty easily done i can i can give 200 to each of them um this this last one the fifth one my hardship program is about to end um in two months and my minimum program is about to end in two months, and my minimum payment is going to go back up to about $500 a month,

which is rough only because of the interest rate and the balance on that one card. What's the interest rate on this one? About 30%. 30%? What's the balance on that uh about 15 000 okay good grief okay justin are you are these are these out of your life completely right now uh yes they've automatically been closed so they're next to be cut up okay have have they been in collections at all, or are they just threatening it? So, they have not been in the collections. I was literally about to enter into collections on all of them next month.

Okay. So, I was able to avoid it. All right. Well, listen, I'm going to tell you something, because I used to be a collector back in the day. Long time ago. Rachel, quit looking at me like that. No judgment here.

Yeah, it was. I felt it. But a long time ago. And I'm going to tell you something. Justin, your credit cards going into collections may not be a bad thing. And I say that because, obviously, I know in any scenario, people have made promises to pay and not kept it. So the company's frustrated you don't have the income coming in so you're frustrated so it's a strained relationship

however if it does go to collections you've got an opportunity to do something that maybe you didn't do on the front end and that's to be upfront and honest about what you can afford to pay and i'm going to tell you something right now. When you are trying to defend yourself financially, you know how much you can pay. I'm not debating. I'm stating. Meaning, that's what Mama Hogan used to use that line on me. She'd say, boy, I'm not debating. I'm stating, which means this isn't optional. When I tell you this, I can afford to pay X amount. That's what I can do. And when you can't have that company pulling your, you know, pulling your emotions in a different way because they threaten to impact your credit score, Rachel. Yeah. Right. Well, we don't care because we know credit score is not an indicator of how well I'm doing.

It's an indicator of how well I'm doing with debt. That's right. So. Well, and anything you do, Justin, in all these calls, make sure you get everything in writing. You need documentation. And then once all that's's cleared up though, Justin, I mean, I would be working like crazy because we, again, we're not all about the math gear.

With personal finance, it is behavior change, but a 30% interest rate, good Lord, on a credit card. So I'm like, you want it out of your life. I know you do.

And so you have got to work. You need to turn into a workaholic. I mean, you need to go crazy to get these out of your life you're gonna have to and rachel's right get everything in writing but i mean when you call these companies i want you to write down the name of the person you spoke to their extension and notes on what was discussed and don't please don't agree to do something you can't afford to do just to get off the phone. And Rachel, what I mean by that is people get themselves all worked up and they don't

want to be on the phone. So they agree to do whatever just to get off. And that's not the key. You have to be clear and you have to protect your budget. So if all you can afford to send is $50, guess what? You tell them and they'll say, I know, Rachel, what they say. They'll say, that's not good enough. You say, I understand, but $50 is what I can afford to pay you, and I'm going to

send it in on the 30th. And that's really it. And they can talk and say all they want to say, but you've said what was needed. And so, again, Justin, I'm telling you, go back, sit down, be focused, and as Rachel said, get some extra jobs so you can get focused, because you've got to get these debts out of your life. They're going to take all that they can get from you at every time. All right, next up I've got Chris in Pennsylvania.

Chris, how are you? Hey, guys, I'm good. How are you doing? Oh, we're focused and not finished. What's on your mind, buddy? So my wife and I are on Baby Step 4, 5, and 6. Okay. However, I sat down with my banker about two weeks ago,

and she recommended a product I had never heard of. It's a heel, a home equity installment loan. And she was recommending switching my mortgage to that. So instantly the red flags went up, but I wanted to hear what you guys had to say about it. Okay. She, she, what was the name of the product? A heel home equity installment loan. I hadn't heard of it either. Okay. What's your rate on your existing mortgage? Uh, I think it's 3.2, something like that. All right. And how much do you guys owe on this mortgage?

$215. Okay. And do you know the rate on this heel that they were asking you about? She was saying it was about $2.9, $2.95, I think. And I'm going to tell you why you are not going to do this. Bottom line is there's a heat lock, which is a home equity line of credit. Rachel, it is a big revolving thing that you attach to your home. Think of it as a big credit card. As you make payments on it, you have access to use it again. This heel is an installment loan. So this is where they give you a fixed payment over

a fixed period of time. Here's the issue. Most of the time, the payment goes to interest only first and principal very, very late in the game. So it's a mirage that they're telling you that the interest rate is going to be that two point whatever it was, because it's primarily interest only. So you don't need that in your life, okay? We're not doing Puff the Magic Dragon and trying to do magic things with this. We're going to get focused, pay the debt, and get it out of your life. Yeah, that's kind of where I feel like our boring financial advice sometimes comes in, where you say, you know, especially when it comes to the mortgage,

don't try to get all fancy and balloon mortgages and all this stuff. Do a traditional fixed rate mortgage. It sounds boring, but listen, that's what you do. When you try to get all fancy and try to play the game, and especially when the banker is the one selling you the product, yeah, you want to look into the fine print. Because not only the interest rate of the installment, but the fees and everything attached. So 15-year fixed rate, stick to the plan, be boring. And that's how you win.

Not trying to get all fancy. No. And you're right. And here's the other side. Too. Oftentimes people will go in to meet with the bank and they think, the bank is the authority. I should do what the bank is saying.

No, no, no, no. Don't ever get this twisted. Think how big and nice their building is. There's a reason for a reason. They're in it. They're in it to make money.

I'm not saying all banks. I'm just saying your dreams, your goals, and your motivation are not the first thing on their mind. It needs to be the first thing on your mind. So that's why we have to learn, people. We've got to be aware so we can say yes to the good things and no

to the dumb things. This is the Dave Ramsey Show. Welcome back, everyone. You are listening to The Dave Ramsey Show. I'm Chris Hogan filling in for Dave, and I'm joined in studio by Rachel Cruz. And we've been taking your questions, and they've been fantastic so far. So if you're out there and you've got a question, you want to call us, talk to us. The number to call is 888-825-5225. Again, that's 888-825-5225.

Rachel and I are here to help. All right, let's go to the phone. We've got Brandy. Brandy, how are you? Doing well. How are you guys? Oh, we're doing great. What question do you have for Rachel and I?

Well, I'm in a bit of a pickle. I've done a whole lot of stupid. My husband and I have about $60,000 in debt. We take home about $60,000 a year. We have $19,000 owed on a piece of land that's just pad and driveway, no utilities. We have a balloon payment due to pay that off in May of 2020. So it's our largest debt. And so I'm just trying to figure out how we can get this paid off while doing our debt

snowball, if we should jump it to the beginning of our debt snowball. And then we risk not paying it off at the end and losing the land anyway. Okay. Why do you guys have this land? Was it an inherit? Did you have a future plan? What's the deal?

Well, five years ago, I had lost my job and went a little nuts because I'd made really good money, and I wasn't married at the time, and I thought, I need something to fall back on if this was land owner financed. So it was a low down payment, low monthly payment, and I had thought I would put a little cabin on it and live there. And it just has never happened, and I've just done the auto pay of the payment every month and kind of forgot about it. And then we got gazelle intense here and started really looking at things, and I got panicked. Okay. How much is the payment on this piece of land it's 300 okay now you said a key phrase in this brandy you said owner financed uh so are you still making payments to the individual so it's through a bank

um but it it goes back to the individual he owns about 160 acres that he subdivided all of this out to and sells them off like an acre and a half at a time. Okay. Now tell us real quick, before we dive into this, this other 60,000, this or the remaining debt that you have, what is it comprised of? It's 15,000 in cars, two vehicles, and then about $21,000 in medical. Okay. All right. Was the medical for you or your husband? Me.

We have paid off all of his medical. Okay. All right. So you said you all's combined income is $60,000. Take home. Okay. What is this property worth that you owe $19,000? What's the value of this?

It's about $22,000. Okay. And we bought it for like $27,000. Okay. What's your thought about this land? I mean, you know the situation you're facing right now. What's your thought? Well, it's been a point of, you know, it feels like it's stealing our dreams rather than a goal to work towards something.

Yeah. And when something's stealing from you like that, what you have to do is you have to shut that down. Right. We want to get rid of it. We've tried to put it up for sale for about a year and a half at $15,000 for sale, but because of the owner finance properties right next to it, nobody is wanting to pick it up. Right. Absolutely. And if there's any kind of remaining balance left over, you all would have to pay that in order to attack it. So I like the fact that you guys are thinking about trying to remove and release this. I would go have a real conversation with the bank, sit down with them, and let's start to talk about this for options.

Meaning, if they hear in your mind, you're done with this thing, you're ready to move on, it helps them kind of process things a little bit different. You see, they think, well, okay, you're going to try to figure out a way to scrape together and do. No, you say, no, listen. okay, this is not something we can afford. We're trying to clean up a financial mess. We're coming in to sit down to talk with you all about working with you to get this resolved. Yeah, absolutely. And I would keep it for sale, Brandy, because it sounds like it's a thorn in your flesh. You're not going to be using it at all in the near future and so continuing to try to sell it if you can in this process and man it's it's always a it's always a difficult spot when when this ends up happening oh yeah i mean sacrificing isn't easy but here's the deal her dream of having a cabin

right on some land that dream doesn't have to be something that never happens it may not be on that piece of land. Right. And so it's just an adjustment. And so that's something you can do. You just have to really and truly be focused. So, all right, let's get to the phone. I've got Brad in Wisconsin.

Brad, how are you? How are you doing, Chris and Rachel? Oh, we are great. What's on your mind today? Well, I'm wondering if you could settle a little argument me and my wife are having oh okay we can do that it's a good thing it's a good thing um we have a and you guys i don't hear you talking about it that much uh on the phone as far as variable life insurance um here's here's my dilemma i have a policy me and my wife both have one that's uh probably cash flow value

is 43 000 on it and we owe 63 000 on home, and that's the only debt we have. My thought is to cash that out and put it towards the home and get some other type of life insurance. Okay. How old are you all? I'm 51. She'll be 50 next month. Okay. Are you guys in pretty good health overall?

We are in great health, and have uh probably towards retirement all of our investments we probably have a net worth of what 870 000 okay that was going to be one of my next questions and what's your household income right now combined 160 okay okay so you're looking at this you you wait a minute you said settle an argument. Hold on a second, Brad. You're trying to set me up and get me in trouble. Okay. First of all, what was your opinion about what to do with this life insurance? I wanted to, you know, because I hear you talk about term all the time. I wanted to get rid of the variable and just take that money and put it towards the house.

Then we could have the house paid off within a year. Okay. And what did your incorrect wife want to do? She is uncomfortable with that. She just wants to leave it in there and doesn wife want to do? She is uncomfortable with that. She just wants to leave it in there and doesn't want to do anything with it. Yeah, because there's a safety part for her of having it there. Do you know what, because she doesn't want the house paid off, because she wants to make sure you guys have health insurance,

what is the safety there? I'm not quite sure. I mean, I guess I just wanted to do, you know, I always hear you talk about term, and I never hear you talk about variable. So is a variable a bad thing as well is, I guess, my main question. Well, the most important thing is term is the cheapest and the best way to go because it's going to cover you over a set period of time. So what I would suggest you do is to definitely get a quote on term life insurance. Really looking at it.

You guys are almost everyday millionaires, so you could look for coverage for a 10-, 15-year term. Get that quote. Don't do anything with what you have right now. It needs to stay put. Once you get a term policy full and in effect for you and your wife, then you guys could look at and get the information on the surrender charges because, Rachel, they're going to have surrender charges with that variable life insurance policy. And then you can begin to look at that and start to walk through.

But I'd rather you have something from a life insurance standpoint as opposed to nothing. Yeah, absolutely. So listen, Brad, tell your wife you were right but make sure you have that life insurance in place though and that she knows okay here's the plan going forward because for her when you mix insurance and investing it's just never a good option so always keeping them separate but saying hey this amount of money is going towards the house we're almost going to have nothing, not even a mortgage, no debt. You're going to see that, you know,

all of your investments and everything else that you have, that you guys are in a good spot. And so for her, she's trying to play it safe. Right. And she's trying to feel like, okay, yeah, this feels safe because it's what we've been doing. But it's not the smartest thing to do with your money at this point. Yeah.

Okay, you need to quit. Okay, you're just trying to make her feel better. I am because i'm a woman and i know the number one fear of women is the lack of security so all you ladies out there you're a-minus stop brad you were right uh get that policy you are right but seriously very proud of you guys because you all have obviously been intentional on this journey you guys are at the doorstep of being everyday millionaires. So very excited for you and what you guys are doing and very proud of what you've done.

So thank you for calling in and reaching out and letting us know what's on your mind. Rachel, this hour has blown by. I know. I know. And I said health insurance earlier on the call. I meant life insurance. Yes. That's the baby talking. Oh, it's OK. But it's been fun. We're going to blame the pregnancy. Well, listen, I want to thank all of you for calling in. We've had some fantastic calls with some amazing questions. I want to thank phone screener Amanda Rogers. I want to thank a producer, James Childs. Thank you, Rachel Cruz, for taking the time to join me in studio. And I want to thank all of you all for listening.

Stay tuned. This has been The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.