The Ramsey Show - App - When There's Not Enough Money to Pay the Bills (Hour 2)

Episode Date: July 13, 2018

The show about you

Live from the headquarters of Ramsey Solutions, 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. This is your show, America. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Mary is with us in Detroit. Hi, Mary.

How are you? Hi, I'm good. How are you? Better than I deserve. What's up in your world? Well, I have kind of a complicated question. I'll try to make it brief and clear. So first of all, my husband and I have been separated for a number of years, but we're still

married and we still file our tax returns together. We both are retired. We both live on social security and pension. So my husband just received notification from the Pension Benefit Guarantee Corporation, who pays his pension, that they feel they've been overpaying him for a number of years, and they want to reduce his pension from about $1,000 a month down to about $400 a month, and state that he owes them $52,000. Now, because we're separated, we each have our own finances. He manages to make it on the money that he receives, but he will not be able to make it once they cut his pension down to $400 a month and begin paying that money back. How old is he?

Pardon me? How old is he? 68. Okay. He has some credit card debt of about $30,000, and he owns a condo, which he's making payments on, of about $400 a month, plus regular Medicare expenses and stuff like that. He will not be able to make it. And at this point, I'm wondering if bankruptcy is an option.

Well, it probably won't. I mean, he could bankrupt on what he pays the pension, but they'll take it out of, you know, his future money. And so, I mean, you can't get rid of the $52,000 and still get the $400,000. So, I guess right now, because he's just received this notification, you know, we plan to go together to see a lawyer to see what his options might be. I'm so confused as to why you are calling for him and why you are going to a lawyer with him when you guys are separated. Because I'm on the joint survivor.

When he signed up for pension, he took the joint survivor option, which means that if something happens to him, I will receive a partial benefit. But because the $52,000 is owed, they will then begin to take that money out of my benefit that I would receive when he passes. How old are you? It impacts me. Yeah, how old are you? 67. Okay.

Yeah, I guess you can go with him to a lawyer and find out what his rights are slash if he dies your rights on this pension. I don't have a lot of hope that's going to change bankruptcy only clears the unsecured debt and it'll clear the secured debt if you give up the asset meaning if he walks away from the condomin worth? He bought it for $125. What's it worth? But now, probably in today's market, maybe $100. Okay.

And what does he owe on it? I think just about what it's worth. Okay. And how much credit card debt has he got? About $30. Okay. All right. Then what I would do is, yes, I would go see an attorney if I were him.

And, yeah, I don't have a problem with you visiting with the attorney at least once to figure out what your joint survivor benefit's worth, but I wouldn't be sitting around counting my chickens much on that. I don't think you're going to see that, either one of you. And I think he's probably going to have to create some income. He's probably about to go back to work. And I don't think that that's a possibility. His health is not good.

Okay. Well, bankruptcy in this case would probably only get rid of, I mean, the condo, you can sell it for what it's worth and be out of it, or you can give it up in bankruptcy and be out of it, either one. Then you've got to have a place to live either way right as far as the thirty thousand dollars in credit card debt you could wipe that clean with the bankruptcy i don't think you can wipe this uh pension plan clean no the only thing that really puts an end to that pension plan uh fifty two thousand is if both of us die then it ends and they said they they would not take anything out of the estate.

Right, they can't. That would be true. And so if you can keep from repaying it, then just die before it gets repaid. That would be your only shot. But I don't think you're going to find that as bankruptable because I think they're going to take the $400 a month against it if you do that. So I think you're going to run into a problem there. So the point is bankruptcy really doesn't solve all of his problems.

He has a tremendous income problem. He needs a place to live. And, you know, the credit card debt, if it went away, you still got a housing issue and an income issue, right? Right. And, I mean, we've discussed this, and because we still remain friends, I guess you would say, even though we're separated, he could easily move back home or he could move in with a relative. So the housing isn't really an issue. But you can sell the condo and not file bankruptcy. Right.

And then just not pay the credit cards because you don't have any money and not file bankruptcy. That's possible. There's not a lot of gain here. Bankruptcy, I mean, yes, he's scared, and yes, he doesn't know what to do. I follow that part, but it's a $30,000 transaction here. It's not, you know, the credit card debt's not what's drowning him. What's drowning him is the loss of the income, right? Right, that's right.

And so if you sell the condo for what it's worth to sidestep that and just don't pay the credit cards, you're going to have about the same result as filing bankruptcy, and you don't even have to file. And, you know, that's what he's doing. How long have you two been separated? 2003. Why have you not divorced? Actually for health care benefit purposes and tax purposes. Tax turned out better by not divorcing.

That's just strange. Yeah, I know. Okay. All right. I mean, because around our place, I mean, we're just hillbillies. We might have a murder, but we're probably not going to have a divorce. Oh, my gosh. Good luck with that.

I don't know. What a mess. What a mess. I don't have a good suggestion, but I think you're on the right track. I would seek a housing alternative, and I would seek legal counsel on the actual pension. And hopefully somewhere in there, somebody in there can give you some more intelligent answers than I can because I'm obviously not much help today. Sorry about that. Open phones at 888-825-5225. You jump in. We'll talk

about your life, your money. Patrick's on Twitter. How should someone deal with paying off debt that's in collections? Get in writing what the amount is that you're agreeing to pay and they're willing to accept as the settlement on the full account. Get it in writing. Get it in writing. Get it in writing or don't pay it. And do not allow them to have electronic access to your checking account because they will clean you out. They lie.

And it's a filthy industry, the collections industry. There's a few good players in it. Most of them are straight up scum. And so you can tell their mouth's moving. You can tell they're lying if their mouth's moving. And you just got to be real, real careful with them. You're dealing with rattlesnakes. You'll get bit if you don't handle them right.

This is the Dave Ramsey Show. Can you believe this real estate market? Home shopping has become so competitive. There's a ton of new buyers in the market, and bidding wars are the new normal. Folks are under a lot of pressure to offer more money to get into that house. Don't do that. Get certified instead. The Churchill Mortgage Certified Home Buyer Program is a game changer. You can quickly position yourself as a more reliable buyer, and you get an upper hand during the negotiations. You can close two to three weeks faster than your competition. So call Churchill Mortgage today and get certified. They've helped thousands of listeners and team members here at my office win the bidding war without having to

bust their budget. Call 888-LOAN-200 or visit churchillmortgage.com. Thank you for joining us, America. Brandi's with us in Davenport, Iowa. Hi, Brandi. How are you? Good. Thank you. Thank you for taking my call. My question is, we are currently renting. My husband and three children. And our neighborhood is becoming very unsafe. So we're looking at renting in a different area. However, we currently rent from family,

and it's impossible to rent for the same amount that we are, so our expenses are going to go up. We've done a lot of research, and we know how much they're going to go up. But my question is, we're in Baby Step 2, so do we have, what would you do? How much is the current rent? The current rent is $750, including utilities. What would be the, well, what would be the, not counting utilities, what would it normally be? It would be $550. What will it cost to rent the other place that you're talking about?

The other place, we have found a good place, and it would be $900 a month. So $400 swing. Okay. Correct, yes, $400 difference. And you have how much in debt in Baby Step 2? We're in Baby Step 2. We started January 1st. We are down to $80,000 in debt.

We currently have a deficit every month of $200. Okay, so how are you making progress on your Baby Step if you have a deficit? I am a stay-at-home mom, and my husband is working 60 hours a week, so he's working a lot of overtime. Before I was listening to you, we now have changed our tax information so we won't get a large tax return anymore. Last year we got a large tax return of about $7,000. We were not able to pay off enough debts to make our budget balance. So we have pulled that $200 every month from our savings.

We've successfully not put another dollar towards debt. We haven't increased our debt since January 1st when we started your plan. We borrowed audio CDs from a friend, so we took financial peace at home. And we've paid down $5,300 in debt, and we have cash flows. How did you pay down $5,300 in debt if you're running a deficit that you're taking out of savings? Our monthly payments that are due, sir, our car payments, credit card payments. How much do you owe on your cars? Our cars are the major problem.

Our cars are $28,000 and $9,100. We are upside down on both of those vehicles. I have listened to your radio show, and I know usually you say, sell the car, get a loan for the difference, drive a junker. But we're so upside down. How much is the $28,000 worth? $18,000. Who said?

Kelly Blue Book. On wholesale or retail or trade-in or private sale? Even on a private sale, we're upside down $10,000. $18,000 private sale? Yes, sir. Mm-hmm. Okay. And how much is the car payment on the $28,000?

$475. Huh. Okay. And the household income is what again? Our household income is currently, we bring home $2,900. Okay. Well, the answer to your question is you're not going to be out of debt anytime soon. Yes, sir.

And if your family is in jeopardy, you have to move. I'm not sure you have to move where you think you have to move, but you have to move out of that neighborhood. We're moving into a very modest area. No, that's bull. Okay. That's absolute bull. I said you have to move out of that neighborhood if it's unsafe.

Yes, sir. But you don't have to move to a certain place. You just got to get away from there. And so you can move out into the country somewhere and get something cheap and commute in. And you've got to get rid of this car. We're totally open to that. I have looked in every surrounding area, willing to commute to school and work and everything. Listen, here's the thing.

You're already running a deficit. If you run a larger deficit, you're going to be in debt for 15 years. The other properties that we have found that are just... Do you want to be in debt for 15 years? No, but... Then you have to do something different than what you're describing to me. And you have to sell this car. And how...

What do we do if they... Who do owe the 28 000 to to a local credit union sit down with them and explain to them in person you and your husband that we have 80 000 in debt of which almost 30 000 is you people and you have a 18 000 secured loan is you people, and you have a $18,000 secured loan, Mr. Credit Union Manager, and you have a $10,000 unsecured loan attached to this car. That's your reality. I need you to admit that reality and allow me to sell this car and sign a note with you for the difference. And I'm going to fight with you until you say yes, because you already have an unsecured loan of $10,000. Right. say yes because you already have an unsecured loan of ten thousand dollars right you have a

better opportunity of pulling this off with a credit card or with the car uh with a credit union than with anybody else here's the thing brandy you guys have a huge mess and you're stuck you have got to throw some dynamite in the middle of this you can't just close your ears put your hands over yours and go la la la la la walking through the forest and hope a bear doesn't eat you. You're going to get eaten. The math you've given me does not project. It does not work. And you cannot claim that I'm trapped or I'm unwilling to do something about it.

This car has to go, and you have to move further out in the middle of nowhere, and you have to find a solution that is cheaper if your family is in danger there because you're going to be there a while wherever you move. And you just can't say, I mean, I'm running a deficit, so I'm going to run a heavier deficit. How's that going to work? It doesn't work. And so I don't want your family to be in jeopardy, but you're going to have to make some unpleasant choices

in the middle of an unpleasant situation. Both of your – I mean, all of your possible choices right now suck for a while. And you're going to have to swallow that and do it. You can't just, this is not, there's no fairy godmother coming. You've got to take action on these situations that is dramatic because you're in a dramatic situation. And you have to be willing to, to the point that you're not willing to you're not you're not going to say oh i'm trapped oh i'm trapped you're not trapped you just have to make absolute

brutal decisions in a brutal situation and if you get rid of 28 or 18 000 20 000 basically of an 80 000 problem things will start to turn and you don't go use that money to go get a nicer rental that you can't afford. And, you know, $900 rental in Davenport, Iowa is not the Taj Mahal. It's not like you're being crazy or something, but you just have to be very realist about this math and go, for a period of time until this breaks, we're going to have to do some very uncomfortable things until we can get the corner turned on this, because right, we're going to have to do some very uncomfortable things until we can get the corner turned on this.

Because right now, we're just dying. And, you know, that's the only thing I can tell you. Because the math you're giving me is horrible. And I see how hopeless it is. I'm so sorry you're facing that. I'm glad you got the CDs, though. Go back through them as many times as you need to. Thanks for joining us.

Open phones this hour at 888-825-5225. Sonny is with us on Twitter. What are the indications of a bad financial product? Well, that's interesting. That's a good question. I think one thing is you look into the distance and you say, how does it play out over 10 or 20 years? If it doesn't play out over 10 or 20 years in a way that's favorable,

that tells you one thing. A lot of bad financial products feel good in the short term, but long term are really, really bad. The second thing is you look at comparative products. How can I do the same job another way? An example of that would be buying term life insurance for a nickel on the dollar. It costs $5 versus $100 a month for the same exact amount of term life insurance. And then you compare that to the whole life.

And you go, well, by comparing it, I realize how bad whole life sucks. And I'm not doing it. And so the comparison thing. You know, this type of investment has this set of fees, this set of returns. This other type has this set of fees and this set of returns. And you compare them and you go, oh, well, it makes that choice easy. And so that comparison will reveal it a lot of times as well. It's a really interesting question.

This is the Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids. Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance, and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed.

Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. Thank you for joining us, America. Sally is with us in Winston-Salem, North Carolina.

Hi, Sally. How are you? I'm awesome, Dave. How are you? Better than I deserve. What's up? Life is good. You're calling to say you're debt-free, it says on my screen. That is correct. Way to go. How much have you paid off?

$42,000. Wow. How long did that take? Around 20 months. Good for you. And your range of income during that time? I had started at around $42,000, and I got it up to $63,000. Good for you.

What do you do for a living? I am a hospice nurse. So how did you get your income way up? Just a bunch of hours? Yeah, I ended up taking a second job, and I ended up even Ubering some to help increase that even more. Wow. You went after it. I really did.

What kind of debt was the $42,000? About five years ago, my ex-husband left me. All of a sudden, I was very depressed and just very sad. And I went out and I bought a fancy sports car that I couldn't afford. And I went on a lot of trips and out to eat. And the debt just piled up, piled up, piled up. And when it was all said and done, it was $42,000. Wow. So there was a healing that happens with paying off the debt

in addition to just getting rid of the debt, isn't it? Exactly. I found out I was a lot stronger than I thought I was. I didn't really need a guy in my life. I was just strong, and I could really do this. Obviously. Well done. Well done.

Yeah, that puts the past in the past. I like it. It really does. And I'm so much happier now. It's amazing. Yeah, every time you paid off all these debts, you were like, I'm done with you. I'm done with you, too. Yeah.

Well done. Good job. What kind of debt? Credit cards or car loan? What was the car? What kind of car? I had a 370Z. That's a Nissan.

I bought. And I ended up trading it in for something more practical soon after I had gotten it. And then the rest of it was credit cards. Okay. All right. Wow. So which one of those debts when you paid it off you were like i hate you people i'm so glad you're gone um i don't know i hated them both you know both of them were stupid things that i did for you know people i didn't necessarily

like and you know trying to impress people and keep up with the joneses And I realize now I don't want to be that person. You're paying a payment on that retail therapy for that moment of depression following your divorce. I should have went to therapy. Yeah, that's it. Instead of the retail. Wow, it would have been cheaper. Good for you. Well done.

Very well done. Well, congratulations. How does it feel to be debt-free? It is awesome. I try to inspire people at work to get on your program. And, you know, I tell them, you know, it's kind of like a diet. It's hard at first. But once you, you know, you start losing those few pounds, you get more motivated.

And I've actually got a few people here at work interested, and they're asking me questions. And my new boyfriend, he's also very interested in your program, and he's been a great support through this all. Very cool. Well, good for you. How old are you? I am 39. Perfect.

Good for you. Well done. Proud of you. Got a copy of Chris Hogan's retire-inspired book for you. That's the next chapter in your story to be a millionaire, okay? Okay. Sounds great. Can't wait.

And outrageously generous as you go along, of course. Sally in Winston-Salem, North Carolina, $42,000 paid off in 20 months, making $42,000 to $63,000 a year. Count it down. Let's hear a debt-free scream. 3, 2, 1.

I'm debt-free! This is how it's done! Well done, Sally. Very well done. Johnny is with us in Reno, Nevada. Hi, Johnny. How are you? Hello, David.

Thank you. Great. Good. How can I help today? I'm calling actually on behalf of my mom. We're interested in her. She is selling her house in a hot real estate market, wants to move out of state here to be closer to her grandkids. Understandable.

Is this going to be her only source of income after she sells the house there, buys the house here for less? Should she carry a mortgage or buy the house for cash that she's going to buy. And I assume she has Social Security coming in. Yes. And she has no other nest egg? And she has no other nest egg? I'm sorry? No other nest egg other than that?

No. None at all? No other nest egg other than that? No. None at all? No, sir. And how much will she get out of the sale of the property that she's selling now? Probably $475,000 to $500,000. Cash in her pocket? Yes, she has to pay for it. Okay.

And she's moving to where? She's moving from California to Reno, Nevada. Okay. Our real estate's going up and up and up. Right. What would she pay for the property in Reno? $325,000 to $350,000. Okay.

Why is she spending so much? Reno's not that expensive. To be in the neighborhood that we are to live where she wants to live. Okay. All right. That's fine. It's not a problem. It's just a lot of house for a 75-year-old woman.

Okay. That's not a bad house in Reno. That's some pretty substantial real estate. That's well above average. True, yeah. So let's take it down a little bit, maybe even say $300,000. Okay, so she's got $100,500 to invest, give or take, depending on what we do here.

And she can invest that. I would hold some out as an emergency fund, a rainy day fund, maybe $20,000, and I would probably invest the rest and let it create some income. She doesn't have any income now, right? Correct. And she's not going to have any income there, but her taxes and insurance will be lower, and her cost of living will be lower, and she's got $100 or $100.5 sitting in a mutual fund that might create $1,000 a month or something, which will be helpful,

but it's not going to substantially change her life. It's not like she's hit the lotto or something here. And even if she bought a $100,000-or-less house, it doesn't, you know, that's going to equate to maybe $1,500, $2,000 a month coming off of that, $250,000 at that point if you went down that far. So somewhere in there, but I would have her sit down with an investment broker and select some very conservative mutual funds that are going to be very, very calm and that will just steadily pay her a monthly income off of that invested money

to supplement her Social Security, and I would be on a budget that is below those numbers so that we're not spending more than we have coming in and creating some kind of a mess. But no, she should not take out a mortgage. A mortgage is not in her future, especially with the amount of money we've got flying around here. There's all kinds of options. Up next is going to be San Antonio. Genovese is with me. Hi, Genovese.

How are you? Hi, Dave. I'm great. How are you? Good. How can I help? So my husband and I are in our early 30s, 31 and 34, and we have outgrown our current home. We bought it in 2006, and we're back and forth on doing a complete renovation on our current home or buying brand new.

How did you outgrow it? You had kids? Yes, we have three kids. We have a three-bedroom, two-bath, and one of them is going. So what is your home worth today? So our home is currently worth $140,000. What's the price range of homes in your neighborhood? Between $170,000 and $180,000, and we owe $83,000 on it right now. Okay, and what's your household income? About $90,000 together. Okay, and how big a renovation are we talking about doing? Well, we would like to add to it at least an additional room, you know, the entire floor.

What are you talking about doing money-wise? What are you talking about spending on this? Oh, money-wise, between $20,000 and $30,000. Okay. Well, if it sells for $140,000 now and you put $30,000 in it, you're going to be at the middle of the top of the neighborhood. And that's a big renovation with three kids running around, a lot of work. It's almost as bad as building a house.

So I'd probably move. It's probably easier to move and just spend that same money and move into a $175,000 neighborhood. You'll probably do better financially and a lot less hassle than being with construction dust for six months. This is the Dave Ramsey Show. Guys, let's talk about that timeshare pitch that you fell for. They promised you exclusive access to travel anywhere you want tropical beaches mountain getaways or whatever oh my gosh they claimed it was the affordable way to travel and then they convinced you it was a good investment but here's the deal search any auction site for your exact timeshare and see what it's selling for it's listed for a

dollar with no bids that's not a good investment, I know I'm just adding salt to a very old wound, but look, if you tried calling the resort and they won't take it back, if you tried selling it and no one will buy it, call Timeshare Exit Team. Timeshare Exit Team will get you out. You'll have to be patient. It can be a long process, and it costs money, but it works. They're so confident in their exit service that if they don't get you out,

you get a 100% refund. Call 844-999-EXIT. It's free to talk. 844-999-EXIT. TimeshareExitTeam.com. thanks for joining us america chris is with us in asheville north carolina hi chris How are you? Hey, Dave. Thanks for having me on the show.

Sure, man. What's up? Dave, I was just, I think I'm just looking for some guidance, maybe on a job change. Okay. Right now I work 12-hour swing shifts. Are you familiar with those? Mm-hmm. You know, and it's kind of hard to pursue, you know, going back to school with that or, you know, any kind of career change because, you know, from week to week,

your graveyard or your day shift, and I can't go back to school, I don't think, on the graveyard shift or the swing shift, I'm sorry. And I guess I'm just looking for some guidance from someone. You know, it's a good-paying job. I work at a paper mill. And, you know, if you try to talk to some of the older folks, I feel like, well, you can't leave this job. You make too good of money. What do you make?

Let me see, $65,000 last year. And you're working 72. You're working three 12s? I work four 12s. Four. Yeah, well, it's like four days on, three days off, and three days on. And then once a month, you get eight days off in the month. And those days off, I have my kids to save on child care.

So $65,000. Okay. Yeah. And, well, let's pretend for a minute that you could do anything you wanted to do. How old are you, by the way? I'm 34. Okay. So when you're 54, what do you want to be doing?

That's what I'm trying to figure out now. What, do you want to be doing this? No. Then we need to figure something else out. I'm trying to figure out if I'm stuck or if I'm stalling, Dave. You're not stuck. You're stalling. You're not stuck. It's stalling. You're not stuck. It's a free country.

You don't live in Russia, so you can just quit. I don't want you to just walk out the door, but you're not stuck. Now, have you got some challenges to figure out where to go and what to do next? Yeah. Yeah, you need to figure all that out, but you don't have a target to aim at, but you're not stuck. There's nothing that keeps you there. Right. um you know so you're 34 years old what are you going to be doing two years from now that takes you toward what you want to be doing 20 years from now that makes you 130 000 a year not 60 yeah i need to figure that out yeah you start and stop and think about it and it's kind of like

okay what could i what would i do if i could be anything i wanted to be do anything i wanted to do and make really good money doing it and then you start asking yourself what steps have i got to take to get there what has to be true that's not true today it may involve school it may not involve school right and it may involve some uh it will likely involve some strenuous transition years so that you don't just walk out on a good paying job to nothing, a wing and a prayer. And so you're probably going to start whatever this is up on the side and work a lot until you get the new thing until the new thing finds its rhythm and gets its stride and a little bit and you know you're making 30 or 40 before you just walk out of there but you can see your way to 60 okay but we got to know what that is and i don't know what

that is but start asking yourself you know what am i good at am i uh am i do i do i want to be in a thing where i'm around people do i want to be in a thing where i do details am i a person that you know is very detailed do i see things uh mechanically easily uh which means you would be spatially intelligent you can see things in space some people can't see that how something works right uh right now i've got a friend that's got a high school education that's worth uh tens of millions of dollars because he designed a very popular item that he sold a bazillion dollars of and basically patented it but he didn't even know what he was doing he just could see how the thing would work and he put it together

you know and made a bazillion dollars doing it. But, you know, so I don't know. I don't know. Maybe I talked to a guy the other day on my millionaire theme hour that cut grass for the last 25 years, and he's worth a million and a half. But he owned his own business, cutting grass, and he was very specific, very intentional about, you know, the lawn care business that he had evolved in and developed in

and did very, very well doing it. It doesn't have to be something fancy, you know? It doesn't have to be that you have a Ph.D. in economics from Harvard. It's just what is it that, you know? But maybe you do want to go into computer science or computer technology, and so maybe you do need some formal training in that. I'm okay either way, but you need to really just spend some time on the back porch with just you and God going, okay, what do I want to be when I grow up?

Which is something you ought to ask yourself when you're 14, 24, 34, 44, 54, and 74. What do I want to be when I grow up? In other words, what am I going to do with this next segment of my life? Because you get to choose. Choice is a powerful thing. But don't choose to be stuck. You're not stuck. A job I hate because the pay is too good to leave it.

No. You don't want to spend the next 20 years of your life doing that. No, no. But again, we're not quitting today. We have to have a place to go, a way to get there that's good for you, good for your family, and a reasonable transition. It's going to involve some hard work. Hold on. I'm going to send you a book called Start, and it's going to help you with that.

Christina is with us in Dallas. Hi, Christina. How are you? Hi, Dave. Thanks for taking my call. How are you? Better than I deserve. What's up?

Okay, so my question is, my husband wants to do a transfer balance on a new card, and I just don't know anything about it i don't know if it's wise or if we should just keep paying off our debt how we are or what to do okay it's probably not worth the trouble it's not that big a deal uh regardless if they say zero percent for however long yeah but i mean it is the thing is you're not going to have it that long. What's the balance on the card? Well, we have about three right now. The one he wants to transfer, what's the balance? The one that he wants to transfer, the card he wants to transfer over,

what's the balance on it? Well, we want to do three. Like, we want to transfer all of our debt to one. Okay, so how much is all of our debt to one. Okay. So how much is that? $11,000. Okay.

And what's your household income? We make about $44,000 a year. Okay. How much other debt have you got? That's it. Just the credit card debt right now. Okay. And so how quickly are you planning on paying off $11,000?

We're hoping in about a year and a half or so. That's ridiculous. In a year. Yeah. Six months. There you go. One year is better. Okay.

Okay. Now, so what is the interest rate on the three cards? One is $17, one is $21, and the other one is $15, I believe. Okay. So an average of about $17,000, one is $21,000, and the other one is $15,000, I believe. Okay, so an average of about $17,000. And if you pay off $11,000 in one year, your average balance is $5,500 through that year. Do you understand? Yes. You know, over the average. So your average debt outstanding during the one year would be about $5,000.

And, you know, 15%, 16%, 17%, whatever, on $5,000 is $600. Okay? Okay. So if you want to do a balance transfer, that's your gain is $600. But what's disturbing me here is that you guys have this 18-month thing floating around somewhere in the conversation before you got to me, and I beat you up over it. Okay? Which tells me that he still thinks he can borrow his way out of debt. Here's my point.

You don't have a $600 problem. The interest rate is not your problem. You have an $11,000 problem. $600 is a sneeze. $11,000 is a big chunk. And you need to address the $11,000 because it is 90% of the issue. 95% of the issue here, mathematically. 5% of the issue is the interest rate.

So, in other words, you could solve the interest rate and you still have 95% of your problem left. So, if you want to do a balance transfer, don't act like you did anything. It's not that big a deal. Whoopee. Now, you want to get busy, get a garage sale going, take an extra job, never go into a restaurant or go out to eat, or take a vacation for a year while we get out of debt? No, you're talking about getting out of debt. That'll get you out of debt. But if you're not going to do that, don't balance transfer, because it makes you feel like you did something, and you didn't do

anything. If you're going to balance transfer, it's fine. Save you $600. But $600 doesn't solve your problem. So do it, but only do it if you're going to do the other stuff. It's much more important. This is the Dave Ramsey Show. Hey, guys, this is James Childs, producer of the Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country.

To find one near you, head to DaveRamsey.com slash show. Are high healthcare costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accredited organization CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and Thank you. visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events.

chministries.org.