The Ramsey Show - App - Why You Shouldn't Buy a House With a Roommate (Hour 2)

Episode Date: January 3, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios. It's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show, America. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225.

You jump in. We'll talk about your life and your money. Megan starts off this hour in Minneapolis. Hi, Megan. Welcome to the Dave Ramsey Show. Hi, Dave. I'm so excited to talk to you today. You too.

How are you? Better than I deserve. How can I help? Okay, so I just wanted to start off by saying I am finishing baby step number two this month and I couldn't be more thrilled. Good. But I do have a bit of a different question for you today. So in order for us to be able to get to where we are with the hang up all of our debt, my husband's brother and his family moved into our house about six months ago and we're currently sharing all of our debt. My husband's brother and his family moved into our house about six months ago,

and we're currently sharing all of our expenses in the home. My question is, this is a minimum of a five-year plan for us, but when they go to move out, I feel or I believe that it's fair that they be incentivized for paying half our principal on our mortgage, how would you go about incentivizing them? They're going to live with you for five years? Yeah, we all want to knock through all of our baby steps and live like no one else so we can live like no one else later. Wow.

I have to say out loud, I couldn't do that. But if you want to, it's your choice. I don't really have a precedent for what would be fair to someone living in your house for five years and sharing your expenses. They're getting a deal, are they not? I mean, like half rent what they would pay somewhere else? Right, right. Okay, and they knew when they moved in that it was your house. Right.

I don't know that they need to be incentivized with half of your principal. They're just paying you rent. I don't incentivize a renter that moves into a rental house with giving them a kickback for the principal they're paying off because they're not paying off the principal i am i'm using their money to do it but uh the income off the rental house but this income they moved in because they it lowered their expenses overall you allowed them to move in because it lowers your expenses overall one of your expenses happens to be your house so no i i don't i don't think

that's necessary i again i it's hard for me to wrap my brain around it because it's just not something i would do but um uh but but i'm not saying it's bad to do it i'm just saying i wouldn't do it but the uh uh i'm not even sure i like my dog living in the house with me, but oh, my gosh. And that's my dog. I'm kidding. Not much. Now, no, I would not incentivize them. I wouldn't do that.

But if you want to, it's okay. But you're asking my opinion, and I think they're getting their deal by reduced expenses. Camille is in Atlanta. Hi, Camille is in Atlanta. Hi, Camille. Welcome to the Dave Ramsey Show. Hi, Dave. How you doing?

Better than I deserve. What's up? Good. So my student loan, well, my private student loan is under default right now, and they are offering me a settlement at $48,000, which is not what I have. I actually feel like a good number to give them back is about $20,000, anywhere from $15,000 to $20,000. I still don't have that. So my question to you is, my roommate and I, we've been long-term roommates.

We're looking to purchase a home next year as the rent keeps going up here. And I make about $90,000, so I have money. I paid out most of my debt. only ones left are the loans um and so my question is if i purchased a home with her do you think it's a good idea to go into purchases home with the idea of paying it off no once we sell it no it is not a good idea to purchase a home with a roommate. Absolutely not. Why not? Because everything that can go wrong will. We call them the Ds. You're forming a partnership.

Deforce, default, drug use, disinterest, disability, death. Any of those things occur. The other one of you is screwed because you're attached at the hip with handcuffs called a home mortgage, and there's no easy way to get out of that. Very, very bad idea to buy a house with somebody you're not married to. So, no, I would not recommend that. And you don't need to buy a house anyway. You've got the student loan debt you've got to clean up.

How am I going to get the 20K or 48 or whatever? Why would you be buying a house if you're too broke to clean up your debt? Yeah, my goal was to maybe purchase a house and then in five years sell it, and then with the prayer that it makes me money. That's a good way to lose money is to be in a house when you're broke. So now let's get the things in the right order. The right order is we need to clear up our debts build an emergency fund then save a down payment you make ninety thousand dollars a year you can afford a house when you've gotten your debts

cleared and so what is the balance on this private student loan the total balance that they say you owe total not what they're offering so um at the moment uh because i'm in the forgiveness of the um the interest rate program or whatever, and it's in collections, but anyway, it's $96,000. And they're offering to settle that for $48,000. Something like that, yeah. $0.50 on the dollar. People settle for less with more debt.

Yeah, and it's a private student loan. It's not a federally insured student loan. Right. These are the privates, even though the federals are about the same amount but um i just haven't gotten around to figuring out what the best way you have another 90 000 in student loan debt that's federal 112 by this time that's in addition to the private right what is your degree in sociology sociology and you spent 200 grand it with all of the interest and everything um and a year's worth of um graduate school yeah wow okay well the good news is you're making 90 so that that's just going to take you a while to clean this up you need to rent as cheaply as

you can possibly rent get on beans and rice rice and beans and i i my one of my very first goals how much do you owe on your car um 80 i'm sorry 8 000 i'm gonna be paying that off in the next six months okay i want you to list all of your debts smallest to largest pay minimum payments on everything but the little one, attack the little one. When you get to a $25,000 number on that debt snowball, you save up $25,000 and you offer it to the private student loan and see if you can clear them. You're not going to get settlements on the federal. The federally insured do not settle. They will waive some late fees.

Sometimes they'll waive some interest and other miscellaneous collections charges, but they will not waive the principal because it's federally insured. The federal government is going to give them the principal if you don't. So they do not settle on that part. But yeah, you need to clean up. You got a lot, you got a ways to go here. I mean, you made a pretty good size mess. And so get your car paid off. Let's work through the private student loans, work through the federally insured student loans. And this is going to take you a few years, but you need to rent something as cheap as possible. You definitely do not need to buy. And you for sure don't need

to buy with a partner, with a roommate. Danger, danger, danger. Don't do it. I hope I talked you out of that. I don't know if I did or not. This is The Dave Ramsey Show. We'll see you next time. could find an affordable biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accredited organization CHM members share to pay each other's medical bills.

It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Michelle is with us in Indianapolis.

Welcome to the Dave Ramsey Show, Michelle. How are you? I'm great, thank you. Good. How can I help? I have a question about trying to help my mom find an old life insurance policy. It was for herself. She worked for the state of Indiana for almost 30 years,

and she paid into a life insurance policy that they offered for her, and she's retired now. And I'm wanting to know how I would be able to find out if that is even active anymore or if there would even be a benefit after so long? Do you know how I would find that out? Wow. No. The place I would start is two things. One, I would go back to the state, obviously, if you haven't already done that, and ask them if they have any records or knowledge of the company or you know history of the benefits package and that kind of thing which would indicate the company

that she might have had this with and then you could contact that company that's kind of a you know i guess an obvious thing you may have already done all of that the second thing is rattling around in the back of my mind, like two-decade-old information is, or 15-year-ago information is, there is a website, or there was a website, that allows you to search life insurance companies for a policy. Typically, people will use it after someone's passed away, and they don't know if they had insurance. And they can't find any policies, but it seemed like Dad dad said he had something i just don't remember what it is you know and you could jump on this site and it would search um sometimes if that's not there and i you know the only thing i'd know how to do is just google that and look for it but like a database

type of life insurance search tool or something like that there is one kelly shaking her head so she's in there googling for me right now so uh but i i i think that was there and i haven't looked at it in enough years to know how it works or anything the and then the lastly life insurance is largely a um no it is not largely it is a state regulated item and so your state life insurance department or your state insurance commission may have record of uh the type of policies especially since it was a state benefit that so i would check the state benefits the state government benefits department and try that first i would check you know google and see if there's a site that Kelly's shaking her head. Yes, she's going to type it on here for me maybe so I can tell her what it is. That'd be good.

And then lastly, I would go to the Insurance Commission. But it's a bit of a detective thing. Kelly says it's naic.com, naiccom which i'm sure stands for something i'm sure the i says insurance or something like that so um i know it used to be there but i hadn't looked at gosh it's been at least 15 years since i've looked at that but um it's really handy to do that the other one that's kind of handy that's a kissing cousin of that is you can go to the.gov if you lose savings bonds. And the savings bonds people have an excellent.gov site for searching up savings bonds that were in somebody's name. Because people lose them, they forget if they

have them, and that kind of a thing. And if you don't have the actual physical bond, you haven't lost the money. They're not technically bearer bonds. And so, you know, it's just losing stuff like this is a problem and not keeping track of your financial stuff. So that's what I would do is those three things. But that NAIC.com will probably tell you if there was a policy in force or is a policy in force. State benefits people really ought to have some kind of a record, even if it was a few years back, you know.

So, hey, thanks for the call. We appreciate you joining us. Casey's on Facebook. Says, Dave, what do I need to know before purchasing long-term care insurance? Well, number one, we recommend you buy long-term care insurance, which is basically nursing home insurance or in-home care, those kinds of things. If you're 60 years old or older, you have less than a 1% chance of using it prior to 60 years old. So I just would not buy it prior to 60. And I wouldn't put my money on it.

I love and thoroughly endorse long-term care insurance. But I tell people not to buy it until they're 60. But here's the statistic. 70% of people over 65 will have some kind of long-term care insurance you need, nursing home care, in-home care, something like that. The average time spent in a nursing home in America is 2.4 years. And only 24%, only a fourth of the people, spend more than three years. So very careful there.

You don't have to have, I wouldn't break the bank to get 10 years of coverage. Most people are buying five years or three years of coverage. And in, you know, a high percentage of the cases, that's going to take care of what you need. So three, four, maybe five years of coverage and in you know the high percentage of the cases that's going to take care of what you need so three four maybe five years of coverage women tend to live longer than men statistically and so a lady might get a little bit longer coverage than a man the actual stats are 70 of you ladies will outlive your husbands and so seven out of ten times what happens is papa goes into the nursing home if there's not long-term care insurance it cracks and scrambles the nest egg because a nursing home you know be 50 grand a year right and if he spends three years in the nursing home that's 150 grand and if there was 200 grand saved, the nest egg just got cracked and scrambled. He dies, leaves mama with no money

because the nursing home took all the money. Now, nursing homes are not evil. If you go to a restaurant and eat, you pay for the meal. If you go in a hospital and have surgery, you pay for the surgery. If you go into a nursing home, you're buying services from somebody that's providing it. It's not evil. And the only way the government pays for it home, you're buying services from somebody that's providing it. It's not evil. And the only way the government pays for it is if you're poor. They have welfare nursing home if you want it, Medicaid nursing home. And it's only for poor people.

And no, you can't give all your money away and act like you're poor if you're not. I gave it all to my kids, so I don't have anything. That way the government will, that way I can be on welfare when I'm old. Oh, brother. Not only is that immoral, it's called welfare fraud, Medicaid fraud. They have a look back for five years and see if you gave your stuff away in order to get government funding when you didn't deserve it because you weren't really poor. So get long-term care insurance. Absolutely. And 70% of claims are for in-home care now. They have started to realize in the industry how important in-home care is. It's a big deal.

Big deal. And it just takes, you know, well, the quality of care is higher typically. The quality of the attention you get is higher. You get to stay in your home. hello, that kind of a stuff. And so this idea that somebody goes in a nursing home and stays there 15 years is highly unusual. It's statistically improbable. So that's some things you would need to know. You're buying three, four, five years' worth of coverage,

and that's going to cover you 70% to 80% of the time for your need, and only 70% of the people ever have a need. That's one-third don't have a need ever. They die without needing nursing home care or in-home care. And so that's what you're looking for. So really you are buying insurance for a $150,000 to $200,000 expense. That's what you're doing. And so if you've got $2 million and you want to self-insure through that, you can.

You can. You've got a $2 million net worth and you've got plenty of money. You want to self-insure through a $200,000 problem, you can do that. You can do that. And probably something to look at, you know. But long-term care insurance is a vital part of financial planning because of what I just described. Again, 75% of you ladies outlive your husbands, 7 out of 10, 3 quarters roughly, somewhere in there. Papa goes in the nursing home, spends a couple hundred grand, uses up the nest egg.

Mama is there broke when Papa dies, and that's not a plan. So that's how it unfolds most of the time. Or they end up in Medicaid nursing home because they're completely broke when the whole thing starts, meaning welfare. So that's what we're looking at, and you need long-term care insurance, and you need to go get it when you're 60 years old. That's the deal there. That's what we want you to do.

So, hey, thanks for the call, or rather the Facebook post there, Casey. You can follow us on Facebook.com slash Dave Ramsey. About 5 million of you do. We put some content out there. Some questions are answered. We answer some questions here on the air from some of the interaction with you guys. Certainly you can follow me on Twitter at Dave Ramsey. About 900,000 of you do.

Thanks for doing that. And we jump in and answer questions there occasionally, mostly here on the air. This is The Dave Ramsey Show. Thank you. In the lobby of Ramsey Solutions, Matt and Mallory are with us. Hey, guys, how are you? Hey, we are fantastic, Dave. Welcome. Where do you guys live? Louisville, Kentucky. Oh, just a few hours up the road. Not bad. Well, welcome are fantastic, Dave. Welcome. Where do you guys live? Louisville, Kentucky.

Oh, just a few hours up the road. Not bad. Just a couple. Well, welcome. Good to have you today. And all the way down here to Nashville to do a debt-free scream. Yes, sir. Good for you.

And how much have you paid off? We've paid off $82,000 in two and a half years. Good for you. Well done. And your range of income during that time? Making just a touch under 70 to just a touch under 100. Good. What do you all do for a living?

Mallory's a special education teacher, and I am a recruiter. Very good. Good for you guys. So what kind of debt was the $82,000? Mostly school loans. Yep. Mostly student loans. And a Ford Focus.

Got it. And how long have you all been married? One year. Whoa! We got married in January 1st of last year. Okay. So you started working your plans separately and then finished it up together. That's correct. Very good. long have y'all been married one year whoa we got married in january uh first last year okay so you started working your plans separately and then finish it up together that's correct very so we actually took fpu while we were still dating good yeah that's great pre-marriage counseling isn't it

oh yes i love it very fun okay so what prompted you all to get started on all this so one day i came over to mallory's house and she was having a panic attack. Her furnace had gone out and she was embarrassed because she had to call her folks instead of being able to handle it herself. And so I called the wisest person I've ever met, my mom, and she says, you can do one of two things. She says, you know, you're doing the Dave Ramsey plan. You could put probably a part of your emergency fund toward it and sort of solve it or, you know, let her handle it. And then, you know, you guys go through FPU together. And so for Valentine's Day, I said, you know, Mallory, I know you're in the middle of a master's program.

How would you like one more class? It's a great idea. Yeah, since you don't have anything to do, let's go ahead and take a class. Full-time job, master's degree, another class. So, yeah, I bet that went over well. It did, actually. I was very surprised. Well, after the furnace, you were kind of ripe for the picking, weren't you?

Yeah. Yeah, okay. Yeah, you get good and scared like that one time. You go, I got to fix this. And it was just a year after I bought my house. So all of the homeowner's insurance had expired for the one year. Oh, all the warranties and things were done. Oh, my gosh.

And it was like a month after that. Of course. Yeah, that's the way that always works, yeah. Well, way to go, you guys. What's the secret to getting out of debt? You paid off $82,000 in two and a half years? We had lots of productivity sessions at the coffee shop. Yeah.

Our friends have been incredibly supportive. And what we would do is we'd watch their dogs while they were out. And all of a sudden, we'd have a Starbucks gift card. And they'd say, hey, go on another productivity session. Keep going toward the goal. They knew where we were going with the entire thing. I love it. Oh, that's fun.

Very cool. So you had some good friends cheering you on. Absolutely. That makes a big difference. Who were your other cheerleaders? My folks were huge cheerleaders for us. Our pastor was, and Mallory's folks were. They got on board.

Got on board, yeah. So you started taking the class at your church, I guess? There was a bigger church in the area. Our church was kind of small. We didn't offer it Got on board. Yeah. So you started taking the class at your church, I guess? There was a bigger church in the area. Our church is kind of small. We didn't offer it at the time. Okay. But since we've taught FPU once to our church. Oh, wow.

Well, thank you. So you're coordinators now. We are. Look at you. Way to go. Very cool. Well, it's fun to teach it. It is.

Especially after you've been set free like this. Right. So good for you. So, well, well done, you guys good job very good job what was the hardest part of this whole thing for y'all it's been a trip i mean sticking with it when i started out i was working four jobs wow yeah my friday would start at 8 a.m and it would end at 8 a.m because i was a waiter and then i would go drive ride-share apps. Yeah.

So, you know, next thing I know, I was just out of it by Sunday. Yeah. Yeah, it was rough. But, you know, slowly but surely, we saw where the end was. And, you know, it's all about just sticking to the plan and just, you know, keeping on the journey and a lot of self-discipline involved in it. Yes. Was it worth it? Totally worth it.

Absolutely. I mean, how does it? Totally worth it. Absolutely. I mean, how does it feel to have no payments? Awesome. Yeah, it's incredibly freeing to not have to make another major payment. We can chunk it into savings. We can do all sorts of great stuff with it. You've got money everywhere now, huh? I know.

And I talk to other people, and they're like, how'd you do it? And so I get to share with them how we did it. Right. Very fun, you guys. Well, we're proud of you. Very good. Good job. Got a copy of Chris Hogan's book for you,

The Everyday Millionaire's Book, because that's what you're going to be. You're on your way. It's your next step, next chapter in your story. So great job. Matt and Mallory, Louisville, Kentucky, $82,000 paid off in two and a half years making 70 to 100 count it down let's hear a debt-free scream ready three two one we're debt-free Yeah!

Well done, you guys. Beautiful. Excellent. Man, that's as good as it gets right there. That's fun. That's how you start off your life. I love all these guys that are going through Financial Peace University as their pre-marriage counseling. There you go, man.

I love it. And see, then you can keep on it by just having your free membership in the Financial Peace Online experience, which is the membership online. Financial Peace University, the nine-week class, you go there. But then all the class materials and the videos and the audios for that class, plus the legacy journey, which is the follow-up class, are all online. And that's your Financial Peace membership. And your EveryDollar app is there, the hook to your bank, which is EveryDollar Plus.

That's about $120 value. That's all online. It's all free when you go to the class for the first year. That's pretty cool. And you're going to want to stay with it because there's all kinds of stuff in there. And some of you that have been through the Financial Peace University class, you need to jump in and get the subscription to the membership because there's all kinds of stuff there that you could do.

And, man, the streaming of our live events, all kinds of stuff is built into the membership. So you don't want to miss out on all that. All right, open phones at 888-825-5225 you jump in we'll talk about your life and your money kim is following us on youtube dave my husband can make good money in a more expensive city and we don't want to retire where we are now i may not be able to get the same job there that i have now should we make the move we need both incomes to make it well um i think if your husband can line up a job in that city before you make the move then you go line up a job in that city then you can make it but um i mean i don't know i don't know

what good money is and i don't I would not move to a different city just to chase income. There have to be more to it than that. It's where I want to live. It's where I want to raise my kids. It's where I want to attend church. It's where I want to have my life. And I can make more money. But if you move to a place that you hate and you're miserable, you move to Florida and you don't like hot weather and you're miserable and you don't like humidity and you're miserable and you know, you really want to live in New York and you move to Florida. That's, that's, you know, don't do that for money. You figure out a different way to change your career, figure out a different way to change

your income. But if this is a move that's positive all the way around, and the only thing holding you up, which it sounds like the way this is worded, Kim, the only thing holding you up is you got to get a job. Start shopping for a job there. Go, hee-haw, this is a great adventure. Get his lined up, get yours lined up, and then head, you know, load up a truck and head to Beverly, kiddo.

Get her done. You can do this, but you just got to go ahead and put, you know, you have to put the steps in place. And one of the things about when you set a good goal like this is you can just step back and say, what has to be true in order for this to be smart? What has to be true in order for this to be our? What has to be true in order for this to be our next step? And in your case, it sounds like what has to be true is you need your income there. So you need to find that you can get a job or that you have a job or that you have a really good lead on a job or some hope that is reasonable and wise for you to make that deal, to make that jump. And then go do it, man.

Go do it if it's what you want to do. This is the Dave Ramsey Show. We'll be right back. Thank you for being with us, America. Alicia is with us in Rochester, New York. Hi, Alicia. How are you? Good. How are you? Good. How are you? Better than I deserve.

What's up? I want to thank you for the opportunity of speaking with me. I have a 16-year-old, and unfortunately, we have not put money aside for college. Do you encourage putting college on hold until there's enough to pay for in cash? What do you suggest? Well, you're 16 you said i know my daughter's gonna it's 16 just turned 16 oh i'm sorry your daughter is 16 okay um i think you guys can make it it just is going to be all about college choice and uh it's going to be all about her working so there's three or four things things we do. The biggest mistake that people make when they're in a situation like this is they choose a college they can't afford.

And so she needs to go to in-state, and she may need to do her first year in a community college. Very inexpensive. And knock out some of the basics and just make sure that she's taking classes that are transferable to the in-state state institution okay and go ahead and price that stuff out now once you've done all of that then you can start to set your goals and say okay how much extra work have we all got to do because that's the second thing she's going to be working a lot and she's not going to be working a minimum wage whopper flopper job she's got to make more money than that she's going to be nannying or uh waiting tables or uh walking dogs i don't know what she's going to do but she's going to be doing a lot of it between now and the time college starts and all

the way through college which by the way the way, is not child abuse. Most of us worked while we were in college. Right. Okay. So if she's working, let's just pretend for a second. I'll just make up something. Okay. She's driving for Uber.

You drive for Uber. You can make $1,500 a month, but you're driving almost every night. I'm not saying that's what she would do, but there's part-time jobs out there like that that you can do and if you can make 1500 bucks a month that's eighteen thousand dollars a year if tuition is nine thousand dollars we can cover tuition and some of the other stuff and you and her dad hopefully can chip in some you're getting on a budget you'll be able to throw some at it as we're going along but uh we've got to have a plan to make more than the cost of tuition and housing while we're in school and really to get the first year started before we get to school

we got to have that first year however we're doing that whether it's community college or whatever um is there a college a university there in your town yes there is right yeah yeah she may be living at home and going to that one it's cheaper okay so the point is the point is you might not have the all cushy wonderful sweet with hearts around it and skittittles and Unicorns college experience. Oh, I wanted to live on campus. Well, that's nice. But we're not talking about your college experience. We're talking about your education.

We're trying to put some knowledge in your noodle. That's the main thing. Are you going to learn something and get a degree? And then all the other stuff is window dressing. And if you've got the money for window dressing, that's fine. But if you don't have the money for window dressing and if you've got the money for window dressing that's fine but if you don't have the money for window dressing most people spend more on the window dressing around the college experience than they do on tuition they go rent an apartment with a skylight a jacuzzi and a racquetball court and they're freaking 18 years old. They get a car with a car payment.

Because I have to drive back and forth. And they eat out every night. And they join 63 different sororities and fraternities and clubs and crap. And there's nothing wrong with all that as long as you've got the money. But if you finance all of that on your student loans and you come out with $60,000 in student loan debt, that you spent 100% of that on the experience, well, that's just not wise. And that's what most people do in these situations. So I think you can do this.

As a matter of fact, I'm sure you can do this. So thanks for calling in. Open phones at 888-825-5225. John is with us in Baltimore. Hey, John, how are you? Fine. Thank you for taking my call. How are you?

Better than I deserve. What's up? How can I help? I'm sorry. Your phone is cutting out. You're going to have to start again. Can you hear me, sir? Yes, sir.

Okay. I have about $133,000 in debt. It is a combination of a ton of stuff. And the embarrassing thing about this whole thing is I make $300,000 a year. Okay. I don't know, like, I just don't even know where to begin. And about eight months ago, I started putting money away in mutual funds, and I'm down about 5%. Now, my question is, should I sell those to start paying the debt off? Yeah. Are they in a retirement account?

No. Unfortunately, I'm 42 years old, and I don't have a retirement account so i'm just well we'll get you there sleeping at night so you've got a hundred thousand dollars in debt what'd you say 133 133 and what's that on it's credit cards personal loans student loans a car it's everything how much of that's car? I would say about $35,000, and we're probably underwater if I try to sell it right now. Okay. And you're married? Yes.

Kids? Two. Good. Okay. Wonderful. All right. So if you're ready to clean this up, we can do some pretty simple math here and say $65,000 a year out of $300,000 for two years and you're debt-free. 65 times 2 is $130,000.

But what that means is you guys are going to have to quit visiting the land of stupid around there. Y'all been spending money like you're in Congress. Pretty much, yes, sir. Yeah, you're going to get on a written budget, a detailed plan. You and your wife are going to sit down and talk about it. We're not going out to eat. We're not going on vacation. We're freaking getting out of debt.

But if you start chunking down $65,000 a year out of $300,000, you ought to be able to do that really seriously. I mean, come on. You'd be debt-free in two years, and if you did more than that, you'd be faster than two years. But you need to be on beans and rice, rice and beans, and need to go to a radical change in your lifestyle and on your view of money, because right now you're trying to out-earn your stupidity. Pretty much.

I tried it for years. I couldn't do it. I don't know of anybody that could. Would you take the $20,000 that I have invested in those mutual funds and sell that even though it is at a loss to start applying to the debt? Yes, immediately. And any other money that I can get my hands on that's not in retirement, and I'm going to throw it at the debt.

And I'm going to list those debts smallest to largest. We're going to get on the every dollar budget on a detailed written plan with your spouse and get in attack mode. The $20,000 doesn't move the needle. budget on a detailed written plan with your spouse and get in attack mode. The $20,000 doesn't move the needle, but what it does do is it gets you started and it shows your emotional commitment to a new process. But you've got to reach the point that you've got to be sick and tired of being sick and tired. You started it because you're embarrassed.

Embarrassed is a good place to start. Disgusted should come from embarrassed and disgusted the next thing is you ought to just get pissed off and go that's it i am sick and tired of being sick and tired i make too much money to be this broke we're gonna change this thing and when you have that moment inside of you that's when the switch will, and you'll be ready to rock and roll. I'll send you a copy of the book, The Total Money Makeover. It'll show you and your wife how to do this, and you too need to sit down tonight and start talking about this.

Get on EveryDollar, download the budget app, get the thing started. You write down where your money should be going, making 300 grand. You're going to just throw up on the floor. You're going to go, where is it all going? And you're going to have this moment of disgust followed by some righteous anger, not at yourself. I'm not trying to condemn you. We've all done stupid stuff. But you have to reach a point of disgust that says that's beyond embarrassment that says I'm not going to live like this anymore.

So hold on. I'll have Kelly pick up. We'll send you a copy of the book, The Total Money Makeover, to help you do it. By the way, folks, the interesting thing is that's the formula for getting out of debt. You got to get mad. The madder you get at the situation, the deeper you will sacrifice. The deeper you sacrifice, the faster you get out. Because sacrifice looks like working extra and spending less. We spend nothing because we work all the time. That's what it looks like. The madder you get, the deeper you sacrifice, the faster you get out.

That is the formula. There's math in there. It works, guys. It works. You can wander into debt, but you can't wander out. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about a product or service

and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.