The Ramsey Show - App - You Can't Outrun Your Debt (Hour 1)

Episode Date: December 15, 2023

Девочка-пай Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by my good friend Ken Coleman. This is your show, America, so make it happen. Give us a call at 888-825-5225, and we'll help you take the right next step for your money, your work, and your life. And my friend Ken here, he is the expert on helping you get to that work that you love, helping you get that bigger shovel, help you work on that greatest wealth building tool, your income. So please call in with your questions for Ken as well. Absolutely. And we love being together. People, a lot of chatter out there on social media. So much chatter. A lot of chatter. We really do

like each other. We have some fun little jokes here and there, and we're going to have fun today. You said to me right before we started, let's have a little extra fun today. That was my encouragement to you since you're a fuddy-duddy normally. It's a great word. The youngsters don't know what that means, but we're going to help some people today. So let's get to it. Fun and practical advice. That's what we're all about. All right, let's do it. Miles joins us up first in Nashville, Tennessee, right down the road. Miles, how can we help you today? Hi, yes. Thanks for taking my call. Question. I was in an accident on Thanksgiving. Oh, no. You okay? Yeah, I'm okay now. So the vehicle is a total loss. And at the moment, I don't have the funds to purchase another car. Now, I am currently using

a family member's car just to get back and forth to work, but I don't want to use that for an excessive amount of time. What suggestions do you have that you recommend before I proceed? Well, what the heck happened with insurance? So, yeah, so the insurance paid out, the gap insurance. Essentially, it paid out what I owed on the vehicle. So I broke even. Now I'm starting fresh all over again with another vehicle. What kind of income are you making?

I do about $45 a month. Is that before tax or after tax? Before tax, I'm sorry. Okay. How quickly can you save up money for a car be realistic um honestly um i couldn't really tell you and the reason being is because the vehicle was was part of the biggest uh expense that i had uh so i haven't even gone a full month uh of seeing what what my income would look like without it. What was your car payment?

So the car itself was about $270, but then because of the type of vehicle I had, I paid $400 a month in insurance. So I was like, I guess, collective right at $600 a month. So $270 plus the four. So you're talking, you freed up $670 a month plus gas, plus maintenance and repairs. And so we can at least put that towards the savings on top of whatever margin we can find with this income. Do you have any other debt? I've got some older debts and personal loans and credit cards that I've been actively paying down. Now I'm probably right at 10 total. 10,000 in debt still? Correct. And I'm assuming nothing in the bank, paycheck to paycheck right now? Got about maybe 1,500 in savings at the

moment. Okay. That's a start. So let's say you've got this $1,000 starter emergency fund, you have 500 bucks left over, And now we're going to get to the point where our one singular goal, we're going to make minimum payments on the rest of our debts. Right now, we got to get you some transportation. And that might mean you're going to go down to your mechanic and go, hey, guys, I'm looking for the most beater of the beater cars that you got. Someone gave it to you for parts and you guys are trying to just fix it up and sell it. Do you have anything like that hanging around? I'd be calling every mechanic and dealership, independent dealership around to see what they have and what the lowest price car is.

And you might find one for three, four grand. Okay. And you could save up three, four grand in a few months if you freed up that payment plus the margin you have from your income. And get busy. You're making a lot of payments. Get busy. Selling stuff. Get busy selling stuff extra side jobs making more money like right now you're trying to come up with 20 30 hours a week of hourly work to get this car funded i'm pulling up you know i love to do this is my favorite thing to do use cars for sale in nashville under 5 000 well i tell you this miles i have confidence because i helped a Ramsey team member here get a car for $2,000

not long ago. Right. And it's not a flashy vehicle, but it's running. What were you driving before? A 2018 Sonata. Alright, and how long can you drive this family vehicle? They're patient,

and I can tell they're patient, but i kind of want to get it back to them relatively quick what does that mean would they be okay for four months if they didn't have this vehicle i'd probably say maybe two months max okay well i would get real good clarity with them say hey i'm trying to save up here's my goal. My goal is to get you this car back in a few months. What's the urgency? When do you guys need this back by? Let's get some real facts. I almost wonder if they wouldn't be willing to have you pay for the car a little bit.

What's this car worth? Could you buy it from them, or is it too nice of a vehicle for you right now? So we talked about that as well, about the opportunity of me buying it. They declined on that because they want to keep it as a backup vehicle in case theirs goes down. They only have one vehicle as well. What's your commute like as far as work goes? 10 miles, so not far at all. Like I said, worst case scenario, I could walk if I have to, but I know it's going to be getting pretty cold here pretty soon. Sure. But you could also, you know, if you had to Uber for a few weeks,

that's not going to be a deal breaker. No, no Uber. If he could walk, I'd rather him walk than Uber. Have you walked 10 miles, Ken? Have I walked it? I've never walked 10 miles. I've run 10 miles. I'm just saying.

Walking 10 miles in 28 degrees in Nashville. I'm making up a point. Sure. It's the principle. He doesn't need to be spending Uber money to get to work. I'm just saying, worst case, if he loses this vehicle, it's not a deal breaker. All right. I sound like the curmudgeon.

All right. You're right about the walk. He said it. I just went with it. I'd get a bike. I can bike in 10 miles pretty quickly. Yeah, I had a buddy of mine that lived on my bedroom floor because he needed a place to crash, and he would bike to work at TGA Fridays back in the day, and he survived to tell the tale.

It's been done before. This guy is in a situation here where he's got to scramble. Yeah. And so you can come up with it. But I'm telling you, I'm looking at cars right now. Well, I can tell, Miles, you want a 3, 3,500 will get you a decent car for a season. Yeah, I'd start looking around. Start doing your homework while working these side jobs.

But my guess is within three or four months, you've got a beater car, and that's okay. And six months after that, you can upgrade that by a few thousand bucks, and you're going to be out of debt soon. And this will be a blip in the grand scheme of your life. But I hate that you're going through this, man. But I'm glad you also got rid of the car payment. That's a rough way to do it. But you just freed up 700 bucks a month, my man. Yes, sir. I appreciate it. Thank you for taking my call. Yeah. Best of luck with this situation. And there's a lot of local dealers dealerships and mechanics can that i think would be happy to let go of a vehicle that has been sitting on their lot that needs some work but i mean listen

the bottom line is if you're looking for cars under three grand they're all over the place facebook marketplace yeah it's true they're out there man oh man the cars he's gonna have to get some really good walking shoes. I would do. I'd probably buy a bicycle before I walk. How long would it take you to walk 10 miles? My little legs? I'm going to give it at least 45 minutes. Is that fair?

I don't know. I think you speed walk. You could beat that. I'm not a marathoner. I would love to see you walk 10 miles. I'd out-walk you on any day. Not a chance. Guarantee you I'd out-walk you.

That's for another episode of The Ramsey Show. But for now, more calls coming up. We'll be right back. Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman this hour. The number to call is 888-825-5225. Ken, I erroneously said that I could walk 10 miles in 45 minutes in a previous call. That's really walking fast. I just looked up the average time it takes to walk a mile. It's about 20 to 30 minutes a mile. Yeah. I was going to say the world record for the fastest mile is what?

I'm not sure about that, but the average walking speed is about three miles an hour. Right. That's average you don't know my speed walking ability but like the fastest mile of all time i think it's just under four minute mile i think and so what he said but we were all discombobulated because i was just generally saying i was playing the boomer role ah i said walk all i could think all i could think as soon as he said it i went i did 17 and a half miles in seven hours. There's no way he's going 10 miles in 45 minutes. George is a quick one though. He's quick. They're little, but they

are quick. My friends, them feets be nimble. Them feets be nimble. I love it. Oh, it's too much fun. We're already having fun. Let's see if we can screw some more stuff up. All right. What do you say? Let's go to Renee in Miami. What's going on, Renee? Hi, how are you? Thank you for taking my call. We're doing well. Good, good. Quick question. I've made a little bit of money this year. I don't really have any debt other than maybe $15,000 that I owe on a car. And I have a really good accountant that has advised me to open up a few different accounts to put some of that money in. I have an S-corp that I opened this year and so I'm right now trying to consider do I need to hire a financial planner by the end of the year in order to help me to diversify and put some of my income in these

different buckets. So you have a pile of money sitting in the bank right now? Is that what you're trying to figure out what to do with it? I do. All right. So hold on. So I thought I heard you say you don't have any debt except for $15,000. And I'm confused because that's debt. Well, it's a car. So if I could just pay off the car, I'm assuming. So what's been holding you back from paying off the car? Trying to decide if I want to keep that car or not. But the debt can go today. You can make the car decision later. Yeah, you're exactly right. How much money are we talking that you have in the bank?

About $150,000. Okay. So you got $150,000. That's pretty much everything to your name in liquid cash? Yes. And what's your income? This year gross about $200,000.

Good for you. What do you do? I'm in real estate. Nice. Way to go, Renee. Fantastic. Thank you. You got plenty of cash, so you shouldn't be holding on to the car payment just because

you're not sure if you're going to keep it or not. You have enough cash to pay it, be debt-free, and that's what we teach. We want you debt-free before we start investing. Okay. So if you became debt-free today, and then you put some of this money aside for an emergency fund, let's say that leaves you with about $100,000. Is that fair? Yeah. Okay. So with the $100,000 left, are you a homeowner right now? Do you want to be? I'm not right now, and I do want to be next year. So that's kind of the next step that I'm going to take in the new year. Okay, awesome. And you're in real

estate, so you know the stuff inside out. But what I would do, you don't necessarily need a financial planner right now. It's good to start that relationship and you may want to open up, you know, a Roth IRA because you're on the cusp of getting ready to start investing that 15% as soon as we clean this up, get the emergency fund in place. And I assume if I'm you, I'm going to use all of that extra money for the down payment on this home. And so I would leave it liquid in a high yield savings account in order to do that, which means you don't necessarily need a financial planner today. Okay. So my accountant, because again, I'm sitting here at December 15, and they've advised me to open up HSA, 401k, a Roth, and a high yield savings. Awesome.

Those are all good things. There was no red flags on any of those. And I think you are on the cusp of being ready to do that, in which case I would start that conversation. There's a SmartVestor program where you can get connected to investing pros at ramseysolutions.com. So I would advise you to do that if you want to start to get the ball rolling, figure out which investment options make sense for you as a solopreneur, self-employed person. But you're there. But the thing is with real estate people, what I found, Renee, is that they tend to want to get fancy and complicated instead of just following a simple proven plan.

Okay, got it. So what you don't want to do is go invest this money because someone told you you can make a lot more. You can turn your $100,000 into $300,000. Instead, I want you to use it toward your very soon-to-be financial future of being a homeowner, which is going to get real expensive real quick, especially in Miami. Yeah. So you may need more than $100,000 down in order to afford a house in your budget. What's your car payment right now? Oh, like $350,000. So the reason we want you to pay that off today is because A, you have the cash, and

now it gives you even more options because you can sell that car right now if you want to. You can hang on to it. It's not costing you any money. In fact, you give yourself a $350 raise per month right out of the gate. But doing what George said, get the emergency fund in place. Then you sit down and you figure, okay, what do I want to save for the house? What's my investment?

You know, the investment strategy we teach, 15% of your income after you've got your debt paid off and after you've got your emergency fund set up. But you're already able to do that. It's just moving the money around today, literally today. It's instantaneous, which is awesome. So that's the great news. This is not a six-month journey to do all of this. You're going to be there real soon, Rene, so keep it up. Good job.

Awesome income. Great income. Way to kill it. Let's go over all the way across the country to Spokane, Washington. Sandy joins us there. Sandy, how are you? I'm good. How are you guys?

We're doing great. How can we help today? Good. So I am a homeowner, and I had a piece of property that was deeded to me 20 years ago, and I decided I was probably never going to live on it, so I sold it while the market was kind of up and I got about 170 for it. I paid off my car and all the other debts that I had. So now I'm basically debt free except for my house payment.

Okay. But I also don't have much of a retirement because I've always worked in jobs. It just never worked out. I'm 53. So I'm not a spring chicken. So I have this money sitting there and I'm not sure if I should put it on the little IRA rollover account that I have from a job a long time ago that's got $1,500, if I should put it on the house. And I also have now my student loans due because during COVID I got my master's in business.

So I'm just trying to figure out where the best place is to put this $130,000 that I have. Well, first order of business, you just let the cat out of the bag. You still have some debt, Sandy. You've got those student loans to pay. Well, student loan. Yeah. Well, just literally my first payment is due this month. Okay. What's left on the student loans? I didn't have anything. Yeah. What's left on them? It's 18. Okay. So what would you have left after you pay off this $18, on the student loans? I didn't have anything. Yeah. What's left on them? It's $18,000. Okay. So what would you have left after you pay off this $18,000 in student loans? How much money? About $110,000.

Okay. What's left on the mortgage? Yeah. $190,000. Okay. Awesome. And you have an emergency fund on top of that, or is this it? It's all tied up in this $110,000?

Well, yeah. No, it would be. I have... No it? It's all tied up in this one. Yeah, no, it would be, I have no, because it's all dumped into savings. So out of that one 30 that's in savings, I guess 10 of it would be my emergency. Okay. I'm probably a hundred to be fair. We need to bump that up. 10 feels real low for you for an emergency fund. Um, I would lean towards three to six months, maybe on the six month side. Are you single, married? Yeah, I'm single. What's your income?

Not enough. Well, I was working at a job, and they laid me off, and I took a $10 cut in pay. So what do you – That was like two months ago. All right. So right now I make like under $45 a year. Okay. What were you making prior?

So prior to that, you were making over $50? Yeah, I was making $30 an hour. Now I'm making $20. Yeah, if I were you, I would, George, I'd like her emergency fund to be based on the $30 an hour. Yeah, look at your household expenses today as they stand and multiply that by six, and that'll give you that number that you need to keep aside from the savings. Okay.

Yeah. And then we've got to get back in the game. You've got a master's degree. That's something. And hang on a line. I'll tell you what I want to do. I want to give her a little bundle, a little Christmas bundle. I'm going to give her the Get Clear Work Assessment. It's going to really help you with a great job description, an ideal job description for you based on what you do best and what you love to do. I'm going to give you the book From Paycheck to Purpose, which will help you get there once you know what it is. And I'm going to give you the book The Proximity Principle, which is how to connect with people to get the opportunity knocking on your door. All three of those gifts from me and Uncle Dave. Love it. And

Sandy, once you get the emergency fund, I would max out that IRA for the year with some catch-up contributions that you have at your age and throw the rest of the house and begin that journey. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by my friend Ken Coleman. The number to call is 888-825-5225. Well, Ken, we've got some news here, and it's not Ramsey news. This is national news from CNN, what the Fed's looming rate cuts would mean for you. So people are starting to get a little excited at mortgage rates taking a dip for the first time in a long time. They've dropped from 7.03% down to 6.38% in the last two months for 15-year fixed loans. And here's the article from CNN.

At the moment, rates are historically high, making all these loans and credit card rates and lending super expensive. But there's some economic projections that the Fed would significantly lower the predicted rates by this time next year, implying three rate cuts next year. A reverse course for rates has all kinds of implications for consumers. It goes on to say lower rates could make borrowing cheaper. That includes mortgage rates. Fed Chair Jerome Powell on a press conference cautioned that we're far from a hard landing scenario, but a turn to lower rates could soften the blow that higher rates have taken on the U.S. economy. And they go on to say, hey, this isn't all good news. U.S. savings rates, which have

been near their highest levels this century, would come down if the Fed starts cutting rates. So you've been enjoying your 5% in your savings account. That could come down. But there's also good news because mortgage rates could come down, which has been, it's been a tough thing, Ken, because a lot of people are hanging on to their low interest mortgages, which means less inventory, which means prices go up on top of interest rates being sky high. It's been a tough time for wannabe homeowners. Well, as we sit here right now, the 30-year fixed mortgage rate has dropped to 7.07%. As you said, the 15-year is at 6.31%. This is today. This is today's numbers right now. But the reason the mortgage rate is dropping is because if we look at the treasury yield and the

bonds and all that jazz, when you start to see the demand kind of slow down there, then you're going to see mortgage rates drop. So what are mortgage rates going to do over the next year? It's hard to say, but if you see things start to move into the sixes and low sixes, you're going to see the shock wear off for a lot of people who are like, I remember when it was three point nothing, you know, or whatever. And I think that's going to be interesting to watch. As real estate market goes so goes the american economy when we look at housing and in the form of people refinancing so we saw a spike in refinance last week when things got upset people were already going they bought i'll go down six months ago down to seven or a hundred percent so refinancing drives the mortgage industry. Housing starts, which means

builders, people selling, buying homes, and then doing the restoration to either sell it or the restoration after they buy it. That drives a lot of the economy. So it's going to be very interesting to see what happens. But right now, we get some really good economic news in the last 48 hours. And so it's really interesting to see what's going to happen, but I think you're going to see the real estate market really pick up. What's going to happen, though, is I don't know if prices will drop quickly, because right now there's such a low inventory and there's this pent-up demand, you might see another rush again. You might see a temporary spike in home values and prices. I mean, selfishly speaking, that's what I want to see. Jim I'm not a young couple. And I know a lot of young people are going, man, the price of homes

just continues to go up. And I think that's still going to be the case for a while. So I say all that to say this, I would not wait. I would not have the mindset. If I'm able to buy now, I would not wait a year or two years because I don't think we're going to ever see. Well, I shouldn't say ever. That's a dangerous word. I don't think we're going to ever see, well, I shouldn't say ever. That's a dangerous word. I don't think we're going to see the interest rates that we saw over the last five years for a long time. Yeah, twos and threes.

So for those of you that want to be homeowners, this could be huge for you because even a small percentage change, that can mean big savings. We're talking thousands and thousands over time. So no one knows for sure what will happen. But if you've been sitting on the sidelines and you're wanting to be a homeowner, do it when you're financially ready and don't try to time the market. And as Dave has said, quarter of your take-home pay, it's time. Go ahead and do this now. Otherwise, if you have the mortgage become 60% of your take-home pay, we've had those calls, that's heartbreaking. So don't do it under pressure. Don't do it if you're not financially ready because you'll end up house poor. But you can find a home within your budget and you can do that with one of our Ramsey-trusted real estate agents. These folks are experts. They know the market like the back of their hand. They care about

your financial goals. So if you want to connect with one for free, go to ramseysolutions.com slash agents. All right, let's go to the phones to Portland, Maine. Justin joins us there. Justin, how are you doing today? I'm doing great, guys. How are you? Doing great. How can we help? Well, first off, you two are two of my favorite personalities. Two of, Ken. Two of? Yeah. Well, that was not a compliment.

You started with you're my two, and then you went two of my favorite. There's only five of us. Okay, we'll take it. George, my only complaint with Smart Money Happy Hour is that it's only once a week. I'm sorry. We're doing our best out here. Blame Rachel Grace. Hey, Justin.

Inside baseball, George is only allowed to have one drink a week. So that's why we do that. They keep me limited. He can't handle more than that. We stick to the mocktails for that reason. Thank you, Justin. You're very kind. We appreciate it.

What's your question today? Yeah, so short question, just to make it simple, then we can move on if we need to. So should my fiance and I move closer to her new job even though rent is higher? Yeah, so basically my fiance and I are pregnant. Baby is due in April, and our wedding is next October. And right now we have paused baby step two and are in super stork mode because of the two stork modes. Our finances are separate, but to keep it simple, our take-home pay is $6,000 a month,

and we are currently saving $2,400 a month for stork mode. And with our current rent being $1,100 with everything included, moving closer to her work, which her new job is about an hour away from where we live, the rent goes up to about $1,400 to $1,800 a month plus utilities. That's a long way to drive, an hour, huh? You know, Ken, I knew talking to you, you kind of have that sentiment. So here's the thing, right? I live in Maine, and, you know, the snow.

She's okay with the drive, and that's awesome, but I don't know how I feel about it. Yeah, I don't like it. Is she going to be on some kind of maternity leave? She is, yeah. Once the baby comes, she'll be on a six-week maternity leave, and I guess that's another layer to it. I just wonder, can we punt this? Can she make the drive for a few months, then she's on maternity leave, then we can have this discussion

in the summertime to move? Yeah, yeah, it's not a bad idea. That's one option okay so let's let's run the numbers on this with george though so so what is the uh it would be how much more to your budget for both of you if you made the move to this new apartment was it three hundred dollars more and did i get that wrong yeah so the total increase again things are split but so the total increase is between $300 and almost $700 more, depending on what we can find. It's just there's not a whole ton of rentals. There's a good amount. There's just not a whole ton. And a lot of the times, you know, the more expensive you go, the more utilities are included.

But then there's the paid off. All right. So practical question. So this apartment, these numbers you're giving me, is this based on apartments that are right there close? So instead of an hour, they're five minutes away? Because I'm wondering if we could pull back and go, if it's a 20 minute drive or a 15, like within 10 minutes, it's going to be over two grand. The numbers I'm looking at are giving her a half hour commute, which I'm much more comfortable with. Okay. Gotcha. So you're already thinking that. Okay. But I mean, 1500 out of six, that's 25%. So you guys are right on target as far as those numbers go. It hurts because it's more than you're paying now, but it's not going to crush you guys financially.

Okay. And do I factor utilities into that or is that added on? That would just be your actual rent. Utilities would fall outside of that 25%. So you'd be okay. You guys have the margin to do it. But also I wouldn't wait until October to get married. Yeah. You're about to bring a baby into this world together, go to the courthouse and then have

a celebration later on when you guys are debt-free, man. This is why you and I should have an online license. We could have done the ceremony right here on the show. On the air, Justin. That would have been fun. We need to look into that, guys. I would love to do that. I think that'd be great. You're doing great. You're saving $2,400 in the stork mode until baby and mom

are home healthy. That's going to get you guys $10,000 right there. If they're healthy, throw it at the debt. Continue on. We're going to move on with our life. It's quality of life here, George. Get married today, my friend. Congratulations. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by my good friend, Mr. Ken Coleman. The number to call is 888-825-5225. Well, hey, it's Christmas time. Merry Christmas to all of our listeners out there. And of course, we love to give great gifts around Christmas time. And if you want some for your family, we've got a killer sale right now, the $12 sales happening, where you can get best-selling books like The Total Money Makeover, Baby Steps Millionaires, Own Your Past, Change Your Future. Ken Coleman's got some books on there for just

$12 each. And we also have some new stuff in the Ramsey store. Rachel Cruz has a new kids book that is just going bananas, Ken. It's called I'm Glad for What I Have. Oh, it's a cute book. It's a sellout. And that's great news there. Our friend Jade Warshaw has a new book called Money's Not a Math Problem that he just released. Hand me that bright orange one right there to your left because this is the one that I'm a little excited about this bad boy. Look at that. Look at this guy right there. They managed to somehow put you on a book cover. Your whole body got in there.

It took a whole team of editors to make this happen. Breaking free from broke. That's right. George's first book. This book is so good, and I'm proud of my friend. Let me tell you something, folks. I've watched George live this out. I've watched him live it out, his whole journey to Ramsey personality, what he does, paying off his house.

I've been there watching the whole thing. I love this dude because he's the real deal, and this book is going to help so many people just get away from the game, the matrix. That's what I love about this book. That means the world. It's all the financial wisdom that you would expect, but it's extremely practical. And because it's practical, it's hopeful. This is an absolute must purchase if you've got somebody in your life that just has no stinking clue about the financial game. They just don't get the game. They don't understand that they're just victims in a great marketing fix that broke is normal in America. They don't get it, but they want something a little snarkier, a little bit more of their speed. I think this is a must get

for every college kid in your life who's coming out and they need to understand it because George speaks the language. And the parents never learned it. So this is a great way for the parents and their kids to go, all right, I got to learn the truth about money. George cuts through the noise. That's what I attempted to do here with a lot of humor and research. And of course, snark. And you hand this to them and they go, well, this is no boomer talking to me.

No. Look at that little hipster. You look cool. You got your Gap jeans outfit on. I mean, the Oshkosh bagosh jacket. You look so cute. It's so great. I aim for cute, Ken.

Look at that. So anyway, go get that. That's available at ramsaysolutions.com. Yes, it's on presale right now. We also have, Ken, some limited edition autograph copies. I signed a few hundred of those, and there's still some available. Can you call that a limited edition? Well, there's only a few hundred, and after that, they're gone.

You're never going to sign a book again? Never again. So it's special. So you go in the Ramsey store, you can search for Breaking Free from Broke or search the word autographed, and you'll find it in there. And by the way, all my books will forever be signed if you want them. I'm not going to limit myself to the people. You just made a promise you can't keep. I'm a man of the people.

I will sign any book. Your mouth just wrote a check that you can't cash, my friend. I don't even know what that means, but we'll see. I've heard it said before. Okay. So go check all of that out, ramsaysolutions.com slash store. Now's the time. You can still get some gifts, especially the digital ones, in time for your loved ones for Christmas.

Marie is up next in Louisville. That's how we say it, Ken. Is that right? The great state of Kentucky, the Commonwealth of Kentucky. There it is. Somebody's been paying attention. I thought Ken would like that one. I appreciate that.

Marie, welcome to The Ramsey Show. Hi. Thank you guys so much for having me. I'm still learning how to say Louisville the right way. There you go. That sounded pretty good. Well, I've had a lot of practice since moving here. I've been here since June. But anyways, thank you guys for having me. I am just looking for a little bit of guidance on just how to attack the debt that I've got myself into over the past year. I'm 27 years old and this debt spiral really started probably at the end of 2022. I ended up ending a relationship with a person that I own the house with. Won't do that again. I'm not married to in the future, but I really didn't have any debt before then, besides some student loans. And ultimately, I assumed the mortgage and ended up taking what

was in savings and buying him out of the house when I assumed the mortgage. But then fast forward to this year, I had to relocate out of state for my job without a whole lot of warning. And, you know, it's harder for me to save at a time because I went from splitting bills 50-50 to, you know, everything being on me. And so at that time, I had, you know, probably piled up a lot more debt in my just getting ready to sell the house and, you know, fixing things and, you know, in preparation to move. Um, and with a mentality that like, Hey, when it sells, like, I'm just going to be reimbursing myself. And as you can imagine, like with the market, like I had it listed for about five months, even after had moved. And I was paying, you know, rent and utility in my new city here in Louisville. And then also paying,

you know, the homes expenses between June and November, um, so not being able to save there either and so during this time I also totaled my car so I had to buy a new car too just ironically but anyway so um with all of this like my mindset was just in the place that when I sell my house I'm going to replenish my like replenish my savings and pay off all this debt but that wasn't the case so I now do have a renter in the house to at least alleviate myself from the responsibility of having that mortgage paid, the expenses for that home being covered. But just obviously the quick fix to my debt solution would be to sell my house and get that money, but that's not the situation I'm in right now. So I'm just trying to get some advice

on how to attack that debt. How much debt do you have now outside of the mortgages? Outside of the mortgage, it's $69,000 total. And the breakdown is $24,000 in car, $12,000 in personal loans, $9,000 in credit card, and the $24,000 in student loans. And before all of this, I had just the student loans. What's your income? I make between $140,000 and like 140 and 160. Heck yes. Good for you. That's what we like to hear. So Marie, why can't you sell the house in the other state? Does your real estate agent suck or is the home just overpriced? I went through two different real estate agents, had it listed for the five months and

did decrease the price of the home. I just think like the area that I was in, there was way more in inventory sitting on the market than there were houses actually being closed and sold. And I decreased the price often, like did a lot of like analysis around that. It just, I kind of think that it was probably just poor timing and I didn't really, I wasn't really in control. If I didn't have a job change, obviously where I had to relocate out of state, I would have stayed there, you know? So it was kind of just an unfortunate situation. So, I mean, I wish I had the answer to why. How much equity do you have in that home? The home is worth about $380,000, and I owe about $195,000 on it. I've got to tell you, kiddo, with the interest rates starting to drop,

I'd be talking, I'd be finding another really good real estate agent. I'd be thinking about that. Wouldn't you, George? Because it's out of state. You don't want to be a long-distance landlord. And I want you to be debt-free. I mean, you can claw out of this pretty quickly, making $160,000, paying off, paying off 69. This is a solvable problem, but you could also leapfrog it. Go to ramseysolutions.com slash agent Marie and connect with one of our Ramsey trusted real estate

agents. These folks are rock stars and they'll be able to help you figure out why this thing hasn't sold. Because with inventory, I know you said it's hotter in your area, but overall people are jonesing to find a reasonably priced home. And to find a home under $400 in today's world that's solid is hard to do. So I think this thing can get sold. It's going to help you get out of debt faster. But the key that you want to focus on right now is this debt snowball. So how much money do you have in the bank right now?

I have about $4,000. I've completely stopped using the credit cards since becoming a landlord. I had about an $8,000 cash bill I had to pay that wasn't covered by homeowners insurance four days after my tenant's been in. Well, that's the problem is you're trying to get out of debt, but you're also a landlord. And so you have to have this little side emergency fund right now to cover those expenses. So I wouldn't tell you to deplete that to pay down debt in this weird season that you're in. But the rest of your income is going to go toward debt. You got to cut your lifestyle down to nothing.

And if you want to end up selling the car, that's okay. The car is not a huge part of your world and income right now, but it would alleviate some stress. But you're going to focus on the credit cards first. That's your smallest debt. Make minimum payments on the rest. Once the credit cards are knocked out, move on to the personal loan and then onto the student loan and car loan. And you can do that. Most people do it in 18 to 24 months. I think with your income, could you live off of, you know, less than half your income right now and throw the rest of the debt? Yeah. Yeah. I mean, I don't only use my debit card anyway since October,

so I think that, yes, I can do that for sure. I just need to budget and put a plan together. I love it. Yeah, if you can throw $7,000 a month at this debt, it's gone in less than 10 months. So that's the math on it, but now we have to get our behavior to line up with the math, and that's the hard part of being a human. So thank you for the call, Marie. We are wishing you the best with this home sale.

Again, ramsaysolutions.com slash agent is the place to go to get connected with a Ramsey trusted real estate agent. That puts this hour of the Ramsey Show in the books. My thanks to Ken Coleman and all the folks in the booth keeping the show afloat in you, America. We'll be back before you know it.