The Ramsey Show - App - You Need A New Picture Of What Life Will Look Like (Hour 2)

Episode Date: June 1, 2023

Jade Warshaw & George Kamel answer your questions and discuss:  Why you should always make sure you have the proper coverage for your vehicle and family that drives them, from the blog: Protect Yourself With The Right Coverage "What should I do with money I saved for school now that I got a full ride scholarship?",  How TurboTax cheated millions of people,  from the The Fine Print Podcast with George Kamel: How TurboTax Is SCREWING You "Should I sell my house to be completely debt free after a divorce?", from the blog: Finances After the Unexpected: Divorce, Remarriage, and Death "How do we get out of $50k of debt with low income?",  from the blog: How to Get Out of Debt on a Low Income Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's the Ramsey Show, where we help people build wealth, do work that they love, and build actual amazing relationships. I am your host jade warshaw and i am joined by the most incredible george camel now it's just condescending jade come on no one's believing this i only speak the truth the truth george the the truth the whole truth nothing but the truth that's what we do on the show we tell you the truth that's right we will so call in give us your situation we will chop it up amongst ourselves and we will come to the most logical conclusion that is what we do on this show and that's what we're going to do right now with benjamin from boston massachusetts

and by the way you can call us at the number 888-825-5225 that is what benjamin did and here we are benjamin what's going on buddy how you doing doing good how are you good i'm just uh i called to put in uh my situation to see what you guys would uh instruct me to do and i'm open-minded and i'll be very honest with you guys and everything um a year and a half back about a year year, we were in a lease. It was a 2023 Honda Odyssey. We were paying $400 a month for the lease. And my wife got hit with three of my kids in the car. And the car rolled over three times. Oh, my gosh. Yeah.

On a lease, you have to have full insurance. There's no going around it, which I did. Okay. I had full insurance. Everything was done. Thank God none of my kids were hurt. My wife hurt her wrist pretty bad. Oh, thank God it wasn't worse.

My goodness, that sounds terrible. When I got got the phone call believe me as a father my my heart dropped all the way down like i thought i thought my brother-in-law was lying to me at first and nobody was hurt because you know how they try to comfort you so it was very emotional for me but thank thank God, everybody is. Yeah. And nobody was hurt. But the insurance left us hanging because the car was totaled. They said, we're not covering it. My wife ended up getting sued for $7,000 and we were left with all the medical bills. Now, I was kind of in the process where I was already reading and my

sister was teaching me about Dave Ramsey and all the breakthroughs and everything like that, because my sister did this program and she succeeded. She paid off her house. They have no bills. They're doing really good with everything. So they were teaching me some stuff. Unfortunately, I was at the beginning of all this. And now I was stuck with an $80,000 bill that, you know what I mean? They want you to pay for the card that you don't even have and everything like that. So when you try to reach the lawyer, everybody's pushing you away. No, I don't want to deal with you if you don't have money. So can I ask some questions about your? Yeah. So, I mean, of course you have to have coverage, but did you, I mean, what was your coverage at the time?

Because just by you saying it sounds like your insurance covered. What do you mean they just left you hanging? Yeah. Yeah. So the problem was this. My wife was in the process of getting her license, her Michigan license at that time, because we were in Michigan. And she drove somewhere because of an emergency. We were done with this apartment.

We really, really needed to get out to another apartment. This was during COVID, I think 2020 or 2021, I think. 2021 it was. And we really needed to look for a place. And I was working at the time. Unfortunately, the place where I was working at was really withholding money from us. Like, I do construction, and the guy was not paying. Benjamin, hold on.

What's that got to do with the rent? In one sentence, tell me why the insurance didn't cover the car. Okay, so the insurance didn't cover the cost is because they said she was not on it. So they paid nothing. She was uninsured at the time she was driving this vehicle. Yeah, she was not on the policy, according to them. It was just you. Yes, but I asked them, the car is in my name, not in my wife's name.

So I asked them this question. I asked them, wait a second. So if my dad comes over and takes the car, you're telling me I have to call you guys to put them on insurance? Technically, I know when I came here, I borrowed my dad's car as a secondary vehicle and I had to add myself and any other drivers. I either had to add his car to my policy or I had to add myself to my dad's policy because at the end of the day when you're insuring your vehicle you're insuring your your vehicle with yourself in those drivers it's not necessarily it's not necessarily saying that anybody can drive this car at any time and they'll be insured um so you know you those are, this is a really, really hard lesson to learn. This is a really.

Anyone who drives your car on a regular basis who lives in your household has got to be on your insurance. That includes the kids. She didn't drive it on a regular basis. That was the problem. She never drove it is because I owned the car and she wasn't driving. This was the only, I think, twice that she ever drove it. Twice. So have you been able to Twice. So have you been able

to speak with a lawyer? Because at the end of the day with this, you're going to need to lawyer up. I tried and they kind of push you away when you don't have the money. Unfortunately, a lot of times they don't want to speak to you when you don't have the money to do anything about it. Is it about the money or is it the fact that they don't think you have a case here? So every one of them that I've ever reached to, they said, OK, let me look into it. And then they never get back. It's because they don't think you have a case. Well, let's pretend like this is not going to pan out and you're going to owe this money.

What is the plan to pay this off? My plan was to honestly, the only thing that I can do is file for bankruptcy. No, no, that's not over $7 dollars no it's eighty thousand that's the medical bills medical bills the lawsuit the car and uh i'm adding a credit card debt in there too how much is the credit card debt credit card debt is about fifteen thousand okay what Okay. What's your income right now? And you and your wife combined. Okay. So just, just so you know, my income right now is very, it could be this in one month. It could be this in another month because I moved to Massachusetts and I'm trying to

start something with my brother-in-law right now, a business. But right. Okay. Hold it, hold it, hold it, hold it. I'm going to give you, I'm going to give you the blueprint right here. You need a job today. You need it. I get wanting to start a business, but we need to make money to day full time's still got to find a way to pick up some part-time hours here or there. We're going to pay off this debt. We're going to keep $1,000 aside as just a little savings,

little something there. And we're going to put any and all money into this debt snowball and pay off this debt. You're going to call up all of those medical bills and you're going to try to settle. You're going to try to make a deal for less and tell them, I don't have any money. This is what I can give you and try to make deals on those. And we're going to work the debt snowball

listing the stuff smallest to largest. And we're going to go after it. We got it. We got to change this, Benjamin. We can't, we can't try to, you know, it's fine to try to wiggle out of it, but sometimes you can't wiggle out of it. And if your wife wasn't covered, you have got some debt to take care of. And I'm sorry that you're going through this. You guys learned a really tough lesson in all of this. And unfortunately, there is a huge burden to pay because of it. Man. That's tough.

But bankruptcy is not your next option. That's right. You can climb out of this thing. It's not going to be fun, but you'll get out. No more loans, no more leases, no more credit cards. Cut them up. People pay off 80K every day. You can do it too.

This is The Ramsey Show. Hey, what's up, guys? You're listening to The Ramsey Show. I'm your host, Jade Warshaw, joined by one of my favorite co-hosts of all time, George Camel. Too kind. You're welcome.

And I want to tell you guys, so earlier today, I was up on the hill where our event center is, and I was listening to a live stream of our Entree Leadership Summit event that's going on. It's business leaders. It's absolutely incredible.

One of the speakers was talking about the two most important words in business, which are,roll, please. Thank you. Thank you. I tried. I know it was it was like more like raindrops. I'm not a drummer. That's all right. The words are thank you. And I thought, man, that's so true. He was like, if you can say thank you as often as possible when you truly mean it it goes so far and i was thinking about that man thank you to our listeners the folks that listen to this show that download this podcast that log on to youtube and because you know a lot of people george they just put youtube on the in the background and that's how they watch tv these days these kids and also younger and middle-aged adults as well

but my point here as I'm rambling on is if it wasn't for you guys listening to the show, me and old George here, we wouldn't have a job on the radio. It's not as much fun talking on that one. That's right. And so we're so appreciative of you guys listening to the show.

Maybe you've just been listening for a couple of weeks or maybe you're one of our longtime loyal listeners who's been listening five to 10 years. Thank you so much for tuning in. And let me tell you, if this show has helped you in any way, if it has impacted you, if you've learned a little something or you just find it entertaining, tell somebody, share it with a friend, hit the like button, hit the subscribe button, pop on Instagram and put it in your shares or send somebody a text or leave a comment. We just so, so appreciate your support. We so, so appreciate that you would trust

us enough to speak into really what's one of the most important and also very private areas of people's life, their finances. Are you kidding me? We'll talk about almost anything before money. Look, folks will call in and talk to us about their finances more than they might talk to their significant other about it. That is very true. You know, so just please know. Share the wealth. And we don't take that lightly. So I want to thank you guys. I know George feels the same way.

I know everybody here feels the same way. You guys are what keeps the ship running. With that, let's go to Michael in Houston, Texas. What's going on, Michael? Hey, thank you for taking my call. No worries. How can we help? So right now I am in a really good financial

situation. So right now I'm currently in my second year of undergrad at Texas A&M and all my college is paid for. Yes. Heck yeah. So I'm not paying room and board. I'm not paying tuition. I am paying nothing. How'd that happen? So right now I'm currently a cadet at Texas A&M. Cool. So I'm planning to go Air Force upon commissioning at A&M. Very cool. And it's just that I have at least $12,000 to set aside for investing, saving. It's just I'm thinking I should just leave that money here, but a part of me knows

not to do that. So you have $12,000 to your name, liquid cash, and you're going, should I be doing something different with this than letting it sit? Exactly. I'm guessing that's your emergency fund. Obviously, you don't have a lot of expenses right now while in school, but is that fair to say? Yes, sir. Okay. So if I'm in your shoes, that's a great base foundation. I'm going to leave that in a high-yield savings account, and anything beyond that that you save, we can start using towards some other goals,

like are you going to need a car one day? Are you going to need to save up for a home one day? Maybe we do start funding a Roth IRA if we've got some earned income. Okay. So do you have future income as well while in school? Like future income? Are you working at all? Well, right now I'm taking a break, but I'm planning to work some internships. Okay. So I would leave that money alone. I know it's very tempting to go like, I could turn this into 15,000 or 20,000, but you also run the risk of

turning it into zero if you do something stupid or risky. And the fact that you're not bringing in a steady income right now, it's just good to have. I mean, in most situations, we'd say three to six months. You're a little younger and you're still in school, but I think with your situation, it's good to have that there. You have a car? No, sir. Okay. so you're just kind of uh meandering around campus right now that's nice yeah look i like george's plan i miss that life the meandering life yeah yeah i feel that no response you know just being on campus was a different time so take advantage of this because you don't have a steady earned income i don't want you to go invest this money and all of a sudden one thing pops up and you can't pay for it.

Yeah, because whenever we're going to put our money in investments, we're thinking, hey, five years and beyond. It's not a short-term deal. You've got two years of college left. So at the very least. Oh, three years. So still, at the very least in three years, you might want to get your hands on some of that money for some of the things that George was talking about. So for that reason, I would do what George Campbell said. If you can keep this up,

you graduate debt-free with money in the bank, you are doing better than 99.9% of Americans and graduates. So we're proud of you, man. And thank you for your service as well. Yes, love that. Great call. Thanks for the call, Michael. I love when people are just doing right that's

great we needed we needed to win we've had some tough calls today people are in some real dark sad situations and so you know it's a little upper that's right someone who's like hey i've got money in the bank we're like whoa all right let's celebrate with you that's great well speaking of wins george here's a win that we can talk about uh it says turbo tax is sending out checks to 4.4 million customers as part of 141 million dollar settlement now before you start getting people's panties in a lot about this like oh 141 million let's just be real about this it says customers affected by the settlement will receive an email about the settlement and checks will automatically be mailed throughout this month most customers will get about 30 and some customers that use turbo tax for three consecutive years

might get 85 dollars winner winner chicken dinner that's about all you can get with that 30 bucks is a chicken dinner at this point i don't know no i don't even think you can get if it's a family of four you ain't getting a chicken dinner at Chick-fil-A. So you're probably wondering why, why are they doing this? Why do they owe so much money? Yeah. Tell us. Well, uh, they steered millions of low income Americans away from free tax filing services and tricked them and then ended up charging them. And so we've been talking about this, Jade, for years now. I actually released, uh released with another podcast I did here on the Ramsey Network called Define Print. One of our first episodes was all about TurboTax.

And it was called How TurboTax is Screwing You. I remember that. Back in March of 2021. I was here to warn everyone, Jade. Come on. I was out here on the street corner going, guys, don't use TurboTax. They're out to get you. The OG.

They're slimy. And here we are today with $141 million settlement. Do I take credit? No. Does it make me I take credit? No. Does it make me feel pretty good? Yes. You were the first to report on it, George. And let's be honest.

It says TurboTax is predatory and deceptive marketing. And I agree with that. Cheated millions of low-income Americans who were just trying to fulfill their legal duties to file taxes. That's what a New York attorney general said about it in a press release. She said, today, we are writing that wrong and putting the money back into the pockets of hardworking taxpayers who should have never paid to file their taxes. So-

Well, you remember that ad campaign that were running everywhere, and it was like, free, free, free. All they said was free. And then people went to go find this free, and they couldn't find it they tucked it away on the website deep in a corner and they ended up paying as a part of that and not only that but in the podcast we unpack their shareholder presentation which by the way that's all they care about not you the customer the shareholders and they have this huge strategy because intuit is the company that owns turbo tax of course And they have this huge strategy to push debt products towards the tax consumers,

all of the people who use their different products. And so personal loans, credit cards, they're getting into the debt business because guess what? That's where the profits are for these companies. These financial companies, they're out there to make profit and debt is a huge way they do that.

So when you use TurboTax, what they're doing is collecting all your data to then sell you on debt down the line. so what you're saying is when it comes to debt into it wants you to get into it oh that was good come on i got it that's a mic drop right there come on guys where's the hi-hat when you need man and by the way if you have not listened to the fine print podcast this is, we're putting you on notice. The Fine Print, it's so good. It was a limited series we did.

And I think there's like 10 episodes or so. You can go check it out wherever you listen to podcasts or on YouTube. We've got it streaming over there as well. But I just want to help people avoid all of these traps that are out there. And I can't keep up, Jade. Everywhere you turn, it's like another financial trap, another financial trap. It is exhausting, but it is worth it to save one person from getting screwed by one of these slimy companies. That's right.

And I quote the notorious George Camel, if you fall for the trends, you fall for the traps. There you go. Woo! Love it, George. We did some mic drop moments this hour. Magic. This is The Ramsey Show. All right, all right all right what's going on everybody this is the ramsey show i'm your host jade warshaw joined to my right by one of my favorite just a good human being

people think i'm paying you at this point jade to just say nice things no No, George. Clear the air. I have not received any payments above table or under the table to compliment said George Campbell. Yet. He is truly a wonderful human being. And I feel sorry for anybody who doesn't know him personally. All right. Wow. There you go, George.

That'll do it. That'll do it. I got to really. That'll do it. I'm driving with you tomorrow. Yeah. So I'll return the favor. I'll say nice things about you.

Okay. It's almost like those $2 you paid me are worth it. I'm driving with you tomorrow, so I'll return the favor. I'll say nice things about you. Okay. It's almost like those $2 you paid me are worth it. All right. We got Joe in Chattanooga. What's going on, Joe? How can we help today? Hi, Jade. Hi, George.

Thanks for taking my question today. Sure. How can we help? So I'll give you a little background, and then I'll ask a question. I'm recently divorced. I have three kids. I share custody with them, 50-50. My wife and I, we were debt-free, including the house, as of last May 2022.

And then through the divorce, which was final last month, May, I refinanced the house rather than us agreeing to sell it, and I refinanced it to reduce the change impact that the kids are going to experience through all of this. So my question is, should I sell or downsize to be debt-free again, and if so, when? So what is now on the mortgage? $260,000.

Okay. And this is just your income now. Are you able to afford that mortgage payment? Yes, but there's not a lot of margin there. What's your take-home pay versus the mortgage payment? I have about margin of $1,500 a month, but that's without contributing to 401k and the kids' education and paying early on the house. So what percentage of your take-home pay is this mortgage? Is it $30, $40, $50? No, no. It's like $24, $25.

Okay. So this is reasonable. Yeah, but it's a 30-year. It doesn't align with what you're all saying. What I'm trying to get at is this on fire. Is this like we need to sell this house tomorrow? And it doesn't sound like that's the case. It's not on fire. It's just, you know, like we'd work so hard to get to the debt-free.

It's frustrating because you feel like you move backwards. Yeah, and I still want to be able to give the kids that life that I've been working so hard for, we have been working so hard for, and I feel like it may not be, I don't know if fair is the right word, but fair to them. Well, what the kids want is you guys. So all the stuff and the luxuries, and we were going to take them to Disney.

We have to have a new picture of what this life is going to look like, and the best thing you can do is give them quality time and connection, and the best thing about that is it doesn't cost you much. You can have incredible experiences and make the memories, and you still have 1500 bucks. So if you invested 15% of your income and we set aside a little bit for college, we set aside a little bit for paying extra on the mortgage,

how much would you have left? So that would be, you still have a few hundred bucks. No, just to reach the 15%, it would be more than the $1,500. That doesn't make sense mathematically. Well, including my side hustle, I'm about $130. Okay.

So that would be $950 a year, and $1,500 is $18,000 a year. So I wouldn't be a little short. Hey, let me ask you, while George does a little calculation there, let me ask you just a side question about a little emotional side of this. Do you enjoy being in the house anymore? Because I feel like you're like, man, we were so far ahead. Our debt was paid off. Now not only are you dealing with this divorce, but now you're back in man, we were so far ahead. Our debt was paid off. Now not only are you dealing with this divorce,

but now you're back in the house that was previously paid for. You know what I mean? You're back in this situation that's like, so I just want to know how you feel about that. Is that underneath this or is it truly just, well, it's too much of my take-home pay? It's a combination of both. You know, I still want to be, obviously, this was our home for the last six years.

So that's challenging to come here every day and be here. And then you've got the other side where, you know, we did work so hard to to get there um but i'm not i i stayed in the house for the for the kids i took a step like a huge step back in my career for the kids so i could have that connection have that quality time with them to reduce all of this this horrible impact that they're going to experience. If you did downsize, what would that look like? Can you paint that picture for us right quick? Yeah, so what I've been looking at are these,

they've got townhouses here in Chattanooga, and I could downsize to one maybe 1,500 square feet, and I could effectively be debt-free. I could take the equity from this house almost and pay cash for one of these townhomes. And to me, I don't know if that makes sense or not financially, just to sort of get, I don't know if it makes sense. I don't know if I'm getting too aggressively with getting back to debt-free or not. I love the idea of being debt-free. I love the idea of a paid-off home residence. I do like that.

I just want to make sure that... I kind of wanted to see all sides of it. What's the reasoning behind it? Does it work for the kids? You've got them 50% of the time. If they were to come to this townhouse, would it be an environment that you feel like this is the right environment for them

as opposed to like a small apartment where it's like this is single dad. Now he's got this apartment and the kids feel weird. So I just kind of wanted to hear the other side of it. George, what are your thoughts? Because that doesn't bother me. There's nothing wrong with downsizing. I think doing it for the right reasons

and it will help you become debt-free, allow you to invest and put away money for college, not having to worry about that mortgage. You just refied. So you paid the closing costs. So it hurts a little bit because you're kind of paying the tax on that of going, I just paid all these closing costs. Now I got to do this whole process again. Realtor fees, pay more realtor fees with the buying of the new place. So that's the only pain of this.

And moving all three kids, and it's a big change for them, like you mentioned. Yeah, I do kind of wonder about that. How come in the process did you guys not just decide, hey, we're going to sell, you know, as part of the divorce, we're going to get rid of the house and then go through it from there? What kind of made you go back, you know?

I don't know. It was just my consideration for the kids. Keep the environment stable. There was already so much change. I was trying to create a predictable, stable, and supportive environment for them. Like, that's what I'm trying to create. And to your point, Jade, I don't want to move into a small little place where the kids come and it's kind of weird because they've got a single bed now.

That's my little place. No, I like your idea. For that perspective. I'll be honest with you. I'm not mad at your townhome idea. I like that you're going from ownership to ownership. You know, if you were like, I'm just going to take this money on and get an apartment, because I think that we know that homeownership is such a big part in wealth building.

So I do like that you're going from ownership to ownership, which is good. I like the fact that you want to be debt free and you don't want to take those steps backwards. I think this is one of those things where you're just going to have to take a long look in the mirror and ask yourself, what's the best move? The house right now, you and George went through the math. It sounds like you can afford it. So it's not, none of these are a bad choice. It's just- Yeah, there's more numbers here that I feel like we need to dig into because the mortgage is 24%, but you can't invest the 15%. So where's all the other money going?

Is there pieces of child support or alimony here? Yeah, there's child support, and if I can give you the number, but that's 750, and then also contribute to an HSA that we jointly use to share the medical expenses for the children. Got it. Okay. So I would dig into the budget first and see, can we make this work? But if you're unable to invest 15% with these current numbers and it's not going to change in the foreseeable future, I would plan on downsizing the next six months to a year in order to create that margin. I think you'll feel the peace. The kids will adjust.

But their picture of their world is already shattered. And the home is just a piece of that. And so kids are resilient. They will adapt. And you guys being there, you sound like they have great parents, which is a huge piece of this equation. Oh, yeah. Yeah, we're pulling for you again.

Look at those numbers. Look at your budget. Is there any way that you can make this work? If not, there's nothing wrong with downsizing and getting to a better financial footing so that you can accomplish the things that you want to do and that you need to do both for yourself and for your family. All right, stick it out, Joe. This is The Ramsey Show. Hey, what's up, guys? This is The Ramsey Show. I'm your host jade warshaw joined by george camel to my right just your everyday george camel nothing nothing special nothing special there

we go that's more like it that's a little bit of a long-running joke george doesn't like it when i hype him up well and people think me and dr john deloney have some massive beef because you know john's awkward and weird and he'll make cut you off, you know. So we like to joke that John hates me, but really he loves it. He loves me deeply. We actually are all friends. That's what's fun about this job. That is actually like the people I work with. So which is a good reminder. We're hiring. So you can check out all the open jobs at RamseySolutions.com slash careers and hang out with with Jade and I. True dat, true dat. Say hi to us in the hallways. Yes, say hi in the hallways. And speaking of things going on here at Ramsey Solutions, we all have people who are tuning into every single episode of the Ramsey Show. I was one of those people. And they know

all the stuff that we teach about money and somehow they still feel stressed and stuck. So what can we do? Why? Because knowing what we do with our money isn't just the problem. It's actually doing it, right? You can listen to the stuff all day long, but until you actually do it, you'll feel no movement. We know that personal finance is 80% behavior. It's only 20% head knowledge. Think about that for a moment. And the proven way to change your behavior with money is by taking the Financial Peace University class. Y'all, I can go on all day about FPU. I love it. This class is the difference between trying to get in shape on your own versus hiring a personal trainer. I love that. You'll have a coordinator holding you accountable and other people in the class pushing you and cheering you on. That's

why this class has worked for millions. And I'm one of those people, by the way, Financial Peace University, those principles rock my world. And after nine weeks, you will never handle your money the same way again. Yes, facts. You will make progress faster than ever. You'll make progress instead of excuses. Don't just listen to the show. Commit to doing what it takes to win. Join a Financial Peace University class at Ramsey Solutions today. That's ramseysolutions.com excuses don't just listen to the show commit to doing what it takes to win join a financial peace university class at ramsey solutions today that's ramsey solutions.com slash fpu to join and let me just say right now the personality is myself george john rachel eddie ken ken i would never leave out ken i know just want to. Actually, I almost did by accident.

We're all hosting FPU classes, Financial Peace University. We are being, we are your personal trainer. We are the one kicking your butt. I never thought of it that way. I've always wanted to be a personal trainer. Didn't think anyone would hire me. This is your chance. For your money.

You're the Hulk. When it comes to money, George is Hulk status. And you need that, you need that kick in the pants and once you sign up it gives you the the the oomph you need to push and go forward um james clear have you read the book atomic habits oh yeah james clear talks about the difference between motion and action and i love that and a lot of times we're doing a bunch of motion surrounding our money but we're not doing the actions so now's your chance to put in the action work to actually do something about it, right? And we're getting our behavior right so we can actually change things. And I always say,

if behavior, if action is the car, behavior is driving. Oh, I like that. You know, I love a car analogy. Yeah, put that in your pipe and smoke it. Appreciate that. Well, I'm excited. My class, it's too late to join Jade's class because you're in the middle of it. You're thinking of it almost done. My class starts June 20th.

So if you want to join me virtually, you can do that at fpu.com. But honestly, whatever you can do with your schedule, go join any class across the country. We have amazing coordinators who are leading classes all over right there in your neighborhood. And it is so worth it to do, to commit to this for a few weeks to change your life.

But let it be known, if I could join any class, it would be George Campbell's class. And with that, we're going to Caitlin in Charlotte, North Carolina. What's going on, Caitlin? Hi, guys. Hey, how are you? Good. So a year and a half ago, my husband and I bought a home and it was a complete fixer-upper. It took us about seven months to renovate it. In the meantime, we lived with my

parents and we had two kids at the time and in the middle of it, I had another baby and it was crazy, but we ended up going about $45,000 over our original budget, which was kind of not a fault because once we got into things, we realized, oh, wow, this needs to be done. This needs to be done. And it just added up really quickly. So here we are a year later and we are still about $40,000, $45,000 in debt from this house. And we're kind of like, we don't even know, like month to month is just really hard. So we're trying to figure out where do we even begin? Like we do have a van. So do we sell it? Do we, like, what do we do have a van so do we sell it do we like what do we do possibly before we get

into this because you you clicked if i had an invisible button if i had an invisible button caitlin you you accidentally pushed it because whenever people say somehow we ended up in debt and they kind of make it seem like they they had no in it. It just kidnapped them in the night and, you know, did that. And I want you to know, you know, like, let's be real about that for a minute. Like, hey, we just were like, let's go on and do it. If we need to do this now, let's go on and pay the money. We'll go ahead and go in debt to do it. So it's such a big part of going forward with what George is going to explain to you next.

The first part of that is going, hey, like, this didn't happen to me. I made some choices. I don't like those choices. Oh, yes. And we know. Yeah. Definitely. And that's what we're trying to fix. Good. Good. Let it be a lesson to everyone listening who thinks I'm going to be the next Chip and Joe and buy the next fixer-upper and it's all going to go perfectly and under budget and they're going to put us on the TV. This is reality. Yeah. Yeah. This is reality. So let's walk through these numbers a little bit. What's the income looking like right now? We make about $65,000 to $70,000 a year. Okay. Is that with both of you working outside the home?

Yeah. So my husband is in the ministry and I am like a self-taught photographer. Cool. Okay. So how much? I primarily stay home with my kids. Okay. How's that income spread out? You versus him? So he makes 50 and I I'm just trying to like bust it and make as much as I can. Great. All right. And what kind of debt is this? Did you put it on a personal loan, a credit card? Okay. So you probably don't like this either. We ended up using our paid off vehicle as collateral and got a loan from that. So that loan is currently $19,000. Then we have the rest of it on credit card. Okay. So do you have any money set aside anywhere else? Like, do you have savings anywhere that we should know about? Any liquid cash? Nope. So we're kind of

starting from like baby step one because we've just kind of been trying to survive month to month. Got it. Okay. Well, that's the... You have the van at least. What's the van worth? We could sell it for about $17,500 or so. So we would still owe about $2,000 so we could pay that off. But that's kind of what my question is. Where do we even start? Do we keep it until we have the cash to pay for another one? You can do that. The other option, which I like you saving up cash as the first option.

The other option is you go to your local credit union and you get the differences alone, plus a little bit to get you a beater car and you can do it that way. Okay. How quick could you get 2,000 plus a little bit more to buy a beater? Oh, I did not. Sorry. I meant to say also we have another vehicle too. That's part of the debt. So do you not need the van at all? Could you get by with one car? Well, that's what we were going to try to do. So we owe $10,000 on the other car, which is a very reliable vehicle. So our original plan, I guess, was sell the van, keep the car, try to just pay the car off through the debt snowball and just use the one vehicle for now. Okay. I'm not mad at that. That works. That works.

Yeah. I'm prone to saving up the difference as opposed to getting a loan because I feel like you could do it fairly quickly and then that's just going to be clean like that. And it gives you some skin in the game because right now we need some behavior change more than we need a mathematical equation. And so there needs to be some we really don't yeah that's that's where we're at now so that's we're just kind of over it and we'd like to you know survive month to month and we just feel like we're not but my other question was should i should i try to get another job should i keep doing what i'm doing are you able to do that with the kid situation? They're four, two, and one. So it's kind of hard, but I mean. Look, if you're able and willing to do whatever it takes to increase your income,

it's only going to help you at this point. And this is not a forever situation, right? We're just doing this. We're kicking it. We're busting it. We're doing whatever we have to do to get out of this debt. You're selling the vehicle. The rest is rolling into the debt snowball. And if you can make more money to help that go faster, more power to you, all right? Very good. That does it for this hour of the show. Be sure to join us next time.

And remember, when it comes to changing your life and your money, you can tell me that you won't do it, but please don't tell me that you can't because I already know with God, all things are possible. This is The Ramsey Show. Hey, George Camel here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for the newsletter.

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