The Ramsey Show
Your Financial Mistakes Shouldn’t Define You
Fri, 09 May
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📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 📱 Watch the full episode for free in the Ramsey Network app. George Kamel and Ken Coleman answer your questions and discuss: "Should we sell or keep a house we regret buying?" "How do I convince my husband to use our savings to pay off debt?" "I bought a house with my ex-fiancé and now the house is going into foreclosure." "How do I plan for future debt?" "Should I focus on paying off the negative equity on my truck?" "Do I need to get a credit card to build my credit?" "My nephew is refusing to take care of his parents and the burden is now falling on us. How do we get him to start contributing?" Next Steps: ✅ Help us make the show better by taking this short survey! 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or send us an email. 💰Hurry—Your chance to win $5k is almost over! Enter the Ramsey Cash Giveaway today! 💵 Start your free budget today. Download the EveryDollar app! 🎟️ Dave Ramsey and John Delony are going on tour this month! Get tickets today Connect with our Sponsors: 🛒 Stop paying more and start shopping smarter at Aldi 🌱 Get 10% off your first month of BetterHelp 📱Go to Boost Mobile to switch today! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY ⛨ Find top Health Insurance Plans at Health Trust Financial 💸 To find out more about student loan refinancing, check out Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Explore more from Ramsey Network: 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Should we sell or keep a house we regret buying?
But the big like question that I have is after we closed and started doing some renovations and projects on the house, we found out. that the vacant land behind our house is there is a developer attempting to get it rezoned to put 1,100 apartments on. So right now we're in a very, like, spread out. It's all, I know, it's all, like, acre lots.
Everybody is spread out, and then they're going to plop about 50 or 60 acres behind us, and they're going to put 1,100 apartments. Yeah. We are kind of on the fence. So we bought the house last fall for $360,000. We've already put about $40,000 into it. It appraised for $380,000. We could maybe sell it for anywhere right now between $380,000 to $400,000.
Do we go ahead and take advantage of that development not being there yet and sell it and potentially have a loss? I don't think we'd have to bring money to closing.
Well, how long ago did you buy it?
October.
Yeah, so you're going to have a capital gains hit on that if there's any actual gains, and that's up for debate, correct?
Yeah, right.
I'd get out of there.
Because the market isn't as good as it was in October.
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Chapter 2: How do I convince my husband to use our savings to pay off debt?
I mean, like 10 other houses are in the exact same predicament as me and that we share a property line.
Have you talked to all 10 of those people to say, hey, and how do they feel about it?
They hate it. They said they have hired attorneys. And there's two major subdivisions that are going to be impacted quite a bit. So there's probably 50 to 100 houses in those subdivisions. But everybody is opposed to it. I've gone to our county meetings to help for the rezoning stuff, and there's always a line of people to say against it. Okay.
I see the two things here. Number one, you have a right to be upset and want to get out of this. And the second part is I don't think it's as bad as you think it's – I don't think this is like end of the world. The housing market is going to crash in your neighborhood. No one is going to buy. The prices are going to jump down. I think everything is going to be fine in the end.
This is a part of living in America. Yeah, this happens all the time. It's happening in my neighborhood. I don't think it's end of the world. I don't think she said end of the world. But I don't think it's going to like tank her housing value.
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Chapter 3: What should I do if my house is going into foreclosure?
I don't think she's worried about – are you worried about the housing value or are you worried about the type of people that are going to be living in your backyard? Yeah.
Both, because I do think like I think we paid more than we should have because we didn't know a lot of the stuff that was wrong that needed to be addressed. So we spent more money on the house than we had originally anticipated, which is normal. But then we're thinking like if we do decide to go to sell it in five years.
we're going to maybe be able to sell what we paid for, which isn't what you buy property for.
You know, like that's supposed to be... And that's the part I don't know that we know the future of what the zip code values will be. The apartments very well could bring, you know, better economic times to your area. We just don't know the future.
And so that's the part... But I also don't want, like, I don't want riffraff going in and out of my yard because right now the biggest thing I've got to deal with is raccoons, not... Sure.
And again, I don't know how close it's going to be. I don't know what the boundary lines are going to be like. And so there's just a lot of question marks. And right now it feels like it's all emotion. I would just want more facts because this is the biggest financial decision of your life and selling it will be the second biggest financial decision of your life.
So I also don't want you to just impulsively jump out either. So I would, uh, I would work with an agent and get some more facts on what's going on and what the timelines are. But are you guys in a good financial spot? Do you guys have any debt?
No, no debt.
Do you have a mortgage on the, on the house?
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Chapter 4: How do I plan for future debt?
Okay. So far, let me tell you what I'm hearing. We paid off higher balances first. Okay, that's not the debt snowball, not the Ramsey plan.
No, we didn't pay off higher balances. They all had high balances, but we did start with the lowest one.
Okay, I'm just trying to get it straight. Were you guys aligned in the first place on, hey, we're doing this Ramsey plan, it's weird, it's a little bit scary, we're going to have $1,000 and we're going to tackle this debt? Because it sounds like at some point someone got a little comfortable, well, I got a bonus, it might be nice to just stash that away instead of throwing it at the debt, right?
Yeah, I definitely think that's what happened. We kind of started with our $2,000 and $3,000 credit card balances and worked our way up. We do each still have two credit cards to pay off, And when my husband switched his jobs and we kind of had a little bit of extra income, it was the first time since we started working the Ramsey plan that we had.
I guess I guess we made the choice to save that money versus put more of it towards the debt. But it was the first time that we could pay.
uh more than just the minimum payment on our credit cards and sock away a couple extra so you kind of got your head above water and said man it'd be nice to have a little bit in savings and i love that you said we so you acknowledged this is not him versus you this is something that we decided together so it might be time to have another conversation go hey i know we decided to do this don't make it an accusation just say but i want to get realigned on the unity of this plan i really i'm thinking we should take the savings the majority of it and throw it at the debt
And here's why. And paint that future of we're going to get going to get there faster. It's going to light a new fire under us to get out of debt, to get back to savings. Do you see this kind of picture you need to start painting for him?
I do. I absolutely do. We actually we were at the money and relationships tour on Tuesday night or Monday night in Phoenix.
Oh, wow. Two days ago.
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Chapter 5: Should I focus on paying off the negative equity on my truck?
Those ones we pay between $150 and $175 on each month.
Okay, and I could keep going down the list, but I'm only getting you started here. And, George, where I'm taking this is if I add this up, it's close to $500. Not quite, but close to it. All right, here's the point you have to make to him. Because what he's thinking is, I take $9,000 out of that $10,000, and I put it towards debt, but I don't have hardly anything in savings. And what happens if...
an emergency over $1,000 happens. This is where I'm going to bring my colleague in. Because what you got to share with him is, yes, we are spending $9,000, but we are, from a cash flow game, saving ourselves $500 a month. And George, where I'm going with that is, he's got to be able to see that most garden variety emergencies, they're going to be able to cover with the $1,000.
But if it's more than that, They can cash flow some things with a $500 a month bump. That's true. That's, to me, and I'm coming at this from, if I was in that frame of mind, which I understand, Stacey would have to, I'd have to have that to go, oh, okay. Because, yes, I'm spending a large chunk, but I'm also freeing up.
And that would allow us to weather just about any emergency from cash flowing. Is that? Yeah.
And if his if his thing, I don't know what the fear is. Is it security? I don't know how you would feel secure paying credit card companies all this money every single month, knowing that you owe them still twenty five thousand. And you guys have been at this for three years already, right?
Yeah, we have.
Have you asked him, are you exhausted? Do you want this to go another... Yes, I know he is. Because based on your math, you've got another three years to go. I know. Can I tell you, straight up, your plan sucks if it takes six years to pay off debt. But, George, what would the 9,000 do? Don't you think he would agree you guys can do better?
Yes, I absolutely agree. We absolutely can.
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Chapter 6: Do I need to get a credit card to build my credit?
Well, yeah, we were paying before. When I moved out, he was paying, and then now he decided to stop paying.
And it's already in foreclosure, or it is in the process of getting there?
It's in the process of getting there. We're four months behind. We have been trying to sell the home but have been unsuccessful with that.
unsuccessful in that no one's even looking at it or you've had showings and they're giving you feedback that you can process?
We had showings, but no real interest in the house. And it's a brand new house. Are you working with a real estate pro? Yes. And what is their logic for why nothing's moving here? Is it price too high? Yeah.
They feel like, well, it was priced too high, but because there was a new community being built in the area, that was kind of affecting us as well because they were able to bring their prices down, give lower interest rates and that sort of thing.
Have you lowered your price?
Yes, as far as we can go. We're now in the process of asking the mortgage company for a short sale to see if that's even possible. Do they know that you have the place listed and you're trying to sell it before the foreclosure goes through? Yes, they do know.
Okay. I mean, that's going to be your best bet is just trying to sell this thing ASAP, even if you have to lower the price instead of going through a short sale or, worst case, that foreclosure. But even if we lower the price, the bank has to approve us going below what we owe on the house.
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Chapter 7: What should I do if my nephew is not contributing?
Okay. And what else? Because you're bringing home probably, what, $8,000? No, probably about $6,000. Okay. I mean, well, after tax, I guess you're saying after taxes, after taxes about six. Okay. Are you doing any investing right now? Uh, yes. I mean, I invest in, you know, my 401k and stuff like that.
Yeah. We need to pause all of that. You need to act like everything is on fire and you need to work on getting out of this house mess and paying off your debt. So we're not saving, right? Do you have any savings? Uh, yeah, I have a, I have some in savings. How much?
$4,000?
And what's owed to get current on the mortgage? About $12,000. Okay, and he doesn't have anything saved? I would assume not. I can't say for sure. I would do some homework and find out where you're at in the foreclosure process and find out how much time you have to at least try to get current on payments so that you can get out of the foreclosure process and have time to then sell. Okay.
And that might mean you both put some skin in the game and go, all right, I'm going to put in three grand a month and we're going to get caught up on these payments. Which means you need to get rid of all of the expenses in your life. Anything that isn't food, utility, shelter, transportation must go right now, including investing.
Okay. Well, do you, well, I have these credit cards that have like high interest rates. Do you suggest taking a loan from the 401k? No. And paying it off? No more debt. If it has the word loan in it, if it has the word consolidation or relief or settlement, run far away. Your income is the solution here.
You. Which means you need more income. You may need to get a second job, a third job for a short amount of time. You've got to get these house payments current so that, again, to George's point, you have time to sell this house. You don't want to go through foreclosure.
Can he get a temporary roommate, a friend of his, to live in the house too and pay rent to help get above water? I don't know. Like I said, we don't have communication. I would suggest that that's what he'd do. You're going to need to start communicating.
You guys entered quite the partnership here to then just flee the coop. I get that you guys don't love each other and you don't like each other, but you need each other right now, and that really is awful. I get it, but you guys have got to... Partner up on this thing to get out of this deal. You're on the hook for $465,000. Yeah, I know. I know.
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