I sold my house and my wife and I are out of debt from the equity. It’s not a forever home and using that equity to get out of debt was a wise decision. A house is just a house and we can get another one, but the right way this time. If you can get out of debt quickly from your house and it’s not your forever home, do it. Best decision we’ve ever made.
Sounds great…. But My house provides me a side income of hobby dog breeding. I have two dogs and if I sell, I have a pet deposit and pet rent to pay, loose my side hustle that makes 30k to 60k a year…. But…. during 2021-2023 I was ill and had substantial medical expenses and too sick to breed… fell behind on EVERYTHING!! I couldn’t work, 2 surgeries, anemia… the works! Now I’m feeling better and I am able to breed in the next months… turns out my job was killing me (hospice nurse) changed job, my income has decreased a bit but it’s a good balance with my hobby breeding which brings me good health and joy. I have a lot to catch up on $130,000 If I sell my house. I could pay the 31k student loan, maybe retire my dog breeding business and rehome one of my dogs… the other is 10yo and I don’t think she will be around long. This would make me debt free and I will have an apartment that cost a mortgage MINUS all the overhead of house maintenance… right now I up in getting a new roof, windows are airy, utilities are going up, the foundation needs repair 2k not too bad. It was my dream home 10yrs ago. I was hoping to pay for it and work less (not retire) hobby breed and travel and just deal with the maintenance. Then put it in my will and trust for family inheritance. I’m torn, my dream is dept freedom and peace. If I sell, pay off my student loans, I will be debt free. I can sacrifice having an apartment with annoying neighbors. Pay 2k for rent and at my income of 80k with out my exhausting side hustle that I LOVE ❤️ Relax and save/ invest 50k a year. travel a bit and feel retired. Leave that money as an inheritance. I’m not sure I will purchase another house if it’s not paid in full. No equity for me. Maybe dividends. Idk what to do
My wife and I decided to sell our house last year, we had bought it new in 2013 and it was a lot of house for us. The property taxes kept going up every year until our mortgage payment had increased an extra $500 per month from the original payment. We were already in debt $50K with cars and credit cards. Selling the house we cashed out and paid off everything, sold one car and got a $2,500 cash car. We are living life in a nice rent house for now that costs the same as our house payment, but we have no debt besides the $20K suv payment. We also have a 3 year old. Saving up a nice down payment to get a smarter house down the road.
I plan to do this I'm in the hole about 20k some big bill always comes up so I can never make much headway. It's usually my car or house repairs. I had my fridge go out my screen door need repair and had another emgercy expense all in the same weekend. It's a never ending cycle Dave always assumes those surprise bills never happen or that a cheP care will do the trick but a cheap car which I have alway requires maintenance. Plus food and all is constantly going up. 🙃 I wish his advice was a little more realistic.
Best call I've heard in a year it made me cry it made me laugh you are not just entertaining you are helpful funny and mean but most of all you are a Blessing God bless you Dave
Man alive! Most likely I'll never meet you Dave, but I love you man. Thank you for everything you do! You've saved me, my marriage and my family tree more than you could ever know!
Praise God! She started the call border line crying, to the end of the call giving a mini laugh. God is good. The enemy of our soull tries to wear us down to get our focus off of Jesus. Keep pressing!
Moved out of the house I've lived in for 15 years and into a rented apartment 2 weeks ago. Debts paid, got a little left, scared shitless about not being a homeowner anymore. But also feeling somewhat peaceful. Lol I'm a mess right now, any words of positivity will help :')
Peace is priceless. 8 years ago I left my country and everything to follow my husband here. He is a U.S. citizen but we chose to live in my country but after a year we realized we will be better moving here, being with my family was a very toxic situation. I don't regret the decision we made. I have 2 kids,1 dog, and a great husband, we have a beautiful family (something that I never had) I left the financial security that I had in my country, my degree an estable job and we started from zero, we used to sleep in air mattresses and my first furniture were stuff that we picked up from the curb. It was hard but now we have 2 houses. My husband has a 6 figure salary I have a small business and better of all we don't have to argue or have any drama with anybody. Focus finding your peace, financial, emotional and in whatever area in your life you want to be happy.
You should actually feel there's a huge weight lifted off your shoulders. At least while you're renting you don't have to worry about an appliance breaking down. Good for you!
You can always go back and buy another house. Like Dave says, there's one for sale on every corner. It may take some time. I hope that you are doing better now.
I have $8000 left on my car payment from $19000. I was gonna go to trip to Ethiopia but I cancelled it now I’m down to $4. Planning to pay it off soon then I got students loans of $10000. Got work on that too
That’s what we did. Sold our home Paid off all debt and put away 30k for our next down payment for a home. Waiting for this housing market crash to get a good deal.
The problem with this plan is that when the housing market crashes next the interest rates for homes will likely be way up. This has been historically true. Your plan works if you can pay for your next house with cash, but not if you're financing a lot of money.
It's not likely that you'll see another market crash of the magnitude of the last one. Keep that in mind and save money so you can buy cash or have a big down payment. You might also be better off buying a distressed house for a good deal that you can restore
Good luck, the 2008 crash is unlikely to to happen again for decades of the same scale. Well look back and say we should of stayed can't get into anything under 300k that is our forever home
It was wonderful to listen to this. So many callers don't want to really listen to what Dave is saying. This lady was, and I wish her all the best success in the world as she and her family walk this path.
Paying for her to go through FPU was really nice and a phenomenal investment. She is so ready to crush this debt and Dave is going to make so much money when her story sells more copies of his books and sign ups to FPU. Im just now realizing how brilliant it is that Dave’s customer base is future rich people.
I live right outside NYC .. Each check FED, STATE, Local tax, Mandatory FEES .. etc..50% gone.. Then from NET..... property tax, school tax, county tax, water and sewer city tax and Its no surprise there is a mass exodus of the working class out of NY..
Aside from selling expensive cars or ones you do need, why wouldn’t they just cash-out refinance and pay off all the high interest debt with a low rate mortgage loan and just work on paying that mortgage off again?
I guess I had a few other questions like, what other vehicle do they have? Are they in an area they have to have a vehicle? How is a family of 5 that are older children, going to get anywhere together in a smaller vehicle? What kind of gas mileage does the over vehicle get? If they are losing money on the van but still needing another vehicle they might end up getting a less reliable vehicle and still have close to the same monthly cost with repairs.
This guy is amazing!!!!! I wish I could find someone like this man in Portugal to help me and guide me! In any case I am still learning a lot! Thank you Dave!!!!
This is the best ever. It popped up on RU-vid . This made me tear up a little. Dave shows legitimate concern, By the question and responses. But the best thing help me , it tought me to lesson. People will talk with me like they are trying to help me , they were really helping themselves. They see my desperation and use it. 🤔 Never to old to learn. NEVER!!!
I don’t always agree with Dave but, I’m not a financial advisor either. I am sooo glad that I hear about him at a critical point in my life. I’d just discovered I needed to part with family and that my car had a leaky head gasket, while I still had a year left of payments. EVERYONE wants me to buy a new car. Doesn’t matter if it’s used, but they think I should replace this car for being left on the side of the road. Everyone includes coworkers, my mechanic and my narcissistic mother, who wants me to be able to drive her since I’m the only one in my family who drives. NO ONE either cares or is attuned to the fact that I’d be making car payments on a depreciating item. NO ONE. It’s all about what I can pull up in and what they can slip their behind into. No one cares about me having an emergency fund - even if they knew WTH it was. No cares about me ever retiring. No one is knowledgeable about or interested in that, even if it were fully explained to them. I am so grateful that I paid off the car a few weeks ago and am still driving it. My commute is short and isn’t along major highways so, I am not actually that worried. Sure, the car could die tomorrow, but I still feel best knowing I didn’t roll my car loan into another. If I look poor and even stupid to everyone - GREAT!!! The STUPID thing? If these people were in my shoes and they were told they were getting a raise if over $300/mo - they’d leap on it, even if it was on 🔥!
Assuming she can get 10k in tax refund this year... She can sell the van, put 5k of the 10k in paying the negative equity of the van. Then she can use the remainder 5k to purchase a used suv or mini van. You can find some decent ones in that price range. Doing this will cut her debts to 40k. Then they can use the money they were spending on car payments and put it towards the remaining debt. Also put the extra $1000 of income each month towards this debt by adjusting her withholdings. They can be debt free in about 3 years.
100,000/12 = 8333. So is Ramsey saying they should owe 0 tax, pay 0 for health benefits? Some companies charge an arm and a leg for health insurance particularly if you choose to insure a spouse whom they believe should have a job with their own benefits. And seriously ... Someone said something in church, she read Ramsey's book and this poor lady thought it was God's wish for her to leave her home of 8 years and start renting? I think it's great that her family is on the road to becoming debt free, but you need to preach with a little compassion. It is not a sin to be poor or to not be educated in sound financial planning.
And of you stop the retirement investing, you should also stop tithing. God helps those who help themselves, right? They shouldn't sell the house or the car. Just pay them off.
I heard someone sum up majoring in economics as, “The course where you learn exactly how to financially fix the world. How it’s a step by step process. How it can be done. Then discovering the tragedy that nobody is doing it due to lack of know-how, greed, no organization, and yes, good old fashioned laziness.” Not saying the latter is the case for her, just the first and third one most like.
This is another example of a person overly stressed over finances and life when it's really just them putting themselves in a hole with car debt. We can get their living expenses down to $3500/month in no time!
Get a job or a second job and pay the smaller debts off. Uber eats, Uber, waitressing something to bring money in the house and no tithing for the moment until your debt is paid off.
Change your W4 to raise your withholding. Sell that expensive car, get on a budget.... I will continue with the 401k, because that would lower your taxes. I maxed it out and that lowered my taxes so much this year. me.
@@ygbodybuilder3023 No I think what they meant is that she is withholding little and getting more return at the year end while filing taxes. It makes sense to increase withholding to the point where it covers the taxes and rest goes to max out the 401k to get best tax benefits.
I understand the need to Tithe. But, if you are a family struggling to make ends meet and totally in debt, why are they Tithing? This woman's voice was cracking describing her situation, but she's giving money she doesn't have to there right now. Don't get it.
Yet I don't understand the need to tithe. It's so odd to me that losing 10% of your income is no big deal, as though it's a necessity above food and shelter...
Peter Geras losing 10% would not cause them to lose food or their house, Christians see that 10% as belonging to God so they don’t have any right to spend it any other way
Other than the obvious of helping others and supporting people who are helping you, it's an expression of trust, and gratitude. I'm recognizing that ultimately what I have comes from God, who has more than amply supplied for all my needs.
In my mind the biggest issue with debt especially when it’s not consolidated is that it decreases monthly cash flow. Since she has a great deal of equity, I would have done a cash out refinance by taking out a new mortgage for 158,000 which would consume her active mortgage and leave her with 64k in cash to pay off the 64k of debt she had outstanding. This way she keeps her home, keeps her vehicles and increases her cash flow per month by having no debt outside of the mortgage which will enable her to pay off the new mortgage faster
Don't sell the house since you are 2/3 the way in getting the mortgage loan paid off, if the teenage kids can work during the summer break, that money can be used to pay off debt too. Yes sell the van and clear up its debt too.
@@aaronbarton9385 If they are old enough to help provide for the household they leave live in then they should contribute. Using all their money would be wrong but making them contribute a percent of their earning will help instill responsibility in them. It will also begin to teach them that life isn't free and it requires hard work to get things they want.
Or just have them work for their spending money and cell phone bill. Jobs I had before turning 16...cut grass, snow shoveling, caddy, sold snow cones, sold papers, odd jobs around the neighborhood, really anything that I could do to earn a couple of dollars. There was no such thing as an allowance for me and most of my friends. We all had little enterprises together and apart to make a couple of bucks. Nothing wrong with earning and learning a little about money. Heck, I caddied all the way through college. A great and healthy way to make a few dollars, and also some contacts for later.
Kept thinking the same thing, she has four kids plus them to get to work and school, they need that "stupid minivan" just need to pay off debt not sell everything
if she sells the van lets say she has to get a loan for the difference plus another cheaper minivan she could still cut that debt in half a least I don't see how you think that is stupid to eliminate at least 10k worth of debt worst case scenario
I can’t imagine god would want you giving 10% of your income to an organization (church) while you are struggling with debt. Follow the baby Steps in the right order. Disappointed that Dave missed this. Step 7 is give generously. She’s on step 2
Ok yeah I bought a 17k new Toyota Corolla. Reason is my luck on cars cost me more breaking down monthly than my payment and insurance. I get excellent mpg. But I would not buy brand new van or truck. If I could get away with paying cash cheap car I would... but that's not my luck.
semperfi 1918 this is us! Buying “cheap” cash cars, we went through 5 and within 6 months all of them broke down, either engine or transmission issues (and we took our mechanic friend to see the vehicles before buying) and it cost us the price of what a new car cost us. We also have a used from a dealership. But the vehicles from the dealership - no issues at all in 5 years - all the cash cars did was cost us more money and more stress - so I think it depends. My hubby isn’t mechanical so he can’t work on them so anything that goes wrong costs more money - and it was never small things. Spent as little as 2500 and as much as 10,000 cash for used private sales and they ALL crapped out really fast. Bought a new car for 24,000 and a dealership sold used SUV for 18,000 and no issues with either of them and have had them for years. We did pay payments on them but it was 0% and didn’t restrict/stretch our budget/finances at all, so overall it’s been a better deal. We just have terrible luck with private sale vehicles 🤦🏻♀️🤷🏻♀️
I'm definitely selling my house in another year or 2 . I not emotionally invested in it. Maybe I could be if it were in the mounting but I've never been attached to anywhere I live. I just ask for a clean comfortable place. I just figured owning was better than renting in the long run.
Unless it’s a crazy expensive home like double or triple the value of the homes in the market I say sell it but if it’s a average home no don’t sell cause your rent payment will be same or higher than ur house payment
I don't understand how selling the minivan is going to help when they've got 4 kids. To have only one vehicle with four kids? I don't know how that going to work?
My situation is similar but with a different outcome. We have $35k in debt and plan to sell our home (we are not emotionally tied to the home). If we move we will have enough to pay off all debt and put down a little over 20% on the next home. As anyone considered of chosen this option?
yes,,,im close now...have 28 k in debt now ,was 0 for 2 months..but i did stupid..my fault..but im single no attachments to home..i can make about 64k after the sell net! pay the 28 k off and still put 35k ish in bank,,and keep building on it for 2 years and rent for those 2...should put me around 50k to put down on a home ,and by that time houses may be down more...i think this works perfect for me..im still thinking on it..
I am doing something similar but I invest in real estate and have 10 houses. Since the market will peak in the next few years trying to sell enough of them to pay off all my debts except the mortgage on my primary and be able to put some good money in the bank.
I don’t see how Dave gets his income numbers from. I make 100K also and only take home $5100/month. Yes there’s mandatory retirement taken out and mandatory health insurance. But those aren’t close to the amount he thinks people get after tax
Why wouldn't a cash out refinance on her home be a BETTER option for her? Still sell the van, keep her home, take the cash out refinance for about $40K-ish (debt she had minus the van) and BAM she could be debt free except for her house in 6 months max. Then she can snowball her mortgage if she wanted to with her income. Thoughts???
Stop the tithing!!! Follow the New Testament. Not the old law. Find one verse in the New Testament that tels you to give a tenth of your income to the church. You won’t find it.
I’m 17 with 10k in the bank, and a $2500 car ( which is doing me very good). I can’t even bring myself to go to a restaurant with my friends and treat myself to a nice meal once in a while and it drives me crazy! But that’s not the point, so I’ve been saving up for a nice 2017-2018 WRX which is around $22k - $35k (insurance would be very high). But I am not sure if I should spend my last penny on a car even though it could last me a lifetime, or continue to save my money and buy a cheaper car like a newer Honda Civic for around $6-8k. If all goes well I should be able to buy the WRX once I turn 18 which is a 11 months from now. Please give me some advice. Would you save your money? Invest? Start a business? Buy the WRX? Buy the civic? Help me out please!!! Thank you for reading :)
Do yourself a favor and don’t splurge on a car at age 18. I know it feels like it’ll make everything alright if you have an awesome car, and it does for a month or two and then it doesn’t feel any different. If you look back from age 30 on the decision I think you’ll be happy you chose the 6-8k honda. You could invest that 22-35k in a multi family property that pays you every month for the rest of your life.
Vehicles are about the worst investment you can make, and sports cars are even worse still. Crunch the numbers yourself. Include depreciation, opportunity cost of the money not being invested in the market, taxes, insurance, inspections, fuel, parking, maintenance...
You don't sell your house to pay off the cars you can't afford. I'm glad Dave was able to steer her in the right direction. Think of it this way... their total debt is $150K. House and all. Making $100K a year they will be totally debt free before they know it.
300k house in ft worth? You're living in a freaking mansion! 4 kids, 25k left on a minivan, and tithing? To me, this call is the one where they have made all the questionable life choices.
Stop giving money to the church! Hello! That’s probably a couple hundred a month. If it’s 10% of $5,000, I think I’d be sick, so I’ll assume less. Combine the money you throw away to the church and what you gain from shutting down 401k, downgrade your cable and phone package a level and your done. Debt gone in a very reasonable amount of time.
Er, wait a sec...She sells the van that transports her family of 6? And is left with no transport plus a $5,000 personal loan? Then what? No carpools? No family trips to park, church, out of town relatives' homes? I hate big auto loans and avoid 'em. But maybe some weekend babysitting - teen also can sit. Dog walk. Do calligraphy wedding invites. Cater baby and bridal showers. Tutor. Referee kids' sports. And...deliver pizza! Mom, Dad and teen each take one weekend nite: Fri. Sat. or Sunday. All work Super Bowl, Final Four, etc. Parents can squeeze 6 hours of work into a weekend. So could oldest teen - who has a vested interest in a car she'll get to drive. That's $800 or more per weekend. Keep the van and keep the house.
Make the kids earn their spending money if they are 14 or older. Here are some of the things I did before turning 16 and getting my first job....cut grass, caddy, shovel snow, sold papers, sold snow cones, odd jobs around the neighborhood, really anything that came my way. I caddied until I was 22 on the weekends and when I could during the summer, I even baby sat a neighbor kid (not a lot of those baby sitting gigs for teen boys). Nothing wrong with the kids earning and learning about money.
If everyone just stopped buy new cars maybe auto manufacturers will get the picture. Cars ar ridiculous. Marked up more than they are worth then you are stuck with it because a year later you are 10 to 12k upside down.
