Stop Borrowing, Start Building Wealth

**Rachel Cruze** (0:17)
I'm Rachel Cruze, and I'm here to help you transform your life. From the Ramsey Network and the FAIRWINDS Credit Union Studio, this is The Ramsey Show. I'm Rachel Cruze, hosting this hour with Jade Warshaw. So give us a call at 888-825-5225, and we'll answer your questions about your life and your money.
All right, first up, we have Justin in Knoxville, Tennessee. Hi, Justin, welcome to the show.

**SPEAKER_2** (0:45)
Hi, how are you?

**Rachel Cruze** (0:46)
Hi, we're doing great. How can we help?

**SPEAKER_2** (0:50)
So I'm just trying to figure out, we've got a little over $100,000 in debt. We get married in a little over a month.
And we are aiming to be as close to debt free as possible. Obviously not with the house, but try and get everything else paid off to where we can have, you know, more freedom to do the things that we want to do.

**Jade Warshaw** (1:15)
So how much of the $100,000 is the house? And how much of it is like consumer debt?

**SPEAKER_2** (1:21)
Now, the house is another $205,000. A little over $100,000 is our cars and credit cards.

**Jade Warshaw** (1:28)
Oh, okay. Okay, so break it out for us. Tell us about the cars. Tell us about the credit cards.

**SPEAKER_2** (1:37)
So we've got, in her car, we have about $54,000.
In my truck, we've got about $49,700. Oh, boy.

**Rachel Cruze** (1:49)
Gosh, that's a lot of debt on cars.

**Jade Warshaw** (1:51)
I hope you guys make a ton.

**SPEAKER_4** (1:52)
Yeah, what do y'all make, Justin?

**Rachel Cruze** (1:53)
How will your household income be combined and everything in a month?

**SPEAKER_2** (1:57)
Combined a month would be around $13,000.

**Jade Warshaw** (2:02)
All right.

**SPEAKER_2** (2:03)
And that's after tax.

**Rachel Cruze** (2:05)
After tax.

**Jade Warshaw** (2:06)
Okay. And then the credit cards are just another what, like five?

**SPEAKER_2** (2:12)
Yeah, we've got $2,800 on one, $2,500 on another, and then $600 on one and $700 on another.

**Jade Warshaw** (2:20)
Okay.

**SPEAKER_2** (2:21)
So a little over $6,000 and split between four cards.

**Jade Warshaw** (2:26)
So I thought I heard you say, and maybe I misunderstood, I thought I heard you say, I'd love to have as much of this paid off before the wedding as possible. Did I hear that correctly?

**SPEAKER_2** (2:35)
Not before, but we're going to start on it now, whatever plan we have and just getting it done as quickly as possible is what we'd like.

**Jade Warshaw** (2:44)
Well, I asked that because I'm looking at these cars and I'm thinking, oh my gosh, what an easy offload of almost $100,000 of debt.

**Rachel Cruze** (2:53)
Yeah, and bring home $130,000, $160,000. So yeah, the car is just in the need to go.

**SPEAKER_2** (3:03)
Yeah, and so what we've kind of planned out in our head is the snowball on the credit cards and then double and triple on one car until it's paid off and then moving it all over to the other car.

**Jade Warshaw** (3:20)
I mean, here's the problem with that. So what Rachel said earlier is she was hinting at a rule of them that we have here, which is things that are going down in value, things with wheels and motors should really be no more than half of your annual income gross, right? So if you're around $130,000, is that right?

**SPEAKER_2** (3:43)
Together, we're a little over that. So you're telling me- She makes $105,000 a year. I make $56,000.
Okay, so- We're around $160,000 close to it.

**Jade Warshaw** (3:57)
$160,000, okay, still, that is way more than what I would say because half that puts you at $80,000 in cars and you're at $100,000 in cars.

**SPEAKER_2** (4:08)
Yeah.

**Jade Warshaw** (4:08)
Over $100,000.

**Rachel Cruze** (4:10)
How much could you sell them for?

**SPEAKER_2** (4:14)
Hers, probably $50,000, mine, probably $38,000.

**Rachel Cruze** (4:20)
Okay, so you're underwater on both of them.

**Jade Warshaw** (4:22)
Do you have any money saved?

**SPEAKER_2** (4:24)
Yeah, we've got close to probably $60,000 in savings.

**Jade Warshaw** (4:29)
I love that. Is that for the wedding?

**SPEAKER_2** (4:33)
That's just kind of for everything. So the house is a new thing. We just got our house put on some family property and we've spent probably $30,000 in what we had. So we had close to $90,000 before we started on the house and we're in the mid $50,000 now or close to $60,000.

**Jade Warshaw** (4:57)
So here's what I'm hearing. What I'm hearing is, and I love that you're calling now that you guys are starting a marriage fresh because you really need organization.