You Can’t Build Wealth in Financial Chaos

Dave Ramsey (0:03)

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Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the FAIRWINDS Credit Union studios, this is The Ramsey Show. I'm Dave Ramsey, George Kamel, number one best selling author. Ramsey personality is my co-host today. Katie is in Harrisburg, Pennsylvania. Hi, Katie, how are you?

Katie (0:36)

Wonderful, how are you?

Dave Ramsey (0:37)

Better than I deserve. What's up?

Katie (0:40)

Okay, I have a question. So I am working insane amounts, and I just can't seem to, enough is never enough. There's just never enough money for the end of the month.

If I can't afford my credit card payments, what do I do? Like, do I just not pay them? Like, obviously, I want to pay them because it's my debt, and I racked it up. But what do I do? Because I know you always say, pay your necessities first. Well, there's not enough money. Help.

Dave Ramsey (1:10)

Okay.

Well, I always say pay your necessities first because you should pay your necessities first. You should buy food before you pay your credit card.

Katie (1:20)

Yes.

Dave Ramsey (1:20)

You should buy lights and water and pay your rent before you pay your credit card.

If you're running out of money, let's get to the bottom of that and figure out what's going on. You're working hard. You're not scared to work. You establish that, right? So what do you make at your main job and what are you making overall?

Katie (1:39)

Okay. So my main job, I make about $3,500 a month because I get paid one time a month. And then I have a second job that I make about $600 every other week.

And that depends on how, that's a part-time job, but it depends on how many extra hours I pick up.

Dave Ramsey (1:54)

Okay. So you got $4,700 coming in. How much is your rent?

Katie (1:59)

My mortgage, it's a mortgage. And my husband makes about $420 a week.

Dave Ramsey (2:06)

Okay. So you got $4,700 plus another $1,700, right?

Correct. Okay. So now we're at $6,400, right?

Katie (2:18)

Yes.

Dave Ramsey (2:18)

Okay. And your house payment is how much?

Katie (2:21)

It's $1,069.

Dave Ramsey (2:23)

Okay. Not the problem. All right. And how much are the car payments?

Katie (2:27)

I have my vehicle is, I usually pay with my second job money. It's $300 every other week.

Dave Ramsey (2:36)

You have a $600 car payment. And what do you owe on the $600 car payment? How much money do you pay off?

Katie (2:43)

$5,800.

Dave Ramsey (2:44)

Okay. Good. And what about his car?

Katie (2:48)

It's paid for.

Dave Ramsey (2:49)

Okay. All right. And what other debt do we have?

Katie (2:55)

I have a 401 loan that is $351.

And the balance, it's about $4,600. That'll be paid off next December. I have another loan because of my consolidation loan, because that was a good idea. No, whatever. That's $671. And that will be paid off May of 29

Dave Ramsey (3:18)

$671 a month?

Katie (3:19)

A month.

Dave Ramsey (3:20)

And the balance on the consolidation loan is what?

Katie (3:24)

It is $18,000.

Dave Ramsey (3:27)

Okay.

So $18,000, $4,600, $5,800. All right.

George Kamel (3:32)

Are there credit cards on top of that?

Katie (3:33)

Oh, there are. Yeah, there are.

George Kamel (3:35)

What's the total in credit card debt?

Katie (3:37)

Around $23,000.

Dave Ramsey (3:40)

Okay. $18,000 plus $5,000 or $18,000 plus $23,000?

Katie (3:44)

$18,000 plus $23,000.

Dave Ramsey (3:46)

Okay.

SPEAKER_3 (3:47)

All right.

Dave Ramsey (3:49)

So you've been living out of control for a while.

SPEAKER_3 (3:52)

Yes.

Dave Ramsey (3:53)

And credit card has been catching your out-of-control chaos instead of fixing it.

Katie (3:59)

Correct.

SPEAKER_3 (4:00)

Yeah.

Dave Ramsey (4:01)

Because you really don't have a lot of debt until we got to that. So what do you think you're spending all this money on? Because there's a lot of money just disappearing in these numbers.

Katie (4:11)

Exactly. Exactly.

Dave Ramsey (4:13)

Where do you think it's going?

Katie (4:14)

Well, and honestly, I live a very, very simple life. Somebody doesn't. Obviously, yeah. It's definitely not me around here.

I mean, as far as like food and gas and like, I mean, I don't live lavishly.

Caitlin (4:32)

Like, I don't.

Katie (4:33)

I mean, my daughter is, she does a sport, but that's about it. Like, that's honestly about it. My oldest daughter, she's self-sufficient.

Caitlin (4:43)

She's 20 years old.