Your Life Won’t Change Until You Do

Dave Ramsey (0:03)

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George Kamel (0:13)

Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the FAIRWINDS Credit Union Studio, this is The Ramsey Show. I'm George Kamel, my cohost today, Dr. John Delony, and I'm picking your calls at 888-825-5225.

Kylie kicks us off in Sacramento. What's going on, Kylie?

SPEAKER_3 (0:35)

Hi there. Okay, okay.

George Kamel (0:39)

How can we help?

SPEAKER_3 (0:41)

So I reached out because I am in crippling, overwhelming debt.

I read the book, The Teleminating Makeover, and I was really inspired, but I'm just trying to crunch the numbers myself. And I feel like even implementing Ramsey Solutions, I feel like I'm gonna be in debt for the rest of my life. Wow.

George Kamel (1:01)

So even after reading the book, you're going, there's no hope for me.

SPEAKER_3 (1:06)

That's how it feels.

George Kamel (1:07)

What does your math tell you?

SPEAKER_3 (1:10)

So my math tells me, I mean, that we just don't have enough leftover at the end of all of our bills, even though we have a high income. It just looks like we've made a lot of bad choices and it's gonna be really hard to rebound back from that. If I were to put $2,000 a month on this debt extra, I still feel like I would be paying off this debt into my 50s and 60s.

George Kamel (1:33)

Is that what the math actually says though? You said, I feel like it'll take me till my 50s.

SPEAKER_3 (1:38)

Oh, well, it's hard for me to actually do the math as accurately as I'd like to, because, of course, the interest is just eating me alive. Sure. So even if I'm putting an extra $2,000, it's hard for me to relate.

George Kamel (1:49)

Okay, so give us the numbers. Maybe we can help with this. How much debt do you have?

SPEAKER_3 (1:54)

So I can break it down. I have $411,000 in student loans between myself and my husband.

George Kamel (2:02)

That'll do. Okay. Anything else?

SPEAKER_3 (2:05)

Does a 401k loan count?

George Kamel (2:07)

Sure.

SPEAKER_3 (2:07)

Yes.

George Kamel (2:07)

If it has the word loan in it, it for sure counts.

SPEAKER_3 (2:10)

Okay. So we have a $36,000 401k loan.

George Kamel (2:14)

All right.

SPEAKER_3 (2:15)

I have a $15,000 car loan.

George Kamel (2:18)

Okay.

SPEAKER_3 (2:19)

And then we have about $80,000 in credit card debt.

Dr. John Delony (2:24)

Wow. What do you all do for a living?

SPEAKER_3 (2:28)

So I have two jobs. I worked for the state of California, and I also have a business.

My husband, he works for an investment bank.

George Kamel (2:39)

What were the degrees in?

SPEAKER_3 (2:41)

Believe it or not, it's finance, accounting. We both have MBAs.

Dr. John Delony (2:45)

Okay. So what's your total take home on an annual basis?

SPEAKER_3 (2:49)

So my total take home, oh, I don't have a broken out on the annual. It's $96.50 a month.

George Kamel (2:56)

Is that for both of you?

SPEAKER_3 (2:58)

That's for both of us and for business. And that's because, you know, the 401K loan is pulling out $8.60 a month.

George Kamel (3:06)

Okay, is the 401K loan, you're saying?

SPEAKER_3 (3:08)

Yeah, so we don't get to take that money home. It's like automatically pulling out that $8.60.

George Kamel (3:13)

Are you guys doing any investing right now?

SPEAKER_3 (3:16)

My husband has a 401K and I don't have anything going towards retirement. I'm in my 30s.

Dr. John Delony (3:21)

How much does your husband make?

SPEAKER_3 (3:24)

He makes about $100,000 a year, but he brings home only $4,600 a month.

Dr. John Delony (3:30)

Tell me about that.

George Kamel (3:32)

I know you're in California, but you're talking like 60% in taxes.

SPEAKER_3 (3:36)

I mean, he's got taxes and the 401K loan is $860,000.

So he's got what he's putting towards the 401K, his what he's pulling out for like the child care reimbursement, you know, which is probably another $400,000 a month. And then this gigantic 401K loan.

George Kamel (3:56)

What are the minimums on all of your debts between the student loans, the 401K, car loan, credit card, all of that? Just to get by on those.

SPEAKER_3 (4:04)

I mean, it's about $4,000 a month. Like, because we've got $860 on the 401K loan, we've got $2,000 minimum in credit card payments, and then our student loan payments, even like with our income-based repayment, it's actually down to about between $600,000 and $800,000. We're still working on getting into repayment on our student loans.