I'm 29 Years Old With Nearly $1,000,000 In Debt!

Channing is with us in Washington DC Hi Channing, welcome to the Dave Ramsey Show Hi Dave, thanks for letting me know what's going on, so I live in DC. I recently got married about three months ago. Congratulations, thanks to you, my husband and I have really decided. We need to be really focused on the same page about our finances. In fact, we have our first financial class this afternoon. Oh, great, but together we probably have just under a million dollars in

debt

and we want to know how I can get that for free without filing a return.

Bankruptcy, okay, how much of that is a mortgage? The mortgage is about 210, so you have $600,000 in what is about 335 in student loans, we both have advanced degrees and a lot, the rest is really credit cards and personal loans, so you have $300,000 in credit cards. and personal loans we have about two hundred thirty-five thousand student loans and about one hundred thirty-six thousand and credit cards 44,000 personal loans and thirty-five thousand auto loans okay, how old are you? I'm 29, okay, so what do you have? both of us in this or is it just one of you who has completely lost his mind, well I have most of the student loans and he has most of the credit cards.

My credit card

debt

is not great, there is not much time, why? At 29, he racked up a hundred thousand dollars in credit card debt, well, he's 32, but I think it's one of those things where you just make really bad financial decisions and think you'll be able to pay it off as you go and It is not like this. It doesn't happen, yeah, okay, so you both have advanced degrees, what are your degrees? We have a degree, both advanced degrees. No, he has an MBA and I have an advanced degree in policy. I work in government and actually both. do it now, at this point, it's really okay, so your household income is about two and a half.

Is there recognition on both sides of how absurd the situation is? Yeah, okay, there isn't. I think we're both a little scared and want to do it. anything we can avoid okay cool then I'm done I'm on your team I can skip that step okay okay scared and you should be you're upset and you should be yes, you're early in the The early stages of being sick and tired and being sick and tired and you should be so this is what you guys have been living in everything from your educational choices to your car purchases to whatever you've been living in about 10 times where you're going to be able to live for the next three

years

.

Okay, yes, that's true. Well, I'm getting ready to destroy your life as you know it because that's not who you are. Your lifestyle is considerably above your extremely good income and has been for a period of time and so you have become accustomed to spending as if you were in Congress. This is going to be very emotional for all of you and you're going to have to look at it through that lens and through a spiritual lens. or you're not going to make it, you won't have to worry about what anyone thinks, including everyone else, because you're not going to spend money on anything for the next three

years

like you've been hanging around, let's pretend you are.

You're making 210 and I know you just got married, but let's assume you've been doing this as a couple along the way. You've been earning 210 spending 310. I'm getting ready to put you at 30, you won't see it. the inside of a restaurant unless it's your side job or you're serving some of the people you work with during the day okay, that's how humble this will be okay, it will crush a lot of the junk in your soul that caused you to do this, so the bad news is that it will be very difficult, the good news is that it will be great for you relationally, spiritually and financially, but you will not gain financially unless you establish the relationship in the spiritual movement, because I know that.

I know you because I was you this is exactly what I did this is exactly what I did when I was 20 years old I bought and bought a lifestyle that was 5 to 10 times greater than what I had me that made me do that right and all that has to be destroyed to fix it this doesn't make any sense resistant brutal yeah it makes a lot of sense and it's brutal I mean I'm warning you what's coming okay this is not a problem math the math problem is the symptom the problem is what's going on inside of you, so the good news is that you are very intelligent people and if you will apply that intellect to solve this problem as if it were a policy problem or a business problem you can solve the problem but the lens through which the problem will be solved is through spiritual contentment godliness with contentment is a great gain translation you are going to stop at a traffic light driving a shitty car next to people who have an income of a quarter years better than yours, right, and you won't care, that'll be the cool part, okay, you'll get to the point where you won't care what other people do.

Think about it and that could be a fake knee for you or him. I don't know what it is, but some of you have been buying a lot of things for a lot of reasons that are going to change, yes you have, yes I. you have - because you're on a suicide mission right now incredible credit cards are actually included in one of those aid programs like those where we put a lot of money into them and then they negotiate on your behalf, so they don't even we are. You're not even paying off most of the $24,000 or the credit cards right now, you're probably going to have to retire them, I don't know how quickly, but the problem with those people is they don't qualify.

The administrative layer is actually very pitiful, they are incompetent and therefore you will find that they do not understand it. The concept of what you're presented with isn't all bad, but you'll find that following it will shake your bones. So you'll probably walk away from those, but then we'll list these debts from lowest to highest. What is the value of the house? What is home life? You said no, what is the value of your house? Oh, the value of my house, oh, I think it was him. according to hello the house is worth about three hundred thousand okay so you have a little bit of capital there but not enough it won't save you so I always sell the house as a last resort unless that's the problem and it's not The problem here is well, in terms of proportion, it's nothing compared to these other things.

I mean, you have three hundred and thirty thousand, it's student loan debt, two hundred thousand on your house, right, that's not the problem, you know? And credit cards are almost as much as a stinky house. so that's not the problem, so no, I don't think we need to sell it, you probably need to sell a car, I'm not going to rush into it, what's important is this impact on everyone's system. lifestyle where you go from actually living what we call getting high in Tennessee: you'll live beans and rice, rice and beans, your friends will think you've lost your mind and your mom will think you need counseling, yeah and we actually live with my parents Now after we got married, they offered us to sing with them to help us, you know, with the transition to a new life, which has definitely been helpful in renting out their house, so I put my condo up for rent when I got engaged because I knew I wanted to. saving money for the wedding before we got married, so I had a renter there last year who was actually looking for another brand new career that ends in a month.

Oh, we'll just sell it, so I thought. I lived in it, no we don't live in it, I'll just sell it and put the 90,000 in your dead snowball, yeah, okay, you don't need it, you're not moving there, I don't know, you don't need it. No, we're never going to live in it, it was one of those, yeah, that was my first base, okay, yeah, it's gone, it's gone, although then you need the 90 grand to kickstart the rest of this, like that that that just took away a third of your deal, okay, so we're getting started, but did you feel that?

Look, I only pinch you if you feel the pinch. Oh, Dave is grabbing me, pinching me, don't pinch me, yeah, I'm going to take away the lifestyle. you and that is going to change your life for the better it is going to change who you are in this process it is necessary it is the way you go out you can do it although I know I will help you call me if you need more help this is the Dave Ramsey show