A recent episode of “The Ramsey Show” turned intense when Brett, from Michigan, called to ask a simple question: Should he pay off his mortgage before his wife’s student loans, given his deep fear of becoming homeless again? But what followed was a financial review by David Ramsey that left no room to buffer reality.
Brett shared that he and his wife are almost $250,000 in debt. “The bulk of it lies in our mortgage and his student loans,” he said, and both loans are around $108,000 each. The rest includes a few thousand in credit card balances, a lawn mower loan for their lawn care business and the remaining balance on a trailer they are trying to sell.
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When Ramsey asked what the trailer was listed for, Brett responded, “We have it for sale for 40 (thousand) right now.” Ramsey quickly advised lowering the price and finding a new real estate agent: “You need a realistic price and you need to get rid of that dad’s gum yesterday. Even if you took 30 (thousand) for it, that adds 30,000 to all this debt.”
When the conversation turned to income, things took on a sharper tone. Brett’s wife earns $60,000 consistently. Brett makes between $25,000 and $30,000 a year in a seasonal lawn care business that he said struggled due to staffing issues last summer.
That didn’t sit well with Ramsey. “You have to get this going. Your business sucks,” he said. “You’re not making money. You’re starving. You’re making a dollar an hour and you’re working hard.”
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Brett admitted that his fear of becoming homeless again stems from a traumatic childhood. Ramsey acknowledged the pain, but urged Brett not to let fear dictate his financial decisions.
“What happened as a child has no bearing on what happens to you as an adult unless you repeat the exact same patterns,” Ramsey said.
He added that Brett’s financial anxiety is likely fueled by irrational fear, not facts. “The reality is that you two make about $100,000 a year in Flint, Michigan. The reality is that you only owe $108,000 on your mortgage. Very reasonable. You won’t be homeless. That’s an irrational fear.”