A recent episode of “The Ramsey Show” got intense when Brett from Michigan called in 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 gut-check from Dave Ramsey that left no room for cushioning the reality.
Brett shared that he and his wife are sitting on nearly $250,000 in debt. “Most of it resides in our mortgage and her student loans,” he said, with both loans hovering around $108,000 each. The rest includes a few thousand in credit card balances, a mower loan for his lawn care business, and the remaining balance on a trailer they’re trying to sell.
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When Ramsey asked what the trailer was listed for, Brett responded, “We have it up for sale for 40 [thousand] right now.” Ramsey quickly advised lowering the price and finding a new realtor: “You need a realistic price and you need to get rid of that dad gum thing yesterday. Even if you took 30 [thousand] for it, it puts 30,000 toward all this debt.”
As the conversation turned to income, things took a sharper tone. Brett’s wife earns a steady $60,000. Brett earns around $25,000 to $30,000 a year from a seasonal lawn care business that he said struggled due to staffing issues last summer.
That didn’t sit well with Ramsey. “You got to get this thing in gear. Your business sucks,” he said. “You are not making any money. You’re starving to death. You’re making a dollar an hour and you’re working your legs off.”
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Brett admitted his fear of being homeless again stems from a traumatic childhood. Ramsey acknowledged the pain, but urged Brett not to let fear dictate financial decisions.
“What happened when you were a child has no bearing on what happens to you as an adult unless you repeat exactly the same patterns,” Ramsey said.
He added that Brett’s financial anxiety is likely being fueled by irrational fear, not facts. “The facts are you two make close to $100,000 a year in Flint, Michigan. The facts are you only have $108,000 owed on your mortgage. Very reasonable. You’re not going to be homeless. That is an irrational fear.”
