A 35-year-old nurse from Montreal recently stunned listeners of “The Ramsey Show” when he called in to share that he’s carrying a total of $1.8 million in debt, despite cutting out everything from snacks to grooming.
“I had my aha moment when I saw $22,000 going out in one month after doing a budget,” he told Dave Ramsey and co-host Rachel Cruze. With one child already and another on the way, he’s desperate to make changes, but feels stuck in a financial hole that’s quickly closing in.
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Triplex, Two Hondas And A Cousin’s Loan
The caller said he owes $680,000 on a triplex currently listed for $950,000, and another $590,000 on his family home, which he says is worth about $750,000. On top of that, he has two electric Hondas, each with loans of nearly $70,000, plus $35,000 in credit card and student loan debt. But the most striking part is that he borrowed $350,000 from a cousin to use as a down payment and to renovate both properties.
His household brings in $110,000 to $120,000 a year before taxes. About half of that comes from his wife, who will be going on maternity leave in 12 weeks. She’ll be receiving 70% of her salary for a year.
“I cut out everything from potato chips to haircuts, literally anything I could to curb the expenses,” he said. “I wish I could do more jobs a day, but my doctor says that because I’m bipolar, I need to have a healthy work-life balance.”
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Ramsey And Cruze Push Back Hard
Ramsey and Cruze went straight to the point. “You sound like you’re walking around under a 400-pound weight,” Ramsey told him. “You sound scared to death.”
Ramsey urged the caller to sell the triplex immediately, ditch the expensive cars, and stop making financial decisions based on trying to keep his wife happy.
“You don’t get to be an investor in triplexes. That thing’s got to be priced in such a way that your real estate agent can sell it and get it gone,” Ramsey said. “We’re not worried about the environment right now. The environment I’m worried about is not being broke. Electric Hondas are gone. Bye-bye. We’re getting cheap cars.”
And regarding maternity leave, it’s a luxury they can’t afford: “I don’t really care what the Canadian government says. She gets to go to work. She’s broke. Broke people work.”
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When the caller said his wife was only willing to sell everything except the house and the cars, Ramsey replied, “You've been running around trying to shovel things in her direction to keep her happy, like she's your child or something. That's not working.”
The Way Out Will Be Hard
Ramsey said that with intense budgeting and lifestyle changes, the couple could eventually dig out. “Mathematically, I can get you out if you did everything I told you to do. But I don’t know if you’ll do it or not.”
Cruze added that their entire life will have to look “completely different” in the next three to six months if they want to survive this.
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