“I Was Raised To Believe This, and It’s Done Nothing but Hurt Me”

Summary

Summary of “I Was Raised To Believe This, and It’s Done Nothing but Hurt Me”

Podcast: The Ramsey Show Highlights
Host/Author: Ramsey Network
Release Date: January 19, 2025

Introduction

In this episode of The Ramsey Show Highlights, a caller shares his financial struggles related to a recent vehicle purchase. The discussion delves into the pitfalls of credit misuse, the challenges of being upside-down on a loan, and practical advice on resolving such financial dilemmas. Hosted by the Ramsey Network, the episode features actionable insights from financial advisors aimed at helping listeners navigate similar situations.

Caller’s Story: The Cost of Misguided Financial Decisions

The caller begins by expressing admiration for the show's content, mentioning his efforts to implement the advice despite not having fully succeeded yet. He recounts purchasing a truck for over $60,000 without financing or a significant down payment, attributing this decision to his upbringing:

Caller [00:58]: “I was raised that credit was everything and I've worked my butt off to have really good credit and it's done nothing but hurt me.”

Despite having doubled his income over three years, the caller admits that his financial health has declined due to the hefty truck payment. He reveals that the truck depreciated significantly, making him owe more than its current market value, and shares his predicament of being unable to cover the additional $8,000 required to settle the loan:

Caller [01:37]: “I have the credit. I can go to the bank and sign the payment and get a signature loan for eight grand. It's just. Is it the right move and then...”

Advisors’ Guidance: Navigating Debt and Devaluation

The financial advisor sympathetically acknowledges the caller's situation, highlighting the imprudence of maintaining a $60,000 loan for a depreciating asset. He advises the caller to prioritize reducing his debt burden by opting for a smaller loan:

Advisor [01:37]: “But you would be trading an eight grand loan for a $60,000 loan.”

The advisor further explains that settling for a smaller loan ($8,000) is more manageable compared to the substantial $46,000 remaining on the truck loan:

Advisor [02:12]: “Yes, I would rather be $8,000 in debt than $46,000 in debt.”

Co-Hosts’ Contribution: Practical Solutions and Support

The co-host empathizes with the caller's predicament and reinforces the advisor's recommendation by drawing parallels to typical advice given for upside-down vehicle loans. He suggests leveraging existing assets to cover the loan difference, potentially avoiding additional debt:

Co-Host [03:24]: “Yeah. And you might have something, I don't know, just talking to you, you might have something laying around that you could sell to get the money to clear the difference without taking out a loan.”

Additionally, the co-host humorously notes the caller might have valuable items (like engine parts) that could assist in raising the necessary funds without incurring further debt:

Co-Host [03:32]: “Oh, no, that. That guy sounds like he's got a lot of little things with engines laying around that he could sell.”

Resolution: Moving Forward with Financial Responsibility

The caller acknowledges the advice and outlines the next steps, which include gathering necessary documents and awaiting Toyota Corporation's buyback offer. He anticipates receiving a check in early January to settle the loan discrepancy:

Caller [03:18]: “Yeah, they're gonna cut it to the bank.”

The advisor affirms the viability of this plan, encouraging the caller to proceed:

Advisor [03:21]: “Yes, I would do that deal.”

Key Takeaways

• Avoid Overleveraging: Purchasing high-value items without appropriate financial planning can lead to significant debt burdens.
• Manage Depreciation Risks: Vehicles, especially new ones, depreciate rapidly, potentially leaving owners upside-down on loans.
• Utilize Good Credit Wisely: While good credit is valuable, it should be leveraged responsibly to avoid exacerbating financial issues.
• Seek Practical Solutions: When faced with debt challenges, explore options like buybacks or asset liquidation to minimize financial strain.
• Consult Financial Advisors: Professional guidance can provide clarity and actionable steps to resolve complex financial dilemmas.

Notable Quotes

• Caller [00:58]: “I was raised that credit was everything and I've worked my butt off to have really good credit and it's done nothing but hurt me.”
• Advisor [02:12]: “Yes, I would rather be $8,000 in debt than $46,000 in debt.”
• Co-Host [03:32]: “Oh, no, that. That guy sounds like he's got a lot of little things with engines laying around that he could sell.”

Conclusion

This episode underscores the importance of prudent financial decision-making and the dangers of overextending oneself financially, even with a solid credit history. By sharing real-life scenarios and expert advice, The Ramsey Show Highlights provides listeners with valuable strategies to manage debt effectively and make informed financial choices.

Transcript

[Host]

Brought to you by chm, a biblically based alternative to health insurance. Learn [e-mail] budget I recently found some.

[Caller]

Of your videos scrolling Facebook and started listening to some of your stuff. I haven't done any of the things that you talk about, but I'm trying to get started. I recently bought a truck. It was a horrible decision that I didn't know better at the time. And I'm a prime example of. Just because you make more money doesn't mean you fix the problem if you don't know how to spend it. Because I've doubled my income three years.

[Advisor]

Ago and celebrated it with a truck payment.

[Caller]

I did. And I have just steadily gone downhill and I've been trying to sell it, but I owe a little bit more than it's worth because I took the hit of depreciation on a brand new truck.

[Co-Host]

Man. How much did you pay for that truck?

[Caller]

Over 60 grand. Finance? No. Money down, man.

[Co-Host]

Oh, man.

[Caller]

I was raised that credit was everything and I've worked my butt off to have really good credit and it's done nothing but hurt me. Well, I have an opportunity because the truck's a lemon and Toyota Corporation is going to have to buy it back. However, the state I'm in has a $0.20 per mile deduction for depreciation. And that's going to mean I have to pay a little bit over eight grand just for them to buy out my loan. I don't have a grand sitting in the bank. That would be a loan that I'd have to get just to get out of this loan.

[Advisor]

But you would be trading an eight grand loan for a $60,000 loan.

[Caller]

Yeah, I got like 46,000 left on it. Yes.

[Advisor]

Okay, sure.

[Caller]

I have the credit. I can go to the bank and sign the payment and get a signature loan for eight grand. It's just. Is it the right move and then.

[Advisor]

They pay off the loan or they take the truck?

[Caller]

They pay off the loan and take the truck.

[Co-Host]

So then you need.

[Advisor]

So did you sell your truck for 46,000 then?

[Caller]

Could I. No, I've had it for sale for 46,000 for a while.

[Advisor]

Oh, okay.

[Caller]

All right.

[Advisor]

So it's not. What's it worth?

[Caller]

It's. Last time I looked, it's about 40 trading, I think said mid-30s. The, the value plummeted on these things because all the recalls got it and it just, it killed the value of these trucks.

[Co-Host]

So they're. You're getting a better deal selling it back to them?

[Caller]

I think so, yeah. It's just. Now I'm trying. Trying to.

[Advisor]

Yes, I would rather be $8,000 in debt than $46,000 in debt.

[Co-Host]

I mean, it's similar to what we would tell anybody if they were upside down in a car. We tell them to go to the. To the bank, get a loan, clear the difference, and get something in cash. And this is very similar to that. So I.

[Advisor]

The only difference is your buyer happens to be Toyota, but.

[Caller]

Yeah, yeah, yeah. Okay.

[Advisor]

And how quick is all this coming through?

[Caller]

I have a bunch of documents I have to get together and send to them to get an offer to find out what they're actually willing to pay for the truck. But it'll probably be the first week or so of January.

[Advisor]

Oh, so they'll cut you a check pretty quick then?

[Caller]

Yeah, they're gonna cut it to the bank.

[Advisor]

That's what I mean.

[Caller]

I gotta pay the difference.

[Advisor]

Yeah, that's what I mean. Yes, I would do that deal.

[Co-Host]

Yeah. And you might have something, I don't know, just talking to you, you might have something laying around that you could sell to get the money to clear the difference without taking out a loan.

[Caller]

Just a thought.

[Advisor]

And you gotta have to get a little truck of some kind. A little $5,000 or something to get around in.

[Co-Host]

Oh, no, that. That guy sounds like he's got a lot of little things with engines laying around that he could sell.

[Advisor]

She kind of got that feeling.

[Caller]

Yeah.

[Host]

CHM isn't health insurance. It's a health cost sharing ministry. Check it out for [e-mail] budget.