My Mortgage Is 50% of My Income

Summary

Podcast Summary: The Ramsey Show Highlights – "My Mortgage Is 50% of My Income"

Episode Details

• Title: My Mortgage Is 50% of My Income
• Host: Ramsey Network (Featuring Dave Ramsey and Rachel Cruze)
• Release Date: February 5, 2025

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Introduction

In the episode titled "My Mortgage Is 50% of My Income," Richard, a 50-year-old father of three, reaches out to seek advice on managing his high mortgage relative to his income. Hosted by Dave Ramsey and featuring insights from Rachel Cruze, the discussion delves into the challenges of balancing a hefty mortgage, family responsibilities, and the pressures of living in an expensive area like Southern California.

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Caller’s Financial Struggle

Richard's Situation: Richard begins by outlining his financial predicament:

• Age & Family: 50 years old with three toddlers under the age of 10.
• Income: Earns $137,000 annually as a national accountant.
• Expenses:
  • Monthly Obligations: $8,300, with $4,900 allocated to the mortgage.
  • Debt: $17,000 car loan payment; his wife's car is paid off.
• Assets: Owns his home with $300,000 in equity.
• Lifestyle: Homeschools his children, prioritizing religious education, making his wife a stay-at-home mother.
• Geographical Constraint: Lives in Southern California, facing high cost of living.
• Concerns: Despite a stable income, he lacks savings and feels constantly overwhelmed by daily expenses.

Notable Quote:

“I do national accounting... I travel a lot. And I thought I was getting a second job on the weekends, but then I'll never see the kids because I'm traveling.”
– Richard [00:23]

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Dave Ramsey’s Initial Advice: Move to Another State

Upon hearing Richard's concerns, Dave Ramsey offers a straightforward solution:

• Suggestion: Relocate to a more affordable state.
• Rationale: Moving can reduce living expenses, particularly the mortgage burden, and provide an opportunity to start afresh.

Notable Quote:

“You should move.”
– Dave [01:21]

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Exploring the Feasibility of Moving

Richard’s Considerations:

• Willingness to Move: Open to the idea of relocating.
• Financial Freedom: Ability to purchase a new home in another state outright, eliminating debt.
• Income Stability: Anticipates his income to remain consistent over the next decade.
• Family Ties: Concerned about leaving his wife’s family, who live within a 20-mile radius of their current location.

Notable Quotes:

“My wife is open to it. It’s just her family is all within a 20 mile radius within here in Southern California.”
– Richard [01:51]

“If you hate it, y’all can move back.”
– Dave [02:48]

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Discussion on Emotional and Social Challenges

Dave’s Insights:

• Personal Experience: Dave shares his own experience moving states, highlighting both positive aspects and the personal baggage one might carry.
• Emotional Toll: Acknowledges the emotional challenges, including leaving behind family and friends.
• Adjustment Period: Emphasizes the need to commit to a new environment for at least 24 months to allow for adjustment and evaluation.

Notable Quotes:

“When you're at night and the kids are in bed, you're looking up other real estate in other states... you're slowly making yourself crazy. Just move.”
– Dave [02:37]

“And the bad thing is I went with me. So any of my old stuff that I didn't like about myself or my parenting or how I was as a husband, I came with me.”
– Dave [02:03]

Rachel’s Perspective: Rachel Cruze reinforces the necessity of making a change to break the cycle of financial strain:

• Advocacy for Change: Encourages Richard to stop rationalizing his situation and take concrete steps to alter his circumstances.
• Hope for Improvement: Assures that change can lead to a better quality of life and financial stability.

Notable Quotes:

“There’s not a light at the end of the tunnel. It’s this. It’s just going to be the same life over and over until you do something different.”
– Rachel [03:28]

“You can always go back.”
– Rachel [03:43]

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Final Recommendations and Conclusions

Dave’s Closing Advice:

• Commitment: Urges Richard to commit to moving, despite the inherent challenges and emotional upheaval.
• Long-Term Benefits: Highlights that the initial difficulties of moving are outweighed by the potential for financial relief and personal growth.

Rachel’s Reinforcement:

• Empowerment: Encourages taking control of one's financial destiny by making proactive changes.
• Support System: Acknowledges the difficulty of leaving behind a support network but emphasizes the importance of prioritizing family’s financial health.

Notable Quotes:

“Stop being angry about it. Just make your next move, man. It’s not worth... just being angry.”
– Dave [03:24]

“Change it.”
– Rachel [03:40]

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Key Takeaways

• Assess Living Expenses: Richard’s high mortgage constitutes nearly half of his income, underscoring the importance of evaluating housing costs in relation to income.
• Consider Relocation: Moving to a more affordable area can significantly reduce financial strain, despite the emotional and social challenges involved.
• Commit to Change: Making a substantial change, such as relocating, requires commitment and a willingness to face initial discomfort for long-term benefits.
• Family Priorities: Balancing financial decisions with family needs and values, such as homeschooling and maintaining religious practices, is crucial.
• Open Dialogue: Engaging in honest discussions with family members about financial stress and potential solutions fosters collaborative decision-making.

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This episode of The Ramsey Show Highlights serves as a poignant reminder of the challenges many face with high housing costs and offers a clear, albeit bold, strategy to regain financial stability. By advocating for decisive action and offering empathetic support, Dave Ramsey and Rachel Cruze provide valuable guidance for listeners navigating similar financial dilemmas.

Transcript

[Richard]

Brought to you by the EveryDollar app. Start budgeting for free today. So here's what I'm asking. I'm gonna be. I'm 50 years old basically with three children, you know, all toddlers under the age of 10. And you know, I'm tired of just the day to day rat race. My job, you know, pays for our bills, but I don't ever have anything saved. My wife is a stay at home mother. I'm taking care of the kids and we homeschool. Okay. It's very, very important to us. We're very religious when it comes to that. So that's a non negotiable her getting a job. But you know, I own my home. I have 300 grand in equity. You know, I had been on the job a long time and I'm just, you know, I'm just staying above water. Cost of living is just so expensive here in California. You know, my monthly nut that I have to pay, pardon my french, is you know, $8,300 a month. You know, my mortgage is $4,940 $900. I have, you know, one debt, which is my car payment. You know, I owe like 17,000. My wife's car's paid off, you know, so I'm just.

[Dave]

Hey, Richard.

[Richard]

Yeah.

[Rachel]

You feel like you're just running, running and there's no traction.

[Dave]

You should move.

[Richard]

I want to move to another state.

[Dave]

And move to another state considering I.

[Richard]

Did it and pay cash.

[Dave]

I did it. And it was. Some things were really great. Some things are really tough. And the good thing is that we got a chance to start over, make a new life. And the bad thing is is I went with me. So any of my old stuff that I didn't like about myself or my parenting or how I was as a husband, I came with me. So I had to deal with it here. But you should move.

[Rachel]

What's your wife say, Richard?

[Richard]

My wife's open to it. It's just her family is all within 20 mile radius within here in Southern California. So it's a little bit of a challenge.

[Dave]

That's what I do.

[Richard]

Older.

[Dave]

It's not good. Yeah, yeah, it's hard.

[Richard]

Yeah, it is hard and you know, it just. I could go and pay cash for a house in another state, not have any debt. My income is going to stay the same in the next 10, 10 years. It's not going to fluctuate that that much going up. And I make 137,000 a year.

[Rachel]

What do you do for a living?

[Richard]

I do national accounting okay.

[Rachel]

Okay. Yeah.

[Richard]

Travel. I travel a lot. And I thought I was getting a second job on the weekends, but then I'll never see the kids because I'm. I travel.

[Dave]

Hey, Richard, Richard, Richard. Yeah, I can hear it.

[Richard]

You.

[Dave]

You travel. And every minute you're traveling, you're thinking, I should be moving. And when you're at night and the kids are in bed, you're looking up other real estate in other states. Here's what you're doing. You're slowly making yourself crazy. Just move. And here's the beautiful part. If you hate it, y'all can move back. But right now, I think you need to go ask your wife. Can we do. Can we do 24 months? Can we commit to a new town and a new. A new area? There's gonna be a lot of grieving. Family's not gonna like you. They're gonna get mad at you. I went through that. Doing holidays is going to be weird. And so you may need to budget a little bit more for travel over the holidays. We'd have to do that, too. And then get out of there, man. Go do something else. And this has nothing to do with California. It just has to do with. You're done in this area and you want a little bit more, and you're.

[Rachel]

Trying to justify it any other way of, like, stop being angry about.

[Dave]

Stop being angry about it. Just make your next move, man. It's not worth. It's not worth your soul and just being angry. And.

[Rachel]

And there's no and that's the thing is, like, there's not a light at the end of the tunnel. It's this. It's just going to be the same life over and over until you do something different. Yep. Change it.

[Dave]

Yeah.

[Rachel]

And you can always go back.

[Dave]

You can always go back.

[Rachel]

Yep.