Sell My Land To Pay Off Debt?

Summary

Podcast Summary: The Ramsey Show Highlights – "Sell My Land To Pay Off Debt?"

Episode Information

• Title: Sell My Land To Pay Off Debt?
• Host/Author: Ramsey Network
• Release Date: January 11, 2025

Overview In this episode of The Ramsey Show Highlights, hosted by the Ramsey Network, Dave Ramsey and guest Rachel Cruze delve into a caller's dilemma involving substantial debt and land ownership. The discussion offers practical advice on debt management, financial prioritization, and strategic planning to achieve financial freedom.

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1. Introduction of the Caller: Hunter's Financial Situation

Timestamp: 00:06 – 00:43

Hunter, a 30-year-old married individual with three children, reaches out seeking advice on managing over $100,000 in debt. His financial obligations include:

• Land Purchase: $60,000 to $65,000
• Car Maintenance: $25,000 remaining
• Student Loans: $20,000

Hunter's annual income ranges between $70,000 and $75,000. Currently, he and his wife reside in a one-bedroom barnhouse with his wife's grandparents, limiting their living expenses to approximately $1,000 a month.

Notable Quote:

• Hunter (00:06): "I'm a little over a hundred thousand dollars in debt."

2. Dave Ramsey's Initial Assessment and Clarifications

Timestamp: 00:16 – 02:34

Dave Ramsey seeks clarification on the nature of Hunter's debt and assets. He notes that Hunter owns land valued higher than the purchase price and discusses the potential appreciation of the property's value over time.

Notable Quotes:

• Dave Ramsey (00:23): "A hundred thousand dollars in debt. On what?"
• Hunter (02:19): "Whenever we sign to purchase the land."

Dave emphasizes understanding the current worth of assets versus liabilities to assess the financial situation accurately.

3. Evaluating the Decision to Sell Land to Pay Off Debt

Timestamp: 02:34 – 05:49

Hunter poses the critical question: Should they sell their land to eliminate their debt? Dave Ramsey and Rachel Cruze provide insights into this decision.

Dave Ramsey's Perspective: Dave supports the idea of selling the land if it accelerates debt repayment. He suggests that liquidating assets with appreciated value can offer immediate financial relief and reduce debt burdens.

Rachel Cruze's Input: Rachel Cruze complements Dave's advice by recommending setting clear, achievable deadlines for becoming debt-free. She advocates for:

• Budgeting: Creating a detailed budget to track income and expenses.
• Strategic Planning: Setting a two-year deadline to move out of the current living situation.
• Maximizing Income: Taking on additional gigs and avoiding unnecessary expenses to increase cash flow.

Notable Quotes:

• Rachel Cruze (04:03): "Put a deadline. We're going to be out of this barn in two years."
• Dave Ramsey (05:12): "Happy wife, happy life is one of the equations."

Their combined advice emphasizes disciplined financial planning and proactive measures to achieve debt freedom.

4. Relationship Dynamics and Financial Communication

Timestamp: 05:49 – 07:56

Dave Ramsey shifts focus to the importance of communication between spouses in financial decisions. He warns against unilaterally making sacrifices without mutual agreement, highlighting potential strains on relationships.

Key Points:

• Open Communication: Ensuring both partners are aligned on financial goals and strategies.
• Avoiding Resentment: Preventing one partner from feeling burdened by unilateral decisions.
• Shared Goals: Establishing common financial objectives to strengthen marital bonds.

Dave underscores the necessity for both partners to be "all in" when pursuing significant financial goals to maintain harmony and mutual support.

Notable Quotes:

• Dave Ramsey (06:15): "You need to say what you are really thinking and not go along with..."
• Rachel Cruze (07:03): "They had an end goal."

5. Actionable Steps and Resources

Timestamp: N/A

Throughout the episode, Dave Ramsey and Rachel Cruze provide actionable steps for listeners:

1. Sell Appreciated Assets: Consider selling assets like land if it helps in reducing debt faster.
2. Create a Comprehensive Budget: Use tools like the EveryDollar app to track and manage finances effectively.
3. Set Clear Deadlines: Define specific time frames to achieve financial milestones.
4. Enhance Income Streams: Take on additional work or gigs to increase income.
5. Maintain Open Communication: Ensure both partners are involved and supportive in financial decisions.

Notable Promotion:

• Dave Ramsey (07:56): "Create your free EveryDollar budget today. The simplest way to budget for your life."

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Conclusion

In "Sell My Land To Pay Off Debt?", Dave Ramsey and Rachel Cruze offer a pragmatic approach to debt management by evaluating asset liquidation, emphasizing disciplined budgeting, and fostering open communication between spouses. Their guidance aims to empower listeners to make informed financial decisions, reduce debt burdens, and work collaboratively towards financial stability and achieving their dreams.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Hunter]

Hey. So I'm 30 years old, I'm married, got three kiddos, and me and my wife right now are a little over a hundred thousand dollars in debt.

[Dave Ramsey]

On what?

[Hunter]

And. Yeah, but.

[Dave Ramsey]

Yeah, on what? A hundred thousand dollars in debt. On what?

[Hunter]

So we have. We bought a piece of land. That's about 60. 60 to $65,000. We still owe on that. We have a car maintenance, which is. We have about $25,000 left on that. And then I have student loans, which is about 20,000.

[Dave Ramsey]

Okay, what do you make?

[Hunter]

So I make 70 to 75,000.

[Dave Ramsey]

Cool. And you don't live on the land? You just bought the land?

[Hunter]

Yeah, we're still paying on the land.

[Dave Ramsey]

But you don't live on it?

[Hunter]

No, sir. No. Currently we're living with my wife's grandparents in a one bedroom barnhouse. And so we're just living there. We're literally living on about $1,000 a month. And the rest were just stalking away towards debt and trying to get completely out of debt. Downloaded this app called. Yeah, the app. You guys have, the Easy Money app. So I'm literally just trying to completely get out of debt and trying to get out of it fast.

[Dave Ramsey]

I think you meant the Every Dollar app, I hope.

[Hunter]

Every Dollar app. Yes, sir.

[Dave Ramsey]

Okay, all right. If I got one called Easy Money, I'm not aware of it, but okay, all right.

[Hunter]

Yeah, every dollar. So.

[Dave Ramsey]

So you make 70,000 and you're living on nothing, and you have $105,000 worth of debt, including the land, Correct?

[Hunter]

Yes.

[Dave Ramsey]

What's the land worth?

[Hunter]

So it's already up in property value. It. We originally, whenever we bought it, we bought it for 75. It was worth a. It's now worth 85,000. And who said this? Vicinity.

[Dave Ramsey]

I'm sorry, who said it's worth 85?

[Hunter]

So we had a property appraiser whenever we closed on the land.

[Dave Ramsey]

How long would you close?

[Hunter]

85,000. Oh, I'm sorry. Not whenever we close, but whenever we. Whenever we sign to purchase the land.

[Dave Ramsey]

But it was appraised at 85 when you bought it?

[Hunter]

Yes, sir. And we bought it for 75.

[Dave Ramsey]

How long ago did you buy it?

[Hunter]

We bought it almost a year ago.

[Dave Ramsey]

Okay, so it could be worth even more now, correct?

[Hunter]

Yes.

[Dave Ramsey]

Okay, all right, so your question. Your question is what, Hunter?

[Hunter]

Yeah, so our question is, should we sell the land and then just pay off all of our debt?

[Dave Ramsey]

Yes.

[Hunter]

Okay, all right. Yes. All right. That answer. That answers my question.

[Dave Ramsey]

And you're free. You're free.

[Hunter]

Thinking about eventually building. Okay.

[Dave Ramsey]

Yeah, well, I, I think you'll have that dream come true someday. And the fact that you're living in your grandparents barndominium tells me you like a piece of dirt, which is cool. I'm with you on that. I like dirt too. Like a little room, little elbow room, so to speak. And I mean, I live in a part of Tennessee where gunfire on Saturdays, pretty normal sound by the neighbors. And so, you know, I like a little room and the, you know, you're. You're kind of got that in your blood. I can hear it. Not the gunfire, but the elbow room, the. Anyway, the. And you're. You're in your early 20s, maybe just.

[Hunter]

I just turned 30 this year.

[Dave Ramsey]

Okay. All right. What do you do for a living?

[Hunter]

So I do wedding and elopement photography.

[Dave Ramsey]

Cool. Okay.

[Hunter]

Yes, sir. Started that about four years ago.

[Dave Ramsey]

I can't imagine how interesting elopement photography is, but that's a whole nother subject. Okay. All right. Pretty great. Yeah.

[Rachel Cruze]

Please tell me you keep a little journal somewhere. Just a tally mark that says not gonna make it, are gonna make it.

[Dave Ramsey]

Oh, yeah. All right. I like that. You are willing to sacrifice to get where you're going and you're willing to make hard decisions to get where you're going. Those two things tell me you're going to get where you're going. So I'm not worried about you getting to live your dream. I think you're going to get there. All I'm thinking about is what's the shortest distance between two points between where you are and owning something. So probably if I'm you, I'm saving like crazy. I'm going to get us a little starter house. I'm going to make a bunch of money on it over the next four or five years and I'm going to buy a piece of grand and build on it as my phase two in this process rather than phase sub one, which you started with the ground way before you were even out of debt on the other thing. So I. And the good news is the ground will get you out of debt for now and you got zero payments. You can pile cash. You could be able to stack cash all in that barn, man. Just stack it in there and then go get you a nice starter house and let that thing go up in value like the land did and then sell it and build on a piece of ground someday, Maybe out there, five or 10 years, that would be where I am. And that's also about the time you're probably going to be a millionaire. Yeah.

[Rachel Cruze]

And there's something about putting a sitting down with your wife. And y'all put. It's arbitrary. Let's say two years. Let's put a deadline. We're going to be out of this barn in two years. Here's how much money we want to have. What must be true. How do we get that much money? Am I going to have to shoot on Sundays and Saturday nights and Wednesday mornings? And I'm. I'm going to take as many of these gigs I can get. I'm going to stop saying no to things. What would. What's she doing? What must be true for us to have this dollar amount. To walk out of here and get that small starter home in 24 months, 32 months. And sometimes when you put a deadline on it, it doesn't feel like it's forever. And you can just work yourself silly knowing there's a light at the end of the tunnel.

[Dave Ramsey]

So I got a pattern this hour. I got to stop for a second. Young ladies, you need to be very clear with your fiance's or your husbands. You need to say what you are really thinking and not go along with, I live in the barn loft or the camper because there are some young ladies that will go along with that because they agree with the goal and they're all in. And that's fine. I'm not talking to you. But you young ladies, who. These knuckleheads that you are married to are marrying, have talked you into living in a barn loft or in a camper because they think that that's the way you need to domesticate this wild mulephant that you have married and let them know that ladies generally don't like living under bridges. This is a bunch of crap. And so it took me a little while to realize this, because I. And I can. And you knuckleheads, I'm one of you. I'm only more advanced.

[Rachel Cruze]

Me too.

[Dave Ramsey]

Because I don't care where I live. I'm. I'm the guy that could live in the barn loft or the camper or under the bridge for that matter. It does not bother me. I mean, it doesn't really, but happy wife, happy life is one of the equations. And so, um, you guys are. You are thinking that you're doing something very positive for the future of your family. Meanwhile, you are leaving some marks on that relationship that. Because you're stupid. And. And I know this because I'm you. Okay? And so again, there are some times that I have talked to couples that both of them are all in. And we bought a $2,000 used mobile home, and we lived in it for three years, up and paid cash for a home, and both of them were all in.

[Rachel Cruze]

But they had an end goal.

[Dave Ramsey]

They had an end goal, number one. And number two, they were both all in. One of them wasn't going along with it because they think that they married Sir Galahad and they didn't. They married Goober. And so, you know, this is my wife, bless her heart. So I'm just, just warning some of you ladies, you need to speak up. And you knuckleheads, quit moving your lady that hasn't spoken up into these ridiculous situations. To accomplish your dream, create your free every dollar budget today. The simplest way to budget for your life.