The Ramsey Show Highlights: Use A HELOC To Save Our House?

Release Date: July 4, 2025

Introduction

In this episode of The Ramsey Show Highlights, the Ramsey Network addresses a pressing financial dilemma brought forth by a concerned caller, Rosa. Rosa finds herself grappling with sudden unemployment of her husband, mounting debts, and the daunting prospect of losing their home. Host Dave Ramsey, alongside Dr. John Delony, delves deep into Rosa's situation, offering practical advice and emotional support.

Caller’s Situation: Unemployment and Financial Strain

Rosa initiates the conversation by sharing the challenging news that her husband lost his job two weeks prior. She explains, “[00:12]...communication issue with his employer, who's also the owner of the company. It's a very small company, and he's been working with him for over 15 years. And he got fired over text” (Rosa, 00:12). This abrupt job loss has left the family without savings, despite Rosa’s steady income from her 401k. Their combined monthly expenses amount to approximately $5,000, which Rosa’s salary alone struggles to cover.

Rosa further elaborates on her financial obligations: “I have about $20,000 in credit cards. There's two car loans. One is about $18,000, and the other one's almost paid off. So there's maybe $1,000 left on that vehicle” (Rosa, 01:05). Additionally, she mentions having three 401k loans totaling about $26,000 that are automatically deducted from her paycheck, costing her $400 monthly.

Underlying Issues: Long-Term Relationship Struggles

As the discussion unfolds, Dave Ramsey uncovers that Rosa and her husband have been experiencing relationship issues for approximately 15 years. Rosa reveals, “We have five kids living in the house and my father, who has been passed away. We're down to just one child whoever. Kids don't even speak to us. But I don't want to lose my house” (Rosa, 01:52). This long-standing marital tension has contributed to their current financial instability, culminating in their inability to sustain their lifestyle despite dual incomes.

Dr. John Delony emphasizes the compounded anxiety Rosa is experiencing: “… you haven't slept in the last week, have you?” (Dr. John Delony, 02:47). He advises tackling the financial crisis step-by-step to prevent overwhelming stress.

Debate on Financial Solutions: HELOC and Debt Consolidation

Rosa contemplates taking out a Home Equity Line of Credit (HELOC) to bridge the financial gap and consolidate debts. However, Dave Ramsey cautions against this approach: “You understand you take out this home equity loan, you now have a second mortgage, and your home is at risk” (Dave Ramsey, 04:11). Dr. Delony reinforces this stance, comparing debt consolidation to merely reshaping expenses without reducing the actual burden: “No, don't do consolidation. You're just moving... It's like putting Spanx on. It doesn't make me weigh less” (Dr. John Delony, 04:19).

Dave further warns of the precarious nature of relying on a HELOC, stating, “Or it's going to be a band aid to get us to the next week... They're going to take away the home” (Dave Ramsey, 04:45). He underscores the importance of avoiding solutions that offer temporary relief but pose long-term risks.

Practical Advice: Budgeting and Income Adjustment

Transitioning to actionable steps, Dave Ramsey advises Rosa to create a meticulous budget: “You have a solvable problem. Our expenses are $5,000. How do we get our expenses down to $4,000 or less this month...” (Dave Ramsey, 05:30). He emphasizes the necessity of prioritizing essential expenses—food, utilities, housing, and transportation—and eliminating non-essential costs.

Rosa reveals her adjusted take-home pay is around $4,000 after taxes and deductions: “Let me look real quick here. $4,000” (Rosa, 05:59). With this information, Dave outlines a plan to cut expenses and bolster income. He suggests her husband take on multiple side jobs to bridge the financial gap, highlighting the urgency of increasing household income despite his reluctance: “He’s not [willing to take side jobs]” (Rosa, 06:33).

Dr. Delony adds, “I don't have any pride. Can you say, hey, for three months... we got to go make some money” (Dr. John Delony, 07:07), encouraging Rosa to negotiate with her husband for a temporary increase in his work efforts to stabilize their finances.

Asset Liquidation as a Solution

Dave Ramsey proposes a strategic liquidation of assets to alleviate debt: “You could make $7,000 right there and you could sell the other car and be, you know, free and clear of it with $7,000 to get you a car. Could you go down to a single car?” (Dave Ramsey, 07:35). By selling one of their vehicles, Rosa could eliminate a significant portion of their debt, reducing monthly obligations and easing financial strain.

However, Rosa expresses skepticism about her husband’s willingness to part with their assets or make necessary sacrifices: “I don't know that he'd be willing to do that either” (Rosa, 08:02). This highlights the deeper interpersonal challenges that may impede effective financial recovery.

Conclusion: Seeking External Support and Avoiding Risky Solutions

As the conversation nears its end, both Dave Ramsey and Dr. John Delony recognize the severity of Rosa’s situation and the limitations posed by her husband’s resistance to proactive measures. Dr. Delony advises seeking support from community friends or a local counselor to navigate the tumultuous period: “Get with some girlfriends in your local community... you may need to see a local counselor” (Dr. John Delony, 08:25). He firmly advises against taking out a HELOC, emphasizing the irreversible risk of losing their home.

Dave Ramsey reiterates the importance of disciplined budgeting: “Create your free every dollar budget today. The simplest way to budget for your life” (Dave Ramsey, 09:05). He encourages listeners, like Rosa, to take immediate, concrete steps to regain control over their financial situation without resorting to high-risk solutions.

Key Takeaways

1. Avoid High-Risk Loans: Taking out a HELOC can create a second mortgage, putting your home at risk if repayments become unmanageable.

2. Create a Detailed Budget: Prioritize essential expenses and eliminate non-essentials to align with your current income.

3. Increase Income: Explore all avenues for additional income, including side jobs or temporary work, especially during financial emergencies.

4. Communicate and Seek Support: Address interpersonal issues and seek external support from friends or counselors to navigate financial crises effectively.

5. Liquidate Assets Wisely: Consider selling non-essential assets, like an extra vehicle, to reduce debt and monthly obligations.

Notable Quotes

• “Don't do consolidation. You're just moving dead around. It's like putting Spanx on. It doesn't make me weigh less.” — Dr. John Delony 04:20

• “You have a solvable problem. Our expenses are $5,000. How do we get our expenses down to $4,000 or less this month...” — Dave Ramsey 05:30

• “I need you to swallow your pride on this one or don't even say that because he'll fight you on that.” — Dr. John Delony 07:07

• “Create your free every dollar budget today. The simplest way to budget for your life.” — Dave Ramsey 09:05

This episode underscores the critical importance of proactive financial management, open communication, and seeking community support during unforeseen crises. By avoiding quick fixes like HELOCs and focusing on sustainable budgeting and income strategies, listeners can navigate through financial hardships without jeopardizing their most valuable assets.