We Make $60,000 and Are Struggling Every Month

Summary

Summary of "We Make $60,000 and Are Struggling Every Month" | The Ramsey Show Highlights

Release Date: February 22, 2025
Host: Ramsey Network
Guests: Zach and John

---

I. Introduction to Zach's Financial Struggles

In this episode, Zach reaches out to The Ramsey Show seeking help with his family's financial predicament. With a combined household income of approximately $60,000, Zach and his wife are grappling with mounting debts that leave them struggling to make ends meet each month.

Zach [00:04]: "I'm trying to figure out how to budget my money to get out of debt."

---

II. Detailed Overview of Debt and Income

Zach provides a comprehensive list of his debts, detailing both amounts owed and their respective nature. This overview sets the stage for Dave Ramsey's strategic advice.

• Debts:

  • House Mortgage: $150,000
  • Truck: $12,000
  • Wife's Car: $3,000
  • Student Loan: $2,000
  • Credit Cards: $1,701 and $600

• Income:

  • Combined Annual Income: $60,000
  • Zach's Income: Approximately $35,000 ($17/hour as a water plant operator)
  • Wife's Income: Approximately $15,500 (courthouse employee)

Dave Ramsey [00:16]: "Okay, tell us a little bit more. What's the debt?"

Zach [01:03]: "Roughly 60,000."

Dave Ramsey [02:11]: "Do you have any cash outside of your checking account at all?"

---

III. Asset Evaluation

Zach outlines his current assets, which include the value of his truck and his wife's car, both of which have depreciated significantly since purchase. This assessment is crucial for identifying potential assets to liquidate in order to reduce debt.

• Truck:

  • Value: $25,000 (private sale)
  • Debt Owed: $12,000

• Wife's Car:

  • Value: $6,000
  • Debt Owed: $3,000

Dave Ramsey [01:15]: "That's great news."

Zach [01:22]: "About six."

---

IV. Debt Elimination Strategies

Dave Ramsey, along with guest John, proposes a multi-faceted approach to eliminate debt:

1. Sell the Truck: By selling the truck for $25,000, Zach can pay off the $12,000 debt, freeing up $13,000.
2. Purchase a Cheaper Truck: Recommend buying a $5,000 truck to reduce monthly expenses.
3. Redirect Funds:
   • Use $8,000 from the truck sale to eliminate the wife's car payment of $3,000.
   • Pay off the $2,000 student loan.
   • Allocate the remaining $5,000 towards settling credit card debts totaling $1,300 and bolstering emergency savings.

Dave Ramsey [04:06]: "I think you can get rid of it all if I did the math right. I think you pay all of your entire debt off with the proceeds from the truck, brother, you're free."

John [04:22]: "Then I'm putting the rest of it in a savings account. It's going to be in my emergency fund because I'm about to have a little baby in my house."

---

V. Refinancing and Income Enhancement

Recognizing the high interest rate on Zach's mortgage (approximately 8%), Dave and John advise refinancing to secure a lower rate, thereby reducing the monthly mortgage payment of $1,200. Additionally, they emphasize the importance of increasing household income.

Dave Ramsey [03:26]: "Call my friends at Churchill Mortgage...see about a refinance in that house."

John [06:21]: "Call Churchill and get this house refinanced. That's number two."

Increasing Income:

• Zach's Employment:

  • Zach is unlicensed but expects to obtain his license in April, anticipating a pay raise.
  • Currently working 16-hour shifts, four days a week, and taking on odd jobs.

• Wife's Employment:

  • On maternity leave for six weeks with paid leave, post which household income may decrease by half temporarily.

Dave Ramsey [07:00]: "Good man. But let's go get the best hourly rate we can right now. I don't care what it is."

John [07:08]: "Let's go get a certification or change field so that in two years you're doubling your salary."

---

VI. Recommendations and Action Steps

Dave and John lay out clear, actionable steps for Zach to achieve financial stability:

1. Asset Liquidation:

   • Sell the truck immediately to eliminate major debts.

2. Refinance Mortgage:

   • Contact Churchill Mortgage to secure a lower interest rate.

3. Increase Income:

   • Zach should seek the highest possible hourly rate, even if it means taking temporary, higher-effort jobs.
   • Consider certifications or transitioning to trades for long-term salary increases.

4. Build Emergency Fund:

   • Use the remaining funds from the truck sale to establish an emergency fund, crucial with a baby on the way.

Dave Ramsey [06:43]: "Get it, brother."

John [07:12]: "I'd like you to start thinking about the trades."

---

VII. Final Thoughts and Encouragement

Dave Ramsey and John conclude the discussion by reinforcing the feasibility of Zach's debt elimination plan. They emphasize the importance of immediate action, disciplined budgeting, and strategic income enhancement to navigate the financial challenges ahead.

Dave Ramsey [08:06]: "Get after it. My man."

Zach [08:15]: "The simplest way to budget for your life."

---

Key Takeaways:

• Prioritize Debt Repayment: Focus on eliminating high-interest debts first, starting with the largest liabilities.
• Asset Management: Liquidate non-essential assets to free up funds for debt repayment and build an emergency fund.
• Income Diversification: Seek additional income sources and consider career advancements or transitions for better financial stability.
• Budgeting Discipline: Implement a strict budgeting plan to ensure that every dollar is accounted for and allocated towards debt reduction and savings.

This episode serves as a comprehensive guide for families earning around $60,000 who find themselves struggling each month, offering practical steps to regain financial control and build a secure future.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app.

[Zach]

Start budgeting for free Today. I'm trying to figure out how to budget my money to get out of debt.

[Dave Ramsey]

Okay, tell us a little bit more. What's the debt?

[Zach]

Car payments, house and a lot of small debts, a couple credit cards and a student loan.

[Dave Ramsey]

All right, let's go. Let's list them out for us. So go smallest to largest. The biggest debt down to the smallest. Start with the biggest debt.

[Zach]

150,000 for my house.

[Dave Ramsey]

Okay, we'll leave the house out right now because we're going to work on that other debt. So keep going.

[Zach]

$12,000 for my truck. 3,000 for my wife's car. About 2,000 on a student loan. And then two different credit cards are 1701 600.

[Dave Ramsey]

Okay, and what is your combined income? Do you have two incomes or one, two.

[Zach]

Me and my wife.

[Dave Ramsey]

So what's your combined income?

[Zach]

Roughly 60,000.

[Dave Ramsey]

Okay. All right, what are. What's the truck worth right now? If you were to sell it. Private sale, not to a dealer. What's the truck worth?

[Zach]

Roughly 25.

[Dave Ramsey]

Okay, that's great news. Okay, and how much is the $3,000 car? How much is that worth?

[Zach]

About six.

[Dave Ramsey]

Okay. All right, so we got a little. That's everything you got, correct?

[Zach]

That's everything.

[Dave Ramsey]

Do you have any cash outside of your checking account at all? What kind of cash do you have?

[Zach]

None. I just sold a four wheeler to afford tires for both of our vehicles because we live paycheck to paycheck.

[Dave Ramsey]

All right, so you guys are struggling just to make it to the end of the month?

[Zach]

Yeah.

[Dave Ramsey]

Okay.

[Zach]

Majorly.

[Dave Ramsey]

All right, so what. What is specific? What. What is your question today? Are you struggling with budgeting or is it a bigger issue where you guys aren't on the same page about money? I'd like to see more income. But what do you think is the big cause of this? Is it a lack of budgeting or is it. You guys are on two different pages, One's trying, the other, spending like crazy. Give us a little bit more.

[Zach]

I think it's a lack of budgeting because, I mean, we. We buy our groceries. We eat most of our meals at home. We eat about one meal out a week. You know, it's kind of like a date. It's just we live, you know, our bills take most of our paychecks. We don't really have much income week by week. And it's just. I feel suffocated and I got a baby on the way in about three Weeks. Okay, so what I'm gonna for. Okay.

[Dave Ramsey]

All right, let's figure this out. So what is your income and what do you do? And then tell us your wife's income and what she does.

[Zach]

My income is like, I won't say 32 or 35. I don't know exactly. I make about $17 an hour.

[Dave Ramsey]

What do you do?

[Zach]

A water plant operator.

[Dave Ramsey]

Okay, great. What does your wife do?

[Zach]

She is. She works for the courthouse and she makes about 1550.

[Dave Ramsey]

Okay. All right. What is the, the mortgage? You don't have a very big mortgage. What's your mortgage payment?

[Zach]

It's almost twelve hundred dollars.

[Dave Ramsey]

Okay, well, that's, that is a huge chunk of your take home.

[Zach]

It's a message. And we don't even owe that much. I think it's because we're so young.

[John]

Yeah, no, they don't have any. What's your interest rate on that? Do you know?

[Dave Ramsey]

It's all interest rate.

[Zach]

I think it's almost 8%.

[John]

Good.

[Dave Ramsey]

That, that's the issue.

[John]

Call my friends at Churchill Mortgage, Right. When you get off this call and see about a refinance in that house.

[Dave Ramsey]

Yeah, I agree. What's your truck payment?

[Zach]

It's $330.

[Dave Ramsey]

Okay. I'm going to start there. And the reason I'm going to start there is because that's a $300 a month raise, which is a massive deal for you. And you've got, you've got equity in that and I would sell it. If you can sell that for 25, you owe 12. That's going to leave you 13. I would go buy a $5,000 truck because I can find them all day long online and have done it before. Um, and then I'm going to take that 8,000 and I'm going to knock out your wife's car payment. I still got 5,000 left over. I'm taking out the $2,000 student loan. What do I got left? I'm trying to run this in my head.

[John]

Then I'm putting the rest of it in a, in a savings account. It's going to be in my emergency fund because I'm about to have a little baby in my house.

[Dave Ramsey]

I agree, but I mean, you, you.

[Zach]

Also got the two credit cards, which is 1300 for both.

[Dave Ramsey]

No, I got that.

[John]

Those are gone then.

[Dave Ramsey]

But I think he can get rid of it all if I, if I did the math right. I think you pay all of your. You pay your entire debt off with, with the proceeds from the truck, brother, you're free. That's Massive. What is your car payment on the. On the. On the wife's car?

[Zach]

180.

[Dave Ramsey]

Okay, so that's 480 bucks. All right. And we should start going down the list.

[John]

Yeah, you just got a $6,000 a year raise. If you do this bucks a month.

[Dave Ramsey]

Now, I'm going to say one other thing. You, my friend, your wife's pregnant, so I'll let her off the hook. Although I'd like to see her pick up some hours. Pick up 15 to 20 hours a week at Walmart, working evenings while the baby's in the oven. But you definitely need to be picking up another 20 to 30 hours a week to actually get this emergency fund built up, because you can be debt free and start stacking in the emergency fund really quickly. But this is all effort. I'm going to sell my truck, pay off all the debt, stick the rest in savings, and my wife and I are going to work like we got no tomorrow in order to stack up five, six, seven grand. All this is doable. My right, John.

[John]

All this is doable. But hey, listen, you're on it. You say the baby comes in three weeks.

[Dave Ramsey]

Oh, three weeks.

[Zach]

Yeah.

[John]

Okay. And your wife works hourly, Right. So if she is at home for two or three weeks on maternity leave, or six weeks, we just took a huge hit. You lose half your income. Right.

[Zach]

She has paid maternity leave for six weeks.

[John]

Oh, outstanding.

[Dave Ramsey]

Right?

[John]

High five. Those people in election.

[Dave Ramsey]

Listen, listen, my man. We live in a world. Adam. Excuse me, Zach. That would tell you. Well, you take off time. No, you're not.

[John]

You don't have. You can't afford it, bro.

[Dave Ramsey]

You can't afford to take time off with your wife. You got to be working.

[John]

Yeah.

[Dave Ramsey]

Crazy hours.

[Zach]

Yeah.

[John]

And so you go get a second job. Sell everything. If you sell this truck, you are debt free. $500 a month raise right there.

[Dave Ramsey]

And let's also call Churchill like you said.

[John]

Let's call Churchill and get this house. See if we can't get the. The. The house refinanced. That's number two. And number three, brother, you're on the horn. Get another job. I think with someone who works in a water treatment plan, who works as hard as you do on a day in, day off, you should expect to make 50 to 60 grand.

[Zach]

Yeah.

[John]

Okay.

[Zach]

Well, my biggest. My biggest issue is I'm unlicensed, but I'm supposed to be licensed in April, and that should be a little bit of a pay raise. And then I've been picking up odd jobs like crazy and working you know, 16 or 16 hour shifts, about four days a week.

[Dave Ramsey]

Good man. But let's go get the best hourly rate we can right now. I don't care what it is.

[John]

And let's don't get a certification for a little bitty raise.

[Dave Ramsey]

Yeah, I agree with that.

[John]

Let's go get a certification or change field so that in two years you're doubling your salary.

[Dave Ramsey]

I'd like to see you be looking at the trade, Zach. I really would. I want you to get through, baby, and get out, Get a. Get a nice emergency fund. But I'd like you to start thinking about the trades. You know, you talk about a plumber, electrician, that down the road, if that's something that you're interested, I don't want to push you into that, but the type of work you do, I think it'd be a nice transition. And we're talking about a much better situation when it relates to hourly rate plus benefits, plus a nice ladder forward. But listen, Zach, we just gave you. I mean, this is easy calls that we get. Selling that truck changes your life.

[John]

It also signals to your wife and that new baby. I'm the husband and I'll do anything for my family. By the way, honey, I sold the truck and I picked up a second job for the next six months so I can get us ahead financially.

[Dave Ramsey]

You guys will be fine. You got a small mortgage. Let's see if we get you a better rate on that. But just doing what we said to sell on the trucks going to make the margin there.

[John]

So get it, brother.

[Dave Ramsey]

Get after it. My man. There. There's no sitting around waiting anymore. You got to move. Create your free every dollar budget today.

[Zach]

The simplest way to budget for your life.