We Make Plenty Of Money But Still Overspend

Summary

The Ramsey Show Highlights - Episode: We Make Plenty Of Money But Still Overspend

Release Date: May 4, 2025
Host: Ramsey Network
Duration: Under 10 minutes

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Overview

In this episode of The Ramsey Show Highlights, the host from Ramsey Network addresses a common financial dilemma: earning a substantial income yet struggling to stay within a budget. A caller shares their predicament of overspending despite a combined household income of approximately $123,000 annually. Experts Dave Ramsey and Ken Coleman delve into the issue, offering practical advice and strategies to regain financial control.

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Caller's Financial Background

The caller outlines their financial situation as follows:

• Household Income:
  • Wife: Part-time homeschool hybrid teacher earning $18,000/year
  • Husband: Corporate America professional in digital marketing earning $105,000/year
• Debt:
  • Mortgage: Approximately $200,000 remaining
  • No other debts
• Expenses:
  • Groceries: Over $1,000 monthly
  • Mortgage: $1,600 monthly
  • Child-Related Costs: Physical therapy for a one-year-old
  • Personal Expenses: Running shoes (~$150 every other month) and a running coach (~$150/month)

Timestamp Reference:
[00:02] Caller describes their budgeting challenges and mentions using the EveryDollar app.

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Identified Financial Challenges

1. High Grocery Spending:
   The caller and his wife are consistently overshooting their grocery budget, sometimes reaching up to $1,200 monthly. The primary grocery stores include Safeway and Costco, with Costco bills ranging between $300 to $500, occurring twice a month.

2. Discrepancy in Income vs. Take-Home Pay:
   Despite a gross income of nearly $130,000, their combined take-home pay is about $6,000/month, which feels insufficient given their expenses and mortgage.

3. Other Unaccounted Expenses:
   There appear to be various "random other bills" totaling $5,000 to $6,000 monthly, which are not clearly accounted for in their budgeting efforts.

Timestamp Reference:
[01:18] Caller identifies groceries as the primary area of overspending.
[02:09] Dave Ramsey comments on the low take-home pay relative to gross income.

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Expert Analysis and Advice

Dave Ramsey and Ken Coleman provide the following insights and recommendations:

1. Detailed Budget Tracking:
   Emphasize the importance of meticulously tracking every expense to identify where money is slipping away. This includes scrutinizing grocery bills and other miscellaneous expenditures.

   Notable Quote:
   [03:12] Dave Ramsey: “This is going to be a conversation with you and your wife sitting down with accountability, saying, here's what we're.”

2. Setting Clear Budget Limits:
   Establish strict boundaries for each budget category. For groceries, they suggest setting a definitive limit (e.g., $700/month) and enforcing it rigorously.

   Notable Quote:
   [03:26] Ken Coleman: “You guys got to sit down.”

3. Effective Communication:
   Highlight the necessity of open and honest discussions between spouses about financial habits and spending behaviors. Understanding each other's perspectives is crucial for successful budgeting.

   Notable Quote:
   [04:14] Ken Coleman: “This is communication. I hate to keep simplifying this.”

4. Monitoring and Adjusting Spending Habits:
   Encourage the caller to continue tracking expenses over an extended period (e.g., 60 days) to gain a comprehensive understanding of spending patterns. This will aid in making informed adjustments.

   Notable Quote:
   [03:41] Caller: “We've tried.”
   [03:42] Dave Ramsey: “If you've actually tracked it against the budget, the budget will tell you very quickly where your money's.”

5. Reevaluating Discretionary Spending:
   The hosts suggest assessing non-essential expenses, such as the husband's running activities, to determine if they can be optimized or reduced to alleviate budget pressures.

   Notable Quote:
   [04:08] Ken Coleman: “You guys can do this, man.”

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Notable Quotes with Timestamps

• Caller:
  "We're always spending more than we're taking in." [00:02]

• Dave Ramsey:
  "That feels awfully low for you guys to be making gross, you know, close to 130." [02:10]

• Ken Coleman:
  "You guys can do this, man. This is communication." [04:14]

• Dave Ramsey:
  "What if Little Junior does need all this?" [04:20]

• Ken Coleman:
  "He's a year old. He doesn't need anything." [04:20]

• Dave Ramsey:
  "There we go." [04:26]

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Conclusion

The episode underscores that a high income does not automatically translate to financial stability. Effective budgeting requires diligent tracking, open communication between partners, and a willingness to adjust spending habits. Dave Ramsey and Ken Coleman provide actionable steps to help the caller and others in similar situations regain control over their finances, emphasizing that with the right strategies and mutual understanding, overspending can be curtailed despite substantial earnings.

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Additional Resources

• EveryDollar App: Mentioned by the caller as their budgeting tool of choice. Ramsey Network promotes it as a free budgeting solution to help manage finances effectively.

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This summary is intended to provide a comprehensive overview of the episode "We Make Plenty Of Money But Still Overspend." Listeners are encouraged to tune into the full episode for a more detailed discussion and personalized advice.

Transcript

[Caller]

Brought to you by the EveryDollar app. Start budgeting for free today. Hi. Sorry this has to be kind of brief, but my wife's a big fan. She listens to you all the time. We have the everydollar premium. We've been trying to budget every month for the last five months or so. I work in corporate America. I do marketing, digital marketing, and my wife is a part time homeschool hybrid teacher. She makes 18,000 a year, I make 105,000 a year. We have roughly $200,000 left on our house. We have no other debt, nothing at all. My wife and I struggle to be under budget with the Every Dollar app every month. We're always spending more than we're taking in. I don't do any of the shopping. I'm just at work. She. She takes care of our one year old son and it's just very difficult to get under budget each month. So I don't know, I've tried to talk to her about this. Cheap. She just has a truck. She has issues with spending too much.

[Dave Ramsey]

So is she paying every single bill in the household?

[Caller]

So she just, she does the grocery shopping. I pay all the other bills. So our son goes to physical therapy.

[Dave Ramsey]

So as you look at the budget and the bank account, where would you say most of this money is disappearing?

[Caller]

To groceries by far.

[Dave Ramsey]

Okay, and are you saying that you feel like she's overspending on groceries?

[Ken Coleman]

Yeah.

[Caller]

Oh yeah, like, yeah, like we're spending easily over $1,000 every month on groceries.

[Dave Ramsey]

And is there a reason? Have you asked her? Hey, what's going on with the groceries here? Can we change our grocery store? Are we wasting food? Like, how can we do better in this area?

[Caller]

I try. She tries to make everything in one stop. So we have Safeway out here, which is like, I guess Kroger now for everybody else, but also going to Costco, she just likes to only go to one store and buy everything. So a lot of the Costco bills are 3 to $500. She does that sometimes twice a month plus going to Safeway. And then things can get up to, you know, 1200 bucks easy on groceries.

[Dave Ramsey]

But even then, are you guys taking home? 9,000amonth. What's your take home pay for?

[Caller]

With both of us, it's about 6,000.

[Dave Ramsey]

Okay.

[Caller]

A month.

[Dave Ramsey]

That feels awfully low for you guys to be making gross, you know, close to 130.

[Caller]

Well, yeah, and again, our mortgage is not very high either. It's about $1,600 a month. There's like, I Said there's just lots of things that just seem like they sneak in there.

[Ken Coleman]

Yeah, but this is. And like, this is more than groceries.

[Dave Ramsey]

Yeah. Even at a thousand bucks in groceries, you guys still have 5, $6,000 of random other bills. And so I think there's more to it.

[Ken Coleman]

I mean, what are you contributing to this? You sound like you're pristine the way you've set this up, but I gotta believe that you've got some. Some habits.

[Caller]

Yeah, not really. I. I don't buy anything on Amazon. I don't buy anything on Amazon. The only. I run a lot, so I buy running shoes like every other month. That's about it. They're about $150. And I do. I'm very athletic. I run against college kids in D3 schools. But I have a coach that's 150amonth. That's all I really spend on myself.

[Dave Ramsey]

Okay, so you have your fun money, you've got John's fun money, 150 bucks.

[Ken Coleman]

You got groceries run money.

[Dave Ramsey]

But there's still a lot of money to be accounted for in here. And this is going to be a conversation with you and your wife sitting down with accountability, saying, here's what we're. Okay, if we need 700 in groceries for some reason, that's the limit. And once you go over that, it's over.

[Ken Coleman]

Yeah, you guys got to sit down. You called us for help, but bottom line, you said she's a big fan, so she's. She's open to all this stuff. You guys get to sit down and track spending for 60 days so that you just have a really good idea about what's going on. And we've tried.

[Caller]

We've. We've tried.

[Dave Ramsey]

And no, if you've actually tracked it against the budget, the budget will tell you very quickly where your money's.

[Ken Coleman]

You're too busy running. What are you running for?

[Caller]

No, no, no. I run. I'm running for my fears, I guess. She buys a lot of stuff on Amazon that she just. She thinks, oh, our son needs this and our son needs that. We did have a car that was a gas guzzler. We did get a new car, and that was paid for by generosity from a family member. It's completely paid off.

[Ken Coleman]

You guys can do this, man. This is communication. I hate to keep simplifying this.

[Dave Ramsey]

And we're here on one side. I'm not. I think you're telling the truth, but I think she might be telling the truth. What if Little Junior does need all this?

[Ken Coleman]

He's a year old. He doesn't need anything.

[Dave Ramsey]

I don't know what he needs, but, you know, Dad's a good running.

[Ken Coleman]

Well, I know. Yeah, a little. You put less running in a few more meetings. That's what we need to do.

[Dave Ramsey]

There we go.

[Ken Coleman]

This guy. Those running shoes aren't cheap.

[Dave Ramsey]

That's why I don't run, Ken. So much money.

[Ken Coleman]

This guy's so much into running, he's got a coach that's coaching him how to run.

[Dave Ramsey]

That's racing against elementary school kids. That's my version.

[Ken Coleman]

What are we doing, man? Tell you what, I'm not running. I'm sitting on this brake. Create your free every dollar budget today.

[Caller]

The simplest way to budget for your life.