"You've Done This To Yourself"

Summary

Podcast Summary: "You've Done This To Yourself"
The Ramsey Show Highlights
Release Date: June 9, 2025

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Introduction

In the episode titled "You've Done This To Yourself," hosted by the Ramsey Network, Dave Ramsey and Chris Hogan delve into the financial struggles of a caller named Natalie. Despite a seemingly high household income, Natalie and her husband find themselves trapped in a cycle of debt. This detailed discussion explores the root causes of their financial predicament, offers practical advice, and underscores the importance of mindful financial planning.

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Caller's Financial Struggle

Natalie's Situation:

Natalie reaches out to the show to seek guidance on managing significant debt accumulated after purchasing a home prematurely. She explains:

"I have a little bit of a pickle going on. My husband and I got ourselves into some major debt. We purchased a home when we weren't ready. That's one of the top things."
[00:06]

Despite an annual household income of $200,000, reductions due to child support payments leave them struggling to balance their finances:

"We are in the red almost every month, even though we're making 200k on paper. Less deductions of child support."
[00:06]

Natalie further elaborates on the difficulty of taking up extra jobs to mitigate their financial strain:

"I myself am trying to see if I can get something after the kids go to bed, but that's. That timeframe is kind of difficult."
[00:06]

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Diagnosis by Dave Ramsey

Understanding the Debt:

Dave Ramsey begins by dissecting Natalie's financial details to identify the core issues:

• Income Discrepancy:

  Natalie claims an annual income of $200,000, leading Dave to question the consistency of this figure:

  "Wait a minute. Do you make 200k or don't you?"
  [01:48]

• Debt Breakdown:

  Natalie outlines various debts, including home repairs, credit card debt, car loans, and a substantial home equity loan totaling approximately $160,000:

  "And the house will bring enough to pay a bunch of that off. It'll pay off the home equity loan for sure."
  [04:28]

• Cost of Living vs. Lifestyle:

  The conversation reveals that the primary issue isn't just the amount of debt but also their high cost of living, exacerbated by lifestyle choices associated with homeownership.

Key Advice from Dave:

1. Sell the House:

   Ramsey emphatically advises Natalie to sell her house to eliminate the overwhelming associated debts:

   "So sell your house."
   [04:14]

2. Eliminate Unnecessary Spending:

   He stresses the importance of cutting off non-essential expenses and avoiding lifestyle inflation:

   "And the house will bring enough to pay a bunch of that off. It'll pay off the home equity loan for sure."
   [04:28]

3. Implement a Strict Budget:

   Establishing a detailed, written budget is crucial. Ramsey suggests using the EveryDollar app to track finances effectively:

   "You guys have to get on a written, detailed budget. You can do it with a yellow pad or you can do it with our little app."
   [04:28]

4. Take Control of Financial Decisions:

   Emphasizing discipline, Ramsey urges Natalie and her husband to take command of their finances rather than letting money dictate their lives:

   "You've got to get up above this thing and start telling your money what to do."
   [04:28]

5. Recognize Personal Responsibility:

   A central theme is Natalie’s admission that her financial woes are self-inflicted, necessitating personal accountability and behavioral changes:

   "You’ve created this problem yourself."
   [06:00]

Critical Quotes:

• On misleading societal norms about homeownership and education:

  "There are two major purchases that we've lied to you folks in America about. Home ownership and a college degree."
  [06:32]

• On avoiding financial traps:

  "Don't buy a house when you're broke. It's going to make your life worse."
  [07:00]

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Insights from Chris Hogan

Empathy and Reinforcement:

Chris Hogan adds depth to the discussion by empathizing with Natalie's exhaustion from battling financial instability:

"You strike me as a person who's exhausted because you've just been fighting the waves of life that you've created."
[05:50]

Highlighting Behavioral Patterns:

He emphasizes that without addressing the underlying behaviors that led to the debt, Natalie and her husband will likely encounter similar issues in the future:

"So you guys have to fix whatever's going on inside of you that's making you long to make these dumb decisions."
[06:00]

Distinguishing Lifestyle from Cost of Living:

Chris clarifies the difference between essential living costs and lifestyle expenditures, suggesting that Natalie's high cost of living is partly self-imposed through attempts to match her surroundings:

"That's what is tied to the house. The cost of living, like everybody else we live around is too high."
[08:37]

Encouraging Sustainable Financial Practices:

He underscores the necessity of differentiating between essential expenses and discretionary spending to achieve financial stability:

"That’s the difference between cost of lifestyle and cost of living."
[08:50]

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Key Takeaways and Conclusions

1. Avoid Lifestyle Inflation:

   Natalie's situation exemplifies how increasing income can sometimes lead to increased spending, especially when tied to big commitments like homeownership.

2. Importance of Budgeting:

   A meticulous, written budget is essential for understanding and controlling finances, ensuring that debt repayment becomes manageable.

3. Personal Accountability:

   Recognizing and addressing personal financial decisions is crucial in overcoming debt and preventing future financial struggles.

4. Reevaluating Major Life Decisions:

   Major purchases, particularly homes and education, should be carefully considered and aligned with one’s financial reality to avoid long-term debt.

5. Differentiating Between Needs and Wants:

   Understanding the difference between essential costs and lifestyle choices helps in making informed financial decisions that promote sustainability.

6. Seeking Professional Guidance:

   Calling into financial advice shows a proactive approach to resolving fiscal issues, highlighting the value of expert guidance in navigating financial hardships.

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Final Thoughts

"You've Done This To Yourself" serves as a poignant reminder of the pitfalls of financial mismanagement, regardless of income level. Through Natalie’s story, Dave Ramsey and Chris Hogan illuminate the importance of disciplined financial planning, personal accountability, and the courage to make tough decisions for long-term financial health. The episode reinforces that financial freedom is attainable through informed choices, strategic budgeting, and a commitment to overcoming personal financial habits that may lead to excessive debt.

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Notable Quotes:

• "If you make $200,000 a year, you can't afford not to pay the premium on that."
  — Dave Ramsey [03:15]

• "You Ought to get your butt out of debt."
  — Dave Ramsey [04:28]

• "Student loans. Wait a minute. What happened to your phone?"
  — Dave Ramsey [03:47]

• "Lifestyle's eating out lifestyle is a car that everybody looks at at the stoplight for all the right reasons."
  — Dave Ramsey [09:05]

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This episode underscores the critical balance between income and expenditure, the significance of informed financial decisions, and the profound impact of personal responsibility on achieving financial well-being.

Transcript

[Dave Ramsey]

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

[Natalie]

I have a little bit of a pickle going on. My husband and I got ourselves into some major debt. We purchased a home when we weren't ready. That's one of the top things. And now in this season in life, we can't really pick up extra jobs. I myself am trying to see if I can get something after the kids go to bed, but that's. That timeframe is kind of difficult. But we are in the red almost every month, even though we're making 200k on paper. Less deductions of child support. But we basically have to choose what we have to default on to catch up and make payments to start a snowball.

[Dave Ramsey]

Debt defaulting is not a method of catching up.

[Natalie]

I know I'm kind of lost. I don't really know what to do.

[Dave Ramsey]

How much is your house? How much is your house payment?

[Natalie]

Right now we're doing a catch up payment for 3,500. Yeah.

[Dave Ramsey]

What is your normal house payment?

[Natalie]

2,800.

[Dave Ramsey]

And you make 200,000 a year?

[Natalie]

Yeah. My husband does 450 a week on child support. So mine is that does what?

[Dave Ramsey]

How much a week?

[Natalie]

$450 a week.

[Dave Ramsey]

Well, that's only $1,800 a month. That's not killing you. Okay. And the house payment's not killing you. So where's the money going?

[Natalie]

It's all going to debt. We basically have nothing.

[Dave Ramsey]

How much other debt do you have?

[Natalie]

A lot. So with this home repairs in between, I've been in and out of jobs. I can show you that.

[Dave Ramsey]

Wait a minute. Do you make 200k or don't you?

[Natalie]

Now we do.

[Dave Ramsey]

Right now you make 200,000. Okay, so you have home repairs that you did that you couldn't afford. How much are they?

[Natalie]

So we did loans. The first one was 30,000. The other one was 14.

[Dave Ramsey]

Okay, so we owe 44,000 on home repairs. Okay. How much credit card debt?

[Natalie]

Credit Card.

[Dave Ramsey]

Hello.

[Natalie]

About 20,000.

[Dave Ramsey]

About 20,000.

[Natalie]

Okay, maybe 25.

[Dave Ramsey]

All right, 44 and 25. All right. And how much do you owe in your cars?

[Natalie]

One is 13, the other one's 16.

[Dave Ramsey]

Okay. All right. And how much are you putting in your 401k every month?

[Natalie]

I don't have one. My husband has a pension. He's part of the union.

[Dave Ramsey]

Okay. Are you guys really making 200,000 on paper?

[Chris Hogan]

We are.

[Dave Ramsey]

I don't know. I don't know where the paper is that you're adding this up. That's what I can't figure out. So he got enough money to pay. You have enough money to pay these bills if you're making $20,000 a month?

[Natalie]

Yeah, that's the thing. I'm puzzled. I signed up for every dollar. My. My thing is up and I can't afford, unfortunately, the premium on that, darling, it's $9.

[Dave Ramsey]

So bull crap. Okay. If you make $200,000 a year, you can't afford not to pay the premium on that. So anyway, the.

[Natalie]

We also have a $99,000 home equity loan out.

[Dave Ramsey]

Oh, there's a detail. Okay. Any other details I left out?

[Natalie]

Our cost of living is pretty high.

[Dave Ramsey]

Now, is there any other debt?

[Natalie]

Any other debt?

[Dave Ramsey]

Student loans. Wait a minute. What happened to your phone? Hey, speak into your phone.

[Natalie]

Sorry, I was just looking at the spreadsheet that I highlighted.

[Dave Ramsey]

We'll try to keep your mouth near the phone when you're doing that looking thing. All right? So, all right. So, yeah, sell your house.

[Natalie]

Okay.

[Dave Ramsey]

Yeah. And then you guys quit buying crap you can't afford. Because the home equity loan, the home improvement loans, and a bunch of the credit card debt are all associated with this house.

[Natalie]

Yes.

[Dave Ramsey]

Yeah. And the house will bring enough to pay a bunch of that off. It'll pay off the home equity loan for sure. Your cars are bad, but they're not out of control. But it's everything associated with this house. You guys look at something and you just go freaking buy it. Home Depot must love you people. So, yeah, this house is eating you alive. I mean, you've got like a hundred and one hundred sixty, $170,000 in non mortgage house debt. Yeah, yeah. Cray cray, cray cray. That's where that falls under. So sell the house. Yeah, yeah. You got to clear the house and clear this mess. And then, yes, you guys have to get on a written, detailed budget. You can do it with a yellow pad or you can do it with our little app. It doesn't cost that much. That's not the point, though. I think the point is your husband's not involved and you guys have never said no to yourselves. And you're disorganized. And you've got to get up above this thing and start telling your money what to do. And instead of wondering where it went, you got on the call and you don't even know how much debt you have. You're having to turn and look at stuff off phone. To figure out where you are when you're this screwed, you need to know exactly where you are. At all times until it goes away. And so dial it in. Dial it in. Dial it in. Yeah. You need to sell the house. Sure do. And I don't think you're going to, though.

[Chris Hogan]

Yeah, I'm just listening. And Natalie, I'm not beating up on you. I would just say this. You strike me as a person who's exhausted because you've just been fighting the waves of life that you've created. And if you've ever been in a really choppy boat situation where you're just hanging on and trying not to fall over, that gets exhausting. And you're at that place. But I'm not sure you're fully exhausted enough. And I think Dave's right. I would reset with the house. But this will happen to you again if you guys don't get to a point of realizing that you've done this to yourself. You've created this problem yourself. So you guys got to fix whatever's going on inside of you that's making you long to make these dumb decisions. Better fix that or else the house is going to be a temporary solve.

[Dave Ramsey]

Yeah, And I'll throw out there if it hasn't got. It may not have to do with your situation, Natalie, but we've. There are two major purchases that we've lied to you folks in America about. Home ownership and a college degree. And the lie is that no matter what it costs, you've got to go get one to be successful. No matter if I can afford it or not, I've got to go get one to be successful. And those are both lies. Okay, there's only one way to go to college and do higher education, and that's a smart way. Pay cash for a degree that's actually usable. Don't get a degree in left handed puppetry from some name university and go $250,000 in debt. End up a barista. That's thing number one. Because all college degrees are not worth the money. Some are worth a lot more than you pay. Not the degree itself, but the knowledge that you get homeownership. When you buy a house you can't afford, you get broker and broker. Broke people shouldn't buy houses. Makes you broker and broker. That's why they call them brokers. No, you should not be buying a house when you're broke. You ought to get your butt out of debt. You ought to have some savings, have a good emergency fund, a good strong down payment, have control of your money like an adult and only then is a home a blessing. But buying real Estate. Just because. Oh, real estate. So everybody's got to buy a house. And you got to buy a house. You got to buy a house. No, they don't. If you're dumb and broke, don't buy a house. It's going to make your life worse. And so it's the same apple we're biting on with the education crap. And it's like we've told people, no matter what it costs, no matter how dumb it is, no matter how out of control it is, go do it. Because it'll work itself out. Because these two things are so valuable, a college degree and home ownership, that you can't make it in America without them. Well, by God, you can make it in America without either one of them. Of them. And you sure can't make it in America by if you do either one of those wrong.

[Chris Hogan]

That's right. I heard her say after laying out all of the details to you, financially, she said then, our cost of living is so high. And here's what I think she was meaning, and this is tied to the house. The cost of living, like everybody else we live around is too high.

[Dave Ramsey]

New York City.

[Chris Hogan]

That's right. But this idea that I got to send my kids at the same school as everybody else and this, I got to have a car like everybody else, that's a cost of living sometimes that we manufacture because we're trying to keep up with everybody else.

[Dave Ramsey]

Yeah, that's a good point. That there's a difference between cost of lifestyle and cost of living.

[Chris Hogan]

Very different. And that's what I'm hearing is the lifestyle that came with the house.

[Dave Ramsey]

Living is food, shelter, clothing and transportation. Lifestyle is all the goodies around food, shelter, clothing and transportation to live like.

[Chris Hogan]

We want to live.

[Dave Ramsey]

Lifestyle's eating out lifestyle is a car that everybody looks at at the stoplight for all the right reasons. That's a lifestyle. If you're getting out of debt, you buy a car that everybody looks at the stoplight for all the wrong reasons. They think you're in the wrong neighborhood. Create your free every dollar budget today. The simplest way to budget for your life.