We Bought A House That We Can't Afford!

[Music] Susanna's in Columbus Ohio hey Suzanne how are you hi I'm good thank you so much for taking my call sure what's up well I'm a noona listener and I just finished the Total Money Makeover today and yesterday we completed baby step one but about eight months ago we did some really stupid things when we bought a house that were in now the biggest of which was buying it before I got my paycheck my first paycheck from a new job that I just started and when we got to Maytag we discovered that my pay was about 40% less than what we had figured it was going to be due to mandatory retirement that was taken out taxes were a lot higher and our insurances were higher than we thought they were going to be so fast forward to today last week we put the house on the market because we just decided that we can't afford it we've been trying to increase our income by selling some stuff and I'm looking for a part-time job but my question is until our income increases do we default on our other payments or to keep paying the mortgage or do we allow the house to go into foreclosure while we're still trying to continue with the baby steps what other debt do you have other than your home we have 20,000 on a camper which we're trying to sell we have 3,000 on a credit card and 2,000 and medical okay and what does your husband make a year can you make it makes about 38 and I make about 22 okay there's that take-home pay yes sir okay she have a $60,000 income how much is your house payment 19:25 okay are you doing your written every dollar budget yet yes I just started I just got that all entered last week okay she been doing the whole week okay yeah well yeah the campers up for sale the house is up for sale we're changing as many directions as we can hear a garage sale is an order Craigslist Craigslist stuff is for sale all right all that kind of stuff is going on both of you are looking for part-time jobs that's that that's a good thing to get this to balance I think though how much is the payment on the camper it's 220 okay I was making payments of 250 to try to pay it down faster but then you know we stopped doing that to start doing the baby stuff yeah I think you can make all these payments you're gonna have no life but I think you can make these payments okay let's prioritize though to help you with that but I I mean you got 2300 and you got 5,000 our take-home pay on those two payments is 2300 and that leaves you 1,700 to buy food and lights you know you ought to be making this I don't think you're in default but we have four kids yeah but we're not gonna be paying for piano lessons in our house is under foreclosure okay so you know if you choose them between house foreclosure and that the kids get to you know we're gonna everyone's limiting lifestyle right now because we're in a crisis mode now I'm gonna say I'm not saying don't feed them but a short short of that you can make this you just got to tighten down so anyway here's your priorities the first thing you buy is food groceries not eating out you don't need to sit out you don't need to see the inside of a restaurant less your work in there then the second thing you do should pay lights and water okay the third thing you do is you pay a house payment okay the fourth thing you do you don't have any car payments you keep gas you keep gas in the car so yeah what I just did dent I and what I just did was the what we call the four walls but it's old its old 7th grade civics lesson the necessities of life or food shelter clothing transportation and utilities we do those first that keeps the four walls of your house standing you have a place to live it's heated the kids are eating everybody's eating we're driving the cars and going to work and that's really that that's where we start is getting these real basic necessities of life taking care of you've got enough to cover all of that that wasn't the camper and that wasn't the MasterCard okay with a credit card okay they're there the last thing on the list is the camper okay actually I pay the camper for paid the credit card but the last two things on the list are the the the camper and then the credit card because the credit card can't do anything short-term except except damage your credit a short-term the camper could repo you if you just quit paying it all together but you got it up for sale so we're gonna get rid of that that's gonna be helpful so I think you're going to get through this but what you've got to do is just prioritize from most important thing to least important thing the least important thing I heard in this list so far is the credit card next to that's the camper mm-hmm the most important thing is your family being taken care of food shelter clothing transportation and utilities see what the medical bills come in on that you didn't mention you had medical bills yeah mm and medical okay then they would be down there by the credit card because there's nothing there's nothing they can do secured debts come before unsecured debts and both are at the bottom once we get past necessities okay because secured debts they can take stuff unsecured debts they just bother you right eventually they'll sue you and eventually they'll garnish you but you're going to get to this long before that happens because the house is going to smell the camper is gonna sell you're gonna be in a better place I mean this is a matter of months it's not a matter of years okay so you survive three months doing this you're gonna be you know everything's gonna turn the house is gonna sell camper is gonna sell you're gonna be the other side of this you're gonna be going man we almost screwed that up right but we got out of it by the skin of our teeth right that's what you're going to be saying thank god you're turning the corner here but here's the thing if you eat and have lights and water and have a place to live and you have transportation emotionally the rest of it is just a Monopoly game in your behind but when you get inside your house inside those four and you start having the lights turned off or getting foreclosed on in your homeless or that kind of stuff now emotionally your relationship everything's been invaded then and your stress level goes through the roof but if you separate necessities from the rest of it's just a game I'm losing right now I can lose a game but I don't lose my house all right that makes sense yeah yeah that lowers your stress level it's not going to go away until you get rid of the house in the camper but it lowers your stress level and if these collectors call just say you know you're you're too far down the list I can't get to you right now mm-hmm I'd like to but I can't get to you you know you're on the list and the more you call the further on the list you drop let's just have some fun with it right I'm we're not setting out to destroy your credit we're not setting out to not pay bills that wasn't your plan it's not my plan but I'm gonna take care of your family first because that's the best way for your bills to actually get paid later is if you get this out of order you're gonna get all stressed out and it's going to mess up your marriage and you're gonna end up in bankruptcy court and divorce court and all those stuff we don't want any of that stuff going on no yeah we're just gonna lock arms here and fight our way through this a little bit of stupidity and it'll be in your rear-view mirror within a year oh I know it will they put the house on the market competitively put the camper on the market competitively get themselves priced competitively good question thank you for joining us sometimes when you're scared and I've been scared you're been scared skier they're been scared I've been scared man I've been terrified sometimes when you're doing that it's hard to think clearly one good rule of thumb when you're facing something like that where the fear is coming at you is just stop and break the problem down into bite-size pieces and go okay what can I do what what variables can I control okay our family can eat that's good so we're not hungry one less thing to worry about lights and water are on mmm okay we're bathing and we are drinking water and we have electricity so we have heating and cooling one less thing to worry about we're gonna pay the rent of the mortgage mmm now I have a place to live and do all that we're gonna put gas in the car so we can go to work yep or pay that car payment if you got one right now and you start working your way down these necessities first and you really start understanding the rest of this stuff is just a really ugly game and you work your way through it and that's all we did there you can do this too if you need help you call here we're here to help people it's a pretty simple thing this is the Dave Ramsey show

Channel: The Ramsey Show - Highlights

Views: 715,250

Rating: 4.8395019 out of 5

Keywords: We Bought A House That We Can't Afford!, dave ramsey home buying, dave ramsey, money, the dave ramsey show, real estate, debt, mortgage, buying a house, dave ramsey mortgage, dave ramsey buying a house, ramsey solutions, ramsey, dave ramsey how to buy a house, dave ramsey baby steps, buying a house dave ramsey, dave ramsey buying a home, dave ramsey on buying a house, dave ramsey show

Id: 2lRSGUcRFKk

Length: 9min 36sec (576 seconds)

Published: Sun Aug 05 2018