A WOMAN has been advised to make a crucial change after her partner’s business put them in a serious financial hole.
She noted that the failing venture set them back tens of thousands of dollars spread across personal and corporate credit cards.
Dr. John Deloney (left) and Dave Ramsey (right) gave the caller crucial advice[/caption]
Experts Dave Ramsey and John Deloney explored options with the Oregon resident, Rachel, when she called in during a recent episode of The Dave Ramsey Show.
“Frankly, the business is tanking,” Rachel told Dave and John.
“He’s racked up a lot of debt on both personal cards and business cards and between that and his truck and trailer, we’ve got a little over $90,000 in debt that we’re looking at.”
Rachel continued to note that the couple owned their home and owed around $175,000.
She found that the property’s value was closer to $250,000 if they wanted to sell it, leaving a potential profit of around $75,000.
“I was just gonna see if you advise us to sell the home and go into a smaller place or hang onto it,” Rachel explained.
DESPERATE TIMES
Dave quickly asked what she makes for her annual income to get an even better sense of the situation, and Rachel noted that she was a stay-at-home mother of three kids with a fourth on the way.
She also added that her husband would likely find work around their area as an electrician’s apprentice and that even buying food and keeping the lights on had been tough recently.
“We’ve got about $25 in our checking account,” Rachel added.
With the scenario looking dire, Dave also asked why Rachel’s husband couldn’t get a higher paying position given his skills and experience.
Rachel claimed Eugene, Oregon, didn’t have much to offer for that, and her husband would be lucky to get paid $30 per hour despite his construction background.
WORKING OVERTIME
Dave and John both emphasized that her husband needed to make a crucial change, taking any job he could to get them out of the spot that left her “terrified.”
Each suggested taking construction jobs with three different crews, or working night shifts at the local Walmart, anything to get them back on their feet and out of debt.
“Not doing anything is not an option,” Dave said.
I can’t fathom the situation you’re in right now.
Dr. John Delony
“He [Rachel’s husband] has to go get three jobs this week.”
Along with the additional jobs, Dave noted that the trailer Rachel’s husband bought recently for the business could be sold for extra cash.
Ultimately, the experts advised that the couple go into full survival mode for the time being, making as much money as possible as fast as possible.
“The only answer to it is extreme activity on his part,” Dave emhpasized.
“He’s a good dude, his business just failed.”
SPENDING ORDER
He also noted that Rachel should spend the first bit of income the couple makes from the new jobs in a specific order — food, utilities, mortgage, and then truck payment.
To answer her question about selling the home, Dave also said she didn’t need to, as the problem was mostly income-related not expense related.
He also added that The Dave Ramsey Show would help the couple out with a free financial coach to make sure everything was on the right track to get them out of the financial stress.
Dave and his experts have talked through hundreds of difficult financial scenarios with callers.
He recently advised a couple with $20,000 in credit card debt to take care of their “home” issue before anything to improve their situation.
A dad-of-five with $46,000 in credit card debt was also told to fix a crucial habit that “evaporated” his capital.
