Dave Ramsey Was Wrong, Now She's F*cked | Financial Audit
Published: 2025-05-21
Status:
Available
|
Analyzed
Published: 2025-05-21
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The speaker has taken out multiple personal loans, including for moving expenses, consolidation, and an HVAC system, indicating a pattern of using loans to cover various financial needs.
"So, I've had consolidation loans, I've had moving loans, and I had one that was supposed to be for the H 15%."
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There is confusion and a lack of clarity regarding the purpose of past loans, specifically an HVAC loan, a moving loan, and a consolidation loan, suggesting a disorganized approach to managing debt.
"So, we took out the HVAC loan. My... I think the last one you said was moving. No, wait. It was consolidation. Wait, no."
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The speaker is unaware of the current market value of their car, which has a loan balance of $20,000 and is estimated to be worth around $19,000, indicating a potential negative equity situation.
"What's it worth? I could not tell you. I What do you think it's worth? 18 basically. Right about 19."
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The speaker strongly advises against purchasing a new house due to the current financial situation, predicting it will be impossible to afford, and directly stating 'no' to the idea.
"Don't you want to get that house? No. Don't. It's as easy as that. I solved that. I I I solved that equation for you. I solved the damn equation. The equation is no."
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The calculated minimum monthly expenses ($5,923.83) significantly exceed the combined income, leaving only a small 'wiggle room' of $546.39, which is insufficient to address the existing debt.
"$5,92383. That gives you an extra $546.39. Let's call Wiggle Room.4639."
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A debt-free goal of seven years is presented as achievable, contingent on increasing income and eliminating all non-essential spending like dining out.
"We can pay it off in about seven years. He needs to up that income. Okay? And and you can no longer no money going out to eat."
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The speaker assigns a financial score of 2 out of 10, noting it's slightly higher than the guest's own estimation, indicating a very low financial standing.
"Round it up in financial score two out of 10, one point higher than you thought."
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The guest relies on their father's financial contributions to cover some expenses, particularly for dining out, which hinders their ability to manage their own budget effectively.
"My dad, he will help pay for stuff. So then I it's like a let's go out to eat cuz dad's going to pay and then he'll pay for a portion of for him."
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The guest has taken out a loan against their 401k, which is viewed negatively due to the risk of immediate repayment if employment is terminated, and a lack of transparency or memory about its purpose.
"You took out a 401k loan against it. I did. I kept looking. I was promised something. What the are you talking about?"
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The car, with a loan balance of $20,000, is estimated to be worth only around $19,000, indicating a loss in value and a potential negative equity situation.
"What's it worth? I could not tell you. I What do you think it's worth? 18 basically. Right about 19."
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The individual is considering another debt consolidation loan but acknowledges it hasn't worked in the past due to a recurring debt cycle.
"I'm considering doing another one. It didn't work last time. It did until you're in so much debt. Yeah. Until the cycle came back. So it didn't work."
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The speaker is considering debt consolidation due to high credit card APRs but recognizes it doesn't address the underlying behavioral issues that lead to debt accumulation.
"I am considering it just because the APRs on the credit cards are so high and brutal. But again, look, it doesn't fix your behavior. How did you get here again? How'd you get here again?"
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The couple purchased a house without seeing it prior to signing the closing papers.
"So, we bought our house and never saw it. We saw it an hour before we signed our closing papers."
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The speaker doubts the projected value of their recently purchased house, suggesting that internal renovations are less impactful than the land itself, especially given the property is on a third of an acre.
"I highly doubt that. Well, so when we bought the house, everything was original from 1981. The internal renovations of houses aren't doing as much these days anymore. It could help a little, but it's it's really the land. The land It's on a third of an acre. Well, I know I'm seeing the values of it."
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The speaker predicts that in the current buyer's market, an overvalued house will lead to a longer time on the market, psychologically deterring potential buyers.
"We're in a buyer market, not a sellers market. You do not have the say in this. Like, you can market there. That likely being overvalued is actually going to hurt you worse because you're going to get less people making offers, meaning you're going to be on the market longer, meaning psychologically people start seeing something wrong with the house and they see it being on the market for like more than 6 months and all of a sudden no one's going to be even seeing your house cuz they're going to see think something's wrong with it."
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The couple has made a contingent offer on a new home, which is dependent on their current house being under contract.
"So, it's a contingent offer. Contingent on once our house is in contract, then the seller accepts our offer."
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The speaker criticizes the couple for purchasing a larger home before they can afford their current lifestyle, citing significant recent spending on dining out and shopping.
"You upgraded home before you could even afford your own lifestyle. Going out to eat itself was nearly $700. It's like unknown shopping was $1,300."
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The couple is currently on an FHA loan and plans to make a contingent offer on another property using another FHA loan, with the down payment sourced from the equity of their current home.
"So, we're on an FHA loan right now. Yeah. And they want us to put in a contingent offer using another FHA loan and then using the equity from the sale of our house as a down payment for that house."
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The speaker warns the couple about potential capital gains taxes on their home sale, as they have not lived there for the required two years.
"And then you also get any capital gains. By the way, if you do make profits, you haven't lived there for 2 years. Yeah. Capital gains. Get ready. Nom nom nom. It's going to get you. Did you know that? Were you expecting capital gains? No."
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The couple's emergency fund was drained before their move, and it was not fully funded.
"We really suggested like you did and it was drained before you moved. We were just trying to basically flee. But you didn't have a fully funded emergency fund. Not fully funded. No, it was started."
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The speaker is attempting to pay off debt using the snowball method, paying more than the minimum on lower balance cards to accelerate payoff, despite a high 30.24% interest rate.
"30.24% interest rate. And then I was trying to do the David Ramsey method, the snowball. Pay off the lowest one first. So I was throwing any extra like instead of making a monthly payment on a balance that's $240 or not minimal payment that if it's $30, I'm paying 60 or 100 trying to get those lower cards paid off first."
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The speaker notes a pattern of the house falling apart, citing issues with the roof, porch poles, and walls in their previous California residence.
"So, that one we got prior to moving. Um, the house that we're living in California was actually falling apart around us. Like, literally. Okay. It seems to be a no. ongoing pattern. Yeah. Um like roof was falling apart. Um the porch poles falling apart. Um walls falling apart. Like just everything was falling apart."
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The speaker questions the decision to take 11 years to pay off renovations on a house that is not owned by the individual.
"But 11 years to pay off those renovations. I don't it's it'sn't even your house."
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The speaker points out that a loan will take 15 years to pay off due to high interest rates, and consolidation loans also carry high rates.
"15 years to pay off. And like the consolidation loans are high interest rate anyway."
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The speaker states that the individual has not paid more than the minimum payment on any of their credit cards.
"You haven't paid more than the minimum payment on any of these cards. You haven't got to those ones yet. I said on any of the cards so far."
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The speaker questions the justification of eating out during a trip to Tennessee to visit a dying grandfather, suggesting that it was an unnecessary expense given their financial situation.
"And part of that eating out was us going to Tennessee. We did spend, I think, like $200 eating out in Tennessee. You I don't care. Don't go to Tennessee. What are you talking about? You're my husband's grandpa was dying, so we went to Tennessee and we ate out cuz we were in a hotel."
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The speaker expresses a desire to break a generational cycle of debt for the sake of their son.
"And it's generational. And I want to break this. for my son."
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The speaker clarifies that the debt consolidation loan was intended to pay off credit cards and achieve debt freedom, but this goal has not been met.
"The whole idea was debt consolidation loan. Pay off the credit cards, get debtree, and that's not a free. Okay. Not debtree, paying off the cards and getting rid of them."
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The husband's truck loan has a current balance of $26,000, with a total monthly payment of $500.
"This is my husband's truck. What's the current balance? 26. We pay We do a split payments on it. We do 250 twice a month. Oh, $500 payment on a monthly basis."
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The truck is valued at $16,425, while the loan balance is $26,000, indicating a significant negative equity.
"Yo, 26. What do you think it's worth? Maybe 25. Okay, it's worth $16,425."
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The speaker estimates that paying off $80,000 in bad debt at the current rate will take 160 months, or 13 years.
"80,000 of bad debt. 160 months. 13 years. Pretty brutal. Okay, a couple options."
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The speaker suggests that with an additional $500 net income per month from the husband, the debt payoff timeline could be reduced to approximately seven years.
"If we do that plus an extra $500 a month net from the husband uh that I mean with that that gets us maybe down to seven years and that's okay."
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The speaker suggests that if the debt cannot be paid off within 8 years, bankruptcy may be a potential consideration.
"But either way, if you cannot finish this in 8 years, I can also consider bankruptcy potentially."
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The speaker outlines a plan of extreme financial sacrifice, eliminating all non-essential spending and activities, to ensure a financially secure future for their child within 10 years.
"No trips, nothing fun, no paying for other people's nothing. It is sticking down to the grind. And it's just it's to sacrifice for the kid cuz by the time the kid's 10, going to have an incredible life and he's going to know nothing but success and stressfree financially."
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The speaker suggests that any annual bonuses should be immediately applied to debt, which could accelerate the payoff to approximately 6 years.
"Would you recommend like bonuses when I get those once a month? Yeah. Throw it right to death. Okay. Once a month. You said once a year. Sorry. Yeah, once a year. It accelerates the process as well. Maybe we get this down to 6 years."
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Upon achieving the 6-year debt payoff goal, the speaker advises building a six-month emergency fund.
"And 6 years is very attainable. Then a fully sixmon emergency fund is what you do."
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The speaker assigns a financial health score of 1 out of 10 due to $80,000 in bad debt and numerous credit cards, noting the absence of collections.
"Debt. Uh this debt's brutal. This is so many cards. Yeah, $80,000 of bad debt. Mortgage. This is no collections or anything. So I'll give you a one out of 10."
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The speaker assigns a score of zero out of ten for the emergency fund, indicating it is currently non-existent.
"Emergency fund. Nothing right now. Zero out of 10."
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The speaker inquires about retirement savings, and the individual estimates it to be around $20,000.
"Retirement. What was it? 50. I think it's 20 20,000."
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Combining both individuals' financial situations, the speaker gives them a combined financial health score of 3 out of 10.
"I'd like you guys if you combine your both. I'm putting you at a three out of 10."
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The speaker notes that the couple is not in a strong equity position with their real estate, citing necessary repairs and a generally unfavorable situation.
"Real estate. Not really an equity position, rough living, bad things with the house, repairs that are going to need to be put into it. It's not great. Yeah."
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The speaker assigns a 5 out of 10 rating to the real estate, acknowledging the manageable interest rate and minimum payment, with potential for future profit if held long-term.
"Fine interest rate, minimum payment you can afford. I'll give you a 5 out of 10 cuz you're at least in a position where if you hold on to it and put a little bit of money into it, you actually might make some money a couple years."
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The speaker rounds up the overall financial score to 2 out of 10, one point higher than the individual's initial self-assessment.
"Round it up in financial score two out of 10, one point higher than you thought."
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The speaker calls out the individual's browsing for new couches as an 'addiction,' especially since they have an outstanding furniture bill and are not financially stable enough for such purchases.
"A couch buying addiction. What the does that even mean? I haven't. I have just been browsing and looking at couches, but she wants another one. I do want another one. Hey, hey, by the way, you haven't even paid off your last furniture bill. You're not going to go on a couch shopping spree. Just wait."
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