On an episode of The Dave Ramsey Show, a concerned caller asked a personal finance expert Dave Ramsey What to do after realizing your financial situation is unsustainable. Here’s what Ramsey advised him.
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One caller, Olivia from San Diego, revealed to Ramsey that her financial situation was unsustainable and asked if she, her husband, and their two children should move to a less expensive home and leave everything behind, including their church and family, to build wealth. Olivia explained to Ramsey that they had just gotten out of debt. Before giving her advice, Ramsey asked the caller to reveal how much she and her husband earned.
Olivia told Ramsey: “My husband made $70,000 last year and I work on his days off. » She added: “I made $30,000 last year. » That gives them an income of $100,000 in San Diego, but the caller mentioned they wanted to move to Arizona. According to information from Salary.com, the cost of living in San Diego, California is at least 39.7% higher than in Phoenix, Arizona. The median cost of a home in San Diego is 101% higher than in Phoenix, Arizona. However, Azcentral reported that even in Tucson, Arizona’s city with the lowest cost of living, a household of four would need to earn an annual salary of $215,000 to live comfortably. Therefore, moving to Arizona may not make their financial situation more stable and could add more stress, as relocation is considered one of the most stressful events in life.
Ramsey responded to the caller by saying, “The way you asked the question, the way you formed your sentence. You don’t want to leave. The Appellant confirmed that she did not want to leave and was only considering leaving for financial reasons. Olivia explained that she worked hard to keep her daughter in a private Christian school, which was only possible because of the support of their family.
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Ramsey sympathized with Olivia and acknowledged that it was “heartbreaking to be away from your grandparents,” but added that Olivia had decisions to make. He explained, “You’re either going to change your career to be able to handle it, or you’re going to make different choices, like not going to private school.” Because their financial situation is unsustainable, Ramsey explained that something has to change. Olivia and her family will have to make tough choices. Ramsey commended Olivia for recognizing that their financial math doesn’t work, saying, “What you’ve figured out is that the math doesn’t work, and that’s very wise.”
According to Ramsey, Olivia has three choices: take her daughter out of private school, change careers, or move to a completely new state. Ramsey advised Olivia, “One of those three things, and all three are painful. Choose your pain, because it will choose you if you don’t.” Olivia and her family need to make some decisions before they are painfully forced upon them. Ramsey also advised Olivia and viewers that it’s crucial to have some sort of life insurance coverage to deal with unexpected events when they happen.
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This item Dave Ramsey Advises Woman to “Choose Her Pain, Otherwise It Will Choose You” When She Realizes Her Financial Situation Is Unsustainable originally appeared on Benzinga.com
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