How Do I Break The News To My Wife That We're Broke?

[Music] Brought to you by the Every Dollar app. Start budgeting for free today. >> I need some advice on how I can break it to my wife that we are broke and that we are $500,000 in debt. >> Wow. >> Why does she not know this? >> I take care of all of our finances. Um, she has a credit card that she swipes and doesn't have to worry about anything. Um, >> yes, she should. It's >> just something that I've taken advantage of and, you know, gotten us even deeper with not including her in this uh spending ordeal. >> Mhm. >> How long y'all been married? >> We've been together since we were 16 and we're I'm 26 and she is 25. >> You got married when you were 16? >> 10 years. No, we've been dating since 16 and we got married in 2022. >> She'd been married three years. Yes. You >> ran up a half a million dollars in debt in three years. >> Yes. >> What the crap did you buy? >> Well, I went from an income of 25,000 in 2022 to an income of 160 150,000 in 23. And then year to date for 25, I'm at 195,000 just myself. >> Yeah. That doesn't explain how you went a half million dollars in debt. your income. >> Your house too, Jim. Does that include your house? >> It does. >> How much do you owe on your home? >> 330,000. >> Okay. She knows that. >> Yes. >> Okay. And what is the other $170,000 in debt? >> You've worked hard to budget, plan, and protect your family's future, but behind the scenes, your personal info, like your address and phone number, is being bought and sold by strangers on creepy websites. That leaves you wide open to problems like scams or fishing attacks, which is why I use and need Delete Me. Delete Me helps you take control of your privacy by removing that info and making it stay gone. And right now, you can get 20% off at jointedeme.com/ramsey with code Ramsey. >> What is the other $170,000 in debt? >> We have two vehicle loans and majority of the other debt is credit cards. Okay. So, the two vehicle loans amount to what? >> My vehicle is 50,000 and hers is 35. >> Okay. And she's aware of those. >> She is. >> Okay. And and so >> which those are just reoccurring payments that >> I know. I know. But she's not it's not like she The way you describe this is like there's a half million dollars in debt my wife doesn't know about. Yes, she does. It's about 80,000 of credit card debt that she may not understand is floating out there, >> but she's been running running her credit card around like she's in Congress, so she probably has a clue about that, too. >> She may not think it's 80. She may think 15 to 20. >> Okay. So, you guys are you guys are you said 26 years old. >> Yes. >> Okay. So, let's re let's fra reframe this a little bit then. Okay. Uh, what you're really asking is how do I get my wife to get on a plan because our current plan sucks. >> Correct. >> Okay. Not how do I tell her about a half million dollar in debt she doesn't know. Cuz that's not true. She does know about it. Yeah. >> All right. So, what I would do is say this. Say, "Hun, I gave this a shot. I'm a new husband. I didn't know what I was doing. But I am getting very afraid with our current trajectory that even though we make a lot of money that we're going to be broke and we are really broke right now making $190,000 a year. We have car payments, we have house payments, we have credit cards are out of control. And you and I are going to have to work together to get on a different system than the one we've been using. Because the one we've been using, which is me just doing letting you do anything you want to do and me not telling anybody anything, those are two really bad ideas and we're going to stop doing that. >> Yeah. Yeah. I'm waving the white flag and I'm not I'm not doing this anymore. I can't and I'm sorry I haven't told you about the credit card. Like >> this is everything. >> I don't think you were deceiving someone. Uh I think you're concerned that you you've never told her no and now you get the opportunity for her to be an adult and tell herself no. >> Correct. Yes. How do you think that's going to go? >> She's easygoing. I think it'll go okay. Um, it's just handing the ball over to someone else. >> No, we're not handing the ball over to somebody else. The two of you are going to sit down together like two grown-ups instead of daddy and daughter. >> Okay? >> You're like a daddy spoiling his only daughter. Instead, you're going to say, "Honey, we're going to sit down like two adults now, and here's how much money is coming in, >> and here's what we owe on the house, and here's what we have to pay on these stupid cars, and we make $190,000 a year, and we're broke because we're out of control. We don't have a system, and we buy everything in sight. So, we together need to figure out how we as two grown-ups are going to exist on freaking 200 grand a year at 26 years old." W. >> Well, that's just my income. >> What does she make than hers? >> What does she make? >> Uh 55,000 a year. >> Well, then let's try it again. 100 or $245,000 a year. We make a quarter of a million dollars a year and we are broke. >> So, because our system sucks so bad, >> we start on Xing out some of this debt. >> I recommend that the two of you sit down and have a come to Jesus meeting tonight and say, "Here's what our total income is per month. here's what we have to spend on the house. Here's what we have to spend on these cars. We have this much in credit card debt. And we have to buy some food and lights. Let's figure this out. And all of a sudden, you guys are going to go, "Holy crap, we're out of control." Both of you are going to have that moment. You've already had the moment. You're just trying to figure out how to navigate the fact that you're not doing it by yourself anymore. Dude, that was a bad idea to start with, and we're stopping that right now because you get two benefits. One is you get another brain involved to help you. Uh the other thing the benefit you get is you don't have to carry all the stress by yourself. Yeah. Oh, and the other benefit is she suddenly is as a grown-up is going to buy into a future plan. A plan that takes us to a solid future versus I just do whatever I want to do. >> Yeah. And the good thing is Jim, you guys are going to see as you start mapping this out. It's going to be Yeah. It's going to be fast. I mean like after taxes >> Okay. >> If after taxes and you guys say you lived on 90,000, you know, that frees up. It's like oh my gosh. I mean you you debtree in a year. >> Yeah. $110,000 put towards this debt. You could be completely filed for 2024. >> What? What' you say? >> Okay, put that on the list. >> File my taxes for what do you owe there? What What do you owe there? What will the tax bill be? >> I just spoke with the tax lady today. Um I paid 25,000 in 2023. So I'm reckoning. >> You've not set any money aside for your taxes? Are you 1099 or something? >> I am 1099. >> Okay. And you've not done any quarterly estimates? >> I have not. >> Your tax lady sucks. >> How in the world are you making that kind of money and not doing quarterly estimates? >> What? >> She did and I moved on to another tax lady. >> Oh, she wanted to do quarterly estimates. >> No, she didn't give me any advice. Nowhere to go. Just kind of send me what your income is and I'll tell you what you owe. >> Okay. Yeah. Go to Ramseyolutions.com and you can find one of the endorsed local providers for taxes. The Ramsey trusted people to help. You need to be doing quarterly estimates. But now you got another 25,000 or 40,000 or whatever it is. It's on this list of things you've got to address. But dude, you got to start you seven. Yeah. Yeah. You guys can start knocking this out, Jim. So, what I would do is sit down tonight. You guys need to list out all of your debt. I would include the IRS bill in that and that'll be first. Then list out every credit card and what you guys owe on it. Cut them up. both car loans, cut them up, be done with it, and you start working your way the smallest debt first. Well, the IRS is going to be paid, so get that paid first. >> This is not you telling your wife what to do. No, >> this is you saying, "Honey, join me in being a grown-up >> and living on less than we make." >> And that you're not going to do this by yourself anymore, Jim. Tell her that that every month we're going to sit down and reook at this plan. >> I need some help. I need your help together. >> Yeah. This is our future together and we don't have one right now because the way we've been doing this is straight up stupid and it's got to stop. And that's okay. Just wave the white flag like Rachel said because you guys are young. Surrender. You got plenty of time this. Yes. >> You make a lot of money. >> You guys could be multi-millionaires. >> You're going to be okay. You start this. Yes. >> If you get in control of this and just, you know, quit kicking the can down the road. Create your free every dollar budget today. The simplest way to budget for your