Despite having a household income of $200,000, one couple questioned whether an $800,000 home was holding them back financially.
Jessica, 28, told “The Ramsey Show” that she and her husband have budgeted for years but continued to carry debt because the payments felt manageable. The couple owns a home worth $850,000 and owes $480,000 on the mortgage.
“We’ve always maintained debt,” Jessica said. She asked if selling the house, renting for a period, and using the equity to pay off the balance and rebuild savings was the right move.
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After reviewing the numbers, a personal finance expert Dave Ramsey rejected that approach. “Stop being a couple on $200,000 a year,” he said, responding to how income was handled with ongoing debt.
Jessica said their balance includes about $70,000 on a home equity line of credit, about $70,000 in two vehicle loans, and a $16,000 camping trailer. One vehicle has a monthly payment of about $700, while the other is about $600.
“You make a lot of money for it to break even,” Ramsey said, pointing to the gap between earnings and results.
Jessica also mentioned plans to move to Utah, though not for another four to five years. She said her husband’s parents live down the street and help take care of their child while she and her husband are at work, making an immediate move difficult.
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Ramsey said that it would not make sense to sell the house and rent it now. He warns Jessica that the house itself won’t cause problems and that without changing habits, the balance will likely be returned to pay off the loan.
co-host Jade Warsaw He added that higher incomes can create what he calls “skinny fat” finances, where things look stable on the surface but weaknesses remain underneath.
“Just because it looks healthy doesn’t mean it actually isn’t,” she said.
Ramsey said the couple can put $10,000 a month toward the loan and will pay it off in about 14 months. That plan calls for cutting discretionary expenses and selling unnecessary items, including the trailer, but keeping the house.
‘This process of 14 months of sacrifice, not everyone will be the same,’ Ramsey said, ‘Selling a house does not change behavior.
