The Truck Is Gone

Ashley's husband is finally getting on board. They have two children, and she wants to stay home with them, but she makes more money than her husband. Dave isn't sure she can stay home right now.

QUESTION: Ashley in New York has been following Dave’s plan four a couple of years, and her husband is finally getting on board. They have two children, and she wants to stay home with them, but she makes more money than her husband. He makes $40,000 a year, and they have $90,000 in debt. She makes about $65,000 a year. Dave isn’t sure she can stay home right now.

ANSWER: I think you’ve got a huge mess with student loans, and it’s going to take you a little while to do that. I want you to be at home with the babies because that’s what you want to do as fast as you possibly can. You definitely need to sell the $20,000 car in order to make that happen. That gets your debt down to $70,000 at that point. Then you making $65,000 or something and being home some of the time—a lot of the time—you can pay off that debt in about a year. Then you’ll be home for the rest of the time.

I think you need to measure this out and maybe hit a middle ground with that with the idea that we’re only going to do that for about a year and a half or a year. Then we’re completely debt-free but the house, and you can live on his income. Oh, by the way, he needs to increase his income, too, doesn’t he? You don’t need a $20,000 truck to make $40,000 a year as a contractor. That’s crap. Bull! You need a $5,000 truck. So you have to get rid of the $20,000 truck. You’ve really got to get rid of that, and he’s really got to work to get his income up if you’re going to stay at home even after you get your debts paid off because you guys are used to making $120,000 or $130,000 a year, and you’re getting ready to drop that to $40,000. The truck is gone, and you’re going to work another year and a half to clean this mess up. Then when you get the mess cleaned up and you’re debt-free, you’ll be able to quit. But he’s got to get his income up in the meantime.