A man named Sean called into “The Ramsey Show” with a painful financial problem: he’s $40,000 upside down on a fifth-wheel RV he and his wife bought for $100,000.
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Sean explained that his wife used to be a travel nurse, so they financed the RV and lived in it for a while. But after deciding to settle down and buy a home, they went to sell the RV and realized how badly it had dropped in value. “We owe $80,000 on it right now and it’s currently worth $40,000,” Sean said.
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He said he tried private sales and talking to dealerships, but nothing came close to what they needed. Last year, a dealer offered $54,000, which would have left them $25,000 upside down. He turned it down, and the offer dropped even lower this year. “Then I went to go do it this year and they’re like, ‘Oh, we’ll give you 40,'” he said.
“That hurts,” co-host John Delony said. “But there’s not a quick other path.”
Sean said he and his wife make about $180,000 a year but have only $1,000 in savings. In addition to the RV loan, they're carrying around $25,000 in credit card debt and a $7,000 personal loan.
Co-host Rachel Cruze told him the best option is to sell the RV now and take out a loan for the $40,000 difference, then throw everything at that and the rest of their consumer debt. “I’d try to live on nothing. Beans and rice. Rice and beans,” she said, repeating Dave Ramsey‘s famous advice about living frugally.
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Delony called the RV a classic case of paying what Ramsey calls a “stupid tax,” while Cruze reminded Sean that vehicles lose value quickly. “Anything with motors and wheels is just all the way down.”
Sean admitted they justified the RV purchase by treating it like a home. But Cruze didn't sugarcoat it: “It’s a terrible investment. Real estate goes up, RVs go down.”
Both hosts encouraged Sean to learn from the experience. “Everyone does stupid stuff,” Cruze said. “But it’s kind of stupid to go back and redo stupid stuff over and over again. We don’t want to do that.”
Delony said that if they buckle down for 18 months, they could wipe out their debt completely. “Y’all can do it. Y’all will be debt-free in no time. Let’s get after it.”
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