20-Year-Old Worried About Job Loss After Secretly Sleeping at Work to Cover Car Loan and Debt

A young caller to The Ramsey Show said he was afraid his employer would discover he has been sleeping at his workplace because he cannot afford an apartment.

NEED TO KNOW

• A caller into The Ramsey Show, David, described his financial troubles to experts George Kamel and Jade Warshaw, explaining that he was secretly sleeping in his office while trying to find a new apartment.
• The Wisconsin door-to-door salesman said that more than a year and a half ago, he bought a Lexus with a loan carrying a 29% interest rate, leaving him with a $650 monthly car payment.
• Warshaw and Kamel both urged him to secure housing before focusing on debt repayment or emergency savings.

A 20-year-old man is struggling to afford housing while a car loan with a 29% interest rate takes a large bite out of his monthly income.

During a call to The Ramsey Show, David explained that his finances worsened after leaving his mother’s home. He said he was able to stay with someone else for a time, but eventually had to leave that arrangement and became homeless.

He then said that, without a place to live, he had been sneaking into his office to stay warm while he looks for shelter.

“That is, of course, the good and bad thing with me being so young that I don’t have a support system,” he said. “I’m blessed enough to have this to be able to wanna change. So that’s why I’m kinda crying for the help of, you know, I need some help.”

David also said his take-home pay ranges from $3,200 to $4,600 a month. When Jade Warshaw and George Kamel asked where the money was going, he said that about a year and a half ago he financed a Lexus at 29% interest, which left him with a $650 monthly payment. “At the time that I got the car, I was not in this agreement,” he said, referring to his current financial position.

Warshaw’s first response was that the car debt would be the top priority to eliminate. “That’s gonna be the number one thing on our list that George and I are gonna help you get rid of,” she said.

She then asked where the rest of his money was going beyond the car payment. David explained that, as a door-to-door salesman, a large share of his income went to gas, sometimes nearly $1,000 a month, and that he had also been trying to pay down debt, including an overdue phone bill that had been sent to collections.

Kamel and Warshaw’s immediate advice was for David to find housing before worrying about anything else. They told him to pause his debt-payoff plan and focus on getting a place to live right away. “Four walls first, which is housing, transportation, food, and utilities. You cover that before anything else,” Kamel said.

“Then if there’s money left over, which there should be, we can make minimum payments on our debts,” he continued. “If there’s extra money beyond that, let’s throw extra at the debts. If you do it in that order, you’ll actually have a place to live, and you can fight this thing.”

Warshaw also said he needed to be ready to “say goodbye” to the Lexus. “We cannot have this car.”

Even so, David wondered whether it would be wiser to start building an emergency fund first.

Kamel disagreed. “First things first, my friend. You’re putting the cart before the horse. The very first thing you need is four walls. And then once you get in there, then we can put a thousand dollars aside.”

After those steps, David could begin getting current on his overdue bills and debts, including the car loan and a $1,500 credit card balance.

“We’re not touching [the credit card] right now,” said Kamel. “So just remember, off the phone, four walls, I’m looking for an apartment. By next Friday, I ought have something. And then from there, yes, stash away a thousand dollars and do it step by step.”