Ryan, a recent caller of the Dave Ramsey Show, explained that he was in “a little Jam” and – while he was trying to consolidate his loans – he did not qualify himself and now he does not know how to withdraw from the overwhelming debt that he has accumulated and the bad credit he has now.
Ryan has a base salary of $ 140,000 per year, although it generally earns $ 180,000 to $ 220,000 per year-that is to say until it has a reverse. Ryan underwent a work injury that left him for a year and a half and on the accounts of the compression of the workers. The result is that the events of his life now mean that he owes a combined total of $ 181,000 on his credit cards, personal loan, car loan and student loans, in addition to his mortgage of $ 767,000. The appellant has a stepson and a girlfriend who lives with him and earns between $ 60,000 and $ 70,000.
Ramsey tends to criticize the debt and this time is no exception: “I speak to a single who earns $ 180,000 and owes $ 180,000,” he observed, according to frank advice on how the appellant could repair his situation.
Unfortunately, the appellant did not seem too interested in following these tips.
Ramsey was dismayed to see how the appellant had, in particular in relation to the quantity he wins; The appellant’s debt and his salary are much higher than most people have. However, the caller managed to widen in a significant consumption debt. But statistics tell us that it is no different from many other Americans.
While the Federal Reserve Board claims that the Americans collectively owned $ 18.20 billions of dollars in the first quarter, the experience data published in January 2025 show that consumers have an average of $ 105,056. The appellant, with his mortgage and other debt, owes a combined total of $ 947,000 – nearly a million dollars.
As the Bureau of Labor Statistics shows, the weekly median salary is around $ 1,194 or $ 62,088 per year, which means that the appellant earns almost three times this amount and that you still cannot get his finances in order, leaving Ramsey to declare: “You have given your life and the way you recover it is that you will have to abandon things.”
Ramsey made several suggestions to the caller, in particular:
-
Sell your house – assessed at more than a million dollars
-
Sell the expensive car on which the appellant is currently paying payments
-
Reduce spectacular and aggressively debt expenses
However, the appellant was quick to reject these suggestions with rationalizations. He did not want to sell the house, for example, because he did not have enough credit to buy a new one. And he did not seem willing to reduce his expenses, instead on the defensive and to tell Ramsey that he had already reimbursed a few thousand in recent months.
Rmasey was not very impressed by that, saying to the caller: “Sell your car, sell your stupid home. In you gather another later, when you bring your act together. But you don’t want pain, you don’t want to sacrifice.”
Read more: Americans are a “revenge savings” to survive – but millions receive only 1% of 1% on their savings. Here’s how to earn 280% more quickly on your money
While the appellant was interested in a consolidation loan, Ramsey said it was the wrong approach-“it is mathematically impossible to take your way,” he said. Ramsey alternatives to sell the house or the car, or to live frugally, were all options that would make a significant difference to help the appellant reimburse what he should.
“Live on beans and rice and pay $ 140,000 a year on this debt, and you are without debt in a year and a half. You have absolutely no frightening life. You have lived as you did twice what you do and you walk, you walk by acting as if it was OK, and it’s not stupid.” Said Ramsey.
Although it does not mention it openly, the classic Ramey technique, the snowball method (as opposed to the avalanche method) could be useful here. This implies repaying the lowest debt of the balance first while paying minimum sales on your other loans, then going to the following lowest balance, then next and so on until you have paid everything you need, creating momentum as you go.
However, this approach forces you to make additional payments to your debt – ideally, the most important amount you can, as often as you can. The idea is that, although you can pay more interest in the long term, you strengthen your confidence in your ability to become without debt.
But regardless of the debit payment method you choose, you must always free as much from your budget as possible. “And it’s going to hurt. Make it hurts. But don’t hurt well,” warns Ramsey.
This means making aggressive budget cuts and other lifestyle changes such as:
-
Reduce fixed expenses by reducing a house or selling a car
-
Cut all non -essential expenses such as food and entertainment in your budget (at least temporarily)
-
Work more hours or get a parallel concert to devote more to your debt income
-
And although Ramsey himself advises and this caller could not get one, you could try to consolidate your loans in a single monthly payment and negotiate a lower interest rate
-
Set yourself a goal when you want to be without debt and follow your progress towards him
-
Develop a realistic budget with these things in mind and learn to live in these means
-
And finally, once you have reimbursed it, start putting money aside in an emergency fund to help you rebuild your finances and learn the secrets of the furtive rich
The reality here, as Ramsey pointed out, is that the original appellant has a substantial income, compared to the average. It should not be impossible for him to get out of the debt (in fact, Ramsey and the co-host of John Deloney did it), but he will have to adjust his lifestyle when he always has the option and before the amazing debt leaves him without any. As for why the appellant is not yet moving? Ramsey concludes: “When you hurt yourself enough, Ryan, you will understand that. But you don’t do enough trouble.”
Money should not be complicated – register for the free Moneywise newsletter for funding advice and the news you can use. Join now.
This article only provides information and should not be interpreted as advice. It is provided without guarantee of any kind.
