On Wednesday, a 65-year-old caller to The Ramsey Show revealed he and his wife were starting from scratch financially, with little savings and $137,000 in debt, but are determined to follow financial expert Dave Ramsey's steps to recover.
Couple Faces $137,000 Debt With Minimal Retirement Savings
The caller, Mark, told Ramsey and co-host George Kamel that he and his wife have minimal retirement savings $10,000 in a 401(k) for his wife and a few thousand for himself, and recently completed their first $1,000 emergency fund.
Their total debt includes a mortgage, a car loan, and credit cards.
Ramsey Advises Focused Debt Payoff And Frugal Living
Ramsey advised Mark to focus on paying off unsecured debts first, leaving their bi-weekly mortgage plan in place.
"$2,000 a month at least needs to be going on your debt, not counting your house,” you can be debt-free in a year, Ramsey said. He emphasized frugal living, recommending, "I want you on beans and rice," to maximize debt payoff.
George added, "The best time to plant a tree was 20 years ago. The next best time is today. I'm glad you're… starting to plow away at this debt."
Ramsey projected that by their early 70s, the couple could be mortgage-free with a small nest egg of $200,000 if they follow the plan diligently.
High Earners Struggle With Debt Discipline Despite Financial Success
Last month, caller Nick admitted that despite following Ramsey's Financial Peace University for 17 years and saving nearly $400,000, he struggled to enjoy life with his children.
He wanted to buy jet skis and quads to create memories, but their ultra-frugal mindset and fear of debt made it difficult.
Ramsey focused on Nick's $25,000 tractor loan, telling him he had "flunked FPU" for financing it, even at 0% interest with a government grant.
He advised Nick to pay off all non-mortgage debt and restore his emergency fund before resuming Baby Steps four through six, which include retirement investing, saving for college, and paying down the mortgage.
Similarly, a Reddit user shared that she and her husband had started their Baby Steps journey in November 2023 and paid off $37,900 in under three years.
Their progress relied on disciplined money habits and a husband's income boost from $70,000 to $120,000, allowing them to clear the remaining $10,000 of debt and secure their financial future.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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