A woman named Nicole recently called into “The Ramsey Show” with hosts George Kamel and Ken Coleman, and her story raised a lot of eyebrows.
Nicole and her husband live in New York City and earn a combined household income of about $350,000 a year. Despite that, she admitted they are living paycheck to paycheck and somehow racked up $55,000 in credit card debt.
“I really didn’t have any credit card debt,” she said. “Then as soon as I started working, I started spending and now we’re about $55,000 in credit card debt and I don’t know how to get out of it.”
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High Income, Higher Spending
Nicole is a registered nurse and her husband is a firefighter. She brings in about $100,000, and he earns between $230,000 and $250,000 depending on overtime. But when Kamel asked her what caused her to feel like $350,000 wasn’t enough, Nicole didn't have a clear answer.
“Every month we’re just down to like 50 cents left in our account,” she said.
That didn’t sit well with the hosts. “Where is $30,000 going every month, even in New York City? I mean, even Congress would have a hard time spending all this money,” Kamel said.
Nicole said they own their home and listed basic expenses like groceries, household bills and mortgage payments. Their mortgage is $3,000. She estimated household expenses are around $7,000 monthly, and they pay $2,000 in credit card minimums.
Then there’s her husband’s job. Nicole explained that he pays about $1,000 a month just to work, between gas and “house tax,” a shared expense at the firehouse to cover meals and supplies. That stunned the hosts.
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“What kind of job costs you $1,000 a month to work there?” Kamel asked. “It’s not a fraternity that he signed up for. It’s a job.”
She also has $30,000 in student loans and a $27,000 car loan, pushing their total debt over $110,000. Despite all of this, Nicole said, “Both of us, we don’t shop. We just do basics. We’re just living basically.”
“I don’t know anyone who lives basically making $350,000 who still goes $60,000 into credit card debt,” Kamel said. “I just don’t believe that.”
A Way Out
The hosts emphasized that the problem isn't income, it's lack of control. They walked Nicole through the importance of making a strict, written monthly budget.
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“You’re going to list out your income for the month… then you’re going to list all of your expenses beneath that,” Kamel said. “Every single extra dollar is going to be going toward your smallest debt.”
Nicole said she has already made some progress. “So far, I’ve paid off three of the credit cards since I started listening to you guys,” she said.
Kamel encouraged her: “Making $350,000, you can knock out 120 grand in debt really quickly.”
But it's going to take sacrifice. “You guys have to get really good at saying no. No to more debt, no to eating out, no to the luxuries that you’re used to. You’re going to feel like you’re living in college again.”
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