A man from Philadelphia called into “The Ramsey Show,” overwhelmed by debt and ready to file for bankruptcy, despite earning $180,000 last year. Hosts George Kamel and Jade Warshaw were stunned.
“America just lost all empathy here,” Kamel said after hearing the caller’s income.
Making Six Figures, Still Drowning In Debt
The caller, Peter, said he makes $126,000 a year in base salary but pulled in about $180,000 with overtime. Still, he felt buried under debt and unsure how to climb out.
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When asked how much he owed, Peter first said “a little over $25,000,” but that number grew quickly. He eventually revealed he had more than $50,000 in total debt, made up of a car loan, personal loan, pension loan, credit card debt, hospital bills, and a gas bill that’s already gone to collections.
Peter admitted he has no formal budget and spends freely, especially on fast food. He also supports his three children without a court order, giving money as needed. He sends $600 monthly to help his 20-year-old daughter, who's in college.
The Real Problem: No Budget
Warshaw and Kamel emphasized the issue wasn't income but poor financial habits.
“It’s not the kids,” Warshaw said. “It sounds like you’re overspending in other areas.” Peter agreed. “I’m not going to lie, [I am] misspending,” he said.
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The hosts told him that with $130,000 in income, he should be able to live on $100,000 and use the rest to aggressively pay down debt.
“If you throw $2,500 a month at [the debt], you’re done in 22 months,” Kamel said. “And we avoid bankruptcy, which is going to implode our life for the next seven years.”
A Path Forward
Peter said he was too stressed to even think straight. The hosts encouraged him to take one simple step: write down a budget.
“Even if it’s scary, even if you go, ‘Ugh, I don’t like what I see,’ at least it’s not the boogeyman and all the unknowns,” Kamel said. “I’d rather you be scared of the facts than the unknowns.”
Kamel warned Peter that bankruptcy could hurt his ability to get jobs and rent apartments for years, saying it would “implode [his] life for the next seven years.” Instead, he urged him to go back through his bank statements to get a better picture of where his money is actually going.
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Peter also mentioned he was using Robinhood to invest small amounts. Kamel's advice: delete the app for now. “We’re not really building any wealth over here. We’re just wasting time,” he said.
Encouragement, Not Shame
Despite the tough love, the hosts encouraged Peter and reminded him that he has what it takes to fix his situation.
“If someone's willing to pay you $130,000 a year, you are smart enough to make a budget and get out of this debt once and for all,” Kamel said. “But first, you've got to stop going into it. Debt is not a shortcut. It's not the answer, man. You are.”
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