A recent call The Ramsey Show posted on TikTok highlighted how quickly even a solid income can disappear under the pressure of debt and overspending. Alyssa, a mental health therapist, called to discuss her family’s financial struggles after recently remarried. Despite their combined income of $130,000 – well above the national average from $80,610 in 2023 – Alyssa and her husband are barely making ends meet. With only $3,000 in savings and no contributions toward retirement, they are stuck in a cycle of living paycheck to paycheck.
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They owe $60,000 on cars, have a $240,000 mortgage, and are burdened by $140,000 in student debt — $90,000 from Alyssa’s education, and $40,000 from her husband, who has little to show for it. “Who’s the lawyer?” Dave Ramsey asked, pointing out how enormous the debt seemed. Alyssa chuckled and replied, “I’m a mental health therapist.”
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Ramsey’s co-host, George Kamel, wondered why they hadn’t aggressively tackled debt yet. Alyssa explained that fear holds them back as they try – especially worrying about having enough for her 9-year-old daughter. Alyssa, a self-employed person, and her husband, who works in construction, face income instability. She worries that catastrophic spending will wipe it out.
That didn’t sit well with Ramsey, who immediately gave chase. “You make $130,000 a year, and you’re incredibly broke. I’m worried about that. You drive cars you can’t afford, and you have a lifestyle that is absolutely stupid.”
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“And that has nothing to do with a 9-year-old,” Ramsey added. “What does she need that costs you thousands of dollars a month?” Alyssa admitted that it wasn’t the cost of the child, but rather a “just in case” mentality.
But while Ramsey’s blunt advice may sting, Alyssa’s situation isn’t all that unusual. According to a 2023 Payroll.org survey, 78% of Americans live paycheck to paycheck, an increase of 6% from the previous year. Earning a good income is no longer a guarantee of financial security, especially when debt and overspending become prevalent.
“You guys have no idea where this money is going,” Ramsey noted, urging Alyssa to look at their situation as if she were counseling another family. “If I hired you to look at this family objectively, you’d tell them they need to sell some cars. You don’t go on vacation because you’re broke.’
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Ramsey then made Alyssa face a hard truth. “You have student debt that hangs around so long you think it’s a pet,” he said. He has laid out a path for them to be debt-free in two to two and a half years – if they make serious sacrifices. That means no vacations, selling at least one car, cutting back on unnecessary expenses and finally facing the uncomfortable reality of their financial choices. “It won’t be comfortable,” Ramsey said. He added: “It will prepare you for a great life for the rest of your life.”
As harsh as Ramsey’s advice may be, it offers a real opportunity for a better future. As uncomfortable as it may be, if you make sacrifices now, you can achieve financial freedom.
A financial advisor can be the next step in getting things on track. They can guide you through paying off debt and investing for retirement, so you can make decisions that benefit your current and future self.
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This article Couple earns $11,500 a month but has only $3,000 saved and no pension – Dave Ramsey slams ‘asinine’ lifestyle: ‘You’re broke as hell!’ originally appeared on Benzinga.com
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