Did you know the average American has about $90,460 in debt? This can include car notes, student loans, credit card debt, mortgages, and personal loans — and it can be a burden to get out from under.
That's where Dave Ramsey inserts himself. He's a personal finance personality who hosts The Ramsey Show, a radio program that everyday people can call into for advice on how to personally tackle their debt.
"The mortgage is about $210,000," the caller said after Ramsey prompted them to break down their loans. "[Then] $335,000 is in student loans — we both have advance degrees — and the rest is in credit cards and personal loans."
About $136,000 is owed by the couple in credit card debt, $44,000 is owed in personal loans that they did not explain further, and $35,000 is owed in car loans.
Seemingly shocked, Ramsey asks, "How old are you?" The caller responds that they are 29 and their partner — who is the main one contributing to the credit card debt — is 32.
"I think it's one of those things where [you're] just making really poor financial decisions and thinking you'll be able to pay it down as you go and it doesn't happen," the caller said in regards to their situation.
As for their degrees, the caller says their partner has a master's in business and they have an advanced degree in policy. Now, they both work government jobs and bring in a joint yearly income of $230,000.
"Is there recognition on both of your parts about how absurd this situation thing is?" Ramsey asked the caller, and it's not until they confirm that he agrees to help. "You're scared and you should be," he continued. "Your lifestyle is considerably above your extremely good income and has been for a long period of time. And so you've gotten used to spending like you're in Congress."
Then he lays down the plan on how they can cut back and start paying thing off: "This is going to be very emotional for y'all," Ramsey warned. "You've been making $210,000, spending $310,000, [and] I'm getting ready to put you on [a budget] of $30,000."
"You're not going to see the inside of a restaurant unless it's your extra job. ... This is how humbling this is going to be."
The host goes on to explain that getting rid of their debt is possible with dedication, but that the couple must be willing to seriously cut back on spending and stop indulging in luxury items if they want to get their finances on track.
People in the comment section of the video were stunned and could hardly imagine how the couple was able to process such a burden weighing over their heads.
And those outside of the States were shocked to learn how much debt people can get into by seeking higher education.
Meanwhile, others argued whether Ramsey had the right approach when trying to help the couple. Some felt that his straightforward opinion on them living above their means was rude and may discourage others in need of help from seeking it in the future. But not everyone agreed, and that camp felt now was the time for tough love.
This particular call took place in an episode of Ramsey's show that aired about four years ago, and it's unclear what happened with the couple's finances since. You can watch the full episode with the caller here.
