Ryan, a recent caller to The Dave Ramsey Show, explained that he's in "a bit of a jam" and — while he tried to consolidate his loans — he didn’t qualify and now he doesn't know how to get out of the crushing debt he’s racked up and the poor credit he now has as a result.

Ryan has a base salary of $140,000 per year, though he usually makes anywhere from $180,000-$220,000 per year — that is until he had a setback. Ryan had a workplace injury that left him out of work for a year-and-a-half and on worker’s comp payments. The result is that events in his life now mean he owes a combined total of $181,000 on his credit cards, personal loan, car loan and student loans, in addition to his $767,000 mortgage. The caller has a stepson and a girlfriend who lives with him and makes between $60,000-$70,000 herself.

Ramsey tends to be critical of debt and this time was no exception: "I'm talking to a single guy who makes $180,000 and owes $180,000," he observed, following with blunt advice for how the caller could fix his situation.

Unfortunately, the caller didn't seem too interested in taking this advice.

Don't miss

Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

A cautionary tale in lifestyle inflation

Ramsey was dismayed at how much the caller owed, especially relative to how much he makes; both the caller’s debt and his salary are far greater than the amount most people have. Yet, the caller managed to dig himself into significant consumer debt. But stats tell us, he isn’t unlike many other Americans.

While the Federal Reserve Board says Americans collectively owned $18.20 trillion in the first quarter, data from Experian published in January of 2025 shows that consumers on average owe a total of $105,056. The caller, with his mortgage and other debt, owes a combined total of $947,000 — close to a million dollars.

As the Bureau of Labor Statistics shows, the median weekly salary is around $1,194 or $62,088 per year, which means the caller earns nearly three times that amount and still can't get his finances in order, leaving Ramsey to declare, "You've given your life away and the way you get it back is you're gonna have to give up some stuff."

Story Continues

Ramsey made multiple suggestions to the caller, including:

Selling his home — valued at over $1 million Selling the expensive car that the caller is currently making payments on Cutting spending dramatically and aggressively paying down debt

However, the caller was quick to dismiss these suggestions with rationalizations. He didn't want to sell the house, for example, because he didn't have good enough credit to buy a new one. And he didn't seem willing to cut back on his spending, instead going on the defensive and telling Ramsey he'd already paid back a few thousand over the past few months.

Rmasey was very unimpressed by this, telling the caller, "Sell your car, sell your stupid house. Get you another one later, when you get your act together. But you don't want any pain, you don't want to sacrifice."

Read more: Americans are ‘revenge saving’ to survive — but millions only get a measly 1% on their savings. Here’s how to quickly earn 280% more on your cash

How to get out of debt

While the caller was interested in a consolidation loan, Ramsey said this was the wrong approach — "It's mathematically impossible to borrow your way out of debt," he said. Ramsey's alternatives of selling the home or car, or living frugally, however, were all options that would make a meaningful difference in helping the caller pay off what he owes.

"Live on beans and rice and pay $140,000 a year onto this debt, and you are debt free in a year and a half. You have absolutely no freaking life. You've been living like you make twice what you make and walking around, strutting around acting like it's OK, and it isn't OK. It's stupid," Ramsey said.

While he didn’t overtly mention it, Ramey's classic technique, the debt snowball method (as opposed to the avalanche method), could come in handy here. It involves paying the lowest balance debt off first while paying minimum balances on your other loans, then moving into the next lowest balance, then the next and so on until you've paid off all you owe, building momentum as you go.

However, this approach requires you to make extra payments to your debt — ideally, the largest amount you can, as often as you can. The idea is that though you may be paying more in interest in the long term, you’re building confidence in your ability to become debt-free.

But regardless of which debit payoff method you choose, you still need to free up as much of your budget as possible. “And it’s going to hurt. Getting well is going to hurt. But not getting well is going to hurt more,” cautions Ramsey.

This means making aggressive budget cuts and other lifestyle changes such as:

Reducing fixed expenses by downsizing a home or selling a car Cutting out all non-essential spending like food and entertainment from your budget (at least temporarily) Working more hours or getting a side gig to devote more of your income toward debt And though Ramsey himself advises against it and this caller couldn’t get one, you could try to consolidate your loans into a single monthly payment and negotiate a lower interest rate Set a goal of when you want to be debt-free and track your progress towards it Develop a realistic budget with these things in mind and learn to live within these means And lastly, once you’ve paid it off, start setting money aside in an emergency fund to help rebuild your finances and learn the secrets of the stealthy wealthy

The reality here, as Ramsey pointed out, is that the original caller does have a substantial income, relative to the average. It should not be impossible for him to get out of debt (in fact both Ramsey and co-host John Deloney did it), but he's going to need to adjust his lifestyle while he still has the option and before the staggering debt leaves him with none. As for why the caller isn’t budging yet? Ramsey concludes, “When you get to hurting enough, Ryan, you’re going to figure this out. But you’re not hurting enough yet.”

What to read next

This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here’s how to buy the coveted asset in bulk Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid? Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

View Comments