A clip of personal finance personality and radio host Dave Ramsey expressing his shock and frustration with a couple in massive debt has gone viral, and we totally understand why.
In the clip of The Ramsey Show, a couple called in to ask for advice on how to get out of their extreme debt without going into bankruptcy. The video drew in a stunned audience of over 17.7 million viewers because the couple had accrued $1,000,000 in debt. You read that right: one million dollars.
After breaking down their loans, the caller revealed that $335,000 is in student loans (they both have advanced degrees), $136,000 in credit card debt, $44,000 in personal loans, $35,000 in car loans and $210,000 is their mortgage.
“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.
Ramsey, clearly trying to work through his shock, asked the couple, “How old are you?” The caller responded that they are 29 and their partner, who is the main contributor to the credit card debt, is 32. Ramsey then asks the caller to confirm that “there recognition on both of your parts about how absurd this situation” has become.
“You’re scared and you should be,” he said. “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.”
Ramsey pointed out their lifestyle is considerably above their extremely good income of $230,000 a year, and he laid down the plan on how they could cut back and start paying things off. He warned that it would be very emotional for them and that they had been living beyond their means for too long.
“You’ve been making $210,000, spending $310,000, [and] I’m getting ready to put you on [a budget] of $30,000,” he said. “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.”
Ramsey is known for his “tough love” approach, and some people may find it rude, but others argue that it’s necessary to face the harsh truth of one’s financial situation.
As for the couple in the clip, it’s unclear what happened with their finances since the episode aired four years ago.
While it may be shocking to learn about a couple with a million dollars in debt, it’s not uncommon for people to accumulate debt through car notes, student loans, credit card debt, mortgages and personal loans. Studies show the average American has about $90,460 in debt. Thankfully, there’s plenty of ways to get a handle on your finances before it gets really, really bad.
