How Do I Get Caught Up On Retirement?

Summary

Ramsey Everyday Millionaires
Episode: How Do I Get Caught Up On Retirement?
Release Date: June 11, 2025

In this insightful episode of Ramsey Everyday Millionaires, the Ramsey Network hosts—including Dave Ramsey, Ken Coleman, Rachel Cruze, George Kamel, Jade Warshaw, and Dr. John Delony—delve into the challenges and strategies surrounding catching up on retirement savings amidst significant debt. The episode features a detailed consultation with Becky from Louisville, Kentucky, who seeks guidance on managing her finances to secure a stable retirement.

Guest Introduction: Becky's Financial Situation

The episode begins with Dave Ramsey introducing Becky, a 47-year-old entrepreneur facing $47,000 in debt. Becky shares her concerns about balancing debt repayment with retirement planning:

[00:18] Becky: "I am 47, and I was wondering how to get caught up on retirement with $47,000 worth of debt."

Dave promptly summarizes her situation:

[00:34] Dave Ramsey: "You're 47 and $47,000 of debt."

Detailed Debt and Income Analysis

Becky provides a breakdown of her debts and income, highlighting the various sources of her financial obligations:

[01:12] Becky: "It's mostly like back taxes, and we have three credit cards."

She elaborates further:

• Local Department of Revenue: $25,001
• IRS Debt: $15,000
• SBA Loans: $13,000

Regarding income, Becky and her husband operate a cleaning business, earning approximately $6,685 monthly after taxes:

[00:48] Becky: "We make about $6,685 a month as after tax."

Debt Repayment Strategy: Prioritizing Tax Debt

Dave Ramsey advises Becky to prioritize her debts using the debt snowball method, emphasizing the urgency of addressing tax-related debts first:

[01:44] Dave Ramsey: "In this case, you know, we always say that IRS debt or tax debt jumps straight to the top of the list. So, I mean, that's the case for you. I would start off with that IRS debt, the $15,000, and work through that, and then I would go to the DOR debt and then the SBA loan will probably be final."

Exploring Income Enhancement Opportunities

With Becky and her husband working 60 hours a week to generate a combined annual income of $70,000, the hosts explore avenues to increase their earnings:

[02:46] Jade: "Are you guys working 40 hours?"

Becky clarifies:

[02:50] Becky: "Oh, plus. Yeah, it's usually about 60 hours a week, 60 hours."

Jade and Dave propose strategies to boost income without exacerbating their workload:

• Raising Fees: Evaluating and increasing service prices to match inflation and added value.

  [06:27] Jade: "Am I charging enough too? We do find that a lot in small businesses that, you know, that demand is there."

• Expanding Services: Offering premium services that don't significantly increase time commitments but allow for higher charges.

  [04:00] Dave Ramsey: "You can look for premiums that you can add that don't necessarily take a lot more of your time, but it gives you a reason to increase your price."

• Scaling the Business: Bringing on additional staff or leveraging side hustles to handle more clients and increase revenue.

  [04:49] Becky: "We do have a big job coming up that's going to give us about $30,000 from the job."

Dave emphasizes the importance of leveraging new opportunities for business growth:

[03:42] Dave Ramsey: "What would it look like to add more and bring other people to help you?"

Strategic Financial Planning: Debt First, Then Retirement

The hosts reiterate the foundational Ramsey philosophy: eliminate debt before aggressively saving for retirement. Jade underscores this priority, advising Becky to focus on debt reduction as the primary financial goal:

[04:34] Jade: "Cutting expenses and upping income is what it comes down to. So before even doing anything into retirement, paying off this $47,000 in debt, like, that's. That's number one goal."

Becky mentions an upcoming significant job that could inject $30,000 into her finances. Dave recommends allocating this windfall entirely towards debt repayment, after accounting for any tax obligations:

[05:33] Dave Ramsey: "Use all of it towards the debt, but pay taxes on it first so that you don't land yourself in this."

Maximizing Business Value and Efficiency

Jade encourages Becky to evaluate the value of her time and the adequacy of her pricing strategy, suggesting that the current workload may not be yielding optimal financial returns:

[06:27] Jade: "What is my time worth? And am I charging enough too?"

Dave supports this perspective, advising Becky to test higher prices with select clients to better reflect the value of her services:

[06:42] Dave Ramsey: "At the very least, test it. You know, take a couple of your clients and get to that number that you think. And I think you'll be surprised at what people will pay for."

Conclusion: Path to Financial Stability and Retirement

The episode concludes with a consensus on prioritizing debt elimination to pave the way for future retirement savings. By implementing the recommended strategies—prioritizing high-interest debts, increasing income through business enhancements, and reassessing pricing models—Becky and her husband can work towards financial stability and eventually secure their retirement goals.

Throughout the discussion, the Ramsey Network emphasizes disciplined financial management, creative income strategies, and the importance of valuing one's time to build and maintain wealth effectively.

Notable Quotes:

• Dave Ramsey [00:36]: "You're 47 and $47,000 of debt."
• Jade [04:34]: "Cutting expenses and upping income is what it comes down to."
• Becky [05:33]: "We do have a big job coming up that's going to give us about $30,000."
• Jade [06:27]: "What is my time worth? And am I charging enough too?"
• Dave Ramsey [06:42]: "At the very least, test it. You know, take a couple of your clients and get to that number that you think."

This episode serves as a practical guide for listeners grappling with debt while aiming to secure their financial futures, embodying the Ramsey Network's mission to help ordinary people build extraordinary wealth through disciplined and responsible financial practices.

Transcript

[Dave Ramsey]

This episode is brought to you by SmartVestor.

[Becky]

Connect with an investing pro near you.

[Dave Ramsey]

At RamseySolutions.com SmartVestor We've got Becky in Louisville, Kentucky. Becky, what's going on?

[Becky]

Hi, I just had a question. I am 47, and I was wondering how to get caught up on retirement with $47,000 worth of debt.

[Dave Ramsey]

Oh, okay. $47,000 worth of debt. You're thinking about retirement. Tell me your age again. You said it really quickly.

[Becky]

Oh, sorry. 47.

[Dave Ramsey]

You're 47 and $47,000 of debt.

[Becky]

Yeah.

[Dave Ramsey]

Look at that. Okay, so let's kind of unwind this a little bit. What's your income? Tell us a little bit about what you do.

[Becky]

I own a cleaning business. Just my husband and myself that do the cleaning, and we make about 6685 dol a month as after tax. Okay, and what else did you say you needed?

[Dave Ramsey]

Is your husband the same age you are as he. In his late 40s?

[Becky]

Yes. 47. Yeah.

[Dave Ramsey]

Okay, what kind of debt is it?

[Becky]

I was looking at it. It's mostly like back taxes, and we have three credit cards.

[Dave Ramsey]

Okay, so you owe the IRS. How much of that is IRS debt?

[Becky]

I owe, let's see, about 4 or 25,001 to our local DOR Department of Revenue, and then 15,000 on IRS.

[Dave Ramsey]

Okay.

[Becky]

And then we have a. We have two SBA loans. That adds up to about 13,000.

[Dave Ramsey]

Okay. Yeah, so you do, you've. You've got your work cut out for you here. I mean, typically we would say, you know, to do the debt snowball, some smallest, largest, and go through like that. In this case, you know, we always say that IRS debt or tax debt jumps straight to the top of the list. So, I mean, that's the case for you. I would start off with that IRS debt, the 15,000, and work through that, and then I would go to the DOR debt and then the SBA loan will probably be final. In the meantime, my question is, what can you guys do? I mean, you're entrepreneurs, you're creative minded, or what can you guys do to start bringing in more income, Kind of using your skills now?

[Jade]

Yeah. I was curious about how much per house are you guys making?

[Becky]

Well, we do mostly commercial jobs, and that's the majority of our income is what we make. We have a few residentials we could probably add on, but residentials, probably a week. We probably make about $600 a week.

[Jade]

Okay, and are you guys working 40 hours?

[Becky]

Oh, plus. Yeah, it's usually about 60 hours a week, 60 hours.

[Jade]

Okay.

[Becky]

Yeah.

[Jade]

And making 70 combined.

[Becky]

Yes, 70.

[Jade]

Around 70,000. 6,000 a week or a month. Okay. Well, when you break it down, you know, you're both working full time, so it comes out to be, you know, $35,000 each that you guys are making per year. And I'm just wondering, because the biggest thing for this is to get your income up. Like what Jade was saying to get out of this is going to be like, that's going to be the biggest thing. So I'm just wondering from a time perspective, is there anything. Spending 40 hours a week, you know, doing something like, what else? Because you're spending 60 hours a week is what you're saying is really what ends up being. So I'm just wondering, you know, what else is out there. Not to. Not to close down your business, because I know this is how you guys are making a living.

[Dave Ramsey]

What would it look like to add more and bring other people to help you? So you're not. I mean, you guys are only gonna have so many hours in the day.

[Jade]

Yeah.

[Dave Ramsey]

But to get more clients on, and then you're bringing on people to say okay or upcharge.

[Jade]

I mean, have you guys raised your fees in a while?

[Becky]

The last time we raised it was last year.

[Dave Ramsey]

Okay.

[Jade]

Okay.

[Becky]

But I mean, of course everything is going up.

[Dave Ramsey]

So, I mean, yeah, I look for ways to offer some sort of. I mean, obviously off raising your prices to meet inflation makes sense. But then you can find premiums that you can add that don't necessarily take a lot more of your time, but it gives you a reason to increase your price. Right. So you could look for things like that. You look for things like that. I'd look for other built like other commercial properties. Other personal properties. And then I'd bring on a couple of folks that are like. Because there's always people looking for side hustles. So somebody who wants a house cleaning side hustle can go to you guys. And now you're just taking a percentage of it because you're the one sourcing the work. Right. So I think there's a lot here for you to do, but you're going to have to get creative and you're going to have to pull the trigger on that stuff sooner than later. So you can see the impact of that money.

[Becky]

Okay.

[Jade]

Yeah. So really, Becky, I mean, it's. It's cutting expenses and upping income is what it comes down to. So before even doing anything into retirement, paying off this $47,000 in debt, like, that's. That's number one goal.

[Becky]

Okay.

[Jade]

And. And then once you pay that off, be stacking some cash after that for an emergency fund and then start looking. Yes. At retirement. Do you guys have anything saved right now in retirement?

[Becky]

I think I've got about 2,000.

[Jade]

Okay.

[Dave Ramsey]

Okay.

[Jade]

Do you have any cash available?

[Becky]

Just a thousand that we, you know, save for emergency fund.

[Dave Ramsey]

Yeah.

[Jade]

Okay, that's great.

[Becky]

But we do have a big job coming up that's going to give us about $30,000 and from the job.

[Dave Ramsey]

Good.

[Becky]

You think I should. You just use all that towards the debt or should I put some of that in retirement?

[Dave Ramsey]

Use all of it towards the debt, but pay taxes on it first so that you don't.

[Becky]

Absolutely. Yeah.

[Dave Ramsey]

So that you don't land yourself in this.

[Becky]

Yeah. The whole tax thing was like a big. Not have knowledge in it when we first started. Sure. So, yeah.

[Jade]

Becky, how do you get more of those jobs having someone paying you 30,000? Is there. Is there more of that out there?

[Becky]

So, yeah.

[Jade]

Okay. Well, that's great. Well, yeah, if I were you, I think being able to find those. Bigger fish to fry, if you will. Because if it's the same amount of time, find clients that are gonna be paying you more for the same amount. Right. I mean, if you're working 60, I mean, it is a little defeating of like, man, 60 hours a week making 35,000. You'd make more doing something else. I mean, right. When it comes down to it. So again, I know this is Yalls lifeblood and you've built this business, so I'm not saying to abandon it, but you do kind of have to reevaluate. What is my time worth?

[Dave Ramsey]

That's right.

[Jade]

And am I charging enough too? We do find that a lot in small businesses that, you know, that demand is there.

[Dave Ramsey]

Yes.

[Jade]

And yet you're like, okay, you've kept your prices, you know, relatively okay, but you could. You could up them and test it.

[Dave Ramsey]

At the very least, test it. You know, take a couple of your clients and get. Get to that number that you think. And I think you'll be surprised at what people will pay for. A couple of reasons. Number one, like the service people are willing to pay. Service people are willing to pay for. And it's. It's a pain in the butt to change. Like, yes, it's a pain in the butt to say, oh, man, Okay, I guess I need. It's too expensive. I guess I need to find a new service. Like most people are like, okay, whatever.

[Jade]

Yes, totally. Seriously, do you know, and in it And. And I would be apt to tell you that corporations are going to be less likely to change and absorb some of your raises than individuals, like with, you know, a homeowner. So. So, yeah, Becky, I would. Yeah, I would be. I'd be looking around. And again, that $30,000 deal, that's amazing. So how else can we get that?

[Dave Ramsey]

Yeah, I like that.