How Do I Pay Off My $1.8 Million In Debt?

Summary

Podcast Summary: The Ramsey Show Highlights – "How Do I Pay Off My $1.8 Million In Debt?"

Release Date: June 23, 2025
Host: Ramsey Network
Duration: Approximately 9 minutes

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Introduction

In this episode of The Ramsey Show Highlights, a distressed caller reaches out to seek advice on managing an overwhelming debt of $1.8 million. Hosted by Dave Ramsey and co-hosted by a Ramsey Network expert, the discussion delves deep into the caller’s financial predicament, exploring the complexities of debt management, household budgeting, and the emotional toll of financial stress.

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Caller’s Financial Situation

Caller Profile:

• Age: 35
• Marital Status: Married
• Children: One child with a second on the way
• Occupation: Nurse in Montreal, Canada
• Income: Approximately $110,000 - $120,000 before taxes
• Debt Breakdown:
  • Triplex Mortgage: $680,000 owed on a property valued at $850,000, attempting to sell at $950,000
  • Family Home Mortgage: $590,000 owed on a home valued at $750,000
  • Two Hondas: Approximately $70,000 owed collectively
  • Personal Debt: $350,000, primarily loans from a cousin for down payments and renovations
  • Additional Debts: $35,000 in credit card and student loans

Key Quotes:

• Caller at 00:06: “I have 1.8 million in debt, total.”
• Caller at 00:19: “Montreal, which is the third most expensive city in Canada, and I work as a nurse, which is the cheapest paid in the whole of Canada.”

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Discussion on Debt Components and Asset Valuation

Dave Ramsey begins by dissecting the caller’s debt, focusing on the real estate holdings and their current market values. The triplex and family home are central to this discussion, highlighting the potential for asset liquidation to mitigate the debt burden.

Key Points:

• Triplex Sale: Attempting to sell the triplex for $950,000, up from its value of $850,000.
• Family Home: Valued at $750,000, with a mortgage of $590,000.
• Vehicles: Two relatively new electric Hondas aimed at saving $500 in gas per car monthly.

Key Quotes:

• Dave Ramsey at 02:22: “It makes a difference when you're $2 million in debt. That's a big deal.”
• Caller at 02:12: “We got them because we would be saving 500 in gas per car.”

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Impact of Income and Maternity Leave

The conversation shifts to the household income dynamics, particularly focusing on the upcoming maternity leave and its financial implications.

Details:

• Household Income Pre-Tax: $120,000 annually
• Wife’s Salary: $66,000 per year
• Maternity Leave Compensation: 70% of salary for one year
• Inflection Point: With the mother going on maternity leave in 12 weeks, the household income will significantly decrease, exacerbating the debt situation.

Key Quotes:

• Caller at 03:26: “She makes about 66.”
• Caller at 03:35: “She gets 70% paid.”

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Dave Ramsey’s Strategic Advice

Dave Ramsey provides a candid and structured approach to tackling the massive debt, emphasizing the importance of joint decision-making and radical expense reduction.

Advice Highlights:

1. Joint Financial Planning:

   • Dave Ramsey at 02:36: “We need to have a different discussion at your kitchen table. It's not like, what will she go along with.”
   • Emphasizes the need for both spouses to collaboratively assess and address the financial crisis.

2. Asset Liquidation:

   • Suggests selling the electric Hondas to eliminate monthly payments.
   • Recommends pricing the triplex competitively to expedite the sale and reduce the mortgage burden.

3. Expense Reduction:

   • Encourages extreme cutbacks, such as eliminating non-essential expenses like potato chips and haircuts.
   • Advocates for adopting a minimalist lifestyle to free up funds for debt repayment.

4. Work-Life Balance Adjustment:

   • Advises maintaining a healthy work-life balance despite financial pressures, especially considering the caller’s bipolar condition.
   • Dave Ramsey at 06:05: “We're not worried about the environment right now. The environment I'm worried about is not being broke.”

5. Reframing Financial Priorities:

   • Urges the caller to prioritize financial stability over environmental concerns.
   • Dave Ramsey at 06:07: “We're not spending $350,000 to redo the dadgum nursery either. Kids sleep on a used baby bed we get at a garage sale.”

Key Quotes:

• Dave Ramsey at 04:23: “This is killing me. This is aggravating your bipolar because your stress level is through the roof.”
• Dave Ramsey at 07:40: “But the answer to getting rid of this anxiety is getting rid of all the crap and the debt associated with it.”

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Emotional and Relational Dynamics

The conversation delves into the emotional strain of debt and the relational dynamics between the caller and his spouse.

Highlights:

• Emotional Toll: The caller expresses feelings of being overwhelmed and scared, which Dave acknowledges and empathizes with.

  • Dave Ramsey at 06:32: “You're walking around under a 400-pound weight. You sound so scared to death.”

• Spousal Cooperation: Emphasizes that both partners must actively participate in financial decision-making.

  • Dave Ramsey at 05:26: “No, not you. Both of you. She's involved.”

• Future Planning: Discusses the necessity of making tough decisions now to ensure financial stability for their growing family.

Key Quotes:

• Dave Ramsey at 06:07: “This is how this works. And no, we're not spending $350,000 to redo the dadgum nursery either.”
• Co-host at 08:52: “Those babies depend on y’all.”

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Conclusion and Final Recommendations

Dave Ramsey wraps up the conversation by reiterating the importance of decisive action and mutual cooperation to overcome the debt crisis.

Final Recommendations:

• Create a Comprehensive Budget: Encourages using the EveryDollar app to meticulously track and manage expenses.

  • Dave Ramsey at 09:16: “Create your free every dollar budget today. The simplest way to budget for your life.”

• Asset Liquidation as a Primary Step: Prioritize selling high-debt and potentially high-value assets to reduce overall debt.

• Mutual Commitment: Both spouses must commit to the financial plan, making sacrifices and supporting each other through the process.

• Mental Health Consideration: Acknowledges the caller’s bipolar condition, advocating for financial solutions that do not exacerbate mental health issues.

Key Quotes:

• Dave Ramsey at 08:50: “The work.”
• Dave Ramsey at 09:16: “Create your free every dollar budget today. The simplest way to budget for your life.”

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Takeaways

• Collaborative Financial Planning: Effective debt management requires joint effort and clear communication between spouses.

• Asset Management: Strategically selling assets can provide the necessary funds to alleviate debt burdens.

• Expense Discipline: Extreme cost-cutting is essential when dealing with substantial debt.

• Mental and Emotional Well-being: Financial stress significantly impacts mental health, necessitating a balanced approach to debt resolution.

This episode underscores the importance of taking strategic, collaborative, and disciplined steps to overcome severe financial challenges, emphasizing both practical solutions and the emotional resilience required in such endeavors.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Caller]

I am 35, married, with a kid and a second on the way. I have 1.8 million in debt, total.

[Dave Ramsey]

Good lord.

[Caller]

Yeah.

[Co-host]

Does that include your home?

[Caller]

Montreal, which is the third most expensive city in Canada, and I work as a nurse, which is the cheapest paid in the whole of Canada.

[Dave Ramsey]

And what is the 1.8 million on? I hope it's just your real estate. Right.

[Caller]

Well, I have a triplex, which I owe about 680,000 on. I have my family home, which I owe 590,000 on.

[Dave Ramsey]

Okay, so what's the triplex worth?

[Caller]

What's the what?

[Dave Ramsey]

What's the triplex worth?

[Caller]

The triplex is worth about 850.

[Dave Ramsey]

Okay.

[Caller]

I'm trying to get 950 on it, but I don't know if I should lower the price.

[Dave Ramsey]

Oh, so you've got it up for sale. And what is your home worth?

[Caller]

My home is worth about 750.

[Dave Ramsey]

Okay. All right, I got you. And is that. Let's see, seven and then six. That's not all of it.

[Caller]

And I have. No, it's not all of it. I have two Hondas, which I owe close to 70, 000 on each. I have 350,000 of personal debt and then 35,000 of credit card and student loans.

[Dave Ramsey]

What is your 350,000 of personal debt?

[Caller]

It was loaned to me mostly by my cousin, both as a down payment for the house as well as to renovate the house and the triplex.

[Dave Ramsey]

Wow. And what's your household income?

[Caller]

Around 110, 120,000 before tax. So we take away about.

[Dave Ramsey]

I'm going to go back one more time. I apologize, but I didn't write the condos down. You owe 70 each on two condos on two Hondas. Hondas.

[Co-host]

Oh, I put condo, too.

[Dave Ramsey]

Oh, so they're not worth 70?

[Caller]

No, they're fairly new, but they're electric.

[Dave Ramsey]

Okay.

[Caller]

We got them because we would be saving 500 in gas per car.

[Dave Ramsey]

Yeah, it makes a difference when you're $2 million in debt. That's a big deal.

[Caller]

Yeah, yeah, yeah.

[Dave Ramsey]

Not. Okay. All right. Oh, God. All right, so how can we help on.

[Caller]

Well, I had my aha moment when I saw 22,000 going out in one month after doing a budget. And I don't know what exactly to do. I tried to get my wife on board. She. She says she'll get rid of everything. Besides for the house and the cars. I cut out everything from potato chips to haircuts literally anything I could to curb the debt, curb the expenses. And I wish I could do more jobs a day, but my doctor says that because I'm bipolar, I need to have a healthy work life balance. And my wife is going on maternity leave in 12 weeks.

[Co-host]

How much of her salary is the.

[Caller]

120 she makes about 66.

[Co-host]

So half of it is that paid for. Paid maternity leave.

[Caller]

She gets 70% paid.

[Co-host]

Okay.

[Dave Ramsey]

For how long?

[Caller]

For a year.

[Dave Ramsey]

Okay.

[Co-host]

And how much are these car payments a month?

[Caller]

Just under 750 each. Okay.

[Dave Ramsey]

Okay. Well, I think we need to have a different discussion at your kitchen table. It's not like, what will she go along with? She's one of the adults here, too. And the two of you need to sit down and look at this and go, in 10 years, where do we want to be? And I'm collapsing under the weight of this. I can't do it anymore. This is killing me. It's aggravating your bipolar because your stress level is through the roof.

[Caller]

Yes.

[Dave Ramsey]

Yeah. And so it's not a matter of I have to keep a princess happy. The princess gets to grow up and be a woman. Like a grown up. And she gets to look at this with you and say, we have children to raise, a life to build, and the one that we have is falling down around our ears and we have to do something. The house is on fire, darling. We can't discuss what. You want it to burn. You get to decide with me if we're going to let the house burn down or are we going to do something to put it out. You don't get to sit here and go, I don't like fire. That's not an option anymore. You're like a grown woman with kids. And so you got to reframe this because you've been running around trying to shovel things in her direction to keep her happy and like. Like she's your child or something. And that's not working relationally. And it's not working in your decision making either, because y' all make sucky decisions.

[Caller]

Yeah, I do.

[Dave Ramsey]

No, not you. Both of you. She's involved. That's my point. So the two of you sit down together, and then if you back up and if I. You're not dumb people. If I hired you to sit down and look at someone's situation exactly like yours, and it wasn't all your stress, you would look at it and go, oh, electric Hondas are gone. Bye. Bye. We're getting cheap cars, like $5,000 cars. And I Don't really care what they burn, kerosene, diesel, electricity. Doesn't matter to me. We're driving them.

[Co-host]

We're not worried about the environment at all.

[Dave Ramsey]

We're not worried about the environment right now. The environment I'm worried about is not being broke. And so there's your environment. And you don't get to be an investor in triplexes. That thing's got to be priced in such a way that your real estate agent can sell it and get it gone. And then you use that to clear up a bunch of this $350,000 in debt and with no car payments and no Triplex. And the 350 is reduced by 200 or so.

[Co-host]

250?

[Dave Ramsey]

Yeah, 150 or so, down to 200. Then the two of you lean in. And by the way, she doesn't get a year off for a baby. I don't really care what the Canadian government says. She gets to go to work, she lives with. She's broke people. Broke people work. So you get time off, a reasonable amount of time with a baby in most countries or situations that's six or eight weeks. And then people go back to work. And so you know, you don't, you don't get to work at 70% and not work. And while we're broke, sorry, it's how this works. And no, we're not spending $350,000 to redo the dad gum nursery either. Kids sleeps on a used baby bed we get at a garage sale. People survive this stuff, but only when they make grown up decisions. And dude, just listening to the tone and cadence of your voice, my heart is breaking for you. You sound like you are walk walking around under a 400 pound weight. You sound so scared to death. You sound scared to death.

[Co-host]

Well then add two babies in the mix for you guys. I'm like, that's a lot. It's a lot.

[Dave Ramsey]

But the answer to getting rid of this anxiety is getting rid of all the crap and the debt associated with it. I hope you can turn this and not sell your house. I hope you can and I want you to try to do that. Sell everything but the house first. But then a year later, if you're still peddling and you still can't do it, you may have to sell the house. But you guys have got to quit buying crap you can't afford. And I really don't care how expensive freaking Montreal is, you may not get to live there anymore. There are cities that are too expensive for some people to live in. You can't live in Tokyo, you can't live in New York City, Manhattan, you can't live in London and make minimum wage. You can't afford to live there. They're too expensive. And so I don't know if Montreal goes on that list or not. I don't. I'm not an expert on Montreal. I'm not an expert on any of them. But gosh, son, I just, I'm afraid for you. Because the biggest thing I'm afraid is I'm afraid that you're afraid of her and you're not going to deal with this. And you two have got to sit down and have some grown up discussions about both of you being grownups and coming to the table and clean this mess up.

[Co-host]

Yeah. The work.

[Dave Ramsey]

Those babies depend on y' all.

[Co-host]

Yes. And that and the how the whole idea, the picture of the house is on fire and you're not going to get the fire out with water guns. Right. Just trying here and there. We're just kind of like, this is a, this is a fire hose. Like everything is going to look completely different and should by tomorrow. With your mindset, when you guys sit down tonight and just say we have to get, we have to get everything out. Every. Our life is going to look completely different in the next three to six months.

[Dave Ramsey]

Mathematically. Mathematically, I can get you out if you did everything I told you to do. But I don't know if you'll do it or not. That's the variable I can't get figured out here. When you decide to go do it, you can clean this up. Create your free every dollar budget today. The simplest way to budget for your life.