I Have $700,000 In Non-Mortgage Debt

Summary

The Ramsey Show Highlights

Episode: I Have $700,000 In Non-Mortgage Debt
Date: December 8, 2025
Host: Ramsey Network

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Overview

In this episode of The Ramsey Show Highlights, the hosts help a caller who, along with her husband, is overwhelmed by nearly $700,000 in non-mortgage debt. The caller shares her story of rapid family growth, dwindling savings, and mounting financial struggles. The Ramsey personalities (David Ramsey, Rachel Cruze, and an additional host) walk through her situation in detail, focusing on actionable steps and tough decisions—like budgeting and cutting childcare and educational expenses—to help her family regain control.

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Key Discussion Points & Insights

Life Changes and Debt Accumulation

• The caller describes going from a family of two to seven (including her mother-in-law) in under five years as the main reason for their overwhelmed budget.
  • “We’re drowning in debt. It all escalated within the last five years.” (B, 00:34)
• Maternity leave, property repairs, increased property taxes, and reliance on credit cards all contributed to their debt snowball.

Income & Debt Breakdown

• Combined pre-tax income: $240,000.
• Net (post-tax) income: $162,000.
• Their non-mortgage debt includes:
  • Personal loan: $28,000
  • Credit card debt: $98,000 (across 10 cards, five each for both spouses)
  • Student loan: $132,000
  • 401k loan: $43,000
  • Total: Approximately $301,000 in detailed debts (excluding mortgages and some debts not fully specified).

Debt Payments & Cashflow

• Minimum monthly debt payments are about $3,000.
• Despite a high household income, the family is in the red by “a couple of thousands” each month.
• All credit card accounts are current — nothing has gone to collections yet.

Real Estate

• Two properties: their home ($4,500/mo mortgage), and a rental/former primary home ($1,200/mo mortgage).
• They are selling the second property:
  • Owe $116,000, selling for $380,000—potentially freeing equity to pay down debts.
  • The host reassures: “That’ll make a huge chunk. Nothing to be afraid of there.” (A, 05:12)

Where the Money Goes

• Aside from mortgage and debt payments, key outflows include:
  • Family support (overseas): $300–400/mo
  • Private school: $1,300/mo for two children (ages 5 and 3)
  • Daycare: $800/mo
  • Medical bills, general living expenses, insurance, utilities

The Question of Private School (Pivotal Moment)

• Confusion over whether the private school cost is $1,300/year or $1,300/month—clarified it’s per month.
• Host challenges: “I’m going to challenge you that private school will always be there, and they really don’t need it that much. As much as you need $1,300 a month back in this thing called a budget.” (A, 07:33)
• Rachel Cruze: “You want to be able to do everything, but you mathematically can’t... For the next two to three years, our lifestyle has to change.” (C, 07:54 & 08:59)

The Budget

• The family admits to attempting but not maintaining a consistent budget.
• Hosts underscore the necessity of tracking, reducing expenses wherever possible, and prioritizing necessities: food, shelter, utilities, transportation.

Recommendations & Action Steps

• Consider removing children from private school to free up significant monthly cash flow in this crisis.
• Drastically cut all non-essentials, even if only for a few years.
• Use the proceeds from selling the secondary property to pay down high-interest debt.
• Offered a free session with a Ramsey coach and free access to EveryDollar budgeting software for a year.
  • “I want to give her a session with one of our coaches and free EveryDollar for a year.” (A, 09:11)

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Notable Quotes & Memorable Moments

• On lifestyle change:
  “There has to be some changes, some significant changes. Right. Because if there’s not, you guys will keep in the cycle of where you’ve been.” (C, 07:54)
• On budgeting and private school:
  “As much as you need $1,300 a month back in this thing called a budget—which you aren't doing—but we just found $1,300 that you desperately need.” (A, 07:33)
• On the pain of cutting back:
  “And that's gonna hurt when you see that number. To think, oh my gosh, if we eliminate these things that we want to do that are good things... but we can't afford it.” (C, 09:00)

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Important Timestamps

• 00:34: Caller describes emotional strain and snowballing debt
• 01:17–02:45: Detailed breakdown of debts (personal loan, credit cards, student loans, 401k)
• 04:16–05:11: Mortgage information and sale of second property
• 06:00–06:16: Recurring expenses, including family support and school
• 07:33–07:54: Hosts directly challenge the value of private school at this moment
• 08:59–09:11: Rachel Cruze lays out necessity of deep cuts and lifestyle changes

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Conclusion

This episode is a candid, empathetic look into a real family’s overwhelming debt situation, with practical stone-cold advice on cutting back—no matter how painful. The hosts emphasize prioritizing essentials, stopping all non-critical spending (no matter how personally difficult), and committing fully to a detailed budget, reinforced by practical coaching and financial tools. The overarching message: Significant, tough choices are needed to escape the debt trap and regain peace of mind.

Transcript

[A]

If your private student loans are in default, you're not out of options. Go to yrefi.com ramsey so my husband.

[B]

And I went from a family of two to seven and under five years.

[A]

How'd that happen?

[B]

Well, we have a five year old. We have a three year old. We have a one year old and a four months old. I'm actually wrapping up with my maternity leave.

[C]

Oh, my gosh.

[A]

I must tell you, you look fabulous, given how little sleep you must. I mean, I'm exhausted listening to that.

[B]

Yes, exactly. But it's unfortunate that we are. We're drowning in debt. We. We are drowning. And it all again, escalated within the last five years. And I. My question is, how can we navigate this terrible mess that we're in with all the debt that we have accumulated? And obviously we have a large family, so we have four kids. And then my mom lives with us, thankfully. But we. We are at a negative every month and we don't know how to. How to go about this.

[A]

Okay, let's run through some numbers real quick. Okay. And then Rachel will dive in and we'll start pulling up a plan here for you. Okay, so let's start with your combined.

[B]

Income before taxes is 240,000. And after taxes, 162.

[A]

Okay.

[C]

Okay.

[A]

And give us the debt. Go smallest to largest. And let's keep the mortgage out of it at first. Okay. Let's just see what that list looks like.

[B]

Okay. So I will try my best. So the smallest debt is. So we have a credit card debt. We have personal loan. So credit card debt altogether is.

90. Actually doesn't have the smallest, but combined between my husband and I. Okay, so the personal loan is 28,000.

[A]

Okay.

[B]

Credit card debt is 98,000.

[A]

How many. How many cards equal that? 98.

[B]

So my husband has five, and I do have five as well. So that's a total of 10. Credit.

[A]

10 credit cards.

[C]

Are they all average? Ish. Around that. That like nine?

[B]

I'm being conservative. I think it's above that. Okay. I'm just rounding to the nearest. Yes, but it's. That's conservative. Okay, so credit card. I'm telling you, we've been relying on credit cards.

[A]

Yeah.

[C]

Yeah.

[B]

And my student loan is 132.

[C]

Okay.

[B]

And I think that's. That's it.

[A]

Okay.

[B]

Oh, no, no, no. I'm sorry. 401k. We borrowed. Borrowed.

So it's a total of 43,000.

[A]

So 43,000 in the 401k loan?

[B]

Yes. Okay.

[A]

All right.

[C]

How much is going out to payments each month. Are you paying minimum payments on everything?

[B]

We're paying minimum payments and everything. And it's. I was at about 3,000 or so.

[A]

Okay, so all of that.

[C]

Are any of the credit cards in default? Not yet gone to collections at all? No.

[B]

No. You're current. Keep them afloat. Okay. Yes.

[A]

Okay.

[C]

Okay.

[B]

Everything is current.

[A]

And do I understand that with all of this stuff, plus whatever's going on in your life, you guys aren't. There's no money. You don't have enough money left over and that's why you've been using credit cards.

[B]

Exactly. Because my husband has been having to cash out all of whatever stocks he had and all of that. So anything extra we had, any savings, anything like that has been going into stuff that he had prior to us getting married. All of that has been going on towards that. So what happened is that with maternity leave, my income significantly decreases. I have two full time jobs and that goes down to basically 25% of what I make. And then we had major repairs to do to the house and things have broken our cars because we drive all cars. So a lot of things. We started off well, but then the debt just kept accumulating and tax property. Property taxes went up twice the first year that we bought the house. So things just kept coming up and it was just a snowball. So much.

[C]

How much is your mortgage?

[B]

So we have to. My husband had a property prior to getting married and we have our property together after getting married. So our home is about 4,500 and the other property is about a thousand two hundred.

[C]

Okay. What is the other property? Where is that?

[B]

So it's close by to where we live, but that's where my husband used to live. It's a double unit. Yeah, he was actually it's.

[C]

What are y' all doing with it?

[B]

What are we doing with it? So thank you for saying that because we are currently trying to sell it.

[C]

Good.

[B]

So that we can pay some of the debt. And I'm scared to death because I feel like that's not gonna be enough. And we do have a little bit of income coming from there as well. Okay. So right now that property is being sold. Right now there is 116,000 owed and we're selling it for 380,000.

[C]

Oh, wow.

[A]

Yeah, That'll make a huge chunk. Nothing to be afraid of there. Yeah, it may not. It's not going to get it all, but it's Right.

[B]

Right.

[A]

So let me ask you this. How much are you over every month? In other words, Bills versus what we got. How, how much are we in the red.

On an average month?

[B]

On an average month? A couple of thousands, I would say.

[A]

Are you on a budget?

[B]

We try to. We were not in a consistent budget.

[C]

Yeah, because you guys are bringing in it's what, around 12,000amonth. Would you say hit your account Y. Yes.

[B]

Yeah.

[C]

And then the two big things, the debt payments, which is 3,000, and then you have your mortgage, which is 4. And so my question is. Yeah. Where's the rest of it going?

[B]

Oh, let me tell you.

[C]

Yeah.

[B]

Food, schooling, daycare, insurances, utilities, transportation. We do have a couple of medical bills and then we support is very minimal. But we do support our families.

Back home and that helps them a little bit. But if we add all that up, honestly, we're always on the red and we're trying to minimize as much as we can.

[C]

How much are you, how much are you paying for the families?

[B]

It's like a couple hundred dollars. Three to four hundred dollars a month.

[C]

Three to four hundred. Okay. And how much is the kids school?

[B]

It's about 1, 300amonth. Okay. Okay.

[A]

Yeah. Is that daycare?

[B]

Daycare, about 800amonth.

[A]

What's the 1300? Is that private school?

[B]

Yes, and we are grateful to get financial aid, but that's sort of the balance.

[A]

How old, how, how old are the children that are in private school?

[B]

5 and 3.

[A]

May I, may I push on something and Rachel, kind of walk you through what to do here. But I'll just quickly say, I think you have to have a conversation about the two kids, five and three, being in private school to tune of 1300amonth. Private school is still going.

[B]

1300 a year.

[A]

Oh, a year.

[B]

A year.

[A]

I didn't catch that.

[B]

That's significantly less than.

[A]

Okay, never mind. I thought it was 1300amonth.

[C]

So it's just like a few hundred all. I mean, it's not a ton.

[A]

All right.

[B]

Oh, I'm sorry, I'm sorry. 1,300amonth. That's correct. I'm so sorry. It's 1300amonth. So you're right.

[A]

I don't want, I don't want to bog down on this. I want to give it to Rachel here. But I'm going to challenge you that private school will always be there and they really don't need it that much. And as much as you need $1,300 a month back in this thing called a budget, which you aren't doing, but we just found $1,300 that you desperately Need Rachel. I'll hand that one to you. That's just my opinion.

[C]

Yeah. And you know, there's going to be seasons, and there has to be some changes, some significant changes. Right. Because if there's not, you guys will keep in the cycle of where you've been. And so I think that is the hard reality is that you want to be able to do everything, but you mathematically can't. Right. You guys keep running into that. You can't keep doing everything. And so you're either gonna get behind on bills, you're gonna get behind on a mortgage, you're gonna get behind on things. And I'm scared you're gonna get behind on the wrong. The wrong items. And so I think you guys are gonna have to have a really, really hard conversation. And it's not forever. Not forever. But for the next two to three years, our lifestyle has to change. And you guys really are at the point where even four or five hundred dollars makes a significant difference. And so to be able to say, okay, what are the things that if we. That are not necessity. Food, shelter, utilities, transportation. That's it. We have to be paying for daycare. There's no other option. School. There's another option to your point that doesn't have to be private school. Like, what are the things that we don't have to have to literally survive.

[A]

Yeah.

[C]

And I'm curious what that number is. And that's gonna hurt. That's gonna hurt when you see that number. And to think, oh, my gosh, if we eliminate these things that we want to do that are good things, two things, but we can't afford it.

[A]

Just for the sake of time, two things. I want to give her. I want to give her a session with one of our coaches and free every dollar for a year. Let's get those things in play. And you can dig out of this. Why refi Refinances Defaulted private student loans for struggling borrowers. Learn more at Y r e f y.com Ramsey.