Episode Overview

Title: I Took Out A Payday Loan And Now I’m Trapped
Podcast: The Ramsey Show Highlights
Date: January 24, 2026
Host(s): Dave Ramsey, George Kamel
Guest: Alicia

In this episode, Dave Ramsey and George Kamel take a heartfelt call from Alicia, who is dealing with significant financial and mental health challenges after taking out a payday loan during a manic episode associated with bipolar II disorder. The discussion centers around strategies for breaking the payday loan cycle, building stability, and the importance of mental health management when addressing financial struggles.

Key Discussion Points & Insights

1. Alicia’s Situation: The Intersection of Mental Health and Debt

• Background: Alicia describes having a manic episode due to a combination of family and health challenges (including endometriosis and surgery), which led her to take out a payday loan.
• Diagnosis: Alicia confirms she's diagnosed with bipolar II (00:20).
• Debt Details:
  • Initial payday loan amount: ~$2,300.
  • Current owed (due to fees and interest): ~$5,800 (00:58).
  • Additional debts: $3,000 student loan (on deferment), a dental bill, and an old credit card in collections.
  • Current assets: $10 in savings, $200 cash saved for pet emergencies (03:32).

2. Payday Loan Trap and Emotional Toll

• Predatory Interest: The hosts are outraged about the high fees.
  • Quote: “Gosh, I don't. I don't know how those people sleep, to be honest with you.” — George (01:09)
• Cycle of Desperation: Discussion of how payday lenders prey on vulnerable individuals in survival mode (08:08).

3. Mental Health: Management & Protective Measures

• Management Steps: George stresses the importance of medication management, professional oversight, and self-care strategies like handing over debit cards during vulnerable times (01:17–02:55).
  • Quote: “I’ve seen friends, colleagues, countless students... they put some really big hurdles to protect themselves from themselves in those seasons.” — George (01:25)
• Alicia’s Efforts: Alicia confirms she is now on the right medication and under professional care (02:55).
• Encouragement and Support:
  • Quote: "I just want to tell you I'm proud of you." — George (03:10)
  • Quote: “We probably believe in you more than you do right now. But hear us say we believe in you. Okay. Same team?” — George (03:39)

4. Current Life & Financial Status

• Employment & Income: Currently a part-time waitress; returning to school for HR/Business. Income fluctuates, averaging $300/week (04:11–07:32).
• Living Arrangements: No formal rent; living on food stamps and minimal expenses (07:44).

5. Ramsey’s Baby Steps Approach

• Step 1: Save $1,000 as an emergency fund. She’s $200 in, with $800 to go (05:47).
• Step 2: Make minimum payments while increasing income, if possible; consider pausing school to work full-time and knock down payday loan debt more aggressively (06:25–07:22).
  • Quote: “That might mean we need to take a semester off and go really hard and work 50 hours a week to at least knock out the payday loan.” — Dave (06:25)
• Debt Snowball: List debts smallest to largest and attack them in order after the emergency fund goal (08:40).
  • Practical Advice: Write out all debts on paper, with balances, and work through each methodically.

6. Sacrifice and Planning for Stability

• Hard Choices: Host advises possible reduction in school load or temporary pause to prioritize full-time work and debt repayment (06:52–07:22).
• Survival Mode: Hosts emphasize that her current life situation, while manageable, is not sustainable long-term; urge her not to resign to survival mode (08:08).

7. Hope and Forward Momentum

• Emotional Support: Hosts repeatedly encourage Alicia, reinforcing belief in her capacity for change and offering practical tools (like the EveryDollar budgeting app).
  • Quote: “It’s a thing you don’t have right now, which is peace.” — George (05:06)
  • Quote: “I want you to just picture Alicia for the first time in her adult life, completely debt free with savings in the bank…” — Dave (04:52)
• Budgeting Tools: Alicia is offered free access to the EveryDollar budgeting app as a first step towards regaining financial control (09:27).

Memorable Quotes & Moments

• The Toll of Payday Loans:
  • “Gosh, I don't. I don't know how those people sleep, to be honest with you.” — George (01:09)
• On Mental Health Self-Defense:
  • “They put some really big hurdles to protect themselves from themselves in those seasons.” — George (01:25)
• Hope and Solidarity:
  • “We probably believe in you more than you do right now. But hear us say we believe in you. Okay. Same team?" — George (03:39)
• On Breaking the Cycle:
  • “I don't want you to look up. And now it feels hopeless because this loan just keeps doubling and doubling because it's 3 or 400% APR.” — Dave (09:16)

Notable Timestamps

• [00:05] Alicia shares her debt and mental health context
• [00:58] Payday loan amount discussed
• [01:15] Discussion on predatory lending
• [01:17–02:55] George’s mental health management suggestions
• [03:39] Encouragement for Alicia
• [04:11] Alicia’s current income/job/education
• [05:47] Starting the baby steps approach
• [06:25] Advice to consider pausing school to repay debt
• [08:08] Describing her current living as survival mode
• [08:40] Explaining the debt snowball method
• [09:27] Offering budgeting app and closing encouragement

Final Takeaways

This episode shines in its empathetic approach toward someone facing both serious financial hardship and mental health challenges. Dave Ramsey and George Kamel blend practical financial advice with encouragement, urging Alicia to take actionable steps—starting with a small emergency fund, attacking her most urgent (and toxic) debts, and considering tough choices around employment and schooling. Their tone remains supportive and hopeful, offering both the vision of future peace and practical tools to help Alicia (and listeners in similar situations) get there.