The Ramsey Show Highlights: "I'm 25 And Already $165,000 In Debt (Not Including The House)"

Release Date: May 17, 2025

In this episode of The Ramsey Show Highlights, host Dave Ramsey, alongside financial expert George Kamel, addresses the overwhelming debt situation of a 25-year-old caller named Connor. Struggling with $165,000 in debt, excluding his mortgage, Connor seeks guidance on how to navigate his financial predicament. The discussion provides valuable insights into debt management, budgeting, and the implementation of Ramsey's renowned Baby Steps.

Connor's Financial Predicament

Connor begins by outlining his dire financial situation:

Connor [00:06]: "I'm 25, married, I got a daughter and about $550,000 in debt, including a mortgage. Just kind of feels like I have your Every Dollar app. I've been trying to use it, but even then it just feels really overwhelming. Trying to see basically no light at the end of the tunnel."

He breaks down his debt as follows:

• Home Equity Line of Credit (HELOC): $145,000
• Personal Line of Credit: $14,000 (transferred from a student loan)
• Credit Cards: $1,000 and $5,000

This totals to $165,000 in consumer debt, excluding the mortgage.

Analyzing the Debt Structure

George Kamel steps in to help Connor dissect his debt:

George Kamel [00:37]: "How much consumer debt do you have? Let's separate the mortgage out because that'll help take away this mountain of debt you're looking at."

Connor explains that the HELOC was used to consolidate other debts, including car loans and managing expenses during his wife's maternity leave.

Dave Ramsey probes deeper into the circumstances that led to the debt accumulation:

Dave Ramsey [01:54]: "So no, you don't get it at full. You get it at 500 bucks a month and starve to death. So she couldn't, you guys could not afford for her to go out for 18 months, but she did anyway."

Connor reveals that during his wife's 18-month maternity leave, he was on a commission-based job with unstable income, forcing them to rely heavily on debt to cover living expenses.

Assessing Income and Financial Behavior

Dave Ramsey and George Kamel examine Connor's current income and spending:

Connor [02:46]: "Now I make about 80 to 100,000."

Dave Ramsey [03:00]: "So you make 165?"

Connor clarifies that collectively, their household income is approximately $165,000 annually, with a monthly take-home pay of about $8,000 after taxes.

Dave emphasizes the importance of living within their means:

Dave Ramsey [03:12]: "Because you should have easily been making it with both of you working and making progress, making. I mean, good God, what does it take for you to live? I mean you should be putting 5, 6, 8, $10,000 a month on these debts."

Implementing the Baby Steps and Debt Snowball

George introduces Ramsey's Baby Steps as a strategic approach to tackle debt:

George Kamel [04:06]: "Baby step one is $1,000 starter emergency fund. Likely you guys have that. And then baby step two, again you're pausing. Investing. We're not borrowing another dime. You're going to pay off all of your debts from smallest to largest. Balance with the debt snowball method."

He advises making minimum payments on all debts while aggressively paying down the smallest debt first, then cascading payments to larger debts—a method known as the Debt Snowball.

Dave Ramsey's Strong Recommendations

Dave Ramsey delivers a passionate and no-nonsense approach to Connor's situation:

Dave Ramsey [04:55]: "No eating out, no vacations, no investing, no over taxation. Don't over withhold... live on beans and rice... you have made a freaking mess at 25 years old with babies."

He stresses the necessity of cutting unnecessary expenses and focusing all available funds on debt repayment. Ramsey encourages Connor to eliminate non-essential spending and prioritize debt elimination:

Dave Ramsey [06:00]: "Start throwing it at these debts tonight. Knock out that thousand dollar credit card, cut it up. Knock out that $5,000 credit card, cut it up, knock out that little $14,000 personal loan and be done with it."

Ramsey also advises against further borrowing and emphasizes living below their means to prevent future debt accumulation.

Avoiding Common Debt Traps

George highlights the pitfalls of debt consolidation without reduction:

George Kamel [07:25]: "One of the biggest traps out there is when you play the shell game, you start moving the debts around... you don't get to do the Debt snowball with a giant HELOC sitting there."

He warns that merely shifting debts can exacerbate the problem, preventing effective debt reduction through the snowball method.

Final Takeaways and Motivation

Concluding the discussion, Dave Ramsey motivates Connor and listeners to adopt disciplined financial habits:

Dave Ramsey [08:00]: "Beans and rice, no freaking life... You have to live on less than you make. And I was the master at spending money and borrowing... I've done it worse than you."

George reinforces the possibility of becoming debt-free:

George Kamel [07:57]: "You guys are going to be completely debt free if you do it this way with the rest of your life."

Ramsey emphasizes the importance of commitment and strategic planning:

Dave Ramsey [09:24]: "Stop borrowing, decide I'm not living like this anymore so that you can get clear of this."

Conclusion

This episode serves as a compelling guide for young individuals grappling with significant debt. Through Connor's real-life example, Dave Ramsey and George Kamel demonstrate the effective application of the Baby Steps and Debt Snowball method to regain financial stability. The conversation underscores the importance of disciplined budgeting, prioritizing debt repayment, and making informed financial decisions to achieve long-term financial freedom.

Notable Quotes:

• Connor [00:06]: "Trying to see basically no light at the end of the tunnel."
• Dave Ramsey [04:55]: "No eating out, no vacations, no investing... live on beans and rice."
• George Kamel [04:06]: "You're going to pay off all of your debts from smallest to largest."
• Dave Ramsey [08:00]: "You have to live on less than you make."
• George Kamel [07:57]: "You guys are going to be completely debt free if you do it this way."

This comprehensive discussion provides actionable steps for individuals facing similar financial challenges, emphasizing the transformative power of disciplined financial planning and commitment to change.