This Is The Reason You Haven't Gotten Out Of Debt

Summary

The Ramsey Show Highlights

Episode Title: This Is The Reason You Haven't Gotten Out Of Debt
Date: March 27, 2026
Hosts: Dave Ramsey, Rachel Cruze
Guest Caller: Stephanie

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Episode Overview

In this episode, Dave Ramsey and Rachel Cruze advise Stephanie, a nurse who recently transitioned from a high-earning travel position to a lower-paid staff role after having a baby. Stephanie and her husband are struggling to pay off $150,000 in debt on a $162,000 combined income while navigating child care and a recent home purchase. The discussion zeroes in on the real reasons they haven’t made more progress on their debt, exploring budgeting, financial discipline, and the importance of eliminating excuses.

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Key Discussion Points & Insights

Background on Stephanie's Situation

• Income Changes:
  • Stephanie shifted from travel nursing ($240,000/year) to a local staff job ($80,000/year) after having a baby ([00:06]–[00:31]).
• Household Income:
  • Combined income is now $162,000 with her husband earning $82,000 ([00:32]–[00:34]).
• Debt Load:
  • They owe $150,000, which includes student loans, personal loans (for home repairs and credit card debt), and a mortgage separate from the debt figure.

Spending Habits & Prioritization

• Why Debt Remains:

  • Dave points out tough truths: “The reason you haven’t gotten out of debt is you put paying off the debt further down your list of priorities.” ([01:36])
  • Stephanie and her husband bought a house and did renovations while in debt, choosing perceived necessities over financial progress.

• On Frugality:

  • “You were making $240,000 a year and you didn’t pay off hardly any debt. You’re not frugal.” — Dave Ramsey ([02:12])
  • Key message: Internal self-image doesn’t align with actual money habits.

Budget Breakdown & Obstacles

• Major Expenses:

  • $1,000 monthly consolidated debt payment
  • $2,400 mortgage payment
  • $1,900 monthly for childcare with a babysitter, as daycare slots are unavailable ([04:43]–[05:08])

• Budget Challenges:

  • After necessities, very little is left over each month for extra debt payments.
  • Rachel raises the question: Could they live on just one income for two years? ([03:02])

Debt Structure & Financial Moves

• Debt Details:
  • $60,000 student loans, $100,000 personal loans (home repairs, credit cards), cars paid off ([05:37]–[05:53])
• Home Equity:
  • Owe $281,000 on a home worth ~$500,000 ([06:12]–[06:17])
• Possible Solutions:
  • Refinancing mortgage discussed as a backup, but Dave does not recommend it.

The “Scorched Earth” Method

• Sacrifice Required:

  • Dave and Rachel urge “scorched earth” budgeting: “Beans and rice. Rice and beans, nothing. Spending nothing.” — Dave Ramsey ([06:46])
  • Every luxury to be cut; maximum focus on paying off debt.

• Increase Income Options:

  • Consider overtime, extra shifts, and side work to generate more cash.

• Retirement Contributions:

  • Pause all retirement contributions temporarily to free up $14,000 annually ([07:21]–[07:32])
  • “If you stop that, that’s $7,000 freed up. So pause retirement.” — Rachel Cruze ([07:26])

Mindset and Behavior Challenges

• Facing Excuses:

  • Dave’s firm stance: “If every time we bring up something on how you can get out of debt, you tell me why you can’t do it, I can’t help you.” ([07:43])

• No Rationalizing:

  • “No excuses, no rationalizations. You got to end it.” — Dave Ramsey ([09:21])

• Sense of Urgency:

  • “You have got to treat this like your hair is on fire.” — Dave Ramsey ([08:09])
  • Stress on urgent, unified action as a family.

• Living Within Means:

  • Critique of “nanny land” spending: “When you have $150,000 in debt and you make $162,000, you don’t live in nanny land.” — Dave Ramsey ([08:44])

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Notable Quotes & Memorable Moments

• On Priorities:

  • “The reason you haven’t gotten out of debt is you put paying off the debt further down your list of priorities.”
    — Dave Ramsey, [01:36]

• On Perceived Frugality:

  • “You were making $240,000 a year and you didn’t pay off hardly any debt. You’re not frugal.”
    — Dave Ramsey, [02:12]

• On Excuses:

  • “If every time we bring up something on how you can get out of debt, you tell me why you can’t do it, I can’t help you.”
    — Dave Ramsey, [07:43]

• On Sacrifice:

  • “The deeper you sacrifice, the faster you’re going to get out. And that may mean him working extra at night, too. Stephanie working weekends, bringing in even more income over time.”
    — Rachel Cruze, [06:46]

• On Urgency:

  • “You have got to treat this like your hair is on fire. We’ve got to treat this like the future of our family is dependent on getting rid of this stupid debt.”
    — Dave Ramsey, [08:09]

• On Justifying Expenses:

  • “You don’t live in nanny land. Nanny land is more income than you make and less debt than you’ve got. So that’s where you are.”
    — Dave Ramsey, [08:44]

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Timestamps for Key Segments

• [00:06] – Stephanie describes her income drop post-baby
• [01:36] – Dave identifies lack of prioritization as the reason for lingering debt
• [02:12] – Dave challenges the idea that the couple is frugal
• [03:06] – Discussion of living on one income; breakdown of expenses
• [04:43] – Childcare cost details and resultant budget constraints
• [05:37] – Debt details: student loans, personal loans, home repairs
• [06:12] – Home equity situation
• [06:46] – “Scorched earth” budgeting approach explained
• [07:21] – Suggestion to pause retirement and free up cash
• [07:43] – Dave calls out rationalizations and excuses
• [08:09] – Sense of urgency and seriousness underlined

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Summary & Takeaways

• Main Theme: The true barrier to getting out of debt isn’t just income or expenses—it’s priorities, intensity, and the willingness to sacrifice. No amount of justifying or good intentions can replace focused action and a willingness to endure short-term discomfort for long-term gain.
• Action Steps:
  • Audit and slash the budget (“scorched earth” approach)
  • Temporarily pause all retirement contributions
  • Seek ways to increase income without undue family strain
  • Cease all luxury and unnecessary spending
  • Approach debt reduction with urgency and unity—“like your hair is on fire”

The episode offers a blunt but hopeful perspective: If Stephanie and her family make radical, unified sacrifices now, they can be debt-free within 2–3 years, setting up a strong financial future for themselves and their child.

Transcript

[Dave Ramsey]

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[Stephanie]

My husband and I recently had a baby. The last few years I've worked as a travel nurse. And because we just had the baby, I took a position as a staff making three times less than I was making before. So we're just trying to figure out how to pay off 150,000 without me going back to traveling.

[Dave Ramsey]

What are you making? His staff?

[Stephanie]

I make about 80k a year.

[Dave Ramsey]

What does he make?

[Stephanie]

He makes 82.

[Dave Ramsey]

82. So we have 162. And you were making bank as a travel nurse. But that's not a good idea with a brand new baby. I agree.

[Stephanie]

Right. We decided to come back home, but it's taken a huge hit on us financially because I'm so. I don't want to say I'm used to the money, but.

[Dave Ramsey]

But you're used to the money.

[Stephanie]

Yeah.

[Dave Ramsey]

Yeah. That's okay. That's a normal thing.

[Rachel Cruze]

I mean, 240 versus 80s different. That's okay to say.

[Stephanie]

Yeah.

[Rachel Cruze]

Yep.

[Dave Ramsey]

So were you making huge progress when you had the 240?

[Stephanie]

We did make some progress, but not as much as we wanted to.

[Dave Ramsey]

What did you do? What were you doing? Where were you screwing off?

[Stephanie]

Well, I mean, we purchased a house that was a. I don't want to say it was a complete fixer upper, but we put about 100.

[Dave Ramsey]

You bought a house while you were trying to get out of debt? Well, that doesn't work.

[Stephanie]

Yeah. At least we have a house now though. And we wanted to have the house before we had the baby, so that's kind of what happened.

[Dave Ramsey]

Okay, well, the reason you haven't gotten out of debt is you put paying off the debt further down your list of priorities.

[Stephanie]

Yeah,

[Dave Ramsey]

that's going to have to change. And so your priorities don't include eating out anymore. Your priorities don't include going on vacation anymore. Your priorities don't include spending $80,000 fixing up the nursery for a newborn who doesn't even know that stuff's there.

[Stephanie]

Right.

[Dave Ramsey]

Gotcha.

[Stephanie]

So the thing is, my husband and I are actually pretty frugal.

[Dave Ramsey]

No, you're not.

[Stephanie]

I would say we are.

[Dave Ramsey]

No, you were making $240,000 a year and you didn't pay off hardly any debt. You're not frugal.

[Stephanie]

Well, we're trying to be.

[Dave Ramsey]

No, in your mind you are, but you're not. The reality is you spent the money. That's not. That's the opposite of frugal.

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[Dave Ramsey]

So you're going to have to get frugal, though, if you want to make progress.

[Rachel Cruze]

Could y' all live on one income for two years?

[Dave Ramsey]

Like 80 grand?

[Stephanie]

Yeah, I mean, that's what we're trying to figure out. We have. We consolidated our loan into $1,000 payment, and then our mortgage is about 2400. So that is our debt, period. We have it all together and focused into two bills. So one is our mortgage and two is our. Our personal debt.

[Dave Ramsey]

Okay, well, if you can, you know, buy food, lights and water and throw money at this debt. 75 a year gets you out of debt in two years, right?

[Stephanie]

How? I said how?

[Dave Ramsey]

Well, you make 160.

[Stephanie]

Yeah, but how do we. How do we do that? How do we live on one income when. When we pay like 2000 for one debt and then 2400 for another?

[Dave Ramsey]

Well, I thought you said it was a thousand. But the 2000 go towards the debt is part of the 75.

[Stephanie]

Okay.

[Rachel Cruze]

Yeah.

[Stephanie]

So, I mean, they get more focus.

[Rachel Cruze]

Yeah. Are you guys on a budget? Stephanie?

[Dave Ramsey]

162. 162 minus 75.

[Rachel Cruze]

Okay, I got you, Dave. Here, you cough. Turn off your mic and cough. Stephanie. Are you guys doing a budget, a written budget?

[Stephanie]

We are, and I have it in front of me.

[Rachel Cruze]

You do? Okay, so where are things that. What is left after you pay your mortgage? Like all the necessities that you have to have. What is left? How much is left?

[Stephanie]

I'm looking at the monthly total. Not very much. We're putting 1900 into child care alone.

[Rachel Cruze]

Into child care? 19.

[Dave Ramsey]

Wait a minute. Why are you. I thought you. Oh. Oh, yeah. For one baby.

[Stephanie]

For one baby, we pay $20 an hour.

[Rachel Cruze]

Is it daycare?

[Stephanie]

No, it's a babysitter. We couldn't find any openings for daycare around us. That's what we wanted to do, but we're paying for a babysitter, so it's 20 bucks an hour. Okay, so.

[Rachel Cruze]

So. So the. I mean, the reality is, Stephanie, that you guys. It may take you three years. I don't Know the plan. But you. But to have a level of intensity that you guys have never had before is what this is going to require to get out of this. And is the 150. Was that student loans? What was it?

[Stephanie]

So 150 total. So we have about 60 in student loans and then 100,000 in personal loans.

[Rachel Cruze]

And personal loans. Is that car debt, too?

[Stephanie]

No, we paid off all our cars.

[Rachel Cruze]

What did you use the personal loan for?

[Stephanie]

So we. It was a combination of a roof plumbing on our house.

[Rachel Cruze]

Oh, for the house?

[Stephanie]

Yeah. So it was a combination of our roof plumbing on our house, and then we had some credit card debt.

[Dave Ramsey]

Okay, what do you owe on your home?

[Stephanie]

Currently we owe 281,000.

[Dave Ramsey]

What is it worth?

[Stephanie]

I would say about 500,000.

[Dave Ramsey]

Yeah. Okay. Well, some of what you're paying off is not consumer debt. It was part of purchasing the home. So, you know, if you rolled some of that into a refinance, that wouldn't be the end of the world. But I wouldn't do that. I think you guys make enough to plow through this, but you're going to have to just look at this budget and go scorched earth. Beans and rice. Rice and beans, nothing. Spending nothing.

[Rachel Cruze]

Yeah, so that. That's what's. I mean, yeah, it. It is. It's just. It's. It's the mindset of having to. The deeper you sacrifice, the faster you're going to get out. And that may mean him working extra at night, too. Stephanie working weekends, bringing in even more income over time. But again, the deeper and faster you sacrifice, the faster you're going to get out. And the less you sacrifice, the less you kind of make everything a little bit more comfortable, the longer it's going to be of that process. So it really. It comes down to families, I mean, honestly, looking at each other and just choosing like, okay, have you stopped all

[Dave Ramsey]

your contribution to retirement

[Stephanie]

paying into that? We're paying about $7,000 each year to both of us.

[Rachel Cruze]

Oh, you are? Okay. So if you stop that, that's $7,000 freed up. So pause retirement.

[Dave Ramsey]

14.

[Rachel Cruze]

Yeah. Pause retirement temporarily.

[Stephanie]

We have a lot of money in our retirement, but we want to make sure that we're set for.

[Rachel Cruze]

You're going to be fine, Stephanie. You're. Yeah, but this 150 is hanging, Stephanie.

[Dave Ramsey]

If every time we bring up something on how you can get out of debt, you tell me why you can't do it, I can't help you.

[Stephanie]

Oh, no, I don't mean to be like that. I'm Just.

[Dave Ramsey]

Well, you are. So. I mean, you got. You got to stop doing that. Okay? You need to stop retirement. You need to go through this budget with a scorched earth idea and burn the place down. You make a tenth of. I mean, you make a third of what you used to make. And you weren't even making it on that, and you were calling yourself frugal. So you've got to sit down and start looking at this and going, okay, we have got to treat this like our hair is on fire. We've got to treat this like the future of our family is dependent on getting rid of this stupid debt. Regardless of how we got into it, this is how we get out. We stop all retirement. We stop eating out. We stop going on vacations. We stop anything that looks like a luxury, and we plow into this debt like our life depended on it. And in two years, you could be done, maybe three. But two, you should be done. You can pick up shifts at the er. You can. He can pick up shifts here and there. The good news about nursing is you can always up your income temporarily without destroying the family, without going back on the road. I agree with your decision to come off the road. The baby, I agree with that. But then we went and hired a nanny, basically. And you know when you have $150,000 in debt and you make 162,000, you don't live in nanny Land. That's not Nanny land. Nanny land is more income than you make and less debt than you've got. So that's where you are.

[Rachel Cruze]

And for a period of time. For a period of time.

[Dave Ramsey]

Just for a short period of time, what have we got to do to go crazy to clean up this mess we've made? And no excuses, no rationalizations. You got to end it. Create your free every dollar budget today. The simplest way to budget for your life.