We Make $300,00 And Can't Pay Off Debt

Summary

The Ramsey Show Highlights

Episode: We Make $300,000 And Can't Pay Off Debt

Date: November 24, 2025
Hosts: Dave Ramsey, Christy
Guest Caller: Carlos

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Episode Overview

This episode features a call from Carlos, a high-income earner who, despite making around $300,000 a year with his wife, finds themselves struggling with debt after previously reaching financial peace. The conversation centers on how Carlos and his family backtracked financially—moving from being debt-free and mortgage-free (Baby Step 7 in Ramsey methodology) to accumulating credit card and car debts. Dave and Christy provide candid advice, address the behavioral pitfalls behind their choices, and illustrate why ongoing discipline with spending is essential, especially as income rises.

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Key Discussion Points & Insights

1. Carlos’s Financial Journey: From Baby Step 7 to Backsliding

• Background:
  • Carlos (54) and his wife (52) together earn about $300,000 annually (Carlos $115k, wife $170k).
  • Three children: one in college, two in high school.
  • In 2020, reached Baby Step 7 (debt-free, including the mortgage).
• Reversal:
  • After paying everything off, they borrowed again for lifestyle upgrades (cars for kids, travel, luxury car).
  • Currently facing $29k in 0% credit card debt, $17k car loan, and a car lease.
• Notable Quote
  • Carlos: "For one split second, and around this time in 2020, right in the middle of pandemic, we were on baby step seven. Everything we had paid off the house. We did everything. But now..." (00:06)

2. How Did This Happen? The Temptation of Lifestyle Creep

• Post-pandemic, Carlos and his wife splurged—travel, Mercedes, new cars for kids.
• Hosts use humor but highlight the poor financial decision to "go back to the start after finishing the marathon."
• Christy calls out the regression:
  • Christy: "Carlos, what did you do backwards? We're supposed to go forwards." (00:51)
  • Dave: "You cross the marathon finish line, you're like, you know what? I’m gonna go back to the starting line and start again." (00:58)

3. Current Debt Situation

• $29,000 in credit card debt (0% interest)
• $17,000 remaining on a car loan for one child (paying it off aggressively)
• One vehicle lease, other cars paid off
• No new mortgage taken out

Carlos Confirms Their Debts

• "We have about $29,000 in zero interest credit card debt... then we have one lease of a vehicle... daughter's car paid off, second son... brand new car... about 17 grand left." (02:02)

4. Behavioral Insights: The Real Cause

• Carlos blames Miami lifestyle, post-COVID FOMO, and high consumer temptation.
• Dave and Christy push back, emphasizing personal responsibility and the need for “grown-up” behavior regarding money.
• "You didn’t have to throw a huge kegger... take ownership. You did it." – Dave Ramsey (03:42, 04:03)
• "Your behavior has gotten completely out of control." – Christy (04:38)

5. Living Below Means—A Wealth Secret

• Despite $300k income and no house payment, they’re still in debt due to impulse spending.
• Dave: “If you guys lived, you don’t have a house payment, okay?... If you just lived on a hundred thousand, God forbid, you’ll have $200,000 extra.” (04:20)

Christy's Direct Advice

• "Cut up the credit cards, and we're going to live life differently. I don't know if you're going to do it, Carlos. I don't know." (09:27)

6. Lessons from a Government Furlough

• Carlos, a federal employee, is currently not getting paid due to a shutdown; family survives on his wife’s income alone.
• Realizes they can live on one income and should use the other to erase debt quickly.
• "With this government shutdown... we've proven one thing... we can live off your check and then use my check to pay off this stuff." – Carlos (05:48)

7. Long-Term Principles: Peace, Responsibility, and Example for Kids

• Dave challenges Carlos to think of peace of mind and the impact of modeling strong financial habits for their kids.
• Christy: "What are you setting for them? The example? ... We have a level of limits and boundaries, because that’s what money... is part of the name of the game." (08:30)
• The episode ending stresses the need for maturity and planning, not impulsive decision-making.
• Dave: "The greatest thing you can give to your wife is to say, 'hey, for the first time in our marriage, I want to act like grownups.'" (07:42)

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Notable Quotes & Memorable Moments

• Christy, on recidivism:
  "We get people like Carlos every now and then that they do the baby steps, and then they go backwards." (03:13)
• Dave on Responsibility:
  "Be a grown up, bro." (05:07)
• Carlos, on lifestyle temptations:
  "The brand new Royal Caribbean ship is docking next month. And I’m like, oh, we got to check that out." (05:10)
• Dave, humorously exasperated:
  "Oh my gosh, dude. All right, you’re giving me hemorrhoids, Carlos." (05:14)
• Christy, on parenting by example:
  "What are you setting for them, the example? ... I'd rather set an example of, hey, we have a level of limits and boundaries." (08:30)
• Closing Encouragement:
  "I want peace for you. I just can't want it more than you want it for yourself." – Dave Ramsey (09:35)

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Timestamps for Key Segments

• 00:06 – Carlos recounts reaching debt freedom pre-pandemic
• 00:45–01:33 – Hosts grill Carlos about how he slipped back into debt
• 01:35–02:40 – Carlos details how spending spiraled post-COVID
• 02:42–03:12 – Hosts clarify current debts and income
• 03:29–04:03 – Carlos and Christy discuss peace of mind vs. current situation
• 04:10–05:18 – Dave and Christy emphasize urgency, mock excuses; Carlos confesses to lifestyle inflation
• 05:24–06:02 – Carlos discloses job situation due to government shutdown, insight on living on one income
• 07:05–08:30 – Dave and Christy challenge Carlos to mature financially and think of their children’s example
• 08:30–09:26 – Christy urges behavioral change, details practical steps forward
• 09:35 – Dave wraps up with a final appeal for peace and discipline

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Episode Takeaway

Even with a high income, discipline and living below your means are the only routes to lasting financial peace. Succumbing to lifestyle inflation and “treat yourself” mentality can undo years of careful planning. Dave and Christy remind listeners that peace with money stems not from how much you make, but from how intentionally you manage—and limit—what you spend.

Action steps, according to the hosts:

• Cut up the credit cards, pay off debt aggressively (can be done in 2–3 months)
• Live on significantly less than you make—practice restraint, not deprivation
• Model good financial behavior for your children
• Don’t confuse a high income with permission to spend impulsively
• “Devise a plan and follow it”—be the grownups in your own financial story

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For more budgeting help, the hosts recommend using the EveryDollar app (no ad segment in this summary).

Transcript

[Dave Ramsey]

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

[Carlos]

For one split second in 2020. My wife and I. I'm 54. She's 52. We make decent money. She makes about 170. I make about 115. We have three children. One of them is in college, two in high school. And for one split second, and around this time in 2020, right in the middle of pandemic, we were on baby step seven. Everything we had paid off the house. We did everything. But now we're kind of like, okay, obviously, we have step one, we have step four. We invest probably 25% of our entire, entire, entire income into retirement.

[Dave Ramsey]

Hold on. Did you go back after you paid off everything, did you go back and borrow some more money?

[Carlos]

Oh, yes.

[Christy]

Oh, no. Carlos, what did you do backwards? We're supposed to go forwards. Like, 1, 2, 3, 4, 5, 6.

[Dave Ramsey]

You won.

[Carlos]

Yeah.

[Dave Ramsey]

We like you cross the marathon finish line. You're like, you know what? I'm gonna go back to the starting line and start again.

[Christy]

What happened?

[Dave Ramsey]

Meet everydollar budgeters, Christy and Steve. They used to fight about money.

[Christy]

I'm the spender.

[Dave Ramsey]

I'm definitely the saver. Now that they budget with every dollar, they're on the same page.

[Carlos]

Money is definitely one thing we do.

[Dave Ramsey]

Not ever fight about.

[Christy]

Having the budget gave me the permission to spend.

[Dave Ramsey]

Knowing that the money is in each.

[Carlos]

Category, it just allowed us to work together better.

[Dave Ramsey]

Now that's what we call a win win.

[Christy]

Now I just have to pick paint colors.

[Dave Ramsey]

We can't help you with that.

[Carlos]

Everydollar. Create your free account today.

[Christy]

What happened?

[Carlos]

Well, like I said, we were ready to start step seven, and, you know, things started opening up after Covid, and we're like, we would like to go here. We like to go there, and we like to get this Mercedes, and next thing you know, we're.

[Dave Ramsey]

Oh, Carlos. Oh, no. You fell in.

[Christy]

I live in Miami.

[Dave Ramsey]

You went full Miami.

[Christy]

You went full South Beach. Oh, okay.

[Carlos]

Yeah.

[Dave Ramsey]

So how bad is it? How much do you owe right now, brother?

[Carlos]

Look, we have about $29,000 in zero interest credit card debt with the work we're trying to pay off. And then we have. We have one lease of a vehicle, and the other vehicle is all the other vehicles are paid off. So we decided to buy a car for each one of our kids and pay it off. So our daughter's car is paid off. Our second son. Son's car is. We only. It's brand new car. We have about 17 grand. We're going to pay it off in exactly one year because we're sending three times the payments on a very low interest loan. My car is paid off, so 29,000 in credit card debt and 17,000 in.

[Christy]

A car loan and a car lease.

[Dave Ramsey]

Wait, you said your wife makes what, 170 and you make what, 115? 115.

[Christy]

Oh, 15.

[Dave Ramsey]

Okay, so you guys make about 300k.

[Carlos]

You.

[Dave Ramsey]

You said at the beginning of the call, y' all do pretty well. Y' all are doing incredibly well.

[Christy]

Okay, so, Carlos. Okay, is that it? The credit cards, the lease, car, and then the car payment. Is that it?

[Carlos]

That's it.

[Christy]

Did you take out a second mortgage after the house was paid off?

[Carlos]

Oh. Oh, hell no.

[Dave Ramsey]

Okay. All right. Good, good, good, good.

[Christy]

At least we are on the same page there. Okay, I just need everyone to hear this, because this doesn't always happen. We get Carlo. We get people like Carlos every now and then that they do the baby steps, and then they go backwards. So I just want to know from you, Carlos, did you have more peace in 2020, financially or today?

[Carlos]

Yes, in 2020. But then the whole world opened up again, and I was screwed.

[Christy]

Why were you.

[Dave Ramsey]

No, you weren't screwed. You were.

[Christy]

You chose it.

[Dave Ramsey]

Yeah.

[Christy]

You could have kept on going into.

[Carlos]

Well, you know, the whole world opened up.

[Dave Ramsey]

No, no, you know, hey, listen, homie, you. You've got to take ownership of, like, it's like mom and dad went out of town, and you're in high school, and you're. You didn't have to throw a huge kegger, and you're like, I'm going to.

[Christy]

It's like mom and dad. Listen, y' all went out of town. What was I supposed.

[Dave Ramsey]

We had to do it. There was five kegs we had to go get. We had to fill them all up. And so listen.

[Carlos]

Yeah.

[Dave Ramsey]

Take ownership. You did it. But here's the thing, dude. 300 grand a year. You can have this paid off, like, in three months if you'll just suck it up.

[Christy]

Yes. Yes.

[Carlos]

Yeah.

[Dave Ramsey]

Why are you. Why are you waiting a year.

[Carlos]

A year to pay off the car, pay off everything?

[Christy]

No, Carlos, if you. If you guys lived, you don't have a house payment, okay? So I know you have all the. I know you have some car payments, but if you just lived on a hundred thousand, God Forbid, you'll have $200,000 extra.

[Dave Ramsey]

And you put. You put a quarter of your. Of your money away every month.

[Carlos]

Stop.

[Christy]

For two months, y' all have to be able to say no to yourself. Yalls. Behavior has gotten completely out of control.

[Carlos]

Yeah. Yeah. Well, we like to travel. That's our. That's our key.

[Christy]

So do I. But I do, too. I can't go to Italy right now. Like, I can't. Like, you know what I mean?

[Carlos]

No, I know. It's different.

[Christy]

They look pretty on Google image. Like, but I.

[Dave Ramsey]

No, see, you're blaming. You're blaming Miami.

[Carlos]

You're blaming the number one international port of the. Of the world. Doesn't matter.

[Dave Ramsey]

Be a grown up, bro.

[Carlos]

The brand new Royal Caribbean ship is docking next month. And I'm like, oh, we got to check that out.

[Dave Ramsey]

Oh, my gosh, dude. All right, you're giving me hemorrhoids, Carlos.

[Christy]

I don't know, Carlos. I don't think you really want to be that.

[Dave Ramsey]

You don't.

[Christy]

I think you're. I think you are fine with your life. That's how I feel.

[Dave Ramsey]

What do you do for a living?

[Carlos]

Go. Well, that's the other thing. I'm not getting paid right now because I'm a federal employee, but my wife is not. But at least we have her check. But here's the thing. We've noticed that we can live off her check.

[Dave Ramsey]

No way. You mean y' all barely scratch and claw on $170,000? Just tell me more, Carlos. Yeah, we have a live studio audience out here, and they're all just sobbing for you. They're devastated for you.

[Carlos]

I told my wife last night. I go, you know, I'm gonna call the show because we've proven one thing with this government shutdown, with me not getting paid for a month, we can live off your check and then use my check to pay off this stuff, kid.

[Dave Ramsey]

God, if you all can scratch by. Hold on. You've missed two humongous lessons, though. You missed the two bigger lessons, which is y' all make a bunch of money right now, and Covid happened, and then y' all made a whole bunch more money, and then the leaders of our government decided to sit in a sandbox and throw crayons at each other. And so what the. The. The thing you're missing here is there's always another. There's always a day after the party, right? And in between those days, after the party, you live like this is the last party that's going to happen, right? And if you go back to 2020, if you had not have just gone bananas, if you had lived just a regular, ridiculous life, you would have taken a whole bunch of vacations and gotten some nice cars, you wouldn't have bought your Kids. Brand new ones that depreciated 20% the day they drove them off the lot. But you would. Your kids would be fine. Y' all would be fine. And you'd have 200 grand in cash in the bank.

[Carlos]

Oh, you're killing me.

[Dave Ramsey]

Okay, I know this is you. And listen, this government shutdown is going to happen, and then you're gonna go. You're gonna be like, dude, we can live off my check. And you're gonna pay all this off in three months, which is all it's going to take, or maybe two months for you guys. And then you're gonna. That. You're gonna be like, yeah, boats in the harbor. And you're gonna go down there, and you're gonna start this whole thing over again. And then one of y' all is gonna get laid off, or one of you is gonna get the call that, hey, go to the hospital, because one of your kids. Like, you're gonna get those calls.

[Christy]

And.

[Dave Ramsey]

And so let this be the final time.

[Carlos]

Yes, 100%. I think it's a lot easier to sell to my wife if we can say we can live up one of our checks and take the other one.

[Dave Ramsey]

And there's a layer beneath that. You're not. You're not hearing me. The greatest thing you can give to your wife is to say, hey, for the first time in our marriage, I want to act like grownups.

[Christy]

That's the hard thing for me. Carlos. I know we're joking around and having fun, because, listen, I love a great trip. Like, it's fine. Like. Like the things you're saying. A nice car, nice trip. Those are not things.

[Dave Ramsey]

They're awesome things.

[Christy]

But you're doing it out of order, and you're doing it in a level of impulse and a little bit of just kind of immaturity. And so there's. You know, Dave always says that children do what feels good. Adults devise a plan and follow it. Like, there's a level of growing up. And to say this, too, Carlos, you have two kids in the. Do you. Are your kids still in the house?

[Carlos]

All three kids are still in the house. Yeah. The college one has a year left, and the other.

[Christy]

That's fine. Yeah, yeah. But I'm just saying, like, what are you setting for them? The example? Yeah, I'd rather set an example. Example of, hey, we have a level of limits and boundaries, because that's what money. We have to. With money like that, that is part of the name of the game. We can always make more. And all of it. That's great. It's not a scarcity mindset. But we have to live within our means because that creates a level of peace and stability. So when I get furloughed and I don't get a paycheck, we're totally fine. And guess what? We can still go on the Royal Caribbean because we have no debt and we're able to save up and, like, we have a great income, but we're living with a level of reality. And there's a little bit that you guys are just like, oh, that feels right. Let's just go, go, go. And what scares me is you both sound like that, you and your wife. Usually there's like one boring person in the marriage that doesn't want to spend or do anything, and then you have the partier. But both of you, I mean, that's what it's going to take, Carlos, for you guys to buckle down and just say, hey, we are going to live on less than we make significantly.

[Dave Ramsey]

You can live off half of.

[Christy]

Clean up the sleeves, clean up, clean up the car and the credit cards, cut up the credit cards, and we're going to live life differently. I don't know if you're going to do it, Carlos. I don't know.

[Dave Ramsey]

But I want peace for you. I just can't want it more than you want it for yourself. Create your free every dollar budget today. The simplest way to budget for your life.