"You're Not Bankrupt, You Just Don't Have A Plan"

Summary

Episode Summary: "You're Not Bankrupt, You Just Don't Have A Plan"

Release Date: June 2, 2025
Host: Ramsey Network
Guests: Dave Ramsey, Dr. John Deloney

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Introduction: A Call for Help

In this episode of The Ramsey Show Highlights, Dave Ramsey addresses a distressing call from a listener grappling with significant debt. The caller, married for 13 years, shares that his household is drowning in $56,000 of debt, spread across credit cards, payday loans, and a van payment. Overwhelmed by financial strain, he's contemplating bankruptcy as a potential solution.

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Breaking Down the Debt

Dave Ramsey meticulously dissects the caller's financial situation to identify the root causes of his distress:

• Van Loan: The caller owes $26,000 with a monthly payment of $598.
• Payday Loans: Accumulated debt amounts to $15,000.
• Credit Cards: Approximately $15,000 across various cards.

Notable Quote:
"So you're not bankrupt. You're just scared. And you live in the middle of chaos, and y'all spend too much." – Dave Ramsey [03:20]

Ramsey emphasizes that with a combined household income of $140,000 and monthly expenses totaling $3,600 (rent and daycare alone), there’s a significant "leak" in the budget that needs addressing.

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Identifying Financial Leaks

Ramsey guides the caller through identifying where the money is slipping away:

• Daycare Costs: $1,400 monthly for two children.
• Rent: $2,200 monthly.

Despite these substantial expenses, the total doesn't account for the entire $140,000 income, indicating overspending elsewhere.

Notable Quote:
"There's a leak in this boat that caused these loans." – Dave Ramsey [03:14]

Ramsey challenges the caller to scrutinize their spending habits, highlighting that the accumulation of debt over five years suggests uncontrolled and chaotic spending patterns.

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Strategizing a Path Forward

Rejecting the notion of bankruptcy as the first solution, Ramsey outlines a structured plan to regain financial stability:

1. Adjusting Withholdings:
   "You're over withholding. That's your money you're giving to them and they give it back to you in April." – Dave Ramsey [01:47]
   Ramsey advises modifying the W-2 forms to reduce withholding by the amount of the previous year's tax refund, thereby increasing immediate cash flow.

2. Budget Reevaluation:
   Ramsey underscores the necessity of a "serious spending come to Jesus meeting" between the caller and his spouse to overhaul their budget and reduce unnecessary expenses.

3. Asset Management:
   Considering the van loan, Ramsey suggests either selling the van now or developing a plan to pay it off, emphasizing that selling it could alleviate significant financial pressure.

Notable Quote:
"You're not bankrupt. You're just scared, and you need to free yourself by cutting to nothing." – Dave Ramsey [05:05]

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Emotional and Psychological Support

Understanding the emotional toll of financial distress, Ramsey offers empathetic support:

• Reassurance:
  "You're not bankrupt, my friend. You're just scared." – Dave Ramsey [06:27]

• Encouragement:
  "As soon as you start doing it, the fear is going to leave your voice, and there's going to be a weird thing start happening." – Dave Ramsey [06:53]

Ramsey emphasizes that taking control of finances will not only alleviate monetary stress but also improve personal relationships and overall well-being.

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Expert Insight: Dr. John Deloney

Dr. John Deloney joins the conversation to further support the caller:

• Acknowledging Past Struggles:
  "Have you made some mistakes in the past? Absolutely. We all have." – Dr. John Deloney [07:59]

• Supportive Tools:
  Dr. Deloney mentions resources like Financial Peace University and Dave's book, Total Money Makeover, to equip the caller with the necessary tools for financial recovery.

Notable Quote:
"Today's day one all over again. You in?" – Dr. John Deloney [08:04]

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Conclusion: Building a New Financial Future

Ramsey reassures the caller that with dedication and the right plan, financial freedom is attainable. He highlights the availability of support systems, including counseling from Ramsey's team, to guide the caller through this transformative journey.

Final Encouragement:
"You guys are not bankrupt. You're just scared, and you don't have the tools. We can show you how, man." – Dave Ramsey [08:05]

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Key Takeaways

• Assess and Adjust: Regularly review and adjust financial plans to prevent debt accumulation.
• Open Communication: Engage in honest discussions with family members about finances.
• Utilize Resources: Leverage financial planning tools and educational programs for guidance.
• Emotional Resilience: Addressing financial issues also involves managing emotional and psychological stress.

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Resources Mentioned

• EveryDollar App: "Start budgeting for free today."
• Financial Peace University
• Total Money Makeover by Dave Ramsey

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This episode serves as a poignant reminder that financial struggles are often rooted in a lack of planning rather than insurmountable debt. With the right strategies and support, overcoming financial challenges is within reach.

Transcript

[Dave Ramsey]

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

[Caller]

My wife and I basically live paycheck to paycheck. We are in so much debt that we're drowning, and I'm trying to figure out if we should file for bankruptcy.

[Dave Ramsey]

Oh, man, I'm sorry. It's pretty scary. How long you been married?

[Caller]

13 years.

[Dave Ramsey]

Wow. What kind of debt have you got?

[Caller]

So it's split between a few credit cards, some payday loans, and a van payment.

[Dave Ramsey]

What do you owe on the van?

[Caller]

We owe 26,000.

[Dave Ramsey]

How much is the payment?

[Caller]

$598.

[Dave Ramsey]

Good Lord. And how much payday lender stuff have you got?

[Caller]

$15,000.

[Dave Ramsey]

Okay. All right. And. And then how much credit cards have you got?

[Caller]

So there is a loan for about 13,000. That's just like a regular loan. And then there's a few thousand dollars in credit card.

[Dave Ramsey]

Okay, so another 15 in those. Okay, so 30 and 26. And so we're talking about $56,000 in debt, right?

[Caller]

Yes, sir.

[Dave Ramsey]

Do you own a home?

[Caller]

No, sir. We rent.

[Dave Ramsey]

And you've been married, did you say 13 years?

[Caller]

Yes, sir.

[Dave Ramsey]

Okay, and what do you guys make?

[Caller]

Together we make about 140,000.

[Dave Ramsey]

Okay. All right. So how much is your rent?

[Caller]

$2,200 a month.

[Dave Ramsey]

Okay. And how much was your tax refund last year?

[Caller]

Last year it was $4200.

[Dave Ramsey]

I feel like, okay, that's $400 a month almost. That's coming out of your check too much. That will help you bring that home. If you readjust your W2s. Step one. Did you get that one?

[Caller]

Yes, sir.

[Dave Ramsey]

You're over withholding. That's your money you're giving to them and they give it back to you in April. You need that money right now because you're living paycheck to paycheck. So change your W2 by 4200 a year, divide that out by the number of checks and have HR do that as soon as you get off the phone. Step one, now $140,000. You guys are spending some money somewhere. Do you eat out every five children? Okay. Do you eat out every night?

[Caller]

No, sir.

[Dave Ramsey]

Okay.

[Caller]

We pay a lot of money in daycare. And how much? So for the two year old is. It's $40 a day, so about 800amonth. And then for the six and seven year old, each of them is $152 a week. So another.

[Dave Ramsey]

So you got 1400amonth, 1400amonth going out in daycare. All right?

[Caller]

Yes, sir.

[Dave Ramsey]

And 2200 in rent?

[Caller]

Yes, sir.

[Dave Ramsey]

Still doesn't add up to 140,000. Dude, there's a leak.

[Caller]

Some of these loans somebody.

[Dave Ramsey]

No, there's a leak in this boat that caused these loans.

[Caller]

Yes, sir, there is.

[Dave Ramsey]

Yeah. All right, you're not bankrupt. You're just don't have a plan. Okay, so if you file bankruptcy, you could get rid of the credit cards and you could get rid of the payday loans, about $30,000. You can't get rid of the van loan unless you give up the fan. You know that?

[Caller]

Yes, sir.

[Dave Ramsey]

So either you, if you're going to give up the van anyway in bankruptcy, go ahead and just sell it now, or let's set about a plan to pay it off. What's your other car?

[Caller]

It's a Toyota Camry. It's paid off.

[Dave Ramsey]

I know what age.

[Caller]

It's a 2018, sir.

[Dave Ramsey]

Okay. All right. And what do you do for a living?

[Caller]

I'm a repair technician for really expensive equipment.

[Dave Ramsey]

Okay, cool. And what's your wife do?

[Caller]

She works in children's, like ABA therapy.

[Dave Ramsey]

What does she make.

[Caller]

24, 10 an hour.

[Dave Ramsey]

Okay. She's barely making enough to deplate to pay for daycare. She's not making enough to pay for daycare and the van that she drives to do this work. Okay, so, I mean, if you sold the van and took the kids out of daycare and your wife quit, you'd still be even? I'm not suggesting that. I'm just pointing out where you guys are. Okay. Okay, so for today, what I would have you to do is you guys are going to have to have a serious spending come to Jesus meeting between you and your wife. And then you will tell your children what their new life looks like. And it's going to be crummy because you're broke.

[Caller]

Yes, sir.

[Dave Ramsey]

Okay. How many years ago did you have zero payday loans and zero credit cards? Five.

[Caller]

About. Yes.

[Dave Ramsey]

Yeah, that's a good guess. Like, I've done this before. Five is $6,000 a year. That's $500 a month. You've been spending more than you make for the last five years because you're out of control, chaotic, and spend whatever you want. And you say, oh, we have to. We have five kids. Bull crap. You're spending like you're in Congress and you got to stop it. Okay, so I'm going to help you because I've been right where you are and I know how scared you are. I've been. I mean, I remember being so scared I couldn't breathe. And I can hear it in your voice, and I don't blame you. So we're going to make sure we hold you by the hand and lead you out of this. Because you're not bankrupt, my friend. You're just scared. And you live in the middle of chaos, and y' all spend too much. But the downside of me helping you is, is that you're going to have a new life that involves no eating out, no nothing. Scorched freaking earth. The children are going to wear experienced clothing from the other children. We're not buying anything. We're broke. We're cleaning up this $30,000. We probably are going to sell this van, but I'm not positive yet. I'm going to let you work on it a little bit first and decide that on your own. But you need to be free. $60,000 set you completely free, and you make 140. This is doable, but it's going to mean you cut to nothing, and your broke friends are going to think you joined a cult. So what? This is what it's going to take. Now, you can do this, man. But I can tell you, as soon as you start doing it, the fear is going to leave your voice, and there's going to be a weird thing start happening. And the way your shoulders drop back and you're going to lean in, and you and your wife together are going to join forces, and the children are going to go, what happened to my wimpy parents that gave me everything that I wanted to? The children are going to go, I hate Dave Ramsey. And they're going to get their life back because dad and mom are going to get their life back. Okay? Because I'm not running a popularity contest for teenagers. That's not my goal. I want the moms and dads to win. I love you, and I want you to be wealthy. And I don't want this fear in your voice, and I don't want it to do what it's doing to your marriage right now. Okay?

[Caller]

Yes, sir.

[Dr. John Deloney]

I'm 100% agreement with that one.

[Dave Ramsey]

Anything you want to add, Dr. Deloney?

[Dr. John Deloney]

Just. Is anybody struggling with addiction?

[Caller]

No, sir.

[Dr. John Deloney]

No. Just spending. Did you grow up with. Not very much.

[Caller]

No, sir. She grew up with not very much, and I grew up with money. Okay. But we're both five years clean from these things, so.

[Dr. John Deloney]

Okay. Does she.

[Dave Ramsey]

Oh, there's five. Five years ago, there was addiction. Yeah.

[Caller]

Yes, sir.

[Dave Ramsey]

Okay.

[Dr. John Deloney]

I can hear it in your repentant voice. Listen, I want you to put your head up high. Okay. Have you made some mistakes in the past?

[Caller]

Absolutely. Okay.

[Dr. John Deloney]

We all have Today's day one all over again. You in?

[Caller]

Yes, sir.

[Dave Ramsey]

All right.

[Dr. John Deloney]

Hang on the line. We're going to hook you up with a bunch of tools with every dollar with Financial Peace University and Dave's book Total Money Makeover, and get you started on the on the path. Okay.

[Dave Ramsey]

Also going to sit you down with one of our counselors, Oliver, here in Nashville, and we'll make sure you're taken care of. You guys are not bankrupt. You're just scared, and you don't have the tools. We can show you how, man. Hang on. Create your free every dollar budget today. The simplest way to budget for your life.