A video shared Tuesday on Twitter went viral after a 29-year-old caller to personal finance expert Dave Ramsey’s radio show detailed hers and her husband’s absurd amount of debt.
The caller claimed she and her 32-year-old husband have just under $1,000,000 in debt, and wanted to break out of their situation without filing for bankruptcy. Ramsey, who has built a prolific career on personal finance expertise, looked almost confused as he dug into how such a young couple could get themselves into what is arguably one of the most insane financial situations ever.
Only $210,000 of the caller’s debt was related to her mortgage. The remaining $600,000 was spread across student loans from the couple’s advanced degrees ($335,000), and the rest was credit card ($136,000), personal loans ($44,000) and car loans ($35,000).
“So, what in the world?” Ramsey asked, his face still appearing to be a mixture of confusion and deep concern for the caller and her family. “Are you both on this, or is this just one of you that’s completely lost your mind?”
This is absolutely INSANE holy mother of god pic.twitter.com/HskGvE3qex
— ACE CRISTIAN JAVIER 🇵🇷 (@sportynory) April 11, 2023
The woman said that a majority of the student loans were hers, and her husband makes up a bulk of the credit card debt. “I think it’s one of those things where just making really poor financial decisions, thinking you’ll be able to pay it down as you go. And it doesn’t happen,” the caller explained.
Things only got worse when the caller said she and her husband both work in the government. At this, Ramsey let out a deep sigh. Together, the couple only bring in roughly $230,000 a year.
The caller acknowledged that she and her husband both recognized how dire the situation is. With the current economic crisis, it’s insane to think that two such young people could live so wildly beyond their means and assume things would get better.
A recent breakdown of the economy by Newsmax’s “Frontline” host Carl Higbie found that the average $500,000 home in early 2023 would actually cost roughly $1,170,000 when the buyer factored in current interest rates, and probably wasn’t worth $500,000 in the first place. Couples thinking they can refinance their interest rates in the future likely won’t be able to as the cost of homes could depreciate significantly in coming months as we fall deeper into our current economic crisis.
A similar-ish situation occurred prior to the 2008 global financial crisis, best explained in the hit film “The Big Short.” The film’s core protagonist, Michael Burry (played by Welsh actor Christian Bale), a real financial guru, explained our current macro financial situation perfectly in March.
“2000, 2008, 2023, it’s always the same,” Burry wrote, now shared on his archive page. “People full of hubris and greed take stupid risks and fail. Money is then printed. Because it works so well.” (RELATED: Dear Kay: I Just Saw The Banking News. Are We Screwed?)
While the couple who called Ramsey might not have realized their greed, the banks sure exploited their lack of financial literacy, in my opinion. And the same thing is happening in homes across America, so it’s time to wake up, take hold of your personal finances, and weather the storm. It’s not like anyone else is going to step into help.