A caller to Dave Ramsey opened 18 credit cards after bankruptcy and owes $118,000 “to impress people.” Her husband has no idea
A recent call on The Ramsey Show featured a woman who opened up to Dave Ramsey and admitted that despite filing for bankruptcy in 2019, she is back in debt — to the tune of $118,000, not including the mortgage — and that her husband is feeling completely unaware of the mess they are in.
Don’t miss:
“We are the example of trying to impress people,” the caller admitted. After purchasing a new home, she felt pressured to fill it with “nice things,” but this urge led to financial chaos, prompting her to open as many as 18 credit cards to finance the lifestyle she thought I needed.
Her husband, who earns $35,000 a year, has no idea of their financial problems because, as she explained, “He doesn’t even have access [to our finances].” She takes home $125,000 annually, plus another $15,000 from a side job, but her spending habits have left her drowning in debt – all because of the desire to project an image of success.
The caller revealed that the $118,000 debt had been spread among several sources. She owes $1,300 to the IRS and $9,500 is tied up in “pay in 4” payment plans like PayPal (NASDAQ:PYPL) and Klarna. The bulk of the debt – $116,000 – comes from online personal loans through platforms like Prosper. Additionally, they have a $40,000 car loan and $5,500 in credit card balances.
See also: Deloitte’s Fastest Growing Software Company Partners with Amazon, Walmart & Target – You can still get 4,000 of the pre-IPO shares for $1,000, for just $0.25/share
This complicated mix of debt sources shows how far out of control the situation has gotten. The pile-up of loans, payment plans and lines of credit has resulted in an impossible financial mess. The car loan itself is a big deal and with all the high interest loans and credit card debt thrown in, it’s very difficult for them to make any progress without making major changes.
As always, Ramsey did not disguise his advice. “You won’t be free or healed on your own,” he told her. The key, according to Ramsey, is teamwork. “We need two things relationally: one is for you to go to him and say, ‘Honey, we’re in trouble again because I didn’t say no and you weren’t involved.’”
The caller admitted that her spending habits were closely tied to her need for validation, saying, “It comes from my childhood,” but that didn’t convince Ramsey, who responded with his trademark tough love: “You’re too old, chewing gum.” and rich in income to act like a 14 year old girl who needs validation. It’s time to be a grown woman.”
Trending: The number of ‘401(k)’ millionaires is up 43% from last year —Here are three ways to join the club.
To get out of this financial hole, Ramsey has drawn up a clear but intense plan: they must make a budget together every month, sell everything that is not needed and drastically reduce their lifestyle. “Sell everything, everything is not tied,” he said. The goal is to adopt what Ramsey called “scorched earth,” an 18-month lifespan — essentially to live as frugally as possible and use every available dollar to pay off debt.
One of the biggest insights was the importance of not trying to impress others. According to Ramsey, wealthy people often reach the point where they “don’t give a damn what anyone thinks.” And for this caller, ending the cycle of debt requires learning to ignore the opinions of others. “You have to practice not having nice things and making sure people see you,” added co-host Dr. John Delony added, encouraging her to face her fears about appearance.
Image via Shutterstock
Read next:
Next: Transform your trading with Benzinga Edge’s unique market trading ideas and tools. Click now to access unique insights which can give you an edge in today’s competitive market.
Want the latest stock analysis from Benzinga?
This article A caller to Dave Ramsey opened 18 credit cards after bankruptcy and is $118,000 in debt ‘to impress people.’ Her Husband Has No Idea originally appeared on Benzinga.com
