A school psychologist named Maria called into The Ramsey Show in July with an unusual problem: Despite having minimal debt and a combined yearly income of nearly $300,000, she and her husband could not seem to stick to their budget.<\/p>\n
Ramsey and co-host Jade Warshaw were visibly frustrated as Maria, who sounded nervous, waffled through the call and struggled to explain why her family couldn\u2019t keep their spending on track.<\/p>\n<\/p>\n
\u201cWe have been Ramsey-ish for about two years,\u201d the New Yorker said. \u201cBut life keeps getting in the way\u2026 It just feels like we cannot get ahead long enough to follow the steps in [Ramsey\u2019s] plan, and it\u2019s causing a lot of financial anxiety.\u201d<\/p>\n
While Ramsey and Warshaw assumed Maria and her husband were bringing home $20,000 per month, the reality is they make $13,600 per month. The difference, Maria said, is due to their retirement investments and insurance deductions.<\/p>\n
Even so, the couple\u2019s debts are relatively small. They owe $17,800 on credit cards, $8,000 on a car loan, and pay $2,700 per month for their mortgage. Maria also shared that the recent deaths of her mother and brother had forced the family to cover the funeral costs of $13,000 and $8,000, respectively.<\/p>\n
\u201cWhere do you think the rest of the money is going?\u201d Ramsey asked<\/a>, but Maria couldn\u2019t account for her family\u2019s monthly spending or explain why the expenses were so overwhelming for their budget.<\/p>\n Ramsey didn\u2019t mince words: \u201cIt sounds like you\u2019re circling around the airport and refuse to land.\u201d<\/p>\n \u201cIt\u2019s not an intellectual circus. It\u2019s not that hard,\u201d he added. \u201cYou\u2019re living drama to drama, crisis to crisis, and you\u2019re letting that stuff dictate your life rather than you dictating to that stuff.\u201d<\/p>\n He advised Maria to re-evaluate their retirement contributions, given that her husband\u2019s take-home pay is lower than expected, and to focus on aggressively paying down their debt. He also urged her to track every dollar and take full advantage of the budgeting tools she already has.<\/p>\n Life will always come with unexpected expenses. That\u2019s why having and regularly contributing to an emergency fund is critical. It helps prevent credit card debt or other borrowing from spiraling out of control.<\/p>\n Story Continues <\/p>\n Ramsey recommends<\/a> starting with a $1,000 fund if you don\u2019t have one, then building up three to six months\u2019 worth of expenses after you\u2019ve paid off debt.<\/p>\n If an emergency<\/a> has already pushed you into debt, remember that you\u2019re still in the driver\u2019s seat. Start by reviewing everything you owe, along with your essential monthly expenses. Once you know what\u2019s left over, set a realistic monthly goal of paying off debt.<\/p>\n That may mean trimming discretionary spending for a while. But your long-term financial health \u2014 and peace of mind \u2014 will benefit from a few months of simpler living while you work things out.<\/p>\n Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan \u2018works every single time\u2019 to kill debt, get rich in America<\/a> \u2014 and that \u2018anyone\u2019 can do it<\/p>\n Rachel Cruze, another co-host on The Ramsey Show<\/a>, frequently talks about how high earners can still live paycheck to paycheck.<\/p>\n Cruze says it\u2019s more than just the lifestyle creep<\/a>, or the idea that spending rises with income. It\u2019s also who you surround yourself with. As you climb income brackets, your social circles may create a new \u201cnormal\u201d where higher spending feels expected.<\/p>\n Cruze acknowledged that inflation is straining many budgets. For those, like Maria, who live in expensive cities, the cost of living has been unsustainable. In such cases, Cruze suggests exploring a job change or moving to a more affordable area to stretch your income further.<\/p>\n She also warns that \u201cdebt steals your income.\u201d Every dollar spent on interest payments is money you can\u2019t put toward savings or goals. If you assume that earning more justifies taking on more debt, Cruze urges you to think again. Pay it off, and you ight be surprised how much breathing room it creates.<\/p>\n Finally, Ramsey and Warshaw noted that Maria and her husband didn\u2019t appear to be aligned when it came to money. If you\u2019re working to get out of debt as a couple, you need to have regular, honest conversations \u2014 not just about a plan, but about each other\u2019s financial values and attitudes.<\/p>\n