Absurd Debt Payoff Plan
by Dave Ramsey
| We’ve been married for 11 years and have about $40,000 in credit card debt. The only other debt we have is our house. We make $90,000 a year, and my husband handles all the finances and says it will take us at least four years to pay off all the cards. Does this sound about right for our amount of debt? |
Dear Dave,
We’ve been married for 11 years and have about $40,000 in credit card debt. The only other debt we have is our house. We make $90,000 a year, and my husband handles all the finances and says it will take us at least four years to pay off all the cards. Does this sound about right for our amount of debt?
Adria
Dear Adria,
I really appreciate you guys waking up and deciding to get out of debt. But considering how much you make, four years is a ridiculous amount of time to pay off that amount.
The average family in America makes about $40,000 a year. You guys make more than twice that much! It should be no problem for you to downsize your lifestyle and live on $70,000 for a couple of years. This means putting vacations on hold and saying good-bye to things like restaurants and toys for a while.
And here’s another thing. I hear you saying that your husband handles the finances. That stuff ends today! The two of you should be on the same page, and that means sitting down TOGETHER to make out a budget before each month begins. Does this mean that you have to be the one who writes the checks? No, but the two of you need to be in agreement on where every dollar goes.
This is very doable, Adria. Follow the debt snowball plan, and pay off these cards from smallest to largest. But you guys are going to have to pull together and live on rice and beans for a while to make it happen!
Dave
Posted by Chris
from Georgia
I don't see how living on $70,000 a year means living on rice and beans! I have been married 15 years, have 6 kids, and live just fine on $45,000 a year. We have a modest car payment and modest mortgage, and we do take some trips and occasionally eat out. We certainly aren't eating rice and beans or avoiding all extras. I think you could live quite well on quite a bit less and pay off the debt in just over a year.
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Posted by Debrah
from Idaho
Dave,
I love your column but this answer is unbeleivable. Not the advice, it was great, but the comment at the end about eating rice and beans etc. You are setting them up for a miserable 2 years. Lots of people live on that amount of money, have great vacations and enjoy wonderful foods. Certainly it won't be t-bones and filet mignon with trips to the Carribean but there are many more wonderful choices out there and well worth the price of being debt-free. Instead of that comment challenge them to look outside the box and have a wonderful 2 years of adventure as they look forward to being debt free.
Debrah
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Posted by Melissa M.
from Taft, CA
Thank you for encouraging Adria to get involved in their financial planning. Too often when the wife leaves the money management to the husband, something happens to the husband and the wife has no idea where the money is, what investments they have, where to find the paperwork for insurance policies, and other like issues. If she doesn't know what her husband is doing with their combined incomes, she could well end up in a lot of trouble later in life. I'm not saying that the husband isn't capable of handling their funds, only that they should work together as partners to decide how and when to spend their money.
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Posted by Kim
from Dallas, TX
I wouldn't worry too much about the rice and beans thing, I'm sure we can understand what Dave's trying to say here. We get his point!
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