Making a six-figure income should not result in choosing which bills to skip each month. But one New York couple says that is exactly where they are: in the red almost every month, juggling payments and buried under debt.
The situation came to light on “The Ramsey Show,” when Natalie explained that she and her husband earn about $200,000 “on paper” but still feel like they are drowning financially. At one point, she said she had downloaded Dave Ramsey‘s EveryDollar budgeting app but couldn’t afford the premium version.
High Income, Higher Chaos
“Darling, it’s $9, so bull crap,” Ramsey shot back. “If you make $200,000 a year, you can’t afford not to pay the premium on that.”
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Natalie admitted she and her husband are “in the red almost every month” even with a high income. Her husband pays $450 a week in child support, but Ramsey quickly calculated that it was not enough to sink a $200,000 household.
“Well, that’s only $1,800 a month. That’s not killing you,” he said. “And the house payment’s not killing you. So, where’s the money going?”
The real problem came into focus as the numbers rolled out.
They owe $44,000 in home repair loans. Another $25,000 sits on credit cards. They have $29,000 in car loans. On top of that, there is a $99,000 home equity loan. There are also student loans in the background.
“$170,000 in non-mortgage house debt,” Ramsey replied to Natalie. “Cray, cray.
His conclusion was straightforward: “Sell your house.”
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He argued that the home triggered a wave of borrowing. “This house is eating you alive,” he said. “You guys look at something and then you just go freaking buy it. Home Depot must love you people.”
Natalie mentioned New York’s high cost of living. Ramsey and co-host Ken Coleman pushed back.
“There’s a difference between cost of lifestyle and cost of living,” Ramsey said. Food, shelter, clothing and transportation are basic living. Everything extra is lifestyle.
Coleman added that Natalie sounded exhausted from “fighting the waves of life that you’ve created.” He warned that selling the house will only be a temporary fix if they do not change their habits.
U.S. Myths
Ramsey broadened the discussion to what he called two major myths in the U.S.: that everyone must own a home and that everyone must get a college degree, no matter the cost.
“The lie is that no matter what it costs, you’ve got to go get one to be successful,” he said. “No matter if I can afford it or not, I’ve got to go get one to be successful.”
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In Natalie’s case, Ramsey said that no app or advisor can fix what denial and overspending create. The solution starts with ownership.
“When you’re this screwed, you need to know exactly where you are at all times until it goes away,” he said.
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