In a 2021 episode of “Dave Ramsey Show” Financial guru Dave Ramsey gave some stern advice to a 70-year-old Oklahoma City couple grappling with no retirement savings and a looming financial crisis.
Janice, who called to ask Ramsey for advice, shared her and her husband’s dire situation: They had $25,000 in cash savings, a house valued at $250,000 but still owed $27,000 in debt. mortgage and $1,000 in car debt. With a combined monthly income of $4,000, half coming from Social Security and half coming from Janice’s physically demanding job cleaning the house, the couple was at a crossroads on how to manage their limited resources.
Ramsey’s response was unequivocal. “You have to clean up this mess,” he told Janice. “Start living as if you were completely bankrupt.”
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He stressed the urgency of their situation and the need for drastic measures to secure their financial future. In a bold move, he advised selling an old roadster they owned, worth about $10,000, to alleviate some of their financial woes. “I’m sorry, but the roadster is gone,” Ramsey said, emphasizing the importance of prioritizing their financial health over sentimental attachments.
The financial expert laid out a plan for Janice and her husband to follow, which included maintaining $15,000 as an emergency fund, using the $10,000 from the sale of the roadster for their mortgage, and working hard to free themselves from their debts. It also addressed their spending habits, specifically targeting their tendency to dine out.
“You can’t eat outside; you’re broke. Eating out requires you to clean toilets,” Ramsey said, emphasizing the need for sacrifice to overcome their financial difficulties.
Ramsey presented Janice with two difficult choices: either adhere to his rigorous financial plan, or consider selling their home to purchase a more affordable condo, which would relieve them of their mortgage and potentially provide them with a financial cushion for retirement. He acknowledged the emotional and practical difficulties of such a decision, but stressed its necessity to eliminate financial stress and ensure a stable future.
Adding to his stern advice, Ramsey emphasized the crucial need for Janice and her husband to optimize their work efforts.
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“He will have to work as much as his health allows him; you’re going to work as much as your health allows,” Ramsey said. “You’re not going to see the inside of a restaurant unless you work there.”
This advice emphasized the importance of their commitment to financial recovery, recognizing the limitations of their physical health but also the need for their active participation in improving their financial situation.
Through his advice to Janice, Ramsey highlighted a critical message for people facing financial difficulties, especially later in life: the importance of making tough decisions and making sacrifices to achieve financial stability. His direct, uncompromising advice serves as a wake-up call to those in similar situations, highlighting the need to take action to secure their financial future.
Whether you’re looking to catch up on your retirement savings or simply need help making a financial decision, consult a financial advisor can be a crucial step. Financial advisors offer personalized advice tailored to your specific situation, goals and challenges. They can offer strategies for managing debt, maximizing savings and investing wisely to ensure your financial stability in the future.
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*This information does not constitute financial advice, and personalized advice from a financial advisor is recommended to make informed decisions.
Jeannine Mancini has written about personal finance and investing for the past 13 years for various publications, including Zacks, The Nest, and eHow. She is not a licensed financial advisor and the content herein is for information purposes only and does not constitute and does not constitute or intend to constitute investment advice or investment service. investment. Although Mancini believes that the information contained herein is reliable and has been obtained from reliable sources, there are no representations, warranties or undertakings, stated or implied, as to the accuracy or completeness of the information.
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This item “Eating Out Makes You Clean Toilets” — Dave Ramsey’s Powerful Test for a 70-Year-Old Couple with No Retirement Savings and Still Working Part-Time originally appeared on Benzinga.com
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