Dave Ramsey Says You Must ‘Destroy Your Life as You Know It’ To Eliminate Major Debt
What would you do if you woke up one day and realized you owed more than three-quarters of a million dollars? You’d probably have a panic attack and then try to find help. That’s what one young couple did in a viral Dave Ramsey TikTok video.
Ramsey, often known for yelling at callers, was surprisingly calm as he told the 29- and 32-year-old that they’d have to destroy their lives as they knew it to shed the $760,000 worth of debt they had amassed. The couple seemed willing to take his advice to avoid declaring bankruptcy.
Ramsey went on to say that the couple can’t “care what anyone thinks” because they won’t be able to “spend any money for three years” as they put the majority of their combined $230,000 annual income toward paying off their credit cards, personal loans, auto loan, student loans, and mortgage. He warned them that drastically cutting back their lifestyle was “going to be emotional,” acknowledging that it was natural to feel scared and disgusted.
What Should You Do?
While you might not have as much debt as this example couple, you may still feel anxious about what you owe. Fortunately, you can attack this financial albatross with a three-pronged approach: choosing a debt pay-off strategy, cutting expenses and increasing income.
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When you decide to pay down debt, the first thing you need to do is choose a strategy. You could opt for the debt snowball method, which prioritizes paying off your smaller balances first to build momentum. Or, you could select the debt avalanche method, which prioritizes paying off your higher-interest balances first to save money on interest.
Then, you can focus on cost-cutting. One of the best ways to save money is to be frugal. Frugal living typically involves shopping smart, avoiding waste, sacrificing convenience and DIYing everything possible.
Finally, once you’ve optimized your spending, you can find ways to bolster your income. That could look like getting a part-time job, starting a side hustle, or selling your unused belongings.
Important Note: While you should see filing for bankruptcy as a last resort, it may be an appropriate solution if you can’t repay your debt or strike a deal with your creditors.
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