Dave Ramsey: 3 Ways To Attack Your Debt in 2025
Written by
Heather Altamirano
Edited by
Jenna Klaverweiden
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Americans are drowning in debt. According to the Federal Reserve Bank of New York, U.S. household debt is at $18.04 trillion, which includes mortgages, student loans, car loans and credit cards. The stunning figure increased in the fourth quarter of 2024 by $93 billion, per the report, which also showed outstanding auto loans are on the rise.
High interest rates and unforeseen economic circumstances can make it difficult to tackle a stack of bills piling up and get out of debt, but money expert Dave Ramsey teaches people how to stop the cycle and live debt-free.
In a recent episode of his popular show “The Ramsey Show,” the finance guru and his co-host George Kamel broke down some ways to attack debt and build wealth.
Stop Using Credit Cards
Ramsey and his team make it known they’re not fans of credit cards. For example, Jade Warshaw explained on Ramsey Solutions’ website that credit card companies are manipulators. One way they manipulate consumers, she explained, is credit card rewards.
Ramsey talked to a caller on the show who had 27 credit cards, and the first step he advised was getting rid of them. “Literally get scissors out, light a candle and chop every one of the stinking things up,” Ramsey told the caller on his show.
Make a Written Budget
It’s easy to spend money and not know where it goes. For instance, you walk into a store expecting to spend $20, but the cashier asks for $100 instead. It can happen easily, but with a detailed, written budget, every dollar is allocated for.
To get out of debt, Ramsey told the caller to get focused and stop eating out, traveling and doing anything else that isn’t essential. If it’s not in the budget, don’t do it.
“You’re a broke guy and so broke people buy food, lights and water, and they pay their rent and they throw everything else at the debt,” he said. “You’re gonna get real focused like your life depended on it because it does.”
Commit To Only a 15-Year Mortgage
Mortgages are often the last thing that keeps people from being completely debt-free, but with careful planning, you can pay off a house in less time. However, as Dave Ramsey said in a Facebook post, he advises a 15-year mortgage with a monthly payment that is 25% or less than your take-home pay each month.
While a 30-year mortgage sounds reasonable because the monthly payments are lower, the money expert strongly recommends against one because it will cost you more in the long run and make it harder to get out of debt.
“On an average-priced home, a 30-year mortgage will cost well over $100,000 more than a 15-year mortgage would for the exact same home,” Ramsey wrote in the post. “That happens because the interest is spread over 30 years instead of just 15, and that makes a dramatic difference.”
Owning a home free and clear is a huge goal that can be accomplished, but you want to make sure you’re financially prepared to take on that debt and eventually pay it off. In the same episode of his show, he advised buying a house “after you get out of debt, have an emergency fund and when you can afford the payment on a fourth of your take-home pay on a 15-year fixed rate.”
Getting out of debt isn’t easy or fun, but taking control of your money and having the right plan can help you ditch debt and create a life of owning your assets instead of owing bill collectors.
More From GOBankingRates
