They were once debt-free and living in a paid-off mobile home. But years later, this couple, that’s approaching their 70s, is now buried under $46,000 in debt and wondering what went wrong.
Hannah, 69, called into “The Ramsey Show” to speak with personal finance experts Dave Ramsey and Jade Warshaw about her and her husband’s current financial struggles. “In 2016 we went through your university program and in 2017 we became debt-free and were able to purchase our mobile home debt-free,” she said.
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But since then, things unraveled. Hannah admitted they opened 13 credit cards and took out three major personal loans. “We were paying off the credit cards to pay off the credit cards to pay off the credit cards,” she said. The couple was recently approved for a $29,000 debt relief loan, which they were considering to help manage their current obligations.
The couple lives on about $3,100 a month from Social Security and occasional handyman work her husband does on the side. They own their mobile home and the land it’s on, which is now worth an estimated $135,000, but they’re still struggling.
Warshaw quickly pointed out the flaw in their thinking. “You’re still looking to debt as the solution,” she told Hannah. “You haven’t learned your lesson that debt is the issue and Financial Peace University didn’t get it through to you.”
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Even though they’ve always made their payments on time, Ramsey and Warshaw emphasized that paying bills consistently doesn’t fix the underlying problem: living beyond their means.
“You’re telling yourself a lie,” Warshaw said. “You’re telling yourself, ‘We always made payments. We always did it on time.’” Ramsey added that what they did wasn’t a miracle. “It’s just you paid the stinkin’ credit cards before you did anything else and then you barely ate,” he said.
The couple’s income is simply not enough to sustain their expenses and debt load. “We don’t have math that is sustainable here,” Ramsey said. “The pattern keeps you spending more than you have coming in.”
He also pointed out the high cost of their location. “Where you’re living is one of the most expensive areas in America to live,” Ramsey said. “And it’s near your grandbabies, I heard that part, but you cannot borrow your way out of debt.”
