‘This Is Insane,’ ‘Ramsey Show’ Host Says As Couple Taking Home $20K A Month Pays $8,600 In Housing Costs

Big income. Bigger payments. And a growing sense that something is off.

Ryan told “The Ramsey Show” he and his wife bring in about $200,000 a year, roughly $20,000 a month, yet still feel stuck living paycheck to paycheck in Flint, Michigan, with $8,600 going toward housing.

The couple has about $9,000 in savings and one car loan of between $10,000 and $11,000. They also have two leased trucks and a mortgage.

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In addition, they took out two loans against their retirement accounts, one from a 401(k) and another from a Roth, to pay off $34,000 in credit card debt. They are repaying those retirement loans through payroll deductions.

“This is insane,” co-host George Kamel said.

Ryan said the strain began after a move that stretched their spending beyond what they were earning. Despite the debt, they continue contributing about 8% each to retirement, with employer matches of roughly 3.5% to 4%.

“I thought, well, man, we should be getting an extra $1,000 to $1,500 a month,” Ryan said. “And it just didn’t start equating to that.”

Ryan said he is committed to getting out of debt and tired of living paycheck to paycheck on their income.

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Ryan asked whether, after using their $9,000 in savings to pay off the car loan, they should keep more than $1,000 set aside given their expenses.

“The $1,000 does not change based on expenses or income,” Kamel said. “It’s a flat $1,000 and it’s not meant to cover everything.”

He said if an emergency exceeds $1,000, they would pause debt payoff, use the next paycheck, sell items or cut spending, then resume paying off consumer debt. He also urged them to stop borrowing from retirement accounts and to consider pausing investing until the debt is cleared.

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Although the $34,000 balance is gone, Ryan said they still use one credit card for gas, groceries and some bills and pay it off weekly. He said a financial adviser recommended putting expenses on the card and paying it off in full.