A single dad asks ‘The Ramsey Show’ co-hosts how he can get out of “more debt now than I’ve had before”
Credit: The Ramsey Show/YouTube; Getty
NEED TO KNOW
- Patrick, a single dad, called The Ramsey Show for advice after finding himself in significant debt at age 59
- Despite his financial struggles, experts noted his $30,000 savings account puts him in a better position than most Americans
- Experts advised Patrick to forgive past mistakes, pay off loans with savings, and focus on rebuilding his financial future
One single dad is feeling defeated financially — but he’s actually doing better than most Americans due to one thing, according to financial experts.
On the Sept. 8 episode of The Ramsey Show, a man named Patrick called in asking for financial advice, explaining to co-hosts and financial experts George Kamel and Dr. John Delony that he filed for bankruptcy 10 years ago because he was “buried in student loans.”
“Of course, I couldn’t get rid of the student loans, but got rid of other debt and structured things,” he explained. To eliminate the student loan debt, he sold his home, which he had purchased in 2012 for $80,000 at a 3% interest rate, a decision he said he’s “sick about right now.”
“I did pay off those loans, and I was debt-free. And I subsequently rented for four years,” he continued. After paying $2,400 a month for those four years, he wanted to own again, leading him to purchase a home for $230,000 at a 6.25% mortgage rate with “no money down, which I’m sick about that, too.”
Add to that a $26,000 car loan and a personal loan of $7,000 for necessary repairs, and he admitted he was feeling stuck.
“I’m raising my son alone. He’s going into his senior year, and I have more debt now than I’ve had before,” he explained. “I’m 59 years old and I’m looking at retirement. You know, I’m breathing down the barrel of retirement, and I have only about $150,000 in a 401(k), and I’ll tell you guys, I’m not sleeping well.”
Credit: The Ramsey Show/YouTube
He called to ask Kamel and Delony for advice on how to improve his situation. Though he admitted some past financial decisions made him “sick,” he revealed one detail that showed a little bit of promise: He has $30,000 in his savings account.
“You are doing better than most of America, if it gives you any consolation,” Kamel reminded him. “It’s a low bar, but you’re doing better.”
The first thing Kamel and Delony agreed he needed to do was forgive his past self for the decisions he’s come to regret.
“You’ve got a crick in your neck from looking backwards at all the things you wish you could’ve done, things you should’ve done, regrets, shouldn’t have sold that, shouldn’t have taken on that debt. So can we agree that this is a new chapter for Patrick? 59’s gonna look different,” Kamel said.
“One of your homework assignments this weekend is gonna be to write 2014 Patrick a letter and let that guy go. Set him free. Okay?” Delony added. “And then we’re gonna write 65-year-old Patrick a letter about who you decided to become at age 59 so that he could have a different life.”
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Though having $30,000 in his savings account may put Patrick in a better financial situation than most Americans, Delony and Kamel recommended using $29,000 to pay off his personal loan and as much of his car loan as possible. By adding the amount he was paying on the personal loan to his car payment, he could fully eliminate that debt faster.
Patrick admitted he was afraid of draining that $30,000 in case he lost his job, leaving him without money to support his son — but Kamel and Delony reassured him it would be worth it.
“You’re under the squat rack of fatherhood, of life, of responsibility, and you know that would be a big kick in the gut, and you would owe nobody anything except for your mortgage,” Delony said. “And then the very next day you’d be at Home Depot, at Lowe’s, at wherever else, applying for jobs, and you’d make enough money to pay your bills, and you would show your son — you’d give him a ringside seat as to what a grown man with responsibilities does when he gets kicked in the gut.”
“You’re projecting all the negative into future Patrick’s life, but you’re not projecting the reality into future Patrick’s life, which is you’re a good man, and you work your butt off, and you love your son, and you love yourself. Right?” he continued. “And so you’re gonna have $750 on top of whatever else you have in margin, and you’re gonna rebuild that emergency fund right away.”
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