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A desperate caller to The Dave Ramsay Show revealed he has no money to retire, despite being 72 years old.
Financial gurus gave truckers a “precise path” to follow, but there were major compromises.
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Three years ago, Fred, from Paducah, Kentucky, said he was “lost” while calling into The Dave Ramsey Show.
He explained his financial situation – $6,000 on $401,000 with no company match, a $270,000 mortgage on his home, and his wife is already retired.
To make matters worse, Fred owed $11,000 through a HELOC at 4% interest.
On the plus side, Fred was making $95,000 as a truck driver, but he couldn’t find a way to save up for retirement and pay off his debt.
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“I don’t know what to do.”
“I don’t know what to do next, Dave,” he said.
Fortunately, Dave was able to help Fred by explaining the “Baby Steps” method to eliminate debt and build wealth.
“I will tell you the exact path to follow,” the host replied.
“Just like dialing the GPS on your truck, if you want to get where you want to go, you have to follow the GPS. That’s right.”
The first step was to put more than $1,000 into savings to pay off debt.
But the next step will likely be making more lifestyle compromises.
“We’ll do it on a rice-and-beans, beans-and-rice budget,” he explained.
“You don’t go out to eat, and you don’t see the inside of a restaurant unless you work there.”
“actively”
Dave also tells Fred not to take any more vacations.
After paying off debt, he recommended saving “$10,000 to $15,000” a year as an emergency fund.
“And then you start really, really aggressively putting money into your 401k,” he said.
But Ramsey told Fred that he would have to continue working into his early 80s because he had little retirement savings over the past few decades.
‘you suck’
Fred isn’t the only one calling to say Dave is showing some tough love.
On another show, he told Donny, of Fayetteville, North Carolina, that communication problems in his marriage led to him racking up $50,000 in debt.
The 53-year-old man racked up credit card and tax debt while his wife worked outside the home, leaving him with no retirement savings.
“The crux of the issue is that you’re incredibly bad at communicating in your marriage,” Dave said.
“Unless they communicate with us and align us on our direction, they will continue to have economic problems.”
Dave told another caller that he would “have a hard time” retiring, but said the 15% rule offered a solution.
For other couples, Ramsey said, an old car will be key to their retirement.
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