Yahoo Finance ‘Sell Everything’ — Dave Ramsey’s Advice To Get Out of Debt
If you’re struggling to get out of debt, Dave Ramsey has some advice — sell everything. Besides using the snowball method — paying off the smallest debt first and then applying that payment to the next smallest debt — the finance guru is all about selling everything you can to get back on track and have financial freedom. He explained as much to a caller who shared her dire circumstances.
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Teresa, a 61-year-old Arkansas woman, makes $67,000 annually and has about $69,000 in debt, including $11,000 in student loans, a $18,000 car loan, a $26,000 tractor loan, and a $11,000 personal loan. To make matters worse, she doesn’t have money set aside for retirement and is hoping to count on Social Security when she turns 67.
Not one to hold back, Ramsey firmly told her to unload whatever she could. “Broke people don’t have $26,000 tractors.” He added, “If I were in your shoes, I would say, ‘I am so scared, I’m going crazy, and I’m selling the tractor; I’m selling the car and gonna get a $2,000 car. I’m gonna work like crazy.'”
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Taking Dave Ramsey’s Baby Steps
Teresa explained she has been trying to follow Ramsey’s baby steps and has achieved step one — having $1,000 in savings. She also stated that her company will match her 401(k) contributions by 4%. Currently, she’s on step two: paying off all debt except the house, but she doesn’t know how she’ll do it at her age. While Ramsey emphasized the seriousness of her situation, he also told her it’s still possible to overcome her financial struggles.
“It’s not too late, but you’re trading a $26,000 tractor for $150,000 in your retirement. You’re trading an $18,000 car for another $100,000 in your retirement. You could have a quarter million dollars set aside with match if you get your butt out of debt now by the time you hit 67, 68 years old. You can get there.”
Teresa isn’t the only one facing this stark reality. According to AARP, 20% of adults 50+ have no savings for retirement, and (61%) are worried they will not have enough money to support them in retirement.
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