I Lost 80% of My Income and Might Lose Everything

Summary of I Lost 80% of My Income and Might Lose Everything

by Ramsey Network

10m•February 5, 2026
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Overview of I Lost 80% of My Income and Might Lose Everything

A Ramsey Network episode in which a small-business owner calls in after losing most of his contracts and seeing his income collapse. He’s mid–three-year business life: year one was strong (nearly $200K revenue), year two dropped off, and now his personal draw is being cut to about $2,000/month from prior levels he described as $4–6K. He’s filing bankruptcy for some judgments from a prior marriage, owes roughly $26K in back taxes with another ~$26K coming in April (about $50K total), has only two months of savings, four young children and a fiancée who is a stay-at-home mom and resists severe budget cuts. The host gives direct, practical advice: cut expenses, free up monthly cash by paying off almost‑done car loans, take a higher-paying short-term job (drilling) to stabilize cash flow, put all extra income toward taxes/debt, and reevaluate the business later.

Financial snapshot (caller‑provided numbers)

  • Current projected monthly personal draw: ~$2,000 (down from $4–6K).
  • Savings: enough to cover ~2 months of expenses.
  • IRS/back taxes: ~$26,000 owed now + ~26,000 expected in April → ~ $50,000 total.
  • Bankruptcy: in process; one final payment before court date.
  • Car loans: two nearly paid off — one ~$600 from payoff, the other ~$1,500 from payoff; combined car payments = about $900/month.
  • Family: fiancée (stay-at-home), four children (ages 9, 6, 4, 3).

Key points and main takeaways

  • Immediate crisis: large drop in income with only two months of runway and sizeable IRS debt coming due.
  • Bankruptcy may clear some judgments, but tax liabilities remain urgent and potentially larger.
  • Quick wins exist: pay off the two nearly‑done vehicles now (dip into savings) to eliminate ~$900/month in expenses.
  • Replace income quickly: host recommends taking a reliable, higher‑paying job (e.g., drilling job paying ~$10K/month) for a season to get cash flow back and attack debt aggressively.
  • Relationship alignment is critical: the caller and fiancée must agree to a short-term “storm mode” budget to survive and recover.
  • Business can be paused/reevaluated after stabilizing personal finances; don’t try to rebuild the business until household finances are secure.

Recommended action plan (as advised on the show)

Short term (0–3 months)

  • Use available savings to pay off the two almost‑paid vehicles now to free ~$900/month.
  • Prioritize IRS/tax obligations — treat this as the top financial emergency.
  • Take the reliable, high‑paying job (drilling or equivalent) immediately if feasible — even if it requires being away for multi‑week rotations — for a defined season (e.g., 6 months).
  • Stop discretionary spending; cut nonessential services until debts are under control.
  • Continue bankruptcy process for qualifying debts but don’t rely on it to resolve tax liabilities.

Medium term (3–12 months)

  • Direct the bulk of extra income toward paying down the IRS and other nondischargable obligations.
  • Rebuild an emergency fund once debt pressure is reduced.
  • Reevaluate the business in 6 months (August suggested): decide whether to restart, scale back, or exit based on stability and signed contracts.
  • Keep leveraging tools like budgeting (EveryDollar) and educational resources (Financial Peace University) to align household decisions.

Relationship and household steps

  • Finish or continue the Financial Peace University (caller started a 9‑week FPU course) to get both partners on the same page.
  • Identify ways the stay‑at‑home partner can contribute (income or cuts) during the crisis.
  • Agree to a defined, time‑limited sacrifice plan so everyone understands it’s temporary and goal‑oriented.

Risks and constraints

  • Leads for new contracts are not yet signed — pipeline uncertainty.
  • Two months' runway is very short; if replacement income doesn’t arrive quickly, the family risks losing assets.
  • Tax bill due in April adds immediate pressure; the caller expects another sizable tax obligation.
  • Rotational jobs (e.g., drilling) impact family time and the ability to run the current business, but may be necessary short-term.

Notable quotes / insights

  • “It’s all hands on deck.” — Emphasis on urgent, collective action by the household.
  • “Do what you have to do for six months and let’s reevaluate” — Host recommends a finite, intense recovery season.
  • Host’s blunt assessment: the fiancée needs to “understand how math works” — highlights the need for financial realism and agreement.

Tools & resources mentioned

  • EveryDollar app — recommended for creating a free budget and tracking money.
  • Financial Peace University (FPU) — caller is taking a 9‑week course to help align household finances.

Practical next steps / checklist

  • Pay off the two nearly‑paid cars now (use savings) to free ~$900/month.
  • Accept the higher‑paying job (drilling or similar) as a short‑term measure if feasible; plan for 3 weeks on/2 weeks off rotations.
  • Put all extra income toward IRS/tax debt immediately.
  • Cut discretionary expenses aggressively until debts are managed.
  • Continue FPU and use EveryDollar to build a household budget and track progress.
  • Reassess business and household finances in ~6 months.

This episode is focused on triage: stop the cash bleed, stabilize household income quickly, and apply earned income to the most urgent liabilities (taxes), then revisit business decisions once the family has breathing room.