I Make Over $126,000 And Stressed About Bills (Thinking About Bankruptcy)

Summary of I Make Over $126,000 And Stressed About Bills (Thinking About Bankruptcy)

by Ramsey Network

8m•November 19, 2025
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Overview of I Make Over $126,000 And Stressed About Bills (Thinking About Bankruptcy)

A Ramsey Network call-in where a single dad earning roughly $126k (had higher overtime income previously) is overwhelmed by bills and considering bankruptcy. The hosts walk him through a reality check: his income is sufficient to pay down the debt, but lack of a budget, ongoing overspending, and some forgotten debts (pension loan, credit card) have worsened the picture. They recommend concrete budgeting steps using the EveryDollar app and an aggressive payoff plan to avoid bankruptcy.

Key facts from the call

  • Caller income: base ~$126,000/year (some years higher from overtime; last year he reported ~ $180k with overtime).
  • Take-home pay estimates mentioned: ~$7,500–$8,000/month.
  • Family: single dad with three children (ages 16, 20, and 9). Pays ~$600/month toward the 20‑year‑old (college).
  • Debt components disclosed:
    • Car: about $10,000 remaining
    • Personal loan: about $11,000
    • Pension loan: roughly $24,000 remaining (automatic payroll deduction ~$463 every two weeks)
    • Capital One credit card: about $6,000 (in collections)
    • Other: hospital bills, gas bill, utilities
  • Caller was not using a formal budget and had small investing activity (Robinhood “pennies”).

Main takeaways and advice from the hosts

  • Bankruptcy is premature: Given the caller’s income and the size of debts (roughly $50k–$60k total once all items are counted), bankruptcy would inflict long-term damage and likely isn’t necessary.
  • The core problem is lack of a budget and ongoing overspending — especially on eating out and personal discretionary spending — not income level or the kids.
  • Creating a written/digital budget will provide clarity and relief; the hosts gifted the EveryDollar app to help him build it immediately.
  • Use bank statements to build the budget (don’t rely on memory); this reveals actual spending vs perceived spending.
  • Stop nonproductive investing and impulsive spending until debts are cleared (hosts suggested deleting Robinhood for now).

Practical action plan (what the hosts told him to do tonight/this week)

  1. Download EveryDollar and create a monthly budget.
    • Enter net monthly income.
    • List every expense (housing, utilities, food, transportation, insurance, minimum debt payments, kids, etc.).
    • Use a recent bank statement (e.g., September) to ensure accuracy.
  2. Identify and cut discretionary spending immediately (e.g., eating out, DoorDash, nonessential outings).
  3. Pause small, speculative investments and apps until debt is under control.
  4. Add up total debt and list minimum payments; determine how much extra margin you can create from your budget to throw at debt.
  5. Aim for an aggressive payoff: hosts suggested throwing about $2,500/month could clear roughly $56,000 in about 22 months; they also proposed a goal of finishing within 18 months depending on available margin.
  6. Avoid bankruptcy unless there’s an unavoidable legal/medical situation that truly requires it.

Quotes and memorable lines

  • “The budget is the blood work. It tells everything that’s wrong with you.”
  • “I’d rather you be scared of the facts than the unknowns.”
  • “Debt is not a shortcut. You are the answer.”

Why this approach works

  • The caller has a high enough income that, with disciplined budgeting and cutting discretionary expenses, he can realistically eliminate the debt in a short time frame.
  • Creating a budget replaces anxiety with clarity, allowing targeted payoff plans and measurable progress.
  • Avoiding bankruptcy preserves credit, employment/rental prospects, and financial options long-term.

Next steps / resources

  • Immediate: build the EveryDollar budget (hosts gifted access) and review a recent bank statement.
  • Short-term: cut eating out and other discretionary expenses, pause nonessential investments, and reallocate that money to debt.
  • Mid-term: set a monthly payoff target (e.g., $2,500+/month) and track progress in EveryDollar.
  • Long-term: once debt-free, reinstate savings and investing with an emergency fund first.

This episode emphasizes that high income alone doesn't solve money problems—visibility and discipline (budgeting, cutting waste, and committing to a payoff plan) do.