“How can I get myself out of this?” Colton is nearly 100% debt-to-income, and it’s not over any essential items. In fact, the loans – at least eight of them – are all for “fun stuff.” We’re talking cars and off-road toys he just, ya know, wanted to have. When he realized he can’t actually afford what’s inside his garage, he called into “The Ramsey Show,” wondering how he could dig himself out of this hole.

“The Ramsey Show” asks for a debt rundown

Here’s what Colton owes:

• $43,700 on a side-by-side UTV
• $40,200 on a pickup truck
• $35,700 on a car
• $35,242 on a camper trailer
• $14,456 on another side-by-side UTV
• $9,300 for a personal loan to pay for auto repair
• $8,000 on a dirt bike
• $5,000 for another personal loan for car repair

The grand total? $191,598.

“What lender is dumb enough to give you another dime?” George Kamel asks.

How did this happen?

Colton says he had about half of this debt, say around $95,000, and had trouble keeping up with the bills. So, he got a better job that paid more.

You’d think he’d have thought to pay off the stressful loans he already committed to, and stayed away from more toys.

Nope. “I went and got some more for fun.”

“The Ramsey Show” host asks him what he makes. These days, Colton’s a semi-truck driver who hauls fuel. He brings in $100,000 to $110,000 a year.

If he sold all the off-road toys and cars, he’d get maybe $120,000 for the lot

As such, the caller’s about $60k to $70k underwater. But, “If you could be $50,000 in debt over 193, you’d take it,” Kamel asserts. After all, Colton’s barely making the minimum payments on all eight loans.

Ultimately, the hosts give Colton the first three things he needs do to get out of this mess:

• Create a budget for every dollar that comes into the household
• Only spend on the bare essentials: Housing, food, and transportation
• Anything beyond the essentials goes toward these car and off-road toy loans
• Pay them off in the order of lowest balance to highest, ignoring interest rates
• Figure out the line on each “toy” where Colton can sell each of them and pay off balances

That fourth point above is what “The Ramsey Show” calls the “Debt Snowball.” It’s a concept wherein consumers throw all their extra cash at their lowest balance debt while still making minimum payments on the rest. After the littlest one’s paid off, they take all the funds they’d been throwing at it and add it to the payments on the next smallest loan.

By the time you’ve paid off all but, say, your house, you’ve built a pretty good-sized snowball you can turn and throw at your mortgage or other financial goals.

In any case, “The Ramsey Show” host also recommends Colton reach out to his lenders and see if there are any other options.

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