Nov 5, 2025
A couple from Ohio, who up until recently was earning around $230,000 in combined salary, plus revenue from a small side business, finds themselves facing a daunting debt scenario: $628,000 in debt on their house plus other debts totaling $500,000 to $600,000.
Larissa, the wife, called into The Ramsey Show seeking advice on tackling the debt. Dave Ramsey said the couple’s days of spending like a “drunken congressman” had to end and they needed to get strategic about their finances.
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“You’re not dumb people, you’re just highly chaotic and disorganized,” the host said in a clip posted Oct. 27 (1).
Here’s a breakdown of the crises the couple faces, and what they could have done to avoid their situation.
What's gone wrong
On top of their debt, Larissa and her husband are dealing with several challenges:
- The husband, who was earning around $120,000 in annual income, recently lost his job
- The couple owes the IRS $56,000, and face a lien on their home
- Even with a high income, they have difficulty living within their means
Larissa’s husband, a software quality engineer, was working on a contract that expired. They hope, despite a softening job market, with his skills he’ll be able to find a new role quickly.
As for their tax troubles, Larissa noted that for years not enough had been taken out of their paychecks to account for taxes. She also runs a side business designing and building websites that made $30,000 in the last year, and admitted she hadn’t kept up with paying the taxes on it.
When the couple was younger, Larissa says, they were poor, living on food stamps. Suddenly, both of their incomes jumped. This may be when some of their poor money habits blossomed. Here’s some of the debt they owed at the time of the call:
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- They owe $628,000 on a house Larissa estimates to be worth $770,000 to $800,000
- He has $80,000 in student loan debt, while she owes $45,000
- Two cars for which they owe $129,000 total
- A $45,000 debt consolidation loan
Larissa also confessed the couple had no emergency fund, which means they had no financial cushion to fall back on once her husband’s work contract ended.
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What they could have done
Here are some steps the couple could have taken to prevent some of these problems, especially after their income jumped up.
Be wary of taxes: This is particularly important for contract workers. Be sure who is responsible for deducting taxes from your paycheck, and if it’s you, stay on top of things. If you’re self-employed, generally, you must pay estimated taxes quarterly. Falling behind on taxes can result in penalties. Consult a tax professional if you need assistance.
Adopt a budget: By building a budget, you can monitor every penny spent each month. After accounting for necessary expenses, it can show you how much disposable income you have, giving you an idea of how much you can spend or save.
Maintain an emergency fund: Emergency funds provide a financial cushion to ensure you don’t fall further into debt. Experts typically recommend keeping three to six months’ worth of expenses in an easily accessible high-interest savings account.
Live within your means: A sudden boost in income doesn’t mean you can spend freely without consequence. There’s still a limit to how much you can spend. Do you really need to buy a brand-new luxury car, or will you get by just fine with a used or cheaper model?
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When it comes to dealing with their current problems, Ramsey recommended the couple get in touch with a tax professional to negotiate a formal payment plan with the IRS that doesn’t involve a lien. This will signal to the agency they’re serious about paying the debt and can help prevent any further damage.
The host also recommended the couple sell their cars, even if they have negative equity, as they’re too expensive for the couple to keep. The pair must also be more realistic about their spending.
“You two just need to sit down, look at each other,” Ramsey said. “We can no longer afford to spend like this.”
The husband also needs to get back to work as soon as possible. What works in the couple’s favor is their income potential is high, so while the road ahead may be tough, there is light on the horizon.
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The Ramsey Show Highlights (1)
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Monique Danao is a highly experienced journalist, editor and copywriter with 8 years of expertise in finance and technology. Her work has been featured in leading publications such as Forbes, Decential, 99Designs, Fast Capital 360, Social Media Today and the South China Morning Post.
