‘Pretty much wiped me out’: This 67-year-old has only $1,000 saved after a divorce — the Ramsey Show says 1 thing he owns could fix half of his debt

Selling them “knocks out half of your debt if you can get $10,000 for that,” she told him.

The numbers

Jim told the hosts he earns roughly $4,000 to $6,000 a month doing new construction and remodeling, and he wants to “catch up for some lost time.”

His home is paid off, and he puts its value at $150,000 to $160,000. He also owns his work van outright and got his sons through college without debt. The $23,000 is a mix of credit card, medical and personal loan balances, and he has no budget.

Selling the gear is just step one

The math is simple. A $10,000 sale would leave about $13,000 in debt, and co-host Rachel Cruze suggested chasing extra income to finish it off.

Jim’s range is a guess, though. At $8,000, the sale would cover about 35% of the debt, not half. It pays to check what similar items have actually sold for before counting on a number.

Warshaw and Cruze stuck to the show’s “baby steps” order: a $1,000 starter fund, then paying off debt, then a fuller emergency fund and 15% of his income going toward retirement. Because his house is paid off, they said three months of expenses in savings would do instead of six. They put the whole plan at nine to 12 months.

Mixing business and personal money

Jim admitted he doesn’t separate his business and personal money. Warshaw observed that could hide the truth: He may think he makes $4,000 to $6,000, but after expenses it might be closer to $3,000. The advice was to open a business account, pay himself from it and build the budget from that number.