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Dave Ramsey says: Rid yourself of debt in 18 months with tight budget

Dear Dave, 

I’m 58 years old and have nothing set aside for retirement. My wife and I are on Baby Step 2 of your plan and paying off debt. We have $37,000 in debt, not counting our home, and five kids who still live at home. We have a household income of $73,000 a year and were wondering if we should go ahead and start Baby Step 4, investing for retirement, instead of paying off the debt.

— Dan

Dear Dan,

Your most powerful wealth-building tool, both mathematically and factually, is your income. The most powerful way to build wealth — whether it’s playing catch-up at 58 or starting at 28 and becoming wealthy over the long haul — is to have your income available. That means it’s not flying out the door every month to make debt payments.

Fifty-eight is not old, but you do have to get busy if you want to retire with dignity. I’d really lean into this debt and make it disappear in the next 18 months. I’m talking about sticking to a tight budget, living on rice and beans, and selling so much stuff around the house those kids think they’re next!

After that, you’ll have to throw every dime you can into building an emergency fund of three to six months of expenses. And after that, you’ll have to spend 10 years going crazy saving for retirement by pouring about $12,000 a year into good mutual funds.

Can you do that and win — and by “win,” I mean retire with some dignity? Yes, you can. But it’s not doable if you’ve got $37,000 in debt hanging around your neck!

— Dave

* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms. Follow Dave on the web at and on Twitter at @DaveRamsey.


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