‘Ramsey Show’ hosts tell broke 86-year-old Florida woman with almost $30,000 in credit card debt she has only one option. Are they right?
At nearly 90 years old, worrying about money is the last thing anyone would want. Unfortunately, an elderly caller to a recent episode of “The Ramsey show” said she is struggling financially and needs to make some tough decisions.
"I’m 86 years old, I have only Social Security, I own my own home, I own my car, but I have almost $30,000 in credit card debt,” explained Joan from Jacksonville, Fla.
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She added that she had been a single mom since she was 19 with no child support, has no savings, and is struggling to live on just $1,200 a month in Social Security. She worked until she was almost 80.
With so little money, she took to borrowing — but it made her situation worse. "The reason I'm in credit card debt is I always need about $200 more [per month]," she lamented. She made the minimum payments, interest started to grow and her debt eventually became unmanageable.
In 2022, the average debt of households of people ages 65 to 74 was $134,950, according to the Federal Reserve. For those 75 and older, the average was $94,620.
Joan's only proposed solutions were to sell a 17-year-old Crown Victoria car, which would leave her grounded with no transportation, or sell her home and move into an apartment. Working is off the table as she's had leukemia for 21 years, and moving in with her daughter isn't an option because their personalities clash.
Unsurprisingly, she is concerned — and there were a few answers offered.
Retirement without savings is unsustainable
Struggling with her situation, Joan said she had tracked her spending to try to find some wiggle room. "I wrote down every penny I spent this past month," she said.
Sadly, after fixed expenses, she is left with "$100 to $200 a month to eat [and] put gas in the car." That doesn't go far during this period of record-high inflation, doesn't leave room for cuts, and leaves her vulnerable to relying on debt to pay irregular expenses. In recent months she had to pay almost $3,000 for car repairs and $700 to the dentist, both of which led to a higher card balance. "You have no cushion," commented host Jade Warshaw.
Outside of asking her daughter and ex husband for help, which she found embarrassing, her choices appear extremely limited. Host George Kamel pointed out selling her car would likely not make a dent in her debt.
What's a broke 86-year-old to do?
With some financial problems, there are no simple solutions.
Kamel suggested rehoming her pet dog to reduce expenses.
Of course, Joan does have her home, which she said is worth around $195,000 to $250,000. Selling it would provide extra cash -- enough to cover her credit card debt. Unfortunately, she'd still need someplace to live.
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Kamel initially recognized the downsides of downsizing, warning that, "you have a fixed expense with this paid for house. If you sold it to pay off your credit card debt, that leaves you with an expense that's ongoing and increasing." Warshaw said this option "doesn't really make sense because of the cost of living today."
By the end of the call, however, the hosts seemed to decide that selling the home was the only way out. "I would definitely look at downgrading in house and going to an apartment you pay cash for, getting rid of the credit card debt," Kamel said.
Of course, that's easier said than done as there are moving costs and realtor fees to consider, not to mention the logistical challenges of relocating at nearly 90.
While downsizing might have helped her earlier in retirement by shoring up her finances, a move now might do more harm than good.
There were some important solutions the hosts overlooked, though — including exploring the possibility of benefits, like Supplemental Security Income available to seniors 65 and over with serious financial need, as well as Supplemental Nutrition Assistance Program (SNAP) benefits. USA.gov's benefit finder or the National Council of Aging's BenefitsCheckUp can shed light on resources available to help a struggling senior.
Reaching out to creditors to explain that she's struggling could prompt the card companies to help her find a solution since they know they might otherwise not get paid at all. Struggling seniors are "judgement proof," which means debt collectors cannot go after their exempt fixed incomes like Social Security.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
