Eric, a military service member who earns $5,000 a month, lives in a trailer with wife and kids in West Virginia.
They can’t afford to live anywhere else — ironically, because they’re still paying off the trailer, along with three other vehicles and additional debts totaling $209,000. Eric reached out to The Ramsey Show for help.
Co-hosts Ken Coleman and George Kamel were stunned by his situation, calling it a “full-blown crisis.”
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“You’re a heartbeat away from living this way for the rest of your life,” Coleman warned. “I was born in a small town in West Virginia. I know that state, I know the economic situation that you’re in. You don’t want to do this to yourself (1).”
Eric said he and his wife had made “bad decisions” but were trying to get out of the hole. They want to sell their vehicles, but realize they’d take a $17,000 loss due to depreciation.
Kamel and Coleman asked Eric for a breakdown of the family’s income and debts. The math pointed to one solution.
Decent income versus overwhelming expenses
In addition to Eric’s $5,000 per month military wage, his wife brings in $1,700, resulting in a household income of $6,700 a month — above the average $4,784 American household income, as reported by the U.S. Bureau of Labor Statistics.
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The problem is, they’re drowning in monthly debt payments, including:
- Minimum payments on $30,000 in credit card debt (including student loans)
- $465 a month on their trailer home (which they originally bought for $40,000 in 2017)
- $305 a month on a $10,000 motorcycle loan (with an estimated value of $8,000)
- $455 a month on a $21,000 loan for the Civic (now worth just $18,000)
- $960 a month on a Jeep they purchased for $47,000 (now worth just $35,000)
"Goodness gracious, man,” Kamel said. “Your Jeep is nicer than your house!”
Their vehicle payments alone total $1,720 every month, meaning more than a quarter of their $6,700 monthly earnings are disappearing into depreciating assets.
Eric’s situation reflects a broader American phenomenon. The average new car now costs over $50,000 (5), and more than 19% of all new car loans now have monthly payments of $1,000 or more (6).
Financial planner Sam Dogen notes he regularly sees "people with expensive new cars parked outside modest homes everywhere" and warns that "with hefty lease payments and revolving credit card debt, many Americans may find themselves trapped in the rat race indefinitely (7)."
Auto lenders are extending larger loans for longer terms (8), making expensive vehicles seem affordable through low monthly payments, but living a lifestyle misaligned with income only creates crushing debt and limited options.
“Y’all are living like you’re in Beverly Hills, not the hills of West Virginia,” Coleman said, highlighting a financial imbalance that’s becoming increasingly common across America.
At the end of each month, they only have $600 left to pay down debt, but Kamel warned at that rate it would take more than two years to save the $17,000 needed to get out of their vehicle loans.
"And by then those cars have dropped even more in value," Kamel warned. "So we don’t have time to play that game."
Without dramatically increased income, Eric and his wife face a financial death spiral — years of minimum payments on high-interest debt, destroyed credit and constant financial stress.
Getting a second gig isn’t easy for military personnel
Eric noted that his wife already has two jobs. But as an active-duty military personnel, the rules around getting a second job are restrictive.
According to the Department of Defense Standards of Conduct Office (2), active-duty service members cannot hold off-duty employment while doing their military duties, and military members are considered "on call" 24 hours a day.
Eric noted that he wants to stay in the military because he’s just eight years from retirement.
"Retirement?!” Kamel shot back. “Dude, you can’t even eat! You’re broke.”
Military personnel who entered service before January 1, 2018, as Eric did, and stay in military service for 20 years receive a pension equal to 50% of their pay for their highest 36 months, with an additional 2.5% for each year beyond 20 (9).
Those who entered after 2018, under the Blended Retirement System, receive 40% at 20 years with a 2.0% multiplier.
In addition, Eric can expect lifetime healthcare through TRICARE and access to VA home loans with no down payment required.
So, for someone 12 years in, walking away from a lifetime pension in eight years could mean a huge financial loss down the road.
At that point, Eric might transfer his military experience into a cybersecurity, project management, consulting, or aerospace role — many pay around $90,000 to $120,000+ annually. After military retirement with full benefits, he could pursue this new career while collecting his pension, dramatically improving his position.
For now, though, Kamel and Coleman said Eric’s wife must maximize earning potential, with income being the only way out of their bind.
“If you do it for nothing else, do it for those kids,” Kamel said.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Ramsey Show (1); Department of Defense Standards of Conduct Office (2); Veteran.com (3); MilitaryNews.com (4); Kelley Blue Book (5); NPR.org (6); FinancialSamurai.com (7); CarEdge.com (8); MilitaryOneSource.mil (9)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.