On a video posted on The Ramsey Show – Highlights YouTube channel, the American personal finance personality suggested how Kady can get by in retirement without a big pension pot, and a lot of debt.
She explained to Mr Ramsey that things were tight at home as she recently lost her job.
She was unsure if it was necessary to continue paying for her husband’s life insurance when they needed that extra money to get by with monthly bills now that she was not working.
Her husband has term life insurance which is $210 (around £158.60) a month.
Their home is paid for, however, they have “virtually nothing” in their retirement fund due to bad decisions when they were younger.
Kady has $60,000 (around £45,313.50) in her retirement fund; however, she has $15,000 (around £11,328.37) worth of credit card debt to pay off.
She planned to pay off all her debts by following Mr Ramsey’s ‘every dollar’ programme.
By sticking to this, she planned to pay her debts off within a year.
Mr Ramsey said: “Once you have done this, you should move on and get your emergency fund in place and stack up everything you can into retirement, as fast as you can.”
He suggested that the pair continue to pay her husband’s life insurance as that is her only safety net.
Kady’s house is worth $100,000 (around £75,531.50), and her husband had around $200,000 (around £151,063.00) saved with life insurance, but Katie has no insurance.
The life insurance can be a way to setting Katie up if anything were to happen.
Mr Ramsey said: “I’d keep the insurance in place because it’s there to replace his income if something happens to him and you would still need that because you don’t have any money.
“You have a paid-for house and you will be debt free soon but you don’t have any money so I would keep it for a while.
“But as soon as you have $200,000 (around £151,063.00) or $300,000 (around £226,594.50) saved which you should have in a few years, you may want to look at dropping it at that point.”
Kady told the finance expert that she is looking for another job to support her, but it is hard due to her age.
She mentioned she thought about starting her own business and doing something to her own to earn money.
With $300,000 (around £226,594.50), she might be okay and will be able to get by if her husband dies.
Mr Ramsey concluded: “You’re going to be playing catch up here. You need to get on the horse and kick him hard.”
