Ramsey Suggests Discounted Buyout for $70,000 Debt, but Math Is Questioned
Dave Ramsey advised a caller named Jennifer to offer her ex between $40,000 and $45,000 to settle a $70,000 obligation due in four years. The article notes that using a realistic discount rate, such as the 10-year Treasury yield, would value the debt closer to $56,900. Even so, paying $45,000 to eliminate $70,000 would still produce a strong return for Jennifer.
On an October 7, 2026 Ramsey Show episode, Jennifer of Columbus described owing her ex $1,000 monthly and a $70,000 lump sum due in five years, with four years left. She held $15,000 in a CD, saved $1,200 monthly, and netted about $9,000 monthly.
Ramsey proposed a $40,000–$45,000 early buyout. Yet a 10% discount rate values the debt near $47,800; a 5.3% Treasury yield puts it near $56,900; a 1.7% CD rate near $65,400. A $45,000 payment to erase $70,000 implies roughly a 12% yearly return.
This story may affect borrowers negotiating private debts and listeners who follow Ramsey’s advice. It could encourage people to calculate present value before making lump-sum offers, potentially improving settlements or preventing lowball rejections. It may also prompt scrutiny of popular financial guidance, especially when recommended discount rates differ from safe yields. Attorneys, advisors, and ex-partners involved in similar obligations could face more informed negotiations.