Dave Ramsey is a high-octane personal finance guru who advises people on how they can get out of debt.
His advice is simple: Come clean, cut up your credit cards and take back your life.
In a segment that aired this morning on on "Good Morning America," the radio talk show host revisited nine people who had gotten his straight-talk advice about their debt troubles last year, checking up on them to see how they were doing.
When Ramsey met with them in January 2009, he learned that they collectively owed more than $260,000 -- not including their mortgages.
Inspired by Ramsey's advice, they've paid off more than $140,000 of their debt -- despite divorce, illness and the daily challenges of sticking to strict budgets in a tough economy.
Ramsey shared additional tips for people who want to get out of debt:
Stick to a "zero budget." Ramsey advised that people who are concerned about debt take stock of their total monthly income, and subtract all necessities -- including mortgage, groceries, bills, debt and a little bit of what he called fun money -- from their total available funds until they get to zero. He encouraged people to give every dollar a name so they'll avoid impulse purchases and remain aware of exactly how much they spend.
Click HERE to see Ramsey's answers to six viewers' questions about how to handle their finances.
Put all your available resources into paying off debt. People in debt should keep an emergency fund of about $1,000. All other extra funds should be devoted to paying off debt, Ramsey said.
Pay debts in a specific order. Ramsey calls it the debt snowball. Debtors should list all their consumer debt obligations from smallest to largest (not taking interest into account) and make the minimum payment on every debt but the smallest. Pay the smallest debt in its entirety and cross it off the list. Follow the pattern with the next smallest debt, and keep going.
As people go down the list, they'll find that they have freed up more resources to pay off bigger amounts, and they'll remain motivated to keep going, he said.