Finding Financial Redemption: Debt Confessional

Dave Ramsey, the high-octane money-management guru, radio host and author of "Financial Peace," tours the country counseling Americans on something he knows all too well: debt.

He had some harsh words for a group of consumers representing a cross section of American workers -- teachers, hairstylists, auto workers among them -- all hurting in the tough economy and all with one thing in common: debt.

"This is the freaking problem here and nobody talks about it, do they?" Ramsey told the group. "Let me ask you something then. We have 16 families here. Incomes from $15K to $150K, what would you guess the total debt is?"

After a couple of shy guesses around $150,000, Ramsey wrote the answer on a board -- $637,843.

"It's a mess. You are going to have to get up in your mirror and go, 'You're the problem,'" Ramsey said. "That's the bad news. The good news is you're the solution."

Project manager Donna Kumar told Ramsey that debt put a strain on her marriage, which is now ending in divorce.

"I am really afraid right now. … It's filed. It's going to be finalized soon," she said. "The biggest reason for that is me. And that's the first time right now that I have ever said that. It's me and debt and my inability to get control over it. I am going to be alone and paying bills on my own, and I am terrified."

Katie Huff and her husband make less than $50,000 a year but owe more than $30,000.

"I am bringing my husband into it, giving us more debt. It's just hard," Huff said through tears.

Ramsey's Advice for Climbing Out of Debt

According to Ramsey, the beginning of a debt-free lifestyle starts with communication and coming clean with your significant other.

"Say, 'That's it. I've had it. I'm done with this. I'm not living this way.' When you get to that moment is when you change your life," Ramsey said.

Ramsey said budgeting is also essential to controlling debt.

"It's the dreaded B word. We think of it as medieval torture. But think about it. If you work for a company called You Inc., and your job was to manage money for You Inc. and you manage money for You Inc. the same way you manage money for you now, would you fire you?" he said. "Most people go, 'Uh, yes.'"

Ramsey Suggests Grade School Math

Ramsey said managing money can be difficult, but ought to be thought of in simple terms.

"A budget is really sixth-grade math. You say, 'Here's what I've got coming in this month and I'm going to spend every one of those dollars until I get to zero,'" Ramsey said. "Every dollar has a name. And agree on that with your spouse if you're married. If you do that, you'll feel like you got a raise."

Ramsey said tackle "basic necessities" like house payments, food and transportation before attacking debt "with a vengeance."

"Have a garage sale. Sell so much stuff the kids think they're next. Name the dog eBay. Put the cat on Craigslist. Let's go crazy here," Ramsey said. "And list your debts smallest to largest. Pay minimum payments on everything but the little one and attack the little one. … It's like going on a diet and losing weight -- as soon as you knock off that first one you go, 'Yes, this is going to work. I can do this.'"

For those who find their debt piling up faster than their paychecks, Ramsey suggested finding another source of income.

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