"We've Made a Lot of Bad Choices"

0:00Brought to you by the EveryDollar app. Start budgeting for free today. My husband and I are both IK support as in the industry of IK support. Toll income is around 200,000 a year, but I went into the EveryDollar app and put in our stuff for August. And it's showing us that we have more payments than we have incomes. Wow, how much debt do you have? How do we start? Just under 325,000, not including the house. Wow. Student loans? What is the, what are the debts? About a third of it is my student loans. OK, so will you list out your debts for us? There's a lot of them. You can give us the big chunks. Yeah, what's much is in a credit card debt, card debt, personal loans.

1:02We have two cars, about 60,000 total. OK. We, we got, we've made a lot of bad, bad choices. That's OK. We get talked in the buying things. OK. Time share. We could probably have put up. God, we got out of time shares years ago. OK. Who's talking you into this? Sales people go figure. You need to stop talking to people. That would solve a lot of this. OK, there's a lot of credit card debt, Sam. Yeah, we do have credit card debt. But we also have some home improvement debt as well. So the last latest one was a roof that is in short for 50 years and is good for 100. Are you trying to sell me on a new roof? Oh my God. You're leading with the features of this roof. What did it cost you? 50,000. OK. I won't be around in 100 years.

2:03I can care less about this warranty. But OK, cost you 50 grand for a new roof. So we definitely got ripped there. That's an insane amount on a roof. And we have new HVAC from three years ago that we, we're going to turn involved with that. But you owe on that as well. We do all on that and the company that sold it to us. So oversold and didn't sell properly. And the thing isn't worked. Sam, I'm going to be honest with you so far. It sounds like your debt has been everyone else's problem. You were talked into it. I got scammed. I was told this. If you want to get out of this thing, the first step is to realize it's not all your fault, but it's your responsibility. Yes, no. I can't we completely understand that. OK, so I want to know how you guys have been month to month now. Because if you plugged in all your numbers, and I go, gosh, we're in the red. How deep in the red are you? 800. 800 dollars.

3:03OK, where has that been coming from? The past couple of months. I mean, if the payments have been consistent, where and you guys have been short, 800 bucks, are you going deeper into debt? Are you have savings that you're taking from to cover that 800? No, we don't have savings. Because every time we try to start, something happens. OK. And it gets drained. So I don't know how you often live in here that. So you're using the credit cards to cover any gaps? We don't have gas. We have two electric vehicles. No, saying to cover the gap of like 800 bucks that you need. You're using credit cards to fund that? For some of it, yes, I believe. Yeah, that's where all the credit card debt is ending up from. OK. OK. Has your husband looked at this stuff, too? Have you guys sat down and looked at the budget together? Or is this just you so far? Yeah. No, it's, both of us are tired of pay check to pay check.

4:04And I get more anxiety over than he does. But he does get frustrated. OK. Well, I'm glad you called Sam. Because yeah, we're going to be able to really just walk you down what we call the baby steps. And you're going to have to, in order to make this work, is it's going to have to be a complete 180 of what you guys have been doing, how you guys have been making decisions, buying things, how you've not been budgeting, how you, you know, me, everything you've been doing, you're pretty much going to just do the opposite. And so the fastest way to do it is that first step is $1,000. And you keep it, yep, in that high yield savings account, and don't touch it. And then you're going to be looking at a mountain of debt. And as you listed out smallest to largest, and you said, we have a lot of debt. So if it's multiple credit cards, multiple still, I mean, like literally write them all individually out and actually look at it.

5:04And so, OK, this is where all of our money is going. And it's probably going to be pretty shocking. You may have already done that because you guys said you plugged in your income to every dollar. And then from there, you're going to have to figure out, OK, we're going to be working extra. We're going to be selling some stuff to get some cash in fast. We're going to cut our lifestyle. And instead of acting like you make 200, we're going to act like we make 80. We're going to live on nothing, nothing, in order to get this margin up to start knocking out this debt. The only thing is to say I'm as as you guys start paying it off, paying off some of these debts, it's going to free up those monthly payments. So it's going to cause you to have more and more margin as you go down to the debt snowball to pay it off. But yeah, as you're looking at it, it's going to be a bit. And I would look at getting rid of these cars just to give you a quick win. Yes, yes, especially if you're not under water on them. You can profit off of them and use that cash to buy yourself some cheap cars, five grand each. That's going to be your ticket out. Because then you've got two sixty five left.

6:06And if you through like, let's say you take home 12, making 200 K, take home 12 a month, you can throw seven K at the debt. You're done in three years. So that's the napkin math that we now have to reverse engineer and go, okay, we need to come up with $7,000 and live off five. And there's a good chance. A thousand of that is in the car payments, right? So if you get rid of that, that's going to free up cash immediately. And then yeah, looking at your lifestyle. But that's it. And in salmon, what's wild is that this is so doable and what's crazy to when we see people do this, especially as they are working their way out of debt. And when it's over a 24 month period, some people do it, you know, 18 to 24 months. But when you're looking at a three year journey here, it's amazing. The amount of people like it raises in this time, they find some side hustle. They get focused. They start working harder. They get the promotion. It's crazy. So your income's hopefully going to be increasing throughout this process too, which is going to help bring extra margin, but it's going to take, it's going to feel like whiplash of how you guys have been functioning with money. But you know what?

7:06You want the opposite result. You're tired of where you are. And so that means there's going to have to be some changes and it may be uncomfortable for a bit. But you're going to start to have this normalcy of what this looks like to have control of your money. Create your free every dollar budget today, the simplest way to budget for your life.