$250,000 In Debt and Can't Agree On How To Get Out Of It

[Music] Brought to you by Chom, a budget friendly, faith-based alternative to health insurance. ch Ministries.org/budget. >> I've stumbled against some some obvious decisions that's led me into about a 250,000 in consumer debt that has uh left me stumped on how me and and my significant other can make headway to get this taken care of in a short amount of time or or as quickly as possible. And it just seems like we run into a brick wall about uh beliefs on how we're going to do that. >> That's a lot, dude. I'm sorry. What do you What What's it on? Break it down for me. The 250 is on what? >> So, we have we have uh I have a 401k loan that has about 21,000 in it. We have student loans in around 80,000. We have a car that's around 36. And then we have legal fees, things that that we've both had to acquire. uh over the course of a few years, it's around 20,000. And then uh we have we did purchase a house and we've added some some debt there as far as just furniture and appliances and things that we're we're trying to get off. And that's the lowest hanging fruit of around eight. >> Okay. >> We're looking looking around 200 250,000 that's just sitting out there. And then uh on top of that is is I have a a child with a former relationship and and that one takes out a huge chunk of our uh available money. >> What's your uh what's your household income? >> So we sit around before uh before taxes well we about $200,000 but if you take out uh child service or child payments and things like that it's around 175. So, we bring home uh after taxes around 11. >> Okay. And significant other, what's that mean? >> Uh my fiance. >> Yeah. So, there's not a wei then until you're married. What's the wedding date? >> That has not been set yet. >> Why? >> If you miss health plan open enrollment, don't panic. Christian Healthcare Ministries offers a budget-friendly alternative to health insurance and you can join at any time. With CHM, there are no network restrictions and members say they often save hundreds of dollars a month compared to traditional insurance. So, make a change that fits your budget, your values, and your timing. Check out chmin ministries.org/budget to learn more. >> What's the wedding date? >> That has not been set yet. Why? >> Uh we've had a run of things that's happened in both of our lives and we just have that's been pushed. Um >> but you bought a house together. >> That we did. We did buy a house. >> That's more difficult than getting married. >> I don't disagree with you. >> It's also dumber than crap because you're going to get yourself into a mess buying stuff with somebody you're not married to. >> And so and so you're trying to act like you're So okay. um the legal implications, the relational implications, and the career implications of trying to do this without being married. The data is all stacked against you. So, that is one thing that you're that you're out over your skis on. One thing that you're trying to go uphill on and the data is really, really clear and there's a lot of research on this. Uh nobody seems to be talking about it because it's unpopular to talk about. So, everybody gets pissed at me when I talk about it, but I can it's kind of like my spiritual gift, so it's okay. Um the so that that that's one thing. Um and legal fees has that all that's all from child support issues and other things in the past. >> Uh primarily mine I've spent a decade fighting for my first daughter in my first marriage. >> Yeah. Okay. All right. Is that over? >> No, sir. >> So there's ongoing legal fees? >> Yes, sir. >> Okay. >> Yeah. The state of Texas stacks it against the father. So, >> sure. Yeah. Yeah. The um uh Okay. How much of the 175 is you and how much is her? >> Uh I make >> You just broke up. You broke up. Try it again. >> I make 120 and she brings home 80. So, we're sitting at the 200. >> Okay. >> But I take out the 25 because that's the the child support. >> Yeah. That's got to come out. Yeah, >> that is correct. >> Do not pass go. Do not go to jail. Yeah. Okay. >> The All right, I'm good with that. Um, take care of the kid. That's a good thing. So, how much of how much is being put into your 401ks? >> Uh, I have a employer match and I mine's every paycheck get paid weekly. Mine goes around 175 a week and then that's uh 6%. So, they match up to 6%. So, I just make the match. >> Okay. >> And then she's she's at four they match at 4%. So, she's at 4% of hers. >> Okay. All right. Well, here's the thing. Um, you can do what you want to do, but you called and asked, so we're going to be truthful with you because we love you and we want you to win. And um, uh, what would I do if I woke up in your shoes knowing what I know now is um, I had to come to grips when I went broke years ago with the idea of if I keep doing what I've been doing, I'm going to keep getting what I've been getting. So for something to change, something's got to change. Agreed. >> Agreed. >> And so and and then you can add with that formula then the more radically you change things, the more radically things will change. >> That make sense? And so, in other words, the more bizarre you get and the more your friends are looking at you like you've joined a cult and lost your mind, um the the probably the more progress you're going to make away from being stuck, which is where you are right now. So, that's that's the, you know, the decision-m framework that I'm going to give this advice in. And then you got to pick and choose. Uh, but I promise you, if you will go do every single thing I'm getting ready to tell you, in um, let's see, 3 years you'll be 100% debtree, not counting the house. In um, in four years, you'll have substantial assets. In 12 years, you'll be a millionaire. >> Okay. >> Okay. >> I'm all ears. >> So, the first thing I do is get married this weekend. Merry Christmas. Ho ho ho. >> Merry Christmas. >> There we go. You know, that simple. And um Rachel's uh anniversary is this coming Friday, so you can get married on Rachel Cruz's anniversary if you want. There you go. So, u she got she's a Christmas wedding. It was a lot of fun. So, um gather up some friends. Y'all been doing this for a while. You've been playing house for a while. It's time to be grown-ups now. You're not college students sleeping around. You go. It's time to do this. Okay. So, and then then you're combined. You're locked legally. You're committed into the future. You develop a shared set of goals, a desired future, where you want to go. I would stop all 401k contributions temporarily. I would get on a detailed written plan called a budget. I'm going to give you every dollar as your wedding gift. It's our the world's best budgeting and finance app. And it's also going to walk you not only do the budget, but it's also going to walk you through the stuff I'm teaching you. Okay? I would sell everything in sight. No more renovations, no more furniture, no more nothing. Beans and rice, rice and beans. You're not going to see the inside of a restaurant unless you're working there. You're not going on vacation. That's for dadgum sure. You are broke people and you've got to clean this up. I'd look at selling this car probably just almost symbolically. It's not as much of the money issue as it is it's just stupid in the middle of all this and it's really the only thing you got you can sell. You can't sell the lawyer or the credit cards or the 401k. So, um, and and then I'm just going to list these debts smallest to largest, and I'm going to squeeze every dollar out of my life. And like you said, I'm going to knock off the lowhanging fruit first, take the littlest, smallest to the largest, and go in that order and get in absolute crazy attack mode. Hang on, Christian. We'll pick up and uh help you out with all those gifts. Give him a Total Money Makeover book, too. And Ken, um, if you'd shut up, I could talk. >> I was going to say, what do I add to that? I just slow clap like you made a par putt. >> Christian Healthcare Ministries can save your family hundreds of dollars on healthcare every month. Learn more at chmin ministries.org/budget. /budget.