Can I Use Child Support To Pay Off My Debt?

Brought to you by the EveryDollar app. Start budgeting for free today. I am a single mom of three, ages 13, 11, and 8. I have my children 100% of the time, and their dad passed away last year, so I started receiving, like, social security funds for them, death funds for them from their dad's social security. And so I changed jobs and careers last year as well, so I doubled my income, making around $40,000, $45,000 a year, to bringing home close to $90,000 a year. How old are you, honey? I'm 38. What happened to him? I was divorced and single for the last six years. I've recently started dating in the last two years, but I've always been responsible. How did he pass away? Unexpected. I did not know he was using drugs, and I ended up giving him a heart attack, and he died in his sleep. How are the kiddos doing? Did they have much connection with him? They did, but they didn't. They saw him every other weekend, but towards the last few months of the visits over there, we lived, like, 15 minutes apart. They were kind of getting a little bit separated from there. They just saw activity there. They just knew it wasn't right. Wow. You guys have been through it. Yeah. I've been the bigger part and the most responsible out of our relationship. We were married for almost 10 years. He walked out from an affair, and he stopped paying child support roughly in 21. How much do you receive in Social Security benefits? That's where I'd like to get you. I receive close to $4,000 a month in Social Security benefits for them, and I don't know exactly what I should do with this money. Is it to help pay off my debt? It should be in your budget. That's what I was thinking. Between my home, and because of my income that I make myself, and then theirs, I almost look at it like child support in a way that I didn't receive through the time they were there. That's exactly what it is. It's replacing his income, and his income was being used for child support, and Social Security replaced his income. That's what it's supposed to do. It's not supposed to go into trust for the children in their future. Meanwhile, they starve today. It costs more than $4,000 a month to raise three kids, including food, electricity, shelter, gasoline to take them to school, clothing, and so on. It's going to take that and more to raise them. Agreed? Agreed. Yes, sir. Yeah. It's your money to use for your children. You're a good mom, and you're going to use it for your kids. That's really helpful. I sat down with my FPU leader last summer to help budget this out when I started receiving this stuff. I've just been letting that money pile up and use it here and there. I've got about almost $30,000 sitting there. I was like, do I use this to pay off my debt? Now, as of today, I've paid $56,000 in debt since last summer, and I've got $125,000 left. I'm ready. Summer gets busy fast. Between vacations, camps, and travel plans, the last thing you need is another thing to manage. That is why I love Delete.me. Delete.me removes your personal information from hundreds of data broker sites that can leave you vulnerable to spammers and scammers, and they keep monitoring it all year long. Honestly, it feels good knowing that someone is handling it for me. You can get 20% off an annual plan at join delete.me.com slash Ramsey. That's join delete.me.com slash Ramsey. I only have $30,000 in student loans left. I actually tried to start a food truck business about a year and a half, two years ago. I ran it for about a year running three other jobs trying to just make ends meet for me and my kids. I couldn't keep running myself ragged until I got this position last year with a friend. I'm sorry, $30,000 in student loans, $125,000 in debt. What is the other $95,000? I got a key lock loan for the business that I tried to do. That's at $40,000 right now. Then I purchased an SUV last fall because having three older children in a small car was just getting a little bit too tight fit for me and having three kids. How much do you owe on the SUV? $53,000. You can't afford that SUV, honey. Okay. You don't make enough to pay that. Okay. You make $44,000 a year. You don't need a $55,000. No, no, no, no, no, no. I switched from making $44,000 a year and I bring home close to $90,000 now. Oh, okay. I'm bringing home at least $8,000 a month now. Okay. Plus the social security. Plus the social security, yes, sir. Well, let's recoup. I mean, if you want to keep that car and fight your way through it, you can, I personally would sell it and move down. I think it's too much car. It's not way too much anymore now that we changed the numbers, but it's too much. And I don't want you to ever emotionally justify going into debt again. Right? Yeah. I don't want you, Michael. No, you took FPU and then you went and bought a $53,000 SUV. You're not getting out of that one alive. Okay. I'm coming after you. Understood. No more, no more. You've got to stop it. Okay. Because you're going to kill yourself. This is not good. You got to stop it. Think about it this way, Jessica. If you did sell that car and let's say you downgrade it to a $20,000 SUV, it gives you 33 grand in profit if the car is actually worth 53, right? No, she owes. You owe 53. So you sell it and get it. I owe 53. How much is it worth? I think on the market right now, they all run right around 60,000. Okay. So you get seven grand in profit. Plus you have 30 in savings. Now you can get you a nice SUV still and have money left over. You freed up the car payment, which is how much? It's right at, it's $983,000. You've got a raise right there. And now you can actually knock out this student loan debt. I would do that. I'd be in a $20,000 SUV that was paid for within two weeks. I really would do that. But overall that back to your original answer is it takes, the social security is there for the good of the children and it's not to go to the children's future. It's the good of the children. And so as long as you are spending your, the equivalent of your child support or the equivalent of your social security payments from your ex-husband's death on your children, then you are morally and ethically just fine. And I would just put the $4,000 in your budget. And I would get out of debt as fast as I can. And don't make any more of these emotional purchases that you emotionally justify with that. And walking through the Baby Steps, there's a time and place to invest for those kids, especially for their education. And that's in Baby Step 5. So Baby Step 1, $1,000. You have that. Baby Step 2, let's knock out all this consumer debt. Baby Step 3, let's stack up that emergency fund at three to six months of expenses. Baby Step 4, we begin investing 15%. So if you're investing now, let's pause that until you clean this mess up. Then we can start using this money to put away for college and a 529 plan. And that will really set them up. That's some of the best way you can use this money because now you're really prepping for their future if you can clean this debt up. I am very proud of you the way you went and got more income to make sure your kids are taken care of. You're a warrior princess. You tell people, Dave, just go double your income. And people go, you can't do that. She did it as a single mom of three. She said, I've got to have more money to do this. And she went and got it. So good for you. Good for you. And you've stacked the cash. You haven't blown it. So you got $30,000 in there. That gives you some options. If you don't do what George said to do on the SUV, at least throw the 30K at the debt and let's get it cleaned up. Let's get this debt paid off. Okay. But I would do what George said to do. I think he's exactly right. Create your free every dollar budget today. The simplest way to budget for your life.