This Nurse Has $189k Debt and 15 Credit Cards

These interest rates are just absolutely insane. I see over 35% on multiple, multiple debts here. I clocked over 15 credit cards and numerous buy now pay later. You said in your form that you are willing to do whatever it takes. Yes. Good. That is off of my back. Hi, my name is Ashley. I'm 41 years old and from North Carolina. This is Millennial Budget Review. Okay. So looking at your application, I want to dig right into the things that you've tried. You've tried cash envelope systems, you've tried the snowball method, you've taken out personal loans, and all of this has kind of made you feel a little overwhelmed. But before we look into the Let's go back to 2023. Because you said you were diagnosed with a rare condition. Can you tell us what happened? So I am in health care. And I'm used to, you know, being on my feet a lot running around that sort of thing. And I started having some very odd back pain. And it was a little different than the normal muscular pain that you have when you're a busy person and you work kind of a really intense job like that. I let it go for a little while. And finally, I let my primary care provider know. And we found a palpable like you could feel this, this knot on my back. And instead of going away, it got bigger and it continued to grow and the pain sort of intensified over a couple months. So she sent me for some imaging. And it was discovered that there was there are two tumors. Oh, my goodness. So, so, wow. That's insane. You had a $3,500 emergency fund in the past, right? And then you got this diagnosis. I mean, how fast did that disappear? Almost immediately with my first visit to a oncologist because the oncology group where my insurance covers the in-network group didn't treat what I have, obviously, because it's so rare. So I had to see a rare and complex sarcoma specialist at an out-of-network oncology team. So it basically immediately was gone with deductibles and things like that. And how are you paying for treatments now? So I am paying right now for my chemo because I'm on chemo right now. I'm paying cash. My insurance covers some. It does cover some. I'm really fortunate for that and very thankful for that. But I'm left with some pretty high copays. Just one of my medications is $150 a month. And then I have a litany of other things that I have to take as well with that. Wow. How much are you spending per month on treatments? I would say probably, goodness, probably $500 to $600. Wow. And you've been doing this for years now. I have been in some kind of treatment for three years. I've done radiation. I've done surgeries. I've done IV chemos and oral chemos and some other different things that they're trying right now with this tumor type. We're just trying to find something that works. Wow. I can't imagine the stress, just the emotional toll that it takes on you and then the physical toll on your body. And now to throw in the finance piece of it, that's a lot to carry. It is. And it has been. And on top of it all, as you are pursuing treatments to figure out what is actually going to kill this tumor, you told me that your husband totaled your paid-off car. He did, unfortunately. Thankfully, he was okay, which to me, that was the most important thing. But my car had been paid off for years because I will drive a car into the ground. So it had been paid off, but I ended up having to get a new car because it was completely totaled. And the car loan's at 14%? It is, yes. Because I have so much debt when I had to get the car, he said that was the best that I could do at the time. I think now I could probably refinance, maybe, which we're going to look into. But yes, it's 14% right now. Oh my gosh. So you've got a lot of debt. I think we calculated it's over $180,000 of debt, and that's not including a mortgage. You have a mortgage too, right? Correct. Does it feel like you just got this black cloud or this curse that just won't go away? It does. It does. And we bought our house. I didn't expect my treatment to turn into what it has. We had made enough money to be able to handle our expenses. We did not expect this turn. I can't imagine. Okay. So what do you do for work? I'm a nurse. You're a nurse. And then does your husband work? Yeah. He is a respiratory therapist. Okay. So you guys both work in healthcare. And what's the household income? So it's about $6,400 a month. Are you full-time, part-time? I am. I'm full-time. Okay. Full-time nurse. I mean, that is not a sit-down desk job. It's not. And you're already physically dealing with the tumors. You're working these shifts. That's got to be high stress. You're dealing with your health, the weight of the bills. I mean, you're human. So you need to release a pressure valve at some point. So if you're just getting off of a shift, you're exhausted, you just want to feel like some sort of release. What are you doing in your free time? What are you buying? Are we scrolling an app? Well, I have four dogs. Wow. Yeah. They're very small dogs, but I like to spend a lot of time outside. I'm a little limited in what I can do now. I used to love to hike and things like that, but I can't do that right now. But I do like to spend time outside and time with my husband, just sort of relaxing. We're big readers. That's sort of our thing and what we do, especially since my diagnosis, because it's not a very labor-intensive hobby. In terms of where you spend money on the fun stuff, what do you like to spend money on? I'll be honest. Since 2023, almost all of our money has gone and our credit cards have gone to my treatment. However, prior to that, I love to go book shopping. I like to go on hikes and travel, like day trips and things like that. But we're a little limited in what we can do right now. We haven't done that in probably the last three years, just to be quite honest. And as we're thinking about your spending habits, I actually found some different things happening inside of your budget for the month that you sent me. So I want to pivot us over into your budget and kind of take a look at the spending and see what's going on. Absolutely. The first thing that caught my eye here was the spending patterns from your checking account. In the month that you sent me inside of that account statement, there was more than $7,000 of spending, but there was an ending balance of about $360. Do you usually carry just a few hundred bucks as a cushion in your checking account? Yes, I try to. I would really like to see at least one month of expenses inside of your checking account to give you a little bit more cushion in between the time that you get paid and when those bills are due and when you need to make payments, because it just felt like you were getting real, real close to that $0 balance. Does that sound like... Oh, yes. And that used to be the case, and that's where I'm trying to get back to. So, yeah. The debts are listed right up at the top. I clocked over 15 credit cards and numerous by now pay later, we have numerous affirmed payments. Where's all this debt coming from? Is this a result of the tumors or... The credit cards are... I really didn't use credit cards prior to this. I had two or three that honestly, they were so old, I got them in college and I had just kept them just because I didn't want to close the account. So, that's where most of the credit card comes from, gas. The affirmed stuff is usually household items that we need. And I think the afterpay was for some shoes because as a nurse, I do... That is the one thing I will splurge on because I am on my feet 12 hours at a time. So, I will splurge to get quality shoes when I need them. So, that's where that one was from. Yeah. Is this paid off now? I hope. Let me see. That one is. Yes. I'm going to delete that. Yeah. I think $25, your budget absolutely can allow for so that you don't have to break it up into payments, into a payment plan. I mean, is any of this Amazon stuff also for your dogs, for books, anything like that? Some of it is for dog necessities like food. I have one dog that's got a little bit of a skin condition and so we get some special spray for him. But most of it I would say would be things like honestly, just daily needs, paper towels, toilet paper, cleaning products, stuff like that. I think usually I do about three or four big orders, but when I needed this stuff, it just ended up happening to where I didn't have the money in my checking account to get it. So, I just did what I could. So, breaking up the cost of just basic living essentials into a payment plan with a firm. Correct. Okay. Yeah. That's a lot. Now, we're basically using instead of... Because when you sent me those credit card transactions, I actually didn't see any transaction history going on it. So, that's a good sign. Yeah. That's a really good sign. The red flag here for me though is that the spending behavior hasn't really changed. It's just shifted into buy now, pay later programs and then really just going at it with your checking account. There's still a lot of transactions happening there and it sounds like most of the time it is on the essentials. I showed this cup in the last budget review. Oh my gosh. I did. And usually it meant that I was about to roast somebody on their Dunkin' Donuts coffee habit. I didn't see any Dunkin' coffee habit happening in your budget. However, I did see some things that was a little eye-opening, especially when it came to your Apple subscription. $629 worth of Apple subscriptions. What kind of subscriptions do you have? So, some of those actually are split with my mother and my sister. It was different things like Apple TV, fitness apps, symptom tracker actually. A lot of health apps that the more I looked at them, I don't really need. I can use one to do everything. Yeah. I'm violently in agreement with that because that $600, if you could keep it and recoup it in your budget, what would you do with it? It would go toward debt, just to be quite honest, and probably toward meds. Yes. That is absolutely something that you should address because as we're building out this roadmap to address the debt so that you can get that financial burden off of your life so that you can fix and really focus on getting better health-wise, this is absolutely a behavior that you can take action on. I have recognized the longer that this has been going on, really the last three years, I recognized that the behaviors I had were not great. It's just that prior to the last three years, I had the income that I could just pay things off, and now I don't. Yeah. That was one big piece that I saw. Another spinning behavior that I saw is Poshmark. Tell us about Poshmark. I started actually this past month reselling everything. I got promoted at work and had to get some business clothing, and I didn't want to pay full price, I'll be honest. I just didn't want to do it. I got some things on Poshmark so that I would have about 15 outfits or so that I can rotate through, quality items that are not fast fashion that will actually last me a little while. That's where those are. Wait. Do you not wear scrubs to work? Some days. It just depends. It just depends. Okay. If it's going to be meeting day, then I'm usually in business casual. Okay. Got it. Got it. Got it. You're buying stuff for work. The clothing budget for this particular month was close to $500. Is that normal spending for you? I don't really buy clothes because prior to this, I was in scrubs every day, all the time. I didn't really need anything. At home, I'm just in casual, comfy things. I didn't really purchase much of anything. I had to stock up on the things I needed for this new role that I'm in. Yeah. It definitely looks like you went on a spending spree there. I know you're selling clothes, but actually the sales that you made on Poshmark was actually less than what you spent. It's a mismatch here. This is another area that I would address. Moving back up to the top. Those were the two big spenders that I saw was clothing, subscriptions, and actually subscriptions that also included a $300 Stitch Fix subscription. Is that still active? No. I canceled that at the end of June. Okay. Great. Then going back to the Apple subscriptions too, that's something that I would definitely get off of. We're doing an audit of our subscriptions. We're going through and taking a look at everything and just remove, cancel, cancel, cancel. Just to the point that you made earlier, this is money that absolutely can go towards the debt. Because when I'm looking through your debt, these interest rates are just absolutely insane. 35.9% on three, four, five. I see over 35% on multiple debts here. Then you have one debt in collections. Is that paid yet? It is. It is. Yes. That was in July. Awesome. Awesome. Several of the affirmed are paid off. Five of them are paid off now. My Bank of America credit part is paid off. This one? Okay, good. Then which affirmed ones are paid off? The first one is the $10.30 a month, the second one. That one's paid off. Then the one after that, number three is paid off. The next one, the $18.63 a month is now paid off. The $11.75 is paid off, number four. All right. We still have one, five, six, seven, eight, nine? Correct. Okay. That helps reduce my cortisol levels. I mean, how's your credit score? It's horrible. It used to be great. We just bought a house a couple of years ago, but now it's in the fair range. I think it's like 603. It's terrible now. Yeah. Especially with buy now, pay later programs, they're actually reporting that to FICO, and it is part of your credit report. The sooner that we can pay these off, the faster that we can build that credit score back up. Removing some of that bulk actually helps your monthly minimum payments is now at $2,084. You guys are taking home about $6,400 a month. Now the debt is representing about 32.5% of your income. Ideally, we want to see that debt to income ratio at 30% or less, so you're almost there. When you had given me your numbers, it looked like we were going to have to pivot into a formal debt management plan. But now that I'm seeing the numbers work, I think that you could DIY this and snowball this, but this all hinges on your student loan debt. Right now, your student loans, they're with Mojila, and you're on the save plan. That's correct. And the save plan is going away. Starting on July 1st, they were sending out notifications for borrowers on this plan and said, you've got to switch over to a new plan. Yes, they made us switch over. Okay, so what new plan are you on? They put me on an IDR plan, income driven, I believe. Really didn't have a choice, basically. And the best payment that I could get was about $1,200 to $1,300 a month. I'll get a final number on that at some point. I'm assuming it says that they're still working on things every time you log into Mojila. There's not a definite start date yet. But the one that I looked at that was the best option for me was about $1,250, I believe. Yeah, that's going to change things because we need to figure out whether or not you can continue to DIY the debt. And can your budget allow for a $1,200 monthly student loan payment? Because then if I add that in, now we've got $3,300 all in going towards the debt every single month. And now that's representing over half of the income. And that, I don't think you can manage that. Because even when I put everything in here, I actually didn't see any of the payments for some of your other stuff, your utilities and whatnot. I didn't see that. We are in the process of combining both of our accounts, my husband and I. So are you saying when you guys combine your finances into one account, will his income be factored into the rest of this debt plan? His income is going to go up about $2,100. But that won't be until actually next week. So I have not counted on that yet until I had it coming in. Okay. Because if we're looking at 33, hold on, 33, 34, if I want that to represent just 30%, you guys have to be bringing in $11,000 in order to actually comfortably manage that debt. And that's not what we have. Okay. Yeah, that's not what you're telling me. Because if his income goes up $2,100 and we're at 64, now we're at 85. And so we would need this debt to be around $2,500 a month in order for you to really see progress. Now, there is one thing that I want to connect the pieces for you is if we can figure out how to get this subscription, like you said, you've cancelled Stitch Fix, right? Oh, yeah. I want to get rid of the bulk of the Apple subscriptions. And so now I've got more money that I can throw to it. But let me change this. So $2,500. Now I've got some money to work with. And then we can start just chipping away at some of these other expenses. I really didn't see a whole lot on the fun side of things. You're not really spending money on restaurants. Groceries was just about there. I'm assuming this is just you, not your husband. No, this is both of us. Oh, this is both of you. Holy cow. Do you guys eat? We do. We do. We do a lot of bargain shopping. We're trying to keep our costs as low as possible so we can commit that money where it needs to go. Keep with that mentality because we need every single dollar going towards the debt as quickly as we can, especially right now while you're still in this gray period with your student loans. Because once that comes in, that's going to change things a lot. So there were other things here that I could see that you could cut. Things like monthly yard maintenance exterminator. We've got to at least temporarily pause those things because this debt, we are so close to just this thing falling apart that we've got to resuscitate this as best we can. You said in your form that you are willing to do whatever it takes. Yes. Okay, good. I'm going to get this off of my back. I want to set two strict rules with you and do some deadlines with you. Okay. So the first thing is for 30 days, we are going to entirely freeze any kind of clothing, shopping, any kind of Apple subscriptions, all of that unnecessary stuff right now so that every spare dollar can be set to building up some savings because we didn't even address your savings. Where are we at with your emergency fund? It's gone. Yeah. What happens if you are met with another unexpected expense? Would you pull from a card? I really don't know at this point because I had a decent emergency fund and I had some things in high yield savings accounts. That's where those were prior to everything happening in 2023 and I've just run through all of it. Yeah. We need to start building that up. And then rule number two, this kind of goes into my step-by-step plan for you, is to call the National Foundation for Credit Counseling and just explore what a debt management plan looks like. Now, the reason I'm saying this is because of the student loan payment. Once we factor in that student loan payment, now we're at 50% of your income is going towards the debt and we're not even factoring in any additional savings or anything else additional that you might need for your medical treatments and that's just such a dangerous place to live and I don't want that for you. This is a nonprofit organization that could help you explore your options. There's no commitment to work with them, but I think this is something that you absolutely should explore and I want you to call them within the next 24 hours. Absolutely. Are you committed to doing that? Yes. Awesome. Okay. And then when you call them, I want to reconnect with you on that and see how that conversation went. And also side note, as I was digging into this for you, the Buy Now Pay Later payments may not be included as part of that plan, but seeing as how you've knocked out quite a bit of them already and they're pretty low amounts compared to everything else, that's a thousand bucks. I don't think that would be an issue for you. I agree. Yeah. Your order of priority too is keep working the snowball plan while you still have wiggle room before those student loan payments kick in. And this is only if the conditions from steps three through six have been met, which is we're going to confirm what we're on. You said you're on IDR. We want to make sure we know exactly what that payment is. And what I'm seeing on studentaid.gov is you've got 90 days to make this happen and then the payments start to kick in. So I know what the statement said you had until 2028, but this has conflicting information on the side. Right. And it's been kind of hard to figure out what's going on because even when you call the VILA, you kind of get conflicting information. I've just got to work that out. What is actually going to happen with all of that? Yeah. Number four, I think you're already doing, which is amazing. All credit card spending comes to a halt. Yes. Yay. Done. Okay. So that condition has been met. Number five, the no spending, but also followed up with contentment activities. So what I would like for you to do instead of making those easy payments, you're spending money, you're kind of making those purchases. I want you to replace it with a contentment activity. So set a timer. And then I want you to write down every activity that you love to do that's free. So this could be playing with your dogs, reading a book, maybe organizing your books, having a FaceTime with your best friend, whatever it may be. I want you to compile a list. You can put this as a notes on your phone. And then I want you to implement two of those activities into your weekly routine. I think oftentimes we will spend because we are bored, sad, depressed. We're just reaching for something to get that quick hit of dopamine. And when we can replace it with contentment with things that actually reflect our core values, we start to remember these parts of ourselves where we don't have to rely on money and spending money to make us happy. And that was something over the last three months since I've gotten your tool and really put everything down on paper because honestly, I was just afraid to even look at it for a long time. But I recognize some of those behaviors that definitely needed to be changed. And I'm glad that I saw that because July looked a little bit better and now August is looking better. But I've got a lot of work to do to get back to the way things were. I'm so happy that the budget tool has really helped you just create more awareness. And if you want to pick up this budget spreadsheet, you can do so using the link below. This is a great way to just kind of see where your money is going. And then six, the very last thing is I saw a lot of keep the change roundups. I think this was a way for you to kind of start building up savings automatically, but then I would see some transfers back into your checking account. So it wasn't really adding anything for you. So I want you to just temporarily pause that automation because we kind of need things to stabilize by keeping things in one spot. The next thing, and this is the last thing, is your challenge. Your challenge is to do a dear money letter. It's going to sound really silly, but the real way to fix the debt situation is just getting a better understanding of your relationship with money. So what I want you to do in the next two days is just have some quiet time to think back to when you first learned about money or a core memory about money when you were growing up. Or maybe it's something pivotal like the tumor diagnosis that started to really wreak havoc on the finances and then literally write dear money and then say everything that you want from this perspective. I think this is really going to help with the behavioral side of things because that connection to the tactical strategies is what's going to build momentum. A lot of people will burn out on paying off the debt because they haven't connected with the why. They haven't connected with how their brain processes spending money or saving money and we need to make that connection again for you. And it's from there that you can truly heal this part of your life. How is all of this feeling? Good. I just needed, you know, I was sort of in a place where I didn't know where to start just to be quite honest. As someone who's fairly educated and I keep up with budgets for within my job now, it's just embarrassing that in my own life I can't do the same. Having a starting point and things to help with behaviors, you know, which I'm currently working on because it's obvious there are issues. So I think that this is very helpful and having the insight. I think it's incredibly brave of you for even coming on and doing this because a lot of people will end up shoving all of the bad financial crap in their life into a dark room, close the door and bye, see ya. And ignoring things and just avoiding your finances actually increases the anxiety because now you have no idea what's going on or what's happening behind that door. Take this as your kind of your first like awakening of where you are going next with your finances because you opened the door. We took a look at it. We all took a look at it. And now it's up to you to follow up on those action items. And I can't wait to hear how you go with the call to NFCC and what your plan of action is moving forward. Hi Justine, this is Ashley. I just wanted to update you on my progress since we met. So I did call the National Foundation for Credit Counseling and I'm working through a management plan with them to see what may or may not work. I also confirmed my student loan repayment with Mohela. Once that is active, it'll be $13.05 per month. And then of course we've stopped all credit card spending and my husband and I are embarking on a 30-day no spend journey. However, I think the most helpful thing and maybe the most eye-opening thing was the challenge of the Dear Money letter. Connecting some of my behaviors with how I grew up with money and how money affected my life growing up and sort of the origins of my money issues was probably the most helpful thing. Learned a lot about myself and I am looking forward to everything in the future. So I appreciate everything you did. Thanks. Ashley's six figures of debt came from a medical crisis, but what happens when a guest racks up $178,000 of debt and is living completely rent-free? The psychology is wild. Click this next video to see how we fix it.