Trying To Pay Off $65,000 of Debt on a $60,000 Income

Brought to you by the Everydollar app. Start budgeting for free today. I'm about $65,000 in debt and I only make $60,000 a year. I have a one-and-a-half-year-old at home and my wife is six months pregnant, so I'm just trying to clean this up so that, you know, my kids don't have to suffer, you know, through any of that. Love it, man. I love your heart, brother. Yep, the kids turned everything around. I feel like once you have kids, you're like, oh crap, we gotta get our stuff together. We gotta be different now. What's the debt, man? So about $18,000 of it is credit cards. They're split up into two different accounts. They've already been sold off to third parties and it's been a while. So I actually went into a debt consolidation program originally, and then the law firm that I was working with just liquidated and was done with it. So they kind of handed it back to me and I want to try to get the ball rolling because I really am, you know, starting to look around and realize that things start to fall apart around me and I need to, you know... So you have $18,000 that's already gone to collections and two different credit cards. What else you got? Then I owe about $17,500 on a car I just financed a few months back. I just bought a second car for my wife and I just actually over the weekend. That was about $3,500. I paid cash. Oh good. I owe about $10,000 on an AC unit for my house that blew up the first year that I moved in. And then I got my wife's car that we originally had as our only vehicle and they still want about $15,000 for that. And they took it. That's all right. That's done. That's already done. They already auctioned it off and that's what they want. That's the difference. Dude, what has happened up until now? Because this isn't just a matter of you being a debt. This is a matter of you. You just didn't pay bills. Yeah. So what truly happened was around the time that everything started to slow down with COVID, I was working at a factory job and I started to get into some credit card debt when they cut my hours. And eventually I kind of just got tired of it and went and started doing my own thing. So I'm self-employed now. I have been for about three years, but I clean houses for a living and it was rough trying to get everything on track at first. And then I guess I just kept knocking my wife up and now I don't have any help. And I have to have the ability to get out and really even get more clientele because I just don't have the time of the day as one person. How much money do you make? I make about five grand a month on average. And it just fluctuates in the wintertime because I have some clients that go away. And you've been in that business three years, you said? Three years now. Yeah. Three years now. And do you have predictable downtimes, you said, with certain clients? Yeah. From about January to April, I lose probably about between $1,000 and $1,500 a month. So what do you do in that gap to earn money? Honestly, I've just been trying my best to kind of stack up money aside so that when that time comes around and stack up things around the house so that I don't run out of things. I have stockpiles. I also have been very fortunate enough that when Christmas rolls around, and especially with the birth of my child, that people have been extremely generous giving me bonuses. I don't like to bank on that for the holidays, but it's been extremely helpful. How much cash do you have set aside? I have $1,000 set aside. I'm done with baby step one, but that's about all I have after the car. What's the car, the $17,000 car, if you sold it today, do you know what you would get from it? I want to say probably about $13,000, $14,000, something like that. So you're a little underwater in that. A little bit, yeah. I'm just trying to think through some math here because for me, my goal for you, Sam, would be to get out of debt as quickly as possible. So that's going to mean working nights and weekends. Your wife is going to probably feel like a single mom for a hot second because you are working so much. I'm sure you don't have a ton of expenses to cut, but where you can cut, we're not eating out. We're not going on Amazon. We're doing nothing. We're not spending money except for keeping the lights on, keeping the roof over our head, like the absolute needs, the necessities. And then the other thing is selling stuff, right? And so you're doing all of this at once to get out of debt as quickly as possible. So I'm just looking at your numbers and I'm thinking, okay, $18,000 in bad debt. You possibly could settle maybe, let's just say generously, half. What if that went down to $9,000? You can't do much about the repo car. You can't do much about the HVAC. And then the car, let's just say you took a $3,000 hit and if you could get a small loan from a credit union for $6,000, go get you a $3,000 car and then have that, right? That loan goes from $17,000 to $6,000. You start to kind of play with the numbers of what the ideal situation would be to get out of debt as fast as possible. And there's a chance that your debt's looking more like $38,000, $39,000 versus $65,000 at that point. I was hoping, especially since it's been the third party, some of the debt may seem willing to kind of work with you to just get anything. They will, but you're going to have to save up a lump sum. To settle with them. Yeah. Right now, like I said, I bought the car in cash and it took me about five months to do it, but I saved about $800 a month so that I could buy that. So I saved up four grand within that five months. I think that's the pace that I'm at right now. This is going to sound nutty because I know I'm talking to a guy who's so tired because he's got a newborn and a pregnant wife and you're hustling your own, you're a one man shop on your business. But you can't afford, you simply cannot afford to, when a big chunk of your clientele goes on vacation during the cold winter, for you just to hang out at home. You got to go find other work and you've got to grind and grind and grind. And after you get done cleaning all day, you come home and have dinner with your family and then you go stock shelves at Walmart until midnight. And this is going to be the next 18, 24 months. And you're going to feel like you're going to collapse, but on behalf of your family, you can do it. I believe in you. But it's going to take that level of negotiating with certain folks, selling stuff, cutting expenses to the bone for 24 months. And bro, you've dug yourself a big hole. So to fill this hole up, you're going to be tired shoveling. And you can scroll all day. You can Google hacks all day. There's not any hacks around. You've got to cut expenses and make more money. That's the only things you can do right. And the wild thing is too, Sam, if you can get this credit card debt where they can settle and you do this car and you find three grand extra a month, right? I mean, a lot of this is gone in a year, year and a half. I mean, it's pretty wild what the math starts to do, but it's going to take some drastic changes. It's going to be a drastic year and a half for you guys to get this to play out the way that you're wanting it to. But a year and a half of it, and it's behind you. And then you have learned, gosh, such a way of life of what you're not going to go back to. Like that's the legacy changer there for your kids that you're looking for. Having healthy money habits where you actually control your money and your money's not controlling you. Create your free every dollar budget today. 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