I Make Good Money But Behind On Debt Payments

Brought to you by the EveryDollar app. Start budgeting for free today. I just have a ton of debt. And I, honestly, I've made the payments and everything for the last year and a half. But it's gotten to the point now where all my interest rates have went up to where my payments have doubled. And I'm basically, I've made all my payments every month, except for after I make all my payments, I tend to live off of my credit cards because I don't have any cash left on everything. And I just, I don't know how to get out from under my credit cards. This is the first time I missed three credit card payments this month that I didn't get paid. And I just, I don't know how to get out from underneath them. Why didn't you get paid? No, I got paid. They didn't get paid. Oh, they didn't get paid. Okay. Yeah, like this is the first time that three of my credit cards didn't get payments. Gotcha. Are you talking about minimum payments? Yeah, it's just the minimum payments. Okay. Okay. Well, let me tell you, if you just make minimum payments, the debt will swallow you whole. That APR of 29% while you're making a payment of 50 to 100 bucks a month is not going to touch the balance. So what you need to do is just lay them all out and attack the smallest one and just make the minimums on the rest. Now, it sounds like you were trying to do that, but you're also still using the cards. And that's part of the problem. Well, one of my credit cards, the payment is $679 a month. Goodness. How much credit card debt is this altogether? Altogether credit card? That one there is just, that one there, I owe $21,000 on $157. What's the total, total, total? Give me everything in one bucket. How much is it? $21,800, $12,000, $6,000, $17,000, and $1,800. Those are all my credit cards. Do you have other debt? No, I do. I have like, I had to get siding on my house. I owe $14,000 for that. And I have a personal loan that was $7,300. I have a mortgage and a car payment. Wow. Are you single? Yeah, I am. Okay. How much do you make annually? About $103,000. Okay. Wow. Well, you're calling us because you're at the end of the rope here. You're going, I can't, I'm starting to miss payments. You weren't making progress before. You were just barely staying afloat, it sounds like. Yes. All right, Sarah, I want to tell you this, okay? Number one, I'm glad you called. And number two, this is really scary, and we're going to give you a plan that will work 100% of the time if you'll just work it, okay? But you have to decide, I'm done with this way of doing life. Oh, I am done. I want to just, because I make fantastic money, and if I didn't have all this debt, I wouldn't need it. There you go, sister. I make fantastic money. That's it. Like you already are future casting what your life would not only look like, but would feel like how much peace you would have, how much laughter you would have, like just how well you'd be able to sleep if you didn't have this, because you're working your butt off all week, all month, all year, and then you find yourself getting further and further behind. But it can't be, and again, this is 30 plus years of doing this. It can't be, with the hole you've dug, you have a big shovel, which is great, but you can't partly get out. you have to decide I'm all in or we'll love you and we'll just say best of luck to you and we'll still be friends and all that, but you have to make the choice and I'm calling you out and make the choice today. I'm going to be done with doing life this way. And that means I'm gonna have to be radical. And my friends are going to think I'm weird. I'm going to do something completely different so that I can make this great six figure salary doing what I'm good at and what I love. And I want to start loving the life that I have all around that job. Right? Yes. All right. Game on. I'm glad you're here. Thanks. What's left on the car loan? The car loan, I owe $14,238. Okay. So based on my napkin math here from everything you threw at us, you're in about $95,000 in debt. Does that sound about right outside of a mortgage? Approximately, yeah, maybe a little less, but yes. Have you pulled your credit report to get a real picture of what's going on? The last time I looked at it, it was like 685 was my credit score. No, not your credit score, your credit report. That's going to show you all the accounts, all the balances. One of my credit cards gives that to me free, so it has it all on there. What a gift. That's nice of them. There's a perk we don't talk about enough. That's like giving you an ice pack after we punch you and punch you and punch you. It's like, here, we give away free ice. Like, thanks, man. Yes. Okay. So what are you doing for work? I am a nurse. I work three days a week, and then I just picked up a second job, and I've been trying to pick up extra at my job. um good what's the second job the second job i'm working in a doctor's office okay one day a week what's that pay you the doctor's office pays me 25 an hour okay and you can ramp that up if you needed to i'm trying to figure out which levers we can pull here for the income side well i could pick up extra more at my other job because i make more money there i make 55 60 an hour yeah the more you can do in your full-time job it's going to be even better are you taking you said 103 is your gross income approximately i don't i don't yeah i think it was 103 in some some hundreds last year okay are you taking home about six thousand dollars a month no my bring home is almost five thousand a month i have like insurance it's like three hundred dollars a pay and um i did cut down my 401k because i did have it at eight percent i dropped that down to three So 3%, so that way I wouldn't still get, not get the free money they offer, like, because, you know, they match it. So I went from 8% down to 3%. Sarah, hear me out. Are we concerned about free money right now when we're missing our credit card payments at 29%? No, I guess we shouldn't be. What if we're doing something countercultural, like John said, and we took our match down to zero? Okay. Just for 18 to 24 months, that's it. And then, boom, you just freed up $3,000 a year right there. Okay. It may not feel like a lot, but what that does is two things. Number one, it frees up real money back in your paycheck, and it also gets you a little bit more angry at your debt. Because now it's not just stressing you out in the present. It's robbing you from your future. And now you have an onus to go even harder in the pain of this debt, and that plus 1,000 other things is what it's going to take. It's not going to be one thing that's going to be the magic sauce here. It's going to be I'm going to do a budget every day, look at my accounts every day, look at the balances every day, and look at that smallest one with a vengeance and attack it with all the margin I can muster up through extra work, cutting my expenses down to nothing. And you're single, so you can do this without affecting many people, right? Right. Good. So no one's going to be like, man, I wish you were home more. It's just you. So that's a blessing because right now you could work 60, 70 hours a week. What's your mortgage payment every month? $11.78. Oh, wonderful. Good, good. So the debt payments, have you added them up to see what it would take to just cover the minimum payments on all debts for a month? I think I did, but it's like... Is it $2,000? No, it's more than that. Okay. So here's your homework. I'm going to give you our EveryDollar premium budgeting app. And what you're going to do is list out the next upcoming paychecks. You're going to jot down all of your expenses, including the minimum payments on those debts. And then you're going to see how much margin there is. And if there's not a lot, that tells us we got to cut some expenses. We got to increase the income. That margin, that little green number at the top showing you there's a thousand bucks left over if you do it this way, that is your ticket to freedom. Meal prep, no more going out to lunch, no more going out to dinner. We're going to be all over this getting this debt paid off. Create your free EveryDollar budget today. The simplest way to budget for your life.