In $780,000 of Debt With Nothing Saved For Retirement

Brought to you by the EveryDollar app. Start budgeting for free today. My husband and I are $780,403 in debt. It is going to take us more than 15 years to pay it off. At that time, we will be 64 and 65 and have almost nothing saved for retirement. Stop right there. Stop. Take a breath. Take a breath. Stop right there. There's nothing that says that that has to be 100% true. and i don't even want you to say that that's going to be the reality because between now and age 64 a gajillion things can change a gazillion okay so i don't even want you to internalize that fact because all that's going to do is drain you of the energy that you need to attack this fair enough fair i hear a woman who's very very scared and you're right to be but fear shuts off the future sometimes. And I'm glad you called. Okay. What is this debt? A lot of credit card debt. So $172,844. It's from a credit card consolidation. We have another $40,795 in open credit card debt. We have two car loans. Each of them are $42,000. We owe taxes of $18,463. state taxes of 1298 county taxes of 8453 tell me go back to the last i got 1846 1298 what was other tax bill 8453 8453 okay keep going a home equity line of credit for 81,655 Okay. Student loans of $272,724. Okay. Personal loan of a little over $14,000. Okay. And a COVID loan of $83,460. Is that SBA? It sounds like a business mess, huh? Yeah, an SBA, yeah. Tell me the SBA one more time. $83,460. Okay. What was the business that failed? So I had like a side wellness business that was making like $36,000 a year. And just at COVID, we couldn't do any services or anything. And it just went under. And I had a couple employees and I just kept sinking money into it, trying to keep it alive and used a lot of credit cards for it as well. And it's closed now. Okay. So what I'm looking at, what I see kind of off the top here, where there's some light at the tunnel is I see some light at the end of the tunnel with these vehicles there's eighty four thousand dollars worth of vehicles here that has the ability to be lessened substantially and we'll talk about how to do that in a minute the other place i see a lot of light at the end of the tunnel and it's not going to be a fun light i'm just letting you know it's not going to be fun but these credit cards uh because you have no money these are probably all going to go into default at some point they're all going to roll into some form of collections at some point and you're going to be able to settle most of this at some point fair enough okay okay other thing where i see some light at the tunnel is maybe this heloc do you still own i'm guessing you're still in that house yes okay tell me about the house um the how much we owe on the mortgage yeah tell me what you owe tell me what you owe and what it's worth we owe 197,927 on it it's worth about 400,000 okay so that's the other place i see some light at the end of the tunnel. If I'm in your shoes, I'm starting from scratch, which means whatever is here, I'm dismantling it brick by brick. And one of those things is the house. There's a lot of equity there that you need. You need whatever cash you can get your hands on. And I hate that this HELOC is going to bite into that when it's time to sell this bad boy, but whatever you can get from that when the time comes, because I'm not saying you have to do this immediately, but this is a move that you're going to need to make at some point to clear some of this debt. That is another place that you're going to pull from. So just by looking at those three places alone, we're going to clear out the 81,000 fairly simple. I mean, simple in theory, it's not fun or easy to sell a house emotionally. We're going to clear out these cars and then we're going to look at these credit cards and they're not getting our attention. They're going to pound sand for a while because you can't afford them. And then they're going to roll to collections and people are going to want to sue you and you're going to have a stack of money ready to settle when the time comes so that's what's going to happen with those these taxes even the consolidation don't pay that either these well let's talk about that in a second let's talk about these taxes your number one goal in life is these taxes because this is what's going to jack like really can jack you up garnish your wages mess with you in major major ways if they already haven't so i almost want you to clear remember that in Vogue song free your mind i want you to free your mind from everything except this tax debt. That's your number one. All right, we're tackling this. I want you to act like this is your only debt in the world. And I know that that sounds tough. You're talking to someone who had $500,000 of debt almost. So I know this is the mindset you have to have. These taxes, let's start with the $8,000 one and we're going to move up. We're going to try to get as much help as we can get on that. Now tell me, what do you guys earn every year? And then tell me what you're taking home a month so i can make sure it makes sense i make 117,000 a year my husband makes 63 and we bring home around um 12,800 a month okay good wonderful i love that I love that you make a good income. What does your husband do for work? He's a truck driver. Okay, and what do you do for work? I'm a nurse. Okay, so I love this because both of you, I think I know for you, you've got room to like amp it up and ramp it up some more on the hours, am I right or am I wrong? Well, I just almost signed a weekend contract to ramp up my hours but I already work an extra 20 hours a week, so I was battling because I'll be gone now 84 hours a week from my home. You have kids? Yes, a 16 year old and a 20 year old. Oh okay, so that they're older, they matter but it's not the same as like a six and a five year old as far as feeling the time so here's the thing, Clark, you are going, you and your husband are going to have to come up with a plan because you're going to go spurts where you work 80 hours a week and then you're going to have spurts where you're like, I can't, I need to like take some time and then you're going to take your time and then you're going to ramp up again and then you're going to take your time and then you're going to ramp up again. That's what this looks like over the next however many years. And today I'm just going to tell you what Jade and Sam did, because what I heard when you called in was when you were talking, I saw myself standing in front of my mirror, having that same conversation with myself. And I told myself, I cannot look at the timeline on this. If I look at the timeline, the math is not going to math. I need to just go and do the next right step and this is going to start coming together, it is going to um, so again just to recap because you need this, the only thing you're focused on is this tax debt, we're getting this tax debt done and I'm going to work day and night like Michael Jackson until it's done my husband's going to do the same thing we're not going to see each other as much as we want we're not going to be who we want to be to each other right now we're owning that and accepting that and we're going to set a date and we're gonna say we're gonna run at this pace for the next x amount of months and then we're gonna stop for a month and then we're gonna ramp up and then we're gonna stop for a month and a half and then we're gonna ramp up you guys sit down and make that plan i would make it be tied to this tax debt i'd say when we pay off the you know the the eight thousand dollar one and the twelve thousand dollar one take a quick breather now we're gonna go and we're gonna annihilate the eighteen thousand dollar one and when that tax debt is done we're gonna party like it's 1999 and then we're going to hit the ground running again. And then your next thing that you're going to do is that you're going to start stacking up some chunks of money and the credit cards. How many of them are in collections? None of them. We've been just robbing Peter to pay Paul and keeping the minimum payments going on all of them. Okay. But how much margin does that leave you with? We're short about $1,100 every month. Okay. So that means you can't afford it. It's going to be a pain in the butt, but some of those, like I said, you're going to have to leave those for a while. Next, we're going to look at the cars. We're going to look at the cars. If we're upside down, we're going to save up chunks of money so that we can get out of these cars. Get a loan for the difference if you can, or save up the difference. And you're going to be driving junkers. Do you hear me? Call us back. We're going to give you everything you need. Christian's going to pick up and take it from here. Create your free every dollar budget today. The simplest way to budget for your life.