I make about $200,000 a year, and my family and I are living paycheck to paycheck. We're on baby step two, and I'm just wondering if there's anything I can do to help jumpstart our process of paying off our debt. Where do you think all that money is going? uh it's all payments it's all consumer debt and uh it's uh it's all a bit overwhelming i'm sick and tired of being sick and tired if you know what i mean so so okay so how much debt do you have not counting your house uh about a hundred thousand dollars okay and what's that on uh two car payments how much is the first car how much do you owe on the first car uh two twenty thousand Mm-hmm. Where are you all in the second car? $30,000. Okay. And what's the other $50,000? It's credit cards and personal loans. Okay. So $50,000 in credit cards and personal loans. Was that all lifestyle, Lloyd, or did something happen that you guys had to take out a loan for? It was all lifestyle. We purchased a house last year, and we got a little in over our heads with the renovations and decided it was better to follow through on it than to live in a half-finished house. Okay. So it's finished now? Close to it. I've got one more bathroom I've got to finish. It's about halfway through the remodel. Okay. And how much is your house payment? $4,500 a month. What's your take-home pay? I make about $8,000 per month without bonuses, but with bonuses it can be upwards of $14,000 per month. Okay. It's a big swing. Let's see. Well, I mean, to get to 200, you have to be at 14. Yeah, well, I'm on track to make 200 this year before taxes, and that's with the bonuses. My bonuses are quarterly, and they're based on how I do at work, obviously. Yeah, because if it's a month with— So you've got a large chunk of your income that comes quarterly. Wow. Yes That makes the cash flow management tough It does That why it feels like it paycheck to paycheck You trying to live more like on 130 If you missed health plan open enrollment don panic Christian Healthcare Ministries offers a budget-friendly alternative to health insurance, and you can join at any time. With CHM, there are no network restrictions, and members say they often save hundreds of dollars a month compared to traditional insurance. So make a change that fits your budget, your values, and your timing. Check out chministries.org slash budget to learn more. You're trying to live more like on $130,000 and then $70,000 is bonused. Yeah, I mean, if I make my bonus, we feel more than comfortable making all our payments. But if I don't make bonus, then we're in the red. Yeah. If you could get down to living and making your payments on your base, and then when bonus comes in, it clears debt, that would work. Yeah, my plan was to get rid of one of our cars because I have a company vehicle I drive, but I'm actually, they're pulling my company vehicle and giving me a gas card and a stipend instead. So now I have to start using my personal vehicle again to commute. So going down to one family vehicle is kind of out of the question at this point. Yeah, that makes sense. Okay. And how much are you putting in your 401k? None. how much of a refund tax refund did you get uh well last year i think it was about 7 000 this year i'm hoping it'll be about the same we had a kid last year we're going to have another kid this year um and we also bought a house last year so that also helps us a little bit on our so you're so you're over withholding correct about 600 bucks a month yeah i guess yeah when i was filling out my paperwork it's all it's all that confusing and when my wife stopped working with our first kid, I was trying to figure out how to make it so we didn't end up owing. So I actually, I think I put, I think I have them withhold an extra 300 per paycheck just to make sure I don't end up owing at the end of the year. And that ended up actually being a save interest-free savings account with the IRS and they give it back to you in April. Cause that's about what you're over withholding is a 300 a paycheck Okay Yeah That 7 a year by the way Right Yeah That what turns out So I mean you over withholding and then you get it all back with no interest So no I think we stop that And that help some I mean, half of this is your cars, like what you're saying, Lloyd. I just wonder if... Yeah, I mean, that's really what I wanted to do. We were on track. I mean, we're underwater on both vehicles. We have to pay off at least $4,000 to $5,000 on either vehicle to be able to sell them without selling private sale, which is obviously difficult. I'd like to be able to just go take it in and have a dealership take it off my hands. Yeah. But difficult is what you've got right now. That's your whole life is difficult. This is true. So we need to do some things that are difficult, like never going out to eat again and never going on vacation. And I don't know what the deal is with that bathroom, but it needs to be either finished in the next 30 days or you need to pull off of it and start getting these bills paid. Because you guys have got to tighten up. Y'all have been kind of living a little sloppy. Yeah, 50 grand and all of it. More than a little sloppy, that's for sure. Well, but I mean, even if you're just a little sloppy with your income with these debts, you are paycheck to paycheck. Yeah. Because your $4,500 house payment is outrageously high on your base. If you don't make bonus, this house is insane. Yeah. But if you make bonus, you're fine. I mean, $4,500 as a percentage of $14,000 a month is okay, but not of $8,000. That's over 50% of your take-home pay then, so we can't do that. Do you guys have good monthly planning, Lloyd, with the bonus? I'm just wondering to put you guys from a budget standpoint, that there's an account where the bonuses come in and you're able to use most of that for debt, but it's also there as a cushion. It's like the highs and lows is what we call it, a fund that's able to kind of sustain some of this monthly, the monthly expenses. Like I'm just trying to get as consistent for you guys as possible. And sometimes having an extra account where there's money in there that you guys have already planned out throughout the year. You know what I mean? That you can kind of pull from just to, and again, low lifestyle. It's not for going out to eat and all of it. But I'm just trying to think from a, I just, I don't know. I could imagine month to month feeling like this And then you waiting on that bonus check And I just wonder if you can just spread it out a little bit more to give you more advantage Here the theory that I want to leave you with the thesis Better than theory. The thesis I want to leave you with. The more radical you get in your reaction to this situation, the faster you're going to be out of it. Okay. So can we agree that I need to get rid of the car somehow? I think we can agree with that. And move way down in car. That'd be a radical move. I don't want you to be to one car, but, you know, so, okay, I borrowed 5,000 from the credit union. I borrowed 12,000 from the credit union. Instead of 30,000, I got a $7,000 car and a $5,000 hole from the last car that I'm paying out of. I'd rather have 12 than 30. And that's moving out of that 30. Whatever. Let's just work our way down this thing and say, all right, what radical things can we do to shock this family system temporarily and get this math moving in our direction so we can see a light at the end of the tunnel because it feels like we're kind of stuck like a rat in a wheel by the mediocrity the mediocre handling of things and so what i want to do is get extreme over here extreme over here extreme over here as a one or a two-year plan so that i get rid of all of this and then we've got the renovations of the house in the rear view mirror and we've got no payments we have an emergency fund then we can do a lot of stuff with this quarterly bonus stuff coming in and out and you got a lot of wiggle room and you could start your 401k and start building some wealth but you feel really stuck right now and so what i'm going to do is throw dynamite in the middle of this thing blow it up let's create some chaos and shock the system of the family and i don't you We always laugh and say, sell so much stuff the kids think they're next. And we're not going to see the inside of a restaurant unless we're working there. And we're not going on vacation. And we're going to be on a written plan. And it's beans and rice and rice and beans. And we're going to make an adventure out of this. And we're going to put a piece of plywood across that bathroom for right now. And we're going to use the rest of the house. It's $4,500. Screw it. And we're going to get this car sold and moved down. And we're going to be radical. Then you'll be okay. Christian Healthcare Ministries can save your family hundreds of dollars on healthcare every month. Learn more at chministries.org slash budget.
