[MUSIC PLAYING] Brought to you by the Every Dollar App, start budgeting for free today. Well, I find myself very much in a poor mindset. And I was listening to your conversations earlier, right? And buying vehicles, finding out what the down payment was, versus the monthly payment. 34 years old today, I find myself in about $50,000 worth of debt, salary, making about $88,000 a year. Have a home, and I purchased it about four years ago, so it's gone up significantly. Or good enough, I think, in equity, over to $100,000. However, the debt to income ratio, I think has finally caught up. And I think the writing was on the wall a few years ago, but I've been able to kind of stay that off as much as possible, unfortunately, to pay and find myself, making minimum payments, sometimes missing payments, dealing with late fees, penalties, and really just making the fair minimum, sometimes missing those payments, in turn, having negative effects on my credit score, which are obviously impacting me on long-term 40 loans, or anything of the sort. So the question is, well, what do you promote or advise that I do, but what I had thought about is selling the home that it currently have. Using the equity to pay off the debt, in turn, raise the credit. I should have some money left over at the time to purchase another income-generating property. - That's the last thing we need to do. - What are you looking to, man? - Business opportunities. Okay, Danny, I can sense, I'm less concerned about your credit score, I'm more concerned about Danny. You sound like a guy who just got punched in the face. - You all, yeah, I'm looking at that. - You just seem just tired, like I'm just done, I'm overwhelmed, if I get one more overdue bill, like, are you ready to just live a different life? - Yes, sir. - Are you single? - Are you single? - No, I'm not, I have a wife at home, two children, and I think that's a big part of it, right? With my 30 years down the road, what life of my major is. - How does she feel? - About them and them. - Is she as exhausted as you? - Yes, yeah, yeah. - Okay. - Very much so. - What are you for living around? - What's that now? - What's your job, what are you for living? May 88,000. - I'm a EHS manager, environmental health and safety manager. - Okay, well, what kind of debt is the 50? Break it down. - And again, what kind of debt? It's two vehicles, about 15,000 each. Some of it is investments that I made in the property, perimeter fence, water softener unit, some credit cards, that's minimal, I think that's like $2,500 to $3,000, but the bulk of it, it's the vehicles, the property improvements. - And this is for your primary home, you did these improvements? - Yes, sir. - Okay. - Yeah, dude, stop calling those property investments. You wanted a water softener on your house, like just call it what it is, 'cause it allows you to band-aid or duct tape over, like you wouldn't normally spend that money, or maybe you would, but just call it what it is, dude. I wanted a nice fence, and I built a nice fence. I wanted a water softener, I got a water softener, and I needed, I wanted to upgrade the flooring, I did that. Let's don't wrap it up into like... - The ROI. - Yeah, yeah. - Okay, so what are the cars worth? - They're upside down on the vehicles, I bought them like two years ago, or you know, - Have you checked like Kelly Blue Book, private party value on this? - Yeah, they're, yeah, I think it's at all about 16, 18, and they're, oh, they're valued like 10, eight, something like that. - Okay, you said you had 15 on each, you're saying it's 16 to 18 on each? - Something like that, I'll be honest, I don't know the exact numbers, but it's between that 15 to 18 range, and I say that because there's late fees that have compounded on there, so if it was 15 at 1.8, the late fees have brought it up now. - Oh, please do not let this car get rebode. You need to get out of this thing. Even if you're underwater, here's two options for you to get out from under this. Number one, you save up the difference in cash. You have a great income, I don't know where it's going right now, I don't buy that it's just going to the minimum payments, and you know, I think there's some spending and lifestyle happening here too, right? - Yeah, I mean, mortgage payment, it's $2,700, you know. - And what do you take home every month? - A big chunk of it is not. 5,000 giver takes, $2,500. - Yeah, so about half your income is just going to try to cover the mortgage. - Exactly. - Well, I'll tell you this, selling the house is a last ditch napalm, we tried everything else, and we couldn't scrape out of the dead after years of trying, that's when I would say sell the house. But to me right now, it feels like a cheap shortcut. And I do think this was too much payment for you. I think if we can't get the income up long term, then selling the house is a good idea just because it's too much of your world. But don't do it as a temporary shortcut. - Yeah, and then that's where I find myself, right? Most of my income is going to the property, to the house where-- - Do you have any money in savings? - I mean, all of it has been slowly chipped away, and that's what I meant by writing what's on the wall. Once I saw that savings slowly spayed away, that's when I should've made some drastic changes, but I had enough to kind of make it buy up until now, but now it's paycheck to paycheck. - What about your lifestyle stuff? Do you want to eat a lot? - Not anymore. - Okay. - We used to, I tell you, we did have a lifestyle where comfortable, we would go out and everything was paid to top, credit score was in the 700s. This all really turned downhill within the past four years and quite pinpointed, and then obviously it's my fault, I think too much debt all at once. - Okay, what are the car payments? - $500 and $600. - Okay, so here's the other option. I mentioned saving up the difference in cash of the difference you're under water on, that way you can sell the car, and you have a clean title. The other option is going to your local credit union getting a loan for the difference, and so that way instead of being $18,000 in debt, you're in debt for the difference, and at least that gets you out of the car, frees up a payment. Can you guys live on one car for now, or do you need two? - We essentially are one of the vehicles and it's not even registered, because I can't afford that. - Well, can you work overtime, side hustles? - I'm a salary employee, so it's not a real overtime situation, but yes. So, side hustles. - I'm a very, yeah, I'm a handyman, I do a lot of handy work, and I'm not afraid to work, so I-- - What are you charged for handy with work? - I cleaned out things, I charged by the job, I'm charged by the hour. - But Danny, there's something, you make 88,000, you almost make 90 grand. - Yeah, sir. - I don't understand, help me with this. I don't understand what you're investing. - All goes, yeah. No, you're probably taking a pension, right? - A little bit here and there, but nothing that's steady enough for me to say, yep, this is my investment plan, or like-- - You need to point all the guns at the debt, which means no investing, no eating out, every extra penny we can scrounge up is going toward our smallest balanced debt. We're gonna knock that out, which is the smallest debt. Credit card? - Yeah. - Okay, so we knock that out. - The problem is, here's the thing, you kind of picked up on my tone of voice, I have a hard time looking at that, when I am behind on the HOA, I am behind on the mortgage payments, and I'm looking at a potential eviction from my home. - Well, if you're gonna get evicted, then we gotta sell it before you hit this point. But I think we need to take an honest look. Right now, you don't even know your debt numbers, go pull your credit reports from all three bureaus. You can do that for free, annualcreditreport.com, get a real picture, sit down with your wife, and say, we're in crisis, we need a plan. Hang on the line, I'm gonna send you my book, Breaking Free from Broke, to help you navigate some of this. - Bro, this is happening to you. You can go down with this ship, or you can get a path off, but this is happening, you gotta look at these numbers. I know it hurts, I know it's scary, you have to look at these numbers. 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