A couple owing $120,000 spanning 6 credit cards and 2 car loans asked Caleb Hammer for help: ‘You guys are killing yourselves’

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Jessilyn, 21, and Brandon, 32, on the podcast “Financial Audit.”

Jessilyn, 21, and Brandon, 32, appeared on podcast “Financial Audit” to help with their debts.
Host Caleb Hammer worked out they owed over $112,000 in loans, credit cards, and car debt.
He told them they had to change their ways or they would be relying on their child in later life.

A couple appeared on the budgeting podcast “Financial Audit” to ask for help with their debts, because they were drowning in monthly repayments from the $120,000 they owed.

Jessilyn, 21, and Brandon, 32, from Springfield, Missouri, told host Caleb Hammer they were making around $8,700 per month together, mostly from Brandon’s job as a car salesman.

The two had a daughter under a year old, and Jessilyn mostly cared for her, while making some $400 a month from DoorDash and Uber.

Hammer worked out that their minimum payments across a host of debts came to $2,794 a month. Many were at steep interest rates that could leave them paying down the debt for eight years or more.

The debts included six credit cards two car loans, a hospital bill, and buy-now-pay-later spending.

Hammer went through the couple’s various debts, most of which are listed below. Not all of them had interest rates given.

Car loan, 2022 Jeep Grand Cherokee Overland: $57,891 at 4.24%.Car loan, 2018 Kia Stinger: $26,850 at 11.51%.Apple credit card: $7,988 at 9.4% interest.Discover credit card: $3,627.68.Citi credit card: $5,039.21.Capital One credit card: $2,917.43 at 0% until December.Hospital bill from their daughter’s birth: $1,368.Blue Cash American Express credit card: $857, temporarily at 0%.Chase Freedom credit card: $523.60 at 24% interest.

Hammer noticed some of the credit-card payments were going towards pay later apps such as Afterpay, which have their own interest.

“You’re financing a financing,” he said.

Hammer also noticed late fees on many of the cards, which prompted Jessilyn to laugh nervously.

“Think about you guys’ future, you’ve only been together for a year, and we have an infant that we want a better life for,” Hammer said. “We cannot be laughing about late fees.”

Other debts included a TD Bank furniture loan of $2,524 with a 0% interest for 3 years, which they were paying off in $150 monthly payments, and three Affirm loans. Two were for Amazon purchases totaling around $170, and one was to finance their wedding rings.

The wedding-ring loan of $4,200 was almost paid off, which the couple were happy about. But Hammer said they were “addicted to debt” and were likely to keep taking out more loans instead of making progress.

The couple’s phones, an iPad for their baby, and Jessilyn’s Apple Watch were all financed as well.

“You guys are killing yourselves,” Hammer said. “You guys are murdering yourselves.”

Hammer said he was “scared” for the couple because of their car loans, which represent around 70% of their debt.

There was $57,891 left to pay on Jessilyn’s car — a 2022 Jeep Grand Cherokee Overland at 4.24% interest. Her monthly payment was $920 per month.

Brandon’s car, a 2018 Kia Stinger, had a balance of $26,850 left to pay, at 11.51% interest, and payments of $525 per month.

Hammer read out the couple’s email to him asking for urgent help.

“I’m admitting to you we have a serious issue, and we’re just financially illiterate, I’d say,” Jessilyn said. “I’d say I’m financially inexperienced too.”

“And you’re pretty much financially fucked right now,” Hammer responded.

Except for the medical debt, this was all “consumer bullshit,” Hammer said, arriving at a total of $120,000.

“High interest for the most part, death,” he said. “This is the worst I’ve ever seen in terms of consumer debt.”

“That is a road nobody should ever go down, and this is something you guys need to turn around ASAP, or the future is not a future,” he said. “I’m just being as real and honest as possible.”

Brandon said he had around $17,000 saved up for retirement. Their savings had also taken a hit, and decreased from $2,000 to $50 to cover moving costs.

Hammer said the debt they had been racking up was “irresponsible,” and that he didn’t want the couple to end up with their child having to take care of them in later life.

Hammer recommended reorganizing their finances to keep their budget simpler. All the income should go into a joint checking account, he said, with all the bills coming out of the same one.

Overall, their monthly minimum payments came to $2,794. By Hammer’s calculations, they would need about eight years to pay it off at that rate. Some of the debt had variable rates, and if they went up it would take even longer, he said.

Hammer said the only way to tackle it was to increase their income to clear the balances faster.

“Every moment that you’re not sleeping or taking care of the kid, you are working,” he said. “Everything needs to go to this.”

He said they should cut up their credit cards, and also recommended they sell the Jeep.

Paid-for fun, he said, “doesn’t exist” any more for them, and they would have to rely on hand-me-down clothes for the baby for a while.

He said it would be a tough few years, but it would be worth it. The couple seemed to agree.

“I think we can stick to it for sure,” Jessilyn said.

Read the original article on Business Insider

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