we have no idea what we're doing from day to day what bills are getting paid what bills are not getting paid we're very very overwhelmed with thatb right now I lose sleep all the time sometimes we don't have money for food so we'll go grocery shop and we'll put on the credit card now I'm in the situation where I feel like I'm trapped we are right now living from my wife's overdraft if we don't get help I'm pretty sure we're going to lose the house [Music] I'm a manager for communications company I'm a jack of all trades master of none kind of thing right we have a three-year-old daughter ryanne I live with my mother-in-law my father-in-law my sister-in-law right now I earn about 42 $43,000 a year with him I'd say it's significantly less about 1,800 to 2,000 a month so like he'll work a couple months here a couple months there we separated there for a bit I wasn't really contributing I wasn't working at the time I think everybody relies on me to a point so if I fail I fail for everybody she's the one that worries the most when it comes to the debt and stuff she worries more than I do I don't think Kevin's worried at all about the future he's taking it like okay whatever happen happens we'll just deal with it I'd say I'm probably in debt around 20 to $25,000 in credit card bills I really want Gail to help us with our finances because I think we're way over our head this month I'll help this couple move from red to Black I've been solving money problems for over 20 years tackling everything from High Finance to low income I help people understand money in debt which is still a huge mystery for most folks and it's the number one one reason couple split up so now I'm making house calls there's no single reason for this couple's debt Kevin's erratic employment has left raw struggling to carry the load they're relying on credit cards to put food on the table and it's a big table living with an extended family so I'm here to help them get back on track if you don't mind the very first thing I'd like to do is just don't my bag have a tour own would that be okay sure definitely excellent you know you have a nice home thank you thank you very much it's all kid focused there's always somebody to watch ran or to be with Ryan family is so important big deal right in my wife's culture when the parents get old the kids take care of them clothes with tags I do have a lot of clothing I have a lot of clothing that's completely unnecessary I think at times they have a lot of stuff I would spend about $100 a month in toys for ran we spent almost $2,000 on a 2-year-old's birthday party is this part of the birthday bash that was yeah that was the $500 birthday gift for second birthday oh my god well that little tour explains a lot about their spending I've also reviewed their interview tapes and six months of their finances so I know where they're going wrong I see this love of the family but I also see that there's a fair amount of strain from your clear desire to hold the Reigns sometimes I'm overwhelmed by it all the finances all of the budgets everything are me when I look at your financial stuff I see things that really concern me you're actually increasing your debt all the time by buying stuff and you have no means of repaying the debt you do have even though they're both over spending rosin is the one carrying the financial burden in this household the first thing I saw was that you're paying about $199.97 a month to keep the roof over your head and that represents about 60% of your income that's what's crunching you in terms of your cash flow right okay it's huge we also have a record of how you've been spending you're spending $494 a month on clothes that's a lot of money to be spending on clothes every month another $165 in a discount department store [Music] $74 a month on toys that's actually in a toy store $97 a month online the evil computer is shopping for you you're also spending about $281 a month on stuff now these are all the different stores you've gone to that I haven't plugged into one particular category it's just a variety of stores and you're spending $400 $76 in cash which we can't track at all and as if that's not bad enough you have 23576 in existing [Music] debt but based on the balances that you could carry on these cards you could have over $65,000 in debt like that that no you should be scared silly you know one of the things I can't figure out is how you got so much credit like who do you know seriously I assume we don't want to keep doing this I could stop using them you could I could it's you I don't have a problem with using them you have them how do I use you use them too I I have one credit card my wife has I don't know one time she had about 10 or 20 of them when you did your budget for me when you did a up the numbers you thought you were spending about $4,400 every month but I have news for you you were actually spending over $6,000 a month which is 180% of your income you keep moving forward with this shortfall every single month and in 5 years you'll be half a million dollars in debt that's n so not that you're prepared to put it away yes of course because moving forward I need a commitment from you I need you to promise me that you're going to do what I ask you to do or at least give me permission to slap you yes I can do it no not you can do it you promise me you will do it I will do it I will do it and you promise I'll do it the very first thing we're going to do is we're going to learn to live on cash okay and I'm also going to give you a series of challenges to do you meet my expectations I'll give you 5,000 bucks if you fail I'll take money away okay okay the very next thing you have to do is get me your credit cards and your debit cards I want them all go get him go get them Kevin wants a cure but can he stand the remedy don't look at me like that sideways glance that says you hate my GS Mone rosn and Kevin have racked up $24,000 in credit card debt and they're getting deeper in the hole every day you were actually spending 180% of your income you should be scared silly this couple has a bad case of consumer itis this I've never worn this I've never worn this this we spent almost $2,000 on a 2-year-old's birthday party and they're struggling to make ends meet within an extended family household it's mainly myself carrying the family to get out of this mess they'll live by my rules for the next month this couple will learn to live on a strict cash budget no more credit cards they'll complete weekly challenges to tackle their money and relationship issues and if they're willing to change I'll reward them with thousands of dollars no changes no money hey spread them out here babe let's see the damage you're doing they're like a deck I have a present for you chop them up go come on you don't have all [Music] day kiss this last piece of plastic Goodbye Oh that's yours by rest in peas fix costs aside the cash they'll have left to live on is going to come as a roote Awakening Ros has been using her credit cards as a security blanket and that's about to come to a screeching halt in essence I am cutting your variable expenses by 69% so while before you were living on $3,500 a month now you're going to be living on $1,100 a month approximately and that's a weekly budget of $278 you're going to be working on the jar system we're going to put cash cash in jars within certain categories and you're going to use the budget binder everything you spend goes in the budget binder there's a note made when you're living on cash you have to do the detail otherwise it'll just leak right out of your fingers okay okay within each of these four categories food Transportation clothing and entertainment you're going to have to divvy up your $278 into your four jars to make it last so you get to the end of the week before you get to the end of the money I know this is going to be tight which brings me to my first challenge based on this budget and the fact that you are spending 60% of your income on housing costs you have to find a way to get all the members of this family to contribute now I know members of this family contribute my point is you don't have a system that clearly delineates who's paying for what when and so you're flying by the seat of your pants your family has to chip in $800 to alleviate this pain the money goes into a single joint account to pay for the family expenses after you've done your contribution to the family account whatever's left over is your money my family knows about our financial situation um however I don't think that they understand how much that we're actually in um one of our things to do is to call a family meeting together so we can figure out our budget we're $800 short we can say that you'll give us 700 and Rosie can contribute 200 okay and that makes nine so what's the extra 100 bucks for the other 100 we'll use and we'll like put it aside just in case one month was short we open it another account it's a house account we'll put it into that account and then pay all the bills out of that for the house sounds reasonable to me I yeah I don't mind that and then we'll put it in on the 30th of every month okay and hopefully it will solve the problem right okay how was your challenge the family meeting actually went pretty smoothly did you get the $800 you needed yes we got nine actually okay and so what was your plan for that extra $100 to keep it in the house account just in case we run into an emergency start an emergency fund savings fund and just hang on to it wonderful so like I'm rubbing off on your good the hardest thing for myself was the budget to keep track of what yes I was doing there's only one thing that I needed to go over with you this is your food expenditure for the week the thing that is most noticeable about it is how much food there isn't on it yeah there's coffee there's cigarettes more coffee coffee coffee more coffee coffee coffee there's chocolate there's pop in fact out of $103 and 73 you managed to spend just under $31 on groceries okay you have the time didn't have the time to grocery shop I didn't have the time to grocery shop if I don't do it ites doesn't get done done but you know what there are five people living in this house make a list and send them out to get it and if you are always at the last minute having to Shell out money for stuff because you can't plan that's part of the problem this is more expensive and it shows in all these takeouts that you've done okay there are four take that's not too bad on to considering people you can't afford take out yeah you have to suck it up and eat at home food Kevin should be as picky about his finances as he is about what he eats for lunch cold lunches kind of get you know put well see I know what his problem is with the lunch it's not the making lunch he likes a hot lunch he's working hard I'd rather eat nothing okay he's working hard he's lifting but you know what you can do it just by yourself a thermos don't look at me like that sideways glance that says you hate my guts and you wish I'd just dry up and blow away I do not this is about we have X number of dollars we can only spend X number of dollars here's the reality check if you spend $10 a day on coffee and lunch that's $2,500 a year down the toilet this week's challenge is really easy you are going to sit down with that budget now and you're going to reincorporate the $900 you just got and I will send along a worksheet for you to use that shows the budget that I gave you with an empty column beside it okay so that's exactly what you'll do coming up their homework needs some correcting you people don't seem to think you need to save [Music] anything Roslin and Kevin are living on credit but they have no way of paying it back in 5 years Years you'll be half a million dollars in dayb Ross has a steady job in management but Kevin is a general laborer whose work is inconsistent it's like he'll work a couple months here a couple months there I've put them on a strict cash budget and cut out 2third of their spending they've already managed to get their extended family to contribute regularly to the cost of running the house now that everyone is pitching in I've asked Ross and Kevin to create a new budget they can both agree on if they can complete my challenges successfully I'll give them up to $5,000 dude you want to calculate [Music] mm-m you want to write what do you want me to write we go through here cuz these are all Necessities we minus it from the total you can knock your transportation down to 100 add 20 bucks for Bank fees cuz that new account too yeah clothing here we say 50 be on the safe side here we say 75 75 on the electricity yep to help them deal with the stress of their finances I suggested they take some time out for themselves without spending any money of course they just need a lovely Winter Walk to discuss things in a calm and mature manner there are times when I feel like a school teacher grading homework where is my red pen so I have gone through the budget and you guys did a reasonable job what you did however was for the sake of making everything fit you eliminated a whole bunch of categories that really have to be addressed I do think you're going to need more than $50 a month for clothes ran is growing MH okay you had nothing in for car repairs um medical and dental you have nothing so put away $50 a month for medical and dental okay you need an emergency fund and you people don't seem to think you need to save anything no no I do I was just hoping to pay off for that before I start saving okay what I'm trying to avoid is pushing you back to those cards right you accumulate it and then when something goes wrong that costs $450 you have a sum of money that you can call on right okay so when I add in the amounts that I have put in here to make your budget realistic you have $256 a month left over which is pretty good the extra $900 a month from their family went a long way to helping them meet a more realistic household budget the $250 left over is going to be an important part of their next challenge you have about $27,000 in debt nowhere in your budget have we made allowance for debt repayment you're going to go out and find another $250 to boost that 250 you already have and make sure that you have the $500 a month you need to retire that debt within 5 years okay there's one tough question left to be answered do you have a sense that he's pulling his weight [Music] Ros and Kevin have been living well beyond their means spending $2,600 a month more than they make sometimes we don't have money for food so we'll go grocery Sho we'll put on the credit card over the past month I've given them some challenges to get their finances back on track the rules live on cash learn to budget properly and stop wasting money it was a reality check to have somebody else come in and tell you that most of the money that you're spending is on just stuff if they live by my plan I'll give them up to $5,000 their last challenge is to find an extra $250 a month to tackle their debt with Roslin already carrying most of the financial burden they agreed it's time for Kevin to step up and bring home some cash I'm looking for part-time work um in security I've done that kind of work before so it's not a problem I'll get find I'll find another job doing that part-time hi I'm calling about uh the job for security how did the challenge go last week well it was you so coffee up sport the extra $250 oh yeah yeah yeah I went for went for a job interview and pretty much got it so that's some extra money to come in every month okay how are you feeling about all of this now because when I got here you were carrying a fairly heavy weight so tell me how you're feeling no I feel a little bit more relieved do you have a sense that he's pulling his weight yes okay so you both of you feel better about all of this yes I don't feel like I'm carrying all of it now okay I'm glad to hear you say that when I got here you guys were spending $2,600 a month more than you made so I'm very happy to say that I think you have done a job that needed to be done and that you are moving in a positive direction this month Ros and Kevin learned to properly budget for an extended family household they've curved their emotional spending and now they know that if they want to maintain their lifestyle they'll need to make more money I realize that um I spend a lot of money on things that are unnecessary and I do it mostly when I'm frustrated that it's sort of a Band-Aid for me so I think I learned to curb that so I have have a check for $4,000 now as you know I'm the one who decides how much you end up getting and part of the reasons why you're getting $4,000 is that I wanted to see a little bit more in terms of a commitment from Kevin to make more money a career change a sense of what you were going to do differently um that was what I was looking for a little bit more of she didn't think Kevin was as focused as he could be on wanting to help me carry the burden in the future with that being explained I understood the reason for the decision but I have something else Fe youed as well okay I have dinner and hotel room overlooking Niagara Falls so you can have a romantic evening with all the trimmings enjoy yourself thank you I'm hoping that things will get better for me the whole burden of the debt and everything is kind of lifted off the shoulders a bit so the entire process worked out pretty well listen I wish you the best of luck moving forward thank you can't stand the Kissy Kissy eh [Music] m