How Do I Tackle My $13,000 Credit Card Debt?
TLDRCrystal and her husband from Bakersfield, California, reached out for advice on tackling their $13,000 credit card debt, accumulated largely from a previous low-paying job. They are determined to eliminate the debt, stop using credit cards, and make smarter financial decisions. The couple has a truck that they consider selling to help with the debt, as it is worth more than they initially paid. Their household income is $54,000 annually, and they have a small savings from a recent bonus. The financial advisor recommends selling the truck, setting up an emergency fund, and creating a strict budget to pay off the debt. They also suggest using the 'Every Dollar' budgeting tool and committing to an 18-month plan to change their financial trajectory. The couple is encouraged and motivated to take control of their finances and avoid lifestyle inflation despite an upcoming raise.
Takeaways
- 🎉 Crystal and her husband have acknowledged their $13,000 credit card debt and are committed to tackling it.
- 📊 The debt accumulated over a year, with both partners now on board to address it after watching educational YouTube videos.
- 🚗 They own a truck worth around $62,000, which they consider selling to reduce their financial burden.
- 💰 Their household income is $4,500 per month before taxes, and they have a recent bonus of nearly $2,500.
- 🚫 The advice is to sell the truck and purchase a more affordable vehicle to meet their needs, like a 'farm truck'.
- 💳 They have two separate credit cards with a combined debt of $13,000.
- 🏦 It is suggested to establish an emergency fund with $1,000 from their savings.
- 📋 A written budget is recommended to track and control expenses, with a focus on paying off the debt.
- 🚫 The couple is encouraged to stop using credit cards and to commit to a strict financial plan.
- 📚 Crystal has purchased a book on financial management, and they are advised to utilize resources like Ramsey Plus for further guidance.
- 🌟 A year membership to Ramsey Plus is offered to help with budgeting and financial education.
- ⏳ With commitment and discipline, the couple can change their financial trajectory within 18 months.
Q & A
What is the total amount of credit card debt Crystal and her husband have accumulated?
-Crystal and her husband have accumulated a total of $13,000 in credit card debt.
Why did Crystal and her husband decide to address their debt situation?
-Crystal and her husband decided to address their debt after watching YouTube videos that served as an eye-opener, realizing they needed to be smarter with their money.
What was the primary reason for Crystal's husband to continue using his credit card despite the debt?
-Crystal's husband continued to use his credit card because he was not fully on board with getting out of debt until they watched the informative videos together.
What is the current value of the truck that Crystal and her husband are considering selling?
-The current value of the truck is around $62,000.
What is Crystal's household monthly income before taxes?
-Crystal's household monthly income before taxes is $4,500.
What is the advice given regarding the sale of the truck and the purchase of a new one?
-The advice is to sell the current truck and buy an older, less expensive truck that is suitable for their needs, such as hauling horses.
How much is the credit card debt divided among the two different cards Crystal and her husband have?
-The total credit card debt of $13,000 is divided between Crystal's card and her husband's card, but the individual amounts on each card are not specified in the transcript.
What is the current amount of savings Crystal and her husband have after receiving a Christmas bonus?
-Crystal and her husband have almost $2,500 in savings after receiving a Christmas bonus.
What is the first step recommended for establishing an emergency fund?
-The first step recommended is to take out $1,000 from their savings to start an emergency fund.
What is the importance of creating a written budget according to the advice given?
-Creating a written budget is crucial for tracking expenses, controlling spending, and allocating funds towards paying off the credit card debt.
What is the expected monthly income increase for Crystal's husband come January?
-Crystal's husband is expected to receive a raise, increasing his monthly income to $5,200.
What additional resource is offered to Crystal and her husband to help with their financial journey?
-A one-year membership to Ramsey Plus is offered, which includes access to financial education and a premium budgeting tool.
Outlines
🚜 Addressing Overwhelming Credit Card Debt
Crystal and her husband from Bakersfield, California, join the show to discuss their struggle with a significant amount of credit card debt, totaling $13,000. The debt accumulated due to her husband's previous lower-paying job. They express a strong desire to eliminate this debt, stop using credit cards, and make better financial decisions. Crystal reveals that they have been aware of their debt for over a year, and it took a wake-up call from watching the show's YouTube videos to spur them into action. They also discuss selling their expensive truck, which they could sell for a profit, and replacing it with a more affordable vehicle to haul their horses. The Ramsey team encourages them to take immediate action, sell the truck, and start budgeting to tackle their debt.
💰 Creating a Budget and Tackling Debt Together
The conversation continues with a focus on Crystal and her husband's commitment to financial change. They discuss the two separate credit cards that have accumulated the $13,000 in debt and acknowledge the need to sell their truck and establish an emergency fund with a portion of a recent bonus. The Ramsey team advises them to buy a cheaper, more practical truck for their needs and emphasizes the importance of creating a written budget to control their expenses. They stress the urgency of paying off the debt by redirecting discretionary spending towards it. The team also offers them a year's membership to Ramsey Plus, which includes access to budgeting tools and resources to help them stay on track. Crystal and her husband express gratitude for the advice and share that they are determined to change their financial habits, especially with an upcoming raise.
Mindmap
Keywords
💡Credit Card Debt
💡Debt Elimination
💡Emergency Fund
💡Budgeting
💡Lifestyle Creep
💡Selling Assets
💡Stay-at-Home Mom
💡Farm Truck
💡Financial Peace University
💡Every Dollar Budgeting Tool
💡Commitment
Highlights
Crystal and her husband have accumulated $13,000 in credit card debt.
The debt was largely due to her husband's previous lower-paying job.
Crystal has been trying to convince her husband to stop using credit cards for over a year.
Watching YouTube videos together was a turning point for both of them to address their debt.
They realized the need to be smarter with money after seeing their current income and debt levels.
Crystal's husband is making a significant income now, prompting a reevaluation of their financial habits.
They are considering selling their truck, which they could potentially sell for $2,000 more than its purchase price.
The truck is valued at around $62,000, which is considered too expensive for their current financial situation.
Their household income is $4,500 per month before taxes.
The couple has $2,500 in savings from a recent Christmas bonus.
They plan to set aside $1,000 for an emergency fund.
The advice given is to sell the truck and buy a more affordable one to reduce expenses.
A written budget is recommended to track and control their spending.
The couple is encouraged to allocate any extra income, such as a future raise, towards paying off the debt.
A commitment to an 18-month financial plan could significantly change their financial trajectory.
The couple is advised against lifestyle inflation despite the expected raise.
They are offered a one-year membership to Ramsey Plus to aid in their financial planning.
The couple is optimistic and committed to becoming debt-free.
Transcripts
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