Case study: Starting with less than zero

I am not a trained financial expert. I'm not an accountant, I'm not a financial planner, and I'm not a stock broker. What's more, I've made many many money mistakes on my own financial journey. As a result, I've always been reluctant to sit down with people and go over their budgets.

That seems to be changing.

In March, I spent a couple of hours talking with a friend about her financial situation. A few days ago, another friend asked if I'd be willing to meet with him in the near future to puzzle through his budget woes. And yesterday, I took three hours to chat about money with my friends Wally and Jodie.

As always, I've changed names and certain identifying features in the story that follows. Unless I have explicit permission to share details, I do my best to protect people's privacy when I write about their intimate financial lives.

Wally and Jodie have recently begun dating. He's in his early forties (and recently divorced); she's in her late twenties. They both work in food service, and have done so all of their lives.

Their trouble — and the reason they asked me for help — is that they cannot seem to make ends meet. They work hard but never have anything to show for it. In fact, they feel like they're falling further and further behind.

“Can you help us?” Wally and Jodie asked.

“I can try,” I said. “Let's look at your numbers.”

An Income Problem

“To start,” I said, “let's look at how much you're bringing in.”

“That's part of the problem,” Jodie said. “We don't have a fixed income. Because most of our money comes from tips, we can't predict how much we're going to make from one month to the next.”

“Right,” said Wally. “And it doesn't help that our hours are irregular. We both work at several different restaurants. Some pay better than others. Plus, there are days when you won't have any customers. When that happens, you're sent home early with nothing to show for it.”

“Well, how much would you say you make on average?” I asked.

Wally and Jodie made some calculations. “I make maybe $1400 per month,” Wally said. “On a good month, I'll make $1700. And Jodie makes another $1500. These numbers are after taxes.”

Jodie nodded. “But we each just picked up a shift at a new restaurant. That should give us each maybe $500 extra each month.”

“That's great,” I said, jotting down numbers in my notebook. “But I don't like looking at potential numbers. I learned the hard way that when you budget based on future raises, bonuses, or other expected sources of income, you can get into real trouble. Obviously, you hope that extra money comes through, and when it does, you can apply it to your budget. Until then, though, it's best to ignore it.”

I thought for a moment. “My first impression — before we even look at your spending — is that you're not making enough money. You're making less than $3000 per month combined. We should brainstorm some ways you can earn more.”

Starting with Less than Zero

I turned a page in my notebook. “Now, let's talk about how much you're spending.”

“That's the problem,” Jodie said. “We spend exactly what we bring in, no matter how much we bring in. That means there's never enough to catch up on our debts — some of which we're behind on.”

“What are your biggest expenses?” I asked.

“Well, our apartment costs $900 per month — but it'll go up to $950 pretty soon,” Wally said.

“Not bad,” I said. “That's actually a great price for Portland. And it's a reasonable amount based on your income.” I explained how the average American household spends one-third of its income on housing; I advocate aiming for 25% — or less.

“Food costs money,” Jodie said. “We budget about $100 per week for groceries, but that's just bare bones stuff, you know?”

“I have a car payment,” Wally said. “In fact, that's one of our biggest problems. I took out the loan when I was married. My ex-wife and I are both on the loan. It seemed reasonable at the time. Now, though, it's a pain in the ass. I owe $12,500 on the car and payments are $300 per month. To make matters worse, I'm already a couple of months late on my payments. This is causing me a ton of stress. It makes Jodie stressed, it makes my ex-wife stressed, and it makes me stressed.”

“Hm,” I said. “I don't have any experience with getting behind on payments. I used to live paycheck to paycheck, for sure, but I was lucky. I never had an accident or got sick, so I was always able to make payments on time. I don't know that I have any good advice for you about this problem, but maybe some of my readers at Get Rich Slowly could help.”

Wally nodded.

“Honestly, that's one of our biggest frustrations with the money advice we've found,” said Jodie. “All of it assumes that you're starting from zero. Or more than zero. What if you're starting with less than zero? What if you're deep in debt — we have $35,000 in debt, just like you used to — and what if you're behind on your payments? What then? All of the advice we read seems to be written by rich people for rich people.”

“Yeah, I can see how that would be frustrating,” I said. “Like I said, I don't have experience starting at less than zero. I started at zero. I was deep in debt, but once I stopped spending, I already had a gap between my income and spending, so I could immediately start paying down debt. You two have some catching up to do. We need to figure out how you can play catch-up.”

A Mountain of Debt

As we worked through their budget, I was mostly impressed. While Wally and Jodie aren't bringing in a lot of money, they're not spending a lot of money either. As with most budgets, they did have some discretionary items that could be cut, but not a ton of them. (Their biggest discretionary expense seems to be local travel. They're spending a couple of hundred dollars each month to visit family and/or have fun with friends.)

My biggest concern was their debt. Between the two of them, they have $35,000 in debt:

  • $12,500 for Wally's car, on which he's upside-down. (“I wish I could just sell it and wipe out the debt,” Wally said. “But I'd still owe about $3000 if we sold it.”)
  • $12,500 for Jodie's student loans.
  • $10,000 of miscellaneous debts, such as $500 they just spent to buy new tires after getting stranded because of a flat.

To complicate matters, Wally and Jodie are going through several large life transitions right now. Wally is fresh from his divorce, they just moved in together, they're both trying to find permanent full-time jobs, and they're thinking about moving to a cheaper place to live.

“So, that's our situation,” Jodie said. “For good or ill, that's what we have. Where do we start? How do we get out of this mess?

“Well,” I said, “the good news is that I think you're both capable of working together to build a brighter future. The bad news is that it's going to take some time. It's also going to require some sacrifices — or what seem like sacrifices. If you want to fix this, you'll have to do some stuff that sucks in the short term. But I want you to remember: Most of these sacrifices are temporary. They're only until you manage to get rid of the debt.”

“I read what you wrote about growing up poor and having a scarcity mindset,” Wally said. “I totally relate. My family was poor too. Any time my parents got money, they spent it. They felt like they deserved to treat themselves because they'd gone without for so long. And looking at my own life, I see that I do that too.”

“That's a tough trap,” I said. “I totally relate. And I know first-hand how when you're poor, you feel like any windfall should be spent on fun. But if you want long-term happiness and financial stability, you have to decide that — for a year or two — you're not going to give in to that temptation. When you get a bonus or a raise or a big tip from a table at work, you'll put that money toward your financial goals, not toward a nice dinner out. Once you get rid of the debt, you can have all sorts of nice dinners out. But until then, you have to agree to make a game of living on less.”

Growing the Gap

“I want you to focus on two things,” I said.

“The first thing is the gap between your earning and spending. Right now, you don't have a gap. You're spending exactly what you earn. It's impossible to save for the future or to catch up on your debt if you don't make more than you earn. So, to start, you two need to do whatever you can to increase this gap.”

I turned back to my notes on their budget. “You should trim your budget in whatever way you can. You don't have a lot to trim, but if there's anything you can cut, cut it. I know family is important to you, but maybe you can explain what that you're trying to get out of debt and need to take some time off from the visits. Or maybe make the visits shorter — a weekend instead of a week. And remember: You're not cutting these things forever. You're only cutting them until you get rid of your debt.”

Wally and Jodie nodded.

“Because you don't have a lot to cut from your budget,” I continued, “I think the best way for you to increase your gap is to find ways to earn more money. Right now, you're both working at two or three or four different restaurants. You only have a few hours per week at each place. None of the restaurants are that nice, so you don't make great tips. Honestly, I think this is where you should focus most of your attention.”

Wally sighed. “We've talked about that,” he said. “We'd love to earn more, but nothing ever seems to work out. One place says it's going to give us more hours, but it never does. Jodie will pick up a shift a nice restaurant across town, but then it's a logistical problem to get there. I get frustrated by how much time is involved with all of this.”

“That's a good point,” I said, “and I don't have a good solution. Actually, you know what I'd do if I were you? You're both great servers. You do good work. Your bosses like you, and so do your customers. If I were you, I wouldn't be looking for work at diners and cafes. In your spare time — which I know isn't much — you should be applying for work at upscale places. When you work at a nicer place, you don't do any more work, but you make a lot more money. Plus, you have the advantage of interacting with a different sort of clientele. If you build relationships with some of them, who knows where that could lead?”

When I was in college, I made money by waiting tables. I received several job offers from regular customers who were impressed by my work ethic. I suspect that if Wally and Jodie were in the right environment, they'd experience the same kind of thing.

“Another option is to pick up a few hours work doing something completely different,” I suggested. “Maybe Jodie could work in a women's clothing store. Maybe Wally could do yardwork or handyman stuff.”

“I think we get where you're going with this,” Jodie said. “We need to increase the gap between our earning and spending. Because we don't spend a lot, the best way to do this is to earn more money…somehow.”

“Yep,” I said. “That's the gist of it. That's the first thing I think you should focus on.”

Taking Baby Steps

“The second thing you should tackle is your debt. I know you both have things you want to save for long term, but I want you to put those dreams on hold for now. You can't save for your future until you pay off your past.

“My dad tells me I should save first before tackling the debt,” Jodie said. “He says I should build six months of savings before anything else. What do you think?”

“I disagree,” I said. “I think saving six months worth of expenses is a fine goal, and that's absolutely what you should aim for. But that's not where you should start. As you increase your gap between earning and spending — because remember everything depends on this gap — I think you should apply your money according to the Dave Ramsey plan. Here, I'll explain.”

I made a modified list of Dave Ramsey's “baby steps”:

  1. Build a basic emergency fund of roughly $1000 (while continuing to make minimum payments on debt). “My advice is to keep this fund in a brand-new bank account that isn't connected in any way to your other accounts,” I said. “You want to make this easy enough to access when you need it, but not so easy that you can just access the money on a whim.”
  2. Pay off all debt using some version of the debt snowball method. “When I was struggling, I couldn't figure out how to get out of debt,” I said. “Dave Ramsey's version of the debt snowball helped me. In your case, I'd use a slightly different version. Wally's car seems to be a huge psychological weight. You two need to prioritize that. After you've saved your emergency fund, throw as much money as you can at debt — with everything extra you can find going to that car.”
  3. Save an enhanced emergency fund equal to six months of normal expenses. “After you're out of debt, beef up your savings. I know you'll want to start saving for other goals right away, but don't. Take time to add some margin to your life. You'll be glad you did.”
  4. Pursue long-term financial goals, such as traveling, moving to Idaho, or buying a motorcycle. “You know what's awesome?” I said. “After you've taken time to pay off what you owe using the debt snowball, then you can immediately start building a wealth snowball. If you're paying $500 toward debt each month, then once that debt is gone you can immediately start saving $500 per month!”

“That all sounds great,” said Wally, “but to be honest, J.D., in some ways your advice is just like the other advice.”

“What do you mean?” I asked.

“Well, it's assuming that we're starting from zero. But we're not. We're starting with less than zero.”

“I have an idea,” said Jodie. “What if we added a step zero to the baby steps? We could call it ‘putting out the fires'. Before we save the basic emergency fund, we could throw every dollar toward catching up on the car payments.”

“I think that's fantastic,” I said. “In fact, I think that's really smart. If you can take some quick steps toward increasing your gap between earning and spending, then you should be able to get caught up on the car within a few months — if nothing goes awry. Then you can pursue the plan I've laid out.”

Wally nodded. “I think that makes sense,” he said.

Final Thoughts

After three hours on the back deck, I sent Wally and Jodie home with a handful of money books. I could tell their minds were bubbling with new ideas. (“Is gas for the car a Want or a Need?” Wally texted me yesterday afternoon. I love it!)

I know that Wally feels frustrated. He hates being over forty yet feeling like he's in the same place he was when he was twenty. I get it. But here's the thing: He has to adopt a beginner's mind. “Start where you are,” I wrote in January. “Don't fret about the past or how other people are doing.” Wally needs to accept that his situation is what it is — and work to improve from that point.

Knowing what I know about these two, I really do believe they're capable of starting where they are — starting with less than zero — and destroying their debt in a relatively short period of time.

It took me 37 months to get out of debt. (I started on 21 October 2004 and finished on 03 December 2007. That's a total of 1139 days to pay off $35,196 in debt.) Progress was slow at first, but accelerated rapidly toward the end of that period.

Wally and Jodie have exactly the same amount of debt as I did when I decided to become CFO of my own life. My challenge for them is this: Get out of debt quicker than I did. Do it in less than 1139 days.

If we count yesterday as Day One, then 29 September 2021 would be day 1138. Wally and Jodie, my hope for you is that together you can be debt free by that date — or sooner.

What advice do you have for Wally and Jodie? What can they do to improve their financial situation? Did you start your financial journey with less than zero? Have you ever fallen behind on payments? If so, how did you handle it? How did you caught up?

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S.G.
S.G.
2 years ago

I have some questions: How big is their place? What are the specifics on the car: make/model/mileage/etc? Does Jodie have a car? Do they have family support in Portland, or do they stay there because of personal ties? My first piece of advice would be the biggest and hardest to swallow: consider moving out of Portland. It is a high cost of living area. Find a city with good jobs that is cheaper to live. I don’t know if $950 is good rent for a very small apartment in Portland, but around here $950 would get you a modest 3… Read more »

S.G.
S.G.
2 years ago
Reply to  J.D. Roth

You say “rural Idaho”, but Idaho has a number of small cities.

Come up with cities you’re willing to move to based on COL and average wages, then figure out where the jobs are, and move once you have a place to work and work out the details backward from there.

Most people decide where they want to live and find a job, but if youre looking to get ahead find the job and go to it.

PawPrint
PawPrint
2 years ago
Reply to  S.G.

As someone living in an Idaho city, I advise doing lots of research before coming.Wages haven’t kept up with housing costs and Idaho is a right to work state. Be sure and look at those charts that show how much you need to make per hour to rent an apartment. Public transportation is next to non-existent. Moving to a lower COL area isn’t always the best idea in every case, IMO.

S.G.
S.G.
2 years ago
Reply to  PawPrint

Absolutely. COL can’t be the only consideration, but it can be very hard to get ahead in a HIGH COL area.

Thankfully there are plenty of tools from job boards to COL and wage calculators to old fashioned classified ads on the internet that can help with decision making.

Marek
Marek
2 years ago
Reply to  J.D. Roth

The mention of Wally’s kids is a real kicker for addressing this situation. I am making an assumption, but I would guess those kids are fairly young. If they are adults, then this comment doesn’t apply. If they already have a very good situation for the local market on rent and are appropriately sized, which at 500sqft there isn’t much room to go down. They should focus in other areas than decreasing their rent payment. The personal sacrifice of moving away from young kids both to them and the children would not be worth the minor financial gains. In addition,… Read more »

dh
dh
2 years ago
Reply to  S.G.

I agree with S.G. — get out of Portland, which has an insane COL. And it’s no secret that servers and bartenders can easily make 100K a year in Las Vegas, Nevada, a place with a relatively low cost of living. Yes, yes, it’s triple-digit HOT in Vegas for about 4 months out of the year, which is just as inclement and irritating as extreme cold. However, Portland ain’t no bed of roses with all the rain, cold, and cloudiness. Aside from the summer heat, Vegas has pretty much a perfect climate. The only places better climate-wise in the Continental… Read more »

S.G.
S.G.
2 years ago
Reply to  dh

You’re biased, lol.

Vegas for a server with good references is a good idea. UNLV is also strong in hospitality studies if they have any ambition to study reataurant management or something like that.

dh
dh
2 years ago
Reply to  S.G.

S.G, you tell me which cities have a better climate than San Diego, Abq, or Vegas, and I’ll tell you why you are mistaken! 😉 And let’s leave Hawaii out of the discussion for now, mkay?

S.G.
S.G.
2 years ago
Reply to  dh

Vegas is the 4th layer of hell in July. And it really depends on what you consider “a good climate”. If you are a big fan of rain ABQ is not the place for you.

dh
dh
2 years ago
Reply to  dh

And, of course, SoCal is cost-prohibitive for 99% of people. If you don’t like the idea of Vegas, then Albuquerque, New Mexico is a great alternative. You won’t make nearly as much in the server or bartender occupations as you would in Vegas, but you will find just about the cheapest place you can live in the US outside of a couple of cities in Texas like Lubbock and El Paso. And as a bonus, only San Diego and a few other cities in Cali arguably have better weather/scenery than Abq — at least as far as the Continental US… Read more »

Donna Freedman
Donna Freedman
2 years ago

Hey, boss: Can you tell Jodie and Wally about my offer? I will give a free PDF of the “Challenge Yourself to Save” chapter from my first book to anyone who asks. It contains almost three dozen examples of what I call “stealth saving” that can help build an EF, add to another money goal or even set aside money for retirement. All they have to do is e-mail me at SurvivingAndThriving (at) live (dot) com and ask for the chapter. In fact, all that *any* of your readers have to do is ask. No strings attached: no being put… Read more »

Connie
Connie
2 years ago
Reply to  J.D. Roth

Yes, please follow up on them in a few months. I am rooting for them! I hope they take the steps necessary to increase their income.

Kelly
Kelly
2 years ago
Reply to  Donna Freedman

Donna Freedman,
You were the first person I thought of to direct them to when I read this post. I became acquainted with your writing back in the MSN Money days and marveled at your gumption and dedication to pulling yourself out of debt. I sent your article, Living Poor, and Loving it to a couple of friends working towards becoming debt-free. Although I wasn’t in debt at the time, I used some of your tips/techniques to increase my saving rate and as a general refresher to reduce my spending.
Thanks!

Alex
Alex
2 years ago

Do they only have the one car? Seems a bit high, so they could possibly get a personal loan to cover the underwater portion of the value (2-3k?) plus a few thousand to buy something cheap. Sucks to eat the loan-value difference, but the reality is that they already have, just haven’t realized the loss. That would cut maybe $6k off their debt. Which isn’t a ton, so maybe not worth it… And/or bike 🙂 Also from the Dave Ramsey playbook, a zero-based budget to get the monthly budget in surplus, and then debt snowball. I think getting caught up… Read more »

Treo
Treo
2 years ago

On the income side of the house, it sounds like Uber or Lyft would be a great way to supplement income or possibly even replace it. Good drivers can make well over $3000/month after expenses and it’s a very flexible job. Would also put that likely newer vehicle to good use.

teinegurl
teinegurl
2 years ago

I think first thing is to get rid of that vehicle!!! They are behind , cant catch up and hurting their credit!! See if they can refiance car. if they have two cars downsize to 1 or get rid of all together and pay off $3000. Use public transportation for now. That will really free up the income they need and lessen debts right away. Second is quit the lowest paying job and use that time to look for a lucrative full time gig. Replace that with main gig with higher pay and then get a second gig that is… Read more »

The Debt Shrink
The Debt Shrink
2 years ago

I have known many people starting at less than zero yet they insist they need 2 bedrooms for 1 person or monthly massage memberships. How do you get through to people who want to get out of debt but aren’t willing to adjust their lifestyle?

D
D
2 years ago
Reply to  J.D. Roth

Me too. Higher end restuarants is a no brainer and could open other doors.

mike
mike
2 years ago

I spent yesterday in downtown LA. Now it’s only my perspective, but oh man, what a shithole. Looking at the sea of humanity and looking at a few that are giving themselves a chance of making their lives better.

I could give advice, but mine would not be followed. (Too strict.)

Sometimes life just gives you a shit sandwich. Either just live with it and try to make the best of it, or truly seek out radical change. (Understand if this comment is deleted.)

Treo
Treo
2 years ago
Reply to  mike

Ha, my every-day in San Francisco. I haven’t been to downtown LA, but I can’t imagine it being worse than SF.

That said, I think your comment is a bit off topic. The subjects of this post are trying to improve their conditions and aren’t homeless vagrants.

JanBo
JanBo
2 years ago

I am a huge advocate for writing down every penny. Every penny in, every penny out- for two months. There is lots of guessing here. Gift them a composition book. That is what I have used for 36 years. Computers are lovely, but the art of writing everything down is huge. It is huge as a couple as well, real accountability. I am confused by the food budget. Their main meal should be at work. It might be time for very, very simple at home. Eggs, beans, rice, popcorn diet comes to mind. $100 for two people is not bare… Read more »

Lindsay
Lindsay
2 years ago
Reply to  JanBo

I agree that $100/week for 2 people isn’t what I would call “bare bones.” We’re at $300/month for 2 adults, 1 child, and 1 baby (and this includes all the things we buy at the grocery store, not just food). I agree with J.D.’s approach to focusing on the income boosting, but I wonder if they could find a way to hack that food budget too. Beans and rice are a staple here, but with different mix-ins to change the flavors. It’s not so bad!

Lizzy
Lizzy
2 years ago
Reply to  JanBo

I agree with tracking expenses; it truly makes such a difference! I use an old school spiral bound notebook. Writing down every single expense really helps me stay accountable.

E.M.
E.M.
2 years ago

I’ve been following this site since before JD repurchased it (so glad you did), and I generally agree with your approach to finances. This is the first time I’ve ever felt compelled to comment on any blog. Since I am not privy to this couple’s expenses, it is difficult to advise where they can make adjustments. I do agree with other posters that there appears to be a lot of guessing going on – only until every penny is accounted for can one really properly assess the situation. This is best accomplished by keeping receipts and utilizing a spreadsheet. What… Read more »

Lizzy
Lizzy
2 years ago

One of them should get a full time position somewhere where they make an hourly rate, minimum wage in the Portland area is $12 an hour, which would net them the same as one of them is making now, that would still leave them time to wait tables for extra money on night/weekends to close the gap. Having a predictable income that you can budget with shouldn’t be overlooked when you are so far behind on your bills. They should also track their spending, every single penny, for the next month, it makes it much easier to see where the… Read more »

olga
olga
2 years ago

I believe the fact that JD mentioned Wally has kids in Portland should have been put into an article itself, then the advice of moving wherever is cheaper could be avoided. To the cuts on budget, even $25 a week from grocery should be easy to cut, especially since they both work in food industry (and can eat at work for sure, that’s the perk, after all). As far as car, hard call. The advice of selling and then taking up on payments of the $3,000 that is the difference on what they would owe…and they still need to get… Read more »

S.G.
S.G.
2 years ago
Reply to  olga

I disagree that it’s a non-starter. If the children are minors then I don’t think they should move, but if they are over 18 with lives of their own then moving out of Portland for a couple years should still be on the table.

JD also doesn’t mention if child support is a consideration. That can kill a budget, especially when you aren’t making much.

olga
olga
2 years ago
Reply to  S.G.

Good point. I made an assumption on age (40). But yes, once over 18, move is definitely in the cards, though then it’s all new game of finding new jobs and new place to live…
And great catch, I forgot to mention the child support was my question as well.

Joe
Joe
2 years ago

They have got to figure out how to make more income. $3,000/month is just barely enough to get by in Portland. Finding a better restaurant is a good first step. Do that first. At this point, they need to take baby steps.
Having one person get a regular job is a great idea too. Unemployment is low right now. They should get in the door while they can. You never know what the economy is going to be like next year.

Amy
Amy
2 years ago

Hey J.D. – If you are interested, can you ask Wally and Jodie if they’d be willing to get back together with you in 3-6 months time and give an update on this financial journey? I’d be entirely interested in hearing what they have decided to do after talking to you, reading the books you lent them and implementing the ideas they already have. I think a follow up would best case, give them a goal to work towards and highlight the spirit of this blog: do what works for you. I’d like to know what is working for them… Read more »

Susan
Susan
2 years ago

For any services they have, such as renters or car insurance, internet, gas/electric, cell phones, etc., have them get quotes from other providers. They might be able to cut expenses by finding better deals. Be persistent in asking for lower costs and mention that they would cancel the service and/or move to a competitor for a better deal. I do this annually when my internet provider raises my rates. Ended up paying $5 less monthly this round. Not a lot, but every drop in the bucket helps. Getting multiple quotes on my house insurance lead to a significant drop in… Read more »

Professor Kate
Professor Kate
2 years ago

Do Wally & Jodie have any thing they could sell? This is not a long-term strategy but it could bring in some money that they could throw at the car loan. They do need to increase their income. Most states have an unemployment office/Department of Employment & Training that have free resume writing and job counseling services. As to living in a high COLA, I live in the Boston area and I think Wally & Jodie are *lucky* to be paying only $950 a month for an apartment. Around here, you can’t find a cardboard box for under $1500 a… Read more »

Katelyn
Katelyn
2 years ago
Reply to  Professor Kate

One trick I used when I worked in fast food is to look at all spending in terms of the hours you’d have to work to pay for it (don’t consider tips, just base salary since that’s what’s predictable). I realize Wally and Jodie’s budget isn’t full of unnecessary purchases, but even looking at “necessities” in the frame of your hourly wage puts things into perspective. For instance, that monthly car payment is 25 hours of work at Portland’s $12 minimum wage. Is Wally getting 25 hours worth of value per month from the car? If I were in their… Read more »

Sue
Sue
2 years ago

No one has really mentioned any kind of assistance programs they might be qualified for. There are resources out there at every level, from Federal to the church up the street. We have a local community coalition that works with anyone, no questions asked. Food, gas cards, child care, school supplies for the kids, counseling, and even heating assistance (huge here in the NorthEast). They understand that sh*t happens, and sometimes you just need a little help to get you through the month. Once you get caught up, pay it forward and make a donation or volunteer.

Snazster
Snazster
2 years ago

To do it without declaring bankruptcy is going to take strategy, tactics, and sacrifice. Strategy: They need more income. 36k is not going to get them anywhere when they owe 35k. Get a job that pays more, even though it may involve moving to another city. It may take some time but get back to zero. Then they can move back, maybe even with enough credentials for better paying places. Sacrifice: Moving away from my kids is painful as hell. That’s the real sacrifice. Purely secondary to that, all the vacation time and a good deal of money may be… Read more »

KS
KS
2 years ago

Why are we still talking about server jobs? If you’re paying school loans, you should be able to get an office job making at least $15 an hour. The cost of living usually reflects on salaries. They should be able to find office jobs making decent money. As servers, they are making about $10 an hour on a good day. “Dress up” a resume and start looking for entry level. Seriously, entry level will pay more, be consistent, and include benefits. Looking to make more money in the same industry at the same position just be working more hours is… Read more »

Joe W.
Joe W.
2 years ago

If the car is relatively nice, TURO might be an option for them to make enough money to pay the monthly note payment (or more). It’s like AIRBNB for cars. They can rent it out to people visiting Portland for vacation. I choose to use it over rental car companies anytime I travel. It’s cheaper for me (~$35 per day for a small SUV), insurance is usually included, and I don’t have to deal with corporate rental car companies. Might be worth looking into if they can do without their car for a few days at a time. They can… Read more »

Ashley
Ashley
2 years ago

I was going to suggest they rent out their car as well. My BIL lives in Portland, and he rents out his car with Getaround (https://www.getaround.com/). He said he made $300/mo the first two months (which is how long he’d been doing it when I spoke with him).

Mdd
Mdd
2 years ago

Here’s some honest feedback if they are open to it… there is something really wrong with their careers and they are going to struggle until they fix that. I’ve worked for over a decade in food service and here’s the truth…if you show up on time and do a good job you’ll have more hours than you want. And if you live in a place like Portland with nice restaurants, it shouldn’t take long before you’re earning 70K to 120K from tips on expensive receipts. Restaurants are desperate for good help. So I recommend doing some serious self reflection about… Read more »

Sandi Kay
Sandi Kay
2 years ago

I agree that student loans mean college, which means they’re underemployed. Do they have a friend who can re-work their resumes? Getting an office job at $15/hr would rock their world. Next, if they decide to keep the car, they should check with insurance before trying Lyft or Uber. Groceries can be kept low by shopping only from the edges of the store – produce, dairy, meat. Prepared foods are much more expensive per serving. Move to cash for food shopping; you cannot spend what you do not have. Take the credit card out of your wallet. One big surprise… Read more »

Eric
Eric
2 years ago

I would like to second those previous commenters who have requested a follow-up article about Wally and Jodie in the coming months. Please keep us posted. I’d love to read about their successes (and, perhaps, challenges) as they work to improve their shared financial situations.

page
page
2 years ago

I’m surprised to hear about the lack of resources for folks starting at less than zero because that was the primary audience for Dave Ramsey for many years! He recommends getting current on all bills that are behind before starting on baby step 1 and saving $1,000 for a baby emergency fund (https://www.daveramsey.com/askdave/debt/get-current-first). And, he even walks people through how to prioritize when they are so far behind they don’t know where to start. Make a list of priorities, starting with the “4 walls” of food, utilities, shelter, transportation and basic clothing. Then, everything else gets listed below that. When… Read more »

David
David
1 month ago

I started reading GRS shortly before you paid off all of your debt. I was a regular reader for a few years, but have only occasionally checked in since you sold GRS. I was running through the archives and happened to read this article. I am curious how things are going for Wally and Jodie. “If we count yesterday as Day One, then 29 September 2021 would be day 1138. Wally and Jodie, my hope for you is that together you can be debt free by that date — or sooner.

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