Big Debt, No Savings

Dave thinks Diane never met a debt she didn't like! Hopefully she's finally learned her lesson and can attack her problem with debt.

QUESTION: Diane bought a house that was too expensive and then added onto it, and it led them to bankruptcy. They have $60,000 in debt, a $1,450 mortgage payment and no retirement savings. They make $80,000 a year, though it’s irregular income. Dave walks her step by step on what it takes to win.

ANSWER: You guys never met a debt you didn’t like. The bad news is you’re in a mess, but hopefully you’ve learned your lesson. You have time to save up for retirement, but you have to get going. You need a cheaper rent than $1,450 a month. Then sell the car and attack the rest of your debt. I’ve been where you are and it’s not fun. Make an irregular income budget sheet, which is kind of like a wish list. Prioritize what you spend, and then as you make more, you can go further down your wish list.