I'm 64 and Can't Pay Off My Debt

Brought to you by the EveryDollar app. Start budgeting for free today. My question is about debt relief in a low-income situation. What's your income? I get social security disability. I've been, I'm 64, and I have been getting social security disability for two years. Which is how much? $2,700. Oh, $2,700 a month. Okay. What's the nature of the disability? A year. $27,000 a year. Oh, $27,000 per year. Okay. Right. And that includes a small pension. Okay. And so you're making $2,500, $2,300 a month. Okay. And how much is your rent? It's about $1,700 a year, a month rather. And I live in New England, so it's just, the rent up here is crazy. Crazy. I don't care. I don't know how that math works. $2,300 minus $1,700 equals Sally doesn't have food. Right. So I have about $80,000 in between an IRA and an equity account. And I keep drawing off of that to make ends meet. What's the nature of your disability? It's been everything, physical, a lot of physical stuff, heart problems, mental disability, depression. I mean, I'm being honest. What keeps you in New England? I have one adult daughter who lives in the New England area. Okay. Do you have other family anywhere in the country? I'm sorry, what? Do you have other family anywhere in the country? I do. I mean, my ex-husband is nearby and he's been very helpful. But my question is, I have this $9,000 credit card debt, which I mean, I pay quite basically. Is there any way, what kind of credit card relief is there? There's not any. You borrowed money on a credit card and the only credit card relief there is, is if you file bankruptcy, which you're certainly not going to do on $9,000. There's no magic pill that says you're disabled, so they forgive the credit card debt. That doesn't, there's no such thing. I also don't think that that's the biggest concern. That's not your core issue. The core issue is, is you're draining down the savings. What are you going to do when the savings is gone? Yeah. I am. And that's why I'm trying to hang on to that. How much are you pulling off of that? I'm doing as little as I can. Yeah, but that doesn't matter. You make $2,300 and your rent is $1,700. Those numbers don't last. How much are you pulling off of that $80,000 every month, Sally? How much are you taking out of your savings every month, Sally? Well, a year, I try to keep it between $4,000 and $6,000 a year. But last year, I had to have my transmission replaced and that was $8,000 for that. And that was cheaper than buying another car. Okay. So here's what I want you to figure out. And this is not going to be easy. Okay. But there's three or four levers to pull. And everyone, everything I'm going to tell you is going to be hard, but they're not going to be as hard as the plan you're on because the plan you're on, you're going to run out of money and you're going to have a problem. That's my fear. Yeah, I know. I know. I'm not trying to scare you. I'm just saying the plan you're on sucks. We need a new plan, but the other plans aren't going to be without pain. Okay. So plan number part, there's three or four things that you need to do somewhat of all of them. Okay. I want you to come up with some kind of a self-employed idea that you can do with the limitations that you have to create some income. That's thing number one, just write that down. I don't care what it is. And I don't, as long as it makes you smile and makes you a thousand dollars or more a month. Okay. The second thing is you've got to move. You cannot afford a $1,700 rent period. And we need to, the third thing is we're doing those two things. So we create a monthly budget that is sustainable, meaning it will last. Okay. And so if you had $3,500 coming in because you had a little bit of side income and if you had no payments, and if you had a rent that was half of what you have now, you can do that without touching your savings. And that is sustainable. That will last. But the numbers you're giving me won't last. And you know that that's why you called and it's terrifying. I'm sorry you're there. But if you don't act on it, it's going to get more terrifying. And so we've got to do those three things. We have to create a sustainable situation that the income minus the rent minus living expenses doesn't need savings to be used. Then number two, we're going to do that by getting affordable rent. And we're going to do that by getting, it may mean moving to another area of the country. I don't know, but $850 rent is available out there in America somewhere. Okay. It might not be in Hartford. I don't know Hartford that well, it's an expensive little town and Connecticut is a highly taxed state. So it's very possible. I don't know. But, um, the, uh, uh, but, but I want you to think in those terms, we have to get rent and income added to this equation, better rent price, better income added to this equation. So we don't have to touch this savings and then you're okay. You're going to be fine. Then you can write a check out of the 80,000 and pay off the stupid credit card and cut it up. And it goes away. That's number four is when you've created a sustainable situation. But today I would tell you just pay off the credit card. But if you stay in this situation with this income and this rent, you're still going to burn up your savings. The credit card is not your problem. Your problem is your income versus your life. The way your life is set up now. Yeah, that's right. Yeah. It's scary. A thousand dollars would change your world. We're scared with you. We want you to win. And what I'm telling you to do to move to an 850, that's painful. What I'm telling you to do to get a, to come up with some kind of side hustle where you babysit dogs or you do whatever you iron people's shirts, or I don't care what you do, whatever it is, you're going to do for a thousand bucks a month. Okay. It doesn't take a lot. That's not a lot, but neither one of those things are easy. They're painful things that I'm asking you to do for you. But, um, you know, you, you've got to, uh, if you don't address this, it's going to unravel on you. Absolutely. Yeah. That money's going to run out. Um, yeah, this is going to be a major move out of the comfort zone major. And, you know, I think the other thing is I, um, I, I sense that you don't have a large, um, strong community group friends. And so I want you to search out a good local church there in Hartford. And I want you to sit in the pastor's office and introduce yourself to them and tell them your story and ask them to help you plug in with some of the other ladies there in the church, not so they give you money, but so you get some people that hear your story and that you are seen and you feel good and you feel whole connection, connectivity to community. When you're, especially when you're battling something that that's having to do things that are uncomfortable is necessary. Well, and there's opportunity there. The more people you're around, people get to talking and somebody says this and it sparks an idea and you go, oh, I could go do that. Right. Like all of my major opportunities. And live in our guest house and babysit our dogs. Yeah. And you do that for 600 bucks. But we didn't introduce ourselves trying to get something from them. It just happens. But those things happen when you're in community. Yeah. And people know your need and they know you and they know you're trustworthy. Your transmission goes out. Oh, I know a guy who can fix that. Or, you know, my uncle. Instead of 8,000, it's 4,000. That's right. Yeah. So I want you, that's number four. I want you to search out a good local church and sit down, have a meeting with the pastor. Again, not to ask for things, except to connect me into community. I need more friends. I need more connection. And connection is valuable. Create your free every dollar budget today. The simplest way to budget for your life.