I'm Drowning In Debt And Living In My Car

Brought to you by the EveryDollar app. Start budgeting for free today. I am in a position where I don't have to pay any household costs as far as rent goes and I'm just wondering if I should use my income in this time that I have living rent-free to use this time to build my business or use this time to get another job and pay off debt as fast as possible. How much debt do you have? About $108,000. What does that consist of? Student loans, stuff in collections, and a tax bill. Okay, where are you living? How are you living without rent? So I converted my SUV into a tiny camper and I've been living out of my vehicle to expedite this process. And in the process, when you start working on your debt, everything starts coming into full swing. And the next thing you know, I'm getting garnished. My wages are getting garnished. So now I'm thinking maybe I should just put building the business on hold and get another job. But also, I don't have any rent to pay. So it's kind of like, which road do I take? Who's garnishing your wages? The state for taxes. For a business that you own? No, it's not for a business. So it's like income tax. Now, how much in tax do you owe the state? I owe about $20,000 for state and about $12,000 for federal. Okay, and the state is who's garnishing, the federal is not? That's correct. And what do you make at your current job? About $83,000 a year. And that's being garnished? Yes. Okay, so how quick can you come up with $20,000 making $83,000 and living in your car? Pretty quick. Yeah. I mean, like quickly and get rid of the garnishment by paying it off. The thing is, I've been attacking my car loan debt. No, no, no, no, no, no, no, no. You need to take care of the tax debt. And when you're doing your debt snowball, you put IRS and income tax with the state at the top of the list because of what you're experiencing. And so we're going to, we're going to get rid of the state debt as soon as possible. So $83,000, so $7,000 a month. So you're coming home with five or $6,000 a month and you've got very little. I'm coming. I'm down to like about $3,500 because of the garnishment. Yeah. How much are they taking? The smartest way to deal with car trouble is before it becomes car trouble. That's why I want to tell you about Christian Brothers Automotive. They give you honest recommendations and the information you need to make wise decisions about maintaining your vehicles. That helps you stay ahead of expensive repairs. Schedule your service today and get 10% off your visit at cbac.com slash Ramsey. 10% off up to a $250 value. See store for details. How much are they taking? Um, it's about $276. $276? A week. Oh, okay. $1,000 a month. Well, in 20 months, that'll be gone if you don't do anything, but we need to do something and get rid of it as soon as possible. So the question is, do I work a side job or a side business? The question is, do I work a side job or continue letting them garnish me, continue paying off my car and then use this time to start my business as well? No, you don't start a business right now. No, you need to work as many hours as you can work, getting paid money quickly, as much money as you can make morally. And you start with this tax debt and clear it first before you clear the car. And then you clear, um, the, uh, then you clear the IRS and then you work your debt snowball from there. And when you get, um, back on your feet financially, and you've got the IRS and the state off of you, and then you get a place to live. Yeah. You've been, you were very, um, nonchalant about the fact that you're living in your car, but I don't, but I don't want you there for long. No. Yeah. It's not a, it's not a long-term plan. I definitely plan on, um, saving for down payment for a house. No, no, no, no, no. You need to go rent one bedroom cheap apartment. I'll rent, I'll rent after my car. Yeah. And I would want to be out of the, I mean, I would want you out of that situation in a couple of months. Like if you can go get, we don't need to go into Minneapolis in the winter. Right. You need in the, in the back of the SUV. So I want you to clear this data as soon as possible, working extra and throw three, four or $5,000 a month. Cause all you do is work at this, um, at the state debt. And, uh, then, then go after the IRS and then get you and somewhere in there, get you an apartment and get out of the car. And, um, yeah, cause you're making $83,000 a year. You can live in an apartment and you can clear this debt and work side jobs. Well, and you have 3,500 left. So if you threw an extra 2000 lived on 1500 with food and the car payment, right. Um, and then worked extra, you could technically put 5,000. Yep. Away per month. Yeah. And that'd be four months you'd be done. Yep. That's the direction. I'm sorry, Nisi. Oh, wow. You're after it, kiddo. Get after it. I love it. I appreciate your willingness to, um, sacrifice like this, but let's have a plan. So we, that this is, um, definitely in our, in our past, not in our present anymore. Create your free every dollar budget today. The simplest way to budget for your life.