Taking Daily Paycheck Advances Just To Survive

Brought to you by the EveryDollar app. Start budgeting for free today. Me and my husband, we're about $120,000 in debt. We're 28 and about to be 29. I'm finishing college, so that's a lot of student loans, some in collections, a car. And right now we make enough money on paper, but we're stuck in this daily pay cycle that our job offers where we're able to cash out our earnings every day. And so it's really detracting from our paychecks and we're just stuck in this vicious cycle. Every day? Every day. Oh, wow. Yes. Do you get charged a fee or anything or is it just that's how you're getting paid? It's like $1.99 or $2.99 every time you can cash out. You can cash out up to twice a day. What do you guys do for a living? So we work for the same company. My husband works from home in a different department. And then I, basically customer service. And then I work in the back office, in office. What do you guys work? Or I'm sorry, what do you guys earn collectively? $85,000 to $95,000. He's on 32 to 40 hour flex weeks. So it can range between that $85,000 to $95,000 altogether. Do you guys have kids? I'm making $40,000. We have one two-year-old daughter. Two-year-old. Okay. And what are you going back to school for? I'm in school for psychology and I plan on getting my master's degree. Okay. Do you know how you're going to pay for that? As of right now, no. We might stop and pause school to cash flow once we get into a better spot. But right now we've been taking out loans. How much longer do you have till you graduate? I have one semester left until I'm done with my bachelor's degree. And how much of the 120 is student loans? About $50,000. It'll be $60,000 after everything. How much do you guys own the car? $24,000. Okay. And what's in collections right now? Is it credit cards? A couple of personal loans and some credit cards. What does that add up to? About $50,000. And those are all in collections? Yeah, about $40,000 in collections. Most of it's on my husband's side because he had some larger credit cards and he had the larger personal loan. And then we have about $8,000 of active credit cards. We just decided that we were going to stop using them altogether. Good. How long have those bills been in collections? How long has it been sitting there? Summer gets busy fast. Between vacations, camps, and travel plans, the last thing you need is another thing to manage. That is why I love Delete Me. Delete Me removes your personal information from hundreds of data broker sites that can leave you vulnerable to spammers and scammers, and they keep monitoring it all year long. And honestly, it feels good knowing that someone is handling it for me. And you can get 20% off an annual plan at joindeleteme.com slash Ramsey. That's joindeleteme.com slash Ramsey. How long has it been sitting there? A couple years now. The good news on that is we should be able to settle that and make some deals on that for significantly cheaper than the $50,000. And that would be something that I would make it probably my full-time job. I'd start with the smallest one, kind of snowball it. And whenever you guys can pile up some money, I try to settle it for maybe a quarter on the dollar and do it that way. I just want to go back. I want to make sure I understood you. I thought I heard you say you make $90,000. Then I thought you said I heard you say plus 40. Did I hear that? Or it's $90,000 total? No. It's about 40 to each of us. 40 to each of you. Got it. Okay. He makes a little bit more than me, but he makes less hours. And I have the ability for overtime. Once you get the degree and you have one semester left, what's your income going to go up to? Hopefully, for me alone, somewhere in the $90,000 to $100,000 range. Once I have my master's. Just with this degree, nothing? Because I don't think it adds value to your current job, right? No, not really. I can become like a case manager, something like that, for about what I'm making now. Okay. All right. So the degree is a little bit of a wash, and we're not going to go deeper in debt to get the master's to hopefully make then $100,000. Yeah. Got you. So the number one goal would be to get you guys your head above water, just in your current day-to-day bills, so you're not having to have this daily pay. This paycheck deal. Yes. Yeah, yeah, yeah. I want you on a rhythm. And so what this usually means is you kind of have to shock the system, which is going to mean working weekends, working nights somewhere. It's going to probably take, I would think, a good 60 days of another job, Linnea, to get some cash flow in so that you guys have enough in your account that you don't have to be waiting on that next paycheck, if that makes sense, that there's enough in there to pay what you guys need for the next one. I did something stupid too. I cashed out my 401k. There wasn't much in it. It was $1,600 before taxes. So I have that on the way to just give us a buffer of something so that we can get out of this cycle. And that was the only reason why I did it. Do you know, let's pretend today that you were current and you weren't behind on anything. Do you know what the amount of money that you bring in every month are in your minimum payments? Are you in the red or are you in the green? No, we make enough money on paper. Yeah. Okay. So when you do your every dollar budget and you plug in, you know, the 90,000, how much is that per month for you guys? So it's about, I think after everything, they give us a surplus of like... No, no, no. Just the amount of your paychecks. Like 6,000-ish probably hits your account, would you say? Should be. I make 20 or 1,200 per check. I get paid bi-weekly and then he gets paid around 900. Okay. And nobody's investing, right? No. Okay. So here's what I would say. Do the budget and do it with, I want to know exactly what that margin is going to be. And then the other number I want to know is exactly how much you are behind on today. Like what's the deficit for this month? Right now we're in August. So, and we're not even midway through yet. So are you already operating at a deficit or tell me how this current month looks? Well, when I did the EveryDollar budget, it said that we have about $400 extra at the end of the month, but I think it's more of a timing issue. We have heavier bills in the second half of the month. Okay. Good to know. So let's do this. On EveryDollar, there's a paycheck planning feature because what you're highlighting, Linnea, is really important. It's the first step to budgeting is deciding how much we're going to spend, right? And assigning the line items. But the second part of budgeting that a lot of people miss is now we have to decide when we can spend it. And sometimes it's as simple, Linnea, as calling in and saying, my mortgage is due on the first. It might be easier if it's due on the 15th. And you can call in and make those changes. A lot of times there's flexibility as long as you're paying it that month, right? And moving things around so that you know, when I get the first check on the 30th, that's when I pay bills one through three. And then on the 15th check, that's when I pay the majority of the other bills, right? I pay the three biggest ones with the first check and then I pay all the little ankle biters with the second check. And so it's a little bit of a puzzle sometimes to figure out what bills you can pay with what check. But let that be your homework tonight because I actually think that that's the solution here is knowing, okay, when I get paid that first check on the 30th, even though my entire grocery budget might be $600, but I can only spend $250 of that grocery budget on the first check. And then when the second check comes, now I can spend the other 600. You see what I'm saying? And so that's the puzzle that you guys need to sit down and figure out. Cause I think you're right. There is enough money there at least to hit the minimums. And then when you get on that rhythm, like Rachel said, now we can feel really confident about taking the $400 in margin and chucking it away at, you know, whatever credit card or the smallest debt is. Linnea, do you know what you could sell your car for? Carvana says $19,000. That was my second part of my question is I'm having a hard time convincing my husband to let go of it. We just got it in January. It's the 2024 and he's really attached to it. Yeah. Well, I think if you guys can sell this, if you guys can do, if you guys can sell that, maybe get $12,000 for the collections and you start doing it, I think in three and a half years, your life looks different. Create your free every dollar budget today. 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