How did it come to this? $58,000.00 of credit card debt!

Posted: July 4, 2008 in Blogging, blogroll, Budget, Family, Finance For Youth, Jobs, Life, Relationships, Saving, Spending, Working

Last week, a guy came to my office and asked if I was the Wil Stanton that taught Personal Finance.  He had a problem that he needed help with, and he didn’t know where else to turn.  He and his wife have a mountain of debt, and they are afraid that they can’t get out of it.

As is standard in these circumstances, I asked him to bring in copies of all of his bills, along with copies of all of his income for a month.  In order to find out how bad things are, I have to be able to see the entire picture.  What he showed me was 19 credit card and unsecured loan statements where the MINIMUM PAYMENT on each added to over $7,000.00!  I noticed that he only brought in credit card statements, and not rent, utilities, or anything else.  That’s when he told me that he and his brother-in-law had bought a house together and his portion of housing expenses were another $4,000.00.

He only makes $3,000.00 a month…, his wife doesn’t work because she is caring for their one-year old son…, and he is only 32 years old!

I’m not going to go into the details of the plan we are working on, but I will tell you that there is no good answer for him.  He is really screwed here, and all of the ways out will keep him screwed for a long time.  What is important to note is that he is just now learning some of the basics that young people need to have drilled into them if they are to avoid this same situation:

  1. Keep track of your spending
  2. Try to avoid wasteful spending
  3. Communicate openly with your spouse, family, or other people who might be able to help when you are in a bind
  4. It doesn’t matter how bad you think things are, there is always a way out as long as you keep following the principals of personal finance that Finance For Youth teaches.

I’ll try to keep you updated on my new friend, but I don’t know that he is going to be able to remain strong enough to keep doing what I told him was the first steps to financial recovery.

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Comments
  1. ysdata says:

    Here is a suite of FREE financial tools to help young people stay out a financial debt. The first tool “CashTrackerPro Access” help with tracking your spending. The second tool “CashTrackerPro Excel” creates a personal savings plan, even if you’re in debt.

    Both programs can be downloaded from http://www.ysdata.com/cashtrackerpro

  2. […] have a mountain of debt, and they are afraid that they can’t get out […]https://finance4youth.wordpress.com/2008/07… Share and Enjoy: These icons link to social bookmarking sites where readers can share and […]

  3. devil says:

    It’s really scary how predatory lending practices have taken advantage of compulsive spenders. For all intents and purposes, this guy’s life is over. Hopefully, he won’t have any more children because he can’t even afford the one he already has.

    There are lots of people swimming in debt these days who will NEVER escape unless they get some psychological help for their spending addiction. All the tips and techniques in the world won’t help them till they get their mental problems fixed.

  4. […] have a mountain of debt, and they are afraid that they can’t get out […]https://finance4youth.wordpress.com/2008/07… Share and Enjoy: These icons link to social bookmarking sites where readers can share and […]

  5. […] Haseda wrote an interesting post today onHere’s a quick excerptLast week, a guy came to my office and asked if I was the Wil Stanton that taught Personal Finance.  He had a problem that he needed help with, and he didn’t know where else to turn.  He and his wife have a mountain of debt, and they are afraid that they can’t get out […] […]

  6. dreamdrivenent says:

    Wow… I wish you guys the best in working out the kinks of financial setback. My best goes out to that guy. Keep us posted.

  7. Wil says:

    @ysdata

    I think that anytime someone can provide tools to help those who are in trouble get out, or help others avoid getting in is a good thing. I noticed that one of your tools requires Access. I know very few people, and almost no young people, who have Access or can work it well. Do you have tools for other platforms as well?

    @devil

    True, sometimes the problem is predatory lending, and sometimes the problems are psychological, but I like to think that most of the time the problem is due to a lack of education. I’m not really a blame the system guy, but when the system so blatantly fails us, who else is there to blame?

    I think it is a little overly dramatic to think this guy’s life is over. True, none of the choices are particularly good ones, but he is still young, and with the proper training and dedication, he will be fine. Having kids can really make one grow up (which is why I haven’t done so yet), so maybe having a kid will help give him the dedication to succeed.

    @dreamdrivenent

    Thanks for the good wishes. I hope he works out as well.

    To all– thank you for reading and for the comments!. Stay tuned, and I will definitely be keeping everyone updated on his progress.

  8. […] (like a house), or start a business.  If used incorrectly, it can affect you for years, like THIS guy.  Like any other tool, its effectiveness depends entirely on the person wielding […]

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