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Maxed Out 2008-07-18 06:31:25

Maxed Out: 20-Something Newlyweds, $100,000 in Debt

Maxed Out is finally back with some new episodes, and it seems like the show will never run out of material. This episode is about Erin and Darryl, newly-wedded 20-somethings who have managed to dig themselves into over $100,000 in debt.

They have $16,500 in credit card debt, $25,000 in student loans, and owe their parents a whopping $60,000. At the rate they are going, it will take nine years and $39,000 in interest for them to become debt free. Find out how financial guru Alison Griffiths helps them figure out a plan when you

.

Erin and Darryl want to stand on their own two feet in their new life together but aren't able to with the huge amount they owe. Their first priority is paying off the family loans because it "comes with interest called guilt," and Alison scares them a bit by saying their "debt will poison their future." If they continue with the way they're currently managing their debt, they won't be able to start saving until early middle age.

Alison creates a penny pinching budget with the main goal of debt repayment. Her plan increases debt payments enough for them to be debt free in half that time and save $20,000 in interest. Instead of a nine-year plan, they'd be on a five-year plan if they follow Alison's advice. She also strongly recommends they sell their second vehicle and move to a cheaper apartment because their rent is about $250 more per month than they can afford.

A huge amount of debt like theirs is overwhelming, but they found themselves in "debt hell" because they avoided looking at the real numbers, and spent when they didn't have the money to spend. Erin and Darryl didn't even have an estimate for how much they spent on their wedding — the receipts were kept in a plastic bag but they never added up the amounts. The good news is they're on their way to becoming debt free and their money habits should be better for the rest of their lives.

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sfbutterfly24 sfbutterfly24 7 years
OMFG I have a lil bit of debt which is driving me crazy right now. I cannot imagine having that MUCH debt or buying so much to make that huge amount of debt. Also if you want a crazy expensive wedding why not save up for it for a while and then have the wedding because you are planning on spending the rest of your life together whats a year or tow wait for a "dream" wedding.
tlight tlight 7 years
I have pretty considerable student loans, and I live on my own.. so my world is pretty tightly budgeted. I am always looking at people who live these grand lives, and think "How can I get that?" But the reality is that most people my age don't have salaries that support the lifestyles they want. So they go into debt. I try hard to stick to what I Need, only indulging in what I Want when I have the funds available. But today's disposable world makes it seem like there will always be time to pay off any loan, but you need all the toys and a new house by 30 or you just aren't doing it right...
tlight tlight 7 years
I have pretty considerable student loans, and I live on my own.. so my world is pretty tightly budgeted. I am always looking at people who live these grand lives, and think "How can I get that?"But the reality is that most people my age don't have salaries that support the lifestyles they want. So they go into debt. I try hard to stick to what I Need, only indulging in what I Want when I have the funds available. But today's disposable world makes it seem like there will always be time to pay off any loan, but you need all the toys and a new house by 30 or you just aren't doing it right...
TidalWave TidalWave 7 years
I would think that Credit Card debt should be paid off first because it has the highest interest. Obviously their parents would be able to see how well they are doing with their debts and lighten up a bit. Then they can pay off family if they want - since all student loans are tax deductable.
graduatedsqueaks graduatedsqueaks 7 years
Wow. I'm kind of the opposite of this couple...I'm usually tracking my expenses down to the penny. And I definitely plan on shopping around for deals before planning a wedding. I wish them the best of luck, though...
RockAndRepublic RockAndRepublic 7 years
I imagine that they owe their parents because they just had to have a big wedding. I've no sympathy.
phatE phatE 7 years
shame on their parents for loaning them 60,000 dollars.. seriously, setting them up to fail..
brielleblonde brielleblonde 7 years
i have absolutely no repsect for people like that! i know so many people at college who are taking weekends to go to vegas and buying new car and flat screen tv's while making NO money and charging everything. People need to realize that they can't always keep up with the jones!
LadyAngel89 LadyAngel89 7 years
That's exactly why you DON'T make loans to family that you HAVE to get back. My family always said "only loan what you won't miss".
skigurl skigurl 7 years
my sister always says i have tons of debt: student loans and my car, but i dont see my car as being "debt"...i just have a monthly payment which is pretty normal
karisaamy karisaamy 7 years
I'm amazed that they would have no idea how much they were spending on their wedding - that's crazy
midtownmaryjane midtownmaryjane 7 years
I understand the student loan debt- in fact, my student loans are way worse than theirs, but luckily my parents help with that.I maybe even understand the $16K, considering they just had a huge wedding that they obviously over-spent on.But what I DON'T understand AT ALL is the $60K from their parents?!!One or both of them must have been borrowing from their parents for years and years to get to a number like that. It's a little irresponsible of their parents to continue lending them money and never teaching them to live within their means. If they want to help by giving an incredibly generous donation, that's one thing...but to do a "favor" by lending money like that and then holding it over their heads when they know there's no way to they can afford to pay it back... I don't know, it just seems crazy!
midtownmaryjane midtownmaryjane 7 years
I understand the student loan debt- in fact, my student loans are way worse than theirs, but luckily my parents help with that. I maybe even understand the $16K, considering they just had a huge wedding that they obviously over-spent on. But what I DON'T understand AT ALL is the $60K from their parents?!! One or both of them must have been borrowing from their parents for years and years to get to a number like that. It's a little irresponsible of their parents to continue lending them money and never teaching them to live within their means. If they want to help by giving an incredibly generous donation, that's one thing...but to do a "favor" by lending money like that and then holding it over their heads when they know there's no way to they can afford to pay it back... I don't know, it just seems crazy!
bigestivediscuit bigestivediscuit 7 years
I don't know what kind of dream/fantasy-land people like this couple live in where you think you can spend money that YOU DO NOT have and not face any consequences. What did you think would happen??? Were they banking on (no pun intended) winning the lottery??
CaterpillarGirl CaterpillarGirl 7 years
16.5 in credit card debt? On what?
Martini-Rossi Martini-Rossi 7 years
insane! You dont HAVE to have a big wedding. Geez, ppl need to get their priorities straight.
bellaressa bellaressa 7 years
I am a little stunned - I am glad that they are trying to get out but the amount seems crazy. I understand student loan debt - I look at that myself as good debt and it helped me accomplish my education and will provide me a better way of life (even if I don't see it yet). I think the credit card debt is just wow, that is unbelievable and I bet they have nothing to at least show for it. I wish them well – that is a lot of debt to crawl from underneath. That is just scary to me. $60,000 to their parents, their parents were good to loan them the money but why so much?
j2e1n9 j2e1n9 7 years
Wow I would pay off my debt to my parents LAST but I guess I must not have parents like theirs.
ur_momm ur_momm 7 years
I guess it helps that i live in Canada and schooling is much cheaper but I am 24 and completely debt free, i pay off my credit card at the end of every month. And that credit card only had a limit of 500$ up until a few months ago when i wanted to buy a new laptop, and even that i paid off at the end of the month when i got a work profit sharing bonus.I grew up not having a lot of money so I just wont let myself live like my parents did, they never even owned their house.
ur_momm ur_momm 7 years
I guess it helps that i live in Canada and schooling is much cheaper but I am 24 and completely debt free, i pay off my credit card at the end of every month. And that credit card only had a limit of 500$ up until a few months ago when i wanted to buy a new laptop, and even that i paid off at the end of the month when i got a work profit sharing bonus. I grew up not having a lot of money so I just wont let myself live like my parents did, they never even owned their house.
cmd0610 cmd0610 7 years
That is nuts! How irresponsible and immature . . . I understand student loan or medical debt because those are either things you can't control or student loans are important for education- but credit debt!?!?!?!? I just don't understand why parents don't teach their children good financial habits and then why young people don't take the initiative to learn that on their own! And stop spending and living above your means people! Bad credit is seriously my worst fear- and that keeps me in line :)
Lovely_1 Lovely_1 7 years
wow. that's insane. I am 21 and only have a SMALL amount owing on my MC.My bf and I just bought a house too, but I try not to think as it as debt because it is a great investment.
Lovely_1 Lovely_1 7 years
wow. that's insane. I am 21 and only have a SMALL amount owing on my MC. My bf and I just bought a house too, but I try not to think as it as debt because it is a great investment.
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