"I do something I want even if I know I don't have the money. I don't see why I shouldn't buy a sweater or go out with friends." That's 23-year old Crystal talking, and she and her 25-year old husband Jeremy are $25,000 in debt. This episode of Maxed Out is about this young married couple who is living on one income: Jeremy makes about $40,000 a year and Crystal stays at home with their one-year old son. They are carrying way too much debt for how much income is brought in, and their cash flow could never support their future plans for Crystal to continue staying at home. Find out more about their finances when you read more.
Besides having a new family, Crystal and Jeremy have a new house with a new mortgage. They financed their $10,000 down payment with credit cards and bought the house because Crystal got pregnant and they figured it would be easier to buy before the baby came into the picture. They have three maxed-out credit cards and are basically paying interest only every month, so their debts just keep rising. Financial guru Allison Griffiths says that if they don't get things under control immediately, they are in danger of defaulting on their credit cards and mortgage.
Even after Allison breaks the news that they are spending a monthly average of $1,140 in department stores, Crystal accuses her of exaggerating their financial situation. They succumb to Allison's advice to cut down spending by at least $400 a month and track every penny. Allison says one of them needs to make more money and bring in an additional $1,500 to $2,000 every month in order for them to get ahead. Crystal doesn't think a 9-5 job would be worth it because of daycare costs and decides to pursue a new career as a personal trainer. At the end of the episode, the couple is spending less than they used to and Crystal is taking classes to hopefully become a personal trainer.