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Maxed Out 2008-03-31 09:53:13

Maxed Out: Unplanned Parenthood

This episode of Maxed Out is about Wade and Chastity, a couple who's had a very big year: they were married, bought a house, and unexpectedly had a baby. Chastity is on maternity leave and earning just a third of her full-time salary, and between an expensive newborn and reduced household salary their debt continues to grow each month. They took out a $40,000 loan to pay for their big wedding and not including their mortgage their total debt is $68,000.

Financial guru Allison Griffiths calculates that by the time Chastity goes back to work in 10 months, they'll acquire an additional $27,000 in debt, which would put them close to $100,000 in the red. Also, it's impossible for Chastity to be a stay-at-home mom like she'd like to because of their overwhelming debt. To see how Allison helps the couple get out of debt just

92 percent of Chastity and Wade's income is going toward debt repayment and housing expenses each month. Their lifestyle and fixed costs would be supportable on their previous combined income but not with Chastity's reduced income, so in order to keep their house major overhaul needs to happen with their money habits. The biggest expense Allison tells them to rid themselves of is a leased second car — Wade's car is paid off but Chastity is paying about $700 on her monthly lease.

The optimal situation would be for someone else to take over the lease, but it's usually difficult to find someone to enter that type of agreement. Allison says that even though walking away from the lease will trash Chastity's credit score, she has to get rid of the expense and her credit score is already heading in that direction. Aside from the car payments, Chastity starts working from home four days a week to bring in a substantial amount of income, and they make smaller changes like eating in more and using grocery coupons.

At the end of the episode, it seems that Chastity and Wade are on their way to being successfully debt free, and Chastity will be able to stay at home with her new baby. The biggest lesson I took away from this episode was that no matter how substantial your income, it's important to live within your means and be able to adapt to any surprises. The couple was making $150,000 before Chastity went on maternity leave, but because they took out a large loan for their wedding and had a big credit card balance, they were completely overwhelmed when the baby came along.

Join The Conversation
AnnaLove AnnaLove 8 years
I want to know what she drives for $700/ mo.?! I mean a lease is supposed to be a way to live beyond your means anyway, at least pay less than a payment.... I have a lease on an 07 Passat that we pay $300 for and the car is pretty luxury, I just can't fathom $700 for a lease, it's blowing my mind
CaterpillarGirl CaterpillarGirl 9 years
40,000 for a wedding? 700 bucks for a car seriously? I dont feel sorry for them at all.
lickety-split lickety-split 9 years
you should post this loink in idosugar. dream wedding; nightmare debt. she could have stayed home with her baby AND kept her car if they had had a wedding w/o going into debt. life happens, plan ahead :)
Renees3 Renees3 9 years
I agree that some thins are lavish, but really before they had the baby, $40K loan for the wedding wasn't putting them under, so it's not that outstanding. The $700 car thing is pretty crazy, I have not great credit, but I pay $300 on a 5 year loan for a camry. I can't imagine having $700/mo payments! Yikes. But I'm glad they worked it out so that she could stay home. That's awesome
angelfromlsu angelfromlsu 9 years
@ $700/mo she could have easily paid off a decent Toyota in a few months
Asia84 Asia84 9 years
my father has money stashed for my wedding, and even if he didn't have the money, i would want to pay things outright instead of getting a loan. but i've heard of people taking out loans for a wedding, so don't front. you're still suppose to have a save-a-ho-fund for when things get rough. and there is this thing called birth-control. people should try it. she probably had bad credit because her car note was $700. it seems like there was no contingency plan. so now they have debt. if you're gonna live large, you gotta plan.
angelfromlsu angelfromlsu 9 years
I've decided to not wait years after engagement to get married. Most couples way so long to save up for this one day. I'm having a gorgeous french quarter ceremony in New Orleans and have tons of money left over to save for retirement.
angelfromlsu angelfromlsu 9 years
If you aren't a movie star...don't have a movie star wedding!
carhornsinapril carhornsinapril 9 years
yikes, taking out $40k for a wedding on loan... that's why i'm engaged but not getting married for 3 years (and staying far away from that crazy budget... $40k was a year of NYU for me!).
bellaressa bellaressa 9 years
I was checking my account on-line and my bank offers personal loans, pesky pop up windows. One of the options is a personal wedding loan, omg, people actually take these loans and put themselves in debt. I am just shocked. Only b/c it's available does not mean you should take it.
Kelly-O Kelly-O 9 years
I just can't fathom borrowing $40,000 for a wedding. I know lots of people do it, and it's all about the drama of the one day, but I'm glad we decided to just invest in our family instead of a show. Like Rosa said, this couple had 8-9 months to prepare for the baby being born, and I cannot believe they did not sit down at some point and look at their income and spending and realize they might be headed for trouble. I don't have a stellar financial situation right now, but I'm just glad my husband and I are cognizant of it and working together to improve our situation.
cvandoorn cvandoorn 9 years
Maybe she has to pay that much for her lease because her credit sucks and she got a bad rate...or its for the lease and car insurance combined. But $40,000 for their wedding??? I know its supposed to be a special day and all, but if you don't have the money, then don't spend it!!
ggfan ggfan 9 years
I watched this episode and I'm pretty sure they said she had a pontiac, not like a bmw or mercedes. So that is crazy to spend on a pontiac.
Liss1 Liss1 9 years
If you make $150,000 a year how do you get that in debt? I make like a third of that and am not in any where near that much debt. What kind of car does she have for $700 a month? that is ridiculous.
princessjaslew princessjaslew 9 years
i guess they just didn't expect a baby to be that expensive!
mlen mlen 9 years
700 bucks a month on a car lease? i pay half that on a car payment and that is still expensive! clearly they were living a lifestyle they could not afford!
TidalWave TidalWave 9 years
I do not need to go into debt over one little day. Seriously, they are suffering how many days just because of their "joyous" wedding day?
bellaressa bellaressa 9 years
Ohh my, who takes out loans for the wedding?
Angelica Angelica 9 years
Yikes. What a pickle!
Shopaholichunny Shopaholichunny 9 years
Dang. Rosa is right. They should have started saving for the baby when they found out she was pregnant. I don't know how people could live like this. I would go crazy with worry
RosaDilia RosaDilia 9 years
I guess they didn't think about their expenses that much during her pregnancy. OK, the pregnancy was unexpected but they had 8-9 months to somehow lower their debt and put some savings aside before the baby arrived.
steen steen 9 years
Wow. I don't think I could ever take out a loan to pay for my wedding! And $700 a month for a leased car... she must be driving something nice!
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