00:00:00
I would describe our financial situation
00:00:01
is dire right now as all we have 30
00:00:04
bucks yeah we spend our money on thanks
00:00:07
for the house that we don't need on our
00:00:09
kids on things that they don't need we
00:00:12
make unorthodox purchases unscheduled
00:00:15
purchases spontaneous purchases anything
00:00:17
that's on sale I will buy it I got a
00:00:19
call from these guys so that one's gonna
00:00:20
get paid immediately we pay bills when
00:00:23
the debtors call us and we pay the guy
00:00:25
who's called us the most my fear is that
00:00:29
we'll lose the house it's very scary for
00:00:31
me
00:00:32
one large emergency is going to crush us
00:00:37
[Music]
00:00:54
my name is Mike my wife Becky and I have
00:00:57
two children Christopher and Alex we've
00:00:59
been married for 13 years I work at a
00:01:02
pharmaceutical company
00:01:04
I am Senior Account Executive for a
00:01:06
managed services company our combined
00:01:09
income is approximately $100,000 we
00:01:11
don't typically talk about our finances
00:01:13
we ignore it
00:01:15
so do we pay these fairs last month once
00:01:17
it gets to the point where it calls are
00:01:19
coming in on a regular basis
00:01:20
the stress builds up more and more until
00:01:22
somebody finally breaks not this Friday
00:01:25
next Friday yeah we need money for
00:01:27
counts at the end of each paycheck why
00:01:29
are we and a negative where are we going
00:01:32
wrong it's absolutely terrifying being
00:01:34
under a debt load such as what we've got
00:01:36
if my car was to break down or we need a
00:01:40
new roof something like that will just
00:01:43
sink us we never seem to get out of the
00:01:45
spin at all if we keep going at the rate
00:01:47
we're going it's gonna happen again
00:01:49
we've got to do something about it now I
00:01:50
don't want to be where I am right now I
00:01:53
need help I need home this month I'll
00:01:59
help this couple move from red to black
00:02:01
I've been solving many problems for over
00:02:04
20 years
00:02:04
attacking everything from high finance
00:02:06
to low income I help people understand
00:02:09
money and debt which is still a huge
00:02:11
mystery for most folks and it's the
00:02:13
number one recent couple split up so now
00:02:15
I'm making house calls
00:02:19
[Music]
00:02:22
Mike and Becky have never talked about
00:02:25
money they're too busy spending it
00:02:27
together they've amassed 56,000 dollars
00:02:29
in credit card debt on top of their
00:02:32
$190,000 mortgage as if they weren't in
00:02:35
deep enough they've just taken out their
00:02:37
third consolidation loan kelvis Oxley
00:02:39
pleasure to meet you these two you need
00:02:41
my help check myself I think this one
00:02:52
really likes what's going on in the tank
00:02:55
nobody can look upstairs how
00:02:57
uncomfortable I know what had the boys
00:03:00
rooms Lords of close the thing I don't
00:03:04
see is fancy
00:03:05
[Music]
00:03:06
I kind of wonder where all the money's
00:03:08
going here's what I see when I look in
00:03:11
at you I see that you are teetering on
00:03:14
the edge there are no plans for savings
00:03:19
if an emergency were to arise tomorrow
00:03:21
you would be up the creek with no paddle
00:03:24
that should scare the pants off it does
00:03:27
absolutely I see you addicted to credit
00:03:30
it's created a reliance on money you
00:03:33
haven't yet earned and I also see two
00:03:37
people who are remarkably self indulgent
00:03:40
you guys spend over $100 a month tanning
00:03:44
[Music]
00:03:50
you bar spending more money than you
00:03:52
make you know that you are aware of how
00:03:55
much more you're spending than you make
00:03:56
I'm afraid to know we're also remarkably
00:03:59
disorganized it's an understatement now
00:04:04
bills don't get paid on time no no
00:04:07
wonder the bills are getting paid
00:04:08
they're shopaholics I've reviewed six
00:04:11
months of their finances and discovered
00:04:12
that they're spending twice as much as
00:04:14
they think when you did your budget you
00:04:16
thought you were spending about sixty
00:04:18
four hundred dollars a month you are
00:04:20
actually spending $11,000 a month
00:04:31
okay we have the problem if you multiply
00:04:35
that times 12 that's a lot a lot of
00:04:37
money
00:04:38
you guys actually get the prize for the
00:04:42
biggest shoppers ever in all time
00:04:44
everywhere in all eternity in six months
00:04:48
you made 70 trips to a discount
00:04:51
department store in six months you made
00:04:53
71 trips to restaurants you made 71
00:04:58
trips to the grocery store just shop
00:05:00
online to the tune of $100 a month yep
00:05:03
go ahead call me a liar restaurants
00:05:06
three hundred and sixty-seven dollars a
00:05:09
month if you stay on this track in five
00:05:12
years you'll be six hundred thousand
00:05:14
dollars in debt
00:05:20
that is unbelievable how could somebody
00:05:24
get into debt that much like can you
00:05:27
imagine that's like that amount of money
00:05:29
is more than my house that amount of
00:05:32
money is more than my house and my two
00:05:33
cars and everything put together want to
00:05:36
go there no no no sure
00:05:38
yeah very yeah I need your commitment I
00:05:42
need you to tell me that you're prepared
00:05:44
to do whatever I'm asking you to do to
00:05:46
get you back on track I need your
00:05:48
promise
00:05:48
without hesitation okay you have my
00:05:51
promise the very next thing I need are
00:05:54
all your credit cards all your debit
00:05:56
cards right now go get up all the debit
00:05:59
ones as well right
00:06:00
coming up CAD Mike and Becky get over
00:06:04
their addiction to credit so to see what
00:06:06
came in the mail today so should we tell
00:06:08
Gail about this
00:06:09
okay
00:06:11
[Music]
00:06:18
Mike and Becky are the ultimate
00:06:21
consumers hooked on spending money they
00:06:23
haven't yet earned reckless frequent
00:06:25
shopping combined with an indulgent
00:06:26
lifestyle have put them almost two
00:06:28
quarter a million dollars in debt
00:06:30
they've been relying heavily on credit
00:06:32
until now it's time to live by my rules
00:06:35
for the next month this couple will
00:06:38
learn to live on a strict cash budget no
00:06:40
more credit cards they'll complete
00:06:42
weekly challenges to tackle their money
00:06:44
in relationship issues and if they're
00:06:46
willing to change I'll reward them with
00:06:48
thousands of dollars no changes no money
00:06:51
since a big part of your problem comes
00:06:54
from the fact that you have no self
00:06:56
control your credit cards are send back
00:07:05
they're gonna blow when I go to work
00:07:09
tomorrow
00:07:10
I have nothing this is like the security
00:07:13
blankets gone Mike and Becky have lived
00:07:16
on credit for far too long I've given
00:07:18
them a balanced budget and the cash tip
00:07:20
taken from the bank is all they'll have
00:07:21
to live on till the end of the month you
00:07:23
don't have any credit cards anymore and
00:07:26
I've stolen your debit cards what are
00:07:28
you gonna spend it nothing Josh I'm
00:07:35
gonna leave you the responsibility of
00:07:37
putting the cash of taken over the bank
00:07:39
into the jars what these jars represent
00:07:41
is your variable spending you have fixed
00:07:45
expenses and you have variable expenses
00:07:47
your fixed expenses are things like your
00:07:49
mortgage your variable expenses as we
00:07:51
have seen are completely out of control
00:07:53
and so what we're gonna do is we're
00:07:55
gonna trim back nice and tight cutting
00:07:58
your variable expenses by 65% okay
00:08:06
[Music]
00:08:09
they're going from spending eighty four
00:08:12
hundred dollars a month in variable
00:08:13
expenses to just under 3000 and from now
00:08:17
on I want them to sock away two hundred
00:08:19
dollars a month in savings and the
00:08:20
country dealing with the real stuff you
00:08:22
will run into a problem if you do not
00:08:24
write it down so here I have for you
00:08:29
your handy-dandy budget binder and what
00:08:32
this proves is that while you may be a
00:08:34
techie high tech isn't better everything
00:08:38
you spend in each of these categories
00:08:39
that I have given you you have to write
00:08:41
in the budget binder write it down
00:08:44
Thanks stay on budget okay spend less
00:08:48
and we'll be all happy campers we
00:08:53
certainly need the slap in the face
00:08:55
you know we're not getting it from
00:08:56
friends and family because we don't
00:08:57
typically tell them about this sort of
00:08:59
stuff so Mike and Becky we are here
00:09:02
because you seem to have a fairly well
00:09:05
stopped cooking shelf yeah and this is
00:09:09
important because over the next week you
00:09:12
are allowed to go shopping once that
00:09:17
means you have to figure out what the
00:09:19
meals are gonna be and you have to go to
00:09:20
the cupboards and figure out what's in
00:09:22
them and figure out what you need and
00:09:23
how will I know if you have gone
00:09:26
shopping once one through six they're
00:09:30
used to shopping three times a day I
00:09:32
have to wonder if they're gonna be able
00:09:34
to pull this off actually planning the
00:09:36
entire shopping for an entire week is a
00:09:40
first for me
00:09:42
I think it'll be a real test of
00:09:44
character for us to see if we can
00:09:45
actually go out and do it so take
00:09:48
inventory of all cover do you want
00:09:50
veggies or fruit if I can get some fruit
00:09:52
yes oranges and some apples would be
00:09:54
perfect did you want to make this
00:09:55
finished lasagna yes
00:09:57
I'm gonna do that on Saturday just
00:09:59
because it's easier okay what about the
00:10:00
fridge we're out of milk and we go
00:10:03
through milk so I put down eight bags
00:10:05
okay what do we have to spend on
00:10:09
groceries 150 bucks I'm gonna bring a
00:10:16
calculator
00:10:16
oh the jars are horrible I hate them it
00:10:22
just reminds me that I only have so much
00:10:24
money to spend we need milk yeah -
00:10:33
what's 687 cheese juices were 96 cents
00:10:38
like 67 87 cents times 3 so what do we
00:10:47
got do we have a subtotal
00:10:50
[Music]
00:10:56
how was your week it was hard it was
00:10:59
rough
00:11:00
I have to admit we thought it was gonna
00:11:01
be really easy but towards the end of
00:11:04
the week it got harder and harder
00:11:05
Saturday comes along and you're going
00:11:07
something's missing here I mean it's a
00:11:09
routine going out on Saturday or Sunday
00:11:11
and doing some shopping a habit
00:11:13
absolutely yes it's a bad habit very
00:11:16
much because what you've done is you
00:11:17
have taken shopping and turn it into a
00:11:19
sport yes you have to think about this
00:11:23
for your boys as well if every time you
00:11:25
go shopping and you come out with stuff
00:11:27
they're learning that you're going to
00:11:28
start to come up with stuff yeah so
00:11:30
maybe what you have to do is think about
00:11:32
other things what other things are there
00:11:34
that make life rich when you spend the
00:11:37
money what do you feel you get to feel
00:11:39
good so you have to figure out what the
00:11:41
motivation is why you feel the way you
00:11:43
do and why that particular activity
00:11:46
fills the hole if you don't figure this
00:11:49
out you never actually solve the problem
00:11:52
I love something I think the thing is is
00:11:54
it takes me away from here to be by
00:11:57
myself so maybe I actually need a long
00:11:59
time not necessarily shopping but doing
00:12:01
something else for me
00:12:02
aha she's starting to get it shopping
00:12:05
his entertainment is an expensive hobby
00:12:07
and one that could land them even deeper
00:12:09
in the hole because you have some issues
00:12:12
around spending around not communicating
00:12:15
about money this week's challenge is
00:12:18
gonna sort of hit them all at once Mike
00:12:21
your job this week will be to create bag
00:12:26
lunches for each day that you go to work
00:12:28
for both you and Becky and then you're
00:12:30
gonna jump in your car and drive your
00:12:32
bag lunch over to Becky and you're gonna
00:12:35
find a quiet place to sit and talk Becky
00:12:39
you won't be tempted to go shopping with
00:12:41
the girls cuz your loving husbands
00:12:42
showing up with some questions that you
00:12:44
are going to work through over a week's
00:12:47
worth of lunches together this whole
00:12:49
process so far Becky and I have
00:12:51
communicated more but our finances we've
00:12:53
had to sit down there's a lot more
00:12:55
exposure to each other
00:12:56
this week's challenge is just going to
00:12:57
expand
00:12:59
coming up Mike and Becky finally start
00:13:02
talking about money but are they on the
00:13:05
same page so I said we set a limit 15 I
00:13:07
think that's too long Mike and Becky are
00:13:16
now living on a strict cash budget I
00:13:19
spent 20 bucks on gas their father
00:13:21
controlled day-to-day spending has
00:13:23
landed them 56,000 dollars in credit
00:13:26
card debt he's been a balance for it
00:13:27
immediately to avoid for the collection
00:13:28
actions managed they give him a call
00:13:30
my challenge for this week forces them
00:13:32
to plan for the future and set a better
00:13:34
example for their kids succeed and they
00:13:37
can earn $5,000 it's me I'm just a
00:13:40
couple of minutes away I'll meet you up
00:13:41
front I think it'll be nice to actually
00:13:45
spend some time with Michael are you
00:13:47
ready with this it'll be nice to
00:13:49
actually talk about it instead of one
00:13:51
ignoring it and two fighting about it
00:13:54
number one what do you want for your
00:13:57
future and do you have similar pictures
00:13:59
are they completely different I want the
00:14:01
house paid off I want to make sure the
00:14:03
kids education is paid off they don't
00:14:05
adopt our debt what about you I just
00:14:10
happiness really I want to be able to
00:14:13
plan for purchase and not do the buy now
00:14:16
pay later scenario that we always do
00:14:17
yeah so it sounds like your pictures
00:14:20
kind of jive with my pictures number two
00:14:22
is what do you want for your boys and
00:14:25
what do you want to teach him about
00:14:26
money that's an important question
00:14:28
because they're all we've done is we've
00:14:32
want I'd like to get them on to a fixed
00:14:35
allowance system I'd like to you know
00:14:37
explain a little bit more about the jar
00:14:39
system well you said that you don't want
00:14:41
to do the jars I don't want them to be
00:14:43
all hoarding their money and I don't
00:14:44
want them to be able spending their
00:14:45
money so Mike and Becky tell me how your
00:14:49
week went you know or personal goals yes
00:14:52
there were differences there were
00:14:53
certainly some overlapping points I saw
00:14:56
my future not I hate to say it not as
00:14:58
material but I wanted to be happy and I
00:15:00
want to be financially comfortable and
00:15:01
Becky saw things as I want to make sure
00:15:03
that I've got a house you know near my
00:15:05
parents with a pool and and so on right
00:15:08
and you had never talked about this
00:15:09
before not really dug to that depth what
00:15:11
did you think of the whole exercise I
00:15:13
actually like to answer these questions
00:15:14
it really made me think about what I
00:15:17
wasn't thinking about before I think
00:15:19
you've taken a great step doing what
00:15:21
you've done here because you've actually
00:15:22
started thinking about it cuz it's hard
00:15:25
fundamentally what I'm asking you to do
00:15:27
is change your behavior you guys I
00:15:29
believe have your day to day stuff in
00:15:31
hand I have come up with a very creative
00:15:35
challenge for you
00:15:39
okay I'm scared christmas is just around
00:15:42
the corner and special events like this
00:15:44
have a way of blowing your budget writer
00:15:46
to the water more than ever
00:15:48
Mike and Becky need to get creative and
00:15:50
stay out of the malls because I would
00:15:52
never strain your budget knowing just so
00:15:54
tight it is I have for you here a new
00:15:58
jar I'm happy with those temperatures
00:16:05
using this $200 you have to make
00:16:09
presents for each other and for the
00:16:13
grandparents okay just have to be the
00:16:15
same thing it doesn't have to be $200
00:16:16
worth of sugar cookies okay use your
00:16:20
skills to do something creative you get
00:16:25
a stack of CDs the $200 Christmas
00:16:31
challenge begins with a trip to the
00:16:33
computer store I had to admit this is a
00:16:36
lot harder than I expected it was going
00:16:38
to be we're making a lot of stuff I'm
00:16:42
doing some cooking we're making two
00:16:44
baskets this sweet basket which has jams
00:16:46
and jellies and some CDs of sweet
00:16:49
Christmasy music I am making Christmas
00:16:56
ornaments from beads a challenge this
00:17:00
week has been very hard mostly because
00:17:03
of time coming home and getting the kids
00:17:05
to do their homework and then sitting
00:17:07
down doing crafts do we know which ones
00:17:11
are salt watch one of the sugar
00:17:25
where did you call in your hand
00:17:31
coming up well Mike and Becky be able to
00:17:34
stay on budget are you gonna give these
00:17:35
presents and teach their kids that nice
00:17:39
gifts don't always come from a store
00:17:41
[Music]
00:17:47
before I met them Mike and Becky shopped
00:17:50
an average of three times a day
00:17:52
they spent shamelessly paying no
00:17:54
attention to the bottom line let's see
00:17:57
how they did on the $200 Christmas
00:17:59
challenge so Mike and Becky I want to
00:18:02
hear all about your week and
00:18:04
particularly about your challenge we did
00:18:06
the best that we could and we made as
00:18:08
much as we could
00:18:09
timing was an issue for you it was a
00:18:10
very I was working parents coming home
00:18:14
and having to cook and jar and make this
00:18:18
and make that and everybody liked them
00:18:20
they loved because we do it a gift
00:18:23
exchange thing and you draw a name and
00:18:25
then somebody picks this one and they
00:18:26
can steal that one and our gifts were
00:18:27
the ones that were being stolen it was
00:18:30
just better than shopping I could say
00:18:32
better than Christmas shopping because
00:18:35
the malls out there crazy so all in all
00:18:37
it was a just a resounding success yes
00:18:39
it was a real pleasure it's really good
00:18:41
yes when I got here you guys were headed
00:18:44
to a boat sitting 3,000 dollars worth of
00:18:46
debt but now things have changed
00:18:49
you've stemmed the $3,600 a month
00:18:51
overflowing your budget and you're
00:18:53
actually saving $2,400 a year if you
00:18:56
stick that $2,400 a year in an RSP at 5%
00:18:59
and then you reinvest your tax refund
00:19:02
you'll have a quarter of a million
00:19:04
dollars by the time you get ready to sit
00:19:06
in your rocker okay okay let's go happy
00:19:11
when I went to go get the money for the
00:19:14
jars this morning if I looked at my bank
00:19:17
statement I went what we have money
00:19:19
money compel what safety there's like
00:19:22
this comfort that you're not in the
00:19:23
negatives you know I still have to work
00:19:25
on finding things to substitute for me
00:19:27
oh I do me time time I do you had to
00:19:30
change our lifestyle and it was a sudden
00:19:32
dramatic drastic change in our spending
00:19:35
habits and that got frustrating at times
00:19:37
you've worked really hard this month so
00:19:40
I have something for you I have that's
00:19:46
not right
00:19:47
oh yeah it is thank you thank you very
00:19:55
much
00:19:56
the biggest lesson that I learned was
00:19:59
when the right time to spend money is
00:20:03
now we talk about our spending we talk
00:20:06
about our planning we talk about our
00:20:07
finances a lot more and for me it's made
00:20:09
the biggest difference
00:20:10
I'm impressed with Mike and Becky's
00:20:12
progress they went from shopping 21
00:20:15
times a week to shopping only once now
00:20:18
they're talking about money and their
00:20:19
financial goals but most remarkably they
00:20:22
stuck to a dramatically reduced budget
00:20:24
even through an event like Christmas
00:20:26
that deserves a special nod when you
00:20:29
work as hard as you do you deserve a
00:20:31
little bit extra I know the two if you'd
00:20:33
like to eat and I virtually Stoppard
00:20:37
your eat out budget yes so I am giving
00:20:41
you the option if you go to a wonderful
00:20:43
restaurant for dinner you're also going
00:20:46
to go away for the weekend by yourself
00:20:47
and have a romantic weekend away in a
00:20:50
lovely hotel enjoy
00:20:54
we deserve it you have been such such
00:20:58
good sport they have been such a good
00:21:00
sport
00:21:01
[Music]
00:21:30
moneymoney
