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New Baby, Personal Debt, Business Debt and Need a Plan to Get Out of Debt. – Matt

“Dear Steve,

I have personal debt and business debt. My wife and I both have leased cars. We are 28 years old, rent a condo, and have a storage unit. We just had a baby. She makes about 45,000 p/year and I make about 25,000 p/year. (my business isn’t doing well) My credit score is around 640 and my wife’s credit is around 700.

My car payment is $50 p/month with a $14,000 buyout right now. About 7 months in a 3 year lease. (i had a lot of equity in my trade in car and decided to get a lease b/c it was going to significantly lower my monthly payment.)

My wife’s car payment is $333 p/month with a $31,000 buyout. About 3 months in a 3 year lease.

Insurance for cars – $270 p/month
Rent – $1,100 p/month
Storage – $110 p/month
Personal debt:
– $358 @ 6.74%
– $4,135 @ 10.24%
– $17,800 @ 14.24%
– $935 @ 15.24%
Business debt
– $29,210 @ 27.24%
– $25,000 @ 3%

I’m not too sure where to start… We have to do something soon! I think I gave you all of the info I could find about our situation. Thank you for all of your time and help!


couple working

Dear Matt,

No problem. Happy to help.

I do have a few questions first.

You said that your business is not going well and that you just had a baby. Congratulations on that by the way, the baby that is. My condolences for the business.

What are your plans for your wife to keep working? Since she has the higher salary then I need to know what the game plan is there.

While you gave me some of the numbers, the critical facts I need are if you are negative each month, and if yes, by how much. I’d also like to know how much you have in savings and are you saving for retirement?

It’s clear the credit cards have grown. Was that from making ends meet?

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Matt


    My wife doesn’t want to go back to work but will have to after her family leave. I’m waiting on a new job as a firefighter which has been over 4 years of waiting. Now they have hired a class of people and passed me over… So now I’m in the process of talking to a lawyer because I should have been hired. Not sure how long it will take to get on the fire department but when I do I would be getting $46,000 a year not to mention the savings in healthcare.

    Each month we are just getting by, my busy times for my business are May, June, July, August, November and December. For those months we are in the positive not by much, the other months we are in the negative and put what we can’t afford on the credit cards. I don’t have an exact number. We don’t have much savings, we put $50 p/month in a retirement fund and have only been doing that for a year and a half. My wife has a 401k through work and I’m not sure how much is in there.

    I would say that 90% of what we charge to the credit cards are to pay bills and get by. The other 10% is for pleasure, shopping, extra baby stuff, going out to eat.

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