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EPISODE 50 - Financial Crisis (Mike and Julia)

NAMES: Mike and Julia
AGES: 30 and 28
ANNUAL INCOME: $60,600 (while Mike’s on paternity leave)
DEBT ACCUMULATED: $89,872 + $476,000 on 2 mortgages

GOAL: Pay off debt, sell the condo and save for the future

Alison's Plan

New parents, Mike and Julia’s $89, 872 debt plus $476,000 on two mortgages was sinking their leaky ship. They’ve only got one-month of savings left to help cover the payments. And after that, if the condo doesn’t sell, it’s foreclosure.

Mike and Julia’s income was reduced and their savings drained so I put them on a plan to get back on track.

  • First, I told them to Cut Spending and slash their monthly outlay from $6,202 to $2,100
  • I also told them to Reduce Their Debt Payments for the short term, from $4,900 to $750.
  • Then I said Get Organized financially and start planning for childcare and Mike’s return to work in just two months time.
  • Finally, I urged them to Unload the Condo any way they could. The burden of carrying mortgages on two properties was sinking them.

OUTCOME

Now, Mike and Julia have seen the light. They’ve carved more then $8,000 out of their monthly expenses, organized their financial affairs for the first time and they have unloaded the condo. If they continue to follow my plan Mike, Julia and Isabella will have a secure financial future to look forward to.

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