This week on Life or Debt: Julian and Erika Singleton

victorreturn1280ah Shoes, Shoes and More Shoes

Wela Financial Advisors on what we saw, what we learned, and what we should do on this week’s episode of Life or Debt on Spike.

The Singleton family lives in a great neighborhood in Chicago where the median household income is $60,000. It’s safe and they have a nice home there…this coming off the heels of living in a free apartment where they didn’t have to pay for rent, power or water. Safety was a major concern however as they were living in a dangerous part of town. Fear for their family drove them to a safer suburb.

So the move was a necessity but what they didn’t plan for was the real cost of living. Rather than budgeting and being cognizant of where their money was going, they instead spend, spend, and then spend some more!! To the tune of thousands of dollars in credit card debt and other personal loans. This on top of over $70K in student loans that Erika brought to the table. But the real problem is the daily decisions they make with their money.

Julian borrowed money from his retirement plan to buy new furniture for the whole house and doesn’t have the money to repay the retirement plan. Now, he owes money on his own money! This is not the recipe for building wealth. And he didn’t stop there either. He financed a brand new $5,500 television, which is a depreciating asset. Financing consumer products is a terrible habit to get into and the Singleton’s are waist deep in it.

In an effort to pull out all the stops, Victor enlisted the help of a forensic accountant to help them get back on track. In her investigation, she uncovers a $7K loan that was spent on SHOES and other online shopping and Julian was none the wiser! As one might imagine, this has disaster written all over it. Victor’s next act was to buy a Pavlock in order to “shock” them out of spending. The idea being that they had to press the button on the Pavlock before pressing “check out” of their online shopping cart.

Julian and Erika have a beautiful family and it seems as though they want to keep it that way. But the spending has to get under control. They need to open up to each other and begin communicating about their finances. They need to hold each other accountable and start working on their debts or they’ll find themselves up a creek without a paddle.