I’m 40 and lost everything in my divorce – an expert gave me ‘the key’ to getting rid of $143k worth of debt

A DIVORCEE has been left wondering what he should do after accruing several hundred thousand dollars in debt.

He recently sought the assistance of financial experts withThe Dave Ramsey Showfor answers and a path forward.

The divorcee, Matthew, told hosts George Kamel and Jade Warshaw that it was difficult to find the “motivation” or next steps to “start over” at his age during a recentepisodeof the series.

Matthew quickly explained his situation, noting that before the height of thecoronaviruspandemic, he operated a successfulbusinessand was married with children.

Afterward, he faced divorce and the collapse of his business, putting him in a difficult spot withmoney, considering child supportpaymentsandpersonal loanshe incurred from the business.

Kamel and Warshaw emphasized that they would help Matthew get on the path to financial freedom but advised he provide them the numbers up front to get a better picture.

Matthew noted that he works as an electrician by trade, making between $80,000 to $90,000 per year.

KEEPING TRACK

Even with that salary, which Warshaw noted as very good for a single male in the United States, the divorcee said he was left with only about $100 for groceries and nosavings.

About $1,800 monthly went to child support, $460 monthly to pay off a combined $143,000 in businessdebt, rent of around $600, and then a few hundred more on car payments.

Still, Kamel and Warshaw said there should be well-over $100 to $200 leftover each month for Matthew.

One problem was Matthew wasn’t using anything tobudgetand instead made estimates in his head about what he could and couldn’t spend.

Addressing that issue would better help the divorcee track his finances to see what he was spending and how much excess cash could be disbursed elsewhere.

He also told the financial experts that there was an opportunity he could get a work truck courtesy of his employer soon, and that they would allow him to take on some freelancing gigs.

GETTING BACK UP

Kamel and Warshaw were thrilled to hear it, as it would help Matthew make thousands extra and improve his margins, which they noted as “they key” to getting out if insurmountable debt.

Improving your margins is simply moving the ratio of expenses to income in the positive direction.

That means more income and less expenses.

With the freelance gigs and the full-timejob, Matthew would be well on his way to a six-figure annual salary, improving his money coming in greatly and thus, his margins.

Kamel said that even an additional $3,000 to $4,000 a month would shave off considerable time Matthew would spend paying off debt.

With the right measures, the experts said Matthew could pay the $143,000 in potentially “less than three years.”

Warshaw also emphasized that Matthew was the “same guy” making $120,000 a few years back before the coronavirus pandemic, and that if anything he’d be wiser now moving forward to build his financial security back up again.

It wouldn’t be the first time The Dave Ramsey show helped Americans see their path out of debt.

Experts recently worked with a client whohad $180,000owed due to their husband’s “financial infidelity.”

Another couplewith $20,000in credit card debt after being completely free were advised to correct their crucial “home” mistake.