In CNN Money’s series about five couples living on (about) $46k, the third couple, Andrew and Ozgul Leone from Fort Lauderdale, clock in at $54,400. Here’s their profile.
They’ve been juggling debt around. Their property doubled in value, so the couple took advantage of a home equity loan to pay off higher priced debt. Unfortunately, they don’t seem to have broken the debt habit. While in general, it can be a good idea to pay off expensive unsecured debt with less expensive, secured credit, if the spending beyond the limit of income continues, you still won’t get out of debt.
This admission shows that the couple still is not on a path to financial freedom:
“I’ve had to rely more and more on credit cards to stay afloat,” he said. “There’s a lot of juggling to be done. A lot of creative financing. A lot of borrowing Peter to pay Paul.”
A big part of the couple’s expense is the child support Andrew is paying to his ex-wide for two children. Child support can be a significant financial strain, especially if income is earmarked for necessary expenses and prior debt. Based on their expenses, at the very least, the couple could eliminate cable. They also have two cars. If the wife is only earning $200 a week, and the second car’s total expenses are beyond that amount, it make more financial sense to eliminate the second job and the car. There is more to work than just salary; perhaps Ozgul finds enjoyment from her job as salesperson.
While I strongly believe that not every decision in a person’s life should be based purely on numbers, there must be some consideration when a couple is struggling to get by.
Updated January 1, 2018 and originally published April 23, 2007.