na be able to live large. >> you kill your debt. >> this is bad. this is really bad. >> answer me, when is enough, enough? >> i can buy absolutely anything as long as i work hard. >> we're suffering. we are suffering. >> you guys are gonna be one of my hardest couples ever. [ music ] >> i'm sherry and i'm a fitness program director. i supervise aquatics and children's programs and group fitness. >> my name is david, i'm a program systems coordinator and i have a little business on my own, renovations, painting houses-- i'm originally from mexico city. i met my wife in cancun.

>> he was working at a hotel. we had a son about a year ago. he's the most hard working, affectionate person that i've ever met. >> when i first came to canada every other weekend we were outside shopping. >> i would always have my nails done, my hair done, i would tan, spend a lotta money on clothes. >> i wanna be able to live large. >> david's all about the show. he drives his 300z. >> i got a better life here. >> he likes to send pictures of his car back to mexico so people can see that he's doing so well. >> i own about $30,000 of stereo equipment. >> we bought this home just over two years ago. >> i did the base boards and crown molding. >> drywall for the basement, it's interlocking stone which can run thousands of dollars. we had to buy tables, couches. we have 2,000 square feet here. to david, this is not big enough. >> we purchase another home, slightly bigger. >> david and i looked at the model home. i love this house. >> i love it too. >> the next day, we had put in an offer.

not only we are working on paying off our current debt situation. we're also working on saving up a down payment for the new house. >> when we were both working, we both had pretty good disposable income. as soon as i went on mat. leave that changed. >> i owe about $30,000-- $25,000 to 30,000 i don't even know the set amount. >> when it comes to money, i'm totally the stressor. that money will pay this bill. >> what bill? >> this one. what i do is i get really-- david, are you even paying attention? david's attitude is, "we'll always have some debt." >> i can buy absolutely anything as long as i work hard. >> the debt is stressful that i am leaving mat. leave early to go back to work. it's really tough, because it's obviously less time that i get so spend with my son. >> i'm not afraid debt. do i need gail? ah, no, because i wanna get rid of it anyways.

>> this month, i'll help this couple move from red to black. i've been solving money problems for over 20 years attacking everything from high finance to low income. i help people understand money and debt, which is still a huge mystery for most folks and it's the number one reason couples split up. so now i'm making house calls. david and sherry are living la vida loca. to bad they don't have the money to pay for it. sherry has gone back to work to help cover their debt load. but david is convinced he can have whatever he wants, whenever he wants it, no matter what the cost. hi-- gail vaz-oxlade. >> david, nice to meet you. >> hi, i'm sherry. >> if you don't mind, the first thing i'd like to do is drop my bag and have a quick look around. this is a very nice house. >> thank you. >> oh, my god! david, how big is this television set? >> ah, 60 inches. >> what did it cost? >> about six-seven. >> and the rest of the equipment that goes with it? >> thirty grand. >> three zero grand?

>> i just found out today, too. >> okay, so when you buys things, you tend to buy a lot of them at the same time, right? >> it's cheaper that way. >> only cheaper, if you're paying for it with real money and not credit, buddy boy. who pays a thousand dollars for a glider? >> oh, nice big master bedroom. hey, and another big television set. this is all about the image that you project and the showing of success. suppose you lost your job tomorrow. how do you hold up onto this debt? >> it would be hard. >> you don't even want me here. 'cause what have you just gone and done? >> we bought a new house. >> two people and a baby this house wasn't enough? >> 'cause he always says, "our house is too small." >> don't look at your fingers. answer me, when is enough, enough? >> i'm glad she's taking him on, because somebody's got to and i obviously haven't done a good job. >> you're so stressed out by this whole situation, you're going back to work early. you don't wanna go back to work. you wanna be home with ashton.

and that big television set does not compensate for the fact that you have to go back to work early. so, the very next thing i'm gonna is i'm gonna take you through the numbers, so you can see in black and white where has been going and so that you can see what the issues are and hopefully, david, hopefully the big light will come on over your head. here's the ugly reality. okay, you're spending is out of control. you shouldn't spend more than 35% of your income on housing. you're spending 47%. you're housing cost don't even include maintenance, which would take this up to fully 50% of your income. that's 15% more than you should be. so you're gonna go and buy a bigger house. you're now looking at $3,700 a month for housing. you gonna work that much harder? you're transportation costs

are right now at 30%. they only be at 15%. so, you're spending double on your transportation what you should be. here is your debt on which you're paying almost 19% on which you're paying almost 30% on which you're paying 29%. when you add up your monthly interest cost, you are spending each and every month, $750 a month on interest. annually you are spending over $9,000 a year on interest. there was a big gulp there. you have a right to gulp. where the money's going, so while you're out there buying electronics, she's buying clothes. you're spending $1,300 a month on home renovations. on average, every month. >> really? >> twenty-five hundred dollars a month on stuff.

you are spending $4,600 more than you make every month and if you stay on this track in five years you will owe without the new house $878,000. >> no way. >> no, it won't happen. >> go ahead buy the house and see how fast it happens. will you do anything i ask you over the next few weeks if i can dig you out of this hole? >> yep. >> okay, the next few weeks i'm gonna give you a series of challenges to do. you do the challenges to my satisfaction, i'll give you up to $5,000 to help you pay down this debt. you don't the challenges to my satisfaction, you don't get the money. if you don't have the right attitude, you don't the money. so, this month we're going to balance your budget. we're gonna get you serious about repaying your debt. but perhaps the most important thing is we have to get you on the same page, relationship wise on how you're gonna deal with the money. >> all right. >> i want all the credit cards

and debit cards. right here, front and center. scoot. >> i don't want them anymore, even. >> coming up. what does $68,0000 in debt really look like? 

the dirty dozen. so, you know about the jars, right? >> mm-hmm. >> i'm cutting your spending by 71%. so that means instead of the $3,900 you were spending, you're now gonna have $1,100.

you have $125 a week for food and personal care, you'll have $100 a week for transportation. a whopping $25 a week for entertainment. good thing you have all that equipment at home. eighteen dollars and seventy five cents for clothing and gifts and $15.50 for other. are you ready for your first challenge? >> yeah. >> who knows what i'm going to do to you, right? but i'm out to get you now, right? you know that. for this couple, there $68,000 of debt is the elephant in the room that david refuses to talk about. i'm gonna make sure they can't ignore it any longer. >> oh, my god! >> elephants. >> welcome to your debt reduction challenge. a lot of elephants in the room. >> yeah. you actually have to live with these elephants in your room until your debts paid off. see each of them has an amount

and when you pay off $200, you find the $200 balloon and you kill your debt. >> all right. >> i think the challenge for him seeing all the elephants in the room, i think that was a shocker. i'm sad to tell you, i can't balance your budget and get the debt paid off. you have to find a way to make another $1,200 a month just to balance the budget. oh, mister, we can do this no problem. >> oh, oh, yes, that's right. you bought a house, so that means you now have to earn another $1,800 to come with the down payment. now we're up to $3,000 a month. >> it's still doable. >> sherry's rolling her eyes. tell me what you're thinking. >> i don't know. i'd like to see it. >> i'd like to see it, too. >> i have no doubts that i can do this. i can outside and just ask for a couple of jobs.

i'm gonna do my best just to prove them wrong. they think that's it's gonna be hard and it's not. >> i think david's enthusiasm and optimism is not realistic. >> sherry's doubts are well founded. the one little painting job david managed to get didn't pay anywhere close to $3,000. so sherry left ashton with his grandmother and took extra work to meet the debt reduction challenge. >> nice. david, grab that $200. >> what else? >> that $500 right there. >> gone. >> did you make anymore money? >> it was just one job though. it was last friday. >> and how was your week? >> busy-- really, busy. >> you're taking on a lot more work. >> yes. >> teaching, personal training. you're gonna be putting in a lot more hours, as well. >> yeah, well, um-- >> weekends and some evenings. >> okay, 'cause how much time

do you really wanna spend away from ashton? did you have a baby so that his mother could raise your baby? so as long as you're recognizing that what you're doing is you're exchanging the time you could be having with ashton for stuff. the worst thing about debt is that it limits your life choices. with no plan, they're spending landed them in debt and now david and sherry have to choose between work and spending time with their son. so that there's a plan in place for next time, i'm giving them their next challenge. this is your future plan challenge, you have been going through life, such as just throwing the elements of your life into the picture any ol' way and sometimes things don't quite fit. right? >> no, i mean. >> the trip to mexico that you wanna take to show everybody the baby. have you got a budget for that? >> no. >> do you have anything set aside for ashton for university? you're planning to buy this new house, have you figured out all the details? >> no. >> you've made a lot of decisions without thinking about the impact, overall.

so you're gonna figure out the things that you want what ever is that's in your five year horizon. you're gonna plan it out and you're gonna price it out so that when you're working you're working on the big picture as opposed just the individual pieces, 'cause the individual pieces don't get you any where. that's your challenge this week. coming up, can sherry and david put the pieces back together? >> didn't gail teach you anything? that's a bunch of b.s.

>> when i challenged sherry and david to make $3,000 more a month, david thought it would be no sweat. >> now to teach them a tough lesson about spending with no plan, i've given them a puzzle with no picture to guide them. and i want them to come to an agreement about the big costs in their future. and david still needs to make more money before i award them up to $5,000. >> doing a puzzle, blindfolded really, is sort of what we do in our lives. >> i make up the picture as i go along. >> i have no idea where this goes. this one has to go here. stupid thing. >> make it, like, just push it in. >> then we start looking at what it's gonna cost us. i think we're gonna realize we're not gonna be able to do half the things we wanna do.

>> so, our first priority is ashton, we need to set up an educational savings plan for him. and that's $100 a month. >> the second priority is the down payment on the house. >> okay, down payment for a house, $12,500. what else is a priority? >> we have to get the money for hardwood floor and the marble and--- >> oh, wait, wait, wait. that's not a priority, hardwood is not a priority. didn't gail teach you anything? what do you thinking about trading in the car for something less expensive? >> i don't want an ugly car. >> you just don't want to be seen in a crappy car. what about a trip to mexico? >> we can't afford it. >> so instead of showing your son to your father and your sister, who've never met him. you'd rather buy marble? i really see him changing for the better, because i think he's really gonna think twice before saying, "yeah, yeah, we could do it." >> over the marble. >> so you're willing to move into the house, not touch it and go to mexico? >> we got our priorities

changed. done. >> oh, geez. >> so now marble-- mexico-- marble-- mexico? i hear mexico won. >> yeah. >> so mister "i can make the "money, i can make the money, "no problem." having a little trouble finding work, aren't you? >> it's a little slow right now. i mean, it's hard to get it sometimes. the fact that you say, "i'm gonna get a job and get "the money and then i'm gonna "buy the thing," okay? makes sense? >> yeah, it makes sense. >> that's what i'm gonna do. >> that is the first sensible thing you have said to me, because now you're prioritizing the things that are important over stuff. so you wanna hear what this week's challenge is? >> oh, we are done. >> don't you just love this? >> no, not so much. >> this is your relationship rescue challenge. >> how? >> isn't a relationship rescue nice when we go to dinner and they-- what is this gail? >> well, you know what? you've built your entire relationship on a very shaky foundation, because you

have all this debt. you're going to be required to climb that there mountain. >> no. >> and haul the weight of your past mistakes behind you. >> oh, boy. >> coming up, will david and sherry move forward in life or will debt drag them down? >> come on let's go!  

>> david and sherry have the pieces of their new life plan in place. >> the second priority is the down payment on the house. >> but those plans are pointless unless david can boost his income. having a little trouble finding work, aren't you? >> it's a little slow right now. >> if they want to earn up to $5,000 to pay down their debt, they have to show me they have what it takes to move forward while being dragged down by their past mistakes.

>> when you have so much debt it's hard to really move forward, because no matter how hard you work, the debt just keeps pulling you back. i had to return back to work early, ashton hasn't had the opportunity to go to mexico to meet his extended family. i'm definitely going to be in charge and david's probably gonna have to do most of the work. >> you're making it harder. just work as a team. >> we're sinking. hold on-- i can't. >> if i bark any orders and he doesn't think it should be done that way, then he's gonna start to get really cranky. >> what's another word-- >> you're killing my leg. i'm going up first. >> when i get to the top, it's gonna feel really good. i just can't wait to get rid of all the debt. adios debt! >> even if we don't get the full $5,000, it worth it. hasta luego! good job, babe.

>> so what was it like climbing that mountain? >> it was easy. >> is it gonna be as easy getting rid of the debt? he's supposed to come up with the money for the down payment on the house. >> that's right. >> sorry, i just couldn't wait. >> how much is this? >> fifteen hundred bucks. >> fifteen hundred bucks. so that's this month. can you do it every month until the house is paid for? >> um, actually, i just got a big job. at some point i was afraid i wasn't gonna get the work, but i worked hard enough and i just started talking to people and someone called me and the work is there, money's there. well anything is possible. i told you. >> you absolutely deserve total credit for the fact that you have a really positive attitude. the thing you have to be really careful of is when you have a 10 year old or a 12 year old that's counting on you showing up at the baseball game, you don't wanna have to say, "you know what-- daddy owes "a lot of money and he has "to work extra over time." okay? put that back in your pocket, you big ol' show off. you're a big ol' show off. so when i got here, you were