Dr. Phil's Recession Survival Squad: John, Rebecca

On the Brink of Disaster

"We're headed to financial destruction," John says. "There's no money in the bank. I feel in shock. I can't believe that I can't pay my bills. Rebecca and I are realtors and right now, we're struggling."

"We're three months behind on our mortgage. We have about $35,000 in credit card debt," Rebecca says. "In February, that's when we really got down to, like, $20 in our pocket. We put the car up for sale. We applied for emergency assistance. The real awakening was when we got a notice that the kids were going to get kicked out of school. We didn't come current with the tuition."

[AD]Recently, the utility company shut off their power.

"I felt guilt, shame, embarrassed , desperate," John says. "If I don't close on another sale in one month, then I don't know what we're going to do."

"All this makes the world a very scary place for us right now," Rebecca says. "I don't know how we are going to dig ourselves out of this hole. I don't know how we are going to survive."

Three years ago, John and Rebecca were selling a house every month and living the high life: buying a second home, driving a Mercedes and vacationing in Hawaii, Florida and Puerto Vallarta. Rebecca remembers, "I was buying clothes left and right, and toys. We were going out to dinners, spending $200 on a dinner, offering to pick up the check, no problem."

"I used to be able to take the kids to Disneyland, take their friends with us, have great birthday parties and have no worries," John says. "Now we're having to worry every month: Did we pay the water, the gas? The children always ask, ‘Why can't we buy that?' or ‘Why can't we go there?' I'm sure the kids are frightened."

[AD]"The children pray at night. They pray for us to make more money," Rebecca says.

To make matters worse, the couple finds themselves fighting all the time, and they're afraid their family will not survive this crisis.

"The financial stress has taken its toll on our relationship," Rebecca says. "Anything small can turn into a big argument. The kids are starting to notice and ask, ‘Why do you guys argue?' It's really heartbreaking. Divorce is something that we dread, but I feel like I'm damaging them by arguing in front of them."

"[My] worst fear right now is that my wife will leave me, and my kids will follow her. I won't have a family," John says. "It's not a happy time right now."

Dr. Phil tells Rebecca and John that the real tragedy in this financial nightmare would be if their family broke apart. They still love each other, but the issue is they've gotten into the habit of venting toward one another. "So, we've got to decide if you're going to try and keep your family intact, because you've got some problems here. Some of them you created, some of them you didn't. You didn't create all of this economic recession and meltdown, correct?" he asks.

"Correct," John says.

"Those were decisions made by someone other than you. But you made your individual family decisions. You overextended, you didn't plan, you didn't save, you didn't do as much as you could, so some of this you own, some of it you don't," Dr. Phil says.

He gives them his steps for his recession survival plan: "Number one, you have to acknowledge the situation and be willing to evaluate it. This isn't just, like, a rough time. We're down to survival mode. When you've got $20 in a pocket of a family of four, you're shifted into survival mode, and you need to evaluate what the real deal is.

"Number two, you've got to prioritize, and then number three, you've got to take action toward your number one priority," Dr. Phil tells them. "You've got to decide what your priorities are. Now, my number one priority for you is to keep your family together. And you've got to stay focused on this, and you've got to deal with the truth. You can't tell yourself what you want to hear. Sometimes people make emotional decisions about finances. They spend money based on what they want, You say, ‘We need this. Our children deserve this.' Sorry. This is math, not magic. If you don't have the money, you need to deal with the reality of that. And you've got to, again, maintain this relationship."

[AD]Dr. Phil explains there is no room for denial. In the past, they've been able to spend money on clothes, birthday parties and little league dues, but the reality is they cannot afford that anymore. Although Rebecca says she likes to do that for the kids, so they feel that everything is OK, Dr. Phil reminds her she has to deal with the truth: Things are not OK. "The truth is, if you don't have the money for a $175 birthday party and $300 little league enrollment, you just don't have it. Four hundred and seventy-five dollars would buy groceries for what? Two months?"

"Probably, yeah," John agrees.

"But you do it based on ego and pride, and there's no room for ego and pride here," he says. "You can't vent and blame each other, and you don't want to be taken off task, where you're not working on that number one priority."