All language subtitles for Going From Broke s02e05.eng

I'm Jake.

And I'm Chelsea.

And we live in Dallas, Texas.

We have a little buddy
that's 11 months old.

His name's Hendrix.

JAKE: Yep.

CHELSEA: And one on the way.

JAKE: I'm a musician.

I teach guitar and music
production lessons.

I own a online bakery
called Sugar Social.

By day, I'm a mom and
a full time baker.

And then at night, I'm
a late night baker.

I've created this business,
like, I'm so proud of.

And finances in the
business, I feel like,

have been a back
burner priority for me.

The only real math I use in
baking is, like, measurements.

JAKE: Neither of
us went to college.

We kind of went into the trades.

We live in a three story
condo, and we're best friends.

We've been married
for six years.

We love being together.

Long term goal, I would say,
is to get a home with a yard

and have room for
the boys to run

around, because right
now, we're all kind

of on top of each other.

But unfortunately,
we're broke.

We're broke.

DAN ROSENSWEIG:
Here are the facts.

The numbers are massive.

Over 45 million people have
borrowed over $1.7 trillion

in student loan debt.

And the COVID-19
pandemic has only

made the situation more dire.

My name is Dan
Rosensweig, and I'm

the CEO of the multibillion
dollar company, Chegg.

This is my mission.

And with the help of my
financial expert, Tonya Rapley,

we're going to help people who
are drowning in extreme debt

build a life of
financial independence.

This is the year.

DAN ROSENSWEIG: It's
not going to be easy.

I can't do this.

DAN ROSENSWEIG: But
if they do the work,

they're going to go from
being in the red to becoming

the CEOs of their own lives.

This is Going From Broke.

[MUSIC PLAYING]

Good morning, Tonya.

How are you today?

Good day, Dan.

I'm doing good, feeling good.

All right.

Well, we have a very
interesting couple today.

Yeah.

Dan, they are just
the cutest family.

I'm really looking
forward to helping them.

So Jake and Chelsea,
they are in Texas.

Jake is a guitarist, and
Chelsea is a pastry chef.

Have you had a chance to
look at Chelsea's cakes?

They're amazing.

It's not good for me.

I've lost a lot of weight
during the pandemic.

Look at this, Dan.

If you keep showing
me that incredible food,

it's going to entice me.

And so imagine if
all of that effort

and all of that artistic talent
actually yielded a profit.

But maybe you could
just give me an overview

so I understand what we're
really dealing with today.

TONYA RAPLEY: Jake and
Chelsea make a combined income

of around $6,000 a month.

But their expenses
are over $6,500,

putting them in a monthly
deficit of about $575.

They have a car note and
recently consolidated

all of their credit cards with
a debt settlement company,

causing their credit
scores to plummet.

Their total debt is
close to $33,000.

People might not
understand $500 a month,

but that's $6,000 for the year.

So we got to start getting our
businesses more profitable,

using our time more
wisely, to generate,

not just income, but
profitable income.

I definitely agree.

Yeah, with a new
child on the way,

it really is time for them
to just clean it all up.

Well, I don't want to
wait one more second to meet

this very cute family.

Shall we bring them in?

Yeah, let's meet them.

I'm bracing myself
for the worst.

I'm thinking they're going to
tell us to quit our dream jobs

and go get something
more practical.

DAN ROSENSWEIG: Hello.

Hey.

Good morning.

Hey, guys.

Thank y'all for taking
time out of your day for us.

That accent says
you're from Texas.

CHELSEA: Yes.

We all say y'all a lot.

Y'all.

I'll throw a howdy in
there every so often.

I'm going to ask you the
most important question, which

is, who's your favorite band?

And depending on your
answer, we're either

going to help you or not.

Oh, OK, umm, my favorite
band, ah man, that's--

That's easy, U2.

U2 is one of my
favorite bands.

I'll stop there.

I'll stop there.

I was the CEO of Guitar Hero.

OK.

I also, for a very
short period of time,

was on the board
of Fender guitar.

Ah, I love Fenders.

DAN ROSENSWEIG: And two of the
people I was on the board with

were Bono and the Edge.

Oh my God.

Shut up.

You should have led with that.

That's his favorite, man.

TONYA RAPLEY: Chelsea
and Jake are not only

spending a lot of money
on food, but Chelsea also

doesn't separate her
cake business expenses

from her family's grocery bill.

Because you commingle
all your expenses,

we don't have any idea if
your businesses are profitable

or what you're spending
on your personal life.

TONYA RAPLEY: How are your
businesses established?

Are you formally incorporated?

Is that something we need to do?

And do we have separate
business accounts already

established for the businesses?

JAKE: No to both of those.

We're not incorporated,
and we don't have

separate business accounts.

Honestly, it's like confusion.

I have been lazy in that area.

And so I was just like,
I don't really know.

I'm just, you know, I just
kind of have been winging it.

I just want to eliminate the
word lazy from either of you.

You're not lazy.

CHELSEA: I'm starting
some baking for the day.

Hendrix is here.

JAKE: Hi, buddy.

CHELSEA: Say, Dada
is gonna leave again.

This is about as much time as we
spend together during the day.

That's right.

We get a five minutes, and
then I'm off to go teach.

I'll see you in
just a little bit.

Adios.

Lots of work all the time.

I also wanted to know, as
far as the credit scores,

how did we get to that point?

Because the credit
scores are pretty low.

CHELSEA: It's been,
like, a hard few years.

We lost four babies
over three years.

Good morning.

JAKE: Good morning.

CHELSEA: Just doing
a little breakfast.

Once we started
acquiring medical debt,

we used credit cards
to pay that off.

And then there was definitely
some grief spending, where--

JAKE: Yeah, we went on some--

We went-- I remember one
shopping spree specifically,

where we were just, like, so
sad about just miscarrying.

And we're just
like, you know what?

Let's just go get,
like, whatever we want.

Like, we literally
went to the mall.

And we got, you
know, like, shoes.

And just, like, kind of
reckless grief spending.

Where it didn't really
make us feel better, but--

JAKE: We just got in the
habit, to be honest--

CHELSEA: Yeah.

JAKE: --of hey, we
can just use this.

And then somehow
we'll pay it off.

I really appreciate
the honesty,

because you are
displaying exactly what

happens to a lot of people.

There are, sometimes,
larger purchases.

But it's those smaller
purchases that can

contribute to credit card debt.

And so now you don't have
any credit cards, correct?

Nothing.

Nothing.

We consolidated all
of our cards together.

Many of us hear
commercials all the time,

if you have credit card
debt, multiple credit cards,

consolidate your debt.

Sounds great.

However, it really does
damage your credit score,

which means your ability
to get future credit

is hurt dramatically.

So for homework,
we should go back

to the person that
consolidated your loan

and do to them what
they did to you.

Credit score can't get
any worse than it is.

So it's time we started
negotiating with them

about paying them less.

Two, you need to
set up businesses

if you haven't, because
you don't want to take

that on as personal debt.

You want to take it
on his business debt,

because if it doesn't work out,
we can shut those businesses.

And you won't be held
accountable, which is really

important to your future.

JAKE: Just finished
my Sunday morning gig.

And then I will start teaching
guitar lessons this afternoon.

So yeah, it never
stops, even on a Sunday.

But it's all good, because
I get to play guitar.

DAN ROSENSWEIG:
Jake, we have to look

at the cost, the unit cost,
of each thing that you do.

How much is a lesson worth?

How much is an
online lesson worth?

How much is an
in-person lesson worth?

What we're going
to look is to make

more profit out of what you do.

JAKE: Right.

DAN ROSENSWEIG:
Generating more income

that doesn't
generate more profit,

that's like empty calories,
which brings me, now--

JAKE: OK.
DAN ROSENSWEIG: --to Chelsea.

Yeah.

Chelsea, we don't want an
empty calorie pastry business.

We don't.

Right.

You need to separate
your business expenses

from your personal expenses.

Think of managing your money
like you'd be baking a cake

or like you'd be writing
or teaching a song.

You just have to figure
out the right things

to do in the right order,
and then make your own magic.

And that's the part
that we can teach you.

Cool.

Do you ship your cakes?

My birthday is Saturday, and
I want to buy a cake from you

and have you ship
it for my birthday.

Oh, heck yeah.

I want to celebrate my
birthday with your cake.

Aye, aye, Captain.

Happy early birthday.

Dan is just awesome
and kind of going,

hey, you know what you
need to do, just do it.

Just asking us the question
of, how much are you worth?

CHELSEA: I think
Jake and I heavily

weigh other people's opinions
on our work and our talent.

You don't need anyone's approval
to do what you're born to do.

Well, and our kids got to eat.

And we have to
pay, yeah, we have

to pay for diapers and food.

JAKE: We gotta eat too.

And like, it's just like,
I can't be, I can't just be,

like, giving stuff
away or including

stuff for free anymore.

I just started
making Dan's cake.

I really wanted my husband's
help filming this video.

But he works,
like, all the time.

So--

JAKE: Oh, that's awesome.

It's a boss.

CHELSEA: You can't rush art.

JAKE: Yeah, there's a lot
of passing one another.

CHELSEA: Adios.

JAKE: Love you.

TONYA RAPLEY: I don't think
anyone gets married and says,

we're going to be
broke together.

So him and Chelsea both need
to increase their prices,

because they could
be making more money.

And they should be
making more money.

When I saw Chelsea's cakes and
her cookies and her creations,

my immediate thought
was, I want some.

But when I started looking
at Chelsea's budget,

I realized that her profit
margin is really small.

CHELSEA: Some of
our first homework

was to separate business
and personal expenses,

because I had just kind of
dumped them all together.

This is obviously
very time consuming.

But it's also just kind
of annoying to have

to sift through
all of my receipts

and try to remember if it
was business or personal.

Ahh!

I know.

Hendrix feels the same way.

JAKE: Hey, Tonya.

Hey, y'all.

How did you guys do
with your homework?

We did, got a
pretty good start.

We got our business
checking accounts.

And then we will be
able to pay ourselves

into our personal
accounts from there.

TONYA RAPLEY: Great.

So both of you
are entrepreneurs.

And I know how
challenging that can be.

So Jake, you also looked into
the unit cost of your lessons

and how much it cost
you to conduct them.

CHELSEA: Dan and Tonya
gave us some homework

to time how long it takes
Jake for a guitar lesson.

JAKE: So I'm trying to
really break down my unit

price for a guitar lesson.

I've got my binder,
and I'm ready to go.

Ready.

OK.

Some of my lessons come to
me, and I don't lose anything.

But I'm losing a little bit
too much on some of my lessons

that I'm having to go a
little bit farther out for.

Hey, babe.

How long did that take me?

CHELSEA: 53 minutes
and 45 seconds.

JAKE: OK, I can do
a little better.

It's a little
frustrating, to be honest,

you know, driving and
losing time and gas money.

But it's good that
I'm seeing that.

It's made me start
asking some questions.

CHELSEA: I am creating a
3D cowboy boot cake today.

TONYA RAPLEY:
Chelsea, you are kind

of navigating, how much should
you be charging for your cakes?

And how much is your time worth?

I think this is something that
a lot of women struggle with.

How do we become more
comfortable and confident

asking for what we're worth
and asking for what we need?

Right, because I'm
the one who's like,

I'll stay up till 4:00
AM working on your cake

and make it super special.

But like, they don't
always know that.

TONYA RAPLEY: No.

They got to pay you for that.

They have to pay you for that.

Chelsea is trading her time for
money in making these cakes.

But what if she
created a platform

just showing other people how?

That's a lot more scalable.

And so I'm going to challenge
you to shoot a video that you

will upload to YouTube that
is a tutorial on, maybe, one

of your simplest recipes.

All right, challenge accepted.

That sounds great.

CHELSEA: Just getting
my little sonogram.

I'm going to go see the
baby, the little guy in here.

TONYA RAPLEY: By the time
they have baby number two,

I want Chelsea to have a
plan in place to make sure

that, even though she's
not in the kitchen,

she's still able to make money.

So we are bringing in a
personal hero of Chelsea's, Andi

Kirkegaard, a sugar artist and
owner of Kirkie Kookies, who

has the kind of success
as an influencer and baker

that I know Chelsea could have.

Hey, Andi!

Hi, you guys.

It's Andi!

Hi, Jake.

Hi, Chelsea.

Oh my gosh, it's so good
to finally meet you guys.

Oh my gosh, we're--

Hey, back at you.

I'm so grateful for your
time and that you could

jump on and help us,
because you've definitely

been a huge inspiration.

Chelsea, you have
so much potential.

I mean, I'm truly,
truly blown away.

Your cake work is
out of this world.

Come on, are you kidding me?

Everybody.

CHELSEA: Wow, thank you so much.

I certainly
relate to your guys'

journey and your guys' story.

And I, at one time or another,
had four or five different jobs

just to pay the bills.

I would have never
thought that sugar

cookies would buy me a house.

And I was really
avoiding going online.

But the minute I
did, I went, ah.

There's also an element
to going digital

and teaching online
classes where it was

work smarter and not harder.

So Chelsea, I'm sure
you can relate here.

How many hours do
you put in on a cake?

Oh, I mean, easily,
like, six or seven

with baking and decorating.

That's a loaded question.

Do you want to know how long it
took me to prep all my dough,

to prep my frosting,
to decorate,

to photograph, to
run my social media?

Right.

It became a thing,
with custom orders,

where it was like, I am breaking
my back for, like, no money.

That's you.

I'll spend 20 hours
on a dozen cookies.

So now some customers
be like, $90 a dozen?

$200 for a cake?

I won't spend that.

Let me tell you
something, Chelsea.

You and me, we make the
Lamborghini of baked goods.

Right.

I'm a Lamborghini.

Something that's
really important,

as you begin to
take this journey,

is catch yourself scrolling
through Pinterest or Instagram

and stop when you see something
that catches your eye.

And then ask yourself,
what about that photo,

why did I stop?

You know, I see
a lot of cookie-ers

doing really amazing things.

There's so much
going on that I feel

like I'm adding to the noise.

Well, hold on.

I think that narrative is
something you have to change,

because let me tell you.

You bringing your talent to
the game doesn't add noise.

You are probably
inspiring somebody else

that you don't even know.

So my challenge for both
of you is just do it.

Cool.

Jump in.

What does it look like
to teach an online class

like a curriculum and
host it and sell tickets?

You guys have so
much talent to give.

And it would be a
shame for you guys

not to take advantage of this
digital age in which we live.

So you guys can bring your
talents and your creativity

to other people who
might be struggling

and who want to
learn from you guys.

You guys are superheroes.

Well, thanks.

We're tired superheroes.

We're tired superheroes.

CHELSEA: Um, yes.

Look at this number.

I jumped on Credit Karma,
checking my credit score.

And I'm about a 551, which
I started at, like, a 470.

As our debt gets relieved, our
credit score will get better.

I just, I'm excited.

It's a good feeling.

Part of my homework was
to film my cake tutorial.

I'm a little nervous, because
I've never really done it.

But I'm just
telling myself, it's

like teaching a class recorded.

That is one thing that's
nice about baking,

is that wherever you bake,
it smells really good.

All right, so now we're
just smoothing the tops.

You're going to start from the
outside and work your way in.

So we're just going to throw
a little border on here.

So that's our icing 101 video.

I hope you learned something.

Or if you have questions,
leave a comment.

And in our next
video, you'll learn

another way to ice a cake.

Some of our first homework
was to set up an LLC.

All right, so
Jake's official LLC.

We're going to go
with the gold package.

And we'll get--

[BABY CRIES]

Yeah, and EIN
number, an IRS form.

I think it will be really nice
to do it all through Inc File.

JAKE: Yeah, I think this
will just make us a little

more professional and--

CHELSEA: Official.

[BABY TALKING]

Yes.

JAKE: Yes, sir.

DAN ROSENSWEIG:
Jake and Chelsea.

CHELSEA: Hi, Dan.

JAKE: Hey, Dan, good to see you.

I want to introduce you to one
of the finest character actors,

I think the gentleman that
created the greatest character

of the last 10 years,
for the show Billions,

the incredible actor,
David Costabile.

David, I want you to
meet Jake and Chelsea.

Hey, Jake and Chelsea.

JAKE: Hey, David.

Nice to meet you.

Nice to meet you too.

You have to understand,
I have goose bumps

that I'm talking to the Wags.

JAKE: He's a me.

You're talking to
David, technically.

So the character that I
play is the attack dog

of this particular hedge fund.

David is just a middle
aged dad with two kids.

But I also live
in New York City.

I ride the subway.

You know, I am in a constant
rage, because I'm alive.

You know, and it's just brutal.

I happen to have great
access to my own rage

and bring it forth
every day at work.

We all do have rage.

I would imagine you guys
have rage at the debt.

But what Wags is, is the
world's greatest negotiator.

So I want him to Wags you up.

I want you to
understand how you need

to be tough sons
of you-know-whats

and hold your ground
and negotiate.

The thing that you have to
start with is a certainty.

The thing that is
unimpeachable is you.

I can never tell
you how you feel

and what you are certain of.

And when you are certain
of something like that,

it will mount.

So you can do it quite easily.

You can say, this is
what I'm certain of.

And somebody says,
pushes back at you,

you can be like, you must
have misunderstood me.

When I said this is
what I'm certain about,

and then they push back again.

And then you say,
oh, I have to let you

know exactly what I just said.

Right, right.

I said it again, and
you didn't listen to me.

And now, I'll have
to actually be really

assertive with you,
because I'm telling you

what I know to be true.

I'm not making it up.

I'm not telling you
how to do your job.

I'm telling you how I am doing
so you can start to see how

the character comes into play.

JAKE: Wow.

I can't believe it.

Yeah.

DAN ROSENSWEIG: Jake,
do you have rage?

Um, yeah.

You know, it takes quite a
lot to bring that out I think.

But uh--

It's always bubbling
under the surface.

What you want to be able
to do is to say, look,

I've been an excellent
customer during the hardest

time in my life.

We have hit the breaking point.

Here's what we need.

We need a lower monthly
payment without extending

the amount of time that we pay.

So you set parameters without
negotiating against yourself.

That person's
leaving and saying,

my choices are, they're
going to stop paying,

or I can do something, in
which case, we can save them.

JAKE: Wow.

I'll give you one last--

here's one last physical test.

When you're dealing
with being nervous

or doing something that is
difficult or confrontational,

this part of our body
can become quite tense.

So I'm going to make you,
now, go to drama school.

And it looks really ugly.

So we're going to have
to do it together.

I'll do it with you.

Take your pinkies and stick
them on the edge of your mouth,

inside your mouth.

And now pull it out like that.

Up and down.

Yeah, you look like a jerk.

Slowly push down into
your jaw and separate

the hinge between your top
jaw and your lower jaw.

Take both your hands like this.

Relax your jaw, though.

Relax your jaw.

JAKE: OK.

Loosen the jaw.

CHELSEA: Oh, yes.

OK.

So slowly go down.

JAKE: Ahh.

Do you feel loosey
goosey in your face?

I feel like I'm
ready to negotiate.

So we're currently paying,
like, $435 a month.

$435, yeah.

And I think we,
after talking, we

feel more comfortable
knocking, like, $100 off.

JAKE: I have a lot of
certainty, got rage about it.

And I'm ready to
ask what I need.

Yeah, definitely.

Let's do it.

Let's do it.

I'd like to speak to
someone from customer

service about our account.

Well, what we're
looking to do today

is we need to figure
out what we need

to do to get that number
lower on our monthly

without extending the
time it's going to take

to pay our credit cards off.

So what can we do
today about that?

TONYA RAPLEY: I'm so excited.

Let's see what they did.

JAKE: Hi, Dan.

Hi, Tonya.

Hey, guys.

Hey, y'all.

Oh, she went all
southern on you.

Do you remember the original
set of homework assignments?

We separated personal
accounts from business accounts.

TONYA RAPLEY: Yes, yes.

That makes me happy.

JAKE: We registered
with Inc File for LLCs.

And we're still
developing curriculum

for our online classes that
we're going to be launching.

I don't think I was
this good of a student.

Chelsea, we asked you to break
down how much you were spending

on your business
and separate that

from your personal expenses.

How did that go for you?

I sat down.

And just for this month,
I made a total of $1880,

and then I spent $522.

Yay.

Back at the
beginning of the show,

I wouldn't even look at numbers.

It totally overwhelmed me.

And being able to do that,
I can feel good about asking

what I need to ask for.

Yeah, give me my money.

Give me what I deserve.

What surprised you
during this journey

about yourselves or each other?

For me, I almost had to
become a different person

in some good ways.

It stressed me in some ways that
maybe I wasn't stressed before.

I raised my rates,
but I also am giving

my clients some more options.

So now, for $60,
they can be online

with me for their lesson.

For $75, that's where
they come to me.

And for $90, now, I'm
coming to your home.

And that's what's going
to make the difference.

TONYA RAPLEY: It's just,
you feel more confident,

looking at you two now based
on where you were when we first

had our conversations to now.

By working smarter
and not harder,

Jake and Chelsea's income went
up to over $6,600 this month.

And by paying attention to their
personal and business spending,

they were able to get their
expenses down to $5,600,

putting almost $1,000
into their savings.

And after some
intense consolidation

loan negotiations,
their total debt

has dropped to under $24,000.

You guys are killing.

That is amazing.

Dan, we got to, like,
we got to high five.

If I'm hiring a
negotiator, I'm calling

whichever one of you did that.

You now only made
$1,000 more a month,

you reduced your debt by $9,000.

So holy cow, congratulations.

JAKE: That's pretty awesome.

CHELSEA: Jake even
said this morning,

he was like, I think we could
save 20 grand by next year.

And I was like,
I think we could.

Tonya and I have a
little surprise for you.

We would like to
give you guys $1,000.

You can apply it towards an
investment in your family's

future and your future.

CHELSEA: Wow, that's huge.
JAKE: Awesome, that's exciting.

Thank you so much.

We will be on that.

Bye, everybody.

JAKE: Thank you, Dan and Tonya.

Great to see y'all.

TONYA RAPLEY: Bye, guys.

JAKE: We're going to miss you.

We're going to miss you too.

I'm getting some cake.

CHELSEA: Through this
process, we've learned

to really work as a team.

And just that, like,
numbers are our friends.

JAKE: Incredibly encouraging.

We felt like we had
coaches and friends

alongside of us the whole time.

And that really gave us the
boost to just know, hey,

we can do this.

CHELSEA: They have inspired
so much confidence in me

as a business
owner and as a mom.

It's brought a lot of
peace to our lives.

It makes me excited
for the future.

And I feel like
they really gave us

tools that we can use forever.

If you're looking to build
or rebuild your financial life,

we've got tools and
resources to help.

For more on debt, student loans,
earning more, spending less,

and dozens of
other money topics,

go to Chegg.com/GoingFromBroke.

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