Original subtitles

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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