Cullen and Katie: Drowning in debt, parenting is inept | Part #24

[MommaOfThree]

That car is a money pit. Their monthly payments are $929. $929 x 72 mo = $66,888. $66,888 + the value of the trade in + their down payment....holy cow they really got screwed when they bought the suburban.


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[ICantEven]

I'm still stuck on the tax deduction stuff. From my understanding, as a small business you pay tax on profits (income minus business expenses). So in order for them to not owe anything in taxes, they would literally need to spend all the money they made so that the net profit of their LLC was zero. If this is the strategy they were told about at some time (perhaps by their braniac friends B&M and E&J), that is downright stupid! If anyone actually knows about this, I would appreciate your input.

In the example they gave, it sounds like they were having no trouble spending all their income but they just didn't realize they should be deducting all of it as business expenses, hence why they had less cash than they owed in taxes?

If it's true that other YouTubers are using this strategy, it explains a lot about the ridiculous purchases (or buying large plots of land and doing nothing with them) and also seems like no one will have any savings and they will all be left broke like C&K at the end of the day. I know Bonnie and Joel claim to have set aside money for retirement, and 8 passengers doesn't appear to be spending all of their income, so who knows. Interesting that J House moved to Puerto Rico to solve the problem a little more intelligently by not owing taxes in the first place. But let's be honest these parents are all rather low in intelligence to truly think exploiting their kids on YT is a good way to earn money.

[HashtagBlessed]

I can’t take anything they say in these videos seriously, because they’ve demonstrated time and again that they don’t understand basic financial responsibility. What kind of moron starts a business and doesn’t think about business taxes? Or doesn’t bother to look at their credit card statement for weeks and months at a time? This is basic financial literacy that two educated adults pushing 40 can’t explain away by blaming other people.

They want to act like their business is oh-so lucrative and their job choices are not to blame. It’s their spending, not their income, that’s the problem. But I don’t believe their accounting, because they don’t know how to do basic math. (Katie doesn't even realize that 72 months is six years, not five years.) It reminds me of people who fall for pyramid schemes. They will just say whatever they want to create the “logic” that justifies not going back to work for an employer.

I don’t doubt that YouTube/podcasting/Instagram is a dream come true in the sense that they didn’t have to work outside the home for years. BUT as soon as you can’t pay your bills and your taxes, you need to reconsider.

All that video did was demonstrate that these two should not under any circumstances be self-employed, because they can’t manage a business. They’ve had this business for at least five years, and they still can’t explain basic business accounting, haven't hired a tax accountant, or learned to file quarterly. I highly doubt any professional told them they could simply spend away their tax bill.

That's why people are suggesting you find other employment in your comments! If they were working outside the home, they wouldn't have had the opportunity to willfully misunderstand a tax write off as free money, they probably wouldn't have had time to mindlessly shop (and wouldn't have cared about keeping up with other YouTubers), taxable income would have come out of their paycheck, and they would have a straight forward income amount to budget. Not to mention, if I was making less every year at my job, I'd be looking for another job.

[apmfacebook93]

I also noticed Katie roll her eyes when Cullen mentioned talking to his sister about how much their car payment was. Britney had said hers was only like 200 and Katie rolled her eyes at that in a seemingly condescending way. I think Katie is just a spoiled brat that thinks she deserves a certain lifestyle. She just gives off this well you wouldn't understand you didn't grow up in an upperclass family like me. I really think she looks down on Cullen's family. Yet, I don't get that vibe from the rest of her family. Kelley and Jay don't seem to blow through money like C and K do. Their current house was their third home I believe so that would lead me to believe that they waited until they could afford the home. They borrowed or purchased Madeline's homecoming dress off of a friend instead of blowing 500+ on a new gown. So I think that Katie's parents probably taught them about money I think Katie just wants to keep up with everyone in her social circle no matter the cost.

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Absolutely.
Kelly and Jay are older too, and Jay has been making very good income longer then Cullen and Katie, and he will continue to do so while youtube is ending.
I fully believe that Katie expected Cullen to provide a certain lifestyle and resents him for not being able to.

If she thought Cullen was capable of that, she’s a grade-A moron.
Never in his life has Cullen made anyone believe he would be a wealthy man.


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[Ducklings4]

They haven’t mentioned, but remember Cullen was in the hospital for almost a week with that infected cyst on his face. I am sure their insurance has a high deductible so they probably had a pretty high bill from that. Look at their lives, they have expenses coming from everywhere. They don’t have income from everywhere one or both of them need to get another job. Maybe Granddolly could watch the Brooks after school and Gaines could go full day you know she is so bright.


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[auntasaurus19]

Based on what I’ve found, it appears their LLC was established in 2016. But if they effectively started YouTube in 2014, did they have two years of tax information and business expenses unaccounted for?


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[FakingIt_MakingIt]

I also noticed Katie roll her eyes when Cullen mentioned talking to his sister about how much their car payment was. Britney had said hers was only like 200 and Katie rolled her eyes at that in a seemingly condescending way. I think Katie is just a spoiled brat that thinks she deserves a certain lifestyle. She just gives off this well you wouldn't understand you didn't grow up in an upperclass family like me. I really think she looks down on Cullen's family. Yet, I don't get that vibe from the rest of her family. Kelley and Jay don't seem to blow through money like C and K do. Their current house was their third home I believe so that would lead me to believe that they waited until they could afford the home. They borrowed or purchased Madeline's homecoming dress off of a friend instead of blowing 500+ on a new gown. So I think that Katie's parents probably taught them about money I think Katie just wants to keep up with everyone in her social circle no matter the cost.

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Absolutely.
Kelly and Jay are older too, and Jay has been making very good income longer then Cullen and Katie, and he will continue to do so while youtube is ending.
I fully believe that Katie expected Cullen to provide a certain lifestyle and resents him for not being able to.

If she thought Cullen was capable of that, she’s a grade-A moron.
Never in his life has Cullen made anyone believe he would be a wealthy man.


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I kinda think she is.... I mean, just listen to her rant and rave …. I don't think Katie is a particularly bright person. I know she is educated but there is a difference IMO between being able to study and answer tests and being bright.

I think she fully expected Cullen would hunker down and provide the life she expected and was used to.

[irishmiss]

I'm gonna giive Cullen & Katie the benefit of the doubt for the moment because it is a brave thing to do to admit "yes we were stupid to buy all those things" to all of us who are saying "told you so" and to put out how much debt you owe to the world. We haven't heard the full story yet but a few takaways from what we know so far:

1. C&K were probably making a lot more money than we thought a couple of years ago and are probably still earning more than we had estimated based on socialblade etc hence why they are adamant going back to real jobs wont pay any better...for now anyway.
2. The ipads etc purchased for family members for business use....I went back and looked at that scene where they talked about it and you can see there is definitely some discomfort about the topic. I wonder if that is the source of the fued with Kelley & Jay? Maybe Kelley was working for them in some way.
3. They both really went off the rails in 2016 and I hope they will tell us the full truth soon. PPD, drugs, unmedicated ADHD and big life changes combined are a recipe for disaster....it should be no surprise this happened.

[just_me]

They are a hot mess. I'm sure Katie's parents are just thrilled they paid all that money for Katie to get a degree she doesn't use because being an "influencer" pays more money. How about this princess; How about you let Cullen be the stay at home parent who goes on the field trips and stays home with sick kids and you work outside the home as well as doing the whole "influencer" thing until you get your debt paid off. Then you can go back to being an "influencer" and live your life of laziness I mean to help all those poor lost souls on the internet. (Which sidenote: I'm sure most of us watching do so just for the whole trainwreck aspect)

This 100%. There are lots of people on Youtube who run successful channels AND work a full-time job outside of the home. I recently started watching a woman's channel who is an anesthesiologist, she works 5 days a week at a hospital and has a husband and a 2-year-old. She does only have about 130,000 subscribers, but she uploads twice a week. She's definitely not doing Youtube for the money though. Then there's Dr. Mike, who uploads at least once a week and has almost 5 million subscribers. Katie, having her degree in whatever, definitely could have found a way to incorporate that into videos, but instead just ignored her degree and counted on being a hot mess to pay the bills.

[rosie_dalia]

That car is a money pit. Their monthly payments are $929. $929 x 72 mo = $66,888. $66,888 + the value of the trade in + their down payment....holy cow they really got screwed when they bought the suburban.


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I literally GASPED when she said that was their car monthly payment! WTF were they thinking???!

They "maybe" needed a bigger car, but they didn't need a new Suburban.

This video makes me think they are just REALLY dumb.

[Todays drama]

With all their debt, i don't believe they would qualify for a mortgage on a new house. Once this one sells, they probably will have no choice but to rent.

[rosie_dalia]

Sorry to post again, but having some sort of "tragedy" in your life doesn't mean getting into HUGE amounts of debt.

They play the BLAME GAME way too much.

Every single person on Earth has had a tragedy, but not everyone goes and buys a mansion and cars they can't afford because of it.

FFS, they need to GROW UP! (And get jobs!)

I blame BOTH of them for this mess.

[GigglyMint]

It’s really a no win situation for them. For years it was “how are they spending this much? They have to be in debt.” And now that they’re admitting it it’s “that’s so dumb, who would do that?” Well, that’s how a lot of people get into debt. Dumb decisions. It remains to be seen what they’ll do to fix the problem but they’re trying to sell the house and it sounded like if they could cover the remainder of the loan, they’d sell the suburban. It’s a start.

[Todays drama]

It’s really a no win situation for them. For years it was “how are they spending this much? They have to be in debt.” And now that they’re admitting it it’s “that’s so dumb, who would do that?” Well, that’s how a lot of people get into debt. Dumb decisions. It remains to be seen what they’ll do to fix the problem but they’re trying to sell the house and it sounded like if they could cover the remainder of the loan, they’d sell the suburban. It’s a start.

Cullen said they were going to sell the Suburban and the golf cart. I think the biggest step towards fixing their finances was admitting they made huge mistakes, realizing where mistakes were made, setting up a budget and going back to the Dave Ramsey program. I wish them luck.

[lmmomSD]

But they aren't even really "going back to Dave Ramsey", because if they were, one or both of them would be out looking for a JOB, not clinging desperately to a career as an "influencer" _only_. They act as though it's an either/or proposition-- either do YouTube or have a traditional job, but as has been said several times, they could do both. They didn't even put a lot of effort into this last video. If they are going to rely on YT alone for income, shouldn't they be working harder at it?

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[FakingIt_MakingIt]

It’s really a no win situation for them. For years it was “how are they spending this much? They have to be in debt.” And now that they’re admitting it it’s “that’s so dumb, who would do that?” Well, that’s how a lot of people get into debt. Dumb decisions. It remains to be seen what they’ll do to fix the problem but they’re trying to sell the house and it sounded like if they could cover the remainder of the loan, they’d sell the suburban. It’s a start.

For me it’s not “they’re so dumb, who would do that” it’s “they’re so dumb, who wouldn’t take advantage of the SM flexibility AND work a traditional job to get out of this” “they’re so dumb, who continues to place the blame on anyone but herself”.
It’s not a start really, because although selling the house and the SUV will help the immediate financial problems the mindset is still the issue and they’re likely to end up back here again. Because even when they claimed to have followed Dave Ramsay they really didn’t, and they’re certainly not now.

[rosie_dalia]

Selling the house and the car will not likely help them with their debt. The house sale (when it happens) might just break even with their purchase of the house. Selling a car is almost always a loss, but they won't have that MASSIVE car payment.

I guess a lot of these YTers thought they were set for life when the income was $100K+ a month and lots of brand deals.

The should have put it all in savings!

[apmfacebook93]

Selling the house and the car will not likely help them with their debt. The house sale (when it happens) might just break even with their purchase of the house. Selling a car is almost always a loss, but they won't have that MASSIVE car payment.

I guess a lot of these YTers thought they were set for life when the income was $100K+ a month and lots of brand deals.

The should have put it all in savings!

Selling a car is usually a loss from the purchase price… But not what you owe on it. I think they can make a little money off their car.

Selling their house to even just break even will still eliminate $600,000 from their debt… So that would help. But also, I think with their down payment plus all the monthly payments they’ve made so far they will get a little bit of money in the bank.


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[GigglyMint]

Selling the house and the car will not likely help them with their debt. The house sale (when it happens) might just break even with their purchase of the house. Selling a car is almost always a loss, but they won't have that MASSIVE car payment.

I guess a lot of these YTers thought they were set for life when the income was $100K+ a month and lots of brand deals.

The should have put it all in savings!

Of course it would help. As long as the loans are covered, that’s thousands of dollars a month they’ll free up.

[lmmomSD]

Selling the house and the car will not likely help them with their debt. The house sale (when it happens) might just break even with their purchase of the house. Selling a car is almost always a loss, but they won't have that MASSIVE car payment.

I guess a lot of these YTers thought they were set for life when the income was $100K+ a month and lots of brand deals.

The should have put it all in savings!

Of course it would help. As long as the loans are covered, that’s thousands of dollars a month they’ll free up.

But they will still need a place to live, assuming they don't move in with Doc and Dolly, so it won't likely actually "free up thousand of dollars a month". They may end up with a lower rent, but they will still have to pay out _something_.

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