Im trying despite myself to get in better financial position


so that in the future my wife and I can buy a home and live comfortably, we are both 40, no kids.
I work at a very low paying restaurant job, and am taking college classes paid for by grants. Sometimes I have a tendency to think I can handle more than what I really can.
My most recent error was assuming I could manage the payments to a mail order course I took a few years ago, I still owe them about $1,042. THey have handed it over to a collection agency which refuses to take less than payments of $100, though we did send them a check, which they returned. It was for $1, which is what my wife thought we could pay them, she’s better with money so I gave the financial stuff over to her.
I’m only making about $10,000, wit a lousy credit record, groceries, and other bills I havent been able to pay, classes end in May, then I plan on getting a second job. Till then not sure what to do with this collection agency and their 18% interest.
My wife and I are just trying to start the “babysteps” and still need the $1,000 emergency fund, which we were hoping to get before starting to pay them or anyone else.
Im getting old and very tired of surviving check to check, but find changing my bad financial habits difficult.
Not including a student loan currently in deferment, my total debt really comes to about $8,000. I need to wipe it out soon as possible, but how do you deal with a collection agency that refuses to take what you can afford to send?