Rebecca from California

I have ESPP along with other investments that I place, and then we have college funds for our kids. And the issue is, so my wife manages all the month-to-month daily checking operations, and she wants to have the six-month savings in a savings account tied to the checking account.

And I keep explaining to her and showing her that, hey, we've got all this money elsewhere, money market funds and stocks.

The money market has about $100,000 in there.

Oh yeah, definitely.

Uh, no, cause we, we do use the, uh, the money app and that's working out well. She just wants to have access to it. Yeah.

Yes. Right.

That's right.

Yeah.

Hello, how are you?

Yes, so my father bought a car years ago. This is a Mercedes. He's a retired surgeon, and he now works as a surgical assistant. you know Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

I think it would, but the question is, you know, the follow-up question to that is, do we stop the baby steps four, five, and six?

Oh, I see.

That's right, yeah. And, you know, we've had issues come up. Like last year in the rental, we had a flood that we had to deal with. And we went into, you know, we went into one of the accounts. We pulled the money out. We paid cash. There was no issue. Yeah, because it's accessible.

So you don't think we should slow down on paying off the mortgage early?

Yeah, it is. It's because she wants, you know, in the regular checking savings account that are, you know, in the day-to-day operations, she wants to see the savings account be the six months. She is wrong about that. If we want to do that, then we got to stop, you know, we got to stop on the, you know, the extra mortgage payments we're making. We got to stop on the 401k payment.

We got to, you know, we've got to stop those other baby steps to rebuild that, that six month savings account.

tough to walk through all right uh do you want to try to take another call right quick let's try it caleb in norfolk virginia what's going on caleb hey thank you for taking my call merry christmas merry christmas how can we help um so my question is regarding life insurance i'm currently in the military but i'm getting out in about three months um i have a life insurance through the military.

It's called super service members, group life insurance. I pay about $31 a month for a $500,000 policy. Uh, my question is whenever I get out, I have the option for a limited time really to roll that over into what's called veterans group life insurance, um, which is about $35 a month. Um, and that will, you know, increase about every five years. Um, I'm 26 now I have no debt, but,

Really, I'm just unsure because I don't have a wife or children yet. I don't really have anybody relying on my wage but me. So I'm just kind of looking for some guidance here.

You want it in a place. We feel really blessed because we don't argue about this. This is just like you never argue about money. We don't have to.

Well, I hope you can help. That's my question. Is there any hope for our situation? We have been married 19 years. We're in our 50s. We have one special needs son. We're both self-employed. I have a business from home, which has been very helpful with our son and being home when he gets off the bus, all that kind of stuff. My husband has always controlled 99% of the finances.

What's the best approach, you know?

Um, I don't have, my name is not on the bank account. My name, I don't have a login. Um, our, his business and our home bills are combined on the same account, which I know probably should not be that way. Um, we have a home loan of about two 43. It's sold. It might be worth 700,000. Um, the big problem I came to realize is that our credit cards are at 209,000. We have a car loan for 21.

And some of the credit cards are his business only. But as far as I'm aware, you know, in certain states, your debt is your debt and half and half debt and assets. So I guess I'm trying to figure out. I can't get through to him. He just blows up when I try to say no. Hey, let's try a budget. Hey, here's all the credit cards on an Excel spreadsheet that shows all the percentages.

Like it's just kind of banging my head on a wall and I don't know how to protect myself, how to protect my son. The only good news is that I do have a 401k that is in my name. from before we were married. And then we also have, um, I have a little bit of savings and then he does have, um, a life insurance policy.

God forbid anything happens, but, um, he's, he's not well mentally and he's been, you know, threatening a lot of things. And, um, I thought I should try and get some advice.

At this point? I, I really can't right now. I can't right now. My business is here on the property. And if I would leave, the other thing is I would be taking my autistic child away from the only home he knows that he's had his whole life, his dogs, his everything that's comfort to him.

I think I think he knows that that he's. in the toilet. I think he realizes, I mean, he's paying the minimums on the credit cards. That's it.

It's going in with everything else. We, I mean, I don't make much last year. He had it written down here last year.

I don't. I think he's pretty OCD about keeping track of stuff. Ross here's gross income was $233,000, but then by the time we got to the bottom of the income, the income is $26,000. Once he takes off depreciation, vehicles, all that kind of stuff.

He's an electrical contractor.

Technically, yeah. And it's just him. He doesn't have employees.

Okay, now one quick question. Now, do you pay off your primary first or your rentals first?

No. And of that 209, 40K is just for his business. But of course, I'm pretty sure I'm liable for that as well.

I mean, there's increased... Um, alcohol, um, just, um, you can tell there's depression upset. We'll even mention the debt. We'll mention my wife told me that we're this much in debt and, you know, she must be full of it. I don't believe it. And he'll say this in front of his best friends. And it's like, oh my God, now he's like sharing it with folks. But I think he's embarrassed.

Yeah, I do too.

Perfect.

Thank you so much.

Oh, he did not tell me. I discovered it. I started going through his files and I made like the biggest Excel spreadsheet you'd ever want to see in your life. And I just, you know, tried talking to him and, you know, we were okay there for a while. Oh, I'm paying it down. I'm paying it down. And then, you know, once a year, I'd pull these files again and get everything sorted.

And I did it again this year. And I said, this is, he's to the point now where everything is minimum just

Yes.

A few, a few friends, close friends and family members.

Um, and they know him and they know he's not, he's not right. He's, you know, I married a 37 year old man who was fed in his ways. And unfortunately he is a collector. He, And that's where the money has gone. He collects things. And to the point I said, can we sell some stuff?

No. No, it's just enormous collections of things that are really our only hope. These assets that could help us get out from under this, but he's not willing to touch. I'm not selling any of my stuff, he says. Like, oh, that's great. Because years ago he did. He would sell a stamp collection or he would sell a mother collection.

All right. Thanks for taking my call. The problem that we're having is my wife and I can't decide. if we're in baby steps three, four, five, or six. And we seem to be moving in and out of those baby steps.

In credit cards?

Well, we make about $320,000 as our household income. We've got two mortgages, one on our primary home with about $220,000 left to pay on it. Then we have a rental property that we break even on every month, and we've got about $300,000 left on that. We both save for our retirement, and we max that out every year to get the matching contributions.

Yes, for sure.

Hi, thank you so much for taking my call today. So I am in Baby Steps 7, and thanks to your program, I'm a Baby Steps millionaire.

And I'm about to... Thank you. What's your net worth? And I'm about to... Well, depending on the market, about 2 million.

Yeah.

I haven't looked in about six weeks.

It has a lot of ground to gain.

No, I'm not looking. I've got... Eight to 13 more years of work. Outstanding. Good for you. So the reason I'm calling today is that I'm about to purchase a new vehicle. Congrats. I'm allowed to do as a millionaire. Yes, you are. And I'm going to write a check for it. And, of course, now they're offering me a prepaid service package.

And I know how we feel about extended warranty, and I definitely would not get one of those. But then when they talked about this prepaid service package, I thought, hmm. Of course, my antenna goes up, and I immediately think this is how they're going to try to make their money off of me. But I just wanted to get your take on that.

Yeah, that's why I told her to flex. With your last caller and the prepaid life insurance, I thought, hmm, that's probably a lot like a prepaid service plan.

Whoa.

I'm sorry.

Well, we had two houses when we met. We're a blended family. So we sold his house when we got married, and then we paid off what's now our house.

It's worth about $390.

It hurts some feelings, yeah. Oh, I'm sorry.

Amazing.

Wow.

Talk about the monkey off your back.

Well, so I had found you years ago when I was living with my two kids and my parents going through a difficult divorce and it changed everything for me. I got debt free on my own, living with my parents, saved an emergency fund, saved to buy a house, moved out into my very first house with my two kids as a single mom shortly after I met this good looking fellow.

And on one of our first times talking together, he told me about his negative equity mobile, and it was kind of a turnoff. But we discovered that we were both on the same page. We were just in different parts of the journey at that point. So he talked the talk.

I've listened to your show so much, and I've heard people in similar situations, and I've heard you giving a lot of wisdom into those situations. I knew that we could do it together a lot faster than either one of us could do it

alone plus the emotional support of it so i stopped my saving started piling up some cash when we got engaged and the day after the wedding made a big payment on his all of his debt and we just tackled it together from there wow very cool very cool so uh you're dating and she starts talking to you about this uh this negative equity thing's not cool um i kind of like you but that ain't cool what were you what were you thinking

So when you're dating as adults with kids, there's not really the time to waste time like you do when you're younger. We got right to the point with a lot of our questions. didn't really lie or cover anything up. It was like, how do you feel about this? How do you feel about that? Okay, we're a mutual connection here. And finances was a big part of that from early on.

I got a bonus. I got a promotion.

Yeah, my company went through a reorganization, and they required that we get our grant equity paid out in a small portion of it as they were going through that. So right after we got married and we made this first payment on his debt, boom, we got another windfall payout that we weren't expecting or asking for. So money just kept falling.

It's incredible. We were talking to the Uber driver on the way here, and he couldn't believe it. But he was very curious. You don't understand it until you feel it or hear it from someone else. So hopefully we sparked some seeds of change there, too.

The budget. It's a big one. And being very intentional and on the same page with it. We laugh because before the paychecks were even fully in our account while they were still pending, we had already moved money towards the debt, made payments on it. Like, let's not even stop and think about it. We're being very intentional. The money is going here. We already made a plan.

We just have to execute it before we get the chance to... Oh, well, we could do this other thing with it. No, just go ahead and do the plan.

I'm a nurse and a director of patient services at a digital health care company.

Just recruited him to our company, too.

All right.

California. Corona, California.

uh three years three years and what kind of money were you making during that time um joint 350 000. okay oh my gosh you guys okay that still doesn't cover i mean y'all we had savings okay so part of the process was uh letting go of the savings i was more of the hoarder because i came from really humble beginnings and so i felt like having a large safety net

made me feel warm and fuzzy in that security blanket. So when Tommy got me into the Financial Peace University, it was kind of like he had to explain, babe, this is crazy what we're paying in interest on the mortgage. Yeah.

Oh, he came in hot. And I was like, what? I was like, you are crazy. What are you talking about? Like everyone has a mortgage. Like this is no big deal. But as we went through Financial Peace University, I was like, oh, this kind of makes sense. Like, okay, all right. I think we could do this. But it was kind of more of getting me on board because it was crazy.

I haven't known anyone to pay off their house. So to me, it was crazy.

Well, for me, it's, you know, it's a different lifestyle. We just, we do really well and we're very blessed. But at the same time, we still have those same traditional feelings. Like we both wear socks with holes in them, you know, like we don't want. We're both the savers.

And so it's crazy to have so much money and income and be able to pay off the house when we're still like, you know, the saver type. It's almost like your emotions haven't caught up to the math. No, no. To sit in the reality of what it's really reality.

We just paid off the house last month because we knew he booked this money in marriage and we were like, we gotta pay it off and do this death rate scheme. And so it hasn't even sunk in yet. Like this is still so fresh for us that it's like, this is crazy.

Yeah, no. We had one, yeah. We got to skip one house payment by the time of coming here. So it was like, what?

Yeah, I think for me, I was always like, oh no, we need the mortgage to have the tax write-off, right? And he's like, what are you talking about? And then to get to this side, it's like, oh, we don't have the mortgage anymore. This is, I mean, the way I would describe it is just mind blown. And especially because I don't know anyone else who's paid off the house. And so for us, it's totally...

We're the weirdos, like he said.

um no big purchases we want to retire early so we keep we're just both savers so like why not fuel off of that and build towards early retirement will you make a commitment to me and rachel yes before you leave nashville yes y'all here for the money marriage weekend before you leave i like to think of nashville as the sock and underwear capital of america we all go get some socks

How much did you involve the kids in this? So they were involved in the sense of like saving, like, hey, we need to cut back on eating out this, you know, that really builds up over time. And they're like, but why? And but we did keep this kind of private for ourselves. Yeah, we wanted to do the journey. And when they're old enough, we'll explain it to them and the importance of it.

But we didn't really get them too deep involved. Yes.

I work in retail merchandising.

I know for me, I know paying off the house was a big thing for Josh. Like, let's try to pay it off early. For me, I came into it, I like to say I got married and got into debt for the first time ever because he had bought the house just a couple months before we got married. But it was able to see just the weight and the stress that was taken off of Josh once the house was paid off.

And now we just have a lot more freedom as a result of that.

Buy a car.

We need something a little bit more reliable.

I have no idea. I am not a car person, so I'm leaving that up to him. I just want a better car.

It feels amazing.

Hi, guys. Hey. I have a question regarding cost of living raises compared to inflation. I personally enjoy giving my customers the cheapest service available yet to keep up with inflation. We have to give raises. How do those two things mesh together? And is there anything we can do to battle the inflation as a business owner?

Yep. Yeah.

I'm well, thank you so much. Thanks for taking my call. Sure, what's up? So I'm calling. I've listened to the show off and on for years, but I got really serious about six months ago. And so I'm going to admit at the outstart that I know I've messed up. But... I have about $100,000 of debt with my ex-husband. I'm currently married. My current husband and I make good money.

Because this debt felt so overwhelming, I kind of shoved it to the side. We paid off all of our other debts.

So my former husband owned a company. Tax issues got complicated. Life was really overwhelming. He didn't want to deal with it. I didn't know how to deal with it. So we just didn't file seven years of taxes. Yikes. Yeah. So when we got divorced. Wait a minute.

I did. I did.

No. Nope.

So when we were getting divorced, we actually hired a CPA, which is what we should have done in the first place. And they went through, filed all of our taxes, and let us know what we owed as well as initially interest and penalties.

The judge required it, unfortunately. Interesting. I know.

So because the judge basically said, well, you benefited from the income while you were married. So you are both jointly and severally liable and you have to file together. It was very, very frustrating.

Through the divorce, he is obligated to pay 60%, and I'm obligated to pay 40%. And that's kind of part of the question is, should I just try to pay the $40,000? No, he's not.

Correct. The IRS will not acknowledge that. Exactly. They don't have to. If I pay the $100,000, I can take him back to court and sue him for that portion.

Or... i know and honestly i it wasn't until i called a smart investor pro because i started saving for a house and i had my emergency fund i was saving for a house and um your smart investor pro was like no no girl you got to go back to step two you have to deal with this yes you got to deal with it so how much money do you have laying around So I have $55,000.

Part of that was money that I got from my son passing away, and part of that is money we saved.

Hey, how are you guys? Sure, what's up? Hey, so I have a bit of a problem. I never thought this was going to happen. So in 2018, my father passed away, and he left me and my brother a 401k plan. Fast forward five years, I got a check in the mail this morning for about $245,000. The original account balance was about $300,000.

And what's happening is they gave me the check, and I have to pay the IRS that $55,000 difference from the $300,000 of the $245,000. I called them and asked them if they could roll it over, and they said once they issued the check, there's nothing that can be done. Who told them to issue the check? Not me. Apparently, the company my father worked for, I didn't read.

Yeah, they have a five-year plan, I guess, for the death benefit that if it's not rolled over to something else within five years, they must close the account and just issue a check-out. It was super confusing.

The way they explained it to me, I was on the phone with them for an hour and a half this morning with my 401k company, and they pretty much said once we issue the check, there's nothing that can be done. There was no workaround. Yeah, there is. That's what I'm saying.

No, so the way it worked is my account balance was $300,000. It started at like $215,000, and over the years I added up to $300,000. They issued me a check for $245,000. They already took the money out and sent it to the IRS and issued me the difference.

Because the 401k plan my father was invested in had really good options. All of those same options exist in the open market. Yeah, and I have my own personal investment accounts, and I do it with that as well. You know, don't rock the boat if the boat shouldn't be rocked. So the way I figured is the 401k plan was perfectly fine. I kept it in there just because the investment options were fine.

It was just a retirement account. I was treating it like a retirement account. I wasn't going to touch it until I was 65. I'm 30 now. What do you like? I make... I'm a truck driver, so I make about $110,000 a year, and I also own a small business that I make about the same.

I didn't know about that.

It's going to cost you $20,000, $30,000 that you don't have. It cost me two years.

of gains because of this no way i mean it's like i never thought i would be upset to get a huge check in the mail but i did and well i'm upset because i should have had it rolled over it should have been huger he should have called me yeah all right so here's what i'm going to suggest you do and i don't think it'll work but it's the only thing i can think of

And they said they notified me, but I... Oh, wait a minute.

Once a week, I checked my accounts. They said they did, but I never got any notification. So you've never seen evidence of them?

Okay, good idea.

$55,000 they took out.

No, when I got my experiment, like the summary of what my original account balance was $300,000.

Oh, so I'm going to have to pay another $15,000.

Well, there's about, he hasn't paid income taxes in three years.

Um, there's about 80,000 in credit card debt with cards. I didn't know existed. Um, there's a $550,000 mortgage on his office building that I'm, I was a personal guarantor on. And you didn't know about it? I signed it. It's my signature, but I don't remember doing that. Like I said, I feel like an idiot because I've trusted them.

Hi. So the reason for my call is I got two notices of being served in small claims court over two different credit cards, it looks like. And so I went and I looked at my credit report, you know, because you always hear, you know, who really owns this stuff. And it looks like it's on there a couple of different times under a couple of different names.

And so I'm just kind of a little confused of what to do.

Yeah, yeah, yeah. Like this one, I don't know if I can say who's actually the person suing me.

I'm fairly sure that they aren't different debts.

Yeah, yeah, because they're kind of... Because according to the paperwork that I got, I haven't paid these since July and August of 22.

I don't think it's fraudulent. Um, but I'm not sure. You know what? I'm going to say no. They, they, they are probably true to me. How much? Okay.

Um, you know what? I just don't want to assume because I mean, there, I don't have a whole lot of I guess it would be considered consumer debt on my, on, on my account. Okay. And it's probably, you know, five to $8,000 in total. Okay. Well, how much are these car payments and the house was doing loans and stuff?

How much is that Terry? Combined because it's the same company suing me, I guess for two different credit card lines. It's only $1,800. Okay. My guy.

Yeah, I mean, we know now what we spend our money on because, you know, we went out and signed up for that every dollar thing that you all have.

Yeah. And so and so I went and I looked at because I haven't it's not like I've gotten any notices lately like, hey, you owe this bill or whatever. Uh huh. And so I like I like.

No.

Well, I'm assuming all. I mean, our taxes are joint. The credit card, some say they're from his business, but others say, I just started opening the mail recently and I'm seeing this. The only card I was aware of is maxed out at $30,000 and the rest are other ones.

I did call the court and they said, yeah, because there's a due date. Like I have to respond by, cause there's no like actual court date that's been set. Sweet. Okay. Want my response to this? Yeah. These two lawsuits. I was like, okay, so it's real. And, and, And so it's yeah. So it's step by step. Hey, this is what you've got to do. You know, I'm I'm not going to go hire an attorney.

No, and don't.

Or can you get enough to settle? No, because, I mean, we've got about $1,000 in our emergency fund. I've got about $800 that I could pull out of an investment account.

Mm-hmm. Uh, yeah, I mean, I mean, yeah, I could probably do that. I have, you know, cause we've been talking about that. Even our kids have been saying, Hey, are we going to do a yard sale this summer?

Yeah, I'm sure I do. It's just, you know, back in 2022, 23, I had a bunch of medical issues and so I wasn't working and so bills piled up. So this is probably true. Yeah.

Okay, well, in 2019, my father passed away and left me a significant amount of money, and he immediately started asking me for money to help with his businesses and said he'd pay me back, and I've totaled all that up, and it's about $500,000. OK, I'm counting that in the debt that he and when he was borrowing that money.

Well, he would he would say taxes or payroll or this bill or that bill.

Right, right.

Hi, y'all. I just want to say how much my boyfriend and I love this show. It's such a pleasure to talk to y'all. I'm doing great. How are y'all?

Okay, so my best friend has itinerary for her bachelorette party, but it's outside of my budget, and I don't know how to tell her that.

So she's an engineer. She makes big figures, so every activity is at least $150. What do you estimate the total trip going to cost you? Um, the total, I've already paid for the flight and I already bought the hotel and I didn't want to spend any more than I spent on the hotel flight. So I have about $400 for a three day weekend.

Are you in the wedding, presumably? So it's just going to be her siblings in the wedding.

I'm not going to be in the wedding.

No, just the siblings are the only ones that are going to be in the wedding.

They were about $350 each, $350 for the hotel, $350 for the flight. Girl!

Yes, I just wanted to show up for her. Yes, I just wanted to show up for her. Can you hear me? Yeah, I can.

And I was going to suggest it, but I don't know if that's

Honestly, if I was to do everything on itinerary, I'll be spending about $650. Okay, you have $400 to spend.

Yeah, I did not.

Approximately. I'm anticipating, and my lawyer thinks we'll end up finding more, but yeah. Are there any assets?

So it's basically like the biggest things on the list are just dinner and brunch. Okay, so I feel like you can... Everything on the menu is like maybe... Minimum $40? Minimum.

Right.

Okay, so our house is paid for. We sold a house, and we cleared. We rolled part of it over into the new house, so it's paid for.

I could side hustle. Side hustle the money.

I think it's probably worth maybe $2 million. Okay.

Yeah. Any other assets? Well, it was all of his business holdings, but I think they're all gone from what I can tell. But the problem is he won't tell me anything. He will not give me any information.

Hi, thanks for taking my call. Um, so I have been helping my baby sister through the baby steps and she's actually further than my husband and I, she's just about to finish step three and move on to step four. She doesn't need to do five. She's only 20. She's not married. She doesn't have kids. And so I, uh, just need some guidance on like how to help her with step four and six.

I know that she needs like a Roth IRA kind of thing, her investments because she's self-employed as a tattoo artist. So she doesn't have like, automatic retirement going in. And she's very like, tell me what to do with my money and I'm going to do it because I helped her get to where she is now living on her own and that kind of stuff.

I think I have like... an intermediate level grasp, which is why I'm not feeling super confident because my husband and I are still in baby step two and she is progressing further. And I haven't like, we're focused on baby step two and she's getting further down the line. I'm like, Oh no, she's going to need help again soon.

Um, like in the next couple of months, she'll have her six months saved up. And with the investments and stuff, like you've not actually done it. I've not actually done it. And I know that she's very open with me about her finances. I know that she can fund the 15% and have money left over to save for a down payment on a home or if she wants to upgrade her car or whatever. She's 20. Great, great.

Yeah.

Right. Yes. Yes. And she's very I did like sit down and show her like the investment calculator on the Randy side. Like this is for your future. This is like kind of what you know, like, is this something you want to do? Do you want to set yourself up in the future? You know, and stuff like that. And she's very like just watching our parents having gone through. They went through the baby steps.

27.

They became millionaires. And now they lost it all in their divorce. And she's like, and they have to work past retirement. Like, that's how bad it is. And so she's looking at that and saying, I don't. I don't want to do that, you know, which is so great at age 20. I mean, my goodness, like she's not even fully brain developed yet.

I just got a job last week.

I'm an attorney.

Yeah, thanks so much for taking my call. I kind of feel like I'm playing financial pin the tail on the donkey. I'm not really sure what I'm supposed to be doing here. My husband recently passed away, I'm going to say about eight months or so ago, and he Thank you. It was rather unexpected. No life insurance. Yes, it had an annuity of quite literally $7,500. And our boys are 13 and 17.

So one of them I was getting, it was a health issue and we're about 18 years apart. And so it was a lot going on there health wise for him. So one of my sons will be getting Social Security about $2,000 a month for the next four years, and the other son will be getting the same $2,000 a month for maybe another 12 months.

Appellate. So I don't know anything about this financial stuff. I'm learning, believe me. I'll never be in this position again.

And I make about $4,600 after taxes, after investing, after my health, my dental, all that. I do have term life at $500,000. which is about, you know, 10 to eight times actually my salary. So I have investment about 300,000, you know, so that I'm kind of secure there. But what's happened now is I have about 97,000 in a HELOC and I have about 94,000 in credit cards.

So we have a primary home, and I also have an investment rental that I have.

The rental I bought for $175,000. Right now it's at $2,875,000. So that tells you it's $2,875,000. And right now the mortgage on it is $113,000. But what could you sell it for?

And we depreciated the basis on it to about $100,000. I'm sorry, you broke up.

$175,000.

I bought it for $175,000. I owe $113,000.

$130. Great. Okay, great.

Hi, I find myself in a lot of debt because my husband has, we've been married 27 years. Sorry, I'm rambling already. We've been married 27 years and I've always allowed him to handle the finances. I quit my job, stayed home with our four children. and have just trusted him with the finances.

Yes, this is more of a question about how versus what I was on baby step five, about 15 years ago and went through some issues and got a divorce and I'm single mama now have a little 13 year old and. I'm not doing terrible, but I don't love the trajectory I'm on, and I need to get back into budgeting.

And I'm wondering that how do I get back to that place where I was, where I was budgeting every month?

I was, and I think a lot of it has to do with being in burnout because I – I just came off of working six months of a lot of overtime.

Yeah, I think it's I'm not sure. I know part of it is the burnout and coming off of the overtime and now I'm going into a time when I won't be working as much overtime and hopefully recover from the burnout.

I do. I did get, yeah, I had a car that I was going to keep. until the wheel fell off it was a beautiful old camry and i fortunately got hit by a car so i did have to it was totaled oh no so i have a loan for a car um a used car and i think it's about seven thousand something okay i was planning on paying that off with a bonus i'm getting in august

And then I do have a, I have a credit card and I usually, I've been paying off their credit card every month, but this is the first month that I wasn't able to pay it off. And I owe a little under a thousand. So I, from what I know, from what I learned before, I've never lost the principles. Like they're there and I don't want this car debt. I never planned on getting a new car, a newer car. Okay.

or replacement vehicle. But I see now that I didn't pay off this month, this balance for the first time. And that really scares me.

Yeah, I know what to do. I just I've done it before, so I know what to do. Here's what I'm hearing.

I'm 46.

Yeah.

So what needs to change? Yeah, my daughter too. I don't want her thinking like, you know, there's just an infinite amount of money. We need to live with our needs. So guess what?

And in the last couple of years, I've just slowly been uncovering a lot of dishonesty and finally ended up filing for divorce after I found out most of it. I'm still not sure I know everything, but I think there is a close to a million dollars in debt right now. And I'm afraid that I'm going to be responsible for half of it. If in worst case scenario, hopefully I won't be on the, on the hook.

Hey, guys. How are you? Thanks for having me on the show.

So my wife and I are having a debate. We're on baby steps four, five, and six, and we're having a debate as to whether to pay our house off or to buy a new vehicle.

We want to replace her car. It's a smaller SUV, and it gets a little crammed with the baby seat in there, and we may be expecting a second one. So she would like to upgrade in vehicle so we're not crammed into her car.

Well, we already have one and we would like that, you know, we may have maybe having a second one soon. So just, just comfort, you know? Okay. Yeah. It would be in the price range of like 50,000, 50,000. Yeah. 50 to 60,000. Um, we are on baby steps four or five and six. We are baby steps millionaires.

Uh, we make, We made $290,000 this year and we're on track to make about $315,000 this year. Incredible.

What's left on the mortgage? The mortgage is $186,000 and we would be paying cash from a brokerage account that's non-retirement that we've been saving up for land. But we put a kibosh on that idea since we may be having a second baby now.

About $80,000. Okay.

Correct. So my thought was I'm more of the saver and my wife's a little bit more of the spender. My thought was if we took the entire brokerage account, put it on the house, we could pay it off in about a year and a half and then take the mortgage payment and everything else and save up for a car.

Yes, we have. And the reason why we're going through all this is because with the third kid, we decided I wasn't going back to work. And so we're going from everyone being on my health insurance plan to now all of us being on my husband's.

I 100% agree. I'm trying to be a good husband and do right by my wife because I am the money nerd. And I know this is something she wants.

I hear you.

Well, she is. We just haven't told anyone yet. Oh, we're the first.

I think that's a great plan. Yeah, that's a great option.

She acknowledges that it is a complete want. Um, and like we're, we're both, um, I mean, I'm more of the saver, but we're both pretty frugal. And so when she wants something, it's really not too often. And so I'm just trying to make that happen for her.

$16,000.

It would be certified.

Okay. And how much do you have in the emergency fund? We currently have $17,000, but with me not going back to work, we're about to up it to $25,000.

Me too.

Hey, thank you so much for having me. I appreciate it. Absolutely. How can we help? Well, I got started with you guys late. I am debt free now with the exception of my mortgage. Oh, great. But I didn't start investing until about age 55. I'm 58 and a half now. I fully maxed out my Roth as much as I can. I have another mutual fund investment that I put my 15% in every month.

But what I have is years ago, I got into an annuity and I had about $27,000 sitting there. I stopped contributing to that and started contributing more to my mutuals and the Roth and everything. My question is, if I pull it out early, so basically a year early, there's a 10% penalty on that.

Would it be valuable for me to just pull that out now, roll that into my mutual funds, or should I wait for a year and then pull it out when I hit that 59 and a half?

I have about $27,000 in there, so it's about $2,700.

So my question is surrounding dating and finances. I'm kind of looking for advice you have on dating debt and things to think about for the future. I have a boyfriend who's a little older than me. He has a really stable job. He lives down here in San Diego, and we've been talking about moving forward in our relationship. Everything is really good. All our values align. Our faith aligns.

There's really good companionship, but it's come out that he has about 70K in debt. And just the background that I come from, I'm not sure how comfortable I am committing to taking on that debt with some of the habits I've seen. He wants to be in a better place with his finances, but he does like to shop and go out and do a lot of things.

And he's put about four years to be able to pay off that debt, but I feel like it could maybe be a little sooner. I'm not sure if I have the full picture, so I'm wondering what kind of questions would be good to bring into a conversation, what things to look for, what actions need to be taken, or yeah, any advice you guys have.

It's nothing. I'm not putting anything into it or anything at all. It's just sitting there.

No, it was more talking about the subject. He had told me earlier in our dating relationship and just the timing of it, I didn't pry for numbers or anything. So now that we've been talking a little more seriously, I'm trying for numbers. And it's around 50K of student loans and then about 20 to 30 in car payment. Okay, okay.

I think that's what I'm trying to figure out. I come from a family that's all savers, so I feel like I haven't really experienced the opposite of that. I feel like I feel like it's a little bit sometimes like, Oh, that little instant gratification of, I just got this little knickknack, but then sometimes it's experiences he takes.

I mean, dating, he's taken me out to do some really fun things as well. So he has value on both of those things. And I'm just trying to figure out, Yeah, totally. Yeah, for sure.

Like a variable or a fixed? I got to be honest. I believe so. It's been sitting there. It's not earning anything at all.

Okay, yeah. I bought it up once, and it was not brushed off. I was like, oh, yeah, that would be cool. So maybe it's something I bring back up.

He makes about $140 a year.

No. He has two cars. His family history doesn't seem crazy great with money from what I've seen. Yeah. It's kind of like a little bit of living in excess and you don't really have the means to do so. Yes. Yeah. That's a good observation. He's just kind of doing what he sees and what he knows. Yeah. The second car, he's said in the past that it's something he could easily sell.

If he wanted to and not have to make the car payment.

Exactly. And one's paid off, one's not.

Hey, thanks, guys. This is such an honor. And you guys have been such a blessing to my wife and I as we got through Financial Peace University. So thank you so much.

Yeah, so here's our situation. So my brother and sister-in-law surprised us by opening a 529 for our newborn son. And at first, we were appreciative

But when we asked how it works, since we didn't really know much about the logistics of 529, they revealed to us that we can't contribute since the 529 is under their name and that we would have to ask for permission, their permission, for how the money is going to be later deployed.

That's kind of a part of the question that we're talking about today is, number one, just understanding 529, but also just more or less handling family logistics of this. Now, just to add context, I do work in a family business politically for my brother, right? So we're even now we are planning on changing jobs eventually.

Um, you know, I, I, I would probably, you know, I would love to retire at 65, but I'm also with the mindset that if I'm still doing good and enjoying what I do, I'm just going to keep going. So.

Now, of course, we're thinking that we're creating a situation where the 529 almost creates a financial dependency on them that might create future tensions down the road. So ultimately, we want to know your guys' thoughts about family members opening 529 for their relatives, in this case, their nephew, and what you think we should do. So

So, yeah, that's our contact.

Yeah, because we did have a conversation with them, first thanking them. And we did ask them if they were able to switch it over from their name into our name so that we would just take control from there on out, kind of like give the keys to the car to us.

Yeah, that's great. I'm working on, on, on building as much as I can. I don't, I mean, I'll have, I'll get a teacher pension as well. So that, that'll help. But, um, I want to work as long as I can to build it up as much as I can.

I understand. Now, one other aspect to this is should we have a mature conversation with them and decline the 529 offering now? Just because I don't want this thing to turn into a mess later where it grows up to maybe a good size. Which then they become resentful that they put in all this work and effort for their nephew. Right. Only to have the parents later. Well, here's the thing.

No, absolutely not. But I thank you guys for all your help because you've helped get me to this spot and I can't thank you enough.

Hey, thank you guys so much, man. I'm so excited to talk with you guys. Thank you.

Yeah. So I'm calling you guys today because I really need a little bit of guidance with, you know, this part of our lives. I've been married for seven years. We got a daughter. She's about five years old. And we were living as missionaries in South America. And unfortunately, we had to come off the field around July last year. And so we've been readjusting to life here in the States, which...

When we were gone and came back to the States, we were kind of blown away at some of the prices because they weren't the same as they were years ago. Right. Whenever we, whenever we decided that it was finally time to, you know, we got readjusted. We both got jobs. My wife makes about 31,000 a year. I'm making about a little embarrassed about it, but I'm making about 1600 to $1,800 a month.

And so the only thing, The debt that we have, including our vehicle right now, is under $15,000. And we did the every dollar budget as well. But the only hope I have of, I mean, right now, the only hope that I currently see if I stay at my current job, which is as a custodian, you know, in December, I'll have an opportunity to adjust all of our benefits.

And when I cancel everything out, I'll be receiving about, $580 extra a month. So we'll get around to the 22 to $2,400 a month for me. My wife will stay about 2,100 a month. And so the only other options I have right now is to sub as a substitute. And the only thing I've been doing extra so far is to, I've been trying my hand at door dashing and sometimes, you know,

That's not been the very best ideas, but I'm not really sure what to do because the only degrees I have are, you know, from my Bible college.

So we've got a master's in ministry, you know.

I'm 34 and my wife is 29. Okay, so great.

Right. So the thing I've always been excited about was when I was 15, man, that's for us, like God's been a big part of our lives and he saved me when I was 15. And the most exciting thing in the world was seeing missionaries come by our church. And I'm like, man, I answered that call to go. Well, when we had to come off through a lot of tears and stuff, like we couldn't go back.

And so I don't think right now that's an option, but I would love to be in ministry regardless of what we're making. But The only thing that I've ever done that I've enjoyed was putting what I've learned into other people. I guess that would be called mentoring. But I'm not really sure work-wise. what the answer to that would be. I'm sorry.

Right. Yeah. Yeah. Thank you for that. I'd love to take the assessment.

Um, so I know we're about the last time I looked at it about three weeks ago is the first time that I did it. And that's how I got connected with you guys. We're about $734 in the red. Okay. And I, so if we're bringing home about four, about 3,800 a month, then we're, we're in a hole about, I guess about $4,500 for more. We're renting right now.

Hi, happy to be on it. Love Smart Money Happy Hour. Thank you. Got your two favorite hosts then. You planned it right. It really is. My question is, should we get a high deductible, high premium health insurance plan or a traditional health insurance plan? My husband and I are on baby steps four, five, six, and we just had our third baby in November.

So the rent's 1375. And this was the cheapest thing we could find in our area.

Yeah.

So I've been looking for, you know, ever since July, and I've been trying to find that answer. The only things that we've got for entry-level work is about $1650 an hour, and right now we're getting about $1675. Um, because we, we put into benefits, unfortunately at the school and that won't change until next year when we can cancel those.

All the entry level work is about 1550 to 1650, unless you specialize or have a degree in something or have prior experience to it.

Sure. So when we went to it, we actually adjusted it to what would be the most ideal situation for us. And we completely cut out every extra spending that we were doing.

So that one is $275,000. We owe about $8,300 more on it. And I don't think we could even... That was another lesson learned, but I don't know that we could sell it for enough. You're underwater on it. Yeah, that was underwater. Yeah.

Other than that, we just have four credit cards. So since we started your budget, we paid off my lowest one, about 500 something. We paid half of my wife's lowest one after that. So we're doing the snowball.

Our two older kids have both had to have tubes in their ears twice. So that's not fun expense to have to pay. But other than that, we're mostly healthy.

Well, I will say I do live in a smaller town. I'm not in Detroit. But I just do Department of Natural Resources work.

I guess I just don't know what to do in the summer then. I know you don't because you haven't looked for it.

Hi George and Ken. Thank you so much for taking my call. Um, my question, a little bit of a background. Um, I started a business in 2023 and it took a little time to get it ramped up. So I didn't make that much in 2023. Um, so the taxes that I paid were relatively low. Um, but in 2024 I did much better.

Um, and I, as I was, uh, giving all my documents to my tax preparer, I said, Oh my gosh, I'm sick. I can just imagine how much I'm going to have to pay in taxes. is there anything I can do to reduce my tax bill? Um, I'm in real estate and I said, aside from purchasing properties, I'm not in that, um, in that mode yet.

Um, and he said that, um, I could, I have a Roth, a self directed Roth IRA, but that won't reduce my tax bill. Um, He said I could, uh, open a traditional IRA, a step, a simple IRA or self-directed 401k. But at this point, my only option is a traditional IRA, um, for 2024 tax benefits. Is it beneficial for somebody self-employed to open a traditional IRA for tax benefits?

Should I have an additional retirement account besides the self-directed Roth IRA for any, because my expenses for my business, my startup expenses, I had some more, but now my expenses are very minimal. So the amount of deductions that I have are very small. So the only thing that he said that could reduce is either purchasing real estate, which again, isn't my mode of operation.

Okay.

I'm through Marketplace. I was diagnosed with cancer four years ago, so my health insurance is astronomical.

I believe it's HMO, but based on my income, it's $600 a month, essentially.

Oh, so, um, for two years when I was healing cancer, I didn't work at all. So I was living off of credit cards. So, um, in 2023, I paid off about 10,000 and this past year I paid off the remaining 50,000 in credit cards. And I, well, I should feel great, right? But because my income is so unpredictable, it really took everything. Besides I had enough money.

I didn't know how much I was going to pay in taxes, but, um, so where are you at now? It's In terms of- Your debt. Debt. So no credit card. I do have about $17,000 remaining on a student loan, which I was hoping to tackle this year.

Okay. I thought you would say that, but I wanted confirmation.

Hi, I just had a question for you guys. Needed to know if my plan, I know nothing about really you guys, is just I'm an idiot or how much of it is I'm an idiot to try to get everything straightened out financially.

Yes, you guys have been referenced to me before by a co-worker over a year ago. I wrote it off as nothing and then was like, maybe there's something to it. That tells us actually how desperate you are.

All right, so me and my wife are pregnant. Well, I'm not. She is. Thanks for clarifying that. Pretty soon. I talked to try to file bankruptcy. That cost over $2,000, so I didn't do it. They estimated me at about $12,000 in debt, and that's including her car. I don't have one. You tried to file bankruptcy over $12,000?

I told you I don't know what I'm doing, how much of an idiot I am. I don't know.

Yes. My hours vary and so does my paycheck. It's highly inconsistent. What kind of work are you doing? Geotechnical field technician. That sounds really fancy. What does that mean? Um, summed up construction needs testing done before they can build or any of that. I run a bunch of tests. Um, but that's not a consistent 40 hour a week gig. Um, sometimes it can be just below 40 hours.

I'll make less than 400 or 500 bucks. Sometimes I'm working almost 60 hours, still make less than $800. I never know what my check's going to be.

My boss told me today, sorry, that he was looking to give me a raise soon, but has no idea how much or how little it'll be.

Right, but I had come back to them because we had moved back up to Georgia from Florida because that was a bust at every avenue, and they were the only place I could find to go back to work for. I did get my real estate license in Florida, and I got the paperwork printed out to transfer it up here.

So my plan is to try to get what time I have not working because I could work through the weekend at a moment's notice. You get told at the end of the day whether you've got to be at work

That's where my plan comes in is I want to get into the real estate and find a secondary gig. Dude, that is a luxury.

Absolutely. I understand. I just started getting real with these things like a wake-up this week.

Yes, sir.

It's a couple of things, a credit card, her car. A lawyer from a previous divorce that's only two grand didn't even use them. What's the car worth and what do you owe on it? I believe she said the car's worth like 20 something, 30. And it should be paid off next year.

I think like seven.

I think that's what she said last time I asked her about it.

Hey guys, thanks for taking my call. Um, I've got a question. I'm a hundred percent stumped on what to do. I'm currently in about $7,500 a month worth of mortgage debt. Um, I, it's two more mortgages. The first one's about 3000. The second one's 4,500. I live in the one is my primary residence. The other one I'm holding onto it's renting out, but it's losing money every month.

So I don't know whether I hold the property and wait for it to appreciate and just weather the loss and take the tax deduction from it every year from the interest. Or do I look to sell the property and I won't recover what I put into it? So I'm not going to be recovering my closing costs or any of my down payment. I'll basically break even if I sell it. I bought it at the height of the market.

Doug, you are the violinist on the Titanic, man.

I know. I know. But I look at it and I say, hey, you know, I'm saving a little bit maybe from the taxes.

So do my calculations matter on this? Because I've, I've basically looked at if I hold onto this property at a three or three and a half percent appreciation over the next three years, I can pull my money out. I can get what I put back into it.

Okay.

Income right now, I make a decent income. I bring home about 220 net. Amazing.

Yeah, the thing is, I think with my higher income, I feel like, hey, it's not that big of a bleed every month. And if I can make up this money in the long run and then sell it and get some of that cash back that I put into it, so it doesn't hurt as bad as it probably would. Look, do you guys, which is why I needed a little bit of clarity on it, because I really feel like I want to hold on to it.

Well, I have the mortgage, of course. I have a vehicle. And other than that, no, I actually used the debt snowball, paid off all my credit cards, paid off all my medical debt, paid off all my student loans. I paid off about $80,000 worth of debt. Great.

The truck has $35,000 left on it.

Well, if I look at it, you know, I'm currently contributing, and this goes into another question, I'm contributing to my savings plan through work. You know, they match up to a certain percentage. I'm putting away into a high-interest, high-yield savings account every month. I could take that money, stop it, I could have it paid off in a year.

Because as it currently sits, I'm about $3,000 a month cash positive.

Yeah. I mean, my monthly mandatory right now is about $10,000. What's that? Are you making like $15,000 a month?

Yeah, I mean, the income is, I have been, but the income hasn't always been there. So I'm making up for all the pain and suffering that I had to put on myself earlier on. I finally, yeah, exactly. I finally kind of realized it.

I do. I have my retirement investments, of course. I've got about $25,000 in cash. Amazing. So you could be debt-free even faster.

No, the primary is the $4,500. Okay. So, you know, yeah, and just, of course, given the market, I mean, you know how it is here, so it's difficult.

It is, and it was all part of the school system. So, okay. Okay. You got this, Doug. Well, I appreciate that.

Hi. Oh, my gosh, I'm so nervous.

So I am currently in Baby Step 2. I have only 9,000 left to go. I've been working like crazy seven days a week and evenings, and I'm exhausted. But I'm trying to figure out once I'm in baby step four, how to invest 15% because I don't see the numbers working out. And I'm wondering if I should pay off my mortgage like it's baby step two, or if I need to just do side gigs for the next decade or so.

Yeah.

I make $57,800. I'm a teacher, so I also make about $3,000 or $3,500 gross in the summer.

Mm-hmm.

I mean, according to the numbers that I, according to the math that I did, my household expenses are around $3,000.

And I think my net income, according to my paychecks, is about $32.25. And then the summer, I mean, divide that by 12 and add that to the income.

I do. I'm not investing right now, but I get a 4% match.

When I look at my margin, it's like $475. So, man, I'm missing something.

Okay. So I think so. Right now I have 6% being taken out for my pension automatically.

So that's already, and I think you guys say to cut that in half.

Okay. And then I wanted to do the 4% for the match and then do the rest in a Roth IRA. And so that's why I was doing net income. Does that make sense?

Not much. So I think only like $100 per month because most of it's due to loans, and I have a $0 payment right now.

Wouldn't it be cool to take summers off?

Or do you enjoy doing it? Well, I do get bored. I have taken a summer off before, and it does get boring. But I don't know. I just didn't see the numbers working out like I thought.

I doesn't the Roth IRA though doesn't the net it doesn't come out of your net though.

I don't know. I guess. I mean, maybe when I get there, it'll be different, but...

Yeah, that's true. I mean, I'll move up to $61,000 next fall or this fall.