I Owe $13,000 In Taxes From My Side Hustle! (Hour 1)
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When should you pause investing to pay off your mortgage?
Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I am Ramsey personality, Rachel Cruz, hosting today with fellow Ramsey personality and best-selling author, Christina Ellis, and we are taking your calls about anything. Again, life, money, relationships, career, and it's a free call anywhere in the country at 888-825-7000. 5, 2, 2, 5. So give us a call and we can help you out where you need it. So first up, we have Brad in Rochester. Hey, Brad, welcome to the show.
Hi, how are you guys?
We're doing well. How can we help?
I have a question about, we're trying to pay off our mortgage early and how aggressive I should do that. My main thing I'm concerned with, I mean, we have a fully funded emergency fund and no debt besides the house. And I would like to, well, we're, we're saving 17 and a half percent into our, uh, our 401k is combined. And should I reduce that to 15%?
What should you do if you owe $13,000 in taxes from a side hustle?
I have 207,000 to pay off on the mortgage yet.
$207,000. Okay. Yes. I mean, for sure. I would lower that to that 15% because you'll take that extra cash and throw it at the mortgage to pay it off early. How much money do you guys make a year?
We make combined $260,000.
Oh, good job. That's awesome. What a great goal. What's your time projection for when you're going to have this paid off?
Well, including some stocks that I have from my company, half of them will vest in July. So I want to sell those.
How can you go to college debt-free?
And then two and a half years after that, sell those two. We think we can do it in two and a half to three years without reducing our 401k down to 15%. The reason I'm concerned with reducing it is I'm 51 and she's 50. So I want to put as much as I can into the 401k.
For sure. How much do you guys have in it now?
Combined about $900,000.
Oh, yeah, you're doing great, Brad. No, I mean, I think you're fine. I think, I mean, if I were you, I'd still go down to that 15%. Again, any extra money that you have, throw it at the principal of the house. And as soon as you have that paid off, then, yeah, you guys are right into baby step seven, which means you guys can go back up and invest that 17, even more, 18, 19% of your income if you wanted to. But just being able to... nothing it's not going to make that big of a difference honestly in just those two years of lowering it two and a half percent i understand what you're saying and i get the um yeah the intensity of like oh man we can keep throwing this because you have a plan of other ways that you're going to be selling off that stock and paying off the house but i would go ahead and just lower it and and start knocking off knocking the house down yeah knocking the house down don't knock your house down but knocking down the mortgage yeah don't do that don't do that
Well, the snow we're having this week probably would do that.
What strategies can help you avoid impulse buying?
Yeah, I saw Minnesota. I was like, yeah, no. Yeah. And I think especially, too, with like such a solid income, y'all are investing so well. And we're not talking about the difference between, you know, five to 10 years of paying off your house early. This is just going to be a small change. So I think it's going to feel good emotionally to have both things solid.
That's right. So great. Thanks, Brad. Thanks for the call. Up next, we have Rob in Los Angeles. Hey, Rob. Welcome to the show.
No.
Is it okay to move closer to family while paying off debt?
So I, I wanted to pay off all my debt, um, about eight months ago. So I had a couple of side hustles going on and actually made quite a lot of money in the side hustles. And now I'm facing, I just did my taxes or not did them. I started doing them myself and I feel I'm not feeling it calculated out to about, but I owe $13,000 that I just didn't plan for. Um, And I feel like I just kind of screwed myself up even more trying to get out of debt. So tell us more about your situation. So you said you kind of started these side hustles trying to get out of debt. How much debt do you have? Well, now I don't have any besides the mortgage.
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Chapters
8 chapters
1
When should you pause investing to pay off your mortgage?
0:29–1:42
2
What should you do if you owe $13,000 in taxes from a side hustle?
1:42–2:16
3
How can you go to college debt-free?
2:16–3:30
4
What strategies can help you avoid impulse buying?
3:30–3:58
5
Is it okay to move closer to family while paying off debt?
3:58–5:03
6
When is it appropriate to pause your Debt Snowball for health reasons?
5:03–6:01
7
How can you balance work and education decisions at a young age?
6:01–6:59
8
What are effective ways to prepare for unexpected expenses?
6:59–37:29