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- [00:07]
Brian Preston
2025 tax changes you can't afford to ignore.
- [00:11]
Bo Hanson
Bryan, I am so excited to talk about this because we know that there are two things that are certain death and taxes. And in that same vein, one of the things we know about taxes is that they change and the rules change and the things that we need to know about to positively impact our tax situation also change. And I'm excited that we can share some of.
- [00:32]
Brian Preston
Yeah, Bo, this is one of those annual traditions that I think about it. And this past year was a special year because we had the final transcript for Millionaire Mission needed to be updated with 2024 numbers. And I was like, come on, it's November. When are these numbers showing up? And then I think about also the special relationship as you get a year older, a year longer in your career. And if you want something that makes you seem old and senile, it's these annual changes. Because every year I'm like, so the 401k max this year is what, 22,000, 22,500? And Bo's like, no, it's 23,000. Soon to be 23,500. And I'm like, oh gosh, I still, you know. So this is where we're going to catch you up. There will not be any mystery to what's coming your way in 2025.
- [01:20]
Bo Hanson
That's exactly right. The IRS has now released these new inflation adjusted contribution amounts. We're going to make sure you know them because a lot of us like to do our year end planning at the end of the year. And one of the things that we do when we do our year end planning is we set ourselves up to begin planning for the new year as we get into January. And there's some really unique additions specifically related to secure Act 2.0 that we want you to know about because for a number of you, they might impact you. And if you can just take a little bit more and put a little bit more aside, oftentimes that can have a huge outcome for you. So let's jump right in, Brian. Let's talk about the first one. Employer sponsored retirement plans. So these are 401ks, 403bs, 457s thrift savings plan. In 2024, the salary deferral limit. The amount that you could defer from your paycheck into these plans in 2024 was 23,000. In 2025, it is increasing by $500 to $23,500.
- [02:21]
Brian Preston
Well, look, as we come into December, this is something you probably need to Go ahead and update. Get with your HR so that as soon as we drop into the new year, this is part of your new year impact. Let's update how much we can put in those salary deferrals. That way you don't have that surprise when you get your November December paycheck of next year and you go, man, I didn't max out my 401k. I missed it. This is something that you need to update.
- [02:44]
Bo Hanson
It's so frustrating when we look at a client's W2 and we see that they still had 22 or 22.5as their deferral amount. They just didn't update it in addition to the salary deferrals. If you're someone who is taking advantage of mega backdoor Roth, or maybe you just have a very generous employer, the actual section 415 limits are increasing. When you add up all of the employee and all the employer contributions. In 2024, the total amount that could go into a defined contribution plan for Your benefit was $69,000. That next year is increasing to $70,000.
- [03:18]
Brian Preston
In this next category because I think they were worried about people my age. Do you feel like you're maybe having a senior moment? Well, they said, you know what, let's keep those catch up contributions for 50 and over the exact same. So there's 7,500 both in 2024 as well as for 2025.
- [03:34]
Bo Hanson
Now this is a unique thing, right? So catch up contributions are staying the same. Sorta. There is a little bit of an additional change. There are now what are called super catch up contributions for individuals that are turning 60, 61, 62 or 63 next year. If you happen to be turning one of those ages in 2025. In addition to the $7,500 catch up contribution you can do, you can also do a super catch up of 50% of that amount. So you can do another $3,750. So if you are 59 now and you will be turning 60 or you will be turning 61, or you will be turning 62 or you will be turning 63 in 2025, you can actually do a catch up contribution equal to $11,250. It's kind of confusing. I think it's awesome. I love people saving more money, but this one just seems like. Right. I guess it's for people that are.
- [04:34]
Brian Preston
I'll be honest, even as you're going through that, it felt like you were reading Green Eggs and Ham by Dr. Seuss and Sam. I am. That is that super ketchup is. That's something special. I guess a legislator is like, hey, let's put this in there and here we are.
- [04:50]
Bo Hanson
Now it is important to note that these aren't. This is not a mandatory provision inside a 401k plan. So your plan may not adopt this change. So if you are someone who's 61 years old next year and you go to adjust this in your plan and it squashes it and doesn't let you, that might be because your plan has not adopted it. So when you get those annual updates, when you get those amendments, when you get your summary plan description, when you get the documents related to your 401k, make sure you read through them so that you understand what is available to you, what changes are happening inside of your plan.
- [05:24]
Brian Preston
Bo, you know what I like?
- [05:25]
Bo Hanson
What do you like, bro?
- [05:25]
Brian Preston
Besides people subscribing to our channel?
- [05:28]
Bo Hanson
Ooh, I like that.
- [05:28]
Brian Preston
I love it when governments use a good acronym because the government is not going to look past a great opportunity to put an acronym out there. And we have one right now.
- [05:39]
Bo Hanson
Yep. So long term part time employees, ltpt long term part time employees are now it's going to be easier for them to participate in employer sponsored retirement plans. So this might be seasonal work or this might be part time employees who come on at a certain part of the year and then roll off a certain part of the year. These are the requirements. In order for those employees to be eligible to participate in an employer sponsored retirement plan, they have to complete 500 hours of service in two consecutive 12 month periods. If you think about a 40 hour work week, that's full time for four to five months out of the year and they have to be age 21 by the end of the second 12 month period. So this is something if you are a business owner, if you are a plan sponsor, you want to make sure you're paying attention to this because you may have seasonal work or part time work that's now eligible for a benefit that they were not previously eligible for.
- [06:36]
Brian Preston
Yeah. And pay attention. Like internships and other things, this is going to impact a lot of different things. So don't sleep on this because I think, you know, we all want to make 401 s eligible people as fast as possible. But it is unique. When you have seasonal employees and maybe they come their sophomore year of school, maybe they come their junior year of school, you're like, wait a minute, this person is already eligible for the 401k even though they haven't started full time Employment.
- [07:01]
Bo Hanson
Yep. So okay, so that is employer sponsored retirement accounts. Now let's talk about some other savings vehicles that might be available to you, whether you're an employee or maybe even a self employed individual. When it comes to IRAs, traditional IRAs, and Roth IRAs, guess what? Contribution limits are not changing. In 2024, the total contribution for those under 50 was $7,000. That will be staying the same in 2025. And catch up contributions for those age 50 and over also staying the same at $1,000 in 2025.
- [07:38]
Brian Preston
And Bo talked about with employer plans, the 415 limits will SEP IRAs, which are only funded by the employ. They did get a pickup, they were 69,000 in 2024. They're now 70,000 going into 2025.
- [07:52]
Bo Hanson
And then when it comes to simple IRAs, which really we don't see a ton of simple IRAs anymore. But if you do work for an employer that has a simple IRA present, the salary deferral is increasing as well. In 2024 it was $16,000 salary deferral, it's going to 16,500. And similar to 401 catch up contributions are not changing. They will remain at $3,500. But there are also the super catch up contributions for those individuals age 60 to 63 next year. So if you happen to fall into that category and your plan adopts it, there is $5250 of catch up contributions that you can do to a simple ira.
- [08:34]
Brian Preston
By the way, if you work for a company that has a simple Iraq, why?
- [08:38]
Bo Hanson
Right, right.
- [08:38]
Brian Preston
I mean seriously, most people have upgraded to 401ks. It's gotten so much cheaper to administer 401ks. So you can get higher salary deferral limits, you get higher contribution limits. As an employer, I'm just surprised that, look, this is coming from a person that had a small business with a simple ira, because that was the progression. You went SEP IRA when you didn't have employees. You went simple IRA once you added employees. And then once you could afford it and had enough success and could afford the record keeping, you do a 401k. All that's been changed with innovation and technology lowering the cost. Also the legislation has made these numbers even better as well where you can't really ignore because of the spread between the salary deferrals.
- [09:20]
Bo Hanson
I think it's interesting with 401ks, I love seeing that we're able to save more money. That's an amazing benefit. We get to put more money to work. I was a Little bummed to see that IRAs didn't increase because we love tax free growth. That's why. Brian, do you have the thing that. Can you hold up the thing? It's why we have the financial order of operations and step number five are your tax free savings vehicles. In 2025, we did not get a boost on the Roth IRA, but you know what we did get a boost on health savings accounts contributions. For 2024, the maximum contribution you could do to an HSA was 4,150 for a single individual or 8,300 for a family. Those numbers in 2025 are increasing and this is something you need to pay attention to because a lot of folks have automatic salary deferral arrangements set up where this just comes out of your paycheck into your HSA every pay period. Well, if you were maxing out at the 4150 or 8300, you need to make sure that you increase it for January because the new limits are 4300 for individuals and 8550 for families.
- [10:24]
Brian Preston
Yeah. And then we can. We even brought up, going into education, we were like 529 enable accounts. This is something we could talk about. And we did a little definitive research on this because we all know 529s are unique in the fact that you can kind of stack your contributions for years. You can add like five years into one year if you make that election. So you can really overfund these things. But the typical maximum in the past was for 2024 is 18,000. For 2025 it's 19,000. And that's because that's the annual gift exclusion able accounts we were trying to figure out, do they have the same stacking provision that 529, because they're built on the same platform we found through the Social Security Administration. No, they are limited by whatever the annual funding gift limit is. So it is going from 18,000 to 19,000 in 2025.
- [11:17]
Bo Hanson
I love it. It's amazing that while these may not seem like significant changes, just being able to increase how much you're Saving into your 401k and just being able to increase how much you're saving into your HSA. If you were to add those two up every year, that's going to be about 650 more dollars that you're able to get into tax advantaged accounts. And while that may seem small and that may seem insignificant, if you can do that next year and the year after and the year after and the Year after time can be the most powerful part of your entire financial journey. If you don't believe us, we have a deliverable. You can go out to moneyguy.com resources and download this deliverable. What can 1% more do or what 1% more can do for you? And it shows the power of that small marginal saving. If I can start today and get my money working for me, it's going to allow my future self to have a great big beautiful tomorrow. And it does not take a lot today. It just takes time and discipline to put it into place.
- [12:18]
Brian Preston
Well, it is those small decisions to create that great big beautiful tomorrow. It's that small incremental decision. You think about it like even the koozie, the $1 for a 2021 year old has the potential to become 88. We had somebody in the studio, Phil was in here not too long ago and I loved how he kind of laid it out when we were showing him some things he said, I thought about this in terms of time and that's kind of what this is that you can take this 1% is that maybe one month worth of your work or even one week might be covering months if not years of your future selves retirement. So that 1% which might seem like absolutely nothing, a rounding error can actually have significant impacting your future self. So don't sleep on that.
- [13:05]
Bo Hanson
You can also find 2025 tax brackets, standard deductions and more in our 2025 tax guide. So if you're not using this as a quick reference and a resource, make sure you do that. You can get it@moneyguide.com resources and if you want a deeper dive into some of these tax changes that are coming and how they may impact your back pocket, make sure you describe@moneyguy.com beyondbasics we have an article coming out this Thursday that's going to give you the details and let you dive into all of the changes that you can expect next year and how you can use them to ultimately do money better.
- [13:43]
Brian Preston
So you're probably recognizing if you're brand new to the show and we know that there are about 45% of you that are constantly coming into the family here is that we are a little nerdy. Yeah, we do a lot of the behavioral stuff. We'll focus on the good habits that you need to be focusing on, but we'll also give you the deets on what you need to be doing tax policy wise. And I gotta tell you, 2025 is a big year because we just had an election. I know. Look, we're all like, hey, the election's over, so now we can get on with our lives. Well, in 2025, there's gonna be a lot of tax stuff going on because we have a lot of stuff that was set to sunset. And now we know that that's going to be on the front of the legislative agenda, is looking at tax policy. We will be your scoop. We'll be able to hook you up on that. And remember, we are very clear. We don't do, we don't do politics, we don't do religion. We're just trying to help you make the best decisions. But we're going to keep you on the cutting edge of knowing what you need to do with your personal finances.
- [14:37]
Bo Hanson
And we love that we can stay abreast of these changes, that we can know what's going on in the financial world. But we also love that we can speak to the things that you care about. We want to make sure we're a resource to help you in your financial life. And so with that, every Tuesday morning at 10am we love to be here answering your questions in the live chat. So right now we have the team out in the wings collecting your questions and we want to load you up. So if you have a question, make sure you get it in the chat. Right now with that creative director, Reby, I'm going to throw it over to you.
- [15:10]
Reby
Oh, yeah, I've got one queued up. We're going to kick it off with a question from Jonathan V. He says, why does the goal of 20 to 25% invested for retirement not change based on traditional versus Roth accounts? Having a million in Roth could be very different from a million in traditional accounts. What do you think about this?
- [15:33]
Bo Hanson
Yeah, so, okay, so this is a great question, Jonathan. The impetus of his question is he understands the mathematics that if we make some tax rate assumptions, if I'm in a higher tax bracket now, and I think I'll be lower later, or if I'm in a lower tax bracket now, higher later. Roth dollars and traditional dollars are not the same. If I have $1 that's going into Roth, it's actually after tax money. If I have $1 that's going in traditional, it's pre tax money. So I'm not actually saving the same nominal amount of money when I compare those two things. So what we tell people early on is that when it comes to building for your financial future, when it comes to figuring out how you're going to save, we want to make it as simple as possible so that you can master the behavior. That's why we shoot for 20 to 25%. Because if you can do that, odds are you're going to set yourself up for future financial success. But then, as you begin moving along in your financial journey, we know that personal finance becomes incredibly personal. And what you will find out, what you will learn as you're moving along in your financial journey is you may recognize, because you've been maxing out Roth and you took advantage of HSA and you've built up all through your 20s and all through your 30s, and as you get into your 40s, you may do the know your number course and arrive at the conclusion, man, I am well on my way to financial independence. I'm doing the things that I'm supposed to be doing. And because of my account structure, maybe I don't have to save 25% anymore. Maybe my savings rate for the rest of my career needs to be 16%, 17, 18%. That's a decision that you make as you begin to build out your financial plan later on in your financial journey, not one that you make right at the very beginning. Oh, if I'm going to do Roth, I'm going to save less, or if I do pre tax, I'm going to save less. If you start making those assessments too early, I think you're going to be selling yourself short.
- [17:28]
Brian Preston
Jonathan, I'll go ahead and give it to you straight. There are two things going on here. We got to get the actual behavior right and the good habits, make them as easy as possible, and then keeping the bad behaviors minimized as much as possible. So always focus on the behavioral side of things first. And then we're going to get into the execution or the fine tuning later. And that's exactly what we've done with the financial order of operations. So many Americans, and this is something financial mutants struggle with, is that they get into the minutia of how do I execute this to maximize it. And they leave behind a lot of the behavioral and other things. So that's why, if you'll notice, in the financial order of operations, we got you covered. Because we are so nerdy. We focus on both of these things when we design this. Steps one through three, all the way to four is to make sure you're getting the free money, making sure that you're not making desperate decisions because you didn't even have access to emergency reserves. We get to 5 and 6. These are the make wealth phase. You got to ensure that you're Actually getting wealthy through saving and investing, creating your army of dollar bills. So that's why in steps five we got doing the Roth, the hsa, because those are tax free growth opportunities. Step six with maxing out retirement, this is exactly what you're talking about, is 20 to 25%. If you go to moneyguy.com resources, we'll show you why we landed on 20, 25%. Because if you started like the majority of Americans do in your 30s, it's going to land on about 25% from a behavioral standpoint of what you need to be saving and investing to be successful. If you start in your 20s, it's going to get that much easier. If you wait until your 40s, you're going to have to save even more. That leads to. Your question is, wait a minute you guys. It is different when you're looking at a Roth account versus an after tax account versus a tax deferred third account where you took the deduction on the front end. You're exactly right, Jonathan. That's why in step seven, hyper accumulation, after you've gotten to saving and investing 20 to 25%, you move on to the hyper accumulation. And this is the first step where we say, hey, it's not just about making the wealth and the good behaviors and the habits that got you there. It's about how are you actually going to use this money in retirement. And this is exactly why if somebody is part of the fine movement or AKA previously known as fire movement, where you think you're moving on to something else in your 40s or 50s, you're going to need to structure your accounts different than somebody who says I love my job, I love what I'm doing, I'm going to do this until I'm age 70. That is a completely different goal and it's going to require a completely different account structure. So that's why we do make those determinations and those differentiations in step 7 of hyper accumulation where we'll say, yeah, without a doubt you're going to need more of an after tax bridge account. Or if you're one of these people, maybe your income structured in a unique way where you can do mega Roth. We're going to need even more in that tax free account because of the benefits. And I think you can see, look, I just don't want you getting hyper focused on just the tax savings or that this dollar amount is not the same here because there's some deferred taxation within there. It's get you through the behavior components and then we'll connect the math as we get into step seven. And that's why if you need to focus on all nine steps of the financial order of operations.
- [20:43]
Reby
Great. Awesome. Jonathan V. Thank you for your question. It is Tumblr day. I just remembered. I almost forgot. But how could I forget? If you would like a money guy tumblr, just email winneroneyguy.com and we'd love to send you one, Jonathan, as a thank you. What?
- [20:58]
Brian Preston
It's not just a tumblr. Oh, it is all silly.
- [21:01]
Reby
I'm so sorry.
- [21:04]
Brian Preston
A koozie.
- [21:04]
Reby
It's true. It actually makes a great tumbler and a great koozie.
- [21:07]
Brian Preston
So don't complain. Don't sell this thing short. It has multiple skills.
- [21:11]
Reby
Well, Jonathan V, you can have one if you would like. All right, Craig W's question.
- [21:18]
Brian Preston
Hang on. I think my nose is grown.
- [21:21]
Bo Hanson
Do you just lied about something?
- [21:22]
Brian Preston
No. Every time I take a drink, I've never noticed.
- [21:28]
Bo Hanson
Double a jacuzzi.
- [21:29]
Brian Preston
Now every time I drink. Listen, that has never been a problem before. So either this thing or my nose is grown. So we're going. Okay. I'm sorry. Joys of a live show.
- [21:42]
Bo Hanson
There we go.
- [21:43]
Brian Preston
That part was for free.
- [21:44]
Bo Hanson
You're welcome.
- [21:44]
Reby
Let us know if you think Brian's nose is different.
- [21:47]
Brian Preston
No, don't tell us about it. That was not inviting comments on my nose length because we all know men's noses and ears do continue to grow. So I don't.
- [21:57]
Bo Hanson
Is that true?
- [21:58]
Brian Preston
I think so. I've always heard that noses and ears grow.
- [22:00]
Bo Hanson
Is that a legitimate thing or is that like an old wives tale?
- [22:02]
Reby
I've never heard that.
- [22:03]
Bo Hanson
I. I don't know.
- [22:04]
Brian Preston
We all know I'm very self deprecation, deprecating about my age. But we don't need to add to it. Okay, but it is clicking. Kind of annoying this thing sideways.
- [22:18]
Reby
Exciting.
- [22:18]
Bo Hanson
He's good. He's going to spill. Spill. Drink all over himself, guaranteed. Hey John.
- [22:25]
Reby
Craig W. Yeah, Craig W. He has a question for you. He says, do you believe in paying off a 24k family debt at 0% interest as quickly as possible? We can pay what we want each month but feel short term struggle for a quicker way to freedom is the way. But what are your thoughts?
- [22:46]
Bo Hanson
Do you believe in paying off a $24,000 family debt at 0% quickly? We want to pay each month but feel short term struggle for quicker freedom. Okay, so I'm. I got to make a bunch of assumptions here, right? I got to make assumptions that you borrowed some money from family. Maybe this is parents, maybe it's grandparents. And they were in a position where they said, hey, I'm going to give you 0% 1. I think that's incredible. Assuming this was something where, like it was an opportunity, hey, I need to go out and I'm going to go buy my first car and I've got to borrow money and I'm going to follow 23 8. And the auto dealership told me that my first auto loan is going to be eight and a half percent. And mom and dad or aunt and uncle or grandma, grandpa said, hey, you know what? We will loan you the money. We'll loan you $24,000. You pay us back and we're going to do zero percent. If you come from a situation like that, I am not of the opinion that you should feel guilty or feel bad or think that that's like a negative thing. I think it's wonderful that you just happen to have the opportunity where that's available to you. What you have to do is you have to recognize the benefit of the opportunity that you have, but also the responsibility of the, of the social contract that you've entered into. Because, yeah, if you're thinking about mathematical optimization, okay, great, I've got this $24,000 loan. I'll just never pay it back and it's zero percent interest forever, and it'll just sit out there. I think that that would be taking advantage of an opportunity that's presented to you. So what I would love to see you do is I would love to see, because again, it depends on the type of debt, depends on your financial situation. I would want for you to find a reasonable method and mechanism to pay it off over a timeline that makes sense for you as well as the lender. So if it's like three years, five years, 10 years, I don't know. Again, I don't know your situation or the specifics of this, because what I don't want to see you do is because it is zero percent. I don't know that I want to see you focusing on paying off this debt as quickly as possible to knock it out instead of doing things like getting your employer matched, instead of doing things like putting money in a Roth ira, instead of doing things like an hsa. But I also don't want to see you taking advantage of a generous family member simply because you can. There's some tension there in the middle that you'll have to figure out. Agree, disagree, want to fight.
- [25:01]
Brian Preston
Well, I remember when I was taking legal studies in Accounting I loved that I had to take two. I'm old so quarters of legal studies as an accountant and one of the first things or one of the curious things I learned was that in law love is consideration when it comes to family members. And we know that our parents love us and they'll do anything for us. And sometimes that creates where there's unclear expectations or communication on what is expected. And I've shared in Millionaire Mission I share cash is such a valuable thing in the financial order of operations that if I could have had another hand I'd hold up even more stuff. But it actually gets two steps in the financial order of operations, both step one and four. And I even detailed my knowledge comes a lot of times from also experience and the struggle. And I got in a point when I was first starting to do the adult thing that I really screwed up with credit cards and some other stuff. And I had to call my parents and they lent me some money. And then when I went to go pay them back they're like, don't worry about it. And I remember no it was a principled thing for me is because I was in a down and desperate and I felt like I had not closed the loop on my change of becoming a different person with the way I viewed this that I forced the issue of paying them back the few hundred bucks. Now your situation is a little different, Craig, is that you're talking about $24,000 sounds significant, but here's the thing where and you need to go revise this. If this was not set up on the front end is that anytime you're doing these family engagements, I would first design a plan of success. Meaning on the front end what are the assumptions and the expectations from both parties? Meaning that did y'all have a five year plan? Did you have a seven year plan? Do you have even a ten year plan? Whenever you're doing this stuff for a loved one, tell them there's nothing wrong with helping out loved ones, but put it on the front end what your expectation is. Now if your parents said, hey, we're going to do this, this is a tax strategy because it's slightly beyond what the annual gift tax exclusion is. We're going to give you this money and then we'll slowly forgive it. That's a completely different thing. But if you feel like that there was this desire, this was not a gift, this truly was a loan, you need to go back and maybe revisit that conversation with your parents or whatever family member worked this out. And then assuming now you have the steps or the assumptions set up of what their anticipation is on when you should pay this back. If you now get to steps 8 and 9 of the financial order of operations, a 0% interest rate is a low interest rate. Ball means I think you pay this thing back even ahead of schedule of what they're anticipating getting that money back. But you've got to go through those several determination steps. Was this a gift or is this a loan? Because those are very distinct, different things. Also, set yourself up a plan of success, know what they're anticipating and expecting, and then treat this like, you know, a step eight or nine type thing where you are going to prepay it. I mean, pay it back because it's a low interest rate and that's your obligation.
- [28:15]
Bo Hanson
Can I, can I do like a little soapboxy thing? Yeah. This is unsolicited advice, but I'm going to give it to you anyways because I know you and I have both run into this. Where, you know, there have been people in our lives at some point where they've been in a spot and they needed borrow some money, right? And we were in a place where we were able to, able to do that. And that's fine. First thing, if you're ever going to let someone borrow money, family member or otherwise, in my estimation, it's always a good idea to assume you're never going to get that money back. Like, when you go into it, don't go into it with any preconceived notions because what will happen is if something goes squirrely, it can get real nasty, especially when it's with family. But have you ever seen this happen? Somebody borrowed money and they're like, we're in a tight spot and they need to pay. But then all of a sudden they just start making financial decisions and you're like, whoa, whoa, whoa, hold on, hold on. Wait, wait, wait, wait, wait, wait. You were in a tight spot, now things are better. And then you went and bought the new car, then you went on the trip or then you took the vacation, like, and you're just, you just want to be mindful of that. If this loan originated out of a place of need that you were in and now you're no longer in that place of need. I do think it's reasonable to honor the folks that lent you the money and don't just start like wilding out. Is that fair?
- [29:29]
Brian Preston
No, I think that is a very. Because that's something, especially if this came from an ask of need is because I have Experienced that where you help somebody out with the anticipation. This is not a gift. This is a loan. Because I get it, the economy stinks right now. I don't want you to lose that vehicle. I don't want you to put your family through this. I can help you out. And then it is amazing that, you know, better days start coming. And I know this is, I think, the person who's struggling. You look at the person that gave you money like they're doing good. They don't need the money, they don't need the money back. But it's back to the behavioral things, and I'm glad you brought that up is because it's true. If you got this out of need and now you're starting to do some extras, you know, that are publicly visible, you might need to revisit that because I've experienced that. And then, you know, one of the worst things, even though you're right, Bo, it is a, you probably don't want to do this with loved ones or family unless you're considering a gift. But it does break your heart when you see that even though they came to you in need and they treated it, they called it a loan and said, without a doubt, I'm going to pay you back. And then they basically ignore paying you back. It's smart. You're disappointed, you're disappointed in it.
- [30:43]
Reby
Good answer. Well, Craig, thank you for being here and for asking the question. And if you would like a money guy Tumblr, we'd love to send you one just as a thank you for being here. And since we asked your question, just email winneroneyguy.com to cash in on that.
- [30:57]
Brian Preston
Man, money and family's hard sometimes. And friends, too. I mean, it's just that stuff's tough.
- [31:02]
Reby
I do like what Bo said of like, hey, if you're the one that's giving the money, just even if they're gonna pay you back, like, mentally treat it as a gift. Like, I'm just trying to help this person out. It's probably for the best, just for everybody's relationship.
- [31:13]
Bo Hanson
And I have to counsel people a lot. They're like, hey, I'm in a good spot, so and so needs help. I want to be able to help them out. And I will tell people, hey, you can do this, but you cannot afford it. Because whenever you like, loan money to family, I approach as, hey, assume you will never see this money again. And if all of a sudden that money was just strict stricken off of your ledger, would you still be okay? And if the answer is no, then maybe you're not in a position where you should be loaning that money out.
- [31:36]
Brian Preston
Yeah, I've even made that mistake here at the office. I mean, where I found out somebody had really bad credit card debt.
- [31:44]
Bo Hanson
There's a number.
- [31:44]
Brian Preston
Yeah. And then you help them out, and then. I don't know. You have to be. Money is. Money is a hard. It's a hard tool.
- [31:53]
Reby
Good conversation, though. Again, thanks for your question, Craig.
- [31:56]
Unknown
The Money Guy show is hosted by Brian Preston. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.