Can This Family of 6 Survive the Messy Middle? | Making a Millionaire

Summary

Podcast Summary: Money Guy Show – "Can This Family of 6 Survive the Messy Middle? | Making a Millionaire"

Episode Details:

• Title: Can This Family of 6 Survive the Messy Middle? | Making a Millionaire
• Hosts: Brian Preston and Bo Hanson
• Release Date: May 26, 2025

---

1. Introduction to the Guests

At [01:08], Bo Hanson introduces the guest family, Caitlin and Aaron, highlighting the financial challenges they've been facing amidst raising four children. Caitlin shares her personal journey, stating, "I had my daughter two weeks after graduating high school, and it took me eight years to then get my bachelor's degree. And in that time, I then had my second kid in there." [01:35]

2. Understanding the Family's Financial Landscape

Brian Preston begins by assessing the family's current financial status through a pseudo net worth statement. Key points include:

• Liquid Assets: Approximately $12,500 in savings and cash accounts, falling short of the recommended three to six months of living expenses.
• Investment Assets: $122,000 saved, with Aaron having two 401(k) accounts from different employment periods.

Aaron explains the presence of two 401(k)s due to career changes, mentioning, "The old one is my first job... and then I switched to a different venture..." [04:02]

3. Assets and Liabilities Breakdown

Non-Liquid Assets:

• Primary Residence: Valued at ~$250,000.
• Automobiles: Ownership of a dozen cars, including classic models. Only a few are listed on the balance sheet due to their fluctuating values. Aaron notes, "They're mostly classics... it's hard to put a value on that." [06:00]

Liabilities:

• Mortgage: $159,000 at a 3.25% interest rate—considered favorable.
• Auto Loan: $29,000 on a Subaru at 8.4% interest.
• Student Loans: Weighted average interest rate between 4.5% and 5.5%.

4. Identifying Financial Priorities and Challenges

Brian highlights the family's placement within the Financial Order of Operations (FOO), noting gaps in their strategy:

• Current Steps: High-interest debt repayment and 529 savings.
• Missing Steps: Emergency fund, which they need to address urgently.

Caitlin admits, "No, we just live a hectic life. It's almost every week." [29:46]

5. Proposed Debt Payoff Plan

Brian and Bo present a strategic plan to accelerate debt repayment:

• Adjusting 401(k) Contributions: Reduce contributions to maximize employer matches, freeing up additional funds.
• Eliminating Non-Essential Investments: Halt 529 contributions and brokerage accounts to redirect funds toward debt.
• Debt Avalanche Method: Focus on paying off debts with the highest interest rates first.

Notable Quote:

Bo Hanson [22:37]: "We love saving for retirement... but you guys need to triage your personal situation now."

6. Budgeting and Behavioral Adjustments

The hosts emphasize the importance of zero-based budgeting, where every dollar is allocated a purpose. They discuss:

• Cutting Non-Essential Expenses: Reevaluating spending on school lunches, kids' activities, and other discretionary items.
• Gamifying the Budget: Making budgeting a fun and collaborative effort to maintain motivation.

Caitlin shares her struggle: "The nine year old very much enjoys packing her lunch every single morning." [31:32]

7. Future Financial Projections

Brian outlines the positive impact of the proposed plan:

• Debt-Free Timeline: From 4 years and 8 months to just under 2 years.
• Emergency Fund Completion: $48,000 saved in one year and three months post-debt repayment.
• Net Worth Growth: Doubling from $192,000 to approximately $420,000 in three years.

Notable Quote:

Brian Preston [41:05]: "If you guys can implement this plan three years in the future... it could be worth almost $420,000."

8. Long-Term Financial Goals and Retirement Planning

The hosts project long-term growth, assuming continued disciplined saving and investment:

• By Age 45: Nearly $800,000 in the investment portfolio.
• By Age 65: Approaching $6 million, allowing for a comfortable retirement.

Aaron reflects on his initial retirement expectations:

"I had an expectation before I even married her... he said, 'I'm gonna retire with a million bucks.' And my first thought was, no way." [45:03]

9. Conclusion and Action Steps

Brian assigns actionable homework to Caitlin and Aaron:

1. Adjust 401(k) Contributions: Decrease to just cover employer matches.
2. Eliminate Certain Investments: Shut down brokerage and 529 accounts.
3. Implement Debt Avalanche: Focus on high-interest debts first.
4. Enhance Budgeting: Find an additional $500 monthly to allocate toward debt repayment.
5. Build Emergency Fund: Target of $48,000 in savings.

Bo concludes with motivational encouragement:

"It's going to change your life... those small decisions have been now another, it's potentially the root of the tree that grounds this thing to create a level of success that you never thought was possible." [46:43]

---

Key Takeaways:

• Importance of an Emergency Fund: Ensuring three to six months of living expenses are readily accessible.
• Strategic Debt Repayment: Prioritizing high-interest debts to accelerate financial freedom.
• Budget Discipline: Moving beyond tracking expenses to actively budgeting and holding oneself accountable.
• Long-Term Planning: Adjusting current sacrifices can lead to substantial future financial gains.
• Behavioral Changes: Incorporating fun elements into budgeting to maintain motivation and collaboration.

Notable Quotes:

• Caitlin [01:08]: "I had my daughter two weeks after graduating high school, and it took me eight years to then get my bachelor's degree."
• Bo Hanson [22:37]: "We love saving for retirement... but you guys need to triage your personal situation now."
• Brian Preston [41:05]: "If you guys can implement this plan three years in the future... it could be worth almost $420,000."
• Aaron [45:03]: "I had an expectation before I even married her... he said, 'I'm gonna retire with a million bucks.' And my first thought was, no way."
• Bo Hanson [46:43]: "It's going to change your life... those small decisions have been now another, it's potentially the root of the tree that grounds this thing to create a level of success that you never thought was possible."

---

This episode serves as a compelling case study for families navigating financial challenges, offering practical strategies, motivational insights, and a clear roadmap toward achieving financial stability and growth. Listeners are encouraged to apply similar principles to their own financial journeys, emphasizing the transformative power of disciplined planning and proactive decision-making.

Transcript

[Brian Preston]

This episode is brought to you by Lifelock. Not everyone is careful with your personal information, which might explain why there's a victim of identity theft every five seconds in the U.S. fortunately, there's LifeLock. LifeLock monitors hundreds of millions of data points a second for threats to your identity. If your identity is stolen, a US based restoration specialist will fix it, guaranteed or your money back. Save up to 40% your first year by visiting lifelock.com podcast terms apply.

[Caitlin]

This episode is brought to you by Factor. Optimize your nutrition this year with Factor.

[Bo Hanson]

America's number one ready to eat meal service.

[Caitlin]

Factor's fresh, never frozen meals are dietitian approved. Ready to eat in just two minutes, choose from 40 weekly options across eight dietary preferences like calorie smart, protein plus, and keto. Eat smarter at FactorMeals.com listen50 and use code listen50 for 50% off plus free.

[Bo Hanson]

Shipping on your first box.

[Caitlin]

FactorMeals.com listen50 code listen50. I had my daughter two weeks after graduating high school, and it took me eight years to then get my bachelor's degree. And in that time, I then had my second kid in there.

[Bo Hanson]

This is what you had shared with the team. I feel like I have dragged my husband backwards financially with bringing two kids into the relationship and no savings or 401k before the last three years while he's been contributing to a 401k for the last 12 years.

[Aaron]

We just live a hectic life. Like, yeah, sure, something coming up.

[Bo Hanson]

You're in the messy middle.

[Brian Preston]

Beginning to take your finances seriously is a new thing for you guys. So here's the question. Can you do it?

[Caitlin]

I'm 32.

[Brian Preston]

Okay.

[Caitlin]

Which is weird to say. Still feel like I'm in my 20s.

[Bo Hanson]

You always will. How about same?

[Brian Preston]

Same. So how many. How many children do you guys have?

[Caitlin]

We have four together. I came into the relationship with two kids.

[Brian Preston]

Okay.

[Caitlin]

And then we just had two, and they're a year apart. So our house is a little crazy right now.

[Brian Preston]

Oh, wow. So what. Okay, so what are the ages? What is our. What's our span here? From oldest child in the house to young. Youngest child in the house.

[Caitlin]

13, 9, 17 months and 4 months.

[Bo Hanson]

Oh, wow.

[Brian Preston]

So it sounds like in just the most wonderful way your. Your middle is kind of messy right now. Is that right? Is that it? Sounds like that, right. Oh, man.

[Bo Hanson]

Knee deep in it, right?

[Aaron]

Haven't slept the full night in two years.

[Brian Preston]

I love it. All right, so 32 years old. Aaron, how old are you?

[Aaron]

I'm 35.

[Brian Preston]

35. Awesome. And then what do you guys do professionally?

[Aaron]

I am a design engineer.

[Brian Preston]

Okay.

[Aaron]

I make stuff pretty surf, sing and all that stuff. I was. I was very artsy growing up, so kind of in line with that.

[Bo Hanson]

I love it because it's engineering. Is it also kind of a marriage between being creative and artsy but also being somewhat analytical? Yeah.

[Aaron]

Has to be functional as well.

[Bo Hanson]

Yeah. Yeah. That's great. That's cool. That's cool. Skill set.

[Aaron]

That's part of the challenge and that's why I enjoy it.

[Brian Preston]

So, yeah, I make nothing pretty clear. That does seem so far to me. Kelly, what about you?

[Caitlin]

I'm an ESOP analyst.

[Brian Preston]

An ESOP analyst. Holy cow.

[Caitlin]

I always get really excited when you guys talk about esoft. Like I understand everything.

[Brian Preston]

I love it. Esop. Awesome. Cool. So, you know, one of the things we do here is we talk about. Okay. Where folks are. And I think it'd be helpful you guys were kind enough to share with us sort of where you are right now financially. So we put together a little pseudo net worth statement for you guys that we kind of want to walk through. Right. So you sent us all your statements, you sent us all your information as we sit here today. Right. Now, when we look at the cash that you have on hand between your savings account and your cash plus account, have about $12,500 there. Now, you know our rule of thumb. Generally we like to talk about three to six months of living expenses in liquid cash. Does that cover three to six months of living expenses for you guys?

[Caitlin]

No.

[Brian Preston]

No. Okay. All right, so we got. I'm going to make a little note here. We got to talk about emergency fund at some point. All right. We have investment assets now. You guys are again in your mid, early 30s. You've already got $122,000 of investment assets saved up. Aaron, looks like you have two 401ks. You have a new 401k and old 401k. What's going on there?

[Aaron]

The old one is my first job. I worked there for 10 years. Then I switched to a different venture for a year and a half and then that started that new one.

[Brian Preston]

Okay.

[Aaron]

And now I'm back at my original job. So that first one is building continually.

[Brian Preston]

So the new 401k used to be the old 401k, but now it's the new 401k current. And the old 401k is the old, new 401k that's now the old. I just want to make sure that. I just want to make sure That I got it on. So any thoughts on consolidating those two? Is there a reason why.

[Aaron]

Needs to be done. I know before. Before we got smart with money, I would say my thought was, let me take that.

[Bo Hanson]

That.

[Aaron]

That old 401k, the lower one. Is there some way we can invest that differently? Was my thought. But now I'm kind of like, well, probably the best investment might be just to roll it into the.

[Brian Preston]

The new 401k, get it all consolidated, working on the same sheet of music, moving in the same direction.

[Bo Hanson]

It's also nice when things are housed in the same place. You still do something different within the same custodian, but it just makes the logistics of managing it so much easier, and it's not.

[Aaron]

Yeah, I'm not good at the logistics part of things, so it'd be good to just let it take.

[Brian Preston]

Get it all in one. And then what about Caitlin? You have a 401k right now. Has about $22,500, and I'm assuming that's for your current ESOP analyst position that you're in.

[Caitlin]

I had rolled over all my old ones after the first episode of Making a Millionaire when they had like, all the different ones.

[Brian Preston]

She just said, look, I did. I did what I was supposed.

[Aaron]

Is.

[Bo Hanson]

What I just heard.

[Aaron]

I don't claim to be his.

[Caitlin]

401K is why that number looks decent right now. So.

[Brian Preston]

And then we have a joint after tax account. Looks like it has a couple hundred bucks in there presently. Now we look at the other assets, right? So the non liquid assets on your balance sheet, we have your primary residence, which has. Is currently valued about $250,000. And then it looks like there are 1, 2, 3, 4 automobiles on. Walk us through that. What's going on with the four cars?

[Aaron]

We have a lot more than that.

[Caitlin]

Yeah, we have like a dozen.

[Brian Preston]

A dozen.

[Bo Hanson]

Just too scared to share this in the interview.

[Aaron]

It's like they're mostly classics, and it's. It's hard to put a value on that.

[Brian Preston]

Okay.

[Aaron]

A lot of them, they're not. A couple of them are nice, but they're not restored. And it's, you know, it's whatever someone's gonna pay for.

[Bo Hanson]

Was it one of those pictures that y' all were saying? Y' all sent us some pictures. Was that a Duster or what? Was.

[Aaron]

Was it green?

[Bo Hanson]

Yeah. Was that like a 1971 Duster? 74 Duster. Look at that.

[Brian Preston]

How'd you pull that out?

[Bo Hanson]

Remember, I grew up in a household. Remember my brother, my dad, Restored a bunch of cars. I'm the only one that didn't. Wasn't turning the wrenches.

[Brian Preston]

So. Okay, so you got a dozen cars, some not restored old cars. For my. Just from my understanding, how did you delineate which automobile showed up on the balance sheet versus which one did not show up on the balance sheet? Like what. Is there something unique about these three auto. These four automobiles?

[Aaron]

I think those you can go to like nada. Kbb and you can find the. The actual value of it versus all the rest of them. I mean, you can go to Hagerty, you can look at what they could be worth. But still, like in the middle of Kansas. It's. It's whatever someone pays for it. It's not. I. I couldn't tell you how much something was worth because its condition isn't. All the condition of these old cars are different. They're not restored. If it was restored, you could sure.

[Brian Preston]

Are you restoring them? Is that the thing that you do? Walk us through this like a hobby, pastime? A thing that.

[Aaron]

It's the thing she dislikes the most about my hobbies that I spent. It costs a lot of money to do this.

[Caitlin]

So I've always been okay with your cars.

[Aaron]

Yeah, she's okay with the cars. But we're. We need to focus on.

[Bo Hanson]

Well, I want to know just because I come from a little. I have side knowledge of this meaning growing up beside this whole life. And like my. My brother and my dad would be in junkyards on the weekend, you know, partying out cars.

[Caitlin]

I've gone with him to like the pick and pull lots a couple of times when we first started dating.

[Brian Preston]

Those are like the real fun dates, right.

[Bo Hanson]

Where you go toolbox and you go out there, you take it off. I mean it's, it's. It's pretty interesting. And then also going to car shows and so all this is kind of. And then. So you get all the catalogs coming in from all the different parts.

[Aaron]

Yeah. So I don't consider myself a catalog shopper. I'm more of the junkyard guy. So I have this expensive hobby, but I try to do it as cheap.

[Bo Hanson]

Do you have like. Are you mopar? Since you have the. So you're a mopar person.

[Aaron]

Mopar. If I was to pick an American company. Yeah.

[Brian Preston]

Okay, so I'm just gonna sit this one out. Yeah, I'm speaking a foreign language right now.

[Caitlin]

I do know some of those cars don't show up on there too, because they're not going anywhere ever.

[Brian Preston]

Okay.

[Caitlin]

The Duster never going anywhere.

[Aaron]

There's some that are extensively modified, I'll.

[Caitlin]

Put it that way.

[Aaron]

So you can't like there's no way to know the value of them.

[Brian Preston]

Got it.

[Bo Hanson]

So you're just gonna ask one more question. 340 or 318 in that.

[Aaron]

Swapped in.

[Caitlin]

I don't know what they're talking about.

[Aaron]

A fuel injected 318.

[Bo Hanson]

Okay.

[Aaron]

Mid-90s Dodge truck.

[Bo Hanson]

That's awesome.

[Aaron]

I paid 300 for that truck.

[Bo Hanson]

Okay.

[Aaron]

So I got the whole swap in there with it. And for, for super cheap. Like I said, I try to be as cheap.

[Brian Preston]

So for this hobby, you're trying to be financially responsible, you're not just throwing. And look, you're nodding at that. That sounds good. This is something you seem like you all are on the same page about. Oh, for sure. Yeah.

[Caitlin]

Yeah.

[Brian Preston]

All right. So we have these automobiles that are grotesquely understated in terms of volume right now. Yeah. And then now we also have some 529, some funds for the kids that are set up. You said you have two older kids and two younger kids, so I imagine that's why some are larger than others. But in total, almost $30,000 in 529 assets that you guys have built up. And then we have the debt side of the ledger. Your mortgage currently is about 159,000 at a 3.25% rate. That's a fantastic rate. There's a lot of folks who really wish that was their rate right now for the car. Looks like the only one that has a loan on it is the Subaru. You owe about 30, $29,000 on that at about 8.4%. And then both of you have some student loans. It looks like the weighted average rate is somewhere close to five, four and a half to five and a half percent.

[Bo Hanson]

We're going to, we'll dive into that a little deeper. I want to know that Subaru was that purchased with 23, 8.

[Caitlin]

No.

[Bo Hanson]

Walk us through the terms on that car loan. What happened there?

[Caitlin]

We traded in two cars. One was underwater. And then. Yeah, we went by the monthly payment after that.

[Aaron]

I think it's safe to say that's before. Before she kind of got into being financially responsible.

[Brian Preston]

Got it.

[Caitlin]

It was, we bought it like April. I went on maternity leave in November, which I started watching a lot of YouTube and found the money guy.

[Brian Preston]

So this is relatively new. Like, like beginning, like looking at your fine. Because I think this is important for folks to know. Beginning to take your finances seriously is a new thing for you guys, you've recognized, hey, maybe some of the decisions we've made thus far aren't perfect. But now we want to figure out how we write the shit.

[Bo Hanson]

And I also, I want you to feel you fell into the exact same trap because your numbers are actually so similar to the averages now because, I mean, you financed it for 72 months.

[Caitlin]

Yes.

[Bo Hanson]

And then, you know, so you can see that in your payments are. Right. A little over. Was it. 700 bucks a month is what the minimums are. So that's how they get you. And that's. You're right in those averages because I think that's where the typical American is now. Their car payments, a little over 700 bucks, they're getting out beyond 70 months on the financing. So you fell into the trap. It's our job. And you guys sharing your life story is going to be hopefully what lets people see there's a better way to do money so you don't have to fall into that trap.

[Brian Preston]

So when we look at this, I'm curious to know, because you said you found our stuff and it's relatively new, but you're familiar with the financial order of operations. Right. It's this nine step, tried and true process of what to do with your next dollar. And we think people kind of use that as guardrails to figure out where they ought to be. If I were to ask you guys, where are you in the financial order of operations, what would your answer be?

[Aaron]

We discussed this. Yeah, I know at one point we were kind of bouncing around a little bit.

[Caitlin]

Yeah, we, we are kind of. We are technically paying off high interest debt because I'm trying to pay off the car.

[Brian Preston]

Okay.

[Caitlin]

But we all are. We are. Okay, so funding 529 account.

[Brian Preston]

There we go. When we look at this, we see, we see some step eight stuff, but then we also see some step three stuff. And then we don't have a whole lot of step four stuff. And so I think one of the things we'll be able to do is kind of like hone in on that and figure out where that is now before we dive into that, because that kind of shows you where you guys are today. But you mentioned you've really just kind of taken this seriously in the last, you know, couple months. Couple years.

[Aaron]

A couple years, yeah.

[Brian Preston]

Walk us through the story getting here. Right. Like, what was your prior history with finances, like, growing up? What was your background? You said that you guys came and it was sort of a blended family coming together. Walk us through how that was from Like a financial perspective.

[Aaron]

I was never good at budgeting or anything like that. I got really lucky when I started my job that someone told me, hey, make sure you get that, that company match. And I've been doing that the whole time. That's great. But that's it. I just did the bare minimum match. And then I ignored it until like after I met her. And one day she's like, hey, how much, you know, how much you got in that 401k. And I looked and it's been like, you know, 12 something years before I've even thought about.

[Brian Preston]

Yeah.

[Aaron]

And there was like 85,000 in there.

[Brian Preston]

It was your mind kind of blown away. Like, okay, I just kind of set it and forget it and let these. And holy cow, I've got almost six figures of something I didn't have to think about. Yeah, that's. That in and of itself is a testament to what money can do when you leave it alone and let it do the thing that it's supposed to do.

[Bo Hanson]

Automatic for the people. If you just, just let it happen and do its thing, it really is an amazing thing.

[Aaron]

But like, that's, you know, that's my story. That's where I got where I am now. I would take my expenses and list them out and say, okay, here's how much money I have to buy car parts or there's a car I've been looking at, I can save up for a couple of months and get it. That sort of thing. It was like balancing a checkbook, you know. But no, there wasn't a budget per se.

[Bo Hanson]

That small decision, though, I love that because that's a part of our big saying is small decisions create massive results for the future. And I love just hearing that one little decision. Somebody nudging you? They did. Hey, go sign up for the 401k. Get the, get the match. I mean, it's going to, we're going to, we're going to blow your mind at the end of this to show you a plan to get you through some of this debt. You're about to share your story. You probably feel a little behind in some areas. We're going to show you a path out in that little decision. It's going to be a bunch of little decisions, but it's still so exciting and I can't wait for us to.

[Aaron]

Share it with you. I can't stress how unimportant that felt too when I did it back. It's like, okay, fine, I'll just, you know, someone told me to do It.

[Bo Hanson]

I'm going to do it. You choose your hard. You. You chose. It's easy. The younger you start. Your heart doesn't have to be until. We're going to get to the heart in a little bit, though.

[Brian Preston]

That's right.

[Caitlin]

I had my daughter two weeks after graduating high school, so she's been a big part of it. And it took me eight years to then get my bachelor's degree. And in that time, I then had my second kid in there. I'm very, very grateful my parents let me live with them so that I didn't have to worry about living.

[Brian Preston]

Sure.

[Caitlin]

Necessarily. I got my first job after college. Oh, my gosh. I am gonna be all emotional. It's okay.

[Bo Hanson]

It's okay.

[Caitlin]

And then covet hit.

[Bo Hanson]

Yeah.

[Caitlin]

So I lost that job. I met him in the middle of that. Took a long time to find another job. And I actually found another job in Kansas because I was living in California at the time. Moved out here, and then I went back to school for my mba. I got my current job with my mba. So it was great. I, like, doubled my income. I got all these great benefits.

[Aaron]

It's remote.

[Caitlin]

It's remote. Yes. That's the best part. With kids, being remote is great.

[Brian Preston]

Yeah. So what I'm hearing you say is I imagine if you were going to write your story early on in life, you might not have written it the exact way that it turned out. Certainly from a financial perspective, some things happened that went differently than you thought. And it was pretty difficult, I would say. Right. Like what you're describing to me sounds like a very hard road to go down. But you did do some things. Like you took eight years to go get your bachelor's degree, but you got your bachelor's degree.

[Bo Hanson]

Stick with it.

[Brian Preston]

Is amazing.

[Bo Hanson]

You're not giving yourself enough credit, your master's degree.

[Brian Preston]

And here you are at 32 years old, and even though it's not been the easiest path to get here, you've still been doing the things, hey, I made the company match. Well, then I woke up during maternity leave, and I started paying attention to my finances. And I recognize even though the path was not as easy as maybe I wish it would have been, or it didn't go exactly, I thought, I recognize that right now I can impact what the future path looks like. And I think that's amazing because I think so many people out there have that exact same story. Hey, so life went differently than I thought it was going to go. But where I am today, I know I can't go back and change the past decision. What I can change is what I do moving forward. And that's exactly where you are and I think that's awesome.

[Bo Hanson]

Our goal, like we told you before, we turned the cameras and the lights on, was we want you to come out of this better and feeling like you have a path forward. But this one stuck with me. When I was reading through the notes, it said this is what you had shared with the team. I feel like I have dragged my husband backwards financially with bringing two kids into the relationship and no savings or 401k before the last three years while he's been contributing to a 401k for the last 12 years. Now you all seem like just in the short time, I don't feel like you're holding any grudges or. I mean, I don't do that.

[Caitlin]

He doesn't. This is all me.

[Bo Hanson]

It's just something you're trying to process.

[Caitlin]

Yeah.

[Bo Hanson]

And then the second thing, I can tell you're hard on yourself just by these quotes. Guilt around having a 13 year old growing up too fast and not getting the same opportunities as her younger siblings. Now, we saw her, we've met her, she seems lovely.

[Caitlin]

She's a fantastic kid.

[Bo Hanson]

Have you ever heard of desired difficulties? It's not that you want bad things to happen to you in life, but sometimes you find out that bad moments in life can actually create positive things. We're all going to have struggles in our life, but I often think about. What's funny is my own mother was. We were having a conversation. Anybody who's read Millionaire Mission, you know that, you know, my father was laid off. We had a bunch of financial difficulties when I was a kid in middle school and my mom just in the last week had said, I just sometimes feel like I was too hard on you guys for the wrong reasons. And I said, I'll stop you right there. I was like, what you don't realize is that sometimes in hard moments, some of the best things come out of it. I would ask you, as we make it through the process, we're going to give you the financial answers. You're going to see how you get yourself out of this. But you need to be better to yourself to know it's okay. And you got a husband that loves you and you've got to create a plan. This is going to be awesome. It really is. And I want you to forgive yourself or at least let yourself go to enjoy the moment as much as possible.

[Brian Preston]

Well, what I love is as you sit here right now you are in this position to change. You are in this position to change the direction you're heading. And what's awesome is you have actually already laid out for us a plan that you guys have sort of based on some of the decisions that you've made and how you're kind of trying to right this ship. And one of those things you already mentioned was around debt payoff. You said, hey, we have this goal of how we're going to pay off the Subaru and then we're going to pay this stuff off. And we thought it was great. So if you look at your current debt payoff plan based on the way that you're paying now, we know that you're about to have some daycare costs that are going to come your way. And that again, that's expensive. We know that. But for the next two months, we don't have those daycare costs. We know that we have some free cash flow, $700 for the next two months that eventually will be consumed by daycare. But right now we can throw at the debt. And then you also have a bonus coming your way. The after tax amount is going to be about $3,300. So again, you have some capital coming your way, which is wonderful. So if you take those and you throw those at the debt and you keep paying the minimum payments, you have this really great plan in place where you can see that you, you'll have all of this debt paid off in four years and eight months, right? So let's just pause for a moment there. There is a plan for you guys to get out of debt, right? But I think it's something we can improve upon.

[Caitlin]

I think it's a long time.

[Brian Preston]

I think it's something that we can make a little bit better. And one of the things we have to do is really think through the debts that we have now. We already showed you on the network statement that both of you have some student loan debts. And in our opinion, not all student loan debt is created equal. If you're working through the financial order of operations, you know, there's step one and there's step two, and then step three is high interest debt. Well, not all debt is high interest debt. And when it comes to student loans, in our opinion, not all student loans are high interest debt. So we actually broke out your student loans, each of you, to show you kind of what we would consider to be the high interest ones versus the low interest ones. We have this sort of this rule of thumb that we say if you're in your 30s and the interest rate on your loan is above 5%, that probably qualifies as high interest debt. So those should be like step three things. Anything that's not above 5%, that's probably not step three. That's probably like step nine low interest debt or something you focus on later on, like maybe once you get into your 40s. And so you can see that when we look at your high interest debt here, you have about $28,000 of student loan debt, plus you have the $29,000 of auto debt. So we have some things we know we want to begin knock plan in place will have you move through this over the next four plus years, Right? So we said, okay, what if, what if we could improve upon that? Right? Because we asked you, hey, where do you think you are in the foo? And you said, well, I know that I'm in step three, but I'm in step three and I'm also, I'm also doing this one over here and I'm also doing well. One of the reasons that we designed the financial order of operations was to tell you what you should do with your next dollar and like. And it's about the very, the very best use of your next dollar. So we think realistically there is a, there's a strategy available to you guys where you could redeploy some of your dollars, where if you were to adjust how you write the ship on the fu, you're going to have an opportunity to knock that debt out a whole lot quicker. Does that sound.

[Caitlin]

Sounds wonderful.

[Brian Preston]

That sound intriguing.

[Aaron]

Yeah.

[Brian Preston]

All right, so let me walk you through our plan of what we think would look practical from a debt payoff.

[Bo Hanson]

This is when I get excited. So this is, this is fun.

[Brian Preston]

So right now we know that, Aaron, inside your 401k, I think you're putting like 10% in your 401k.

[Aaron]

Yeah.

[Brian Preston]

But you don't have to be putting in 10%. Right. You get an employer match and your employer match has a required contribution of what was it, 6%?

[Bo Hanson]

6%.

[Brian Preston]

So you've made the decision, hey, I want to save more than that. I'm going to save 10%. But you only have to save 6% to get your maximum employer match. Right. So one of the things we think that could likely make sense is, hey, maybe we should decrease your 401k compensation contribution to just get the max. Again, we're working through the foo. Step two is maximize employer match, then start paying off high interest debt. You kind of jumped all the way to step six by putting 10% in.

[Bo Hanson]

We love saving for retirement, don't get us wrong. But you guys need to triage your personal situation now. And I think you'll find if we can do just some short term attack this high interest debt, you're going to be able to come out the other side of it stronger and better to throw more at retirement in the future. Because we, I don't want to minimize how important it is to save for retirement. It's kind of like your small decision just to get the match got you to this point. But we do need to take a slight step back so we can focus triage, as I say, the most important thing in your life right now. So I just want to put that because I didn't want anybody out there in the audience to watch this and go, man, they're cutting back their retirement. Yes. And sometimes in life you have to take a step back, back in the foo. It's not a, you know, walking up a stair step. It's actually you might have to pull back to adjust for life's events. And that's what we're doing today.

[Aaron]

Surprising. See, I got tricked into raising that to 10% because when you log into the Vanguard website, do you want to have a short.

[Brian Preston]

Yeah, sure. Well, I'm like.

[Bo Hanson]

You are if you don't change it now, if you. This is, this is a temporary triage moment. We're fixing where you got some leaks in the system and then we're going to come at it with even harder force because we recognize that's why it's got. But I need you to feel some, some, some pressure on this too, is that it is not a good thing to cut back the 401. That is a, this is a temporary measure to, to stop taking on the water of, of debt and all these other things that are stealing the money from you.

[Brian Preston]

And Caitlin sounds like you're doing the same thing right now. You're putting in 10% into your 401k also, which normally would be wonderful, but it's more than what's required to get your match. In order to maximize your match, you only have to put in 8%. So you are again, you're in step six when you should be in step three. So one of the recommendations we're going to make is to decrease your 401k contributions. And then it also looks like you have $50 a month going into an after tax account. Now we're at like a step seven over here, kind of. Right. So we think that if we can restructure some of these. Right. Decrease the 401k contributions, do away with the brokerage account and then this one is a hard one. We know that right now you guys are saving about $400 a month to your 529s.

[Bo Hanson]

Very noble.

[Brian Preston]

Which is awesome. We love our kids, we want to be able to provide for our kids, we want to be able to provide them opportunities. But when we look at your financial situation and where the dollars could be best utilized, I don't think 529s is the answer right now. And it's not a. It's not a no. Never. It's just a no. Not right now. Those dollars might be able to be used elsewhere.

[Bo Hanson]

So how does that make y' all feel though?

[Caitlin]

Makes me very nervous.

[Bo Hanson]

It hurts too, doesn't it?

[Caitlin]

It does because you feel like you're not doing it. Especially for the 13 year old who doesn't. She's, she's got to be in high.

[Bo Hanson]

School and she's so awesome. But that's use that power that you're feeling right now to also motivate you to do this that much faster. It is good to fund the 529, but you have to take care of your finances first. Otherwise what is the future hold if you're setting her up, that y' all are going to have shortfalls in the future that's going to make you do this that much faster.

[Caitlin]

Yeah. Especially since starting funding the 529s was like a big step for me.

[Bo Hanson]

Sure. You do realize the 529s are bigger than your savings account right now.

[Caitlin]

Yes.

[Brian Preston]

That's a problem. That's a.

[Caitlin]

New.

[Aaron]

I didn't pay attention. That's interesting.

[Brian Preston]

Okay, if we, if we do this, if we decrease Aaron's 401k contribution, still going to get the match and we decrease Caitlin's 401k contribution, still going to get the match and we decrease the brokerage contribution and we reshift the 529 savings. So instead of putting in the 529, we now have it going towards debt. What's actually happened is pretty amazing. You're still saving like you still. Because you're putting enough to get the match and with those matches, you guys still have almost a 13% savings rate. So it's not like you're cutting your savings all the way down to the quick. You're just cutting them down to the minimum threshold. You're still going to be having 13% go towards building for the future. But with doing that, you now have an extra $884 every single month that you can throw at debt. And by the way, this did not change your cash flow. These monies were already going in one direction. You're just shifting in to what direction they go now. So 884 additional dollars going towards debt. Pause there for a moment.

[Caitlin]

Didn't realize it was that much.

[Brian Preston]

Right. Like, like you think about some of those debts you have. Imagine if you had almost $1,000 knocking them out every single month. Then you can like physically see those numbers start to decrease. All right, so we had your plan about how you were planning on paying off the debt. Let me show you what happens when you implement our plan. If you were to do this, and we're going to talk about the budget in a second, because if you can do this and then we can look at your budget and you could come up with an extra $500 a month. We haven't changed any cash flow yet. We just shifted. But we do want to change our cash flow and have an extra $500 a month that could go towards debt. If we do that, we have the $700 for the next two months before daycare. Going towards debt. We have your bonus. We throw that towards debt. We redirect to realign with the financial order of operations and we can find $500 a month extra from the budget. Look at what happens to your payoff date.

[Bo Hanson]

Do you see how fast that is?

[Brian Preston]

Instead of taking four years and eight months to be debt free, except for your mortgage and low interest debt, you now have it all paid off in one year and 11 months.

[Caitlin]

Doesn't seem quite real.

[Brian Preston]

Two years is doable.

[Bo Hanson]

You can do anything for two years. All the things you've had to struggle with, you know, that took you eight years, but you're. I know you have tremendous stick with it. So you can do two years like in your sleep. That's nothing for you guys. We're going to dive into where is this $500 going to come from. But the big thing is I want you to take the energy of man. I want to get back to funding the 520. I want to get back to the retirement to be the power. Because we're going to pick on you a little bit too, and I'll let you kind of lead us into the next transition. But I'm worried you guys have just been tracking your expenses, thinking you're budgeting, but you're tracking. You're not really budgeting. And we can explain.

[Aaron]

We're trying really hard I mean she has a budget. It's a great budget. Like it's like 100 pages long and we, we're doing.

[Bo Hanson]

I would.

[Aaron]

Well, yeah, we're doing pretty good. But you're right, we're not like sticking to it. Great. We, we just live a hectic life. Like, yeah, sure, I get something coming up.

[Bo Hanson]

You're in the middle of the middle.

[Aaron]

It's almost every week.

[Brian Preston]

Well, let me ask you this quick because I think this will be, this will be valuable for other people. Hear this. When you put together your budget and you say, I'm going to make up a number, hey, we're going to have a hundred dollars eating out this month. That's gonna, that's our budget. What happens when it's the 15th or 16th of the month and you hit that hundred dollars and the next time you go to whatever, wherever it is, do you not spend money or do you just. Oh, we're gonna go over the budget.

[Caitlin]

This, it becomes a. Oh, we can take this from some of our.

[Brian Preston]

So that's where it becomes tracking. Because what happens is. And we all fall prey to this. Like we'll put all of our expense and we'll categorize them. Alright, this is going to be $500 a month. And when I get to the end of the month, look back and it was $762. Oh, I missed it. Like that's one of the things we have to do is have to figure out, okay, how do we actually build a budget that we can stay within? So you guys are great. You provided us a list of your expenses. We thought it'd be helpful to kind of look through those and we did some of the work for you. We went ahead and color coded, categorized them into what we call needs versus wants. And here's what's great. You guys have great shovel with good income. We look at your take home pay. You have over $9,000 a month of take home pay coming from the two of you. So you have opportunity here. So we put together this list of needs and wants and what we're trying to figure out is, okay, how do we find $500? Now we went ahead and gave you the benefit of the doubt daycare. We went with a new daycare amount. So you'll see that very bottom of needs. 1350. We went ahead and factored that in. Right. So I just want you guys to look through this. Where are some areas that we can trim or where are some things that you see like man, okay, all right. School lunches. I'm assuming that's paying for lunch at school. Is there an opportunity? Oh, maybe we make lunch once a week, twice a week. Is that a thing that could happen?

[Bo Hanson]

Let Ellie have like, she chooses the days that are the days that she'd really like to. Because maybe it's pizza day or whatever. Speed. But there's just, just, you know, get creative with ways that you can, you can trim that down a little bit.

[Caitlin]

The nine year old very much enjoys packing her lunch every single morning. So she does do that one.

[Brian Preston]

Awesome. Okay.

[Aaron]

Thing with that is we're already pushing our groceries budget. You know, it's like, can we, can we make that work?

[Brian Preston]

And then obviously there are some things that we want to, we want to be mindful of. Like one of your biggest wants is kids activities, right? Well, here's what we don't want to say. Don't let your kids do any activities. But you do have to be realistic around. Okay. Are the kids activities the ones that makes sense for them to be doing? Are they doing too many? I know sometimes my wife and I had like, I got my kid doing three different things all in one season. I'm like, hey, maybe we could rein this in a little bit and focus on one thing in this moment. We're not saying that we want you to cut those things out, but we are saying that again. We're going to show you how long this is going to take. This is short term pain. Short term pain. But if the kids activities are something, hey, we're not willing to waiver on that. That's not something that we're willing to waiver on. That's okay. The beautiful thing about a budget is you get to decide what's important to you. You get to decide the things that matter and the things you can do away with. But if you're not going to cut kids activities, maybe fun money isn't so fun anymore. Or maybe other needs to be. No other. Right. Like you have to figure out where that $500 can come from. So as I'm kind of talking through this, are you coming? You have some ideas?

[Caitlin]

Like, okay, kids activities. 300 of that is for competitive dance.

[Brian Preston]

Oh, yep, yep.

[Aaron]

That'll be discussed it.

[Brian Preston]

That'll do it.

[Caitlin]

Which has been discussed.

[Brian Preston]

That'll do it.

[Bo Hanson]

Look, I don't, I, I'm not gonna tell you to cut out the dance and stuff. Other things, but I, but if there's just anything extra. I know because going back once again, when I was younger, my parents had to sit me down because I had something Going on every day of the week, Piano lessons one day, baseball the next. And then, you know, it was. And finally they're like, my mom was. Not only was it costing them financially with money they didn't have, but my mom was turning into. This is before Uber, but she was essentially transportation director for everything that was going on. So we're just saying trim it down. And here's the thing I'll go ahead and introduce. We want you to be doing what's called zero based budgeting. Meaning that. Yeah, I mean, because that's where you guys. It's back to the point y' all are tracking. You're doing the hard work of tracking, but you're not holding yourself accountable to where I feel like there's this pressure that creates the success. It's back to Bo's example. Is that just like the coffee, I mean, I know that you like to go get the coffee.

[Caitlin]

I actually did cut that out.

[Bo Hanson]

But I'm not saying you have to cut it out completely. But there's this thing about scarcity. It's kind of like whenever I've done any type of fasting or anything else is that when you get to actually, when you create a scarce element, do you know how much more you enjoy do get to do it versus take it for granted when you just do things all the time at a lot of frequency. So, I mean, that's why everything we're going to talk about on here is gamifying the system. Because remember, two years we're talking, if you guys hit this hard and you gamify this where every month y' all are sitting down as a couple and you're saying, let's look at what we actually budgeted. Not just tracked, but budgeted to spend. Did we go over what were we under? Because then you get to move the pieces around where you celebrate. Maybe you celebrate. You say, hey, we were so good on saving this much. Let's go. It's okay if we do go out to eat this month. So we keep our energy up, we keep our motivation, but you gotta gamify the system and you'll talk about it as a couple and celebrate the successes. But then also keep kind of a. I don't care if you have a calendar. It's like a prison sentencing. You're like literally putting tick marks on the calendar is if we can reach this and put the dollar amounts on each month of how much you exceeded the savings, you're going to turn this into a fun activity. The hard stuff. What I love is when I've talked to entrepreneurs, I've talked to people. Sometimes when you say what were your favorite memories? And I even talk about this in the book as well. It can be some of the hardest times of your life because you're in it together. That's why you hear about couples who move to brand new cities and they know nobody but their marriage got stronger is because the adversity of the situation actually brought them together to feel like they were in this and tackling it. Can you imagine? I just want you to daydream and visualize what it's going to feel like two years from now. We're going to show you the numbers and you just ought to print these things out. We'll send you the PDF and just hang them up right next to that calendar where you're doing the Prison Markoffs and you're going to be like, we did it. I mean, that's why we can't wait to probably even do an update show and just say, look how good Aaron and Caitlin have changed their lives with just two years of sacrifice.

[Brian Preston]

And you guys have done the hard work of, you even put together categorically how much you want to spend. So even if you said, guys, look, these numbers are, these are, these are bare bones, this is as low as we can get them. Because Brian mentioned you're not zero based budgeting. There's still an unaccounted for $370 every single month. That does not fit in one of.

[Bo Hanson]

The catego going over and just going, oh, it'll be all right.

[Brian Preston]

So if all you did was stick to the numbers here, that's 370 of the 500 you've already found. Well, now all you got to do is find an extra 130 bucks somewhere throughout the course of the month. So that's going to be one piece of your homework is, hey, we got to find $500. How can we find that extra $500? Because then it gets pretty exciting. We already told you that we're going to trim down the debt and I want to show you a visual, right? If you think about debt being a mountain and how long it's going to take you to walk down the mountain, this is your plan. November of 2029 is how long it's going to take for you to walk down that mountain of debt. But if you can make these hard decisions and you can make these adjustments, watch how much quicker you get to the bottom. February of 20s, 2027, right? Like that's that. That takes a ton of time. Off. And remember, our goal is to get you back to building, back to where you want to be. Because we've already established that you're in step three, so everything should be focused. And step three, quick pop quiz. What comes after step three of the financial order of operations?

[Caitlin]

The fully funded emergency.

[Brian Preston]

Fully funded emergency reserve. So then once we get to February of 2027 before we can start building, before we can increase the savings again, then we got to focus on that emergency fund. Now we've used your budget and we figured out that for six months of living expenses for you guys, it's probably cash on hand of $48,000, right? That's about $8,000 a month burn, burn rate for six months. So if you just take all the money that you freed up from debt because now you're debt free and the 500 and you have about $2,400 a month that can go to that emergency fund starting in February of 2027.

[Bo Hanson]

By the way, we just didn't make up that number. That is actually how much you will have available because you won't have the debt. The interest that's being paid on the student loans. That is, that, that's not a random number. That's the number that will just be now free and available for you guys to start saving for the future.

[Brian Preston]

So it will only take you one year and three months to build up to $48,000 in cash in a fully funded. So we were at 1 year and 11 months to get debt free plus 1 year and 3 months now to have a fully funded emergency fund. So that is three years, roughly 36 months before you are righted on your ship and in the position where you get to move forward towards your great big beautiful tomorrow. How's that? First of all, how's three years sound?

[Aaron]

It's. We're still less than the first.

[Caitlin]

I know.

[Bo Hanson]

You'Re close to debt free at that point.

[Brian Preston]

But here's what I think is awesome. Because the foo is structured the way that it is and because you still are getting your employer match and you're still putting your money to work, we thought it'd be super fun. Okay. We saw what your net worth statement looks like today. What's it look like in April of 2028? What does your net worth statement look like if we stack up where you are today versus where you are if you implement this? And we said, hey, we're just going to follow the debt payoff plan. We're going to assume that our 401ks can make 8% on average over the next three years, we're going to say, hey, the house appreciates in value by 3%. Cars depreciate, get less valuable. And for all the low interest debt, we're just going to keep doing the minimum payments just like we're doing. If you guys can do that three years from today, when you look at your net worth statement, instead of your cash only being at $12,000 now, your cash is at 48,000. Instead of your investments only being at 121,000. Even though you decreased your saving, your investments will have grown to almost $230,000. Your car, your cars and home are worth 298 because they've increased a little bit. There were 309,529s. Even though you're not putting any more money in them, you're not adding anything to them, they're still going to keep growing because that's the way compound interest works. They'll be worth almost 37. Your mortgage balance will have gone down to 146,000. You will have no car loans, completely zero. And your student loans, low interest student loans are down to just under 19,000. So today your net worth is $192,000. If you can implement this plan three years in the future, when you do your net worth statement, it could be worth almost $420,000.

[Bo Hanson]

How does that feel?

[Aaron]

She's smiling.

[Brian Preston]

Good.

[Caitlin]

In three years.

[Brian Preston]

In three years, if you guys get serious about this, in three years, your net worth can double and your debt load can cut down into a fraction and your assets can still build and you can take control of your financial life. Because right now you're having to make hard decisions to figure out how to fix this. Once you get to this point, then, and this is the exciting part, you get to pick and choose what you do with your dollars.

[Bo Hanson]

I also want to give you another piece of good news. You know what else happens probably in three years? That $1,400 a month that's going towards daycare, it's just gone.

[Brian Preston]

So you know that our goal, once you get through this, once you get past step four and you get into step five, six, seven, our goal is for you to get to saving 25% of your gross income. And we already know that with your employer matches and with all the debt that you're going to be freeing up, hitting 25% is not going to be a difficult thing for you guys.

[Bo Hanson]

You're already doing 16 before we adjusted this. You're not even that far off. So post and then post daycare, it's going to be even easier.

[Brian Preston]

And I want you to think you have said, caitlin, man, I just. The life that was the last 10 to 15 years was different than I would have maybe designed it. Where I am today is what happened for those 10 or 15 years is going to define what my future looks like. And we think if you guys take this seriously, it doesn't have to. Because watch what happens when you start saving 25%. Three years from now, you will have $226,000 in your investment portfolio. You won't have any debt. You'll have a fully funded emergency fund. You'll have free cash flow. And if you can save 25%, we think that by the time you hit 45, your portfolio is gonna be almost $800,000. By the time you hit 55, two and a half million dollars. And by the time you hit 65, normal retirement age, you guys could have a portfolio worth almost $6 million. Now this assumes no pay raises. This assumes no pay increases. This assumes no windfalls. This just assumes that just like you said, hey, when I first started, I did the employer match and I said it and forget it. This is the same thing. Three years from now, when you have righted the ship, you start saving 25%, you set it and forget it, you run your way from $230,000 to $6 million by the time that you retire.

[Bo Hanson]

Now, we went aggressive on behavioral things you guys need to do, but very conservative on the financial assumptions. So this could actually. Because you're gonna get pay raises, things will get better. But those pay raises and your aggressive behavior in this short term period, because I know Katelyn, you also have this goal of maybe at 45, transitioning a little bit on how, you know, between raising the family and then workloads, we want you. The harder you hit this, the more deliberate you are with your behavior in this period. You need to be aggressive. It's going to give you more flexibility. And the other thing, and I want to get Yalls feedback, but I did want to draw attention to. We put on there because sometimes, you know, right. You put. You just run compounding growth. You see these big numbers, you need to inflation pull it back to present value so you can see what this actually means for you. You take into account inflation, you can see these numbers still bring it into where if you stayed on this path, six figures of free cash flow coming to you guys in retirement, that's. That's massive. That's not taking into account Social Security. That's not taking into account. I know you've got potentially a pension and once you vest and all this stuff. So there's other cash flows. So that's why I think you'll have even more flexibility post 45, like you're hoping for. But you've got to do the hard work now so you get those chances.

[Aaron]

I had an expectation before I even married her what I wanted to retire with. Quick, funny story, just a guy I worked with when I first started there, just a union shop guy, he said, I'm gonna retire with a million bucks. And my first thought was, no way.

[Brian Preston]

Like, that's so much.

[Aaron]

This makes no sense. And I blew it off. And then, then after we kind of got into talking about all this stuff, it's like I. I think I'd like to have like personally in my 401k like with inflation and everything, like two and a half or something.

[Brian Preston]

Okay.

[Aaron]

You know, just to be comfortable. That's blows it out of the water what I expected.

[Brian Preston]

We think you could do that with this plan by the time you get to age 55, right?

[Aaron]

Yeah.

[Brian Preston]

That's what's amazing. And these are conservative assumptions.

[Caitlin]

I've always wanted it to hit like three to four. So for that to hit close to six is a little mind blowing.

[Brian Preston]

So here's the question. Can you do it? We've laid out what's possible, but we've done our part of the equation showing you what can be done. We've given you the steps to do. Now the question is, can you guys do it? Can you make the hard decisions over the next three years to find the $500 and to decrease the savings and to redeploy the dollars to start moving you along on this path.

[Aaron]

Yeah. I mean, we're both committed to getting that debt paid off as soon as possible.

[Bo Hanson]

It's going to be small little moments. Just like Aaron, you, Sharon, that coworker who just said, hey, just make sure you do the 401k that that's going to change your life. And now I think it's going to be one of those fun things. Hopefully three years in the future. It's going to be like when Caitlin says, hey, I applied for this show. Should we do it? And y' all go look back and go, that small decision has been now another. It's not even a branch of the tree. It's potentially the root of the tree that grounds this thing to create a level of success that you guys never thought was possible. It's amazing.

[Brian Preston]

All right. Before I Give you your homework. Any questions for us? Anything we left outstanding. You want us to speak to.

[Caitlin]

My 401k contributions go into the Roth 401k. And I know you guys love the Roth IRA, but is there like really a difference between the two?

[Brian Preston]

So there are some differences. The biggest of which that exists for you right now today is that, remember, we're going to go backwards in the foo. We're going to go to step two, get the employer match. So yours has to go in your 401k so that you get that employer match three years in the future when you're now saving that 25%. You've moved through step four. Now you're in step five. We can talk about, okay, when I increase my 401k, should I increase it in the 401k or should I do a Roth IRA? And there are merits to both, but I'm thinking if you guys can put this in place, it's not going to be an either or for you, it's going to be a both. But that, that is a conversation for three years.

[Bo Hanson]

But we do like that you're choosing the Roth. With where you all are from an income standp point in your ages. I think you choosing the, the Roth side of it is, is, is a good thing.

[Caitlin]

Yeah, I got that one from my dad. They've retired and my dad's like, I play with where I'm pulling money from in retirement to like figure out taxes and stuff. So I'm like, okay, then I want the different ones so that I can do that too.

[Brian Preston]

I love it. All right, here's your homework. Step number one, we gotta fix your foo. That's what I'm calling step number one. That means we gotta decrease our 401k contributions for both of you. We're going to shut down the $50 a month brokerage contribution. We're going to shut down the 529 contributions and then we're going to take all of those and we're going to apply them towards our debts. And we're going to go with the avalanche debt method. That means we're going to list out all of our debts. We're going to start with the highest interest debt first. We're going to pay it off until it's gone. Then we're going to the next highest, next highest, next highest. In addition to that, you guys are going to sit down with your budget and you're going to find another $500. You're going to take that $500. Same thing apply it to the debt. We're going to go avalanche method. We're going to knock it out, knock it out, knock it out. We're then going to get through all the debt. Next step of homework, we're going to build our merchant fund based on what we think you're spending is. Your goal is going to be $48,000. That's going to sit in a high yield account earning interest that you're not going to touch and that's going to cover six months of living expenses. Once you've done that, then you get to go off to the races. You're going to start saving 25% for your future. And the last homework item I wrote down was this is going to change your life. It's going to change what your future looks like. If you guys can do this.

[Bo Hanson]

Caitlin, Aaron, thank you, thank you. Thank you for coming on the show. This has been an absolute blast. Bo, if others out there see this and they're motivated to want to come on Making a Millionaire, how do they do that?

[Brian Preston]

Yeah, if you are a millionaire or a millionaire in the making and you like to be on the show, you can go to moneyguy.com apply or if you just want to access some of our free resources, you can go check out moneyguy.com resources.

[Bo Hanson]

Guys, there is a better way to do money. Thank you for joining us. I'm your host, Brian Preston. Mr. Bo Hanson. Money got team out.

[Brian Preston]

Making a Millionaire is hosted by Brian Preston and Bo Hansen. Brian and Bo are partners at Abound Wealth Management. Abound Wealth Management Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, a Bound Wealth Management does not render or offer to render personalized investment or tax advice through Making a Millionaire. The information provided is for informational purposes only, may not be suitable for all investors and does not constitute financial, tax, investment or legal advice. All investments involve a degree of risk, including the risk of loss. The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.