B (1:53)

Okay, so once we pay off the car with the savings that we have now, do we just keep 1,000 in there? Or because of our expenses, say our mortgage and whatnot, should we keep a little bit more money than 1,000 in there?

C (2:07)

The thousand dollars does not change based on expenses or income. It's a flat thousand dollars and it's not meant to Cover everything. And so if something did occur where you needed more than $1,000 to cover an emergency, you would simply pause the baby steps. And that next check that comes in, you would use toward the emergency. You'd sell stuff, you'd work extra. You'd cut your lifestyle down to nothing until you got through the emergency. Now we're back to the baby step to paying off our consumer debts.

B (2:38)

Excellent. And now the next one would be, obviously, from what you said, I should not. We should not be borrowing from our 401 because of the interest. We'd be missing out on the accumulated interest.

C (2:47)

Yeah. There's like 14 reasons why it's a bad idea, but we won't get into that today. Just if are you committing, live in front of America that you are done borrowing money? That's the big question I have for you. No more leases, no more 0% cards, no more borrowing from retirement. Are you guys done with debt?

B (3:05)

Yeah, we're done. That's kind of where 100%. I'm more committed than I would say. My wife's committed too, and I'm very committed on it because I'm tired of living the paycheck to paycheck life. That's just for what we make and what we do. We should be able to be fine and live way better, you know, at least have more money in the savings. So I'm 100% committed. It's just these few of these questions that I'm having. I'm trying to rationalize in my head to get my head around, wrap around how I. How you guys want us to do this.

C (3:31)

Have you guys ever created a budget together where you actually sat down and said, all right, here's the paychecks coming in. Here's all of our expenses for the month. We're going to track our transactions.

B (3:39)

Sir, we just had. We've been married. We've been together almost 20 years. And about maybe two, two and a half years ago, we just put our accounts together.

C (3:46)

Wow, congrats.

B (3:48)

Yeah.

C (3:48)

Welcome to the big leagues.

B (3:50)

Yeah, I know, right? That's when we paid off the debt, and that's when we started, you know. Okay. We need to accumulate. So primarily what we do right now is most of our stuff comes out of our savings account, slash checking account. And then we, like for groceries and other things that we have to buy for the most part goes to the credit card, and then we just pay the credit card off. Every.

C (4:11)

There's a new character has entered the scene here. The credit cards. Tell me about those. Yes, sir, how many do you have and is there a balance?

B (4:18)

It's just one. And there's usually there's only the balance for the week prior, which is gas, if we get groceries, and that's pretty much about it. So we put gas, groceries, there may be a few other bills. I'm have to look to see that goes on. But we pay it off pretty much every week with every check. We don't occur a balance and let the balance hold on. So we just paid off 34,000. So we're not trying to get a balance on this. We pretty much pay it off every week regardless. Wow.

C (4:41)

So we're just. You told me you're not going to borrow money, but you're okay temporarily borrowing someone else's money with the promise of paying it back within the week. It's like, hey, bro, I got you. I got you at the end of the week, essentially. Right. And so here's my challenge to you. And I put this in my book, Breaking Free from broke. It's a 30 day no credit card challenge where you put the thing in a block of ice, you put it in a drawer you don't have access to, and just for 30 days, only use a debit card or even cash envelopes. And the goal is, let's see, if you didn't have more peace in your life, if you didn't create more margin to throw at the debt, if you didn't miss the credit card rewards you thought you were getting. And what I found is most people go, oh my gosh, Instead of the 2% cash back, I spent 10% less than I was spending.

B (5:26)

Yeah, that sounds about right. And we only did this because of my financial, my 401k guy said to do this. And the main, the main question, what.

C (5:34)

Is a 401k guy? You have a financial advisor told you to open the credit card.

B (5:39)

That's exactly what he said. He said we should have everything going on to the credit card that we pay and then just pay that off.

D (5:45)

Is that the same dude that gave you the 401k loan?

B (5:50)

No, that was from. I did that from Fidelity for my work. Because I get work and matching and I'm able to just go in there myself and take out. But that was. He told me that's what I should do in order to pay the credit card off.

D (6:00)

I say this with all due respect. You got to fire that guy before the day is over. Get a new guy.

B (6:04)

I, I've been feeling like that. I just told my wife today, just the other Day I told I go. Something's just not right with what our what. What this guy is doing and I'm just not feeling right about it.

D (6:15)

You've been following his advice for years and you're broker than ever.

B (6:19)

Yeah, yeah. I can't, I can't deny.

C (6:21)

Are you guys still investing as well? My guess is you're still putting some money into retirement.

B (6:26)

I am. At 8%, I think I get a 3 and a half to 4% match from work and my wife is roughly around the same. We have rolled over a previous 401 into this Roth with this guy.

C (6:38)

Correct me if I'm wrong, but I didn't know you could contribute to your retirement once you take a loan against it until it's paid back.

B (6:45)

I can contribute. Yeah. The contribute. No, mine is it takes a certain portion out on top of my percentage that I'm putting in.

C (6:53)

Okay, well here, here's another thing I would encourage you to do is to stop all investing until this mess is cleaned up. Because right now you're doing 17 things at once and you're not seeing progress on any of it.

B (7:05)

I gotcha with the debit cards, you're saying just go to debit card and just don't even worry about credit cards. On.

C (7:10)

Exactly. I've been living that Life for like 13 years. I'm going to send you a copy of Breaking Free from Broke. I cover the whole debit card credit card thing in the credit card chapter. So read that and I'm going to hook you up with every dollar. This is going to be like John and I in your pocket coaching you 247 with new recommendations based on where you're at financially and educating you along the way. So hang on the line. We'll get you the book and every dollar. I'm rooting for you, Ryan. This is a solvable problem. You make $200,000. There's no reason to be this broke.

A (7:40)

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