Why You Should Stop Investing if You’re in Debt

[Music] brought to you by the every dooll app start budgeting for free today me and wife and I are in baby step two we've just do in and found you which is fantastic however it is occurred to us that we hit tax season and we had to pay this year and we're worried about stopping our investments because we're going to have to pay probably three times more next year in taxes um so I'm really wondering what's the justification of you know not paying ourselves first and investing and more so paying the government and and losing out on some of that money even though we'll have more to go towards baby step two um how much are you putting in your 401 case uh I have a 6% and a 6% match the match doesn't count for taxes how much are you putting in the 401 Cas in cash about 540 a month so $6,000 a year yes sir and what's your household income uh 131,000 okay so this saves you $2,000 taxes okay right yeah yeah it does okay and how much debt do you have about 120,000 on what uh we have 12,000 on credit cards 50 on student loans and 16 Vehicles okay so um um I'm trying to keep from being a smart ankle um the um yeah so so you've got $120,000 in Consumer Debt you've been spending more than you make on credit cards and um and now suddenly you're worried about tax planning so um you know um sorry uh what we have found is that the power of focus supersedes a little bit of tax savings and missing out on a little bit of match for a short period of time and so you've got cars you can't afford you've been living a life you can't afford and so you've never addressed the student loans they have their own bedroom at your place and um and and you make a ton of money and you're still broke and and so and a little bit of tax savings does not fix that what fixes that is a dramatic change in Paradigm by you and your wife to completely take your lifestyle to scorched Earth and get this freaking mess you made cleaned up and uh and with that visceral emotional movement the way I just said it down in your stomach that's when you quit everything because the house is on fire and we're trying to get the family out alive and we're not worried about uh whether or or not we turned off the faucet does it make any sense yeah you're majoring in minors right um it just is that something we just need to budget for for the tax un yeah you CH you change your withholding to where you have the appropriate amount withheld so you don't have a big a tax bill above you're withholding at the end of the year but the the loss on taxes and the loss on uh the match is temporary and mathematically you come out way ahead 10 years from today because you actually do clear the debt because you actually do transform the people in your mirror and that's the key to this it's not a math problem if you were doing math you wouldn't be where you are people that do math don't buy $60,000 cars they can't afford people that do math don't have credit card debt and so um you know this is not a math problem it's a behavior problem and a and a shift in how we live and how we think and how who we are as people and that's what we're trying to get you to do and so when we start nuancing and carving off the edges around the thing it it changes it it it keeps that from occurring you have to have balanced reason balanced reasoning on both sides if you say you care about the $2,000 saved in taxes then why don't you care about the $2,000 that you're losing on interest on your student loans and your cars and your credit cards yeah that's way way more than that every month keeping that debt around yeah so let's get in attack mode and clean this out of your life for the last time Brody that's what we I mean eron that's what we would tell you to do and so um yeah yeah it's not a math problem it's a me problem personal finance is not the problem it's the symptom create your free every doll budget today the simplest way to budget for your life