"You're Pissing Away $14,000 A Month!"

Brought to you by the EveryDollar app. Start budgeting for free today. Me and my husband started a business back in 2020, and in addition to the debt I have now, we wrapped up about $34,000 in credit card debt to sustain. The last couple of years, the business has been doing great and is steady, and I was able to pay that down, just my credit card debt to $19,000. But out of the blue, I inherited $108,000, and I'm just like, what do I do with this, with all of my debt? Wow. Who died? I just need advice. Nobody died. It was just like an early inheritance while they were still alive. Who advanced you the money? My uncle. Okay. Wow. You got the rich uncle. That's very nice. I wondered where he was. Okay. He's the uncle everyone wants. So your business went through hell in 2020, and you subsidized it with credit cards up to $34,000. Yeah. And then you told me it's doing really well, but it only has paid down a few thousand dollars. What does doing really well mean? How much profit are you making? About $7,000 a month. Well, why have you only paid down a few thousand dollars then? Are you profiting $7,000 a month or you're grossing $7,000 a month? I'm, well, I'm grossing, but also I've paid, I was paying for it, just, you know, living expenses and food and stuff, but. No, I'm talking about your business. It was, my credit cards were $34,000, so they're. I know, and they're down to $17,000, and in five whole years, you paid it off about $3,000 a year, which pretty much sucks if your business is making $7,000 a month profit. Really, really hardcore in like the last year. And we kind of did things a little bit backwards where we paid for a home, um, down payment and all that. Okay. Let me go back though. Is your business making a profit or a gross revenue of 7,000, which is. And I, and then. Which is. Yes, it's making a profit. It's making a profit of 7,000. And then I also work, um, full-time at a job and I make about 7,000. Okay. So you're bringing home. Okay. Okay. So you have a $14,000 a month income and you're married. Yes. And he makes what? Um, well, he's, he was with the business with me. So that's included one of the $7,000 a month. Okay. So your total household income is $14,000 a month. Yes. I'm still not positive. You know what profit means. This is a real profit. After all business, business income minus business expenses equals profit. Taxable income is $7,000 a month. Is that what you're telling me? Hey, sorry for the interruption. This is important. No one likes to think about dying, but one day your family will have to deal with everything you leave behind. So the question is, will it be easy or a total nightmare? That's where Knockbox comes in. Knockbox is a kit with 15 categories and clear instructions that give your family an organized plan. So they're not sifting through old paperwork and guessing passwords and dealing with lawyers. So leave your family memories instead of a mess. Grab your Knockbox kit today at knockbox.com slash Ramsey for the best discount available. That's knockbox.com slash Ramsey. Taxable income is $7,000 a month. Is that what you're telling me? Yes. Okay. And are you putting any of that money back into the business? Are you guys just bringing home exactly what you profit? We're just not budgeters. I don't know. We like spend like a couple thousand a month going out to eat. But here, grasp with me here. There's a reason I'm asking all this regarding your inheritance. Okay. Because I don't want this 104,000 to enable you to continue stupid butt behaviors that are going to destroy you. I don't either. Okay. And that's why I'm trying to get to because I want to love you well here. I want to help you. And so. Yeah. And what we found there is that money magnifies what you're already doing. So you're like, we're not great budgeters. We spent a couple of thousand just eating out like all that. And that's just. This allows you to continue in that misbehavior. In a bigger way, which we don't want. Right. And so. I don't want to do now. That's right. That's right. Okay. I'm so glad. And how's your husband? Is he on board with this of changing completely how you guys are doing money? He lets me do everything. He just says you handle it. I trust you. Okay. Well, that's not good. That's not good. That's got it into. Apparently that's not working. Okay. Cause y'all suck at this. Yeah. So, I mean, we've got to adult up here cause we're pissing away $14,000 a month. So what I'm going to do in your shoes is I'm going to take the 104,000, act like I don't own it and put it in a high yield savings account. And then I'm going to go home and the two of us are going to sit down on $14,000 a month. And in three months we're going to pay off this credit card. Okay. $6,000 a month on the credit card until it's gone. And you're going to not go out to eat at all until you do that. And that money will be going straight to the credit card. And you're not gonna, and you're going to really learn what real profit is on the business. Are you keeping a separate set of books on the business? No. Yes. You are. Have you kept your taxes paid? I owe like 10,000 this year. Have you been doing quarterly estimates? Do you know what that is? I know what it is, but we haven't really been doing it. But $7,000 a month, $70,000, $84,000 a year. And so taxes on that are not $10,000 taxes on that are $25,000. Have you filed tax returns? Uh, yes. My numbers are probably just wrong. Sorry. I think that's probably the accurate statement. I'm fishing around in murky water here. I can't tell what's going on. Okay. So no, you do not need to use the $100,000. The $100,000 gift is a double gift. One, it's $100,000. The second thing is it's going to make you all wake up and behave. If you don't, $100,000 won't save you. $2 million won't save you. And so number one, the business ought to have a separate set of books. You and your husband tonight, y'all have a long week ahead. You need to sit down and listen to this. Figuring all of this out. In business, you set a separate checking account and a separate set of books for the business. Only thing goes into that checking account is income from the business. Only thing comes out of that checking account, expenses from the business. What's left by definition is called profit. Only then can you take it home. When you take it home, you should set aside 25% of whatever you take home in yet another savings account for your quarterly estimates that are supposed to be filed. If you are not filing them after five years, you are being penalized every single day for not filing your quarterlies. You're violating every IRS regulation. It's costing you out the butt. Yeah, they need to sit down with an accountant probably. Yeah. And start. Yeah. And get the dadgum business running like a business. Under the illusion, you can out-earn your disorganization and chaos, and you can't. I tried it. It doesn't work. I caught up, hit me in the back of the head, knocked the air off my head. Don't do this. Okay. It's not fun. You're going to bring pain to your life. It's not cute. And it's not okay. You're not a teenager. So you guys need to sit down, run the business like grownups. Then when you bring money home after you've set aside a fourth for your taxes and filed your quarterly estimates properly, then we can talk about how much is really coming into the house. And what to do with it. And immediately need to clean up this debt. Because if you're making $10,000 a month, it's ridiculous that you have not reduced the debt any further than you have. So no more. No more eating out. No. Well, and no more, you just take care of it. Because Sarah, you've been on an island. I mean, he's left you there on an island, and you've signed up for that trip. And so that has to end. There's no food on the island. Survival. Survivor. We don't want that. We want bougie, Sarah. We don't want- We'll kick you off the island. But sitting down and you guys together do a budget. And if you hold in line, Sarah, Kelly's going to pick up. We're going to give you total money makeover. We're going to give you every dollar. And entree leadership. Throw that book in too. And so, but to sit down and to plan out your income that you guys have that has hit your account as a household and say, here's exactly where our money's going. Rent or the mortgage. I think you have a mortgage. You said you'll have a house. So mortgage. Lights. Electricity. Subscription. I mean, you list out everything you guys spend money on. And then you're going to take a- you're going to sit there and start deleting categories because you're not going out to eat. You're cutting subscriptions. You're cutting your lifestyle to nothing until this credit card debt is paid off. And I mean, honestly, I don't know what- Start running this like you work for someone and you're going to get fired if you continue to suck at your job. Because the problem is, is if you take some of this 108,000 inheritance and just pay off the credit card debt, nothing has changed in you guys. So I would push you not to use the inheritance to pay off the credit card debt. I would force you guys to do it. You need to learn and actually participate and have the action towards this change. You have to feel it and go through it in your life. And if the numbers are anywhere near close, you're going to do it in about three months. Once you get your head screwed on. Yeah, y'all have to sit down together, Sarah. Tonight. And he has to start carrying the emotional weight of this with you. Together. This is the only way you win. There's really not another option. This is it.