"You're Not Doing Math Well"

[Music] brought to you by the Every Dollar app. Start budgeting for free today. So, right now I I'm I'm considering taking money out of my 401k to pay off my total debt. Right now, I have a total of $35,020 in in total debt. And it's really the credit card that I have that's killing me. It's a 25 It had a 27.8% APR on it, which is ridiculous. And it's just and it's, you know, what is the 35? Give me the breakdown on the 35,000 I debt. Okay. I have um 13,323 owed to the federal government from taxes. Um I have $13,250 owed to Chase. Um that's the credit card. I have $4,99 owed to my car. And then I have an additional 1,138 owed to a T to um another TD credit card. Okay. And what do you make, sir? I make um my household income is 205,000. Wow. It's a great income. Why do you owe taxes? So, when my wife and I were my wife and I have been married for 9 years, we went through a really rough cash for probably like two to three years. Um, at some point we were separated and we were just not on the same page. We used to be really um uh really intense about our uh budget meetings and we would meet every day. We we actually paid we actually were graduates from FPU. Honey, why do you owe taxes? Oh, the tax because um it was I I changed my tax I changed my tax to having um to having to being single on my on my taxes and then when I tried to change it back we don't have a formal uh HR department. So they I was making changes but there was a glitch in the system. They kept reverting back to my to a single state. So they was not being enough withheld. How long have you owed the IRS? um like a year and a half. Okay. That interest rate makes a credit card look cheap. Yeah. Yeah. Yeah. Okay. All right. The great news is you only owe you you make $25,000. So, you can clean this up real quickly on your own, but you're you're telling us you want to go borrow more money to pay off the other debt at the tune of 30 40% interest, which is effectively what you're doing from robbing the 401k early. Oh, I don't think they were saying that the interest rate was only like 5%. Oh, you're talking about borrowing on your 401k, not Yeah, borrowing it. Okay, borrowing. Yeah, borrowing on it. So, you're gonna try to borrow your way out of debt. make $25,000. Dude, why don't you just get on a budget and cut it and pay off 35,000 in like 8 months? You make $200,000. So, the thing is I'm like talking to my wife and she still wants to keep like putting money aside for our daughter and then her life insurance is also pretty very high. She has um a uh pre-existing condition that we didn't find out until we until she was giving birth. So, her life insurance is like around $200 a month and then, you know, the rent we pay is like is uh $3,50 a month. Okay. You're not doing math. Well, you make $205,000 and you said she pays $200 for life insurance as if that was a problem. That's 2,400. That's 1% of your income. That is not the problem, honey. The problem is you guys are not on a plan. and you're not working together and you're spending like you're in freaking Congress. You got to stop all investments temporarily and that includes saving for the kids temporarily and I want you to clean this up in under a year. You make 205,000. That's true. Yeah, you're absolutely right. Yeah. I mean, let's do let me do let me help you. 205US 35 is 170. Yeah, you still got 170,000 minus taxes to live on. Cry me a river. Seriously, clean this mess up. Quit trying to find a hack. The hack is in your mirror, dude. You fix the guy in your mirror and that woman standing beside him and the two of us are working together because we want to get out of debt so we can build an emergency fund so we can build our retirement so we can save for our kids and we can become wealthy and change our family tree. Now we got something to live for. It's time to get dialed in and focused. Y'all just been disorganized and lazy and and distracted by the rough patch that you went through. Now it's time to get on the game, man. And um the good news is is that you called the right people that loved you enough to tell you the truth. And the math on this is real simple when you make this kind of money. I mean, if you guys are bringing home 11 or 12,000, could you throw 4,300 bucks a month of debt? Cuz that's 8 months. You're all the debt's gone. You can still live on, you know, 78 grand. 3,000 bucks a month is 12 months and you're done, man. So, I think you can do this even sooner. But you and your wife got to get on the same page, get on a written budget, and go, "All right, spit shake. we're going to make this work. We're only going to cover the necessary expenses. Every other dollar is going to go towards this debt. And I would start with that IRS debt for a short period of time. You start with the IRS and then list the rest of the debt, smallest to largest. Pay minimum payments on everything but the little one and attack the little one. And let me help you with this. The interest rate on $13,000 worth of credit cards when you pay it off in eight or nine months is irrelevant. The amount of math on that, the actual dollars that math creates is irrelevant. It's not the problem. If you're going to keep the credit card for 15 years, the 27% interest rate's a problem. But we're going to keep it for 15 minutes. You need to cut them all up. A TV credit card. Come on. Was that T? I don't know. TD. Maybe TD Bank. Maybe that was it. I couldn't hear it. Oh, I thought he bought something off the television. Oh gosh. I hope not. Yeah, like like shopping channel. People still doing that? Yeah, that's what I thought. But yeah, I maybe I misunderstand. I can't. But anyway, anyway, the great news is you have a small amount of debt in ratio to your income and you can clean this up really quickly once you guys decide that that's what you want to do. If you want to work a different plan, you called the wrong place cuz we're going to get you out of debt so that you can build wealth so that you can change your family tree and be outrageously generous. You live like no one else so that later you can live and give like no one else. Create your free every dollar budget today.