How They Escaped $92,000 of Debt Before It Was Too Late

24:57And then my mom's one-time contribution paid for an entire semester, which is you only have two semesters a year. So a little bit goes a long way when she has so many years. You've already primed the pump in a pretty powerful way that I think y 'all might be leaning heavily into something that you need to prioritize for yourself. Right, and that's why we're here. So, I mean, we need this advice. We don't know what we don't know, and we've never met with financial advisors before, so this is exactly why we're here. And how much did you say that's going into your ESPP right now? 2%. 2%. Roughly, because I know, I imagine your comp varies a little bit, But if we were going to use a number, what's like a realistic number for total comp for you?

25:38130 ,000, somewhere in that ballpark? Yeah, I'd say 137 would be a target base for it. It's also based off of company and individual performance. So I'm just thinking through like current savings rate. And we think about like stuff that you're saving for the future. You've got about 3 % going into your HSA. You got 6 % going into your 401k. So that's 9%. You have a 5 % match. So now we're at 14%, another 2 % into the ESPP. That's 17%, right? Did I do that math right? I think I did that math right. Don't make me do public math. You've got a calculator right there. It's somewhere in that ballpark.

26:15I noticed that a lot of what you guys were talking about, hey, I asked, what are your goals? I want to maintain lifestyle today. We want to be able to do the renovations, be able to do the travel. A lot of the stuff you said was very much like short-term to intermediate-term goals. I didn't hear a super long-term goal out there. hey, we want to be able to retire or reach financial independence. Is that even on your radar or are you just like, oh, we're so worried about today. We're not really thinking about tomorrow. I'm just hoping that I'm able to just do enough now that it can compound to that point.

26:50But really, I know that I'm working for at least 30 more years. So I'm sure it puts a lot more pressure and stress on you now being the sole provider. It's like, I can't even think about that. But yeah, that definitely would be, you know, a long-term goal. I think, especially when we were both working, it's like, yeah, I would love to, you know, retire early or, you know, make that an option and spend more time with our kids when, you know, we get older and have more financial independence. So. You said kids. So I don't want to be presumptuous here, but. We'd like to have one more. Okay. So the idea is, because do you think that likely you'll be a one income household forever or share a brain?

27:30Cause that's what I was going to ask. It's possible. I mean, so it's some background to Tyler had a stay at home mom. He has a brother. I have three siblings, single mom. She always worked until she actually ended up going out on disability. So stopped working when I think I was in middle school. But, you know, single mom, sole provider, we just had a working mom. We had a nanny and, you know, that was our life. So him experiencing the stay-at-home mom, you know, route was amazing for him. And, you know, I feel like I obviously haven't done the working mom route, but my company would hire me back if I ever needed to.

28:07So I'm very grateful for that. No, I would like to be able to, you know, be a stay-at-home mom until Palmer starts school. And then if we have another one, obviously until they start school. So those are the options. But if I needed to, I would go back to work tomorrow if we were in a bad spot and that's what had to be done. Here's the thing, because I'm a little older and I know a number of people and one of my dear, dear friends, his spouse is a recruiter too. And she's kind of had the best of all worlds and the fact that she makes a great living and does all the home stuff, but she still works from home and does recruiting stuff too in a very specialized way.

28:52Because, by the way, that's not something you said it earlier, and I think you're not giving yourself enough credit. You get paid commission. There's a skill set here. This is not something that you just plug in any piece or any person and they can go out there and recruit people. You've actually got a very specialized skill set to make and be able to do this. I could see a future. And you could be as patient as you want, meaning you could get your current daughter into school. You could even have the second child wait until they get into school. So maybe we're talking about tabling this superpower of yours for 10 years.

29:27You're still young. I mean, so at 40, 41 years of age, there's potential. You could still work from home, use your skill set to fire back up the engine, and probably still do a lot of these things and not feel like you had to sacrifice the kids. So I don't know how we build off, plan off of that. But I just want to tell you that I think y 'all have some uniqueness here that could serve you well in the future because of that skill set and in the relationship, because that's what I've experienced is that if they know you can do this, that's why they're like, yeah, they'll take you back anytime because it's like a natural salesman.

30:03They really didn't want me to leave. Well, because a salesman, anybody who can sell, that's why when there's new modern world where we're talking about AI and everything else, the skill set that will never go away is the ability to sell. So it's kind of a universal, you know, just like you have people, different blood types, but then there's one blood type that can fit with everybody. Sales is the skill that fits with all professions and all careers, technical, anything. If you can sell, you probably are employable. So you're going to be okay. Yeah, and that would be the ultimate dream, like you said, is to take X amount of years, however long it takes, and hopefully jump right back into the swing of things and be as good as I was at it.

30:40Well, and this is one of the reasons why. There's so much life that it sounds like it's going to change for you guys between now and the time you turn 50, right? And so often young people, they wanna have like, okay, what's the plan? What's exactly, you know, what's my financial plan gonna look like for the next 25 years? And realistically, it's gonna change a lot. And there's a lot of variables. And so that's why I would say early on in your journey, which we really want you to focus on is your savings rate. And we're gonna see, okay, based on the savings rate that you currently have in place, what path or what trajectory does that put you guys on?

31:11But I do want to like do some triaging on the current moment, right? Because you said there are things that you want to be able to do and you guys kind of shared a budget with us. If we look at your budget right now, you guys are spending about$6 ,200 a month. Does that sound right? That's right. Is this a real budget or is this like the, hey, I'm going on making a millionaire. So I did my best to like put what I, like, is this accurate for what you guys spend? No, I'm on a spreadsheet every day. Every day he updates it. Yeah, that's the real budget. Can I ask him questions then about some of the categories?

31:44dogs. Is that like your black ops budget? Like, you know, like you hear the government spending $30 ,000 on toilets and you're like, they're not really spending$30 ,000 on toilets. That's where they hide all their black ops stuff. Is, is the, are the dogs black ops? Is that where you're hiding something else that you don't want us to know about? So no dogs, it's on this, our pro, I, I inflate it every month, but we, um, we have, do have a dog that has some medical issues and stuff like that. So he has medication. It factors in food. We have two dogs. The one he's talking about, he has epilepsy.

32:17He just beat cancer last year. He will eat a sock at any opportunity he gets and need to get his stomach pumped. So anything you can think of, the dog is going to the vet for. Our other one is a perfect angel. He never has any issues. I know. So it is inflated. We definitely don't spend that much a month, but I do like to have it a little more just in case I need to put some money away for the occasional thing that comes up. Well, being at one income, one of the first things that immediately jumps out to me is, okay,$6 ,200, one income, baby in the house. I immediately think about emergency fund, right?

32:53Now, I see that you guys have about, was it$24 ,000 in cash right now? What you're calling your emergency fund is really$20 ,000. If I think about$6 ,200 a month burn rate and I think about six months, realistically, I think your emergency fund should probably be somewhere closer to like $35 ,000 to$40 ,000 probably in that ballpark. I'm not telling you anything you don't know, right? Are you currently making moves towards that? Like, are you adding to your cash pile right now? Or is 6 ,200 pretty much zero-based budgeting? There's not really anything left over at this point. It's pretty close to zero-based budgeting after everything.

33:31So, So, I mean, I have, when coming into this, based off your recommendations, I'm going to be adjusting contributions and budgeting and things like that. So if I knew, I watched the show enough, I knew you were going to say to stop with the 529s and the UTMAs and then also increase the emergency fund. That's definitely the two things I knew that were going to happen. So maybe some of those funds could be routed into beefing that over the next several months. Because what I love about you guys is obviously you have some discipline. You could not have gone the path, albeit not the most efficient path, the path that you went without being disciplined.

34:13And so one of the beautiful things we like about the financial order of operations or following sort of this guideline is, all right, once I have my emergency fund in place, once I've done, I can kind of check that box and then I can move on to the next thing. And then once I get my savings rate to where it needs to be and I can check that. But well, then with any additional capital, with any of leftover, that's where I get to start doing the fun stuff. That's where I can, if we want to save for five through nines, or if we want to start building a sinking fund for the home improvements, or we want to start building the sinking fund for the vacations, you can do all that guilt-free and not have to wonder, oh, am I going to be in a great place?

34:46Because you said, well, I know I'm going to work for 30 more years and I hope it works out. I think you can go into it with a lot more confidence than I hope it works out. Hey, if I know I'm doing this, I'm going to be in a great spot. Yeah, I'm going to make sure it works out. What's the timing on that bonus? When does that come into play? In February. So it came in this last year. Are you having to use that bonus when it pops to catch you back up? Or are you able to, since you're living zero-based budgeting, could you apply that to long-term goals? Because that's something we explain to people all the time who are commission-based or they have odd income structures, is that it's okay if you can't do your 20 % savings throughout the year.

35:30Maybe you're one that has to wait for the bonus to show up. And then obviously with y 'all's income on one income, the long-term incentives also will count towards your savings rate if we can put that in the long-term retirement goal, which I imagine it is. So I'm trying to back into the math to see if there's something that's actually going to bridge your basically living paycheck to paycheck every month, but then you get this windfall that kind of fills up the savings buckets. Yeah. No, we definitely can't going forward because this most recent annual bonus, we literally paid off our last debt in January.

36:12So the bonus that came out in February was to beef up the emergency fund. So that was even leaner than$20 ,000. But that would be the goal, right? Is to when it comes in again next February, like you said, put that, get the emergency fund where it needs to be. So we might not be able to put as much towards it throughout the year. But when these bonuses and things do pay out, we would ideally get it to where it needs to be at the 36 or whatever the recommendation is. And then maybe after that, start thinking about, okay, let's start other savings accounts for, you know, a fun account or whatever it may be.

36:50And the bonus in February is around$15 ,000, somewhere in that ballpark? Target, but it was a little more gross this year because of performance. Now, another thing that you guys, obviously you have a young baby in the house now. And whenever our family circumstances change, there are other things we want to talk about that change as well. I saw on your budget, you do have a little chunk there for life insurance. So you guys, who's that life insurance for? How much is it? How long have you had that? It's for both of us. For me, I think mine is around, I have 800 and a separate market insurance through my company.

37:32I have times two income basic and then times four income additional So it's like term insurance. Yeah, it's term insurance through that. But then I have 800. So this is the market right there. I get payroll deductions for the other one with the company. And then we also have one on her that is, I think, right at a million. And then I have optional spouse through the company as well for 200. So she's 1.2. I'm total probably around 1.4. I love that. Do we have to study and play? Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds. Get the Unreal College Deal.

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38:51Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. To get that for Palmer, how does that work? No. No. You go. Yeah. I want to hear what she says. Yeah, she was asking you, not us. Go ahead. I haven't even thought about this. Yeah, so we wouldn't need it for Palmer because life insurance is for, I guess, to make up income. So she isn't having any income right now. That makes sense. Duh. I guess. Replace income. Let's give him a microphone.

39:32That's great. Do you want to hire him? Yeah, come on. Yeah, so generally, the reason we get life insurance is if someone depends on us and our income were to go away, we weren't to be here, then that person would be in a bad spot. Well, obviously, our children, they provide tons of value to us, but none of it's economic. And so there's no insurable need on her. Whereas for you guys, it's very, very different. If something were to happen to you, well, then he's going to have to figure out, okay, well, who's going to watch her and how are we going to have it? And if something happened to him, it's got to be income replacement.

40:02And I love hearing that you guys have life insurance. And it's all term insurance. It's all nice, good, low-cost, young, healthy people term insurance, which is wonderful. And then what about estate documents? That's kind of the second piece whenever a new baby comes on the scene. Yeah, we keep saying we need to do that. We need to do that. We need to do it. And I have brought it up several times, but it's kind of just a doom and gloom conversation that we just haven't had yet. But we need to. Right now, if something happened to both of you, who's going to raise your daughter? It's conversations that we have.

40:36We're not 100 % sure yet. Okay. So now play this through. Y 'all can't, you're not on the same page, right? Is that what I'm hearing? What do you think the state's going to do? I know. This is going to be a mess. I know. This is why we have these conversations with young parents is that please, please, please, because if you can't figure it out, the state's going to be even worse. I know. It's just such a hard ask of someone. I mean, the people that we have in mind, both options have children of their own. And, you know, one side is here locally in Tennessee. The other side is all the way in Delaware.

41:08Obviously, it's my family, his family. We would be – I know she would be so well taken care of either way. So it's just like which hard do you want to pick? Do one of the hards. That's what I would tell you. Because it's not that expensive to go get estate documents. But I would rather y 'all be in the driver's seat on that decision than to leave behind just a, oh, wow, this is going to be a mess. It's so hard to think about. And as a reminder, it is difficult, absolutely, in terms of like bringing another child and having to raise another child. It's an awful event when that happens. But you guys have done the hard work of having life insurance in place that at least from the economic standpoint, whoever that person is, it's not like they're now going to be responsible for the financial well-being of your daughter because you guys have already provided that.

41:52In the scenario that something happened to you guys, there is$2.6 million that's going to be chiseled, plus whatever you guys have saved up for her, that's going to be chiseled away for her. So it's really, okay, who do I think can create the environment that I want my child to be in, provide the love and support that I want my child to be in? If you do the life insurance portion, you have to worry about the financial piece as much. But it is a conversation you guys ought to have because just like you said, if it's hard for you to decide while you're here, it's gonna be way harder for people to decide on your behalf when you're not here to speak for yourself.

42:23Definitely. And the good news for you guys, it doesn't have to be that complicated, right? It's not like you have this like big, crazy, nasty, gnarly estate. Who's gonna take care of our kid if something happens and who we wanna be in charge of the money? Like if you can answer those two questions, that's about as complicated as it has to be at this stage for you guys. And because the money will be behind it, it should make the conversation a little easier. Because I know you're probably thinking about what a burden it will be. Economically, it will not be a burden because y 'all have done the right planning.

42:53Let's just go ahead and finish the drill and make sure now you have the right person to raise your children who will love into her and do all the things that y 'all would wanna do. Definitely. Yes, I know what we're talking about on the way home. What other questions do you guys have for us? What are some things that we could speak to that might be helpful or valuable for you? Yeah, I have a lot of tactical. Let me go. He's prepared. I have a lot of just like tactical questions. They could be kind of maybe some quick hitters and stuff like that. So I know y 'all came out with the, how much did I save new resource?

43:30So I obviously started contributing 11%. I've been with the company for coming up on seven years. So I was 25 at the time. With that 11%, including my contribution plus the match, Is that something that you can contribute from at 25, just keep contributing 11 % and you know you're taking care of for the rest? Or should I always be increasing it? That's the way the deliverable is built, right? The deliverable is built to give you an idea of if I were to lock in today, and by the way, if you want to copy the deliverable, you can go to moneyguide.com slash resources and download your free copy right now.

44:04The way it's built is that if I locked in at that percentage right now, this is the outcome I would have. What we tell people again is it's supposed to be motivational to you directionally. But just like you guys, if you would have projected at 25, hey, we make, or let's say at 28, we make this much money, we're saving this. Look how different your life is right now. It would have not been accurate to use that as a placeholder for what reality looked like for you guys. But because you did that early and you got your savings rate up early and you built the assets early, it allowed you now to make this shift.

44:36So what we're gonna do for you, not like spoiling too much of it, is rather than showing you like, oh, okay, here's like a loose save. We're gonna show, hey, here's what in your specific situation, based on the way that you're saving, based on your income, this is the trajectory that you would actually be on. The answer is yes, it's supposed to tell you where you should be, but I don't want you to stop there because we don't know what life holds. That's why we want, even if you start at 11, we still want you to work towards 25 % and that's gonna give you more flexibility, more freedom, more options as different life circumstances happen in the future.

45:11Yeah, I mean, I think your situation, because remember, you still have the long-term incentives because seven years, you're probably fully vested in those things. Is that correct? This was recent. I got my first grant last year. So, and then got another grant this year. So this is the LTIs are - The RSUs is what I saw on there. So we're going to be able to look at that. And as long as you have a long-term mindset with it, that should help. But that doesn't take the pressure completely off of after we get your emergency reserves, we're going to want to at least get that Roth going. I mean, because that would be some really powerful stuff for the long term.

45:47And we'll put our heads together and look into that. But we can definitely create some type of plan. Okay. So with that, obviously, I'm like thinking I'm in between step four and five. So should all addition – You're squarely in four. Okay. Okay. Got it. You're not in four and five. If you want to talk about in-betweens, you're like, you got some in four, but then you're kind of like dabbling in eight. You're dabbling in eight. You're all over the place. You kind of like took the page and crumpled it up a little bit. So that kind of answers my question. The foolish side of Foo is you're all over the place.

46:21We're going to bring it all in and get some closer focus. Yeah. So I guess that kind of answers my question is additional funds that we start budgeting out from y 'all's recommendations. It should just be solely going to the emergency fund to beef that up. Or should I simultaneously contribute to Roth as the same time? We need to get it a little closer. I mean, potentially you could get into the gray zone later. But right now you're kind of in a danger zone with only having$24 ,000. And you also have another pool. You're driving around Jeep Wrangler for one child. We're going to have two children at some point.

46:57Sounds like not in the too distant future. We probably need to be boosting that cash reserve so we can also have some flexibility in the household decisions with transportation. Just being honest with you. So more is better going into step four because it gives you options. And you need options with all the life changes that are going on. That makes sense. But the good news is even with dropping it back, there are some things that we're probably still going to recommend you continue doing. Like getting the full employer match on your 401k. And then we're going to get some details on the ESPP and likely still get some piece of that as well.

47:31So it's not like you're going to have to go full stop. But in the short term, you probably are going to have to redirect where your resources are going. That makes sense. And so with the LTI, because it is a newer development that I'm in, when those – it's vests over a three-year period, one-third every year. And then with that, as they're investing, should I take those and just treat them as income and cash those out and then contribute those where they need to go? Should I leave them in the single stock? Should I view my single stock both in ESPP and RSU as a percentage of my investments? Or how should I be handling those really?

48:12This is our favorite part of being financial planners. This is where it depends. Okay. is because the answer is exactly what Bo said. It's going to be yes to about every one of those, but you have to, just like with the financial order of operations where we tell you what to do with your next dollar, when that three-year mark comes, we have to kind of put on the lens of, okay, what's the best use of these resources over to fund goals, to fund the planning? And we lean into that moment. And then we take into account the outside indicators also of, hey, this is my human capital. And I don't want to have all my investment capital tied into the same company that I'm also, my wages are coming from.

48:56So we want to make sure it doesn't get too loaded up with all employer all the time so that all your eggs are in one basket. So what we do for clients is, this is when having a financial planner really pays off, is that we dashboard it for our clients as the money comes in, allocate it, and then we reset the process next year and do the exact same thing. So that way you're always kind of going through triage and figuring out what's the best thing to do for this moment in time to make sure long-term and short-term we're getting the best results. So in your situation, not knowing exactly when those RSUs vested, let's assume that they have vested recently and they're relatively closed.

49:37One of the things we might end up recommending is on the day that they vested, you pay tax on them. That's when RSUs become taxable. So the least impactful time to liquidate those from a tax standpoint would be immediately. So RSUs vest, you immediately. So all of a sudden you take$26 ,000 of RSUs and you turn it into$26 ,000 of cash. Well, now you have$26 ,000 of cash to figure out, okay, where do I deploy that? I go back to the financial order of operations, that in and of itself may satisfy the emergency fund issue. So then, okay, that's a single RSU vest allows me to do that. Okay. Once I've checked that box, okay, where do the next dollars go?

50:13And then I go to step five and then I'd go to step six. Um, so your ESPPs are a little more nuanced because the plans are more nuanced, but RSUs, I would be asking myself that question at every single vest. Do I keep, do I sell? If I sell, how do I deploy? Okay. Just follow the foo. Just follow the foo. That's it. Simple. And that's it. After we get some of the basic stuff, I think you can get more nuanced with the tax strategies and other things. But in the beginning, we're trying to just keep you out of the ditch. I mean, because that's one of the things. Y 'all have done a great job. But there's some, you know, you have some warning lights.

50:49If you think about the dashboard of your car, you know, sometimes the light goes off and you go, oh, man. Do I need to go look at this code to immediately pull over? Or do I need to do it? Can I drive around like this for a month or two? Y 'all are more of the lights gone off that you got a slow leak in the tire or something. It's not catastrophic, but it's something that's going to need attention in the long term to get this so you get to where you want to be. And then I think my last question I'll do is about HSAs. So is it okay if I'm using that as a sinking fund? I do have probably looking at that, I probably have about$8 ,000 invested and then the rest is just in the cash account.

51:30Is it okay to just keep using that as a sinking fund? If I'm in step four, do I need to stop my contribution so I can continue to beef up the emergency fund? Kind of how do I handle HSA? Yeah. So this was a little bit of a unique one. People say, we see all the time that step five, we say, why don't you fund in your health savings account? Because it's a beautiful thing where you can get a tax deferral on the contributions. You can invest the money and grow tax deferred. And if you use it for medical expenses, it's tax free. It's a great savings vehicle. But most Americans don't do it that way.

52:01It's up to what, 13 % now of Americans actually use the triple tax advantage. I like to think we did that too, because it was only 4%. Yeah, so it's all us. But so the other swath of Americans that are doing that, I would argue that's not really part of your savings. That's part of how you're budgeting right now. So if you know you're going to have healthcare expenses currently in your budget, one of the things you might budget is, okay, I'm going to put money in my HSA, but I know I'm using that as an entry year slush fund. I know that that's paying for this year's medical expenses. I don't get to really count that in my savings rate.

52:34It's more how I'm budgeting for medical. If I am going to invest those dollars, I am going to use those dollars. Well, then it gets to count into my savings rate. And that's more of a step five activity. A lot of people start with exactly where, hey, it's just entry year slush fund. And that's totally okay. If that's where you are in your financial life cycle, that's great. And what you hope is that you graduate to the point where, okay, now I can begin deploying those dollars. It's also part of the family planning. And I was going to ask you the question is, because we see a lot of people strategic-wise, when they know the year that they're going to have a baby, you go with the Cadillac plan at the office.

53:08I mean, we love health savings accounts, but remember what drives the health savings accounts, you have to go choose that high-deductible insurance plan, which has really high deductibles and kind of loads you up with your out-of-pocket. Years that you have babies, if y 'all have a plan that's like a PPO or something that's much more benefit-rich, be strategic. I mean, that's why we have open enrollment. And you're not – as employers that offer both options to our employees, you're not hurting us when you go and you be strategic and you choose the Cadillac plan in the year that you have in the baby and then you flip the switch back to the high deductible after the baby's here.

53:44Be proactive. Be an active participant. So do you all have another insurance option at the office that's more benefit-rich? Yeah, we do. We do have that. And I mean, the open enrollment before she got pregnant was, we didn't know we were having a baby before then. Definitely. So open enrollment's in October. We just missed it. Definitely looking at that as an option. But yeah, we definitely have that. But just in case there's another, you know, oh, wow. Okay, this happened. we have no problem with you using as a clearing account because it's that's what it's there for i'm just trying to give you additional strategy things to think about is that you can be proactive even when you go through open enrollment use family planning as a as a baseline as you're going through your your matrix of decisions every year when you go through open enrollment yeah that's a good idea do you see a lot of people doing that i mean i'm sure they're not like hey I'm doing this.

54:44Oh yeah, he's the HR benefit specialist. That's right. We do see that. I could have done it at the time in October, but I just, and we were family planning. We knew we were going to try, but it lucked out that it worked out so quickly. But yeah, well, it's definitely be an option once we decide to have the next one. Awesome. Was that all your questions? Yeah. The other one's really just ESPP should I stopped contributing that as well to focus on the food. Give us a layup. What are the details on it? So ESPP, it is, we have two offering periods, January through June, July through December. We do have the look back feature.

55:26Got a discount. Okay, great. And then the 15 % discount. Look back and 15%. Yeah. Okay, that's pretty powerful. That's free money. I manage our ESPP, so I'm a big advocate for it. Yeah, we're going to watch the key. Any holding period required before you can sell the shares? No, no mandatory holding period. It's just short and long-term gains. Free money immediately day one. That's, yeah, that's exciting. That's awesome. Yeah, so just recommended percentage on that what I should be doing. Great. This company really is amazing. Can't say enough good things about that. How'd you come up with 2 %?

55:59Right now you're doing 2%. How'd you come up with that? I really just wanted to be contributing something to it to make sure that I'm getting that free money. But yeah, that's just that I could still budget for everything else was. And maybe in the beginning, that's all you can do. But maybe after we get through like next year's bonus drop, we give you a little more slack, you know, trying to maximize that. Oh, my wheels are already turning. I'm excited. That's the stuff that gets me. I'm excited. You have to work with what you got right now, but then you need to create a plan so we can expand that benefit as much as possible.

56:33Well, that's all I had. Man, do you have anything? What a wonderful, I just, you're going to be super inspiring to a lot of folks out there like, Like, hey, I want to be, I kind of feel like I am where they were. The$90 ,000 in debt. You said 84 months on the car loan, right? I didn't. Was he? He said 84. Was that a fever dream? 84 months on the car loan. I think there's a lot of people, but recognize, hey, sometimes we got to make hard decisions. And those hard decisions aren't comfortable and they're not fun. But if we can make them and we can do it and be disciplined and power through it, you get to end up in a great spot.

57:05You get to be right where you guys are. We might need to bust you up a little bit before you go buy this second car. Or we need to have a read. I learned my class on. You keep trying and I'm like, absolutely not. Medial class on how not to get taken by the car dealerships. I know, I know. It's hard. You walk in, everything's so shiny and pretty. I know. I'm sure they're like, what do you think you can afford? What's your monthly payment you're looking for? I know, because it was, we were looking at two. One of them was half the price of the one that we bought. And then, of course, the one was just so much nicer.

57:33You were just like, treat yourself. Who cares? You gave me some other indicators because you said, And then we got into the part when we got all the warranties. And I'm right there like, oh, man, we all got this good. Let's get better. I had no idea what I was doing. I definitely have a better understanding of it now and definitely will not be ever doing that. I'm not going to buy a brand new car ever again. No, you can't. We're not against new cars. But in this time in your life, there's nothing wrong with a really good, reliable, used car. Yes. Just to kind of get you through this season. and then maybe that's something once you're in your 40s, you got all the family planning done, and you get back to popping the knuckles and placing people and using some sales skills, you can reward yourself with a new card.

58:19Is that what you think recruiters do? They pop their knuckles? I'm just going to lean back. What is that Marvel suit? He pops his... Oh, yeah, yeah, when he pops his elbows. It's James Cowell. Henry Cowell. That's me. That same skill set. You're just gearing up to go. Yeah. I know. And she's really kind of undersold herself because she's been 100 % supporting herself since she was 17 years old. She comes from less than ideal circumstances. Everything that she ever has is because of her. And she outworks everybody. That's why she's an amazing recruiter. So if you give her a commission-based job, she's going to make more money than anybody else.

59:04Yeah. I worked my tail off, that's for sure, to get where I was. Kudos. I mean, because also being a mom is not an easy task. It's so fun. And I see my family, because I remember my wife actually, back when we had our first daughter, she was making a lot of money. I mean, she was probably, because I was just starting a company. So without a doubt, my wife was the primary breadwinner. And then I felt what y 'all were saying is, because I remember when she went on maternity leave because she was with a great company, great benefits, went on maternity leave, and I think in the first month and a half, she was like, I'm not going back.

59:42I know. I'm not going back. And I'm like, oh, no. It shakes your core. It's the craziest thing. But I get it. I mean, because this child is so valuable. That's why it's very noble that y 'all want to take care of her and save, but you're already loving this child well enough. The money will take care of itself. But I can see the love that y 'all had where you have to make those hard decisions. But kudos for you guys for doing it. And it sounds like, you know, just y 'all are in that awesome part. Yes, it's the messy middle, but it's also probably at night after you get her down for bed, you know, like this is pretty daggone cool.

1:00:19I mean, it's pretty awesome. It's been a really fun season for sure. And thank you for all the kind words that you said. But, you know, going back to a point from earlier, when we just thought this was completely unobtainable. He manages all the finances. He's looking at the spreadsheet every day. And a few months into my maternity leave, I took four months off. I think maybe we were halfway through and I'm just thinking about going back to work. How am I gonna do this? What is that gonna be like? And I went down in the basement while Palmer was napping. That's where his office is. And I said, is there any world where we can make this happen?

1:00:51And he was like, babe, I have the numbers right here. There's just no way we would be in the hole, like a few hundred dollars at the end of the month. so we couldn't afford it. And then he got the promotion and everything just lined up perfectly. But it was just kind of a decision like that. And we're just so lucky it worked out. Well, I will tell you, and that's what we don't do a lot of faith-based stuff, but I will say that when I went through the same thing, I can remember just having some quiet moments and being like, how am I gonna get out of this? And I call it providence all the time is because I landed, I mean, you have to know, when I started my company, Business was the hardest thing in the world to get because I didn't have a podcast.

1:01:32I didn't have all this education platform. And I'll never forget, just out of the blue, I landed three big prospects. I was like, holy cow, where did this come from? Right when you needed it. And that's why when you tell the story of all of a sudden, this promotion shows up. I've predicted at least two children here in this office because I start seeing an advisor who starts all of a sudden, a few more clients start going their way way out of the ordinary. and I'm like, something weird's going on here. And it's usually family planning and other things. So there's a will, there's a way. And not to get all sentimental about it, but that stuff gives me the tingles because it is an amazing blessing when things, if it's what it's supposed to be, I think you can find a way in a lot of these hard decisions.

1:02:16Well, I'm excited that we're gonna put together a plan for you guys. I think we have all of the ingredients that we need. And what I love is we're gonna put together a plan based on where you are today. And I think it's gonna be pretty conservative because I think what's really going to happen for you guys is you're going to have these kids. These kids are going to get of age. You're going to go back to work. And it's going to look even better. But we want to show you that even with the decisions, the hard decisions that you've made, the life that you want to live is still attainable. And I'm super excited to be able to put it together for you.

1:02:41We're excited too. Thank you so much. Awesome. Thank you guys. Brian, what a great conversation with Tyler and Michaela. Yeah, I think everybody could probably tell because I'm pretty transparent. I love this couple. I mean, look, if you think about just the journey they've been on. They made horrible mistake with this car,$92 ,000 worth of debt that they were able to climb out of. And now here they are in this brand new transition or threshold where they're living off of just one income. Yeah. They haven't always done things right, but they got on the same page and now they're doing a lot of stuff really, really right.

1:03:13So now it's a question of, okay, how do we optimize? How do we structure it going forward? And there's two things that they've done really, really well as a couple. Number one, they communicate. They're on the same page. They talk. They're open about their finances. And number two, they obviously have discipline. They could not have crawled out of that$92 ,000 hole without recognizing, okay, if we put our minds to this financial thing, there's nothing we can't accomplish together. One of the biggest decisions you'll make in life, and I think that hopefully watching Making a Millionaire highlights this, is be very careful who you marry.

1:03:49Because that decision, just changes so much of your direction. Because if you're not on the same page, if you don't have the good communication, if you don't have the discipline, what are we doing here? The good news is I got the feeling from watching how Tyler and Michaela interacted as well as also how they were receiving our feedback. They're actually gonna lean into whatever we share with them. Yeah, I think they're gonna be able to stick to it. So let's dive into the numbers. One of the very first things we sort of unearthed is that they are a little lean in terms of their emergency fund.

1:04:20They have about$20 ,000 currently in their emergency fund. And we said, well, if their monthly burn rate is around$6 ,200 a month, their emergency fund should probably be closer to like$40 ,000, somewhere in that like$37 ,000 range. So, okay, how do we get there? We're at$20 ,000 now. We need to get to$37 ,000. Well, we thought there was going to be some potential for us to just sell RSUs immediately and be able to use that to fund the emergency fund. But when we dove a little deeper, the long-term incentive program, for Tyler was relatively new. A lot of those RSUs aren't vested yet, so that's not a solution we can use now.

1:04:57So we said, okay, that's great. Let's look at what we have going on. And we said, okay, well, what if we redirect the dollars that are going into the 529, the dollars that are going into the HSA, the dollars that are going into the UTMA, and we started pointing those towards the emergency fund? Well, if we did that, that would free up about$700 a month. So starting today, we have $20 ,000 in there. We're going to do$700 a month. And we know that in August, those RSUs are going to vest. And once they vest, we're estimating that the net amount is going to be about$4 ,400. We want to dump that right into the emergency fund as well.

1:05:30Then again, to the end of the year, September, October, November, keep having that$700 a month go. And then in February, he's going to get a bonus. Well, he's going to be about$7 ,000 short of his emergency fund at that point, but that bonus is going to be about$7 ,000. So once that bonus hits, we should apply those dollars. And I believe they can have a fully funded six month emergency fund by the time they get to February of next year. Yeah. That bonus is going to kind of close in the last gap. And then hopefully if there's anything left over, they can use it for even more savings goals. But I think what's interesting to me is now that we got the emergency fund handled, let's talk about savings and investment rate.

1:06:08And this was, I got to tell you, first of all, Tyler should go to work. And whoever his boss or HR person, whoever's in charge of benefits, should go give them a big bear hug. You know who's in charge of benefits? Tyler. He's the guy in charge of benefits. He works in the benefits department, but I'm sure that somebody above Tyler is coming up with this structure because it is generous. And that's going to help out a lot with this family that's gone from two great incomes down to one. So when we thought about, okay, well, how do we look at taking advantages? Obviously, there's a 401k piece and there's an employer match.

1:06:41but he mentioned that his employer also has an employee stock purchase plan, that he's taking advantage of a little bit, but we believe that that should be like a step two. That's like a free money type thing. And rather than just doing the 2 % that he's doing, we think it might make sense for him to shoot for something like 5%, right? Get a little bit higher. And so one of the questions becomes, okay, well, they're doing zero-based budgeting. How do they begin to close that gap? Well, we've already said they're going to fully fund this emergency fund. They're going to have money that's redirected from the HSA from the ESPP, from the HSA, from the UTMA, and from the 529.

1:07:17Well, once that's funded, that's going to free up additional capital that can go to the ESPP. So we said, all right, let's think about putting 6 % into the 401k. That's going to be about$6 ,600 a year. When he does that, he's going to get a 5 % match. That's another$5 ,500. And then we said, let's do a 5 % ESPP contribution, and he gets to buy the company stock at a 15 % discount, and there's no mandatory withholding period. There's no requirement to continue to hold those shares. So that'll be about$6 ,300, and we know that he's going to have RSUs vesting. And the RSUs are about 10 % of his pay, but there's going to be some tax withholding.

1:07:55So we're estimating about 7 % net amount coming to him. So if we have 6 ,600 401k, 5 ,500 employer match, 6 ,300 into the ESPP and another$7 ,700 from RSUs, there's about$26 ,000 that they're going to have available to begin plowing into their army of dollar bills every year. I do want to pause and kind of, you know, talk about what we've realigned here because seeing it on paper or on the screen, what's been changed. Really, all that Tyler and Michaela are having to come up with is the 11%, the 6 % for the 401k, 5 % for the ESPP plan. But also, we've changed their mindset because they were, if you think about 529, custodial count for their child, they were thinking only about how do we make sure our child has the money.

1:08:48And here we are, we've now changed the mindset where they're also going to fund the spousal Roth IRA. A lot of changes have happened here, but I think when we actually project this out for the future, it's going to create something that's pretty extraordinary. Yeah. One of the notes that we just wanted to make sure, because again, we want them to follow the financial order of operations. So as they participate in the ESPP, we're going to argue they should sell those shares immediately. And as the RSU's vest, we're going to argue they should sell those immediately. And what they will likely do is the proceeds from those transactions, We want them to use those dollars to fund their Roth IRAs, to do Roth for Tyler and then a spousal Roth for Michaela.

1:09:23And that's going to allow them to start building those tax-free dollars moving forward. Well, and it's also important because, look, there is, down the road, there might be even more complexity we could add to it for tax optimization. But there is a risk right now. Tyler already is going to have his human capital, meaning his time and his wages. We have to be careful that we don't have too much of our investment capital tied into the employer as well. So that's why we are going to recommend while they have all these funding shortfalls for emergency reserves and other things, we're going to liquidate this stuff immediately.

1:09:53So right now, number one goal is we want to get them a fully funded emergency fund. We've laid out a path where they can do that by February of next year. And then it's off to the races to continue building wealth. And we've laid out where they could be saving about$26 ,000 a year. Well, if you think about where they are today, about$200 ,000 of investments currently, and if they can save a little under 24 % of Tyler's gross income for the future,$26 ,000 a year, and we just assume based on their age that they could earn on average an 8.8 % annualized rate of return, by the time that they get to 60, even just doing that, they're going to have a portfolio of almost a little over$5.5 million.

1:10:35By full retirement age 65, it's over$8.7 million. And remember, their goal for living expenses of where they want to be was probably somewhere around$7 ,000 a month. Well, obviously, if their portfolio grows at that pace over that long, they're going to be more than be able to replace that lifestyle with a portfolio that size. This is what a lot of people watching this, you're also going to probably recognize yourself in the messy middle where you're short on time, you're short on money. But this is why it's really valuable to pay attention to, first, your employer benefits, but also how just a little bit of your money and when you're even in this period where everything is stretched, can do a lot of work for you in the future.

1:11:20Because this is amazing is they're putting in 11%, but because of the generous employer, it's close to 24. But what I love, their burn rate right now is around 6 ,300 to 7 ,000 hours a month, but we're gonna give them a retirement at 60. So that's even an early retirement to where they're going to be able to have in purchasing dollars today,$8 ,000 a month. That's truly incredible. And what I think is awesome too is they also want to be able to enjoy the here and now and enjoy the present. And we've put together some fairly aggressive saving goals for them, but it's saving out of their base level cashflow that's coming in.

1:11:55So one of the things that that means is when those bonuses happen, not this current year, But in the future years, those bonuses are going to be available to be spent how they would like. So if they want to use that for maybe doing some of the home renovations or some of the family fun experiences, they're going to have additional capital, additional cash flow to even be able to fund the here and now. Well, it's also because remember, their family car right now is a Jeep Wrangler. So there might be, in addition to vacations and other things, it could be shoring up what the family mobile is. And then also, I don't want it to be left unsaid.

1:12:30Michaela had tremendous earning potential. She was obviously a great recruiter. And that's a skill set. So after they get through with having babies and getting the kids off to school, there's still another lever they're going to be able to pull in the future. But I just love that we've created a plan of success, but give them full flexibility to live life on their terms. Yeah, we like to think about this as what we call the minimally viable plan. Odds are things are gonna look even better than this. There's gonna be more opportunity, more ability to save, more ability to grow. But even if all they do is implement this plan today, this plan we've laid out today could still lead them without anything else changing to a great, big, beautiful tomorrow.

1:13:10Tyler, Michaela, thank you for coming on the show. This was, I mean, like I said, we don't hide or hold our emotions. Y 'all were one of our favorites. It was just so fun. We all left the room going, man, that couple, they really, you could tell they enjoyed each other. You could tell that they really were on the same page. And that's just, that's fun. That's fun to be around that energy. And it's fun to see that we can actually kind of get our hands in the dough and see how we help them shape the future of their great, big, beautiful tomorrow. Bo, if others want to apply to come on Making a Millionaire, what do they need to do?

1:13:43Yeah, if you'd like to be a guest on Making a Millionaire, you can go to moneyguide.com slash apply. Or if you want to check out any of our tools or free resources, you can go to moneyguide.com slash resources. Guys, this was a blast. I'm your host, Brian, joined by Mr. Bo, Money Guy team, out. The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations.

1:14:14Abound 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. Ryan Reynolds here from Mint Mobile, with a message for everyone paying big wireless way too much.

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