Earning $400,000 and Still Drowning in Debt

Don't sue me. You can call your attorney, but you ain't going to sue me. Okay, this is for pure entertainment purposes. I may be a fabulous career and money coach, but I am not your personal career and money coach. And honestly, we don't have all the details, right, so if I say something, it's just for funzies and I'm doing the best I can. But like obviously, we don't have all the information, so again, don't sue us. Thank you.

All right, So our first question of the day comes from Instagram and if y'all want to send us a question. I keep saying us because it's like there were us, but now it's me and it's like what do I do in this new era? Ba fam, Just know that I'm trying. I'm trying. I'm still a little hung up on my ex Love you tivity. All right, This question is from Regina from IG y'all can hit us hit me up. I'm Brown and Fission Pod on Instagram if you want to have your question answered on the show.

Also Brand Ambition Podcast at gmail dot com. All right, Regina says, Hey, love all the content, y'all. Do I have been following y'all for a few years now. My question is that I have a four to oh one K from a previous employer, still sitting with the original brokerage I opened it in when I worked there, which is TIAA. I am now with a new employer and I have a four oh one K through that employer

through a different brokerage, which is Fidelity. Now I realize I should roll my original four oh one K into an IRA for ease. Should I just roll it over to my new brokerage. If I do this and then end up with another employer later in life at another brokerage, would I then be able to roll both my IRA and current active four oh one K over. I would imagine I'd want to keep them together just so I don't forget where my money is. Lol. Thank you so much for your thoughts. And no, I won't sue my

brown besties. Thank you, Regina. Regina's got her Solis shake care how ginos? Okay? But this is a great question, Regina, and I think your instinct is important, which is like, for you, you would want to keep them together because you worry that you might forget where your money is. And that is a real concern here, right, is if you have accounts in all different places, life is going to life.

You may have several jobs over the rest of your career, and it can It doesn't seem like it's, you know, possible, but it is very possible to forget that you have

some money left over. I myself have like fifteen hundred dollars or something like that saved in a four to oh one K that's now been rolled over into an IRA from a previous employer, and I still have not got around because every time I think about it, I'm like, yeah, I gotta do that, and then I just don't do it because I go to log in and I don't know my password, and I'm like, I'll come back another time. And it's just, you know, it's a little bit there's

friction there. It's not so simple. It still like takes effort to do it right. So and I'm like, well, it's not going anywhere. But what if I forget I had this fifteen hundred dollars. It's ad that's not a lot of it's not a little bit of money, you know, So we don't want that to happen, right, So if you think you may be inclined to forget, it may make a lot of sense to just take your previous employers for one K and roll it over into an IRA that you own, and then make that IRA your

destination for any future for a one K rollovers. Okay, So that means if you leave the job that you have now and you want to move your four to one K out of that Fidelity account, you already have this IRA opened with that that has your previous four one K already rolled over, and then you can just add that and then open up your new four one

K wherever your employer has their partnership with. Another reason it's great to roll it over over is because your four one K through your employer it may not have all of the investing options that you want. They may have very limited funds, or the funds that they do have maybe more expensive than what you can find opening your own brokerage account, like through a Vanguard or a Schwab.

The good news is that I mean Fidelity TIAA. These are both platforms that should have a wealth of options for investing and low cost investments as well, So you could be good, you know, just keeping your money parked there in that account. But let's say the other side of this is, okay, I don't want to open an iray, even if I do designate that as my four to one K rollover pot for the rest of my career. I would rather just take my four to one K from my previous employer and roll it over to this

new four oh one K at Fidelity. You can absolutely do that too. That takes a couple of like cons out of the equation. It means that you won't have to keep track of that for a one K rollover IRA that you would open, and it just sort of gives you something to pick. It gives you something to build on through your four to one K at your new company. So those are a couple of pros, But for me, it's really which option is going to work

better for you. The simplest, which means like I can just do one thing and kind of get this ticked off and I know that I'm not losing or keep losing track of the money that I have, is just to go ahead and roll that for a one K. Tell TIAA, here's where you can send my money. They'll roll it directly into your new employer provided for a

one K, and you can keep it moving. You can keep doing that for the next job and the next job and the next job, and you have this like snowball of four one K balances that you're moving over. But it can't hurt to take a couple of extra steps to say, Okay, long term, maybe I should have my individual broken where I can roll these accounts over into and I can control what types of investing options I have. There's no bad answer here, there's just slight differences.

And at the end of the day, it's up to you and what you're willing to do, how much work you're willing to put in, and how much effort, and it's yeah, it's up to you. But that's a great question, Regina, and thank you so much for sending that. I'm going to take a quick break and be right back with question two. All RBA fam we are back, and this is a question from missus X from Instagram. She says, love y'all, love your show, Tiffany will miss you girl,

me too. Okay, She says, my name is missus X, and my husband and I make a combined income of nearly four hundred thousand dollars. Yet we are in Hella credit card debt to the point of almost paying hundreds and overdraft fees overdraft feeds. I'm wondering why credit card debt would cause overdraft fees. I'm gonna guess you mean like late fees or interest fees. But regardless, you're paying extra money on top of the debt. Right. We have a child in private school and no one who will

be starting college. Oh, we have a child in private school and one who will be starting college soon. Oh, we also have a high ass monthly tax bill. We're considering taking a loan to wipe out all credit card debt and try to live off of one income or live off of one income to save for college and emergencies is not the right thing to do. Please help, Thank you, oh missus X. Well, the first thing is

thank you for sharing this. I in the world of like internet bullshitttery and where everybody has a microphone and likes to cast judgment upon anyone who has something to complain about, this is the kind of thing that would like really piss Internet caught munchers off. It's like, oh,

missus X, poor you. You're making four hundred thousand dollars and you're so bad with your money that you have all this credit card debt and you have you chose to put your kids in private school, so like this is all your own doing and you're a piece of garbage.

Blah blah blah nah. That's not why you're here, missus X. You're here because I think you represent a lot of Americans, a lot of working people who are making good money and yet because of the inflation that's happening, and because the best choices for our children often are more money. And as a parent myself, I get it now, I really get it. I make decisions not infrequently that are not in my own best financial interests because they are what's best for the kids. And that is so real,

so real. It's not like you can look at a piece of paper. I feel like this is like in the age of we'll call him Dr Yon. Know who I'm talking about, These old school financial educators or financial influencers who will look at someone like you and say, take your kids out of private school. What's wrong with the public school down the street. You know, you could probably be saving sixty thousand dollars or however much your annual tuition is and just put that money into paying

off your debt. But I get it because, like your child's education, at least in my mind, it is one of the most important investments you can make. And if we're going to be scrimping and saving, is that where we're gonna pull or trim the fat from to you? That is up to you. That is your own damn business. Missus X and mister y, that is up to you. Y'all chose to put your kids in private school because you want what you want for them, and that is

none of our business. That also doesn't help when it comes to just your overall question, which is like, we're earning this much money, but we have this credit card debt. So now you're wondering, how can I get some relief not just from the credit card debt, but from the

fees that are associated with it. And I'm in a very similar position right now, missus X high earning household started to put more and more expenses on credit cards, got a little too comfortable doing that, and then realize how quickly that debt can start to accumulate just because you're paying interest on it, and those interest charges add up.

It's like the beauty of compound saving when you put money in a savings account and you start to earn interest on it, and then the money that you earn interest gets added in there, and then you get more interest. Then you're earning money. You're earning interest on the interest you saved, and it's just like a flywheel of savings. Right But the same thing happens when it comes to credit card debt. Okay, so it's very easy to see how you can get overwhelmed. I'm just trying to like

validate that it's difficult. Right now, here's the uncomfortable truth that I and my husband have had to face too, and mostly me has. The other day, I was literally I can't believe I'm telling you guys on this show, I'm ready for this. I literally was in Target. It

was the day after Halloween. And when I tell you, my buggy was stacked to the sailing was stuff because they had their fifty percent off of all the Halloween stuff, and those yellow clearance signs were up, and I was like, oh, we need this for the kids for next Halloween, and we have a Halloween block party, and I should start stockpiling, you know, decor and plastic cups and disposable this and that and decorations and all this like and goodie bags

and erasers and miniature bubbles and the shape of you know, Dracula fangs and like all this nonsense. And not only was the buggy stacked higher than me, I mean, like I could not see I should maybe I'll post a picture I could not see over the top of my own frickin' Target cart y'all.

shouldn't be buying. That you know you're gonna have to put on your Target Red card, and you're gonna somehow try to justify because you get five percent off on the Target with five percent cash back on your Target Red card, and also it's all fifty percent, so really we're saving money in the future.

And I am trying and the skeletons, I'm not making this up. Skeletons are following off of my cart because it's too piled high and they're an awkward shape and I'm trying to like tetrist them back into the buggy. I get to the checkout area, I look at my phone. The guy from the financial planning firm has sent me a text message, Hey, I'm so sorry. He doesn't seem to we haven't seemed to be able to connect. Let me know if you still have time, and I just I'm not gonna lie. I started too sweat, and I

picked up that phone and I called him back. I called him back, and I had one hand on my cart and the other hand on the phone, and I'm just standing near the checkout because I'm like, this guy doesn't even know how diluted I've sort of become, not okay, not diluted, but he doesn't even know how like I have change. I have like tricked myself into thinking that everything is fine and how I'm in such this like spiral of overspending now and it's like it's really starting

to bury me. And now it's becoming it has become an issue. But it was so humbling and so frankly embarrassing and shame inducing. He can't even see me. We're not on FaceTime, but just the fact that I am talking to him and I have one hand on this buggy full of Halloween shit that I do not need

and I'm about to put on my credit card. Like the shame, my inner shame is so high at this point, and I see the optics, like somebody snaps a picture of me and puts it on the Internet with a meme saying financial educator at Target spending beyond her means on the phone with her financial planner to talk about how to manage her credit card debt. Like I get it, I get it. I can see it. And it's really Chris.

It's like I don't even want to say crazy, because I I it's something that we all, like so many of us, go through right at certain seasons in our life. So anyway, I'm talking to this guy, I'm and he has all of my accounts uploaded because at this point, at least I have done the work to like get all my accounts on the system, the platform so that

he can see where stuff is and all that. And I'm telling him that, okay, yeah, we have, you know, this credit card debt and right now a lot of it is most of it is on zero percent interest to credit cards that those intro periods are going to be expiring over the course of the next year in different time periods. So but it's like it's gonna be fine. I was just thinking, maybe we'll, you know, take out a home equity line of credit, you know, just tap

into the equity in our house. And shouldn't we do that, because you know, some banks they may pull back from offering home equity loans because of the economy, because the with it they did during the pandemic and past recessions, they stop offering them so much. And so that means it could just be smart, really just to take out this whole equity line of credit just to have it like as an emergency and also to pay off this credit card debt. Like it seems to make sense, right,

And I wanted him to validate me. This poor guy, by the way, this is our first session together, because he came. I had like a free consultation through my through my financial planning, my financial management platform. It's called empower. Check it out if you want to. I don't get paid by them. Maybe I ought to, but anyway, he said, and I can tell he's like he's listening. He's like,

uh huh, uh huh. Well, here's the thing. If we don't treat the underlying issue, which is that y'all are spending more than you make, and it's in small bits. It's not like any one huge spending spree has pushed you so far over the edge. But for a you know, extended period of time. Now, I've been I've been transparent about how in twenty twenty three it was super hard for me because I couldn't work, I had a baby, I'm writing a book, I'm going through all this drama

with my dad being sick. I wasn't able to produce the income that I needed. And now we're constantly like trying to keep up with that, right, trying to build back up. So that's an extended period of time. And he's just like a homemack of the line of credit won't fix it. And he wasn't this blunt but it was pretty much what he was saying. The helock is not going to fix it. It's just going to put you in an even more vulnerable spot because now your

home is tied up in it. Now you could lose your home if you can't afford to pay back the helock if you draw, you know, put take a draw off that line of credit. We've got to solve the underlying issue of the overspending, and that is when we can sort of move forward from there. And I when I tell you, like, obviously that's the answer, Like I know that, I know it very well. But it's like when you have the fact in front of you and the logic and the reasoning is there, it's really hard.

It's you sort of need that wake up call. I think as a as a parent, because it is so easy to justify, like so many decisions if it's for the betterment of the kids. But if I'm really being honest and I'm being like tough on myself, I would say, what's really better for the kids is them Mommy and Daddy are not putting them in financial jeopardy, and the law putting ourselves, I mean in financial jeopardy in the long run to sort of like for the betterment of

the kids. It sort of like puts all this blame on the children's shoulders, Like, well, you really wanted that fifteen dollars hot wheel monster truck, you know what I mean? Like you really needed to go to Lego Land for your birthday? You really? You know, that's not exactly fair. I don't think it's fair at all to the kids. So I'm not taking it back to you, missus X. I'm not saying that the answer is like take the kids out of private school. Da da da da da.

But I do think you and your husband, just like me and my husband, maybe we should be friends. Maybe we should just all sit down together and just look at the budget, just the bare bones of it all. How much is coming in, how much is going to be going out? And if we can't trim certain things or we have non negotiables that we don't want to get rid of, well then it's a wake up call. It's like, so where's the extra money gonna come from? And maybe you're like me, maybe you have windfalls that

you know are going to be coming. Maybe you guys have an annual bonus that could be coming in January February to help you chip away at some of that debt. That was me in corporate, and honestly, having those windfalls were a huge, like God send for me, knowing I'd have an annual bonus or I could I could exercise some of my stock options and then get a little bit of a windfall and that could help me, you know,

keep some of this debt at bay. I'm still operating a little bit the way that I was operating during corporate when I would, you know, have a couple of these like financial windfalls each year, and maybe you guys do too, But let's get ahead of that and plan for it so that we know, okay, when that bonus comes through, when that tax refund comes, when the equity vest we know immediately it's got to go toward these

debt payments. And then how long would it take us what can we expect to get from those windfalls, and then how long would it take us to really chisel away, chip away at the rest of this debt? Okay?

Like we do need to have those difficult, uncomfortable conversations and like maybe stop telling ourselves that we don't necessarily need to because we are in a certain income bracket and that kind of stuff, you know, is maybe beneath us, or like just just anticipating that there'll be more and more and more to take care of this debt that we are accumulating in the process. This is really really

uncomfortable to talk about. I'm personally like, I don't think I'm exactly sweating, but I did not anticipate telling y'all about my whole target experience right now. But hey, this was my show and I'm doing it. But missus ax, I just I really see what you're going through. I do think taking a loan to wipe out all your credit card debt is an option. I think it can be a smart option when it comes to consolidating a fixed rate personal loan, a fixed rate debt. Consolidate consolidation

loan unsecured. That means that you don't have to put your house up as collateral like you do with a heelock or home equity loan. That can be a good idea to wipe out the credit card debt and make

it less expensive for you to pay down. But as I was just told by this very kind man from Empower the other day, my financial planner, it's just going to accumulate again if we don't get to the root cause and we don't really get that budget in place and stop the gosh, stop the leaks and our own budget, stop the money from seeping out the cracks and disappearing and then leaving us with an even bigger problem, even more cracks to our foundation because we're letting you know

that underlying issue not get solved. So living off of one income to save for college? That was your second idea, you said, is that the right thing to do? I think that's an amazing idea. And it may be that you know, that is a way that y'all can create the space to put away money for your kids college. But is there a plan can you actually live off

that one income? Can you actually pay your expenses and all your household needs and all your savings and investings and all your goals and still and avoid that credit card debt? Because if you can't actually live off that one income without credit card debt, it's going to accumulate again. And that's just where I get a little bit of stress, you know, because you've got four hundred k yearly now and you still have credit card debts. So take away

you know, half that salary and what will happen? So that's the concern, missus X. Please follow up, and y'all, I'm going to keep keeping it one hundred because I know I'm not alone. I think it was something like over seventy percent. Brand Ambition listeners say that credit card debt and overall debt is their biggest financial stressor right now and we are in it together. BA Fam and missus X, thank you for sending in your question, BA Fam,

thank you for listening again. You can hit us up Brand Ambition Podcast at gmail dot com or send us a DM at Brand Ambition Podcast on Instagram if you want to have your question featured on the show. Until next time, Bye,