LIVE SHOW REPLAY: Is That Brand Name Really Worth It?

Hello there.

Are you ready to inject some financial wisdom into your Tuesday lunch break?

This past week on Ask Graph, we tackled the practical steps to start breaking free from smart ways to avoid buying new to finally facing your debt head on and building that first layer of security.

Today, we're not just recapping.

We're going to dig a little deeper and answer your questions from the past week.

So get ready for some real talk, some actionable steps, and the encouragement you need to build a life of financial peace and purpose.

That's all coming up on the Ask Ralph Show.

But first, here's a quick preview of my new show, grit and Growth.

Business Ralph setbacks keep knocking me down.

How do I get back up?

Well, let me tell you something right now, it's okay to feel knocked down.

I've been kicked in the teeth.

I've been punched in the throat.

It's.

It's all part of life.

It's all part of being in business.

Allow yourself that moment.

Then ask yourself this very difficult question.

What's the lesson here?

What's the lesson here for me?

Because listen to me.

Every setback has feedback hidden inside of it.

People miss this.

You gotta analyze it.

You gotta learn from it.

Then get back up and get back up smarter and get back up stronger than you ever were before, building something real, something yours.

This is hard work.

Success isn't guaranteed.

It's just not.

It's earned through that relentless grit.

But I see you.

I see that resilience.

I see that refusal to quit.

Welcome, everyone, to this lunchtime edition of Ask Graph.

I am absolutely thrilled you've tuned in during your busy day for a deeper discussion into the principles that are leading us towards that joy of living below our means.

Now, this past week, we covered some really foundational steps as we continue to tackle debt head on, but built some crucial financial buffers as well, and even explored the power of community.

For those of you who caught the daily episodes this past week, you know, we moved beyond just those daily money saving tips.

We started digging into some strategies that require a bit more intentionality.

Our goal today is to solidify your understanding of these concepts, address some common hurdles many of you might be facing, and really make these principles actionable in your life.

So just to quickly remind everyone, here's what we tackled this past week.

We tackled the often overlooked practice of borrowing or bartering before buying.

We did that on Monday.

Then we challenged our spending habits with the brand switching Challenge on Tuesday.

Midweek, we took a brave step by focusing on listing all your debts, followed by the decision of stopping credit card use on Thursday.

Then on Friday, we celebrated taking action with making that first extra debt payment.

And then we wrapped up the week by emphasizing the importance of starting the baby emergency fund.

And I know for many of you, especially those that you carry in debt, these steps might feel significant and even a little daunting.

But I want you, I want to encourage you, if you've taken even one of these small steps in any of these areas, that is fantastic.

Remember, progress, not perfection, is the key.

And speaking of progress and getting deeper into these topics, I'm delighted to have my good friend Craig joining me again today.

Craig, welcome to the show.

Thanks, Ralph.

It's good to be here.

Once again, looking forward to a nice conversation.

Craig, we always appreciate your insights.

They are certainly valuable.

Well, let's jump right into our first segment and looking back at the start of the week.

At the beginning of last week, we talked about the idea of borrowing or bartering before heading straight to the store, especially for those less frequently used items.

The core idea here centered on tapping into our community.

Craig, I don't know if you've ever considered this, but when you think about the concept of looking to our community first, like friends and family, and I found this term, I had never heard of this before, called buy nothing groups, what initial thoughts come into your mind in terms of both of these and maybe some hurdles that you think people might face?

Well, it's a great idea.

So we, we've talked about kind of rampant computer consumerism and some of our past episodes, you know, where we're pushed to buy, buy, buy, buy, buy.

But if you look around your shed and on your shelves and that sort of thing, you got a lot of stuff that you've either never used or you used once or twice.

Maybe somebody else could use it.

This is especially big for anything that you just need kind of once.

So I'll give you an example.

We had a big storm come through a couple of weeks ago and I had a tree come down on part of our fence line.

Fortunately, no damage to the house or anything like that.

But if I need to chainsaw that, do I want to go out and buy a chainsaw for that one job?

Now, fortunately, my wife got me one for my birthday a number of years ago, so we've got one.

But what if, do you really need to go out and buy?

I don't know.

What are they, three or $400 at least?

I think you're going to at least spend that much.

So there are a Lot of things where you just need one off.

You need this one time or you're not sure if you're going to use it.

So maybe you can borrow it.

I'll give you a good example.

My neighbor got in touch with me, his wife did, and said, well she's my neighbor too but her computer was dying.

So I'm a computer guy.

She knew I'm a computer guy, what should I do?

And I said well you know, you guys have iPhones and iPads.

Have you considered a Mac now?

I hadn't thought about that.

I said well I have a 13 inch MacBook Air that sitting here.

Why don't you borrow this for a few weeks and see how you like it before you go pay the money for a new Mac and then decide I really like Windows better.

And so that's a great example.

You know, who knows what you'll get?

Doesn't really matter.

But there are all kinds of examples like that where we can loan something or reach out to some of our friends and borrow something to maybe save off a purchase or to make sure we're getting the right thing.

And Craig, that makes you an incredibly generous neighbor too.

Like a lot of people just wouldn't volunteer that.

But I think that's really speaks volumes about you, dude.

I think that's really kind of you because you're right because you know, I, I, I went to change over to Mac like 10 years ago and it was a bit of a change.

I mean I'm not trying to take a sidetrack here but, but I think that's really a, a, a, a very valuable point here.

Like hey, I have this sitting around, I'm not using it right now.

You know, how about this?

Now we got a question in regards to this from Ethan.

And Ethan wrote this, Craig.

And I thought this was, it might fit with your, your situation because I don't, I've never been to your house but I'm betting it's a little bit off the, off the, off the grid a little bit.

So Ethan said this, he said I live in a small town where buy nothing groups.

What are some other ways to find people willing to lend or barter?

And I thought, you know, that's a really good point because you know, many of us and I live on a farm now.

We've got 30 acres and I've got neighbors, you know, outside of that.

But I remember as a kid growing up we had the neighbors, you know, And I remember as a young person my mom would say yo, go ask Ms.

Jones across the street if I can get a cup of sugar.

I know that sounds silly, but we actually had those situations.

So, Craig, like, what are some alternatives that Ethan might explore in less quote, digitally connected communities?

Well, this may be a blessing in disguise.

I want to take a little tangent here, if you don't mind.

The buy nothing groups can be awesome, but they are also havens for scammers.

Oh, I imagine I never even heard of that term when I talked about that on the show.

Like, I didn't know that was a thing.

Yeah, they're big, like Facebook and, you know, these different social media platforms have them.

And I'm not saying they're a bad thing.

I'm just saying you need to be really cautious.

Cautious.

But you know, it.

He's Ethan's probably in a church.

His kids or he go to school, you know, you've got extended family.

So anywhere you're in some sort of community, there's an opportunity to, to do this sort of thing.

And I think, Ethan, I would advise you to get it started.

You know, if you hear somebody talking about something, kind of like I did with my neighbor, hey, I've got this thing I'm literally not using.

Why don't you try it?

And it'll build on itself.

People will get used to that.

And there are also a lot of smaller towns have swap meets.

I know some, some radio stations, some small town radio stations literally have swap meets on the radio on like Saturday mornings.

It's just Mrs.

Jones has this and she's looking for that.

So I think you need to get creative.

But if nothing else, you can kind of get the ball rolling just by being a good neighbor, good community member.

I agree with you.

And I know we have like the yard sales around here, and I've got a few clients that say, ralph, you know, I go to these yard sales and buy stuff because I can get it for pennies on the dollar.

He said, the problem is I can't write a check for it.

He says, if I get audited by the irs, what do I do?

I said, well, you know, get a receipt from.

He goes, nobody wants to give me a receipt at a, at a, at a yard sale.

I said, I hear you, but.

But I also think, Craig, you also have to.

Let's take a minute and talk about this.

I mean, there, there is some etiquette involved here with borrowing stuff.

You know, I remember my uncle was good for that.

He was one of these guys, he would give you the shirt off his back.

And he said, most of the Time they'd return the shirt with holes in it.

So, you know, the thing is, I, I think while we're here, we also need to understand that there is some etiquette.

You know, I, I mentioned this on this show.

If you're going to borrow something for somebody, at least maintain it.

You know, I don't know how many.

I'll give you a great example.

There's about 20 years ago, we had a neighbor borrow a car from us and, and our expectation was this is going to be.

And we had extra card time and, you know, a couple days.

Well, it turned into three weeks.

And I finally said to them, I said, hey, are we going to get our car back?

And they're like, well, we're getting ready to take a vacation.

And we needed the extra room, so we were going to use yours.

I'm like, wow.

So again, there is some etiquette involved in this.

So I, I just think you had to be aware of that.

Have you ever had a situation like that, Craig, where you lend somebody something, it came back not as you expected it.

Yeah, that's.

That's really bad.

You know, need to go to life lesson number one, don't be a jerk.

But they were just shooting themselves in the foot.

Right.

You know, the next, the next time they need something, you're not going to be all that willing to help them out.

Absolutely.

But the classic one in Florida was returning, borrowing somebody's boat and then returning it empty.

Oh, yeah.

You know, you always fill up the boat, you always fill up the car, you know, whatever it might be.

So, yeah, just don't be a jerk.

How about bartering, Craig?

You ever get involved in any of that?

You started to talk about, well, I'm the computer guy, and I started to cringe.

I'm like, I was wondering if you were going to become like the, The.

What's that?

I can't think of the.

The geek squad.

That's.

I'm not calling you a geek, but, you know, it's easy to become that.

But.

But I think there's a place for that too.

You know, if you've got.

You could call me a geek, it would be okay and accurate.

So, yeah, I own it.

I lean into it.

It says, but.

But.

You know what I'm saying?

I, I remember.

You know, I think that's not a bad thing.

My grandfather used to tell me a story when he was a kid.

His dad owned a mill, and it was an old mill that was alongside a creek.

And, and what he explained to me is when Somebody would come into the mill, they wouldn't pay with money.

They'd pay with a portion of the corn or a portion of the weed or whatever that was.

And it was kind of like that, that bar, Bar Turing thing.

You don't hear a lot about that.

I remember probably about 25 years ago, it was a big thing around here.

They had these bartering groups where, you know, if I'm an accountant, I could barter with you and you do concrete work or something like that.

And I thought it was kind of a cool idea.

But you don't really see that much anymore.

I mean, I think there's some real downsides to this.

And so let's break it down to kind of neighborly, informal bartering and more exchange oriented bartering.

So I'll give you another neighbor example.

So we live down about a half mile private road.

And I've never maintained a private road.

I don't want to learn how to maintain a private road.

But my neighbor knew how to do it.

Well, he didn't have a tractor.

Every time he needed to work on the road, he'd go borrow somebody's tractor and come work on the road.

And I said, I'll tell you what, I got a deal for you.

I will buy the tractor if you'll take care of the road.

Hey, there you go.

And he was all for it.

Now he's got a tractor.

I mean, literally, he's got carte blanche.

Whenever he wants it, he uses it way more than I do.

He comes over, you know, he was built.

He built a big giant shed, came over and used the tractor, you know, borrowed the tractor for as long as he wants.

But it's been fantastic.

We also trust each other, you know, I didn't say, now, you know, you can only borrow this on Tuesdays and Thursdays.

It's like, no, man, it's yours.

You know, I'm just making the payments.

Just treat it as yours.

And he does.

He treats it as his.

And so that works out really well.

And see, that's the key, I think.

Two things.

I say this to clients all the time.

Number one, in a bartering arrangement, there's got to be trust.

And number two, you have to understand value.

And that's why a lot of times a client will say to me, well, Ralph, hey, can you get.

Can you take care of this for me and I'll take care of it.

I said, let's do this.

You charge me what you would charge me, I'll charge you what I would charge you because it Just ends up preventing problems down the road.

But I've just seen that happen way too many times.

And do you ever watch the court shows?

People's Court?

Sure.

So that's what Tracy and I, when I'm working from home, we'll try to have lunch together and watch.

Watch one of the court shows.

Write it down.

Write it down.

So if you're going to get into these more transactional bartering situations, you know, here's exactly my scope of work of what I'm going to do for you.

Here's exactly your scope of work, what you're going to do for me.

You gotta lay out if there's any warranty, that sort of thing.

To me, it doesn't seem worthwhile.

I mean, because.

Because whoever you're bartering with, with some rare exceptions, they're going to overvalue their end of it and undervalue your end of it.

That's true.

So it's better to just say, you know, I charge X number of dollars for this.

You know, what do you charge?

Okay.

You know what I mean?

If you want to just hand each other paid invoices at the end of it, not exchange checks.

Okay, but you gotta lay all that stuff out because nobody goes into these kinds.

Well, again, most people don't go into these kinds of things trying to feel like they've been cheated or feeling like they're cheating somebody else.

But that's often the way it ends up.

And if you don't believe me, invest a couple of hours watching the People's Court and judge me.

Yawn.

Will explain it to you.

So I agree with you.

But big takeaway.

Before we move on to the second segment, just before you go and buy something, think about a little bit.

Can you borrow that?

Can you find it in a used shop?

You're only going to use it one time.

I think that's a brilliant part.

Well, let's move on to our second thing.

In the middle of the week, we talked about where I issued.

And Craig, you're going to love this one.

Dude.

I issued the brand switching challenge.

It's a simple experiment of trying to store a brand instead of your usual name brand for one item.

And you know, the thing is, Craig, how much marketing influence and our perceptions, you know, the potential for savings is huge.

But, but people are, you know, they're scared to do this, even on a few key items.

What, what are your thoughts, Craig?

Have you ever tried this yourself?

I'm the king of the store brand.

So, yeah, I, you know, I'm Always going to try to go with the, the higher value, less expensive item.

I tell you, where I do this a lot is in supplements.

Okay?

So I'm a huge believer in supplements.

I take, I don't know, probably a dozen every day, and so far it's working well.

You know, you'll see something on TV and then you go check the price of that thing and it's $35.

And then you go on Amazon or Walmart or go online somewhere, find the exact same thing with the same active ingredients in the same concentration and it's a third the price.

So this is especially true with over the counter medications.

And do you remember, do you remember in Ghostbusters the little nerdy accountant guy that went on and on and on at a party about buying generic aspirin instead of bank?

That's right.

I forgot.

But he's right.

No, but it's true though.

Why, why are you buying the name brands?

I agree with you.

And, and they often literally come down the exact same production line.

They just get put into a different package.

Yep, absolutely.

Sometimes it's the same package with a different label on it.

Yes.

But we got this question from Olivia and I thought this was really good.

Olivia said this for think when I read this, Craig, I was like, this is hilarious.

For things like paper towels or toilet paper, I've tried generic and they just don't seem to last as long.

Is it really, is it really saving money if I have to use twice as much?

And I thought to myself, well, both of those things are disposable, number one.

So they're intended not to be reused.

And I don't know too many people that reuse paper towels or toilet paper.

I guess the paper towel.

Well, I'm gonna go on the other one, but we could say paper towels.

I guess you could dry your hands and sort of set them out and let them dry like on the line.

What's your take on evaluating that true cost effectiveness of generic versus brand name products?

So, so I'm, I'm gonna go down a path and you can tell me to stop if you want to, but sure, don't cheap out with something like toilet paper.

I agree with you 100%.

You know, it's just, that's not worth it.

Paper towels, you know, look, this is the more serious answer.

Try it, try it.

If it doesn't work out, don't do it again.

And so, you know, you get the paper towels and you realize, well, I'm using twice as many paper towels as when I use Bounty or whatever the paper towel brands are, then go back to Bounty.

Right.

Or consider an alternative.

You know, they make.

They actually make reusable paper towels.

They're not really paper, but you can get these things on, you know, online for 10 bucks for.

I think IKEA sells them, of all places.

So, like 10 or 12 bucks for a dozen of them.

They're washable.

You know, use them over and over and over again.

It's like the microfiber towels.

Like, I mean, you can buy a.

You can buy a stack of the multicolored ones.

Last time I was at Costco or one of the big, you know, I don't want.

You call them warehouse marts.

I think it was like, 35 or 30 of these things for, like, 10 bucks.

Yeah.

And like you said, you throw them in a washer when you're done.

We use them to clean around here.

Now, sometimes on the farm, they get a little too greased up.

They go in the old rubbish pile.

But.

But still.

But.

But the.

To answer her question more directly, well, if the generic doesn't work, go back to the name brand.

But.

But I.

I bet the number of times the generic works well will be significantly larger than the number of times it doesn't.

Well, yeah.

I mean, and.

And the thing is, it's all about that brand loyalty.

It's that, you know, and because you see the commercials, right?

You.

You just assume you're going to have to do that.

So, Craig, you said you are the.

I don't put words in your mouth, but the generic king.

So.

So how do you.

How did you get to that point?

Was it just because you were very frugal from the beginning, or did you have an experience where it's like, I just tried this and just try it yourself.

It works?

Or how did you get.

How do you get people beyond that fear of that inferior quality?

Well, so I'm naturally cheap.

This is where we get canceled, Ralph.

I'm part Scottish.

So when.

When Tracy and I started dating, we were talking about our background, and I told her, I said, I'm on my father's side and my mother's side.

I'm part Scottish in part Dutch.

So I'm cheap and boring.

I didn't realize Scottish was a cheap thing.

Like, I never heard that.

That's a whole thing, huh?

Yeah.

And.

And they are.

They are a thrifty people.

You know, the heritage is.

And.

And I inherited that.

So, you know, I don't want to spend more money than I have to.

And so, you know, why Should I give, you know, my money to some name brand product to supplement their advertisements to try to get me to buy more of their stuff?

If I can use a generic, you know, I will.

Especially things where, you know, it's exactly the same.

Like, who would buy name brand alcohol, like isopropyl alcohol?

It's.

It's a chemical, right?

You know, it's the exact same thing.

So I just never saw the point in spending more money than I needed to.

Craig, you were talking about supplements.

And one of the things that many years ago, my wife and I, we didn't have, we'd have great insurance.

We had medical insurance was sort of like one of those catastrophic plans.

And we would go to the doctor and I would say to the doctor, she would say, hey, I want to prescribe this pill.

And I would get my, my iPhone out and I'd be like, okay, let's talk about this, because there are generic alternatives, or maybe it's not a extended release or something like this.

And I remember, and I'm not promoting this, but the Goodrx app was great because I'd sit in her office with her and I'd say, okay, I'm a type 2 diabetic.

And she would say, okay, well let's try this pill.

And I'm like, okay, well, that's.

I never forget one time, Craig, you'll love this one.

The.

She called me in a new prescription for diabetes.

And the pharmacist actually called me and, and he said, ralph, he says, I want to fill this, but it's $700.

And I said, wow, for one month?

He goes, yeah, it's $700.

And I Said, well, that's expensive.

He goes, but I got a.

Here, I got an idea for you.

This is a little bit off topic, but he says, if you go to the website of the company that manufactures this, you can get 12 months for $25.

I said, what?

I said, hold on a second.

I got my computer.

I said, okay.

I said, what do I need to do?

He goes, you just need to tell me you have the code.

And I was like, are you serious?

So, Craig, this, this prescription went from $700 for a month to I think the time was like 7 bucks or call it $70 just so I'm not being, you know, hyperbolic.

And I'm like, well, why wouldn't you tell somebody that?

But see, you got to start.

You ask your doctor the same thing, say to the doctor, listen, you're getting ready to give me this, this brand name prescription Drug.

Is there a prescription that is suitable, that maybe I had to take two pills a day instead of an extended release.

But that's just another area where you can save money.

Yeah, absolutely.

You know, I think companies often prey on ignorance.

Oh, that's a.

People don't know about the situation you just mentioned or they don't know that the name brand and the, the store brand are the same thing.

You know, they just don't know.

And so I'm a big fan of taking control and trying it.

You know, you'll learn what to, what to buy store brand and what to buy name brand.

But you, you're throwing money away if you're always buying the name brand.

No, I think you're absolutely right.

And my big takeaway here is just ask questions.

You know, look in the store, go in, you know, open, you know, read the back of the label.

You know, is it the same as the other one?

But the other one has the fancy advertising, has the, you know, the celebrities talking about it.

But, and there's probably some legal ramifications to this.

There's probably a certain amount of time that it can't be generic.

Now, I won't talk about food, but I'm saying like medications and all that.

Medications, yeah.

But even in the grocery store, just compare the two.

You know, look and see, this is the same stuff.

You know, have you ever, this is a real tangent.

Have you ever heard of cheddar whales?

They're like goldfish, but.

Okay, no, I've never heard of that before.

So I, I buy stuff from nuts.com.

they, okay, good quality products.

So I buy stuff from them.

And I bought these cheddar whale and they're just really, really, really good.

But they're not goldfish.

They're not goldfish.

No, they're, they're whales.

That's right.

They, they blow goldfish out of the water, by the way.

See, there you go.

Just, you know, for the record.

Well, I was in the dollar store and I saw this box of Stauffer's cheddar whales and I thought, well, I'm going to buy these and see if they're the same.

They are exactly the same product.

Wow.

I mean, they literally are.

I'm not saying they're similar.

I'm saying they are exactly the same product.

So, you know, you want to pay extra to get a fancy name and pay for the advertising or not.

I think you, you frame the key point here and that is stop being ignorant.

Moving on.

Your ignorance.

I think you nailed it.

Like my Father told me that so many times.

But no, but I think it's true.

I think that marketers prey upon people's ignorance.

And that's not being hurtful, that's not being mean, but just don't be ignorant.

Well, let's change subjects a little bit.

We'll move on to what we talked about on Wednesday.

And Wednesday we got a little bit more serious.

Craig, we talked about listing all of your debts, and for a lot of people, that can be a significant step, often bringing a mix of emotions and darn near breaking people down.

So, Craig, from your experience, what's the initial emotional landscape people navigate when they finally confront that full picture of their day?

And I'm not trying to put you on the spot, and this, this may not be something that's ever affected you.

I can talk about it me if you want to, but I just want to get your initial impression of that.

No, sometimes the truth hurts, you know, it just does, you know, especially if you're in a situation where, in retrospect, through a lack of discipline, you've kind of let this debt accumulate.

And I'm thinking about credit card debt, vehicle debt, you know, those kinds of things that, where it's easy to get caught up in the moment.

And, you know, when you look at it right there in your face, oh, my God, this is what the situation is.

I mean, it's almost like writing down everything you eat.

You know, it's going, okay, this is not so good.

But it's a necessary first step.

And I think that's the way to overcome some of the emotional or psychological barriers to taking this step, is this is just a step.

I can't improve the situation if I don't know what the situation is.

Yeah, you're right.

That's the way I would frame it.

That's the key.

It's foundational.

You can't move forward because if you're going to do this, you've already recognized I have a problem.

There's a problem here.

And you have to start there with that foundation.

I know, listen, there was a time back when we first got married, my wife and I, and I was in this position, man, I had more credit cards than I could name.

And I remember one weekend sitting down and I said to my wife, I said, you know, we're going to do this weekend.

We are going to sit down and we're going to write down every single dollar of what we owe to whom, so on and so forth.

Because I said, this is just becoming a problem.

And you know, it wasn't easy, man.

It was like, you know, we got to list this out and list this out and list this out.

But it really did help us get to a point where we can make better decisions.

Well, let's move on to our next question.

And this one came to us from Caleb about this whole debt issue.

And he says this, he says, I've got some debts in collections that are several years old.

Well, that's never a good situation.

But let's talk about that.

Should I include those on my list and how should I approach dealing with them?

Well, if you owe people money, I'm going to say, and I jumped in front of you, Craig, I usually ask you to answer some.

I'm going to jump here in front of this one.

Caleb, if you owe them money, you can pretend like you don't, but at some point, maybe they're going to file a judgment against you, they're going to come after you, they're going to wreck your credit.

I think you've got to address all of these things.

Craig, what is your initial thoughts on that?

Yeah, I mean, there's still debts, so they need to go on the list.

I mean, I'm assuming they haven't been discharged.

Yeah, we had to assume that because he's saying it's, you know, they still, you know, he still has them.

Yeah.

And you know, debt collectors are no fun to deal with.

But, you know, pardon my language, sometimes you just have to suck it up and be an adult.

And, you know, you, you've, you've kind of created this situation maybe through no real fault of your own.

Maybe it's medical bills or that sort of thing, but, you know, trying to ignore doesn't work.

Yeah, it's funny.

Rice doesn't work.

I used to see this a lot when I used to run the credit union because people would come in and want to get a car loan and they go meet with one of my loan officers and a loan officer.

We had this, this parameters where I had the loan officers could make a decision based on a credit score.

If the credit score was over a certain number, they could sign the loan or certain parameters.

Well, if it was below this parameters, they had to come see me.

And I, There was a couple of times a day they'd bring me a loan and they say, okay, Ralph, this one wants to buy a car.

Okay, fantastic.

Let me look at it and look at the credit score.

It's not great.

And then I look at the debts and for the most part they made all their payments.

But then There'd be two or three medical collections or two or three, you know, stuff that's just sitting out there, you know, forever.

And I'd say to them, well, listen, I said, this speaks character about them.

You know, when we did lending decisions, we had character, collateral, and capacity.

Those are the three Cs that we would look at.

And I would say, okay, fine, the car has value.

We're not going to give them 100% loan.

You know, they have the capacity to make payments.

They have a good job.

But then I look at their character and, Caleb, you didn't ask this, but I think your character speaks volumes about this.

If you want to have character, then list the debts and pay them.

Now, listen, you may be in a position in this season right now that you can't pay them.

Okay, that's fine.

Make decisions about the debts that are right in front of you.

Like, for example, if you need to pay your mortgage, I'd pay my mortgage before I worry about paying a debt that's getting ready to get charged off.

Simple.

Yeah, absolutely.

But at some point when you start to get your head above water again, I think you need to go address these things.

And a lot of people don't think about this, Craig.

And it's a little bit of a sideline.

You can call creditors and make a deal with them.

The truth is, I've done this myself.

When I've been in a bad situation, I call the creditor and say, look, I can't afford to pay you this whole thing, but here's what I can afford to do.

Are you willing to accept it nine times out of ten?

Oh, absolutely.

When can you pay me?

I can pay you right now.

Now, the thing you need to understand is this is going to be a tax issue is what I don't wear my tax at for a second.

If someone, if you pay off less than the full balance of a loan, they can give you what's called a 1099 C, which basically says that, hey, you've got economic enrichment, fancy word for saying you made economic benefit, because we charge this off.

So just be aware of that because a lot of people come in at tax time and they'll be, ralph, I got this 1099 C in the mail from my credit card company.

What does this mean?

I was like, well, what this means is that, yes, you owe them $10,000.

They accepted $2,000.

So they wrote off $8,000.

But now that $8,000, there's a bunch of rules that go into this.

Whether you had bankruptcy or whether you're insolvent and all this kind of stuff.

But think about that for a second, Craig.

Yes, you're going to pay tax on 8,000, but the tax percentage is a lot less than 100%, and that's what a lot of people don't think about.

So, Caleb, one of the things you can do is call and negotiate a settlement with your creditors.

When.

Ralph, I know there used to be nonprofit organizations that would help with debt management, somebody I know fairly well was pretty upside down and worked with them and got some substantial debt reductions out of it.

So now be careful, because I know there are a lot of scammers in this space, too.

You know, I've done some shows about that in the past.

There, there are some credit counseling companies, but you have to be really careful who you're dealing with.

Yeah, and I'm going to go out on a limb a little bit here.

But, but if you're facing this kind of situation, I know the last thing you want to do is spend more money, but getting with a CPA could be a really smart way to spend, you know, a couple hundred dollars just to say, okay, here's, here's what my situation is.

What, what is the best way for me to move forward?

Because most of us, if we're in this kind of a hole, hopefully we're in it once in our entire lives, and we don't have experience in dealing with these kinds of things.

And so you can go to somebody that deals with it day in and day out, and maybe they've got some ideas, like, I have no idea about the 1099.

It makes sense, but I had no idea about that.

Yeah, you know, they can keep you from, from falling into some traps.

They can maybe talk to, to debt holders on your behalf, that sort of thing.

But so it might be worth a little bit of money to get that kind of help.

And then.

Ralph, do credit unions ever offer these sorts of services?

So when I used to run a credit union, that's one of the things that sort of set us apart is I would, I would have my collecting folks or even I would sit with people and just sort of do what I called a workout plan.

And there's a lot of value in that because at the end of the day, here's my personal view on the world.

I think most people want to pay their bills.

I really do.

And maybe that's a positive way to look at the world, but I think most people want to pay their bills.

Unfortunately, a lot of people have dug a hole so deep they can't even see the way to get out of it.

So there were many times, Craig, where I would work with a member, as we call them in the credit union industry, a member.

I'd work with a member to say, okay, I know where you are here.

Listen, I get it.

You made some mistakes.

Listen, we all make mistakes.

But what's the end of what's.

What can we do to get you to a better place?

And I would work out.

You know, it's funny because the examiners would come in and sometimes, you know, I'd get written up for the stuff I would do.

Like I would do negative amortization loans where, you know, you're only paying me the principal and not even that.

Sometimes I take this a negative amortization where they're actually accruing more interest.

An examiner would raise K with me.

I say, look, okay, here's a deal, Mr.

Examiner, Mrs.

Examiner, I can write this off and I can lose $100, or I can say to this member, look, for the next six months, pay me $50 a month.

Yes, it's negative amortization.

I don't want to get into weeds.

But that means that it's actually growing.

The balance is actually growing instead of going down.

Or I can write it off.

And he goes, well, maybe you should have wrote off.

I say, well, that's dumb.

I said, because guess what?

In six months, this member is going to have a better job.

This member and I are working on a plan to make things better.

They're going to pick up a second job.

They're going to pay off this, are going to pay off that.

So.

Absolutely.

And people are foolish in that, again, being ignorant.

Go meet with somebody.

I do this all the time, Craig.

I call them workout plans.

Now, sometimes.

I'm going to be very honest with you.

I will say to you, your next visit after you leave here is with a bankruptcy attorney because there is honestly nothing I could do.

I had a.

I had a couple in.

It's probably been six or eight months ago, and it's a bad situation, husband and wife.

The husband has dementia, and the wife is really struggling with caring for her husband.

And she developed a gambling issue, and she gambled through every last dollar of their savings.

And she came in to see me.

She goes, ralph, what do we do?

And Craig, it was almost the first time into my career I'm looking at this, and I wanted to cry because I had nothing to give them.

And here's the saddest part of the whole thing.

They had equity in their home.

So they had equity in their home.

But here's the problem.

I couldn't even tell them to go get a refinance because they couldn't afford to make the payments.

And then I thought, well, I'll have them sell their house.

But here's the problem.

Their mortgage payments were less than what they'd pay in rent.

So.

So there are times where I'm going to say, or somebody like me was going to say to you, listen, here's what you can try, but you're maybe your only option at this point is go meet with a bankruptcy attorney.

And that's not something I push people into, but sometimes it's just a practical truth.

Well, and you, you can't discount the amount of stress there is and having this kind of thing hanging over your head.

So sometimes it's better just rip the band aid off.

Absolutely.

And be done with it because, you know, these situations can go on for year after year after year after year, and they take a toll on your.

On your physical and your emotional health.

So it's so true.

You know, it's so true.

They destroy relationships.

They decimate marriages.

Yeah.

Again.

And I don't want to keep on this, but I want to move on to the next topic, Craig, only because it's kind of going along the same lines of what you're talking about, about ripping that band aid off.

And we talked about this what I call radical but essential step, and that is when you're carrying consumer debt, stop using your credit cards.

You mentioned this a couple of weeks back about, you know, I can't remember how you phrase it, but, you know, when you're digging a hole, the first thing is to stop digging.

And, you know, and so, so Craig, we talked about this on this show and, you know, because it sabotages debt repayment efforts, and I've seen this time and time again.

I'll have somebody to come in and they'll say, yeah, I finally got my credit cards paid off and now I got a little breathing room.

And what's the first thing they do?

We're going to go on a vacation.

I say, well, how are you going to pay for that?

We're putting it on the credit card because we have available balance again and again.

I'm not being judgmental, but, Craig, what are your thoughts on that one?

You know, I'm, I'm going to be judgmental on that one.

That's just plain dumb.

It is.

You know, I'm not afraid to be judgmental here.

You know, if you want, like you said, if you want to get out of a hole, stop digging.

First thing you need to do is stop digging.

And people don't.

Credit card companies have a little bit of evil in them.

I think they have a lot of evil in them.

I had a pretty substantial credit card bill.

Because of business travel and other expenses.

I tend to put most things on a credit card, always pay it off at the end of the month.

And it was.

It was a lot of money.

Yeah, the minimum payment was like $40, $40.

I mean, it would have taken me, you know, from now until the end of time to pay that off.

I'm sure that the, the interest, monthly interest would have been higher than that.

Well, absolutely.

It just keeps going up and so people don't realize that, that.

Well, what.

What's the average?

We came up with this a few weeks ago.

It's like 22% or something like that.

Is the average credit card interest rate.

Yep.

You start doing the math.

If you're carrying any kind of a balance at all, man, that, that interest, I mean, that.

That's a lot.

I'm not going to try to do math on a live stream.

But it's true.

It's true.

And it'll take you forever to pay it off.

You never get ahead of it.

But then we got this question from Sophia, and I want to get right into this, Craig, because I thought this was really a good point.

And Sophia said this.

She says, my credit score is really important for my job and my future plans.

If I stop using my credit cards completely, will that hurt my credit score?

And I thought, oh, here we go again.

We're trying to justify the decision to stop using a credit card.

Now, I will say this.

I've mentioned this on the show many times.

Your credit score is improved with good positive use of credit cards.

Yes.

Which means this.

You don't charge more than 30% of your available balance.

It's capacity issue.

You pay them off every month and, and that sort of thing.

What are your initial thoughts?

Like you said, use that for business.

I do the same thing, but I also have this mentality at the end of the month, that credit card's getting paid off.

Oh, that's right.

They're always paid off.

Always.

I think the last.

I'm probably going to forget one this month now, but I think in the last 10 years, I've missed one.

You know, thought I'd paid it and I really hadn't.

That happens.

All of us.

Yeah.

I mean, it happens, but no.

So this Is a little bit of a tricky situation because there's a difference between not using your credit card and closing your credit card.

So if you close your credit card, you have fewer accounts and that can lower your credit score big time.

People don't realize that, Craig, is.

That will take your capacity and reduce it.

And your credit scores are a function of the capacity and how much you're using them.

If you close it, that's a bad plan.

Yeah, so I would not close it.

You know, you can if you want to avoid the temptation, you know, lock it away in your strong box or your fireproof box.

So in the show, I actually said somebody recommended freezing it in a block of ice.

And I was like, well, that's brilliant.

Now, I'm not sure how the mag strip is going to handle that or the chips they put in there now.

So I don't know about that.

But there's gives a whole new.

Here's a geek joke that gives a whole new meaning to frozen assets.

Yeah, it was a real credit freeze.

But no, I think you need to be a little bit careful.

Also, chasing the credit score is a weird game because, I mean, we kind of know how they work, but only kind of, you know, those are proprietary algorithms.

So we don't know exactly what goes into the credit score.

And I'll give you an example at a whopper of a credit card bill because of some medical expenses, cataract surgery, my wife and some other things.

And it was, it was a lot.

But I knew it, you know, I knew it was coming up, had the money, paid it off.

Well, well, it got up high enough to where my credit score dropped by about 30, 40 points.

And then the next month it's right back up to where it was or above.

And so you want to keep it.

Does it really matter if it's over, what, 700?

Well, that's the thing.

And I've done shows about this people get hung up on.

I got to have a 800 credit score.

Well, guess what?

Most lenders use tiers.

And that top paper tier sometimes starts as low as 740.

750.

And guess what?

If you're above that, stop stressing about it.

Yeah.

You don't have to be perfect.

And like you said, there are going to be ebbs and flows in this.

You know, like you said, you had that cataract surgery, you had other major medical which pushed that amount that you were carrying over.

So when the magical number, that magical day hit, when they reported to the credit bureaus, it looked like Craig was a bad guy, but then all of a sudden, next month, Craig's a great guy again.

And that's the thing.

You have to look at these long term.

But, but there are psychological hoarders that people face when they're trying to break that credit card habit because it's so easy, it's so easy to grab that plastic and just say, well, you don't really have the money right now, but I could sure use that.

Or, you know, I'll get it paid off when the bill comes in.

Oh, I've got 30 days before that bill is due.

And then next thing you know, three or four decisions during the month and you can't pay that bill at the end of the month.

Yeah, well, and that, that's right.

And, and that's why Sophia's question, the way it was worded, concerned me a little bit.

If I stop using my credit cards completely, will that hurt my score?

Does she mean stop leaving balances on my credit card?

If that's your question, then no, it's not going to hurt your score.

Right.

If it's, if it's, don't ever put anything on the credit card, that may not be the best idea, but, you know, I just can't imagine it making enough of a difference unless you had some whopping credit card balances out there to where it's really going to make a material difference.

No, I concur with you 100%.

Well, let's move on to Friday's show.

We talked about the power of taking action.

And my key takeaway there was $20 extra, could be a huge benefit to debt repayment.

And we talked about making that small initial extra payment.

It's so important in building that momentum in that debt payoff journey.

Talk about finding even a little bit of extra money to put towards that debt.

And we got a question from somebody named Noah.

Noah asked this.

He said, and Craig, we kind of beat this one up a little bit before, and I think this one kind of applies to you is what Noah said.

He said, I get paid inconsistently as a freelancer.

How can I make consistent extra debt payments when my income fluctuates?

Well, I thought about you, Craig, when I was, when I was looking at this question.

Well, your income fluctuates and, you know, like you said, you get paid over a certain time.

But if you found yourself in a situation where you know you've got a debt that you're paying off.

Well, my opinion on this one, Noah, is just okay on the months that you can't afford to pay the extra, don't pay the extra.

But on the months that you can afford to pay the extra, maybe you pay some more extra.

I mean, it's not rocket science.

What are your thoughts?

Well, and it really depends on how those fluctuations are.

Like mine are periodic.

Every summer I get nothing.

So I know that's coming.

It's really easy to plan if you're very seasonal like that.

If it's, I have no work and then all of a sudden I'll get a job and then maybe I've got no work again, where it's really not predictable, it gets a little bit trickier.

But if it's predictable, be your own bank to a certain extent, when, when you're flush and the money's come in, take some of that, have a special account, pop it into that account, and I would literally have a separate account that that extra money goes into.

And then when you're a little short, you can pull it out and you just figure the extra payments into that, that whole math, that whole equation.

And, and I think you can smooth that out yourself.

You know, if you're in something like commercial real estate where you might get, you know, a hundred thousand dollar commission and then not get anything for six or eight months, it's a little bit trickier.

But I would turn to some of my more senior colleagues to ask how they've handled it because he's not the only freelancer to face this situation.

But I, but I like your answer.

If, if you, if you're short, it's an extra payment.

Don't stress over not being able to make the extra payment.

And that's why I talked in the show about the snowball method, the avalanche method.

I'm really going to talk about it today.

But both of those methods assume that you're going to make at least the minimum payment on all of your debts.

And we get into a whole philosophical discussion of is one better than the other?

You know, should you pay the highest interest rate first, should pay the lowest balance?

And I think it just depends on your own mentality.

But all of those things assume a very simple thing.

You're making the payments, at least the minimum payments.

So Noah, at least do that.

And if you have extra, if you have margin, then do that.

But, but I want to get to our final topic, Craig, which was all about emergency funds.

And we own Fri on Saturday, excuse me, we discussed the baby emergency fund, that initial $500 to $1,000 saved before aggressively tack on debt, which kind of goes along with what Noah was, was talking about.

And that's, I want to address this.

And we got a question here from somebody named Ava.

So let me pop Ava's question on the screen here.

It says, I have a lot of anxiety about unexpected expenses.

Would it be wrong to save a little bit more than $1,000 for my baby emergency fund just to feel more secure before stating on debt, starting on debt.

And I have a really simple answer.

Yes, yes, absolutely.

If you can save $1,000 instead of 500, yes, do that.

Initial thoughts, Craig?

Yeah.

Okay.

Do it.

If it makes you feel better and you're, you're making your, your minimum payments, you know, you're, you're doing everything you're supposed to do.

Okay, shoot for $2,000.

Right.

But, but, but I, there, there is a little bit of a risk here, and I'm not sure.

Again, trying to read into, into her question, if trying to save more than $1,000 makes it overwhelming for you, then I would not do that first.

I would make them tiered goals.

So start off with 500.

Okay, you've hit 500.

If it's going to make you feel better to have a thousand, then shoot for that next 500 and then maybe that next 500.

But I'm just a little worried that if she's starting from nothing, trying to save 1500 or $2000 might just be so bad that it's like, oh, God, I'm never going to get there.

Why even bother?

Oh, absolutely.

And that's why I say to people, start at $100.

Save a hundred dollars.

For some people, save $50.

Because if you, and you've just alluded to the main point of where I want to go with this, and that's that whole idea of some people have higher financial anxiety.

They just do.

And like you said, it's the little wins.

And that's why it's called a baby emergency fund, because that little win will help build that momentum.

We've talked about this many times, you and I, but I think you start off with that momentum.

But you're right if you go into it with like, because, like, here's a, here's a big takeaway.

What I, what I honestly say to people is have six months of disposable income in your savings.

And I'll say to somebody like, okay, wait a minute, Ralph, wait a minute.

I make $7,000 a month.

So you're telling me I need seven times, I need a lot of money?

I said, yeah, in a perfect world.

And you have all your debts paid off, and you're doing everything financially prudent.

Yes.

And I'll say to him, actually, in a great world, have three years worth of extra money.

I'm just being a smart aleck.

But.

But, you know what I'm saying.

But.

But the problem is.

You're right, Craig.

It can be defeating for somebody who's struggling.

If you say to them, look, you know, a baby emergency fund is $500.

Like Rob, I'm trying to figure out how to put food on the table today.

I'm not.

I'm not even looking at $500.

So what Ava says is great.

Yeah, but.

But I think you're right.

You have to be careful that you don't set yourself up for failure.

Well, and I want to, I want to also bring up that there are kind of two sides to that equation.

Maybe you build it by picking up a little gig work or doing something on the side, which can be a lot more effective than trying to cut expenses.

Especially if you really are down close to the bone in terms of your expenses.

Sometimes it's easier to go have it.

You know, the fast food places, I'm not that I want to work in fast food place, but if, if I was broke, I would.

And you know, a lot of places, they're paying 15, 18 bucks an hour.

You know, you do the math.

It doesn't take long.

That's like what, six hours, right?

Seven hours to.

To have that 100 bucks.

And you know, I know you got to do take home and all that kind of thing, but before long, you could have that 500 or that $1500.

And when you're working, you're not spending as much money.

A lot of times, too.

I agree with you.

And I think that's one of the big obstacles I think people don't want to think about.

Yeah, they just assume, well, I got to cut expenses.

Well, no, I say this to my business clients all the time.

There's two pieces of the equation.

Grow the revenue or reduce the expenses or do both.

Both is great, but sometimes it's just a question of growing your revenue.

So do you pick up an extra job?

Do you ask your neighbor, hey, I see you need help with your yard work.

Can I do that for the next couple weeks and pick up a couple hundred bucks?

You're right.

And that's the thing that annoys me sometimes.

I'll have people come in and I'll be like, I really just can't figure out how to make ends meet.

I'm like, okay, well, what are you doing after you leave here?

Well, I got TV to watch tonight.

There's the problem.

If you've got margin of time.

Now listen, that's not for everybody.

And that sounded kind of harsh, but if you've got extra time, then you've got time to work, you've got time to go do other things.

Now you gotta be careful.

That too.

Because, like, I had one client and we got time.

I'll tell you this story.

So he decides he needed extra money, so he's gonna go do doordash.

Well, that sounds good.

Sounds good, right?

Oh, I'm gonna make doordash.

Yeah.

But the problem is when you look at.

Really.

And I'm not picking on doordash, this girl, I'll just name them all.

Okay?

But to be honest with you, it's really hard to make money with that because versus profit.

Absolutely.

You can make revenue.

You know what we'll call make it make income.

Bring my.

But the profit is a problem because I said to him, I said, hey, dude, yeah, you got a 1099 for $25,000 last year.

That's great.

I said, but how many miles did you put on your truck?

And he told me to miles.

I said, okay, let's multiply that to understand their mileage rate, which isn't even covering all the expenses, in my opinion was like 68 cents a mile.

I said, you're 20,000 miles.

I said, so you just spent.

So we worked it out.

He made $2 an hour.

And I know it sounds harsh, but, like, maybe there's some tip money in that and all that kind of thing.

So.

But, but you know, but I agree with what you're saying, Craig, and that is grow that revenue side.

But just be careful how you do it because there's a lot of people out there that are promoting these, you know, side gig, side hustle things, which they sound good to bring in money, but they don't really bring in profit.

But you can get really creative.

I'm with you 100% on that.

But remember, if you're going to work for Uber Doordash, you know, those kinds of companies, they're.

They're in it for their benefit, not.

For your benefit, of course.

But I mean, I've heard of people making some insane money picking up dog poop.

Oh, now we live on ranches, so we don't have to worry about that.

But if you live in a suburban neighborhood, you know, who wants to spend their Saturday picking up dog poop?

If somebody's.

You know, I'll come by, you know, every other week, and for 50 bucks, I'll pick up your dog poop.

It's here, you know, here you go.

And there are dozens of things like that, pressure washing, you know, it's not that hard to do.

The equipment's, you know, a little bit of an investment, but not terrible so that you can get creative.

There's always money and doing things that.

Other people don't want to do well, and that's that.

You nailed it, dude.

Other people don't want to do it.

So there's this mentality out there.

It's funny, my wife and I talk about this all the time because we've been fortunate.

Like, just like, you know, you know, I've been blessed.

I have a good education.

I'm good at business.

But, like, if everything went away tomorrow, like, who knows what could happen?

Like, guess what?

I'm gonna land on my feet because I'm gonna go figure out something.

Might not be what I want to do.

It might not be my dream job.

It might not be what I've always wanted to do.

But guess what?

If you want to work, there's plenty of work out there, and it annoys me.

And again, we might get canceled.

When I get done saying this.

If you want to work, there's jobs out there.

Well, I'll give you an example, because I went through this decision making this past year, so I.

I paid a lot of money for somebody to maintain our lawn.

So we've got kind of the lawn around the house, which is not like a suburban lawn, but it still needs to be cut and fence lines to trim, that sort of thing.

And then we've got the pastures.

Well, I'm paying $200 every time the guys come out to mow around the house.

That's a lot of money.

You know, in the summertime in Louisiana, you know, it can be 600 bucks a month.

I was talking to my wife and say, you know, maybe we should just, you know, I'll just do it myself, and, you know, we'll get somebody to come out and maybe trim once every few months.

And then she looked at me and she said, you are insane.

You know, just.

Is that really what you.

You want to be out there mowing constantly?

You want to do more mowing?

You know, just pay the money?

Well, there's going to be somebody on that end of the equation, and that means that's an opportunity for you to go in and say, okay, you know, Craig doesn't want to spend even more time mowing.

So maybe he'll pay me a couple hundred bucks to come take care of his property.

And, you know, a lot of people would.

So especially picking up dog poop was like a light bulb.

Not that I'm going to go out and do it, but it's not that bad.

You don't have to have a big investment in equipment, you know, and I guarantee you that there are lots of people that would pay you to do it.

Craig, I already know at the Amazon fulfillment place near your house is stocking up on pooper scoopers, man, they are ready for you to make that move.

No, but it's true.

Again, you seize an opportunity which kind of, kind of lands us where we want to end up.

And that is, you've got to think about practical things and you got to think about your perspective.

Both things need to shift at the same time.

And, you know, I just want to encourage our listeners, you know, start implementing these principles.

And you may feel a little overwhelmed at first, but these things build on each other.

They really do.

And so, again, I really appreciate you being here and I hope this recap and question A has been helpful.

And my big takeaway here is pick one area, just one thing, one thing that resonates with you, and make a conscious effort to focus on it this week.

And you'll keep those questions coming in because that's what fuels the show.

And you can reach us through our website@financiallyconfidentchristian.com that's our new website.

And now, if you don't mind, I'm going to close with a word of prayer.

So, Father God, we thank you for your wisdom and guidance in all areas of our lives, including our finances.

We ask for your strength and discipline as we strive to be good stewards of what you've entrusted to us.

Help us to be generous, help us to be wise and courageous in our financial decisions.

And may our journeys towards financial freedom also draw us closer to you.

And we ask this in Jesus name.

So, Craig, again, thanks for joining me today.

I really appreciate it.

We really get into some good stuff.

And hopefully, like you said, we won't get, we won't get canceled this week.

Hopefully not.

And if you're in the, if you're in the Louisiana area and you're looking for a pooper scooper, I'm just being funny.

You can reach out to Craig.

And Craig, guess what?

I still don't like tomatoes.

You're so normal otherwise.

I hear you.

You guys.

Everybody have a blessed rest of your Tuesday.

Everyone stay financially savvy, and let's continue our efforts to becoming financially confident Christians.

God bless you and everybody.

Have a great day today.

Thanks everybody.

Thank you for joining us on the Ask Ralph show, and with a simple click to subscribe, we'll invite you back to our next episode.

And remember, financial issues don't have to be complicated.

Just Ask Ralph.

The information contained in this episode of Ask Ralph is based on data available as of the date of its release.

Sagio Accounting plus and Ask Routh Media, Inc.

Is under no obligation to update this content if changes occur.

Applying this information to your specific situation requires careful consideration of all facts and circumstances, and any information provided is not to be considered as financial, tax, or legal advice.

Please consult your tax advisor or attorney before acting on any material covered.