27-Year-Old With More Debt Than Anyone Should Ever Have | Financial Audit

uh my name is Paul Castro Romero I'm 27. and I'm based on Minneapolis Minnesota. and this is the financial audit. Minneapolis Minnesota so what do you do. in Minneapolis uh I just moved there. recently from Florida from my sister she. was having safety issues so really like. what her car got broken into twice in. the past month in November so okay yeah. was that like the only safety issue it. wasn't like a spousal thing or I mean. crime rates have gone a little bit up.

over there but when she moved from a. crime place instead of you she's uh yeah. she's attending uh mcad of Minneapolis. College of Art and Design so okay yeah. so what do you do for a living in. Minneapolis uh Milan cook line cook okay. what were you doing before you moved uh. before I moved I was in Florida as a. sous chef. so okay so something pretty similar so. yeah uh within the same field what do. you make right now uh well right now I'm. in between two jobs but I was making 18.

an hour okay you're in between two jobs. yeah but what does that mean in between. two jobs so right now you're not working. no I'm working I'm just leaving one for. another okay so. um the one that I'm leaving is uh 18 an. hour but the one that I'm getting is a. sous chef position for a salary of 55. 000 a year dude congratulations that's. awesome so. nice bump there yeah. this new position. um wow okay cool so.

fifty five thousand dollars. so are you afraid of things like. lifestyle inflation happening like. you're you'll be taking a pretty good. pretty good increase there uh yeah I. don't really spend much like no honestly. I don't I'm not very materialistic. besides cars so. well I mean cars are very expensive yeah. so you're getting about a thirteen. thousand dollar increase but that's if. you're working 40 hours a week every. single week no matter what.

before we get into your debts and. everything I want to hear. from your perspective describe your. financial situation. uh digging myself out of a hole why are. you in a Hole uh I was out of jobs. between this past year in 2022 so I. haven't been able to pay off some of my. credits why weren't you working and uh. well some of it was um getting fired. because of a scheduled conflicts okay.

and then before that was uh coveted when. whenever that happened and I've just. been in a hole since then so. okay. dang yeah that sucks how has digging. yourself onto the hole as you. self-described how's that been going uh. it's pretty hard like um I know the. advice you give a lot of people is like. you know just to work hard get two jobs. work as much as you can yeah it's uh.

I've been doing that for about two years. three years now wait what was this hole. what did you do okay because that. clearly that wasn't just from not. working for like a little bit Yeah if. you've been if you've been working like. crazy for two three years I mean you. probably haven't. like cut back on stuff if so I'm a. little confused I mean we'll take a look. but yeah I mean um like before then I. did have like a little crazy spending. habit but it wasn't like too much it was. just not mostly it was just not being. able to like keep up with payments.

that's what it was and then the interest. charged on that and everything well I. guess. the best thing we can do is just jump. into your financial situation we'll see. where some things are so before we get. into any debts and there's. that way. I'm just looking for oh here it is. checking account okay so we have a Bank. of America checking account you started. with fifty dollars that's scary because. I assume you have for rent and you have. automatic payments on these debts you. started with fifty dollars uh no I don't. have rent I'm pretty much homeless so.

what does that mean uh what is pretty. much living with my sister. you have a roof overhead you're not. homeless right well I mean there was a. situation before in December where her. roommate was coming back from whatever. vacation and possibly I was gonna get. kicked out after even after like my mom. sent me here to be with her so. I mean for now it's working out but yeah. you've been staying with her since that. roommate situation was uh I just moved.

there in November so what three months. four months now four months and that. situation was resolved and yeah it was. in December so you can live there no. issues yeah for now for now what does. for now mean when does that happen well. I don't know if her roommate's coming. back and he's gonna have how do you guys. not know that how do you guys not know. she's uh I think she's like doing some. teaching and I forget what African. country she's from but she was doing. teaching over there while attending a. school in Minneapolis so uh is she doing.

is it like a study abroad like an. internship I think so something like. that yeah but she's usually things like. that have an end date yeah she doesn't. have any details like that so far what. do you mean she doesn't she doesn't. understand my sister your sister doesn't. she could probably figure that out by. Sunday yeah an email right I feel like. that's something you need to know. because yeah being homeless that would. be scary and you ended with eighty four. dollars what absolutely sucks is 6500. came in that's fantastic but then all of. it went out and you were left with 84. bucks yeah that's scary how are you. living with 84 in a checking account you.

should probably have a couple thousand. at a minimum uh pretty much all goes to. bills so far so. how do are there times where you. overdraft. uh yeah that's pretty frequent pretty. frequent why. um I usually don't end up having uh. money when the bills actually come in. because I forget they're due so. yeah I have uh I have to management so. you're not very organized no I'm taking. it not at all.

because usually bills are on the same. day every single month yeah somewhere. probably no you can have like a calendar. set up on your phone a reminder set up. yo have money don't be stupid because. guess what my money's gonna have to be. taken out of my checking account boom. have that reminders every day it'll pop. up. hmm. okay so if you're absolutely struggling. in the world. you know Nest the Home D and Amazon. Prime a lot of Van Quint uh actually.

that could be gas Z Sounds. Xfinity mobile uh reoccurring okay okay. that's fine that was only 83 so I. thought that was something else for a. second. now well then you have another Xfinity. Comcast is that like cable and internet. which is under you even though you're. not on yeah that's my um my previous. address internet so what are you paying. for that still you didn't cancel it yeah. I'm about to cancel you're about to. you've been there since November so this.

is month what is it 50 off for cash I. have 50 off for cash I have 50 off for. clash up oh crap we have a Corona that's. never a good thing and then you're. sending out cash up and then a hundred. dollars to catch up then fifty dollars. okay so then a hundred dollars okay and. fifty dollars fifty dollars fifty. dollars a hundred dollars what are we. possibly doing here PlayStation ten. dollars and Korean restaurant in Dominos. PlayStation some pizza and cash apping. out 200 again and then you zeld out 500.

dude what is this what you saying you're. trying to take yourself out of hole. you're not digging yourself out of a. hole you are putting yourself further. into a hole what do you mean pretty much. yeah. um well you come in here and both of me. immediately I can't help if we're just. bullshitting already well the cells are. really just some investments in stocks. so what are you doing that but if you. have all these dads yeah so there's. what's the logic behind that yeah yeah. go ahead and try so I've been trying to. uh I'm not really an investor but I've.

been trying to put money aside into. stocks and then just shorting it. whenever I get any gains. so what do you mean short enough. whenever you get any gains like I'll put. a thousand into whatever and then once. it goes up like five percent I'll cut. the sale. and then I'll I'll cash it out back in. mind we haven't gotten into your debts. but just looking at some of the payments. that are happening that you have to do. that are being taken away like well it's. Fargo auto and stuff like that. um not a Betty man but if I was.

whatever potential you can make on these. stocks let's say it just Falls the s p. 510 I highly doubt that it's beating the. interest that is beating you down on. these debts on the hole you're trying to. crawl out of so what is the logic that's. what I just realized like starting last. year okay so yeah okay good I'm more. financially aware of where my situation. is then I won't beat you up on that uh. too much if you're just learning that. but I am upset that you came in here. watching me saying you're taking. yourself out of the hole and then the.

first thing we look at you're going out. to eat constantly and paying for uh your. cash app and out all this crap and. you're doing all the Playstation. Networks and then yeah seventy dollars. year to date overdraft fee we're halfway. through the second month of the year at. that point. I mean that's insane you know. yeah you're right. this is just discipline if so I'm just. trying to I I need to understand your. psychology behind this before like we go. do in deep because.

if you have self-admitted that oh crap. sometimes bills get due. and I don't have the money so seventy. dollars of overdraft fees in just a. month and a half are happening. because I don't have the money right why. are you deciding to put the money into. the stocks if you clearly cannot afford. it I want you to invest I want you to. take uh advantage of the last you know. three years of the best decade of your. life for compound growth and then the. second best decade of your life for. combo growth I want you to take. advantage of that but you can't do that. if you're just losing everything and.

you're losing everything so what is the. logic behind that we need to get to that. yeah I don't know I just give me. something I was just doing it for fun I. guess you know for fun so it's just a. fun thing it was just kind of like a bet. thing kind of yeah I don't have like a. gambling problem or anything but. I didn't say that and I wasn't. necessarily taking up that Vibe but. it's definitely stupid yeah I've. realized that now are you willing to. stop that if you just realized that yeah. okay digging yourself out of a hole. working like crazy for two to three.

years. yeah we're going to Domino's and stuff. yeah you're right wow crap everything. else you sent me is just. debt. pretty much wait what is this why is. this labeled sisters Hyundai auto loan. statement. um so that's why'd you send that to me. that's her car under her name but I'm. paying it off why because it was kind of. like her birthday present no for her. birthday what if you can afford this.

this is a neck this is nineteen thousand. dollars yeah. 2017 Hyundai Elantra the birthday is. that you pay for it forever uh pretty. much that's quite a birthday present. when when was this decided no when was. this. oh this happened in 2020. one dude you're about to make me freak. out more than I've ever freaked out I. don't think I've ever seen someone make. that kind of decision especially we. don't even know what the rest of the.

debts look like but that. dude that doesn't make sense. I was making good money before when that. happened so that's why what's good money. I didn't really worry about what's good. money. um I was making 19 an hour that's not. good money for this kind of payment for. 500 a month 60 hours a week 50 500 a. month for someone else's car when you. already have your own car loan that what. you have there is not mathematically. Justified you don't buy someone a gift. of here go into debt and sign up for.

yourself that's not a gift the car loan. that I have was after her gift though it. was. I didn't really think about it when I. purchased the cars. but um yeah I bought her present first. and then I bought on cars if you want to. buy me a present feel free to subscribe. because that will lighten my mood and. I'm really trying to get the 250 000. subscribers I'm sorry this is the most. negative I've immediately been but this. isn't say do you know this is insane. that you did this yeah okay when have.

you been made aware that this is. actually just incredibly stupid uh. probably last year when all my cards. well then what have you done about it. what have you done about it trying to. work no no you haven't done anything. about it of like hey yo I can't pay this. I literally cannot afford to pay this. I'm overdrafted every month and I'm. going further and further that I. literally cannot afford this I can't get. rent well she's not really working. um I mean she has it I don't give it. this is her choice that she made to go. into this right I'm just I guess I'm too.

nice or something I don't know no I mean. you probably aren't and I I love that. quality that's not a bad quality but if. it is literally bringing down your. entire life then that's being. self-destructive is it not yeah. okay what is the interest on this let's. I'm trying to figure out the interest on. this trying to figure that out but I. cannot find it I think it's somewhere. around like 17 percent. happy birthday sister. so I need to go back to the beginning of.

the conversation that you had with her. when this happened. I'm actually like. my brain's going crazy right now which. is I've never seen someone do this and I. feel so bad for your situation and I'm. angry for you I'm not angry at you to be. clear in fact thank you for being here. and putting your situation on the. display so other people do not make. these same mistakes it's very. educational so thank you you're doing a. great thing by doing this but I'm just. I'm freaking out for you for this crazy. crazy insanity and you think it's 17.

somewhere around there yeah. doesn't say it on this statement doesn't. but the interest that you're being. try to not have a heart attack on the. show. it'll probably be better. [Music]. for me. but I know I saw another audit loan so. here it is yeah so.

what is this car what what is her car. year and model and everything uh 2017. Hyundai Elantra. the second time we've had to be fair. when we got it we were initially there. just to get me a card to go to work and. she ended up getting that so. yeah it was what is this it was the. sales tax stick yeah it was a lack of. self-control. tactic on your end that too so you. promised in the moment I'll pay for this. forever.

pretty much yeah okay let's go. it's gonna okay we're gonna loop back to. that but it is not going to be. comfortable I can tell you that. no. dude what. I'm looking at your loan now oh yeah I. know you don't look at that what are you. doing. did you drive down from Minneapolis yeah. yeah man I just finished like this. morning yeah 17 hour drive just finished.

so jeez yeah. at least they're making use of this 34. 000 to 200. car loan of death. of which is 8.75 interest terrible. disgusting but not as bad as 17. I can't. believe all of a sudden. 8.75 looks good but it looks good next. to that oh yeah and the minimum okay so. what I'm really confused is what is the.

normal minimum monthly payment on here. do you know the normal 800 I think cool. yeah. yeah but congratulations you owe by the. fifth in a couple weeks you owe three. thousand dollars why because you're. falling behind are you falling behind I. was falling behind on the payments again. so again. good night dude what is this car what. possibly is this car uh it's a 2015.

Mitsubishi Evo. 10 15. 2015 yeah it's my dream car. well I'm about to crush your dreams I'm. about to destroy your dreams. late fee 160 amount due 7.99 amount past. due two thousand dollars total fees in. charge is 160 dollars death. death. death. this. did you come here to compete for the.

worst situation on this show no I. actually came here to Portland pretty. much just tell everyone you know working. to get out of a hole like this is pretty. struggling it's about to mentally a mess. oh I can imagine this has to take a. mental toll and this is where this is. the part of the episode where I yell at. you and make sure you understand the. absolute Insanity that this all is and. then hopefully we can put something. together right now not looking good and. it is gonna be hard and it's gonna be so.

hard. what what's the what's the on your. sister's car what is the term. length I don't remember actually what's. your term length. 52 months. what is this why is there a third auto. loan. wait is there really yeah there's. another car that I got to.

okay this this one is um this was. supposed to be my mom's and she didn't. accept it so. yeah you can't afford to buy the world. everyone in the world are you gonna buy. me a car before you leave are you gonna. buy Brandon the film guy before you. leave a car I'll think about it maybe I. would like a Tesla please oh my gosh. dude jerk. two basically two thousand dollars a. month in minimum minimum car payments I.

know and. go I'm I'm sorry I'm sorry I hope I hope. I'm not making you feel bad but I'm. dying right now I am dying right now. there is death happening that's 50 of. your income 50 of your income is going. to minimum monthly car payments of your. post-tax income. because yes congratulations there is. another debt and this one is twenty nine. thousand. four hundred seventy dollars.

with a minimum monthly payment of 587. dollars. 86 cents at. 8.3 did you understand interest rates. when you got into these. uh kind of not really I mean I thought. anything below 10 was all right but not. the best obviously. so. at least you're not behind on this one I. don't know if I am I don't think so well. at least at the time of the statement No. what's the uh payment period on this I.

believe it's. statement should show in the 72 I think. dude 72. it's almost as worse you can get but now. people are even going longer but I'm. like gosh. Mitsubishi what 2022 Mitsubishi one uh. Outlander SUV. it's part of the letter you're selling. this I mean we'll get to that but you're. selling this. I don't know if I can actually what does. that mean what does that possibly mean.

it has damage to it. how I got into a rear does your dream. car have damage yes. what damage. um engine blew out from racing so it's. undrivable uh pretty much have to get a. new engine so you're driving your mom's. car yeah that you didn't accept she was. trying to do the right thing by not. accepting it because hey I'm gonna put. you in an even more position than you're. already in yeah but instead of like. taking that obviously clear sign you're.

like oh but I'm gonna go continue to get. by choice. how long ago was all this how long was. this is two years ago right for your. sister is that what you said yeah when. did you buy your dream car uh last. when did you buy this mom's car around. the same time. December of. 2021. I'm shaking. there's not gonna be another car thing. in here is there no. I can't afford it. you can't afford this yeah oh we'll go.

through the credit cards okay okay. Capital One. Capital One only 375 on it yeah it's not. bad. and 72 cents. the normal payment of 25 dollars. okay. 11.66 of interest charge. that brings pain transactions of 146. dollars why are we spending on a car. that we're holding mounts on when we're. having interesting crew on why are we. doing that what is your choice behind. that that was uh when I was doing the.

whole cash app investing thing I was. just so I was charging on the credit. card because I put it all into Cash. because all the money on your checking. account went to that instead of being. off the credit card that you're using. yeah. yeah. you're only doing the monthly payments. you're gonna pay so much and it's 31 my. goodness I haven't seen anyone pop into. the 30s yet I didn't even know it. actually was that high. I didn't check it when I saw it.

I'm like invested are you in your. finances how much do you look I just. started like not even a month ago so. I'm gonna have to use that classic. thumbnail on you like. uh what is it where it's like that money. on fire background where I like do this. look and then like The Arrow points to. you and it says. he's done for and like you're in more. depth than anyone should ever be in yeah. and every time I use it it applies but I. swear people just keep one up in each. other.

it's not a competition. okay but humor is a man consumerism yeah. the car is an American. America's greatest addiction. in dingo. 300 oh no no that's your credit limit. what's the balance. previous balance. 194 what's the current balance though is. the question oh available credit 300 on. a 300 credit limit so this is paid off. you don't have anything here uh probably. at the time of the statement.

what you have now I just bought. groceries again last week so so you're. buying in everything on credit pretty. much. is that a bad thing. that's when you can't afford it well I. mean it gives me more time to pay it off. right yeah it gives you more time for. interest of a crew and kill you. have a Verde credit. a verb sorry. limit 500 credit available zero dollars. so I wonder what it is yeah it's you're. over yeah it's 520.

oh yeah it's. 529.35. death of a 35 minimum monthly payment my. gosh. my gosh. my gosh. charge ten dollars you're just a little. interest aren't here a little interest. charts here big interest big interest. big interest. your interest has to be so much yeah.

that's a. total interest charge. fees 109 of fees this year again a month. and a half in what were the fees is this. are those like late fees I think they. might be late fees oh let's see. I don't see because it's not on the. stick yes total fees hundred dollars. monthly maintenance fee ten dollars. you're paying to have this annual fee 99.

you have enough what are the benefits on. this card because you're having a 99. annual fee and then a 10 maintenance fee. this card I think is you yeah. this one is not that great I didn't know. the um terms when I this card is a chop. up close it immediately yeah pay it off. but we'll get to that but this is what. is it what even is the interest rate on. this thing I'm not sure. again I didn't know it could get worse. 33.65 percent.

talking about competing in one up and. you're just one up in yourself. now we have a credit one statement. please be okay please be okay. I think this one's okay. it's not great it's not the end of the. world as far as credit go credit cards. go 280. 61 cents. with a. thirty dollar minimum monthly payment. again your minimum monthly payments are.

stacking and stacking and stacking. interest charts. 6.42 cents you went to Walmart again. you're always going to Walmart you're. obsessed with Walmart. and the interest rate. [Music]. 28.24 percent. those are your debts yeah so anything. else hidden that I do not know about. anything in collections any student. loans anything else that is just waiting. to destroy you. not collections but I do have like well.

I mean yeah I have like past collections. button what do you think that's. collections. yeah you have Credit Karma on your phone. though all right go ahead and download. it well okay so. you have 83. 438.72 dollars of debt and none of it is. good debt. yeah. with a minimum monthly payments of.

1967.21 cents. yeah that's unsustainable. you have to get rid of some of this that. we'll talk about that but the best way. to get rid of this is you're going to. have to sell some of these cars and. you're no longer going to be doing your. sisters you're not it's going to be a. hard conversation it's going to suck but. you cannot can you unlock your phone so. I can see your credit karma for the for. these collections. [Music]. oh you're almost in The 400s Pusher 513.

because. I just feel. oh my gosh I feel so bad. because this is going to be such a climb. this is going to be such a climb. sometimes it feels like holes are. possible to get out of but I promise you. can if I'm aware if you're willing to. actually do what I say. 90 payment history I mean you've missed. 10 of payments.

that's really bad that's really bad. let's view your accounts. yep we have that one. oh my goodness no dude the verveys or. whatever it was it's already it's within. 30 to 59 days late. The Verve card yeah oh. wait yeah. that's what it says huh. I think. no sorry that's the Bank of America.

the auto loan or the. this should be the other one yeah no but. it's only 520. nine dollars no no okay so there is yes. the Bank of America yes that is that is. behind the they got a loan but. this has to be verbs I don't ever say. that has to be behind then also Yes. Credit collection Services what's that I. don't know you tell me what went into. collections that was probably your. insurance.

your insurance Liberty Mutual oh yeah. Liberty Mutual why'd you not pay this. um so I was in an accident and uh. pretty much lost my two jobs that I had. at the time so how long when did this go. into collections probably I want to say. August of this last year. so that won't fall off forever so we got. to put that in your in your debt thing.

because I also want you to have a. relatively healthy credit score as well. at some point this will be considered. like the least important but. man it's also. one of the smallest out there credit. cards. are you ready to get you together like. actually get you together. I mean I think I'm already in the. process of doing it so okay tell me. about your process because from your. spending and you're investing everything. we saw in the statements no incorrect.

you're not so tell me about your process. if it's different than that uh well with. the new job offer and then working for. part-time or full-time at Denny's I'll. probably be making somewhere around. 70 80k a year. so how many hours are you working in. Denny's guaranteed uh for 35. 35. guaranteed yeah. [Music]. are you taking any time off. no I'm working pretty much every day or.

at least trying to. if you're doing if you're actually doing. that actually doing that that's 87. 760 a year. minus taxes and whatnot minus taxes and. after your year because I believe. Minnesota has yeah income tax. [Music]. I'm gonna guess and I've been pretty. good around guessing around Texas you're. going to be bringing home about like 70. to 75 I'm gonna say seven somewhere.

around there yeah. I say seventy two thousand five hundred. dollars. a year but what about your spending. you're uh what about all the stock stuff. and going out to eat and stuff you. mentioned no I'm not doing that okay. well you are doing it so I was I was. you've officially stopped as like right. now because of like two days ago. so you should have in your checking. account six thousand dollars a month so. that's not correct after what after. taxes oh okay yeah with you haven't. started the new job yet once you started.

and then if you actually keep up to 35. or 35 hours a week at Denny's and I hope. you do please do. I'm probably gonna ask for more honestly. if you can the more you can work the. better and that sucks this will be. temporary but here's will you follow. the way to get out of this if I give it. to you well you actually sure. Hey sister. I'm sorry. I cannot afford this I am 83 000 in debt.

and with my full-time job I bring in. only fifty five thousand dollars a year. this is a recipe for disaster I can no. longer afford to do this. this payment I will do it for another. two to three months but it's up to you. whatever you think is right in that fact. two to three months but you're either. gonna have to start finding to find a. job in that time to make these payments. or you need to sell this car but either. way I'm not on the loan you are you need.

to know this but I cannot afford this. I'm sorry that I got into the situation. it was irresponsible on my end I hope. this doesn't cause a rift between us and. all this stuff but I just simply as. simple as you get cannot afford this. right and if you do not pay on it. I no longer have the money to do it. because I'm so far behind on my other. debts that are impacting my credit score. that this will now impact your credit. score if you don't start taking care of. it right that has to be done you cannot. afford this and that immediately gives.

you an extra 483 dollars a month all. right. and knocks off just about twenty. thousand dollars a debt. that's the that's the emotionally hard. one here. um I was also thinking maybe an option. would be refinancing it. the auto loan on her on her end. wouldn't that also be a good option or. no also refinance into what well the. interest rate is like interest rates. insane but you cannot afford this it. doesn't matter I know you can you can. help me for her you could tell her well.

I don't know her credit score right but. wouldn't that improve her credit score. she refinanced it not necessarily okay. because she already has the debt on her. credit right. it'll as long as though she's not. falling behind no she's been paying it. every well I've been paying enough. [Music]. okay but are you actually going to do. that I need to know because if you're. not willing to do that then this won't. happen. this entire situation is for now I'll. have to talk to her about it because. she's still in college so I'm just.

waiting for her to like get a part-time. job or full-time oh this will give her. the fire under her butt to do it you. give a hard deadline right you'll be. very nice to pay for it for an extra. quarter yeah and that's to maintain the. relationship because she is your sister. and yes you did say you would do this in. a very stupid and immature way but. because of that you're going to give her. an extra like three months to do it. let's just say that and I promise she. can find a part-time job that brings her. 500 a month while she's in college yeah. most likely I promise you and you cannot.

do this anymore will you do that I need. to know because that is so important yes. will you be strict about it where here's. the date I will not make a payment after. this yes good. good. then congratulations that debt is gone. three months from now. okay. you don't even have to think about that. after that. then clearly what is best for your.

situation when it comes to the Avalanche. or it comes to the snowball the snowball. method is classic for your situation. small is the biggest but also. [Music]. one of these cars gots to go. and I'm trying to figure out the. situation behind that I know I'm not a. car person I don't. they're both no they're not total but. they're damaged one's total though. technically yeah. what could you do to get that up and.

running. I would have to buy a new engine how. much would that cost. they're going for like 4 000 right now. for a used one. they're expensive because they don't. make them anymore and they're Japanese. imported so. but it might be more cost effective. though to buy a two thousand dollar. engine put that in sell. the Mitsubishi Outlander. they're the Evo that's the one that. broken down no no so the Outlander which.

one do you think you'll get closer to. the what do you if you if you sold the. 2015 Mitsubishi Evo what would you get. for it right now. uh with a working engine. probably around 30. 5. you think so let's just do a quick. check I mean they're pretty sought after. right now is anything else wrong with it. other than the broken engine no it's. just the engine. I think it's gonna be closer to about. thirty thousand just based on initial.

web results yeah. but what do you think you could get for. the. [Music]. The Outlander yeah. um well it has front headlight damage. and rear you're a car guy can you fix. that. no. that's like completely like three or. what. like a bumper torn off and then the. front headlight is completely like. smashed into. so I'd have to take it too close okay so.

it's gonna be because you cannot afford. either of these. because the word gets a little tricky. and it's gonna suck but. I think emergency number one. is. because the interest rates in the band. okay so we're gonna take care of the. credit cards first and as we go through. this it might change because this is a. bit unique okay but I think. you don't pay rent six thousand dollars. so you have six thousand dollars you. have the minimum monthly payments but. besides that nothing else.

car insurance health insurance is that. through your new job what yeah that's. all covered over there car insurance uh. health and dental insurance what about. car insurance I don't have car insurance. is that illegal in Minnesota yes. don't tell anyone no get car insurance. get car insurance get car insurance I. know I know get car insurance on. The Outlander yeah just the Outlander. because you're not driving the other one.

right okay. we'll add a few hundred bucks on top of. that so. that almost replaces your sister's car. minimum payment so you're really going. to be minimum monthly payment probably. around a thousand eight hundred dollars. a thousand eight hundred dollars from. six thousand dollars you're gonna have. it's basic math just to make sure we're. 100 correct. four thousand two hundred dollars okay. it has to be extra safe calculator is. always best okay so four thousand two.

hundred dollars. congratulations I'm putting you on the. Caleb Hammer Financial diet of 300 a. month for groceries. a thousand uh one uh 100 a month for. everything else toilet paper all that. crap okay okay you have anything else. therapy. this that this that that you have to do. on a monthly basis that costs money no. congratulations you have three thousand. nine hundred dollars left. let's do gas. gonna throw in an extra just 200 to make.

up for uh uh anything else that pops up. so congratulations you have three. thousand seven hundred dollars left deal. how are you budging. um I don't know you have to budget yeah. pay ten dollars for you need a budget or. use mint for free I don't care set your. categories ten dollars a month for. groceries 100 for you know the other. sets that you have to have uh and then. obviously your minimum monthly payments. put them in there if you're in that and. then your car insurance and then give.

yourself 100 for gas and then a hundred. dollars just as an extra cushion in case. you go over on any of the categories and. then you know for a fact you have three. thousand seven hundred dollars left on a. monthly basis yes does that make sense. yeah good with that beautiful. congratulations Credit One is gone in. the first month when do you search your. new job uh March 1st okay so in March by. the end of March Credit One is gone. Verve is gone Capital One gone we're. gonna leave the collections there for. now.

and then also I want you to set so of. the three thousand seven hundred dollars. that's left. I'm gonna have you set. a thousand five hundred sixteen dollars. aside for emergencies okay. and then the other thousand dollars that. you have left over is going to get set. to engine fund okay okay then the next. month of your three thousand seven. hundred dollars you have left over he's. at three thousand hours of it aside. okay. combined with your one thousand dollars.

of car fund to new engine fund replace. the engine on the Mitsubishis. Mitsubishi's well whatever the Evo yeah. okay cool then you have a new engine. then you put that on private sale or the. best used car sale you can get most. likely private sale and you get minimum. thirty thousand dollars for it or as. close as you can try to get even better. okay. and then you sell it and then you sell. them so you started this whole process. in the beginning of March so by end of.

April. you've sold it and then you have 30 000. hours put that towards the debt then you. have four thousand dollars left on that. yes. all right. combine it with the seven hundred. dollars you have here left over from the. 3700. in using the 3700 in the next month. you're able to pay off if you actually. follow this and go pure strict balls to. the wall Nothing Else Matters then. getting out of this mess by the end of.

May. 2015. Mitsubishi Evo has already been sold and. the debt is completely paid off yeah. okay that's incredible how do you feel. about that. uh so right now the credit cards are. paid off and cut up because you're not a. credit card person you don't use credit. cards anymore everything comes in the. checking account everything's budgeted. everything's plugged into your budgeting. app yes yeah what about the Outlander. well we'll get to that well we needed to. get rid of the car that you can get. close to sales price to uh to pay off.

the the loan so you're getting 34. because you had to replace the engine. whatever. if it makes more sense I'm going to let. you determine this is a car person I. think that might be the play but if it. makes more sense to put a little bit of. money into fixing up the mint uh The. Outlander issue and then if you can sell. that for close to like 20. 7 28 000 then then do it but if you if. you can't sell it for that look at what. use price cars prices are for that with.

the miles and condition and everything. then do the Evo just see what gets you. closer to when you sell it versus the. money you put into repairing it gets you. closest to paying off the balance of. that car okay cool yeah so at this point. we'll just continue to use the example. we already have your evos paid off your. sister's taking care of her card you're. not using credit cards anymore and your. credit card paid off uh we're at the end. of May heading into June all you have is. the collections. and in this Example The Outlander yeah.

major is your daily driver right your. poor I mean you're gonna be you're. following your search budget still. you're probably I mean you're definitely. above four thousand dollars in your uh. you know extra income because your. minimum monthly payments have been cut. down drastically but let's just say you. have four thousand dollars extra after. you're very very very diet strict budget. right with that we're paying off car. number two The Outlander as quick as. possible Right.

it's going to take seven just about. seven months just a little over seven. months that's not bad no it's not. terrible so really by the end of this. year that car oh everything is gone with. the collections right everything if not. maybe the end of January of next year so. this is a full year process a full year. process of not being able to go out do. you want how do you feel about that will. you not go out to you once I usually. don't I make my own food so I mean yeah. dude we looked at your channel is.

uh for a total year 300 hours of. groceries nothing more yeah yeah cool. we're having car insurance on the car. that you keep right the other one we. don't you don't need it because you're. not driving it all right actually I. could be wrong on that I don't know. check check out the laws I mean if you. own a car maybe you need I don't I don't. personally know that so just just make. sure you're in the legal correct area. you're never using credit cards or not. using credit cards and that's fine and.

then seriously within January or. February of next year you just write a. check and you clear the what is now a. simple two thousand dollars of uh or I'm. sorry uh one thousand seven hundred. dollars a year collections gone killed. 1700 of what Liberty Mutual and then. boom it's done that's end of January end. of February next year only if you follow. this exactly you don't make little. tweaks here to make your life more. comfortable all these different things.

this is if you follow it exactly which. most people would say is impossible most. people wouldn't do I know it's possible. because it's after I've experienced. terrible debt it's exactly what I would. do knowing how bad that debt is and. knowing how much it's the lane the rest. of your life yeah. at that point. the only the only thing that would ever. come in that you have to adjust the. budget it might extended to two years is. if you have to pay rent if you have to. pay rent then that's gonna that's gonna. come out here your budget portions stay. the same just put in the rent cheapest.

rent you can I don't even care doesn't. even matter it's the cheapest place you. can get in the entire metro of. Minneapolis and then the rest goes to. paying this off and again that might. extend the total process and but that's. fine because you need a place to live. all right so. either way. at that point you're still going crazy. unfortunately for probably about four. months save up ten thousand dollars this. is an emergency fund ten to fifteen. thousand whatever you feel more.

comfortable with whatever your living. expenses look like for six months. but if that's under ten thousand dollars. just save it up to ten thousand dollars. just in case anything medical stuff like. that so that's the emergency fund and. then you can start investing but. unfortunately where we're at we're not. even close to talking about that. conversation yeah you need to get out of. this so I've laid it all out I beat you. up I went crazy my blood pressure went. to the Moon. I need to know what you think about the. situation I need to know what you will. actually do knowing yourself I think. it's pretty solid advice honestly.

um getting rid of one of the cars that I. don't need really and then having my. sister pay her own. so I'll probably be. I'll have to work things out with my. sister but most likely I'll probably be. doing exactly what you said pretty much. so most likely yeah what's the thing. that could throw it off your sister. well I just want to give her enough time. to get something three months is more. than enough time to go work at a local. coffee shop I promise you right I just. don't want to put her into more pressure.

done so dude your situation is so bad. you have to okay I know I can take it. she's you can't you cannot. mathematically you cannot take it it. doesn't make sense. it doesn't no please please don't do. this now please don't do this now commit. to it commit to it please. she gets to know more than three months. okay. she's being a childhood treating like. her like a baby. she can work at McDonald's for a few.

hours a week and bring in. uh she can work 10 hours a week and. bring in 500 a month right. please for your future please. anything else. um. I think that's it for Paul this is. probably the worst financial situation. we've ever seen if it's not then it's. easily the second. um I feel terrible for the dude and I. really really hope he buckles down he. actually takes care of the situation.

with his sister which I'm skeptical. about sadly it's the only way out of. this does actually put in the work for. the car and then sell it and sacrifice. like crazy for a year to two years. depending on how the overall rent. situation looks but this. this is a tough situation so I'll give. him some encouragement I know that was a. hard conversation. um for now there I mean there's nothing. more can give him then a zero out of ten. for a hammer Financial score make sure. to check out all the fun things in the. description like my Instagram and. Twitter and don't forget to subscribe. thanks.