32-Year-Old Relies On Her Mom To Survive | Financial Audit

I'm based out of but Texas and I am 32. years old. This is financial audit. What do you do for a living? So I'm an. operations manager for a food company. H. okay. Very cool. And what do you bring. in on a yearly basis? Uh 95,000. 95,000. Okay. That's definitely a a chunky. salary. We haven't seen one of those in. a good while. How do you feel living off. of $95,000 in Buda Texas? Um, so right. now I'm having trouble budgeting. My. previous job, um, I made a lot less,

like 65,000 and then with bonuses I. cleared about 85. Um, but I got paid. every week and this new job I get paid. by weekly. So I'm having trouble. budgeting a little bit. So kind of. paycheck to paycheck. Really? Paycheck. to paycheck in 95. A lot of I mean we. all know it exists, but a lot of people. would be like, "Come on, you're making. 95,000 bucks a year. How are you. paycheck to pay? How are you paycheck to. paycheck? Um, right now I'm trying to. So, I left my job or got laid off from.

my job. Mhm. So, I was out of work for 3. months. So, I had to pull out of my 401k. to kind of live and keep my house. Um, so for me, I'm trying to rebuild a. savings and I'm also trying to rebuild. my retirement. Pull from the 401k. So, how much did you pull from the 401k? Um, I Okay. I used it to pay off debts so. that I wouldn't go into So, I paid off. all my credit cards and any big debts.

that I had at that time. Okay. How many. big debts did you have at that time? I. honestly I think I had about $12,000 in. debt. Mhm. At that time, how long ago. was this? Uh September. Okay. So, with. my old job, I got bonuses every quarter. So, usually I'd make big purchases and. then I'd immediately pay off the credit. card. But when I lost my job, I missed. out on three. bonuses. So I hate that I wasn't able to. pay off my debt. Yeah. And then going.

into losing my job kind of panics of. having that much debt and not being able. to pay it. So how long were you between. jobs? 3 months. 3 months. Mhm. It seems. pretty drastic to have to pull from a. 401k. I had no emergency fun. No. emergency fund. That's why I say having. an emergency fund is an emergency. Yeah. No, totally. I'm like the perfect. example of that. Yeah. Anything can. happen. Yeah. Uh cuz I was definitely. like I was looking for another job. anyway. Oh, really? Cuz I wasn't really. happy with what I was doing. Um and it.

got to the point where I could either. quit or be fired. So, I chose to be. fired so that I got unemployment. Oh, all right. No severance. Uh no. severance. Okay. Yeah. Company I worked. for doesn't really do separate. Anything. can happen. So, got to have that. emergency fund. Anything can happen. So, you may as well subscribe. There's no. consequences either. We're trying to get. to 250,000 subscribers. So, there's no. consequences for that. There is. consequences for not having an emergency. fund sometimes, though. Yes. And that's. kind of why I'm here to kind of help.

figure out how to do it. Well, yeah. Well, why do you feel you're still. paycheck to paycheck? You say you're. trying to save and stuff, but what do. you think is holding you back right now? I think because I ran down to basically. like I used the last of the money I. pulled from my 401k and I ran down to. pretty much zero. New money. the new. money that's coming in. Why is it. paycheck to paycheck? So part of it is. like I'm working on it is I order a lot. of food out and that's I'm sure if you. look that's a lot of those PayPals on. there. Okay. And um the other part is. I'm trying to put money back in my 40.

not a 401k a traditional IRA right now. So every paycheck I put $260 away. Okay. And then I put $300 in savings. Wait, you drained your 401k to zero? No, I not to zero. How much did you take out. of it? What's it? I took out 30,000 and. to pay off my debt and live off of that. amount and pay bills. And how much does. it go down to? 10. Oh jeez. But I also. kept um I opened a money market just to.

keep my tax money in because I knew I. was going to have to pay taxes. So I. held back a certain amount that I took. out because I was going to have to pay. taxes and penalties. Yeah. How much did. you save on the side? Um, I saved. 4,000 just to be safe, but I ended up. only owing 2,000. Oh, okay. Okay, that's right. Okay. Okay. Okay. Okay. Okay. Okay. Yeah, cuz it. probably didn't have much time to grow. from the money that was in there. Okay.

Dang. So, did you roll that 401k over? So, I can keep it where it is as long as. it doesn't go below below $5,000 without. a penalty. So, for right now, I Well, are you happy with where it is, though? Um, I mean, with the economy the way it. is, the returns on it. No, I just mean. with who's managing it and everything. Okay. So, you're just going to leave it. over there. You're not going to. consolidate it in any way into one. account, one IRA or anything like that. I don't really know what the best option.

would be. Um, I mean, it's fine, honestly. It's not going to make the. biggest difference. And that's kind of. what I thought and that's why I thought. about I just like having everything. under one roof. But okay. So yikes. So it pretty much. remained to $10,000 then. Well, it. actually I think it went down to eight, but now it's back to 10. Okay. Yeah, cuz. we've had a little bit of recovery this. year so far. I mean, it's abs and flows, but mostly a little. bit of a recovery. Uh, okay. So, was.

that your retirement savings at the time. of getting laid off then? $10,000. $10,000 I had. So originally I had. 70,000 in my and then I lost quite a bit. due to the market. So at the end with. their match I had about 45. cuz I lost like 15 to $20,000. Yeah. On the market which was which. pretty awful. Sucks that you pulled out. of.

Yes. But hey, I do have good news. So, they do stock options, but you cannot. have access to them until you leave the. company, and you have to wait a full. year. Mhm. So, my stock options are. going to be around how much? Over. $30,000. That is good. That's good. And. are you're going to sell them? Um, yeah, I'm going to sell them. Yeah. Okay. I. want to take a quick moment to thank. today's sponsor, Surf SharkVPN. Do you. need a VPN for streaming, booking. flights, or online security? Then look.

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life safe from all angles. Sign up today. using the link in the description using. the code Caleb to get 83% off, plus an. extra 3 months free. Plus, there's no. risk with their 30-day money back. guarantee. Get the best online. protection and privacy with Surf. SharkVPN. How has that stock performed? It increases pretty much every single. year. It's a privately owned company, so. they it's kind of like a pension plan. when you think about it. Okay. So, they. do it based off your rate of income plus. a certain amount of growth for the.

company. And taking out a 401k. Okay. Yeah. I mean, this is still brutal. You. only paid $2,000 for it. But what sucks. is that. money that was in there, went down, doesn't have a chance to grow again. You. you took it out as I mean, that could. have been the bottom of the market. Maybe it's not. No one really knows. That could have been the bottom of the. market right around then when you pulled. it out, right? Literally the worst time. If it is I. think it was the bottom of the market. because I gained that $2,000 back pretty.

quickly. Well, I know we just we don't. know where the market's going to go this. year, though. We don't know where the. market's going to go in a year, so who. knows? It was the bottom for that time. Let's take a look at your checking. account. Let's see where things going. So, this is with a credit union. Okay. Yep. So, well, with your income, $95,000 a. year. What's your bi-weekly paycheck? So, I get about uh just under 29 29,000. uh 2,900. Well, yeah, 2,900. Yeah, that would have. been great. 29,000. Yeah, I wouldn't. have any issues.

So, basically $5,800 a month. Every once. in a while, because it's bi-weekly, you. actually get a triple check month, which. are always pleasant, but we're just. going to go with the 5,800 after taxes. And is there a workplace contribution to. a 401k? No. But so you're just doing an. IRA? Yeah. Okay. Okay. Very cool. And. you said like $250 to that. I do 260. bi-weekly. Okay. So you had a balance of. 2,000. bucks. You ended with a balance of 2,000. bucks pretty much. Mhm. So Amazon spending cash app out.

money. Firehouse. subs. There's your mortgage. So, you had. a mortgage while this whole thing was. happening, while you were laid off? Yes. That was my biggest worry. It's fair. Again, that's especially when you get. into those large debts, though. Usually, a 30-year fixed rate mortgage, especially at a low interest rate, isn't. that much of a risk, it becomes a very. large risk if you don't have an. emergency fund. Yeah. And that's kind of. where I was. And I have a I refinanced.

to get a very low mortgage rate. So, and. my house is worth a lot more, but I. didn't want to be forced to have to sell. my house, right? Of course. And Amazon. and Amazon. And are you obsessed with. Amazon? I think so. This whole thing is. like Amazon and PayPal. PayPal. A lot of. stuff for like my dogs is on Amazon just. on auto shipment. PayPal. $535. Okay, I got you. But what are what. are all these PayPals? Uh, PayPal 530,

PayPal 4, PayPal 19. Some of it's food. Like the small ones. are food. Like in the 20s, 30s, 40s, those are usually food. Um, the bigger. ones I have like really expensive. hobbies. Um, so those are taxes. Okay. Mhm. Expensive hobbies. Okay. Well, you say you live paycheck to. paycheck. If you know you're struggling. paycheck to paycheck, what? And that's. kind of what I I've been working on. So,

what have you done to start working? Uh, stop spending so much on food. Trust me, like this is bad, but I was way worse. What? Every day, something like that. Pretty much. Multiple times a day. Pretty much. Multiple times a day. Uh, not multiple times, but usually like at. least once. So, right now, I even drive. home from work. So, I work in San. Marcus. I drive home for lunch pretty. much every day so that I can eat at. home. Can't pack a lunch. So the the. their break room area is kind of pretty. much.

non-existent and there's nowhere to. really eat. It's a lot of driving. Yeah. Amazon. Oh my gosh. This is all. throughout. here. Scoop. soldiers. Okay. Lots of roundups in. here. And then Yeah, I did that. So you. do grocery shop being delivery. So I. started that. I already canceled it just. cuz I thought it's not really worth it. No. PayPal. PayPal. PayPal. PayPal. PayPal. PayPal. PayPal. PayPal. It's.

crazy. Insane. Those roundups also clog. those. So many. roundups. Is that your way of trying to. save a little money or something? Yes. It's like a few cents here and there. It. just rounds up. Goes straight into my. savings. How much is in your savings? Um 670. I know. I just I literally don't get it. I don't get it. If we were in a position. in September where you were laid off and. because you didn't have an emergency.

fund, you had to pull from your 401k. And now we're in a situation where. you're in a job. Great. I'm happy. That's fantastic. I'm very glad you land. another. position. But you're just going crazy on. Amazon. You're going crazy on expensive. hobbies, as you call them. You're going. crazy on paying for someone to pick up. your dog poop or getting groceries. delivered or going out to eat. endlessly and we have $65070. $670 set aside. It's not even that's. barely even a percentage of what an. emergency fund would be for you with a.

mortgage and everything like that. So, what are we why have you not why have. you not addressed that? And don't just. say you're waiting for this conversation. cuz you self diagnosed this coming into. this. So, why has this not been. addressed? $670 is terrifying. It is. terrifying. Um, I think part of it is I. have a little bit of a crutch when it. comes to budgeting. My mom's an. accountant. She can see my account. So, she usually is like, "Hey, dude, you're. 32." I know. She usually says, "Hey, you. have this much money left." Um, are you.

kidding me? No, it's time to exit the crib, my girl. No. And I agree. That's kind of why like I. need help budgeting to figure out what. that looks like long term. Um, I don't want to put as many miles on. my car, but it also I can take better. care of my dogs that way by going home. for lunch. Uh, I'm going to get you. signed up for Fizz. It's one of the. resources that I partnered with. It's. good because you will not overspend on. the card and you're obsessed with. spending. It's essentially like a. budgeting card, but it also helps build. your credit score. Not that I really.

care about your credit score right now. I just need you to have limits on your. spending and see where things are going. like that as well. Yeah. I even like. this is bad, but even before it was even. worse. So that's why I've tried to cut. back on a lot of things. Why are you so. relying on your mom? What is this. relationship? I think it's. just the way that she's built the. relationship. So for me, I've been. trying to create boundaries and talking. to her about like, hey, stop looking at.

my money. Like cuz it was get a. different checking account. It was made. when I was 16. There's choices you can. make. 16 to 32. There's been a couple years. Yeah. Like, is there any personal responsibility. here? Um, I'd say yes. Yeah. As in walk. into Chase. Hey, I'd like to open a. checking account. Congratulations. You. have a checking account. Yeah. Yeah, I could do that. Not Not to. be a but I mean, the fact that you just. blamed it all on your mom. I have I just.

like that infuriates me. I definitely. don't blame blame it on her. I think the. way I've been budgeting isn't helpful. So, I got Okay. How have you been. budgeting? So, I got meant like whenever. I subscribed to you. Um, so I've been. trying to use that and learn a little. bit what that looks like. Um, it's. gotten a little bit better cuz before, I'm going to be honest, I would spend. like $800, $900 a month on like to-go. food. So after watching what that looked. like long term, um kind of realizing.

what buckets they're going into, it's. helping me spend less. I will say when. I'm at work one or once or twice a week, I do go to lunch with my crew. Um but. most of the time I've been trying to. just go home. Well, and when I'm sick, I'm not going to lie, I get to go. A. budget is only as good as someone who. actually uses. it. Mint is great. That's what I used. I. ended up switching to Rocket Money. Um, but both are fine and there's plenty of. good ones. I mean, there's You need a.

budget. That's fantastic. A lot of. proponents of that in the comment. section. Dave Ramsey's budgeting app is. great as well. There's so many. None of. them matter if you don't actually follow. the budget or do the budget. What if you. set up your budget? What have I set up? Do you have mint on. your phone right now? Let's just take a. look. I'm not I've touched a single. account, but let's see what this budget. is. And also open a checking account. under your your where no one else can. see it but you. So you don't have this. crutch to fall back on these excuses.

that we're just making. So here's you can just go in there. immediately. See, we're already $628. more than this point in last month's. spending, which I thought was. interesting um cuz I actually had paid. my taxes and everything. So, I thought. that was a little weird. The loan scared. me and then I realized you have a house. and mortgages do tend to be Yes, a. little more expensive. All right. I. mean, I'll say a good thing cuz it has.

been kind of negative. I apologize. Ah, bug. Okay. Um, your mortgage is well. within your income. So, that's good. And. also, thank you for coming on the show. and putting your uh financial situation. on display for other people because it. is educational helpful for other people. Yeah. And that's kind of why I thought. it would be a good idea, like a good. wakeup call, plus to show other people. that what can happen if you don't have. an emergency fund, right? Absolutely. So, home is certainly, you know, that's. been 52% of your thing, but your second.

biggest category has been food and. dining. You March, we've just started. March and you're at $544. So, I'm not I. think unless some are miscatategorized. It's miscatategorized. Shopping 442. That's probably correct. It's a lot of. money. Uncatategorized 205. Maybe some. of those are food. Who even knows? I was. going through them. There are And again, we're 7 days into the month. There are. some things that were uncatategorized. that I've canceled and in sentence got. refunds for, but it's not populating on. Mint. You have children? No.

Okay. Kids, $200. Maybe your dogs. I. think it pro I probably categorized it. as dogs. Okay. Yeah, dude. Well, I mean, objectively, you spend a crap ton of. money on food. So, I would This doesn't. surprise me at all if this is true. There's only a few things that are. uncatategorized at this point. Let's. see. Restaurants. Yeah, those are all. restaurants. Oh, well, I mean, okay, some of them are groceries in there.

What are What are these hobbies? What is. Gundam to $105? Uh, so Gundam, like the. model kits that you can buy and build. Okay. No, I don't know. I'm sorry. Yeah, that they're called Gunpla. Uh, and. there's a anime called Gundams. So, you. build like model kits from that. Oh, okay. That's kind of fun. Yeah. Okay. But it like the model kits can be pretty. villages or something like I'm sorry. I. died. No, they're giant Mecca robots in.

the anime. So, think of like Pacific. Rim. Okay. Yeah. The robots that they. used. As much as I love giant robots. that kill everything, I like emergency. funds a little more. Yes. Let's look at. this PayPal. thing. PayPal statement. Oh, wait. Is this an ongoing debt? No. You pay this off every month. That Yeah, PayPal's pretty much paid off when it. So, when I sent you this, I just paid it. off. Yeah. So, that that is gone. I do.

have balance on there now, but I'll be. paying it off. What's on there right. now? 200 bucks. The Gundam thing. Okay, good. Yes. You have not paid any. interest this year, but this was one of. those that you paid off when you took. from your 401k. Yeah. Okay. Oh, we also. have Oh, a Chase credit card. Mhm. So, this also always paid off. Uh sometimes. I do keep a balance on that one. Um, it's onlyund only you. made $133 balance. Why are you keeping a.

balance? Well, I'm going to pay that one. off. So, that that'll be paid off like. this. Okay. What do you mean you. sometimes keep a balance then? I guess. statement to statement. Um, like a bal a. new balance will be in between. statements, but like I'll pay off the. $130 this week I get paid. Why do you. have a ever have balance in between. statements? I'm confused. Why pay. interest on money when you can just pay. it off? Um, so when I was between jobs, I put I had to get third party health. insurance, so I put that on the credit. card and the last one just renewed.

before I get my own insurance through my. company. You were unemployed for 3. months. Mhm. How'd you go through 40? Was it 30 or $40,000 that you pulled. from your 401k? Um, 30,000, right? 30,000. How did you go through? I paid. taxes on that. Yeah. $2,000. No, no, no. That's what I paid the IRS like with. taxes this season or this year. Oh, okay. So, they pull out a certain amount. just right off the bat. So, even though. I pulled out Right. Okay. That's why I. was confused. That's why 2,000 seemed.

insanely low to me. No. So, even though. I pulled out 30,000, I only cleared 23. Yep, there it is. Okay. And then I paid. So, how'd you go through 20? Well, let's. just say 20. How did you I paid off all. my debts. So, because I How much was it? It was like 10 grand of debt. Mhm. So, I. paid all of that off and then I kept. 4,000 from the 23 straight for taxes for. this year. 4,000. That's right. But it. ended up only being two. And then. basically I was left with Okay. 9,000.

So that was able to make my car. payments, pay my water bill, electricity, mortgage, and get food. And. as if you didn't eat on enough or have. Amazon enough, Uber Eatats, Amazon, Amazon, a health plan. That's the. private Yeah, that's the private. insurance. Okay. Amazon. Amazon. Popeye's. Starbucks. Uber Eats. Uber. Eats. Uber Eats. Support John Hopkins. Amazon. Evo. Evo. Evo. So, we're just spending lots of.

money. And some of these Amazon. purchases were expensive, too. And this. is a lot of money that was spent. Yeah. And some of it is like strictly for my. dogs, like certain things that they. need, like their food or specialty food. like one of my dogs has to be on. specialty food. So, there are certain. expenses that I like have to spend um to. make sure that they're taken care of. And then some of that is just straight. food. Yeah. You didn't need $47 of Uber. Eats. You didn't need a favor $25 to. Starbucks. No, it's essentially like.

Uber Eats for those outside of Texas. $48 of Uber Eats, $35 of Uber Eats, $36. Uber Eats. I like being a little. naughty, having a little Uber Eats cuz I. can afford it in my budget here and. there, but even still, I never get it up. to even $30. Yeah. What are you were you. just binging? What's happening here? This is so much food. I think or money. at least. when like I'm struggling or like I was. sick so I just order food home cuz I. didn't feel like getting up and cooking. So for me I think it's more of a like a.

comfort thing if I'm not having a good. day. Yeah, but why is it 50 bucks? Because that's how like the delivery. fees and stuff. Dude, I get Uber Eats. every once in a while. the So, I'll. order like um for example, two um sushi. rolls and edetomami with tip and. delivery is $45 plus dollars. Then we're. not doing that anymore. It's as easy as. that. Drive to it if you have to. Can't. be terribly far. Not terribly far. I bet. the gas and. time whatever to make it up with. See,

total interest charge in 2023 so far, 40. bucks. We're barely into the month. We. started the third month and you've. already paid 40 bucks in interest. What's the point? You're not being. responsible. This is why again I'm going. to get you set up on the Fizz card cuz. it makes so much more sense for you. People Some people can't have credit. cards. I don't think you're a person. that can have credit cards. You are not. disciplined. Yeah. And leaning on your. mom for budgets. And that's kind of why. I'm trying to like the health plan is. the last thing on there. It's out of my. wallet. I've removed it from all my. accounts so I can't use it. I'm just.

waiting to pay off like the rest of. that. Do you have any other debts? So, I. had the $200 in PayPal that I told you. And then I have $300 on my Apple Card. So, I signed up for like health uh N. Do. you know what that is? Mhm. So, I signed. up for that and my insurance right now. does not cover it. So, I had to pay out. of pocket for it. I don't have your. statement for your Apple card. Because. it I just did it like a couple days ago. You're opening up credit cards. Why.

didn't you just put it on your freaking. checking account? Uh, I don't know. Probably because you can't afford it. Probably because they're spending. everything on everything that's. unnecessary. Yeah, dude. If you can't. afford it, we're not opening up credit. cards to do it. You'll get into such a. dangerous situation eventually. I don't. care if you make $95,000 a year. You'll. get into a dangerous situation. So, the. Apple Card I pay off like every month, period. I know, but you opened another. card. No, that one's been open. It just. had a zero balance. What What's the one.

you talking about then? You you said you. just opened something so you couldn't. send me the statement. No, no, no. I. just bought something so it was it. wasn't within the 30-day statement. period. How And do you spend on the. Apple Card? No, I don't use the Apple Card for Okay. much of anything. Do I have your. mortgage statement, though? I don't. think so. No, I don't. What was that. mortgage payment again? Um, 1637. Okay, cool. What was the purchase price of. this home? Uh, 220. What's it worth now? Uh probably close to 400. So when the.

market was really good, it was close to. 450. Oh yeah. Uh right now it's. averaging about 400 410. Mhm. Yeah. Okay. Very good. Well, happy you did. that. And again, this comfortably well. at least this fits in your post tax. income. Yeah. So it's okay. Um three. bed, two bath. How many square foot? So. it's 1500 foot. It's three bed plus an. office and two full baths. Very nice. Cool. Uh okay. So that's your.

mortgage. Now, do you want help building. a budget? Yes. Okay. So, for for right. now, I pretty much give myself or I tell. myself I can spend. $250 every week on groceries, gas, basic. stuff. That's the way I've been taught. how to budget. And I think because of. how I learned how to budget is why I. can't really do it. Plus, with my old. job, I was so used to getting paid every. week plus the bonuses every quarter. So, I had a lot more expendable money at. certain times. I'm sure some people can.

do it like that. I honestly probably. could do it like that, but I'm going to. be like probably do it the way I'm doing. it where I do very specific categories. Well, it's actually not even super. specific, but it's more specific than. that. And I think that'll help with your. situation. So, we have mortgage 1637. What's your average utility payment? Um, so all of them together are about. 250. Water, electric, gas. Good. You don't have any car debt. Vehicle. debt. I do.

You didn't send a statement for that? I. did. It's on uh my checking my checking. account statement. It's attached. Oh, it's attached. It's being a little. sneaky. Yeah, it's if you My credit. union does it weird, so it puts it all. on one statement, but when I looked, it's on there. Oh, it was so sneaky. Oh. no. I thought we were at a point where I. was like, "Okay, let's get on a budget.

We'll call it a day and you'll be. fine." And using that budget to get an. emergency fund, but now we have a debt. Okie dokie. $17,49951. By the way, not upset that. you have a debt. I'm just upset by these. by bad debts in general. So that's what. it is. Not upset at you. What is the. car? Uh, it's a 2022 Hyundai uh, Santa. Fe. Okay. This must be a relatively long.

loan because. So, I did 66 months. Yeah. But my. interest rate is I think it's on there, right? 2 something. It's not on here. I see the. interest that's charged but not the. rate, but it's 2 point something. Yeah, it's pretty low. Good. Um, so my. thoughts were for like my cash out, I. was going to pay off my car to get rid. of that debt. Huh. My 30,000 plus that.

I'm going to get at the beginning of. next year from Oh. So my thoughts were. I'd pay off my car and just get rid of. the debt cuz that frees up 300 minimizes. risk for sure and I wouldn't be upset, but I just have to always say what I. would personally do. But. $173 a month. This is not Oh, bi-weekly. By weekly. I do it so I pay less. interest and I pay extra. So that's not. actually the amount due. Okay. But. that's what you pay. You pay three.

usually except for again couple months a. year that'll be three. bi-weeklyies, but you pay typically. $3478. Mhm. And the reason we can put it in the. budget like that is. because the months the typically the. months that you would have to pay an. extra payment on it is also the months. you'll have an extra paycheck. So I'm. not going to stress too much about it. That's car. What do you use for gas? You. drive a lot. Um what do you mean? Monthly basis.

Sorry. Um so I fill up every week at. least $45 a week. at least. Mhm. So, if I drive home more. often for lunch, obviously I fill up. every six days. Jeez. Okay, we're going. to call it. $220 a month. And what did where were you putting in. the IRA? Uh, I put bi-weekly $260. So, every paycheck. Bi-weekly. Yeah. Okay. So, the paycheck thing really Sorry. is.

important to you, huh? I guess that's. just how my brain works. Well, we're. thinking about monthly budgets now. I. think this will be an easier way to. organize. it. Okay. Healthcare. What is your. healthcare expenses now? So, uh it's. about $400 that I pay a month. Uh it's. not great, but I needed some type of. healthcare insurance, but I canceled it. as of the end of the month because. what's it going to be? Uh $270. Okay.

Do you have any. ongoing things that your health things. like therapy or medication or So I was. seeing a therapist um and I do take. medication obviously for that but my. current insurance doesn't cover therapy. so I haven't been able to I was seeing. her every week um and that my spending. was something that we were talking about. and working on. Yeah, you I mean you can. get to a point where I think you could. comfortably afford to just pay it in.

cash at least every two weeks. And. that's that's what I was thinking, but I. wanted a better idea of like what it. really What do you think you do for. subscriptions on a monthly basis? Uh. right now they're free. Oh, okay. So I. don't really pay for anything. Okay. So. we have mortgage at 1637, utilities at. 250, car. 3478, gas 220, healthcare. 270. Any other things that are required. on a monthly basis for you that you.

have? What's your car insurance? Car. insurance is one is going to be 130. I. just got it reduced. They charged me 150. and I called and asked if we could get. it down. Okay. Anything else? Not that I. can think of besides like the debts that. I have that I need to pay off. Okay. Any. utilities? Did you put internet? No. So, internet $74 a month. That's basically a. necessity. Uh 64. Sorry. I don't do cable, any. subscription services or anything like.

that. I like use my appearance. Ah, there it is. All right. So, right now, your necessities. $2,98 on a monthly basis. By the way, those categories that I read off are on. the screen in a pie chart. Uh, thank. you, Brandon, for putting those in. They. are the categories that you're going to. set in there. You just don't spend over.

them. The only one you will is sometimes. that car one because it's not a. bi-weekly thing. But you set those. limits and you just don't spend over. them. And if you do because they're a. necessity, then you readjust that in. your budget. You move some things. around. You reallocate some percentages. to those things. Does that make sense? I. forgot cell phone. What's your cell phone? Uh $55 a month. All right. 29638 cents of your post tax is 51%. So.

if we're following the most basic. budgeting rule ever, 50 30 20 50% on. needs, 30% on wants, uh 20% on savings, you are already 1% over your need. So if. your needs expand in any way whatsoever, you're blowing up your budget. Mhm. So. things are already starting to falter. cuz I'm sure when we do things like this. like you're going to build a more. concrete budget. This is like an example. budget. I'm sure we're missing one or two things. that are mandatory on a monthly basis,

you know, within your life that you're. just not thinking about right now. Just. even minor things and we're. already, you know, almost 52%. over 2% over. So you're at 52%. Now of what you are saving, what was the. IRA one more time? 520. Yeah, 520 a. month. If we did 20% on savings, 520 is actually. 9%. So that category is lower. And then.

your wants category is like really big. The whole world. Yeah. So, yes, this is where Well, first of all, you don't have an emergency fund. No, you don't have an emergency fund and you. have a mortgage and that scares me. And. we have your needs saved up here. I. would want you to get to, if we. calculate your needs, times six, $17,000. Basically, round it up $18,000. We'd want that to be your emergency. fund. Okay? You need to get there as.

soon as possible. What you have Oh, no. We didn't we see we didn't even we. didn't do groceries. Yeah. Or my the. $300. So $600 that I'm putting away a. month. The only time I didn't do it was. my first paycheck. Wait, I'm sorry. What? I put $600 a month into my. savings. Oh, on top of the IRA. Yeah, on. top of the IRA. The only time I didn't. do that was uh my first paycheck just so. I could get Well, then you're much. closer then. Okay. You're going to do 300 to. groceries, though. 300 300 groceries,

$100 in toilet paper and all those other. necessities. So now I mean your needs category is you. know a few percentage points over at. this point. And then plus for my dogs so. I count that usually in my groceries. How much do you think that is on a. monthly basis? Probably. So I have a. German Shepherd so a lot of dog food. $65 every uh four weeks. So every month. $65. And then for my Chihuahua, it's.

maybe I spend like every other month on. him and it's like 50 bucks. Every other. month. 50 bucks. Yeah. Maybe maybe more. So it's So now we're throwing those. items including food and groceries and. everything into the pie chart. And now. your needs is. $3,4528 which. is 60%. You are now your needs category. is 60%. You are.

overextended. You are overextended. None. of this is making sense. anymore. The car debt would help with. that. You're spending, you know, a good. amount on the dogs. your healthcare. isn't you know included in anything work. where it takes you know they where it's. like shared at all. Um it will be so. that's just I pay out of pocket it's. 8020. So they pay 80% I pay 20%. So. really with this number after your. average of 5,800 you get hitting your.

checking account on a monthly basis. 3,4 52 is gone. You have. $2,348. left. Okay, you need to come up with a. concrete budget of all these categories. I'm going to give you an extra $200 of. wiggle room for things we just have not. taken account for. You know, what maybe. you need a little more toilet paper. spending. Maybe you need a little more.

in this, a little more in that. Whatever. So, $2,100 cuz you're going cold turkey on. your bull. $2,100 is what you have. And if we are. trying to we we have to expend your. emergency fund now because it's more. expensive. because we miss some things now. We need. you to be at $21,000. So, if we have. $21,000 you need to get to, if you're. putting. $2,100 towards it on a monthly basis,

it's going to take you 10 months. And. that's what you need to do. And a lot of. people, they say, "Well, someone can't. just cold turkey on it." We've already. seen what happens when you don't have an. emergency fund. It's drastic. There's no. point of you right now, and it hurts me. to say this, there's no point of you. building up the IRA right now if you. don't have an emergency fund. Because. guess what? Last time you built up your. 401k, you didn't have an emergency fund. You took away your 401k, you paid the. taxes on it, and you paid penalties, all. that stuff. So, this makes no sense. We're not doing the 520 towards the IRA.

right now. That hurts. All. $2,100 that are outside of the budget. cuz we're not going out to eat at all. We're packing lunches. We're not going. We're not having fun that costs money. Okay? Fun that cost money. You can have. a lot of fun that doesn't cost money. Takes my dog to the park every single. day. We throw the ball. Very fun. Doesn't cost me a thing. It costs money. to buy the ball. That was it. So that's. 10 months. realistically. No, no, no, no. 10. months. I don't want to give you any. room to slip. If you're an adult, a.

human who knows how important this is. You. wouldn't because it's dangerous not to. have an emergency fund. So it would take. 10 months to get to the $21,000, which. is a six-month emergency fund for you. At that. point, we 50 20 it. But really what it's. going to be for you until you increase. your income, your needs is going to be. more 60%. Your wants can only be 20%. And then investing is 20%. So at that.

point, we're putting towards, you know, your IRA and then once that's maxed out, you're putting it towards like a. brokerage one. So, uh, sorry, $58,000 or. $5,800. The 20% that you'll invest is. $1,160 a month. You know, you'll max out. your IRA pretty quickly with that, you. know, before half a year is even done. And then we're just putting money in. brokerages and similar accounts. I'm not. going to give investing advice in terms. of what to put into. I personally put my.

things into like S&P 500 and index fund. It's great. You can do like u someone. like. me can do targeted retirement accounts. as well. Those are fantastic. you pick, you know, the yearish that you're going. to retire and it'll be rebalanced as the. years go on. So, it's more aggressive up. front, more conservative as it gets. closer. So, things like that are what I. would do. But either way, we're 10. months from being able to start. contributing to those anyway. Now, the.

car, you brought this up in this extra. money that you have that's coming at the. beginning of the year, your emergency. fund will already. be pretty much done at that point. Mhm. So, not much of it should have to go to. that. shouldn't have to really at all. There might be a little because you have. one extra month. I don't know when that. money is going to hit your account, but. either way, oh, this is where some. people are going to disagree with me. Ramsay would definitely disagree with me. with what the car is, with what the. balance is on the car, and most.

importantly with what the interest rate. on the car. is. I'm doing minimum monthly payments. until it's paid off. Me? because you can. well well beat that 2 whatever percent. investing versus that 2 point whatever. percent plus depreciation making it 3 to. 4% you're still well beating it in the. market if you're investing in good. things. Mhm. So mathematically it. doesn't make sense. Now if emotionally. speaking you're like okay let's pay it.

off. I wouldn't be upset. It's fine. It's minimizing your risk. That's just. our basic, you know, evol evolutionary. caveman emotions speaking. I personally. like math to speak more than caveman. inside of me cuz we're not smashing. rocks together anymore. I guess that's. kind of I don't want to get in this. position again and then have to worry. about and I won't be in the position but. with an emergency fund, right? Emergency. fund is the key. That's what you did not. have. Mhm. Now, if you go if you get.

laid off again and you go 6 months. before finding a job, you know, that's. where things get a little again, it does. minimize the risk to be very clear. It. does, but your six-month emergency fund. was taking in account your car payments. Mhm. The car payments you're doing now, which is a little larger than your. minimum monthly payment, and it's taking. in account your gas and car insurance. So, it is there. There's a reason why we. put it on the emergency fund, but that's. just what I would do. Again, wouldn't be. terribly upset. What's most important is. cut everything now. Cut everything now.

That is all the stupid spending that. you're doing like 50% of your income on. wants essentially cuz you're. overspending. Yeah. Yeah. And then you have an emergency. fund in 10 months and then you allocate. 20% in your situation until you get more. income. 20% to wants. Categorize it out. in terms of where your wants are. I. spend this much money on food. I spend. this much money on this. blah blah blah. blah blah blah. Then you don't spend.

over those limits. Budgets only work if. you follow them. Just because you have a. budgeting app doesn't mean you're. budgeting it. Congrat congratulations. You're in your 30s. Go open up a. checking account. Stop leaning on your. mom. You're a big girl. Yes. Okay, cool. Yeah. Will you actually do this? Tell me, knowing yourself, be 100% honest. What. will you actually do? So, knowing. myself, I don't think I'd do 2100. Um, I. probably would do 18, I guess, just to I.

know you said you gave me. regard. Uh, my dog has health problems, so I'd rather be prepared. Does he have. pet insurance? He does not. That's worth. it. Put that in your needs. I promise. it's worth it. I don't know if he. qualifies cuz he has already had so many. things happen to him and he's a. Chihuahua, but Okay. Well, maybe not. then. Well, that's her. So that's my. only worry is like if something happens. to him again, I want to have that. available. Well, he's had very You.

realize that doesn't make sense what you. just said. Have available in terms of. what? This is just money we're putting. into a saving account. So it's. available. That's right. So technically. I could use it. So why would it be 1,800. instead of 2,100? No, you're right. I. guess I would just keep it in my. checking. No, put it in your savings. It. doesn't matter. Okay. Sorry. Continue. Um, I. mean 2100 like I guess that kind of. scares me, but it makes more sense than. the way I'm spending now. So, and that's. the biggest thing that I'm worried. about. You don't realize how quickly you.

go through money until like you lose. your job and I cut out literally. everything I possibly could and still. had quite a few expenses that. I had to make sure we were paid. So, I. went through 10 grand. Yeah. Very. quickly. at 3 months obviously. So you. can kind of see it lines up directly. with what you're saying. So 10. months not paying for anything. Someone. else can pay at a restaurant. That's. fantastic. But you're not paying for any.

kind of food outside of groceries. You. can do that for 10 months for the. benefit of the rest of your life to be. clear for decades and decades and. decades and decades. 10 months seems. minimal. Oh yeah, that's much better. Like I was worried that it would take me. I guess longer to build up what the. emergency I could go crazy needed to be. And you should cuz it's scary. Any final. thoughts? So the biggest thing about the 30,000 it. probably is going to be more than that. is that you think I should just invest. all of it at that point. It would make.

more sense mathematically speaking. Okay. Cuz my my thoughts were like pay. off my car and then invest the rest of. it so I can get back some of the loss. that I had in my 401k. Yeah. You do you. I only say what I would personally do. and math wins than bashing rocks. together because I haven't discovered. fire yet. Okay, for Sarah Hammer. financial score that was obviously a big. struggle. Come on. We're leaning on our. parents in our mid30s and you know the.

car debt low interest rate but you know. we're still going into debt and we're. not budgeting all. We're well. overspending on our needs categories and. or well overspending on our wants. categories and we took from the 401k. that's the biggest thing and we're. essentially restarting investing now in. early to mid30s. So hammer financial. score three and a half out of 10 cuz. there's not a lot of terrible debts.

Sometimes people have really bad credit. card debts but that's why three and a. half out of 10. Let's call it a four. Congratulations Sarah. four out of 10. Make sure to check out all the fun. things like the resources below that I. provide and my Instagram and Twitter. Don't forget to subscribe.