41-Year-Old Spends EVERYTHING On Fast Food | Financial Audit

Hi, my name is Breanna. I'm 41 and I'm. here from Seattle today and this is. financial audit. Welcome to Texas, Austin, Texas. Very nice. What do you do. for a living in Seattle? Um, I actually. have two jobs. I My full-time job is a. bookkeeper. at a small private firm and my second. job is working on a podcast, two. podcasts. for um a woman who. has two health and wellness podcasts. Oh, what do you do for that? Um, I write.

her show notes. I do the artwork and. then I do a little bit of audio editing. and then I upload everything. Oh, very. cool. So, the bookkeeper job, what do. you bring in on a yearly basis with. that? Um, right now I'm making 2575 an. hour. So, it's about 53,000. and change after. Okay. How many hours a week? Full-time. Okay, so perfect. And the podcast, what. are you bringing in with that, the. different ones? That is a flat 385 a.

week. Okay, for both put together? Mhm. Very cool. So, that would be. about $1,668. a month on average when averaged out. Okay. Very cool, which. 53,000. is 4,516.

plus that 1,668. So, it looks like before taxes, before. any withholdings and any stuff like. that, $6,000. a month, yeah? That's about right, yeah. Okay, perfect. And then I'm guessing. what, $4,750. hits your account, something like that? Yeah, it's about uh 1633. every 2 weeks. Oh, yeah, I was very close. We you. payroll hit your statement of 4,884. between the different payrolls. So,

okay, very nice. Living in Seattle off. of basically almost $5,000 plus taxes. and everything. How's that? Oh, it's not too bad. Seattle is really. expensive, but um I'm kind of lucky. right now. My rent is still extremely. reasonable. Yeah. Um I've been living in my apartment for. a really long time. Um. and I don't go out too much. Mhm. But. Mhm. Okay. I mean I've I've slowed down. I've. slowed down. Um but yeah, it's not bad with the two.

jobs combined that I feel comfortable. So, what is your financial situation. overall? Um well, I have a lot of debt. It's a lot of stuff that I've racked up. um. from a long time ago and I've been. slowly making progress over it over. time, but just this year is when I. started making like a really decent. income. Oh, so this is a new very new. income. Yeah. I've increased my income about. $6,000 annually this year. So, now I. feel ready to like make good headway and.

really buckle down. Um. I was not very strict before, but I was. trying to do the best I could. So, why. did you get into the debt in the first. place? What did that look like? Um a lot. of irresponsible spending and being. young and um not really thinking about. the impact it would have long-term. Mhm. Uh honestly. And a lot of just. going out and having a good time and not. worrying about it. Give yourself a score. zero out of 10. Where do you stand right. now? Less than a one, definitely.

zero. Zero out of 10. Okay, interesting. Well, let's see how that stacks up. We're. going to start with your debt. We're. going to go into that. Before that, you. should hit the subscribe button. Trying. to get the 500,000 subscribers. Thank. you to everyone who has subscribed so. far. We're so close. We're going to. start with the debts. We're going to lay. out the situation, what it looks like, then we'll hit your checking, then we'll. hit savings, retirement, see what any of. that looks like. This Apple card, I mean. the previous monthly balance was 1,975. If we're trying to get out of the debt, why is the new balance 2,300? Why has.

the balance gone up? You come in here, immediately, take me off a little, because you you just said you got into. debt because of bad spending, stupid. spending, of which. this is a big old thick thing of. spending, spending, spending that's. unnecessary. You're trying to get out of it. The. balance was lower than it is right now. Why? Um well, in that. statement, um.

there was definitely some um income. creep or what do you call it? Lifestyle. creep? Yeah, I got. March was the first. was the first month that I started. making a little bit more money and I. worked. If you extra 100 bucks hit your account. a month and you're like. Yeah. Yeah, I was I But you wanted to. get out of debt. Why wasn't that money. going to the debt? What's the. you know, where what's your mindset. around that? Well, I was paying large. payments to my dad. I just wasn't being. strict about it. I wasn't really.

restricting my shopping. Do you follow a. budget? Let's be real. Do you follow a. budget? Then I was not, but now I do. Yes. What's now? When did now start? Like a. week ago? As soon as I found your channel, actually. So like mid-April. Okay, so we haven't had very long. No. Mhm, well, this this ended. at the end of it April, so let's see. Let's see. I hope it shows my spending slowing. down. Well, I don't remember seeing it.

slow down, but $46.16. a month. A lot of this is zero interest, isn't it? Yeah, I pay that off um. after the statement comes. I pay it off. before any interest is charged. Oh, you. do? Okay, I did not see that reflected. Okay, so okay, so there's no balance on. this card right now? There is a balance, but the previous month's balance has. been paid. Do you always do that with. this card? Yes. Okay. You don't do that with some other cards, but you do that with this card. Okay. Good, cuz that would hurt.

Which I guess makes sense where this is. where all the spending is, but you say. you're trying to get out of debt, yet. we're going Uber, Jimmy John's, what's. T-Mobile Park cuz you go there every 2. seconds of your life. That was. two trips to the ballpark. Ballpark Ballpark Ballpark, Amazon, Pizza Mart, Orca, GoFundMe, you need to. go fund yourself out of debt instead of. giving to that. Shafa monthly. membership, Apple, Imperfect Foods, Apple, Apple, Uber Eats,

Apple, Chipotle, Amazon, Uber, Apple, Uber, go to the ballpark, Apple, go to. the ballpark, ballpark, ballpark, ballpark, Apple, Zillow, Amazon, Uber. Pass, like you need to be giving them. more money. Apple, Metropolitan Cafe, Apple, PayRange, Apple Dude, these. subscriptions and things you're paying. with Apple Pay, it's insane. And Uber. Eats and Imperfect Foods and Apple and. Amazon and Apple, Amazon, Amazon, Klarna, are we financing things? Amazon,

Uber, Apple, Uber, Metropolitan Cafe, Uber, Uber, McDonald's, Amazon, Orca, Fresh Deli and Mart, that could be. groceries, I wasn't 100% sure, but I. don't think so cuz it's $13. It's. groceries for $13? Yeah, yeah, convenience store. Okay. Uber Eats, Imperfect Foods That's. groceries. Amazon, okay. Amazon, Apple, Metropolitan Cafe, Apple, Microsoft, Apple, Adobe Creative Cloud, which. that's for your work though. That is.

Okay, so that's okay now. And then the. PayRange Mobile That's laundry. That's laundry when you go and do. laundry, okay, that's fine. Metropolitan. Cafe, that is not laundry. Apple bill, that is not laundry. Klarna again, we're. financing things and having to pay them. off with a credit card, and then Apple. and then Metro by T-Mobile Cafe, Metro. by T-Mobile Cafe, Amazon, Amazon, Amazon, Amazon, HBO Max, Amazon, and then Apple bill. No, you did not. slow down your spending. You did not. slow down your spending. You went out or.

made multiple purchases a day that were. unnecessary. These are all circles. You. see these circles right here? Unnecessary. And that's one page out of. like four of them. Um So, what's this? You're coming in. here saying you're getting out of debt. You found me mid April and you started. to change things. You didn't get on a. budget since then. Yeah, we saw at least. a couple weeks of that not happening. What is going on? Um well, okay. So, some of those things. are legitimate. Orca is my bus pass. Okay. Imperfect Foods is groceries.

Imperfect. Okay. I said that like three. times out of the hundred things I just. read. true. Um I would say of all the things. you listed, the like the Apple. purchases, like in-app purchases. Mhm. Which are like every second of your. life. Yeah, I do at least one of those a. day, but not It's crazy. That's crazy. Not anymore, but we're seeing it. reflected there. It's only a couple. weeks ago, not anymore. So, even if you. stop for a couple weeks, how are you. possibly saying with confidence that.

it's not anymore? You did it for a. couple weeks cuz you were coming on the. show. Yeah, I mean, it is sort of my guilty. pleasure when I'm at home and I'm. playing the game that I like. Gems, buying gems? What are you doing? What. game? It's um Angry Birds Dream Blast. You're giving hundreds and hundreds of. dollars a month to Angry Birds? Um. I No wonder that app is still alive. somehow. I love that game. I'm obsessed. And you financed two Apple purchases.

Yeah, there's um there's one revolving. purchase on there that was my Apple. Watch. That's 0% APR. Yeah. And then. that Klarna purchase was something that. I needed for my cats that I just. financed with 0% as well. There's Why? What's the point though? Um I think when. I purchased it, I was just low on cash. so I decided to split it up. If you. can't purchase it, you can't purchase. it. I could have but I just didn't.

The only reason 0% finance makes sense. on like those Apple purchases that. you're making, not the Klarna stuff, but. just the Apple purchases, is if let's. say you're going to go purchase a $2,000. computer. Yeah. But instead you do the $2,000 computer. over 12 months 0% finance and then you. take the $2,000 that you had to give to. the computer and you invest that $2,000. sitting in the S&P 500 for an example. That's where it makes sense. Okay. But. where people 0% finance and then spread. it across monthly and then they take the. $2,000 that they had in order to get it, they just go spend it on bull.

and we know that it was just bull. Yeah, that's fair. And speaking of bull. I mean, there were purchases on here. like you went to Manor Souvenirs on this. card that you have a balance and you're. losing interest on. That was an accident. That was. legitimately I handed them the wrong. card. And then the other purchase on there. ongoing, right? It's like Emerald City, so utilities of some kind? Um no, that was emergency pet services. My cat um. had a bladder situation.

the credit card? Cuz I didn't have the. cash. This is why we have emergency funds. This is why instead of that bull. spending that you were doing in there. every second of your life, gems, gems to. Angry Birds, you have money set aside. and you have cash to pay for things and. you don't have a stupid $6,718 credit. card balance. Yeah. You wouldn't have that. Right. You this that would probably be cut in.

half right now if you did not go insane. stupid on that Apple Card. Yeah, I. realized that. um the the emergency pet services was. the wake-up call for the emergency fund. Yeah. Um and that card was actually. twice as much. Um. you'll see on the next credit card. I. split it to do um. 0% APR with a balance transfer. I Yeah, I did see that. Oh, is that this.

card? This card you transferred over? Yeah, it went from this card to the. other card. So, this card no longer exists? No, that's the what's left on there. I. couldn't get enough balance to do the. What was the total balance Oh, it was. like. 14,000? stack up $14,000 in bad credit card. debt? Cuz you were just getting interest. stolen every month. Yeah, that's a good question. I'm not. really sure what I spent that money on. Um. Yeah. Yet yet you know you have it.

Yeah. And you do all that spending. That's the only reason I'm upset at that. spending. You can do that spending if. you're in a good place, but you are. choosing not to have an emergency fund. and have to use your credit card in. order to pay for a vet thing. You are choosing to have this high. credit card balance. that has $93.61 in interest sucks from. you every single month because you want. to have the pool money. Do you get what. I'm saying? Absolutely. Yeah. So, why? Why are you still doing that? Um And you said you cut back for like a. week now, but. I well, this month was a lot better than.

last month. Um. Why I was doing it? Well, I'm trying to. like change all of my habits right now. all at once. Um. Around the end of the last year, I was. going out a lot and then I kind of just. decided that um. it wasn't good for me, you know? And so. um I think. Health-wise probably cuz all that stuff. is unhealthy. And then two, financially. very unhealthy. Yeah, so I think what.

ended up happening instead of spending. all that money on restaurants and bars, I ended up spending it on shopping and. in-app purchases. And I didn't even. realize I was doing it until. much later. The interest you've lost on this card. this year so far is basically $500. I. know. Of which did not have to be there if you. were not doing the spending. Now, we do have 0% finance through Citi. Yes. And um And with that, we have a.

balance of $6,339 at the time of this. statement. Mhm. So, overall credit card is like about. $13,000. We have minimum monthly payments here of. $63. Now, yes, you're saving some. interest cuz it's 0% finance, but you. also had a $215 fee you paid in order to. do this. Yeah. Which is disgusting, but I. Yeah, I calculated the what I would end. up what what I would have paid in. interest on the other card, I calculated. it and um figured out that I would save.

a little bit of money by doing the. balance transfer, so that was the idea. behind that. Yeah, no, overall, probably. But just be This is Okay, I'm. okay with some consolidation 0% and. stuff like that when we're trying to get. out of a high interest situation. But. what a lot of people do is they get into. this situation, and then they think they've made. progress, and then they just don't go. crazy like they should be in order to. get out of the really bad debt. Yeah. Yeah, I think that's exactly what. happened, and I didn't I I.

I really couldn't see it. Um I mean, but. I see it now. What is this? That is my new card. Um I got an Amazon card because I was. um. I. I was buying If you know you. If you know Sorry, continue. Um. because I was buying things on Amazon, I. opened an Amazon card for the.

the the points or whatever, but this. will also be paid. off without accruing interest. You pay. this off every month? Yes. I still don't. like the idea of you having two credit. cards, one at 0% because you had to. transfer from the other card, and the. other one that's accruing terrible. interest, and then opening another. credit card? Yeah. How have you proved to yourself in any. way that you're able to manage this long. term? Because. month, maybe okay. Well, okay, so my my.

spending has been completely out of. control. I own that. Um but with my. Apple Card, I've had it for almost a. year now, and I've not paid a single. dime of interest. Good. on that. You spent on some travel, 555, more. travel, 361, Whole Foods, 68. Sorry. 40. I don't even know how to comment on. that. And Amazon 44, and Amazon 37. Yeah, it's gross. You don't need to be. doing those Amazon purchases. We don't.

need to be going to Whole Foods of all. places. I usually don't. It's the. closest grocery store to where I live, so if I need like one or two things, I'll pop in there, and I just try not. Very expensive way to do things. to buy the marked up stuff. Um. but yeah. And then the Amazon stuff on. that card is like basic home goods. stuff. Oh, I had to buy a pair of shoes. because of fitness for fitness. I'm doing a lot more walking now, and I. needed something that worked better for.

me. Now, we have some checking accounts. Yes, that's my main checking account. First of all, I'm confused. The savings. started at 100 bucks, and you put in. $200, and we took it all out, and now. it's zero. Yeah, I See, I Every time I. try to put money in savings, I'm like, "No, wait. I should spend that on paying. my debt down." And then. good to have at least a 1-month. emergency fund. Yeah. Um so, I always go. back and forth about what I should do. Do I save money for the emergency fund,

or should I pay down the debt, or should. I. pay my student loans, or what? Um. I did not get a statement for student. loans. I sent it in a separate email, I. thought. How much your student loans? Um it's 18,000. All federal? I don't. know. I don't think so. I don't know. They're really old. Who'd you get it through? Originally,

I don't remember. In a separate email? I thought so. Uh it should be American Education. Services is the lender right now. Are you paying it off right now? Yeah. It's not deferred? No. It been deferred. for a very long time when I was younger. But I can show it on to on my phone. Federal Family Education Loan Programs. Which I know there's confusion around. those with the forgiveness.

Didn't the FFELPs like get taken out of. those? Um yeah, when the uh for the. whenever the federal. whenever the government said that uh. they would pause student loans, I opted. not to pause. You opted not to? So, they're federal. Well, I don't I don't honestly don't. know if I had the option. What? It's on here? Yeah. I have one subsidized, one unsubsidized. So, there's.

260 Okay, subsidized and unsubsidized. Okay, so these are federal. They are federal. Uh $2.62. Why don't you pause it? At least you. wouldn't be getting interest. You're. getting interest added of $2.62 a day. Why don't you just pause it? It doesn't. make any sense. Um because those loans. are very, very old and I want to pay. them off. You could pay them off while. it's paused. It What? Oh, I didn't I. don't realize. Five, just over 5%. interest, so. Okay. What's the minimum monthly payment on.

these things? Um 304. All right, so add that to the debts, okay. Vehicles? No. What is your car? I don't drive. Oh, city Okay. Yeah, so it's like a good walkable city? Yeah. Jealous. Okay. Yeah, it's not walkable here. It's too. hot. Well, it's also just not walkable. It's. very car-centric, but either way. no other debts. Um. No. Okay. Scared me for a second.

Okay, so in here we can have outgoing. bills like. Verizon and then paying off debts and. transferring to Robinhood and. paying off credit cards and well, paying. two credit cards, I should say. And. sending things around. Zelle in. Zelle in at 225. Yeah. What? That was. Don't Oh my god, you're going to yell at. me. Um that was for like a psychic reading.

Why? was interesting. Sure, $225 interesting. when we're losing $500 so far this year. in interest? Yeah. It was just I couldn't I really wanted. to do it cuz it was Cool, congratulations. What? Yeah. Are you going to put your wants. over everything forever? Um no. Not anymore. Mind you. whatever. Doesn't matter. And then there's Puget.

Sound and. that you paid $22 for and then you. PayPal'd out $9.85 as well. Yeah, the um that account just gets a. few bills and uh credit card payments. and then I do all of my spending through. Apple Card. And Stash. Cuz you have like. a checking account in Stash of which has. a $0 balance. What do we do? We had. Netflix and we had Amazon and we had. Amazon and we had Amazon and we had. Amazon and we had Amazon and we had. Amazon and we had Amazon and we had. Amazon. What the.

Those are Those are household things, like subscription things, cat food, cat. litter. Um they better be better than. what you can get in the grocery store. I. can't see. I don't know. Uh who knows? They are. They are. Financially better? Yeah, yeah. It's better price. I The cat. food that I was buying you I couldn't. even get in there. So Stash really you. just have two accounts with basically. $1,200 in them. Yeah, each one has about. $1,200. put them in like kind of like US large. stock Um it's a bunch of random stocks.

It is, but it's just Yeah, it looks like. you did like a large cap. Okay. Other than that, there's really nothing. else. There's like a billion pages of. this cuz it just shows every individual. stock that you have like a cent in. Yeah, for a while I was using the Stash. checking account and they would give you. like stock back on certain purchases. They'll just match it to your purchase. Then you have $200 in Robinhood, which I. don't really get the point of this. anyway. Yeah, there I was just some. woman's health thing and treasury bonds. and QQQ. Okay, that's okay.

And then Vanguard US. Okay. But I don't. understand the first two. I unders- I. actually cashed that out and just spent. it on credit card bill. Good. Good. Which is what I would have told you to. do anyway. That's a retirement. You have. nothing else? No, nothing else. Except. for um my job just started to offer a. 401k, so I've made one contribution. So you have $3,000. in retire- Your net worth is negative. Yes. You have You have a neg-.

In your early 40s, that scares me. I know, it terrifies me. You lost the two best decades of your. life for income. and investment compound growth. Yeah. From here. been scaring me for a very long time. If. it's been scare. Again, I need to I need I need to. understand your mindset. If it's been. scaring you for a very long time, yet we. saw all that bull. at the first statement we looked at. I. don't care if you're scared because you.

don't react to it. You don't possibly. change things. Yeah. How are we going to. do anything here going forward if that. is what it's look like? I've been scared. for a long time and then I just spent. all my money. Yeah, to be completely honest, it's. it's like so scary that. I've the only way to deal with it is to. push it out of my mind and then Well, what does that accomplish? What in any. world does that accomplish? Do you see. thick seek therapy? Um no, not right now, but um I am doing.

some like self-help stuff. All right, therapy. Yeah. Therapy, do therapy. It's better. We basically have. $32,000 of debt. Yeah. Okay, so let's. put together a plan, but again with the. what you've done. historically when you've realized things. are bad. if we put together a plan, is this even. going to help? I'm honestly very. skeptical. No, I am so tired of paying.

these same credit cards and student. loans. I'm so tired of it. Um. I if I had $32,000 in cash right now, I'd pay it immediately. What's your. rent? Uh it is 1225. at the moment. In a few months, it'll be. going up to. 1300. Okay, that's what we'll put it at. Okay. 1300 utilities and internet? Um. So gas, electric, and internet, trash.

And gas. is 20, internet 60, um. water and trash is included. Electric on average? Um uh. End of the month week? 90 $90 a month. It's every other month and it's about. 180 every other month. Okay. $170. utilities, your phone, your Verizon. thing I think I saw 120. Yeah.

Car insu- you don't need car insurance. Health insurance that comes out through. work? Yes. Before? Yes. Cool. Giving you an. additional $200 for therapy. You're. going to start doing that immediately. Okay. And then I have. Once every other week is fine. Mhm. Um my bus pass is 100. Okay. Anything else you can think of? Um.

Giving you groceries to 300. Yeah. Let me Oh, I need pet pet supplies is. really expensive right now because of. Giving you 100. I can't do 100. I have. Why? at least 200. Why? Because my cat. is on special food and I have to feed. them all it because they won't feed. separately. Put them in a room. Will they eat? No. grazers? Yeah. Big time.

And then fine, I'm cutting your. groceries to 250. It's a sacrifice. you're making. I can do that. I'm cutting your household items to 75. Okay. it going. Like toothpaste and toilet. paper and. Yeah. hand soap and shampoo, all that. stuff. We're not going crazy. Not going crazy. on makeups, haircuts, anything like. that. Not till we go out of debt. Any. other ongoing expenses you can think of. in your life? Um let me check my. spreadsheet.

Just so we don't miss anything. And by the way, no $731 for going out to. eat and stuff. What you did in that statement that we. saw? Yeah. No, that is not a part of it. Yes, it is. Oh god. Um. Nope, that should be everything. Yeah, that's it. We saw $176 for subscriptions. You're. canceling all of them. Netflix, Netflix,

HBO, other subscriptions, they're gone. I can't have Netflix? No, you cannot. have Netflix. All right. If you have time to watch Netflix, you. have time to work. And get out of this. debt. Congratulations. If you have time to. watch Netflix, you have more time to. work. Okay. Do you not understand how bad credit. card debt is and how it's holding you. behind? Do you not understand how bad it. is to have a negative net worth? Yeah. At. at 41? Do you understand how how bad it. is that you have $3,000 saved for.

retirement at 41? Yeah. I have a contingency plan for. retirement. What? It's my best friend. She has a pension and VA disability and. she said I could we could get married. Okay, in the real world, no. Emerald. City? What's that again? Um that was the that. was my pet emergency services. right, right. Okay. Okay.

So let's see what your budget adds up. to. Okay, let's go through it again. $1,300. for rent, $170 for utilities and rent. $120 for phone, $200 for therapy, $100. for bus pass, $250 for groceries, $200. for pets, $75 for toilet paper and other. supplies. This brings your minimum. required to We got to do debt. Plus 408. for debt, of course. Add that in there.

2,000. $823. is what you need to survive. You bring. in $6,000. The fact that you have debt. is inexcusable at this point. The fact. that you haven't been making more. progress on this debt is inexcusable and. actively upsetting for me. The fact that. I saw all that spending and you've. barely put anything towards debt is. disgusting. That can no longer be a thing. No longer. be a thing. You have at least 3,000. extra dollars. Your needs category is.

under 50% of your income. Yeah. That's rarely seen here. You're in a. position where there's no excuse for. this to exist. Well, I mean, that is. new. It is new, but you should have been. making more progress than we've seen. Yeah. I definitely dropped the ball. I've been. dropping the ball There's no excuse to. not see the progress we've seen. So, we're going to say you have $3,000. extra. Give you a wiggle room with like. 150 bucks there. $3,000 is what you have.

extra on a monthly basis. Woo woo woo. Let's go. $3,000. What do we do? Well, next month, you set that $3,000. aside in a high-yield savings account. Don't even let it be in that uh account. that's connected to the same bank as. your checking cuz I don't want you to. see it. All right. That's set aside. That's what you need. to survive just in case you lose your. job for a month. Well, you go find. something else to do. You just scrape. scrap everything. Then $3,000 and you're. of course making minimum monthly. payments on debt. So, this has happened. That's cooked into the budget. $3,000.

goes the next month, month number two, to the Verity Verity Verity? Yeah, Verity. Whatever. Uh payment thing. $3,000. boom. Month. number three, $3,000 goes to it boom. Month number four, uh, about $1,000 goes. to it and it's paid off. No more. interest is accruing. It's incredible. Now, cuz that City will be interest free. for a while and student loans are at 5%, what we're going to do is $3,000. What.

are we in month number four at this. time? One, two, three, four. Yeah, month. number four, almost $3,000 or $2,000. goes to City. Uh, next month, month number five, $3,000 goes to City. And then $1,500 goes to it in month. number six. City's paid off. Okay. Now, this is what I'm going to do. because you're in a bad situation. retirement-wise and the student loans. are 5%. We're minimum monthly paying the. student loans until they're gone. And.

everything else that you would put. towards them, we're investing cuz we. need to start catching up. Okay. And the average market at 8% or. average S&P 500 of 10% and I'm not going. to give you investment advice or even. say what I'm invested in for legal. reasons. That beats 5% any and every day. And. those percentages aren't like, okay, you're going to make this this year. No, that's what it takes all the down years. and up years combined. So, if you're. dollar cost averaging as in investing on. a consistent basis, you should. no promises, blah, blah, blah, blah,

blah. That's what the stock market. averages 8%. So, Yeah, if the economy. doesn't collapse. No, again, that, trust me, that 8% takes. into account many economic collapses. It. took in uh, economic collapse of after. the war in tornings, it took the. economic collapse of the housing crisis. And yet, on average, we have seen an 8%. gain in the overall stock market. Okay. There. For the S&P 500, we saw the housing. crisis. Mhm. So, and we still see 10 10.something percent.

with dividends reinvested. So, pay off. both the credit cards and then start. investing. I have a couple of things. that I would like to do within the next. one to two years. Okay, what? Um well, the first thing is that I'd like to get. out of my apartment and get into a. different one. I would like to move. Um. I've lived in my apartment for 12 years. It's. a not a good place to live for me. anymore. Why? Um it's kind of a sh- I don't want. to say it's a but. um the neighborhood is.

going south and it's just. um Well, here's the thing. I can have. you if you follow if the utilities stay. relatively similar, the phone stays. similar, the therapy stays similar, bus. pass stays similar, groceries stay. similar, pets stay similar, toilet paper. stays similar, uh and once we get rid of. the. debt, well, we're going to have an extra $100. cuz the student loans are still going to. be there. I can have you put an extra.

$300 towards rent and you'll be fine. $300? then? Mhm. You can go to 1,600. I'd be. okay with that unless you increase your. income. But, again, needs stay at 50% or. less. Sure. Uh the apartment that I'm. looking at is 1,900, but. that yet. Well, I know. I know that. Um. Can't even do that when the two credit. cards are gone. Unless my income increases. Unless your income increases, which it. should. Yeah. over, you know, a year, 2 years, you know, you should get those annual. increases, life cost of living at least.

Yeah, I'm I'm actually have. But, the rent will also go up by that. time. have a few projects on deck for the. podcast that are going to bring in some. extra money as well. Good. So, as long as all your needs together. are budgeted at 50% or less of your take. home, rent is included in that needs category, that's fine. That's fine. Do not cut. things like therapy in order to do that. I will not accept that. Neither should you. Either way, okay. So, at the end of 6. months, we have $3,000 saved up on the. side. We have the two credit cards paid.

off. At that point, then $3,000 with the. $3,000. we're saving up to $18,000. You already. have $3,000 saved up. So, divide that by. a $3,000. that'll be another 5 months. So, a year. from now, we're going to say, you'll. have two credit cards paid off, a fully. funded emergency fund, which I'm. guessing is something you've never had. in your life. Correct. Which it's going to be. incredible. You're going to see. for. a long time. Well, you're going to see.

that when these emergencies pop up, you. don't open credit cards to do them. You. don't use credit cards to do them. Mhm. You take it from the emergency. fund, then you put it back in there as. soon as you can. Okay. It's awesome. It's like the greatest thing ever. Emergencies are not scary anymore. Right. Uh it would be nice to have that. in case my cats decide to explode again. Um and also I I'm At some point in the. future, I'm going to need to buy a new. laptop. The one I have now is very old, and it's starting to become obsolete. I.

can't even update the programs I'm using. right now. Okay. So, again, here's what we're. doing. In a year from now, a year from. now, we have the fully funded emergency. fund, and you need your laptop for work, correct? Yeah. Um. if during that time the laptop breaks, only if it strictly breaks, we can pull. from the emergency fund to take care of. it cuz that is important for your. livelihood. We can do that at that time. Because, again, every single cent of our. money that is not in our needs category, which is a strict down needs, is going.

to pay off the two credit cards and then. saving up the fully funded emergency. fund. Okay. So, we can pull from what we. have for the emergency fund there to get. that only if it breaks. Right. It's. break It's currently breaking, but I'm. being very gentle with it. gentle. Think of a repair shop as well. as a possible option. We don't want to. do that forever, but we can pull that. right now. $3,000 set aside is most. important, and then paying off the two. credit cards is most important. Okay. And then the money that we're. saving up for the emergency fund at that. point, so within at least, you know, starting in 6 months, you know, you're.

saving up for the fully funded emergency. fund. And then we can take some from. that if it breaks fully to get a new. laptop. If it doesn't, and we do like a minor. repair or something like that, in a. year, what we can do from now is again, 50% of your income, $3,000 goes to your. needs. Mhm. Then, because you have to. play rapid catch-up, rapid catch-up, we are putting a minimum. 35% of your post-tax, third $2,100 a.

month to retirement. I'm good with that. A month. Now, you're also going to be uh. contributing up to the max. uh up to the match of your 401k. There's. currently no match, but that is in the. pipeline. Okay, then you're maxing out your Roth. IRA at $6,500 a year or whatever it goes. up to on a yearly basis. Then everything. else, in order to get us to a minimum. $2,100 a month, is going in to. your 401k. Okay. I have some questions about that as.

well. Um my the 401k program just started. There is a Roth 401k option as well. Do. that one. Should I do both? No. So, there's really no reason for. cuz Washington state doesn't have a. state income tax anyway. I don't see any. reasons for you to try to. minimize your taxable income in. retirement form when the growth that. you're going to receive on the other end. of a Roth IRA would be much better to. get tax-free.

So, max out the Roth IRA $6,500 a year, and. then put as much in your 401k as you can. in order to get this. But I am still. going to give you 15%. 15% or more if you cut down your needs, cuz most important comes investing. Yeah. Then you can cut down your needs, but max out at 50%, but if you cut it. down, 15%. will go in this 50 35 15 rule to fun. Okay. So you can have fun again where.

it's exciting. Now a part of that can be. getting a laptop. Cool. in a year. Yeah. So you can put. 15% aside for a couple months, get a. laptop. Mhm. But 15% goes to needs, cut 5% from your. or 15% goes to wants, cut 5% from your. needs somehow. and I don't know how I'd do that. It's. pretty bare bones right now. Again, increase in income. That's true. Then you can have 20% go to fun.

Okay. Does that make sense? Does that. you understand how that's laid out? Yeah. So let's see. We had 4,000. or sorry. 6,000. 35. Okay, so 2,100. In a year from now. when you're 41. going to retirement. Now I want to lay. out what this looks like. We're going to. use the average stock market return of. 8% and we are doing. $2,100 a month starting with 3,000. So.

that's all that's going to be in there. For you're going to go to 65, let's say. Mhm. And I'm willing to 23 years work longer. if it I'd rather you not but I would. this is just for an example if you go to. 65. Okay. And social security, who even. knows? Can't rely on that. $2,100 8% starting with 3,000 23 years. gets you to 65. $1.675 million. Wow. Oh, that sounds. fantastic. Sounds very nice but after. you account for inflation it'll be uh.

one about $1.1 million in today's money. Okay. That's doable. Now what you can do with. that is. go crazy on the shopping, right? Cuz I'm. old and I'm the end is near. What you can do is stretch that over to. like give yourself like a hundred, so. it's a million bucks divided by that. many years. You can live off of that, and so it's drained by a hundred. Mhm. Or, what you can do, and this is if you. want to pass money on, is you can. withdraw 4% from it a year.

and live off of that money, cuz it'll at. least maintain. And that would be about $40,000 a year. Yeah. In today's money. Yeah. So, does that make sense? Yeah, absolutely. And that's where we want to. get you to at a minimum. Now, of course, as income increases, the dollar amount. that you're investing increases, which. helps that snowball all the way up. Yeah, so keep it at 35% then. I wouldn't. go less than 35% for where you're at in. your life, cuz we need to start doing. emergency mode. Because this is why it's.

important to start investing when you're. younger. When you get to the point where. 41's not old by any means, but when you. get to the point where you're in your. 40s and you've lost those two best. earning years of compound growth or. earning decades, you have to play catch-up. Yeah. When. you start at at mid-20s for investing, you can do 20 20 20% maybe even 15%, but. I mean, I'd rather 20, but you have to. do minimum 35%. Yeah. Honestly, this the first time in. my life where I even thought saving for.

a retirement would be possible. Here. Yes, here's the exciting thing. We've. done the negatives. Six months, you're out of the stupid. credit card debt. Yeah. A year, you have. a fully funded emergency fund. You only. have some student loans that are at a. relatively low interest, and we're. starting to save for retirement. Okay. 65, you're able to retire. That's something. you've never thought was possible. You. never thought an emergency fund was. possible. You probably never even. thought getting out of debt was. possible. No, it's not that's how people. lived. Yes, oh, it is how people live,

but it's not how you're going to live. anymore. But, that only works if the. bull we saw does not exist anymore. You. follow the tight budget, and then you. live off of that 50% on needs, 35% on. investing, 15% on fun after you have the. fully funded emergency fund. This only. works if you follow those principles, those rules, or else you are. I will. I mean, the thought process now. is that um. I might not have fun for the next year.

until my emergency fund is funded, but. I've had two decades of fun spending to. Those memories will just keep me warm as. I'm hanging out in my house by myself. And again, you can have You can have. free fun. Not all fun costs money. free in Seattle. Well, I mean, you could just like walk. the market. No, I I mean, you just walk it and just. enjoy. the city and just like I love going to. parks and stuff like that. That's my. free fun. I take my dog on walks and.

stuff. And then get some people to take you on. dates. Get some people to take you on dates. I. think I'd rather stay home. Okay, well, that's fine. But that's a good way to go. out to eat without paying for it. Yeah. Get people to take you on dates. Yeah. Okay, so that's the plan. I hope you. follow it. We'll do a checkup, but any. final thoughts? Um just. Just that if anyone out there is. watching this and they.

are kicking the can down the road like I. did, um this where you end up being, negative. $30,000 net worth at 41. So, don't do that. It's not worth it. She definitely has a way to get out of. this. It's just buckling down for only a. year. What's a year for the rest of your. life? I mean, we'll see. We will do a follow-up. episode in a year. We already talked. about it, so she better do it. For now, her hammer financial score. She was pretty spot-on. Spending Within. the statements that we saw, she That.

should all be going to debt. She was. overspending, going crazy every single. day on gems and crap. Zero out of 10. Debt, it's not the craziest debt by far. Three out of 10, still not good, but. three out of 10. Retirement, way behind. for her age and just getting started. One out of 10. Emergency fund, there's. nothing, zero out of 10. Real estate, not even in the conversation, not yet. Could be in like 5 years. Zero out of 10. for now though. That aggregates down to. a point five out of 10. If you want a. free $5, sign up for acorns using the. link in the description below. If you.

use my link that gives you a free $5 and. gives me a free $5 and we all win. And. don't forget to follow my Instagram and. Twitter. Thanks.