8 MAXED OUT Credit Cards | Financial Audit

I'm Johnny. I'm from Gerald Texas, 27. years old, and this is Financial Audit. 27 years old. Yeah. Okay. Normally, I just break into. this like we normally do normally do, but I want to say. I want to especially thank you for. coming on here cuz I think this is going. to be potentially one of if not the. craziest situations we've ever seen. Okay. Uh so, I I just want to let you. know I appreciate you coming on here cuz. this situation a lot of Americans can. probably relate to it. And so, for those.

who are watching, you are actively. helping them by you being here. Awesome. So, thank you for that. What do you do for a living? I uh I work. in uh natural gas. Natural gas, okay. Like what what what do you do? So, we fix like gas leaks and uh replace. gas services and stuff like that. And. you are married? Yes. What is the annual household income? About 120k. Okay. It's always the people with a good. income, isn't it? Yeah.

Interesting. More money, more problems. Yeah, more. money apparently more. not having any money. Yeah. Um. Jeez, so uh what hits your guys's. account on a monthly basis? Um we have the car payment. No, no, no. I mean like what money comes in? Oh, so. we have just mine and her income. I I'm. trying to figure out what's their. post-tax and all that stuff. What does. what does it come out to? So, I'm. guessing it's. a month, I think it's about 7,000. Okay, that makes sense.

And like health insurance is taken out. before? Are you guys contributing to. your 401k's? Um no, she just got offered. 401k today, actually. So, Okay, and you are not? No. I don't have any benefits. think it's about a seven I'm I'm. guessing like 7,500. Do you think it's. 7,000? Yeah, yeah. Closer to 7,000. Closer to 7,000. We'll do 7,000 then cuz. you would know. So, $7,000 hits your. account on a monthly basis. Cool. Most. people would say, "Cool, that's great, especially living in a rural town. Cool, $7,000. We can do a lot.". Yeah.

Oh, and by the way, just a reminder, click that subscribe button. We're. trying to get to 500,000 subscribers, and we're I mean, pretty close. Thank. you to everyone who has subscribed so. far. Okay. I mean, we're we're just starting with. the first account, right? Yep. And I am going to dig into you because I. need to make sure you and everyone else. out there knows how absolutely dire your. situation is. Because if we go to a. place where like, "Okay, we know it's. good, but it's not bad, either.". Right, right. It's like, then you're not going to do. what's necessary to actually get out of.

it. But here, we start with negative. $222 in your checking account. We start. with that? And not only that, $8,449 comes in. That's great. Some of it was from. savings and different stuff. That's a. great amount of money. THAT'S FANTASTIC. WE ENDED with $433. What is happening? Off the bat, what is. up with your financial situation? What's. going on? Give us anything. I think it's mostly just eating out is.

where most of our most of our money. goes. You're not eating out $8,000 a month. Between We were paying for two apart for. two rents for about 3 months. We moved. out of one apartment into our house. because we were in a studio. So, we were. paying about $1,200 a month on the. studio, and then moved into the house, and that's about 1750 a month. During the time of these statements? Yes. Okay. Yeah. And we just actually we just paid. the last um bill on the apartment. the house or are you renting it? Renting. Okay. So, you're saying you eat out.

$5,000 a month? Yeah. Among other things. You must be going. crazy. Are you going to like the nicest. steak houses twice a day? No, we're I think we both. Yes, one child, 6 months. Okay. Well, that adds money. That adds. money. I wouldn't say $5,000 of eating. out. But no, it's not just that. And by. the way, $204 was yanked from your existence in. fees because you're overdrafting and. crap. Yeah.

Dude, it makes no sense. Okay. For I. mean, I have to ask. I have to ask cuz. we need to get into your mindset. If we. have Adobe, we have a Peacock. subscription, uh some security service. that you did, McDonald's, the uh $200. was taken out for auto save safety, and. we're going to Hobby Lobby and. Waterburger and Starbucks and some. tortilla place and Olive Garden and. Dutch Bros and Wendy's and going to. McDonald's and Major Burger and Netflix.

and DoorDash things. We don't even have. money on DoorDash things. And Wingstop. and Dutch Bros and Razzoo's Cajun Cafe, Amazon Prime, uh. Raising Cane's, Dutch Bros, a Hulu. subscription, LongHorn Steak, Waterburger, Dutch Bros, two car car. payments car payments car payments, security service fees again twice in 1. month. I don't even know what that is. Getting our car washed cuz that's a. necessary expense to survive. Dutch. Bros, Panda Express, Waterburger, Firehouse Subs, Domino's Domino's,

Credit One, uh the auto security safety. bull again, some you know, going out to. eat going out to eat pizza, going out to eat going out to eat, dude. And then Prime Video, we have that. We. have we're Venmoing out money, $575. Who. knows where the that one. Discovery. Plus, more Adobe because the one Adobe. we had wasn't enough. The 575 is actually rent. So, we break it up into THREE PAYMENTS. OH. OH.

YEAH. SORRY. WAIT, I WAS LIKE, "575, GREAT.". YEAH, you were going off, so I didn't. want to interrupt you, but yeah, the 575. is rent. Um the $200 auto save, that's. just something it pulls from our. checking into our Chase savings. Yeah, when you know, like over Oh. no. Yeah, so just Well, that explains. all the money that came that you were. depositing from your savings at the year. cuz we don't have money. Yeah. And HBO Max subscription so we have and. Waterburger and Venmo and Dutch Bros and. Spotify and Mojo Coffee, YouTube. something. Looks like you rented a.

video, perhaps. Yeah. Mexican Grill, oh, McDonald's, Subway, Dutch Bros, uh some animation thing, I think. I I. don't know. I can't read it very well. Um oh, sorry, that was the security. thing. Uh And then the the $50 The $50 every. week is my old truck. Yeah. I I totaled it and didn't have. insurance and. We'll get there. Yeah. Let's Let's just get through the. checking account first. Yeah. I get a car wash. We need two car washes. in a month to survive, apparently. forms.

swift.com, Olive Garden, Starbucks, Dutch Bros, Chick-fil-A, Taco Casa, Starbucks, purchasing things on Steam, overdraft fee overdraft fee overdraft. fee overdraft fee. What are we doing? Buddy, if you know we are overdrafting, if all this crap is going wrong, I need. to know any potential logic behind your. couple's relationship, this marriage. Why are you guys going to. these restaurants? This this isn't where.

you spend all your money. This is a. thick stack, but that's the checking. account, and every page is just green. slices of crap. Why? Why are you doing. it if you objectively You have to know. it's bad cuz you are negative every. single month. Tell me. Uh I I. There's no excuse. I mean, we don't have. an excuse. It's just. No, no, no. It's not about excuse. I. need to know why. Where's your mindset. at so we can overcome this? Honestly, I. don't know. Do you guys not give a. No, cuz we always We always come to like. the end of our, you know, whenever we go. negative or whatever, and we're like,

"We have to stop. We have to get better. We have to We have to save money." And. then we get paid again, and then it's. just the same thing over and over. Why doesn't it? I couldn't tell you. Is it both of you? Is it one of you more. it's both of us. Okay. both of us. Yeah. Total overdraft fees year-to-date, and we're not we're a quarter of the way. through this year, $748. Yeah.

That's insane. That's insane. Just this period, $204. The savings that you transferred to. Is. there anything in there right now? Yes. How much? Um last time I checked, about. 4,500. Why? Why are you overdrafting if. you have $4,500 in a savings? Um cuz she. doesn't want to spend the savings money. That doesn't make sense. You've lost. $750. this year. Yeah. Wife, if you are. watching this, please understand it.

makes no mathematical sense. $750 bucks. you've lost because you're not willing. to transfer 4,500? I'm angry at you. I'm angry at the debt. No, I know. But I want. because immediately, you don't have. retirement. No. How old is she? Uh we're. same age, 27. How old is your kid? 6. months. Okay. Congratulations. Yeah, thank you. 27. Yeah. No retirement. Stacked in. debt. Stacked in debt. Riddled in debt.

And no retirement. We. Congratu- Everything else in here is. literally just cards and crap. Credit. cards and debts. Yes. Nothing that's ever paid off, by the. way. No. And then we do get it paid off, and then. we just go and spend them again. Okay. Well, first off, before we even. get into them, let's just say you are. not credit card people. You are not. No. That's fine. That's fine. It's okay. not to be a credit card person. Chop.

them up. It doesn't matter. Whatever. benefits someone might get from a credit. card, you are not getting. You are. losing so much money. So much money, yeah? Yeah. So, this situation. is scary. You need to chop those things. up. Use like the Fizz card that I talk. about because it it it it can help your. credit kind of like a credit card, but. it's a debit card, and it helps spend. within certain categories that you want. It helps you manage your spending a. little better. But for example, on this.

just this card itself, 625 premium. previous balance. We made a a payment of. 160. Okay, cool. We're I mean, we're. bringing in $7,000 a month. It should be. more than that. But okay, we did that. Then we. purchased $130. $130 was purchased. Yeah. If we know Are. you guys trying to get out of debt? Is. that. Is has it. We we always try Well, like we had them. all paid off for a few months, and then. um whenever my son was born, she was off.

for like 3 weeks, and then I was off for. a week, and I wasn't making that much. money to begin with at the time. And she's paid hourly. She's not like. salary. She Yeah. Yeah, we're both paid hourly. Yeah. She they She was getting maternity. leave. Like but she was like only. getting 75%. of her pay. on. Yeah. So they only lost 25%. Yeah, but I. wasn't again, I was only making at the. time I was doing pest control, and I was. only doing like less than 20 hours a. week. So. Why are Why are we possibly putting.

money on a card that we we don't We're. not even Okay, not only that Not only. that, but we after your payment and. after your purchases. plus fees and interest. You have a $620. balance on a card that has a cap of. $600. Cap of $600. Yep. So. Do we just not care? I need I need to. know something or I just. No, I mean, we definitely care. I just I. don't I don't know I don't know what it.

is. We just We have the money, and then. we spend it. Like we just. It's there, and then it's gone. Um whether it be gas or eating out or. going shopping or whatever. Now, these cards that you have are. cards. Right. Right? Yeah, cuz we both have terrible credit. So they were the only ones that we could. get approved for. And what are we doing. on here? We're Dutch Bros-ing, and we're. McDonald's-ing, and Chick-fil-A-ing, and. McDonald's-ing, and Chick-fil-A-ing, and. tacos, and Dutch Bros, and Willie G's,

and uh Really Grill, and ice. I'm not happy about that. That is where. I'm a little upset at you. That's. stupid. Yeah. That is stupid. If we're. over our credit card balance, we're not. making any progress and we're spending. on it? Yeah. That's objectively stupid. And guess. what? Total fees charged in 2023 because. you're overspending, these have like. monthly fees just to be a member of the. card. So not even if you have balances, these terrible cards have fees on a. monthly basis.

uh with no benefits. So total fees, again, we're only a quarter in of 2023, $78 on one card, one card lost in total. interest of 70 bucks. Lost. And then we we're still we're with the. same company here, but we have a new We. have a new a new a different card. Previous balance $789. on a $800 credit limit. Paying $94. Okay, we're making progress.

But then we put on it $86.34. with interest charge of $25.65, and congratulations, fees again of $12. Meaning that not only one card now, two. cards, two out of your like a billion. cards, we are over the credit limit. Yeah. Over the credit limit, yeah? Yep. So again, the mentality, whatever it was. like it's just it's applying to this. It's like we don't have money, but we.

kind of do. Yeah. I I What? Pretty much. all of them. And with this. It was like we went to Walmart and. Starmart. So I mean, like it's either. gas or groceries, but like we we do that. from our checking account when we're not. credit card people. Right. We're going to talk about all. those methods in the end, but this is. the painful part where we go through the. pain. Yeah, it already hurts. We'll get through the good part. Yeah. It should and you need to know how. much it hurts. And people who are going. down the road like you need to know how. much it hurts.

Right. So that we can just improve. people's lives. But. again, fees charged in 2023 so far, $61. Interest charged, $71. And again, that's two cards out of like. the billion you have. Right. Okay. Credit One now. Oh my uh. Oh, that's a No, it is. Credit limit. $300, but your previous balance was 557. No No, you didn't pay on.

You didn't spend money with this card. cuz there was there was there was There. was no money to spend. Your balance is. completely gone. You made a $30 payment, so that's like a minimum monthly. payment. Oh. With $8.25 of fees, $12.83 of interest, new balance. 548. So really no progress is made. Yep. Total fees for 2023, $24. Total. interest, $40.

Let's go to another card, shall we? Yep. Credit limit $600. You're under it this. time at 583. But that gave you an excuse. to spend money, which makes no sense. That is not an excuse to spend money. just cuz we have we have 18 bucks on. there that we can spend. $30 of payment. We spent $37. No fees for this one, but interest of. $14.26. And now we're over the credit. limit by $3.90.

So total balance now, $603. with total interest charged 2023, $41. And you went to Starmart, probably gas, right? I assume. Not credit card people. Not credit card. people. Say that in your sleep. Not. credit card people. Cuz you are not. Now with a Visa cuz we. just opened every credit card that we. can possibly apply for, right? That we. can possibly get approved for. Swipe. swipe swipe swipe swipe swipe Apply. apply apply Apply swipe swipe swipe. Yeah. Yeah. Okay.

$269 previous balance. Payments of 82. bucks. But congratulations for making. purchases of $132. Fees charged of 54. $0.25. $54. within the last month and $8.83. of interest charged. Now our balance is. $383 with a total credit limit of three. $300.

And Fabletics, do we need to be going to. Fabletics? Fabletics, do we need to be. going to Fabletics again in $29 of. additional. card fee, monthly servicing fee of 625, annual fee of $48. My goodness. I should go into the credit card the. predatory credit card business cuz these. people just make money off of you. It's. insane. And then interest on purchases $8.83. Total fees charged uh 2023, 98 $96.

Total interest charged in the year so. far, $26. We have another card. We're getting through the pile slowly. Previous balance 521 on a credit limit. of $500. Made a $25. You made a You made a $25 payment, so. you had $4 on there, which gave you an. excuse to go purchase. You purchased $76 of stuff, giving you. interest of $14.70 with a balance of.

5,008 or 587 dollars on a credit limit. of $500. I'm disgusted right now. I mean, that was like Optimum, so like. some health. That's our uh internet. Oh, okay. Yeah, yeah, yeah, yeah, yeah. And. again, interest 1470. Total interest. charged year-to-date $26.46 with a 30%. interest. We're back to Credit One. We just can't leave them. We love them. too much. Credit limit $300. Previous.

balance 323. Uh $30 payment. You didn't purchase anything on here. Probably cuz you didn't have any money. Yes. That's exactly it cuz there's a new. balance of $309 cuz fees were charged. 825, interest charged for 748. Uh total annual fees three 33, total. interest charged 29. Last but not least, Credit One.

481. previous balance. But there's a credit. limit of 500, so we're below that. But. that means we have an excuse to go. purchase things. Again. $30 of payments, $45 of purchases, $12.12 of interest. charged with total interest this year. $35 at a 30% interest rate essentially, and. went to Dutch Bros. Did you guys are screwing yourselves?

Yeah. You are up your entire. life. Yeah. Okay, I want to make that crystal. clear before we put any plan together. Do you understand? Do you both. understand? Are you on the same page. that your life right now is just. Yeah. We we Yeah, we know what our. financial situation is. Yeah, for Okay, how long have you been in this financial. situation? Um since we've been together. How long. has that been? About 3 years. Okay. So But immediately. makes me nervous that nothing has. happened for 3 years, and we've known. every We've known it's been since we've. been together.

What's going to change now? Um I'm hoping having a the having our. kid would would kind of change it. around, but Yeah. It hasn't. Absolutely. That's a good reason. If. there's a reason, that's a reason. Yeah. Cuz we don't want to We don't want to. live like this forever, especially. having him around. You mentioned a car thing and some other. things as well. So. What's up? What's that? I don't have the. statements for those. So, uh I had a. truck back in 2017, 2018. Um, I was making payments on you know,

it was before I met my wife and. everything and. making payments on it. I didn't have. insurance on it. I wasn't paying that. and then I flipped it and totaled it. Oh. And uh. So, they. Yeah. So, they basically in collections now. In collections? Yeah. And so, I'm paying $50 a week. So, you have a payment plan with them? Yeah. And so, that's the. Is there any interest? Um, no. I don't. think so. Okay. No. And what's the balance remaining?

Um, it should be around 3,000-ish now. What about your current car? Um, so that's. I think we owe around 30,000 left on. that. Jeez. The interest rate is pretty high. I think it's 10, 11%. Oh. Maybe more. Yes. Could be more. That's right. High. Yeah. What's the minimum monthly payment for. that? Um, 6. 80. Oh.

Is that just one Is there another car? No. No. I drive her old car. That's paid. off. Good. Yeah. What is that car? Um, the one we're. paying on, a 2020 Chevy Equinox. Yeah. We might be selling that. I'm not sure yet. Okay. But we might have to. See how far in the. hole you are. Any other debts? Not that I can think. of, no. Okay. So, that's all. You only. have that much. Yeah. You only have 1 2 3 4 5 6 7 8 credit.

cards that are either maxed out or well. over maxed out, plus a truck that. doesn't even exist that you're paying on. and a ridiculous car with a ridiculously. high interest rate. Yeah. So, your. minimum monthly payments on your debts. are over $1,000. And this is for nothing that's even. benefiting you except for one of the. cars. Everything else is just money. you've spent and whatever you spent it. on is gone. Fees and interest, not including either.

of your cars, by the way. This is just. on the credit cards. Fees and interest. first quarter of this year, $632.41. has been ripped from your existence. Thoughts? Yeah. Yeah. And your total debt owed. is $35,720.15. Which actually does not sound insane. This is insane the way you've done it. Right.

Your minimum payments on your debts are. $1,000, but the amount that you spent on. food, going out to eat, was $1,578.50. in a month. Is that not insane? Oh, yeah. It's. insane. It's ridiculous. It's aggressively insane. And all your. bills and fees were 1,751, overdraft fees 204, subscriptions $175. Oh. Walmart, whatever Is that only grocery. store shopping? Yeah, usually it's baby.

formula. $571 in a month of baby. formula? Yeah. Not just baby formula, but yeah, diapers, wipes, clothes, all that stuff. He grew out of all the clothes that we. had for him in the first month, so. Yeah, babies do that. Yeah. And then he has to have expensive. formula cuz he has a sensitive stomach, so it's like $35 a can. He goes through. that like every 2 days, so. You're killing yourself. You guys are. killing yourself. So, what is very clear from my situation,

this is a disaster. Credit cards need to be gone today. Like. this is not even an option. When you. guys are home, if you Are you guys on. the same page relatively? If you guys. are, then burn them. Have a ceremony. Burn them. Yeah. All of them? Every single credit card, all of them? You can ask all of them. after this? All of them? Yeah. Well, You all of them, yeah. Right. Okay. What? We're just trying to. build our credit back up, too. Your. credit? I don't give a. Credit is awesome for those who can.

utilize it. You are being taken. advantage of by that system. Okay. Someday we can talk about it. Again, I've mentioned it millions of times. I. think I may have said it in this episode. already, I don't know. You can use the. Fizz card that I recommend and that. builds credit and it's a debit card. Dude, insanity is what this is. Build. credit? You guys are over maxed out on. your build credit. You build credit. No. Build credit's not in the. conversation. Maybe we can talk about. that eventually, but no. Build credit.

Build credit. So, every person's situation is. situation. Your situation is. Dave Ramsey is perfect for you. You know. him? Yeah. Okay. We listen to Dave Ramsey. He is perfect. for you. Your debt is laid out in such a. perfect way to follow his whole baby. steps model. And he does the snowball. method when it comes to paying off debt, which of course was invented.

like when money was invented. So, he. didn't invent that, but it's a part of. his baby steps and it would work for. you. I would probably modify his first one to. meet your situation and we will get your. budget here in a bit, especially since. you have a kid, it's a little more. risky. Yeah. But I want if this wasn't. already clear enough with how dire the. situation is, I want to talk to you. about the child aspect of this thing. You guys have zero retirement, barely. anything in savings. Yes, you guys are. below 30, but with where you guys are headed.

with nothing in retirement and always in. debt for the rest of your lives, that is irresponsible of a parent. because you are forcing your child to. have to deal with you Right. as a. required expense later instead of you. sacrificing now, saying, "Okay, let's. not live this extreme lifestyle we're. living now. Let's take care of ourselves. and we will actually have money to set. ourselves up in the for the rest of our. lives eventually, you know, when we're. in our 60s." Mhm.

And they won't have to worry about it. What is happening now. is irresponsible parenting. Yeah. Do you. agree? Yes, I agree. Good. So, if none. If none of that else mattered, that. should. Yeah. That is critical. And show. them this video at some point. Do it. Be. like, "This is why you shouldn't go into. debt. Uh, Mom and Dad made that mistake.". Yeah. Learn from our mistakes. So, we need to build a budget and then.

we need to attack this thing cuz it It's. as easy as that. I mean, that's what it's going to come down to. for you. Rent, what is it? It's 1725 a month. Oh. You're rural You're rural. Why is this. so expensive? It's. It's That was the cheapest place we. could find. I guess it's small, so not a. lot of options, right? Yeah. Everything in Cedar Park was like. 2,000 over, so. Cedar Park? Yeah. We're We're from Liberty Hill. originally, so Cedar Park is like kind.

of halfway between both of our jobs. Oh, okay. Utilities, internet, renter's. insurance, all of that combined, best. guess? Um, probably about 300. Gas between the both of you. for cars? Um, I probably spend close to $100 in gas a. week. Okay. And her? Um, she spends a little. bit less. Her car gets better gas. mileage, but it's probably about. 50 to 60.

It's about an hour It's about an hour. drive for me to work and about 30 to 45. for her. So, an average of Oh my gosh, dude, that's something. That's something bad. That's $693. a month on average. That's insane. Car insurances? Yeah. It's on It's for both of them. I. think it's about 600. Oh. No, it's a lot less than that. I'm. sorry. A lot less? Yeah. Cuz I think for her new car, it's. only about.

200. Okay. And for the the Camry that I drive, it's. like it's like 110. So, if that 310? Yeah. Sorry. No, it's okay. Good. Good. Good. Good. Okay. So, with the baby stuff and yes, babies are expensive, but you don't have. to go crazy. You know, a lot of people. I've looked at the baby budget. breakdown. I know what can be spent on. food and babies and stuff for a. household. Mhm. I think. think you can do about 500 bucks for the.

household, maybe 600. We'll say 600 and. hope to cut it to 500. We'll do that for food for the. household, okay? Yeah. What are your thoughts on that. specifically? It's about Sounds about. right, probably. have to eat fancy stuff. Right. Healthy, sure, but we don't have to be going. crazy. And then stuff for the household to keep. it in order, 100 bucks a month is fine. Yeah. Don't have to go crazy. And then the debts, where are we at?

Thousand. $10,000 a month. Oh. Any other minimum monthly payments? No, not that I can think of. Health. Health insurance is all taken out of. before income? Yeah, it's on hers. It's. just her and the baby. It's about $800 a. month. Why aren't you on it? You need to be on. it. You're a dad now. Get on it. But. it's already $800 a month for just her. and. You got to get on it. Okay. You need to. make sure you're getting your yearlies. Get blood work, get everything. You're a. dad. Take care of yourself so you're. there for your kids' future. Yeah.

Okay. And no, car washes are no longer in the. budget. Restaurants are no longer in the. budget. Steam purchases are no longer in. the budget. And all that other crap that. was relentless and McDonald's and. Chick-fil-A and all the other crap you. guys are doing. Subscriptions, they're. out of the budget. Internet, yes. Watch. YouTube videos. It's fantastic here. It's a good time. Everything else is out. No more Netflix, no more nothing. You cannot afford it. You have minimum monthly expenses to.

survive of $4,738. Okay? If you guys are actually going to. do this, if you guys are going to be. adults, responsible parents, you will. follow that budget and go crazy. Because. congratulations. And I don't mean that in a sarcastic way. for once. I don't think this is going to take. forever. You've been incredibly insane. and stupid and just like. terrible with credit cards, but all of.

it added together is creating a balance. with an income that you have that you. can just. beat down. Yeah? So, 2,000. Strictly follow the budget. 2,000. $262. is left. And with $5,720, take 15 months. For the situation you're in, that's not. crazy. Your kid will be a year and a. half old. And then your entire future's. ahead of you. You guys will be 28, 29.

It's a year and a half. That's crazy. And what do you do? I mean, with this $2,262, with that you kill your smallest. four credit cards. Actually, what I. would No, no, no. How much was in your. savings? 4,500? Perfect. We're keeping. it there. That's almost That's like your. minimum monthly expenses. That's. perfect. Keep it there. Don't use it. Now, for now. Uh 2,262, kill your bottom three credit cards.

Bottom four, and then kill your next. three, two and a half to three. You just. keep going until the smallest credit. card to the largest credit card is paid. off, and then you kill the truck, and. then you kill the car. I don't think you need to sell the car. in this situation. What you can do, if. you want to sell it, I don't What's your credit score? Um last I checked it was like a 560, 570. Hers is about the same. I was going to. say get a you would. Yeah. With the income you have, okay,

let's just pay this car off. And then keep these two cars for as long. as you can. We'll build up a car fund. What's the car you're driving now? It's. a 2011 Camry. Okay. We'll need a car fund at some point. Yeah. But seriously, a year. and a half. Year and a half. What is that in the grand scheme of. things? Yeah. Drop in the bucket. Yeah. It's It's nothing. Your kid won't even have any memory.

Nothing's even like being being like. imprinted on him. Yeah. Is Is uh. he? He, yeah. Uh. he's a couple years away. He won't know you guys are are not. having fun and going out to eat. Yeah. And work extra hard. Do some Ubering in. the new car or something like that. Some. Uber Eatsing if you want in the end. Cut. this down to a year instead of a year. and a half. Right. I mean, as hard as. you want to work, as as quick as you. will get out of this situation. Yeah? Right. So,

from there, what is critical, now you'll have 3,000. uh cuz the debt minimum monthly payments. are gone. 3,000. $272. a month. We probably want you to have about. $21,000 in an emergency fund. You already have 4,500. Divide that by the 3,000.

$272, you'll have extra. So, boom, two years. Two years you have a fully funded. emergency fund, and you have no credit. card debt, no car debt. You don't open. up another credit card cuz you'll go. back in this situation. This is clearly. your y'all's instinct. So, if we. recognize that, then we say, "Okay, we're just not going to do it because. our lives actually matter.". And you can take advantage. If you get out of these credit cards, get out of the car,

and get into. uh. what I would allow, if credit is super. important at that time, what I would. allow is like a. get you a $100 gas card that you you put. one fill-up on a month on there and pay. it off every month and nothing more. Straight off as soon as we get it. But that still scares me. But if credit. card is that important if credit is that. important to you, then do that in this. later situation in two years. Right. But.

burn these cards now so you never spend. on them. Remove them from all your. virtual wallets, any anything. Destroy. them, burn them, kill them. They do not. exist cuz they're killing you and making. it so that your finances do not exist. Right. Then, you have so much money to work with. Let's say your income stays the same. $3,500, which is about what your needs will be. That's rent, utilities, your gas, your.

car insurance, $600 a month for. groceries, $100 for toilet paper, stuff. like that. That'll be your needs category. That's. perfect. You don't need to go extra. grocery shopping from there unless you. increase your income or minimize your. rent, you know, cut back on something. Your car insurance will be a little. cheaper as well on the car that has debt. right now. Right. Um. but from there, what I'm going to. recommend for you guys. is of the $7,000, $1,400 a month is invested. Whether that.

be in the 401k or Roth IRA or brokerage, you know, or hybrid of all. $1,400, that's 20%. Right. Okay? You can spend that exact same amount on. going out to restaurants again. Budget. it in a category. Budget it. You don't. spend over that in fun. If you're going. to go on a vacation that costs twice. that much, you don't have fun for 1. month, then you can spend double the. next month. Does that make sense? Yes. Yeah. You never touch your. emergency fund for anything either.

Yeah. Never. And then that additional. 10% that's missing from the pie, it's going to go into a car fund. You're. going to take that to like. if you want a $20,000 car, you take that. right into 20, and. trade in your car, sell your car, do as. much as you can, buy your car in cash. Just don't go into debt again cuz you. guys cannot do debt. Right. There are. smart ways to do that. It is for the. vast minority of people. You cannot do it. And that's okay. It. doesn't matter who gives Yeah.

And um once you get that car, I'd keep. that 10% going. What you can do is use. that $700 a month, continue going, ramp. it up a little if you want to, cut from. your uh cut from your needs where you. can, or cut from your wants. Especially. don't cut from retirement, though. Yeah. Um and what that can be is a down. payment fund on a house. Cuz eventually. you'll want a primary residence. Right. That's our goal in the next next couple. years. That is not going to happen in the next. couple years. Yeah. Two years you're out. of debt and have an emergency fund.

And only then you're starting to save up. to get a car, and you're starting to contribute to. retirement. House doesn't happen for. probably about six to 10. But that's okay. Who cares? You'll be in. your mid-30s. Most people can't buy. their homes until then anyway. That's fine. It just makes you. uh someone who's doing well. Right. Okay? So, don't be ashamed of that. Don't get. rushed into it. Uh once you get into the. personal finance space, I get the lure. of like, "Well, now I want to pay rent.

I want to have my mortgage going into my. overall equity of my home, and while my. home value goes up, it's a piece of. property, it's great, you can pass it to. your kids eventually." I get it. Right. You do not have to rush into it. Put your over the overall grand boring. grand scheme of your financial life, take that into account over rushing into. something. Cuz if you just save up a little, do an. FHA in this area, the minimum monthly. payment on that would be beyond. unaffordable for your income.

Right. Right. Even in the like edge of suburbia, it. will still be beyond unaffordable, even. if interest rates are good. So, that's what I'd do. We do need like. that like I said, in two years when you. guys are. uh 29, Mhm. 20% is going to retirement. We'll just. base it off the average stock market. return. instead of the average S&P 500 return. I'm a for the S&P 500, and it does.

10% a little over 10% on average. uh historically. Stock market is like. 8%. So, we'll just do that. And we'll do. What was it again? So, 7,000, 20% of. 7,000, 1,400. Doing that for. 31 years. Sounds great. If that follows the. average return of the stock market. historically for 31 years, so when you. guys are 60, $1,400 a month, which by. the way will go up cuz your income will.

go up over those 31 years. But let's. just say in that for an example, $2.27. million. Which is great. Or we can take. into account the average inflation. Take into account the average inflation, that'll be $857,000. Which is still pretty good. Still pretty good in today's money. In. today's money. That's what it would feel. like if you had it right now. Oh, wait. No, sorry. I I No, no, no. I No, no, no. I did that wrong. It It would be 1.24. million. I was going to say that did not. seem right. I typed in the wrong number.

And if you use the 4% rule, you can. withdraw $50,000 a year in today's money. for the rest of your lives. And you'll. have a paid-off house at that point. Yeah. You'll have no debts. $50,000 in. today's money would stretch a lot if you. didn't have any debts. Now, of course, again, as incomes go up, your. contribution amount will go up. So, let's get it like $75,000 in today's. money, $100,000 in today's money. It's like 20% of what you're bringing. home that month. Mhm. Okay. I would do that. At least 20% of. post-tax. So, yes, there's a certain.

percentage that you're doing. uh pre-tax when it or you know, uh well, depending on what 401k you. have. Either way, um as long as it just. comes out to a minimum 20% post-tax. Cuz that's what we need to do. I'm I am not to go back to negativity. This situation in general deeply scares. me. The track record, being on the same. page, and knowing that this is you for 3. years, yet nothing has been done, and.

what you bring me are over balances and. negative balances on your checking. account? I'm terrified. I'm scared. I'm scared that you're going. to be 60, there's going to not be a. single cent in retirement. I'm scared. that you're going to be 60, and you'll. have like 20 credit cards with over. balances, and we're still negative on. our checking account, and we've never. owned a piece of real estate. I'm scared. of that based on the history. Right. Prove me wrong. Do you know how much of.

an incredible success Let's just pretend. I'm the most selfish person in the. world, and I only care about me for a. second. Let's just pretend like that. Cuz sometimes when people see people. like you on YouTube, they forget they're. actual people. Right. And they just. assume they're like an entity. Let's assume that. Even if you do all. that, do you know how good that looks. for my channel that you have succeeded? Yeah. In the most selfish way possible. So, please prove me wrong. I actually. really want you to prove me wrong so. that you guys can have an incredible. life, so your kid can have an incredible.

life. And then we can put the situation. on display for everyone so they can have. incredible lives. That only does it if you change what's. been happening. If you follow the budget. that we laid out and put on screen. If you follow that, 2 years fully funded. emergency fund, no more debt. 60 years old, we're retiring. comfortably. And setting up our kid for success along. the way.

And maybe having more if that's what. y'all if that's what y'all are into. Depends on who you ask, but yeah. Yeah. Well, okay. Tell me realistically knowing your. history, you two together, what is. actually going to happen when you leave. here? I think I think we'll we'll follow it. for sure. I definitely I've been talking. to her about cutting up the cards for a. while now. What has been the pushback on. that? Um she wants them used to build. credit, and then just having them as. like a backup for like gas and stuff. whenever our checking account is.

negative. We can talk about building. credit again after you're out of this. whole situation. It doesn't matter. You. guys are doing this now, and your. credits are in the what What was that? 400s? 500s? 560. It doesn't even matter at that point. So, who cares? Sorry, continue. Yeah. Um. but yeah, I think um. it doesn't seem too hard to follow. Um it's just about sitting down and. putting our heads together and actually. doing it and actually sticking to it for. longer than cuz we we have we've done. good for a we'll do good for like 1 or 2. months, and then. you know, something will come up or. whatever. We'll go on We went on.

vacation last year, and pretty much just. blew all the savings that we had, and. Sorry, vacations don't exist for the. next 2 years. Needs to be known. Yeah. Do you guys have close friends here? Close family Everybody. Yeah, friends, family. Good. So, good groups? Yeah. Let them. know your situation. Show them this this. end of this episode, and use them as a. tool to keep you accountable. Because I. get that. That happens to a lot of. people. Even me with my diet. I'll do. great for 2 months, I'll do great for 6. months, and then I'll have like. terrible. Right. If you have people. holding you accountable, and you're. actively.

trying to have them hold you. accountable, you know, like you're. encouraging it, it's going to help so. much. This fire will be lit under your. ass right now. Yes, and you'll burn the. cards. Yes, probably. But where are we. going to be in 3 months? So, please take advantage of the amazing. group around you. Make sure you're being held accountable, and we will definitely hold you. accountable when you come and do a. checkup. We'll do a checkup in like 6 months cuz. in 6 months, well, the car should be. gone. The The cars, the tr the vehicles, what's going to take forever, but the. credit card should be gone.

Yeah. Yeah. Any final thoughts? Not really. Just hope to stick to it. Hope to get her on board to stick to it. Hope to be out of debt. For Johnny, okay, that's a scary mess. I really hope. they get it together. They can have a. great life, but they have to get it. together starting now. Hammer financial score, let's break down. those categories. Spending within a. budget, obviously zero out of 10. That's.

not even a question. Debt, one out of 10. Only because it's. not like there's any crazy high interest. student loans or anything in collections. or like IRS debt, but it's still really. bad. Retirement, there's nothing. Zero. out of 10. Emergency fund, there. actually is money there saved up. Three. out of 10, which helps them get this. process started, by the way. Real. estate, well, they're not even close in. that game yet. Zero out of 10. That. comes to an aggregate hammer financial. score, one out of 10. Don't forget to. check out the resources in the. description below, and don't forget to. follow my Instagram and Twitter. Thanks.