He Keeps Spending On A High-Balance Credit Card! | Financial Audit

hi I'm Ethan Forbes I'm based out of. Cedar Park I'm 22 years old and this is. financial audit what do you do for a. living I make controls technician for. building automation Solutions. what do you make currently what do I. make currently I make 31 dollars an hour. I think that comes up to 70 000 a year. off the top of my head oh yeah okay so I. see here I actually you sent me a pay. stub yes sir which is great so 31 and. then is this overtime yes to overtime. okay so we got 40 hours and then uh 2.75.

hours of overtime and the rate for. overtime is 46 so it goes from 31 to 46. huh yes that's killer how much overtime. do you normally get because obviously. that's not that much but on slow months. I typically clock about five extra hours. a week it depends on the project and. when it stipulates from it but on heavy. projects in which we're working just. non-stop I can expect anywhere between. 60 to 70. okay wow that's awesome no no. not just OT but yes sir yeah so what we.

had here were earnings of 1240 plus the. overtime of 127 but that of course is. your grow gross and then we get the. Lovely federal taxes and all the goodies. goodies goodies and then you have some. contributions as well you have a savings. plan CB plan yep and and life insurance. looks like let's see here and then we. have total okay so here's your total. gross. for this now are you paid weekly.

bi-weekly I'm paid weekly weekly okay. because that definitely changes the. perspective here and that makes sense. because it's 40 hours so current. thousand three hundred sixty seven then. uh your taxable gross is a thousand. three hundred eight forty one total. taxes taken away from yeah 400 or 241 17. with deductions of 231. Nets pay on a. weekly basis and I'm gonna use this for. your average even though you have up or. down but this is what we have in front.

of me your take home. 926 yep. which would come out to take home of. about 48. 152 a year yeah Texas hurts ah they do. which will get us just about four. thousand dollars a month that's the one. just over and that feels about right yep. for you okay how do you feel living off. of four thousand dollars a month uh four.

thousand dollars a month um. for the poor rent choice that I made of. buying a nicer apartment hurts but okay. I did buying or nothing not buying. renting my apologies. um but I have a partner and she pretty. much mirrors exactly the income that I. have okay what did she do she is a. robotics technician for uh micro. semiconductor processing plant. um she's a lot smarter than me man but. um. yeah but look I'm in same value of. income that's a lot nicer and to be.

honest I'm I feel like we've been. playing with that income a little bit. more than we should have and we probably. should be buckling down a little bit. more for okay given plans will you say. partner are you married or no sir okay. how long have you all been together. we've been together for four years now. four years marriage in the Horizon well. she's watched she's gonna watch this but. between you and me yeah probably well. I'm sure you guys have had a. conversation there has been conversation. okay yeah because four years you know I.

mean there's certainly nothing to rush. into for anyone it's up to each. individual on each couple but you know. trying to make sure that we're. comfortable uh we moved in with each. other just to make sure that we can't. stand each other yeah once you guys move. on we've been in living together for the. past year now no murders no murders. She's Come very close to murdering me. the clothes on the floor she cannot. stand fair enough but aside from that. you know in total we bring home about. eight thousand dollars together or more. yeah so you said you got into a stupid. expensive run yes what's stupid.

expensive uh utilities and rent in. totals are going to be about 2 400 a. month. that's pretty expensive. um just as a general concept. um and you're not even like in the main. part of town by any means you're not. like a distant suburb I I'm in Cedar. Park oh yeah. nice place a very nice place two. bedrooms yeah two bedrooms we have our. own offices it's it's worth the. expansion to help make sure we don't. murder each other but. so y'all split that down the middle.

right and split everything right down. the middle yes sir. you know I mean it's right on it it is. right on it from an individual level as. a. pretend you were married it's 30 of all. your take homes and. each individual your split is 30 of to. take homes because you guys have the. same income so but either way that's. right in the cusp if it was any higher I. would definitely not be happy I prefer. it to be closer to about 25 because it.

gives you more flexibility in your needs. category and hitting other goals but. obviously ah crap yeah well have okay so. you all have had conversations of. marriage have we had conversations of. purchasing a place we are in the talk so. by the end of this year we want to be. looking at a down payment really on a. house yes sir okay so we're both setting. aside fifteen hundred dollars a month I. saw quite 1500 bucks a month is being. set aside yeah each yes sir even though.

you have these debts that we're going to. talk about um yes. so so wait how much is set aside in this. pile on your end uh on my end I. currently have uh two thousand dollars. we're halfway through February so how. much you said you said a month 1500 each. you said yes sir so you just started yes. sir okay we had the talk on January 1st. saying this is what we're gonna do this. is our plan for the future gotcha okay. well then let's well actually before we. jump into your finances I want to hear. from your perspective before I give my.

take on it where do you think your. finances are how would you define your. financial situation I think they're all. over the place. um I think I'm able to keep a pretty. good lead on things but. I'm kind of directionless I have some. big ideas and I have some big plans but. the biggest thing is I. I'm still young and I'm going to. attribute that to them. having a harder time wrangling the. finances and being more responsible with. it than I should be what do you think is. making you irresponsible or having a. hard time wrangling your finances as you.

said I really like shiny things dude I'm. okay I'm really honest with you so. there's anything some nice and the. paycheck at the end of the week so what. are the things that are shiny that you. like. mainly tools uh so I I like to buy. facets to help develop other interests. and hobbies so I bought a 3D printer to. try to do tool production and create um. what do you call them little models to. help concept concept ideas. um I've probably been investing more in.

that than I wanted to but I feel like. it's a skill that I can build out and. learn so no return on that yet but it. might be useful. okay well let's take a look at your. checking account so about just under a. thousand one hundred in there and you. essentially have all the money that. comes in goes out pretty much and then. it just sits around that a thousand. dollar Mark okay I mean. as a talking account balance goes it's. not the scary it's not even close to the. scariest we've seen I like to have. probably about a few thousand in there.

but yeah uh and of course you guys are. not combined right now no we have. separate accounts and a joint that we. pay bills with okay would you say well. actually never mind it doesn't matter. this is about you and in here we have. other than a few transfers back and. forth and a couple of times getting. Grocery and utilities I mean. everything's just spent on conveniences. and fun and yes and not even shiny. things we're talking about uh getting. lunch at. varelas and having Starbucks and taking.

the toll roads and Thunderbirds and cash. happy now and door dashing that's a very. expensive thing to do and the. mangatai and Waterloo and. you know going on toll roads again and. sending out some patreon monies and. Moonies summer Moon which is a coffee. place Steam games going on the toll. roads buddies Burr Lone Star Starbucks. Thunderbird Amazon Prime Starbucks.

inside something cash app and out having. some Dairy Queen and driving on those. toll roads again which is again very. expensive way to get around because it's. not required here but it is uh sometimes. a faster way then we have things like. car payments and then we have Internet. transfer you call this repayment from. partner that came in yeah okay so that. was money that was in okay so you paid. for something and she paid you back yes. sir okay gotcha and then bills and rent. oh that's right okay because that's your.

half. and she pays for it and then you. transfer it no uh I believe that. repayment was is I I had Tire issue with. my vehicle. um and she had the cash on hand. so we just had had a short exchange. between that and that was. [Music]. that's what I got and if you want to. exchange something today exchange. clicking that uh subscribe button. because I'm trying to get to 250 000. subscribers thank you to everyone who.

has subscribed so far are you subscribed. yes sir good lad good lad okay so yeah. we're spending a lot on BS and stuff. yeah sure and is this the having trouble. wrangling things together that you're. talking about it's not that having. trouble wrangling it's well. if I have to be honest with you yes at. that point so most of those food uh. expenditures that you see are just. either off days where I haven't had time. to go to go to the grocery store The.

Leftovers have run out well these off. days are like every other day. yes sir so by off day you mean. every other day. yeah okay so it. it's it's hard because I do work. um in fields uh so so at construction. sites or whatever job the sorry I'm. getting tripped up on my words but. whatever the site requires I'm not in an. office so either my lunch doesn't go far.

enough I typically pack a sack lunch of. a sandwich Apple granola bar whatever. and buy that middle period it's. especially lately during this January. freeze it was cold and hungry it was. cold and wet outside so I have spent a. little bit more on coffee than I'm. willing to admit but did you lose power. no The Brew freaking coffee you're. totally right okay you're totally right. it was an interesting way to excuse I. know. [Music]. why are we spending 45 dollars to get.

food delivered. to your place I have no excuse for that. okay now all this stuff to be very clear. is not necessarily the worst thing ever. just depends on the overarching. financial situation and we will see what. that looks like right as we go through. everything uh spoiler there are debts so. when there are debts like this and there. are goals like trying to get to a house. and stuff like that we don't do this. this doesn't make sense it's a bad habit. yes yeah it's a bad habit do you think. it's a habit that you would have trouble. breaking no no not at all you don't.

think so bad habit for me hey so. I I don't set. [Music]. I've used this meeting uh with us I I. allowed myself to play around until we. had this meeting. um I saw that I had some extra cash in. reserve I know that I probably should. have been working towards an emergency. fund I'm sure we're going to hit on that. uh an emergency fund paying off debts. whatever it's just been a little bit. easier to know that once we have this.

meeting I'll have a hard deadline and. then after this this will be the. turnaround point and this is where we. can launch from. okay well as long as you actually do. that's what matters okay let's talk. about that savings let's talk that about. that emergency fund you said there's. about two thousand dollars set aside is. that it so the total. yeah sure okay so you just started yes. sir. if you come into a situation well I mean. you're pretty young 24 you said right. 22. 22. okay well even younger so you. probably haven't encountered a situation. where an emergency fund and not having. it has harmed you I have had one.

emergency situation okay where my clutch. exploded and I drive a Euro Car so. getting that replaced was about twenty. five hundred dollars and I fortunately. had enough saved there and I've been. trying to replenish it from that point. but okay well bad news about this house. yeah. emergency fund comes before house fund. yes so really you're just saving up to. you're saving up to save up for the down. payment a step to it yeah.

okay before we get into the debts though. we should look at some and what I'm. assuming is potentially a 401k and a. rollover 401k. or like a 401k and a Roth IRA type. situation yes sir just a 401k and then. the Edward Jones you're looking at is. just in in extra brokerage Venture yeah. okay perfect let's take a look. also shout out to you because you are. probably going to be put on blast a. little bit in the debt section. um but shout out to you for coming on.

here being financially transparent uh. for everyone who can relate to your. situation and everything like that and. then also uh reaching out to get help. for your finances I have some people. that I really care about in my life and. I want to do it right and I don't want. to get up I love that sorry if you are. going to put that in and you have to. click that I swear all the time we just. bleep it out it's okay I have a potty. mouth it just words it doesn't matter. all right let me strap down let's do it. so this is just your random brokerage. though yes sir so. 5488 why do you not have like a Roth IRA.

I do have a Roth IRA okay. based out of the Fidelity 401K it's the. post tax okay. um and that's where I put the majority. of my money it's a 10 contribution uh. per paycheck but it's not a Roth IRA. this is a 401k that you're talking about. you are entirely right I I'm sorry I I. got my wife crossed we will talk about. that then because I would definitely. want you to make sure you have a tax. advantage count in an IRA okay all right. let's do it then uh but for now this is. a brokerage and in here this is.

interesting so we just have. um. a few bonds New World F3 I don't even. know what that is. government obligations PR and JH. discipline uh JPMorgan large cap okay so. that's. and then Lord about growth. I don't have Edwards Jones so some of. their funds I'm not too familiar with. but in terms of obviously we know what. the JP Morgan large cap is.

that is not managed by me I I work with. a financial you have a dude there yes. sir okay. it's interesting. [Music]. I actually met with her yesterday. I usually don't like seeing bonds again. I don't know some of these you don't. like seeing bonds not investment advice. and younger age doesn't really make. sense makes sure it makes sense more to. go fully aggressive when young and then. level it out okay things like that and a. good version of that is actually what.

you have in your 401k because what. you're the pretty much everything in. your 401k is is a Vanguard Target 2060. fund and those funds are fantastic for. people who just don't want to like think. about their investing right which is. perfect you put the money in it's going. to be it's based on the year 2060 it's. going to be much more aggressive now in. the early years and it's going to level. out to more conservative thing as it. gets closer to that retirement date. right so that's personally what I like. instead of you know trying to get all.

these micromanaged craziness uh but. either way in the 401K we have 7466. employee contribution 4 000 and employer. contribution three thousand so you're. contributing a little higher than the. match uh our match is six percent uh I. go team you just do 10 okay. and it looks like you had a mix of Wrath. and traditional that's the one okay cool. now your taxes are actually low enough. where I think it would make more sense.

for you to be more Roth okay than uh. traditional okay in terms of both your. IRA and 401K in terms of how much money. you can save on potential taxes in. traditional your tax rate is not high. enough where it would offset the. potential gains you would have from. paying taxes going in and not paying. taxes on taking the money out in a Roth. format okay. potentially.

um it's usually like 30 35 that's where. it's like you know start thinking about. and then if it's above that 35. especially over 40 then it's like right. yeah it makes a little more sense going. into traditional and taking advantage of. um some tax savings on the year okay uh. but. let's see do we have anything else in. here or is it all in the 2016. uh I have. 2060 and I have a tech stock as well oh. a singular Tech stock uh it's our. company Tech stock oh.

that I have it blurred out though oh. it's 50 50. it's 455. I've looked at our. annualized your return on the Texas I. know but it's just it's just so. unbalanced individual stock what. singular individual stocks should not. represent more than five percent of your. overall portfolio and this represents at. least 25 percent of everything combined. So based off right now what do you. suggest doing. so is it automatic when it happens that. it gets the vested into you have to do. is good Fidelity and change the. contributions and it does it same day if.

you're going to continue contributing to. The Brokerage 90 to the 2060 10 to the. tech stock okay if you really want to. okay. um well would 80 20 be acceptable to. just to see where the direction we're. going with our company and you'll still. be in it and you already I mean you're. you're already leveraged so high in it. where just like go 10 for a bit okay. because that keeps you eventually that. will hopefully level out to your entire. portfolio being about five percent of a. single stock this is. too heavily dependent on the performance.

of that stock where your portfolio is as. good if the company's stock just goes. down for whatever reason it just takes. your portfolio which isn't going to. matter right now in the long term for. you honestly mostly uh but still. it's just it's just an overbalance and. it's not typically what that is a change. that I can make they advise okay so but. good I'm glad we do have some things and. Investments again we have about. 5488 in The Brokerage and we have 7476.

in the 401K so good all right not good. the doubts so let's get into those and. let's get some more insight into these. uh and then I do want to come back to. that Roth IRA but I would love to yeah. so oh it's a little bit more of the. investment but we don't need to see that. anymore we have a couple things we have. two credit cards yes oh three credit. cards but two credit cards is listed on. this. so. first one is one with a balance current.

bound. 3122 and you only made a payment of two. hundred dollars. yes sir. um so that is the credit card with a 10. APR right now I. I know that this is the going on a leg. part but I did make my monthly. expenditure for the first of a 300. payment the 200 I was still still. recovering from the Christmas and. my birthday was on January 30th so I. spent a little bit more than I wanted to. there.

um but I do have a monthly payment set. for three hundred dollars. [Music]. honestly I be completely honest why the. are you going to Starbucks why are. you going to all that crap why are you. even contributing to a brokerage right. now I understand the 401K I always take. the match because it's 100 return. guaranteed much better than a 10. interest but either way why are you. going to all that stuff and why are you. only paying 200 on here and even worse. why are you going to Total Wine and More.

why are we traveling nearly annual. vacation as you've listened I don't give. it that you need to go on an annual. vacation Lupe Tortilla love it but still. you shouldn't be going there in Wise. Guys Chicago uh this makes no sense and. these are okay these are HEB centers. marked as dining now yeah sure okay when. I saw that originally I was like he's. just going to H-E-B getting some. groceries but no no this is stupid this. makes no sense if you are having three. thousand dollars being subject to 10. interest why are you doing all this why.

are you doing why are you still spending. on it when you're losing 10 and why are. we going and having fun I guess if we. wanted to talk about the rationality. behind what I had there sure that credit. card's leveraged at 30 and that's what I. was expected to do uh and what I felt. comfortable with and what I read about. the credit cards what I should be doing. keep keep it at or below well you're. talking about the impact on your credit. score I'm talking about the impact of. you're losing 10 sorry I definitely am. losing that 10 and you're 100 right I've.

been using that for a lot more fun than. I probably should have been I. the the annual vacation that does make. sense I should not be going on that no. and I shouldn't have been racking up the. credit card debt but but it was. at the end of the day the only thing. that I can tell you is is I I saw the. credit card and I fell into that trap. and I said as long as I don't go above. 30 percent I can pay it off and work it. off and I can still comfortably make the. Investments and payments that I need but.

you clearly. so you would rather have all these. Starbucks purchases and door dashing and. annual vacations than paying off this. debt at 10 interest. um I've been on and what's the point of. continuing to invest anyway because. guess what the 10 that the S P 500 is. making on average it's you're. no you're bang on right. um. I I've just seen it as play right now I. I'm gonna be honest with you I I've seen.

you this place so far I've been. directionless and I'm like I'm making a. ton of money I'm gonna have fun every. Friday night I'm gonna go to the HEB. Center have hockey games I'm gonna go. eat with my friends yeah the stars. played we won. um but no no you're totally right I've. been using this credit card as a golden. ticket and I'm here talking to you. because I want to get this straightened. out and I want to I need somebody to. grab me by there and say this is what we. need to do to fix it well this is what. we need to do we're just cutting down on. both but we'll get there for a second.

PH down it doesn't make sense we're. getting soup and tacos and in and out. first of all in and out come on and. Starbucks and Starbucks we're getting. more Starbucks than it was even in our. checking account and Taco Shack and. water vending where we already have. three thousand dollars in debt a 10. interest and we're going to a vending. machine. you're totally right. oh okay so three thousand one hundred.

dollars essentially. with a minimum payment. of and a pending balance of three three. hundred dollars coming in so that's. higher than the 200 that that 300 is my. payment oh oh okay. almost got shoot out there. I was about to be so upset. but the last statement amount was 1821. and you made a 200 payment and it's gone. up to three thousand dollars you're.

right so we're blowing it yes I do like. this credit card more because. congratulations we only have ten dollars. on it I pay that off good I actually. forgot that I had that service and I I. was. I may try to get rid of it. okay and now I know this isn't one. that's going to hurt the most here. coming up. what is this is this attached to this. these the same things yes I believe so. okay. so you must have been doing a lot of. purchases on this card then right I was.

primarily focusing on using their credit. cards and paying it off at the end of. the month to try to get the credit going. as best as I can what's BH management b. h management is our um what you call it. rent so you pay that through the credit. card uh. may I see that charge just so that I. don't yeah let's make sure this is. attention to the right thing management. yep so this is our rent payment and I I. had to make it the off the cuff payment. because our um. our joint account got hacked or scammed.

whatever and I had to make sure that. payment made through because we had to. do the account verification it took a. week so I I know that's not best. practice but that's what I had okay and. then money came from savings into here. at least that's what it says yes. so we're taking from savings the the. rest of the savings yes the. you're right okay this is the one that. hurts Yep this is the one that hurts. yeah one thousand well the bounds is. lower. 1070. yeah but the utilization is at 80.

right now. I came here to be honest with you good. thank you. the only way to get help is to be lay at. all. up front with a 40 minimum monthly. payment I I just made a 300 payment to. that on the first as well good so we're. at 700 left good. 370 for the comments that are going to. say it's actually 370 dollar payment.

gotcha now. and why are we having some purchases and. purchases and purchases and yeah gifts. and holiday I can't see everything but I. know it was it was Christmas gifts. personalized items for friends interest. charge on purchases of 25 zero percent. APR right now for the year on this card. so I know so Amazon cards you're doing. the stupid financing uh this is the.

official Amazon Prime card it was the. zero percent APR for the year and they. also had the option of zero percent APR. or the five percent cash back and that. that interest must have been accrued. through a large five percent cash back. purchase that I made which I know is I I. am losing money with that twenty five. dollars. so what's the point what I am trying to. get to because there's we can pay all. these off because these balances are not. crazy but if we're not to a point you're. in a position where you want to pay.

these off you know you want to pay these. off I see you making larger payments of. the minimum monthly payments but you're. still putting money on the cards why are. we doing that if we cannot get to why. we're doing that and change that then we. are never going to actually fix the. problem long term. I haven't been taking it seriously I. I've. I up until now I've just been using it. as play I've been paying my bills being. happy with what I have and I haven't. really had the motivation or the drive. to go much further and that's the god.

honest truth I've got nothing else to. say. Tim I'm nervous of you having credit. cards because you haven't demonstrated. being responsible enough to have credit. cards yes. I in your situation would chop them up. and get rid of them and then maybe and. if you are show financial responsibility. for years then you can get back into the. credit card World okay but right now it. is not a tool that's helping you so what.

would create it to Be an Effective tool. so so once you're able to officially. when you are able to demonstrate that. you are able to manage your money be on. a strict budget and everything like that. then you can use credit cards and take. advantage of rewards and paying them off. on a monthly basis okay right now they. are not so close to paid off on a. monthly basis so where do we go from. here what's the way to fix this well. we'll talk about that but there is one. more thing we need to get through all. the finances we have a car that yes. vehicle debt yes we do now I see the. original loan balance of 9430 what's it.

at right now uh four thousand five. hundred dollars good and that's because. it should be a 36 yeah you started it in. 2021 2024 is I'm glad it's 36 months now. the interest rate is in a questionable. position I'm sorry I say the balance one. more time uh 4 500 okay yeah because the. interest rates at four point or sorry. 5.99 six percent. [Music]. there's many reasons not to go into card. debt.

uh in terms of taking out leverage under. depreciating NASA in terms of uh you. know monthly payments in general and the. main reason I'm more against it is. because when people instead of just. buying a car in cash take out money but. to get a car they would get a more. expensive car they justify getting more. expensive car more upgrades than they. would just buying a car in cash right so. but I understand there's also logic of. getting a car if you're able to truly be. disciplined and you get a car the same.

exact car that you would get in cash and. you invest the rest if you financed it. instead you invested the rest. there's math around it now usually. the interest rate for that is like four. percent being the cutoff in terms of. invest or pay off more aggressively four. to five percent you're a six percent so. you're above that right. but it's not an insane interest rate. just you're not a hundred percent. guaranteed in all instances in the. market to beat it necessarily by.

investing versus paying off early oh. that makes sense that being said. the your minimum monthly payments up to. this point they've likely pretty much. tackled all the interests and now the. rest is principal ish right about so. it's in a questionable position and. that's why I'm situation to situation. not one size fits all what is the car. the car is a 2011 Volkswagen GTI it's a. fun little toy car uh I don't drive it.

as a daily driver though work car I have. a work truck uh the job position has. changed where I was required to drive. every single day for my last job okay. um so that car got a lot more usage. right now it's just a weekend warrior. how many miles 120 we just clocked 120. that's another thing I don't like. haven't done I don't like having dead on. a higher mile car you're all right yeah. and if you get to wrecked your insurance. will cover it but yes sir. okay. I'm paying I believe 150 180 a month for.

full coverage. so okay plus 300 minimum monthly payment. on this yes just about a little under. but just about. so. I can only talk about your financial. situation not your partner's financial. situation and not you both together hers. is golden like she has no that's good to. know. it's good to know she has 9 000 in. student loans and that's it and. I've seen it before where fingers. crossed but you know that's not going to. happen no it's not going to be forgiven.

but I know so your question where do we. go from here right and that is the. important thing well right out the gate. none of this is going to get fixed. unless we start addressing some of the. problems at hand and the symptoms that. are being shown with those problems are. you spending too much on doordash and. Starbucks including on cards that are. already having balances that you want to. pay off. budget a strict budget at least for your.

money it would be great if you guys can. start doing that together if marriage is. in the future she already has an Excel. sheet okay good so yeah just think about. your money in the four thousand dollars. we're gonna budget I mean immediately a. thousand two hundred goes to rent that. kind of sucks so let's build out your. budget a little okay 1 200 to rent. about 450 to uh car payment and the. insurance. probably well because your daily drivers.

the company car so what would you say. you do on gas for your personal car. month fifty hundred fifty dollars so. we'll call it 500 for the car then. unless I drive like an animal and then. it's more and then you have some uh. minimum monthly payments one I'm not 100. sure what it is on one of the cards and. then one is like 20 bucks I never pay. them minimum monthly I always try to go. at least 50 to 100 more well we're gonna. prioritize our money so you'll for one.

of them you'll probably hit your minimum. monthly payment only okay but I just. don't know what that is we're just gonna. call them a hundred. just to be extra safe for your minimum. monthly payment on credit cards now how. do you do your food and grocery. situation at your household right now. how is it done food and groceries I. typically do the shopping and the. cooking. um she doesn't put anything towards it. oh no. I just do the chores she she helps pay. we split that right down the middle we.

typically spend about a hundred dollars. every week or so. each uh no in total oh so your grocery. spending would be 200 uh a month yes sir. Okay then if you're gonna say that oh no. he's writing it down that's in stone now. it is so groceries will add an extra 100. for. um toilet paper and all that stuff. okay yeah that 409 is expensive man yeah. so we have a thousand two hundred for. rent 500 for car 100 minimal monthly.

payments on credit cards 200 for. groceries hundred dollars for all the. extra things you need so and then health. insurance that comes out of your. paycheck right uh I don't even see it it. just okay. cool but it's not something you okay. okay yeah. anything else that I do have an HSA. though if that's I don't know where. you'd fit that in but well I mean I I. don't actively uh contribute to it the. company automatically helps with that so. I I I I consider that a part of the. emergency fund I have four grand in the.

HSA right now. um I don't know if that affects your. calculations I'm so sorry for forgetting. that's I wouldn't count that as a part. of your emergency fund because it won't. cover everything in the world it's. health related because emergencies can. be a wide wide wide variety large slew. of things I I I'm sorry to throw a. wrench in here I just. 2100 that's your minimum payments in. order to survive on a monthly basis. which leaves you out with a thousand. nine hundred good with a 1900 fantastic.

what are we doing fair enough dead the. Amazon card this month is paid off you. got it and then you already have 3 000. sitting in emergency fund we'll keep. that we'll keep that there and we'll. start paying off this debt. so and then the remainder besides that. 700 to the Amazon card uh the other 1200. will go to paying uh a thousand two. hundred of the 3100 other card okay yeah. and then we.

the next month what's remaining from. that. so that'll be March first half of March. well you'll fully paid off that 10. interest card okay and then from there. so what I'm where I'm stuck is. the car debt the payoff date. instead of going crazy sorry go ahead. I don't know what you're thinking but. um I I mentioned it in our email I think.

but during the summer I run a weekend. job and that probably brings in about an. extra 750 a week and I run that for. three months so if we're looking at. paying off larger debts uh like the car. payment we could definitely factor that. in. well the car what I'm trying to do since. it has higher miles and stuff like that. but you're also not forced to rely on it. for your daily driver but of course if. you lose your job then you lose that. daily driver then this becomes a daily. driver right all this stuff there's a. lot of things in there uh so it is an.

inherent risk the risk just isn't. extreme. I think what I would personally do it's. a 300 minimum monthly payment now I. would just amp that to 600 we just okay. try it paid off a little quicker but. we're not going insane what's your. reasoning behind that because most of. the interest already been paid it's not. your daily driver. and because since the interest has. already been paid. well the reason why we're doing that. versus the minimum monthly payment is. because there's inherent risk there but. since the risk is in extreme we're only.

doubling the payment and we're like. investing the rest maybe if you want to. go higher if you want to just pay it off. you can if you want to just go crazy for. a few months by the way. um it should be clear in that budget we. did not have eating out or Starbucks at. all we did not have one eating out or. Starbucks at all yes sir and that's fine. but that's only through like the end of. a few months I'm but if it's a habit. that I can build and solidify where I'm. not eating out because I do value like a. weekly uh takeout you'll get there very. soon like with my girlfriend and I.

understand that I I just I want to. solidify a habit where I'm not going to. Starbucks like ever again or the best as. limited as possible so I I think this be. a good time to solidify that now and. just get in the habit of I can is that. something you want then that's fine oh. is that something you want to do I don't. have a problem with you going to. Starbucks at some point because you can. fit and you can't fund category but you. just can't not fit in a fun category. right now right. so at that point the credit card's over. there halfway through next month the.

credit cards will be done yes you'll. double your car payment at that point. but with the minimum monthly payments on. the cards gone we can't have fun. starting yet okay. uh we're gonna say you have about a. thousand five hundred dollars left now. because you're doubling the car payment. but the credit card payments are gone. nah a thousand six hundred dollars. I want you for yourself to get to a. basic a basic starter emergency fund. no let's go so we'll now we'll get your.

emergency fund to a good place with what. it costs for your rent. poo rent yeah it's not great. I want you to get to twelve thousand. dollars but you only need nine thousand. dollars to get there okay. divide that by see a thousand six. hundred dollars. meaning in five months from well six. months from now but five months from. middle of next month five and a half. months or so you'll have that twelve. thousand dollar emergency fund okay now. you can go crazier and cut back on other.

things if you want to you can go crazier. and you know put all your summer job. project get another job if you want to. and you can do whatever it takes to get. there quicker but in if every single. month looks exactly like this month that. we've budgeted out that's like five and. a half months from the middle of next. month okay. and then you'll have an emergency fund. it will be looking like we're heading. into fall at that point-ish uh end of. summer and then what you can do from. there if you want to just follow. something a general rule which is a good. place for people to start 50 30 20 50 on.

needs 30 on fun because congratulations. once you have the 12 000 emergency fund. you can have fun again right and then 20. on Savings in retirement. what we should start doing you. definitely want to max out your Roth IRA. every year okay and you don't have one. right now but luckily you're in such a. the exciting thing about being 22 and. why I got that a lot of us can be wish. we could be 22 again you got that time. for compound growth so start throwing. all that in now I wouldn't worry about.

your brokerage until after you max out. your Roth IRA okay Roth IRA 6500 right. now is the max so that that's just over. five a year okay and just over 500 bucks. a month okay of investing that that's a. lot smaller cap than I thought it would. be yeah I I can totally do that. um I guess just Direction wise I'm okay. with not having fun I'm minimal I mean. if the fun needs to happen one it's good. for your relationship one it's good just. for you to just if you're gonna be here. on the planet for only you know not not.

we're not all here for that long have. fun enjoy some of it but we need to get. to a good place before but and luckily. you'll get to a good place quickly. so you can swap it I personally swap I. mean I cut down my needs I cut down my. wants and I invest a much larger. percentage that's just a start of where. you can put things in. mess with it switch it around for where. you need to be okay I mean already 10 is. going to the 401K so you would only need. to technically to stick to the 50 30 20. do another 10 in here right okay but you.

can go crazier because then you can. start saving for a house as well. definitely want to max out this Roth. area every year with your age but we can. start putting money towards a house and. she can start putting money towards the. house and we can figure out what's the. house we want to get what does it take. to get to 20 right or what is 20 of that. okay how much do we need to save on a. monthly basis to get to 200 of that uh. overall house price by a certain date. and then that is how you figure out how. much money you are saving each month on. top of just over 500 to your Roth IRA.

okay if you want what's the company. match eight percent six six percent you. can lower it from ten to six percent uh. get that 100 return guaranteed and then. you can save up the rest for the house. okay and you know putting things into a. Roth all right that sounds like a plan. to me um I guess I'm just running on on. a timeline right now where those are. timeline we so we have a 13 month lease. on this appointment it was the cheapest. option and that is done at the end of. September well well real talk because of.

the situation you have to clean up. likely have the lease okay and that. that's what I needed to hear so I I'm. here for a realistic goal and realistic. timeline you guys want to purchase in. the Austin Metro uh nor the North Street. of park Leander yeah so you'll still be. in the Metro yeah so still expensive. you'll be looking probably at like a. unfortunately 120 000 down 100 to 120. 000 down we were looking at doing the. FHA 3.5 careful yes you can.

but one PMI is included so. right and two. those monthly payments for the house are. going to be higher than most people are. paying you just want to make sure it is. no higher Max 30 percent of your take. home right no higher that is the. absolute Max to try to keep it to about. 25 yeah the 0.3 gold yeah I'm gonna do. five okay uh you can but that's harder. with where home prices are here with. your income that is definitely you bang.

on right especially with the interest. rates right now yes yes that's very true. okay so with that all being said we have. the budget. um. you have the stage what do we do here. just moving forward with the plan get on. the budget immediately and start. attacking these debts as quick as you. can and then we're saving up that. emergency fund as quick as you can and. then restructure your budget to meet. your goals making sure you minimum take. the 401K Max. match and minimum max out your Roth.

array on a yearly basis beyond that our. priorities of saving up for a home or. investing more or do we want to have a. little more fun it's up to you guys okay. that sounds like a plan I I can. definitely do that okay so right now. you're in a questionable position but I. think you will be able to get to a good. place but final thoughts my my final. thoughts is I I walked in here and I. wanted this meeting with Caleb because I. haven't I didn't have Direction I had a. pretty good idea of where I wanted to be. I just didn't know how to be there. and I have played around a lot more than.

I wanted to or not wanted to should have. and I think everything you lined out. here isn't hard it's just making sure to. put the credit card down and being like. I don't need to use this right now it it. will come I am only 22. I'm not old like. you guys quite yet but uh yeah I think. he's like 22. 21. he's 21. wow there you. go I feel like us but I I definitely. think you're right. um. I I can clear this up and the credit.

cards are really pretty and they're. really fun but they're they're hurting. me so I I think you're exactly right. [Music]. that's it that's all I got so for Ethan. he certainly has had issues with. spending and going into debt and you. know having card debt at a not great. interest rate for years previous but he. is ready to start kicking some butt and. hopefully this conversation is the. conversation that was necessary to light. a fire right under it so Ethan for now.

Hammer Financial score three out of ten. but you will be there at a four five six. seven in these months to come and I. cannot wait for you to get into real. estate you'll eventually be a 10 out of. 10 and I'm excited for you make sure to. follow all the fun things in the. description like my Instagram and. Twitter don't forget to subscribe thanks.