Taking Out 3 Stupid Car Loans With 25% Interest Rates While Having No Money | Financial Audit

hello my name is uh Daniel Rivera I'm 22. years old I I live currently in Lubbock. Texas. and this is financial audit. you're 22 I'm 22. thanks for coming over. from. Lubbock but I'm already okay so 22. yeah. and yeah you look 22 I didn't think you. were old or anything. just out of the gate dude. how do you get yourself into so much. random and not good debt by 22. you're.

too young for this in my opinion what's. going on. oh you know I'm I'm here to get the help. from you you have a but why'd you go in. to the debt. um. it's it's the long process on how I got. myself into it it's just it depends on. what do you mean by that well a lot of. it's student loans uh which that one's.

reasonable but then we go through things. well I mean I'll just lay it out for. everyone we'll go to the debts. individually but I'll just lay out where. everyone is from a screenshot from your. credit karma. okay I'm gonna put it on screen as well. okay so credit card do you have a credit. card that you're trying to pay off you. have. 972 dollars in collections you have. collections of 22 already yeah you. probably. rail. what you were probably able to get you. like your first instead only four years. ago like less than a half a decade ago.

and we're already in collections student. loans yep and then personal loans we're. taking out seven thousand dollars of. personal loans in order 22 and then. we're taking out a big Auto monitor but. it says there's two in there as well so. we're gonna oh yeah and three personal. loans you have two cars at 22. oh I'm. thinking about getting a a third why. about getting a Tesla why why why. possibly oh you save on gas you know so. it's nice to have three cars three cars. it's always nice to have three cars well.

I have one car the other one's for my. mom. so. it wouldn't hurt to get another one you. know it's always an investment. Investments what do you mean by. investment. um. you know if one breaks down you still. have another you could you could drive. so more of a security measure than an. investment because the investment we're. talking about things hopefully going up. in value typically that doesn't work. Teslas they do hold value better than. other cars but usually cars especially. in a normal car market which we're. getting closer and closer to so not 100.

there yet. family dude. yeah not an investment. okay well I'm sorry I'm taking you into. you right away because I'm just like I'm. just I'm shocked by this after you heard. your age I was like okay this dude's. coming out and I was looking at him he's. like 28 30 something like that and no. I'm barely 22. barely 22. what would you give yourself as a. financial score. zero. out of 10. what do you think you are.

you know I didn't travel all the way. from Lubbock uh I'm here for the for the. help Caleb yeah. uh I know my my financial. um is not the best right now and that's. why I'm trying to fix that up. but what would you give yourself as a. score zero out of ten. I would say a six out of ten. optimistic Mr three car guy. all right so 22 did you go to Texas Tech.

I did not I actually went to a trade. school oh cool yeah very cool uh and. what did you what did you study and what. did you get uh universal Technical. Institute. um. automotive automotive. um that's starting to explain some. things okay and you you got certified in. what. um I got certified in Volvo cars so I'm. a Volvo technician oh very cool okay so. that's your job done right now that's my. job that's that's where I'm located in.

Lubbock okay very cool so what do you. bring in. um. my get paid weekly. um it's a thousand a week okay after. taxes and I'm putting away 50. wait wait. a thousand after taxes. uh no before taxes okay so 52 000 a year. before taxes okay very cool uh and then. after tax is probably like 40. yeah. around there maybe even a little less.

depending there's no state income tax in. Texas but not tax part I mean with. deductions well yeah. Okay cool so forty thousand dollars. would you wait okay. there's probably forty thousand dollars. coming in and hitting your account on a. monthly basis but you have thirty. thousand dollars of card debt and you're. about to go into more no. um. well I needed the car. uh my mom needed a car so I bought her a.

car under my credit and then I just. ended up so you took out debt to get her. a car yeah. okay what what where is she uh she's she. lives in Frisco. okay she's in the Dallas area oh gotcha. okay okay so she lives there she can't. get herself a car uh she's in a. financial uh situation as well so you. know as well I'm glad you said that I'm. just there to help her as much as I can.

yeah but you know you're hurting. yourself though to be clear. uh I do know that but you know I'm still. very young so in the long run I could. always oh fix that fix that up you know. okay I'm not gonna dig into you too much. because your friend nominated you to be. on here so you don't really know the. show too much as far as I understand. right yeah so I'm not gonna bully you. too hard but let me just let me just say. off the gate when you say no I'm I'm. it's okay because I'm young right now so. I can do this because I can get out of. it and all that kind of stuff no you're.

young right now what can happen when. you're young is dude if you were. investing just 15 of your money in the. stock market you're in the best decade. of your life for that money to compound. and grow to the point where you're. easily a millionaire multi-millionaire. by the time you are 60. you are not going to have that okay. because of where you're at so well I do. have a savings account. and I am investing a little bit well I. know on my checkings but this situation.

saying we can do this instead of doing. all that because I mean I've seen I've. seen your savings it's. not an emergency fund you know it's not. even close well I am working on it and I. just started this year I know but you. shouldn't be there is all I'm saying. yeah well you shouldn't be here you. should be there already you should. already have it oh yeah I know well last. year I got myself into a predicament and. you know I was a predicament oh I moved. out by myself and then I was paying so.

much in rent. um I didn't really think it through so. last year was was a year where I really. struggled and this year is just the year. where I'm really like trying to step it. up so overall I think so far I'm doing. pretty well. if you want to step up step up and hit. that subscribe button because we are. trying to get the 750 000 subscribers. thank you. thank you I love you so much love you so. much okay so let's just go through your. situation you give yourself a six out of. ten we know you're bringing in 52 000 a.

year maybe like 40 000 after taxes maybe. a little less all right so this first. one's a credit card there is something. I'm happy about okay. so I would normally yell at you in this. situation but. congratulations you're not spending on a. credit card that you're trying to pay. off and you are making more than the. minimum of the parents so there is. progress there so this is credit card. and we have a current balance after our. 200 payment of. 1628 and five cents.

now you lost 25.36. cents an interest which sucks why'd you. go into this debt in the first place. this credit card debt uh well I do know. my interest rate is 35 kill me yeah I. was able to talk them down to 18 still. deaf but okay why'd you go into this in. the first place though that didn't. answer the question. um. I just. I honestly don't remember how I got so.

high up in debt. um I think I did pay off some student. um. I think I paid off a class and it really. set me behind and then I used uh my. credit card to get it to get a car. okay well you know what do you mean do. you mean like the down payment you put. on a credit card yeah I used so you're. you're going into debt for the down. payment so it wasn't even like a down. payment you just put yourself well I I. did put some down payment down and I. also did use my credit card.

um I right now I am at 16 whatever. um I know it's probably after this trip. it's probably gonna be 1900 that it's. going to go up you know for this podcast. I come a long way your friend didn't. offer to pay for it when he nominated. you he's over there in that corner I'm. shaming you right now. okay he nominated you and he's not. paying for it oh and we're trying to get. you out of debt okay well again I am. glad you did not uh put any more money. on this but okay we have that I'm a.

little nervous. okay. I'm a little nervous that you're like I. don't remember why I went into bad debt. because if we don't know why we went to. it who's gonna say we're not gonna get. into it again I understand the down. payment part for this specifically yeah. but you said though you said those words. well I have been paying it off and I've. been doing better no that's fine that's. fine but you said you don't know why you. got into the debts in the first place. yeah that scares me she's not even able. to just like. straight up acknowledge what the.

situation was going into it how is that. going to prevent you in the future from. going into it again yeah. um. well I did this year like I said this. year I'm I am doing a lot better with. financial wise and I know I have to pay. off that card and I'm not even using. that card right now. oh no I know I have until September to. pay it off are you hearing what I'm. saying though oh I'm I'm okay because. you're just you're like responding to. like a different question. like I'm nervous that you do not know.

why you went into the debts because that. means you might go into it in the future. regardless if you're starting to make. progress towards it now in terms of. paying it down yeah regardless if you're. putting money on the card still. well. I do understand that but this card is. not helping me in any way I don't get. anything back it's just it was my first. credit card. so I'm not gonna use it after I pay it. off okay. uh okay.

um. something else the this has to be the. car what is the vehicle what is the car. uh there's two cars which one are you. talking about oh okay the one that you. financed nineteen thousand dollars for. okay so that one uh that's the Scion IEM. it's a 2016. I don't know that car is. that a nice car it's kind of expensive. for 2016. yeah I know the prices I'm pretty sure. it's overpriced dude you're a car dude.

oh yeah you should know that right it. was just all right what. what it was just my my mom really needed. a car this was your mom's car so that's. the car yeah dude you what. 2016 watt Scion Scion IM it's the last. Model they made that means it was. obviously a good car or it is a Toyota. fair enough how much did you put down. for this one. I think it was two grand.

yeah I mean so you you over bought it. but honestly not by that much from what. I'm seeing online. in terms of what it's being sold for. uh well like it depends the source it. depends the source obviously but seeing. like. some places can have it listed for like. 20 within like 15 000 for private sale. and stuff like that so well I do know. the interest rate on that car is 13 yeah.

it's death it's absolutely definitely. didn't get to that yet okay so mine. needed a car to get from A to B right. yeah just to get to like a location from. her place yeah so that she could work. make money and then you know take care. of herself hopefully right yeah of. course why did it have to be a 20 000. car oh that's the cheapest they had on. the lot okay off go to a different. lot. Car Guy. well I was in a tight schedule okay okay. so was that tight schedule with work. worth twenty thousand dollars with two.

thousand dollars down with 13 interest. rate did you really make that money up. by keeping your tight schedule well at. the end of it I'm not really paying for. it Mr Hammer my mom is. I've never been called Mr Hammer it's. very nice your mom's so she's paying you. for this yeah she sends me the money for. it okay. that you know that's inherently risky. though I'm glad she's paying you for. this why couldn't she get her herself if. she's paying for it is her credit score. just her credit score is not that bad. but she is in the process of trying to.

get a house. okay this is in the process of trying to. get herself a house but yeah she wasn't. really willing to get a car for herself. well if she gets a car it's gonna risk. the chances of her getting a house. so this is why I helped her out get that. when did she want to get the house. uh this October. or in August it would have a hard.

inquiry it would lower the age of her. credit and it would also uh decrease her. debt to income ratio yes. and also at the same time show that she. is making reliable payments but I don't. know her credit score because she's not. here she's not the person I'm auditing. yeah but you did take this. so inherently risky because what if okay. I'm gonna go straight up sad situation I. never wish this for anyone but you know. yeah what if she dies you still owe this. it's under your name or what if.

something happens sour relationship boom. it doesn't have it what if all of a. sudden she loses her job and she just. can't afford it then you're paying for. it there's a lot of what-ifs that. increase the overall risk scenario you. took on the risk oh right now I'm not. thinking of what ifs. you know. okay but you're not willing to think. about risk. for anything. do you do everything just risk well I do. think about it but this is uh. you know I'm not paying on it she's the.

one well you are but she's paying you. for it but a lot of things could happen. oh okay I'm not even trying to tell you. you're a bad person for this or anything. I'm just trying to get you to understand. the risk and you're not even. understanding the risk behind it do you. get the risk I do understand the risk. um I just. and this just happened and it's 72. months so you're dealing with this until. early 2029. this is something you're dealing with. until 2029 not if uh she could put more.

money into it yes not if is she going to. Mr not dealing with what-ifs you know I. kind of just live my day uh day by day. sure think about the future and think. about the future I do think about the. future but I live my my life is I live. it day by day yeah yeah so I try not to. stress as much this is why I'm on the. podcast it's okay not to stress it's. okay not just I don't want you to stress. but I want you to at least think about. things and then you know make a plan. like an adult right so we can do that.

without like getting like freaked out by. it. okay yeah so with this I need to know. the monthly payments the minimum monthly. payment. 384. now a good way to wait without cars and. this is for everyone out there if if. that is the way to go into a car though. I would prefer there's many things I'd. prefer for the average person probably. just buying a car in cash. possesses better overall uh for those. that are financially Savvy buying a car.

well if you're not financially set you. can't pay uh car in cash you know and. that's that's what that's what the. problem was so I helped I'm going. through the different situations for. those who can and I can help most people. get into the place where they can buy in. car cash would be great for the. financially Savvy you know three percent. interest rate if they could or less and. then invest everything else that was. going to go to the car that minimum. monthly payment sales paid off for three. years or you could do the money guys. roll there and other very that are a. popular show who I love I watch every. single episode they put out on YouTube.

um I always forget the name of the rule. but essentially the rule is 20 down on a. car. for three years a three-year loan. and eight percent of your total gross. income if you can't meet those criterias. and you cannot afford a car and you have. to get a car that is worth that by. looking at more than one lot. okay let's say this then. what about after she gets her house yeah. she could buy that car off of me from on.

her credit yeah sure that was the plan. to begin with that'd be good again there. is risk around it that doesn't negate. the risk but. um if we get to that situation and she. does that I mean that's fantastic. because it is her car she should have to. deal with it like the adult she is and. not her kid. I understand that you wanted to help I. love the big heart I'm not critical of. the big heart I I am here to make sure. you're in a good place because you're. the person on the other side of the. table so I'm only dealing with your.

financial situation trust me love the. heart but I want to make sure you are. financially safe and taken care of yeah. that's the main thing. I appreciate that you get that yeah okay. so moving on to the next. dead. this must be the other car yeah 11 700. uh four dollars yeah. and what is this car uh 2016 Ford Focus.

Ford Focus yeah okay how many miles. it's at 103. would you get it uh same. time I bought the Scion so this is new. as well it was a two-for-one deal pretty. much that's what they told me what a. deal you got I know right I didn't know. I got screwed over till the end you're. the car guy you know what I was crazy. than I did I was very pissed off at the. situation I was ready to get out of. there you can't let that those emotions.

man yes now it's now it's gonna be. beating you down for years so let me. guess you also got like 72 months on. this well he yeah. um I could probably pay it off way. sooner what is the term though. is it that 72 months ago. I don't know. what's the interest rate. well I got the car for nine five so I'm. pretty sure the interest rate is on or. on there already 9 500 yeah. half eleven thousand dollars.

I don't know dude. is this the car yeah that's the car you. don't know the interest rate we know the. minimal monthly payment is 312 dollars. now I know you have credit card because. you sent me a screenshot yeah can you. open Credit Karma from every cook I. should be able to at least see on there. Credit Karma yeah okay the 972 uh. collection that's a medical debt.

okay we'll talk about that in a second. which is no reason there's not that's. not paid off at this point whatever. I haven't seen this in a long time. you win the got the ward 20. 4.39 interest. I want to understand kind of just your.

education in general around personal. finances. not the best. uh were you taught in school personal. finances parents. no my parents really aren't that good. either yeah financing I can yeah because. you bought her a car and took out 13. interest debt on that. your friend it's even teaching you. have you been trying to learn things in. YouTube. like this is a great platform for a lot.

of things well I do plan on refinancing. later on and lowering the interest rate. yeah. I think that's a minimum. if we're keeping it and it is 72 months. of death my dude you can't afford either. of these cars the way you're doing it. and again you just started it so. um let's take a look at that collection. and. okay good news is well except for the. collections you pretty much make.

everything else on time which I'm happy. about that okay that's the credit card. there's the two car loans there's a. couple things that I did not see which. I'm. concerned about the Snap-on and the. macko yes yeah so collections what was. it was for medical debt yeah what. happened uh this is when I was uh living. in Arizona I was not working at the time. I wasn't feeling well. what's up are you okay well yeah this. was back in last two years ago this is.

something that might flare up a gun no. okay so you're all good taking care of. yeah cool. um why have you not paid the sense now. that you're making 72 or 52 000 a year. because I'm trying to pay off my credit. card off first okay do you care about. your credit score though so you can. refinance your car potentially. paying off these collections would be a. major win for your credit score or like. at least dropping it to half of that. well because the minimum they can't. really report your collections on credit.

credit on medical that if it's less than. five hundred dollars okay you could also. probably just negotiate with them and be. like yo I did try to negotiate with them. tell me they did not want to drop it by. a lot they said 890 no of course not but. so was that it one phone call one phone. call okay no this is how you do it uh. once a week once every two weeks call. them up hey all I have is 500 bucks take. it or leave it no okay. next week oh all I have is 500 take it. or leave it no okay actually boom boom.

boom until they accept that then do it. how long has this been on your credit I. believe since last year okay so we're. definitely not gonna wait for that to. fall off that would be ridiculous. what were these two other debts where. were these two other debts that we just. saw what was that the Snap-on those are. tools I use for work. it's paid off. it's paid off it's paid off why did I. see a balance on your credit because. it's not fully updated yet okay and what. about the other dot oh the macro oh. that's horrible you don't want to know. about that one I'm gonna need to know.

about that one. that one is an 18 interest rate. um the toolbox itself was six thousand. five hundred. um right now. with the interest rate accumulated and. everything the box came up to nine five. you own nine thousand five hundred. dollars oh yeah I'm getting. yeah you are. yeah you know what my boss told me. what'd your boss tell you he said might. as well put a bill on it because you're. getting in that. all right and what's the minimum.

depending on nothing. 18th uh minimum monthly payment is uh. 180. okay. so we've gone through the debts right. that's all the debtsters there no. there's the student loans. are they Federal private what are they. I think they're private. are you paying on them right now no I. don't have to start paying off till. October okay because they are federal or.

they deferred to private who are they. with pull pull it up again. I'm guessing they are federal but we're. about to see. yeah Department of Ed with AVM okay very. good so this is federal so we have with. the student loans. uh you can have that back thank you. twelve thousand dollars and it's likely. hmm. guessing about a hundred hundred fifty. dollar minimum monthly payments 125.

you've been pretty good at guessing. those. suggesting more towards the range of 150. starting in October because yeah. uh not the date the recording of this. video but it just got uh struck down. today did you see I did not see okay. yeah the student loan forgive this. officially not gonna happen. and it's likely ranging from four to six. percent interest on those. [Music]. you have 540 then okay it's a okay.

enough buffer usually I like to see at. least closer to one to two thousand but. that's okay. and. a lot through here you clearly having. acorns and you paid the three dollar. subscription for it yeah by the way free. five dollars if you sign a free coins. using my link in the description below. let's go. that though your withdrawing constantly. from your acorns. later. which means you're also putting in that. their later account is usually an IRA.

you're paying a 10 penalty when you. withdraw that what are you doing but I. don't plan on withdrawing anytime soon. but you no no. oh congratulations guess what we all. just learned that I. am the idiot right now. because that whole time I was viewing. negative five thousand negative five. dollars I was like why are you. withdrawing from acorns and put it into. your account no that's okay I'm happy to. see that no you you did well on that I.

had a complete complete brain collapse. during that so no those are good I'm. happy to see those. Red Robin not throw the seed because we. have. 18 debt 25 debt 18 debt 13 debt and then. six percent debt with student loans and. yet we're deciding we're gonna go to Red. Robin because those burgers and. unlimited fries and halfway decent root. beer floats on this prize you can't beat. that you know uh I'll tell you I can. beat it 25 death interest rate so tell.

me right now I need to know before I go. through those is Red Robin and their. bottomless fries that aren't that good. fries by the way and the burgers are. kind of trash better than the in and out. that you had in here because that's like. kill me now when it comes to food but. what is that more important is that. possibly more important than your. financial future I need to know. uh no. okay so why in your logic now I know. we're not the most financially educated. here and that's why I'm you know I'm I'm. making sure you understand the gravity. of the situation that's why I do the. things that I do here so you truly know.

because it is absolutely. uh well I only eat out once in a while. just to treat myself okay Red Robin and. new creation priso and zelin money out. twenty dollars you know so that when in. the Richmond Benjamin an in and out. burger death you may as well at least. eat food when you're trying to put. something in your body cash app and out. five dollars Whataburger and what is the. oh the Snap-on credit was the thing you. were paying off and okay that's paid off. and the Bolton services. and raising canes and Headhunters and.

snap and Johnny. uh Estes and that's the macro I'm paying. off on oh okay and Chick-fil-A and. Wendy's and McDonald's and McDonald's. and you got some more tools and apple. cash sent out 30 who knows where that. went New Creation Raising Cane's Dutch. Bros. Whataburger South Plains lanes and. Whataburger so yes you do not go.

absolutely crazy but you've done it. twice a week I stopped doing that and if. I do it's it's. I'm making sure I still have enough at. the end of the month well no no you have. an office at the end of the month. because you have 550 but why are we. eating out at all when that money should. be going to 25 death debt right yeah so. I want to know the logic from the mind. of not knowing what's about personal. finances which is totally okay by the. way. and yeah good job being here and you.

know your friend convinced you to come. on like you're taking the first step. like it's absolutely fantastic I you. know I I definitely want to praise you. for that but what was your logic at the. point of. okay I have terrible debt let me go to. Whataburger the only way I could explain. it is that I was hungry. okay and you don't know how to make a. sandwich. uh I do but it's just I don't think I. had any groceries for that month and I. just decided for that month.

oh that. that crazy idea of going to the grocery. store yes. um if I do eat out it's not a crazy. amount that I'm spending on eating out. although the logic behind it while you. have the 25 death debt that you could be. paying off quicker if we prioritize. where the money was going. do you get that is this coming through. oh yeah okay because.

you just try to justify it by saying you. didn't eat out much and you didn't it's. only a couple hundred bucks but imagine. if that couple hundred bucks was going. towards that's almost doubling doubling. your minimum monthly payment on your 25. interest car. you're paying it off twist is quick. and then you have subscriptions looks. like uh some annual subscriptions that. came through we don't really want to. have subscriptions unless they're. benefiting us necessarily right now at. this point so I don't have to eat that. kind of stuff yeah.

so yeah now you do have a high yield. savings account with American Express. I am happy to see we have 866 dollars in. here it's not much well but I did add a. little more good what's that it's right. now it's uh at a thousand sixty six. again not much for a savings certainly. not an emergency fund but that is you. making the step towards at least trying. to have something which is great so you. know definitely like high five for that.

I I will say this doesn't make the. biggest difference in the end but I just. got to give it a call out because I. personally use them and everyone always. asks what I use you're getting four. percent. you can get 4.3 percent with so fine I. use so fine Link in the description. below give bonuses up to 250 when you. sign up so I mean. that's pretty good. but four percent I'm also happy to see. that so you have nothing to stress about. with that. is there anything else. that's it.

you said you also have an investment. account I'm guessing this is a 401K Roth. IRA. it's all part of the acorns it's a Roth. IRA. how much is this there. can you open up here open up your acorns. real quick it's not that much that's. okay a lot of your you know we just want. to get everything down on the paper uh. and see where you're standing and I'm. glad that you know it was just like five. bucks here five bucks here wasn't crazy. you're starting to do something. so yes in your IRA basically 200 and.

then in your just traditional investment. account 300. um so we are going to stop doing that. for now because you're not getting any. kind of match through a company so. even if you're getting like the S P 500. historical returns with dividends. reinvested of just over 10 percent. that's still getting absolutely. obliterated by your 25 interest rate. debt so if we pay off that 25 interest. rate debt but you know we immediately. get that 25 return on the investment of.

the cash you're putting towards it yeah. which beats 10 any and every day so. we're gonna pause this and there's. really no point of you having that. traditional One open I would just put. everything in your IRA. uh especially if it's a Roth IRA because. that's at least growing uh to the point. where you can pull from it without. having to pay taxes on it when you. retire but we can't do that with the. traditional but of course the. traditional you can pull from penalty. free but you will have to pay taxes on. it at some point. okay going into this man.

how much do you care to get out of this. situation. like where are you on the scale of just. ready to get your together and live. a better life I'm ready yeah I I've this. is the year where I'm trying to just. step it up it's gonna be more than a. year. yeah fair warning and well I have a plan. for next year and I'll just hear your. plan before I do my plan uh move back. home really yeah very interesting and I.

mean obviously there's Automotive. opportunities in the Dallas area yeah so. no issue there uh specifically just to. save money or just want to be close to. family as well. it's both good I. when's your uh lease up. so listen to this I'm actually under a. contract at my job. so I'm technically not allowed to leave. until that contract is over which is. which is in September uh February of.

next year that's not bad. that's fine. if it was for a couple years I was like. okay what does it take to buy out well. yeah I completed a whole year there. already and you know the first year I. moved I moved to Lubbock I was like oh. my god I've got a big boy job let me go. ahead and just start spending and that's. what happened so I'm trying to get. myself out of that hole. well I yeah yeah we'll get you out of it. so you're gonna be here until February. then or there until February yeah yeah. what's your rent right now let's build.

your budget uh my rent right now is 650. a month. uh not including utilities then. utilities what do you pay. roughly estimate a month I'm paying 750. a month on utilities and rent all. together oh okay. so an additional 100 for utilities wow. rents cheap over there that's nice oh I. got a roommate now even still. so that's good. oh let's add up your minimum monthly. debt payments.

this one's about to hurt with the only. good thing about the long-term links. with these is the minimum monthly. payments aren't going to stack up and it. will help us attack certain things. quicker but that's not what we want to. do and. General typically. yeah this one's hard for your situation. minimum monthly payments for Dad dude is. one thousand seventy two dollars.

now I know your mom gives you some money. so we're going to put that into your. income situation but this is included in. your budget technically she only gives. me half of what the car monthly car is. because I'm pretty much paying for. insurance as well and then my phone bill. so it's not she's not giving me the full. amount on the on the car payment she's. only cutting it in half and then I pay. the other half. because she's pretty much paying for my. insurance so that's what she takes. paying the car insurance yeah.

okay. and my phone bill so you do not pay for. car insurance at all no no car insurance. okay. do you have health insurance is it. through work it's through work good. which is taken out before you get your. nets pay. so that is good congratulations no more. Whataburger I am putting let me say this. I am putting fifty dollars into a. Christmas fund no every week no.

absolutely not. sorry Christmas is canceled well I do. get that money back at the end of the at. the end of the month or I could request. even whenever I want what do you mean. where's it going it's going into the. Christmas fund that my job has set up. and I I. that's stupid we're using every single. Cent right now to get you out of 25. interest rate death. Okay so. again congratulations no more water. burger no more endless fries it doesn't.

exist. it's been canceled. [Music]. you are spending 300 a month on. groceries. not a cent more. for toilet paper toothpaste all the good. stuff needed to run your household and. life. hundred dollars. [Music]. gas you spent. about 150 bucks does that seem normal. for you yeah.

obviously that changes with price and. you adjust your budget accordingly. accordingly for where the price of gas. is but we're just trying to get an idea. of where money is left over. renters insurance probably. 10 bucks I love that no I don't pay that. that's illegal. hey that right well I think it's. included in I think it's included. already no. it's not. download lemonade or something that's.

what I used. download the lemonade app get yourself. some apartment insurance it's against. the law at least in the state of Texas. my roommate takes care of that the. apartment's under his name you need your. own renters insurance. I think he did set me down for it. if it's full you're not on the lease at. all I'm not on the lease they didn't. approve me. right. well when I first moved moved they did. approve me when I first moved to Lubbock. I was living on my own.

they did approve me at that time but I. guess this time they did not want to. they said because of the collections do. you have any medical issues no any. mental health issues no okay so we don't. have to take those into account on. healthy basis I encourage everyone to do. therapy but. that's. um well you know I get depressed here. and there but that's why I hit the gym. okay you know I'm definitely I'm sure. you want to swap Financial places I want. to swap physicals deep spaces over here.

I would love to get rid of that dad bod. life okay. any other minimum the expenses that you. can think of in your life no. subscriptions do not count you are. canceling them all okay. with subscriptions were you talking. about because I don't know any. subscriptions you have Netflix or Hulu. or anything like that right okay. okay yeah. done done Jim you pay monthly for a gym. how much is that uh 15 a month. not bad.

and obviously we're certainly keeping. that up that's something we would never. cut. cool so I think this is your budget then. 650 for rent 100 for utilities debt 100. 1072 dollars food 300 total paper. spending and everything else needed to. survive the household 100 gas hundred. fifty dollars gym 15 anything else you. can think of last call. uh are you including everything I'm. paying off as well no we're about to do. that separately okay.

that's just your minimum monthly debt. payments that we had in there at 1072. so minimum in order for you to survive. survive. would be two thousand three hundred. eighty seven dollars. I want to get a more accurate number on. what came in. uh three thousand and sixty dollars. three three thousand sixty your needs. which is 2 387 dollars.

is. rounded up eighty percent of your income. your needs so because you've probably. never heard of these things. um. 50 30 20 rule it's a relatively easy. basic rule you know if you want to start. thinking about taking personal finances. seriously of the money that comes in. fifty percent is the cap of your needs. everything that you need to survive. living food all that stuff cap fifty. percent. should aim then for twenty percent.

go into savings investing. mostly investing but you can also save. for you know do that as you know. emergency fund getting that treasury. emergency depending that towards uh a. house as well. then once when out of debt. it could be thirty percent of your. income and that's your unlimited fries. that you love and adore. you're not in that situation yet but. again your needs eighty percent. of your income Okay so. of the three thousand sixty dollars that. comes in at the two thousand three.

hundred eighty seven dollars you have. 673 dollars left on a monthly basis that. is what's left with the 1066 that's. sitting in there for two months we're. saving as close as we can to two. thousand three hundred eighty seven. dollars in your high yield account so. what you doing because you're following. this budget and no money spent outside. of the budget if you want to have fun. your friend can take you if you want to. have fun go on dates they can pay for it. there is no fun money that you are. spending you can go have fun for free. but you are not spending money. I'm not gonna give you any wiggle room. I've started to give some people wiggle. room you get no wiggle room because it's.

not our money a lot of not a lot of. money left over as your needs are eighty. percent so you get to that 2 387 in your. high yield savings account then boom you. have a one month emergency fund in case. anything happens. so that is two months after that. I think we're gonna let the collection. sit for a bit. what we should do I think we attacked. this and. okay the car situation with your mom. you're not gonna like this you are not.

gonna like this but this is what you. should do and will do if you want to. better your life. she takes out a car loan to buy from you. because your future matters and she's a. big girl she can take care of herself. and if it this will not be what makes or. break her getting a house. it will not be. well she's the only one working right. now uh then we we have half brothers and.

sisters okay but my sister you know. she's 19 but then I have two younger. brothers she's still paying for it. through you so she can afford to do it. and then take on your own car insurance. well Carter it's time to be a big boy. okay time to do the hard things because. your future matters it matters if I'm. not able to convince you that your. future matters in a way where you deal. with this most basic thing then there's. no there's no hope there's no hope flat. out like what's the point.

there's always hope okay all right I. mean come on are you not willing to do. this the most basic thing necessary. to improve your overall security and get. that debt out of your name. 13.06 that's the plan but you know uh. she's trying to get a house like I said. I think that comes first I this this. should not make or break that what's our. income. it'll change your debt to income ratio. but.

what's our income. into the mic please. uh about. four four grand a month and you said. she's the only one making money is your. father with her or does she have oh my. dad is disabled okay does he get. disability yeah but it's it's not that. much no it's not that much but. she's trying to get a house in the. Dallas area. but in the outskirts of Dallas and Jim.

yeah. okay I'm trying to be a little flexible. we just don't pay attention to that. right now pretend it's invisible other. than making the minimum monthly payments. and then the moment she gets that house. moment she gets that house she takes a. loan out and buys the car from you and. that is not an option. okay yep. from your situation okay the credit card. 45 a month well it's at 18 anyway I'm.

trying to think of the Avalanche method. makes more sense for you or the snowball. method I think psychologically the. snowball method will help you Avalanche. method is we're paying off the highest. interest rate debt and mathematically. speaking that. lowers the amount you pay in the long. term versus doing the snowball method. but snowball method does have. psychological uh benefits of seeing that. you're making progress. I think with the 675 dollars the credit. card starting in month three at this.

point. two and a half months the credit cards. paid off credit cards done no more. credit card yeah that's exciting yeah. then cut it up because you're probably. not a credit card person either nope. uh what do you I don't think you added. up the macro box on there of what I owe. left and I did send you a screenshot of. it is there another one there's another. debt I said is there anything else yes I. know what I thought you meant utility. wise or no in our Basics or anything so.

there's more tools besides the 9500. the tools is paid off I did send you the. macro um you said you owe 9 500 for. something is that this one. yeah I believe so okay so we do have. that included then. okay confirmed yeah confirmed oh SEC. okay very good I just wanted to show you. [Music]. this is a different number in different. minimum the payment man is this. something different it's the same thing.

it's just on my credit report it shows. differently. but this is I don't know why but this is. what this is what I owe right here. okay so you owe seven thousand six. hundred eighty three dollars on this. minimum monthly payment not 180 72 45 so. your budget gets slightly adjusted for. that. well the monthly payment is like 40. bucks a week. it says minimum due 72.45 that's that's.

that's because I'd missed a payment. earlier. no the thing is it doesn't show till the. end of the month that I have to pay it. off so yeah. so roughly it's around 160 bucks a month. that I have to pay off for the box for. the toolbox. it doesn't change the situation that. we're talking about now but. okay so 6 and 93 is left over the way.

the credit card is what you pay off. after two months two months you get. yourself to a one month emergency fund. then you pay off the credit card by. putting 693 on a monthly basis for two. and a half months okay so we're four and. a half months in yes. are we on the same page yeah Okay cool. so from there you get an extra forty. five dollars now in your budget because. a 45 minimum thing payment on your. credit card does not exist so 693 plus. 45 you now have. 738 dollars that you can put towards. that and you're not using that to go get. unlimited fries so at four and a half.

months in let's call it just for the. sake of wiggle room saving up that. two-month emergency fund and just. getting into the habit of things or five. months in on the sixth month. what do we go towards the next we're. leaving the collections for now. student loans with where they are. I think we go when we hit the tools. seven thousand six hundred eighty three. dollars it'll be a little less of the. time but just for Simplicity. divide that by 738 dollars I think we.

know where this is going it's going to. be about 10 and a half months. 10 and a half months of that okay does. that make sense so far yeah so we're 15. months in 15 and a half months in we'll. give us a movie room say 16 months in. and you have the credit card done a one. month emergency fund and you've paid off. the death tolls. cool with that so far that's cool. probably taking longer than you expected. right yeah yeah because you do not have. money so what I also recommend through. this process. work some side jobs dude anytime you're. not working go work and make money bring.

it in because that cuts this process in. half if not more. what what what possibly go on you know. I'm I'm honestly I already work 50 hour. uh weeks so I'm trying to get. congratulations to work in 70 now. [Music]. what matters more your debt or that no. I'm just trying to get that pay bump and. then I. I enjoy my weekends off you know.

congratulations do you enjoy 25 interest. rate yeah the thing is it's very hard to. find side jobs on the weekends. Uber Eats around campus oh man I'm not. gonna put miles on my car. I've tried doordash I don't like it what. don't you like about it I don't like. putting miles on my car I don't so you. don't have okay I'm not gonna do that. uh coffee shop Jimmy John's Subway. something McDonald's I don't give a.

bring in more money dude you simply. double the 738 dollars that you have. left on a monthly basis and the. situation gets cut in half you realize. that yeah. that's chill dude work a couple shifts. on the weekends. simple okay. 15 and a half months. 16 months again just for the sake and. you now have an extra 160 dollars left. on a monthly basis and hopefully you. will have gone and raised during this. time or anything.

well 15 months okay so this is this is. where this is where it gets complicated. because in 15 months you're maybe home. now. with a different job with a different. income. [Music]. what's the job situation gonna look like. there are you gonna do the same thing oh. yeah. okay. so income will probably be pretty. similar no it'll be higher. in that situation hopefully we start we. can really start moving things because. the rent of 650's gone utilities are.

down you're living with uh Mom and Dad. right very cool from there anything and. everything you have man. just gets thrown at your car anything. and everything gets thrown at your car. and you pay that off as soon as you can. if you have an extra thousand dollars a. month maybe a thousand five hundred. dollars a month at this point you know. maybe takes seven to ten months so we're. you know we're like What two and a half. years now something like that. and that's going to be a big help. without those extra expenses and.

potentially more income so that's going. to be good it's gonna be good. which you know it's hard. and I'm not very optimistic from this. conversation I'll be honest but that's. okay hopefully you hopefully the the way. the reason I dig in and go so hard is. because I want to make sure you. understand the severity of the situation. because so many people come in they're. like yeah this is bad or yeah this isn't. good but it's not that bad either uh see. what's bad so that's why if you fully.

realize how bad it is that you're. willing to actually go sacrifice. and dude. turn your life around from there you. probably have the six thousand dollars. of your student loan debt is probably. higher than four percent I would pay. that off as quick as possible and then I. would do minimum monthly payments on. your four percent or less interest rate. debt until it's done but if you want to. keep the momentum going you can just pay. that off too I think it's going to be. about three and a half four years. depending this whole thing depending and. that's with you moving home and having. slightly more income and not having the. rent.

so. let's try to get that to like. what what did I said what did I just say. four to five years uh you did say 45. years I'll try to get that to like four. years yeah well let's try to get that to. like two to three then by going and. working making more money man somewhere. else you don't need weekends right now. you don't. it's Lubbock what are you gonna do roll. around in the sand. get stung by a cactus come on it doesn't. matter go uh good one I know I'm.

hilarious go just do work your man. because if you can get this taken care. of by the time you're 26 you still have. the times on your side for investing 20. and becoming a millionaire. multi-millionaire by the time you retire. that's great you stretch this and. remember everything I just gave you is. the sacrifice version you don't. sacrifice you stretch this to 10 15. years man then your retirement's in. serious doubt because you only have a. thousand dollars in there at this time. or whatever it was.

no it was less than that was like 500. so you know at that point you're dying. on the Walmart floor because you never. had compound growth on your side you. never had time on your side. so that's why I say give up your. weekends now so you can have a better. life. yeah it's it's as easy as well it's. easier said than done every day but the. overall Grand scope of it is as easy as. that now it's just you. and you know you determining whether or. not you're actually going to do that.

future it's your choice no that was my. plan to get a weekend job. and I'm still I'm still kind of in the. search but I kind of laid it back so I'm. gonna get back into it yeah and just. take anything it doesn't matter it. doesn't have to be a dream job. first and then while you're in look for. the one that's better and then take it. when you can. well you just need to get more income. right now because just the extra you. know Fiona bucks we have to put out it's. gonna it's gonna take too long to make. progress yeah and this is with you. cutting back on everything now.

on the optimistic side if you do this. three four five years whatever it is. because your living situation is going. to change we don't know what things are. looking like there it'd be much more. concrete to find New Year stay in there. or where things were going to be either. way. at that point then you follow for the 30. 20. when you go get your own place and. everything at that point all your needs. combined never more than 50 of your. income you're always investing 20 of. your income whether that be maxed out or. Roth or a something a 401k or Roth IRA. and then uh into like any individual.

brokerage depending what the workplace. offers how much would I put into savings. well savings for what oh actually I will. say that sorry hopefully this doesn't. confuse you you can watch this back and. see it I did forget after you pay off. the debt you need to figure out what it. takes for you to live for six months and. save that up remember we had a one month. emergency fund yeah you're bringing that. to six after all the bad debts are paid. off. or if it's below ten thousand dollars. because you're living at home you're. doing a bottom of ten thousand dollars. just in case anything medical or car. related happens because those tend to.

stack up does that make sense. and then savings for other things like. houses and stuff just saving in general. yeah so just Savings in general yeah. well what is a four you already have a. fully funded emergency in front at that. point what are you saving for. I just I just like to save okay save but. in an account that's giving you returns. like the stock market that's fine 20. putting it in there you can save up on. the side is what you could take five.

percent of that start putting it towards. a house fund I don't want any less than. 15 going so on my American Express. Account how much should I be saving into. that account how much should I be. putting when you're out of debt or now. now remember we're only getting to one. month emergency fund which is 2387. once. use aggressively save for two months by. having everything go to that then you're. done you're paying off the entire. interest rate debt in the order that I. talked about. and then once all the high interest rate. debt is gone then you save up a six.

month emergency fund and then you leave. it there you never touch it unless an. emergency occurs. okay and then everything else stock. market house fund that kind of stuff we. definitely want to at least max out the. Roth IRA on a yearly basis at a minimum. that should be just like a basic. requirement which right now six thousand. five hundred dollars a year which is. easy relatively easy on your income if. you manage your expense as well. and we just paused because people are.

doing loud things outside yeah you said. you have another card that you're. consider and selling what do you think. you can get for that car right now I got. an offer well I was hoping to sell it. for 2500. okay. um yeah dude if you get that. really gets you to the one month. emergency fund plus an extra thousand. dollars that you can put towards the. card and then you only have 600 left on. the credit card that's awesome. do that immediately I would just take. that offer and just like it's done.

honestly just so you can start making. progress man because. just with the other people who've been. on the show who've been sending me. updates via uh email and everything the. moment you start paying off some of this. dead man you're gonna get a when. you see that credit card is done you're. gonna get a fire under you and you're. like all right now it's time to go kill. that next one then you're making. progress online you're like yeah let's. go let's go let's go it's gonna be like. when you get hyped at the gym and you're. just making progress man yeah you're. gonna be seeing that towards your debt. and you're gonna get hype about it and. you're just going to want to kill it.

in a good way. so yeah do it take the deal unless you. think you can get substantially more for. it. no I definitely cannot okay then yeah. take it take that offer be like. take it. um so yeah I mean some some of it's a. little three four five depends on the. moving situation where do things look. like but at that point 50 30 20. once. you have all the bad debts paid off and. you have a fully funded emergency fund. 50 percent.

needs. 30 on wants twenty percent non-saving. and investing do you think you could. write that down just so I don't forget. it yeah absolutely yeah we can put we'll. do some notes on like your notepad or. something uh and then of course you can. always watch this video as well so I'm. happy to answer any questions and then. you can stay in touch and we can talk. via email and text or anything like that. as well. um no absolutely because I want to see. you make progress man I want to do a. follow-up with you at some point maybe. when you move to Lubbock or move from. Lubbock to civilization again and you.

know that'll be exciting yeah the only. thing that's out there is Texas Tech. yeah yeah. so. and I actually think it's a very fun one. because I didn't go to YouTube but a lot. of people around here Love YouTube and I. I think it's pretty fun when Texas Tech. beats them and then they all freak out. and get sad and I'm like. um but either way. we'll do an update that card should be. gone you should be making progress. towards the toolbox if not the car you.

should have a one month emergency fund. and in October of this year you're gonna. text me when your mom closes on her. house you'll be like all right she. applied to take out uh the borrow to get. the car. honestly you know to be completely. honest if she's watching this you. shouldn't be getting a mortgage anyway. right now if you have a tool a 13. interest rate debt on a car even if it's. through him you shouldn't that's stupid. that makes no sense you're not going to. beat that with the housing market and in. like averages across the board of. decades so pay that off first.

and then get the house. she should sell this and get a 10 000. car is what she should do actually but. that's a conversation with her. whatever yeah that's something I don't. really want to bring up because that's. that's her car except guess what it's. not legally it's yours you have the debt. you have the title so. I don't have the title yet because it's. not paid off oh right that's different. per state and I guess when I'm from. Michigan you get the title even though. you have the debt but yeah here in Texas.

the bank holds it either way whatever. whatever whatever that's what she should. do you should have the adult. conversation with her I can't force that. the relationship is what it is. knowing yourself man knowing yourself be. as honest to us the audience me as. possible what are you actually going to. do what is it going to look like going. forward from here get a second job work. my off. that's the plan. okay I'm really trying to pay off that. credit card off first that's like my. first step and then from there you know.

yep one month emergency fund I'll say it. again one another emergency fund credit. card. toolbox. your car. the high interest rate student loans. then the collections and a fully funded. emergency fund then 50 30 20. let's go okay for Dan it's gonna be a. hard situation to get out of and he. really needs to sacrifice and it's going. to take a lot I'm not overly optimistic. from the conversation especially the. first half of it now he gave himself a.

six out of ten uh I know he hasn't. watched the video so he probably doesn't. know how my score works but it's not. going to be a six out of 10. for his. spending within a budget you know his. Penny wasn't insane but he shouldn't be. going out to eat while he has that death. 25 interest rate debt so it can't be. better than a one out of ten the debt. itself it's almost as bad as it can get. you could have IRS debt which is you. know terrible as well but I mean this is. absolutely death death so zero out of. ten retirement glad he at least started. with an acorn switch again Link in the. description below for a free five. dollars but.

it's you know obviously drastically. behind one out of ten emergence fund he. has started but it is obviously not all. the way where it needs to be 2 out of 10. real estate not even a part of the. conversation probably not even part of. the conversation in the next decade but. zero out of ten for now Hammer Financial. score for Mr Dan one out of ten for the. resources that I use or would use in. specific situations I've linked those at. the top of the description below you can. get things like free five dollars. signing up for acorns that are really. high yield savings account through so.

far and many others like educational. resources as well don't forget to follow. my Instagram and Twitter thanks.