When His Numbers Are A Disaster | Financial Audit

This Chris, 32 out of Austin Texas, financial [music] auditor. Beautiful. Thanks for coming on out of. Austin. What do you do here in Austin. for a living? Uh I cut yards. Oh, very cool. Landscaping. Awesome. Uh hmm. Okay. I don't want you to tell me. exactly where for privacy reasons, but. if we're going to talk north, south, east, west, pick the direction. West. Okay. Have you ever been to. this random taco food truck all the way.

out on 620 in the middle of nowhere in. between Steiner Ranch and Lakeway by any. chance? Uh Steiner Ranch and Lakeway? In between there on 620. There's a couple of them. There are, yeah. Yes, there's a couple of them. It's by a barbecue food truck. At least it used to be a couple years. ago. Um. there's two that I know of. I know of. one that's called a beer house and then. there's one called the the Gordibuena. Oh crap, I don't know what it's called. Okay, so I used to work uh way out over.

there and I I was just looking for food. cuz all the. there wasn't a lot of food places near. there and I went there and only uh one. of them could speak English, right? That. were uh it was the daughter of the. family that like ran the food truck. Uh. I ordered some tacos. It was the best. I've ever had and still to this day. I. just haven't been all the way out there. But the reason why I ask if you've been. there is cuz I went there during lunch. one day and the whole place was actually. popping. Mhm. But every single person that was there. had a truck or like an SUV type thing.

with lawn equipment being dragged behind. them and that was everyone packing the. entire food truck court. Yeah, no. And then there was just me. Yeah, no, that whole area is um. lawn lawn care like dominant lawn. landscape. That's that's ridiculous, dude. Just to get out of one of the two. neighborhoods, it's um like ridiculous. line, you know. Yeah. Yeah, for real. Well, the roads. just sucks out there anyway, so. Mhm. that helps. Okay. Sorry, tangent. Very good tacos. Um I was thinking about.

it the other day. I want to go back out. there. What do you make. in this job? I honestly don't know. cuz I don't really. I. cuz I I I do everything. I I I handle everything, you know. I. take care of the calls, I do the. appointments. Also, I'm at the job. sites, you know, and then. a team under you? Yes, I have like three. guys. Just. Is this like your business? Yes, my. father gave it to me. Oh, wow, very. cool. Mhm. It's your business, you pay.

people. Do you know how much money comes. into the business? I honestly don't. know. That scares the out of me. Yeah, I know, right? You got people to take care of. I know, yeah. I mean, all my bills are. paid up, you know. No, I know, but like without managing. like. Mhm. I yeah. Mhm. Uh you mentioned. beforehand that you're married, correct? Yes. Uh do you have any kids? Yes, four. all together. Four? Wow, what are the. ages? Uh 12, six,

five and. uh no, seven, six and five. Very cool. So, that's another reason why. it's like, okay, we need to know how. much money is coming in. That's yeah, that's why I came on here. Yeah, I need to get some help and. see where I'm going with this direction. I have our checking account. Mhm. Singular. Mhm. Do you have a business checking account? I don't. to you and then you pay these people? Mhm. Are they on like contract or. status? Do they do they fill out a W-9. for you?

No. Okay. Woo, [snorts] okay, this is a lot more. going in this conversation than I. thought it was going to be. This is. taking this is taking a. Okay. So, wow, okay. We're doing what we can just to survive, you know. You know, I'm I'm trying to. pay I'm I'm back one year taxes cuz I. didn't have my EIN number, but I have. that and I'm. I have it now. Yes, sir. I have that now. and I'm going to file this year.

do you owe from last year? From last year, I only owe like um I. have two 1099s. I think that's what it's. they're called or something and it's um. maybe like 3,000. Hmm. How much money. did did you the business claim as last. year as revenue? Like how much money came out What was. your profits from last year? I don't. know, dude. How did you file your tax How did you. get this number 3,000? That's what I'm. trying to figure out. Well, that's what I got from 1099s, you. know. That's all I got. Oh, I got you.

Uh. from who? Who gave you those 1099s? Uh I do um this guy has a property. management company that he helps has me. maintain his houses. Sorry, I'm just going to. reposition it to you. Uh that I have it maintained his houses. and I maintain a marina lot that they. also make me do all that, too. So, those. are your main clients? Do you uh make. any more money outside of that? Uh somewhat, you know, come mowing lawns.

stuff. Okay, so I mean that wouldn't be. calculated into it then cuz you. Wee wee wee wee wee. Okay. Yeah, I'm trying to get all legit, you. know. Trying to cuz I you know, um. when my dad handed me this company, I. had like no insurance, no nothing. So, I'm slowly like I had yeah, no website. So, I was got the website, got. insurance, you know, cuz anything. happens, we're liable, you know. So, got the insurance. and you know, I'm just trying to be.

everything legit, get the taxes going on. and everything, you know. Yeah. Try to be you know, This is why you own four vehicles, isn't. it? Yes. Yes. Well, one of them's my mom. and I have three. Why do you have three? Well, for. It is for work? Yes, they're all for work. So, the your employees use them? Well, I I I mostly drive the truck cuz. it's under my name.

And the other two? Well, in case one. breaks down, I have the backup and then. my personal truck. How often does it break down? They. actually um break down fairly often. I. want to say maybe like once or twice a. year. And so I have the back one. But So, instead of having like an um. a mechanic on call emergency fund uh. in order to fix it, you know, maybe. we're down for a day depending on the. situation. Mhm. So, I get it you know, it makes sense to. have a backup fleet in a business that.

relies on it. I definitely get that. Uh. we don't know how much money is coming. in. We don't. you know, with all this unknowns, it's. like, do we have an emergency fund of. cars? Do we have an emergency How much. is in your savings right now? Okay, so I. I want to add a little context cuz. normally I wouldn't need to ask that. Mhm. We did have a little difficulty. going through your documents. They were. a little harder. Um. I mean, the bank you're with is. terrible. On what? UFCU? Yes. So, crap, they don't even show starting balances. and ending balances and you were like.

yelling with not yelling with them, but. you were on like long phone calls trying. to get statements. Just terrible. First of all, I would. just switch banks. Um. second of all, you need to get a. business checking account that all the. money from the business comes in there. Then you pay your employees through. there and you capture distributions from. there. Okay. If if if. if it's going to be like an LLC. Yes. Yes. Just makes managing things so much. easier, but Of course. Thank you. I. appreciate it. Yeah. Uh has anyone ever suggested getting a.

business checking account before? No, like my dad is like from Mexico. My. dad's from Mexico. He came here like on. his bare feet. It took him two weeks to. get to Austin, you know, bare walking. And so he's built this from the ground. up and we've done fairly well. Walked to. Austin. Yeah, took him two weeks. Damn, barefoot. That's intense. Yeah. Okay, how much is in savings? I've got about 10k because every every. year for the past three years, I've been. hit with a $10,000 car bill.

Repair bill. Really? What's been breaking? Uh. [sighs]. Uh this black truck, the black. ram. Yeah. That mother. That [laughter]. That mother. It's it's big, lifted, it's a manual. transmission, it's diesel. It was my. dream truck, right? But it came with. issues. Um I've gone through. three transmissions in it. So, you do have like an actual So, originally I I kind of joked and prided. it you saying instead of having an.

emergency fund, we have an emergency. cars. But you actually do have kind of. an emergency fund. So, that's actually. good. Yeah, I have I have some money saved up. Yeah, but every time I save up, I get. hit. You get hit, yeah. And then you have to. replenish it as quick as possible. And every time I save up the 10 15,000, I get hit with a $12,000 car bill. cuz they're all diesels. I drive all I. drive is diesels. And so diesel repairs. are really expensive. Yeah. So, because of the again, the checking. account statement, I couldn't even see. how much came in. Mhm.

I want to take a brief moment to thank. today's episode sponsor, Melio. This is. for you if you are a business owner and. you want to spend more time promoting. your business instead of getting stuck. in the endless administrative task on a. daily basis. And we know one of those. big daily tasks that take up all your. time are payments. And that's where. Melio comes in as they make things much. easier for you. Melio is a business. platform that allows you to pay vendors, suppliers, contractors, and other. business expenses like utilities, taxes,

or rent. As a relatively new business. owner here, I've had the chance to try. out the service and I love it. It saves. me time, reduce costs, and takes away. all the hassle of managing my accounts. payable. Melio also syncs with. QuickBooks and Xero. So, whenever you. add vendors or complete payment, your. accounting software will automatically. be updated. After you add your vendor's. details, just pay them by card or by. bank transfer. And yes, you get to. choose the preferred payment type and. the vendor gets paid according to their. preference by check or bank transfer.

without even having to sign up for. Melio. There are no setup or transfer. fees and ACH transfers are free. Plus, you can enjoy two free checks a month. There's also multiple same-day payment. options like card or ACH transfers. So, if you own a business, try it out like I. did and improve your payment processes. Just check out the link at the top of. the description below. Thanks again to. Melio for sponsoring this episode. I. can't see even close. Okay. No, no. I mean, we saw from like.

money that came in we could see from. like each point, but it didn't have like. a total of coming in. But, what we saw. come in total was $1,620. Mhm. That's. not enough for, you know, three. employees plus taking care of your. family. But, that also doesn't sound right cuz I. think in your application you said you. made about 50 a year. Yeah. Is that just. a guess? Yeah, just a guess. Okay. Oh, this is going to be This is. going to be interesting. Okay, I'm just. going to. I'm ready it is. I'm just trying to think of how do you. even start? Yeah, I brought you some work. Yeah.

Do you have an. Does your checking account have an app? Yeah, I have Yeah, I have I have I have. all three accounts in the same bank like. I have all the truck loans and through. the one bank. I have it all through one. bank. My. my one credit card is through my highest. credit card is in that one bank. I don't. even try to use I use that credit card. for like emergencies. For like one time. I had a truck repair for like 3,000. I. didn't have cash. So, I used the credit. card, you know. But, I paid that I I tried to pay it off. completely. And it's paid off right now?

Yeah, it's paid off. Yeah. Good. I only owe like. 25 bucks. So, your debts are the car debts, the. vehicle debts. Yeah. Anything else? Not that I know of. Mortgage? Do you. have a mortgage? No, I'm trying to. That's what I'm I'm. trying to shoot for like 5 years to. build my house, you know, cuz um yeah. I. have some property on. Yeah. And I hopefully to save if nothing. can happen and so hopefully within years. I'll have enough to build my house, rent. it out to somebody, have somebody else.

pay it while I live with my wife. Like on the same in the same house or in. a different house? my wife right now. She She has a. two-story house that her Oh. Yes, her. her parents have blessed her with rent, you know, for like being 500 bucks, you. know, at a two-story house. So, you just want to build a house for. people to rent out? Well, my parents have have have my parents. have real estate that they have built. over the years out of this company and. so. I want to add to that real estate. I.

want to be like my father. I want to I. want to add to the real estate. I want. to build my house, you know, like my. father. No, that's that's a great goal. And then realistically, I would have to. save about 50,000. Just like to put like a 20, 30,000 down. payment. Oh, I see. And then have some cushion to fall back. on. So, you're taking debt out for it. You're not just You're not building with. cash. Okay. No, no. I I can't do that. So, $10,000. is what's in savings? What's in checking. right now? Like two.

Okay. Like 17. Do you have anything in. retirement funds? No. Okay, you're 32. That scares me. Yeah, I. know. That scares me. Do you know what happens when a parent. can't retire? No. Their kids Their kid Yeah, you try, but what's What if something happens to. you and the social, you know, I know. I know. security isn't great. Okay. Their Their kids feel morally. responsible to take care of them. So, they put things their goals, their.

lives, you know, whatever they're trying. to do, build a family, contribute to. their own retirement gets put on pause. because the parents before them. didn't do the mature and responsible. things necessary to set themselves up. for retirement. Mhm. So, they're not. saying, "All right, kiddo. Sit it down. You're going to take care of me when I. retire." No. That conversation not happening. But, a. kid's also not going to let their, you. know, mom and pa that they love to death. die and starve cold on the street. Of.

course. So, they end up feeling morally. responsible. So, $0 in retirement at 32. me sitting over here. like chilled on my spine. Just that, you. know, sinking gut feeling. That's scary. That's scary. Also, you're very tan. Yes. Do you wear sunscreen every day? I. don't. Wear sunscreen. [laughter]. Wear sunscreen. You're out in that sun. all the time and that Texas sun is no. joke. I'm from Michigan, so. I never got burned up there with the.

little bit of Native American I have, like 25%. just tend to get darker. Yeah, but also the sun just. I know. My dad tells me At [snorts]. least do your face. It keeps you looking. young and pretty. you know. I wear a hat. Okay, well. That's something, right? Better than. nothing. Better than nothing, but I. would rather also just not have skin. cancer. So, Let's Okay, the debt. We need to I'm. going to go through your app. I'm going. to try to figure out how much money. comes in. Well, let's just get through the debt. So, we have a. 2017 Chevy Traverse.

Man, if we met when you got this though, I could have got you to get this car in. cash. You wouldn't be paying an 8.2%. interest rate on it at 72 months long. Yeah, they're pretty car. Yeah, no. Getting on your car down. Getting. $6,831.68. is still owed on it and a minimum. monthly payment of $767. Oh, sorry. $760 was the interest paid last year. Minimum monthly payment is.

three something. 340 or 374. I have that. on my phone. Okay, 374. And these are going to stack up real. quick. [laughter]. Now, have you met with a CPA when it. comes to taxes? My wife was actually we. were talking about that right before. coming here. That she was going to hook. me up with her CPA and then get my find. my taxes in order. So. Yes, [snorts] I. think that's mission number one actually. because what they can help with is go go. through and deduct a lot of this stuff. That's with the business. Now again, I.

wish we had like. I wish we purchased the car as. a formed LLC, you know, which like I. wish you purchased it through the. business. I There's There's a lot of. things, but. Let's just continue going through. So, loan application, loan amount, 72. months. What's this loan currently at? Cuz. again, these payments are a little. difficult. I don't know what this is. at. This one I got at.

20,000 at 3.7. So, the loan is 20,000. for 72. Currently at 20,000. Yes. Oh, 20,000. Yes, the interest rate. is pretty good on this. What is this? What car is this? This is a 2500 diesel. Duramax. [snorts]. They're made to last. I've never even heard of that. Yeah, well, they're diesels. They're made to. last like more than 400,000 miles if you. But, this is the thing I keep. No, that's the RAM. Oh, okay. That one was I'm still paying on that.

The RAM is. I think 14%. Dude, that one's really. And they didn't take me out either. Dude. [clears throat]. It was my It was my dream truck. Great. Yeah, right. Great. I'm glad. Dream truck. I have a dream of retiring. Yeah, right. Yeah. $605.83, for a minimum monthly payment with. $20,000 remaining. 3.7% interest. I. like that. As far as a car goes, lovely.

Yeah, I even right now interest rates. have gone up. This must be the RAM. Yeah. What's the RAM currently at? What's the. balance? That one's almost done at. 15,000. Almost. 15,000 is almost done. Yeah. Yeah, at a 14% interest rate of death, insanity, ruin me now. Yeah. $765.10. minimum monthly payment.

That kills me. Yeah. Traverse. We already saw the Traverse, so that's not the Those are the payments. that you were on. 345. So, I There's another car, right? Isn't there a fourth car? The Or is it just the three? Yeah, the 2013 or 2013. 13 what? Chevy. Silverado Duramax. Another Duramax. What year is the other one? 2011. Jeez, lots of Duramaxes. Yeah.

What's owed on that? That one I just. recently got, dude. Just recently got. For why? Well, my the black RAM that um. was to me, I got into an accident and I'm expecting. something They're going to post to pay. that out. So, I'm supposed to be done. with that one here pretty soon. I won't. owe anything on that and so I had to get. another truck. Wait, wait, wait, wait. So, so. What are you getting? How much? I I'm not supposed to talk about that.

Oh. But, enough to pay off the 15,000? Oh, yeah, dude. I should be getting a. good amount. Enough to pay off this new. one? to They're supposed to pay that and give. me some. Okay. Will it cover the 2013? Yeah. Uh no. Just the 2011. Yeah. Okay. What's the 2013 balance? That one's at 29,000. I have it on my. phone. I have all my. info on my phone if you want. What's the. minimum monthly payment? That one's 600. I got that one down to 7% interest.

From 14, that's a hell of a lot better. It is. I just don't want to celebrate. 7%. Well, I would celebrate the 3%, but. that's the only one we got going. But, that's with interest rates have doubled. That's with the 700. credit score is 7%. Interest rates have definitely gone up. So. Just give me one moment. Yeah, of. course. Take your time. looking into something. El Vaquero.

Oh, yeah. No, that's I don't think I've. seen I haven't seen that one. You should. go there. I want to hear your review. Okay. On this. It's where I used to go. It was by my. office in Steiner Ranch and it's good. And like everyone everyone it's on 620. it's by Mansfield Dam. By Steiner Ranch. Everyone there worked in lawn care. except for me. It was fun.

Okay. Yes, sorry quick detour. I was really I. was so curious. Yeah. [laughter]. It was tasty. But also I was from. Michigan where like tacos barely exist. outside of Taco Bell. So I was like I. think anything when I first came down. here was incredible. What is this? What is this? What is. this? I'll do it right here. So your checking account is about. $2,000, right? Mhm. What is this Quad. Pay? Uh. that's like.

payments on is it Amazon? Like instead of paying it to one of them. some of them. cuz I'm a cheap like that. But it. doesn't save you any money. I know. How much do you owe to Quad Pay? Uh. that's paid off like 30 bucks. [snorts]. And I actually got a refund on my. headlights cuz they didn't fit on my. truck. So I got that refunded. So in here Quad Pay Quad Pay Amazon. Amazon Amazon. Oh, this is the credit card and we don't. owe anything on the credit card anymore. No, I only 25 bucks.

Okay. What what was this? What was this? We had a we have a loan application. Oh, my bad. I thought that was the. I think let me see. what's this for this? This is for the I. think. We're really doing more of a deep dive. Oh, this for the credit card. This is. for the application and credit card for. the credit card. Uh I thought it said. the interest rate on the credit card. Oh, but it doesn't matter cuz you don't. hold the balance, right? Yeah, yeah. No, I don't hold a balance. That was the interest you were cuz you. guys were asking for the interest rate. on the credit card. So I just showed you that. [snorts]. Okay, cool. That only means I don't owe.

anything on that credit card. Good. Do you ever? No, I try to keep that one low cuz it. affects my credit score. It does, but also you just don't want to. pay interest, right? If we're going to. take advantage of anything. Yeah, of course not. No, I paid all in. one lump sum if I can. Oh, here's the balances. Yeah, savings. $5. Okay. That's something. That's [laughter] something. You know what else is something? Hitting. subscribe so that we can get to a. million subscribers. Thank you to. everyone who has subscribed so far. Love. you all so much.

Okay, checking account balance available. $1,560. $46. And yep, here's our billion trucks. And Visa said 85 bucks, but yeah, we're. just paying that off. So okay, you eat out and do a lot of. spending. I do, yes. I don't necessarily. know okay, well first of all I we. shouldn't be doing that when we have I. know you're paying we're we're getting. rid of the 14%. But if we have an 8.2%. and a 7% car debt and $0 in retirement, we are not going to.

Auntie Anne's. Yeah, okay. Yeah, yeah, okay. She. doesn't need our money. You're completely right. I completely. agree. Grill on Tex-Mex some. custom trailers. Now that's probably for. work. Now that makes sense. Now that I'm. getting more context. McDonald's Wendy's. uh Cash App and out 10 bucks. Cash App. out $10. Whataburger Canteen there's a. bucks that we're probably we're like. swiping we're getting something from a. vending machine. Amazon Taco Cabana.

uh chicken Amazon. uh taquitos. Uh taquitos the taquito guy. Well, the the taquito guy episode. Yeah, essentially this is bull spending. it like vending machines and gas. stations. Yeah, I know I I know The ATM. withdrawals that's what is a big concern. here. You even withdraw $103 96. on my card wasn't working for some. reason and so Uh okay, Quad Pay again. And.

Yeah, your gas fills are insane makes. sense diesel just constantly you done. Chicken Express McDonald's Whataburger. Sonic Drive-In Wendy's Mod Pizza ATM fee. of a dollar then we're ATM withdrawing. of $83 then we're getting some taquitos. and some fundraising thing 10 bucks. fundraising 10 bucks fundraising 50. bucks. Are we fundraising? Should we. fundraise when we can't even fundraise. our retirement? I don't think we. fundraise. Are there any netting for my. children for school? Is it for their school? Yeah, and some. fundraisers that they have to like get.

money. Yeah, but like what happens if. the kid doesn't get any money? Probably. get a perk, right? Like a lollipop if. they get enough money raised. Trust me, I know. You gave them a lot of money 70 bucks. was one of. That's my oldest daughter and so she had. this goal. So we all pitched in to get. that goal. I love the parenting. That's great. I love it. God just 70 bucks when we have this and. we have no dollars in retirement I don't.

just to my daughter 20 of them were from. my. friends, dude. I shouldn't have done it. I'm bad. You've been That's [laughter] why I'm so. nice. I'm like a dumb ass. Lawn equipment again makes sense, right? Mhm. Uh Golden Corral doesn't make. sense. Doesn't make sense I know. Taquitos and Whataburger. Home Depot I guess that probably makes. sense I don't know. Parking. McDonald's.

[sighs and gasps]. I think taquitos and Barbara. and ATM withdrawal $600 ATM withdrawal. $800. Auntie Anne's back at it. Back at it. Tequila or tequi. Hernandez Yeah. Sweet Berry Farm Sweet Berry Farm Sweet. Berry Farm Golden Corral Pinballs. Whataburger oh Senzubiens. $23 getting some beans. Chicken Express McDonald's Quad Pay.

taquitos. So money doesn't come in. anywhere else, correct? Yeah, no that's the only I tried I'm not. a I'm not a. I'm not a. Out? Total leaving leaving? [snorts]. It's closer to like $13,000. I know. The verga. Yeah. Holy Yeah. And what is that. one month? Yeah. Holy. Yeah, I'm glad you're saying it I don't.

have to go in on you as much. You know. that. Transportation itself was $3,386. That was only 25% of what went out cuz. the rest was just so crazy. But food. going out to eat 6.5% of your spending. Usually that's not a crazy percentage, but it was $879. Mhm. Remember $1,500 came in you got to. pay your bills. That's what's up. I totally agree. Yeah. Oh, yeah. Unknown shopping that's. usually Target Walmart Amazon. We saw a. lot of Amazon. We don't know what that. necessarily is so we just put it as. unknown. 3.4% also known as 4.6 or $465.

you're spending. Uh taquitos and other miscellaneous. things. uh like the Quad Pay which we learned. was Amazon uh. uh. gas stations we. oh no no you have those with the. taquitos and lots of Five Below. um the zoo. Yeah, we took off played hooky. Oh, the. [clears throat] Andrew Sun. So some of. that was for business some of this was. not uh but $975 7.2% then your other. large purchases were 53.4%.

What is that? What is the 53? $7229. and that went to ATM withdrawal $4,251. total. Unleashed. $179. Caliber Collision $500. Which again. getting that back. Well, not only that, but I mean that goes. against the business income. So it. reduces taxable income for you. personally. Okay. Well, it it reduces.

what's distributed to you. Okay. McCoy's lawn equipment Technically your. business might be running at a loss. right now, but you just had enough money. piled up on the side. Like I don't I. don't know. All Trans $840 and Pro Car. Audio. Yeah, uh yeah. I had a. little system. on my truck. Yeah. $1,370. Reminder reminder all that came in was. $1,000 not even that. Total income this.

month $1,620 spent on an audio system. $1,370. Yeah. Yeah, I just had to splurge on myself. But you don't have money to do that. with. Okay, you want to pull up your checking. account app for me? So I want to try to. yeah, you can go ahead and get it. These. are rules. for not being a up. Okay. I used to be a up. I'm trying not. to be a up. Oh, you're getting better. Hey, does. that fit in the budget? Rule number one. no, it doesn't cuz again $1,500 came in. $13,000 went out. That doesn't make.

sense. You needed emergency fund. You. have that. You're not breaking rule. number two. That's really good. Okay, I'm breaking rule one. Okay. You don't break number rule number three. cuz you don't hold the credit card. balance. But stop buying cars you can't. afford. Rule number four that was the. big one that I was looking for. You're. around with that. Yeah, well I'm. ahead on payments. You're ahead on. payments it doesn't fit in your budget. It doesn't fit in the money you're. bringing up. I'm sorry. Can you open. that again? Yeah, I got you. So let's go ahead and let's look. through. By the way, I still think it's.

absolutely awesome that you've kicked. your addictions. You were addicted to. everything and it just shows how much of. a bad ass you are and that you can. overcome things. So that's really cool. Um I feel like life keeps trying to beat. me down with these bills. Um it's just if it's not one thing it's. another. You know, I help my parents you. know, I haven't done my own taxes but I. help pay my parents tax my parents. property taxes. They owe like 13,000 and. I give them like half. Really? You know, and so I I. I'm always helping people out. Well, I.

was going to ask about the dad. situation. So, what. Why did he give the business? How old is. he now? He's like 73. Mhm. Did he didn't have enough to retire, did. he? Well, he's got like three. one two three houses. Why are you giving him $2,000? Well, Why. doesn't he. And we're we're we're in the process of. renting those houses out. We're we're we're in Wait, does he have. enough money to retire though?

Well, I mean he's he he has free medical. health care for the from the state and. so. how much money he has saved up for. retirement? I do not. I do not. That's That's my. parents' business. I don't ask. questions, you know. Uh, I would. normally agree with that but you're. giving him $2,000 a month. Yeah. So, it. is your business. Yeah, well. To a. certain extent. If they. Did they ask for it? No. Why'd you give it? Well, my. Cuz I'm a loving guy son and I he's. building this bird house. So, A $2,000.

bird house? Yeah, it's pretty big. Pretty big. Pretty massive. We just got done almost done putting the. roof on it. We should be done this week. Madam producer, I'm going to keep. talking to him. Why don't you take a. look to see if you can figure out how. much money came in for the year. Okay. But. Yeah, I'm not going to retire. Okay, that's all I'm saying. Um, Okay, so it was a gift. It wasn't him. asking. So, you're right. You probably. shouldn't necessarily be like, "Okay,

how much is in your retirement?" Cuz. they weren't asking for the money. You're not necessarily enabling them. Well, he's got it like half built, you. know. He's got it like half ass built. and so I see him sad and like he's like, "I don't want to finish that bird. house." And I'm like, "Well, here's. Here's some money, you know.". Cuz I'm that loving son. Are the houses he owns in the Austin. area? Yeah, those are all his three. houses are paid off. He doesn't owe. anything. Okay, if that's the case he. might be house poor. House poor? [laughter]. Yeah. Okay. So, house poor is when yeah,

you have a ton of house dude and he has. three. Mhm. But you have no money to. actually live. Mhm. If he can't retire. now, it'd be great to pass it on to you. It really would. Might be worth. liquidating one of them and having that. be he and your mom's nest egg to just. live off of the rest of their life. Do I. want that to be the case? No. But if. there's nothing saved up on the side and. they rely on their kid. Yeah. That's house poor. Yeah. He all. the equity in all these properties but. nothing to show for it. That's not good.

Um, Again, great to pass on of course. Uh, so I mean that's difficult and. that'd be a weird and awkward. conversation. I don't know if it I don't. think it's an appropriate conversation. necessarily to have because again, they. didn't ask for help. You just gifted it. Mhm. How often do you give them money? Why do you pay for their property taxes? [sighs]. It is only my mother. She She's the. cheap She doesn't like pulling out money. from her savings. So, But they own the property. So, it's. their property taxes to pay. Yeah, I.

just I feel like it's my obligation to. help. For why? Just cuz that's how we. That's how Mexicans households. No, no, no. I I know the culture thing. Trust me, we've had this conversation on. the show. I know how the culture thing. works. But. Tell me, why is it your obligation other. than. because that's how it's been forever? Well, for one my parents have spent so. much money on me when I was in active. drug addiction. Mhm. Mhm. They have. spent over like $300,000 in like in. legal fees and getting me into rehabs. and. Yeah. So, I feel like it's my obligation.

to help. Well, that's really cool but that's also. taking taking care of their sick son, right? Like just to show an alternative. perspective. Taking care of their sick son. If you're. if and of course in no way would anyone. ever want this to happen. So, just go. with me here. Of course. Let's say the 12-year-old ends up. [clears throat] down an addictive path. in the future and then they end up. getting clean like you. But you put a. lot of money into them getting clean. Would you expect for them expect or want. for them to give any money back to you?

No. There you go. So, I know it's a part. of the culture. It's part of the. identity when it comes to that and just. but just because it has been doesn't. mean it needs to be. I'm just trying to. look at your financial situations. specifically. Especially since they own. a home. Mhm. What would happen if you. didn't pay the property taxes? What. would happen? Well, I'm in the I want to get into the. process where I get it all in a trust. and Yeah. And getting a state plan for. when my parents do pass away. I want to. I want to I don't want to pay the.

capital taxes on that the capital gains. on it cuz my parents bought that. property in '91. for 30,000. first one? Yeah, the first one for 30,000 in '91. And it is now worth like 1.5. 1.5. Oh, yeah. And so, my parents are. fairly well off. Exactly, but house poor. again cuz they don't have any money to. show for it. So, that that that's where. it comes down to. Yes, absolutely should. the trust and everything have a. conversation about that if that has. hasn't already been happening and that. should be done today. But.

Um, what would happen today if you did. not pay this year's taxes? What would. happen? Would they pay it? Yeah. Okay. We have never been. we we I'm the only one who's owed on. back taxes one year. Yes. I just want to. make sure it's not a they won't pay it. type thing, you know. parents are very, you know, did. everything but they came here to America. and applied for their green card and. applied for their permanent resident. They did it the right way. Did. everything the legal way everything the. right way, you know. Yeah, yeah. For sure. For sure. And no.

doubt in my mind on any of that. So, that's awesome. No, I'm cheering for. them. I'm cheering for you. I'm just. trying to. understand the whole situation cuz I'm. very curious. Again, the property taxes did they ask you to. pay the property taxes? My mom asked for help. Yeah. Okay. Now, when that comes that's when. we're like. How much [clears throat] you need? No. [laughter]. Sure, yes. And but before you give money. to anyone especially in family. situations where there is that moral.

obligation, that feeling cuz anyone. feels that regardless of the culture. they come from of wanting to help a. family member a parent when they ask for. it. This is where like, "Okay, I need to. know what your overall financial. situation looks like before I can give. it." Because what's the consequences of. not doing that? You don't know if you're. enabling bad behavior, bad financial. behavior. And it's impossible to know. unless you get insight into it. It. really is cuz it's not always as blatant. they're going and getting in being W's. I'm not saying that. But you never know. what's happening. Maybe they have a ton of money and they. just they're having you pay the property.

taxes cuz you're going to take it over. at some point. Maybe they're seeing you. paying to the system. Exactly, that's. where the conversation comes into it. though. We don't give money unless we at. least understand what's happening. Mhm. Uh, just because yeah, again it could be. I can completely understand where you're. coming from. Okay, good. So, I I would just do that. Especially since how much do you you pay. your employees on a monthly basis? Um, on a monthly basis on a monthly. basis it. varies between Give me an average.

Between 8 and 10. thousand a month. Wow, I really needed to know your. business income. Why? 8 to 10,000. Yeah, if it's 4 weeks in a. month it's 8,000. If it's 10. 5 weeks it's 10,000. Oh, yeah. So, That's my payroll. Those two places that. you got your 1099s, do you have access. to those 1099s still? I actually I. should have brought them. I will Do you. remember what they said? No. No, but it's like Do you know what the. contracts are worth? No.

Buddy. [laughter]. Buddy. I'm I I don't even know anything about. that. They just send me that. I'm going to ship to your door on. Christmas just a very plain old. storage cabinet and I just want you to. put things in them. I will definitely do. that. I'll take any advice from you. Okay, advice number one. Um, know how much your contracts are. worth. If you cuz Like what if they're. undercutting you and that's why they've. taken you? What if you're earning 40%.

less than the next option? You don't. even know. You don't know how much. you're bringing in from these two major. contracts. Cuz if you're shelling out. $10,000 a month, that's not an. insignificant amount of money. Right? For payroll? That's not. insignificant. And then you need to pay and then you. only pay owe 3,000 Okay, step number. two, CPA. very well received CPA in your corner. absolutely. Very. Yeah. Absolutely. Number number. number three,

business checking account. You can you. go any bank. Just search up best. business checking accounts. Okay. Yeah. Thank you. Have all the money. that you get paid through the business. go into that. Have all the money that. you pay for business stuff like your. cars and all that. Well, we got to figure things out. But. Have it go out of the business checking. Form an LLC. Uh, yeah, I have the LLC. cuz you have your EIN. Okay. Yep. I have the LLC. Yes, I have that. Good. Uh,

Might be worth S corp being at some. point in the future cuz what you can do. is you can put yourself on a payroll and. then the distri- It depends how much. you're collecting in distributions cuz. it could reduce your taxable income on. your distributions. That's a part of a. different conversation because that's. not what we're worried about right now. I'm worried about paying this next. year's taxes. Yeah, I am too. That's what That's my. That's what my wife's going to help me. with. What taxes are you behind on? Business or personal? Both. I.

When's the last time you filed personal? Mhm, I would say personal about 2 years. So, if there's anyone I don't with. it's the IRS. Yeah, I know. That's what. my dad tells me. That's why I'm trying. to You're going to lose everything you. built. I know. That's why I'm trying to um get. all this situated. Trust me. Um getting everything in order. cuz I was, you know, 2 years I was. just got clean 2 years, you know, something like. Yes, absolutely. No, for sure. That. makes sense. I mean, you're playing. catch-up on a lot of life and that does.

make sense. So, this is I want to get. you to a good point. Thank you. I appreciate it. Producer, any progress on. income? You're just manually doing it? Oh, jeez. That's some dedication. All right, thank you. Uh she's manually. doing your income cuz again, that. checking account sucks. So, uh my it's. we're obviously going to do a quick and. dirty version, so. you know, we'll see. But. Okay, so we'll get that number.

Uh let me figure out your personal. financial situation outside of obviously. Well, first of all, your minimum monthly. payments and debts. Let's assume that. other one's going to go away like you. said it did. Yeah. So, 600 plus 700 Oh, the. the. the RAM's going away. Yes, the RAM is. going away. Not the not the the not the 2011. Duramax. No. Okay. Okay, so 600. interest rate one. Yeah, 605. Your minimum monthly payment on the. cards alone.

with the RAM gone. is $15,500. $50. 83 cents. Mhm. Yeah. Okay, and that number hurts me. You don't seem to be affected by it, but. it destroys me. Okay. Car insurances? Mhm. How much on a. monthly basis? I pay. it varies. This last month it was like. 820. I have full coverage on all my vehicles. Oh, yeah.

Yeah, I don't mess around with my. vehicles. 820 you said? Yeah, something like that. How much in. gas on a monthly basis? Dude. I know. I. saw them. They're brutal actually. I. think I have that. Well, I do a lot of. driving around. I really want to. purchase like a little small car to do a. lot of like the running around. But I want to pay that one cash. instead of getting into another debt. [laughter]. Buddy, you don't need a fifth car. Well, I would only have two. Really? How much in gas?

On average, give us give us an average. the week, right now since we're. Car insurance, we had 963 in the most. recent, by the way. Really? So, I'm. going to put that. But gas, we had 617. Yeah, I was about to say it was about. 600 $700. Dude, I'm just going to go high end. Assume it was a less busy month cuz only. 1,500 came in.

What's your rent? You don't know? You live with your. with my wife. It's 500 and I help her. with that. Or I help with like the. utilities one. Is the 500 you help or is it you split. the 500? split the 500. How's the rent so cheap? Well, her parents own the house. Her. parents own the house and well, she has. two kids. I have two kids, you know. Yeah. And our family works good. together. That's awesome. Yeah, we. we all clicked immediately, so Yeah, that's bad.

How much towards. utilities? Um. On average. I'd say like 500. That you put? No, like. in total, if if that. So, including like. internet? Yeah, internet. How does. groceries work at the house with the. four kids and That's brutal, too. I. know, but how does it work? How how's it. proportioned financially? Uh she usually. takes care of that.

You guys are not joint in your. No, we're not. Okay, that's a whole. different conversation. Yeah. At at some point, once you have your. business and personal separated, I. recommend Of course. joining. We're not opposed to it. We are. definitely not opposed to it. Yeah, just right now it wouldn't make. any sense cuz you'd be bringing in your. business stuff, so that needs to be. separated first. Okay. Um All right. But we're doing this just because we're. just we're going to budget together as a. household and uh just like you said, you. guys all mesh together, so it's perfect. So, we're going to budget together so. that we're meeting the goals that we.

want to together and we're um. you know, just moving forward as a. household and as a couple. Huh, so what what should So, she takes. care of groceries, so I don't even put. groceries in your budget? Yeah, no. Okay, let's call it. If she needs money, she'll ask me. She'll say, "Hey, I need a couple. hundred dollars for this.". Okay, I'm going to do 200 then. I. Okay. Uh She'll help me, I help her. We're a. great team, you know. Yeah. Uh toilet. paper fund, this is for stuff for the.

house. I'm also going to consider the. stuff for the kids and school and you. got four kids you help with. Oh, man. What? I'm going to say [clears throat]. 250 bucks a month. That's just for the oldest, probably. Well, what all do they need? Well, the oldest is spoiled. Okay, but. stuff by choice. Yeah, stuff I'm getting. your minimums. If we cut back to the. bare necessities. I guess. Okay. Cuz I think that's even being a little.

generous cuz I assume they have clothes. I'm saying like if a. Yeah, they they're all spoiled, man. They're all spoiled. Okay, I'm bringing. that down to 175. This is bare necessities. If everything. came crashing down, what would have to. go towards things to survive? That's. what I'm figuring out. Dog, yes, how. much goes to that? [laughter]. The dog, um that's maybe like I want to. say like 175 bucks a month. Okay. Yeah, what what's the dog in age? Uh. it's like a. mutt, some mutt, some pitbull mutt. Age?

Uh going on like 2 years recently. I recommend pet insurance actually. Pet. insurance? I do. It's saved me thousands. and thousands of dollars. Yeah, cuz dogs always eat something then. it just gets bad. Okay, yeah, definitely. I'll definitely tell my wife about that. I'm going to put it up to 100 to include. pet insurance. Medical across the house, do we have medical? I do not have medical. She has medical, I don't. I just. Now again, when we join it together, then it'll be both of you, but you don't. have to there's no ongoing medicals for. that you take care of on a monthly. basis. No, I don't. I'm I'm fairly healthy. I.

do not go to. and. Yeah. Okay. Okay. Health insurance, so you have health. insurance? I do not. Okay, get health insurance. Okay. I'm going to give you like a meh, run-of-the-mill, just uh it's going to. be okay, it's going to be fine, 300. bucks. Okay. Anything else you have to take care of. on a monthly basis, have to take care. of? No. So, your debts are by far. or your cars are by far the leading.

killer of your budget with the debts and. the car insurance and the gas. do. They are the. They're the working vehicles, so they. pay off my bills and they pay off their. own. They pay off their bills. So, I didn't get no luxury car just to. have it around. No, I know. But. still mathematically, they are by far. make sense, does it? Well, I I don't. know. Mhm. Uh I need more insights into. your. uh That's why we're calculating a rough. estimate of your Yes, yes. So, minimum.

to survive This is including your. business and you, which isn't. necessarily best, but everything's so. intertwined right now that that's how. we're going to do it. So, it's uh. $4,608. That's what you need to survive on a. monthly basis. Just to survive. From what you put towards bills. Obviously, if we include the household, we also include her income and we'd. include the expenses she's taking care. of and that would change the situation, but this is what you need. Yes, sir. But since we're also including payroll.

let's let's do $9,000 to average it out. across the different payrolls, so. should be easy math, but I don't like. That's I I I Yeah, that's only my. payroll. I see other landscape. landscaping crews that. I don't even want to imagine there. Well, hopefully higher the payroll, the. more money's coming in, right? Yeah, but it's just like those are my. small problems, you know. Those are my. small problems. 13,608 bucks. Let's call. that your minimum monthly. Okay. Where are we at?

All right, we almost got it. [snorts]. I try to keep a lot of cash. I don't try. to use the bank account that much, so. [snorts]. Wait, you told me you had $10,000 in. savings. Why did I see $5? So, you have $10,000 in cash? Yeah, in my safe. In your safe. At least it's in a safe. Yeah. I'd put it in a high-yield savings. like SoFi at 4.6. I'm expecting another check and I'm. going to open it up another PNC I'm.

going to my plan is to open up a PNC. account with a yield of 4% at least. That's the best I think I can find with. what I got. 4.6 SoFi. We're at SoFi. SoFi? It's what. I personally use and it's 4.6. You turn. on direct deposits. you get an extra 250 bucks a month. to get all this information like later. or Oh, awesome. That's great. Well, also. you ask us any questions along the way. as possible and we'll help. Almost, thank you. Thank you so much. That's. awesome. That's what I'm I was here for. You did break rule number eight.

Congrats, you're business queen and. you're self-employed. But I'm broke. That's awesome. Congrats. Do you want to know what's awesome? What's not awesome? Owing money to the. IRS. You are breaking rule number eight. You are not setting money aside, my. friend. Yeah. Rule number eight, there. you go. Breaking. All right, what do we got? [snorts]. Math isn't mathin', my friend. Math. isn't mathin'. What does that mean? Of total that just came in on the.

checking account, this is year to date. This year. Okay, so you're close. Uh $80,318. is what it's coming in this year. All. positive. That includes if anyone. Venmo'd or Zelle'd you, also, by the way. So, this is anything, hard and fast, rough and wild, that is the number we. got. So, Wasn't far off on 50. It's 30,000. I'm glad it's not 50.

You know, because remember, the minimum. you need to survive, including paying. your employees, is $163,296. a year. Oh, really? Okay. That's why the math isn't. math-ing, so I'm a little confused. So, Yeah, I was never good at school, so. What you need, and this is where. I'm going to create less of a. uh like a detailed here's our our job. blah blah blah do all this plan.

Um I'm going to create a plan of just. getting the basics of money management. together. Okay. Uh so, uh can we have a piece of paper, please? I'm going to have you write this down. Okay. Yeah. Okay. Okay. [snorts]. Rule number one, or not rule. Uh. By the way, sign up for the newsletter, you get your. own. Link in the description below.

Okay, number one. You're immediately going to find a. top-rated in the Austin area accountant. and. CPA. I know your wife said she might help. Uh. that's cool. I don't know what kind of. connections she has. I want you to find. best in the area. The accountant is an. accountant you're bringing on uh. full-time. The accountant, what you're. going to do is you're going to have an. appointment where they just go through. and actually figure out your business. But because what they're going to do.

versus what we can do here, I can. definitely I can help gather a. relatively good picture, usually more on. a personal level, and get things out. What they're going to do is they're. going to spend hours and hours and hours. and hours, and maybe a couple weeks deep. going through every line of your. year-to-date statements, maybe even last. 5 years statements. They're going to. create you an entire picture of your. finances. Where's money going in the. business? Where's money coming in? Everything like that. Just a quick. shout-out from today's video sponsor, Monzo. Monzo is a money management app. that helps you see, save, and spend your.

money with confidence. Sign up for free. by using my link today at. monzo.com/us/caleb. or by using the link in the description. below. Thanks again to Monzo for. sponsoring today's episode. CPA, they're going to figure out your. tax situation. So, actually, let's do uh. number one is accountant, number two is. CPA. Cuz you probably Yeah, let's get the. accountant to just put everything. sorted, and then you go to the CPA. But. that's very important. makes sense. Uh we need to start. figuring out how much money you owe from. last year's taxes. The $30,000 I'm.

having a hard time believing. But then again, maybe not, cuz I maybe. the. the company only made a profit of like. nothing. So, you know, with the numbers we have, it's. kind of hard. Okay. Number three. Business checking account. Now, okay. All the money that comes in. from the business, all the money that. goes out from the business, and you're. connecting this to your LLC, obviously, um. goes from this account. Nothing from. your personal anymore. Personal is not.

it. Not it. I would keep in there, and this is. something I personally learned from The. Money Guy. He says I was evolving from a. business uh perspective. Like mine's. only a year and a half old, and I got. advice at one point $25,000 was great to. have in my business checking account. At. that point, it was, but I've grown so. much since then that it doesn't make any. sense anymore. For you, what I would. have. [gasps and sighs]. would probably make it a goal. I would. just put it like a like a note next to. business checking account, just a goal. in the long term, Mhm.

is to probably have about. at least $30,000 sitting in your. business checking account. To cover things in like a down season, you know, it doesn't rain a lot, so. people aren't getting their grass cut. We're in a severe drought, so people. aren't watering their lawn. we do like tree cutting um in the. I'm just saying. Something happens, there's a downturn for a season. Okay. Understood. Uh that helps you take care of your. people. and yourself. Okay. Number four.

Um before. Um I need you to um. and this is going to be hard and. awkward. You need to go about it your. own way and figure out the best way. possible. Have a conversation with the. parents. Try to figure out the financial. situation. If you are giving money to. take care of their property taxes, we. need to at least see why can they not. manage it? Yeah, I already know why. Mom was a. cheapskate. Okay, well, that's not a reason, though. It's not a reason. If they can If they. can take care of it, then they should. take care of it. Uh from the looks of it, like sure,

maybe you're making your payments and. bills, but how? I don't know. I'm. confused. Mhm. Like it doesn't make. sense, and then how are you giving them. money? It's very confusing. Again, $13,000 went out, $1,500 came in. My mind's blown. [clears throat]. Okay. [laughter]. No. Math-ing, math-ing. Um. What's number four? That, talk with the parents. Oh, yeah. Talk with the You might not be. able to give that money anymore. Your. accountant's going. not I was never going to get that money.

back. No, no, you might not be able to. give it anymore. Oh, okay. Uh and with number four, get the trust. figured out as well. Okay. Yeah, um. that's my plan. Yeah. Now, when it comes to paying off the. debt, what I would do, let's just get your. business risk risk-free. Yeah, that's my. That's my first priority is the um my. taxes. Tax, yes. Your accountant's going to. help you figure that stuff out, and then. you go to the CPA. That's my first priority is my taxes. That's my first priority. By the way,

after the accountant, you are using. something like QuickBooks, something. like that. Uh you can write down. QuickBooks if you want. Use that to plug. into your business checking account, and. this is, you know, what I started doing, and it's helping. It's really good. Uh. to just understand where your money's. going, what's coming in, and keeps. things tracking, so you can just hand. everything over nice and organized to. the CPA at the end of the year. You know. where everything's going, where. everything's coming. So, this is you. managing it going forward. Okay. Now, getting the business to a. risk-free situation. Number five, what we're going to do is.

we're cutting back all both spending and. your living on just the necessities, which is $4,608 a month, which is very. high, but it's cuz of the car debts. That's what we're taking care of from a. risk business. We are. paying off as aggressively as we can the. Traverse, then the. 2011 Duramax, then the 2013 Duramax, till they're fully paid off, and you. have no debt to the business name. When. you have no debt to the business name, this is an extra $1,550. that is going in your pocket every.

single month instead of in the bank's. pocket. This starts getting you to. retirement. So, that's the. That's step number five is getting the. trucks paid off. Then giving yourself a. fully funded emergency fund is step. number six. Then step number seven, on a. minimum monthly basis of the money that. comes in, uh first of all, you're going to set 30%. aside for taxes. of the money that hits your checking. account. But then, the money pile after. that, after that 30% is set aside, you're going to contribute minimum.

25% on a monthly basis to retirement. through like a Roth IRA or self. uh. uh a solo 401k. Lots of tax benefits. there as well. Fortunately, that stuff is later down. the road, and we'll, you know, ask me. questions along the way. But these are. the things you need to do urgently, and. then we get to that point where we start. saving up for retirement. And yes, hopefully these properties are cash. flowing nice, and they just coast you. through retirement. But we also have. retirement funds, and we're taking. advantage of. uh tax savings by contributing to these. retirement funds now to save you and.

your business money. Mhm. Yeah, I would. like that. Yeah. Yeah. But that's what we need to do. Now, is. it Was this helpful? I'm I wish I had. better insights into here so I could. give something a little better, but was. this helpful? Yeah. Yeah. Yeah, I definitely. think it was very helpful. Okay. Um any questions? Mhm. Um just to look up for the accountant, the best. uh accountant in Austin, right? [snorts]. Yeah, either talk to some people or look.

up some Google reviews. Yeah. Yeah. Um. Yelp, maybe, I don't know. People. usually just go on Yelp to complain, so. I don't know if I can trust everything. Google reviews tend to be pretty good, though. Yeah, that's what I was planning. going off Google reviews. Awesome. Any final thoughts? No, dude. I think it was great. So, for his Hammer Financial Score, it's. kind of impossible to say. Like for. spending and a budget, the fact that he. brings in $1,500 a month, but more than. $10,000 [music]. goes out,

that'd be like a negative five out of. 10. What What do I give? So, Hammer. Financial Score is I. I don't know. So, yeah, that's it. Make. sure to check out all the resources. linked in the description below. They're. what I use or would use in specific. situations. Thanks to all of our Patreon. producers for making this episode. possible. [music]. If you want to participate in an episode. of Financial Audit and you're able to. make it to Austin, Texas, please fill. out an application in the survey linked. in the description below. [music]. You can also send a link to your friends. or family who you think might be good to.

be on the show. If you have any. questions, you can email. casting@calebhammer.com. [music].