Financial Audit - She Keeps Choosing Debt Over Work

Episode Date: September 7, 2023

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Hi, my name's Jess. I'm from Montana, and this is financial audit. And how old are you? 27. 27. Awesome. Well, thanks for coming down from Montana. What do you do up there for a living? I am a nanny right now, so I've been in child care a long time. Okay. So how long have you been doing that since like before graduation of high school? Yeah, like right after I graduated. What made you want to go into that? Well, I just, I don't know. I've always kind of liked kids. I, I,

Took care of my siblings growing up and just kind of fell into it and got training and went from there. Has it been a successful career so far? No, it's not very good pay. Oh, well, what are you making? What do you think on a monthly basis on average? So right now, I just recently started this nanny job like a couple months ago and it's 16 an hour. I feel like my friend who just watched some kids like who's 19 makes more than that. Why is it so low?

I don't know. Is this for a company or is this? Hmm? No, it's just privately. Really? Okay. So, wow. Yeah.

So it's just the area and everything like that? Yeah, I think way like pay wage is a little lower in Montana. Sure. Just across the board. But yeah, it's, I don't know. This job is actually more than I've made in the past, like working at child care centers. Well, hopefully with that, the cost of living is also lower. I'm hoping we're going to.

collect some information and figure that out. Oh, okay. So, okay. Well, did you say 16, 15 an hour? How many hours are you working on? 16 an hour and it's averaging like 35 an hour or 35 hours week. Yeah. And you're doing like every week, you take weeks off or like what does it look like?

Yeah, every week. And then this, I'm not, so this I just started and then I also wasn't sure about like taxes with that. So. Well, there is going to, you're going to. going to have to pay a little bit of taxes and then just being self-employed and everything. There's ex-taxas that come with that. But with the bracket, you'll be in and, you know, hopefully, I don't know how much you'll be able to write off, maybe transportation to and from potentially.

But just the tax bracket you're in, I don't think you're going to pay too much, but it is always good to at least think about putting 25 to 30% aside. Usually 30% is the recommended just for safety. Are you? Not as of yet. because I was. Have you paid taxes these last like 10 years? Yes.

Yeah. I've always had like pay stubs and did taxes that way. And you've claimed everything correctly and everything. Oh, you had. Oh, okay. Interesting. So how are you being paid right now? Enmo.

Right. But you're keeping track of all that, correct? Yes. Yeah. It's all logged on there like every week. And then you get like the quarterly statements. So we are what? Yeah, more than halfway through the year.

And you haven't saved the picture. Anything for Texas on the sign? No, I just started last month at this gym. Oh, so what were you doing previous then? I worked at a daycare, and it's kind of complicated. This year has kind of been weird, so I worked at this daycare after taking like a year off with kids. I was doing like decent before that. And yeah.

No, I mean, just like, what's up? Why did you leave the daycare? What was happening? It was just the pay sucked and she's going to give me bonuses that didn't really happen. And I ended up with this like debt. Like I borrowed again from that thing. And we're about to go into a lot of that. Yep.

A lot of that. Before we go into that debt, though, you should hit subscribe because we are trying to get the 750,000 subscribers. And think of everyone who has subscribed so far. So this debt. So were you just not making the money you needed to do and you just ended up going to debt? because you went into like a lot of different kind of deaths that have stacked up quite dramatically for your income. In fact, for your income, this is if you work 35 hours a week, every single week, never taking a break, essentially, with that job gets you that it's still just below $30,000, which is $2,400, $26 a month. And then you have to put like 30% aside for taxes.

So even with that, like especially post tax and everything, your debt is over that at that point in terms of how much is owed. And the interest rates are insane. So tell us about your financial situation. Why are you where you are right now? And what's up? So I've lived with my grandparents for a while, like probably six years almost now. And I have never like they don't, I don't pay rent. So I've kind of went into child care and I kind of, I don't know.

It's kind of hard to explain. Like my growing up I didn't have very much stability So when I was like Moved in with my grandparents and had that stability I kind of Just thought I was okay Because I was paying the bills And making bills and I didn't really have debt

And like besides a car payment Until probably the last couple years What's what happened the last couple years then? Well I took out that upgrade thing You sure did. Yeah, I did. And then I wanted to just kind of take some time off because I do work a lot, like two or, like up to two or three jobs sometimes. Okay, but right now it's only 35 hours a week.

So I don't know if I'd consider that a lot, but sometimes. Not right now. Okay. Yeah. But, yeah, and it would be, I would like make bigger purchases and then not really save. And I thought it was. I just probably ignorance. I just didn't think of the future at the time in my early 20s and dumb.

Okay. So what would you give yourself a score? Zero out of ten. Zero point five. Zero point five. Okay. Well, I at least appreciate that. Honestly, we're about to go into this debt and that kind of aligns with potentially what I've seen.

So why'd you go into this upgrade card loan of death, insanity, chaos? Terrible, yeah. Well, it was, I was just burnt a couple summers ago. I was burnt out and just wanted to take a couple months off. Brunt out from what? Working. What are you doing? I was doing childcare and I did photography on the side as well.

And I also had times where I worked at a restaurant in town, local restaurant. How many hours a week would you say you were working at that time? I'm just trying to, how are you burnt out? Like 80. So there's something going on down there? I'm playing with my phone. Okay. Yeah.

So I just want to make sure it's not being picked up on microphone. Okay. Then he got burnt out and then he just took out debt to live instead? Yeah, because yeah, that's kind of where it ended up piling up. I was working. I had a school district job as a para professional. Dude, you've been, you've done like more jobs than most people do in a lifetime with Yeah, I worked at a child care center consistently for like over four years and was doing different side stuff while I worked there.

And then I got this paraprofessional job and was doing okay with that. And that's when I took this loan out because I knew I was going back to work. When did you take this loan out? Originally like probably two summers ago. If you took this loan out two summers ago, I'm so curious. I did. I, because I did pay it off, like at one point. You paid this off?

Yeah. And then knowing it has a 30% death interest rate, why did you possibly get it all the way up to the max? Because you owe $4,387 and $10 on here, but there's only available credit of $160. Why are we where we are now? Because I kept borrowing against it. No, no, no. I know. But if you paid it off and you made that progress, why did you put it back on?

I need to know where your mind sets at going into this. Yeah, I know. It's not good. But there wasn't probably any logic behind it, honestly. Are you still spending money on this? No. No. Okay.

30% death. Yeah. Interest rate. This is crazy. Okay. Well, say it with me. You're not a credit card person. Nope.

We know that immediately because you max this out again. We're about to go through like a million other debts. Of which, by the way, you are not. just not still spending money on those debts and cards. I'm glad you're not in here. You really can't. There's only $160. Right.

You know, I don't know. I'm immediately nervous of, like, what to do just because, okay, let's pay it off. But then you have something that was paid off. Yeah. Then are we just going to do another $4,500 on something with 30% interest rate again? Are we just going to do that again? Not this time. What's going to be different about this time?

Well, the plan is to pay off the super high interest stuff and then close those accounts. Well, what's going to be different about you this time? Plans are great, but what's different? Well, now I'm aware of how terrible it is because I thought I was doing okay because I was making the payments. And then when I left the daycare, like at the end of winter it was, I, um, Sorry, I lost my train of that. But when I left the daycare at the end of winter is when kind of I took it out again. Of last winter?

Yes, like February. You stacked that up within just a few months? On what? What was paid? What did you spend it on? Like, bull-fitting it. Like, oh, geez. And then after I left the daycare, I didn't have a pay.

plan so I kind of lived on that for a couple months like this may was when I kind of got back into work like stably okay there's I'm there's like red flags everywhere it's like red flags central right now paying off cards putting it back up taking off work working like a thousand trillion different jobs than just the last few years like how do I know you're going to be in this a nanny job for two months from now at this rate like What if you feel burned out? Then all of a sudden we just like we open another car and just, this is this is not,

by the way, shaming you in this situation by any means. I'm just, I'm scared personally and I need to know where you're at and like what we can do here. Which by the way, I should say thank you for being on here. Though this is certainly a dramatic conversation and probably very tough for you. And I get that.

There's probably thousands, tens of thousands of people that relate to your situation out there. And you're coming on here, putting your situation on to, And it's hopefully helping them. And that's, you know, always the goal. So thank you for doing that. And give her love in the comments because that's great.

Oh, yeah. Yeah. It's the timeline super confusing. But it is. But yeah, I didn't really realize how like absolutely terrible it was since I left the daycare job and like saw it all added together. But I need to know what's going to be different this time. What's actually going to be different about you this time?

What's going to say you're not going to leave this and go get your 30th. a different job next month? Because only going back to school. I just think it'll be different. You're going back to school now. Okay. While I do this job.

So we're throwing something else in. Yeah. Okay. What's your highest level of education? I did about a year of college. And then when I got training at the center I was at, I am. Community college? Yep.

Do you have those credits still? Yep. Okay. It's all transferring. It's the same place. Good, good, good, good, good. What do you want to do? Um, I don't know.

All right. Well, that's a, okay, we'll go to that conversation in the future. I don't know if I want you spending money on college. If you don't know what you want to do yet. College is great. I know. It was just, well, when I left the daycare job, I, like, had a really hard time finding, like, other work. Sure.

Is it a small town? Small community? Yes. What's like the population? You don't have to tell us the town, but like, what's the population? Um, I don't. know. It's one of the bigger towns. That is a very small population.

33,000 people. Okay. So yes, I can see opportunities being limited for sure. Yeah. And it was, because I thought I was good with the training I got through my old job. And then it was kind of, child care positions kind of cap out at a certain pay, like $20. I'm sure. I'm sure. When there's, when there's this less market availability for that. Yeah, and now that I've like 10 years of experience, it was kind of like I don't want to do the same job forever. So I get my associates, maybe I can just get a better job from there. We'll talk about that.

That's an important conversation. We'll talk about that. We've got to get through the death and see what your financial situation looks like. So we know we have the 4,226 at the death, death 30% interest rate at $193 a month, minimum monthly payments. These minimum monthly payments are about the stack up, by the way. Now, we had a card. You had $1,000 on a $1,000. it. That's not great. But then you made $150 a hundred, $100 a payment or $180 payments. That's great.

But then we did $400 of purchases. $400 of purchases. Why possibly on a card that we are losing interest rate on, which is $14.16 on a monthly basis, which also 30% interest rate, if I'm not mistaken, which also yearly interest loss $132. Why are you possibly spending $400 on a monthly last the most recent month. That was the plane ticket. Okay. Because I had the airline credit and it was going to cost me $100 out of pocket. And by the time all the emailing was done, it went up to $325.

Well, the good news is we do reimburse some of it. Oh, well, I'll talk to you about that afterwards. But, okay, hopefully even if there was no reimbursement, I'm hoping the $401 is considered an investment. that this will help a situation that will more than have a return on investment of that $400 in terms of potentially tens of thousands, hundreds of thousands of dollars in terms of you getting on debt starting to invest and being able to retire at some point. So hopefully that has a good investment on it. So, okay, it's the cook silver with $1,285.

$84 with a $45 minimum monthly payment. and of course 30% death, extreme interest rate of 29, 14 interest occurred within the last month. Crazy. And no, it wasn't just a plane ticket. Come on. Spending almost 40 bucks at Hobby Lottie and spending over 40 bucks at DoorDash. Do we need to be door dashing?

Do we need to be door dashing while we have the stupid 30% debt and another stupid 30% debt that we haven't even talked about? Should we be door dashing? No. Why did you door dash? because it was just last month. And you said, oh,

but I learned, I learned the piece of personal finance, which is great. To myself, it's better than I was doing. But yeah, I know. Not a good habit.

Not a good habit. We don't do it. We don't do it for a single second. DoorDash doesn't exist. Honestly, should it really exist afterwards anyway? I don't know. It's a very expensive way to get food.

It's only if you can be very easily afforded within the budget. Does it ever make sense? And then, of course, we have another card. It was $662. made $180 payment. Great.

That's over the minimum month. That's awesome. And then again, purchases. It's only $18. But still, why are we putting money on a card that you are losing $14.85 of interest on a monthly basis? And you have lost at 32% interest rate, $45.71 this year so far in interest. Why possibly would you be putting $18 on this card?

No, no good reason. is just because obviously I'm not a credit card person. You're not a credit card person, not a budget person currently. It's, I'm okay. It's okay to give an excuse

as of why you put this on here because that at least gives us insight into why into the I don't knows or it's just bad or I was just being bad. Like please tell me, what's your justification behind it? Where were you mentally when you went in DoorDash and Hobby Lobbyed and then what you're doing here?

gas, probably. Oh, gas. But then why did you put it on this card? I need to know where your head's at. We have to get to the bottom of certain things so that we can put you in a better place going forward. Well, yeah. I always make payments on time,

so I just kind of justify it to myself that way. That's not sure, and we'll go into that. Yeah. Sorry, continue. Yeah, I just kind of justify it. Well, I'll pay it back later. and then it adds up and I owe a lot. Okay.

That's just, yeah. Okay. Good. Well, thank you. No, that's very helpful. That's good. So you think just because it's able to be paid back later and because in general, you know, making them in a monthly payments, you're chilling. Mm-hmm.

Okay. Now, we have an other card. This one is less. I believe I paid off. Yeah, because there was like nothing. It was like $7. $0.31. But there were fees.

$8.32. Yeah. And it was after I paid it off. I saw that when I. Was it like a transfer fee or what was it? Maybe it was annual. Oh, this is. Oh, credit one.

Oh, if there is a credit card or bank or whatever that I have learned to hate throughout the process of this show, it is credit one. Credit one of death. Because they just, they're just punching poor people in the face on a daily basis. It's not fair. Oh, yeah. It's not, well, people sign up for it, but it's just the predatory practices that they go after. I like credit cards.

This company and the way they go after people with their terrible, terrible fees, just so people feel like they have a place they can spend money. It's disgusting. It's terrible. So, yeah, cut that up. Do you have it with you? Yeah. Are you willing to cut it up? Yeah.

Good. So this is credit one. Oh, there's really nothing to pay off again. $7.31. So just pay that because it was $58.62 cents. The fees charge within $2023. You have a monthly fee. It's probably that like $7.31.

It's a monthly fee. It's done. I need you to close this one. Usually I'm not a close account kind of person, but you're just losing money on this. You're going to close this account. And then interest, because, again, you did hold balances on it of $8.13 this year. and a 29% interest rate, but there's nothing there to pay off. But we do have a car, I'm assuming is what this loan is.

Yes. This is at a better interest rate of essentially 6%. Yes. When you take an account depreciation and everything like that, I still don't like that. I wouldn't want anything on vehicles that are over 3%. So it's still not good. We'd still want to pay it off early. What's extra bad on this is the 70, you took out, of course, 74 months.

So you're just like, well, what's the longest we can do it in order to get the minimum of payments down? And you took out like the longest car loan. And then you're like, okay, cool. Happy days. And then with that, I mean, you're paying a total of 17,213 on the money you borrowed of 14,526 because of the interest. Right. So even though the interest rate feels lower compared to like the crazy 15, 25%, that we've seen in terms of cars, it's still terrible. Yeah.

But that one, I pay two, 50 months. So it's like 11 over the minimum. That one I thought I was doing okay. Right. Yep. Okay, dokey. Well, well, so I don't know this bank. The finance charge, the way they have it lifted out.

I wonder what the early repayment is. I wonder if that's like, okay, total payments after you've made all payments. Okay, it would be the 17. thousand but the amount you finance was that 14,562 so we're definitely going to try to pay that early so you don't have to pay that close to $3,000 in interest okay so 14,5002 and all your money is going to interest right now except for that a little bit that you're making extra at a 239 and nine cent minimum monthly payment at what was that 5.7% interest so essentially 6% interest Okay.

Now in terms of you're like, you're like, okay, I feel okay. You've overdrafted this year so far and you're checking again. Yeah. You've overdrafted. I did the last couple months, yeah. Yeah. So if we're overdrafting, do you really feel that mindset that you just said of like, oh, but I can just pay everything? Yeah.

No, I know. It's because I wasn't, I was having such a hard time finding a job after I left the day. Why did you quit before finding another job? Especially in your situation with me. $0 in savings, correct? Right. Yeah, it's just because I was basically losing money with that job and was not making money at all.

And then I had to like personal things happen right after I took that job with her and had to miss a week and go down to Salt Lake because my aunt died. I'm sorry. Yeah. And then after that I just could not catch back up. And she kind of promised me bonuses that didn't happen. And I just... I am not for sticking around a job, especially when money's promised that was not given.

But at the same time, what's going to put us further in the hole? Yeah. Looking for a job, will you at least have some kind of income versus just no income whatsoever? I know. Yeah. And it wasn't the best choice, but my mental health improved a lot. afterwards, so I kind of... Well, how's your mental health with all this debt?

Not good. It's... I hate it, but that's the only thing that's stressing me out, fortunately, right now, but... Okay. So on here, I mean, you have $560 in there. It's a little low for a checking account. I'd like to at least see $1,000 just for safety reasons. And again, I'm terrified of that, zero dollars and savings. Do you even have a savings account? No, I got so-fi, but... Good. And that's great. Link in the description. below because there are sign-up bonuses and a really good high-yield rate, but you got it,

just nothing to put in there? Well, I got it, and I was trying to put more money in it, but it won't let me deposit. I have to, like, link my bank through it. I just recently downloaded it and put it in, so. Okay. You know, it's pretty chill to do. I mean, it's usually what you do with most high-yield savings is you'll link your bank account to it.

Okay. Yeah. Yeah, it was like the last week I got it. What were you going to put in there? Because you only have $516, though, and you're checking account. We wouldn't want less than that in a checking account. Do you have money somewhere I don't know about? I just put 50 bucks in there.

No. That's it. Okay. Okay. Yeah. We, what is this Rocky Mountain? That's my car. Oh, yeah. Okay, that makes sense.

Then we have prime video or make over like a rent or something like that of 10 bucks. Subscription. So I see you go to some gas stations, but then you also go to the gas station and get like three, four-dollar purchases, which I assume it's not just gas. Right. No. Yeah, we're getting some tequitos and stuff. You don't need to be doing tequitos right now.

In chef store, which chef's store? It's like a bulk food place. Okay, that's fine. That's a good way. That's a good way to save money oftentimes is the bulk foods. And then we're drawing money of 60 bucks. Who knows where the heck that went. And okay, there's the gas.

That's fine. Then the DDA would draw $240. And then we're getting some tequitos. And then we're going to some chicken, Longhorn Saloon, $4 tequitos, and Cole Avenue, something there. Oh, that's my storage unit. What? A storage unit? No, I, oh, sorry.

It's an expensive storage unit. Yeah. It's actually my boyfriend, we have it. We split it in half, so I get paid 40. What do you need a storage unit? What do you have at 27 that you need to store? Beast. I'm a beekeeper, so I have bee stuff.

Yeah. Do you make money off the beekeep? Not yet. Nope. Okay. That's an expense. You need to put a lot of money in to make money, yeah. Wow.

Lovely. Audible. That's okay. I like Audible, but it's just in your situation, we just want to save as much money as possible. and Yes, and then Adobe, I canceled that Like Photoshop and Lightroom

Good, and then McAfee That was an annual fee Yeah, $150,000. And then they reimbursed me like 60 Because I called about it I wasn't expecting it But yeah Adobe, which you've canceled

But then Wendy's, you can't cancel that That happens, so Miller Crossing, I don't know what that was Choice Hotels gets you more of what you value Comfort in It's calling your name Save on the stay Oh, and free waffles are yours to claim

We'll direct at storeshilltails.com This is a bar, yeah Great And Takedos and Lewis and Clark And Amazon and PlayStation A 50 bucks there And I think that one's guess It's kind of hard to tell in here

And then oh they care.com What's Care.com? That's what I, that was also annual fee. That's where I got my nanny job through. So that also got canceled for next year. Friendlies, which is probably a bar. It's a gas station? Yep.

Friendlies? 14 bucks? You just got $14 of gas? No, that was probably. Takedos, and then there's more tequitos. And then we're drawing something, prospect, 60 bucks. Spotify, more Adobe, glad you cancel that, and then more PlayStation. And yes, $30 of overdraft fees.

Right. So what you said earlier was not 100% true about always being able to pay things because congratulations, we're having overdraft fees, which is terrible. If we're having overdraft fees, then no, we can not be going and putting money on something that we're just paying back later if we can't even have money in our checking account. Correct? You agree? Okay, perfect.

Let us figure out where some of this sits. So we have $0 in savings, correct? Yep. Okay, so we're going to really starting from the absolute bottom negative. Bottom, like there's really not. You have $20,000 of debt. Total minimum monthly payments of $509.96. I mean, that's already minimum monthly payments on the debts, of which none are actually like good debts by any means.

At least the car has something physical. Well, everything else is just nothing. All the debts, minimum monthly payments are a third. A third of your income after what you set aside for taxes. Third of your income. What's your rent? None with my grandparents. Oh, with the grandparents.

That's great. That should help us in this situation dramatically. Thank goodness. Okay, so gas, I'm seeing, how much do you think you spend on gas on a monthly basis? Maybe $250 or so. Okay. Do you put anything towards the grandparents situation, like internet or utilities or anything like that? Or do they just fully take care of it?

Yeah, they take care of it. Okay, cool. I'm just going to lean this towards where you were. Okay. Now, going out to eat and just spending money on bulls, essentially, you know, we're seeing like $2,300. bucks. Which again, for a lot of people, that's not crazy, but with where you are in your income situation and the debts that are stacking up, way too much.

I mean, that could be going to pay off debts much quicker. Car insurance. What's your car insurance? That is about 156 a month. Now, what's the food situation at home? How is groceries done in terms of preparing food and shopping and everything like that? Um, so I actually, my sister and I have our, with our grandparents, it's like we have the basement apartment. So we kind of just take turns getting groceries.

You're your sister to live together? Mm-hmm. Oh, okay. Yeah. It's like a duplex. I don't know. So she sometimes shops for you. You sometimes shop for her?

Yeah. Yeah. Yeah, we'll get like our own stuff and then like stuff we both use. I'm giving you 300 hours a month. You're allowed to use. $300 a month, max that you're allowed to contribute in terms of groceries and everything like that. That's it.

Then make up a total paper, everything else necessary to keep the house afloat. $100 is what you're allowed to contribute to that. Anything else, well, health insurance, what are you doing with health insurance? You're above the Affordable Care Act thing. Yeah, that was, that's on there. That's like $40 a month. Health insurance? Yeah.

Oh, sorry. Well, yeah, your income would qualify for that. So I was thinking in terms of being on someone else's. But 40 bucks. That's great. Yeah. Happy to hear that. And anything else that you can think of that you have to pay for different minimum monthly payments on things?

I don't think so. Okay. Dogs, cats, because, you know, $200 with the chewies as well. Yes, I'm a dog. And then my, so my boyfriend will. I'll do purchases on my card and then he'll give me cash for that purchase. I just don't always redeposit all the cash. Well, before we go into all this, so again, your budget, the debt minimum month of payments,

$509, gas, $250, car insurance, $156, grocery, $300, $300, $100, solar pay for $100, health insurance, $40. Do you do things like therapy or anything like that? I mean, it sounds like you do have, okay, we need to go to therapy because you talked about, these different mental situations that you've been in that have led you to dramatic things like dramatic purchases or leaving a job just randomly. So I think therapy is 100% needed for you. It's needed for everyone, but there's 100% needed for you.

And as someone who does therapy has done therapy for a bit now, highly recommend it for anyone and everyone. Talk through these big things before you do them. I know. I'm hoping to take advantage of that when I go back to school because I do qualify for financial aid. You know what that means? Well, it's like a Pell Grant. Oh, you're going to a Pell Grant. You know how much you're going to get from that?

Has it been determined? I think $2,000 per semester. How are you paying for the rest? What does the semester cost of community college for you up there? I haven't checked yet. I think last time I went, but that was like seven years ago. It was like $1,500. In estate tuition there for a semester, 3,477.

So the other 1,477 were you expecting to cash flow or borrow? What was the play there? When are you going back? And August. Okay. Any of you thought about how you're paying for it? I was probably, no, I was probably going to do accept loans if I got those two because So you were in a position.

where you said a few months ago you've realized that the debt is really bad. And we were thinking of just borrowing more money in a situation where, as you've admitted on here, you do not know what you want to do. Does it make sense to go to college and take out debt for it if you do not know what to do? No. I love college. College is great when it makes sense. When it makes sense financially, depending on the avenue that you go.

And then when it makes sense for the career path and everything like that, college is great. You can also do things like certifications. There's certifications things you can do. There's even things like I've partnered with companies like course careers where you can get different certifications to different tech fields, stuff like that. I don't know if that's for you. It might apply to other people out there, but there's different certifications you can do as well. It doesn't all have to be going to college. Now, that's okay for a semester, especially with Pell Grants.

That's good. You know, we're only coming up with $1,500 a semester to pay for things. That's okay. but should that be going towards that when you don't know what to do when we have 30% debt debt on multiple things does that make sense right um no but if i just put like so i've had it planned out to put instead of like the 500 dollar minimum payments i was going to do like a thousand okay where are you getting the 1,000 from because of what is left over because you need to set money aside for taxes because the tax man always be coming. Okay.

You have $343.43.4. On a monthly basis following my very strict budget of which you weren't even close to following in your situation. So where was that extra $1,000 going to come from? Probably just was not considering taxes. Taxman. I know. The tax man cometh.

And what were you going to do this next year? Well, these people do want. Make Mother's Day even more special at Whole Foods Market. Kick off brunch or dinner with quality cheese and charcutory with no synthetic nitrates. Then go seafood. There's an abundance on sale at Whole Foods Market, where it's all sustainable while caught are responsibly farmed. At the bakery, grab seasonal treats like their strawberry pretzel cream pie, and you can't go wrong with a ready-to-heathe Kish Lorraine, deviled eggs, and fresh-cut fruits to go.

Celebrate Mom with Whole Foods Market. someone long-term nanny so I was just going to do that and go to school. And what were you going to do about the taxes? Oh, well, that's why I came here because I don't know. Okay. That's a good answer. It's a good answer. And so $343 is left on a monthly basis.

With that, okay, you need to figure out it could be, what are the things you like doing? Have you thought about your career path? This is the part of the conversation when we can go into that now. I know. You like? I really do enjoy working with kids. That's probably why I went back to it. So maybe elementary school.

Would you like to be a teacher? Not anymore. I was thinking more maybe like counseling or therapy. Okay. Okay. There's also, though it takes a lot of school and it's kind of expensive to do it, but there is the, especially for the income that comes with it, there's also like social work and stuff like that.

Have you thought about that? Yeah. School counselor would be cool. Therapists would be cool. You think you'd be able to do therapy well? You think that's something that would vibe with you? I think so. I definitely would probably have to look more into it and get therapy myself.

Yes. Of which I want to put in the budget. I'm having a hard time squeezing it in that right now, but it is very important. Okay. Look up different community resources. Sometimes there's things online, different programs that lower income people, of which you are a lower income person. You were part of the 48.2% of Americans who make less than $30,000 a year.

So in terms of those who work a full-time job, well, you're not even fully working 40 hours a week either way. Look at local resources and things like that for lower income people being able to seek mental health services. Okay. There are often options. I don't know the town. I hope there's options. And then again, online.

Yeah. Check them out. So, yeah, that's the avenue you want to go down. Yeah, it does not look good on paper, but I've been working like two or three jobs for so long. Like I just kind of figured going back to school and just toughing it out for that couple years. And maybe it would improve if I got a better job after doing the work. I don't know if that made sense. So, yeah.

Yeah, that can make sense. That can make sense. I'm just trying to figure out the best path forward. Is the return on the investment of what you're going to do, going to be better than the return on investment of paying off 30% interest rate, 29% interest rate, 32% interest rate. I don't know. I think we have to protect those first.

What we could do, $1,500 a semester. So that's $250. We could save up. each semester to pay for the next one, $250 bucks a month. And that, of course, gives us, like, no wiggle room. Because I, let's not go back in August, but I think we start saving up now to be able to pay,

starting in the spring semester of next year, pay it in cash, because I really don't want you borrowing more money. I really don't. I don't know. It's going to be hard. I think we might be putting college on hold for a second, for a second.

Okay. So $343. What you need to survive is $1,355 a month. So what I need you to do, first of all, what I need you to do, actually, fun fact, right now, while you're not in college yet, you're going to go be a barista, you're going to go do this, you're going to go do that. You're going to do anything and everything when you're not nannying to bring in more money and bring that from $343 a month in extra to at least $750. you're going to go ahead and bring in an extra $500 minimum, which you should easily be able to do an extra $500 minimum post taxes. Easily, please do that. Because if you don't do that, this is going to take forever.

And you're never going to have time to be able to go to college. You're going to borrow for college. And then you're not going to be paying any extra on these because you don't have enough time to work while you're in college. And then we're just going and going and going and going. It's just the interest is going to be accruing and accruing and accruing and then you're going to be in a position where you're in your 40s and we're finally starting to pay some of this off. and we're going to still have to pay off student loans, and we have nothing safe for retirement, and then hopefully you're in a better job that you like

with the career path we're going down, you know, not making a ton of money, but that's okay. But at that point, you won't have any retirement, then we're going on our 50s, and we're going on our 60s, and then we don't have enough money to retire because we decided to not just work our ass off right now,

and then you're going to be dying on the Walmart floor. That's the dark future we're looking at. I prefer to go the light option, the option that looks like yay happiness. And what that looks like is, okay, let's sacrifice now. No more DoorDash. We're not doing that at all. Instead, we might be running DoorDash.

You know, no more going into bars. You might be bartending. Yeah. Yeah? So, boyfriend, I'm sure he's a pleasant guy. You're not going to see him as much because you're going to be working your ass off because you got yourself into a situation. And now it's time to put on our big girl shoes or big girl pants, whatever.

And we'll go make that monies to pay off the monies. You already borrow. road. Yeah? Deal? Do you agree? No, I agree. Okay, cool. So you'll do that? Yes. Okay. So if you will bring in an extra 500 hours a month, then we can put that into this process. Okay. If you're 100% sure you're going to do that, are you? Okay. Cool. And we'll say you have an extra $750 a month. It might take you a few weeks to get a job. That's okay. But just immediately when you go home, the first thing you do is job, job, job, job, I'm finding a job and it's bringing me money. So $500. extra a month, $750.

What I need you to do for the first two months after finding this job, you're saving up to about $1,500. So $750. You're putting that in your high yield. The so-fi that you already opened is fine or anywhere else as well. That's the one that I use. That's your one-month emergency fund so that if anything catastrophic happens, you can survive for a month.

Will you go and find another job? And we know you love finding other jobs because you're always finding new jobs. Well, at least you're good at this point, though. That is the one upside of always finding new jobs, right? is that you know how to look for jobs, know how to do the interviews. So where we're doing from that, I think just,

I think we might avalanche method this thing, honestly. Just where the minimum monthly payments are. Yeah. And just giving you extra room. I think actually the upgrade one's the one we're going to attack first. Then you're going to never spend on it again because it makes no sense. You've maxed it out multiple times and paid it off multiple times.

You're not going to do that again because it doesn't make any sense. And I do not want you. sitting here in six months to a year and saying, oh, I have a maxed out upgrade card that I paid off following these guidelines and then maxed out again. We're not doing that because your life is important. You matter. Your future matters. Please, please. So $4,226 divided by that $750.

It's going to take about six months to pay that off. So now we're nine months in, but upgrade is gone. meaning you have an extra $200 a month extra, which is incredible. You're still working as hard as you are at that point, still working as hard as you are. So you're bringing in that extra $750. But now we have $950 because we have an extra $250. That's incredible. From there, the capital one, we're paying that off, boom, in less than a month

because at that point the balance would be lower. You're doing minimum payment on everything else, and we're doing the upgrade first. And then the capital one that's gone in less than a month. So we're like 10 months and then you're putting all of it towards the quix silver card at that point with where the balance should be that should only take a month as well. So now we're 11 months in. At that point you have the car at 5.74% interest rate. Tell me the car. What's the car? 2014 Honda Pilot. How many miles? 114,000. Okay. Trip it over the miles. But as far as I understand the brand and everything, it should be okay. How's the condition? How's everything? Um, it's good.

I guess I need new, a CV shaft is what it's called. Do you know what you know about that, Bram? CV shaft? I think that's what it's called. I have someone to work on it. Um, I think the part is like three or four hundred. Mm-hmm. So it's going to cost you a thousand bucks, labor and everything?

Possibly. I have someone with a garage. I know nothing about that part. Well, this might be delayed by a month so you can do that if that's 100% necessary. And of course, then we're at 12 months of this part. We'll just bake that end of the process. So a year from now, you have a one-month emergency fund. You've taken care of that.

You've paid off upgrade. You've paid off capital and then you've paid off coaxilver. That's where we're at in a year. Okay. From there, what we can do with the car situation, which I'm not absolutely thrilled with you having the loan, it's a 5.7.44% interest rate. I think we can get a better return on our investment, getting you a degree than that 5.7.7.7.7.7.7% interest rate plus depreciation. I think we can. And I'm just thinking about this in a fully mathematical

perspective. Trust me, if you're in that situation and then you have the fire or lit under your ass because you've been going crazy and even paying off debt and you're just feeling the exhilaration behind it, then sure, go ahead and pay this off as quick as you can if you want to. In this situation, because you care about this. And hopefully during that year, you will have done some self-discovery, taking some quizzes online, figure out what you want to do. You then meet with the counselor. We can get you back to school. It's going to be awesome. You're going to cash flow it. Because you have an extra $1,000 a month, you are paying for that semester.

You're paying for that semester. Then you also have some extra money. That extra money that you have on a semester basis that doesn't go for the $1,500, which, by the way, should be an extra $1,000. Well, okay. Well, during that time, the minimum of the monthly payments will have gone down because you don't have them. But at that point, you'll quit your second job because you're going to focus on school, but you'll still work the 35 hours a week on the nannying.

The hours for school, it might be funky. They might be like late hours. They might be early hours because the nannine are also kind of odd hours. But really truly works at 35 hours a week. We might be down to like minimum of payments down from the thousand to with what we did before, like 500 bucks. So maybe you can only afford to do minimum monthly payments on the car and then cash flowing every semester. And you have a semester's worth of credits? Yes.

So you can go ahead and get your associate. degree. But then with everything you've said, you need at least a bachelor degree. And then you talked about some positions that would require a degree beyond that as well, like to be a therapist and stuff like that. So from there, the associate's degree, you just need to know exactly what you want to do for a career. And then we can talk about paths forward from there.

One thing I really want you to start doing at that point, though, we also need to save up and have an emergency fund. Maybe you have a fully funded emergency fund before. you start cash flow in school. So maybe it's a year and a half before you start cash flow in school. I also really want to see a Roth IRA max out on a yearly basis because right now you're still and you're even at that point, you're finishing up the best decade of your life for compound growth, you know, we want you to get to a point where you have at least a million dollars by retirement. And by the time you and I are ready for retirement, who knows what social security will look like.

And a million dollars certainly won't be enough. But we need to get you at least to that point. And we're not even close to looking at the horizon right now. So a lot of things are are up in the air in a year, year and a half from now. What do you want to do? What do you want to do? What does your job look like at that point? Are these debts fully paid off? Do you save up the emergency fund, which I would of six months, which would be $10,000? Because it's below $10,000 with what you need to survive, but I want a minimum of $10,000

just in case something medical happens or else in case a car breaks down. Okay. So things are up in the air, but what's most important right now is you get that one month emergency fund. You go get that second job. You pay off the upgrade. You pay off the capital one. Then you pay off the quicks over. Then you save up a six-month emergency fund.

Then what you determine is most important to do from there is up to you and we can have a conversation at that point. Okay. But that's what the next year to year and a half looks like. Yeah. And go bring even more money in than I said. Minimum extra $500 a month post taxes. Yeah. bring in more if you can go crazy go crazy just absolutely wild i don't care if it's federal minimum

wage work as much as you can and get better jobs the more you find them throughout the process but i don't want to be negative nancy right now yeah though you're an incredibly nice person and i think everyone has just uh you know is rooting for you and everything like that i need to be the real person and say you head down the path you're currently heading down even where you've cut back a bit bit. Yeah. You're dying in poverty. Oh, yeah. Like, or you're declaring bankruptcies, you know, potentially multiple times throughout your life because you've gotten to the point where you've paid off debts. So let's to say, you've gone through bankruptcy. The debts are gone, you know, depending on what you do. I see no place where you're not going back into them

at this point. You know, we need to deal with some things. Definitely. Yeah, I, my grandparents I live with there's finance everything. So that's kind of the example I have. And then my parents kind of both aren't financially stable either. There are certain ways to go about zero financing. That makes sense. But I doubt that's what they're following. One thing you can do if you like this method of following things,

I partner with the FIS card. And it's actually geared towards the college students and you'll be in that situation again. It acts as a debit card. It's kind of an instant charge. So it builds credit. via a credit method. When you swipe the card, boom, yes, it's on the credit card, but it immediately gets paid off with your checking account.

So it acts like a debit card, but it helps build credit. So you can get the double effect with it. But what's very clear, follow my budget, use a budgeting app of any kind. I use Rocket Money. You can use any, whatever works best for you. You can just use a spreadsheet for all I care. Okay. But are you ready to chop up at least the upgrade card right now?

The upgrade card. The upgrade card. And the stupid, evil, evil, absolutely, death, disgusting, stupid. What was it called? Credit one. Credit one. You ready? Yeah.

Can you go get the scissors, please? In the kitchen? Yes. This is progress. This is the awakening of the future you. This is the rest of your life starting to make progress. You being able to see the sunset on the other side of the horizon, on the other side of the hill that you're going to be climbing up. Credit one.

Which? Okay. So hold. I want you to do the honors, but I'm trying to black out some important information first. This is, I don't think, I don't think I can. Cover up your name on here. Cover up your name on here. The best you can.

That's perfect. So you can do that. Now, chop it up in camera. Lift it up. That the card. Yeah. Yeah. Yeah.

Yeah. Yeah. End it. End its existence. Okay. Woo. It's gone. It's gone.

It is done. Now go close account as well because not just for safety reasons, but because they are charging you stupid fees on a monthly basis. So, fuck that card. F*** that bank. You're done. You're free from them. You're free from them.

And you're going to go live an amazing life. You're going to sacrifice to do it. You're going to be incredible. And everyone's going to look up to you because you're going to make an amazing life happen. Yeah? Yes. Do it. Thank you.

Any final thoughts? Um, no, I just got to do better. Yeah. I'm excited to get rid of the debt. For Jess, it's going to be a really long road ahead with lots of hard work, but it is worth it. And I hope she doesn't. She took the first step by coming on here and by chopping up that card and closing that account. So good job, Jess, for that.

For your hammer financial score, you kind of hit the nail on the head with your guest, but spending in a budget. Not great. Should it be tortishing? Should it be doing tequitos, all that stuff? It's not the worst we've seen. It's definitely a two out of ten. Debt.

There's nothing in collections. There's nothing owed to the IRS, but I cannot go higher than a one out of ten. Retirement, nothing. Zero out of ten. Emergency fund? Nothing. Zero out of ten.

Real estate, not even part of the conversation. Zero out of ten. For your hammer financial score, Jess, 0.5 out of 10. Check out all the resources I'm linked in the description below. They are what I use or would use in different situations, like a high-yield, savings account, different educational resources, and places to invest like Acorn so you can get a free

$5 if you sign up using my link below. Don't forget to follow my Instagram and Twitter. Thanks. USAA knows dynamic duos can save the day like superheroes and sidekicks or auto and home insurance. With USAA, you can bundle your auto and home and save up to 10%. Tap the banner to learn more and get a quote at usa.com slash bundle. Restrictions apply.