Financial Audit - Taking Out Student Loans To Buy Fast Food 3 Times A Day

Episode Date: July 7, 2023

Check out these fun things: Patreon: ⁠https://www.patreon.com/calebhammer⁠  My socials: ⁠https://linktr.ee/calebhammer⁠  Do you want to be in a Financial Audit and you're in the Austin area? Email [e-mail] Sponsorship and business inquiries: [e-mail]  _______________________  Timestamps: 00:00 Do you even know how much money you make?! 03:11 Graduate school 05:19 You look like... 05:54 Very bad spending! 06:55 GOING OUT TO EAT THREE TIMES A DAY 16:53 F YOUUUUU 17:35 Why holding CC interest?! 20:10 WHAT ARE YOU TALKING ABOUT 22:54 Very weird mortgage?? 27:30 Clean up this mess! 34:00 Get your crap together... 39:27 Hammer Financial Score --- Support this podcast: https://podcasters.spotify.com/pod/show/calebhammer/support Learn more about your ad choices. Visit podcastchoices.com/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, my name is Edwin-Baltista, and I'm 25 years old based in Austin, Texas, and you're watching financial audit. What do you do for a living in Austin, Texas, 25-year-old? Yeah, so I am a management assistant for a local nonprofit here in the city, but we have offices throughout the state and our work impacts in multiple cities. Okay, how many hours a week do you work? I work about 25 hours a week. Okay, and what's your, is it salary, hourly? Hourly. How much?

$25 never. Okay. Do you think you hit that $25? every time or is that just about an average? It's pretty much every time my paycheck's pretty consistent, like give or take an hour or two less. What's your paycheck biweekly or what? Twice a month, yeah. Okay, so before taxes, you're probably making about $2,700 on a monthly basis on average.

I would say more closer to $2,500. Okay, so you don't always get $25 hours? Not always. There's maybe like one paycheck or two that I do like maybe, like an hour. I get, not less than five or, you know, hours at the most, but it's in that range. Usually my paychecks are relatively the same, though. About $1,000 after taxes. Okay.

Wait, $1,000? $1,000. It's like usually what I... Wait, what? It doesn't get cut in half. Oh, I mean, by paycheck. Like paycheck is $1,000, and then per month, it's $2,000. It goes from $5,000 to $2,000.

Where are you getting $5,000? You said your weekly paycheck, your bi-weekly paycheck is like $2,500. I'm working part-time, so only work 25 hours a week. You said you make $2,500 by-weekly. I meant monthly. Okay. Okay. So it's probably what after taxes on a monthly basis?

$132,000. $1,032. Why is it a 50%? I'm not sure what you mean, like my monthly... It goes from $2,500. hours a month to a thousand dollars gross yeah that's gross 2,500 to gross and so after taxes it's like a thousand dollars a month per paycheck dude you keep switching between a month and biweekly what is what well I get paid twice a month so yeah it's usually twice a week so

not twice a week I'm sorry twice a month so I'm not really sure my monthly total my monthly gross is $2,500. Okay. Monthly gross. What's your monthly net? Monthly net is roughly $2,000. There we go. That makes so much more sense.

You kept switching between biweekly and monthly when describing yourself, but without the context of switching. But that is okay. $2,000 a month. First of all, that's incredibly low. It is, yes. So what else is going on? I mean, that's pretty much my income.

income source. I don't have any other side hustles or anything like that. I have a relatively low housing cost so that, you know, helps out. But I mean, I'm, I mean, I'm pretty much living off of $30,000. What else you're doing with the rest of the hours of the week? I'm a student. Oh, you're a student. Okay. Okay. Where do you go? You too. Oh, okay. What do you study? Community and regional planning, urban planning. Interesting. Okay. What year are you? finishing up the semester actually so graduating in May. Graduating in May.

Okay. Very cool. So what do you plan to do with that grad graduate degree? Plan to stay here in city and probably work for the city or some governmental agency or possibly stay in the nonprofit sector. What's like the position you would get? Really depends on, I guess, what I decided to pursue after. Like I'm right now in the advocacy space. Do you know what you want to pursue?

For the most part, I think I definitely want to say within. local politics and governance, like, whether that be with the city. I don't know. I'm kind of... Any job specific, though? That's what I'm trying to... Yeah. No, I don't have, like, a clear, you know, like a planner job.

Like, I want to... Like, I'm comfortable where I'm at and I can transition from the role I'm in where I'm the nonprofit at to, like, a more hands-on direct role, which is, I think, what I'm going to do, but I don't have, like... Well, I'm trying to see, like, what a position is that you'd want and, like, what that pays. Oh, okay. Like, for an average planner, I would say, like, a, like, a job out of, out of grad school. would probably range anywhere from like 60 to 80.

Okay, that's good. That's kind of what I'm sure for. Are you cashful in school right now? My what? Cashful in school? Cash what? Flowing. Cash flowing.

School? Oh, as in like, like my pain, how am I paying for it? Yeah, I took out student loans. Oh, okay. A lot of student loans.

Well, I assume, you went to undergrad as well. Yeah. Did you student loans those? Yes. Okay. And I graduated during the pandemic. So that's another reason why I,

started grad school because I was in kind of like a limbo state and know what to do. Well, that's not a good reason to go to grad school. Well, I knew I was interested in the field I'm in, but I just, I needed more, more education and more knowledge of, of planning, and I didn't get that in undergrad. So with this program, I definitely got what I wanted, but obviously that is... You look like that dude that's on TV and a bunch of different sitcoms. So you not know what I'm talking about? I don't watch TV that often.

Well, neither do I, but I've just seen pictures of them. What show? I know. You look like Max Greenfield. I've never heard of this, man. A picture of his on screen right now, but you look like Max Greenfield. Doesn't he? You know?

Ugly Betty. Yeah, you look like the guy from new girl. So before we go into your money, I want to hear from your own perspective as honest and as transparent as you can, what is your financial situation look like from your perspective? Yeah, so my financial situation right now is definitely, not great. I know I have a pretty bad spending habit. And I want to kind of bring that in, but also just start saving for an emergency fund, but also possibly for a car, if that's something that I could. Do you not have a car right now? I do, but it's paid off my mom. It was a gift for my mom

like a few years ago. So like I don't pay actively for it. But it's a good thing. Yeah. But I just like a newer car, I guess. But it's not. It's not. What's the car? It's a 2017 Nissan, Centra. Okay. It's not a bad, you know, car or anything.

I just would prefer something that's maybe electric and maybe you're nice. Okay. Well, don't have to rush into that. I don't think that's on the priority list of things in grad school. Let's take a look at your,

take a look at your stuff then. We have a chase checking account. So, yeah, only 1,382 went in and more went out. A thousand. 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 usaa.com slash bundle.

Restrictions apply. 400 went out, ending with 216. Kind of, you know, one big thing could hit that and then overdraft or denied, depending what the situation is. But, yeah, you get paid in cash because you put in $700. of cash. It was just a deposit, like a random, like a... Where'd you get 700 bucks from?

It's kind of a long story, but it was just a cash deposit that I had from... It was transferring from another bank account to this bank account. Do you have a sugar daddy? No. No, I guess I'll just come up in front and say right now as far as like, because this has to do with my other bank account, my UFC account. I basically got scanned last month in that sense of, in the sense of like it was a check. deposit and and I think it was just you know my own kind of um no the reason why I asked if

you had a sugar daddy oh that's a person oh that's a person who I sent it to that was his username I know that's one of those things I was just like I was a it should have been a red flag right then and there but I mean at the point I was already too deep in that I couldn't like you know not do it because it was four hundred dollars right Yeah, that was like half of what I cashed up him and that's kind of where I've been kind of dealing with that. Like it was just like a straight up scan. Like this guy was, I was trying to help him out as far as like he came up with his story. Nigerian Prince?

No, it was just like a one of those things that were just like trying to help someone a stranger out kind of thing where it was like, oh, I need money. Like my, I need to pay my rent and my kids are like hungry. with the story and I was like, okay, well... Where did he approach you? How did you get in contact? It was like a random person, but it was just like, I don't want to go too much in the details, but basically it was just like a cash mobile deposit thing where he had a check. And I knew, I knew like the situation was very sketchy going on, but I was just... Well, that's fine. You went into a gas scan. I'm just very curious how he got in contact with you in the first place.

It was a friend of a friend. So it was really, I didn't know the person. Yeah, you took out $400 who, or you took out $300 from an ATM. Who knows where that way? You took out $600 from an ATM. Who knows where that went. Spicy Boys going to Spicey Boys Lucky Lab Coffee Spotify subscription But actually Not too much in this overall state Really not too crazy

But that was the older ones Not really an opportunity No it was the updated one I said Oh okay sorry Oh yeah yeah that was the new one yeah So but there's I mean It was not really an opportunity

For a lot of money to go Because not a lot of money came in Yeah So I'm glad it wasn't spending But crazy In acorns you haven't acorns subscription. Yeah, I haven't

like an investment I was like $100 in that account so that's not really something I'm too using too often. Okay. I think I have like a $5 deduction every month

or something like that but it's just kind of a good set aside. Capital One another checking account? Yeah. Okay, I don't have an updated one for that. Yeah, that one's like monthly so I wasn't able to pull a new one just because of the month.

So for the month of February. Yeah, dude, Started with 100, ended with 100. That's, yeah. Sketch. That's usually my primary checking account right now. And I know some people are really good out there with having low balances because they manual to pay everything, but most of us were on automatic payment.

So that's where it automatically sketches me. Oh, okay. So from here, let's see what we got going out. We got Kirby Lane going out to eat there, the Grackle, Alderado Cafe. See, now when you add these together, it's a lot more. Lots of parking. New coffee, Tiff's Treats, Pott Belly, Summer Moon Coffee.

So now we're PayPal and out. Again, now it's really starting to add up PayPal, or I'm sorry, P. Terry's, Texas low income. That's my paycheck. Oh, okay, okay. Raising Cains. U.T. Food, U.T. food. Top notch.

Coffee. Dude. Okay. For someone who barely makes anything in your living in, one of the more expensive places in the United States. And you're taking out student loans to go to school. You're basically, you know, in a way, you were taking out student loans to pay for all this. Not necessarily just because my student loans paid directly to my tuition.

But do you understand what I'm saying? Yeah. If you weren't spending all your money on this bullshit, you could put it towards school. But since you did not do that, you had to take out student loans. It's mostly food. So I have to eat. I just need a... Yeah, you have to eat.

You can get groceries. I could, yeah. Okay, that just paint my brain. Chipotle, Summer Moon Coffee, P. Terry's first watch, Lucky Lab. No, you don't have to go to Lucky Lab. No, you don't have to get burgers and fries from Pete Tarries. No, you don't have to go do this.

That is not the kind of calories you need to have, Summer Moon Coffee. And Zilker brewing, yeah? Is that necessary for your caloric intake to survive on a monthly basis? Waterburger, Medici, Spicy Boys. Love spicy boys. I don't think that's necessary for you to survive. Pop Belly, Thundercloud subs. Oh, good, because Thunder Cloud subs absolutely suck.

They're horrendous. I don't know why people like them. But it wasn't that. It's actually Thunderboard coffee. SourDoc. Level credit. What is that? Level credit?

Oh, that's like my reporting credit agencies, like a $6.95 is what the charge is. Like I report like my utilities and stuff too. Probably rather you use something like FIS, but that's fine. P. Terry's food service. So this is almost like every day going out to eat. So I'll first check in account, I was like, now I'm like death. And we're borrowing because we can't afford to go to school somehow.

I wonder why. Okay. And then we have university credit use savings. Okay. So we put in 800 bucks. Well, then we took out 700. Then we took out $800. Then we put in $500.

Then we put an $800. I'm very confused. It has to do with a check. The situation, I just... And he balance $109. Yeah. Okay, so you don't have savings. No.

Okay. There's nothing left other than credit cards. There's no more checking accounts, right? Not that I see? Or savings? I believe there is one more checking account. Do you know what it's called? First National Bank.

But that one's not really used too often, but... I don't have First National. But it's not used much? No, not really. Okay. Yeah, I don't have it. Not in the first batch I sent you. If it's called First National, I don't have it.

Convenience. Nope. All right. Well, yeah, there's usually like $100 in there, so it's not really much. All right. Discover card. Let's see what's going on here. Well, I don't see the bounds or anything.

All I see is this is just your purchases. Yeah, so that's like the first, I think that's the first built with the updated version. I've seen you has the charge it on it. For that month. You have no balance. What? It just has the charge. but no balance.

Oh, okay. Yeah, yeah. So this is the updated version. So, yeah, the balance, it's the way it came out. What's the balance? What's owed? I'm assuming there's debt from these conversations so far. I mean, I just paid it off.

I could tell you right now, though, but... You just paid it off? Not entirely, but most of it, yeah. Yeah, because the first Discovered bill I sent you didn't... It was just me making one debt payment, and then I racked up those charges, which I just paid off. And so... What's the balance on your Discovered? Right now my balance is

$130. Oh, okay. Have you been paying any interest? Yes, but it's like a couple dollars. Still not good. And then if we weren't going out to eat enough, we have Chick-fil-A, Spicy Boys, B'Neu Coffee and Lucky Lab coffee,

B'Neufi, Chikfilet. I run a coffee. You're relentless. Dude, I make better espresso out there than all of that. I need to invest in a coffee machine. I definitely. You can get a great, Rueville,

thank you, mom, coffee espresso machine that is perfect for starting espresso 500 bucks. Not that you can afford that right now, but with all this coffee adding up, I bet it gets the $500 real quick. And then you just have to get beans. Chase, oh, no, that's the checking.

Capital One, quicksilver, balance 100 bucks. Okay. Yeah, you paid this one off. Good, good. So there's not outstanding dead on there. Again, where are we going out to eat enough? I don't know, but we're definitely adding dominoes. Colorado Cafe, Bird BirdBird Biscuit.

I've wanted to go there. The new coffee, Bird Bird Bird Biscuit, Medici, top notch, Bird Bird Bird Biscuit, and Panero Bread. Bird Biscuit's really good. You should try it out. I want to, but I'll be doing it without any bad debt. Or without trying to, you know,

borrow money to go to school. Blue cash every day from American Express, New Balance 126. You paid this off as well. So it's the new balance. So I'm assuming you're paying it off. Yeah. Buddy. Waterby, Toonle, Waterburger, Medici, Uber Eats, a food service, tacos, tacos, Summer Moon, Clarna. Oh yeah, it's like a finance.

I know what it is. What's financed? It was my cousin's wedding gift. I already paid it off. It was just like 50 bucks. You can't afford to get it. If it's 50 bucks and you can't afford to get it, then you don't get it. I had to get him a gift.

If you can't afford it, you don't do it. Lucky Lab coffee. And you're also paying for it on a credit card, by the way. You're paying your debt with a debt. Bnu coffee, birdbird biscuit, and some lounge, 30 bucks. Dude, you're obsessed with spending money. You go out to eat twice a day plus coffee at this point. That's pretty much right, yeah.

I mean, right now I don't have a lot of time to cook, which is one reason why I don't. Oh, fuck off. But, I mean, I definitely know that my spending food habits is something I really wanted to address. There is time to meal prep once a week. There is time to push brew on a $70. Kurek machine. You have time. Don't borg to me.

If you borgheim me here at the table, we're not going to make any progress. Don't borg for me. So I've looked at Discover, Capital One, and Ammex. So let's go back to your previous email. Dude, you have so many different things. It's absolutely wild. Chase Freedom.

Let's see. You didn't fully pay this one off. But, yeah, and you lost 277 an interest. I can just small, it's kind of small purchases, but across a bunch of cards. Waterburger, Banu coffee, Banu coffee, Medici, Medici, those are coffee, by the way. And El Takarido. Oh, it's tacos. Here's another.

So, Southwest. Let's see what you did here. You did pay that. So I'm glad you're paying it off. I'm not going to beat you up for that, but I'm going to beat you up with this. Like, AustinPolitics.net?

What even is that? It's like, neighborhood, $20? That's my neighborhood association. And then the insider news letter for city politics. Did we look at Capital One? Was that one that we looked at?

Venture one. I have Venture and then Quicksilver. Okay. We looked at Capital One, MX, Discover. F2. Okay, so Capital One Venture. Again, you know, within the $150, $200 range of purchases,

you didn't fully pay this one off, so interest charged $3.15. With these small little interest, I wouldn't be surprised if we were losing like $50 a month on interest, bringing in only $2,000 on a monthly basis post-taxas. Guess what? We're going to Merititia. We're going to Burbiscuit. Having had enough of those birds in their biscuits and Cobbo-Bobbs and Lucky Lab Coffee and Peatary's and Summer Moon.

This is like a Austin wish list. list of just spending endless money on here. Apple credit card. 277. That was like a refund for a hotel for my cousin's wedding that was refunded and put to another card. So it was put on my car, but we put it on a different card. So it was refunded. Okay.

I do see that. Automotive something. Oil change. My car break replacement. Then you have a few subscriptions it looks like. Yeah. What are your subscriptions? Three subscriptions.

One of them is like an Apple Watch care and then Paramount. And then I forget what the other one is. Which I'm not sure. Mine is always like Hinge Premium Plus. Because I'm desperately single. Okay. And Lowe's credit card. You have a Lowe's credit card?

Yeah. So my, I bought a condo. a condo last year and it had a refrigerator. So I finance a refrigerator on that, those card. You're not fully paying this off. You're only putting $100 to it. It's almost paid off. It's almost paid off, but why not just pay it off? Didn't have the money. You know why you didn't have the money? Birdbird biscuit?

Because I'm poor. No! What are you talking about? What do you mean? That's going to piss me off you because you're poor. You spent more than triple what the balance is on here on bull-s- On food. On bull's bullshit. I mean, to some degree.

What do you mean? Well, I need food to live. How do you just say that again, even though we've clearly talked about last time how you can meal prep for a fourth of the cost on a weekly basis, maybe a fifth or a sixth of the cost on a weekly basis? What is this? You need food. You did not need bird bird biscuit for your caloric intake on a daily basis to survive. That's her. Thank you.

So no, you don't have this because you're poor. You have this because you're prioritizing your spending on what you're throwing down into your gut three times a day. Coffee in the morning, then you're getting lunch, and then you're getting dinner. Usually I'm angry at the debt, but I'm angry at you for saying that. What is this? What is this? Chase Freedom, $2,515? Yeah, is that correct?

That's the updated version. I mean, I paid it off. Oh, it's paid off. Oh, because we looked at the chase anyway. Yeah. Oh, God. How's about to just die? Then we have lots of student loans.

Are those all the student loans? Yeah, to my knowledge. 3,500 plus 2,253 plus 4,500 plus 2,500 plus 2,500 plus 2,100 plus 2,100 plus 2,100 plus 2,100 plus 2,100 plus 2,100 plus 2,100 plus 2,100 plus 2,137 plus 2,100 plus 2,137,000,000. plus 2,032 plus 14,000 plus 12,000. Oh, buddy. That's a lot of student debt you got there. $3,622. I can't see what the interest rates are.

Oh, of course, at the top of the page, it says what the current balance is. Yeah, I'll go say it has it on there. Okay. Great. Well, because they're deferred right now, I can't see what the interest rates are. I'm very curious. Yeah, they kind of vary. I think some of, like, the unsubsidized ones are like maybe two or three percent.

They're not anything ridiculous. but they're not being paid. It's like the highest. They really don't know. They're all federal. That's a lot, though. They're not going to be forgiven. Probably not.

And you also have a mortgage, which is very curious. I do. It's a very cheap mortgage. Where is this condo? Yeah, so I actually got this condo last summer through the city's smart housing program. I think I saw one of your videos that went on here so that they were in a smart housing rental, but this is a ownership unit. Yeah, so basically it's just subsidized housing and it's income restricted.

Yeah, it's income restricted so you can't make more less, more than a certain like threshold. Where in town is it, is it? Allendale. Kind of burn it 2222. Okay. That's cheap. I mean, it's a studio.

It's a 400 square foot studios. It's like only thing like super. Purchase? Hmm. You think a studio is? a good purchase out there. I mean, I lived in a studio literally across the street and it was fine.

And I actually... No, I know. I just wonder if you're going to get like a return on this investment. I'm not looking for a return. No, I'm not really looking for a return. And I can't really make a return off of like a income restricted unit just because of its nature.

Like it's, um, it's only, it's, um, increases like 2.5% every year. So it's like not appreciating. Huh? It appreciates 2.5% each year instead of like the, market. What do you mean? Guaranteed? How does that work? Because the city has certain guidelines regularly. And they say it's worth 2.5% more than it was last year. No, it's just like you can't exceed, it can't appreciate more than 2.5%. So I mean, like that for instance, like this

unit was first purchased by, I'm the second owner. It was purchased for $99,000 and was resold to me for $106,000. So in those years it's a, I would not have put my money that. Why did you do this? Because I was paying $1,200 for rent in this. subsidized unit and I found this this place. This is cheaper, but now you have money locked in there as something that cannot appreciate with where I am bullish on Austin

in the long-term future, not within the next year or two, but you're locking your money into something that is not giving you a good return in, but not even keeping up with inflation barely in normal times, you know, on like that 3%. Yeah, I mean, the main thing for me was just trying to

secure housing but also affordable housing. No, I get that. I do. I just wonder if like the temporary thing. Also, you could have easily paid your rent if you weren't doing all that crap with coffee. And again, it comes down to just where you're allocating your money. Your budget has to be like 75% Medici coffee, Burr-Ber Biscuit. Yeah.

Yeah. $733, no month payment. That's fantastic. I mean, that's, well, I mean, it's fantastic for the area. I mean, it's unheard of. It is, unfortunately, 36% of your income. income, so it's still way too high, and you're locked in it. But we need to get your income up.

You're about to graduate. That'll help with things. What is the interest rate on this thing, though? Like 3.85. Oh, yeah. Yeah, 3.875. Okay, good. I'm happy you're able to lock in there.

Dang. I'm very iffy about this. How much did you put down? Not a lot. I mean, I definitely, a couple thousand dollars. I'm trying to think back exact numbers, but... Interesting. Maybe like 5,000.

It wasn't really, like I said, a lot. It was just enough to qualify and then... I really didn't know this was a thing. This was really curious in Austin specifically. I mean, my realtor said that she had never seen a unit that low. And as someone that has worked in real estate and helped people find housing, I never found a price out. So it was kind of why I jumped on it and was just like, yeah, why not?

But I do see your point as far as, like, you know, investment. I never came in with, came in with that mindset as far as, you know, where am I putting my money at, but... I mean, you only have a few thousand hours. locked in anyway, so it's not, but one thing I will say about my mortgage is that

it is, my principle is like less than half of my interest, so I'm definitely wanting, once I get more income, you're at the beginning of it. Yeah, I want to, you know, put more towards that. Maybe, I mean, it's under 4%. I don't know if it's worth it, mathematically

speaking. Because 10% in the S&P 500, which is the average will beat 4% every single time. That's the math behind that. That's only, if the money goes towards the S&P 500 and not the extra money that you'd put towards the mortgage is going to coffee and bird bird biscuit. Is that it? I believe so.

I believe so as well. Student loans are my main concern, but I don't know what the interest rates are. Yeah, I'm not sure why they don't show it on the screenshot I sent you, but... So it's actually not my main concern. Right now, your minimum monthly payments with a mortgage and what the student loans will be coming soon. And then obviously with what you're spending, it makes no sense for your income. What we need to do is immediately, are you job shopping yet? No, because I'm kind of hoping to stay where I'm at as far as the nonprofit, but like not in the same role.

Better job, though? Yeah. Have you had conversations? Yeah. Yeah, they're definitely open that they want me to stay and transition to a different role. To about what kind of income? That's something that still, you know. What do you think?

I'm shooting for 60, 65. Okay. Okay. If you do that, the thing is from here, there's a lot of if, if, if you're a lot of, if, ands and butts, which is actually curious, because we haven't had this in an episode right now. What is very clear? I mean, you've already borrowed everything and put it towards the student loans. So there's no more to borrow and there's no more you can, okay. It's already done. It's already done.

I also did just get my income tax return a few days ago and paid off a lot of my credit card debt. But you had credit card debt? What? You had credit card debt debt that you were not paying off fully? Oh, no, no. Well, I carry a balance, like a small balance every month, so I was just... Why do you carry a small balance on every month? Sometimes I don't either have the full amount of money to pay everything off, but it's something.

You're not a credit card person. Chop them up. You're not a credit card person. It's fine. It's okay. There's nothing prideful about being a credit card person. You just can't use them. Totally chill.

Do everything, cash, or since you live in the modern age debit card, tracking it via a budgeting an app. I'd use the card that I recommend a lot of people here I'd use the FIS card helps you budget and also helps a build credit score so you're taking advantage of the things like you're kidding with the credit card but without the negative things that you are dealing with like losing interest

don't use credit cards anymore pay them off stop budget budget when do you graduate me and then right after that you should get that new job within the month good

so let's just say $60,000, okay? Because what we need right now, well, first of all, right now, what you should do because you have no savings and that's incredibly risky, especially someone with a mortgage, even though it is a cheap mortgage, and as soon as you're coming up,

you need to since your mortgage is so cheap, probably only do like $12,000 to $15,000 emergency fund, but you need, it's so risky that you do not have that, you need to save up for that immediately. you need to cut back everything that is not gas and a few hundred bucks for groceries and then, you know, any kind of insurances that you're forced to have and then your mortgage payment.

Other than that, no more, and I have absolutely no hope, no offense, but just from the conversation and you're saying, well, I have to eat to survive. I have absolutely no confidence that you'll cut back on that, which means I think for the next two months, I would try to build that up as quick as you can. You're not going to be able to with the $2,000. Um, like not too much. You probably only have a few hundred dollars left over. You'd probably save up about a thousand over the next month.

Unfortunately, I don't think that's going to happen. So realistically, you'll have no savings in two months when you start your job. When you have the $60,000, though, what do we do? Disease, you're probably like after taxes, usually I'm pretty good at guessing that. About like $4,000, a little under that on a monthly basis you'll have, which is great. So like double Yep Woo

So that's sweet You are allowed to allocate $2,000 of that to needs You shouldn't have to Because your rent Or your mortgage is 25% I would minimize everything else Try to have your needs be about

35% of your income At that point Because you don't have an emergency fund Everything else Needs to go to save about $15,000 For a six-month emergency fund. Then boom, you have it.

After you have that, then what needs to be assessed is, what are the interest rates on some of these student loans? If there are ones that are over 4%, you kill them immediately. You don't have fun that costs money. You're not doing Medici or Birdbird biscuit. You're paying them off. But anything below that, what I will allow is 50% our needs, technically, because, well, the thing is, I'm like,

yeah, but should he be spending money on funds? Should he have a fun category when he has this much in debt? Home and student loans being $150,000? Like, should he have fun? Yeah, I think so for the home. For the student loans? Maybe, maybe not. So I would probably try to minimize your needs category to 35, 40% of your income.

Then I would probably. do about 20% on wants if you really, really want to. I try to minimize that as much as you can. This is me being generous. And then 40% should go towards investing. 40, 20, and 30. So, I mean, if, yeah, yeah. Yeah, I mean, I definitely want to get into investing.

And I know that's something I can't really do right now because I don't have the money to begin with. But that is something I am like looking at as far as in the near future. I know I have to pay the student loans. once I graduate, I think I have like a six-month grace period or whatever, but I'm, you know, at the end of the year, at the latest, I'm going to have to start paying those back. And I ideally would like to have like a fund kind of already established where I can, you know, use to supplement those payments instead of just like coming directly out of my paycheck every month.

But what do you mean? Like kind of like start in that grace period, kind of start working on building up. So I'm kind of like a little bit of like a fun to kind of help ease it. burden of my loan payments when the time comes at the end of the year. So like a stockpile of money on the other side that it gets withdrawn from? Potentially, yeah. Just because I'm thinking of like depending on what my expenses are at that time, like I don't know if I budget correctly, I should have, you know, money to pay for it.

But just in case I don't have money, I can have that to kind of use as a buffer until I can kind of start re-allocating my. Okay. Either way, your life comes down to a couple of things from here. Does he have high interest on some of the student loans? Number one, once if we let out, we attack it depending on that. Two, can he budget? So far you have shown no potential budgeting.

The fact that you've said twice now that I have to eat has a reason to go out three times a day for coffee and then two restaurants. I unfortunately have no faith in that. But I have hope. I want to have hope. Please, you're at a point where you're halfway through the best decade of your life to invest. If we can just get the emergency fund, if you're going to budget and you can start investing and pay off any high interest loans, that'll be good. And when this car, I wouldn't go for a new fancy car, not even close to now. With the kind of car that you're looking to get with $60,000, it's not going to be in your income bracket. I'm sorry, this is not. Unless you save off just a bunch of money on the side, but that much.

money should probably be going towards investing or paying off debt instead. Tesla keeps cutting their prices, maybe. But as of now, I'm sorry, but no, once you get to 80 to 100, then, okay, we can talk about that. Starting at 60, don't even put the idea of a new car in your head. You're not in a place to. I'd rather you get rid of the student loans before then. I'd rather you invest before then.

You need an emergency fund before then, but I don't know. I don't know. I'm nervous, man. I'm legitimately nervous. I feel like a lot of the people that I talk to who are in their early 30s, they are where you are now and they didn't change anything. I don't want you to be them. I don't want you to be on this show in six years when you're 31

and you're like the person that I just interviewed before this who was 31. Non-good financial shape, I'm assuming. It's never budgeted, just as an endless amount of high-interest debt. And that's where you'll be because you're spending more than you make right now. Yeah, I am. And that's something that I, like I said, I have a spending habit. And actually, there's one credit card that I just opened up recently that we didn't discuss that I put. Stop, you're not a credit card. Use your own debit card. Use the envelope system. Budget. It's relatively new. And it's a resource that I partner with because it can help a lot of people, especially in your situation. But in the end, it's about you. I want to know, be as realistic and honest about your own mind as possible. Tell me what's going to happen from leaving here.

So leaving in here, I definitely want to cut back on my spending. I think I've been more aware of it now, especially coming to here and, you know, do I need to buy this right now kind of mindset? And, you know, I can say I've already, I've only spent once money today. And so I'm going to make sure not to spend more money today. I'm going to go home and eat at home. So I think it's going to take some time. I'm not going to like cut back, I would say immediately, even though I know I should.

Why? It's, I guess, hard. It's a habit. It's a hard habit for you going to kick. It's hard. But why not like act like you're an adult? Should I just like cut my credit cards that way? Yes.

You're not a pretty hard person. I mean, that's fair. And that's kind of one of the things I kind of use Justify when I'm spending. It's just like, oh, I know I used this card last time. I'm going to use this other one. So it's not on the same one. But because I have like six, it's just like I rotate. And I mean, part of it's because I don't make enough money to, I guess, pay for the, for whatever I'm spending because I'm putting it on my credit card.

So I think an issue that I'm kind of worried about is when I do receive more income is I want to make sure I'm using it responsibly. and not digging a deeper hole. And so right now that's kind of where I'm, like, hoping to kind of have some guidance as far as, you know, actionable items to start considering at least now when I'm, you know, in that space between, you know, lower income and relatively higher income. The best piece of guidance right now is learning what the priorities are, where the money should go and then budget according to that.

So use a budgeting app with any kind. I use rocket money. I used to use men. They're both great. You can use Dave Ramsey's. You can use any. want you need a budget. There's a lot of budgeting apps.

Maybe I should make my own. I don't know. But you just need to learn how to budget. I mean, I have men. I just do have like, you know, some budgets. I just don't follow them. Yeah, exactly. A budget's only as good as you follow.

Yeah. So actually, setting good budgets is I think is where I can work on. I think I definitely, I mean, I've lived a frugal life. I would say up until now. Okay. Up until now. Like, you know, when I was made undergrad and I was really rough in it and like making, you know, $20,000.

I definitely did not have the money to be spending like I am now, but I think over the pandemic, that's kind of where a lot of... You don't have the money that you're spending now. Well, I know, but yeah, the pandemic definitely is kind of added another layer of complexity to this, but I'm kind of hoping to just bounce back from it. Excuses, excuses. I need to eat. I need these calories specifically.

That costs $10 a meal three times a day, including coffee. He's essentially subsidizing his entire life with student loans, and that just kills me. I am not opposed to the most disadvantaged people necessarily taking out student loans when there are no other choice. But he is abusing that system. Well, not necessarily abusing it. That would be whatever. Either way, he's just digging himself in a hole, and it's bad. And Hammer Finance score 2 out of 10.

Make sure to check out all the resources in the description below, and follow me on Instagram and Twitter. Don't forget to subscribe. Thanks.