Financial Audit - Why Would You Do THIS While In Debt?!

Episode Date: August 14, 2023

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My name is Mitch. I'm based out of West Michigan. I'm 28, and this is financial audit. I'm from Michigan, West Michigan, actually. That's where I'm from? I'm from Calameseo. Where are you from? From Holland. Oh, okay, cool. I'm very familiar with Kalamazoo. Yeah, okay, very cool. So you go to Grand Rapids? I go to Grand Rapids on occasion. Okay. My family's from there. I used to go there. But now, these people don't find that interesting. Okay. Either way, welcome down here. Thanks for coming to Austin. What do you do for a living 28 years old, Holland, Michigan? I am a mechanical engineer. I work in a large furniture manufacturer in the area. Okay.

I work on the factory floor and do a lot of really boring stuff, lots of emails, but it's pretty much long and the short of what I do. How long have you been doing that? About a year now. Oh, what did you do before that? I graduated from college. Dang, you graduated a bit late, master's? A little late, not master's.

Where'd you go to school? Alabama, the University of. Interesting, out of state. Okay. Yep. Curious. So what do you bring in a year right now? About 89,000.

All right. $89,000 a year. Now, what do you contribute to a $4.1K? So I do a 3% company match. So I do that 3%. I don't know exactly what that equates to, but it should be in there somewhere. Yeah.

So I just wanted to see. So after that 3% then, and then, of course, after taxes are set aside, you're bringing in a net of $2,228 byweekly, it looks like. Yep, that is correct. So we're going to get you, 2,228. Well, actually, 29 rounded up.

Times up by 2. Actually, since it's biweekly and some months are a little... Is it biweekly or semi-monthly? It is biweekly. So every once in a while we get those lovely triple-check months. Oh, yeah. This is one of them, June. Oh, yeah.

Yeah. So net on average, you're going to hit if we do a true average, $4,828. $0.50 a month. Yeah, that sounds about right. So true average with the good months and then, you know, just the two checks months. You never get under that. But sometimes you get the good ones.

Either way, that's cool. So you've been in there for a year. Do you enjoy the job? I do. It is what it is. It's not my favorite, but I think it's a good company. Okay. Now tell us about your overall financial situation.

What are you in? I know we have some debts here to go through. We're going to go through those debts first. but yeah give us a round give us a brief situation then give yourself a score zero out of ten all right well first I'm my score I'd say is uh my honest answer I'm thinking like a two okay um I have about 30,000 in student debt and that's federal through NellNet I have about 17,000 in debts on top of that split into two light stream loans so light stream is the the servicer one of them's for about I think 10,000 the other one of them's for about I think 10,000 the

for like 6,000. So like rounded up equals out about 17,000. I have a credit card, but I'm pretty good about paying that off every month. So I don't have like any rolling interest on there. That's basically the long and the short of it. I have a 401k and a Roth IRA through Vanguard and an HSA. So all three of those combined. I'm at about like 26,000.

Oh, that's pretty good. Yeah, it's not too bad. Where's that most heavily distributed? Mostly in the 401K because of the company match. And we'll get to that. Cool. Anything else you wanted to add there? No, it should be about it.

So obviously you have a negative net worth, but I am happy that you have some snowballs going in the right direction in terms of the investments. Now, what is this? So that is one of my loans. They don't have, like a really good statement that I could just print out easily. Yeah.

So I just printed out the entire amortization schedule, however you pronounce that. And it shows every payment that I have to make to pay it off. Okay. So right now you're at 11,300 or 11,100, well, you haven't made a payment. So 11,388. Yep. And this is just a private loan. What was the purpose of these loans?

What is this? So one of them is a car loan. Is this the car loan? Yeah, that's the car loan. right there. What's your car? It's a 96 Toyota. It's imported. Toyota what? Seltier. Was that like a fancy car? It's a fancy car. It's kind of like a Lexus. I was going to say, why get a 90s car. Okay. Yeah. How many miles and stuff like that? That's your daily driver. Yeah, it's the daily driver. It's got like probably about 60,000 miles. So it's relatively low

mileage. It's one of those cars that goes forever. But at the same time, you know, I'm paying this loan on it. So it is what it is. Yeah, what's the interest or not this long because that's what I cannot see with no statement. to take a quick moment to thank today's video sponsor, Factor. If you're like me and you struggle at cooking, then Factor can also change your meal time routine. I'm trying to lose weight for a while and food is always the biggest struggle. It makes clean eating easier than ever. With their fresh, never frozen, dietitian approved meals, you can effortlessly meet your nutrition goals. They offer keto, calorie smart, chef's choice, and vegan plus veggie options with mouthwatering seafood, meat, and plant-based

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weight. So if you're ready to make clean eating easy, head to Factor75.com or click the link below. Use code Hammer 50 to get 50% off your first Factor box. That's code Hammer 50 to get 50% of off at the link below in the description box. Fill your body with nutritious meals delivered direct to your doorstep. Right. $280 minimum payment. And also, what is the term length? The term length is, I know it's still a 2024.

I think it was like 72 months. The interest rate. Not to 2024. That's a lie. In 2020. Oh, maybe even longer. 2027, yeah. much longer than I thought.

So the loan interest rate is 5.34%. As far as car rates go, not the worst. I wish it was a little lower, especially, in terms of do we aggressively pay off or not, it's hard, that's in that gray area. I'll go into my logic there in a bit. I'm trying to sell it this summer. Why?

Because it's expensive. I think I can get a beater car for cheaper, and it's the, The wiser decision now that I've been watching your channel for a little longer. What's it worth? It's probably worth about 13 to 16,000. So I could probably pay off the loan mostly. But I'd want to...

$5% interest. Okay. Yeah, I'd want to flesh out my savings a little more before I just pay it all off. Yeah. Well, you'd pay it off by selling it. Like, if you got it for $13.14, as you said, you'd profit a couple thousand bucks. Yeah, hopefully, if I'd do it right.

You're going to have to be taxes. I don't know, but... Yeah. Okay. How many miles around it again? Like 60,000. Okay. Now we have the student loans.

You said that's about 30? Yeah, a little more than 30. I think like 31, something. 12. 31. Guessing that minimum monthly payment, starting in August, is going to be about $375 a month. Something like that.

Oh, so we have 3% there, 4% or 5% there. 4% there, 4%. 4%. 4%. Something these are rounded numbers. 4%. 5% over 5% on that one. Yikes. 4.5.3%. That's a good one.

4.5.3%. Yeah, they're kind of all over the place. So we have some on the higher end, some on the lower end, in terms of what federal student loans usually go to. At $31,000. Sacked up, did you have help going through college? Did you pay for some things? because for out of state, that's not crazy, actually.

Well, Alabama's got a hybrid program, which is a lot cheaper, and that's why I went with that one. Oh, okay. So it was like online and on campus. I ended up transferring from Michigan State, so you'll see some of the- Oh, how long were you at state? Like a year and a half. Oh, okay. So that helps that you got some in-state.

Yeah. Okay. You mentioned you had this other loan. Did I now have a statement for that loan? Because I don't think I saw it. You should have two light-stream ones. There is the one that we already went over for the- What's the balance of the other one?

What's the balance for? That one was a debt consolidation loan. What debt were your consolidation? So there's credit cards and a separate car loan and that car's out of the picture now. So I consolidated all that into one loan. The interest rate on that is 8.19%. I know. I got to find the balance here.

And the minimum one through payment. Well, he finds all that. You should subscribe because we're trying to get the 750,000 subscribers. Yeah, congrats on half a mill, by the way. Thank you. I appreciate it. it. Wouldn't be done without these amazing people and you and everything.

Right. So I'm at 5,600 on that one. Oh, God, 100. And the minimum monthly payment is 339. That's a gross one. Okay. Yeah. Oh, yeah, it's a nasty one, but that's okay.

Now, when building up that debt, the credit card of card that you consolidated, when was that? And when did you consolidate it was all through college i paid for a lot of stuff with credit cards i used to have like four of them total now i just i'm down to one which is good i'm trying to wean off of that kind of lifestyle yeah so yeah i was through college i just paid for i think one or two of my college payments with the credit card which is really dumb and then i got this honda and i had to get a loan for

that then i got wrecked and the other guy didn't have insurance i don't have collision coverage so i just had to get rid of it. Took a big loss in that one. And then I just rolled that loan. I think it was like $4,000 remaining on that loan, rolled into the debt consolidation loan. I think this happened in January where I rolled it all into one. I wish I got to you before college because I would have just told you to get the FIS card for college students.

But yeah, because that's so much better. And then you wouldn't have gone into all this crap probably. And then now we have the consolidation loan. Yeah. It's a poo. It's a poo. Okay. So I'm a little nervous that you still have.

just a traditional credit card here. Now, in the statement, you've managed it. But are we going to be managing a long term for good if we had to consolidate some past debt?

I'm thinking so, because my income is a lot higher than it was in those times. Yeah, but usually a lifestyle inflates that for the average American. Yeah, I'm trying my best to be conscious of that. Yeah.

And not let that happen. Is it at all? The one thing where I'd say maybe not happening would be my rent payments where I'm paying like $1,600 a month, so that's pretty high. $1,600 a month. In Holland, Michigan.

I know. It's crazy high. It's supposed to be a nice place. Is it a nice place? It is a nice place. You're over 30%. You're close to like 34% there. So you're spending too much on your rent by a few percentages at points.

But either way, even though 30% is like the max you should, we don't want it at 30% anyway. Yeah. Your income, because that's crazy. If you think of 50% of your rents, income going to your needs and then all of a sudden 30% of your income is going to only one thing that you can fit in that category. Yeah. That's like,

yeah, I'm over 50% now in my needs. Yeah. When student payments resume, then that's going to push me over to like 60, 65%. Right. Okay. So we have this credit card and you've managed it.

Now, if we have an 8% credit card debt, why the, possibly? Are you going and getting like red wing shoes? Well, the story of that one is my job reimbursed is $100 of a pair of work boots. Okay. So I got reimbursed.

$100 though. You spent $323. I know. Why don't you get $100 pair of shoes? You have an 8.19% interest debt sitting over there. What's the logic? I splurge. That's on me.

You have already said that your needs are well above 50%. And when these student loans kick in, your needs are going to be even higher. So why are they doing depot? Or what is that? Deepop. Deepop. Yeah. And renting a movie and Taco Bell and Williamson Dickie and have Elevon and which was you had a service fee through them and getting some Tim Hortons.

And I love me some Timmy's, but guess what? Tropical smoothie. We don't need to be doing it. Frat Illies. Mm-mm. Spotify. Mm-mm. There's music you can find.

or just not pay for it and do an ad every once in a while or listen to music on YouTube. And five guys don't need to be doing like probably one of the more expensive burgers that you can get. Right, yeah. Snap Fitness. Uh, Snap Fitness. Is that a, is that a gym or is that a food?

It's a gym. Okay. I forgot. Yeah. In Amazon, we probably, that's based on the crap here, probably don't need to be doing that.

Linear restaurant. Mm-mm. Kindle. I mean, it's hard. I should go to the library. I need to. Yes, you have a lot. There you go.

So, fuck you. You have a library. Kindle is out of the picture. Southwest Airlines. Is that what that is? Yeah, I had to buy points to get to the threshold to be able to get the tickets to come here to Austin. So it's not the greatest way to do that. And that's, yeah, $285.

You then, Point Rapids, Rewards, and MISC and Specialty RET. Yeah, I think that was an add-on for a hotel. Yeah. Why you edit? Okay, so where's your mentality? Do you want to get out of that bad debt? You said you're, see, I, okay, well, not that I'm considered necessarily nice on this show, but I would be nicer if someone was just coming on and they weren't part of the audience,

but you're part of the audience, so you should know that you shouldn't be doing that. Yeah, you're right. And you're going to doing this. So why are you doing it? We need to get to the mentality behind it so we can actually address it. Right. Got to get on that Sigma grind set. I'm not there yet.

Well, no, no, no. What is the mentality behind you and just spending this money, though? Well, in my mind, I know it's part of, like, I can handle, you know, paying off the credit card when I want to do spend it. But obviously, that's not the right way to think about it. You can. You can. So you're better than some people in that context, but there's really bad debt that we want to pay off. Yeah.

Of which of your income, it should have been paid off by now. I find it inexcusable that it's not. Yeah. I agree. So there's, yeah, not thrilled about that. Now you have 300 bucks in your checking account. Yeah. So not incredible, but they're worse.

There's some money than the markets. Now we're Venwaying off 50 bucks. Who knows where that goes? A lot of this stuff is like paying off cards and going to different bills or paying to cards and paying off bills and stuff like that. Meyer going to Meyer a lot. You go to Meyer a lot. And I miss Meyer, but you go there a lot. You're going to have 30 bucks and House Grand Rapids and McGregnard.

Donald's and take it out 60 bucks for ATM. Who knows what that one? Wendy's and Butchers Union and away Grand Plaza Hotel. Jimmy John's Coles taking out 60 bucks from the ATM. Who knows what that one? And Venmoing out $50.68 cents. And Jimmy Johnson's an office max and bagel beanery.

And Hay Barber, Little Caesars, Venmo. Big Bee Coffee. I miss Big Vee Coffee. That was a throwback reading there. Big Bee Coffee is delicious. Jimmy John. So again, we're going and we're spending bullshit. We do not need to be doing that now.

Now is the point. Your 20s are almost done, dude. And you've only started making money in the much later half of your 20s. You've basically missed the best decade of compound growth for investing money. Right. Well, I mean, kind of. You do have money invested. But we could have more if all our minimum payments were going to stupid, like 8.19% debt.

Yeah, I need that should be taken care of this last year. You should not have you in out once. That should be gone. It doesn't make sense. You're right. It doesn't make sense. Okay. It's all about that mindset.

I wasn't there yet. So where's your mindset? I mean, coming out of this, it's going to be a lot better. Why'd you have to wait for me? You're watching the videos. Why'd you have to wait to sit in front of me? Maybe this was the plan all along. Come out of this with that new, just that new mindset.

Get that kick in the pants I needed. Yeah, but how long is that kick in the pants? I'm taking the pants actually going to last then. If you couldn't do it before this. Well, a month you're going to travel home, and this is going to be exciting. But it is. But what happens when that excitement wears off? Go back to the other and glugging down some Jimmy Johns?

I mean, I know what you're saying. It's very within the realm of possibility that it would happen, but I need to be better. Well, I know. Okay. But, okay. I don't think that gets the root cause of the problem. Just saying, yes, I need to be better. Yes, I need to be a better.

What are we accomplishing with that? Like, okay, you acknowledge it and that's good, but. Yeah, okay. I know what you're saying. It's good to acknowledge. I wish you were able to go more into your mindset of why you're doing that so we can combat that instead of just saying, yeah, I need to do better. I need to do better.

We can all say we need to do better. But if we can't figure out why it is, the situation is that we need to do better, then it's like, are we really going to accomplish anything? I don't know. That makes me a little nervous. But I am happy to see. we have some money in Marcus, kind of. Like, we need to wrap this whole picture together.

But we have in a code red fund, which I don't know what that means. It's my emergency fund. Oh, that makes sense. $2,000. I'm happy with that. $2,000. I'd like that to be higher. I need to save more as well.

$1,932. Okay. So, yeah, this is just transferring money in. and you do have that 4.15% interest. I personally, by the way, I just figured this out just so you know because everyone always asks what high-guilt savings account I use. So if I.

So-Fi. I use them because they're at 4.3% plus like up to $250 bonuses from switching to them. So like I wanted that bonus and I want that 4.3% interest rate. So, yeah, write that down. I'll put it in my link so you can, I'll put it in my description so you can sign up for it.

But because that's a sexy rate, decided like, yeah, okay, fine. I'll put you guys in my link because that's hot and people deserve that rate. It's a very sexy rate. It is. It really is. Plus those extra bonuses. Like, why not?

$750 in the money restaurant. I mean, you already spent a lot of money on actual restaurants. What the fuck is this? That's my bill pay account. Okay. So it's kind of like since they got rid of the six withdrawals minimum for high APY savings account at the federal level, I can use it as like a high yield bill pay account. So it's kind of working.

out for me. This is where you pay off your lights. This is where you do your minimum monthly payments for the light stream. Yep. And my rent. Your rent, okay. Some random other bills.

Yeah, bills, bills, bills, just making sure there's nothing. Bull. And, yeah. Well,

glad we're avoiding spending bullshit. You still spent monies, but either way. Is this different than anything else we've seen? That looks like the second page of, um, of my pay stub. Oh, okay.

It didn't print out very. What's this savings? Is this a different savings? So that should be my emergency. Nope, that's my bill pay. That's my emergency fund. Separate from the Marcus? These are the Marcus.

Oh, they're just, these numbers are wrong? They don't let you name it, and I must have changed it since then. I'm always kind of playing with it and trying to find the optimum amount to deposit in each savings account. So what are your, so investment accounts is primarily in your 401k, then you have a Roth, and then you have an HSA, what are your funds vested in? I have some in the VIGAX, the Vanguard Growth Fund. I used to do the S&P 500, but I'm trying to, I guess I would say I'm experimenting with different funds, which maybe is not good, but maybe it's working out so far.

I have a few random. Oh, we just entered a bull market, so I bought everything you've experimented with since October has worked out pretty much. Pretty much. I have some in like Amazon and Intel, so some tech stocks here and there. not a small percentage of it. Small percentage of your portfolio? Yep.

Okay. In my 401k, I have like a, I have some like a stable income, some of the S&P 500, some in like small cap and large cap, some in like international stock market, just kind of a cross-the-board type investment. Yeah. Portfolio. Then HSA is straight up just S&B 500. Okay.

Okay. Very good. Is there anything else? No, that's it. So there's nothing else that I have. Okay. Yep. You're going to stack up.

It's going to make me nervous. Me too. Like going out to eat and like that, almost $700. That's what you did in the statements that we had. Yeah, that's a lot. You didn't even go out like a ton, but they were pretty expensive. You added up a lot of stuff, dude. And if we're, think about that.

Think about what you just said. Okay, I'm getting a little upset at that. What's your rent? $1,600. And your minimum of the payments, what they're going to be, 994, very, very soon, a couple months. So add that just to your rent so far, 2,594. Now, do your stupid $700 of going out to eat. Boom.

We have like, that's $3,294. We're really starting to just minimize what we have left over. We've barely built out of budget already. Only $14. On subscriptions. Brick Sports Web, $74, and another $74. And you just go out to Meyer a lot. And you do spend a lot on gas.

Do you drive a lot? Because you go to gas a lot. Yeah. But you get things from there that aren't just gas as well. I'm borrowing a pickup truck from my parents and it's not very good on gas. It's got a massive tank too. So it doesn't help anything. Okay.

Okay. So utilities, on average. gas internet electricity what are they probably about a hundred bucks on top of my rent both internet two combined with gas and electric

the internet is roped into my rent payment they got like some community internet thing gas and electric is only 100 is your place small is really small and you pay that much yeah it's a one bed one bath no offense to holland but I don't get it

no offense to holland it's pretty it's pretty extreme Yeah. It's not a good area. Yeah, exactly. I just, that's how I don't get the price. Okay. And then, yeah, we had your minimum payment's car insurance.

Car insurance is, so I have a program through work, and that's roped into my ADP pay stub. It is. So you don't have to pay anything? Right. So that take home you already calculated, already is accounted for car insurance. Very good. That's actually pretty cool because Michigan has the second highest car insurance rights in the country.

Yeah, it is kind of cool. Yeah. It works out. Yeah, it's ridiculous up there. Now, health insurance that's also taken. Yep. Before. Very good.

Then with those, we might start having a bit more of wiggle room because usually car insurance, especially in the expensive car insurance state like Michigan, you know, we might be losing a couple hundred bucks and that starts taking things away. So very, very, very good. Happy with that. Groceries, I'm giving you 300 bucks, minimum. And total paper, toothpaste, all that bullshit. Anything you need else?

100. Gas. You clearly spend a lot. How much? Probably about 90 bucks every week and a half. Yeah, I was going to say. For a week and a half. I guess I would total out to be a couple hundred a month, maybe 300.

From what I saw, I'm feeling more comfortable with guessing 300. that would make sense. And that Toyota is premium gas only, which kind of sucks. Your subscriptions cancel them. You're not doing 15 bucks to them a month anymore. It doesn't make sense. If we do this stuff, anything else recurrent that you can think of in your life? Not that I can think of.

Yeah, I'm pretty low on subscriptions. Yeah, but we're not, none of your money is going to bullshit more. $3,397 is what you need to survive. So in that Marcus account of your savings, we want to get to that number as soon as possible and then start killing some of this debt. Of course, with this, you have a strong income. That's the exciting part. I think you have trouble budgeting. I would agree.

Would you, because you're with Chase. Yeah. And Chase is fine. Would you consider switching to something called Monzo? Monzo. Yeah. What would be the... It's a checking account, but it helps you track your spending in certain categories.

And I want you to be able to visualize it better. I think you're having issues with that. Yeah. That sounds like it could be very helpful. Okay. Monzo. Manzo. Write that down also in the description.

I specifically sought them out because I liked what that was. I always just try to gather resources and then I partner with companies just to only when there are things that are good that can help people. And I think that's a really exciting one. Cool. So do them And also what we talked about earlier Because once you start visualizing You should be able to

Bring home Or after all your minimum monthly expenses For your budget that we've laid out Which you will fall into a T You should have an extra $1,431 Okay And with that Emergency Fund or debt

Well, the first month you're putting all of that in your emergency funds starting end of June by the end of June all that money your emergency fund should be at about 3,400, which is perfect. It covers you what you need to survive for a month if things go crazy. Okay. Now, after that, $1,431 on a monthly basis, $5,600. That's the debt we want to kill, $1,431. So we're starting month number two.

That's going to take an additional four months. So at the end of five months, you will have your emergency fund cover a month, and you will have a full in your stupid debt consolidation, 8.19% debt will be gone, killed, no more death of which that is. Yeah? Yeah, that sounds good to me. Cool. So that's gone in just four months of you canceling your subscriptions,

not having Wendy's and Jimmy Johns every three seconds of your life, and just not bullshit. Trank your spending through that Monzo thing. Do whatever you have to do. How you want to budget. I just like it because it's kind of like an envelope system and a lot of people will benefit envelope systems. But you need to get your shit together.

That's what I'm struggling with is you're just spending so much money. But if you do, you have $1,431. Less of people on this show would beg for an additional $1,431 left after I give them a pretty strict budget. They would beg for that because they would be able to start actually making progress on their shit. It really puts them in perspective. Of how much bull crap money you are spending, absolutely,

because you feel like you don't have much extra. I mean, you've barely built up an emergency fund over this last year. Right. When, in fact, you could have a fully max out emergency fund and have that debt consolidation gone last year if you actually buckled down and cared about the real shit in life. Now, the car, you talked about selling it. Maybe you can.

Do you like the car? Do you care about the car? I like the car a lot, but I like, The idea of not having the debt, maybe more. I'm not. If psychologically, it's in that weird zone. So this is how I think about cars. Okay, I have $10,000 in cash.

I need a car. I'm going to go. I can get a $10,000 car. That's fantastic. Boom. There's no debt. You don't have to worry about anything. Good for psychological reasons.

You know, congratulations. That's fantastic. Or I could take out leverage on it. If I can get it 3% or less and I put $2,000 down, That gives me an extra $8,000. And I invest that extra $8,000. And I'm in an interest rate of 3% or less for cars because of the depreciation. That's all.

Usually it's 4% or less for me. But I do 3% of less for cars. And you invest the rest. So $8,000 in the market. Boom. It's averaging with dividends reinvested it over 10%. Then I'm beating it each and every day. Yeah.

So that's great. But what often happens. There's two things that often happen when people take out debt, even if you get a really low interest rate, is they'll just go spend that $8,000. So it's like, well, that point. Now you're paying interest on something that, I mean, you want to beat it in the market.

That's the whole point. Or two, like, okay, I'm coming with $10,000. Have the $10,000 in a car. But if I take out debt, hmm, maybe I can only put down $3,000, get a $15,000 car and said, well, let's not get a more expensive car than we were going to get originally just because we're going to take out debt. That's what I don't like.

In your situation, you're a 5.5% interest rate. I don't know. This sounds like a car that might not depreciate as much because it's, you know, one of those, one of those special cars special cars yeah and i'm not a car guy so i don't even know what that car is that you said uh brandon the editor threw it on screen when you mentioned it but it'll be the first time i ever known what that car is 5.5 i'm just torn i feel like if it was 6% i'd be like all right let's kill it and it's basically there so maybe we do i'm torn

would it be worth looking into refinancing with where rates are day, I think that would be difficult to find a rate you'd be happy with. Okay. Yeah. Yeah, it's like right at that medium point where I don't know how to feel about it. Yeah. But what I definitely would do after the debt consolidation is done, regardless of what you do on your car, the student loans, anything above 5% which the car is again. So it's just like, I'm so, yeah.

No. Okay. If you want to keep the car, after the deck consolidation is done, then we just start paying off the car aggressively or you sell it and then what are you do in that situation because you don't have any money left over so are we saving up money to get another car yeah I'd be saving it money do um there's a one or two beater cars in the family I might be able to get for less than a thousand from that are going to be reliable for a couple years to come and safe a question mark I don't know no I we don't get a car that we're going to have to

put thousands of dollars into no you're right so I guess I don't know at this point. I'd have to figure it. You like the car and you want to do the car. I do. Would you rather keep it if we can get you to keep it? I'd rather keep it. Okay.

Then let's just pay it off, dude. Okay. So that gets rid of an extra $339 a minimum monthly payment. So now you have, because the consolidation loan is gone, $1,770 a month extra, you're still going to go crazy. We're going crazy because you want to keep the car. You're choosing to keep the luxury of which. which the car is. At that point, the loan will probably be like $11,000, let's just call it.

Divide that by $1,770. That's going to take about six months because I think the loan's going to be a little less than then, then where it is at the end of the debt consolidation payment. So six months, we were at what? Five months on the last one? Five months total for one month of emergency fund then paying off a car was four months, so five months. So, yeah, now you're sitting at 11 months. So 11 months from now, your car is paid off. Your debt consolidation is paid off. You have a one month emergency fund.

Oh, yeah. That's if you want to keep the car. What you do from there, I don't know. But that gives you an extra $280 a month. From there, everything, the extra $2,000 that you now have on a monthly basis goes to a tax student loans that are above 5% interest, above 5% interest. Yep, okay. Then anything that is below that 4% or 5%, especially,

below that 4%, maybe above 4%, you go in attack. And then anything below 4%, you do minimum monthly payment still they're paid off. Only if the extra money that you would put towards it, typically, we'll be going towards investing. If it's not going to go towards investing, just pay it off. As soon as you say towards investing, are you talking retirement investing? Yep. Okay.

Throwing towards your Roth, thrown towards max out your 401K, anything beyond that into a brokerage, something like that. Okay. If instead you're just going to go spend it on bull. Just pay off the student loans. The interest rate is low. The only point of us not paying it off early at that point,

anything 4% or less, is because we're going to beat it in the market. Don't do it. Don't do it if you're going to spend it on. I'll try my best. So that's where we're at. With where that student loans were, I think it's about a year and a half at that point.

So one year, six months, the higher interest rate student loans are gone. The car is gone if you want to keep it. And the debt consolidation is done. Then what I need to do for where your minimum monthly payments are needed to survive, you'll have minimum monthly payments on your student loan still, but not as much. I'm going to say,

what you need to survive is $2,550. So we are going to get you to a merchant's phone of $15,000. Wow. So you already have, $3,400 in there. So you need to save up $11,600. You have an additional $2,000 now at that point. We'll take about six months.

So two years. This is a full two-year process. Make Mother's Day even more special at Whole Foods Market. Kick off brunch or dinner with quality cheese and charcuttery with no synthetic nitrates. Then go seafood. There's an abundance on sale at Whole Foods Market, where it's all sustainable while caught or responsibly farmed. At the bakery,

grab seasonal treats like their strawberry pretzel cream pie, and you can't go wrong with a ready-to-heatheesh Lorraine, devil-degs, and fresh-cut fruits to go. Celebrate Mom with Whole Foods Market. But during that two-year process, you are not glugging down any Wendy's Nuggies anymore. I love them. They're good. They're my favorite nuggets.

You can't have them anymore. They're done. Stop with the bullshit. You're not traveling anymore. I mean, I'm happy you traveled here, and hopefully that all works out in a way with a few hundred bucks you put Tortza is an investment for you getting your together. Yeah. But there's no more traveling

after that. Two years, dude, you don't spend money on bullshit and fun. It only goes to what we laid out nothing more. Try to find less in rent. If you can, I don't know what the area is like, but try your best. Even if that means living in a shit place for a year. Yeah. I don't care. Unless it's dangerous.

Then we don't do it. Move in with my brother or something. Okay. Yeah. Roommate situation. Let's go. Yeah. So, again, that's just not spending money on fun unless someone else is paying for it or you go to do free fun stuff

Holland on the lake go to the beach swim around splash around woo yeah winter it's cold and miserable out there anyway stay inside no I like that idea staying inside is good

stay inside do crossword puzzles because you're not paying for subscription services I like crosswords play old old video games that you already have something I don't care

YouTube YouTube's free. It is. It's true. Watch YouTube. So that's where I'm at. Again, one of the big concerns that are brought up towards the beginning is that you max out credit cards and then you had to consolidate them. Yeah.

And that only ended like a year ago. True. So I'm a little nervous. Yes. I'm still coming off that mindset. You're coming off that mindset. And you're still, even though you've been watching this channel and you knew you needed to make changes and you signed up to make changes, you were still spending like 700 bucks on just

crap food and then also traveling as well. And then some other stuff at like hotels and these bonus things and whatever. All that extra bullshit and the boots, like almost $400 our boots. Yeah. That was a big mistake. Yeah. So I'm a little nervous because you knew what the mindset was supposed to be. And yeah, you were like nah. Anyway.

Right. I don't have any words. You're right. Give me something, dude. Well, yeah, it's just, like I said, I'm fresh out of college and I'm not used to. It's been a year. Yeah, I mean, in the grand scheme of things, it's somewhat fresh, but I need to do better about, I've laid out the budget for myself. I just haven't followed it.

Why haven't you been following it? Why? It is a good question. You need to give me an answer or else I have no faith in this. I don't know. I guess I'm impulsive with the old credit card. You're impulsive. Impulsivity has been one of the major issues.

I'd say so. So it's like you get a little rumble and you're like, let's just go get some foods? It's Jimmy John's time, yeah. Okay. Okay. So impulsivity. Yeah. Have you considered working with a mental health expert on some impulsive behaviors that you have?

I've considered it, yeah. That might be something, that might be something worth considering. Everyone should be in therapy regardless of any issues or whatever. is just good for mental health. And we need to take care of mental health just like we need to take care of physical health. So that might be something worth considering. And I would happily put that in the budget. You already have health insurance through work.

Take advantage of it. Yeah. That's a good idea. So if that is something that is good for you in the long run in terms of taking care, in terms of locking down your situation and living a better life, then absolutely. Let's put that in the budget. Even if that stretches the situation of three years, I would rather you be more. like a 90% chance of you getting out of the situation in three years with mental health,

then like a 50% chance of the situation in two years because you don't have the support system. Right. When you put it that way, yeah, I think I have to look into that for sure. Yeah. Because also, even if it fires that under your butt for six months, six months is nothing compared to the two years it would take. Six months is nothing compared to the three years it would take with support. Yeah.

So just someone keeping you on guidance, you being very open and descriptive about why you're there and some of the issues you're doing with and where you're trying to get to in life is very important. And so most people should do on here. And luckily you have more extra income to work with than anyone else after my pretty strict budget. Right. Yeah. I mean, it makes perfect sense when you lay it all out like that. I've never taken this type of deep dive into everything. clearly.

That's important to, we got into the Nidigradity, it's important then to take a step back, look at the grand scheme, and where the grand scheme is, if you finish this in three years because you took advantage of mental health help, then you're 31. 31, you're maxing out your Roth IRA every year

until you're like, let's just say 60, for example, and you're putting as much as you can towards the 401K trying to max it out. And then on the money that you're pulling from, if you both max out your 401K, and your Roth IRA, then the money that comes in after that, or the money that's left over that,

I'm happy if, like, 60% of his needs and 40% of it is on fun. Live life. Right. Maybe you minimize those percentages a little bit because you want to start saving up some to get a personal residence at some place. But, I mean,

either way, if you're maxing out your 401K and Roth IRA, go spend the rest on needs and fun. I'm totally happy with that. But when you do that, big picture again, I wanted to lean back. you're retiring a millionaire. You're retiring likely a multi-millionaire. You're living a great rest of your life.

And what's necessary to do that now? A temporary sacrifice of a few years of not having some Jimmy Jones. Yeah. And have you seen the dude who founded Jimmy Johns? I don't know if I have. Jimmy John, Leotode, he, or Leotod, whatever. He, other than laying on naked with fish, look it up. It's weird.

The dude's like 600 pounds. So Jimmy Johns isn't that good for you. We don't need to be having that every day. Interesting. Okay. Yeah. And even got that surgery where he got his stomach reduced to 10% and he's like 500 pounds.

Oh my gosh. Yeah, we don't need to be eating that every day. I only say that because I worked there and he's kind of a creature. Yeah, I've heard some things. I guess I, yeah. All you have to do is cut that back for a few years and. Yeah, easy. Multi-millionaire by retirement if you start going crazy and having a good time.

I mean, that sounds good to me. what will you actually do knowing yourself what will you actually do i think one thing that's worked for me is just leaving the credit card at home when i leave my house i've tried that a couple times and it always works you don't think you'll be impulsive with your debit card no because i i do my um my direct deposit in a way where the money kind of works out where all my day-to-day spending is on my credit card and then it paid off with the the debit account so i don't really spend anything on my debit card i'm pretty good about that at the very least so it might work It might be something.

Graping at straws here. Do what works for you, yeah. Yeah. So go on. I definitely need to put this budget probably in like a visible place in my house where I can see it every day. So it doesn't fall out of sight, out of mind type idea. That would be a good place to start.

But I think with those two combined as well as, you know, with the mental health idea and the, you know, the, you know, the impulsivity with spending. I think it could really get somewhere. All right. Cool. Do this. Go back to Michigan and put some verners in your grocery budget for me. Okay.

Yeah. You got it. Some good stuff. All right. For Mitchell and his Hammer Financial score, overall, you know, his spending, he was spending way too much when it should be going to high interest debt. So I cannot give it higher than a two out of ten.

It's better than some people we've seen. So I'm going to give it that two at least. Debt, again, not the. the worst we've ever seen, but it's still not good. Three out of ten retirement. I'm actually pleasantly pleased where it is. Is it perfect? Not even close, but four out of ten emergency fund.

Starting to make progress. Not where it needs to be in total. Two out of ten. Real estate, not in that conversation. Zero out of ten for now. But he was spot on. That aggregate's down to two out of ten. And don't forget to check out the resources I have at the top of the description below.

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