25-Year-Old Borrowing Terrible Debt For Her BOYFRIEND!

0:28Americans told Washington what they want. The holidays mean more travel, more shopping, more time online, and more personal info in more places that could expose you more to identity theft. But LifeLock monitors millions of data points per second. If your identity is stolen, our U.S.-based restoration specialists will fix it, guaranteed, or your money back. Don't face drained accounts, fraudulent loans, or financial losses alone. Get more holiday fun and less holiday worry with LifeLock. Save up to 40 % your first year. Visit LifeLock.com slash podcast. Terms apply. Welcome to the show where I take a look at someone's personal financial situation and find ways to overcome their overall financial struggles or meet the financial goals that they're trying to achieve.

1:08And make sure to subscribe. I'm really trying to get to 100 ,000 subscribers and every subscription helps. Thank you all so much for the subscribers so far. With that, my name is Caleb Hammer and today we're meeting with Cassie. Cassie, how old are you? Where are you based out of? I am 25 years old and I am based out of Grand Junction, Colorado. What do you do for a living? um i'm an airway um transportation system specialist so uh i work for the faa doing maintenance and uh what do you bring in so right now i bring in about 75 000 a year 75 thank very nice did you have to get a degree certification or what no so i'm actually um prior military So in the military, I worked on avionic systems and aircrafts.

1:58And it was pretty much that, but like on the ground. Okay. So when taking a look at your overall financial situation, how would you describe it? What do you think I might be able to help with? So overall, I mean, I'm not in the worst position. I think that I definitely need some guidance. I have a quite a bit of debt, which sucks. Um, I think that I've been pretty financially illiterate up until like the last six months where I've like taken the time to learn. But at that point, you know, it's too late. So, um, At this point, I'm just trying to get down the debt, out of debt pretty much. And yeah, I mean, I'm trying to increase my income as well.

2:55I'm up for, so we actually just got a raise, and then I'm up for another one in the next month. And that'll be an 8 % increase. Okay. Well, at least that's keeping up with inflation or right about. But that's good. you just got one and you're getting one immediately again what is it like quarterly well uh every year the like the government gives their employees a raise in january this the one i just got accounted for inflation this one is just because like increasing throughout like my job like well that must be nice that's that's pretty cool so debts why'd you get into so much of debt um i think poor lifestyle choices um what were those choices or lifestyle choices i think that it's really easy especially when you get a credit card like if you don't have it it's like not a big deal in your mind in your mind it's not a big deal to just swipe and use it and that adds up pretty quickly um and then also um me and my partner we decided like to have kids um Um, cause they're very expensive.

4:09They're very expensive. So how many kids do you have? So I have one and I'm currently, um, 37 weeks pregnant. So I was about to have another, but we're going to stop it too. So. All right. Well, let's take a look at this. Then we got a checking account with$764 scary, uh, beginning balance uh uh 6440 and more out than in 6828 left and then an ending balance of 376 that's scary for a checking account for me i would at least like to have a couple thousand you know uh buffer and a checking account no i do have two checking accounts i don't know if you see both okay well i'm looking at this one first but okay that that's good so let's see here where is this money going we got amazon prime insurances and grocery stores apple subscriptions atm withdrawals we don't know where that 160 went transferring some money around yeah transferring money around atm withdrawals ach withdrawing ach withdraw transferring transferring so okay is this like the go-through account is money in here and then it gets transferred to places or Yeah, I would say that's the account that my direct deposits go into.

5:32And I also, I've been trying a thing. So it's called cash budgeting. I don't know if you've ever heard of it. Yeah, yeah. No, cash budgeting is good. Like the envelope system. That's what you're talking about. Yeah, he did not invent that to be very clear. Just like the most things he talks about, everyone thinks he invented it. But it's existed well before he came along. But yes. And has it been working good for you? Yeah, I think it's been, it's been easier. Like, so in my wallet, I don't, it's like, sometimes I will do groceries, like using my card. Because I'm like, my mom will send me money for groceries.

6:10Because my sister does live with me. She's going to college full time. And I, I work. And so she'll send me money for her groceries. And then I'll just use my card. But for the most part, I take all of my, all of my like bills that I pay online. I pay like online I don't take out the cash for that and then any sinking funds or like grocery money or like anything that goes in my wallet I take out in cash and I think it's been better for me to like physically see the money and have to like give it away like I think that's a better visual sure I'm glad that works for you I wish it worked for me it doesn't for some reason when I have cash it's just bonus like because it doesn't impact the number on my screen when I open my account and that is the money I have is what's there and anything that's deducted from that I'm like but cash I'm like but I'm glad that works for you that's good I think that's how it works for the majority of people I think since I'm so tech driven it just works opposite for me but I'm very glad that works for you and I can definitely tell because you were drawing more money from ATMs$80 there$500 there there's not really it's fun money's being spent on here this is money getting transferred back and forth and withdrawing right right and then I did I did send you the I put my excel excel sheets of what i have currently in my binders not in my wallet but um because that's kind of like always rotating but in my binder specifically um what i have and then like i said i have another checking account as well yep we'll look at all of it so there are subscriptions on here we do have subscriptions going and kind of a big debit card purchase lovery love every or whatever i love very geez it's love every it's a subscription kit for my son honestly i'm gonna get rid of it because it's pretty expensive yeah so you definitely have subscriptions on here and then amazon purchases as well so let's go find that other check and here's the other checking okay yep this one definitely has a buffer 5252 starting more money out again though 3 ,416 out where 3 ,130 came in, ending balance of just under$5 ,000.

8:20So let's see what's up here. So, yeah, here's, well, this is a ring subtraction, and then transferring things, transferring things, and good hometown something, and planet home, ACH. That's my mortgage. Your mortgage, okay, so you own a home. I do own a home. Okay. lots of transferring transfer transfer transfer okay very cool so your mortgage is 1500 a month right 1550 right well it's a little under that but i put the principal like i just round it up because i'm in the app it says they don't make me pay off a year earlier so i don't know 26 extra a month we'll do that but i mean yeah and then we have savings as well a youth savings account that you must open when you're younger so only two thousand nine hundred sixty one dollars in here so what's what's up with this what what is this to you so that is actually my son's saving account that's what i've saved for him um and obviously if it it hit the fan then you know because it is my account it's just it's a savings account but it's i don't take anything out of that what's the purpose of it or is it to save for his college and stuff like that so it's not necessarily for his college i don't know i guess i just wanted him to have money i have a five to nine plan for him for college that i pay into um so i don't know i just was saving i guess yeah okay yeah that makes sense so i don't know what the interest that you're gaining on here is though.

10:08Oh, no, 0.01%. This is terrible. Transfer immediately to somewhere that gives you at least 3%. Because, yeah, I'll let it keep up with normal inflation at the very least. All right, let's see here. We also have, oh, okay. Yeah, here we get into the debts. Previous balance, 1 ,918. New balance, 1 ,865. Only made a payment of$100 with$46.65 of interest charge that's okay you did pay more than the minimum monthly payment which is 65 not that much more when it comes to a balance like this luckily you make good money so i'm very curious what the overall situation looks like when we're at the end good you are not purchasing things on a card that already has a balance that you're not paying off because also it is at a rounded up 30 percent interest terrible death yeah that one that card i definitely um regret but it i was traveling a lot for work well not for so i was still in the military and i was having to pay for my own plane ticket and of course they were offering 50 000 points and whatever else and uh i didn't realize how bad the interest was and again i feel like i just became financially literally literate somewhat like six months ago so now i'm just trying to it takes a lot longer to dig yourself out of the hole uh than i thought it would it's very true but i'm just glad you're not putting more money on there since you're not fully painted off and it has 30 so but i get it and then before we look at those monthly things that you put up we also have a prime card new balance 320 with a minimum payment of 35 dollars is this always paid off yeah i see no interest was charged was this is this always paid off i always pay that one off um i'll use it like so anyone in my household so it's me and my partner and my sister anyone in the household will use the card because that they have really good points for the amazon card um interest not good but which i because i had i paid that that one had a balance at one point that I paid off.

12:21But that one, I do like to get the points for it. But I do pay it off every month. You have a purchase every two days, about every two days. That's a lot. Yeah, that is a lot, which I need to work on. It's hard to say those are all necessities if they're every two days. You're right. They are. I guarantee you they're not all necessities. Guarantee it. I live in a smaller community, like pretty small. So it's like harder to just go to the store and get things that I think most people would be able to get. But again, you're right. They're not all necessities. What do you mean? Do you have a Walmart?

13:03No, we definitely have a Walmart. But like I would I would say like so I'm from the East Coast originally and the things that I could get in Walmart there are not the things I could get in Walmart here. The population here is like 10 ,000. I'm OK with getting necessities from Amazon, but I'm less OK with getting a fun purchase. even if half of these, even if half of these are necessities, I'm not good with getting a fund purchase every four days when you have a$2 ,000 credit card balance that's accruing 30 % interest. So let's continue to look at your accounts, but okay. Thrift savings plan, civilian, rate of return 1.88, which is still crap compared to today, but at least it's much better than the, That is my retirement plan.

13:56And I'm supposed to like, put it in different funds and stuff. But I don't really know much about that. So I haven't done it yet. well I don't know thrift you might want to contact them but yes we definitely want to put these in things I do not give investing advice this is not official financial advice but I'll tell you what I do with $19 ,830 I put it in you know spread it across good returned mutual funds and index funds like the S &P 500 which gives you an average 10 % return when taking account it's average since the beginning to end on a 10-year basis. It's average yearly return, 10%. That's what I do.

14:39Believe it or not, 10 % is higher than 1.88%. So that's typically what I would do. So that's something you might want to reach out to them. I use Fidelity. Fidelity is great. You could probably roll this over. It's not even in something. I actually get them through my job. And so I put in 5 % of my income and they match it. This is your current. this isn't from your previous military position or something like that no i think in my military one there's like two thousand dollars because they don't match if this is your current then okay so yes then we just want to get in contact with thrift uh you might have a representative maybe your workplace has a representative i'm not exactly sure with their service but see what they offer and you can get target retirement funds as well which you know aim to get you to a certain retirement place that you want to have um by like 20 well in your case you could get like a 2060 maybe a 2070 retirement fund something like that uh and it aims to get you to a good place for retirement essentially as long as you're consistently putting in enough money that kind of comes down to your decision in the end yeah it comes out automatically and i just put it at 5 % right now.

15:56Eventually, when I'm out of debt, I'm hoping to put up more. Yeah, I would definitely take the match because that's always 100 % return on your money. So it makes no reason to not pay that off. Even the 30 % interest is not even comparable, you know, when it comes to 100 % return. And then, oh, we have something. Oh, we have something. So what in the world is this? what is this 18 ,923 dollars debt so that is my biggest debt right now um I did a consolidation because I had I had a lot of credit card debt that's what I was guessing yeah um and that one when I so I did the math on it as far as the interest rate and the monthly payments that I was making on the cards that i had and this was smarter well i'm okay with consolidation at a certain point it makes more sense to consolidate than do something like the snowball method or avalanche method so this is me i know i i don't know what it was like i'll just take your word on it that it was smart but what is the interest right now what is the interest rate on it not great it's um i think 11 that was a lot lower than the credit cards that i had yeah that's usually lower than credit cards but 11 is still deadly oh and especially on 18 ,923 with 56 monthly payments to go with a minimum monthly payment of 413 luckily you probably bring home about five thousand dollars post taxes a month right maybe four thousand five hundred it's not that much i wish um so well i guess i wasn't taking your contribution to 401k either so what is it i don't know i feel like i have a lot more deductions than like the standard person i pay into a retirement fund um as well so like if like if i retire from here 30 years from now i'll get like 40 of my income but i have to pay into the fund for it okay i don't know that's just yeah i have a lot of deductions but i would say my take home each check is like so in the month i would argue that's closer to four thousand but right now i'm actually currently in school as well and i'm using my gi bill um and so they pay for my well why are you in school and you're making $75 ,000 a year with guaranteed incredible raises.

18:27What, what are you doing? Well, I'm using my GI bill, which, um, they pay for my housing while I'm in school. So I'm trying to take this time to take off my debt. Cause they, like I said, they pay for my housing. Yeah. The housing thing that might, that probably makes it worth it. My concern was all the time studying on school could be spent on side hustles that would pay this off quicker. But if it's taking care of housing, it might offset. What are you going to school for? Where, for what, for how long? So right now I'm in school for massage therapy. Um, I just thought it'd be a cool thing to do.

19:01Well, you're not actually going to do that though. Correct. Um, I mean, I think it'd be a cool side hustle, but I'm not going to like switch careers or anything. Yeah. That'd be a big pay cut, especially at first big pay cut, average$15 an hour. Yeah. Yeah. So I'm not going to quit my job board or anything. And then, um, I'm actually just using the rest of it. So I have another, I think, 16 more months and I'm going to go. So once this class is over in the next couple of months, I'm going to go back for or continue for computer networking.

19:37And that'll take like the rest of my GI bill. And so I'll have my housing paid for the year for another year. Like I said, I'm hoping that that'll put me in a much better position. one second all right so and then your workplace it offers uh so there's a pension that you're paying into as far as i understood and they have a 401k on top of it right okay and i also have a um health savings plan so for child care they take out my child care expenses pre-tax okay so yeah you deduct a lot okay and that's okay you're doing them into good things so that's fine well the pension well i don't know the in and outs of each pension and it depends but victory capital capital we have a thousand six hundred thirty dollars in what oh investing for minors is another investor oh is this his uh that's his 529 plan okay cool cool i'm fine with that so

20:44do you eat out i do eat out i need to be better about it um well where because there wasn't like a lot um right so if i if i eat out again i budget it and i take out the cash and then i put it in my wallet but i feel like i probably give myself too much yeah that's why i don't like cash on my side of the table because I don't I can't see where it goes but we can look at your uh thing so child care do you owe child care to someone else or is this you just put that as a general category so well that's that'll be I think you're looking at my bills yeah I'm looking at your monthly bills yeah so no that's what I pay to my the child care center um every month daycare yeah daycare okay cool so credit card 100 ring alarm 10 hello bello this is diaper service okay is it price effective compared to shopping for diapers honestly i don't know because i've never done it i probably should look into doing that yeah take you love amazon take a look at diapers on amazon because we need to squeeze as much money out of you as we can i as much as i love youtube premium i don't think you should necessarily have it right now whatever we can cut back on Apple One I don't think you should have right now yeah maybe continue doing the 529 Hulu I would cut Gerber Life I don't know what that is you could probably cut it it's a life insurance policy well it's not making or breaking Amazon credit card 100 you spent more than that didn't you oh yeah that's um in total 75 so just it's time if you want to get real and take care of this deadly 30 credit card debt then we get real because even with four thousand dollars after all deductions i see no well okay i see no reason why that's not paid off in two months do you have car debt do you have vehicle debt i do that was not included in all this so what is that car so like what kind of car is it it's a um 2012 ford explorer okay how many miles is that not a good car um it's a hundred it has a hundred miles on it what's the loan right now i think the loan's at like 17 000 i'm pretty sure 17 000 how why i did get the warranty i don't know i just i got nervous i think so did you not include this because you knew it was gonna kill me oh what's the monthly bill so the monthly payment is 365 um but i don't pay that i don't pay that i have another car um what so i have i have a honda civic that's paid off but we needed another vehicle it's kind of like so there's three of us and my boyfriend told it his car and it just made more sense for me to get it because my credit's better wait when did you get this 2012 um like four months ago i thought you said you became fine well yeah i didn't well i didn't know that car debt was a problem until like last month so again not completely financially literate um that's usually step number one okay so six months ago okay what's the interest rate on that what's the loan repayment 5.7 something like that um and i know i thought that was kind of hot because when i got my civic obviously like five years ago it was a lot lower but that seemed like the standard going rate so um the repayment term oh um not the longest i think four years four years i think maybe car markets on the way down i highly doubt you could sell that car for that amount of money yeah i realize that now too that first of all it doesn't make sense that you have two cars because you're not married and you have car debt for a car that your boyfriend used that's bad that makes no sense it makes no sense if you guys are married then okay fine you know but you are having debt on a car for someone you're not married to well i think that uh i get what you're saying i think for me marriage is kind of like it's important i mean if it matters to you but i think it's more of like, I don't know, just a piece of paper.

25:54No, it's when a marriage, it can be, okay, I'm trying to find a proper way to say this. It can kind of be defined as a business agreement as well when we're talking about personal finances. You agree upon certain things. And when a divorce or separation were to happen, there are legal things that get settled. whereas if it's just a boyfriend you have this debt on this car and he's like oh i'm gonna go just not be here anymore there's nothing that happens there's nothing legally that happens there right well if i wanted to get a contract put in place i could for specifically for the car that i could and it was helpful that same way right or no i don't know that contract i mean i I guess you can make a legal contract for almost anything, right?

26:48But I'm not a legal expert. Either way, it gives protections in certain cases like this in the financial space. I'm not even talking from a religious perspective or anything like that. But that's why I talk about marriage when it comes to finances. So, no, this was dumb. And I totally get that. I think, you know, in the worst case scenario, I would sell my car because my car works fine. Plus, you have the warranty on it as well. So, I think you're underwater on this thing. I'm not 100 % sure, but I would not be surprised at all. You're probably right. You're probably right. So, no, I don't think you could just sell your car in that situation.

27:23So it's a risky maneuver that you're going out about. Either way, now we're in all these bad debts. We have all these minimum monthly payments. This$4 ,000 is not going as far as you'd like. Let me guess. You probably took advantage of like a VA loan. Right. What's the worth of this home? What was the purchase price of this home? Say that again? What was the purchase price of this home? $2.95, I think. Oh, okay. Your money's not getting stretched very far. It's pretty expensive in Colorado right now. Well, I mean, this becomes pretty clear in my mind in terms of what I would do, non-official financial advice, if I were in your shoes.

28:06There's the$1 ,550 mortgage payment. There's the car payment. And then there's the credit card minimum monthly payment and the account consolidation payment. After all that, you probably have what, like$1 ,500 left? Does that sound about right? I would say it's probably closer to the$1 ,000 right now. Okay. Then from there, for, again, your partner better be contributing to grocery money and baby money, yeah? So, yeah. So, I pay for our son as far as childcare and stuff like that goes. I'll pay for all of his expenses. Since we're having another one, and he'll take care of hers is how it'll work.

28:49And then, of course, groceries. Yeah, he pays for most of the groceries anyway. It's time to cash budget that grocery bill to pretty much nothing. Home repair, renovations, we're not even thinking about renovations, and we're doing the most minimal repairs possible to not make it a death trap in the inside. Christmas, that already passed. That's gone. Birthday, we're cutting. Birthday, doesn't matter. Travel, doesn't exist. $190 to travel? Absolutely not. Not even close. Your car maintenance at$264 seems ridiculously high. Clothing? Nope, we're cutting it. Gifts? Nope, we're cutting it. Pet care?

29:18Take care of your pet. Of course. This doesn't make sense right now. Of the$1 ,000 left, you need to have all other expenses needed to survive. Essentially be $300. Then the extra$700 has to go to this credit card and that credit card needs to be paid off in about three to four months. It'll be like three and a half months it would be paid off because you're just, you don't go out to eat once. You don't get anything on Amazon. That's not a complete necessity. That's a better value than you going to Walmart there. And then from there, that minimum monthly payment barely even does anything at that point.

29:56It's the interest rate that's so terrible, but you have, again,$700 and of the$19 ,000, it's going to take 27 months 27 months of additional payments, probably like 25 months, 24 months to pay off that really bad debt. So really. Well, all of it, how much of it? The 19, sorry, I was thinking the$19 ,000 of that consolidation, 27 months of you putting extra$700. So I do get$400 a month from my sister, but I hadn't, I kind of been saving it just, yeah, I've been saving it, but I guess I should probably put that. Well, with where you have in your savings right now, we're going to stop it there until all this death debt is taken care of.

30:45Once the death debt is gone, then we can focus back up on that again because you have about$3 ,000 there and I'm okay. And you have a good buffer and you're checking as well. So throw that towards this stuff as well. It's still going to take forever. so that's where I'm a little I would rather instead of you spending time at school you're spending time well crap small town who knows but anything you can do anything online any little small jobs you can pick up all the extra money you can as miserable as a couple years is going to be it's going to be a couple years I'm sorry but this is I think your mortgage is too expensive for your life right now for your debt situation it doesn't make sense actually you know your mortgage is too much for your post tax just barely but still the things need to be figured out you need to there there just can't be i'm sorry a single cent of fun money for probably a couple years which is so hard to tell someone and very almost unrealistic for most people to do but if you realize how bad this debt really is then hopefully that is something you actually do because it's time to cut back on everything and put any penny you can squeeze out of your life into paying off the bad credit card first, then the consolidated debt, and then that car.

32:01And then you're in an incredible place because you do have a good income. Right. So I know right now I'm in massage, like bomb and massage therapy school. I do have to physically go. So I do go at night. But once I switch over to the networking, That'll be online. So I will have more time to potentially either use the massage therapy as like a side hustle or figure out some other kind of side hustle as far as that goes. I don't know what it would be. I guess I need to start looking into that. But I definitely hearing what you're saying. I know I have. So I still qualify for financial aid. And so I know at the end of this course, I will be getting like$2 ,500 back.

32:47And I know my tax refund will be because up until this year, I was filing on my W-4. I was filing single, no dependents. And so when I file my taxes, I do get back like$6 ,500. and I kind of wanted to just, I know every year like you get that and you, you know, want to spend it on fun, but I was going to take the time and like actually put it towards debt this year. Yes. Nope. Not a single penny that goes to anything but debt. Right. But I was, I'm hoping that'll like push me more on the right direction that like a little faster. It's a hard financial situation for Cassie. She has a lot of bad debt and you know, even though she's not actually spending that much money on fun, it's more money than she can afford because the mortgage has taken up so much of her money.

33:33These minimum monthly payments are so bad. She's left with practically$1 ,000 before food and everything necessary to survive. So it's a really big struggle, and it's going to take years and years of sacrifice to get out of the mess. But she can do it, and she can do it by the time she is 30 and have a fantastic rest of the decades of her life if she sacrifices now. Hammer financial score with all those debts and everything, 3 out of 10. check out all the fun things in the description including my Twitter and Instagram and don't forget to subscribe, thanks