Quits His Job Every 6 Months And Wonders Why He Can’t Afford To Live

28:04So I'm curious what it's like up in. It's really similar, actually. So you can find some good rent houses. We found a couple, like a 1 ,600-square-foot rent house for 1 ,700 a month, but those are few and far between, mostly. Or if you want it like a two-bedroom. A house is a big thing, though. Yeah. Yeah. Living a family is a big thing. You guys can. Mm-hmm. I love this rate. I think I'm just going to try to do everything we can to hold onto this house. Yeah. Yeah. Because, I mean, we had run the numbers, and we could pay off pretty much all our debt except student loan. I know. That part feels good.

28:35That part feels good. But this thing should be a big wealth builder for the rest of your life. And I mean, even if this isn't the house you retire in, when you get to an other house, you're going to be able to roll over so much of this into it. Right. I'm going to do everything I can to not do that. But if you do choose to do that, I won't be like furious. Okay. I personally would not. Okay. Unless is there like, do you guys need anything different? Is there any context? Oh, house wise? Yeah. Well, we'd like a bigger house because we do want to have a second kid. Oh, yeah. And, I mean, there's enough rooms in the house.

29:13How many house rooms? Three. Yeah, four rooms. But it's pretty small. I mean, this was definitely a starter home. We got it. We got kind of rushed into it. But, I mean, it's where we are now. So we do want to be kind of further out. We want to be a little further out from the city and stuff. But it's definitely not a necessity. Further out from the city? Yeah. So you can have less things to do? We just want to be away from the traffic. I mean, because that whole area has exploded in the last five years, and it's just not fun to be around, to be honest. So your non-mortgage debt, your non-mortgage debt, all the unproductive debt, crazy.

29:56$131 ,979. What do you think of that? It's insane. Yeah. it's well more than y 'all make a year as a household mortgage property taxes property insurance $1 ,914 81 cents a month it's the first piece of the budget now your other minimum monthly payments all together dude only student loans kicking your debt minimum monthly payment is not the mortgage not the mortgage is $2 ,041.26. That's more than your mortgage. All the debts that you all decided to go in, all your f***ing around,

30:41$2 ,041. Oh, that one hurts. What's all utilities together? So let's think internet, gas, electricity. What is all that together? Internet, electric, and water is going to be$90, and then on average$120,$140, so$260. So about$3.50. Oh, okay. Phone bills as a household? Yeah. For an new? Yeah, we're just on the same plan. It's$91 a month. Okay, that's not bad. Yeah. For two. And this child care, how much for the month? It just went up, so$11.50 a month, which is actually the cheapest one we could find in the area. That's crazy. I feel like if we want to fill, if there was a cheaper, no, I don't even know.

31:28If there was just a cheaper version of child care that people had access to, man, we could fill all those positions that are desperate to hire right now. Oh, right. Because if you're going to go work minimum wage or even 15 bucks an hour, it's hard to afford this child care. It's almost like you make more money staying at home, taking care of the kids yourself. It's really difficult. I have a buddy that on their second kid, his wife just stopped working because her income was going to be all of the child care for their two kids. Yeah. She stopped working. Yeah. At that point, it just doesn't make sense.

31:56This is just one kid. Right. Okay. There are tax pennies. You are getting tax pennies. For sure. Okay. Either way. Child care, phone bills, utilities, debt, mortgage, car insurances. Both combined. We just actually combined them.

32:20I believe because it comes out of her account and I Venmo her. So I believe it's like$220 for both of our cars. Okay. Isn't that crazy? For two? Yeah. Cool. Okay. This is what I'm trying to think. This is included in the pile you put into your work food. Okay. I'm doing a grocery budget for the house. I'm going to do... I want to do 500. I think I'm going to do 600.

32:49Because the baby. Yeah. Baby stone diaper? Yes. Yeah. I don't know what age they get out of that because they are stinky and I don't want them. Supposedly, boys are a little slower. People have told us, don't expect it before two years old. He's very close to two. Yeah, but I don't know. Okay, but there's diapers. Diapers and wipes. Lovely, nice, and expensive. Try to do$500 for groceries. If you get that to$600, okay. Try to do$500. And then total paper, keeping the house alive, including the diapers and wipes and all that stuff. $250? $250? Yeah, we buy diapers and wipes about once a month. So that's about$75 to$100, depending on which ones we buy there.

33:35So just in diapers and wipes. Yeah, so$250. So toothpaste. Yeah. Shampoo, all that good stuff. Whoa. All right. This is an expensive life. Let me see what she brought home from her checking.

33:53In this Wells Fargo. Petitions, payroll. She looks weekly. Yes. Yeah. She makes$8.31.61 a week. Well, brings home. She just started contributing to 401k. She should only be taking her match. She should not contribute to anything else outside of that for now. Okay. Eventually, we definitely want to be taking everything. Okay. So$43 ,243.72 a year. after taxes and contribution by that by 12 on average we're going to see about three thousand six hundred dollars a month from her why are you three thousand four hundred because the health insurance comes out of mine at seven oh oh that comes out yeah and for something we are we are going to change is in uh october when it opens up she's actually gonna get back on her insurance for forty dollars a month and then that'll drop mine from 700 to i believe it's like$300 or something like that.

34:55Oh, that'd be great. Having just one dependent is way cheaper than having two. It more than doubles, so that'll help there. Yeah, that'd be fantastic. So right now you guys have a monthly income,$7 ,000. That's what comes into the household. Get that joint checking account started now and get this budget. This budget right here is all your budgets. That's the budget. It is the household budget spent from that joint checking account because you're not using credit cards because you're not a credit card person. I don't give a shit. If you ever use a credit card again, I will always say that people can use the Fizz one.

35:26Okay. Because swipe on it, it immediately pays it off like it's a debit card, but it still builds your credit score. I will say I do have another credit card, but the zero balance. I had to put tires for my Jeep on there. How much is owed on that? Zero. No, I paid it off. So I paid it off with 0 % interest before the - Stop. You're not a critical person because you fall into these situations and then you have a stupid - Stop. Ugh. Let's figure out your monthly budget total. No, this is not looking good. This is not looking good, is it? Oh, jeez. Thank goodness you're both working. That is not an option at this point.

36:07$6 ,517 is what's needed for you guys to survive. Survive. Meaning, your guys' needs category is 93 % of your income. What can we do with that? What can we do with the other 7 % of your income? That's insane. That's insane. That's a we're never getting out of this debt ever again. You know what that unfortunately is? And that sucks because I love what you're doing. You're helping people and you're working a lot of hours and all that. It means that you're probably getting a second job when you're not at the firehouse, which absolutely sucks. It is the last thing I would want to tell you. But it is like this is a real good story about Bronx and his dad, Ryan.

36:49Real United Airlines customers. We were returning home, and one of the flight attendants asked Bronx if he wanted to see the flight deck and meet Captain Andrew. I got to sit in the driver's seat. I grew up in an aviation family, and seeing Bronx kind of reminded me of myself when I was that age. That's Andrew, a real United pilot. These small interactions can shape a kid's future. It felt like I was the captain. Allowing my son to see the flight deck will stick with us forever. That's how good leads the way. Not a choice. It's basically not a choice. And then, oh my gosh. And then whenever.

37:26So would it make more sense to get a second job or to continue to work overtime? Because what I can't say is. No, no, no. Get all the overtime you can. But if there's extra time that the wife is at home with the kids and you're not getting overtime. Working a second job. Maybe you're just running Uber Eats in the city. Okay. And then whenever you're able to rest and the kid's there. Yeah. Maybe she's doing the same thing. Okay. Yeah. Yeah, she was already saying she wanted to look for a second job. I'm just trying to avoid having her have to work a second job, honestly. Well, I don't care. Okay.

37:57Because$483 is not going to do anything for this. So, again, the bad debt, the bad debt that's not contributing to anything. Let's just do an example. A little example. $483, okay, it's going to take you 273 months to pay all that off. Not your mortgage. Not your mortgage. Right. 273. Also known as 23 years. Yeah. So, yeah, she can not get a second job and you guys can do 23 years. That's why we were considering selling the house and paying the debt off. That's an avenue. But, man, it's a wealth builder tool. No, I know. Well, there. Okay. Yeah, these minimum monthly payments are killing you. But we can make progress here, man.

38:42Okay, how much are you going to save on that health insurance starting in October? again, I believe I will save$300 a month. Okay, so that adds$300 to the picture. If she brings an extra$500 a month in from a job, you bring an extra$500 a month in, that brings us to about $1 ,800. $1 ,700. I will say with one overtime shift, I bring home$600. Yeah, that's great. So just definitely do that. But the average we took, the average you gave me was, you said overtime months and no overtime months, the average. So that's great. Everything we get that, we get bonus. But$1 ,800, with you guys working the jobs, the only solution is if you guys bring in an extra$500 from outside work each.

39:24Okay. Plus that insurance gets cut. Yeah. And that's$1 ,800. But the first thing I need you to do, and this is scary because this is going to take forever. That's why you guys are going to go get that other job right now. Maybe even working more, probably not seeing each other, which is really going to suck. But I need you to guys have at least a two-month emergency fund before you even start paying off the debt. Because you have a kid, and it's way too risky. And your job is a quite risky job, especially. We need to have a two-month emergency fund on the side. And at the pace, that's$1 ,300. $1 ,300 with the extra money you have takes 26 months.

40:06to have a two-month emergency fund. Right. That's insane. We can't do that. Even with the$1 ,800 we're aiming for, it takes seven months just to get a two-month emergency fund. Okay.

40:22I mean, I might be changing my opinion because as a household, you guys have a higher median household income than people in your area and the people in the country and the people in the state. You guys are not doing bad. You've just gone into so much death debt. You've not been making progress, and you've still been putting money on the credit cards. I'm entering a place of no hope right now, which really sucks. So the solution that I am seeing is getting rid of that beautiful 3.2 % rate. So I think what I do, what I do in this situation, unfortunately, as absolutely disgusting as it is, We put up the house for sale.

41:06We try to get it where you walk away with that$100 ,000. How long have you been in it? Just under three years. Okay, so it's over two years, which means you will not have to pay taxes on it. We went to list it before we were in there for two years, not realizing capital gains tax, before our realtor said, hey, wait a minute. And we were slated to make$180 ,000 at that point, because that was when the market was insane. We should have sold, paid 20 % capital gains tax, and we still would have walked away with more. market's been ticking up this last quarter so yeah like you might be in a good maybe there's just there's no houses for sale and people still want to get houses even though the rates are death yeah so what i'd be doing is i'd try to sell the house okay see if you can get 100 maybe more where's the cutoff point when do we decide if you're not walking away with a certain amount of money where do we not sell it so when i was talking to the realtor she said five percent down should be fine for the next house because i always thought you're not going to get into another house right now okay i'm going to have you be renting well but i want i want to hold on to at least that.

42:02So that would be$20 ,000 for a$400 ,000 house for a down payment. So as long as we can make$70 ,000, we can pay off the$50 ,000 in debt and then still hold the$20 ,000. Well,$50 ,000, you have$131 ,000. No, I know, not including student loans. That's the credit card, the car, the personal loan, and her credit card. Listen, you're going to put aside$1 ,200 from the sale if you get it,$12 ,000. That's an emergency fund. The next down payment, we're going to save up eventually. Okay. Everything else is going to the debt. It does not make sense for you to have the sitting aside. Even if it's that 4.4 % interest in the sofa, all these interest rates beat that.

42:43So you're just losing the money. There's not a single interest rate. That's, that does not beat that. Except for the mortgage. Yeah, of course. So, yay. I'm going to just get a rough value on your house. Okay. Okay. What's the, what's the purchase price or reasons? What's the purchase price you got it for? We got it for$243. I think we owe$230 on it. You owe$230? Mm-hmm. I want to take a brief moment to thank today's video sponsor, Aura. Are you sick and tired, just like me and everyone else, honestly, of receiving endless spam calls every day? I mean, look at this. Let me open my phone. Look at this.

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44:05You can get everything at one affordable price. Let Aura do the hard work of keeping you safe online so you can focus on other things with peace of mind. Go to aura.com forward slash hammer or check out the link at the top of the description below. Thanks again to Aura for sponsoring this episode. I mean, even Zillow will give you... I can't believe they're starting to do this again. I thought they stopped doing this. They'll give you a cash offer of$317 ,000. Really? So with that, they'll do that. I bet you can sell it for$330 ,000-ish. That's what the realtor was saying. Now you're going to have to pay the fees and whatnot.

44:40Right. So we won't bring home$100 ,000 if we make$100 ,000. Bring home, like, what, after everything? $80 ,000 to$90 ,000? Yeah, I was about$85 ,000 or so. That might be the only solution to pay. I'm sorry this situation is so dire, man. it's really sexy because you guys are into a home into quite a cute home I will say it's a nice house looks like a nice neighborhood yep it's just a learning lesson not to get yourself into just complete because now you're just swimming in the sewer and you can't get out so hopefully we have$85 ,000 to play with and we definitely pay off that high interest rate credit card we pay off the personal loan pay off her credit card probably pay off the car at that point.

45:24That's$48 ,000. We'll pay off the wife's credit card, your credit card, your personal loan, and her car. Then pay off her student loans. Okay. And then everything else remaining goes to your student loans. Okay. And because they're over 5 % especially, but we also put$12 ,000 aside. So I bet you guys pay off credit card, personal loan, her car, her credit card. most if not all of our student loans and then that's probably it then we're stuck with the 700 dollar minimum monthly payment for your student loans and now is that 700 um is that with the 10-year repayment plan probably okay well because i know you're not a fan of the income income driven well it wasn't before things have well like what income thing are you gonna be like your guys's income isn't bad but either way the income driven repayment plan so what they what happened before the last few years is like a dozen people like actually made it through that income shopping is hard right but i found a better way stitch fix online personal styling makes it easy i just give my stylist my size style and budget preferences i order boxes when i want and how i want no subscription required and he sends just for me pieces plus outfit recommendations and styling tips.

46:40I keep what works and send back the rest. It's so easy. Make style easy. Get started today at stitchfix.com slash Spotify. That's stitchfix.com slash Spotify. I actually got it forgiven, but the Department of Education right now, the current one, has forgiven tons and tons of those. So that process has actually made sense. One reason why I'm still skeptical to get into it, okay so if it's administration to administration what if by the time you're ready to qualify whoever's there is like nah we're not doing it because this is it feels like it feels like that it's like up to whoever's just running the department at the time right right and that's not politics we can agree or disagree with all that stuff right that's just like how it's been historically for sure um there's also risky i logged in the other day and there's now um i forget what it's called but basically for government employees and it can be city state or federal and it's a repayment plan where if you make a payment for 120 months and you're not late, they forgive what's left.

47:39So it's 10 years instead of 20 and they'll forgive what's left. And so I was going to... I want to be in this for 10 years? I mean, yeah, that's the other part is... Because we could get you... With your guys '... Because your rent... Well, your debt minimum repayments will be... You'll have an extra... Because you guys still need to work extra money during this whole thing. But you should have an extra$4 ,000 at this point, you can pay that off in a year and a half. Yeah. I would just rather be gone with it a year and a half than 10 years. I'd be trying to convince her to put all that money towards my student loans, though.

48:13That'd be all. Why? I mean, just... Because I guess she might want to do other things. I just feel bad for her other things. She needs to be here, though. A majority of that is my debt. So she signed up for it. I know. Are you guys not even close to on the same page about this? No, we are. I mean, we've talked about selling the house. That's why I called the realtor. What about the student loans done? I mean, we haven't really talked about student loans because she's been making payments nonstop. So hers have gone down substantially. I think she's got like 20 grand or something like that. Yeah, no, I saw.

48:44Okay, well, I mean, you do what you want to do. I think just based on if I was in my history, in my history of payments and being strategic about every single cent, I might do the 10 year thing I'd look into how reliable that is but I might do that for myself but based on you your history of debt and all this stuff and just being reliable and then things just constantly change and your job always changes even if you like this one right now you've been in it for like 7 months your job is always changing you're going into debt getting out of debt going into debt whatever and popping out babies left and right just the one I know but you said you want more so yeah Especially if you're having more.

49:29Let's just get rid of this. Let's get rid of the risk in your situation based on your own. So I'd get rid of that in a year and a half. And if you guys, well, it makes me nervous. What happens if you can't sell the house for anything that you feel comfortable with? What if you just can't? Even this cash offer. What if this cash offer goes away? Right. And then what do we do from there? You pay this off in 25 years? Right. So this is a very difficult situation. And I'm not usually in a position where I'm like, I don't know what to do. This is what I'm hoping can get done because you get a good offer on a house.

49:59Right. If you don't. Is that year and a half spending like that$4 ,000 that we would save every month on the student loans? Okay. But you have a two-month emergency fund sitting on site. Right. And then after that, you're probably spending the next half of that second year saving a pretty full-time emergency fund. Okay. Then boom, you have a six-month emergency fund. You are 26, 27. she's 25 26 or 30 sorry 36 37 33 yeah and she's uh 35 36 somewhere around there okay and then you guys are probably putting about you guys are very behind on retirement she probably wants to put about 30 aside for retirement and you probably want to put about 30 aside for retirement okay And then I would try to, when you do start saving up to get it, that's towards retirement.

50:54Yeah. I'd probably cut your fund money on both of your side. Both of you guys, I'd probably cut your needs, live cheap for a bit, because you guys are renting in this situation, by the way. Right. I'd probably cut your needs by a bit and your wants by a bit and put it into a down payment fund. Okay. And then eventually you get a house. But when you get a house and when you get this rent, max out your needs as a household, household incomes, combined finances, 50%. No higher than 50%, and then you're each investing 30%, so there's 20 % you can put on fund. And with a good household income like you all have, you can do a lot of things with that.

51:26You can take nice vacations and stuff like that. When you say, we're not going to have much fun this month because next month we're going to spend this month's fun and next month's fun by going on a big vacation. That's great. Do that. We can't do that until you have full of emergency fund in about two years, and that's only if you can sell the house. So it's a sketchy situation, I wish I had a better answer to it. I hate, hate, it goes against every bone in my body to get rid of that 3.2 % interest, but I'm also a slut for real estate. So it's, yeah, no, that was the, that was our hangup is knowing that we won't get an interest rate like that for years from now.

51:58Yeah. So, yeah, but you guys aren't even into your forties yet. So there's still time to get into the forever home. Maybe the next home that you guys aim for is the home that you can grow into a little better. Yeah, for sure. So for sure. but it's gonna be a grind dude and you guys have to get on that same page what's definitely made me nervous is you've paid off the credit card you've built it up chop them up close the accounts i don't give a even if you paid off that other card i don't give a close them you're done no more okay credit cards do not exist in your life probably don't exist in her life because she's holding a balance you need to get on the same page whether or not that's having the conversation or going to like a counseling service yeah that's fine but you guys need to get out of this debt and then it's a sacrifice for two years.

52:44You guys are still working here in those two years. Extra jobs. That's what got us to the numbers. If you don't, then paying off your student loans plus the six-month emergency funds probably can take like five, six years. Right. You need to bring in that extra money because your needs are still quite high. But right now, your needs be 93 % of your income. That's like actual financial insanity. Yeah. It's crazy. You can't do anything with that. And the fact that there was any fun money spent, I understand why you guys aren't making any progress on the debt. And just relying on little extra bonus tiblets from the overtime.

53:23But work as much overtime as you can. Okay. And work an extra job. Have her work an extra job. Okay. And then you guys get to spend the rest of your lives together without having to work extra jobs. And your kid and future kids will be able to spend all the time with you because you're in a good place financially speaking. And then you're going to be able to retire, and then the kids won't feel morally obligated to take care of you. Yeah, absolutely. But you can fuck around as you have the last decade and a half, and then they will. Yeah. So that's up to you. No, for sure. That's why I'm here.

53:53It's not a good place to be in. You know yourself. You know your relationships. What do you think is actually going to happen when you leave this place? Oh, no. I mean, I'm going to change. Because more than anything, one, I want to be able to retire. And two, I don't want any stress on my kid. My dad's actually really smart financially and he's set, he's partially retired. He just works cause he doesn't want to get bored. Sure. He could retire if he wanted to. My stepmom retired. Like they're in a good place financially and that's where I want to be when I'm 65 like they are. So I want to change.

54:21I mean, what are you guys going to do? Knowing relationship, what's going to happen? I'm, I mean, I'm sure she'll be on board. Like she, she wants her debt, which isn't even that much paid off. Um, I mean, she's even said she's fine with selling the house. She'd prefer not to because that interest rate, obviously, and then renting. But no, I mean, she wants to get rid of it as badly as I do. It's kind of the nuclear option. And right now... Mostly because we both want a second kid. So she'll pretty much do it so that it's financially doable for us to have a second kid. Okay. Yeah. Cool. Any final thoughts?

54:56No. I knew it was bad. And that's probably why I had never sat down and gone over it, honestly. Because it's out of sight, out of mind. And I'm bad about that. So it's good to have it into perspective. I didn't realize it was 93%. Come back in a year and a half. Bring her with you. All the debt should be gone. And you should have a two-month emergency fund. A year and a half. Don't let us down. Okay. All right. For Mr. Joshua, you know, he kind of nailed his hammer financial score. And it's because of the house that's really pulling some weight. Spending it in a budget, certainly spending money, absolutely shouldn't have.

55:33If it was stupid, it makes no sense. Two out of ten because it wasn't the absolute worst that we've seen. And we know it could be a lot worse. Debt, one out of ten. No collections, no owing the IRS, but it can't be higher than one because that is some disgusting debt. Retirement, definitely behind for their ages, but there is something in there. Two out of ten. Emergency fund, there's nothing in there. That makes me scared, especially with a family with a kid. Zero out of ten. Real estate, because they didn't put much down. The equity position is only good because the value of the house skyrocketed over the past couple of years, but they have to sell it anyway.

56:09Four out of 10. Hammer financial score aggregate two out of 10. Check out all the resources I've linked in the description below. They are resources that I either use or would use and there's paid affiliate links there. You can get a high yield on your money with SoFi at 4.4 % of the time of recording this episode or you can put$5 in Acorns and get$5 for free. And there's a lot of other things as well. Don't forget to follow my Instagram and Twitter. Thanks.