Why Would You Do THIS While In Debt?!

0:28Americans told Washington what they want. A KFC tale in the pursuit of flavor. The holidays were tricky for the Colonel. He loved people, but he also loved peace and quiet. So he cooked up KFC's$4.99 Chicken Pot Pie. Warm, flaky, with savory sauce and vegetables. It's a tender, chicken-filled excuse to get some time to yourself and step away from decking the halls. Whatever that means. The Colonel lived so we could chicken. KFC's Chicken Pot Pie. The best$4.99 you'll spend this season. Prices and participation may vary while supplies last. Texas Tips and Fees Extra. My name is Mitch. I'm based out of West Michigan.

1:02I'm 28 and this is Financial Audit. I'm from Michigan, West Michigan, actually. That's where I'm from. I'm from Kalamazoo. Where are you from? I'm 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 nah, 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 how in michigan i am a mechanical engineer i work in a a large furniture manufacturer in the area okay uh i work on the factory floor and do a lot of really boring stuff lots of emails but it's pretty much the long and the short of what i do how long you've been doing that about a year now oh what'd you do before that i graduated from college dang you graduated a bit late masters a little late not masters where'd you go to school uh alabama university of interesting out of state okay yep curious uh so what do you bring in a year right now about 89 000 all right 89 000 bucks a year now what do you contribute to a four to one k so i do a three percent company match so i i do that three percent 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 three percent then and then of course after deduction or after taxes are set aside you're bringing in a net of$2 ,228 bi-weekly, it looks like.

2:26Yep, that is correct. So we're going to get you $2 ,228. Well, actually, $29 rounded up. Times up by two. Actually, since it's bi-weekly and some months are a little... Is it bi-weekly or semi-monthly? It is bi-weekly. 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 ,828.50 a month. Yeah, that sounds about right. Yeah. So true average with the good months and then just the two checks months. You never get under that, but sometimes you get the good ones. Either way, that's cool.

3:15So 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 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, and we're going to go through those debts first. But, yeah, give us a brief situation. Give yourself a score, 0 out of 10. All right. Well, first, my score, I'd say, is my honest answer. I'm thinking like a 2. Okay. I have about$30 ,000 in student debt, and that's federal through NailNet. I have about$17 ,000 in debts on top of that. split into two Lightstream loans.

3:54So Lightstream is the servicer. One of them's for about, I think,$10 ,000. The other one's for like$6 ,000 or so, like rounded up. It 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. in 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, where's that most heavily distributed? Mostly in the 401k because of the company match.

4:34And what, what, well, I will get to that. Cool. Well, that's good. Anything else you wanted to add there? Um, 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, that's one of my loans. I, 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.

5:15Well, you haven't made a payment so 11 ,388 yep and this is just a private loan uh what was the purpose of these loans what is this so one of them is a car loan is this the car loan um yeah that's the car loan right there what's your car um it's a 96 toyota it's imported toyota what celsior was that like a fancy car it's a fancy car it's kind of like a lexus 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.

5:54So it is what it is. Yeah, what's the interest on this loan? Because that's what I cannot see with no statement. I want 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 mealtime routine. I've been 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 meals.

6:29And the best thing about factor is their flexibility. Choose from 34 or more chef prepared dietitian approved weekly options. Plus, you can easily add more meals or reduce the number and even skip a week when needed. It takes the hassle out of grocery shopping and meal prepping. Their chef-prepared meals arrive pre-prepared and they're ready to eat in just two minutes. No more sacrificing nutrition for convenience. You can also amp up your Factor order with delicious add-ons like proteins, juices, energy bites, veggie sides, and even desserts. And you know I like them desserts. So again, personally, Factor has been a game changer for me as I really struggle with meal prepping and eating out.

7:09So this has been very helpful and I'm hopefully on that path to losing weight. So if you're ready to make clean eating easy, head to factor75.com or click the link below. Use code HAMMER50 to get 50 % off your first Factor box. That's code HAMMER50 to get 50 % 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 2024. I think it was like 72 months. The interest rate. Not to 2024. That's a lie. 2026. Oh, maybe even longer. 2027. Yeah.

7:56Much longer than I thought. 2024, yeah. So the loan interest rate is 5.3. Bustwood the Boys is here to let you know that every college football Saturday, FanDuel is dropping profit boosts that can turn wins into bigger wins. Sounds like we should rename Saturday Booster Day. Nice. 21 plus and present in select states. Opt-in required. Bonus issue does not withdrawable profit boost tokens. Restrictions apply, including any token expiration and max wager amount. See full terms at FanDuel.com slash sportsbook. Gambling problem? Call 1-800-GAMBLER.

8:3234%. As far as car rates go, not the worst. 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 wiser decision. now that I've been watching your channel for a little longer. What's it worth? It's probably worth about$13 ,000 to$16 ,000. So I could probably pay off the loan mostly. But I'd want to... Like 5 % interest, okay. Yeah, I'd want to flesh out my savings a little more before I just pay it all off.

9:12Yeah. Well, you'd pay it off by selling it. Like, if you got it for$13 ,000,$14 ,000, as you said, you'd profit a couple thousand bucks. Yeah, hopefully, if I do it right. And after taxes, I don't know, but... Yeah. Okay. How many miles are on 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. 31. Guessing that minimum monthly payment starting in August is going to be about$375 a month. Something like that. So we have 3 % there, 4 % or 5 % there, 4 % there, 4%.

10:004%. 4%. 4%. Some of these are rounded numbers. 4%. 5%. Over 5 % on that one. Yikes. 4.5.

10:133%. That's a good one. 4.5. 3%. Yeah, they're kind of all over the place. Yeah. 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. 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. So it was 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.

10:50Yeah. Okay. You mentioned you had this other loan. Did I not have a statement for that loan? Because I don't think I saw it. You should have two Lightstream ones. There's the one that we already went over for the toilet. What's the other one? What's the balance of the other one? And what's it for? That one was a debt consolidation loan. What debt were you 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 monthly payment.

11:24The minimum monthly? While he finds all that, he should subscribe because we're trying to get to 750 ,000 subscribers. Yeah, congrats on half a mil, by the way. Thank you. I appreciate 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 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.

12:08I used to have like four of them total. Now I'm down to one, which is good. I'm trying to wean off of that kind of lifestyle. Yeah. So, yeah, it was through college. I just paid for, I think, one or two of my college payments with a 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.

12:40I 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 FIZ 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. It's 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 it 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.

13:15Yeah, but usually the 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 it may be 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 points. But either way, even though 30 % is like the max you should, we don't want it at 30 % anyway.

13:57Yeah. Your income. Cause that's crazy. If you think of 50 % of your 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. That's like, yeah, I'm over 50 % now and 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 on that one is my job reimburses$100 of a pair of work boots. Okay. So that got reimbursed.

14:44$100 though? You spent$323. I know. Why don't you get a$100 pair of shoes? You have an 8.19 % interest debt sitting over there. What's the logic? I splurged. 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 we then doing Depop, or what is that? Depop? Depop, yeah. and renting a movie and Taco Bell and Williamson Dickey and Elevon and you had a service fee through them and getting some Tim Hortons and I love me some Timmies but guess what? Tropical Smoothie we don't need to be doing it Frat Illies Spotify 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.

15:40Right, yeah. Snap Fitness. Snap Fitness. Is that a gym or is that a food? It's a gym. Okay, I forgot. In Amazon, we probably, that's based on the crap here. Probably don't need to be doing that. Linear Restaurant. Kindle. I mean, it's hard. I should go to the library. I need to go. Yes, there you go. So, fuck you. You have a library. Kindle is out of the picture. Southwest Airlines. Airlines. This is a real good story about Bronx and his dad, Ryan, real 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.

16:20I 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. 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. It's not the greatest way to do that. Yeah,$285. You then point wrappers rewards and MISC and specialty RET. I think that was an add-on for a hotel.

17:02Okay, so where's your mentality? Do you want to get out of that bad debt? You said you're, uh, 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 this. Yeah, you're right. You're going to doing this. So why are you doing it? And 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, I'm not there yet. Well, no, no, no. What is the mentality behind you and just spending this money though?

17:35Well, in my mind, I know it's part of, like, I can handle, you know, paying off the credit card when I 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 in your checking account. So not incredible, but there's some money in the markets. Now we're Venoming out$50. Who knows where that goes?

18:13A 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. Meijer going to Meijer a lot. You go to Meijer a lot, and I miss Meijer, but you go there a lot. Venoming out$30 and House Grand Rapids and McDonald's and taking out$60 for ATM. Who knows where that went? Wendy's and Butcher's Union and Away Grand Plaza Hotel Jimmy John's Kohl's taking out 60 bucks from the ATM who knows where the f*** that went and Venmoing out$50.68 and Jimmy John's in Office Max and Bagel Beanery and Hey Barber Little Caesars, Venmo Bigby Coffee, I miss Bigby Coffee that was a throwback reading there Bigby Coffee is delicious Jimmy John's So again, we're going and we're spending bullsh**.

19:04We 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. 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. That should be taken care of. This last year, you should not have been 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.

19:46So 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 mindset. Get that kick in the pants I needed. Yeah, but how long is that kick in 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. Which it is. But what happens when that excitement wears off? Go back to the glugging down some Jimmy Johns? I mean, I know what you're saying.

20:22It'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 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?

21:00I 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. 2000 bucks. I'm happy with that. 2000 bucks. 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. 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 yield savings account I use. SoFi.

21:44SoFi? I use them because they're at 4.3 % plus up to$250 bonuses when switching to them. So I wanted that bonus, and I want that 4.3 % interest rate. SoFi. I'll 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, I decided like, yeah, OK, fine. I'll put you guys in my link because that's hot and people deserve that rate. But it's a very sexy rate. It is. It really is. Plus those extra bonuses. Like, why not? 750 bucks in the money restaurant. I mean, you already spent a lot of money on actual restaurants.

22:16What is this? That's my bill pay account. OK, 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. Yup. And my rent. Your rent account. Some random other bills. Yeah. Bills. Bills. Bills. Just making sure there's nothing in here. Well I'm glad we're avoiding spending bullshit. You still spent monies but either way. Is this different than anything else we've seen?

22:57That looks like the second page of my pay stub. Oh, okay. It didn't print out very pretty. What's this savings? Is this a different savings? So this would 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 investment accounts is primarily in your 401k, then you have a Roth, and then you have an HSA. What are your funds vested in?

23:35I have some in 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 bet 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. Hablas español. Spreys to Deutsch. Condé nos. If you used Babbel, you would. Babbel's conversation-based techniques teaches you useful words and phrases to get you speaking quickly about the things you actually talk about in the real world.

24:18with lessons handcrafted by over 200 language experts and voiced by real native speakers. Babbel is like having a private tutor in your pocket. Start speaking with Babbel today. Get up to 55 % off your Babbel subscription right now at babbel.com slash Spotify, spelled B-A-B-B-E-L.com slash Spotify. Rules and restrictions may apply. 401k, I have some in a stable income, some in the S &P 500, some in small cap and large cap, some in international stock market, Just kind of an across-the-board type investment portfolio. And HSA is straight up just S &P 500. Okay. Okay, very good. Is there anything else?

24:58No, that's it. So there's nothing else that I have? Okay. Yep. Your monthly payments are going to stack up. It's going to make me nervous. Me too. Like going out to eat and f*** like that, almost$700. is 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. Your minimum monthly payments, what's it going to be?

25:42$994. Very, very soon. A couple months.

25:53So 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 a budget already. Only$14 on subscriptions. Bricks, sports, web,$74 and another$74. You just go out to Meijer a lot. You do spend a lot on gas. Do you drive a lot? Because you go to gas a lot. 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.

26:42Okay. So utilities on average, gas, internet, electricity. What are they? Probably about a hundred bucks on top of my rent. Internet too? Combined with gas and electric? The internet is roped into my rent payment. They got like some community internet thing going on. Gas and electric is only a hundred? Is your place small? It's really small. And you pay that much? Yeah. It's a one bed, one bath. Okay. No offense to Holland, but I don't get it. No offense to Holland. It's pretty extreme. It's not a good area. Yeah, exactly. I don't get the price. Okay. And then, yeah, we had your minimum monthly payments.