A Seattle man named James made a questionable decision just one year after filing for bankruptcy. Despite his financial struggles, James decided to spend over $35,000 on a Dodge Charger. This emotional decision was revealed during an episode of Caleb Hammer’s YouTube Show, “Financial Audit,” where James admitted to several poor money moves that led to his current situation.
Hammer, known for his brutal honesty, expressed his disbelief and disdain for James’ choice. He pointed out that driving around in a Dodge Charger did not make James cool and that he was paying $850 a month for a car that would only invite judgments from others.
James, who earns a comfortable salary of $80,000, confessed that he struggles with personal finance, particularly when it comes to using credit cards wisely. Hammer emphasized that James should be in control of his finances, especially since his wife earns just $40,000.
James had previously made a financial blunder by purchasing a BMW for $20,000, which broke down within a month. Recovering from this mistake, along with other financial mishaps, has been a difficult process for James. He didn’t have an emergency fund when his car died, and even though his bankruptcy only lasted three months, he has faced numerous challenges.
After relying on an electric scooter for transportation, James bought his wife a 2008 Acura TL when she became pregnant. However, he still owes $7,252 on the car with a staggering 23.69% interest rate. Additionally, the couple has to deal with the monthly $850 payment for the Dodge Charger, of which only $411 goes toward the principal.
Hammer couldn’t comprehend why James would choose to take on such debt with a Dodge Charger after going through bankruptcy. He expressed his disbelief and labeled James’ decision as “crazy.”
During the episode, James acknowledged his excessive eating out and the lack of financial focus in his family due to separate checking accounts. He expressed his desire for more clarity and accountability in his financial situation.
Hammer, although not a professional financial advisor, provided James with practical advice. He created a monthly budget pie graph in real-time to help James understand his expenses. They discovered that the couple’s phones were also financed, costing them $270 per month, and the Dodge Charger consumed an additional $600 in gas due to its low fuel efficiency.
Hammer urged James to immediately set up a two-month emergency fund using the $2,500 they had left each month, even before tackling their debt. He emphasized the importance of sacrificing over the next six months to achieve this goal. Hammer projected that if James followed the plan and avoided unnecessary purchases, he would be debt-free with an emergency fund in a high-yield savings account within three years and two months. This would allow James and his wife to start saving for retirement and secure a better future for their child.
Hammer closed the episode with a powerful message, encouraging James to make the necessary sacrifices for his future and his child’s future. He emphasized that by doing so, James and his wife could live a fulfilling and enjoyable life, surpassing those around them.
It is important to note that this article provides information only and should not be considered as financial advice.
