A 20-year-old confessed to YouTuber Caleb Hammer that he spends half his income paying a $64,000 car

May 2024 · 3 minute read

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A 20-year-old recently appeared on finance and budgeting podcast "Financial Audit" to talk through his various debts, including a payment plan on a $64,000 Ford Mustang that host Caleb Hammer called "objectively stupid."

Carlos, who lives in Texas, asked Hammer for help budgeting after racking up debt.

He said he worked in security at a soccer stadium, where he earned about $2,000 per month, and also contracted as a DoorDash driver which got him around another $1,000 per month.

He said his income was pretty much all disposable — his mom paid all his taxes, and he lived with his dad rent-free.

@calebhammercomposer This car debt is STUPID #investing #investment #investor #realestate #realestateinvestor #daveramsey #financialfreedom #money #business #grahamstephan #entrepreneur #trading #debt #credit #financialadvisor #wealth #moneytok #retirement #cardebt #studentloan#studentloans ♬ original sound - Caleb Hammer

Carlos said he wanted to be a Twitch streamer, but he gave up because he wasn't making money from it.

He also cited a big pile of savings from family money — $100,000 in cash, and $400,000 for a future home — but said his mom wouldn't give him access to it until he became more financially responsible.

Carlos didn't have any huge credit-card debts, and had about $2,000 in savings of his own. But he said he was spending half his income — $1,245 — paying for his electric car, a 2021 Ford Mustang Mach-E.

He explained it was his second car he'd bought on finance. He had fully paid off his first one, but "it wasn't meeting what I needed it to do," he said.

He said the current balance was $64,000 dollars, and it had a 12% interest rate for 72 months.

"Why did you do that?" Hammer asked Carlos. "That's objectively stupid."

Carlos said he had a plan on paying it off, with $1,245 being taken out of his account every month.

"Dude, that's stupid," Hammer told him. "That's almost half your income."

A Ford Mustang Mach-E electric SUV. George Rose/Getty Images

Hammer said Carlos should be putting his money towards saving for a house or into investments, not on an expensive car. He said he was tempted to yell at Carlos because of "how horribly stupid, dangerous, and risky" the car-payment plan was.

Carlos said one possibility would be to sell his other car — which he said was worth $42,000 – then save up additional cash to clear the loan balance sooner than the 6-year term.

He also said he was banking on getting the $100,000 from his mom, which he said came from his grandfather selling his company for "hundreds of millions" of dollars.

Hammer recommended Carlos pay off the car with his inheritance, then invest the other $40,000.

"Just don't go fuck around with this money when you get it," he said.

He also recommended Carlos buy a $350,000 starter home and pay in cash. Then, he said, he could buy a much nicer home in a decade.

"Just don't rush all these things," he said.

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