Financial Audit: "Burning All His Money On… 'Apps'"

Host: Caleb Hammer
Guest: Mikey (29, Kansas City, Tableau Developer)
Release Date: October 8, 2023

Episode Overview

This episode features Mikey, a 29-year-old Tableau developer from Kansas City who earns a respectable salary yet finds himself deeply in debt. Host Caleb Hammer conducts a thorough, candid financial audit, aiming to uncover how Mikey “burned all his money on... ‘apps’” and other impulsive purchases. The conversation spans Mikey’s career path, debt accumulation, mental health struggles, and — most importantly — a step-by-step action plan for regaining financial health over the next year.

Key Discussion Points and Insights

Mikey’s Background and Financial Trajectory

• Education & Entry into Tech:

  • Holds a finance degree (2019) but transitioned to tech after advice to learn SQL.
  • Worked low-wage jobs initially ($30k–$65k/year), now earns $80k as a Tableau developer.
  • (01:04) Mikey: “I graduated in 2019... actually studied finance... but found out I didn’t like the financial side as much as I did the data side.”

• First Major Financial Issue:

  • Laid off immediately after giving two weeks' notice for a new job; lost all cash reserves, triggering reliance on credit cards and family loans.
  • (03:33) Mikey: “They just let me go at the end of the day... I had less than a thousand bucks to my name.”

• No Emergency Fund:

  • Admits to "ignorance," living paycheck-to-paycheck without any buffer.
  • (05:54) Mikey: “I just... didn’t think about it that way. I was living paycheck to paycheck... I used to think I don’t need money in the bank.”

Debt Accumulation and Spending Habits

• Debt Breakdown:

  • $21,000 personal loan (20% interest)
  • Multiple credit cards, maxed out and then partially paid/consolidated
  • Still spending on cards post-consolidation
  • $21,400+ in student loans starting repayment
  • Sporadic cash app/ATM use, with unclear tracking of expenditures

• Key Spending Issues:

  • Frequent purchases on eBay (primarily silver coins/collectibles)
  • Watches, disc golf accessories, tattoos, food delivery, and in-app purchases
  • Subscriptions: Paramount+, Hulu, LinkedIn Premium, Spotify, and considerable money on dating apps (Bumble, Tinder, Hinge), and occasionally OnlyFans

• Impulse & Justification:

  • Tends to "justify" non-essential buys by imagining their value or necessity.
  • (18:47) Mikey (on coin collection): “Probably $4,000 [worth]... I did always try and justify it, right?”
  • (26:11) Mikey: “It’s pay to win...”

• Host Critique:

  • Hammer is blunt, often incredulous at Mikey’s lack of discipline post-consolidation.
  • (09:55) Caleb: “$200 is accruing in [interest] on a month, in a month, why are we purchasing $1,228? Why? Possibly.”

Mental Health and Its Financial Impact

• Addressing Underlying Causes:

  • Mikey lost 60 lbs and openly discusses his struggle with depression and how “surviving the day” led to poor money management.
  • (13:01) Mikey: “Before I tried to get into my finances... I had to fix a couple other things in my life... I was just trying to survive the day.”

• Therapy and Medication:

  • Allocates budget for ongoing therapy and prescriptions.
  • (38:18) Caleb: “All about it. All about it.”

• Broader Perspective:

  • Emphasizes the need for self-compassion and professional support when struggling mentally and financially.
  • (51:19) Mikey: “You wake up every day... you’re in this, like, state of hopelessness... why try? You gotta try different things.”

Notable Quotes and Memorable Moments

• On Post-Consolidation Spending:

  • (10:24) Caleb: “This is why people do not like the consolidation… now their balance is low on a credit card, so they just go do the same exact thing again and build up the credit card debt, buddy.”

• On Collectibles & Rationalization:

  • (18:53) Mikey: “Probably $4,000 [worth of coins].”
  • (20:15) Caleb: “Really cool. But I say I give a s*** about your future.”

• On Dating Apps and Loneliness:

  • (26:18) Caleb: “Well, did you win?”
  • (26:32) Mikey: “I mean, I’m not dating anyone, but, you know, I’ve met some people. Absolutely... People are weird.”

• Blunt Assessment:

  • (14:45) Caleb: “Congratulations on losing 60 pounds… That shows you have the ability to buckle down... that gives me a slightly more optimistic outlook on this whole situation.”

• On OnlyFans:

  • (26:57) Caleb: “You also spend like 50 bucks a month on OnlyFans.”
  • (27:17) Caleb: “There’s free stuff... that’s all I’m gonna say.”

• On Money Management:

  • (35:06) Caleb: “Of the money that you spent, 33% of it actually came in to spend.”

• On Getting Help:

  • (49:00) Caleb: “It’s sometimes hard, and getting an outside perspective can be helpful…”

• Final Mental Health Message:

  • (51:19) Mikey: “There’s another aspect to [depression]... I was just trying to survive the day... you gotta try different things... maybe you’ll wake up and be a little less miserable.”

Action Plan: Budget and Debt Payoff

Mikey’s Budget (from 38:50)

• Rent: $450 (shared; “everyone move to Kansas City apparently”)
• Utilities/Internet: $150
• Phone: $100 (with $65 company stipend)
• Car Insurance: $55 (car is paid off)
• Therapy & Meds: $205
• Groceries: $300
• Essentials (TP, toothpaste, etc.): $100
• Subscriptions: Only Spotify and phone storage, $12/month max
• Debt Minimums (including federal loans): $835/month

Total necessity spending (needs): ~$2,367/month

The 15-Month Escape Plan

• Step 1: Build $1,000 emergency fund (Month 1)
• Step 2: Pay off Quicksilver card (Month 2)
• Step 3: Aggressively pay down Discover It card (Months 3–5)
• Step 4: Pay off $19K personal loan (Months 6–12): $2,700/month
• Step 5: Expand emergency fund to cover 6 months of expenses (~$11,000) (Months 13–15)
• Step 6: Once debts (except student loans) and emergency fund complete, allocate 25%+ of earnings to retirement investment

(44:34) Caleb:
“A full year. A full year. Your personal loan is gone, Discover it is gone, Quicksilver is gone. And we have a one month emergency fund. That’s nothing. A year of your life. Who gives a s***? You’re 30. Lovely. There’s decades and decades of your life yet left.”

Financial Philosophy Going Forward

• Live Below Means: For 15 months, no “fun” purchases outside what’s covered by the slimmed-down budget.
• Track Everything: No more untraceable ATM/cash app spending; either go full cash envelope or debit card-only tracked through a budgeting app.
• Invest Early: After 15 months, invest at least 25% of income until retirement savings catch up.
• Address Mental Health Concurrently: Continue therapy and medication — this is non-negotiable.
• No Shortcuts: Real improvement only comes through sustained discipline, not quick fixes like debt consolidation.

Final Reflections

• Mikey’s Commitment: Ready to follow the plan strictly and report back in one year and three months.
• Mental Health Reminder: Financial health is inextricably linked to mental health; don’t hesitate to seek help.
• Hammer’s Score:
  • Spending/Budget: 0/10
  • Debt: 1/10
  • Emergency Fund: 1/10
  • Retirement: 2/10
  • Real Estate: 0/10
    Total Hammer Financial Score: 1/10, with optimism for serious improvement next year.

Timestamps for Key Segments

• [00:05] Mikey’s Job & Background
• [03:30] Job Transition, Emergency Fund Lapse
• [08:05] Personal Loan Rationale
• [14:45] Weight Loss and Mental Health Journey
• [17:27] Spending on Credit Cards (Post-Consolidation)
• [18:47] Coin Collecting & eBay Purchases
• [21:43] Watch Purchases
• [24:06] Cryptocurrency-as-Emergency Fund
• [25:09] Heavy App & Dating Subscription Spending
• [26:57] OnlyFans Discussion
• [35:06] Budget Overdraft — Spending > Income Analysis
• [38:50] Building the New Budget
• [44:34] 12-Month Financial Freedom Plan
• [49:00] Importance of Outside Perspective and Therapy
• [51:19] Mental Health Expanded

Tone & Language

• Direct, Candid, Humorous: Hammer’s style is irreverent, at times profane, but always anchored in genuine concern for the guest’s well-being.
• Supportive: Despite tough love, there’s clear motivation for change and compassion, especially around mental health.

For Listeners

If you’re struggling with financial (or mental) health, Mikey’s story is both a cautionary tale and a rallying cry to take control, ask for help, and commit to lasting change.