Financial Audit – "Financial Audit's Most Toxic Couple"

Host: Caleb Hammer
Guests: Katie & Kyle
Date: December 23, 2024

Episode Overview

This episode of Financial Audit with host Caleb Hammer features Katie and Kyle, a young couple from West Texas, who, at age 22, are already deep in financial chaos despite earning relatively strong household income. Caleb dives into their spending patterns, hidden debts, lack of communication, and the ways their immaturity and secrecy around finances—and recurring fights—are threatening their family’s present and future. The conversation is a raw, often jaw-dropping look at what happens when money habits, relationship problems, and avoidance converge.

Key Discussion Points & Insights

1. Background & Household Situation

[00:40–03:00]

• Katie and Kyle are both 22, living in Big Spring, TX, with a three-year-old and another baby due in July.
• Katie works a college internship for $13/hr (~$400/month), studying accounting/business at a community college.
• Kyle works 70–75 hours per week as a field tech ($35/hr). Yearly take-home is ~$101,000.
• Despite this, they are heavily in debt, have minimal savings, and no retirement.

Caleb Hammer [04:09]: "Dude’s killing it, she’s about to graduate…from the outside, an incredible position. But you’re on the show for a reason..."

2. Spending Problems & Lack of Communication

[05:17–14:10]

• Both admit to excessive, impulsive spending:
  • Kyle spends on “trucks, four wheelers, boats, jet skis, anything new,” and snacks/gas station meals ($300–400/month).
  • Katie spends smaller amounts, mostly via gift cards and online shopping (Shein, Amazon).
• Money conversations are dead ends, unresolved, or avoided, with no accountability or follow-up.
• Kyle intentionally keeps spending off shared accounts and avoids financial talks, calling them “nagging.”

Kyle [07:31]: “We talk...cut this out, she needs to cut this out. And we never do. There’s no accountability.”

Hammer [10:23]: “How will a budget work in this household when you try something for two weeks and it’s done—the most basic thing?”

• Katie has tried to establish some structure, even giving Kyle ‘allowances’ he always blows.
• They enable each other’s spending and both admit to lying or hiding purchases.

3. Dangerous Financial Behaviors

[14:08–29:43]

• No retirement savings; both admit to never having started.
• No real financial goals beyond vague ideas of “moving to East Texas” or “getting land.”
• Regularly overspend, make minimum payments, and let credit card debt balloon—with $40+ monthly just in interest.
• Use credit cards as emergency funds.

Kyle [28:10]: “They just keep breaking”—on buying multiple phone chargers a week.

Hammer [28:13]: “What the [expletive] are you doing?”

• Spend recklessly even after drastic life events (recent bereavement, drop in income).
• Both have secret or unmanaged debt and almost no awareness of interest rates, payment schedules, or balances.

4. Debt Load & Types

[29:43–46:40]

• Multiple credit cards nearly maxed out (Discover, Capital One), both hiding balances from each other.
• Large vehicle debt: a $30,000 RAM 1500 at nearly 20% interest, now underwater.
• Ongoing payment for a four-wheeler at 18% interest; equipment/tools owed to a “tool truck.”
• Medical debt in collections, and missed/late payments on several accounts.
• Mortgage (~$130k) at 4%; monthly payment recently jumped to $1400 due to tax/insurance increases.
• Minimal savings ($863 remaining from a peak of $6000, spent on non-emergency house “improvements”).

Caleb [34:12]:
“If one thing were to go wrong—one thing—because of your little pet projects, your family’s done, you’re evicted, you’re foreclosed on.”

5. Unhealthy Relationship Dynamics

[30:05–32:07, 59:06–59:42]

• Katie gives Kyle cash allowances, says he’s “a child.”
• Both habitually hide spending; trust has eroded.
• When forced to rate their financial health—simultaneously—they both shout “1” out of 10.

Katie [30:10]: “Because he is a child and does not know how to control himself and does not understand that finances are not growing on trees.”

Hammer [59:42]: “Your money’s separate. You guys are not together.”

• Both speak in terms of “your money”/“my money,” despite claiming to be united.
• When caught in contradictions or lies, they deflect, bicker, and pass blame.

6. Missed Opportunities & Future Outlook

[46:40–50:03, 83:39–87:21]

• Caleb emphasizes the missed investment potential: With their income, they could be “multi-millionaires” by retirement; instead, they’re on track for long-term struggle.
• Pattern is to finance wants (toys, hobbies)—“addicted” to spending—while essential priorities languish.
• Their overspending, lack of emergency funds, and growing debt mean “one thing” going wrong could upend them.

Hammer [45:13, paraphrased]: “Every year you don’t invest from 22, you’re losing hundreds of thousands in compound interest.”

7. Daily Life Dysfunction & Subscriptions

[69:49–76:56]

• Massive waste on convenience: Gas station food, DoorDash, eating out “literally every day”—no meal prep.
• Multiple streaming/gaming subscriptions they barely use, gym memberships they never attend, over-insured phones/watches.
• Chaotic pet situation: Three dogs, five cats, and a lizard—also unplanned, unmanaged, and unbudgeted.
• Recurring theme: Avoidance, unawareness, laziness ("Laziness" is offered as the reason the fence is not repaired; Katie "could not think" about truck loan details).

Notable Quotes & Memorable Moments

• Caleb [06:09]: “Why are you more important than the child? And toys.”
• Kyle [22:30]: “I make the money and I want to spend it how I want.”
• Caleb [13:55]: “That’s what a child does…You’re 22. You have a second kid coming.”
• Katie [30:10]: “He is a child and does not know how to control himself…”
• Katie [59:42]: “I hadn’t thought about it that way” (when told their finances aren't really combined).
• Caleb [73:44]: “Your kids are gonna struggle to survive and you refuse to cook. Stop being children…That’s not a joke.”
• Caleb [87:13]: “You guys live such a good life…You refuse to actually manage like adults and communicate and talk. So I’m done.”

Timestamps for Key Segments

• Introduction, Meet the Couple: [00:40–03:00]
• First Signs of Dysfunction: [05:17–09:01]
• Admission of Hidden Spending: [10:49–14:10]
• Credit Card/Lending Revelations: [29:43–34:12]
• Truck & Four Wheeler Debt Disclosures: [35:14–46:40]
• Discussion on Missed Investment & Financial Future: [45:13–50:03]
• Household Spending Breakdown: [69:49–73:44]
• Summing Up: Last Warnings & Callouts: [83:39–87:21]

Host’s Final Assessment & Score

• Spending: 0/10 (“You overspend.”)
• Debt: 0/10 (“We have collections.”)
• Emergency Fund: 0/10 (“Nothing.”)
• Retirement: 0/10 (“We drained it.”)
• Real estate: 6/10 (“Okay, but property taxes and equity could be better.”)
• Overall Hammer Financial Score: 1.5 out of 10

Caleb Hammer [87:13]: “You guys live such a good life and you just refuse to actually manage like adults and communicate and talk. So I’m done.”

Closing Thoughts

This is a brutally honest episode with repeated shocking confessions, tension between the couple, and consistent interventions/analogies from Caleb, who is equal parts bewildered, frustrated, and empathetic. The couple’s financial immaturity and avoidance are laid painfully bare—leaving the fate of their family’s future uncertain unless they commit to serious change.

For more actionable tips and breakdowns, visit calebhammer.com or check out Caleb’s classes and YouTube channel for early episode access.