Why The Middle Class Stays Poor

[@CalebHammer]

1 of my first 10,000 subscribers will win $1,000, and 5 will each win $100. You will be randomly selected and announced within the first week of hitting 10,000 subscribers!

[@indianamedic5464]

Congrats bro, I love the financial audit series. You’ll hit 10k really soon!

[@CalebHammer]

@@indianamedic5464 Thank you so much :)

[@mehdidarhbar4726]

It's so crazy how fast your fan base is growing! Man I'm so proud of you

[@jdtmolina]

Awesome stuff. Congrats on your success and thank you so much for trying to help the masses out there. May I suggest another type of video: get people who are “the millionaire next door” and show people how they did it. I can volunteer my story if you want :)

[@theaustralianconundrum]

@@CalebHammer Good channel and subscribed from Australia. However your ratio is way off at 5:40 into the video. My 90 year old father was a financial planner from 1967-2000 (retirement). His ratio however was always 40% needs, 10% on wants leaving 50% for savings. Almost anyone can cut back 10% off "needs". Everyone can cut back 10% on wants. This leaves 50% on savings. That's almost doubling your savings. And over 40 years that is a MASSIVE difference. I mean it's huge over an earning lifetime. I'm now 63, male, married 38 years and yet I retired in 2006 with more money than I'd need even if I lived to 100. However. Working start clock was 18 years of age and no vacation or cashing in annual 4 weeks paid annual leave plus 17% leave loading that I let accrue instead and kept working. 18- 47 years earning 7 days a week and saving 60% of total earnings. This equaled 29 years non stop working (and a lot of fun and challenges!) Do the math. And I was not earning 100K a year. I retired aged 47 with 3,450,000 in cash and investments and zero mortgage and NEVER had a credit card in my entire life. My wife mirrored me from 1980-1991 until raising our two sons. We do NOT believe in "child care". Cheers mate.

[@cameronperry8446]

My wife and I recently bought a new car. Cost us about 18k in cash plus a trade in that we had paid off. The finance guy berated us the whole time we were signing the papers. He couldn’t fathom why someone would pay cash for a car. He told us “I strongly believe in never paying cash for a car” and he kept asking us why we would and I had to say multiple times “I don’t want debt.” The dude could not comprehend what I was saying for some reason. We’ve literally gotten to a point where you’re viewed as an idiot for not having debt. It’s mind blowing.

[@armynurseboy]

He wasn't berating you because you don't want debt. He totally get that, whether he will admit to it or not. He was berating you because his dealership makes money off financing (and thus he gets money for getting you to finance with them). By paying cash, you're taking money out of his pocket. I'm with you, I pay cash for things if I can, and/or don't make major purchases unless I have the money in the bank to pay off the credit immediately. In buying a care, I will finance through my own bank, as the interest rates are usually MUCH better.

[@jasono2139]

Depending on the market circumstances, it can be better/safer to take out a loan on a car than pay cash. If you can (which you can't anymore) get a car loan for 3%, you invest your money (that you would have used to pay for the car) and get a 3% to 5% return... You just broke even or made money (not including inflation)... If you include inflation, you could have bought a similar car sooner (which takes off maybe 2% to 3% of the value you would have to pay in the future). Most dealerships though have garbage financing for about 9% or higher... I can't understand why anyone would use a dealership's financing unless they offer incentives to use them.

[@jasono2139]

@@armynurseboy yup, PNC had really good rates for cars only 3 to 4 years old. Anything newer or older had much higher rates.

[@ReticulatingSplines_]

Yup, you cut out his money he would have made off of financing you. They get a cut of that.

[@BIGH2001]

Did he at least try to sell you on all the other garbage you don’t need like a useless aftermarket warrant and the interior cleaning products? Lol

[@RMPalm2000]

The fact of the matter is that most schools aren’t properly educating children on personal finance and that’s a huge problem.

[@CalebHammer]

Gotta be taught junior and senior year!

[@stanhunt8543]

It's by design. Wealthy bankers make money via interest on the labor of uneducated debt slaves. The wealthy lobby for school curriculums that benefit them by creating ignorant adults.

[@davidhoulden5791]

I learned from my parents, my kids learned from me and now we are teaching the grandkids.. Relying on our state controlled education system to teach our kids finances is dreaming. The majority of kids aren't even graduating with good math skills, and certainly not critical thinking, how can they be expected to learn finances.

[@lc360]

​@@davidhoulden5791my parents had zero financial education or skills and so they never had anything to teach me. One hundred percent learning this sort of thing in school would benefit thousands of people who don't have this knowledge.

[@jimmyboy9883]

Our society depends on people not knowing how money works. It depends on people not doing well. It depends on a lot of people not being smart. School is designed to put you in a hierarchy. Could not be more intentional.

[@sphinx1017]

I'm 48. We buy second hand clothes, drive crap cars and cook at home. We have a rental property and work part time. Not being forced to do 40 hour weeks is well worth it.

[@bbk2802]

Some of us prefer to gain skills to increase our income and actually enjoy life while having plenty of time for ourselves. No need to live like a hobo just to have a few more hours to watch tv or go for a walk

[@sphinx1017]

@@bbk2802 I do that too. We don't live like hobos. We just spend on assets that increase in value rather than stuff that halves in value as soon as you buy it. Clothes and cars as an example.

[@Skaggs666]

I’m 36. My wife and I were doing that exact thing. Everything was going great. We had two incomes, our house and two rentals, my truck was paid off and all we had was her SUV which wasn’t horrible. But then it all fell apart. She had a heart attack at 31 years old, diagnosed with CHF and we were down to one income, then Covid hit and both tenants couldn’t pay. Not their fault, but I couldn’t afford the mortgage and had to sell both houses. I left my job and got another one that paid me way more and I am happy I was able to do that. But we’re still climbing out of that hole. About 10k to go. All that to say, life comes at you fast. We had an emergency fund but nothing could have prepared us for that.

[@24frannypack]

@@sphinx1017 I don’t understand why he says you live like a hobo. I thrift a lot of my clothes and have very expensive brands because rich ppl donate them to goodwill lol. Also hate how American view of “living” is consuming/spending more money. You do you, I hope to be in your position one day (am 29), tho the biggest fear is not having insurance

[@powerlifting1012]

​@@bbk2802 the things you own end up owning you. Something to consider

[@jordanliles7256]

I am literally crying as a grad student as you say 28% of your income is the max for rent.

[@oneapratclown]

I always thought around 1/3rd/33% was the "i'm doing good" rule, and since I was 18 I've had to spend around 50%+ of my income for one room in a shared flat.. In the last 4 years I've gotten better jobs and now I managed to make it be only 23%, so I just found a place that's a bit pricier but I live alone, which is 31% of my take-home salary. Moving in tomorrow! My point is, hold on, it can get better!! It took me 12 years but it can. Also, im guessing the 28% rule applies once you have a job after school :v

[@TheBusttheboss]

does not count when you are a student

[@dieglhix]

I am -100% as I got laid off but it was 50% when I was working anyways because of housing crisis. I am worried about the future of middle class and AI and automation. Even if you learn to use it, you will be paid shit if you find a job because people will adapt to it too. Evem PhDs are borderline middle class nowadays.

[@JustinJamesJeep]

The 28% rule only works if we're not in a housing bubble (I'm from Canada....were I'm a MASSIVE bubble)

[@Spazza42]

The relevant part there is you’re a grad student so you have debt from education. Don’t go to college or University and you’ll have no debt outside of being an idiot with money. Education is expensive because it’s circular, it cares about keeping people in education not about educating people.

[@The2Ramseys]

Cant agree more about the car loan. I feel sick thinking about committing 3 years (let alone 5-6 years) of my income for a car. We were committing $650 a month for 2 cars for 5 Years!! We paid them off in 2021 and will NEVER go back.

[@CalebHammer]

UGH same, can't wait to never go back very soon!

[@selflove428]

@@CalebHammer ugh it sucks I will pay my car in full this October 1, 2022 never again

[@WendyOryen]

@@CalebHammer you have car debt?

[@boom3863]

I’ve sold my Harley Davidson to pay off my car finance. Gutted but saving me £250 a month.

[@gardenofroses197]

My biggest regret is buying a car from a dealership. It's the only debt I'm in but it's killing me. I will never make payments on a car again.

[@kylegier]

Couldn’t agree more. When I got my first full time job (making $11/hr) I leased a 40K car. Worst financial decision I could’ve ever made. Years later, income has quadrupled and I haven’t deviated from the lifestyle I had when I was making $11/hr. If anything, I’m more frugal now than I was. Discovered Dave Ramsey and listened to his podcasts daily until my bad debt was paid off. Love your channel. Keep up the good work. Love seeing people get out of debt

[@gorkyd7912]

Dang. My first full-time was $13/hr but I worked buckets of overtime. But I bought my first "new" car for $7k and I still regret it, never mess with dealerships. Screw dealerships.

[@dre32pitt]

let me guess.. VW sign and drive event? lol

[@angelpreciado6743]

@@gorkyd7912 you just had a bad experience that’s all. There’s as many shitty private party sellers as shitty dealerships 🤷‍♂️

[@Black_pearl_adrift]

I gasped reading this comment. Wow!

[@Crazywaffle5150]

What? $11 an hour?!. Bro. I make 60k a year and leasing a car is WAY outside affordable for me.

[@TheKIDmotovlogs]

I'm on a plan of lifestyle reduction since I started watching your videos a few months ago. I've actually cut 15% of my monthly bills since then. It's so exciting seeing my bills drop everytime I find something I can cut or reduce. Thanks for these videos keeping me motivated!

[@getinthespace7715]

Good job! That's awesome. I started tracking all my debt payments in excel and have been watching my cash flow increase every time I paid something off. That was a HUGE motivator for me. Just seeing the proportion of my income that was just servicing debt was a wake up call. I'll be debt free this year. Can't wait. Then I'm making a push to try to save to hit $1 million invested over the next 5-7 years. Not sure how old you are but I highly recommend maxing out a Roth IRA if you are below the income requirements. That tax free money will be HUGE when you retire and the Socialists are probably in power jacking up tax rates.

[@gregheard4181]

I did the exact same thing! Good job! This channel is fantastic

[@jimfarmer7811]

You're correct on cars keeping people poor. I look at a car as a tool to get me from point A to Point B. I always bought cheap sedans except when we had kids at home and I bought a cheap mini-van. Modern cars will easily go 200,000 miles with minimal maintenance cost. I typically drive my cars for more than 200,000 miles. Above all never buy the extended warranty. I saved enough over the years that could afford to buy a new Maverick for cash. Even than I only paid $24,000 for it.

[@CalebHammer]

America's biggest addition! Cars and the debt that comes with them...

[@LLANTALOBOTOMIK]

Paying 24k cash for a new car is def not a flex.

[@salinero04]

Europe here - I have a 10 yrs + old Opel and wouldn't change it for a new one if I do't need to. The parts are cheap, easier maintanance and less apealing to thievs.

[@LaVistasays]

I have to disagree about not buying the warranty... Cars built in the past decade have become substantially more complex, and harder to fix on your own; even one major repair like the transmission, or AC/heat system, or infotainment/digital dash failure can equal the cost of the warranty.

[@jimfarmer7811]

@@LaVistasays I can only use my own experience as a guide. In 40 years of buying new cars I have never had a major issue with any of my vehicles that weren't covered by the original warranty. It would make much more sense to take the money you would spend on the warranty and invest it. You would be money ahead.

[@themusic6808]

Working in finance it reminds me of the time a client in his 30’s making 105,000 annually (roughly 3000 per paycheque bi-weekly) came in to see if he could qualify for a mortgage. About 50% of his paycheque he was blowing on food, drinks, and leisure, over-drafting by the time he got paid next. The other 50% was his rent and just making minimum interest only payments on the credit cards he maxed out and the auto loan he was in arrears on, and he was bouncing automated insurance payments. No savings, no assets, a ton of debt, poor credit. When we came to the conclusion he wasn’t going to qualify because he was outspending his income and debt laden he just stated “shit…you mean I can’t live like a rockstar ?” I’ll never forget that one !

[@gorkyd7912]

Sometimes it takes a guy in a suit to drive home what they've been told by everyone else in their lives over and over.

[@xmarioascendedx6518]

This is me right now I’m trying to change. I make 103,000 and some how I have nothing to show for it. I’m changing my lifestyle 😭

[@peternorthrup6274]

Just paid cash for my new Toyota corolla. I never went to a dealership. I spent 4 hours working 3 dealers against each other. They kept asking me to come in. I said why? So you can lie to me for 2 hours. They delivered it to my home.

[@jasono2139]

@@peternorthrup6274 that's the way to do it!... Or just bring your screaming children in 3 hours before closing and "wait around" "considering" their offer... and let them know 15 minutes before they lock the doors that their "best" offer is still too high! 🤣 As much as dealers screw with customers to get them to sign... Screw with them right back! They don't like it either! 😂

[@lizwilliams2097]

I am German and used to be an exchange student in the US. I find discussions around personal finance in the US highly interesting. People talk more openly about their finances in the US (on the internet at least) and the whole system makes it super hard to be frugal. Especially since people live in such a consumer culture, trying to impress everyone. Also also these three speak for themselves: car loan, credit card debt and student loans. I never had any of these (no car, credit card is automatically taken out of checking account, no student loans bc working through uni plus support from family) so I feel incredibly lucky to be living in Germany.

[@shawn4692]

Actually really depends on each individual so it's the same as Germany. I'm fairly frugal in the US too so I can easily get ahead

[@agonzgonzalez7748]

Not at all, I don’t know one person in America who could go through college without a car and also I knew multiple people in college who refused to go to the hospital when sick due to bills. It’s much easier to stay financially stable in Germany where the system isn’t completely trying to take your dollars. Us Americans have a massive consumption culture that is unlike anywhere in the world.

[@bigmike9433]

@@agonzgonzalez7748 I spend a lot of time in Germany buy horses. The taxes are crazy. I know a guy that has a chiropractor business. The government pays him. He works on horses because the horse people pay cash and he would barely make it if he didn't. The 20% value added tax adds up fast. It's not as great as you think.

[@Kate-xv7hl]

I love this channel, it’s advice for regular people who may not have thousands to invest or who might be working on debt without the intense shaming that DR does. I’m in a ridiculous amount of debt but a lot of that was just keeping myself alive while I was going through cancer, so being told to put my already shortened life on hold for years to pay off debt doesn’t work for me. I love that you tailor your advice to the person. A lot of channels are either very very basic or for people who are working on their second million. These videos have such a good balance, and I looooooove the audits. I’ve been binging all of them, I know this channel is going to blow up soon!

[@CalebHammer]

Thank you so much, Kate, that means a lot!! And I'm very sorry to hear you went through that... are you on the other side of it now?

[@Kate-xv7hl]

@@CalebHammer I am, thank you! My 30s have been a wild ride so far but I’m getting things back together now :)

[@chicnoir29]

I love the audits as well. That’s how you see the real nitty gritty. Good having Caleb calling people out. Glamour had a similar series but people would describe their spending. People would come up with all sorts of justifications for their spending.

[@feliciavale4279]

I like Dave Ramsey better. Nothing against Caleb though, he coo

[@josephliptak3183]

​@@feliciavale4279 Caleb is a bit different than Dave, and crew but very close. I think the younger crowd might lean towards Caleb!! Dave rocks

[@donatelloslappafello1108]

This is good advice here! I used to make good money than i became homeless and it totally rewired my brain. I rebuilt my life and lived like a hermit, saved up a bunch and now have a paid off house and save more now even though i don't make tons of money! Im slightly older and never had it easy im always waiting for the other shoe to drop like im paranoid about losing things. Its hard to explain. Thanks for helping people out Caleb

[@loveandjoy810]

I drove a 10 year old car while I paid off my student loan. Once my student loan was paid off I went out and bought a 2016 Honda Civic. The car note is for 5 years, but I planned to pay it off in 2 years. So far I am on track to have it paid off by the end of this year and drive it until it dies while saving for a new(er) car in 10 or more years. ;) I already started a car replacement fund. I hate debt too.

[@CalebHammer]

Nice!! I'm glad it will be paid of soon :)

[@TVHouseHistorian]

“Car replacement fund.” Love it 👌

[@TheAdultProject1]

You got this!

[@ineedmondayoff]

I was horrible with money until I was about 35. Now I’m a tight wad. I also put money into 401K and man it adds up. The things you teach are truly valuable. Keep up the good work.

[@GibsonUSA87]

This advice is key! Caleb, I’m a physician and the golden rule is that when you are done with residency (training with shit pay), you continue living like a resident until your debt (especially student loans) are paid off. Unfortunately, I see a lot of my colleagues that make $350,000/year and still live paycheck to paycheck because of horrible spending habits.

[@AlexiosLair]

This is insane, they could easily retire in decade if they wouldn't inflate their spending.

[@iGnominee]

I swear, Paycheck to paycheck (p2p) has taken on an entirely new meaning. I refuse to believe 350k of income lives p2p. That probably includes retirement savings or a mortgage payment both of which are wealth building practices. P2p means barely making it by. Or being in a cycle of making enough to cover bills and minimum payments on debts. And not making enough to save money. I’ve seen people make arguments that 100k can live paycheck to paycheck and they include 10% 401k contributions in their calculations. That’s not paycheck to paycheck anymore. So unless these doctor colleagues are managing to piss away 10k a month on non-wealth building things and saving zero for retirement/paying off a mortgage. It can’t possibly be the same situation as people in my life with minimum wage jobs actually living p2p. Ok rant over. P2P comments rub me the wrong way and it’s not you personally it’s your comment which I see so wide spread in finance shorts/youtube content.

[@BunchofHappiness]

Geez… what do they spend their money on?!

[@khalidalali186]

I’m a cardiac surgeon, class of 2015, and I can totally relate. People still don’t get why I drive a 2009 Renault 😂 and that includes fellow doctors of all types.

[@LenKirin]

Nope. $350k/year isn't p2p and it'll never be. Can't change my mind, and if I need to change yours then frankly it's the wrong mindset.

[@stevenpike7857]

I think it's a conspiracy or something, maybe I am in a Matrix. I finally work hard, get a promotion and make 100% more in salary, and then suddenly housing quadruples, and inflation goes up and rent doubles. I just can't get ahead.

[@TheAdultProject1]

Probably the Matrix

[@jonathanwalker3231]

I've been living in an expensive metro area, and while work was completely remote I moved further away to save $200/month on rent. Now that I'm back at the office I had to increase my rent again to nearly the same as what it was before, but I recently got a big raise that has made that less painful. I think to me, it feels like I am experiencing lifestyle inflation, and while I did go out a bit more frequently than I would normally to celebrate my bonus, it wasn't so much that it was massively outside of my normal allowances. However, it scared me back into reining back my expenses and I've also upped my 401K contribution, hoping to make this year the first year that I will max it out. It's been very difficult with how expensive inflation is, but I feel better prepared than I have in a long time financially, and I've always been responsible with money.

[@CalebHammer]

Well said all throughout. What matters most is budgeting so you know if it is happening or not, and you seem like you know what you are doing.

[@j10001]

Congrats on hitting so many milestones and keeping at it!! Well done. The peace of mind you’ll achieve is worth the sacrifice!

[@TuMadre6995]

you are direct and no-nonsense and i love it. wish it hadn't taken me so long to start implementing common-sense financial habits into my life, i could have had way more in savings by now - and way less stress along the way!

[@TheAdultProject1]

You got this!

[@JDL_MobileRepair]

Since watching your audits and videos I’ve sold 1 of 2 cars to build my emergency fund. Relieved my monthly payments of $200 from car insurance, and $150 in gas. Increased OT hours at work and am on a path to knock off $22k within 10months. $10k credit union $5k credit cards $6k personal loans $1k best buy card Thanks for the content. Hope more people take some advice and wake up.

[@davidsensing2664]

I found Dave Ramsey years ago and he changed my life. For my income level, I have a very modest house, car, and actually buy most of my clothes from Goodwill. Just control your money and don't let it control you.

[@jamesgraves9858]

The middle class is driving around on weekdays at 2pm taking perpetual lunch breaks. You get paid sometimes what you deserve. There's a lot of people who DON'T LEAVE the job they do until the punch the clock. They don't waste company time because they can't afford to. Work and money will come to you.

[@judieszydlowski4608]

I definitely struggled with this when I was younger. And my late husband and I once had a $800 payment on a conversion van we bought on impulse thinking we would travel a lot. But now approaching retirement in a few years, NOTHING feels as sweet as having no debt!

[@sp33dmast3r7]

i’m a big car guy. i’ve always went by the rule of purchasing mildly used cars, and continuing to “pay” the loan amount into a separate savings account to then use as a down payment for the next car- reducing the loan length and increasing savings amount- to eventually purchase a car cash only

[@thexsickness]

I'm really enjoying your content. You hit a good mix of informative without that "holier than thou" attitude I feel like a lot of financial advice creators have. You give good advice while also recognizing that sometimes things are just difficult. And the ideas you put forward are things anyone can work toward implementing. A couple idea's that I think would be cool to see you try to cover: How to make it work when your rent unexpectedly increases to well over 30% (imagine a partner moves out part-way through the lease). How to catch up on retirement if you have a late start. Affordable "cheats" that people who are on a tight budget can try to do to help make the hard times more bearable.

[@CalebHammer]

Than you so much :) and yeah!! I get tat for sure, topics for future videos!

[@AegisRick]

I'm trying to figure out why youtube is recommending this to me.

[@jbw53191]

For the past 24 years I have lived in a city where I don't need a car. Best decision ever. Adopting a minimalist lifestyle helps tremendously as well.

[@BornForBBQ]

I’m working on that now, the amount of “stuff” I have and don’t do anything with is disgusting. What has helped immensely is FB marketplace and donating. Suddenly, the clothes I donated and sold have allowed me to save more and feel less stress as the amount of things I have no longer bothers me.

[@Wooden_pillars_]

Listening/watching your channel has really helped me grasp my embarrassingly terrible money habits. Your videos have helped me understand that there is hope for tackling my finances is possible with lifestyle changes. Thank you for the great content!

[@EVERYTYME]

Your channel is low key changed my life! My biggest financial regret was buying a new car when I got a fancy new job. I went from ZERO car payments to over $400 car payments. I've sold that car now but obviously I still have more payments... This channel has changed my life because now I'm doing Doordash to help get rid of all my debt including car payment over time while my job continues to pay the rest of the bills! I've never had a savings in my life and I'm 27

[@mandypdx]

I recently upgraded my home. I went from a condo that would be paid off in a few years, to purchasing a $575k home. I have no regrets tho… I was sick of working from my dining room table and wanted a designated office. I wanted a yard for my dog. I wanted a garage- my life is infinitely better. I moved to a state without income tax, since we are indefinitely working from home (to Washington state). I’m only 20 minutes to Oregon, where there is no sales tax so that is where I do my shopping. Wanting this change, also kicked my butt into overdrive for paying off my student loan that started at $86k (it was only 2.6% interest).

[@rogerdeblock1715]

Excellent use of tax arbitration! Keep track of what you save that way, and put some in a Roth IRA to give a final "FU" to the IRS ❤

[@kaydkaydkayd]

damn i never knew tax laws were so different in the western states … i might have to move out there one day

[@mandypdx]

@@kaydkaydkayd lol. You just need to live/work in a state that doesn’t have income tax, near a border to a state that doesn’t have sales tax. Is Oregon/Washington the only one??

[@marricx]

I hope your channel grows so much, i think it’s great. I rarely like or comment on videos but you’re still small and i want to see you grow. Keep it up

[@CalebHammer]

Thank you so much :) That means the world!!

[@KenyaNot-YT]

Imma be working two jobs starting this Friday with both paying really nicely. I know imma have this problem soon so I appreciate this upload! I have to remember my long term goals and stick to saving my money and not spending it during this time. It’s gonna be difficult but I think I can definitely do it! Thanks Caleb!!! Your the greatest and can’t wait for you to blow up!

[@CalebHammer]

Best of luck! And thank you so much :)

[@pmscalisi]

Second job used to be just for getting extra cash. Now it's a necessity for most. It does keep the unemployment percentages low that's good for the DC talking heads. It's been that way for a while now.

[@stevenpitera8978]

@@pmscalisi and then there are the tech dudes using chatGPT to moonlight as copywriters making x2 their tech salary lol.

[@pmscalisi]

@@stevenpitera8978 what I said! 💯

[@meghanbillingham7747]

I’ve actually just overcome this after a year! Put myself in a hole and finally paid off all my credit and tax debt this week!!! Finally have savings (not much but growing) and have started putting money into retirement again. Australian student load still there but will chip away at that each month too

[@JD-xz1mx]

The middle class is definitionally not poor. What you mean to say is "Why the middle class doesn't become rich".

[@erratic907]

This is great and I agree with this. We are a married couple that live well below our means both working good tech jobs, we just bought a house and are thinking of saving and paying that off early too. I absolutely hate debt.

[@redgreen2453]

28% of monthly hard limit on rent? Oh so minimum wage must be $42,850 a year because I can’t find a studio for under a thousand a month in my city. Thank god for roommates

[@CH-bi8tl]

Yeah lifestyle creep claimed a lot of my friends. I have my paychecks directly deposited into multiple accounts. Account 1 pays my bills; account 2 goes to my investment account; account 3 is my emergency fund. How do I get my spending money..well i consider myself a bill so my savings account transfers a specific amount to me as "fun money". This amount has increased only once in the last 7 years thus avoiding the creep. I don't do much of spending for fun regularly so i save it up and I've been able to take myself on decent vacations. When you don't see the money it's easier.

[@CalebHammer]

Sounds like you're killing it!!

[@CH-bi8tl]

@@CalebHammer thanks! By doing it this way, my home will be paid off at the end of next year! Going to use some of my fun money that month to buy myself a small cake to celebrate.

[@CalebHammer]

@@CH-bi8tl That's INCREDIBLE!!

[@Tom_Bee_]

​@@CH-bi8tl buy yourself a medium sized cake. You've certainly earned it.

[@Mogardie]

I agree with all of this except vacations. When you’re old and retired you might not be able to travel as easily. Now if it’s just upgrading from a 3 star to 5 star room that’s a waste.

[@malaquiasalfaro81]

Having a goal is so important. I was making credit card debt payments but I was also using the credit card mainly cause I had no plans. A road trip was the kickstart for my wife and I to take money for seriously across the board, starting with paying off debt to save money for a road trip. We’re hoping to keep these habits up in the long term

[@winterdotio]

i cannot for the life of me understand how people with a 80k income are struggling

[@KLMarc]

I lost my job during the pandemic. Thankfully I had some side income that kept me afloat. I had just managed to pay off my CC debt before I lost my job. The only thing left was my car payments. When I got a new job I was forced to move to a new city with a much higher cost of living. Bought new furniture and was set about 6k in debt when all was said and done plus the 14k left on my car. I grinded hard until in 16 months I paid off all my debts. Today I have about 20k invested, 6k in savings with an expected buildup to 30k in savings by the end of the year

[@strings1586]

I know a girl who rents her clothes. She doesnt even own the clothes on her body. I cannot understand how some people are so comfortable being on a financial leash.

[@333theeE]

I pulled myself out of generational poverty Dave Ramsey stuff work really well for me but in my opinion the middle class is poor because people have basically no self-control as far as I can tell

[@CalebHammer]

When so many people spend more than they make, they can never get ahead.

[@darkpraxis]

I try not to blame people too much for not having self-control. Billions are spent on psychological marketing to get people to spend their money. It's hard for almost everyone, myself included, to fight against that type of influence and social pressure. The deck is stacked against us all.

[@dcg590]

@@darkpraxis so what? Stop blaming advertisements, it’s your fault if you can’t control yourself

[@treyshaffer]

​@@dcg590 Do you blame smokers for being addicted to nicotine? Maybe you do, but personally I think it's a complicated issue. Instead of blaming people for being 'weak' because billions of dollars of special interests are successfully able to exploit their wants, needs, and fears, I'd rather see this as a cause for sympathy and deeper contemplation on how we respond to our societal environment.

[@badxradxandy]

Dave is based

[@backflipsaresweet]

Staying under 28% of your TAKE HOME PAY for housing is wild. You'd have to make $160K/year to be able to afford a $300k house. Good luck to the people making $50k/year on finding a livable $100k house rn

[@moriah1796]

One thing that came in handy for me when trying to figure out what my after-tax take home pay would be when starting a new job was using free online federal/state income calculators. They're only estimates but it gave me a good idea of what I could actually expect to receive vs what I saw on the offer letter

[@soapbox187]

Good video. All of these are mostly psychological and emotional based spending habits. Circumstantial ones out of your control like house prices, taxes, insurance, gas and food should be seen as sunken costs meaning you will have to pay no matter what. No you do not need to go out to eat. No you do not need to go drinking with your friends at the hot new bar. No you do not need that vacation. No you do not need the new Air Jordans. No you do not need streaming subscriptions. Financial discipline and pleasure seeking do not go hand in hand. Putting everything on credit knowing eventually you will pay it off is not a map to stability. When you realize more than 75%of earths population lives off of the basic necessities of life your hardships are put into perspective. The fallacy of deserving more because you live in a first world country is very real. Live as if you were a poor farmer in Tribeca.

[@homebodybaby6339]

Caleb, could you make a video on investing and how to get started? I always hear it’s something we should do, but it seems really daunting to get into

[@TheCastedone]

Please

[@deanonesense]

Because there are only so many places on the next rung up the ladder and the ones who get to gatekeep that next rung up benefit from having lots of people fighting each other (rather than the gatekeepers) over who gets to move up.

[@srirachaaaa]

Loved this video and style Caleb. Very engaging and informative. My brother said this to me years ago, he said don’t double your lifestyle as your income increases and you’ll be miles ahead. I shop for clothes at Walmart and I am very frugal. That piece of advice made a HUGE difference on my financial future.

[@IntermissionForBunny]

The depressing thing is, you used the analogy of buying star wars figures as a kid, but a lot of your guests and viewers probably spend a ton of money on funko pops unironically

[@TheSandsofFlowingTime]

KZbin randomly recommended me this channel, and the more I watch your videos the more I realise that I'm a lot better at managing my finances than I thought. I'm also apparently very good at saving money, but that also comes down to some of the things I don't have to pay for, like a car (don't have one) or kids (don't have those either), and no student debt either

[@tizzy6]

Any video you post and any shorts I see I promote… Hope more people become aware of the knowledge you instill upon us. Keep it going. The continent you create is great, the ruthless honesty to get people to care as much as you do is awesome

[@gympews6046]

Just found you on tik tok! Loved this video! My wife and I are working on handling our finances better. She recently got a new job after graduating as a cardiovascular sonographer and we pretty much upgraded a lot of materialistic things in our life but we did not focus on investing. Just sent her this video! Love the content!! Subscribed!

[@CalebHammer]

Thank you so much!! I really hope this helps, lifestyle inflation is very real and holds people back! Keep us updated :)

[@Zinger3030]

As my earnings increase I spend less. I spend less because I have more and I want to invest more to make more, a means to an end. I drive a Toyota that I bought cash. Car payments are the number one wealth killer. Regardless of what you have to pay for your pad, DON'T get a car payment. I saved $24k in 2 years by just buying a reliable car. Find a local mobile mechanic. The number 2 wealth killer is a car payment. The number 3 wealth killer is a car payment. Stop doing it. Number 4 wealth killer is diet. Buy food and cook it. Buy and freeze meat with meal planning. Stop eating out. I discovered at one point that I spent $600 a month at restaurants and bars. Learn to cook. Wealth killer number 5 is car payments. Stop.

[@eastsidedirtykid]

I’m just horribly stuck with my private student loans that I’m not even doing what I went to school for and I can’t get out of them. Worse decision of my life.

[@dannymartial7997]

I was forced to buy a new car during the chip shortage. I had just graduated college, and my current car was breaking down. I looked at the used market, and cars with 20k miles on it was going for MORE than the same car straight out the factory. The reason is because dealers had to abide by the MSRP, but only for new cars. So I financed a brand new 2021 Corolla at 0.9% interest, making the payment $350/month. Fortunately, it’s only 4% of my monthly income, but I still wish there wasn’t a chip shortage, or I would’ve gotten a used car

[@tmdsb2655]

Personally I don’t believe in car loans. My parents never took out car loans. It’s always been if you don’t have enough in cash, you can’t afford the car. It surprised me how many people would commit so much of their income per month for a car!

[@Saki630]

lol what kind of loser backwards logic is that? You cant think of one reason anyone would lease or get a car loan in the US?

[@mollysimons895]

Couldn’t agree more my 10k car I got for 5k when it was 3 years old. I’ve had it for 5 years now and haven’t had any issues other than recalls, oil changes and new tires. My moms sedan needed new brakes and tires. She didn’t want to spend $800+ to fix it so she bought a brand new suv. But then didn’t want to drive her new suv around so she kept her sedan to not put miles on the new car. SO SHE HAD TO FIX THE BRAKES AND TIRES ON HER OLD CAR. This is what keep poor people poor the unnecessary spending.

[@Alan-hc6qi]

2010 Toyota Corolla gang, paid in cash, never an issue in 2 yrs I’ve owned it. Will not upgrade unless it breaks down and even then I’ll buy used and keep purchase at 4 figures max

[@CalebHammer]

That's amazing :)

[@docdoctme]

I don’t understand why isn’t the elephant in the room is being addressed. Income has not increased with the inflation. We barely get 5% raise but the cost of housing, healthcare, gas, and food has increased 20-50%. . Corporate greed is strangling us. Yes, there are behaviors we can do to mitigate the effects for the time being, but not to address the other component, is being disingenuous and negligent.

[@roythousand13]

You still have to live below your means! Even if your wages don't increase!

[@jml9550]

@@roythousand13exactly. But most people don’t want to accept that fact.

[@leyvaj91]

I bought a new car after getting my first real job, then that same year I bought a house and ran up my credit card in 2016. In 2021 I decide to change and pay off all my debt. Now I have no debt except for the house and have a strong saving and invest more.

[@CalebHammer]

That's incredible :) inspiration!

[@quadsnipershot]

Just do what I do and live with your parents and never move out because you always have this crippling fear of not being able to afford moving out. See it’s easy

[@virusO1OOOOO1]

This is not for everyone obvi but my wife and I are just getting out of a financial bottle neck and I believe that it is because we worked hard together through those times that we are now so well bonded. Have loved the content Caleb good on you for this content 🙌👏

[@limitlessends]

I like hearing about your personal journey as well. It let's me know that there is still wiggle room and time to get things back on track.

[@jrisbak]

Also don’t feel scared to say no to friends asking to go out and don’t be ashamed when you say you can’t afford to right now , the $80 you would have spent on drinks and food would be better spent on groceries of on a bill

[@garethbaus5471]

I avoided lifestyle inflation by having my income go down over time.

[@AnonYmous-UserNotFound]

Lol that made me chuckle 😂

[@brettdomenick]

Going through this right now! Went from barely making enough to live as a server and student to having almost all my serious debt paid off and having some extra. I’ve been so conflicted as to what I want to spend and save because while I was living before, I was living with a lot of sacrifice and I no longer have to do that. But at the same time I don’t want to let my new income go down the drain as I upgrade parts of my life.

[@can1687]

You could put money Aside for "fun" The you will not feel Bad about it to spend it. Little bit dont hurt. You dooing great ^^

[@j10001]

Congrats on accomplishing so much already!!

[@karenhardie1132]

Very good advice. I enjoy watching your videos. You are right, no one wants to die on the walmart floor. We can all do a better job with our finances.

[@colepost2976]

Love your videos! Currently trying to undo my lifestyle inflation right now!!!

[@CalebHammer]

I hope it works, Cole!! Let us know how it goes.

[@tranger4579]

My wife and I bought a 2007 Hyundai sonata for 1400 bucks from a friend. Car is in rough shape but runs great and has working AC. That cars has taken us on vacation 4 years in row through multiple state lines . We have squeezed every penny out of that car and it's still going strong. Burns oil but it beats the monthly car payment.

[@BrianGivensYtube]

Love your videos Caleb! Recently subscribed. My spending is currently 50% needs, 40% savings, 10% wants. After looking at my budget 2 years ago, my spending has not increased! Looking forward to more videos.

[@DMS20231]

I have little self discipline when it comes to spending so I learned long ago (in my 20s - I’m 50 now) to save off the top of my check. That’s 401(k), a Roth IRA and taxable savings. Once I do that I can literally spend every penny left if I want to and it doesn’t matter. When I was younger the majority of every raise I got went into my 401(k) with only a small portion funding lifestyle upgrades. I’ve now got two paid-off houses, two paid off cars and no other debt. Just the property tax man once a year.

[@tyliec]

Finding the balance between living vs. saving is so hard :[

[@CalebHammer]

I can be :(

[@stephenwilliams9628]

The middle class doesn't want money, they want to CONSUUUUUUUUUME!!

[@kylegantert4568]

Around 30 my income double once I switched careers. I did start spending more on my hobbies and bought some premium products. However I saved more in my life than ever and ended up with a nice nest egg for later. It was then when I realized I will never own a house until I am 50+. Even with all this new wealth I was as good as broke compared to the cost of a new house. I needed to save up 200,000 in order to even consider it and would not reach that goal for a very long time.

[@JulieLaursen1]

When I was poor, I couldn't afford to visit my family members (who all live in Europe or other states) and I missed seeing many of them for at least 1, some two decades before they died. I stopped hanging out with a couple of my friends to stay in and save money, and two of those very close friends have died since. My aunt's family still hates me for not visiting her in her older age when I was making less than 40k a year and living alone in Austin. They made that very known to me during her funeral. This month I'm spending money I don't really have to see a distant relative that I've never met before as I don't have any relatives alive left in the states. I can't say I regret it.

[@heathercox1898]

Bought a big house in the right school district and we were struggling. Then I found Dave. I know lots hate on him, but listening to his channel while painting one day really made us think. We stopped and added up all the car payments we had ever made. That number was a wake up call. Also heard the logic that if you can't save when you are poor then you won't save when you are rich. We decided we were done being so stupid with our money, our future, and our kids futures as well. I don't listen to just one financial type of guru. I listen to them all, we discuss, and then decide what makes sense to us. We may not always make the right choices, but we do so together and in cash.

[@CalebHammer]

Dave is perfect for the average American!

[@heathercox1898]

@@CalebHammer I don't agree with him on alot of things, but his book did change our mindset about money and without that we would never have gotten debt free. Which has given us alot of freedom to have the lifestyle we want.

[@impactfully5714]

Good advice! I am so frugal with my money. I prioritize my basic needs and the rest goes to assets and savings. You don’t make a lot of friends being frugal though 😂😂😂

[@juggling8557]

As a kid we never had money. I studied physics and electronics engineering in college but went through a divorce, etc at 30 and started over. I started making 100k 3.5 years ago (now I make about 130k). I've been paying 1k rent and driving the same junk car from college with no AC. Just in that 3.5 years I saved 65k in 401k, 50k in personal savings, 5k in HSA, and also 20k I used to finally buy a decent car a month ago with cash. I'm saving almost half of my income right now, and still eating organic and having lots of fun. I don't want to retire super early though. While I'm still young I'm going to take a break for a couple years and travel soon. Also if I do buy a house it will be more than 25 percent of my take home income, I don't think there's a way around that, sorry Caleb.

[@juggling8557]

@Thawne1338 the jobs are there in tech. But I started as a low level technician... my first full time job out of college was 10 dollars an hour, no benefits, and I was living with family.

[@brandonwilson5727]

I keep all of my expenses very low. Have no debt and rent is cheap. Only thing that gets me is travel. I spend quite a bit on 2-3 trips a year. To me it’s worth it for the memories. I wanna have those experiences before the wife and I have kids. Still investing roughly 20% of our income.

[@CalebHammer]

I love seeing the 20% invested! Net step, 30% ;)

[@brandonwilson5727]

@@CalebHammer Nah I need to get it to like 70% 😂 I’m 21 and I want to retire early. Probably around 45 years old.

[@dcg590]

You’re making excuses. You won’t be able to retire comfortably. One trip a year is plenty to make memories, having plenty of money to retire without worrying =priceless

[@brandonwilson5727]

@@dcg590 yeah well I’m only 22 so I think I’m fine 😂 once we have a house and kids than obviously the trips will be less frequent. I think in the future when I look back, I’ll be glad I took those trips before life got too hectic. Im still investing 1000$+ a month while also saving up for a house.

[@renardfox328]

@@brandonwilson5727 How much money are you making at 22 years old (or was it 21 years-- you claimed both ages) and with what occupation? How much are you paying for rent? Do you have a trust fund? I'm genuinely curious as to how you are able to invest $1000+/month (=20% of your income) while also saving for a house AND going on 2-3 trips a year at just 22 years old. Things aren't adding up for me.

[@aaronmurad8060]

Thank you for this story. I was literally thinking about doing a lease to own. But you sur just convinced me to make sure I save then buy the car with a really good down-payment.

[@johnjriggsarchery2457]

I've been one of those people that would always have a car payment and trade them in when the warranty was about up, but at least I never cared about luxury cars and always kept my payment between $250 to $300. However, we should only buy cars that can go for 200,000 miles without major issues in case we need to keep them. Avoid turbochargers, Ford EcoBoosts, Kias, Hyundais, Nissans with CVTs, Jeep, just about all European cars; basically anything that isn't a Honda, Toyota, or Subaru.

[@madro5755]

Mazda has left the chat 😔

[@jee6213]

I've heard CVTs are terrible (I just got a Nissan Rogue Sport 2022, where the CVTs are supposed to be new and improved). I also heard that most people don't maintenance them every 30k miles like they should.

[@noobulon4334]

@@jee6213 its hard to tell how much of the cvt hate is because people dont do their mantinence by the book and how much is actual problems, but nissan did have some mechanical issues with their early cvts. Most newer cvts can go way farther than 30k between services nowadays too

[@The_Annoyed_chef]

When you suck at math, budgeting and are a slave for consumerism.

[@josecandanoza8486]

Well I believe most of us go through that whole upgrade scenario at least once in our younger lives. I took on a $700 monthly payment for a brand new Grand Cherokee 20 years ago and justified it because I had just received a $12k per year raise. What a mistake. We tend to talk ourselves into the “want” purchase vs critically thinking about the “need” side. I loathed that $700 payment every month after my new car honeymoon ended. Young people, don’t overspend on transportation just to impress. Cars are not investments (exceptions are classic or very rare cars) and should be used as tools for our daily NEEDS. Take that extra cash you’d spend on a higher car payment and put it in an IRA or your company 401k or even your savings account. Come 45 years old you’ll be happy you did!!

[@CalebHammer]

oooof, $700.... that hurts! I'm glad you were able to turn it around, it sounds like!

[@bigfoot14eee99]

When I was still renting, I lived in a very low cost apartment. Brought a new girlfriend over. First thing out of her mouth was "Oh, I would never live here." Wish granted. A year later, moved in different new girlfriend and we've been together 33 years, 30 on paper. Oh, and by working together, we're millionaires.

[@Realwessharpe]

GET A TOYOTA. OR HONDA. OR MAZDA. OR SUBARU. One of these 4 and take care of it, and you'll have years of reliable transportation. Going from a Nissan to a Jeep is like going from a moldy apple to a moldy orange

[@Acc0rd79]

Paid off my wife's med school loan in Feb of 2020! We took that extra 2k a month and started tossing it on the cars until they were paid off and then rolled it into her van and paid it off. Finally we took all that money and dumped it on the principle of the home! We paid off 20k extra in a single year this way! We would have knocked off another 20k this year but had to start saving that money because we found out she was pregnant and was out of work for 3 months! I used to love new cars or fancy cars but found out I liked older car designs more and loved not owing payments! I haven't bought a new car in years, just did repairs on what I had. I want our home paid off by 45 and not have to sweat another minute on debt after that!

[@douglasbaek4656]

Lifestyle creep is scary for sure. What keeps me in check is always "will I be able to make as much in my next job?" I've nearly tripled my income in the last 4 years, but in the same house, driving the same cars (aggressively paying the last loan) and same lifestyle. Nothing is definite in life and for me the extra income has been to pay down everything I owe so my emergency fund doesn't have to be as huge when the going gets tough. After the car loans are done, planning on hitting the mortgage next. Sure we have a below 3% rate but in my mind there are three things in life you need: food, shelter and transportation. If 2 out of the three is taken care of, then it is much easier to handle issues later on (like job loss).

[@Lady.Luck.]

This is my guideline too. I keep my monthly costs to what I could afford if I had to start over at a new job

[@TheFirstRealChewy]

Lifestyle creep is the #1 problem, #2 is taxes, #3 is spouse, and #4 is kids. Choose your spouse wisely! Remember that you aren't just marrying them, you are marrying their finances.

[@groxen]

Caleb, your message is easily in the top 10 of "must watch" for generations to come

[@johnharbaugh9471]

Found your channel couple weeks ago, I am amazed what I see and hear on "financial audit" it's 2023 and I'm still driving my 2007 Chevy Cobalt, my pick up is newer due to another driver hitting and totaling my other truck. Keep up the honest and truthful reviews and setting the next generation up for financial success and a happy well funded retirement.

[@AnonYmous-UserNotFound]

Lol I’m driving a 1998 Toyota Prado 😂😅

[@jamesjonathan7187]

I gotta watch this video frequently to keep it in my head 🫣

[@veros7106]

When I graduated from B-school, I had an insane amount of student loans. This wasn't intentional or strategic, but as my income grew I refinanced to make my student loan terms shorter with bigger monthly payments so I never had the chance to inflate my lifestyle. Since they're paid off I live on half my take home pay (which I save), which is AFTER I'm already contributing 10% to 401k. Hated that debt while I was in it, but it effectively prevented me from lifestyle inflation for the 10 years to took to pay off!

[@matthewclark4958]

Just got recommended this video by youtube. I guess they realized i watch every single video you upload now! Didnt know you do/did other kinds of videos since ive only really seen the financial audits. This is awesome!

[@jonathanbrutt]

Please do more of these videos as well and make a couple playlists on your channel for education vs financial audits vs whatever else you do.

[@somethingsomething7679]

Love this self improvement video. I'm tired seeing people complaining about debt, keep telling their income isn't enough but at the same time spend a huge amount of money for luxury. Heck, some of them are even prioritizing luxury over need. Great video, thank

[@creepersonspeed5490]

Honestly there is are economic issues, but I'm not going to sit here waiting for someone else to fix my current issues now. I'll do what I can to survive.

[@adairisromero5708]

I just found your TikTok and I love you so much that I came straight here and im bench watching all of your videos

[@CalebHammer]

Wow, thank you so much, Adairis!! That means the world to me!

[@joycewright5386]

I was working full time for 13 years before I made enough to start saving but from then on I never stopped saving and never ever went into debt( except for mortgage).. Not everyone is incapable of delayed gratification.

[@durandus676]

clothing budget? you mean asking fr new pants from relatives for christmas?

[@genericchannel126]

Im glad you told your own experience! We all make mistakes but the important part is LEARNING FROM IT!