00:00My name is Amina Wilson. I'm 23 years old. My number one money problem is my student loan.
00:15She's got big goals, big dreams, and a lot of big financial challenges to match.
00:20So the credit card is pretty much maxed out? Yeah, you could say so.
00:24Okay. I have all these categories that I've listed here. We can kind of get a good sense of what your monthly bills are.
00:31Since you're telling me that your credit card is pretty much at its $2,000 limit, then that's telling me, okay, you're probably living a little bit above your means.
00:39So you have to spend less than you earn. The only way you're going to know that is by literally writing down everything, itemizing all of your spending activities.
00:50What would you say you spend per month on clothing? $300. About $300? Okay.
00:55And I get it that you might skip a month, maybe you might do more of the next one or whatever. What else?
00:59Your credit card that you mentioned, you have that $2,000 balance roughly. The minimum payment system is really a trap for you.
01:06It is? Yes. Only because you're going to continue to pay interest over a longer period of time.
01:12And each month that you continue to have a balance, interest is getting charged. So the student loan payments and then the credit card bill, auto insurance, gas.
01:21A lot of people now my age, they buy these expensive cars that they want. However, me, I have a car that's running well. It's just something that I want to be comfortable with.
01:31I would love to set a goal to move out as far as for the new year, about January or February. I would love to live on my own.
01:40How much do you think it would be in terms of apartment rent, utilities, gas, electric?
01:48It would be about $1,000.
01:50About $1,000 a month total. Okay.
01:52You've heard of the concept of paying yourself first, right?
01:55Yes.
01:56You're going to be giving money to the government. You've got to give Uncle Sam his due, right?
01:59You're going to be paying the student loan company. You're going to be paying the credit card company.
02:03You're going to be paying the auto insurance company. What about paying yourself?
02:06As a target, it's a good idea to try to save 10% of your income.
02:11If you can save more, that's great, but at least try to save 10% of your income.
02:16Okay.
02:17So you probably have a negative net worth right now, given the student loan payments and the credit card debts,
02:22and you don't have more than $70,000 in assets. So currently you have a negative net worth, but that's okay.
02:28You're going to build. Every time you push down those student loans, every time you decrease that credit card debt,
02:35even though you're still in the negative, you are actually building net worth.
02:39And the goal is to get you out of the red into the black.
02:42Yeah. Okay.
02:43You are taking home, based on what we've calculated thus far, $2,400 a month.
02:49You're going to save about $450 for the month.
02:54So yeah, that's great. That's terrific. You know, this gives you a lot of flexibility.
02:58I have not asked you to cut back on a single thing. Seriously. I said, I just asked you, what are you spending money on?
03:04I didn't say, Ooh, don't spend $300 a month on clothes. I let you do that.
03:09If you like the idea of saving $450 a month, and if you do it for two months and you see $900 in your savings or checking account,
03:18and then you see $1,350 a month, you're going to say, Oh yeah, I like that. I like that.
03:2430 days from now, I see myself paying off, not maybe my whole credit card. It would be nice. It would be wonderful, but half of it.
03:34And I see myself also saving more money than I have now. And I see myself being stable and budgeted and not only paying off my bills,
03:42but paying a little more than what I owe at the time.
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