A man in $63,000 of debt wasn't paying his taxes and couldn't keep track of his spending when he asked YouTuber Caleb Hammer for help

• A man who appeared on the podcast "Financial Audit" owed over $1,000 to the IRS.
• Host Caleb Hammer told him the IRS "is not someone we fuck with."

A man in $63,000 of debt, who wasn't paying his taxes and couldn't remember half his purchases, appeared on YouTuber Caleb Hammer's budgeting podcast to get help.

Michael, 33 from Richmond, Virginia, told Hammer he was having trouble with discipline and was living outside his means. He'd racked up credit-card debt, had student loans, and owed money to his friend, his parents, and the IRS.

Hammer went through all of Michael's statements to work out what he owed in total. It came to:

• $49,845.41 of student loans, at 4.5% interest, with a minimum monthly payment of $550.
• $1,321 to Verizon for his iPhone and iPad.
• $6,628.76 on his credit card at 18% interest.
• $3,000 to family and friends.
• $3,000 on a personal loan.

Michael said he was a door-to-door salesman for a solar-energy company, and worked solely on commission.

In 2023, Michael's income varied from $630 to $3,220. a month. Before then, he said he had been living off his savings.

Things were looking up, he said, and he had made $9,000 in May. He said he saw himself making $7,000-$10,000 per month from now on, and earn more if things went well.

Overall, he said he would bring in $400 per sale, and he received $175 if a potential customer saw his sales presentation.

"No offence to these people, but who in the world, first, answers their door to a salesman?" Hammer asked. "And two, actually lets them do a presentation?"

"It happens all the time," Michael responded.

Despite his earning potential, Michael said he had a problem with living above his means, and would periodically run up a lot of debt. In December, he thought he would run out of money entirely.

"I hit my breaking point, I'm not doing this again," he said, which was when he decided to reach out to Hammer, who helps people budget their way out of debt on his podcast.

Michael said 2022 had been "chaotic" for him, because he started an online marketing business, which he took out a $4,000 loan for, and spent $1,000 of his own money on.

Michael didn't want to go into details about the company, but he said it might have operated like a multi-level marketing scheme.

"So you joined a pyramid scheme," Hammer said.

"Probably," Michael responded, adding that he gave up on it after about two months.

Michael was still paying off the loan, at $320 per month.

Michael also owed $1,342 of tax to the IRS from last year's earnings, for which he received an extension until September 30. He said he had not yet put aside any money this year to pay his upcoming taxes.

"IRS is not someone we fuck with, Hammer said. "Why have you not cut a check for this?"

Michael explained he owed his roommate about $1,000 and his parents $2,000 and "they come first before the IRS."

Michael said he had cut up all his credit cards, but he admitted he had a spending problem. When Hammer went through his statements, he had trouble remembering what every purchase was.

One of his purchases was tax advice from financial guru Dave Ramsey, which he couldn't remember buying.

"He wouldn't be happy with that," Hammer said.

Michael also spent $742.60 at Best Buy, but he said he couldn't remember what he bought.

"It was a month ago you better know what the fuck this is, $742," Hammer said. "How do you not know what you walked into Best Buy and spent three quarters of a thousand dollars on?"

"It's a lot dude," he said. "And it's all bullshit too, none of it's necessary."

Michael's budget came to around $3,000 per month with all his debt repayments and needs.

He said he would stick to it because he wanted to be free of all credit-card debt by the end of the year.

Hammer said it could take a year and a half to three years, depending on how much Michael cut back, and how well he did in his job.

The problem was a lot of it depended on hypothetical income from Michael's sales.

"I'm getting good and I work hard," Michael said, feeling optimistic that he could make $100,000 this year. "So I'm going to make a pretty good amount of money, I'm fairly confident about that."