Presley, a 27-year-old retail manager from Houston, once had something most people her age only dream about: a $60,000 401(k) balance. But in a moment of financial chaos, she cashed out the entire thing.
On a recent “Financial Audit” podcast, Presley admitted to personal finance YouTuber Caleb Hammer that she used the money to pay off debt, buy takeaway and furniture, move apartments, and splurge on K-pop concerts and gifts.
“That $60,000 would have been a million dollars,” Hammer said. “Five hundred thousand dollars in today’s money. After inflation, you lost $1 million.”
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From Retirement Fund To Fast Food
Presley earns around $67,000 a year, bringing home about $4,300 a month after taxes. Despite living in a relatively more affordable metro, she spends far more than she earns. Her daily habits include DoorDash orders, snacks from gas stations, and constant shopping at the mall where she works. In one month, she spent roughly $700 eating out.
She told Hammer she blames stress and convenience for her spending, saying her dog and a sensitive fire alarm make cooking difficult. But Hammer wasn’t buying it. “You got a dog and have a fire alarm,” he mocked her. “Which means we must go DoorDash and get ourselves into debt and pull out and lose a million dollars.”
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Drowning In Debt Again
Even after cashing out her 401(k), Presley quickly found herself buried in debt again. She owes more than $70,000 in total, including over $20,000 on credit cards with interest rates above 25%, a $31,000 car loan on a Subaru Outback that’s worth less than she owes, and about $8,600 in student loans. She’s consolidated her debt multiple times but keeps ending up in the same position.
Presley says she doesn’t like budgeting because it makes her feel restricted. Instead, she spends emotionally and justifies her habits as “deserved” rewards. Recently, she even sold $7,000 in stocks to pay bills and attend another concert.
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Hammer calculated that Presley spends between $5,000 and $7,000 each month while only earning $4,300. Her minimum debt payments alone add up to more than $2,000 monthly.
He warned that if she keeps going like this, she’ll have no choice but to move back home with her parents, a reality she’s already considering.
Hammer urged Presley to make drastic changes: sell her car, shut down her credit cards, and use a debit card to rebuild healthy financial habits. “You have to get rid of the car and you have to move into home and grind for three years and work an extra job as well,” he told her.
He also advised her to sell her $10,000 worth of K-pop merchandise to fund future concerts instead of relying on credit.
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