Wisdom may come with age, but what do you do when you’re young and you could use a dose of it?

For Paris, her shot-in-the-arm came in during a reality check from personal finance YouTuber Caleb Hammer on an episode of his show, Financial Audit.

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The 20-year-old Austin, Texas native, revealed she’s on a slippery slope of overspending and has a “bad habit” of borrowing on credit cards. As she tells Hammer, she likes to “spend, spend, spend” all her income as soon as it hits her account, considers her credit card purchases an “investment” and believes grocery shopping is a “scam.”

Paris may seem like she’s destined for disaster, but Hammer believes there’s hope for her yet — if she plays her cards right.

Where her money is going

Paris, a model and “pageant girl,” recently participated in the Miss Texas pageant. While she didn’t win, she was in the top 17, which she says will be enough to unlock new opportunities and regular modeling gigs.

However, modeling isn’t lucrative enough to sustain her living expenses. It only brings in a “couple hundred bucks a month,” as she tells Hammer. It also costs a lot. Paris explains that there are high standards and several restrictions for outfits in beauty pageants and she had to spend money to buy them. “I’m a pageant girl. I’m a girl that likes to get dressed up and so I spend a lot of money on just upkeep,” she says. “I’m struggling, it’s hard.”

Fortunately, she has a full-time job as a dog kennel technician and earns $20 an hour, or $3,120 a month, pre-tax from it. She also enjoys working at the kennel. “I love my job,” she enthuses.

Meanwhile, her living expenses are also low — just $848 a month in rent and $180 a month in utilities — after splitting costs with a roommate. On paper, she earns enough to sustain her basic living expenses. However, her spending habits are getting in the way of that.

Paris regularly maxes out her two credit cards — each with a $500 limit — on miscellaneous expenses related to her modeling work. She considers these expenses an investment, but wasn’t even aware that the interest rate on one of her cards was 30.49% until Hammer pointed it out. “I didn’t know that interest rate!” she said.

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Gen Z loves to spend

Credit-fueled spending is unfortunately common. Gen Z, people born between 1997 and 2012, have accumulated debt at a faster pace than other generations, according to data published by LendingTree. Between 2021 and 2023, this cohort’s credit card balances grew a whopping 174%.

Paris also has a fast food habit — spending more than a third of her monthly budget on eating out. Hammer recommends grocery shopping and food prepping, but she thinks that’s a “scam” because food isn’t much cheaper in retail stores.

This misconception seems to be spreading rapidly with the rising cost of food in grocery stores. However, calculations by multiple media outlets found that restaurants and take-away food was usually much more expensive than cooking at home. And the data seems to back up this theory. In December, the cost of food at home rose 1.3% year over year, while food away from home rose 5.2% in the same time.

Hammer believes Paris’ indulgence in credit card debt and food spending habits are risking her financial future.

Bad sign for the future

Paris admits her financial skills are mediocre at best — but she does come by it honestly. “I didn’t have many people teaching me, my mom always struggled with finances,” she says. “I just saw ‘Spend, spend, spend, as you get it …’ I’ve kind of just followed the pattern.”

To be fair, she isn’t in crippling debt as her credit card balances are “not a ton of money,” according to Hammer. “But this is just [bad] habit building.”

He wants Paris to change her habits before it’s too late. That involves paying off both credit cards fully, severely restricting eating out, cooking at home, getting a side gig or second job to ramp up income and accumulating an emergency fund of $11,000.

This could rapidly put Paris in a better financial position and equip her with better financial habits for the rest of her life.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.