'This is not a joke': 20-year-old Texas woman spends 70% of her income on rent and has racked up $4,000 in credit card debt. She laughs it off as 'girl math.' Caleb Hammer responds

Reckless spending

Rylie’s a part-time student and a full-time receptionist at a local budget hotel. Her monthly income is around $2,000, which could be enough to live on if she didn’t have a budgeting problem.

Rylie spends $1,400 a month — 70% of her income — on rent. That’s above the average rent in San Antonio, which is $1,290 according to RentCafe. In fact, 24% of apartments in the city can be rented for $1,000 or less.

“You cannot afford it,” Hammer explained. General wisdom among finance experts is that housing costs should account for about 30% of a person’s income.

Overspending on housing leaves little room for Rylie’s other expenses. However, that hasn’t stopped her from frequently eating out and shopping online. These expenses are funded from her credit cards. Her credit card debt, at its peak, was around $4,000.

By comparison, Gen Z Americans — aged 18 to 26 — have an average of $3,262 in credit card debt, according to Experian’s latest consumer debt report. This cohort has been borrowing at a faster rate than others. Gen Z’s total debt balance grew 15.4% in 2023.

Younger Americans might also have access to another source of credit: their parents.

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Bank of Mom and Dad

When Rylie’s parents realized her credit card balances were unsustainable, they stepped in and paid most of it off.

Hammer accuses her parents of serving as enablers and an invisible safety net. This isn’t unusual for someone her age. In fact, 61% of Gen Z say they are somewhat dependent on their parents for financial support, according to research from Experian. Around 37% of both Gen Z and millennials say their parents did not teach them about personal finances.

Hammer advises Rylie’s mom, who appeared in-studio but not on-camera, to stop funding her reckless spending and demand behavioral change in return for financial assistance. He suggests Rylie pay off her remaining credit card balance of $1,418 herself to learn how to manage her own finances and be responsible.

He believes she can manage the minimum monthly payments based on her current income.

“You can easily fit that in your budget,” Hammer said. “Then what you're learning, for the first time in your life, is how to sacrifice your finances [and be] an adult.”