‘Uncle Sam is my favorite sugar daddy': This Las Vegas stripper makes $10K/month — plus $2K of VA disability. But she owes the IRS $100K and has scary levels of debt. Caleb Hammer responds


‘Uncle Sam is my favorite sugar daddy': This Las Vegas stripper makes $10K/month — plus $2K of VA disability. But she owes the IRS $100K and has scary levels of debt. Caleb Hammer responds

‘Uncle Sam is my favorite sugar daddy’: This Las Vegas stripper makes $10K/month — plus $2K of VA disability. But she owes the IRS $100K and has scary levels of debt. Caleb Hammer responds

To pick an unconventional career, you probably need a wider safety net than most. Earnings can be unpredictable, and taxes can be much more complicated. Unfortunately, many self-employed individuals don’t focus on financial safety and compound their problems with bad decisions and uncontrolled spending.

Thirty-three-year-old Christa finds herself in just that position. On a recent episode of Financial Audit with YouTuber Caleb Hammer, she talked about her struggles with debt, her career as an exotic dancer and her reliance on Veterans Affairs (VA) disability payments every month.

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“Uncle Sam is my favorite sugar daddy,” she told Hammer, while describing her fascinating journey from the Navy to the strip club. Hammer called it “one of the most wild situations I’ve seen, ever.”

Unfortunately, a growing number of Americans are falling into similarly wild situations thanks to a heady combination of current economic conditions, taxes and unreliable income.

Pushed to the edge

The rising cost of living is pushing more people into precarious or stressful employment. According to a recent report by PYMNTs, 23% of consumers have a side gig for supplemental income.

Income from side gigs can be unstable and unpredictable. It’s also much more complicated to deal with during tax season. Gig workers might not know what they owe in taxes throughout the year and are at higher risk of falling behind, according to H&R Block.

Christa’s tax problems stem from this lack of awareness. Her earnings are immensely volatile, fluctuating from just $4,000 to $5,000 a month in the summer to $13,000 in November. She isn’t sure about her tax burden but estimates that she owes $60,000 for a previous tax year and $40,000 for the current tax year, for a total of $100,000 owed to the tax agency.

“I’ve been avoiding them,” she told Hammer. “The accountant or the IRS?” he asked, to which she replied: “Both.”

Fortunately, Christa spent six years in the U.S. Navy, which entitles her to medical coverage and roughly $2,000 a month in disability payments. This would offer her some stability in monthly income, but her bad spending habits have pushed her into more debt.

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Bad spending decisions

Christa’s spending habits have amplified her financial troubles. She got breast enlargement surgery, which she isn’t sure can be written off for tax purposes. She purchased a property in Arizona, which is being refurbished to serve as a short-term rental. Her outstanding balance on this is $60,187.

The home was financed by the seller of the property at a 10% interest rate, although Christa believed the rate was just 5% when she bought the place.

“Did you not look at what you signed up for?” Hammer asked her.

Meanwhile, the renovations on the property were financed by her credit card. She’s very close to her $10,000 credit limit on that card. To make matters worse, Christa decided to apply for a personal loan at 15% interest to mitigate her monthly payments. “I used that to consolidate debt, but I didn’t do a very good job because I still have that [debt],” she said.

That’s just the tip of the debt iceberg — altogether Christa owes $59,085 in consumer debt with $2,103 in monthly payments.

“You’ve dug yourself a hole beyond holes,” Hammer told her.

Many Americans are in a similar position as consumer debt balances keep rising in recent months, according to data published by the New York Federal Reserve Bank. As of the third quarter of 2023, credit card balances were an astonishing $1.08 trillion. With rising interest rates, borrowers like Christa are finding it increasingly difficult to dig themselves out of this growing hole.

But you do have options to get out from under the pile of debt. Christa was on the right track with her instinct to consolidate her debt at a single, lower interest rate. However, you can’t simply take out another loan and hope for the best.

You can get stuck in a churning cycle of debt easily if you don’t also come up with (and follow) a household budget that includes debt repayment. If, like Christa, you’ve been putting off dealing with your financial mess, it might make sense to loop in a qualified financial professional to help get you on track. With a little guidance, you may find no hole is too deep to get yourself out of.

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



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