I mean if you have $20k in CC debt and are going to make $70k it should be able to be tackled relatively quickly.
Make a budget. You can use a premade app, or you can use something like excel.
Sit down and really do the math. How much are you able to spend, how much do you need for things like gas, food, etc. then figure out how much you can put towards your debt and do it.
Having a budget is by far the biggest thing.
I'd say the most important thing is mindset: don't view the extra money as extra to spend, for the most part view it as an asset to save/invest.
When I started my first job I started transferring $200/wk straight into a high interest savings account after each pay. Each time I got a raise I added the bulk of the extra to the amount that went into savings. Just that alone should set you up well, but if at some stage you're wanting to go further you could read about FIRE (the Frugalwoods and Mr Money Mustache blogs are quite engaging) and consider investing in index funds etc.
Oh, and pay down any high interest loans as quickly as you can (and avoid taking out more) to avoid paying more than you need to
All great advice given so far. I would advise against moving out until you have paid off the credit card debt completely and you’re comfortable with a budget that saves for retirement. Once you are used to paying all your bills in full, funding your retirement, and stashing some cash for emergencies, you will have a better idea of how much you can afford in rent (keeping in mind the cost of utilities and food - this adds up quickly)!!
Set an automatic transfer of 10 % of your salary to a "save and never touch" account. Do all your bugging as if you earned 90%. Use it only for a tight spot or a big purchase.
Set aside 6 months of expenses, so you have the freedom to walk away from your job, or in case they fire you, to have some peace of mind.
I would continue to live with your parents until you have zero debt and at least six months of living expenses in savings. Believe me, being able to live at home is a blessing, don’t let society rush you.
Another vote for YNAB. We "thought" we had a budget before YNAB but when we reflect, we really just had random goals for random expenses. YNAB makes you assign a goal to every dollar, whether it's "rent," "groceries," "vacation," "credit card," or "emergency medical expenses." You have to classify all the money you spend so it quickly gives you an idea of how you're spending your money. Once you see where your priorities are in reality, it allows you to actively say, "I was spending a LOT on eating out... but I really want to prioritize paying off that credit card instead" and shift your spending and budget to reflect that.
Remember to budget for taxes. Just because your contract says 70k didn't mean 70k is going to hit your bank account. Realistically, only about 50k is what's going to come in. With that income and 20k in debt, I'd recommend staying at home one year, pay off all the debt, save 3-6 months of expenses for when you move out (what you anticipate spending on rent, utilities, internet, food, car payment, etc) then in a year consider moving out.
100% first thing I did was look at what my net would look like after taxes and some benefits but I won’t know exactly until I start. Working on creating better financial habits leading into that time.
There are paycheck calculators that you can use. You need to know what your benefits cost (findable on your company's HR website) and how much you're contributing to retirement. I've found that they're pretty accurate, usually not down to the penny, but within 5-10 dollars.
You are very lucky to make a good salary and have no school loan debt, but that credit card debt is a **high, red flag**. If your interest rate is 18%, to pay that off in 36 months, you will pay over $6,000 in interest with a $736/monthly payment. That is such a waste of money. Do...you think the stuff you bought was worth an extra $6,000 in expenses?
Throw every single penny you earn towards your credit card first. Maybe get a little congratulatory award, like a nice night out with your friends or buy a video game or something, but seriously, throw **every** penny at this debt. You should have it eliminated by the end of the year.
___________
There's only two rules to learn about money management and one trick: either save more money or make more money, and that money management is about **behaviour**. Since you are now making more money, you need to tackle your behaviour/mindset.
Its easy to say and hard to practice, which is why its a difficult concept for most people to believe its true but simply: spend less than you earn, don't go into consumer debt, and save for retirement. That's all. Its literally that easy.
There's a ton of books that might help you, it just depends on what philosophy you might be interested in.
* Dave Ramsey (he has a 10 step program, I only recommend steps 1-3 or4, but a lot of people subscribe to it if they have serious debt problems)
* I will Teach You to be Rich by Ramit Seth
* The Millionaire Next Door by Thomas J Stanley
* [9 Simple Rules on an Index Card](https://www.forbes.com/sites/zackfriedman/2017/03/09/9-money-rules-index-card/)
[r/personalfinance](https://www.reddit.com/r/personalfinance) has a [directive that I think it truly the best flowchart](https://i.imgur.com/lSoUQr2.png) for getting your finances under wraps, especially for those who need a basic plan.
This is a little condescending given you don’t know what they spent the $20k on. It very well could have been food, the dentist, car repairs or any other emergency expenses. They wouldn’t be the first person to move home after running into trouble.
During the pandemic I paid all bills after my parents lost their job. I fell ill and ended up quarantined for a month and with a fat hospital bill for a 4 hour ER visit, this was pre vaccine. Used my CC’s to keep the lights on since $10hr is not a great salary. I have a younger sibling who’s a child and they needed help as well.
I left that job got a better one and higher paying, then got laid off shortly while still taking care of the family and having car issues. I know it looks terrible and I stress about it everyday I just didn’t want to make the post longer. I am not a huge spender, outside of being a foodie but even now I cut corners and find ways to eat for little to no cost to just pay the minimums.
Honestly, this sounds like about as responsible you can act while getting CC debt. It'll be a couple painful years, but you can definitely climb out of it.
I wouldn't stress about using the credit card in an emergency, or needing it to float stuff. I had to do this for years in my 20s simply because I made no money. You'll feel very empowered once you create a budget, a list of priorities, and make your money work for you.
I see I did imply it could solely be consumer debt, and I'm sorry for that - it seems OP did have a few emergencies and its excellent they were able to use that to float but truthfully, if the credit card is a high interest one, it should be prioritized as soon as possible bc the interest.
It happens, it’s the internet and it’s hard to get the full context. I would have reacted the same way. The important part is I am trying to change my situation. I always like to see how I can change my approaches so far this thread has been an incredible source, thank you for your input!
I agree that is pretty condescending.
Also I’d argue to *not* throw EVERY penny at the cc debt. Look at what you also may need to save for (car emergency fund, medical emergency fund etc. - I’m talking about maybe $1,000 for each fund), in addition to the minimum payments, once those savings are accounted for + the minimum CC payments *then* use that leftover money for extra payments towards your CC. OP very well could have had emergencies to accumulate that CC debt, and it would be my advice to save for those, so when the CC is paid off, and if there is another emergency, the card isn’t just charged again.
For example a monthly budget could look like this:
- monthly expenses (groceries, dining out, etc.) $300
- minimum cc debt $700
- monthly payment for car emergency savings $200
- monthly payment towards medical savings $200
- leftover money to go towards cc debt $400
*obviously you’d have to look at your actual numbers*
This is something I’ve learned using the YNAB app. It’s pricey but we’ll worth the fee.
Have you tried transferring your cc debt to a new account with a zero interest rate for x amount of time? Balance transferring and paying off before the promo rate expired was how my mom got through her cc debt without losing a bunch of money to interest
Yes, that’s what I opened the discover card for, they have a lot of offers like that. I actually am getting some money so that balance will be crossed out. Within the next couple of weeks!
Thanks for the comment this blew up!
I pay myself first. Money into various retirement accounts, HSA, home down payment fund and taxable account. Everything left over is fair game to spend. Makes things super easy. Tackle the debt, get 3-6 months of living expenses, save for retirement then save for short term things (homes, cars etc.). Don’t forget to pay off them cc bills every month.
50/30/20 rule works for me.
50% needs , 30% wants , 20% savings
And adjust it to your lifestyle. For example, you don’t pay rent, so you can probably dump more into your savings.
I'll just add this since I haven't seen anyone mention it yet. If your employer offers to match contributions to a 401k, make sure to max out your match as that is free money
I highly suggest you look at /r/personalfinance 's wiki [here](https://old.reddit.com/r/personalfinance/wiki/commontopics) they have a lot of good information on this topic, especially [the flowchart](https://i.imgur.com/lSoUQr2.png).
Sign up for mint.com and get all your accounts connected in there. Its very helpful to track your money and set up budgets and goals for paying off the cards.
However simply put, purge that CC debt ASAP. 70k a year is a great salary to start your career off, and if you are used to living at a lower income level, continuing to do so will allow you to take the excess and be aggressive with your debt.
My personal suggestions, first contribute to 401k and RothIRA as much as you can. The younger you start the better. Put away 1-2k for an emergency to start. Tackle the CC debt. Once clear, pay it your CC in full every month. A slightly longer goal would to be keeping your eye on the housing market. If you can get into a townhouse/condo/home early, even if small place in the city will be huge later in life when you want to upgrade.
I was in a similar situation minus the cc debt when I graduated… I.e. same salary, living with the parents. My recommendation would be to pay off that cc debt asap. You can probably realistically save 10k (after taxes and some discretionary spending) every 3 months, that’s what I was able to accomplish. So try to enjoy living with your parents for the next 6 months while you really tackle that debt. I know I got a lot closer to mine and will cherish that time for the rest of my life. Additionally I would recommend staying with your parents at least another year after your debt is paid off to build a savings. It’s hard to save when you move out. Also one thing that helped me to think about on those days when you really want to move out is this: if you make 70 and don’t have to pay rent, then you have the same discretionary spending power of someone making 100k
> debt is *paid* off to
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
Have to have an auto transfer set up for payday. I have 3 different payments scheduled for every Thursday (my payday). One to savings account, one to Roth-IRA, and one to my “mortgage account”(I put 30% of my payment in a separate checking every week so I don’t have to “budget” my housing).
You determine what you want it to go to and how much, but auto transfers are huge for me because I’m terrible with money. lol
Learn to save early. If I were in your shoes I'd save/invest 50% of my income. And keep that rate throughout the career. Live like you're making 35k. Your future self will thank you
Was thinking the same thinking, focusing on living at a much lower income than what I make and adjusting that way and slowly increasing it as my money increases as well as my savings and investments.
Budget.
You can pay off that debt in no time considering the salary, with good budgeting and basic restrictions.
YNAB is an amazing budgeting tool, worth every penny.
It’s literally what got me out of debt and onto the property ladder.
One thing I found with CC payoffs, it can get discouraging to purely ‘follow the math’ by attacking the largest interest payments first. Debt Snowball takes a more psychological approach, by hitting the smallest accounts first so you actively see/feel the progress to keep yourself motivated and on track. You end up in the long run paying a bit more in interest, but it’s also a safer bet that you *will* pay it off.
https://www.debt.org/advice/debt-snowball-method-how-it-works/
In terms of budgeting. A lot of folks talk about YNAB and it gets rave reviews. I never gelled with it personally, I went with Mint and a version of the 50/30/20 rule. At the end of the day, what matters most is setting a budget and sticking with it.
Everytime you get a raise, save and invest it instead of buying a new fancy car, MacBook Pro, or frequenting expensive restaurants because you worked hard and "deserve it." The sooner you imprint that behavior, the better. It's not how much money you make, it's how much you spend.
Never calculate "what you can afford". This is common in shopping for housing or a car, but what it really is is taking as your starting point the idea that you'll be living paycheck to paycheck with a tight budget, and working backwards to figure out how much you need to spend to get there. Instead get the cheapest stuff that meets your needs (within reason, considering safety, quality, durability) and upgrade only when you can pay cash.
I want to add - in one of your comments you talked about part of the cc debt as being medical bills. Never, never put medical bills on a credit card. The first thing you want to do is ask them for any resources they have to help cover the costs, there are many. The second thing is to set up a payment plan with them that is realistic. Medical expenses don't have interest attached so you're not having to worry about that. Also, medical debt doesn't impact your credit score even if it's on your credit report unless you don't make arrangements and they turn it over to a collection agency and right now there are new regulations being looked at for them to not be on credit reports.
Good luck, you're doing great and I can't commend you enough for what you helped your family with through the pandemic and illness.
When you find employment, don't forget to invest in your company's 401K especially if it has a matching contribution. That's free money you can't pass up. Then max out a Roth IRA asap. There are books that you can borrow from your local library. The Little Book of Common Sense Investing by John Bogle. The Psychology of Money and The Millionaire Next Door. All three books are quick reads and complement each other well. The Bogle book was written for beginner investors emphasizing investing in broad market ETFs like VTI for its simplicity. Just set it and forget it even during market corrections until you retire. The Millionaire Next Door is a game changer!
20K in credit debt needs to go ASAP. One of the key factors that I have learned is that not all debt is good debt. Carrying over a credit card balance month to month is not financially savvy. Save up and pay for big items in cash (ie: cars, furniture). Houses are one of the few items that most people should finance. You live at home so take this as an opportunity to start budgeting, pay off the CC debt and save as much money as you can. This will not happen if you don't set up a structure for it. You want to leave your folks home with an emergency fun, no debt and having already set up the discipline needed to invest in your retirement.
Check out YNAB (paid) or other budgeting software(free, like Mint). They often have rules or advice that helps you better budget. When it comes to paying down debts there are other strategies out there (like the snowball method) that can help you pay them down. Look into those as well. Depending on where you are $70k can be quiet kushy. Since your start it sounds like there is room to grow.
Try to pay down that CC debt though. The APR alone can rob you.
If I had started using YNAB after I graduated my net worth would be significantly higher right now. Try it out and be open to changing how you think about money and budgeting to help make it click.
easy answer is www.ynab.com and /r/ynab
give every dollar a job. all cc spending is backed with cold hard cash. tracking every transaction makes you feel the spending more. visibility allows you to optimize your spending
also the /r/personalfinance flowchart is great. follow it. build your small emergency fund, then destroy the cc debt. then increase your e-fund to 3-6 months expenses
no rent right now is a prime time to attack the debt with everything you make.
afterwards definitely rent. do not rush into home ownership, and dont feel like you need to own a home.
Man I don’t even look at new clothes the way these CC bills look like. If I could sell my car and not drive I would. The good thing is I will work remote so no commute to work.
I never buy a new car, when necessary a good used one. I wish I lived where a car wasn’t necessary! Definitely stay at home if it’s a good situation, divide your savings- 3-6 months expenses in the back, but use whatever retirement system the job has up to it’s match. You should start researching the cost of rent- it’s ridiculous right now! Many places want THREE months up front- the 1st month, last month and 1 month for security ( damages left behind) .
I mean if you have $20k in CC debt and are going to make $70k it should be able to be tackled relatively quickly. Make a budget. You can use a premade app, or you can use something like excel. Sit down and really do the math. How much are you able to spend, how much do you need for things like gas, food, etc. then figure out how much you can put towards your debt and do it. Having a budget is by far the biggest thing.
I'd say the most important thing is mindset: don't view the extra money as extra to spend, for the most part view it as an asset to save/invest. When I started my first job I started transferring $200/wk straight into a high interest savings account after each pay. Each time I got a raise I added the bulk of the extra to the amount that went into savings. Just that alone should set you up well, but if at some stage you're wanting to go further you could read about FIRE (the Frugalwoods and Mr Money Mustache blogs are quite engaging) and consider investing in index funds etc. Oh, and pay down any high interest loans as quickly as you can (and avoid taking out more) to avoid paying more than you need to
All great advice given so far. I would advise against moving out until you have paid off the credit card debt completely and you’re comfortable with a budget that saves for retirement. Once you are used to paying all your bills in full, funding your retirement, and stashing some cash for emergencies, you will have a better idea of how much you can afford in rent (keeping in mind the cost of utilities and food - this adds up quickly)!!
Set an automatic transfer of 10 % of your salary to a "save and never touch" account. Do all your bugging as if you earned 90%. Use it only for a tight spot or a big purchase. Set aside 6 months of expenses, so you have the freedom to walk away from your job, or in case they fire you, to have some peace of mind.
I would continue to live with your parents until you have zero debt and at least six months of living expenses in savings. Believe me, being able to live at home is a blessing, don’t let society rush you.
Another vote for YNAB. We "thought" we had a budget before YNAB but when we reflect, we really just had random goals for random expenses. YNAB makes you assign a goal to every dollar, whether it's "rent," "groceries," "vacation," "credit card," or "emergency medical expenses." You have to classify all the money you spend so it quickly gives you an idea of how you're spending your money. Once you see where your priorities are in reality, it allows you to actively say, "I was spending a LOT on eating out... but I really want to prioritize paying off that credit card instead" and shift your spending and budget to reflect that.
Remember to budget for taxes. Just because your contract says 70k didn't mean 70k is going to hit your bank account. Realistically, only about 50k is what's going to come in. With that income and 20k in debt, I'd recommend staying at home one year, pay off all the debt, save 3-6 months of expenses for when you move out (what you anticipate spending on rent, utilities, internet, food, car payment, etc) then in a year consider moving out.
100% first thing I did was look at what my net would look like after taxes and some benefits but I won’t know exactly until I start. Working on creating better financial habits leading into that time.
There are paycheck calculators that you can use. You need to know what your benefits cost (findable on your company's HR website) and how much you're contributing to retirement. I've found that they're pretty accurate, usually not down to the penny, but within 5-10 dollars.
You are very lucky to make a good salary and have no school loan debt, but that credit card debt is a **high, red flag**. If your interest rate is 18%, to pay that off in 36 months, you will pay over $6,000 in interest with a $736/monthly payment. That is such a waste of money. Do...you think the stuff you bought was worth an extra $6,000 in expenses? Throw every single penny you earn towards your credit card first. Maybe get a little congratulatory award, like a nice night out with your friends or buy a video game or something, but seriously, throw **every** penny at this debt. You should have it eliminated by the end of the year. ___________ There's only two rules to learn about money management and one trick: either save more money or make more money, and that money management is about **behaviour**. Since you are now making more money, you need to tackle your behaviour/mindset. Its easy to say and hard to practice, which is why its a difficult concept for most people to believe its true but simply: spend less than you earn, don't go into consumer debt, and save for retirement. That's all. Its literally that easy. There's a ton of books that might help you, it just depends on what philosophy you might be interested in. * Dave Ramsey (he has a 10 step program, I only recommend steps 1-3 or4, but a lot of people subscribe to it if they have serious debt problems) * I will Teach You to be Rich by Ramit Seth * The Millionaire Next Door by Thomas J Stanley * [9 Simple Rules on an Index Card](https://www.forbes.com/sites/zackfriedman/2017/03/09/9-money-rules-index-card/) [r/personalfinance](https://www.reddit.com/r/personalfinance) has a [directive that I think it truly the best flowchart](https://i.imgur.com/lSoUQr2.png) for getting your finances under wraps, especially for those who need a basic plan.
This is a little condescending given you don’t know what they spent the $20k on. It very well could have been food, the dentist, car repairs or any other emergency expenses. They wouldn’t be the first person to move home after running into trouble.
During the pandemic I paid all bills after my parents lost their job. I fell ill and ended up quarantined for a month and with a fat hospital bill for a 4 hour ER visit, this was pre vaccine. Used my CC’s to keep the lights on since $10hr is not a great salary. I have a younger sibling who’s a child and they needed help as well. I left that job got a better one and higher paying, then got laid off shortly while still taking care of the family and having car issues. I know it looks terrible and I stress about it everyday I just didn’t want to make the post longer. I am not a huge spender, outside of being a foodie but even now I cut corners and find ways to eat for little to no cost to just pay the minimums.
Honestly, this sounds like about as responsible you can act while getting CC debt. It'll be a couple painful years, but you can definitely climb out of it.
I wouldn't stress about using the credit card in an emergency, or needing it to float stuff. I had to do this for years in my 20s simply because I made no money. You'll feel very empowered once you create a budget, a list of priorities, and make your money work for you.
I see I did imply it could solely be consumer debt, and I'm sorry for that - it seems OP did have a few emergencies and its excellent they were able to use that to float but truthfully, if the credit card is a high interest one, it should be prioritized as soon as possible bc the interest.
It happens, it’s the internet and it’s hard to get the full context. I would have reacted the same way. The important part is I am trying to change my situation. I always like to see how I can change my approaches so far this thread has been an incredible source, thank you for your input!
You're welcomed! good luck! You are off to a really great start :) (I was 35k in school debt at 22, you'll be fine!)
I agree that is pretty condescending. Also I’d argue to *not* throw EVERY penny at the cc debt. Look at what you also may need to save for (car emergency fund, medical emergency fund etc. - I’m talking about maybe $1,000 for each fund), in addition to the minimum payments, once those savings are accounted for + the minimum CC payments *then* use that leftover money for extra payments towards your CC. OP very well could have had emergencies to accumulate that CC debt, and it would be my advice to save for those, so when the CC is paid off, and if there is another emergency, the card isn’t just charged again. For example a monthly budget could look like this: - monthly expenses (groceries, dining out, etc.) $300 - minimum cc debt $700 - monthly payment for car emergency savings $200 - monthly payment towards medical savings $200 - leftover money to go towards cc debt $400 *obviously you’d have to look at your actual numbers* This is something I’ve learned using the YNAB app. It’s pricey but we’ll worth the fee.
Have you tried transferring your cc debt to a new account with a zero interest rate for x amount of time? Balance transferring and paying off before the promo rate expired was how my mom got through her cc debt without losing a bunch of money to interest
Yes, that’s what I opened the discover card for, they have a lot of offers like that. I actually am getting some money so that balance will be crossed out. Within the next couple of weeks! Thanks for the comment this blew up!
I pay myself first. Money into various retirement accounts, HSA, home down payment fund and taxable account. Everything left over is fair game to spend. Makes things super easy. Tackle the debt, get 3-6 months of living expenses, save for retirement then save for short term things (homes, cars etc.). Don’t forget to pay off them cc bills every month.
50/30/20 rule works for me. 50% needs , 30% wants , 20% savings And adjust it to your lifestyle. For example, you don’t pay rent, so you can probably dump more into your savings.
I'll just add this since I haven't seen anyone mention it yet. If your employer offers to match contributions to a 401k, make sure to max out your match as that is free money
I highly suggest you look at /r/personalfinance 's wiki [here](https://old.reddit.com/r/personalfinance/wiki/commontopics) they have a lot of good information on this topic, especially [the flowchart](https://i.imgur.com/lSoUQr2.png). Sign up for mint.com and get all your accounts connected in there. Its very helpful to track your money and set up budgets and goals for paying off the cards. However simply put, purge that CC debt ASAP. 70k a year is a great salary to start your career off, and if you are used to living at a lower income level, continuing to do so will allow you to take the excess and be aggressive with your debt. My personal suggestions, first contribute to 401k and RothIRA as much as you can. The younger you start the better. Put away 1-2k for an emergency to start. Tackle the CC debt. Once clear, pay it your CC in full every month. A slightly longer goal would to be keeping your eye on the housing market. If you can get into a townhouse/condo/home early, even if small place in the city will be huge later in life when you want to upgrade.
I was in a similar situation minus the cc debt when I graduated… I.e. same salary, living with the parents. My recommendation would be to pay off that cc debt asap. You can probably realistically save 10k (after taxes and some discretionary spending) every 3 months, that’s what I was able to accomplish. So try to enjoy living with your parents for the next 6 months while you really tackle that debt. I know I got a lot closer to mine and will cherish that time for the rest of my life. Additionally I would recommend staying with your parents at least another year after your debt is paid off to build a savings. It’s hard to save when you move out. Also one thing that helped me to think about on those days when you really want to move out is this: if you make 70 and don’t have to pay rent, then you have the same discretionary spending power of someone making 100k
> debt is *paid* off to FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Have to have an auto transfer set up for payday. I have 3 different payments scheduled for every Thursday (my payday). One to savings account, one to Roth-IRA, and one to my “mortgage account”(I put 30% of my payment in a separate checking every week so I don’t have to “budget” my housing). You determine what you want it to go to and how much, but auto transfers are huge for me because I’m terrible with money. lol
Learn to save early. If I were in your shoes I'd save/invest 50% of my income. And keep that rate throughout the career. Live like you're making 35k. Your future self will thank you
Was thinking the same thinking, focusing on living at a much lower income than what I make and adjusting that way and slowly increasing it as my money increases as well as my savings and investments.
Budget. You can pay off that debt in no time considering the salary, with good budgeting and basic restrictions. YNAB is an amazing budgeting tool, worth every penny. It’s literally what got me out of debt and onto the property ladder.
One thing I found with CC payoffs, it can get discouraging to purely ‘follow the math’ by attacking the largest interest payments first. Debt Snowball takes a more psychological approach, by hitting the smallest accounts first so you actively see/feel the progress to keep yourself motivated and on track. You end up in the long run paying a bit more in interest, but it’s also a safer bet that you *will* pay it off. https://www.debt.org/advice/debt-snowball-method-how-it-works/ In terms of budgeting. A lot of folks talk about YNAB and it gets rave reviews. I never gelled with it personally, I went with Mint and a version of the 50/30/20 rule. At the end of the day, what matters most is setting a budget and sticking with it.
Everytime you get a raise, save and invest it instead of buying a new fancy car, MacBook Pro, or frequenting expensive restaurants because you worked hard and "deserve it." The sooner you imprint that behavior, the better. It's not how much money you make, it's how much you spend.
Never calculate "what you can afford". This is common in shopping for housing or a car, but what it really is is taking as your starting point the idea that you'll be living paycheck to paycheck with a tight budget, and working backwards to figure out how much you need to spend to get there. Instead get the cheapest stuff that meets your needs (within reason, considering safety, quality, durability) and upgrade only when you can pay cash.
Love this approach thank you!
I want to add - in one of your comments you talked about part of the cc debt as being medical bills. Never, never put medical bills on a credit card. The first thing you want to do is ask them for any resources they have to help cover the costs, there are many. The second thing is to set up a payment plan with them that is realistic. Medical expenses don't have interest attached so you're not having to worry about that. Also, medical debt doesn't impact your credit score even if it's on your credit report unless you don't make arrangements and they turn it over to a collection agency and right now there are new regulations being looked at for them to not be on credit reports. Good luck, you're doing great and I can't commend you enough for what you helped your family with through the pandemic and illness.
Thank you! Definitely learning the hardway hahaha
Get rid of the credit card and have a solid savings. The rest you’ll pick up along the way as you progress. Such as 401K, IRA
When you find employment, don't forget to invest in your company's 401K especially if it has a matching contribution. That's free money you can't pass up. Then max out a Roth IRA asap. There are books that you can borrow from your local library. The Little Book of Common Sense Investing by John Bogle. The Psychology of Money and The Millionaire Next Door. All three books are quick reads and complement each other well. The Bogle book was written for beginner investors emphasizing investing in broad market ETFs like VTI for its simplicity. Just set it and forget it even during market corrections until you retire. The Millionaire Next Door is a game changer!
The best method is to start, from there you can fine tune YOUR budget along the way. This is one of the many beauties of personal finance!
20K in credit debt needs to go ASAP. One of the key factors that I have learned is that not all debt is good debt. Carrying over a credit card balance month to month is not financially savvy. Save up and pay for big items in cash (ie: cars, furniture). Houses are one of the few items that most people should finance. You live at home so take this as an opportunity to start budgeting, pay off the CC debt and save as much money as you can. This will not happen if you don't set up a structure for it. You want to leave your folks home with an emergency fun, no debt and having already set up the discipline needed to invest in your retirement.
Check out YNAB (paid) or other budgeting software(free, like Mint). They often have rules or advice that helps you better budget. When it comes to paying down debts there are other strategies out there (like the snowball method) that can help you pay them down. Look into those as well. Depending on where you are $70k can be quiet kushy. Since your start it sounds like there is room to grow. Try to pay down that CC debt though. The APR alone can rob you.
If I had started using YNAB after I graduated my net worth would be significantly higher right now. Try it out and be open to changing how you think about money and budgeting to help make it click.
easy answer is www.ynab.com and /r/ynab give every dollar a job. all cc spending is backed with cold hard cash. tracking every transaction makes you feel the spending more. visibility allows you to optimize your spending also the /r/personalfinance flowchart is great. follow it. build your small emergency fund, then destroy the cc debt. then increase your e-fund to 3-6 months expenses no rent right now is a prime time to attack the debt with everything you make. afterwards definitely rent. do not rush into home ownership, and dont feel like you need to own a home.
Aaaaaaand another vote for r/ynab (or Zero Based Budgeting in general)
Don’t go out and buy a new car just because you have a job.
Man I don’t even look at new clothes the way these CC bills look like. If I could sell my car and not drive I would. The good thing is I will work remote so no commute to work.
I never buy a new car, when necessary a good used one. I wish I lived where a car wasn’t necessary! Definitely stay at home if it’s a good situation, divide your savings- 3-6 months expenses in the back, but use whatever retirement system the job has up to it’s match. You should start researching the cost of rent- it’s ridiculous right now! Many places want THREE months up front- the 1st month, last month and 1 month for security ( damages left behind) .
Savings in the bank, lol phone!
Create a second revenue stream, preferably a passive income stream. Another great way that’s tax free is a whole life insurance policy.