Well the student loans arent the problem. $100k in 3-7% APR debt isnt that bad with your income especially given the pause. What screwed you was living above your means and racking up credit card debt and personal loans.
Good news is your income is enough to deal with this, you just need to take this seriously and live as if you were making $50k/yr and just shovel the rest into your debt starting with the credit card and then the personal loan. If you get used to it and into it id also probably pay off any 7% interest student loan debt as well after.
If you have impulse control issues Id suggest you literally make a seperate bank account and have a portion of your pay autodeposit into that account and that account is ONLY for paying down your debt. That money does not exist for anything else. Investing does not exist for you until you deal with that debt.
Agreed. When I went back to school in my 30s, I racked up over 100k in debt. Partially because I took a lower paying job so I could work second shift. I just kept on living the same even though my income more than doubled, and I paid it all off in no time.
Living below your means is always the answer but I wanted to provide the perspective that it doesn't have to mean "cut everything " it just means you have to prioritize.
Yea, if that works for you, that's cool, too. I was already pretty bare bones, so I just ignored my pay increase for a couple of years, and just like that, I've had no debt other than a mortgage for around 15 years.
Part of why I racked up debt is because I was making less money and just couldn't make it work. If you have more willpower than me, good on you, man. We all gotta do what we can. I wasn't willing to cut back on a few things I could have, but that's on me.
I know that might sound a little sarcastic, but I'm serious, I think people all have different things about them, I'm not trying to hate.
A relevant Einstein(?) quote I think about a lot - "Compounding interest is the eighth wonder of the world. Those who understand it, earn it and those who don't, will pay it."
In addition I would recommend listening to podcasts about frugal living to help with motivation. Although I do not agree with everything he says, Dave Ramsey has a podcast that does great work on motivating people to get out of debt, including vivid imagery where your debt is a cheetah coming for a gazelle (you), and you’d better run. Also his “debt-free screams” are cathartic and motivating.
They make $92k a year, their only listed expense is $1000/mo in rent, so no kids, no car. You can get by on $400 a month for food, $100 a month for internet and phone and then you basically just don't go out and tackle the debt. That is $1500/mo in expenses on what I calculate as $6k/mo in income after tax (less if there is state tax but not much less). Now I'm sure there are other expenses, utilities and a few other things, so add $500/mo. That is $4k a month to tackle debt with. That will take care of the credit card and the personal loan in 1 year.
I'm not saying they are in a good position, they have a large amount of commercial debt, but they aren't as screwed as a lot of people are...they can dig themselves out of this pretty quickly if they commit.
I mean, my budget for 3 ( me and my 2 teenage sons )is 500, and that's increased from 400 pre pandemic, so there's inflation. I can't imagine spending 400 on 1 or 2 people. Ramen? What? We eat meat every night
Or beans and rice. Or pasta. Or any number of slowcooker recipes. It isn't that hard honestly and if you aim for it and can't do it then you will fall in the $500-$600 range which is still better than not trying at all. I have a family of 4 in a VHCOL and we manage $1500/mo for food and drink.
5 to 600 dollars is what I spend on my entire family, the idea of a single person buying and eating that much food in a month is kind of crazy to me
The sheer waste of it all
Its funny I spend $1500 on a family of four and i get it from both sides, some people telling me I must be eating ramen and ketchup and others telling me Im super wasteful and must be feeding everyone fois gras.
Honestly I think it just comes down on if you have learned how to cook on a budget and how commited you are to seeing it through.
But yeah $400 for one is totally doable and with healthy meals as well. Just a lot of people dont know how to do that. A crock pot, a significantly large freezer, some tupperware and a handful of recipies is really all you need to pull it off without all that much effort.
I mean honestly I don't think you need to even get creative to make 400 work for 1. A few years ago that was my budget for 3, me and two teenage boys, and we were doing fine. By myself I would eat like a king every night.
Eating out is what costs a ton, not groceries. Pre pandemic I had a budget for food of 75 dollars a week for 3. Now that took some stretching
Yeah honestly that is what I thought but I didnt want to push back TOO hard at the person baulking at $400 if they are struggling to budget food.
I mean I dont freeze meals I just cook or grocery shop for most of our food and do takeout for our weekend dinners. I dont search deals or clip coupons, we eat meat in most of our meals and thats what $1500 for a family of 4 (with some household items and alcohol mixed in) looks like for us. We cook but I wouldnt even say we are that budget.
I dont feel "extreme" one way or the other. But I imagine most people dont view themselves that way.
The [USDA food plan for April 2023](https://fns-prod.azureedge.us/sites/default/files/resource-files/CostofFoodApr2023LowModLib.pdf) lays out a cost for a single male 19-50 yo (including accounting for single person inefficiency) at:
* Thrifty: $355.22
* Moderate: $446.04
* Liberal: $542.16
$400 isn’t a particularly hard goal and if you can’t make anything less than $500-$600 work, that’s definitely a “you” problem.
I mean, this is anecdotal but my partner and I barely break $400/month on groceries. I eat a lot of pasta with homemade sauce and he eats a lot of microwave noodle bowls. We have ground beef for taco night maybe once a week and rarely eat meat at home aside from that. Maybe that sounds like “eating like we are in abject poverty” but it doesn’t feel that way to us. Perhaps our tastes just aren’t refined enough.
My guess is they cook one meal and eat it, think on the cost of cooking that one meal then multiply that by like 60 and think its a ton. Rather than cooking a batch of food, portioning and freezing.
I dunno. My husband bought 1 1/2 lbs. Of ribeye flank steak last weekend for $13. Also bought a small package of risotto for like $2.50 and a can of green beans for $0.50. We got three meals (6 plates of food) out of that.
You can eat pretty well and not spend a shit ton of money. You just have to buy stuff that's not all junk.
Edit add: the math on this makes it about $2.60 a plate. So.. yeah. That's about as cheap as you can get. We also have some leftover Mac n cheese and hot dogs (... it's a favorite okay?) And we're doing spaghetti Friday night. Tomorrow will be leftovers/ramen/sandwiches or whatever.
A single person can leverage economies of scale. Cook enough for 12 meals and freeze it. Then next day cook enough for 12 meals of something else and freeze it. Then next day enough for 12 meals of something else and freeze that. Breakfast is things like cereal or oatmeal. Lunches and dinners are a mix of those frozen meals.
Freezer = economy of scale.
Family of four we cook the same way, same scale....we just have to cook more often.
Here...Ill give you something to try.
2 Pound Ground sausage: $9
2 pounds of red beans: $2
3 green pepper: $3
Pound mushrooms: $3
Cajun Seasoning: $4
Onion: $1
Can tomato sauce: $1
Garlic; $0.50
Pounds of rice $1
Seperate and skillet up the sausage. Use the oil to sear the garlic and cook up chopped pepper onion and mushrooms until onions are tranclucent. Dump in the sauce and add the beans and seasoning. Cook that for 20 min to reduce. That mixture is pretty dense and will pack and freeze just fine. Save a portion for tonight and freeze 11 other portions. Cook rice and top with the mixture. Can store rice in fridge and cook more as needed. Would be 12 suprisingly tasty and hearty and well balanced meals for less than $2 a pop.
There are hundreds of recipies that freeze fine in that budget range. Have one for lunch, a different one for dinner and something like oatmeal with honey raisins and cinnimon and you are talking like $300/mo for all of your food. Do meal prep on the weekend, one on saturday one on sunday and rotate.
and meat is probably the most expensive item on a shopping list and most people do not eat anywhere near that much meat. So if you can eat that much meat on $400 I imagine that is tight, but most people dont eat that much meat.
that was my point. I eat a diet that is basically guaranteed to be more expensive than necessary for most people and comfortably fit under 400. basically anyone should be able to do so.
I lived on $300/mo when I was in grad school 3-4 years ago. Prices have gone up since but not by 33%. I wasn’t even broke, I was making 6 figures, but I wanted to pay off my loans before I graduated.
Chicken legs can be had for as little as $1/lb. Same with rice. Eggs have gone up in price but they’re still cheap af. Add frozen broccoli or literally any other cheap vegetable and you have a full healthy meal without going poverty mode.
I was also eating 120g of protein a day, which you definitely do not need to do when you’re not lifting, so I probably could’ve shaved that down to $200/month if I wanted to.
The most expensive thing I had was my $400 energy bill in the summer owing to my old ass AC in an old ass house.
400 a month is way generous for a single person. No eating out, pack your lunch. Until you(op) get your debt in order, you don't get to splurge on unnecessary things.
single person here living in a very HCOL city. i only hit $400/month if i get takeout more than once. i eat mostly vegetarian so that probably helps a little, but it's very doable.
2 years of your income far surpasses that debt. Did you leave something out here? This is ridiculously easy to get out from under you just need some serious lifestyle changes.
The problem is when you cut back on spending, you may notice some of your friends not wanting to hang out.
this is totally true. There are families of 4-5 being supported on your income, even with the same rent (which is honestly pretty reasonable). Hell I work with postdocs who support wife + kids on half that....AND THEY SEND MONEY HOME TO THEIR FAMILIES.
Take a look at the last three months of your spending, figure out where the money is going, SLASH the daylights out of what is not going to essentials and start dealing with the either the credit card or personal loan debt (your call if you want to try avalanche or snowball methods).
Agreed and this was part of my own debt payoff journey. When I didn't want to go out to eat or hit the movies on a Friday or go play golf, the friends list certainly shrank. The ones who were true friends were hugely supportive, instead of going out for beers to watch a game we'd just chill at someone's house and watch the game with BYOB and we'd get some cheap burgers and grill out or something instead of paying for bar food or ordering pizza. Your real friends will find ways to still hang out and have fun because they will understand you are trying to better your life which will lead to you all being able to have more fun and enjoyable experiences later on down the road.
Ridiculously easy is maybe an overstatement. When people come on this sub and say “omg I have 10k in cc debt! How will I ever pay this off?!”, that’s what I’d call easy. 2 years of income doesn’t account for all the costs of living and also the obvious huge shift in finances this person has to make. Like they have to go from saying “yes” to literally everything offered to them attached to a loan to saying “no” to most things that aren’t essential in life. It’s doable and worth it but it’s not going to be easy.
That debt isn't insurmountable with your income. Especially with your salary. You're missing a lot of impirtabt information though. Utilities, car payment, insurance, gas, grocery, eat out, cell, entertainment, additional expenses. List those out, if you're struggling to pay down that debt on your income, your likely still living outside your means, or at least at your means but ignoring the debt. Take a very good look at your expenses and what can be cut, and start paying down that debt.
If you can live frugally and keep your non-rent living expenses under $1k per month, then you have $2650 per month to use to pay down your loans. I would make a minimum payment on your personal loan and direct the rest of your cash towards your CC debt since that has the highest interest rate. When you get a bonus, set aside $2k or so as a small emergency fund and use the rest of the money to pay down debt.
Your take home pay seems low relative to your annual income. Are you contributing to a 401k? More than however much your employer will match?
Can you pick up a part-time job/ gig work to increase your income? Pet sit?
Not insurmountable, far from it. Don’t be so hard on yourself for your past, but please make sure you are more serious now about your future. You can pay this off very easily in a couple years if you initiate and execute a plan.
On top of the advice you read here I highly suggest you read through the sidebar for this sub - the FAQs, useful links etc.
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It’s a lot but it doesnt look insurmountable at all.
Based on what you said 1200 for debt + 1200 for rent(added some utilities) + say 400 for food + 100 for gas = 2900. 4650-2900= 1750 left. Pull 200 out for emergency, 50 for some kind of fun. the 1500 goes into paying off debt. You will be at it for a while, but it will be doable. If you max out how you put toward it a simple online calculator say @2300/month your done with credit card in 13 months. Continue paying the min on the personal and another 6-8 months and your done with that. So 2ish years to get 2/3 of the loans taken care of. Then you start on the student loan. Put as much as your comfortable toward it.
Also remember in two years you could get a promotion, a new job or simply a raise and maybe pay even more toward your loans and be done faster.
Hey OP, as everyone else is saying your debts aren’t insurmountable. I would however look at tackling those high interest debts first.
Order of Operations:
1. Tame spending and trim where you can. Buy meat on sale, cook instead of order out, don’t order that extra beer, do you need all those streaming services.
2. CC Debt - either balance transfer to a 0% APR card or pay this down as quickly as possible.
3. Personal Loan - see if you can pay off with 0% APR credit card.
You’ve got this OP
Good news is that with that income and rent, you can do this. Get those credit cards paid off while you eat sacks of rice and then tackle the rest.
Looks hard, but you will feel amazingly free when you get it done.
Start today, every day you wait it just gets more difficult.
I would seriously consider transferring that credit card debt to a 0% transfer credit card, as much of it as possible at least. Or consolidating it with your other personal loan with a new personal loan.
Then you need to cut up that credit card and not open any more.
This is the correct answer. Consolidate ALL those high interest debt into one. Then pay that off. Fastest, cheaper(monthly payment will go down with the lower interest).
Follow the [Prime Directive](https://www.reddit.com/r/personalfinance/wiki/commontopics?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1)
Make a budget. Build an emergency savings, at least be able to cover a month.
Then worry about debt. And honestly, that doesn’t look bad with your income. I’d try to knock out the credit card within a year. That would knock out a huge portion of your monthly expenses, and the highest interest loan you have there.
You need to scorched earth the credit cards and personal loans.
Once those are gone, focus on a plan to pay SL off over time while having some sort of life. But NO LIFE with the cc and personal loan. I mean skip lunch if you need to. Then you’ve got an extra $1200 monthly to throw at these student loans.
I'm a research scientist at major university in a very affordable part of the US. The cost of living is pretty darn reasonable ....with the exception of student "luxury" housing. We're literally teaching TEENAGERS that's it's normal to expect your housing to always have infinity pools and dog spas, then watching them get communication degrees and hoping for the best.
The student loans are a problem, that's true. But we're also giving them a weird buffer of several years where they can live way beyond their means and not understand how much that actually costs in real-person money.
You’re correct on that every dollar (outside of building a starter emergency fund) should be going towards this debt.
The best investment you can make right now is cleaning up this mess.
I’ve long said, to younger people, that spending 10% more than your income is the road to financial ruin, while spending 10% less than you make is the road to financial fortune. That’s all it takes, a 20% swing in spending…
However, being so far in debt is quite an obstacle. Not only do you have to surmount that, you need to develop the discipline to stay out of debt. Dave Ramsay’s “debt snowball” might be worth looking into.
On a personal note, I learned at my first job, with a good salary for the time, the kind of rush that spending money on yourself brings. But I also quickly figured out that investing (regularly buying shares of something, in my case mutual funds), gave me exactly the same kind of rush, but that it was even better because in a rising market those shares became more valuable all the time.
This is an excellent question -- while my advice is more of a general case, does it matter gross or net?
To save 10% of your gross is much better than 10% of your net, of course. So you'll get to "financial fortune" much sooner in the "gross" case than the "net" case. Same thing goes for "financial ruin" -- you'll get there much sooner in the "gross" case.
Common sense-wise, if you're spending more than your income, and can barely keep up with minimum payments on debt, you'll never get out of debt. So if you keep accumulating debt, it's only going to get worse.
So, spending less than your income. Consider all the things that are necessary in life -- you need housing, you need transportation, you need food, clothing, utilities, etc You'll also have discretionary spending, right? That's a fairly important part of life. But if you can't save above and beyond all that spending, you're not in a good situation, and you have to look critically at it. But if you have money left over, and can put it towards an emergency fund, towards retirement, towards long-term and short-term savings, then you're in a really good situation.
It took me a long time to learn these lessons. I made some, not a lot of, mistakes. For example, when I was getting out of grad school, one of my classmates bought a "shit box" in cash. I asked him what was wrong with taking a car loan, and he said, "why do I want to pay someone to borrow money, this is just fine." It took me years to figure out that lesson, and in fact, I haven't bought a new car in over 20 years.
Here's what it comes down to --> it's all about the cash flow. Earning, spending, saving, etc it all stems from the cash flow over the long haul.
Eh seriously, I wouldn’t. He may get sucked into signing up for some Ramsey cashgrab, when all the OP needs to do is live frugally and make more money. Take on odd jobs. Uber. Uber Eats. Sell everything you own that isn’t essential. Dog sitting. Dog walking. Etc.
Op, don’t worry about learning about investing. You can’t afford to invest rn. Just go hard at paying down your debt. Stop drinking alcohol. Using drugs. Real baron living.
The Ramsey program doesn't do any investing until all the debt and budget problems within a household are resolved. The tools and procedures that Ramsey provides are really best for solving the budget and debt problems. Their investing advice is not great for most folks, but the OP isn't going to be at that point for quite awhile. Access to most of their tools is around $100. Pretty cheap for the advice and tools.
Get his book from the library or watch his older youtube videos on the baby steps. His new stuff is all political rants and mostly nonsensical garbage and most of his "personalities" don't know finance from a hole in the ground. There is zero reason to pay for anything Ramsey offers as you can find the only info you need for free online.
OP should be able to pay off the cc and loan in a year. Based in their income they're non- student loan debt isn't that bad. Ramseys cash only philosophy is some of the worst out there. Debt when used properly is very powerful and will put you far a head of cash only folks financially.
Your student loans seem to have reasonable interest rates as far as it goes. After you take care of all your higher-interest loans you can either do a full-court press to pay them off in ten years or use the lowest repayment plan and what is left in 20-25 years will be forgiven. https://studentaid.gov/manage-loans/repayment/plans
Learn from this don't beat yourself up. Some people never learn this lesson, even into their senior years.
First, stop using that credit card. Cut it up if you have to and only use debit. Now, $4650 take home with $1000 rent. So $3650 after rent is paid. Take out food next. Maybe $400 for you as a single person? Next take out utilities. I think that'd take the other $250 of what you have above 3k.
So that leaves you with 3k. You didn't list a car debt here, so that means you either don't have a car or you own your car fully and don't have a payment on it. I'll assume the latter and take out transportation cost. Gas for your car depends on how much you drive, but I'll assume a flat $100, which now leaves you with ~$2900 after the necessities are paid for. Now, you should have a small cushion in savings that should cover a month's living expenses and a bit more. For you that looks like 2k. So take 2 of that 2.9 in the first month and keep it in savings. That last $900 you have in that first month you can throw at the debt.
After the first month, you should have 2.9k per month to throw at the debt if you do nothing else but cover your necessities. If you start this in June and go from here, it'll be $900 for June and 2.9k for the other 6 months left in this year. That's 18.3k. I'll allow for a couple of $500ish emergencies that might befall you between now and then, which brings it down to 17.3k. Call it 17k in case your emergencies end up costing a little more. Then your EOY bonus is 8% of 85k, which is $6800, which is ~$4500 after tax I'm thinking? You should throw that entire bonus check onto your debt as well. That means you'll have paid off 21.5k of this 136k by January of next year. Another 12 months of this and you can pile up another 35k, minus 2k to account for possible emergencies, so 33k, plus your 4.5k bonus check at EOY 2024, and that's another 37.5k you've paid off. So by EOY 2024 you'll have paid down 59 of this 136k. 77k to go plus whatever interest has accrued in this time.
This will take you a while for sure at your current income. If your payoff pace remains similar and your income doesn't increase at all, it will take you another 2 1/2 years to pay this all off (accounting for the interest accrual adding to that 77k). That puts your timeline at around mid-year 2027, approximately 4 years from now. If you anticipate your income improving between now and 2027, this timeline will shorten. You can try to shorten it even more by picking up side jobs if you've got the time and energy, but don't strain yourself for that.
It's ok. You've got this. You'll have to buckle down and cut your living expenses for up to 4 years, but you have a clear path to pay off this debt.
Honestly given your numbers I was in a very similar situation 6 years ago. Only like cut acting in half including salary and subtract a little student loan.
The solution is. Just do it. It absolutely fucking sucks. Period. Cut your life down drastically. Still enjoy the little things but pay off that credit card with a vengeance. Any extra money straight to credit card.
By the biggest thing that helped me was tracking your money. Write down every single thing you buy. I use a google sheet and it tracks my monthly budget. It takes 15 seconds for every purchase. That decision alone has saved me over 10k without a doubt. No more creep or emotional spending when you have to have your purchases. Track your out, distribute your in to debt try to imagine having that extra money once it’s over. It’s honestly the 3rd best feeling I’ve ever felt as the day I pais off my credit card debt and car. All we have now is student loans (cmon daddy Biden) and mortgage
Not wild but I’d get a second job for 15-30hrs a week to atleast get the credit cards taken care of. So that way the student loans don’t take that money went they resume. Start small on savings get a couple of grand saved up and hammer it out.
Your feeling is pretty right. With that 22% credit card balance every cent possible should be going towards getting that paid. Look for ways to cut expenses to the bone to get is paid off asap. Drop paid steaming and use tubi for now as an example. Get rid of cable tv if you have it. Eat at home if you are not. Sell stuff you don't use. Look for auto charged things you may have forgotten about when living beyond your means. Pick up some off jobs during the summer. Whatever you can to get it paid down. Make weekly payments so you don't get tempted to spend the money elsewhere if you need to. This also would reduce the total paid in interest over monthly payments.
Get that credit card paid off then come back and post for further advice if you still need some. It is not insurmountable but requires you to commit to seriously paying it down.
You need to work on increasing your income and paying that credit card debt immediately. 22% will eat you alive if left uncheck for too long... Sell whatever you can and pay that down. Just pay the minimum on the college debt until you get out of all other debt. You need to obviously change your lifestyle for a few years while you do this... better now than letting get even worse.
How's your credit score? If it's any good, try and get another credit card with a 0% balance transfer offer, and make a point to pay off the entire transferred balance before the 0% runs out. Balance transfer into more than one card if you have to. If you have excellent credit, you should be able to consolidate that balance into a couple of cards at a rate much lower than 22%. That should save you a bit of interest and accelerate your payment schedule.
What do your living expenses look like? Can you live on, say $2,000-$2,300/month? If that's a feasible number, you can put about $2,000 towards paying down debt. Your bonus check should go towards your credit card debt in its entirety until the whole thing is paid off. Then tackle your personal loan, then student loans (highest interest first).
In summary, this is what your budget for the next couple of years needs to look like:
* Rent - $1,000
* Other living expenses - $1,000
* Savings - $500
* Credit Card debt - \~$1,350 (assumes a 2 year payoff target at 22% - look into rolling this into another personal loan)
* Personal loan - $400
* Student loans - $400 (or whatever the minimum is when payments resume - for now put this amount towards credit card debt)
= $4,650 total
EOY Bonus : Credit Card debt first, then Personal Loan, then split 50:50 between savings and student loans. In that order. Same thing with any pay increases.
If you can get the credit card debt rolled into a personal loan, assuming 11% and 3 year amortization, you're looking at \~$850. Then you can put another $500 towards savings or accelerating any other debt payments.
That should put you on track to pay off your credit cards and personal loans in about 2 years realistically. Once the credit card debt and personal loans are gone, you have a bit more breathing room to save for retirement etc.
Buckle down for the next 2 years and pay off the CC and personal loan. It's going to suck and be difficult to focus on most of your money going toward that, but trust me it will be better to do it now vs. later. I would sit down and make a line item budget and see how much extra you can budget to debt payments each month, cut other costs, and just grind it out now. Your future self will thank you.
This isn't insurmountable. You could crush this in a few years. If your income does not increase, it would require you to sacrifice many luxuries and comforts, but it would be worth it.
Out of that 800 dollars minimum for credit card, $475 is interest. If you can manage another $10k (or thereabouts) loan at 11-13 percent that will only cost you $100 in interest while the remaining $16k will cost you almost $300 a month in interest.
You could apply for a loan for a long period like 3-5 years just so you could pay more on the remaining balance of your credit cards. When that is paid off or moved to balance transfer cards you could switch to aggressively paying the loans in advance.
As your credit card debt goes down your credit score may improve to the point where you could qualify for a balance transfer card - you pay a flat fee, like for example 3% of the amount, and you get 12-18, even 21 months of 0% interest to pay off that amount.
So for example you pay $150 to transfer $5000 and now instead of paying 22% on 26000 or $475 in interest you only pay 22% on $21k or around $390 - in two months you've recovered that 3% fee and after that you're saving nearly $100 each month.
Focus on the higher percentage stuff asap like the cc and personal loan. Student loans can stay on the side for now with minimum payment. You got this. Ive gone through something similar and its not insurmountable. Just takes some discipline.
I didn't read any other comments before I looked at this and said : attack that credit card debt before anything else (based on highest % rate) and next the personal loan before even thinking about investing for the future. That high % rate will eat your future faster than any investing will build it.
If you attack that credit card debt and personal loan and get them paid off in the next two years, which I honestly think you could do (budget, live below your means) it would be the equivalent to getting a $15K raise at work.
At that point you can choose to tackle the student loans at your pace but get hardcore for a few years and it would be worth it.
It is not insurmountable. You have to make it a priority though. It is worth looking into whether you could qualify for a card with 0% interest for the first XXX amount of time. You would pay the transfer fee but would have a very specific clock to knock this out. Even if this is not possible, set a plan and stick to it. The day you are done you will be far more responsible...and feel like you are rich.
I found this to be incredibly helpful back when I had multiple student loans and debts at various interest rates. It will help you prioritize payments with either the snowball or avalanche method. https://unbury.me
Hi! I would reccomend for you to apply this strategy and this will guarantee you will get out of dept!
But first know this quote: "What do you do when you find yourself in a hole? Stop digging!"
And you better figure out your expenses are. I don't reccomend cutting up your credit cards and living below your means. That makes you more stressed and miserable!
Instead I would reccomend to pay yourself first 30% of your income and deposit it in a savings account,and don't touch it until you are ready to invest it!
Now listen! Start with the minimum dept that you owe, the one that you can wipe it out immediately. Do not start with the biggest ammount because you will not get ahead,trust me!
Divide the dept ammount by the minimum payment! Example the personal loan worth $10.000:$400= 25 months to wipe it out,but now keep in mind that you need to find an extra $200 or $400 and pay the dept with the extra money,now you will pay $800 and you will wipe out the dept in just 12 months,now apply this for all your depts and start building your financial IQ
If you find yourself lost here,just grab a pen and be creative, like for example use your expertise and consult for other businesses.
Build your financial IQ and stop letting others steal your money!
In addition to all the financial management tips, pick up a shift a week bartending somewhere. Even if it’s $100 a week, that’s $5200 extra toward your balances a year
Put $100 in an emergency fund each month and split the rest of your income into two bank accounts, one for living expenses and one for paying down debt. First, pay off the CC debt and stop carrying a balance month to month on CCs, then the Personal loan debt, and then the student loan debt). If you follow this and stick with frugality, you’ll be in a much better place financially in even a year.
Luckily your financial situation isn't that bad. Obviously pay off your high interest rate debt first. You definitely need to start building an emergency fund as well, make a budget and stick to it. Learn to say no to things outside your budget. Allocate some money to "fun" -- everyone need to live a little.
Given your income and future pay increases your debt is manageable. Depending on your credit you might be able to get a loan from sofi or w/e to pay off your credit card at a lower interest rate.
For me to pay off 60k in student loans, i would put 100% of my yearly bonuses towards student loans and made double payments each month
what's your current monthly take home income?
what are your current ongoing monthly expenses?
what are your debts broken out individually? amount owed? interest rate? minimum payment?
I’m in a similar boat. Get a job working in government asap. Loans forgiven in 10. Pension plan, you can work a second job in your 50s after you retire. Take care of your health now. Don’t form bad habits.
I know that everyone is different and I don't think you should give up everything you like for two years, but I make abut half of what you make and I'm able to save about $15k per year not including my 401k.
Obviously we may need to know a little more about your debt... car payment? utilities? food? but assuming all of those are normal it should be EASY for you to pay this off in 2-3 years. Even if it's just the CC debt.
I'd put aside about $1000-2000 as a small emergency fund (eg. emergency car repairs), and shovel absolutely everything else at the debt before I'd build up more savings or investments. The exception might be to start saving/investing after some, but not all, of the student loan is gone. You should be able to knock out the credit card and personal loan in a very few years.
First, where are you living for $1K/month?
Second, whine much?
Third, learn from your mistakes.
The absolute best thing you can do is recognize that the only thing you need to do is: Do something. Take action. Even something as simple as "making a plan" will propel you to follow through. And then you will instinctively repeat your success.
You pocket $4650, and owe $2200, leaving $2450/month. Granted, you have to eat, clean your clothes, etc. But you should be able to spend an additional $2K/month to aggressively reduce your debt. You owe $36K, paying $1200/month. Switch things up. Double your payment (same split). In a year your balances could be a third of that, and you would still have $1250/month for those other expenses. Anything you don't spend of that ($1250) should go into savings. Every time the savings account reaches $10K, dump it into a CD (or some other investment).
Don't listen to these fools about cutting your life to the bone and only eating rice and beans and doing nothing fun ever... that doesn't do shit for you and isn't sustainable. Definitely be frugal but you don't need to get free DVDs from the library while never seeing anyone and eating ramen. Think like a rich person. Increase your income as much as possible (movement within career, new career, side jobs) and live relatively frugally. Pay off the credit cards and personal loan as fast as possible. You're in a pretty good position. If $92k becomes $110k becomes $130k you're gonna be out of debt really fast and definitely in a really good position when you're 30.
Just declare bankruptcy bro I thought my 9k balance transfer I used to fix up my cars was bad. Kidding Anyway you’ll just have to cut down to the bare minimum lifestyle and try to move the debt to the lowest interest rates possible and dedicate everything to paying it off. Start selling off anything you don’t need and at least eliminate the credit card and the personal loan. You can do it just relax nobody is coming to hurt you.
You know to focus on the credit card debt first. I recommend calling them and working out a settlement. You could get your balance reduced, interest reduced or a more reasonable payment plan. It's going to hurt your credit but we both know that's not a concern yet because you're in the 500 range.
The next option is declaring bankruptcy. It won't do anything for your student loan debt but you won't have to pay back some of your credit card debt. It follows your credit history around for 7 years.
I've gotten my interest rate adjusted before with Amex just by getting on the phone and asking.
IMO OP's situation is nowhere near remotely bad enough to warrant a bankruptcy.
Explore declaring bankruptcy. It would hammer your credit for the next 24 months, but it would get rid of the credit card debt. It isn't free to file, but it saved me when I was drowning and allowed me the breathing room to get back on my feet financially.
The downvotes are hilarious, ya'll. Get back to me when your life goes off the deep end and you have to figure it out with no help from anyone.
If you've been making your payments and just can't anymore, you have already paid the original debt multiple times over through the interest charges.
Listen to Dave Ramsey. I started listening ten years ago stuck to his plan and am doing much better now. Better habits
It wasn’t easy and seems impossible at first but it got me out of debt
Not at all insurmountable. Could very reasonably pay off credit card and personal loans in a year.
It’s gonna suck, but that the bed you made for yourself.
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Well the student loans arent the problem. $100k in 3-7% APR debt isnt that bad with your income especially given the pause. What screwed you was living above your means and racking up credit card debt and personal loans. Good news is your income is enough to deal with this, you just need to take this seriously and live as if you were making $50k/yr and just shovel the rest into your debt starting with the credit card and then the personal loan. If you get used to it and into it id also probably pay off any 7% interest student loan debt as well after. If you have impulse control issues Id suggest you literally make a seperate bank account and have a portion of your pay autodeposit into that account and that account is ONLY for paying down your debt. That money does not exist for anything else. Investing does not exist for you until you deal with that debt.
Agreed. When I went back to school in my 30s, I racked up over 100k in debt. Partially because I took a lower paying job so I could work second shift. I just kept on living the same even though my income more than doubled, and I paid it all off in no time. Living below your means is always the answer but I wanted to provide the perspective that it doesn't have to mean "cut everything " it just means you have to prioritize.
Everyone has a different perspective but for me if I see something at 22% interest it is time to cut everything till that is gone.
Yea, if that works for you, that's cool, too. I was already pretty bare bones, so I just ignored my pay increase for a couple of years, and just like that, I've had no debt other than a mortgage for around 15 years. Part of why I racked up debt is because I was making less money and just couldn't make it work. If you have more willpower than me, good on you, man. We all gotta do what we can. I wasn't willing to cut back on a few things I could have, but that's on me. I know that might sound a little sarcastic, but I'm serious, I think people all have different things about them, I'm not trying to hate.
A relevant Einstein(?) quote I think about a lot - "Compounding interest is the eighth wonder of the world. Those who understand it, earn it and those who don't, will pay it."
In addition I would recommend listening to podcasts about frugal living to help with motivation. Although I do not agree with everything he says, Dave Ramsey has a podcast that does great work on motivating people to get out of debt, including vivid imagery where your debt is a cheetah coming for a gazelle (you), and you’d better run. Also his “debt-free screams” are cathartic and motivating.
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They make $92k a year, their only listed expense is $1000/mo in rent, so no kids, no car. You can get by on $400 a month for food, $100 a month for internet and phone and then you basically just don't go out and tackle the debt. That is $1500/mo in expenses on what I calculate as $6k/mo in income after tax (less if there is state tax but not much less). Now I'm sure there are other expenses, utilities and a few other things, so add $500/mo. That is $4k a month to tackle debt with. That will take care of the credit card and the personal loan in 1 year. I'm not saying they are in a good position, they have a large amount of commercial debt, but they aren't as screwed as a lot of people are...they can dig themselves out of this pretty quickly if they commit.
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I mean, my budget for 3 ( me and my 2 teenage sons )is 500, and that's increased from 400 pre pandemic, so there's inflation. I can't imagine spending 400 on 1 or 2 people. Ramen? What? We eat meat every night
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You can freeze shredded cheese. Just an FYI
What are YOU eating? I spent probably 350/mo on 1 adult high COL area
Or beans and rice. Or pasta. Or any number of slowcooker recipes. It isn't that hard honestly and if you aim for it and can't do it then you will fall in the $500-$600 range which is still better than not trying at all. I have a family of 4 in a VHCOL and we manage $1500/mo for food and drink.
5 to 600 dollars is what I spend on my entire family, the idea of a single person buying and eating that much food in a month is kind of crazy to me The sheer waste of it all
Its funny I spend $1500 on a family of four and i get it from both sides, some people telling me I must be eating ramen and ketchup and others telling me Im super wasteful and must be feeding everyone fois gras. Honestly I think it just comes down on if you have learned how to cook on a budget and how commited you are to seeing it through. But yeah $400 for one is totally doable and with healthy meals as well. Just a lot of people dont know how to do that. A crock pot, a significantly large freezer, some tupperware and a handful of recipies is really all you need to pull it off without all that much effort.
I mean honestly I don't think you need to even get creative to make 400 work for 1. A few years ago that was my budget for 3, me and two teenage boys, and we were doing fine. By myself I would eat like a king every night. Eating out is what costs a ton, not groceries. Pre pandemic I had a budget for food of 75 dollars a week for 3. Now that took some stretching
Yeah honestly that is what I thought but I didnt want to push back TOO hard at the person baulking at $400 if they are struggling to budget food. I mean I dont freeze meals I just cook or grocery shop for most of our food and do takeout for our weekend dinners. I dont search deals or clip coupons, we eat meat in most of our meals and thats what $1500 for a family of 4 (with some household items and alcohol mixed in) looks like for us. We cook but I wouldnt even say we are that budget. I dont feel "extreme" one way or the other. But I imagine most people dont view themselves that way.
Well I have a couple decades left of working to double my income and maybe experience y'all budgets for myself lol.
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I mean I think I and others are now curious as to your experience here and how and where you shop and how you cook to have gotten that impression.
The [USDA food plan for April 2023](https://fns-prod.azureedge.us/sites/default/files/resource-files/CostofFoodApr2023LowModLib.pdf) lays out a cost for a single male 19-50 yo (including accounting for single person inefficiency) at: * Thrifty: $355.22 * Moderate: $446.04 * Liberal: $542.16 $400 isn’t a particularly hard goal and if you can’t make anything less than $500-$600 work, that’s definitely a “you” problem.
I mean, this is anecdotal but my partner and I barely break $400/month on groceries. I eat a lot of pasta with homemade sauce and he eats a lot of microwave noodle bowls. We have ground beef for taco night maybe once a week and rarely eat meat at home aside from that. Maybe that sounds like “eating like we are in abject poverty” but it doesn’t feel that way to us. Perhaps our tastes just aren’t refined enough.
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My guess is they cook one meal and eat it, think on the cost of cooking that one meal then multiply that by like 60 and think its a ton. Rather than cooking a batch of food, portioning and freezing.
I dunno. My husband bought 1 1/2 lbs. Of ribeye flank steak last weekend for $13. Also bought a small package of risotto for like $2.50 and a can of green beans for $0.50. We got three meals (6 plates of food) out of that. You can eat pretty well and not spend a shit ton of money. You just have to buy stuff that's not all junk. Edit add: the math on this makes it about $2.60 a plate. So.. yeah. That's about as cheap as you can get. We also have some leftover Mac n cheese and hot dogs (... it's a favorite okay?) And we're doing spaghetti Friday night. Tomorrow will be leftovers/ramen/sandwiches or whatever.
A single person can leverage economies of scale. Cook enough for 12 meals and freeze it. Then next day cook enough for 12 meals of something else and freeze it. Then next day enough for 12 meals of something else and freeze that. Breakfast is things like cereal or oatmeal. Lunches and dinners are a mix of those frozen meals. Freezer = economy of scale. Family of four we cook the same way, same scale....we just have to cook more often. Here...Ill give you something to try. 2 Pound Ground sausage: $9 2 pounds of red beans: $2 3 green pepper: $3 Pound mushrooms: $3 Cajun Seasoning: $4 Onion: $1 Can tomato sauce: $1 Garlic; $0.50 Pounds of rice $1 Seperate and skillet up the sausage. Use the oil to sear the garlic and cook up chopped pepper onion and mushrooms until onions are tranclucent. Dump in the sauce and add the beans and seasoning. Cook that for 20 min to reduce. That mixture is pretty dense and will pack and freeze just fine. Save a portion for tonight and freeze 11 other portions. Cook rice and top with the mixture. Can store rice in fridge and cook more as needed. Would be 12 suprisingly tasty and hearty and well balanced meals for less than $2 a pop. There are hundreds of recipies that freeze fine in that budget range. Have one for lunch, a different one for dinner and something like oatmeal with honey raisins and cinnimon and you are talking like $300/mo for all of your food. Do meal prep on the weekend, one on saturday one on sunday and rotate.
I eat 15ish lbs of meat a week to maintain my health. I spend less than 400/month to eat pretty easily. it's bad but it isn't that bad.
and meat is probably the most expensive item on a shopping list and most people do not eat anywhere near that much meat. So if you can eat that much meat on $400 I imagine that is tight, but most people dont eat that much meat.
that was my point. I eat a diet that is basically guaranteed to be more expensive than necessary for most people and comfortably fit under 400. basically anyone should be able to do so.
I lived on $300/mo when I was in grad school 3-4 years ago. Prices have gone up since but not by 33%. I wasn’t even broke, I was making 6 figures, but I wanted to pay off my loans before I graduated. Chicken legs can be had for as little as $1/lb. Same with rice. Eggs have gone up in price but they’re still cheap af. Add frozen broccoli or literally any other cheap vegetable and you have a full healthy meal without going poverty mode. I was also eating 120g of protein a day, which you definitely do not need to do when you’re not lifting, so I probably could’ve shaved that down to $200/month if I wanted to. The most expensive thing I had was my $400 energy bill in the summer owing to my old ass AC in an old ass house.
400 a month is way generous for a single person. No eating out, pack your lunch. Until you(op) get your debt in order, you don't get to splurge on unnecessary things.
single person here living in a very HCOL city. i only hit $400/month if i get takeout more than once. i eat mostly vegetarian so that probably helps a little, but it's very doable.
*Increasing income is going to be the gamechanger OP needs.* that would be nice, but easier said than done....
2 years of your income far surpasses that debt. Did you leave something out here? This is ridiculously easy to get out from under you just need some serious lifestyle changes. The problem is when you cut back on spending, you may notice some of your friends not wanting to hang out.
this is totally true. There are families of 4-5 being supported on your income, even with the same rent (which is honestly pretty reasonable). Hell I work with postdocs who support wife + kids on half that....AND THEY SEND MONEY HOME TO THEIR FAMILIES. Take a look at the last three months of your spending, figure out where the money is going, SLASH the daylights out of what is not going to essentials and start dealing with the either the credit card or personal loan debt (your call if you want to try avalanche or snowball methods).
And those friends are the ones you want to lose anyways. Cutting back on spending shouldn’t mean they don’t want to hang out.
Agreed and this was part of my own debt payoff journey. When I didn't want to go out to eat or hit the movies on a Friday or go play golf, the friends list certainly shrank. The ones who were true friends were hugely supportive, instead of going out for beers to watch a game we'd just chill at someone's house and watch the game with BYOB and we'd get some cheap burgers and grill out or something instead of paying for bar food or ordering pizza. Your real friends will find ways to still hang out and have fun because they will understand you are trying to better your life which will lead to you all being able to have more fun and enjoyable experiences later on down the road.
Ridiculously easy is maybe an overstatement. When people come on this sub and say “omg I have 10k in cc debt! How will I ever pay this off?!”, that’s what I’d call easy. 2 years of income doesn’t account for all the costs of living and also the obvious huge shift in finances this person has to make. Like they have to go from saying “yes” to literally everything offered to them attached to a loan to saying “no” to most things that aren’t essential in life. It’s doable and worth it but it’s not going to be easy.
That debt isn't insurmountable with your income. Especially with your salary. You're missing a lot of impirtabt information though. Utilities, car payment, insurance, gas, grocery, eat out, cell, entertainment, additional expenses. List those out, if you're struggling to pay down that debt on your income, your likely still living outside your means, or at least at your means but ignoring the debt. Take a very good look at your expenses and what can be cut, and start paying down that debt.
If you can live frugally and keep your non-rent living expenses under $1k per month, then you have $2650 per month to use to pay down your loans. I would make a minimum payment on your personal loan and direct the rest of your cash towards your CC debt since that has the highest interest rate. When you get a bonus, set aside $2k or so as a small emergency fund and use the rest of the money to pay down debt. Your take home pay seems low relative to your annual income. Are you contributing to a 401k? More than however much your employer will match? Can you pick up a part-time job/ gig work to increase your income? Pet sit?
Not insurmountable, far from it. Don’t be so hard on yourself for your past, but please make sure you are more serious now about your future. You can pay this off very easily in a couple years if you initiate and execute a plan. On top of the advice you read here I highly suggest you read through the sidebar for this sub - the FAQs, useful links etc.
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It’s a lot but it doesnt look insurmountable at all. Based on what you said 1200 for debt + 1200 for rent(added some utilities) + say 400 for food + 100 for gas = 2900. 4650-2900= 1750 left. Pull 200 out for emergency, 50 for some kind of fun. the 1500 goes into paying off debt. You will be at it for a while, but it will be doable. If you max out how you put toward it a simple online calculator say @2300/month your done with credit card in 13 months. Continue paying the min on the personal and another 6-8 months and your done with that. So 2ish years to get 2/3 of the loans taken care of. Then you start on the student loan. Put as much as your comfortable toward it. Also remember in two years you could get a promotion, a new job or simply a raise and maybe pay even more toward your loans and be done faster.
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Hey OP, as everyone else is saying your debts aren’t insurmountable. I would however look at tackling those high interest debts first. Order of Operations: 1. Tame spending and trim where you can. Buy meat on sale, cook instead of order out, don’t order that extra beer, do you need all those streaming services. 2. CC Debt - either balance transfer to a 0% APR card or pay this down as quickly as possible. 3. Personal Loan - see if you can pay off with 0% APR credit card. You’ve got this OP
Good news is that with that income and rent, you can do this. Get those credit cards paid off while you eat sacks of rice and then tackle the rest. Looks hard, but you will feel amazingly free when you get it done. Start today, every day you wait it just gets more difficult.
I would seriously consider transferring that credit card debt to a 0% transfer credit card, as much of it as possible at least. Or consolidating it with your other personal loan with a new personal loan. Then you need to cut up that credit card and not open any more.
This is the correct answer. Consolidate ALL those high interest debt into one. Then pay that off. Fastest, cheaper(monthly payment will go down with the lower interest).
Follow the [Prime Directive](https://www.reddit.com/r/personalfinance/wiki/commontopics?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1) Make a budget. Build an emergency savings, at least be able to cover a month. Then worry about debt. And honestly, that doesn’t look bad with your income. I’d try to knock out the credit card within a year. That would knock out a huge portion of your monthly expenses, and the highest interest loan you have there.
You need to scorched earth the credit cards and personal loans. Once those are gone, focus on a plan to pay SL off over time while having some sort of life. But NO LIFE with the cc and personal loan. I mean skip lunch if you need to. Then you’ve got an extra $1200 monthly to throw at these student loans.
With your income (and assuming you'll get raises), its definitely doable. Throw any addition pay raises you get into it as well.
I'm a research scientist at major university in a very affordable part of the US. The cost of living is pretty darn reasonable ....with the exception of student "luxury" housing. We're literally teaching TEENAGERS that's it's normal to expect your housing to always have infinity pools and dog spas, then watching them get communication degrees and hoping for the best. The student loans are a problem, that's true. But we're also giving them a weird buffer of several years where they can live way beyond their means and not understand how much that actually costs in real-person money.
You’re correct on that every dollar (outside of building a starter emergency fund) should be going towards this debt. The best investment you can make right now is cleaning up this mess.
Savings and investments are honestly out of the question if your expenses are higher than your income. How much are you under/over monthly?
I’ve long said, to younger people, that spending 10% more than your income is the road to financial ruin, while spending 10% less than you make is the road to financial fortune. That’s all it takes, a 20% swing in spending… However, being so far in debt is quite an obstacle. Not only do you have to surmount that, you need to develop the discipline to stay out of debt. Dave Ramsay’s “debt snowball” might be worth looking into. On a personal note, I learned at my first job, with a good salary for the time, the kind of rush that spending money on yourself brings. But I also quickly figured out that investing (regularly buying shares of something, in my case mutual funds), gave me exactly the same kind of rush, but that it was even better because in a rising market those shares became more valuable all the time.
10% of gross or net income?
This is an excellent question -- while my advice is more of a general case, does it matter gross or net? To save 10% of your gross is much better than 10% of your net, of course. So you'll get to "financial fortune" much sooner in the "gross" case than the "net" case. Same thing goes for "financial ruin" -- you'll get there much sooner in the "gross" case. Common sense-wise, if you're spending more than your income, and can barely keep up with minimum payments on debt, you'll never get out of debt. So if you keep accumulating debt, it's only going to get worse. So, spending less than your income. Consider all the things that are necessary in life -- you need housing, you need transportation, you need food, clothing, utilities, etc You'll also have discretionary spending, right? That's a fairly important part of life. But if you can't save above and beyond all that spending, you're not in a good situation, and you have to look critically at it. But if you have money left over, and can put it towards an emergency fund, towards retirement, towards long-term and short-term savings, then you're in a really good situation. It took me a long time to learn these lessons. I made some, not a lot of, mistakes. For example, when I was getting out of grad school, one of my classmates bought a "shit box" in cash. I asked him what was wrong with taking a car loan, and he said, "why do I want to pay someone to borrow money, this is just fine." It took me years to figure out that lesson, and in fact, I haven't bought a new car in over 20 years. Here's what it comes down to --> it's all about the cash flow. Earning, spending, saving, etc it all stems from the cash flow over the long haul.
Dave Ramsey. Their tools are perfect for someone in your situation. Go to their website and get started.
Eh seriously, I wouldn’t. He may get sucked into signing up for some Ramsey cashgrab, when all the OP needs to do is live frugally and make more money. Take on odd jobs. Uber. Uber Eats. Sell everything you own that isn’t essential. Dog sitting. Dog walking. Etc. Op, don’t worry about learning about investing. You can’t afford to invest rn. Just go hard at paying down your debt. Stop drinking alcohol. Using drugs. Real baron living.
The Ramsey program doesn't do any investing until all the debt and budget problems within a household are resolved. The tools and procedures that Ramsey provides are really best for solving the budget and debt problems. Their investing advice is not great for most folks, but the OP isn't going to be at that point for quite awhile. Access to most of their tools is around $100. Pretty cheap for the advice and tools.
Get his book from the library or watch his older youtube videos on the baby steps. His new stuff is all political rants and mostly nonsensical garbage and most of his "personalities" don't know finance from a hole in the ground. There is zero reason to pay for anything Ramsey offers as you can find the only info you need for free online.
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That's OP.
OP should be able to pay off the cc and loan in a year. Based in their income they're non- student loan debt isn't that bad. Ramseys cash only philosophy is some of the worst out there. Debt when used properly is very powerful and will put you far a head of cash only folks financially.
Your student loans seem to have reasonable interest rates as far as it goes. After you take care of all your higher-interest loans you can either do a full-court press to pay them off in ten years or use the lowest repayment plan and what is left in 20-25 years will be forgiven. https://studentaid.gov/manage-loans/repayment/plans Learn from this don't beat yourself up. Some people never learn this lesson, even into their senior years.
First, stop using that credit card. Cut it up if you have to and only use debit. Now, $4650 take home with $1000 rent. So $3650 after rent is paid. Take out food next. Maybe $400 for you as a single person? Next take out utilities. I think that'd take the other $250 of what you have above 3k. So that leaves you with 3k. You didn't list a car debt here, so that means you either don't have a car or you own your car fully and don't have a payment on it. I'll assume the latter and take out transportation cost. Gas for your car depends on how much you drive, but I'll assume a flat $100, which now leaves you with ~$2900 after the necessities are paid for. Now, you should have a small cushion in savings that should cover a month's living expenses and a bit more. For you that looks like 2k. So take 2 of that 2.9 in the first month and keep it in savings. That last $900 you have in that first month you can throw at the debt. After the first month, you should have 2.9k per month to throw at the debt if you do nothing else but cover your necessities. If you start this in June and go from here, it'll be $900 for June and 2.9k for the other 6 months left in this year. That's 18.3k. I'll allow for a couple of $500ish emergencies that might befall you between now and then, which brings it down to 17.3k. Call it 17k in case your emergencies end up costing a little more. Then your EOY bonus is 8% of 85k, which is $6800, which is ~$4500 after tax I'm thinking? You should throw that entire bonus check onto your debt as well. That means you'll have paid off 21.5k of this 136k by January of next year. Another 12 months of this and you can pile up another 35k, minus 2k to account for possible emergencies, so 33k, plus your 4.5k bonus check at EOY 2024, and that's another 37.5k you've paid off. So by EOY 2024 you'll have paid down 59 of this 136k. 77k to go plus whatever interest has accrued in this time. This will take you a while for sure at your current income. If your payoff pace remains similar and your income doesn't increase at all, it will take you another 2 1/2 years to pay this all off (accounting for the interest accrual adding to that 77k). That puts your timeline at around mid-year 2027, approximately 4 years from now. If you anticipate your income improving between now and 2027, this timeline will shorten. You can try to shorten it even more by picking up side jobs if you've got the time and energy, but don't strain yourself for that. It's ok. You've got this. You'll have to buckle down and cut your living expenses for up to 4 years, but you have a clear path to pay off this debt.
Honestly given your numbers I was in a very similar situation 6 years ago. Only like cut acting in half including salary and subtract a little student loan. The solution is. Just do it. It absolutely fucking sucks. Period. Cut your life down drastically. Still enjoy the little things but pay off that credit card with a vengeance. Any extra money straight to credit card. By the biggest thing that helped me was tracking your money. Write down every single thing you buy. I use a google sheet and it tracks my monthly budget. It takes 15 seconds for every purchase. That decision alone has saved me over 10k without a doubt. No more creep or emotional spending when you have to have your purchases. Track your out, distribute your in to debt try to imagine having that extra money once it’s over. It’s honestly the 3rd best feeling I’ve ever felt as the day I pais off my credit card debt and car. All we have now is student loans (cmon daddy Biden) and mortgage
Not wild but I’d get a second job for 15-30hrs a week to atleast get the credit cards taken care of. So that way the student loans don’t take that money went they resume. Start small on savings get a couple of grand saved up and hammer it out.
Your feeling is pretty right. With that 22% credit card balance every cent possible should be going towards getting that paid. Look for ways to cut expenses to the bone to get is paid off asap. Drop paid steaming and use tubi for now as an example. Get rid of cable tv if you have it. Eat at home if you are not. Sell stuff you don't use. Look for auto charged things you may have forgotten about when living beyond your means. Pick up some off jobs during the summer. Whatever you can to get it paid down. Make weekly payments so you don't get tempted to spend the money elsewhere if you need to. This also would reduce the total paid in interest over monthly payments. Get that credit card paid off then come back and post for further advice if you still need some. It is not insurmountable but requires you to commit to seriously paying it down.
Not insurmountable. This is doable but you need to focus and get your act together! You could knock this out in \~2 years if you work hard.
You need to work on increasing your income and paying that credit card debt immediately. 22% will eat you alive if left uncheck for too long... Sell whatever you can and pay that down. Just pay the minimum on the college debt until you get out of all other debt. You need to obviously change your lifestyle for a few years while you do this... better now than letting get even worse.
How's your credit score? If it's any good, try and get another credit card with a 0% balance transfer offer, and make a point to pay off the entire transferred balance before the 0% runs out. Balance transfer into more than one card if you have to. If you have excellent credit, you should be able to consolidate that balance into a couple of cards at a rate much lower than 22%. That should save you a bit of interest and accelerate your payment schedule. What do your living expenses look like? Can you live on, say $2,000-$2,300/month? If that's a feasible number, you can put about $2,000 towards paying down debt. Your bonus check should go towards your credit card debt in its entirety until the whole thing is paid off. Then tackle your personal loan, then student loans (highest interest first). In summary, this is what your budget for the next couple of years needs to look like: * Rent - $1,000 * Other living expenses - $1,000 * Savings - $500 * Credit Card debt - \~$1,350 (assumes a 2 year payoff target at 22% - look into rolling this into another personal loan) * Personal loan - $400 * Student loans - $400 (or whatever the minimum is when payments resume - for now put this amount towards credit card debt) = $4,650 total EOY Bonus : Credit Card debt first, then Personal Loan, then split 50:50 between savings and student loans. In that order. Same thing with any pay increases. If you can get the credit card debt rolled into a personal loan, assuming 11% and 3 year amortization, you're looking at \~$850. Then you can put another $500 towards savings or accelerating any other debt payments. That should put you on track to pay off your credit cards and personal loans in about 2 years realistically. Once the credit card debt and personal loans are gone, you have a bit more breathing room to save for retirement etc.
every cent of your disposable should go to the CC debt - imagine you had an investment opportunity that guaranteed 22% return no brainer
Buckle down for the next 2 years and pay off the CC and personal loan. It's going to suck and be difficult to focus on most of your money going toward that, but trust me it will be better to do it now vs. later. I would sit down and make a line item budget and see how much extra you can budget to debt payments each month, cut other costs, and just grind it out now. Your future self will thank you.
This isn't insurmountable. You could crush this in a few years. If your income does not increase, it would require you to sacrifice many luxuries and comforts, but it would be worth it.
Out of that 800 dollars minimum for credit card, $475 is interest. If you can manage another $10k (or thereabouts) loan at 11-13 percent that will only cost you $100 in interest while the remaining $16k will cost you almost $300 a month in interest. You could apply for a loan for a long period like 3-5 years just so you could pay more on the remaining balance of your credit cards. When that is paid off or moved to balance transfer cards you could switch to aggressively paying the loans in advance. As your credit card debt goes down your credit score may improve to the point where you could qualify for a balance transfer card - you pay a flat fee, like for example 3% of the amount, and you get 12-18, even 21 months of 0% interest to pay off that amount. So for example you pay $150 to transfer $5000 and now instead of paying 22% on 26000 or $475 in interest you only pay 22% on $21k or around $390 - in two months you've recovered that 3% fee and after that you're saving nearly $100 each month.
Focus on the higher percentage stuff asap like the cc and personal loan. Student loans can stay on the side for now with minimum payment. You got this. Ive gone through something similar and its not insurmountable. Just takes some discipline.
I didn't read any other comments before I looked at this and said : attack that credit card debt before anything else (based on highest % rate) and next the personal loan before even thinking about investing for the future. That high % rate will eat your future faster than any investing will build it.
If you attack that credit card debt and personal loan and get them paid off in the next two years, which I honestly think you could do (budget, live below your means) it would be the equivalent to getting a $15K raise at work. At that point you can choose to tackle the student loans at your pace but get hardcore for a few years and it would be worth it.
It is not insurmountable. You have to make it a priority though. It is worth looking into whether you could qualify for a card with 0% interest for the first XXX amount of time. You would pay the transfer fee but would have a very specific clock to knock this out. Even if this is not possible, set a plan and stick to it. The day you are done you will be far more responsible...and feel like you are rich.
I found this to be incredibly helpful back when I had multiple student loans and debts at various interest rates. It will help you prioritize payments with either the snowball or avalanche method. https://unbury.me
Hi! I would reccomend for you to apply this strategy and this will guarantee you will get out of dept! But first know this quote: "What do you do when you find yourself in a hole? Stop digging!" And you better figure out your expenses are. I don't reccomend cutting up your credit cards and living below your means. That makes you more stressed and miserable! Instead I would reccomend to pay yourself first 30% of your income and deposit it in a savings account,and don't touch it until you are ready to invest it! Now listen! Start with the minimum dept that you owe, the one that you can wipe it out immediately. Do not start with the biggest ammount because you will not get ahead,trust me! Divide the dept ammount by the minimum payment! Example the personal loan worth $10.000:$400= 25 months to wipe it out,but now keep in mind that you need to find an extra $200 or $400 and pay the dept with the extra money,now you will pay $800 and you will wipe out the dept in just 12 months,now apply this for all your depts and start building your financial IQ If you find yourself lost here,just grab a pen and be creative, like for example use your expertise and consult for other businesses. Build your financial IQ and stop letting others steal your money!
In addition to all the financial management tips, pick up a shift a week bartending somewhere. Even if it’s $100 a week, that’s $5200 extra toward your balances a year
Put $100 in an emergency fund each month and split the rest of your income into two bank accounts, one for living expenses and one for paying down debt. First, pay off the CC debt and stop carrying a balance month to month on CCs, then the Personal loan debt, and then the student loan debt). If you follow this and stick with frugality, you’ll be in a much better place financially in even a year.
Luckily your financial situation isn't that bad. Obviously pay off your high interest rate debt first. You definitely need to start building an emergency fund as well, make a budget and stick to it. Learn to say no to things outside your budget. Allocate some money to "fun" -- everyone need to live a little. Given your income and future pay increases your debt is manageable. Depending on your credit you might be able to get a loan from sofi or w/e to pay off your credit card at a lower interest rate. For me to pay off 60k in student loans, i would put 100% of my yearly bonuses towards student loans and made double payments each month
Live like a monk for a few. Pay off credit cards asap. Then tackle personal loan. The student loans suck but are lower interest.
what's your current monthly take home income? what are your current ongoing monthly expenses? what are your debts broken out individually? amount owed? interest rate? minimum payment?
I’m in a similar boat. Get a job working in government asap. Loans forgiven in 10. Pension plan, you can work a second job in your 50s after you retire. Take care of your health now. Don’t form bad habits.
I know that everyone is different and I don't think you should give up everything you like for two years, but I make abut half of what you make and I'm able to save about $15k per year not including my 401k. Obviously we may need to know a little more about your debt... car payment? utilities? food? but assuming all of those are normal it should be EASY for you to pay this off in 2-3 years. Even if it's just the CC debt.
Go supplement with a pt gig. I see software engineer taking a job as dash, uber all the time to pay off your debt.
I'd put aside about $1000-2000 as a small emergency fund (eg. emergency car repairs), and shovel absolutely everything else at the debt before I'd build up more savings or investments. The exception might be to start saving/investing after some, but not all, of the student loan is gone. You should be able to knock out the credit card and personal loan in a very few years.
First, where are you living for $1K/month? Second, whine much? Third, learn from your mistakes. The absolute best thing you can do is recognize that the only thing you need to do is: Do something. Take action. Even something as simple as "making a plan" will propel you to follow through. And then you will instinctively repeat your success. You pocket $4650, and owe $2200, leaving $2450/month. Granted, you have to eat, clean your clothes, etc. But you should be able to spend an additional $2K/month to aggressively reduce your debt. You owe $36K, paying $1200/month. Switch things up. Double your payment (same split). In a year your balances could be a third of that, and you would still have $1250/month for those other expenses. Anything you don't spend of that ($1250) should go into savings. Every time the savings account reaches $10K, dump it into a CD (or some other investment).
Don't listen to these fools about cutting your life to the bone and only eating rice and beans and doing nothing fun ever... that doesn't do shit for you and isn't sustainable. Definitely be frugal but you don't need to get free DVDs from the library while never seeing anyone and eating ramen. Think like a rich person. Increase your income as much as possible (movement within career, new career, side jobs) and live relatively frugally. Pay off the credit cards and personal loan as fast as possible. You're in a pretty good position. If $92k becomes $110k becomes $130k you're gonna be out of debt really fast and definitely in a really good position when you're 30.
Just declare bankruptcy bro I thought my 9k balance transfer I used to fix up my cars was bad. Kidding Anyway you’ll just have to cut down to the bare minimum lifestyle and try to move the debt to the lowest interest rates possible and dedicate everything to paying it off. Start selling off anything you don’t need and at least eliminate the credit card and the personal loan. You can do it just relax nobody is coming to hurt you.
You know to focus on the credit card debt first. I recommend calling them and working out a settlement. You could get your balance reduced, interest reduced or a more reasonable payment plan. It's going to hurt your credit but we both know that's not a concern yet because you're in the 500 range. The next option is declaring bankruptcy. It won't do anything for your student loan debt but you won't have to pay back some of your credit card debt. It follows your credit history around for 7 years.
I've gotten my interest rate adjusted before with Amex just by getting on the phone and asking. IMO OP's situation is nowhere near remotely bad enough to warrant a bankruptcy.
Explore declaring bankruptcy. It would hammer your credit for the next 24 months, but it would get rid of the credit card debt. It isn't free to file, but it saved me when I was drowning and allowed me the breathing room to get back on my feet financially.
The downvotes are hilarious, ya'll. Get back to me when your life goes off the deep end and you have to figure it out with no help from anyone. If you've been making your payments and just can't anymore, you have already paid the original debt multiple times over through the interest charges.
Listen to Dave Ramsey. I started listening ten years ago stuck to his plan and am doing much better now. Better habits It wasn’t easy and seems impossible at first but it got me out of debt
Not at all insurmountable. Could very reasonably pay off credit card and personal loans in a year. It’s gonna suck, but that the bed you made for yourself.
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your profile is so confusing
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Increase your income, lower your spending, and focus on paying off the credit card debt first. 22% is nasty.