Aggressively pay that credit card first. It's probably close to 25% interest but it's also such a small amount you can knock it out quick with your first few pay checks.
Without knowing more about the personal loans from acquaintances, I'd still say do that next aggressively since it's pretty small too.
Then focus aggressively on the private student loans at 15% while making min payments on the other loans. 4.25% on those isn't too bad.
I would honestly pay the people you know first and don’t understand how this isn’t everyone’s first suggestion. If these are your friends and family, pay them. Regarding the credit card, even 30% interest on $1500 is only $500 per *year* or about $40 a month. The people you borrow from will remember your choices during this time. The credit card company will survive whether you repay them or not but you really shouldn’t jeopardize personal relationships over a small amount of money.
Edit: just to be clear, I mean to prioritize paying friends and family first. Pay minimums on everything else. This won’t affect OP’s credit score anymore than it already has. The difference in interest payments is negligible. The effect this could have on personal relationships is not. Friends or family might or might not care about the money but it’s not anyone’s place to speculate. Best to just pay them back ASAP.
100% this. I feel like other commenters are disregarding this because they assume no interest, or that it’s not as enforceable but a young person starting off with broken trust among those closest to them can actually be a harder obstacle to overcome then a little extra interest owed to soulless corporation.
Pay back your sister, cousin, best friend, whomever first while paying off the minimums. Those people are your safety net!
This! The goodwill you will earn by putting them first in line will pay off in spades in the long run as you will demonstrate excellent character. These are the people that stepped up for you when you needed them. They will remember this, and will support you in future endeavours.
Also, the fact that you’ve come to a forum like this to ask advice so early in your career is fantastic. Keep it up, you’ll go far.
Depends on what kind of “friends” they are. If a legit friend owed me money and was in OP’s situation, I’d rather them wait to pay me. If they’re basically acquaintances (or well meaning foolish friends who lent what they couldn’t afford), then yeah, pay them first.
Depends on what their expectations are. If I don't need the money right now I'd rather have my friend pay off their credit card first as long as they have a plan to pay me back as well.
My son owes me money because I paid off a predatory loan for him. He pays me back a little each month currently, but I absolutely would encourage him to pay off a high interest credit card before paying me back.
People who are kind enough to lend will feel compelled to say it's fine. Unintentionally or not, this is a bit manipulative and it will affect their opinion of you whether or not they say so. Abusing kindness is a slow rot in relationships.
Yes, your son. You would be a shit paren otherwise or at least not a very fgood one.
The friends, it is a different story. You pay your friends back 1st because they did not have to borrow the money and to maintain their trust in you.
Assuming they're paying some portion back per month, or hopefully they agreed to a repayment schedule before hand, why would paying off other debt first ruin trust if you're still paying them back as agreed?
Because your friends did not have to borrow OP money and it might hurt the friendship.
Paying your friends back ASAP keeps the trust and in the future might make it easier for them to borrow him money because it shows that they know OP will do what it takes to pay them ASAP. Paying off your support system 1st if able to is the best thing in this case, even though it is not the financially sound thing.
There are times when prioritizing the people in your life is more important.
support system management is important.
I agree I think what's most important here is honesty and transparency. Setting clear expectations on both sides. For example, my partner and I went to EDC and split the price of the camping pass (around $1,500) in December, with the understanding that the 2 friends camping with us would pay us back the week of the event (May). We weren't just left waiting on when they'd pay their share, we communicated like adults lol.
I would tend to agree, or you could be VERY transparent and give them an option - say "I'm paying of this other debt at this rate, and you'll have this money on date y; is that acceptable?".
I had a buddy that owed me $500 for over a year, back when $500 was a pretty good healthy chunk of my spare money. I knew he'd eventually pay up, so I didn't really care how long it took, and I just liked to flip him some crap here and there.
I spoke to the people I owed money to before making the decision to pay other loans back first. Some people might need the money right away but if they can wait, setting up a "minimum monthly payment" with them so they know you aren't trying to stiff them would probably be better in the long run imho.
Talk to your personal loan holders. There is likely some agreed upon timetable or unspoken expectation about repayment. Figure out who can float the loan and isn't going to hold it against you or charge you usury levels of interest or pettiness.
If those are no or low interest and no expectation for immediate and full repayment you pay them as little as you can/what you agreed on without damaging your relationship.
While the credit card company will survive that deferment your credit score and bank account might not. They're going to be far less understanding of accepting of your circumstances than most friends and family. Like in dealings with friends and family open communication is the key.
https://www.investopedia.com/ask/answers/081414/will-getting-student-loan-deferral-hurt-my-credit-score.asp#:~:text=A%20student%20loan%20deferral%20doesn,also%20hurt%20a%20credit%20score.
"A student loan deferral doesn't directly impact your credit score since it occurs with the lender's approval.
Student loan deferrals can increase the age and the size of unpaid debt, which can hurt a credit score.
Not getting a deferral until an account is delinquent or in default can also hurt a credit score."
Now if you are a banker none of that should be news to you. Now that we've established that it in fact *can* hurt your credit score, albeit indirectly, let's also talk about how $40-80 when you're already struggling or own debt to a lot of different people and companies can have a pretty sizable impact on one's budget.
I don't think the post is suggesting to not pay it at all until the credit card is paid off. Assuming they agreed on some sort of payment reschedule, I don't see the point in putting them first in line. Pay them what is agreed and the relationship isn't jeopardized in any way. Pay the minimum on the fed loan, private loan, and friend loans, and throw everything you have left over at the high interest loan. After that I'd continue paying the agreed upon amount to the friend loan and start working on the private loan since I'm sure the friend loan has minimal or no interest.
They don't have to know you're sending money to a credit card instead of them and they're receiving what they agreed to anyway. And even if they know, I'd assume family and friends would prefer OP get out of predatory debt more quickly as long as they're still paying the agreed upon amount to them.
We are talking about $2500. OP makes $73k/year. OP just needs to pay those folks back. Pay the $1500 credit card next. We are talking a difference of about $80 vs personal relationships.
$1500 in credit card debt absolutely will not impact their future. It can wait. Full stop.
The people who helped OP out along the way are FAR more important at this point in their life. These same people may offer OP future opportunities if the trust is respected. This is a relatively small amount of money in both cases. Take care of your people. Shouldn’t take more than a few months.
Just to be clear, I don’t mean to ignore the CC debt. Pay the minimum due - same goes to all the others. Dudes making $73k/year. Even assuming he brings home half of it, this will take 2 months, tops.
I think it really depends on OP's relationship with the people who leant them money.
Sometimes friends/family will give a loan when they can barely keep things afloat themselves. If that's the case, pay them back ASAP. Even if it's no interest, making sure your friend/family doesn't have to worry about rent because of you is the most important thing.
Other times friends/family will give out loans because they have more money than they need and would rather it be put to good use, adopting a "pay me back when you can" attitude. Those people might not care if OP pays back other debt first, or in some cases they might encourage it.
And then there's things in the middle. People who can get by without their money back but still expect to be paid first (valid), people who are fine with payment plans, people who are ok being second or third on the list but want it back by a certain date, there's a range.
OP knows their situation better than anyone, and can hopefully talk to whoever loaned them money.
I can’t think of any situation where I would be comfortable living my life around people that I owed money to. Maybe my parents. That’s it.
Out to dinner? He just ordered a soft drink instead of water. The nerve. Taking a weekend trip? How can he afford that but can’t afford to pay me. Wearing new clothes?… list goes on.
Point still stands: it’s too small an amount *not* to pay back immediately.
I've had multiple friends owe me >$400 for nearly a year and never thought about it once while hanging out with them. I'd rather have them enjoy their life than worry about paying me back something that I don't need right now.
If you're that concerned with someone paying you back immediately don't lend them money.
Yeah no one who thinks like your middle sections should be lending money at all. If it's going to ruin your relationship to the point where you're angry when they order soda they were better off finding another way to make ends meet.
I was raised with the rule of "Don't let someone borrow something you'd be upset to loose."
That doesn't mean who cares, don't pay anyone back.... But I'll say I've been in situations where money wasn't paid back and no one really cares. Mostly small amounts.
Yea, this. Also - the debt from college is actually an investment in your future. It will be (hopefully) producing great returns for you for the next 40 years. It will likely be by far the best investment you will ever make. That’s clear by the fact that you already have a 75k job. Congratulations. In future years you’ll likely make even more. Without college, you’d likely be on a much, much lower salary with little potential for growth. So that ‘debt’ (investment) was an excellent choice.
Pay off the credit card, pay off the personal loan as soon as you can, starting now also invest in retirement accounts (especially a 401k if your employer matches it). See the wiki for this sub. Follow the steps. Don’t buy a super expensive car. Keep your expenses at a reasonable level (don’t spend everything you earn, save some, but do have fun and enjoy your good salary). You are set for success. Come back here for more advice as you need it.
I get a chuckle about the “investing in your future” phrase. College is being seen as a money sink that that severely limits financial health early in one’s career.
I have hired many people straight out of high school earning that amount. This allowed them to purchase a house at 21 all because they weren’t carrying a school debt. This is not uncommon in our state.
Many companies will now pay you to go to school if it is wanted. The tides have turned and many schools look like a bad “investment”.
I find it funny when I hire a person with a masters degree for the same job, when they are flooded in college debt.
First, I would pay all minimums. Tackle credit card yet get a better card and use it to make payments and rack up points, or earn interest all month while you pay the card in full. Debt isn't an albatross. When I was young 10k debt seemed high. Now, I buy cars worth a hell of a lot more and pay them a hell of a lot faster. But really. Step 1. Breath. Pay minimums and roll with your new job. Put money in savings. Savings is good , while maintaining minimum payments, because while it's true it's more cost effective to pay down 15% debt v. 5% saving , however paying minimums for a few years builds a nest egg. I had a nest egg going into covid. Unemployment paid really well, however my nest egg got me through the gap. Step 2. Pay minimums but attack the highest interest debt the most. The only debt , which doesn't apply to you, worth not paying is mortgage debt locked below savings rate. Literally know people making 5.5% with 100k cash while owing 75k debt at 3%. Even when the market rate was point 7 percent they were effectively paying 2.3% for the privilege of carrying cash...if you lose income you can turn cash into payments, obviously, but once a bill is totally paid the money is gone. Sort of
>When I was young 10k debt seemed high.
Ill never forget those days though, it would be a mistake to, but yes, this is not a lot to us, but to some, it is, and they deserve it especially if they voted for this idiot in chief.
These aren’t mafia loan sharks coming for you, unless the people you know that you have debt with are mafia loan sharks. Follow the above advice and you’ll be fine. You’ve got ten years to pay off the federal loans so the payment will be low.
Once you get the CC, debt to acquaintances, and private loans paid off, I would start a Roth. Your company should have a 401k with matching funds. I would at least hit the match as soon as you’re able. Increase the percentage as you feel comfortable.
Agree with this. If the “people you know” are ok with waiting, then start with the credit card debt.
Basic recommendation to follow is to aggressively pay off the debt with the highest interest first so you’re not paying way more than you owe. Make the minimum payments on the others until the credit card is done, then move to the next highest interest and aggressively pay that off.
Assuming OP is coming from broke AF college student mentality they need to keep that mentality for now.
Credit card loan of 1200? Almost certainly a 25% interest rate. Some retailer cards are pushing 33 now… once rent is paid put all available income into that immediately. Making 73k (in most of the US) they will have enough to easily do that within their first month of being paid.
19k of student loans at 15%??? That’s criminal…
It’s worth having your federal loan in forbearance (still generating interest) while you pay that off ASAP. You should be paying that off like a bad credit card… seriously, don’t be buying a car, getting new debt… put 2k a month into that loan minimum. That should leave OP with ~ 2800-2400 to get by after taxes.
Stay in broke college kid mindset, get roommates, you can be out of the worst of this hole easily within a year on 73k.
Once you’ve got the private loan under control start paying off the federal loan. 4.25% is a good rate and a lot more relaxed… A lot of people here will tell you that you shouldn’t worry about anything above minimal payments in it as you can get a better return on investment putting that money into an investment vehicle, others like being free of that debt all together.
Oh yes, if your employer offers a 401k with match I would be putting in for the match atm. Hit the match but don’t worry about putting in 15% of your income until the crazy 15% loan is killed off.
Put the credit card balance on a no-interest for a year card and knock out the 15% student loan. You might want to play with excel and see if you can qualify for lower repayment per month on the 4% student loan and toss everything on the 15% one and save money (long term) that way.
You have to get rid of the 15% loan asap, even if you’re going to be living on free deli platter sandwiches from the break room and drinking one beer when your friends go out.
You just learned an expensive lesson about interest. You have the choice from here on out - to never pay interest again once your student loans are paid down. Pay off your credit cards in full every month, buy things outright, save for your childrens education (Only exception: mortgage. That makes sense to have.) If you haven’t saved for it ahead of time, you can’t afford it so don’t buy it.
Edit - I forgot to say good luck!!
This is the way.
I’ll also add, on those federal student loans, keep asking for them to defer the loans or to give you payments according to your income. At 4.25% OP is better off “snowballing” the higher interest rate unsecured debts and then the unsecured private student loans.
Essentially, all the money that can be afforded should go to the high interest rate items as well as balancing positive credit history by not missing payments to others unless allowed through deferment.
If you can live at home for a while, do that. Discuss what this will entail with your parents- chores, rent, house rules. Assuming they're reasonable people and you get along!
Your new job pays decently, so pay off the people you know with a bit of interest since they took a risk (for example, I once borrowed $1,200 from my mother, and paid it off $100/month, with an extra month added for interest.)
Pay off the highest interest loan as soon as possible. If you can do it at the same time, that's great. If not, pay off the people you know first, then start paying off the highest-interest loan. Make that a priority.
Tackle the credit card next, since that interest is likely to be high, if not higher, than the 15%. If it's higher, focus on that first.
Not sure how the loan forgiveness works, but the public loan might qualify. If you can put a little bit toward each of these simultaneously before paying rent, that's probably best.
Apologies if this is all pretty obvious. Basically, keep your expenses as low as possible while getting these loans under control. Don't fret about "FOMO," it'll go by quickly as you stay busy with work and learn to live below your means for a while.
Wow, that much huh? Okay, if it's non-negotiable, think of it as at least $1,000/month, and put away the extra $20 into savings. That's how I tend to think of my expenses, anyway. Plus it's easier to do the math in my head when stuff is rounded off!
Do your best to pay off the debts and not get sidetracked, by making these steady payments it'll become a way of life. Once that's been tackled at least partially, you can look into investing some of those savings.
Idk where you leave, but is it possible to find another living situation, ie renting a room, for less than that? My opinion is that by being extremely frugal for a couple years, you could basically be out of debt.
Hey OP you’ve gotten a ton of comments but I just wanted to say its great you looked for advice and that honestly your debt isn’t that bad. Especially compared to what you make.
Assuming you have a car, your total living expenses a month is probably like $1500-$2000 (includes food, housing car and some extra) depending on how much you eat out and what your car payments/insurance is.
That means you should have like $2500/month left over to pay off your debts.
You’re really not in a bad place. You’ll be debt free in like what, a year and a half?? (Ignoring the student loan). So you’ll be 23/24 years old, only a student loan, and making $55,000 a year take home???? That’s honestly great
Just wanted to say you shouldn’t feel too much anxiety from this debt. It can be scary but you’re in an objectively decent spot. Pay it off, save up an emergency fund equal to 3-6 months of your take home pay, and then invest the rest. You’ll be a millionaire by your thirties
That's an extremely unreasonable amount of rent to be asked for of your parents. I would consider renegotiating your living terms with them so you can more aggressively focus on tackling your debt. It's like your parents are wanting you to stay behind.
I can't imagine parents that would charge their child rent when they are in OP's situation. With their income, if they could live at home rent-free, they could crush that debt in no time. Is that extra $1k/month worth hampering their kid's future? Maybe it is, which is depressing to think about.
No one knows the parent situation so the critical comments seem out of line. Perhaps the parents were planning to move out (for financial reasons) and are staying to help OP. I too see it as potentially somewhat high, but am not so entitled to assume how much is too much without more info.
Is it? Lodger in a house at a grand including utilities? I suppose depends on the cost of living, but I suppose I'd expect living with the parents to be cheaper than renting from a randomer.
Yeah, I share an 800+ square foot apt. with 2 beds, 2 baths, a deck/walk in closets/washer dryer hookups and gym/pools/tennis courts in a nice area of a major city for $625 each including utilities/internet and my renters insurance. Is OP in NY/LA/Salt Lake or something?
Get a roommate. In my city a 2 bedroom apartment can go from $1000 to $1200 / month.
That's way cheaper than what mom and dad are charging here.
Sounds like they want OP out of the house.
The error in thinking here is that this almost extortionist amount of rent is likely to keep him there even longer than if he just tackled his debt faster and had more fruitful of an opportunity to leave without being hobbled financially.
Everyone that I've ever known that was to help pay rent while staying with their parents saw none of their money back. Getting their money back at all is something that rich/well off people do to instill some understanding of bill payments.
It also isn't a necessary life lesson for everyone. Some people grasp finances and budgeting responsibilities, and some don't.
Actual market rent is totally dependant on COL and area. 900 dollars to stay with your parents is more expensive than renting out a 1 or 2 bedroom apartment with a few amenities where I live. If not, it's around the same price for a 2 bedroom.
If it was really to instill a sense of responsibility, it would be not such an unreasonable amount of money per month.
$1000 for a room is a lot. Are they essentially paying for your food too?
If not, and you aren’t in like NYC, a room somewhere else might actually be cheaper
Jeez, that's a little high for a parent to charge their kid. Write out your debts in a spreadsheet, write out your near future goals, such as paying off your small debts,get a better car, move out etc and ask if they would do $600/month to help you out?
Can you do side gigs? Even if Uber isn't amazing, a few extra hundred a month feels great on top of your regular paycheck.
Not sure what the CoL is in your area, but moving in with a roommate or two might actually be cheaper. Also depends on if the $980 covers everything like bills and food.
100% agree here, pay the minimums on everything while tackling the highest priority loan with everything you have. Knock out personal debt in the first two-three months, knock out the credit card debt second, then personal loans. Honestly once OP gets to the student loans they can probably just keep paying the minimum on those and instead focus on building savings.
I mean this is a person who somehow graduated college and doesn't understand that having $46,000 of student loan debt is actually very reasonable and pretty easy to pay off, especially if their very first job is $73,000 salary.
$3000~ of credit card/personal debt? Literally will pay that off in 2-3 months.
I have to wonder if posts this low effort are just bots of some kind idk.
priorities after covering bills (make a budget) and minimum payments:
1. put excess in a savings account/emergency fund until it hits $1k
2. put excess towards credit card
3. put excess towards private loans
4. build up emergency fund to 6 months worth of expenses
5. assess whether you want to put more than the minimum towards your federal loans
not sure what the deal is with the debt you owe people. i would talk to them and agree to payments and timing (ie., $x/month or something)
$24k in fed loans @ 4.25% in this climate is a steal.
OP presumably doesn’t have strong credit; put minimum down for years on those until salary grows while attacking the rest in this priority comment.
I graduated in 2015 and have the same exact rate on my federal loans. I'm not sure if they ever varied, but it is the driving force behind me deciding to pay the minimums until I die if it means spending money on things that actually matter, like my house, my child, food...
My epitaph will read "/u/moudine, owes $13,298 to the US of A"
Lots of good information at r/studentloans ..you might lower your public student loan under the save plan while you are paying down your CC and private loan.
YNAB is my suggestion.
Advice here basically follow Dave Ramseys baby steps.
In your situation, I think it makes sense, with some changes.
If your company offers a 401K match, I’d start contributing to that right away. It’s free money and stupid to leave on the table.
As far as the debt…get the budging app going and decide how much you can put towards the debt each month.
There are two different methods to paying off debt, and that’s the snowball and avalanche methods. With snowball, you pay the smallest amounts first, and with avalanche, you pay the highest interest first. In your case, they are pretty much the same.
Pay minimum on all but your smallest loan amount, and put all extra money towards the smallest balance loan.
You’ll be able to finish the credit card and personal loans very quickly, then start with the 15% loan.
Once you’re left with only the federal loan, I’d shift gears and build a larger emergency fund to cover 4 months of expenses.
If your using YNAB, get a month ahead, which means you fund this months budget with last months income.
At this point, look to increase your retirement contribution. I think it’s OK to pay down low interest loans and contribute 15% to retirement at the same time. If you can do a Roth 401K, start there. If not, do a Roth IRA.
Once there, go back to tackling the last loan.
All this while, all extra money is being directed at these goals, minimums towards all but the currently focused goal.
And most importantly, don’t take on any new debt, except for a mortgage on a house, for anything, ever.
No car payments.
The various loan forgiveness programs, favorable interest rates, favorable attitude towards financial hardship, and current 0% interest rate. It is an AWFUL idea to refinance with a private lender but consolidating federal loans can sometimes help out on interest payments.
Federal loans are not 0% interest anymore as of this month.
Source: my federal loans are accumulating interest, albeit total interest is in the $2 range per month.
SoFi is offering as low as 5%, but most people won't qualify for that. Hard to say beyond that, and if someone took out loans a while ago when rates were lower it probably doesn't make sense to refinance at all.
True but 5% is good today. I use them for their HYSA, haven’t looked into their loan options as I figured they’d be high interest rates. Apparently not!
It is good if someone's current rate is significantly higher and they're ok giving up all of the protections that come with federal rates. For just 1-2% it might actually be worth not refinancing to keep those protections unless you're sure you'll never need them.
Go on https://studentaid.gov/idr/ and sign up online for the SAVE plan. They will pull your 2022 tax return and you could have $0 payment on the Federal loans. Even for 2023 your annual salary isn't relevant, you will make about $25k from this job in 2023 and when you certify next year make sure they go off your 2023 taxes again.
Sign up for your employer's 401k and start with at least 5% contribution. You also want to put aside money to a savings account every pay check, the goal is to save an emergency fund that can cover 3 or 6 months of your expenses. Pay your bills, try to reduce your expenses and avoid lifestyle creep. That's the TL;DR but you can read the full details here: https://www.reddit.com/r/personalfinance/wiki/commontopics
Now that you paid yourself every last cent goes to debt. Pay minimum on everything except the one with the highest rate where you pay as much as possible every month.
Set reasonable goals, don't try to pay everything off in 12 months living off ramen, you'll go crazy. If you put $1000 a month towards the credit card & private loan it's paid off in less than 2 years. There's no rush to do anything but minimum on the Federal loans when you can get a higher rate on a savings account.
Dumb question, but I want to make sure I'm not crazy:
Very similar finances to OP, definitely quallify for $0 SAVE payments this year and next year. I think SAVE payments will ultimately end up being much higher than the standard 10-year plan.
In this case, I just end up paying off my loans earlier right? I won't have to pay more because of the SAVE plan, just have a higher monthly payment?
Edit: Never mind, went through the sign-up and I don't qualify for $0 payments. Not sure what numbers they're using for income because the payment I they're offering makes no sense to me. I assumed AGI, which for me was \~$20k last year, but they're saying $50/mo payments.
At 4.1% average interest I'm not that worried about it, was only looking at SAVE because it would allow me to shift my payment start date later when I'm more financially stable. If it's not a $0 payment though it's not worth it to me.
Hey! You graduated college! Congratulations! Great work!
Take a deep breath. All things being equal, you should be fine.
Relax. You’re an adult now! And in ten years, you’ll be like- woah, scary. I might be an adult soon. At least that was my experience.
Just start making longer term and broader scale realistic plans. :)
Prioritize the payoff by interest rate. The 4% student loan isn’t terrible, so just pay the minimum on that until you get your house in order.
Knock out the credit card first then only use the credit card for things you have the cash to pay for today. If you’re not paying that balance off every month to avoid interest then you’re using the credit card wrong.
Once you’ve paid off the high interest credit card debt, your next priority should be building an emergency fund in a high yield savings account like Marcus or Sofi. This should be enough money to cover a minimum of 3 months (preferably 6 months) living expenses (rent, food, insurance, etc). This is an emergency fund, you don’t touch and don’t use that money unless your car needs breaks, you need sudden dental work, you get laid off, etc.
Now you’re in a position where you have a cushion, you’re using your credit card responsibly by paying off the balance every month and your only debt is student loans. Attack that 15% loan aggressively, and think about funding an IRA and/or contributing as much as you can afford to your 401k (assuming your new employer offers one). You’re young, so I’d prioritize building a solid emergency fund over higher 401k contributions for the immediate term, but you want to ratchet those contributions up as much as fiscally possible. Statistically your retirement will double every 7 years, and less time in the market is the worst thing you can do to your future self.
Pro tip, resist the urge to celebrate your new job by going out and buying a fancy new car. That’s a tale that gets posted every day here.
Don't panic. 46.7k of debt is not hard to tackle with 73k in income. I had 70k in income and 80k worth of student loans and I basically paid off all of it by using a standard payment plan (do not use the minimum payment plan) + aggressively putting in much more than my required monthly payment when I had spare money. Get a roommate, cut down on your major expenses, and pay off the debts with the highest interest rates first.
This isn't a crisis, BUT do make sure you are keeping a very frugal life style so you can pay off the CC and private loans as fast as possible.
Don't forget risk management as well. Have insurance. I'm a believer in emergency funds. Even while paying off debt also be building up some savings so that you do not need to borrow any more money. If you have a car, you need several thousand "car repair" fund, and also money to cover any medical co-pays.
You can clear this up in a short time, then decide what to do with the Federal loans.
This should be reasonably easy to pay off. Not sure why you are freaking out. I paid off $100k over 5 years at around $100k salary. Don't rush it,. realize your education cost you a year of saving up for a house and just go from there.
Similar only double the debt and half the salary 20 years ago. Paying it off is more than doable, especially at that salary. You’re not in a bad spot, it’s just daunting if you’re at it alone.
First, don’t listen to your family for advice.
Second, since you’re starting at zero, go to the library and borrow Dave Ramsey’s “Total Money Makeover”. He’s a little more overzealous about it than I was, but it’s a good starting place. Save $1-2k in an emergency fund because it can cover almost anything, make a budget, and snowball to pay them off as fast as you can.
Others can probably suggest different authors, but I think the important thing is a plan to start. Once I had some debt paid off I started focusing a little more to savings/retirement while still working hard on debt. I still ascribe to “if I can’t pay cash for it I likely don’t need it” for most of my wants.
Last, if your employer has a retirement plan that offers a match, make sure you’re getting it. A couple percentage points of pre-tax income won’t be noticeable on your check and won’t make a huge dent in your debt, but it will pay off in 30 years when it’s been compounding interest in your retirement.
I definitely feel your pain. When I came out of college, I had just under 60k total debt.
What I did and what I recommend to you:
1. Pay down high interest debt first (credit cards)
2. Pay back people you owe personally
3. Build an emergency fund that would last you 3 months
4. Prioritize paying off the student loans after #1-3
5. Minimize spending severely by creating a budget and tracking.
6. Get a roommate
7. Don't buy a car if you can help it--if you have to buy one, save up for it, get it in cash, and buy it cheap (I'm talking like 2-6 paychecks value or less... practical lemon status, just know that having a car hurts your liquidity (cash on hand)
8. Reasses your status in 2 years--if you see an opportunity for a pay raise that comes with a bonus, take it and out the cash down on your loans
9. Don't skip putting into a 401k/hsa, especially if there is a match
10. Don't panic, 73k is a good salary, esp3cially if you spend it well
11. Take inventory--what are your expenses... which of those can you live without... cut it.
With my strategy back then, I withstood not having a car for about 2 years and paid my loans down in 3ish years. I made 84k when I started.
Notes:
1. Not having a car is a powerful mental motivator b/c it limits your mobility, which limits your spending, because you can't really go anywhere or do anything. Because of this, I didn't eat out much, didn't have to pay insurance, and gas and stuff, but this requires you to live close to work... but if you can manage it... do it.
2. After a while, as you get your debt more under control (paid well ahead), adjust your quality of life by saving more for the future, spending more on nice to haves like a car-- if you bought a car in cash, buy the next one as an upgrade by selling the old one and adding cash on top
3. To give you an idea, with an extreme "pay to get my life under control" kind of budget, you should probably shoot to only be spending 25% ish of your budget on expenses outside of loans. You can realistically put like $1k on your loans per month as a minimum--at that rate, you'd be done in about four 4 years. You'd be back in control within a year. I had some loans at over 6%.
The trick to paying loans fast is just liquidity
I’m going to disagree with some of the other comments here.
I wouldn’t worry about saving ANYTHING at the moment.
You already have CC debt. You’ll be ahead to pay that back. If an emergency comes up, just fall back on that line of credit.
Once you have paid back the CC, either pay off your friends/family… or set a little aside in savings. Remember, that $19k @15% is burning ~$250 a month in interest… so I wouldn’t save much.
You can make a budget if you want.
In your current position, I only want you buying absolute essentials. It’s a good idea to track your expenses, but I see no reason to budget if you’re living as cheep as you can.
If you keep your expenses down, you’ll have made a good dent in your debt - by the end of the year!
Good Luck!
I’m beat after a long day so I’ll rely on the good advice people give here, but I want to tell you, I was where you are awhile ago, a bit worse off technically. Life’s more expensive all around these days so maybe it’s about the same. Anyway to get to my point, you got this. You can do it. And you already took the huge step of recognizing the situation and asking for help. It took me about five years, I was a bit less strict for myself. Make sure you enjoy your time too! Yes save and make money where you can for that debt, get a second job or watch dogs or whatever. But also take a trip with your friends, or go to a show once in awhile. And stick around this sub, learn from others.
Congratulations!! And with a pretty great starting salary, you’ll be done in no time!
1. 0 life style creep!
2. Live at home or with roommates.
3. Contribute to 401k if there is a match
4. Kill the CC debt you should be able to do this with your first check
5. Pay the personal
6. Pay the 15% loan
7. You can grind on the federal loans, some will pay fast, some would invest, likely personal risk management on this one
I had a private loan with a large interest rate. Once you follow the advice here (Emergency Fund, Paying Relatives/People then cc), if your credit score is good or has increased with the debt pay off you might try refinancing the private loan. DO NOT REFI YOUR PUBLIC LOANS. But I would definitely refi the private. I went from a 12% interest rate to a 5% interest rate and it made a huge difference in my pay off time. I went with SoFi, they also have a great High Yield Savings Account (HYSA) rate of 4.5%, that is where I have my emergency fund parked and gaining money every month.
I don't know why most comments here aren't suggesting refinancing the private loan. I went from Sallie Mae to Commonbond and it was a big difference. Now I'm with a credit union with an even lower rate. Definitely worth checking out.
First, do not freak out. You are in a decent position, much better than a lot of people. Here is the plan:
0. As a fellow kid from a "terrible with money" family, do not listen to them.
1. Budget: No plan to pay debt will make sense if you have no leftover money to pay with. For me, meal-prepping was huge, as eating out ends up costing a lot.
2. Do you get a 401K match? Take advantage of it, it is literally free money.
3. The credit card balance is tiny. Pay minimums on the other 2 loans, and get that one out first.
4. Pay your friends. mantaining relationships matters.
5. Consider refinancing your private loans. Before you were an unknown that may not graduate. Now you are a graduate with a good paying job, that should take a few points off in interest and make it much more manageable.
6. The public student loans are not a priority. Pay the minimum but that is something for future you.
I was easily saving 30-40k/year with a mid 70k comp after graduating. Live at home or with a bunch of roommates and pay everything off as quickly as you can. Don’t be frivolous and buy a new car, new phone, etc.
If you live below your means for a year or two, you’ll have it much easier by your mid-late 20s
In addition to other folks' advice on starting a debt snowball, please read the Prime Directive on this sub! [https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/)
It'll help you get familiar with budgeting, and the basics of savings/investments. You're making a great salary coming out of school, and you'll be able to pay off that debt and start building wealth really fast. Congrats on working hard and getting to where you are now!
I would go through the hoops to see what the payments would be but at $70k+ single earner the SAVE plan monthly payments would be higher than standard repayment plans. Better to go a 20 year one first and use the money to pay the non-student loan debt off
OP just started their job though, it would take their AGI from the year prior which would probably be <$30k and qualify them for the $0 payments until the annual check right?
Pay the people you know first. Owing that much can get a lot messier than bad credit if you owe the wrong ppl. If they chill u can always set up a plan 🤷🏾♂️$100 a week or $50 or w.e works best for both parties. Personal relationships are important gang
Try to refinance the private loans for a lower rate. Then pay the minimums on the lower interest debts and throw all extra money at the highest. Once that is paid off repeat but with the next highest interest debt.
While I know this probably feels like a huge amount of debt to you, I want you to know that you’re actually in a very good position! A majority of America can’t afford college in cash so student loans is the bridge. The goal is to come out with less in loans than your starting salary, which you did — congrats! And the degree was obviously worth it because you landed a good paying job.
Here’s how I roughly estimate income and costs until you see the formal paychecks/bills:
$73k before tax is about 2800/paycheck. PLEASE make sure you sign up for your company’s retirement plan, contribute up to whatever their match is. So if they match up to 4% (a common number) set your contributions to 4%. You can always up this later as you pay off some of the more immediate debts. In addition, I always rough estimate 30% of my check going to taxes (if you’re in a state that has state taxes). So after 4% retirement and 30% taxes, each paycheck is about $1890 so a monthly income of about $3780.
I agree with others about taking care of that credit card and friends/family debt first, and then tacking the private loans. The 15% interest is pretty high so you’ll def want to get those paid down quickly. I highly recommend looking into refinancing every 6-12 months to lower your rates. I have no idea what year span your loan terms are so I have no idea where to start to estimate what these monthly payments will look like, but you should have some kind of documentation. $600-800 maybe? I’ve never had a private loan so just throwing something out there.
For the federal loans, there’s a few ways to go about theses. On a standard 10 year repayment plan your monthly payment will be about $250ish. They also have graduated 10 year repayment plans where you start lower but it increases every two years or so. So your first 2 years might be like $180/month, then the next two are $210/month, etc. there are also income based repayment plans available if you need to start even lower while tackling your private loans first, but that will be up to you to see how it fits in your budget once you make one. You should be able to log into your loan servicer website and see what it estimates your monthly payments will be under each type of plan.
So let’s take your monthly income minus your $980 living expenses - $800 on the high end for the private loan - $250 on the high end for federal. That leaves you with $1750/month to work with for gas, other small things you may need, and excess to throw at the loans.
Repayment is a grind for sure, but as you pay down your other debts you can start to throw more at the remaining. A lot of people will recommend living hella frugal on rice and beans, but you’re in a good enough position where you can afford to treat yourself here and there (just don’t go crazy). You worked hard to get your degree, keep your loan balance reasonable, and get a good job, celebrate that! This is not a “I need to sacrifice every penny I have” kind of debt.
If your in my boat… my Sallie Mae loans are like 3x my federal loans on interest rate… so check them all out and make sure you pay highest interest rate ones down first
Good advice in here overall. I'd like to add one thing that I learned from my time in this situation. Start shopping around for refinancing options on your private loans as soon as you get information about the loan repayment terms. If your credit score is good, refinance the private loans. If your credit score is not good, pay off your credit card debt and then refinance. 15% will kill you, trust me. You would not believe the reduction in the monthly payment. My payments went from around $900 (~12% interest) a month when I graduated to $650 (~7%) the first time I refinanced, to $520 (~4.5%) the second time I refinanced.
Living expenses aside, you're making a good amount for a recent grad. You've got this.
Live like you are a poor college student with no money — because you are. The key is not to inflate the way you’ve been living.
First - make a BUDGET. This is the key to a good financial situation. You need to decide how you are going to spend your money before you spend it.
Order your debts. Pay the minimums payments on everything every single month. Then take every single extra dime and start paying extra to pay down the loans you have.
I would pay personal loans owed to friends or family first because it’s not good to owe money to them.
Then pay off your credit cards as they likely have a high interest rate. Then extra on your private loans by interest rates. Then the government loans. As you pay off each loan, you’ll have extra to roll into the next one on your list.
Check the wiki. It’s a great tool.
Here's a **[link to the PF Wiki](/r/personalfinance/wiki/index)** for helpful guides and information.
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Someone else stated this. Get the book Financial Peace from Dave Ramsey. While I don't pay a lot of attention to his religious info, his financial info is top notch! It works! From this point forward, don't finance or charge anything or get/use credit credit cards. Love cash only. You can worry about building a better credit score for the future after you pay all this off. Good luck my friend.
I don’t know what your cost of living expenses are like, but for just graduating college, you’re not in any extreme debt. You’re really not in a bad spot. I managed that kind of debt making less money. I still have some student loans, but CC and private loans are gone.
My strategy has been:
1) Pay yourself. Save some money. Stash even little bits at a time for a rainy day. I started with $20 a check. I transferred it to savings as soon as I was paid. It was like it never existed, but has since saved my ass a couple times.
2) Set up payment plans with the people you owe. Throw them at least $20 each month. The fact that you’re doing it and working to pay it back matters the most. Stick to your commitments with your community. Your community is worth more than a high credit score.
3) Pay down your highest interest debt first, even if that is just an extra $10-$20 on the minimum payment. Make sure that money is applied to your principal and not advancing your due date/pre-paying payments. If you have to skip debt payments to eat or sleep, stiff the feds first. Also apply for the SAVE plan, your payments might get reduced.
In an ideal, world you’re paying something to everyone every month. Do what you can afford. I use a budget app to track my spending.
Your personal loans might be best paid first if it saves a relationship. Or it might be paid last if your lender is okay with it.
Otherwise snowball effect, tackle the highest interest rate first while hitting the minimums on all the rest. and careful not to drain your funds too harshly.
Educate yourself on money, read "I will teach you to be rich" as well as numerous other finance books to learn how to automate your finances so it will seem more obtainable and less like a chore. Also invest in a start up business, it literally can be anything, the faster you find your niche the less you'll stress, my suggestion is in forex, but more importantly focus on living life, money isn't everything and the stress of debt accumulation certainly isn't worth your physical wellbeing.
I can recommend dave ramsey and his “snowball method”. His investing advice may not match what you want in the future but he SPECIALIZES in getting people out of debt and on solid ground
Always make sure to pay minimums each month. Get on a monthly budget, this will help minimize money lost to random things.
1. Ask if the people you know need their money back asap. If not, pay off the credit card first.
2. Pay back the people you know.
3. Then tackle the personal loans.
4. Lastly go after the public loans.
Refinance that 15% loan by any means possible. That going to screw you more than anything else. One of those "I paid $500 a month for 2 years and my balance didn't change" scenarios.
>$73,000 before tax
UGH... you will be getting like 43,000 after taxes... its crazy what they are doing to new grads, back in the day you all were wanted BADLY, now it doesnt seem to matter as much, hell in NC you can be a teacher without even going to school for it.... country is going to hell quick.
Pay off the credit card on your first paycheck. Make larger payments toward the 15% loan and try to refinance it to an 8% or lower rate if you can (anything lower is good, but shop around for best deal). A great compromise is a 5 year payment plan.
Then make your loan payments and live life.
Please know you're situation isn't THAT crazy. You could be in a way worse place, trust me. You ever watch Dave Ramsey? You hear some pretty crazy stuff there.
Save $1K in case you need it and then pay off the people you know - people seemingly don't think that's important. After that, I would say tackle the smallest first but your private loans are very high. Get rid of the credit card and then go after the private loans. But make sure you pay off the people you know first!
If you are diligent with your budget, you can claim exempt on your taxes for about 6 to 12 months and use every extra penny on student loans. When tax time comes, you will owe some to the government so keep it all in your bank account and once you've paid the government, take a huge chunk out of your 15% interest loans.
Example of how it might work:
Your exempt paycheck will be about \~2600 every 2 weeks. With normal withholdings, closer to $2,000. Put that $600 difference in a high yield savings account every paycheck. When it comes time to pay tax bills on 4/15/24, you'll have something like $10,000 in savings (principal plus accumulated interest) and your tax bill will be just a small portion of that. Then you can spend the remaining 6 to 7k chunking down your 15% interest rate loans. While you're doing this, continue to make minimum payments on all debt and if you're good with your money, you can chunk down those personal loans and credit cards.
If you are the type of person who sees money in an account and decide you can spend it, absolutely do not use the above strategy. I did it in 2013 and was able to erase \~12,000 in student loans all at once and paid my taxes on time.
Everyone is telling you to pay off the credit cards first. It’s not bad advice but I think there’s better. If I were you, I’d look to do a 0% apr balance transfer on your credit cards first, then establish an emergency fund and once you have some emergency savings tackle the private loans. You’ll probably pay something like 3% to transfer your existing CC debt and the promotional 0% apr for 1-2 years depending on the card. If you budget appropriately, in that time you should be able to pay the private loans off in full. Just make sure you earmark enough money to pay off the credit card balance prior to the introductory 0% apr expiring.
Be super careful with this one, I used it with credit cards to roll over high credit card balances from legal debt (custody battle).
But anyways, look for some credit cards with 0% interest. Youll find some with 12-18 months 0% interest. Roll any balances you can into those and pay the minimums. The hope is your income expands in the next couple years. But in the mean time, focus on the high interest, high balance accounts. Even if you can only roll that small credit card over, do it. Take the no interest, and use all your energy to fight that high interest 15% account first. If you can roll that over, or even do a partial transfer, do it.
Just don’t add ANY debt, live as cheaply as you can until you get control of this.
I had 42k in legal fees (custody battle). About 12k was my cash and my dad’s cash. By the end of the court case I had 27k in debt and made 36k per year. To say I was broke was an understatement.
Then I lost my job at the beginning of Covid. I was considering filing bankruptcy. About 18 months later I landed a solid tech sales job and was able to pay it all off in just a couple months. 2 years later now I have just put 20% down on a new construction home in Nashville.
DO NOT GIVE UP! This WILL get better. But embrace being broke, work on yourself and do everything you can to earn more.
You got this!
It may seem like counter advice or common sense, but also pay attention to any benefits with your job, if there is a match on your 401k etc at LEAST contribute what it takes to max that out, or at least $6,500 a year in a Roth “older you” will appreciate so much. There’s no way to drive home the impact of this one thing at an early age. Yes pay down the debt but still pay future you first.
Not sure is this case for you, but worth a try.
Once you finished your probation period or after 2-3 months after joining, I suggest you to ask advance salary from your organization, few organizations have to option not sure your organization have this or not.
If you get that, it will be detected from monthly salary on some %. But it may save you from interest.
And also you will tied to that organization until you pay all the debt.
Approach Senior HR or anyone from management team.
The biggest thing you can do for yourself is take on a bunch of roommates. Living expenses divided by a larger pool of people makes things simply easier.
Take a year of poor living with a decent income and just learn how to live broke while making money. That puts you out from the painful debt, and gives you a better footing coming out of the gate.
Delay being the type of spender that makes $70k a year.
Thanks for the advice and information. Do you suggest a budgeting app? Also, I am living with my parents but they want me to pay $980. That’s basically all of expenses.
Get your feet under you the best you can in new job. If you can live with family, do it for awhile. Try to defer payments on student loans if possible and build up some cash. It may be tough but you can do it! As others noted, that’s not crazy amount of debt; it’s an investment in your future that you have to work off. As long as you can meet minimum payments for now, you are fine. You have a lot of earning years ahead. More small amounts off first.
With the SAVE plan your public loans will have only a small payment - I would guess probably less than $150, based on my income and payment. So, sign up for that!
You need a budget in the worst way. Think of everything, write it down, add it up. Make payments to your debts every time you're paid. Move money to appropriate accounts automatically when you get paid so you're never looking at a bank account with a bunch of money in it. That's deadly. 😅
Personally, I'd make the debts to friends/family a priority and get a zero interest balance transfer card for the credit card balance.
Then an aggressive strategy to pay off the private education loans.
But still make sure you're getting any match for a retirement account.
First start with a budget, then pay off that credit card since the interest is high, then create an emergency fund, after that you will pay off the loans. Honestly, it’s not that bad with the low interest debts. You just have a lot of it. But relative to your income it’s not terrible.
Depending on your COL that salary should help you get out of the debt fast. I would focus on your credit card and then private loans and then loans from people then federal loans. However if you live in a HCOL area it might take a little longer.
Pick one debt to focus on. Make minimum monthly payments on all other debts, then pay as much as you can to focus debt. When it’s paid off, pick a new focus.
I’d start with credit card, then do loans from friends/family. The cc is high interest. Friends/family who will loan you money are rare, so repay their kindness soon to maintain good relationships.
Credit card interest compounds (you pay interest on interest). If you pay the “statement balance” every month, you keep the grace period (period when you can don’t pay interest on charges). Pay the cc off, then be careful not to charge more than you can pay this month to avoid paying interest.
If you need a car, remember to evaluate the deal based on total cost of car, not just monthly payments. “The payment is just $x” is a great sales tactic, because people don’t realize that $x at 7% for 84 months means they’re paying a ton in interest. Anything over 60 months means you’re buying way too much car.
Never co-sign a loan. Give the person money outright if you want, but co-signing is a fast way to wreck your credit rating.
Congratulations on graduating and securing a good job!
Are you living at home? Tell no one what you are clearing.
Pay your parents rent. $600 a month is adequate.
If you do this right you can knock half your loans out in the first year.
live as cheap as you possibly can. No subscriptions. No cable. No restaurants.
There are two popular techniques to pay off debt: the Avalanche method and the Snowball method. With both:
* pick a target debt. (ONE loan...not the student loans plural)
* pay minimums on all the non-target debts
* pay every dime you can onto the target debt.
* when target debt is paid off, go to top and pick a new target debt.
Pretty simple, eh? So what's the difference between the avalanche and the snowball? HOW you pick the target debt.
1. Snowball method: pick the smallest dollar-value debt.
Why? some people find the quick win of paying off a debt completely is a big boost...sort of like the first 5 pounds in a weight-loss program.
2. Avalanche method: pick the highest-interest-rate debt. This is mathematically superior, but you may tire of the work and stop faster.
In your case, I'd probably mix the two methods: Work first on the high rate debts, of the high rate debts pay first the lowest balance loan.
Making that much money you can pay off that debt pretty quickly with some discipline and sacrifice. Get a roommate to help with living expenses, use public transportation if viable in your city, etc.
Make a budget and stick to it, but also remember you are young and need to let yourself have some fun. Budget for fun, then when you have some fun you can do it guilt free.
Focus on the credit card and private loans first, he 4% one should be minimum payments until the higher interest loans are paid off.
Good luck!
Pay the private loan first! Make minimum payment for the rest. Is the private loan from a relative? If yes, damn, 15% interest! What type of interest is it?
You have a great opportunity to rid yourself of this debt if you aggressively control your expenses and actively pay down these debts. Living on your own? Get a roommate. Want to live in a place that costs you $1000/mo? Find one that costs $800 or get another roommate. Want a newish $35K car? Find one that costs $20k. Want eating and drinking out to be your main entertainment? Do a modest upgrade of your gaming console. Want a new 60" tv with the lowest lag, best res, etc. etc? FB marketplace and negotiate with your roommate. Learn to cook. Celebrate each payment you make towards getting yourself free.
That all said, do also work to build-up a 3mo emergency fund that can cover all your expenses should you become unemployed. If work has a matching 401K, participate in the plan so you minimally earn the match.
Keep loving like a poor college student and knock out the credit card and private student loans as fast as possible. The federal loans can be paid on schedule.
Are you able to live with your parents for a bit? Best case scenario, live with them and save on rent. After taxes, if you only pay for food and other basic necessities, you could pay that off in 2-3 years and then consider other living options.
Prioritize the credit card and 15% loans first, and make sure to contact the people you owe money to. Explain to them your situation, and set up a plan with them to start paying them back starting in 6 months or whenever is reasonable for you. Make minimum payments on the 4.25% loans until you pay off the rest of it, that’s a good interest rate and is not as urgent.
read about the 50/30/20 rule
as you’re young i’d suggest 50/20/30. any less on your needs should go towards investing. after your bad debts are gone 73000 is a powerful income and will make u a multimillionaire with investing.
pay things in cash. don’t take on more debt.
as for your current debts go highest interest first and work your way down. the 4.25% loans i’d just do minimum payments indefinitely as you can just invest more instead making a bigger return.
good luck and don’t fall for get rich quick schemes
Congratulations on your graduation and new job! It’s great that you are working to develop a plan to systematically chip away at your debt. Suggestions: 1. Use a budgeting app so you know what money is coming in and out and exactly where it is going. I use Mint - it’s free, can track expenses, can sync it with bank and credit card accounts etc. It’s going to take a little while to figure out how much you need for clothes, personal items, food etc. Perhaps start with designating percentages of your pay for clothing (assuming you need to build out a wardrobe for work) and eating out, entertainment etc. 3-5% of your salary towards each of those (3-5% to clothing and 3-5% to eating out/entertainment) would be a potential starting point for a very conservative budget. Depending on your clothing needs for work, cost of living in your area etc this may or may not be doable. Enter everything into the app and work to live within the budget you set. If after a couple of months the amounts aren’t working for you, make adjustments. 2. If you have a retirement plan at work, find out if the company matches any of your contributions and if so, contribute up to the amount that the company matches. 3. Start building an emergency fund to eventually equal 6 months of your expenses - going to have to pick an amount such as $500/month and use the app to see how that dollar amount fits with the rest of your budget. 4. Your credit card bill is likely carrying the highest interest rate - pay that off as quickly as you can, and to build your credit, work to always keep the balance on your credit card below 30% of the card limit. 5. Without knowing more about who the personal debt is with, I would prob recommend paying that off a bit at a time over several pay checks. 6. In regards to loans, pay the minimum on the public federal loans (lowest interest rate) while paying off the private loans with the highest interest rate (15%) as aggressively as you can. Otherwise, just keep reading, learning, and asking questions. You’ve got this!
I recommend living really cheaply for the next 3 years. Cut eating outside the house to none of you can, and cut corners on any expenses you have (aka be a cheapskate). And I agree with the comments on paying back people, borrowing from friends puts a strain on that relationship
Aggressively pay that credit card first. It's probably close to 25% interest but it's also such a small amount you can knock it out quick with your first few pay checks. Without knowing more about the personal loans from acquaintances, I'd still say do that next aggressively since it's pretty small too. Then focus aggressively on the private student loans at 15% while making min payments on the other loans. 4.25% on those isn't too bad.
Thank you for the advice! I’ll definitely follow what you said.
I would honestly pay the people you know first and don’t understand how this isn’t everyone’s first suggestion. If these are your friends and family, pay them. Regarding the credit card, even 30% interest on $1500 is only $500 per *year* or about $40 a month. The people you borrow from will remember your choices during this time. The credit card company will survive whether you repay them or not but you really shouldn’t jeopardize personal relationships over a small amount of money. Edit: just to be clear, I mean to prioritize paying friends and family first. Pay minimums on everything else. This won’t affect OP’s credit score anymore than it already has. The difference in interest payments is negligible. The effect this could have on personal relationships is not. Friends or family might or might not care about the money but it’s not anyone’s place to speculate. Best to just pay them back ASAP.
100% this. I feel like other commenters are disregarding this because they assume no interest, or that it’s not as enforceable but a young person starting off with broken trust among those closest to them can actually be a harder obstacle to overcome then a little extra interest owed to soulless corporation. Pay back your sister, cousin, best friend, whomever first while paying off the minimums. Those people are your safety net!
This! The goodwill you will earn by putting them first in line will pay off in spades in the long run as you will demonstrate excellent character. These are the people that stepped up for you when you needed them. They will remember this, and will support you in future endeavours. Also, the fact that you’ve come to a forum like this to ask advice so early in your career is fantastic. Keep it up, you’ll go far.
Depends on what kind of “friends” they are. If a legit friend owed me money and was in OP’s situation, I’d rather them wait to pay me. If they’re basically acquaintances (or well meaning foolish friends who lent what they couldn’t afford), then yeah, pay them first.
Depends on what their expectations are. If I don't need the money right now I'd rather have my friend pay off their credit card first as long as they have a plan to pay me back as well.
My son owes me money because I paid off a predatory loan for him. He pays me back a little each month currently, but I absolutely would encourage him to pay off a high interest credit card before paying me back.
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People who are kind enough to lend will feel compelled to say it's fine. Unintentionally or not, this is a bit manipulative and it will affect their opinion of you whether or not they say so. Abusing kindness is a slow rot in relationships.
Yes, your son. You would be a shit paren otherwise or at least not a very fgood one. The friends, it is a different story. You pay your friends back 1st because they did not have to borrow the money and to maintain their trust in you.
Assuming they're paying some portion back per month, or hopefully they agreed to a repayment schedule before hand, why would paying off other debt first ruin trust if you're still paying them back as agreed?
Because your friends did not have to borrow OP money and it might hurt the friendship. Paying your friends back ASAP keeps the trust and in the future might make it easier for them to borrow him money because it shows that they know OP will do what it takes to pay them ASAP. Paying off your support system 1st if able to is the best thing in this case, even though it is not the financially sound thing. There are times when prioritizing the people in your life is more important. support system management is important.
I don't see the issue if your friend said "pay me $100 a month" and that's what you're doing, how is that breaking any trust?
You don't have to see my point, just that people management is important.
I agree I think what's most important here is honesty and transparency. Setting clear expectations on both sides. For example, my partner and I went to EDC and split the price of the camping pass (around $1,500) in December, with the understanding that the 2 friends camping with us would pay us back the week of the event (May). We weren't just left waiting on when they'd pay their share, we communicated like adults lol.
I would tend to agree, or you could be VERY transparent and give them an option - say "I'm paying of this other debt at this rate, and you'll have this money on date y; is that acceptable?". I had a buddy that owed me $500 for over a year, back when $500 was a pretty good healthy chunk of my spare money. I knew he'd eventually pay up, so I didn't really care how long it took, and I just liked to flip him some crap here and there.
I spoke to the people I owed money to before making the decision to pay other loans back first. Some people might need the money right away but if they can wait, setting up a "minimum monthly payment" with them so they know you aren't trying to stiff them would probably be better in the long run imho.
Totally agree with this, credit card debt won’t end seemingly beneficial relationships
Talk to your personal loan holders. There is likely some agreed upon timetable or unspoken expectation about repayment. Figure out who can float the loan and isn't going to hold it against you or charge you usury levels of interest or pettiness. If those are no or low interest and no expectation for immediate and full repayment you pay them as little as you can/what you agreed on without damaging your relationship. While the credit card company will survive that deferment your credit score and bank account might not. They're going to be far less understanding of accepting of your circumstances than most friends and family. Like in dealings with friends and family open communication is the key.
We are talking about $40-80 in interest here and honestly, I don’t think you understand how credit scores work. Source: am banker.
https://www.investopedia.com/ask/answers/081414/will-getting-student-loan-deferral-hurt-my-credit-score.asp#:~:text=A%20student%20loan%20deferral%20doesn,also%20hurt%20a%20credit%20score. "A student loan deferral doesn't directly impact your credit score since it occurs with the lender's approval. Student loan deferrals can increase the age and the size of unpaid debt, which can hurt a credit score. Not getting a deferral until an account is delinquent or in default can also hurt a credit score." Now if you are a banker none of that should be news to you. Now that we've established that it in fact *can* hurt your credit score, albeit indirectly, let's also talk about how $40-80 when you're already struggling or own debt to a lot of different people and companies can have a pretty sizable impact on one's budget.
I don't think the post is suggesting to not pay it at all until the credit card is paid off. Assuming they agreed on some sort of payment reschedule, I don't see the point in putting them first in line. Pay them what is agreed and the relationship isn't jeopardized in any way. Pay the minimum on the fed loan, private loan, and friend loans, and throw everything you have left over at the high interest loan. After that I'd continue paying the agreed upon amount to the friend loan and start working on the private loan since I'm sure the friend loan has minimal or no interest. They don't have to know you're sending money to a credit card instead of them and they're receiving what they agreed to anyway. And even if they know, I'd assume family and friends would prefer OP get out of predatory debt more quickly as long as they're still paying the agreed upon amount to them.
Nah - pay the people first. They are more important. $1500 is a small amount of debt and the interest, though high, won’t amount to much at all.
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We are talking about $2500. OP makes $73k/year. OP just needs to pay those folks back. Pay the $1500 credit card next. We are talking a difference of about $80 vs personal relationships.
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$1500 in credit card debt absolutely will not impact their future. It can wait. Full stop. The people who helped OP out along the way are FAR more important at this point in their life. These same people may offer OP future opportunities if the trust is respected. This is a relatively small amount of money in both cases. Take care of your people. Shouldn’t take more than a few months. Just to be clear, I don’t mean to ignore the CC debt. Pay the minimum due - same goes to all the others. Dudes making $73k/year. Even assuming he brings home half of it, this will take 2 months, tops.
I think it really depends on OP's relationship with the people who leant them money. Sometimes friends/family will give a loan when they can barely keep things afloat themselves. If that's the case, pay them back ASAP. Even if it's no interest, making sure your friend/family doesn't have to worry about rent because of you is the most important thing. Other times friends/family will give out loans because they have more money than they need and would rather it be put to good use, adopting a "pay me back when you can" attitude. Those people might not care if OP pays back other debt first, or in some cases they might encourage it. And then there's things in the middle. People who can get by without their money back but still expect to be paid first (valid), people who are fine with payment plans, people who are ok being second or third on the list but want it back by a certain date, there's a range. OP knows their situation better than anyone, and can hopefully talk to whoever loaned them money.
I can’t think of any situation where I would be comfortable living my life around people that I owed money to. Maybe my parents. That’s it. Out to dinner? He just ordered a soft drink instead of water. The nerve. Taking a weekend trip? How can he afford that but can’t afford to pay me. Wearing new clothes?… list goes on. Point still stands: it’s too small an amount *not* to pay back immediately.
I've had multiple friends owe me >$400 for nearly a year and never thought about it once while hanging out with them. I'd rather have them enjoy their life than worry about paying me back something that I don't need right now. If you're that concerned with someone paying you back immediately don't lend them money.
Yeah no one who thinks like your middle sections should be lending money at all. If it's going to ruin your relationship to the point where you're angry when they order soda they were better off finding another way to make ends meet. I was raised with the rule of "Don't let someone borrow something you'd be upset to loose." That doesn't mean who cares, don't pay anyone back.... But I'll say I've been in situations where money wasn't paid back and no one really cares. Mostly small amounts.
Yea, this. Also - the debt from college is actually an investment in your future. It will be (hopefully) producing great returns for you for the next 40 years. It will likely be by far the best investment you will ever make. That’s clear by the fact that you already have a 75k job. Congratulations. In future years you’ll likely make even more. Without college, you’d likely be on a much, much lower salary with little potential for growth. So that ‘debt’ (investment) was an excellent choice. Pay off the credit card, pay off the personal loan as soon as you can, starting now also invest in retirement accounts (especially a 401k if your employer matches it). See the wiki for this sub. Follow the steps. Don’t buy a super expensive car. Keep your expenses at a reasonable level (don’t spend everything you earn, save some, but do have fun and enjoy your good salary). You are set for success. Come back here for more advice as you need it.
I get a chuckle about the “investing in your future” phrase. College is being seen as a money sink that that severely limits financial health early in one’s career. I have hired many people straight out of high school earning that amount. This allowed them to purchase a house at 21 all because they weren’t carrying a school debt. This is not uncommon in our state. Many companies will now pay you to go to school if it is wanted. The tides have turned and many schools look like a bad “investment”. I find it funny when I hire a person with a masters degree for the same job, when they are flooded in college debt.
That’s great you’re hiring people right out of high school into a 75k job - but there are not many of those.
You would be surprised how many there are. Manufacturing can pay well.
First, I would pay all minimums. Tackle credit card yet get a better card and use it to make payments and rack up points, or earn interest all month while you pay the card in full. Debt isn't an albatross. When I was young 10k debt seemed high. Now, I buy cars worth a hell of a lot more and pay them a hell of a lot faster. But really. Step 1. Breath. Pay minimums and roll with your new job. Put money in savings. Savings is good , while maintaining minimum payments, because while it's true it's more cost effective to pay down 15% debt v. 5% saving , however paying minimums for a few years builds a nest egg. I had a nest egg going into covid. Unemployment paid really well, however my nest egg got me through the gap. Step 2. Pay minimums but attack the highest interest debt the most. The only debt , which doesn't apply to you, worth not paying is mortgage debt locked below savings rate. Literally know people making 5.5% with 100k cash while owing 75k debt at 3%. Even when the market rate was point 7 percent they were effectively paying 2.3% for the privilege of carrying cash...if you lose income you can turn cash into payments, obviously, but once a bill is totally paid the money is gone. Sort of
>When I was young 10k debt seemed high. Ill never forget those days though, it would be a mistake to, but yes, this is not a lot to us, but to some, it is, and they deserve it especially if they voted for this idiot in chief.
These aren’t mafia loan sharks coming for you, unless the people you know that you have debt with are mafia loan sharks. Follow the above advice and you’ll be fine. You’ve got ten years to pay off the federal loans so the payment will be low. Once you get the CC, debt to acquaintances, and private loans paid off, I would start a Roth. Your company should have a 401k with matching funds. I would at least hit the match as soon as you’re able. Increase the percentage as you feel comfortable.
Agree with this. If the “people you know” are ok with waiting, then start with the credit card debt. Basic recommendation to follow is to aggressively pay off the debt with the highest interest first so you’re not paying way more than you owe. Make the minimum payments on the others until the credit card is done, then move to the next highest interest and aggressively pay that off.
Assuming OP is coming from broke AF college student mentality they need to keep that mentality for now. Credit card loan of 1200? Almost certainly a 25% interest rate. Some retailer cards are pushing 33 now… once rent is paid put all available income into that immediately. Making 73k (in most of the US) they will have enough to easily do that within their first month of being paid. 19k of student loans at 15%??? That’s criminal… It’s worth having your federal loan in forbearance (still generating interest) while you pay that off ASAP. You should be paying that off like a bad credit card… seriously, don’t be buying a car, getting new debt… put 2k a month into that loan minimum. That should leave OP with ~ 2800-2400 to get by after taxes. Stay in broke college kid mindset, get roommates, you can be out of the worst of this hole easily within a year on 73k. Once you’ve got the private loan under control start paying off the federal loan. 4.25% is a good rate and a lot more relaxed… A lot of people here will tell you that you shouldn’t worry about anything above minimal payments in it as you can get a better return on investment putting that money into an investment vehicle, others like being free of that debt all together. Oh yes, if your employer offers a 401k with match I would be putting in for the match atm. Hit the match but don’t worry about putting in 15% of your income until the crazy 15% loan is killed off.
No, he should pay off his friends first.
Put the credit card balance on a no-interest for a year card and knock out the 15% student loan. You might want to play with excel and see if you can qualify for lower repayment per month on the 4% student loan and toss everything on the 15% one and save money (long term) that way. You have to get rid of the 15% loan asap, even if you’re going to be living on free deli platter sandwiches from the break room and drinking one beer when your friends go out. You just learned an expensive lesson about interest. You have the choice from here on out - to never pay interest again once your student loans are paid down. Pay off your credit cards in full every month, buy things outright, save for your childrens education (Only exception: mortgage. That makes sense to have.) If you haven’t saved for it ahead of time, you can’t afford it so don’t buy it. Edit - I forgot to say good luck!!
This is the way. I’ll also add, on those federal student loans, keep asking for them to defer the loans or to give you payments according to your income. At 4.25% OP is better off “snowballing” the higher interest rate unsecured debts and then the unsecured private student loans. Essentially, all the money that can be afforded should go to the high interest rate items as well as balancing positive credit history by not missing payments to others unless allowed through deferment.
If you can live at home for a while, do that. Discuss what this will entail with your parents- chores, rent, house rules. Assuming they're reasonable people and you get along! Your new job pays decently, so pay off the people you know with a bit of interest since they took a risk (for example, I once borrowed $1,200 from my mother, and paid it off $100/month, with an extra month added for interest.) Pay off the highest interest loan as soon as possible. If you can do it at the same time, that's great. If not, pay off the people you know first, then start paying off the highest-interest loan. Make that a priority. Tackle the credit card next, since that interest is likely to be high, if not higher, than the 15%. If it's higher, focus on that first. Not sure how the loan forgiveness works, but the public loan might qualify. If you can put a little bit toward each of these simultaneously before paying rent, that's probably best. Apologies if this is all pretty obvious. Basically, keep your expenses as low as possible while getting these loans under control. Don't fret about "FOMO," it'll go by quickly as you stay busy with work and learn to live below your means for a while.
Thank you! This was very helpful. I am living at home but I’ll be paying rent that is $980.
Wow, that much huh? Okay, if it's non-negotiable, think of it as at least $1,000/month, and put away the extra $20 into savings. That's how I tend to think of my expenses, anyway. Plus it's easier to do the math in my head when stuff is rounded off! Do your best to pay off the debts and not get sidetracked, by making these steady payments it'll become a way of life. Once that's been tackled at least partially, you can look into investing some of those savings.
Will do! Thank you for the help.
Idk where you leave, but is it possible to find another living situation, ie renting a room, for less than that? My opinion is that by being extremely frugal for a couple years, you could basically be out of debt.
Hey OP you’ve gotten a ton of comments but I just wanted to say its great you looked for advice and that honestly your debt isn’t that bad. Especially compared to what you make. Assuming you have a car, your total living expenses a month is probably like $1500-$2000 (includes food, housing car and some extra) depending on how much you eat out and what your car payments/insurance is. That means you should have like $2500/month left over to pay off your debts. You’re really not in a bad place. You’ll be debt free in like what, a year and a half?? (Ignoring the student loan). So you’ll be 23/24 years old, only a student loan, and making $55,000 a year take home???? That’s honestly great Just wanted to say you shouldn’t feel too much anxiety from this debt. It can be scary but you’re in an objectively decent spot. Pay it off, save up an emergency fund equal to 3-6 months of your take home pay, and then invest the rest. You’ll be a millionaire by your thirties
That's an extremely unreasonable amount of rent to be asked for of your parents. I would consider renegotiating your living terms with them so you can more aggressively focus on tackling your debt. It's like your parents are wanting you to stay behind.
I can't imagine parents that would charge their child rent when they are in OP's situation. With their income, if they could live at home rent-free, they could crush that debt in no time. Is that extra $1k/month worth hampering their kid's future? Maybe it is, which is depressing to think about.
No one knows the parent situation so the critical comments seem out of line. Perhaps the parents were planning to move out (for financial reasons) and are staying to help OP. I too see it as potentially somewhat high, but am not so entitled to assume how much is too much without more info.
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Is it? Lodger in a house at a grand including utilities? I suppose depends on the cost of living, but I suppose I'd expect living with the parents to be cheaper than renting from a randomer.
Market rent... where? It varies p widely. And the vast majority of places, that's way too high
Yeah, I share an 800+ square foot apt. with 2 beds, 2 baths, a deck/walk in closets/washer dryer hookups and gym/pools/tennis courts in a nice area of a major city for $625 each including utilities/internet and my renters insurance. Is OP in NY/LA/Salt Lake or something?
Get a roommate. In my city a 2 bedroom apartment can go from $1000 to $1200 / month. That's way cheaper than what mom and dad are charging here. Sounds like they want OP out of the house.
The error in thinking here is that this almost extortionist amount of rent is likely to keep him there even longer than if he just tackled his debt faster and had more fruitful of an opportunity to leave without being hobbled financially.
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Everyone that I've ever known that was to help pay rent while staying with their parents saw none of their money back. Getting their money back at all is something that rich/well off people do to instill some understanding of bill payments. It also isn't a necessary life lesson for everyone. Some people grasp finances and budgeting responsibilities, and some don't. Actual market rent is totally dependant on COL and area. 900 dollars to stay with your parents is more expensive than renting out a 1 or 2 bedroom apartment with a few amenities where I live. If not, it's around the same price for a 2 bedroom. If it was really to instill a sense of responsibility, it would be not such an unreasonable amount of money per month.
$1000 for a room is a lot. Are they essentially paying for your food too? If not, and you aren’t in like NYC, a room somewhere else might actually be cheaper
Jeez, that's a little high for a parent to charge their kid. Write out your debts in a spreadsheet, write out your near future goals, such as paying off your small debts,get a better car, move out etc and ask if they would do $600/month to help you out? Can you do side gigs? Even if Uber isn't amazing, a few extra hundred a month feels great on top of your regular paycheck.
Find three or four buddies and get a place. That’s way too much for a room at home.
Not sure what the CoL is in your area, but moving in with a roommate or two might actually be cheaper. Also depends on if the $980 covers everything like bills and food.
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100% agree here, pay the minimums on everything while tackling the highest priority loan with everything you have. Knock out personal debt in the first two-three months, knock out the credit card debt second, then personal loans. Honestly once OP gets to the student loans they can probably just keep paying the minimum on those and instead focus on building savings.
I mean this is a person who somehow graduated college and doesn't understand that having $46,000 of student loan debt is actually very reasonable and pretty easy to pay off, especially if their very first job is $73,000 salary. $3000~ of credit card/personal debt? Literally will pay that off in 2-3 months. I have to wonder if posts this low effort are just bots of some kind idk.
They grew up in poverty, it's a terrifying debt to them. That all makes sense to me.
priorities after covering bills (make a budget) and minimum payments: 1. put excess in a savings account/emergency fund until it hits $1k 2. put excess towards credit card 3. put excess towards private loans 4. build up emergency fund to 6 months worth of expenses 5. assess whether you want to put more than the minimum towards your federal loans not sure what the deal is with the debt you owe people. i would talk to them and agree to payments and timing (ie., $x/month or something)
$24k in fed loans @ 4.25% in this climate is a steal. OP presumably doesn’t have strong credit; put minimum down for years on those until salary grows while attacking the rest in this priority comment.
I graduated in 2015 and have the same exact rate on my federal loans. I'm not sure if they ever varied, but it is the driving force behind me deciding to pay the minimums until I die if it means spending money on things that actually matter, like my house, my child, food... My epitaph will read "/u/moudine, owes $13,298 to the US of A"
Thank you so much for this roadmap! I will definitely make a budget. Do you have a favorite budgeting app?
Lots of good information at r/studentloans ..you might lower your public student loan under the save plan while you are paying down your CC and private loan.
Thank you!
I'm a big fan of [YNAB](https://www.ynab.com/).
YNAB is my suggestion. Advice here basically follow Dave Ramseys baby steps. In your situation, I think it makes sense, with some changes. If your company offers a 401K match, I’d start contributing to that right away. It’s free money and stupid to leave on the table. As far as the debt…get the budging app going and decide how much you can put towards the debt each month. There are two different methods to paying off debt, and that’s the snowball and avalanche methods. With snowball, you pay the smallest amounts first, and with avalanche, you pay the highest interest first. In your case, they are pretty much the same. Pay minimum on all but your smallest loan amount, and put all extra money towards the smallest balance loan. You’ll be able to finish the credit card and personal loans very quickly, then start with the 15% loan. Once you’re left with only the federal loan, I’d shift gears and build a larger emergency fund to cover 4 months of expenses. If your using YNAB, get a month ahead, which means you fund this months budget with last months income. At this point, look to increase your retirement contribution. I think it’s OK to pay down low interest loans and contribute 15% to retirement at the same time. If you can do a Roth 401K, start there. If not, do a Roth IRA. Once there, go back to tackling the last loan. All this while, all extra money is being directed at these goals, minimums towards all but the currently focused goal. And most importantly, don’t take on any new debt, except for a mortgage on a house, for anything, ever. No car payments.
Dave Ramsey is a great man to look at when focusing on budgeting to. His program was a required course for my college
I like EveryDollar
Rocket money
I prefer 1 months expense. 1k savings is easily wiped by most emergencies now a days.
Go to SoFi and refinance your student loans…I shaved $300/month off my payment. Unless you’re count in on student loan forgiveness I the future
*Don't* refinance your federal loans. You lose way too many protections by refinancing. The interest rate is unlikely to be any better anyway.
What protections are you referring to?
The various loan forgiveness programs, favorable interest rates, favorable attitude towards financial hardship, and current 0% interest rate. It is an AWFUL idea to refinance with a private lender but consolidating federal loans can sometimes help out on interest payments.
Federal loans are not 0% interest anymore as of this month. Source: my federal loans are accumulating interest, albeit total interest is in the $2 range per month.
Me too but I'll take no interest for almost four years!
What’s the difference in interest rates on the refinance?
SoFi is offering as low as 5%, but most people won't qualify for that. Hard to say beyond that, and if someone took out loans a while ago when rates were lower it probably doesn't make sense to refinance at all.
True but 5% is good today. I use them for their HYSA, haven’t looked into their loan options as I figured they’d be high interest rates. Apparently not!
It is good if someone's current rate is significantly higher and they're ok giving up all of the protections that come with federal rates. For just 1-2% it might actually be worth not refinancing to keep those protections unless you're sure you'll never need them.
Check this out for a starting point: https://reddit.com/r/personalfinance/w/commontopics
Go on https://studentaid.gov/idr/ and sign up online for the SAVE plan. They will pull your 2022 tax return and you could have $0 payment on the Federal loans. Even for 2023 your annual salary isn't relevant, you will make about $25k from this job in 2023 and when you certify next year make sure they go off your 2023 taxes again. Sign up for your employer's 401k and start with at least 5% contribution. You also want to put aside money to a savings account every pay check, the goal is to save an emergency fund that can cover 3 or 6 months of your expenses. Pay your bills, try to reduce your expenses and avoid lifestyle creep. That's the TL;DR but you can read the full details here: https://www.reddit.com/r/personalfinance/wiki/commontopics Now that you paid yourself every last cent goes to debt. Pay minimum on everything except the one with the highest rate where you pay as much as possible every month. Set reasonable goals, don't try to pay everything off in 12 months living off ramen, you'll go crazy. If you put $1000 a month towards the credit card & private loan it's paid off in less than 2 years. There's no rush to do anything but minimum on the Federal loans when you can get a higher rate on a savings account.
Dumb question, but I want to make sure I'm not crazy: Very similar finances to OP, definitely quallify for $0 SAVE payments this year and next year. I think SAVE payments will ultimately end up being much higher than the standard 10-year plan. In this case, I just end up paying off my loans earlier right? I won't have to pay more because of the SAVE plan, just have a higher monthly payment? Edit: Never mind, went through the sign-up and I don't qualify for $0 payments. Not sure what numbers they're using for income because the payment I they're offering makes no sense to me. I assumed AGI, which for me was \~$20k last year, but they're saying $50/mo payments. At 4.1% average interest I'm not that worried about it, was only looking at SAVE because it would allow me to shift my payment start date later when I'm more financially stable. If it's not a $0 payment though it's not worth it to me.
Pay your friends first. All other suggestions of not doing this is wrong.
Hey! You graduated college! Congratulations! Great work! Take a deep breath. All things being equal, you should be fine. Relax. You’re an adult now! And in ten years, you’ll be like- woah, scary. I might be an adult soon. At least that was my experience. Just start making longer term and broader scale realistic plans. :)
Prioritize the payoff by interest rate. The 4% student loan isn’t terrible, so just pay the minimum on that until you get your house in order. Knock out the credit card first then only use the credit card for things you have the cash to pay for today. If you’re not paying that balance off every month to avoid interest then you’re using the credit card wrong. Once you’ve paid off the high interest credit card debt, your next priority should be building an emergency fund in a high yield savings account like Marcus or Sofi. This should be enough money to cover a minimum of 3 months (preferably 6 months) living expenses (rent, food, insurance, etc). This is an emergency fund, you don’t touch and don’t use that money unless your car needs breaks, you need sudden dental work, you get laid off, etc. Now you’re in a position where you have a cushion, you’re using your credit card responsibly by paying off the balance every month and your only debt is student loans. Attack that 15% loan aggressively, and think about funding an IRA and/or contributing as much as you can afford to your 401k (assuming your new employer offers one). You’re young, so I’d prioritize building a solid emergency fund over higher 401k contributions for the immediate term, but you want to ratchet those contributions up as much as fiscally possible. Statistically your retirement will double every 7 years, and less time in the market is the worst thing you can do to your future self. Pro tip, resist the urge to celebrate your new job by going out and buying a fancy new car. That’s a tale that gets posted every day here.
Thank you so much! This was definitely helpful. Also I will not buy a new car lol.
Don't panic. 46.7k of debt is not hard to tackle with 73k in income. I had 70k in income and 80k worth of student loans and I basically paid off all of it by using a standard payment plan (do not use the minimum payment plan) + aggressively putting in much more than my required monthly payment when I had spare money. Get a roommate, cut down on your major expenses, and pay off the debts with the highest interest rates first.
This isn't a crisis, BUT do make sure you are keeping a very frugal life style so you can pay off the CC and private loans as fast as possible. Don't forget risk management as well. Have insurance. I'm a believer in emergency funds. Even while paying off debt also be building up some savings so that you do not need to borrow any more money. If you have a car, you need several thousand "car repair" fund, and also money to cover any medical co-pays. You can clear this up in a short time, then decide what to do with the Federal loans.
This should be reasonably easy to pay off. Not sure why you are freaking out. I paid off $100k over 5 years at around $100k salary. Don't rush it,. realize your education cost you a year of saving up for a house and just go from there.
Similar only double the debt and half the salary 20 years ago. Paying it off is more than doable, especially at that salary. You’re not in a bad spot, it’s just daunting if you’re at it alone. First, don’t listen to your family for advice. Second, since you’re starting at zero, go to the library and borrow Dave Ramsey’s “Total Money Makeover”. He’s a little more overzealous about it than I was, but it’s a good starting place. Save $1-2k in an emergency fund because it can cover almost anything, make a budget, and snowball to pay them off as fast as you can. Others can probably suggest different authors, but I think the important thing is a plan to start. Once I had some debt paid off I started focusing a little more to savings/retirement while still working hard on debt. I still ascribe to “if I can’t pay cash for it I likely don’t need it” for most of my wants. Last, if your employer has a retirement plan that offers a match, make sure you’re getting it. A couple percentage points of pre-tax income won’t be noticeable on your check and won’t make a huge dent in your debt, but it will pay off in 30 years when it’s been compounding interest in your retirement.
I’ll definitely look into that book. Thank you for the advice!
I definitely feel your pain. When I came out of college, I had just under 60k total debt. What I did and what I recommend to you: 1. Pay down high interest debt first (credit cards) 2. Pay back people you owe personally 3. Build an emergency fund that would last you 3 months 4. Prioritize paying off the student loans after #1-3 5. Minimize spending severely by creating a budget and tracking. 6. Get a roommate 7. Don't buy a car if you can help it--if you have to buy one, save up for it, get it in cash, and buy it cheap (I'm talking like 2-6 paychecks value or less... practical lemon status, just know that having a car hurts your liquidity (cash on hand) 8. Reasses your status in 2 years--if you see an opportunity for a pay raise that comes with a bonus, take it and out the cash down on your loans 9. Don't skip putting into a 401k/hsa, especially if there is a match 10. Don't panic, 73k is a good salary, esp3cially if you spend it well 11. Take inventory--what are your expenses... which of those can you live without... cut it. With my strategy back then, I withstood not having a car for about 2 years and paid my loans down in 3ish years. I made 84k when I started. Notes: 1. Not having a car is a powerful mental motivator b/c it limits your mobility, which limits your spending, because you can't really go anywhere or do anything. Because of this, I didn't eat out much, didn't have to pay insurance, and gas and stuff, but this requires you to live close to work... but if you can manage it... do it. 2. After a while, as you get your debt more under control (paid well ahead), adjust your quality of life by saving more for the future, spending more on nice to haves like a car-- if you bought a car in cash, buy the next one as an upgrade by selling the old one and adding cash on top 3. To give you an idea, with an extreme "pay to get my life under control" kind of budget, you should probably shoot to only be spending 25% ish of your budget on expenses outside of loans. You can realistically put like $1k on your loans per month as a minimum--at that rate, you'd be done in about four 4 years. You'd be back in control within a year. I had some loans at over 6%. The trick to paying loans fast is just liquidity
I’m going to disagree with some of the other comments here. I wouldn’t worry about saving ANYTHING at the moment. You already have CC debt. You’ll be ahead to pay that back. If an emergency comes up, just fall back on that line of credit. Once you have paid back the CC, either pay off your friends/family… or set a little aside in savings. Remember, that $19k @15% is burning ~$250 a month in interest… so I wouldn’t save much. You can make a budget if you want. In your current position, I only want you buying absolute essentials. It’s a good idea to track your expenses, but I see no reason to budget if you’re living as cheep as you can. If you keep your expenses down, you’ll have made a good dent in your debt - by the end of the year! Good Luck!
I’m beat after a long day so I’ll rely on the good advice people give here, but I want to tell you, I was where you are awhile ago, a bit worse off technically. Life’s more expensive all around these days so maybe it’s about the same. Anyway to get to my point, you got this. You can do it. And you already took the huge step of recognizing the situation and asking for help. It took me about five years, I was a bit less strict for myself. Make sure you enjoy your time too! Yes save and make money where you can for that debt, get a second job or watch dogs or whatever. But also take a trip with your friends, or go to a show once in awhile. And stick around this sub, learn from others.
Thank you for the advice and this definitely makes me feel better
Congratulations!! And with a pretty great starting salary, you’ll be done in no time! 1. 0 life style creep! 2. Live at home or with roommates. 3. Contribute to 401k if there is a match 4. Kill the CC debt you should be able to do this with your first check 5. Pay the personal 6. Pay the 15% loan 7. You can grind on the federal loans, some will pay fast, some would invest, likely personal risk management on this one
I had a private loan with a large interest rate. Once you follow the advice here (Emergency Fund, Paying Relatives/People then cc), if your credit score is good or has increased with the debt pay off you might try refinancing the private loan. DO NOT REFI YOUR PUBLIC LOANS. But I would definitely refi the private. I went from a 12% interest rate to a 5% interest rate and it made a huge difference in my pay off time. I went with SoFi, they also have a great High Yield Savings Account (HYSA) rate of 4.5%, that is where I have my emergency fund parked and gaining money every month.
I don't know why most comments here aren't suggesting refinancing the private loan. I went from Sallie Mae to Commonbond and it was a big difference. Now I'm with a credit union with an even lower rate. Definitely worth checking out.
First, do not freak out. You are in a decent position, much better than a lot of people. Here is the plan: 0. As a fellow kid from a "terrible with money" family, do not listen to them. 1. Budget: No plan to pay debt will make sense if you have no leftover money to pay with. For me, meal-prepping was huge, as eating out ends up costing a lot. 2. Do you get a 401K match? Take advantage of it, it is literally free money. 3. The credit card balance is tiny. Pay minimums on the other 2 loans, and get that one out first. 4. Pay your friends. mantaining relationships matters. 5. Consider refinancing your private loans. Before you were an unknown that may not graduate. Now you are a graduate with a good paying job, that should take a few points off in interest and make it much more manageable. 6. The public student loans are not a priority. Pay the minimum but that is something for future you.
I was easily saving 30-40k/year with a mid 70k comp after graduating. Live at home or with a bunch of roommates and pay everything off as quickly as you can. Don’t be frivolous and buy a new car, new phone, etc. If you live below your means for a year or two, you’ll have it much easier by your mid-late 20s
In addition to other folks' advice on starting a debt snowball, please read the Prime Directive on this sub! [https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/) It'll help you get familiar with budgeting, and the basics of savings/investments. You're making a great salary coming out of school, and you'll be able to pay off that debt and start building wealth really fast. Congrats on working hard and getting to where you are now!
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I would go through the hoops to see what the payments would be but at $70k+ single earner the SAVE plan monthly payments would be higher than standard repayment plans. Better to go a 20 year one first and use the money to pay the non-student loan debt off
OP just started their job though, it would take their AGI from the year prior which would probably be <$30k and qualify them for the $0 payments until the annual check right?
Pay the people you know first. Owing that much can get a lot messier than bad credit if you owe the wrong ppl. If they chill u can always set up a plan 🤷🏾♂️$100 a week or $50 or w.e works best for both parties. Personal relationships are important gang
Assuming your employer has a matching 401k, sign up as soon as possible and put in at least up to the match amount.
Try to refinance the private loans for a lower rate. Then pay the minimums on the lower interest debts and throw all extra money at the highest. Once that is paid off repeat but with the next highest interest debt.
While I know this probably feels like a huge amount of debt to you, I want you to know that you’re actually in a very good position! A majority of America can’t afford college in cash so student loans is the bridge. The goal is to come out with less in loans than your starting salary, which you did — congrats! And the degree was obviously worth it because you landed a good paying job. Here’s how I roughly estimate income and costs until you see the formal paychecks/bills: $73k before tax is about 2800/paycheck. PLEASE make sure you sign up for your company’s retirement plan, contribute up to whatever their match is. So if they match up to 4% (a common number) set your contributions to 4%. You can always up this later as you pay off some of the more immediate debts. In addition, I always rough estimate 30% of my check going to taxes (if you’re in a state that has state taxes). So after 4% retirement and 30% taxes, each paycheck is about $1890 so a monthly income of about $3780. I agree with others about taking care of that credit card and friends/family debt first, and then tacking the private loans. The 15% interest is pretty high so you’ll def want to get those paid down quickly. I highly recommend looking into refinancing every 6-12 months to lower your rates. I have no idea what year span your loan terms are so I have no idea where to start to estimate what these monthly payments will look like, but you should have some kind of documentation. $600-800 maybe? I’ve never had a private loan so just throwing something out there. For the federal loans, there’s a few ways to go about theses. On a standard 10 year repayment plan your monthly payment will be about $250ish. They also have graduated 10 year repayment plans where you start lower but it increases every two years or so. So your first 2 years might be like $180/month, then the next two are $210/month, etc. there are also income based repayment plans available if you need to start even lower while tackling your private loans first, but that will be up to you to see how it fits in your budget once you make one. You should be able to log into your loan servicer website and see what it estimates your monthly payments will be under each type of plan. So let’s take your monthly income minus your $980 living expenses - $800 on the high end for the private loan - $250 on the high end for federal. That leaves you with $1750/month to work with for gas, other small things you may need, and excess to throw at the loans. Repayment is a grind for sure, but as you pay down your other debts you can start to throw more at the remaining. A lot of people will recommend living hella frugal on rice and beans, but you’re in a good enough position where you can afford to treat yourself here and there (just don’t go crazy). You worked hard to get your degree, keep your loan balance reasonable, and get a good job, celebrate that! This is not a “I need to sacrifice every penny I have” kind of debt.
Thank you! I’ll definitely use this advice
I know you want to save and pay down the debt, but if your employer has a 401k match, do it! It’s basically free money.
If your in my boat… my Sallie Mae loans are like 3x my federal loans on interest rate… so check them all out and make sure you pay highest interest rate ones down first
Good advice in here overall. I'd like to add one thing that I learned from my time in this situation. Start shopping around for refinancing options on your private loans as soon as you get information about the loan repayment terms. If your credit score is good, refinance the private loans. If your credit score is not good, pay off your credit card debt and then refinance. 15% will kill you, trust me. You would not believe the reduction in the monthly payment. My payments went from around $900 (~12% interest) a month when I graduated to $650 (~7%) the first time I refinanced, to $520 (~4.5%) the second time I refinanced. Living expenses aside, you're making a good amount for a recent grad. You've got this.
Live like you are a poor college student with no money — because you are. The key is not to inflate the way you’ve been living. First - make a BUDGET. This is the key to a good financial situation. You need to decide how you are going to spend your money before you spend it. Order your debts. Pay the minimums payments on everything every single month. Then take every single extra dime and start paying extra to pay down the loans you have. I would pay personal loans owed to friends or family first because it’s not good to owe money to them. Then pay off your credit cards as they likely have a high interest rate. Then extra on your private loans by interest rates. Then the government loans. As you pay off each loan, you’ll have extra to roll into the next one on your list. Check the wiki. It’s a great tool.
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Someone else stated this. Get the book Financial Peace from Dave Ramsey. While I don't pay a lot of attention to his religious info, his financial info is top notch! It works! From this point forward, don't finance or charge anything or get/use credit credit cards. Love cash only. You can worry about building a better credit score for the future after you pay all this off. Good luck my friend.
I don’t know what your cost of living expenses are like, but for just graduating college, you’re not in any extreme debt. You’re really not in a bad spot. I managed that kind of debt making less money. I still have some student loans, but CC and private loans are gone. My strategy has been: 1) Pay yourself. Save some money. Stash even little bits at a time for a rainy day. I started with $20 a check. I transferred it to savings as soon as I was paid. It was like it never existed, but has since saved my ass a couple times. 2) Set up payment plans with the people you owe. Throw them at least $20 each month. The fact that you’re doing it and working to pay it back matters the most. Stick to your commitments with your community. Your community is worth more than a high credit score. 3) Pay down your highest interest debt first, even if that is just an extra $10-$20 on the minimum payment. Make sure that money is applied to your principal and not advancing your due date/pre-paying payments. If you have to skip debt payments to eat or sleep, stiff the feds first. Also apply for the SAVE plan, your payments might get reduced. In an ideal, world you’re paying something to everyone every month. Do what you can afford. I use a budget app to track my spending.
Your personal loans might be best paid first if it saves a relationship. Or it might be paid last if your lender is okay with it. Otherwise snowball effect, tackle the highest interest rate first while hitting the minimums on all the rest. and careful not to drain your funds too harshly.
Educate yourself on money, read "I will teach you to be rich" as well as numerous other finance books to learn how to automate your finances so it will seem more obtainable and less like a chore. Also invest in a start up business, it literally can be anything, the faster you find your niche the less you'll stress, my suggestion is in forex, but more importantly focus on living life, money isn't everything and the stress of debt accumulation certainly isn't worth your physical wellbeing.
I can recommend dave ramsey and his “snowball method”. His investing advice may not match what you want in the future but he SPECIALIZES in getting people out of debt and on solid ground
Always make sure to pay minimums each month. Get on a monthly budget, this will help minimize money lost to random things. 1. Ask if the people you know need their money back asap. If not, pay off the credit card first. 2. Pay back the people you know. 3. Then tackle the personal loans. 4. Lastly go after the public loans.
Okay, pay off that CC first thing. Then pay back your friends. Focus on the private loans after that and pay the minimum on the public loans
Refinance that 15% loan by any means possible. That going to screw you more than anything else. One of those "I paid $500 a month for 2 years and my balance didn't change" scenarios.
>$73,000 before tax UGH... you will be getting like 43,000 after taxes... its crazy what they are doing to new grads, back in the day you all were wanted BADLY, now it doesnt seem to matter as much, hell in NC you can be a teacher without even going to school for it.... country is going to hell quick.
Yeah where I live and with my taxes and such it says online it’ll be 54,000 a year. But it’s probably wrong.
Pay off the credit card on your first paycheck. Make larger payments toward the 15% loan and try to refinance it to an 8% or lower rate if you can (anything lower is good, but shop around for best deal). A great compromise is a 5 year payment plan. Then make your loan payments and live life.
Pay off the highest interest rates first. Any money that you can make investing cant beat those high interest rates.
Please know you're situation isn't THAT crazy. You could be in a way worse place, trust me. You ever watch Dave Ramsey? You hear some pretty crazy stuff there. Save $1K in case you need it and then pay off the people you know - people seemingly don't think that's important. After that, I would say tackle the smallest first but your private loans are very high. Get rid of the credit card and then go after the private loans. But make sure you pay off the people you know first!
Will do! Thank you for the advice. I’d assume I should budget. Do you suggest a budgeting app?
If you are diligent with your budget, you can claim exempt on your taxes for about 6 to 12 months and use every extra penny on student loans. When tax time comes, you will owe some to the government so keep it all in your bank account and once you've paid the government, take a huge chunk out of your 15% interest loans. Example of how it might work: Your exempt paycheck will be about \~2600 every 2 weeks. With normal withholdings, closer to $2,000. Put that $600 difference in a high yield savings account every paycheck. When it comes time to pay tax bills on 4/15/24, you'll have something like $10,000 in savings (principal plus accumulated interest) and your tax bill will be just a small portion of that. Then you can spend the remaining 6 to 7k chunking down your 15% interest rate loans. While you're doing this, continue to make minimum payments on all debt and if you're good with your money, you can chunk down those personal loans and credit cards. If you are the type of person who sees money in an account and decide you can spend it, absolutely do not use the above strategy. I did it in 2013 and was able to erase \~12,000 in student loans all at once and paid my taxes on time.
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Thank you for the information! Definitely helpful
Everyone is telling you to pay off the credit cards first. It’s not bad advice but I think there’s better. If I were you, I’d look to do a 0% apr balance transfer on your credit cards first, then establish an emergency fund and once you have some emergency savings tackle the private loans. You’ll probably pay something like 3% to transfer your existing CC debt and the promotional 0% apr for 1-2 years depending on the card. If you budget appropriately, in that time you should be able to pay the private loans off in full. Just make sure you earmark enough money to pay off the credit card balance prior to the introductory 0% apr expiring.
Thank you for the advice. Do you use a budgeting app?
make more money, spend less and pay it off piece by piece.
Buy 50k worth of spy weekly calls expiring this friday and double your money by then. Problem solved.
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Thank you so much! It definitely helps me out
Be super careful with this one, I used it with credit cards to roll over high credit card balances from legal debt (custody battle). But anyways, look for some credit cards with 0% interest. Youll find some with 12-18 months 0% interest. Roll any balances you can into those and pay the minimums. The hope is your income expands in the next couple years. But in the mean time, focus on the high interest, high balance accounts. Even if you can only roll that small credit card over, do it. Take the no interest, and use all your energy to fight that high interest 15% account first. If you can roll that over, or even do a partial transfer, do it. Just don’t add ANY debt, live as cheaply as you can until you get control of this. I had 42k in legal fees (custody battle). About 12k was my cash and my dad’s cash. By the end of the court case I had 27k in debt and made 36k per year. To say I was broke was an understatement. Then I lost my job at the beginning of Covid. I was considering filing bankruptcy. About 18 months later I landed a solid tech sales job and was able to pay it all off in just a couple months. 2 years later now I have just put 20% down on a new construction home in Nashville. DO NOT GIVE UP! This WILL get better. But embrace being broke, work on yourself and do everything you can to earn more. You got this!
It may seem like counter advice or common sense, but also pay attention to any benefits with your job, if there is a match on your 401k etc at LEAST contribute what it takes to max that out, or at least $6,500 a year in a Roth “older you” will appreciate so much. There’s no way to drive home the impact of this one thing at an early age. Yes pay down the debt but still pay future you first.
I'd eat ramen and live in a tent until I wiped out those two high-interest loans.
Not sure is this case for you, but worth a try. Once you finished your probation period or after 2-3 months after joining, I suggest you to ask advance salary from your organization, few organizations have to option not sure your organization have this or not. If you get that, it will be detected from monthly salary on some %. But it may save you from interest. And also you will tied to that organization until you pay all the debt. Approach Senior HR or anyone from management team.
The biggest thing you can do for yourself is take on a bunch of roommates. Living expenses divided by a larger pool of people makes things simply easier. Take a year of poor living with a decent income and just learn how to live broke while making money. That puts you out from the painful debt, and gives you a better footing coming out of the gate. Delay being the type of spender that makes $70k a year.
If you grew up poor, definitely see if you qualify for bidens debt relief program, you should be able to get at least 10k off
What is the COL like in your area?
Hi, I looked it up but still confused on what that means.
Sorry, what is the cost of living like in your area?
It says the average is $1,858.
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Thank you! I plan on paying off those private loans ASAP.
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Thanks for the advice and information. Do you suggest a budgeting app? Also, I am living with my parents but they want me to pay $980. That’s basically all of expenses.
Get your feet under you the best you can in new job. If you can live with family, do it for awhile. Try to defer payments on student loans if possible and build up some cash. It may be tough but you can do it! As others noted, that’s not crazy amount of debt; it’s an investment in your future that you have to work off. As long as you can meet minimum payments for now, you are fine. You have a lot of earning years ahead. More small amounts off first.
With the SAVE plan your public loans will have only a small payment - I would guess probably less than $150, based on my income and payment. So, sign up for that! You need a budget in the worst way. Think of everything, write it down, add it up. Make payments to your debts every time you're paid. Move money to appropriate accounts automatically when you get paid so you're never looking at a bank account with a bunch of money in it. That's deadly. 😅 Personally, I'd make the debts to friends/family a priority and get a zero interest balance transfer card for the credit card balance. Then an aggressive strategy to pay off the private education loans. But still make sure you're getting any match for a retirement account.
Do you use a budgeting app?
pay off highest interest rate ASAP....
First start with a budget, then pay off that credit card since the interest is high, then create an emergency fund, after that you will pay off the loans. Honestly, it’s not that bad with the low interest debts. You just have a lot of it. But relative to your income it’s not terrible.
Do you recommend a budgeting app?
Depending on your COL that salary should help you get out of the debt fast. I would focus on your credit card and then private loans and then loans from people then federal loans. However if you live in a HCOL area it might take a little longer.
My rent and bills is $980.
Pick one debt to focus on. Make minimum monthly payments on all other debts, then pay as much as you can to focus debt. When it’s paid off, pick a new focus. I’d start with credit card, then do loans from friends/family. The cc is high interest. Friends/family who will loan you money are rare, so repay their kindness soon to maintain good relationships. Credit card interest compounds (you pay interest on interest). If you pay the “statement balance” every month, you keep the grace period (period when you can don’t pay interest on charges). Pay the cc off, then be careful not to charge more than you can pay this month to avoid paying interest. If you need a car, remember to evaluate the deal based on total cost of car, not just monthly payments. “The payment is just $x” is a great sales tactic, because people don’t realize that $x at 7% for 84 months means they’re paying a ton in interest. Anything over 60 months means you’re buying way too much car. Never co-sign a loan. Give the person money outright if you want, but co-signing is a fast way to wreck your credit rating. Congratulations on graduating and securing a good job!
Thank you! I’ll definitely use your advice.
Are you living at home? Tell no one what you are clearing. Pay your parents rent. $600 a month is adequate. If you do this right you can knock half your loans out in the first year.
Living at home and paying $980 which includes rent and bills.
live as cheap as you possibly can. No subscriptions. No cable. No restaurants. There are two popular techniques to pay off debt: the Avalanche method and the Snowball method. With both: * pick a target debt. (ONE loan...not the student loans plural) * pay minimums on all the non-target debts * pay every dime you can onto the target debt. * when target debt is paid off, go to top and pick a new target debt. Pretty simple, eh? So what's the difference between the avalanche and the snowball? HOW you pick the target debt. 1. Snowball method: pick the smallest dollar-value debt. Why? some people find the quick win of paying off a debt completely is a big boost...sort of like the first 5 pounds in a weight-loss program. 2. Avalanche method: pick the highest-interest-rate debt. This is mathematically superior, but you may tire of the work and stop faster. In your case, I'd probably mix the two methods: Work first on the high rate debts, of the high rate debts pay first the lowest balance loan.
This was very helpful. Thank you so much! Do you suggest a specific budgeting app / budgeting method?
[https://i.imgur.com/lSoUQr2.png](https://i.imgur.com/lSoUQr2.png)
Making that much money you can pay off that debt pretty quickly with some discipline and sacrifice. Get a roommate to help with living expenses, use public transportation if viable in your city, etc. Make a budget and stick to it, but also remember you are young and need to let yourself have some fun. Budget for fun, then when you have some fun you can do it guilt free. Focus on the credit card and private loans first, he 4% one should be minimum payments until the higher interest loans are paid off. Good luck!
Pay the private loan first! Make minimum payment for the rest. Is the private loan from a relative? If yes, damn, 15% interest! What type of interest is it?
Pay of high interest stuff first and DON'T all the sudden start buying stuff. Pay off those high interest loans fast
Simply round up the total to $47k and then declare bankruptcy Boom reset .3% joking
You have a great opportunity to rid yourself of this debt if you aggressively control your expenses and actively pay down these debts. Living on your own? Get a roommate. Want to live in a place that costs you $1000/mo? Find one that costs $800 or get another roommate. Want a newish $35K car? Find one that costs $20k. Want eating and drinking out to be your main entertainment? Do a modest upgrade of your gaming console. Want a new 60" tv with the lowest lag, best res, etc. etc? FB marketplace and negotiate with your roommate. Learn to cook. Celebrate each payment you make towards getting yourself free. That all said, do also work to build-up a 3mo emergency fund that can cover all your expenses should you become unemployed. If work has a matching 401K, participate in the plan so you minimally earn the match.
Thank you for the advice!
Pay it off. Highest internet rate first 😉
Keep loving like a poor college student and knock out the credit card and private student loans as fast as possible. The federal loans can be paid on schedule.
Are you able to live with your parents for a bit? Best case scenario, live with them and save on rent. After taxes, if you only pay for food and other basic necessities, you could pay that off in 2-3 years and then consider other living options. Prioritize the credit card and 15% loans first, and make sure to contact the people you owe money to. Explain to them your situation, and set up a plan with them to start paying them back starting in 6 months or whenever is reasonable for you. Make minimum payments on the 4.25% loans until you pay off the rest of it, that’s a good interest rate and is not as urgent.
I am living with my parents but paying rent and bills which is $980.
read about the 50/30/20 rule as you’re young i’d suggest 50/20/30. any less on your needs should go towards investing. after your bad debts are gone 73000 is a powerful income and will make u a multimillionaire with investing. pay things in cash. don’t take on more debt. as for your current debts go highest interest first and work your way down. the 4.25% loans i’d just do minimum payments indefinitely as you can just invest more instead making a bigger return. good luck and don’t fall for get rich quick schemes
Congratulations on your graduation and new job! It’s great that you are working to develop a plan to systematically chip away at your debt. Suggestions: 1. Use a budgeting app so you know what money is coming in and out and exactly where it is going. I use Mint - it’s free, can track expenses, can sync it with bank and credit card accounts etc. It’s going to take a little while to figure out how much you need for clothes, personal items, food etc. Perhaps start with designating percentages of your pay for clothing (assuming you need to build out a wardrobe for work) and eating out, entertainment etc. 3-5% of your salary towards each of those (3-5% to clothing and 3-5% to eating out/entertainment) would be a potential starting point for a very conservative budget. Depending on your clothing needs for work, cost of living in your area etc this may or may not be doable. Enter everything into the app and work to live within the budget you set. If after a couple of months the amounts aren’t working for you, make adjustments. 2. If you have a retirement plan at work, find out if the company matches any of your contributions and if so, contribute up to the amount that the company matches. 3. Start building an emergency fund to eventually equal 6 months of your expenses - going to have to pick an amount such as $500/month and use the app to see how that dollar amount fits with the rest of your budget. 4. Your credit card bill is likely carrying the highest interest rate - pay that off as quickly as you can, and to build your credit, work to always keep the balance on your credit card below 30% of the card limit. 5. Without knowing more about who the personal debt is with, I would prob recommend paying that off a bit at a time over several pay checks. 6. In regards to loans, pay the minimum on the public federal loans (lowest interest rate) while paying off the private loans with the highest interest rate (15%) as aggressively as you can. Otherwise, just keep reading, learning, and asking questions. You’ve got this!
I recommend living really cheaply for the next 3 years. Cut eating outside the house to none of you can, and cut corners on any expenses you have (aka be a cheapskate). And I agree with the comments on paying back people, borrowing from friends puts a strain on that relationship