'I was never taught how to manage or even fathom saving money': I have multiple credit cards, a car loan, and a mortgage loan. How can I get back on track financially?

Hey Money Minder,

So, I’m 27 and bringing in 50k a year. My savings account holds about 7k, but I’m afraid to touch it.

I’ve got a 401(k) and a HSA, but my son’s always in the hospital, so that takes up most of the HSA money. I’ve also got some stocks and ETFs worth $750 that aren’t really bringing in dividends because I spread my investments all over the place instead of focusing on a few. I want to start managing my money smarter. Got any tips?

I never learned how to save or manage money, so I’m starting from scratch now.

My bills include:
– Mortgage ($650-700)
– Insurance ($140)
– Cell phone ($140)
– Babysitter ($200)
– Water & trash ($200 every 3 months)
– Electric ($150-200)
– Energy bill ($130-170)

My current debt includes:
– Credit card 1: $750
– Credit card 2: $250
– Credit card 3: $46
– Credit card 4: $75
– Credit card 5: $374
– Car loan: $30k
– Mortgage loan: $84k

Thinking about selling or renting out my house, but with a mortgage that big and rates like these, who could afford it?

Thanks for your time,

Response from THE MONEY MINDER:

Hello There,

I’m sorry to hear about the challenges you are facing with managing your finances. It’s commendable that you are taking the initiative to learn and improve your financial situation now.

Given your current expenses and debt, it’s crucial to prioritize paying off your credit card balances. Start by tackling the debt with the highest interest rate first while making at least the minimum payments on the others. Consider consolidating your credit card debt into a lower-interest personal loan if possible.

Since you have some savings in your account, consider using a portion of it to pay off some of your credit card debt. This will help you save on interest payments in the long run. It’s important to keep a portion of your savings as an emergency fund, preferably about 3-6 months’ worth of living expenses.

In terms of investments, consider reviewing your portfolio and reallocating your investments to reflect your financial goals and risk tolerance. Diversification is important, but it’s also essential to have a clear investment strategy in place. Consider seeking advice from a financial advisor to develop a solid investment plan.

Selling or renting out your house could be a smart move to reduce your mortgage burden, but it’s essential to carefully evaluate the financial implications and market conditions before making a decision. Explore all options and consider speaking with a real estate professional to understand your best course of action.

Ultimately, managing your money effectively requires discipline, planning, and seeking professional advice when needed. Take small steps towards your financial goals, and remember that consistency is key. All the best from THE MONEY MINDER.