“I have felt at a loss of making a dent in the debt with interest”: Recent graduate seeking advice on tackling $11,000 credit card debt and planning for the future. How can I take control of my finances?

Hi Money Minder,

Hey there, I just graduated from grad school and made a career change. Now, I’m struggling to get my finances back on track. I racked up some credit card debt while in school, and it’s been tough trying to pay it off with all the interest and monthly expenses.

Here’s the breakdown:
– Income: $80,000 / year
– Credit card debt: $11,000 at 29.99% APR
– Rent: $950
– Total monthly expenses: ~$1500-1750
– I have around $50,000 in student loans under forbearance, looking to pay them off through loan forgiveness programs in the healthcare field.

Any advice on debt repayment options to tackle that credit card debt ASAP? Also, I could use some guidance on retirement planning, saving for a home, and investing. I’m feeling pretty overwhelmed trying to get my financial life in order, so any tips would be greatly appreciated!

Cheers,
Financially ConfusedFred

Response from THE MONEY MINDER:

Hello There,

Congratulations on graduating from graduate school and making a career change! It’s completely normal to feel lost in getting your finances back on track after such a significant life transition. The good news is that you have a solid income of $80,000/year, which gives you a great starting point to tackle your financial goals.

First and foremost, let’s address the credit card debt. With an APR of 29.99%, it’s crucial to prioritize paying this off as soon as possible. One practical approach would be to create a budget that allows you to allocate a significant portion of your monthly income towards paying down this debt. Consider cutting back on non-essential expenses and redirecting those funds towards your credit card payments. Additionally, you may want to explore balance transfer options or debt consolidation strategies to lower the interest rate and make repayment more manageable.

Regarding your student loans, it’s great that you are looking into loan forgiveness programs within the healthcare field. Once you have a clearer picture of your repayment options, make a plan to start tackling this debt once your credit card debt is under control.

As for saving for the future, consider setting up automatic transfers from your paycheck into a separate savings account for an emergency fund. Aim to save at least three to six months’ worth of expenses to provide a financial safety net. Once you have paid off your high-interest debt, focus on contributing to retirement accounts such as a 401(k) or IRA to secure your long-term financial stability.

Owning a home is a great goal to strive towards, but it’s important to prioritize paying off debt and building a solid financial foundation first. Once you have a clearer picture of your financial situation and have paid off your high-interest debt, you can start setting aside money for a down payment on a home.

Remember, financial planning is a journey, and it’s okay to feel overwhelmed at times. Take small steps each day towards your goals, and before you know it, you’ll be on the path to financial success. All the best from THE MONEY MINDER!