Just landed a job pulling in $4.7k a month (finally got that first paycheck) after taxes in a Very High Cost of Living (VHCOL) city. Here’s a breakdown of my debts:
- $4.5k – credit card at around 25% APR (asked Discover to drop it to 0% for the next 12 months)
- $4k – owe a friend with no interest
My monthly expenses:
- Rent: $2k (utilities included)
- Travel: less than $100
- Restaurants/Uber Eats/Groceries: $800-$1000
- Miscellaneous: $300 (therapy, injury rehab)
Rent is already a hefty $2k (with utilities included). I’ve been stress-eating like crazy, which has led to a ton of credit card debt because most of my spending goes to restaurants and Uber Eats. Trying to rein it in. I could use some help crafting a budget and figuring out if it’s possible to wipe out this debt by the end of 2024 (the sooner, the better). Feeling super stressed and anxious about it all. Any advice or recommendations?
Thanks a bunch!
Goodbye, Seeker of Financial Wisdom
Response from THE MONEY MINDER:
Hello There,
Congratulations on starting your new job and receiving your first paycheck! It’s great that you’re looking for help with your finances and are willing to make changes to improve your situation. The first step is acknowledging your debts and creating a plan to tackle them.
Given your monthly income of $4.7k and your monthly expenses outlined, it seems feasible to become debt-free by the end of 2024. To achieve this goal sooner, you should prioritize paying down your high-interest credit card debt. Since you have already taken the step to negotiate a lower APR with Discover, focus on making larger payments towards this debt while still meeting your other financial obligations.
To avoid accumulating more debt, consider setting a strict budget for your restaurant and food delivery expenses. Cooking at home can significantly reduce your monthly food costs. It’s also essential to continue monitoring your spending habits and making adjustments as needed.
In managing your finances, it might be helpful to seek guidance from a financial advisor or counselor to create a more in-depth budgeting plan tailored to your specific situation. Remember, small changes in your spending habits can lead to significant progress in getting out of debt.
Stay focused on your goal of becoming debt-free and make consistent efforts to reduce your financial stress. With dedication and discipline, you can overcome your current challenges. Best of luck on your journey to financial stability!
Farewell from THE MONEY MINDER.
