"I want to start on the right path and use this fresh start to work on my finances properly": Starting a new job with $60k in hand, but $20k in debt. How can I maximize my earnings and tackle my debts in a smart way?

Planning a 45k salary

Hey Money Minder, I’m embarking on a new adventure with a 45k salary starting in January in a different country. The good news is, I won’t have any tax withholding thanks to some foreigner tax benefits. The not-so-great news is I have 13k in student debt and 7k in credit card debt back home.

On top of my salary, I’ll be receiving a sweet $3k bonus for switching jobs and a 12k housing bonus in the first year, bringing my total to 60k.

I pretty much paid my own way through school, from my bachelor’s to a master’s and a specialization, so my savings account is looking pretty sad. I’m ready to turn things around and get my finances in order starting now.

My major expenses will be rent, utilities, car payment (1000, 200, 400 respectively), and of course, food. Any tips for me?

Take care,
Seeking Stability

Response from THE MONEY MINDER:

Hello There,

Congratulations on your new start and the exciting opportunity in another country! It sounds like you have a solid plan in place with the 45k salary and the additional bonuses in the first year. Given your student debt and credit card debt, it’s great that you are looking to get your finances on track.

Based on your main expenses of rent, utilities, car payment, and food, it’s essential to create a detailed budget. Start by listing all your income sources and expenses, including the debts you need to pay off. Prioritize paying off your debts first, starting with the credit card debt since it likely has a higher interest rate. Use the $3k bonus to pay off a significant portion of this debt and allocate a portion of your monthly income towards paying off the remaining balance.

For the student debt, continue making regular payments to reduce the balance. With the housing bonus and salary increase in the first year, consider saving a percentage of this additional income towards an emergency fund to cover unexpected expenses.

When it comes to your main expenses, look for ways to reduce costs where possible. This could include finding a more affordable rental option, exploring public transportation as an alternative to a car, and meal planning to save on food expenses.

Overall, the key is to prioritize paying off your debts, creating a realistic budget, and sticking to it. Take advantage of the fresh start opportunity to build a solid financial foundation for the future. All the best from THE MONEY MINDER!