Hi Money Minder,
Oh man, I am seriously in a pickle with $60k in the hole… I’ve made some major mistakes from college to post-graduation and now I’m feeling financially clueless. I posted in r/Adulting and got some help which was awesome, but I still need more guidance. I’ve realized it’s time to turn things around and get rid of this debt for good.
So, here’s the deal:
I’m a 24-year-old guy with a finance degree, pulling in 67k gross comp for the year. I live in a pricey area with my girlfriend, splitting rent costs.
I’ve got some credit card debt weighing me down:
- CapOne SavorOne – $13,580
- BoA Credit Card – $15,882
- Best Buy – $1,129
- Furniture store card – $1,278
My checking account is sitting at -$28, and I’ve got zero savings. My credit score is 631, and my student loans total $28k.
I need to figure out where to start. I know I’ve messed up, but I’m ready to take action. What should my short-term and long-term goals be? Any advice on how to get started today would be greatly appreciated. Thanks a bunch for sticking with me through this long rant!
Cheers,
Steve
Response from THE MONEY MINDER:
Hello There,
I understand that you are feeling overwhelmed by your current financial situation, but it’s important to acknowledge that you are taking the right steps by seeking advice and being willing to make changes. First and foremost, it’s crucial to create a detailed budget outlining your income and expenses, including all your bills and necessities. This will help you understand where your money is going and where you can cut back.
Given that your highest priority is tackling your credit card debt, it’s advisable to focus on paying off the card with the highest interest rate first while making at least minimum payments on the others. You may want to consider reaching out to your credit card companies to see if they can offer any assistance, such as lowering your interest rates or setting up a payment plan.
In terms of your long-term goals, it’s essential to start building an emergency fund as soon as possible to avoid relying on credit cards for unexpected expenses. Additionally, creating a plan to pay off your student loans gradually will help you avoid accumulating more debt.
Cutting unnecessary expenses, such as streaming services and eating out, can free up more money to put towards your debt repayment. It’s also important to communicate openly with your girlfriend about your financial situation and work together to find ways to reduce expenses and increase savings.
Remember, Rome wasn’t built in a day, and it may take time to get out of debt completely. Stay focused, stay disciplined, and don’t lose hope. You have the power to turn your financial situation around with dedication and perseverance. Good luck on your journey to becoming debt-free.
Farewell,
THE MONEY MINDER
