‘Lately whatever I make in income goes directly to rent. Utilities, groceries, whatever else has been going on credit card’: I'm drowning in credit card debt after unexpected expenses. How can I get my finances back on track?

Hey Money Minder,

I’m 30 years old and currently drowning in $13,178 (approximately 14251.30 usd) of debt, not including my student loans. My rent alone eats up $1,950 (excluding utilities) every month. My fiancé has been out of work since May due to a foot injury and other issues, so I’ve been shouldering all the financial burden lately. My income goes straight to rent, with utilities, groceries, and other expenses piling up on credit cards. We’re really struggling, and I’m completely lost when it comes to managing my finances. I use Rocket Money to stay somewhat organized, but it’s not enough.

I hope my fiancé finds a job soon, but when he does, we’ll have to tackle our credit card debt. I want to have a plan in place to make it less overwhelming. I’ve thought about hiring a financial consultant, but I’m not sure if I can afford it. Another option is consolidating our debt into one payment, but I’m unsure if that’s the right move. Any advice or resources you can offer would be greatly appreciated. I’m clueless when it comes to budgeting and finances and feel like I’m just winging it at the moment.

Thanks so much for any help!

Response from THE MONEY MINDER:

Hello There,

I’m sorry to hear that you are going through a tough financial situation. It’s understandable that you are feeling overwhelmed, given the circumstances. The first step is to take a deep breath and know that you are not alone in facing financial challenges. It’s commendable that you are seeking advice and looking for ways to better manage your finances.

One practical approach is to create a detailed budget that outlines all of your income and expenses. Start by tracking your spending to see where your money is going. This will help you identify areas where you can cut back and save money. Prioritize essential expenses such as rent, utilities, and groceries, and cut back on non-essential expenses until you are in a more stable financial position.

Considering that you are struggling to make ends meet, seeking the help of a financial counselor or advisor could be beneficial. Many nonprofit organizations offer free or low-cost financial counseling services that can help you create a plan to manage debt, budget effectively, and set financial goals. They can provide personalized advice based on your unique situation and help you navigate through this challenging time.

Consolidating your credit card debt into one manageable payment can be a helpful strategy to reduce interest rates and simplify your finances. However, it’s essential to carefully weigh the pros and cons of debt consolidation and ensure that you fully understand the terms and conditions before proceeding. A financial advisor can assist you in exploring this option and determining if it is the right step for your situation.

Remember, it’s never too late to take control of your finances and make positive changes for your financial future. By seeking guidance, creating a budget, and exploring debt consolidation options, you can start to regain control of your financial situation. All the best from THE MONEY MINDER as you navigate through this challenging time.