‘My husband and I are in $8,000 credit card debt and $300k in med school loans’: Swamped with debt. How can we climb out of this financial hole?

Hi Money Minder,

Hey there! So, my husband and I are young and wild (well, kind of) in our late 20s, bringing home a cool $160k a year. But man, after Uncle Sam takes his cut, we’re looking at around $10k a month. We call a city with a bit of a moderate cost of living our home sweet home. Rent sets us back $2220 every month, plus another $500 just to park our wheels. Two grocery trips a month and we’re dropping about $500. Oh, and we’ve got this pesky $8000 hanging around in credit card debt that’s starting to feel like a dark cloud over us. We admit, we’re guilty of splurging on random stuff like clothes, fancy dinners, and spontaneous trips. I know, I know, we need to tighten up. And on top of that, my husband’s got a hefty $300k in med school loans. Luckily, our cars are paid off. How can we tackle this credit card debt beast and get back in the game?

Cheers,
Financially Frazzled Fiona

Response from THE MONEY MINDER:

Hello There,

Understandably, it can be quite overwhelming to have credit card debt hanging over your head, especially with other financial obligations like your husband’s med school loans. It’s important to tackle this debt head-on to alleviate the stress it’s causing. One practical approach would be to create a detailed budget outlining your monthly expenses and identifying areas where you can cut back. It’s great that you’re aware of overspending on miscellaneous items, so perhaps setting a strict monthly budget for non-essential purchases can help you redirect that money towards paying off your credit card debt.

Additionally, considering your combined income of $160k, it might be beneficial to allocate a significant portion of your monthly income towards paying off the credit card debt. By prioritizing debt repayment and sticking to a structured plan, you can make steady progress in reducing that $8000 balance. It may also be worth exploring balance transfer options or speaking with a financial advisor to see if there are any strategies that could help you pay off the debt more efficiently.

Remember, it’s all about making small lifestyle adjustments and being diligent in managing your finances to get back on track. With determination and a solid plan in place, you can certainly tackle this credit card debt and start building a stronger financial future. Good luck!

Farewell from THE MONEY MINDER.