After my gf passed away last year from cancer, I moved back in with my parents to help get my finances in order. This is something I've always struggled with and really just need an outside perspective.
Currently my salary is $90k and we receive a 16% bonus at work each year, I've been here 5 years and received the bonus each year since 2021. I work as a maintenance manager but have re-enrolled in school as a premedical student. My goal is to go medical school starting fall 2028. I'm 36 years old with 3 children (don't live with me but have custody every other weekend). I plan to go through a military scholarship program for medical school which will help pay a stipend and maintain health insurance for my children while I'm in school.
Current Debts: Student Loans ($67K), Credit Cards/BNPL ($12K) — I have a problem with paying down a little more than minimum and then using the cards. So my goal is to just save up cash ($200/paycheck) and contribute to my company stock ($540/month) and build up enough to pay the cards off entirely while also paying the minimums each month. I've asked chatgpt to look at my budget and it recommends reducing all savings except 401k match and aggressively paying down credit card debt. My problem is that if I have this extra cashflow in my bank account, I end up spending it wastefully and using my credit cards thinking I have extra money.
Here's a snippet of my first attempt at a budget, my goal is to save enough within my retirement accounts to use as an emergency fund if needed during medical school — especially my roth IRA, which currently has $21k.
| Income 1 | 7,508.13 | |||
|---|---|---|---|---|
| Income 2 (bonus) | 550.00 | |||
| Other Income | ||||
| Total Income | 8,058.13 | |||
| Monthly Fixed Expenses | Actual | Non-regular Monthly Expenses — Line 30 | ||
| Taxes | 1,100.00 | Expense | Description | Balance |
| Monthly Variable Expenses | 842.01 | 1 | Groceries | 500.00 |
| Retirement (401k, Roth) | 825.91 | 2 | Eating Out (kids/weekends, forgot lunch) | 150.00 |
| Child Support – Daughter ($650) | 650.00 | 3 | Unleaded Gas | 135.00 |
| Traditional IRA – (backdoor Roth IRA , once per year(7.5Kmax)) | 625.00 | 4 | Chegg Study Pack | 21.35 |
| Child Support – Twins | 580.00 | 5 | PS5 online | 10.69 |
| Company Stock Purchase (15% match up to $1800 = $270/annual match) | 541.00 | 6 | Amazon Purchases | |
| Student Loans | 500.00 | 7 | Youtube Premium | 13.99 |
| Zepbound Medicine | 500.00 | 8 | Quizlet Membership | 7.99 |
| Cash Savings ($200 every paycheck) | 433.00 | 9 | ||
| Insurance- (health, dental, eye, disability, life, accident, critical illness) | 298.53 | 10 | Clothes | |
| Daughter's College Fund | 150.00 | 11 | Vending Machines | |
| Personal Care – Haircuts | 150.00 | 12 | Apple – Monthly Data Expansion | 2.99 |
| Telephone (2 phones + Daughter's Phone) | 86.64 | |||
| Gym | 32.50 | |||
| Amazon Annual Fee | 14.57 | |||
| Gifts / Charity | 13.00 | |||
| Rent | 0.00 | |||
| Fidelity Savings (Non-retirement acct.) — After paying off credit cards!!!(Goal: Lost Job 3 – 6 months of expenses, 5K per month, $30,000) | 0.00 | |||
| Total: $7342.16 | ||||
| Leftover: $166 | ||||
| TOTAL | 842.01 | |||
Putting aside my pride and asking for help
byu/HennyInDaCup inpersonalfinance
Posted by HennyInDaCup
6 Comments
You’re comfortable having credit card debt. Learn about interest rates on credit card debt and how you are burning a lot of money by holding a credit card balance. It’s doesn’t make sense to keep credit card debt as a way to stop spending money on stuff. You have a problem that you recognize now you need to actually do something about it.
Hey OP, have you considered contacting your credit card companies and asking for a 0% interest over the next 6 months? This will help pay off your debts without the extent of the added interest. If you’re a loyal customer and in good standing they will usually work with you. That’s historically the most problematic issue I’ve seen is the added interest on that principal amount.
What is “monthly variable expenses” $842?” Where is that going?
I would strongly consider cancelling subscriptions: Chegg, Playstation, Youtube, Quizlet.
Why do you have 2 phones PLUS a phone for your daughter?
I would seriously consider whether medical school is the right choice for you. How certain are you that you will get in and succeed? You are starting quite late, and probably have 10 years ahead of you. You have a fairly good job right now. You have a lot of obligations with three kids. I hate to crush dreams, but you’ve made choices over the past 10 years that limit your options.
You cannot afford to pay out of pocket for zepbound or to save for your daughter’s college. I would stop the IRA savings until the cards are paid off.
$150/month for haircuts for 1 person is a lot. Is that for 3 kids + you? If you have shorter hair, can you go to supercuts or otherwise get a haircut for under $50? If you have longer hair can you go 10 weeks between haircuts?
You need to take away your option to use the cards. Go through online accounts and delete the numbers. Take them off of your apple wallet, etc. Then, give them to someone else to keep. Then, each paycheck, pay what you budget on day 1 of getting the paycheck.
I’d say immediately, if you cut $1,275 per month, $630 extra per check can go to the highest interest card. That should make a huge difference quickly.
By your own admission, you are not a person who can responsibly use credit cards – at least not right now. Cut them up and switch to putting your purchases on debit while you pay them off.
Lock your cards, you have a spending problem and aren’t being responsible, you need to stop yourself from continued spending. Keep them in a drawer for emergencies only and lock the accounts until paid off, and even then consider never using them so you don’t relapse into this. Then focus on building savings and just pull from cash to buy things. If you can’t buy something non critical in cash you shouldn’t be buying it anyway. You can do this!
> So my goal is to just save up cash ($200/paycheck) and contribute to my company stock ($540/month) and build up enough to pay the cards off entirely while also paying the minimums each month.
This only works if the incentive with contributing to the company stock exceeds the credit card interest, which I doubt it does. Your best bet to pay off the cc debt is to stop using the cards and pay as much and as often towards the balance until you get to $0.