I am a 25f who is drowning in debt due to poor financial choices that I've made in the past. I want to give up so badly because I feel really worthless. If I can't manage my money, I'll never really be free.
I work full time in IT and my net income is currently ~50,300/yr, but my debt is ~$32,000. I have no savings.
I have $7000 in credit cards, $19000 in student loans, and $5600 in personal loans.
I pay way too much in rent ($1800/month) because I haven't found a roommate but it seemed worth it to me at the time because I could finally escape my toxic family situation at home. I have decided that I am going to move into a cheaper apartment. The average rent in my area is $1600/month, so I may have to look in the seedier parts of town but I can't care anymore.
I calculated and currently my monthly credit card bills, loan repayments, and rent are $2900/month. That means I have $1291 (edit: Correction from $500, @ElevateTheMind corrected the math) left over each month to use for gas/food/entertainment which seems like more than enough to me but I am always left with nothing by the end of the month.
I want to get a second job in the evenings if possible, I wanted to do DoorDash/Uber but gas is getting a little expensive for me.
What do I need to do to drag myself out of this pit?
Can I come back from this?
byu/RatDogEnthusiast inpersonalfinance
Posted by RatDogEnthusiast
15 Comments
What’s stopping you from finding a roommate? That sould save you a lot more than just $200 on rent. I would prioritize that over moving to a slightly cheaper apartment.
Pay minimums on all debt except the highest interest, which I assume is the CC. Check with your student loan provider and see if there is any way to lower your monthly payment.
You’ll be out of this soon if you carefully control your spending. If you choose not to budget and track spending, it will get worse.
Damn, net income at 50k is pretty solid, what’s your IT role and track there if you don’t mind sharing.
If you get up to the top tier of Uber they give a lot of gas discounts but I have to advise against it unl3ss you own your vehicle outright because you’re going to want a lot of insurance in case something happens to one of your income streams (your actual job or your car), but currently your situation is manageable. Focus on the highest interest debt first, do as little as possible on the others to avoid going to collections or getting sues.
Your numbers aren’t adding up. You’re saying your net is $50300, net means after taxes and insurance etc. Dividing that amount by 12 months equals to around $4191 a month. Your total monthly obligations are $2900. That should leave you with $1291 leftover a month for gas food and entertainment.
Roommate and extra job. Maybe a couple of extra jobs to get this mess cleaned up. You can do it, but it’s going to take an effort.
And then carefully control your spending.
If you try using ai side hustles you can easy make 1k+ a month if your consistent. It’s not a lot but it can help for sure!! Hope you get out of debt soon🙏
Start with the basics… there is a lot of information missing. log into your bank and credit cards and track all of your spending for the last 6 months. This is where the gotchas start appearing… car insurance, presents at Christmas , clothes for work, subscriptions, Toilet paper and cleaning supplies, nonsense.
Once you have all of that then you’ll be able to see where the money is going.
How are you searching for a roommate? what have you tried?
The $19000 student loans is an investment and an ok problem to deal with. The consumer debt and personal loan are not ideal – but you are concerned before it will be too late. You will manage the situation with your restructuring efforts, and you will come out ahead on the other side. You are not “worthless” and the situation is far from hopeless.
INFO: is your apartment 1 or 2 bedroom? Monthly payment, rate, balance on CCs and loans? I can make a detailed plan if you provide numbers
Your income isn’t the problem. You have $1100 in monthly payments for credit cards and loans is the problem. Stop using credit cards if you can’t pay it off in full by end of month. Since you have $500 leftover,try to use as much as possible to pay down the debt. Debt avalanche if you can, but debt snowball if that’s too hard.
With the apartment, if you find a good roommate, get a 2 bedroom apartments. Each get your own room, then divide all bills in half. So even if it’s $2200 rent total, it’s $1100 for just your part.
Once you get your debt under control, the best way to save is to automate XX from your paycheck into a savings account not linked to your checking
Think it’s a bandwidth problem. IT is mentally taxing and you do your finances on autopilot, too tired to care. You mention possible solutions while you ask your questions.
(1) You are not worthless, and it is not too late.
(2) Is your NET income $50,300/year? Meaning each month you bring in around $4,100 in paychecks after taxes etc? Or is that your gross, meaning monthly paychecks of more like $3,000- $3,200? It sounds like your monthly income is around $3,400, so I’ll go with that.
(3) It is sometimes easier to BE a roommate, than find a roommate. If you aren’t in a lease and can move out to a cheaper apartment, that’s a good option. My experience has been most “bad” neighborhoods aren’t nearly as bad as some people think. If you can find an apartment or roommate situation for $1,200/month that would be great.
(4) Because, $500/month is not more than enough for “everything else.” The “low cost” food plan for a single female adult is around $275-$300/month cooking at home 100% of the time, eating low cost foods. Gas is expensive, and you could easily spend $100-$150/month even with a short commute. Entertainment, but also copays, unexpected expenses, household needs (TP, soap, etc.) are all cutting in to that.
(5) If that budget is paying minimums on credit cards, it will be nearly impossible for you to get traction. You need to get those cards out of that interest rate. You can consider contacting the national foundation for credit counseling. [https://www.nfcc.org/](https://www.nfcc.org/) They may be able to help you negotiate payment plans that allow you to pay down the debt without as much interest.
If you can decrease expenses by $300-$600/month, that will help immensely. Adding that to the card pay off would help you pay the credit card off in about 18 months or so. Then, throwing that all at the personal loan, it might be paid off in 6 more months. In 2 years you can be out of the worst of it.
The student loans are a longer path, but not nearly as stressful, and actually pretty low for student loans.
Look for side hustles that offer student loan repayment. Also, watch some Dave Ramsey shows.
Find a roommate immediately halves your rent, pay down the debt highest interest first, cut frivolous spending, start maxing out Roth IRA yearly.
If you can increase your income that would help tremendously and yes you can pull out of this with discipline
Any chance to increase the income side?
Any opportunity to uplevel in your current job?
Where are you in compensation for similar roles / companies in your area?
If you believe your situation is dire then Dave Ramsey’s book Total Money Makeover is the best IMO but it’s gonna hurt for a while because his methods are agressive for paying down debt.