Hi I’m posting from a throwaway account because my financial situation is a real pain point for me emotionally. I’m 22 and I’m in a sticky situation, I’ll give the TLDR up here and then elaborate on more particulars of my budget below. I have immense personal debt (close to 20k in credit cards) because I was homeless fresh out of high school. From there, I went to college and continued using the cards to cover expenses as needed, since I couldn’t get a parent to co-sign a loan for what additional funding was needed. The caveat, now is that I’m two quarters away from graduating and I’m drowning in my debt. I have the chance to go back to finish school within the next year via government student loans, but I’m not sure what to do.
Budget breakdown:
I make 15.35/hr and work full time.
Rent is $898 where I live (this is cheap for the area), utilities are $50.
I have $7000 on a card with 22% interest, and $9800 on a card with 24% interest. I put down $450 in credit payments every month.
I have a cat who I spend roughly $30 on per month, a gym membership that costs me $30, and a Spotify student membership that’s roughly $9. Outside of that my only other bill is WiFi ($15).
I just don’t know what the best way to approach all of this is, and I don’t know what else I can really cut out (not willing to get rid of my cat or the gym membership).
Literally any help would be appreciated. I see yall working absolute miracles in this subreddit.
Debt and School- just need advice
byu/thhhhhhhrowaaw inpersonalfinance
Posted by thhhhhhhrowaaw
2 Comments
I ruined my credit in my early 20s. It taught me a valuable lesson. I don’t finance anything anymore.
Finish school. Take out subsidized government loans if possible. Hopefully you can get a better paying job when you graduate. You really don’t have any room to cut. Your only way out of this is to make more money.
Call the credit card companies. See if they would be willing to give you a break on the interest rate. Tell them you are going to have trouble making payments. They will work with you.
The credit card companies will reduce your rate to 0%, HOWEVER, they will also freeze and then usually close your account once you’re finished paying them.
So you pay off your debt in a fraction of the time but you lose the ability to spend on your credit cards which sounds like the best possible thing.