#DebtManagement #BudgetingTips #FinancialFreedom
Creating a Solid Budget Plan
To start paying off your $33K debt while making $45K a year, the first step is to create a comprehensive budget plan. Here’s how you can go about it:
Track Your Expenses
– Start by tracking all your expenses for a month to get a clear picture of where your money is going.
– Categorize your expenses into necessities (rent, groceries, utilities) and non-essentials (eating out, entertainment).
Set Realistic Goals
– Determine how much extra money you can put towards paying off your debt each month.
– Set short-term and long-term goals to keep yourself motivated.
Increasing Your Income
Since you’re looking to job hop to increase your earnings, here are some additional ways to boost your income:
Side Hustles
– Consider taking on a side hustle like freelance work, tutoring, or pet sitting to earn extra cash.
– Explore online platforms that connect freelancers with clients in need of various services.
Seek Salary Negotiation
– If switching jobs isn’t an immediate option, consider negotiating a raise with your current employer based on your performance and responsibilities.
Managing Your Debt
Now, let’s focus on tackling your debt effectively:
High-Interest Debt
– Prioritize paying off the debt with the highest interest rate first, such as your Capital One debt with a 29% APR.
– Make minimum payments on other debts while putting as much as you can towards this high-interest debt.
Consolidation Options
– Explore debt consolidation options to combine your multiple debts into a single, lower-interest loan for easier repayment.
Building Your Emergency Fund
Since your girlfriend is already working on building her emergency fund, here are some tips for growing it further:
Automated Savings
– Set up automated transfers from your checking account to your high-yield savings account to save consistently.
– Consider increasing your savings contributions as you pay off your debt.
Investing for the Future
– Once you’ve paid off your debt and built a solid emergency fund, consider investing your money in retirement accounts like your RothIRA for long-term wealth growth.
By following these steps and staying dedicated to your financial goals, you can successfully pay off your $33K debt while making $45K a year and pave the way towards a secure financial future. Remember, consistency and smart money management are key to achieving financial freedom. 🌟
Step 1 make a real budget and stick to it. Step 2 work more (OT if possible, second job if not) or find a different job that pays better. Chip away. When you’re starting to think about marriage and a house and kids you’ll thank yourself for putting more than 40 hrs/wk while you were young 20s
See if you can get your rent down with a roommate, or by moving back in with parents.
Learn skills (YouTube, Udemy, etc) that will land you a higher paying job. Narrow down a field with upward mobility. Do a shitload of research on things that you’ll need in those types of jobs. Teach yourself those skills (YouTube, udemy, coursera, LinkedIn learning, etc) good enough to bullshit your way through an interview convincingly. Find a job with fast progression opportunities making 55k+, or $23-$25+ hourly where you can get consistent overtime. Work your ass off and over deliver and get a raise in 1-2 years to 65k.
Other than that just pay it off as fast as you can, cook all the time including your lunches, never eat out. Focus on eliminating the CC Debt asap. Then work on the gov loans while trying to make more money.
If your budget is 100% accurate you don’t have a budgeting problem besides the fact that your rent is ~50% of your take home. If you can get a lower rent that’d make your situation a lot better. Besides that your problem is def an income one. If you can job hop to a better salary that would be great. Regardless I’d get a part time job in addition to what you have now to help get this debt down.
Good news is your really high interest debt is a small percentage of your overall debt. Obv I’d pay that first, then the government loans and then the parental loans. If you not paying your parents creates a rift in the relationship I’d do 50/50 government and parental
Your girlfriends situation really doesn’t apply to you but she should keep her emergency fund (6 months or needs) inside a high yield. The 30k in regular savings should be moved to a high yield after a portion of it is used to max out an IRA for this fiscal year. Kudos to her for being so disciplined
You shouldn’t be putting money into savings rn until you pay off this cc debt. Throw all of it into this cc. After you can decide what you can put into a high yield vs throwing towards your other debt (depends on interest rate)
I think you’re confusing your employer 401k with a personal IRA. You don’t need to withdraw anything from your retirement account, your situation is not that dire
Best of luck
Don’t go over budget if you can. Know what your burn rate is per day? How much does it cost to live?Â
Work more. I worked more hours and longer hours and get $21K down to $0 in 3-4 months. It was tough but keep grinding in serving gratuity jobs. In my industry, when it is busy, we can hit over $10K per month.Â
As others said… make a budget and try to cut costs where you can. If you can get a roommate, or move in with someone else when your lease is up, it cuts rent. Move in with parents or relatives if you can. Your groceries are actually good if accurate. But this is very important: make sure your budget covers everything. You will never get out of debt if you keep adding things to the credit card at this point.
Try to find a better paying job or take on a second job.
Are the gov loans student loans? Apply for income based repayment.
Put all the extra money you can towards the credit card debt and kill that as quickly as possible as that APR is going to hurt the longer it lasts.
Ask for delay in paying parents. Show card payments and student loan payments.
Get a better job. Keep applying.
Pay your credit card off asap and put your phone bill only on that. Cut the card up. Not even for emergencies.
1st step: pay off your CC, and learn to control your CC spending so you never pay interest (dont hold a balance). Your credit score will become extremely important later on in your life (i.e. when you want to buy a house, or need a business loan).
2nd step: split your income between savings/play stock market/roth ira/401k etc, and paying off student loan.
3rd step: pay off parents once you have a emergency fund, or fat bank account. This can wait.
Concurrently: only buy your needs, and don’t buy your wants. Try to cut down on day to day expenses. Be part of the sandwich making class. Embrace your frugality.
Remember this saying: I rather spend the first 10 years of my life poor, than be poor for the rest of my life. Debt is modern day slavery. Do you want to be a slave?
Time to work a 2nd job. Your rent is too much to save for anything.
Also girlfriend has no ring on it so her money is her money.
Phone can be a little cheaper, but pay off the credit card ASAP or transfer to a 0% interest or low interest card
Recommend $500 per month to CapOne. $200 to student loans and $200 to parents. When CapOne is done then $700 to student loans and $200 to parents. $900 to parents when student loans are done. Does your work offer OT? If so then take as much as you can. Adjust distribution how you feel but stick to it. Gonna suck huh? Doesn’t sound like a lot of fun. But life is a whole lot easier when the money coming in can go to what you need now instead of towards debt carried month to month.
I paid off my student loans (~$50,000) on ~45K/year by finding the cheapest housing I could find ($450, tiny, dilapidated efficiency that I shared with my boyfriend), rarely buying anything I didn’t absolutely need (cable, streaming services, takeout, etc.), and paying it off as fast as I could. It was a bit extreme, but it allowed me to pay it all off before I needed better housing and more income because of marriage and kids, etc. I utilized the library a lot for entertainment during those years and cooked all my meals from scratch. I still went on a yearly beach vacation (driving, not flying) and would splurge on occasion, but it wasn’t the norm.