#idk #what-to-do #18-year-old
Seeking Guidance After Past Financial Mistakes
Are you feeling lost and overwhelmed due to previous financial mistakes made as an 18-year-old? It’s understandable to feel unsure about how to move forward when faced with a low credit score, charged-off credit cards, and debt in collections. However, it’s important to remember that there are steps you can take to improve your situation and rebuild your credit. Here are some strategies to consider:
Assessing Your Current Financial Situation
First and foremost, take stock of your current financial standing. Understand the total debt owed on all four credit cards, which stands at $3,000. Additionally, take note of your weekly income of approximately $450 and your status as a college student with a job. This information will help you formulate a plan moving forward.
Exploring Your Options
When it comes to addressing your debt, you have several options to consider:
– Paying off the debt in full: If you have the means to do so, paying off the debt in full can help you clear your outstanding balances and start fresh.
– Negotiating with collection agencies: Reach out to the collection agencies associated with your debt to discuss the possibility of settling for a lower amount. This process, known as a pay for delete, can help you reduce the total amount owed.
– Rebuilding your credit: After addressing your current debt, focus on rebuilding your credit. This may involve opening a new account, such as a secured credit card, and making timely payments to demonstrate responsible financial behavior.
– Considering Chime: If you’re looking for a new banking option, Chime is a popular choice for its user-friendly features and lack of hidden fees. It could be a good fit for managing your finances moving forward.
Seeking Professional Assistance
Don’t hesitate to seek help from financial advisors or credit counselors who can provide personalized guidance based on your specific situation. They can offer expert advice on debt management, credit rebuilding, and overall financial wellness.
In conclusion, while the challenges you face may seem daunting, know that there are solutions available to help you navigate your financial journey. By taking proactive steps and seeking guidance when needed, you can work towards a brighter financial future. Don’t be afraid to ask for help and remember that it’s never too late to turn things around. Stay positive and stay focused on your goals. You’ve got this! 💪🏼
The first thing you should do is relax.
You’re 20 not 40. You can get through this. When I left college at 22 I had some bills in collections and a credit score near yours with no savings. I truly felt in over my head. What I did was save up until I had enough to pay it all off in full and started negotiating with the debtors. I was able to get it all removed from credit report like I had never been delinquent to begin with. I simply told them they’re not getting a dime unless everything is completely cleared. Now at 31 my credit score fluctuates from the high 700s to low 800s.
Also $3000 in debt is more than manageable. At 20 that probably feels like an enormous amount of money but plenty of people have pulled themselves out of significantly larger holes.
The main thing to do right now is to make sure that $3000 balance doesn’t get larger due to interest. With credit cards it can snowball pretty quickly.
Again, as long as you learn your lesson and continue to be diligent with your money, you’re gonna be just fine.
Also we need some crucial information to better help.
1. How much do you currently have saved up
2. What are your monthly expenses
I would also continue to ask around about how to best deal with collections as I only went through it the one time and I’m sure someone out there has better advice.
Since the amount owed isn’t too significant across all cards I don’t think it’s worth the hassle trying to negotiate with the credit card companies and I would just pay the cards off as aggressively as possible. You didn’t say what your monthly expenses were, but I would try to have those credit cards paid off in 6 months to a year from now.
After the cards are paid off, I would only use them like a debit card and pay the balance off each month, making sure you don’t pay any more interest. That should slowly start to fix your credit score but it’s going to take time.
First, breathe! Then, snowball method: pay min on 3, attack 1 with $450/week. You got this!
1. Relax, you’re still young, credit can be repaired.
2. Learn, educate yourself on personal finance.
When it comes to actual planning and execution, find out which cards have the highest interest rate. Pay those off, little by little, first. For the other ones, start making automated minimum payments. If you can’t find the rates or they’re not that different from each other, start paying off the highest balance cards first and work your way down.
When paying off debt (in general) make a plan (budget). Pay off what’s reasonable, over the minimum payment for the highest card(s) first. For the others, as I’ve mentioned, turn on automatic minimum payments to buy you some time.
Create a budget and stick to it. Don’t use any more credit cards. You’re going to have to sacrifice a bit but with a solid plan your credit will increase very quickly. Just don’t miss any payments. Last thing: once everything is in motion, find ways to either get a better paying job or take the time to enhance your skill set – so you can find a better paying job.
being 20 with 3k even so they r in collections etc w.e .. it seems bad but dont do it again, you’ll be just fine by age 22
Think about the people in hundreds of thousands of debt
You are young. This feels like a mess, but it is a fixable one. We have all made mistakes with money. All of us. As someone said, stop the bleeding. Pay off the one with the highest interest rate the fastest and go to the next one. Can you get a second PT job or one that pays more? Even an extra $25-$50/week would be a big help. You are in college working toward a goal, working a job (gaining skills and experience whether you realize it or not) and you are smart enough to realize credit card debt can ruin your finances if you let it. I would say you’re doing better than a lot of people out there. Don’t beat yourself up. Start solving the problem. You can do it.
First thing you do is make a budget. You make a list of all the things you **need** to spend money on (rent, gas, groceries, etc), all the things you **want** to spend money on (food, beer, Hulu, etc). Set up a budget that ensures the needs get paid and that the wants are minimized so that you have extra left over every month. That’s your savings which you will use for paying debt.
3000 is not a lot.
Once you know how much you can pay a month, call up every creditor and collector. You said you had 4 charge offs? You have 4 numbers to call.
Take the number you have left, divide it by 5. This is how much you can pay each debt per month. The extra 1/5 is a buffer and if you don’t spend it on debt, you save it.
Tell them you want to set up a payment plan.
Tell them how much you can afford to pay from above.
It doesn’t hurt to ask if you can settle for less as well, worse they can say is no.
Have your budget in front of you. Some collectors who want to work with you might ask you about your budget to figure out how much you can actually pay.
Be respectful. Debt collectors suck, but it’s a job. We can all appreciate that people need jobs right now.
You didn’t ruin your future, you learned a lesson. You’re absolutely going to be fine. I did the same thing, with more debt, with less resources.
Figure out what you can afford and make them an offer.
You can repair your credit by simply paying your bills on time and not spending money that you don’t have. That’s it, there’s nothing else to it. There’s no trick, there’s no hack. Don’t put anything on a credit card that you could not pay off completely by the next billing cycle.