#DebtFree #FinancialAdvice #BudgetingHelp
Hey everyone! 💸 Question for you: what’s the most debt you’ve managed to pay off in one year? Let’s chat about it! 🤔
So, I’ve got just over $50,000 in total debt hanging over my head. Yikes, I know. Here’s the breakdown of my numbers:
– Auto Loan: $34,800
– Line of Credit: $8,900
– Credit Cards: $4,400
– Canada Revenue Agency Debt: $2,300
– N.S. Power Account Balance: $457
– Motor Vehicle Registry of Quebec (Unpaid Ticket): $600
I’m 25 years old, living in Nova Scotia, and making $82,000 a year. My monthly expenses are adding up, and I really want to find a way out of this mess quicker.
Here’s what I’m working with:
– Take home pay: $1,900 biweekly (base salary)
– Working enough overtime to bring home $2,400 biweekly (about $5k a month)
Expenses include rent, car payments, insurance, bills, and the one thing I treat myself to – my gym membership. 💪💰
I’m currently paying only the minimums on everything except my credit card, which I’m throwing whatever extra money I have at each month.
Any ideas on how I can tackle this debt monster faster? I’m all ears for some helpful advice! 🙏🏼🤞🏽
One possible solution:
– Consider consolidating your debts into a lower interest loan to save on interest payments and pay off your debt more efficiently.
Let’s help each other out! 💡 #DebtFreeJourney #FinancialWellness
$1700 a month seems high for rent in Nova Scotia, I live in PEI. If you live alone, downsizing to a studio or getting a roommate for a couple years might be a good call.
Look at Koodo mobile, you should be able to get your cellphone bill down. Unless that $80/month includes paying off a cellphone on a monthly basis too. Get rid of Netflix/Music and get Amazon Prime instead. Solid tv/movie selection and good music. Not as good as spotify, but solid.
Could maybe bring groceries down by $50 to $100 per month by choosing cheaper options. Eat more oatmeal, rice and peanut butter etc.
Keep hitting the gym. Great way to deal with stressful situations.
My suggestions are pretty nitpicky but it sounds like you’re doing a reasonable job given a tough situation. Obviously prioritise paying down the debt with the highest interest rates. That should go without saying though.
80% of this is your car, sell it buy a beater for a while and use the car payment money to deal with the other debt
Consider ditching your car and taking up cycling if you are able. You’re young and you make decent money. Be frugal and save for a few years.
You make 80k and you have a $40k car?
stupid luxuary keeps you poor. I make 200k and drive a $12k car.
Get rid of your car and get a cheaper one, you’re a dumbass if you keep 35k debt for your ego.
Moved back home to the parents and paid off 37k of student loans in one year. In hindsight I was probably better off paying it slower and investing more but it feels damn good to see that I paid a whopping 20$ in interest lol
Look into Dave Ramsay Total Money Makeover. It really helped me. I paid off $28,000 in 8 months making $60,000 after tax. You gotta get serious though. 8 months of pain and then the pain ends if you want but i recommend saving for as long as you can. Get a side gig, sell everything, stop contributing to RRSPs and stuff. Yeah yeah compounding, give yourself the year. Kill it.
How do you make $1900 bi-weekly with your base salary? That seems low.
$60,000 in 3 weeks. Debt free now. My secret, I liquidated properties and investments in NS and left. It’s a hellhole.
Auto loan balance $34,800?
Can you sell?
I’ve paid off a 13k credit card in 6 months, worked my ass off I think I was home for a total of 14 days In that stretch. Win some and lose some. Will never make that mistake again
can you get a roommate? just for a while? I’d sell the 30k car, buy something for 10-15k that’s reliable, really any used Toyota is probably a safe bet, that you can get a solid 2 years out of it at least without any major repairs, and put the rest towards your other debt, because the interest you are paying now on credit card and loan debt is probably a car payment a month. Best to pay it off asap, and have more money in the long run you can eventually sink into car repairs or a better car. It will also save you money on insurance once the car is paid off.
cancel the subscriptions, youtube is free, the library is free. if there’s a cheaper gym near you like a YMCA see about switching.
I’d focused on making the minimum payments on everything first each month, and then any extra money half towards your highest interest debt, and half towards your lowest debt amount, that way you are both putting a dent in how much interest you are paying so you can pay stuff off faster, but also paying of the smaller one will be more motivating as others have said.
Get rid of the supplements. 100 bucks more to add to the snowball. It works. Was in about 60k debt 7 years ago. Now we’re about a year away from being a millionaires. We cut tons of useless shit out of our lives and never went back. Lived more or less the same way since, piled every thing else into retirement and savings. Granted it can be easier as a couple (as long as you communicate and are on the same page) and my income doubled in the last 7 years. We were lucky, but sometimes one makes their own luck a little bit.
Hang in there and keep fighting. You’re on the right track!
Looking at who your debt is to plays a part in this, otherwise I’d say highest interest first.
Is there a danger of getting your power turned off? That would be priority 1.
What are the risks of that unpaid ticket? If there’s a chance they will not let you renew registration or your license, absolute pay that next since it sounds like you have a long ways to drive to work.
Bringing in $5k a month, you’re not in overly bad shape. If the budget you shared is accurate, you have around $1400 per month to put towards your debt in addition to what you’re paying on the car note.
If you’re alone, move into shared accommodation.
35K$
My girlfriend and I had just graduated we worked double jobs until we paid our debt and it took about 7months.
We are in Quebec so we do have interest rates on student loans of about 6.5% which is why we wanted to pay it off.
From a purely financial point of view, it makes the most sense to pay off the highest rate debt first.
$270,000
Paid off this amount of mortgage debt in a single year. This amount took a lot of pain and sacrifice to achieve, but the high-level summary of how we achieved this was:
1. There are a lot of expenses that could be cut. I unironically cut Disney+ and other subscriptions that I rarely used.
2. Speak with your internet/phone providers for a discount. They usually have ongoing promotions, but the best thing to do is to switch providers because newcomer discounts are ALWAYS better.
3. Bulk buy and freeze all the food we bought. We went on Costco trips and store all kinds of expensive meats in the freezer in the basement.
4. Get a reasonably-priced car. You don’t need to drive luxury if you’re in debt. A used biege Toyota is sufficient.
5. Side hustles. Everyone has a 9-5, but if you want to get ahead, you MUST have some kind of side hustle. Either start your own business or drive Uber. Stop wasting time at home watching Disney+, and get working!
6. Inherit 300k from a deceased relative. This step is important, so don’t miss out on this.
Hope you can find value from my experiences, and good luck in your financial journey to be debt free!
30K. I did that delivering pizza. Paid off my car.
I would work as much overtime as possible to make progress on your debt. I agree with another commenter, as much as it’s great to tackle the credit card, I would look to pay off a couple of your small loans to give yourself some momentum. If you keep working that overtime you are you should have made enough extra in one month to off your NS Power and the Unpaid ticket. Then turn to the other debts.
In 2019, I finally sold the condo that I’d been forced to rent out when my family outgrew it (because I was underwater), which reduced my debt by $200k, on top of normal payments which typically reduce my debt by $25k per year. Last year I cleaned up remaining auto and student loans for $30k, again on top.of normal payments.
To answer the post title, $25k in one year.
Hey friend. I’ve also racked up some debt the last couple years and it’s stressful. Financially in the same ball park as you and hoping to pay it off this year as well (well except for the car)
I suggest the following:
-nix the supplements (eat healthy and you’ll be fine or up the eggs etc)
-go to the Netflix with ads (I just did that yesterday) and nix paid music – start using free streaming sites
-start eating more beans, rice, legumes, and potatoes to bring the food bill down – also bake your own bread to save money
-sounds like with all the driving you can’t do much for part time work but maybe pick up a weekend job if possible
Good luck. I’m in the shit too
Agreed with the tackling on simple payment first. Creates motivation to keep going.
Once you take care of the low hanging fruit you can always look into options of consolidating cc debt into loc or something else.
The fact you have OT is great but also put money into RRSP when you can. Doesn’t have to be much, but it will help in next tax season and you may even get a small amount back you can lump onto a debt.
I got debt free recently (50k+ cad) but I did lots of OT and got lucky with an old crypto coin I forgot I had that decided to go to the moon lol. I don’t recommend that route though.
Still set money aside as you pay stuff off. Nothing worse then carrying zero balance and then having to use cc to pay off while you’re paying cc off…
I don’t have the exact advice you’re looking for – but from someone on my own journey right now, 5 months ago I made a savings plan… (as close to) 50% of everything I make goes into a specific savings account for debt… (from there I make equal payments into the CC or LOC’s.) (Paying the first one off is such a high… getting at least one account to zero is very worth it imo). Then 15% goes towards emergency. And the rest to living… (these numbers will look very different for everyone).
Best thing I did was make a plan of action and STICK TO IT. I’m always so excited for pay day now because I get to organize everything. It’s motivating.
Good on ya – you’re on the right path and are going places 🫶🫶
Look into a consolidation loan for everything but the car.
Unironically, you can’t keep your only hobby if you really want to get rid of the debt quickly. Not going to the gym frees up $200 monthly and gives you time to do side hustles.
The Past You has used up more than you could bear, and now it’s time for the Current and Future You to pay it back.
Probably 21K in one year when I was 25, started bar tending during college and that led to “bad habits”
got my shit together paid that off, paid off collections and rehabbed my osap in two years.
Used the snowball method before I knew what the snowball method was.
After your base expenses, you have aroubd 1400 left? You can definitely be paying down more debt.
That car is killing you as well. Can u get something cheaper?
First – if you have any available balance left in your LOC, use that to pay off the credit card. There might be some options for cheap balance transfer that might save you some interest. If there’s no available balance, then switch your credit card to a low interest rate one.
When you receive a paycheck, transfer it directly to your LOC to save interest. Use 2 credit cards and rotate the balances and schedule the payment date at the middle of the month and end of the month. Always make the credit card payments on time.
If you can, try pushing or reducing the CRA payments.
At the end of the day, it’s about how much you save, but you can’t be paying over 20% in interest.
Attack the lowest balance first, it will give you a sense of accomplishment to see something paid off to zero. I know it’s not a popular opinion in these parts, but human motivation and emotion are a real thing.
Are you able to consolidate your debts, either talking with the debt holders directly or appointed/licensed trustees?
Another option, which is not the wisest option, if you haven’t tackled the root of your overspending, is to get a promotional LOC with credit card companies like MBNA. They offer 1-2% balance transfer fees and no interest payments from 8-12 months, which would give you some time and breathing room. But during that time, you’d have to really attack your debt and not let yourself go undisciplined and you’d also have to qualify.
12k of line of credit i used to buy a car back in 2012 when i got out of college. i paid it after my first year on a job while paying rent and other bills living alone in a big city. still drive that car until recently when it blew an engine
Maybe try to apply for the MBNA True Line mastercard. They currently offer 0% balance transfers for up to 12 months for a 1% transfer fee if you apply through Credit Karma
Absent of the car loan (please don’t say it’s a 72 or 84 month loan), you have about $15k debt which is totally manageable on your salary.
1. You’re either paying too much in rent or have too much car. $1700 might be fine for downtown Halifax and if that’s you, fine, but then you don’t need a $30k+ car. Paying $1700 anywhere that isn’t Halifax means you’re paying too much. Find a cheaper place or find roommates. Put the difference towards debt.
2. Gym, fine but drop the supplements.You’re 25, you don’t need them nor can you afford them. Put all that extra towards CC debt.
3. Get a cheaper cell phone plan. You shouldn’t be paying any more than $40-50 monthly. Put the difference into CC debt.
4. Now instead of $90/mo on the credit card(s), you’re paying at least $220+/mo (more if you find a new place to live). If you have more than 1 cars, start with the one that has the lowest balance. I would urge you to pay more but even if you don’t, this will clear the CC debt in a little over 2 years instead of the 10+ years it will take if you only make minimum payments.
5. Once that’s paid off, shift to the LoC.
Unpopular opinion, might not be possible for your specific situation, but do you absolutely need a car to begin with? Because if you can manage anyway to use public transport/Ubers when needed, you can save up a lot
$8000 in collections debt but I negotiated it down to about $4000 lol
Get rid of the car. I bike everywhere and take a bus when I need to. That car loan is eating you alive.
What kind of supplements are costing $100 a month 🤔
You could almost certainly find a cheaper gym and phone plan and yes the car loan is also very high!!! Lower your expenses and attack the debt
Are groceries just you? you could easily get that down to $300