I recently bought a house and had to fix it up so my family could move in, and now I have $10,000 in credit card debt. Here’s my situation:
I make about $6,000 per month.
My mortgage is $1,500, paid biweekly. My truck is $800, also paid biweekly. My phone and internet are $210 per month. Groceries cost about $500 a month, and utilities (power, water, heat) add up to around $600 a month. I spend about $300 on gas for my truck.
I’m feeling really stressed because my credit card interest rate is 22.99%. Any advice would be appreciated.
So you’re spending $3,910 a month, right? With a $6,000 monthly income, you have around $2,090 left after expenses. Is there anything you’re missing in your list of costs?
If you stop using the credit card, here’s how long it’ll take to pay it off:
Pay $500/month, and you’ll pay it off in about 26 months. You’d end up paying $12,731, with $2,731 in interest.
Pay $1,000/month, and it’ll take about 12 months, costing $11,208 with $1,208 in interest.
Pay $1,500/month, and it’ll take 8 months, with a total cost of $10,803 and $803 in interest.
These are based on a $10,000 balance with a 22.99% interest rate.
I see your breakdown, but wouldn’t it be smarter to just throw the entire $2,000 toward the debt? That way they save the most on interest, and if something comes up, they can just add it to the credit card. Or am I missing something here?
You’re right that $2,000 would help more, but I’m considering they might have other costs like insurance, medical expenses, home repairs, and extra family costs. Plus, they mentioned that $6K is an average, so it might not always be that much. I just wanted to leave some room for flexibility.
Got it, you’re accounting for the fact that they didn’t give a full breakdown of costs. Makes sense with how they used words like ‘average’ and ‘probably.’
Stop estimating costs like ‘roughly’ and ‘probably.’ You need to know exactly what you’re spending to get out of this. Also, your truck? It’s $1,600 a month. You spent more than a year’s salary on that. You make $6,000 a month, so why did you get a truck that costs you $300 a week in gas? Sell the truck. You don’t need it.
It might be crazy for him, but there are cases where a high car payment makes sense. I pay nearly $1,300 a month for my truck, but it’s a short-term loan with really low interest, and I make more in savings than I pay in interest…
Is your truck worth what you’re paying for it? An $800 payment is way too much. You should sell it and get something more affordable, and I can’t even imagine how much your insurance costs.
You’re in over your head with a $3K house payment and a $1,600 truck payment. You have to give up the truck. You’re on the edge of financial collapse. Get a cheaper car, pay off your debts, and start making extra house payments when you can to get ahead.