I recently made a big financial decision buying a car and ended up overspending. I’m committed to keeping it, but I’m trying to get out of debt as quickly as possible. It’s been weighing on me, and I’d really appreciate some kind advice.
Here’s a snapshot of my monthly expenses:
- Car payment: $900
- Insurance: $313 (switching to a $194 option next month)
- Insurance for a car I use to help my dad: $130
- House payment: $600
- Credit card 1: $210
- Credit card 2: $150
- Student loan: $54
- Phone payment: $50
Total: $2,407
Monthly Income: $4,100
Additional monthly costs include:
- Gas: ~$300 for both cars (planning to reduce since my new job is nearby)
- Groceries: $150
- Dining out: $200-$400 (will cut down)
- Miscellaneous spending: $200-$300 (will cut down)
With my new job, my bi-monthly paychecks will be around $2,130 each, making it tricky to split my bills. I’m aiming to pay off my credit card debt aggressively and hope to be debt-free by next February. How can I best approach this?
For a car, over $900 a month is absurd talk! If you really want to pay off this debt, SELL YOUR CAR. You are living well beyond your means because you have fallen victim to the “keeping up with the Jones” trap. It’s not necessary for you to drive a luxury vehicle at all. Anyone who has a different opinion of you as a result is just demonstrating to you who you would be better off without in your life. The other items on your list are incredibly manageable if you don’t have a $1,200 auto loan and insurance hanging over your head.
I am very grateful. I’ll do everything I can to control the vehicle.
If not, I’ll sell the vehicle.
Is there any way you could take a temporary second job to finish this sooner? With your nose to the grindstone and working your asshole off until Christmas?
Update: Credit card debt is what I meant.
I have a 45k auto loan.
You already have a thing for the car, I know that. However, must place this in context. My spouse and I earn about $6k each month. What you have in one car is not even close to what we have in two. We paid $26,000 for a used 2020 Honda Odyssey, and we own a Chevy Bolt that is probably worth $8–10,000. for a four-person family.
Eliminate going out and purchasing items that you would pay off both of your credit cards in a single month and never use again. After that, make additional principal payments on your car until it is paid off. At that point, you should be able to donate the car and credit cards within a year or so. Next, pay off your education loans and then your house.
Yes. I’ve been going out less frequently. People I used to hang out with would constantly expect me to pay for everything, but I haven’t been doing that ever since.
I’ve just been sincere with them, asking them to venmo or Zelle me. Getting rid of this credit card is my top goal.
Never cover someone else’s expenses, and don’t go if you don’t have the cash. Pay for what you need, and politely decline their requests if they make them.
Furthermore, if they anticipate that from anyone, they are not your pals. You were being used by them as a cash cow.
At twenty-five years old, a $900 car payment plus an additional $313 for insurance?
Pay off the debt and sell the car.
That’s just not something you can afford. That’s more than one-fourth of your monthly salary.
People often spend that much on rent; if your cheap living arrangement charges you before the car is paid off, you won’t be able to pay the rent.
Remember that every dollar matters when attempting to pay off debt; until the debt is settled, there shouldn’t be any more…unnecessary expenses. Getting coffee from a shop is not the same as learning how to brew it at home and loving it.
Ten thousand is nothing, dude. You can pay off your debt in five months if you can find a method to contribute $2k a month. Right now, you may make approximately $1000 per month. Find a means to increase that amount by working a side job or selling anything you have that you can get rid of. That’s essentially where you are, although in your case, it’s not that difficult. If you put in some effort and sacrifice, you can accomplish it; it shouldn’t take more than a year.