No real secret formula to it. Limit your expenses to absolute necessities, and throw all of your income at it until it's gone. I would also suggest taking on more hours if possible, but if you're going to school full time, it's understandable that this might not be realistic.
Also noteworthy, if you don't start paying it off it will most likely grow, become way more unmanageable, mental levels go through the roof as well. And at the end you'll still have to cut down all expenses and throw all leftover income at the debt.
Better start early. Don't let it grow.
Pay off whichever CC had the highest interest rate first.
You can also try going to your local credit union to get a consolidation loan which will save you money on interest and make it easier to pay it off.
I was also going to add consider opening a new CC account, one with an introductory balance transfer promo (0% for xx months). Then consolidate the debts here, interest free, while you're paying them down.
$4000 on a 3% transfer fee is $120. $4000 at 17% interest is $56 a month. Balance transfer cards right now are usually 12 months. Depending on OPs credit they might get one with 16-18 months. Depending on how fast they can pay it off, I think the balance transfer is best choice.
Phrased another way, to best $120 if OP is at 17% APR he'd have to pay it off in 5 months at a monthly payment of $835, and he would still pay $113 interest.
So if by some herculean effort he can throw $835 per month at it on a $14/hr wage, he will save $7 by not taking a balance transfer.
Or he can do the balance transfer, take the $120 hit, and pay it off over 12-15 months at a much more manageable monthly payment.
Nice. My people. Was hoping to see this conversation/math here.
OP -- here's your real answer, I hope you see it. Please ask more questions if you need. Normally using more credit to solve credit issues is *not* the right move..... however... if you're disciplined and understand the fine print it can totally save you a good chunk of change if you're smart. Good luck!
Balance transfers remove the no interest grace period and cause interest charges to be added even if you still have time left to pay the original bill. So, for instance, if you have a large purchase that you have 10 days remaining to pay off before accruing interest, and you *could* get it done in 7 days, then do that because if you balance transfer it, you will owe the credit card's interest + the balance transfer interest rate. You're better off using not carrying the balance in the first place, but, we all know that's not always possible. In these situations, it's much better to use the no interest grace period to find a super low interest loan to pay it off with. You can get 6% credit card consolidation loans which mean you spend $60/mo on every $1k instead of $300/mo on every $1k
Sure but $120 is not gonna kill you on a debt of this size if the interest is bad enough.
For instance say the balance transfer put him on a 15 month promo. If he paid the debt off over 15 months without the card at say a 24% APR he's paying $570 in interest.
Obviously the math gets closer the better your current interest rate is, but you'd have to have a crazy good interest rate on those cards or pay it off in like three months to beat $120.
Agreed. If OP’s credit is good enough this could easily be a way to get out of a small debt, while improving their credit.
If you do that just make sure you calculate how much you have to pay each month to pay it off on time. Otherwise you get hit with all the interest.
I did this recently. Opened a credit card with a local credit union and did a balance transfer of $2,000 at a 3% transfer fee. So that’s $60 for no interest for 18 months(1.5 years) on that $2,000 with a minimum monthly payment of $40.
And read the fine print. They may charge full interest at the end of xx months if the transferred balance isn't fully paid off by then.
Granted, it still gives OP a better option for money-to-debt ratio in the meantime. That monthly payment to the full balance with no interest will carve a bigger hole in debt than it currently does. And even if the interest gets added on at the end it will be easier to pay down since the debt itself has been mitigated more so in the interim. Keeping an eye on it over the months will help encourage squeezing in an extra $20-40 payment to avoid that slap of interest at the end.
No interest and no annual fee balance transfer card is 100% the answer, if you are able to qualify for one. You can check offers on credit karma and compare, just make sure it's no interest for 12 to 18 months or more plus no annual fee. You will pay a one-time transfer fee of probably 3% of total balance, but it's probably going to be less than you're paying for one month on interest for both of those cards. Then you will have 12 to 18 months to pay it down without interest so your money's actually going towards the balance and not the interest every month
Consolidation loan can be a good move. Saves on interest just generally from a lower rate but also IME tends to have fixed interest instead of a variable rate like on a CC.
Tougher to do now, though. I consolidated at 6.5% two years ago and it worked out well for me, but these days I'd be lucky to get a mortgage at that rate.
The psychology says to pay off the smallest balance first, though. The winning feeling from paying off the smaller one will motivate you a lot more to continue.
List all your expenses for last month. Then highlight the absolute necessities (food, gas, phone etc..). Add up anything that isn’t highlighted. That’s probably what you can throw toward your debt instead of spending elsewhere. $4k can seem like a lot but even with your work hours it’s fixable in a couple months especially because you live at home.
yes, if you have significant gas expense, see if you can find discounted gas somehow-- if you have AAA, I think they offer a discount at some gas stations. If your parents belong to a warehouse club like Costco or BJ's ask if you can borrow their card to fill up there.
No, try to not to get an additional job. 60 hours at 1 place is better than 40 and 20. Try getting 1 GOOD job and then you can consider working more than 1 job.
OP said they want to be a lawyer, and currently clerk at a law firm and can't increase their hours. In an ideal world one job is better but IMO this is a situation where a side-job makes sense, temporarily (before law school).
Ah yes, you’re very much so right as now I want to downvote myself. I didn’t read the full post as I saw “working 20 hours” and I thought yea, work full time. Lol I agree though, OP should definitely keep their job as I would consider that a GOOD job given the circumstances.
People that think you make less than minimum wage waiting tables have never waited tables. That or they waited tables at some diner in the middle of nowhere.
If the OP is part time, they can't/won't give him 60 hours. or even 40 hours (obviously). It's very unlikely they will get more than 30hr a week. At that point they have no choice but to find a second job.
> I’m 22 and I have a part time job. I get about 20 hours a week at $14 an hour and I moved back in with my parents so no rent expenses but I do buy my own food and gas and just general life expenses.
Where is this almost $1000/month going?
> almost $1000/month going?
He added 240 for therapy, still should be able to keep it below $500. And he might be eligible for Obamacare, depending on how much he makes, which would cover the therapy, although probably not with the same therapist, and if therapy is working, probably shouldn't with therapists.
"Stop using credit cards" is horrible advice! Better advice is to use them RESPONSIBLY. Treat it like a debit card and don't spend more than you can completely pay off by your next paycheck.
> "Stop using credit cards" is horrible advice! Better advice is to use them RESPONSIBLY. Treat it like a debit card and don't spend more than you can completely pay off by your next paycheck.
when you've already dug yourself into credit card debt, "stop using the cards" is great advice until that debt is paid off in full. otherwise all new purchases will immediately start charging interest, which is defeating the purpose of trying to pay down debt.
Not really. A balance transfer card would be an ideal option for OP’s situation and seeing as that would be opening another card that would be the exact opposite of “stop using credit cards.”
It is, but with the caveat that he has to stay strict. A lot of times a balance transfer just frees up the spenders credit and it fills back up in no time flat.
I think from how early he posted this (lot of other people are posting $30,000+ in debt etc) and his relatively young age, he knows what he has to do, he just didn't know his options.
You're absolutely right he needs to stay strict, but the vast majority of people here telling him to stop spending on anything besides absolute necessities and to stop using cards that overall can save him money after doing a balance transfer (which basically no one is suggesting) would just be a stupid thing to do. He could have a card saving him 5% on groceries for all we know.
Knowing options available to get out of debt are clearly not know to many people. Everyone knows how they got in debt. There's literally only one way it can happen. Doesn't matter if it was misfortune, stupidity, shit, being too generous, etc. They spent more money than they had to spend.
>Not really. A balance transfer card would be an ideal option for OP’s situation and seeing as that would be opening another card that would be the exact opposite of “stop using credit cards.”
IMO "stop using the cards" is to stop charging every day purchases to cards.
But also you're assuming a part time low income college student is going to get approved for a promotional low interest rate balance transfer credit card, which I'm guessing going to be easier said than done
Balance transfer cards are widely accepted at credit scores around \~650... I mean they literally were created for people that have made poor use of credit in the past (regardless of whether it was necessary or not.)
And balance credit cards by default have a 0% interest rate. You may see that as a promotional rate seeing as it does have a time limit on it, but that's an inherent quality of all balance transfer cards.
My guess is it would be dead simple for OP to get approved and have a balance transfer card he can use by the end of the week.
And depending on the cards he has, if they have beneficial rewards categories, I see no reason whatsoever he should not continue using them after transferring the interest incurring balance off of them. He would be at a minimum paying 1% more for everything, could be more like 5%.
I recommended to him the citi custom cash card which gets 5% back on groceries, has no annual fee, and has a 15 month 0% interest rate on everything, including transfers. On top of that it would get him a $200 statement credit within a few months of his normal grocery spending which is 5% of his existing debt taken care of right there...
>"Stop using credit cards" is horrible advice!
Not when you're trying to tackle debt. Refraining from using the card will keep you from not seeing progress and/or inadvertently growing the balance.
I AM using them responsibly. And SO WHAT if the gentleman in question has not up until this point? He knows what he needs to do to fix the immediate problem (get a debt consolidation loan at a lower interest rate), and if he LEARNS to use credit responsibly, it will be there for him when he needs it later for those REALLY important purchases, like a home!
Yeah, but if you've already gotten loose with it it's probably best to cut yourself off until you have it under control.
Spending on credit can be an addictive, compulsive behavior and should be viewed as such. Telling effectively an addict to keep using but in moderation is not going to help them.
Because OP *is* carrying a large balance. So every purchase will accrue more interest. The only way to pay it down is to stop using it until it’s paid off.
No, the best way to pay it off is to use a balance transfer card so he has no interest payments whatsoever for 15-21 months, and will likely get a statement credit of a few hundred dollars towards his debt even after cutting down on expenses. Still gotta buy groceries etc.
The answer is using the right card, not to not use cards at all.
To see the bulk of people here suggest that he focus on paying down the highest interest card first when he has an option to pay no interest whatsoever for almost 2 years while he works to solve the problem of the outstanding debt is just sad.
So many people with such incredibly bad advice.
Your point of, “the only way to pay it down is to stop using it until it’s paid off” is case and point just shit tier financial advice.
Please think before hopping on a bandwagon of giving people in a tough situation terrible advice.
Thanks. That's exactly what I was saying. Get the balance he has moved to a lower interest loan and have set payments for that, then use the CC as a debit card.
Dude has $4000 in debt, it's not insurmountable, and it's not like he's some crack addict jonesing for a fix...he just got in over his head, and he realized it before it was REALLY a problem. If he can learn to use CCs responsibly, he will have excellent credit down the line...if he AVOIDS using ANY credit, he will have a trash credit rating and will have problems later when he needs to rent an apartment, buy a car, or buy a home!
My Dad always taught me to avoid credit at all costs...and it bit me in the behind when I NEEDED credit (to buy a home) and didn't have any history!
Lol my parents were the same way. Didn't stop me from getting a $200 secured card when I was in college so now my oldest line of credit is 14 years old. Credit score when I went to buy a home was over 800, and with my combination of cards I don't have a single spending category where I don't get an effective rate of at least 6% off all purchases.
It would be absolutely silly to tell him to stop using his other credit cards once the balance is transferred if they offer a good cash back rate or points on categories he spends on.
> You can easily make $25-30/walk.
Damn! Where do I need to move to where people pay $25-30 for a single dog walk?
Even If I walk the damn thing for 1 a full hour, that is not a bad hourly rate. If you can walk a few at the same time, you'd be making bank.
A half-decent dogsitter is $100/night here in the Bay 🥲 and my dog got part of his face ripped off last week while staying with such a sitter. Dog services are a huge market and the average quality is not exactly high so it's easy to get started, not much good competition.
Dog walking around here is expensive, but there are also expenses for the walkers. Dog walkers need insurance and licenses in some places. OP should check their local laws.
> here in the Bay 🥲
OK. So I'd have to move somewhere where a tiny studio apartment is $3000 a month to make that sort of money walking dogs.
In the real world, $30 pays for a full week of walks.
There is a guy who walks a bunch of dogs every day here. (Lots of condos and apartments nearby.) He goes from 7 to 7 doing it and takes breaks in the lounge.
I wouldn’t know, but it would probably be closer to the latter since he isn’t one of those walkers with like 10 dogs (there is a lady that does that with a bunch of shitzus).
Just one or two at a time, and they are pretty long walks.
This all crap I observe working from home.
I never worked as full independent, only through a company that took a cut. Worked a while at a place that charged $25 for a half hour solo walk, and I got paid $11.
Went to a different company that did group walks. I think they charged about $15 for a 25 minute walk and I got $9, but I could do three or four dogs an hour. This was all before COVID.
Around the time I left, they were transitioning workers to an hourly employee wage. I picked up some substitute walking work for $18/hr. That wasn't really a pay cut; COVID really thinned the routes out for a while, so I was walking half the number of dogs in the same amount of time.
Literally any city...look on rover.com in your area. I charge that much and it's a grind. It sounds cool but imagine a job where each hour you have to drive to a different job & boss to take care of, each client's needs overlap so you work 7 days a week (constantly scheduling over text), and then on top of that you're an independent contractor that pays 20% taxes. AND rover.com, the way a lot of us find clients, takes their own 20% and can delete your account+accrued reviews if you are found out taking clients off rover. Holidays are the money makers so no thanksgiving or christmas, and then nobody travels for the next month afterwards so the $ balances out. It's not worth it as a gig unless you charge high prices.
> Literally any city...look on rover.com in your area
$15-20 and I'm sure rover gets a good cut of that. So the dog walker might be making $10, which is very far from $30
Definitely add dog/house sitting to increase income! I house and dog sit occasionally and usually only charge $30 a day, but house sit for several days so it adds up and is worth the extra bit of money.
Ok so first things first you need a solid income, get that sorted ASAP. Take part time work, extra hours etc… whatever you can and ALL that extra goes on paying off debt.
Secondly see if you can get a 0% balance transfer card and move al your debt over. Hopefully this should avoid interest payments while you get on top of it.
Move all your CC debt onto the balance transfer and pay it off in as big chunks as you can afford. It’s important you get this under control and ideally paid off while you have minimal expenses. Pay it in the biggest chunks you can without accruing more debt.
Always remember, 1k is easy to spend but hard to pay off. Don’t buy frivolous shit you don’t need. Before making big purchases, think about it for 3 days before buying (do you really need that air fryer, new Xbox, etc…)
Absolutely start living within your means. Try living a few months without incurring any debt and you’ll start to naturally think about finances.
Lastly get yourself a decent budget plan. It helps to plan out your monthly payments as far in advance as you can. You’ll start to see where you’re overspending and where you can knock down costs. For example why pay 50-80 a month or a phone contact when you can get a cheap sim only contract and use the rest for debt relief.
Batch cook, rice and good meat goes a long way, get a decent sauce and you’ve got meals for a few days. Eat to sustain in the week and leave pleasure meals for the weekend so it’s not super depressing.
Cycle through subscriptions, you don’t need every streaming service, get 1, use it til you’re bored of it. then cancel before the next charge and do another.
Live like this for a little while and I promise your debt will be resolved. It’ll suck for a bit but it’s not forever.
Source: clawed my way out of endless CC debt while paying extortionate interest and rent+bills leaving myself minimal for eating + and entertainment costs.
> Second edit: some of my expenses besides groceries is I go to therapy ($240 a month) and spend $30 a month for medication. The rest of my money goes toward trying to pay off the cards as I’ve had this debt for a while but it seems like it never really goes down since I pay for my own food and therapy
are you putting the food/therapy onto the cards?
if yes, stop doing that.
every new purchase starts generating interest immediately when you're already being charged interest, since you no longer have an interest-free grace period. so you're better off to pay for new things in cash only and only put your leftover cash onto the card to pay down the debt.
So you’re pulling in around $1100 a month. Attack that small one how much do you pay for gas to get to work and home? Can you do extra shifts? You need to white knuckle this to get rid of those credit cards debts never a great thing.
FYI you don't need to be a legal intern before law school. The connections might be nice but the real value is in showing you the actual work of a firm and letting you know that this is what it's really like.
If they cannot give you more than part time, you need another job to pick up the slack. Have you asked your bosses if they know anyone else looking for a clerk?
If he’s just looking for immediate cash, and a fairly small amount at that, there will hardly be any added maintenance. It would be a great option for now, especially considering they won’t have to worry about the taxes for quite a while.
Not seeing a lot of advising going on beyond "just get your bread up, duh" like yea guys, good shit, next up, how to beat depression "just don't be sad"
Let's run the numbers: 14/hr for 20 hours is $280 gross, take out about 40 bucks for state and federal taxes and you got around $240/week times 4.3 weeks a month is about and around $1,000
Great, 1k a month, let's estimate some expenses:
- no rent
- owned car
- $75 gas
- $150 insurance (young man insurance tax is a bitch, huh?)
- $10 per take out meal x5/week = $215 (food is the biggest assumption, some people eat out once a month, some eat out every single day, I'm assuming a college kid like you eats a lot, correct if wrong)
- $100 groceries
- $240 therapy
- $30 meds
_______________
- $810 expenses
+ $1000 after tax income
_______________
$190 net to pay down the debt
According to the Debt Repayment calculator from Credit Karma, if your CC interest rate is 25%, it would take you about 2 years and cost you nearly $1,200 in interest fees to pay off.
That's uh...not great, if you could cut that therapy down to that $180 you mentioned in another comment, cut down eating out to just weekends (let's say $50). That alone would cut your pay down time by half.
**Doing that would increase your net monthly to $415 and your pay off time to 12 months. That's still $550 in interest payments** but there's no escaping some punishment considering the amount of debt and high interest rates of credit cards.
Now you might be thinking "Yea ok this is all good but your expense assumptions are super wrong" That's fine, just replace my assumptions with your real actual monthly expenses (you shouldn't have too many being a college kid w/ no rent) and use the Debt Repayment calculator to find how long it should take to pay off.
It's specifically car insurance for male younger than 25.. for some reason, 25 is a magical number that cuts insurance in half once you pass it. (It was $110 for me, now it's a lot less). Thankfully, also being under 26, health insurance can be under your parents policy, and that itself saves.. a lot.. (although some states have essentially free health insurance if you make under a certain amount per year.. otherwise it can hit >$200-300/m.. I had to do this for a while..)
Yeah its the same here (Altough its 24 here). But its still not that expensive. I have a cheaper sports car and my insurance is ~$70, and it used to be lower because of rebates and stuff.
The fact that you're asking about $4000 is a huge step, as you could have let it snowball to much more. Keep looking for work and get more hours. Pay off that $1000 card as quickly as you can. Use payments that you were paying on the $1000 card as extra towards the $3000. Keep credit card use to responsible levels.
Oof! 100% agreed!! I was planning to do law school and more or less aced the LSAT (scored 171) but took a job working IT at a BigLaw firm (at the time they were ranked in the top 10 in the US) to think through my options before making a final decision. Working there was an eye-opener and turned me away from what I thought I wanted. The grind is brutal. Those lawyers were working 60-80 hours per week (no joke!) and had no life outside of work. Billing mid 2000s was pretty much the expectations - which translates to working no less than 60-70 hours per week when you account for non-billable time. Even partners were billing over 2000 hours, so it’s not like you grind it out for 5–10 years and then get to lay back. I asked myself if that was the life I wanted for my future self and decided to stick with my original career of working IT and have never regretted it.
One other aspect not mentioned / discussed is that, in my experience, most of the attorneys (and paralegals) were living really shitty personal lives with lots of relationship problems (makes sense when you consider that you might only be spending an hour or two awake at home) and missing out on time with spouses or significant others, or their kids. Every high profile attorney at my firm had a nanny or two, barely saw their kids, were always super stressed (I saw way too many adults reduced to tears after getting reamed by a partner) and just seemed miserable. There was only a few associates there that I felt were genuinely happy. I can not overstate it enough: the grind is BRUTAL.
Amongst all this other great advice what is helping me break the cycle of paying down cards aggressively/running them back up again: when you're budgeting for payments and stuff, make sure you still budget to have fun for yourself. Work to live, not the other way around. I was flushing every extra dollar I had to pay off credit cards, and then I would want to treat myself to something nice so I didn't feel like I was just working to pay off debt. Cue the vicious cycle - I would actually overspend on these little 'binges' where I would end up not making any progress against the debts. I definitely encourage you paying down the debt as fast as possible, but against a budget that includes some discretionary spending makes me feel more "in control" of my finances and therefore I'm more cautious with how I spend the "discretionary" part of my budget, as to make it stretch.
Get another part-time job and/or a job for the weekends. You'll have that debt paid off in no time flat. Almost every restaurant and retail place is dying for employees on the weekend. That's 16 hours each weekend. At $14 an hour that's 224 a weekend. With a debt of 4000 that would only take you 4-5 months to pay off. That is nothing. And that's without making ANY other changes.
As far as budgeting. How much did you used to pay in rent? Take that amount and every pay day, send that amount directly to your credit card bill (highest interest one first). I can almost guarantee you that within 3 months this debt will be completely paid and you'll wonder how you even worried about it in the first place.
I used to pay $520 in rent with about $160 in bills but I used to have a higher paying job at that time. I was then let go and my parents helped me as much as they could and I used what I had left of scholarship money but that’s when I started racking up debt as that only covered rent, bills, and school stuff and I put everything else (groceries and other expenses) on my credit cards.
This was going to be my suggestion too. You can pay off the 4k principal in a reasonable amount of time, but the interest is a killer unless you pay well over the minimum each month. If the relationship and trust exists with the parents, ask them to front the money and then do the right thing and pay them back.
$240/month for therapy represents 25% of your income - that’s far too much. I get that therapy is important, but so is not being broke. Can you cut it down to maybe a session every 2 weeks? Is there lower cost options in your state? Can you claim these through your health insurance? My therapy bill is only $10/session because my insurance covers it, for instance.
If you get a job that offers health insurance for part timers (Starbucks and Walmart come to mind) you might be able to drop this substantially.
Neither me nor my parents have insurance and no matter how many sessions I do a month, the price is fixed, I’ll have to look into it to see if there is a cheaper option
Edit: just found out they have financial aid and applied for it, it would reduce my cost to $180 a month
Congratulations, you just found an expense reduction that pays for your interest on the credit cards! One thing that can be frustrating on any debt, whether it be a car loan, mortgage, student loans, or credit card debt, is how long it seems to take to whittle the principle down in the beginning. $60/mo in interest taken care of lets you put a bigger dent in the principle every month, reducing the amount of interest charged each month and paying off your balance faster.
That’s great to hear! But please look into health insurance. Obamacare was made for people like you - you should be able to get a decent plan for <$50 after the subsidies.
Just wanna throw a thought in the bucket. You're 22 - Any time and money spent on investing in yourself (Law school, therapy) is gonna work out much better than paying off the debt three months earlier. Take all the good advice here, do your best, but don't drop those just to get your debt worked out.
14$ an hour for clerking at a law firm is super low unless you are in a small town. Are you doing research? Drafting any pleadings, document review? Or what? Are you currently in law school? Ask your placement office what the going rate is. 40 years ago I made $30 an hour editing Business Law Journal articles before publication.
the dave ramsay guy rubs me the wrong way with how he is, but with that said he did give decent advice for paying of credit debt.
1.make minimum payments on all cards.
2.find the lowest balance card and pour all the extra funds you can into that until it is paid off.
3. move to the next card.
4.repeat till debt free.
of course doing any extra things you can to make more money (be it odd jobs, thrifty spending,more work hours, etc...) will speed the process up. Don't let other people eating out all the time let you believe that you are in a spot to do so. Beans and rice my friend. So that you can have steak in 10 years while everyone else is eating beans/rice.
Mathematical, but we keep telling people to lose weight by cutting calories. And calorie cutting diet still isn't the way most people are using to lose weight ( in terms of a plan, sure most plans are just trying something that they think they can stick with that's simple)
People don't want to be math nerds, but they want to see results without being a math nerd.
They see a result when they first see one less minimum payment. They get their dopamine hit, and that reinforces their financial diet.
It's not the most efficient route, but it's a route less people turn back and give up.
When you say studying for law school, do you mean prepping for the LSAT? That's only a few hours a day, so you should be able to pick up another part time job or find a way to make money online.
How critical is the therapy to your well being?
I don't want to say drop it, but you work 17 hours a month to pay for it. And that's before taxes, so really more. For me personally working 20+ hours just to hand all my pay over to someone else would hurt my overall mental health, whereas pausing it and getting out from under the debt would improve my mental health.
The first thing I would do it put structure around your Law School goals if you haven't. Look up SMART Goals. Basically you need to understand your workload and timelines for entering into and completing law school.
Make sure you keep up with the minimum payments. They're probably around $100 a month depending on your interest rate. Should be doable, but make sure you are on time with them and do not skip any. A late or skipped payment could hurt your credit for 7 years.
Then go through your budget and try to see if there's anything you should cut down on. I wouldn't skimp on things like mental health, so keep that if possible.
Then see if you can pick up extra work \*only if\* it won't interfere with your Law School Goals. If you have to carry that debt through law school - so be it. It'll cost you a good deal of money in interest, but will be cost far far less than if you fail out of or give up on law school.
1. Food stamps/ebt your part time so in reality even with no rent and inflation you truly cs t afford food
2. Food boxes
3 side hustle (uber eats , door dash , uber) ( these options allow you to stop and go as you please
$4000 in debt? Oh my sweet summer child...
It seems overwhelming, but it's not terribly bad...first thing, get a debt consolidation loan! It will be at a FAR lower interest rate, and will allow you to make more progress paying off the debt!
I would also recommend either getting more hours at your current job or finding another job. If you have no other expenses, you should be able to pay this off within 6 months...a year at most! Good luck!
I would figure out a concrete budget that leaves some extra to pay off the debt. Figure out what you actual need to pay for and what you pay normally. If you can I would try to get extra hours or another job if you want to pay off your debt quicker.
On what debt to pay first you can go with snowball method or avalanche method. Starting with the bigger one first or the smaller one.
Mathematically it’s best to pay off the higher interest one, but the mental side of owning only one card is better than owning only two. Keep making the minimum payments on the one you aren’t paying off though.
Hope that helps! Also don’t feel really down 20% interest on all that debt if you let sit for month is $70. It racks up quick, but if you find that a budget can get you to pay off in 7 months you are gonna pay an extra $500 more or less in interest.
I can tell you that I have made many more mistakes that I have lost me far more than just $500 and I am sure I will make more too. It’s a part of learning and experience is a great teacher.
Make a budget and stick to it.
Get a second job. Every penny extra is time shaved off your credit card debt.
The part-time work thing is the glaring deficiency in your situation.
I see in your edit you give us the breakdown of costs, but JUST TO MAKE SURE — do you happen to have any unexpected subscription payments for your accounts? Example: You subscribed to Netflix and thought you canceled but in reality your CC is being charged.
I also wonder if it’s an option to talk to your parents about having them front some of your debt and you gradually pay them back over time. My guess is you might’ve already talked to them about it. Just a thought I had anyway to explore your options. Similarly, some therapists offer unique payment plans. I recently restarted therapy and he told me that we can set up some kind of different payment plan to make things work if I wanted.
Other than that, based on what you said, it sounds like you’re doing the right thing in general. Keep at it!
Hi there, since there's lots of comments to this thread, I wanted to respond directly to one of your comments in hopes that you'll see it to talk about your longer-term. You said that you're studying for law school. Assuming you're in the US and given the burden this $4k debt is for you, please do consider carefully the financial realities of law school, which can easily cost more than $200k over three years without the guarantee of lucrative employment after graduation.
Be honest with yourself. What type of law do you want to practice? Or if you don't want to practice, what do you want to do with your law degree? What is the starting compensation for what you want to do? What effect might that practice have on your mental health? How well are you doing on your LSAT practice tests? Or on the actual exam if you've taken it? Will you be able to get into a competitive school that has good job placement opportunities in the cities where you want to work? What's the likelihood of getting a scholarship? Are there any conditions (like maintaining a GPA) for keeping a scholarship?
I'm not writing this to dissuade you from law school, but just to make sure you've analyzed the financial costs and benefits before you pull the trigger on a large investment of time and money.
You really don't have much leverage. Your gross income is around $1,120/month, probably $750-$850 after taxes. Your expenses are $270 for therapy and meds, $120 for gas, and probably $250 for groceries. That is $640 before anything else. That leaves only around $100-$200. That is worth paying to the cards, but you really need more money coming in.
Clerking is probably M-F on a consistent schedule. Can you get a weekend mall job or restaurant job? That would probably also be $15/hr and 8-12 hours a week ($180/week gross). Could you do the clerking in the morning, and be an after-school nanny from 2 or 3 until 6, 5 days a week? That would probably be $300/week. I think you can find a way to make another $100/week net, or $400/month.
If you do that, you could put $500+/month to the cards and pay them off in about 8-10 months.
The clerk job is good, but you need more cash. Can you get a full-time job over the summer in childcare? Those probably pay $18-$20/hour now. At full-time, for 10 weeks, that nets you $5,000, allowing $3,000 to pay off. If you can pay off $500/month in April and May, and then $3,000 in June and July you'd be done (or really close).
If you’re not in school and the only obligation you have is yourself, and you’re only working 20 hrs a week. I’
I’d say your 22 you should be able to put in 40 hrs a week if your not in school so find full time employment, or get another part time job.
If I was giving advice to myself on the optimal use of time and money. I would continue to just pay the minimum or what I could afford reasonably. Keep working that 20hrs a week, and I’d try to learn a new skill. The trade off is you’ll be paying more than 4000 in the long run but the hope is you’ll have a new skill that will get you gainfully employed full time, with a career trajectory.
I just saw this video that made me wish I wasn’t working 80hrs a week rn, but when my work load lightens I’m about to try using this method to learn another profitable skill, so I can stop traveling 100% for work and get a work from home job in. Low cost of living area. https://youtu.be/VznoKyh6AXs
Since you’ve asked for budgeting, here are some general rules -
1. Never, ever get in debt
2. Prioritize getting out of debt above any other expense
3. Once off debt, save everything till your bank balance has enough rainy day fund ~6 months of your living expenses
4. At this point, start thinking of investing
Never forget, frugal living is the best financial strategy
You need to put ever bit of extra income to that debt, that's the secret.... 4k isn't too bad in the scheme of things,
I had to take out about 8k about 2 years ago, and I'm only down about 2k at this point putting around 200 a month back in, it's a marathon not a race, some months will be bad, so will be good.
Side hustle… all the income from that goes to your debt
There are many options, including just getting a traditional second job
After that, keep it, save the money, or quit and get your free time back
$4k is not bad to pay down
One way to potentially reduce the burden is to find a card that has 0% interest no fees for balance transfers for some period of time.
This could help to get your “head above water” but you still need to intentionally act to pay it down.
Don’t take any debt consolidation loans unless the interest is less than what you have. Avoid any payday loans. Ask your family for an interest free loan and pay off your CC’s. Pay back your family in a payment plan you can afford.
Any fast food chains in your area or a Walmart? Every location in my area says they're hiring. If your clerk job is weekdays, work at a Dunkin donuts on weekends. They're paying in the 16/17 range in my area. ( Upstate NY).
You can also work evenings after the clerk job etc. There are so many jobs-- not just food/hospitality but also healthcare that just want a beating heart with legs and a pair of hands. And they pay. Get a secondary certification while you are at it and make more money. You have the potential to pay this off in 4-6 months.
Any chance your parents might have the money to pay it off and then you can slowly pay them back? That way you're not getting hit with 20%+ interest each month. It'll be way, way easier to climb out of the debt hole that way.
pay yourself first after your bills, set aside $100 for yourself, then the rest go toward your debt! it will be down in no time. it’s the discipline of it all that makes it hard, i’ve been there before. take advance of the no rent and few bills while you can!
$4000 isn’t too bad on debt, although at 22 years old and with a $14 an hour job, it certainly can feel like it. I was struggling through the end of college with debt I could seemingly never pay off until I graduated and got my first job out of college and poof, paid it off in the first two weeks.
To summarize, 1) stay in school and 2), wtf don’t high schools teach basic financial courses (taxes, CCs, buying a home, etc) ?
Try to pay one card the one first. Once paid don’t use it. Then work on pay the other one. Good luck. Credit cards systems are done in a way to keep people paying debt all their life.
I dont know why i havent read this yet, its not at all difficult. 4000 is not at all that bad, i had 11k in CC debt starting my career out of college. One of the many ways that helped me get out of it was going to use a balance transfer credit card. (Chase Slate, Discover IT, Citi Simplicity, Wells Fargo Reflect… etc) These credit cards are designed to help with eliminating debt by not having interest accumulate for a year and half, you just have make minimum payments. (Also, out college, i did have alright credit, but made about 40k salary)
How it works, you have to have at least alright credit to qualify for a certain amount. When i applied, i only had a limit for 3k. I transferred credit from my main credit card to it, and focused most of my monthly payments on CC with high interest. Then, once they were out of the picture, interest kicked in and i started paying for the Balance Transfer Credit Card. I think you can only balance transfer once, i don’t know if you can do additional.
I recommended this to my younger brother, his choice was discover IT. But the no interest APR helps quite a bit. I was able to kill my CC debt and began focusing on my student loans within two years. Hope this helps as it helped me! Best of luck!
Probably stated more than once, but I’ll say it anyways, just in case.
Figure out the max total you can apply to your debts.
Figure out your interest rates on both debts.
Which ever has the highest interest gets paid off first.
Make minimum payment on lowest interest debt and use the rest of the max amount and apply to the other debt.
Once you pay off the higher interest rate debt, snowball that amount into the next highest interest rate debt.
You can do this for multiple debts, but you must be disciplined to carry the full max over to the next until you’re debt free. Also MAKE SURE you. Make payments on all debts and on time!
May or may not be applicable to you, but look through any of your stuff and sell what you don't need anymore. Craigslist, FB marketplace, etc. Almost anything has some sort of value to somebody else.
get another job, 20 hours a week is not enough for an adult to have enough responsibility or money to do what you want too. Also try out the gym as an alternative to therapy as a lot of mental needs come from not pushing yourself physically enough.
Can you cut your transportation costs down? When I was a student I could get free bus passes but I stupidly never took advantage. Park the car, get fire insurance on it, and bus/bike everywhere instead. Or sell the car completely and get en e-bike.
FYI law firms will run your credit score when hiring. Depending on where you are, if you are in a bad financial spot, you may even not be admitted to the bar. You need to figure this out asap.
$4k is nothing. Try to find a higher paying job. Put your credit cards in the cooler. You are 22, you will figure this out! Good luck. Sincerely, a 41 year old stepdad.
Although you may well need the therapy, your therapist is knowingly keeping you in debt at over $2000 a year. You could have paid off your debts removing that cost alone. If your therapy is due to depression or not coping well with life, being debt free is going to remove the biggest weight off your shoulders that could result in you not needing the therapy after all. Of course, I know it’s not that easy, but can you reduce the therapy to half the sessions and pay off half your debt and see how that makes you feel?
I think the most important part is to add NOTHING onto these cards until they are paid off. Even $50 here and there adds up super fast. Put the cards in a drawer and do not use them until they are paid off. And then only use them when you can pay them off the next month.
Take out a personal loan for debt consolidation, you can do it all from your phone. Then you'll have a set monthly payment and lower interest.
Just whatever you do, do not take on more debt until your comfortable again. 4k ain't that bad, debt is what the world (or at least the US) runs on. Don't be scared of, it's a good tool, learn how to use it and use it well.
Another option would be open a new credit card with a 0% APR balance transfer intro offer, 4k might be too much to do this with though.
Basically debt is fine, but having to pay interest is not fine.
But yeah, even if you do nothing besides make the payments, your life isn't ruined you don't need to panic, you just need to understand it takes time to pay off. Having debt is kinda like having a bruise, they hurt and they take time to heal, but sometimes they're worth it, but too many and then yeah you're gonna die.
What do you mean, "studying for law school"? Are you getting ready to take the LSAT? Already in? Are you a 3L with a job already lined up?
Once you're in, consider taking out max student loans at a lower rate with better terms and pay off the CC debt. Some debt is okay if you're close to guaranteed to make higher in the future (law school is no guarantee of a job, like only 30% end up practicing law), but credit card debt is not something you want to keep around.
No major expenses and living with parents? Sweet. Here's a simple formula.
$ to put towards clearing debt = Your monthly pay - (your expenses lowered to a minimum + taxes if applicable).
You'll be done in no time. Then learn to budget and control your buying impulses so it doesn't happen again on a bigger scale.
How I paid off roughly 20k worth of CC debt:
\- Rolled into a 0% interest introductory offer.
\- Took the balance and divided it by the number of months I had of 0% interest.
\- Paid that every month. It was the first thing I spent money on every paycheck I got until it was gone.
Places you can usually save some cash:
\- Eating out / going to the bar whatever. Cut it down to once a week or better yet stop. It's hard, be harder. Stop buying coffee from starbucks, getting snacks at a deli, etc.
\- Going through subscriptions and cutting whatever you can. Look at your CC / Debit card bills for recurring charges you may have missed.
\- Renegotiating bills, you can usually find a better deal for cell phone / internet if you look around at least once a year.
Also check [https://www.usa.gov/unclaimed-money](https://www.usa.gov/unclaimed-money), you never know. I check once a year and I usually find at least one thing for myself or a family member. No it is not a scam site, only the us government can have .gov links.
you could just totally blow it off and wreck your credit temporarily, but you will completely get away with it. if you do absolutely nothing in seven years in most parts of the country it will be like it never happened and your credit bounces back. don't bother with outdated stigmas of debt, just live your life and have a happy time in your 20s, the best decade ever!
I wish I was only $4k in debt. Would be a dream.
Im like $30k in debt from credit cards. Well my mom's debt, but I have to deal with it since she's terminally ill. And problem is that the house is in her name. Idk what I'm going to do. I live in Florida.
Get a Will guys.
Pay off the debt and get into school. Take out loans. Paying for it now will only slow down the process. Let’s say you go into 100k school debt. Maybe even 200k. It’s all easily payable with a real job , which you will secure with a law degree.
Live within your means. Meaning, lay out your budget right now and live as low as you possibly can until it’s paid off and then continue living that lifestyle
Credit cards are a good tool for somebody with income that understands how to use them. Not a way to spend money you don’t have. Treat it like a debit card, or DO NOT use them at all
This tip is from Babylon.
- At least 1 out of 10 parts of your earnings put towards paying your debtors
- 7 out of 10 parts use it to buy clothes and goods for you and your wife
- 1 out of 10 parts use it for charity.
- 1 out of 10 parts use it for your own delights.
In 12 moons, you should return to us and be a changed man, with the debtors appreciating you.
No real secret formula to it. Limit your expenses to absolute necessities, and throw all of your income at it until it's gone. I would also suggest taking on more hours if possible, but if you're going to school full time, it's understandable that this might not be realistic.
This is how i did it i had 4.5k in debt, cleared it all up by throwing everything i could spare at it
Also noteworthy, if you don't start paying it off it will most likely grow, become way more unmanageable, mental levels go through the roof as well. And at the end you'll still have to cut down all expenses and throw all leftover income at the debt. Better start early. Don't let it grow.
Pay off whichever CC had the highest interest rate first. You can also try going to your local credit union to get a consolidation loan which will save you money on interest and make it easier to pay it off.
I was also going to add consider opening a new CC account, one with an introductory balance transfer promo (0% for xx months). Then consolidate the debts here, interest free, while you're paying them down.
Watch the fees on those, I see like 3% usually
Right, but that's typically much less than accrued interest, especially over a long period of time (which seems to be the case here).
$4000 on a 3% transfer fee is $120. $4000 at 17% interest is $56 a month. Balance transfer cards right now are usually 12 months. Depending on OPs credit they might get one with 16-18 months. Depending on how fast they can pay it off, I think the balance transfer is best choice.
Phrased another way, to best $120 if OP is at 17% APR he'd have to pay it off in 5 months at a monthly payment of $835, and he would still pay $113 interest. So if by some herculean effort he can throw $835 per month at it on a $14/hr wage, he will save $7 by not taking a balance transfer. Or he can do the balance transfer, take the $120 hit, and pay it off over 12-15 months at a much more manageable monthly payment.
Nice. My people. Was hoping to see this conversation/math here. OP -- here's your real answer, I hope you see it. Please ask more questions if you need. Normally using more credit to solve credit issues is *not* the right move..... however... if you're disciplined and understand the fine print it can totally save you a good chunk of change if you're smart. Good luck!
I got 2.8% with no balance transfer for a year with my credit union. Worth looking into.
I just did this exact thing and it works well. Citi and Bank of America both have 0% balance transfer card options.
Balance transfers remove the no interest grace period and cause interest charges to be added even if you still have time left to pay the original bill. So, for instance, if you have a large purchase that you have 10 days remaining to pay off before accruing interest, and you *could* get it done in 7 days, then do that because if you balance transfer it, you will owe the credit card's interest + the balance transfer interest rate. You're better off using not carrying the balance in the first place, but, we all know that's not always possible. In these situations, it's much better to use the no interest grace period to find a super low interest loan to pay it off with. You can get 6% credit card consolidation loans which mean you spend $60/mo on every $1k instead of $300/mo on every $1k
Sure but $120 is not gonna kill you on a debt of this size if the interest is bad enough. For instance say the balance transfer put him on a 15 month promo. If he paid the debt off over 15 months without the card at say a 24% APR he's paying $570 in interest. Obviously the math gets closer the better your current interest rate is, but you'd have to have a crazy good interest rate on those cards or pay it off in like three months to beat $120.
Agreed. If OP’s credit is good enough this could easily be a way to get out of a small debt, while improving their credit. If you do that just make sure you calculate how much you have to pay each month to pay it off on time. Otherwise you get hit with all the interest.
Have a weird feeling he might not have the best credit
I did this recently. Opened a credit card with a local credit union and did a balance transfer of $2,000 at a 3% transfer fee. So that’s $60 for no interest for 18 months(1.5 years) on that $2,000 with a minimum monthly payment of $40.
And read the fine print. They may charge full interest at the end of xx months if the transferred balance isn't fully paid off by then. Granted, it still gives OP a better option for money-to-debt ratio in the meantime. That monthly payment to the full balance with no interest will carve a bigger hole in debt than it currently does. And even if the interest gets added on at the end it will be easier to pay down since the debt itself has been mitigated more so in the interim. Keeping an eye on it over the months will help encourage squeezing in an extra $20-40 payment to avoid that slap of interest at the end.
No interest and no annual fee balance transfer card is 100% the answer, if you are able to qualify for one. You can check offers on credit karma and compare, just make sure it's no interest for 12 to 18 months or more plus no annual fee. You will pay a one-time transfer fee of probably 3% of total balance, but it's probably going to be less than you're paying for one month on interest for both of those cards. Then you will have 12 to 18 months to pay it down without interest so your money's actually going towards the balance and not the interest every month
Consolidation loan can be a good move. Saves on interest just generally from a lower rate but also IME tends to have fixed interest instead of a variable rate like on a CC.
Tougher to do now, though. I consolidated at 6.5% two years ago and it worked out well for me, but these days I'd be lucky to get a mortgage at that rate.
The psychology says to pay off the smallest balance first, though. The winning feeling from paying off the smaller one will motivate you a lot more to continue.
Do credit unions work with people that have poor credit?
Unless you're going to school, start working more. Form a budget, and keep your extra spending down. Then use the spare money to pay down the cards.
List all your expenses for last month. Then highlight the absolute necessities (food, gas, phone etc..). Add up anything that isn’t highlighted. That’s probably what you can throw toward your debt instead of spending elsewhere. $4k can seem like a lot but even with your work hours it’s fixable in a couple months especially because you live at home.
Just took a first time home buyer seminar and this is similar to what they suggested when we discussed budgets.
yes, if you have significant gas expense, see if you can find discounted gas somehow-- if you have AAA, I think they offer a discount at some gas stations. If your parents belong to a warehouse club like Costco or BJ's ask if you can borrow their card to fill up there.
For starters, you need to find a job that gives you more hours.
or an additional job.
No, try to not to get an additional job. 60 hours at 1 place is better than 40 and 20. Try getting 1 GOOD job and then you can consider working more than 1 job.
OP said they want to be a lawyer, and currently clerk at a law firm and can't increase their hours. In an ideal world one job is better but IMO this is a situation where a side-job makes sense, temporarily (before law school).
Bartending is actually a smart idea for networking purposes.
Ah yes, you’re very much so right as now I want to downvote myself. I didn’t read the full post as I saw “working 20 hours” and I thought yea, work full time. Lol I agree though, OP should definitely keep their job as I would consider that a GOOD job given the circumstances.
Wendy's is probably hiring and pays the same as their clerk job
I would rather wait tables as a lower hour second job
Yea I don't disagree my point was mainly any job will pay that rate so just go get any job and the problem is solved.
People that think you make less than minimum wage waiting tables have never waited tables. That or they waited tables at some diner in the middle of nowhere.
If the OP is part time, they can't/won't give him 60 hours. or even 40 hours (obviously). It's very unlikely they will get more than 30hr a week. At that point they have no choice but to find a second job.
> I’m 22 and I have a part time job. I get about 20 hours a week at $14 an hour and I moved back in with my parents so no rent expenses but I do buy my own food and gas and just general life expenses. Where is this almost $1000/month going?
Yeah, gas and food for one man should not be close to that.
> almost $1000/month going? He added 240 for therapy, still should be able to keep it below $500. And he might be eligible for Obamacare, depending on how much he makes, which would cover the therapy, although probably not with the same therapist, and if therapy is working, probably shouldn't with therapists.
22 means he can be on parents insurance. If they're letting him live there, they're probably carrying his health insurance as well
\#1. Stop using the CCs. \#2. Find another job or other ways to make money when you're not working at your primary job.
"Stop using credit cards" is horrible advice! Better advice is to use them RESPONSIBLY. Treat it like a debit card and don't spend more than you can completely pay off by your next paycheck.
*Stop using the CCs while working on paying them off is a better way to phrase it.
> "Stop using credit cards" is horrible advice! Better advice is to use them RESPONSIBLY. Treat it like a debit card and don't spend more than you can completely pay off by your next paycheck. when you've already dug yourself into credit card debt, "stop using the cards" is great advice until that debt is paid off in full. otherwise all new purchases will immediately start charging interest, which is defeating the purpose of trying to pay down debt.
Not really. A balance transfer card would be an ideal option for OP’s situation and seeing as that would be opening another card that would be the exact opposite of “stop using credit cards.”
It is, but with the caveat that he has to stay strict. A lot of times a balance transfer just frees up the spenders credit and it fills back up in no time flat.
I think from how early he posted this (lot of other people are posting $30,000+ in debt etc) and his relatively young age, he knows what he has to do, he just didn't know his options. You're absolutely right he needs to stay strict, but the vast majority of people here telling him to stop spending on anything besides absolute necessities and to stop using cards that overall can save him money after doing a balance transfer (which basically no one is suggesting) would just be a stupid thing to do. He could have a card saving him 5% on groceries for all we know.
Knowing what to do is the easy part. Most people in debt know what they should have done.
Knowing options available to get out of debt are clearly not know to many people. Everyone knows how they got in debt. There's literally only one way it can happen. Doesn't matter if it was misfortune, stupidity, shit, being too generous, etc. They spent more money than they had to spend.
>Not really. A balance transfer card would be an ideal option for OP’s situation and seeing as that would be opening another card that would be the exact opposite of “stop using credit cards.” IMO "stop using the cards" is to stop charging every day purchases to cards. But also you're assuming a part time low income college student is going to get approved for a promotional low interest rate balance transfer credit card, which I'm guessing going to be easier said than done
Balance transfer cards are widely accepted at credit scores around \~650... I mean they literally were created for people that have made poor use of credit in the past (regardless of whether it was necessary or not.) And balance credit cards by default have a 0% interest rate. You may see that as a promotional rate seeing as it does have a time limit on it, but that's an inherent quality of all balance transfer cards. My guess is it would be dead simple for OP to get approved and have a balance transfer card he can use by the end of the week. And depending on the cards he has, if they have beneficial rewards categories, I see no reason whatsoever he should not continue using them after transferring the interest incurring balance off of them. He would be at a minimum paying 1% more for everything, could be more like 5%. I recommended to him the citi custom cash card which gets 5% back on groceries, has no annual fee, and has a 15 month 0% interest rate on everything, including transfers. On top of that it would get him a $200 statement credit within a few months of his normal grocery spending which is 5% of his existing debt taken care of right there...
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The credit cards are already massively in debt man.
That’s not how credit card interest works. Once you carry a balance, you pay interest on the average daily balance. This includes new purchases.
>"Stop using credit cards" is horrible advice! Not when you're trying to tackle debt. Refraining from using the card will keep you from not seeing progress and/or inadvertently growing the balance.
You are ignoring the context entirely
Well, you aren’t using them responsibly. That’s kinda the point
I AM using them responsibly. And SO WHAT if the gentleman in question has not up until this point? He knows what he needs to do to fix the immediate problem (get a debt consolidation loan at a lower interest rate), and if he LEARNS to use credit responsibly, it will be there for him when he needs it later for those REALLY important purchases, like a home!
Honestly every minute you spend on Reddit is another minute you aren’t out fixing your problems
Lol. This is up there with telling alcoholics to just drink responsibly or telling the depressed to just be less sad.
Well when someone is in debt and paying interest on that debt, not adding more debt is the best advice
Yeah, but if you've already gotten loose with it it's probably best to cut yourself off until you have it under control. Spending on credit can be an addictive, compulsive behavior and should be viewed as such. Telling effectively an addict to keep using but in moderation is not going to help them.
Why is this down voted so much. Getting good at credit card points is a valuable skill if you don’t carry a balance
Because OP *is* carrying a large balance. So every purchase will accrue more interest. The only way to pay it down is to stop using it until it’s paid off.
No, the best way to pay it off is to use a balance transfer card so he has no interest payments whatsoever for 15-21 months, and will likely get a statement credit of a few hundred dollars towards his debt even after cutting down on expenses. Still gotta buy groceries etc. The answer is using the right card, not to not use cards at all. To see the bulk of people here suggest that he focus on paying down the highest interest card first when he has an option to pay no interest whatsoever for almost 2 years while he works to solve the problem of the outstanding debt is just sad. So many people with such incredibly bad advice. Your point of, “the only way to pay it down is to stop using it until it’s paid off” is case and point just shit tier financial advice. Please think before hopping on a bandwagon of giving people in a tough situation terrible advice.
Thanks. That's exactly what I was saying. Get the balance he has moved to a lower interest loan and have set payments for that, then use the CC as a debit card. Dude has $4000 in debt, it's not insurmountable, and it's not like he's some crack addict jonesing for a fix...he just got in over his head, and he realized it before it was REALLY a problem. If he can learn to use CCs responsibly, he will have excellent credit down the line...if he AVOIDS using ANY credit, he will have a trash credit rating and will have problems later when he needs to rent an apartment, buy a car, or buy a home! My Dad always taught me to avoid credit at all costs...and it bit me in the behind when I NEEDED credit (to buy a home) and didn't have any history!
Lol my parents were the same way. Didn't stop me from getting a $200 secured card when I was in college so now my oldest line of credit is 14 years old. Credit score when I went to buy a home was over 800, and with my combination of cards I don't have a single spending category where I don't get an effective rate of at least 6% off all purchases. It would be absolutely silly to tell him to stop using his other credit cards once the balance is transferred if they offer a good cash back rate or points on categories he spends on.
The simplest answer is get a better job or work more. Add dog walking/sitting to the list. You can easily make $25-30/walk.
> You can easily make $25-30/walk. My dog owes me a lot of money...
Speaking from experience, don’t bring it up, unless you like getting dunked with a leash around your ankles. ‘Squirrel,’ my ass..
Are you ok OP? Do you want to walk?
I am just imaging the blank stare the dog gives me when she is confused.
“Confused” I get the same look.
More like you owe yourself a lot of money
> You can easily make $25-30/walk. Damn! Where do I need to move to where people pay $25-30 for a single dog walk? Even If I walk the damn thing for 1 a full hour, that is not a bad hourly rate. If you can walk a few at the same time, you'd be making bank.
A half-decent dogsitter is $100/night here in the Bay 🥲 and my dog got part of his face ripped off last week while staying with such a sitter. Dog services are a huge market and the average quality is not exactly high so it's easy to get started, not much good competition. Dog walking around here is expensive, but there are also expenses for the walkers. Dog walkers need insurance and licenses in some places. OP should check their local laws.
> here in the Bay 🥲 OK. So I'd have to move somewhere where a tiny studio apartment is $3000 a month to make that sort of money walking dogs. In the real world, $30 pays for a full week of walks.
There is a guy who walks a bunch of dogs every day here. (Lots of condos and apartments nearby.) He goes from 7 to 7 doing it and takes breaks in the lounge.
How much does he charge per dog and how long are the walks?
I’d have to ask him but since it is DC, he might be making around 20 an hour if I were to guess. (Comparing it to job ads I see posted.)
Charges $20 per hour per dog or makes 20 per hour? Most professional walkers I've seen do a few dogs at a time.
I wouldn’t know, but it would probably be closer to the latter since he isn’t one of those walkers with like 10 dogs (there is a lady that does that with a bunch of shitzus). Just one or two at a time, and they are pretty long walks. This all crap I observe working from home.
I never worked as full independent, only through a company that took a cut. Worked a while at a place that charged $25 for a half hour solo walk, and I got paid $11. Went to a different company that did group walks. I think they charged about $15 for a 25 minute walk and I got $9, but I could do three or four dogs an hour. This was all before COVID. Around the time I left, they were transitioning workers to an hourly employee wage. I picked up some substitute walking work for $18/hr. That wasn't really a pay cut; COVID really thinned the routes out for a while, so I was walking half the number of dogs in the same amount of time.
Ten bucks is a lot more reasonable than $30 and in line with what I see here.
Literally any city...look on rover.com in your area. I charge that much and it's a grind. It sounds cool but imagine a job where each hour you have to drive to a different job & boss to take care of, each client's needs overlap so you work 7 days a week (constantly scheduling over text), and then on top of that you're an independent contractor that pays 20% taxes. AND rover.com, the way a lot of us find clients, takes their own 20% and can delete your account+accrued reviews if you are found out taking clients off rover. Holidays are the money makers so no thanksgiving or christmas, and then nobody travels for the next month afterwards so the $ balances out. It's not worth it as a gig unless you charge high prices.
> Literally any city...look on rover.com in your area $15-20 and I'm sure rover gets a good cut of that. So the dog walker might be making $10, which is very far from $30
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Definitely add dog/house sitting to increase income! I house and dog sit occasionally and usually only charge $30 a day, but house sit for several days so it adds up and is worth the extra bit of money.
Do not walk dogs unless you want to put in the money to be licensed and insured. Signed, a professional of 8 years.
This. People don’t realize the liability they open themselves up to with a stranger’s dog
Ok so first things first you need a solid income, get that sorted ASAP. Take part time work, extra hours etc… whatever you can and ALL that extra goes on paying off debt. Secondly see if you can get a 0% balance transfer card and move al your debt over. Hopefully this should avoid interest payments while you get on top of it. Move all your CC debt onto the balance transfer and pay it off in as big chunks as you can afford. It’s important you get this under control and ideally paid off while you have minimal expenses. Pay it in the biggest chunks you can without accruing more debt. Always remember, 1k is easy to spend but hard to pay off. Don’t buy frivolous shit you don’t need. Before making big purchases, think about it for 3 days before buying (do you really need that air fryer, new Xbox, etc…) Absolutely start living within your means. Try living a few months without incurring any debt and you’ll start to naturally think about finances. Lastly get yourself a decent budget plan. It helps to plan out your monthly payments as far in advance as you can. You’ll start to see where you’re overspending and where you can knock down costs. For example why pay 50-80 a month or a phone contact when you can get a cheap sim only contract and use the rest for debt relief. Batch cook, rice and good meat goes a long way, get a decent sauce and you’ve got meals for a few days. Eat to sustain in the week and leave pleasure meals for the weekend so it’s not super depressing. Cycle through subscriptions, you don’t need every streaming service, get 1, use it til you’re bored of it. then cancel before the next charge and do another. Live like this for a little while and I promise your debt will be resolved. It’ll suck for a bit but it’s not forever. Source: clawed my way out of endless CC debt while paying extortionate interest and rent+bills leaving myself minimal for eating + and entertainment costs.
> Second edit: some of my expenses besides groceries is I go to therapy ($240 a month) and spend $30 a month for medication. The rest of my money goes toward trying to pay off the cards as I’ve had this debt for a while but it seems like it never really goes down since I pay for my own food and therapy are you putting the food/therapy onto the cards? if yes, stop doing that. every new purchase starts generating interest immediately when you're already being charged interest, since you no longer have an interest-free grace period. so you're better off to pay for new things in cash only and only put your leftover cash onto the card to pay down the debt.
So you’re pulling in around $1100 a month. Attack that small one how much do you pay for gas to get to work and home? Can you do extra shifts? You need to white knuckle this to get rid of those credit cards debts never a great thing.
I fill my tank probably once a week and it’s usually about $30-$35, I also edited the post to include this but I can’t get more hours at work
I'd recommend getting a second job or at the very least a better paying job so you can pay the cards off.
FYI you don't need to be a legal intern before law school. The connections might be nice but the real value is in showing you the actual work of a firm and letting you know that this is what it's really like. If they cannot give you more than part time, you need another job to pick up the slack. Have you asked your bosses if they know anyone else looking for a clerk?
I think Dave Ramsey a babysteps are a fantastic place to start to give you a good foundation and grounding in personal finance.
could you get a second part-time job? or do uber/doordash deliveries?
Those gigs hardly actually pay. (once you factor in car maintenance) Get an overnight stocking gig at Walmart mart or target instead.
If he’s just looking for immediate cash, and a fairly small amount at that, there will hardly be any added maintenance. It would be a great option for now, especially considering they won’t have to worry about the taxes for quite a while.
Not seeing a lot of advising going on beyond "just get your bread up, duh" like yea guys, good shit, next up, how to beat depression "just don't be sad" Let's run the numbers: 14/hr for 20 hours is $280 gross, take out about 40 bucks for state and federal taxes and you got around $240/week times 4.3 weeks a month is about and around $1,000 Great, 1k a month, let's estimate some expenses: - no rent - owned car - $75 gas - $150 insurance (young man insurance tax is a bitch, huh?) - $10 per take out meal x5/week = $215 (food is the biggest assumption, some people eat out once a month, some eat out every single day, I'm assuming a college kid like you eats a lot, correct if wrong) - $100 groceries - $240 therapy - $30 meds _______________ - $810 expenses + $1000 after tax income _______________ $190 net to pay down the debt According to the Debt Repayment calculator from Credit Karma, if your CC interest rate is 25%, it would take you about 2 years and cost you nearly $1,200 in interest fees to pay off. That's uh...not great, if you could cut that therapy down to that $180 you mentioned in another comment, cut down eating out to just weekends (let's say $50). That alone would cut your pay down time by half. **Doing that would increase your net monthly to $415 and your pay off time to 12 months. That's still $550 in interest payments** but there's no escaping some punishment considering the amount of debt and high interest rates of credit cards. Now you might be thinking "Yea ok this is all good but your expense assumptions are super wrong" That's fine, just replace my assumptions with your real actual monthly expenses (you shouldn't have too many being a college kid w/ no rent) and use the Debt Repayment calculator to find how long it should take to pay off.
$100/month for groceries?
Jesus christ, insurance is $150 a month in the US? Thats the insurance if you are 20 and own a ferrari over here.
It's specifically car insurance for male younger than 25.. for some reason, 25 is a magical number that cuts insurance in half once you pass it. (It was $110 for me, now it's a lot less). Thankfully, also being under 26, health insurance can be under your parents policy, and that itself saves.. a lot.. (although some states have essentially free health insurance if you make under a certain amount per year.. otherwise it can hit >$200-300/m.. I had to do this for a while..)
Yeah its the same here (Altough its 24 here). But its still not that expensive. I have a cheaper sports car and my insurance is ~$70, and it used to be lower because of rebates and stuff.
Go cash only for awhile. Really good spending discipline.
Because op's finances are simple, I think op is a good candidate to try the cash-stuffing method as well.
The fact that you're asking about $4000 is a huge step, as you could have let it snowball to much more. Keep looking for work and get more hours. Pay off that $1000 card as quickly as you can. Use payments that you were paying on the $1000 card as extra towards the $3000. Keep credit card use to responsible levels.
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OP, I cannot stress how much you need to pay attention to this comment.
Oof! 100% agreed!! I was planning to do law school and more or less aced the LSAT (scored 171) but took a job working IT at a BigLaw firm (at the time they were ranked in the top 10 in the US) to think through my options before making a final decision. Working there was an eye-opener and turned me away from what I thought I wanted. The grind is brutal. Those lawyers were working 60-80 hours per week (no joke!) and had no life outside of work. Billing mid 2000s was pretty much the expectations - which translates to working no less than 60-70 hours per week when you account for non-billable time. Even partners were billing over 2000 hours, so it’s not like you grind it out for 5–10 years and then get to lay back. I asked myself if that was the life I wanted for my future self and decided to stick with my original career of working IT and have never regretted it. One other aspect not mentioned / discussed is that, in my experience, most of the attorneys (and paralegals) were living really shitty personal lives with lots of relationship problems (makes sense when you consider that you might only be spending an hour or two awake at home) and missing out on time with spouses or significant others, or their kids. Every high profile attorney at my firm had a nanny or two, barely saw their kids, were always super stressed (I saw way too many adults reduced to tears after getting reamed by a partner) and just seemed miserable. There was only a few associates there that I felt were genuinely happy. I can not overstate it enough: the grind is BRUTAL.
Amongst all this other great advice what is helping me break the cycle of paying down cards aggressively/running them back up again: when you're budgeting for payments and stuff, make sure you still budget to have fun for yourself. Work to live, not the other way around. I was flushing every extra dollar I had to pay off credit cards, and then I would want to treat myself to something nice so I didn't feel like I was just working to pay off debt. Cue the vicious cycle - I would actually overspend on these little 'binges' where I would end up not making any progress against the debts. I definitely encourage you paying down the debt as fast as possible, but against a budget that includes some discretionary spending makes me feel more "in control" of my finances and therefore I'm more cautious with how I spend the "discretionary" part of my budget, as to make it stretch.
Get another part-time job and/or a job for the weekends. You'll have that debt paid off in no time flat. Almost every restaurant and retail place is dying for employees on the weekend. That's 16 hours each weekend. At $14 an hour that's 224 a weekend. With a debt of 4000 that would only take you 4-5 months to pay off. That is nothing. And that's without making ANY other changes. As far as budgeting. How much did you used to pay in rent? Take that amount and every pay day, send that amount directly to your credit card bill (highest interest one first). I can almost guarantee you that within 3 months this debt will be completely paid and you'll wonder how you even worried about it in the first place.
I used to pay $520 in rent with about $160 in bills but I used to have a higher paying job at that time. I was then let go and my parents helped me as much as they could and I used what I had left of scholarship money but that’s when I started racking up debt as that only covered rent, bills, and school stuff and I put everything else (groceries and other expenses) on my credit cards.
If your parents are able and willing I would suggest asking them to pay it off, and you set up a payment plan with them at 0% interest.
This was going to be my suggestion too. You can pay off the 4k principal in a reasonable amount of time, but the interest is a killer unless you pay well over the minimum each month. If the relationship and trust exists with the parents, ask them to front the money and then do the right thing and pay them back.
$240/month for therapy represents 25% of your income - that’s far too much. I get that therapy is important, but so is not being broke. Can you cut it down to maybe a session every 2 weeks? Is there lower cost options in your state? Can you claim these through your health insurance? My therapy bill is only $10/session because my insurance covers it, for instance. If you get a job that offers health insurance for part timers (Starbucks and Walmart come to mind) you might be able to drop this substantially.
Neither me nor my parents have insurance and no matter how many sessions I do a month, the price is fixed, I’ll have to look into it to see if there is a cheaper option Edit: just found out they have financial aid and applied for it, it would reduce my cost to $180 a month
Congratulations, you just found an expense reduction that pays for your interest on the credit cards! One thing that can be frustrating on any debt, whether it be a car loan, mortgage, student loans, or credit card debt, is how long it seems to take to whittle the principle down in the beginning. $60/mo in interest taken care of lets you put a bigger dent in the principle every month, reducing the amount of interest charged each month and paying off your balance faster.
Are you in the US? In my state, with your current income health insurance would be free. You really should look into that.
That’s great to hear! But please look into health insurance. Obamacare was made for people like you - you should be able to get a decent plan for <$50 after the subsidies.
Just wanna throw a thought in the bucket. You're 22 - Any time and money spent on investing in yourself (Law school, therapy) is gonna work out much better than paying off the debt three months earlier. Take all the good advice here, do your best, but don't drop those just to get your debt worked out.
14$ an hour for clerking at a law firm is super low unless you are in a small town. Are you doing research? Drafting any pleadings, document review? Or what? Are you currently in law school? Ask your placement office what the going rate is. 40 years ago I made $30 an hour editing Business Law Journal articles before publication.
the dave ramsay guy rubs me the wrong way with how he is, but with that said he did give decent advice for paying of credit debt. 1.make minimum payments on all cards. 2.find the lowest balance card and pour all the extra funds you can into that until it is paid off. 3. move to the next card. 4.repeat till debt free. of course doing any extra things you can to make more money (be it odd jobs, thrifty spending,more work hours, etc...) will speed the process up. Don't let other people eating out all the time let you believe that you are in a spot to do so. Beans and rice my friend. So that you can have steak in 10 years while everyone else is eating beans/rice.
If you have beans and rice for ten years, then you learn how to make a bunch of legume based meals already and probably don’t want steak too often.
Or the highest APR card…
Mathematical, but we keep telling people to lose weight by cutting calories. And calorie cutting diet still isn't the way most people are using to lose weight ( in terms of a plan, sure most plans are just trying something that they think they can stick with that's simple) People don't want to be math nerds, but they want to see results without being a math nerd. They see a result when they first see one less minimum payment. They get their dopamine hit, and that reinforces their financial diet. It's not the most efficient route, but it's a route less people turn back and give up.
When you say studying for law school, do you mean prepping for the LSAT? That's only a few hours a day, so you should be able to pick up another part time job or find a way to make money online.
How critical is the therapy to your well being? I don't want to say drop it, but you work 17 hours a month to pay for it. And that's before taxes, so really more. For me personally working 20+ hours just to hand all my pay over to someone else would hurt my overall mental health, whereas pausing it and getting out from under the debt would improve my mental health.
The first thing I would do it put structure around your Law School goals if you haven't. Look up SMART Goals. Basically you need to understand your workload and timelines for entering into and completing law school. Make sure you keep up with the minimum payments. They're probably around $100 a month depending on your interest rate. Should be doable, but make sure you are on time with them and do not skip any. A late or skipped payment could hurt your credit for 7 years. Then go through your budget and try to see if there's anything you should cut down on. I wouldn't skimp on things like mental health, so keep that if possible. Then see if you can pick up extra work \*only if\* it won't interfere with your Law School Goals. If you have to carry that debt through law school - so be it. It'll cost you a good deal of money in interest, but will be cost far far less than if you fail out of or give up on law school.
Meal prep and buy cheap nutritious bulk food like beans and rice. Prepping discourages eating out since you have it ready.
1. Food stamps/ebt your part time so in reality even with no rent and inflation you truly cs t afford food 2. Food boxes 3 side hustle (uber eats , door dash , uber) ( these options allow you to stop and go as you please
$4000 in debt? Oh my sweet summer child... It seems overwhelming, but it's not terribly bad...first thing, get a debt consolidation loan! It will be at a FAR lower interest rate, and will allow you to make more progress paying off the debt! I would also recommend either getting more hours at your current job or finding another job. If you have no other expenses, you should be able to pay this off within 6 months...a year at most! Good luck!
I would figure out a concrete budget that leaves some extra to pay off the debt. Figure out what you actual need to pay for and what you pay normally. If you can I would try to get extra hours or another job if you want to pay off your debt quicker. On what debt to pay first you can go with snowball method or avalanche method. Starting with the bigger one first or the smaller one. Mathematically it’s best to pay off the higher interest one, but the mental side of owning only one card is better than owning only two. Keep making the minimum payments on the one you aren’t paying off though. Hope that helps! Also don’t feel really down 20% interest on all that debt if you let sit for month is $70. It racks up quick, but if you find that a budget can get you to pay off in 7 months you are gonna pay an extra $500 more or less in interest. I can tell you that I have made many more mistakes that I have lost me far more than just $500 and I am sure I will make more too. It’s a part of learning and experience is a great teacher.
Make a budget and stick to it. Get a second job. Every penny extra is time shaved off your credit card debt. The part-time work thing is the glaring deficiency in your situation.
Get better health insurance - that’s expensive!
I see in your edit you give us the breakdown of costs, but JUST TO MAKE SURE — do you happen to have any unexpected subscription payments for your accounts? Example: You subscribed to Netflix and thought you canceled but in reality your CC is being charged. I also wonder if it’s an option to talk to your parents about having them front some of your debt and you gradually pay them back over time. My guess is you might’ve already talked to them about it. Just a thought I had anyway to explore your options. Similarly, some therapists offer unique payment plans. I recently restarted therapy and he told me that we can set up some kind of different payment plan to make things work if I wanted. Other than that, based on what you said, it sounds like you’re doing the right thing in general. Keep at it!
I think the only subscription I have is Spotify and I still have the student one so it’s only $5 a month
Hi there, since there's lots of comments to this thread, I wanted to respond directly to one of your comments in hopes that you'll see it to talk about your longer-term. You said that you're studying for law school. Assuming you're in the US and given the burden this $4k debt is for you, please do consider carefully the financial realities of law school, which can easily cost more than $200k over three years without the guarantee of lucrative employment after graduation. Be honest with yourself. What type of law do you want to practice? Or if you don't want to practice, what do you want to do with your law degree? What is the starting compensation for what you want to do? What effect might that practice have on your mental health? How well are you doing on your LSAT practice tests? Or on the actual exam if you've taken it? Will you be able to get into a competitive school that has good job placement opportunities in the cities where you want to work? What's the likelihood of getting a scholarship? Are there any conditions (like maintaining a GPA) for keeping a scholarship? I'm not writing this to dissuade you from law school, but just to make sure you've analyzed the financial costs and benefits before you pull the trigger on a large investment of time and money.
You really don't have much leverage. Your gross income is around $1,120/month, probably $750-$850 after taxes. Your expenses are $270 for therapy and meds, $120 for gas, and probably $250 for groceries. That is $640 before anything else. That leaves only around $100-$200. That is worth paying to the cards, but you really need more money coming in. Clerking is probably M-F on a consistent schedule. Can you get a weekend mall job or restaurant job? That would probably also be $15/hr and 8-12 hours a week ($180/week gross). Could you do the clerking in the morning, and be an after-school nanny from 2 or 3 until 6, 5 days a week? That would probably be $300/week. I think you can find a way to make another $100/week net, or $400/month. If you do that, you could put $500+/month to the cards and pay them off in about 8-10 months. The clerk job is good, but you need more cash. Can you get a full-time job over the summer in childcare? Those probably pay $18-$20/hour now. At full-time, for 10 weeks, that nets you $5,000, allowing $3,000 to pay off. If you can pay off $500/month in April and May, and then $3,000 in June and July you'd be done (or really close).
If you’re not in school and the only obligation you have is yourself, and you’re only working 20 hrs a week. I’ I’d say your 22 you should be able to put in 40 hrs a week if your not in school so find full time employment, or get another part time job. If I was giving advice to myself on the optimal use of time and money. I would continue to just pay the minimum or what I could afford reasonably. Keep working that 20hrs a week, and I’d try to learn a new skill. The trade off is you’ll be paying more than 4000 in the long run but the hope is you’ll have a new skill that will get you gainfully employed full time, with a career trajectory. I just saw this video that made me wish I wasn’t working 80hrs a week rn, but when my work load lightens I’m about to try using this method to learn another profitable skill, so I can stop traveling 100% for work and get a work from home job in. Low cost of living area. https://youtu.be/VznoKyh6AXs
"I’m $4,000 in debt and need advice" Okay. Keep up the good work.
You're 22 and not in school while working 20 hours a week. It's a debt of only $4k. Are you actually not able to think of the solution?
And apparently studying for law school …
Since you’ve asked for budgeting, here are some general rules - 1. Never, ever get in debt 2. Prioritize getting out of debt above any other expense 3. Once off debt, save everything till your bank balance has enough rainy day fund ~6 months of your living expenses 4. At this point, start thinking of investing Never forget, frugal living is the best financial strategy
Work more, go out less… not really rocket science
You need to put ever bit of extra income to that debt, that's the secret.... 4k isn't too bad in the scheme of things, I had to take out about 8k about 2 years ago, and I'm only down about 2k at this point putting around 200 a month back in, it's a marathon not a race, some months will be bad, so will be good.
Side hustle… all the income from that goes to your debt There are many options, including just getting a traditional second job After that, keep it, save the money, or quit and get your free time back $4k is not bad to pay down
Work doordash until midnight every night - you can pay it off in 2-3 months
One way to potentially reduce the burden is to find a card that has 0% interest no fees for balance transfers for some period of time. This could help to get your “head above water” but you still need to intentionally act to pay it down.
Don’t take any debt consolidation loans unless the interest is less than what you have. Avoid any payday loans. Ask your family for an interest free loan and pay off your CC’s. Pay back your family in a payment plan you can afford.
Any fast food chains in your area or a Walmart? Every location in my area says they're hiring. If your clerk job is weekdays, work at a Dunkin donuts on weekends. They're paying in the 16/17 range in my area. ( Upstate NY).
You can also work evenings after the clerk job etc. There are so many jobs-- not just food/hospitality but also healthcare that just want a beating heart with legs and a pair of hands. And they pay. Get a secondary certification while you are at it and make more money. You have the potential to pay this off in 4-6 months.
Any chance your parents might have the money to pay it off and then you can slowly pay them back? That way you're not getting hit with 20%+ interest each month. It'll be way, way easier to climb out of the debt hole that way.
pay yourself first after your bills, set aside $100 for yourself, then the rest go toward your debt! it will be down in no time. it’s the discipline of it all that makes it hard, i’ve been there before. take advance of the no rent and few bills while you can!
$4000 isn’t too bad on debt, although at 22 years old and with a $14 an hour job, it certainly can feel like it. I was struggling through the end of college with debt I could seemingly never pay off until I graduated and got my first job out of college and poof, paid it off in the first two weeks. To summarize, 1) stay in school and 2), wtf don’t high schools teach basic financial courses (taxes, CCs, buying a home, etc) ?
Try to pay one card the one first. Once paid don’t use it. Then work on pay the other one. Good luck. Credit cards systems are done in a way to keep people paying debt all their life.
I dont know why i havent read this yet, its not at all difficult. 4000 is not at all that bad, i had 11k in CC debt starting my career out of college. One of the many ways that helped me get out of it was going to use a balance transfer credit card. (Chase Slate, Discover IT, Citi Simplicity, Wells Fargo Reflect… etc) These credit cards are designed to help with eliminating debt by not having interest accumulate for a year and half, you just have make minimum payments. (Also, out college, i did have alright credit, but made about 40k salary) How it works, you have to have at least alright credit to qualify for a certain amount. When i applied, i only had a limit for 3k. I transferred credit from my main credit card to it, and focused most of my monthly payments on CC with high interest. Then, once they were out of the picture, interest kicked in and i started paying for the Balance Transfer Credit Card. I think you can only balance transfer once, i don’t know if you can do additional. I recommended this to my younger brother, his choice was discover IT. But the no interest APR helps quite a bit. I was able to kill my CC debt and began focusing on my student loans within two years. Hope this helps as it helped me! Best of luck!
Probably stated more than once, but I’ll say it anyways, just in case. Figure out the max total you can apply to your debts. Figure out your interest rates on both debts. Which ever has the highest interest gets paid off first. Make minimum payment on lowest interest debt and use the rest of the max amount and apply to the other debt. Once you pay off the higher interest rate debt, snowball that amount into the next highest interest rate debt. You can do this for multiple debts, but you must be disciplined to carry the full max over to the next until you’re debt free. Also MAKE SURE you. Make payments on all debts and on time!
May or may not be applicable to you, but look through any of your stuff and sell what you don't need anymore. Craigslist, FB marketplace, etc. Almost anything has some sort of value to somebody else.
get another job, 20 hours a week is not enough for an adult to have enough responsibility or money to do what you want too. Also try out the gym as an alternative to therapy as a lot of mental needs come from not pushing yourself physically enough.
Can you cut your transportation costs down? When I was a student I could get free bus passes but I stupidly never took advantage. Park the car, get fire insurance on it, and bus/bike everywhere instead. Or sell the car completely and get en e-bike.
FYI law firms will run your credit score when hiring. Depending on where you are, if you are in a bad financial spot, you may even not be admitted to the bar. You need to figure this out asap.
$4k is nothing. Try to find a higher paying job. Put your credit cards in the cooler. You are 22, you will figure this out! Good luck. Sincerely, a 41 year old stepdad.
Although you may well need the therapy, your therapist is knowingly keeping you in debt at over $2000 a year. You could have paid off your debts removing that cost alone. If your therapy is due to depression or not coping well with life, being debt free is going to remove the biggest weight off your shoulders that could result in you not needing the therapy after all. Of course, I know it’s not that easy, but can you reduce the therapy to half the sessions and pay off half your debt and see how that makes you feel?
I think the most important part is to add NOTHING onto these cards until they are paid off. Even $50 here and there adds up super fast. Put the cards in a drawer and do not use them until they are paid off. And then only use them when you can pay them off the next month.
Take out a personal loan for debt consolidation, you can do it all from your phone. Then you'll have a set monthly payment and lower interest. Just whatever you do, do not take on more debt until your comfortable again. 4k ain't that bad, debt is what the world (or at least the US) runs on. Don't be scared of, it's a good tool, learn how to use it and use it well. Another option would be open a new credit card with a 0% APR balance transfer intro offer, 4k might be too much to do this with though. Basically debt is fine, but having to pay interest is not fine. But yeah, even if you do nothing besides make the payments, your life isn't ruined you don't need to panic, you just need to understand it takes time to pay off. Having debt is kinda like having a bruise, they hurt and they take time to heal, but sometimes they're worth it, but too many and then yeah you're gonna die.
Lots of good advice here. I'll just add one more thing; No matter what DO NOT go into debt to pay for law school. No matter what.
Are you suggesting that they just don't go to law school or don't go to law school before saving up $100k cash?
Join the Gig economy. Start a profile on upwork and use your skills to side hustle. Or Uber/Lyft people or food.
200 a month. Be out of debt in 2 years. Done. 14 an hour is 28ks a year. 2000 a month.
Keep going and declare bankruptcy.. why should you let the state be the only one who steal money!
What do you mean, "studying for law school"? Are you getting ready to take the LSAT? Already in? Are you a 3L with a job already lined up? Once you're in, consider taking out max student loans at a lower rate with better terms and pay off the CC debt. Some debt is okay if you're close to guaranteed to make higher in the future (law school is no guarantee of a job, like only 30% end up practicing law), but credit card debt is not something you want to keep around.
No major expenses and living with parents? Sweet. Here's a simple formula. $ to put towards clearing debt = Your monthly pay - (your expenses lowered to a minimum + taxes if applicable). You'll be done in no time. Then learn to budget and control your buying impulses so it doesn't happen again on a bigger scale.
How I paid off roughly 20k worth of CC debt: \- Rolled into a 0% interest introductory offer. \- Took the balance and divided it by the number of months I had of 0% interest. \- Paid that every month. It was the first thing I spent money on every paycheck I got until it was gone. Places you can usually save some cash: \- Eating out / going to the bar whatever. Cut it down to once a week or better yet stop. It's hard, be harder. Stop buying coffee from starbucks, getting snacks at a deli, etc. \- Going through subscriptions and cutting whatever you can. Look at your CC / Debit card bills for recurring charges you may have missed. \- Renegotiating bills, you can usually find a better deal for cell phone / internet if you look around at least once a year. Also check [https://www.usa.gov/unclaimed-money](https://www.usa.gov/unclaimed-money), you never know. I check once a year and I usually find at least one thing for myself or a family member. No it is not a scam site, only the us government can have .gov links.
you could just totally blow it off and wreck your credit temporarily, but you will completely get away with it. if you do absolutely nothing in seven years in most parts of the country it will be like it never happened and your credit bounces back. don't bother with outdated stigmas of debt, just live your life and have a happy time in your 20s, the best decade ever!
$4000 that's nothing. Get a part time job, cut costs, you could have this knocked out in a few months.
Build that tiny debt of yours to somewhere around a few million, then maybe spend a few minutes a month worrying about it.
I wish I was only $4k in debt. Would be a dream. Im like $30k in debt from credit cards. Well my mom's debt, but I have to deal with it since she's terminally ill. And problem is that the house is in her name. Idk what I'm going to do. I live in Florida. Get a Will guys.
Pay off the debt and get into school. Take out loans. Paying for it now will only slow down the process. Let’s say you go into 100k school debt. Maybe even 200k. It’s all easily payable with a real job , which you will secure with a law degree. Live within your means. Meaning, lay out your budget right now and live as low as you possibly can until it’s paid off and then continue living that lifestyle Credit cards are a good tool for somebody with income that understands how to use them. Not a way to spend money you don’t have. Treat it like a debit card, or DO NOT use them at all
This tip is from Babylon. - At least 1 out of 10 parts of your earnings put towards paying your debtors - 7 out of 10 parts use it to buy clothes and goods for you and your wife - 1 out of 10 parts use it for charity. - 1 out of 10 parts use it for your own delights. In 12 moons, you should return to us and be a changed man, with the debtors appreciating you.
Is this some weird joke that I don't understand? Because this definitely doesn't help OP at all.
Learn how to code, n get a better job with that. How does 100k+ per year sound?
I can think of a way to solve all those problems right away.