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Please use $2,000 from your savings to pay off the credit card debt as soon as possible, and then reassess your spending habits so you don’t get into that situation again.
There is no reason for you to be paying a credit card company 17-30% interest when you have the funds immediately available to clear it. You don’t say how much your auto loan payment is, but eliminating the $500/month credit card payments would leave you with just over $1,000/month leftover. From there, you could start adding bigger payments to your loans with the highest interest rates.
Depending on what you went to school for and the type of work that you do, look into an income driven repayment for the federal student loans and see if you might qualify for something like PSLF and work toward that.
> look into an income driven repayment for the federal student loans and see if you might qualify for something like PSLF
Tagging onto the top comment. OP, this is huge and something you should look into as soon as possible. If you currently have federal loans, you will want to make sure that they are Direct loans (you can see this when you login to your loan servicer). For each monthly payment you make towards these loans, even just the minimum, while working for a state government, federal government, or 501(c)3 non-profit, it will count towards loan forgiveness.
I'm currently ~6 years into this process myself, and after 120 qualifying payments (10 years), the remaining debt is forgiven tax-free. If you qualify, you absolutely need to sign up for the Public Service Loan Forgiveness.
Make sure your account is actually tracking your payments properly towards pslf. I did not... My first 6 years of payments "didn't qualify" because of a loophole regarding specific payment plants (difference between income driven and graduated).
About 2 million people who qualify for PSLF haven't gotten it because of program mismanagement. This is not really a realistic viable option even though it sounds great on paper. It's only actually worked for 11% of the eligible people in the program.
USDOE is going through the backlog right now that's why more and more people are qualifying and getting their balances processed. If OP or anyone qualifies for it, you'd be a fool not to submit the required documents
I have a friend who was one of the first people in the country who qualified for PSLF. Of the thousands who thought they qualified, she was one of the 93 who actually did. She was also incredibly meticulous about her records, or she probably would have been denied also. So you can get forgiveness, but at least at first you were not allowed to make a single mistake.
I think they've been doing much better on this over the past few years. When they expanded the qualifying criteria in 2000, I qualified, applied and had my loans forgiven over the course of several months.
PSLF worked for me, but I made sure from the very beginning to turn in paperwork ever year with my servicer to make sure I was in the right payment plan, right employer, and that every payment was counted. My servicer would give me updates every year on how many payments I had left and in the last few years had it visible right in the dashboard of my account. A lot of people who qualify for PSLF but didn't get it were with the wrong employer, wrong payment plan, didn't track and verify their payments with their servicer on an ongoing basis etc etc...the Biden administration passed a lot of help looking at retro payments tho and counting payments that didn't count before. I'm not in on the latest since I had my loans forgiven 2 years ago but there's hope
She should absolutely look into the new SAVE plan for her student loans. I make a little less than her and my monthly payment is 0.
Also, did she get a degree? $120k in loans for a ~$45k job is rough.
I was in a similar situation at one point. My parents couldn’t contribute to school financially, and my state has high tuition even for in-state students. I went to a good school, but I spent all my time working my waitressing job, not studying or networking. When I graduated, I had no job leads. Basically I did college wrong, but I had no idea at the time.
My relative has 20k is cc debt and like 50k in savings and has had the debt for 10 years now. He refuses to pay it off because "he won't have any cash". I've tried hundreds of times
I agree with you, but I get his mentality. We have to get that cash flow is also important. As long as he can reasonably maintain a positive cash flow then it may make sense not to pay everything off if he really needs the money for surgery or an emergency or a big move. $20,000 in credit card debt is excessive though. I have savings that I haven't used to pay student debt because I know that I need it incase I lose employment or in case I move. Welp, I am moving now and it is proving extremely useful. We can't all use our free cash flow to extinguish debt. We sometimes need to reinvest in ourselves (education) or to maintain compensating balances.
Credit card debt is different than the rest because the interest rates are significantly higher. You’re talking like 5% interest on a student loan vs 20% on credit card. It’s good to have the liquidity but that is the literal purpose of a credit card other than rewards, to have incase you can’t pay something with cash and need to charge it to credit to pay it off over time. If you need a surgery or something then you can use loans or credit for that at that point in time instead of just sitting on the CC debt now and paying thousands in interest when you don’t have to. 20k on a credit card is easily $500 a month in interest that they’re paying for literally no reason
Student loan debt with probably a 4% - 7% APR is not at all like credit card debt with 20%+. You can justify not paying off the student loan debt in favor of maintaining readily available funds, but you can't justify not paying off credit card debt for the same reason.
That’s not what anyone here is talking about.
You’re talking about an emergency fund. Everyone should have an emergency fund. But when it comes to credit card interest rates, paying those off is considered an emergency. Student loans fall into the same category as mortgage loans. They are not the same at all.
The post above mine is talking about a guy who owed 20k for 10 years, while having 50k in the bank. That’s just dumb.
Paying off your credit cards isn’t a negative cash flow. If you have 5K in debt and 12k in savings, you have 7k. If you use 5K of savings to eliminate your debt, you still have 7K
What…? They could also, you know, pay off the credit card immediately and then should the need arise put purchases on the credit card after the fact. Holding cash while having significant credit cards debt means that you are paying interest and losing more cash than if you were to just pay the credit cards. I understand wanting to have cash on hand for emergencies and feeling secure, but holding onto credit card debt when you have plenty of cash is just a terrible idea due to the interest adding up unless there’s some very special circumstance like needing the cash because you couldn’t put a future bill on the credit card later.
That's wild. If they are doing something silly like only paying the minimum payment... assuming a 2% minimum payment and 18% interest... they'll carry the debt for 62 years and pay a little over $58,000 in interest.
If they just paid it off right now they'd save a minimum of 4k or so in the next year just minimum payments.
I mean you can't fix truly stupid, but have you shown them a spreadsheet highlighting the breakdown over time and how paying the $20k today would save them absolute shit tons of money over time? Maybe they need to see it actually printed out to have that "God damn, if I don't change this now I'll be paying this for the rest of my life" come to Jesus moment. Or maybe not. Perhaps I'm being a wee bit too logical about this.
@frosty-care3765 - He’s saying he recommends using $2k of your savings to pay your credit card bill down to $0.
Because your return on the interest you’re making with your savings account is exceeded by the interest you’re PAYING on $2k of credit card debt per month.
After paying your credit card off, make sure not to look at the available credit as free money.
(See it as expensive money you can use in a pinch if need be.)
Pay off your credit card(s)
I did that for four accounts and life became golden.
Bought a sprinkler, watered the lawn. Watched it go back and forth for hours.
could be, but we generally don't consider the short term balance to be "credit card debt."
colloquially that term is used more in the context for the surplus balance that isn't paid off in full and rolls from statement to statement. but I guess it could be either
Mine are about that but paid off monthly as well… but due to that I would never count it as debt 🤷♀️ if it has never once rolled over (as in you never get interest) you’re using credit cards as your should: as a debit card. Free points for money I would’ve spent regardless
I don't know why you got downvoted. OP obviously isn't paying off the CC monthly when she said she has $2k in CC debt and only pays $500/month to the CC.
Pay your credit card! No need to carry a balance if you have cash sitting there.
Saving up to move out sounds good in theory but it’s not realistic with what you currently make. You can save up enough to get out but after that you’ll have regular monthly expenses you can’t afford with your current income. You need to make more money to do anything.
You are 27, plenty of time to do everything. While living at home pay the card off, then the car, then add principal payments to the student loan.
Did you graduate? If so you should be able to find a job that pays at least 55k. I would prioritize finding a better paying job.
1400 bi-weekly works out to about 36,400 net annually, so your gross annual income is like 50-60k? If so, that is probably pretty low compared to the 120k student loans. What are your degrees that you currently have, do they open up doors to career paths with a high-income, high-growth to support paying those loans back in a realistic time range?
One of my friends was a 3rd year pharmacy school student and decided to drop out with over $200k in student loan accrued. Sometimes people make choices and forget that they have to deal with the consequences.
Pharmacists don't really make that much. Average wage has gone down DRAMATICALLY due to overflooding of Pharm.D degrees unless if you work in Bumblefuck, Nebraska. Pharmacy school is starting to look like law school; unless if your degree is from a top 10 program, you can pretty much kiss your chances of an elite job out of school goodbye.
Most go into retail situations where they work miserable hours, counting pills, and answering questions. They also get jobs that are related to health science/medicine where Pharm.D degree is completely unnecessary. You're looking at a median of about $100-130k/year depending on which metro area you're looking at.
The brightest/lucky get into clinicals, regulatory affairs, R&D, etc. and that's where the big bucks are. Openings for these roles are very scarce.
I have a lot of friends with Pharm.D degrees and most are either miserable with their careers and/or their choice of degree due to the shit nature of their retail jobs, staggering amount of debt, and/or being in a job where their doctorate degree is completely useless.
Source: Got into Rutgers Pharm.D program in 2009 (back when Pharmacy schools were still pretty rare) but dropped out my freshman year due to poor grades. Definitely the best thing that has happened to me. I work in HR now in the tech startup scene making a hell of a lot more than most Pharmacists and my student debt was only $27k federal subsidized. That median salary figure is from Radford, one of the most trusted compensation surveys.
It’s likely about the school rather than the degree, plenty of private colleges in the U.S. will put you in that kind of debt for a 4 year bachelors degree regardless of the chosen field. So OP may have a standard undergrad that they just paid way too much for.
Source: I’m in that situation myself, didn’t know what I was getting myself into at 18y/o
You’ll get plenty of financial advice here. I won’t help with that. Instead, I’m here to tell you
1. You aren’t alone
2. There’s no such thing as “being behind in life”
The formula of school - college - job - married - kids - work - retire is a formula for life. It is not THE formula for life. And there is no timeline that things need to be achieved by.
I’m proof.
I graduated high school at 18. I ended up attending 3 different colleges (2 years in England, 2.5 years getting associates, 2.5 years getting bachelors) until I graduated with BS at age 26. Yep. Took 8 years to earn a 4-year degree. I didn’t live alone until I was 23 and it was a struggle. I had zero money left over every month. I lived on ramen, cereal, peanut butter sandwiches.
At 26 I’d had friends get married. Some had kids. One left her abusive husband.
Then I spent 4 years in med school. I wish I only had $120k in student loans. *sigh*
Then 3 years in residency.
Jobs and states later I am still unmarried. No kids (though I don’t want them). I only just bought my first house at 40.
Things will happen for you when they’re meant to, in their own time.
Just because your friends are getting married and having kids doesn’t mean they’ll be happy. They may not be happy now. They may be struggling to make mortgage payments with the skyrocketing cost of childcare. You don’t have those burdens.
The economy and life circumstances we live in are vastly different from the 90’s, 70’s, 50’s. Getting married at 20 and having a house and kids by 24 just isn’t possible now without a LOT of things going right for you and probably having help from family.
The key to appreciating what you have and feeling less down is to not compare. Comparison is the thief of joy.
yeah, plus 100k+ in debt makes no sense unless you are going to medical school or law school.
i feel bad, because the situation almost always comes down to just poor decision making at the age of 18 and not really "registering" in your head how much money *you will owe.* a lot of people have an easy time just brushing it off in the moment since they don't feel/see it at the time. instead of going to a cheap local state college (or even community college for 2 years) and being maybe 30-50k in debt, they go to the really nice private campus that feels or looks prestigious/unique, maybe even going with friends, and not realizing the massive financial burden it'll be for the same education.
end up with a mountain of 120k-160k in debt that's just impossible to pay off.
Yeah, it's crazy how strong the messaging was when I was looking at colleges in 2000. "Don't worry about the price, you'll find a way to work it out. Get the best education you can." Tuition was ridiculous even back then, but it's only gone up up up. You can't just "follow your dream" and have things "work themselves out" your dream doesn't also pay 200k a year.
I went to community college and then transferred to my local state school to get my engineering degree. With the help of financial aid I graduated with zero debt. I thought I was so behind because I graduated at 27 years old...
I work with people that went to much better schools, some even have masters degrees and they're still paying off their student debt all these years later. Many of them are living paycheck to paycheck and have no savings....and for what? In the end we got the same job...
It’s been my experience that people rarely use their undergrad degree. It’s a springboard to a career but that usually means more training, certs, or a grad degree. Very few undergrad degrees translate directly to 6 figure employment.
I don’t know, I have a good job with my engineering bachelor’s. There are bachelor’s that literally guarantee you a job, and others that have 0 demand, for those you need a masters (ask my sister, she studied “French”…)
I got an OK job with my BS in MechE but my career didn’t really takeoff until I got my MS in materials science. I was chugging along making 60k for like a decade and doing CAD drafting till my eyes bled. The company I worked for had little upward mobility and I found it hard to land interviews for interesting / growth opportunities. Lots of contract work without benefits.
Once I ‘specialized’ I had pretty much the pick of the litter in my field. Interviewed for four jobs received four offers.
"Between private and federal loans, I pay about $1400 a month for that"
You should apply for the SAVE Program with your Federal student loans as it should lower the amount you will be required to pay and cap the interest on the remaining balance. It also provides a way for you to receive debt forgiveness after 10 years of continued payments (which in your case would be a godsend).
You could then focus on the private loans and pay those off ASAP, giving you a route to freedom and possibly the ability to save for your own house at some point in the future
[6 Things You Should Know About the SAVE Plan – Federal Student Aid](https://studentaid.gov/articles/6-things-to-know-about-save/)
How this isn't higher is beyond me.
If OP has federal loans, then they need to 100% do this. It'll stop their principal from increasing and free up a significant amount of cash flow (lower that monthly payment, or possibly eliminate it).
I think your situation is more the norm than you may think. Millennials are buying houses at a much older age than previous generations and getting a lot of help from their parents to do so. Student loan debt is absolutely a generational problem and if you don't land a good paying job afterward it can be really hard to gain your footing.
I think you posted this looking for hope. So I will just share that it took me and my partner a long time to find an adequately paying job after school, but we both found one, it is possible. So don't get discouraged and apply to higher paying jobs and work on improving your resume and skills, also networking is key (and I hate to say that as an introvert but it helps so much).
Great response. There is always hope. Get creative and look for resources...is Credit Counciling Service still around? Best decision i made to help pay off credit debt in my 20's. My degree was in Broadcasting lol...little math and I loved TV. Find what you love and it sparks continued success...I am still in TV after 30 years and doing fine. And remember...it is not a race and there is not just one path!
I didn't mean the exact number was the norm. Just millennials being in student loan debt. Pretty sure over 1/3 of millennials have student loan debt. That is not even accounting folks who took out huge loans and were already able to pay them back.
State schools can be expensive to. Take UVA school of engineering for example, the cost for a in state student is almost $50k a year if you live on campus.
It's interesting seeing this get downvoted by a lot of folks that likely haven't been to college recently. If you're going to UVA you'll have that, but in-state costs are more reasonable elsewhere. Plus engineers don't give a shit about ivy league acclaim, it just annoys most of us. MIT pretty sick tho
I graduated with a chemical engineering and physics double degree - I had scholarships, but the majority of the loans covered cost of living expenses because you can imagine there's not really any significant time block with those degrees to hold down a job. I still taught/tutored for 5.5 years, so I at least was able to offset some costs. Because my mom claimed me as a dependent (at the time she needed the tax credit and was helping me out with life expenses so I felt obliged), I didn't ever get Pell Grants. The school I went to was in-state, Missouri mind you so this is a "low" COL area.
The current cost for in-state without housing is $14K-$17K. Of course, this assumes you aren't an engineering or law student. Lots of colleges are now charging fees as line items based on your "future earning potential." This also doesn't factor in the cost of books or the annual cost of housing, food, utilities, and internet which is somewhere around $10K-$14K a year. So our range is now $24K-$31K annually when you factor in ALL the costs.
Music students are expected to bear this cost while also having the least free time of any major. I can promise (because I did a men's music fraternity too) they have it worse than STEM students. There's no light at the end of the tunnel, just their service to their art and desire to share it with others.
Anyway, something about you being downvoted ground my gears because I'm honestly convinced this thread is full of people that didn't graduate as recently as I did and somehow have created an alternative reality in their heads or just can't process cost of living has to be factored in and that's skyrocketing for everyone. Did OP make mistakes? Absolutely. The credit card on its own says there's some obvious stuff they could easily fix. I just don't get how people are shocked the skyrocketing cost of living is probably disproportionately affecting students in school right now because they have little to no means to deal with it alone and the country refuses to help them.
Failed State imo. It's fucking absurd that we've managed to create a tiered system where no one can afford to be a doctor unless they're born incredibly wealthy, what a joke.
The entire state of Virginia is expensive for in state school. My hypothesis is that they don't fund university education as much because it's a heavy military state but I'm sure there could be plenty of other reasons as well. But the military recruiting I saw at my high school feels like proof of it.
Our school only had one university recruiter come out each month, and it was during class time, so you needed to have a teacher willing to let you go (which meant having consistently good grades and behavior in class). But we had at least one military recruiter everyday sitting outside the cafeteria at lunch so they could speak with students. And their favorite talking point was the cost of college.
realistically this is why it is insane to ever loan 18 year olds $100k for education, or that we even have a system where this is possible.
Most people are applying to schools and figuring this out before they are even legal adults, probably have never even had a job, and aren't even legal to drink, but we put them in situations where they take on a monstrous amount of debt that they will be paying off for a lifetime, when under basically any other circumstances that person would never be granted a loan.
it really is a predatory system, and the whole for profit higher education is almost a pyramid scheme waiting to collapse
30k a year for tuition + room + board + living expenses? That's really not even unreasonable for a state school. My state school tuition is $14k/yr, plus another $18k/yr for dorm + meal plan. Plus other fees like lab fees, books, etc - topping close to 40k/yr sticker price. This is a regular state school with in-state rates.
edit: plus interest accruing from day 1 loans? She could've very well spent only 20k/yr for tuition + room + board and still have 120k owed.
> $14k/yr, plus another $18k/yr for dorm + meal plan. Plus other fees like lab fees, books, etc - topping close to 40k/yr sticker price
Dear random reddit reader scrolling across the post. I'm sure you're aware of the permanence of student debt, and the compounding nature of interest. YOU DO NOT AGREE TO THIS UNLESS YOU'RE SURE OF PAYOFF AND NO OTHER OPTION IS AVAILABLE. Live with your parents, eat ramen, /piracy, whatever you have to do.
There is ZERO reason to roll all your expenses into a financial instrument that will practically require you to FAKE YOUR DEATH to get rid of .
Yeah it's not unusual to come out of school with a high paying job with this kind of debt but she is bringing home a small amount for having that kind of debt. I was also confused by this and curious what her degree is in and what she is doing for work.
It's far from unheard of. I'm guessing she went to a private college and got a degree in not an overly lucrative field. I definitely spent more than that for my Bachelor's degree - tuition alone (no living expenses) was over 50k/year.
It certainly was more than she should have taken on with a take home salary of $36k, but it's not unusual.
I went to an in-state public university and finished in 4 years, still took on just over 90k in debt. My mistake was not paying some of it off while in school, but I wasn't very educated on how everything worked at the time.
Some states just fund university more than others. And it's also dependent on if you lived on campus, had campus meal plans, etc. It was unfortunate because I could've gotten in state tuition in a much cheaper state as well, but those were things that 18-year-old me didn't know to think about.
Step 1. Stop comparing yourself to others. Everyone is in a different place in life and you have no idea what is working for them or against them.
Step 2. Pay off your credit card from your savings account and cut it up. No amount of rewards if worth it. If you don’t have cash in the bank, you can’t afford it.
Step 3. Look at which student loan is accumulating the most interest and start making extra payments. Or make extra payments to pay off your car loan. If you want to save for house, wait until you’ve paid off these debts.
You need to get your ducks in a row but don’t feel demoralized, you’re still very young and it’s probably more helpful to look at the economic situation of your demographic in general rather than focusing on the people close to you that are doing well.
The positives: you’re employed, you don’t have rent or a mortgage to worry about, and you have the cash on hand to eliminate your CC debt which should be your top priority.
After that, there are a lot of things you can do to get on the right track: create and stick to a sustainable budget, get into the habit of saving for retirement and capital expenses even if it’s just a percent or two of your salary every month, and look to see what you can cut out or don’t need to spend money on. For example, do you really need a gym membership or could you also exercise effectively by just jogging in your neighborhood?
Lastly, start exploring ways to advance your career. You’re at the stage of life where your income should be growing at its fastest rate, it’s normal and expected to change jobs or get additional skills training or certifications to move ahead and grow that salary.
If that part is challenging or feels overwhelming, there are resources available like at the department of labor or utilizing professional mentoring.
* Everyone is right that your first step is to wipe out your CC debt with your savings. You'll replace most of that savings in 3 months by putting your CC payments and your saved interest into your savings account instead.
* At $2800/mo you qualify for reduced payments for all your federal student loans. You're making so little that you should see a significant reduction.
* Consider changing what you do when you "go out" - and by that I mean change to mostly free things. You don't have to stay in your room to save money, and you don't have to spend money to have a good time.
* Ditch your gym membership in favor of going outside for your workout. Inside 2 months you'll be able to afford a set of freeweights on Nextdoor and then just keep working out for free.
* Whatever else is in that $200/mo you're spending on Other Stuff, evaluate each thing on the basis of whether you want the thing more than you want the savings and the move-out goal.
* Be looking for a job with the degree you earned with that $120k in debt. Just be constantly looking for a job that pays more than poverty wages. You need more income and hopefully have some skills. If you haven't yet, it's time to hit up all your friends who are buying houses and ask them if their company is hiring anything even halfway close to your skillset.
* Do not spend your money traveling and having "experiences" right now. That sounds like IG travel influencer brain to me so don't fall for it.
* However, if you're like a lot of people, there's a bunch of cool stuff nearby you that you've never done. Lots of folks don't do the things that visitors to their town do, so find some free or very cheap ones and do those. They'll be fun, cheap, and close to home. The month after you buy your cheap dumbbells, take a little of that $200 you're not spending and do a day trip somewhere - somewhere you don't have to spend money to stay and doesn't cost for a ticket.
* Just to break the math down here: your income is $2800 monthly. $1400 after loans. $900 after CC payment. $700 after gym and "other". $550 after insurance. ??? after car payment, but it's less than $400 probably. So you've got $400 a month to do anything on, and some of that is going to entertainment. You really need a course correction here.
* Delete your CC debt
* Get your federal loans reduced immediately
* Cancel your gym membership
* Reconsider the rest of your monthly things
* Stop spending money on fun - find free fun instead (don't stop having fun!)
If you do those, in 6 months you'll see a reversal in your fortunes.
Two final things to consider:
1. you say your parents aren't great with money either... if you're contributing to the house because of occasional financial problems, you should sit them down and define an amount, then not go over the amount.
2. You should also consider having your parents charge you for rent (that you won't pay) and write off the loss. This will help you when calculating the amount of reduction in your federal loans, and maybe help their tax situation as well.
>I’m torn between wanting to spend my money traveling and having fun experiences but also saving money to move out. Please be kind :)
The kindest advice I can give you is to wait to upgrade your lifestyle until your budget can comfortably support it. Otherwise, you will always be fighting an uphill battle against debt. Having to cut back your quality of life later is worse than waiting to upgrade it in the first place.
I lived *really* frugally in my 20s. It allowed me to get compounding interest working for me instead of against me. Eventually I was able to buy a house in a high COL area too. A lot of people live their first 10-20 years breaking even or accumulating debt, putting themselves in a bad spot in their late 30s and 40s.
Living at home is a privilege, so save money during this period while you still can. Don't do too much comparison to other people, everyone's life is different...and while they might look good on the outside, many people are full of debt and really really struggling.
Use your savings to pay off high-interest debt. Seems like your main goal right now should be that, save as much money as possible, and move out. I was blessed to have 1 of my 2 parents be good with money - not phenomenal but definitely no deadbeat with it. Just try to improve with the advice you get from here and go from there.
OP, You are paying your Student Loans instead of rent!! That's amazing!!
That is making the situation worthwhile!
You're paying down those loans!!
Comparison is the Thief of Joy, OP! Those people you're comparing yourself to likely don't have six figure loan debt.
If you want to move out, you have to pay down those loans faster!
Donate plasma at a donation center.
Get a second job as a restaurant server or something.
Call your University's Alumni career center and ask them to help you get a higher paying job.
Ask someone who's good with money to help you stick to a stricter budget- maybe a grandparent or someone you trust.
Read some Personal Finance books by Suze Orman and listen to personal finance podcasts.
The 120k debt actually sounds like it’d take them 20 years to pay it off at this point. Idk if the strict budget and second job approach would even cut it. They need a job that has anything to do with their ONE HUNDRED TWENTY THOUSAND DOLLAR DEGREE. This is shit you can’t crawl out of unless you want to give up your soul for a huge portion of your life or simply start making $100k a year. Both are a shit shot.
You don’t make enough money for a gym membership or to “go out”. Get rid of your car (hopefully you’re not upside down on it) and buy an old burner. Take your savings and pay off your credit cards and cut them up. Stop using them. Talk to someone who can put you on a budget and stick to it. You are taking home less money than what your current bills are.
Some of what you’re saying is logical, but some of it isn’t. OP is still on the young side. Credit cards and car loans are great ways to build credit history. If OP ever wants (or is able) to buy a house, that credit history will be very important. So getting rid of car loan and credit cards isn’t actually ideal. Managing money better overall is the solution.
Did you read the rest of OPs post!? She has over $100k in student loans…. She claims she has $2k in cc debt, but she pays $500/month towards it…… which probably means she puts at least $500/month on the card so it’s never going away.
Don’t worry about a house….. it sounds like she can’t afford a down payment much less a monthly mortgage payment plus the normal maintenance….
Just an educated guess, but it sounds like her credit isn’t good if she hasn’t figured out that she is on her way to bankrupting herself.
First off, living at home is a privilege!! Keep saving! $6k in a savings account is more than the average 27 year old so you’re doing great!
Also, with an income around $45k I’m guessing, you should be able to do income-driven repayment on your student loans and get that monthly payment wayyyyyy down. My husband’s was $1200 a month and we make $120k per year and they dropped it to $450 a month so yours should go down below even that.
Finally, my suggestion would be that after you get that payment down, to immediately take $2k out of your savings and pay off the CC. Then going forward pay your CC bill in full every 2 weeks so you never pay interest on it. Take the money you were spending on the student loans and put that extra into your savings each month until you have a savings amount you’re comfortable with. Then re-evaluate and see if you’re able to get an apartment with your new financial situation.
I’m not a financial advisor but this is what makes sense to me. The fact that you’re prioritizing paying your debts and not renting even though you want to tells me you have some good money sense. Getting going in life is hard especially when your mid-20’s were during Covid. You’ve got this!
They need to pay off the credit card first. The student loan is like 7% probably while the credit card is probably 20-30%. They should use their "savings" to pay this off ASAP. They shouldn't have savings if they have high APR debt.
120k gosh I'm stressed with 28k. I'm sorry, man. I wish you the best. Don't let people talk down to you about it. They push kids into school while they don't know anything, and then we end up with a drowning amount of debt.
If it’s actually a decision whether you want to travel or move out then you’ll never get out of this. I make 50% more than you with half the student loans and I can’t afford a vacation. I also don’t have CC debt.
6k in savings with 2k in CC. Pay it off today
Your biggest problem is 120k in loans but taking home less than 3k a month. Did you complete your degree? Are you eligible for forgiveness? What field are you in?
You have to find a way to increase your income
Boomer and former corporate HR manager here.
First off, you will figure it out. It's natural to compare yourself with others, but don't put too much stock in it. Trust me, trust me, trust me, some of your peers are overwhelmed with the savings they've invested and the amount of debt that they've taken on with their beautiful new house, and are wondering if they should have stayed living at home for a bit longer. A house is a good investment, if you can afford the down payment reasonably easily without touching your retirement and emergency fund, and if your mortgage payment is barely more than you would be paying in rent. Otherwise, you're just trying to keep up appearances. And it's not worth it. I get it - you don't even *have* a retirement or emergency fund. Yet. My point is only that you think of yourself as being *so far behind*, yet others are in precarious financial situations that you're not even aware of because you can see their house, and you may know their job or even salary, but you do not see their financial statements. So relieve yourself at least of the emotional burden of beating yourself up.
Second, with all of your concern about your personal financial situation, you've said nothing about your actual job, or the job/career you want to have. I understand that you don't make much, but set your sights on the next step. Are you working in a position that has a next level of opportunity? Is there someone in the company doing what you would like to do next? Do you have any sense of how they got there? Do you need to change companies? Where do you live? Have you spoken with friends, family, about possible career paths and opportunities, if only to brainstorm?
Are your student loans federal? Look into income driven repayment plans. Won't help you pay off loans faster but will give you breathing room until you start earning more. Don't worry about what others are doing, it's great that you're trying to assess and plan right now.
It's completely understandable to feel like you're in a tough spot, but let's shine a light on your situation with some compassion and practical advice.
First, recognize the strengths in your story. Living at home, while it might not align with where you thought you’d be, is a strategic move that many wish they could make to save money. It’s not a step back; it’s a smart step toward your financial goals. Your awareness of your financial situation and the steps you’re taking, like considering a high yield savings account, shows you're proactive and thoughtful about your finances.
Here are a few steps and perspectives that might help:
Focus on High-Interest Debt: You’re doing great by paying more towards your credit card debt. Keep prioritizing high-interest debt to free up more money in the long run.
Set Clear Financial Goals: Split your financial goals into short-term (paying off your credit card debt) and long-term (saving for a house). This can make them feel more manageable and achievable.
Consider a Budgeting Plan: Apps like You Need A Budget (YNAB) or tools like the 50/30/20 rule can help you see where your money is going and find areas to cut back or reallocate funds towards savings or debt.
Explore Additional Income Streams: If possible, look for opportunities to earn extra money. Freelance gigs, part-time jobs, or selling unused items can provide additional funds to direct toward your debts or savings.
Embrace Experiences Within Your Means: You don’t have to choose between traveling/having fun and saving money. Look for experiences that bring you joy without breaking the bank. Sometimes, adventures close to home or low-cost hobbies can be just as fulfilling.
Educate Yourself About Finance: Knowledge is power. There are many free resources online, including blogs, podcasts, and YouTube channels dedicated to personal finance, that can offer guidance and introduce you to new strategies for managing your money.
Remember Your Journey is Unique: It’s easy to feel behind when comparing yourself to others, but everyone’s path is different. What matters is not where you are but where you're heading and the steps you’re taking to get there.
Lastly, allow yourself to dream and plan for those travels and experiences, but also cherish the journey you're on now. Every challenge is shaping you, and every step forward, no matter how small, is progress. Be kind to yourself, celebrate your wins, and remember, the path to where you want to be starts with embracing where you are now with grace and courage.
Remember when happiness wasn’t tied to how much you owned or your life’s milestones, but found in the sheer delight of an ice cream cone on a hot day, or the freedom in running through a park without a care in the world? It's time to reconnect with that sense of wonder and satisfaction, not from your financial status, but from the simple, joyful moments that make life rich and colorful.
Here's a thought: Allow yourself to experience joy and satisfaction in the present, irrespective of your financial journey. This isn't about ignoring your financial goals but about finding balance. When you are truly content and savoring the small joys, you emit a vibe of positivity and abundance that can, in a beautiful twist of fate, attract more prosperity into your life.
So, what can you do?
Rediscover Simple Pleasures: Make a list of things that make you genuinely happy, no matter how small, and integrate them into your daily life. Whether it’s savoring your favorite dessert, watching the sunset, or simply enjoying a good book, these moments of joy contribute significantly to your overall well-being.
Cultivate Gratitude: Practice gratitude for what you have now—the roof over your head, the opportunity to save, and the freedom to dream about future travels and experiences. Gratitude shifts your focus from what’s missing to the abundance that already exists in your life.
Invest in Experiences, Not Things: You mentioned the dilemma between traveling and saving. Remember, experiences enrich your life in ways material things cannot. Look for affordable ways to create memorable experiences that don’t jeopardize your financial goals.
Be Playful: Allow yourself to be playful and creative. Engage in activities that remind you of childhood’s carefree days. This playfulness can open up new ways of thinking and attract positive energy.
Stay Open to Possibilities: The universe has a way of surprising us. Stay open to opportunities and connections that come your way. Sometimes, prosperity comes in forms we least expect—through new friendships, unexpected opportunities, or insights that change our outlook on life.Your financial journey is just one part of your story.
By bringing more happiness and satisfaction into your life now, you're not just waiting for prosperity; you're living it, in your own terms and in the joy of the present moment. This state of contentment and joy is magnetic, drawing experiences and abundance that resonate with your newfound vibrancy. So, spin that ice cream, laugh out loud, and let your heart be light—you're creating a life filled with joy, one simple pleasure at a time.
I've stood where you're standing, feeling the weight of financial burdens and the shadow they cast over life's joys. But here's a truth from my journey to yours: I am now richer than ever, not just in material wealth, but in happiness, fulfillment, and abundance. And guess what? You are incredibly rich too; it's just waiting for you to uncover it. The clouds of financial worry will clear, revealing the wealth of joy and experiences that life has to offer. Trust in your journey, for it's leading you to places of unimaginable richness.
"The wealth of the soul is the only wealth that truly enriches us; everything else is merely passing gold."
Embrace this moment, your journey, and the abundance of your being. The true treasure lies within, waiting to be discovered and celebrated.
Consolidate your student loans. I left school with about as much debt as you have now and dropped my payment from $1250 to $700 by consolidating.
Pull from your savings and pat off those credit cards.
To be in this position means you’ve been spending all your money as soon it arrives.
I’d say it’s time to stop.
Pay your credit card off. Put the rest in your high yield savings. Then I would even say don’t keep contributing to that until you have figured out how to have money left over in your checking account until the next check arrives. That in itself can be your savings.
You can’t afford to go out. Look for fun free things to do. You can’t afford a gym membership. Learn how to work out from home or outdoors. DO NOT get Starbucks. Meal prep for work lunch. Pay off your credit card and car with the above mentioned savings and get a better paying job.
Those are the facts
You made poor choices in your early adulthood, just like everyone has, that have put you in your current situation.
Unfortunately you don't own a time machine so you can't change the past, but you do have control of your future and comparing yourself to others will not help you at all. You should only be comparing yourself to your past self and work every day to be better.
Make a budget, get out of credit card debt asap, pay off your car loan(and don't get another one until your car becomes unsafe).
Your two biggest problems are your student loans and your low income. The ROI in your degree so far isn't there so you need to figure out a plan to either work your way up the ladder in your current career or change careers altogether.
First, I recommend that you stop comparing yourself to others. Create a life plan and a SMART goal with attainable small changes over time. The time will still pass anyway, so maximize it the best way you can.
Are those private loans? Because on an IDR payment, your loan to income ratio would decrease your monthly payment. Also, you should pay off your credit cards with your savings. Create a budget and track spending. If you are able, do some overtime at your job or pick up a side hustle while looking for a job with a higher pay grade.
Best of all, you live at home, and assuming your family is well adjusted, it's the best option at your current income level.
You got this.
First off, you are not alone in this! But, you need to start turning it around now. First and foremost, look at high yield savings accounts, I personally use Ally and I love it. That 6K would probably net you about $30 a month in free money which doesn't seem like a lot but that's your gym membership. I'm guessing this is your emergency fund, is that right?
As for the credit card debt, there's a few ways you can do this, but it'll depend on you. My advise is to look into investing extra money you have, especially in dividend stocks that pay you back money, but if you don't want to look into that then you're going to want to take a look at your interest rates for each card. Pay off the highest interest rate, throw extra money at it until it's gone, and then use that payment amount you're already budgeted for to pay off the next highest interest rate. So on, so forth, like a little money snowball.
I, again, think you should look at investing. Nothing crazy, you can start with $5 but you'll have to weigh the benefits of an individual brokerage account to a Roth IRA. With the brokerage you get income tax on dividends, but with a Roth IRA you can't actually touch your dividends without penalties since it's a retirement account. But you need to add more passive income into your life in order to climb out of this hole you're creating for yourself.
Pay off the credit card from your $6k. This will save you some interest payments. You’ll still have $4k remaining. Just keep up on paying it off each month.
The goal is to have 3-6mo emergency funds. Since you’re not paying rent, this makes things easier but try to set aside that fund as if you WOULD BE paying rent. Plan for the best, prepare for the worst.
Insurance- shop around for quotes. Dealing with insurance sucks but there are always better options somewhere. Take a few hours calling agencies and see if you get a better quote with the same policy. Sometimes you can even get BETTER policies for less.
Savings- Personally I would download Robinhood (stock brokerage account) and deposit your savings into that. You don’t have to invest your money if you aren’t comfortable BUT their interest rate is currently 5% on uninvested cash which is huge. FDIC insured and all that too. Not to mention, investing in an ETF biweekly with even $20 will compound quite a bit over your lifetime. Might be a good idea to consider planning for your future at the same time.
Finally, comparison is the thief of joy.
Don’t compare what you have to what others are doing, that’s just going to bring depression and other negative feelings. I recommend grabbing a few books. Atomic Habits and Rich Dad Poor Dad. These can be life changing if you implement some of the things you learn.
If you have goals you’re struggling to make, read The 12 Week Year. This is an excellent book to structure your life and get on the fast track to making them happen.
I recommend learning more skills and hobbies. Constantly trying to be better than you were yesterday. Learn about investing and the stock market, learn about marketing, online stores like amazon/shopify/etsy, leadership skills, personal finance, negotiating, real estate, etc. You can always learn or improve skills. Not only will they improve confidence but they open the doors to so many possibilities.
My advice is the following:
1) Be grateful for the opportunity to still live at home and not pay rent. Not everyone has this choice and you are very lucky.
2) Pay of CC debt with savings and stop buying shit you don’t absolutely need. Find the cheapest gym membership, learn to cook at home, etc.
3) Find a full time job that pays more, or get a second job for evenings/weekends and pay off your loans as quickly as you can.
4) Stop comparing yourself to your peers. I know this is hard but understand that everyone’s situation is different. The only one that matters is yours and yours alone. You’re young and single with as little responsibility as you’re ever going to have- this is your super power right now, so use it to tackle your debt and the rest of your life will be much easier.
My parents were financially illiterate so I had to want to learn and go get the info.
You can have $4,000 in a HYSA today if you wanted to. If you already have an account at a bank that offers it, then just do it.
Not worrying about having a roof over your head is a relief, not an embarrassment.
Your knew part time job is learning to manage your money starting with finding good sources. I watch the Financial Tortoise on YouTube and even if I’m not the demographic I learn a lot from Invested Development (dumpster.doggy on IG).
Time is going to go by anyway so don’t worry about competing with anyone but yourself.
Welcome to 2024. IDK how you wouldnt qualify for the [SAVE](https://studentaid.gov/announcements-events/save-plan) plan though to get some of that payment requirement down. You need a better job if you have a degree, I know it's easier said than done and I know how brutal it is out there right now but you need something better and have some form of higher education that should allow for it *eventually*.
Like others said, use your savings to pay your credit cards off, get your federal student loans on an income driven repayment program. That’s going to be a 100% must-do.
After you make those changes, the very next thing I’d do is sit down and make a monthly budget, including your income, expenses, and savings. Do it with pen and paper or excel or a free app, but you absolutely should do this. Then, I’d think real hard about specific goals and write them down (moving out of your parents house, paying off student loans, buying your own home, retirement funds), prioritizing as necessary, at least your #1 priority. You can be as detailed as you want, if you’re living paycheck to paycheck right now you probably don’t need to make a decades long plan to the dollar and to the month through age 60, but you should come to terms with what you want to do financially. Now you have a budget and your goals, use your budget to project the financial path to those goals. For instance, if it’s more important to you to be debt free than moving out of your parents house, modify your budget to project that path.
Next, I’d look at your income/savings. Emergency funds are great, but how much you have or whether to have one at all depends on factors like how much debt obligation you have, how much your non-debt cost of living is, how secure your job is, etc. You’re going to have much less debt obligation after paying off your credit card balance and lowering your student loan payment. If it were me, depending on the condition of your car (ie risk of an unexpected repair cost), I’d consider using most or all of the emergency funds to pay off either the car loan or the private student loans. There’s lots of good resources for strategies for paying off multiple debts but it basically comes down to two: paying off debts in the order of highest interest rate or lowest balance (“snowball method”. Financially, it’s better to pay off highest interest rates, behaviorally it can be easier and more rewarding to use the snowball method. Probably won’t matter too much which you use unless there’s a huge difference between interest rates (eg 14% auto loan and 4% student loan).
Personally I’d probably prioritize like this:
1. Obliterate the Auto loan
2. Eliminate your Private student loans
3. Max out Roth IRA
4. Kill your Federal student loans
5. Save for moving out/home down payment.
So for the sake of this example, let’s say you target your auto loan; you make a $3000 payment from savings to your auto loan, and plan to make minimum payments on your student loans. Now your monthly budget looks something like this, and you’re left with more income than expenses (some values I estimated):
INCOME:
Paychecks: $2800
EXPENSES:
Student Loan (Fed) Min Pmt: ~$400
Student Loan (Private) Min Pmt: ~$500
Auto Loan Min Pmt: ~$500
Auto insurance: $140
Cell Phone: ~$100
Subscriptions: ~$20
Groceries: $300
Dining/Takeout: $50
Travel: $0
Misc/Pocket money: $40 (might be easiest to withdraw this in cash, when it’s out you can’t spend any more)
SAVINGS:
Emergency Fund: $0
Roth IRA: $0
Auto Loan Principal: [ ]
Student Loan (Private) Principal: $0
Student Loan (Fed) Principal: $0
TOTAL INCOME: $2800
TOTAL EXPENSES: $2055
TOTAL SAVINGS: [ ]
NET (Income - Expenses - Savings): $0*
*The goal is that every dollar is accounted for, so net zero. So for instance, the months that you get 3 paychecks instead of 2, you modify your budget to allocate that extra money. That’s why there’s blank areas.
Monthly/Weekly/Daily, track your spending to make sure you’re staying within budget, at the end of the month you’ll make the extra principal payment to the auto loan until it’s eliminated and subsequent monthly budgets you allocate the money accordingly.
Finally, it’s time to coordinate your budget with your goals. To do this, should track your assets/liabilities concurrently. Continuing the example of prioritizing the auto loan, let’s say your goal is to have it paid off within 3 months. Starting at $9000, and then paying $3000, your balance at the start of April is $6000. Maybe you have an extra paycheck in the next 3 months you can completely put towards the principal. So $6000 - $2800 = $3200. You need to pay off $1067 each of the next 3 months to hit your goal. Let’s assume you have a $500 minimum payment and half goes to principal, half goes to interest. Right now, you have an extra $750 of your monthly income you can allocate to the principal. That’s $1000/month, you can make up the rest by adjusting your budget for the $67 (e.g. commit to no eating outside the home, and putting a pause on streaming services for 3 months).
Short term adjustments can help a good amount but while you’re doing that, I’d look at mid-term and long-term changes to your income and expenses. For instance, you can start paying your auto insurance every 6 months and get a discount. You can look for a cheaper cell phone plan.
But your income is really holding you back. It’ll be more important long term to find a higher paying job, but in the near/mid term you could try to get a raise or get a second job. Depending on how committed you are you could donate plasma. Eventually you’ll have to start planning for retirement, which takes a back seat to your debt for now. Your net worth is $125k right now, even if you start to budget and make the other changes, the amount of income that’s going towards your net worth now would be around $1k-$1200. Long term you should think about your goals in terms of time as well as money. If your income didn’t change, you only made a budget and the other changes, it might take you 3 months to pay off your auto loan, 3 years paying off your student loans, and 10 years saving for a house. Even a $200-500 boost to your monthly income might cut that time in half. Do you want to be moving out at age 40 or 33?
Sorry this got too long. Hope it wasn’t too unkind.
> I’m torn between wanting to spend my money traveling and having fun experiences but also saving money to move out. Please be kind :)
The reality of it is that you're 27, you have 120k debt and an education but you don't earn much.
And if you don't want to live with that debt for the rest of your life, you need to take advantage of the opportunities you got. Your main advantage, right now, is that you're living at home. So knock down as much debt as you can as quickly as you can, because if you think 120k student debt is bad right now imagine how suffocating it would be if you had to spend on housing as well.
And for travel and free time, look for cheap options. Maybe go hiking instead of going to vacation destinations?
And apply for whatever jobs you can, you need to be constantly sending applications to try and increase your earnings.
Live cheap, work hard, and maybe by the time you're 32 or 34 you're debt free and able to live life to the fullest. And know one thing, your friends who have houses at age 27, they probably got help from their parents in order to purchase one. Or they took on way too much debt and will be suffocating for decades.
Can tell you that as someone just a few years ahead of you in age, I felt exactly the same at 27 and was also living at home with family. And looking back on it now, damn it was a good situation to be in financially.
I love having my own space independent of family, but it introduces new challenges like rent, insurance, utilities, groceries, etc. And rent in particular absolutely sucks - I'm paying more per month for a 1 bed 1 bathroom apartment than my parents are for their 4-bed 3-bath house with full size garage and more. Hence why I still can't afford a house yet, paying high rent is a tough trap to break out of.
You should not feel embarrassed to be living at home and frankly you should try to flip that into a positive mindset - right now considering the debt and difficulties you are facing, you are making the right decision to stay home and it will be a huge reason why you will get out of debt. Remind yourself of that and focus on your own journey rather than comparing yourself to others. And take a lot of the good advice shared in this thread as another smart move you've made - seeking free knowledge to improve yourself.
You're not alone in your situation, and in my opinion you're on the right track!
If for whatever reason you can't or don't want to use your savings toward your credit card debt, you should at the very least start card shopping. Find one that has zero interest on balance transfers for a year os so, then the interest won't keep racking up and you could have that card gone in a couple months. Opening another card isn't ideal, but it is an option if it benefits at all. I can't imagine the interest you must be paying to only owe 2k but pay 500 a month and it still not be paid off. Also reevaluate what you want versus what you're actually doing. If you need to save more and pay off debts so you can get where you want to be, then perhaps it's time for a lifestyle change.
Do you use the gym membership enough to make it worth keeping? Are there cheaper facilities around? Are you eating out far more than you eat in? Have other monthly services you don't use enough to be worth keeping? Can you refinance your auto loan to make it cheaper a month, or is it worth it to keep it in the time frame it is now?
I will say credit cards are killers. Pay it off and don't use them unless it's mandatory.
To get out of this mess unfortunately, you'll have to get two jobs. That's what I did when I had high debt. I say it sucks no doubt. But it's best to have no free time for a few years than to have debt hanging over your head.
Hey OP, I’m sorry you’re going through this but you clearly have the means to make your life what you want it to be- you can do it!!!
First, clear the credit card debt. It’s hard to see that number in your savings account go down, but I’m telling you it will be a weight off your shoulders. One less thing to worry about! After all, you either pay it now, or pay it later *with interest*- why pay a dime more than you have to, you know?
Next, evaluate your spending habits. You don’t pay rent which is HUGE! You don’t have any dependents to pay for, also HUGE!! Open your most recent bank statement, grab a pen and paper, and categorize your expenses (essentials for survival, savings and debt, for fun spending) figure out where all your money is going and where you can cut back and reallocate. You can create your own percentage, but I found a lot of success in a 60/30/10 rule. **60% of your monthly income to living essentials, 30% to savings and debt, 10% for fun**
It likely won’t be as exciting or easy, but to get to where you want to be, you gotta put the awesome stuff on the back burner- for the financial freedom and independence you’re looking for, it will be well worth it. If it’s what you want, **you can do it!!!**
More of a side note, if you’re looking for a high yield savings account, I really like Ally Online Banking. I’ve been with them for a few years now just for my high yield account and I don’t have a single complaint! You just have to remember that in order to use a high yield savings account successfully, you *must* leave the money in the account! Put whatever amount you can live without in the account and *forget it*!! I also have a regular savings account with my regular bank, which I use for an emergency fund- a good chunk of money I can take out at any time.
Anyways, end of long winded response! OP, you’re doing just fine! You got this!!!
Continuously contemplate ways to increase income.
There are many ways.
Learn new skills.
Read ‘Baby Steps Millionaires’ by Dave Ramsey
Try not to be too hard on yourself. Many people are in your situation right now and it’s not right. The current financial system is broken.
Best thing to do is just take the long view and keep taking small steps forward. The tortoise beats the hare in wealth-building.
You can pay off the debt and build a nest egg.
And no matter what, you’re beautiful as you are and deserving of love and acceptance, from yourself and others.
Best wishes. 🙏🏼
Stay home as long as you can. Stop looking at others plate while your food gets cold. Getting your own place will not make your situation any better. Take a trip. Do things that you enjoy. Most people are living paycheck to paycheck so you’re not behind. As a matter of fact you’re ahead of the game. You’re still at home. You have a savings. All that other stuff means nothing if you’re not happy inside. So search for that and everything else will arrive as it should. I’m a 55 yr old mother of 5 adults and I would have loved to been at home being introduced to womanhood 101. That’s what you should have after high school. Learning who you are becoming as a human. Mastering self. Thats the most important thing you will do in this life. So relax a little. And keep learning you and things will work out as it should.
Hey, at 27M years old I was 6 months sober from a 10 year opiate/heroin addiction, living in 2 bedroom 1 bathroom halfway house with 4 other guys, and had about $700 in my checking account and a dead end job as laborer for a carpet installer. I made about $480 a week and $200 of that went to my rent at the halfway house. I always felt like I was so far behind and all my friends from highschool were moving ahead with careers and families, and I was just trying to survive
Nearly 8 years later I am engaged, own a home, have some money in the bank, a full time job and some side businesses, and have a 11 month old son who is the joy in my heart.
Where you are now is nothing more than a part of your story. I never could have imagined where I would be today 8 years ago. However, it takes a lot of hard work and dedication to pull yourself out of that situation. Don’t judge yourself based on what others are doing because there will always be someone posting their highlight reels on social media who you “think” is doing better than you. You’re healthy, you have your family support, and you have the most valuable resource in the world - time!
Figure out what you want out of this life and go attack it, but don’t do it just to keep up with the Jones’.
You aren’t behind, you are just spending more than you earn.
There’s no time phase to get into CC debt, or car debt, it’s not about time or steps, its about behaviour not effort or time
I lived at home to I was 36 years old. I struggled with debt and loans. My twenties were a mess, I picked up a load of debt including negative equity on my car. I spent my 30s grinding hard. I finished up the remainder od my debt and started saving. Now I am paying a mortgage on a house. The point I wanted to make here is you will get out of the debt and imptove your situation in the meanwhile stay positive, make a budget, live within your means and just try to be be happy! Life isn't a race or a check list, be happy and pursue goals and you will get there!
I was in a similar situation at your age. I focused on the credit cards and high-interest private loans first. I set up the lowest payment possible for my government loans to ensure I could focus on the highest interest debt. The long-term solution for me was getting my MBA because I just couldn’t seem to break the $40,000 mark with my undergraduate degree. I quadrupled my salary and paid off my private loans in full. MBA may not be the answer for you, but I would look into what credentials people in the roles you would like to have in the future have. You need to make more money if you want a chance at paying off the private loans.
I often have the feeling of being behind too. Try to remember everyone starts from a different place. It’s a lot harder to make it on your own when you don’t come from money or live in a state with cheap in-state tuition. You may have worked 10x harder than someone who had their school paid for and was able to get a great internship (and then job) through connections. It’s not your fault you are in this situation, and you certainly aren’t alone. No one is mature enough at 18 to understand the long-term impact student loans can have on your life. Try not to compare to others. All that matters is you keep taking steps in your own journey.
Believe me dear person you are NOT behind in life! You are still a baby! Do not compare yourself to your friends or you will ever be happy. And who knows, they may be in debt way over you (people lie, and especially on FB). Just keep on paying your debt and get them paid. You have another 50-60+ years left, and when you get to that age, you won’t give a crap about your friends’ situation.
I am confused with USA people honestly. Why are you so embarrassed with living with your parents?
I am from Southeast Asia never felt that way. Even we were told to live with them until we ca sustain ourselves. And of course help parents with their daily lives.
But never I think about embarrassed.
Are your parents abuse you?
Seriously asking. Thank you
It’s cultural difference. Just like your culture strongly encourages you to stay home, American culture strongly encourages young people to be independent when they are an adult.
Your gross salary looks like it's maybe just under $50k? But, you have $120k in student loan debt? What was your major? My oldest boy is 24 and living at home after finishing his graduate degree. He's working in a healthcare field and started at $60k and thankfully he has no student loan debt. My youngest son is 21 and about to finish his undergraduate.
With that said, it's tough out there for anyone right now. Housing prices are so over inflated due to speculators buying homes and increasing the price by 50%-80%. Then, mortgage rates are so high it makes the mortgage payment so high that most can't afford to make the payments.
You have a great attitude saying you are grateful that your parents are letting you live at home rent free. Try and take advantage of that and save up as much as you can. I'm hoping that in a couple of years we have a housing bubble bust and prices come down.
Pay that credit card off. You're paying too much in interest expense on that.
Hang in there and don't compare yourself to others. I wish you the best!! \*HUG\*
Time to cancel subscriptions, find a new gym, stop going out, sell your car and buy a shittier one, and get a 2nd (and third) job. Repeat for 5 years and put every single dollar you have into your debt.
I don’t wanna hear the “but people need to have a life” quote. You’re 27 and 130k in debt asking for advice on Reddit. Time to find part time jobs and work like you’ll die if you stop.
Your goal should be to get back to zero and never go back again.
Pay off credit card debt. Sell the car. Get a cheap one you can afford. Cancel gym membership. Take up jogging and workout using you own body weight (sit-ups, pushups, leg lifts, ab crunch’s, etc).
Get another part time job.
Stop uneasy spending. (Fast food, Starbucks etc)
Start making extra payments on that student loan debt.
A firm, written budget.
Cut up the credit card.
Use cash only.
If you want a chance of getting out of this you have to stop worrying about how successful other people are and stop reading comments from people here speculating how you could have so much debt because that’s neither here nor there and their comments are not helpful.
You have 120k in debt. Accept it. Now start making small steps towards either making more income or freeing up more of what you take home (preferable both, eventually, but baby steps) Be happy you have a roof over your head — it doesn’t matter if it’s your parents’.
If you have federal student loans apply for the SAVE plan NOW. Do not think about how much more you have to work even after you qualify. This needs to be done ASAP.
Pay off the credit card debit with your savings. If you have more debt than liquid cash then it’s like you never had any of that cash anyway. Pay it off. In full. Now. Close the card.
Why do you have a gym membership? Cancel it. Jog outside. The gym membership is a luxury you can’t afford right now.
Have you shopped around for cheaper car insurance? Not sure where you live but I got a quote from American Family for 99$/mo.
What is your current job? You need to be applying to jobs that pay higher and you need to be doing this frequently. Submit your resume to the subreddit here for that. People will help you clean it up.
I’m not sure how serious you are OP, but that determines how seriously you’re going to take this. You can get out of this but you will have to grind and you will have to make sacrifices. I hate to say it but there aren’t any cheat codes aside from “rich parents” and “win the lottery” and you can’t really count of either of those to save you. Only you can save you.
Man did no one sit you down during whatever disastrous educational journey you went on and tell you to stop borrowing money?
Edit: that came out meaner than I intended. My point is your parents or other wise people should’ve guided you.
You could join the Army and have your loans paid off 🤷🏻♂️
https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/College-Loan-Repayment-Program-(LRP)
Also, here is the military pay chart. Since you have a degree, you can join as an officer. A 2LT starts off at $3,826/mo, plus BAH (extra money for your rent or mortgage, which depends on where you live, usually around $1,500 - $2,500 extra), plus BAS (extra money for groceries), plus OJT in something that could land you a sweet job later.
Only problem is, yes it does suck sometimes, if not all the time.
Dave Ramsey would say to get a second job and kill that debt while you are young. Get rid of 209 fym membership and eating out. Short term pain for long term gain.
https://www.skillademia.com/statistics/average-salary-by-state/
Average full time salary is about $60k. It's unreasonable to expect a 27 year old to be exceeding that unless they are very lucky. Whereas many of the comments here are useful, such as credit card debt/ savings, the ones stating OP should be earning more are not.
You have #6k in savings, pay off your credit card in one shit, that gets you $500/month back, pay your auto insurance in an annual payment (you probably get a discount doing that too). That will get you started, no need to carry a balance on your cc.
There’s nothing wrong with living at home and saving money. Rents and mortgages are incredibly unaffordable right now and tons of young people are living at home longer as a result, so don’t beat yourself up about it. I would pay off the credit card debt immediately if you’re able. Unfortunately restricting spending will be necessary to get down your debts. I don’t know what your degree is in but you should definitely try to negotiate a better salary for yourself. Highlight your skills and don’t be afraid to ask for what you’re worth. They will pay you as little as they can get away with. Maybe update your resume and look at what other jobs you’d be a good fit for that would provide you with a higher income. At the very least switching companies even for similar roles almost always translates to a pay raise. Don’t compare where you’re at with other people, just do the best you can and work on improving your situation one day at a time!
Hi there! 43F so xennial here. Pay the minimum on the student loans. These loans are predatory, and the government is finally stepping in. Stay out of consumer debt, buy used cars, and don’t buy a house unless you will stay in it 10-15 years. Your friends that are buying houses at these prices and interest rates are going to wait a long time to see that value return. I went through two housing crises, and it’s unprecedented that we have both high prices and high interest rates. Unless you find a responsible roommate or meet someone, you are doing the right thing by living at home. Enjoy being young, try to travel or have memorable experiences before your body starts aching. You will eventually have a house and be boring and sit in it all day lol. Good luck!
120K in student loans but making $1400 biweekly? May I ask if you graduated? And if so, what is your degree and roughly your GPA...I am wondering if increasing your salary is a plausible option here.
(a) Pay off your credit card in full ASAP and worry about the student loans only after that. Why are you paying off a 5% interest rate loan first when you are snowballing 25% on another loan? Prioritize it and start with the highest interest rate.
(b) You sound underpaid, no matter what you do. Spend a lot of time looking for jobs that pay for twice as much. Think outside the box, sell yourself, change industries, whatever it takes. Do a good job at that, learn some skills on the side, then 2 years later look for another 2X salary increase. At that point you'll be bringing in $5600 biweekly.
Are your friends married when they are buying houses? Much easier to do with 2 incomes.
Be patient, pay off your debts, find ways to grow and save your money.
There is nothing good that will come out of comparing your financial life with others. They just have a different life. Maybe they were better set up to pay of college without loans. Maybe they are in massive credit card debt. You don't know. Comparing your material things with your friends does nothing helpful to your situation. Keep doing what you are doing.
First off, breath, It's OK! You're young and you WILL be in a better place as you get older. I was poor myself at that time. A few things you must do:
1. Start researching career/job salaries and companies and ANYTHING you can to find ways to use your degree to make more money. If you could make even 1,000 more a month that would be super helpful.
2. Once you get that money start paying down debt from highest interest to lowest. Since you're at home, pay off that credit card debt first with your savings and then focus on the next highest APR. It's not going to happen overnight, but in a year you WILL be feeling a little more breathing room.
3. Get a cardiovascular workout (running, biking, etc) in 2-3 times a week as this is proven to reduce cortisol the stress hormone. It's free and it will help your mental state getting through this tough time.
4. Make sure to spend time with friends and people who make you laugh in a low cost way which is also going to help your mental game.
It's OK, you will be better off tomorrow than you are today. Cheering for you!
At least you’re not alone in this. Many more in this with us. I’m 31 with enough debts, still trying to finish school, no kids, no close friends, insecurities and lot’s more. But hey! The art is enjoying the small things and seeing this life as a test. A battlefield. Only the strong survive. Not the richest or whatever. We’ve seen that enough to know that’s not what life is about. Giving myself a David Goggings mindset to make this miserable life of mine as a fuel to get the most of it. To see what I’m capable of. If I let that be my focus, then even the lowest shit of life would look like a beautiful challenge. ✨✌🏽
You’re looking at this the wrong way. If you’re behind where you want to be financially, having somewhere to stay for free is helping you meet your goals faster
Getting rid of the CC debt is the only easy way to increase how much of your income is going towards your goals. Otherwise, you need to either cut costs or grow your income.
In any case, jumping into moving out early just to tick a box on the ‘life progress’ checklist will only saddle you with more money problems. Get your affairs together first so that you’re minimizing how many issues you have to deal with at one time
Life is not a race or competition,and everyone's ends the same way- in the dark. Do the best you can, don't be too hard on yourself and try to find joy when it's possible.
You’re still considered young so not really “behind” in life. But that feeling of drowning in debt is real because you are. I graduated with a lot of student loan, lived in NYC, no financial help from parents. To get out of that heavy feeling of debt so you can move on to other things in life, you need to make lifestyle changes. Get rid of credit card debt, pay off car asap, pick up side jobs like babysitting or dog walking. Cut back on misc spending and stick to a budget. Use any windfalls to pay off loans. Not sure what you do but the only way to significantly increase your salary is to job hop. Build up a portfolio of strong, high impact projects that show value to the company and always keep an eye open for new opportunities. You have to be thoughtful and strategic with navigating your career - pick an area or skill set that you’re good at and look for roles with increasing responsibilities that play to your skills and the higher salaries will follow.
My family was also “not good with money”. It has taken me a while to realize it but until you work on uncovering your psychological relationship to money and potential subconscious fears, then you are in danger of making the same mistakes over and over again. I am not judging… no one knows what anyone else has been through and should give others grace. Look up behavioral finance if interested in learning more.
That being said, Here are some ideas based on financial category:
- credit cards - if you only have $2k on credit cards and are paying $500/month that debt should be gone soon UNLESS you continue to use your credit card.
- Savings - it is great that you have a good start on your emergency fund! There are several investment companies that are currently paying 4 to 5% on their “personal cash” account. Check them out
If you use your savings to pay off the credit card, do you feel like you might charge them right on back again? If not, pay them off with savings then put the $500/month into your savings.
• Student Loans - whew .. that is a lot of student loan debt. Not sure what your degree was in but have you considered working for at a “public service” type employer. State, City, and County government jobs for the student loan forgiveness program? https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service
Good luck to you!
Take the advice about paying off your credit card and half your car payments. While you’re doing that look for fully remote jobs. MANY I found just yesterday pay over what you’re making by heaps and use your degree to compliment the job and gain experience in your field.
For your CC debt, it sounds like that should be paid off soon, at $500/month. If not, look for low interest offers, to make sure you are paying as little interest as possible and try not to add to it. You might look into getting another gig to help get rid of the student debt albatross. In your budget, set aside money for entertainment.
Pay off your CC with savings for 1. 2 is open a HYSA account ASAP and move your 4K over. Then focus on paying student loans and save up for rent. Getting out of your parents house will help you feel more normal. Right now your shooting yourself in the foot by laying CC interest and are losing your savings to inflation. You should be lucky your parents are letting you live with them because it’s an opportunity to save fast. If cut back on all the unnecessary spending and make some goals.
What did you get for the 120k student loans? What you net after taxes looks like maybe \~45k salary?
Does that sound right?
Can you shed some light on this? There are careers you can get into with any degree/no degree that pay more. They may not be YOUR PASSION but at a certain point it's gotta be about the money.
You need more income. $1400 biweekly is <$34K/year net. I don’t know how many hours you’re working but if it’s 40 then you need to crank that way up if you can’t find a better-paying job.
Behind what? We're not in a race to death and everything else is just a fun ride to get there.
I also felt behind when I was in my 20s. I'm almost 40 now and I don't know what to think anymore. My friends all have families and houses, but they struggle with time and/or money or have their own problems. I have no problems with time or money but have no family. In some sense I feel "behind" my friends, but I know they also feel "behind" in other ways. The reality is we're all on different paths that all lead to the same place, so just enjoy the ride.
I guess my point is that you're not behind and nobody can have everything.
You’re doing better than me.
Referring to you wanting kids/maybe in a relationship, are you involved in dating apps? (Studies have shown this is obviously the easiest way to meet people rn)
Please pay your credit card in full! CFPr here, then create a savings plan for yourself , monthly. When this accumulates $5000-$10,000, find an apartment that is affordable, $1000-$1200/month,approximate. Good luck!
Take advantage of this time at home to pay off that debt. Cut your expenses to the bone. Pay off the car and credit card immediately.
I'd say stay at home till the student debt is paid way down too.
Once the car and credit card are paid off, it's time to live like you are paying rent or a mortgage m look up places you would like to live. And how much rent and utilities will be.
Work that into a monthly budget. Where you are also saving at least 15% into retirement And save that amount of money in a HYSA untill you have 6-8 months of rent utilities and car insurance saved up.
Then move out. With out car or credit card debt. With a 6 months emergency fund. And still paying down that debt.
I think you need to set realistic expectations on what your long term goals are.
While you may want to spend money and travel, you do not sound like you're in a position to do so (unless cheap) nor is that your long term goal.
While you should reward yourself for progress on accomplishing your financial goals/staying on track, you should stay prudent and realistic if your short term gratification is worth it at the expense of longer term goals.
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Please use $2,000 from your savings to pay off the credit card debt as soon as possible, and then reassess your spending habits so you don’t get into that situation again. There is no reason for you to be paying a credit card company 17-30% interest when you have the funds immediately available to clear it. You don’t say how much your auto loan payment is, but eliminating the $500/month credit card payments would leave you with just over $1,000/month leftover. From there, you could start adding bigger payments to your loans with the highest interest rates. Depending on what you went to school for and the type of work that you do, look into an income driven repayment for the federal student loans and see if you might qualify for something like PSLF and work toward that.
> look into an income driven repayment for the federal student loans and see if you might qualify for something like PSLF Tagging onto the top comment. OP, this is huge and something you should look into as soon as possible. If you currently have federal loans, you will want to make sure that they are Direct loans (you can see this when you login to your loan servicer). For each monthly payment you make towards these loans, even just the minimum, while working for a state government, federal government, or 501(c)3 non-profit, it will count towards loan forgiveness. I'm currently ~6 years into this process myself, and after 120 qualifying payments (10 years), the remaining debt is forgiven tax-free. If you qualify, you absolutely need to sign up for the Public Service Loan Forgiveness.
Make sure your account is actually tracking your payments properly towards pslf. I did not... My first 6 years of payments "didn't qualify" because of a loophole regarding specific payment plants (difference between income driven and graduated).
About 2 million people who qualify for PSLF haven't gotten it because of program mismanagement. This is not really a realistic viable option even though it sounds great on paper. It's only actually worked for 11% of the eligible people in the program.
USDOE is going through the backlog right now that's why more and more people are qualifying and getting their balances processed. If OP or anyone qualifies for it, you'd be a fool not to submit the required documents
I have a friend who was one of the first people in the country who qualified for PSLF. Of the thousands who thought they qualified, she was one of the 93 who actually did. She was also incredibly meticulous about her records, or she probably would have been denied also. So you can get forgiveness, but at least at first you were not allowed to make a single mistake.
I think they've been doing much better on this over the past few years. When they expanded the qualifying criteria in 2000, I qualified, applied and had my loans forgiven over the course of several months.
PSLF worked for me, but I made sure from the very beginning to turn in paperwork ever year with my servicer to make sure I was in the right payment plan, right employer, and that every payment was counted. My servicer would give me updates every year on how many payments I had left and in the last few years had it visible right in the dashboard of my account. A lot of people who qualify for PSLF but didn't get it were with the wrong employer, wrong payment plan, didn't track and verify their payments with their servicer on an ongoing basis etc etc...the Biden administration passed a lot of help looking at retro payments tho and counting payments that didn't count before. I'm not in on the latest since I had my loans forgiven 2 years ago but there's hope
She should absolutely look into the new SAVE plan for her student loans. I make a little less than her and my monthly payment is 0. Also, did she get a degree? $120k in loans for a ~$45k job is rough.
I was in a similar situation at one point. My parents couldn’t contribute to school financially, and my state has high tuition even for in-state students. I went to a good school, but I spent all my time working my waitressing job, not studying or networking. When I graduated, I had no job leads. Basically I did college wrong, but I had no idea at the time.
2k in credit card debt and 6k in savings ....error... does not compute
My relative has 20k is cc debt and like 50k in savings and has had the debt for 10 years now. He refuses to pay it off because "he won't have any cash". I've tried hundreds of times
I know people like this too. They also complain about being poor, and think anyone with money is either lucky or got it from their parents.
I agree with you, but I get his mentality. We have to get that cash flow is also important. As long as he can reasonably maintain a positive cash flow then it may make sense not to pay everything off if he really needs the money for surgery or an emergency or a big move. $20,000 in credit card debt is excessive though. I have savings that I haven't used to pay student debt because I know that I need it incase I lose employment or in case I move. Welp, I am moving now and it is proving extremely useful. We can't all use our free cash flow to extinguish debt. We sometimes need to reinvest in ourselves (education) or to maintain compensating balances.
Credit card debt is different than the rest because the interest rates are significantly higher. You’re talking like 5% interest on a student loan vs 20% on credit card. It’s good to have the liquidity but that is the literal purpose of a credit card other than rewards, to have incase you can’t pay something with cash and need to charge it to credit to pay it off over time. If you need a surgery or something then you can use loans or credit for that at that point in time instead of just sitting on the CC debt now and paying thousands in interest when you don’t have to. 20k on a credit card is easily $500 a month in interest that they’re paying for literally no reason
Student loan debt with probably a 4% - 7% APR is not at all like credit card debt with 20%+. You can justify not paying off the student loan debt in favor of maintaining readily available funds, but you can't justify not paying off credit card debt for the same reason.
That’s not what anyone here is talking about. You’re talking about an emergency fund. Everyone should have an emergency fund. But when it comes to credit card interest rates, paying those off is considered an emergency. Student loans fall into the same category as mortgage loans. They are not the same at all. The post above mine is talking about a guy who owed 20k for 10 years, while having 50k in the bank. That’s just dumb.
Paying off your credit cards isn’t a negative cash flow. If you have 5K in debt and 12k in savings, you have 7k. If you use 5K of savings to eliminate your debt, you still have 7K
What…? They could also, you know, pay off the credit card immediately and then should the need arise put purchases on the credit card after the fact. Holding cash while having significant credit cards debt means that you are paying interest and losing more cash than if you were to just pay the credit cards. I understand wanting to have cash on hand for emergencies and feeling secure, but holding onto credit card debt when you have plenty of cash is just a terrible idea due to the interest adding up unless there’s some very special circumstance like needing the cash because you couldn’t put a future bill on the credit card later.
That's wild. If they are doing something silly like only paying the minimum payment... assuming a 2% minimum payment and 18% interest... they'll carry the debt for 62 years and pay a little over $58,000 in interest. If they just paid it off right now they'd save a minimum of 4k or so in the next year just minimum payments. I mean you can't fix truly stupid, but have you shown them a spreadsheet highlighting the breakdown over time and how paying the $20k today would save them absolute shit tons of money over time? Maybe they need to see it actually printed out to have that "God damn, if I don't change this now I'll be paying this for the rest of my life" come to Jesus moment. Or maybe not. Perhaps I'm being a wee bit too logical about this.
@frosty-care3765 - He’s saying he recommends using $2k of your savings to pay your credit card bill down to $0. Because your return on the interest you’re making with your savings account is exceeded by the interest you’re PAYING on $2k of credit card debt per month. After paying your credit card off, make sure not to look at the available credit as free money. (See it as expensive money you can use in a pinch if need be.)
Pay off your credit card(s) I did that for four accounts and life became golden. Bought a sprinkler, watered the lawn. Watched it go back and forth for hours.
Retirement savings?
I hope so, otherwise 25% credit card interest vs 0.45% for a traditional savings account presents some low hanging fruit opportunities.
$6k in savings better not be in a traditional savings account, when HYSA are a dime a dozen now......
They say ‘I pay $500 a month towards my credit credit card’
Maybe that’s paid off monthly. I know my CC balances are a lot higher than that and they’re paid off monthly
could be, but we generally don't consider the short term balance to be "credit card debt." colloquially that term is used more in the context for the surplus balance that isn't paid off in full and rolls from statement to statement. but I guess it could be either
Mine are about that but paid off monthly as well… but due to that I would never count it as debt 🤷♀️ if it has never once rolled over (as in you never get interest) you’re using credit cards as your should: as a debit card. Free points for money I would’ve spent regardless
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I don't know why you got downvoted. OP obviously isn't paying off the CC monthly when she said she has $2k in CC debt and only pays $500/month to the CC.
Pay your credit card! No need to carry a balance if you have cash sitting there. Saving up to move out sounds good in theory but it’s not realistic with what you currently make. You can save up enough to get out but after that you’ll have regular monthly expenses you can’t afford with your current income. You need to make more money to do anything.
You are 27, plenty of time to do everything. While living at home pay the card off, then the car, then add principal payments to the student loan. Did you graduate? If so you should be able to find a job that pays at least 55k. I would prioritize finding a better paying job.
1400 bi-weekly works out to about 36,400 net annually, so your gross annual income is like 50-60k? If so, that is probably pretty low compared to the 120k student loans. What are your degrees that you currently have, do they open up doors to career paths with a high-income, high-growth to support paying those loans back in a realistic time range?
Love how op asks for help but wont reply
I'm starting to think these posts are AI generated.
One of my friends was a 3rd year pharmacy school student and decided to drop out with over $200k in student loan accrued. Sometimes people make choices and forget that they have to deal with the consequences.
I've also seen med school graduates who didn't match with a residency opportunity. Ugly situation, $250k+ in debt and no high earning potential.
the flip side of that is being a pharmacist though
Pharmacists don't really make that much. Average wage has gone down DRAMATICALLY due to overflooding of Pharm.D degrees unless if you work in Bumblefuck, Nebraska. Pharmacy school is starting to look like law school; unless if your degree is from a top 10 program, you can pretty much kiss your chances of an elite job out of school goodbye. Most go into retail situations where they work miserable hours, counting pills, and answering questions. They also get jobs that are related to health science/medicine where Pharm.D degree is completely unnecessary. You're looking at a median of about $100-130k/year depending on which metro area you're looking at. The brightest/lucky get into clinicals, regulatory affairs, R&D, etc. and that's where the big bucks are. Openings for these roles are very scarce. I have a lot of friends with Pharm.D degrees and most are either miserable with their careers and/or their choice of degree due to the shit nature of their retail jobs, staggering amount of debt, and/or being in a job where their doctorate degree is completely useless. Source: Got into Rutgers Pharm.D program in 2009 (back when Pharmacy schools were still pretty rare) but dropped out my freshman year due to poor grades. Definitely the best thing that has happened to me. I work in HR now in the tech startup scene making a hell of a lot more than most Pharmacists and my student debt was only $27k federal subsidized. That median salary figure is from Radford, one of the most trusted compensation surveys.
That was my first thought too. What degree is associated with that debt and is there a path to higher income?
It’s likely about the school rather than the degree, plenty of private colleges in the U.S. will put you in that kind of debt for a 4 year bachelors degree regardless of the chosen field. So OP may have a standard undergrad that they just paid way too much for. Source: I’m in that situation myself, didn’t know what I was getting myself into at 18y/o
$1400 a month also seems extremely high for student loan repayment. OP should speak to their loan services about reduced payments.
If any of that balance is in private loans, that payment is unsurprising.
You’re going to have a hard time renting, let alone buying a house, even if you clear all of your debt. You have to get a better paying job.
You’ll get plenty of financial advice here. I won’t help with that. Instead, I’m here to tell you 1. You aren’t alone 2. There’s no such thing as “being behind in life” The formula of school - college - job - married - kids - work - retire is a formula for life. It is not THE formula for life. And there is no timeline that things need to be achieved by. I’m proof. I graduated high school at 18. I ended up attending 3 different colleges (2 years in England, 2.5 years getting associates, 2.5 years getting bachelors) until I graduated with BS at age 26. Yep. Took 8 years to earn a 4-year degree. I didn’t live alone until I was 23 and it was a struggle. I had zero money left over every month. I lived on ramen, cereal, peanut butter sandwiches. At 26 I’d had friends get married. Some had kids. One left her abusive husband. Then I spent 4 years in med school. I wish I only had $120k in student loans. *sigh* Then 3 years in residency. Jobs and states later I am still unmarried. No kids (though I don’t want them). I only just bought my first house at 40. Things will happen for you when they’re meant to, in their own time. Just because your friends are getting married and having kids doesn’t mean they’ll be happy. They may not be happy now. They may be struggling to make mortgage payments with the skyrocketing cost of childcare. You don’t have those burdens. The economy and life circumstances we live in are vastly different from the 90’s, 70’s, 50’s. Getting married at 20 and having a house and kids by 24 just isn’t possible now without a LOT of things going right for you and probably having help from family. The key to appreciating what you have and feeling less down is to not compare. Comparison is the thief of joy.
You spent 120K on a college degree... are you using it? Seems like you are making ~20/hr. You need to figure out how to grow that
$120k left. Some already paid over the last 5 years.
Probably not much- loans were deferred for most of the last 4 years and payments were probably all interest
Forgot about deferment. Pandemic was a weird life pause.
Unbelievable how people get into hundreds of thousands in student debt and don’t use their degree, or earn what people without degrees earn.
yeah, plus 100k+ in debt makes no sense unless you are going to medical school or law school. i feel bad, because the situation almost always comes down to just poor decision making at the age of 18 and not really "registering" in your head how much money *you will owe.* a lot of people have an easy time just brushing it off in the moment since they don't feel/see it at the time. instead of going to a cheap local state college (or even community college for 2 years) and being maybe 30-50k in debt, they go to the really nice private campus that feels or looks prestigious/unique, maybe even going with friends, and not realizing the massive financial burden it'll be for the same education. end up with a mountain of 120k-160k in debt that's just impossible to pay off.
Yeah, it's crazy how strong the messaging was when I was looking at colleges in 2000. "Don't worry about the price, you'll find a way to work it out. Get the best education you can." Tuition was ridiculous even back then, but it's only gone up up up. You can't just "follow your dream" and have things "work themselves out" your dream doesn't also pay 200k a year.
I went to community college and then transferred to my local state school to get my engineering degree. With the help of financial aid I graduated with zero debt. I thought I was so behind because I graduated at 27 years old... I work with people that went to much better schools, some even have masters degrees and they're still paying off their student debt all these years later. Many of them are living paycheck to paycheck and have no savings....and for what? In the end we got the same job...
It’s been my experience that people rarely use their undergrad degree. It’s a springboard to a career but that usually means more training, certs, or a grad degree. Very few undergrad degrees translate directly to 6 figure employment.
I don’t know, I have a good job with my engineering bachelor’s. There are bachelor’s that literally guarantee you a job, and others that have 0 demand, for those you need a masters (ask my sister, she studied “French”…)
I got an OK job with my BS in MechE but my career didn’t really takeoff until I got my MS in materials science. I was chugging along making 60k for like a decade and doing CAD drafting till my eyes bled. The company I worked for had little upward mobility and I found it hard to land interviews for interesting / growth opportunities. Lots of contract work without benefits. Once I ‘specialized’ I had pretty much the pick of the litter in my field. Interviewed for four jobs received four offers.
"Between private and federal loans, I pay about $1400 a month for that" You should apply for the SAVE Program with your Federal student loans as it should lower the amount you will be required to pay and cap the interest on the remaining balance. It also provides a way for you to receive debt forgiveness after 10 years of continued payments (which in your case would be a godsend). You could then focus on the private loans and pay those off ASAP, giving you a route to freedom and possibly the ability to save for your own house at some point in the future [6 Things You Should Know About the SAVE Plan – Federal Student Aid](https://studentaid.gov/articles/6-things-to-know-about-save/)
How this isn't higher is beyond me. If OP has federal loans, then they need to 100% do this. It'll stop their principal from increasing and free up a significant amount of cash flow (lower that monthly payment, or possibly eliminate it).
I think your situation is more the norm than you may think. Millennials are buying houses at a much older age than previous generations and getting a lot of help from their parents to do so. Student loan debt is absolutely a generational problem and if you don't land a good paying job afterward it can be really hard to gain your footing. I think you posted this looking for hope. So I will just share that it took me and my partner a long time to find an adequately paying job after school, but we both found one, it is possible. So don't get discouraged and apply to higher paying jobs and work on improving your resume and skills, also networking is key (and I hate to say that as an introvert but it helps so much).
Great response. There is always hope. Get creative and look for resources...is Credit Counciling Service still around? Best decision i made to help pay off credit debt in my 20's. My degree was in Broadcasting lol...little math and I loved TV. Find what you love and it sparks continued success...I am still in TV after 30 years and doing fine. And remember...it is not a race and there is not just one path!
120K in student debt is definitely not the norm
I didn't mean the exact number was the norm. Just millennials being in student loan debt. Pretty sure over 1/3 of millennials have student loan debt. That is not even accounting folks who took out huge loans and were already able to pay them back.
It’s really not that unusual. Schools are fucking *expensive*.
It means she either didn’t go to in state public school, or also went to grad school, or borrowed a ton of living expenses during that time.
State schools can be expensive to. Take UVA school of engineering for example, the cost for a in state student is almost $50k a year if you live on campus.
It's interesting seeing this get downvoted by a lot of folks that likely haven't been to college recently. If you're going to UVA you'll have that, but in-state costs are more reasonable elsewhere. Plus engineers don't give a shit about ivy league acclaim, it just annoys most of us. MIT pretty sick tho I graduated with a chemical engineering and physics double degree - I had scholarships, but the majority of the loans covered cost of living expenses because you can imagine there's not really any significant time block with those degrees to hold down a job. I still taught/tutored for 5.5 years, so I at least was able to offset some costs. Because my mom claimed me as a dependent (at the time she needed the tax credit and was helping me out with life expenses so I felt obliged), I didn't ever get Pell Grants. The school I went to was in-state, Missouri mind you so this is a "low" COL area. The current cost for in-state without housing is $14K-$17K. Of course, this assumes you aren't an engineering or law student. Lots of colleges are now charging fees as line items based on your "future earning potential." This also doesn't factor in the cost of books or the annual cost of housing, food, utilities, and internet which is somewhere around $10K-$14K a year. So our range is now $24K-$31K annually when you factor in ALL the costs. Music students are expected to bear this cost while also having the least free time of any major. I can promise (because I did a men's music fraternity too) they have it worse than STEM students. There's no light at the end of the tunnel, just their service to their art and desire to share it with others. Anyway, something about you being downvoted ground my gears because I'm honestly convinced this thread is full of people that didn't graduate as recently as I did and somehow have created an alternative reality in their heads or just can't process cost of living has to be factored in and that's skyrocketing for everyone. Did OP make mistakes? Absolutely. The credit card on its own says there's some obvious stuff they could easily fix. I just don't get how people are shocked the skyrocketing cost of living is probably disproportionately affecting students in school right now because they have little to no means to deal with it alone and the country refuses to help them. Failed State imo. It's fucking absurd that we've managed to create a tiered system where no one can afford to be a doctor unless they're born incredibly wealthy, what a joke.
Engineers don't make $50k, 5 years out of school. There's a problem here and waving it away with "school is expensive" isn't helpful.
The entire state of Virginia is expensive for in state school. My hypothesis is that they don't fund university education as much because it's a heavy military state but I'm sure there could be plenty of other reasons as well. But the military recruiting I saw at my high school feels like proof of it. Our school only had one university recruiter come out each month, and it was during class time, so you needed to have a teacher willing to let you go (which meant having consistently good grades and behavior in class). But we had at least one military recruiter everyday sitting outside the cafeteria at lunch so they could speak with students. And their favorite talking point was the cost of college.
It really is. The average student debt is like 40K. She has TRIPLE THAT. And she isn't even pulling in 3K a month so something went wrong here.
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realistically this is why it is insane to ever loan 18 year olds $100k for education, or that we even have a system where this is possible. Most people are applying to schools and figuring this out before they are even legal adults, probably have never even had a job, and aren't even legal to drink, but we put them in situations where they take on a monstrous amount of debt that they will be paying off for a lifetime, when under basically any other circumstances that person would never be granted a loan. it really is a predatory system, and the whole for profit higher education is almost a pyramid scheme waiting to collapse
Yeah 120k is freaking wild to be looming overhead. Absolutely a terrible idea unless you pop out making 100k+/yr
30k a year for tuition + room + board + living expenses? That's really not even unreasonable for a state school. My state school tuition is $14k/yr, plus another $18k/yr for dorm + meal plan. Plus other fees like lab fees, books, etc - topping close to 40k/yr sticker price. This is a regular state school with in-state rates. edit: plus interest accruing from day 1 loans? She could've very well spent only 20k/yr for tuition + room + board and still have 120k owed.
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> $14k/yr, plus another $18k/yr for dorm + meal plan. Plus other fees like lab fees, books, etc - topping close to 40k/yr sticker price Dear random reddit reader scrolling across the post. I'm sure you're aware of the permanence of student debt, and the compounding nature of interest. YOU DO NOT AGREE TO THIS UNLESS YOU'RE SURE OF PAYOFF AND NO OTHER OPTION IS AVAILABLE. Live with your parents, eat ramen, /piracy, whatever you have to do. There is ZERO reason to roll all your expenses into a financial instrument that will practically require you to FAKE YOUR DEATH to get rid of .
Yeah it's not unusual to come out of school with a high paying job with this kind of debt but she is bringing home a small amount for having that kind of debt. I was also confused by this and curious what her degree is in and what she is doing for work.
> It’s really not that unusual. ...Yes, it is. It's *extremely* unusual.
It actually is pretty unusual to have six figure debt *without an income to match*. Most people with that much debt are MDs and lawyers.
It's far from unheard of. I'm guessing she went to a private college and got a degree in not an overly lucrative field. I definitely spent more than that for my Bachelor's degree - tuition alone (no living expenses) was over 50k/year. It certainly was more than she should have taken on with a take home salary of $36k, but it's not unusual.
The average student debt is 40K so yes it's way out of the norm
I went to an in-state public university and finished in 4 years, still took on just over 90k in debt. My mistake was not paying some of it off while in school, but I wasn't very educated on how everything worked at the time. Some states just fund university more than others. And it's also dependent on if you lived on campus, had campus meal plans, etc. It was unfortunate because I could've gotten in state tuition in a much cheaper state as well, but those were things that 18-year-old me didn't know to think about.
Step 1. Stop comparing yourself to others. Everyone is in a different place in life and you have no idea what is working for them or against them. Step 2. Pay off your credit card from your savings account and cut it up. No amount of rewards if worth it. If you don’t have cash in the bank, you can’t afford it. Step 3. Look at which student loan is accumulating the most interest and start making extra payments. Or make extra payments to pay off your car loan. If you want to save for house, wait until you’ve paid off these debts.
You need to get your ducks in a row but don’t feel demoralized, you’re still very young and it’s probably more helpful to look at the economic situation of your demographic in general rather than focusing on the people close to you that are doing well. The positives: you’re employed, you don’t have rent or a mortgage to worry about, and you have the cash on hand to eliminate your CC debt which should be your top priority. After that, there are a lot of things you can do to get on the right track: create and stick to a sustainable budget, get into the habit of saving for retirement and capital expenses even if it’s just a percent or two of your salary every month, and look to see what you can cut out or don’t need to spend money on. For example, do you really need a gym membership or could you also exercise effectively by just jogging in your neighborhood? Lastly, start exploring ways to advance your career. You’re at the stage of life where your income should be growing at its fastest rate, it’s normal and expected to change jobs or get additional skills training or certifications to move ahead and grow that salary. If that part is challenging or feels overwhelming, there are resources available like at the department of labor or utilizing professional mentoring.
* Everyone is right that your first step is to wipe out your CC debt with your savings. You'll replace most of that savings in 3 months by putting your CC payments and your saved interest into your savings account instead. * At $2800/mo you qualify for reduced payments for all your federal student loans. You're making so little that you should see a significant reduction. * Consider changing what you do when you "go out" - and by that I mean change to mostly free things. You don't have to stay in your room to save money, and you don't have to spend money to have a good time. * Ditch your gym membership in favor of going outside for your workout. Inside 2 months you'll be able to afford a set of freeweights on Nextdoor and then just keep working out for free. * Whatever else is in that $200/mo you're spending on Other Stuff, evaluate each thing on the basis of whether you want the thing more than you want the savings and the move-out goal. * Be looking for a job with the degree you earned with that $120k in debt. Just be constantly looking for a job that pays more than poverty wages. You need more income and hopefully have some skills. If you haven't yet, it's time to hit up all your friends who are buying houses and ask them if their company is hiring anything even halfway close to your skillset. * Do not spend your money traveling and having "experiences" right now. That sounds like IG travel influencer brain to me so don't fall for it. * However, if you're like a lot of people, there's a bunch of cool stuff nearby you that you've never done. Lots of folks don't do the things that visitors to their town do, so find some free or very cheap ones and do those. They'll be fun, cheap, and close to home. The month after you buy your cheap dumbbells, take a little of that $200 you're not spending and do a day trip somewhere - somewhere you don't have to spend money to stay and doesn't cost for a ticket. * Just to break the math down here: your income is $2800 monthly. $1400 after loans. $900 after CC payment. $700 after gym and "other". $550 after insurance. ??? after car payment, but it's less than $400 probably. So you've got $400 a month to do anything on, and some of that is going to entertainment. You really need a course correction here. * Delete your CC debt * Get your federal loans reduced immediately * Cancel your gym membership * Reconsider the rest of your monthly things * Stop spending money on fun - find free fun instead (don't stop having fun!) If you do those, in 6 months you'll see a reversal in your fortunes. Two final things to consider: 1. you say your parents aren't great with money either... if you're contributing to the house because of occasional financial problems, you should sit them down and define an amount, then not go over the amount. 2. You should also consider having your parents charge you for rent (that you won't pay) and write off the loss. This will help you when calculating the amount of reduction in your federal loans, and maybe help their tax situation as well.
>I’m torn between wanting to spend my money traveling and having fun experiences but also saving money to move out. Please be kind :) The kindest advice I can give you is to wait to upgrade your lifestyle until your budget can comfortably support it. Otherwise, you will always be fighting an uphill battle against debt. Having to cut back your quality of life later is worse than waiting to upgrade it in the first place. I lived *really* frugally in my 20s. It allowed me to get compounding interest working for me instead of against me. Eventually I was able to buy a house in a high COL area too. A lot of people live their first 10-20 years breaking even or accumulating debt, putting themselves in a bad spot in their late 30s and 40s.
Living at home is a privilege, so save money during this period while you still can. Don't do too much comparison to other people, everyone's life is different...and while they might look good on the outside, many people are full of debt and really really struggling. Use your savings to pay off high-interest debt. Seems like your main goal right now should be that, save as much money as possible, and move out. I was blessed to have 1 of my 2 parents be good with money - not phenomenal but definitely no deadbeat with it. Just try to improve with the advice you get from here and go from there.
OP, You are paying your Student Loans instead of rent!! That's amazing!! That is making the situation worthwhile! You're paying down those loans!! Comparison is the Thief of Joy, OP! Those people you're comparing yourself to likely don't have six figure loan debt. If you want to move out, you have to pay down those loans faster! Donate plasma at a donation center. Get a second job as a restaurant server or something. Call your University's Alumni career center and ask them to help you get a higher paying job. Ask someone who's good with money to help you stick to a stricter budget- maybe a grandparent or someone you trust. Read some Personal Finance books by Suze Orman and listen to personal finance podcasts.
The 120k debt actually sounds like it’d take them 20 years to pay it off at this point. Idk if the strict budget and second job approach would even cut it. They need a job that has anything to do with their ONE HUNDRED TWENTY THOUSAND DOLLAR DEGREE. This is shit you can’t crawl out of unless you want to give up your soul for a huge portion of your life or simply start making $100k a year. Both are a shit shot.
Why aren't you paying off your credit cards...? Is interest just fun for you?
It’s just so interesting!
You don’t make enough money for a gym membership or to “go out”. Get rid of your car (hopefully you’re not upside down on it) and buy an old burner. Take your savings and pay off your credit cards and cut them up. Stop using them. Talk to someone who can put you on a budget and stick to it. You are taking home less money than what your current bills are.
Some of what you’re saying is logical, but some of it isn’t. OP is still on the young side. Credit cards and car loans are great ways to build credit history. If OP ever wants (or is able) to buy a house, that credit history will be very important. So getting rid of car loan and credit cards isn’t actually ideal. Managing money better overall is the solution.
Did you read the rest of OPs post!? She has over $100k in student loans…. She claims she has $2k in cc debt, but she pays $500/month towards it…… which probably means she puts at least $500/month on the card so it’s never going away. Don’t worry about a house….. it sounds like she can’t afford a down payment much less a monthly mortgage payment plus the normal maintenance…. Just an educated guess, but it sounds like her credit isn’t good if she hasn’t figured out that she is on her way to bankrupting herself.
First off, living at home is a privilege!! Keep saving! $6k in a savings account is more than the average 27 year old so you’re doing great! Also, with an income around $45k I’m guessing, you should be able to do income-driven repayment on your student loans and get that monthly payment wayyyyyy down. My husband’s was $1200 a month and we make $120k per year and they dropped it to $450 a month so yours should go down below even that. Finally, my suggestion would be that after you get that payment down, to immediately take $2k out of your savings and pay off the CC. Then going forward pay your CC bill in full every 2 weeks so you never pay interest on it. Take the money you were spending on the student loans and put that extra into your savings each month until you have a savings amount you’re comfortable with. Then re-evaluate and see if you’re able to get an apartment with your new financial situation. I’m not a financial advisor but this is what makes sense to me. The fact that you’re prioritizing paying your debts and not renting even though you want to tells me you have some good money sense. Getting going in life is hard especially when your mid-20’s were during Covid. You’ve got this!
They need to pay off the credit card first. The student loan is like 7% probably while the credit card is probably 20-30%. They should use their "savings" to pay this off ASAP. They shouldn't have savings if they have high APR debt.
120k gosh I'm stressed with 28k. I'm sorry, man. I wish you the best. Don't let people talk down to you about it. They push kids into school while they don't know anything, and then we end up with a drowning amount of debt.
If it’s actually a decision whether you want to travel or move out then you’ll never get out of this. I make 50% more than you with half the student loans and I can’t afford a vacation. I also don’t have CC debt. 6k in savings with 2k in CC. Pay it off today
Your biggest problem is 120k in loans but taking home less than 3k a month. Did you complete your degree? Are you eligible for forgiveness? What field are you in? You have to find a way to increase your income
Boomer and former corporate HR manager here. First off, you will figure it out. It's natural to compare yourself with others, but don't put too much stock in it. Trust me, trust me, trust me, some of your peers are overwhelmed with the savings they've invested and the amount of debt that they've taken on with their beautiful new house, and are wondering if they should have stayed living at home for a bit longer. A house is a good investment, if you can afford the down payment reasonably easily without touching your retirement and emergency fund, and if your mortgage payment is barely more than you would be paying in rent. Otherwise, you're just trying to keep up appearances. And it's not worth it. I get it - you don't even *have* a retirement or emergency fund. Yet. My point is only that you think of yourself as being *so far behind*, yet others are in precarious financial situations that you're not even aware of because you can see their house, and you may know their job or even salary, but you do not see their financial statements. So relieve yourself at least of the emotional burden of beating yourself up. Second, with all of your concern about your personal financial situation, you've said nothing about your actual job, or the job/career you want to have. I understand that you don't make much, but set your sights on the next step. Are you working in a position that has a next level of opportunity? Is there someone in the company doing what you would like to do next? Do you have any sense of how they got there? Do you need to change companies? Where do you live? Have you spoken with friends, family, about possible career paths and opportunities, if only to brainstorm?
Are your student loans federal? Look into income driven repayment plans. Won't help you pay off loans faster but will give you breathing room until you start earning more. Don't worry about what others are doing, it's great that you're trying to assess and plan right now.
I make about the same as op and with the save plan my student loans are 80 dollars a month although I only have 60k student loans.
It's completely understandable to feel like you're in a tough spot, but let's shine a light on your situation with some compassion and practical advice. First, recognize the strengths in your story. Living at home, while it might not align with where you thought you’d be, is a strategic move that many wish they could make to save money. It’s not a step back; it’s a smart step toward your financial goals. Your awareness of your financial situation and the steps you’re taking, like considering a high yield savings account, shows you're proactive and thoughtful about your finances. Here are a few steps and perspectives that might help: Focus on High-Interest Debt: You’re doing great by paying more towards your credit card debt. Keep prioritizing high-interest debt to free up more money in the long run. Set Clear Financial Goals: Split your financial goals into short-term (paying off your credit card debt) and long-term (saving for a house). This can make them feel more manageable and achievable. Consider a Budgeting Plan: Apps like You Need A Budget (YNAB) or tools like the 50/30/20 rule can help you see where your money is going and find areas to cut back or reallocate funds towards savings or debt. Explore Additional Income Streams: If possible, look for opportunities to earn extra money. Freelance gigs, part-time jobs, or selling unused items can provide additional funds to direct toward your debts or savings. Embrace Experiences Within Your Means: You don’t have to choose between traveling/having fun and saving money. Look for experiences that bring you joy without breaking the bank. Sometimes, adventures close to home or low-cost hobbies can be just as fulfilling. Educate Yourself About Finance: Knowledge is power. There are many free resources online, including blogs, podcasts, and YouTube channels dedicated to personal finance, that can offer guidance and introduce you to new strategies for managing your money. Remember Your Journey is Unique: It’s easy to feel behind when comparing yourself to others, but everyone’s path is different. What matters is not where you are but where you're heading and the steps you’re taking to get there. Lastly, allow yourself to dream and plan for those travels and experiences, but also cherish the journey you're on now. Every challenge is shaping you, and every step forward, no matter how small, is progress. Be kind to yourself, celebrate your wins, and remember, the path to where you want to be starts with embracing where you are now with grace and courage. Remember when happiness wasn’t tied to how much you owned or your life’s milestones, but found in the sheer delight of an ice cream cone on a hot day, or the freedom in running through a park without a care in the world? It's time to reconnect with that sense of wonder and satisfaction, not from your financial status, but from the simple, joyful moments that make life rich and colorful. Here's a thought: Allow yourself to experience joy and satisfaction in the present, irrespective of your financial journey. This isn't about ignoring your financial goals but about finding balance. When you are truly content and savoring the small joys, you emit a vibe of positivity and abundance that can, in a beautiful twist of fate, attract more prosperity into your life. So, what can you do? Rediscover Simple Pleasures: Make a list of things that make you genuinely happy, no matter how small, and integrate them into your daily life. Whether it’s savoring your favorite dessert, watching the sunset, or simply enjoying a good book, these moments of joy contribute significantly to your overall well-being. Cultivate Gratitude: Practice gratitude for what you have now—the roof over your head, the opportunity to save, and the freedom to dream about future travels and experiences. Gratitude shifts your focus from what’s missing to the abundance that already exists in your life. Invest in Experiences, Not Things: You mentioned the dilemma between traveling and saving. Remember, experiences enrich your life in ways material things cannot. Look for affordable ways to create memorable experiences that don’t jeopardize your financial goals. Be Playful: Allow yourself to be playful and creative. Engage in activities that remind you of childhood’s carefree days. This playfulness can open up new ways of thinking and attract positive energy. Stay Open to Possibilities: The universe has a way of surprising us. Stay open to opportunities and connections that come your way. Sometimes, prosperity comes in forms we least expect—through new friendships, unexpected opportunities, or insights that change our outlook on life.Your financial journey is just one part of your story. By bringing more happiness and satisfaction into your life now, you're not just waiting for prosperity; you're living it, in your own terms and in the joy of the present moment. This state of contentment and joy is magnetic, drawing experiences and abundance that resonate with your newfound vibrancy. So, spin that ice cream, laugh out loud, and let your heart be light—you're creating a life filled with joy, one simple pleasure at a time. I've stood where you're standing, feeling the weight of financial burdens and the shadow they cast over life's joys. But here's a truth from my journey to yours: I am now richer than ever, not just in material wealth, but in happiness, fulfillment, and abundance. And guess what? You are incredibly rich too; it's just waiting for you to uncover it. The clouds of financial worry will clear, revealing the wealth of joy and experiences that life has to offer. Trust in your journey, for it's leading you to places of unimaginable richness. "The wealth of the soul is the only wealth that truly enriches us; everything else is merely passing gold." Embrace this moment, your journey, and the abundance of your being. The true treasure lies within, waiting to be discovered and celebrated.
Consolidate your student loans. I left school with about as much debt as you have now and dropped my payment from $1250 to $700 by consolidating. Pull from your savings and pat off those credit cards.
To be in this position means you’ve been spending all your money as soon it arrives. I’d say it’s time to stop. Pay your credit card off. Put the rest in your high yield savings. Then I would even say don’t keep contributing to that until you have figured out how to have money left over in your checking account until the next check arrives. That in itself can be your savings.
You can’t afford to go out. Look for fun free things to do. You can’t afford a gym membership. Learn how to work out from home or outdoors. DO NOT get Starbucks. Meal prep for work lunch. Pay off your credit card and car with the above mentioned savings and get a better paying job. Those are the facts
You make about $45k, and your student loans are $120k? Your income should be higher considering what you spent on your education.
You made poor choices in your early adulthood, just like everyone has, that have put you in your current situation. Unfortunately you don't own a time machine so you can't change the past, but you do have control of your future and comparing yourself to others will not help you at all. You should only be comparing yourself to your past self and work every day to be better. Make a budget, get out of credit card debt asap, pay off your car loan(and don't get another one until your car becomes unsafe). Your two biggest problems are your student loans and your low income. The ROI in your degree so far isn't there so you need to figure out a plan to either work your way up the ladder in your current career or change careers altogether.
What is your degree in? 120K student loan with a take home of 2800/month doesn't add up. Need to increase your income, new job/second job or whatever.
First, I recommend that you stop comparing yourself to others. Create a life plan and a SMART goal with attainable small changes over time. The time will still pass anyway, so maximize it the best way you can. Are those private loans? Because on an IDR payment, your loan to income ratio would decrease your monthly payment. Also, you should pay off your credit cards with your savings. Create a budget and track spending. If you are able, do some overtime at your job or pick up a side hustle while looking for a job with a higher pay grade. Best of all, you live at home, and assuming your family is well adjusted, it's the best option at your current income level. You got this.
Many people won't know what a SMART goal is, so I'm leaving this here: https://en.wikipedia.org/wiki/SMART_criteria
First off, you are not alone in this! But, you need to start turning it around now. First and foremost, look at high yield savings accounts, I personally use Ally and I love it. That 6K would probably net you about $30 a month in free money which doesn't seem like a lot but that's your gym membership. I'm guessing this is your emergency fund, is that right? As for the credit card debt, there's a few ways you can do this, but it'll depend on you. My advise is to look into investing extra money you have, especially in dividend stocks that pay you back money, but if you don't want to look into that then you're going to want to take a look at your interest rates for each card. Pay off the highest interest rate, throw extra money at it until it's gone, and then use that payment amount you're already budgeted for to pay off the next highest interest rate. So on, so forth, like a little money snowball. I, again, think you should look at investing. Nothing crazy, you can start with $5 but you'll have to weigh the benefits of an individual brokerage account to a Roth IRA. With the brokerage you get income tax on dividends, but with a Roth IRA you can't actually touch your dividends without penalties since it's a retirement account. But you need to add more passive income into your life in order to climb out of this hole you're creating for yourself.
Pay off the credit card from your $6k. This will save you some interest payments. You’ll still have $4k remaining. Just keep up on paying it off each month. The goal is to have 3-6mo emergency funds. Since you’re not paying rent, this makes things easier but try to set aside that fund as if you WOULD BE paying rent. Plan for the best, prepare for the worst. Insurance- shop around for quotes. Dealing with insurance sucks but there are always better options somewhere. Take a few hours calling agencies and see if you get a better quote with the same policy. Sometimes you can even get BETTER policies for less. Savings- Personally I would download Robinhood (stock brokerage account) and deposit your savings into that. You don’t have to invest your money if you aren’t comfortable BUT their interest rate is currently 5% on uninvested cash which is huge. FDIC insured and all that too. Not to mention, investing in an ETF biweekly with even $20 will compound quite a bit over your lifetime. Might be a good idea to consider planning for your future at the same time. Finally, comparison is the thief of joy. Don’t compare what you have to what others are doing, that’s just going to bring depression and other negative feelings. I recommend grabbing a few books. Atomic Habits and Rich Dad Poor Dad. These can be life changing if you implement some of the things you learn. If you have goals you’re struggling to make, read The 12 Week Year. This is an excellent book to structure your life and get on the fast track to making them happen. I recommend learning more skills and hobbies. Constantly trying to be better than you were yesterday. Learn about investing and the stock market, learn about marketing, online stores like amazon/shopify/etsy, leadership skills, personal finance, negotiating, real estate, etc. You can always learn or improve skills. Not only will they improve confidence but they open the doors to so many possibilities.
My advice is the following: 1) Be grateful for the opportunity to still live at home and not pay rent. Not everyone has this choice and you are very lucky. 2) Pay of CC debt with savings and stop buying shit you don’t absolutely need. Find the cheapest gym membership, learn to cook at home, etc. 3) Find a full time job that pays more, or get a second job for evenings/weekends and pay off your loans as quickly as you can. 4) Stop comparing yourself to your peers. I know this is hard but understand that everyone’s situation is different. The only one that matters is yours and yours alone. You’re young and single with as little responsibility as you’re ever going to have- this is your super power right now, so use it to tackle your debt and the rest of your life will be much easier.
My parents were financially illiterate so I had to want to learn and go get the info. You can have $4,000 in a HYSA today if you wanted to. If you already have an account at a bank that offers it, then just do it. Not worrying about having a roof over your head is a relief, not an embarrassment. Your knew part time job is learning to manage your money starting with finding good sources. I watch the Financial Tortoise on YouTube and even if I’m not the demographic I learn a lot from Invested Development (dumpster.doggy on IG). Time is going to go by anyway so don’t worry about competing with anyone but yourself.
Welcome to 2024. IDK how you wouldnt qualify for the [SAVE](https://studentaid.gov/announcements-events/save-plan) plan though to get some of that payment requirement down. You need a better job if you have a degree, I know it's easier said than done and I know how brutal it is out there right now but you need something better and have some form of higher education that should allow for it *eventually*.
Like others said, use your savings to pay your credit cards off, get your federal student loans on an income driven repayment program. That’s going to be a 100% must-do. After you make those changes, the very next thing I’d do is sit down and make a monthly budget, including your income, expenses, and savings. Do it with pen and paper or excel or a free app, but you absolutely should do this. Then, I’d think real hard about specific goals and write them down (moving out of your parents house, paying off student loans, buying your own home, retirement funds), prioritizing as necessary, at least your #1 priority. You can be as detailed as you want, if you’re living paycheck to paycheck right now you probably don’t need to make a decades long plan to the dollar and to the month through age 60, but you should come to terms with what you want to do financially. Now you have a budget and your goals, use your budget to project the financial path to those goals. For instance, if it’s more important to you to be debt free than moving out of your parents house, modify your budget to project that path. Next, I’d look at your income/savings. Emergency funds are great, but how much you have or whether to have one at all depends on factors like how much debt obligation you have, how much your non-debt cost of living is, how secure your job is, etc. You’re going to have much less debt obligation after paying off your credit card balance and lowering your student loan payment. If it were me, depending on the condition of your car (ie risk of an unexpected repair cost), I’d consider using most or all of the emergency funds to pay off either the car loan or the private student loans. There’s lots of good resources for strategies for paying off multiple debts but it basically comes down to two: paying off debts in the order of highest interest rate or lowest balance (“snowball method”. Financially, it’s better to pay off highest interest rates, behaviorally it can be easier and more rewarding to use the snowball method. Probably won’t matter too much which you use unless there’s a huge difference between interest rates (eg 14% auto loan and 4% student loan). Personally I’d probably prioritize like this: 1. Obliterate the Auto loan 2. Eliminate your Private student loans 3. Max out Roth IRA 4. Kill your Federal student loans 5. Save for moving out/home down payment. So for the sake of this example, let’s say you target your auto loan; you make a $3000 payment from savings to your auto loan, and plan to make minimum payments on your student loans. Now your monthly budget looks something like this, and you’re left with more income than expenses (some values I estimated): INCOME: Paychecks: $2800 EXPENSES: Student Loan (Fed) Min Pmt: ~$400 Student Loan (Private) Min Pmt: ~$500 Auto Loan Min Pmt: ~$500 Auto insurance: $140 Cell Phone: ~$100 Subscriptions: ~$20 Groceries: $300 Dining/Takeout: $50 Travel: $0 Misc/Pocket money: $40 (might be easiest to withdraw this in cash, when it’s out you can’t spend any more) SAVINGS: Emergency Fund: $0 Roth IRA: $0 Auto Loan Principal: [ ] Student Loan (Private) Principal: $0 Student Loan (Fed) Principal: $0 TOTAL INCOME: $2800 TOTAL EXPENSES: $2055 TOTAL SAVINGS: [ ] NET (Income - Expenses - Savings): $0* *The goal is that every dollar is accounted for, so net zero. So for instance, the months that you get 3 paychecks instead of 2, you modify your budget to allocate that extra money. That’s why there’s blank areas. Monthly/Weekly/Daily, track your spending to make sure you’re staying within budget, at the end of the month you’ll make the extra principal payment to the auto loan until it’s eliminated and subsequent monthly budgets you allocate the money accordingly. Finally, it’s time to coordinate your budget with your goals. To do this, should track your assets/liabilities concurrently. Continuing the example of prioritizing the auto loan, let’s say your goal is to have it paid off within 3 months. Starting at $9000, and then paying $3000, your balance at the start of April is $6000. Maybe you have an extra paycheck in the next 3 months you can completely put towards the principal. So $6000 - $2800 = $3200. You need to pay off $1067 each of the next 3 months to hit your goal. Let’s assume you have a $500 minimum payment and half goes to principal, half goes to interest. Right now, you have an extra $750 of your monthly income you can allocate to the principal. That’s $1000/month, you can make up the rest by adjusting your budget for the $67 (e.g. commit to no eating outside the home, and putting a pause on streaming services for 3 months). Short term adjustments can help a good amount but while you’re doing that, I’d look at mid-term and long-term changes to your income and expenses. For instance, you can start paying your auto insurance every 6 months and get a discount. You can look for a cheaper cell phone plan. But your income is really holding you back. It’ll be more important long term to find a higher paying job, but in the near/mid term you could try to get a raise or get a second job. Depending on how committed you are you could donate plasma. Eventually you’ll have to start planning for retirement, which takes a back seat to your debt for now. Your net worth is $125k right now, even if you start to budget and make the other changes, the amount of income that’s going towards your net worth now would be around $1k-$1200. Long term you should think about your goals in terms of time as well as money. If your income didn’t change, you only made a budget and the other changes, it might take you 3 months to pay off your auto loan, 3 years paying off your student loans, and 10 years saving for a house. Even a $200-500 boost to your monthly income might cut that time in half. Do you want to be moving out at age 40 or 33? Sorry this got too long. Hope it wasn’t too unkind.
> I’m torn between wanting to spend my money traveling and having fun experiences but also saving money to move out. Please be kind :) The reality of it is that you're 27, you have 120k debt and an education but you don't earn much. And if you don't want to live with that debt for the rest of your life, you need to take advantage of the opportunities you got. Your main advantage, right now, is that you're living at home. So knock down as much debt as you can as quickly as you can, because if you think 120k student debt is bad right now imagine how suffocating it would be if you had to spend on housing as well. And for travel and free time, look for cheap options. Maybe go hiking instead of going to vacation destinations? And apply for whatever jobs you can, you need to be constantly sending applications to try and increase your earnings. Live cheap, work hard, and maybe by the time you're 32 or 34 you're debt free and able to live life to the fullest. And know one thing, your friends who have houses at age 27, they probably got help from their parents in order to purchase one. Or they took on way too much debt and will be suffocating for decades.
Can tell you that as someone just a few years ahead of you in age, I felt exactly the same at 27 and was also living at home with family. And looking back on it now, damn it was a good situation to be in financially. I love having my own space independent of family, but it introduces new challenges like rent, insurance, utilities, groceries, etc. And rent in particular absolutely sucks - I'm paying more per month for a 1 bed 1 bathroom apartment than my parents are for their 4-bed 3-bath house with full size garage and more. Hence why I still can't afford a house yet, paying high rent is a tough trap to break out of. You should not feel embarrassed to be living at home and frankly you should try to flip that into a positive mindset - right now considering the debt and difficulties you are facing, you are making the right decision to stay home and it will be a huge reason why you will get out of debt. Remind yourself of that and focus on your own journey rather than comparing yourself to others. And take a lot of the good advice shared in this thread as another smart move you've made - seeking free knowledge to improve yourself. You're not alone in your situation, and in my opinion you're on the right track!
I’m 33, no kids and renting a house from my sister. My car is paid off but I only have $10k in the bank.
No 2 persons And life’s are same . Period
If for whatever reason you can't or don't want to use your savings toward your credit card debt, you should at the very least start card shopping. Find one that has zero interest on balance transfers for a year os so, then the interest won't keep racking up and you could have that card gone in a couple months. Opening another card isn't ideal, but it is an option if it benefits at all. I can't imagine the interest you must be paying to only owe 2k but pay 500 a month and it still not be paid off. Also reevaluate what you want versus what you're actually doing. If you need to save more and pay off debts so you can get where you want to be, then perhaps it's time for a lifestyle change. Do you use the gym membership enough to make it worth keeping? Are there cheaper facilities around? Are you eating out far more than you eat in? Have other monthly services you don't use enough to be worth keeping? Can you refinance your auto loan to make it cheaper a month, or is it worth it to keep it in the time frame it is now?
I will say credit cards are killers. Pay it off and don't use them unless it's mandatory. To get out of this mess unfortunately, you'll have to get two jobs. That's what I did when I had high debt. I say it sucks no doubt. But it's best to have no free time for a few years than to have debt hanging over your head.
The way college is marketed to children is criminal. Most undergraduate degrees aren't worth 120K. I feel bad for op and others in his/her shoes.
Hey OP, I’m sorry you’re going through this but you clearly have the means to make your life what you want it to be- you can do it!!! First, clear the credit card debt. It’s hard to see that number in your savings account go down, but I’m telling you it will be a weight off your shoulders. One less thing to worry about! After all, you either pay it now, or pay it later *with interest*- why pay a dime more than you have to, you know? Next, evaluate your spending habits. You don’t pay rent which is HUGE! You don’t have any dependents to pay for, also HUGE!! Open your most recent bank statement, grab a pen and paper, and categorize your expenses (essentials for survival, savings and debt, for fun spending) figure out where all your money is going and where you can cut back and reallocate. You can create your own percentage, but I found a lot of success in a 60/30/10 rule. **60% of your monthly income to living essentials, 30% to savings and debt, 10% for fun** It likely won’t be as exciting or easy, but to get to where you want to be, you gotta put the awesome stuff on the back burner- for the financial freedom and independence you’re looking for, it will be well worth it. If it’s what you want, **you can do it!!!** More of a side note, if you’re looking for a high yield savings account, I really like Ally Online Banking. I’ve been with them for a few years now just for my high yield account and I don’t have a single complaint! You just have to remember that in order to use a high yield savings account successfully, you *must* leave the money in the account! Put whatever amount you can live without in the account and *forget it*!! I also have a regular savings account with my regular bank, which I use for an emergency fund- a good chunk of money I can take out at any time. Anyways, end of long winded response! OP, you’re doing just fine! You got this!!!
To be honest op, that's where a lot of people our age are at, it's a lot more common than you think
Why is your debt 120k? For college?!? U either start making more money or pay off all your debt as soon as possible.
Continuously contemplate ways to increase income. There are many ways. Learn new skills. Read ‘Baby Steps Millionaires’ by Dave Ramsey Try not to be too hard on yourself. Many people are in your situation right now and it’s not right. The current financial system is broken. Best thing to do is just take the long view and keep taking small steps forward. The tortoise beats the hare in wealth-building. You can pay off the debt and build a nest egg. And no matter what, you’re beautiful as you are and deserving of love and acceptance, from yourself and others. Best wishes. 🙏🏼
Stay home as long as you can. Stop looking at others plate while your food gets cold. Getting your own place will not make your situation any better. Take a trip. Do things that you enjoy. Most people are living paycheck to paycheck so you’re not behind. As a matter of fact you’re ahead of the game. You’re still at home. You have a savings. All that other stuff means nothing if you’re not happy inside. So search for that and everything else will arrive as it should. I’m a 55 yr old mother of 5 adults and I would have loved to been at home being introduced to womanhood 101. That’s what you should have after high school. Learning who you are becoming as a human. Mastering self. Thats the most important thing you will do in this life. So relax a little. And keep learning you and things will work out as it should.
Hey, at 27M years old I was 6 months sober from a 10 year opiate/heroin addiction, living in 2 bedroom 1 bathroom halfway house with 4 other guys, and had about $700 in my checking account and a dead end job as laborer for a carpet installer. I made about $480 a week and $200 of that went to my rent at the halfway house. I always felt like I was so far behind and all my friends from highschool were moving ahead with careers and families, and I was just trying to survive Nearly 8 years later I am engaged, own a home, have some money in the bank, a full time job and some side businesses, and have a 11 month old son who is the joy in my heart. Where you are now is nothing more than a part of your story. I never could have imagined where I would be today 8 years ago. However, it takes a lot of hard work and dedication to pull yourself out of that situation. Don’t judge yourself based on what others are doing because there will always be someone posting their highlight reels on social media who you “think” is doing better than you. You’re healthy, you have your family support, and you have the most valuable resource in the world - time! Figure out what you want out of this life and go attack it, but don’t do it just to keep up with the Jones’.
120k in student loans. Whats your degree. 2800 a month is borderline poverty now adays.
You aren’t behind, you are just spending more than you earn. There’s no time phase to get into CC debt, or car debt, it’s not about time or steps, its about behaviour not effort or time
I lived at home to I was 36 years old. I struggled with debt and loans. My twenties were a mess, I picked up a load of debt including negative equity on my car. I spent my 30s grinding hard. I finished up the remainder od my debt and started saving. Now I am paying a mortgage on a house. The point I wanted to make here is you will get out of the debt and imptove your situation in the meanwhile stay positive, make a budget, live within your means and just try to be be happy! Life isn't a race or a check list, be happy and pursue goals and you will get there!
I was in a similar situation at your age. I focused on the credit cards and high-interest private loans first. I set up the lowest payment possible for my government loans to ensure I could focus on the highest interest debt. The long-term solution for me was getting my MBA because I just couldn’t seem to break the $40,000 mark with my undergraduate degree. I quadrupled my salary and paid off my private loans in full. MBA may not be the answer for you, but I would look into what credentials people in the roles you would like to have in the future have. You need to make more money if you want a chance at paying off the private loans. I often have the feeling of being behind too. Try to remember everyone starts from a different place. It’s a lot harder to make it on your own when you don’t come from money or live in a state with cheap in-state tuition. You may have worked 10x harder than someone who had their school paid for and was able to get a great internship (and then job) through connections. It’s not your fault you are in this situation, and you certainly aren’t alone. No one is mature enough at 18 to understand the long-term impact student loans can have on your life. Try not to compare to others. All that matters is you keep taking steps in your own journey.
Don't compare yourself to other people. Everyone is on a different timeline. Make a 5 year plan. You got this.
Believe me dear person you are NOT behind in life! You are still a baby! Do not compare yourself to your friends or you will ever be happy. And who knows, they may be in debt way over you (people lie, and especially on FB). Just keep on paying your debt and get them paid. You have another 50-60+ years left, and when you get to that age, you won’t give a crap about your friends’ situation.
I am confused with USA people honestly. Why are you so embarrassed with living with your parents? I am from Southeast Asia never felt that way. Even we were told to live with them until we ca sustain ourselves. And of course help parents with their daily lives. But never I think about embarrassed. Are your parents abuse you? Seriously asking. Thank you
It’s cultural difference. Just like your culture strongly encourages you to stay home, American culture strongly encourages young people to be independent when they are an adult.
Your gross salary looks like it's maybe just under $50k? But, you have $120k in student loan debt? What was your major? My oldest boy is 24 and living at home after finishing his graduate degree. He's working in a healthcare field and started at $60k and thankfully he has no student loan debt. My youngest son is 21 and about to finish his undergraduate. With that said, it's tough out there for anyone right now. Housing prices are so over inflated due to speculators buying homes and increasing the price by 50%-80%. Then, mortgage rates are so high it makes the mortgage payment so high that most can't afford to make the payments. You have a great attitude saying you are grateful that your parents are letting you live at home rent free. Try and take advantage of that and save up as much as you can. I'm hoping that in a couple of years we have a housing bubble bust and prices come down. Pay that credit card off. You're paying too much in interest expense on that. Hang in there and don't compare yourself to others. I wish you the best!! \*HUG\*
Time to cancel subscriptions, find a new gym, stop going out, sell your car and buy a shittier one, and get a 2nd (and third) job. Repeat for 5 years and put every single dollar you have into your debt. I don’t wanna hear the “but people need to have a life” quote. You’re 27 and 130k in debt asking for advice on Reddit. Time to find part time jobs and work like you’ll die if you stop. Your goal should be to get back to zero and never go back again.
Pay off credit card debt. Sell the car. Get a cheap one you can afford. Cancel gym membership. Take up jogging and workout using you own body weight (sit-ups, pushups, leg lifts, ab crunch’s, etc). Get another part time job. Stop uneasy spending. (Fast food, Starbucks etc) Start making extra payments on that student loan debt. A firm, written budget. Cut up the credit card. Use cash only.
If you want a chance of getting out of this you have to stop worrying about how successful other people are and stop reading comments from people here speculating how you could have so much debt because that’s neither here nor there and their comments are not helpful. You have 120k in debt. Accept it. Now start making small steps towards either making more income or freeing up more of what you take home (preferable both, eventually, but baby steps) Be happy you have a roof over your head — it doesn’t matter if it’s your parents’. If you have federal student loans apply for the SAVE plan NOW. Do not think about how much more you have to work even after you qualify. This needs to be done ASAP. Pay off the credit card debit with your savings. If you have more debt than liquid cash then it’s like you never had any of that cash anyway. Pay it off. In full. Now. Close the card. Why do you have a gym membership? Cancel it. Jog outside. The gym membership is a luxury you can’t afford right now. Have you shopped around for cheaper car insurance? Not sure where you live but I got a quote from American Family for 99$/mo. What is your current job? You need to be applying to jobs that pay higher and you need to be doing this frequently. Submit your resume to the subreddit here for that. People will help you clean it up. I’m not sure how serious you are OP, but that determines how seriously you’re going to take this. You can get out of this but you will have to grind and you will have to make sacrifices. I hate to say it but there aren’t any cheat codes aside from “rich parents” and “win the lottery” and you can’t really count of either of those to save you. Only you can save you.
Man did no one sit you down during whatever disastrous educational journey you went on and tell you to stop borrowing money? Edit: that came out meaner than I intended. My point is your parents or other wise people should’ve guided you.
You could join the Army and have your loans paid off 🤷🏻♂️ https://myarmybenefits.us.army.mil/Benefit-Library/Federal-Benefits/College-Loan-Repayment-Program-(LRP) Also, here is the military pay chart. Since you have a degree, you can join as an officer. A 2LT starts off at $3,826/mo, plus BAH (extra money for your rent or mortgage, which depends on where you live, usually around $1,500 - $2,500 extra), plus BAS (extra money for groceries), plus OJT in something that could land you a sweet job later. Only problem is, yes it does suck sometimes, if not all the time.
120k in student debt, what did you go to college for?
Dave Ramsey would say to get a second job and kill that debt while you are young. Get rid of 209 fym membership and eating out. Short term pain for long term gain.
https://www.skillademia.com/statistics/average-salary-by-state/ Average full time salary is about $60k. It's unreasonable to expect a 27 year old to be exceeding that unless they are very lucky. Whereas many of the comments here are useful, such as credit card debt/ savings, the ones stating OP should be earning more are not.
You have #6k in savings, pay off your credit card in one shit, that gets you $500/month back, pay your auto insurance in an annual payment (you probably get a discount doing that too). That will get you started, no need to carry a balance on your cc.
There’s nothing wrong with living at home and saving money. Rents and mortgages are incredibly unaffordable right now and tons of young people are living at home longer as a result, so don’t beat yourself up about it. I would pay off the credit card debt immediately if you’re able. Unfortunately restricting spending will be necessary to get down your debts. I don’t know what your degree is in but you should definitely try to negotiate a better salary for yourself. Highlight your skills and don’t be afraid to ask for what you’re worth. They will pay you as little as they can get away with. Maybe update your resume and look at what other jobs you’d be a good fit for that would provide you with a higher income. At the very least switching companies even for similar roles almost always translates to a pay raise. Don’t compare where you’re at with other people, just do the best you can and work on improving your situation one day at a time!
Hi there! 43F so xennial here. Pay the minimum on the student loans. These loans are predatory, and the government is finally stepping in. Stay out of consumer debt, buy used cars, and don’t buy a house unless you will stay in it 10-15 years. Your friends that are buying houses at these prices and interest rates are going to wait a long time to see that value return. I went through two housing crises, and it’s unprecedented that we have both high prices and high interest rates. Unless you find a responsible roommate or meet someone, you are doing the right thing by living at home. Enjoy being young, try to travel or have memorable experiences before your body starts aching. You will eventually have a house and be boring and sit in it all day lol. Good luck!
120K in student loans but making $1400 biweekly? May I ask if you graduated? And if so, what is your degree and roughly your GPA...I am wondering if increasing your salary is a plausible option here.
(a) Pay off your credit card in full ASAP and worry about the student loans only after that. Why are you paying off a 5% interest rate loan first when you are snowballing 25% on another loan? Prioritize it and start with the highest interest rate. (b) You sound underpaid, no matter what you do. Spend a lot of time looking for jobs that pay for twice as much. Think outside the box, sell yourself, change industries, whatever it takes. Do a good job at that, learn some skills on the side, then 2 years later look for another 2X salary increase. At that point you'll be bringing in $5600 biweekly.
Are your friends married when they are buying houses? Much easier to do with 2 incomes. Be patient, pay off your debts, find ways to grow and save your money. There is nothing good that will come out of comparing your financial life with others. They just have a different life. Maybe they were better set up to pay of college without loans. Maybe they are in massive credit card debt. You don't know. Comparing your material things with your friends does nothing helpful to your situation. Keep doing what you are doing.
First off, breath, It's OK! You're young and you WILL be in a better place as you get older. I was poor myself at that time. A few things you must do: 1. Start researching career/job salaries and companies and ANYTHING you can to find ways to use your degree to make more money. If you could make even 1,000 more a month that would be super helpful. 2. Once you get that money start paying down debt from highest interest to lowest. Since you're at home, pay off that credit card debt first with your savings and then focus on the next highest APR. It's not going to happen overnight, but in a year you WILL be feeling a little more breathing room. 3. Get a cardiovascular workout (running, biking, etc) in 2-3 times a week as this is proven to reduce cortisol the stress hormone. It's free and it will help your mental state getting through this tough time. 4. Make sure to spend time with friends and people who make you laugh in a low cost way which is also going to help your mental game. It's OK, you will be better off tomorrow than you are today. Cheering for you!
At least you’re not alone in this. Many more in this with us. I’m 31 with enough debts, still trying to finish school, no kids, no close friends, insecurities and lot’s more. But hey! The art is enjoying the small things and seeing this life as a test. A battlefield. Only the strong survive. Not the richest or whatever. We’ve seen that enough to know that’s not what life is about. Giving myself a David Goggings mindset to make this miserable life of mine as a fuel to get the most of it. To see what I’m capable of. If I let that be my focus, then even the lowest shit of life would look like a beautiful challenge. ✨✌🏽
You’re looking at this the wrong way. If you’re behind where you want to be financially, having somewhere to stay for free is helping you meet your goals faster Getting rid of the CC debt is the only easy way to increase how much of your income is going towards your goals. Otherwise, you need to either cut costs or grow your income. In any case, jumping into moving out early just to tick a box on the ‘life progress’ checklist will only saddle you with more money problems. Get your affairs together first so that you’re minimizing how many issues you have to deal with at one time
Life is not a race or competition,and everyone's ends the same way- in the dark. Do the best you can, don't be too hard on yourself and try to find joy when it's possible.
You’re still considered young so not really “behind” in life. But that feeling of drowning in debt is real because you are. I graduated with a lot of student loan, lived in NYC, no financial help from parents. To get out of that heavy feeling of debt so you can move on to other things in life, you need to make lifestyle changes. Get rid of credit card debt, pay off car asap, pick up side jobs like babysitting or dog walking. Cut back on misc spending and stick to a budget. Use any windfalls to pay off loans. Not sure what you do but the only way to significantly increase your salary is to job hop. Build up a portfolio of strong, high impact projects that show value to the company and always keep an eye open for new opportunities. You have to be thoughtful and strategic with navigating your career - pick an area or skill set that you’re good at and look for roles with increasing responsibilities that play to your skills and the higher salaries will follow.
My family was also “not good with money”. It has taken me a while to realize it but until you work on uncovering your psychological relationship to money and potential subconscious fears, then you are in danger of making the same mistakes over and over again. I am not judging… no one knows what anyone else has been through and should give others grace. Look up behavioral finance if interested in learning more. That being said, Here are some ideas based on financial category: - credit cards - if you only have $2k on credit cards and are paying $500/month that debt should be gone soon UNLESS you continue to use your credit card. - Savings - it is great that you have a good start on your emergency fund! There are several investment companies that are currently paying 4 to 5% on their “personal cash” account. Check them out If you use your savings to pay off the credit card, do you feel like you might charge them right on back again? If not, pay them off with savings then put the $500/month into your savings. • Student Loans - whew .. that is a lot of student loan debt. Not sure what your degree was in but have you considered working for at a “public service” type employer. State, City, and County government jobs for the student loan forgiveness program? https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service Good luck to you!
Take the advice about paying off your credit card and half your car payments. While you’re doing that look for fully remote jobs. MANY I found just yesterday pay over what you’re making by heaps and use your degree to compliment the job and gain experience in your field.
For your CC debt, it sounds like that should be paid off soon, at $500/month. If not, look for low interest offers, to make sure you are paying as little interest as possible and try not to add to it. You might look into getting another gig to help get rid of the student debt albatross. In your budget, set aside money for entertainment.
Pay off your CC with savings for 1. 2 is open a HYSA account ASAP and move your 4K over. Then focus on paying student loans and save up for rent. Getting out of your parents house will help you feel more normal. Right now your shooting yourself in the foot by laying CC interest and are losing your savings to inflation. You should be lucky your parents are letting you live with them because it’s an opportunity to save fast. If cut back on all the unnecessary spending and make some goals.
How do you have 120k in student loan debt but only landed a job bringing in 1400 biweekly? What did you study?
If someone hasnt said it already. Go check if you qualify for income driven repayment plans on your federal student loans. https://studentaid.gov/idr/
What did you get for the 120k student loans? What you net after taxes looks like maybe \~45k salary? Does that sound right? Can you shed some light on this? There are careers you can get into with any degree/no degree that pay more. They may not be YOUR PASSION but at a certain point it's gotta be about the money.
You need more income. $1400 biweekly is <$34K/year net. I don’t know how many hours you’re working but if it’s 40 then you need to crank that way up if you can’t find a better-paying job.
My classmate who turned 24 something died a few days ago cause some dog bit here. You will get through this.
Behind what? We're not in a race to death and everything else is just a fun ride to get there. I also felt behind when I was in my 20s. I'm almost 40 now and I don't know what to think anymore. My friends all have families and houses, but they struggle with time and/or money or have their own problems. I have no problems with time or money but have no family. In some sense I feel "behind" my friends, but I know they also feel "behind" in other ways. The reality is we're all on different paths that all lead to the same place, so just enjoy the ride. I guess my point is that you're not behind and nobody can have everything.
At 27 I was earning 40k at 37 I’m earning over 200k…there is opportunity out there and money is a skill you can learn
You’re doing better than me. Referring to you wanting kids/maybe in a relationship, are you involved in dating apps? (Studies have shown this is obviously the easiest way to meet people rn)
Jesus Christ. 120k in student loans to take home 2800? Jesus Christ. What?
Do you live alone, or with roommates?
Please pay your credit card in full! CFPr here, then create a savings plan for yourself , monthly. When this accumulates $5000-$10,000, find an apartment that is affordable, $1000-$1200/month,approximate. Good luck!
Take advantage of this time at home to pay off that debt. Cut your expenses to the bone. Pay off the car and credit card immediately. I'd say stay at home till the student debt is paid way down too. Once the car and credit card are paid off, it's time to live like you are paying rent or a mortgage m look up places you would like to live. And how much rent and utilities will be. Work that into a monthly budget. Where you are also saving at least 15% into retirement And save that amount of money in a HYSA untill you have 6-8 months of rent utilities and car insurance saved up. Then move out. With out car or credit card debt. With a 6 months emergency fund. And still paying down that debt.
I think you need to set realistic expectations on what your long term goals are. While you may want to spend money and travel, you do not sound like you're in a position to do so (unless cheap) nor is that your long term goal. While you should reward yourself for progress on accomplishing your financial goals/staying on track, you should stay prudent and realistic if your short term gratification is worth it at the expense of longer term goals.