$92k hole and I'm only 21

**Sian** · 03-14-2016, 12:56 AM

It might be a hole, but we know how to help you out!

So from what I understand your payments total $3,200/month NOT counting food. I normally eat $200/month on food and I'm single. You may have to eat ramen, rice and beans for a while but you CAN do this.

First you need to figure out what you average on food and probably start couponing to get that to even less.

So your first priority is just paying everything, then work on paying down.

I would suggest contacting the student loan people and asking to see if you qualify for hardship payments. That can delay your payments at $0 for a while or make them even lower.

As for the cars, is there a way that you can take the bus sometimes instead of driving the cars all the time? That can cut down on gas.

Is there anything that you own that you don't need? A small garage sell may help. Such as, if you have 2 televisions then I would suggest that you sell one, etc. Or if you have a lot of book that you don't read then I'd suggest you sell those.

If you have cable I'd suggest that you deactivate that. I only have internet and use Netflix and Hulu to keep myself entertained which works out fine. I also rent movies from my local library which means $0. You can also rent games from there if you play those as well. If you have video games that you don't play anymore then sell them to a store. You may only get $5 but that's $5 that you didn't have before.

Shop around for car insurance to be sure that you are getting a good rate but be mindful that they do credit checks so you may have to stay with $300/month.

Make sure that you stop your magazine subscriptions if you have any.

As for a part time job, I did that until I couldn't handle the stress. So I started selling plasma. You can do it twice a week and can make about $200 extra a month depending on the clinic. (That's grocery money right there!)

Once you get to a point that you can make payments on everything then you're at stage 2.

Stage 2 is deciding what to pay down first and emergency fund. There are different scenarios: a) highest interest rate, b) lowest interest rate, c) highest payment, d)lowest payment, e) highest amount owed, f) lowest amount owed.

You are going to SNOWBALL your payments. example: item 1-$500 tv at $100 payment, item 2-$1000 sofa at $225 payment, item 3-$5000 credit card at $100 payment. Pay off the TV with regular payments, once paid off take that same $100 and apply it to the sofa. Your payments are then $325. when that is paid off, take the $325 and add it to the credit card payment making it $425. It's the same amount of money that was used to make payments but now you're paying it faster.

In your case I believe that you should do a combination. First I'd do the lowest amount owed for at least 2 items not matter what they're interest rate is. Then I'd save those payments into a savings account until I had $1,000 in my emergency fund.

After that I'd take those payments and start paying off the next thing on my list. In your case you will probably do the cars last since it sounds like it has the highest amount owed.

Keep us informed on your situation. We are more than happy to help. I had to do this scenario but I was luckily able to take a part time job as a independent contractor and able to set my own hours.

**disneysteve** · 03-14-2016, 05:28 AM

Originally posted by carkingkm View Post

I work on commission. I had a hard time budgeting with this new job

racked up 17k of credit card debt across 10 cards and 60k in car loans because I decided to buy two brand new cars.

I cannot believe I did this to myself.

The huge part that is killing me are the cars.

the banks don't want to risk me with the loan. I have a collections account I was paying $900/mo on for school tuition I couldn't pay, and I got the balance down to only $800 before I stopped paying. I have three other student loans I pay faithfully.

I spend $500 a month on rent and utilities, $1000 a month on the dot for car payments, $300 a month on car insurance, $250 a month on student loans, $500 a month on gas, and my credit card payments fluctuate but they're usually about $650. And then of course, food.

Any suggestions?

Welcome.

Let me first say that I am a huge believer in personal responsibility, but I would say that you didn't get into this mess all on your own. There were some outrageously predatory lenders involved in the process. The fact that you got approved for all of that debt, especially the 2nd of the two car loans, is a disgrace and there need to be laws against that nonsense. You probably couldn't afford the first car and you absolutely couldn't afford the second.

As you've hinted at, the best solution would be to sell the cars and replace them with one cheap car, rolling the negative equity into a new loan. The problem is that nobody will make you that loan now due to your credit score. I would still focus on this angle. Find one of those used car lots that advertises, "We finance everyone". If you could roll over that 16K in negative equity and buy a $5,000 used car, that would reduce your debt from 60K to 21K. Even if the interest rate is a lot higher (which it will be I'm sure), you'll still be better off.

You say the credit card payments fluctuate. Is that because you are still making new charges? If so, you need to stop immediately! If you don't have the cash, don't buy it, whatever "it" is. No more debt. No more credit.

I would recommend getting a copy of The Total Money Makeover by Dave Ramsey. That will teach you how to better manage your money. There are worksheets in there specifically for people with irregular incomes. It will also teach you how to attack your debt. There is an in-person class that goes along with that called Financial Peace University. If you can find a series in your area, it might be worth signing up.

**Jluke** · 03-14-2016, 09:08 AM

are you able to do a private sale for one of the vehicles where it will work to your advantage?

have you bought anything recently that you can return? or sell?

at this point in time you need to start living like you are a poor person.

track every dollar spent (budget). there are plenty of products/online sites that can do this or you can use an excel spreadsheet or just plain old paper. I use excel but have seen others mention "You Need a Budget", Mint, etc.

How much is your cell phone plan? You can get plans for as little as 30/mo or less.

Cable? cancel it.
Netflix? cancel it.
see where this is going?

The more details you provide, the more help you will get.

**dczech09** · 03-14-2016, 04:17 PM

I second checking out Dave Ramsey's Total Money Makeover and utilizing his worksheets on budgeting with an irregular income. If his worksheets do not work, try customizing them to a format that you like. The key is that you still need to get onto a zero-based budget even though your income is erratic. Actually, the fact that your income is variable is even more reason to get on a balanced budget.

I would suggest selling your cars. If not both of them, sell at least one of them. Sign a note for the difference in what you owe after the sale. The key is that selling your cars and getting less expensive cars will reduce your payment. Your car payments are killing you. No joke.

Aside from that, you first need to stop borrowing on your credit card. Put your credit card(s) in a ziplock baggy, put it in a container of water, and freeze it. Or just cut them up. You need to stop using them. If you do not stop the bleeding, you will never get ahead.

After that, you need to get caught up. Make sure you are current on ALL payments. Including that collection account. That should be your first priority. A collection account of less than $1,000 should be easy to clean up with a $60,000 per year income.

Then, get on a plan to pay off your debts. The student loans, the credit cards, and the remaining car debt... it all needs to go! After selling the cars and reducing your debt significantly, this should be much easier to do.

You have almost $2,000 per month going towards debt. That is 40%of your gross income, which is unsustainable. It is no wonder that you cannot get ahead. And $1,000 of that is from the car loans. If you adjust that and free-up even $500 per month, you will be able to make some headway.

**Sian** · 03-15-2016, 05:11 AM

I forgot to mention!

Go to youtube and look up budget binder. There are LOTS of people that are trying to reduce their debt and have made various binders to help with that that have helped to reduce their debt.

**Jovanny** · 03-18-2016, 01:54 AM

I think you should prioritize your needs and pay the debt accordingly.

**Permanent Temp** · 03-18-2016, 11:29 AM

Bummer things have changed since your last post: http://www.savingadvice.com/forums/p...ewbie-kid.html

Maybe you just need to sit down and list everything down. I used a spreadsheet to help me figure how long it would take to pay off certain debts by interest rate and it was instrumental to getting as far as I have.

I was a temp for most of those years. I just decided to live below my means and pay off as much debt as possible when I was employed.

You do need to do something about food. Do you know how to cook? I would suggest that right away you switch coffee or liquor/beer and start drinking that at home as it is a lot cheaper. I know several people who switched coffee from out to home and saved thousands a year.

At least you recognized where you are at before it became really bad. Try mint maybe. I used it at first to track how much I was spending for a few months and it was a total eye-opener. Really helped me buckle down in spending.

**FrankFacts** · 03-28-2016, 08:00 AM

I think you should start by looking on the bright side of things, before getting too down on yourself. This isn't specific debt repayment advice necessary, but just some thoughts. The good things in your life:

- you're 21 and making $60K/year
- I'm assuming (and this could be wrong) that since you're 21 and working full-time you haven't finished college, but are nonetheless making more than many college graduates
- you're non-debt expenses seem relatively low -- $500 per month in rent and utilities isn't bad at all
- and most importantly: TIME is on your side. You're young. Pay this off and start over. If you were 10 or 20 years older, "starting over" wouldn't be as much of an option. It's still very much an option for you.

Good luck!

$92k hole and I'm only 21