Author Topic: Could use some advice on starting my journey. Debt.  (Read 611 times)

CapAccountant10

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Could use some advice on starting my journey. Debt.
« on: September 23, 2018, 10:32:40 PM »
Hey everyone,

First post here. I'm 30 yrs. old and currently make $70k in the PNW. I've neglected my finances for a long time and recently came to the realization that if I don't correct my behavior now I'm not going to have the future I want. I've got credit card debt and car debt and I just don't know what the best first steps to take would be. Was really hoping you guys could help me think this through. Here are some facts but please let me know if you need more info.

Credit Card Debt: $8,000 @ 0% APR until May 2018, then 15% after that.
Car Debt: $18,000 @ 3.44%. Car is worth $17,000 for a private sale.

I usually have $1,000 of discretionary income available at the end of each month that I somehow squander (food!).

My company provides a 401(k) plan with a 5% match that I will be eligible for in 2 months. Also I expect my $70k salary to increase 10% per year, and I sometimes have $3-5k bonuses that aren't factored into that amount.

I currently have no retirement and no savings. Fuck.

What should I do? Should I sell my car? I actually ride the bus to work and can walk to the bus stop from my apartment, but I'm moving in with my girlfriend soon and will need a car to drive to the park and ride to take the bus from there. Also would like one for weekend trips here in the PNW. FYI I don't expect my overhead to change much when I move in with my GF as I'd be going from a 1bdr to a 2bdr and it's awfully expensive where I'm located.

How would you guys approach this? Again, please let me know if any additional details would be helpful. I just want to get off on the right foot and I'm motivated to change.

Thanks


Villanelle

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Re: Could use some advice on starting my journey. Debt.
« Reply #1 on: September 23, 2018, 10:40:10 PM »
I would first and foremost commit to writing down every penny I spent, and sticking within a pretty stringent budget.  Without details, it's hard to know what to cute.  Clearly you need to "find" that $1000 and recapture 95% of it.  But I but you can also cut your cable, cut your groceries, cancel Netflix, and more.  These need only be temporary cuts, so let the carrot at the end of the stick be that once your can and CC debt is paid off, you can take back 25% of the cuts you made. 

I assume you mean that your CC is at 0% until May 2019. 

As for the car, frankly, you can't afford weekend trips in the PNW (or anywhere).  You are broke.  Broke people don't gt to go on vacation until the un-broke themselves.  You say you are motivated to change.  Well, this is something you need to change then.  Time to put your money where your mouth is. 

As for the car, you say you will "need" one when you move.  Is that an actual "need" or an "it will be tough without it"?  If it's an actual need, my first thought would be to not move in with your GF, or to move in with her only if you find a place that allows you to be carless.  If you are moving further away, that is also going to increase your gas and operating costs.


CapAccountant10

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Re: Could use some advice on starting my journey. Debt.
« Reply #2 on: September 23, 2018, 11:14:05 PM »
I appreciate the reply, Villanelle! Would it be helpful if I posted my budget here? Then maybe it would be easier to identify what I need to cut down on or eliminate.

And yes you are right, CC is 0% until 2019 - typo.

As far as the car goes I honestly didn't even consider selling it and not buying another one. It isn't a need, merely would be an inconvenience without one. But now that I really think about that, I could probably survive without a car. But man if I cut the monthly car payment at $403, insurance at $140, and gas at $60 that's a lot of money to free up for something that I actually don't use all that often. I guess I just have a fear of being without one, but if it truly doesn't work out I could always buy a beater.

Freedomin5

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Re: Could use some advice on starting my journey. Debt.
« Reply #3 on: September 24, 2018, 12:46:29 AM »
Donít just post your budget. Post a full case study and we can help pick everything apart. There may be other areas that you are currently not optimizing.

If I were you Iíd totally sell the car. Could you bike to the bus stop, if you were to move in with your gf? Also, could you move into a one bedroom? Or could you move into a two bedroom and rent out the extra bedroom to a roommate?

Youíre going to have to come up with $8000 in around 8 months - thatís $1000/month for the next eight months that you will need to save up. And I would rather live on rice and beans for the next eight months than be dinged with a 15% interest rate!

And from now on, every time you get a bonus, it should be earmarked to build up your emergency savings, and then invested following the Investment Order listed in this forum.