Author Topic: Mountain of debt, low income  (Read 4162 times)


  • 5 O'Clock Shadow
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Mountain of debt, low income
« on: August 31, 2016, 04:51:39 PM »
Hi all, this is my first post and I would greatly appreciate any advice. Believe me I've been face punching myself quite a bit over my own stupidity.

Net $1,760 per month

Car Ins:$67
Personal (haircuts/cosmetics):$21.00

Savings:$25 (account balance ~$800)
Roth:$50 (account balance ~$10,000)
Voluntary Additional Contributions maxed at 10% of net:$196

« Last Edit: February 14, 2020, 02:07:15 PM by RayO »


  • Pencil Stache
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Re: Mountain of debt, low income
« Reply #1 on: August 31, 2016, 05:00:09 PM »
Unfortunately there's no magic bullet. It'll take you 3 years to pay it off as i assume some fee is charged every time you balance transfer.

The only thing you can do is make more money. How much do you work? 40 hours a week? If so, pick up a side job. Go sack groceries.

What kind of car do you have that makes you spend $125 on gas a month? That's insane. If it's because you live far from work, I guess that's OK because you're not paying rent.

I would recommend against funding that ROTH and put it all towards the CC. You've got a great situation right now, but that could promptly end, whether that be the rent or the ability to keep transferring the CC balance. I think you can rest assured knowing that you at least have a pension down the road.

Probably not the "best" end game advice, but you should consider paying off the CC with the $7,700 balance as a "small victory." This too has its downsides. What's the monthly payment on it?
« Last Edit: August 31, 2016, 05:02:07 PM by JJsfr »


  • Pencil Stache
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Re: Mountain of debt, low income
« Reply #2 on: August 31, 2016, 06:18:08 PM »
While many favor paying down the highest interest card first, I would argue that the "debt snowball" approach would be better for your mindset - paying off the smallest card balance first, then rolling that payment into the next biggest card balance, etc.  The psychological satisfaction of paying off a card balance would be a good motivator for you.

Also I'm not sure why your net is so much lower than your gross income?  Looks like a $13k difference roughly.  Surely you are not paying $13k in taxes? Are you over-withheld?

I would stop putting money into your ROTH until you get your credit card emergency paid off.  I WOULD put that extra $50 a month into your savings account, along with those two extra paychecks per year, so that you have enough cash savings to handle that next dental emergency or car repair bill.   (Some would suggest you put all that towards the credit cards, and just use the cards to pay for an emergency, but again, I think for your mindset it would be better to have savings to pay for the unexpected so that you don't feel like you are falling backwards in your credit card debt reduction.)

Re:  side gigs - what about babysitting or pet sitting?  Selling crafts that you enjoy making?  Reselling books?  You don't need much, just a side hustle that brings in $100-200 a month would be $1200-2400 more a year.

I know it feels daunting, but three years from now you will feel so fantastic when that debt is paid off.  Stay focused.  It will totally be worth it.


  • Bristles
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Re: Mountain of debt, low income
« Reply #3 on: August 31, 2016, 06:22:46 PM »
Anything you can sell?  If youve got anything left from your former spendy days, now is the time to get rid of it.

What about hobbies you can make money doing? For instance, If you are athletic you could work part time as a trainer.  Be creative, work can be fun.

I agree with holding off on the Roth right now and putting that towards debt at least until you've paid it down a quite a bit more.  Then why not do a traditional IRA when you start contributing again?  Then it will reduce your taxes freeing up more money.

$25 for gifts? Can you skip that?  Maybe let friends and family know that you love them but need to focus on getting out of debt.


  • Magnum Stache
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Re: Mountain of debt, low income
« Reply #4 on: August 31, 2016, 06:41:35 PM »
Yes a side job might be draining, but consider a couple things:

What might NOT be stressful, or could be combined with stuff you already do?  Like, would babysitting a couple kids on a Friday or Saturday evening , where you eat dinner with them, play, and put them to bed, be stressful?  Or could you find something that is "fun" and is just one weekend morning or afternoon? for example around here farmers market vendors are often looking for extra help at the Saturday morning markets, 8 am to noon, boom, done for the weekend and pretty fun.  Or what about a super part time retail job that you could go straight to after work, just pack a dinner and work it twice a week, for example?  This might be a great holiday season option that wouldn't require a long term commitment to extra work.

How long have you been in your job?  Long enough that you can start applying for other higher paying jobs?  If its been 3 to 5 years, start checking out other options closer to home- less because of your gas cost, more because you will wear your car out much more slowly, and give yourself hours back in your day.


  • Pencil Stache
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Re: Mountain of debt, low income
« Reply #5 on: August 31, 2016, 06:44:00 PM »
I read a blog by a guy who had huge amounts of debt from going to business school.  He decided to kill the debt within a year and basically sprinted like crazy to do it.  He positioned himself for a promotion/raise at work, sold off all his extra stuff, got roommates, tried various side-gigs, started his own landscaping business, etc. 

He sometimes comes off as a bit of a "bro," and it might not all be relevant to your situation, but you might find some inspiration here!

Maybe it helps to think of it as an adventure.  Trying strange jobs, dramatically altering your life in odd ways -- just until the debt is dead.

Anyway, good luck!


  • Guest
Re: Mountain of debt, low income
« Reply #6 on: January 29, 2018, 05:24:05 PM »
Just wanted to say great job! Once the rest of the debt is gone, you will feel a huge weight lifted from your shoulders.


  • Pencil Stache
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Re: Mountain of debt, low income
« Reply #7 on: January 29, 2018, 06:49:35 PM »


  • 5 O'Clock Shadow
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Re: Mountain of debt, low income
« Reply #8 on: January 29, 2018, 06:51:26 PM »
Well done!
That's significant progress.


  • Walrus Stache
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Re: Mountain of debt, low income
« Reply #9 on: January 29, 2018, 07:18:06 PM »
That's a great story!!  Thanks for sharing!  :)

And good luck killing the rest of the debt!


  • Magnum Stache
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Re: Mountain of debt, low income
« Reply #10 on: January 29, 2018, 07:50:26 PM »
This is a really exciting post to read.  Congratulations!


  • Magnum Stache
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Re: Mountain of debt, low income
« Reply #11 on: January 29, 2018, 09:40:30 PM »
Good work cutting down the debt. Realizing what is driving your excess spending is the most important step to cutting it down; once you realize how much is unnecessary it becomes much easier to stick to only essential supplies.

Your Roth IRA contributions (not gains) can be withdrawn penalty-free to help pay off the remaining high-interest credit card debt, if any is left. Keep any gains in the account, and contribute again to it once your credit card debt is gone.

A lot of people have found switching to cash only for purchases helps reduce impulse buying (lot harder to fork over 10 $50 bills than a credit card).