Hello r/personalfinance. I am a recently divorced guy in his 30s that is absolutely sick and tired of being stuck in the rut of overwhelming debt that I seem to be caught in. My ex was not a very responsible spender, and I was the only source of income while she sat at home doing nothing, and it never seemed to be enough. Pair that with several other life factors, and I find myself in a cycle of debt that I cannot seem to escape. I am getting a fairly sizable bonus from my employment at the end of January, and my plan is to use that money to start digging myself out of the hole I’m in, but I’m not entirely sure where to start. I will start with a detailed summary of the debt:
Credit Cards - I have a total of 4 that are carrying balances, two of them quite large:
1 - $10,900 balance. I am most concerned about this card, because there are several balance transfers that I used to shift some debt around to lower interest rates as I’ve slowly paid down this card. Once these rates expire, the interest will be absurd. Original transfer amounts and expiration dates are as follows:
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$6,025 – 3% interest expiring on 6/23/17
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$1850 – 3% interest expiring on 7/23/17
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$2700 – 5.99% interest expiring on 2/23/18
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$637 – 7.99% interest expiring on 1/23/18
2 - $4,700 balance. This card is locked in at a permanent 6% interest rate, so my thought was to pay this down first so that I can transfer some from the larger card as those balance transfer promos expire
3 - $1,030 balance with 0% interest until Dec 2017
4 - $2,400 balance
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$1,200 with 0% interest until Dec 2017
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$1,200 with 0% interest until June 2019
Student Loans - $33,000, with a minimum monthly payment of $320. There are two consolidated loans, one with $12,000 and one with $21,000, and the consolidated interest rate is 6% from when I consolidated the loans a decade ago. I deferred the loans for several years due to financial difficulties, so interest accumulated… I’m finally paying into principle, but the payoff date will not be until 2029 if paying the minimum throughout.
Now that that ugliness is out of the way, here are other relevant details.
Take-home pay in 2017 will be approximately $3950 per month. I may move positions or companies at some point this year, which could increase that numbers, but no guarantees of that.
My monthly fixed expenses are as follows:
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$1165 – apartment rent and water
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$100 – cellphone
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$30 – gym membership
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$400 – car payment
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$160 – car insurance
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$400 – child support
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$320 – student loan
My variable expenses are as follows. Estimates below:
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Electricity - $80 - $120 per month
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Gasoline – Approx $120 per month
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Groceries and toiletries – I try to go cheap here, but around $300 - $400 a month
Breaking it out like that, That leaves me with approximately $700 remaining, which is being sunk into credit cards… then I’m short on other things, such as if I want to take my girlfriend out or get some new clothes, so back on the credit card it goes. I need this cycle to stop and need a plan that will get me out of debt within my current means. I don’t really care how long it takes, as long as I’m making progress toward financial maturity and can start accumulating some savings beyond just my 401K and company equity. Not having an emergency fund has bit me in the ass in the past, and I want to change that.
So where do I start? I estimate that I will have between $6 – $7K to devote to paying off debt at the end of this month. I know that isn’t much compared to the amount of debt I currently have, but it’s a start right? My biggest concern is the card with the large balance that has expiring promo rates, so I’m all ears as to how to best attack this debt to lessen my risk and expedite paying it off.
Submitted January 04, 2017 at 11:01AM by plzhelpmydebt http://ift.tt/2j9HdVa
