Hi r/personalfinance , I've been a reddit lurker for a long time & made this account to post here.
I'm a young (mid 20s) college student. To preface I want to say growing up I was never taught anything about personal finance or responsibility with money. As such I owe roughly $10k split between 4 companies (2 credit cards, vehicle, insurance), this obviously doesn't include student loans. I don't own the vehicle anymore (after 6 months I lost my job & couldn't afford to pay $350/month payments) but still owe money on it. Being young & dumb I panicked and just completely stopped paying my debts because my logic at the time was "I can't afford it, why try anyways?" It's been about 3 years since I last made any sort of payment on any of my debts. My credit is totally shot & I don't qualify for any loans whatsoever which as you can imagine makes things difficult for school. So now I am trying to fix my debts and credit so I can qualify for loans and go to a better school.
Right now for work all I do is work study on my university's campus. It's the only job available to me as the college I go to is in a very small town with a very limited number of off-campus jobs. I also don't have a vehicle so even if an off-campus job was available it would be very difficult to get to. My earnings from my job are measly at best ($100 every 2 weeks if I'm lucky) but I'm receiving a large refund (approx $5600) from my school next semester. After paying what I owe to my school I will have roughly $3,500 left over, but I'm not sure what to do with it. My thoughts right now are:
a) pay off larger outstanding debts. Specifically, I owe ~$3000 to Company A, <$1000 to Company B, $3,600 to Car Company and ~$1,000 to Insurance Company. I know Company A is the biggest debt and they have actually tried to serve me before but I move around frequently and they were never able to.
b) buy a car. This doesn't seem as reasonable because if I was going to buy a car I would want to pay off at least a year's worth of insurance instead of doing it month-to-month and I doubt $3500 would let me get a car and insurance.
c) save it. Obviously this seems most practical because then I can have a great emergency fund, or money to pay for my medical bills, etc and I can try to add to it.
Honestly option A seems most practical and best for my credit but I really don't know how to go about paying off these debts. It's been so long since I've been in contact with said companies I feel weird calling them out of the blue and offering money. And then I would essentially be back at square one, broke with no savings but at least I'd have a better credit?
Any advice would be really really appreciated. I'd like to get myself out of this mess so I can get my life and finances sorted and have a better future. Thanks.
Submitted November 04, 2017 at 09:32AM by wckk9595 http://ift.tt/2zwVaEE
