I am super stupid with my money and I'm trying to dig my way out. $120k in unsecured credit card debt. $182k income.
Someone suggested this be the sub for me. I'm likely going to get beat up for this and I deserve it. So many of you have been able to accomplish so much more with less.
I've been very fortunate in my career, and I've blown it by being absolutely ridiculously stupid with money. BoA gave me my first credit card at 16 years old, without my parent's approval when I was making $6.25 an hour. I already had a savings account at the bank which is why I think they gave it to me. Didn't take long to learn how to use it (the wrong way).
I now currently make $182k per year as a sole income provider for my family of 5. I have work expenses paid including a company car. Mortgage is $2,200 in Rural Texas. I have $120k in unsecured credit card debt.
It was at $180k in debt in 2021, so it's going the right direction, but the interest rates are absolutely burning me. Most are around 15-19%. AMEX is getting me at 27%! I have $240k in unsecured credit limits, so I'm about 50% utilization.
Income:
- 2017 $69k
- 2018 $100k
- 2019 $120k
- 2020 $120k
- 2021 $162,200
- 2022 $175,200
- 2023-current $182,200
- 2025 - going through a role change to $232k minimum.
It's obvious. I've been absolutely garbage at managing my finances since forever. I've left my credit cards on autopay and just kept using. It took 20 years to accumulate this much debt and I feel like an idiot constantly for it. Breaking down $120k over 20 years means I was overspending $500 a month in simple terms. That doesn't look like a lot and this was all avoidable.
When my wife was pregnant with our first kid, I gave up smoking, drinking, gambling, and lying. I'm ready to go the rest of the way and secure a financial future for my family if possible. I'm so done feeling stupid.
I'm open to any advice, ridicule, or guidance.
| Expense | Cost |
|---|---|
| Income | +$12,500 |
| Mortgage (incl. ins + tax) | -$2,200 |
| Min Monthly CC Payments | -$3,969.50 |
| Groceries, Household, Kids | -$1,800 |
| Wife's Car Payment | -$400 |
| Wife's Car Insurance | -$115 |
| Solar + Electricity | -$345.76 |
| Student Loan | -$87.03 |
| Water + Trash | -$70 |
| $2MM Life Insurance Policy | -$77 |
| Private School (last month) | -$614 |
| Roth IRA Monthly | -$500 |
| Kids Savings Account | -$200 |
| Subscriptions | -$100 |
| Semi-Fixed Expenses Total | ($10,478) |
| Remaining | +$2,022 |
Unaccounted semi-monthly expenses: Car/home repair & maintenance, A/C maintenance & septic maintenance. Dog food, doctor bills, urgent care bills, prescription medication. I need to try to look at all these expenses over the course of the year, but it may total up to almost $1,000 a month possibly.
I am able to put about an extra $1,000 to the credit card debt per month. My annual bonus ranges between $7,000 to $12,000 and that gets dumped right into credit cards. Tax return this year is $8,000 (last year of solar credits) which will also go to debt.
Pre-K Private School was a bad idea, but next month is the last payment and we're switching to home school.
Home was purchased in 2021 for $335k at 3% with 3% down. PMI is getting dropped early because the home value increased $110 per month.
I need to examine exactly how much of the minimum payment is going to interest and principal. But if it's like I've seen before, almost all of the minimum is going to interest. So if I'm only burning off around $19k a year, I might make it out in around 6 years or less if I change minimum payments to standard non-changing payments every month.
What options do I have to try to burn up this debt quicker? I'd like to avoid bankruptcy or burning up my credit (it's still good, never missed a payment). I'd like to get my utilization down under 30% before I start applying for loans.
Submitted April 02, 2024 at 10:31PM by First_Stage https://ift.tt/rZOPFG4
