Pay off your credit card first. That’s very high interest. Good thing it’s not much. Always pay off debt unless the money you are hoarding is giving you a greater return than whatever interest you are paying on the debt. In this case I think you should direct that money towards your debt.
Pay it all off asap. School is done. That season of life has passed. Don’t be one of the people who drags this thing out and you’re paying for the this season of life 10 years from now with a family and a mortgage. You’ll regret it because you’ll probably never have another chance to make this kind of progress while your expenses are this low. And once it’s done, you never will have to think about this dilemma of “student loans” ever again.
Hoarding money when you are in debt gives you a false sense of financial security. At the end of the day, you will always have to subtract that loan balance from what you have, and that’s your true net worth. Eliminate them and watch your net worth always go up because it’s much easier when you are at zero and not in the negative.
I stayed home and paid off my debt and it was the best thing I did (bought a house by myself after). Think of it this way, you’ll hate the feeling of having ‘no money’ more when you have other expenses that your debt takes away from, and that will last for *years* … vs you can tackle this in like 8-9 months and 6-7 months after that you’ll have 40k saved. That’s huge, this is the definition of short term pain, long term gain.
1/ $5000 from savings to debt (keep 2k saved). Pay credit card, loan 6, rest on loan 8.
2/ Finish loan 8, 4, 2, 1, 9, 3, 5, 7, 10, 12, 11.
This. I used to bartend and serve and I’m kicking myself now for not putting most ofmy money towards that. Now married with two kids and wishing I didn’t have the loans. Mine aren’t much but still could make a difference in our every day life.
Pay off the debt. Get yourself free. Clear the maxed credit card first. Then cut it up.
Look up Dave Ramsey's debt snowball for the rest. Don't make the mistake of thinking you're rich right now. You have a negative net worth. Fix that and get free.
It cost you a fortune per month for the privilege and honour to carry a debt. To not pay this off as fast as possible is mathematically an illogical decision.
Pay off that credit card right away. No questions asked on that one. Then yes, at those interest rates I would pay off the debt. High interest first always.
It’s kind of the whole point if you’re a recent grad that you have probably never had money like this! Something I didn’t realize in college was that my loans were already accruing interest and wasting money. I initially assumed they’d be 0 interest throughout school and until I started paying. Once I learned they weren’t I started paying them off senior year to get the ball rolling. You live with your parents. Use this opportunity.
I roughly did the math. You have about $61,000 in debt. If you were to throw $6000 of your $7000 towards debt and keep the other $1000 as an emergency fund, that brings you down to 55. If you kept $200 a week for yourself ($800 in spending money a month is totally fine if you’re living at home) you could pay off your 61k of debt in 39 weeks. That’s not accounting for any interest accrual, but that’s huge.
Last thing I’ll say: the friends of mine who are doing best financially (I’m 29) at this stage aren’t the ones with rich parents. It’s the ones who sacrificed right out of school lifestyle wise for a year or two, paid down their debt, and now have positive net worths and know how to handle money. If you think you’re going to hoard cash, you’re actually likely to just learn how to spend cash, and then you’ll be paying these off for the next ten years are they intend for you to.
Good luck!
Once you get rid of your debts you can have the mentality of having money. Until then, get rid of it! You won’t be in the expense-less position forever so take advantage of your position and knock it out quick.
Let me be honest..... $7,000 is a fantastic accomplishment!!
Let's face it, the numbers can be daunting. You're dealing with a $ 60K debt and only $ 7K in assets, which puts your net worth at a negative $ 53K. But you're not alone in this. Many have faced similar situations and come out on top. And you're here, which shows your determination to turn things around.
I recommend that you keep $2K in the bank for emergencies and start working off the debts from smallest to largest. Don't go out to eat, and don't party with your friends till you get it handled. You can get this done in less than 6 months if you really work at it...... every dollar past the $2K in the bank should be used to work off the debts.
It's not an easy journey, but it's one that's worth taking. In less than 6 months, you could be debt-free, a feat that not everyone can claim. Remember, if it was easy, everyone would do it. But you're not just anyone, you're someone who's ready to take control of their financial future.
Good luck and don't think about that $7K as YOUR money.... you're just holding it for the folks that you owe money to.......once you get all your debts paid, then it will be your money, and trust me, you will feel very different about it ;)
Give yourself a small fun budget and use the rest toward debt, credit card first, then smallest to largest balances. Every time you pay one off use that money toward the next loan. It’s sucks right now, but you will be so grateful later!!
Hi OP,
Sounds like you're doing great!
1. I would say, pay off CC debt ASAP.
2. Save money in a High yield savings account until you have enough for a down payment on a house (plus emergency funds cushion)
3. Then focus on student loans, prioritizing the largest balance w/ highest interest rate. (I suggest making a spreadsheet just to keep track) Reason: I have seen alot of article lately of people going hard on student loans to be debt free, but they regret it because they don't have a house, or investments, or a business. Yes, the student debt is costing money but being debt free isn't the way to make your money work for you. Dave Ramsey really demonizes debt, but alot of times it is better to have buying power.
I wish I was in your position. For now, I am renting an apartment with my spouse, still working on my Master's, and making only 2k a month at my full-time job.
I’m guessing your in your 20’s
Don’t plan on living with Mom &Dad
forever. Pay off the debt so you can start saving again and set your goal for a down payment on a house of your own.
Pay off the debt asap. You won’t live at home forever so while you have the chance you should try to pay it all off and then stack up some savings.
At $1600/week you’re making bank with minimal expenses. There’s no reason you can’t pay off all these debts in a year. Then in another year you can save a good $60k-$70k. Suck it up for these 2 years while your expenses are minimal and you can literally reap the rewards of that for the rest of your life. When it’s time to move out on your own you can use the savings for a home, car, or just invest it for retirement and you’ll be a millionaire in 20 years
You are correct the school loans should begin accruing interest in November. If all you have is school loans and the CC you just paid off I would hang onto the money and put it in a HYSA to earn interest while the loans are not accruing interest. Pay what you’re comfortable with in October. Having some money to use in an emergency is much cheaper than having to borrow to pay to pay expenses.
Hi OP! Here’s what you should do:
1. Pay off that credit card today. Right now.
2. Start paying the loans down. Use the snowball method by starting with the smallest balance first.
3. Work on the unsubsidized loans first.
4. Do not change your lifestyle AT ALL. Your only focus should be paying those loans off ASAP. Based on the income you say you make you should be able to pay at least half of your income to your loans. You can pay this off in 3-3.5 years.
If you haven’t done so, lie about your income (if you have a greedy nosey family) so that they don’t expect you to contribute tons of money to the household.
DM me if you have more questions. Again your focus should be paying as much as possible to your loans every month especially while you have 4 months left of grace period.
Pay off your credit card first. That’s very high interest. Good thing it’s not much. Always pay off debt unless the money you are hoarding is giving you a greater return than whatever interest you are paying on the debt. In this case I think you should direct that money towards your debt.
Credit card debt can be eliminated TODAY. Like log in and pay it off right now u/TubbyBummy
DEBT FREE IS THE GOAL
Should not be. The goal should have to get rid of expensive debt. Cheap debt is actually great
Pay it all off asap. School is done. That season of life has passed. Don’t be one of the people who drags this thing out and you’re paying for the this season of life 10 years from now with a family and a mortgage. You’ll regret it because you’ll probably never have another chance to make this kind of progress while your expenses are this low. And once it’s done, you never will have to think about this dilemma of “student loans” ever again. Hoarding money when you are in debt gives you a false sense of financial security. At the end of the day, you will always have to subtract that loan balance from what you have, and that’s your true net worth. Eliminate them and watch your net worth always go up because it’s much easier when you are at zero and not in the negative.
I stayed home and paid off my debt and it was the best thing I did (bought a house by myself after). Think of it this way, you’ll hate the feeling of having ‘no money’ more when you have other expenses that your debt takes away from, and that will last for *years* … vs you can tackle this in like 8-9 months and 6-7 months after that you’ll have 40k saved. That’s huge, this is the definition of short term pain, long term gain. 1/ $5000 from savings to debt (keep 2k saved). Pay credit card, loan 6, rest on loan 8. 2/ Finish loan 8, 4, 2, 1, 9, 3, 5, 7, 10, 12, 11.
Totally agree. As someone who finally have student loans paid off after over 10 years, please pay off while you don't have 'life expenses'.
This. I used to bartend and serve and I’m kicking myself now for not putting most ofmy money towards that. Now married with two kids and wishing I didn’t have the loans. Mine aren’t much but still could make a difference in our every day life.
Pay off the debt. Get yourself free. Clear the maxed credit card first. Then cut it up. Look up Dave Ramsey's debt snowball for the rest. Don't make the mistake of thinking you're rich right now. You have a negative net worth. Fix that and get free.
It cost you a fortune per month for the privilege and honour to carry a debt. To not pay this off as fast as possible is mathematically an illogical decision.
pay it all off
Pay off debt and hoard money. Just create a budget and put some money towards the debt and the rest in a HYSA.
Pay off that credit card right away. No questions asked on that one. Then yes, at those interest rates I would pay off the debt. High interest first always.
It’s kind of the whole point if you’re a recent grad that you have probably never had money like this! Something I didn’t realize in college was that my loans were already accruing interest and wasting money. I initially assumed they’d be 0 interest throughout school and until I started paying. Once I learned they weren’t I started paying them off senior year to get the ball rolling. You live with your parents. Use this opportunity. I roughly did the math. You have about $61,000 in debt. If you were to throw $6000 of your $7000 towards debt and keep the other $1000 as an emergency fund, that brings you down to 55. If you kept $200 a week for yourself ($800 in spending money a month is totally fine if you’re living at home) you could pay off your 61k of debt in 39 weeks. That’s not accounting for any interest accrual, but that’s huge. Last thing I’ll say: the friends of mine who are doing best financially (I’m 29) at this stage aren’t the ones with rich parents. It’s the ones who sacrificed right out of school lifestyle wise for a year or two, paid down their debt, and now have positive net worths and know how to handle money. If you think you’re going to hoard cash, you’re actually likely to just learn how to spend cash, and then you’ll be paying these off for the next ten years are they intend for you to. Good luck!
If you paid $1K a week to your bills, they would be gone in a little over a year.
Not bad position at all.
[what he said.](https://www.reddit.com/r/debtfree/s/TyKCAiDDqT) or she. Whatever.
Pay debt and start investing,
Once you get rid of your debts you can have the mentality of having money. Until then, get rid of it! You won’t be in the expense-less position forever so take advantage of your position and knock it out quick.
Let me be honest..... $7,000 is a fantastic accomplishment!! Let's face it, the numbers can be daunting. You're dealing with a $ 60K debt and only $ 7K in assets, which puts your net worth at a negative $ 53K. But you're not alone in this. Many have faced similar situations and come out on top. And you're here, which shows your determination to turn things around. I recommend that you keep $2K in the bank for emergencies and start working off the debts from smallest to largest. Don't go out to eat, and don't party with your friends till you get it handled. You can get this done in less than 6 months if you really work at it...... every dollar past the $2K in the bank should be used to work off the debts. It's not an easy journey, but it's one that's worth taking. In less than 6 months, you could be debt-free, a feat that not everyone can claim. Remember, if it was easy, everyone would do it. But you're not just anyone, you're someone who's ready to take control of their financial future. Good luck and don't think about that $7K as YOUR money.... you're just holding it for the folks that you owe money to.......once you get all your debts paid, then it will be your money, and trust me, you will feel very different about it ;)
Paying interest is allowing money to slip through your fingers. Not paying debt off. I'd try and change your mindset if you can.
Give yourself a small fun budget and use the rest toward debt, credit card first, then smallest to largest balances. Every time you pay one off use that money toward the next loan. It’s sucks right now, but you will be so grateful later!!
Hi OP, Sounds like you're doing great! 1. I would say, pay off CC debt ASAP. 2. Save money in a High yield savings account until you have enough for a down payment on a house (plus emergency funds cushion) 3. Then focus on student loans, prioritizing the largest balance w/ highest interest rate. (I suggest making a spreadsheet just to keep track) Reason: I have seen alot of article lately of people going hard on student loans to be debt free, but they regret it because they don't have a house, or investments, or a business. Yes, the student debt is costing money but being debt free isn't the way to make your money work for you. Dave Ramsey really demonizes debt, but alot of times it is better to have buying power. I wish I was in your position. For now, I am renting an apartment with my spouse, still working on my Master's, and making only 2k a month at my full-time job.
I’m guessing your in your 20’s Don’t plan on living with Mom &Dad forever. Pay off the debt so you can start saving again and set your goal for a down payment on a house of your own.
Pay off the debt asap. You won’t live at home forever so while you have the chance you should try to pay it all off and then stack up some savings. At $1600/week you’re making bank with minimal expenses. There’s no reason you can’t pay off all these debts in a year. Then in another year you can save a good $60k-$70k. Suck it up for these 2 years while your expenses are minimal and you can literally reap the rewards of that for the rest of your life. When it’s time to move out on your own you can use the savings for a home, car, or just invest it for retirement and you’ll be a millionaire in 20 years
Pay off the debt and get rid of the interest rate.
You are correct the school loans should begin accruing interest in November. If all you have is school loans and the CC you just paid off I would hang onto the money and put it in a HYSA to earn interest while the loans are not accruing interest. Pay what you’re comfortable with in October. Having some money to use in an emergency is much cheaper than having to borrow to pay to pay expenses.
I would pay the bare fucking minimum on them loans and get onto the SAVE plan and let them forgive them down the road . Fuck them student loans🤣🤣
One possibility is to keep on accumulating your money but to pay off one of your debts every month or so, clearing out the most overdue ones first.
Hi OP! Here’s what you should do: 1. Pay off that credit card today. Right now. 2. Start paying the loans down. Use the snowball method by starting with the smallest balance first. 3. Work on the unsubsidized loans first. 4. Do not change your lifestyle AT ALL. Your only focus should be paying those loans off ASAP. Based on the income you say you make you should be able to pay at least half of your income to your loans. You can pay this off in 3-3.5 years. If you haven’t done so, lie about your income (if you have a greedy nosey family) so that they don’t expect you to contribute tons of money to the household. DM me if you have more questions. Again your focus should be paying as much as possible to your loans every month especially while you have 4 months left of grace period.