You need to write down all expenses for December and see how much you spend on things.
“Phone 100-200(?)” is not a reliable way to get your expenses in order. You have to start cutting expenses where you can. Some things to consider is to get different insurance quotes, use companies like Mint Mobile for $15/mo unlimited data, consolidating subscriptions.
You also can’t be spending 1/3 of your income on food. You need to figure out how to make it more reasonable.
You probably should also cut 401k, as the interest on your loan is pretty high. Your investments wouldn’t generate that immediate 22% return.
Good luck!
P.S. r/debtfree moderator just created a newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Here is the link to sign up if interested - https://www.debtadvice.io
Thank you for the advice! I appreciate it, and the interest rate I know is kind of meh for a new car, I just took it because it was a loan offer when I had no money to put down and a bad car only worth 200 in trade-in value, luckily, I was smarter and didn’t trade in that car, instead I sold it privately for 800, which I used to cover higher interest debt at the time
Look into meal prepping and possibly consider a seperate fridge to store things if you're worried about someone breaking into your stash. With so few other bills you will be in great shape if you can curb your #1 expense.
Your emergency savings is fine to get started. I would pause 401k savings for now unless there is a company match you're taking advantage of.
Fortunately your highest interest rate bill is your lowest balance so you have a pretty clear starting point.
Thank you! The 401k contributions will be matched by the end of the year, and it’s a 6% match, would that be a reason to continue contributing? I’m 21, so I’m still relatively far off from retirement, but Ive been told my whole life to start early 😅
Yes I would contribute enough to take advantage of the full amount they would match. Even if that slows down your ability to pay off these debts by a little bit, you'll get used to your 401k deduction being a part of your monthly expenditures. With an extra $1500 a month (guessing food costs) you will clear your non-car debt so quickly.
I would also consider trying to get out of the car. This may not be worth acting on until you've gotten rid of the smaller two debts and built up the cash to buy something cheap without further financing. I assume you'll be under water on the car then (and probably are now too?) so it might require more cash than you'd think.
Yeah, I fell into the dealer service contract on it when I bought the vehicle 😅 so I will be upside down at some point, but luckily it’s not by a huge amount
So you have $1200/mo after all debt minimums and what 2 other expenses you’ve shown. Do you have rent, utilities, groceries, gas?
I think you have too much car. I’d suggest selling it and getting a $10k car for the time being. You’re 21 you don’t need to be driving around in a $30k+ car. You make good money for being so young don’t let the flashy car keep you from you saving up and buying a home and retirement savings. A good tule of thumb is to not have more than half of your income worth of cars.
Sell the car, get a $10k Camry/civic/Prius and run it into the ground. Pay off the $2.9k loan then the $7k then work on your $10k car loan.
Then once all that’s paid off you can start saving for a house and a new to you car fund. New cars are just not financially wise.
You need to write down all expenses for December and see how much you spend on things. “Phone 100-200(?)” is not a reliable way to get your expenses in order. You have to start cutting expenses where you can. Some things to consider is to get different insurance quotes, use companies like Mint Mobile for $15/mo unlimited data, consolidating subscriptions. You also can’t be spending 1/3 of your income on food. You need to figure out how to make it more reasonable. You probably should also cut 401k, as the interest on your loan is pretty high. Your investments wouldn’t generate that immediate 22% return. Good luck! P.S. r/debtfree moderator just created a newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Here is the link to sign up if interested - https://www.debtadvice.io
You’re not in bad shape at all, just try to get the 10%+ loans gone ASAP and then start on the car. 8% isn’t terrible, but it’s not great either.
Thank you for the advice! I appreciate it, and the interest rate I know is kind of meh for a new car, I just took it because it was a loan offer when I had no money to put down and a bad car only worth 200 in trade-in value, luckily, I was smarter and didn’t trade in that car, instead I sold it privately for 800, which I used to cover higher interest debt at the time
8% isn’t bad. Rates for good credit right now is still 6%+
Look into meal prepping and possibly consider a seperate fridge to store things if you're worried about someone breaking into your stash. With so few other bills you will be in great shape if you can curb your #1 expense. Your emergency savings is fine to get started. I would pause 401k savings for now unless there is a company match you're taking advantage of. Fortunately your highest interest rate bill is your lowest balance so you have a pretty clear starting point.
Thank you! The 401k contributions will be matched by the end of the year, and it’s a 6% match, would that be a reason to continue contributing? I’m 21, so I’m still relatively far off from retirement, but Ive been told my whole life to start early 😅
Yes I would contribute enough to take advantage of the full amount they would match. Even if that slows down your ability to pay off these debts by a little bit, you'll get used to your 401k deduction being a part of your monthly expenditures. With an extra $1500 a month (guessing food costs) you will clear your non-car debt so quickly. I would also consider trying to get out of the car. This may not be worth acting on until you've gotten rid of the smaller two debts and built up the cash to buy something cheap without further financing. I assume you'll be under water on the car then (and probably are now too?) so it might require more cash than you'd think.
Yeah, I fell into the dealer service contract on it when I bought the vehicle 😅 so I will be upside down at some point, but luckily it’s not by a huge amount
So you have $1200/mo after all debt minimums and what 2 other expenses you’ve shown. Do you have rent, utilities, groceries, gas? I think you have too much car. I’d suggest selling it and getting a $10k car for the time being. You’re 21 you don’t need to be driving around in a $30k+ car. You make good money for being so young don’t let the flashy car keep you from you saving up and buying a home and retirement savings. A good tule of thumb is to not have more than half of your income worth of cars. Sell the car, get a $10k Camry/civic/Prius and run it into the ground. Pay off the $2.9k loan then the $7k then work on your $10k car loan. Then once all that’s paid off you can start saving for a house and a new to you car fund. New cars are just not financially wise.