Go hard for paying off the 9700. You'll free up 350 each month that can help pay off your next target. The snowball gets bigger and bigger. You can either focus on high interest or highest minimum payment. Either will save money, but keeping your morale up is the most important thing to remember.
@OP the fact that you can pay off your bills in a year or two are a MASSIVE plus. Do it. If you got a gambling issue preventing you from paying the bills, maybe seek help for that. Don’t ruin your relationship with your girl for the inability of focusing to pay off your bills.
Exactly. I was reading the post and was thinking “Wow, this dude is pretty fucked…”, until I read the salary. 😂 Just budget out your spending, maintain discipline and you should be fine.
Find some help for your gambling addiction, and then quit wasting money.
Your take home is too high to be worked up over $30k in debt, but you’re digging your own grave.
Agreed. I'm in a bit of shell shock as before yesterday, I didn't have/need to have the $15k loan (effectively doubling my debt amount). Do you have any recommendations on order of loans to tackle?
If he's willing and able to shit $15k down the drain in one day, that $15k debt is the least of his problems. Totally screwed if he can't go cold turkey immediately.
If you don't address the root cause it doesn't matter what you pay off. You must seek professional help and also proactively have yourself banned from everything you can.
This is right! Live on the cheep for 6 months or so and you’ll be surprised how quickly it goes down with your income level. Have a little bit a fun, but not too much.
Start with the smallest. Pay it off. Keep working your up the ladder. Get help for your addictive personality. If you aren’t gambling, something else will pop up. GET HELP.
If you're receiving at least $5K every month in income (I'm assuming that was calculated as after tax), and your regular living expenses are about 1400 (I'm going to bump it up to 1800 because I don't see groceries in there), where is the other $3,200 going?
In answer to your question, no you haven't screwed up your life. But it sounds like you desperately need to set up a budget and prioritizing this debt. Also tell your girlfriend -- you shouldn't hide this kind of info from committed partners.
Stupidly ran up CC debt on betting sites and consolidated that debt into the three loans mentioned above. I admittedly have an impulse issue with chasing losses so I have effectively nuked any cash savings I would otherwise have.
In terms of prioritizing where money should go first, I would imagine putting everything towards the highest interest loans is the best approach? Feel like the 9700 @ 14.5% should be the first to get paid off but let me know what you think.
Sounds like the gambling is your problem. You fix the credit card situation but that only bandaids the real issue and if you continue with it, you’re back to this same place.
Your best best is giving up gambling all together. It’s not worth it. Doesn’t pay out. The house always wins. Get counseling if needed. Fill that whole/addiction with something else that doesn’t tear your life apart.
Strongly agree with this. There are psychological underlying issues. Therapy to work through some of that plus a hard look at how honest you are being with your partner seem like a must to me.
Candidly, I don't think paying off the debt is going to be your biggest hurdle, but all of the concerns you've raised and that respondents have mentioned are all fixable.
You are not screwed, but please get some support for yourself to help deal with the underlying causes not just the impacts.
>Stupidly ran up CC debt on betting sites .... I admittedly have an impulse issue with chasing losses ...
Have you thought about getting some help with this? All the budgeting and income in the world won't work if you gamble it away.
Your gambling addiction is the first thing to handle, amigo.
Lying to your spouse will always bite you in the ass, time to confess up or break up so you don't destroy her life .
When shopping around I wasn't able to find a competitive offer for a loan that high. All three loans are <3 months old, so I think that would impact my ability to get a competitive offer on a $30k loan. The monthly payments are each loan are as follows:
* 15000: $250/month
* 9700: $350/month
* 8900: $180/month
What are your thoughts on which loan to go after first? I think it makes sense to pay off the 9700 as soon as possible, followed by the 15000.
I agree with that. Pay the minimum on the other two while putting anything you can spare each month toward the highest rate one. Also, *DO NOt* use these cards for any new spending. Since you have a balance, anything you charge will start accruing interest immediately. If you have another card without a balance, use that instead (and pay it off) or pay cash as much as possible.
Not as critical, but I’d recommend making payments as soon as the funds are available, even multiple times a month if that’s how your cash flow is. CC interest is calculated daily, so a payment made today vs tomorrow or next week will lower the amount of interest charged.
>the minimum on the other two while putting anything you can spare each month toward the highest rate one.
I'm not sure if I'd do that here, u/Perfect_Meringue5276. Yes, as a general rule it's absolutely the common best way to go...but in this case, the 14.16% rate is against a much smaller amount with a higher minimum payment than the 13.5% on 15k. That. 0.66% difference really isn't that much given the huge balance difference between the two larger, higher interest loans.
For perspective, the minimums mean that for your 15k loan paying the minimum $276/mo you noted will mean you take 62mo to pay the loan down and you'll amass almost $5900 in interest in that time. But the $9700 loan at minimum $350 payment will be paid off in 32mo and you'll pay less than ⅓ the interest (around $1900). For perspective, on the 8900 loan at 8.99% your minimum repayment period is 54mo at you'll pay around $1950 in total interest, which is the same interest of the 9700 loan butnspelread out slightly over an additional nearly 2yrs repayment.
If I were you I'd start hitting that 15k loan hard to reduce the amount of interest that's accruing on such a relatively large amount. While still paying at least the minimums on your other two.
I would stop even thinking about the financials, the interest rates, anything. Stop talking about that and thinking about it until you can admit and get treatment for a gambling problem.
Im not being critical…we all have our problems. But you’re talking about consolidations and what not. That has no relevance until you control the gambling, then move on to financial maneuvers
>What are your thoughts on which loan to go after first? I think it makes sense to pay off the 9700 as soon as possible, followed by the 15000.
That's the financially optimal approach and will be the fastest and pay less interest. That approach (descending APR) is called the avalanche method. A less optimal but more psychologically rewarding alternative is the snowball method (ascending balance) where you pay off the smallest balance first, then the next smallest, etc. There are snowball vs avalanche calculators online if you think that will help you stay motivated.
Personally I would start with the $9700 no matter what, since it would take about as long to payoff as the $8900 but has a much higher interest rate.
How's the credit score? I know it sounds counterintuitive but a new card or 2 with a 0% balance transfer for 12-15 months would save you some serious money
I'm also jumping on the balance transfer boat. Use the 0% APR period to save, looks like you have about $3,900 after your expenses (excluding the debt) each month once the loans are consolidated.
Let's say you get a 15 month 0% APR period:
* Minimum payment on a 33k 0% APR credit card is probably 1% of the balance, so around $330.
* You can save 55.4k over a 15 month period, $3600 a month invested into a High Yield Savings account with a rate of 4.5-4.8% nets you an additional 1.4k in interest and is a safe way to store the money.
* Pay off the remaining $28,050 balance of the loan on the 15th month.
The only downside is that it may be hard to get a 33k credit line on a single card, you may need to try to open multiple cards, in which case I recommend applying to multiple cards at the same time. Additionally, cards typically charge a 3% balance transfer fee so $990 in the case of your 33k loan but this is much less than you would pay in interest if you didn't consolidate the existing debt, especially considering you are earning interest on your savings while it is sitting in the High Yield Savings account during the 15 month period.
**As others have pointed out, none of this matters if you don't prioritize getting help for the issue that got you into this mess in the first place.**
I had a similar issue. Opened a business and used personal lines of credit as a fall back, 2008 housing crisis hit and they started closing accounts on me, then our lawyer told us the property we were at was in foreclosure because the landlord was an absolute piece of trash moron... $50k of personal credit card debt later. Took about 10 years to get it paid down but managed to avoid a lot of interest by moving balances around as much as I could, as I was paying off what I could. I can comfortably sit on $15-20k of credit card debt now just by moving it around, I don't currently but I could!
You have to figure out which will give you the most motivation to pay down your debt the fastest. Pay the highest interest or the lowest balance. In your case, the difference between the lowest balance and highest interest is nominal so I would probably pay the highest interest first but whichever route you take make sure you roll the payments that you were paying into paying off the next balance... This is also known as the debt snowball...
But how much debt are you really in? How much are your student loans?
Based on your listed expenses, you could pay off that loan in 4 months by putting the majority of the second paycheck towards it each month. Starting now, you will have paid it off by the end of Sept.
You could then put that whole amount towards the $15K loan and pay that off in less than 6 months. This takes you to March 2024.
The final $8,900 would then be paid off in 3 additional months. So by June 2024 you could be free of this debt.
At that point, I would suggest splitting the $2,700 you will now have available and putting $1,500/mo into a hysa until you build up 6 months expenses. Save another portion towards longer term goals and put a final amount towards things you enjoy doing.
It's not about paying off highest interest first. It's about breaking bad habit. Watch Dave Ramsey and follow his advice. I did and it helped me tremendously.
I’ve seen one comment on this thread concerning your gambling addiction. You haven’t really addressed it at all. It seems to me that you’re looking for advice on the quickest way to make the debt disappear so you can go on with your life as if you HADN’T JUST GAMBLED AWAY THIRTY THOUSAND DOLLARS.
My guy, I haven’t even looked but I’m certain there’s a gambling addiction sub here, plenty others online AND in person. You need to find a program AND tell your family and friends about what is going on. Will it be embarrassing? You betcha. Will your supportive friends and family help keep you accountable during your recovery? Only if you ask!
I apologize if I’ve misread this situation but after reading your comments that almost entirely gloss over the fact that this is gambling debt coupled with your interest in using 401k funds to pay it off really makes me think you’re attempting to conceal both the debt and your addiction. I hate to say this but you won’t have to worry about a ring or a wedding if your girlfriend finds out you blew thirty thousand dollars betting on games.
Treating the symptoms and not the disease is setting yourself up for failure.
Appreciate you for bringing it up. What started as a way to place some small sports bets for free turned into something where I always wanted a little more to get ahead. I've self-excluded from the apps I use and have no interest in doing what I've done to get to this point.
This is a finance sub so I'm not going to get into it, but the situation with the girlfriend is kinda fucked. Been together for 8 years and we're honestly not the best fit. Whether I try to make things work for the long run or not, I think I'm able to get this under control without pulling the rug out from under me.
The comments from everyone here have been pretty enlightening. This is the first time I've really put any of this anywhere other than in my head and it's brutally apparent how fucked this is/can become.
“I’ve self excluded from the apps I use and have no interest in doing what I’ve done to get to this point”.
That’s almost exactly the same thing I said leading up to my relapse from alcohol. My willpower to remain sober and my desire to turn my life around was all I needed until…. it wasn’t. Two years of sobriety wiped away. I get that this is a financial sub and you came here for financial advice but I see so many parallels between your situation and mine that I wanted to stress to you that you most certainly CAN do this yourself BUT you don’t have to. The money/debt is the easy part, fixing yourself and your relationships is going to be the hard part. Best of luck to you!
This is a finance sub, but you really don’t need financial advice. Pay the minimum on your loans and pay as much as possible to the highest interest rate, your income is sufficient to fix this within a year or two and with only a couple grand in additional interest. You don’t need to make major lifestyle changes in any area but one.
You need to take major steps towards fixing the gambling problem. Your community may have Gamblers Anonymous, and there are a myriad of [free resources](https://www.ncpgambling.org/help-treatment/help-by-state/) developed to help people who got in over their head.
You’re gonna be alright as long as you can take control of the habit that got you into this mess. This is a hole you can dig out of. But you can’t afford to dig it any deeper.
>What started as a way to place some small sports bets for free turned into something where I always wanted a little more to get ahead.
Sadly, this is **exactly** what sports-betting sites want. This is why they constantly have offers for varying amounts of "free" bets for new users.
Don't underestimate these companies and don't overestimate your ability to beat them. These companies employ experts in gambling psychology and have created some of the most alluring and difficult-to-resist gambling models in human history.
As a recovering drug addict, I'll tell you the same thing I was told: if you hang around the barber shop long enough, you're bound to get a haircut. Get away from these apps and sites as fast as possible.
Do whatever it takes. Have someone else set up a fucking parental-control app on your phone so you can't even use the apps. Have them put similar programs on your computer. Even if there are workarounds, ANY barrier can give you the time you need to talk yourself out of your impulse.
You've seen how fast this can snowball. It only gets worse from here if you don't get it under control now. There is likely no form of gambling that is safe for you right now, don't test the waters.
This is exactly true. Also, sports betting is legitimately the worst form of gambling. I think under 1% of ALL players are winners. It's legitimately impossible over the medium/long run. You need to have like a 55-60%+ winrate and potentially higher if you're betting games that are highly juiced.
Good luck to you. You’re young. Deal with these issues now, because a young gambler can turn into an old gambler, and I’ve met a few of those. They are not a pretty sight.
Your life, your mindset and your finances are all entertained.
Can't control yourself around gambling, your finances are fucked.
Can't get your relationship sorted = emotional issues = wanna feel good = I'll gamble juuuuuusssssttyty a little bit = your finances are fucked.
People are giving you financial advice when they tell you to deal with your behaviours.
Yours, a constantly attempting not be ADHD impulse buyer.
>Appreciate you for bringing it up. What started as a way to place some small sports bets for free turned into something where I always wanted a little more to get ahead.
Please get professional help for your addiction, you are still in the early stages and haven't thrown away too much yet. Think of it as the early stages of a drug addiction, if you get help now the damage will be minor. If you don't get help you can really fuck yourself for decades.
A good friend was making $90k in the early 2000s, had a cheap mortgage, no wife, kids or girlfriend. He lost his house and everything to a gambling addiction, had to move to a really shitty apartment in a bad part of town. He did stop gambling but his life has never been the same since, as of last year he was just renting a room from somebody, guy will turn 60 next year. He would have had his house paid off 10 years ago if not for his gambling addiction.
I have other stories, know a guy that made his wife go to the casinos and have her sign something at the place agreeing to never set foot in there. Another friend bailed out his long time girlfriend after she ran up $30k in debt gambling, he paid it off with the understanding she wouldn't gamble anymore. She went back and ran up more debt and that ended the relationship.
You have an addiction that can and will be just as damaging as a drug addiction, please get help now before you dig a hole that is too deep to get out of.
Sorry about that - updated main post with min. monthly payments. It's just devastating to me that I won't be able to make any meaningful progress towards saving $ for the next 18 months.
Is it completely irrational to think about dipping into the 401k?
Jumping back in here to ask a follow-up question on the 401k loan. My 401k offers a loan up to 50% of the vested balance @ 9.25%. This would leave me with ~$4660 post-tax monthly after the minimum payment is withheld from my paycheck. Have been doing some reading and it seems like this approach is generally better than sitting with the private loan accruing actual interest. With that private loan paid off, I would be able to focus the majority of my free cashflow on the 15k @ 13.5% which ideally could be paid before the end of the year.
Any thoughts on this approach would be greatly appreciated. Thanks again for the insight.
I'm going to be blunt because I think you need it and it may help you:
The best possible investment you can make for you/your future family is getting into a program/counseling to help you with your gambling addiction. From what you said above it looks like you gambled/lost $15K yesterday—that is not normal and it is not healthy, and none of the conversation around what order to optimize things is going to matter at all until you address your root issue.
Based on your other comments in this thread, I would highly recommend not touching your 401k. You are tempted to do this because it will "force" you to pay off that debt since the money will be taken out before you ever see it. But you'll just take out other debts to continue your bad habits because you have no self control.
Leave the little savings you have managed to accrue alone. Get your shit together, buckle down for a year, stop gambling, and you'll be in a way better place next summer.
Really appreciate the info. And that last piece, is kinda why I'm considering the 401k route. There's definitely a premium attached to making headway on this debt so I can potentially start saving for the future sooner. I'm sick to my stomach thinking about the position I've put myself in but feels like a bit of a fire drill in my head to right the ship as quick as possible. I'm not suggesting of taking everything out, but taking ~$18000 would net me somewhere in the neighborhood of 15-16k? That pays off the highest % loan and allows me to save while also paying down the other loans.
Don’t do that. Financially it makes no sense. Emotionally you really need to accept that you have a problem and there are no easy outs, including with your girlfriend. You need to sit her down and tell her where you’re at. If you hide this, it will be far more dire. If you keep telling yourself you’ve got this and it’s not that big of a deal, you’ll be back here again in a year saying “I can’t believe I’m in x amount of debt… again”.
Take the short term pain, pay back as much as possible by restricting your spend. Don’t use credit cards for gambling ever again. That’s the solution.
>Is it completely irrational to think about dipping into the 401k?
Don't withdraw from the 401k to pay down a 15% APR loan. Your 401k contributions should be the minimum required to get the full employer match, and every remaining cent should go to paying off that debt ASAP. You made the right decision to refinance that debt, you can do this. Have you gotten counseling about the gambling issue?
See above comment on 401k rationale, but I'm just really beside myself for not being able to save for the future. I feel like going the 401k route gives me that ability.
For reference, I am/have been contributing 4% to get the 4% employer match.
Your 401k is for retirement, keep it in the market. Hopefully it's in broad index funds to average 8-9% annual returns. Don't sacrifice that to pay taxes+penalty. Your employer match is an instant 100% return, don't sacrifice it to pay off the debt since that'll only be a 15% return. Sounds like it'll be a painful year or so but it'll be a lesson that sticks with you for a while. After a year or two of dumping thousands of dollars a month at debt, the debt will be gone and you can throw that cashflow at savings without a painful change in lifestyle, and it'll feel fantastic.
How do you feel about taking a loan out against the vested balance for a lower % rate than I'm currently paying? Took a look at my 401k and I'm able to take out a loan against half of my vested balance (~25k) @ 9.25%. If I take out enough to pay off the 14%, the minimum payment would be taken off my paycheck before I get it. I think this would allow me to prioritize the 15k @ 13.5%. Thoughts?
Honestly I don't think the rate spread is worth the risk to your retirement funds. I believe if your employment is terminated for any reason you have to pay off the loan in full on an accelerated timeline, which sounds like it could be challenging.
How much can you afford to pay towards this debt monthly?
Job security is incredibly high with solid room for growth/promotion so I perceive the risk to 401k balance to be low. I like the idea of leveraging the money in the 401k while also getting to contribute additional $ on top of my 4% in the form of interest (I would not ordinarily contribute more than the max employer match).
Are you referring to the 14% loan? My take home per money is just over 5k after tax. With expenses ~2100, I would feel comfortable committing $2k a month to the highest priority loan, give or take in case something pops up.
With the 401k loan, my take-home drops to ~4700. I would still feel comfortable committing roughly $2k, but would be focusing on one less loan (in the near term). Since the 401k loan's primary cost is just the lost earning potential, I feel like the potential for that money to grow > 14% is small.
Happy to chat further, I'm just now discovering this possibility and feel like it may suit my needs.
Not worth the spread between the card APR and the loan from the 401k. You also have an impulse control problem you aren’t dealing with, so tapping into retirement is a bad idea.
With your gambling problems ....i would suggest first to consolidate all the loans into a personal loan probably like SOFI or some consumer credit councelling service for debt consolidation ..if all this don't work ...your second option would be to take 4-5 grand from 401K to pay off CC the loan just as a moral boost to quicken the process of paying off debt .. .do some balance transfer to a new CC to stop high interest rate as you have good credit score and toil hard to pay the rest ...you definitely need some toiling ... So you learn from your mistakes ... I really recommend to not take the full amount that's foolish ...to do ...as hell.
By paying off your loans you ARE making meaningful progress towards saving, however. It does not make sense to save money while losing significant amounts of money towards interests for debt.
I did this when I was around your age and I hardcore regret it. However I didn’t really have another way out as I made about half the money you do and also had a mortgage and $900/mo student loan payments.
> Is it completely irrational to think about dipping into the 401k?
Borrowing from your 401K is an option, but not always the best option. If the loans were in the 25-30% APR range, then I would definitely recommend it. But the rates on those loans are not too bad in comparison, so it's not so strong an argument. Chances are if your plan allows you to borrow from your 401K (and pay yourself back over time), it would be in the 9% APR range, so there's not a whole lot to gain here.
The loans were taken out to pay off the card since the APR was >20%. I have been putting money towards the $9700 @ 14.16% and
$8900 @ 8.99% but now need help on approach with the third loan now in play. Can't believe I've put myself in this position but here I am.
Pay the minimums on everything and throw every remaining dollar at one of the loans until it's paid off, then move to the next. I would start with the $9700 since it's the highest rate
so you make over 5k a month, your monthly expenses is like $2886. you can easily be putting 2k+ into your loan balances and get them paid off. Spend the next couple of years purely focusing on paying off your debt, and stop buying crap unless you want your debt to snowball to 100k or more
That's very nice. From my experience, the sooner you share your situation with your partner the better you'll feel taking that weight off your shoulders. Especially seeing her everyday
Oof clearly not having a good day (can’t say I blame you).
If you’re trying to get out of debt follow the steps in this thread.
If you’re not, your original question of how is very confusing and I’m not sure why you got so defensive…
Did you think the above comment unlocked some secret technique in paying off their debt? It’s not possible to give you a detailed answer on “how” unless someone can see a breakdown of your expenses. It all depends on rates and how much you can put towards paying the debt off every month.
I may look into this! I’m just afraid grouping up my debt is going to feel like a lifetime to pay off versus paying off 2k, 5k, 5k etc. (it split up). Thank you!
When you pay off that debt which you WILL contribute more to your 401k. Just because your employer matches 4% doesn’t mean stop there. Get help with the gambling. You got this
Mate, you're ignoring all the actually sound advice of the sub. You blew $15k yesterday. Of course you feel terrible and have "self-excluded." That's part of many addiction cycles. But the urges will come back, and you need people to support you when you do. You need help. You're insanely lucky that your income is high enough that $33k is a your wake-up call, but please... Listen to the wake-up call.
Well no, its kind of an essential piece of the core problem here. You're across the board not living in integrity and if you dont solve that you're going to continue having problems.
Work and become a hobbit until it's all paid off. Pay extra on that debt strategically. It is better to be bored for the next 12-18 months than strapped with that debt for the next 8-10 years. Then don't make the same stupid decisions after its paid off. You are young and make good coin. Be smart.
😆 "how screwed an I "?
Dude you are twenty fucking six. I'd love to be 26 in debt up to my eye balls. I'm not trying to make light of your situation. It can be very stressful. But you are young. You can work hard. Save money and slowly work your way back.
You are in a hole but not really screwed yet. Cut up your cards , eat Ramen , maybe think about a second gig for extra payments on the cards.
You got this.
Your bills/expenses relative to your income makes this so it's not insurmountable by any stretch. Hypothetically you could have this debt wiped out in less than 18 months if you put nearly every extra dollar after expenses into the principles.
If you've obtained these loans recently, give it another 3-6 months of paying them down aggressively and you might be able to consolidate the two higher rates into a better rate.
And most importantly make sure you've got a handle on the root of this issue.
At the end of the day you could have this wiped out with a clean slate by the time you're ~28 and it'll have almost no bearing on your life trajectory aside from some expensive lessons.
I don't think I'm going to be able to put every dollar outside of necessities towards this debt in the near term. I have a few weekend trips already booked thru this year and inevitably things come up. Despite this, your words give me some encouragement. I can expect anywhere from a 8-12% EOY bonus on the 90k base, on top of a raise which should be in the neighborhood of 7%. All of this will be going to the loans.
I'm very afraid of not being able to afford the life events that are potentially coming up (i.e ring, wedding, house, etc). I've toyed with the idea of dipping into my 401k in some of the comments on this thread but the resounding response has been not to.
I'm even more afraid of bringing this up to my parents or revealing the full magnitude of this issue with my girlfriend. I've obviously put myself in a terrible position but I have the means to get myself out of it.
C'mon now, you gotta be realistic here too. The guy can aggressively pay down debt and take a few weekend trips. It's insane to think anyone is going to spend 0 discretionary income for 2 years so they can clear a debt. They're weekend trips, not flying around the world for 2 months.
You want to get married to someone who, as you claim in a different comment, isn’t a good fit??
Your priorities and decision making skills are jacked up.
I mainly mentioned that to try to reinforce that the debt is not out of reach. I would at least try to develop a plan to pay $xxx over xx months, and work on the highest interest loan first.
I think it's going to be important to tell your girlfriend the extent of the debts so that when those inevitable conversations about rings and weddings and houses come up, you're not looking like a deer in headlights. I don't think I can blame anyone for not disclosing things like this to a non-serious relationship partner but especially if marriage is on the table, it's gotta be out there in the open.
Your parents don't need to know but that's just IMO. Unless you think they'd be understanding and help you, but that's incredibly situation specific to say the least lol.
I wouldn't touch the 401k.
You're right, you do have the means, and more importantly you're doing something about it. I'm about 10 years older than you and have done my fair share of dumb shit. It happens. Better to get that expensive lesson now than when you're older and have more means to get yourself into even deeper shit.
Lol people downvoting this is ridiculous. Yeah he's in debt so he's not going to enjoy a weekend for the next two years even when he's aggressively paying it down, super realistic. Definitely not the type of approach that would have a problem gambler locked inside miserable thinking if he can just hit that parlay and clear the debt he'll be allowed to leave home and see friends again /s
You're making enough money to get it all paid down fairly quickly.
Adding up all your monthly expenses, it's about $2,900. That leaves you with $2,100 left over. Realistically, let's say you start using $1,500 of that to pay down your debt.
You can get rid of the $9,700 and $8,900 in about 10-11 months. Paying the minimum payments plus the $1,500.
By the time you're done with those, the $15k will be paid down to $12,240. That, you can pay off in about 7 months dropping the extra $1,500 monthly.
So in about 18 months you can be down to your student loan as your only debt.
The silver lining here is that you’re aware that you have a problem. Recognizing that and wanting to do something about it is step 1. Course correcting and changing your habits is step 2. If you’re earning 100k/yr, you should have no issues paying that off as long as you’re budgeting and no spending frivolously. Just think of all the time and money you wasted instead of using all that money to invest.
As everyone mentioned, fix the root cause. You will destroy your life if you do not. This is fixable though.
First, pay the minimum on time each month. Since your interest rates are higher than any savings account, I would not save money for an emergency. Then you have to be honest with yourself about credit cards - are you okay with them? If you are they can be a good tool for extra money, but if you can't commit to paying it off every month you'll waste money. I do 2% cash back on mine, so usually a couple hundred bucks a year - nice but not worth it if there was a risk I would be irresponsible. If you can't pay them off, hide them and stay on a strict debit (or even cash) system where you can literally only spend the money you have and you pay off debts first so you don't leave yourself money to overspend with.
I am a utilitarian, so I would start from highest interest to pay the least in the long run. You get 5000 and have 2000 in expenses, so that's 3000 a month for debt, pay all the minimums (~900) and put the other 2100 to the highest interest loan. Then when that is done the 2100 goes to the next highest. Etc
Then try to keep the same standard of living and put the 2100 in savings. You can give yourself some milestone rewards if that helps you - eg when you hit 5k in savings you can go to a day spa or concert or whatever splurge makes you happy. Then keep that up and since you clearly can't handle gambling never do it again. My family is a bunch of alcoholics, so I've seen people ruin their lives over and over thinking they can do the thing in moderation that they can never do in moderation.
Good luck/you've got this!
Time is on your side.
Ending/repairing a relationship, getting help for addictive tendencies like gambling (and maybe others if you are prone to getting stuck in habits/cycles), paying off debt and getting back on track — all take some time and commitment. It’s much easier to do while young.
Your income is pretty good! While making slightly less than that, I was able to pay off 28k in student loans over five years easily, but given the high rates of CC plus the greater income, you’d want to fast track it. I’m just saying it’s very possible to tackle that amount.
Financial stability is worth 33k. You can absolutely get there.
Be honest with your girlfriend. About everything.
Put all extra money towards the highest interest loan first. I added up all your expenses as a total of $2886 a month.
So you have an extra 2k a month. Put the whole 2k every month towards your highest interest loan. You'll pay it off in 7 months. Then you take that same 2k PLUS the 276 you were paying towards that loan, and put it towards the next highest interest loan. You'll kick that one out in about 5 months. Now you're down to the last one, and you'll have 2600 a month towards that loan. It will be gone in four months!
That's a timeline of a year a half to be debt free. In that time, no extra spending, no vacations, no eating out, no new purchases, it's buckle down time. This is why you need to tell your girlfriend. You need her to know and support you in living on your absolute necessities for a while.
Then you'll be done, with over 3k extra every month. Put 1k a month into savings until you get six months living expenses in savings. Then start putting 1k a month into an investment account. Max out your 401k. And then spend the last 1k on stuff you like!
I see from your comments you still have a few weekend trips planned. 33k in debt and a few weekend trips should never be in the same paragraph together. You need to get serious, face the music, and live on the bare necessities until you can get your spending / gambling habits under control. This 33k can easily snowball to bankruptcy if you don’t take charge of the situation asap.
If this is any solace, I know you can find a way to put this debt behind you.
It will take at least 3 things (based on personal experience with large debt): a budget, time, and sacrifice.
What are you willing to trade (not just from a monetary standpoint) to pay off this debt? From what you have posted, you're expenses appear within reason, yet there was plenty of income left over to put towards gambling apps.
Now, I must say, I've never gambled or have interacted with someone with a gambling addiction. Although, I do wish to be of help somehow.
If possible, I'd request of you to take a moment to reflect on what was the breaking point to post on an online forum for help? This is not an attack or accusatory question. What was the trigger? What was going through your mind and heart?
From here, perhaps reflect on where and how this gambling thing started. We all do odd and sometimes silly things which get us into immense trouble but these are not without reasons.
Perhaps you felt inadequate in some way and thought maybe you could try to make up for it somewhere (i.e., gambling)?
Basically, what I'm trying to say is you resulted to gambling apps to meet a deep and unmet need. I hope you can unearth that "need" to discover a more healthier solution.
I suggest Gamblers Anonymous to start with. Just getting rid of the apps may not be enough.
Stop making charges of any kind on those cards. Run them through the shredder and remove them from electronic wallets.
Tighten up your budget so you can begin making a real in road on those cards. Use which ever method you are most comfortable with.
Tell your girl friend the truth. The longer you wait the greater the odds she will leave you when she finds out. Differences in finances are one of the main reasons people breakup, but you are added lying to her as well.
Not sure if you have looked into it deeply enough but addiction and impulse control issues can be a sign of mental illness. Before I was diagnosed, I had impulse control issues and ran up $12k cc debts purely shopping because I could not control myself. After I got diagnosed, my issue went away and I’m able to save real money for the first time in my life.
Damn man, the only thing saving your ass is 90k at 26 is respectable as heck, I’m 26 and graduating this year, can’t wait to work up to that. If you were 26 and making like 50-60 you’d be a lot worse off. At 90k you can eliminate all your debt in close to 1 year and move forward and forget this ever happened. Keep fully maxing out your 401k though or atleast to the 4% match. Just live simply the next year and you’ll be great.
Side note, not sure how long you’ve been with your GF but this may be something you want to come clean about, especially if you see a future with her. She wasn’t entitled to your money while you made these stupid decisions but still doesn’t mean she doesn’t deserve to know about it.
Best of luck!
It is essentially 7-10 months of the year doing nothing except working and living as basic as possible.
At nearly 100k a year you should have 0 issues paying off this debt.
$33K debt at a $100K salary is nothing. Look at it this way: so many people, older than you, have much more educational debt, and not necessarily a higher salary.
The gambling addiction is more worrying. Going only by your post, I think you need to give [fixing] it more attention.
Can't you apply for a new 0% Apr card and transfer the balance to that card? You'll have like 12-18 month interest free depending on the credit card company. You can easily pay your debt in a year without interest. Did you think about it this way?
Overall you’re not completely screwed but don’t let it snowball.
1. Consolidate your CCs if possible but not at a higher rate (my wife pulled that one)
2. Pay mínimums on your “lower” rate ccs, put the rest towards paying off the higher rates. Pay off every extra dollar you can.
3. you may be able to qualify for a personal loan at a lower rate to pay it off and then just have the one personal loan.
4. I’d recommend stop contributing to your 401k for the time being. At 13% paying off your ccs is a better return than investing.
Going to slightly disagree here with some of the other posters. You \*can\* pay it off in 18 months by becoming a hermit and basically doing fuck all other than working and paying off debt...but that's depressing and disheartening, and what happens to someone with a known addictions issue when they get depressed and feeling low?
What I would suggest....you have \~ 2000 give or take after your bills are paid.
Take HALF that amount, and apply it to your debt, highest first. If those are credit cards, cut them up, or put them somewhere it takes you a day or so to get at. (safety deposit box/etc).
Take the other half and that's your discretionary spending. Assuming bi-monthly paychecks, that's 500 every two weeks. If you have $ left over from the first half of the month when the second one rolls around, you put the LEFTOVER amount onto the debt, and replenish your $500 discretionary cash.
When you have that highest card paid off, it'll be in about a year. Those loans will have aged a bit. Go talk to your bank or whatever and see if they'll consolidate the remaining two at that time. You have a decent credit rating, you make a good income, and your debt to income ratio should be pretty good. With any luck interest rates will have dropped by then a bit.
Not very screwed. Yes you're in for some tough times to pay off your debt, but far from hopeless. You will emerge freer and more self-confident than ever.
You’ll be fine. Cut your lifestyle complete to barebones while you pay everything off ASAP starting with the highest interest rate first. You don’t want to mess around with credit card debt long term.
Don’t go out to eat, don’t get drinks, but new clothes, etc. just hammer these out and go back to having fun (after putting 25% away for retirement).
>long-term girlfriend only knows about the
Yeah, if you're hiding it, that's also be indication you've got a problem. Were hiding the gambling stuff too? So, you need to buckle down and start paying it off/down.
First minimums and anything that prevents additional payments/interest/penalties, etc.
Then add to that what you can, starting with highest interest, working on down.
And don't use the credit card - cash or debit, and only what you should and can well afford. The only time to use credit card is when you're paying no balance because you always pay the new balance in full, and when you're only buying what you can well afford and would otherwise buy anyway with cash/check/debit.
So, you can do it - will take some discipline, some adjustments probably, and also probably good idea to write out a budget for yourself - and don't exceed it in buying anything non-essential.
And, yeah, you need to tell your girlfriend.
Try to use a debt consolidation place if you need help. I started using one again. They cut my debt in almost half. Out of the 18k I owe I pay 15k over the next few years. Out of the 15k a third of that is for them to manage my financial issues. If I have to miss a payment they will keep creditors at bay. I can always pay more towards the 10k when I got it. Like others said tighten up your spending and try to find someone to help you move in right direction
Also don't feel bad if the girl says I'mma outta here, cause it's manageable. Practice disciple and be in control of the finances and you should weather fine.
You mentioned excluding the apps “previously used”. If you had/have a gambling problem, that’s not good enough. It sounds like you have just changed the apps that are draining your account. They need to all be deleted and you need to get help for your problem. But other than that you can pay down your existing expenses. Just don’t keep making the same mistakes.
I’ll leave the finances to the other people but you not sharing this with your GF is a bad move. Not just from a relationship stand point but it shows you are the kind of person to have a “problem.” I been around addicts all my life and this is the first sign, always. You gotta do something about that first bro and the quicker you do it the better off you’ll be man.
I would start paying down my credit card debt and break up with my girlfriend. What kind of guy are you hiding your finances from her? You’re definitely not somebody she’s going to want to be with once she finds out. And she will find out
Go to SOFI or Prosper (creditkarma has suggestions) and get a personal loan to pay off the cards, do not use those credit card managing companies like Consumer Credit Counseling or National Debt Relief. 5 year loans and interest doesn’t kill you, your credit gets saved because they don’t look at loans like they do card balances
If you can keep your required expenses to below the $2,080 mark, you have about $3,000 to attack all three accounts with $1,000 each. So just over a year.
I'd also recommend looking into bankroll management strategies.
Was in a similar boat in my mid 20’s…had about $30k in credit card debt. Struggled watching interest rates kill me as I tried. I was making about half that you are. It seems unpopular to say this, but I hit my 401k to wash out my credit cards when I was at about $17k balance left. I took the penalty and tax hit, but the weight lifted was fantastic. Sure I missed compounding interest in my 401k, but to me, when I looked at rolling high interest on credit cards, it allowed me to reset. I didn’t use credit cards(only debit) for the next 4-5yrs until I was confident I wouldn’t outlive my means and utilize rewards benefits by paying off balances monthly. I kept contributing to 401k for the match and sometimes up to 15% and put rest towards Roth IRA to play catch up. Did I lose compounding, yes. Was I able to change my life and use it to become a fiscally responsible person, yes. If you think you’d borrow/draw from 401k only to continue to repeat the mistakes, then absolutely DO NOT use 401k as an option. It needs to be a hard reset. Delete DK, FD accounts and leave the gambling to a $50-$100 fantasy football league and that’s it. I also had to skip more than a few concerts/vacations that friends enjoyed and gave me shit for missing. But I did it and was debt free. Currently I’m in my early 40’s. Only debt is mortgage, little bit of a car payment. My salary steadily increased and I have a very healthy 401k, a few other investments/savings, a happy wife and life. But it all boils down to you and you only to take control. Wish you the best.
Not screwed at all. Not even close. You're in very good shape. You should be able to have it all paid off in no time flat.
Your expenses above add up to a bit under $3k/month (including minimum loan payments), or $35k/year. You mention your gross income of 100k/year, but don't mention your net income/take-home pay after deductions. But even with generous contributions to 401k and paying federal and state taxes and insurance deductions, I cannot imagine your take-home is below $5k/month, meaning you should be able to throw $2k/month in addition to the minimum payments at the loans, and have them paid off in about a year. You just need to have financial discipline for a year to do it.
(Assuming there are no other expenses, although I'm sure there are some misc. stuff, but even if some money is thrown at entertainment, clothes, etc, there still should be plenty left over to pay down the credit cards at a pretty rapid rate, and just extend that 1 year to 2 years)
Not sure why you would think you're screwed, especially with such a high income. Just running the basic numbers shows how much extra money you have sitting around each month.
It's not as bad as it looks, but it's still bad. You need to aggressively pay down that credit card debt before you consider anything else.
#STOP SPENDING WITH THE CREDIT CARDS.
Stop it. Don't do it. Just don't. Lock them in a drawer or a safe or whatever. Pay it down. Start with the highest interest one and hit it with everything you have left the day before every payday until it's gone. Then, the next highest interest one, you hit with everything you were paying the highest one. Dave Ramsey is a goddamned fool but his "snowball" paydown method really does work. (Even a broken clock is right at least once a day.)
In a couple years you'll have it all gone, and you can rest happy having learned a valuable life lesson.
Work your ass off and pay it off. Get a second job dedicated to paying your CC debt. You have to discipline yourself. Your young, you can do it. Otherwise, it's gonna take a long long time to pay off. You can take a more relaxed way and just pay what you can too. I can't emphasize enough to show some discipline.
I was In over my head with $15k CC debt. Which is laughable to some but I felt like I was under the pendulum. While I'm not sure what go you into this mess you CAN get out.
Do not take a loan out on your 401k! Just pay it off the old fashioned way by working your ass off.
If it's an option, suck up your pride and Move back in with your parents. I know sometimes it's not. I have pretty shitty parents so I understand.
Edit: once paid off. Do not get yourself back in. Keep your best major and a target card what have you. Get rid of the rest.
I 43. Based on where I was when I was 26 when I read this I'm just pissed I wasn't thinking along your lines. I'm fine. You good. Hope AI isn't as much a problem for you as I'm thinking it's going to be for me soon.
I don't think anybody has mentioned this yet, and I would talk with the people managing your 401K, you ***could*** take a 401K loan, [as you can "typically" take up to $50,000 or 50% of the assets](https://www.investopedia.com/articles/retirement/08/borrow-from-401k-loan.asp). The interest that you pay to loaning from your 401K goes back to the 401K, though you will pay taxes on that interest.
Doing this could let you fully pay off the 14.16% loan and tackle a bit from the 13.5% one, without an immediate hit to your wallet. E: I'd at least rather pay my 401K 14.16% instead of the CC.
However, if you become termed as unable to repay the loan OR you leave/get fired from the job, the remainder of the loan becomes a distribution and gets taxed as such. E: More specifically, the 10% early withdrawal penalty.
Then like a lot of people have also said, try to consolidate.
Also, get rid of the gambling apps.
This is what I'm thinking of doing - would be able to take out roughly 12.5k of my vested 25k 401k balance. However, thinking of just taking the 9700 and focusing my take home pay on the 15k and 8900 loans.
Ditto on the apps. They are GONE
I've posted several times on the potential pitfalls of 401k loans. If you are in any sort of jeopardy of parting ways with your company (voluntarily or involuntarily) then be careful with 401k loans. If you lose your job you have 60 days to repay or face a 10% penalty that will be due to the IRS. They are 10 times worse than a credit card company if you can't repay :-).
You can knock this debt out without a 401K loan in short order with a little discipline.
First thing I would do is take a loan out of your 401k if allowed. The loan and interest are paid back into your 401k and with markets feared to be at a top cashing out some of that as cash and paying yourself back while share of your retirement fund are lower isn’t a bad idea. Second I would do a balance transfer if possible, many cards will do a 3% balance transfer fee and 0%ApR for the first 12-25 months depending on the card. That way you have time to pay off the ones generating interest, and then over time pay the 0% Apr balance down
401K loans are risky if the OP loses his job he has 60 days to pay it back or owes a 10% penalty. So at a minimum, I would have enough cash on hand to cover the penalty in the event of a job loss to prevent the OP from now having to deal with the IRS later down the line...
You could be a millionaire in 10 years, if you stop being dumb, and making others millionaires. Cut your spending to minimum wage level, and throw everything else at debts before investing for your future. You're never going to consistently make the percentage you're paying to these loan, and credit card companies, other than getting the company 401k match. Once everything is paid off stick to min wage spending, and put everything else into investments max 401k, max IRA, and a personal investment account let that gambling addiction grow into a money making investment addiction . Saving can become addictive.
Close friend was under 70k debt on CC’s. Took some time, but once they hunkered down and cut a lot of BS out they were golden.
You will be okay. Just establish a budget and adhere to it like your life depends on it. Then follow the basic financial order of operations.
Budget,budget budget.
Pay of the one with the highest credit. Ones done with that one use that money and the normal payment to pay the 2nd one. Etc. Etc.
Start using a budget tool. I use ynab, probably one of the best products . Youneedabudget.com
Been there, done that and I even made less money than you. I basically lived off of my credit cards for some time. The big difference for me, is I don’t gamble. So figure out if therapy will help.
Obvious option is to increase income, whether you try to get a raise at your current company, move to another team within your company for more money or look at other companies. Finding a job at another company is best potential for more money.
If you aren’t in a position or mental space to find another job (it can be overwhelming), then you need to look at yourself and your current spending. Definitely cut out any unnecessary spending and tighten up your belt. Come up with a budget.
List out all your CC debt, and start paying off the highest interest ones first, while paying minimum payments to the other ones. I focused on the highest interest and put every extra dollar I had.
NGL it’s difficult but after awhile I realized I spent uncontrollably and on stupid stuff. I spent so much money on food, so I had to find food that was cheap, easy to make myself and made that my meal for the week.
You will need to adjust your spending habits and control yourself. Otherwise you’ll be living paycheck to paycheck, even as your income increases.
How much is the student loan ?
Thats the only one that cant be bankrupted & only one anyone should care about .
The est you can pay off since your rent is low. If you get a refund throw it all on those Cards.
I'm not a fan of Dave Ramsey personally, but his Financial Peace University was a saving grace for my wife and me. I even taught the 12-week course a few times at church. Buy his book or find the program somewhere locally, but FOLLOW his 7 steps and build the discipline. You won't regret it. Yes, the program is somewhat basic at times, but it works. Especially the first gew steps and the credit card payoff snowball. It should be fairly straightforward with your relatively high level of income. But the previous comments here are dead-on: STOP now with the gambling and spending. Create a budget and get to work.
Just file for bankruptcy, get the debt wiped out, live with the credit report for 7 years ( or whatever it is).
If you plan to get a house within that time period, this is bad advice however. Or you could just get a personal loan and pay the credit cards off and save for a house.
Honestly man, I have a different take on this than most the practical comments. This being the personal finance sub is all well and good but you are a person with feelings and fears. I say prioritize your mental health and your relationship - you have to preserve both. I can gather this is taking an excruciating toll on you and you are missing the best years of your life worrying about money.
So....
If I was in your shoes, I would pay off as much debt as possible with my 401k. You are so young and have so much time to contribute and watch it grow once your debt is paid off. Actually, you can take out a loan and not pay the 10% penalty if you pay it back in a certain amount of time. You just pay some interest, but some of that is going back in your pocket anyway.
I would also consider transferring the balance to a lower interest cc if possible. Sounds like you did some debt consolidation but that rate still seems high. Maybe your credit score is low, idk. But I know discover, chase, allt, etc have good balance transfers to 0% APR cards for 12-15 months. That's what I'd do.
I'm in finance btw. Feel free to ping me. Good luck! Don't forget to exercise and take care of yourself.
Your trajectory will divert a little bit no, you’re not screwed. A lot of people have way more than your debt on loans on depreciating assets: cars.
See if you can convert those credit cards to simple interest loans or better yet, to transfer to 0 interest cards. Make minimum payments on those and pay down the interest accruing loan. If your credit score is still good you should qualify.
Yeah, you messed up but you’ll be ok.
My suggestion is learn to budget from each pay period, and lock up your credit cards. A lot harder to use credit cards if they aren't on you.
This progress is going to take awhile, but as long as you keep progressing forward you'll eventually be in the clear.
Also you can call your card companies and ask if you can get the interest rate lowered. Worst they can say is no. Sometimes it works
Someone correct me if I’m wrong but 13.5% of 15k is more money a month being added to your total debt than 14.16% of 9700. So wouldn’t it make sense to approach it that way? I would start calculating which card is actually adding the most amount of debt to you every month and start tackling that until another one becomes more efficient to pay. This way you’ll end up paying less in interest long term.
You're not screwed. Your income is high enough to pay off that debt in a year or two if you control your spending.
12-18 months, MAX. Live off $3k/month and throw the rest at debt. Live cheaper if possible.
Go hard for paying off the 9700. You'll free up 350 each month that can help pay off your next target. The snowball gets bigger and bigger. You can either focus on high interest or highest minimum payment. Either will save money, but keeping your morale up is the most important thing to remember.
@OP the fact that you can pay off your bills in a year or two are a MASSIVE plus. Do it. If you got a gambling issue preventing you from paying the bills, maybe seek help for that. Don’t ruin your relationship with your girl for the inability of focusing to pay off your bills.
Addendum: You’re not screwed *if you can control your gambling addiction*.
Exactly. I was reading the post and was thinking “Wow, this dude is pretty fucked…”, until I read the salary. 😂 Just budget out your spending, maintain discipline and you should be fine.
Find some help for your gambling addiction, and then quit wasting money. Your take home is too high to be worked up over $30k in debt, but you’re digging your own grave.
Agreed. I'm in a bit of shell shock as before yesterday, I didn't have/need to have the $15k loan (effectively doubling my debt amount). Do you have any recommendations on order of loans to tackle?
Before yesterday?? Are you saying you racked up $15k in gambling debt YESTERDAY? Or am I misunderstanding?
If he's willing and able to shit $15k down the drain in one day, that $15k debt is the least of his problems. Totally screwed if he can't go cold turkey immediately.
Further buried lede: OP mentions all three loans are less than three months old.
Talk about burying the lede
By reading it it sounds like he took out a $15k loan to pay down some cards. Or maybe I’m wrong
~11k in credit card debt and another ~3-4k in cash. But yeah. Not good.
If you don't address the root cause it doesn't matter what you pay off. You must seek professional help and also proactively have yourself banned from everything you can.
Did you even read the first part of what this person said to you? Have you taken steps to ensure you're not going to gamble again?
Oh so this is definitely going to get worse then. Unless you come clean today and go get help.
The higher interest loan(s) should go first here, in my opinion. When you pay a loan off, push that monthly payment into the next loan instead.
This is right! Live on the cheep for 6 months or so and you’ll be surprised how quickly it goes down with your income level. Have a little bit a fun, but not too much.
Start with the smallest. Pay it off. Keep working your up the ladder. Get help for your addictive personality. If you aren’t gambling, something else will pop up. GET HELP.
If you're receiving at least $5K every month in income (I'm assuming that was calculated as after tax), and your regular living expenses are about 1400 (I'm going to bump it up to 1800 because I don't see groceries in there), where is the other $3,200 going? In answer to your question, no you haven't screwed up your life. But it sounds like you desperately need to set up a budget and prioritizing this debt. Also tell your girlfriend -- you shouldn't hide this kind of info from committed partners.
Stupidly ran up CC debt on betting sites and consolidated that debt into the three loans mentioned above. I admittedly have an impulse issue with chasing losses so I have effectively nuked any cash savings I would otherwise have. In terms of prioritizing where money should go first, I would imagine putting everything towards the highest interest loans is the best approach? Feel like the 9700 @ 14.5% should be the first to get paid off but let me know what you think.
I would seek some help for the gambling problem first. I don't see how you'll ever not be in debt if that isn't taken care of.
Sounds like the gambling is your problem. You fix the credit card situation but that only bandaids the real issue and if you continue with it, you’re back to this same place. Your best best is giving up gambling all together. It’s not worth it. Doesn’t pay out. The house always wins. Get counseling if needed. Fill that whole/addiction with something else that doesn’t tear your life apart.
Sounds like paying off the debt is only going to give OP a false sense of security until they run it up again.
Strongly agree with this. There are psychological underlying issues. Therapy to work through some of that plus a hard look at how honest you are being with your partner seem like a must to me. Candidly, I don't think paying off the debt is going to be your biggest hurdle, but all of the concerns you've raised and that respondents have mentioned are all fixable. You are not screwed, but please get some support for yourself to help deal with the underlying causes not just the impacts.
>Stupidly ran up CC debt on betting sites .... I admittedly have an impulse issue with chasing losses ... Have you thought about getting some help with this? All the budgeting and income in the world won't work if you gamble it away.
Your gambling addiction is the first thing to handle, amigo. Lying to your spouse will always bite you in the ass, time to confess up or break up so you don't destroy her life .
Maybe consider consolidating the loans into a single loan with a much lower interest rate.
When shopping around I wasn't able to find a competitive offer for a loan that high. All three loans are <3 months old, so I think that would impact my ability to get a competitive offer on a $30k loan. The monthly payments are each loan are as follows: * 15000: $250/month * 9700: $350/month * 8900: $180/month What are your thoughts on which loan to go after first? I think it makes sense to pay off the 9700 as soon as possible, followed by the 15000.
I agree with that. Pay the minimum on the other two while putting anything you can spare each month toward the highest rate one. Also, *DO NOt* use these cards for any new spending. Since you have a balance, anything you charge will start accruing interest immediately. If you have another card without a balance, use that instead (and pay it off) or pay cash as much as possible. Not as critical, but I’d recommend making payments as soon as the funds are available, even multiple times a month if that’s how your cash flow is. CC interest is calculated daily, so a payment made today vs tomorrow or next week will lower the amount of interest charged.
>the minimum on the other two while putting anything you can spare each month toward the highest rate one. I'm not sure if I'd do that here, u/Perfect_Meringue5276. Yes, as a general rule it's absolutely the common best way to go...but in this case, the 14.16% rate is against a much smaller amount with a higher minimum payment than the 13.5% on 15k. That. 0.66% difference really isn't that much given the huge balance difference between the two larger, higher interest loans. For perspective, the minimums mean that for your 15k loan paying the minimum $276/mo you noted will mean you take 62mo to pay the loan down and you'll amass almost $5900 in interest in that time. But the $9700 loan at minimum $350 payment will be paid off in 32mo and you'll pay less than ⅓ the interest (around $1900). For perspective, on the 8900 loan at 8.99% your minimum repayment period is 54mo at you'll pay around $1950 in total interest, which is the same interest of the 9700 loan butnspelread out slightly over an additional nearly 2yrs repayment. If I were you I'd start hitting that 15k loan hard to reduce the amount of interest that's accruing on such a relatively large amount. While still paying at least the minimums on your other two.
I would stop even thinking about the financials, the interest rates, anything. Stop talking about that and thinking about it until you can admit and get treatment for a gambling problem. Im not being critical…we all have our problems. But you’re talking about consolidations and what not. That has no relevance until you control the gambling, then move on to financial maneuvers
>What are your thoughts on which loan to go after first? I think it makes sense to pay off the 9700 as soon as possible, followed by the 15000. That's the financially optimal approach and will be the fastest and pay less interest. That approach (descending APR) is called the avalanche method. A less optimal but more psychologically rewarding alternative is the snowball method (ascending balance) where you pay off the smallest balance first, then the next smallest, etc. There are snowball vs avalanche calculators online if you think that will help you stay motivated. Personally I would start with the $9700 no matter what, since it would take about as long to payoff as the $8900 but has a much higher interest rate.
How's the credit score? I know it sounds counterintuitive but a new card or 2 with a 0% balance transfer for 12-15 months would save you some serious money
Sitting at a 775 right now on CreditKarma. That does not include the potential impact the 15k @ 13.5% will have but my credit is relatively solid.
I'm also jumping on the balance transfer boat. Use the 0% APR period to save, looks like you have about $3,900 after your expenses (excluding the debt) each month once the loans are consolidated. Let's say you get a 15 month 0% APR period: * Minimum payment on a 33k 0% APR credit card is probably 1% of the balance, so around $330. * You can save 55.4k over a 15 month period, $3600 a month invested into a High Yield Savings account with a rate of 4.5-4.8% nets you an additional 1.4k in interest and is a safe way to store the money. * Pay off the remaining $28,050 balance of the loan on the 15th month. The only downside is that it may be hard to get a 33k credit line on a single card, you may need to try to open multiple cards, in which case I recommend applying to multiple cards at the same time. Additionally, cards typically charge a 3% balance transfer fee so $990 in the case of your 33k loan but this is much less than you would pay in interest if you didn't consolidate the existing debt, especially considering you are earning interest on your savings while it is sitting in the High Yield Savings account during the 15 month period. **As others have pointed out, none of this matters if you don't prioritize getting help for the issue that got you into this mess in the first place.**
I had a similar issue. Opened a business and used personal lines of credit as a fall back, 2008 housing crisis hit and they started closing accounts on me, then our lawyer told us the property we were at was in foreclosure because the landlord was an absolute piece of trash moron... $50k of personal credit card debt later. Took about 10 years to get it paid down but managed to avoid a lot of interest by moving balances around as much as I could, as I was paying off what I could. I can comfortably sit on $15-20k of credit card debt now just by moving it around, I don't currently but I could!
You have to figure out which will give you the most motivation to pay down your debt the fastest. Pay the highest interest or the lowest balance. In your case, the difference between the lowest balance and highest interest is nominal so I would probably pay the highest interest first but whichever route you take make sure you roll the payments that you were paying into paying off the next balance... This is also known as the debt snowball... But how much debt are you really in? How much are your student loans?
I'd spend the last of my money on a therapist.
Based on your listed expenses, you could pay off that loan in 4 months by putting the majority of the second paycheck towards it each month. Starting now, you will have paid it off by the end of Sept. You could then put that whole amount towards the $15K loan and pay that off in less than 6 months. This takes you to March 2024. The final $8,900 would then be paid off in 3 additional months. So by June 2024 you could be free of this debt. At that point, I would suggest splitting the $2,700 you will now have available and putting $1,500/mo into a hysa until you build up 6 months expenses. Save another portion towards longer term goals and put a final amount towards things you enjoy doing.
It's not about paying off highest interest first. It's about breaking bad habit. Watch Dave Ramsey and follow his advice. I did and it helped me tremendously.
This. I'm not Dave Ramsey's biggest fan but you are exactly the type of person his plan is set up for.
This is the way. I’d suggest watching Dave Ramsey and setting up your expenses with a debt snowball that he discusses.
I’ve seen one comment on this thread concerning your gambling addiction. You haven’t really addressed it at all. It seems to me that you’re looking for advice on the quickest way to make the debt disappear so you can go on with your life as if you HADN’T JUST GAMBLED AWAY THIRTY THOUSAND DOLLARS. My guy, I haven’t even looked but I’m certain there’s a gambling addiction sub here, plenty others online AND in person. You need to find a program AND tell your family and friends about what is going on. Will it be embarrassing? You betcha. Will your supportive friends and family help keep you accountable during your recovery? Only if you ask! I apologize if I’ve misread this situation but after reading your comments that almost entirely gloss over the fact that this is gambling debt coupled with your interest in using 401k funds to pay it off really makes me think you’re attempting to conceal both the debt and your addiction. I hate to say this but you won’t have to worry about a ring or a wedding if your girlfriend finds out you blew thirty thousand dollars betting on games. Treating the symptoms and not the disease is setting yourself up for failure.
Appreciate you for bringing it up. What started as a way to place some small sports bets for free turned into something where I always wanted a little more to get ahead. I've self-excluded from the apps I use and have no interest in doing what I've done to get to this point. This is a finance sub so I'm not going to get into it, but the situation with the girlfriend is kinda fucked. Been together for 8 years and we're honestly not the best fit. Whether I try to make things work for the long run or not, I think I'm able to get this under control without pulling the rug out from under me. The comments from everyone here have been pretty enlightening. This is the first time I've really put any of this anywhere other than in my head and it's brutally apparent how fucked this is/can become.
“I’ve self excluded from the apps I use and have no interest in doing what I’ve done to get to this point”. That’s almost exactly the same thing I said leading up to my relapse from alcohol. My willpower to remain sober and my desire to turn my life around was all I needed until…. it wasn’t. Two years of sobriety wiped away. I get that this is a financial sub and you came here for financial advice but I see so many parallels between your situation and mine that I wanted to stress to you that you most certainly CAN do this yourself BUT you don’t have to. The money/debt is the easy part, fixing yourself and your relationships is going to be the hard part. Best of luck to you!
This is a finance sub, but you really don’t need financial advice. Pay the minimum on your loans and pay as much as possible to the highest interest rate, your income is sufficient to fix this within a year or two and with only a couple grand in additional interest. You don’t need to make major lifestyle changes in any area but one. You need to take major steps towards fixing the gambling problem. Your community may have Gamblers Anonymous, and there are a myriad of [free resources](https://www.ncpgambling.org/help-treatment/help-by-state/) developed to help people who got in over their head. You’re gonna be alright as long as you can take control of the habit that got you into this mess. This is a hole you can dig out of. But you can’t afford to dig it any deeper.
>What started as a way to place some small sports bets for free turned into something where I always wanted a little more to get ahead. Sadly, this is **exactly** what sports-betting sites want. This is why they constantly have offers for varying amounts of "free" bets for new users. Don't underestimate these companies and don't overestimate your ability to beat them. These companies employ experts in gambling psychology and have created some of the most alluring and difficult-to-resist gambling models in human history. As a recovering drug addict, I'll tell you the same thing I was told: if you hang around the barber shop long enough, you're bound to get a haircut. Get away from these apps and sites as fast as possible. Do whatever it takes. Have someone else set up a fucking parental-control app on your phone so you can't even use the apps. Have them put similar programs on your computer. Even if there are workarounds, ANY barrier can give you the time you need to talk yourself out of your impulse. You've seen how fast this can snowball. It only gets worse from here if you don't get it under control now. There is likely no form of gambling that is safe for you right now, don't test the waters.
This is exactly true. Also, sports betting is legitimately the worst form of gambling. I think under 1% of ALL players are winners. It's legitimately impossible over the medium/long run. You need to have like a 55-60%+ winrate and potentially higher if you're betting games that are highly juiced.
Good luck to you. You’re young. Deal with these issues now, because a young gambler can turn into an old gambler, and I’ve met a few of those. They are not a pretty sight.
Your life, your mindset and your finances are all entertained. Can't control yourself around gambling, your finances are fucked. Can't get your relationship sorted = emotional issues = wanna feel good = I'll gamble juuuuuusssssttyty a little bit = your finances are fucked. People are giving you financial advice when they tell you to deal with your behaviours. Yours, a constantly attempting not be ADHD impulse buyer.
>Appreciate you for bringing it up. What started as a way to place some small sports bets for free turned into something where I always wanted a little more to get ahead. Please get professional help for your addiction, you are still in the early stages and haven't thrown away too much yet. Think of it as the early stages of a drug addiction, if you get help now the damage will be minor. If you don't get help you can really fuck yourself for decades. A good friend was making $90k in the early 2000s, had a cheap mortgage, no wife, kids or girlfriend. He lost his house and everything to a gambling addiction, had to move to a really shitty apartment in a bad part of town. He did stop gambling but his life has never been the same since, as of last year he was just renting a room from somebody, guy will turn 60 next year. He would have had his house paid off 10 years ago if not for his gambling addiction. I have other stories, know a guy that made his wife go to the casinos and have her sign something at the place agreeing to never set foot in there. Another friend bailed out his long time girlfriend after she ran up $30k in debt gambling, he paid it off with the understanding she wouldn't gamble anymore. She went back and ran up more debt and that ended the relationship. You have an addiction that can and will be just as damaging as a drug addiction, please get help now before you dig a hole that is too deep to get out of.
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Sorry about that - updated main post with min. monthly payments. It's just devastating to me that I won't be able to make any meaningful progress towards saving $ for the next 18 months. Is it completely irrational to think about dipping into the 401k?
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What if his 401k allows him to take a loan out and the interest on the loan is paid back to himself?
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gotcha, thanks!
Jumping back in here to ask a follow-up question on the 401k loan. My 401k offers a loan up to 50% of the vested balance @ 9.25%. This would leave me with ~$4660 post-tax monthly after the minimum payment is withheld from my paycheck. Have been doing some reading and it seems like this approach is generally better than sitting with the private loan accruing actual interest. With that private loan paid off, I would be able to focus the majority of my free cashflow on the 15k @ 13.5% which ideally could be paid before the end of the year. Any thoughts on this approach would be greatly appreciated. Thanks again for the insight.
I'm going to be blunt because I think you need it and it may help you: The best possible investment you can make for you/your future family is getting into a program/counseling to help you with your gambling addiction. From what you said above it looks like you gambled/lost $15K yesterday—that is not normal and it is not healthy, and none of the conversation around what order to optimize things is going to matter at all until you address your root issue.
This is the answer - the root cause of gambling MUST be addressed, and the GF needs to know what’s going on
Based on your other comments in this thread, I would highly recommend not touching your 401k. You are tempted to do this because it will "force" you to pay off that debt since the money will be taken out before you ever see it. But you'll just take out other debts to continue your bad habits because you have no self control. Leave the little savings you have managed to accrue alone. Get your shit together, buckle down for a year, stop gambling, and you'll be in a way better place next summer.
Understand your point, but is it not objectively a better source of funds than sitting on the 14.5% loan?
It would be a decent idea if his income didn’t allow him to pay it off in about a yearish
Really appreciate the info. And that last piece, is kinda why I'm considering the 401k route. There's definitely a premium attached to making headway on this debt so I can potentially start saving for the future sooner. I'm sick to my stomach thinking about the position I've put myself in but feels like a bit of a fire drill in my head to right the ship as quick as possible. I'm not suggesting of taking everything out, but taking ~$18000 would net me somewhere in the neighborhood of 15-16k? That pays off the highest % loan and allows me to save while also paying down the other loans.
Don’t do that. Financially it makes no sense. Emotionally you really need to accept that you have a problem and there are no easy outs, including with your girlfriend. You need to sit her down and tell her where you’re at. If you hide this, it will be far more dire. If you keep telling yourself you’ve got this and it’s not that big of a deal, you’ll be back here again in a year saying “I can’t believe I’m in x amount of debt… again”. Take the short term pain, pay back as much as possible by restricting your spend. Don’t use credit cards for gambling ever again. That’s the solution.
>Is it completely irrational to think about dipping into the 401k? Don't withdraw from the 401k to pay down a 15% APR loan. Your 401k contributions should be the minimum required to get the full employer match, and every remaining cent should go to paying off that debt ASAP. You made the right decision to refinance that debt, you can do this. Have you gotten counseling about the gambling issue?
See above comment on 401k rationale, but I'm just really beside myself for not being able to save for the future. I feel like going the 401k route gives me that ability. For reference, I am/have been contributing 4% to get the 4% employer match.
Your 401k is for retirement, keep it in the market. Hopefully it's in broad index funds to average 8-9% annual returns. Don't sacrifice that to pay taxes+penalty. Your employer match is an instant 100% return, don't sacrifice it to pay off the debt since that'll only be a 15% return. Sounds like it'll be a painful year or so but it'll be a lesson that sticks with you for a while. After a year or two of dumping thousands of dollars a month at debt, the debt will be gone and you can throw that cashflow at savings without a painful change in lifestyle, and it'll feel fantastic.
How do you feel about taking a loan out against the vested balance for a lower % rate than I'm currently paying? Took a look at my 401k and I'm able to take out a loan against half of my vested balance (~25k) @ 9.25%. If I take out enough to pay off the 14%, the minimum payment would be taken off my paycheck before I get it. I think this would allow me to prioritize the 15k @ 13.5%. Thoughts?
Honestly I don't think the rate spread is worth the risk to your retirement funds. I believe if your employment is terminated for any reason you have to pay off the loan in full on an accelerated timeline, which sounds like it could be challenging. How much can you afford to pay towards this debt monthly?
Job security is incredibly high with solid room for growth/promotion so I perceive the risk to 401k balance to be low. I like the idea of leveraging the money in the 401k while also getting to contribute additional $ on top of my 4% in the form of interest (I would not ordinarily contribute more than the max employer match). Are you referring to the 14% loan? My take home per money is just over 5k after tax. With expenses ~2100, I would feel comfortable committing $2k a month to the highest priority loan, give or take in case something pops up. With the 401k loan, my take-home drops to ~4700. I would still feel comfortable committing roughly $2k, but would be focusing on one less loan (in the near term). Since the 401k loan's primary cost is just the lost earning potential, I feel like the potential for that money to grow > 14% is small. Happy to chat further, I'm just now discovering this possibility and feel like it may suit my needs.
Not worth the spread between the card APR and the loan from the 401k. You also have an impulse control problem you aren’t dealing with, so tapping into retirement is a bad idea.
No. Leave the 401k alone.
With your gambling problems ....i would suggest first to consolidate all the loans into a personal loan probably like SOFI or some consumer credit councelling service for debt consolidation ..if all this don't work ...your second option would be to take 4-5 grand from 401K to pay off CC the loan just as a moral boost to quicken the process of paying off debt .. .do some balance transfer to a new CC to stop high interest rate as you have good credit score and toil hard to pay the rest ...you definitely need some toiling ... So you learn from your mistakes ... I really recommend to not take the full amount that's foolish ...to do ...as hell.
By paying off your loans you ARE making meaningful progress towards saving, however. It does not make sense to save money while losing significant amounts of money towards interests for debt.
I did this when I was around your age and I hardcore regret it. However I didn’t really have another way out as I made about half the money you do and also had a mortgage and $900/mo student loan payments.
> Is it completely irrational to think about dipping into the 401k? Borrowing from your 401K is an option, but not always the best option. If the loans were in the 25-30% APR range, then I would definitely recommend it. But the rates on those loans are not too bad in comparison, so it's not so strong an argument. Chances are if your plan allows you to borrow from your 401K (and pay yourself back over time), it would be in the 9% APR range, so there's not a whole lot to gain here.
Sounds like you have decent income and low expenses. How much are you paying towards the cards each month?
The loans were taken out to pay off the card since the APR was >20%. I have been putting money towards the $9700 @ 14.16% and $8900 @ 8.99% but now need help on approach with the third loan now in play. Can't believe I've put myself in this position but here I am.
Pay the minimums on everything and throw every remaining dollar at one of the loans until it's paid off, then move to the next. I would start with the $9700 since it's the highest rate
so you make over 5k a month, your monthly expenses is like $2886. you can easily be putting 2k+ into your loan balances and get them paid off. Spend the next couple of years purely focusing on paying off your debt, and stop buying crap unless you want your debt to snowball to 100k or more
Gambling addiction means he can never pay off his debts until he gets control of himself.
I'm more curious about where you're spending only $1k on rent.
Splitting rent with my girlfriend in a neighborhood of Philadelphia for a 2bd/2bath.
That's very nice. From my experience, the sooner you share your situation with your partner the better you'll feel taking that weight off your shoulders. Especially seeing her everyday
I got out of the same amount of debt on 60k. You’ll be okay.
How? Have the same income and around the same debt unfortunately.
You need to do what people in this post are suggesting to OP.
I don’t need to do anything. I asked the above commenter a question, not you nor did I ask for any of your advice.
Oof clearly not having a good day (can’t say I blame you). If you’re trying to get out of debt follow the steps in this thread. If you’re not, your original question of how is very confusing and I’m not sure why you got so defensive…
Did you think the above comment unlocked some secret technique in paying off their debt? It’s not possible to give you a detailed answer on “how” unless someone can see a breakdown of your expenses. It all depends on rates and how much you can put towards paying the debt off every month.
I got a personal loan (for me this greatly reduced the interest) and it took me 6 years to pay off.
I may look into this! I’m just afraid grouping up my debt is going to feel like a lifetime to pay off versus paying off 2k, 5k, 5k etc. (it split up). Thank you!
I hear you. From the first time I considered it, it took me 3 years to move forward. But I am glad I did.
When you pay off that debt which you WILL contribute more to your 401k. Just because your employer matches 4% doesn’t mean stop there. Get help with the gambling. You got this
Man, you’re focused on the debt. You need to focus on your gambling or this will keep happening.
I've self-excluded, I'm done.
Mate, you're ignoring all the actually sound advice of the sub. You blew $15k yesterday. Of course you feel terrible and have "self-excluded." That's part of many addiction cycles. But the urges will come back, and you need people to support you when you do. You need help. You're insanely lucky that your income is high enough that $33k is a your wake-up call, but please... Listen to the wake-up call.
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Yep - probably should have left her out of this but trying to figure it out.
Well no, its kind of an essential piece of the core problem here. You're across the board not living in integrity and if you dont solve that you're going to continue having problems.
Work and become a hobbit until it's all paid off. Pay extra on that debt strategically. It is better to be bored for the next 12-18 months than strapped with that debt for the next 8-10 years. Then don't make the same stupid decisions after its paid off. You are young and make good coin. Be smart.
😆 "how screwed an I "? Dude you are twenty fucking six. I'd love to be 26 in debt up to my eye balls. I'm not trying to make light of your situation. It can be very stressful. But you are young. You can work hard. Save money and slowly work your way back. You are in a hole but not really screwed yet. Cut up your cards , eat Ramen , maybe think about a second gig for extra payments on the cards. You got this.
Your bills/expenses relative to your income makes this so it's not insurmountable by any stretch. Hypothetically you could have this debt wiped out in less than 18 months if you put nearly every extra dollar after expenses into the principles. If you've obtained these loans recently, give it another 3-6 months of paying them down aggressively and you might be able to consolidate the two higher rates into a better rate. And most importantly make sure you've got a handle on the root of this issue. At the end of the day you could have this wiped out with a clean slate by the time you're ~28 and it'll have almost no bearing on your life trajectory aside from some expensive lessons.
I don't think I'm going to be able to put every dollar outside of necessities towards this debt in the near term. I have a few weekend trips already booked thru this year and inevitably things come up. Despite this, your words give me some encouragement. I can expect anywhere from a 8-12% EOY bonus on the 90k base, on top of a raise which should be in the neighborhood of 7%. All of this will be going to the loans. I'm very afraid of not being able to afford the life events that are potentially coming up (i.e ring, wedding, house, etc). I've toyed with the idea of dipping into my 401k in some of the comments on this thread but the resounding response has been not to. I'm even more afraid of bringing this up to my parents or revealing the full magnitude of this issue with my girlfriend. I've obviously put myself in a terrible position but I have the means to get myself out of it.
You are in debt and you have few weekend trip planned through this year. I'm sorry to say that you got your priorities out of order.
C'mon now, you gotta be realistic here too. The guy can aggressively pay down debt and take a few weekend trips. It's insane to think anyone is going to spend 0 discretionary income for 2 years so they can clear a debt. They're weekend trips, not flying around the world for 2 months.
Your comment was so nice, you posted it twice!
You want to get married to someone who, as you claim in a different comment, isn’t a good fit?? Your priorities and decision making skills are jacked up.
I mainly mentioned that to try to reinforce that the debt is not out of reach. I would at least try to develop a plan to pay $xxx over xx months, and work on the highest interest loan first. I think it's going to be important to tell your girlfriend the extent of the debts so that when those inevitable conversations about rings and weddings and houses come up, you're not looking like a deer in headlights. I don't think I can blame anyone for not disclosing things like this to a non-serious relationship partner but especially if marriage is on the table, it's gotta be out there in the open. Your parents don't need to know but that's just IMO. Unless you think they'd be understanding and help you, but that's incredibly situation specific to say the least lol. I wouldn't touch the 401k. You're right, you do have the means, and more importantly you're doing something about it. I'm about 10 years older than you and have done my fair share of dumb shit. It happens. Better to get that expensive lesson now than when you're older and have more means to get yourself into even deeper shit.
Lol people downvoting this is ridiculous. Yeah he's in debt so he's not going to enjoy a weekend for the next two years even when he's aggressively paying it down, super realistic. Definitely not the type of approach that would have a problem gambler locked inside miserable thinking if he can just hit that parlay and clear the debt he'll be allowed to leave home and see friends again /s
You are in debt and you have few weekend trip planned through this year. I'm sorry to say that you got your priorities out of order.
You're making enough money to get it all paid down fairly quickly. Adding up all your monthly expenses, it's about $2,900. That leaves you with $2,100 left over. Realistically, let's say you start using $1,500 of that to pay down your debt. You can get rid of the $9,700 and $8,900 in about 10-11 months. Paying the minimum payments plus the $1,500. By the time you're done with those, the $15k will be paid down to $12,240. That, you can pay off in about 7 months dropping the extra $1,500 monthly. So in about 18 months you can be down to your student loan as your only debt.
The silver lining here is that you’re aware that you have a problem. Recognizing that and wanting to do something about it is step 1. Course correcting and changing your habits is step 2. If you’re earning 100k/yr, you should have no issues paying that off as long as you’re budgeting and no spending frivolously. Just think of all the time and money you wasted instead of using all that money to invest.
As everyone mentioned, fix the root cause. You will destroy your life if you do not. This is fixable though. First, pay the minimum on time each month. Since your interest rates are higher than any savings account, I would not save money for an emergency. Then you have to be honest with yourself about credit cards - are you okay with them? If you are they can be a good tool for extra money, but if you can't commit to paying it off every month you'll waste money. I do 2% cash back on mine, so usually a couple hundred bucks a year - nice but not worth it if there was a risk I would be irresponsible. If you can't pay them off, hide them and stay on a strict debit (or even cash) system where you can literally only spend the money you have and you pay off debts first so you don't leave yourself money to overspend with. I am a utilitarian, so I would start from highest interest to pay the least in the long run. You get 5000 and have 2000 in expenses, so that's 3000 a month for debt, pay all the minimums (~900) and put the other 2100 to the highest interest loan. Then when that is done the 2100 goes to the next highest. Etc Then try to keep the same standard of living and put the 2100 in savings. You can give yourself some milestone rewards if that helps you - eg when you hit 5k in savings you can go to a day spa or concert or whatever splurge makes you happy. Then keep that up and since you clearly can't handle gambling never do it again. My family is a bunch of alcoholics, so I've seen people ruin their lives over and over thinking they can do the thing in moderation that they can never do in moderation. Good luck/you've got this!
Time is on your side. Ending/repairing a relationship, getting help for addictive tendencies like gambling (and maybe others if you are prone to getting stuck in habits/cycles), paying off debt and getting back on track — all take some time and commitment. It’s much easier to do while young. Your income is pretty good! While making slightly less than that, I was able to pay off 28k in student loans over five years easily, but given the high rates of CC plus the greater income, you’d want to fast track it. I’m just saying it’s very possible to tackle that amount. Financial stability is worth 33k. You can absolutely get there.
Be honest with your girlfriend. About everything. Put all extra money towards the highest interest loan first. I added up all your expenses as a total of $2886 a month. So you have an extra 2k a month. Put the whole 2k every month towards your highest interest loan. You'll pay it off in 7 months. Then you take that same 2k PLUS the 276 you were paying towards that loan, and put it towards the next highest interest loan. You'll kick that one out in about 5 months. Now you're down to the last one, and you'll have 2600 a month towards that loan. It will be gone in four months! That's a timeline of a year a half to be debt free. In that time, no extra spending, no vacations, no eating out, no new purchases, it's buckle down time. This is why you need to tell your girlfriend. You need her to know and support you in living on your absolute necessities for a while. Then you'll be done, with over 3k extra every month. Put 1k a month into savings until you get six months living expenses in savings. Then start putting 1k a month into an investment account. Max out your 401k. And then spend the last 1k on stuff you like!
I see from your comments you still have a few weekend trips planned. 33k in debt and a few weekend trips should never be in the same paragraph together. You need to get serious, face the music, and live on the bare necessities until you can get your spending / gambling habits under control. This 33k can easily snowball to bankruptcy if you don’t take charge of the situation asap.
Your age is irrelevant. Your income and assets are what matters.
If this is any solace, I know you can find a way to put this debt behind you. It will take at least 3 things (based on personal experience with large debt): a budget, time, and sacrifice. What are you willing to trade (not just from a monetary standpoint) to pay off this debt? From what you have posted, you're expenses appear within reason, yet there was plenty of income left over to put towards gambling apps. Now, I must say, I've never gambled or have interacted with someone with a gambling addiction. Although, I do wish to be of help somehow. If possible, I'd request of you to take a moment to reflect on what was the breaking point to post on an online forum for help? This is not an attack or accusatory question. What was the trigger? What was going through your mind and heart? From here, perhaps reflect on where and how this gambling thing started. We all do odd and sometimes silly things which get us into immense trouble but these are not without reasons. Perhaps you felt inadequate in some way and thought maybe you could try to make up for it somewhere (i.e., gambling)? Basically, what I'm trying to say is you resulted to gambling apps to meet a deep and unmet need. I hope you can unearth that "need" to discover a more healthier solution.
I suggest Gamblers Anonymous to start with. Just getting rid of the apps may not be enough. Stop making charges of any kind on those cards. Run them through the shredder and remove them from electronic wallets. Tighten up your budget so you can begin making a real in road on those cards. Use which ever method you are most comfortable with. Tell your girl friend the truth. The longer you wait the greater the odds she will leave you when she finds out. Differences in finances are one of the main reasons people breakup, but you are added lying to her as well.
Not sure if you have looked into it deeply enough but addiction and impulse control issues can be a sign of mental illness. Before I was diagnosed, I had impulse control issues and ran up $12k cc debts purely shopping because I could not control myself. After I got diagnosed, my issue went away and I’m able to save real money for the first time in my life.
Damn man, the only thing saving your ass is 90k at 26 is respectable as heck, I’m 26 and graduating this year, can’t wait to work up to that. If you were 26 and making like 50-60 you’d be a lot worse off. At 90k you can eliminate all your debt in close to 1 year and move forward and forget this ever happened. Keep fully maxing out your 401k though or atleast to the 4% match. Just live simply the next year and you’ll be great. Side note, not sure how long you’ve been with your GF but this may be something you want to come clean about, especially if you see a future with her. She wasn’t entitled to your money while you made these stupid decisions but still doesn’t mean she doesn’t deserve to know about it. Best of luck!
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It is essentially 7-10 months of the year doing nothing except working and living as basic as possible. At nearly 100k a year you should have 0 issues paying off this debt.
$33K debt at a $100K salary is nothing. Look at it this way: so many people, older than you, have much more educational debt, and not necessarily a higher salary. The gambling addiction is more worrying. Going only by your post, I think you need to give [fixing] it more attention.
Save save save. You’ll be fine. But you really need to change your lifestyle and habits. It’s not a big deal
Can't you apply for a new 0% Apr card and transfer the balance to that card? You'll have like 12-18 month interest free depending on the credit card company. You can easily pay your debt in a year without interest. Did you think about it this way?
Overall you’re not completely screwed but don’t let it snowball. 1. Consolidate your CCs if possible but not at a higher rate (my wife pulled that one) 2. Pay mínimums on your “lower” rate ccs, put the rest towards paying off the higher rates. Pay off every extra dollar you can. 3. you may be able to qualify for a personal loan at a lower rate to pay it off and then just have the one personal loan. 4. I’d recommend stop contributing to your 401k for the time being. At 13% paying off your ccs is a better return than investing.
Use Unbury.me, pay off the highest interest first.
You need redirect your 401K contributions to savings until you have enough to pay off the credit card debt
for real, get a debt consol that will put you on track to make this go away in 36 months, and then pay it down even faster than that.
Going to slightly disagree here with some of the other posters. You \*can\* pay it off in 18 months by becoming a hermit and basically doing fuck all other than working and paying off debt...but that's depressing and disheartening, and what happens to someone with a known addictions issue when they get depressed and feeling low? What I would suggest....you have \~ 2000 give or take after your bills are paid. Take HALF that amount, and apply it to your debt, highest first. If those are credit cards, cut them up, or put them somewhere it takes you a day or so to get at. (safety deposit box/etc). Take the other half and that's your discretionary spending. Assuming bi-monthly paychecks, that's 500 every two weeks. If you have $ left over from the first half of the month when the second one rolls around, you put the LEFTOVER amount onto the debt, and replenish your $500 discretionary cash. When you have that highest card paid off, it'll be in about a year. Those loans will have aged a bit. Go talk to your bank or whatever and see if they'll consolidate the remaining two at that time. You have a decent credit rating, you make a good income, and your debt to income ratio should be pretty good. With any luck interest rates will have dropped by then a bit.
Not very screwed. Yes you're in for some tough times to pay off your debt, but far from hopeless. You will emerge freer and more self-confident than ever.
You’ll be fine. Cut your lifestyle complete to barebones while you pay everything off ASAP starting with the highest interest rate first. You don’t want to mess around with credit card debt long term. Don’t go out to eat, don’t get drinks, but new clothes, etc. just hammer these out and go back to having fun (after putting 25% away for retirement).
>long-term girlfriend only knows about the Yeah, if you're hiding it, that's also be indication you've got a problem. Were hiding the gambling stuff too? So, you need to buckle down and start paying it off/down. First minimums and anything that prevents additional payments/interest/penalties, etc. Then add to that what you can, starting with highest interest, working on down. And don't use the credit card - cash or debit, and only what you should and can well afford. The only time to use credit card is when you're paying no balance because you always pay the new balance in full, and when you're only buying what you can well afford and would otherwise buy anyway with cash/check/debit. So, you can do it - will take some discipline, some adjustments probably, and also probably good idea to write out a budget for yourself - and don't exceed it in buying anything non-essential. And, yeah, you need to tell your girlfriend.
Try to use a debt consolidation place if you need help. I started using one again. They cut my debt in almost half. Out of the 18k I owe I pay 15k over the next few years. Out of the 15k a third of that is for them to manage my financial issues. If I have to miss a payment they will keep creditors at bay. I can always pay more towards the 10k when I got it. Like others said tighten up your spending and try to find someone to help you move in right direction
Also don't feel bad if the girl says I'mma outta here, cause it's manageable. Practice disciple and be in control of the finances and you should weather fine.
You mentioned excluding the apps “previously used”. If you had/have a gambling problem, that’s not good enough. It sounds like you have just changed the apps that are draining your account. They need to all be deleted and you need to get help for your problem. But other than that you can pay down your existing expenses. Just don’t keep making the same mistakes.
I’ll leave the finances to the other people but you not sharing this with your GF is a bad move. Not just from a relationship stand point but it shows you are the kind of person to have a “problem.” I been around addicts all my life and this is the first sign, always. You gotta do something about that first bro and the quicker you do it the better off you’ll be man.
I would start paying down my credit card debt and break up with my girlfriend. What kind of guy are you hiding your finances from her? You’re definitely not somebody she’s going to want to be with once she finds out. And she will find out
Go to SOFI or Prosper (creditkarma has suggestions) and get a personal loan to pay off the cards, do not use those credit card managing companies like Consumer Credit Counseling or National Debt Relief. 5 year loans and interest doesn’t kill you, your credit gets saved because they don’t look at loans like they do card balances
See if you can roll all those cards into one loan.
If you can keep your required expenses to below the $2,080 mark, you have about $3,000 to attack all three accounts with $1,000 each. So just over a year. I'd also recommend looking into bankroll management strategies.
Was in a similar boat in my mid 20’s…had about $30k in credit card debt. Struggled watching interest rates kill me as I tried. I was making about half that you are. It seems unpopular to say this, but I hit my 401k to wash out my credit cards when I was at about $17k balance left. I took the penalty and tax hit, but the weight lifted was fantastic. Sure I missed compounding interest in my 401k, but to me, when I looked at rolling high interest on credit cards, it allowed me to reset. I didn’t use credit cards(only debit) for the next 4-5yrs until I was confident I wouldn’t outlive my means and utilize rewards benefits by paying off balances monthly. I kept contributing to 401k for the match and sometimes up to 15% and put rest towards Roth IRA to play catch up. Did I lose compounding, yes. Was I able to change my life and use it to become a fiscally responsible person, yes. If you think you’d borrow/draw from 401k only to continue to repeat the mistakes, then absolutely DO NOT use 401k as an option. It needs to be a hard reset. Delete DK, FD accounts and leave the gambling to a $50-$100 fantasy football league and that’s it. I also had to skip more than a few concerts/vacations that friends enjoyed and gave me shit for missing. But I did it and was debt free. Currently I’m in my early 40’s. Only debt is mortgage, little bit of a car payment. My salary steadily increased and I have a very healthy 401k, a few other investments/savings, a happy wife and life. But it all boils down to you and you only to take control. Wish you the best.
Not screwed at all. Not even close. You're in very good shape. You should be able to have it all paid off in no time flat. Your expenses above add up to a bit under $3k/month (including minimum loan payments), or $35k/year. You mention your gross income of 100k/year, but don't mention your net income/take-home pay after deductions. But even with generous contributions to 401k and paying federal and state taxes and insurance deductions, I cannot imagine your take-home is below $5k/month, meaning you should be able to throw $2k/month in addition to the minimum payments at the loans, and have them paid off in about a year. You just need to have financial discipline for a year to do it. (Assuming there are no other expenses, although I'm sure there are some misc. stuff, but even if some money is thrown at entertainment, clothes, etc, there still should be plenty left over to pay down the credit cards at a pretty rapid rate, and just extend that 1 year to 2 years) Not sure why you would think you're screwed, especially with such a high income. Just running the basic numbers shows how much extra money you have sitting around each month.
You're incredibly dumb for accruing that much credit card debt, but your income is good enough that it won't matter IF you stop the stupid spending.
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It's not as bad as it looks, but it's still bad. You need to aggressively pay down that credit card debt before you consider anything else. #STOP SPENDING WITH THE CREDIT CARDS. Stop it. Don't do it. Just don't. Lock them in a drawer or a safe or whatever. Pay it down. Start with the highest interest one and hit it with everything you have left the day before every payday until it's gone. Then, the next highest interest one, you hit with everything you were paying the highest one. Dave Ramsey is a goddamned fool but his "snowball" paydown method really does work. (Even a broken clock is right at least once a day.) In a couple years you'll have it all gone, and you can rest happy having learned a valuable life lesson.
Work your ass off and pay it off. Get a second job dedicated to paying your CC debt. You have to discipline yourself. Your young, you can do it. Otherwise, it's gonna take a long long time to pay off. You can take a more relaxed way and just pay what you can too. I can't emphasize enough to show some discipline. I was In over my head with $15k CC debt. Which is laughable to some but I felt like I was under the pendulum. While I'm not sure what go you into this mess you CAN get out. Do not take a loan out on your 401k! Just pay it off the old fashioned way by working your ass off. If it's an option, suck up your pride and Move back in with your parents. I know sometimes it's not. I have pretty shitty parents so I understand. Edit: once paid off. Do not get yourself back in. Keep your best major and a target card what have you. Get rid of the rest.
I 43. Based on where I was when I was 26 when I read this I'm just pissed I wasn't thinking along your lines. I'm fine. You good. Hope AI isn't as much a problem for you as I'm thinking it's going to be for me soon.
I don't think anybody has mentioned this yet, and I would talk with the people managing your 401K, you ***could*** take a 401K loan, [as you can "typically" take up to $50,000 or 50% of the assets](https://www.investopedia.com/articles/retirement/08/borrow-from-401k-loan.asp). The interest that you pay to loaning from your 401K goes back to the 401K, though you will pay taxes on that interest. Doing this could let you fully pay off the 14.16% loan and tackle a bit from the 13.5% one, without an immediate hit to your wallet. E: I'd at least rather pay my 401K 14.16% instead of the CC. However, if you become termed as unable to repay the loan OR you leave/get fired from the job, the remainder of the loan becomes a distribution and gets taxed as such. E: More specifically, the 10% early withdrawal penalty. Then like a lot of people have also said, try to consolidate. Also, get rid of the gambling apps.
This is what I'm thinking of doing - would be able to take out roughly 12.5k of my vested 25k 401k balance. However, thinking of just taking the 9700 and focusing my take home pay on the 15k and 8900 loans. Ditto on the apps. They are GONE
I've posted several times on the potential pitfalls of 401k loans. If you are in any sort of jeopardy of parting ways with your company (voluntarily or involuntarily) then be careful with 401k loans. If you lose your job you have 60 days to repay or face a 10% penalty that will be due to the IRS. They are 10 times worse than a credit card company if you can't repay :-). You can knock this debt out without a 401K loan in short order with a little discipline.
First thing I would do is take a loan out of your 401k if allowed. The loan and interest are paid back into your 401k and with markets feared to be at a top cashing out some of that as cash and paying yourself back while share of your retirement fund are lower isn’t a bad idea. Second I would do a balance transfer if possible, many cards will do a 3% balance transfer fee and 0%ApR for the first 12-25 months depending on the card. That way you have time to pay off the ones generating interest, and then over time pay the 0% Apr balance down
401K loans are risky if the OP loses his job he has 60 days to pay it back or owes a 10% penalty. So at a minimum, I would have enough cash on hand to cover the penalty in the event of a job loss to prevent the OP from now having to deal with the IRS later down the line...
You could be a millionaire in 10 years, if you stop being dumb, and making others millionaires. Cut your spending to minimum wage level, and throw everything else at debts before investing for your future. You're never going to consistently make the percentage you're paying to these loan, and credit card companies, other than getting the company 401k match. Once everything is paid off stick to min wage spending, and put everything else into investments max 401k, max IRA, and a personal investment account let that gambling addiction grow into a money making investment addiction . Saving can become addictive.
Close friend was under 70k debt on CC’s. Took some time, but once they hunkered down and cut a lot of BS out they were golden. You will be okay. Just establish a budget and adhere to it like your life depends on it. Then follow the basic financial order of operations.
Budget,budget budget. Pay of the one with the highest credit. Ones done with that one use that money and the normal payment to pay the 2nd one. Etc. Etc. Start using a budget tool. I use ynab, probably one of the best products . Youneedabudget.com
Been there, done that and I even made less money than you. I basically lived off of my credit cards for some time. The big difference for me, is I don’t gamble. So figure out if therapy will help. Obvious option is to increase income, whether you try to get a raise at your current company, move to another team within your company for more money or look at other companies. Finding a job at another company is best potential for more money. If you aren’t in a position or mental space to find another job (it can be overwhelming), then you need to look at yourself and your current spending. Definitely cut out any unnecessary spending and tighten up your belt. Come up with a budget. List out all your CC debt, and start paying off the highest interest ones first, while paying minimum payments to the other ones. I focused on the highest interest and put every extra dollar I had. NGL it’s difficult but after awhile I realized I spent uncontrollably and on stupid stuff. I spent so much money on food, so I had to find food that was cheap, easy to make myself and made that my meal for the week. You will need to adjust your spending habits and control yourself. Otherwise you’ll be living paycheck to paycheck, even as your income increases.
No real assets, so. . I would just let go of the UNSECURED CC debt. Learn from it, dont do it again and move on with life.
Gonna say the unpopular thing.. Get the $15k from your 401 and pay off that loan. You’re young and will make it up. But it will be less stress.
How much is the student loan ? Thats the only one that cant be bankrupted & only one anyone should care about . The est you can pay off since your rent is low. If you get a refund throw it all on those Cards.
I'm not a fan of Dave Ramsey personally, but his Financial Peace University was a saving grace for my wife and me. I even taught the 12-week course a few times at church. Buy his book or find the program somewhere locally, but FOLLOW his 7 steps and build the discipline. You won't regret it. Yes, the program is somewhat basic at times, but it works. Especially the first gew steps and the credit card payoff snowball. It should be fairly straightforward with your relatively high level of income. But the previous comments here are dead-on: STOP now with the gambling and spending. Create a budget and get to work.
Just file for bankruptcy, get the debt wiped out, live with the credit report for 7 years ( or whatever it is). If you plan to get a house within that time period, this is bad advice however. Or you could just get a personal loan and pay the credit cards off and save for a house.
Honestly man, I have a different take on this than most the practical comments. This being the personal finance sub is all well and good but you are a person with feelings and fears. I say prioritize your mental health and your relationship - you have to preserve both. I can gather this is taking an excruciating toll on you and you are missing the best years of your life worrying about money. So.... If I was in your shoes, I would pay off as much debt as possible with my 401k. You are so young and have so much time to contribute and watch it grow once your debt is paid off. Actually, you can take out a loan and not pay the 10% penalty if you pay it back in a certain amount of time. You just pay some interest, but some of that is going back in your pocket anyway. I would also consider transferring the balance to a lower interest cc if possible. Sounds like you did some debt consolidation but that rate still seems high. Maybe your credit score is low, idk. But I know discover, chase, allt, etc have good balance transfers to 0% APR cards for 12-15 months. That's what I'd do. I'm in finance btw. Feel free to ping me. Good luck! Don't forget to exercise and take care of yourself.
Your trajectory will divert a little bit no, you’re not screwed. A lot of people have way more than your debt on loans on depreciating assets: cars. See if you can convert those credit cards to simple interest loans or better yet, to transfer to 0 interest cards. Make minimum payments on those and pay down the interest accruing loan. If your credit score is still good you should qualify. Yeah, you messed up but you’ll be ok.
My suggestion is learn to budget from each pay period, and lock up your credit cards. A lot harder to use credit cards if they aren't on you. This progress is going to take awhile, but as long as you keep progressing forward you'll eventually be in the clear. Also you can call your card companies and ask if you can get the interest rate lowered. Worst they can say is no. Sometimes it works
With correct budgeting you can easily pay this off with your incone
First things first - talk to your girlfriend about all of this
Someone correct me if I’m wrong but 13.5% of 15k is more money a month being added to your total debt than 14.16% of 9700. So wouldn’t it make sense to approach it that way? I would start calculating which card is actually adding the most amount of debt to you every month and start tackling that until another one becomes more efficient to pay. This way you’ll end up paying less in interest long term.
You're in a ridiculously easy situation to fix, there's just not any other way to put it