Getting my Financial Life in Order- Advice, Credit Card Help (student loan, insurance)
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Any advice on financial wellness for a 28 year old. Some background.
I'm 28, just bought a home by myself this year. $1700 a month
Have 19k in student debt with the government $300 a month
96k student debt on my parents house- they took out a second mortgage and I pay it $500 a month
13k in credit card debt- half for school, half for my new house buying stuff, maxed out my one card
I make about 50k a year salary job, on average $3400 a month
Car loan and insurance $300 a month
Gas and food is about $150 a month
I want to get my debt down. I live paycheck to paycheck, sometimes beyond my means. I want to get rid of the credit card debt soon.
I want to have a safety backup fund for my house
I have no retirement, I can't afford it. I need good financial advice.
Make room for a rent-paying housemate. Get a second part time job. Put nose to the grindstone and slog it out until the cc and student loan debts are gone. Sell a lot of the non-essential c&%* you've filled up the house with, put the proceeds toward your debt, and don't replace it. Don't put any routine expenses (groceries, utilities) on the cards...make a budget and stick to it, no excuses. If necessary, make other payment arrangements with vendors to avoid using a credit card and incurring more interest; its killing you. Money you save on expenses because of the housemate also goes toward your debts. Once you get the spending and debt under control start working on savings (you'll need some because of the house responsibility...maintenance, insurance, property tax, repairs) and retirement. Your days of being a fashionista are over.
Last edited by Parnassia; 11-24-2020 at 07:26 AM..
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Check out the FICO forum for some of the best advice you could ever want. Be prepared to be brutally honest with yourself and provide a ton of data points. Good luck to you.
I am surprised that a bank would give you a mortgage when your payment is half of your salary. The truth is, you bought much more house than you can afford. You really cannot afford to pay half of your salary for a mortgage.
I agree with the suggestion to get a roommate. You really need two roommates. Or you need to double your salary.
If your credit card rate is high, try to move that $13k credit card debt to a 0% balance transfer credit card. Usually they have something like a one-time 3% transfer fee that they will add to your balance. Pay as much as you can every month to it, then when the time is up, transfer the remaining balance to another 0% credit card via balance transfer. Just don't charge anything else. Put the cards away.
Someone suggested to follow Dave Ramsey's plan. I'm not a fan of his but agree that in your case his plan may be helpful. You can watch him free on YouTube. You can also watch Gail Vaz-Oxlade's shows on YouTube called "'Til Debt Do Us Part" and "Princess" to get you in the right frame of mind to clean up your finances.
You have to get your spending under control and you have to either sell or donate some stuff. Get the crap out of your house so that you can make room for the good stuff, like a partner. Good luck.
Any advice on financial wellness for a 28 year old. Some background.
I'm 28, just bought a home by myself this year. $1700 a month
Have 19k in student debt with the government $300 a month
96k student debt on my parents house- they took out a second mortgage and I pay it $500 a month
13k in credit card debt- half for school, half for my new house buying stuff, maxed out my one card
I make about 50k a year salary job, on average $3400 a month
Car loan and insurance $300 a month
Gas and food is about $150 a month
I want to get my debt down. I live paycheck to paycheck, sometimes beyond my means. I want to get rid of the credit card debt soon.
I want to have a safety backup fund for my house
I have no retirement, I can't afford it. I need good financial advice.
Quote:
Originally Posted by FreshTomato
I am surprised that a bank would give you a mortgage when your payment is half of your salary. The truth is, you bought much more house than you can afford. You really cannot afford to pay half of your salary for a mortgage.
I was thinking exactly this ^^^. Income of $50,000/year = $4,167/month gross so $1,700/month is 41% DTI even WITHOUT all your other debt!! I expect you were able to "hide" the $96k student loan debt that you are repaying your parents (and good for you for repaying them), but even without that $500/month, you have $600 in other monthly debt, making your DTI ratio of "all debt" >51%. How were you approved for a mortgage?!! (And how did you come up with the down payment?!)
When I was your age I would have HATED the idea of a roommate, but as others have said, that is likely your best bet for awhile. But you'll have to STOP BUYING CRAP that has filled up all your rooms & closets (from your other thread). Until you get your spending under control, you'll never get out of debt.
When you get equity in the home, refinance it and pay off the credit cards. Then rip all the cards up and never use them again. Get a visa debit card attached to your checking account so you always are spending only money you have, not future income. With the interest saved on the cards save up some money. Create a nest egg to cover future emergencies (eg. if you need a new refrigerator or water heater or home repair). About $15K in a savings account should easily cover almost any emergency expenses. At $500 a month you will be paying off your parents' second mortgage for decades. Check to see if refinancing at a lower rate would pay it off faster. You want the right things but need to work at it and be patient as well. It's not complicated, just basic arithmetic and discipline.
Quote:
Originally Posted by Mandi9
Any advice on financial wellness for a 28 year old. Some background.
I'm 28, just bought a home by myself this year. $1700 a month
Have 19k in student debt with the government $300 a month
96k student debt on my parents house- they took out a second mortgage and I pay it $500 a month
13k in credit card debt- half for school, half for my new house buying stuff, maxed out my one card
I make about 50k a year salary job, on average $3400 a month
Car loan and insurance $300 a month
Gas and food is about $150 a month
I want to get my debt down. I live paycheck to paycheck, sometimes beyond my means. I want to get rid of the credit card debt soon.
I want to have a safety backup fund for my house
I have no retirement, I can't afford it. I need good financial advice.
Last edited by bobspez; 11-24-2020 at 01:05 PM..
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