Guys, I really need some help and advice.

  • Greygull

    Posts: 282

    Aug 01, 2010 3:36 AM GMT
    So, as some of you know, I am finally starting to get my act together. however as of today I just found out just how far things have gotten during the past two years, I may have been breathing sleeping and eating but i certainly haven't been living. So here's the down and dirty

    Credit score: 508 ( cry)
    Debt:
    Student Loans: 19,998
    8,876
    Bills and such: 1260.11

    Budget:
    Rent : 575
    Water 30
    Electric 125
    Phone 89.99
    Insurance 99
    Food; ? ~ 200 or so.
    Gas 80

    Okay and if I work 40/hrs a week at my new job im bringing home 1600/mo

    Im starting to get my body together. How do I fix my financial health? What would you guys do?
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    Aug 01, 2010 3:46 AM GMT
    pick up a part time job..... cut your bill to the bone, be as frugal as possible, see if you can negotiate lower interest rates or longer terms to pay on bills....are you on "budget, for utilities....qualify for public assistance for food stamps or utility assistance from the company or the government, get room mates to share expenses.... you are ina tough spot...good luck!
  • HndsmKansan

    Posts: 16311

    Aug 01, 2010 3:51 AM GMT
    To begin with you need to decide how seriously you want to deal with this issue.
    With a credit score of 508, you will find it a hinderance to getting a car, buying a home (forget it)... or even finding another place to live. You need to start paying your bills on time NOW.

    You must also develop a plan to save for your future.. if not you will sacrifice your future financial successes (basically rob yourself) by not sacrificing now. You need to inquire about your employers retirement plan (and if matched by the employer, you should fund yours at a low level at least). Also consider a nominal contribution to a Roth IRA.

    How do you do this?

    You get a second job. A friend of mine (and he is here on RJ, just not on much),
    took his credit from "trash level" (below 600) to 800...(he's ahead of me).. gone from having big debts to having $125,000 in savings... and a nice bit of equity in his home.

    Now you might say... a second job, how the fu*& can I do that? Get a second job and work 10-15 hours a week, maybe some evenings and a weekend day.
    If you are really going to change your situation... you must apply yourself and quickly. You must pay on time.. that means your schools loans, etc.
    Don't forsake your future.. take action now.
  • Greygull

    Posts: 282

    Aug 01, 2010 4:02 AM GMT
    Okaie dokie. Will a part time job be enough?
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    Aug 01, 2010 4:13 AM GMT
    If you're surviving - even barely - forget the roommate idea. The moment you get used to the money is when they move out.

    The 2nd job idea is good in theory, but make sure the lack of sleep and/or scheduling won't affect your primary job.

    I'm not sure if it's offered in your area, but there are cell phone companies that charge around 30-50/mo with unlimited minutes, text, and web, with no contracts. That would help a little bit if it's available.
  • Greygull

    Posts: 282

    Aug 01, 2010 4:24 AM GMT
    Thansk for teh advice guys. I'm getting an unexpected windfall of about 1500 dollars shortly that I'm going to put towards those old bills. as far as my loans go which should I pay off first?
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    Aug 01, 2010 4:55 AM GMT
    Greygull saidThansk for teh advice guys. I'm getting an unexpected windfall of about 1500 dollars shortly that I'm going to put towards those old bills. as far as my loans go which should I pay off first?
    Save it, and keep living cheap.
    Then if something fucks up (like your car) you'll have the money to cover it.
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    Aug 01, 2010 5:30 AM GMT
    You're only making $1,600 a month at your new job? and you're a college graduate?

    I make around $2,500 a month after taxes and I never went to college. I'd say get a better job? What did you major in? Look to do something based on your major?

  • Greygull

    Posts: 282

    Aug 01, 2010 7:26 AM GMT
    Yup I have my college degree and am working in my field, and also have nearly 10 years of experience.
  • cromi

    Posts: 489

    Aug 01, 2010 12:43 PM GMT
    508! SUZY ORMANN'S NOT GONNA BE HAPPY WITH THAT ONE

    figure out what you need and resist not to buy the wants...
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    Aug 01, 2010 12:54 PM GMT
    SickWorld saidYou're only making $1,600 a month at your new job? and you're a college graduate?

    I make around $2,500 a month after taxes and I never went to college. I'd say get a better job? What did you major in? Look to do something based on your major?

    This thread was not made to bash his income. I make more than you and I dropped college after 2.5 years...not to mention I'm still "intro level" in my career field, so making upwards of $200K+/yr is completely feasible eventually. Without further college! Not to mention I own my own business on top of that, so my income is flexible upwards of more than you'll make in your lifetime...per year. So stop bashing people with your measly 2500/mo. That is not worthy of bragging rights.

    Plus you have no idea what his career field is like, what the demand is, what the going pay grades are, or any other factors in his field.
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    Aug 01, 2010 1:11 PM GMT
    35% of credit score is whether you pay ON TIME
    http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx
    You always want to pay down higher rate credit first.
    You only want to invest in a Roth IRA after you are out of credit card debt and have some savings.

    The second job makes sense to the extent that you can pay off debt faster, but are you sure you are only spending $200 a month on food? (seems especially low to me) Often, incidentals like food costs are overlooked and are the reason debt is present. People make late payments when they are spending too much and have to wait for "next paycheck," so I can assume that your budget is not a full budget, it's weak, and could use some fine tuning --what I mean by this is that it seems kind of thrown together.

    Do you get your hair cut?
    Use soap?
    shampoo?
    toothpaste?
    toothbrush?
    light bulbs?
    TP?
    laundry detergent?
    drive? oil change?
    clothing?
    entertainment?

    ACCOUNT for these things in your budget! (You will be happy later)
    You are not buying all these things and eating with $200 per month, no way.

    Take a look at your bank and credit card statements. Why? If you are taking home $1,600 and your bills are $1,200 there is no reason that you should be in any debt except the student loans. The roadmap to your spending is in those statements.

    Look into it and change what you can.

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    Aug 01, 2010 1:19 PM GMT
    I raised my credit score by paying bills on time, and I did that by setting them up in my bank's online payment system. It's easy, it's (usually) free, and it turns you into one of those people who pays on time.
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    Aug 01, 2010 1:28 PM GMT
    Greygull saidYup I have my college degree and am working in my field, and also have nearly 10 years of experience.


    You're 22, what have you been doing since 12? Any what did you get a degree in?
  • HndsmKansan

    Posts: 16311

    Aug 01, 2010 1:57 PM GMT
    [quote][cite]Greygull said[/cite]Thansk for teh advice guys. I'm getting an unexpected windfall of about 1500 dollars shortly that I'm going to put towards those old bills. as far as my loans go which should I pay off first?[/quote


    I think you left off the $8.826 and what that debt was.... I assume credit cards.. if so, apply it there. Your interest rate is probably more than your student loan rate.
    If you do DON'T DON'T, DON'T charge it back up!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    icon_evil.gif
  • HndsmKansan

    Posts: 16311

    Aug 01, 2010 2:01 PM GMT
    Greygull saidThansk for teh advice guys. I'm getting an unexpected windfall of about 1500 dollars shortly that I'm going to put towards those old bills. as far as my loans go which should I pay off first?


    If the $8,826 is another student loan, I would apply the majority of it toward the loas putting you ahead of your payments, but leave $500.00 and use it as a windfall in your savings account in case you have a bad month and need it for paying bills.
    SAVINGS TIME!
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    Aug 01, 2010 3:05 PM GMT
    The best thing to do will be get help of a financial planner, there are a lot of companies that can help you get a plan set up for paying of your student loan in manageable installments.
    But since you make $1600, your basic monthly income needs to go up. Get a good part time job, but use that money as savings and do not touch it. keep living in the same 1600 you make today.
    The easiest way to get rid of debt is make more than what you need.
  • calibro

    Posts: 8888

    Aug 01, 2010 3:22 PM GMT
    xuaerb said
    Greygull saidYup I have my college degree and am working in my field, and also have nearly 10 years of experience.


    You're 22, what have you been doing since 12? Any what did you get a degree in?


    grey is a pastry chef and he started working in bakeries when he was 14. nearly 10 years, not 10
  • calibro

    Posts: 8888

    Aug 01, 2010 3:37 PM GMT
    so you're basically bringing in 350 a month and you have almost 30,000 in debt, which means you'd be paying them off for about 9 years at this rate and that's if all your money went into it.

    the first problem here is your job. as a fellow pastry chef, i get your pain, but there isn't money in the field unless you have your own restaurant and that's not a feasible option. i'm not saying leave it, but understand your limitations with it.

    second, your expenses are too high and i hate how everyone here is suggesting another job first. this is like putting a band-aid on cancer. you need to stop the problem, not treat the injury. could you get a cheaper phone? could you take on a roommate? i live with three other people not by choice but because i understand my rent and utilities come out to around 600 dollars. your cost of living is way too high. there is no reason why you're paying double my living when our rents are only a hundred dollars different.

    i also work two jobs between teaching at the university and being the head baker at the french bakery in town. i don't make great money at either, but between the two i am bringing in over 2,000 a month. that means i earn around 1,500 a month. with 1,500 a month you can put a grand toward your debt and still have 500 dollars to yourself to use or save as you see fit. in that instance you'll pay off your loan in 3 years.

    in conclusion, your cost of living is consuming too much of your income and your income can be higher. i know it sucks to work 60-80 hours a week, but you need to understand it is so important to bite the bullet and do this now! you don't want this to follow you and this will ruin things for you in the future. the next few years might be tough because you'll always be working and living a lifestyle you don't want, but hard work and proper management of your funds will pay off. trust me.
  • calibro

    Posts: 8888

    Aug 01, 2010 3:46 PM GMT
    SickWorld saidYou're only making $1,600 a month at your new job? and you're a college graduate?

    I make around $2,500 a month after taxes and I never went to college. I'd say get a better job? What did you major in? Look to do something based on your major?



    he's a pastry chef. chefs never get paid much. and frankly, i would be loathe to chew someone out for working because, statistically, that 2,500 a month is probably going to stay the same for the rest of your life without a college degree.
  • CuriousJockAZ

    Posts: 19129

    Aug 01, 2010 3:53 PM GMT
    A 2nd job is the key to getting your finances back on track. The best thing about a 2nd job, besides the extra income, is that you have little time to spend the money you make. I worked 2 jobs for years after college trying to get out of debt. It took a while, but I finally got debt free.
  • ChicagoD

    Posts: 11

    Aug 01, 2010 4:01 PM GMT
    Check out DaveRamsey.com - he's got some great advice and I used his "system" to work my way out of debt before. The basics, like budgeting forms, "The Baby Steps", and chat forums are free on his site. You can buy his book, but most likely there is a copy at the local library you could read for free. Also there are podcasts of his shows available for free if you are the kind of person who likes to here feedback from others regarding the plans they have created.

    Look under the tools section for the info you need to get started. There is a religious tone to the site/show/book - but it's not overwhelming and there is no push for you to convert or believe or anything like that... I know it really works if you are dedicated to the plan you create.

    Best of luck!! http://www.daveramsey.com/new/baby-steps/
  • ChicagoD

    Posts: 11

    Aug 01, 2010 4:02 PM GMT
    P.S. A second job is probably going to be the "shovel" you need to dig yourself out of this one...you just don't have enough income..
  • calibro

    Posts: 8888

    Aug 01, 2010 4:15 PM GMT
    icon_rolleyes.gif

    will people stop saying get a second job! yes, a second is great, but did you look at his expenses? sheesh! no wonder so many people in this country are in debt and have no savings. didn't your parents teach you about your spending habits? you can't solve his problem just by throwing money at it (if it's not nearly enough money to fix the damage). the problem to begin with is he has spent too much and is continuing to spend too much. you can't spend beyond your means and none of you seem to be mentioning that it's crazy for a guy his age to be spending 1,250 dollars a month on a 1,600 dollars a month salary! are you all so addicted to possessions and technology that you don't see why it's ridiculous that someone his age with his income has a 90 dollar phone bill when you can get one for 30 a month? i used think that this stuff was basic thinking but i guess how to manage your income is a bit more complex than i thought.... this is why congress doesn't work.... why am i sounding like a republican? i need a drink... icon_sad.gif
  • ChicagoD

    Posts: 11

    Aug 01, 2010 4:29 PM GMT
    calibro saidicon_rolleyes.gif

    will people stop saying get a second job! yes, a second is great, but did you look at his expenses? sheesh! no wonder so many people in this country are in debt and have no savings. didn't your parents teach you about your spending habits? you can't solve his problem just by throwing money at it (if it's not nearly enough money to fix the damage). the problem to begin with is he has spent too much and is continuing to spend too much. you can't spend beyond your means and none of you seem to be mentioning that it's crazy for a guy his age to be spending 1,250 dollars a month on a 1,600 dollars a month salary! are you all so addicted to possessions and technology that you don't see why it's ridiculous that some his age with his income has a 90 dollar phone bill when you can get one for 30 a month? this is why congress doesn't work.... why am i sounding like a republican? i need a drink... icon_sad.gif
    '

    Based the itemized listing provided - his bills appear to be fixed - i don't see much, if any, frivolous spending included. Maybe this was not the case before - but his budget would indicate he can barely make the payments on this current obligations. The 2nd job would help in two ways: 1) more income to "throw" at his current bills to decrease balances. 2) would limit time and energy for going out, shopping, etc - if these are contributing factors. It may make the lifestyle transition more bearable.

    Since I certainly don't know all of the details of his specific situation, I would recommend a financial counselor. Perhaps his alma mater offers or knows of a place with free financial counseling in his area or he can visit the site I mentioned before - daveramsey.com or any other reputable site and see who/what they recommend.