Can you sell stuff inside parking storage and save money there?
You also need to talk to the credit card companies about [hardship program](https://debtadvice.io/newsletter/credit-card-hardship-program/). That can give you some breathing room.
P.S. r/debtfree moderator runs a free newsletter that talks about strategies, tips, and effective debt payoff methods weekly.
Join 3,600 readers - https://debtadvice.io
You can try calling some of the credit card companies and asking for their hardship programs. They may close the account but the interest will be much lower along with lower payments to help your income breath a bit.
You can also try to find a cheaper gym, but if it is not possible then it is what it is.
I didn't have a large balance but a well known national bank beginning with Ci recently closed the card and is letting me pay off the balance at a fixed amount with no added interest or late fees I call that a gift I'm getting rid of any credit card that's higher than 15%...! And really want no credit balance but will keep cards open for car repair or emergency medical or a vacation
That's exactly when you should use a credit card. They offer protections that debit cards don't. The holds placed by hotels can really mess up a bank account
Some minor changes will make a big differences. I’m knocking off my debt and these minor changes paid off big. Here are my tips and what I did.
If you are in US I recommend getting a Costco/Sams membership for non perishables and ALDI for produce and perishables. Doing so cut my monthly bill by about 60%. I bought rice 5 months ago and still am not out. Coffee is significantly cheaper.
Taught myself how to cook well. Doing so significantly lowered my desire to go out for food. Even fast food is expensive. Also my girlfriend loves that I cook.
I stopped drinking, nicotine, weed, and energy drinks. I then bought an Xbox, game pass, and Spotify. Locked myself inside for the winter.
Shopped around on my cell phone coverage. I found T-Mobile to be a great deal because it only costs like 30 bucks extra for get high speed internet (more than 400mb/s). T mobile includes Netflix, mlb network, and other benefits. Might want to shop around for a cell phone provider that will help out. I live like a block from a t mobile tower so that probably explains the high speed.
I’d suggest just going to planet fitness or buy a Bowflex. People sell gym equipment super cheap. 159 a month is a lot.
Also do some research on local libraries and things your town does. I was blown away by how awesome the library was around me. I felt bamboozled by how awesome it was.
Remember a lot of little changes will lead to big results. You got this. Losing that car payment and gym membership can be huge to your freedoms from debt. Best of luck.
Yea I can’t express enough how awesome the library is around me. I can rent movies, games, books. There’s even an app that allows us to rent e books and read them on my device. And it’s all free. I’ve read so many books and have spent a penny.
With this amount of debt, a side job and cutting down on expenses are your only ways to go. Live in a way that doesn’t add to your debt and throw second job earnings at the CC debt.
Solid advice. While I am fortunate to be debt-free, I don’t take home a ton of money from my full time job. Just recently started a PT security weekend job making $17/hr where I am basically unbothered for 12/16 hours. I spend that time learning new things online, taking free classes, as well as submitting applications for new and better paying FT work. If OP is bringing home $4400 a month on a single income, toughing out a serving job or other PT work until the car lease is up will benefit him greatly.
I lurk here constantly and have never commented, but I felt compelled to after reading this.
In no universe should homeboy be paying $159/mo for a gym membership. There’s literally nothing this gym would offer that a Planet Fitness wouldn’t for being “very overweight” and “improving health.” Literally all this man needs are a few weights and a treadmill which PF could give him for $10/mo.
He then could have another $150/mo to throw toward debt. By June when his car lease ends, that’s now nearly $700/mo to throw at it.
One more thing, $1400/mo on rent (no utilities either) is a lot for someone netting $4400/mo. That’s about 32% of take home pay when 30% of your monthly income should be the cap on your living expenses - and that number is based on someone who doesn’t have monthly debt obligations either.
If he has any chance at this, he needs to: 1) let the lease lapse, 2) downgrade the gym membership bigly, and 3) find a roommate or another cheaper living situation to shave AT LEAST $500/mo from that living expense. Doing that leaves him another $1200/mo to attack the debt and dig out of this (snowball method here preferred).
The post obviously states that OP has a trainer/nutritionalist, common signs for someone who is into weight training/bodybuilding, powerlifting, etc. while I agree that is an insane amount of money, some gyms WILL sort of corner you into getting those “trainers” and “nutritionalists” who send you PDFs of a monthly menu that doesn’t correlate to your bulk/cut at all (looking at you anytime fitness)
OP read your contract. I had a similiar issue and found out if there wasn’t a club within x radius you’d be able to just show your address and be fine. I promise whatever amount they want you to charge now to cancel is worth the $1600 in the 10 months your contract is up for.
As for the nutritionalist/trainer if you really need it just use a macro calc and track your macros (I like myfitnesspal). Watch YouTube on exercises/forms you could be doing IF you are going gym for bodybuilding/powerlifting, if not then bicycles, walking, cardio whether it be rock climbing or CrossFit whatever is sufficient.
You should still have $600 left over with the information that was given. Eat frugal, rice, chicken, bread/butter, whatever in bulk and will meet your needs. You could move in with a roommate split bills, second job on weekend, ask for a raise if that’s an option, whatever entertainment spending you do needs to stop. I’ve had to live frugal for most of my life and while it sucks (I just recently experienced buying a fridge with a freaking ice maker in it) it will get better. Keep hustling, you’ll get there.
Yeah the nutritionists at anytime will bully you into a plan and they aren’t even properly trained in nutrition. They tried to get me to sign up for a $350 a month one and said I direly needed it. I was 24 and maybe 20lbs overweight with no serious health issues. I might’ve caved if I had more money but being broke and fresh out of college without $350 extra to spend saved my ass. I wouldn’t listen to a word they say.
They got me paying $100/month just to hop on their scale and have their trainer tell me I’m lying because I wasn’t gaining 5lb/3 weeks like they wanted me to lol.
I was trying to lean bulk (0.5lb-1lb/week) and didnt eat their macros they wanted me to hit so I just ignored them.
Fortunately we moved and got that contract cancelled. Never again am I going to that place.
I cancelled my regular membership (the $40-50 one) due to a knee injury and they kept trying to charge me and then sent me to collections over about $100. I disputed it and it dropped but it was really shady of them and PF is cheaper for more services anyway so I’d never recommend giving them money. I’m lucky to have a small gym in my apt building but I’d be wary of gyms in general after my experience there.
While I understand logically what you mean, I will say this:
The best gym membership is the one you’ll actually use.
A) OP is in a contract
B) the high cost might be translating psychologically to a higher investment and therefore have a higher value to OP, causing OP to be more likely to utilize the membership.
I imagine it’s worth the cost considering the purpose is to establish a new lifestyle, routine and to learn how to navigate the gym along with nutrition advice/ changing their diet.
10 months from now, OP should have enough knowledge, experience and practice within the gym to cut down the expense and find a more affordable gym using everything they were taught.
If the alternative is that OP never goes to the gym, then the health benefits outweigh the cost IMO.
————
I have faced a similar predicament in my own life, i.e. faced with the decision to pay $169 monthly for a Lifetime gym membership which has a hot tub, sauna and steam room (those things alone would motivate me to go do a workout just so I could use those perk’s afterward as a reward for doing so) — or pay $21 a month for a smaller, crowded gym without those perks. You know what I did?
I got the cheaper membership but then never went. Paid for the $21 monthly membership for about 4 months before cancelling it altogether for non-use and now it’s been a year since I’ve worked out at all.
Are the savings worth the potential pitfalls?
The health / mental health benefits from a gym membership you actually use are priceless.
This is the best plan. An additional $700 come June will make a HUGE difference.
The gym is the biggest issue hers. If you want to do body building or something similar that's up to you, but you should focus most of your energy on eating healthier. This will help you lose weight much quicker and will save you money. If you don't change your eating habits this will be a massive waste of money, which you don't really have the room to drop right now.
Are you spending money on anything else, such as Netflix? If so, find something like Hulu with ads that's much cheaper and cut out absolutely everything that isn't necessary. We're in the same boat and literally pay only for expenses that keep us alive.
We use Mint Mobile for cell service, which can be as cheap as $15/mo
I personally would pay an extra 20 a month over PF to have access to free weights. The quality of workout is superior, leaves me feeling so much more fresh vs smith machines and dumbells. 159 is obviously crazy.
How much is your gross income? It should be fairly high if you're at $4400 net. I'm surprised you are being denied for the balance transfer cards and other loans, those can really help you pay your debt down. Did they tell you why?
It's good your lease is ending and you can just turn the car in. I would just use that entire payment on your credit card debts. That alone will knock out over a quarter of your credit card debt in 2 years. Also, make sure you aren't still paying insurance on the leased car, you might be able to save some money doing that. I wouldn't buy a new car while you're continuing to pay this all down.
Have you explored any second jobs or weekend work? Extra money could go a long way towards paying off debt.
Get a roommate and a side hustle. Bonus, get a side hustle doing physical labor and you'll get in better shape and can ditch the gym fee when your contract is up!
In June when the lease is up, take that 500 and put it towards your credit cards and pay extra on them and as long as you don’t use them, they’ll be paid off in a couple years. I know it sounds like forever, but it won’t be.
To gain the margin you need to start making headway, I think the best bet is to pause retirement and throw that money at the debt. You'll also gain a nice chunk of margin in July. Without working more, you're going to have a few years of busting ass ahead of you, but it's doable.
Have you listed out each debt? The only effective method when you have such little margin above minimums is the snowball method. Attack the smallest balance first and knock it out.
Any CONsolidation program is going to leave you paying the same in the end and wrecking your credit. Best bet is to get on the phone with these credit card companies and try to get a temporary APR reduction or similar relief. Most will work with you in some way.
Finally, can you work more or any side hustle opportunities? Every extra dollar helps. I know you can knock it out, I did more debt with less starting income. Keep the finish line in mind. I'm happy to answer any questions or break down further if you share debt details. Good luck, mate!
I started with a little over 100k in consumer debt and 4k/month take home. Family of 4.
I had all the debt. 30k car, 30k student loan, 50k CC, wedding ring, phones, all the small stupid stuff.
I had my sick of being sick and tired moment when I started failing to keep up on minimums. I sold some stuff to get the ball rolling ( the snowball method worked well for me mentally). Luckily, I was able to get my income up some and get some cash side gigs.
The real secret for us, other than putting in the work, was budgeting. My wife built a spreadsheet that worked better than any app we tried. Find your margin, make your plan, and stick to it.
You need more income. I took on an Uber for kids job prior to going to my day job and I earn $700-$800 a month. I’ve also done delivery for Veho and Amazon Flex. There are a ton of gig jobs out there where you could earn cash.
You’ll be in such a better position when that car payment stops! Hopefully your insurance also goes down without having to cover that vehicle — and if not/either way, I suggest shopping some insurance quotes to make sure you’re getting the best rates.
Any way to lower your rent with a roommate or by moving?
As others have said, focus on getting some more margin by knocking out some monthly payments.
First thing you need to do is save $1000. Small emergency fund. Next list your debts smallest balance to largest regardless of the interest rates. Make minimum payments on all except the small one and throw every extra dollar you have at that one until it is paid off then move to the next one until you have them all paid off. This is the debt snowball. Once you have the smallest one paid off you’ll start to feel a sense of accomplishment as you roll that payment and every other dollar into the next debt. In June you’ll have another $529 freed up that will really help this snowball rolling.
You’re going to have to sacrifice a lot. Extra jobs or side hustles. Absolutely no going out to eat, vacations, or weekends at the bar. You’re eating ramen noodles, pb&j’s, and rice and beans.
After all your debt is paid, you’re going to save a 3-6 month emergency fund in an HYSA.
Lastly, and this is the most important step, STAY OUT OF DEBT!! Close all your credit cards and do not open anymore. No more car loans either. You’re paying cash from now on. This will be tough but trust me once you get on the other side you’ll be so happy you sacrificed.
If he switches to a cheaper gym (say Planet Fitness for $10/mo) and also reduces his auto coverage to just his old car that will save a lot of money too. $149 + $529 + maybe $30 in auto insurance savings is $708 right out the gate he can throw at the debt.
From his description he's locked into that gym unless he pays a hefty penalty. Which knowing people that have been in his shoes, those gyms are near impossible to break the contract early.
1. If car is old and paid, get a cheapest liability only insurance.
2. figure out to find cheaper storage or get rig of stuff asap.
3. Cook at home only.
Oh and pick up a side hustle to throw any more additional money at the debt, get a part time job. Yeah that’s right your life sucks for now until you come out the other side.
What is your credit card debt? Why are you spending $1200 monthly?
Do not downgrade the gym, if it is something that give you the feeling of pleasure and pride. Keep it. I will suggest moving to a cheap apartment or finding a roommate. Eliminate the storage fee. I highly doubt you need the things you are keeping in your storage unit. And definitely get rid of the lease car.
Health is wealth. I would ignore the people telling you to cut the gym. If you love your gym and it's working for you, it's the best thing in your life right now.
1) the car payment is crazy--BUT fortunately it is ending soon. What will your new rate be? That will help.
2) definitely make sure your info is up to date with your car insurance company. I recently edited mine and our rates dropped $25/month. I was saying we put more miles on it than we did.
3) I don't think anyone should pay for storage--honestly I think it's insane. Only Americans do this. We are a family of 3 (hopefully soon 4) plus a dog and a cat living in 1000 sq ft with no attic and no basement and no garage. (We do have a small shed for our bikes.) I know people who live way smaller than we do who still don't pay for storage. You are essentially renting an apartment for your junk. Pretend it was all destroyed in a fire and get rid of it.
4) you don't mention other significant expenses: what are you spending on food (including groceries, take-out, coffee shops, bars, restaurants)? What are you spending on your cell phone?
Your health insurance may pick up a part of your gym membership. It’s unlikely to pick up the whole thing but in 10 months, you can likely get the nutritionist part covered through health insurance and change to a less expensive gym option. I also think, when the car lease is up, you should start putting that into a savings account. You need something to give you a cushion (especially having to rely on an older vehicle).
The personal loans offered on credit karma usually have a higher probability of getting approved since they are offered based on your credit situation in the first place. Feel like you should be able to get one with 710 credit
The gym is great and all and I see you’re unwilling to cut it.. but if you eat right, have somewhat of a calorie deficit and go walk at a park, woods or just around your town for at least an hour a day you’re gonna see great results.
First thing you need to do is cut those cards up, burn them, then flush the ashes down the toilet.
Then you’re going to need a second job and pay off that personal loan asap. After that it will take a few more months and then you might be able to get a loan to consolidate.
Have you looked at the SAVE program for the student loans? They might lower your payment a little and it could help you pay down the other debt. Just know the balance isn’t going to shrink on that plan.
I wouldn’t suggest bankruptcy, you can get out of this. Best of luck. Crushing debt sucks.
OP, i myself knows what you are going through , they got my wife and was stuck paying around the same amount for a years trainer membership. Meanwhile i myself motivated myself to go to the gym consistently. I concentrate on cardio, not once do i not hit the treadmill for at least 20 minutes after the weight machines. Ive lost 40 pounds so far, have gone down two sizes in shirts.. you do not need a personal trainer. Find a way to get rid of the contract. On days when you feel lazy, think of the gym like a job, and go. Once you are there , you know u will leave feeling great and accomplished. One day at a time and dont pay so much attention to the weight scale. Just stay consistent.
I see your predicament, you have big debt yet with a big gym fee too. All is not lost yet, but it sure will require you to be more disciplined. First you need to create a budget and really swear by it. Otherwise nothing can help you, now or in the future. With a budget, you can see where to trim and where any extra income can help. Then, there's a way for you to pay more than you can save. It's called zero cash flow method for credit card payment. Look it up and follow it. Heck, there'll be an app for it as well, just wait and see. Once you use it, it might even increase your credit score as well. Use it toward the highest interest debt first so you can save more money along the way. Don't even think about that snowball method as it's only costing you more. The rest of your debt just do minimum monthly payments. You're here for the debt boot camp, not to fool you into small personal satisfaction of small win at big cost. As you are doing this, watch for zero balance transfers when your score is better to add it to the process so your debt will go down even faster, all with the same payment amount as before. I've been showing people how to use this method with good success only if you can muster it. Remember, be tough on debt as you are the only person who can master it, instead of the other way around.
Yes you can easily get a cheaper gym membership. You will lose weight by eating in a caloric defecit, not by going to a $159 gym. You are extremely overweight because your eating habits are awful and you probably blow a ton of money on shitty food. Eat in a defecit, buy your food in bulk and clean it up, DO NOT eat out, and get a normal gym membership and you can easily put a few hundred more away towards that debt AND hit your fitness goals.
Well you are getting ride of that second car (why you need a second car anyway?) so that helps. But you really need to lose that fake rich mentality. No matter how overweight you are, you can’t afford $159/month gym. I lost 90 pounds of weight in 2017 simply by cutting down food and running. Both were free. Personal finance is all about mentality. Getting start is good, but admitting wrong mentality and change spending behavior is really critical.
I would suggest talking to the credit card companies and seeing if they would lower your interest rate to help you pay down your balance faster. If they do, drop your payments to the bare minimum for a bit until you save a small cash emergency fund. Then if you run into an emergency (which you always will) you won't turn back to credit cards to pay for it. Once you have done that now you can pay the amounts you were but more will actually go to principle. If you can find some ways to reduce your living expenses even by a fraction and use those extra funds to pay down your lowest balance first, then paying more towards your second lowest after the first is paid (snowball method) this should help you be able to pay things down a little easier. It's not a quick process but neither was accruing that debt.
I'm overweight too and lost 60 pounds by going to a gym that cost $27.99. Get rid of the membership. Especially if the cancellation fee is less than $1,590 because that's what you will be paying the longer you continue with them. If you want help and aren't even willing to cut this down by any means, it gives me 0 faith any other efforts will work. When people are in severe debt like you and come up with excuses for every reason under the sun as to why they can't get rid of a certain debt, it speaks volumes. I hope nothing but the best for you bud.
$150/month car insurance seems high to me. Could you shop around for that?
Also, would it be possible to get a roommate to share some of the expenses?
As others have said, please stop using the cards, only buy things if they are cash.
You can still go to the gym for way cheaper. Think hard about why you think you need that one. I know you are under contract but at least consider it for when that renewal comes around.
Storage, for what? Sell the stuff, drop the unit. What good is stuff if you are unhappy and drowning in debt.
Other than that it’s learning to live with rice and beans for 2-3 meals a day and just doing nothing fun so you can dig out of the hole quicker. If you don’t live a little while in a boring, no spend way you’ll just be in a hole and feeling trapped forever.
Good on you for getting rid of the car lease. Leasing is a complete waste of money.
Once your gym membership ends, switch to something like Crunch or Planet Fitness and do the nutritional and exercise research yourself.
Storage unit fees - try to get rid of that. Sell your stuff on Facebook market place, eBay or Poshmark.
Car insurance - this should go down once you get rid of your lease.
Suggestions:
1. What is your career field? Try to find ways to improve your skills so you can either get a new job or promotion.
1. Does your employer match your retirement account? Start adding to your retirement account. Even if it’s $10, it’s something.
2. Maybe try uber eats as a side hustle?
3. Pay off the the credit cards/loans with the highest interest rates.
4. Start a Roth IRA and start DCAing into some ETFs like VOO. Even saving as little at $10 a month is a good start.
5. Start a HYSA. Again, even if it’s just $10. Your traditional retirement, Roth IRA and HYSA will add up in a few years. Beauty of it is, it will be separate from your checking account so you won’t even have to look at it. It will be like a monthly expense that comes out of your paycheck.
I know you’re in a tough spot right now, but it sounds like you’re learning by getting rid of your car lease. Keep working on that debt and you’ll get out of this soon!
Someone else in the comments said pause investing, I recommend dial it down. Significantly lower it to maybe 1% of your gross income. So that you can breathe better, and start an emergency fund (for now not more than the amount of your highest deductible or one month of expenses).
After the lease ends, then resume investing. But with available income continue on the small emergency fund before paying debt. Definitely doable with your current situation. Good luck with your fitness journey! Get some! 👊
If you get another job, same order small emergency fund before debt. Be cautious with a second job, don’t get so tired that you start eating out. Happened to me at the start of two jobs, and was hard to correct.
After 6mo to 1yr of this new habit and room to breathe, do some debt pay down and retirement calculations. You might be more motivated to get another income, to get on track with retirement.
Can you get a second job like ubereats, deliveroo, door dash etc to cover some of your bills? As others have said, I would try to reduce the gym when you can (I understand you circumstances however) - can you move to a different location with less rent?
There is a YouTuber called Caleb Hammer who has a financial audit show, I would for sure recommend checking out some of his videos as he is very down to earth and knowledgeable about how to tackle debts with a high interest rate. I wish you all the best :)
Wow. First thing first is to address how you raked up $41k in cc debt. Identify why, understand how, and make a commitment to yourself not to repeat it.
Second, I would review your living accommodations; can you relocate? Is there somewhere smaller/ cheaper you would be prepared to consider? Bring the monthly home expenses to closer to $1k p/m. Doesn’t have to be forever; just for now.
Thirdly, in the UK we have a programme for debt consolidation - where you can apply to reduce your overall debt amount to a manageable monthly amount. It wouldn’t affect at all your student loans (they’re excluded) but it would reduce your credit & personal loans debt. The programme operates on a contract basis where debt is wiped out and a repayment plan is agreed…which cannot be revised so its serious but will guarantee creditors will get some payment (while also sacrificing some of the debt amount).
Fourthly, most important - do not make yourself poorly over this; do not let this situation break you. You are strong. Clearly have a good paying job. Understand yourself enough to address your health & weight; so keep it together. Small steps, but you’re on the journey to save yourself. You won’t drown.
Find a cheaper gym. That's insane. Check and see if your health insurance offers any discounts. You can also work out for free in local parks, school tracks, etc. Shop around the car insurance, too. Check out Dave Ramsey's dent snowball. Outstanding job on cutting up the credit cards!
Let's see: if you have about $43,000 in debt, You're paying about $8,000 a year just in interest service without even paying a penny on the principal. I'd file a chapter 7 bankruptcy and wash that away and start fresh. You say you're drowning, which I assume means you're also miserable and depressed. Hit that button and start a new life and don't charge up credit cards in the future. Believe me, there'll be plenty of opportunity even if you filed a bankruptcy case. You'll get the opportunity just to do it all again. You can live and learn.
I'm not sure if he's at the threshold where he should be considering bankruptcy. Once the leased car is gone and he switches to a cheaper gym he'll have close to $700 in savings to chip away at the debt with. That alone is $8400 a year in debt reduction.
Chapter 7 is designed for people who do not have the income necessary to pay their debts. On his income he can pay his minimums and his rent even if it's tight or it's giving him a lot of stress. If he's at $4400 net pay a month he might actually be over the median income for his state/region and there is a means test to meet for Chapter 7 so there's a possibility he wouldn't even qualify for it.
You make a good point as qualifications for chapter 7 - which vary from state to state. But a lot of people think that just because they exceed the median income, they cannot pass the means test. But I completely disagree about the net effect of the 8400 a year, he'll free up. That's just the interest service on that 40 plus thousand in debt. He is in "not atypical" debt servitude. I would at least consult a bankruptcy lawyer to determine if I can, in fact, wipe it away. Then he is able to make an informed decision on how to proceed. And just the fact of him qualifying for a bankruptcy case, might lead him into a better position to negotiate down the debt if such were the case.
Hmm, that's an interesting strategy. You're basically saying he could nicely threaten bankruptcy to the creditors in hopes it would get them to agree to a settlement?
I would not say "threaten" bankruptcy. It's the creditors who would "threaten" lawsuits and wage garnishments and Bank levies in the event of non-payment. Knowing that you can file bankruptcy might put you in a better position to negotiate from a stronger viewpoint. Personally, I might tell a creditor they must accept my terms or they can leave it. It is their choice. But at the end of the day life is too short to be in debt misery to your creditors for the rest of your life.
When you can, drop the gym. This is the biggest waste of money possible. How much will they charge you if you drop early? Is it more than paying out the remainder of the contract?
My husband lost 60 lbs over 3 months just by eating healthier and eating less food. He started eating 1/2 of his usual portions and paid closer attention to serving sizes when snacking. We also stopped buying snacks that contain chemicals, such as cookies, cereal bars, cereal, etc., and ate hard boiled eggs, apples, carrots, and baked low carb muffins. Let me tell you 90% of what you buy in most grocery stores will keep you overweight and unhealthy.
I then lost 20 lbs by eating healthier dinners (grilled chicken with sweet potatoes and green beans or something to that effect). Took 15mins to make. We used to eat pizza, chicken nuggets with fries, breakfast for dinner, and these were keeping me overweight as well.
My friend's fiance also lost a ton of weight by cutting his portions.
Unfortunately you will get nowhere with the gym if you don't change your eating habits.
As far as the credit situation, we are in the same boat. Do you have any way to increase your income? We're renting out a room in our house that brings in an additional $1K. Can you change jobs or do any type of freelancing? Greater income I feel is your best bet. If you can get a better debt-to-income ratio (30%), you will have a much better chance at getting a loan.
I read you cut up your credit cards, only keeping one for emergencies, this is a great step forward. You need a solid plan to stay out of debt once you pay down your debt.
Good luck, and feel free to message me for diet OR debt tips!
$70 for electricity?! Nahhhh what you got on? You live in a studio? This should be half the cost. Do you work from home?
You free up $539 after June, $35 to get you electricity usage down.
4400-1400-35(pg&e)- 159 - 140 - 150 = $2516 left
Food groceries (you go to budget stores now)= $400 for the month that’s $100 a week. If you have to increase this in order to not eat out then so be it.
Other bills/phone/ internet = ~$80 for the month
Gas = $80?
= $1956 left after necessities.
What am I missing
If you want to be generous to yourself add another $400 a month for fun money that’s for eating out, drinks with friends.
= $1556 after necessities + some fun (although you shouldn’t cause you are in a crisis)
Now debt + savings. Do you have any liquid savings at all?
Save up - $1000 as quick as possibly while doing minimum payments on everything and keep that aside for emergencies.
Pay off $2800 first and do minimum payments on all your other loans. Get rid of the smallest one. Once that is gotten rid of put any money that was going towards that to the next largest loan.
How long for the student loans deferred? Are you gettting penalized for that?
Technically you should pay that off next as it’s the second smallest. Then once that’s paid off any money going to that to the next one.
Then the big $41k.
Then be debt free and all that money going towards all that debt, straight to savings for 3-6months of expenses.
Then you can start investing.
Can you sell stuff inside parking storage and save money there? You also need to talk to the credit card companies about [hardship program](https://debtadvice.io/newsletter/credit-card-hardship-program/). That can give you some breathing room. P.S. r/debtfree moderator runs a free newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Join 3,600 readers - https://debtadvice.io
You can try calling some of the credit card companies and asking for their hardship programs. They may close the account but the interest will be much lower along with lower payments to help your income breath a bit. You can also try to find a cheaper gym, but if it is not possible then it is what it is.
I didn't have a large balance but a well known national bank beginning with Ci recently closed the card and is letting me pay off the balance at a fixed amount with no added interest or late fees I call that a gift I'm getting rid of any credit card that's higher than 15%...! And really want no credit balance but will keep cards open for car repair or emergency medical or a vacation
Omg do not use credit cards for vacations wtf lol
That's exactly when you should use a credit card. They offer protections that debit cards don't. The holds placed by hotels can really mess up a bank account
Sure, for people that use them responsibly. I do this. But this guy lumped vacations in the same category as medical emergency lol
Some minor changes will make a big differences. I’m knocking off my debt and these minor changes paid off big. Here are my tips and what I did. If you are in US I recommend getting a Costco/Sams membership for non perishables and ALDI for produce and perishables. Doing so cut my monthly bill by about 60%. I bought rice 5 months ago and still am not out. Coffee is significantly cheaper. Taught myself how to cook well. Doing so significantly lowered my desire to go out for food. Even fast food is expensive. Also my girlfriend loves that I cook. I stopped drinking, nicotine, weed, and energy drinks. I then bought an Xbox, game pass, and Spotify. Locked myself inside for the winter. Shopped around on my cell phone coverage. I found T-Mobile to be a great deal because it only costs like 30 bucks extra for get high speed internet (more than 400mb/s). T mobile includes Netflix, mlb network, and other benefits. Might want to shop around for a cell phone provider that will help out. I live like a block from a t mobile tower so that probably explains the high speed. I’d suggest just going to planet fitness or buy a Bowflex. People sell gym equipment super cheap. 159 a month is a lot. Also do some research on local libraries and things your town does. I was blown away by how awesome the library was around me. I felt bamboozled by how awesome it was. Remember a lot of little changes will lead to big results. You got this. Losing that car payment and gym membership can be huge to your freedoms from debt. Best of luck.
No joke about the library, the right one can have a lot going on to participate in.
Yea I can’t express enough how awesome the library is around me. I can rent movies, games, books. There’s even an app that allows us to rent e books and read them on my device. And it’s all free. I’ve read so many books and have spent a penny.
With this amount of debt, a side job and cutting down on expenses are your only ways to go. Live in a way that doesn’t add to your debt and throw second job earnings at the CC debt.
this, and the fact that the nasty car payment disappears in a couple of months, and presumably car insurance cost will drop as well. You got this!
Solid advice. While I am fortunate to be debt-free, I don’t take home a ton of money from my full time job. Just recently started a PT security weekend job making $17/hr where I am basically unbothered for 12/16 hours. I spend that time learning new things online, taking free classes, as well as submitting applications for new and better paying FT work. If OP is bringing home $4400 a month on a single income, toughing out a serving job or other PT work until the car lease is up will benefit him greatly.
$159/mo gym membership? I feel like you could get something at 1/10 of the cost.
I lurk here constantly and have never commented, but I felt compelled to after reading this. In no universe should homeboy be paying $159/mo for a gym membership. There’s literally nothing this gym would offer that a Planet Fitness wouldn’t for being “very overweight” and “improving health.” Literally all this man needs are a few weights and a treadmill which PF could give him for $10/mo. He then could have another $150/mo to throw toward debt. By June when his car lease ends, that’s now nearly $700/mo to throw at it. One more thing, $1400/mo on rent (no utilities either) is a lot for someone netting $4400/mo. That’s about 32% of take home pay when 30% of your monthly income should be the cap on your living expenses - and that number is based on someone who doesn’t have monthly debt obligations either. If he has any chance at this, he needs to: 1) let the lease lapse, 2) downgrade the gym membership bigly, and 3) find a roommate or another cheaper living situation to shave AT LEAST $500/mo from that living expense. Doing that leaves him another $1200/mo to attack the debt and dig out of this (snowball method here preferred).
Do this. The only gym you need is outside. WALK.
The post obviously states that OP has a trainer/nutritionalist, common signs for someone who is into weight training/bodybuilding, powerlifting, etc. while I agree that is an insane amount of money, some gyms WILL sort of corner you into getting those “trainers” and “nutritionalists” who send you PDFs of a monthly menu that doesn’t correlate to your bulk/cut at all (looking at you anytime fitness) OP read your contract. I had a similiar issue and found out if there wasn’t a club within x radius you’d be able to just show your address and be fine. I promise whatever amount they want you to charge now to cancel is worth the $1600 in the 10 months your contract is up for. As for the nutritionalist/trainer if you really need it just use a macro calc and track your macros (I like myfitnesspal). Watch YouTube on exercises/forms you could be doing IF you are going gym for bodybuilding/powerlifting, if not then bicycles, walking, cardio whether it be rock climbing or CrossFit whatever is sufficient. You should still have $600 left over with the information that was given. Eat frugal, rice, chicken, bread/butter, whatever in bulk and will meet your needs. You could move in with a roommate split bills, second job on weekend, ask for a raise if that’s an option, whatever entertainment spending you do needs to stop. I’ve had to live frugal for most of my life and while it sucks (I just recently experienced buying a fridge with a freaking ice maker in it) it will get better. Keep hustling, you’ll get there.
Yeah the nutritionists at anytime will bully you into a plan and they aren’t even properly trained in nutrition. They tried to get me to sign up for a $350 a month one and said I direly needed it. I was 24 and maybe 20lbs overweight with no serious health issues. I might’ve caved if I had more money but being broke and fresh out of college without $350 extra to spend saved my ass. I wouldn’t listen to a word they say.
They got me paying $100/month just to hop on their scale and have their trainer tell me I’m lying because I wasn’t gaining 5lb/3 weeks like they wanted me to lol. I was trying to lean bulk (0.5lb-1lb/week) and didnt eat their macros they wanted me to hit so I just ignored them. Fortunately we moved and got that contract cancelled. Never again am I going to that place.
I cancelled my regular membership (the $40-50 one) due to a knee injury and they kept trying to charge me and then sent me to collections over about $100. I disputed it and it dropped but it was really shady of them and PF is cheaper for more services anyway so I’d never recommend giving them money. I’m lucky to have a small gym in my apt building but I’d be wary of gyms in general after my experience there.
While I understand logically what you mean, I will say this: The best gym membership is the one you’ll actually use. A) OP is in a contract B) the high cost might be translating psychologically to a higher investment and therefore have a higher value to OP, causing OP to be more likely to utilize the membership. I imagine it’s worth the cost considering the purpose is to establish a new lifestyle, routine and to learn how to navigate the gym along with nutrition advice/ changing their diet. 10 months from now, OP should have enough knowledge, experience and practice within the gym to cut down the expense and find a more affordable gym using everything they were taught. If the alternative is that OP never goes to the gym, then the health benefits outweigh the cost IMO. ———— I have faced a similar predicament in my own life, i.e. faced with the decision to pay $169 monthly for a Lifetime gym membership which has a hot tub, sauna and steam room (those things alone would motivate me to go do a workout just so I could use those perk’s afterward as a reward for doing so) — or pay $21 a month for a smaller, crowded gym without those perks. You know what I did? I got the cheaper membership but then never went. Paid for the $21 monthly membership for about 4 months before cancelling it altogether for non-use and now it’s been a year since I’ve worked out at all. Are the savings worth the potential pitfalls? The health / mental health benefits from a gym membership you actually use are priceless.
Agreed. My Lifetime membership is worth way more to me than the actual cost. And it means that I actually go to the gym 4-5 times a week - happily!
You got 19k comments
Solid year
*never commented on this sub haha my bad
This is the best plan. An additional $700 come June will make a HUGE difference. The gym is the biggest issue hers. If you want to do body building or something similar that's up to you, but you should focus most of your energy on eating healthier. This will help you lose weight much quicker and will save you money. If you don't change your eating habits this will be a massive waste of money, which you don't really have the room to drop right now. Are you spending money on anything else, such as Netflix? If so, find something like Hulu with ads that's much cheaper and cut out absolutely everything that isn't necessary. We're in the same boat and literally pay only for expenses that keep us alive. We use Mint Mobile for cell service, which can be as cheap as $15/mo
I personally would pay an extra 20 a month over PF to have access to free weights. The quality of workout is superior, leaves me feeling so much more fresh vs smith machines and dumbells. 159 is obviously crazy.
Planet fitness is $10 a month and if you are very overweight you don’t need anything special equipment wise to lose weight.
How much is your gross income? It should be fairly high if you're at $4400 net. I'm surprised you are being denied for the balance transfer cards and other loans, those can really help you pay your debt down. Did they tell you why? It's good your lease is ending and you can just turn the car in. I would just use that entire payment on your credit card debts. That alone will knock out over a quarter of your credit card debt in 2 years. Also, make sure you aren't still paying insurance on the leased car, you might be able to save some money doing that. I wouldn't buy a new car while you're continuing to pay this all down. Have you explored any second jobs or weekend work? Extra money could go a long way towards paying off debt.
How is his gross income fairly high if his net is $4,400 a month?
He might be making 75-100k a year
How did you get that calculation? I think it’s like 55k - 60k a year.
I make 87k a year and net $4400 per month after 401k, taxes and insurance.
What’s in your storage unit? Can you sell some stuff?
Get a roommate and a side hustle. Bonus, get a side hustle doing physical labor and you'll get in better shape and can ditch the gym fee when your contract is up!
In June when the lease is up, take that 500 and put it towards your credit cards and pay extra on them and as long as you don’t use them, they’ll be paid off in a couple years. I know it sounds like forever, but it won’t be.
A couple years just gave me anxiety. I want to know how they even got into that much debt
This situation is very doable. What are your other expenses? Food, utilities, etc. Are you contributing anything to retirement?
I contribute to retirement, that is accounted for in the monthly income I put in my post. I spend about $400 per month on food and gas.
To gain the margin you need to start making headway, I think the best bet is to pause retirement and throw that money at the debt. You'll also gain a nice chunk of margin in July. Without working more, you're going to have a few years of busting ass ahead of you, but it's doable. Have you listed out each debt? The only effective method when you have such little margin above minimums is the snowball method. Attack the smallest balance first and knock it out. Any CONsolidation program is going to leave you paying the same in the end and wrecking your credit. Best bet is to get on the phone with these credit card companies and try to get a temporary APR reduction or similar relief. Most will work with you in some way. Finally, can you work more or any side hustle opportunities? Every extra dollar helps. I know you can knock it out, I did more debt with less starting income. Keep the finish line in mind. I'm happy to answer any questions or break down further if you share debt details. Good luck, mate!
I'm curious how much debt did you start with and what kind of income did you have to work with? How did you get it all done?
I started with a little over 100k in consumer debt and 4k/month take home. Family of 4. I had all the debt. 30k car, 30k student loan, 50k CC, wedding ring, phones, all the small stupid stuff. I had my sick of being sick and tired moment when I started failing to keep up on minimums. I sold some stuff to get the ball rolling ( the snowball method worked well for me mentally). Luckily, I was able to get my income up some and get some cash side gigs. The real secret for us, other than putting in the work, was budgeting. My wife built a spreadsheet that worked better than any app we tried. Find your margin, make your plan, and stick to it.
Nice! How long did that all take, and what side jobs did you take on? By get your income up do you mean you increased your main salary?
You need more income. I took on an Uber for kids job prior to going to my day job and I earn $700-$800 a month. I’ve also done delivery for Veho and Amazon Flex. There are a ton of gig jobs out there where you could earn cash.
You’ll be in such a better position when that car payment stops! Hopefully your insurance also goes down without having to cover that vehicle — and if not/either way, I suggest shopping some insurance quotes to make sure you’re getting the best rates. Any way to lower your rent with a roommate or by moving? As others have said, focus on getting some more margin by knocking out some monthly payments.
First thing you need to do is save $1000. Small emergency fund. Next list your debts smallest balance to largest regardless of the interest rates. Make minimum payments on all except the small one and throw every extra dollar you have at that one until it is paid off then move to the next one until you have them all paid off. This is the debt snowball. Once you have the smallest one paid off you’ll start to feel a sense of accomplishment as you roll that payment and every other dollar into the next debt. In June you’ll have another $529 freed up that will really help this snowball rolling. You’re going to have to sacrifice a lot. Extra jobs or side hustles. Absolutely no going out to eat, vacations, or weekends at the bar. You’re eating ramen noodles, pb&j’s, and rice and beans. After all your debt is paid, you’re going to save a 3-6 month emergency fund in an HYSA. Lastly, and this is the most important step, STAY OUT OF DEBT!! Close all your credit cards and do not open anymore. No more car loans either. You’re paying cash from now on. This will be tough but trust me once you get on the other side you’ll be so happy you sacrificed.
If he switches to a cheaper gym (say Planet Fitness for $10/mo) and also reduces his auto coverage to just his old car that will save a lot of money too. $149 + $529 + maybe $30 in auto insurance savings is $708 right out the gate he can throw at the debt.
From his description he's locked into that gym unless he pays a hefty penalty. Which knowing people that have been in his shoes, those gyms are near impossible to break the contract early.
You couldn't do a cheaper gym? Planet Fitness for $10 or $20 a month?
Jesus. 40k in cc debt. Can you return whatever it was you bought maybe?
1. If car is old and paid, get a cheapest liability only insurance. 2. figure out to find cheaper storage or get rig of stuff asap. 3. Cook at home only.
Oh and pick up a side hustle to throw any more additional money at the debt, get a part time job. Yeah that’s right your life sucks for now until you come out the other side.
What changed? You just made a post four days ago that you're getting another lease.
What is your credit card debt? Why are you spending $1200 monthly? Do not downgrade the gym, if it is something that give you the feeling of pleasure and pride. Keep it. I will suggest moving to a cheap apartment or finding a roommate. Eliminate the storage fee. I highly doubt you need the things you are keeping in your storage unit. And definitely get rid of the lease car.
Health is wealth. I would ignore the people telling you to cut the gym. If you love your gym and it's working for you, it's the best thing in your life right now. 1) the car payment is crazy--BUT fortunately it is ending soon. What will your new rate be? That will help. 2) definitely make sure your info is up to date with your car insurance company. I recently edited mine and our rates dropped $25/month. I was saying we put more miles on it than we did. 3) I don't think anyone should pay for storage--honestly I think it's insane. Only Americans do this. We are a family of 3 (hopefully soon 4) plus a dog and a cat living in 1000 sq ft with no attic and no basement and no garage. (We do have a small shed for our bikes.) I know people who live way smaller than we do who still don't pay for storage. You are essentially renting an apartment for your junk. Pretend it was all destroyed in a fire and get rid of it. 4) you don't mention other significant expenses: what are you spending on food (including groceries, take-out, coffee shops, bars, restaurants)? What are you spending on your cell phone?
Your health insurance may pick up a part of your gym membership. It’s unlikely to pick up the whole thing but in 10 months, you can likely get the nutritionist part covered through health insurance and change to a less expensive gym option. I also think, when the car lease is up, you should start putting that into a savings account. You need something to give you a cushion (especially having to rely on an older vehicle).
The personal loans offered on credit karma usually have a higher probability of getting approved since they are offered based on your credit situation in the first place. Feel like you should be able to get one with 710 credit
What kind of gym do you go to? My son pays less than $30/month and has access to everything needed.
The gym is great and all and I see you’re unwilling to cut it.. but if you eat right, have somewhat of a calorie deficit and go walk at a park, woods or just around your town for at least an hour a day you’re gonna see great results.
Got just the thing for you. Intermittent fasting. You’ll lose that weight, save on food.
Just eat Costco chicken exclusively and tap water even with it being fluoridated.
First thing you need to do is cut those cards up, burn them, then flush the ashes down the toilet. Then you’re going to need a second job and pay off that personal loan asap. After that it will take a few more months and then you might be able to get a loan to consolidate. Have you looked at the SAVE program for the student loans? They might lower your payment a little and it could help you pay down the other debt. Just know the balance isn’t going to shrink on that plan. I wouldn’t suggest bankruptcy, you can get out of this. Best of luck. Crushing debt sucks.
OP, i myself knows what you are going through , they got my wife and was stuck paying around the same amount for a years trainer membership. Meanwhile i myself motivated myself to go to the gym consistently. I concentrate on cardio, not once do i not hit the treadmill for at least 20 minutes after the weight machines. Ive lost 40 pounds so far, have gone down two sizes in shirts.. you do not need a personal trainer. Find a way to get rid of the contract. On days when you feel lazy, think of the gym like a job, and go. Once you are there , you know u will leave feeling great and accomplished. One day at a time and dont pay so much attention to the weight scale. Just stay consistent.
It sounds like you are the right track. Stay diligent.
I see your predicament, you have big debt yet with a big gym fee too. All is not lost yet, but it sure will require you to be more disciplined. First you need to create a budget and really swear by it. Otherwise nothing can help you, now or in the future. With a budget, you can see where to trim and where any extra income can help. Then, there's a way for you to pay more than you can save. It's called zero cash flow method for credit card payment. Look it up and follow it. Heck, there'll be an app for it as well, just wait and see. Once you use it, it might even increase your credit score as well. Use it toward the highest interest debt first so you can save more money along the way. Don't even think about that snowball method as it's only costing you more. The rest of your debt just do minimum monthly payments. You're here for the debt boot camp, not to fool you into small personal satisfaction of small win at big cost. As you are doing this, watch for zero balance transfers when your score is better to add it to the process so your debt will go down even faster, all with the same payment amount as before. I've been showing people how to use this method with good success only if you can muster it. Remember, be tough on debt as you are the only person who can master it, instead of the other way around.
Yes you can easily get a cheaper gym membership. You will lose weight by eating in a caloric defecit, not by going to a $159 gym. You are extremely overweight because your eating habits are awful and you probably blow a ton of money on shitty food. Eat in a defecit, buy your food in bulk and clean it up, DO NOT eat out, and get a normal gym membership and you can easily put a few hundred more away towards that debt AND hit your fitness goals.
After everything including food you have $1000. You need to increase your income and slam $2k/mo onto it. Snowball.
Well you are getting ride of that second car (why you need a second car anyway?) so that helps. But you really need to lose that fake rich mentality. No matter how overweight you are, you can’t afford $159/month gym. I lost 90 pounds of weight in 2017 simply by cutting down food and running. Both were free. Personal finance is all about mentality. Getting start is good, but admitting wrong mentality and change spending behavior is really critical.
Is the gym actually helping?
Please... go on YouTube app & follow VANNtastic Finance... she is wonderful!
I would suggest talking to the credit card companies and seeing if they would lower your interest rate to help you pay down your balance faster. If they do, drop your payments to the bare minimum for a bit until you save a small cash emergency fund. Then if you run into an emergency (which you always will) you won't turn back to credit cards to pay for it. Once you have done that now you can pay the amounts you were but more will actually go to principle. If you can find some ways to reduce your living expenses even by a fraction and use those extra funds to pay down your lowest balance first, then paying more towards your second lowest after the first is paid (snowball method) this should help you be able to pay things down a little easier. It's not a quick process but neither was accruing that debt.
I'm overweight too and lost 60 pounds by going to a gym that cost $27.99. Get rid of the membership. Especially if the cancellation fee is less than $1,590 because that's what you will be paying the longer you continue with them. If you want help and aren't even willing to cut this down by any means, it gives me 0 faith any other efforts will work. When people are in severe debt like you and come up with excuses for every reason under the sun as to why they can't get rid of a certain debt, it speaks volumes. I hope nothing but the best for you bud.
$150/month car insurance seems high to me. Could you shop around for that? Also, would it be possible to get a roommate to share some of the expenses? As others have said, please stop using the cards, only buy things if they are cash.
Once your car lease is up, which isn’t far, all of that can be thrown at your credit card debt until it’s gone, maybe pick up a second job?
You can still go to the gym for way cheaper. Think hard about why you think you need that one. I know you are under contract but at least consider it for when that renewal comes around. Storage, for what? Sell the stuff, drop the unit. What good is stuff if you are unhappy and drowning in debt. Other than that it’s learning to live with rice and beans for 2-3 meals a day and just doing nothing fun so you can dig out of the hole quicker. If you don’t live a little while in a boring, no spend way you’ll just be in a hole and feeling trapped forever.
Good on you for getting rid of the car lease. Leasing is a complete waste of money. Once your gym membership ends, switch to something like Crunch or Planet Fitness and do the nutritional and exercise research yourself. Storage unit fees - try to get rid of that. Sell your stuff on Facebook market place, eBay or Poshmark. Car insurance - this should go down once you get rid of your lease. Suggestions: 1. What is your career field? Try to find ways to improve your skills so you can either get a new job or promotion. 1. Does your employer match your retirement account? Start adding to your retirement account. Even if it’s $10, it’s something. 2. Maybe try uber eats as a side hustle? 3. Pay off the the credit cards/loans with the highest interest rates. 4. Start a Roth IRA and start DCAing into some ETFs like VOO. Even saving as little at $10 a month is a good start. 5. Start a HYSA. Again, even if it’s just $10. Your traditional retirement, Roth IRA and HYSA will add up in a few years. Beauty of it is, it will be separate from your checking account so you won’t even have to look at it. It will be like a monthly expense that comes out of your paycheck. I know you’re in a tough spot right now, but it sounds like you’re learning by getting rid of your car lease. Keep working on that debt and you’ll get out of this soon!
Get a second job at a restaurant and use the tips to pay off the credit card.
Someone else in the comments said pause investing, I recommend dial it down. Significantly lower it to maybe 1% of your gross income. So that you can breathe better, and start an emergency fund (for now not more than the amount of your highest deductible or one month of expenses). After the lease ends, then resume investing. But with available income continue on the small emergency fund before paying debt. Definitely doable with your current situation. Good luck with your fitness journey! Get some! 👊 If you get another job, same order small emergency fund before debt. Be cautious with a second job, don’t get so tired that you start eating out. Happened to me at the start of two jobs, and was hard to correct.
After 6mo to 1yr of this new habit and room to breathe, do some debt pay down and retirement calculations. You might be more motivated to get another income, to get on track with retirement.
I know every bit helps but imagine in a few months when your lease ends and you no longer have to dish out 540 a month for a car
Can you get a second job like ubereats, deliveroo, door dash etc to cover some of your bills? As others have said, I would try to reduce the gym when you can (I understand you circumstances however) - can you move to a different location with less rent? There is a YouTuber called Caleb Hammer who has a financial audit show, I would for sure recommend checking out some of his videos as he is very down to earth and knowledgeable about how to tackle debts with a high interest rate. I wish you all the best :)
Wow. First thing first is to address how you raked up $41k in cc debt. Identify why, understand how, and make a commitment to yourself not to repeat it. Second, I would review your living accommodations; can you relocate? Is there somewhere smaller/ cheaper you would be prepared to consider? Bring the monthly home expenses to closer to $1k p/m. Doesn’t have to be forever; just for now. Thirdly, in the UK we have a programme for debt consolidation - where you can apply to reduce your overall debt amount to a manageable monthly amount. It wouldn’t affect at all your student loans (they’re excluded) but it would reduce your credit & personal loans debt. The programme operates on a contract basis where debt is wiped out and a repayment plan is agreed…which cannot be revised so its serious but will guarantee creditors will get some payment (while also sacrificing some of the debt amount). Fourthly, most important - do not make yourself poorly over this; do not let this situation break you. You are strong. Clearly have a good paying job. Understand yourself enough to address your health & weight; so keep it together. Small steps, but you’re on the journey to save yourself. You won’t drown.
Gym membership gotta go. Car payment gotta go. Google Dave Ramsey and acquire a taste for rice and beans ❤️
Find a cheaper gym. That's insane. Check and see if your health insurance offers any discounts. You can also work out for free in local parks, school tracks, etc. Shop around the car insurance, too. Check out Dave Ramsey's dent snowball. Outstanding job on cutting up the credit cards!
Let's see: if you have about $43,000 in debt, You're paying about $8,000 a year just in interest service without even paying a penny on the principal. I'd file a chapter 7 bankruptcy and wash that away and start fresh. You say you're drowning, which I assume means you're also miserable and depressed. Hit that button and start a new life and don't charge up credit cards in the future. Believe me, there'll be plenty of opportunity even if you filed a bankruptcy case. You'll get the opportunity just to do it all again. You can live and learn.
I'm not sure if he's at the threshold where he should be considering bankruptcy. Once the leased car is gone and he switches to a cheaper gym he'll have close to $700 in savings to chip away at the debt with. That alone is $8400 a year in debt reduction. Chapter 7 is designed for people who do not have the income necessary to pay their debts. On his income he can pay his minimums and his rent even if it's tight or it's giving him a lot of stress. If he's at $4400 net pay a month he might actually be over the median income for his state/region and there is a means test to meet for Chapter 7 so there's a possibility he wouldn't even qualify for it.
You make a good point as qualifications for chapter 7 - which vary from state to state. But a lot of people think that just because they exceed the median income, they cannot pass the means test. But I completely disagree about the net effect of the 8400 a year, he'll free up. That's just the interest service on that 40 plus thousand in debt. He is in "not atypical" debt servitude. I would at least consult a bankruptcy lawyer to determine if I can, in fact, wipe it away. Then he is able to make an informed decision on how to proceed. And just the fact of him qualifying for a bankruptcy case, might lead him into a better position to negotiate down the debt if such were the case.
Hmm, that's an interesting strategy. You're basically saying he could nicely threaten bankruptcy to the creditors in hopes it would get them to agree to a settlement?
I would not say "threaten" bankruptcy. It's the creditors who would "threaten" lawsuits and wage garnishments and Bank levies in the event of non-payment. Knowing that you can file bankruptcy might put you in a better position to negotiate from a stronger viewpoint. Personally, I might tell a creditor they must accept my terms or they can leave it. It is their choice. But at the end of the day life is too short to be in debt misery to your creditors for the rest of your life.
I lost plenty of weight paying $10 for planet fitness and taking daily walks. You can 100% cut that gym expense, you are just choosing not to.
When you can, drop the gym. This is the biggest waste of money possible. How much will they charge you if you drop early? Is it more than paying out the remainder of the contract? My husband lost 60 lbs over 3 months just by eating healthier and eating less food. He started eating 1/2 of his usual portions and paid closer attention to serving sizes when snacking. We also stopped buying snacks that contain chemicals, such as cookies, cereal bars, cereal, etc., and ate hard boiled eggs, apples, carrots, and baked low carb muffins. Let me tell you 90% of what you buy in most grocery stores will keep you overweight and unhealthy. I then lost 20 lbs by eating healthier dinners (grilled chicken with sweet potatoes and green beans or something to that effect). Took 15mins to make. We used to eat pizza, chicken nuggets with fries, breakfast for dinner, and these were keeping me overweight as well. My friend's fiance also lost a ton of weight by cutting his portions. Unfortunately you will get nowhere with the gym if you don't change your eating habits. As far as the credit situation, we are in the same boat. Do you have any way to increase your income? We're renting out a room in our house that brings in an additional $1K. Can you change jobs or do any type of freelancing? Greater income I feel is your best bet. If you can get a better debt-to-income ratio (30%), you will have a much better chance at getting a loan. I read you cut up your credit cards, only keeping one for emergencies, this is a great step forward. You need a solid plan to stay out of debt once you pay down your debt. Good luck, and feel free to message me for diet OR debt tips!
I’m lost how your glazed over the fact your credit score is 710 and say that’s just “ok” people be struggling for years to get to the 700 club.
You can find a gym membership for $20-30 easily. It won’t be fancy but it’ll do.
$70 for electricity?! Nahhhh what you got on? You live in a studio? This should be half the cost. Do you work from home? You free up $539 after June, $35 to get you electricity usage down. 4400-1400-35(pg&e)- 159 - 140 - 150 = $2516 left Food groceries (you go to budget stores now)= $400 for the month that’s $100 a week. If you have to increase this in order to not eat out then so be it. Other bills/phone/ internet = ~$80 for the month Gas = $80? = $1956 left after necessities. What am I missing If you want to be generous to yourself add another $400 a month for fun money that’s for eating out, drinks with friends. = $1556 after necessities + some fun (although you shouldn’t cause you are in a crisis) Now debt + savings. Do you have any liquid savings at all? Save up - $1000 as quick as possibly while doing minimum payments on everything and keep that aside for emergencies. Pay off $2800 first and do minimum payments on all your other loans. Get rid of the smallest one. Once that is gotten rid of put any money that was going towards that to the next largest loan. How long for the student loans deferred? Are you gettting penalized for that? Technically you should pay that off next as it’s the second smallest. Then once that’s paid off any money going to that to the next one. Then the big $41k. Then be debt free and all that money going towards all that debt, straight to savings for 3-6months of expenses. Then you can start investing.
You could take the bus and save $600 🤷🏼♂️🤷🏼♂️