22 years old and need help

**snafu** · 12-29-2013, 01:54 PM

I'm glad that you've decided to take control of your finances and get out of debt. It's very important in this society of credit because a damaged credit history takes a long time to fix and can cause a lot of serious problems in your future. Did you know a lot of employers review the credit history of potential employees as part of their screening process to decide who they will interview.

For the short term, I suggest you take your debit card out of your wallet and leave it in a safe place at home. You can easily function with cash. If you list your bills, total owned on each, monthly payment and interest rate, experienced SA posters can make practical suggestions. For example, list your Student Loans, sum owed, monthly payment, arrears, interest rate. Are you making car payments? How much are you spending each week or pay cycle for gas, insurance, fixes? Do you pay any rent, food and utilities at home? How much for a cell phone etc.?

It really helps to write down every single dollar spent and on what. It's a chore I know but it makes you think if your really need that item and tells you where all the money goes. Realistically you will need to make some changes until your cash flow catches up to the debt you've already signed for.

**flagrl** · 12-29-2013, 02:55 PM

thank you for your advice here is my list,
rent $50 a week,
truck $320
phone $120
gym $34
sirius radio $18
gas $50 a week

school loans, havent started paying, I pushed it under the rug hoping it will go away, so now i owe $976, I don't know how much monthly they charge.
insurance i just got dropped from since i didnt pay it cause i bought stuff i didnt need instead,so saving up to get insurance again
i spend way way way to much on shopping for stuff i dont need, which is 99% of my problem

**TheKayla** · 12-29-2013, 03:12 PM

i spend way way way to much on shopping for stuff i dont need, which is 99% of my problem

First of all, you need to figure out how much you owe on your loans, and what the payments are. You need a full view of your finances. Start paying them immediately -- they aren't going to go away, and you're only making it worse by avoiding them and not paying against them. Use this time when you're young and have the opportunity to live cheap to get them taken care of.

If shopping is your biggest vice -- you just need to change your habits. As a challenge, try not to spend any money except for on needs just for one month: bills, food, rent, and gas only for work/errands. It may be an eye opener to how attached you are to the habit of spending frivolously. It will take will power, but it can be done and could very well trigger some healthier spending habits along the way. Going cold turkey with meaningless spending for a month is a great psychological trick to boost your habits for the better.

After that, create a budget for yourself for discretionary spending. It could be for your vices, including shopping for yourself. Make sure this amount fits within your budget -- AFTER YOUR BILLS. When it's out, it's out -- no exceptions. No borrowing from the future with credit cards.

If it's still too difficult, calculate your average spending, and cut out a category. Cut down 10% of your spending, and gradually cut back. I always suggest going cold turkey on cutting spending though as much as possible. Best of luck!

**Buyingahome** · 12-29-2013, 03:41 PM

Originally posted by flagrl View Post

thank you for your advice here is my list,
rent $50 a week,
truck $320
phone $120
gym $34
sirius radio $18
gas $50 a week

school loans, havent started paying, I pushed it under the rug hoping it will go away, so now i owe $976, I don't know how much monthly they charge.
insurance i just got dropped from since i didnt pay it cause i bought stuff i didnt need instead,so saving up to get insurance again
i spend way way way to much on shopping for stuff i dont need, which is 99% of my problem

what type of degree did you get from your school loans?
what line of work/job do you work in now?

i am trying to figure out if your income will increase over the years or if it is in a related field to your educational degree.

**kyoko** · 12-29-2013, 09:07 PM

You recognize your spending problem, which is the first step to move forward, so I applaud that. You are also willing to do the envelope system, and I strongly support it.

Just because you recognized the problem, that does not necessary mean you can get rid of that problem completely, because our behavior towards money has a lot to do with emotional and psychological elements. It takes time and some effort, and sometimes some process to get recover. You may want to check the debtors anonymous or NPO that provides a financial counseling while you switch from debit/credit card to envelope system. Spending money on things you don't need instead of things you need (such as your car insurance) is a serious problem. It is the time to identify what you need and want, and prioritize them accordingly.

Also it is a typical reaction that we become denial and hope our debt (in your case, Student Loans... but do you have other credit card debt or anything? You have not written down in your list) will go away, but in reality, it won't. Student Loan will never go away even at the point of bankruptcy, so make sure you will start paying back. You can check your student loan lenders to see if you could be eligible for the temporarily deferment or forbearance due to your economy hardship.

As for the budget, list how much you take home, and subtract those lists you gave us. Make sure you include everything you owe... as well as the student loans. For your student loans, pull the bill from the rug

and check the monthly due. Subtract that amount from your income as well.

And here are some questions:

How much do you have left?
How much are your medical and misc debt?
How much have you paid your auto insurance?

Kyoko

**disneysteve** · 12-30-2013, 01:02 AM

Shopping is one issue but another big problem is you spent way too much on your car. The rule of thumb is that your payment shouldn't exceed 10% of your monthly income. You are spending over 20%.

How much is the car worth and how much do you owe?

**Jerry91** · 12-30-2013, 10:49 PM

You know where your fault lies. So, you will have to make sure that you control this habit of shopping. You will have to take steps to avoid buying unnecessary things. I personally think that the envelope method will be well suited for you. You can take help of various online budgeting softwares for more help.

**Augustine** · 12-30-2013, 11:53 PM

I think the solution to your problem goes beyond budgeting. Unless you control your spending habits, no budgeting system will work for you. Do you have any financial goals? If not, now would be a good time to set them so that your spending patterns are aligned towards your financial targets.

**flagrl** · 12-31-2013, 03:06 AM

Thanks guys. I will answer more in depth tonight after work. My car is worth 7,000
My payments are so high cause my credit is so bad and I needed a car so I can work. I will check debtors anonymous or npo out. Like o said I will respond more tonight.
Thank you for all of your responses.

**Buyingahome** · 12-31-2013, 06:18 AM

Originally posted by flagrl View Post

thank you for your advice here is my list,
rent $50 a week,
truck $320
phone $120
gym $34
sirius radio $18
gas $50 a week

school loans, havent started paying, I pushed it under the rug hoping it will go away, so now i owe $976, I don't know how much monthly they charge.
insurance i just got dropped from since i didnt pay it cause i bought stuff i didnt need instead,so saving up to get insurance again
i spend way way way to much on shopping for stuff i dont need, which is 99% of my problem

I really like your idea to start the envelope system, but to do this, you need to sit down and write out a very detailed budget and account for every dollar of your monthly income.

It is good that you know your spending habits are the problem. If you cut up all your "plastic" and only use cash, it will stop you from doing any online shopping which is a good idea.

your rent is very low, did you mean to type $500? or do you have a lot of roommates? or are you living with a husband/boyfriend?
Your gas of $50 per week is a bit high, does that mean you get low gas mileage or do you drive a lot too and from work or just for fun?

i know it doesnt sound like a lot, but every dollar counts, and right off the bat you need to cancel the radio and save $216 per year.
Next, the Gym membership sounds high, I am sure you can find something for half that cost, but be honest, how often do you go to the gym each week, and do you utilize all the equipment they offer? as your name suggests, if you live in florida, you should be able to do many activities outside. If you cut that bill in half you save $204 and if you eliminate the gym membership you can save $408 this year.

To make it easier for you to reply later tonight, I am including these questions I previously asked: what is your college degree? What is your job(s) that you work at today? Is this job directly related to your degree? And do you have a chance to advance within the company you now work for? I know you already work 40 hours per week, but is there any part time job you might be able to add or something you can do from home? Do you have any special skills or talents? i know this is a lot of questions but this is a good place for us to start.

**disneysteve** · 12-31-2013, 07:13 AM

Originally posted by flagrl View Post

My car is worth 7,000

And how much is it worth? The point is to see if you could sell it and buy something cheaper.

I understand that you needed a car for work but that doesn't mean you needed to spend what you spent. You could have gotten a perfectly good car for $3,000-5,000 and not had a $320 monthly payment.

22 years old and need help