People my age make horrible financial decisions. I just got my credit score back to 630 from the low 400s and I apparently have a credit score that is above average for my age group! That is crazy to me. Debt is a real beast, and it has taken a long time (like 5 years), but finally my husband and I are digging ourselves out bit by bit.
Together, my husband and I accumulated over $30,000 in debt through credit cards, used car loans, and missed payments from not having enough money for them and necessities. For the first 5 years of our relationship, we were low income, depressed, scared, and had no idea what we were doing. Don't get me wrong, we still have no idea what we're doing, but we came up with a plan to pay back our debts that has been working for us for just about 6 months now. It's not a very long time, but with this new routine, we have money to fall back on if things get dicey (and they will at some point), and we are set to pay all of our debts within roughly 3-4 years comfortably!
With the full-time jobs we have now, we each get a check of roughly $1,100 each every two weeks. We take $700 from each check and deposit that into a joint account that covers our rent ($1600/month), utilities ($200/month), phones ($100/month), debt payments ($500/month), and miscellaneous other things. What is left over from each check is used for groceries and personal money.
When we first thought about setting up paying for bills and debts this way, we were really worried about setting up payments to debt collectors. Everywhere you look in media, a debt collector is the bad guy, and you should avoid them at all cost, right? Well listen. If you want to get your debt cleared and can get enough money every month to make a small payment to get rid of that debt, don't be afraid to make that call. Every time I call a debt collector, they may have a minimum amount I can pay per month, but they have worked with me so that I can get that debt paid somehow.
The best part about setting up minimum payments with multiple debts in an account you put a set amount in is that once a debt is paid off, you can add that amount to another debt and pay that one off even sooner. My advice, and the advice I was given by older, wiser people, was to start small. Make your biggest payment to your smallest debt, then add what big payment to the payment of the next smallest, and soon enough you're paying a super huge payment every month to your biggest debt, and you pay that off in no time! I know there are gonna be bumps in this road, but for the first time in my life, I feel confident enough that I can handle those bumps!
Sit down and do the math! You might be surprised by how much you have left over after necessities. I know I was!
