How did I get here?
That’s what I thought when — at just 26 — I was sitting in over $80,000 of debt. Maybe you’re wondering the same thing.
However you got into debt, you can get out of debt. All it takes is the determination to do what it takes…and time.
Debt may be a four-letter word, but it doesn’t have to be a bad one. Debt helps companies finance growth and create jobs. Debt enables students from underprivileged neighborhoods to become doctors. Debt helps young families buy homes. Unfortunately, there’s a thin line between how much debt can lift up your financial situation and debt that can crush it.
Too much personal debt becomes a cancer within our finances; the interest payments grow and grow until there’s not enough money left over to pay the rent, buy the groceries, or anything else. When that happens, we may simply borrow more to forestall the inevitable total collapse of our finances. It may buy time, but it makes the situation that much time.
Confronting your debt
If you’ve realized that you need to get a handle on your debt, congrats on taking the first step, and thanks for checking out Money Under 30.
Depending on the kind and amount of debt you face and other aspects of your situation (like your income, your other expenses, and your credit rating), the best route to get out of debt may be slightly different.
If you’re dealing with a mix of student loans and consumer debt and simply want to get out of debt as soon as possible on your given income (even though it may take years), establishing your own debt repayment plan and sticking to these seven steps may be helpful.
If you simply have a credit card balance that’s gotten a out of hand but have the income to pay it off in a year or two and good credit, transferring the balance to a 0 percent card and paying it off diligently may be an easy option.
If, however, you’ve maxed out credit cards or have already tried juggling balances and are now behind on payments (or close), seeking help from a debt consolidation company may be an option. In extreme cases, bankruptcy may be an option, too.
Whatever route you choose, know that as you work to get out of debt, you’re not alone.
Today, over 65 percent of four-year college students graduate with student loans. Their average debt is over $24,000 and climbing. And then there are credit cards, which sooner or later dupe many of us (including me) into racking up debts at ungodly interest rates.
But you can beat debt. I know because I did. I paid off my $80,000 in just over three years. Inexperience and stupidity got me into debt, but determination and hard work got me out. I started this blog because:
- I want to help you stay out of debt and/or pay off your debt.
- I want to share my experiences learning about money (and redefining my relationship with money) with you.
Perhaps the best advice I can give you repaying debt is this: Consider — at least consider — finding ways to EARN MORE money. I hustled for raises at work, transfered companies, got a second job AND started a business…all in the name of beating debt faster. And it worked. Just saying.
- Repaying Stafford Loans
- Student Loan Consolidation
- Risky Business: When Student Loans Go to Collections
- 10 Things You Should Know About Debt Management Programs
- Does Debt Settlement Work?
- When You Need to File Bankruptcy
Recent Posts on Debt
Credit cards can provide easy access to loads of funds, but don’t forget they are designed by banks to get you to pay more than what you bargained for.
Credit Karma — one of our favorite sites for getting a truly free credit score — announced this week it now offers free credit reports as well. There’s still no catch, which is why Credit Karma remains our favorite place to quickly and easily check your own credit data at absolutely zero cost.
Our Barclaycard Ring credit card review: You want to avoid carrying a balance on credit cards, but sometimes you can’t avoid it. The Ring card offers a low regular APR, no balance transfer fee, and 1 percent cash back on transferred balances to save interest when you can’t pay off your credit card in full.
Building good credit takes time: the longer you use credit well, the higher your credit score will climb. That said, there are some tricks you can use to build credit from scratch or improve your credit rating more quickly.
Having trouble keeping up with student loan payments? Do NOT stick your head in the sand! The consequences for defaulting on student loans are more severe than you even imagine.
Upstart provides personal loans, no credit required. Upstart is geared towards for college graduates with good jobs who can’t get approved for traditional loans or credit cards simply because they haven’t used credit long enough.
It’s easy to finger colleges’ runaway tuition costs for America’s student debt crisis, but borrowers aren’t always blameless. Four mistakes students make with student loans that can make paying for school unnecessarily more costly.
Interest rates ticked 0.8 percent higher on all federal student loans as of July 1, 2014. Why now’s the time to check your payments and make a payoff plan.
The online service helps users out of debt with a free repayment plan and — for a monthly fee — can help you automate payments so you don’t slip up.
I’ve have started thinking about using a rewards card but I’m concerned about how opening a new card will affect my credit. Is this a legitimate concern?