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
Bankruptcy is a tempting option when faced with piles of debt, but it’s not as simple as it sounds. Take a look and see if there are ways to avoid bankruptcy, like a debt snowball. If the debt is truly overwhelming then be sure to know your options before you start down that road.
Getting out of debt is a huge accomplishment. Congrats! Unfortunately, you may not be celebrating for long if you discover that you still have bad credit even after your debt is gone. It’s a common problem, but there are steps you can take. How to raise your credit score after your debts are paid off.
Should you postpone contributing to your 401(k) to pay off debt? When it makes sense to delay investing until you debt is paid off.
Everyone knows paying bills late is bad for your credit score. But you might not realize that the lifetime cost of missed payments could be higher than you think.
We give the Capital One Venture Credit Card a top spot among travel rewards cards. Choose between a no annual fee card that pays 1.5 miles on every purchase or earn double miles for a modest annual fee.
Simple rewards, no annual fee, and award-winning customer service make this new miles credit card worth your consideration. Read more in our complete Discover it® Miles review.
Credit card rewards are an oft-overlooked way to boost your bottom line. Stop redeeming $25 gift cards and start taking your credit card points to the bank.
You thought you were smart by avoiding credit in your early 20s. Now, you face the “credit catch-22″: You need to build credit but with your limited history, you can’t get approved for a credit card. Here are your options.
Withdrawing from your 401(k) can be a tempting way to pay overdue bills, but it’s almost always a mistake. The IRS is the only creditor who can legally seize assets in your 401(k).
Planning on taking a credit card overseas? Make sure you pack the right plastic. Some cards tack on hefty fees for foreign charges and aren’t as widely accepted. We explain why having the right card matters and offer a few suggestions.