If my readers don’t succeed, I’m a failure. Studenomics is all about you guys and helping you reach financial freedom.
Today we’re all going back to school. We’re going to help a reader figure out her finances, get out of debt, and live a better life where money isn’t an issue.
Welcome Jacquelyn, a young lady looking to slap her debt around and live a better life.
Before anything else is said, I need to thank Jacquelyn for having the guts to do this. She’s fully transparent about her finances. So please go easy on her. She didn’t have to do this, but she’s serious about improving her situation.
What’s Jacquelyn’s current situation?
First, let’s look at her debt/banking setup.
Credit Union of Denver:
Credit Union of Denver Credit Card:
$1,250.43 @ 9.4%
Credit Limit = $2,000.00
$771.21 @ 3.99% until 12/2014
Credit Limit = $1000.00
$4,637.25 @ 20.99%
Credit Limit = $7,500.00
$2,000.00 have until 12/9/14 to pay off interest-free.
$23,132 @ 6.55% (Direct Debit)
$4,157 @ 6.55% (Direct Debit)
Fox Valley CU:
$404.69 = Vested Balance
What are the fixed expenses like?
- Rent is $572.50 currently with utilities averaging from $90-100/month. All amounts are debited from my account and roommate pays back in cash.
- Loans debit $360.05 every month.
- My phone bill is $70/month on average.
- Renter’s insurance is $20.17 monthly.
- My Tollway Transponder is about $50/month.
- Spotify is $9.99/month.
- LA Tan is $2.99/month since I have it frozen (haven’t used it in years).
- Automobile Gas ranges from $200-300/month.
What are the problem areas for Jacquelyn?
I asked to see what the major issues were. According to her, the problems are:
- The amounts I pay for my credit cards are not consistent and are what I’m trying to fix.
- Will be moving so that’s where my money will be directed.
- Right now, I am trying to figure out a cheaper way to work because it takes a tank and a half every week with this new job since it’s so far from me.
- My starter went out in Canada which is why my Capital One balance went up significantly because I was a bit strapped.
- I try to be more aware but I catch myself with the mindset of “oh it’s just $10”. Recently spent $60 on a date night.
- We have started cooking in more, instead of going out to eat, that saves lots of money, but I get bored in my apartment.
- Need a structured system for paying off debt.
What other financials should you know?
I got a new job as a Manager in Chicago making $55,000.00 annually. I make an extra $8,000 with this new job.
I’ll be looking into getting a job at the airport once we have moved to make extra cash and save on flights to see family.
We will be moving in together the end of August. Partner has been helping making some payments on the Capitol One credit card. I’ve asked her to help me with the Discover to get that one down to $0 then chipping away at Capitol One. She’s on board.
Let’s look at Jacquelyn’s spending in August!
Huge props to Jacquelyn for doing this. I’m so proud of her for sticking through the whole month and not giving up.
- Money spent: $4501.6
- Income: $5,595.75
(I messed up the chart a bit because I suck at editing. The information is all there though. Click on it for a full view.)
How can Jacquelyn improve her financial situation and destroy the debt?
I can’t really sugarcoat it. There’s good news and bad news. The good news is that Jacquelyn can easily get out of debt and reach financial freedom. The bad news is that it won’t be easy, it’s going to take a long time, and she’s going to have to sacrifice. She makes more money than people that have killed more debt. She’s young and ambitious.
I always tell my friends that you can’t get mad about the results you didn’t get with the work you didn’t do.
My tips are simple and are designed to provide structure:
Focus on debt 100%!
First, find a debt strategy that works for you.
You can either attack the lowest debt first or the one with the highest interest rate. You can also consider consolidating your debts.
Then, you focus on this debt 100%. Your goal should be to pay off your debt. This should be all that you think about 24/7. This is your project for the next little while. You need to kill the debt so that you can enjoy life.
You should put every extra dollar towards the debt.
I would even go as far as to suggest selling some stuff. Host a yard sale, put some stuff up on Kijiji, and get rid of it for money.
Cut back expenses.
There are two ways to cut back on expenses:
- The major/fixed purchases. I would suggest cutting back the cell phone plan, finding a way to carpool to work/take the bus, and even consider selling the car.
- Everyday life. It’s cool to go for coffee. I’m the biggest caffeine addict. The thing is, there’s no reason to be spending $10 or $15 on one Starbucks trip.
You can’t avoid this one. You have to work more. You already know this though. You may have to find a part-time job on the weekends to help out with payments. Since your partner is on board, maybe you can try finding work together on the weekends.
Have fun on the cheap.
The trick to staying sane is to get wild without going broke. I still want you to have fun. Just try to do it on the cheap. Drink at home, host house parties, stay local, and try take advantage of free events in your community.
What are some must read articles?
It’s time to go back to school if you’re not 100% on top of your finances. Actually, this is the opposite of school. Lame personal finance advice comes to Studenomics to die.
I didn’t want to repeat myself so I’m sharing the must read articles for Jacquelyn and all readers in a similar situation.
How-to drink without going broke — This is key. I can’t tell anyone not to party. I would be the world’s biggest hypocrite. I can only suggest ways to save money on this expense and to not let it consume your life.
Start an online business in 6 easy steps — You can start your own online business and make money in the future (it won’t be easy). This is a fun hobby that could POSSIBLY lead to money down the road.
How you can save $25k by 25 — Proven tactics that have worked for me. No excuses! The title says it all and it applies to every age.
The ultimate guide to crushing your debt — Over 2,000 words on destroying your debt. The best possible guide on the whole damn web. You’ll find a strategy that works for you in here.
Add play to your life and never feel miserable again — A quick guide to helping you feel good. Being in debt can really bring you down. You need to do everything possible to stay positive.
That’s enough for now, I don’t want you to experience information overload.
This is just the beginning of the journey for Jacquelyn. I’ve helped many readers reach their financial goals. This is the first time that I’m actually doing it in such a public forum.
It’s time for you guys to help out. What advice do you have to share? What has worked for you?