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How long will it take me to clear 10k debt?

post #1 of 49
Thread Starter 
I'd post this in the Money section, but unfortunately I don't have 100 posts...even though I've been a member for close to 2 years - maybe a moderator can move it?

Anyways, I'm fresh out of University, I've got about $4000 on my credit card at a 12% rate (I know...I know..at least the rate is low). And $6100 on student loans that I don't need to start making payments on until October.

My new job starts on August 16th, I make about $3500 canadian after taxes.

Expenses per month
~$500 for Rent
~$250 for Groceries
~$100 for cell phone
~$850 for Car payments/Insurance/Gas
~$300 miscellaneous

That leaves me with about $1500 a month, should I be making lump sum payments, or paying strict bi-weekly payments?

I hate debt - I recently got turned down after applying for a better credit card
post #2 of 49
Live at home for a year. Barring that, minimize your partying/hobby spending and throw it all at the CC and student loans.
post #3 of 49
Thread Starter 
Quote:
Originally Posted by Jodum5 View Post
Live at home for a year. Barring that, minimize your partying/hobby spending and throw it all at the CC and student loans.

That was originally my plan, unfortunately I got a job in a different city. Luckily some friends have a room for rent in their house, so I can escape with relatively cheap monthly payments. I figure now that I'm a full-time worker partying will decrease..though I'm not sure about the clothes/traveling addictions
post #4 of 49
Quote:
Originally Posted by 1up View Post
That leaves me with about $1500 a month, should I be making lump sum payments, or paying strict bi-weekly payments?

A hundred for cell phone? You can probably shave at the very least $20/month off that - if not up to $50.

Your rent is cheap. I wouldnt move home unless you really have to - just cause I hate living at home. Maybe get a roommate?


Tackle that CC debt first and pay it off as fast as you can while making the minimum for your student loan debt. Its only $4k, so with discipline you should be able to clear it while paying the student loan in 5-6 months.

Whats your student loan rate? Some say its "good" debt to have if the interest rate is really low and you can make more in other investments. But Im not sure how that applies in our current climate or your situation.

Make sure you also save up a rainy day fund. The first few years suck man, but just be wise and disciplined and you can do it.
post #5 of 49
Quote:
Originally Posted by 1up View Post
That was originally my plan, unfortunately I got a job in a different city. Luckily some friends have a room for rent in their house, so I can escape with relatively cheap monthly payments. I figure now that I'm a full-time worker partying will decrease..though I'm not sure about the clothes/traveling addictions

Not necessarily true. Add in happy hours and the fact that now you can buy good shit at bars instead of Natty Light and it all equals out.

You arent going out on Tuesday nights anymore, but you hit it just the same on saturday with the roomies, only with better more expensive stuff.
post #6 of 49
What's the rate on your student loans? I think there's a way to negotiate better rates with your credit card company, IE they lower their rate if you promise to pay back within a certain timeframe etc. Generally speaking you should probably pay off your CC debt first (it's the worst). A decent plan is to tighten up and just suck it up for 3-6 months and become debt free. Which is manageable given your income.
post #7 of 49
Thread Starter 
Quote:
Originally Posted by Davidko19 View Post
A hundred for cell phone? You can probably shave at the very least $20/month off that - if not up to $50.

Your rent is cheap. I wouldnt move home unless you really have to - just cause I hate living at home. Maybe get a roommate?


Tackle that CC debt first and pay it off as fast as you can while making the minimum for your student loan debt. Its only $4k, so with discipline you should be able to clear it while paying the student loan in 5-6 months.

Whats your student loan rate? Some say its "good" debt to have if the interest rate is really low and you can make more in other investments. But Im not sure how that applies in our current climate or your situation.

Make sure you also save up a rainy day fund. The first few years suck man, but just be wise and disciplined and you can do it.

Very wise and encouraging words - thank you. My cell phone bill is actually $55 a month, but it's been up the past couple months just from long distance (calling back and forth to the place I'm moving to). I tried to create a worst case scenario, so I was fairly generous with teh costs.

My student loan rate is prime + 2.5%, so I'll pay $300ish in a year interest if I DONT make any payments, so yeah it's relatively low, but I'd prefer to escape it now while I can.

Then again I wouldn't mind tucking away a few hundred every month if I can, is it possible to have your bank automatically deduct a portion of your salary deposits and move it to a seperate account? Out of sight out of mind I guess?
post #8 of 49
Thread Starter 
Quote:
Originally Posted by Davidko19 View Post
Not necessarily true. Add in happy hours and the fact that now you can buy good shit at bars instead of Natty Light and it all equals out.

You arent going out on Tuesday nights anymore, but you hit it just the same on saturday with the roomies, only with better more expensive stuff.

That's very true, the option to pursue long-weekend trips may also rack up some fees. For the most part many of my friends are still working remedial jobs (in the new city I'm going to), so I don't think they'll be spending copious amounts of money - good company I guess...
post #9 of 49
Thread Starter 
Quote:
Originally Posted by Valor View Post
What's the rate on your student loans?

I think there's a way to negotiate better rates with your credit card company, IE they lower their rate if you promise to pay back within a certain timeframe etc. Generally speaking you should probably pay off your CC debt first (it's the worst). A decent plan is to tighten up and just suck it up for 3-6 months and become debt free. Which is manageable given your income.

I've talked to my credit card company, I have the lowest possible rate (it's a student card), and also the highest possible limit (ha-ha). I didn't exercise the option of lowering my rate, that's definitely something I should explore.

Thanks for the responses guys, it's much appreciated.
post #10 of 49
Quote:
Originally Posted by 1up View Post
Very wise and encouraging words - thank you. My cell phone bill is actually $55 a month, but it's been up the past couple months just from long distance (calling back and forth to the place I'm moving to). I tried to create a worst case scenario, so I was fairly generous with teh costs.

My student loan rate is prime + 2.5%, so I'll pay $300ish in a year interest if I DONT make any payments, so yeah it's relatively low, but I'd prefer to escape it now while I can.

Then again I wouldn't mind tucking away a few hundred every month if I can, is it possible to have your bank automatically deduct a portion of your salary deposits and move it to a seperate account? Out of sight out of mind I guess?

There is absolutely no point in saving if you can't make an investment past the 12% of your CC. You should pay the max you can afford to your CC and the minimum to your student loans until you are clear on the CC.
post #11 of 49
You are spending entirely too much on the car. Get rid of it and get one you can afford.
post #12 of 49
Quote:
Originally Posted by Superfluous Man View Post
You are spending entirely too much on the car. Get rid of it and get one you can afford.

+1....granted that figure is for gas, insurance, etc, but I would not spend that much money on a constantly depreciating car. I wish I had learned this lesson a couple years ago....
post #13 of 49
Thread Starter 
Quote:
Originally Posted by Superfluous Man View Post
You are spending entirely too much on the car. Get rid of it and get one you can afford.

I've actually never owned a car, I'm amidst purchasing one, I probably should have mentioned that.

First of all, I need a reliable truck (so I'm looking in the 15-20k range, something with relatively low mileage). I need a 4WD car, I live in a city where it's pretty bad road conditions (winter for 8 months), and I'm driving to the outskirts of the city; my commute is about 70 km a day.

The amount I drew up was an estimation, and that being said a generous one. The payments won't necessarily be to a dealership or financed through one, but to my bank after I take out a loan (or to my Dad if I don't get approved for a loan).
post #14 of 49
A late 90s or early 00s Toyota Tacoma will be more reliable than any other truck in that price, will get better fuel economy and will handle the worst roads in stock trim. They can be purchased for under $10k.
post #15 of 49
Thread Starter 
Quote:
Originally Posted by Superfluous Man View Post
A late 90s or early 00s Toyota Tacoma will be more reliable than any other truck in that price, will get better fuel economy and will handle the worst roads in stock trim. They can be purchased for under $10k.

I'm looking at an 03-06 4runner actually. I guess a cross between luxury and durability? Do you think it's unrealistic for me to spend a few thousand more to get what I want? Am I in a pretty bad financial situation?

I feel like I've spent the past 5 years budgeting while being a student, driving my parents minivan everywhere, and I sort of want to indulge a little bit. That being said part of the reason I'm in debt is because I've indulged a little too much here and there (though most of the debt is from paying for school and school related thing). I also feel like I'll only be at this position for 2-3 years before getting transferred to a corporate office, at which time I definitely wouldn't want a truck, whereas an SUV could still be versatile?

Sorry I know I initially said "truck", but that's just habit for me to refer to bigger SUV's as trucks too, redneck Canadian thing I guess.
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