I Am 20 year old College Student with $15,900 Debt !?

Question

Hey everyone,

I'm 20 years old. I go to college and it's my 2nd year. I have a full time job. I am $15,900 in Debt with Credit Cards and Personal Loans. I am living at home with parents.

I Owe on credit card,
Bank of America: $7,900 ( Minimum Payment is $150)
Personal Loan: $8000 (Minimum Payment is $238)

Total : $15,900

I make $1600 a month working Full Time.

My other expenses are(Monthly)
Car Insurance:$180
Phone Bill: $65

Ok, what I also didn't tell you guys is that I had a Gambling Problem. $10,000 of that Debt is due to my gambling habits. I learned my lesson and I want to start out Fresh!!
How many years would it take for me to get rid of this debt? I want to live a nice life and for the past 2 years my whole life has been a struggle because of this debt.
Could Anyone help with a financial Plan for me? And the quickest way?
Thanks
~CL

Answer 1

Between working full time and going to college, I dont know how you found the time to lose all that money gambling. Anyway. The financial plan for you should be to really cut all of your expenses. $65 a month for a phone? Thats a big plan. Do you really need the phone that badly? If not, thats close to $800 a year you can put towards paying down your debt. You dont say if your $1600 per month is before or after taxes, by the way. You car insurance rate is also pretty outrageous by the way- your car insurance runs nearly 3 times what I pay. Do you drive a sports car? If so, I would suggest considering selling it and getting something extremely practical like a Civic, Yaris, Fit, or Corolla- used if you can. Then put the extra $$ towards paying your debt. Live at home with Mom and Dad as long as possible, and dont spend more money, unless you positively have to. Put every cent you make into paying down your debt. If you can put $1000 a month towards you debt, you could get this puppy paid off in less than 2 years, probably only a year if you get some money from selling your car and going to something cheaper. Make paying this off your top priority- the interest you pay on that kind of debt is crazy, and that interest is money that you could be saving, investing, or hell, just doing something fun with. You dont have anywhere that kind of freedom right now though.

Answer 2

So how much of the $1355 balance of you income are you throwing on that debt?

Make a strict budget. Get rid of all the extras -- cell phone, eating out, new clothes, etc. Put every penny you can squeeze on the highest interest rate debt, while making the minimum payment on the rest. When the highest rate is paid off, move to the next.

Figure out ways to increase income. That might be tough with school but doing odd jobs like mowing lawns, raking leaves, etc on the weekends or maybe deliverying pizza (flexible hours and you get the leftovers).

If you really work at it, you could pay all that off in 2 or 3 years.

Answer 3

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Answer 4

Here are some suggestions to pay down your dept:

1. Pay much more the minimum monthly balance. Pay as much as you can afford or you will never pay over you credit card debt.

2. Cut down on the uneccessary expenses like eating out so often. You will be surprised how much it costs to eat out vs. eating at home.

Answer 5

Quickest way is bankrupcy but that is never a good option.

Other thent that Start by paying off your heighest intrest ones off first.